Exhibit 10.1
CONSTRUCTION LOAN
AGREEMENT
Dated as of May 2,
2008
by and among
CORPORATE OFFICE PROPERTIES,
L.P.,
as Borrower
CORPORATE OFFICE PROPERTIES
TRUST,
as Parent,
KEYBANC CAPITAL MARKETS
as Arranger,
KEYBANK NATIONAL
ASSOCIATION,
as Administrative Agent,
BANK OF AMERICA, N.A.,
as Syndication Agent,
MANUFACTURERS AND TRADERS TRUST
COMPANY,
as Documentation Agent,
and
THE FINANCIAL INSTITUTIONS INITIALLY
SIGNATORY HERETO
AND THEIR ASSIGNEES PURSUANT TO
SECTION 12.5.,
as Lenders
TABLE OF CONTENTS
|
Article I.
Definitions
|
1
|
|
|
|
|
Section 1.1.
|
Definitions
|
1
|
|
Section 1.2.
|
General; References to
Times
|
17
|
|
|
|
|
|
Article II. Credit
Facility
|
18
|
|
|
|
|
Section 2.1.
|
Loans
|
18
|
|
Section 2.2.
|
Rates and Payment of Interest on
Loans
|
21
|
|
Section 2.3.
|
Number of Interest
Periods
|
22
|
|
Section 2.4.
|
Repayment of Loans
|
22
|
|
Section 2.5.
|
Prepayments
|
22
|
|
Section 2.6.
|
Continuation
|
23
|
|
Section 2.7.
|
Conversion
|
23
|
|
Section 2.8.
|
Notes
|
24
|
|
Section 2.9.
|
Extension of Termination
Date
|
24
|
|
Section 2.10.
|
Amount Limitations
|
25
|
|
Section 2.11.
|
Increase of Commitments
|
25
|
|
|
|
|
|
Article III. Payments, Fees and
Other General Provisions
|
26
|
|
|
|
|
Section 3.1.
|
Payments
|
26
|
|
Section 3.2.
|
Pro Rata Treatment
|
26
|
|
Section 3.3.
|
Sharing of Payments, Etc.
|
26
|
|
Section 3.4.
|
Several Obligations
|
27
|
|
Section 3.5.
|
Minimum Amounts
|
27
|
|
Section 3.6.
|
Fees
|
27
|
|
Section 3.7.
|
Computations
|
28
|
|
Section 3.8.
|
Usury
|
28
|
|
Section 3.9.
|
Agreement Regarding Interest and
Charges
|
28
|
|
Section 3.10.
|
Statements of Account
|
29
|
|
Section 3.11.
|
Defaulting Lenders
|
29
|
|
Section 3.12.
|
Taxes
|
30
|
|
|
|
|
|
Article IV. Yield Protection,
Etc.
|
32
|
|
|
|
|
Section 4.1.
|
Additional Costs; Capital
Adequacy
|
32
|
|
Section 4.2.
|
Suspension of LIBOR Loans
|
33
|
|
Section 4.3.
|
Illegality
|
33
|
|
Section 4.4.
|
Compensation
|
33
|
|
Section 4.5.
|
Treatment of Affected
Loans
|
34
|
|
Section 4.6.
|
Change of Lending Office
|
35
|
|
Section 4.7.
|
Assumptions Concerning Funding of
LIBOR Loans
|
35
|
|
|
|
|
|
Article V. Borrowing Base
Properties
|
35
|
|
|
|
|
Section 5.1.
|
Eligibility of Properties
|
35
|
|
Section 5.2.
|
Release of Properties
|
39
|
|
Section 5.3.
|
Frequency of Calculations of
Borrowing Base
|
39
|
i
|
Article VI. Conditions
Precedent
|
40
|
|
|
|
|
Section 6.1.
|
Conditions Precedent to
Effectiveness of Agreement
|
40
|
|
Section 6.2.
|
Additional Conditions Precedent To
All Loans
|
42
|
|
Section 6.3.
|
Initial Construction Requirements to
Making of Loans Under a Borrowing Base Property
Sub-Facility
|
43
|
|
Section 6.4.
|
Deliveries for Subsequent Loans for
Borrowing Base Properties
|
43
|
|
Section 6.5.
|
Deliveries for Final
Disbursements
|
44
|
|
Section 6.6.
|
Conditions as Covenants
|
44
|
|
|
|
|
|
Article VII. Representations
and Warranties
|
44
|
|
|
|
|
Section 7.1.
|
Representations and
Warranties
|
44
|
|
Section 7.2.
|
Survival of Representations and
Warranties, Etc.
|
49
|
|
|
|
|
|
Article VIII. Affirmative
Covenants
|
49
|
|
|
|
|
Section 8.1.
|
Use of Proceeds
|
49
|
|
Section 8.2.
|
Further Assurances
|
50
|
|
Section 8.3.
|
Certain Covenants of Existing Credit
Agreement
|
50
|
|
Section 8.4.
|
Foreign Assets Control
|
50
|
|
Section 8.5.
|
Construction Related
Covenants
|
50
|
|
|
|
|
|
Article IX.
Information
|
54
|
|
|
|
|
Section 9.1.
|
Compliance Certificate
|
54
|
|
Section 9.2.
|
Other Information
|
54
|
|
|
|
|
|
Article X. Default
|
55
|
|
|
|
|
Section 10.1.
|
Events of Default
|
55
|
|
Section 10.2.
|
Remedies Upon Event of
Default
|
57
|
|
Section 10.3.
|
Remedies Upon Default
|
58
|
|
Section 10.4.
|
Allocation of Proceeds
|
58
|
|
Section 10.5.
|
Performance by Agent
|
59
|
|
Section 10.6.
|
Rights Cumulative
|
59
|
|
|
|
|
|
Article XI. The
Agent
|
59
|
|
|
|
|
Section 11.1.
|
Authorization and Action
|
59
|
|
Section 11.2.
|
Agent’s Reliance,
Etc.
|
60
|
|
Section 11.3.
|
Notice of Defaults
|
61
|
|
Section 11.4.
|
KeyBank as Lender
|
61
|
|
Section 11.5.
|
Approvals of Lenders
|
61
|
|
Section 11.6.
|
Lender Credit Decision,
Etc.
|
62
|
|
Section 11.7.
|
Collateral Matters
|
62
|
|
Section 11.8.
|
Indemnification of Agent
|
63
|
|
Section 11.9.
|
Successor Agent
|
64
|
|
Section 11.10.
|
Titled Agent
|
65
|
|
|
|
|
|
Article XII.
Miscellaneous
|
65
|
|
|
|
|
Section 12.1.
|
Notices
|
65
|
ii
|
Section 12.2.
|
Expenses
|
66
|
|
Section 12.3.
|
Setoff
|
67
|
|
Section 12.4.
|
Litigation; Jurisdiction; Other
Matters; Waivers
|
67
|
|
Section 12.5.
|
Successors and Assigns
|
68
|
|
Section 12.6.
|
Amendments
|
72
|
|
Section 12.7.
|
Nonliability of Agent and
Lenders
|
73
|
|
Section 12.8.
|
Confidentiality
|
73
|
|
Section 12.9.
|
Indemnification
|
74
|
|
Section 12.10.
|
Termination; Survival
|
76
|
|
Section 12.11.
|
Severability of
Provisions
|
77
|
|
Section 12.12.
|
GOVERNING LAW
|
77
|
|
Section 12.13.
|
Counterparts
|
77
|
|
Section 12.14.
|
Obligations With Respect to Loan
Parties
|
77
|
|
Section 12.15.
|
Limitation of Liability
|
77
|
|
Section 12.16.
|
Entire Agreement
|
77
|
|
Section 12.17.
|
Construction
|
78
|
|
Section 12.18.
|
Patriot Act
|
78
|
|
Section 12.19.
|
Existing Credit Agreement
Provisions
|
78
|
|
|
|
|
SCHEDULE I
|
Commitments
|
|
|
SCHEDULE 5.1.
|
Borrowing Base Properties
|
|
|
SCHEDULE 7.1.(b)
|
Ownership of Property
Owners
|
|
|
SCHEDULE 8.5(f)
|
Insurance Requirements
|
|
|
|
|
|
|
EXHIBIT A
|
Form of Assignment and
Acceptance Agreement
|
|
|
EXHIBIT B
|
Form of Borrowing Base
Certificate
|
|
|
EXHIBIT C
|
Form of Draw Request
|
|
|
EXHIBIT D
|
Form of Guaranty
|
|
|
EXHIBIT E
|
Form of Notice of
Continuation
|
|
|
EXHIBIT F
|
Form of Notice of
Conversion
|
|
|
EXHIBIT G
|
Form of Pledge
Agreement
|
|
|
EXHIBIT H
|
Form of Note
|
|
|
EXHIBIT I
|
Form of Opinion of
Counsel
|
|
|
EXHIBIT J
|
Form of Compliance
Certificate
|
|
|
EXHIBIT K
|
Patriot Act and OFAC Form
|
|
|
|
|
|
|
iii
THIS CONSTRUCTION LOAN AGREEMENT
(this “ Agreement ”) dated as of May 2,
2008 by and among CORPORATE OFFICE PROPERTIES, L.P., a limited
partnership formed under the laws of the State of Delaware (the
“ Borrower ”), CORPORATE OFFICE PROPERTIES
TRUST, a real estate investment trust formed under the laws of the
State of Maryland (the “ Parent ”), each of the
financial institutions initially a signatory hereto together with
their assignees pursuant to Section 12.5., KEYBANC CAPITAL
MARKETS, INC., as Arranger (the “ Arranger ”),
KEYBANK NATIONAL ASSOCIATION, as Administrative Agent, BANK OF
AMERICA, N.A., as Syndication Agent (the “ Syndication
Agent ”), and MANUFACTURERS AND TRADERS TRUST COMPANY, as
Documentation Agent (the “ Documentation Agent
”).
WHEREAS, the Lenders desire to make
to the Borrower a construction credit facility in an aggregate
principal amount of $225,000,000 on the terms and conditions
contained herein and the other Loan Documents.
NOW, THEREFORE, for good and
valuable consideration, the receipt and sufficiency of which are
hereby acknowledged by the parties hereto, the parties hereto agree
as follows:
ARTICLE I.
DEFINITIONS
Section 1.1.
Definitions.
In addition to terms defined
elsewhere herein, the following terms shall have the following
meanings for the purposes of this Agreement:
“ Additional Costs
” has the meaning given that term in
Section 4.1.
“ Adjusted LIBOR
” means, with respect to each Interest Period for any LIBOR
Loan, the rate obtained by dividing (a) LIBOR for such Interest
Period by (b) a percentage equal to 1 minus the stated maximum
rate (stated as a decimal) of all reserves, if any, required to be
maintained with respect to Eurocurrency funding (currently referred
to as “Eurocurrency liabilities”) as specified in
Regulation D of the Board of Governors of the Federal Reserve
System (or against any other category of liabilities which includes
deposits by reference to which the interest rate on LIBOR Loans is
determined or any applicable category of extensions of credit or
other assets which includes loans by an office of any Lender
outside of the United States of America to residents of the United
States of America). Any change in such maximum rate shall result in
a change in Adjusted LIBOR on the date on which such change in such
maximum rate becomes effective.
“ Administrative
Questionnaire ” means an Administrative Questionnaire in
a form supplied by the Agent to the Lenders from time to
time.
“ Affiliate ”
means any Person (other than the Agent or any Lender):
(a) directly or indirectly controlling, controlled by, or
under common control with, the Parent; (b) directly or
indirectly owning or holding five percent (5.0%) or more of any
Equity Interest in the Parent; or (c) five percent (5.0%) or
more of whose voting stock or other Equity Interest is directly or
indirectly owned or held by the Parent. For purposes of this
definition, “control” (including with correlative
meanings, the terms “controlling”, “controlled
by” and “under common control
with”) means the possession
directly or indirectly of the power to direct or cause the
direction of the management and policies of a Person, whether
through the ownership of voting securities or by contract or
otherwise. The Affiliates of a Person shall include any
officer or director of such Person. In no event shall the
Agent or any Lender be deemed to be an Affiliate of the Borrower or
the Parent.
“ Agent ” means
KeyBank National Association, as contractual representative for the
Lenders under the terms of this Agreement, and any of its
successors.
“ Agreement Date
” means the date as of which this Agreement is
dated.
“ Applicable Law
” means all applicable provisions of constitutions, statutes,
rules, regulations and orders of all governmental bodies and all
orders and decrees of all courts, tribunals and
arbitrators.
“ Applicable Margin
” means the percentage set forth below corresponding to the
ratio of Total Indebtedness to Total Asset Value as determined in
accordance with Section 9.1. of the Existing Credit
Agreement:
|
Level
|
|
Total Indebtedness to Total Asset Value
|
|
Applicable Margin for
LIBOR Loans
|
|
Applicable Margin for
Base Rate Loans
|
|
|
1
|
|
Less than 0.50 to 1.00
|
|
1.60
|
%
|
0.0
|
%
|
|
2
|
|
Greater than or equal to 0.50 to
1.00 and less than 0.55 to 1.00
|
|
1.75
|
%
|
0.0
|
%
|
|
3
|
|
Greater than or equal to 0.55 to
1.00 and less than 0.60 to 1.00
|
|
1.85
|
%
|
0.0
|
%
|
|
4
|
|
Greater than or equal to 0.60 to
1.00
|
|
2.00
|
%
|
0.0
|
%
|
The Applicable Margin shall be
determined by the Agent from time to time, based on the ratio of
Total Indebtedness to Total Asset Value as set forth in the
Compliance Certificate most recently delivered by the Borrower
pursuant to Section 9.1. Any adjustment to the
Applicable Margin shall be effective (a) in the case of a
Compliance Certificate delivered in connection with quarterly
financial statements of the Parent delivered pursuant to
Section 8.1. of the Existing Credit Agreement, as of the date
fifty-five (55) days following the end of the last day of the
applicable fiscal quarter covered by such Compliance Certificate,
(b) in the case of a Compliance Certificate delivered in
connection with annual financial statements of the Parent delivered
pursuant to Section 8.2 of the Existing Credit Agreement, as
of the date one hundred (100) days following the end of the last
day of the applicable fiscal year covered by such Compliance
Certificate, and (c) in the case of any other Compliance
Certificate, as of the date five (5) Business Days following
the Agent’s request for such Compliance Certificate. If
the Borrower fails to deliver a Compliance Certificate pursuant to
Section 9.1., the Applicable Margin shall equal the
percentages corresponding to Level 4 until the date of the delivery
of the required Compliance Certificate. Notwithstanding the
foregoing, for the period from the Effective Date through but
excluding the date on which the Agent first determines the
Applicable Margin as set forth above, the Applicable Margin shall
equal the percentages corresponding to Level 1. The
provisions of this definition are subject to
Section 2.2.(c).
2
“ Applicable Period
” has the meaning set forth in
Section 2.2.(c).
“ Appraisal ”
means an MAI certified appraisal of an applicable Borrowing Base
Property performed in accordance with FIRREA and the Agent’s
appraisal requirements by an appraiser selected and retained by the
Agent.
“ Arranger ”
means KeyBanc Capital Markets, together with its successors and
permitted assigns.
“ Assignment and Acceptance
Agreement ” means an Assignment and Acceptance Agreement
among a Lender, an Eligible Assignee and the Agent, substantially
in the form of Exhibit A.
