<PAGE>
EXHIBIT 10.6
================================================================================
REVOLVING CREDIT AGREEMENT
dated as of October 24, 2005
among
RAIT INVESTMENT TRUST,
RAIT PARTNERSHIP, L.P.,
AND
RAIT ASSET HOLDINGS, LLC,
as Borrowers,
THE LENDERS FROM TIME TO TIME PARTY HERETO,
KEYBANK NATIONAL ASSOCIATION,
as Administrative Agent,
BANK OF AMERICA, N.A.,
as Syndication Agent,
and
KEYBANC CAPITAL MARKETS,
as Sole Lead Arranger and Sole Book Manager
================================================================================
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TABLE OF CONTENTS
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ARTICLE I
DEFINITIONS...........................................................................................
1
Section 1.1
Definitions................................................................................
1
Section 1.2
Accounting
Terms and
Determinations........................................................
23
Section 1.3
Types of
Borrowings........................................................................
24
ARTICLE II THE
Commitments......................................................................................
24
Section 2.1
Commitments to
Lend........................................................................
24
Section 2.2
Notice of
Committed
Borrowing..............................................................
26
Section 2.3
Notice to
Lenders; Funding of
Loans........................................................
28
Section 2.4
Notes......................................................................................
29
Section 2.5
Letters of
Credit..........................................................................
30
Section 2.6
Method of
Electing Interest
Rates..........................................................
32
Section 2.7
Interest
Rates.............................................................................
33
Section 2.8
Fees.......................................................................................
35
Section 2.9
Maturity
Date..............................................................................
36
Section 2.10
Mandatory
Prepayment.......................................................................
36
Section 2.11
Optional
Prepayments.......................................................................
37
Section 2.12
General Provisions as to
Payments..........................................................
38
Section 2.13
Funding
Losses.............................................................................
39
Section 2.14
Computation of Interest and
Fees...........................................................
39
Section 2.15
Use
of
Proceeds............................................................................
39
Section 2.16
Letter of Credit Usage
Absolute............................................................
39
Section 2.17
Joint and Several Obligations; Limitation on
Liability..................................... 40
Section 2.18
Increase in Facility
Amount................................................................
42
Section 2.19
Revolving
Facility.........................................................................
44
Section 2.20
Delinquent
Lenders.........................................................................
44
ARTICLE III
CONDITIONS..........................................................................................
45
Section 3.1
Closing....................................................................................
45
Section 3.2
Borrowings.................................................................................
47
ARTICLE IV REPRESENTATIONS AND
WARRANTIES.......................................................................
47
Section 4.1
Existence
and
Power........................................................................
48
Section 4.2
Power and
Authority........................................................................
48
Section 4.3
No
Violation...............................................................................
48
Section 4.4 Financial
Information......................................................................
49
Section 4.5
Litigation.................................................................................
49
Section 4.6
Compliance
with
ERISA......................................................................
49
Section 4.7
Borrowing
Base
Assets......................................................................
50
Section 4.8
Environmental
Matters......................................................................
50
Section 4.9
Taxes......................................................................................
50
Section 4.10
Full
Disclosure............................................................................
51
Section 4.11
Solvency...................................................................................
51
Section 4.12
Use
of Proceeds; Margin
Regulations........................................................
51
Section 4.13
Governmental
Approvals.....................................................................
51
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Section 4.14
Investment Company Act; Public Utility Holding Company
Act................................. 51
Section 4.15
Principal
Offices..........................................................................
52
Section 4.16
REIT
Status................................................................................
52
Section 4.17
Qualified REIT Subsidiary
Status...........................................................
52
Section 4.18
Patents, Trademarks,
etc...................................................................
52
Section 4.19
No
Default.................................................................................
52
Section 4.20
Licenses,
etc..............................................................................
52
Section 4.21
Compliance With
Law........................................................................
52
Section 4.22
No
Burdensome
Restrictions.................................................................
52
Section 4.23
Brokers'
Fees..............................................................................
53
Section 4.24
Labor
Matters..............................................................................
53
Section 4.25
Insurance..................................................................................
53
Section 4.26
Organizational
Documents...................................................................
53
ARTICLE V AFFIRMATIVE AND NEGATIVE
COVENANTS....................................................................
53
Section 5.1
Information................................................................................
53
Section 5.2
Payment of
Obligations.....................................................................
56
Section 5.3
Maintenance of
Property....................................................................
56
Section 5.4
Conduct of
Business and Maintenance of
Existence........................................... 56
Section 5.5
Compliance
with
Laws.......................................................................
56
Section 5.6
Inspection
of Books and
Records............................................................
56
Section 5.7
Existence..................................................................................
57
Section 5.8
Financial
Covenants........................................................................
57
Section 5.9
Restriction on Fundamental
Changes.........................................................
58
Section 5.10
Changes in
Business........................................................................
59
Section 5.11
Margin
Stock...............................................................................
59
Section 5.12
RAIT, RAIT OP and RAIT SPE
Status..........................................................
59
Section 5.13
Disposition of Borrowing Base
Assets.......................................................
59
Section 5.14
Liens; Release of
Liens....................................................................
59
Section 5.15
Business
Loans.............................................................................
60
Section 5.16
Limitation on Changes in Fiscal Year; Accounting Methods; Valuation
Methodology............ 60
Section 5.17
Limitation on Lines of
Business............................................................
60
Section 5.18
Limitation on Negative Pledge Clauses, Distribution
Restrictions........................... 60
Section 5.19
Addition of Borrowing Base
Assets..........................................................
60
Section 5.20
Failure of Certain Borrowing Base Assets Representations and
Warranties.................... 61
Section 5.21
Limitation on Transactions with
Affiliates................................................. 62
ARTICLE VI
DEFAULTS.............................................................................................
62
Section 6.1
Events of
Default..........................................................................
62
Section 6.2
Rights and
Remedies........................................................................
64
Section 6.3
Notice of
Default..........................................................................
65
Section 6.4
Actions in
Respect of Letters of
Credit.................................................... 65
ARTICLE VII THE
AGENTS..........................................................................................
67
Section 7.1
Appointment and
Authorization..............................................................
67
Section 7.2
Agency and
Affiliates......................................................................
67
Section 7.3
Action by
Administrative
Agent.............................................................
67
Section 7.4
Consultation with
Experts..................................................................
67
Section 7.5
Liability
of Administrative
Agent..........................................................
67
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Section 7.6
Indemnification.................................................................................
68
Section 7.7
Credit
Decision.................................................................................
68
Section 7.8 Successor
Administrative
Agent..................................................................
68
Section 7.9
Receipt of
Notices..............................................................................
69
ARTICLE VIII CHANGE IN
CIRCUMSTANCES...............................................................................
69
Section 8.1
Basis for
Determining Interest Rate Inadequate or
Unfair........................................ 69
Section 8.2
Illegality......................................................................................
69
Section 8.3
Increased
Cost and Reduced
Return...............................................................
70
Section 8.4
Taxes...........................................................................................
71
Section 8.5
Alternate
Base Rate Loans Substituted for Affected Euro-Dollar
Loans............................ 73
ARTICLE IX
MISCELLANEOUS...........................................................................................
73
Section 9.1
Notices.........................................................................................
73
Section 9.2
No
Waivers......................................................................................
74
Section 9.3
Expenses;
Indemnification.......................................................................
74
Section 9.4
Sharing of
Set-Offs.............................................................................
75
Section 9.5
Amendments
and
Waivers..........................................................................
76
Section 9.6
Successors
and
Assigns..........................................................................
76
Section 9.7
Collateral......................................................................................
78
Section 9.8
Governing
Law; Submission to
Jurisdiction.......................................................
78
Section 9.9
Marshalling;
Recapture..........................................................................
78
Section 9.10
Counterparts;
Integration;
Effectiveness........................................................
79
Section 9.11
WAIVER OF JURY
TRIAL............................................................................
79
Section 9.12
Survival........................................................................................
79
Section 9.13
Domicile of
Loans...............................................................................
79
Section 9.14
Limitation of
Liability.........................................................................
79
Section 9.15
Recourse
Obligation.............................................................................
79
Section 9.16
Confidentiality.................................................................................
79
Section 9.17
Legal
Rate......................................................................................
80
Section 9.18
Estoppel and
Certification......................................................................
80
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<PAGE>
EXHIBITS
Exhibit A-1
-
Form of Note
Exhibit A-2
-
Swing Loan Note
Exhibit B
-
Form of Assignment and Assumption Agreement
Exhibit C
-
Initial Borrowing Base Assets
Exhibit D
-
Form of Borrowing Base Certificate
Exhibit E
-
Form of Continuing Compliance Certificate
Exhibit F
-
First Mortgage Asset Representations and Warranties
Exhibit G
-
Real Property Asset Representations and Warranties
Exhibit H
-
Subordinate Assets Representations and Warranties
Exhibit I
-
Form of Subordination Agreement
SCHEDULES
Schedule 4.3
Litigation
Schedule 4.4(c)
Post-June 30, 2005 Material Indebtedness and Contingent
Obligations
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<PAGE>
REVOLVING CREDIT AGREEMENT
THIS REVOLVING CREDIT AGREEMENT (this
"Agreement") is dated as of October 24,
2005 among RAIT INVESTMENT TRUST, a
Maryland trust ("RAIT"), RAIT PARTNERSHIP,
L.P., a Delaware limited partnership ("RAIT
OP"), and RAIT ASSET HOLDINGS, LLC,
a Delaware limited liability company ("RAIT
SPE") (RAIT, RAIT OP and RAIT SPE
are hereinafter referred to individually as
a "Borrower" and collectively as the
"Borrowers"), the Lenders (as defined
herein), KEYBANK NATIONAL ASSOCIATION, as
Administrative Agent, and KEYBANC CAPITAL
MARKETS, as Sole Lead Arranger and
Sole Book Manager.
RECITALS
1.
The
Borrowers have requested that the Lenders establish a revolving
credit facility for the Borrowers for the
purpose of financing the acquisition
by the Borrowers of finance assets and for
other business purposes of the
Borrowers.
2.
The
Borrowers have requested that the Lenders set forth the terms
and conditions upon which the Lenders will
provide financing to the Borrowers.
3.
The
Lenders have agreed to provide that financing to Borrowers on,
and subject to, the terms and conditions
of, this Agreement.
NOW,
THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby
acknowledged, the parties hereto agree as
follows:
ARTICLE I
DEFINITIONS
Section
1.1 Definitions.The following terms, as used herein, have the
following meanings:
"Adjusted
Earnings" means, for any period, the Net Income for such period
to the extent allocable to the holders of
common stock of RAIT, plus, (i)
depreciation and amortization of the
Consolidated Parties for such period, in
each case to the extent allocable to the
holders of common stock of RAIT, plus,
(ii) without duplication, depreciation and
amortization for such period for each
Non-Wholly-Owned Subsidiary to the extent
allocable to the proportion thereof
owned by the Consolidated Parties, plus,
(iii) an amount equal to one percent
(1%) of Consolidated Tangible Net Worth
determined as of the end of such period.
"Adjusted
London Interbank Offered Rate" has the meaning set forth in
Section 2.7(c).
"Administrative Agent" shall mean KeyBank National Association in
its
capacity as Administrative Agent hereunder,
and its permitted successors in such
capacity in accordance with the terms of
this Agreement.
"Administrative Questionnaire" means, with respect to each Lender,
an
administrative questionnaire in the form
prepared by the Administrative Agent
and submitted to the Administrative Agent
(with a copy to the Borrowers) duly
completed by such Lender.
<PAGE>
"Advance
Rate" means, as to any Borrowing Base Asset at any time of
determination, the maximum aggregate amount
of Loans and Letters of Credit which
Borrowers shall be entitled to borrow,
draw, or have issued or outstanding
pursuant to the terms of this Agreement
with respect to such Borrowing Base
Asset, which Advance Rate shall be (a) for
Eligible Real Property Assets,
sixty-five percent (65%) of the Underlying
Real Estate Value at such time of
such Eligible Real Property Assets, (b) for
any Eligible First Mortgage Asset,
the lesser of (i) sixty-five percent (65%)
of the Underlying Real Estate Value
at such time of the Underlying Asset
securing such Eligible First Mortgage
Asset, and (ii) the Book Value at such time
of such First Mortgage Asset, and
(c) for Eligible Subordinated Assets, fifty
percent (50%) of the Book Value at
such time of Eligible Subordinated
Assets.
"Affiliate" means, as to any Person, any other Person (other than
a
Subsidiary) which, directly or indirectly,
is in control of, is controlled by,
or is under common control with, such
Person. For purposes of this definition,
"control" of a Person (including, with its
correlative meanings, "controlled by"
and "under common control with") means the
power, directly or indirectly, either
to (a) vote 33 1/3% or more of the
securities having ordinary voting power for
the election of directors of such Person or
(b) direct or cause the direction of
the management and policies of such Person,
whether by contract or otherwise.
