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LOAN
AGREEMENT
THIS
LOAN AGREEMENT is made this 7th day of April, 2005, for delivery on
April 12, 2005 by and between CEDAR-CAMP HILL, LLC, a Delaware
limited liability company (the “Borrower”) and CITIZENS
BANK OF PENNSYLVANIA, a Pennsylvania state chartered savings bank
(the “ Lender ”).
Background
Borrower
owns certain real property consisting of approximately 44.32 acres
of land in the aggregate, located at 32 nd Street (a/k/a
U.S. Route 11/15) and Trindle Road partly in the Borough of Camp
Hill, and partly in East Pennsboro Township, Cumberland County,
Pennsylvania as more fully described in Exhibit A attached
hereto and made a part hereof, and known as the Camp Hill Shopping
Center (the “ Premises ”). The Premises are
improved with a shopping center consisting of 86,338 square feet of
in-line retail space, 7,802 square feet of leasable corridor space,
an existing Boscov’s store, an existing Giant supermarket,
and six pad sites (the “ Existing Improvements
”).
Borrower
intends to construct the following new improvements at the
Premises: (i) reconfiguration and renovation of existing in-line
retail space (the “ In-Line Renovations ”), (ii)
construction of a 91,100 square foot Giant supermarket which will
replace an existing Giant supermarket and for which a lease has
been executed (the “ New Giant Store ”), (iii)
construction of a 40,000 square feet orthopedic center for which a
lease has been executed (the “ Orthopedic Center
”), (iv) the potential construction of new space for tenants
acceptable to Lender (the “ Future Components
”), and (v) other related improvements and site work for the
In-Line Renovations, the New Giant Store, the Orthopedic Center and
Future Components, if constructed (collectively, the “
Site Work” ). The In-Line Renovations, New Giant
Store, Orthopedic Center, Future Components (if constructed) and
Site Work are sometimes collectively referred to herein as the
“ New Improvements .” The Existing Improvements
and the New Improvements are sometimes collectively referred to
herein as the “ Improvements .” The Premises and
Improvements are sometimes collectively referred to herein as the
“ Project .”
Borrower
has requested that Lender make available a credit facility in the
principal amount of up to Thirty Five Million Five Hundred Thousand
Dollars ($35,500,000) (the “ Loan ”) in order to
partially finance the cost of construction of the New Improvements
and certain related costs and expenses of Borrower. Lender is
willing to extend the Loan to Borrower upon the terms and subject
to the conditions hereinafter set forth.
Agreement
NOW
THEREFORE, in consideration of the premises and of the mutual
covenants herein contained and intending to be legally bound
hereby, Borrower and Lender agree as follows:
Article
1
DEFINITIONS; CONSTRUCTION |
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1.1.
Certain Definitions . As used in this Agreement, the
following terms have the following meanings (terms defined in the
singular to have a correlative meaning when used in the plural),
unless the context hereof otherwise clearly requires: |
“
Additional Security ” has the meaning ascribed to such
term in Section 2.4.
“
Adjusted Net Operating Income ” means for any period
of determination, for any Individual Property, the Pro Rata share
of (i) Individual Property Net Operating Income less (ii)
management fees (calculated as the greater of either 3% of total
revenue or actual management expenses incurred), to the extent not
already deducted from Individual Property Net Operating Income,
less (ii) allowances for capital expenditures in the amount of
$0.20 per annum per rentable square foot of completed
improvements.
“
Adjusted Net Operating Income of the Project ” means
for any period of determination, for the Project, all of (i)
Individual Property Net Operating Income less (ii) management fees
(calculated as the greater of either 3.5% of total revenue or
actual management expenses incurred), to the extent not already
deducted from Individual Property Net Operating Income, less (ii)
allowances for capital expenditures in the amount of $0.12 per
annum per rentable square foot of completed
improvements.
“
Advance ” means an advance made by Lender of a portion
of the Loan pursuant to this Agreement.
“
Affiliate ” of a Person (the “Specified
Person”) shall mean (i) any Person which directly or
indirectly controls, or is controlled by, or is under common
control with, the Specified Person, (ii) any executive officer (or,
in the case of a Person which is not a corporation, any individual
having analogous powers) of the Specified Person, and (iii) in the
case of a Specified Person who is an individual, any lineal
ancestor or lineal descendant of such Specified Person. For
purposes of the preceding sentence, “control” of a
Person means the possession, directly or indirectly, of the power
to direct or cause the direction of the management or policies of
such Person, whether through the ownership of voting securities, by
contract or otherwise.
“
Agreement ” means this Loan Agreement as the same may
be amended, modified, restated or supplemented from time to time in
accordance with its terms.
“Applicable Margin” means one hundred eighty
five (185) basis points.
“
Applications ” has the meaning ascribed to such term
in Section 9.2.
“
Approved Lease ” has the meaning ascribed to such term
in Section 7.8.
“
Architect ” means By Design Consultants,
Inc.
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“
Architect’s Agreement ” means the contracts
dated January 9, 2003, February 8, 2003, May 1, 2004 and September
8, 2004, between Borrower and Architect for the design of the New
Improvements.
“
Assignee ” has the meaning ascribed to such term in
Section 11.9.
“
Base Loan ” has the meaning ascribed to such term in
Section 9.3.
“
Book Value ” means the value of such property or
asset, as determined in accordance with GAAP.
“ Borrower ” has the meaning ascribed to such
term in the Preamble to this Agreement.
“Business Day” means any day which is neither a
Saturday or Sunday nor a legal holiday on which commercial banks
are authorized or required to be closed in Philadelphia.
“
Calculation Date ” means the Closing Date and the last
day of each calendar year commencing with December 31,
2005.
“
Calculation Period ” means for each Calculation Date,
the just-completed year (inclusive of the applicable Calculation
Date).
“
Capital Stock ” means (i) with respect to any Person
that is a corporation, any and all shares, interests,
participations or other equivalents (however designated and whether
or not voting) of corporate stock, including without limitation,
each class or series of common stock and preferred stock of such
Person and (ii) with respect to any Person that is not a
corporation, any and all investment units, partnership, membership
or other equity interests of such Person.
“
Closing Date ” means the date of execution and
delivery of this Agreement as indicated on the first page
hereof.
“ Code ” means the Internal Revenue Code of
1986, as amended, and any successor statute of similar import, and
regulations thereunder, in each case as in effect from time to
time, and the Treasury regulations thereunder.
“
Completion of the Improvement ” has the meaning
ascribed to such term in Section 6.1.
“
Consolidated CSC Entity ” or “ Consolidated
CSC Entities ” means, singly and collectively, the
Guarantors and any Wholly-Owned Subsidiary of either
Guarantor.
“
Construction Contract ” means (a) the construction
agreements dated December 17, 2003 and January 26, 2004, between
Ames Construction, Inc. and Borrower for the construction of the
In-Line Renovations and New Giant Store, respectively, and (b) the
construction agreement dated October 15, 2004, between Pyramid
Construction Services, Inc. and Borrower for the construction of
the Orthopedic Center, as each such contract may be amended in
compliance with the Loan Documents. Upon execution of the contracts
for the construction of any building of the Future Components, such
term shall include such contracts, as they may be amended in
compliance with the Loan Documents.
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“
Consultant ” has the meaning ascribed to such term in
Section 6.4.
