Utilization of Net Proceeds. (a) Subject as hereinafter provided in Section 4.6(b) below, Net Proceeds must be utilized either for payment of the Obligations or for the restoration of the Eligible Property, as determined by Lender in the exercise of its sole discretion. (b) Lender shall allow Borrower to apply the Net Proceeds to restoration as permitted pursuant to the terms hereof, including but not limited to Section 4.6(c), in accordance with the following terms and conditions and provided the same are fully satisfied and complied with, as determined by Lender in the exercise of its sole discretion: (i) the cost of such repair and restoration shall not exceed $500,000.00; (ii) prior to commencement of restoration and from time to time during restoration, Lender may require Borrower to deposit additional monies with Lender in amounts which, in Lender’s judgment, are sufficient to defray all costs to be incurred to complete the restoration and all costs associated therewith, including labor, materials, architectural and design fees and expenses and contractor’s fees and expenses (and Borrower shall make all such deposits when and as required by Lender), and Lender shall have first approved a budget and cost breakdown for the restoration, together with a disbursement schedule, in detail satisfactory to Lender; (iii) prior to commencement of restoration and disbursement of any amount of the proceeds, from time to time, Borrower shall demonstrate to the satisfaction of Lender that the Borrower has the financial ability during the period of restoration, to continue to make monthly principal and/or interest payments (as the case may be) under the Note and the Swap Contract as the same become due, and to continue to pay the carrying costs of the Property (including, without limitation, taxes and insurance payments) as the same become due; (iv) prior to commencement of restoration and disbursement of any amount of the proceeds, the contracts, contractors, plans and specifications for the restoration shall have been approved by Lender in its reasonable discretion and all governmental authorities having jurisdiction, with all permits for the same having been issued; (v) all restoration work shall be done under fixed price contracts and Borrower shall have executed and delivered to Lender an assignment of all such contracts, with contractor’s consent and acknowledgment attached thereto, all in form and content as required by Lender; (vi) at the time of any disbursement, no Event of Default shall have occurred and be continuing or Default shall exist and no mechanics’ or materialmen’s liens shall have been filed and remain undischarged; (vii) disbursements from the Restoration Fund shall be made in the manner at such times and in accordance with Lender’s customary requirements for construction loans and disbursement of loan proceeds with respect to the construction of multifamily projects and improvements; (viii) Borrower will pay the cost of Lender’s inspecting architect or engineer and the cost of any reasonable attorney’s fees and disbursements incurred by Lender in connection with such restoration; (ix) Lender shall have the option to retain up to ten percent (10%) of the cost of all work until the restoration is completed, as determined by Lender’s inspector, and all occupancy permits therefor have been issued; (x) any amount of the proceeds remaining upon completion of restoration shall be applied to any part of the Obligations and in any order (notwithstanding that any of the Obligations may not then be otherwise due and payable); (xi) Borrower provides evidence satisfactory to the Lender that construction of the Improvements can be completed no later than six (6) months prior to the Maturity Date; and (xii) Prior to commencement of restoration, unless otherwise approved by Lender in its sole discretion, Borrower has demonstrated to Lender that all of the Improvements at the Property can be repaired and restored, as a matter of right, to exactly as existed before any and all such condemnation, damage or destruction, including, without limitation, without loss of the total number of apartment units, change in composition of 1, 2 and/or 3 bedroom units, loss of parking or any other aspect of the Improvements. (c) If Net Proceeds are to be utilized for the restoration of the Eligible Property, the Net Proceeds, together with any other funds deposited with Lender for that purpose, must be deposited in a Borrower’s Deposit Account, which shall be an interest-bearing account, with all accrued interest to become part of Borrower’s deposit. Borrower agrees that it
Appears in 1 contract
Samples: Loan Agreement
Utilization of Net Proceeds. (a) Subject as hereinafter provided in Section 4.6(b) below, Net Proceeds must be utilized either for payment of the Obligations or for the restoration of the Eligible Property, as determined by Lender in the exercise of its sole discretion.