"Agreement" shall mean this Revolving Credit Agreement as the same
may
from time to time hereafter be modified,
supplemented or amended.
"Alternate
Base Rate" means, for any day, a rate per annum equal to the
sum of (i) greater of (a) the Prime Rate or
(b) the Federal Funds Rate plus
one-half percent (0.5%), plus (ii) the
Applicable Margin.
"Alternate
Base Rate Loan" means a Committed Loan to be made by a Lender
as an Alternate Base Rate Loan in
accordance with the applicable Notice of
Committed Borrowing or pursuant to Article
II.
"Applicable Lending Office" means, with respect to any Lender, (i)
in the
case of its Domestic Loans, its Domestic
Lending Office, and (ii) in the case of
its Euro-Dollar Loans, its Euro-Dollar
Lending Office.
"Applicable Margin" means, for any day, the rate per annum set
forth below
opposite the applicable Leverage Ratio then
in effect.
<TABLE>
<CAPTION>
Leverage Ratio (as calculated
pursuant to the most-recently
Applicable Margin for
delivered officer's certificate
Euro-Dollar Loans and Applicable Margin
for
pursuant to Section 7.1(c) hereof)
Letter of
Credit Fees Alternate Base Rate
Loans
----------------------------------
---------------------
-------------------------
<S>
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<C>
> 0.50
1.85%
0.35%
> 0.40
to < or = 0.50
1.65%
0.15%
> 0.30 to
< or = 0.40
1.50%
0.00%
< or =
0.30
1.35%
0.00%
</TABLE>
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<PAGE>
The
Applicable Margin shall be adjusted effective on the next Business
Day
following any change in the Leverage Ratio
using the information provided in the
most-recently delivered officer's
certificate pursuant to Section 5.1(c) hereof.
Notwithstanding anything to the contrary contained in the
foregoing, to
the extent the Borrowers fail to deliver
any officer's certificate as of the
date required pursuant to Section 5.1(c),
the Applicable Margin as of the date
immediately following such required date of
delivery and until the delivery of
such officer's certificate shall be the
greatest Applicable Margin specified in
the foregoing chart.
"Approval
Request" has the meaning set forth in Section 5.19(a).
"Approval
Request Package" has the meaning set forth in Section 5.19(b).
"Approved
Uses" has the meaning set forth in Section 2.15.
"Approved
Bank" means a bank or other financial institution which has
(i)(a) a minimum net worth of $500,000,000
and/or (b) total assets of
$10,000,000,000, and (ii) a minimum long
term debt rating of (a) BBB+ or higher
by S&P, and (b) Baa1 or higher by
Moody's.
"Arranger"
means KeyBanc Capital Markets, in its capacity as Sole Lead
Arranger of the Commitments and Sole Book
Manager of the Commitments.
"Asset
Disposition" means the disposition of any assets (including
without
limitation the Capital Stock of a
Subsidiary) of any Consolidated Party whether
by sale, lease (but excluding the lease of
assets in the ordinary course of
business), transfer or otherwise to a
Person other than a Consolidated Party.
"Asset
Servicing Agreement" means that certain Asset Servicing
Agreement
dated as of October 24, 2005, between RAIT
SPE and RAIT OP, pursuant to which
RAIT OP services and manages certain
Borrowing Base Assets on behalf of RAIT
SPE, as amended from time to time with the
consent of the Administrative Agent.
"Assignee"
has the meaning set forth in Section 9.6(b).
"Available
Commitment" means, with respect to each Lender, at any time,
the amount obtained by multiplying such
Lender's Commitment at such time by a
fraction, the numerator of which is the
Total Available Commitments at such
time, and the denominator of which is the
aggregate of all Commitments at such
time.
"Bankruptcy Code" means Title 11 of the United States Code,
entitled
"Bankruptcy", as amended from time to time,
and any successor statute or
statutes.
"Benefit
Arrangement" means at any time an employee benefit plan within
the meaning of Section 3(3) of ERISA which
is not a Plan or a Multiemployer Plan
and which is maintained or otherwise
contributed to by any member of the ERISA
Group.
"Book
Value" means as to any asset, the value of such asset determined
in
accordance with GAAP, as consistently
applied in connection with the preparation
of the financial statements filed by RAIT
with the Securities and Exchange
Commission.
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<PAGE>
"Borrowers" means, collectively, RAIT, RAIT OP, RAIT SPE and each
SPE
Subsidiary which may hereafter execute a
joinder agreement joining this
Agreement as a "Borrower" hereunder, and
"Borrower" means any one of the
foregoing.
"Borrowing" has the meaning set forth in Section 1.3.
"Borrowing
Base Assets" means assets one hundred percent (100%) owned
(legally and equitably) by RAIT SPE or an
SPE Subsidiary and which consist of
Eligible Real Property Assets, Eligible
First Mortgage Assets and Eligible
Subordinated Assets.
"Borrowing
Base Assets Pool" means, collectively at any time, all
Borrowing Base Assets.
"Borrowing
Base Availability" means, at any time of determination, an
amount equal to the aggregate of the
Advance Rates of all Borrowing Base Assets
in the Borrowing Base Assets Pool at such
time; provided, that (x) at no time
shall the Borrowing Base Availability
attributable to Eligible Subordinated
Assets exceed twenty-five percent (25%) of
Borrowing Base Availability at any
time, and (y) at no time shall Borrowing
Base Availability exceed the aggregate
amount that would cause the ratio of (i)
the sum of (A) the aggregate Property
NOI of Eligible Real Property Assets during
such period, (B) the aggregate cash
interest income actually received from all
Eligible First Mortgage Assets and
Subordinated Debt Assets during such
period, and (C) the aggregate cash dividend
income actually received from all Preferred
Securities during such period, in
each case calculated as of the end of each
fiscal quarter for the quarterly
period then ended with respect to Borrowing
Base Assets in the Borrowing Base
Pool as of the date of determination as
reflected on the most recent Borrowing
Base Certificate, to (ii) Facility Interest
Expense for such period, to be not
less than 2:00 to 1:00.
"Borrowing
Base Certificate" has the meaning set forth in Section 2.2.
"Capitalization Rate" means nine and one-quarter percent (9.25%)
per
annum.
"Capital
Replacement Reserve" means, with respect to any Real Property
Asset or Underlying Asset, a normalized
annual reserve for replacement reserves,
capital expenditures, tenant improvements,
and leasing commissions in the amount
of $0.20 per year per square foot of net
leaseable area contained in such Real
Property Asset or Underlying Asset. When
the Capital Replacement Reserve is used
in computing an amount with respect to a
period which is shorter than a year,
said amount shall be appropriately
prorated.
"Capital
Stock" means, with respect to any Person, any capital stock
(including preferred stock), shares,
interests, participations or other
ownership interests (however designated) of
such Person and any rights (other
than debt securities convertible into or
exchangeable for corporate stock),
warrants or options to purchase any
thereof.
"Cash and
Cash Equivalents" means (i) cash, (ii) direct obligations of
the
United States Government, including without
limitation, treasury bills, notes
and bonds, (iii) interest bearing or
discounted obligations of Federal agencies
and Government sponsored entities or pools
of such instruments offered by
Approved Banks and dealers, including
without limitation, Federal Home Loan
Mortgage Corporation participation sale
certificates, Government National
Mortgage Association modified pass through
certificates, Federal National
Mortgage Association bonds and notes, and
Federal Farm Credit System securities,
(iv) time deposits, Domestic and Eurodollar
certificates of deposit, bankers'
acceptances, commercial paper rated at
least A-2 by
-4-
<PAGE>
S&P and P-2 by Moody's and/or
guaranteed by a Person with an Aa3 rating by
Moody's, an AA- rating by S&P or better
rated credit, floating rate notes, other
money market instruments each issued by an
Approved Bank (provided that the same
shall cease to be a "Cash or Cash
Equivalent" if at any time any such bank shall
cease to be an Approved Bank), (v)
obligations of domestic corporations,
including, without limitation, commercial
paper, bonds, debentures and loan
participations, each of which is rated at
least AA- by S&P and/or Aa3 by Moody's
and/or guaranteed by a Person with an Aa3
rating by Moody's and/or a AA- rating
by S&P or better rated credit, (vi)
obligations issued by states and local
governments or their agencies, rated at
least MIG-2 by Moody's and/or SP-2 by
S&P, (vii) repurchase agreements with
major banks and primary government
security dealers fully secured by the U.S.
Government or agency collateral equal
to or exceeding the principal amount on a
daily basis and held in safekeeping,
and (viii) real estate loan pool
participations, guaranteed by a Person with an
AA- rating given by S&P or Aa3 rating
given by Moody's or better rated credit.
"Charges"
has the meaning set forth in Section 9.17.
"Closing
Date" means the date on or after the Effective Date on which
the
conditions set forth in Section 3.1 shall
have been satisfied to the
satisfaction of the Administrative Agent or
waived by the Administrative Agent
in its sole discretion.
"Code"
means the Internal Revenue Code of 1986, as amended, and as it
may
be further amended from time to time, any
successor statutes thereto, and
applicable U.S. Department of Treasury
regulations issued pursuant thereto in
temporary or final form.
"Commitment" means, with respect to each Lender, the amount set
forth
opposite the name of such Lender on the
signature pages hereof (and, for each
Lender which is an Assignee, the amount set
forth in the Assignment and
Assumption Agreement entered into pursuant
to Section 9.6(b) as the Assignee's
Commitment), as such amount may be reduced
from time to time pursuant to Section
2.11(c) or in connection with an assignment
to an Assignee, or increased
pursuant to Section 2.18.
"Commitment Fee Quarterly Period" has the meaning set forth in
Section
2.8(c).
"Committed Loan"
means a loan made by a Lender (including the Swing
Lender) pursuant to Section 2.1; provided
that, if any such loan or loans (or
portions thereof) are combined or
subdivided pursuant to a Notice of Interest
Rate Election, the term "Committed Loan"
shall refer to the combined principal
amount resulting from such combination or
to each of the separate principal
amounts resulting from such subdivision, as
the case may be.
"Consolidated Parties" means, collectively, RAIT and its
Consolidated
Subsidiaries.
"Consolidated Subsidiary" means at any date any Subsidiary or other
entity
which is consolidated with RAIT in
accordance with GAAP or which is required
under GAAP to be consolidated with
RAIT.
"Consolidated Tangible Net Worth" means, without duplication, at
any date
(a) the Total Assets of the Consolidated
Parties, less (b)(i) consolidated
Intangible Assets of the Consolidated
Parties, and less (ii) Total Liabilities,
all determined as of such date. For
purposes of this definition "Intangible
Assets" means goodwill, patents,
trademarks, service marks, trade names,
anticipated future benefit of tax loss
carry forwards, copyrights, organization
or developmental expenses and other
intangible assets determined in accordance
with GAAP.
-5-
<PAGE>
"Contingent Obligation" means, as to any Person, without
duplication, (i)
any contingent obligation of such Person
required to be shown on such Person's
balance sheet in accordance with GAAP, (ii)
any obligation (including, without
limitation, any Guarantee Obligation)
required to be disclosed in the footnotes
to such Person's financial statements,
guaranteeing partially or in whole any
Non-Recourse Debt, lease, dividend or other
obligation, exclusive of contractual
indemnities (including, without limitation,
any indemnity or price-adjustment
provision relating to the purchase or sale
of securities or other assets) and
guarantees of non-monetary obligations
which have not yet been called on or
quantified, of such Person or of any other
Person, and (iii) any forward
commitment or obligation to fund or provide
proceeds with respect to any loan or
other financing which is obligatory and
non-discretionary on the part of the
lender. The amount of any Contingent
Obligation described in clause (ii) shall
be deemed to be (a) with respect to a
guarantee of interest or interest and
principal, or operating income guarantee,
the sum of all payments required to be
made thereunder (which in the case of an
operating income guarantee shall be
deemed to be equal to the debt service for
the note secured thereby), through
(x) in the case of an interest or interest
and principal guarantee, the stated
date of maturity of the obligation (and
commencing on the date interest could
first be payable thereunder), or (y) in the
case of an operating income
guarantee, the date through which such
guarantee will remain in effect, and (b)
with respect to all guarantees not covered
by the preceding clause (a), an
amount equal to the stated or determinable
amount of the primary obligation in
respect of which such guarantee is made or,
if not stated or determinable, the
maximum reasonably anticipated liability in
respect thereof (assuming such
Person is required to perform thereunder)
as recorded on the balance sheet and
on the footnotes to the most recent
financial statements of Borrowers required
to be delivered pursuant to Section 5.1
hereof.
"Credit
Rating" means, with respect to any Person, the rating assigned
by
the Rating Agencies (one of which, in all
instances, must be S&P or Moody's) to
such Person's long-term unsecured
indebtedness.
"Credit
Underwriting Documents" has the meaning set forth in Section
5.19(a).
"Default"
means any condition or event which with the giving of notice or
lapse of time or both would, unless cured
or waived, become an Event of Default.
