1
EXHIBIT 10.73
THIS MASTER CONSTRUCTION LINE OF CREDIT AGREEMENT, dated as of August
31, 1999, among the following:
(I) THIRD PARTY INVESTORS I, LLC, a Delaware limited liability
company (herein, together with its successors and assigns, the
"BORROWER");
(II) the lending institutions listed in Annex I hereto (each,
together with their respective successors and assigns, individually a
"LENDER" and collectively, the "LENDERS");
(III) FLEET NATIONAL BANK, a national banking association, and
THE HUNTINGTON NATIONAL BANK, a national banking association, as
Co-Agents hereunder (each a "CO-AGENT"); and
(IV) KEY CORPORATE CAPITAL INC., a Michigan corporation, as
administrative agent (the "ADMINISTRATIVE AGENT"):
PRELIMINARY STATEMENTS:
(1) Unless otherwise defined herein, all capitalized terms used herein
and defined in section 1 are used herein as so defined.
(2) The Borrower has applied to the Lenders for credit facilities to be
made available to the Borrower to finance the construction by the Borrower of up
to 19 separate Projects which are described in the Confidential Information
Memorandum.
(3) The Borrower contemplates that each of its Projects will be
developed under the supervision and direction of, and managed by, or leased to,
Alterra Healthcare Corporation, a Delaware corporation (herein, together with
its successors and assigns, the "GUARANTOR"), or one or more of its Subsidiaries
or Affiliates.
(4) For the avoidance of doubt, it is noted that effective May 19,
1999, the Guarantor adopted its present name, having formerly been known as
Alternative Living Services, Inc.
(5) The Total Commitment provided in this Agreement at the date hereof
is $65,000,000. As provided in section 2.1(f) hereof, the Total Commitment may
be increased by the addition of a single additional Lender providing the
Incremental Commitment of up to $10,000,000.
(6) The Lenders are willing to make Loans to the Borrower, all subject
to and upon the terms and conditions set forth herein and in the other Credit
Documents.
NOW, THEREFORE, it is agreed:
SECTION 1. DEFINITIONS AND TERMS.
1.1. CERTAIN DEFINED TERMS. As used herein, the following terms shall
have the meanings herein specified unless the context otherwise requires:
"ACQUISITION" shall mean and include (i) any acquisition on a going
concern basis (whether by purchase, lease or otherwise) of any facility and/or
business operated by any person, and (ii) acquisitions of a majority of
2
the outstanding equity or other similar interests in any such person (whether by
merger, stock purchase or otherwise).
"ADJUSTED LIBOR RATE" shall mean with respect to each Interest Period
for a LIBOR Loan, (i) the rate per annum which appears on page 3750 of the
Telerate Screen (or on any successor or substitute page, or on any electronic
publication of a recognized service organization providing comparable rate
quotations, in any case as determined from time to time by the Administrative
Agent) for Dollar deposits of $1,000,000 in same day funds for a maturity
corresponding to such Interest Period as of 11:00 A.M. (London time) on the date
which is two Business Days prior to the commencement of such Interest Period,
divided (and rounded upward to the nearest 1/100ths of 1%) by (ii) a percentage
equal to 100% minus the then stated maximum rate of all reserve requirements
(including, without limitation, any marginal, emergency, supplemental, special
or other reserves and without benefit of credits for proration, exceptions or
offsets which may be available from time to time) applicable to any member bank
of the Federal Reserve System in respect of Eurocurrency liabilities as defined
in Regulation D (or any successor category of liabilities under Regulation D).
In the event that such rate is not available at such time for any reason, the
rate referred to in clause (i) above shall be the interest rate per annum equal
to the average (rounded upward to the nearest 1/100ths of 1% per annum), of the
rate per annum at which Dollar deposits of $1,000,000 for a maturity
corresponding to the Interest Period are offered to each of the Reference Banks
by prime banks in the London interbank Eurodollar market, determined as of 11:00
A.M. (London time) on the date which is two Business Days prior to the
commencement of such Interest Period.
"ADMINISTRATIVE AGENT" shall have the meaning provided in the first
paragraph of this Agreement and shall include any successor to the
Administrative Agent appointed pursuant to section 11.9.
"AFFILIATE" shall mean, with respect to any person, any other person
directly or indirectly controlling, controlled by, or under direct or indirect
common control with such person. A person shall be deemed to control a second
person if such first person possesses, directly or indirectly, the power (i) to
vote 10% or more of the securities having ordinary voting power for the election
of directors or managers of such second person or (ii) to direct or cause the
direction of the management and policies of such second person, whether through
the ownership of voting securities, by contract or otherwise. Notwithstanding
the foregoing, (x) a director, officer or employee of a person shall not, solely
by reason of such status, be considered an Affiliate of such person; and (y)
neither the Administrative Agent nor any Lender shall in any event be considered
an Affiliate of the Borrower or any other Credit Party or any of their
respective Subsidiaries.
"AGREEMENT" shall mean this Master Construction Line of Credit
Agreement, as the same may be from time to time further modified, amended and/or
supplemented.
"ALTERRA GUARANTY" shall have the meaning provided in section 6.1(b).
"APPLICABLE LENDING OFFICE" shall mean, with respect to each Lender,
(i) such Lender's Domestic Lending Office in the case of Borrowings consisting
of Prime Rate Loans and (ii) such Lender's LIBOR Lending Office in the case of
Borrowings consisting of LIBOR Loans.
"APPRAISAL REPORT" shall have the meaning provided in section 2.2(b).
"APPRAISED STABILIZED VALUE" shall mean, when used with reference to a
Project, the estimated fair market value thereof on a going concern basis upon
completion and achievement of at least 95% occupancy (or such lesser percentage
as may be acceptable to the Required Lenders, in the exercise of their
reasonable discretion). The Appraised Stabilized Value of a Project shall be
determined without any reduction on account of any (i) special, extraordinary or
other non-recurring charges or expenses associated with a new opening or lease-
up, or (ii) operating deficits prior to full occupancy.
2
3
"ARCHITECT CONTRACT" shall have the meaning provided in section 2.2(b).
"ASSIGNMENT AGREEMENT" shall mean an Assignment Agreement substantially
in the form of Exhibit F hereto.
"ASSIGNMENT OF LEASES" shall have the meaning provided in section
6.2(e).
"AUTHORIZED OFFICER" shall mean with respect to any Credit Party any
officer, manager or employee of such Credit Party designated by such Credit
Party as such in writing to the Administrative Agent.
"BANKRUPTCY CODE" shall have the meaning provided in section 10.1(h).
"BORROWER" shall have the meaning provided in the introductory
paragraph of this Agreement.
"BORROWING" shall mean the incurrence of Loans for a particular Project
by the Borrower from all of the Lenders on a PRO RATA basis on a given date (or
resulting from conversions on a given date), all of which Loans shall be the
same Type of Loan, and in the case of LIBOR Loans, all of which Loans shall have
the same Interest Period.
"BUSINESS DAY" shall mean (i) for all purposes other than as covered by
clause (ii) below, any day excluding Saturday, Sunday and any day which shall be
in the city in which the Payment Office is located a legal holiday or a day on
which banking institutions are authorized by law or other governmental actions
to close and (ii) with respect to all notices and determinations in connection
with, and payments of principal and interest on, LIBOR Loans, any day which is a
Business Day described in clause (i) and which is also a day for trading by and
between banks in London, England, in U.S. dollar deposits in the interbank
Eurodollar market.
"CAPITAL LEASE" as applied to any person shall mean any lease of any
property (whether real, personal or mixed) by that person as lessee which, in
conformity with GAAP, is accounted for as a capital lease on the balance sheet
of that person.
"CAPITALIZED LEASE OBLIGATIONS" shall mean all obligations under
Capital Leases of the Borrower or the Manager on the Borrower's behalf in each
case taken at the amount thereof accounted for as liabilities identified as
"capital lease obligations" (or any similar words) on a consolidated balance
sheet of the Borrower prepared in accordance with GAAP.
"CASH EQUIVALENTS" shall mean any of the following: (i) securities
issued or directly and fully guaranteed or insured by the United States of
America or any agency or instrumentality thereof (PROVIDED that the full faith
and credit of the United States of America is pledged in support thereof) having
maturities of not more than one year from the date of acquisition; (ii) U.S.
dollar denominated time deposits, certificates of deposit and bankers'
acceptances of (x) any Lender or (y) any bank whose short-term commercial paper
rating from S&P is at least A-1 or the equivalent thereof or from Xxxxx'x is at
least P-1 or the equivalent thereof (any such bank, an "APPROVED BANK"), in each
case with maturities of not more than one year from the date of acquisition; and
(iii) investments in money market funds access to which is provided as part of
"sweep" accounts maintained with a Lender or an Approved Bank.
"CERCLA" shall mean the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980, as the same may be amended from time to
time, 42 U.S.C. ss. 9601 ET SEQ.
"CERTIFICATE OF OCCUPANCY" shall mean when used with reference to a
Project a final certificate of occupancy issued by a state or local governmental
authority allowing for the occupancy of all of the units of such Project.
3
4
"CODE" shall mean the Internal Revenue Code of 1986, as amended from
time to time, and the regulations promulgated and the rulings issued thereunder.
Section references to the Code are to the Code, as in effect at the Effective
Date and any subsequent provisions of the Code, amendatory thereof, supplemental
thereto or substituted therefor.
"COLLATERAL" shall mean any collateral covered by any Security
Document.
"COLLATERAL AGENT" shall mean the Administrative Agent acting as
Collateral Agent for the Lenders pursuant to the Security Documents.
"COLLATERAL ASSIGNMENT OF CAPITALIZATION DOCUMENTS" shall have the
meaning provided in section 6.1(b).
"COLLATERAL ASSIGNMENT OF CONTRACTS AND PLANS" shall have the meaning
provided in section 6.2(d).
"COLLATERAL ASSIGNMENT OF LICENSES AND PERMITS" shall have the meaning
provided in section 6.2(d).
"COMMITMENT" shall mean, with respect to each Lender, the amount set
forth opposite such Lender's name in Annex I as its "Commitment" as the same may
be reduced from time to time pursuant to section 4.1, 4.2 and/or 10.2 or
adjusted from time to time as a result of assignments to or from such Lender
pursuant to section 12.4.
"COMMITMENT PERIOD TERMINATION DATE" shall mean the date which is the
12th monthly anniversary of the date hereof, unless such date is extended in
accordance with section 4.3, or in any case such earlier date when the Total
Commitment is terminated in accordance with the terms of this Agreement.
"COMPANY CAPITALIZATION DOCUMENTS" shall have the meaning provided in
section 6.1(c).
"COMPANY EQUITY DOCUMENTS" shall have the meaning provided in section
6.1(c).
"COMPANY ORGANIZATIONAL DOCUMENTS" shall have the meaning provided in
section 6.1(c).
"CONFIDENTIAL INFORMATION MEMORANDUM" shall have the meaning provided
in the Alterra Guaranty as originally certified and delivered.
"CONSOLIDATED NET WORTH" shall mean at any time for the determination
thereof all amounts which, in conformity with GAAP, would be included under the
caption "total members' equity" (or any like caption) on a balance sheet of the
Borrower as at such date, PROVIDED that in no event shall Consolidated Net Worth
include any amounts in respect of Redeemable Stock.
"CONSTRUCTION PERIOD" shall mean, for any Project, the period from (i)
the date of the Notes issued by the Borrower to the Lenders for such Project to
(ii) the earlier of (x) the maturity date for the Loans for such Project, as
extended, if applicable, pursuant to section 2.7(a), or (y) the commencement
date of the Mini-Perm Period for such Project.
"CREDIT DOCUMENTS" shall mean this Agreement, the Notes, each
Environmental Indemnity Agreement, each Management Subordination Agreement, the
Security Documents, the Alterra Guaranty and any Designated Hedge Agreement.
When used with reference to a Credit Party, the term Credit Documents refers
only to those Credit Documents to which such Credit Party is a party.
"CREDIT PARTY" shall mean the Borrower, the Guarantor and each of their
Subsidiaries and Affiliates which is a party to any Credit Document.
4
5
"DEFAULT" shall mean any event, act or condition which with notice or
lapse of time, or both, would constitute an Event of Default.
"DEFAULTING LENDER" shall mean any Lender with respect to which a
Lender Default is in effect.
"DESIGNATED HEDGE AGREEMENT" shall mean any Hedge Agreement to which
the Borrower is a party which is made with reference to some or all of the
Obligations and, pursuant to a written instrument signed by the Administrative
Agent, has been designated as a Designated Hedge Agreement so that the
Borrower's counterparty's credit exposure thereunder will be entitled to share
in the benefits of the Collateral, the Security Documents and the Alterra
Guaranty to the extent the Credit Documents provide guarantees or security for
creditors of the Borrower under Designated Hedge Agreements. The Administrative
Agent may, without the approval or consent of the Lenders, designate a Hedge
Agreement as a Designated Hedge Agreement if (i) the Hedge Agreement is made
with reference to all or any portion of the Obligations, and (ii) the
counterparty is a Lender or an Affiliate of a Lender; PROVIDED, HOWEVER, that if
(x) the counterparty is not a Lender or an Affiliate of a Lender, or (y) the
Administrative Agent reasonably determines that after giving effect to such
designation the aggregate credit exposure of all counterparties under all
Designated Hedge Agreements, determined in accordance with standard industry
practice, would exceed $10,350,000, the Administrative Agent shall not designate
the Hedge Agreement involving such counterparty as a Designated Hedge Agreement
unless such designation is approved by the Required Lenders, and PROVIDED,
FURTHER, that in no event shall the Administrative Agent designate any Hedge
Agreement which is unrelated to the Obligations as a Designated Hedge Agreement
unless all of the Lenders consent to such designation. The Administrative Agent
may impose as a condition to any designation of a Hedge Agreement as a
Designated Hedge Agreement a requirement that the counterparty (x) enter into an
intercreditor or similar agreement with the Administrative Agent to the effect
that, or (y) otherwise expressly agree with the Administrative Agent that,
recoveries from the Borrower or other Credit Parties with respect to such
Designated Hedge Agreement will be shared in accordance with, or otherwise in a
manner consistent with, the provisions of section 10.3 hereof.
"DEVELOPER" shall mean, with respect to a Project, the Guarantor (or
one of its Wholly-Owned Subsidiaries) which is acting as the developer under the
Development Contract for such Project.
"DEVELOPER FEES" shall have the meaning provided in section 2.2(b).
"DEVELOPMENT CONTRACT" shall have the meaning provided in section
6.2(c).
"DOLLARS", "U.S. DOLLARS" and the sign "$" each means lawful money of
the United States.
"DOMESTIC LENDING OFFICE" shall mean, with respect to any Lender, the
office of such Lender specified as its Domestic Lending Office in Annex I or in
the Assignment Agreement pursuant to which it became a Lender, or such other
office of such Lender as such Lender may from time to time specify to the
Borrower and the Administrative Agent.
"DRAW REQUEST" shall have the meaning provided in section 2.3(c).
"DSCR" shall mean, with respect to a Project and for any period, the
ratio of (i) the net income before taxes of such Project for such period, all as
determined in accordance with GAAP, PLUS, to the extent deducted in determining
such net income, the sum of (1) interest, (2) depreciation, (3) amortization,
and (4) management fees, LESS, (A) an assumed management fee equal to 5% of
revenues, and (B) to the extent not deducted as an expense in determining such
net income, a $250 per unit annual repair and replacement reserve, TO (ii)
assumed level debt service obligations (consisting of both principal and
interest) for such Project for such period, based on the weighted average
aggregate principal amount of the Loans for such Project, a 25 year level
monthly payment
5
6
amortization schedule and an assumed interest rate equal to 250 basis points
over the then current yield to maturity on U.S. treasury securities with a
maturity closest to 10 years, as quoted by the Administrative Agent.
"EFFECTIVE DATE" shall have the meaning provided in section 12.11.
"ELIGIBLE TRANSFEREE" shall mean and include a commercial bank,
financial institution or other "accredited investor" (as defined in SEC
Regulation D), in each case which:
(i) is not disapproved in writing by the Borrower in a notice
given to a requesting Lender and the Administrative Agent, specifying
the reasons for such disapproval, within five Business Days following
the giving of notice to the Borrower of the identity of any proposed
transferee (any such disapproval by the Borrower must be reasonable),
PROVIDED that the Borrower shall not be entitled to exercise the
foregoing right of disapproval if and so long as any Event of Default
shall have occurred and be continuing;
(ii) is not a direct competitor of the Borrower or the
Guarantor or engaged in the same or similar business as the Borrower or
the Guarantor; and
(iii) has total assets of at least $10 billion and combined
capital and surplus of at least $1 billion, as reflected on its most
recent financial statements.
"ENVIRONMENTAL CLAIMS" shall mean any and all administrative,
regulatory or judicial actions, suits, demands, demand letters, claims, liens,
notices of non-compliance or violation, investigations or proceedings relating
in any way to any Environmental Law or any permit issued under any such law
(hereafter "CLAIMS"), including, without limitation, (a) any and all Claims by
governmental or regulatory authorities for enforcement, cleanup, removal,
response, remedial or other actions or damages pursuant to any applicable
Environmental Law, and (b) any and all Claims by any third party seeking
damages, contribution, indemnification, cost recovery, compensation or
injunctive relief resulting from the storage, treatment or Release (as defined
in CERCLA) of any Hazardous Materials or arising from alleged injury or threat
of injury to health, safety or the environment.
"ENVIRONMENTAL INDEMNITY AGREEMENT" shall have the meaning provided in
section 6.2.
"ENVIRONMENTAL LAW" shall mean any applicable Federal, state, foreign
or local statute, law, rule, regulation, ordinance, code, binding and
enforceable guideline, binding and enforceable written policy and rule of common
law now or hereafter in effect and in each case as amended, and any binding and
enforceable judicial or administrative interpretation thereof, including any
judicial or administrative order, consent, decree or judgment issued to or
rendered against the Borrower relating to the environment, employee health and
safety or Hazardous Materials, including, without limitation, CERCLA; RCRA; the
Federal Water Pollution Control Act, 33 U.S.C. ss. 2601 ET SEQ.; the Clean Air
Act, 42 U.S.C. ss. 7401 ET SEQ.; the Safe Drinking Water Act, 42 U.S.C. ss. 3803
ET SEQ.; the Oil Pollution Act of 1990, 33 U.S.C. ss. 2701 ET SEQ.; the
Emergency Planning and the Community Right-to-Know Act of 1986, 42 U.S.C. ss.
11001 ET SEQ., the Hazardous Material Transportation Act, 49 U.S.C. ss. 1801 ET
SEQ. and the Occupational Safety and Health Act, 29 U.S.C. ss. 651 ET SEQ. (to
the extent it regulates occupational exposure to Hazardous Materials); and any
state and local or foreign counterparts or equivalents, in each case as amended
from time to time.
"ENVIRONMENTAL REPORT" shall have the meaning provided in section
2.2(b).
"ERISA" shall mean the Employee Retirement Income Security Act of 1974,
as amended from time to time, and the regulations promulgated and rulings issued
thereunder. Section references to ERISA are to ERISA, as in effect at the
Effective Date and any subsequent provisions of ERISA, amendatory thereof,
supplemental thereto or substituted therefor.
6
7
"ERISA AFFILIATE" shall mean each person (as defined in section 3(9) of
ERISA) which together with the Borrower would be deemed to be a "single
employer" (i) within the meaning of section 414(b),(c), (m) or (o) of the Code
or (ii) as a result of the Borrower being or having been a general partner of
such person.
"EVENT OF DEFAULT" shall have the meaning provided in section 10.1.
"EVENT OF LOSS" shall mean, with respect to any Project, (i) the actual
or constructive total loss of such Project or the use thereof, resulting from
destruction, damage beyond repair, or the rendition of such Project permanently
unfit for normal use from any casualty or similar occurrence whatsoever, (ii)
the destruction or damage of a portion of such Project from any casualty or
similar occurrence whatsoever under circumstances in which such damage cannot
reasonably be expected to be repaired, or such Project cannot reasonably be
expected to be restored to its condition immediately prior to such destruction
or damage, within 180 days after the occurrence of such destruction or damage,
(iii) the condemnation, confiscation or seizure of, or requisition of title to
or use of, any substantial portion of such Project, or the Real Property upon
which such Project is located, or (iv) in the case of any Project of the
Borrower which is located on Real Property which is leased by the Borrower, the
termination or expiration of the Borrower's leasehold rights to such Real
Property.
"FEDERAL FUNDS EFFECTIVE RATE" shall mean, for any period, a
fluctuating interest rate equal for each day during such period to the weighted
average of the rates on overnight Federal Funds transactions with members of the
Federal Reserve System arranged by Federal Funds brokers, as published for such
day (or, if such day is not a Business Day, for the next preceding Business Day)
by the Federal Reserve Bank of New York, or, if such rate is not so published
for any day which is a Business Day, the average of the quotations for such day
on such transactions received by the Administrative Agent from three Federal
Funds brokers of recognized standing selected by the Administrative Agent.
"FEES" shall mean all amounts payable pursuant to, or referred to in,
section 3.
"GAAP" shall mean generally accepted accounting principles in the
United States of America as in effect from time to time; it being understood and
agreed that determinations in accordance with GAAP for purposes of section 9,
including defined terms as used therein, are subject to sections 1.3 and
12.7(a).
"GOVERNMENTAL AUTHORITY" shall mean the United States of America, or
any state or political subdivision thereof, and any agency, authority, body,
division, department or instrumentality of any thereof.
"GUARANTY OBLIGATIONS" shall mean as to any person (without
duplication) any obligation of such person guaranteeing any Indebtedness
("PRIMARY INDEBTEDNESS") of any other person (the "PRIMARY OBLIGOR") in any
manner, whether directly or indirectly, including, without limitation, any
obligation of such person, whether or not contingent, (a) to purchase any such
primary Indebtedness or any property constituting direct or indirect security
therefor, (b) to advance or supply funds (i) for the purchase or payment of any
such primary Indebtedness or (ii) to maintain working capital or equity capital
of the primary obligor or otherwise to maintain the net worth or solvency of the
primary obligor, (c) to purchase property, securities or services primarily for
the purpose of assuring the owner of any such primary Indebtedness of the
ability of the primary obligor to make payment of such primary Indebtedness, or
(d) otherwise to assure or hold harmless the owner of such primary Indebtedness
against loss in respect thereof, PROVIDED, HOWEVER, that the term Guaranty
Obligation shall not include endorsements of instruments for deposit or
collection in the ordinary course of business. The amount of any Guaranty
Obligation shall be deemed to be an amount equal to the stated or determinable
amount of the primary Indebtedness in respect of which such Guaranty Obligation
is made or, if not stated or determinable, the maximum reasonably anticipated
liability in respect thereof (assuming such person is required to perform
thereunder) as determined by such person in good faith.
7
8
"HEDGE AGREEMENT" shall mean (i) any interest rate swap agreement, any
interest rate cap agreement, any interest rate collar agreement, any interest
rate "lock" agreement or other similar agreement or arrangement designed to
protect against fluctuations in interest rates, and (ii) any currency swap
agreement, forward currency purchase agreement or similar agreement or
arrangement designed to protect against fluctuations in currency exchange rates.
"HAZARDOUS MATERIALS" shall mean (i) any petrochemical or petroleum
products, radioactive materials, asbestos in any form that is or could become
friable, urea formaldehyde foam insulation, transformers or other equipment that
contain dielectric fluid containing levels of polychlorinated biphenyls, and
radon gas; and (ii) any chemicals, materials or substances defined as or
included in the definition of "hazardous substances", "hazardous wastes",
"hazardous materials", "restricted hazardous materials", "extremely hazardous
wastes", "restrictive hazardous wastes", "toxic substances", "toxic pollutants",
"contaminants" or "pollutants", or words of similar meaning and regulatory
effect, under any applicable Environmental Law.
"HIGHEST LAWFUL RATE" shall mean as to any Lender and with reference to
the Loans made by such Lender to finance a particular Project of the Borrower,
the maximum nonusurious interest rate, if any, that at any time or from time to
time may be contracted for, taken, reserved, charged or received by such Lender
with respect to such Loans under the law applicable to the extensions of credit
represented by such Loans; PROVIDED, that if there is no such maximum rate for
such Lender or for such extensions of credit by such Lender, or if such Lender
is exempt from any such maximum rate, then the provisions of section 12.22 shall
be inapplicable to such Lender and such Loans made by it.
"IMPROVEMENTS" shall mean the residence units and other improvements
for a Project.
"INCREMENTAL COMMITMENT" shall have the meaning provided in section
2.1(f).
"INDEBTEDNESS" shall have the meaning provided in the Alterra Guaranty
as originally executed and delivered.
"INSPECTING CONSULTANT" shall mean, with reference to any Project, the
architect and/or engineer or other construction consultant, or firm of
architects and/or engineers or other construction consultants, engaged by the
Administrative Agent to review the particular Plans and Specifications for such
Project, to consult with the Administrative Agent concerning the construction of
such Project, and/or conduct inspections of such Project.
"INSPECTING CONSULTANT INITIAL REPORT" shall have the meaning provided
in section 2.2(c).
"INSPECTING CONSULTANT PROGRESS REPORT" shall have the meaning provided
in section 2.3(e).
"INTERCREDITOR AGREEMENT" shall mean the Intercreditor Agreement to be
dated September 30, 1999 among the Borrower, the Guarantor and the
Administrative Agent, as the same may be from time to time further modified,
amended and/or supplemented, substantially in the form attached hereto as
Exhibit D-6.
"INTEREST PERIOD" with respect to any LIBOR Loan shall mean the
interest period applicable thereto, as determined pursuant to section 2.10.
"KCCI" shall mean Key Corporate Capital Inc., a Michigan corporation,
together with its successors and assigns.
"LAND" shall mean the Real Property upon which the Improvements of a
Project are located, and any additional Real Property and Leaseholds of the
Borrower related thereto.
8
9
"LEASEHOLDS" of any person means all the right, title and interest of
such person as lessee or licensee in, to and under leases or licenses of land,
improvements and/or fixtures.
"LEGAL REQUIREMENTS" shall mean all laws, statutes, ordinances, rules,
regulations and restrictive covenants affecting any person, its business, its
Real Property, or any of its other properties or assets.
"LENDER" shall have the meaning provided in the first paragraph of this
Agreement and shall include any Lender becoming a party hereto as the provider
of the Incremental Commitment, together with its successors and assigns.
"LENDER DEFAULT" shall mean (i) the refusal (which has not been
retracted) of a Lender in violation of the requirements of this Agreement to
make available its portion of any incurrence of Loans or (ii) a Lender having
notified the Administrative Agent and/or the Borrower that it does not intend to
comply with the obligations under section 2.1.
"LENDER REGISTER" shall have the meaning provided in section 12.17.
"LIBOR LENDING OFFICE" shall mean, with respect to any Lender, the
office of such Lender specified as its LIBOR Lending Office in Annex I or in the
Assignment Agreement pursuant to which it became a Lender, or such other office
or offices for LIBOR Loans of such Lender as such Lender may from time to time
specify to the Borrower and the Administrative Agent.
"LIBOR LOAN" shall mean each Loan bearing interest at the rates
provided in section 2.9(b).
"LIEN" shall mean any mortgage, pledge, security interest, encumbrance,
lien or charge of any kind (including any agreement to give any of the
foregoing, any conditional sale or other title retention agreement or any lease
in the nature thereof).
"LOAN" shall have the meaning provided in section 2.1.
"MANAGEMENT CONTRACT" shall have the meaning provided in section
6.2(c).
"MANAGEMENT SUBORDINATION AGREEMENT" shall have the meaning provided in
section 6.2(d).
"MANAGER" shall mean, with respect to a Project, the Guarantor (or one
of its Wholly-Owned Subsidiaries) which is acting as the manager under the
Management Contract for such Project, or the tenant under the Project Lease for
such Project, as applicable.
"MARGIN STOCK" shall have the meaning provided in Regulation U.
"MATERIAL ADVERSE EFFECT" shall mean any or all of the following: (i)
any material adverse effect on the business, operations, property, assets,
liabilities, condition (financial or otherwise) or prospects of, when used with
reference to the Borrower, the Borrower, or when used with reference to any
other person, such person and its Subsidiaries, taken as a whole, as the case
may be; (ii) any material adverse effect on the ability of the Borrower or any
other Credit Party to perform its obligations under the Credit Documents to
which it is a party; (iii) any material adverse effect on the ability of any
Credit Party and its Subsidiaries, taken as a whole, to pay their liabilities
and obligations as they mature or become due; or (iv) any material adverse
effect on the validity, effectiveness or enforceability, as against any Credit
Party, of any of the Credit Documents to which it is a party.
"MATERIAL SUBSIDIARY" shall mean, at any time, with reference to any
person, any Subsidiary of such person that (i) has assets at such time
comprising 5% or more of the consolidated assets of such person and its
9
10
Subsidiaries or (ii) had net income before interest, taxes, depreciation and
amortization in the most recently ended fiscal year of such person comprising 5%
or more of the consolidated net income before interest, taxes, depreciation and
amortization of such person and its Subsidiaries for such fiscal year.
"MEMBER INTEREST PLEDGE AGREEMENT" shall have the meaning provided in
section 6.1(b).
"MINI-PERM PERIOD" shall mean, for any Project, the period from (i) the
earlier of
(x) the maturity date for the Loans for such Project, as
extended, if applicable, pursuant to section 2.7(a), or
(y) the date the Administrative Agent shall have confirmed in
writing to the Borrower and the Lenders that a Certificate of Occupancy
has been issued for such Project, together with any required
governmental licenses and permits necessary for the Borrower to
commence commercial operation of such Project and all other conditions
set forth in section 2.7(b) have been satisfied,
to (ii) the maturity date for the Loans for such Project, as extended, if
applicable, pursuant to section 2.7(b), on the basis of an election made by the
Borrower as provided in such section 2.7(b). After taking into account the above
provisions, the Administrative Agent shall schedule the commencement date of the
Mini-Perm Period for a Project for the first day of the next succeeding calendar
month.
"MOODY'S" shall mean Xxxxx'x Investors Service, Inc. and its
successors.
"MORTGAGED PROPERTY" shall have the meaning provided in section 6.2(h).
"MP-12 PERIOD" shall mean, for any Project, the period from the
commencement of the Mini-Perm Period for such Project through the expiration of
the first twelve months of such Mini-Perm Period.
"MP-36 PERIOD" shall mean, for any Project, the period from the
expiration of the MP-12 Period for such Project through the expiration of the
Mini-Perm Period.
"MULTIEMPLOYER PLAN" shall mean a multiemployer plan, as defined in
section 4001(a)(3) of ERISA to which the Borrower or any ERISA Affiliate is
making or accruing an obligation to make contributions or has within any of the
preceding three plan years made or accrued an obligation to make contributions.
"MULTIPLE EMPLOYER PLAN" shall mean an employee benefit plan, other
than a Multiemployer Plan, to which the Borrower or any ERISA Affiliate, and one
or more employers other than the Borrower or an ERISA Affiliate, is making or
accruing an obligation to make contributions or, in the event that any such plan
has been terminated, to which the Borrower or an ERISA Affiliate made or accrued
an obligation to make contributions during any of the five plan years preceding
the date of termination of such plan.
"NET PROCEEDS" shall mean, with respect to any disposition (whether
voluntary or as a result of casualty or other occurrence) of any property, the
aggregate cash proceeds resulting therefrom net of (i) reasonable and customary
expenses of sale incurred in connection with such disposition, and other
reasonable and customary fees and expenses incurred, and all federal, state, and
local taxes paid or reasonably estimated to be payable by such person, as a
consequence of such disposition (including, if such person is a "pass through"
tax entity, such taxes payable by such person's owners) and the payment of
principal, premium and interest of Indebtedness secured by the asset which is
the subject of the disposition and required to be, and which is, repaid under
the terms thereof as a result of such disposition, (ii) amounts of any
distributions payable to holders of minority interests in the relevant person or
in the relevant property or assets and (iii) incremental income taxes paid or
payable as a result thereof.
10
11
"1934 ACT" shall mean the Securities Exchange Act of 1934, as amended.
"NON-DEFAULTING LENDER" shall mean each Lender other than a Defaulting
Lender.
"NOTE" shall have the meaning provided in section 2.6(a).
"NOTICE OF BORROWING" shall have the meaning provided in section
2.4(a).
"NOTICE OF CONVERSION" shall have the meaning provided in section 2.8.
"NOTICE OFFICE" shall mean the office of the Administrative Agent at
000 Xxxxx Xxxxxx, 00xx Xxxxx, Xxxxxxx, Xxxxxxxxxx 00000-0000, Attention:
Commercial Real Estate Services Group (telephone: (000) 000-0000; facsimile:
(000) 000-0000), or such other office, located in a city in the United States
Pacific, Midwest or Eastern Time Zone, as the Administrative Agent may designate
to the Borrower from time to time.
"OBLIGATIONS" shall mean all amounts, direct or indirect, contingent or
absolute, of every type or description, and at any time existing, owing by any
Credit Party to (i) the Administrative Agent or any Lender pursuant to the terms
of this Agreement or any other Credit Document, and/or (ii) any other
counterparty creditor of the Borrower under any Designated Hedge Agreement.