“ Available Funding
Capacity ” shall mean for a particular Borrowing Base
Property the aggregate of (a) the Commitments, less
(b) the aggregate amount of the Borrowing Base Values for each
outstanding Borrowing Base Property Sub-Facility (other than the
subject Borrowing Base Property for which such Available Funding
Capacity is being determined), less (c) the aggregate
principal amount of any outstanding Loans under the subject
Borrowing Base Property.
“ Base Rate ”
means the per annum rate of interest equal to the greater of
(a) the Prime Rate or (b) the Federal Funds Rate plus
one-half of one percent (0.5%). Any change in the Base Rate
resulting from a change in the Prime Rate or the Federal Funds Rate
shall become effective as of 12:01 a.m. on the Business Day on
which each such change occurs. The Base Rate is a reference
rate used by the Lender acting as the Agent in determining interest
rates on certain loans and is not intended to be the lowest rate of
interest charged by the Lender acting as the Agent or any other
Lender on any extension of credit to any debtor.
“ Base Rate Loan
” means a Loan bearing interest at a rate based on the Base
Rate.
“ Borrower ” has
the meaning set forth in the introductory paragraph hereof and
shall include the Borrower’s successors and permitted
assigns.
“ Borrowing Base
” means an amount equal to the sum of the Borrowing Base
Values of the Borrowing Base Properties as determined and adjusted
from time to time in accordance with Section 5.3. A
Borrowing Base Property shall be excluded from calculations of the
Borrowing Base if at any time (a) the Agent shall cease to
have a perfected, first-priority security interest in all of the
outstanding Equity Interests of (i) the Property Owner that
owns such Borrowing Base Property or (ii) any Subsidiary of
the Borrower or the Parent (other than the Borrower) that owns,
directly or indirectly, any Equity Interests in such Property Owner
or (b) such Property ceases to be an Eligible
Property.
“ Borrowing Base
Certificate ” means a report in substantially the form of
Exhibit B, certified by the chief financial officer or
treasurer of the Parent, setting forth the calculations required to
establish the Borrowing Base Value for each Borrowing Base Property
and the
3
Borrowing Base for all Borrowing
Base Properties as of a specified date, all in form and detail
reasonably satisfactory to the Agent.
“ Borrowing Base
Property ” means an Eligible Property which the Agent or
the Requisite Lenders, as the case may be, have agreed to include
in calculations of the Borrowing Base pursuant to
Section 5.1.
“ Borrowing Base Property
Sub-Facility ” has the meaning given that term in
Section 2.1.(c).
“ Borrowing Base Value
” means, with respect to a Borrowing Base Property for any
date of determination, an amount, as determined by the Agent in its
sole discretion, equal to the lesser of (a) 85% of the total
budgeted cost of Construction of the applicable Improvements on the
Borrowing Base Property as set out in the Total Development Budget
(which Total Development Budget shall not exceed $50,000,000),
(b) 70% of the Proforma Value, and (c) the Maximum DSCR
Loan Amount, as such amount may be reduced by the Agent following
the Agent’s receipt and review of the Appraisal of such
Borrowing Base Property.
“ Business Day ”
means (a) any day other than a Saturday, Sunday or other day
on which banks in Cleveland, Ohio are authorized or required to
close and (b) with reference to a LIBOR Loan, any such day
that is also a day on which dealings in Dollar deposits are carried
out in the London interbank market.
“ Capitalized Lease
Obligation ” means obligations under a lease that is
required to be capitalized for financial reporting purposes in
accordance with GAAP. The amount of a Capitalized Lease
Obligation is the capitalized amount of such obligation determined
in accordance with GAAP.
“ Collateral ”
means any property directly or indirectly securing any of the
Obligations or any other obligation of a Person under or in respect
of any Loan Document to which it is a party, and includes, without
limitation, all “Pledged Collateral” under and as
defined in the Pledge Agreement.
“ Commitment ”
means, as to each Lender, such Lender’s obligation to make
Loans pursuant to Section 2.1., in an amount up to, but not
exceeding, the amount set forth for such Lender on Schedule I as
such Lender’s “Commitment Amount” or as set forth
in the applicable Assignment and Acceptance Agreement or as may be
increased from time to time pursuant to Section 2.11. or as
appropriate to reflect any assignments to or by such Lender
effected in accordance with Section 12.5.
“ Commitment Percentage
” means, as to each Lender, the ratio, expressed as a
percentage, of (a) the amount of such Lender’s
Commitment to (b) the aggregate amount of the Commitments of
all Lenders; provided, however, that if at the time of
determination the Commitments have terminated or been reduced to
zero, the “Commitment Percentage” of each Lender shall
be the Commitment Percentage of such Lender in effect immediately
prior to such termination or reduction.
4
“ Completion Date
” means, (a) for any Construction on a Borrowing Base
Property where the Improvements consist of a shell completion and
additional tenant improvements, the earlier of (i) the
completion date required by the Lease for such Improvements to be
constructed on the Borrowing Base Property, or (ii) the
completion date listed in the Construction Schedule or (b) for
any Construction on a Borrowing Base Property where the
Improvements consist solely of the shell completion of the relevant
office building, the completion date listed in the Construction
Schedule, each as approved by the Agent, as such Construction
Schedule may be modified pursuant to the terms of this Agreement;
provided that in no event shall any Completion Date be a date later
than a date ninety (90) days prior to the existing Termination
Date.
“ Compliance
Certificate ” has the meaning set forth in
Section 9.1.
“ Construction or
construction ” means the construction and equipping of
the Improvements in accordance with the Plans and Specifications to
complete the Borrowing Base Property’s shell completion, the
installation of all personal property, fixtures and equipment
required for the operation of the Borrowing Base Property and all
applicable tenant improvements required by the applicable
Leases.
“ Construction
Documents ” means, with respect to the Construction of
Improvements on each Borrowing Base Property, the General Contract,
the applicable site plan, Plans and Specifications and the
Construction Schedule.
“ Construction Schedule
” means a schedule satisfactory to the Agent, establishing a
timetable for completion of the Construction, showing, on a monthly
basis, the anticipated progress of the Construction and also
showing that the Improvements can be completed on or before the
applicable Completion Date.
“ Continue ”,
“ Continuation ” and “ Continued
” each refers to the continuation of a LIBOR Loan from one
Interest Period to another Interest Period pursuant to
Section 2.6.
“ Convert ”,
“ Conversion ” and “ Converted
” each refers to the conversion of a Loan of one Type into a
Loan of another Type pursuant to Section 2.7.
“ Credit Event ”
means any of the following: (a) the making (or deemed making)
of any Loan and (b) the Conversion of a Loan.
“ Date of Borrowing
” has the meaning set forth in
Section 2.1.(g).
“ Default ” means
any of the events specified in Section 10.1., whether or not
there has been satisfied any requirement for the giving of notice,
the lapse of time, or both.
“ Defaulting Lender
” has the meaning set forth in Section 3.11.
“ Dollars ” or
“ $ ” means the lawful currency of the United
States of America.
5
“ Draw Request ”
means a written request for any disbursement of Loan proceeds with
respect to a Borrowing Base Property, in the form attached hereto
as Exhibit C or in such other format as is acceptable to the
Agent and otherwise in compliance with
Section 2.1.(d).
“ Effective Date
” means the later of: (a) the Agreement Date; and
(b) the date on which all of the conditions precedent set
forth in Section 6.1. shall have been fulfilled or waived in
writing by the Requisite Lenders.
“ Eligible Assignee
” means any Person who is, at the time of determination:
(i) a Lender or an affiliate of a Lender; (ii) a
commercial bank, trust, trust company, insurance company,
investment bank or pension fund organized under the laws of the
United States of America, or any state thereof, and having total
assets in excess of $5,000,000,000; (iii) a savings and loan
association or savings bank organized under the laws of the United
States of America, or any state thereof, and having a tangible net
worth of at least $500,000,000; or (iv) a commercial bank
organized under the laws of any other country which is a member of
the Organization for Economic Cooperation and Development, or a
political subdivision of any such country, and having total assets
in excess of $10,000,000,000, provided that such bank is acting
through a branch or agency located in the United States of
America. If such Person is not currently a Lender or an
affiliate of a Lender, such Person’s (or its parent’s)
senior unsecured long term indebtedness must be rated BBB or higher
by S&P, Baa2 or higher by Moody’s, or the equivalent or
higher of either such rating by another rating agency reasonably
acceptable to the Agent.
“ Eligible Property
” means a Property which satisfies all of the following
requirements: (a) the Property is owned or leased under
a ground lease entirely by the Property Owner; (b) such
Property is zoned by the applicable Governmental Authority to have
a commercial office building; (c) such Property is located in
one of the 48 contiguous states of the United States of America or
in the District of Columbia and is located in one of
Borrower’s core markets or is part of the Borrower’s
tenant relationship driven development program; (d) none of
the Equity Interests issued by the Property Owner that owns such
Property or issued by any Subsidiary that owns, directly or
indirectly, any Equity Interests in such Property Owner is subject
to any Negative Pledge or any Lien other than Permitted Liens;
(e) subject to such exceptions as may be acceptable to the
Agent, the following actions may be taken without the need to
obtain the consent of any Person: (i) Liens may be
granted to the Agent for the benefit of the Lenders in all such
Equity Interests as security for the Obligations, (ii) the
Agent may exercise its remedies with respect to any such Lien while
an Event of Default exists, (iii) the Agent, any Lender or any
of their affiliates may become the owner of such Equity Interests,
and (iv) the Borrower, directly or indirectly through a
Subsidiary, has the right to sell, transfer or otherwise dispose of
any of such Equity Interests; (f) such Property is free of all
structural defects or major architectural deficiencies, title
defects, environmental conditions or other adverse matters except
for defects, deficiencies, conditions or other matters individually
or collectively which are not material to the profitable operation
of such Property; (g) the Property is in compliance with all
Environmental Laws; (h) the Total Development Budget for such
Property shall not exceed $50,000,000; and (i) such Property
is not subject to any Liens, except Permitted Liens.
6
“ Environmental Laws
” means any Applicable Law relating to environmental
protection or the manufacture, storage, remediation, disposal or
clean-up of Hazardous Materials including, without limitation, the
following: Clean Air Act, 42 U.S.C. § 7401 et seq.; Federal
Water Pollution Control Act, 33 U.S.C. § 1251 et seq.; Solid
Waste Disposal Act, as amended by the Resource Conservation and
Recovery Act, 42 U.S.C. § 6901 et seq.; Comprehensive
Environmental Response, Compensation and Liability Act, 42 U.S.C.
§ 9601 et seq.; National Environmental Policy Act, 42
U.S.C. § 4321 et seq.; regulations of the Environmental
Protection Agency and any applicable rule of common law and
any judicial interpretation thereof relating primarily to the
environment or Hazardous Materials.
“ Environmental
Proceedings ” means any environmental proceedings,
whether civil (including actions by private parties), criminal or
administrative proceedings, relating to the Borrowing Base
Property.
“ Equity Interest
” means, with respect to any Person, any share of capital
stock of (or other ownership or profit interests in) such Person,
any warrant, option or other right for the purchase or other
acquisition from such Person of any share of capital stock of (or
other ownership or profit interests in) such Person, any security
convertible into or exchangeable for any share of capital stock of
(or other ownership or profit interests in) such Person or warrant,
right or option for the purchase or other acquisition from such
Person of such shares (or such other interests), and any other
ownership or profit interest in such Person (including, without
limitation, partnership, member or trust interests therein),
whether voting or nonvoting, and whether or not such share,
warrant, option, right or other interest is authorized or otherwise
existing on any date of determination.
“ ERISA ” means
the Employee Retirement Income Security Act of 1974, as in effect
from time to time.
“ Event of Default
” means any of the events specified in Section 10.1.,
provided that any requirement for notice or lapse of time or any
other condition has been satisfied.
“ Existing Credit
Agreement ” means that certain Second Amended and
Restated Credit Agreement dated as October 1, 2007, by and
among the Parent, the Borrower, the lenders party thereto, KeyBank
National Association, as Agent, and the other parties
thereto.
“ Existing Credit Agreement
Default ” means any event or condition set forth in
Section 10.1 of the Existing Credit Agreement or such other
section or provision of the Existing Credit Agreement which relates
to Events of Default (as defined in such Existing Credit Agreement)
if such Existing Credit Agreement is amended and such amendments
are incorporated into this Agreement pursuant to
Section 12.19.
“ Existing Credit Agreement
Representations ” means the representations and
warranties set forth in Article VI of the Existing Credit
Agreement.
“ Extension Request
” has the meaning set forth in Section 2.9.
7
“ Federal Funds Rate
” means, for any day, the rate per annum (rounded upward to
the nearest 1/100th of 1%) equal to the weighted average of the
rates on overnight Federal funds transactions with members of the
Federal Reserve System arranged by Federal funds brokers on such
day, as published by the Federal Reserve Bank of New York on the
Business Day next succeeding such day, provided that (a) if
such day is not a Business Day, the Federal Funds Rate for such day
shall be such rate on such transactions on the next preceding
Business Day, and (b) if no such rate is so published on such
next succeeding Business Day, the Federal Funds Rate for such day
shall be the average rate quoted to the Agent by federal funds
dealers selected by the Agent on such day on such transaction as
determined by the Agent.
“ Fees ” means
the fees and commissions provided for or referred to in
Section 3.6. and any other fees payable by the Borrower
hereunder or under any other Loan Document.
“ FIRREA ” means
the Financial Institutions Reform, Recovery and Enforcement Act of
1989, as amended from time to time.
“ Funds from Operations
” shall have the meaning set forth in the Existing Credit
Agreement.
“ General Contract
” means the general contract(s) between the Borrower or
relevant Property Owner and General Contractor, pertaining to the
construction of all Improvements for a Borrowing Base
Property.
“ General Contractor
” means the general contractor for a Borrowing Base
Property.
“ GAAP ” means
generally accepted accounting principles set forth in the opinions
and pronouncements of the Accounting Principles Board of the
American Institute of Certified Public Accountants and statements
and pronouncements of the Financial Accounting Standards Board or
in such other statements by such other entity as may be approved by
a significant segment of the accounting profession, which are
applicable to the circumstances as of the date of
determination.
“ Governmental
Approvals ” means all authorizations, consents,
approvals, licenses and exemptions of, registrations and filings
with, and reports to, all Governmental Authorities, including,
without limitation, all consents, licenses and permits (including,
without limitation, any building permit, environmental permit,
utility permit, land use permit, wetland permit and any other
permits) and all other authorization or approvals required from any
Governmental Authority for the Construction in accordance with the
Plans and Specifications or required from any Governmental
Authority for the operation of the Improvements on any Borrowing
Base Property.
“ Governmental
Authority ” means any national, state or local government
(whether domestic or foreign), any political subdivision thereof or
any other governmental, quasi-governmental, judicial, public or
statutory instrumentality, authority, body, agency, bureau,
commission, board, department or other entity (including, without
limitation, the Federal Deposit
8
Insurance Corporation, the
Comptroller of the Currency or the Federal Reserve Board, any
central bank or any comparable authority) or any arbitrator with
authority to bind a party at law.
“ Guarantor ”
means any Person that is a party to the Guaranty as a
“Guarantor” and in any event shall include the Parent
and each existing or future Property Owner.