(b) Lender shall allow Borrower to apply the Net Proceeds to restoration as permitted pursuant to the terms hereof, including but not limited to Section 4.6(c), in accordance with the following terms and conditions and provided the same are fully satisfied and complied with, as determined by Lender in the exercise of its sole discretion:
(i) the cost of such repair and restoration shall not exceed $500,000.00;
(ii) prior to commencement of restoration and from time to time during restoration, Lender may require Borrower to deposit additional monies with Lender in amounts which, in Lender’s judgment, are sufficient to defray all costs to be incurred to complete the restoration and all costs associated therewith, including labor, materials, architectural and design fees and expenses and contractor’s fees and expenses (and Borrower shall make all such deposits when and as required by Lender), and Lender shall have first approved a budget and cost breakdown for the restoration, together with a disbursement schedule, in detail satisfactory to Lender;
(iii) prior to commencement of restoration and disbursement of any amount of the proceeds, from time to time, Borrower shall demonstrate to the satisfaction of Lender that the Borrower has the financial ability during the period of restoration, to continue to make monthly principal and/or interest payments (as the case may be) under the Note and the Swap Contract as the same become due, and to continue to pay the carrying costs of the Property (including, without limitation, taxes and insurance payments) as the same become due;
(iv) prior to commencement of restoration and disbursement of any amount of the proceeds, the contracts, contractors, plans and specifications for the restoration shall have been approved by Lender in its reasonable discretion and all governmental authorities having jurisdiction, with all permits for the same having been issued;
(v) all restoration work shall be done under fixed price contracts and Borrower shall have executed and delivered to Lender an assignment of all such contracts, with contractor’s consent and acknowledgment attached thereto, all in form and content as required by Lender;
(vi) at the time of any disbursement, no Event of Default shall have occurred and be continuing or Default shall exist and no mechanics’ or materialmen’s liens shall have been filed and remain undischarged;
(vii) disbursements from the Restoration Fund shall be made in the manner at such times and in accordance with Lender’s customary requirements for construction loans and disbursement of loan proceeds with respect to the construction of multifamily projects and improvements;
(viii) Borrower will pay the cost of Lender’s inspecting architect or engineer and the cost of any reasonable attorney’s fees and disbursements incurred by Lender in connection with such restoration;
(ix) Lender shall have the option to retain up to ten percent (10%) of the cost of all work until the restoration is completed, as determined by Lender’s inspector, and all occupancy permits therefor have been issued;
(x) any amount of the proceeds remaining upon completion of restoration shall be applied to any part of the Obligations and in any order (notwithstanding that any of the Obligations may not then be otherwise due and payable);
(xi) Borrower provides evidence satisfactory to the Lender that construction of the Improvements can be completed no later than six (6) months prior to the Maturity Date; and
(xii) Prior to commencement of restoration, unless otherwise approved by Lender in its sole discretion, Borrower has demonstrated to Lender that all of the Improvements at the Property can be repaired and restored, as a matter of right, to exactly as existed before any and all such condemnation, damage or destruction, including, without limitation, without loss of the total number of apartment units, change in composition of 1, 2 and/or 3 bedroom units, loss of parking or any other aspect of the Improvements.