"Default
Rate" has the meaning set forth in Section 2.7(d).
"Derivative Exposure" means, as of any date, the maximum
liability
(including costs, fees and expenses), based
upon a liquidation or termination as
of such date, of any Person under any
interest rate swap, collar, cap or other
interest rate protection agreements,
treasury locks, equity forward contracts,
foreign currency exchange agreements,
commodity purchase or option agreements or
other interest or exchange rate or
commodity price hedging agreements.
"Domestic
Business Day" means any day except a Saturday, Sunday or other
day on which commercial banks in New York,
New York are authorized or required
by law to close.
"Domestic
Lending Office" means, as to each Lender, its office located at
its address in the United States set forth
in its Administrative Questionnaire
(or identified in its Administrative
Questionnaire as its Domestic Lending
Office) or such other office as such Lender
may hereafter designate as its
Domestic Lending Office by notice to the
Borrowers and the Administrative Agent.
"Domestic
Loans" means Alternate Base Rate Loans or Swing Loans.
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"EBITDA"
means, for any period, the sum of, without duplication, (i)
aggregate Net Income during such period,
plus (ii) an amount which, in the
determination of Net Income for such
period, has been deducted for (A) Interest
Expense, (B) total federal, state, local
and foreign income, value added and
similar taxes and (C) depreciation and
amortization expense, plus (iii) losses
from extraordinary items, non-recurring
items, Asset Dispositions, or
forgiveness of debt, minus (iv) gains from
extraordinary items, non-recurring
items, Asset Dispositions, write-up of
assets (including any loan accretion
attributable to any asset), minus (v)
interest income accrued but not actually
received in cash, each of the above
determined in accordance with GAAP and to
the extent included in the calculation of
Net Income and plus, (vi) interest
income received in cash in such period to
the extent such interest income had
been subtracted from Net Income pursuant to
the foregoing clause (v) with
respect to any earlier period; provided,
that such sum shall be exclusive of any
adjustment for such period attributable to
the Straight-Lining of Rents, and,
provided further that the foregoing
calculations shall be adjusted, without
duplication, to give effect to the
proportional ownership of all
Non-Wholly-Owned Subsidiaries.
"Effective
Date" means October 24, 2005.
"Eligible
Assignee" means any Person that is: (a) a Lender; (b) an
Affiliate of a Lender; (c) a commercial
bank, trust company, savings and loan
association savings bank, insurance
company, investment bank or pension fund
organized under the laws of the United
States of America, any state thereof or
the District of Columbia, and having total
assets in excess of $5,000,000,000;
or (d) a commercial bank organized under
the laws of any other country which is
a member of the Organization for Economic
Co-operation 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. No
Borrower and no Affiliate of a
Borrower shall qualify as an Eligible
Assignee.
"Eligible
First Mortgage Assets" means First Mortgage Assets that at all
times comply with the First Mortgage Assets
Representations and Warranties set
forth on Exhibit "F" attached hereto.
"Eligible
Real Property Assets" means Real Property Assets that at all
times comply with the Real Property Assets
Representations and Warranties set
forth on Exhibit "G" attached hereto.
"Eligible
Subordinated Assets" means Subordinated Assets that at all
times
comply with the Subordinated Assets
Representations and Warranties set forth on
Exhibit "H" attached hereto.
"Environmental Affiliate" means any partnership, joint venture,
trust,
limited liability company, corporation or
other entity which is subject to an
Environmental Claim and which is a
Consolidated Subsidiary of RAIT or, as to any
partnership, in which RAIT or a
Consolidated Subsidiary is a general partner,
either directly or indirectly.
"Environmental Approvals" means any permit, license, approval,
ruling,
variance, exemption or other authorization
required under applicable
Environmental Laws.
"Environmental Claim" means, with respect to any Person, any
notice,
claim, demand or similar communication
(written or oral) by any other Person
alleging potential liability of such Person
for investigatory costs, cleanup
costs, governmental response costs, natural
resources damage, property damages,
personal injuries, fines or penalties
arising out of, based on or
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resulting from (i) the presence, or release
into the environment, of any
Materials of Environmental Concern at any
location, whether or not owned by such
Person or (ii) circumstances forming the
basis of any violation, or alleged
violation, of any Environmental Law, in
each case (with respect to both (i) and
(ii) above) as to which there is a
reasonable possibility of an adverse
determination with respect thereto and
which, if adversely determined, would
have a Material Adverse Effect on any
Borrower.
"Environmental Laws" means any and all federal, state, and local
statutes,
laws, judicial decisions, regulations,
ordinances, rules, judgments, orders,
decrees, plans, injunctions, permits,
concessions, grants, licenses, agreements
and other governmental restrictions
relating to the environment, the effect of
the environment on human health or to
emissions, discharges or releases of
pollutants, contaminants, Materials of
Environmental Concern or wastes into the
environment including, without limitation,
ambient air, surface water, ground
water, or land, or otherwise relating to
the manufacture, processing,
distribution, use, treatment, storage,
disposal, transport or handling of
pollutants, contaminants, Materials of
Environmental Concern or wastes or the
clean-up or other remediation thereof.
"Equity
Issuance" means any issuance by a Consolidated Party to any
Person
which is not a Consolidated Party of (a)
shares of its Capital Stock, (b) any
shares of its Capital Stock pursuant to the
exercise of options or warrants or
(c) any shares of its Capital Stock
pursuant to the conversion of any debt
securities to equity.
"ERISA"
means the Employee Retirement Income Security Act of 1974, as
amended, or any successor statute.
"ERISA
Group" means RAIT, any Subsidiary and all members of a
controlled
group of corporations and all trades or
businesses (whether or not incorporated)
under common control which, together with
RAIT or any Subsidiary, are treated as
a single employer under Section 414 of the
Code.
"Euro-Dollar Business Day" means any Domestic Business Day on
which
commercial banks are open for international
business (including dealings in
dollar deposits) in London.
"Euro-Dollar Lending Office" means, as to each Lender, its office,
branch
or affiliate located at its address set
forth in its Administrative
Questionnaire (or identified in its
Administrative Questionnaire as its
Euro-Dollar Lending Office) or such other
office, branch or affiliate of such
Lender as it may hereafter designate as its
Euro-Dollar Lending Office by notice
to the Borrowers and the Administrative
Agent.
"Euro-Dollar Loan" means a Committed Loan to be made by a Lender as
a
Euro-Dollar Loan in accordance with the
applicable Notice of Committed
Borrowing.
"Event of
Default" has the meaning set forth in Section 6.1.
"Excepted
Liens" shall mean: (i) Liens for taxes, assessments or other
governmental charges or levies not yet due
or which are being contested in good
faith by appropriate action and for which
adequate reserves have been maintained
in accordance with GAAP; (ii) Liens in
connection with worker's compensation,
unemployment insurance or other social
security, old age pension or public
liability obligations not yet due or which
are being contested in good faith by
appropriate action and for which adequate
reserves have been maintained in
accordance with GAAP; (iii) vendors',
carriers', warehousemen's, repairmen's,
mechanics', workmen's,
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<PAGE>
materialmen's, construction or other like
Liens arising by operation of law in
the ordinary course of business, each of
which is either (a) subordinate to the
lien of the applicable Borrowing Base Asset
or (b) been adequately insured or
bonded or (c) being contested in good faith
by appropriate proceedings and for
which adequate reserves have been
maintained in accordance with GAAP; (iv)
easements, rights of way, zoning
restrictions and other similar Liens relating
to a Real Property Asset or Underlying
Asset, which do not individually or in
the aggregate materially impair the use of
such Real Property Asset or
Underlying Asset or materially impair the
value of such Real Property Asset or
Underlying Asset subject thereto.
"Exceptions Summary" has the meaning set forth in Section
5.19(a).
"Expenses"
means, when used with respect to any asset, the costs of
maintaining such asset which are the
responsibility of the owner thereof,
including, without limitation, taxes,
insurance, repairs and maintenance.
"Extension
Fee" means as to the Extension Period, twenty-five hundredths
of one percent (.25%) of the aggregate
amount of Commitments then in effect as
of the date on which Borrowers deliver to
the Administrative Agent the Notice to
Extend.
"Extension
Option" has the meaning set forth in Section 2.9(b).
"Extension
Period" has the meaning set forth in Section 2.9(b).
"Facility"
means the revolving credit facility established pursuant to
this Agreement.
"Facility
Amount" means two hundred and seventy million dollars
($270,000,000) subject to increase pursuant
to Section 2.18 hereof or decrease
pursuant to Section 2.11 hereof.
"Facility
Interest Expense" means, as of any date of determination for a
particular period, an amount equal to the
interest that would accrue during such
period on the Outstanding Balance on such
date of determination at an interest
rate equal to the sum of (i) the Adjusted
London Interbank Offered Rate on such
date of determination for an Interest
Period of one (1) month plus (ii) the
Applicable Margin for Euro-Dollar Loans on
such date of determination.
"Federal
Funds Rate" means, for any day, the rate per annum (rounded
upward, if necessary, 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 Domestic Business Day
next succeeding such day, provided that (i)
if such day is not a Domestic
Business Day, the Federal Funds Rate for
such day shall be such rate on such
transactions on the next preceding Domestic
Business Day as so published on the
next succeeding Domestic Business Day, and
(ii) if no such rate is so published
on such next succeeding Domestic Business
Day, the Federal Funds Rate for such
day shall be the average rate quoted to
KeyBank National Association on such day
on such transactions as determined by the
Administrative Agent.
"Federal
Reserve Board" means the Board of Governors of the Federal
Reserve System as constituted from time to
time.
"Fee
Letter" means, collectively, that certain Fee Letter between
the
Borrowers and KeyBank dated on or about the
date hereof, as amended,
supplemented or otherwise modified from
time to time.
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<PAGE>
"Fees"
means all fees payable or to be payable by the Borrowers as
provided for in Section 2.8 and in the Fee
Letter.
"First
Mortgage Asset" means as to any Person, indebtedness owed to
such
Person, which is not the subject of a
bankruptcy or similar proceeding, is fully
performing as to payment and material
nonpayment obligations thereunder and is
secured by a first Lien of a properly
recorded mortgage, deed of trust or other
similar security instrument on a fee
interest or a leasehold interest in real
property and all collateral security
related thereto (regardless of whether such
Person's interest therein is characterized
as equity according to GAAP).
"Fitch"
means Fitch, Inc. or any successor thereto.
"Fixed
Charge Coverage Ratio" means, as of the end of each fiscal
quarter
of the Consolidated Parties for the
quarterly period ending on such date, the
ratio of (a) EBITDA for the applicable
period to (b) the sum of (i) Interest
Expense for the applicable period plus (ii)
preferred dividends permitted
hereunder for the applicable period plus
(iii) Scheduled Amortization Payments
for the applicable period.
"Floating
Rate Indebtedness" means, with respect to any Person,
Indebtedness of such Person which accrues
interest at a rate which may vary
during the term of such Indebtedness (other
than due solely to a default
thereunder).
"Floating
Rate Assets" means with respect to any Person, the assets of
such Person on the balance sheet of such
Person which generate income that
fluctuates based on changes in interest
rates.
"Fronting
Lender" means any Lender which is a party hereto which shall
issue a Letter of Credit with respect to
such Notice of Borrowing, subject,
however, to the limitations set forth in
Section 2.5. For purposes of this
Agreement, the Fronting Lender shall,
unless and until the Administrative Agent
shall elect otherwise (subject, except
during the continuance of an Event of
Default, to the prior written consent of
the Borrower, which consent shall not
be unreasonably withheld, conditioned or
delayed), be KeyBank.
"Funded
Indebtedness" means, with respect to any Person, without
duplication, all Indebtedness of such
Person other than Indebtedness of the
types referred to in clauses (f) and (h) of
the definition of "Indebtedness" set
forth in this Section 1.1.
"GAAP"
means generally accepted accounting principles recognized as
such
in the opinions and pronouncements of the
Accounting Principles Board and the
American Institute of Certified Public
Accountants and the Financial Accounting
Standards Board.
"Group of
Loans" means, at any time, a group of Loans consisting of (i)
all Committed Loans which are Alternate
Base Rate Loans at such time, or (ii)
all Committed Loans which are Euro-Dollar
Loans having the same Interest Period
at such time.
"Guarantee
Obligation" means as to any Person (the "guaranteeing person"),
without duplication, any obligation of (a)
the guaranteeing person or (b)
another Person (including, without
limitation, any bank under any letter of
credit) guaranteeing any Indebtedness,
leases, dividends or other obligations
(the "primary obligations") of any other
third Person (the "primary obligor") in
any manner, whether directly or indirectly,
including, without limitation, any
obligation of the guaranteeing person,
whether or not contingent, (i) to
purchase any such
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<PAGE>
primary obligation or any property
constituting direct or indirect security
therefor, (ii) to advance or supply funds
(1) for the purchase or payment of any
such primary obligation or (2) to maintain
working capital or equity capital of
the primary obligor or otherwise to
maintain the net worth or solvency of the
primary obligor, (iii) to purchase
property, securities or services primarily
for the purpose of assuring the owner of
any such primary obligation of the
ability of the primary obligor to make
payment of such primary obligation or
(iv) otherwise to assure or hold harmless
the owner of any such primary
obligation against loss in respect thereof;
provided, however, that the term
Guarantee Obligation shall not include
endorsements of instruments for deposit
or collection in the ordinary course of
business. The terms "Guarantee" and
"Guaranteed" used as a verb shall have a
correlative meaning.
