Borrowing Base Properties. (a) At all times, the REIT and Borrower shall maintain the Borrowing Base Properties in accordance with this Article IX and the other terms and conditions of the Loan Documents. (b) In addition to the other requirements that are set forth in the definition of “Borrowing Base Property,” in order for a Real Property to qualify as a Borrowing Base Property, it shall comply with the following conditions at all times: (i) Such Borrowing Base Property shall be wholly owned by a Subsidiary Guarantor (other than the Borrowing Base Property known as 000 Xxxxxxxxxx Xxxxxx, Xxxxxxxx, Xxx Xxxx, which shall be wholly owned by the 163 Washington SPE) that complies with the covenants and provisions of this Agreement relating to Subsidiary Guarantors and the 163 Entities; provided, however, that a Borrowing Base Property may, with Administrative Agent’s written consent, be leased to a Subsidiary Guarantor under an Approved Ground Lease; (ii) The representations and warranties contained in Sections 3.05(a), 3.06(b), 3.22, and 3.23 shall at all times be true and correct with respect to such Borrowing Base Property and such Borrowing Base Property shall be in compliance with the covenants set forth in Section 9.01(c); (iii) Such Borrowing Base Property shall be an income producing, multi-family, mixed-use, retail, distribution, parking or office property, provided that parking facilities shall be permitted only if operated by a third-party operator and distribution facilities shall be permitted only to the extent they meet the conditions set forth in clause (v) of this Section 9.01(b); (iv) At least eighty percent (80%) of the (x) units in any multi-family Borrowing Base Property, and (y) net rentable square footage of any other type of Borrowing Base Property (other than a parking facility), shall be subject to executed Leases from tenants in occupancy who are not in default beyond the expiration of all applicable notice and grace periods under their Lease and not in bankruptcy (the “Occupancy Rate”); provided, however, that if (A) on any date, the Occupancy Rate is less than eighty percent (80%), there shall be a grace period of two (2) fiscal quarters to increase such occupancy provided that (i) Borrower delivers written notice of the failure to comply with such occupancy requirement within three (3) Business Days after a Responsible Officer of Borrower obtains knowledge of such failure, and (ii) at all times during such grace period, the Occupancy Rate does not fall below seventy percent (70%) at any time and (B) on any date, the Occupancy Rate is less than seventy percent (70%), there shall be a grace period of two (2) fiscal quarters (which shall be concurrent with and not in addition to the two (2) fiscal quarter grace period referred to in clause (A), above) to increase such occupancy provided that (i) Borrower delivers written notice of the failure to comply with such occupancy requirement within three (3) Business Days after a Responsible Officer of Borrower obtains knowledge of such failure, (ii) at all times during such grace period, the Occupancy Rate does not fall below fifty percent (50%) at any time, and (iii) during the pendency of such grace period, the percentage applicable in calculating the Value-Based Borrowing Base Limit for the applicable Borrowing Base Property shall be reduced by fifty percent (50%); thereafter, and in the event any Borrowing Base Property has an Occupancy Rate below fifty percent (50%) at any time, such Borrowing Base Property shall be removed from the Borrowing Base pursuant to Section 9.03; (v) If such Borrowing Base Property is a distribution facility, it shall be an Investment Grade Borrowing Base Property having at least eight (8) years remaining on the term of the Lease to the applicable Investment Grade Tenant at the time such facility is added to the Borrowing Base (excluding any extension options) and where the applicable Investment Grade Tenant shall be in occupancy, not in default beyond the expiration of all applicable notice and grace periods under its Lease and not in bankruptcy; (vi) If such Borrowing Base Property is a Single Tenant Asset, then the remaining Lease term related thereto shall be no less than six (6) years (excluding any extension options); (vii) An Appraisal shall be required for each Borrowing Base Property during the term of this Agreement as follows: (A) within six (6) months prior to the Effective Date (with respect to each initial Borrowing Base Property that is added to the Borrowing Base upon the Effective Date, and (B) within six (6) months prior to the date that any Borrowing Base Property is added to the Borrowing Base in accordance with the Loan Documents (which respect to Borrowing Base Properties added after the Effective Date), and that in each case that is acceptable to Administrative Agent in its reasonable discretion, subject to the provisions of Sections 9.01(b)(viii) and (ix); (viii) Notwithstanding anything to the contrary in clause (vii) above, in Administrative Agent’s sole discretion, a new Appraisal may be required, at Borrower’s expense, for each Borrowing Base Property commencing (i) twenty four (24) months after the Effective Date (with respect to each initial Borrowing Base Property that is added to the Borrowing Base upon the Effective Date), (ii) twenty four (24) months after the date that any Borrowing Base Property is thereafter added to the Borrowing Base (with respect to any such subsequently-added Borrowing Base Property), and (iii) twenty four (24) months after the date of any Appraisal obtained pursuant to this Section 9.01(viii). Borrower may, at its election and expense, also request a new Appraisal at any of such times. For purposes of this Section 9.01(b)(viii), an Appraisal that has a date of value that is no earlier than six (6) months prior to the end of any applicable 24-month period described in this Section 9.01(b)(viii) shall, if it is approved by Administrative Agent and complies with the requirements of this Agreement, be deemed to satisfy the requirements herein for a new Appraisal to be obtained commencing on each such 24-month period. (ix) If the Net Operating Income for any Borrowing Base Property shall decrease (A) by more than five percent (5%) from one fiscal quarter to the next and the Net Operating Income of such Borrowing Base Property for the next succeeding fiscal quarter does not make up for such decline in Net Operating Income or (B) ten percent (10%) or more from the Net Operating Income of such Borrowing Base Property for the previous calendar year, then a new Appraisal for such Borrowing Base Property shall be required to be obtained at Borrower’s cost. (x) For purposes of determining the Appraised Value of any Borrowing Base Property hereunder, the most recent Appraisal thereof obtained by in accordance with the terms hereof shall govern the determination of the Appraised Value thereof; provided, however that if a new Appraisal is not required to be obtained for such Borrowing Base Property pursuant to Section 9.01(b)(viii) or (ix), until such time as the new Appraisal shall have been obtained in accordance with this Agreement, then the Borrowing Base Asset Value of such Borrowing Base Property shall equal the lesser of the Acquisition Cost of such Borrowing Base Property or the Estimated Value thereof. (xi) Borrower may elect, pursuant to the definition of “Borrowing Base Asset Value,” to require the determination of the component of the definition of Borrowing Base Asset Value referenced in clause (b) of the definition thereof to be based upon the Estimated Values of the Borrowing Base Properties or the Appraised Values of the Borrowing Base Properties only once per fiscal quarter, in connection with the delivery by Borrower to Administrative Agent of the Borrowing Base Certificate that is due to be delivered during such fiscal quarter, and such election shall be made on an “all or none” basis such that, if Borrower elects to require such determination to be based on Appraised Values, such election must be made as to all Borrowing Base Properties, and if Borrower elects to require such determination to be based on Estimated Values, such election must be made as to all Borrowing Base Properties (provided, however, that in the event that Borrower obtains an updated Appraisal pursuant to Section 9.01(b)(viii) Borrower shall be permitted to required that such determination be made on the basis of such updated Appraised Value); provided, further, that if the Appraised Value of one or more Borrowing Base Properties cannot be calculated solely because Appraisals have been ordered but have not yet been delivered for such Borrowing Base Property, as required hereby, the Borrowing Base Appraised Value may nonetheless be determined according to the Estimated Value of each such affected Borrowing Base Property and the Appraised Value of all other Borrowing Base Properties until such time as an Appraisal for such affected Borrowing Base Property has been obtained as provided herein. (xii) The survey for such Borrowing Base Property delivered to the Administrative Agent in connection with this Agreement shall be prepared in accordance with the 2011 Minimum Standard Detail Requirements for ALTA/ASM Land Title Surveys. Except for those matters reflected on such survey or in the title policy for such Borrowing Base Property delivered to the Administrative Agent in connection with this Agreement or as otherwise disclosed to the Administrative Agent, as of the date such Real Property is accepted as a Borrowing Base Property, there shall not be any construction or commencement of construction on such Borrowing Base Property of any new external structures, or additions or extensions thereto, or other external improvements, whether to existing structures or not. Except as may be disclosed on the surveys delivered pursuant to this Agreement and in the title policy for such Borrowing Base Property: (i) none of the material improvements comprising part of such Borrowing Base Property shall be outside the boundaries of such Borrowing Base Property (or building restriction or setback lines applicable thereto); (ii) no material improvements on adjoining properties shall encroach upon such Borrowing Base Property; and (iii) no material improvements comprising part of such Borrowing Base Property shall encroach upon or violate any easements or any other encumbrance upon such Borrowing Base Property, in each case other than minor encumbrances which could not reasonably be expected to have a (x) material adverse effect with respect to the financial condition or the operations of such Borrowing Base Property, (y) material adverse effect on the Borrowing Base Asset Value of such Borrowing Base Property, or (z) material adverse effect on the ownership of such Borrowing Base Property. (xiii) All transfer taxes, deed stamps, intangible taxes or other amounts in the nature of transfer taxes required to be paid by any Credit Party under applicable legal requirements currently in effect in connection with the transfer of such Borrowing Base Property to the Borrower, any transfer of a controlling interest in the Borrower or the formation of the REIT, as applicable, shall have been paid or will be paid prior to delinquency. All mortgage, mortgage recording, stamp, intangible or other similar tax required to be paid by any Credit Party under applicable legal requirements currently in effect in connection with the execution, delivery, recordation, filing, registration, perfection or enforcement of any of the Loan Documents, including, without limitation, the Mortgage, shall have been paid prior to delinquency. (xiv) The Borrower shall have delivered to Administrative Agent copies of all Leases and all unrecorded easement agreements, reciprocal easement agreements, management agreements and material agreements in Borrower’s possession or custody which affect in any material respect the Borrower’s interest in such Borrowing Base Property. (xv) Borrower shall have received no notice of any condemnation proceeding involving such Borrowing Base Property or any portion thereof or parking facility used in connection therewith, nor shall any portion of such Borrowing Base Property or any parking facility used in connection therewith be damaged due to fire or other casualty, except those proceedings or casualties that could not reasonably be expected to materially interfere with the current use and value of such Borrowing Base Property or to cause such property to otherwise no longer qualify as a Borrowing Base Property. (xvi) Such Borrowing Base Property shall have adequate rights of access to public ways and is currently served by adequate electric, gas, water, sewer, sanitary sewer and storm drain facilities. All public utilities necessary to the use and enjoyment of such Borrowing Base Property as intended to be used and enjoyed shall be located in the public right-of-way abutting such Borrowing Base Property or in private easements or license areas benefitting such Borrowing Base Property. (xvii) No Credit Party shall have suffered, permitted or initiated the joint assessment of such Borrowing Base Property with any other real property constituting a tax lot separate and apart from the tax lot comprising such Borrowing Base Property. (xviii) As of the date of its inclusion as a Borrowing Base Property, such Borrowing Base Property, including all buildings, improvements, parking facilities, sidewalks, storm drainage systems, roofs, plumbing systems, HVAC systems, fire protection systems, electrical systems, equipment, elevators, exterior sidings and doors, landscaping, irrigation systems and all structural components, shall be in good condition, order and repair in all material respects subject to reasonable and customary wear and tear; and there shall exist no structural or other material defects or damages in such Borrowing Base Property, whether latent or otherwise, and no Credit Party shall have received written notice from any insurance company or bonding company of any defects or inadequacies in such Borrowing Base Property, or any part thereof, which would, in either case, adversely affect the insurability of the same or cause the imposition of extraordinary premiums or charges thereon or of any termination or threatened termination of any policy of insurance or bond. (xix) The Borrower shall have delivered to the Administrative Agent a true and correct copy of the Management Agreement that is in effect with respect to such Borrowing Base Property. The Management Agreement with respect to such Borrowing Base Property delivered to the Administrative Agent shall be the only Management Agreement related to such Borrowing Base Property, and shall be in full force and effect with no default or event of default, in either case beyond all applicable notice and grace periods, existing thereunder. (xx) To the knowledge of Borrower, no portion of such Borrowing Base Property shall have been purchased with proceeds of any illegal activity and no part of the proceeds of any Credit Extension will be used in connection with any illegal activity. (c) The REIT and Borrower hereby covenant and agrees with respect to any Borrowing Base Property (i) to comply with Sections 5.05, 5.12, 5.18, 5.19, 5.21, 6.02, 6.11, and 6.18, and (ii) as follows:
Appears in 1 contract
Samples: Credit Agreement (American Realty Capital New York Recovery Reit Inc)
Borrowing Base Properties. (a) At all times, the REIT and Borrower shall maintain cause the Eligible Real Estate included in the calculation of the Borrowing Base Availability and inclusion as Borrowing Base Properties to at all times satisfy all of the following conditions:
(i) the Eligible Real Estate shall be owned one hundred percent (100%) in fee simple or leased under a Ground Lease by Borrower or a Subsidiary Guarantor (provided that notwithstanding anything to the contrary in this Agreement, from and after the date of this Agreement, the Borrowing Base Properties in accordance shall only be owned by Subsidiary Guarantors) and leased to a Subsidiary Guarantor that is a TRS Lessee pursuant to an Operating Lease, free and clear of all Liens other than the Liens permitted by §8.2(ix) (provided that with this Article IX respect to any Real Estate that becomes a Borrowing Base Property on or after the Closing Date, such TRS Lessee shall be a Wholly-Owned Subsidiary of TRS), and the other terms such Eligible Real Estate and conditions all assets of the Loan Documents.TRS Lessee shall not have applicable to it any negative pledge or restriction on the sale, pledge, transfer, mortgage or assignment of such property (including any restrictions contained in any applicable organizational documents);
(bii) In addition none of the Eligible Real Estate shall have any material environmental, structural or other defects, and not be subject to any condemnation proceeding, that in any event would give rise to a materially adverse effect as to the other value, use of, operation of or ability to sell or finance such property, and such property shall be in compliance with federally mandated flood insurance requirements that are set forth (including the maintenance of flood insurance if all or any portion of any Building is located within a federally designated flood hazard zone);
(iii) the only assets of such Subsidiary Guarantor (including the TRS Lessee) shall be the Eligible Real Estate included in the definition calculation of “the Borrowing Base Availability and as a Borrowing Base Property together with related fixtures and personal property;
(iv) no strike, lockout, labor dispute, embargo, injunction or other proceeding has occurred which causes, for more than fifteen (15) consecutive days, the cessation or substantial curtailment of revenue producing activities of the Borrower or any Guarantor at such Borrowing Base Property,” in order for a Real Property ;
(v) to qualify as a Tier I Property:
(A) such Eligible Real Estate is used as a limited service, select service or full service, in each case of upscale or midscale quality or better;
(B) such Eligible Real Estate is (1) managed by a third party manager approved by the Agent; and (2) operated under a Management Agreement reasonably satisfactory to the Agent;