(c) If Net Proceeds are to be utilized for the restoration of the Eligible Property, the Net Proceeds, together with any other funds deposited with Lender for that purpose, must be deposited in a Borrower’s Deposit Account, which shall be an interest-bearing account, with all accrued interest to become part of Borrower’s deposit. Borrower agrees that itit shall include all interest and earnings on any such deposit as its income (and, if Borrower is a partnership or other pass-through entity, the income of its partners, members or beneficiaries, as the case may be), and shall be the owner of all funds on deposit in the Borrower’s Deposit Account for federal and applicable state and local tax purposes. Lender shall have the exclusive right to manage and control all funds in the Borrower’s Deposit Account, but Lender shall have no fiduciary duty with respect to such funds. Thereafter, Lender will advance the deposited funds from time to time to Borrower for the payment of costs of restoration of the Eligible Property upon presentation of evidence acceptable to Lender that such restoration has been completed satisfactorily and lien-free. Any account fees and charges may be deducted from the balance, if any, in the Borrower’s Deposit Account. Borrower grants to Lender a security interest in the Borrower’s Deposit Account and all funds hereafter deposited to such deposit account, and any proceeds thereof, as security for the Obligations. Such security interest shall be governed by the Uniform Commercial Code of the State, and Lender shall have available to it all of the rights and remedies available to a secured party thereunder. The Borrower’s Deposit Account may be established and held in such name or names as Lender shall deem appropriate, including in the name of Lender. Borrower hereby constitutes and appoints Lender and any officer or agent of Lender its true and lawful attorneys-in-fact with full power of substitution to open the Borrower’s Deposit Account and to do any and every act that Borrower might do on its own behalf to fulfill the terms of this Section 4.6. To the extent permitted by Law, Borrower hereby ratifies all that said attorneys shall lawfully do or cause to be done by virtue hereof. It is understood and agreed that this power of attorney, which shall be deemed to be a power coupled with an interest, cannot be revoked.
Appears in 1 contract
Samples: Loan Agreement (Resource Real Estate Opportunity REIT, Inc.)
Utilization of Net Proceeds. (a) Subject as hereinafter provided in Section 4.6(b) below, Net Proceeds must be utilized either for payment of the Obligations or for the restoration of the Eligible Property; provided, as determined by Lender in the exercise that, except during an Event of its sole discretion.
(b) Lender shall allow Borrower to apply Default or Trigger Period, if the Net Proceeds to restoration as permitted pursuant to are less than $1,000,000, the terms hereof, including but not limited to Section 4.6(c), in accordance with the following terms and conditions and provided the same are fully satisfied and complied with, as determined by Lender in the exercise of its sole discretion:
(i) the cost of such repair and restoration net proceeds shall not exceed $500,000.00;
(ii) prior to commencement of restoration and from time to time during restoration, Lender may require Borrower to deposit additional monies with Lender in amounts which, in Lender’s judgment, are sufficient to defray all costs to be incurred to complete utilized for the restoration and all costs associated therewith, including labor, materials, architectural and design fees and expenses and contractor’s fees and expenses (and Borrower shall make all such deposits when and as required by Lender), and Lender shall have first approved a budget and cost breakdown for the restoration, together with a disbursement schedule, in detail satisfactory to Lender;
(iii) prior to commencement of restoration and disbursement of any amount of the proceeds, from time to time, Borrower shall demonstrate to the satisfaction of Lender that the Borrower has the financial ability during the period of restoration, to continue to make monthly principal and/or interest payments (as the case may be) under the Note and the Swap Contract as the same become due, and to continue to pay the carrying costs of the Property (includingunless Borrower agrees to apply same to the Obligations. Otherwise, without limitation, taxes and insurance payments) as the same become due;
(iv) prior to commencement of restoration and disbursement of any amount of the proceeds, the contracts, contractors, plans and specifications Net Proceeds may be utilized for the restoration shall have been approved by Lender in its reasonable discretion and all governmental authorities having jurisdiction, with all permits for of the same having been issued;
(v) all restoration work shall be done under fixed price contracts and Borrower shall have executed and delivered to Lender an assignment of all such contracts, with contractor’s consent and acknowledgment attached thereto, all in form and content as required by Lender;
(vi) at the time of any disbursement, Property only if no Event of Default shall have occurred and be continuing or Default shall then exist and no mechanics’ or materialmen’s liens shall have been filed and remain undischarged;
