MASTER CONSTRUCTION LOAN AGREEMENT
THIS MASTER CONSTRUCTION LOAN AGREEMENT, dated as of this 4th day of
August, 1997 by and between XXXXXXXX XXXX BTS, INC., a Delaware corporation,
and KEYBANK NATIONAL ASSOCIATION, a national banking association;
WITNESSETH:
The parties hereto, in consideration of their mutual covenants
hereinafter set forth and intending to be legally bound hereby, agree as
follows:
ARTICLE I
DEFINITIONS
1.01. CERTAIN DEFINITIONS. The following words and terms shall have
the following meanings, respectively, unless the context hereof clearly
otherwise requires:
"Advance" shall mean an advance to a Borrower on the account of a
Project Loan made by the Bank from time to time pursuant to this
Agreement.
"Agreement" shall mean this Master Construction Loan Agreement, as
the same may be supplemented, modified or amended from time to time.
"Applicable Rate" shall mean the Prime Rate Option and the LIBOR
Rate Option, as applicable.
"Architect" shall mean the design architect for a Project.
"Architect's Letter" shall mean a letter in the form attached
hereto as EXHIBIT O furnished to the Bank by the Architect for a Project.
"Architectural Agreement" shall mean, with respect to a Project,
the agreement between the Borrower owning such Project and the Architect
for such Project, as the same may be supplemented, modified or amended
from time to time.
"Assignment of Rents" shall mean an Assignment of Rents and Leases
in the form attached hereto as EXHIBIT E, with blanks completed
appropriately, given by a Borrower to the Bank with respect to a Project
as security for the Borrower's obligations under the Project Loan made in
respect of such Project, subject to such changes as may be required to
comply with the requirements of the law of the state in which such
Project is located, as the same may be supplemented, modified or amended
from time to time.
"Bank" shall mean KeyBank National Association, a national banking
association.
"Banking Day" shall mean a day on which banks are open for
commercial business in Indianapolis, Indiana and for dealings in
Eurodollars in London, England.
"Borrower" shall mean a limited liability company which will be
the owner of a Project and the borrower under the Project Loan made in
respect of such Project. The managing member of each Borrower shall be
Developer.
"Building Contracts" shall mean for a Project the Construction
Contract and the Architectural Agreement.
"Change Order" shall mean any amendment, modification, or revision
to the Plans and Specifications or a Building Contract for a Project.
"Closing" shall mean with respect to a Project Loan, the execution
and delivery of the Project Loan Document in respect thereof by the
Borrower thereunder to the Bank.
"Closing Date" shall mean with respect to a Project Loan, the date
of the Closing thereof.
"Collateral Assignment of Certificate of Deposit" shall mean a
Collateral Assignment and Security Agreement in the form attached hereto
as EXHIBIT G given by a Borrower to the Bank as security for the
Borrower's obligations under a Project Loan, as the same may be
supplemented, modified or amended from time to time.
"Collateral Assignment of Purchase Agreement" shall mean a
Collateral Assignment of Purchase Agreement in the form attached hereto
as EXHIBIT I, with blanks completed appropriately, given by a Borrower to
the Bank with respect to a Project as security for the Borrower's
obligations under the Project Loan made in respect of such Project, as
the same may be supplemented, modified or amended from time to time.
"Collateral Pledge Agreement" shall mean a Collateral Pledge
Agreement in the form attached hereto as EXHIBIT H given by a Borrower to
the Bank as security for the Borrower's obligations under a Project Loan,
as the same may be supplemented, modified or amended from time to time.
"Commitment Fee" shall mean an amount equal to One Half of One
Percent (1/2 of 1%) of the principal amount of a Project Loan to be paid
by the Borrower thereunder to the Bank.
"Completion Date" shall mean with respect to a Project, the date
set forth in the Project Agreement relating to such Project.
"Conditional Default" shall mean any condition, event, act or
omission which, with the giving of notice or passage of time or both,
would constitute an Event of Default.
2
"Construction Contract" shall mean with respect to a Project, the
construction contract between the Borrower owning such Project and the
Contractor for such Project, as the same may be supplemented, modified or
amended from time to time.
"Contract Assignment" shall mean an Assignment in the form
attached hereto as EXHIBIT F with blanks completed appropriately, given
by a Borrower to the Bank with respect to a Project as security for such
Borrower's obligation under the Project Loan made in respect of such
Project, subject to such changes as may be required to comply with the
requirements of the law of the state in which such Project is located, as
the same may be supplemented, modified or amended from time to time.
"Contractor" shall mean the general contractor for a Project, as
approved by the Bank.
"Contractor's Letter" shall mean the letter in the form attached
hereto as EXHIBIT Q furnished to the Bank by the Contractor for a
Project.
"Conversion Date" means any date on which a Project Loan or any
portion thereof is converted from the Prime Rate Option to the LIBOR Rate
Option.
"Cost Breakdown" shall mean the cost breakdown of all Project
Costs furnished by a Borrower to the Bank with respect to a Project, as
the same may be supplemented, modified or amended from time to time.
"Debt Service Coverage Ratio" shall mean the ratio of (i)
projected total annual income to be received under an OfficeMax Lease for
an applicable Project, defined as base rent, common area maintenance
payments, insurance and real estate tax reimbursements and miscellaneous
sources, less projected total annual expenses for such Project, defined
as an annual management fee in an amount equal to Three Percent (3%) of
the projected total annual income of such Project, an annual charge of
Ten Cents ($.10) per square foot of such Project for a capital reserve
and expense of common area maintenance, insurance, real estate taxes, and
non-capitalized repairs, to (ii) the projected total annual sum of all
interest payments and principal payments on the applicable Project Loan
which would be due and payable assuming the level amortization of such
Project Loan over a period equal to the lesser of (a) twenty (20) years
or (b) the term of the applicable OfficeMax Lease, plus five (5) years,
at a per annum interest rate equal to One and Three Quarters Percent
(1.75%) above the most recent weekly average yield on United States
Treasury Securities adjusted to a constant maturity of ten (10) years.
"Default Rate" shall mean a rate of interest from time to time
which is Two Percent (2%) per annum above the Applicable Rate.
"Deposit" shall mean a One Hundred Thousand Dollar ($100,000)
xxxxxxx money deposit made by a buyer under a Project Purchase Agreement
and held by the Title Company.
"Developer" shall mean Xxxxxxxx Xxxx BTS, Inc., a Delaware
corporation.
3
"Developer Guaranty" shall mean an Unconditional Guaranty in the
form attached hereto as EXHIBIT J, with blanks completed appropriately,
given to the Bank with respect to a Project Loan by the Developer,
pursuant to which the Developer guarantees the Borrower's obligations
under such Project Loan, as the same may be supplemented, modified or
amended from time to time.
"Direct Costs" shall mean for a Project, all cost and expense
incurred or to be incurred by the Borrower owning such Project for work,
labor or Materials furnished in connection with the construction of such
Project.
"Disbursement Request" shall mean a statement of a Borrower
setting forth the amount of an Advance being requested and containing
such other information as is required by Paragraph (a) of Section 5.01
hereof.
"Environmental Indemnity Agreement" shall mean an Environmental
Indemnity Agreement in the form attached hereto as EXHIBIT N, with blanks
completed appropriately, to be executed and delivered with respect to a
Project by the Borrower under the Project Loan made in respect of such
Project and the Developer to Bank, as the same may be supplemented,
modified or amended from time to time.
"Event of Default" shall mean any of the events of default
described in Section 8.01 hereof.
"Fixtures" shall mean all personal property now or hereafter owned
by a Borrower and now or hereafter affixed to, incorporated into or to be
incorporated into, or used or useful in connection with, the Project
owned by such Borrower or any part thereof, all replacements thereof,
additions thereto and substitutions therefor.
"Governmental Authorities" shall mean the United States of
America, the state and local jurisdiction in which a Project is located
and any political subdivision thereof, and any agency, department,
commission, board, bureau or instrumentality of any of them.
"Governmental Requirement" shall mean any law, ordinance, order,
rule or regulation of any Governmental Authority, including but not
limited to laws, ordinances, orders, rules or regulations with regard to
zoning, subdivision, building, safety, fire protection or environmental
matters applicable to a Project.
"Guarantors" shall mean Developer and Xxxxxxxx Xxxx MW.