“ Guaranty ”
means the Guaranty to which each Guarantor is a party substantially
in the form of Exhibit D.
“ Hard Cost Advances
” has the meaning set forth in
Section 2.1.(f).
“ Hazardous Material
” means all or any of the following: (a) substances that
are defined or listed in, or otherwise classified pursuant to, any
applicable Environmental Laws as “hazardous
substances”, “hazardous materials”,
“hazardous wastes”, “toxic substances” or
any other formulation intended to define, list or classify
substances by reason of deleterious properties such as
ignitability, corrosivity, reactivity, carcinogenicity,
reproductive toxicity, “TCLP” toxicity or “EP
toxicity”; (b) oil, petroleum or petroleum derived
substances, natural gas, natural gas liquids or synthetic gas and
drilling fluids, produced waters and other wastes associated with
the exploration, development or production of crude oil, natural
gas or geothermal resources; (c) any flammable substances or
explosives or any radioactive materials; (d) asbestos in any
form; (e) toxic mold; and (f) electrical equipment which
contains any oil or dielectric fluid containing levels of
polychlorinated biphenyls in excess of fifty parts per
million.
“ Improvements ”
means the improvements more particularly described in each of the
Plans and Specifications for each Borrowing Base Property, and
offsite improvements and together with any existing improvements
not to be demolished.
“ Indebtedness ”
has the meaning given that term in the Existing Credit Agreement as
in effect on the Agreement Date.
“ Indemnified Costs
” has the meaning set forth in Section 12.9.
“ Indemnified Parties
” has the meaning set forth in Section 12.9.
“ Indemnity Proceeding
” has the meaning set forth in Section 12.9.
“ Interest Period
” means with respect to any LIBOR Loan, each period
commencing on the date such LIBOR Loan is made or the last day of
the next preceding Interest Period for such Loan and ending seven
(7) days, or 1, 2, 3 or 6 months thereafter, as the Borrower
may select in a Notice of Borrowing, Notice of Continuation or
Notice of Conversion, as the case may be, except that each Interest
Period (other than an Interest Period of 7-days’ duration)
that commences on the last Business Day of a calendar month shall
end on the last Business Day of the appropriate subsequent calendar
month. Notwithstanding the foregoing: (i) if any
Interest Period would otherwise end after the Termination Date,
such Interest Period shall end on the Termination Date; and
(ii) each Interest Period that would otherwise end on a day
which is not a Business Day shall end on the immediately following
Business Day (or, if such immediately
9
following Business Day falls in the
next calendar month, on the immediately preceding Business
Day).
“ Internal Revenue Code
” means the Internal Revenue Code of 1986, as
amended.
“ KeyBank ” means
KeyBank National Association, together with its successors and
assigns.
“ Leases ” means
a collective reference to all leases, subleases and occupancy
agreements affecting a Borrowing Base Property or any part thereof
existing as of the Agreement Date or executed thereafter and all
amendments, modifications or supplements thereto approved in
writing by the Agent, if required hereunder.
“ Lender ” means
each financial institution from time to time party hereto as a
“Lender”, together with its respective successors and
permitted assigns.
“ Lending Office
” means, for each Lender and for each Type of Loan, the
office of such Lender specified in such Lender’s
Administrative Questionnaire, or such other office of such Lender
of which such Lender may notify the Agent in writing from time to
time.
“ Level ” has the
meaning given that term in the definition of the term
“Applicable Margin.”
“ LIBOR ” means,
for any LIBOR Loan for any Interest Period therefor, the rate per
annum (rounded upwards, if necessary, to the nearest 1/100 of 1%)
appearing on Reuters Screen LIBOR01 Page (or any successor
page) as the London interbank offered rate for deposits in Dollars
at approximately 11:00 a.m. (London time) two
(2) Business Days prior to the first day of such Interest
Period for a term comparable to such Interest Period. If for
any reason such rate is not available, the term “LIBOR”
shall mean, for any LIBOR Loan for any Interest Period therefor,
the applicable British Bankers’ Association LIBOR rate for
deposits in Dollars as reported by any generally recognized
financial information service as of 11:00 a.m. (London time)
two (2) Business Days prior to the first day of such Interest
Period, and having a maturity equal to such Interest Period.
If for any reason none of the foregoing rates is available to the
Agent, LIBOR shall be, for any Interest Period, the rate determined
by the Agent to be the rate at which KeyBank or one of its
affiliate banks offers to place deposits in Dollars with first
class banks in the London interbank market at approximately
11:00 a.m. (London time) two (2) Business Days prior to
the first day of such Interest Period, in the approximate amount of
the relevant LIBOR Loan and having a maturity equal to such
Interest Period.
“ LIBOR Loan ”
means a Loan bearing interest at a rate based on LIBOR.
“ Lien ” as
applied to the property of any Person means: (a) any
security interest, encumbrance, mortgage, deed to secure debt, deed
of trust, assignment of leases and rents, pledge, lien, charge or
lease constituting a Capitalized Lease Obligation, conditional sale
or other title retention agreement, or other security title or
encumbrance of any kind in respect of any property of such Person,
or upon the income, rents or profits therefrom; (b) any
arrangement,
10
express or implied, under which any
property of such Person is transferred, sequestered or otherwise
identified for the purpose of subjecting the same to the payment of
Indebtedness or performance of any other obligation in priority to
the payment of the general, unsecured creditors of such Person;
(c) the filing of any financing statement under the Uniform
Commercial Code or its equivalent in any jurisdiction, other than
any precautionary filing not otherwise constituting or giving rise
to a Lien, including a financing statement filed (i) in
respect of a lease not constituting a Capitalized Lease Obligation
pursuant to Section 9-505 (or a successor provision) of the
Uniform Commercial Code or its equivalent as in effect in an
applicable jurisdiction or (ii) in connection with a sale or
other disposition of accounts or other assets not prohibited by
this Agreement in a transaction not otherwise constituting or
giving rise to a Lien; and (d) any agreement by such Person to
grant, give or otherwise convey any of the foregoing.
“ Loan ” means a
loan made by a Lender to the Borrower pursuant to
Section 2.1.
“ Loan Document ”
means this Agreement, each Note, the Guaranty, the Pledge Agreement
and each other document or instrument now or hereafter executed and
delivered by a Loan Party in connection with, pursuant to or
relating to this Agreement.
“ Loan Party ”
means the Borrower, the Parent, each Guarantor, each Pledgor and
each Property Owner and any New Loan Party.
“ Material Adverse
Effect ” means a materially adverse effect on
(a) the business, assets, liabilities, condition (financial or
otherwise), results of operations or business prospects of the
Parent and its Subsidiaries taken as a whole, (b) the ability
of the Borrower or any other Loan Party to perform its obligations
under any Loan Document to which it is a party, (c) the
validity or enforceability of any of the Loan Documents or the
Agent’s Lien in any of the Collateral, (d) the rights
and remedies of the Lenders and the Agent under any of the Loan
Documents or (e) the timely payment of the principal of or
interest on the Loans or other amounts payable in connection
therewith.
“ Material Subsidiary
” has the meaning given that term in the Existing Credit
Agreement.
“ Maximum DSCR Loan
Amount ” means the amount equal to (a) the Proforma
NOI for the applicable Borrowing Base Property divided by 1.25%,
divided by (b) the Mortgage Constant.
“ Moody’s ”
means Moody’s Investors Service, Inc., and its
successors.
“ Mortgage Constant
” means the greater of (a) a debt constant based on the
then current 10-year Treasury Bond as of the date of determination,
plus 2.00%, or (b) 7.00%, and a 25-year amortization
schedule.
“ Negative Pledge
” means, with respect to a given asset, any provision of a
document, instrument or agreement (other than any Loan Document)
which prohibits or proports to prohibit
11
the creation or assumption of any
Lien on such asset as security for Indebtedness of the Person
owning such asset or any other Person.
“ New Loan Parties
” has the meaning set forth in
Section 5.1.(d).
“ NOI ” means,
for any period, the gross income from operations of the applicable
Borrowing Base Property derived from arm’s length, market
rate rents from leases with unaffiliated third parties (unless
otherwise approved by the Agent), service fees or charges, less
operating expenses (such as cleaning, utilities, administrative,
landscaping, security and management expenses), repairs and
maintenance and reserves for replacements, and less fixed expenses
(such as insurance, real estate and other taxes). All
operating expenses shall be related to the applicable Borrowing
Base Property, shall be for services from arm’s length third
party transactions or equivalent to the same and shall exclude all
expenses for capital improvements and replacements, debt service
and depreciation or amortization of capital expenditures and other
similar non-cash items.
“ Note ” has the
meaning set forth in Section 2.8.(a).
“ Notice of Completion
” means a notice delivered to the Agent after all
Construction for Improvements for a particular Borrowing Base
Property has been completed and Borrower or Property Owner has
received all Governmental Approvals, including, if applicable, a
certificate of occupancy or similar permit, in order to operate and
lease the Improvements on the Borrowing Base Property.
“ Notice of
Continuation ” means a notice in the form of
Exhibit E to be delivered to the Agent pursuant to
Section 2.6. evidencing the Borrower’s request for the
Continuation of a LIBOR Loan.
“ Notice of Conversion
” means a notice in the form of Exhibit F to be
delivered to the Agent pursuant to Section 2.7. evidencing the
Borrower’s request for the Conversion of a Loan from one Type
to another Type.
“ Notice of Satisfaction of
Conditions Precedent ” has the meaning set forth in
Section 2.1.(g).
“ Obligations ”
means, individually and collectively: (a) the aggregate
principal balance of, and all accrued and unpaid interest on, all
Loans; and (b) all other indebtedness, liabilities,
obligations, covenants and duties of the Borrower and the other
Loan Parties owing to the Agent or any Lender of every kind, nature
and description, under or in respect of this Agreement or any of
the other Loan Documents, including, without limitation, the Fees
and indemnification obligations, whether direct or indirect,
absolute or contingent, due or not due, contractual or tortious,
liquidated or unliquidated, and whether or not evidenced by any
promissory note.
“ OFAC ” means
U.S. Department of the Treasury’s Office of Foreign Assets
Control and any successor Governmental Authority.
12
“ OFAC Review Process
” means that certain review process established by the Agent
to determine if any potential transferee of any interests in, or
any assignee of any portion of, a Commitment or Loan assigned by a
Lender is a party with whom the Agent and any Lender are restricted
from doing business under (i) the regulations of OFAC,
including any Sanctioned Person, or (ii) any other statute,
executive order or other governmental action or list (including the
September 24, 2001 Executive Order Blocking Property and
Prohibiting Transactions with Persons Who Commit, Threaten to
Commit, or Support Terrorism.
“ Operating Account
” has the meaning set forth in
Section 2.1.(i).
“ Parent ” has
the meaning set forth in the introductory paragraph hereof and
shall include the Parent’s successors and permitted
assigns.
“ Participant ”
has the meaning set forth in Section 12.5.(i).
“ Patriot Act Customer
Identification Process ” means that certain customer
identification and review process established by the Agent pursuant
to the requirements of 31 U.S.C. §5318(1) and 31 C.F.R.
§103.121 to verify the identity of all permitted transferees
of interests in the Borrower and any assignees of a portion of a
Commitment or Loan assigned by a Lender.
“ Permitted Liens
” means, as to any Person: (a) Liens securing
taxes, assessments and other charges or levies imposed by any
Governmental Authority (excluding any Lien imposed pursuant to any
of the provisions of ERISA or pursuant to any Environmental Laws)
or the claims of materialmen, mechanics, carriers, warehousemen or
landlords for labor, materials, supplies or rentals incurred in the
ordinary course of business, which are not at the time required to
be paid or discharged under Section 7.6. of the Existing
Credit Agreement; (b) Liens consisting of deposits or pledges
made, in the ordinary course of business, in connection with, or to
secure payment of, obligations under workers’ compensation,
unemployment insurance or similar Applicable Laws; (c) Liens
consisting of encumbrances in the nature of zoning restrictions,
easements, and rights or restrictions of record on the use of real
property, which do not materially detract from the value of such
property or impair the use thereof in the business of such Person;
(d) the rights of tenants under leases or subleases not
interfering with the ordinary conduct of business of such Person;
(e) all restrictions, covenants and other instruments of
record existing as of the date the initial Loan is made with
respect to any Borrowing Base Property Sub-Facility in question and
set forth in any Title Report furnished by Borrower and/or any
Property Owner to Agent in connection with such Borrowing Base
Property Sub-Facility; (f) any other easements or other
agreements necessary for the completion of Construction of
Improvements for a Borrowing Base Property; and (g) Liens in
favor of the Agent for the benefit of the Lenders.
“ Person ” means
an individual, corporation, partnership, limited liability company,
association, trust or unincorporated organization, or a government
or any agency or political subdivision thereof.
13
“ Plans and
Specifications ” means detailed plans and specifications
for the Improvements for a Borrowing Base Property, as modified
hereafter as expressly permitted by this Agreement.
“ Pledge Agreement
” means the Pledge Agreement executed by the Borrower and the
Pledgors in favor of the Agent and substantially in the form of
Exhibit G.
“ Pledgor ” means
any Subsidiary of the Borrower or the Parent that owns, directly or
indirectly, any Equity Interests of a Property Owner.
“ Post-Default Rate
” means, in respect of any principal of any Loan or any other
Obligation that is not paid when due (whether at stated maturity,
by acceleration, by optional or mandatory prepayment or otherwise),
a rate per annum equal to the Base Rate as in effect from time to
time plus the Applicable Margin for Base Rate Loans
plus two percent (2%).
“ Prime Rate ”
means the rate of interest per annum announced publicly by the
Lender then acting as the Agent as its prime rate from time to
time. The Prime Rate is not necessarily the best or the
lowest rate of interest offered by the Lender acting as the Agent
or any other Lender.
“ Principal Office
” means the office of the Agent located at 127 Public Square,
Cleveland, Ohio 44114, or such other office of the Agent as the
Agent may designate from time to time.
“ Proforma NOI ”
means the amount equal to the proforma NOI for the first stabilized
year derived from ten (10) year “as stabilized”
cash flow projections for the applicable Borrowing Base Property,
which are provided by the Borrower and which are acceptable to the
Agent.
“ Proforma Value
” means the sum determined by dividing the Proforma NOI for
the applicable Borrowing Base Property by 7.50%.
“ Project Equity
” means for a Borrowing Base Property the amount of equity to
be provided by Borrower and invested in the related Construction of
Improvements equal to the Total Development Budget for such
Borrowing Base Property (which Total Development Budget in any
event shall not be greater than $50,000,000) less the Borrowing
Base Value for such Borrowing Base Property. Such equity
shall be from sources other than the applicable Borrowing Base
Property Sub-Facility or any other Loan and shall be applied to the
costs of Construction for the applicable Improvements prior to any
disbursement under a Borrowing Base Property
Sub-Facility.
“ Property ”
means any parcel of real property owned or leased (in whole or in
part) by the Borrower or any Property Owner and the applicable
Improvements, if any, associated therewith.
“ Property Release
” has the meaning set forth in Section 5.2.
14
“ Property Owner
” means the Borrower or a Subsidiary of the Borrower which
owns a Borrowing Base Property.