“
Debt ” means, with respect to any Person, without
duplication, (i) all indebtedness of such Person for borrowed
money, (ii) all indebtedness of such Person for the deferred
purchase price of property or services (other than property and
services purchased, and expense accruals and deferred compensation
items arising, in the ordinary course of business), (iii) all
obligations of such Person evidenced by notes, bonds, debentures or
other similar instruments (other than performance, surety and
appeal bonds arising in the ordinary course of business), (iv) all
indebtedness of such Person created or arising under any
conditional sale or other title retention agreement with respect to
property acquired by such Person (even though the rights and
remedies of the seller or lender under such agreement in the event
of default are limited to repossession or sale of such property),
(v) all obligations of such Person under leases which have been, or
should be, in accordance with generally accepted accounting
principles, recorded as capital leases, to the extent required to
be so recorded, (vi) all reimbursement, payment or similar
obligations of such Person, contingent or otherwise, under
acceptance, letter of credit or similar facilities (other than
letters of credit in support of trade obligations or in connection
with workers’ compensation, unemployment insurance, old-age
pensions and other social security benefits in the ordinary course
of business), (vii) all Debt in the nature of that referred to in
clauses (i) through (vi) above which is guaranteed directly or
indirectly by such Person, or in effect guaranteed directly or
indirectly by such Person through an agreement (A) to pay or
purchase such Debt or to advance or supply funds for the payment or
purchase of such Debt, (B) to purchase, sell or lease (as lessee or
lessor) property, or to purchase or sell services, primarily for
the purpose of enabling the debtor to make payment of such Debt or
to assure the holder of such Debt against loss in respect of such
Debt, (C) to supply funds to or in any other manner invest in the
debtor (including any agreement to pay for property or services
irrespective of whether such property is received or such services
are rendered) or (D) otherwise to assure a creditor against loss in
respect of such Debt, (viii) any obligation, contingent or
otherwise, of such Person guarantying or having the economic effect
of guarantying any indebtedness or other obligation of any Person,
either directly or indirectly, of the nature described in clauses
(i) through (vi), and (ix) all Debt referred to in clauses (i)
through (vi) above secured by (or for which the holder of such Debt
has an existing right, contingent or otherwise, to be secured by)
any Lien, security interest or other charge or encumbrance upon or
in property (including, without limitation, accounts and contract
rights) owned by such Person, even though such Person has not
assumed or become liable for the payment of such Debt. For the
purposes of the calculation of the financial covenants set forth in
Section 7.2, Debt of any entity in which a Person owns an ownership
interest shall be calculated on a Pro Rata basis, unless such
Person has delivered a guaranty or other indemnity in connection
with such Debt creating a greater proportionate liability, in which
event, such greater liability shall apply.
“
Debt Service Coverage Ratio” has the meaning ascribed
to such term in Section 7.3.
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“
Default ” means any event or condition which with
notice, passage of time or both, would constitute an Event of
Default.
“
Default Rate ” means, with respect to the principal
amount of the Loan or any other amounts payable under any other
Loan Document, an annual rate equal to the sum of (i) four percent
(4%) per annum plus the interest rate per annum otherwise in effect
with respect to such amounts.
“
Development Assets ” shall mean Individual Properties
as to which construction of the associated or contemplated
improvements has commenced (either new construction or substantial
renovation) but has not yet been completed such that a certificate
of occupancy (or the local equivalent) for a substantial portion of
the intended improvements has not yet been issued or, for any
completed project, until the earlier to occur of (a) such
Individual Property becoming a Stabilized Asset, or (b) one hundred
eighty (180) days after completion.
“
Dollar ”, “ Dollars ” and the
symbol “ $ ” means lawful money of the United
States of America.
“
EDU’s ” has the meaning ascribed to such term in
Section 5.2.
“
Eligible Institution ” means (i) Lender; (ii) an
Affiliate of Lender: (iii) a commercial bank organized under the
laws of the United States, or any State thereof, and having a
combined capital and surplus of at least $1,000,000,000.00; (iv) a
savings and loan association or savings bank organized under the
laws of the United States, or any State thereof, and having a
combined capital and surplus of at least $1,000,000,000.00; (v) a
commercial bank organized under the laws of any other country that
is a member of the Organization for Economic Cooperation and
Development or has concluded special lending arrangements with the
International Monetary Fund associated with its General
Arrangements to Borrow or under the laws of a political subdivision
of any such country, and having a combined capital and surplus of
at least $1,000,000,000.00, so long as such bank is acting through
a branch or agency located in the United States; and (vi) a finance
company, insurance company or other financial institution or fund
(whether a corporation, partnership, trust or other entity) that is
engaged in making, purchasing or otherwise investing in commercial
loans in the ordinary course of its business and having a combined
capital and surplus or total assets of at least $500,000,000.00;
provided, however, that neither the Borrower nor any Affiliate of
Borrower shall qualify as an Eligible Institution under this
definition.
“
Engineer ” shall mean Grove Associates, Inc. as to
civil engineering and Grove Miller Engineering, Inc. as to traffic
engineering. Upon execution of the Engineer’s Agreement for
the design of any building of the Future Components, such term
shall include the engineer named in such agreement.
“
Engineer’s Agreement ” shall mean (a) the
contract dated January 6, 2003, between Grove Associates, Inc. and
Borrower for civil engineering services, and (b) the contract dated
December 24, 2002, between Grove Miller Engineering, Inc. and
Borrower for traffic engineering services, as each such contract
may be amended in compliance with the Loan Documents. Upon
execution of the engineer’s contract for the design of any
building of the Future Components, such term shall include such
contract, as it may be amended in compliance with the Loan
Documents.
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“
Environmental Agreement ” has the meaning ascribed to
such term in Section 2.3.
“
Equity ” has the meaning ascribed to such term in
Section 9.8.
“
Event of Default ” means any of the Events of Default
described in Section 10.1 of this Agreement or any Event of Default
described in the applicable provisions of any other Loan
Document.
“
Existing Improvements ” has the meaning ascribed to
such term in the Background of this Agreement.
“
Existing Leases ” has the meaning ascribed to such
term in Section 5.2.
“
Existing Loan ” means the $14,000,000 loan made to
Borrower by Lender and secured by a first mortgage lien on the
Project.
“Existing
Loan Document” means any document governing, evidencing,
securing or otherwise relating to the Existing Loan.
“
Existing Manager ” means Cedar Shopping Centers
Partnership, L.P. as successor by merger to Brentway Management,
LLC.
“
Financing Statements ” has the meaning ascribed to
such term in Section 2.3.
“
FIRREA ” means the Financial Institution’s
Reform, Recovery and Enforcement Act of 1989, as amended, and any
successor statute of similar import, and regulations thereunder, in
each case as in effect from time to time.
“
Force Majeure ” means any matter beyond the reasonable
control of Borrower which causes a delay in the performance by
Borrower of any of the terms, covenants, and conditions of this
Agreement, which matters shall include, but not be limited to,
labor disputes, governmental regulations or controls, fire or other
casualty, inability to obtain any material or services and acts of
God.
“
Future Components ” has the meaning ascribed to such
term in the Background of this Agreement.
“
Future Construction Component ” has the meaning
ascribed to such term in Section 9.3.
“
Future Component Leases ” has the meaning ascribed to
such term in Section 9.3.
-6-
“
GAAP ” has the meaning ascribed to such term in
Section 1.3.
“
General Contractor ” means Ames Construction, Inc.
Upon execution of a contract for the construction of the Orthopedic
Center and Future Components , such term shall include the
contractor under such contracts.
“
General Partner ” has the meaning ascribed to such
term in Section 5.1(b).
“
Giant Accordion Component ” has the meaning ascribed
to such term in Section 9.3.
“
Governmental Approvals ” has the meaning ascribed to
such term in Section 5.2.
“
Governmental Authority ” means any government or
political subdivision or any agency, authority, bureau, central
bank, commission, department or instrumentality of either, or any
court, tribunal, grand jury or arbitrator, in each case whether
foreign or domestic.
“
Ground Leases ” mean, from time to time, any ground
lease relative to an Individual Property.
“
Guarantor ” means each of Cedar Shopping Centers,
Inc., a Maryland corporation and Cedar Shopping Centers
Partnership, L.P., a Delaware limited partnership and “
Guarantors ” is a collective reference to all such
Persons, jointly and severally.
“
Hard Cost Contingency ” has the meaning ascribed to
such term in Section 9.7.
“
Improvements ” has the meaning ascribed to such term
in the Background of this Agreement. The existing Giant supermarket
building shall cease to be an Improvement upon the completion of
its demolition following Giant’s acceptance and occupancy of
the New Giant Store.
“
Indemnitees ” has the meaning ascribed to such term in
Section 11.11.
“
Individual Property ” and “ Individual
Properties ” mean, from time to time, all real estate
property owned or ground leased by any Consolidated CSC Entity or
Unconsolidated CSC Entity, together with all improvements,
fixtures, equipment, and personality relating to such
property.