"Indebtedness" of any Person, without duplication, means, in each
case
whether direct or contingent, (a) all
obligations of such Person for borrowed
money, (b) all obligations of such Person
evidenced by bonds, debentures, notes
or similar instruments, or upon which
interest payments are customarily made,
(c) all obligations of such Person under
conditional sale or other title
retention agreements relating to property
purchased by such Person, (d) all
obligations of such Person issued or
assumed as the deferred purchase price of
property or services purchased by such
Person (other than trade debt incurred in
the ordinary course of business and due
within six months of the incurrence
thereof) which would appear as liabilities
on a balance sheet of such Person,
(e) all indebtedness of others secured by
(or for which the holder of such
indebtedness has an existing right,
contingent or otherwise, to be secured by)
any Lien on, or payable out of the proceeds
of production from, property owned
or acquired by such Person, whether or not
the obligations secured thereby have
been assumed, (f) all Guarantee Obligations
of such Person, (g) the principal
portion of all obligations of such Person
under Capital Leases, (h) all
Derivative Exposure and other obligations
of such Person in respect of interest
rate swap, collar, cap or other interest
rate protection agreements, treasury
locks, equity forward contracts, foreign
currency exchange agreements, commodity
purchase or option agreements or other
interest or exchange rate or commodity
price hedging agreements (including, but
not limited to, Match Funding
Agreements), (i) all obligations of such
Person to repurchase any securities
which repurchase obligation is related to
the issuance thereof, (j) the maximum
amount of all letters of credit issued or
bankers' acceptances facilities
created for the account of such Person and,
without duplication, all drafts
drawn thereunder (to the extent
unreimbursed), (k) all preferred Capital Stock
issued by such Person and required by the
terms thereof to be redeemed, or for
which mandatory sinking fund payments are
due, by a fixed date, (l) all other
obligations of such Person under any
arrangement or financing structure
classified as debt (for tax purposes) by
any nationally recognized rating
agency, (m) the principal portion of all
obligations of such Person for any Off
Balance Sheet Liabilities and (n) the
indebtedness of any partnership or
unincorporated joint venture in which such
Person is a general partner or a
joint venturer.
"Indemnitee" has the meaning set forth in Section 9.3(b).
"Initial
Term" means the period of time commencing on the Effective Date
and ending on October 24, 2008.
"Interest
Coverage Ratio" means, with respect to the Consolidated Parties
for the quarterly period ending on the last
day of any fiscal quarter of the
Consolidated Parties, the ratio of (a)
EBITDA for such period to (b) Interest
Expense for such period.
"Interest
Expense" means, for any period, the sum of (a) interest expense
(including, without limitation, the
interest component under Capital Leases and
with respect to Off Balance
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<PAGE>
Sheet Liabilities) of the Consolidated
Parties for such period, as determined in
accordance with GAAP, plus (b) an amount
equal to the aggregate of interest
expense (including the interest component
under Capital Leases and with respect
to any Off Balance Sheet Liabilities), as
determined in accordance with GAAP, of
each Non-Wholly-Owned Subsidiary multiplied
by the proportion thereof owned by
the Consolidated Parties.
"Interest
Payment Date" means (a) as to Alternate Base Rate Loans, the
first day of each calendar month (as to
interest through the end of the prior
calendar month) and the Maturity Date and
(b) as to Euro-Dollar Loans, the last
day of each applicable Interest Period and
the Maturity Date, and, where the
applicable Interest Period for a
Euro-Dollar Loan is greater than three months,
the date that is three months from the
beginning of the Interest Period and each
three month anniversary thereof.
"Interest
Period" means:
(a) with respect to each Euro-Dollar Borrowing, the period
commencing on the date of such Borrowing
specified in the applicable Notice of
Borrowing or on the date specified in the
applicable Notice of Interest Rate
Election and ending one, two, three or six
months thereafter, as the Borrower
may elect in the applicable Notice of
Borrowing or Notice of Interest Rate
Election; provided that:
(i) any Interest Period which would otherwise end on a day
which is
not a Euro-Dollar Business Day shall be extended to the next
succeeding
Euro-Dollar Business Day unless such Euro-Dollar Business Day
falls in
another calendar month, in which case such Interest Period
shall
end on the
immediately preceding Euro-Dollar Business Day;
(ii)
any Interest Period which begins on the last Euro-Dollar
Business
Day of a calendar month (or on a day for which there is no
numerically corresponding day in the calendar month at the end of
such
Interest
Period) shall, subject to clause (iii) below, end on the last
Euro-Dollar Business Day of a calendar month; and
(iii) if any Interest Period includes a date on which a
payment of
principal of the Loans is required to be made under Section
2.10 but
does not end on such date, then (x) the principal amount (if
any)
of each
Euro-Dollar Loan required to be repaid on such date shall have
an
Interest
Period ending on such date and (y) the remainder (if any) of
each
such
Euro-Dollar Loan shall have an Interest Period determined as
set
forth
above.
(b) With respect to each Alternate Base Rate Borrowing, the
period
commencing on the date of such Borrowing
specified in the applicable Notice of
Borrowing or on the date specified (or
deemed specified) in the applicable
Notice of Interest Rate Election and ending
on the last day of the calendar
month in which such Notice of Borrowing or
Notice of Interest Rate Election was
made (or deemed made); provided that if any
Interest Period includes a date on
which a payment of principal of the Loans
is required to be made under Section
2.13 but does not end on such date, then
(i) the principal amount (if any) of
each Alternate Base Rate Loan required to
be repaid on such date shall have an
Interest Period ending on such date and
(ii) the remainder (if any) of each such
Alternate Base Rate Loan shall have an
Interest Period determined as set forth
above.
"KeyBank"
means KeyBank National Association and its successors.
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"Legal
Rate" has the meaning set forth in Section 9.17.
"Lender"
means each lender listed on the signature pages hereof, each
Assignee which becomes a Lender pursuant to
Section 9.6(b), and their respective
successors.
"Letter(s)
of Credit" has the meaning set forth in Section 2.2.
"Letter of
Credit Fee" has the meaning set forth in Section 2.8(b).
"Letter of
Credit Collateral" has the meaning set forth in Section 6.4.
"Letter of
Credit Collateral Account" has the meaning set forth in Section
6.4.
"Letter of
Credit Documents" has the meaning set forth in Section 2.16.
"Letter of
Credit Usage" means at any time the sum of (i) the aggregate
maximum amount available to be drawn under
the Letters of Credit then
outstanding, assuming compliance with all
requirements for drawing referred to
in such Letters of Credit, and (ii) the
aggregate amount which has been drawn
under Letters Credit but for which the
applicable Fronting Lender and/or Lenders
have not been reimbursed at such time.
"Leverage
Ratio" means, as of any date of calculation, the ratio of (i)
Total Liabilities to (ii) Total Assets of
the Consolidated Parties.
"Lien"
means, with respect to any asset, any mortgage, lien (including
any
tax lien or assessment), pledge, charge,
security interest or encumbrance of any
kind, or any other type of preferential
arrangement that has the effect of
creating a security interest. For purposes
of this Agreement, the term "Lien"
shall not include any Excepted Lien. For
the purposes of this Agreement, RAIT,
RAIT OP or any Consolidated Subsidiary
shall be deemed to own subject to a Lien
any asset which it has acquired or holds
subject to the interest of a vendor or
lessor under any conditional or installment
sales agreement, capital lease or
other title retention agreement relating to
such asset.
"Loan"
means a Domestic Loan or a Euro-Dollar Loan and "Loans" means
Domestic Loans or Euro-Dollar Loans or any
combination of the foregoing.
"Loan
Documents" means a collective reference to this Agreement, the
Notes, the Letter of Credit Documents and
all other related agreements and
documents issued or delivered hereunder or
thereunder or pursuant hereto or
thereto (in each case, as the same may be
amended, modified, restated,
supplemented, extended, renewed or replaced
from time to time).
"London
Interbank Offered Rate" has the meaning set forth in Section
2.7(c).
"Margin
Stock" has the meaning provided such term in Regulation U of
the
Federal Reserve Board.
"Match
Funding Agreements" shall mean any and all agreements, devices
or
arrangements, the counterparty to which has
a Credit Rating of at least A- by
Standard & Poor's or A3 by Moody's or
is otherwise acceptable to the
Administrative Agent, designed to protect
any Consolidated Party which is a
party thereto from the fluctuations of
interest rate, exchange rate or forward
rate differences between individual assets
owned by a Consolidated Party and the
Indebtedness incurred by a Consolidated
Party in connection with the origination
or financing of
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<PAGE>
such individual assets, including, but not
limited to, dollar-denominated or
cross-currency interest rate exchange
agreements, Treasury locks, forward
currency exchange agreements, interest rate
cap or collar protection agreements,
forward rate currency or interest rate
options, puts and warrants.
"Material
Adverse Effect" means an effect resulting from any circumstance
or event or series of circumstances or
events, of whatever nature (but excluding
general economic conditions), which, taken
as a whole, (i) does materially and
adversely affect the business, operations,
properties, assets or financial
condition of RAIT, RAIT OP, RAIT SPE or any
SPE Subsidiary or (ii) impairs the
ability of RAIT, RAIT OP, RAIT SPE or any
SPE Subsidiary to fulfill its material
obligations, including, if applicable,
their ability to perform their respective
obligations under the Loan Documents or
which causes a Default under Section 5.8
hereof.
"Material
Plan" means at any time a Plan or Plans having aggregate
Unfunded Liabilities in excess of
$1,000,000.
"Materials
of Environmental Concern" means and includes pollutants,
contaminants, wastes, toxic and hazardous
substances, petroleum and petroleum
by-products.
"Maturity
Date" means the date when all of the Obligations hereunder
shall
be due and payable which shall be October
24, 2008, unless accelerated pursuant
to the terms hereof, or extended pursuant
to Section 2.9(b).
"Moody's"
means Moody's Investors Services, Inc. or any successor
thereto.
"Multiemployer Plan" means at any time an employee pension benefit
plan
within the meaning of Section 4001(a)(3) of
ERISA to which any member of the
ERISA Group is then making or accruing an
obligation to make contributions or
has within the preceding five plan years
made contributions, including for these
purposes any Person which ceased to be a
member of the ERISA Group during such
five year period.
"Net
Equity Proceeds" means the aggregate cash proceeds received by
the
Consolidated Parties in respect of any
Equity Issuance, net of (a) direct costs
(including, without limitation, legal,
accounting and investment banking fees
and sales commissions) and (b) taxes paid
or payable as a result thereof; it
being understood, (i) that "Net Equity
Proceeds" shall include, without
limitation, any cash received upon the sale
or other disposition of any non-cash
consideration received by the Consolidated
Parties in any Equity Issuance, and
(ii) that "Net Equity Proceeds" shall not
include cash proceeds that are applied
within thirty (30) days of the date of the
related Equity Issuance to retire
Capital Stock.
"Net
Income" means, for any period, net income or loss after taxes
for
such period of the Consolidated Parties, as
determined in accordance with GAAP.
"Non-Wholly-Owned Subsidiary" means a Subsidiary which is not a
Wholly
Owned Subsidiary.
"Non-Recourse Debt" as to any Person means Indebtedness (i) for
which the
right of recovery of the obligee thereof is
limited to recourse against the
asset securing such Indebtedness (subject
to such customary carve-out matters
for which such Person has a Guarantee
Obligation made in connection with such
Indebtedness, such as fraud,
misappropriation, bankruptcy, misapplication and
environmental indemnities, unless, until
and for so long as a claim for
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payment or performance has been made
thereunder (which has not been satisfied)
at which time the obligations with respect
to any such customary carve-out shall
not be considered Non-Recourse Debt, to the
extent that such claim is a
liability of such Person for GAAP purposes)
and/or (ii) other Indebtedness for
which such Person has no Guarantee
Obligation (other than guarantees of
customary carve-out matters made in
connection with such Indebtedness, such as
fraud, misappropriation, bankruptcy and
misapplication, unless, until and for so
long as a claim for payment or performance
has been made thereunder (which has
not been satisfied), at which time such
guarantee of any such customary
carve-out shall not be considered
Non-Recourse Debt of such Person, to the
extent that such claim is a liability of
such Person for GAAP purposes).
"Non-RAIT
Plan" means any Plan other than a RAIT Plan.
