Loan Balancing. (1) Borrower represents that the Budget sets forth all anticipated costs to be incurred by Borrower in connection with the ownership, development, construction, financing, marketing, maintenance and leasing of the Improvements, from time to time through the Maturity Date as extended pursuant to Section 2.5 hereof. Borrower further agrees as follows: (a) Subject to reallocations pursuant to Section 4.4 and Section 4.5, if at any time, the projected costs anticipated to be incurred for any item of Construction Work or for the ownership, development, financing, marketing, maintenance or leasing of the Improvements through the Maturity Date exceed the amount set forth in the Budget for such item (as the same may be adjusted in accordance with the terms of this Agreement), as determined by Administrative Agent and the Construction Consultant in their reasonable discretion (including any such determination that the undisbursed Loan proceeds allocated for the payment of future interest (the “Interest Reserve”) is insufficient) based on factors, including, but not limited to, (1) Administrative Agent’s projections of interest rates for period(s) up to and including the full remaining term of the Loan (and permitted extensions); (2) the effect of any Hedge Agreement; (3) cost overruns or Change Orders; or (4) failure of the Improvements to lease at the rate of absorption or otherwise at rates and terms projected by Borrower, then the Loans shall be deemed not “In Balance.” (b) If the Loans are deemed not “In Balance,” then Borrower shall, at Administrative Agent’s option, within ten (10) Business Days after written notice from Administrative Agent either (a) deposit with Administrative Agent an amount sufficient to cover such deficiency (a “Deficiency Deposit”), which Deficiency Deposit shall be deposited with Administrative Agent in the Controlled Account (the “Deficiency Deposit Account”), (b) make one or more equity contributions to be used by Borrower to pay costs that will bring the Loans In Balance (an “Equity Balancing Contribution”), or (c) deliver a Collateral Letter of Credit in an amount such that the available proceeds thereunder would be sufficient to bring the Loans In Balance and upon which Administrative Agent shall be entitled to draw in compliance with the provisions set forth below in this Section 4.3. Administrative Agent shall not be required to authorize any disbursement of any Loans before receiving (i) payment of any such Deficiency Deposit into the Deficiency Deposit Account and the prior application of such Deficiency Deposit to the payment of Project Costs so as to bring the Loans In Balance, (ii) verification that an Equity Balancing Contribution has been made and the proceeds thereof used for the payment of Project Costs on account of the Improvements, so as to bring the Loans In Balance or (iii) a Collateral Letter of Credit as set forth above. Failure of Borrower to provide satisfactory verification of an Equity Balancing Contribution or deliver a Deficiency Letter of Credit as required above shall be deemed Borrower’s election to make a Deficiency Deposit. The Deficiency Deposit shall be allocated to the Project Loan Budget and the Budget, as applicable, and shall be applied to the payment of Project Costs on account of the Improvements prior to any further disbursement of the Loans. (c) The balances of the applicable Contingency Fund from time to time shall not be considered for purposes of determining whether the Loans are In Balance. (2) If an Event of Default shall occur and be continuing, Administrative Agent (subject to the provisions of Section 14.3) may, at its option, in addition to exercising any other rights or remedies available under the Loan Documents, (A) apply any unexpended Deficiency Deposit to (or draw on any Collateral Letter of Credit to pay) the costs of completion of the Improvements and/or (B) apply any unexpended Deficiency Deposit to (or draw on any Collateral Letter of Credit for application of the sums drawn thereunder to) the immediate reduction of any amounts due under the Notes and the other Loan Documents. With respect to any Collateral Letter of Credit that Borrower may furnish or cause to be furnished to Administrative Agent in accordance with the terms of this Section 4.3: (a) Administrative Agent will be entitled, among other things, to make one or more draws pursuant to and in accordance with this Agreement or the Building Loan Agreement, as applicable, by presentment thereof to the issuing bank accompanied only by Administrative Agent’s clean sight-draft, it being intended that the issuing bank shall have no right to inquire as to Administrative Agent’s right to draw upon such Collateral Letter of Credit; (b) Administrative Agent shall be entitled, among other things, to draw upon each Collateral Letter of Credit pursuant to this Agreement or the Building Loan Agreement, as applicable, in whole, or in part from time to time, to the extent (without taking into account the Collateral Letter of Credit) the Loan is not In Balance, (i) in order to pay any costs not covered by Loan proceeds, Equity Balancing Contributions or Deficiency Deposits or (ii) upon any Event of Default; and (c) Administrative Agent shall have the right to draw upon any Collateral Letter of Credit within ten (10) Business Days prior to the expiration date of such Collateral Letter of Credit and each renewal and extension thereof unless, prior to such expiration date of such Collateral Letter of Credit and each renewal and extension thereof, Borrower shall have furnished a replacement, extension or renewal Collateral Letter of Credit, acceptable to Administrative Agent, it being the intent hereof that at no time shall the unexpired term of any Collateral Letter of Credit be less than ten (10) Business Days. If Administrative Agent draws upon a Collateral Letter of Credit pursuant to the terms hereof, then Administrative Agent shall hold the proceeds thereof in a Controlled Account as a Deficiency Deposit. Administrative Agent shall also be entitled to draw upon a Collateral Letter of Credit if the credit rating of the issuing bank no longer meets the standard required of a Collateral Letter of Credit and Borrower does not deliver to Administrative Agent a replacement letter of credit that otherwise conforms to the requirements for Deficiency Letters of Credit within ten (10) days following notice of the same from Administrative Agent, or if Administrative Agent reasonably believes that its rights to draw on such Collateral Letter of Credit are in imminent jeopardy of not being honored.
Appears in 2 contracts
Samples: Acquisition and Project Loan Agreement (Acadia Realty Trust), Acquisition and Project Loan Agreement (Acadia Realty Trust)
Loan Balancing. (1) Borrower represents that the Budget sets forth all anticipated costs to be incurred by Borrower in connection with the ownership, development, construction, financing, marketing, maintenance and leasing of the Improvements, Project from time to time through the Maturity Date as extended pursuant to Section 2.5 hereof. Borrower further agrees as follows:
(a) Subject to reallocations pursuant to Section 4.4 and Section 4.5, if If at any time, the projected costs anticipated to be incurred for any item of Construction Work or for the ownership, development, financing, marketing, maintenance or leasing of the Improvements through the Maturity Date exceed included in any individual Budget Line Item exceeds the amount set forth in the Budget for such item individual Budget Line Item (as the same may be adjusted in accordance with the terms of this AgreementAgreement and taking into account (provided that no “Event of Default” then exists under (and as such term is defined in) the Minimum Equity Guaranty) a credit for all portions of the Delayed Equity Contribution for which the Guarantor remains liable under the Minimum Equity Guaranty), as determined by the Administrative Agent and the Construction Consultant in their reasonable discretion (including any such determination that the undisbursed Loan proceeds allocated for the payment of future interest interest, including any Additional Interest (the “Interest Reserve”) is insufficient) based on factorsany factors whatsoever, including, but not limited to, including (1) the Administrative Agent’s projections of interest rates for period(s) up to and including the full remaining term of the Loan (and permitted extensions); (2) the effect of any Hedge Agreement; (3) cost overruns or Change Orders; or (4) failure of the Improvements to lease at the rate of absorption or otherwise at rates and terms projected by Borrower, then the Loans shall be deemed not “In Balance.”
(b) ” If the Loans are deemed not “In Balance,” then Borrower shall, at the Administrative Agent’s option, within ten (10) Business Days after written notice from the Administrative Agent either (a) deposit with the Administrative Agent an amount sufficient to cover such deficiency (a “Deficiency Deposit”), which Deficiency Deposit shall be deposited with the Administrative Agent in the Controlled Account (the “Deficiency Deposit Account”), or (b) make one or more equity contributions to be used by Borrower to pay costs that will bring the Loans In Balance (an “Equity Balancing Contribution”), or (c) deliver a Collateral Letter of Credit in an amount such that the available proceeds thereunder would be sufficient including contributions to bring the Loans In Balance pay future interest and upon which Administrative Agent shall be entitled to draw in compliance with the provisions set forth below in this Section 4.3Additional Interest. The Administrative Agent shall not be required to authorize any disbursement of any Loans before receiving (i) payment of any such Deficiency Deposit into the Deficiency Deposit Account and the prior application of such Deficiency Deposit to the payment of Project Costs so as to bring the Loans In Balance, Balance or (ii) verification (in a manner consistent with the verification of the use of other equity contributions of Borrower in accordance with Schedule 4) that an Equity Balancing Contribution has been made and the proceeds thereof used for the payment of Project Costs on account of the Improvements, so as to bring the Loans In Balance or (iii) a Collateral Letter of Credit as set forth aboveBalance. Failure of Borrower to provide satisfactory verification of an Equity Balancing Contribution or deliver a Deficiency Letter of Credit as required above shall be deemed Borrower’s election to make a Deficiency Deposit. The Deficiency Deposit shall be allocated to amounts available within the Project Loan Budget line items for Hard Costs Contingency and the Budget, as applicable, and shall be applied to the payment of Project Soft Costs on account of the Improvements prior to any further disbursement of the Loans.
(c) The balances of the applicable Contingency Fund from time to time shall not be considered deemed to be costs for purposes of determining whether the Loans are In Balance.
(2) . So long as the events referred to in the second sentence of this Section 4.3 do not exist, the Loans shall be deemed “In Balance”. If an Event of Default shall occur and be continuing, the Administrative Agent (subject to the provisions of Section 14.3) may, at its option, in addition to exercising any other rights or remedies available under the Loan Documents, (A) apply any unexpended Deficiency Deposit to (or draw on any Collateral Letter of Credit to pay) the costs of completion of the Improvements and/or (B) apply any unexpended Deficiency Deposit to (or draw on any Collateral Letter of Credit for application of the sums drawn thereunder to) the immediate reduction of any amounts due under the Notes and the other Loan Documents. With respect to any Collateral Letter of Credit that Borrower may furnish or cause to be furnished to Administrative Agent in accordance with the terms of this Section 4.3:
(a) Administrative Agent will be entitled, among other things, to make one or more draws pursuant to and in accordance with this Agreement or the Building Loan Agreement, as applicable, by presentment thereof to the issuing bank accompanied only by Administrative Agent’s clean sight-draft, it being intended that the issuing bank shall have no right to inquire as to Administrative Agent’s right to draw upon such Collateral Letter of Credit;
(b) Administrative Agent shall be entitled, among other things, to draw upon each Collateral Letter of Credit pursuant to this Agreement or the Building Loan Agreement, as applicable, in whole, or in part from time to time, to the extent (without taking into account the Collateral Letter of Credit) the Loan is not In Balance, (i) in order to pay any costs not covered by Loan proceeds, Equity Balancing Contributions or Deficiency Deposits or (ii) upon any Event of Default; and
(c) Administrative Agent shall have the right to draw upon any Collateral Letter of Credit within ten (10) Business Days prior to the expiration date of such Collateral Letter of Credit and each renewal and extension thereof unless, prior to such expiration date of such Collateral Letter of Credit and each renewal and extension thereof, Borrower shall have furnished a replacement, extension or renewal Collateral Letter of Credit, acceptable to Administrative Agent, it being the intent hereof that at no time shall the unexpired term of any Collateral Letter of Credit be less than ten (10) Business Days. If Administrative Agent draws upon a Collateral Letter of Credit pursuant to the terms hereof, then Administrative Agent shall hold the proceeds thereof in a Controlled Account as a Deficiency Deposit. Administrative Agent shall also be entitled to draw upon a Collateral Letter of Credit if the credit rating of the issuing bank no longer meets the standard required of a Collateral Letter of Credit and Borrower does not deliver to Administrative Agent a replacement letter of credit that otherwise conforms to the requirements for Deficiency Letters of Credit within ten (10) days following notice of the same from Administrative Agent, or if Administrative Agent reasonably believes that its rights to draw on such Collateral Letter of Credit are in imminent jeopardy of not being honored.
Appears in 2 contracts
Samples: Construction Loan Agreement, Construction Loan Agreement (Maguire Properties Inc)
Loan Balancing. (1) Borrower represents that the Budget sets forth all anticipated costs to be incurred by Borrower in connection with the ownership, development, construction, financing, marketing, maintenance At any time and leasing of the Improvements, from time to time through during the Maturity Date as extended pursuant term of the Loan, Lender shall have the right (but not the obligation) to Section 2.5 hereof. notify Borrower further agrees as follows:
that, in Lxxxxx’s sole but reasonable judgment, (a) Subject to reallocations the cost of all Total Project‑Related Costs that remain unpaid at the time in question exceeds the undisbursed proceeds of the Loan plus any sums deposited with Lender pursuant to this Section 4.4 2.14 and not previously disbursed or (b) the cost of completing any Line Item in the Project Budget exceeds the remaining undisbursed portion of the Building Loan allocated to such Line Item in the Project Budget plus any sums deposited with Lender pursuant to this Section 4.5, if 2.14 to pay for such deficiency and not previously disbursed (the amount of any such deficiency under clauses (a) or (b) being herein referred to as the “Shortfall”). If Lender at any timetime shall so notify Borrower, Borrower shall, at its option, either individually or in combination (i) within ten (10) days of Lender’s notification as aforesaid, deposit with Lender an amount equal to such Shortfall, which Lender may from time to time apply, or allow Borrower to apply, to such costs; (ii) pay for such costs, as incurred, in the projected costs anticipated amount of such Shortfall so that the amount of the Building Loan which remains to be incurred for any item of Construction Work or for the ownership, development, financing, marketing, maintenance or leasing disbursed shall be sufficient to pay all of the Improvements through remaining Total Project‑Related Costs, and Borrower shall furnish Lender with such evidence thereof as Lender shall require; (iii) with respect to any Shortfall arising pursuant to clause (b) above, to the Maturity Date exceed extent permitted under Section 2.11(a), allocate the amount set forth Building Loan Contingency (Hard Costs) or Building Loan Contingency (Soft Costs), to the extent applicable, to the Shortfall and (iv) with respect to any Shortfall arising pursuant to clause (b) above, to the extent permitted under Section 2.11(b), reallocate cost savings from the Project Budget in respect of the Budget for such item Building Loan (as the same may be adjusted or other reallocations which are approved by Lxxxxx, in its reasonable discretion) in accordance with the terms of this Agreement), as determined by Administrative Agent . Borrower hereby agrees that Lxxxxx shall have a lien on and the Construction Consultant security interest in their reasonable discretion (including any such determination that the undisbursed Loan proceeds allocated for the payment of future interest (the “Interest Reserve”) is insufficient) based on factors, including, but not limited to, (1) Administrative Agent’s projections of interest rates for period(s) up sums deposited pursuant to and including the full remaining term of the Loan (and permitted extensions); (2) the effect of any Hedge Agreement; (3) cost overruns or Change Orders; or (4) failure of the Improvements to lease at the rate of absorption or otherwise at rates and terms projected by Borrower, then the Loans shall be deemed not “In Balance.”