"PAYMENT OFFICE" shall mean the office of the Administrative Agent at
000 Xxxxx Xxxxxx, 00xx Xxxxx, Xxxxxxx, Xxxxxxxxxx 00000-0000, Attention:
Commercial Real Estate Services Group (telephone: (000) 000-0000; facsimile:
(000) 000-0000), or such other office, located in a city in the United States
Pacific, Midwest or Eastern Time Zone, as the Administrative Agent may designate
to the Borrower from time to time.
"PBGC" shall mean the Pension Benefit Guaranty Corporation established
pursuant to section 4002 of ERISA, or any successor thereto.
"PERCENTAGE" shall mean at any time for any Lender, the percentage
obtained by dividing such Lender's Commitment by the Total Commitment, PROVIDED,
that if the Total Commitment has been terminated, the Percentage for each Lender
shall be determined by dividing such Lender's Commitment immediately prior to
such termination by the Total Commitment immediately prior to such termination.
"PERMITTED LIENS" shall mean Liens described in section 9.3.
"PERSON" shall mean any individual, partnership, joint venture, firm,
corporation, limited liability company, association, trust or other enterprise
or any government or political subdivision or any agency, department or
instrumentality thereof.
"PLAN" shall mean any multiemployer or single-employer plan as defined
in section 4001 of ERISA, which is maintained or contributed to by (or to which
there is an obligation to contribute by) the Borrower or an ERISA Affiliate, and
each such plan for the five year period immediately following the latest date on
which the Borrower or an ERISA Affiliate maintained, contributed to or had an
obligation to contribute to such plan.
"PLANS AND SPECIFICATIONS" shall mean detailed architectural,
structural, mechanical and electrical plans and specifications for the
Improvements on any particular Project. Such term shall also include any
modifications to any Plans and Specifications previously approved, or deemed
approved, by the Lenders pursuant to section 2.2, if such modifications are
themselves approved, or deemed approved, by all of the Lenders. Failure of a
Lender to respond in writing within 10 Business Days following its receipt of a
written request from the Administrative Agent to indicate its approval or
disapproval of proposed modifications to any Plans and Specifications shall be
deemed an approval of such modifications by such Lender.
11
12
"PREMISES" shall mean, for any Project, the "Premises", as defined in
the Mortgage for such Project.
"PRIME RATE" shall mean, for any period, a fluctuating interest rate
per annum as shall be in effect from time to time which rate per annum shall at
all times be equal to the greater of (i) the rate of interest established by
KeyBank National Association in Cleveland, Ohio, from time to time, as its prime
rate, whether or not publicly announced, which interest rate may or may not be
the lowest rate charged by it for commercial loans or other extensions of
credit; and (ii) the Federal Funds Effective Rate in effect from time to time
PLUS 1/2 of 1% per annum.
"PRIME RATE LOAN" shall mean each Loan bearing interest at the rate
provided in section 2.9(a).
"PROHIBITED TRANSACTION" shall mean a transaction with respect to a
Plan that is prohibited under section 4975 of the Code or section 406 of ERISA
and not exempt under section 4975 of the Code or section 408 of ERISA.
"PROJECT" shall mean an assisted living facility, dementia care
facility and/or Alzheimer's care facility which is owned by the Borrower,
located within the continental United States and has at least 20 residence
units. Such term includes, without limitation, the Land and the Improvements to
be constructed thereon.
"PROJECT CLOSING DATE" shall have the meaning provided in section 6.2.
"PROJECT LEASE" shall have the meaning provided in section 6.2(c).
"PROJECT PACKAGE" shall have the meaning provided in section 2.2(c).
"PROJECT SUMMARY & FEASIBILITY REPORT" shall have the meaning provided
in section 2.2(b). Such term shall also include any modifications to any Project
Summary & Feasibility Report previously approved, or deemed approved, by the
Lenders pursuant to section 2.2, if such modifications are themselves approved,
or deemed approved, by all of the Lenders. Failure of a Lender to respond in
writing within 10 Business Days following its receipt of a written request from
the Administrative Agent to indicate its approval or disapproval of proposed
modifications to any Project Summary & Feasibility Report shall be deemed an
approval of such modifications by such Lender.
"QUALIFIED PROJECT" shall have the meaning provided in section 2.2(a).
"RCRA" shall mean the Resource Conservation and Recovery Act, as the
same may be amended from time to time, 42 U.S.C. ss. 6901 ET SEQ.
"REAL PROPERTY" of any person shall mean all of the right, title and
interest of such person in and to land, improvements and fixtures, including
Leaseholds.
"REDEEMABLE STOCK" shall mean with respect to any person which is a
corporation, any capital stock of such corporation, and with respect to any
person which is not a corporation, any equity interests of such person which are
similar to capital stock, in each case that (i) is by its terms subject to
mandatory redemption, in whole or in part, pursuant to a sinking fund, scheduled
redemption or similar provisions, at any time prior to the latest date when any
Loans could mature under section 2.7 hereof; or (ii) otherwise is required to be
repurchased or retired on a scheduled date or dates, upon the occurrence of any
event or circumstance, at the option of the holder or holders thereof, or
otherwise, at any time prior to the latest date when any Loans could mature
under section 2.7 hereof, other than any such repurchase or retirement
occasioned by a "change of control" or similar event.
12
13
"REFERENCE BANKS" shall mean (i) KeyBank National Association, so long
as KCCI is the Administrative Agent, and (ii) any other Lender or Lenders
selected as a Reference Bank by the Administrative Agent and the Required
Lenders, PROVIDED that if KCCI is no longer the Administrative Agent or any
Reference Bank is no longer a Lender, KeyBank National Association or such other
Reference Bank, as the case may be, shall be replaced by such other Lender or
Lenders as may be selected by the Administrative Agent acting on instructions
from the Required Lenders.
"REGULATION D" shall mean Regulation D of the Board of Governors of the
Federal Reserve System as from time to time in effect and any successor to all
or a portion thereof establishing reserve requirements.
"REGULATION U" shall mean Regulation U of the Board of Governors of the
Federal Reserve System as from time to time in effect and any successor to all
or a portion thereof establishing margin requirements.
"REPORTABLE EVENT" shall mean an event described in section 4043 of
ERISA or the regulations thereunder with respect to a Plan, other than those
events as to which the notice requirement is waived under subsections .22, .23,
.25, .27, .28, .30, .31, .32, .34, .35, .63, .64, .65 or .67 of PBGC Regulation
section 4043.
"REQUIRED LENDERS" shall mean Non-Defaulting Lenders whose outstanding
Loans and Unutilized Commitments constitute at least 66+2/3% of the sum of the
total outstanding Loans and Unutilized Commitments of Non-Defaulting Lenders
(PROVIDED that, for purposes hereof, neither the Borrower, nor any of its
Affiliates, shall be included in (i) the Lenders holding such amount of the
Loans or having such amount of the Unutilized Commitments, or (ii) determining
the aggregate unpaid principal amount of the Loans or Unutilized Commitments).
"RESERVED PORTION OF THE TOTAL COMMITMENT" shall mean (i) when used
with reference to all Projects or the Total Commitment, the amount, determined
by the Administrative Agent from time to time and notified in writing to the
Borrower and the Lenders, as being equal to the anticipated maximum aggregate
principal amount of Loans thereafter to be made to the Borrower to finance
Projects then being financed hereunder; and (ii) when used with reference to a
particular Project, the amount, determined by the Administrative Agent from time
to time and notified in writing to the Borrower and the Lenders, as being equal
to the anticipated maximum aggregate principal amount of Loans thereafter to be
made to the Borrower to finance such Project.
"RETAINAGE AMOUNT" shall have the meaning provided in section 2.3(e).
"SALE AND LEASE-BACK TRANSACTION" shall mean any arrangement with any
person providing for the leasing by the Borrower of any property (except for
temporary leases for a term, including any renewal thereof, of not more than one
year), which property has been or is to be sold or transferred by the Borrower
to such person.
"S&P" shall mean Standard & Poor's Ratings Group, a division of McGraw
Hill, Inc., and its successors.
"SEC" shall mean the United States Securities and Exchange Commission.
"SEC REGULATION D" shall mean Regulation D as promulgated under the
Securities Act of 1933, as amended, as the same may be in effect from time to
time.
"SECTION 5.4(B)(II) CERTIFICATE" shall have the meaning provided in
section 5.4(b)(ii).
"SECURED CREDITORS" shall mean any secured parties under any Security
Document.
13
14
"SECURITY DOCUMENTS" shall mean each document pursuant to which any
Lien or security interest is granted by any Credit Party to the Collateral Agent
as security for any of the Obligations.
"STABILIZATION" shall mean, with reference to a Project, that during
the Mini-Perm Period for the Loans for such Project, all of the following
conditions are satisfied:
(i) actual occupancy of such Project has been at least 80% for
a period of at least the two most recent consecutive fiscal quarters;
(ii) the DSCR for such Project for its most recent two
consecutive fiscal quarters for which financial information has been
delivered to the Lenders hereunder is at least 1.35 to 1.00; and
(iii) based on such information as the Administrative Agent
considers reliable, the Administrative Agent shall have determined that
the foregoing conditions have been satisfied and shall have notified
the Borrower and the Lenders thereof in writing.
The date such notice is given by the Administrative Agent is the date when
Stabilization is considered achieved for purposes of this Agreement and the
other Credit Documents.
"STANDARD PERMITTED LIENS" shall mean:
(i) Liens for taxes not yet delinquent or Liens for taxes
being contested in good faith and by appropriate proceedings for which
adequate reserves (in the good faith judgment of the management of the
Borrower) have been established;
(ii) Liens in respect of property or assets imposed by law
which were incurred in the ordinary course of business, such as
carriers' or warehousemen's Liens and other similar Liens arising in
the ordinary course of business, which do not in the aggregate
materially detract from the value of such property or assets or
materially impair the use thereof in the operation of the business of
the Borrower;
(iii) Liens created by this Agreement or the other Credit
Documents;
(iv) Liens (A) in existence on the Effective Date which secure
Indebtedness permitted by section 9.4(b), or (B) arising out of the
refinancing, extension, renewal or refunding of any such Indebtedness,
PROVIDED that the principal amount of such Indebtedness is not
increased and such Indebtedness is not secured by any additional
assets;
(v) Liens arising from judgments, decrees or attachments in
circumstances not constituting an Event of Default under section
10.1(g);
(vi) Liens (other than any Lien imposed by ERISA) incurred or
deposits made in the ordinary course of business in connection with
workers' compensation, unemployment insurance and other types of social
security; and carrier's Liens, and other Liens to secure the
performance of tenders, statutory obligations, contract bids,
government contracts, performance and return-of-money bonds and other
similar obligations, incurred in the ordinary course of business
(exclusive of obligations in respect of the payment for borrowed
money), whether pursuant to statutory requirements, common law or
consensual arrangements;
(vii) Leases or subleases granted to others not interfering in
any material respect with the business of the Borrower and any interest
or title of a lessor under any lease not in violation of this
Agreement;
14
15
(viii) easements, rights-of-way, zoning or deed restrictions,
minor defects or irregularities in title and other similar charges or
encumbrances not interfering in any material respect with the ordinary
conduct of the business of the Borrower;
(ix) Liens arising from financing statements regarding
property subject to leases not in violation of the requirements of this
Agreement, PROVIDED that such Liens are only in respect of the property
subject to, and secure only, the respective lease (and any other lease
with the same or an affiliated lessor); and
(x) any Lien specifically permitted by the terms of any
Security Document.
"SUBSIDIARY" of any person shall mean and include (i) any corporation
more than 50% of whose stock of any class or classes having by the terms thereof
ordinary voting power to elect a majority of the directors of such corporation
(irrespective of whether or not at the time stock of any class or classes of
such corporation shall have or might have voting power by reason of the
happening of any contingency) is at the time owned by such person directly or
indirectly through Subsidiaries and (ii) any partnership, association, joint
venture or other entity in which such person directly or indirectly through
Subsidiaries, has more than a 50% equity interest at the time.
"TITLE COMPANY" shall have the meaning provided in section 6.2(h).
"TITLE POLICY" shall have the meaning provided in section 6.2(h).
"TOTAL COMMITMENT" shall mean the sum of the Commitments of the
Lenders.
"TYPE" shall mean any type of Loan determined with respect to the
interest option applicable thereto, I.E., a Prime Rate Loan or LIBOR Loan.
"UCC" shall mean the Uniform Commercial Code.
"UNFUNDED CURRENT LIABILITY" of any Plan shall mean the amount, if any,
by which the actuarial present value of the accumulated plan benefits under the
Plan as of the close of its most recent plan year exceeds the fair market value
of the assets allocable thereto, each determined in accordance with Statement of
Financial Accounting Standards No. 87, based upon the actuarial assumptions used
by the Plan's actuary in the most recent annual valuation of the Plan.
"UNITED STATES" and "U.S." each means United States of America.
"UNUTILIZED COMMITMENT" shall mean for any Lender at any time shall
mean the excess of (i) such Lender's Commitment at such time over (ii) the
aggregate principal amount of Loans made by such Lender and outstanding at such
time.
"UNUTILIZED TOTAL COMMITMENT" shall mean, at any time, the excess of
(i) the Total Commitment at such time over (ii) the aggregate principal amount
of all Loans outstanding at such time.
"WHOLLY-OWNED SUBSIDIARY" shall mean each Subsidiary of a person all of
whose capital stock of every class (or other equity interests) are owned
directly or indirectly by such person.
"WRITTEN", "WRITTEN" or "IN WRITING" shall mean any form of written
communication or a communication by means of the internet, telex, facsimile
transmission, telegraph or cable.
15
16
1.2. COMPUTATION OF TIME PERIODS. In this Agreement in the computation
of periods of time from a specified date to a later specified date, the word
"from" means "from and including" and the words "to" and "until" each means "to
but excluding".
1.3. ACCOUNTING TERMS. Except as otherwise specifically provided
herein, all terms of an accounting or financial nature shall be construed in
accordance with GAAP, as in effect from time to time; PROVIDED that, if the
Borrower notifies the Administrative Agent that the Borrower requests an
amendment to any provision of section 8 or 9 hereof to eliminate the effect of
any change occurring after the Effective Date in GAAP or in the application
thereof to such provision (or if the Administrative Agent notifies the Borrower
that the Required Lenders request an amendment to any such provision hereof for
such purposes), regardless of whether any such notice is given before or after
such change in GAAP or in the application thereof, then such provision shall be
interpreted on the basis of GAAP as in effect and applied immediately before
such change shall have become effective until such notice shall have been
withdrawn or such provision amended in accordance with the requirements of this
Agreement.
1.4. TERMS GENERALLY. The definitions of terms herein shall apply
equally to the singular and plural forms of the terms defined. Whenever the
context may require, any pronoun shall include the corresponding masculine,
feminine and neuter forms. The words "include", "includes" and "including" shall
be deemed to be followed by the phrase "without limitation". The word "will"
shall be construed to have the same meaning and effect as the word "shall".
Unless the context requires otherwise, (a) any definition of or reference to any
agreement, instrument or other document herein shall be construed as referring
to such agreement, instrument or other document as from time to time amended,
supplemented or otherwise modified (subject to any restrictions on such
amendments, supplements or modifications set forth herein), (b) any reference
herein to any person shall be construed to include such person's successors and
assigns, (c) the words "herein", "hereof" and "hereunder", and words of similar
import, shall be construed to refer to this Agreement in its entirety and not to
any particular provision hereof, (d) all references herein to sections, Annexes
and Exhibits shall be construed to refer to sections of, and Annexes and
Exhibits to, this Agreement, and (e) the words "asset" and "property" shall be
construed to have the same meaning and effect and to refer to any and all real
property, tangible and intangible assets and properties, including cash,
securities, accounts and contract rights, and interests in any of the foregoing.
SECTION 2. AMOUNT AND TERMS OF LOANS.
2.1. COMMITMENTS FOR LOANS, ETC. (a) Subject to and upon the terms and
conditions set forth in this Agreement, each Lender severally agrees to make
separate loans (each a "LOAN" and, collectively, the "LOANS") to the Borrower to
finance any Project which has been qualified hereunder in accordance with
section 2.2 as a Qualified Project, which Loans shall be drawn in accordance
with the following provisions and disbursed by the Administrative Agent to or
for the benefit of the Borrower as provided in section 2.3 hereof:
(1) Loans to the Borrower may be made at any time and from
time to time on and after the Effective Date, PROVIDED that (A) no
Loans may be incurred by the Borrower to finance a particular Project
of the Borrower after the commencement of the Mini-Perm Period for the
Loans related to such Project, (B) no Loans may be incurred by the
Borrower for a particular Project after the Commitment Period
Termination Date, UNLESS the initial Borrowing by the Borrower for such
Project has occurred prior thereto, and (C) no Loans may be incurred
after the Total Commitment has been terminated in accordance with
section 4 or section 10.2;
(2) Loans made by a Lender shall not exceed for such Lender at
any time outstanding the Commitment of such Lender at such time;
(3) Loans shall be made and denominated only in United States
Dollars;
16
17
(4) the aggregate principal amount of Loans made to the
Borrower to finance any particular Project shall not exceed
$15,000,000;
(5) the aggregate principal amount of Loans made to the
Borrower to finance a particular Project shall not exceed the lowest of
the following:
(A) 75% of the aggregate budgeted costs and expenses
of the acquisition and construction of such Project and
operation thereof, as reflected in the Project Summary &
Feasibility Report for such Project (including any amendments
thereto or modifications thereof), which has been approved, or
deemed approved, by the Administrative Agent and the Lenders,
(B) 75% of the aggregate amount of such costs and
expenses which are actually incurred, and
(C) 75% of the Appraised Stabilized Value of such
Project;
(6) if at the time any Loans are to be made to the Borrower to
finance a particular Project, the Administrative Agent determines, in
its discretion, that (x) the amount required to pay all costs and
expenses which the Administrative Agent reasonably estimates remain to
be incurred and/or paid in connection with the construction and
completion of such Project and the operation thereof until the date
Stabilization is likely to be achieved for such Project, net of actual
and/or reasonably projected revenues for such Project during such
period, EXCEEDS (y) the remaining Reserved Portion of the Total
Commitment allocated by the Administrative Agent for such Project, THEN
the Administrative Agent shall notify the Borrower, the Guarantor and
the Lenders of such determination, and thereafter no additional Loans
shall be made to the Borrower for such Project until the Borrower
shall, in response to such notification, have paid from its own funds
or shall have caused the Guarantor to have paid, in cash costs and
expenses incident to construction, completion and operation of such
Project in an aggregate amount at least equal to such differential and
the Administrative Agent shall have been provided with evidence,
satisfactory to it, that such cash amount has been so applied;
(7) except as otherwise provided, Loans made to the Borrower
pursuant to a Borrowing shall be incurred and maintained as LIBOR
Loans; and
(8) once prepaid or repaid, Loans may not be reborrowed,
EXCEPT that any Loans then outstanding may be prepaid and reborrowed
solely to accommodate the joinder in this Agreement of the additional
Lender providing the Incremental Commitment, as contemplated by section
2.1(f).
The Administrative Agent may determine from time to time, in the exercise of its
reasonable discretion, upon the basis of the above provisions, the Project
Summary & Feasibility Reports provided for the Projects being financed
hereunder, and such other information as it considers relevant and reliable, (x)
the Reserved Portion of the Total Commitment, (y) the Reserved Portion of the
Total Commitment allocable to particular Projects, and (z) whether any portion
of the Unutilized Total Commitment remains available for lending by the Lenders
for any additional Projects hereunder. The Administrative Agent shall promptly
notify the Lenders, the Borrower and the Guarantor in writing from time to time
of any such determination. Such determinations shall be final and conclusive as
to the matters so determined.
(b) Unless and until the Administrative Agent shall have received
written notice from the Borrower revoking the authorization contained in this
section 2.1(b) the Borrower hereby authorizes the Guarantor to give all notices,
make all elections and otherwise take all actions on its behalf under the
provisions of this Agreement and the other Credit Documents as fully as if the
Borrower had itself done the same, with all such notices,
17
18
elections and other actions by the Guarantor which purport to be on behalf of
the Borrower and are given, made or taken prior to such revocation being
sufficient, without any further action or authorization by the Borrower, to bind
the Borrower. Unless and until such authorization is revoked as provided above,
the Guarantor shall have responsibility for general cash management matters of
the Borrower, including the making of Borrowings, the making of all payments
with respect thereto, and the disbursement of the proceeds of Loans.
(c) To the maximum extent feasible, the Borrower will coordinate
Borrowings of additional Loans so that, unless the Required Lenders otherwise
agree, all Borrowings by the Borrower of additional Loans during a calendar
month shall be made on the same day, and except for Borrowings of additional
Loans made to pay interest or Fees hereunder, there shall not be more than one
day during a calendar month on which there are any Borrowings of additional
Loans made hereunder.
(d) All Borrowings from the Lenders shall be made by the Lenders PRO
RATA on the basis of their respective Commitments. It is understood that no
Lender shall be responsible for any default by any other Lender in its
obligation to make Loans hereunder and that each Lender shall be obligated to
make the Loans provided to be made by it hereunder, regardless of the failure of
any other Lender to fulfill its Commitment hereunder.
(e) The Borrower will confirm in writing to the Administrative Agent
from time to time upon request (i) the date and principal amount of each Loan
incurred by the Borrower hereunder, and (ii) the particular Project to which
such Loan relates.
(f) During the 90 day period following the Effective Date the
Administrative Agent may at the request of the Borrower arrange for one
additional financial institution, which shall be an Eligible Transferee, to
become a Lender hereunder and for an increase in the Total Commitment by up to
$10,000,000 to accommodate the Commitment of such Lender (the "INCREMENTAL
COMMITMENT"). The Incremental Commitment will, if implemented, be reflected in
an amendment to this Agreement, satisfactory in form and substance to the
Required Lenders, pursuant to which any outstanding Loans made by the then
Lenders either will be prepaid and refunded by new Loans made by all of the
Lenders, including the new Lender added to provide the Incremental Commitment or
will otherwise be restructured in a manner determined by the Administrative
Agent as appropriate to avoid the payment of unnecessary costs and expenses,
including state transactional taxes, all in an effort to incorporate the
Incremental Commitment.
2.2. PROJECT QUALIFICATION; APPROVAL OF PROJECT PACKAGES BY LENDERS,
ETC.
(A) LENDER APPROVAL REQUIRED. Prior to the Borrower obtaining any Loans
hereunder for a Project, such Project must be approved (or deemed approved) by
all Lenders as provided in section 2.2(c). Once so approved, a Project shall be
considered a "QUALIFIED PROJECT".
(B) BORROWER TO SUPPLY DOCUMENTATION TO ADMINISTRATIVE AGENT IN
ANTICIPATION OF QUALIFICATION OF A PROJECT. The Borrower will, at its own cost
and expense, obtain and deliver, or cause to be obtained and delivered, to the
Administrative Agent the information and documentation identified below
sufficiently in advance of the date that the Borrower desires a particular
Project to be qualified hereunder and for the Borrower to incur Loans hereunder
to finance such Project, in order that the Administrative Agent may (i) examine
and be satisfied with such items, (ii) obtain an Inspecting Consultant Initial
Report for such Project, and (iii) distribute a Project Package and any
Supplemental Project Package to the Lenders, and the Lenders may respond
thereto, as contemplated hereby, on a timely basis:
(1) PLANS AND SPECIFICATIONS. Unless the Project has been
completed and a Certificate of Occupancy issued with respect thereto,
the Plans and Specifications for such Project and the Improvements
which are being or are to be constructed thereon, together with
evidence that such Plans and Specifications have been approved by (or
will in the normal course of business, without undue
18
19
difficulty, be approved by) all Governmental Authorities in accordance
with all applicable Legal Requirements.
(2) PROJECT SUMMARY & FEASIBILITY REPORT. A written report (a
"PROJECT SUMMARY & FEASIBILITY REPORT"), prepared by or on behalf of
the Borrower in a standardized format acceptable to the Administrative
Agent, concerning the proposed Project, (i) describing such proposed
Project in reasonable detail, (ii) indicating whether or not such
Project is one of the types of projects previously financed hereunder,
and if such Project involves any material deviations from the Plans and
Specifications for such previously financed Project, describing such
deviations in reasonable detail, (iii) containing a detailed
construction cost estimate (or actual construction costs if the Project
has been completed and a Certificate of Occupancy issued with respect
thereto), including sufficient interest reserve for construction and
lease-up, a contingency of at least 5% of total costs and expenses
(exclusive of Land), information on all developer or similar fees (such
fees to be paid to third parties other than the Guarantor not to exceed
$200,000 for any Project) (collectively, "DEVELOPER FEES") relating to
such Project, and a 2-year estimated cash flow analysis (or such longer
period as is necessary to include commercial operation following
achievement of lease-up to approximately 95% of maximum occupancy), and
(iv) containing other cost, feasibility, demographic, and competition,
absorption and other marketing information and analysis (including
vacancies and rates of any existing competing facilities), with respect
to such Project. The Developer Fees payable to the Guarantor for a
Project shall not exceed an amount equal to 7% of the direct costs of
such Project (exclusive of pre-occupancy expenses, lease-up deficits
and financing costs), and shall not be payable earlier than (i) as to
5%, on completion of market approval, site zoning and permitting and
completion of land acquisition, and (ii) as to the remaining 2%, on
completion of construction and upon the receipt of a Certificate of
Occupancy.
(3) ENVIRONMENTAL REPORT. A "Phase I" (or if required by the
Collateral Agent, a "Phase II") environmental report (an "ENVIRONMENTAL
REPORT"), dated not more than six (6) months prior to the date of
submission to the Lenders under section 2.2(c) and addressed to the
Lenders and the Collateral Agent or accompanied by separate letter
indicating that the Collateral Agent and the Lenders may rely thereon,
from a nationally recognized environmental consultant acceptable to the
Required Lenders and the Collateral Agent, covering the Real Property
associated with such Project and the operations and activities to be
conducted thereon, and including the opinion of such consultant to the
effect that (i) such Real Property is currently in compliance with
Environmental Laws, (ii) there are no known or reasonably foreseeable
risks of liability for costs or expenses of remediation, or for
liability to others, under or in connection with any Environmental
Laws, for any pre-existing conditions or events associated with such
Real Property, or if any such risks are identified by such consultant
in its Environmental Report, they are, as to amount and degree of risk,
acceptable risks, (iii) construction and operation of the proposed
Project thereon, as proposed by the Borrower, does not appear to
involve any unusual risks of liability for violations of Environmental
Laws, and (iv) such consultant does not recommend any further
investigation or study of such Real Property with respect to
environmental matters which may be associated therewith.
(4) APPRAISAL. A written appraisal report (an "APPRAISAL
REPORT") establishing (x) the estimated fair market value of the Land
and Improvements included in the Project, and (y) the estimated
Appraised Stabilized Value of the Project, dated as of a recent date
(and in any event within 6 months) and addressed to the Lenders and the
Collateral Agent or accompanied by separate letter indicating that the
Collateral Agent and the Lenders may rely thereon, from a nationally
recognized appraisal firm which is a Member of the American Institute
of Real Estate Appraisers (or has a corresponding professional
designation) and is acceptable to the Required Lenders and the
Collateral Agent. Such appraisal report shall be prepared in accordance
with the Uniform Standards of Professional Appraisal Practice
applicable to Federally Related Transactions as set out in Appendix A
to the real estate appraisal regulations adopted by the Office of the
Comptroller of the Currency pursuant to the Financial
19
20
Institutions Reform, Recovery and Enforcement Act of 1989 ("FIRREA")
(Sub-part C of 12 C.F.R. 34) and shall also be prepared in response to
an engagement letter to be issued by the Administrative Agent or the
Collateral Agent.
(5) GENERAL CONTRACT, ETC. Unless such Project shall have been
completed and a Certificate of Occupancy issued with respect thereto,
(i) a copy, certified as true, correct, complete and in full force and
effect, of a general construction contract (a "GENERAL CONTRACT") for
the construction of such Project; (ii) if required by the
Administrative Agent, a copy of such general contractor's currently
effective license or other authorization to act as a contractor in the
jurisdiction in which the Project is located and Contractor's
Qualification Statement (AIA Form 305A); (iii) if required by the
Administrative Agent in cases where the general construction contract
is not on a guaranteed fixed price basis, a certified list of all
proposed subcontractors to be used in connection with the construction
of such Project whose work in the case of any individual subcontractor
is reasonably expected to exceed $500,000, and, to the extent that the
same have been entered into, certified copies of all contracts with
such subcontractors; (iv) a copy, certified as true, correct, complete
and in full force and effect, of the contract with the architect (an
"ARCHITECT CONTRACT") retained in connection with the construction of
such Project, together with evidence of professional liability
insurance carried by such architect; and (v) if the contractor is not
the Guarantor or a wholly-owned Subsidiary of the Guarantor and if
otherwise required by the Lenders as a condition to approval of such
Project as a Qualified Project, a copy, certified as true, correct,
complete and in full force and effect, of a performance or similar bond
(a "PERFORMANCE BOND"), covering the contractor's performance of such
contract, issued by an insurance company or bonding company whose
financial condition and claims paying ability are satisfactory to the
Lenders in their sole discretion, and otherwise satisfactory in form
and substance to the Lenders in their sole discretion. The Lenders
shall have the right to request a Performance Bond within thirty (30)
days following the initial funding of Loans for a Project, and the
Borrower shall provide same within thirty (30) days thereafter.
(C) SUBMISSION OF PROJECT PACKAGES TO LENDERS. Promptly after the
Administrative Agent receives for a proposed Project all of the applicable items
specified in section 2.2(b), and the Inspecting Consultant Initial Report for
such Project if required below, and determines that such items are satisfactory
to it, the Administrative Agent will assemble and furnish to the Lenders a
package (a "PROJECT PACKAGE") consisting of copies of the following items:
(1) the Project Summary & Feasibility Report;
(2) the Environmental Report;
(3) the Appraisal Report;
(4) unless such Project shall have been completed and a
Certificate of Occupancy issued with respect thereto, the General
Contract unless the contractor is the Guarantor or a wholly-owned
Subsidiary of the Guarantor, Performance Bond (if required) and other
documentation contemplated by section 2.2(b)(5) (but not including the
Plans and Specifications or Architect Contract); and
(5) unless such Project shall have been completed and a
Certificate of Occupancy issued with respect thereto, a favorable
written report (an "INSPECTING CONSULTANT INITIAL REPORT") prepared by
the Inspecting Consultant approving the Plans and Specifications for
such Project and indicating that in its opinion, the construction of
the Improvements for such Project can be achieved at a total cost not
to exceed the cost estimate contained in the Project Summary &
Feasibility Report, and covering such other matters incident to such
Project as the Administrative Agent shall have requested be covered
thereby.
20
21
Notwithstanding the above, the Administrative Agent may, in its discretion,
furnish any of the component items of a Project Package to the Lenders at
different times as they become available and are determined by the
Administrative Agent to be acceptable to it. In such event, the date the Project
Package for a Project is considered delivered to any Lender shall be the date
when all of the items in the Project Package have been received by such Lender.
Each Lender shall advise the Administrative Agent in writing, within 10 Business
Days after its receipt of a Project Package, whether it approves or disapproves
of the items included in the Project Package, EXCEPT that if a Lender receives
Project Packages for more than a total of 3 Projects within any 10 Business Day
period, the due date for the response by such Lender to any particular Project
Package so received shall be extended to 15 Business Days after its receipt of
such Project Package. Any such approval or disapproval shall be within the
complete and unfettered discretion of a Lender, and shall be notified to the
Administrative Agent by a letter or other communication substantially in the
form attached as Exhibit G hereto. Failure of a Lender to so communicate its
approval or disapproval within the applicable time period specified above shall
be deemed an approval of all items included in the Project Package by such
Lender. If all of the items in a Project Package are approved, or deemed
approved, by all of the Lenders, such Project shall be considered approved by
the Lenders as, and shall constitute, a Qualified Project.
If any of the Lenders provide written notice to the Administrative
Agent, the other Lenders and the Borrower that, based upon its review of a
Project Package, the Project covered thereby is not and will not be approved by
such Lender as a Qualified Project unless and until specified additional
requirements and/or conditions are met or satisfied, such Lender may do so, and
the Borrower shall respond to such notice by giving the Administrative Agent and
the Lenders written notice of its intention to meet or satisfy such additional
requirements and/or conditions, or withdraw such Project from consideration for
financing hereunder. If the Borrower so notifies the parties that it intends to
meet or satisfy such additional requirements and/or conditions, and thereafter
within 30 days does in fact meet or satisfy such additional requirements and/or
conditions, and provide to the Administrative Agent such evidence as the
Administrative Agent considers sufficient to establish that such additional
requirements or conditions are timely met and satisfied, then the Administrative
Agent is authorized to notify the Borrower and the Lenders that such Project has
become a Qualified Project.