“ Regulatory Change
” means, with respect to any Lender, any change effective
after the Agreement Date in Applicable Law (including without
limitation, Regulation D of the Board of Governors of the Federal
Reserve System) or the adoption or making after such date of any
interpretation, directive or request applying to a class of banks,
including such Lender, of or under any Applicable Law (whether or
not having the force of law and whether or not failure to comply
therewith would be unlawful) by any Governmental Authority or
monetary authority charged with the interpretation or
administration thereof or compliance by any Lender with any request
or directive regarding capital adequacy.
“ Requisite Lenders
” means, as of any date, Lenders having at least 66-2/3% of
the aggregate amount of the Commitments (not held by Defaulting
Lenders who are not entitled to vote), or, if the Commitments have
been terminated or reduced to zero, Lenders holding at least
66-2/3% of the principal amount of the aggregate outstanding Loans
(not held by Defaulting Lenders who are not entitled to
vote). Commitments and Loans held by Defaulting Lenders shall
be disregarded when determining the Requisite Lenders.
“ Responsible Officer
” means with respect to the Parent or any Subsidiary, the
chief executive officer, the chief operating officer, the chief
financial officer, or president of the Parent or such
Subsidiary.
“ Sanctioned Entity
” means (a) an agency of the government of, (b) an
organization directly or indirectly controlled by, or (c) a
Person resident in, in each case, a country that is subject to a
sanctions program identified on the list maintained by the OFAC and
published from time to time, as such program may be applicable to
such agency, organization or Person.
“ Sanctioned Person
” means a Person named on the list of Specially Designated
Nationals or Blocked Persons maintained by the OFAC as published
from time to time.
“ Soft Cost Advances
” has the meaning set forth in
Section 2.1.(f).
“ Solvent ”
means, when used with respect to any Person, that (a) the fair
value and the fair salable value of its assets (excluding any
Indebtedness due from any affiliate of such Person) are each in
excess of the fair valuation of its total liabilities (including
all contingent liabilities computed at the amount which, in light
of all the facts and circumstances existing at such time,
represents the amount that could reasonably be expected to become
an actual and matured liability); (b) such Person is able to
pay its debts or other obligations in the ordinary course as they
mature; and (c) such Person has capital not unreasonably small
to carry on its business and all business in which it proposes to
be engaged.
“ S&P ” means
Standard & Poor’s Rating Services, a division of The
McGraw-Hill Companies, Inc., and its successors.
15
“ Subsidiary ”
means, for any Person, any corporation, partnership or other entity
of which at least a majority of the securities or other ownership
interests having by the terms thereof ordinary voting power to
elect a majority of the board of directors or other persons
performing similar functions of such corporation, partnership or
other entity (without regard to the occurrence of any contingency)
is at the time directly or indirectly owned or controlled by such
Person or one or more Subsidiaries of such Person or by such Person
and one or more Subsidiaries of such Person, and shall include all
Persons the accounts of which are consolidated with those of such
Person pursuant to GAAP.
“ Supplemental Equity
Deposit ” means the amount, if any, required to be
deposited from time to time by the Borrower in connection with a
Borrowing Base Property pursuant to Section 2.1.(h) and
Section 8.5.(m).
“ Survey ” means
a plat of subdivision, if applicable, and, only to the extent
available, a survey prepared by a surveyor registered or licensed
to do business in the State in which the Property is
located.
“ Taxes ” has the
meaning given that term in Section 3.12.
“ Tenant ” means
the tenant under a Lease.
“ Termination Date
” means May 2, 2011, or such later date to which the
Termination Date may be extended pursuant to
Section 2.9.
“ Titled Agent ”
means, collectively and individually, each of the Arranger, the
Documentation Agent, the Syndication Agent and their respective
successors and permitted assigns.
“ Title Report ”
means a title insurance report covering the applicable Borrowing
Base Property or proposed Borrowing Base Property.
“ Total Asset Value
” has the meaning given that term in the Existing Credit
Agreement as in effect as of the Agreement Date.
“ Total Development
Budget ” means the applicable budget for a Borrowing Base
Property specifying all costs and expenses of every kind and nature
whatever to be incurred by the Borrower in connection with the
Construction of Improvements on such Borrowing Base Property prior
to the Termination Date. The Total Development Budget for a
Borrowing Base Property shall specify the amount of Project Equity
invested in a Borrowing Base Property.
“ Total Indebtedness
” has the meaning given that term in the Existing Credit
Agreement as in effect as of the Agreement Date.
“ Type ” with
respect to any Loan, refers to whether such Loan is a LIBOR Loan or
Base Rate Loan.
16
“ Unavoidable Delay
” means any delay in the Construction of the Improvements on
a Borrowing Base Property, caused by natural disaster, fire,
earthquake, floods, explosion, extraordinary adverse weather
conditions, inability to procure or a general shortage of labor,
equipment, facilities, energy, materials or supplies in the open
market, failure of transportation, strikes or lockouts for which
the Borrower has notified the Agent in writing.
“ Unused Amounts
” has the meaning set forth in Section 3.6.
“ Wholly Owned
Subsidiary ” means any Subsidiary of a Person in respect
of which all of the equity securities or other ownership interests
(other than, in the case of a corporation, directors’
qualifying shares) are at the time directly or indirectly owned or
controlled by such Person or one or more other Subsidiaries of such
Person or by such Person and one or more other Subsidiaries of such
Person.
Section 1.2.
General; References to
Times.
Unless otherwise indicated, all
accounting terms, ratios and measurements shall be interpreted or
determined in accordance with GAAP; provided that, if at any time
any change in GAAP would affect the computation of any financial
ratio or requirement set forth in any Loan Document, and either the
Borrower or the Requisite Lenders shall so request, the Agent, the
Lenders and the Borrower shall negotiate in good faith to amend
such ratio or requirement to preserve the original intent thereof
in light of such change in GAAP (subject to the approval of the
Requisite Lenders); provided further that, until so amended,
(i) such ratio or requirement shall continue to be computed in
accordance with GAAP prior to such change therein and (ii) the
Parent shall provide to the Agent and the Lenders financial
statements and other documents required under this Agreement or as
reasonably requested hereunder setting forth a reconciliation
between calculations of such ratio or requirement made before and
after giving effect to such change in GAAP. References in
this Agreement to “Sections”, “Articles”,
“Exhibits” and “Schedules” are to sections,
articles, exhibits and schedules herein and hereto unless otherwise
indicated. References in this Agreement to any document,
instrument or agreement (a) shall include all exhibits,
schedules and other attachments thereto, (b) shall include all
documents, instruments or agreements issued or executed in
replacement thereof, to the extent permitted hereby and
(c) shall mean such document, instrument or agreement, or
replacement or predecessor thereto, as amended, supplemented,
restated or otherwise modified as of the date of this Agreement and
from time to time thereafter to the extent not prohibited hereby
and in effect at any given time; provided, however, to the extent
any amendment, supplement, restatement or other modification of the
Existing Credit Agreement affects any of the definitions,
representations, covenants or other provisions thereof incorporated
in this Agreement by reference, such amendment, supplement,
restatement or other modification shall only be given effect
hereunder as provided in Section 12.19. Wherever from
the context it appears appropriate, each term stated in either the
singular or plural shall include the singular and plural, and
pronouns stated in the masculine, feminine or neuter gender shall
include the masculine, the feminine and the neuter. Unless
explicitly set forth to the contrary, a reference to
“Subsidiary” means a Subsidiary of the Parent or a
Subsidiary of such Subsidiary and a reference to an
“Affiliate” means a reference to an Affiliate of the
Parent. Titles and captions of Articles, Sections,
subsections and clauses in this Agreement are for convenience only,
and neither limit
17
nor amplify the provisions of this
Agreement. Unless otherwise indicated, all references to time
are references to Cleveland, Ohio time.
ARTICLE II. CREDIT
FACILITY
Section 2.1.
Loans.
(a)
Generally . Subject to the terms and conditions
hereof, during the period from the Effective Date to but excluding
the Termination Date, each Lender severally and not jointly agrees
to make Loans to the Borrower in an aggregate principal amount at
any one time outstanding up to, but not exceeding, the amount of
such Lender’s Commitment. Subject to the terms and
conditions of this Agreement, during the period from the Effective
Date to but excluding the Termination Date, the Borrower may
borrow, repay and reborrow Loans hereunder.
(b)
Purpose of Loan
. To the extent provided in
the Total Development Budget, Loans made pursuant to this Agreement
shall only be used to reimburse the Borrower for the actual costs
incurred or expended for the Construction of Improvements on the
Borrowing Base Properties included in the Borrowing Base, as
approved by the Agent.
(c)
Borrowing Base Property
Facilities .
Subject to the terms and conditions hereof, during the period from
the Effective Date to but excluding the Termination Date, the
funding of a construction project for a particular Borrowing Base
Property shall be a distinct construction loan facility for such
particular Borrowing Base Property allocated from the total
Commitments available (each such facility, a “ Borrowing
Base Property Sub-Facility ”); provided that in no event
shall the aggregate of the Loans provided for any such Borrowing
Base Property Sub-Facility exceed the applicable Borrowing Base
Value for such Borrowing Base Property; and, provided further, that
in no event shall the amount available under a Borrowing Base
Property Sub-Facility for draws exceed the Available Funding
Capacity. A Lender’s obligation to fund a Borrowing
Base Property Sub-Facility shall be several (and not joint and
several) and shall be limited to its proportionate share according
to the amount of its Commitment pursuant to
Section 3.2.
(d)
Requesting Loans
. Provided that the applicable
Borrowing Base Property is part of the Borrowing Base pursuant to
Article V., for each Loan for such particular Borrowing Base
Property Sub-Facility, the Borrower shall submit a completed Draw
Request to the Agent, setting forth the identification of the
Borrowing Base Property, the amount of Loan proceeds desired, the
Type of Loan desired, the disbursement instructions, the
information required for any Hard Cost Advances or Soft Cost
Advances, and the applicable conditions precedent in accordance
with Article VI., together with such certification and
additional information as the Agent may reasonably require, signed
by a duly authorized representative of the Borrower. Such
Draw Request shall be submitted not less than five
(5) Business Days prior to the date on which the requested
Loan is to be made. The Agent will transmit a copy of the
Draw Request to each Lender no later than five (5) Business
Days after delivering the Notice of Satisfaction of Conditions
Precedent. Each Draw Request shall be irrevocable once given
and binding on the Borrower.
18
(e)
Frequency of Draw Requests and
Advances . For each
Borrowing Base Property, the Borrower may only submit one Draw
Request to the Agent each calendar month. For each Borrowing
Base Property Sub-Facility, Loans shall be made no more frequently
than monthly.
(f)
Types of Advances
.
(i)
Hard Cost Advances
. Advances by the Lenders for
the payment of any sums due under any Construction Document, any
subcontract or for any other labor performed and/or materials
supplied with respect to the direct costs of the construction of
all or any portion of the Improvements (collectively, “
Hard Cost Advances ”) shall be made on requisitions in
a form approved by the Agent, which requisitions must be signed by
the chief financial officer or treasurer of the Parent and must be
approved by or on behalf of the Agent. The Borrower shall
submit with each requisition a statement that the work completed to
the date of such requisition is of quality consistent with the
Plans and Specifications. Disbursements for Hard Cost
Advances shall not exceed ninety-five percent (95%) of each
requisition for direct construction costs. Subject to the
applicable conditions precedent contained in Article VI., the
final holdback of direct construction costs with respect to each
Borrowing Base Property shall be available for requisition by the
Borrower upon the completion of the Construction of such
Improvements for such Borrowing Base Property; provided, however,
that so long as no Event of Default shall have occurred and be
continuing, upon the election of the Borrower to fully advance on a
completed subcontract, the Lenders shall fully disburse the
retained amounts under such subcontract upon completion of the work
to be performed under such subcontract in accordance with the Plans
and Specifications.
(ii)
Soft Cost Advances
. Requisitions for the payment
of settlement expenses, interest and all other indirect expenses
under a Borrowing Base Property Sub-Facility and included in the
applicable Total Development Budget (collectively, “ Soft
Cost Advances ”) shall be signed by the chief financial
officer or treasurer of the Parent, and in the event that the same
shall individually exceed the sum of $250,000, must be supported by
invoices, receipts for payment and such other detail as the agent
may reasonably request to assure that amounts requisitioned are to
be used to reimburse the Borrower for costs previously paid by the
Borrower and/or applicable Property Owner or to pay costs incurred
by the Borrower and/or the applicable Property Owner which are due
and owing. Soft Cost Advances shall be in an amount equal to
one hundred percent (100%) of the approved requisition.
(g)
Disbursements of Loan
Proceeds . Upon the
satisfaction of all applicable conditions precedent to the making
of a Loan set forth in Article VI., with respect to Loans to
be made after the Effective Date, the Agent shall deliver a notice
of such satisfaction to the Lenders (“ Notice of
Satisfaction of Conditions Precedent ”). No later
than 1:00 p.m. (i) in the case of Base Rate Loans, on the
date that is one Business Day after receipt of such Notice of
Satisfaction of Conditions Precedent (provided if such date is not
a Business Day, the next succeeding Business Day) or (ii) in
the case of LIBOR Loans, on the date that is three
(3) Business Days after receipt of such Notice of Satisfaction
of Conditions Precedent (provided if such date is not a Business
Day, the next succeeding Business Day) (each a “ Date of
Borrowing ”) or no later than 1:00 p.m. on the
Effective Date for Loans to be made on such date, each Lender will
make
19
available for the account of its
applicable Lending Office to the Agent at the Principal Office, in
immediately available funds, the proceeds of the Loan to be made by
such Lender. With respect to Loans to be made after the
Effective Date, unless the Agent shall have been notified by any
Lender prior to the specified Date of Borrowing that such Lender
does not intend to make available to the Agent the Loan to be made
by such Lender on such date, the Agent may assume that such Lender
will make the proceeds of such Loan available to the Agent on the
applicable Date of Borrowing and the Agent may (but shall not be
obligated to), in reliance upon such assumption, make available to
the Borrower the amount of such Loan to be provided by such
Lender. Subject to terms and conditions hereof, the Agent
will make the proceeds of such borrowing available to the Borrower
no later than 2:00 p.m. on the applicable Date of Borrowing
and at the account specified by the Borrower in such Draw Request
or, pursuant to Section 2.1.(i)., to the Operating
Account.
(h)
Borrowing Base Property Equity
and Supplemental Equity Deposits . As to each Borrowing Base Property and
the Construction of the related Improvements, the Borrower shall
contribute the Project Equity for such Construction of the
Improvements, and such Project Equity shall be from sources other
than the applicable Borrowing Base Property Sub-Facility, or any
other Loan and shall be applied to the costs of Construction for
the applicable Improvements prior to any disbursement under a
Borrowing Base Property Sub-Facility. The Borrower’s
equity must be disbursed prior to the first disbursement of any
applicable Loan proceeds, and used to pay direct Borrowing Base
Property costs with evidence of payment delivered to the Agent
prior to the disbursement of the Loan proceeds related to such
Borrowing Base Property Sub-Facility. If the Agent at any
time determines that the undisbursed portion of such Borrowing Base
Property Sub-Facility, plus the amount of all Project Equity and
other equity investments made or scheduled to be made by the
Borrower are not sufficient to complete fully the Improvements in
accordance with the applicable Plans and Specifications, the Agent
shall have the option of requiring the Borrower to deposit with the
Lender additional funds from some other source (or submit evidence
to the Agent of equity investments previously made), in amounts
sufficient to cover the resulting deficit before the Lenders will
disburse any further Loan proceeds with respect to that particular
Borrowing Base Property. Such Supplemental Equity Deposit
shall be disbursed to the Borrower as construction progresses in
accordance with this Agreement before proceeds of any Loans are
disbursed with respect to that particular Borrowing Base
Property.