(b) If the Loans are deemed not “In Balance,” then Borrower shall, at Administrative Agent’s option, within ten (10) Business Days after written notice from Administrative Agent either (a) deposit with Administrative Agent an amount sufficient to cover such deficiency (a “Deficiency Deposit”), which Deficiency Deposit shall be deposited with Administrative Agent in the Controlled Account (the “Deficiency Deposit Account”), (b) make one or more equity contributions to be used by Borrower to pay costs that will bring the Loans In Balance (an “Equity Balancing Contribution”), or (c) deliver a Collateral Letter of Credit in an amount such that the available proceeds thereunder would be sufficient to bring the Loans In Balance and upon which Administrative Agent shall be entitled to draw in compliance with the provisions set forth below in this Section 4.3. Administrative Agent shall not be required to authorize any disbursement of any Loans before receiving clause (i) payment of any such Deficiency Deposit into the Deficiency Deposit Account above and the prior application of such Deficiency Deposit to the payment of Project Costs so as to bring the Loans In Balance, (ii) verification that an Equity Balancing Contribution has been made and the proceeds thereof used for the payment of Project Costs on account of the Improvements, so as to bring the Loans In Balance or (iii) a Collateral Letter of Credit as set forth above. Failure of Borrower to provide satisfactory verification of an Equity Balancing Contribution or deliver a Deficiency Letter of Credit as required above shall be deemed Borrower’s election to make a Deficiency Deposit. The Deficiency Deposit shall be allocated to the Project Loan Budget and the Budget, as applicable, and shall be applied to the payment of Project Costs on account of the Improvements prior to any further disbursement of the Loans.
(c) The balances of the applicable Contingency Fund from time to time shall not be considered for purposes of determining whether the Loans are In Balance.
(2) If an Event of Default shall occur and be continuing, Administrative Agent (subject to the provisions of Section 14.3) may, at its option, in addition to exercising any other rights or remedies available under the Loan Documents, (A) apply any unexpended Deficiency Deposit to (or draw on any Collateral Letter of Credit to pay) the costs of completion of the Improvements and/or (B) apply any unexpended Deficiency Deposit to (or draw on any Collateral Letter of Credit for application of the sums drawn thereunder to) the immediate reduction of any amounts due under the Notes and the other Loan Documents. With respect to any Collateral Letter of Credit that Borrower may furnish or cause to be furnished to Administrative Agent in accordance with the terms of this Section 4.3:
(a) Administrative Agent will be entitled, among other things, to make one or more draws pursuant to and in accordance with this Agreement or the Building Loan Agreement, as applicable, by presentment thereof to the issuing bank accompanied only by Administrative Agent’s clean sight-draft, it being intended that the issuing bank shall have no right to inquire withdraw any such sums except for the payment of the aforesaid costs as approved by Lxxxxx. Lender shall have no obligation to Administrative Agent’s right make any further advances of proceeds of the Loan until the sums required to draw upon such Collateral Letter of Credit;
(b) Administrative Agent shall be entitled, among other things, to draw upon each Collateral Letter of Credit deposited pursuant to this Agreement or clause (i) above have been exhausted, Borrower has actually paid such Total Project‑Related Costs pursuant to clause (ii) above and, in any such case, the Building Loan Agreement, is back “in balance”. Any such sums not used as applicable, provided in whole, or in part from time said clause (i) shall be released to time, Borrower when and to the extent (without taking into account that Lender reasonably determines that the Collateral Letter amount thereof is more than the excess, if any, of Credit) the Loan is not In Balanceremaining Total Project‑Related Costs over the undisbursed balance of the Loan, (i) in order to pay any costs not covered by Loan proceedsprovided, Equity Balancing Contributions or Deficiency Deposits or (ii) upon any however, that should an Event of Default; and
(c) Administrative Agent shall have the right to draw upon any Collateral Letter of Credit within ten (10) Business Days prior Default exist, Lender shall, at Lender’s election, apply such amounts either to the expiration date of such Collateral Letter of Credit and each renewal and extension thereof unless, prior to such expiration date of such Collateral Letter of Credit and each renewal and extension thereof, Borrower shall have furnished a replacement, extension remaining Total Project‑Related Costs or renewal Collateral Letter of Credit, acceptable to Administrative Agent, it being the intent hereof that at no time shall the unexpired term of any Collateral Letter of Credit be less than ten (10) Business Days. If Administrative Agent draws upon a Collateral Letter of Credit pursuant to the terms hereof, then Administrative Agent shall hold immediate reduction of outstanding principal and/or interest under the proceeds thereof in a Controlled Account as a Deficiency Deposit. Administrative Agent shall also be entitled to draw upon a Collateral Letter of Credit if the credit rating of the issuing bank no longer meets the standard required of a Collateral Letter of Credit and Borrower does not deliver to Administrative Agent a replacement letter of credit that otherwise conforms to the requirements for Deficiency Letters of Credit within ten (10) days following notice of the same from Administrative Agent, or if Administrative Agent reasonably believes that its rights to draw on such Collateral Letter of Credit are in imminent jeopardy of not being honoredNote.
Appears in 1 contract
Samples: Building Loan Agreement (ACRES Commercial Realty Corp.)
Loan Balancing. (1) The Lenders shall have no obligation to make a Revolving Loan advances and the Project Administrative Agent has no obligation to disburse any Funds if in the Project Administrative Agent's reasonable opinion the Revolving Loans are not "in balance"; i.e., the undisbursed balance of the Revolving Loans, plus any undisbursed Funds previously deposited by the Borrower represents that the Budget sets forth all anticipated costs to be incurred by Borrower in connection with the ownership, development, construction, financing, marketing, maintenance and leasing of the Improvements, from time to time through the Maturity Date as extended pursuant to Section 2.5 hereof. Borrower further agrees as follows:
(a) Subject to reallocations pursuant to Section 4.4 and Section 4.5Project Administrative Agent, if at any timeany, are not sufficient to pay all costs necessary to complete the projected costs anticipated to be incurred for any item Project (including without limitation the payment of Construction Work or for interest on the ownership, development, financing, marketing, maintenance or leasing of the Improvements through the Maturity Date exceed the amount set forth in the Budget for such item (as the same may be adjusted Revolving Loans) in accordance with the terms approved Plans and Specifications and the Project Budget, free and clear of this Agreement)all liens, as determined by encumbrances and conditional sales contracts, whether the deficiency is attributable to changes in the work or in the Plans and Specifications or to any other cause. If at any time the Project Administrative Agent and determines the Construction Consultant in their reasonable discretion (including any such determination that the undisbursed Loan proceeds allocated for the payment of future interest (the “Interest Reserve”) is insufficient) based on factors, including, but not limited to, (1) Administrative Agent’s projections of interest rates for period(s) up to and including the full remaining term of the Loan (and permitted extensions); (2) the effect of any Hedge Agreement; (3) cost overruns or Change Orders; or (4) failure of the Improvements to lease at the rate of absorption or otherwise at rates and terms projected by Borrower, then the Loans shall be deemed not “In Balance.”
(b) If the Revolving Loans are deemed not “In Balance,” then Borrower shall, at Administrative Agent’s optionin balance, within ten five (105) Business Days days after written notice from demand, the Borrower will deposit with the Project Administrative Agent either (a) deposit with Administrative Agent an the amount sufficient necessary to cover such deficiency (a “Deficiency Deposit”)"balance" the Revolving Loans, which Deficiency Deposit shall be and all Funds so deposited with Administrative Agent in the Controlled Account (the “Deficiency Deposit Account”), (b) make one or more equity contributions to be used by Borrower to pay costs that will bring the Loans In Balance (an “Equity Balancing Contribution”), or (c) deliver a Collateral Letter of Credit in an amount such that the available proceeds thereunder would be sufficient to bring the Loans In Balance and upon which Project Administrative Agent shall be entitled to draw in compliance with the provisions set forth below in this Section 4.3. Administrative Agent shall not be required to authorize any disbursement of any Loans before receiving (i) payment of any such Deficiency Deposit into the Deficiency Deposit Account held and the prior application of such Deficiency Deposit to the payment of Project Costs so as to bring the Loans In Balance, (ii) verification that an Equity Balancing Contribution has been made and the proceeds thereof used for the payment of Project Costs on account of the Improvements, so as to bring the Loans In Balance or (iii) a Collateral Letter of Credit as set forth above. Failure of Borrower to provide satisfactory verification of an Equity Balancing Contribution or deliver a Deficiency Letter of Credit as required above shall be deemed Borrower’s election to make a Deficiency Deposit. The Deficiency Deposit shall be allocated to disbursed by the Project Loan Budget and the Budget, as applicable, and shall be applied to the payment of Project Costs on account of the Improvements prior to any further disbursement of the Loans.
(c) The balances of the applicable Contingency Fund from time to time shall not be considered for purposes of determining whether the Loans are In Balance.
(2) If an Event of Default shall occur and be continuing, Administrative Agent (subject to the provisions of Section 14.3) may, at its option, in addition to exercising any other rights or remedies available under the Loan Documents, (A) apply any unexpended Deficiency Deposit to (or draw on any Collateral Letter of Credit to pay) the costs of completion of the Improvements and/or (B) apply any unexpended Deficiency Deposit to (or draw on any Collateral Letter of Credit for application of the sums drawn thereunder to) the immediate reduction of any amounts due under the Notes and the other Loan Documents. With respect to any Collateral Letter of Credit that Borrower may furnish or cause to be furnished to Administrative Agent in accordance with this Schedule 4.3 prior to making any additional disbursement of Funds. If the terms of this Section 4.3:
(a) Project Administrative Agent will be entitledmakes such demand, among other things, to make one or more draws pursuant to and in accordance with this Agreement or the Building Loan Agreement, as applicable, by presentment thereof to the issuing bank accompanied only by Administrative Agent’s clean sight-draft, it being intended that the issuing bank Lenders shall have no right obligation to inquire as to Administrative Agent’s right to draw upon such Collateral Letter of Credit;
(b) Administrative Agent shall be entitled, among other things, to draw upon each Collateral Letter of Credit pursuant to this Agreement or make further Revolving Loan advances and the Building Loan Agreement, as applicable, in whole, or in part from time to time, to the extent (without taking into account the Collateral Letter of Credit) the Loan is not In Balance, (i) in order to pay any costs not covered by Loan proceeds, Equity Balancing Contributions or Deficiency Deposits or (ii) upon any Event of Default; and
(c) Project Administrative Agent shall have no obligation to disburse any Funds until such additional funds are deposited with the right to draw upon any Collateral Letter of Credit within ten (10) Business Days prior Project Administrative Agent by the Borrower. Each Draw Request or other request for disbursement submitted to the expiration date of such Collateral Letter of Credit and each renewal and extension thereof unless, prior to such expiration date of such Collateral Letter of Credit and each renewal and extension thereof, Borrower shall have furnished a replacement, extension or renewal Collateral Letter of Credit, acceptable to Administrative Agent, it being the intent hereof that at no time shall the unexpired term of any Collateral Letter of Credit be less than ten (10) Business Days. If Project Administrative Agent draws upon a Collateral Letter of Credit pursuant will constitute the Borrower's representation and warranty to the terms hereof, then Project Administrative Agent shall hold and the proceeds thereof Lenders that the Revolving Loans are "in a Controlled Account as a Deficiency Deposit. Administrative Agent shall also be entitled to draw upon a Collateral Letter of Credit if the credit rating of the issuing bank no longer meets the standard required of a Collateral Letter of Credit and Borrower does not deliver to Administrative Agent a replacement letter of credit that otherwise conforms to the requirements for Deficiency Letters of Credit within ten (10) days following notice of the same from Administrative Agent, or if Administrative Agent reasonably believes that its rights to draw on such Collateral Letter of Credit are in imminent jeopardy of not being honoredbalance".
Appears in 1 contract
Samples: Credit Agreement (Nordstrom Inc)
Loan Balancing. (1) Borrower represents that the Budget sets forth all anticipated costs to be incurred by Borrower in connection with the ownership, development, construction, financing, marketing, maintenance and leasing of the Improvements, from time to time through the Maturity Date as extended pursuant to Section 2.5 hereof. Borrower further agrees as follows:
(a) Subject to reallocations pursuant to Section 4.4 and Section 4.5, if If at any timetime Administrative Agent notifies -------------- Borrower that, in Administrative Agent's sole judgment following consultation with Borrower, the projected costs anticipated to be incurred for any item of Construction Work or for the ownership, development, financing, marketing, maintenance or leasing of the Improvements through the Maturity Date exceed the amount set forth in the Budget for such item (as the same may be adjusted in accordance with the terms of this Agreement), as determined by Administrative Agent and the Construction Consultant in their reasonable discretion (including any such determination that the undisbursed Loan proceeds allocated for the payment of future interest (the “Interest Reserve”) is insufficient) based on factors, including, but not limited to, (1) Administrative Agent’s projections of interest rates for period(s) up to and including the full remaining term balance of the Loan (is insufficient to pay the remaining Direct and permitted extensions); (2) the effect of any Hedge Agreement; (3) cost overruns or Change Orders; or (4) failure of the Improvements to lease at the rate of absorption or otherwise at rates and terms projected by BorrowerIndirect Costs, then the Loans shall be deemed not “In Balance.”
(b) If the Loans are deemed not “In Balance,” then Borrower shall, at Administrative Agent’s its option, either (i) within ten (10) Business Days after written notice from days of Administrative Agent either (a) Agent's notification as aforesaid, deposit with Administrative Agent an amount sufficient equal to cover such deficiency, which Administrative Agent may from time to time apply, or allow Borrower to apply, to such Costs or (ii) pay for such Costs, as incurred, in the amount of such deficiency (a “Deficiency Deposit”), so that the amount of the Loan which Deficiency Deposit shall be deposited with Administrative Agent in the Controlled Account (the “Deficiency Deposit Account”), (b) make one or more equity contributions remains to be used by Borrower to pay costs that will bring the Loans In Balance (an “Equity Balancing Contribution”), or (c) deliver a Collateral Letter of Credit in an amount such that the available proceeds thereunder would disbursed shall be sufficient to bring the Loans In Balance pay all remaining Direct and upon which Indirect Costs, and Borrower shall furnish Administrative Agent with such evidence thereof as Administrative Agent shall be entitled to draw in compliance with the provisions set forth below in this Section 4.3require. Borrower hereby agrees that Administrative Agent shall not be required have a lien on and security interest in, for the benefit of Lenders, any sums deposited pursuant to authorize any disbursement of any Loans before receiving clause (i) payment of above and that Borrower shall have no right to withdraw any such Deficiency Deposit into the Deficiency Deposit Account and the prior application of such Deficiency Deposit to the payment of Project Costs so as to bring the Loans In Balance, (ii) verification that an Equity Balancing Contribution has been made and the proceeds thereof used sums except for the payment of Project the aforesaid Costs on account as approved by Administrative Agent. Lenders shall have no obligation to make any further advances of proceeds of the ImprovementsLoan until the sums required to be deposited pursuant to clause (i) above have been exhausted or until Borrower has actually paid such Direct and Indirect Costs pursuant to clause (ii) above, so as to bring the Loans In Balance or case may be, and, in either such case, the Loan is back "in balance". Any such sums not used as provided in said clause (iiii) a Collateral Letter of Credit as set forth above. Failure of Borrower to provide satisfactory verification of an Equity Balancing Contribution or deliver a Deficiency Letter of Credit as required above shall be deemed Borrower’s election released to make a Deficiency Deposit. The Deficiency Deposit shall be allocated Borrower when and to the Project Loan Budget and extent that Administrative Agent determines that the Budgetamount thereof is more than the excess, as applicableif any, and shall be applied to the payment of Project Costs on account of the Improvements prior to any further disbursement of the Loans.