(vii) disbursements from the Restoration Fund shall be made only if in the manner at reasonable judgment of Lender (i) there has been no material adverse change in the financial viability of the Improvements (as may be restored after such times and in accordance Casualty or Condemnation), (ii) the Net Proceeds, together with Lender’s customary requirements other funds deposited with Lender for construction loans and disbursement of loan proceeds with respect that purpose, are sufficient to the construction of multifamily projects and improvements;
(viii) Borrower will pay the cost of Lender’s inspecting architect or engineer and the cost of any reasonable attorney’s fees and disbursements incurred by Lender in connection with such restoration;
(ix) Lender shall have the option to retain up to ten percent (10%) of the cost of all work until the restoration is completed, as determined pursuant to a budget and plans and specifications approved by Lender’s inspector, and all occupancy permits therefor have been issued;
not to be unreasonably withheld, conditioned TERM LOAN AGREEMENT (xRCA Xxxxxxx Springs) any amount of Page 8 or delayed, (iii) the proceeds remaining upon completion of restoration shall be applied to any part of the Obligations and in any order (notwithstanding that any of the Obligations may not then be otherwise due and payable);
(xi) Borrower provides evidence satisfactory to the Lender that construction of the Improvements can be completed no later than six (6) months prior to the Maturity Date; and
final maturity of the Loan and prior to the date required by any permanent loan commitment or any purchase and sale agreement or by any Lease affecting more than 10,000 square feet, and (xiiiv) Prior to commencement of following restoration, unless otherwise approved the Property will have a loan-to-value ratio no higher than that existing immediately prior to such Casualty or Condemnation, based on a new “as-is” appraisal adjusted by Lender in its sole discretion, Borrower has demonstrated to Lender that all include the projected net operating income from the to-be-restored portion of the Improvements at the Property can Property. Otherwise, Net Proceeds shall be repaired and restored, as a matter of right, to exactly as existed before any and all such condemnation, damage or destruction, including, without limitation, without loss utilized for payment of the total number of apartment units, change in composition of 1, 2 and/or 3 bedroom units, loss of parking or any other aspect of the ImprovementsObligations.
(cb) If Net Proceeds are to be utilized for the restoration of the Eligible Property, the Net Proceeds, together with any other funds deposited with Lender for that purpose, must be deposited in a Borrower’s Deposit Account, which shall be an interest-bearing account, with all accrued interest to become part of Borrower’s deposit. Borrower agrees that itit shall include all interest and earnings on any such deposit as its income (and, if Borrower is a partnership or other pass-through entity, the income of its partners, members or beneficiaries, as the case may be), and shall be the owner of all funds on deposit in the Borrower’s Deposit Account for federal and applicable state and local tax purposes. Subject to the obligations of Lender to disburse Net Proceeds under subsection (a) above and this subsection (b), Lender shall have the exclusive right to manage and control all funds in the Borrower’s Deposit Account, but Lender shall have no fiduciary duty with respect to such funds. Prior to the advance by Lender of any funds so deposited and the commencement of such restoration, Borrower shall take all steps necessary to avoid the imposition of any mechanics’ liens on the Property or the Improvements. Thereafter, Lender will advance the deposited funds from time to time to Borrower for the payment of costs of restoration of the Property upon presentation of evidence acceptable to Lender that such restoration has been completed satisfactorily and lien-free. If at any time Lender reasonably determines that there is a deficiency in the funds available in the Borrower’s Deposit Account to complete the restoration as contemplated, then Borrower will promptly deposit in the Borrower’s Deposit Account additional funds equal to the amount of the deficiency. Any account fees and charges may be deducted from the balance, if any, in the Borrower’s Deposit Account. Borrower grants to Lender a security interest in the Borrower’s Deposit Account and all funds hereafter deposited to such deposit account, and any proceeds thereof, as security for the Obligations. Such security interest shall be governed by the Uniform Commercial Code of the State, and Lender shall have available to it all of the rights and remedies available to a secured party thereunder. The Borrower’s Deposit Account may be established and held in such name or names as Lender shall deem appropriate, including in the name of Lender. Borrower hereby constitutes and appoints Lender and any officer or agent of Lender its true and lawful attorneys-in-fact with full power of substitution to open the Borrower’s Deposit Account and to do any and every act that Borrower might do on its own behalf to fulfill the terms of this Section 4.6. To the extent permitted by Law, Borrower hereby ratifies all that said attorneys shall lawfully do or cause to be done by virtue hereof. It is understood and agreed that this power of attorney, which shall be deemed to be a power coupled with an interest, cannot be revoked.