"Hazardous Materials" shall mean any flammable explosives,
radioactive materials, hazardous or toxic chemicals, materials, wastes,
by-products, pollutants, contaminants, compounds, products or substances,
including, without limitation, asbestos, polychlorinated biphenyls,
wastes, hydrocarbon or petroleum products, hazardous, regulated or toxic
substances or related materials defined in the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as
amended (42 USC Section 9601, ET SEQ.), the Hazardous Materials
Transportation Act, as amended (49 USC Section 1801, ET SEQ.), the
Resource
4
Conservation and Recovery Act, as amended (42 USC Section 6901, ET SEQ.)
and in the regulations adopted and publications promulgated pursuant
thereto, or any other federal, state or local governmental law,
ordinance, rule or regulation, and any other material, the exposure to,
or manufacture, possession, presence, use, generation, storage,
transportation, release, disposal, abatement, clean up, removal,
remediation or handling of which is prohibited, controlled or regulated
by any Governmental Requirement.
"Improvements" shall mean an OfficeMax retail facility to be
constructed by a Borrower upon a Project Site in accordance with the
applicable Plans and Specifications.
"Indirect Costs" shall mean for a Project, all cost and expense
for, incurred or to be incurred by the Borrower owning such Project in
connection with or incidental to the construction of such Project other
than Direct Costs, including, without limitation, the costs of
acquisition of a Project Site, costs of title examination and insurance,
costs of surveys, mortgage recording fees, real estate taxes and
assessments, water and sewer rents, insurance premiums, fees of the
Architect and Inspecting Architect for such Project, attorneys' fees, and
the Commitment Fee for, and interest on, the Project Loan for such
Project.
"Inspecting Architect" shall mean the independent architectural or
engineering firm employed by the Bank with respect to a Project.
"LIBOR Rate" for any day shall mean with respect to each Segment
of a proposed or existing LIBOR Rate Portion of a Project Loan
corresponding to a proposed or existing LIBOR Rate Interest Period the
rate per annum determined by the Bank to be the interest rate at which
deposits in dollars in the amount of any Advance made to a Borrower
pursuant to its Project Note, are offered by prime banks to the Bank for
the applicable LIBOR Rate Interest Period in the London interbank market
at approximately 11:00 a.m. (London time) on the day two (2) Banking Days
prior to the commencement of any LIBOR Rate Interest Period.
"LIBOR Rate Interest Period" shall mean: (a) initially the one
(1), two (2), three (3) or six (6) month period commencing initially on a
Conversion Date for a Project Loan with respect to any given election
made pursuant to Section 2.05(a) hereof and having a duration of one (1),
two (2), three (3) or six (6) months as selected by the Borrower of such
Project Loan by telephonic notice to the Bank as provided in Section
2.05(a) hereof; provided that the foregoing is subject to adjustment
pursuant to Section 2.05(c) hereof and is further subject to the
following:
i. the first LIBOR Interest Period for any
advance under a Project Loan following a conversion from
the Prime Rate Option to the LIBOR Rate Option shall
commence on the date of such conversion and end on the last
day of the then current LIBOR Interest Period; and
ii. any LIBOR Interest Period that begins on the
last Banking Day of a calendar month (or on a day for which
there is no numerically
5
corresponding day in the calendar month at the end of such
LIBOR Interest Period) shall end on the last Banking Day of a
calendar month.
"LIBOR Rate Option" shall mean a rate per annum equal to Two and
One-Quarter Percent (2 1/4%) above the LIBOR Rate.
"LIBOR Rate Portion" shall mean at any time the portion, including
the whole, of a Project Loan bearing interest at such time under the
LIBOR Rate Option.
"LIBOR Rate Reserve Requirement" means, solely to the extent that
such requirement is imposed or incurred by the Bank or any participant in
a Project Loan and solely to the extent of the Bank and such
participant's respective participatory shares in the Project Loan, for
any day, the maximum effective percentage (expressed as a decimal
fraction, rounded upward to the nearest 1/100 of 1%), as determined in
good faith by the Bank (which determination shall be conclusive), which
is in effect on such day as prescribed by the Board of Governors of the
Federal Reserve System (or any successor) for determining the maximum
reserve requirements (including without limitation supplemental, marginal
and emergency reserve requirements) for a member bank of the Federal
Reserve System in respect of "eurocurrency liabilities" (or in respect of
any other category of liabilities which includes deposits by reference to
which the LIBOR Rate is determined or any category of extensions of
credit or other assets which includes loans by non-United States offices
of any lender to United States residents). The LIBOR Rate shall be
adjusted automatically with respect to any LIBOR Rate Portion of the Loan
outstanding on the effective date of any change in the LIBOR Rate Reserve
Requirement, as of such effective date.
"Loan" shall mean the aggregate amount of the Project Loans
approved by Bank pursuant to this Agreement, which amount shall in no
event exceed the principal sum of Ten Million Dollars ($10,000,000)
outstanding at any time.
"Major Contractor" shall mean the party furnishing materials,
labor or services to a Borrower under a Major Contract.
"Major Contract" shall mean a contract in respect of a Project
entered into by the Borrower owning such Project or a Contractor for the
furnishing of Materials, labor or services for such Project for a cost in
excess of Fifty Thousand Dollars ($50,000).
"Materials" shall mean all materials, supplies, chattels,
fixtures, machinery, equipment or other articles of property furnished or
to be furnished in connection with the construction of, and incorporated
or to be incorporated into, a Project, and shall include all replacements
thereof, additions thereto and substitutions therefor.
"Mortgage" shall mean a Real Estate Mortgage and Security
Agreement in the form of EXHIBIT D attached hereto, with blanks completed
appropriately, or a deed of trust given by a Borrower to the Bank with
respect to a Project as security for the Borrower's obligations under the
Project Loan made in respect of such Project, subject to such changes
6
as may be required to comply with the requirements of the laws of the
state in which the Project is located, as the same may be supplemented,
modified or amended from time to time.
"Mortgagor's Affidavit" shall mean a Mortgagor's Closing Affidavit
in the form of EXHIBIT M attached hereto, with blanks completed
appropriately, given by a Borrower to the Bank with respect to a Project.
"OfficeMax" shall mean OfficeMax, Inc., an Ohio corporation.
"OfficeMax Lease" shall mean a lease of a Project by and between
the Borrower owning such Project, as landlord, and OfficeMax, as tenant.
"OfficeMax Subordination, Non-Disturbance and Attornment
Agreement" shall mean a Subordination, Non-Disturbance and Attornment
Agreement in the form of EXHIBIT P attached hereto, with blanks completed
appropriately, entered into by the Bank, a Borrower and OfficeMax with
respect to the Project owned by such Borrower, subject to such changes as
may be required to comply with the requirements of the law of the state
in which the Project is located, as the same may be supplemented,
modified or amended from time to time.
"Option" shall mean the interest rate option applicable to a
Project Loan (or a portion thereof) selected by the Borrower thereunder
from the LIBOR Rate Option and the Prime Rate Option.
"Personal Property" shall mean all tangible personal property
owned by a Borrower and now or at any time hereafter located on or at the
Project Site owned by such Borrower or used in connection therewith or
with the Improvements constructed or to be constructed thereon.
"Plans and Specifications" shall mean the plans and specifications
for the construction of the Improvements on an applicable Project Site
prepared by the Architect therefor and approved on or prior to the date
of the initial Advance for the applicable Project by the Borrower, the
Bank, OfficeMax and the Contractor, including all working drawings and
shop drawings prepared for use in connection therewith, as the same may
be finalized, supplemented, modified or amended from time to time by
Change Orders permitted hereunder.
"Prime Rate" shall mean the interest rate per annum announced from
time to time by KeyBank National Association as its prime rate. Each
interest rate determined by reference to the Prime Rate shall change
automatically from time to time, effective as of the effective date of
each change in the Prime Rate. The Bank's Prime Rate is not necessarily
the rate at which the Bank lends its funds. The Prime Rate is only an
index rate from which interest rates actually charged to the Bank's
customers may be measured. The use of the Prime Rate does not constitute
a commitment by the Bank lend money at a preferred rate.
"Prime Rate Option" shall mean a rate per annum equal to the Prime
Rate.
7
"Prime Rate Portion" shall mean at any time the portion, including
the whole, of a Project Loan bearing interest at such time under the
Prime Rate Option.