(c) The balances of the applicable Contingency Fund from time to time shall not be considered for purposes of determining whether the Loans are In Balance.
(2) If an Event of Default shall occur and be continuing, Administrative Agent (subject to the provisions of Section 14.3) may, at its option, in addition to exercising any other rights or remedies available under the Loan Documents, (A) apply any unexpended Deficiency Deposit to (or draw on any Collateral Letter of Credit to pay) the costs total remaining Costs of completion of the Improvements and/or (B) apply any unexpended Deficiency Deposit to (or draw on any Collateral Letter of Credit for application over the undisbursed balance of the sums drawn thereunder to) Loan; provided, however, that -------- ------- should an Event of Default occur, Administrative Agent shall, at the option of the Required Lenders, apply such amounts either to the Costs of completion of the Improvements or to the immediate reduction of any amounts due outstanding principal and/or interest under the Notes and the other Loan Documents. With respect to any Collateral Letter of Credit that Borrower may furnish or cause to be furnished to Administrative Agent in accordance with the terms of this Section 4.3:
(a) Administrative Agent will be entitled, among other things, to make one or more draws pursuant to and in accordance with this Agreement or the Building Loan Agreement, as applicable, by presentment thereof to the issuing bank accompanied only by Administrative Agent’s clean sight-draft, it being intended that the issuing bank shall have no right to inquire as to Administrative Agent’s right to draw upon such Collateral Letter of Credit;
(b) Administrative Agent shall be entitled, among other things, to draw upon each Collateral Letter of Credit pursuant to this Agreement or the Building Loan Agreement, as applicable, in whole, or in part from time to time, to the extent (without taking into account the Collateral Letter of Credit) the Loan is not In Balance, (i) in order to pay any costs not covered by Loan proceeds, Equity Balancing Contributions or Deficiency Deposits or (ii) upon any Event of Default; and
(c) Administrative Agent shall have the right to draw upon any Collateral Letter of Credit within ten (10) Business Days prior to the expiration date of such Collateral Letter of Credit and each renewal and extension thereof unless, prior to such expiration date of such Collateral Letter of Credit and each renewal and extension thereof, Borrower shall have furnished a replacement, extension or renewal Collateral Letter of Credit, acceptable to Administrative Agent, it being the intent hereof that at no time shall the unexpired term of any Collateral Letter of Credit be less than ten (10) Business Days. If Administrative Agent draws upon a Collateral Letter of Credit pursuant to the terms hereof, then Administrative Agent shall hold the proceeds thereof in a Controlled Account as a Deficiency Deposit. Administrative Agent shall also be entitled to draw upon a Collateral Letter of Credit if the credit rating of the issuing bank no longer meets the standard required of a Collateral Letter of Credit and Borrower does not deliver to Administrative Agent a replacement letter of credit that otherwise conforms to the requirements for Deficiency Letters of Credit within ten (10) days following notice of the same from Administrative Agent, or if Administrative Agent reasonably believes that its rights to draw on such Collateral Letter of Credit are in imminent jeopardy of not being honoredNotes.
Appears in 1 contract
Samples: Building Loan Agreement (Federal Realty Investment Trust)
Loan Balancing. (1) Borrower represents that the Budget sets forth all anticipated costs to be incurred by Borrower As agreed in connection with the ownership, development, construction, financing, marketing, maintenance and leasing Section 7.8 of the ImprovementsWork Letter, from time -------------- ----------- Lender is under no obligation to time through the Maturity Date as extended pursuant to Section 2.5 hereof. Borrower further agrees as follows:
(a) Subject to reallocations pursuant to Section 4.4 and Section 4.5, if at bear any time, the projected costs anticipated to be incurred for any item of Construction Work or for the ownership, development, financing, marketing, maintenance or leasing portion of the Improvements through Greenhouse Costs and has only the Maturity Date exceed obligation to disburse proceeds of the amount set forth in the Budget for such item (as the same may be adjusted Loan in accordance with the terms and conditions of this Agreement)the Loan Documents. Lender shall not be obligated to disburse any Construction Holdback Advance if Lender reasonably determines at that time that the Loan is not "in balance" i.e, the remaining Greenhouse Costs ---- exceed the remaining undisbursed proceeds of the Loan. The Loan shall be "in balance" only at such times as determined by Administrative Agent and Borrower has invested sufficient funds into the payment of Greenhouse Costs so that, in Lender's reasonable judgment, the undisbursed portion of the Holdback for Construction Consultant in their reasonable discretion (including any such previously unallocated contingency funds, if any) shall be sufficient to complete construction of and maintain the Greenhouse and pay all Greenhouse Costs until repayment in full of the Loan. The determination as to whether the Loan is "in balance" may be made by Lender at any time, including with each Notice of Advance. Upon at least five Business Days' written notice from Lender that the undisbursed Loan proceeds allocated is not "in balance", Borrower shall either (x) deposit with Lender, in cash or cash equivalents, the amount that Lender, in its reasonable opinion, deems necessary to put the Loan "in balance" or (y) furnish Lender with paid invoices, bills, and receipts indicating that Borrower has paid, from Borrower's own funds, for the Greenhouse Costs in a sufficient amount to put the Loan "in balance". Any amounts that are deposited with Lender to put the Loan "in balance" shall be the next funds disbursed by Lender, subject to the terms and conditions of this Note. Lender shall pay no interest on such deposited funds. Any failure or refusal by Borrower to comply with the provisions of this subparagraph shall be deemed a material default under this Note and an Event of Default under the Loan Documents. If upon substantial completion of the Greenhouse and the payment of future interest (the “Interest Reserve”) is insufficient) based on factors, including, but not limited to, (1) Administrative Agent’s projections of interest rates for period(s) up to and including the full remaining term all sums due in connection therewith there remain any undisbursed proceeds of the Loan (and permitted extensions); (2) the effect of any Hedge Agreement; (3) cost overruns or Change Orders; or (4) failure of the Improvements to lease at the rate of absorption or otherwise at rates and terms projected by BorrowerLoan, then the Loans shall be deemed not “In Balance.”
(b) If the Loans are deemed not “In Balance,” then Borrower shall, at Administrative Agent’s option, within ten (10) Business Days after written notice from Administrative Agent either (a) deposit with Administrative Agent an amount sufficient to cover such deficiency (a “Deficiency Deposit”), which Deficiency Deposit shall be deposited with Administrative Agent in the Controlled Account (the “Deficiency Deposit Account”), (b) make one or more equity contributions to be used by Borrower to pay costs that will bring the Loans In Balance (an “Equity Balancing Contribution”), or (c) deliver a Collateral Letter of Credit in an amount such that the available proceeds thereunder would be sufficient to bring the Loans In Balance and upon which Administrative Agent shall be entitled to draw in compliance with the provisions set forth below in this Section 4.3. Administrative Agent shall not be required to authorize any disbursement of any Loans before receiving (i) payment of any such Deficiency Deposit into the Deficiency Deposit Account and the prior application of such Deficiency Deposit to the payment of Project Costs so as to bring the Loans In Balance, (ii) verification that an Equity Balancing Contribution has been made and the undisbursed proceeds thereof used for the payment of Project Costs on account of the Improvements, so as to bring the Loans In Balance or (iii) a Collateral Letter of Credit as set forth above. Failure of Borrower to provide satisfactory verification of an Equity Balancing Contribution or deliver a Deficiency Letter of Credit as required above shall be deemed Borrower’s election to make a Deficiency Deposit. The Deficiency Deposit shall be allocated to the Project Loan Budget and the Budget, as applicable, and shall be applied to the payment of Project Costs on account of the Improvements prior to any further disbursement of the Loans.
(c) The balances of the applicable Contingency Fund from time to time shall not be considered for purposes of determining whether the Loans are In Balance.
(2) If an Event of Default shall occur and be continuing, Administrative Agent (subject to the provisions of Section 14.3) may, at its option, in addition to exercising any other rights or remedies available under the Loan Documents, (A) apply any unexpended Deficiency Deposit to (or draw on any Collateral Letter of Credit to pay) the costs of completion of the Improvements and/or (B) apply any unexpended Deficiency Deposit to (or draw on any Collateral Letter of Credit for application of the sums drawn thereunder to) the immediate reduction of any amounts due under the Notes and the other Loan Documents. With respect to any Collateral Letter of Credit that Borrower may furnish or cause to be furnished to Administrative Agent in accordance with the terms of this Section 4.3:
(a) Administrative Agent will be entitled, among other things, to make one or more draws pursuant to and in accordance with this Agreement or the Building Loan Agreement, as applicable, by presentment thereof to the issuing bank accompanied only by Administrative Agent’s clean sight-draft, it being intended that the issuing bank shall have no right to inquire as to Administrative Agent’s right to draw upon such Collateral Letter of Credit;
(b) Administrative Agent shall be entitled, among other things, to draw upon each Collateral Letter of Credit pursuant to this Agreement or the Building Loan Agreement, as applicable, in whole, or in part from time to time, solely to the extent (without taking into account the Collateral Letter of Credit) the Loan is not In Balance, (i) any deposits that Borrower actually made with Lender in order to pay any costs not covered by put the Loan proceeds, Equity Balancing Contributions or Deficiency Deposits or (ii) upon any Event of Default; and
(c) Administrative Agent shall have the right to draw upon any Collateral Letter of Credit within ten (10) Business Days prior to the expiration date of such Collateral Letter of Credit and each renewal and extension thereof unless, prior to such expiration date of such Collateral Letter of Credit and each renewal and extension thereof, Borrower shall have furnished a replacement, extension or renewal Collateral Letter of Credit, acceptable to Administrative Agent, it being the intent hereof that at no time shall the unexpired term of any Collateral Letter of Credit be less than ten (10) Business Days. If Administrative Agent draws upon a Collateral Letter of Credit pursuant to the terms hereof, then Administrative Agent shall hold the proceeds thereof "in a Controlled Account as a Deficiency Deposit. Administrative Agent shall also be entitled to draw upon a Collateral Letter of Credit if the credit rating of the issuing bank no longer meets the standard required of a Collateral Letter of Credit and Borrower does not deliver to Administrative Agent a replacement letter of credit that otherwise conforms to the requirements for Deficiency Letters of Credit within ten (10) days following notice of the same from Administrative Agent, or if Administrative Agent reasonably believes that its rights to draw on such Collateral Letter of Credit are in imminent jeopardy of not being honoredbalance".
Appears in 1 contract
Loan Balancing. (1) Borrower represents that Notwithstanding anything contained herein to the Budget sets forth all anticipated costs to be incurred by Borrower in connection with the ownershipcontrary, development, construction, financing, marketing, maintenance and leasing of the Improvements, if at any time or from time to time through during the Maturity Date as extended pursuant term of this Agreement, in the Agent’s sole (but good faith) judgment and opinion, the unfunded balance of the Loan together with Retainage, the amount of the Required Equity and the amount of the Mezzanine Financing is insufficient to Section 2.5 hereof. Borrower further agrees as follows:
pay the remaining Hard Costs and any and all other costs and expenses associated with the construction of the Project set forth in the Approved Construction Budget (a“Soft Costs”) Subject to after taking into account all Construction Contingencies and reallocations pursuant to Section 4.4 and Section 4.5, if at any time7.1.9 hereof (the amount of such deficiency, the projected costs anticipated “Shortfall”), no further Advances shall be made by the Lenders until the Borrower either individually or in combination (a) deposits with the Agent the Shortfall, (b) infuses the Shortfall into the Project by payment of expenses in cash or other manner reasonably satisfactory to the Agent and delivers to the Agent evidence thereof reasonably satisfactory to the Agent, (c) provides the Agent with other assurance reasonably satisfactory to the Agent (such as a letter of credit or guaranty) that the Shortfall will be incurred for any item of funded as and when needed, (d) to the extent permitted under Section 2.1.4 hereof, allocates the Construction Work Contingency to the Shortfall and/or (e) to the extent permitted under Section 7.1.9 hereof, reallocates cost savings from the Approved Construction Budget (or for other reallocations which are approved by the ownershipAgent, development, financing, marketing, maintenance or leasing of the Improvements through the Maturity Date exceed the amount set forth in the Budget for such item (as the same may be adjusted its sole discretion) in accordance with the terms of this Agreement). The Borrower hereby agrees that the Agent shall have a lien on and security interest in, as determined by Administrative Agent for the benefit of Lenders, any sums deposited pursuant to clauses (a) and (c) above and that the Construction Consultant in their reasonable discretion (including Borrower shall have no right to withdraw any such determination that the undisbursed Loan proceeds allocated sums except for the payment of future interest (Construction Costs and the “Interest Reserve”) is insufficient) based on factors, including, but not limited to, (1) Administrative Agent’s projections of interest rates for period(s) up to and including the full remaining term of the Loan (and permitted extensions); (2) the effect of any Hedge Agreement; (3) cost overruns or Change Orders; or (4) failure of the Improvements to lease at the rate of absorption or otherwise at rates and terms projected by Borrower, then the Loans Agent agrees that all such sums shall be deemed not “In Balance.”
(b) If advanced pursuant to Draw Requests submitted by the Loans are deemed not “In Balance,” then Borrower shall, at Administrative Agent’s option, within ten (10) Business Days after written notice from Administrative Agent either Borrower. Any such sums deposited in accordance with said clause (a) deposit with Administrative Agent an amount sufficient to cover such deficiency (a “Deficiency Deposit”), which Deficiency Deposit shall be deposited with Administrative Agent in the Controlled Account (the “Deficiency Deposit Account”), (b) make one or more equity contributions to be used by Borrower to pay costs that will bring the Loans In Balance (an “Equity Balancing Contribution”), or (c) deliver a Collateral Letter of Credit in an amount such shall be released to the Borrower when and to the extent that the available proceeds thereunder would be sufficient to bring Agent reasonably determines that the Loans In Balance and upon which Administrative Agent shall be entitled to draw in compliance with amount thereof is more than the provisions set forth below in this Section 4.3. Administrative Agent shall not be required to authorize any disbursement of any Loans before receiving (i) payment of any such Deficiency Deposit into the Deficiency Deposit Account and the prior application of such Deficiency Deposit to the payment of Project Costs so as to bring the Loans In Balancethen-existing Shortfall; provided, (ii) verification however, that an Equity Balancing Contribution has been made and the proceeds thereof used for the payment of Project Costs on account of the Improvements, so as to bring the Loans In Balance or (iii) a Collateral Letter of Credit as set forth above. Failure of Borrower to provide satisfactory verification of an Equity Balancing Contribution or deliver a Deficiency Letter of Credit as required above shall be deemed Borrower’s election to make a Deficiency Deposit. The Deficiency Deposit shall be allocated to the Project Loan Budget and the Budget, as applicable, and shall be applied to the payment of Project Costs on account of the Improvements prior to any further disbursement of the Loans.
(c) The balances of the applicable Contingency Fund from time to time shall not be considered for purposes of determining whether the Loans are In Balance.