Notwithstanding the above, the Administrative Agent need not assemble
and distribute a Project Package if (i) an Event of Default shall have occurred
and be continuing, or (ii) it shall have determined, in its reasonable
discretion, that the aggregate principal amount of Loans to be made hereunder to
finance a proposed Project through construction, completion and full commercial
operation until the date Stabilization is likely to be achieved, together with
the aggregate principal amount of Loans thereafter to be made to finance all
other Projects then being financed hereunder, would likely exceed the Unutilized
Total Commitment in effect at such time.
(D) NOTICE OF QUALIFICATION; ALLOCATION OF RESERVED PORTION OF THE
TOTAL COMMITMENT. At the time a Project becomes a Qualified Project, the
Administrative Agent will notify the Borrower, the Guarantor and the Lenders
thereof and of the portion of the Unutilized Total Commitment which the
Administrative Agent is designating as the Reserved Portion of the Total
Commitment for such Qualified Project.
2.3. DRAW REQUESTS AND PROCEDURES. Subject to the terms and conditions
hereof, the Borrower may obtain proceeds of Loans made to it hereunder, from
time to time, only for payment of construction costs of the Improvements to a
Qualified Project, as such construction occurs, for payment of other costs
incurred as contemplated by the Project Summary & Feasibility Report related
thereto, and for interest and other amounts payable by the Borrower hereunder
and under the other Credit Documents to which the Borrower is a party. The
Borrower will comply with the following procedures and requirements in
connection with any Notice of Borrowing relating to Loans to be used as
contemplated hereby:
(a) Draw Requests shall be submitted on behalf of the Borrower
to the Administrative Agent not more frequently than monthly for each
Project, EXCEPT that, notwithstanding the foregoing, a Draw Request and
related Notice of Borrowing of Loans shall be deemed to have been
submitted on
21
22
behalf of the Borrower, resulting in the incurrence of Loans which are
Prime Rate Loans (unless the Borrower shall have made arrangements with
the Administrative Agent for such Loans to be LIBOR Loans and for the
initial Interest Period for such LIBOR Loans), at such times and in
such amounts as are necessary to pay interest on the Loans and any
other amounts payable by the Borrower under the Credit Documents.
(b) At least 10 Business Days before the date on which the
Borrower desires disbursements to the Borrower of Loan proceeds, the
Borrower shall submit to the Administrative Agent a series of Draw
Requests, one for each Project.
(c) Any requisition for disbursement of Loan proceeds (a "DRAW
REQUEST") shall include (x) as to "hard costs", AIA Form G702, or such
other standardized forms or formats for information typically used by
the Borrower as shall be reasonably acceptable to the Administrative
Agent, accompanied by a cost breakdown, the accuracy of which shall be
certified by or on behalf of the Borrower, and (y) as to "soft costs",
a standardized request form, containing such information and/or
documentation, certified by or on behalf of the Borrower, as the
Administrative Agent may reasonably require hereunder.
(d) The Administrative Agent's "Request for Payment" form
shall serve as the disbursement control for each line item. Borrowings
shall not be made or Loan proceeds disbursed for any line item in
excess of the amount shown for such item in such "Request for Payment"
form.
No disbursement of Loan proceeds shall be made by the
Administrative Agent hereunder for any material additions to or
increases in any identifiable portion of the cost of construction of
the Improvements as reflected in the specific Plans and Specifications
for a particular Project or the Project Summary & Feasibility Report,
UNLESS either (x) such additions and/or increases have been reflected
in a modification of the Plans and Specifications or the Project
Summary & Feasibility Report delivered to and satisfactory in all
respects to the Administrative Agent and the Required Lenders, in their
reasonable discretion, or (y) the increases do not exceed $50,000 as to
any particular item or $100,000 in the aggregate for a particular
Project.
At or about the time a Certificate of Occupancy is issued for
a Project, the Administrative Agent will review the interest reserve
and working capital/operating deficit components of the budget included
in the Project Summary & Feasibility Report for such Project to make
sure they continue to be sufficient in the Administrative Agent's
judgment. If at such time the Administrative Agent considers such
components insufficient, the Administrative Agent will re-allocate such
amount of the remaining hard cost contingency to or among such
components, to the extent necessary, in its judgment, for such
components to be sufficient for their purposes.
No disbursement of Loan proceeds shall be made by the
Administrative Agent hereunder (i) for payment of Developer Fees to the
Guarantor in excess of 7% of the direct costs of such Project
(exclusive of pre-occupancy expenses, lease-up deficits and financing
costs), which Developer Fees shall not be payable earlier than (x) as
to 5% on completion of market approval, site zoning and permitting and
completion of land acquisition by the Borrower, and (y) as to the
remaining 2% upon completion of the Project to which such Developer
Fees relate and issuance of a Certificate of Occupancy with respect
thereto, or (ii) for any Developer Fees in excess of those identified
in the Project Summary & Feasibility Report. No unused contingency
included in the Project Summary & Feasibility Report shall be available
for any disbursement for Developer Fees unless (i) a Certificate of
Occupancy has been issued for the Project, and (ii) if the budgeted or
actual costs and expenses of the Project have exceeded the Appraised
Stabilized Value of the Project, such differential has previously been
met by additional cash payments by
22
23
the Borrower of costs and expenses of the Project beyond those
contemplated to be paid by the Borrower as described in the Project
Summary & Feasibility Report.
(e) The aggregate principal amount of Loan proceeds used as
construction disbursements for a Project shall not at any time exceed
an amount equal to (i) the percentage of completion, as determined by
the Administrative Agent as provided below, TIMES (ii) the estimated
total Project costs included in the Project Summary & Feasibility
Report, as modified from time to time, for such Project, MINUS (iii) an
amount (the "RETAINAGE AMOUNT") equal to the greater of (x) 5% of the
value of all construction work on such Project which has been
completed, or (y) such greater percentage of work completed as to which
the Borrower is entitled to withhold payment as a retainage under the
principal construction contract for such Project.
In determining the percentage of completion, the
Administrative Agent shall utilize (i) the information contained in the
Draw Requests, (ii) the supporting materials provided in connection
therewith, and (iii) the Inspecting Consultant Progress Reports.
It shall be a condition to construction disbursements
reflecting any particular percentage of completion of construction that
the Administrative Agent shall have actually received a preliminary
report of the Inspecting Consultant (an "INSPECTING CONSULTANT PROGRESS
REPORT") approving for payment the hard cost items in the related Draw
Request.
Following receipt of an Inspecting Consultant Progress Report
and disbursement of Loan proceeds as contemplated thereby, the
Administrative Agent shall require the Inspecting Consultant to reissue
such Report in final detailed form, certifying that (1) the Inspecting
Consultant made a physical inspection of the Project on a specified
date, (2) the actual construction completed as of such date conforms to
the percentage completion reflected in the applicable Draw Request, (3)
the construction of the Improvements theretofore completed, if any, has
been performed substantially in accordance with the Plans and
Specifications, (4) the quality of construction of the Improvements
theretofore completed is in accordance with generally accepted
standards in the construction industry for the construction of similar
improvements, (5) the then estimated total cost of the construction of
the Improvements, (6) the nondisbursed portion of the Loans as shown on
the budget plus any equity contribution made or to be made by Borrower
is adequate to complete the construction of the Improvements pursuant
to the Plans and Specifications, and (7) that the completion of the
Improvements will reasonably occur within 18 months of commencement of
construction.
The Borrower shall make arrangements for advance payment or
reimbursement by the Borrower of the fees and expenses of the
Inspecting Consultant in making any such physical inspections and
Inspecting Consultant Progress Reports.
(f) Following completion of construction of a Project, the
aggregate principal amount of Loan proceeds used as disbursements for
operating deficits of such Project shall not at any time exceed the
amount of operating deficits identified as part of the estimated total
Project costs included in the Project Summary & Feasibility Report, as
modified from time to time, for such Project. Draw Requests covering
such operating deficits may be submitted by the Borrower on an
estimated basis. If the Administrative Agent determines at any time on
the basis of detailed financial information for a Project delivered
pursuant to section 8.1 hereof that the disbursements of Loan proceeds
for operating deficits for any month or other period have exceeded the
actual operating deficit for such month or other period by more than
$50,000, further disbursements of Loan proceeds to cover operating
deficits for such Project shall be reduced to such levels as the
Administrative Agent reasonably determines is necessary to avoid an
imbalance between actual operating deficits and the operating deficits
covered by and funded pursuant to Draw Requests. If at any time after
the Administrative Agent determines that no additional
23
24
disbursements to cover operating deficits of a Project are anticipated
hereunder, the Administrative Agent determines on the basis of detailed
financial information for a Project delivered pursuant to section 8.1
hereof that the disbursements of Loan proceeds for operating deficits
of a Project have exceeded the actual operating deficits of such
Project, the Administrative Agent may, upon not less than two Business
Days' prior written notice to the Borrower, require the Borrower to
prepay its Loans for such Project, on a date reasonably selected by the
Administrative Agent so as to minimize any breakage compensation
payable under section 2.12 and notified to the Borrower, in an
aggregate principal amount at least sufficient to eliminate such
excess.
(g) The Borrower shall furnish the Administrative Agent, the
Collateral Agent and the Title Company with any evidence, lien waivers,
or affidavits required by the Title Company if any liens of
contractors, subcontractors or materialmen would appear on the
endorsement to be issued with respect to the applicable Title Policy
covering any disbursement of Loan proceeds.
(h) The Administrative Agent may, at its election, disburse
the proceeds of Loans made to the Borrower (i) to the Borrower, (ii) to
an account established by Borrower that the Manager of the Project to
which such Loans relate may access, (iii) directly to the persons
furnishing labor or materials who have furnished bills for labor or
materials (which bills have been approved for payment by the Borrower
(or by the applicable Manager on its behalf), if no Event of Default is
in existence), or (iv) as otherwise requested by the Borrower, in any
such case to be used for the purposes covered by the applicable Draw
Request.
(i) Disbursement of Loan proceeds to or on behalf of the
Borrower to finance a Project may be made to cover the cost of
materials stored on the Premises of such Project for a time period of
not more than 180 days, PROVIDED the same are adequately secured and
insured. No disbursement of Loan proceeds will be made to or on behalf
of the Borrower based on the cost of materials not stored on the
Premises of such Project, unless (i) such materials are stored in
licensed and bonded warehouses, (ii) the Borrower has provided written
notice to the Collateral Agent and the Inspecting Consultant of an
impending Draw Request covering such materials two weeks prior to the
submission of the Draw Request, (iii) such materials are fully insured
in an amount and with an insurance company reasonably satisfactory to
the Administrative Agent and the Administrative Agent is provided a
certificate of insurance evidencing such insurance, (iv) the Collateral
Agent shall have received such documentation as is necessary to perfect
its lien and security interest in such materials, and (v) such
materials are incorporated into the Improvements within 120 days of
initial storage.
(j) In the case of the final Draw Request for a Project, the
Administrative Agent shall, if any amounts to be financed thereby are
not scheduled to be immediately applied to costs and expenses of the
Project, deposit the portion of the Loan proceeds which are not so
intended to be immediately applied in an interest bearing cash
collateral account, bearing interest for the benefit of the account,
over which the Administrative Agent shall have complete and exclusive
control and dominion. If no Event of Default shall have occurred and be
continuing, the Administrative Agent shall, from time to time upon
request of the Borrower, disburse such funds in such cash collateral
account for the payment of interest on the Loans or for other Project
costs set forth in the Budget but not yet paid. If an Event of Default
has occurred and is continuing, the Administrative Agent shall apply
any funds remaining in such cash collateral account as provided in
section 10.3. If any unused funds remain in such cash collateral
account after application as provided above, such amounts shall be
applied as a prepayment of the Loans.
(k) On a monthly basis, for each Project on which Loan
proceeds are advanced pursuant to a Draw Request, the Administrative
Agent shall provide to each Lender a copy of the Draw Request, a copy
of the Inspecting Consultant Progress Report and the endorsement issued
with respect to the applicable Title Policy covering such disbursement
of Loan proceeds.
24
25
(l) Upon the initial funding of Loans related to the Project
located in Highlands Ranch, Colorado, Loan proceeds in an agreed upon
amount shall be deposited by the Administrative Agent in an interest
bearing cash collateral account, bearing interest for the benefit of
the account, over which the Administrative Agent shall have complete
and exclusive control and dominion. If no Event of Default shall have
occurred and be continuing, upon delivery of the Certificate of
Occupancy with respect to the such Project as required by section 8.7,
the Administrative Agent shall disburse to the Borrower such withheld
Loan proceeds. If an Event of Default has occurred and is continuing,
the Administrative Agent shall apply such funds in such cash collateral
account as provided in section 10.3. If any unused funds remain in such
cash collateral account after application as provided above, such
amounts shall be applied as a prepayment of the Loans.
2.4. NOTICE OF BORROWING. (a) Whenever the Borrower desires to incur
Loans to cover disbursements which are covered by a Draw Request or Draw
Requests and may otherwise be incurred by the Borrower as contemplated by
sections 2.1 and 2.3, the Borrower shall give the Administrative Agent at its
Notice Office, prior to 10:00 A.M. (local time at its Notice Office), at least
three Business Days' prior written notice of each Borrowing to be made
hereunder. Each such notice (each such notice, a "NOTICE OF BORROWING") shall be
substantially in the form of Exhibit B-1, and in any event shall be irrevocable
and shall specify: (i) the particular Project or Projects to which such Loans
will relate, and the aggregate principal amount of the Loans to be made for such
Project or Projects pursuant to any such Borrowing; (ii) the date of the
Borrowing (which shall be a Business Day); (iii) whether any such Borrowing
shall consist of Prime Rate Loans or LIBOR Loans; and (iv) if any requested
Borrowing consists of LIBOR Loans, the Interest Period to be initially
applicable thereto. Notwithstanding anything contained in the foregoing to the
contrary, all Loans related to a particular Project must be of the same Type.
The Administrative Agent shall promptly give each Lender written notice (or
telephonic notice promptly confirmed in writing) of each proposed Borrowing, of
such Lender's proportionate share thereof and of the other matters covered by
the Notice of Borrowing relating thereto.
(b) The Administrative Agent may act prior to receipt of a written
Notice of Borrowing without liability upon the basis of telephonic notice
believed by the Administrative Agent in good faith to be from an Authorized
Officer of the Borrower entitled to give telephonic notices under this Agreement
on behalf of the Borrower. In each such case, the Administrative Agent's record
of the terms of such telephonic notice shall be conclusive absent manifest
error.
2.5. DISBURSEMENT OF FUNDS. (a) No later than 12:00 noon (local time at
the Payment Office) on the date specified in each Notice of Borrowing relating
to LIBOR Loans, and no later than 12:00 noon (local time at the Payment Office)
on the date specified in each Notice of Borrowing relating to Prime Rate Loans,
provided that the Administrative Agent shall have provided at least two Business
Days' prior notice of the Notice of Borrowing to such Lender as required by
section 2.4(a), each Lender will make available its PRO RATA share, if any, of
each Borrowing of Loans requested to be made on such date in the manner provided
below. All amounts shall be made available to the Administrative Agent in U.S.
dollars and immediately available funds at the Payment Office. The
Administrative Agent promptly will either (x) make such amounts available to or
for the benefit of the Borrower by (x) depositing to the Borrower's account at
the Payment Office the aggregate of the amounts so made available in the type of
funds received, (y) if the Borrower so elects and the Administrative Agent is
willing to accommodate such request, wire transferring such amount to an account
of the Borrower or the Guarantor at a financial institution located in the
continental United States and designated by the Borrower to the Administrative
Agent for such purpose, or (z) as to all or any portion of such amounts,
applying such amounts to the direct payment of bills for materials and labor as
contemplated by section 2.3. Unless the Administrative Agent shall have been
notified by any Lender prior to the date of Borrowing that such Lender does not
intend to make available to the Administrative Agent its portion of the
Borrowing or Borrowings to be made on such date, the Administrative Agent may
assume that such Lender has made such amount available to the Administrative
Agent on such date of Borrowing, and the Administrative Agent, in reliance upon
such assumption, may (in its sole discretion and without any obligation to do
so) make available to or for the benefit of the Borrower (and/or so
25
26
apply) a corresponding amount. If such corresponding amount is not in fact made
available to the Administrative Agent by such Lender and the Administrative
Agent has made available same to or for the benefit of the Borrower (or has so
applied the same), the Administrative Agent shall be entitled to recover such
corresponding amount from such Lender. If such Lender does not pay such
corresponding amount forthwith upon the Administrative Agent's demand therefor,
the Administrative Agent shall promptly notify the Borrower, and the Borrower
shall immediately pay such corresponding amount to the Administrative Agent. The
Administrative Agent shall also be entitled to recover from such Lender or the
Borrower, as the case may be, interest on such corresponding amount in respect
of each day from the date such corresponding amount was made available by the
Administrative Agent to or for the benefit of the Borrower (or so applied) to
the date such corresponding amount is recovered by the Administrative Agent, at
a rate per annum equal to (x) if paid by such Lender, the overnight Federal
Funds Effective Rate or (y) if paid by the Borrower, the then applicable rate of
interest, calculated in accordance with section 2.9, for the respective Loans
(but without any requirement to pay any amounts in respect thereof pursuant to
section 2.12).
(b) Nothing herein and no subsequent termination of the Commitments
pursuant to section 4.1 or 4.2 shall be deemed to relieve any Lender from its
obligation to fulfill its commitments hereunder and in existence from time to
time or to prejudice any rights which the Borrower may have against any Lender
as a result of any default by such Lender hereunder.
2.6. NOTES; AND LOAN ACCOUNTS. (A) FORMS OF NOTES. The Borrower's
obligation to pay the principal of, and interest on, the Loans made to the
Borrower by a Lender with respect to a Project shall be evidenced by a
promissory note of the Borrower substantially in the form of Exhibit A (each
such promissory note of the Borrower, a "NOTE"; and all such promissory notes
for all Projects, collectively, the "NOTES").
(B) NOTE ISSUED TO A LENDER FOR A PROJECT. The Note issued by the
Borrower to a Lender for a Project shall: (i) be executed by the Borrower; (ii)
be payable to the order of such Lender and be dated on or prior to the date the
first Loan outstanding thereunder is made; (iii) be in a face amount for such
Lender equal to such Lender's Percentage of the maximum Reserved Portion of the
Total Commitment allocated by the Administrative Agent for such Project; (iv) be
payable in the principal amount of Loans for such Project evidenced thereby; (v)
mature as to the Loans for such Project on the date provided for in section 2.7;
(vi) bear interest as provided in section 2.9 in respect of the Prime Rate Loans
or LIBOR Loans, as the case may be, evidenced thereby; (vii) be subject to
repayment and mandatory prepayment as provided in section 5.2; and (viii) be
entitled to the benefits of this Agreement and the other Credit Documents.
(C) LOAN ACCOUNTS OF LENDERS. Each Lender shall maintain in accordance
with its usual practice an account or accounts evidencing the indebtedness of
the Borrower to such Lender resulting from each Loan made by such Lender,
including the amounts of principal and interest payable and paid to such Lender
from time to time hereunder.
(D) LOAN ACCOUNTS OF ADMINISTRATIVE AGENT. The Administrative Agent
shall maintain accounts in which it shall record (i) the amount of each Loan
made to the Borrower hereunder, the Type thereof, the particular Project for
which such Loan was made, and the Interest Period (if such Loan is a LIBOR
Loan), (ii) the amount of any principal due and payable or to become due and
payable from the Borrower to each Lender hereunder in respect of such Loan, and
(iii) the amount of any sum received by the Administrative Agent hereunder for
the account of the Lenders and each Lender's share thereof.
(E) EFFECT OF LOAN ACCOUNTS, ETC. The entries made in the accounts
maintained pursuant to section 2.6(c) and (d) shall be PRIMA FACIE evidence of
the existence and amounts of the obligations recorded therein; PROVIDED, that
the failure of any Lender or the Administrative Agent to maintain such accounts
or any error therein shall not in any manner affect the obligation of the
Borrower to repay or prepay the Loans in accordance with the terms of this
Agreement.
26
27
(F) ENDORSEMENTS OF AMOUNTS ON NOTES PRIOR TO TRANSFER. Each Lender
will, prior to any transfer of any of the Notes issued to it, endorse on the
reverse side thereof or the grid attached thereto the outstanding principal
amount of Loans evidenced thereby. Failure to make any such notation or any
error in any such notation shall not affect the Borrower's obligations in
respect of such Loans.
2.7. MATURITY. The Loans to the Borrower for a Project shall mature and
shall be repaid in full, together with accrued interest thereon, on the earlier
of (x) the date which is 30 days following the date a Certificate of Occupancy
is issued for such Project, or (y) the 15th monthly anniversary of the date of
the Notes issued by the Borrower to the Lenders for such Project, SUBJECT to the
following:
(A) 3-MONTH CONSTRUCTION EXTENSION OPTION. The Borrower may
elect to extend the maturity date of the Loans for a particular Project
for a period expiring on the three month anniversary of the date such
Loans otherwise would have matured as provided above, by giving the
Administrative Agent written notice of such election, PROVIDED that no
such election or extension of the maturity date of any Loans for a
Project shall be or become effective if at the time any Default under
section 10.1(a) or Event of Default shall have occurred and be
continuing.
(B) 3 YEAR MINI-PERM EXTENSION OPTION. If (1) construction of
a Project of the Borrower shall have been completed, (2) a Certificate
of Occupancy for such Project, together with any required governmental
licenses and permits necessary to commence commercial operation of such
Project, shall have been duly issued and shall be in full force and
effect and held in the name of the Borrower or the Manager, (3) all
conditions for the final disbursement of Loans pursuant to section 6.3
shall have been satisfied and all such Loans shall have been disbursed,
and (4) the Administrative Agent shall have received evidence,
satisfactory to it, of satisfaction of the foregoing conditions, the
Borrower may elect to extend the maturity date of the Loans for such
Project with no Construction Period for a Mini-Perm Period expiring on
the third anniversary (except in the case of Projects located in the
State of Georgia, in which case such period shall be one day prior to
such third anniversary) of the date such Loans otherwise would have
matured as provided above (taking into account any extension of such
maturity under section 2.7(a) above), by giving the Administrative
Agent written notice of such election (accompanied by copies of the
Certificate of Occupancy and copies of any required governmental
licenses and permits necessary to commence commercial operation of such
Project), PROVIDED that no such election or extension of the maturity
date of any Loans for a Project shall be or become effective if at the
time any Default under section 10.1(a) or Event of Default shall have
occurred and be continuing.
If at the time of the initial Borrowing for a Project
hereunder, (1) construction of such Project shall have been completed,
(2) a Certificate of Occupancy for such Project, together with any
required governmental licenses and permits necessary for commercial
operation of such Project, shall have been duly issued and shall be in
full force and effect and held in the name of the Borrower or the
Manager, and (3) the Administrative Agent shall have received evidence,
satisfactory to it, of satisfaction of the foregoing conditions, THEN
there shall only be a Mini-Perm Period (I.E., no Construction Period)
for such Project and the Loans for such Project shall mature on the
third anniversary of the commencement of the Mini-Perm Period for such
Loans.
The Administrative Agent shall promptly (x) furnish to the Lenders copies of any
elections by the Borrower pursuant to this section 2.7, and (y) notify the
Borrower and the Lenders in writing of any extension of, or other information
with respect to, the maturity of any Loans of the Borrower for a Project which
becomes effective under this section 2.7. In determining whether a Certificate
of Occupancy has been issued for a Project which consists of separate buildings,
a Certificate of Occupancy for such Project shall only be considered to have
been issued when one or more Certificates of Occupancy covering all of such
buildings have been issued.
27
28
2.8. OPTIONAL CONVERSIONS DURING MINI-PERM PERIOD. During the
Construction Period for a Project, the Borrower shall have no option to convert
the Loans for such Project from one Type into another Type. During the Mini-Perm
Period for a Project, the Borrower shall have the option to convert on any
Business Day all of the Loans of one Type owing by the Borrower related to such
Project into a Borrowing of the other Type of Loans which can be made hereunder,
PROVIDED that:
(a) any conversion of LIBOR Loans into Prime Rate Loans shall
be made on, and only on, the last day of an Interest Period for such
LIBOR Loans;
(b) Prime Rate Loans may only be converted into LIBOR Loans if
no Default under section 10.1(a) or Event of Default is in existence on
the date of the conversion unless the Required Lenders, otherwise
agree; and
(c) Borrowings of LIBOR Loans resulting from this section 2.8
shall conform to the requirements of section 2.1(d).
Each such conversion shall be effected by the Borrower giving the Administrative
Agent at its Notice Office, prior to 11:00 A.M. (local time at such Notice
Office), at least three Business Days' prior written notice (or telephonic
notice promptly confirmed in writing if so requested by the Administrative
Agent) (each a "NOTICE OF CONVERSION"), substantially in the form of Exhibit
B-2, specifying the Loans to be so converted, the Type of Loans to be converted
into and, if to be converted into a Borrowing of LIBOR Loans, the Interest
Period to be applicable thereto, which Interest Period, after the first 12
months of the Mini-Perm Period for such Project (except for the Interest Period
applicable to the initial LIBOR Rate Loans for such Project following the first
12 months of the Mini-Perm Period for such Project) must be of the same duration
as the Interest Period applicable to the initial LIBOR Rate Loans for such
Project following the first 12 months of the Mini-Perm Period for such Project.
The Administrative Agent shall give each Lender prompt notice of any such
proposed conversion affecting any of its Loans.
2.9. INTEREST. (A) INTEREST ON PRIME RATE LOANS. During any period in
which a Loan is a Prime Rate Loan, the unpaid principal amount of such Loan
shall bear interest at a fluctuating rate per annum which shall at all times be
equal to the Prime Rate in effect from time to time.
(B) INTEREST ON LIBOR LOANS. During any Interest Period for a LIBOR
Loan for a Project, the unpaid principal amount of such Loan shall bear interest
at a rate per annum which shall at all times be the relevant Adjusted LIBOR Rate
for such Loan PLUS (i) during the Construction Period for such Project, 250
basis points per annum; or (ii) during the Mini-Perm Period for such Project,
225 basis points per annum prior to the time Stabilization of such Project is
achieved, or 200 basis points per annum after Stabilization of such Project has
been achieved. Notwithstanding the foregoing, no reduction in the interest rate
margin pursuant to the preceding sentence shall be effective for any Loans for a
Project until at least two Business Days after the Administrative Agent shall
have received written notice from the Borrower of the occurrence of the event or
circumstance giving rise to such reduction and referring specifically to the
interest rate margin provisions of this section 2.9(b).
(C) DEFAULT INTEREST. Notwithstanding the above provisions:
(i) if a Default under section 10.1(a) or Event of Default is
in existence, all outstanding amounts of principal and, to the extent
permitted by law, all overdue interest, in respect of each Loan of the
Borrower shall bear interest, payable on demand, at a rate per annum
equal to the lesser of (x) 2% per annum above the rate in effect for
such Loan from time to time pursuant to section 2.9(a) or (b), as
applicable, and (y) the Highest Lawful Rate; and
28
29
(ii) if any amount (other than the principal of and interest
on the Loans) payable by the Borrower under the Credit Documents is not
paid when due, such amount shall bear interest, payable on demand, at
the lesser of (x) a fluctuating rate per annum equal to 2% per annum
above the rate in effect from time to time pursuant to section 2.9(a),
and (y) the Highest Lawful Rate.
(D) ACCRUAL AND PAYMENT OF INTEREST. Interest shall accrue from and
including the date of any Borrowing by the Borrower to but excluding the date of
any prepayment or repayment thereof and shall be payable in respect of each Loan
(i) on the first Business Day of each calendar month, and
(ii) on any prepayment or conversion (on the amount prepaid or
converted), at maturity (whether by acceleration or otherwise) and,
after such maturity, on demand.
(E) COMPUTATIONS OF INTEREST. All computations of interest hereunder
shall be made in accordance with section 12.7(b).
(F) NOTICE OF INTEREST RATES. The Administrative Agent upon determining
the interest rate, or any change in the interest rate, for any Borrowing shall
promptly notify the Borrower and the Lenders thereof.
(G) INFORMATION REQUIRED TO DETERMINE INTEREST RATE ON LIBOR LOANS. If
the Administrative Agent is unable to determine the Adjusted LIBOR Rate for any
Borrowing based on the Telerate Screen referred to in the definition of Adjusted
LIBOR Rate, each Reference Bank agrees to furnish the Administrative Agent
timely information for the purpose of determining the Adjusted LIBOR Rate for
any Borrowing consisting of LIBOR Loans. If any one or more of the Reference
Banks shall not timely furnish such information, the Administrative Agent shall
determine the Adjusted LIBOR Rate on the basis of timely information furnished
by the remaining Reference Banks.
2.10. INTEREST PERIODS. (a) During the Construction Period for a
Project, (i) all Loans for such Project shall be LIBOR Rate Loans, (ii) each
Interest Period for any LIBOR Loan for such Project shall be the calendar month
and (iii) the Adjusted LIBOR Rate applicable to all LIBOR Loans for such Project
which are outstanding during such Interest Period (whether previously incurred
or incurred during such Interest Period) shall be determined prior to the
commencement of such Interest Period in accordance with the definition of the
term Adjusted LIBOR Rate.
(b) During the MP-12 Period for a Project, subject to the conditions
set forth herein, the Borrower shall have the right, upon not less than three
Business Days' written notice to the Administrative Agent, to elect whether the
Loans shall be Prime Rate Loans or LIBOR Rate Loans and the duration of the
Interest Period for LIBOR Rate Loans. At all times during the MP-12 Period for a
Project, the LIBOR Rate Loans for such Project shall have an Interest Period of
one, two, three, six or (SUBJECT to approval by all of the Lenders, based on
market conditions in the Eurodollar market) 12 months duration, as elected by
the Borrower. The Borrower may, from time to time, elect an Interest Period by
giving the Administrative Agent written or telephonic notice (in the case of
telephonic notice, promptly confirmed in writing if so requested by the
Administrative Agent) of the Interest Period so elected for such Loans, which
notice must be given not later than 11:00 A.M. (local time at the Notice Office)
on the third Business Day prior to the commencement of such Interest Period so
elected. The initial Interest Period of the MP-12 Period for a Project for any
LIBOR Rate Loans shall commence on the date such MP-12 Period commences or on
such later date permitted hereunder if the Borrower initially elects Prime Rate
Loans in accordance with the provisions set forth herein. In the event that the
Borrower fails to elect a Type for the Loans or the duration of the Interest
Period for LIBOR Rate Loans in accordance with the provisions set forth herein,
the Borrower shall be deemed to have selected LIBOR Rate Loans and an Interest
Period of one month;
29
30
provided, however, in no event shall LIBOR Rate Loans be permitted if the
Interest Period would end after the expiration of the MP-12 Period for such
Project.
(c) During the MP-36 Period for a Project, subject to the conditions
set forth herein, the Borrower shall have the right, upon not less than three
Business Days' written notice to the Administrative Agent, to elect whether the
Loans shall be Prime Rate Loans or LIBOR Rate Loans and the duration of the
Interest Period for LIBOR Rate Loans. At all times during the MP-36 Period for a
Project, the LIBOR Rate Loans for such Project shall have an Interest Period of
one, two or three months duration, as elected by the Borrower; provided,
however, once the Borrower elects the duration of the Interest Period for LIBOR
Rate Loans during the MP-36 Period, the Borrower may not thereafter elect any
other duration. Prior to the expiration of the MP-12 Period for a Project or
thereafter if the Borrower has initially elected Prime Rate Loans for the MP-36
Period, the Borrower shall elect an Interest Period by giving the Administrative
Agent written or telephonic notice (in the case of telephonic notice, promptly
confirmed in writing if so requested by the Administrative Agent) of the
Interest Period so elected for such Loans, which notice must be given not later
than 11:00 A.M. (local time at the Notice Office) on the third Business Day
prior to the commencement of the first such Interest Period so elected. The
initial Interest Period of the MP-36 Period for a Project for any LIBOR Rate
Loan shall commence on the date such MP-36 Period for a Project commences or
such later date permitted hereunder if the Borrower initially elects Prime Rate
Loans, and, unless converted to a Prime Rate Loan in accordance with the
provisions set forth herein, each Interest Period occurring thereafter shall be
of the same duration and shall commence on the day on which the next preceding
Interest Period expires. In the event that the Borrower fails to elect a Type
for the Loans or the duration of the Interest Period for LIBOR Rate Loans in
accordance with the provisions set forth herein, the Borrower shall be deemed to
have selected LIBOR Rate Loans and an Interest Period of one month; provided,
however, in no event shall LIBOR Rate Loans be permitted if the Interest Period
would end after the expiration of the MP-36 Period for such Project.
(d) During the Construction Period and during the Mini-Perm Period, all
Loans for a Project shall be of the same Type. During the Mini-Perm Period for a
Project, the Adjusted LIBOR Rate applicable to all LIBOR Loans for such Project
which are outstanding during an Interest Period shall be determined prior to the
commencement of such Interest Period in accordance with the definition of the
term Adjusted LIBOR Rate. Notwithstanding anything to the contrary contained
herein the last Interest Period for a LIBOR Rate Loan shall end not later than
the maturity date for such Loan. The Administrative Agent shall promptly advise
the Lenders of all pertinent information regarding the election of interest rate
options and Interest Periods referred to herein.