“
Individual Property Lease ” means any lease relative
to all or any portion of an Individual Property.
“
Individual Property Net Operating Income ” means for
any period of determination, (i) net operating income generated by
an Individual Property for such period (i.e. gross operating
income, inclusive of any rent loss insurance, less expenses
(exclusive of debt service, capital expenditures, vacancy
allowances, depreciation and amortization)), determined in
accordance with GAAP, as generated by, through or under Individual
Property Leases, and (ii) all other income arising from direct
operations of or licenses or operating agreements for any part of
the Individual Property determined on a GAAP basis. For purposes
hereof, all rental income shall be adjusted for straight line
rents. Borrower shall provide Lender with all information and
materials required by Lender necessary for the determination of
Individual Property Net Operating Income. If any Individual
Property Leases are scheduled to expire during such period of
determination, no rents or other amounts payable under such
Individual Property Leases with respect to any portion of such
period occurring after such scheduled expiration date shall be
included in the determination of Individual Property Net Operating
Income. If any Individual Property Leases are scheduled to commence
(and rent and occupancy pursuant thereto are also scheduled to
commence) during such period of determination, the rents and other
amounts payable under such Individual Property Leases with respect
to any period occurring after the scheduled commencement date shall
be included in the determination of Individual Property Net
Operating Income for such period.
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“Interest Period” means initially, the period
commencing as of the date of this Agreement (the “Start
Date”) and ending on the numerically corresponding date one
month later, and thereafter each one month period ending on the day
of such month that numerically corresponds to the Start Date. If an
Interest Period is to end in a month for which there is no day
which numerically corresponds to the Start Date, the Interest
Period will end on the last day of such month.
“Interest Payment Date” the date of each month
which numerically corresponds to the Start Date. If a month does
not contain a day that numerically corresponds to the Start Date,
the Interest Payment Day shall be last day of such
month.
“
In-Line Renovations ” has the meaning ascribed to such
term in the Background of this Agreement.
“
Land Assets ” shall mean Individual Properties
constituting raw or undeveloped land as to which construction of
contemplated improvements has not commenced or which does not
generate rental revenues under a Ground Lease.
“
Law ” means any law (including common law),
constitution, statute, treaty, regulation, rule, ordinance, order,
guideline, injunction, writ, decree or award of, or any permit.
approval or license granted by, any Governmental Authority,
including without limitation those relating to tax, zoning,
subdivision, building, safety, fire protection, accessibility to,
usability by or discrimination against disabled individuals or
environmental matters.
“
Leasable Space ” means leasable floor space in
Improvements owned by Borrower.
“
Lender ” has the meaning ascribed to such term in the
preamble of this Agreement.
“
Leverage Ratio ” means the quotient (expressed as a
percentage) resulting from dividing (i) the aggregate of all Debt
of the Consolidated CSC Entities and the Unconsolidated CSC
Entities by (ii) the Total Asset Value.
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“LIBOR Rate” means relative to any Interest
Period, the offered rate for delivery in two London Banking Days
(as defined below) of deposits of U.S. Dollars which the British
Bankers’ Association fixes as its LIBOR rate as of 11:00 a.m.
London time on the day on which the Interest Period commences, and
for a period approximately equal to such Interest Period. If the
first day of any Interest Period is not a day which is both a (i)
Business Day, and (ii) a day on which US dollar deposits are
transacted in the London interbank market (a “London Banking
Day”), the LIBOR Rate shall be determined in reference to the
next preceding day which is both a Business Day and a London
Banking Day. If for any reason the LIBOR Rate is unavailable and/or
the Bank is unable to determine the LIBOR Rate for any Interest
Period, the LIBOR Rate shall be deemed to be equal to the
Bank’s Prime rate.
“
Lien ” shall mean any mortgage, deed of trust, lien,
pledge, hypothecation, assignment, security interest, or any other
encumbrance, charge or transfer, including, without limitation, any
conditional sale or other title retention agreement, any financing
lease having substantially the same economic effect as any of the
foregoing, and mechanic’s, materialmen’s and other
similar liens and encumbrances.
“
Loan ” has the meaning ascribed to such term in the
Background of this Agreement.
“
Loan Documents ” has the meaning ascribed to such term
in Section 2.3.
“
Loan Fee ” has the meaning ascribed to such term in
Section 7.21.
“
Major Lease ” shall mean any Approved Lease of 20,000
or more square feet of Leasable Space.
“
Management Agreement ” means the contract dated
__________, 2002 between Borrower and Existing Manager relating to
management of the Improvements in the Project, as it may be amended
in compliance with the Loan Documents. If Borrower enters into a
management agreement with respect to the Future Components, such
term shall include such management agreement, as it may be amended
in compliance with the Loan Documents.
“
Maturity Date ” has the meaning ascribed to such term
in Section 4.1.
“
Minor Lease ” shall mean any Approved Lease of less
than 10,000 square feet of Leasable Space.
“
Monetary Default ” means a Default consisting of the
failure to pay when due (time being of the essence) principal or
interest on the Loan.
“
Municipal Authority ” has the meaning ascribed to such
term in Section 9.5.
“
Municipal Improvement Agreement ” has the meaning
ascribed to such term in Section 9.5.
“
Municipal Letter of Credit ” has the meaning ascribed
to such term in Section 9.5.
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“
Municipal Site Improvements ” has the meaning ascribed
to such term in Section 9.5.
“
New Giant Store ” has the meaning ascribed to such
term in the Background of this Agreement.
“
Giant Accordion Component Rent Increase Election ” has
the meaning ascribed to such term in Section 9.3.
“
New Improvements ” has the meaning ascribed to such
term in the Background of this Agreement.
“
Note ” means the Promissory Note of Borrower
evidencing the Loan, together with any allonges thereto, from time
to time; and any promissory note issued in substitution therefor
pursuant to the terms hereof, together with all extensions,
renewals, refinancings or refundings thereof in whole or part, in
each case as the same may be amended, modified, restated or
supplemented from time to time.
“
Obligations ” shall mean all indebtedness, obligations
and liabilities of Borrower to Lender from time to time arising
under or in connection with or related to or evidenced by or
secured by this Agreement or any other Loan Document, and all
extensions, renewals or refinancings thereof, whether such
indebtedness, obligations or liabilities are direct or indirect,
otherwise secured or unsecured, joint or several, absolute or
contingent, due or to become due, whether for payment or
performance, now existing or hereafter arising. Without limitation
of the foregoing, such indebtedness, obligations and liabilities
include the principal amount of all Advances (whether or not the
Advances were made in compliance with the terms and conditions of
this Agreement or in excess of the obligation of Lender to lend),
interest, fees, indemnities or expenses under or in connection with
this Agreement or any other Loan Document, and all extensions,
renewals and refinancings thereof. Obligations shall remain
Obligations notwithstanding any assignment or transfer or any
subsequent assignment or transfer of any of the Obligations or any
interest therein.
“
Occupancy Ratio ” means the ratio (as determined by
Bank of America under that certain Loan Agreement dated January 30,
2004, as amended, between Bank of America, as Administrative Agent,
and Cedar Shopping Centers Partnership, L.P., as Borrower, as
amended, or if such Loan Agreement be terminated or such
determination be not made, as reasonably and consistently
determined by management of Guarantors and certified to Lender) of
the rentable square footage of an Individual Property as to which
tenants are in physical occupancy and paying rent, to the total
rentable square footage thereof.
“
Orthopedic Center ” has the meaning ascribed to such
term in the Background of this Agreement.
“
Orthopedic Center Leases ” has the meaning ascribed to
such term in Section 9.4.
-10-
“
Person ” means an individual, corporation,
partnership, trust, unincorporated association, limited liability
company, joint venture, joint-stock company, Governmental Authority
or any other entity.
“
Plans and Specifications ” has the meaning ascribed to
such term in Section 5.2 and includes any amendments made to the
Plans and Specifications in compliance with the Loan
Documents.
“
Premises ” has the meaning ascribed to such term in
the Background of this Agreement.