"Notes"
means promissory notes of the Borrowers, substantially in the
form
of Exhibit "A-1" hereto, evidencing the
obligation of the Borrowers to repay the
Loans (other than Swing Loans), and
substantially in the form of Exhibit "A-2"
hereto with respect to the Swing Lender
evidencing the obligation of the
Borrowers to repay the Swing Loans, and
"Note" means any one of such promissory
notes issued hereunder.
"Notice of
Borrowing" means a Notice of Committed Borrowing (as defined in
Section 2.3).
"Notice of
Interest Rate Election" has the meaning set forth in Section
2.6.
"Notice to
Extend" has the meaning set forth in Section 2.9(b).
"Obligations" means all obligations, liabilities and indebtedness
of every
nature of the Borrowers, from time to time
owing to any Lender under or in
connection with this Agreement or any other
Loan Document, including, without
limitation, (i) the outstanding principal
amount of the Committed Loans at such
time, plus (ii) the Letter of Credit Usage
at such time.
"Off
Balance Sheet Liabilities" means, with respect to any Person, any
(a)
repurchase obligation or liability,
contingent or otherwise, of such Person with
respect to any mortgages, mortgage notes,
accounts or notes receivable sold,
transferred or otherwise disposed of by
such Person, (b) repurchase obligation
or liability, contingent or otherwise, of
such Person with respect to property
or assets leased by such Person as lessee
and (c) obligations, contingent or
otherwise, of such Person under any
synthetic lease, tax retention operating
lease, off balance sheet loan or similar
off balance sheet financing, in each
case, if the transaction giving rise to
such obligation (i) is considered
Indebtedness for borrowed money for tax
purposes, and (ii) does not (and is not
required pursuant to GAAP to) appear as a
liability on the balance sheet of such
Person.
"Outstanding Balance" means at any time, and from time to time, the
sum of
(i) the aggregate outstanding principal
balance of all Loans and (ii) the Letter
of Credit Usage.
"Parent"
means, with respect to any Lender, any Person controlling such
Lender.
"Participant" has the meaning set forth in Section 9.6(c).
"Partnership" means any general or limited partnership, joint
venture,
corporation, limited liability company,
limited liability partnership, limited
liability limited partnership or
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<PAGE>
other Person which is not a natural Person
or the estate of a deceased natural
Person and which owns directly an interest
in real property.
"PBGC"
means the Pension Benefit Guaranty Corporation or any entity
succeeding to any or all of its functions
under ERISA.
"Person"
means an individual, a corporation, a partnership, an
association, a trust or any other entity or
organization, including a government
or political subdivision or an agency or
instrumentality thereof.
"Plan"
means at any time an employee pension benefit plan (other than
a
Multiemployer Plan) which is covered by
Title IV of ERISA or subject to the
minimum funding standards under Section 412
of the Code and either (i) is
maintained, or contributed to, by any
member of the ERISA Group for employees of
any member of the ERISA Group or (ii) has
at any time within the preceding five
years been maintained, or contributed to,
by any Person which was at such time a
member of the ERISA Group for employees of
any Person which was at such time a
member of the ERISA Group.
"Preferred
Securities" means any stock, shares or other such interests
(which is not the subject of a bankruptcy
or similar proceeding) in and to a
Person primarily and directly engaged
(directly or through a Subsidiary) in the
business of the ownership, operation and/or
management of real property, the
terms of which stock, shares or other
interests provide the holders of the
shares thereof with a liquidation
preference in the assets of such Person in
relation to the holders of the common stock
of such Person.
"Prime
Rate" means the rate of interest publicly announced by KeyBank
from
time to time as its Prime Rate.
"Property Expenses"
means, with respect to any applicable time period for
any Real Property Asset, the costs of
maintaining such Real Property Asset which
are the responsibility of the owner
thereof, including, without limitation,
taxes, insurance, repairs and maintenance
during such period.
"Property
NOI" means, with respect to any applicable time period for any
Real Property Asset, (a) Property Revenues
for such period with respect to such
Real Property Asset less (b) the sum of (i)
Property Expenses for such period
with respect to such Real Property Asset,
plus (ii) the Capital Expenditure
Reserve amount for such Real Property Asset
during such period, plus (iii) a
management fee in the amount of three
percent (3%) of total revenues derived
from the Real Property Asset during such
period; provided, that such amount
shall be exclusive of any adjustment for
such period attributable to the
Straight-Lining of Rents; provided,
further, that, in each case, all amounts
included in the above calculations shall be
adjusted to account for any amounts
attributable to any interests held by any
Consolidated Party in any
Non-Wholly-Owned Subsidiary.
"Property
Revenues" means, with respect to any applicable time period for
any Real Property Asset, the base rent,
expense reimbursement and other
recurring rental income received during
such period (other than prepaid rents
and revenues and security deposits except
to the extent applied in satisfaction
of tenants' obligations for rent).
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<PAGE>
"RAIT's
2004 Form 10-K" means RAIT's annual report on Form 10-K for
2004,
as filed with respect to RAIT with the
Securities and Exchange Commission
pursuant to the Securities Exchange Act of
1934.
"RAIT's
2005 Form 10-Q" means the quarterly report on Form 10-Q for the
second calendar quarter in 2005, as filed
with respect to RAIT with the
Securities and Exchange Commission pursuant
to the Securities Exchange Act of
1934.
"RAIT
Plan" means a Plan in the ERISA Group sponsored, maintained or
contributed to by RAIT, RAIT OP or RAIT
SPE.
"Rating
Agencies" means, collectively, S&P, Moody's and Fitch.
"Real
Property Assets" means, as of any time, the real property assets
in
which RAIT or a Consolidated Subsidiary has
a fee title ownership interest or
possesses a financeable leasehold interest
at such time.
"Recourse
Debt" as to any Person means all Indebtedness other than
Non-Recourse Debt.
"Refunded
Swing Loan" has the meaning set forth in Section 2.1(c).
"Regulation U" means Regulation U of the Board of Governors of the
Federal
Reserve System, as in effect from time to
time.
"Required
Lenders" means at any time Lenders having at least 66.67% of
the
aggregate amount of the Commitments or, if
the Commitments shall have been
terminated, holding Notes and/or
participations in Swing Loans and Letters of
Credit evidencing at least 66.67% of the
aggregate unpaid principal amount of
the Loans and Letter of Credit Usage.
"Scheduled
Amortization Payments" means, for a given period, the sum of
(a) all scheduled payments of principal on
Funded Indebtedness for the
Consolidated Parties for the applicable
period ending on such date (including
the principal component of payments due on
Capital Leases during the applicable
period), plus (b) an amount equal to the
aggregate of all scheduled payments of
principal on Funded Indebtedness for each
Non-Wholly-Owned Subsidiary for the
applicable period (including the principal
component of payments due on Capital
Leases during the applicable period)
multiplied by the proportional interest
thereof owned by each such entity; it being
understood that Scheduled
Amortization Payments shall not include any
one-time "bullet", "lump sum" or
"balloon" payments due in respect of Funded
Indebtedness.
"Secured
Debt" means, for any given calculation date, the total
aggregate
principal amount of any Indebtedness of the
Consolidated Parties, that is (a)
secured in any manner by any Lien or (b)
(other than Indebtedness incurred
hereunder) entitled to the benefit of a
provision prohibiting the creation of a
Lien on any assets, plus without
duplication, the aggregate of such Indebtedness
of each Non-Wholly-Owned Subsidiary
multiplied by the proportional interest
thereof owned by each such entity.
"S&P"
means Standard & Poor's Ratings Services, a division of The
McGraw-Hill Companies, Inc., or any
successor thereto.
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<PAGE>
"Solvent"
means, with respect to any Person, that (i) the fair saleable
value of such Person's assets exceeds the
Indebtedness of such Person, (ii) such
Person has the ability to generally pay its
debts and other liabilities as they
become due in ordinary course of business
and (iii) such Person has sufficient
capital to conduct its business in the
ordinary course of business.
"Special
Purpose Entity" means any entity whose structure and
organizational and governing documents are
in form and substance acceptable to
the Administrative Agent and which
satisfies all of the following requirements:
(i) Its purpose shall be limited solely to, as applicable, (a)
entering into this Agreement and the related Loan Documents,
(b)
borrowing Loans under this Agreement and obtaining Letters of
Credit
under this Agreement, (c) owning, originating, developing,
holding,
selling, leasing, transferring, exchanging, operating and
managing
the Borrowing Base Assets directly (including pursuant to
contractual arrangements with servicers, property managers and
the
like, to the extent otherwise permitted pursuant to this
Agreement
and the subject entity's organizational documents) or through a
SPE
Subsidiary, and (d) transacting any and all lawful business for
which it may be organized under its constitutive law that is
incident, necessary and appropriate to accomplish the
foregoing.
(ii) It does not own and will not own any asset or property
other than (a) the Borrowing Base Assets, and/or (b) incidental
personalty necessary for and used or to be used in connection
with
the ownership or operation of the Borrowing Base Assets.
(iii) It will not engage in any business other than the
ownership, management, development, leasing, exchanging,
transferring, origination and operation of the Borrowing Base
Assets.
(iv) It will not enter into any contract or agreement with any
Affiliate, any constituent party of itself, any of its owners,
any
guarantors of its obligations, or any Affiliate of any
constituent
party, owner or guarantor (collectively, the "Related Parties")
of
itself, other than the Asset Servicing Agreement, except upon
terms
and conditions that are intrinsically fair, commercially
reasonable
and substantially similar to those that would be available on
an
arms-length basis with third parties not so affiliated with
itself
or such Related Parties; provided, however, that loans and
advances
to RAIT SPE by RAIT OP with respect to the acquisition of
Borrowing
Base Assets shall not be subject to the provisions of this
subsection (iv) (but shall be subject to subsection (v)(e),
below).
(v) It has not incurred and will not incur any Indebtedness
other than, as applicable, (a) under this Agreement and the
related
Loan Documents, (b) normal trade payables, (c) obligations to
tenants of Eligible Real Property Assets to the extent disclosed
to
the Administrative Agent and the Lenders in connection with the
approval of such Eligible Real Property Assets as Borrowing
Base
Assets, (d) future funding obligations as provided for in any
loan
documentation associated with any Eligible First Mortgage Asset
or
Eligible Subordinated Asset, to the extent disclosed to the
Administrative Agent and the Lenders in connection with the
approval
of such Eligible First Mortgage Asset or Eligible Subordinated
Asset
as a Borrowing Base Asset, and (e) with respect to RAIT SPE,
Indebtedness
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<PAGE>
to RAIT OP under loans made from time to time by RAIT OP to RAIT
SPE
in
connection with the acquisition or origination of a Borrowing
Base Asset, provided that any such Indebtedness is subordinated
to
the Obligations pursuant to a subordination agreement in
substantially the form of Exhibit I hereto.
(vi) It has not made and will not make any loans or advances
to any Person (other than with respect to the Borrowing Base
Assets)
and shall not acquire obligations or securities of any Related
Party.
(vii) It is and will remain Solvent and it will pay its debts
and liabilities (including, as applicable, shared personnel and
overhead expenses) from its assets as the same shall become
due.
(viii) It has done or caused to be done and will do all things
necessary to observe organizational formalities and preserve
its
existence, and, it will not, nor will it permit any Related
Party
to, amend, modify or otherwise change the partnership
certificate,
partnership agreement, articles of incorporation and bylaws,
operating agreement, trust or other organizational documents of
such
entity or such Related Party without the prior written consent
of
the Administrative Agent, which consent shall not be
unreasonably
withheld or delayed unless such proposed amendment, modification
or
change would adversely affect such entity's existence as a
single
purpose entity, or would have a Material Adverse Effect.
(ix) It will maintain all of its books, records, financial
statements and bank accounts separate from those of any other
Person
(except RAIT and RAIT OP) and its assets will not be listed as
assets on the financial statement of any other Person (except
RAIT
and RAIT OP). It will file its own tax returns (or will be
consolidated in the tax returns of RAIT) and will not file a
consolidated federal income tax return with any other Person
(except
RAIT). It shall maintain its books, records, resolutions and
agreements as official records.
(x) It will be a legal entity separate and distinct from any
other Person (including any Affiliate or other related party),
shall
correct any known misunderstanding regarding its status as a
separate entity, shall conduct business in its own name, and
shall
not identify itself or any of its Affiliates as a division or
part
of the other.
(xi) It will maintain adequate capital for the normal
obligations reasonably foreseeable in a business of its size
and
character and in light of its contemplated business operations.
(xii) Neither it nor any Related Party will seek its own
dissolution, winding up, liquidation, consolidation or merger
in
whole or in part, or the sale of its material assets to the
extent
that any such sale otherwise violates this Agreement.
(xiii) It will not commingle its assets with those of any
other Person (other than as incidental to any servicing or
management arrangements permitted by this Agreement and the
entity's
organizational documents), and will hold all of its assets in
its
own name or through a Wholly Owned Subsidiary.