(2) If if an Event of Default shall occur and be continuingoccurs, Administrative the Agent (subject to the provisions of Section 14.3) mayshall, at its optionthe option of the Required Lenders, in addition apply such amounts either to exercising any other rights or remedies available under the Loan Documents, (A) apply any unexpended Deficiency Deposit to (or draw on any Collateral Letter of Credit to pay) the costs of completion of the Improvements and/or (B) apply any unexpended Deficiency Deposit or to (or draw on any Collateral Letter of Credit for application of the sums drawn thereunder to) the immediate reduction of any amounts due outstanding principal and/or interest under the Notes and (it being agreed that such application shall not result in an obligation of the other Loan DocumentsBorrower to pay Breakage Costs). With respect Any funds remaining in the Construction Contingency after Substantial Completion has been achieved shall be used to reimburse the Borrower for any Collateral Letter of Credit that Shortfall funded by the Borrower may furnish or cause to be furnished to Administrative Agent in accordance with the terms of under this Section 4.3:
(a) Administrative Agent will be entitled, among other things, to make one or more draws pursuant to and in accordance with this Agreement or the Building Loan Agreement, as applicable, by presentment thereof to the issuing bank accompanied only by Administrative Agent’s clean sight-draft, it being intended that the issuing bank shall have no right to inquire as to Administrative Agent’s right to draw upon such Collateral Letter of Credit;
(b) Administrative Agent shall be entitled, among other things, to draw upon each Collateral Letter of Credit pursuant to this Agreement or the Building Loan Agreement, as applicable, in whole, or in part from time to time, to the extent (without taking into account the Collateral Letter of Credit) the Loan is not In Balance, (i) in order to pay any costs not covered by Loan proceeds, Equity Balancing Contributions or Deficiency Deposits or (ii) upon any Event of Default; and
(c) Administrative Agent shall have the right to draw upon any Collateral Letter of Credit within ten (10) Business Days prior to the expiration date of such Collateral Letter of Credit and each renewal and extension thereof unless, prior to such expiration date of such Collateral Letter of Credit and each renewal and extension thereof, Borrower shall have furnished a replacement, extension or renewal Collateral Letter of Credit, acceptable to Administrative Agent, it being the intent hereof that at no time shall the unexpired term of any Collateral Letter of Credit be less than ten (10) Business Days. If Administrative Agent draws upon a Collateral Letter of Credit pursuant to the terms hereof, then Administrative Agent shall hold the proceeds thereof in a Controlled Account as a Deficiency Deposit. Administrative Agent shall also be entitled to draw upon a Collateral Letter of Credit if the credit rating of the issuing bank no longer meets the standard required of a Collateral Letter of Credit and Borrower does not deliver to Administrative Agent a replacement letter of credit that otherwise conforms to the requirements for Deficiency Letters of Credit within ten (10) days following notice of the same from Administrative Agent, or if Administrative Agent reasonably believes that its rights to draw on such Collateral Letter of Credit are in imminent jeopardy of not being honored2.1.7.
Appears in 1 contract
Loan Balancing. Notwithstanding anything contained herein to the contrary, if at any time or from time to time during the term of this Agreement, in the Agent’s sole (1but good faith) Borrower represents that judgment and opinion, the Budget sets forth all anticipated costs to be incurred by Borrower in connection unfunded balance of the Loan together with the ownershipRequired Equity, developmentthe Interest Equity, construction, financing, marketing, maintenance Retainage and the then-applicable Senior Loan Amount is insufficient to pay the remaining Hard Costs and any and all other costs and expenses (including the payment of interest on the Loan) associated with the construction and leasing of the Improvements, from time to time through Project set forth in the Maturity Date as extended pursuant to Section 2.5 hereof. Borrower further agrees as follows:
Approved Construction Budget (a“Soft Costs”) Subject to after taking into account all Construction Contingencies and reallocations pursuant to Section 4.4 and Section 4.5, if at any time7.1.10 hereof (the amount of such deficiency, the projected costs anticipated to “Shortfall”), no further Advances shall be incurred made by the Lenders until the Borrower either individually or in combination (a) deposits with the Agent the Shortfall (without duplication of and except for any item of Construction Work or for amounts held by the ownership, development, financing, marketing, maintenance or leasing Senior Lender under Section 2.1.7 of the Improvements through Senior Loan Agreement), (b) infuses the Maturity Date exceed Shortfall into the amount set forth Project by payment of expenses in cash or other manner reasonably satisfactory to the Agent and delivers to the Agent evidence thereof reasonably satisfactory to the Agent, (c) provides the Agent with other assurance reasonably satisfactory to the Agent (such as a letter of credit or guaranty) that the Shortfall will be funded as and when needed, (d) to the extent permitted under Section 2.1.4 hereof, allocates the applicable portion of the Construction Contingency (or amounts in the Restricted Securities Account) to the Shortfall and/or (e) to the extent permitted under Section 7.1.10 hereof, reallocates cost savings from the Approved Construction Budget for such item (as or other reallocations which are approved by the same may be adjusted Agent, in its sole discretion) in accordance with the terms of this Agreement). The Borrower hereby agrees that the Agent shall have a Lien on and security interest in, as determined by Administrative for the benefit of Lenders, any sums deposited with the Agent pursuant to clauses (a) and (c) above, that the Construction Consultant in their reasonable discretion (including Borrower shall have no right to withdraw any such determination that the undisbursed Loan proceeds allocated sums except for the payment of future interest (the “Interest Reserve”) is insufficient) based on factorsConstruction Costs, including, but not limited to, (1) Administrative Agent’s projections of interest rates for period(s) up to and including that the full remaining term amount of such sums shall be used to pay Construction Costs before additional proceeds of the Loan (are advanced and permitted extensions); (2) the effect of any Hedge Agreement; (3) cost overruns or Change Orders; or (4) failure of the Improvements to lease at the rate of absorption or otherwise at rates and terms projected by Borrower, then the Loans Agent agrees that all such sums shall be deemed not “In Balance.”
(b) If advanced pursuant to Draw Requests submitted by the Loans are deemed not “In Balance,” then Borrower shall, at Administrative Agent’s option, within ten (10) Business Days after written notice from Administrative Agent either Borrower. Any such sums deposited in accordance with said clause (a) deposit with Administrative Agent an amount sufficient to cover such deficiency (a “Deficiency Deposit”), which Deficiency Deposit shall be deposited with Administrative Agent in the Controlled Account (the “Deficiency Deposit Account”), (b) make one or more equity contributions to be used by Borrower to pay costs that will bring the Loans In Balance (an “Equity Balancing Contribution”), or (c) deliver a Collateral Letter of Credit in an amount such shall be released to the Borrower when and to the extent that the available proceeds thereunder would be sufficient to bring Agent reasonably determines that the Loans In Balance and upon which Administrative Agent shall be entitled to draw in compliance with amount thereof is more than the provisions set forth below in this Section 4.3. Administrative Agent shall not be required to authorize any disbursement of any Loans before receiving (i) payment of any such Deficiency Deposit into the Deficiency Deposit Account and the prior application of such Deficiency Deposit to the payment of Project Costs so as to bring the Loans In Balancethen-existing Shortfall; provided, (ii) verification however, that an Equity Balancing Contribution has been made and the proceeds thereof used for the payment of Project Costs on account of the Improvements, so as to bring the Loans In Balance or (iii) a Collateral Letter of Credit as set forth above. Failure of Borrower to provide satisfactory verification of an Equity Balancing Contribution or deliver a Deficiency Letter of Credit as required above shall be deemed Borrower’s election to make a Deficiency Deposit. The Deficiency Deposit shall be allocated to the Project Loan Budget and the Budget, as applicable, and shall be applied to the payment of Project Costs on account of the Improvements prior to any further disbursement of the Loans.
(c) The balances of the applicable Contingency Fund from time to time shall not be considered for purposes of determining whether the Loans are In Balance.
(2) If if an Event of Default shall occur and be continuingoccurs, Administrative the Agent (subject to the provisions of Section 14.3) mayshall, at its optionthe option of the Lenders, in addition apply such amounts either to exercising any other rights or remedies available under the Loan Documents, (A) apply any unexpended Deficiency Deposit to (or draw on any Collateral Letter of Credit to pay) the costs of completion of the Improvements and/or (B) apply any unexpended Deficiency Deposit or to (or draw on any Collateral Letter of Credit for application of the sums drawn thereunder to) the immediate reduction of any amounts due outstanding principal (together with the applicable IRR Amount and Make-Whole Amount, if any) and/or interest under the Notes Notes. Notwithstanding anything above to the contrary, at such time as the Property Owner has qualified for an aggregate of $230,000,000 of loan proceeds under and pursuant to the Senior Loan Documents (as determined by the Senior Lender), (1) the Required Equity hereunder shall be reduced by an amount equal to the amount of equity (up to $5,000,000) which is reimbursed to the Property Owner by the Senior Lender under the Senior Loan Documents as a result of such qualification and (2) the Borrower shall be permitted to distribute to the Guarantor and the other Loan Documents. With respect to Limited Guarantor the difference between such reimbursement referenced in clause (1) above and any Collateral Letter of Credit that Borrower may furnish or cause to be furnished to Administrative Agent in accordance with Shortfall, calculated on the terms of this Section 4.3:
(a) Administrative Agent will be entitled, among other things, to make one or more draws pursuant to and in accordance with this Agreement or the Building Loan Agreement, as applicable, by presentment thereof to the issuing bank accompanied only by Administrative Agent’s clean sight-draft, it being intended that the issuing bank shall have no right to inquire as to Administrative Agent’s right to draw upon such Collateral Letter of Credit;
(b) Administrative Agent shall be entitled, among other things, to draw upon each Collateral Letter of Credit pursuant to this Agreement or the Building Loan Agreement, as applicable, in whole, or in part from time to time, to the extent (without taking into account the Collateral Letter of Credit) the Loan is not In Balance, (i) in order to pay any costs not covered by Loan proceeds, Equity Balancing Contributions or Deficiency Deposits or (ii) upon any Event of Default; and
(c) Administrative Agent shall have the right to draw upon any Collateral Letter of Credit within ten (10) Business Days prior to the expiration date of such Collateral Letter of Credit and each renewal and extension thereof unlessreimbursement, prior to such expiration date of such Collateral Letter of Credit and each renewal and extension thereof, Borrower shall have furnished a replacement, extension or renewal Collateral Letter of Credit, acceptable to Administrative Agent, it being the intent hereof that at no time shall the unexpired term of any Collateral Letter of Credit be less than ten (10) Business Days. If Administrative Agent draws upon a Collateral Letter of Credit pursuant to the terms hereof, then Administrative Agent shall hold the proceeds thereof in a Controlled Account as a Deficiency Deposit. Administrative Agent shall also be entitled to draw upon a Collateral Letter of Credit if the credit rating of the issuing bank no longer meets the standard required of a Collateral Letter of Credit and Borrower does not deliver to Administrative Agent a replacement letter of credit that otherwise conforms to the requirements for Deficiency Letters of Credit within ten (10) days following notice of the same from Administrative Agent, or if Administrative Agent reasonably believes that its rights to draw on such Collateral Letter of Credit are in imminent jeopardy of not being honoredunder this Section 2.1.7.
Appears in 1 contract
Samples: Mezzanine Construction Loan Agreement (Prime Group Realty Trust)
Loan Balancing. (1) Borrower represents that If, at any time during the Budget sets forth all anticipated costs to be incurred by Borrower in connection with the ownership, development, construction, financing, marketing, maintenance and leasing term of the ImprovementsLoan, from time to time through the Maturity Date as extended pursuant to Section 2.5 hereof. Borrower further agrees as follows:
(a) Subject to reallocations pursuant to Section 4.4 and Section 4.5in Lender's reasonable business judgment, if at any time, the projected costs anticipated to be incurred it appears for any item reason that Project Costs will exceed the aggregate amount of Construction Work or for Borrower's Equity and the ownership, development, financing, marketing, maintenance or leasing proceeds of the Improvements through Senior Loan and the Maturity Date exceed the amount set forth in the Budget Loan which have been funded or which are available for such item (as the same may be adjusted in accordance with disbursement under the terms of this Agreement), as determined by Administrative Agent and the Construction Consultant in their reasonable discretion (including any such determination that the undisbursed Senior Loan proceeds allocated for the payment of future interest (the “Interest Reserve”) is insufficient) based on factors, including, but not limited to, (1) Administrative Agent’s projections of interest rates for period(s) up to and including the full remaining term of Documents or the Loan Documents to fund the particular Project Costs in question, then Borrower shall deliver to Lender such evidence as Lender may require, in Lender's sole and absolute discretion, that Borrower has immediately available funds that will be sufficient to pay for such excess Project Costs or has the unconditional right to receive such funds from other sources and will pay such excess Project Costs immediately as they come due. Borrower shall deliver such evidence within five (5) business days following Lender's written demand therefor. If Borrower fails to timely deliver such evidence or if, in Lender's sole and permitted extensions); absolute judgment, such evidence is inadequate, Borrower shall deposit with Lender such additional funds as, in Lender's reasonable business judgment, will be sufficient to pay for such excess Project Costs. Borrower shall deposit such additional funds with Lender within five (25) business days following Borrower's receipt of Lender's written demand therefore. Any money deposited by Borrower with Lender pursuant to this paragraph shall be advanced prior to the effect disbursement of any Hedge Agreement; (3) cost overruns further funds from the Senior Loan or Change Orders; or (4) failure of the Improvements to lease at the rate of absorption or otherwise at rates and terms projected Loan. All such additional funds contributed by Borrower, then the Loans Borrower pursuant hereto shall be deemed not “In Balance.”
(b) If the Loans are deemed not “In Balance,” then Borrower shall, at Administrative Agent’s option, within ten (10) Business Days after written notice from Administrative Agent either (a) deposit with Administrative Agent an amount sufficient to cover such deficiency (a “Deficiency Deposit”), which Deficiency Deposit shall be deposited with Administrative Agent in the Controlled Account (the “Deficiency Deposit Account”), (b) make one or more equity contributions to be used by Borrower to pay costs that will bring the Loans In Balance (an “Equity Balancing Contribution”), or (c) deliver a Collateral Letter of Credit in an amount such that the available proceeds thereunder would be sufficient to bring the Loans In Balance and upon which Administrative Agent shall be entitled to draw in compliance with the provisions set forth below in this Section 4.3. Administrative Agent shall not be required to authorize any disbursement of any Loans before receiving (i) payment of any such Deficiency Deposit into the Deficiency Deposit Account and the prior application of such Deficiency Deposit to the payment of Project Costs so as to bring the Loans In Balance, (ii) verification that an Equity Balancing Contribution has been made and the proceeds thereof used for the payment of Project Costs on account of the Improvements, so as to bring the Loans In Balance or (iii) a Collateral Letter of Credit as set forth above. Failure of Borrower to provide satisfactory verification of an Equity Balancing Contribution or deliver a Deficiency Letter of Credit as required above shall be deemed Borrower’s election to make a Deficiency Deposit. The Deficiency Deposit shall be allocated to the Project Loan Budget and the Budget, as applicable, and shall be applied to the payment of Project Costs on account of the Improvements prior to any further disbursement of the Loans.
(c) The balances of the applicable Contingency Fund from time to time shall not be considered for purposes of determining whether the Loans are In Balance.