(C) such Eligible Real Estate is operated under an Approved Brand pursuant to a Franchise Agreement approved by Agent;
(D) such Eligible Real Estate was first acquired by such Subsidiary Guarantor after September 30, 2015 (other than the Hilton Garden Inn located in Xxxxxx, Maryland); and
(E) the construction of the Hotel Property on such Eligible Real Estate was either substantially completed or has undergone a complete renovation consistent with the applicable PIP within fifteen (15) years of the date such Eligible Real Estate is first included in the calculation of Borrowing Base Availability;
(vi) with respect to any Tier II Property, such Eligible Real Estate is managed by a third-party manager approved by the Agent and operated under a Management Agreement reasonably satisfactory to Agent;
(vii) prior to the occurrence of the Qualified Capital Raise, all of the hotel rooms in the Borrowing Base Properties must be open for business, have at least one year of operating history and not under Material Renovation, and not more than ten percent (10%) of the aggregate hotel rooms in the Borrowing Base Properties may be under any Renovation (but for the avoidance of doubt, none may be under Material Renovation);
(viii) from and after the occurrence of the Qualified Capital Raise:
(A) at least ninety percent (90%) of the aggregate hotel rooms in the Borrowing Base Properties must be open for business, not under Material Renovation, and have at least one year of operating history; and
(B) not more than ten percent (10%) of the total Borrowing Base Availability shall be attributable to Hotel Properties which are recently-completed developments or assets undergoing Material Renovation, but which assets included in the calculation of Borrowing Base Availability shall in any event have at least three (3) months of operating history (notwithstanding the foregoing, a failure to satisfy the requirements of this clause (viii) (B) shall not result in any Real Estate not being included as a Borrowing Base Property, it shall comply with the following conditions at all times:
(i) Such Borrowing Base Property shall be wholly owned by a Subsidiary Guarantor (other than the Borrowing Base Property known as 000 Xxxxxxxxxx Xxxxxx, Xxxxxxxx, Xxx Xxxx, which shall be wholly owned by the 163 Washington SPE) that complies with the covenants and provisions of this Agreement relating to Subsidiary Guarantors and the 163 Entities; provided, however, that a Borrowing Base Property may, with Administrative Agent’s written consent, be leased to a Subsidiary Guarantor under an Approved Ground Lease;
(ii) The representations and warranties contained in Sections 3.05(a), 3.06(b), 3.22, and 3.23 shall at all times be true and correct with respect to but any such Borrowing Base Property and Availability in excess of such limitation shall be excluded for purposes of calculating Borrowing Base Property Availability, the Tier I Borrowing Base Value and the Tier II Borrowing Base Value and the associated Net Operating Income and Adjusted Net Operating Income corresponding thereto shall be in compliance with the covenants set forth in Section 9.01(csimilarly excluded);
(iiiix) Such Borrowing Base Property no Person other than the Borrower, the REIT or another Subsidiary Guarantor (and excluding for the purposes hereof ownership of other Persons in the Borrower or the REIT) has any direct or indirect ownership of any legal, equitable or beneficial interest in such Subsidiary Guarantors, and no direct or indirect ownership or other interests or rights in any such Subsidiary Guarantor shall be an income producing, multi-family, mixed-use, retail, distribution, parking or office property, provided that parking facilities shall be permitted only if operated by a third-party operator and distribution facilities shall be permitted only subject to the extent they meet the conditions set forth any Lien (other than Liens in clause (v) favor of this Section 9.01(bAgent);
(ivx) At least eighty no more than twenty percent (8020%) of the (x) units in any multi-family total Borrowing Base Property, and (y) net rentable square footage of Availability shall be attributable to any other type of Borrowing Base single Tier I Property (other than notwithstanding the foregoing, a parking facility), shall be subject to executed Leases from tenants in occupancy who are not in default beyond the expiration of all applicable notice and grace periods under their Lease and not in bankruptcy (the “Occupancy Rate”); provided, however, that if (A) on any date, the Occupancy Rate is less than eighty percent (80%), there shall be a grace period of two (2) fiscal quarters to increase such occupancy provided that (i) Borrower delivers written notice of the failure to comply with such occupancy requirement within three (3) Business Days after a Responsible Officer of Borrower obtains knowledge of such failure, and (ii) at all times during such grace period, the Occupancy Rate does not fall below seventy percent (70%) at any time and (B) on any date, the Occupancy Rate is less than seventy percent (70%), there shall be a grace period of two (2) fiscal quarters (which shall be concurrent with and not in addition to the two (2) fiscal quarter grace period referred to in clause (A), above) to increase such occupancy provided that (i) Borrower delivers written notice of the failure to comply with such occupancy requirement within three (3) Business Days after a Responsible Officer of Borrower obtains knowledge of such failure, (ii) at all times during such grace period, the Occupancy Rate does not fall below fifty percent (50%) at any time, and (iii) during the pendency of such grace period, the percentage applicable in calculating the Value-Based Borrowing Base Limit for the applicable Borrowing Base Property shall be reduced by fifty percent (50%); thereafter, and in the event any Borrowing Base Property has an Occupancy Rate below fifty percent (50%) at any time, such Borrowing Base Property shall be removed from the Borrowing Base pursuant to Section 9.03;
(v) If such Borrowing Base Property is a distribution facility, it shall be an Investment Grade Borrowing Base Property having at least eight (8) years remaining on the term of the Lease to the applicable Investment Grade Tenant at the time such facility is added to the Borrowing Base (excluding any extension options) and where the applicable Investment Grade Tenant shall be in occupancy, not in default beyond the expiration of all applicable notice and grace periods under its Lease and not in bankruptcy;
(vi) If such Borrowing Base Property is a Single Tenant Asset, then the remaining Lease term related thereto shall be no less than six (6) years (excluding any extension options);
(vii) An Appraisal shall be required for each Borrowing Base Property during the term of this Agreement as follows: (A) within six (6) months prior to the Effective Date (with respect to each initial Borrowing Base Property that is added to the Borrowing Base upon the Effective Date, and (B) within six (6) months prior to the date that any Borrowing Base Property is added to the Borrowing Base in accordance with the Loan Documents (which respect to Borrowing Base Properties added after the Effective Date), and that in each case that is acceptable to Administrative Agent in its reasonable discretion, subject to the provisions of Sections 9.01(b)(viii) and (ix);
(viii) Notwithstanding anything to the contrary in clause (vii) above, in Administrative Agent’s sole discretion, a new Appraisal may be required, at Borrower’s expense, for each Borrowing Base Property commencing (i) twenty four (24) months after the Effective Date (with respect to each initial Borrowing Base Property that is added to the Borrowing Base upon the Effective Date), (ii) twenty four (24) months after the date that any Borrowing Base Property is thereafter added to the Borrowing Base (with respect to any such subsequently-added Borrowing Base Property), and (iii) twenty four (24) months after the date of any Appraisal obtained pursuant to this Section 9.01(viii). Borrower may, at its election and expense, also request a new Appraisal at any of such times. For purposes of this Section 9.01(b)(viii), an Appraisal that has a date of value that is no earlier than six (6) months prior to the end of any applicable 24-month period described in this Section 9.01(b)(viii) shall, if it is approved by Administrative Agent and complies with satisfy the requirements of this Agreement, be deemed to satisfy the requirements herein for a new Appraisal to be obtained commencing on each such 24-month period.
(ix) If the Net Operating Income for any Borrowing Base Property shall decrease (A) by more than five percent (5%) from one fiscal quarter to the next and the Net Operating Income of such Borrowing Base Property for the next succeeding fiscal quarter does not make up for such decline in Net Operating Income or (B) ten percent (10%) or more from the Net Operating Income of such Borrowing Base Property for the previous calendar year, then a new Appraisal for such Borrowing Base Property shall be required to be obtained at Borrower’s cost.
clause (x) For purposes of determining the Appraised Value of shall not result in any Borrowing Base Property hereunder, the most recent Appraisal thereof obtained by in accordance with the terms hereof shall govern the determination of the Appraised Value thereof; provided, however that if a new Appraisal is not required to be obtained for such Borrowing Base Property pursuant to Section 9.01(b)(viii) or (ix), until such time as the new Appraisal shall have been obtained in accordance with this Agreement, then the Borrowing Base Asset Value of such Borrowing Base Property shall equal the lesser of the Acquisition Cost of such Borrowing Base Property or the Estimated Value thereof.
(xi) Borrower may elect, pursuant to the definition of “Borrowing Base Asset Value,” to require the determination of the component of the definition of Borrowing Base Asset Value referenced in clause (b) of the definition thereof to be based upon the Estimated Values of the Borrowing Base Properties or the Appraised Values of the Borrowing Base Properties only once per fiscal quarter, in connection with the delivery by Borrower to Administrative Agent of the Borrowing Base Certificate that is due to be delivered during such fiscal quarter, and such election shall be made on an “all or none” basis such that, if Borrower elects to require such determination to be based on Appraised Values, such election must be made as to all Borrowing Base Properties, and if Borrower elects to require such determination to be based on Estimated Values, such election must be made as to all Borrowing Base Properties (provided, however, that in the event that Borrower obtains an updated Appraisal pursuant to Section 9.01(b)(viii) Borrower shall be permitted to required that such determination be made on the basis of such updated Appraised Value); provided, further, that if the Appraised Value of one or more Borrowing Base Properties cannot be calculated solely because Appraisals have been ordered but have not yet been delivered for such Borrowing Base Property, as required hereby, the Borrowing Base Appraised Value may nonetheless be determined according to the Estimated Value of each such affected Borrowing Base Property and the Appraised Value of all other Borrowing Base Properties until such time as an Appraisal for such affected Borrowing Base Property has been obtained as provided herein.
(xii) The survey for such Borrowing Base Property delivered to the Administrative Agent in connection with this Agreement shall be prepared in accordance with the 2011 Minimum Standard Detail Requirements for ALTA/ASM Land Title Surveys. Except for those matters reflected on such survey or in the title policy for such Borrowing Base Property delivered to the Administrative Agent in connection with this Agreement or as otherwise disclosed to the Administrative Agent, as of the date such Real Property is accepted Estate not being included as a Borrowing Base Property, there shall not be but any construction or commencement of construction on such Borrowing Base Property Availability in excess of any new external structures, or additions or extensions thereto, or other external improvements, whether to existing structures or not. Except as may such limitation shall be disclosed on the surveys delivered pursuant to this Agreement and in the title policy excluded for such purposes of calculating Borrowing Base Property: Availability, the Tier I Borrowing Base Value and the Tier II Borrowing Base Value and the associated Net Operating Income and Adjusted Net Operating Income corresponding thereto shall be similarly excluded);
(ixi) none no more than fifteen percent (15%) of the material improvements comprising part of such total Borrowing Base Property Availability shall be outside attributable to Tier I Properties which are subject to Ground Leases (notwithstanding the boundaries foregoing, a failure to satisfy the requirements of such Borrowing Base Property this clause (or building restriction or setback lines applicable thereto); (iixi) no material improvements on adjoining properties shall encroach upon such Borrowing Base Property; and (iii) no material improvements comprising part of such Borrowing Base Property shall encroach upon or violate any easements or any other encumbrance upon such Borrowing Base Property, in each case other than minor encumbrances which could not reasonably be expected to have a (x) material adverse effect with respect to the financial condition or the operations of such Borrowing Base Property, (y) material adverse effect on the Borrowing Base Asset Value of such Borrowing Base Property, or (z) material adverse effect on the ownership of such Borrowing Base Property.
(xiii) All transfer taxes, deed stamps, intangible taxes or other amounts in the nature of transfer taxes required to be paid by any Credit Party under applicable legal requirements currently in effect in connection with the transfer of such Borrowing Base Property to the Borrower, any transfer of a controlling interest in the Borrower or the formation of the REIT, as applicable, shall have been paid or will be paid prior to delinquency. All mortgage, mortgage recording, stamp, intangible or other similar tax required to be paid by any Credit Party under applicable legal requirements currently in effect in connection with the execution, delivery, recordation, filing, registration, perfection or enforcement of any of the Loan Documents, including, without limitation, the Mortgage, shall have been paid prior to delinquency.
(xiv) The Borrower shall have delivered to Administrative Agent copies of all Leases and all unrecorded easement agreements, reciprocal easement agreements, management agreements and material agreements in Borrower’s possession or custody which affect result in any material respect the Borrower’s interest in such Borrowing Base Property.
(xv) Borrower shall have received no notice of any condemnation proceeding involving such Borrowing Base Property or any portion thereof or parking facility used in connection therewith, nor shall any portion of such Borrowing Base Property or any parking facility used in connection therewith be damaged due to fire or other casualty, except those proceedings or casualties that could Real Estate not reasonably be expected to materially interfere with the current use and value of such Borrowing Base Property or to cause such property to otherwise no longer qualify as a Borrowing Base Property.
(xvi) Such Borrowing Base Property shall have adequate rights of access to public ways and is currently served by adequate electric, gas, water, sewer, sanitary sewer and storm drain facilities. All public utilities necessary to the use and enjoyment of such Borrowing Base Property as intended to be used and enjoyed shall be located in the public right-of-way abutting such Borrowing Base Property or in private easements or license areas benefitting such Borrowing Base Property.
(xvii) No Credit Party shall have suffered, permitted or initiated the joint assessment of such Borrowing Base Property with any other real property constituting a tax lot separate and apart from the tax lot comprising such Borrowing Base Property.
(xviii) As of the date of its inclusion being included as a Borrowing Base Property, but any such Borrowing Base Availability in excess of such limitation shall be excluded for purposes of calculating Borrowing Base Availability, the Tier I Borrowing Base Value and the Tier II Borrowing Base Value and the associated Operating Income and Adjusted Net Operating Income corresponding thereto shall be similarly excluded);
(xii) no more than twenty percent (20%) of the total Borrowing Base Availability shall be attributable to Tier I Properties located within the same Submarket (notwithstanding the foregoing, a failure to satisfy the requirements of this clause (xii) shall not result in any such Real Estate not being included as a Borrowing Base Property, including all buildings, improvements, parking facilities, sidewalks, storm drainage systems, roofs, plumbing systems, HVAC systems, fire protection systems, electrical systems, equipment, elevators, exterior sidings and doors, landscaping, irrigation systems and all structural components, but any such Borrowing Base Availability in excess of such limitation shall be excluded for purposes of calculating Borrowing Base Availability, the Tier I Borrowing Base Value and the Tier II Borrowing Base Value and the associated Net Operating Income and Adjusted Net Operating Income corresponding thereto shall be similarly excluded); and
(xiii) such Eligible Real Estate has not been removed from the calculation of the Borrowing Base Availability pursuant to §5.4 or §7.20(c) or (d). Notwithstanding the foregoing, the provisions of §7.20(a)(x), (xi) and (xii) and §9.7 shall not be applicable until the date that is fifteen (15) months following the occurrence of the Qualified Capital Raise and then shall be applicable at all times thereafter.