“
Prime Rate ” means the rate publicly announced by
Lender from time to time as its prime rate. The Prime Rate is
determined from time to time by Lender as a means of pricing some
loans to its borrowers. The Prime Rate is not tied to any external
rate of interest or index, and does not necessarily reflect the
lowest rate of interest actually charged by Lender to any
particular class or category of customers. If and when the Prime
Rate changes, the rate of interest with respect to any amounts
hereunder to which the Prime Rate applies will change automatically
without notice to Borrower, effective on the date of any such
change.
“
Project ” has the meaning ascribed to such term in the
Background of this Agreement.
“
Pro Rata ” means a calculation based on the percentage
of the Capital Stock of or other equity interest in any Person
owned, directly or indirectly, by either Guarantor.
“
Reference Banks ” means four major banks in the London
interbank market.
“
Schedule of Project Costs ” has the meaning ascribed
to such term in Section 5.2.
“
Second Assignment of Leases and Rents ” has the
meaning ascribed to such term in Section 2.3.
“
Second General Collateral Assignment ” has the meaning
ascribed to such term in Section 2.3.
“
Second Mortgage ” has the meaning ascribed to such
termin Section 2.3.
“
Site Work ” has the meaning ascribed to such term in
the Background of this Agreement.
“
Stabilized Asset ” shall mean an Individual Property
which has an Occupancy Ratio of equal to or greater than eighty
percent (80%).
“
Sole Member ” has the meaning ascribed to such term in
Section 5.1(a).
“
Surety Agreement ” has the meaning ascribed to such
term in Section 2.3.
-11-
“
Taxes ” means any present or future income, excise,
stamp or franchise taxes and other taxes, fees, duties,
withholdings or other charges of any nature whatsoever imposed by
any federal, state, local or foreign taxing authority.
“
Total Asset Value ” means the aggregate of:
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(a)
for all Individual Properties (which are not Individual Properties
acquired within the prior 90 days from the Calculation Date,
Development Assets, or Land Assets), the Pro Rata share of the
Calculation Period’s aggregate Adjusted Net Operating Income
for all such Individual Properties, annualized, capitalized at a
rate of 9.00%, plus |
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(b)
for Land Assets, and for all Individual Properties which were
acquired within the prior 90 days from the Calculation Date, the
Pro Rata share of the undepreciated Book Value as of the
Calculation Date; plus |
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(c)
for Development Assets, at the Borrower’s option, either the
Pro Rata share of the undepreciated Book Value as of the
Calculation Date or the Pro Rata share of the Calculation
Period’s aggregate Adjusted Net Operating Income for such
Development Asset, annualized, capitalized at a rate of 9.00%;
plus |
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(d)
for all unencumbered cash and cash equivalent investments,
restricted cash held by a qualified intermediary, and escrows owned
by the Guarantors, the Pro Rata share of the Book Value as of the
Calculation Date of such assets; plus |
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(e)
deposits corresponding to outstanding Letters of
Credit. |
| |
|
| |
The
Pro Rata Share of Development Assets completed within the prior 90
days from a Calculation Date will be valued as set forth in (c)
above for a maximum of one hundred eighty(180) days from completion
(and continuing until end of such Calculation Period) and based on
Adjusted Net Operating Income under subsection (a) above
thereafter. |
“
Unconsolidated CSC Entity ” or “
Unconsolidated CSC Entities ” means each Person as to
which either Guarantor owns, directly or indirectly, and Capital
Stock, but which is not a Wholly-Owned Subsidiary of either
Guarantor.
“
Wholly-Owned Subsidiary ” shall mean, with respect to
any Person, another Person of which one hundred percent (100%) of
the Capital Stock is owned, directly or indirectly, by such
Person.
| 1.2.
Construction . In this
Agreement and each other Loan Document, unless the context
otherwise clearly requires, |
| |
|
|
(a) references
to the plural include the singular, the singular the plural and the
part the whole; |
-12-
|
(b) “or” has the
inclusive meaning represented by the phrase
“and/or;” |
| |
|
(c) the
terms “property” and “assets” each include
all properties and assets of any kind or nature, tangible or
intangible, real, personal or mixed, now existing or hereafter
acquired; |
| |
|
(d) the
words “hereof,” “herein” and
“hereunder” (and similar terms) in this Agreement or
any other Loan Document refer to this Agreement or such other Loan
Document, as the case may be, as a whole and not to any particular
provision of this Agreement or such other Loan
Document; |
| |
|
(e) the
words “includes” and “including” (and
similar terms) in this Agreement or any other Loan Document mean
“includes, without limitation” and “including,
without limitation,” respectively whether or not stated;
and |
| |
|
(f) references to
“determination” (and similar terms) by Lender include
good faith estimates by Lender (in the case of quantitative
determinations) and good faith beliefs by Lender (in the case of
qualitative determinations). |
No doctrine of
construction of ambiguities in agreements or instruments against
the interests of the party controlling the drafting thereof shall
apply to this Agreement or any other Loan Document. The section and
other headings contained in this Agreement and in each other Loan
Document, and any tables of contents contained herein or therein,
are for reference purposes only and shall not affect the
construction or interpretation of this Agreement or such other Loan
Document in any respect.
| 1.3.
Accounting Principles . As
used herein, “GAAP” shall mean generally accepted
accounting principles (other than as set forth herein as to
consolidation) in the United States, applied on a consistent basis.
When the word “consolidated” is used in this Agreement,
it shall be used in a manner consistent with generally accepted
accounting principles in the United States. |
| |
|
(a) Except
as otherwise provided in this Agreement (including Section 7.2),
all computations and determinations as to accounting or financial
matters shall be made, and all financial statements to be delivered
pursuant to this Agreement shall be prepared, on a compilation
basis in accordance with GAAP and all accounting or financial terms
shall have the meanings ascribed to such terms by GAAP; provided
that if because of a change in GAAP after the Closing Date Borrower
would be required to alter a previously utilized accounting
principle, method or policy in order to remain in compliance with
GAAP, such determination shall continue to be made in accordance
with Borrower’s previous accounting principles, methods and
policies unless otherwise agreed by Lender. |
| |
|
2.1.
Commitment to Lend; Purpose; Amount . Subject to the terms,
provisions and conditions contained in this Agreement, Lender
agrees to make Advances of the Loan to Borrower. The Advances shall
not exceed in the aggregate the stated principal amount of the
Loan. |
-13-
| 2.2.
Promissory Note .
Borrower’s obligation to repay the Loan with interest in
accordance with the terms of this Agreement shall be evidenced by
the Note payable to the order of Lender. |
| |
| 2.3.