(2) If an Event of Default shall occur and be continuing, Administrative Agent (subject to the provisions of Section 14.3) may, at its option, in addition to exercising any other rights or remedies available under the Loan Documents, (A) apply any unexpended Deficiency Deposit to (or draw on any Collateral Letter of Credit to pay) the costs of completion of the Improvements and/or (B) apply any unexpended Deficiency Deposit to (or draw on any Collateral Letter of Credit for application of the sums drawn thereunder to) the immediate reduction of any amounts due under the Notes and the other Loan Documents. With respect to any Collateral Letter of Credit that Borrower may furnish or cause to be furnished to Administrative Agent in accordance with the terms of this Section 4.3:
(a) Administrative Agent will be entitled, among other things, to make one or more draws pursuant added to and in accordance with this Agreement or the Building Loan Agreement, as applicable, by presentment thereof to the issuing bank accompanied only by Administrative Agent’s clean sight-draft, it being intended that the issuing bank shall have no right to inquire as to Administrative Agent’s right to draw upon such Collateral Letter become a part of Credit;
(b) Administrative Agent shall be entitled, among other things, to draw upon each Collateral Letter of Credit pursuant to this Agreement or the Building Loan Agreement, as applicable, in whole, or in part from time to time, to the extent (without taking into account the Collateral Letter of Credit) the Loan is not In Balance, (i) in order to pay any costs not covered by Loan proceeds, Borrower's Equity Balancing Contributions or Deficiency Deposits or (ii) upon any Event of Default; and
(c) Administrative Agent shall have the right to draw upon any Collateral Letter of Credit within ten (10) Business Days prior to the expiration date of such Collateral Letter of Credit and each renewal and extension thereof unless, prior to such expiration date of such Collateral Letter of Credit and each renewal and extension thereof, Borrower shall have furnished a replacement, extension or renewal Collateral Letter of Credit, acceptable to Administrative Agent, it being the intent hereof that at no time shall the unexpired term of any Collateral Letter of Credit be less than ten (10) Business Days. If Administrative Agent draws upon a Collateral Letter of Credit pursuant to the terms hereof, then Administrative Agent shall hold the proceeds thereof in a Controlled Account as a Deficiency Deposit. Administrative Agent shall also be entitled to draw upon a Collateral Letter of Credit if the credit rating of the issuing bank no longer meets the standard required of a Collateral Letter of Credit and Borrower does not deliver to Administrative Agent a replacement letter of credit that otherwise conforms to the requirements for Deficiency Letters of Credit within ten (10) days following notice of the same from Administrative Agent, or if Administrative Agent reasonably believes that its rights to draw on such Collateral Letter of Credit are in imminent jeopardy of not being honoredhereunder.
Appears in 1 contract
Samples: Loan Agreement (Calprop Corp)
Loan Balancing. (1a) Borrower represents that the Budget sets forth all anticipated costs as of the date hereof to be incurred by Borrower in connection with the ownership, development, construction, financing, marketing, maintenance and leasing of the Improvements, from time to time through the Maturity Date as extended pursuant to Section 2.5 hereofDate. Borrower further agrees as follows:
(ai) Subject to reallocations pursuant to Section 4.4 and Section 4.5, if If at any time, the projected costs anticipated to be incurred for any item of Construction Work or for the ownership, development, financing, marketing, maintenance or leasing of the Improvements through the Maturity Date exceed included in any individual Budget Line Item exceeds the amount set forth in the Budget for such item individual Budget Line Item (as the same may be adjusted in accordance with the terms of this Agreement)) after, to the extent permitted herein, applying any cost savings from other Budget Line Items or amounts in the Contingency Fund as set forth herein, as determined by Administrative Agent Lender and the Construction Consultant in their reasonable discretion (including any such determination that the undisbursed Loan proceeds allocated for the payment of future interest on Loans to be advanced from the Commitments (such line items in the Budget being referred to herein as the “Interest Reserve”) is insufficient) based on any reasonable factors, including, but not limited to, including (1) Administrative AgentLender’s projections of interest rates for period(s) up to and including the full remaining term of the Loan (and permitted extensions); (2) the effect of any Hedge Interest Rate Protection Agreement; or (3) cost overruns or Change Orders; or (4) failure of the Improvements to lease at the rate of absorption or otherwise at rates and terms projected by Borrower, then the Loans shall be deemed not “In In-Balance.”
(bii) If the Loans are deemed not “In In-Balance,” then Borrower shall, at Administrative AgentLender’s option, within ten fifteen (1015) Business Days after written notice from Administrative Agent either (a) Lender, deposit with Administrative Agent the Lender an amount sufficient to cover such deficiency (a “Deficiency Deposit”), which Deficiency Deposit shall be deposited with Administrative Agent Lender in the Controlled Account (the “Deficiency Deposit Account”), (b) make one or more equity including contributions to be used by pay future interest; provided, however, at Borrower’s request, Lender may, in its sole discretion, permit Borrower to pay costs that will bring any such deficiency directly to the Loans In Balance (an “Equity Balancing Contribution”), applicable supplier or (c) deliver a Collateral Letter contractor in place of Credit in an amount making such that the available proceeds thereunder would be sufficient to bring the Loans In Balance and upon which Administrative Agent shall be entitled to draw in compliance with the provisions set forth below in this Section 4.3Deficiency Deposit. Administrative Agent Lender shall not be required to authorize any disbursement of any Loans before receiving (i) payment of any such Deficiency Deposit into the Deficiency Deposit Account and the prior application of such Deficiency Deposit to the payment of Project Costs so as to bring the Loans In In-Balance; provided, (ii) verification however that an Equity Balancing Contribution has been made Lender, may, in its sole discretion elect to fund the net difference between the amount requested for disbursement and the proceeds thereof used for the payment of Project Costs on account of the Improvements, so as to bring the Loans In Balance or (iii) a Collateral Letter of Credit as set forth above. Failure of Borrower to provide satisfactory verification of an Equity Balancing Contribution or deliver a such Deficiency Letter of Credit as required above shall be deemed Borrower’s election to make a Deficiency DepositDeposit amount. The Deficiency Deposit shall be allocated to the Project Loan Budget and the Building Loan Budget, as applicable, and shall be applied to the payment of Project Costs on account of the Improvements (or tenant improvements, as applicable) prior to any further disbursement of the Loans.. ny-1258385
(c) The balances of the applicable Contingency Fund from time to time shall not be considered for purposes of determining whether the Loans are In Balance.
(2b) If an Event of Default shall occur and be continuing, Administrative Agent (subject to the provisions of Section 14.3) Lender may, at its option, in addition to exercising any other rights or remedies available under the Loan Documents, (A) apply any unexpended Deficiency Deposit to (or draw on any Collateral Letter of Credit to pay) the costs of completion of the Improvements (or the tenant improvements, as applicable) and/or (B) apply any unexpended Deficiency Deposit to (or draw on any Collateral Letter of Credit for application of the sums drawn thereunder to) the immediate reduction of any amounts due under the Notes and the other Loan Documents. With respect to any Collateral Letter of Credit that Borrower may furnish or cause to be furnished to Administrative Agent in accordance with the terms of this Section 4.3:
(a) Administrative Agent will be entitled, among other things, to make one or more draws pursuant to and in accordance with this Agreement or the Building Loan Agreement, as applicable, by presentment thereof to the issuing bank accompanied only by Administrative Agent’s clean sight-draft, it being intended that the issuing bank shall have no right to inquire as to Administrative Agent’s right to draw upon such Collateral Letter of Credit;
(b) Administrative Agent shall be entitled, among other things, to draw upon each Collateral Letter of Credit pursuant to this Agreement or the Building Loan Agreement, as applicable, in whole, or in part from time to time, to the extent (without taking into account the Collateral Letter of Credit) the Loan is not In Balance, (i) in order to pay any costs not covered by Loan proceeds, Equity Balancing Contributions or Deficiency Deposits or (ii) upon any Event of Default; and
(c) Administrative Agent shall have the right to draw upon any Collateral Letter of Credit within ten (10) Business Days prior to the expiration date of such Collateral Letter of Credit and each renewal and extension thereof unless, prior to such expiration date of such Collateral Letter of Credit and each renewal and extension thereof, Borrower shall have furnished a replacement, extension or renewal Collateral Letter of Credit, acceptable to Administrative Agent, it being the intent hereof that at no time shall the unexpired term of any Collateral Letter of Credit be less than ten (10) Business Days. If Administrative Agent draws upon a Collateral Letter of Credit pursuant to the terms hereof, then Administrative Agent shall hold the proceeds thereof in a Controlled Account as a Deficiency Deposit. Administrative Agent shall also be entitled to draw upon a Collateral Letter of Credit if the credit rating of the issuing bank no longer meets the standard required of a Collateral Letter of Credit and Borrower does not deliver to Administrative Agent a replacement letter of credit that otherwise conforms to the requirements for Deficiency Letters of Credit within ten (10) days following notice of the same from Administrative Agent, or if Administrative Agent reasonably believes that its rights to draw on such Collateral Letter of Credit are in imminent jeopardy of not being honored.
Appears in 1 contract
Samples: Acquisition and Project Loan Agreement (KBS Strategic Opportunity REIT II, Inc.)
Loan Balancing. (1) Borrower represents that the Budget sets forth all anticipated costs to be incurred by Borrower in connection with the ownership, development, construction, financing, marketing, maintenance and leasing of the Improvements, from time to time through the Maturity Date as extended pursuant to Section 2.5 hereof. Borrower further agrees as follows:
(a) Subject A reserve account (the “Borrower’s Deposit”) shall be established at Lender to reallocations the extent required pursuant to this Section 4.4 3.6 which Borrower’s Deposit shall be managed and Section 4.5, if at any time, the projected costs anticipated to be incurred for any item of Construction Work or for the ownership, development, financing, marketing, maintenance or leasing of the Improvements through the Maturity Date exceed the amount set forth in the Budget for such item (as the same may be adjusted held in accordance with the terms of this Agreement), as determined by Administrative Agent provision. Borrower shall have no access whatsoever to the Borrower’s Deposit. If at any time the Fee Owner has failed to replenish the Interest Reserve Account in accordance with Section 7.2.3 of the Underlying Loan Agreement and the Construction Consultant Lender determines in their its reasonable discretion (including any such determination that the undisbursed proceeds of the Interest Allocation are insufficient to pay all Interest Charges through the Maturity Date of the then-applicable term, then Borrower shall be required to deposit with Lender, within twenty (20) Business Days after Lender’s written request therefor, sufficient additional funds to cover the deficiency which Lender deems to exist (such amount, the “Deficiency”). All sums in the Borrower’s Deposit may be subject to designation by Lender as being allocated to the Interest Allocation and used for Interest Charges. At Lender’s discretion, all sums in the Borrower’s Deposit will be disbursed by Lender to Lender or Borrower (as applicable) pursuant to the terms and conditions hereof as if they constituted a part of the Loan proceeds allocated being made hereunder. Notwithstanding anything herein to the contrary, to the extent there are any funds held in the Borrower’s Deposit, such funds shall be utilized to pay the Interest Charges prior to any Advance from the Interest Allocation and shall not be used for the payment of future interest (the “Underlying Interest Reserve”) is insufficient) based on factors, including, but not limited to, (1) Administrative Agent’s projections of interest rates for period(s) up to and including the full remaining term of the Loan (and permitted extensions); (2) the effect of any Hedge Agreement; (3) cost overruns or Change Orders; or (4) failure of the Improvements to lease at the rate of absorption or otherwise at rates and terms projected by Borrower, then the Loans shall be deemed not “In BalanceCharges.”
(b) If Upon the Loans are deemed not deposit by or on behalf of Fee Owner into the Rebalancing Reserve Account of a Shortfall (such amount, the “In Balance,” then Shortfall Deposit”), such Shortfall Deposit shall be fully advanced in accordance with the terms hereunder (or in accordance with the terms of the Underlying Loan Agreement, as applicable) prior to any further Advances of the Loan and/or the Underlying Mortgage Loan. Additionally, if, subsequent to a Borrower’s Deposit pursuant to Section 3.6(a), Fee Owner deposits a Shortfall into the Rebalancing Reserve Account and Lender determines that a portion of such Shortfall is allocated to the Deficiency (such portion, the “Refundable Deficiency”), Lender shall fund to Borrower shall, at Administrative Agent’s option, within the Refundable Deficiency promptly and no later than ten (10) Business Days after written notice from Administrative Agent either (a) deposit with Administrative Agent an amount sufficient to cover such deficiency (a “Deficiency Deposit”), which Deficiency Deposit shall be deposited with Administrative Agent in the Controlled Account (the “Deficiency Deposit Account”), (b) make one or more equity contributions to be used by Borrower to pay costs that will bring the Loans In Balance (an “Equity Balancing Contribution”), or (c) deliver a Collateral Letter of Credit in an amount such that the available proceeds thereunder would be sufficient to bring the Loans In Balance and upon which Administrative Agent shall be entitled to draw in compliance with the provisions set forth below in this Section 4.3. Administrative Agent shall not be required to authorize any disbursement of any Loans before receiving (i) payment of any such Deficiency Deposit into the Deficiency Deposit Account and the prior application of such Deficiency Deposit to the payment of Project Costs so as to bring the Loans In Balance, (ii) verification that an Equity Balancing Contribution has been made and the proceeds thereof used for the payment of Project Costs on account receipt of the Improvements, so as to bring the Loans In Balance or (iii) a Collateral Letter of Credit as set forth above. Failure of Borrower to provide satisfactory verification of an Equity Balancing Contribution or deliver a Deficiency Letter of Credit as required above shall be deemed BorrowerShortfall Deposit and Lender’s election to make a Deficiency Deposit. The Deficiency Deposit shall be allocated to the Project Loan Budget and the Budget, as applicable, and shall be applied to the payment of Project Costs on account determination of the Improvements prior to any further disbursement of the LoansRefundable Deficiency.
(c) The balances of the applicable Contingency Fund from time to time shall not be considered for purposes of determining whether the Loans are In Balance.
(2) If an Event of Default shall occur and be continuing, Administrative Agent (subject to the provisions of Section 14.3) may, at its option, in addition to exercising any other rights or remedies available under the Loan Documents, (A) apply any unexpended Deficiency Deposit to (or draw on any Collateral Letter of Credit to pay) the costs of completion of the Improvements and/or (B) apply any unexpended Deficiency Deposit to (or draw on any Collateral Letter of Credit for application of the sums drawn thereunder to) the immediate reduction of any amounts due under the Notes and the other Loan Documents. With respect to any Collateral Letter of Credit that Borrower may furnish or cause to be furnished to Administrative Agent in accordance with the terms of this Section 4.3:
(a) Administrative Agent will be entitled, among other things, to make one or more draws pursuant to and in accordance with this Agreement or the Building Loan Agreement, as applicable, by presentment thereof to the issuing bank accompanied only by Administrative Agent’s clean sight-draft, it being intended that the issuing bank shall have no right to inquire as to Administrative Agent’s right to draw upon such Collateral Letter of Credit;
(b) Administrative Agent shall be entitled, among other things, to draw upon each Collateral Letter of Credit pursuant to this Agreement or the Building Loan Agreement, as applicable, in whole, or in part from time to time, to the extent (without taking into account the Collateral Letter of Credit) the Loan is not In Balance, (i) in order to pay any costs not covered by Loan proceeds, Equity Balancing Contributions or Deficiency Deposits or (ii) upon any Event of Default; and
(c) Administrative Agent shall have the right to draw upon any Collateral Letter of Credit within ten (10) Business Days prior to the expiration date of such Collateral Letter of Credit and each renewal and extension thereof unless, prior to such expiration date of such Collateral Letter of Credit and each renewal and extension thereof, Borrower shall have furnished a replacement, extension or renewal Collateral Letter of Credit, acceptable to Administrative Agent, it being the intent hereof that at no time shall the unexpired term of any Collateral Letter of Credit be less than ten (10) Business Days. If Administrative Agent draws upon a Collateral Letter of Credit pursuant to the terms hereof, then Administrative Agent shall hold the proceeds thereof in a Controlled Account as a Deficiency Deposit. Administrative Agent shall also be entitled to draw upon a Collateral Letter of Credit if the credit rating of the issuing bank no longer meets the standard required of a Collateral Letter of Credit and Borrower does not deliver to Administrative Agent a replacement letter of credit that otherwise conforms to the requirements for Deficiency Letters of Credit within ten (10) days following notice of the same from Administrative Agent, or if Administrative Agent reasonably believes that its rights to draw on such Collateral Letter of Credit are in imminent jeopardy of not being honored.