2.11. INCREASED COSTS, ILLEGALITY, ETC. (a) In the event that at any
time any Lender shall incur increased costs or reductions in the amounts
received or receivable hereunder in an amount which such Lender deems material
with respect to any LIBOR Loans (other than any increased cost or reduction in
the amount received or receivable resulting from the imposition of or a change
in the rate of taxes or similar charges), because of
(i) any change since the Effective Date in any applicable law,
governmental rule, regulation, guideline, order or request (whether or
not having the force of law), or in the interpretation or
administration thereof and including the introduction of any new law or
governmental rule, regulation, guideline, order or request (such as,
for example, but not limited to, a change in official reserve
requirements, but, in all events, excluding reserves includable in the
Adjusted LIBOR Rate pursuant to the definition thereof), and/or
(ii) other circumstances adversely affecting the interbank
Eurodollar market or the position of such Lender in such market,
THEN, and in any such event, such Lender shall (x) on or promptly following such
date or time and (y) within 10 Business Days of the date on which such event no
longer exists give notice (by telephone confirmed in writing) to
30
31
the Borrower and to the Administrative Agent of such determination, and the
Borrower shall pay to such Lender, upon written demand therefor, such additional
amounts (in the form of an increased rate of, or a different method of
calculating, interest or otherwise as such Lender shall determine) as shall be
required to compensate such Lender, for such increased costs or reductions in
amounts receivable hereunder (a written notice as to the additional amounts owed
to such Lender, showing the basis for the calculation thereof, which basis must
be reasonable, submitted to the Borrower by such Lender shall, absent manifest
error, be final and conclusive and binding upon all parties hereto); provided,
however, no Lender shall demand compensation for any increased costs or
reductions in the amounts received or receivable hereunder as referred to in
this section 2.11(a) if it shall not at the time be the general policy or
practice of such Lender to demand such compensation in similar circumstances
under comparable provisions of other credit agreements.
(b) In the event that the Administrative Agent shall have determined on
a reasonable basis (which determination shall, absent manifest error, be final
and conclusive and binding upon all parties hereto):
(i) on any date for determining the Adjusted LIBOR Rate for
any Interest Period that, by reason of any changes arising after the
Effective Date affecting the interbank Eurodollar market, adequate and
fair means do not exist for ascertaining the applicable interest rate
on the basis provided for in the definition of Adjusted LIBOR Rate; or
(ii) at any time, that the making or continuance of any LIBOR
Loan has become unlawful by compliance by a Lender in good faith with
any change since the Effective Date in any law, governmental rule,
regulation, guideline or order, or the official interpretation or
application thereof, or would conflict with any thereof not having the
force of law but with which such Lender customarily complies or has
become impracticable as a result of a contingency occurring after the
Effective Date which materially adversely affects the interbank
Eurodollar market;
THEN, and in any such event, the Administrative Agent shall give notice of such
determination (by telephone confirmed in writing) to the Borrower and each of
the Lenders, and thereafter (x) in the case of clause (i) above, LIBOR Loans
shall no longer be available and (y) in the case of clause (ii) above, all
outstanding LIBOR Loans shall immediately be converted to Prime Rate Loans, in
each case until such time as the Administrative Agent notifies the Borrower and
the Lenders that the circumstances giving rise to such notice by the
Administrative Agent no longer exist, and any Notice of Borrowing or Notice of
Conversion given by the Borrower with respect to LIBOR Loans which have not yet
been incurred or converted shall be deemed rescinded by the Borrower or, in the
case of a Notice of Borrowing, shall, at the option of the Borrower, be deemed
converted into a Notice of Borrowing for Prime Rate Loans to be made on the date
of Borrowing contained in such Notice of Borrowing.
(c) If any Lender shall have determined that after the Effective Date,
the adoption of any applicable law, rule or regulation regarding capital
adequacy, or any change therein, or any change in the interpretation or
administration thereof by any governmental authority, central bank or comparable
agency charged by law with the interpretation or administration thereof, or
compliance by such Lender or its parent corporation with any request or
directive regarding capital adequacy (whether or not having the force of law) of
any such authority, central bank, or comparable agency, in each case made
subsequent to the Effective Date, has or would have the effect of reducing by an
amount reasonably deemed by such Lender to be material the rate of return on
such Lender's or its parent corporation's capital or assets as a consequence of
such Lender's commitments or obligations hereunder to a level below that which
such Lender or its parent corporation could have achieved but for such adoption,
effectiveness, change or compliance (taking into consideration such Lender's or
its parent corporation's policies with respect to capital adequacy), then from
time to time, within 15 days after demand by such Lender (with a copy to the
Administrative Agent), the Borrower shall pay to such Lender such additional
amount or amounts as will compensate such Lender or its parent corporation for
such reduction. Each Lender, upon determining in good faith that any additional
amounts will be payable pursuant to this section 2.11(c), will give prompt
written notice thereof to the Borrower, which notice shall set forth, in
reasonable detail, the basis of the calculation of
31
32
such additional amounts, which basis must be reasonable, although the failure to
give any such notice shall not release or diminish any of the Borrower's
obligations to pay additional amounts pursuant to this section 2.11(c) upon the
subsequent receipt of such notice.
(d) Notwithstanding anything in this Agreement to the contrary, (i) no
Lender shall be entitled to compensation or payment or reimbursement of other
amounts under this section 2.11 for any amounts incurred or accruing more than
90 days prior to the giving of notice to the Borrower of additional costs or
other amounts of the nature described in this section 2.11, and (ii) no Lender
shall demand compensation for any reduction referred to in section 2.11(c) if it
shall not at the time be the general policy or practice of such Lender to demand
such compensation, payment or reimbursement in similar circumstances under
comparable provisions of other credit agreements.
2.12. BREAKAGE COMPENSATION. The Borrower shall compensate each
applicable Lender, upon its written request (which request shall set forth the
detailed basis for requesting and the method of calculating such compensation),
for all reasonable losses, expenses and liabilities (including, without
limitation, any loss, expense or liability incurred by reason of the liquidation
or reemployment of deposits or other funds required by such Lender to fund its
LIBOR Loans) which such Lender may sustain: (i) if for any reason (other than a
default by such Lender or the Administrative Agent) a Borrowing of LIBOR Loans
does not occur on a date specified therefor in a Notice of Borrowing (whether or
not withdrawn or deemed withdrawn by the Borrower); (ii) if any repayment (other
than payments of installments of principal required under section 5.2(b)),
prepayment or conversion of any of its LIBOR Loans occurs on a date which is not
the last day of an Interest Period applicable thereto; (iii) if any prepayment
of any of its LIBOR Loans is not made on any date specified in a notice of
prepayment given by the Borrower; (iv) as a consequence of a forced assignment
of its Loans pursuant to section 2.13(b) hereof; or (v) as a consequence of any
other default by the Borrower to repay its LIBOR Loans when required by the
terms of this Agreement.
2.13. CHANGE OF LENDING OFFICE; REPLACEMENT OF LENDERS. (a) Each Lender
agrees that, upon the occurrence of any event giving rise to the operation of
section 2.11(a) or (c) with respect to such Lender, it will, if requested by the
Borrower, use reasonable efforts (subject to overall policy considerations of
such Lender) to designate another Applicable Lending Office for any Loans or
Commitment affected by such event, PROVIDED that such designation is made on
such terms that such Lender and its Applicable Lending Office suffer no
economic, legal or regulatory disadvantage, with the object of avoiding the
consequence of the event giving rise to the operation of any such section.
(b) If any Lender requests any compensation, reimbursement or other
payment under section 2.11(a) or (c) with respect to such Lender, or if any
Lender is a Defaulting Lender, then the Borrower may, at its sole expense and
effort, upon notice to such Lender and the Administrative Agent, require such
Lender to assign and delegate, without recourse (in accordance with the
restrictions contained in section 12.4(c)), all its interests, rights and
obligations under this Agreement to an assignee that shall assume such
obligations (which assignee may be another Lender, if a Lender accepts such
assignment); PROVIDED that (i) the Borrower shall have received the prior
written consent of the Administrative Agent, which consent shall not be
unreasonably withheld, (ii) such Lender shall have received payment of an amount
equal to the outstanding principal of its Loans, accrued interest thereon,
accrued fees and all other amounts payable to it hereunder, including amounts
payable under section 2.12, from the assignee (to the extent of such outstanding
principal and accrued interest and fees) or the Borrower (in the case of all
other amounts), and (iii) in the case of any such assignment resulting from a
claim for compensation, reimbursement or other payments required to be made
under section 2.11(a) or (c) with respect to such Lender, such assignment will
result in a reduction in such compensation, reimbursement or payments. A Lender
shall not be required to make any such assignment and delegation if, prior
thereto, as a result of a waiver by such Lender or otherwise, the circumstances
entitling the Borrower to require such assignment and delegation cease to apply.
32
33
(c) Nothing in this section 2.13 shall affect or postpone any of the
obligations of the Borrower or the right of any Lender provided in section 2.11.
SECTION 3. FEES.
3.1. UPFRONT FEES. The Borrower agrees to pay to the Administrative
Agent, on the Effective Date and in immediately available funds, nonrefundable
upfront fees for the accounts of the initial Lenders hereunder, at the rate of
(i) 50 basis points in the case of each Lender which has a Commitment of at
least $15,000,000, and (ii) 45 basis points in the case of each other Lender,
based on the respective amounts of the Commitments of the Lenders specified in
Annex I hereto.
3.2. BORROWING FEES. The Borrower agrees to pay to the Administrative
Agent, on the date of the initial Borrowing by the Borrower for a Project (other
than the Hilton Head II Project, which is exempt from this provision), and in
immediately available funds, nonrefundable borrowing fees for the PRO RATA
account of each Lender, at the rate of 25 basis points, based on each Lender's
Percentage of the Reserved Portion of the Total Commitment for such Project.
3.3. EXTENSION FEES. In the event that the Commitment Period
Termination Date is extended as provided in section 4.3, the Borrower agrees to
pay to the Administrative Agent, on the effective date of such extension and in
immediately available funds, nonrefundable extension fees, for the PRO RATA
account of each Lender, of $30,000, or if greater, aggregate extension fees at
the rate of 15 basis points, based on the the Reserved Portion of the Total
Commitment which remains available for Projects as to which there has been no
Borrowing hereunder.
3.4. OTHER FEES FOR ADMINISTRATIVE AGENT. The Borrower agrees to pay to
the Administrative Agent, for its own account, on the Effective Date and
thereafter, such arrangement, Project submission, construction monitoring and
other fees as have heretofore been agreed to by the Borrower and the
Administrative Agent.
SECTION 4. COMMITMENTS.
4.1. VOLUNTARY TERMINATION/REDUCTION OF COMMITMENTS. Upon at least
three Business Days' prior written notice (or telephonic notice confirmed in
writing) to the Administrative Agent at its Notice Office (which notice the
Administrative Agent shall promptly transmit to each of the Lenders), the
Borrower shall have the right, without premium or penalty, to:
(a) terminate the Total Commitment, PROVIDED that all
outstanding Loans are contemporaneously prepaid in full; and/or
(b) partially and permanently reduce the Unutilized Total
Commitment, PROVIDED that (i) after giving effect thereto, the
remaining Unutilized Total Commitment exceeds the Reserved Portion of
the Total Commitment then in effect by at least $5,000,000, (ii) any
such reduction shall apply to proportionately and permanently reduce
the Commitment of each of the Lenders, in accordance with their
respective Percentages; and (iii) any partial reduction of the
Unutilized Total Commitment pursuant to this section 4.1 shall be in
the amount of at least $5,000,000 (or, if greater, in integral
multiples of $1,000,000).
4.2. MANDATORY ADJUSTMENTS OF COMMITMENTS, ETC. (a) The Total
Commitment (and the Commitment of each Lender) shall terminate on the six month
anniversary of the Effective Date, unless a Borrowing of Loans has occurred on
or prior to such date.
33
34
(b) The Total Commitment shall terminate (and the Commitment of each
Lender shall terminate) on the date when no additional Loans may be incurred
hereunder under the applicable provisions of section 2.1
(c) Whenever additional Loans are incurred, such Loans shall be
considered a utilization of the Total Commitment in an amount equal to the
aggregate principal amount of the Loans so incurred. Whenever a principal amount
of Loans is repaid or prepaid, such amount shall not (except as provided in
section 2.1(f), in the case of the implementation of the Incremental Commitment)
be available for reborrowing, and the principal amount so repaid or prepaid
shall (except in the case of a prepayment in connection with the implementation
of the Incremental Commitment, as provided in section 2.1(f) hereof) be applied
to permanently reduce the Total Commitment (and to proportionately and
permanently reduce the Commitment of each of the Lenders).
4.3. EXTENSION OF COMMITMENT PERIOD TERMINATION DATE. At any time
during the period commencing 90 days prior to the Commitment Period Termination
Date and ending 60 days prior to the Commitment Period Termination Date, the
Borrower may request the Administrative Agent to determine if all of the Lenders
are then willing to extend the Commitment Period Termination Date for a single
additional year. If the Borrower so requests, the Administrative Agent will so
advise the Lenders. If all of the Lenders, in their sole discretion, are all
willing to so extend the Commitment Period Termination Date, after taking into
account such considerations as any such Lender may deem relevant, the Borrower,
the Administrative Agent and all of the Lenders shall execute and deliver a
definitive written instrument so extending the Commitment Period Termination
Date. No such extension of the Commitment Period Termination Date shall be valid
or effective for any purpose UNLESS (x) such definitive written instrument is so
signed and delivered within 45 days following the giving by the Administrative
Agent of notice to the Lenders that the Borrower has requested such an
extension, and (y) the Borrower has paid to the Administrative Agent, for the
PRO RATA account of the Lenders, the extension fees specified in section 3.3.
SECTION 5. PAYMENTS.
5.1. VOLUNTARY PREPAYMENTS. The Borrower shall have the right to prepay
any of its Loans, in whole or in part, without premium or penalty, from time to
time, but only on the following terms and conditions:
(a) the Borrower shall give the Administrative Agent at the
Notice Office written or telephonic notice (in the case of telephonic
notice, promptly confirmed in writing if so requested by the
Administrative Agent) of the Borrower's intent to prepay any of its
Loans, the amount of such prepayment, the specific Project or Projects
to which such prepayment or prepayments relate, and (in the case of
LIBOR Loans) the specific Borrowing(s) pursuant to which made, which
notice shall be received by the Administrative Agent by
(x) 11:00 A.M. (local time at the Notice Office)
three Business Days prior to the date of such prepayment, in
the case of any prepayment of LIBOR Loans, or
(y) 12:00 noon (local time at the Notice Office) on
the date of such prepayment, in the case of any prepayment of
Prime Rate Loans,
and which notice shall promptly be transmitted by the Administrative
Agent to each of the affected Lenders;
(b) each partial prepayment by the Borrower of any Borrowing
shall be in an aggregate principal amount of (i) at least $100,000, or
a whole Dollar amount in excess thereof, in the case of Loans which are
Prime Rate Loans, or (ii) at least $1,000,000, or a whole Dollar amount
in excess thereof, in the case of Loans which are LIBOR Loans;
34
35
(c) no partial prepayment of LIBOR Loans of the Borrower for a
Project shall reduce the aggregate principal amount of such LIBOR Loans
to an amount less than $1,000,000;
(d) each prepayment in respect of any Loans made pursuant to a
Borrowing shall be applied PRO RATA among such Loans;
(e) each prepayment of the Loans for a Project which is made
during the Mini-Perm Period for such Project shall be applied to the
installment payments of principal provided for in section 5.2(b) in
inverse order of maturity; and
(f) each prepayment of LIBOR Loans pursuant to this section
5.1 on any date other than the last day of the Interest Period
applicable thereto shall be accompanied by any amounts payable in
respect thereof under section 2.12.
5.2. REPAYMENT AND MANDATORY PREPAYMENTS. The Loans shall be repaid and
shall be subject to mandatory prepayment in accordance with the following
provisions:
(A) MATURITY. The Borrower will repay the entire remaining
principal amount of its Loans in full at the maturity date thereof, as
such maturity date is determined in accordance with section 2.7.
(B) AMORTIZATION OF LOANS DURING MINI-PERM PERIOD, ETC. (i)
Commencing with the 13th month following the beginning of the Mini-Perm
Period for the Loans of the Borrower for a Project, the Borrower will
repay such Loans by making monthly installment payments consisting of
both principal and interest on such Loans, on the first Business Day of
each calendar month, with the amount of each monthly installment
payment being determined by the Administrative Agent on the following
basis:
(A) the Administrative Agent shall first determine
the amount of each monthly installment payment which would be
necessary to fully amortize the principal balance of such
Loans on the basis of level monthly payments (consisting of
both principal and interest) over a 25 year period and an
assumed interest rate equal to 250 basis points over the then
current yield to maturity on U.S. treasury securities with a
maturity of or closest to 10 years, as determined by the
Administrative Agent three Business Days prior to the due date
of the initial amortization payment by the Borrower for its
Loans for a Project;
(B) for each year of the amortization period, the
Administrative Agent shall determine the monthly average
amount of the principal portion of the installment payments in
such year which would be payable as provided in clause (A)
above, and the average amount so determined shall be the
principal portion of the monthly installment payments payable
hereunder during such year; and
(C) the interest portion of each monthly installment
payment shall be the actual accrued interest for such Loans
based on the outstanding principal amount of such Loans and
the interest rate then in effect pursuant to section 2.9(a) or
(b).
(ii) Not later than two Business Days prior to the due date of
the initial amortization payment by the Borrower for its Loans for a
Project, the Administrative Agent shall provide the Borrower with a
detailed monthly amortization schedule for such Loans prepared on a
basis consistent with the above provisions.
35
36
(iii) If the Administrative Agent determines at any time, and
the Borrower agrees, that it would be desirable to adjust the amounts
of the monthly amortization payments of the Borrower in order to
harmonize the monthly principal portion of any installment payments by
the Borrower to the corresponding notional amounts provided in a
Designated Hedge Agreement related to such Loans, the Administrative
Agent will so advise the Borrower and the Lenders and the amount of
such amortization payments shall be adjusted in such manner as the
Administrative Agent may specify in writing as necessary to achieve
such harmonization. The Administrative Agent shall provide the Borrower
and the Lenders with a detailed monthly amortization schedule for its
Loans for any Project reflecting any such adjustments in the amounts of
the monthly payments.
(C) IF OUTSTANDING LOANS EXCEED TOTAL COMMITMENT. If on any
date (after giving effect to any other payments on such date) the
aggregate outstanding principal amount of Loans exceeds the Total
Commitment as then in effect, then the Borrower shall prepay on such
date an aggregate principal amount of Loans at least sufficient to
eliminate such excess, and conforming in the case of partial
prepayments of Loans to the requirements as to the amounts of partial
prepayments of Loans which are contained in section 5.1.
(D) MANDATORY PREPAYMENT UPON EVENT OF LOSS. In the event any
Project suffers an Event of Loss: (i) the Borrower shall notify the
Administrative Agent thereof within 10 days following the occurrence
thereof; (ii) notwithstanding anything to the contrary contained in
this Agreement or any of the other Credit Documents, no further
Borrowings shall be made by the Borrower in respect of the Project
which suffered such Event of Loss; and (iii) the then outstanding
principal amount of all Loans in respect of such Project, if any, shall
become due and payable on the date that is the earlier of (x) 60 days
following the occurrence of such Event of Loss or (y) the date on which
insurance proceeds become available, and the Borrower shall prepay such
Loans in full on such date.
(E) IF OPERATING DEFICITS OF A PROJECT HAVE BEEN OVERFUNDED.
If the Administrative Agent shall have given the Borrower written
notice as contemplated by section 2.3(f) that any portion of the Loans
made to the Borrower for operating deficits of a Project exceed the
actual operating deficits of such Project, then the Borrower shall
prepay on such date specified by the Administrative Agent in such
notice an aggregate principal amount of Loans relating to such Project,
at least sufficient to eliminate such excess.
(F) APPLICATION OF PREPAYMENTS, ETC. Each repayment and
prepayment of any Loans of the Borrower made pursuant to a Borrowing
shall be applied PRO RATA among such Loans. Any repayment or prepayment
of LIBOR Loans pursuant to this section 5.2 shall in all events be
accompanied by such compensation as is required by section 2.12.
5.3. METHOD AND PLACE OF PAYMENT. Except as otherwise specifically
provided herein, all payments under this Agreement and the Notes shall be made
to the Administrative Agent for the ratable (based on its PRO RATA share)
account of the Lenders entitled thereto, not later than 11:00 A.M. (local time
at the Payment Office) on the date when due and shall be made in immediately
available funds and in lawful money of the United States of America at the
Payment Office, it being understood that written notice by the Borrower to the
Administrative Agent to make a payment from the funds in the Borrower's account
at the Payment Office shall constitute the making of such payment to the extent
of such funds held in such account. Any payments under this Agreement which are
made later than 11:00 A.M. (local time at the Payment Office) shall be deemed to
have been made on the next succeeding Business Day.
5.4. NET PAYMENTS. (a) All payments made by the Borrower hereunder,
under any Note or any other Credit Document, will be made without setoff,
counterclaim or other defense. Except as otherwise provided for in section
5.4(c), all such payments will be made free and clear of, and without deduction
or withholding for,
36
37
any present or future United States withholding taxes. The Borrower will furnish
to the Administrative Agent within 45 days after the date of any withholding or
deduction on account of United States withholding taxes certified copies of tax
receipts, or other evidence satisfactory to the Lender, evidencing payment
thereof by the Borrower.
(b) Each Lender that is not a United States person (as such term is
defined in section 7701(a)(30) of the Code) for Federal income tax purposes
agrees to provide to the Borrower and the Administrative Agent on or prior to
the Effective Date, or in the cases of a Lender that is an assignee or
transferee of an interest under this Agreement pursuant to section 12.4 (unless
the respective Lender was already a Lender hereunder immediately prior to such
assignment or transfer and such Lender is in compliance with the provisions of
this section 5.4(b)), on the date of such assignment or transfer to such Lender,
(i) two accurate and complete original signed copies of Internal Revenue Service
Form 4224 or 1001 (or successor forms) certifying to such Lender's entitlement
to a complete exemption from United States withholding tax with respect to
payments to be made under this Agreement, any Note or any other Credit Document,
or (ii) if the Lender is not a "bank" within the meaning of section 881(c)(3)(A)
of the Code and cannot deliver either Internal Revenue Service Form 1001 or 4224
pursuant to clause (i) above, (x) a certificate substantially in the form of
Exhibit H (any such certificate, a "SECTION 5.4(B)(II) CERTIFICATE") and (y) two
accurate and complete original signed copies of Internal Revenue Service Form
W-8 (or successor form) certifying to such Lender's entitlement to a complete
exemption from United States withholding tax with respect to payments of
interest to be made under this Agreement, any Note or any other Credit Document.
In addition, each Lender agrees that from time to time after the Effective Date,
when a lapse in time or change in circumstances renders the previous
certification obsolete or inaccurate in any material respect, it will deliver to
the Borrower and the Administrative Agent two new accurate and complete original
signed copies of Internal Revenue Service Form 4224 or 1001 (or successor
forms), or Form W-8 (or successor forms) and a Section 5.4(b)(ii) Certificate,
as the case may be, and such other forms as may be required in order to confirm
or establish the entitlement of such Lender to a continued exemption from or
reduction in United States withholding tax with respect to payments under this
Agreement, any Note or any other Credit Document, or it shall immediately notify
the Borrower and the Administrative Agent of its inability to deliver any such
Form or Certificate, in which case such Lender shall not be required to deliver
any such Form or Certificate pursuant to this section 5.4(b).
(c) Notwithstanding anything to the contrary contained in section
5.4(a), the Borrower shall be entitled, to the extent it is required to do so by
law, to deduct or withhold income or other similar taxes imposed by the United
States (or any political subdivision or taxing authority thereof or therein)
from interest, fees or other amounts payable hereunder for the account of any
Lender which is not a United States person (as such term is defined in section
7701(a)(30) of the Code) for United States federal income tax purposes and which
has not provided to the Borrower such forms that establish a complete exemption
from such deduction or withholding (i) if such Lender has not provided to the
Borrower the Internal Revenue Service forms required to be provided to the
Borrower pursuant to section 5.4(b), or (ii) in the case of a payment other than
interest, to a Lender described in clause (ii) of section 5.2(b) above, to the
extent that such forms do not establish a complete exemption from withholding of
such taxes.
SECTION 6. CONDITIONS PRECEDENT.
6.1. CONDITIONS PRECEDENT AT EFFECTIVE DATE. The obligations of the
Lenders to make Loans are subject to the satisfaction of each of the following
conditions on the Effective Date:
(A) EFFECTIVENESS; FEES, ETC. The Effective Date shall have
occurred and the Borrower shall have paid or caused to be paid all fees
required to be paid by it on or prior to such date pursuant to section
3 hereof and all reasonable fees and expenses of the Administrative
Agent and of special counsel to the Administrative Agent which have
been invoiced on or prior to such date in connection with the
37
38
preparation, execution and delivery of this Agreement and the other
Credit Documents and the consummation of the transactions contemplated
hereby and thereby.
(B) OTHER INITIAL CREDIT DOCUMENTS, ETC. The Credit Parties
named therein shall have entered into (i) the guaranty (herein, as
amended or otherwise modified from time to time, the "ALTERRA
GUARANTY"), substantially in the form attached hereto as Exhibit D-1,
(ii) the collateral assignment agreement (herein, as amended or
otherwise modified from time to time, the "COLLATERAL ASSIGNMENT OF
CAPITALIZATION DOCUMENTS"), substantially in the form attached hereto
as Exhibit D-2, (iii) a member interest pledge agreement (herein, as
amended or otherwise modified from time to time, each a "MEMBER
INTEREST PLEDGE AGREEMENT"), substantially in the respective forms
attached hereto as Exhibits X-0, X-0 and D-5, and such Credit Documents
shall be in full force and effect, and signed counterparts thereof
shall have been delivered to the Administrative Agent, in sufficient
quantities for the Administrative Agent and the Lenders.
In addition, the Guarantor shall have delivered to the Lenders
true, correct and complete copies of all of the indentures and other
documents evidencing or governing the Guarantor's Subordinated
Indebtedness (as defined in the Alterra Guaranty) which is outstanding
on the Effective Date, and all such indentures and other documents
shall be satisfactory in form and substance to all of the Lenders.
(C) ORGANIZATION AND CAPITALIZATION OF THE BORROWER. The
Administrative Agent shall have received, in sufficient quantity for
the Administrative Agent and the Lenders, copies of
(i) all of the organizational documents of the
Borrower, as entered into and/or filed with the appropriate
governmental authorities of the jurisdiction of its formation,
and any amendments or other modifications thereof, certified
as being in full force and effect by an officer or manager of
the Borrower (the "COMPANY ORGANIZATIONAL DOCUMENTS"), and
(ii) all of the documents (including amendments and
modifications thereto) evidencing the commitments of
responsible investors to make (1) capital contributions to the
Borrower of at least $25,000,000 based upon all expected 19
Projects being developed, on terms satisfactory to all of the
Lenders (collectively, the "COMPANY EQUITY DOCUMENTS"), and
(2) any loans or advances to the Borrower, on terms
satisfactory to all of the Lenders, which loans and advances
are subject and subordinate to the Loans pursuant to the terms
and conditions of the Intercreditor Agreement (collectively,
the "COMPANY CAPITALIZATION DOCUMENTS").
All of the Company Organizational Documents and Company Capitalization
Documents shall be satisfactory in form and substance to all of the
Lenders.
The Company Organizational Documents, or resolutions adopted
by the members of the Borrower and certified as duly adopted and in
full force and effect by a member, manager or officer of the Borrower,
which certified resolutions shall be delivered to the Administrative
Agent in sufficient quantity for the Administrative Agent and the
Lenders, shall provide full authority to the managing member of, or
managers or officers of, the Borrower to enter into on behalf of the
Borrower all of the Credit Documents to which the Borrower is (or is
contemplated to be) a party.
(D) CORPORATE RESOLUTIONS AND APPROVALS OF GUARANTOR, ETC. The
Administrative Agent shall have received, in sufficient quantity for
the Administrative Agent and the Lenders, certified copies of the
resolutions of the Board of Directors of the Guarantor, approving the
Credit Documents to which the Guarantor is (or is contemplated to be) a
party, and of all documents evidencing other necessary corporate action
and governmental approvals, if any, with respect to the execution,
delivery and performance by the Guarantor of the Credit Documents to
which it is (or is contemplated to be) a party.
38
39
(E) INCUMBENCY CERTIFICATES. The Administrative Agent shall
have received, in sufficient quantity for the Administrative Agent and
the Lenders, a certificate of the manager, or the Secretary or an
Assistant Secretary, of each of the Borrower and the Guarantor,
certifying the names and true signatures of the officers or managers of
the Borrower or the Guarantor, as applicable, authorized to sign the
Credit Documents to which the Borrower or the Guarantor, as applicable,
is (or is contemplated to be) a party and any other documents to which
the Borrower or the Guarantor, as applicable, is (or is contemplated to
be) a party which may be executed and delivered in connection herewith.
(F) OPINIONS OF COUNSEL. On the Effective Date, the
Administrative Agent shall have received an opinion, addressed to the
Administrative Agent and each of the Lenders and dated the Effective
Date, from (i) Xxxxx & Xxxxx, special counsel to the Borrower,
substantially in the form of Exhibit E-1; and (ii) Xxxxxx & Xxxxxx,
special counsel to the Guarantor, substantially in the form of Exhibit
E-2 hereto. Such opinions of counsel shall also cover such other
matters incident to the transactions contemplated hereby as the
Administrative Agent may reasonably request, and shall be in form and
substance satisfactory to the Administrative Agent.
(G) INITIAL PROJECT CLOSINGS; RETIREMENT OF OTHER DEBT.
Contemporaneously with the Effective Date, (i) Borrowings of at least
$30,000,000 shall be made to finance Projects hereunder, and (ii) the
Borrower shall have prepaid in full all borrowings under the Loan and
Security Agreement dated June 30, 1999, as amended, with Greenwich
Capital Financial Products, Inc., terminated the commitment of the
lender thereunder and obtained the release or discharge of all
collateral securing obligations incurred in connection therewith.
(H) PROCEEDINGS AND DOCUMENTS. All corporate and other
proceedings and all documents incidental to the transactions
contemplated hereby shall be satisfactory in substance and form to the
Administrative Agent and the Lenders and the Administrative Agent and
its special counsel and the Lenders shall have received all such
counterpart originals or certified or other copies of such documents as
the Administrative Agent or its special counsel or any Lender may
reasonably request.
6.2. CONDITIONS PRECEDENT AT INITIAL BORROWING FOR A PROJECT. The
obligation of any Lender to make any Loans to the Borrower with respect to any
Project is subject to the satisfaction of each of the following conditions on
the date (for a particular Project, the "PROJECT CLOSING DATE") of the initial
Borrowing for such Project:
(A) FEES/INITIAL EQUITY.
(I) FEES. The Borrower shall have paid or caused to be paid
all fees required to be paid by it on or prior to such date pursuant to
section 3 hereof and all reasonable fees and expenses of the
Administrative Agent and of special counsel to the Administrative Agent
which have been invoiced on or prior to such date in connection with
the preparation, execution and delivery of this Agreement and the other
Credit Documents and the consummation of the transactions contemplated
hereby and thereby.
(II) INITIAL EQUITY. The Borrower shall have evidenced to the
satisfaction of the Administrative Agent cash capital contributions
from its members in an amount not less than twenty-five percent (25%)
of the aggregate budgeted costs and expenses of the acquisition and
construction of such Project and the operation thereof as reflected in
the Project Summary & Feasibility Report with respect to such Project
as initially approved, or deemed approved, by the Administrative Agent
and the Lenders.
(B) QUALIFICATION OF PROJECT; GOOD STANDING OF BORROWER IN
JURISDICTION WHERE PROJECT LOCATED. Such Project shall constitute a
Qualified Project, in accordance with the provisions of section 2.2
hereof. The Administrative Agent shall have received, in sufficient
quantity for the Administrative
39
40
Agent and the Lenders, a certificate, dated as of a recent date, of the
Secretary of State or other appropriate governmental official of the
jurisdiction in which such Project is located, as to the good standing
and authorization to do business of the Borrower in such jurisdiction.
(C) DEVELOPMENT CONTRACT/MANAGEMENT CONTRACT/ PROJECT LEASE
ARRANGEMENTS. The Borrower shall have entered into a development
contract for the Project with the Developer (a "DEVELOPMENT CONTRACT"),
substantially in the form attached as Exhibit K hereto, a management
contract for the Project with the Manager (a "MANAGEMENT CONTRACT"),
substantially in the form attached as Exhibit I hereto, and, where
applicable, a lease of the Project to the Manager (a "PROJECT LEASE"),
substantially in the form attached as Exhibit J hereto, and such
Development Contract, and Management Contract or Project Lease, as
applicable, shall be in full force and effect.