(i)
Operating Account
. After the occurrence of a
Default or an Event of Default (but without impairing any
Lender’s right under Section 6.2), the Agent may at its
election disburse funds directly to a special bank account
maintained at the Agent, on behalf of the Lenders (the “
Operating Account ”), or at its option and at such
Borrower’s cost, disburse funds through a title company, or
to contractors, subcontractors, materialmen or laborers directly,
but any such election shall not prevent the Agent from making
subsequent disbursements in a different manner or through or to a
different party. The Loan proceeds shall be deemed to be
disbursed to the Borrower from the date of deposit into the
Operating Account, the escrow of the title company or directly to
any contractor, subcontractor, materialmen or laborer, and interest
shall accrue on those proceeds from that date (and with respect to
a disbursement to an escrow of a title company, interest shall
accrue on the proceeds from the date of delivery to such escrow
regardless of the date such proceeds are released by the title
company).
20
(j)
No Implied Waivers
. The making of any Loan for a
Borrowing Base Property shall not be deemed a waiver of the
Agent’s or any Lender’s rights hereunder with respect
to any further or future Loan for such Borrowing Base Property, nor
shall it be construed to be a waiver of any of the conditions
precedent to the Lenders’ obligations to make further or
future Loans to such Borrowing Base Property.
Section 2.2.
Rates and Payment of Interest on
Loans.
(a)
Rates . The Borrower promises to pay to the
Agent for the account of each Lender interest on the unpaid
principal amount of each Loan made by such Lender for the period
from and including the date of the making of such Loan to but
excluding the date such Loan shall be paid in full, at the
following per annum rates:
(i)
during such periods as such Loan is
a Base Rate Loan, at the Base Rate (as in effect from time to time)
plus the Applicable Margin for Base Rate Loans; and
(ii)
during such periods as such Loan is
a LIBOR Loan, at Adjusted LIBOR for such Loan for the Interest
Period therefor plus the Applicable Margin for LIBOR
Loans.
Notwithstanding the foregoing,
during the continuance of an Event of Default, the Borrower shall
pay to the Agent for the account of each Lender interest at the
Post-Default Rate on the outstanding principal amount of each Loan
made by such Lender, and on any other amount payable by the
Borrower hereunder or under the Note held by such Lender to or for
the account of such Lender (including without limitation, accrued
but unpaid interest to the extent permitted under Applicable
Law).
(b)
Payment of Interest
. Accrued and unpaid interest
on each Loan shall be payable (i) in the case of a Base Rate
Loan, monthly in arrears on the first day of each calendar month,
(ii) in the case of a LIBOR Loan, in arrears on the last day
of each Interest Period therefor, and, if such Interest Period is
longer than ninety (90) days, at three-month intervals following
the first day of such Interest Period, and (iii) in the case
of any Loan, in arrears upon the payment, prepayment or
Continuation thereof or the Conversion of such Loan to a Loan of
another Type (but only on the principal amount so paid, prepaid,
Continued or Converted). Interest payable at the Post-Default
Rate shall be payable from time to time on demand. Promptly
after the determination of any interest rate provided for herein or
any change therein, the Agent shall give notice thereof to the
Lenders to which such interest is payable and to the
Borrower. All determinations by the Agent of an interest rate
hereunder shall be conclusive and binding on the Lenders and the
Borrower for all purposes, absent manifest error.
(c)
Inaccurate Financial Statements
or Compliance Certificates . If any financial statement or Compliance
Certificate delivered pursuant to Section 9.1. is shown to be
inaccurate as a result of any fraudulent act or omission of a Loan
Party or its agents or representatives acting on behalf of such
Loan Party (regardless of whether this Agreement is in effect when
such inaccuracy is discovered), and such inaccuracy, if corrected,
would have led to the application of a higher Applicable Margin for
any period (an “ Applicable Period ”) than the
Applicable Margin applied for such Applicable Period, then
(i) the Borrower shall immediately deliver to the
Agent
21
a correct Compliance Certificate for
such Applicable Period and (ii) the Borrower shall immediately
pay to the Agent for the account of the Lenders the additional
accrued additional interest owing calculated based on such higher
Applicable Margin for such Applicable Period, which payment shall
be promptly applied by the Agent in accordance with
Section 3.2. This subsection shall not in any way limit the
rights of the Agent and Lenders (x) with respect to the last
sentence of the immediately preceding subsection (a) or
(y) under Article X.
Section 2.3.
Number of Interest
Periods.
There may be no more than eight
(8) different Interest Periods for LIBOR Loans outstanding at
the same time (for which purpose Interest Periods described in the
definition of the term “Interest Period” shall be
deemed to be different Interest Periods even if they are
coterminous).
Section 2.4.
Repayment of Loans.
The Borrower shall repay the entire
outstanding principal amount of, and all accrued but unpaid
interest on, the Loans and all other sums due under this Agreement
on the Termination Date.
Section 2.5.
Prepayments.
(a)
Optional . Subject to Section 4.4., the
Borrower may prepay any Loan, in whole or in part, at any time
without premium or penalty. The Borrower shall give the Agent
at least one (1) Business Day’s prior written notice of
the prepayment of any Loan.
(b)
Mandatory .
(i)
If at any time the aggregate
principal amount of all outstanding Loans exceeds the Borrowing
Base, the Borrower shall within five (5) Business Days of the
Borrower obtaining knowledge of the occurrence of any such excess
eliminate such excess.
(ii)
If at any time a Borrowing Base
Property remains in the Borrowing Base for more than twelve (12)
months after the shell completion of the Improvements for such
Borrowing Base Property is complete, pursuant to the applicable
Plans and Specifications and as determined by the Agent, then the
Agent may, in its sole discretion, obtain an “as
stabilized” Appraisal at the Borrower’s cost for such
Borrowing Base Property. If, based on such “as
stabilized” Appraisal, the Agent determines that the
loan-to-value ratio expressed as a percentage for such Borrowing
Base Property Sub-Facility is greater than seventy percent (70%),
then the Borrower shall pay to the Agent within fifteen (15)
Business Days of notice from the Agent the amounts required to make
the loan-to-value ratio expressed as a percentage for such
Borrowing Base Property Sub-Facility no greater than seventy
percent (70%).
If such excess identified in either
(i) and/or (ii) above is not eliminated within such time
period provided, then the entire outstanding principal balance of
all Loans and all other Obligations
22
shall be immediately due and payable
in full. All payments under this subsection (b) shall be
applied to pay all amounts of principal outstanding on the Loans
pro rata in accordance with Section 3.2. If the Borrower
is required to pay any outstanding LIBOR Loans by reason of this
Section prior to the end of the applicable Interest Period
therefor, the Borrower shall pay all amounts due under
Section 4.4.
Section 2.6.
Continuation.
So long as no Event of Default shall
exist, the Borrower may on any Business Day, with respect to any
LIBOR Loan, elect to maintain such LIBOR Loan or any portion
thereof as a LIBOR Loan by selecting a new Interest Period for such
LIBOR Loan. Each new Interest Period selected under this
Section shall commence on the last day of the immediately
preceding Interest Period. Each selection of a new Interest
Period shall be made by the Borrower giving to the Agent a Notice
of Continuation not later than 11:00 a.m. on the third
Business Day prior to the date of any such Continuation. Such
notice by the Borrower of a Continuation shall be by telephone or
telecopy, confirmed immediately in writing if by telephone, in the
form of a Notice of Continuation, specifying (a) the proposed
date of such Continuation, (b) the LIBOR Loans and portions
thereof subject to such Continuation and (c) the duration of
the selected Interest Period, all of which shall be specified in
such manner as is necessary to comply with all limitations on Loans
outstanding hereunder. Each Notice of Continuation shall be
irrevocable by and binding on the Borrower once given.
Promptly after receipt of a Notice of Continuation, the Agent shall
notify each Lender by telecopy, or other similar form of
transmission, of the proposed Continuation. If the Borrower
shall fail to select in a timely manner a new Interest Period for
any LIBOR Loan in accordance with this Section, or if an Event of
Default shall exist, such Loan will automatically, on the last day
of the current Interest Period therefor, Convert into a Base Rate
Loan notwithstanding the first sentence of Section 2.7. or the
Borrower’s failure to comply with any of the terms of such
Section.
Section 2.7.
Conversion.
The Borrower may on any Business
Day, upon the Borrower’s giving of a Notice of Conversion to
the Agent, Convert all or a portion of a Loan of one Type into a
Loan of another Type; provided, however, a Base Rate Loan may not
be Converted to a LIBOR Loan if an Event of Default shall
exist. Any Conversion of a LIBOR Loan into a Base Rate Loan
shall be made on, and only on, the last day of an Interest Period
for such LIBOR Loan and, upon Conversion of a Base Rate Loan into a
LIBOR Loan, the Borrower shall pay accrued interest to the date of
Conversion on the principal amount so Converted. Each such
Notice of Conversion shall be given not later than 11:00 a.m.
on the Business Day prior to the date of any proposed Conversion
into Base Rate Loans and on the third Business Day prior to the
date of any proposed Conversion into LIBOR Loans. Promptly
after receipt of a Notice of Conversion, the Agent shall notify
each Lender by telecopy, or other similar form of transmission, of
the proposed Conversion. Subject to the restrictions
specified above, each Notice of Conversion shall be by telephone
(confirmed immediately in writing) or telecopy in the form of a
Notice of Conversion specifying (a) the requested date of such
Conversion, (b) the Type of Loan to be Converted, (c) the
portion of such Type of Loan to be Converted, (d) the Type of
Loan such Loan is to be Converted into and (e) if such
Conversion is into a LIBOR Loan, the requested duration of the
Interest Period of such
23
Loan. Each Notice of
Conversion shall be irrevocable by and binding on the Borrower once
given.
Section 2.8.
Notes.
(a)
Notes . The Borrower shall execute and deliver
on the Effective Date to each Lender requesting the same (or to the
Agent for that Lender) a promissory note (each a “
Note ”) substantially in the form of Exhibit H,
payable to the order of such Lender to evidence its
Commitment. Any Lender not receiving a Note may request at
any time that the Borrower issue it such Note on the terms set
forth herein, and the Borrower agrees to issue such Note promptly
upon the request of a Lender or the Agent for such Lender.
The Notes and the Obligations evidenced thereby shall be governed
by, subject to and benefit from all of the terms and conditions of
this Agreement and the other Loan Documents and shall be secured by
the Collateral. Lenders shall not require separate promissory
notes for each Borrowing Base Property Sub-Facility.
(b)
Records . The date, amount, interest rate, Type
and duration of Interest Periods (if applicable) of each Loan made
by each Lender to the Borrower, and each payment made on account of
the principal thereof, shall be recorded by such Lender on its
books and such entries shall be binding on the Borrower, absent
manifest error; provided, however, that the failure of a Lender to
make any such record shall not affect the obligations of the
Borrower under any of the Loan Documents.
(c)
Lost, Stolen, Destroyed or
Mutilated Notes . Upon
receipt by the Borrower of (i) written notice from a Lender
that the Note of such Lender has been lost, stolen, destroyed or
mutilated, and (ii) (A) in the case of loss, theft or
destruction, an unsecured agreement of indemnity from such Lender
in form reasonably satisfactory to the Borrower, or (B) in the
case of mutilation, upon surrender and cancellation of such Note,
the Borrower shall at its own expense execute and deliver to such
Lender a new Note dated the date of such lost, stolen, destroyed or
mutilated Note.
Section 2.9.
Extension of Termination
Date.
The Borrower shall have the right,
exercisable one time, to extend the Termination Date by one
year. The Borrower may exercise such right only by executing
and delivering to the Agent at least ninety (90) days but not more
than one hundred eighty (180) days prior to the current Termination
Date, a written request for such extension (an “ Extension
Request ”). The Agent shall forward to each Lender
a copy of the Extension Request delivered to the Agent promptly
upon receipt thereof. Subject to satisfaction of the
following conditions, the Termination Date shall be extended for
one year: (a) immediately prior to such extension and
immediately after giving effect thereto, (i) no Default or
Event of Default shall exist and (ii) the representations and
warranties made or deemed made by the Borrower and each other Loan
Party in the Loan Documents to which any of them is a party, shall
be true and correct on and as of the date of such extension with
the same force and effect as if made on and as of such date except
to the extent that such representations and warranties expressly
relate solely to an earlier date (in which case such
representations and warranties shall have been true and accurate on
and as of such earlier date), and (b) the Borrower shall have
paid the Fees payable under Section 3.6.(b).
24
Section 2.10.
Amount Limitations.
Notwithstanding any other term of
this Agreement or any other Loan Document, no Lender shall be
required to make a Loan if immediately after the making of such
Loan the aggregate principal amount of all outstanding Loans would
exceed the lesser of (a) the aggregate amount of the
Commitments at such time or (b) Borrowing Base.
Section 2.11.
Increase of Commitments.
With the prior consent of the Agent,
such consent not to be unreasonably withheld, conditioned or
delayed, the Borrower shall have the right at any time prior to the
date one year prior to the Termination Date (without giving effect
to any extension thereof pursuant to Section 2.9.) to request
an increase in the aggregate amount of the Commitments (provided
that after giving effect to any increases in the Commitments
pursuant to this Section, the aggregate amount of the Commitments
may not exceed $325,000,000) by providing written notice to the
Agent, which notice shall be irrevocable once given and shall be
forwarded by the Agent to each Lender; provided, however, the
Borrower shall not have the right to make more than two
(2) requests for increases in the aggregate amount of the
Commitments during the term of this Agreement. Each such
increase in the Commitments must be in an aggregate minimum amount
of $25,000,000 and integral multiples of $5,000,000 in excess
thereof. No Lender shall be required to increase its
Commitment and any new Lender becoming a party to this Agreement in
connection with any such requested increase must be an Eligible
Assignee. If a new Lender becomes a party to this Agreement,
or if any existing Lender agrees to increase its Commitment, such
Lender shall on the date it becomes a Lender hereunder (or
increases its Commitment, in the case of an existing Lender) (and
as a condition thereto) purchase from the other Lenders its
Commitment Percentage (or in the case of an existing Lender,
increase the amount of its Commitment Percentage), in each case, as
determined after giving effect to the increase of Commitments, of
any outstanding Loans, by making available to the Agent for the
account of such other Lenders at the Principal Office, in same day
funds, an amount equal to the sum of (A) the portion of the
outstanding principal amount of such Loans to be purchased by such
Lender plus (B) interest accrued and unpaid to and as of such
date on such portion of the outstanding principal amount of such
Loans. The Borrower shall pay to the Lenders amounts payable,
if any, to such Lenders under Section 4.4. as a result of the
prepayment of any such Loans. No increase of the Commitments
may be effected under this Section if (x) a Default or
Event of Default shall be in existence on the effective date of
such increase or (y) any representation or warranty made or
deemed made by the Borrower or any other Loan Party in any Loan
Document to which any such Loan Party is a party is not (or would
not be) true or correct on the effective date of such increase and
after giving effect thereto (except for representations or
warranties which expressly relate solely to an earlier date).