Appears in 1 contract
Samples: Term Loan Agreement (American Realty Capital - Retail Centers of America, Inc.)
Utilization of Net Proceeds. (a) Subject as hereinafter provided in Section 4.6(b) below, Net Cash Proceeds arising from any Event of Loss with respect to any Real Estate must be utilized either for payment of the Obligations or for the restoration of such Real Estate. Net Cash Proceeds may be utilized for the Eligible Propertyrestoration of such Real Estate only if no Default shall exist and only if in the reasonable judgment of the Agent (i) there has been no material adverse change in the financial viability of the improvements on such Real Estate, (ii) the Net Cash Proceeds, together with other funds deposited with the Agent for that purpose, are sufficient to pay the cost of the restoration pursuant to a budget and plans and specifications approved by the Agent, (iii) the restoration can be completed prior to the Maturity Date and prior to the date required by any purchase and sale agreement or by any Lease, and (iv) following restoration, such Real Estate will have a fair market value at least equal to its fair market value immediately prior to the Event of Loss. Otherwise, Net Cash Proceeds shall be utilized for payment of the Obligations in such order and in such proportions as determined by Lender the Agent in the exercise of its sole discretion.
(b) Lender shall allow Borrower to apply the Net Proceeds to restoration as permitted pursuant to the terms hereof, including but not limited to Section 4.6(c), in accordance with the following terms and conditions and provided the same are fully satisfied and complied with, as determined by Lender in the exercise of its sole discretion:
(i) the cost of such repair and restoration shall not exceed $500,000.00;
(ii) prior to commencement of restoration and from time to time during restoration, Lender may require Borrower to deposit additional monies with Lender in amounts which, in Lender’s judgment, are sufficient to defray all costs to be incurred to complete the restoration and all costs associated therewith, including labor, materials, architectural and design fees and expenses and contractor’s fees and expenses (and Borrower shall make all such deposits when and as required by Lender), and Lender shall have first approved a budget and cost breakdown for the restoration, together with a disbursement schedule, in detail satisfactory to Lender;
(iii) prior to commencement of restoration and disbursement of any amount of the proceeds, from time to time, Borrower shall demonstrate to the satisfaction of Lender that the Borrower has the financial ability during the period of restoration, to continue to make monthly principal and/or interest payments (as the case may be) under the Note and the Swap Contract as the same become due, and to continue to pay the carrying costs of the Property (including, without limitation, taxes and insurance payments) as the same become due;
(iv) prior to commencement of restoration and disbursement of any amount of the proceeds, the contracts, contractors, plans and specifications for the restoration shall have been approved by Lender in its reasonable discretion and all governmental authorities having jurisdiction, with all permits for the same having been issued;
(v) all restoration work shall be done under fixed price contracts and Borrower shall have executed and delivered to Lender an assignment of all such contracts, with contractor’s consent and acknowledgment attached thereto, all in form and content as required by Lender;
(vi) at the time of any disbursement, no Event of Default shall have occurred and be continuing or Default shall exist and no mechanics’ or materialmen’s liens shall have been filed and remain undischarged;
(vii) disbursements from the Restoration Fund shall be made in the manner at such times and in accordance with Lender’s customary requirements for construction loans and disbursement of loan proceeds with respect to the construction of multifamily projects and improvements;
(viii) Borrower will pay the cost of Lender’s inspecting architect or engineer and the cost of any reasonable attorney’s fees and disbursements incurred by Lender in connection with such restoration;
(ix) Lender shall have the option to retain up to ten percent (10%) of the cost of all work until the restoration is completed, as determined by Lender’s inspector, and all occupancy permits therefor have been issued;
(x) any amount of the proceeds remaining upon completion of restoration shall be applied to any part of the Obligations and in any order (notwithstanding that any of the Obligations may not then be otherwise due and payable);
(xi) Borrower provides evidence satisfactory to the Lender that construction of the Improvements can be completed no later than six (6) months prior to the Maturity Date; and
(xii) Prior to commencement of restoration, unless otherwise approved by Lender in its sole discretion, Borrower has demonstrated to Lender that all of the Improvements at the Property can be repaired and restored, as a matter of right, to exactly as existed before any and all such condemnation, damage or destruction, including, without limitation, without loss of the total number of apartment units, change in composition of 1, 2 and/or 3 bedroom units, loss of parking or any other aspect of the Improvements.