Appears in 1 contract
Loan Balancing. (1) Borrower represents that the Budget sets forth all anticipated costs to be incurred by Borrower in connection with the ownership, development, construction, financing, marketing, maintenance and leasing of the Improvements, from time to time through the Maturity Date as extended pursuant to Section 2.5 hereof. Borrower further agrees as follows:
(a) Subject to reallocations pursuant to Section 4.4 Borrower's rights under Sections 2.06 and Section 4.52.07, if at any timetime Administrative Agent notifies Borrower that, in Administrative Agent's reasonable judgment, the projected costs anticipated to be incurred for any item of Construction Work or for the ownership, development, financing, marketing, maintenance or leasing of the Improvements through the Maturity Date exceed the amount set forth in the Budget for such item (as the same may be adjusted in accordance with the terms of this Agreement), as determined by Administrative Agent and the Construction Consultant in their reasonable discretion (including any such determination that the undisbursed Loan proceeds allocated for the payment of future interest (the “Interest Reserve”) is insufficient) based on factors, including, but not limited to, (1) Administrative Agent’s projections of interest rates for period(s) up to and including the full remaining term balance of the Loan (is insufficient to pay the remaining Hard and permitted extensions); (2) the effect of any Hedge Agreement; (3) cost overruns or Change Orders; or (4) failure of the Improvements to lease at the rate of absorption or otherwise at rates and terms projected by BorrowerSoft Costs, then the Loans shall be deemed not “In Balance.”
(b) If the Loans are deemed not “In Balance,” then Borrower shall, at its option, either (i) within twenty (20) days of Administrative Agent’s option's notification as aforesaid, within ten (10) Business Days after written notice from Administrative Agent either (a) deposit with Administrative Agent an amount equal to such deficiency, which Administrative Agent shall from time to time apply, or allow Borrower to apply, to such Hard and Soft Costs, (ii) pay for such Hard and Soft Costs, as incurred, in the amount of such deficiency so that the amount of the Loan which remains to be disbursed shall be sufficient to cover pay all remaining Hard and Soft Costs, and Borrower shall furnish Administrative Agent with such evidence thereof as Administrative Agent shall reasonably require or (iii) within twenty (20) days of Administrative Agent's notification as aforesaid, deliver to Administrative Agent an irrevocable unconditional letter of credit in the amount of such deficiency issued by a money center bank headquartered in the United States which has total assets of at least $100,000,000,000, whose commercial paper is rated at least "A-1/P-1" and whose long-term senior unsecured debt is rated at least "A-" and is otherwise reasonably acceptable to Administrative Agent (a “Deficiency Deposit”any such bank, an "Approved LC Bank"), which Deficiency Deposit letter of credit shall name Administrative Agent as the beneficiary thereof, shall be deposited with available at sight, shall otherwise be in form and substance reasonably acceptable to Administrative Agent and can be presented for payment in the Controlled Account Borough of Manhattan, New York (the “Deficiency Deposit Account”"Loan Balancing LC"), which Administrative Agent shall from time to time draw on and apply to such Hard and Soft Costs. Borrower hereby agrees that Administrative Agent shall have a lien on and security interest in, for the benefit of Lenders, any sums deposited pursuant to clause (i) above and that Borrower shall have no right to withdraw any such sums except for the payment of the aforesaid Hard and Soft Costs as approved by Administrative Agent (such approval not to be unreasonably withheld, conditioned or delayed). Lenders shall have no obligation to make any further advances of proceeds of the Loan in respect of such Hard and Soft Cost budget lines which were deemed by Administrative Agent to be deficient until (a) the sums required to be deposited pursuant to clause (i) above have been exhausted, (b) make one or more equity contributions Borrower has actually paid such Hard and Soft Costs pursuant to be used by Borrower to pay costs that will bring the Loans In Balance clause (an “Equity Balancing Contribution”), ii) above or (c) deliver a Collateral Letter of Credit the sums available to be drawn under any Loan Balancing LC have been exhausted, as the case may be, and, in an amount any such that case, the available proceeds thereunder would be sufficient to bring the Loans In Balance and upon which Administrative Agent shall be entitled to draw Loan is back "in compliance with the provisions set forth below balance". Any such sums not used as provided in this Section 4.3. Administrative Agent shall not be required to authorize any disbursement of any Loans before receiving said clause (i) payment of shall be released to Borrower or any such Deficiency Deposit into the Deficiency Deposit Account Loan Balancing LC shall be returned to Borrower when and the prior application of such Deficiency Deposit to the payment extent that Administrative Agent reasonably determines that the total remaining Hard and Soft Costs of Project Costs so as to bring the Loans In Balance, (ii) verification that an Equity Balancing Contribution has been made and the proceeds thereof used for the payment of Project Costs on account of the Improvements, so as to bring the Loans In Balance or (iii) a Collateral Letter of Credit as set forth above. Failure of Borrower to provide satisfactory verification of an Equity Balancing Contribution or deliver a Deficiency Letter of Credit as required above shall be deemed Borrower’s election to make a Deficiency Deposit. The Deficiency Deposit shall be allocated to the Project Loan Budget and the Budget, as applicable, and shall be applied to the payment of Project Costs on account completion of the Improvements prior is less than or equal to any further disbursement the undisbursed balance of the Loans.
(c) The balances of the applicable Contingency Fund from time to time shall not be considered for purposes of determining whether the Loans are In Balance.
(2) If Loan; provided, however, that should an Event of Default shall occur and be continuing, Administrative Agent (subject to the provisions of Section 14.3) mayshall, at its optionthe option of the Required Lenders, in addition to exercising any other rights apply such amounts on deposit or remedies available under the Loan Documents, (A) apply any unexpended Deficiency Deposit Balancing LC either to (or draw on any Collateral Letter of Credit to pay) the costs Hard and Soft Costs of completion of the Improvements and/or (B) apply any unexpended Deficiency Deposit or to (or draw on any Collateral Letter of Credit for application of the sums drawn thereunder to) the immediate reduction of any amounts due outstanding principal and/or interest under the Notes and Notes. Any advance of Loan proceeds hereunder made prior to or without the other Loan Documents. With respect to any Collateral Letter fulfillment by Borrower of Credit that Borrower may furnish all of the conditions precedent thereto, whether or cause to be furnished not known to Administrative Agent in accordance with the terms of this Section 4.3:
(a) or Lenders, shall not constitute a waiver by Administrative Agent will be entitledor Lenders of the requirement that all conditions, among other thingsincluding the non-performed conditions, to make one or more draws pursuant to and in accordance with this Agreement or the Building Loan Agreement, as applicable, by presentment thereof to the issuing bank accompanied only by Administrative Agent’s clean sight-draft, it being intended that the issuing bank shall have no right to inquire as to Administrative Agent’s right to draw upon such Collateral Letter of Credit;
(b) Administrative Agent shall be entitled, among other things, required with respect to draw upon each Collateral Letter of Credit pursuant to this Agreement or the Building Loan Agreement, as applicable, in whole, or in part from time to time, to the extent (without taking into account the Collateral Letter of Credit) the Loan is not In Balance, (i) in order to pay any costs not covered by Loan proceeds, Equity Balancing Contributions or Deficiency Deposits or (ii) upon any Event of Default; and
(c) Administrative Agent shall have the right to draw upon any Collateral Letter of Credit within ten (10) Business Days prior to the expiration date of such Collateral Letter of Credit and each renewal and extension thereof unless, prior to such expiration date of such Collateral Letter of Credit and each renewal and extension thereof, Borrower shall have furnished a replacement, extension or renewal Collateral Letter of Credit, acceptable to Administrative Agent, it being the intent hereof that at no time shall the unexpired term of any Collateral Letter of Credit be less than ten (10) Business Days. If Administrative Agent draws upon a Collateral Letter of Credit pursuant to the terms hereof, then Administrative Agent shall hold the proceeds thereof in a Controlled Account as a Deficiency Deposit. Administrative Agent shall also be entitled to draw upon a Collateral Letter of Credit if the credit rating of the issuing bank no longer meets the standard required of a Collateral Letter of Credit and Borrower does not deliver to Administrative Agent a replacement letter of credit that otherwise conforms to the requirements for Deficiency Letters of Credit within ten (10) days following notice of the same from Administrative Agent, or if Administrative Agent reasonably believes that its rights to draw on such Collateral Letter of Credit are in imminent jeopardy of not being honoredall future advances.
Appears in 1 contract
Loan Balancing. (1) Borrower represents that the Budget sets forth all anticipated costs Lender shall be obligated to be incurred by Borrower in connection with the ownership, development, construction, financing, marketing, maintenance and leasing of the Improvements, from time to time through the Maturity Date as extended pursuant to Section 2.5 hereof. Borrower further agrees as follows:
(a) Subject to reallocations pursuant to Section 4.4 and Section 4.5, if at any time, the projected costs anticipated to be incurred for any item of Construction Work or for the ownership, development, financing, marketing, maintenance or leasing of the Improvements through the Maturity Date exceed the amount set forth in the Budget for such item (as the same may be adjusted in accordance with the terms of this Agreement), as determined by Administrative Agent and disburse -------------- the Construction Consultant in their reasonable discretion (including any Holdback Advance only when such determination that the undisbursed Loan proceeds allocated for the payment of future interest (the “Interest Reserve”) is insufficient) based on factors, including, but not limited to, (1) Administrative Agent’s projections of interest rates for period(s) up to and including the full remaining term portion of the Loan (and permitted extensions); (2) the effect of any Hedge Agreement; (3) cost overruns or Change Orders; or (4) failure is "in balance." The Construction Holdback Advance portion of the Improvements to lease at the rate of absorption or otherwise at rates and terms projected by Borrower, then the Loans Loan shall be deemed not “In Balance.”
(b) If the Loans are deemed not “In Balance,” then "in balance" only at such times as Borrower shall, at Administrative Agent’s option, within ten (10) Business Days after written notice from Administrative Agent either (a) deposit with Administrative Agent an amount has invested sufficient to cover such deficiency (a “Deficiency Deposit”), which Deficiency Deposit shall be deposited with Administrative Agent in the Controlled Account (the “Deficiency Deposit Account”), (b) make one or more equity contributions to be used by Borrower to pay costs that will bring the Loans In Balance (an “Equity Balancing Contribution”), or (c) deliver a Collateral Letter of Credit in an amount such that the available proceeds thereunder would be sufficient to bring the Loans In Balance and upon which Administrative Agent shall be entitled to draw in compliance with the provisions set forth below in this Section 4.3. Administrative Agent shall not be required to authorize any disbursement of any Loans before receiving (i) payment of any such Deficiency Deposit funds into the Deficiency Deposit Account and the prior application of such Deficiency Deposit to the payment of Project Costs so as that, in Lender's reasonable judgment, (a) taking into account the disbursement of the Interest Reserve Holdback Advance, the undisbursed portion of the Construction Holdback Advance shall be sufficient to bring complete and maintain the Loans In BalanceProject and pay all Project Costs until repayment in full of such portion of the Loan. and (b) the undisbursed portion of (i) the Construction Holdback Advance proceeds allocated to the cost category described in the Sources and Uses Schedule, plus (ii) verification that an Equity Balancing Contribution has the Construction Holdback Advance proceeds in the applicable contingency cost category (if any) of such Sources and Uses Schedule (to the extent such contingency funds have not theretofore been made and the proceeds thereof used set aside by Lender for the payment of overruns in other cost categories) shall be sufficient to pay in full the costs to which such amount is allocated. The determination as to whether or not the Loan is "in balance" may be made by Lender at anytime, including with each Request for Advance. Upon twenty-one (21) days' written notice from Lender that the Construction Holdback Advance portion of the Loan is not "in balance", Borrower shall either (x) deposit with Lender, in cash or cash equivalents, the amount that Lender, in its reasonable opinion, deems necessary to put the Loan "in balance" or (y) furnish Lender with paid invoices, bills and receipts indicating that Borrower has paid, from Borrowers own funds, for the Project Costs in a sufficient amount to put the Loan "in balance." Any amounts which are deposited with Lender to put the Loan "in balance' shall be the next funds disbursed by Lender, subject to the terms and conditions of this Note. No interest shall be paid by Lender on account of the Improvements, so as to bring the Loans In Balance such deposited funds. Any failure or (iii) a Collateral Letter of Credit as set forth above. Failure of refusal by Borrower to provide satisfactory verification comply with the provisions of an Equity Balancing Contribution or deliver a Deficiency Letter of Credit as required above this subparagraph shall be deemed Borrower’s election to make a Deficiency Deposit. The Deficiency Deposit shall be allocated to the Project Loan Budget material default under this Note and the Budget, as applicable, and shall be applied to the payment of Project Costs on account of the Improvements prior to any further disbursement of the Loans.
(c) The balances of the applicable Contingency Fund from time to time shall not be considered for purposes of determining whether the Loans are In Balance.
(2) If an Event of Default shall occur and be continuing, Administrative Agent (subject to the provisions of Section 14.3) may, at its option, in addition to exercising any other rights or remedies available under the Loan Documents, (A) apply any unexpended Deficiency Deposit to (or draw on any Collateral Letter of Credit to pay) the costs of completion of the Improvements and/or (B) apply any unexpended Deficiency Deposit to (or draw on any Collateral Letter of Credit for application of the sums drawn thereunder to) the immediate reduction of any amounts due under the Notes and the other Loan Documents. With respect to any Collateral Letter of Credit that Borrower may furnish or cause to be furnished to Administrative Agent in accordance with the terms of this Section 4.3:
(a) Administrative Agent will be entitled, among other things, to make one or more draws pursuant to and in accordance with this Agreement or the Building Loan Agreement, as applicable, by presentment thereof to the issuing bank accompanied only by Administrative Agent’s clean sight-draft, it being intended that the issuing bank shall have no right to inquire as to Administrative Agent’s right to draw upon such Collateral Letter of Credit;
(b) Administrative Agent shall be entitled, among other things, to draw upon each Collateral Letter of Credit pursuant to this Agreement or the Building Loan Agreement, as applicable, in whole, or in part from time to time, to the extent (without taking into account the Collateral Letter of Credit) the Loan is not In Balance, (i) in order to pay any costs not covered by Loan proceeds, Equity Balancing Contributions or Deficiency Deposits or (ii) upon any Event of Default; and
(c) Administrative Agent shall have the right to draw upon any Collateral Letter of Credit within ten (10) Business Days prior to the expiration date of such Collateral Letter of Credit and each renewal and extension thereof unless, prior to such expiration date of such Collateral Letter of Credit and each renewal and extension thereof, Borrower shall have furnished a replacement, extension or renewal Collateral Letter of Credit, acceptable to Administrative Agent, it being the intent hereof that at no time shall the unexpired term of any Collateral Letter of Credit be less than ten (10) Business Days. If Administrative Agent draws upon a Collateral Letter of Credit pursuant to the terms hereof, then Administrative Agent shall hold the proceeds thereof in a Controlled Account as a Deficiency Deposit. Administrative Agent shall also be entitled to draw upon a Collateral Letter of Credit if the credit rating of the issuing bank no longer meets the standard required of a Collateral Letter of Credit and Borrower does not deliver to Administrative Agent a replacement letter of credit that otherwise conforms to the requirements for Deficiency Letters of Credit within ten (10) days following notice of the same from Administrative Agent, or if Administrative Agent reasonably believes that its rights to draw on such Collateral Letter of Credit are in imminent jeopardy of not being honored.