"Project Agreement" shall mean a Project Agreement in the form of
EXHIBIT A attached hereto, with blanks completed appropriately, to be
entered into by the Bank and a Borrower, pursuant to which Bank approves
a Project for funding hereunder as required by Section 2.02, as the same
may be supplemented, modified or amended from time to time.
"Project" shall mean a Project Site and the Improvements to be
constructed thereon.
"Project Certificate of Deposit" shall mean a certificate of
deposit in the amount of One Hundred Thousand Dollars ($100,000) issued
by the Bank or a financial institution reasonably acceptable to the Bank
in the name of a Borrower, which certificate of deposit shall serve as
security for the Borrower's obligations under the Project Loan for which
such certificate of deposit is issued.
"Project Costs" shall mean for a Project, the Direct Costs and
Indirect Costs for such Project.
"Project Letter of Credit" shall mean an unconditional irrevocable
standby letter of credit in the amount of One Hundred Thousand Dollars
($100,000) issued for the benefit of the Bank by a financial institution
reasonably acceptable to the Bank, which letter of credit shall have an
expiry of no earlier than seven (7) days after the Project Loan Maturity
Date for the Project Loan for which such Project Letter of Credit was
issued. Such letter of credit shall serve a security for the Borrower's
obligation under such Project Loan.
"Project Loan" shall mean for a Project the amount of the Loan
approved by the Bank and allocated to pay Project Costs for such Project,
as shown on the Cost Breakdown for such Project and reflected in the
Project Note and the Project Agreement for such Project.
"Project Loan Commitment Expiration Date" shall mean ___________
[one (1) year from the date hereof].
"Project Loan Documents" shall mean with respect to a Project
Loan, this Agreement, the Project Agreement, the Project Note, the
Mortgage, the Assignment of Rents, the Contract Assignment, the
Collateral Assignment of Certificate of Deposit (if executed in
connection therewith), the Collateral Assignment of Purchase Agreement,
the Collateral Pledge Agreement, the Developer Guaranty, the Xxxxxxxx
Xxxx MW Transaction Guaranty (if executed in connection therewith), the
Xxxxxxxx Xxxx MW Completion Guaranty (if executed in connection
therewith), the Mortgagor's Affidavit, the Environmental Indemnity and
any and all other documents executed and/or delivered by or on behalf of
the Borrower under such Project Loan and the Developer in connection
therewith, as the same may be supplemented, modified or amended from time
to time.
"Project Loan Maturity Date" shall have the meaning ascribed
thereto in Section 2.06 hereof.
8
"Project Note" shall mean a Mortgage Note in the form of EXHIBIT C
attached hereto, with blanks completed appropriately, executed by a
Borrower payable to the order of the Bank evidencing a Project Loan, as
supplemented, modified or amended from time to time.
"Project Purchase Agreement" shall mean with respect to a Project,
a purchase agreement between the Borrower owning such Project and a buyer
approved by the Bank in a form reasonably acceptable to Bank, pursuant to
which agreement such Borrower agrees to sell, and such buyer agrees to
purchase, such Project. Such purchase agreement shall require the buyer
thereunder to deposit with such Borrower a Deposit.
"Project Site" shall mean the real estate designated by a Borrower
or the Developer and approved by the Bank for the location and
construction of an OfficeMax retail facility.
"Retainage" shall mean the percentage required by the Bank to be
withheld from the interim payments to the Contractor pursuant to
Paragraph (n) of Section 4.01.
"Segment" of the LIBOR Rate Portion of a Project Loan at any time
shall mean the entire principal amount of that part of the LIBOR Rate
Portion of such Project Loan to which at such time there is applicable a
LIBOR Rate Interest Period beginning on a particular day and ending on
another particular day. (By definition, the LIBOR Rate Portion of a
Project Loan is at all times composed of an integral number of discrete
Segments and the sum of the principal amounts of all Segments of the
LIBOR Rate Portion of a Project Loan at any time equals the principal
amount of the LIBOR Rate Portion of such Project Loan at such time.)
"Title Company" shall mean with respect to a Project, a title
insurer designated by a Borrower or the Developer and approved by the
Bank which agrees to insure the priority of the lien of the Mortgage on
such Project.
"Title Policy" shall mean with respect to a Project, the policy of
title insurance issued by a Title Company to the Bank insuring the
priority of the lien of the Mortgage on such Project.
"Xxxxxxxx Xxxx MW" shall mean Xxxxxxxx Xxxx MW, Inc. a Delaware
corporation.
"Xxxxxxxx Xxxx MW Completion Guaranty" shall mean a Guaranty of
Completion of Improvements pursuant to Construction Loan Agreement in the
form attached hereto as EXHIBIT K, with blanks completed appropriately,
given to the Bank with respect to a Project Loan by Xxxxxxxx Xxxx MW,
pursuant to which Xxxxxxxx Xxxx MW guarantees the timely and lien-free
completion of the Improvements in respect of which such Project Loan is
being made, as the same may be supplemented, modified or amended from
time to time.
"Xxxxxxxx Xxxx MW Transaction Guaranty" shall mean a Transaction
Guaranty in the form attached hereto as EXHIBIT L, with blanks completed
appropriately, given to the Bank with respect to a Project Loan by
Xxxxxxxx Xxxx MW, pursuant to which Xxxxxxxx Xxxx MW guarantees the
obligations of the Borrower under such Project Loan, as provided in
9
Section 4.01(e)(vii) hereof, as the same may be supplemented, modified or
amended from time to time.
Unless the context clearly otherwise requires, the foregoing definitions
shall be equally applicable to both the singular and plural forms.
ARTICLE II
THE LOAN
2.01. PROJECT LOAN. Subject to the terms and conditions hereof, and
relying upon the representations and warranties herein set forth, the Bank
agrees to make Project Loans to the Borrower(s) from time to time in an
aggregate principal amount not to exceed Ten Million Dollars ($10,000,000)
outstanding at any time. The Bank's commitment to make Project Loans shall
expire on the Project Loan Commitment Expiration Date. In no event shall the
Bank be obligated to make any Project Loan on or after the Project Loan
Commitment Expiration Date. Notwithstanding the foregoing, subject to the
terms and conditions hereof, the Bank shall fund after the Project Loan
Commitment Expiration Date any Project Loan for which the Closing has
occurred prior to the Project Loan Commitment Expiration Date. The proceeds
of a Project Loan will be advanced to the Borrower thereunder as acquisition
and construction of the Project in respect of which such Project Loan is made
progresses, in accordance with and subject to the requirements and
limitations set forth herein and in the other Project Loan Document for such
Project Loan. Proceeds of the Loan shall be allocated to the Projects by the
Developer in such manner as the Developer shall determine and the Bank may
approve pursuant to Section 2.02 below. If prior to the Project Loan
Commitment Expiration Date, a Borrower repays a Project Loan, Loan proceeds
in an amount equal to the amount of the repaid Project Loan will again be
made available to the Borrower(s) for Project Loans, subject to the terms and
conditions hereof.
2.02. PROJECT APPROVAL. In connection with a request for approval
for a Project Loan, Developer shall submit to the Bank those materials
identified in EXHIBIT B attached hereto together with such other information
as the Bank deems reasonable, appropriate and necessary with respect to such
Project Loan and the Project to be acquired and constructed with the proceeds
thereof. Bank covenants and agrees to use its best efforts to approve or
disapprove a Project Loan within fifteen (15) business days following receipt
of a request for approval by a Borrower. In connection with the approval of
a Project Loan, Bank may impose requirements regarding disbursement of
Project Loan proceeds in addition to those set forth herein. Such additional
requirements will be set forth in the Project Agreement to be executed by the
Bank and the Borrower in respect of such Project, which Project Agreement,
when executed, shall be deemed to be a modification and amendment of this
Agreement as to the particular Project Loan.
2.03. PROJECT NOTE. Advances of a Project Loan shall be evidenced by
borrower's receipts and a Project Note executed and delivered by the Borrower
thereunder dated the date of the Closing of such Project Loan.
2.04. PROJECT LOAN RATE OF INTEREST. During the term of a Project
Loan, the unpaid principal amount thereof shall, subject to the terms and
conditions hereinafter set forth, bear interest on a basis
10
selected by the Borrower of such Project Loan from the following interest
rate options, it being understood that subject to the provisions hereof such
Borrower may select both of such options to apply simultaneously to different
parts of such Project Loan and may select up to six (6) Segments to apply
simultaneously to different parts of the LIBOR Rate Portion of such Project
Loan: (a) a rate per annum equal to the Prime Rate Option; or (b) a rate per
annum equal to the LIBOR Rate Option.