(b) The Borrower shall, and shall cause each Subsidiary Guarantor to:
(i) operate each Borrowing Base Property in good condition, order and repair compliance with Applicable Law in all material respects;
(ii) promptly perform and/or observe (or cause to be performed and/or observed) in all material respects subject the covenants and agreements required to reasonable be performed and customary wear observed by it under the Material Contracts to which it is a party and tear; do all things necessary to preserve and there shall exist no structural to keep unimpaired their rights thereunder;
(iii) enforce in all respects the performance and observance of all of the material covenants and agreements required to be performed or observed by the other parties to each Material Contract;
(iv) promptly deliver to the Agent a copy of each PIP, and any other material defects or damages in such Borrowing Base Property, whether latent or otherwise, and no Credit Party shall have received written notice from or report received by it or to it under any insurance company Management Agreement or bonding company of any defects or inadequacies in such Borrowing Base Property, or any part thereof, which would, in either case, adversely affect the insurability of the same or cause the imposition of extraordinary premiums or charges thereon or of any termination or threatened termination of any policy of insurance or bond.Franchise Agreement;
(xixv) The Borrower shall have delivered to maintain Inventory at the Administrative Agent a true and correct copy of the Management Agreement that is in effect with respect to such Borrowing Base Property. The Management Agreement with respect to such applicable Borrowing Base Property delivered in amounts reasonably required to meet the Administrative Agent shall be standards from time to time required by the only Management Agreement related applicable Manager and Franchisor; and
(vi) maintain all Licenses required to such operate the applicable Borrowing Base Property, and shall be Property in full force and effect and promptly comply with no default or event of default, in either case beyond all applicable notice and grace periods, existing thereunder.
(xx) To the knowledge of Borrower, no portion of such Borrowing Base Property shall have been purchased with proceeds of any illegal activity and no part of the proceeds of any Credit Extension will be used in connection with any illegal activitymaterial conditions thereof.
(c) The REIT and Borrower hereby covenant and agrees with respect to In the event that all or any material portion of any Eligible Real Estate included in the calculation of the Borrowing Base Property Availability shall be damaged in any material respect or taken by condemnation, then such property shall no longer be included in the calculation of the Borrowing Base Availability unless and until (i) any damage to comply with Sections 5.05such real estate is repaired or restored, 5.12, 5.18, 5.19, 5.21, 6.02, 6.11, such real estate becomes fully operational and 6.18, the Agent shall receive evidence satisfactory to the Agent of the value of such real estate following such repair or restoration (both at such time and prospectively) or (ii) the Agent shall receive evidence satisfactory to the Agent (which evidence may include the availability of business interruption insurance) that the value of such real estate (both at such time and prospectively) shall not be materially adversely affected by such damage or condemnation. In the event that such damage or condemnation only partially affects such Eligible Real Estate included in the calculation of the Borrowing Base Availability, then the Agent may in good faith reduce the Borrowing Base Availability attributable thereto based on such damage until such time as follows:the Agent receives evidence satisfactory to the Agent that the value of such real estate (both at such time and prospectively) shall no longer be materially adversely affected by such damage or condemnation.
(d) Upon any asset ceasing to qualify to be included in the calculation of the Borrowing Base Availability, such asset shall no longer be included in the calculation of the Borrowing Base Availability unless otherwise approved in writing by the Required Lenders. Within five (5) Business Days of any such disqualification, the Borrower shall deliver to the Agent a certificate reflecting such disqualification, together with the identity of the disqualified asset, a statement as to whether any Default or Event of Default arises as a result of such disqualification, and a calculation of the Borrowing Base Availability attributable to such asset. Simultaneously with the delivery of the items required pursuant above, the Borrower shall deliver to the Agent an updated Borrowing Base Certificate demonstrating, after giving effect to such removal or disqualification, compliance with the conditions and covenants contained in §§7.20, 9.1 and 9.
Appears in 1 contract
Borrowing Base Properties. (a) 11.1.1 At all times, the REIT and Borrower shall maintain the Borrowing Base Properties in accordance with this Article IX 11 and the other terms and conditions of the Loan Documents.
(b) 11.1.2 In addition to the other requirements that are set forth in the definition of “Borrowing Base Property,” in order for a Real Property to qualify as a Borrowing Base Property, it shall comply with the following conditions at all times:
(ia) Such Borrowing Base Property shall be wholly owned by a Subsidiary Guarantor (other than the Borrowing Base Property known as 000 Xxxxxxxxxx Xxxxxx, Xxxxxxxx, Xxx Xxxx, which shall be wholly owned by the 163 Washington SPE) Borrower that complies with the covenants and provisions of this Agreement relating to Subsidiary Guarantors and the 163 EntitiesBorrowers; provided, however, that a Borrowing Base Property may, with Administrative Agent’s written consent, be leased to a Subsidiary Guarantor Borrower under an Approved Ground Lease;
(iib) The representations and warranties contained in Sections 3.05(a), 3.06(b), 3.22, and 3.23 Article 3 with respect to Borrowing Base Properties shall at all times be true and correct with respect to such Borrowing Base Property and such Borrowing Base Property shall be in compliance with the covenants set forth in Section 9.01(c)11.1;
(iiic) Such Borrowing Base Property shall be an income producing, multi-family, mixed-use, retail, distribution, parking parking, flex, industrial or office property, provided that parking facilities shall be permitted only if operated by a third-party operator and distribution facilities shall be permitted only to the extent they meet the conditions set forth in clause (ve) of this Section 9.01(b)11.1.2;
(ivd) At least eighty percent (80%) of the (x) units in any multi-family Borrowing Base Property, and (y) net rentable square footage of any other type of Borrowing Base Property (other than a parking facility), shall be subject to executed Leases from tenants in occupancy who are not in default beyond the expiration of all applicable notice and grace periods under their Lease and not in bankruptcy (the “Occupancy Rate”); provided, however, that if (A) on any date, the Occupancy Rate is less than eighty percent (80%), there shall be a grace period of two (2) fiscal quarters to increase such occupancy provided that (i) Borrower delivers written notice of the failure to comply with such occupancy requirement within three (3) Business Days after a Responsible Officer of Borrower obtains knowledge of such failure, and (ii) at all times during such grace period, the Occupancy Rate does not fall below seventy percent (70%) at any time and (B) on any date, the Occupancy Rate is less than seventy percent (70%), there shall be a grace period of two (2) fiscal quarters (which shall be concurrent with and not in addition to the two (2) fiscal quarter grace period referred to in clause (A), above) to increase such occupancy provided that (i) Borrower delivers written notice of the failure to comply with such occupancy requirement within three (3) Business Days after a Responsible Officer of Borrower obtains knowledge of such failure, (ii) at all times during such grace period, the Occupancy Rate does not fall below fifty percent (50%) at any time, and (iii) during the pendency of such grace period, the percentage applicable in calculating the Value-Based Borrowing Base Limit for the applicable Borrowing Base Property shall be reduced by fifty percent (50%); thereafter, and in the event any Borrowing Base Property has an Occupancy Rate below fifty percent (50%) at any time, such Borrowing Base Property shall be removed from the Borrowing Base pursuant to Section 9.0311.3.2;
(ve) If such Borrowing Base Property is a distribution facility, it shall be an Investment Grade Borrowing Base Property having at least eight (8) years remaining on the term of the Lease to the applicable Investment Grade Tenant at the time such facility is added to the Borrowing Base (excluding any extension options) and where the applicable Investment Grade Tenant shall be in occupancy, not in default beyond the expiration of all applicable notice and grace periods under its Lease and not in bankruptcy;
(vif) If such Borrowing Base Property is a Single Tenant Asset, then the remaining Lease term related thereto shall be no less than six (6) years (excluding any extension options);
(viig) An Appraisal shall be required for each Borrowing Base Property during the term of this Agreement as follows: (A) within six (6) months prior to the Effective Date (with respect to each initial Borrowing Base Property that is added to the Borrowing Base upon the Effective Date, and (B) within six (6) months prior to the date that any Borrowing Base Property is added to the Borrowing Base in accordance with the Loan Documents (which respect to Borrowing Base Properties added after the Effective Date), and that in each case that is acceptable to Administrative Agent in its reasonable discretion, subject to the provisions of Sections 9.01(b)(viii) and (ix11.1.2(h);
(viii) Notwithstanding anything to the contrary in clause (vii) above, in Administrative Agent’s sole discretion, a new Appraisal may be required, at Borrower’s expense, for each Borrowing Base Property commencing (i) twenty four (24) months after the Effective Date (with respect to each initial Borrowing Base Property that is added to the Borrowing Base upon the Effective Date), (ii) twenty four (24) months after the date that any Borrowing Base Property is thereafter added to the Borrowing Base (with respect to any such subsequently-added Borrowing Base Property), and (iii) twenty four (24) months after the date of any Appraisal obtained pursuant to this Section 9.01(viii). Borrower may, at its election and expense, also request a new Appraisal at any of such times. For purposes of this Section 9.01(b)(viii), an Appraisal that has a date of value that is no earlier than six (6) months prior to the end of any applicable 24-month period described in this Section 9.01(b)(viii) shall, if it is approved by Administrative Agent and complies with the requirements of this Agreement, be deemed to satisfy the requirements herein for a new Appraisal to be obtained commencing on each such 24-month period.
(ix) If the Net Operating Income for any Borrowing Base Property shall decrease (A) by more than five percent (5%) from one fiscal quarter to the next and the Net Operating Income of such Borrowing Base Property for the next succeeding fiscal quarter does not make up for such decline in Net Operating Income or (B) ten percent (10%) or more from the Net Operating Income of such Borrowing Base Property for the previous calendar year, then a new Appraisal for such Borrowing Base Property shall be required to be obtained at Borrower’s cost.
(xh) For purposes of determining the Appraised Value of any Borrowing Base Property hereunder, the most recent Appraisal thereof obtained by in accordance with the terms hereof shall govern the determination of the Appraised Value thereof; provided, however that if a new Appraisal is not required to be obtained for such Borrowing Base Property pursuant to Section 9.01(b)(viii) or (ix), 11.1.2 until such time as the new Appraisal shall have been obtained in accordance with this Agreement, then the Borrowing Base Asset Value of such Borrowing Base Property shall equal the lesser of the Acquisition Cost of such Borrowing Base Property or the Estimated Value thereof.
(xi) Borrower may elect, pursuant to the definition of “Borrowing Base Asset Value,” to require the determination of the component of the definition of Borrowing Base Asset Value referenced in clause (b) of the definition thereof to be based upon the Estimated Values of the Borrowing Base Properties or the Appraised Values of the Borrowing Base Properties only once per fiscal quarter, in connection with the delivery by Borrower to Administrative Agent of the Borrowing Base Certificate that is due to be delivered during such fiscal quarter, and such election shall be made on an “all or none” basis such that, if Borrower elects to require such determination to be based on Appraised Values, such election must be made as to all Borrowing Base Properties, and if Borrower elects to require such determination to be based on Estimated Values, such election must be made as to all Borrowing Base Properties (provided, however, that in the event that Borrower obtains an updated Appraisal pursuant to Section 9.01(b)(viii) Borrower shall be permitted to required that such determination be made on the basis of such updated Appraised Value); provided, further, that if the Appraised Value of one or more Borrowing Base Properties cannot be calculated solely because Appraisals have been ordered but have not yet been delivered for such Borrowing Base Property, as required hereby, the Borrowing Base Appraised Value may nonetheless be determined according to the Estimated Value of each such affected Borrowing Base Property and the Appraised Value of all other Borrowing Base Properties until such time as an Appraisal for such affected Borrowing Base Property has been obtained as provided herein.
(xiii) The survey for such Borrowing Base Property delivered to the Administrative Agent in connection with this Agreement shall be prepared in accordance with the 2011 Minimum Standard Detail Requirements for ALTA/ASM Land Title Surveys. Except for those matters reflected on such survey or in the title policy for such Borrowing Base Property delivered to the Administrative Agent in connection with this Agreement or as otherwise disclosed to the Administrative Agent, as of the date such Real Property is accepted as a Borrowing Base Property, there shall not be any construction or commencement of construction on such Borrowing Base Property of any new external structures, or additions or extensions thereto, or other external improvements, whether to existing structures or not. Except as may be disclosed on the surveys delivered pursuant to this Agreement and in the title policy for such Borrowing Base Property: (i) none of the material improvements comprising part of such Borrowing Base Property shall be outside the boundaries of such Borrowing Base Property (or building restriction or setback lines applicable thereto); (ii) no material improvements on adjoining properties shall encroach upon such Borrowing Base Property; and (iii) no material improvements comprising part of such Borrowing Base Property shall encroach upon or violate any easements or any other encumbrance upon such Borrowing Base Property, in each case other than minor encumbrances which could not reasonably be expected to have a (x) material adverse effect with respect to the financial condition or the operations of such Borrowing Base Property, (y) material adverse effect on the Borrowing Base Asset Value of such Borrowing Base Property, or (z) material adverse effect on the ownership of such Borrowing Base Property.
(xiiij) All transfer taxes, deed stamps, intangible taxes or other amounts in the nature of transfer taxes required to be paid by any Credit Party under applicable legal requirements currently in effect in connection with the transfer of such Borrowing Base Property to the Borrower, any transfer of a controlling interest in the Borrower or the formation of the REIT, as applicable, shall have been paid or will be paid prior to delinquency. All mortgage, mortgage recording, stamp, intangible or other similar tax required to be paid by any Credit Party under applicable legal requirements currently in effect in connection with the execution, delivery, recordation, filing, registration, perfection or enforcement of any of the Loan Documents, including, without limitation, the Mortgage, shall have been paid prior to delinquency.
(xivk) The Borrower shall have delivered to Administrative Agent copies of all Leases and all unrecorded easement agreements, reciprocal easement agreements, management agreements and material agreements in Borrower’s possession or custody which affect in any material respect the Borrower’s interest in such Borrowing Base Property.
(xvl) Borrower shall have received no notice of any condemnation proceeding involving such Borrowing Base Property or any portion thereof or parking facility used in connection therewith, nor shall any portion of such Borrowing Base Property or any parking facility used in connection therewith be damaged due to fire or other casualty, except those proceedings or casualties that could not reasonably be expected to materially interfere with the current use and value of such Borrowing Base Property or to cause such property to otherwise no longer qualify as a Borrowing Base Property.
(xvim) Such Borrowing Base Property shall have adequate rights of access to public ways and is currently served by adequate electric, gas, water, sewer, sanitary sewer and storm drain facilities. All public utilities necessary to the use and enjoyment of such Borrowing Base Property as intended to be used and enjoyed shall be located in the public right-of-way abutting such Borrowing Base Property or in private easements or license areas benefitting such Borrowing Base Property.
(xviin) No Credit Party shall have suffered, permitted or initiated the joint assessment of such Borrowing Base Property with any other real property constituting a tax lot separate and apart from the tax lot comprising such Borrowing Base Property.