(D) CREDIT DOCUMENTS RELATED TO SUCH PROJECT. The following
documents shall be delivered and conditions shall be satisfied:
(I) MORTGAGE. The Borrower shall have duly executed,
acknowledged and delivered a mortgage, deed of trust, deed to
secure debt or similar instrument relating to such Project (as
modified, amended or supplemented from time to time in
accordance with the terms thereof and hereof, a "MORTGAGE"),
substantially in the form attached hereto as Exhibit C-1, such
Mortgage shall be in full force and effect, and original or
photocopy counterparts thereof shall have been delivered to
the Administrative Agent, in sufficient quantities for the
Administrative Agent and the Lenders.
(II) ASSIGNMENT OF LEASES. The Borrower and the
Manager shall have duly executed, acknowledged and delivered
an Assignment of Leases and Rents (as modified, amended or
supplemented from time to time in accordance with the terms
thereof and hereof, an "ASSIGNMENT OF LEASES"), substantially
in the form attached hereto as Exhibit C-2, for such Project,
such Assignment of Leases shall be in full force and effect,
and original or photocopy counterparts thereof shall have been
delivered to the Administrative Agent, in sufficient
quantities for the Administrative Agent and the Lenders.
(III) COLLATERAL ASSIGNMENT OF CONTRACTS AND PLANS.
The Borrower and the Manager shall have duly executed and
delivered a Collateral Assignment of Contracts and Plans (as
modified, amended or supplemented from time to time in
accordance with the terms thereof and hereof, a "COLLATERAL
ASSIGNMENT OF CONTRACTS AND PLANS"), substantially in the form
attached hereto as Exhibit C-3, for such Project, covering (i)
unless the Project has been completed and a Certificate of
Occupancy issued with respect thereto, the Plans and
Specifications for such Project, (ii) the Borrower's interests
in any Management Contract for such Project, and (iii) unless
the Project has been completed and a Certificate of Occupancy
issued with respect thereto, all contracts with the general
contractor or any other contractors, architects and mechanical
and structural engineers, if any, retained in connection with
the construction of the Improvements for such Project,
together with consents of the general contractor, the
architect, and any other parties to the contracts and
agreements being assigned which are valued in excess of
$500,000 and required by the Administrative Agent, in form and
substance satisfactory to the Collateral Agent, containing the
confirmation by such other parties that they will continue to
perform under such contracts and agreements, as the same may
be, after enforcement of and realization of such assignment by
the Collateral Agent. Such Collateral Assignment of Contracts
and Plans shall be in full force and effect, and original or
photocopy counterparts thereof and of such consents shall have
been delivered to the Administrative Agent, in sufficient
quantities for the Administrative Agent and the Lenders.
40
41
(IV) COLLATERAL ASSIGNMENT OF LICENSES AND PERMITS.
The Borrower and the Manager shall have duly executed and
delivered a Collateral Assignment of Licenses and Permits (as
modified, amended or supplemented from time to time in
accordance with the terms thereof and hereof, a "COLLATERAL
ASSIGNMENT OF LICENSES AND PERMITS"), substantially in the
form attached hereto as Exhibit C-4, for such Project,
covering all licenses and permits required for the ownership,
construction and operation of such Project, such Collateral
Assignment of Licenses and Permits shall be in full force and
effect, and original or photocopy counterparts thereof shall
have been delivered to the Administrative Agent, in sufficient
quantities for the Administrative Agent and the Lenders.
(V) ENVIRONMENTAL INDEMNITY AGREEMENT. The
Administrative Agent and the Borrower shall have duly executed
and delivered an Environmental Indemnity Agreement (as
modified, amended or supplemented from time to time in
accordance with the terms thereof and hereof, an
"ENVIRONMENTAL INDEMNITY AGREEMENT"), substantially in the
form attached hereto as Exhibit C-5, for such Project, such
Environmental Indemnity Agreement shall be in full force and
effect, and original or photocopy counterparts thereof shall
have been delivered to the Administrative Agent, in sufficient
quantities for the Administrative Agent and the Lenders.
(VI) MANAGEMENT SUBORDINATION AGREEMENT. All rights
of the Developer under the Development Contract, and the
Manager under the Management Contract and the Project Lease,
if applicable, for such Project shall be subordinated to the
Obligations and the Lien of the Mortgage for such Project
pursuant to a subordination agreement substantially in the
form attached hereto as Exhibit C-6 (as modified, amended or
supplemented from time to time in accordance with the terms
thereof and hereof, a "MANAGEMENT SUBORDINATION AGREEMENT").
Such Management Subordination Agreement shall include as an
Exhibit thereto a true correct and complete copy of the
Development Contract, and the Management Contract or Project
Lease, as applicable. Such Management Subordination Agreement
shall be in full force and effect, and original or photocopy
counterparts thereof shall have been delivered to the
Administrative Agent, in sufficient quantities for the
Administrative Agent and the Lenders.
(E) RECORDATION OF SECURITY DOCUMENTS, PAYMENT OF TAXES, ETC.
Such Mortgage and such Collateral Assignment of Leases shall have been
duly recorded, published and filed in such manner and in such places as
is required by law to establish, perfect, preserve and protect the
rights and security interests of the parties thereto and their
respective successors and assigns, all notices or UCC financing
statements in respect of any liens and security interests purported to
be granted by any of the Security Documents executed by the Borrower or
otherwise related to such Project shall have been duly executed,
recorded, published and filed in such manner and in such places as is
required by law to establish, perfect, preserve and protect the rights
and security interests of the parties thereto and their respective
successors and assigns, and all taxes, fees and other charges then due
and payable in connection with the execution, delivery, recording,
publishing and filing of such instruments and the issue and delivery of
the Notes shall have been paid in full.
(F) EVIDENCE OF INSURANCE. The Collateral Agent shall have
received certificates of insurance and other evidence, satisfactory to
it, of compliance with the insurance requirements of this Agreement and
the Credit Documents to which the Borrower is a party, and copies of
all certificates of insurance or endorsements to policies related to
such compliance shall have been delivered to the Administrative Agent
in sufficient quantities for the Lenders.
(G) SEARCH REPORTS. The Administrative Agent shall have
received completed requests for information from filing officers on an
appropriate UCC form, or search reports from one or more commercial
search firms acceptable to the Administrative Agent, listing all of the
effective financing
41
42
statements filed against the Borrower in any jurisdiction in which the
Borrower maintains an office or in which any Collateral of the Borrower
is or is to be located, together with copies of such financing
statements. No such financing statements shall reflect any security
interests which encumber or conflict with the first priority of any
security interests purported to be granted by the Borrower to the
Collateral Agent.
(H) TITLE COMMITMENT, ETC. As to each Real Property subjected
to the Lien of a Mortgage of the Borrower (a "MORTGAGED PROPERTY"), the
Collateral Agent shall have received a commitment or proforma policy
for an ALTA mortgagee's policy of title insurance (the "TITLE
COMMITMENT") issued by a title insurance company satisfactory to the
Collateral Agent (a "TITLE COMPANY") for the full aggregate amount of
the Loans to be made to the Borrower related to the Project located at
such Real Property establishing that the Title Company is prepared,
upon the making of Loans for such Project and other typical conditions,
to insure the Mortgage of the Borrower as of the time of its filing for
record as a first and prior lien upon the Premises and on the
Improvements to be erected by the Borrower thereon, subject only to the
Permitted Exceptions (as defined in the Borrower's Mortgage). The Title
Commitment shall meet the requirements set forth in Annex II attached
hereto. Not less than five Business days prior to the Project Closing
Date there shall be delivered to the Collateral Agent copies of all
documents constituting the Permitted Exceptions. Contemporaneously with
the Project Closing Date, the Borrower shall instruct the Title Company
to deliver to the Collateral Agent a final policy of title insurance (a
"TITLE POLICY") reflecting the Title Commitment, the requirements of
the Credit Documents applicable thereto, and the recording of the
Borrower's Mortgage, as soon as possible after closing. In addition,
the Borrower shall have paid or caused to be paid all costs and
expenses payable in connection with all of such actions, including but
not limited to (x) all mortgage, intangibles or similar taxes or fees,
however characterized, payable in respect of this Agreement and the
execution and delivery of the Notes, such Mortgage or any of the other
Credit Documents or the recording of any of the same; and (y) all
expenses and premiums of the Title Company in connection with the
issuance of such policy or policies of title insurance and to all costs
and expenses required for the recording of the Mortgage or any other
Credit Documents in the appropriate public records.
(I) SURVEY, ETC. As to each Mortgaged Property of the
Borrower, the Collateral Agent shall have received a current survey and
site plan showing the outline of the Premises and all matters shown in
Schedule B, Section 2 of the Title Commitment and meeting all of the
requirements of the "Property Survey" set forth in Annex III attached
hereto. Said survey shall be currently dated and shall be prepared in
accordance with (A) the Minimum Standard Detail Requirements for
ALTA/ACSM Land Title Surveys (the "MINIMUM REQUIREMENTS"), as jointly
adopted by the American Land Title Association and the American
Congress on Surveying and Mapping in 1997 (or as amended); (B)
requirements of applicable statutes of the jurisdiction in which the
Premises are located; and (C) standards of the state society of
professional land surveyors of such jurisdiction, if any, bearing a
proper certificate by the surveyor, which certificate shall include the
legal description of the Premises, shall be made in favor of the
Collateral Agent and the Title Company, be substantially in the form of
Annex IV attached hereto, and contain such other certifications as are
contemplated by the Minimum Requirements and applicable state statutes.
The survey shall also contain such additional information as may
reasonably be required by the Collateral Agent or the Title Company.
The survey shall be subject to the approval of the Collateral Agent and
certified by a land surveyor registered as such in the applicable
jurisdiction and approved by the Collateral Agent.
(J) FLOOD MAPS, ETC. The Collateral Agent and the Lenders
shall have received evidence satisfactory to the Collateral Agent and
each Lender that the Premises are not included in a special flood
hazard area as designated by the Federal Emergency Management Agency
("FEMA") on its Flood Hazard Boundary Map ("FHBMS") and Flood Insurance
Rate Maps ("FIRMS"), and the Department of Housing and Urban
Development, Federal Insurance Administration, Special Flood Hazard
Area Maps.
42
43
(K) OPINIONS OF COUNSEL. The Collateral Agent shall have
received (i) an opinion of counsel to the Borrower as to the due
authorization, execution and delivery by the Borrower of the Credit
Documents referred to in section 6.2(e) and covering such other matters
incident to the transactions contemplated hereby as the Collateral
Agent may reasonably request, and (ii) if requested by the Collateral
Agent (it being understood that the Collateral Agent is authorized to
refrain from making such request if it recently shall have received an
opinion of local counsel in the same jurisdiction as to the mortgaging
by the Borrower of a different Mortgaged Property as part of the
Collateral), an opinion of local counsel in the jurisdiction in which
the Mortgaged Property is located, covering such matters incident to
the transactions contemplated hereby as the Collateral Agent may
reasonably request, all such opinions to be in form and substance
reasonably satisfactory to the Collateral Agent.
(L) ADDITIONAL REQUIREMENTS FOR PROJECTS WHICH ARE COMPLETED
AT THE TIME OF THE INITIAL BORROWING. If such Project has been
completed at the time of the initial Borrowing with respect thereto,
the Administrative Agent shall have received
(i) copies of the Certificate of Occupancy with
respect thereto (except with respect to the Projects in
Highlands Ranch, Colorado and Xxxxxxxx New Jersey),
(ii) a final as-built survey, bearing a proper
certificate by the surveyor, showing the completed
Improvements and all easements and right-of-ways, and
(iii) if such Project has been completed within 90
days prior to the date of the Borrowing in respect thereof, an
affidavit of the Borrower stating that each person providing
any material or performing any work in connection with the
Premises has been (or will be, with the proceeds of and
immediately following receipt by the Borrower of such
Borrowing) paid in full or bonded or insured to the reasonable
satisfaction of the Administrative Agent,
and all such documents shall be satisfactory in form and substance to
the Administrative Agent.
(M) ADDITIONAL REQUIREMENTS FOR PROJECTS WHICH HAVE NOT BEEN
COMPLETED AT THE TIME OF THE INITIAL BORROWING. If such Project has not
been completed at the time of the initial Borrowing with respect
thereto:
(I) PERMITS AND AUTHORIZATIONS; LEGAL REQUIREMENTS,
ETC. The Administrative Agent shall have received:
(A) copies of all permits and authorizations
covering the grading and excavation of the Project,
and
(B) either (x) copies of all other required
building permits, and zoning, site and other
governmental approvals, for the construction of the
Improvements, or (y) certification or opinion from
the Borrower's independent architect or construction
engineer, substantially to the effect that the
construction of the Improvements in accordance with
the Plans and Specifications and the intended use of
the Improvements appears to comply with all
applicable material Legal Requirements which are
applicable to the Premises;
and the Administrative Agent shall be satisfied that (C) any
required zoning or site plan approvals for the Improvements
have been obtained from all applicable governmental
authorities and are in full force and effect, or that any such
approvals can be obtained in the ordinary course of business
without undue difficulty at or prior to the time so required,
and (D) there is
43
44
no pending proceeding, either administrative, legislative or
judicial, which would in any manner adversely affect the
status of the zoning with respect to the Improvements or the
Premises; and all such matters and documents shall be
satisfactory in form and substance to the Administrative
Agent.
(II) SOIL REPORT. The Administrative Agent shall have
received a soil report, prepared by an engineering or similar
firm acceptable to the Administrative Agent, satisfactory in
form and substance to it, demonstrating to the satisfaction of
the Administrative Agent that the soil underlying the
Borrower's Project will adequately support the Improvements of
such Project when constructed in accordance with the Plans and
Specifications applicable thereto.
(III) ESTIMATED COSTS AND DISBURSEMENTS. If in
addition to the Project Summary & Feasibility Report for such
Project, the Administrative Agent has requested more detailed
information as to the estimated costs of such Project, the
Administrative Agent shall have received (A) an itemized,
certified statement of the Guarantor or the Borrower giving
estimated costs of the entire Project; and (iv) a certificate
of the Guarantor or the Borrower as to the Borrower's
estimated schedule for disbursements of the Loan proceeds for
such Project.
(N) PROCEEDINGS AND DOCUMENTS. All corporate and other
proceedings and all documents incidental to the transactions
contemplated hereby shall be satisfactory in substance and form to the
Administrative Agent and the Lenders and the Administrative Agent and
its special counsel and the Lenders shall have received all such
counterpart originals or certified or other copies of such documents as
the Administrative Agent or its special counsel or any Lender may
reasonably request.
The Lenders agree that the Administrative Agent and the Collateral Agent may, in
their discretion, without the approval or consent of, or any liability to, any
of the Lenders, (i) cause a particular Mortgage (and any other Security
Documents related thereto) to be limited so that it secures only the Loans made
to finance the Project covered thereby, and accept corresponding changes in the
coverage of the Title Policy applicable thereto, in order to avoid burdensome
recording taxes or charges which would be imposed if such Mortgage secured
instead some greater amount (or all) of the Obligations, (ii) shorten the
maturity of any Notes, if requested by the Borrower in order to avoid burdensome
recording or intangibles taxes or similar charges, (iii) accept and approve the
forms of leases and any subordination and nondisturbance agreements, as
contemplated by section 8.12, and/or (v) approve any grants of licenses or
easements affecting any Mortgaged Property which, in the reasonable opinion of
the Administrative Agent, do not materially adversely affect the value of such
Mortgaged Property.
6.3. CONDITIONS PRECEDENT FOR SUBSEQUENT BORROWINGS DURING THE
CONSTRUCTION PERIOD FOR A PROJECT. The obligation of any Lender to make any
Loans for a Project during the Construction Period for such Project is subject
to the satisfaction of each of the following conditions on the date of any
Borrowing by the Borrower for a Project after the date of the initial Borrowing
by the Borrower for such Project:
(A) PLANS AND SPECIFICATIONS. The Administrative Agent shall
have received the Plans and Specifications for the Improvements to such
Project to the extent not already delivered to the Administrative
Agent, and if such Plans and Specifications reflect any modifications
or additional items not previously approved by the Administrative Agent
and the Inspecting Consultant, or otherwise permitted under section
2.3(d), such modifications and/or additional items shall be
satisfactory in form and substance to the Administrative Agent and the
Inspecting Consultant, in their reasonable discretion, and copies of
any report thereon of the Inspecting Consultant shall have been
delivered to the Administrative Agent and the Lenders.
(B) TITLE POLICY ENDORSEMENT/LIEN WAIVERS. The Collateral
Agent shall have received an endorsement (including without limitation
a CLTA Endorsement No. 122 for Projects located in
44
45
California) to the Title Policy indicating that since the last
preceding disbursement of the Loans to the Borrower for such Project
there has been no change in the state of title and no survey exceptions
not theretofore approved by the Collateral Agent and increasing the
coverage of the Title Policy by an amount equal to the disbursement
then being made so that the total amount insured equals the total
amount of Loan proceeds disbursed by the Administrative Agent to the
Borrower under the terms hereof relating to the Project located on the
Real Property covered by such Title Policy and changing the effective
date of the Title Policy to the date of the disbursement. For any
Project located in California, the Borrower shall furnish unconditional
lien waivers covering any amount funded by prior disbursements of
proceeds of Loans or paid by the Borrower to suppliers of work or
materials prior to the date for which the disbursement is requested;
for Projects in all other states, the Borrower shall provide such lien
waivers upon the request of the Administrative Agent or Title Company,
including, without limitation, for work performed by the general
contractor. No valid "stop notice" or similar notice shall have been
filed and remain unsatisfied or unreleased as of the date of any
scheduled disbursement.
(C) LOAN PROCEEDS FIRST USED TO PAY FOR FOUNDATION OR BUILDING
COSTS. Prior to the first advance to the Borrower of Loan proceeds to
be used for the payment or financing of foundation or building costs
for a Project, the Administrative Agent shall have received, if not
previously delivered, a copy of the applicable building permit or
similar governmental approval for the construction of the Improvements.
(D) FINAL LOANS BY THE BORROWER FOR A PROJECT. In the case of
Loans to be incurred by the Borrower for a Project after completion of
the Improvements to such Project any portion of the proceeds of which
is to be used to pay any Retainage Amount, the Administrative Agent
shall have received the following, each of which shall be satisfactory
in form and substance to it:
(i) evidence of the issuance by all appropriate
governmental authorities of the Certificate of Occupancy and
any other material permits or authorizations related to the
construction, occupancy or operation of the Improvements;
(ii) a final as-built survey, bearing a proper
certificate by the surveyor, showing the completed
Improvements and all easements and right-of-ways;
(iii) an additional endorsement to the Title Policy
insuring the priority of the Mortgage in the full amount of
the Loans to the Borrower relating to the Project covered by
such Mortgage against mechanic's and materialmen's liens
(including inchoate liens) arising by reason of unpaid labor
and materials supplied in connection with the construction and
development of the Project;
(iv) a certificate by the Inspecting Consultant or
other person satisfactory to the Administrative Agent stating
that the Improvements have been 100% completed substantially
in accordance with the Plans and Specifications;
(v) an affidavit of the Borrower stating that each
person providing any material or performing any work in
connection with the Premises has been (or will be, with the
proceeds of and immediately following receipt by the Borrower
of such final Loan disbursement) paid in full or bonded or
insured to the reasonable satisfaction of the Administrative
Agent; and
(vi) for Projects located in California, evidence
that a Notice of Completion shall have been recorded, and
evidence of compliance with all similar requirements in other
states, if any, for Project located in states other than
California.
45
46
6.4. CONDITIONS PRECEDENT TO ALL LOANS. The obligation of any Lender to
make any Loan is subject, at the time thereof, to the satisfaction of the
following conditions:
(A) LOANS DURING CONSTRUCTION PERIOD. In the case of any Loan
for a Project during the Construction Period therefor, the
Administrative Agent shall have received a Draw Request and a Notice of
Borrowing meeting the requirements of sections 2.3 and 2.4 with respect
to the incurrence of such Loan. The Administrative Agent shall have
received, in sufficient quantity for the Administrative Agent and the
Lenders, copies of an Inspecting Consultant Progress Report which
justifies the disbursement of Loan proceeds covered by the Draw Request
relating to such Borrowing.
(B) LOANS FOR PROJECTS WHICH ARE COMPLETED AT THE TIME OF THE
INITIAL BORROWING. In the case of a Project which is first financed
hereunder following completion thereof, the Administrative Agent shall
have received a Notice of Borrowing meeting the requirements of section
2.4 with respect to the incurrence of the Loans for such Project.
(C) NO DEFAULT; REPRESENTATIONS AND WARRANTIES. At the time of
such Loan and also after giving effect thereto, (i) there shall exist
no Default or Event of Default and (ii) all representations and
warranties of the Credit Parties contained herein or in the other
Credit Documents shall be true and correct in all respects with the
same effect as though such representations and warranties had been made
on and as of the date of such Loan, except to the extent that such
representations and warranties expressly relate to an earlier specified
date, in which case such representations and warranties shall have been
true and correct in all material respects as of the date when made.
The acceptance of the benefits of each Loan shall constitute a representation
and warranty by the Borrower to each of the Lenders that all of the applicable
conditions specified in sections 6.1, 6.2, 6.3 and/or 6.4, as the case may be,
exist as of that time. Those certificates, legal opinions and other documents
and papers referred to in this section 6 as being deliverable only to the
Administrative Agent or the Collateral Agent need not be delivered to the
Lenders. Those certificates, legal opinions and other documents and papers
referred to in this section 6 as being deliverable to the Lenders or to the
Administrative Agent for the account of the Lenders shall be delivered to the
Administrative Agent for the account of each of the Lenders and, except for the
Notes, in sufficient counterparts for each of the Lenders, and the
Administrative Agent will promptly distribute to the Lenders their respective
Notes and the copies of such other certificates, legal opinions and documents.
For the convenience of the parties hereto, Annex V to this Agreement
contains a Qualified Project Construction Loan Checklist which is intended to be
used by the parties in satisfying the requirements of this Agreement with
respect to the qualification and financing of Projects hereunder. In the event
of any inconsistency between the terms of Annex V and any of the terms or
conditions of this Agreement or the other Credit Documents, the terms and
conditions of this Agreement and the other Credit Documents shall control.
SECTION 7. REPRESENTATIONS AND WARRANTIES.
In order to induce the Lenders to enter into this Agreement and to make
the Loans provided for herein, the Borrower makes the following representations
and warranties to, and agreements with, the Lenders, all of which shall survive
the execution and delivery of this Agreement and the making of any Loans:
7.1. ORGANIZATIONAL STATUS, ETC. The Borrower is a duly organized or
formed and validly existing limited liability company, in good standing under
the laws of the jurisdiction of its formation and has the limited liability
company power and authority to own its property and assets and to transact the
business in which it is engaged and presently proposes to engage. The Borrower
has duly qualified and is authorized to do business in (i) all jurisdictions
where any of its Projects is located; and (ii) all other jurisdictions where it
is required to be so qualified except where the failure to be so qualified would
not have a Material Adverse Effect.
46
47
7.2. SUBSIDIARIES. The Borrower has no Subsidiaries.
7.3. ORGANIZATIONAL POWER AND AUTHORITY, ETC. The Borrower has the
organizational power and authority to execute, deliver and carry out the terms
and provisions of the Credit Documents to which it is party and has taken all
necessary organizational (including any required approvals of its members)
action to authorize the execution, delivery and performance of the Credit
Documents to which it is party. The Borrower has duly executed and delivered
each Credit Document to which it is party and each Credit Document to which it
is party constitutes the legal, valid and binding agreement or obligation of the
Borrower enforceable in accordance with its terms, except to the extent that the
enforceability thereof may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws generally affecting creditors'
rights and by equitable principles (regardless of whether enforcement is sought
in equity or at law).
7.4. NO VIOLATION. Neither the execution, delivery and performance by
the Borrower of the Credit Documents to which it is party nor compliance with
the terms and provisions thereof (i) will contravene any provision of any law,
statute, rule, regulation, order, writ, injunction or decree of any court or
governmental instrumentality applicable to the Borrower or its properties and
assets, (ii) will conflict with or result in any breach of, any of the terms,
covenants, conditions or provisions of, or constitute a default under, or result
in the creation or imposition of (or the obligation to create or impose) any
Lien (other than any Lien created by the Credit Documents themselves) upon any
of the property or assets of the Borrower pursuant to the terms of any
promissory note, bond, debenture, indenture, mortgage, deed of trust, credit or
loan agreement, or any other material agreement or other instrument, to which
the Borrower is a party or by which it or any of its property or assets are
bound or to which it may be subject, or (iii) will violate any provision of the
Company Organizational Documents.
7.5. GOVERNMENTAL APPROVALS. No order, consent, approval, license,
authorization, or validation of, or filing, recording or registration with, or
exemption by, any foreign or domestic governmental or public body or authority,
or any subdivision thereof, is required to authorize or is required as a
condition to (i) the execution, delivery and performance by the Borrower of any
Credit Document to which it is a party, or (ii) the legality, validity, binding
effect or enforceability of any Credit Document to which the Borrower is a
party, other than filing and recordings required to establish and perfect any
Liens purported to be granted by any of the Credit Documents. No Project
participates in any Medicare or Medicaid or similar program.
7.6. LITIGATION. There are no actions, suits or proceedings pending or,
to, the knowledge of the Borrower, threatened with respect to the Borrower (i)
that have, or could reasonably be expected to have, a Material Adverse Effect,
or (ii) which question the validity or enforceability of any of the Credit
Documents, or of any action to be taken by the Borrower pursuant to any of the
Credit Documents.
7.7. USE OF PROCEEDS; MARGIN REGULATIONS. (a) The proceeds of all Loans
shall be used solely to finance costs and expenses incurred in connection with
the acquisition, construction and development of Qualified Projects, as more
particularly specified in the Project Summary & Feasibility Reports.
(b) No part of the proceeds of any Loans will be used directly or
indirectly to purchase or carry Margin Stock, or to extend credit to others for
the purpose of purchasing or carrying any Margin Stock. Neither any Loans, nor
the use of the proceeds thereof, will violate or be inconsistent with the
provisions of Regulation T, U or X of the Board of Governors of the Federal
Reserve System. The Borrower is not engaged in the business of extending credit
for the purpose of purchasing or carrying any Margin Stock. At no time would
more than 25% of the value of the assets of the Borrower that are subject to any
"arrangement" (as such term is used in section 221.2(g) of such Regulation U)
hereunder be represented by Margin Stock.
7.8. FINANCIAL STATEMENTS, ETC. (a) The Borrower was formed on December
29, 1998, with an initial committed equity capitalization of $10,000,000, later
increased to $25,125,000 based upon all expected 19
47
48
Projects being developed, and has at the date hereof no assets or liabilities
unrelated to the ownership and development of the 19 Projects which it acquired
or has the right to acquire pursuant to the Company Capitalization Documents.
The Borrower has furnished to the Lenders and the Administrative Agent complete
and correct copies of its balance sheet as of June 30, 1999. Such balance sheet
has been prepared in accordance with GAAP and fairly presents the financial
position of the Borrower as of the date indicated, subject, to the absence of
footnotes and to normal year-end or audit adjustments which the Borrower
reasonably believes will not involve a Material Adverse Effect.
(b) The Borrower (i) has received consideration which is the reasonable
equivalent value of the obligations and liabilities that the Borrower has
incurred to the Administrative Agent and the Lenders, (ii) has committed capital
sufficient to carry on its business and transactions and all business and
transactions in which it is about to engage, (iii) is solvent and able to pay
its debts as they mature, and (iv) owns property having a value, both at fair
valuation and at present fair salable value, greater than the amount required to
pay its debts. The Borrower is not entering into the Credit Documents with the
intent to hinder, delay or defraud its creditors.
(c) The Borrower has received aggregate cash capital contributions from
its members in an amount not less than twenty-five percent (25%) of the
aggregate budgeted costs and expenses of the acquisition and construction of all
Projects approved, or deemed approved, by the Administrative Agent and the
Lenders hereunder and the operation thereof as reflected in each such Project's
Project Summary & Feasibility Reports as initially approved, or deemed approved,
by the Administrative Agent and the Lenders.
7.9. NO MATERIAL ADVERSE CHANGE. Since the date of its formation on
December 29, 1998, there has been no change in the condition, business or
affairs of the Borrower, or its properties and assets considered as an entirety,
except for changes, none of which, individually or in the aggregate, has had or
could reasonably be expected to have, a Material Adverse Effect.
7.10. TAX RETURNS AND PAYMENTS. The Borrower has filed all federal
income tax returns and all other material tax returns, domestic and foreign,
required to be filed by it and has paid all material taxes and assessments
payable by it which have become due, other than those not yet delinquent and
except for those contested in good faith. The Borrower has established on its
books such charges, accruals and reserves in respect of taxes, assessments, fees
and other governmental charges for all fiscal periods as are required by GAAP.
The Borrower knows of no proposed assessment for additional federal, foreign or
state taxes for any period, or of any basis therefor, which, individually or in
the aggregate, taking into account such charges, accruals and reserves in
respect thereof as the Borrower has made, could reasonably be expected to have a
Material Adverse Effect.
7.11. TITLE TO PROPERTIES, ETC. The Borrower has good and marketable
title, in the case of real property, and good title (or valid leasehold
interests, in the case of any leased property), in the case of all other
property, to all of its properties and assets free and clear of Liens other than
Liens permitted by section 9.3. The interests of the Borrower in the properties
reflected in the most recent balance sheet referred to in section 7.8, taken as
a whole, were sufficient, in the judgment of the Borrower, as of the date of
such balance sheet for purposes of the ownership and operation of the businesses
conducted by the Borrower.
7.12. LAWFUL OPERATIONS, ETC. The Borrower and any applicable Manager,
taken together, hold or can readily obtain without undue difficulty prior to the
time required to be obtained, all federal, state and local governmental
licenses, registrations, certifications, permits and authorizations which are
necessary under applicable Legal Requirements in order to own, construct,
develop and operate each Project, except for any failure to obtain and maintain
in effect any such licenses, registrations, certifications, permits and
authorizations which, individually or in the aggregate, could not reasonably be
expected to have a Material Adverse Effect. The Borrower is in full compliance
with all material Legal Requirements which are applicable to it, its operations,
or its properties and assets, including without limitation, applicable
requirements of Environmental Laws, except for
48
49
any noncompliance which, individually or in the aggregate, could not reasonably
be expected to have a Material Adverse Effect.
7.13. ENVIRONMENTAL MATTERS. (a) There are no Environmental Claims
pending or, to the best knowledge of the Borrower, threatened wherein an
unfavorable decision, ruling or finding would reasonably be expected to have a
Material Adverse Effect. There are no facts, circumstances, conditions or
occurrences on any Real Property now or at any time owned, leased or operated by
the Borrower or on any property adjacent to any such Real Property, which are
known by the Borrower or as to which the Borrower has received written notice,
that could reasonably be expected (i) to form the basis of an Environmental
Claim against the Borrower or any Real Property of the Borrower, or (ii) to
cause such Real Property to be subject to any restrictions on the ownership,
occupancy, use or transferability of such Real Property under any Environmental
Law, except in each such case, such Environmental Claims or restrictions that
individually or in the aggregate would not reasonably be expected to have a
Material Adverse Effect.
(b) Hazardous Materials have not at any time been (i) generated, used,
treated or stored on, or transported to or from, any Real Property of the
Borrower or (ii) released on any such Real Property, in each case where such
occurrence or event is not in compliance with Environmental Laws and is
reasonably likely to have a Material Adverse Effect.
7.14. COMPLIANCE WITH ERISA. (a) The Borrower is not and will not be an
"employee benefit plan" as defined in section 3(3) of ERISA, which is subject to
Title I of ERISA, and the assets of the Borrower do not and will not constitute
"plan assets" of one or more of such plans for purposes of Title I of ERISA.
(b) The Borrower (1) is not and will not be a "governmental plan"
within the meaning of section 3(32) of ERISA and transactions by or with the
Borrower are not and will not be subject to state statutes applicable to the
Borrower regulating investments of and fiduciary obligations with respect to
governmental plans and (2) one or more of the following circumstances is true:
(A) equity interests in the Borrower are publicly-offered
securities within the meaning of 29 C.F.R. ss. 2510.3-101(b)(2);
(B) less than 25% of each outstanding class of equity
interests in the Borrower are held by "benefit plan investors" within
the meaning of 29 C.F.R.ss.2510.3-101(f)(2); or
(C) the Borrower qualifies as an "operating company" or a
"real estate operating company" within the meaning of 29 C.F.R. ss.
2510.3-101(c) or (e) or an investment company registered under the
Investment Company Act of 1940.