After maturity (whether by declaration, acceleration or otherwise),
the unpaid principal balance of a Project Loan shall bear interest at a rate
per annum equal to the Default Rate until such Project Loan is paid in full,
principal and interest. All interest on a Project Loan shall be calculated
on the unpaid principal balance of such Project Loan at the time of
reference, based on a year of 360 days and on the actual number of days
elapsed in each calendar year.
2.05. PROJECT LOAN INTEREST RATE OPTIONS.
a. The Borrower under a Project Loan (i) shall designate at
least two (2) Banking Days prior to the end of each LIBOR Interest Period
the interest rate Option or Options which it is selecting to apply
(whether renewal of the LIBOR Rate Option, conversion to the Prime Rate
Option or a combination of the two) to the corresponding Segment of the
LIBOR Rate Portion of such Project Loan commencing on the day after the
end of such LIBOR Interest Period and (ii) may, on two (2) Banking Days
prior notice, convert all or part of the Prime Rate Portion of such
Project Loan to the LIBOR Rate Option, such notice to state the date of
Conversion, which shall be a Banking Day. Such designation or notice
shall be irrevocable and shall be made by giving the Bank telephonic
notice on the day such designation or notice is required of (x) the
principal amounts of the Prime Rate Portion and each Segment of the LIBOR
Rate Portion as the case may be, of such Project Loan to be converted
from or renewed, (y) the interest rate Option or Options selected and the
principal amounts of the Prime Rate Portion and each Segment of the LIBOR
Rate Portion, as the case may be, of such Project Loan to be converted
to, and (z) with respect to each Segment of the LIBOR Rate Portion of
such Project Loan to be converted to or renewed, the LIBOR Interest
Period selected to apply to such Segment. In the absence of the receipt
of a telephonic notice from such Borrower required by clause (i) above,
such Borrower shall be deemed to have selected the Prime Rate Option.
Each new Advance under such Project Loan made by the Bank shall
automatically bear interest at the Prime Rate Option until a selection
under clause (ii) above is made. A Borrower shall have no right to
select the LIBOR Rate Option in respect of its Project Loan or any
portion thereof if an Event of Default exists hereunder and shall have no
right to select a LIBOR Interest Period which would extend beyond the
Maturity Date for such Project Loan. Maker may not have more than six
(6) Segments of the LIBOR Rate Portion of such Project Loan in existence
at any time and each such Segment shall be in an amount which is greater
than or equal to One Hundred Thousand Dollars ($100,000).
b. If any law or any governmental regulation, guideline or
order or interpretation or application thereof issued by any governmental
authority charged with the interpretation or administration thereof or
compliance with any request or directive of any central bank or other
governmental authority (whether or not having the force of law)(i)
subjects the Bank to any tax or changes the basis of taxation with
respect to a Project Loan or payments by the
11
Borrower thereunder of principal, interest or other amounts due from
such Borrower thereunder (except for taxes on the overall net income of
the Bank imposed by the jurisdictions in which the Bank's principal
executive office is located), (ii) imposes, modifies or deems applicable
any reserve, special deposit or similar requirement against assets held
by, credit extended by, deposits with or for the account of, or other
acquisition of funds by, the Bank (other than requirements expressly
included herein in the determination of the LIBOR Rate hereunder), or
(iii) imposes upon the Bank any other condition or expense with respect
to the making, maintenance or funding of any part of such Project Loan
or any security therefor; and the result of any of the foregoing is to
increase the cost to, reduce the income receivable by, or impose any
expense upon the Bank with respect to the LIBOR Rate Portion of such
Project Loan or the making, maintenance or funding of any part thereof
by an amount which the Bank deems to be material, the Bank shall from
time to time notify such Borrower (which notification shall be made
reasonably promptly after discovery by the Bank of the causing
circumstances) of the amount determined in good faith (using any
averaging and attribution methods employed in good faith) by the Bank to
be necessary to compensate the Bank for such increase in cost, reduction
in income or additional expense, which additional expense shall not
exceed the difference between the Prime Rate and the LIBOR Rate. In
the event the Bank determines any such amount shall be due and payable
pursuant to the foregoing, the Bank shall give written notice thereof to
such Borrower and such Borrower shall within ten (10) days after such
notice either (iv) pay to the Bank the amount determined by the Bank to
be due and payable from and after the date of such notice through the
last day of the applicable LIBOR Interest Period; or (v) prepay the
applicable LIBOR Rate Portion of such Project Loan together with any
amounts due and payable under Section 2.05(c) hereof.
c. In addition to the compensation required by Section 2.05(b)
hereof, the Borrower of a Project Loan shall indemnify the Bank (on a net
basis) against any loss or expense which the Bank has sustained or
incurred as a consequence of any (i) payment or conversion of any Segment
of the LIBOR Rate Portion of such Project Loan on a day other than the
last day of the corresponding LIBOR Interest Period (whether or not such
payment or conversion is mandatory or automatic and whether or not such
payment is then due), (ii) attempt by such Borrower to revoke (expressly,
by later inconsistent notices or otherwise) in whole or in part any
notice stated herein to be irrevocable (the Bank having in its sole
discretion the option to give effect to such attempted revocation and
obtain indemnity under this Section 2.05(c) or to treat such attempted
revocation as having no force or effect, as if never made), or (iii)
acceleration of such Project Loan as a result of the occurrence of an
event of default by such Borrower in the performance or observance of any
covenant or condition contained in the Project Loan Document for such
Project Loan, including, without limitation, any failure of such Borrower
to pay when due (by acceleration or otherwise) any principal, interest or
any other amount due hereunder or under such Project Loan Document. If
the Bank sustains or incurs any such loss or expense it shall from time
to time notify such Borrower of the amount determined in good faith by
the Bank to be necessary to indemnify the Bank for such loss or expense.
Such amount shall be due and payable by such Borrower to the Bank, within
ten (10) days after such notice is given.
12
Any amounts due from a Borrower pursuant to the foregoing
indemnification shall be applicable only to the extent necessary to
compensate the Bank for a reduction in income or additional expense
incurred because of payment or conversion of a Segment of a LIBOR Rate
Portion on a day other than the last day of the corresponding LIBOR
Interest Period.
2.06. PROJECT MATURITY DATE. The term of a Project Loan shall expire
upon the earlier of (the "Project Loan Maturity Date"): (a) nine (9) months
from its Closing Date; or (b) the sale of the Project in respect of which
such Project Loan was made pursuant to the Purchase Agreement for such
Project, unless such Project Loan is sooner paid pursuant to the terms hereof.
2.07. PROJECT LOAN PAYMENTS. Principal of and interest on a Project
Loan shall be due and payable as follows:
a. The Borrower under such Project Loan shall pay interest at
the applicable rate(s) on the outstanding principal balance of such
Project Loan on the first (1st) day of each calendar month during the
term of such Project Loan, commencing on the first (1st) day of the first
(1st) calendar month following the first Advance under such Project Loan
and continuing on the first (1st) day of each calendar month thereafter
until such Project Loan is paid in full;
b. In any and all events, the entire outstanding principal
balance of such Project Loan, together with all accrued and unpaid
interest thereon, shall be due and payable on its Project Maturity Date.
2.08. PROJECT LOAN PREPAYMENTS. The Borrower of a Project Loan may
prepay its Project Loan in whole at any time, or in part from time to time,
without premium or penalty.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
By acceptance of a Project Loan, the Borrower thereunder shall be
deemed to represent and warrant to Bank that:
3.01. ORGANIZATION AND QUALIFICATION. Such Borrower is a duly formed
and validly existing limited liability company under the laws of the State of
Delaware and is duly qualified to conduct business in the state in which the
Project in respect of which such Project Loan is being made is located. The
managing member of such Borrower is the Developer. Developer is duly formed
and validly existing corporation under the laws of the State of Delaware and
is duly qualified to conduct business in the state in which such Project is
located. Xxxxxxxx Xxxx MW is a duly formed and validly existing corporation
under the laws of the State of Delaware and is duly qualified to conduct
business in the state in which such Project is located.
3.02. RIGHT AND POWER. Such Borrower has full right, power and
authority to execute and deliver each of the Project Loan Document for such
Project Loan to which it is a party.