Loan Documents . As security
for the Note and the performance by Borrower of its obligations
hereunder and thereunder, the following documents are being
executed and delivered to Lender simultaneously
herewith: |
| |
|
(a) A
Second Open-end Mortgage and Security Agreement dated this date (as
amended, modified or supplemented from time to time, the “
Second Mortgage ”) executed by Borrower in favor of
Lender, encumbering the Premises, the improvements now or hereafter
erected thereon, including the Improvements, and all building
materials, equipment, furniture and fixtures necessary or
incidental to the operation, use, and maintenance thereof, and all
renewals and replacements thereof or additions thereto, all as more
specifically described in the Second Mortgage; |
| |
|
(b) A
Second Assignment of Leases and Rents dated this date (as amended,
modified or supplemented from time to time, the “ Second
Assignment of Leases and Rents ”) executed by Borrower in
favor of Lender, assigning to Lender all of Borrower’s right,
title and interest in and to all existing and future leases, rents
and agreements of sale affecting all or any part of the Project
including Approved Leases; |
| |
|
(c) A
Second General Collateral Assignment and Security Agreement dated
this date (as amended, modified or supplemented from time to time,
the “ Second General Collateral Assignment ”)
executed by Borrower in favor of Lender, pursuant to which Borrower
assigns to Lender all of Borrower’s right, title and interest
in and to all contracts, and agreements (including, without
limitation, all development agreements, construction contracts,
architect’s agreements and management agreements), licenses,
permits, approvals, guarantees, and similar items with respect to
the ownership, construction and operation of the
Project; |
| |
|
(d) An
Environmental Indemnity Agreement dated this date (as amended,
modified or supplemented from time to time, the “
Environmental Agreement ”) executed by Borrower in
favor of Lender, pursuant to which Borrower provides certain
assurances and indemnities to Lender with respect to environmental
matters; |
| |
|
(e) Financing Statements (as
amended, modified or supplemented from time to time, the “
Financing Statements ”) executed by Borrower in favor
of Lender, pursuant to which the personal property security
interests granted to Lender in the Loan Documents are to be
perfected; |
| |
|
(f) A
Guaranty and Suretyship Agreement dated this date (as amended,
modified or supplemented from time to time, the “ Surety
Agreement ”) executed by Guarantors in favor of Lender,
pursuant to which Guarantors jointly and severally guarantee and
become sureties to Lender for the payment and performance of
certain of Borrower’s obligations under this Agreement and
under the other Loan Documents in accordance with the terms and
conditions set forth therein; |
-14-
|
(g) A Borrower’s
Certificate dated this date (as amended, modified or supplemented
from time to time, the “Borrower’s Certificate”)
executed by Borrower, certifying copies of certain contracts and
agreements. |
Borrower shall execute
and deliver such additional documents and instruments as Lender
shall reasonably require in order to perfect Lender’s lien on
or security interest in the foregoing property. This Agreement, the
Note, the Second Mortgage, the Second Assignment of Leases and
Rents, the Second General Collateral Assignment, the Environmental
Agreement, the Financing Statements, the Surety Agreement and the
Borrower’s Certificate, and all other agreements and
instruments evidencing or securing the Loan, in each case as the
same may be amended, modified or supplemented from time to time
hereafter, are hereinafter collectively referred to as the “
Loan Documents ”. All of the Loan Documents shall be
in form and substance satisfactory to Lender, and all necessary
filing and recording fees with respect thereto shall be paid by
Borrower. The Loan Documents shall be subordinate only to the
interests of Lender under the Existing Loan Documents.
| 2.4.
Additional Security . As
additional security for the Note and all of Borrower’s
obligations thereunder and hereunder, Borrower hereby irrevocably
pledges and assigns to Lender and grants to Lender a first lien
security interest in all of its right, title and interest in and to
(i) all Loan funds held by Lender, whether or not disbursed, (ii)
all funds deposited by Borrower with Lender or its designee under
this Agreement or otherwise, (iii) all other bank accounts of
Borrower and all reserves, deferred payments, deposits, refunds,
cost savings and payments of any kind relating to the Project
(collectively, the “ Additional Security
”). |
|
| |
|
(b) Borrower shall execute and
deliver such additional documents and instruments as Lender
reasonably shall require in order to perfect Lender’s lien on
or security interest in any of the Additional Security, including a
photocopy or reproduction of this Agreement (which shall be deemed
to be a security agreement under the Uniform Commercial Code) or
any Financing Statement. Borrower authorizes Lender or its designee
to take any action and execute any instrument which Lender may
reasonably deem necessary and appropriate to accomplish the
purposes of the foregoing sentence. |
| |
Article 3
INTEREST RATE PROVISIONS |
| |
|
(a) Interest Rate .
Subject to the provisions of subsection (b) hereof, interest on the
outstanding principal amount of the Loan shall accrue during the
Interest Period applicable thereto at a rate equal to the sum of
the LIBOR Rate for such Interest Period plus the Applicable Margin
thereto and be payable on each Interest Payment Date. |
-15-
|
(b) Default Rate . The
principal balance outstanding under the Loan and any other amounts
payable under any of the Loan Documents from time to time shall
bear interest at the Default Rate (i) following the occurrence and
during the continuance of an Event of Default (regardless of
whether payment of the Loan has been accelerated) and (ii) unless
the term of the Loan is extended pursuant to written agreement
between Borrower and Lender, between the Maturity Date and the date
on which the Loan is paid in full. |
| |
|
(c) Usurious Rate .
All agreements between Borrower and Lender are hereby expressly
limited so that in no contingency or event whatsoever, whether by
reason of acceleration of maturity of the Loan or otherwise shall
the amount paid or agreed to be paid to Lender for the use or the
forbearance of the indebtedness evidenced hereby exceed the maximum
permissible under applicable law. As used herein, the term
“applicable law” shall mean the law in effect as of the
Closing Date; provided, however, that in the event there is a
change in the law which results in a higher permissible rate of
interest, then the Loan Documents shall be governed by such new law
as of its effective date. In this regard, it is expressly agreed
that it is the intent of Borrower and Lender in the execution,
delivery and acceptance of the Loan Documents to contract in strict
compliance with the applicable laws from time to time in effect.
If, under or from any circumstances whatsoever, fulfillment of any
provision hereof or of any of the Loan Documents at the time of
performance of such provision shall be due, shall involve
transcending the limit of such validity prescribed by applicable
law, then the obligation to be fulfilled shall automatically be
reduced to the limits of such validity, and if under or from
circumstances whatsoever Lender should ever receive as interest an
amount which would exceed the highest lawful rate, such amount
which would be excessive interest shall be applied to the reduction
of the principal balance evidenced hereby and not to the payment of
interest. This provision shall control every other provision of all
agreements between Borrower and Lender. |
| |
| 3.2.
Computation of Interest .
Interest shall be computed on the basis of a year of three hundred
sixty (360) days and paid for the actual number of days elapsed.
Interest for any period shall be calculated from and including the
first day thereof to but excluding the last day
thereof. |
| |
| 3.3.
Taxes. All payments by Borrower of
principal of, and interest on, the Loan and all other amounts
payable under this Agreement shall be made free and clear of and
without deduction for any Taxes (other than franchise taxes and
taxes imposed on or measured by Lender’s net income or
receipts). In the event that any withholding or deduction from any
payment to be made by Borrower hereunder is required in respect of
any such Taxes pursuant to any applicable law, rule or regulation,
then Borrower will |
| |
|
(i) pay
directly to the relevant authority the full amount required to be
so withheld or deducted, |
| |
|
(ii) promptly forward to
Lender an official receipt or other documentation satisfactory to
Lender evidencing such payment to such authority, and |
-16-
|
(iii) pay to Lender such
additional amount or amounts as may be necessary to ensure that the
net amount actually received by Lender will equal the full amount
Lender would have received had no such withholding or deduction
been required. |
| |
|
(b) If any
such Taxes are directly asserted against Lender with respect to any
payment received by Lender under this Agreement, Lender may pay
such Taxes and Borrower will promptly pay such additional amount
(including any penalties, interest or expenses, unless the same
result from Lender’s failure to pay any such tax when due if
Lender received the tax bill at least fifteen (15) days before its
due date) as is necessary in order that the net amount received by
Lender after the payment of such Taxes (including any such Taxes on
such additional amount) shall equal the amount Lender would have
received had such Taxes not been asserted. |
| |
|
(c) If
Borrower fails to pay any such Taxes when due to the appropriate
taxing authority or fails to remit to Lender the required receipts
or other required documentary evidence, Borrower shall indemnify
Lender for any incremental amount of such Taxes, interest or
penalties that may become payable by Lender as a result of any such
failure. |
| |
Article 4
LOAN PAYMENT PROVISIONS; MATURITY DATE |
| |
| 4.1.
Interest and Principal Payments;
Maturity Date . |
| |
|
(a) Interest on the unpaid
principal balance of the Loan outstanding from time to time at the
applicable rate determined pursuant to Article 3 shall be payable
on each applicable Interest Payment Date beginning with the first
Interest Payment Date following the Closing Date. |
| |
|
(b) The
unpaid principal balance of the Loan then outstanding together with
all accrued and unpaid interest shall become due and payable on the
date which is thirty-six (36) months after the Closing Date
(“ Maturity Date ”). |
| |
| 4.2.
Prepayments . Borrower shall
have the right to prepay all or any portion of the unpaid principal
balance of the Loan, provided (i) Borrower shall give Lender notice
of any prepayment of the Loan not less than fifteen (15) days
before the date of such prepayment, and (ii) Borrower shall
concurrently prepay a ratable portion of the Existing Loan. Notice
of prepayment shall specify the amount of the prepayment, the date
such prepayment is to be made and shall include a copy of the
agreement of sale or commitment letter for refinancing
precipitating such prepayment (if any). |
| |
| 4.3.