(c) Compliance by the Borrower with the provisions hereof and the
making of the Loans contemplated hereby will not involve any prohibited
transaction within the meaning of ERISA or section 4975 of the Code. The
Borrower (i) has fulfilled all obligations under minimum funding standards of
ERISA and the Code with respect to each Plan that is not a Multiemployer Plan or
a Multiple Employer Plan, (ii) has satisfied all its contribution obligations in
respect of each Multiemployer Plan and each Multiple Employer Plan, (iii) is in
compliance in all material respects with all other applicable provisions of
ERISA and the Code with respect to each Plan, each Multiemployer Plan and each
Multiple Employer Plan, and (iv) has not incurred any liability under the Title
IV of ERISA to the PBGC with respect to any Plan, any Multiemployer Plan, any
Multiple Employer Plan, or any trust established thereunder. No Plan or trust
created thereunder has been terminated, and there have been no Reportable
Events, with respect to any Plan or trust created thereunder or with respect to
any Multiemployer Plan or Multiple Employer Plan, which termination or
Reportable Event will or could result in the termination of such Plan,
Multiemployer Plan or Multiple Employer Plan and give rise to a material
liability of the Borrower or any ERISA Affiliate in respect thereof. Neither the
Borrower nor any ERISA Affiliate is at the
49
50
date hereof, or has been at any time within the two years preceding the date
hereof, an employer required to contribute to any Multiemployer Plan or Multiple
Employer Plan, or a "contributing sponsor" (as such term is defined in section
4001 of ERISA) in any Multiemployer Plan or Multiple Employer Plan. Neither the
Borrower nor any ERISA Affiliate has any contingent liability with respect to
any post-retirement "welfare benefit plan" (as such term is defined in ERISA)
except as has been disclosed to the Lenders in writing.
7.15. INVESTMENT COMPANY ACT, ETC. The Borrower is not subject to
regulation with respect to the creation or incurrence of Indebtedness under the
Investment Company Act of 1940, as amended, the Interstate Commerce Act, as
amended, the Federal Power Act, as amended, the Public Utility Holding Company
Act of 1935, as amended, or any applicable state public utility law.
7.16. BORROWER NOT A FOREIGN PERSON, ETC. The Borrower is not a
"foreign person" within the meaning of section 1445(f)(3) of the Code.
7.17. NO COLLECTIVE BARGAINING AGREEMENTS. The Borrower is not a party
to any collective bargaining agreement.
7.18. SECURITY INTERESTS. Once executed and delivered, and until
terminated in accordance with the terms thereof, each of the Security Documents
creates, as security for the obligations purported to be secured thereby, a
valid and enforceable security interest in and Lien on all of the Collateral
subject thereto from time to time, in favor of the Collateral Agent for the
benefit of the Secured Creditors referred to in the Security Documents, superior
to and prior to the rights of all third persons and subject to no other Liens,
other than Permitted Liens. No filings or recordings are required in order to
perfect the security interests created under any Security Document except for
filings or recordings required in connection with any such Security Document
which shall have been made, or for which satisfactory arrangements have been
made, upon or prior to the execution and delivery thereof. All recording, stamp,
intangible or other similar taxes required to be paid by any person under
applicable legal requirements or other laws applicable to the property
encumbered by the Security Documents in connection with the execution, delivery,
recordation, filing, registration, perfection or enforcement thereof have been
paid, or arrangements for such payment made which are satisfactory to the
Administrative Agent.
7.19. TRUE AND COMPLETE DISCLOSURE. All factual information (taken as a
whole) heretofore or contemporaneously furnished by or on behalf of the Borrower
in writing to the Administrative Agent or any Lender for purposes of or in
connection with this Agreement or any transaction contemplated herein, is, and
all other such factual information (taken as a whole) hereafter furnished by or
on behalf of the Borrower in writing to any Lender will be, true and accurate in
all material respects on the date as of which such information is dated or
certified and not incomplete by omitting to state any material fact necessary to
make such information (taken as a whole) not misleading at such time in light of
the circumstances under which such information was provided, except that any
such information consisting of financial projections prepared by management of
the Borrower is only represented herein as being based on good faith estimates
and assumptions believed by such persons to be reasonable at the time made, it
being recognized by the Lenders that such projections as to future events are
not to be viewed as facts and that actual results during the period or periods
covered by any such projections may differ materially from the projected
results. As of the Effective Date, there is no fact known to the Borrower which
has, or could reasonably be expected to have, a Material Adverse Effect which
has not theretofore been disclosed in writing to the Lenders.
50
51
SECTION 8. AFFIRMATIVE COVENANTS.
The Borrower hereby covenants and agrees that so long as this Agreement
is in effect and until such time as the Total Commitment has been terminated, no
Notes are outstanding and the Loans, together with interest, Fees and all other
Obligations hereunder, have been paid in full:
8.1. REPORTING REQUIREMENTS. The Borrower will furnish to each Lender
and the Administrative Agent:
(A) ANNUAL UNAUDITED FINANCIAL STATEMENTS. As soon as
available and in any event within 120 days after the close of each
fiscal year of the Borrower, the unaudited balance sheet of the
Borrower as at the end of such fiscal year and the related unaudited
statements of income, of members' equity and of cash flows for such
fiscal year, in each case setting forth comparative figures for the
preceding fiscal year, all in reasonable detail and certified on behalf
of the Borrower by the Chief Financial Officer or other Authorized
Officer of the Borrower.
(B) QUARTERLY UNAUDITED FINANCIAL STATEMENTS. As soon as
available and in any event within 60 days after the close of each of
the quarterly accounting periods in each fiscal year of the Borrower,
the unaudited condensed balance sheet of the Borrower as at the end of
such quarterly period and the related unaudited condensed statements of
income and of cash flows for such quarterly period and for the fiscal
year to date, and setting forth, in the case of such unaudited
statements of income and of cash flows, comparative figures for the
related periods in the prior fiscal year, all of which financial
statements shall be certified on behalf of the Borrower by the Chief
Financial Officer or other Authorized Officer of the Borrower, subject
to changes resulting from normal year-end or audit adjustments.
(C) OFFICER'S COMPLIANCE CERTIFICATES. At the time of the
delivery of the financial statements provided for in sections 8.1(a)
and (b), a certificate on behalf of the Borrower of the Chief Financial
Officer or other Authorized Officer of the Borrower to the effect that,
to the best knowledge of the Borrower, no Default or Event of Default
exists or, if any Default or Event of Default does exist, specifying
the nature and extent thereof, which certificate shall include, if
monthly financial information is not at the time required to be
delivered hereunder pursuant to section 8.1(d), computations, in
reasonable detail, of the DSCR for each Project for the preceding two
fiscal quarters, in the case of any Project which has been open and
operating for such period.
(D) MONTHLY PROJECT FINANCIAL STATEMENTS. Once a Project is
financed hereunder and thereafter until such Project has individually
achieved a DSCR of at least 1.20 to 1.00 for each of two consecutive
fiscal quarters, as soon as available and in any event within 45 days
after the close of each of the monthly accounting periods in each
fiscal year of the Borrower, the unaudited financial statements and
other financial information for such Project, in the form regularly
prepared for internal review by senior financial officers of the
Borrower, in each case setting forth comparisons of actual financial
information with the budgeted and projected financial information
included in the Project Summary & Feasibility Reports for such Project,
and occupancy statistics, all in reasonable detail and certified on
behalf of the Borrower by the Chief Financial Officer or other
Authorized Officer of the Borrower, which certificate shall include
computations, in reasonable detail, of the DSCR for such Project for
the preceding two fiscal quarters, in the case of any Project which has
been open and operating for such period.
(E) QUARTERLY PROJECT FINANCIAL STATEMENTS. In the case of any
Project which is being financed hereunder and as to which monthly
financial information is not required to be delivered pursuant to
section 8.1(d), as soon as available and in any event within 60 days
after the close of each of the first three fiscal quarters of the
Borrower, and within 120 days after the close of the fourth fiscal
quarter of
51
52
the Borrower's fiscal year, financial statements which include at least
an income statement and a cash flow statement, and other financial
information for such Project for such fiscal quarter, including
comparisons of actual financial information with the budgeted and
projected financial information included in the Project Summary &
Feasibility Report for such Project, and occupancy statistics, all in
reasonable detail and certified on behalf of the Borrower by the Chief
Financial Officer or other Authorized Officer of the Borrower, which
certificate shall include computations, in reasonable detail, of the
DSCR for such Project for the preceding two fiscal quarters.
(F) ANNUAL PROJECT FINANCIAL STATEMENTS. In the case of any
Project which was financed hereunder during a fiscal year of the
Borrower, as soon as available and in any event within 120 days after
the close of such fiscal year, financial statements which include at
least an income statement and a cash flow statement, and other
financial information for such Project for such fiscal year, including
comparisons of actual financial information with the budgeted and
projected financial information included in the Project Summary &
Feasibility Report for such Project, all in reasonable detail and
certified on behalf of the Borrower by the Chief Financial Officer or
other Authorized Officer of the Borrower, which certificate shall
include computations, in reasonable detail, of the DSCR for such
Project for the fiscal year.
(G) NOTICE OF DEFAULT OR LITIGATION, ETC. Promptly, and in any
event within three Business Days, in the case of clause (i) below, or
five Business Days, in the case of clause (ii) below, after the
Borrower obtains knowledge thereof, notice of
(i) the occurrence of any event which constitutes a
Default or Event of Default, which notice shall specify the
nature thereof, the period of existence thereof and what
action the Borrower proposes to take with respect thereto, or
(ii) any litigation or governmental or regulatory
proceeding pending against the Borrower which is likely to
have a Material Adverse Effect.
(H) ERISA. Promptly, and in any event within 10 days after the
Borrower or any ERISA Affiliate knows of the occurrence of any of the
following, the Borrower will deliver to each of the Lenders a
certificate on behalf of the Borrower of an Authorized Officer of the
Borrower setting forth the full details as to such occurrence and the
action, if any, that the Borrower or such ERISA Affiliate is required
or proposes to take, together with any notices required or proposed to
be given to or filed with or by the Borrower, the ERISA Affiliate, the
PBGC, a Plan participant or the Plan administrator with respect
thereto:
(i) that a Reportable Event has occurred with respect
to any Plan;
(ii) the institution of any steps by the Borrower,
any ERISA Affiliate, the PBGC or any other person to terminate
any Plan;
(iii) the institution of any steps by the Borrower or
any ERISA Affiliate to withdraw from any Plan;
(iv) the institution of any steps by the Borrower to
withdraw from any Multiemployer Plan or Multiple Employer
Plan, if such withdrawal could result in withdrawal liability
(as described in Part 1 of Subtitle E of Title IV of ERISA) in
excess of $1,000,000;
(v) a non-exempt "prohibited transaction" within the
meaning of section 406 of ERISA in connection with any Plan;
52
53
(vi) that a Plan has an Unfunded Current Liability
exceeding $1,000,000;
(vii) any material increase in the contingent
liability of the Borrower with respect to any post-retirement
welfare liability; or
(viii) the taking of any action by, or the
threatening of the taking of any action by, the Internal
Revenue Service, the Department of Labor or the PBGC with
respect to any of the foregoing.
(I) ENVIRONMENTAL MATTERS. Promptly upon, and in any event
within 10 Business Days after, an officer of the Borrower obtains
actual knowledge thereof, notice of any of the following environmental
matters which involves any reasonable likelihood (in the Borrower's
reasonable judgment) of resulting in a Material Adverse Effect: (i) any
pending or threatened (in writing) Environmental Claim against the
Borrower or any Real Property owned or operated by the Borrower; (ii)
any condition or occurrence on or arising from any Real Property owned
or operated by the Borrower that (A) results in noncompliance by the
Borrower with any applicable Environmental Law or (B) would reasonably
be expected to form the basis of an Environmental Claim against the
Borrower or any such Real Property; (iii) any condition or occurrence
on any Real Property owned, leased or operated by the Borrower that
could reasonably be expected to cause such Real Property to be subject
to any restrictions on the ownership, occupancy, use or transferability
by the Borrower of such Real Property under any Environmental Law; and
(iv) the taking of any removal or remedial action in response to the
actual or alleged presence of any Hazardous Material on any Real
Property owned, leased or operated by the Borrower as required by any
Environmental Law or any governmental or other administrative agency.
All such notices shall describe in reasonable detail the nature of the
Environmental Claim and the Borrower's response thereto.
(J) OTHER INFORMATION. With reasonable promptness, such other
information or documents (financial or otherwise) relating to the
Borrower, its business or any of its properties as any Lender may
reasonably request from time to time.
8.2. BOOKS, RECORDS AND INSPECTIONS. The Borrower will (i) keep proper
books of record and account, in which full and correct entries shall be made of
all financial transactions and the assets and business of the Borrower in
accordance with GAAP; and (ii) permit, upon at least two Business Days' notice
to the Chief Financial Officer or any other Authorized Officer of the Borrower,
officers and designated representatives of the Administrative Agent or any of
the Lenders to visit and inspect any of the properties or assets of the Borrower
in whomsoever's possession (but only to the extent the Borrower has the right to
do so to the extent in the possession of another person), to examine the books
of account of the Borrower and to make copies thereof and take extracts
therefrom, and to discuss the affairs, finances and accounts of the Borrower
with, and be advised as to the same by, its officers and independent accountants
and independent actuaries, if any, all at such reasonable times and intervals
and to such reasonable extent as the Administrative Agent or any of the Lenders
may request.
8.3. INSURANCE. (a) The Borrower will (i) maintain insurance coverage
by such insurers and in such forms and amounts and against such risks as are
generally consistent with the insurance coverage maintained by the Borrower at
the date hereof, and (ii) forthwith upon any Lender's written request, furnish
to such Lender such information about such insurance as such Lender may from
time to time reasonably request, which information shall be prepared in form and
detail reasonably satisfactory to such Lender and certified by an Authorized
Officer of the Borrower.
(b) Without limitation of the foregoing, the Borrower will at all times
keep its properties which are subject to the Lien of any Security Document
insured in favor of the Collateral Agent in accordance with the requirements of
the Credit Documents to which the Borrower is a party.
53
54
(c) If the Borrower shall fail to maintain all insurance in accordance
with this section 8.3 or the corresponding provisions of any of the other Credit
Documents, or if the Borrower shall fail to endorse and deliver or deposit any
endorsements or certificates with respect thereto as required by any of the
Credit Documents, the Administrative Agent and/or the Collateral Agent shall
have the right (but shall be under no obligation), upon prior notice to the
Borrower, to procure such insurance and the Borrower agrees to reimburse the
Administrative Agent or the Collateral Agent, as the case may be for all costs
and expenses of procuring such insurance.
8.4. PAYMENT OF TAXES AND CLAIMS. The Borrower will pay and discharge
all taxes, assessments and governmental charges or levies imposed upon it or
upon its income or profits, or upon any properties belonging to it, prior to the
date on which penalties attach thereto, and all lawful claims which, if unpaid,
might become a Lien or charge upon any properties of the Borrower; PROVIDED that
the Borrower shall not be required to pay any such tax, assessment, charge, levy
or claim which is being contested in good faith and by proper proceedings if it
has maintained adequate reserves with respect thereto in accordance with GAAP;
and PROVIDED, FURTHER, that the Borrower will not be considered to be in default
of any of the provisions of this sentence if the Borrower fails to pay any such
amount which, individually or in the aggregate, is immaterial to the Borrower.
8.5. ORGANIZATIONAL EXISTENCE AND FRANCHISES. The Borrower will do, or
cause to be done, all things necessary to preserve and keep in full force and
effect its organizational existence, rights, authority and franchises, PROVIDED
that nothing in this section 8.5 shall be deemed to prohibit (i) any transaction
permitted by section 9.2; or (ii) the loss of any rights, authorities or
franchises if the loss thereof, in the aggregate, could not reasonably be
expected to have a Material Adverse Effect.
8.6. GOOD REPAIR. The Borrower will ensure that its material properties
and equipment used or useful in its business in whomsoever's possession they may
be, are kept in good repair, working order and condition, normal wear and tear
excepted, and that from time to time there are made in such properties and
equipment all needful and proper repairs, renewals, replacements, extensions,
additions, betterments and improvements, thereto, to the extent and in the
manner customary for companies in similar businesses.
8.7. COMPLIANCE WITH STATUTES, ETC. The Borrower will comply, in all
material respects, with all applicable statutes, regulations and orders of, and
all applicable restrictions imposed by, all governmental bodies, domestic or
foreign, in respect of the conduct of its business and the ownership of its
property, other than those (i) being contested in good faith by appropriate
proceedings, as to which adequate reserves are established to the extent
required under GAAP, and (ii) the noncompliance with which would not have, and
which would not be reasonably expected to have, a Material Adverse Effect. The
Borrower will provide a Certificate of Occupancy with respect to the Project
located in Highlands Ranch, Colorado on or before November 15, 1999 and with
respect to the Project located in Xxxxxxxx, New Jersey on or before the
expiration of the temporary certificate of occupancy related thereto, as same
may be extended.
8.8. COMPLIANCE WITH ENVIRONMENTAL LAWS. Without limitation of the
covenants contained in section 8.7 hereof:
(a) The Borrower will (i) comply, in all material respects,
with all Environmental Laws applicable to the ownership, lease or use
of all Real Property now or hereafter owned, leased or operated by the
Borrower, and promptly pay or cause to be paid all costs and expenses
incurred in connection with such compliance, except for such
noncompliance as would not have, and which would not be reasonably
expected to have, a Material Adverse Effect; and (ii) keep or cause to
be kept all such Real Property free and clear of any Liens imposed
pursuant to such Environmental Laws which are not permitted under
section 9.3.
54
55
(b) Without limitation of the foregoing, if the Borrower shall
generate, use, treat, store, release or dispose of, or permit the
generation, use, treatment, storage, release or disposal of, Hazardous
Materials on any Real Property now or hereafter owned, leased or
operated by the Borrower, or transport or permit the transportation of
Hazardous Materials to or from any such Real Property, any such action
shall be effected only in the ordinary course of business and in any
event in compliance, in all material respects, with all Environmental
Laws applicable thereto, except for such noncompliance as would not
have, and which would not be reasonably expected to have, a Material
Adverse Effect.
(c) If required to do so under any applicable order of any
governmental agency, the Borrower will undertake any clean up, removal,
remedial or other action necessary to remove and clean up any Hazardous
Materials from any Real Property owned, leased or operated by the
Borrower in accordance with, in all material respects, the requirements
of all applicable Environmental Laws and in accordance with, in all
material respects, such orders of all governmental authorities, except
(i) to the extent that the Borrower is contesting such order in good
faith and by appropriate proceedings and for which adequate reserves
have been established to the extent required by GAAP, or (ii) for such
noncompliance as would not have, and which would not be reasonably
expected to have, a Material Adverse Effect.
(d) At the written request of the Administrative Agent or the
Required Lenders, which request shall specify in reasonable detail the
basis therefor, at any time and from time to time after (x) the Lenders
receive notice under section 8.1(i) for any Environmental Claim
involving potential expenditures by the Borrower in excess of $50,000
in the aggregate for any Real Property, or (y) the Administrative Agent
or the Required Lenders otherwise become aware of any circumstances
under which the Borrower may become liable for remedial or similar
expenditures potentially required to be made by the Borrower in order
for any Real Property to be brought into compliance with Environmental
Laws or to satisfy an Environmental Claim with respect to such Real
Property, the Borrower will provide, at its sole cost and expense, an
environmental site assessment report concerning any such Real Property
now or hereafter owned, leased or operated by the Borrower, prepared by
an environmental consulting firm reasonably acceptable to the
Administrative Agent, indicating the presence or absence of Hazardous
Materials and the potential cost of any removal or a remedial action in
connection with any Hazardous Materials on such Real Property. If the
Borrower fails to provide the same within 90 days after such request
was made, the Administrative Agent may order the same, and the Borrower
shall grant and hereby grants, to the Administrative Agent and the
Lenders and their agents, access to such Real Property and specifically
grants the Administrative Agent and the Lenders an irrevocable
non-exclusive license, subject to the rights of tenants, to undertake
such an assessment, all at the Borrower's expense.
8.9. PROJECT MANAGEMENT. The Borrower will at all times cause each
Project being financed hereunder to be managed by the applicable Manager
pursuant to the Management Contract and Project Lease, if applicable, in effect
for such Project at the time of the initial Borrowing hereunder for such
Project, as contemplated by section 6.2(c). So long as a Project is being
financed hereunder, the Borrower will comply with all of its obligations under
the Development Contract and the Management Contract and Project Lease, if
applicable, for such Project, and will maintain the same in full force and
effect, without any amendment, waiver or other modification of any of the terms
or provisions thereof which has not been approved in writing by the Required
Lenders.
8.10. CASUALTY AND CONDEMNATION. (a) The Borrower will promptly (and in
any event within 30 days) furnish to the Administrative Agent and the Lenders
written notice of any material damage to or loss of any material portion of any
Project occasioned by fire, rain, flood, storm, earthquake or other casualty or
loss of any nature, whether insured or uninsured, and of the commencement of any
action or other proceeding for the taking of any material portion of or interest
in any Project under power of eminent domain or by condemnation or similar
proceeding.
55
56
(b) If an event described in paragraph (a) above results in an Event of
Loss with respect to a Project, the Borrower will prepay its Loans for such
Project as provided in section 5.2(d), and for such purpose the Borrower may use
the Net Proceeds from the Event of Loss.
(c) If an event described in paragraph (a) above does not constitute an
Event of Loss with respect to a Project, the Borrower will promptly and
diligently, at its expense, commence and carry to completion the repair and
restoration of the damage to the applicable Project, and the replacement of any
portion of the Project which is not susceptible of repair or restoration; and if
such event results in Net Proceeds (whether in the form of insurance proceeds, a
condemnation award or otherwise), the Collateral Agent is authorized to collect
such Net Proceeds and, if received by any Credit Party, the Borrower will, or
will cause any applicable Credit Party, to pay over such Net Proceeds to the
Collateral Agent; PROVIDED that (i) if the aggregate Net Proceeds in respect of
such event (other than proceeds in respect of business interruption insurance)
are less than $250,000, such Net Proceeds shall be paid over to or retained by
the applicable Credit Party unless a Default under section 10.1(a) or Event of
Default has occurred and is continuing, and shall be applied by it to the cost
of repair or restoration of the Project, and (ii) all proceeds of business
interruption insurance shall be paid over to or retained by the applicable
Credit Party unless a Default under section 10.1(a) or Event of Default has
occurred and is continuing.
(d) All such Net Proceeds retained by or paid over to the Collateral
Agent pursuant to section 8.10(c) shall be held by the Collateral Agent in an
interest bearing account as part of the Collateral and, if no Default under
section 10.1(a) or Event of Default shall have occurred and be continuing, shall
be released by the Collateral Agent from time to time to or at the direction of
the Borrower to pay the costs of repairing, restoring or replacing the affected
property in accordance with the original construction requirements or any other
applicable terms of the applicable Security Documents. No Net Proceeds shall be
released by the Collateral Agent unless the Borrower has evidenced, to the
satisfaction of the Collateral Agent, that such Net Proceeds are sufficient to
complete such repair, restoration or replacement, or the Borrower has evidenced,
to the satisfaction of the Collateral Agent, payment of any shortfall pursuant
to capital contributions by its members.
(e) If the Collateral Agent determines at any time that any Net
Proceeds retained by or paid over to the Collateral Agent pursuant to section
8.10(c) as provided above (x) remain after the application thereof to the
repair, restoration or replacement of the affected property, or (y) may not,
because a Default under section 10.1(a) or Event of Default has occurred and is
continuing, be applied to the repair or restoration or replacement of any
property, then such Net Proceeds shall be promptly applied to prepay Loans
related to the applicable Project or otherwise to satisfy Obligations of the
Borrower, in accordance with the provisions of this Agreement, and if any such
Net Proceeds remain after such application, the Collateral Agent shall pay such
remaining amount to or as directed by the Borrower, or to whomsoever else shall
be lawfully entitled thereto.
8.11. HEDGE AGREEMENTS, ETC. (a) If the Borrower proposes to enter into
any Hedge Agreement, the Borrower will do so (i) only in order to provide
protection to the Borrower from fluctuations and other changes in interest
rates, as and to the extent considered reasonably necessary by the Borrower, but
without exposing the Borrower to predominantly speculative risks unrelated to
the amount of assets, Indebtedness or other liabilities intended to be subject
to coverage on a notional basis under all such Hedge Agreement; and (ii) only if
prior to the Borrower entering into any such Hedge Agreement, the Borrower
notifies the Administrative Agent thereof in writing, specifying the material
terms of such transaction.
(b) Without limitation of the foregoing, the Borrower will obtain
within 30 days following the initial Borrowing for a Project hereunder, and
thereafter maintain in effect for a period ending not earlier than the projected
expiration date of the applicable Mini-Perm Period for such Project, one or more
Hedge Agreements, in form and substance satisfactory to the Administrative Agent
and the Required Lenders, with an aggregate notional amount at least equal to
100% of the Reserved Portion of the Total Commitment attributable to such
Project, protecting the Borrower against changes in floating interest rates
hereunder as compared to United States Treasury interest rates or yields, as can
be obtained at reasonable cost in light of prevailing market conditions.
56
57
8.12. CERTAIN LEASES AFFECTING A PROJECT. In the event that the
Borrower (or a Manager) proposes to enter into any lease agreement, other than a
Project Lease, affecting any Project (x) under which more than 5,000 square feet
of the Premises of a Project may be leased to any other person, or (y) which
involves annual rental greater than $50,000, it may do so only if (i) such lease
agreement shall provide that it is subordinated to the Lien of the Mortgage
covering such Premises in a manner satisfactory to the Collateral Agent, or the
Collateral Agent shall have entered into a subordination, non-disturbance and
attornment agreement, reasonably satisfactory in form and substance to the
Collateral Agent, with the tenant under any such lease agreement (it being
understood that for the convenience of the Borrower, the Administrative Agent
will promptly upon request provide a form of such subordination, non-disturbance
agreement which will be acceptable to the Collateral Agent), and (ii) such lease
agreement otherwise complies with all applicable requirements of section 6 of
the Mortgage covering such Project.
8.13. SENIOR DEBT. The Borrower will at all times ensure that (a) the
claims of the Lenders in respect of the Obligations of the Borrower will not be
subordinate to, and will in all respects rank prior to the claims of every
unsecured creditor of the Borrower, and (b) any Indebtedness of the Borrower
which is subordinated in any manner to the claims of any other creditor of the
Borrower will be subordinated in like manner to such claims of the Lenders.
8.14. LICENSES. The Borrower shall do or cause to be done all things
necessary to obtain, preserve and keep in full force and effect all licenses,
certificates of need, certificate of need waivers and other licenses,
authorizations and certificates necessary under any Legal Requirement to operate
each Project as an assisted living facility (the "LICENSES"). Upon request, the
Borrower shall provide to the Administrative Agent copies of all Licenses. The
Borrower shall provide to the Administrative Agent notice of any actual or
threatened revocation, suspension, probation, restriction, limitation,
forfeiture or refusal to renew any License. Additionally, the Borrower will
furnish to the Administrative Agent copies of all Deficiency Notices and agency
inspection reports, audits, surveys, investigations, reviews or evaluations
describing matters which would have a Material Adverse Effect. "DEFICIENCY
NOTICES" shall refer to all notices from Governmental Authorities which license,
regulate, certify, accredit or evaluate the Borrower, the Manager, the Project
or the operation of the Project alleging that the Borrower, the Manager, the
Project or the operation of the Project fails to comply with any or all
conditions of licensing, regulation or accreditation of the Project. The
Borrower shall promptly and diligently pursue the correction of the subject of
the Deficiency Notice prior to the expiration of any period allowed by the
Governmental Authority for correction. The Borrower shall, at the Administrative
Agent's request, promptly provide from time to time, such cost estimates,
reports and other information as the Administrative Agent may require to
demonstrate to the Administrative Agent's satisfaction that the Borrower and/or
the Manager have the financial and other ability to effect the correction and
are taking the actions required by this section.
SECTION 9. NEGATIVE COVENANTS.
The Borrower hereby covenants and agrees that on the Effective Date and
thereafter for so long as this Agreement is in effect and until such time as the
Total Commitment has been terminated, no Notes remain outstanding and the Loans,
together with interest, Fees and all other Obligations incurred hereunder are
paid in full:
9.1. SINGLE PURPOSE ENTITY, ETC. The Borrower will not directly or
indirectly engage in any business or business activity which is not directly
related to the acquisition, ownership, development, construction and operation
of the Projects. Without limitation of the foregoing, the Borrower will not (1)
lend money or credit or make advances to any person, (2) purchase or acquire any
stock, obligations or securities of, or any other interest in, or make any
capital contribution to, or other investment in, any person, (3) create, acquire
or hold any Subsidiary, (4) be or become a party to any joint venture or
partnership, or (5) be or become obligated under any Guaranty Obligations,
EXCEPT that the Borrower may invest in cash and Cash Equivalents.
57
58
9.2. CONSOLIDATION, MERGER, ACQUISITION OR SALE OF ASSETS, ETC. The
Borrower will not, directly or indirectly, (1) wind up, liquidate or dissolve
its affairs, (2) enter into any transaction of merger or consolidation, (3) make
or otherwise effect any Acquisition (other than the Acquisition of the 19
Projects pursuant to the Company Organizational Documents), (4) sell or
otherwise dispose of any Project, (5) sell or otherwise dispose of any of its
other properties or assets (including those comprising a portion of any
Project), other than dispositions of excess, surplus or worn out furniture,
furnishings and equipment in the ordinary course of business, or (6) agree to do
any of the foregoing at any future time, EXCEPT that, if no Default under
section 10.1(a) or Event of Default shall have occurred and be continuing, or
would result therefrom,
(a) the Borrower may sell any Project which has not been
financed hereunder for fair value (as determined by the Borrower) if
the entire sales price thereof is payable at closing in cash;
(b) the Borrower may transfer any Project which has not been
financed hereunder, with or without consideration, to any persons or
persons in a transaction which represents a capital distribution to its
members;
(c) the Borrower may sell any Project which is being financed
hereunder for fair value (as determined by the Borrower) if the Net
Proceeds from such transaction are at least sufficient to, and are
immediately upon receipt applied to, the prepayment in full of all of
the Loans related to such Project; and
(d) in connection with the permanent refinance of a Project,
upon the prepayment in full of all of the Loans related to such
Project, the Borrower may transfer such Project which is being financed
hereunder to an Affiliate of the Borrower;
FURTHER EXCEPT that, if an Event of Default shall have occurred and be
continuing, and such Event of Default relates to a single Project, then the
Borrower shall have the one-time right, upon the prepayment in full of all of
the Loans related to such Project, to transfer such Project, with or without
consideration, to any persons or persons in a transaction which represents a
capital distribution to its members or otherwise, without the prior written
consent of the Lenders, provided, however that this right shall only be
exercisable once (for all Projects hereunder, not for each Project) without the
prior written consent of the Lenders.
9.3. LIENS. The Borrower will not create, incur, assume or suffer to
exist any Lien upon or with respect to any of its property or assets of any kind
(real or personal, tangible or intangible), whether now owned or hereafter
acquired, or sell any such property or assets subject to an understanding or
agreement, contingent or otherwise, to repurchase such property or assets
(including sales of accounts receivable or notes with or without recourse to the
Borrower, other than for purposes of collection of delinquent accounts in the
ordinary course of business) or assign any right to receive income, or file or
permit the filing of any financing statement under the UCC or any other similar
notice of Lien under any similar recording or notice statute, EXCEPT that the
Standard Permitted Liens shall be permitted.
9.4. INDEBTEDNESS. The Borrower will not create, incur, assume or
suffer to exist any Indebtedness of the Borrower, EXCEPT:
(a) Indebtedness incurred under this Agreement and the other
Credit Documents;
(b) in the case of any Project, any Indebtedness permitted
under section 16(c) of the Mortgage related thereto;
(c) Indebtedness of the Borrower under Hedge Agreements
entered into in the ordinary course of business or in accordance with
the requirements of this Agreement; and
58
59
(d) Indebtedness of the Borrower to the Guarantor permitted
pursuant to the terms of the Intercreditor Agreement.
9.5. DISTRIBUTIONS BY BORROWER. (a) The Borrower will not directly or
indirectly purchase or otherwise acquire any of its equity interests.
(b) The Borrower will not declare, pay or make any dividend or
distribution (whether in cash or property) to its members in respect of their
interests in the income or capital of the Borrower, EXCEPT the following:
(i) if no Default under section 10.1(a) or Event of Default
shall have occurred and be continuing, or would result therefrom, the
Borrower may transfer any Project which has not been financed hereunder
to any person or persons as a distribution to its members;
(ii) if no Default under section 10.1(a) or Event of Default
shall have occurred and be continuing, or would result therefrom, the
Borrower may declare and pay cash distributions to its members from
time to time in amounts determined by the Borrower to be sufficient to
pay income tax liabilities, calculated at the highest marginal rates,
of its members in respect of their shares of the taxable income of the
Borrower; and
(iii) after a Project being financed hereunder shall have
achieved Stabilization, the Borrower may, in addition to amounts
permitted under the preceding clauses (i) and (ii), declare and pay
cash distributions to its members with respect to (and not later than
60 days following the end of) any quarterly period for such Project
which both commences and ends after Stabilization has been achieved, if
at the time of any such declaration and payment, and after giving
effect thereto, (A) no Default under section 10.1(a) or Event of
Default shall have occurred and be continuing, or would result
therefrom, (B) the DSCR for such Project for its most recent two
consecutive-fiscal quarters preceding the date of payment is at least
1.35 to 1.00, (C) actual occupancy of such Project has been at least
80% for a period of at least the two most recent consecutive fiscal
quarters preceding the date of payment, and (D) the amount so declared
and paid pursuant to this clause (iii) does not exceed 20% of the cash
flow (i.e., net income plus depreciation and amortization) for such
Project for the most recently completed applicable quarterly period.