13
3.03. CONFLICT WITH OTHER INSTRUMENTS. Neither the execution and
delivery of the Project Loan Document for such Project Loan to which it is a
party, nor consummation of the transactions contemplated thereby, nor
compliance with the terms, conditions and provisions thereof will conflict
with or result in a breach of any of the terms, conditions or provisions of
the articles of organization or operating agreement of such Borrower, or, to
Borrower's actual knowledge, any law or any regulation, order, writ,
injunction or decree of any court or Governmental Authority or any agreement
or instrument to which such Borrower is a party or by which such Borrower or
its properties or assets (including the Project in respect of which such
Project Loan is being made) are subject to or bound, or constitute a default
thereunder or result in the creation or imposition of any lien, charge,
security interest or encumbrance of any nature whatsoever upon any of the
property of such Borrower (including the Project in respect of which such
Project Loan is being made) pursuant to the terms of any such agreement or
instrument, except as created by such Project Loan Documents.
3.04. AUTHORITY, VALIDITY AND BINDING EFFECT. The execution and
delivery of the Project Agreement for such Project Loan, the making of the
borrowings contemplated by the provisions thereof and hereof, the execution,
issuance and delivery of the Project Note to evidence such borrowings, and
the execution and delivery of the other Project Loan Document for such
Project Loan to which such Borrower is a party have been duly authorized by
all necessary action on the part of such Borrower, and no authorization,
approval or consent by, or filing with, any Governmental Authority or public
regulatory authority is necessary therefor. Each Project Document to which
such Borrower is a party has been duly and validly executed and delivered by
such Borrower and constitutes a legal, valid and binding obligation of such
Borrower, enforceable in accordance with its terms, except as the
enforceability thereof may be limited by bankruptcy, insolvency or other laws
of general application affecting the enforcement of creditors' rights
generally and by principles of equity.
3.05. FINANCIAL CONDITION. The financial statements of such Borrower
and the Guarantor(s) for such Project Loan furnished to the Bank are complete
and correct in all material respects. Such financial statements were
prepared in accordance with generally accepted accounting principles
consistently applied. The financial statements of such Borrower and the
Guarantor(s) for such Project Loan fairly present their respective financial
condition at the respective dates indicated therein. Since the dates of such
financial statements, there has been no material adverse change in the
assets, liabilities or financial condition of such Borrower and the Developer
from that reflected thereon.
3.06. LITIGATION. There are no actions, suits or proceedings pending
or, to Borrower's actual knowledge, threatened, against or affecting such
Borrower or the Developer of before any court or Governmental Authority which
might have a material adverse affect on such Borrower or the Guarantor(s) for
such Project Loan or their operations or financial condition, or on the
construction or operation of the Project in respect of which such Project
Loan is being made.
3.07. COMPLIANCE WITH GOVERNMENTAL REQUIREMENTS. The construction of
the Improvements constituting a part of the Project in respect of which such
Project Loan is being made as contemplated by the Plans and Specifications
therefor and the intended use of such Improvements will comply with all
applicable Governmental Requirements and all applicable restrictive
covenants. To the extent required by applicable law, such Plans and
Specifications have been approved by all
14
Governmental Authorities and such Borrower has obtained all required permits
with respect to construction of such Improvements.
3.08. UTILITY SERVICES. All utility services necessary for the
construction of the Project in respect of which such Project Loan is being
made and the operation thereof as a retail facility are available at the
boundaries of the Project Site, or off-site utility services can be extended
to the boundaries of the Project Site and the cost of extending such utility
services is reflected in the Cost Breakdown for such Project, and the
Borrower has obtained all permits from all Governmental Authorities necessary
for such extension and such utilities have sufficient capacity to serve such
Project.
3.09. HAZARDOUS MATERIALS. Such Borrower has not used Hazardous
Materials on, from or affecting the Project Site in respect of which such
Project Loan is being made in any manner which violates federal, state or
local laws, ordinances, rules, regulations or policies governing the use,
storage, treatment, transportation, manufacture, refinement, handling,
production or disposal of Hazardous Materials, and, to the best of such
Borrower's knowledge, no prior owner of such Project Site or prior occupant
thereof, has used Hazardous Materials on, from or affecting the Project Site
in any manner which violates federal, state or local laws, ordinances, rules,
regulations or policies governing the use, storage, treatment,
transportation, manufacture, refinement, handling, production or disposal of
Hazardous Materials. Such Borrower further represents to the Bank that such
Borrower has not received any notice of any violations of federal, state or
local laws, ordinances, rules, regulations or policies governing the use,
storage, treatment, transportation, manufacture, refinement, handling,
production or disposal of Hazardous Materials at such Project Site and, to
the best of such Borrower's knowledge, there have been no actions commenced
or threatened by any party for non-compliance with any such laws or
regulations at the Project Site.
3.10. COVENANTS AND RESTRICTIONS. There are no covenants, conditions
or restrictions of record or of which such Borrower has knowledge that
prohibit the construction of the Improvement to be constructed with the
proceeds of such Project Loan on the Project Site.
3.11. FLOOD HAZARD. The Improvements to be constructed with the
proceeds of such Project Loan will not be located in or on an "area of
special flood hazard," as that term is defined in the Flood Disaster
Protection Act of 1973.
ARTICLE IV
CONDITIONS OF LENDING
By acceptance of a Project Loan, the Borrower thereunder agrees that
the obligation of the Bank to make an Advance in respect of such Project Loan
is subject to the accuracy in all material respects, as of the date hereof
and the date of each Advance in respect of such Project Loan, of the
representations and warranties contained herein and under the Project Loan
Document for such Project Loan, to the performance by the Borrower under such
Project Loan of its agreements to be performed hereunder and under the
Project Loan Document for such Project Loan on or before the date of each
Advance, and to the satisfaction of the following further conditions:
15
4.01. INITIAL PROJECT LOAN ADVANCE. Prior to the initial Advance by
Bank with respect to such Project Loan:
a. ORGANIZATIONAL DOCUMENTS. There shall have been furnished
to the Bank by such Borrower:
i. A copy of the articles of organization of
such Borrower, together with any amendments to such
agreement, filed with the appropriate Governmental
Authorities of the State of Delaware and a copy of the
operating agreement of such Borrower, together with any
amendments to such agreement;
ii. An original Certificate of Existence for such
Borrower issued by the Secretary of State of Delaware
bearing a recent date;
iii. An original Certificate of Qualification as a
foreign limited liability company doing business in the
state in which the Project in respect of which such Project
Loan is being made is located issued the by the Secretary
of State of such state;
iv. A copy of the articles of incorporation for
Developer, together with any and all amendments thereto;
v. A copy of the by-laws of Developer, together
with any and all amendments thereto;
vi. An original Certificate of Existence for
Developer issued by the Secretary of State of Delaware
bearing a recent date;
vii. An original Certificate of Qualification for
Developer as a foreign corporation doing business in the
state in which the Project in respect of which such Project
Loan is being made issued by the Secretary of State of such
state;
viii. A copy of the resolutions of the Board of
Directors of Developer authorizing the execution of the
Project Loan Document for such Project Loan by Developer on
behalf of such Borrower and the execution of the Developer
Guaranty and the Environmental Indemnity Agreement for such
Project by Developer in its individual capacity;
ix. A copy of the articles of incorporation for
Xxxxxxxx Xxxx MW, together with any and all amendments
thereto;
x. A copy of the by-laws of Xxxxxxxx Xxxx MW,
together with any and all amendments thereto;
16
xi. An original Certificate of Existence for
Xxxxxxxx Xxxx MW issued by the Secretary of State of
Delaware bearing a recent date; and
xii. A copy of the resolutions of the Board of
Directors of Xxxxxxxx Xxxx MW authorizing the execution of
the Xxxxxxxx Xxxx MW Completion Guaranty and the Xxxxxxxx
Xxxx MW Transaction Guaranty by Xxxxxxxx Xxxx MW in its
individual capacity.