Application of Payments . Any
payment, whether voluntary or involuntary, shall be applied first
to the payment of all fees, expenses and other amounts which may be
payable to Lender under the Loan Documents up to the date of such
payment (excluding principal and interest), then to accrued and
unpaid interest under the Loan up to the date of such payment, and
then to the outstanding principal balance of the Loan and the
acceptance of any such prepayment when there is an Event of Default
in existence under any of the Loan Documents shall not constitute a
waiver, release or accord and satisfaction thereof or of any rights
with respect thereto by Lender. |
-17-
| 4.4.
Late Payment Charge . There
shall be a late payment charge computed at the rate of five cents
($.05) for each dollar (or part thereof) of any principal or
interest amount not paid within ten (10) days after its due
date. |
| 4.5.
Payments by Borrower in
General . Time, Place and Manner . All payments due to
Lender under the Loan Documents shall be made to Lender at the
office designated for Lender in Section 11.1 or to such other
Person or at such other address as Lender may designate by prior
written notice to Borrower. Except as otherwise set forth in this
Agreement, a payment shall not be deemed to have been made on any
day unless such payment has been received by the required Person,
at the required place of payment, in Dollars in funds immediately
available to such Person, no later than 1:00 p.m. (Philadelphia,
Pennsylvania time) on such day. |
|
(b) No
Reductions . All payments due to Lender under this Agreement
and the other Loan Documents, shall be made by Borrower without any
reduction or deduction whatsoever, including any reduction or
deduction for any charge, set-off, hold back, recoupment or
counterclaim (whether sounding in tort, contract or
otherwise). |
| |
|
(c)
Authorization to Charge Accounts . During the term of the
Loan, all payments due to Lender under this Agreement and the other
Loan Documents (including monthly installments on account of
principal and interest) shall be made by direct debit from an
account designated and maintained by Borrower with Lender, and
Borrower shall execute Lender’s standard forms to authorize
such direct debit; provided, however, that such authorization shall
not relieve Borrower from any of its obligations under this
Agreement or any other Loan Document. Borrower hereby authorizes
Lender to charge any amounts due under this Agreement against any
or all of the demand deposit or other accounts of Borrower with
Lender (whether maintained at a branch or office located within or
outside of the United States). |
| |
Article 5
REPRESENTATIONS AND WARRANTIES |
| |
| 5.1.
Relating to Borrower and its
Affiliates . Borrower represents and warrants to Lender
that: |
| |
|
(a) Borrower is a single
purpose limited liability company duly organized, validly existing
and in good standing under the laws of the State of Delaware, has
the power and authority to own and operate the Project, and is
qualified to transact business in, and is validly subsisting under
the laws of the Commonwealth of Pennsylvania. The sole member of
Borrower is Cedar Shopping Centers Partnership, L.P., a Delaware
limited partnership (“ Sole Member ”). True and
correct copies of the limited liability company agreement and
Certificate of Formation, together with any and all amendments
thereto for Borrower, have been furnished to Lender and the same
are in full force and effect as of the Closing Date. None of the
ownership interests of Borrower has been offered, issued,
distributed or sold in violation of any state or federal securities
laws. |
-18-
|
(b) Sole
Member is a limited partnership duly formed, validly subsisting and
in good standing under the laws of the State of Delaware. The sole
general partner of Sole Member is Cedar Shopping Centers, Inc., a
Maryland corporation (“General Partner”). True and
correct copies of Sole Member’s Partnership Agreement and
Certificate of Limited Partnership, together with any and all
amendments thereto, have been furnished to Lender and the same are
in full force and effect as of the date of this Agreement. None of
the ownership interests of Sole Member has been offered, issued,
distributed or sold in violation of any state or federal securities
laws. |
| |
|
(c) General Partner is a
corporation duly organized, validly existing and in good standing
under the laws of the State of Maryland. General Partner owns 98%
of the ownership interests in Sole Member. True and correct copies
of General Partner’s Certificate of Incorporation and Bylaws,
together with any and all amendments thereto, have been furnished
to Lender and the same are in full force and effect as of the
Closing Date. None of the shares of stock or other ownership
interests of General Partner has been offered, issued, distributed
or sold in violation of any state or federal securities
laws. |
| |
|
(d) Existing Manager is Sole
Member. |
| |
|
(e) Borrower has all requisite
power and authority to own and operate the Project and to carry on
its business as now conducted and as presently planned to be
conducted. Without limiting the generality of the foregoing,
Borrower: (i) has the power to engage in all the transactions
contemplated by this Agreement, and (ii) has full power, authority
and legal right to execute and deliver, and to comply with the
provisions of this Agreement and the other Loan Documents to be
executed by Borrower and all other documents relating hereto or
thereto, which documents constitute the legally binding obligations
of Borrower, enforceable against Borrower in accordance with their
respective terms except as the enforceability thereof may be
limited by bankruptcy, insolvency or other similar Laws of general
application affecting the enforcement of creditor’s
rights. |
| |
|
(f) There
is no suit, action, proceeding or investigation pending or to the
knowledge of Borrower threatened against or affecting Borrower or
the Project. There is no suit, action, proceeding or investigation
pending or to the knowledge of Borrower threatened against Borrower
or either Guarantor which, if adversely resolved, would: (i)
adversely affect the Project, (ii) adversely affect the ability of
Borrower or either Guarantor to perform its obligations under the
Loan Documents or the ability of either Guarantor to perform any of
his obligations under the Surety Agreement, as applicable, or (iii)
adversely affect the business, operations, condition (financial or
otherwise) or prospects of Borrower or either
Guarantor. |
| |
|
(g) No
consent, approval or other authorization of or by any court,
administrative agency or other governmental authority is required
in connection with the execution or delivery by Borrower of this
Agreement or any other Loan Document or compliance with the
provisions hereof or thereof. |
-19-
|
(h) Neither the execution nor
delivery of this Agreement or any other Loan Document will conflict
with or result in a breach of any applicable Law of any court,
administrative agency or other Governmental Authority, or of any
agreement or other instrument to which Borrower is a party or by
which it is bound, or constitute a default under any thereof, or
except as expressly contemplated herein, result in the creation or
imposition of any lien, charge or encumbrance upon any property of
Borrower. |
| |
|
(i) The consolidated financial
statements of Guarantors, copies of which have been furnished to
Lender, fairly and accurately reflect the financial condition of
each such Guarantor as of the dates thereof, and there has been no
material adverse change in the financial condition of either such
Guarantor since such dates. |
| |
|
(j) Any and all federal, state
and local income tax returns required to have been filed by each
Guarantor have been filed, or extensions for the filing thereof
have been filed, and all taxes reflected upon any such tax returns,
all past due taxes, interest and penalties and all estimated
payments required to be paid to date have been paid. |
| |
|
(k) Neither Borrower nor
either Guarantor has applied for or consented to the appointment of
a receiver, trustee or liquidator of itself or any of its property,
admitted in writing its inability to pay debts as they mature, made
a general assignment for the benefit of creditors, been adjudicated
a bankrupt or insolvent or filed a voluntary petition in
bankruptcy, or a petition or an answer seeking reorganization or an
arrangement with creditors or to take advantage of any bankruptcy,
reorganization, insolvency, readjustment of debt, dissolution or
liquidation law or statute, or an answer admitting the material
allegations of a petition filed against it in any proceeding under
any such law, and no action has been taken by it for the purpose of
effecting any of the foregoing. No order, judgment or decree has
been entered by any court of competent jurisdiction approving a
petition seeking reorganization of the Borrower or either Guarantor
of all or a substantial part of the assets of the Borrower or
either Guarantor, or appointing a receiver, sequestrator, trustee
or liquidator of it or any of its property. |
| |
|
(l) Borrower has not entered
into the Loan with the intent to hinder, delay, or defraud any
creditor, and Borrower has received reasonably equivalent value in
exchange for its obligations under the Loan Documents. Giving
effect to the transactions contemplated by the Loan Documents, the
fair saleable value of Borrower’s assets exceeds and,
immediately following the execution and delivery of the Loan
Documents, will exceed Borrower’s total liabilities,
including subordinated, unliquidated, disputed or contingent
liabilities. Borrower’s assets do not and, immediately
following the execution and delivery of the Loan Documents, will
not constitute unreasonably small capital to carry out its business
as conducted or as proposed to be conducted. Borrower does not
intend to, and does not believe that it will, incur debts and
liabilities (including contingent liabilities and other
commitments) beyond its ability to pay such debts as they mature
(taking into account the timing and amounts to be payable on or in
respect of obligations of Borrower). |
| |
|
(m) Borrower is not a
“foreign person” within the meaning of Section
1445(f)(3) of the Internal Revenue Code. |
| |
|
(n) No Default or Event of
Default has occurred or exists under this Agreement or any other
Loan Document or under any Existing Loan Document. |
-20-
|
5.2.