In connection with any increase in the aggregate amount of the
Commitments pursuant to this subsection, (a) any Lender
becoming a party hereto shall execute such documents and agreements
as the Agent may reasonably request and (b) the Borrower shall
make appropriate arrangements so that each new Lender, and any
existing Lender increasing its Commitment, receives a new or
replacement Note, as appropriate, in the amount of such
Lender’s Commitment within five (5) Business Days of the
effectiveness of the applicable increase in the aggregate amount of
Commitments.
25
ARTICLE III. PAYMENTS, FEES
AND OTHER GENERAL PROVISIONS
Section 3.1.
Payments.
Except to the extent otherwise
provided herein, all payments of principal, interest and other
amounts to be made by the Borrower under this Agreement or any
other Loan Document shall be made in Dollars, in immediately
available funds, without deduction, set-off or counterclaim, to the
Agent at its Principal Office, not later than 2:00 p.m. on the
date on which such payment shall become due (each such payment made
after such time on such due date to be deemed to have been made on
the next succeeding Business Day). Subject to
Section 10.4., the Borrower may, at the time of making each
payment under this Agreement or any Note, specify to the Agent the
amounts payable by the Borrower hereunder to which such payment is
to be applied. Each payment received by the Agent for the
account of a Lender under this Agreement or any Note shall be paid
to such Lender at the applicable Lending Office of such Lender no
later than 4:00 p.m. on the date of receipt. If the
Agent fails to pay such amount to a Lender as provided in the
previous sentence, the Agent shall pay interest on such amount
until paid at a rate per annum equal to the Federal Funds Rate from
time to time in effect. If the due date of any payment under
this Agreement or any other Loan Document would otherwise fall on a
day which is not a Business Day such date shall be extended to the
next succeeding Business Day and interest shall be payable for the
period of such extension.
Section 3.2.
Pro Rata Treatment.
Except to the extent otherwise
provided herein: (a) each borrowing of Loans from the
Lenders under Section 2.1. shall be made from the Lenders, and
each payment of the Fees under Sections 3.6.(a) and
(b) shall be made for the account of the Lenders, pro rata
according to the amounts of their respective Commitments;
(b) each payment or prepayment of principal of Loans by the
Borrower shall be made for the account of the Lenders pro rata in
accordance with the respective unpaid principal amounts of the
Loans held by them; (c) each payment of interest on Loans by
the Borrower shall be made for the account of the Lenders pro rata
in accordance with the amounts of interest on such Loans then due
and payable to the respective Lenders; and (d) the making,
Conversion and Continuation of Loans of a particular Type (other
than Conversions provided for by Section 4.5.) shall be made
pro rata among the Lenders according to the amounts of their
respective Commitments (in the case of making of Loans) or their
respective Loans (in the case of Conversions and Continuations of
Loans) and the then current Interest Period for each Lender’s
portion of each Loan of such Type shall be coterminous.
Section 3.3.
Sharing of Payments,
Etc.
If a Lender shall obtain payment of
any principal of, or interest on, any Loan made by it to the
Borrower under this Agreement, or shall obtain payment on any other
Obligation owing by the Borrower or a Loan Party through the
exercise of any right of set-off, banker’s lien or
counterclaim or similar right or otherwise or through voluntary
prepayments directly to a Lender or other payments made by the
Borrower to a Lender not in accordance with the terms of this
Agreement and such payment should be distributed to the Lenders pro
rata in accordance with Section 3.2. or Section 10.4., as
applicable, such Lender shall promptly purchase from the other
Lenders participations in (or, if and to the extent specified by
such Lender, direct interests in) the
26
Loans made by the other Lenders or
other Obligations owed to such other Lenders in such amounts, and
make such other adjustments from time to time as shall be
equitable, to the end that all the Lenders shall share the benefit
of such payment (net of any reasonable expenses which may be
incurred by such Lender in obtaining or preserving such benefit)
pro rata in accordance with Section 3.2. or
Section 10.4., as applicable. To such end, all the
Lenders shall make appropriate adjustments among themselves (by the
resale of participations sold or otherwise) if such payment is
rescinded or must otherwise be restored. The Borrower agrees
that any Lender so purchasing a participation (or direct interest)
in the Loans or other Obligations owed to such other Lenders may
exercise all rights of set-off, banker’s lien, counterclaim
or similar rights with respect to such participation as fully as if
such Lender were a direct holder of Loans in the amount of such
participation. Nothing contained herein shall require any
Lender to exercise any such right or shall affect the right of any
Lender to exercise, and retain the benefits of exercising, any such
right with respect to any other indebtedness or obligation of the
Borrower.
Section 3.4.
Several Obligations.
No Lender, Agent, Arranger,
Syndication Agent or Documentation Agent shall be responsible for
the failure of any other Lender to make a Loan or to perform any
other obligation to be made or performed by such other Lender
hereunder, and the failure of any Lender to make a Loan or to
perform any other obligation to be made or performed by it
hereunder shall not relieve the obligation of any other Lender to
make any Loan or to perform any other obligation to be made or
performed by such other Lender.
Section 3.5.
Minimum Amounts.
(a)
Borrowings and
Conversions . For
the initial Loan in any Borrowing Base Property Sub-Facility, each
such borrowing of LIBOR Loans shall be in an aggregate minimum
amount of $500,000. Each Conversion of LIBOR Loans shall be
in an aggregate minimum amount of $500,000.
(b)
Prepayments
. Each voluntary prepayment of
Loans shall be in an aggregate minimum amount of $1,000,000 and
integral multiples of $500,000 in excess thereof (or, if less, the
aggregate principal amount of Loans then outstanding).
Section 3.6.
Fees.
(a)
Unused Fee
. During the period from the
Effective Date to but excluding the Termination Date, the Borrower
agrees to pay to the Agent for the account of the Lenders an unused
facility fee with respect to the average daily difference between
the (i) aggregate amount of the Commitments and (ii) the
aggregate principal amount of all outstanding Loans (the “
Unused Amount ”). Such fee shall be computed by
multiplying the Unused Amount with respect to such quarter by the
corresponding per annum rate set forth below:
|
Unused Amount
|
|
Unused Fee
|
|
|
Greater than or equal to 50% of the
aggregate amount of Commitments
|
|
0.20
|
%
|
|
Less than 50% of the aggregate
amount of Commitments
|
|
0.125
|
%
|
27
Such fee shall be payable in arrears
on the last day of each March, June, September or
December of each calendar year. Any such accrued and
unpaid fee shall also be payable on the Termination Date or any
earlier date of termination of the Commitments or reduction of the
Commitments to zero.
(b)
Extension Fee
. If the Borrower exercises
its right to extend the Termination Date pursuant to
Section 2.9., the Borrower agrees to pay to the Agent for the
account of each Lender a fee equal to two-tenths of one percent
(0.20%) of the amount of such Lender’s Commitment (whether or
not utilized) at the time of such extension. Such fee shall
be due and payable in full on the date the Agent receives the
Extension Request pursuant to such Section.
(c)
Administrative and Other
Fees . The Borrower
agrees to pay the administrative and other fees of the Agent as may
be agreed to in writing by the Borrower and the Agent from time to
time.
Section 3.7.
Computations.
Unless otherwise expressly set forth
herein, any accrued interest on any Loan, any Fees or any other
Obligations due hereunder shall be computed on the basis of a year
of three hundred sixty (360) days and the actual number of days
elapsed; provided, however, any accrued interest on any Base Rate
Loan shall be computed on the basis of a year of three hundred
sixty-five (365) or three hundred sixty-six (366) days, as
applicable, and the actual number of days elapsed.
Section 3.8.
Usury.
In no event shall the amount of
interest due or payable on the Loans or other Obligations exceed
the maximum rate of interest allowed by Applicable Law and, if any
such payment is paid by the Borrower or any other Loan Party or
received by any Lender, then such excess sum shall be credited as a
payment of principal, unless the Borrower shall notify the
respective Lender in writing that the Borrower elects to have such
excess sum returned to it forthwith. It is the express intent
of the parties hereto that the Borrower not pay and the Lenders not
receive, directly or indirectly, in any manner whatsoever, interest
in excess of that which may be lawfully paid by the Borrower under
Applicable Law.
Section 3.9.
Agreement Regarding Interest and
Charges.
The parties hereto hereby agree and
stipulate that the only charge imposed upon the Borrower for the
use of money in connection with this Agreement is and shall be the
interest specifically described in
Section 2.2.(a).(i) and (ii). Notwithstanding the
foregoing, the parties hereto further agree and stipulate that all
agency fees, syndication fees, facility fees, closing fees,
underwriting fees, default charges, late charges, funding or
“breakage” charges, increased cost charges,
attorneys’ fees and reimbursement for costs and expenses paid
by the Agent or any Lender to third parties or for damages incurred
by the Agent or any Lender, in each case in connection with the
transactions contemplated by this Agreement and the other Loan
Documents, are charges made to compensate the Agent or any such
Lender for underwriting or administrative services and costs or
losses performed or incurred, and to be performed or
28
incurred, by the Agent and the
Lenders in connection with this Agreement and shall under no
circumstances be deemed to be charges for the use of money.
All charges other than charges for the use of money shall be fully
earned and nonrefundable when due.
Section 3.10.
Statements of Account.
The Agent will account to the
Borrower monthly with a statement of Loans, accrued interest and
Fees, charges and payments made pursuant to this Agreement and the
other Loan Documents, and such account rendered by the Agent shall
be deemed conclusive upon the Borrower to the extent the Borrower
shall fail to object to such account in writing within five
(5) Business Days of the receipt thereof. The failure of
the Agent to deliver such a statement of accounts shall not relieve
or discharge the Borrower from any of its obligations
hereunder.
Section 3.11.
Defaulting Lenders.
(a)
Generally . If for any reason any Lender (a “
Defaulting Lender ”) shall fail or refuse to perform
any of its obligations under this Agreement or any other Loan
Document to which it is a party within the time period specified
for performance of such obligation or, if no time period is
specified, if such failure or refusal continues for a period of two
(2) Business Days after notice from the Agent, then, in
addition to the rights and remedies that may be available to the
Agent or the Borrower under this Agreement or Applicable Law, such
Defaulting Lender’s right to participate in the
administration of the Loans, this Agreement and the other Loan
Documents, including without limitation, any right to vote in
respect of, to consent to or to direct any action or inaction of
the Agent or to be taken into account in the calculation of the
Requisite Lenders, shall be suspended during the pendency of such
failure or refusal. If a Lender is a Defaulting Lender
because it has failed to make timely payment to the Agent of any
amount required to be paid to the Agent hereunder (without giving
effect to any notice or cure periods), in addition to other rights
and remedies which the Agent or the Borrower may have under this
Agreement or otherwise, the Agent shall be entitled (i) to
collect interest from such Defaulting Lender on such delinquent
payment for the period from the date on which the payment was due
until the date on which the payment is made at the Federal Funds
Rate, (ii) to withhold or setoff and to apply in satisfaction
of the defaulted payment and any related interest, any amounts
otherwise payable to such Defaulting Lender under this Agreement or
any other Loan Document and (iii) to bring an action or suit
against such Defaulting Lender in a court of competent jurisdiction
to recover the defaulted amount and any related interest. Any
amounts received by the Agent in respect of a Defaulting
Lender’s Loans shall not be paid to such Defaulting Lender
and shall be held uninvested by the Agent and either applied
against the purchase price of such Loans under the following
subsection (b) or paid to such Defaulting Lender upon the
Defaulting Lender’s curing of its default.
(b)
Purchase of Defaulting
Lender’s Commitment . The Borrower may request the Agent to
notify the Lenders that a Lender has become a Defaulting
Lender. Any Lender who is not a Defaulting Lender shall have
the right, but not the obligation, in its sole discretion, to
acquire all of a Defaulting Lender’s Commitment. Any
Lender desiring to exercise such right shall give written notice
thereof to the Agent and the Borrower no sooner than two
(2) Business Days and not later than five (5) Business
Days after such Defaulting Lender became a Defaulting Lender.
If more than one Lender exercises such right, each such Lender
shall have the right to
29
acquire an amount of such Defaulting
Lender’s Commitment in proportion to its Commitments to the
aggregate Commitments of all Lenders exercising such right.
If after such fifth (5 th ) Business Day, the Lenders
have not elected to purchase all of the Commitment of such
Defaulting Lender, then the Borrower may, by giving written notice
thereof to the Agent, such Defaulting Lender and the other Lenders,
demand that such Defaulting Lender assign its Commitment to an
Eligible Assignee subject to and in accordance with the provisions
of Section 12.5. for the purchase price provided for
below. No party hereto shall have any obligation whatsoever
to initiate any such replacement or to assist in finding an
Eligible Assignee. Upon any such purchase or assignment, the
Defaulting Lender’s interest in the Loans and its rights
hereunder (but not its liability in respect thereof or under the
Loan Documents or this Agreement to the extent the same relate to
the period prior to the effective date of the purchase) shall
terminate on the date of purchase, and the Defaulting Lender shall
promptly execute all documents reasonably requested to surrender
and transfer such interest to the purchaser or assignee thereof,
including an appropriate Assignment and Acceptance Agreement and,
notwithstanding Section 12.5., shall pay to the Agent an
assignment fee in the amount of $7,000. The purchase price
for the Commitment of a Defaulting Lender shall be equal to the
amount of the principal balance of the Loans outstanding and owed
by the Borrower to the Defaulting Lender. Prior to payment of
such purchase price to a Defaulting Lender, the Agent shall apply
against such purchase price any amounts retained by the Agent
pursuant to the last sentence of the immediately preceding
subsection (a). The Defaulting Lender shall be entitled
to receive amounts owed to it by the Borrower under the Loan
Documents which accrued prior to the date of the default by the
Defaulting Lender, to the extent the same are received by the Agent
from or on behalf of the Borrower. There shall be no recourse
against any Lender or the Agent for the payment of such sums except
to the extent of the receipt of payments from any other party or in
respect of the Loans.
Section 3.12.
Taxes.
(a)
Taxes Generally
. All payments by the Borrower
of principal of, and interest on, the Loans and all other
Obligations shall be made free and clear of and without deduction
for any present or future excise, stamp or other taxes, fees,
duties, levies, imposts, charges, deductions, withholdings or other
charges of any nature whatsoever imposed by any taxing authority,
but excluding (i) franchise taxes, (ii) any taxes imposed
on or measured by any Lender’s assets, net income, receipts
or branch profits, (iii) any taxes (other than withholding
taxes) with respect to the Agent or a Lender that would not be
imposed but for a connection between the Agent or such Lender and
the jurisdiction imposing such taxes (other than a connection
arising solely by virtue of the activities of the Agent or such
Lender pursuant to or in respect of this Agreement or any other
Loan Document), and (iv) any taxes, fees, duties, levies,
imposts, charges, deductions, withholdings or other charges to the
extent imposed as a result of the failure of the Agent or a Lender,
as applicable, to provide and keep current (to the extent legally
able) any certificates, documents or other evidence required to
qualify for an exemption from, or reduced rate of, any such taxes
fees, duties, levies, imposts, charges, deductions, withholdings or
other charges or required by the immediately following
subsection (c) to be furnished by the Agent or such
Lender, as applicable (such non-excluded items being collectively
called “ Taxes ”). If any withholding or
deduction from any payment to be made by the Borrower hereunder is
required in respect of any Taxes pursuant to any Applicable Law,
then the Borrower will:
30
(i)
pay directly to the relevant
Governmental Authority the full amount required to be so withheld
or deducted;
(ii)
promptly forward to the Agent an
official receipt or other documentation satisfactory to the Agent
evidencing such payment to such Governmental Authority;
and
(iii)
pay to the Agent for its account or
the account of the applicable Lender, as the case may be, such
additional amount or amounts as is necessary to ensure that the net
amount actually received by the Agent or such Lender will equal the
full amount that the Agent or such Lender would have received had
no such withholding or deduction been required.