(xviiio) As of the date of its inclusion as a Borrowing Base Property, such Borrowing Base Property, including all buildings, improvements, parking facilities, sidewalks, storm drainage systems, roofs, plumbing systems, HVAC systems, fire protection systems, electrical systems, equipment, elevators, exterior sidings and doors, landscaping, irrigation systems and all structural components, shall be in good condition, order and repair in all material respects subject to reasonable and customary wear and tear; and there shall exist no structural or other material defects or damages in such Borrowing Base Property, whether latent or otherwise, and no Credit Party shall have received written notice from any insurance company or bonding company of any defects or inadequacies in such Borrowing Base Property, or any part thereof, which would, in either case, adversely affect the insurability of the same or cause the imposition of extraordinary premiums or charges thereon or of any termination or threatened termination of any policy of insurance or bond.
(xixp) The Borrower shall have delivered to the Administrative Agent a true and correct copy of the Management Agreement that is in effect with respect to such Borrowing Base Property. The Management Agreement with respect to such Borrowing Base Property delivered to the Administrative Agent shall be the only Management Agreement related to such Borrowing Base Property, and shall be in full force and effect with no default or event of default, in either case beyond all applicable notice and grace periods, existing thereunder.
(xxq) To the knowledge of Borrower, no portion of such Borrowing Base Property shall have been purchased with proceeds of any illegal activity and no part of the proceeds of any Credit Extension will be used in connection with any illegal activity.
(cr) The REIT Borrowing Base Property must be located in New York, Connecticut, New Jersey, Massachusetts, Rhode Island, Delaware, Maryland, Virginia, Pennsylvania, Vermont, New Hampshire and Maine.
11.1.3 The Borrower hereby covenant covenants and agrees with respect to any Borrowing Base Property (i) to comply with Sections 5.05, 5.12, 5.18, 5.19, 5.21, 6.02, 6.11, and 6.18, and (ii) as follows:
Appears in 1 contract
Samples: Loan Agreement (GTJ REIT, Inc.)
Borrowing Base Properties. (a) At all times, the REIT and Borrower shall maintain the Borrowing Base Properties in accordance with this Article IX and the other terms and conditions of the Loan Documents.
(b) In addition to the other requirements that are set forth in the definition of “Borrowing Base Property,” in order for a Real Property to qualify as a Borrowing Base Property, it shall comply with the following conditions at all times:
(i) Such Borrowing Base Property shall be wholly owned by a Subsidiary Guarantor (other than the Borrowing Base Property known as 000 100 Xxxxxxxxxx Xxxxxx, Xxxxxxxx, Xxx Xxxx, which shall be wholly owned by the 163 Washington SPE) that complies with the covenants and provisions of this Agreement relating to Subsidiary Guarantors and the 163 Entities; provided, however, that a Borrowing Base Property may, with Administrative Agent’s written consent, be leased to a Subsidiary Guarantor under an Approved Ground Lease;
(ii) The representations and warranties contained in Sections 3.05(a), 3.06(b), 3.22, and 3.23 shall at all times be true and correct with respect to such Borrowing Base Property and such Borrowing Base Property shall be in compliance with the covenants set forth in Section 9.01(c);
(iii) Such Borrowing Base Property shall be an income producing, multi-family, mixed-use, retail, distribution, parking or office property, provided that parking facilities shall be permitted only if operated by a third-party operator and distribution facilities shall be permitted only to the extent they meet the conditions set forth in clause (v) of this Section 9.01(b);
(iv) At least eighty percent (80%) of the (x) units in any multi-family Borrowing Base Property, and (y) net rentable square footage of any other type of Borrowing Base Property (other than a parking facility), shall be subject to executed Leases from tenants in occupancy who are not in default beyond the expiration of all applicable notice and grace periods under their Lease and not in bankruptcy (the “Occupancy Rate”); provided, however, that if (A) on any date, the Occupancy Rate is less than eighty percent (80%), there shall be a grace period of two (2) fiscal quarters to increase such occupancy provided that (i) Borrower delivers written notice of the failure to comply with such occupancy requirement within three (3) Business Days after a Responsible Officer of Borrower obtains knowledge of such failure, and (ii) at all times during such grace period, the Occupancy Rate does not fall below seventy percent (70%) at any time and (B) on any date, the Occupancy Rate is less than seventy percent (70%), there shall be a grace period of two (2) fiscal quarters (which shall be concurrent with and not in addition to the two (2) fiscal quarter grace period referred to in clause (A), above) to increase such occupancy provided that (i) Borrower delivers written notice of the failure to comply with such occupancy requirement within three (3) Business Days after a Responsible Officer of Borrower obtains knowledge of such failure, (ii) at all times during such grace period, the Occupancy Rate does not fall below fifty percent (50%) at any time, and (iii) during the pendency of such grace period, the percentage applicable in calculating the Value-Based Borrowing Base Limit for the applicable Borrowing Base Property shall be reduced by fifty percent (50%); thereafter, and in the event any Borrowing Base Property has an Occupancy Rate below fifty percent (50%) at any time, such Borrowing Base Property shall be removed from the Borrowing Base pursuant to Section 9.03;
(v) If such Borrowing Base Property is a distribution facility, it shall be an Investment Grade Borrowing Base Property having at least eight (8) years remaining on the term of the Lease to the applicable Investment Grade Tenant tenant at the time such facility is added to the Borrowing Base (excluding any extension options) and where the applicable Investment Grade Tenant tenant shall be in occupancy, not in default beyond the expiration of all applicable notice and grace periods under its Lease and not in bankruptcy;
(vi) If such Borrowing Base Property is a Single Tenant Asset, then the remaining Lease term related thereto shall be no less than six (6) years (excluding any extension options);
(vii) An Appraisal shall be required for each Borrowing Base Property during the term of this Agreement as follows: (A) within six (6) months prior to the Effective Date (with respect to each initial Borrowing Base Property that is added to the Borrowing Base upon the Effective Date, and (B) within six (6) months prior to the date that any Borrowing Base Property is added to the Borrowing Base in accordance with the Loan Documents (which respect to Borrowing Base Properties added after the Effective Original Closing Date), and that in each case that is acceptable to Administrative Agent in its reasonable discretion, subject to the provisions of Sections 9.01(b)(viii) and (ix);
(viii) Notwithstanding anything to the contrary in clause (vii) above, in Administrative Agent’s sole discretion, a new Appraisal may be required, at Borrower’s expense, for each Borrowing Base Property commencing (i) twenty four (24) months after the Effective Date August 20, 2015 (with respect to each initial Borrowing Base Property that is added to the Borrowing Base upon the Effective Original Closing Date), (ii) twenty four (24) months after the date that any Borrowing Base Property is thereafter added to the Borrowing Base (with respect to any such subsequently-added Borrowing Base Property), and (iii) twenty four (24) months after the date of any Appraisal obtained pursuant to this Section 9.01(viii). Borrower may, at its election and expense, also request a new Appraisal at any of such times. For purposes of this Section 9.01(b)(viii), an Appraisal that has a date of value that is no earlier than six (6) months prior to the end of any applicable 24-month period described in this Section 9.01(b)(viii) shall, if it is approved by Administrative Agent and complies with the requirements of this Agreement, be deemed to satisfy the requirements herein for a new Appraisal to be obtained commencing on each such 24-month period.
(ix) If the Net Operating Income for any Borrowing Base Property shall decrease (A) by more than five percent (5%) from one fiscal quarter to the next and the Net Operating Income of such Borrowing Base Property for the next succeeding fiscal quarter does not make up for such decline in Net Operating Income or (B) ten percent (10%) or more from the Net Operating Income of such Borrowing Base Property for the previous calendar year, then a new Appraisal for such Borrowing Base Property shall be required to be obtained at Borrower’s cost.
(x) For purposes of determining the Appraised Value of any Borrowing Base Property hereunder, the most recent Appraisal thereof obtained by in accordance with the terms hereof shall govern the determination of the Appraised Value thereof; provided, however that if a new Appraisal is not required to be obtained for such Borrowing Base Property pursuant to Section 9.01(b)(viii) or (ix), until such time as the new Appraisal shall have been obtained in accordance with this Agreement, then the Borrowing Base Asset Value of such Borrowing Base Property shall equal the lesser of the Acquisition Cost of such Borrowing Base Property or the Estimated Value thereof.
(xi) Borrower may elect, pursuant to the definition of “Borrowing Base Asset Value,” to require the determination of the component of the definition of Borrowing Base Asset Value referenced in clause (b) of the definition thereof to be based upon the Estimated Values of the Borrowing Base Properties or the Appraised Values of the Borrowing Base Properties only once per fiscal quarter, in connection with the delivery by Borrower to Administrative Agent of the Borrowing Base Certificate that is due to be delivered during such fiscal quarter, and such election shall be made on an “all or none” basis such that, if Borrower elects to require such determination to be based on Appraised Values, such election must be made as to all Borrowing Base Properties, and if Borrower elects to require such determination to be based on Estimated Values, such election must be made as to all Borrowing Base Properties (provided, however, that in the event that Borrower obtains an updated Appraisal pursuant to Section 9.01(b)(viii) Borrower shall be permitted to required that such determination be made on the basis of such updated Appraised Value); provided, further, that if the Appraised Value of one or more Borrowing Base Properties cannot be calculated solely because Appraisals have been ordered but have not yet been delivered for such Borrowing Base Property, as required hereby, the Borrowing Base Appraised Value may nonetheless be determined according to the Estimated Value of each such affected Borrowing Base Property and the Appraised Value of all other Borrowing Base Properties until such time as an Appraisal for such affected Borrowing Base Property has been obtained as provided herein.
(xii) The survey for such Borrowing Base Property delivered to the Administrative Agent in connection with this Agreement shall be prepared in accordance with the 2011 Minimum Standard Detail Requirements for ALTA/ASM Land Title Surveys. Except for those matters reflected on such survey or in the title policy for such Borrowing Base Property delivered to the Administrative Agent in connection with this Agreement or as otherwise disclosed to the Administrative Agent, as of the date such Real Property is accepted as a Borrowing Base Property, there shall not be any construction or commencement of construction on such Borrowing Base Property of any new external structures, or additions or extensions thereto, or other external improvements, whether to existing structures or not. Except as may be disclosed on the surveys delivered pursuant to this Agreement and in the title policy for such Borrowing Base Property: (i) none of the material improvements comprising part of such Borrowing Base Property shall be outside the boundaries of such Borrowing Base Property (or building restriction or setback lines applicable thereto); (ii) no material improvements on adjoining properties shall encroach upon such Borrowing Base Property; and (iii) no material improvements comprising part of such Borrowing Base Property shall encroach upon or violate any easements or any other encumbrance upon such Borrowing Base Property, in each case other than minor encumbrances which could not reasonably be expected to have a (x) material adverse effect with respect to the financial condition or the operations of such Borrowing Base Property, (y) material adverse effect on the Borrowing Base Asset Value of such Borrowing Base Property, or (z) material adverse effect on the ownership of such Borrowing Base Property.
(xiii) All transfer taxes, deed stamps, intangible taxes or other amounts in the nature of transfer taxes required to be paid by any Credit Party under applicable legal requirements currently in effect in connection with the transfer of such Borrowing Base Property to the Borrower, any transfer of a controlling interest in the Borrower or the formation of the REIT, as applicable, shall have been paid or will be paid prior to delinquency. All mortgage, mortgage recording, stamp, intangible or other similar tax required to be paid by any Credit Party under applicable legal requirements currently in effect in connection with the execution, delivery, recordation, filing, registration, perfection or enforcement of any of the Loan Documents, including, without limitation, the Mortgage, shall have been paid prior to delinquency.
(xiv) The Borrower shall have delivered to Administrative Agent copies of all Leases and all unrecorded easement agreements, reciprocal easement agreements, management agreements and material agreements in Borrower’s possession or custody which affect in any material respect the Borrower’s interest in such Borrowing Base Property.
(xv) Borrower shall have received no notice of any condemnation proceeding involving such Borrowing Base Property or any portion thereof or parking facility used in connection therewith, nor shall any portion of such Borrowing Base Property or any parking facility used in connection therewith be damaged due to fire or other casualty, except those proceedings or casualties that could not reasonably be expected to materially interfere with the current use and value of such Borrowing Base Property or to cause such property to otherwise no longer qualify as a Borrowing Base Property.
(xvi) Such Borrowing Base Property shall have adequate rights of access to public ways and is currently served by adequate electric, gas, water, sewer, sanitary sewer and storm drain facilities. All public utilities necessary to the use and enjoyment of such Borrowing Base Property as intended to be used and enjoyed shall be located in the public right-of-way abutting such Borrowing Base Property or in private easements or license areas benefitting such Borrowing Base Property.
(xvii) No Credit Party shall have suffered, permitted or initiated the joint assessment of such Borrowing Base Property with any other real property constituting a tax lot separate and apart from the tax lot comprising such Borrowing Base Property.
(xviii) As of the date of its inclusion as a Borrowing Base Property, such Borrowing Base Property, including all buildings, improvements, parking facilities, sidewalks, storm drainage systems, roofs, plumbing systems, HVAC systems, fire protection systems, electrical systems, equipment, elevators, exterior sidings and doors, landscaping, irrigation systems and all structural components, shall be in good condition, order and repair in all material respects subject to reasonable and customary wear and tear; and there shall exist no structural or other material defects or damages in such Borrowing Base Property, whether latent or otherwise, and no Credit Party shall have received written notice from any insurance company or bonding company of any defects or inadequacies in such Borrowing Base Property, or any part thereof, which would, in either case, adversely affect the insurability of the same or cause the imposition of extraordinary premiums or charges thereon or of any termination or threatened termination of any policy of insurance or bond.
(xix) The Borrower shall have delivered to the Administrative Agent a true and correct copy of the Management Agreement that is in effect with respect to such Borrowing Base Property. The Management Agreement with respect to such Borrowing Base Property delivered to the Administrative Agent shall be the only Management Agreement related to such Borrowing Base Property, and shall be in full force and effect with no default or event of default, in either case beyond all applicable notice and grace periods, existing thereunder.
(xx) To the knowledge of Borrower, no portion of such Borrowing Base Property shall have been purchased with proceeds of any illegal activity and no part of the proceeds of any Credit Extension will be used in connection with any illegal activity.