Relating to the Project . Borrower represents and warrants
to Lender that: |
| |
|
(a) Borrower owns good and
marketable fee simple title to the Project, subject to no lien,
charge or encumbrance except those related to the Existing Loan and
such as are listed as exceptions to title or exclusions from
coverage in the title insurance policy being issued to Lender
concurrently with the execution of the Second Mortgage and pursuant
to Section 8.1(b). |
| |
|
(b) All personal property with
respect to which Borrower has granted to Lender a security interest
pursuant to any of the Loan Documents is otherwise owned by
Borrower free and clear of all liens, encumbrances and security
interests except those related to the Existing Loan. |
| |
|
(c) (i) The Project is subject
to the leases listed and described on Exhibit B attached
hereto and made a part hereof (“ Existing Leases
”). Except for the Existing Leases, the Project is not
subject to any other leases, occupancy rights or similar
arrangements. Except as may be set forth in Exhibit B , none
of the Existing Leases has been amended, modified or supplemented
in any respect or terminated or canceled. The Existing Leases
represent the entire agreements between Borrower and the respective
applicable tenants (“ Existing Tenants ”) with
respect to the lease of the portions of the Project covered
thereby. Each of the Existing Leases is in full force and effect.
Borrower knows of no material defaults under Existing Leases in the
aggregate which, in the judgment of Lender, could have a material
adverse effect on the financial condition of Borrower or the
Project. There are no existing defenses or offsets against the
obligation to pay the rents or other charges due under any of the
Existing Leases or against the enforcement of any of the Existing
Leases by Borrower. Except as may be set forth in Exhibit B
, there are no agreements covering free rent, partial rent, rebate
of rental payments or any other type of rental concessions with
respect to any of the Existing Leases. None of the Existing Leases
contains any options or rights of first refusal to purchase any
portion or all of the Project. There have not been any prepayments
of any rent under any of the Existing Leases more than thirty (30)
days in advance. Except as may be set forth in Exhibit B ,
there is no provision for the payment of any security deposit under
any of the Existing Leases. Borrower has not mortgaged, assigned,
pledged, granted a security interest in or otherwise encumbered its
interest in any of the Existing Leases in favor of any person or
entity other than Lender. |
(ii) Borrower has delivered to Lender a rent roll for the
Project dated within thirty (30) days of the Closing Date, in form
and substance reasonably satisfactory to Lender and certified as
true and correct by Sole Member. For the twelve (12) month period
immediately preceding the effective date of such rent roll, the pro
forma Debt Service Coverage Ratio (on an “as is”
interest only basis) is at least 1.50 to 1.
|
(d) No notice of taking by
eminent domain or condemnation of any part of the Project has been
received, and Borrower has no knowledge that any such proceeding is
contemplated. No part of the Project has been damaged or injured as
a result of any fire, explosion, accident, flood, or other casualty
which is not now fully restored. |
-21-
|
(e) The Premises constitutes a
separate legally subdivided lot for purposes of real estate tax and
assessment purposes. |
| |
|
(f) The Premises abut and have
direct access to a legally open public right-of-way. All streets
necessary for the full utilization of the Project for its intended
purpose have been completed or, if not completed, are located
within the boundaries of the Premises or the necessary rights of
way therefore have been acquired by or dedicated to the appropriate
Governmental Authority. All costs of street improvements to be
completed by Borrower are included in the Schedule of Project
Costs. |
| |
|
(g) Electricity, public
potable water and public sanitary and storm sewerage facilities and
natural gas service are connected to the Premises and are of
sufficient capacity to service the Improvements. Sanitary sewerage
facilities sufficient to serve the Improvements have been
authorized by the reservation and allocation to the Project of
irrevocable equivalent dwelling units (“EDUs”). All
costs for installing and connecting all such utilities (including
tap-in and connection fees) are included in the Schedule of Project
Costs. |
| |
|
(h) (i) Except
for building permits for the construction of Future Components,
which will be obtained prior to commencement of construction of the
applicable building, all necessary approvals from the Governmental
Authorities having jurisdiction over the Project including, but not
limited to, street openings, closings and relocations, zoning
variances and permits, sewer allocation and construction
agreements, environmental permits and approvals, building permits,
highway occupancy permits, and subdivision and land development
approvals (collectively, the “ Governmental Approvals
”), have been obtained for the construction of the Project
and are final, unappealed, and unappealable, and remain in full
force and effect. Borrower has satisfied all conditions imposed by
any Governmental Authority on the grant of the Governmental
Approvals required to be satisfied as of the Closing Date and
necessary to construct the New Improvements except for the Future
Components, and Borrower has full legal right to immediately
commence construction of the New Improvements and diligently
prosecute the same to completion. |
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(ii) Without limiting the
generality of the foregoing, the Premises are located in the CG
Zoning District (Commercial General) in East Pennsboro Township,
and in the CS Zoning District (Regional Shopping Center District)
in the Borough of Camp Hill and Borrower’s proposed
development of the Project is in conformity with the use, zoning,
bulk area and other requirements of the East Pennsboro Township and
Camp Hill Borough Zoning Codes as applicable to it without need for
any variances or special exceptions therefrom. |
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(i) Borrower has delivered to
Lender true, correct and complete copies of the plans and
specifications for construction of the New Improvements other than
the Future Components (the “ Plans and Specifications
”). The Plans and Specifications are satisfactory to Borrower
and have been approved by all applicable Governmental Authorities
and any private party having the contractual right to approve all
or part of the Plans and Specifications. Upon delivery to Lender of
the plans and specifications for the Future Components as required
in this Agreement, the term “Plans and Specifications”
shall include such plans and specifications. |
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(j) Borrower has delivered to
Lender a cost schedule, a copy of which is attached hereto as
Exhibit C and made a part hereof (the “ Schedule of
Project Costs ”), which shows all categories of costs
projected to be incurred in connection with the Project, including
the cost of construction of the New Improvements and certain
related costs and expenses, and the expected sources of funds to
pay such costs. |
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(k) The Project is not subject
to any management agreement or similar arrangement other than the
Management Agreement. True and correct copies of the Management
Agreement, together with any and all amendments thereto, have been
furnished to Lender and is attached to the Borrower’s
Certification, and the Management Agreement has not been otherwise
amended, modified or supplemented in any respect or terminated or
cancelled. The Management Agreement represents the entire agreement
between Borrower and Existing Manager with respect to the
management of the Project. The Management Agreement is in full
force and effect. There is no default in existence under the
Management Agreement. |
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(l) True and correct copies of
the Construction Contract, together with any and all amendments
thereto, have been furnished to Lender and are attached to the
Borrower’s Certification, and the Construction Contract has
not been otherwise amended, modified or supplemented in any respect
or terminated or cancelled. The Construction Contract represents
the entire agreement between Borrower and General Contractor with
respect to the construction of the Project. The Construction
Contract is in full force and effect. There is no default in
existence under the Construction Contract. |
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(m) True and correct copies of
the Architect’s Agreement, together with any and all
amendments thereto, have been furnished to Lender and is attached
to the Borrower’s Certification, and the Architect’s
Agreement has not been otherwise amended, modified or supplemented
in any respect or terminated or cancelled. The Architect’s
Agreement represents the entire agreement between Borrower and
Architect with respect to the design of and architectural services
for the Project. The Architect’s Agreement is in full force
and effect. There is no default in existence under the
Architect’s Agreement. |
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(n) True and correct copies of
the Engineer’s Agreement, together with any and all
amendments thereto, have been furnished to Lender and is attached
to the Borrower’s Certification, and the Engineer’s
Agreement has not been otherwise amended, modified or supplemented
in any respect or terminated or cancelled. The Engineer’s
Agreement represents the entire agreement between Borrower and
Engineer with respect to the design of the Project. The
Engineer’s Agreement is in full force and effect. There is no
default in existence under the Engineer’s
Agreement. |
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5.3.