(c) If Net Cash Proceeds are to be utilized for the restoration of such Real Estate, (i) the Eligible PropertyBorrowers shall, at their sole cost and expense, promptly commence and diligently and continuously perform to completion the restoration in a good and workmanlike manner and in compliance with all Laws and the requirements of the Permitted Liens, whether or not the Borrowers shall have satisfied the requirements of this Section 7.08 in order to cause the Net Cash Proceeds to be made available for such restoration and whether or not such insurance proceeds on account of the Casualty shall be sufficient for such purpose, and (ii) the Net Cash Proceeds, together with any other funds deposited with Lender the Agent for that purpose, must be deposited in an account maintained by the First Lien Lender that is subject to a Control Agreement or, upon Payment in Full of First Lien Priority Debt, in an account maintained by the Agent that is subject to a Control Agreement, solely for the purposes described in this Section 7.08 (“Borrower’s Deposit Account”), which shall be a non-interest-bearing account. Subject to the terms of Section 4.08 and this Section 7.08, the Agent shall have the exclusive right to manage and control all funds in the Borrower’s Deposit Account, but the Agent shall have no fiduciary duty with respect to such funds. Prior to the advance by the Agent of any funds so deposited and the commencement of such restoration, the Borrowers shall take all steps necessary to avoid the imposition of any mechanics’ liens on the Real Estate or the improvements thereon. Thereafter, the Agent will advance the deposited funds from time to time to the Borrowers for the payment of costs of restoration of the Real Estate upon presentation of evidence by the Borrowers acceptable to the Agent that such portion of the restoration has been completed satisfactorily and Lien-free. If at any time the Agent reasonably determines that there is a deficiency in the funds available in the Borrower’s Deposit Account to complete the restoration as contemplated, then the Borrowers shall promptly deposit in the Borrower’s Deposit Account additional funds equal to the amount of the deficiency. Any account fees and charges may be deducted from the balance, if any, in the Borrower’s Deposit Account.
(c) Each Borrower grants to Agent, on behalf of the Credit Parties, a security interest in the Borrower’s Deposit Account and all funds hereafter deposited to such deposit account, and any proceeds thereof, as security for the Obligations. Such security interest shall be governed by the UCC, and the Agent shall have available to it all of the rights and remedies available to a secured party thereunder. The Borrower’s Deposit Account may be established and held in such name or names as the Agent shall deem appropriate, including in the name of the Agent. Each Borrower hereby constitutes and appoints the Agent and any officer or agent of the Agent its true and lawful attorneys-in-fact with full power of substitution to open the Borrower’s Deposit Account and to do any and every act that Borrower might do on its own behalf to fulfill the terms of this Section 7.08; provided, however, the Agent shall not exercise such power (other than the power to open the Borrower’s Deposit Account) unless an Event of Default has occurred and is continuing. To the extent permitted by Law, each Borrower hereby ratifies all that said attorneys shall lawfully do or cause to be done by virtue hereof. It is understood and agreed that this power of attorney, which shall be deemed to be a power coupled with an interest-bearing account, with all accrued interest to become part of Borrower’s deposit. Borrower agrees that itcannot be revoked.
Appears in 1 contract
Samples: Second Lien Credit and Security Agreement (Katy Industries Inc)