(c) The REIT and Borrower hereby covenant and agrees with respect to any Borrowing Base Property (i) to comply with Sections 5.05, 5.12, 5.18, 5.19, 5.21, 6.02, 6.11, and 6.18, and (ii) as follows:
Appears in 1 contract
Borrowing Base Properties. (a) At all times, the REIT and Borrower shall maintain cause the Eligible Real Estate included in the calculation of the Borrowing Base Availability and inclusion as Borrowing Base Properties in accordance with this Article IX and the other terms and conditions to at all times satisfy all of the Loan Documents.
following conditions, (b) In addition to the other requirements that are set forth and if such Real Estate is not Eligible Real Estate or does not satisfy such conditions, then such Real Estate shall no longer be included in the definition calculation of “Borrowing Base Property,” Availability as provided in order for a §7.20(d)), and such Real Property to qualify Estate and any personal property solely related thereto may be released as a Borrowing Base Property, it shall comply Property in accordance with the following conditions at all times:§5.5 and §12.2):
(i) Such Borrowing Base Property the Eligible Real Estate shall be wholly owned one hundred percent (100%) in fee simple by a Subsidiary Guarantor (other than the Borrowing Base Property known as 000 Xxxxxxxxxx Xxxxxxand, Xxxxxxxxif leased, Xxx Xxxx, which shall be wholly owned by the 163 Washington SPE) that complies with the covenants and provisions of this Agreement relating to Subsidiary Guarantors and the 163 Entities; provided, however, that a Borrowing Base Property may, with Administrative Agent’s written consent, be is leased to a Subsidiary Guarantor under that is a TRS Lessee pursuant to an Approved Ground Operating Lease, free and clear of all Liens other than the Liens permitted by §8.2(ix), and such Eligible Real Estate and all assets of the TRS Lessee shall not have applicable to it any negative pledge or restriction on the sale, pledge, transfer, mortgage or assignment of such property (including any restrictions contained in any applicable organizational documents);
(ii) The representations and warranties contained in Sections 3.05(a)none of the Eligible Real Estate shall have any material environmental, 3.06(b), 3.22structural or other defects, and 3.23 not be subject to any condemnation proceeding, that in any event would give rise to a materially adverse effect as to the value, use of, operation of or ability to sell or finance such property, and such property shall be in compliance with federally mandated flood insurance requirements (including the maintenance of flood insurance if all or any portion of any Building is located within a federally designated flood hazard zone);
(iii) the only assets of such Subsidiary Guarantor (including the TRS Lessee) shall be the Eligible Real Estate included in the calculation of the Borrowing Base Availability and as a Borrowing Base Property together with related fixtures and personal property;
(iv) no strike, lockout, labor dispute, embargo, injunction or other proceeding has occurred which causes, for more than fifteen (15) consecutive days, the cessation or substantial curtailment of revenue producing activities of the Borrower or any Subsidiary Guarantor at all times be true and correct with respect to such Borrowing Base Property Property;
(v) such Eligible Real Estate is a Healthcare Facility;
(vi) such Eligible Real Estate is (1) managed by a third party manager approved by the Agent; and (2) operated under a Management Agreement reasonably satisfactory to the Agent;
(vii) such Subsidiary Guarantor or the Operator has all Primary Licenses, Permits and other Governmental Approvals necessary to own and operate such proposed Borrowing Base Property, the Primary License of such Eligible Real Estate shall not have been revoked or be the subject of any revocation proceeding, no event or circumstance shall have occurred or exist which would result in the Operator thereof no longer being entitled to participate and obtain reimbursement under Medicare or Medicaid or other Third-Party Payor Programs (to the extent they participate in such programs), and the Operator and the Borrowing Base Property shall be in compliance in all material respects with the covenants set forth in Section 9.01(c);
(iii) Such Borrowing Base Property shall be an income producing, multi-family, mixed-use, retail, distribution, parking or office property, provided that parking facilities shall be permitted only if operated by a third-party operator all applicable Healthcare Laws and distribution facilities shall be permitted only to the extent they meet the conditions set forth in clause (v) of this Section 9.01(b);
(iv) At least eighty percent (80%) accreditation and registration standards and requirements of the (x) units in any multi-family Borrowing Base Propertyapplicable State Regulator, and (y) net rentable square footage of any other type of Borrowing Base Property (other than a parking facility), shall be subject to executed Leases from tenants in occupancy who are not in default beyond the expiration of all applicable notice and grace periods under their Lease and not in bankruptcy (the “Occupancy Rate”); provided, however, that if (A) on any date, the Occupancy Rate is less than eighty percent (80%), there shall be a grace period of two (2) fiscal quarters to increase such occupancy provided that (i) Borrower delivers written notice of the failure to comply with such occupancy requirement within three (3) Business Days after a Responsible Officer of Borrower obtains knowledge of such failure, and (ii) at all times during such grace period, the Occupancy Rate does not fall below seventy percent (70%) at any time and (B) on any date, the Occupancy Rate is less than seventy percent (70%), there shall be a grace period of two (2) fiscal quarters (which shall be concurrent with and not in addition to the two (2) fiscal quarter grace period referred to in clause (A), above) to increase such occupancy provided that (i) Borrower delivers written notice of the failure to comply with such occupancy requirement within three (3) Business Days after a Responsible Officer of Borrower obtains knowledge of such failure, (ii) at all times during such grace period, the Occupancy Rate does not fall below fifty percent (50%) at any time, and (iii) during the pendency of such grace period, the percentage applicable in calculating the Value-Based Borrowing Base Limit for the applicable Borrowing Base Property shall be reduced by fifty percent (50%); thereafter, and in the event any Borrowing Base Property has an Occupancy Rate below fifty percent (50%) at any time, such Borrowing Base Property shall be removed from the Borrowing Base pursuant to Section 9.03;
(v) If such Borrowing Base Property is a distribution facility, it shall be an Investment Grade Borrowing Base Property having at least eight (8) years remaining on the term of the Lease to the applicable Investment Grade Tenant at the time such facility is added to the Borrowing Base (excluding any extension options) and where the applicable Investment Grade Tenant shall be in occupancy, not in default beyond the expiration of all applicable notice and grace periods under its Lease and not in bankruptcy;
(vi) If such Borrowing Base Property is a Single Tenant Asset, then the remaining Lease term related thereto shall be no less than six (6) years (excluding any extension options);
(vii) An Appraisal shall be required for each Borrowing Base Property during the term of this Agreement as follows: (A) within six (6) months prior to the Effective Date (with respect to each initial Borrowing Base Property that is added to the Borrowing Base upon the Effective Date, and (B) within six (6) months prior to the date that any Borrowing Base Property is added to the Borrowing Base in accordance with the Loan Documents (which respect to Borrowing Base Properties added after the Effective Date), and that in each case that is acceptable to Administrative Agent case, as are now in its reasonable discretion, subject to the provisions of Sections 9.01(b)(viii) effect and (ix);
(viii) Notwithstanding anything to the contrary in clause (vii) above, in Administrative Agent’s sole discretion, a new Appraisal which may be required, at Borrower’s expense, for each Borrowing Base Property commencing (i) twenty four (24) months after the Effective Date (with respect to each initial Borrowing Base Property that is added to the Borrowing Base imposed upon the Effective Date), (ii) twenty four (24) months after the date that any Borrowing Base Property is thereafter added to the Borrowing Base (with respect to any such subsequently-added Borrowing Base Property), and (iii) twenty four (24) months after the date of any Appraisal obtained pursuant to this Section 9.01(viii). Borrower may, at its election and expense, also request a new Appraisal at any of such times. For purposes of this Section 9.01(b)(viii), an Appraisal that has a date of value that is no earlier than six (6) months prior to the end of any applicable 24-month period described in this Section 9.01(b)(viii) shall, if it is approved by Administrative Agent and complies with the requirements of this Agreement, be deemed to satisfy the requirements herein for a new Appraisal to be obtained commencing on each such 24-month period.
(ix) If the Net Operating Income for any Borrowing Base Property shall decrease (A) by more than five percent (5%) from one fiscal quarter to the next and the Net Operating Income of such Borrowing Base Property for the next succeeding fiscal quarter does not make up for such decline in Net Operating Income or (B) ten percent (10%) or more from the Net Operating Income of such Borrowing Base Property for the previous calendar year, then a new Appraisal for such Borrowing Base Property shall be required to be obtained at Borrower’s cost.
(x) For purposes of determining the Appraised Value of any Borrowing Base Property hereunder, the most recent Appraisal thereof obtained by in accordance with the terms hereof shall govern the determination of the Appraised Value thereof; provided, however that if a new Appraisal is not required to be obtained for such Borrowing Base Property pursuant to Section 9.01(b)(viii) or (ix), until such time as the new Appraisal shall have been obtained in accordance with this Agreement, then the Borrowing Base Asset Value of such Borrowing Base Property shall equal the lesser of the Acquisition Cost of such Borrowing Base Property Operator or the Estimated Value thereof.
(xi) Borrower may electmaintenance, pursuant to the definition of “Borrowing Base Asset Value,” to require the determination of the component of the definition of Borrowing Base Asset Value referenced in clause (b) of the definition thereof to be based upon the Estimated Values use or operation of the Borrowing Base Properties or the Appraised Values provision of services to the occupants of the Borrowing Base Properties only once per fiscal quarterProperties;
(viii) no Person other than the Borrower or another Subsidiary Guarantor (and excluding for the purposes hereof ownership of other Persons in the Borrower) has any direct or indirect ownership of any legal, equitable or beneficial interest in connection with the delivery by Borrower such Subsidiary Guarantors, and no direct or indirect ownership or other interests or rights in any such Subsidiary Guarantor shall be subject to Administrative Agent any Lien (other than Liens in favor of Agent);
(ix) no more than twenty-five percent (25%) of the total Borrowing Base Certificate that is due to be delivered during such fiscal quarter, and such election Availability shall be made on an “all or none” basis such that, if Borrower elects attributable to require such determination to be based on Appraised Values, such election must be made as to all Borrowing Base Properties, and if Borrower elects to require such determination to be based on Estimated Values, such election must be made as to all Borrowing Base Properties (provided, however, that in the event that Borrower obtains an updated Appraisal pursuant to Section 9.01(b)(viii) Borrower shall be permitted to required that such determination be made on the basis of such updated Appraised Value); provided, further, that if the Appraised Value of one or more Borrowing Base Properties cannot be calculated solely because Appraisals have been ordered but have not yet been delivered for such Borrowing Base Property, as required hereby, the Borrowing Base Appraised Value may nonetheless be determined according to the Estimated Value of each such affected any single Borrowing Base Property and (notwithstanding the Appraised Value foregoing, a failure to satisfy the requirements of all other Borrowing Base Properties until such time as an Appraisal for such affected Borrowing Base Property has been obtained as provided herein.
this clause (xiiix) The survey for such Borrowing Base Property delivered to the Administrative Agent shall not result in connection with this Agreement shall be prepared in accordance with the 2011 Minimum Standard Detail Requirements for ALTA/ASM Land Title Surveys. Except for those matters reflected on such survey or in the title policy for such Borrowing Base Property delivered to the Administrative Agent in connection with this Agreement or as otherwise disclosed to the Administrative Agent, as of the date any such Real Property is accepted Estate not being included as a Borrowing Base Property, there shall not be but any construction or commencement of construction on such Borrowing Base Property Availability in excess of any new external structures, or additions or extensions thereto, or other external improvements, whether to existing structures or not. Except as may such limitation shall be disclosed on the surveys delivered pursuant to this Agreement and in the title policy excluded for such purposes of calculating Borrowing Base Property: (i) none of the material improvements comprising part of such Availability and Borrowing Base Property Value and the associated Net Operating Income and Adjusted Net Operating Income corresponding thereto shall be outside the boundaries of such Borrowing Base Property (or building restriction or setback lines applicable theretosimilarly excluded); (ii) no material improvements on adjoining properties shall encroach upon such Borrowing Base Property; and (iii) no material improvements comprising part of such Borrowing Base Property shall encroach upon or violate any easements or any other encumbrance upon such Borrowing Base Property, in each case other than minor encumbrances which could not reasonably be expected to have a ;
(x) material adverse effect with respect to no more than twenty percent (20%) of the financial condition or the operations of such total Borrowing Base Property, (y) material adverse effect on the Availability shall be attributable to Borrowing Base Asset Value Properties which are not ILFs or ALFs owned by a Subsidiary Guarantor and leased pursuant to an Operating Lease to a Subsidiary Guarantor (notwithstanding the foregoing, a failure to satisfy the requirements of such Borrowing Base Property, or this clause (zx) material adverse effect on the ownership of such Borrowing Base Property.
(xiii) All transfer taxes, deed stamps, intangible taxes or other amounts in the nature of transfer taxes required to be paid by any Credit Party under applicable legal requirements currently in effect in connection with the transfer of such Borrowing Base Property to the Borrower, any transfer of a controlling interest in the Borrower or the formation of the REIT, as applicable, shall have been paid or will be paid prior to delinquency. All mortgage, mortgage recording, stamp, intangible or other similar tax required to be paid by any Credit Party under applicable legal requirements currently in effect in connection with the execution, delivery, recordation, filing, registration, perfection or enforcement of any of the Loan Documents, including, without limitation, the Mortgage, shall have been paid prior to delinquency.
(xiv) The Borrower shall have delivered to Administrative Agent copies of all Leases and all unrecorded easement agreements, reciprocal easement agreements, management agreements and material agreements in Borrower’s possession or custody which affect not result in any material respect the Borrower’s interest in such Borrowing Base Property.
(xv) Borrower shall have received no notice of any condemnation proceeding involving such Borrowing Base Property or any portion thereof or parking facility used in connection therewith, nor shall any portion of such Borrowing Base Property or any parking facility used in connection therewith be damaged due to fire or other casualty, except those proceedings or casualties that could Real Estate not reasonably be expected to materially interfere with the current use and value of such Borrowing Base Property or to cause such property to otherwise no longer qualify as a Borrowing Base Property.
(xvi) Such Borrowing Base Property shall have adequate rights of access to public ways and is currently served by adequate electric, gas, water, sewer, sanitary sewer and storm drain facilities. All public utilities necessary to the use and enjoyment of such Borrowing Base Property as intended to be used and enjoyed shall be located in the public right-of-way abutting such Borrowing Base Property or in private easements or license areas benefitting such Borrowing Base Property.
(xvii) No Credit Party shall have suffered, permitted or initiated the joint assessment of such Borrowing Base Property with any other real property constituting a tax lot separate and apart from the tax lot comprising such Borrowing Base Property.
(xviii) As of the date of its inclusion being included as a Borrowing Base Property, but any such Borrowing Base Availability in excess of such limitation shall be excluded for purposes of calculating Borrowing Base Availability and Borrowing Base Value and the associated Net Operating Income and Adjusted Net Operating Income corresponding thereto shall be similarly excluded);
(xi) no Operator of a Borrowing Base property shall have any Indebtedness other than Indebtedness of the type described in §8.1(c), (d), (e) and (f), in each case, with respect to a Borrowing Base Property. Without limiting the foregoing, no Operator shall have any Indebtedness secured by the pledge of any receivables of Borrower, any Guarantor or such Operator;
(xii) each agreement or Lease with an Operator of a CCRC shall obligate the Operator or tenant thereof to provide to Borrower or the applicable Subsidiary Guarantor sufficient and timely financial information, separate for the specific location at the Borrowing Base Property, including to permit calculation of Tenant EBITDAR and Net Operating Income; and
(xiii) such Eligible Real Estate has not been removed from the calculation of the Borrowing Base Availability pursuant to §5.5 or §7.20(c) or (d).