Material Facts . No statement of fact made by Borrower in
any Loan Documents contains any untrue statement of a material fact
or omits to state any material fact necessary to make statements
contained therein not misleading. There is no material fact
presently known to Borrower that has not been disclosed to Lender
which materially adversely affects, or, as far as Borrower can
foresee, would materially adversely affect, the Project or the
business operations or condition (financial or otherwise) of
Borrower. |
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5.4.
Survival of Representations . All of the representations and
warranties of Borrower in this Agreement shall survive the making
of this Agreement and shall be continuing. Each and every
Application submitted by Borrower for an Advance under this
Agreement shall constitute a new and independent representation and
warranty to Lender that, except as provided in a written notice
given by Borrower to Lender at or before delivery of such
Application, such representations and warranties are true and
correct in all material respects as of the date of each such
Application. |
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Article 6
CONSTRUCTION MATTERS; CONSTRUCTION COVENANTS |
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6.1.
Prosecution and Completion of Construction . |
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(a) To the extent not already
commenced, Borrower shall commence construction of the New
Improvements in accordance with the Plans and Specifications
promptly after the Closing Date, and shall proceed diligently,
employing sufficient workmen and supplying sufficient materials for
that purpose, so that Completion of the New Improvements for which
any portion of the Loan has been advanced shall occur no later than
the date which is thirty-three (33) months after the Closing Date,
which date shall not be extended by reason of Force Majeure (such
date, whether or not construction is then completed, the “
Completion Date ”), which Completion Date is of the
essence of this Agreement. |
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(b) For purposes of this
Agreement, “Completion” of all or any portion of the
New Improvements shall be deemed to have occurred only when each of
the following shall have occurred: |
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(i) The construction of the
applicable New Improvements shall have been completed substantially
in accordance with the Plans and Specifications, as verified by a
certification reasonably satisfactory to Lender from its Consultant
or other architect acceptable to it stipulating that such New
Improvements have been completed in conformity with the Plans and
Specifications, in a good and workmanlike manner, are in
satisfactory condition, and that all mechanical, electrical,
plumbing, structural and roof systems are in acceptable operating
condition; |
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(ii) Borrower shall have
furnished to Lender final certificates of occupancy (subject only
to satisfaction of non-material conditions) issued for such New
Improvements as required by Governmental Authorities having
jurisdiction thereof authorizing their use for the purposes for
which they were designed, and such certificates are final,
unappealed and unappealable and in full force and effect and such
other permits and/or certificates (including a certificate of
completion from the Architect) as shall be required to establish to
the satisfaction of Lender that such New Improvements have been
properly completed and the Project is not subject to any violations
or uncorrected conditions noted or filed with any Governmental
Authority; |
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(iii) Certificates of
inspection and approval shall have been issued by all insurance
bureaus and Governmental Authorities whose certificates or
approvals are required for Borrower’s use of such New
Improvements for the purposes for which designed. |
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(iv) Borrower shall have
furnished to Lender evidence satisfactory to Lender that all
utilities necessary or appropriate to serve such New Improvements
have been connected and are fully operational for the purposes for
which such New Improvements are designed; |
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(v) Borrower shall have
submitted to Lender full and complete releases of liens from the
General Contractor and each contractor, subcontractor and supplier,
or other proof satisfactory to Lender, confirming that final
payment has been made for all materials supplied and labor
furnished in connection with such New Improvements or, if any
dispute exists between Borrower and the General Contractor or any
contractor, subcontractor or supplier, Borrower shall have
deposited with Lender, or Lender shall withhold from any further
Advance request (if applicable) an amount reasonably determined by
Lender to be held by it in escrow until such dispute has been
resolved or, if not resolved, to be applied by Lender in its sole
discretion, or Borrower shall have delivered to Lender appropriate
release bonds for the benefit of Lender in such amounts and on such
terms and conditions as are reasonably acceptable to Lender, and
Lender shall have received evidence satisfactory to it in its sole
discretion that no such liens (other than those for which the
payment thereof is secured as set forth above) may be placed
against the Premises or New Improvements thereafter with respect to
the construction of such New Improvements; and |
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(vi) Borrower shall have
delivered to Lender a satisfactory as-built survey disclosing no
conditions unacceptable to Lender and showing the location of all
improvements, easements, rights-of-way and utilities (including all
easements listed as exceptions on Lender’s title insurance
policy), and containing a certification addressed to Lender in form
and content satisfactory to Lender; and |
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(vii) Borrower shall have
executed and delivered to Lender such affidavits and other evidence
necessary to assure Lender that all costs and charges incurred in
constructing and equipping such New Improvements have been paid,
and that there is no other financing involved in connection
therewith. |
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6.2.
Change Orders . No amendment shall be made to the Plans or
Specifications or to any part of the Construction Contract nor
shall any change orders be made thereunder without the prior
written consent of Lender, provided, however, that Lender’s
consent shall not be required for (but Lender shall promptly
receive copies of) any change orders which do not involve a change
in the scope of the Project or a reduction in the value thereof so
long as such change order does not (a) affect the structural
portions of the New Improvements or affect the architectural,
electrical, plumbing or mechanical portions of the New
Improvements, (b) extend the Completion Date, (c) involve an
expenditure of $50,000 or more as to any individual change order,
and (d) involve, as to the aggregate of all change orders, an
expenditure in excess of $500,000. |
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6.3.
Contracts and Mechanics’ Liens . |
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(a) Borrower shall not engage
any architect, engineer, contractor or material supplier who may be
reasonably objectionable to Lender. Borrower shall submit all prime
construction contracts to Lender for its review and
approval. |
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(b) If any mechanics’
lien shall be filed against the Premises or the Improvements or any
interest therein by reason of work, labor, services or materials
supplied or claimed to have been supplied, or any municipal liens
or other liens or encumbrances, other than those approved by Lender
as hereinabove set forth, shall be recorded, filed or suffered to
exist, and if any such mechanics’ lien or other lien or
encumbrance is not discharged or bonded against to the satisfaction
of Lender or proceedings to discharge them have not been commenced
by Borrower within thirty (30) days after Borrower shall have been
given written notice by Lender or by the claimant or otherwise of
the filing or recording thereof, then Lender may, at its option,
(i) pay and discharge the said lien or encumbrance, in which case
the sum which Lender shall have so paid shall be accepted by
Borrower as part of the Advances then due or thereafter to become
due, (ii) require Borrower to pay and discharge the lien, by
bonding or otherwise, using Borrower’s own funds for such
purpose, (iii) require Borrower to deposit in a separate impressed
account with Lender the amount required to pay and discharge the
lien or encumbrance, or (iv) treat such occurrence as an immediate
Event of Default. |
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6.4.
Access to Construction; Inspection . |
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(a) Borrower agrees to provide
and to cause to be provided to Lender and its authorized agents, at
all times, facilities commonly made available by responsible
contractors for the inspection of the Project, and to afford full
and free access to Lender and its authorized agents to all plans,
drawings and records with respect to the construction. |
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(b) Lender shall have the
right to retain an independent architect or engineer (the “
Consultant ”) of its selection to act as
Lender’s consultant in connection with the Loan and the
construction of the New Improvements, to review the Plans and
Specifications and make periodic inspections to verify the progress
of construction and to review and approve Applications and change
orders submitted hereunder. The fees and expenses of the Consultant
shall be paid by Borrower promptly upon presentation of statements
therefore or deducted from Advances hereunder, at Lender’s
election. |
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(c) If an Event of Default
occurs during any period that New Improvements are under
construction on the Premises, Lender shall have the right to place
upon the Premises a superintendent or inspector who shall require
that the work be constr |
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