9.6. DSCR OF PROJECTS. The Borrower will not permit with respect to any
of its Projects being financed hereunder, the DSCR for such Project for any
period to be less than the ratio specified below for such period:
MINI-PERM PERIOD MINIMUM DSCR
Q5 and Q6 of the Mini-Perm Period 1.00 to 1.00
Q7 and Q8 of the Mini-Perm Period 1.20 to 1.00
Q9 of the Mini-Perm Period 1.35 to 1.00
Q9 and Q10 of the Mini-Perm 1.35 to 1.00
Period
Q9, Q10 and Q11 of the Mini-Perm 1.35 to 1.00
Period
59
60
MINI-PERM PERIOD Minimum DSCR
Q9, Q10, Q11 and Q12 of the Mini- 1.35 to 1.00
Perm Period
9.7. MODIFICATIONS OF ORGANIZATIONAL OR CAPITALIZATION DOCUMENTS, ETC.
The Borrower will not (i) terminate or reduce, or release any investor from, any
investment or other material commitment under any of the Company Capitalization
Documents, or (ii) amend or otherwise modify, or obtain any consent or waiver
relating to, any of the Company Organizational Documents or the Company
Capitalization Documents, which either (x) will result in an Event of Default,
or (y) will be materially adverse to the interests of the Lenders as creditors
of the Borrower.
9.8. TRANSACTIONS WITH AFFILIATES. The Borrower will not enter into any
transaction or series of transactions with any Affiliate other than in the
ordinary course of business of and pursuant to the reasonable requirements of
the Borrower's business and upon fair and reasonable terms no less favorable to
the Borrower than would obtain in a comparable arm's-length transaction with a
person other than an Affiliate, EXCEPT the transactions effected as contemplated
by the Company Organizational Documents, the Company Capitalization Documents,
the Management Contracts and the Project Leases.
9.9. ERISA. The Borrower will not at any time engage in any transaction
which would cause any obligation or action taken or to be taken under any of the
Credit Documents (or the exercise by the Administrative Agent, the Collateral
Agent or any Lender of any rights under any of the Credit Documents) to be
nonexempt (under a statutory or administrative class exemption) prohibited
transaction under ERISA.
SECTION 10. EVENTS OF DEFAULT.
10.1. EVENTS OF DEFAULT. Any of the following specified events (each an
"EVENT OF DEFAULT") shall constitute an Event of Default:
(A) PAYMENTS: the Borrower shall (i) default in the payment
when due of the principal of any of the Loans (whether at maturity, on
a required prepayment or otherwise, but not including, during the
Mini-Perm Period, a monthly installment of principal and interest);
(ii) default, and such default shall continue for five or more days, in
the payment when due of any installment of principal of any of the
Loans during the Mini-Perm Period; or (iii) default, and such default
shall continue for five or more days, in the payment when due of any
interest on the Loans or any Fees or any other amounts owing hereunder
or under any other Credit Document; or
(B) REPRESENTATIONS, ETC.: any representation, warranty or
statement made by the Borrower or any other Credit Party herein or in
any other Credit Document or in any statement or certificate delivered
or required to be delivered pursuant hereto or thereto shall prove to
be untrue in any material respect on the date as of which made or
deemed made; or
(C) CERTAIN NEGATIVE COVENANTS: the Borrower shall default in
the due performance or observance by it of any term, covenant or
agreement contained in sections 9.1 through 9.8, inclusive, of this
Agreement; or the Borrower shall default in the due performance or
observance by it of any term, covenant or agreement contained in
section 5, 10, 16(a)(i) or 16(c) of any Mortgage; or the Guarantor
shall default in the due performance of any term, covenant or agreement
contained in section 13(a), 13(b), 13(c), 13(d) or 13(e) of the Alterra
Guaranty; or
60
61
(D) OTHER COVENANTS: the Borrower or any other Credit Party
shall default in the due performance or observance by it of any term,
covenant or agreement contained in this Agreement or any other Credit
Document, other than those referred to in section 10.1(a) or (b) or (c)
above, and such default shall not be remedied within 30 days after the
earlier of (i) an officer of the Borrower or any other applicable
Credit Party obtaining actual knowledge of such default or (ii) the
Borrower receiving written notice of such default from the
Administrative Agent or the Required Lenders (any such notice to be
identified as a "notice of default " and to refer specifically to this
section 10.1(d)); PROVIDED, that in the case of any default referred to
in this section 10.1(d) not involving a monetary obligation, the 30-day
period referred to above may be extended by written notice from the
Borrower to the Administrative Agent delivered not later than 10 days
following the giving of any notice referred to in the preceding clause
(ii), for an additional period of up to 60 days, if (x) such notice
from the Borrower includes a certification that unavoidable delays or
other circumstances are such that such default cannot be remedied
within such 30-day period, but that such default can be remedied within
the time period specified for such extension, and (y) throughout the
period of such requested extension the Borrower and/or an applicable
Credit Party are diligently and continuously taking all reasonable
actions to remedy such default (it being understood that if the
Borrower or any other applicable Credit Party shall cease or abandon
such efforts to remedy the default, such extension period shall
immediately and automatically terminate); or
(E) CROSS DEFAULT: the Borrower, or the Guarantor or any of
its Subsidiaries, shall (i) in the case of the Borrower, default in any
payment with respect to any Indebtedness, other than the Obligations
and any amounts owed by the Borrower to the Guarantor, and such default
shall continue after the applicable grace period, if any, specified in
the agreement or instrument relating to such Indebtedness, or (ii) in
the case of the Guarantor or any of its Subsidiaries, default in any
payment with respect to any Indebtedness owed to any Lender, or any
other Indebtedness of $10,000,000 or greater, individually or in the
aggregate, in each case other than the Obligations, and such default
shall continue after the applicable grace period, if any, specified in
the agreement or instrument relating to such Indebtedness and such
default shall not have been cured or remedied, or the existence thereof
otherwise eliminated by written amendment or waiver by the holder or
holders of such Indebtedness (or a trustee or agent on behalf of such
holder or holders) prior to the acceleration of any of the Loans or
other Obligations pursuant to section 10.2 hereof, or (iii) default in
the observance or performance of any agreement or condition relating to
any such Indebtedness described in clause (i) or (ii) above or
contained in any instrument or agreement evidencing, securing or
relating thereto (and all grace periods applicable to such observance,
performance or condition shall have expired), or any other event shall
occur or condition exist, the effect of which default or other event or
condition is to cause, or to permit the holder or holders of such
Indebtedness (or a trustee or agent on behalf of such holder or
holders) to cause any such Indebtedness to become due prior to its
stated maturity; or any such Indebtedness of the Borrower or of the
Guarantor or any of its Subsidiaries shall be declared to be due and
payable, or shall be required to be prepaid (other than by a regularly
scheduled required prepayment or redemption, prior to the stated
maturity thereof); or
(F) CERTAIN CREDIT DOCUMENTS INEFFECTIVE, ETC.: any Security
Document (once executed and delivered) shall cease for any reason
(other than termination in accordance with its terms) to be in full
force and effect; or any Credit Party shall (or seek to) disaffirm or
otherwise limit its obligations under any Credit Document otherwise
than in strict compliance with the terms thereof; or
(G) JUDGMENTS: one or more judgments or decrees shall be
entered against the Borrower or against the Guarantor and/or any of its
Subsidiaries involving a liability (other than a liability covered by
insurance, as to which the carrier has adequate claims paying ability
and has not reserved its rights or denied the claim) of (x) $1,000,000
or more in the aggregate for all such judgments and decrees for the
Borrower, or (y) $20,000,000 or more in the aggregate for all such
judgments and decrees for the
61
62
Guarantor and its Subsidiaries, and any such judgments or decrees shall
not have been vacated, discharged or stayed or bonded pending appeal
within 30 days from the entry thereof; or
(H) BANKRUPTCY, ETC.: any of the following shall occur:
(i) the Borrower, the Guarantor or any of its
Material Subsidiaries, or any other Credit Party (the Borrower
and each of such other persons, each a "PRINCIPAL PARTY")
shall commence a voluntary case concerning itself under Title
11 of the United States Code entitled "Bankruptcy," as now or
hereafter in effect, or any successor thereto (the "BANKRUPTCY
CODE"); or
(ii) an involuntary case is commenced against any
Principal Party and the petition is not controverted within 10
days, or is not dismissed within 60 days, after commencement
of the case; or
(iii) a custodian (as defined in the Bankruptcy Code)
is appointed for, or takes charge of, all or substantially all
of the property of any Principal Party; or
(iv) any Principal Party commences (including by way
of applying for or consenting to the appointment of, or the
taking of possession by, a rehabilitator, receiver, custodian,
trustee, conservator or liquidator (collectively, a
"CONSERVATOR") of itself or all or any substantial portion of
its property) any other proceeding under any reorganization,
arrangement, adjustment of debt, relief of debtors,
dissolution, insolvency, liquidation, rehabilitation,
conservatorship or similar law of any jurisdiction whether now
or hereafter in effect relating to such Principal Party; or
(v) any such proceeding is commenced against any
Principal Party to the extent such proceeding is consented by
such person or remains undismissed for a period of 60 days; or
(vi) any Principal Party is adjudicated insolvent or
bankrupt; or
(vii) any order of relief or other order approving
any such case or proceeding is entered; or
(viii) any Principal Party suffers any appointment of
any conservator or the like for it or any substantial part of
its property which continues undischarged or unstayed for a
period of 60 days; or
(ix) any Principal Party makes a general assignment
for the benefit of creditors; or
(x) any corporate (or similar organizational) action
is taken by any Principal Party for the purpose of effecting
any of the foregoing; or
(I) ERISA: (i) any of the events described in clauses (i)
through (viii) of section 8.1(h) shall have occurred; or (ii) there
shall result from any such event or events the imposition of a lien,
the granting of a security interest, or a liability or a material risk
of incurring a liability; and (iii) any such event or events or any
such lien, security interest or liability, individually, and/or in the
aggregate, in the opinion of the Required Lenders, has had, or could
reasonably be expected to have, a Material Adverse Effect; or
62
63
(J) MATERIAL ADVERSE EFFECT: any event or circumstance shall
occur or exist which has a Material Adverse Effect upon the Borrower or
the Guarantor, as compared to the business, operations, property,
assets, liabilities or condition (financial or otherwise) of the
Borrower as reflected in the financial statements referred to in
section 7.8, or the business, operations, property, assets, liabilities
or condition (financial or otherwise) of the Guarantor and its
Subsidiaries as reflected in the financial statements and the Financial
Projections referred to in section 11(f) and 11(i) of the Alterra
Guaranty, as applicable.
10.2. ACCELERATION, ETC. Upon the occurrence of any Event of Default,
and at any time thereafter, if any Event of Default shall then be continuing,
the Administrative Agent shall, upon the written request of the Required Lenders
and only upon such request, by written notice to the Borrower, take any or all
of the following actions, without prejudice to the rights of the Administrative
Agent or any Lender to enforce its claims against the Borrower or any other
Credit Party (PROVIDED that, if an Event of Default specified in section 10.1(h)
shall occur with respect to the Borrower or the Guarantor, the result which
would occur upon the giving of written notice by the Administrative Agent as
specified in clauses (i) and (ii) below shall occur automatically without the
giving of any such notice):
(i) declare the Total Commitment terminated, whereupon the
Commitment of each Lender shall forthwith terminate immediately without
any other notice of any kind;
(ii) declare the principal of and any accrued interest in
respect of any or all Loans and any or all other obligations owing
hereunder and under the other Credit Documents to be, whereupon the
same shall become, forthwith due and payable without presentment,
demand, protest or other notice of any kind, all of which are hereby
waived by the Borrower and have been waived by the Borrower in its
Notes; and
(iii) exercise any other rights or remedies provided for in
any of the Credit Documents or otherwise permitted under applicable
law.
10.3. APPLICATION OF LIQUIDATION PROCEEDS. All monies received by the
Administrative Agent or any Lender from the exercise of remedies hereunder or
under the other Credit Documents or under any other documents relating to this
Agreement, including without limitation any liquidation, sale or other
realization upon any of the Collateral, shall, unless otherwise required by the
terms of the other Credit Documents or by applicable law, be applied as follows:
(I) FIRST, to the payment of all expenses (to the extent not
paid by the Borrower or any other Credit Party) incurred by the
Administrative Agent and the Lenders in connection with the exercise of
such remedies, including, without limitation, all reasonable costs and
expenses of collection, attorneys' fees, court costs and any
foreclosure expenses; (provided, however, a Lender shall not be
reimbursed for duplicative costs and expenses incurred without
coordinating with the Administrative Agent);
(II) SECOND, to the payment PRO RATA of interest then accrued
on the outstanding Loans;
(III) THIRD, to the payment PRO RATA of (A) the principal
balance then owing on the outstanding Loans, and (B) the amounts then
due under Designated Hedge Agreements to counterparty creditors of the
Borrower, SUBJECT to confirmation by the Administrative Agent of any
calculations of termination or other payment amounts due under the
Designated Hedge Agreements being made in accordance with normal
industry practice;
(IV) FOURTH, to the payment PRO RATA of all other amounts owed
by the Borrower and the other Credit Parties to (A) the Administrative
Agent and the Lenders under this Agreement and the other
63
64
Credit Documents, and (B) counterparty creditors of the Borrower under
Designated Hedge Agreements; and
(V) FINALLY, any remaining surplus after all of the
Obligations have been paid in full, to the Borrower or to whomsoever
shall be lawfully entitled thereto.
In applying such amounts to the principal amount of the Loans, accrued interest
thereon and other Obligations, the Administrative Agent may require that amounts
representing recoveries in respect of a particular Project be first applied, in
the order of priority specified above, to the Obligations in respect of such
Project, before any remaining portion of such amounts are applied to Obligations
in respect of other Projects.
SECTION 11. THE ADMINISTRATIVE AGENT.
11.1. APPOINTMENT. Each Lender hereby irrevocably designates and
appoints KCCI as Administrative Agent (such term to include, for the purposes of
this section 11, KCCI acting as Collateral Agent) to act as specified herein and
in the other Credit Documents, and each such Lender hereby irrevocably
authorizes KCCI as the Administrative Agent for such Lender, to take such action
on its behalf under the provisions of this Agreement and the other Credit
Documents and to exercise such powers and perform such duties as are expressly
delegated to the Administrative Agent by the terms of this Agreement and the
other Credit Documents, together with such other powers as are reasonably
incidental thereto. The Administrative Agent agrees to act as such upon the
express conditions contained in this section 11. Notwithstanding any provision
to the contrary elsewhere in this Agreement, the Administrative Agent shall not
have any duties or responsibilities, except those expressly set forth herein or
in the other Credit Documents, nor any fiduciary relationship with any Lender,
and no implied covenants, functions, responsibilities, duties, obligations or
liabilities shall be read into this Agreement or otherwise exist against the
Administrative Agent. The provisions of this section 11 are solely for the
benefit of the Administrative Agent, and the Lenders, and the Borrower and any
other Credit Parties shall not have any rights as a third party beneficiary of
any of the provisions hereof. In performing its functions and duties under this
Agreement, the Administrative Agent shall act solely as agent of the Lenders and
does not assume and shall not be deemed to have assumed any obligation or
relationship of agency or trust with or for the Borrower or any other Credit
Parties.
11.2. DELEGATION OF DUTIES. The Administrative Agent may execute any of
its duties under this Agreement or any other Credit Document by or through
agents or attorneys-in-fact and shall be entitled to advice of counsel
concerning all matters pertaining to such duties. The Administrative Agent shall
not be responsible for the negligence or misconduct of any agents or
attorneys-in-fact selected by it with reasonable care except to the extent
otherwise required by section 11.3.
11.3. EXCULPATORY PROVISIONS. Neither the Administrative Agent nor any
of its respective officers, directors, employees, agents, attorneys-in-fact or
affiliates shall be (i) liable for any action lawfully taken or omitted to be
taken by it or such person under or in connection with this Agreement (except
for its or such person's own gross negligence or willful misconduct) or (ii)
responsible in any manner to any of the Lenders for any recitals, statements,
representations or warranties made by the Borrower or any other Credit Parties
or any of their respective officers contained in this Agreement, any other
Credit Document or in any certificate, report, statement or other document
referred to or provided for in, or received by the Administrative Agent under or
in connection with, this Agreement or any other Credit Document or for any
failure of the Borrower or any other Credit Party or any of their respective
officers to perform its obligations hereunder or thereunder. The Administrative
Agent shall not be under any obligation to any Lender to ascertain or to inquire
as to the observance or performance of any of the agreements contained in, or
conditions of, this Agreement, or to inspect the properties, books or records of
the Borrower or any other Credit Party. The Administrative Agent shall not be
responsible to any Lender for the effectiveness, genuineness, validity,
enforceability, collectibility or sufficiency of this Agreement or any Credit
Document or for any representations, warranties, recitals or
64
65
statements made herein or therein or made in any written or oral statement or in
any financial or other statements, instruments, reports, certificates or any
other documents in connection herewith or therewith furnished or made by the
Administrative Agent to the Lenders or by or on behalf of the Borrower or any
other Credit Party to the Administrative Agent or any Lender or be required to
ascertain or inquire as to the performance or observance of any of the terms,
conditions, provisions, covenants or agreements contained herein or therein or
as to the use of the proceeds of the Loans or of the existence or possible
existence of any Default or Event of Default.
11.4. RELIANCE BY ADMINISTRATIVE AGENT. The Administrative Agent shall
be entitled to rely, and shall be fully protected in relying, upon any note,
writing, resolution, notice, consent, certificate, affidavit, letter, cablegram,
telegram, facsimile transmission, telex or teletype message, statement, order or
other document or conversation believed by it, in good faith, to be genuine and
correct and to have been signed, sent or made by the proper person or persons
and upon advice and statements of legal counsel (including, without limitation,
counsel to the Borrower or any of its Affiliates), independent accountants and
other experts selected by the Administrative Agent. The Administrative Agent
shall be fully justified in failing or refusing to take any action under this
Agreement or any other Credit Document unless it shall first receive such advice
or concurrence of the Required Lenders as it deems appropriate or it shall first
be indemnified to its satisfaction by the Lenders against any and all liability
and expense which may be incurred by it by reason of taking or continuing to
take any such action. The Administrative Agent shall in all cases be fully
protected in acting, or in refraining from acting, under this Agreement and the
other Credit Documents in accordance with a request of the Required Lenders (or
all of the Lenders, as to any matter which, pursuant to section 12.13, can only
be effectuated with the consent of all Lenders), and such request and any action
taken or failure to act pursuant thereto shall be binding upon all the Lenders.
11.5. NOTICE OF DEFAULT. The Administrative Agent shall not be deemed
to have knowledge or notice of the occurrence of any Default or Event of Default
hereunder unless the Administrative Agent has received notice from a Lender or
the Borrower referring to this Agreement, describing such Default or Event of
Default and stating that such notice is a "notice of default". In the event that
the Administrative Agent receives such a notice, the Administrative Agent shall
give prompt notice thereof to the Lenders. The Administrative Agent shall take
such action with respect to such Default or Event of Default as shall be
reasonably directed by the Required Lenders, PROVIDED that unless and until the
Administrative Agent shall have received such directions, the Administrative
Agent may (but shall not be obligated to) take such action, or refrain from
taking such action, with respect to such Default or Event of Default as it shall
deem advisable in the best interests of the Lenders.
11.6. NON-RELIANCE. Each Lender expressly acknowledges that neither the
Administrative Agent nor any of its officers, directors, employees, agents,
attorneys-in-fact or Affiliates have made any representations or warranties to
it and that no act by the Administrative Agent hereinafter taken, including any
review of the affairs of the Borrower or any of the other Credit Parties, shall
be deemed to constitute any representation or warranty by the Administrative
Agent to any Lender. Each Lender represents to the Administrative Agent that it
has, independently and without reliance upon the Administrative Agent, or any
other Lender, and based on such documents and information as it has deemed
appropriate, made its own appraisal of and investigation into the business,
assets, operations, property, financial and other conditions, prospects and
creditworthiness of the Borrower and the other Credit Parties and made its own
decision to make its Loans hereunder and enter into this Agreement. Each Lender
also represents that it will, independently and without reliance upon the
Administrative Agent, or any other Lender, and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit analysis, appraisals and decisions in taking or not taking action under
this Agreement, and to make such investigation as it deems necessary to inform
itself as to the business, assets, operations, property, financial and other
conditions, prospects and creditworthiness of the Borrower and the other Credit
Parties. The Administrative Agent shall not have any duty or responsibility to
provide any Lender with any credit or other information concerning the business,
operations, assets, property, financial and other conditions, prospects or
creditworthiness of the Borrower or any other Credit Party which may come into
the
65
66
possession of the Administrative Agent or any of its officers, directors,
employees, agents, attorneys-in-fact or Affiliates.
11.7. INDEMNIFICATION. The Lenders agree to indemnify the
Administrative Agent in its capacity as such ratably according to their
respective Loans and Unutilized Commitments, from and against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, reasonable expenses or disbursements of any kind whatsoever which may at
any time (including, without limitation, at any time following the payment of
the Obligations) be imposed on, incurred by or asserted against the
Administrative Agent in its capacity as such in any way relating to or arising
out of this Agreement or any other Credit Document, or any documents
contemplated by or referred to herein or the transactions contemplated hereby or
any action taken or omitted to be taken by the Administrative Agent under or in
connection with any of the foregoing, but only to the extent that any of the
foregoing is not paid by the Borrower or any other Credit Party, PROVIDED that
no Lender shall be liable to the Administrative Agent for the payment of any
portion of such liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements to the extent resulting
solely from the Administrative Agent's gross negligence or willful misconduct.
If any indemnity furnished to the Administrative Agent for any purpose shall, in
the opinion of the Administrative Agent, be insufficient or become impaired, the
Administrative Agent may call for additional indemnity and cease, or not
commence, to do the acts indemnified against until such additional indemnity is
furnished. The agreements in this section 11.7 shall survive the payment of all
Obligations.
11.8. THE ADMINISTRATIVE AGENT IN INDIVIDUAL CAPACITY. The
Administrative Agent, the Lenders and their respective Affiliates may make loans
to, accept deposits from and generally engage in any kind of business with the
Borrower and the other Credit Parties and their Affiliates as though not acting
as Administrative Agent or Lender hereunder as the case may be. With respect to
the Loans made by it and all Obligations owing to it, the Administrative Agent
shall have the same rights and powers under this Agreement as any Lender and may
exercise the same as though it were not the Administrative Agent, and the terms
"Lender" and "Lenders" shall include the Administrative Agent in its individual
capacity.
11.9. SUCCESSOR ADMINISTRATIVE AGENT. The Administrative Agent may
resign as the Administrative Agent upon at least 20 days' prior written notice
to the Lenders and the Borrower. The Required Lenders may also remove the
Administrative Agent upon at least 20 days' prior written notice to the
Administrative Agent and the Borrower; provided, however, in case of a removal
due to a material breach of the Administrative Agent's obligations hereunder
that shall not have been cured within thirty (30) days after written notice to
the Administrative Agent and the Borrower by any Lender, the Administrative
Agent shall be deemed to be a Defaulting Lender for purposes of determining the
Required Lenders hereunder. The Required Lenders shall appoint from among the
Lenders a successor Administrative Agent for the Lenders subject to prior
approval by the Borrower (such approval not to be unreasonably withheld or
delayed; provided, however, that no such approval shall be required in the event
that a Default or Event of Default has occurred and is continuing), whereupon
such successor agent shall succeed to the rights, powers and duties of the
Administrative Agent, and the term "Administrative Agent" shall include such
successor agent effective upon its appointment, and the resigning or removed
Administrative Agent's rights, powers and duties as the Administrative Agent
shall be terminated, without any other or further act or deed on the part of
such former Administrative Agent or any of the parties to this Agreement. After
the retiring Administrative Agent's resignation or removal hereunder as the
Administrative Agent, the provisions of this section 11 shall inure to its
benefit as to any actions taken or omitted to be taken by it while it was
Administrative Agent under this Agreement. Any successor Administrative Agent
appointed as herein contemplated shall at the time it becomes the Administrative
Agent hereunder hold Commitments and Loans representing at least 12.50% of the
outstanding Commitments and Loans hereunder.
11.10. OTHER AGENTS. Any Lender identified herein as a Co-Agent,
Syndication Agent, Documentation Agent, Managing Agent, Manager or any other
corresponding title, other than "Administrative Agent" or "Collateral Agent",
shall have no right, power, obligation, liability, responsibility or duty under
this Agreement
66
67
or any other Credit Document except those applicable to all Lenders as such.
Each Lender acknowledges that it has not relied, and will not rely, on any
Lender so identified in deciding to enter into this Agreement or in taking or
not taking any action hereunder.
SECTION 12. MISCELLANEOUS.
12.1. PAYMENT OF EXPENSES ETC. (A) EXPENSES OF THE ADMINISTRATIVE AGENT
AND THE COLLATERAL AGENT. The Borrower agrees to pay directly, or reimburse the
Administrative Agent and the Collateral Agent for, all reasonable out-of-pocket
costs and expenses incurred in connection with the negotiation, preparation,
execution and delivery of the Credit Documents and the documents and instruments
referred to herein and therein, and the administration of the credit facilities
provided for herein including, without limitation, (A) the reasonable fees and
disbursements of (x) Xxxxx, Day, Xxxxxx & Xxxxx, special counsel to the
Administrative Agent, and (y) any local counsel retained by the Administrative
Agent or the Collateral Agent in any jurisdiction in which a proposed or actual
Project is located, (B) recording and filing fees, charges and taxes, (C) the
premium for Title Policies and any endorsements thereto, and title examination
and other charges in connection therewith, (D) survey fees, (E) appraisal costs,
(F) escrow fees, (G) the fees and charges of any Inspecting Consultant retained
by the Administrative Agent, (H) the fees and charges of any inspecting engineer
retained by the Administrative Agent, (I) environmental auditing and inspection
fees and charges of any environmental engineering or similar firm retained by
the Administrative Agent, (J) costs and expenses incurred by the Administrative
Agent in connection with any physical inspections of any Project or the site of
any proposed Project, and (K) costs and expenses incurred by the Administrative
Agent in connection with any annual or more frequent meeting with the Borrower's
management to review and discuss the Borrower's financial affairs. The Borrower
specifically authorizes the Administrative Agent to retain an Inspecting
Consultant and incur other costs and expenses referred to above relative to a
specific proposed Project prior to the date such Project becomes a Qualified
Project as contemplated hereby.
(B) BORROWER NOT LIABLE FOR INDIVIDUAL LENDER'S COSTS IN CONNECTION
WITH PREPARATION OF CREDIT DOCUMENTS OR LOAN CLOSINGS. It is specifically
understood and agreed that the Borrower shall have no obligation to pay or
reimburse any individual Lender for any costs or expenses of individual counsel
retained by any Lender, allocated internal legal expenses, or other costs or
expenses, which are incurred by such individual Lender in connection with the
negotiation, preparation, execution and delivery of the Credit Documents and the
documents and instruments referred to herein and therein, the administration of
the credit facilities provided for herein, or the closing of Loans provided for
herein.
(C) COSTS AND EXPENSES OF AMENDMENTS, WAIVERS, WORK-OUTS AND
ENFORCEMENT. Notwithstanding the limitation contained in section 12.1(b), the
Borrower agrees to pay directly, or reimburse the Administrative Agent, the
Collateral Agent and the Lenders for, all reasonable out-of-pocket costs and
expenses (and any allocated costs of internal counsel) incurred in connection
with (i) any actual or proposed amendment, waiver or consent relating to any of
the Credit Documents, (ii) any actual or proposed "work out" arrangements with
respect to the transactions contemplated hereby, and (iii) the enforcement of
any of the Credit Documents. Without limitation of the foregoing, in the event
of the bankruptcy, insolvency, rehabilitation or other similar proceeding in
respect of the Borrower, the Borrower agrees to pay all costs of collection and
defense, including reasonable attorneys' fees in connection therewith and in
connection with any appellate proceeding or post- judgment action involved
therein, which shall be due and payable together with all required service or
use taxes.
(D) STAMP AND OTHER TAXES. The Borrower agrees to pay and hold each of
the Lenders, the Administrative Agent and the Collateral Agent harmless from and
against any and all present and future stamp, intangibles, recording and other
similar taxes with respect to the foregoing matters referred to in this section
12.1 and save each of the Lenders, the Administrative Agent and the Collateral
Agent harmless from and against any
67
68
and all liabilities with respect to or resulting from any delay or omission
(other than to the extent attributable to any such person to be so indemnified)
to pay such taxes.
(E) INDEMNIFICATION. The Borrower agrees to indemnify each Lender, the
Administrative Agent and the Collateral Agent, and their respective officers,
directors, employees, representatives, agents, successors and assigns
(collectively, the "INDEMNITEES") from and hold each of them harmless against
any and all losses, liabilities, claims, damages or expenses reasonably incurred
by any of them as a result of, or arising out of, or in any way related to, or
by reason of
(i) any claim, investigation, litigation or other proceeding
(whether or not any Indemnitee is a party thereto) related to any
Project (except as provided in section (ii) and (v) below) and/or the
entering into and/or performance of any Credit Document or the use of
the proceeds of any Loans hereunder or the consummation of any
transactions contemplated in any Credit Document, other than any such
investigation, litigation or proceeding arising out of transactions
solely between any of the Lenders or the Administrative Agent,
transactions solely involving the assignment by a Lender of all or a
portion of its Loans and Commitment, or the granting of participations
therein, as provided in this Agreement, or arising solely out of any
examination of a Lender by any regulatory authority having jurisdiction
over it;
(ii) the actual or alleged presence of Hazardous Materials in
the air, surface water or groundwater or on the surface or subsurface
of any Project owned, leased or at any time operated by the Borrower or
any other Credit Party or any of their respective Affiliates, unless
the presence of such Hazardous Materials first occurred after the
Collateral Agent secured title, possession and control of such Project
to the exclusion of the Borrower and every other Credit Party and all
of their respective Affiliates or is based solely upon the gross
negligence or willful misconduct of the Collateral Agent or any Lender;
(iii) the release, generation, storage, transportation,
handling or disposal of Hazardous Materials at any location, whether or
not owned or operated by the Borrower, any other Credit Party or any of
their respective Affiliates, if the Borrower or any such other Credit
Party or Affiliate could have or is alleged to have any responsibility
in respect thereof;
(iv) the non-compliance of any such Project with foreign,
federal, state and local laws, regulations and ordinances (including
applicable permits thereunder) applicable to any such Project; or
(v) any Environmental Claim asserted against the Borrower, any
other Credit Party, or any of its respective Affiliates or any
Indemnitee, in respect of any such Project, unless the basis of such
Environmental Claim first arose after the Collateral Agent secured
title, possession and control of such Project to the exclusion of the
Borrower and every other Credit Party and all of their respective
Affiliates or is based solely upon the gross negligence or willful
misconduct of the Collateral Agent or any Lender;
including, in each case, without limitation, the reasonable fees and
disbursements of counsel incurred in connection with any such investigation,
litigation or other proceeding (but excluding any such losses, liabilities,
claims, damages or expenses to the extent incurred by reason of the gross
negligence or willful misconduct of the person to be indemnified or of any other
Indemnitee who is such person or an Affiliate of such person). To the extent
that the undertaking to indemnify, pay or hold harmless any person set forth in
the preceding sentence may be unenforceable because it is violative of any law
or public policy, the Borrower shall make the maximum contribution to the
payment and satisfaction of each of the indemnified liabilities which is
permissible under applicable law.
12.2. RIGHT OF SETOFF. In addition to any rights now or hereafter
granted under applicable law or otherwise, and not by way of limitation of any
such rights, upon the occurrence of an Event of Default, each Lender is hereby
authorized at any time or from time to time, without presentment, demand,
protest or other
68
69
notice of any kind to the Borrower, any other Credit Party or to any other
person, any such notice being hereby expressly waived, to set off and to
appropriate and apply any and all deposits (general or special) and any other
Indebtedness at any time held or owing by such Lender (including, without
limitation, by branches and agencies of such Lender wherever located) to or for
the credit or the account of the Borrower against and on account of the
Obligations and liabilities of the Borrower to such Lender under this Agreement
or under any of the other Credit Documents, including, without limitation, all
interests in Obligations of the Borrower purchased by such Lender pursuant to
section 12.4(b), and all other claims of any nature or description arising out
of or connected with this Agreement or any other Credit Document, irrespective
of whether or not such Lender shall have made any demand hereunder and although
said Obligations, liabilities or claims, or any of them, shall be contingent or
unmatured. EACH LENDER AGREES, SOLELY FOR THE BENEFIT OF THE ADMINISTRATIVE
AGENT AND THE OTHER LENDERS, NOT TO EXERCISE ANY SET-OFF OR SIMILAR RIGHTS IF BY
DOING SO SUCH ACTION COULD, UNDER THE LAW APPLICABLE TO ANY MORTGAGE COVERING
ANY PROJECT, RESULT IN THE LOSS OF THE RIGHT OF THE COLLATERAL AGENT (OR ANY
TRUSTEE THEREFOR UNDER A DEED OF TRUST OR SIMILAR INSTRUMENT) TO ENFORCE ANY
MORTGAGE OR ANY OTHER MATERIAL PORTION OF THE COLLATERAL.