Such Borrower shall be required to provide the organizational documents
listed in Section 4.01(a)(ix-xii) only if such Borrower elects to provide
a Xxxxxxxx Xxxx MW Completion Guaranty and Xxxxxxxx Xxxx MW Transaction
Guaranty in accordance with Section 4.01(z) hereof.
b. BORROWER'S COUNSEL OPINION. Such Borrower shall furnish to
the Bank an opinion of counsel for such Borrower and the Guarantor(s) for
such Project Loan in form and substance similar to that attached hereto
as EXHIBIT R, with blanks appropriately completed, and if the Project is
located in a state other than Indiana Bank shall receive, at such
Borrower's expense, an opinion of counsel licensed to practice law in
such state in form and substance similar to that attached hereto as
EXHIBIT S.
c. PROJECT AGREEMENT. The Bank, Developer and such Borrower
shall have entered into a satisfactory Project Agreement in respect of
such Project Loan.
d. PROJECT NOTE. Such Borrower shall execute and deliver to
Bank a Project Note with respect to such Project Loan with blanks
appropriately completed.
e. SECURITY DOCUMENTS. There shall have been executed and
delivered to the Bank the following security documents with respect to
the Project in respect of which such Project Loan is being made:
i. a Mortgage which shall constitute a first
mortgage lien on such Borrower's fee simple interest in
such Project;
ii. an Assignment of Rents and Leases pursuant to
which such Borrower shall have collaterally assigned to the
Bank all the right, title and interest of such Borrower as
landlord in and to all existing and future leases of space
in such Project, including, without limitation, the
OfficeMax Lease for such Project, and all rentals and other
monies due and to become due under said leases;
iii. a Contract Assignment pursuant to which such
Borrower shall have collaterally assigned to the Bank all
the right, title and interest of such Borrower in and to
the Construction Contract, the Architect's Agreement and
the Plans and Specifications for such Project;
17
iv. if such Borrower provides a Project Certificate
of Deposit to the Bank for such Project Loan in accordance
with Paragraph 4.01(z) hereof, a Collateral Assignment of
Certificate of Deposit pursuant to which such Borrower
shall have collaterally assigned to the Bank such Project
Certificate of Deposit;
v. A Collateral Pledge Agreement pursuant to
which such Borrower shall have collaterally assigned to the
Bank all of the right, title and interest of such Borrower
in and to the Deposit made under the Project Purchase
Agreement for such Project;
vi. A Collateral Assignment of Purchase Agreement
pursuant to which such Borrower shall have collaterally
assigned to the Bank all the right, title and interest of
such Borrower in, to and under the Purchase Agreement for
such Project;
vii. If such Borrower elects to provide the same
in accordance with Section 4.01(z) hereof, a Xxxxxxxx Xxxx
MW Completion Guaranty, pursuant to which Xxxxxxxx Xxxx MW
shall have guaranteed the timely lien free completion of
the Improvements forming a part of such Project;
vii. A Developer Guaranty, pursuant to which the
Developer shall have guaranteed all obligations of such
Borrower in respect of such Project Loan;
ix. If such Borrower elects to provide the same
in accordance with Section 4.01(z) hereof, a Xxxxxxxx Xxxx
MW Transaction Guaranty pursuant to which Xxxxxxxx Xxxx MW
shall have guaranteed the obligations of the Borrower in
respect of such Project Loan in accordance with the terms
thereof. Such Xxxxxxxx Xxxx MW Transaction Guaranty shall
provide that the amount guaranteed thereunder shall be
limited to an amount equal to the sum of (A) the product of
(1) Thirty-Three Percent (33%), MULTIPLIED by (2) the
outstanding balance from time to time of such Project Loan,
principal and interest; PLUS (B) the costs of collection in
respect of such Xxxxxxxx Xxxx MW Transaction Guaranty. The
payment by Developer under its Developer Guaranty for such
Project Loan shall not be deemed to reduce the outstanding
balance of such Project Loan for the purpose of determining
the outstanding balance from time to time of such Project
Loan for the purposes of such Xxxxxxxx Xxxx MW Transaction
Guaranty and Xxxxxxxx Xxxx MW's obligations thereunder,
except to the extent that such Project Loan is repaid as a
result of the payment by Developer under its Developer
Guaranty for such Project Loan; and
x. such financing statements as are deemed
necessary by the Bank to perfect the security interests
granted under the Project Loan Document for such Project
Loan.
18
Each of the above-described collateral documents shall be properly
completed and reflect only such further changes as may be
necessary to comply with the requirements of the jurisdiction in
which such Project is located.
f. MORTGAGOR'S AFFIDAVIT. Such Borrower shall have furnished
to the Bank an executed Mortgagor's Affidavit with respect to such
Project Loan.
g. ENVIRONMENTAL INDEMNITY. Such Borrower and the Guarantor(s)
for such Project Loan shall have furnished to the Bank an executed
Environmental Indemnity Agreement in respect of the Project in respect of
which the Project Loan is being made.
h. TITLE POLICY. The Title Company shall have issued and
delivered to the Bank a policy of title insurance acceptable to the Bank
insuring the priority of the lien of the Mortgage securing such Project
Loan in the amount thereof, and such portion thereof as shall be advanced
from time to time. The Title Policy shall provide a 3.0 zoning
endorsement (if available) and affirmative coverage with respect to filed
or unfiled mechanic's lien and shall be subject only to such exceptions
as may be reasonably approved by the Bank.
i. SURVEY. Such Borrower shall have furnished to the Bank an
ALTA/ACSM Minimum Standard Detail Survey (or such other survey as may be
sufficient for the Title Company to delete the standard survey exception
in the Title Policy) of the Project Site forming a part of such Project,
made by a registered engineer or surveyor licensed by the state in which
such Project is located and reasonably satisfactory to the Bank and the
Title Company and certified to each of them as of a date not more than
thirty (30) days prior to the Closing Date for such Project Loan showing
the boundaries of such Project Site, all building setback lines,
easements, rights of way and encroachments affecting such Project Site
and other matters apparent thereon and the relation of such Project Site
to public thoroughfares for access purposes, certifying that such Project
Site is not located within a special flood hazard area as defined by the
Flood Disaster Protection Act of 1973, and showing the number of the
Flood Insurance Rate Map on which such Project Site is shown and the date
of such map, and shall specify the flood hazard zone in which such
Project Site is situated. Upon completion of the foundation for such
Improvements, at the request of the Bank, such Borrower shall furnish to
the Bank, one of the following, which shall be selected by such Borrower:
(i) a similar survey which shall show the actual location of the
foundation for the Improvements located on such Project Site, or (ii) a
letter from the surveyor or engineer preparing the survey for the Closing
of such Project Loan, or such other surveyor or engineer as is acceptable
to Bank, stating that the foundation for such Improvements is located
entirely within the boundary of such Project Site and does not encroach
on any building set-back line or easement encumbering such Project Site;
j. APPROVALS AND PERMITS. Such Borrower shall submit to the
Bank evidence reasonably satisfactory to the Bank to the effect that:
i. The Project Site forming a part of the
Project in respect of which such Project Loan is being made
is presently zoned to permit its use as a retail facility,
which evidence may be a 3.0 zoning endorsement issued by
the
19
Title Company or a satisfactory opinion of counsel
admitted to practice in the state in which such Project
Site is located or a zoning confirmation letter of the
Governmental Authority having zoning jurisdiction over such
Project;
ii. Such Borrower has obtained such access
easements and utility easements, if any, as may be
reasonably necessary for the contemplated use of such
Project and such easements are insured under the Title
Policy;
iii. All required permits, licenses and approvals
for the construction of such Project have been obtained
from the applicable Governmental Authorities;
iv. All utility services necessary for the
construction of such Project and the operation thereof as a
retail facility are available at the boundaries of such
Project Site or off-site utilities can be extended to the
boundaries of such Project Site at the cost thereof
reflected in the Cost Breakdown for such Project and all
necessary permits have been obtained and all such utilities
have the capacity necessary to provide service to such
Project; and
v. All work contemplated by the Plans and
Specifications for such Project will conform to all
applicable Governmental Requirements.
k. COST BREAKDOWN. Such Borrower shall have furnished to the
Bank for its review and approval a Cost Breakdown reflecting all Project
Costs for the Project in respect of which such Project Loan is being
made.
l. INSURANCE. Such Borrower shall have furnished to the Bank
the insurance required by the Mortgage securing such Project Loan,
together with evidence of payment in full of the premiums thereon.
m. PLANS AND SPECIFICATIONS. Such Borrower shall have
furnished to the Bank for its review and reasonable approval the Plans
and Specifications for the Project in respect of which such Project Loan
is being made.
n. CONSTRUCTION CONTRACT. Such Borrower shall have furnished
to the Bank for its review and approval a copy of the executed
Construction Contract for the construction of the Improvements forming a
part of the Project in respect of which such Project Loan is being made
in accordance with the Plans and Specifications therefor for a maximum
fixed price not exceeding an amount approved by the Bank. Such Borrower
shall also furnish to the Bank copies of all other Major Contracts in
respect of such Project. Such Major Contracts shall be subject to
reasonable approval by the Bank.