Appears in 1 contract
Samples: Loan and Security Agreement (Aspect Communications Corp)
Loan Balancing. (1) Borrower represents that the Budget sets forth all anticipated costs to be incurred by Borrower in connection with the ownership, development, construction, financing, marketing, maintenance and leasing of the Improvements, from time to time through the Maturity Date as extended pursuant to Section 2.5 hereof. Borrower further agrees as follows:
(a) Subject to reallocations pursuant to Section 4.4 and Section 4.5, if If at any timetime Administrative Agent notifies Borrower that, in Administrative Agent's sole judgment, reasonably exercised, the projected costs anticipated to be incurred for any item of Construction Work or for the ownership, development, financing, marketing, maintenance or leasing of the Improvements through the Maturity Date exceed the amount set forth in the Budget for such item (as the same may be adjusted in accordance with the terms of this Agreement), as determined by Administrative Agent and the Construction Consultant in their reasonable discretion (including any such determination that the undisbursed Loan proceeds allocated for the payment of future interest (the “Interest Reserve”) is insufficient) based on factors, including, but not limited to, (1) Administrative Agent’s projections of interest rates for period(s) up to and including the full remaining term balance of the Loan (is insufficient to pay the remaining Direct and permitted extensions); (2) the effect of any Hedge Agreement; (3) cost overruns or Change Orders; or (4) failure of the Improvements to lease at the rate of absorption or otherwise at rates and terms projected by BorrowerIndirect Costs, then the Loans shall be deemed not “In Balance.”
(b) If the Loans are deemed not “In Balance,” then Borrower shall, at Administrative Agent’s its option, either (i) within ten (10) Business Days after written notice from days of Administrative Agent either (a) Agent's notification as aforesaid, deposit with Administrative Agent an amount sufficient equal to cover such deficiency (a “Deficiency Deposit”)deficiency, which Deficiency Deposit shall be deposited with Administrative Agent in the Controlled Account (the “Deficiency Deposit Account”), (b) make one or more equity contributions to be used by Borrower to pay costs that will bring the Loans In Balance (an “Equity Balancing Contribution”), or (c) deliver a Collateral Letter of Credit in an amount such that the available proceeds thereunder would be sufficient to bring the Loans In Balance and upon which Administrative Agent shall from time to time apply, or allow Borrower to apply, to such Costs or (ii) pay for such Costs, as incurred, in the amount of such deficiency so that the amount of the Loan which remains to be entitled disbursed shall be sufficient to draw in compliance pay all remaining Direct and Indirect Costs, and Borrower shall furnish Administrative Agent with the provisions set forth below in this Section 4.3. such evidence thereof as Administrative Agent shall not be required require. Borrower hereby agrees that Administrative Agent shall have a lien on and security interest in, for the benefit of Lenders, any sums deposited pursuant to authorize any disbursement of any Loans before receiving clause (i) payment of above and that Borrower shall have no right to withdraw any such Deficiency Deposit into the Deficiency Deposit Account and the prior application of such Deficiency Deposit to the payment of Project Costs so as to bring the Loans In Balance, (ii) verification that an Equity Balancing Contribution has been made and the proceeds thereof used sums except for the payment of Project the aforesaid Costs on account as approved by Administrative Agent. Lenders shall have no obligation to make any further advances of proceeds of the ImprovementsLoan until the sums required to be deposited pursuant to clause (i) above have been exhausted or until Borrower has actually paid such Direct and Indirect Costs pursuant to clause (ii) above, so as to bring the Loans In Balance or case may be, and, in either such case, the Loan is back "in balance". Any such sums not used as provided in said clause (iiii) a Collateral Letter of Credit as set forth above. Failure of Borrower to provide satisfactory verification of an Equity Balancing Contribution or deliver a Deficiency Letter of Credit as required above shall be deemed Borrower’s election released to make a Deficiency Deposit. The Deficiency Deposit shall be allocated Borrower when and to the Project Loan Budget and extent that Administrative Agent determines that the Budgetamount thereof is more than the excess, as applicableif any, and shall be applied to the payment of Project Costs on account of the Improvements prior to any further disbursement of the Loans.
(c) The balances of the applicable Contingency Fund from time to time shall not be considered for purposes of determining whether the Loans are In Balance.
(2) If an Event of Default shall occur and be continuing, Administrative Agent (subject to the provisions of Section 14.3) may, at its option, in addition to exercising any other rights or remedies available under the Loan Documents, (A) apply any unexpended Deficiency Deposit to (or draw on any Collateral Letter of Credit to pay) the costs total remaining Costs of completion of the Improvements and/or (B) apply any unexpended Deficiency Deposit to (or draw on any Collateral Letter of Credit for application over the undisbursed balance of the sums drawn thereunder to) Loan; provided, however, that should an Event of Default occur, Administrative Agent shall, at the option of the Required Lenders, apply such amounts either to the Costs of completion of the Improvements or to the immediate reduction of any amounts due outstanding principal and/or interest under the Notes and the other Loan Documents. With respect to any Collateral Letter of Credit that Borrower may furnish or cause to be furnished to Administrative Agent in accordance with the terms of this Section 4.3:
(a) Administrative Agent will be entitled, among other things, to make one or more draws pursuant to and in accordance with this Agreement or the Building Loan Agreement, as applicable, by presentment thereof to the issuing bank accompanied only by Administrative Agent’s clean sight-draft, it being intended that the issuing bank shall have no right to inquire as to Administrative Agent’s right to draw upon such Collateral Letter of Credit;
(b) Administrative Agent shall be entitled, among other things, to draw upon each Collateral Letter of Credit pursuant to this Agreement or the Building Loan Agreement, as applicable, in whole, or in part from time to time, to the extent (without taking into account the Collateral Letter of Credit) the Loan is not In Balance, (i) in order to pay any costs not covered by Loan proceeds, Equity Balancing Contributions or Deficiency Deposits or (ii) upon any Event of Default; and
(c) Administrative Agent shall have the right to draw upon any Collateral Letter of Credit within ten (10) Business Days prior to the expiration date of such Collateral Letter of Credit and each renewal and extension thereof unless, prior to such expiration date of such Collateral Letter of Credit and each renewal and extension thereof, Borrower shall have furnished a replacement, extension or renewal Collateral Letter of Credit, acceptable to Administrative Agent, it being the intent hereof that at no time shall the unexpired term of any Collateral Letter of Credit be less than ten (10) Business Days. If Administrative Agent draws upon a Collateral Letter of Credit pursuant to the terms hereof, then Administrative Agent shall hold the proceeds thereof in a Controlled Account as a Deficiency Deposit. Administrative Agent shall also be entitled to draw upon a Collateral Letter of Credit if the credit rating of the issuing bank no longer meets the standard required of a Collateral Letter of Credit and Borrower does not deliver to Administrative Agent a replacement letter of credit that otherwise conforms to the requirements for Deficiency Letters of Credit within ten (10) days following notice of the same from Administrative Agent, or if Administrative Agent reasonably believes that its rights to draw on such Collateral Letter of Credit are in imminent jeopardy of not being honoredNotes.
Appears in 1 contract
Loan Balancing. (1i) Borrower represents that the Budget sets forth all anticipated costs to be incurred by Borrower in connection with the ownership, development, construction, financing, marketing, maintenance and leasing As a material condition of the ImprovementsLoan and as a condition precedent to each Lender’s duty to disburse proceeds of the Loan, from time to time through Borrower shall pay all Post-Closing Improvements in excess of the Maturity Date as extended Improvement Funds. Except for the payment of interest pursuant to Section 2.5 hereof. this Agreement and the payment of expenses, charges, costs and fees as otherwise provided herein, Administrative Agent on behalf of each Lender, shall be obligated to disburse proceeds of the Loan only when the Loan is “in balance.” The Loan shall be “in balance” only at such times as Xxxxxxxx has invested sufficient funds into the payment of Post-Closing Improvements so that, in Administrative Agent’s commercially reasonable judgment, the undisbursed portion of the Improvement Funds shall be sufficient to complete and reimburse Borrower further agrees as follows:for seventy percent (70%) of the Post-Closing Improvements.
(aii) Subject The determination as to reallocations pursuant to Section 4.4 and Section 4.5, if whether or not the Loan is “in balance” may be made by Administrative Agent at any time, the projected costs anticipated to be incurred including with each request for any item of Construction Work or for the ownership, development, financing, marketing, maintenance or leasing a disbursement of the Improvements through the Maturity Date exceed the amount set forth in Loan. Contingency Costs on the Budget for such item (as the same may be adjusted in accordance with the terms of this Agreement), as determined by Administrative Agent and the Construction Consultant in their reasonable discretion (including any such determination that the undisbursed Loan proceeds allocated for the payment of future interest (the “Interest Reserve”) is insufficient) based on factors, including, but not limited to, (1) Administrative Agent’s projections of interest rates for period(s) up to and including the full remaining term of the Loan (and permitted extensions); (2) the effect of any Hedge Agreement; (3) cost overruns or Change Orders; or (4) failure of the Improvements to lease at the rate of absorption or otherwise at rates and terms projected by Borrower, then the Loans shall be deemed not to be Post-Closing Improvements for purposes of loan balancing, and all Budget categories listed as “In Balance.”
(b) If the Loans are deemed not “In Balance,contingencies” then Borrower shall, at Administrative Agent’s option, within ten (10) Business Days after written notice from Administrative Agent either (a) deposit with Administrative Agent an amount sufficient to cover such deficiency (a “Deficiency Deposit”), which Deficiency Deposit shall be deposited with Administrative Agent in the Controlled Account (the “Deficiency Deposit Account”), (b) make one or more equity contributions deemed to be used by Borrower to pay costs that will bring the Loans In Balance (an “Equity Balancing Contribution”), or (c) deliver a Collateral Letter Improvement Funds available for disbursement for purposes of Credit in an amount such that the available proceeds thereunder would be sufficient to bring the Loans In Balance and upon which Administrative Agent shall be entitled to draw in compliance with the provisions set forth below in this Section 4.3. Administrative Agent shall not be required to authorize any disbursement of any Loans before receiving (i) payment of any such Deficiency Deposit into the Deficiency Deposit Account and the prior application of such Deficiency Deposit to the payment of Project Costs so as to bring the Loans In Balance, (ii) verification that an Equity Balancing Contribution has been made and the proceeds thereof used for the payment of Project Costs on account of the Improvements, so as to bring the Loans In Balance or loan balancing.
(iii) a Collateral Letter of Credit as set forth above. Failure of Borrower to provide satisfactory verification of an Equity Balancing Contribution or deliver a Deficiency Letter of Credit as required above shall be deemed Borrower’s election to make a Deficiency Deposit. The Deficiency Deposit shall be allocated to the Project Loan Budget and the Budget, as applicable, and shall be applied to the payment of Project Costs on account of the Improvements prior to any further disbursement of the Loans.
(c) The balances of the applicable Contingency Fund from time to time shall not be considered for purposes of determining whether the Loans are In Balance.
(2) If an Event of Default shall occur and be continuing, Administrative Agent (subject to the provisions of Section 14.3) may, at its option, in addition to exercising any other rights or remedies available under the Loan Documents, (A) apply any unexpended Deficiency Deposit to (or draw on any Collateral Letter of Credit to pay) the costs of completion of the Improvements and/or (B) apply any unexpended Deficiency Deposit to (or draw on any Collateral Letter of Credit for application of the sums drawn thereunder to) the immediate reduction of any amounts due under the Notes and the other Loan Documents. With respect to any Collateral Letter of Credit that Borrower may furnish or cause to be furnished to Administrative Agent in accordance with the terms of this Section 4.3:
(a) Administrative Agent will be entitled, among other things, to make one or more draws pursuant to and in accordance with this Agreement or the Building Loan Agreement, as applicable, by presentment thereof to the issuing bank accompanied only by Administrative Agent’s clean sight-draft, it being intended that the issuing bank shall have no right to inquire as to Administrative Agent’s right to draw upon such Collateral Letter of Credit;
(b) Administrative Agent shall be entitled, among other things, to draw upon each Collateral Letter of Credit pursuant to this Agreement or the Building Loan Agreement, as applicable, in whole, or in part from time to time, to the extent (without taking into account the Collateral Letter of Credit) the Loan is not In Balance, (i) in order to pay any costs not covered by Loan proceeds, Equity Balancing Contributions or Deficiency Deposits or (ii) upon any Event of Default; and
(c) Administrative Agent shall have the right to draw upon any Collateral Letter of Credit within ten (10) Business Days prior to the expiration date of such Collateral Letter of Credit and each renewal and extension thereof unless, prior to such expiration date of such Collateral Letter of Credit and each renewal and extension thereof, Borrower shall have furnished a replacement, extension or renewal Collateral Letter of Credit, acceptable to Administrative Agent, it being the intent hereof that at no time shall the unexpired term of any Collateral Letter of Credit be less than ten (10) Business Days. If Administrative Agent draws upon a Collateral Letter of Credit pursuant to the terms hereof, then Administrative Agent shall hold the proceeds thereof in a Controlled Account as a Deficiency Deposit. Administrative Agent shall also be entitled to draw upon a Collateral Letter of Credit if the credit rating of the issuing bank no longer meets the standard required of a Collateral Letter of Credit and Borrower does not deliver to Administrative Agent a replacement letter of credit that otherwise conforms to the requirements for Deficiency Letters of Credit within ten (10) days following after notice of from Administrative Agent that the same from Loan is not “in balance,” deposit with Administrative Agent, or if in cash, the amount necessary to put the Loan “in balance.” No interest shall be paid by Administrative Agent reasonably believes that its rights to draw on such Collateral Letter deposited funds. Borrower hereby grants to Administrative Agent, for the benefit of Credit are Xxxxxxx, a security interest in imminent jeopardy all such deposited funds and accounts, including proceeds thereof to secure Borrower’s obligations to Lenders under the Loan Documents. All funds deposited by Borrower with Administrative Agent under this section shall be disbursed by Administrative Agent to pay Post-Closing Improvements prior to any further disbursements of not being honoredthe Loan.