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<PAGE>
(xiv) It will not guarantee or, except for its joint and
several obligations under this Agreement, become obligated for
the
debts of any other Person, and, except for its joint and
several
obligations under this Agreement, does not and will not hold
itself
out as being responsible for the debts or obligations of any
other
Person.
(xv) If it is a limited partnership, at least one general
partner, or if it is a general partnership, at least two
general
partners (each, an "SPC Party"), shall be a corporation whose
sole
asset is the interest in the Special Purpose Entity and each
such
SPC Party will at all times comply, and will cause it to
comply,
with each of the representations, warranties, and covenants
contained in this definition of Special Purpose Entity as if
such
representation, warranty or covenant was made directly by such
SPC
Party. If it is a limited liability company, such limited
liability
company, shall comply with the requirements of part (xvi) of
this
definition of Special Purpose Entity. Upon the withdrawal or
the
disassociation of the SPC Party from the Special Purpose Entity,
the
Special Purpose Entity shall immediately appoint a new member
whose
articles of incorporation are substantially similar to those of
the
SPC Party.
(xvi) It shall at all times (except as permitted in the last
sentence of this part (xvi) of this definition of Special
Purpose
Entity) have (if a corporation) or cause there to be one duly
appointed member of the board of directors of each SPC Party (if
the
Special Purpose Entity is a limited partnership or, except as
otherwise provided in this part (xvi) of the definition of
Special
Purpose Entity), if a
limited liability company, a duly appointed
manager, in each instance reasonably satisfactory to the
Administrative Agent who is not at the time of initial
appointment
and has not been at any time during the preceding five (5)
years
(each an "Independent Director"): (i) a stockholder, director,
officer, employee, partner, attorney or counsel of the Special
Purpose Entity or such SPC Party or any Affiliate of either of
them;
provided, however, such Person may serve or have served as a
director or analogous position with an Affiliate of the Special
Purpose Entity or SPC Party if serving in a position analogous
to
that of an Independent Director; (ii) a customer, supplier or
other
Person who derives any of its purchases or revenues from its
activities with the Special Purpose Entity or such SPC Party or
any
Affiliate of either of them; (iii) a Person controlling or
under
common control with any such stockholder, partner, customer,
supplier or other Person (an employee of CT Corporation or a
similar
entity shall not be deemed to be under such common control with
a
supplier); or (iv) a member of the immediate family of any such
stockholder, director, officer, employee, partner, customer,
supplier or other Person. (As used herein, the term "control"
means
the possession, directly or indirectly, of the power to direct
or
cause the direction of management, policies or activities of a
Person, whether through ownership of voting securities, by
contract
or otherwise). If it does not have an Independent Director
because
of the death, incapacity or resignation of such Independent
Director, it shall, within ten (10) Business Days from receipt
of
notice or knowledge of such circumstances, cause the
Independent
Director in question to be replaced.
(xvii) It shall not cause or permit the board of directors of
an SPC Party to take any action which, under the terms of any
certificate of incorporation, by-
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<PAGE>
laws or any voting trust agreement with respect to any common
stock,
requires the vote of any SPC Party unless at the time of such
action
there shall be at least one member who is an Independent
Director.
(xviii) It shall not pledge its assets for the benefit of any
other Person other than with respect to this Agreement and the
Loan
Documents.
(xix) It shall not voluntarily file or consent to the filing
of a petition for bankruptcy, insolvency, reorganization,
assignment
for the benefit of creditors or similar proceeding under any
federal
or state bankruptcy, insolvency, reorganization or other similar
law
or otherwise seek any relief under any laws relating to the
relief
of debts or the protection of debtors generally, or admit in
writing
its inability to pay its debt's generally as they become due,
or
take action in furtherance of any such action, without the
consent
of each holder of any interest in such entity, and without the
unanimous written consent of each applicable Independent
Director.
(xxi) In the event that any Special Purpose Entity is a
limited liability company, it will be a Delaware limited
liability
company having a sole member.
"SPE
Subsidiary" means a Subsidiary, 100% owned by RAIT SPE and
which
complies at all times with the requirements
of a Special Purpose Entity.
"Straight-Lining of Rents" means, with respect to any lease, the
method by
which rent received with respect to such
lease is considered earned equally over
the term of such lease despite the
existence of (i) any free rent periods under
such lease and (ii) any rent step-up
provisions under such lease.
"Subordinated Assets" means Subordinated Debt Assets and
Preferred
Securities.
"Subordinated Debt Assets" means as to any Person, mezzanine or
other
subordinated indebtedness owed to such
Person, which is not the subject of a
bankruptcy or similar proceeding, is fully
performing as to payment and material
nonpayment obligations thereunder and is
secured by (i) a Lien of a properly
recorded mortgage, deed of trust or other
similar security instrument on a fee
interest or a leasehold interest in real
property and all collateral security
related thereto, which indebtedness is
subject to only to a first Lien of a
recorded mortgage, deed of trust or other
similar security instrument or (ii) a
pledge of the direct or indirect ownership
interests in the Person owing such
mezzanine or other indebtedness, which
ownership interests are subject to no
other Lien.
"Subsidiary" means any corporation or other entity of which
securities or
other ownership interests having ordinary
voting power to elect a majority of
the board of directors or other Persons
performing similar functions are at the
time directly or indirectly owned by RAIT
(or as to any SPE Subsidiary, RAIT
SPE).
"Swing
Lender" means KeyBank in its capacity as the Swing Lender under
the
Swing Loan facility described in Section
2.1(b), and any successor in such
capacity.
"Swing
Loan" means a Loan made by the Swing Lender pursuant to Section
2.1(b).
"Swing
Loan Commitment" means Twenty-Five Million Dollars
($25,000,000).
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"Swing
Loan Refund Amount" has the meaning set forth in Section
2.1(c).
"Syndication Agent" means Bank of America, N.A., in its capacity
as
Syndication Agent hereunder, and its
permitted successors in such capacity in
accordance with the terms of this
Agreement.
"Term" has
the meaning set forth in Section 2.9(a).
"Termination Event" means, with respect to a RAIT Plan, or with
respect to
a Non-RAIT Plan (but, as to any Non-RAIT
Plan, only to the extent an event
described in (i) through (v) below would
result in a Material Adverse Effect),
(i) a "reportable event", as such term is
described in Section 4043 of ERISA
(other than a "reportable event" not
subject to the provision for 30-day notice
to the PBGC), or an event described in
Section 4062(e) of ERISA, (ii) the
withdrawal by any member of the ERISA Group
from a Multiemployer Plan during a
plan year in which it is a "substantial
employer" (as defined in Section
4001(a)(2) of ERISA), or the incurrence of
liability by any member of the ERISA
Group under Section 4064 of ERISA upon the
termination of a Multiemployer Plan,
(iii) the filing of a notice of intent to
terminate any Plan under Section 4041
of ERISA, other than in a standard
termination within the meaning of Section
4041 of ERISA, or the treatment of a Plan
amendment as a distress termination
under Section 4041 of ERISA, (iv) the
institution by the PBGC of proceedings to
terminate, impose liability (other than for
premiums under Section 4007 of
ERISA) in respect of, or cause a trustee to
be appointed to administer, any Plan
or (v) any other event or condition that
would constitute grounds for the
termination of, or the appointment of a
trustee to administer, any Plan or the
imposition of any liability or encumbrance
or Lien on any Real Property Assets
or any member of the ERISA Group under
ERISA.
"Total
Available Commitments" means, at any time of determination, the
lesser of (a) the aggregate amount of the
Commitments at such time, or (b) the
then Borrowing Base Availability.
"Total
Assets" means, as to any Person as of any date, all assets of
such
Person determined in accordance with GAAP,
adjusted to give effect to the
proportional ownership of all
Non-Wholly-Owned Subsidiaries.
"Total
Liabilities" means the sum of (i) total liabilities of the
Consolidated Parties, as determined in
accordance with GAAP, plus (ii) an amount
equal to the aggregate of total
liabilities, as determined in accordance with
GAAP, of each Non-Wholly-Owned Subsidiary
multiplied by the proportional
interest thereof owned by of each such
entity plus (iii) without duplication,
the Indebtedness of the Consolidated
Parties plus (iv) without duplication, the
aggregate of Indebtedness of each
Non-Wholly-Owned Subsidiary multiplied by the
proportional interest thereof owned by each
such entity, as determined in
accordance with GAAP, plus (v) the total
Contingent Obligations of the
Consolidated Parties; provided, that in
each case, all of the above amounts not
otherwise adjusted to account for the
proportional ownership interest of the
Consolidated Parties shall be adjusted to
deduct therefrom the pro rata share of
such amounts allocable to the parties other
than Consolidated Parties (except to
the extent any Consolidated Party would be
legally liable for the full amount of
such liabilities).
"Underlying Asset" means as to any First Mortgage Asset or
Subordinated
Debt Asset, the real property encumbered
thereby or, as to any Preferred
Securities, the real property which is
owned directly by the Person in which the
Securities are part of the equity structure
thereof.
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<PAGE>
"Underlying Real Estate Value" means as to any Real Property Assets
or any
Underlying Assets (a) the appraised value
of the real property as reflected in
the most recent MAI appraisal in form and
substance acceptable to the
Administrative Agent or (b) where no MAI
appraisal is available, (i) the
annualized Property NOI for such property
based upon the most recently completed
two fiscal quarters minus the Capital
Replacement reserve, divided by (ii) the
Capitalization Rate.
"Unfunded
Liabilities" means, with respect to any Plan at any time, the
amount (if any) by which (i) the value of
all benefit liabilities under such
Plan, determined on a plan termination
basis using the assumptions prescribed by
the PBGC for purposes of Section 4044 of
ERISA, exceeds (ii) the fair market
value of all Plan assets allocable to such
liabilities under Title IV of ERISA
(excluding any accrued but unpaid
contributions), all determined as of the then
most recent valuation date for such Plan,
but only to the extent that such
excess represents a reasonably likely
liability of a member of the ERISA Group
to the PBGC or any other Person under Title
IV of ERISA.
"United
States" means the United States of America, including the fifty
states and the District of Columbia.
"Unsecured
Debt" means, for any given calculation date, the total
aggregate principal amount of Indebtedness
of the Consolidated Parties, that is
not Secured Debt, including all
Indebtedness in respect of obligations under any
capitalized leases, plus without
duplication, the aggregate of such Indebtedness
of each Non-Wholly-Owned Subsidiary
multiplied by the proportional interest
thereof owned by each such entity; it being
understood that Unsecured Debt shall
not include principal amounts available to
be drawn (but not drawn) under
outstanding commitments.
"Unsecured
Leverage Limit" means the sum of, without duplication:
(a) sixty-five percent (65%) of the Underlying Real Estate
Value of all Real Property Assets owned by the Consolidated
Parties,
that are not subject to Liens;
(b) the lesser of (i) sixty-five percent (65%) of the
Underlying Real Estate Value of Underlying Assets securing any
First
Mortgage Assets that are not subject to any Liens, and (ii) the
Book
Value of all First Mortgage Assets that are not subject to any
Liens; and
(c) fifty percent (50%) of the Book Value of all Subordinated
Assets that are not subject to any Liens.
"Unused
Commitment Fee" has the meaning set forth in Section 2.8(c).
"Wholly
Owned Subsidiary" means a Subsidiary of which one hundred
percent
(100%) of the outstanding shares of stock
or other equity interests are owned,
directly or indirectly, by a Borrower.
Section
1.2 Accounting Terms and Determinations. Unless otherwise
specified herein, all accounting terms used
herein shall be interpreted, all
accounting determinations hereunder shall
be made, and all financial statements
required to be delivered hereunder shall be
prepared in accordance with GAAP
applied on a basis consistent (except for
changes concurred in by
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<PAGE>
RAIT's independent public accountants) with
the most recent audited consolidated
financial statements of RAIT and its
Consolidated Subsidiaries delivered to the
Administrative Agent; provided that, if the
Borrowers notify the Administrative
Agent that the Borrowers wish to amend any
covenant in Article V to eliminate
the effect of any change in GAAP on the
operation of such covenant (or if the
Administrative Agent notifies the Borrowers
that the Required Lenders wish to
amend Article V for such purpose), then the
applicable Person's compliance with
such covenant shall be determined on the
basis of GAAP in effect immediately
before the relevant change in GAAP became
effective until either such notice is
withdrawn or such covenant is amended in a
manner reasonably satisfactory to the
Borrowers and the Required Lenders. All
calculations with respect to the defined
terms and the covenants in Article V shall
be done without duplication.
Section
1.3 Types of Borrowings. The term "Borrowing" denotes the
aggregation of Loans of one or more Lenders
to be made to the Borrowers pursuant
to Article II on the same date, all of
which Loans are of the same type (subject
to Article VIII) and, except in the case of
Alternate Base Rate Loans, have the
same Interest Period. Borrowings are
classified for purposes of this Agreement
either by reference to the pricing of Loans
comprising such Borrowing (e.g., a
"Euro-Dollar Borrowing" is a Borrowing
comprised of Euro-Dollar Loans) or by
reference to the provisions of Article II
under which participation therein is
determined (i.e., a "Committed Borrowing"
is a Borrowing under Section 2.1 in
which all Lenders participate in proportion
to their Commitments).