12.3. NOTICES. Except as otherwise expressly provided herein, all
notices and other communications provided for hereunder shall be in writing
(including telegraphic, telex, facsimile transmission or cable communication)
and mailed, telegraphed, telexed, transmitted, cabled or delivered,
(a) if to the Borrower, to
Third Party Investors I, LLC
c/o Twin Oaks Capital, LLC
0000 Xxxx Xxxx, Xxxxx 000
Xxx Xxxxx, Xxxxxxxx 00000
Attention: Xxxxxx X. Xxxxx
Facsimile: (000) 000-0000
with a copy to:
Alterra Healthcare Corporation
000 Xxxxx Xxxxxxxxxx Xxxx, Xxxxx 000
Xxxxxxxxxx, Xxxxxxxxx 00000
Attention: Xxxx Xxxxxxxxx, Senior
Vice President, Finance
Facsimile: (000) 000-0000
and courtesy copies to:
McDonald Investments, Inc.
000 Xxxxx Xxxxxx X.X.
Xxxxx Xxxxxx, Xxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxxx,
Managing Director
Facsimile: (000) 000-0000
Xxxxx X. Xxxxx, Esq.
Xxxxx & Xxxxx
000 Xxxxxx Xxxxxx, X. X.
Xxxxx Xxxxxx, Xxxxxxxx 00000
Facsimile: (000) 000-0000
69
70
Xxxxxx & Hardin
2700 International Tower
000 Xxxxxxxxx Xxxxxx, X.X.
Xxxxxxx, Xxxxxxx 00000
Attention: Xxxx X. Xxxx, Esq.
Facsimile: (000) 000-0000
(b) if to any Lender, to it at its address specified on Annex I
hereto, or if not so specified, at its address specified in
the Assignment Agreement pursuant to which it became a Lender
hereunder;
(c) if to the Administrative Agent or the Collateral Agent, to it
at its Notice Address;
or at such other address as shall be designated by any party in a written notice
to the other parties hereto. All such notices and communications shall be
mailed, telegraphed, telexed, telecopied, or cabled or sent by overnight
courier, and shall be effective when received. The effectiveness of such notice
will not be affected by the giving or lack thereof of courtesy copies of such
notice.
12.4. BENEFIT OF AGREEMENT. (a) This Agreement shall be binding upon
and inure to the benefit of and be enforceable by the parties hereto and their
respective successors and assigns, PROVIDED that, except as permitted pursuant
to section 12.4(g), the Borrower may not assign or transfer any of its rights or
obligations hereunder without the prior written consent of all the Lenders, and,
PROVIDED, FURTHER, that any assignment by a Lender of its rights and obligations
hereunder shall be effected in accordance with section 12.4(c).
(B) PARTICIPATIONS. Each Lender may at any time grant participations in
any of its rights hereunder or under any of the Notes to (x) another Lender that
is not a Defaulting Lender or to an Affiliate of such Lender which is a
commercial bank, financial institution or other "accredited investor" (as
defined in SEC Regulation D), and (y) one or more Eligible Transferees, PROVIDED
that in the case of any such participation,
(i) the participant shall not have any rights under this
Agreement or any of the other Credit Documents, including rights of
consent, approval or waiver (the participant's rights against such
Lender in respect of such participation to be those set forth in the
agreement executed by such Lender in favor of the participant relating
thereto),
(ii) such Lender's obligations under this Agreement
(including, without limitation, its Commitment hereunder) shall remain
unchanged,
(iii) such Lender shall remain solely responsible to the other
parties hereto for the performance of such obligations,
(iv) such Lender shall remain the holder of any Note for all
purposes of this Agreement, and
(v) the Borrower, the Administrative Agent, and the other
Lenders shall continue to deal solely and directly with the selling
Lender in connection with such Lender's rights and obligations under
this Agreement, and all amounts payable by the Borrower hereunder or
under the other Credit Documents shall be determined as if such Lender
had not sold such participation, EXCEPT that the participant shall be
entitled to the benefits of sections 2.11 and 2.12 of this Agreement to
the extent that such Lender would be entitled to such benefits if the
participation had not been entered into or sold, and,
70
71
PROVIDED FURTHER, that no Lender shall transfer, grant or sell any participation
under which the participant shall have rights to approve any amendment to or
waiver of this Agreement or any other Credit Document except to the extent such
amendment or waiver would (A) reduce the amount or extend the time of payment of
any required or scheduled prepayment or repayment of the principal of any Loan
in which such Participant is participating, (B) extend the final scheduled
maturity of the Loans in which such participant is participating (it being
understood that any waiver of the making of, or the application of, any
prepayment or the method of any application of any prepayment to the Loans shall
not constitute an extension of the final maturity date thereof), or reduce the
rate or extend the time of payment of interest or Fees thereon (except in
connection with a waiver of the applicability of any post-default increase in
interest rates), or reduce the principal amount thereof, or increase such
participant's participating interest in any Commitment over the amount thereof
then in effect (it being understood that a waiver of any Default or Event of
Default or of any mandatory prepayment or a mandatory reduction in the Total
Commitment, or a mandatory prepayment, shall not constitute a change in the
terms of any Commitment), (C) release all or any substantial portion of the
Collateral, other than in connection with, and to the extent related to, the
prepayment or repayment of the Loans of the Borrower for any particular Project,
(D) release the Guarantor from its obligations under the Alterra Guaranty, or
(E) consent to the assignment or transfer by the Borrower of any of its rights
and obligations under this Agreement.
(C) ASSIGNMENTS BY LENDERS. Notwithstanding the foregoing, (x) any
Lender may assign all or a fixed portion of its Loans and/or Commitments and its
rights and obligations hereunder, to another Lender that is not a Defaulting
Lender, or to an Affiliate of any Lender (including itself) which is not a
Defaulting Lender and which is a commercial bank, financial institution or other
"accredited investor" (as defined in SEC Regulation D), and (y) any Lender may
assign all, or if less than all, a fixed portion, equal to at least $5,000,000
in the aggregate for the assigning Lender or assigning Lenders of its Loans
and/or Commitments and its rights and obligations hereunder, to one or more
Eligible Transferees, each of which assignees shall become a party to this
Agreement as a Lender by execution of an Assignment Agreement, PROVIDED that,
(i) in the case of any assignment of a portion of the Loans
and/or Commitments of a Lender, such Lender shall retain a minimum
fixed portion of the then Total Commitment and outstanding Loans equal
to at least $10,000,000 (or if less, 13.33% of the then Total
Commitment),
(ii) in the case of any assignment of a portion of the Loans
and/or Commitments of a Lender which is at the time acting as the
Administrative Agent, such Lender shall retain a minimum fixed portion
of the then Total Commitment and outstanding Loans equal to at least
$20,000,000 (or if less, 26.66% of the then Total Commitment),
(iii) at the time of any such assignment Annex I shall be
deemed modified to reflect the Commitments of such new Lender and of
the existing Lenders,
(iv) upon surrender of the old Notes, new Notes will be issued
to such new Lender and to the assigning Lender, such new Notes to be in
conformity with the requirements of section 2.6 (with appropriate
modifications) to the extent needed to reflect the revised Commitments,
(v) in the case of clause (y) only, the consent of the
Administrative Agent shall be required in connection with any such
assignment (which consent shall not be unreasonably withheld or
delayed), and
(vi) the Administrative Agent shall receive at the time of
each such assignment, from the assigning or assignee Lender, the
payment of a non-refundable assignment fee of $2,500 and,
71
72
PROVIDED FURTHER, that such transfer or assignment will not be effective until
the Assignment Agreement in respect thereof is recorded by the Administrative
Agent on the Lender Register maintained by it as provided herein, which
recordation shall be made promptly.
At the time of each assignment pursuant to this section 12.4(c) to a
person which is not already a Lender hereunder and which is not a United States
person (as such term is defined in section 7701(a)(30) of the Code) for Federal
income tax purposes, the respective assignee Lender shall provide to the
Borrower and the Administrative Agent the appropriate Internal Revenue Service
Forms (and, if applicable a Section 5.4(b)(ii) Certificate) described in section
5.4(b).
To the extent that an assignment of all or any portion of a Lender's
Commitment and related outstanding Obligations pursuant to this section 12.4(b)
would, at the time of such assignment, result in increased costs under section
2.11 from those being charged by the respective assigning Lender prior to such
assignment, then the Borrower shall not be obligated to pay such increased costs
(although the Borrower shall be obligated to any other increased costs of the
type described above resulting from changes after the date of the respective
assignment).
Nothing in this section 12.4(c) shall prevent or prohibit any Lender
from pledging its Notes or Loans to a Federal Reserve Bank in support of
borrowings made by such Lender from such Federal Reserve Bank.
(D) BLUE SKY LAWS. Notwithstanding any other provisions of this section
12.4, no transfer or assignment of the interests or obligations of any Lender
hereunder or any grant of participation therein shall be permitted if such
transfer, assignment or grant would require the Borrower to file a registration
statement with the SEC or to qualify the Loans under the "Blue Sky" laws of any
State.
(E) REPRESENTATIONS OF LENDERS. Each Lender initially party to this
Agreement hereby represents, and each person that becomes a Lender pursuant to
an assignment permitted by this section 12.4 will, upon its becoming party to
this Agreement, represent that it is a commercial lender, other financial
institution or other "accredited" investor (as defined in SEC Regulation D)
which makes or acquires loans in the ordinary course of its business and that it
will make or acquire Loans for its own account in the ordinary course of such
business, PROVIDED that subject to the preceding sections 12.4(b) and (c), the
disposition of any promissory notes or other evidences of or interests in
Indebtedness held by such Lender shall at all times be within its exclusive
control.
(F) GRANTS BY LENDERS TO SPCS. Notwithstanding anything to the contrary
contained herein, any Lender, (a "GRANTING LENDER") may grant to a special
purpose funding vehicle (an "SPC"), identified as such in writing from time to
time by the Granting Lender to the Administrative Agent and the Borrower, the
option to provide to the Borrower all or any part of any Loan that such Granting
Lender would otherwise be obligated to make to the Borrower pursuant to this
Agreement; PROVIDED that (i) nothing herein shall constitute a commitment by any
SPC to make any Loan, and (ii) if an SPC elects not to exercise such option or
otherwise fails to provide all or any part of such Loan, the Granting Lender
shall be obligated to make such Loan pursuant to the terms hereof. The making of
a Loan by an SPC hereunder shall utilize the Commitment of the Granting Lender
to the same extent, and as if, such Loan were made by such Granting Lender. Each
party hereto hereby agrees that no SPC shall be liable for any indemnity or
payment under this Agreement for which a Lender would otherwise be liable for so
long as, and to the extent, the Granting Lender provides such indemnity or makes
such payment. In furtherance of the foregoing, each party hereto hereby agrees
(which agreement shall survive the termination of this Agreement) that, prior to
the date that is one year and one day after the payment in full of all
outstanding commercial paper or other senior indebtedness of any SPC, it will
not institute against, or join any other person in instituting against, such SPC
any bankruptcy, reorganization, arrangement, insolvency or liquidation
proceedings under the laws of the United States or any State thereof. In
addition, notwithstanding anything to the contrary contained in this section
12.4, any SPC may (i) with notice to, but without the prior written consent of,
the Borrower and the Administrative Agent and without paying any processing fee
therefor, assign all or a portion of its interests in any Loans to the Granting
Lender or to any financial institutions providing liquidity and/or credit
72
73
support to or for the account of such SPC to support the funding or maintenance
of Loans and (ii) disclose on a confidential basis any non-public information
relating to its Loans to any rating agency, commercial paper dealer or provider
of any surety, guarantee or credit or liquidity enhancements to such SPC. This
section 12.4(f) may not be amended without the written consent of any Granting
Lender affected thereby.
(G) ASSIGNMENT BY THE BORROWER TO ALTERRA. Notwithstanding anything
contained herein to the contrary, provided that there shall be no uncured Event
of Default under this Agreement, the Guaranty, or any other Credit Document, or
event which with the provision of notice or passage of time would constitute an
Event of Default under any Credit Document, the Borrower shall have the right to
assign all of its rights and obligation under this Agreement and all of the
other Credit Documents to Alterra Healthcare Corporation ("ALTERRA"), subject to
the satisfaction of the following terms and conditions: (i) Alterra shall accept
such assignment and conveyance and shall assume all of the obligations of the
Borrower pursuant to a form of assignment and assumption agreement reasonably
satisfactory to the Administrative Agent, (ii) the Administrative Agent shall
receive and approve evidence of the authorization of the Borrower and Alterra to
consummate the assignment and assumption, (iii) the Administrative Agent shall
receive and reasonably approve an indemnity by Alterra regarding any claims of
losses, costs or damages incurred by, or claimed against, the Administrative
Agent or any Lender related to the assignment and assumption, (iv) the
Administrative Agent shall receive confirmation, in form and substance
satisfactory to it in all respects, from the Title Company that the
effectiveness and priority of the liens and security interests created pursuant
to the Security Documents are not impaired by reason of the assignment and
assumption, (v) all filings and recordings, which, in the opinion of the
Administrative Agent, are necessary or desirable to give effect to such
assignment and assumption, shall have been made and effected and all filing and
other fees, taxes and charges which may be payable in connection therewith shall
have been paid in full, (vi) Alterra shall pay all costs and expenses of the
Administrative Agent in connection with the assignment and assumption,
including, without limitation, preparation, review and approval of the foregoing
deliverables, and (vii) all other terms, conditions and other requirements which
may be reasonably imposed by the Administrative Agent shall have been satisfied.
Upon the occurrence of the foregoing, effective upon the dissolution of the
Borrower, the Administrative Agent (on behalf of itself and all of the Lenders)
shall release the Borrower from all obligations and liabilities under the Credit
Documents.
12.5. NO WAIVER: REMEDIES CUMULATIVE. No failure or delay on the part
of the Administrative Agent or any Lender in exercising any right, power or
privilege hereunder or under any other Credit Document and no course of dealing
between the Borrower or any other Credit Party and the Administrative Agent or
any Lender shall operate as a waiver thereof; nor shall any single or partial
exercise of any right, power or privilege hereunder or under any other Credit
Document preclude any other or further exercise thereof or the exercise of any
other right, power or privilege hereunder or thereunder. The rights and remedies
herein expressly provided are cumulative and not exclusive of any rights or
remedies which the Administrative Agent or any Lender would otherwise have. No
notice to or demand on the Borrower or any other Credit Party in any case shall
entitle the Borrower or any other Credit Party to any other or further notice or
demand in similar or other circumstances or constitute a waiver of the rights of
the Administrative Agent or the Lenders to any other or further action in any
circumstances without notice or demand.
12.6. PAYMENTS PRO RATA. (a) The Administrative Agent agrees that
promptly after its receipt of each payment from or on behalf of the Borrower or
any other Credit Party in respect of any Obligations, it shall distribute such
payment to the Lenders (other than any Lender that has expressly waived in
writing its right to receive its PRO RATA share thereof) PRO RATA based upon
their respective shares, if any, of the Obligations with respect to which such
payment was received. As to any such payment received by the Administrative
Agent prior to 1:00 P.M. (local time at the Payment Office) in funds which are
immediately available on such day, the Administrative Agent will use all
reasonable efforts to distribute such payment in immediately available funds on
the same day to the Lenders as aforesaid.
73
74
(b) Each of the Lenders agrees that, if it should receive any amount
hereunder (whether by voluntary payment, by realization upon security, by the
exercise of the right of setoff or banker's lien, by counterclaim or cross
action, by the enforcement of any right under the Credit Documents, or
otherwise) which is applicable to the payment of the principal of, or interest
on, the Loans or Fees, of a sum which with respect to the related sum or sums
received by other Lenders is in a greater proportion than the total of such
Obligation then owed and due to such Lender bears to the total of such
Obligation then owed and due to all of the Lenders immediately prior to such
receipt, then such Lender receiving such excess payment shall purchase for cash
without recourse or warranty from the other Lenders an interest in the
Obligations to such Lenders in such amount as shall result in a proportional
participation by all of the Lenders in such amount, PROVIDED that if all or any
portion of such excess amount is thereafter recovered from such Lender, such
purchase shall be rescinded and the purchase price restored to the extent of
such recovery, but without interest.
(c) Notwithstanding anything to the contrary contained herein, the
provisions of the preceding sections 12.6(a) and (b) shall be subject to the
express provisions of this Agreement which require, or permit, differing
payments to be made to Lenders which are not Defaulting Lenders, as opposed to
Defaulting Lenders.
12.7. CALCULATIONS: COMPUTATIONS. (a) The financial statements to be
furnished to the Lenders pursuant hereto shall be made and prepared in
accordance with GAAP consistently applied throughout the periods involved
(except as set forth in the notes thereto or as otherwise disclosed in writing
by the Borrower to the Lenders); PROVIDED, that if at any time the computations
determining compliance with section 9 utilize accounting principles different
from those utilized in the financial statements furnished to the Lenders, such
computations shall set forth in reasonable detail a description of the
differences and the effect upon such computations.
(b) All computations of interest on Loans hereunder shall be made on
the actual number of days elapsed over a year of 360 days.
12.8. GOVERNING LAW; SUBMISSION TO JURISDICTION; VENUE; WAIVER OF JURY
TRIAL. (a) This Agreement contemplates the financing of Projects which may be
located in a number of different jurisdictions, and involves multiple parties
located in a number of different jurisdictions. In light of such factors and the
fact that the principal place of business of the Administrative Agent is
presently located in Cleveland, Ohio, the parties have determined that this
Agreement and (as provided below) certain of the other Credit Documents should
be governed by and construed under the law of the State of Ohio, and that it
would be appropriate for the Borrower to expressly submit to the jurisdiction of
certain courts sited in the State of Ohio. Accordingly: THIS AGREEMENT AND THE
OTHER CREDIT DOCUMENTS AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER
AND THEREUNDER SHALL BE CONSTRUED IN ACCORDANCE WITH AND BE GOVERNED BY THE LAW
OF THE STATE OF OHIO, EXCEPT TO THE EXTENT THAT CREDIT DOCUMENTS RELATED TO A
SPECIFIC PROJECT PROVIDE THAT THE LAW OF THE JURISDICTION IN WHICH SUCH PROJECT
IS LOCATED SHALL GOVERN SUCH CREDIT DOCUMENTS. TO THE FULLEST EXTENT PERMITTED
BY LAW, THE BORROWER HEREBY UNCONDITIONALLY AND IRREVOCABLY WAIVES ANY CLAIM TO
ASSERT THAT THE LAW OF ANY JURISDICTION OTHER THAN THE STATE OF OHIO GOVERNS
THIS AGREEMENT OR (EXCEPT AS AFORESAID) ANY OF THE OTHER CREDIT DOCUMENTS. Any
legal action or proceeding with respect to this Agreement or any other Credit
Document may be brought in the Court of Common Pleas of Cuyahoga County, Ohio,
or of the United States for the Northern District of Ohio, and, by execution and
delivery of this Agreement, the Borrower hereby irrevocably accepts for itself
and in respect of its property, generally and unconditionally, the jurisdiction
of the aforesaid courts. The Borrower hereby further irrevocably consents to the
service of process out of any of the aforementioned courts in any such action or
proceeding by the mailing of copies thereof by registered or certified mail,
postage prepaid, to the Borrower at its address for notices pursuant to section
12.3, such service to become effective 30 days after such mailing or at such
earlier time as may be provided under applicable law. Nothing herein shall
affect the right of the Administrative Agent
74
75
or any Lender to serve process in any other manner permitted by law or to
commence legal proceedings or otherwise proceed against the Borrower in any
other jurisdiction.
(b) The Borrower hereby irrevocably waives any objection which it may
now or hereafter have to the laying of venue of any of the aforesaid actions or
proceedings arising out of or in connection with this Agreement or any other
Credit Document brought in the courts referred to in section 12.8(a) above and
hereby further irrevocably waives and agrees not to plead or claim in any such
court that any such action or proceeding brought in any such court has been
brought in an inconvenient forum.
(c) EACH OF THE PARTIES TO THIS AGREEMENT HEREBY IRREVOCABLY WAIVES ALL
RIGHT TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT
OF OR RELATING TO THIS AGREEMENT, THE OTHER CREDIT DOCUMENTS OR THE TRANSACTIONS
CONTEMPLATED HEREBY OR THEREBY.
12.9. RELEASE OF A PROJECT UPON PREPAYMENT, ETC. The Administrative
Agent and the Collateral Agent are authorized to and shall promptly upon the
repayment or prepayment in full of the Borrower's Loans for a Project, release
and discharge the Mortgage for such Project, any additional Security Documents
which relate to such Project, and any other Collateral which is directly related
only to such Project; PROVIDED, that no such release or discharge shall be made
if at the time thereof (x) a Default under section 10.1(a) has occurred and is
continuing, or (y) an Event of Default shall have occurred and be continuing.
12.10. COUNTERPARTS. This Agreement may be executed in any number of
counterparts and by the different parties hereto on separate counterparts, each
of which when so executed and delivered shall be an original, but all of which
shall together constitute one and the same agreement. A set of counterparts
executed by all the parties hereto shall be lodged with the Borrower and the
Administrative Agent.
12.11. EFFECTIVENESS. This Agreement shall become effective on the date
(the "EFFECTIVE DATE") on which the Borrower and each of the Lenders shall have
signed a copy hereof (whether the same or different copies) and shall have
delivered the same to the Administrative Agent at the Notice Office of the
Administrative Agent or, in the case of the Lenders, shall have given to the
Administrative Agent telephonic (confirmed in writing), written telex or
facsimile transmission notice (actually received) at such office that the same
has been signed and mailed to it.
12.12. HEADINGS DESCRIPTIVE. The headings of the several sections and
other portions of this Agreement are inserted for convenience only and shall not
in any way affect the meaning or construction of any provision of this
Agreement.
12.13. AMENDMENT OR WAIVER. Neither this Agreement or any other Credit
Document (other than a Designated Hedge Agreement) nor any terms hereof or
thereof may be amended, waived or otherwise modified UNLESS such amendment,
waiver or other modification is in writing and signed by the Borrower and the
Required Lenders, PROVIDED that no such amendment, waiver or other modification
shall, without the consent of each Lender (other than a Defaulting Lender)
affected thereby,
(a) reduce the amount or extend the time of payment of any
required or scheduled prepayment or repayment of the principal of any
Loan,
(b) extend any interim or final maturity date provided for
herein (including any extension of any interim or final maturity date
to be effected in accordance with section 4.3 hereof) applicable to a
Loan or a Commitment (it being understood that any waiver of the making
or application of any mandatory prepayment of the Loans shall not
constitute an extension of such final maturity thereof),
75
76
(c) reduce the rate or extend the time of payment of interest
on any Loans (other than as a result of waiving the applicability of
any post-default increase in interest rates) or Fees thereon or other
amounts payable hereunder with respect thereto, or reduce the principal
amount thereof,
(d) increase the Commitment of any Lender over the amount
thereof then in effect (it being understood that a waiver of any
Default or Event of Default or of any mandatory prepayment of the Loans
shall not constitute a change in the terms of any Commitment of any
Lender),
(e) increase the Total Commitment above $65,000,000, except in
connection with an increase of the Total Commitment up to $75,000,000
as contemplated by the Incremental Commitment,
(f) release the Guarantor from any obligations under the
Alterra Guaranty, or otherwise reduce or limit any such obligations of
the Guarantor, or change the financial covenants related to the
Guarantor contained in Section 13 of the Alterra Guaranty,
(g) release any of the Collateral, other than in connection
with the prepayment or repayment of the Loans of the Borrower, as
contemplated by section 12.9 hereof,
(h) amend, modify or waive any provision of this section
12.13, or section 9.6, 11.7, 12.1, 12.4, 12.6 or 12.7(b),
(i) amend, modify or waive any other provision of any of the
Credit Documents pursuant to which the consent or approval of all
Lenders is by the terms of such provision explicitly required,
(j) reduce the percentage specified in, or otherwise modify,
the definition of Required Lenders, or modify any other defined terms
used in connection with the sections referenced in this section 12.13,
or
(k) consent to the assignment or transfer by the Borrower of
any of its rights and obligations under this Agreement.
No provision of section 11 may be amended without the consent of the
Administrative Agent.
12.14. SURVIVAL OF INDEMNITIES. All indemnities set forth herein
including, without limitation, in section 2.11, 2.12, and 12.1 shall survive the
execution and delivery of this Agreement and the making and repayment or
prepayment of Loans.
12.15. DOMICILE OF LOANS. Each Lender may transfer and carry its Loans
at, to or for the account of any branch office, subsidiary or affiliate of such
Lender, PROVIDED that the Borrower shall not be responsible for costs arising
under section 2.11 resulting from any such transfer (other than a transfer
pursuant to section 2.13) to the extent not otherwise applicable to such Lender
prior to such transfer.
12.16. CONFIDENTIALITY. Each Lender shall hold all non-public
information obtained pursuant to the requirements of this Agreement which has
been identified as such by the Borrower in accordance with its customary
procedure for handling confidential information of this nature and in accordance
with safe and sound banking practices and in any event may make disclosure
reasonably required by any BONA FIDE transferee or participant in connection
with the contemplated transfer of any Loans or Commitment or participation
therein (PROVIDED that each such prospective transferee and/or participant shall
execute an agreement for the benefit of the Borrower with such prospective
transferor Lender and/or participant containing provisions substantially
identical to those contained in this section 12.16), and to its auditors,
attorneys or as required or requested by any governmental agency or
representative thereof or pursuant to legal process, PROVIDED that, unless
specifically
76
77
prohibited by applicable law or court order, each Lender shall notify the
Borrower of any request by any governmental agency or representative thereof
(other than any such request in connection with an examination of the financial
condition of such Lender by such governmental agency) for disclosure of any such
non-public information prior to disclosure of such information, and PROVIDED
FURTHER that in no event shall any Lender be obligated or required to return any
materials furnished by or on behalf of the Borrower or any of its Affiliates.
The Borrower hereby agrees that the failure of a Lender to comply with the
provisions of this section 12.16 shall not relieve the Borrower or any other
Credit Party of any of the obligations to such Lender under this Agreement and
the other Credit Documents.
12.17. LENDER REGISTER. The Borrower hereby designates the
Administrative Agent to serve as its agent, solely for purposes of this section
12.17, to maintain a register (the "LENDER REGISTER") on or in which it will
record the names and addresses of the Lenders, and the Commitments from time to
time of each of the Lenders, the Loans made to the Borrower by each of the
Lenders and each repayment and prepayment in respect of the principal amount of
such Loans of each such Lender. Failure to make any such recordation, or (absent
manifest error) any error in such recordation, shall not affect the Borrower's
obligations in respect of such Loans. With respect to any Lender, the transfer
of the Commitment of such Lender and the rights to the principal of, and
interest on, any Loan made pursuant to such Commitment shall not be effective
until such transfer is recorded on the Lender Register maintained by the
Administrative Agent with respect to ownership of such Commitment and Loans and
prior to such recordation all amounts owing to the transferor with respect to
such Commitment and Loans shall remain owing to the transferor. The registration
of assignment or transfer of all or part of any Commitments and Loans shall be
recorded by the Administrative Agent on the Lender Register only upon the
acceptance by the Administrative Agent of a properly executed and delivered
Assignment Agreement pursuant to section 12.4(b). The Borrower agrees to
indemnify the Administrative Agent from and against any and all losses, claims,
damages and liabilities of whatsoever nature which may be imposed on, asserted
against or incurred by the Administrative Agent in performing its duties under
this section 12.17. The Lender Register shall be available for inspection by the
Borrower or any Lender at any reasonable time and from time to time upon
reasonable prior notice.
12.18. GENERAL LIMITATION OF LIABILITY. No claim may be made by the
Borrower or any other Credit Party, any Lender, the Administrative Agent or any
other person against the Administrative Agent or any other Lender or the
Affiliates, directors, officers, employees, attorneys or agents of any of them
for any damages other than actual compensatory damages in respect of any claim
for breach of contract or any other theory of liability arising out of or
related to the transactions contemplated by this Agreement or any of the other
Credit Documents, or any act, omission or event occurring in connection
therewith; and the Borrower, each Lender and the Administrative Agent hereby, to
the fullest extent permitted under applicable law, waives, releases and agrees
not to xxx or counterclaim upon any such claim for any special, consequential or
punitive damages, whether or not accrued and whether or not known or suspected
to exist in its favor.
12.19. NO DUTY. All attorneys, accountants, appraisers, consultants and
other professional persons (including the firms or other entities on behalf of
which any such person may act) retained by the Administrative Agent or any
Lender with respect to the transactions contemplated by the Credit Documents
shall have the right to act exclusively in the interest of the Administrative
Agent or such Lender, as the case may be, and shall have no duty of disclosure,
duty of loyalty, duty of care, or other duty or obligation of any type or nature
whatsoever to the Borrower or the other Credit Parties, or to any other person,
with respect to any matters within the scope of such representation or related
to their activities in connection with such representation. The Borrower agrees
not to assert any claim or counterclaim against any such persons with regard to
such matters, all such claims and counterclaims, now existing or hereafter
arising, whether known or unknown, foreseen or unforeseeable, being hereby
waived, released and forever discharged.
12.20. LENDERS AND AGENT NOT FIDUCIARY TO BORROWER, ETC. The
relationship among the Borrower and the other Credit Parties, on the one hand,
and the Administrative Agent and the Lenders, on the other hand, is
77
78
solely that of debtor and creditor, and the Administrative Agent and the Lenders
have no fiduciary or other special relationship with the Borrower and the other
Credit Parties, and no term or provision of any Credit Document, no course of
dealing, no written or oral communication, or other action, shall be construed
so as to deem such relationship to be other than that of debtor and creditor.
12.21. SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All representations
and warranties herein shall survive the making of Loans hereunder, the execution
and delivery of this Agreement, the Notes and the other documents the forms of
which are attached as Exhibits hereto, the issue and delivery of the Notes, any
disposition thereof by any holder thereof, and any investigation made by the
Administrative Agent or any Lender or any other holder of any of the Notes or on
its behalf. All statements contained in any certificate or other document
delivered to the Administrative Agent or any Lender or any holder of any Notes
by or on behalf of the Borrower or any other Credit Party pursuant hereto or
otherwise specifically for use in connection with the transactions contemplated
hereby shall constitute representations and warranties by the Borrower
hereunder, made as of the respective dates specified therein or, if no date is
specified, as of the respective dates furnished to the Administrative Agent or
any Lender.
12.22. INTEREST RATE LIMITATION. Notwithstanding anything herein to the
contrary, if at any time the interest rate applicable to any Loan, together with
all Fees, charges and other amounts which are treated as interest on such Loan
under applicable law (collectively the "CHARGES"), shall exceed the Highest
Lawful Rate which may be contracted for, charged, taken, received or reserved by
the Lender holding such Loan in accordance with applicable law, the rate of
interest payable in respect of such Loan hereunder, together with all Charges
payable in respect thereof, shall be limited to the Highest Lawful Rate and, to
the extent lawful, the interest and Charges that would have been payable in
respect of such Loan but were not payable as a result of the operation of this
section 12.22 shall be cumulated and the interest and Charges payable to such
Lender in respect of other Loans or periods shall be increased (but not above
the Highest Lawful Rate therefor) until such cumulated amount, together with
interest thereon at the Federal Funds Effective Rate to the date of repayment,
shall have been received by such Lender.
12.23. LOST NOTES. In the event that a Lender provides an affidavit and
indemnity to the Borrower for any Note which has been mutilated, lost, stolen,
destroyed or otherwise misplaced, the Borrower shall execute and deliver a
replacement Note therefor.
[The balance of this page is intentionally blank;
the next page is the signature page.]
78
79
IN WITNESS WHEREOF, each of the parties hereto has caused a counterpart
of this Agreement to be duly executed and delivered as of the date first above
written.
THIRD PARTY INVESTORS I, LLC KEY CORPORATE CAPITAL INC.,
individually as a Lender and
BY: TWIN OAKS CAPITAL, LLC, ITS MANAGER as Administrative Agent
By: /s/ Xxxxx X. XxxXxxxx
---------------------------
BY: /S/ XXXXXX X. XXXXX Vice President
-----------------------------------------
PRESIDENT
FLEET NATIONAL BANK THE HUNTINGTON NATIONAL BANK
By: /s/ Xxxx Xxxxxxx By: /s/ Xxxxxxx Xxxxxxx
----------------------------------------- ----------------------------
Vice President Vice President
79