(b)
Tax Indemnification
. If the Borrower fails to pay any
Taxes when due to the appropriate Governmental Authority or fails
to remit to the Agent, for its account or the account of the
respective Lender, as the case may be, the required receipts or
other required documentary evidence, the Borrower shall indemnify
the Agent and the Lenders for any incremental Taxes, interest or
penalties that may become payable by the Agent or any Lender as a
result of any such failure. For purposes of this Section, a
distribution hereunder by the Agent or any Lender to or for the
account of any Lender shall be deemed a payment by the
Borrower.
(c)
Tax Forms . Prior to the date that any Lender or
Participant organized under the laws of a jurisdiction outside the
United States of America becomes a party hereto, such Person shall
deliver to the Borrower and the Agent such certificates, documents
or other evidence, as required by the Internal Revenue Code or
Treasury Regulations issued pursuant thereto (including Internal
Revenue Service Forms W-8ECI and W-8BEN, as applicable, or
appropriate successor forms), properly completed, currently
effective and duly executed by such Lender or Participant
establishing that payments to it hereunder and under the Notes are
(i) not subject to United States Federal backup withholding
tax and (ii) not subject to United States Federal withholding
tax imposed under the Internal Revenue Code. Each such Lender or
Participant shall, to the extent it may lawfully do so,
(x) deliver further copies of such forms or other appropriate
certifications on or before the date that any such forms expire or
become obsolete and after the occurrence of any event requiring a
change in the most recent form delivered to the Borrower or the
Agent and (y) obtain such extensions of the time for filing,
and renew such forms and certifications thereof, as may be
reasonably requested by the Borrower or the Agent. The Borrower
shall not be required to pay any amount pursuant to the last
sentence of subsection (a) above to any Lender or Participant
that is organized under the laws of a jurisdiction outside of the
United States of America or the Agent, if it is organized under the
laws of a jurisdiction outside of the United States of America, if
such Lender, Participant or the Agent, as applicable, fails to
comply with the requirements of this subsection. If any such Lender
or Participant, to the extent it may lawfully do so, fails to
deliver the above forms or other documentation, then the Agent may
withhold from any payments to be made to such Lender under any of
the Loan Documents such amounts as are required by the Internal
Revenue Code. If any Governmental Authority asserts that the Agent
did not properly withhold or backup withhold, as the case may be,
any tax or other amount from payments made to or for the account of
any Lender, such Lender shall indemnify the Agent therefor,
including all penalties and interest, any taxes imposed by any
jurisdiction on the amounts payable to the Agent under this
Section, and costs
31
and expenses (including all
reasonable fees and disbursements of any law firm or other external
counsel and the allocated cost of internal legal services and all
disbursements of internal counsel) of the Agent. The obligation of
the Lenders under this Section shall survive the termination
of the Commitments, repayment of all Obligations and the
resignation or replacement of the Agent.
ARTICLE IV. YIELD PROTECTION,
ETC.
Section 4.1.
Additional Costs; Capital
Adequacy.
(a)
Additional Costs
. The Borrower shall promptly pay to
the Agent for the account of a Lender from time to time such
amounts as such Lender may determine to be necessary to compensate
such Lender for any costs incurred by such Lender that it
determines are attributable to its making or maintaining of any
LIBOR Loans or its obligation to make any LIBOR Loans hereunder,
any reduction in any amount receivable by such Lender under this
Agreement or any of the other Loan Documents in respect of any of
such Loans or such obligation or the maintenance by such Lender of
capital in respect of its Loans or its Commitment (such increases
in costs and reductions in amounts receivable being herein called
“ Additional Costs ”), to the extent any such
Additional Costs result from any Regulatory Change that:
(i) changes the basis of taxation of any amounts payable to
such Lender under this Agreement or any of the other Loan Documents
in respect of any of such Loans or its Commitment (other than
taxes, fees, duties, levies, imposts, charges, deductions,
withholdings or other charges which are excluded from the
definition of Taxes pursuant to the first sentence of
Section 3.12.(a)); or (ii) imposes or modifies any
reserve, special deposit or similar requirements (other than
Regulation D of the Board of Governors of the Federal Reserve
System or other reserve requirement to the extent utilized in the
determination of Adjusted LIBOR for such Loan) relating to any
extensions of credit or other assets of, or any deposits with or
other liabilities of, such Lender, or any commitment of such Lender
(including, without limitation, the Commitment of such Lender
hereunder); or (iii) has or would have the effect of reducing
the rate of return on capital of such Lender to a level below that
which such Lender could have achieved but for such Regulatory
Change (taking into consideration such Lender’s policies with
respect to capital adequacy).
(b)
Lender’s Suspension of
LIBOR Loans . Without
limiting the effect of the provisions of the immediately preceding
subsection (a), if, by reason of any Regulatory Change, any
Lender either (i) incurs or would incur Additional Costs based
on or measured by the excess above a specified level of the amount
of a category of deposits or other liabilities of such Lender that
includes deposits by reference to which the interest rate on LIBOR
Loans is determined as provided in this Agreement or a category of
extensions of credit or other assets of such Lender that includes
LIBOR Loans or (ii) becomes subject to restrictions on the
amount of such a category of liabilities or assets that it may
hold, then, if such Lender so elects by notice to the Borrower
(with a copy to the Agent), the obligation of such Lender to make
or Continue, or to Convert any other Type of Loans into, LIBOR
Loans hereunder shall be suspended until such Regulatory Change
ceases to be in effect (in which case the provisions of
Section 4.5. shall apply).
(c)
Notification and Determination of
Additional Costs . Each
of the Agent and each Lender agrees to notify the Borrower of any
event occurring after the Agreement Date entitling the Agent or
such Lender to compensation under any of the preceding subsections
of this Section
32
as promptly as practicable;
provided, however, the failure of the Agent or any Lender to give
such notice shall not release the Borrower from any of its
obligations hereunder (and in the case of a Lender, to the Agent).
The Agent or such Lender agrees to furnish to the Borrower (and in
the case of a Lender, to the Agent) a certificate setting forth the
basis and amount of each request by the Agent or such Lender for
compensation under this Section. Absent manifest error,
determinations by the Agent or any Lender of the effect of any
Regulatory Change shall be conclusive, provided that such
determinations are made on a reasonable basis and in good
faith.
Section 4.2.
Suspension of LIBOR
Loans.
Anything herein to the contrary
notwithstanding, if, on or prior to the determination of any LIBOR
Rate for any Interest Period:
(a)
the Agent reasonably determines
(which determination shall be conclusive) that by reason of
circumstances affecting the relevant market, adequate and
reasonable means do not exist for ascertaining Adjusted LIBOR for
such Interest Period, or
(b)
the Agent reasonably determines
(which determination shall be conclusive) that Adjusted LIBOR will
not adequately and fairly reflect the cost to the Lenders of making
or maintaining LIBOR Loans for such Interest Period;
then the Agent shall give the
Borrower and each Lender prompt notice thereof and, so long as such
condition remains in effect, the Lenders shall be under no
obligation to, and shall not, make additional LIBOR Loans, Continue
LIBOR Loans or Convert Loans into LIBOR Loans and the Borrower
shall, on the last day of each current Interest Period for each
outstanding LIBOR Loan, either repay such Loan or Convert such Loan
into a Base Rate Loan.
Section 4.3.
Illegality.
Notwithstanding any other provision
of this Agreement, if any Lender shall reasonably determine (which
determination shall be conclusive and binding) that it has become
unlawful for such Lender to honor its obligation to make or
maintain LIBOR Loans hereunder, then such Lender shall promptly
notify the Borrower thereof (with a copy to the Agent) and such
Lender’s obligation to make or Continue, or to Convert Loans
of any other Type into, LIBOR Loans shall be suspended until such
time as such Lender may again make and maintain LIBOR Loans (in
which case the provisions of Section 4.5. shall be
applicable).
Section 4.4.
Compensation.
The Borrower shall pay to the Agent
for the account of each Lender, upon the request of such Lender
through the Agent, such amount or amounts as shall be sufficient
(in the reasonable opinion of such Lender) to compensate it for any
loss, cost or expense that such Lender reasonably determines is
attributable to:
(a)
any payment or prepayment (whether
mandatory or optional) of a LIBOR Loan, or Conversion of a LIBOR
Loan, made by such Lender for any reason (including,
33
without limitation, acceleration) on
a date other than the last day of the Interest Period for such
Loan; or
(b)
any failure by the Borrower for any
reason (including, without limitation, the failure of any of the
applicable conditions precedent specified in Article VI. to be
satisfied) to borrow a LIBOR Loan from such Lender on the requested
date for such borrowing, or to Convert a Base Rate Loan into a
LIBOR Loan or Continue a LIBOR Loan on the requested date of such
Conversion or Continuation.
Upon the Borrower’s request,
any Lender requesting compensation under this Section shall
provide the Borrower with a statement setting forth the basis for
requesting such compensation and the method for determining the
amount thereof. Absent manifest error, determinations by any Lender
in any such statement shall be conclusive, provided that such
determinations are made on a reasonable basis and in good
faith.
Section 4.5.
Treatment of Affected
Loans.
If the obligation of any Lender to
make LIBOR Loans or to Continue, or to Convert Base Rate Loans
into, LIBOR Loans shall be suspended pursuant to
Section 4.1.(b)., 4.2. or 4.3., then such Lender’s LIBOR
Loans shall be automatically Converted into Base Rate Loans on the
last day(s) of the then current Interest Period(s) for
LIBOR Loans (or, in the case of a Conversion required by
Section 4.1.(b). or 4.3., on such earlier date as such Lender
may specify to the Borrower with a copy to the Agent) and, unless
and until such Lender gives notice as provided below that the
circumstances specified in Section 4.2. or 4.3. that gave rise
to such Conversion no longer exist:
(a)
to the extent that such
Lender’s LIBOR Loans have been so Converted, all payments and
prepayments of principal that would otherwise be applied to such
Lender’s LIBOR Loans shall be applied instead to its Base
Rate Loans; and
(b)
all Loans that would otherwise be
made or Continued by such Lender as LIBOR Loans shall be made or
Continued instead as Base Rate Loans, and all Base Rate Loans of
such Lender that would otherwise be Converted into LIBOR Loans
shall remain as Base Rate Loans.
If such Lender gives notice to the
Borrower (with a copy to the Agent) that the circumstances
specified in Section 4.1. or 4.3. that gave rise to the
Conversion of such Lender’s LIBOR Loans pursuant to this
Section no longer exist (which such Lender agrees to do
promptly upon such circumstances ceasing to exist) at a time when
LIBOR Loans made by other Lenders are outstanding, then such
Lender’s Base Rate Loans shall be automatically Converted, on
the first day(s) of the next succeeding Interest
Period(s) for such outstanding LIBOR Loans, to the extent
necessary so that, after giving effect thereto, all Loans held by
the Lenders holding LIBOR Loans and by such Lender are held pro
rata (as to principal amounts, Types and Interest Periods) in
accordance with their respective Commitments.
34
Section 4.6.
Change of Lending
Office.
Each Lender agrees that it will use
reasonable efforts to designate an alternate Lending Office with
respect to any of its Loans affected by the matters or
circumstances described in Sections 3.12., 4.1. or 4.3. to
reduce the liability of the Borrower or avoid the results provided
thereunder, so long as such designation is not disadvantageous to
such Lender as determined by such Lender in its sole discretion,
except that such Lender shall have no obligation to designate a
Lending Office located in the United States of America.
Section 4.7.
Assumptions Concerning Funding of
LIBOR Loans.
Calculation of all amounts payable
to a Lender under this Article IV. shall be made as though
such Lender had actually funded LIBOR Loans through the purchase of
deposits in the relevant market bearing interest at the rate
applicable to such LIBOR Loans in an amount equal to the amount of
the LIBOR Loans and having a maturity comparable to the relevant
Interest Period; provided, however, that each Lender may fund each
of its LIBOR Loans in any manner it sees fit and the foregoing
assumption shall be used only for calculation of amounts payable
under this Article IV.
ARTICLE V. BORROWING BASE
PROPERTIES
Section 5.1.
Eligibility of
Properties.
(a)
Initial Borrowing Base
Properties . As of the
date hereof, the Lenders have approved for inclusion in
calculations of the Borrowing Base, the Properties identified on
Schedule 5.1., as well as the Borrowing Base Value initially
attributable to each such Property. The Borrower represents that it
has provided, prior to the Agreement Date, to the Agent for each
such Borrowing Base Property the documents and instruments listed
in Section 5.1.(b). and that no material change has occurred
as of the Agreement Date that would otherwise amend, modify or
terminate such documents, materially change the information
provided or otherwise cause the Properties identified in Schedule
5.1. to no longer be Eligible Properties. The Borrower further
represents that it shall deliver to the Agent prior to any
disbursement of Loan proceeds for each of such Borrowing Base
Properties the documents and instruments listed in Sections
5.1(d).(i). - (viii).
(b)
Additional Borrowing Base
Properties . If after the
Effective Date the Borrower desires that any additional Property be
included in calculations of the Borrowing Base, the Borrower shall
so notify the Agent in writing. No Property will be evaluated by
the Agent unless and until the Borrower delivers to the Agent all
of the following, in form and substance satisfactory to the
Agent:
(i)
A description of the proposed
Improvements on such Property;
(ii)
Evidence that the proposed Property
is an Eligible Property;
(iii)
The Total Development Budget for the
proposed Property, which shall evidence that the total development
costs for such Property net of the Borrower’s
Project
35
Equity does not exceed the Available
Funding Capacity and does not exceed $50,000,000;
(iv)
Evidence that the Parent, the
applicable Borrower or their respective Subsidiaries are the sole
member(s), shareholder(s) or partner(s), as the case may be,
of the Property Owner;
(v)
Copies of any executed Lease and any
lease letter of intent entered into by any Loan Party in connection
with the Construction and/or the operation of the proposed
Property;
(vi)
A Proforma NOI for such proposed
Property in form and substance satisfactory to the Agent;
and
(vii)
To the extent not provided under the
immediately preceding clause (vi), such projections, proforma
operating statements and other information concerning the
anticipated operation of such Property as the Agent may reasonably
request.
Upon receipt of all of the foregoing
documents and information, the Agent shall promptly distribute, at
the Borrower’s cost, a copy of such documents and information
to the Lenders. If, after receipt and review of all of the
foregoing documents and information, the Agent is prepared to
accept such Property as a Borrowing Base Property, the Agent will
so notify the Borrower and each Lender within ten
(10) Business Days after receipt of all of such documents and
information. If the Agent fails to give such notice within such
time period, the Agent shall be deemed to have rejected such
Property as a Borrowing Base Property. The Agent shall determine
whether to accept such Property as a Borrowing Base Property in its
reasonable judgment.