ARTICLE II
THE COMMITMENTS
Section
2.1 Commitments to Lend.
(a) Loans. Each Lender severally agrees, on the terms and
conditions
set forth in this Agreement, to make
Committed Loans to the Borrowers or
participate in Letters of Credit issued by
the Fronting Lender on behalf of
Borrowers pursuant to this Article from
time to time during the term hereof in
amounts such that the aggregate principal
amount of Committed Loans by such
Lender at any one time outstanding plus
such Lender's pro rata share (based on
the ratio of its Commitment to the
aggregate of all Commitments) of Swing Loans
outstanding and Letter of Credit Usage
shall not exceed the amount of its
Available Commitment. The aggregate amount
of Committed Loans (including Swing
Loans) together with the Letter of Credit
Usage shall not exceed the lesser of
(i) the Facility Amount and (ii) the Total
Available Commitments. The aggregate
dollar amount of Letters of Credit Usage
shall not at any time exceed
Twenty-five Million Dollars ($25,000,000).
Each Borrowing outstanding under this
Section 2.1 (other than a Borrowing in
connection with a draw under a Letter of
Credit or a Swing Loan) shall be in an
aggregate principal amount of $5,000,000
(for Euro-Dollar Loans) or $1,000,000 (for
Alternate Base Rate Loans), or in
each case an integral multiple of
$1,000,000 in excess thereof (except that any
such Borrowing may be in the aggregate
amount available in accordance with
Section 3.2(c)) and (except for Swing
Loans) shall be made from the several
Lenders ratably in proportion to their
respective Commitments. Subject to the
limitations set forth herein, any amounts
repaid may be reborrowed.
(b) Swing Loans. During the Term, the Swing Lender agrees, on
the
terms and conditions set forth in this
Agreement, to make loans to the Borrowers
pursuant to this Section 2.1(b) from time
to time in amounts such that (i) the
aggregate principal amount of
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Swing Loans does not at any time exceed the
Swing Loan Commitment, and (ii) the
Loans, together with the Letter of Credit
Usage, do not exceed the amount
otherwise available pursuant to Section
2.1(a). Each Borrowing under this
Section 2.1(b) shall be in an aggregate
principal amount of $1,000,000 or any
larger multiple of $100,000 (except that
any such Borrowing may be in the
aggregate available amount of Swing Loans
determined in accordance with the
immediately preceding sentence). Except as
is otherwise provided for herein,
each Swing Loan made to the Borrowers by
the Swing Lender shall be repaid by the
Borrowers or converted as provided for in
Section 2.1(c) not later than the
third (3rd) Domestic Business Day following
the date such Swing Loan is funded
by the Swing Lender. Within the foregoing
limits, the Borrowers may borrow under
this Section 2.1(b), repay or, to the
extent permitted by Section 2.11, prepay
Swing Loans and reborrow at any time during
the Term under this Section 2.1(b).
The Borrower shall not be entitled to a
Swing Line Advance unless all of the
terms and conditions for an advance (other
than the advance notice required by
parts (x) or (y) of Section 2.2 hereof)
including, but not limited to, those set
forth in Section 3.2 hereof, have been
satisfied.
(c) Conversion of Swing Loans to Loans. The Swing Lender shall,
on
behalf of the Borrowers (which hereby
irrevocably direct the Swing Lender to act
on their behalf), on notice given by the
Swing Lender no later than 1:00 P.M.
(New York, New York time) on the second
Domestic Business Day immediately
following the funding of any Swing Loan,
request each Lender to make, and each
Lender hereby agrees to make, a Alternate
Base Rate Loan, in an amount (with
respect to each Lender, its "Swing Loan
Refund Amount") equal to such Lender's
ratable share of the aggregate Commitments
with respect to the aggregate
principal amount of the Swing Loans (the
"Refunded Swing Loans") outstanding on
the date of such notice, to repay the Swing
Lender. Each Lender shall make such
Alternate Base Rate Loan available to the
Administrative Agent at its address
specified in or pursuant to Section 9.1 in
immediately available funds, not
later than 1:00 P.M. (New York, New York
time), on the Domestic Business Day
immediately following the date of such
notice. The Administrative Agent shall
pay the proceeds of such Alternate Base
Rate Loans to the Swing Lender which
shall immediately apply such proceeds to
repay Refunded Swing Loans. Effective
on the day such Alternate Base Rate Loans
are made, the portion of the Swing
Loans so paid shall no longer be
outstanding as Swing Loans, shall no longer be
due as Swing Loans under the Notes held by
the Swing Lender, and shall be due as
Alternate Base Rate Loans under the
respective Notes issued to the Lenders
(including the Swing Lender) in accordance
with their ratable share of the
aggregate Commitments. The Borrowers
authorize the Swing Lender to charge the
Borrowers' accounts with the Administrative
Agent (up to the amount available in
each such account) in order to immediately
pay the amount of such Refunded Swing
Loans to the extent amounts received from
the Lenders are not sufficient to
repay in full such Refunded Swing
Loans.
(d) Purchase of Participations in Swing Loans. If, prior to the
time
Loans would have otherwise been made
pursuant to Section 2.1(c), one of the
events described in clause (f) or (g) of
Section 6.1 with respect to any
Borrower shall have occurred and be
continuing, each Lender shall, on the date
such Loans were to have been made pursuant
to the notice referred to in Section
2.1(c) (the "Refunding Date"), purchase an
undivided participating interest in
the Swing Loans in an amount equal to such
Lender's Swing Loan Refund Amount. On
the Refunding Date, each Lender shall
transfer to the Swing Lender, in
immediately available funds, such Lender's
Swing Loan Refund Amount, and upon
receipt thereof the Swing Lender shall
deliver to such Lender a Swing Loan
participation certificate dated the date of
the Swing Lender's receipt of such
funds and in the Swing Loan Refund Amount
of such Lender.
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(e) Payments on Participated Swing Loans. Whenever, at any time
after the Swing Lender has received from
any Lender such Lender's Swing Loan
Refund Amount pursuant to Section 2.1(d),
the Swing Lender receives any payment
on account of the Swing Loans in which the
Lenders have purchased participations
pursuant to Section 2.1(d), the Swing
Lender will promptly distribute to each
such Lender its ratable share (determined
on the basis of the Swing Loan Refund
Amounts of all of the Lenders) of such
payment (appropriately adjusted, in the
case of interest payments, to reflect the
period of time during which such
Lender's participating interest was
outstanding and funded); provided, however,
that in the event that such payment
received by the Swing Lender is required to
be returned, such Lender will return to the
Swing Lender any portion thereof
previously distributed to it by the Swing
Lender.
(f) Obligations to Refund or Purchase Participations in Swing
Loans
Absolute. Each Lender's obligation to
transfer the amount of a Loan to the Swing
Lender as provided in Section 2.1(c) or to
purchase a participating interest
pursuant to Section 2.1(d) shall be
absolute and unconditional and shall not be
affected by any circumstance, including,
without limitation, (i) any set-off,
counterclaim, recoupment, defense or other
right which such Lender, the
Borrowers or any other Person may have
against the Swing Lender or any other
Person, other than resulting from the Swing
Lender's gross negligence or willful
misconduct in connection with making any
such Swing Loan, (ii) the occurrence or
continuance of a Default or an Event of
Default or the termination or reduction
of the Commitments, (iii) any adverse
change in the condition (financial or
otherwise) of any Borrower or any other
Person, (iv) any breach of this
Agreement by any Borrower, any other Lender
or any other Person, or (v) any
other circumstance, happening or event
whatsoever, whether or not similar to any
of the foregoing.
Section
2.2 Notice of Committed Borrowing. The Borrowers shall give
Administrative Agent notice not later than
(A) 12:00 noon (New York, New York
time) (x) one Domestic Business Day before
each Alternate Base Rate Borrowing,
or (y) three Euro-Dollar Business Days
before each Euro-Dollar Borrowing or (B)
10:00 a.m. (New York, New York time) on the
date of each Borrowing of a Swing
Loan, specifying:
(i) the date of such Borrowing, which shall be a Domestic
Business
Day in the case of a Domestic Borrowing or a Euro-Dollar
Business
Day in the
case of a Euro-Dollar Borrowing,
(ii) the aggregate amount of such Borrowing,
(iii) whether the Loans comprising such Borrowing are to be
Alternate
Base Rate Loans, Euro-Dollar Loans, or Swing Loans,
(iv) in the case of a Euro-Dollar Borrowing, the duration of
the
Interest Period applicable thereto, subject to the provisions of
the
definition
of Interest Period,
(v) the Total Available Commitments,
(vi) the Outstanding Balance.
Together
with the notice to the Administrative Agent as specified
immediately above, the Borrowers shall
deliver to the Administrative Agent a
completed, current certificate, identifying
the Borrowing Base Assets against
which the Borrowing is being requested,
setting forth the calculation of
Borrowing Base Availability, and providing
other information concerning the
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Borrowing Base and the Borrowers, in the
form attached hereto as Exhibit D (a
"Borrowing Base Certificate").
The Borrowers shall
give the Administrative Agent and the designated
Fronting Lender, written notice that it
desires to have Letters of Credit (a
"Letter of Credit") issued hereunder no
later than 10:00 A.M., New York, New
York time, at least five (5) Domestic
Business Days prior to the date of such
issuance. Each such notice shall specify
(i) the designated Fronting Lender (if
other than KeyBank and, if not KeyBank,
such other Fronting Lender shall be
subject to the approval of the
Administrative Agent), (ii) the aggregate amount
of the requested Letters of Credit, (iii)
the individual amount of each
requested Letter of Credit and the number
of Letters of Credit to be issued,
(iv) the date of such issuance (which shall
be a Domestic Business Day), (v) the
name and address of the beneficiary, (vi)
the expiration date of the Letter of
Credit (which in no event shall be in
excess of twelve (12) months from the date
of issuance or less than sixty (60)
Domestic Business Days prior to the Maturity
Date), (vii) the purpose and circumstances
for which such Letter of Credit is
being issued, (viii) the terms upon which
such Letter of Credit may be drawn
down (which terms shall be approved by the
Fronting Lender), (ix) the Total
Available Commitments, (x) the Borrowing
Base Asset against which the issuance
of the Letter(s) of Credit is being
requested and the Advance Rate of such
Letter(s) of Credit with respect to such
Borrowing Base Asset (taking into
consideration the amount of all Borrowings
and Letter of Credit Usage
outstanding with respect to such Borrowing
Base Asset), including a
certification from the chief financial
officer or chief accounting officer of
RAIT setting forth in reasonable detail the
manner by which the foregoing
calculations have been made, and (xi) the
Outstanding Balance. Together with the
notice to the Administrative Agent as
specified immediately above, the Borrowers
shall deliver to the Administrative Agent a
completed, current Borrowing Base
Certificate stating that, after taking into
account the issuance of any such
Letter(s) of Credit, the Borrowers shall be
in full compliance with all of the
covenants contained in Section 5.8 of this
Agreement and that the requirements
with respect to the Advance Rates shall be
met. Each such notice may be revoked
telephonically by Borrowers to each of the
applicable Fronting Lender and the
Administrative Agent any time prior to the
date of issuance of the Letter of
Credit by the applicable Fronting Lender,
provided such revocation is confirmed
in writing by Borrowers to Fronting Lender
and the Administrative Agent within
one (1) Domestic Business Day by facsimile.
No later than 10:00 A.M. New York,
New York time on the date that is five (5)
Domestic Business Days prior to the
date of issuance, Borrowers shall specify a
precise description of the documents
and the verbatim text of any certificate to
be presented by the beneficiary of
such Letter of Credit, which if presented
by such beneficiary prior to the
expiration date of the Letter of Credit
would require Fronting Lender to make a
payment under the Letter of Credit;
provided that Fronting Lender may, in its
reasonable judgment, require reasonable
changes in any such documents and
certificates only in conformity with
changes in customary and commercially
reasonable practice or law and provided
further, that no Letter of Credit shall
require payment against a conforming draft
to be made thereunder on the
following Domestic Business Day that such
draft is presented if such
presentation is made later than 10:00 A.M.
New York, New York time (except that
if the beneficiary of any Letter of Credit
requests at the time of the issuance
of its Letter of Credit that payment be
made on the same Domestic Business Day
against a conforming draft, such
beneficiary shall be entitled to such a same
day draw, provided such draft is presented
to the applicable Fronting Lender no
later than 10:00 A.M. New York, New York
time and provided further that, prior
to the issuance of such Letter of Credit,
Borrowers shall have requested to
Fronting Lender and the Administrative
Agent that such beneficiary shall be
entitled to a same day draw). In
determining whether to pay on such Letter of
Credit, Fronting Lender shall be
responsible only to determine that the
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documents and certificates required to be
delivered under the Letter of Credit
have been delivered and that they comply on
their face with the requirements of
that Letter of Credit.