(b) The Borrower shall, and shall cause each Subsidiary Guarantor to:
(i) operate each Borrowing Base Property in compliance with Applicable Law in all buildingsmaterial respects, improvements, parking facilities, sidewalks, storm drainage systems, roofs, plumbing systems, HVAC systems, fire protection systems, electrical systems, equipment, elevators, exterior sidings and doors, landscaping, irrigation systems and all structural components, shall cause each Operator to do so;
(ii) promptly perform and/or observe (or cause to be in good condition, order and repair performed and/or observed) in all material respects subject the covenants and agreements required to reasonable be performed and customary wear observed by it under the Material Contracts to which it is a party and tear; do all things necessary to preserve and there shall exist no structural or other to keep unimpaired their rights thereunder;
(iii) enforce in all material defects or damages in such Borrowing Base Property, whether latent or otherwise, respects the performance and no Credit Party shall have received written notice from any insurance company or bonding company observance of any defects or inadequacies in such Borrowing Base Property, or any part thereof, which would, in either case, adversely affect the insurability all of the same covenants and agreements required to be performed or cause observed by the imposition of extraordinary premiums or charges thereon or of any termination or threatened termination of any policy of insurance or bond.other parties to each Material Contract; and
(xixiv) The Borrower shall have delivered maintain all Licenses required to operate the Administrative Agent a true and correct copy of the Management Agreement that is in effect with respect to such Borrowing Base Property. The Management Agreement with respect to such applicable Borrowing Base Property delivered to the Administrative Agent shall be the only Management Agreement related to such Borrowing Base Property, and shall be in full force and effect and promptly comply with no default or event of defaultall conditions thereof, in either case beyond all applicable notice and grace periods, existing thereunder.
(xx) To the knowledge of Borrower, no portion of such Borrowing Base Property shall have been purchased with proceeds of any illegal activity and no part of the proceeds of any Credit Extension will be used in connection with any illegal activitycause each Operator to do so.
(c) The REIT and Borrower hereby covenant and agrees with respect to In the event that all or any material portion of any Eligible Real Estate included in the calculation of the Borrowing Base Property Availability shall be damaged in any material respect or taken by condemnation, then such property shall no longer be included in the calculation of the Borrowing Base Availability unless and until (i) any damage to comply with Sections 5.05such real estate is repaired or restored, 5.12, 5.18, 5.19, 5.21, 6.02, 6.11, such real estate becomes fully operational and 6.18, the Agent shall receive evidence satisfactory to the Agent of the value of such real estate following such repair or restoration (both at such time and prospectively) or (ii) the Agent shall receive evidence satisfactory to the Agent (which evidence may include the availability of rental loss/business interruption insurance) that the value of such real estate (both at such time and prospectively) shall not be materially adversely affected by such damage or condemnation. In the event that such damage or condemnation only partially affects such Eligible Real Estate included in the calculation of the Borrowing Base Availability, then the Agent may in good faith reduce the Borrowing Base Availability attributable thereto based on such damage until such time as follows:the Agent receives evidence satisfactory to the Agent that the value of such real estate (both at such time and prospectively) shall no longer be materially adversely affected by such damage or condemnation.
(d) Upon any asset ceasing to qualify to be included in the calculation of the Borrowing Base Availability, such asset shall no longer be included in the calculation of the Borrowing Base Availability unless otherwise approved in writing by the Required Lenders. Within five (5) Business Days of any such disqualification, the Borrower shall deliver to the Agent a certificate reflecting such disqualification, together with the identity of the disqualified asset, a statement as to whether any Default or Event of Default arises as a result of such disqualification, and a calculation of the Borrowing Base Availability attributable to such asset. Simultaneously with the delivery of the items required pursuant above, the Borrower shall deliver to the Agent an updated Borrowing Base Certificate demonstrating, after giving effect to such removal or disqualification, compliance with the conditions and covenants contained in §§7.20, 9.1 and 9.
Appears in 1 contract
Samples: Credit Agreement (New Senior Investment Group Inc.)
Borrowing Base Properties. (a) At all times, the REIT and Borrower shall maintain the Borrowing Base Properties in accordance with this Article IX and the other terms and conditions of the Loan Documents.
(b) In addition to the other requirements that are set forth in the definition of “Borrowing Base Property,” in order for a Real Property to qualify as a Borrowing Base Property, it shall comply with the following conditions at all times:
(i) Such Each Borrowing Base Property shall be wholly satisfy the following criteria: (i) Borrower or a wholly-owned Subsidiary of the Borrower holds good title (by a Subsidiary Guarantor (other than the Borrowing Base Property known as 000 Xxxxxxxxxx Xxxxxx, Xxxxxxxx, Xxx Xxxx, which shall be wholly owned by the 163 Washington SPE) that complies with the covenants and provisions of this Agreement relating to Subsidiary Guarantors and the 163 Entities; provided, however, that a Borrowing Base Property may, with Administrative Agent’s written consent, be leased fee or pursuant to a Subsidiary Guarantor under an Approved Qualified Ground Lease;
) to such Property, free and clear of all Liens (except for the Liens permitted under Section 7.2.3); (ii) The representations and warranties contained such Property is leased to an Operating Lessee; (iii) such Property is designated a full-service property (in Sections 3.05(aaccordance with industry standard, as reasonably determined by Administrative Agent), 3.06(b), 3.22, and 3.23 ; (iv) such Property shall at all times be true and correct an upper-upscale, luxury or better quality hotel, as designated by Xxxxx Travel Research (or a similar successor company designated by Administrative Agent); (v) such Property is operated under a nationally recognized brand (or with respect to a foreign Property, an internationally recognized brand) by an Approved Manager; (vi) such Borrowing Base Property and such Borrowing Base Property shall be in compliance with the covenants set forth in Section 9.01(c);
(iii) Such Borrowing Base Property shall be an income producingis fully operating, multi-family, mixed-use, retail, distribution, parking or office property, provided that parking facilities shall be permitted only if operated by a third-party operator and distribution facilities shall be permitted only open to the extent they meet public and not under development or redevelopment (except for routine, ordinary course renovation, maintenance and repair that does not result in the conditions set forth in clause (v) closure of this Section 9.01(b);
(iv) At least eighty more than twenty-five percent (8025%) of the (x) units in any multi-family Borrowing Base Property, and (y) net rentable square footage of any other type of Borrowing Base Property (other than a parking facility), shall be subject to executed Leases from tenants in occupancy who are not in default beyond the expiration of all applicable notice and grace periods under their Lease and not in bankruptcy (the “Occupancy Rate”rooms at such hotel); provided, however, that if temporary closure due to force majeure events, not to exceed fifteen (A15) on Business Days, shall be permitted; (vii) such Property is not subject to or encumbered by any dateIndebtedness other than Permitted Borrowing Base Debt; (viii) such Property is free of material structural defects or material environmental issues; (ix) neither such Property nor the Property Owner thereof is encumbered with Permitted Borrowing Base Debt or any other Material Agreement that by its terms precludes the grant of the Collateral, the Occupancy Rate exercise by or on behalf of the Secured Creditors of remedies with respect to the Collateral or in any way impairs the validity or the enforceability of the Security Documents; and (x) the Property Owner of such Property is less Borrower or a Subsidiary Guarantor.
(i) Borrower shall own at least three (3) Borrowing Base Properties at all times, of which no fewer than eighty percent (80%), there shall be a grace period of two (2) fiscal quarters must be located in the United States of America; (ii) no Borrowing Base Property and no Capital Stock in any Borrowing Base Entity shall at any time be subject to increase such occupancy provided that or encumbered by (iA) Borrower delivers written notice of the failure to comply with such occupancy requirement within any Indebtedness other than Permitted Borrowing Base Debt, or (B) any Lien other than a Permitted Borrowing Base Lien, (iii) no more than three (3) Business Days after a Responsible Officer of Borrower obtains knowledge of such failure, and (ii) at all times during such grace period, the Occupancy Rate does not fall below seventy percent (70%) at any time and (B) on any date, the Occupancy Rate is less than seventy percent (70%), there shall be a grace period of two (2) fiscal quarters (which shall be concurrent with and not in addition to the two (2) fiscal quarter grace period referred to in clause (A), above) to increase such occupancy provided that (i) Borrower delivers written notice Properties located outside of the failure to comply with such occupancy requirement within three (3) Business Days after a Responsible Officer United State of Borrower obtains knowledge of such failure, (ii) at all times during such grace period, the Occupancy Rate does not fall below fifty percent (50%) America may qualify as Borrowing Base Properties at any time, and (iv) no more than two (2) Borrowing Base Properties may include a condominium or timeshare component or otherwise be part of a condominium or similar development that includes a residential/hotel condominium, fractional interest or timeshare component, in any such case unless otherwise agreed by the Required Lenders, and (v) at least three (3) Borrowing Base Properties shall at all times qualify as “luxury” or “upper-upscale” hotels, as designated by Xxxxx Travel Research (or a similar successor company designated by Administrative Agent).
(c) Borrower may propose to include additional Properties (whether New Acquisitions or former Development Properties, or Properties that were once Borrowing Base Properties and that no longer qualify as such) by sending written proposals for inclusion to Administrative Agent. Administrative Agent may reasonably request any diligence materials and documentation it deems necessary to evaluate such Property, including, without limitation, certifications, appraisals and title documentation. Administrative Agent will make such request and materials available to the Lenders. The inclusion of any Pre-Approved Borrowing Base Property as a Borrowing Base Property shall be subject to (i) delivery of the foregoing diligence materials and (ii) Administrative Agent’s reasonable approval that such Pre-Approved Borrowing Base Property meets the criteria set forth in clause (a) above and the inclusion thereof complies with clause (b) above. The inclusion of any Property (other than a Pre-Approved Borrowing Base Property) as a Borrowing Base Property shall be subject to (i) delivery of the foregoing diligence materials, (ii) Administrative Agent’s reasonable approval that such Property meets the criteria set forth in clause (a) above and the inclusion thereof complies with clause (b) above and (iii) during the pendency prior written consent of the Required Lenders. Administrative Agent and, to the extent their consent is required the Lenders, shall be given at least ten (10) Business Days to evaluate any diligence materials and evaluate Borrower’s written proposal. In connection with the inclusion of any Property as a Borrowing Base Property, Borrower shall execute and deliver collateral documentation (including, without limitation, a First Lien Mortgage securing such Property) substantially similar to the Loan Documents executed and delivered by the Borrower on the Closing Date with respect to the applicable Property.
(d) As a condition to including a Property as a Borrowing Base Property, Borrower, Guarantor or any Subsidiary that directly owns the Capital Stock of a Subsidiary that directly or indirectly owns or leases such Property shall execute and deliver to the Administrative Agent a supplement to the Pledge Agreement for the purposes of becoming a pledgor thereunder with respect to the Capital Stock of such grace period, the percentage applicable in calculating the Value-Based Borrowing Base Limit Entity (provided such Subsidiary is not theretofore a party to the Pledge Agreement) and shall, pursuant to (and to the extent required by) the Pledge Agreement, pledge to the Administrative Agent all of the outstanding shares of Capital Stock of such owned Subsidiary and deliver undated stock powers for such certificates, executed in blank (or, if any such shares of capital stock are uncertificated, confirmation and evidence reasonably satisfactory to the Administrative Agent that the security interest in such uncertificated securities has been transferred to and perfected by the Administrative Agent, for the benefit of the Lenders, in accordance with Article 8 of the UCC or any other similar law which may be applicable).
(e) As a further condition to including a Property as a Borrowing Base Property, any Subsidiary that, upon inclusion of such Property as a Borrowing Base Property would become a Property Owner of a Borrowing Base Property, shall execute a Joinder to become party to the Subsidiary Guaranty, substantially in the form attached as Exhibit H-2 hereto.
(f) Borrower shall promptly, after any Responsible Officer of the Borrower obtains knowledge thereof, notify Administrative Agent of: (i) any material structural defects or Environmental Occurrence affecting a Borrowing Base Property or (ii) the occurrence of any casualty event affecting a Borrowing Base Property, or (iii) any other event or occurrence which would cause a Borrowing Base Property to cease to qualify as such.
(g) Subject to satisfaction of each of the conditions set forth below with respect to any Borrowing Base Property, Borrower shall be entitled to release and/or dispose of a Borrowing Base Property from the Lien of the applicable First Lien Mortgage and related Loan Documents (each such property, a “Borrowing Base Release Property”) in connection with a Disposition or refinancing of such Borrowing Base Property (each release under this Section 7.1.22(g), a “Borrowing Base Property Release”):
(i) Borrower delivers a written notice (a “Property Release Notice”) to Administrative Agent of its desire to effect such Borrowing Base Property Release no later than thirty (30) days prior to the date of such desired Borrowing Base Property Release, and setting forth the Business Day (the “Release Date”) on which Borrower desires that Administrative Agent release its interest in such Borrowing Base Release Property;
(ii) Borrower shall submit to Administrative Agent not less than ten (10) Business Days prior to the Release Date (which must be a Business Day) a release of Liens (and related Loan Documents) for the applicable Borrowing Base Release Property shall be reduced (for execution by fifty percent (50%); thereafter, and Administrative Agent) in a form appropriate in the event any Borrowing Base Property has an Occupancy Rate below fifty percent (50%) at any time, such Borrowing Base Property shall be removed from the Borrowing Base pursuant to Section 9.03;
(v) If such Borrowing Base Property is a distribution facility, it shall be an Investment Grade Borrowing Base Property having at least eight (8) years remaining on the term of the Lease to the applicable Investment Grade Tenant at the time such facility is added to the Borrowing Base (excluding any extension options) state and where the applicable Investment Grade Tenant shall be in occupancy, not in default beyond the expiration of all applicable notice and grace periods under its Lease and not in bankruptcy;
(vi) If such Borrowing Base Property is a Single Tenant Asset, then the remaining Lease term related thereto shall be no less than six (6) years (excluding any extension options);
(vii) An Appraisal shall be required for each Borrowing Base Property during the term of this Agreement as follows: (A) within six (6) months prior to the Effective Date (with respect to each initial Borrowing Base Property that is added to the Borrowing Base upon the Effective Date, and (B) within six (6) months prior to the date that any Borrowing Base Property is added to the Borrowing Base in accordance with the Loan Documents (which respect to Borrowing Base Properties added after the Effective Date), and that in each case that is acceptable otherwise satisfactory to Administrative Agent in its reasonable discretiondiscretion and all other documentation Administrative Agent reasonably requires to be delivered by Borrower in connection with such Borrowing Base Property Release (collectively, “Release Instruments”) for each applicable Borrowing Base Release Property together with an Officer’s Certificate certifying that (A) the Release Instruments are in compliance with all Legal Requirements, (B) the release to be effected will not violate the terms of this Agreement, (C) the release to be effected will not impair or otherwise adversely affect the Liens, security interests and other rights of Lenders under the Loan Documents not being released (or as to the Borrowing Base Properties subject to the provisions of Sections 9.01(b)(viiiLoan Documents not being released) and (ixD) the condition described in paragraph (iii) below is satisfied in connection with such Borrowing Base Property Release (together with calculations and supporting documentation demonstrating the same in reasonable detail);
(viii) Notwithstanding anything to the contrary in clause (vii) above, in Administrative Agent’s sole discretion, a new Appraisal may be required, at Borrower’s expense, for each Borrowing Base Property commencing (i) twenty four (24) months after the Effective Date (with respect to each initial Borrowing Base Property that is added to the Borrowing Base upon the Effective Date), (ii) twenty four (24) months after the date that any Borrowing Base Property is thereafter added to the Borrowing Base (with respect to any such subsequently-added Borrowing Base Property), and (iii) twenty four (24) months after the date of any Appraisal obtained pursuant After giving effect to this Section 9.01(viii). Borrower may, at its election and expense, also request a new Appraisal at any of such times. For purposes of this Section 9.01(b)(viii), an Appraisal that has a date of value that is no earlier than six (6) months prior to the end of any applicable 24-month period described in this Section 9.01(b)(viii) shall, if it is approved by Administrative Agent and complies with the requirements of this Agreement, be deemed to satisfy the requirements herein for a new Appraisal to be obtained commencing on each such 24-month period.