(c)
Nonconforming
Properties . If the Agent
rejects any Property as a Borrowing Base Property under the
immediately preceding subsection (b), or if a Property which the
Borrower wants to have included in calculations of the Borrowing
Base does not satisfy the requirements of an Eligible Property,
then the Agent, upon written request of the Borrower shall request
that the Lenders determine whether such Property shall be included
as a Borrowing Base Property. If such a request is made by the
Agent to the Lenders, within ten (10) Business Days of the
date on which a Lender has received such request and all of the
items referred to in the immediately preceding subsection (b),
such Lender shall notify the Agent in writing whether or not such
Lender accepts such Property as a Borrowing Base Property. If a
Lender fails to give such notice within such time period, such
Lender shall be deemed to have rejected such Property as a
Borrowing Base Property. A Property shall become a Borrowing Base
Property under this subsection only upon the approval of the
Requisite Lenders.
(d)
Conditions to Property Becoming a
Borrowing Base Property .
Notwithstanding anything to the contrary contained in this
Agreement, no Property shall become a Borrowing Base Property until
the Agent or the Requisite Lenders, as applicable, shall have
approved of such Property as provided in the immediately preceding
subsection (b) or (c), as the case may be, and the
Borrower shall have caused to be executed, if applicable, and
delivered to the Agent the
36
following instruments, documents and
agreements in respect of such Property, each to be in form and
substance satisfactory to the Agent:
(i)
The Borrowing Base Certificate for
the proposed Property calculated to give proforma effect to the
inclusion of such Property as a Borrowing Base Property (and any
Property Release being effected in connection with the addition of
such Property as a Borrowing Base Property);
(ii)
The most currently available Phase I
environmental report and Phase II environmental report, if
applicable, demonstrating that the project site for the applicable
Property is free from any Hazardous Materials and is in compliance
with Environmental Laws and showing the flood zone designation of
the applicable Property;
(iii)
Evidence that the applicable
Property Owner holds a one hundred percent (100%) fee simple
interest and clear and marketable title in the Property or, if such
Property Owner holds a ground leasehold estate in such Property, a
certified copy of a fully executed counterpart of the related
ground lease and all amendments thereto, which ground lease shall
contain provisions (including, without limitation, a term of thirty
(30) years or more from the Agreement Date, transfer and assignment
provisions and rights to sublease) acceptable to the
Agent;
(iv)
A Title Report demonstrating that
the applicable Property is free of all Liens, other than Permitted
Liens;
(v)
Copies of the Construction
Documents;
(vi)
Evidence satisfactory to the Lender
that the Borrower has funded the Project Equity or has such Project
Equity in immediately available funds to apply toward any
Construction on the proposed Property;
(vii)
Copies of all insurance policies (or
satisfactory certificates of insurance) evidencing that insurance
coverages are in effect with respect to the proposed Property and
Property Owner, in accordance with the “Ground-Up New
Construction” insurance requirements attached hereto as
Schedule 8.5(f), for which the premiums have been fully
prepaid;
(viii)
A Survey;
(ix)
An amendment to the Pledge Agreement
executed by the Borrower, the Pledgors and each Subsidiary that
owns, directly or indirectly, any Equity Interests in such Property
Owner (such new Property Owner and each such Subsidiary, the
“ New Loan Parties ”) subjecting to the Lien
created thereby all of the outstanding Equity Interests of
(x) the Property Owner that owns such Property and
(y) any Subsidiary that owns, directly or indirectly, any
Equity Interests in such Property Owner;
37
(x)
A certificate executed by the
Borrower and the Parent updating the information set forth on
Schedule 7.1(b) to this Agreement to include the relevant
information relating to the new Property Owner and confirming to
the Agent that the representations and warranties contained in
Section 7.1.(b). are true and correct;
(xi)
An accession agreement to the
Guaranty to add the new Property Owner as an additional
Guarantor;
(xii)
The certificate or articles of
incorporation, articles of organization, certificate of limited
partnership, declaration of trust or other comparable
organizational instrument (if any) of the New Loan Parties,
certified as of a recent date by the Secretary of State of the
State of formation of such Person;
(xiii)
A Certificate of Good Standing or
certificate of similar meaning with respect to each New Loan Party
(and in the case of a limited partnership, the general partner of
such New Loan Party) issued as of a recent date by the Secretary of
State of the State of formation of each such Person and, if the
proposed Property is located in a State different than the State of
formation of such New Loan Party, certificates of qualification to
transact business or other comparable certificates issued by such
Secretary of State (and any state department of taxation, as
applicable) of the State of the location of the proposed
Property;
(xiv)
A certificate of incumbency signed
by the Secretary or Assistant Secretary (or other individual
performing similar functions) of each New Loan Party that is
becoming a Pledgor or a Guarantor, as the case may be, with respect
to each of the officers of such Person authorized to execute and
deliver the amendments to the applicable Loan Documents referred to
above;
(xv)
Copies certified by the Secretary or
Assistant Secretary (or other individual performing similar
functions) of each New Loan Party of the by-laws of such Person, if
a corporation, the operating agreement, if a limited liability
company, the partnership agreement, if a limited or general
partnership, or other comparable document in the case of any other
form of legal entity;
(xvi)
Unless a blanket resolution
reasonably satisfactory to the Agent has been previously delivered
to Agent, copies certified by the Secretary or Assistant Secretary
(or other individual performing similar functions) of each New Loan
Party that is becoming a Pledgor or Guarantor, as the case may be,
of all corporate, partnership, member or other necessary action
taken by each Pledgor or Guarantor, as the case may be, to
authorize the execution, delivery and performance of the amendments
to the applicable Loan Documents referred to above;
(xvii)
Such UCC Financing Statements naming
the Borrower and each New Loan Party that is becoming a Pledgor as
debtor and the Agent as secured party, as the Agent shall have
requested in order to perfect the security interests and other
Liens
38
created pursuant to the Pledge
Agreement as amended by the amendment thereto referred to
above;
(xviii)
Satisfactory reports of UCC, tax
lien, judgment and litigation searches conducted by a search firm
reasonably acceptable to the Agent with respect to the Collateral
being added to the Pledge Agreement, the Borrower and each New Loan
Party that is becoming a Pledgor, such searches to be conducted
where the Property is located and where any UCC Financing
Statements will be filed; and
(xix)
Such other documents, agreements and
instruments as the Agent on behalf of the Lenders may reasonably
request.
Section 5.2.
Release of Properties.
From time to time the Borrower may
request, upon not less than ten (10) Business Days prior
written notice to the Agent, that a Borrowing Base Property be no
longer considered a Borrowing Base Property, which release (the
“ Property Release ”) shall be effected by the
Agent if the Agent determines all of the following conditions are
satisfied as of the date of such Property Release:
(a)
No Default or Event of Default
exists or will exist immediately after giving effect to such
Property Release and the reduction in the Borrowing Base by reason
of the release of such Property;
(b)
The Borrower repays the Loans
attributable to the applicable Borrowing Base Property Sub-Facility
relating to such Property Release; and
(c)
The Borrower shall have delivered to
the Agent a Borrowing Base Certificate and Compliance Certificate
demonstrating on a proforma basis, and the Agent shall have
determined to its satisfaction, that the outstanding principal
balance of the Loans will not exceed the Borrowing Base after
giving effect to such request and any prepayment to be made and/or
the acceptance of any Property as an additional or replacement
Borrowing Base Property to be given concurrently with such request
and that the Parent and the Borrower will be in compliance with the
covenants set forth in Section 9.1. of the Existing Credit
Agreement after giving effect to the Property Release.
The Agent agrees to execute, at the
Borrower’s sole cost and expense, such documents and
instruments as the Borrower may reasonably request to effect and
evidence a Property Release.
Section 5.3.
Frequency of Calculations of
Borrowing Base.
Initially, the Borrowing Base shall
be the amount set forth as such in the Borrowing Base Certificate
delivered under Section 6.1. Thereafter, the Borrowing Base
shall be the amount set forth as such in any Borrowing Base
Certificate delivered from time to time under Article V. or
Article IX. Any increase in the Borrowing Base Value of a
Borrowing Base Property shall become effective as of the next
determination of the Borrowing Base Value as provided in this
Section.
39
ARTICLE VI. CONDITIONS
PRECEDENT
Section 6.1.
Conditions Precedent to
Effectiveness of Agreement.
The effectiveness of this Agreement
and obligation of the Lenders to make the initial Loans on the
Effective Date is subject to the following conditions
precedent:
(a)
The Agent shall have received each
of the following, in form and substance satisfactory to the
Agent:
(i)
Counterparts of this Agreement
executed by each of the parties hereto;
(ii)
Notes executed by the Borrower,
payable to each Lender and complying with the applicable provisions
of Section 2.8.;
(iii)
The Guaranty executed by the Parent
and each Property Owner existing as of the Effective
Date;
(iv)
The Pledge Agreement executed by the
Borrower and the Pledgors;
(v)
An opinion of the general counsel of
the Parent and the Loan Parties, addressed to the Agent and the
Lenders, addressing the matters set forth in
Exhibit I;
(vi)
An opinion of Alston &
Bird, LLP, counsel to the Agent, and addressed to the Agent and the
Lenders, addressing the enforceability of the Loan Documents and
such matters as the Agent shall reasonably request;
(vii)
A certificate of incumbency signed
by the Secretary or Assistant Secretary of the Parent with respect
to each of the officers of the Parent authorized to execute and
deliver on behalf of the Parent and the Borrower the Loan Documents
to which the Parent or the Borrower is a party and to execute and
deliver (or make by telephone in the case of Notices of Conversion
or Continuation) on behalf of the Borrower Draw Requests, Notices
of Conversion and Notices of Continuation;
(viii)
A certified copy (certified by the
Secretary or Assistant Secretary of the Parent) of all necessary
action taken by the Parent to authorize the execution, delivery and
performance of the Loan Documents to which either the Parent or the
Borrower is a party;
(ix)
The certificate or articles of
incorporation, articles of organization, certificate of limited
partnership, declaration of trust or other comparable
organizational instrument (if any) of the Parent, the Borrower and
each Loan Party, certified as of a recent date by the Secretary of
State of the State of formation of such Person;
(x)
A Certificate of Good Standing or
certificate of similar meaning with respect to the Parent, the
Borrower and each other Loan Party (and in the case of a
40
limited partnership, the general
partner of such Loan Party) issued as of a recent date by the
Secretary of State of the State of formation of each such Person
and, if the applicable Borrowing Base Property is located in a
State different than the State of formation of the applicable Loan
Party, certificates of qualification to transact business or other
comparable certificates issued by such Secretary of State (and any
state department of taxation, as applicable) of the State of the
location of the applicable Borrowing Base Property;
(xi)
Copies certified by the Secretary or
Assistant Secretary (or other individual performing similar
functions) of the Parent, the Borrower and each Loan Party of the
by-laws of such Person, if a corporation, the operating agreement,
if a limited liability company, the partnership agreement, if a
limited or general partnership, or other comparable document in the
case of any other form of legal entity;
(xii)
A certificate of incumbency signed
by the Secretary or Assistant Secretary (or other individual
performing similar functions) of each Loan Party with respect to
each of the officers of such Person authorized to execute and
deliver the Loan Documents to which such Person is a
party;
(xiii)
Copies certified by the Secretary or
Assistant Secretary (or other individual performing similar
functions) of each Loan Party of all corporate, partnership, member
or other necessary action taken by each Loan Party to authorize the
execution, delivery and performance of the Loan Documents to which
such Person is a party;
(xiv)
Such UCC Financing Statements naming
the Borrower and each Pledgor as debtor and the Agent as secured
party, as the Agent shall have requested in order to perfect the
security interests and other Liens created pursuant to the Pledge
Agreement;
(xv)
Satisfactory reports of UCC, tax
lien, judgment and litigation searches conducted by a search firm
reasonably acceptable to the Agent with respect to the Collateral,
the Borrower, each Pledgor and each Property Owner, such searches
to be conducted where the Borrowing Base Properties are located and
where any UCC Financing Statements will be filed;
(xvi)
Any Fees payable to the Agent, the
Titled Agent and the Lenders on or prior to the Effective
Date;
(xvii)
A Borrowing Base Certificate
calculated as of the Effective Date; and
(xviii)
Such other documents, agreements,
information and instruments as the Agent on behalf of the Lenders
may reasonably request; and
(b)
In the good faith judgment of the
Agent and the Lenders:
(i)
There shall not have occurred or
become known to the Agent or any of the Lenders any event,
condition, situation or status since the date of the
information
41
contained in the financial and
business projections, budgets, proforma data and forecasts
concerning the Borrower and its Subsidiaries delivered to the Agent
and the Lenders prior to the Agreement Date that has had or could
reasonably be expected to result in a Material Adverse
Effect;
(ii)
The Borrower and its Subsidiaries
shall have received all approvals, consents and waivers, and shall
have made or given all necessary filings and notices as shall be
required to consummate the transactions contemplated hereby without
the occurrence of any default under, conflict with or violation of
(1) any Applicable Law or (2) any agreement, document or
instrument to which the Borrower or any other Loan Party is a party
or by which any of them or their respective properties is bound,
except for such approvals, consents, waivers, filings and notices
the receipt, making or giving of which would not reasonably be
likely to (A) have a Material Adverse Effect, or
(B) restrain or enjoin, impose materially burdensome
conditions on, or otherwise materially and adversely affect the
ability of the Borrower or any other Loan Party to fulfill its
obligations under the Loan Documents to which it is a party;
and
(iii)
There shall not have occurred or
exist any other material disruption of financial or capital markets
that could reasonably be expected to materially and adversely
affect the transactions contemplated by the Loan
Documents.
Section 6.2.
Additional Conditions Precedent To
All Loans.
The obligation of the Lenders to
make any Loan is subject to the further condition precedent
that:
(a)
no Default or Event of Default shall
exist as of the date of the making of such Loans or would exist
immediately after giving effect thereto;
(b)
no litigation, action, suit,
investigation or other arbitral, administrative or judicial
proceeding shall be pending or threatened which could reasonably be
expected to (i) result in a Material Adverse Effect or
(ii) restrain or enjoin, impose materially burdensome
conditions on, or otherwise materially and adversely affect the
ability of the Borrower or any other Loan Party to fulfill its
obligations under the Loan Documents to which it is a
party;
(c)
the representations and warranties
made or deemed made by the Borrower and each other Loan Party in
the Loan Documents to which any of them is a party, shall be true
and correct on and as of the date of the making of such Loans with
the same force and effect as if made on and as of such date except
to the extent that such representations and warranties expressly
relate solely to an earlier date (in which case such
representations and warranties shall have been true and accurate on
and as of such earlier date) and except for changes in factual
circumstances specifically and expressly permitted
hereunder.
Each Credit Event shall constitute a
certification by the Borrower to the effect set forth in the
preceding subsections (a), (b) and (c) (both as of the date of
the giving of notice relating to such Credit Event and, unless the
Borrower otherwise notifies the Agent prior to the date of such
Credit Event, as of the date of the occurrence of such Credit
Event). In addition, if such Credit
42
Event is the