Section
2.3 Notice to Lenders; Funding of Loans.
(a) Upon receipt of a notice from Borrowers in accordance with
Section 2.2 hereof (each such notice being
a "Notice of Committed Borrowing"),
the Administrative Agent shall, on the date
such Notice of Committed Borrowing
is received by the Administrative Agent,
notify each Lender of the contents
thereof and of such Lender's share of such
Borrowing, of the interest rate
determined pursuant thereto and the
Interest Period(s) (if different from those
requested by the Borrowers) and (unless
such Notice of Committed Borrowing is
for the issuance of a Letter of Credit)
such Notice of Committed Borrowing shall
not thereafter be revocable by the
Borrowers, except as is otherwise
specifically provided for in this
Agreement.
(b) Not later than 1:00 p.m. (New York, New York time) on the
date
of each Borrowing (including, without
limitation, each Swing Borrowing) as
indicated in the Notice of Committed
Borrowing, each Lender (or, in the case of
a Swing Loan, the Swing Lender) shall
(except with respect to Notices of
Committed Borrowing for issuances of
Letters of Credit) make available its share
of such Borrowing in Federal funds
immediately available in New York, New York,
to the Administrative Agent at its address
referred to in Section 9.1. If
Borrowers have requested the issuance of a
Letter of Credit, no later than 12:00
Noon (New York, New York time) on the date
of such issuance as indicated in the
Notice of Committed Borrowing, Fronting
Lender shall issue such Letter of Credit
in the amount so requested and deliver the
same to Borrower, with a copy thereof
to the Administrative Agent. Immediately
upon the issuance of each Letter of
Credit by Fronting Lender, such Fronting
Lender shall be deemed to have sold and
transferred to each other Lender, and each
such other Lender shall be deemed to,
and hereby agrees to, have irrevocably and
unconditionally purchased and
received from Fronting Lender, without
recourse or warranty, an undivided
interest and a participation in such Letter
of Credit, any drawing thereunder,
and the obligations of Borrowers hereunder
with respect thereto, and any
security therefor or guaranty pertaining
thereto, in an amount equal to such
Lender's ratable share thereof (based upon
the ratio its Commitment bears to the
aggregate of all Commitments). Upon any
change in any of the Commitments in
accordance herewith, there shall be an
automatic adjustment to such
participations to reflect such changed
shares. The applicable Fronting Lender
shall have the primary obligation to fund
any and all draws made with respect to
such Letter of Credit notwithstanding any
failure of a participating Lender to
fund its ratable share of any such draw.
Unless the Administrative Agent
determines that any applicable condition
specified in Article III has not been
satisfied, the Administrative Agent will
instruct the applicable Fronting Lender
to make such Letter of Credit available to
the Borrowers and such Fronting
Lender shall make such Letter of Credit
available to the Borrowers at the
Borrowers' aforesaid address on the date of
the issuance of such Letter of
Credit. Without in any way implying a right
of Fronting Lender not to issue a
Letter of Credit as provided for herein, if
a Fronting Lender shall fail to
issue a Letter of Credit (notwithstanding
that the applicable conditions
specified in Article III have been
satisfied), the Borrowers may designate a
substitute Fronting Lender, provided that
the notice periods set forth in
Section 2.2(b) above shall begin anew.
(c) Unless the Administrative Agent shall have received notice
from
a Lender prior to the date of any Borrowing
that such Lender will not make
available to the Administrative Agent such
Lender's share of such Borrowing, the
Administrative Agent may assume that such
Lender has made such share available
to the Administrative Agent on the date of
such Borrowing in accordance with
subsection (b) of this Section 2.3 and the
Administrative Agent may, in
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reliance upon such assumption, but shall
not be obligated to, make available to
the Borrowers on such date a corresponding
amount on behalf of such Lender. If
and to the extent that such Lender shall
not have so made such share available
to the Administrative Agent, such Lender
and, without prejudice with respect to
its rights and remedies against such
Lender, the Borrowers, severally agree to
repay to the Administrative Agent, within
one (1) Domestic Business Day
following receipt of demand, such
corresponding amount together with interest
thereon, for each day from the date such
amount is made available to the
Borrowers until the date such amount is
repaid to the Administrative Agent, at
(i) in the case of the Borrowers, a rate
per annum equal to the higher of the
Federal Funds Rate and the interest rate
applicable thereto pursuant to Section
2.6 and (ii) in the case of such Lender,
the Federal Funds Rate. If such Lender
shall repay to the Administrative Agent
such corresponding amount, such amount
so repaid shall constitute such Lender's
Loan included in such Borrowing for
purposes of this Agreement. If at any time,
any Lender shall fail to make
available to the Administrative Agent such
Lender's share of any such Borrowing,
as provided for in this Section 2.3(c), the
Borrowers shall have the right, upon
five (5) Domestic Business Day's notice to
the Administrative Agent to either
(x) cause a bank, reasonably acceptable to
the Administrative Agent, to offer to
purchase the Commitments of such Lender for
an amount equal to such Lender's
outstanding Loans, and to become a Lender
hereunder, which offer such Lender is
hereby required to accept, or (y) to repay
in full all Loans then outstanding of
such Lender, together with interest and all
other amounts due thereon, upon
which event, such Lender's Commitment shall
be deemed to be cancelled pursuant
to Section 2.11(c) and the Facility Amount
shall be reduced by a corresponding
amount.
Section
2.4 Notes.
(a) The Loans of each Lender shall be evidenced by a single
Note
payable to the order of such Lender for the
account of its Applicable Lending
Office.
(b) Each Lender may, by notice to the Borrowers and the
Administrative Agent, request that its
Loans be evidenced by a separate Note in
an amount equal to the aggregate unpaid
principal amount of such Loans. Any
additional costs incurred by the
Administrative Agent, the Borrowers or the
Lenders in connection with preparing such a
Note shall be at the sole cost and
expense of the Lender requesting such Note.
In the event any Loans evidenced by
such a Note are paid in full prior to the
Maturity Date, any such Lender shall
return such Note to the Borrowers. Each
such Note shall be in substantially the
form of Exhibit A-1 hereto with appropriate
modifications to reflect the fact
that it evidences solely Loans of the
relevant type, or Exhibit A-2 with respect
to the Swing Lender. Each reference in this
Agreement to the "Note" of such
Lender shall be deemed to refer to and
include any or all of such Notes, as the
context may require.
(c) Upon receipt of each Lender's Note pursuant to Section
3.1(a),
the Administrative Agent shall forward such
Note to such Lender. Each Lender
shall record in its records the date,
amount, type and maturity of each Loan
made by it and the date and amount of each
payment of principal made by the
Borrowers with respect thereto, and may, if
such Lender so elects in connection
with any transfer or enforcement of its
Note, endorse on the appropriate
schedule appropriate notations to evidence
the foregoing information with
respect to each such Loan then outstanding;
provided that the failure of any
Lender to make any such recordation or
endorsement shall not affect the
obligations of the Borrowers hereunder or
under the Notes. Each Lender is hereby
irrevocably authorized by the Borrowers so
to endorse its Note and to attach to
and make a part of its Note a continuation
of any such schedule as and when
required.
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(d) The Loans
shall mature, and the remaining principal amount
thereof shall be due and payable by the
Borrowers, on the Maturity Date.
(e) There shall be no more than eight (8) Interest Periods
applicable to the Euro-Dollar Loans
outstanding at any one time. Notwithstanding
the foregoing, subject to the approval of
the Administrative Agent, in the event
the Borrowers wish to combine one or more
Euro-Dollar Loans into a single
Interest Period, the Borrowers may from
time to time be entitled to select an
Interest Period of less than one month,
with interest at a rate per annum equal
to the sum of (i) the Adjusted London
Interbank Offered Rate on the date of
determination for an Interest Period of one
(1) month plus (ii) the Applicable
Margin for Euro-Dollar Loans on such date
of determination.
Section
2.5 Letters of Credit.
(a) Subject to the terms contained in this Agreement and the
other
Loan Documents, upon the receipt of a
Notice of Committed Borrowing requesting
the issuance of a Letter of Credit,
Fronting Lender shall issue a Letter of
Credit or Letters of Credit in such form as
is reasonably acceptable to
Borrowers, in an aggregate amount equal to
the amount requested, provided that
after the issuance of such Letters of
Credit, (i) the aggregate amount of issued
and outstanding Letters of Credit shall not
exceed Twenty-Five Million Dollars
($25,000,000), and (ii) the Letter of
Credit Usage, when added to the aggregate
principal amount of the Loans outstanding,
shall not exceed the lesser of (y)
the Total Available Commitments, and (z)
the Facility Amount. Fronting Lender
shall promptly notify Administrative Agent
and each Lender of the issuance of
any such Letter of Credit, together with
the amount thereof, simultaneously
therewith.
(b) Each Letter of Credit shall be issued in the minimum
aggregate
amount of One Million Dollars ($1,000,000)
or any amount in excess thereof.
(c) In the event of any request for a drawing under any Letter
of
Credit by the beneficiary thereunder,
Fronting Lender shall promptly notify
Borrowers and the Administrative Agent (and
the Administrative Agent shall
promptly notify each Lender thereof) on or
before the date on which Fronting
Lender intends to honor such drawing, and,
except as provided in this subsection
(c), Borrowers shall reimburse Fronting
Lender, in immediately available funds,
on the same day on which such drawing is
honored in an amount equal to the
amount of such drawing. Notwithstanding
anything contained herein to the
contrary, however, unless Borrowers shall
have notified the Administrative Agent
and Fronting Lender prior to 10:00 a.m.
(New York, New York time) on the date of
such drawing (provided that the same shall
be a Domestic Business Day) that
Borrowers intend to reimburse Fronting
Lender for the amount of such drawing
with funds other than the proceeds of the
Loans, Borrowers shall be deemed to
have timely given a Notice of Committed
Borrowing pursuant to Section 2.2 to the
Administrative Agent, requesting a
Borrowing of Alternate Base Rate Loans on the
date on which such drawing is honored and
in an amount equal to the amount of
such drawing. Each Lender shall, in
accordance with Section 2.3(b), make
available its share of such Borrowing to
the Administrative Agent, the proceeds
of which shall be applied directly by the
Administrative Agent to reimburse
Fronting Lender for the amount of such
draw. In the event that any Lender fails
to make available to Fronting Lender the
amount of such Lender's participation
on the date of a drawing, Fronting Lender
shall be entitled to recover such
amount on demand from such Lender together
with interest at the Federal Funds
Rate commencing on the date of drawing.
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(d) If, after the date hereof, any change in any law or
regulation
or in the interpretation thereof by any
court or administrative or governmental
authority charged with the administration
thereof shall either (a) impose,
modify or deem applicable any reserve,
special deposit or similar requirement
against letters of credit issued by, or
assets held by, or deposits in or for
the account of, or participations in any
letter of credit, upon any Lender
(including Fronting Lender) or (b) impose
on any Lender any other condition
regarding this Agreement or such Lender
(including Fronting Lender) as it
pertains to the Letters of Credit or any
participation therein and the result of
any event referred to in the preceding
clause (a) or (b) shall be to increase
the cost to the Fronting Lender or any
Lender of issuing or maintaining any
Letter of Credit or participating therein
then the Borrowers shall pay to the
Fronting Lender or such Lender, upon
written demand therefor to the Borrowers
from the Administrative Agent (provided
such demand is received by the Borrowers
within one hundred twenty (120) days
following the date on which such increased
cost becomes effective as against the
Fronting Lender or such Lender), such
additional amounts as shall be required to
compensate the Fronting Lender or
such Lender for such increased costs or
reduction in amounts received or
receivable hereunder together with interest
thereon at the Federal Funds Rate
plus the Applicable Margin on Alternate
Base Rate Loans at such time. The amount
specified in the written demand shall be
conclusive in the absence of
demonstrable error.
(e) Borrower hereby agrees to protect, indemnify, pay and save
Fronting Lender harmless from and against
any and all claims, demands,
liabilities, damages, losses, costs,
charges and expenses (including reasonable,
actual attorneys' fees and disbursements)
which Fronting Lender may incur or be
subject to as a result of (i) the issuance
of the Letters of Credit, other than
as a result of the gross negligence or
willful misconduct of Fronting Lender or
(ii) the failure of Fronting Lender to
honor a drawing under any Letter of
Credit as a result of any act or omission,
whether rightful or wrongful, of any
present or future de jure or de facto
government or governmental authority
(collectively, "Governmental Acts"). As
between Borrowers or any Fronting
Lender, Borrowers assume all risks of the
acts and omissions of, or misuses of
the Letters of Credit issued by Fronting
Lender by, the beneficiaries of such
Letters of Credit. In furtherance and not
in limitation of the foregoing,
Fronting Lender shall not be responsible
(i) for the form, validi