(ix) If the Net Operating Income for any Borrowing Base Property shall decrease (A) by more than five percent (5%) from one fiscal quarter to the next and the Net Operating Income of such Borrowing Base Property for Release, the next succeeding fiscal quarter does Aggregate Outstanding Balance shall not make up for such decline in Net Operating Income exceed the Available Commitment calculated on a pro forma basis;
(iv) No monetary Default or Event of Default shall have occurred and then be continuing on the date on which Borrower delivers the Property Release Notice and on the Release Date, unless all outstanding monetary Defaults and Events of Default are cured as a result of the Borrowing Base Property Release;
(Bv) ten percent (10%) or more from the Net Operating Income of After giving effect to such Borrowing Base Property for the previous calendar yearRelease, then no Event of Default shall occur as a new Appraisal for such Borrowing Base Property shall be required to be obtained at Borrower’s cost.
(x) For purposes of determining the Appraised Value of any Borrowing Base Property hereunder, the most recent Appraisal thereof obtained by in accordance with the terms hereof shall govern the determination of the Appraised Value thereof; provided, however that if a new Appraisal is not required to be obtained for such Borrowing Base Property pursuant to Section 9.01(b)(viii) or (ix), until such time as the new Appraisal shall have been obtained in accordance with this Agreement, then the Borrowing Base Asset Value of such Borrowing Base Property shall equal the lesser of the Acquisition Cost of such Borrowing Base Property or the Estimated Value thereof.
(xi) Borrower may elect, pursuant to the definition of “Borrowing Base Asset Value,” to require the determination of the component of the definition of Borrowing Base Asset Value referenced in clause (b) of the definition thereof to be based upon the Estimated Values result of the Borrowing Base Properties or the Appraised Values of the Borrowing Base Properties only once per fiscal quarter, Property Release; and
(vi) Borrower shall pay for any and all reasonable out-of-pocket costs and expenses incurred in connection with the delivery by Borrower to Administrative Agent of the Borrowing Base Certificate that is due to be delivered during such fiscal quarter, and such election shall be made on an “all or none” basis such that, if Borrower elects to require such determination to be based on Appraised Values, such election must be made as to all Borrowing Base Properties, and if Borrower elects to require such determination to be based on Estimated Values, such election must be made as to all Borrowing Base Properties (provided, however, that in the event that Borrower obtains an updated Appraisal pursuant to Section 9.01(b)(viii) Borrower shall be permitted to required that such determination be made on the basis of such updated Appraised Value); provided, further, that if the Appraised Value of one or more Borrowing Base Properties cannot be calculated solely because Appraisals have been ordered but have not yet been delivered for such Borrowing Base Property, as required hereby, the Borrowing Base Appraised Value may nonetheless be determined according to the Estimated Value of each such affected any proposed Borrowing Base Property and the Appraised Value of all other Borrowing Base Properties until such time as an Appraisal for such affected Borrowing Base Property has been obtained as provided herein.
(xii) The survey for such Borrowing Base Property delivered to the Administrative Agent in connection with this Agreement shall be prepared in accordance with the 2011 Minimum Standard Detail Requirements for ALTA/ASM Land Title Surveys. Except for those matters reflected on such survey or in the title policy for such Borrowing Base Property delivered to the Administrative Agent in connection with this Agreement or as otherwise disclosed to the Administrative Agent, as of the date such Real Property is accepted as a Borrowing Base Property, there shall not be any construction or commencement of construction on such Borrowing Base Property of any new external structures, or additions or extensions thereto, or other external improvements, whether to existing structures or not. Except as may be disclosed on the surveys delivered pursuant to this Agreement and in the title policy for such Borrowing Base Property: (i) none of the material improvements comprising part of such Borrowing Base Property shall be outside the boundaries of such Borrowing Base Property (or building restriction or setback lines applicable thereto); (ii) no material improvements on adjoining properties shall encroach upon such Borrowing Base Property; and (iii) no material improvements comprising part of such Borrowing Base Property shall encroach upon or violate any easements or any other encumbrance upon such Borrowing Base Property, in each case other than minor encumbrances which could not reasonably be expected to have a (x) material adverse effect with respect to the financial condition or the operations of such Borrowing Base Property, (y) material adverse effect on the Borrowing Base Asset Value of such Borrowing Base Property, or (z) material adverse effect on the ownership of such Borrowing Base Property.
(xiii) All transfer taxes, deed stamps, intangible taxes or other amounts in the nature of transfer taxes required to be paid by any Credit Party under applicable legal requirements currently in effect in connection with the transfer of such Borrowing Base Property to the Borrower, any transfer of a controlling interest in the Borrower or the formation of the REIT, as applicable, shall have been paid or will be paid prior to delinquency. All mortgage, mortgage recording, stamp, intangible or other similar tax required to be paid by any Credit Party under applicable legal requirements currently in effect in connection with the execution, delivery, recordation, filing, registration, perfection or enforcement of any of the Loan DocumentsRelease, including, without limitation, the Mortgage, shall have been paid prior Administrative Agent’s reasonable attorneys’ fees and disbursements and all title insurance premiums for any endorsements to delinquency.
(xiv) The Borrower shall have delivered to any existing Title Policies reasonably required by Administrative Agent copies of all Leases and all unrecorded easement agreements, reciprocal easement agreements, management agreements and material agreements in Borrower’s possession or custody which affect in any material respect the Borrower’s interest in such Borrowing Base Property.
(xv) Borrower shall have received no notice of any condemnation proceeding involving such Borrowing Base Property or any portion thereof or parking facility used in connection therewith, nor shall any portion of such Borrowing Base Property or any parking facility used in connection therewith be damaged due to fire or other casualty, except those proceedings or casualties that could not reasonably be expected to materially interfere with the current use and value of such Borrowing Base Property or to cause such property to otherwise no longer qualify as a Borrowing Base Property.
(xvi) Such Borrowing Base Property shall have adequate rights of access to public ways and is currently served by adequate electric, gas, water, sewer, sanitary sewer and storm drain facilities. All public utilities necessary to the use and enjoyment of such Borrowing Base Property as intended to be used and enjoyed shall be located in the public right-of-way abutting such Borrowing Base Property or in private easements or license areas benefitting such Borrowing Base Property.
(xvii) No Credit Party shall have suffered, permitted or initiated the joint assessment of such Borrowing Base Property with any other real property constituting a tax lot separate and apart from the tax lot comprising such Borrowing Base Property.
(xviii) As of the date of its inclusion as a Borrowing Base Property, such Borrowing Base Property, including all buildings, improvements, parking facilities, sidewalks, storm drainage systems, roofs, plumbing systems, HVAC systems, fire protection systems, electrical systems, equipment, elevators, exterior sidings and doors, landscaping, irrigation systems and all structural components, shall be in good condition, order and repair in all material respects subject to reasonable and customary wear and tear; and there shall exist no structural or other material defects or damages in such Borrowing Base Property, whether latent or otherwise, and no Credit Party shall have received written notice from any insurance company or bonding company of any defects or inadequacies in such Borrowing Base Property, or any part thereof, which would, in either case, adversely affect the insurability of the same or cause the imposition of extraordinary premiums or charges thereon or of any termination or threatened termination of any policy of insurance or bond.
(xix) The Borrower shall have delivered to the Administrative Agent a true and correct copy of the Management Agreement that is in effect with respect to such Borrowing Base Property. The Management Agreement with respect to such Borrowing Base Property delivered to the Administrative Agent shall be the only Management Agreement related to such Borrowing Base Property, and shall be in full force and effect with no default or event of default, in either case beyond all applicable notice and grace periods, existing thereunder.
(xx) To the knowledge of Borrower, no portion of such Borrowing Base Property shall have been purchased with proceeds of any illegal activity and no part of the proceeds of any Credit Extension will be used in connection with any illegal activitysuch proposed release.
(c) The REIT and Borrower hereby covenant and agrees with respect to any Borrowing Base Property (i) to comply with Sections 5.05, 5.12, 5.18, 5.19, 5.21, 6.02, 6.11, and 6.18, and (ii) as follows:
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Borrowing Base Properties. (a) At all times, the REIT and Borrower shall maintain the Borrowing Base Properties in accordance with this Article IX and the other terms and conditions of the Loan Documents.
(b) In addition to the other requirements that are set forth in the definition of “Borrowing Base Property,” in order for a Real Property to qualify as a Borrowing Base Property, it shall comply with the following conditions at all times:
(i) Such Each Borrowing Base Property shall be wholly at all times satisfy the following criteria: (i) Borrower or a wholly-owned Subsidiary of the Borrower holds good title (by fee or pursuant to a Subsidiary Guarantor Qualified Ground Lease) to such Property, free and clear of all Liens (other than the except for Permitted Borrowing Base Property known as 000 Xxxxxxxxxx Xxxxxx, Xxxxxxxx, Xxx Xxxx, which shall be wholly owned by the 163 Washington SPE) that complies with the covenants and provisions of this Agreement relating to Subsidiary Guarantors and the 163 EntitiesLiens); provided, however, that a Borrowing Base Property may, with Administrative Agent’s written consent, be leased to a Subsidiary Guarantor under an Approved Ground Lease;
(ii) The representations and warranties contained such Property is leased to an Operating Lessee; (iii) such Property is designated a full-service property (in Sections 3.05(aaccordance with industry standard, as reasonably determined by Administrative Agent), 3.06(b), 3.22, and 3.23 ; (iv) such Property shall at all times be true and correct an upper-upscale, luxury or better quality hotel, as designated by Xxxxx Travel Research (or a similar successor company designated by Administrative Agent); (v) such Property is operated under a nationally recognized brand (or with respect to a foreign Property, an internationally recognized brand) by an Approved Manager; (vi) such Borrowing Base Property and such Borrowing Base Property shall be in compliance with the covenants set forth in Section 9.01(c);
(iii) Such Borrowing Base Property shall be an income producingis fully operating, multi-family, mixed-use, retail, distribution, parking or office property, provided that parking facilities shall be permitted only if operated by a third-party operator and distribution facilities shall be permitted only open to the extent they meet public and not under development or redevelopment (except for routine, ordinary course renovation, maintenance and repair that does not result in the conditions set forth in clause (v) closure of this Section 9.01(b);
(iv) At least eighty more than twenty-five percent (8025%) of the (x) units in any multi-family Borrowing Base Property, and (y) net rentable square footage of any other type of Borrowing Base Property (other than a parking facility), shall be subject to executed Leases from tenants in occupancy who are not in default beyond the expiration of all applicable notice and grace periods under their Lease and not in bankruptcy (the “Occupancy Rate”rooms at such hotel); provided, however, that if temporary closure due to force majeure events, not to exceed fifteen (15) Business Days, as well as ordinary course seasonal closures, shall be permitted; (vii) such Property is not subject to or encumbered by any Indebtedness other than Permitted Borrowing Base Debt; (viii) such Property is free of material structural defects or material environmental issues and not subject to any material condemnation proceedings; (ix) neither such Property nor the Property Owner thereof is encumbered with Permitted Borrowing Base Debt or any other Material Agreement that by its terms precludes the grant of the Collateral, the exercise by or on behalf of the Secured Creditors of remedies with respect to the Collateral or in any way impairs the validity or the enforceability of the Security Documents; and (x) the Property Owner of such Property is Borrower or a Subsidiary Guarantor.
(i) The Borrowing Base must at all times include a minimum of at least five (5) Borrowing Base Properties; (ii) no Borrowing Base Property and no Capital Stock in any Borrowing Base Ownership Entity shall at any time be subject to or encumbered by (A) on any dateIndebtedness other than Permitted Borrowing Base Debt, or (B) any Lien other than a Permitted Borrowing Base Lien; and (iii) each Borrowing Base Property shall be located in the Occupancy Rate is less than eighty percent United States, provided that one (80%1) Borrowing Base Property may be located in Canada. Notwithstanding the foregoing subclause (b)(i), there Borrower shall be entitled to reduce the Borrowing Base to a grace period minimum of two four (24) fiscal quarters to increase such occupancy Borrowing Base Properties, provided that the calculation of the Available Commitment shall be modified as provided in the definition thereof.
(c) Borrower may propose to include additional Properties (whether New Acquisitions or former Development Properties, or Properties that were once Borrowing Base Properties but ceased to qualify as such) by sending a written proposal for inclusion to Administrative Agent. Administrative Agent may reasonably request any diligence materials and documentation it deems necessary to evaluate such Property, including, without limitation, certifications, appraisals, UCC, title, lien and judgment searches, and title documentation, management or franchise agreements and other material agreements. Administrative Agent will make such request and materials available to the Lenders. The inclusion of any Property (other than the Initial Borrowing Base Properties) as a Borrowing Base Property shall be subject to (i) Borrower delivers written notice delivery of the failure to comply with such occupancy requirement within three (3) Business Days after a Responsible Officer of Borrower obtains knowledge of such failureforegoing diligence materials, and (ii) at all times during Borrower’s certification and Administrative Agent’s reasonable approval that such grace period, Property meets the Occupancy Rate does not fall below seventy percent (70%) at any time and (B) on any date, the Occupancy Rate is less than seventy percent (70%), there shall be a grace period of two (2) fiscal quarters (which shall be concurrent with and not in addition to the two (2) fiscal quarter grace period referred to criteria set forth in clause (A)a) above and the inclusion thereof complies with clause (b) above. Administrative Agent shall be given at least ten (10) Business Days to evaluate any diligence materials and Borrower’s certification.