Such Construction Contract shall further provide:
20
i. A provision that with final payment such
Contractor shall deliver to such Borrower a complete
release of liens signed by such Contractor and all
subcontractors;
ii. A provision that no change orders involving
an increase in costs of Fifty Thousand Dollars ($50,000) or
more for a single change order or One Hundred Thousand
Dollars ($100,000) or more in the aggregate shall be
effective without the prior written consent of the Bank
and, to the extent required under the OfficeMax Lease for
such Project, the prior written consent of OfficeMax (this
requirement shall be satisfied if the provision is included
in the Contractor's Letter for such Project);
iii. A provision for not less than Ten Percent
(10%) retainage in connection with interim payments to each
subcontractor (but not for payments to suppliers unless
Bank determines in its reasonable discretion that such
retainage as to suppliers is appropriate) until the
Improvements forming a part of such Project are
substantially completed; and
iv. If provided for under the laws of the state
in which such Project is located, a no-lien provision.
o. ARCHITECT'S LETTER. Such Borrower shall have furnished to
the Bank an executed copy of an Architect's Letter for the Project in
respect of which such Project Loan is being made.
p. CONTRACTOR'S LETTER. Such Borrower shall have furnished to
the Bank an executed copy of a Contractor's Letter for the Project in
respect of which of such Project Loan is being made.
q. APPRAISAL. The Bank shall have received an appraisal of
the discounted sellout value and fair market value of the Project in
respect of which of such Project Loan is being made(including interest
carry), on an assumed completion basis (the "Appraisal"). The Appraisal
shall be made by an appraiser approved by Bank, shall be in form and
substance satisfactory to Bank and shall be in compliance with all
applicable laws, rules and regulations;
r. ARCHITECT'S REPORT. The Bank shall have received a
satisfactory report of the Inspecting Architect for the Project in
respect of which of such Project Loan is being made, with respect to the
Plans and Specifications and the Cost Breakdown for such Project.
s. COMMITMENT FEE. Such Borrower shall have paid to the Bank
the Commitment Fee in respect of such Project Loan.
t. SOILS REPORT. Such Borrower shall have submitted to the
Bank a satisfactory geotechnical report of the Project Site forming a
part of the Project in respect of which such Project Loan is being made.
21
u. ENVIRONMENTAL REPORT. Such Borrower shall have furnished
to the Bank a copy of an environmental report by an environmental
consulting company acceptable to the Bank giving satisfactory evidence
that the Project Site forming a part of the Project in respect of which
Project Loan is being made is free of Hazardous Materials, that such
Project Site is not in violation of and does not cause such Borrower as
owner or operator of such Project Site to be in violation of any state,
federal or local environmental, health, or safety law (the "Environmental
Report). The Environmental Report shall be addressed to the Bank, or, in
the alternative, such Borrower shall provide to the Bank a letter of the
consulting company that prepared the Environmental Report pursuant to
which such consulting company authorizes the Bank to rely on the
Environmental Report.
v. OFFICEMAX LEASE. Such Borrower shall have furnished to the
Bank an executed OfficeMax Lease for the Project in respect of which such
Project Loan is being made having a term of not less than fifteen (15)
years and in a form and content acceptable to the Bank in all other
respects, including rental amounts payable thereunder. Such OfficeMax
Lease shall include the agreement of OfficeMax to subordinate its
interest thereunder to any first mortgage on such Project upon the
request of the mortgagee thereunder and to attorn to such mortgagee, or
any purchaser of such Project at a foreclosure sale or pursuant to a deed
in lieu of foreclosure, provided the Bank agrees to reasonable
non-disturbance provisions if the Tenant is not in default beyond any
applicable cure period thereunder.
Such Borrower shall use reasonable efforts to attempt to obtain
the following provisions in such OfficeMax Lease:
i. OfficeMax shall agree to give any mortgagee
in respect of such Project (a "Mortgagee") by registered or
certified mail, a copy of any notice of default served upon
the landlord, provided that prior to such notice of default
tenant has been notified in writing, of the existence of
such mortgage and the address of such Mortgagee;
ii. A Mortgagee shall have sixty (60) days after
its receipt from OfficeMax of written notice of a default
by landlord under the OfficeMax Lease to correct or cure
such default;
iv. OfficeMax shall comply with all state and
federal environmental and hazardous materials statutes and
regulations, and shall not improperly store any hazardous
materials in, on or under such Project.
w. OFFICEMAX SUBORDINATION, NON-DISTURBANCE AND ATTORNMENT
AGREEMENT. Such Borrower shall have furnished to the Bank an OfficeMax
Subordination, Non-Disturbance and Attornment Agreement for the Project
in respect of which such Project Loan is being made, executed by such
Borrower and OfficeMax.
22
y. PROJECT PURCHASE AGREEMENT. Such Borrower shall have
furnished to the Bank an executed Purchase Agreement for the Project in
respect of which such Project Loan is being made, together with evidence
that the Deposit required thereunder has been made.
z. ADDITIONAL COLLATERAL. Such Borrower shall have furnished
to the Bank additional collateral for such Project Loan selected by
such Borrower from the following options: (i) a Project Certificate of
Deposit; (ii) a Project Letter of Credit; or (iii) a Xxxxxxxx Xxxx MW
Completion Guaranty and a Xxxxxxxx Xxxx MW Transaction Guaranty.
aa. DEBT SERVICE COVERAGE. The Debt Service Coverage for the
Project in respect of which such Project Loan is being made is no less
than 1.05 to 1.0.
4.02. SUBSEQUENT ADVANCES. Prior to any Advance by Bank with respect
to such Project Loan:
a. REPRESENTATIONS AND WARRANTIES. The representations and
warranties contained in Article III hereof and in the other Project Loan
Document for such Project Loan shall be true on and as of the date of
each Advance with the same effect as though such representations and
warranties had been made on and as of each such date, and on each such
date no Event of Default under such Project Loan shall have occurred and
be continuing or shall exist.
b. DAMAGE. On the date of each Advance of such Project Loan,
the Improvements in respect of which such Advance is being made shall not
have been materially injured or damaged by fire or other casualty, unless
sufficient funds or other collateral satisfactory to the Bank in cash or
cash equivalents for the restoration thereof have been deposited with the
Bank pursuant to the Mortgage securing such Project Loan.
c. TITLE POLICY ENDORSEMENT. On the date of each Advance of
such Project Loan, the Bank shall have received an endorsement to the
Title Policy issued with respect to the Project for which such Advance is
requested: (i) indicating that since the date of the last Advance of such
Project Loan there has been no change in the state of title, except those
matters approved by the Bank, (ii) updating the Title Policy to the date
of such Advance, (iii) increasing the coverage of the Title Policy by an
amount equal to such Advance if the Title Policy does not by its own
terms provide for such an increase.
d. CONTRACTOR RECEIPTS. On or prior to the date of each
Advance of such Project Loan, such Borrower shall have provided to the
Bank receipts or lien waivers from the Contractor for the Project for
which the Advance is requested and lien waivers from all contractors,
subcontractors, materialmen and suppliers relating to the last requested
Advance for such Project Loan.
4.03. LAST ADVANCE. On or prior to the date of the last Advance for
Direct Costs of the Project in respect of which such Project Loan is being
made the Bank shall have received:
23
a. ARCHITECT'S CERTIFICATE. A certificate from the Architect
and the Inspecting Architect for such Project that the Improvements
forming a part thereof have been completed substantially in accordance
with the Plans and Specifications therefor, all applicable Governmental
Requirements and all applicable restrictive covenants, and such
Improvements are ready and suitable for occupancy.
b. RELEASE OF LIENS. A final affidavit and sworn statement of
the Contractor for such Project and a complete release of liens signed by
such Contractor, and every other Major Contractor for such Project.
c. GOVERNMENTAL APPROVALS. Evidence of approval (including
permanent occupancy permits or a certificate of occupancy, if required,
and/or other permits, if required) by all Governmental Authorities whose
approval is required of the completed Improvements, the permanent
occupancy thereof and the intended uses thereof.
d. TENANT ESTOPPEL. A tenant estoppel letter in respect of
such Project executed by OfficeMax in a form which is satisfactory to the
Bank and OfficeMax.