Appears in 1 contract
Samples: Loan and Security Agreement (Bluegreen Vacations Holding Corp)
Loan Balancing. (1) Borrower represents that the Budget sets forth all anticipated costs to be incurred by Borrower in connection with the ownership, development, construction, financing, marketing, maintenance and leasing of the Improvements, from time to time through the Maturity Date as extended pursuant to Section 2.5 hereof. Borrower further agrees as follows:
(a) Subject to reallocations pursuant to Section 4.4 and Section 4.5, if If at any time, the projected costs anticipated to be incurred for any item of Construction Work or for the ownership, development, financing, marketing, maintenance or leasing of the Improvements through the Maturity Date exceed the amount set forth in the Budget for such item (as the same may be adjusted in accordance with the terms of this Agreement), as determined by time Administrative Agent and the Construction Consultant notifies Borrower that, in their reasonable discretion (including any such determination that the undisbursed Loan proceeds allocated for the payment of future interest (the “Interest Reserve”) is insufficient) based on factors, including, but not limited to, (1) Administrative Agent’s projections of interest rates for period(s) up to and including reasonable judgment, the full remaining term undisbursed balance of the Loan (and permitted extensions); (2) is insufficient to pay the effect remaining amount of any Hedge Agreement; (3) cost overruns or Change Orders; or (4) failure of the Improvements to lease at the rate of absorption or otherwise at rates and terms projected by Borrowersuch Costs, then the Loans shall be deemed not “In Balance.”
(b) If the Loans are deemed not “In Balance,” then Borrower shall, at its option, either (i) within twenty (20) days of Administrative Agent’s optionnotification as aforesaid, within ten (10) Business Days after written notice from Administrative Agent either (a) deposit with Administrative Agent an amount equal to such deficiency, which Administrative Agent shall from time to time apply, or allow Borrower to apply, to such Costs, (ii) pay for such Costs, as incurred, in the amount of such deficiency so that the amount of the Loan which remains to be disbursed shall be sufficient to cover pay all remaining such Costs, and Borrower shall furnish Administrative Agent with such evidence thereof as Administrative Agent shall reasonably require and (iii) within twenty (20) days of Administrative Agent’s notification as aforesaid, deliver to Administrative Agent an irrevocable unconditional letter of credit in the amount of such deficiency issued by an Approved LC Bank (a as defined in the BLA), which letter of credit shall name Administrative Agent as the beneficiary thereof, shall be available at sight, shall otherwise be in form and substance reasonably acceptable to Administrative Agent and can be presented for payment in the Borough of Manhattan, New York (the “Deficiency DepositProject Loan Balancing LC”), which Deficiency Deposit shall be deposited with Administrative Agent in the Controlled Account (the “Deficiency Deposit Account”), (b) make one or more equity contributions to be used by Borrower to pay costs that will bring the Loans In Balance (an “Equity Balancing Contribution”), or (c) deliver a Collateral Letter of Credit in an amount such that the available proceeds thereunder would be sufficient to bring the Loans In Balance and upon which Administrative Agent shall be entitled to draw in compliance with the provisions set forth below in this Section 4.3. Administrative Agent shall not be required to authorize any disbursement of any Loans before receiving (i) payment of any such Deficiency Deposit into the Deficiency Deposit Account and the prior application of such Deficiency Deposit to the payment of Project Costs so as to bring the Loans In Balance, (ii) verification that an Equity Balancing Contribution has been made and the proceeds thereof used for the payment of Project Costs on account of the Improvements, so as to bring the Loans In Balance or (iii) a Collateral Letter of Credit as set forth above. Failure of Borrower to provide satisfactory verification of an Equity Balancing Contribution or deliver a Deficiency Letter of Credit as required above shall be deemed Borrower’s election to make a Deficiency Deposit. The Deficiency Deposit shall be allocated to the Project Loan Budget and the Budget, as applicable, and shall be applied to the payment of Project Costs on account of the Improvements prior to any further disbursement of the Loans.
(c) The balances of the applicable Contingency Fund from time to time shall not be considered for purposes of determining whether the Loans are In Balance.
(2) If an Event of Default shall occur draw on and be continuing, apply to such Costs. Borrower hereby agrees that Administrative Agent shall have a lien on and security interest in, for the benefit of Lenders, any sums deposited pursuant to clause (subject to the provisions of Section 14.3i) may, at its option, in addition to exercising any other rights or remedies available under the Loan Documents, (A) apply any unexpended Deficiency Deposit to (or draw on any Collateral Letter of Credit to pay) the costs of completion of the Improvements and/or (B) apply any unexpended Deficiency Deposit to (or draw on any Collateral Letter of Credit for application of the sums drawn thereunder to) the immediate reduction of any amounts due under the Notes above and the other Loan Documents. With respect to any Collateral Letter of Credit that Borrower may furnish or cause to be furnished to Administrative Agent in accordance with the terms of this Section 4.3:
(a) Administrative Agent will be entitled, among other things, to make one or more draws pursuant to and in accordance with this Agreement or the Building Loan Agreement, as applicable, by presentment thereof to the issuing bank accompanied only by Administrative Agent’s clean sight-draft, it being intended that the issuing bank shall have no right to inquire withdraw any such sums except for the payment of the aforesaid Costs as approved by Administrative Agent (such approval not to Administrative Agent’s right be unreasonably withheld, conditioned or delayed). Lenders shall have no obligation to draw upon such Collateral Letter make any further advances of Credit;
proceeds of the Loan until (a) the sums required to be deposited pursuant to clause (i) above have been exhausted, (b) Administrative Agent Borrower has actually paid such Costs pursuant to clause (ii) above or (c) the sums available to be drawn under any Project Loan Balancing LC have been exhausted, as the case may be, and, in any such case, the Loan is back “in balance”. Any such sums not used as provided in said clause (i) shall be entitled, among other things, released to draw upon each Collateral Letter of Credit pursuant Borrower or any Project Loan Balancing LC shall be returned to this Agreement or the Building Loan Agreement, as applicable, in whole, or in part from time to time, Borrower when and to the extent (without taking into account that Administrative Agent reasonably determines that the Collateral Letter total remaining Costs to be incurred is less than or equal to the undisbursed balance of Credit) the Loan is not In BalanceLoan; provided, (i) in order to pay any costs not covered by Loan proceedshowever, Equity Balancing Contributions or Deficiency Deposits or (ii) upon any that should an Event of Default; and
(c) Administrative Agent shall have the right to draw upon Default occur and be continuing at any Collateral Letter of Credit within ten (10) Business Days prior to the expiration date of such Collateral Letter of Credit and each renewal and extension thereof unless, time prior to such expiration date of such Collateral Letter of Credit and each renewal and extension thereofrelease or return, Borrower shall have furnished a replacement, extension or renewal Collateral Letter of Credit, acceptable to Administrative Agent, it being the intent hereof that at no time shall the unexpired term of any Collateral Letter of Credit be less than ten (10) Business Days. If Administrative Agent draws upon a Collateral Letter shall, at the option of Credit pursuant the Required Lenders, apply such amounts on deposit or available under the Project Loan Balancing LC either to such Costs or to the terms hereof, then Administrative Agent shall hold immediate reduction of outstanding principal and/or interest under the proceeds thereof in a Controlled Account as a Deficiency Deposit. Administrative Agent shall also be entitled to draw upon a Collateral Letter of Credit if the credit rating of the issuing bank no longer meets the standard required of a Collateral Letter of Credit and Borrower does not deliver to Administrative Agent a replacement letter of credit that otherwise conforms to the requirements for Deficiency Letters of Credit within ten (10) days following notice of the same from Administrative Agent, or if Administrative Agent reasonably believes that its rights to draw on such Collateral Letter of Credit are in imminent jeopardy of not being honoredNotes.
Appears in 1 contract
Loan Balancing. (1) Borrower represents Anything contained in this Agreement to the contrary notwithstanding, it is expressly understood and agreed that the Budget sets forth Loan shall at all anticipated costs times be "IN BALANCE." The Loan shall be deemed to be incurred by Borrower "IN BALANCE" only at such time and from time to time, as Agent may determine in its reasonable discretion, that the then undisbursed portion of the Loan and the then unpaid portion of the Required Equity (it being expressly understood that no Advances of the Loans shall be made until the Required Equity is fully paid) equals or exceeds the amount necessary for the timely and full payment of all costs and expenses relative to construction and leasing of the Project, including without limitation, all Hard Costs and Soft Costs for (i) all work done and not theretofore paid for or to be done in connection with the ownership, development, construction, financing, marketing, maintenance and leasing completion of the Improvements, from time to time through the Maturity Date as extended pursuant to Section 2.5 hereof. Borrower further agrees as follows:
(a) Subject to reallocations pursuant to Section 4.4 and Section 4.5, if at any time, the projected costs anticipated to be incurred for any item of Construction Work or for the ownership, development, financing, marketing, maintenance or leasing construction of the Improvements through the Maturity Date exceed the amount set forth in the Budget for such item (as the same may be adjusted in accordance with the terms of this Agreement)Plans, as determined by Administrative Agent applicable Requirements and the Construction Consultant in their reasonable discretion (including any such determination that the undisbursed Loan proceeds allocated for the payment of future interest (the “Interest Reserve”) is insufficient) based on factorsGround Lease, including, but not limited towithout limitation, (1) Administrative Agent’s projections the installation of interest rates all utility services, fixtures and equipment required for period(s) up access to and including the full remaining term of the Loan (and permitted extensions); (2) the effect of any Hedge Agreement; (3) cost overruns or Change Orders; or (4) failure operation of the Improvements both on-site and off-site, and (ii) all other costs incurred and not theretofore paid for, or to lease at be incurred in connection with the rate Premises, including, without limitation all Hard Costs, all Soft Costs, all interest on the Loan, and the amount of absorption any interest reserve or otherwise at rates and terms projected interest contingency (as reasonably determined by BorrowerAgent). Borrower agrees that if Agent reasonably determines that the Loxx xx xxt "IN BALANCE", then the Loans shall be deemed not “In Balance.”
(b) If the Loans are deemed not “In Balance,” then Borrower shall, at Administrative Agent’s option, within ten thirty (1030) Business Days days after written notice from Administrative demand by Agent, deposit the deficiency with Agent either (a) deposit with Administrative Agent an amount sufficient to cover such deficiency (a “Deficiency Deposit”the "DEFICIENCY DEPOSIT"), which Deficiency Deposit shall first be deposited with Administrative Agent in the Controlled Account (the “Deficiency Deposit Account”), (b) make one or more equity contributions to be used by Borrower to pay costs that will bring the Loans In Balance (an “Equity Balancing Contribution”), or (c) deliver a Collateral Letter of Credit in an amount such that the available proceeds thereunder would be sufficient to bring the Loans In Balance and upon which Administrative Agent shall be entitled to draw in compliance with the provisions set forth below in this Section 4.3. Administrative Agent shall not be required to authorize any disbursement of any Loans exhausted before receiving (i) payment of any such Deficiency Deposit into the Deficiency Deposit Account and the prior application of such Deficiency Deposit to the payment of Project Costs so as to bring the Loans In Balance, (ii) verification that an Equity Balancing Contribution has been made and the proceeds thereof used for the payment of Project Costs on account of the Improvements, so as to bring the Loans In Balance or (iii) a Collateral Letter of Credit as set forth above. Failure of Borrower to provide satisfactory verification of an Equity Balancing Contribution or deliver a Deficiency Letter of Credit as required above shall be deemed Borrower’s election to make a Deficiency Deposit. The Deficiency Deposit shall be allocated to the Project Loan Budget and the Budget, as applicable, and shall be applied to the payment of Project Costs on account of the Improvements prior to any further disbursement of the Loans.
(c) The balances Loans is made, or, if the Loan is not in balance due, in whole or in part, to the insufficiency of the applicable Contingency Fund interest reserve line item of the Budget, at Borrower's option, in lieu of making a Deficiency Deposit with respect to such interest deficiency, direct the Agent, by written notice, to permanently reduce the remaining available Development Fee line item of the Budget in sufficient amount to increase the interest reserve line item of the Budget and thereby cause the Loan to then be "in balance" which notice shall be accompanied by the written consent of the Developer to such permanent reduction of the payment of the Development Fee from time Loan proceeds. Notwithstanding anything contained in the foregoing to time the contrary, Borrower shall comply with all requirements of the New York Lien Law. The Lenders shall not be considered for purposes obligated to make Advances and Agent shall not be obligated to make any Loan disbursement of determining whether the Loans are In Balance.
(2) If an Event proceeds of Default shall occur Advances if and be continuing, Administrative Agent (subject to the provisions of Section 14.3) may, at its option, in addition to exercising any other rights or remedies available under so long as the Loan Documents, is not in balance. Among the various events that could cause the Loan to be "OUT OF BALANCE" are determinations by Agent that (A) apply any unexpended Deficiency Deposit to (or draw on any Collateral Letter of Credit to payi) the costs of completion of Budget is insufficient or inadequate, or (ii) the Improvements and/or (Bbased upon the progress and pace of construction through the date of such determination) apply any unexpended Deficiency Deposit to (or draw on any Collateral Letter of Credit for application of the sums drawn thereunder to) the immediate reduction of any amounts due under the Notes will not be Completed and the other Loan Documents. With respect to any Collateral Letter of Credit that Borrower may furnish or cause to be furnished to Administrative Agent occupied in accordance with the terms Occupancy Schedule set forth on EXHIBIT F. In making any determination as to the projected interest component of this Section 4.3:
(a) Administrative any completion/lease up cost calculation, Agent will be entitledshall use the then-current rates on the Advances. In making any determination as to whether the Loan is in balance, Agent shall consider, among other things, to make one or more draws pursuant to and the Budget, the amount available in accordance with this Agreement or the Building Loan Agreement, as applicable, by presentment thereof to the issuing bank accompanied only by Administrative Agent’s clean sight-draft, it being intended that the issuing bank shall have no right to inquire as to Administrative Agent’s right to draw upon such Collateral Letter of Credit;
(b) Administrative Agent shall be entitled, among other things, to draw upon each Collateral Letter of Credit pursuant to this Agreement or the Building Loan Agreement, as applicable, in whole, or in part from time to time, to the extent (without taking into account the Collateral Letter of Credit) the Loan is not In Balance, (i) in order to pay any costs not covered by Loan proceeds, Equity Balancing Contributions or Deficiency Deposits or (ii) upon any Event of Default; and
(c) Administrative Agent shall have the right to draw upon any Collateral Letter of Credit within ten (10) Business Days prior to the expiration date of such Collateral Letter of Credit and each renewal and extension thereof unless, prior to such expiration date of such Collateral Letter of Credit and each renewal and extension thereof, Borrower shall have furnished a replacement, extension or renewal Collateral Letter of Credit, acceptable to Administrative Agent, it being the intent hereof that at no time shall the unexpired term of any Collateral Letter of Credit be less than ten (10) Business Days. If Administrative Agent draws upon a Collateral Letter of Credit pursuant to the terms hereof, then Administrative Agent shall hold the proceeds thereof in a Controlled Account as a Deficiency Deposit. Administrative Agent shall also be entitled to draw upon a Collateral Letter of Credit if the credit rating Contingency line item of the issuing bank no longer meets Budget, the standard required progress of a Collateral Letter of Credit construction and Borrower does not deliver to Administrative Agent a replacement letter of credit that otherwise conforms to overall the requirements for Deficiency Letters of Credit within ten (10) days following notice status of the same from Administrative Agent, or if Administrative Agent reasonably believes that its rights to draw on such Collateral Letter of Credit are in imminent jeopardy of not being honoredProject.
Appears in 1 contract
Samples: Soft Cost Loan Agreement (Brookdale Living Communities Inc)