(d) As a further condition to the inclusion of a Property as a Borrowing Base Property, above) to increase such occupancy provided that (i) Borrower delivers written notice Borrower, Guarantor or any Subsidiary that directly owns the Capital Stock of a Subsidiary that directly or indirectly owns or leases such Property shall execute and deliver to the Administrative Agent a supplement to the Pledge Agreement for the purposes of becoming a pledgor thereunder with respect to the Capital Stock of such Borrowing Base Ownership Entity (provided such Subsidiary is not already a party to the Pledge Agreement) and shall, pursuant to (and to the extent required by) the Pledge Agreement, pledge to the Administrative Agent all of the failure outstanding shares of Capital Stock of such Subsidiary and deliver undated stock powers for such certificates, executed in blank (or, if any such shares of capital stock are uncertificated, confirmation and evidence reasonably satisfactory to comply the Administrative Agent that the security interest in such uncertificated securities has been transferred to and perfected by the Administrative Agent, for the benefit of the Lenders, in accordance with Article 8 of the UCC or any other similar law which may be applicable) and (ii) any Subsidiary that directly owns the Capital Stock of a Subsidiary that directly or indirectly owns or leases such occupancy requirement within three Property shall, unless already a party to the Subsidiary Guaranty, execute a Joinder to become party to the Subsidiary Guaranty, substantially in the form attached as Exhibit H-2 hereto.
(3e) Business Days Borrower shall promptly, after a any Responsible Officer of the Borrower obtains knowledge of such failurethereof, notify Administrative Agent of: (i) any material structural defects or Environmental Occurrence affecting a Borrowing Base Property or (ii) at all times during such grace periodthe occurrence of any casualty event affecting a Borrowing Base Property, the Occupancy Rate does not fall below fifty percent (50%) at any time, and or (iii) during any other event or occurrence which would cause a Borrowing Base Property to cease to satisfy each of the pendency of conditions and requirements set forth in clause (a) above. In such grace periodevent, the percentage applicable in calculating the Value-Based affected Borrowing Base Limit Property will immediately, as of the occurrence, cease to qualify as a Borrowing Base Property hereunder, except to the extent provided in the following sentence. In the event that structural defects, Environmental Occurrence or casualty result in the temporary closure (for repair, restoration or remediation) of less than 25% of the rooms in such hotel and provided that the Borrower or the applicable Property Owner has given reasonable security to the Administrative Agent to insure that the repair, restoration or remediation thereof will be promptly and diligently resolved in a good and xxxxxxx-like manner within no more than sixty (60) days from occurrence, then such Property will not cease to qualify as a Borrowing Base Property for so long as such conditions remain satisfied and provided that such issues are finally repaired or resolved within sixty (60) days.
(f) Borrower may elect, on no less than fifteen (15) days prior written notice (a “Property Release Notice”) to Administrative Agent, to remove a Borrowing Base Property from the Borrowing Base, whether as a result of an intended Disposition or otherwise, provided that:
(i) The Property Release Notice sets forth the Business Day (the “Release Date”) on which Borrower desires that Administrative Agent release the Property from the Borrowing Base Property and, if applicable, whether Borrower elects to terminate the Pledge and Subsidiary Guaranty with respect to the Borrowing Base Ownership Entities that hold interests in such Property, to the extent applicable with respect thereto;
(ii) Borrower shall submit to Administrative Agent not less than ten (10) days prior to the Release Date a release of Liens (and related Loan Documents) for the applicable Borrowing Base Property shall be reduced Ownership Entity (for execution by fifty percent (50%); thereafter, and Administrative Agent) in a form appropriate in the event any Borrowing Base Property has an Occupancy Rate below fifty percent (50%) at any time, such Borrowing Base Property shall be removed from the Borrowing Base pursuant to Section 9.03;
(v) If such Borrowing Base Property is a distribution facility, it shall be an Investment Grade Borrowing Base Property having at least eight (8) years remaining on the term of the Lease to the applicable Investment Grade Tenant at the time such facility is added to the Borrowing Base (excluding any extension options) state and where the applicable Investment Grade Tenant shall be in occupancy, not in default beyond the expiration of all applicable notice and grace periods under its Lease and not in bankruptcy;
(vi) If such Borrowing Base Property is a Single Tenant Asset, then the remaining Lease term related thereto shall be no less than six (6) years (excluding any extension options);
(vii) An Appraisal shall be required for each Borrowing Base Property during the term of this Agreement as follows: (A) within six (6) months prior to the Effective Date (with respect to each initial Borrowing Base Property that is added to the Borrowing Base upon the Effective Date, and (B) within six (6) months prior to the date that any Borrowing Base Property is added to the Borrowing Base in accordance with the Loan Documents (which respect to Borrowing Base Properties added after the Effective Date), and that in each case that is acceptable otherwise satisfactory to Administrative Agent in its reasonable discretiondiscretion (collectively, “Release Instruments”) for each applicable Borrowing Base Ownership Entity together with an Officer’s Certificate certifying that (A) the Release Instruments are in compliance with all Legal Requirements, (B) the release to be effected will not violate the terms of this Agreement, (C) the release to be effected will not impair or otherwise adversely affect the Liens, security interests and other rights of Administrative Agent and Lenders under the Subsidiary Guaranty and Pledge with respect to Borrowing Base Ownership Entities not being released (or as to the Borrowing Base Properties subject to the provisions of Sections 9.01(b)(viiiLoan Documents not being released) and (ixD) the condition described in paragraph (iii) below is satisfied in connection with such Borrowing Base Property Release (together with calculations and supporting documentation demonstrating the same in reasonable detail);
(viii) Notwithstanding anything to the contrary in clause (vii) above, in Administrative Agent’s sole discretion, a new Appraisal may be required, at Borrower’s expense, for each Borrowing Base Property commencing (i) twenty four (24) months after the Effective Date (with respect to each initial Borrowing Base Property that is added to the Borrowing Base upon the Effective Date), (ii) twenty four (24) months after the date that any Borrowing Base Property is thereafter added to the Borrowing Base (with respect to any such subsequently-added Borrowing Base Property), and (iii) twenty four (24) months after the date of any Appraisal obtained pursuant After giving effect to this Section 9.01(viii). Borrower may, at its election and expense, also request a new Appraisal at any of such times. For purposes of this Section 9.01(b)(viii), an Appraisal that has a date of value that is no earlier than six (6) months prior to the end of any applicable 24-month period described in this Section 9.01(b)(viii) shall, if it is approved by Administrative Agent and complies with the requirements of this Agreement, be deemed to satisfy the requirements herein for a new Appraisal to be obtained commencing on each such 24-month period.
(ix) If the Net Operating Income for any Borrowing Base Property shall decrease (A) by more than five percent (5%) from one fiscal quarter to the next and the Net Operating Income of such Borrowing Base Property for Release, the next succeeding fiscal quarter does Aggregate Outstanding Balance shall not make up for such decline in Net Operating Income exceed the Available Commitment calculated on a pro forma basis;
(iv) No monetary Default or Event of Default shall have occurred and then be continuing as of the Release Date, unless all outstanding monetary Defaults and Events of Default are cured as a result of the Borrowing Base Property Release;
(Bv) ten percent (10%) or more from the Net Operating Income of After giving effect to such Borrowing Base Property for Release, no Event of Default shall occur as a result of the previous calendar year, then a new Appraisal for such Borrowing Base Property shall be required to be obtained at Borrower’s costRelease.
(xg) For purposes of determining In the Appraised Value of any Borrowing Base event that a Property hereunder, the most recent Appraisal thereof obtained by in accordance with the terms hereof shall govern the determination of the Appraised Value thereof; provided, however that if becomes a new Appraisal is not required to be obtained for such Released Borrowing Base Property pursuant to Section 9.01(b)(viiiclauses (e) or (ix)f) above, until then:
(i) Borrower shall deliver to Administrative Agent an updated Compliance Certificate reflecting the fact that such time as the new Appraisal shall have been obtained Property is no longer in accordance with this Agreement, then the Borrowing Base Asset Value of and shall make the mandatory prepayments required under Section 3.2.1(b), if any;
(ii) Administrative Agent shall execute such reasonable documents as Borrower shall prepare and request in order to release the applicable Borrowing Base Ownership Entities from the Subsidiary Guaranty and Pledge (but not with respect to any remaining Borrowing Base Property in which such Borrowing Base Property shall equal the lesser of the Acquisition Cost of such Borrowing Base Property or the Estimated Value thereof.Ownership Entities may have an interest); and
(xiiii) Borrower may elect, pursuant to the definition of “Borrowing Base Asset Value,” to require the determination of the component of the definition of Borrowing Base Asset Value referenced in clause (b) of the definition thereof to be based upon the Estimated Values of the Borrowing Base Properties or the Appraised Values of the Borrowing Base Properties only once per fiscal quarter, shall pay any and all reasonable out-of-pocket costs and expenses incurred in connection with the delivery by Borrower to Administrative Agent of the Borrowing Base Certificate that is due to be delivered during such fiscal quarter, and such election shall be made on an “all or none” basis such that, if Borrower elects to require such determination to be based on Appraised Values, such election must be made as to all Borrowing Base Properties, and if Borrower elects to require such determination to be based on Estimated Values, such election must be made as to all Borrowing Base Properties (provided, however, that in the event that Borrower obtains an updated Appraisal pursuant to Section 9.01(b)(viii) Borrower shall be permitted to required that such determination be made on the basis of such updated Appraised Value); provided, further, that if the Appraised Value of one or more Borrowing Base Properties cannot be calculated solely because Appraisals have been ordered but have not yet been delivered for such Borrowing Base Property, as required hereby, the Borrowing Base Appraised Value may nonetheless be determined according to the Estimated Value of each such affected Borrowing Base Property and the Appraised Value of all other Borrowing Base Properties until such time as an Appraisal for such affected Borrowing Base Property has been obtained as provided herein.
(xii) The survey for such Borrowing Base Property delivered to the Administrative Agent in connection with this Agreement shall be prepared in accordance with the 2011 Minimum Standard Detail Requirements for ALTA/ASM Land Title Surveys. Except for those matters reflected on such survey or in the title policy for such Borrowing Base Property delivered to the Administrative Agent in connection with this Agreement or as otherwise disclosed to the Administrative Agent, as of the date such Real Property is accepted as a Borrowing Base Property, there shall not be any construction or commencement of construction on such Borrowing Base Property of any new external structures, or additions or extensions thereto, or other external improvements, whether to existing structures or not. Except as may be disclosed on the surveys delivered pursuant to this Agreement and in the title policy for such Borrowing Base Property: (i) none of the material improvements comprising part of such Borrowing Base Property shall be outside the boundaries of such Borrowing Base Property (or building restriction or setback lines applicable thereto); (ii) no material improvements on adjoining properties shall encroach upon such Borrowing Base Property; and (iii) no material improvements comprising part of such Borrowing Base Property shall encroach upon or violate any easements or any other encumbrance upon such Borrowing Base Property, in each case other than minor encumbrances which could not reasonably be expected to have a (x) material adverse effect with respect to the financial condition or the operations of such Borrowing Base Property, (y) material adverse effect on the Borrowing Base Asset Value of such Borrowing Base Property, or (z) material adverse effect on the ownership of such Borrowing Base Property.
(xiii) All transfer taxes, deed stamps, intangible taxes or other amounts in the nature of transfer taxes required to be paid by any Credit Party under applicable legal requirements currently in effect in connection with the transfer of such Borrowing Base Property to the Borrower, any transfer of a controlling interest in the Borrower or the formation of the REIT, as applicable, shall have been paid or will be paid prior to delinquency. All mortgage, mortgage recording, stamp, intangible or other similar tax required to be paid by any Credit Party under applicable legal requirements currently in effect in connection with the execution, delivery, recordation, filing, registration, perfection or enforcement of any of the Loan Documentsforegoing, including, without limitation, the Mortgage, shall have been paid prior to delinquencyAdministrative Agent’s reasonable attorneys’ fees and disbursements.
(xiv) The Borrower shall have delivered to Administrative Agent copies of all Leases and all unrecorded easement agreements, reciprocal easement agreements, management agreements and material agreements in Borrower’s possession or custody which affect in any material respect the Borrower’s interest in such Borrowing Base Property.
(xv) Borrower shall have received no notice of any condemnation proceeding involving such Borrowing Base Property or any portion thereof or parking facility used in connection therewith, nor shall any portion of such Borrowing Base Property or any parking facility used in connection therewith be damaged due to fire or other casualty, except those proceedings or casualties that could not reasonably be expected to materially interfere with the current use and value of such Borrowing Base Property or to cause such property to otherwise no longer qualify as a Borrowing Base Property.
(xvi) Such Borrowing Base Property shall have adequate rights of access to public ways and is currently served by adequate electric, gas, water, sewer, sanitary sewer and storm drain facilities. All public utilities necessary to the use and enjoyment of such Borrowing Base Property as intended to be used and enjoyed shall be located in the public right-of-way abutting such Borrowing Base Property or in private easements or license areas benefitting such Borrowing Base Property.
(xvii) No Credit Party shall have suffered, permitted or initiated the joint assessment of such Borrowing Base Property with any other real property constituting a tax lot separate and apart from the tax lot comprising such Borrowing Base Property.
(xviii) As of the date of its inclusion as a Borrowing Base Property, such Borrowing Base Property, including all buildings, improvements, parking facilities, sidewalks, storm drainage systems, roofs, plumbing systems, HVAC systems, fire protection systems, electrical systems, equipment, elevators, exterior sidings and doors, landscaping, irrigation systems and all structural components, shall be in good condition, order and repair in all material respects subject to reasonable and customary wear and tear; and there shall exist no structural or other material defects or damages in such Borrowing Base Property, whether latent or otherwise, and no Credit Party shall have received written notice from any insurance company or bonding company of any defects or inadequacies in such Borrowing Base Property, or any part thereof, which would, in either case, adversely affect the insurability of the same or cause the imposition of extraordinary premiums or charges thereon or of any termination or threatened termination of any policy of insurance or bond.
(xix) The Borrower shall have delivered to the Administrative Agent a true and correct copy of the Management Agreement that is in effect with respect to such Borrowing Base Property. The Management Agreement with respect to such Borrowing Base Property delivered to the Administrative Agent shall be the only Management Agreement related to such Borrowing Base Property, and shall be in full force and effect with no default or event of default, in either case beyond all applicable notice and grace periods, existing thereunder.
(xx) To the knowledge of Borrower, no portion of such Borrowing Base Property shall have been purchased with proceeds of any illegal activity and no part of the proceeds of any Credit Extension will be used in connection with any illegal activity.
(c) The REIT and Borrower hereby covenant and agrees with respect to any Borrowing Base Property (i) to comply with Sections 5.05, 5.12, 5.18, 5.19, 5.21, 6.02, 6.11, and 6.18, and (ii) as follows:
Appears in 1 contract