4.04. PROCEEDINGS AND DOCUMENTS. All legal details and proceedings
in connection with the transactions contemplated by this Agreement shall be
in form and substance reasonably satisfactory to counsel for the Bank, and
the Bank shall have received all such counterpart originals or certified or
other copies of such documents and proceedings in connection with such
transactions, in form and substance, as to certification and otherwise,
reasonably satisfactory to such counsel, as the Bank or its counsel may
request.
ARTICLE V
DISBURSEMENTS
5.01. ADVANCES. Subject to the terms and conditions hereof, and
relying upon the representations and warranties herein set forth, the Bank
agrees to make Advances of a Project Loan to the Borrower thereof in
accordance with, and subject to the requirements and limitations set forth
in, this Article V. By acceptance of a Project Loan, the Borrower thereunder
agrees that Advances of such Project Loan shall be made in accordance with
the following requirements and limitations:
a. REQUESTS FOR LOAN ADVANCES. Not less than five (5)
business days prior to the making of any Advance of such Project
Loan, such Borrower shall submit to Bank a Request for Advance in
such form as the Bank may require setting forth the total amount
of Project Costs for which such Advance is requested, broken down
by the categories identified in the Cost Breakdown for the Project
in respect of which such Project Loan is being made, together with
(i) receipted bills, bills, invoices, paid invoices, payroll
records or other evidence satisfactory to the Bank supporting each
item of the Project Costs covered by such Request for Advance,
(ii) if the Request for Advance includes Direct Costs, a
certificate of such Borrower and the Contractor for such Project
to the effect that (x) the construction to date of the
Improvements forming a part of such Project has been performed in
a good and workmanlike manner and in accordance with the Plans and
Specifications for such Project, (y) the amount
24
of the Direct Costs for which such Advance is requested either has
been paid by such Borrower and/or is justly due to such Contractor
for work, labor or Materials furnished for the construction of such
Improvements insofar as actually incorporated therein (but
including Materials suitably stored on the Project Site in
compliance with Sections 6.06 and 7.02 hereof) up to the date of
such Request for Advance (in the case of the first Request for
Advance) or to the date of such Request for Advance from the date
of the previous Request for Advance (in the case of any subsequent
Request for Advance), and (z) no part of the Project Costs
described in such Request for Advance has been made the basis for
any previous Advance, and (iii) if the Request for Advance
includes Direct Costs, a certificate of the Inspecting Architect
for such Project (x) to the effect that the construction of such
Improvements has been performed in a good and workmanlike manner
and in accordance with the Plans and Specifications for such
Project and in compliance with all applicable Governmental
Requirements, (y) specifying the stage and percentage of
completion which has been achieved by each of the various trades
engaged in the construction of such Improvements, and (z) to the
effect that the aggregate amount of such Advance is not greater
than the actual value of work and labor done in such Improvements
and Materials incorporated in such Improvements (or suitably
stored on the Project Site in compliance with Sections 6.06 and
7.02 hereof), less Retainage, up to the date of such certificate
(in the case of the first such certificate) or to the date of such
certificate from the date of the previous certificate (in the case
of any subsequent such certificate). The Bank shall not be
required to make Advances of a Project Loan more frequently than
once each month. Each Request for Advance and each receipt of the
Advance requested thereby shall constitute a certification by the
Borrower of such Advance that the representations and warranties
contained in Article III hereof are true and correct on the date
of such Request for Advance or such receipt, as the case may be.
b. BORROWING LIMITATIONS. Advances of such Project
Loan for the payment of Project Costs for the Project in respect
of which such Project Loan is being made in each category of cost
in the Cost Breakdown for such Project shall be limited to the
amount shown for such category in the column entitled "Balance to
Disburse." Advances of such Project Loan shall be made only to
defray Project Costs attributable to such Project and described in
the Cost Breakdown for such Project and actually incurred by such
Borrower. The aggregate amount of Advances of such Project Loan
for payment of Direct Costs for such Project shall be further
limited to the lesser of (i) the actual cost of work and labor
done on such Improvements and Materials incorporated in such
Improvements (or suitably stored on the Project Site in compliance
with Sections 6.06 and 7.02 hereof), less Retainage, or (ii) the
percentage of completion reasonably determined by the Inspecting
Architect of work and labor done on such Improvements and
Materials incorporated in such Improvements (or suitably stored on
the Project Site in compliance with Sections 6.06 and 7.02
hereof), less Retainage.
c. DEFICIENCY IN COST CATEGORY AMOUNTS. If any amount
allocated for Project Costs for the Project in respect of which
such Project Loan is being made in
25
any category in the Cost Breakdown for such Project is at any time
not sufficient in the reasonable judgment of the Bank to pay in full
such Project Costs in such category, the Bank shall not be obligated
to make further Advances of such Project Loan and such Borrower shall
promptly pay such amounts as may be required so that the sum of the
unadvanced portion of "Balance to Disburse," for such category is
sufficient to pay such Project Costs in full. Any previously achieved
savings (as determined by the Bank) in any completed category of
such Cost Breakdown shall be added to the "Contingency" category
in such Cost Breakdown and the amount of such savings may be used
to pay the costs of any other category in such Cost Breakdown.
Except as specifically set forth in the preceding sentence, the
Bank shall not be required to advance amounts from the category of
such Cost Breakdown entitled "Contingency"; provided, however,
Bank agrees that it will not unreasonably deny a request from
Borrower for an advance from such "Contingency" category. The
Bank shall have no obligation to make advances of Project Loan for
development fees.
d. DEFICIENCY IN TOTAL COST AMOUNT. At all times the
sum of the unadvanced portion of such Project Loan shall be
sufficient in the reasonable judgment of the Bank or the
Inspecting Architect for the Project in respect of which such
Project Loan is being made to pay all Project Costs of such
Project remaining unpaid. If at any time such sum is not
sufficient in the reasonable judgment of Bank to pay all such
unpaid Project Costs, such Borrower shall immediately upon request
by the Bank deposit with the Bank either cash or satisfactory
letters of credit in an amount equal to such deficiency.
e. PAYMENT OF ADVANCES. Advances of such Project Loan
shall be credited to such Borrower's account with the Bank; if,
however, there is then a Conditional Default or Event of Default
pending, or if Bank determines that payment to such party or
parties is reasonably necessary to protect Bank's interest in or
security for such Project Loan, then Advances may be paid by the
Bank directly to the party or parties who have actually supplied
labor, Materials or services in connection with or incidental to
the construction of the Improvements in respect of which such
Project Loan is being made or to the party or parties to whom
payment of any other Project Costs specified in the Request for
Advance is due. If the Bank elects to make a direct payment it
shall do so only after giving such Borrower at least two (2) days
prior telephone notice of its intention to do so. If Bank elects
to make a direct payment to a party supplying labor, materials or
services permitted by this Section 5.01(e), Bank shall use
reasonable efforts to obtain from such party the receipt and/or
lien waiver required under Section 4.02(d) hereof. Any such
direct payment shall satisfy PRO TANTO the obligations of the Bank
hereunder and shall be deemed an Advance of such Project Loan
evidenced by the Project Note and secured by the Mortgage and the
other Project Loan Document for such Project Loan as fully as if
made to such Borrower, regardless of the actual disposition
thereof by the party or parties to whom such payment is made if
such payment was made to the party and in the amount specified in
the Request for Advance. The making of any such Advance shall not
be deemed an acceptance or approval by the Bank (for the benefit
of such Borrower or any third party) of any work done or
Improvements constructed or
26
Materials furnished or installed in connection with the construction
of such Improvements. An Advance shall be made within ten (10) days
after Bank's receipt of all items and information which Borrower is
required to provide to Bank in respect of such Advance in accordance
with the terms hereof.
f. ADVANCES TO CURE DEFAULTS; ETC. Notwithstanding the
foregoing provisions of this Section 5.01, and without receiving
Requests for Advances for such Advances, the Bank may at any time
or from time to time (i) make Advances of such Project Loan to
satisfy any condition hereof with respect to such Project Loan or
to cure any Event of Default or Conditional Default with respect
to such Project Loan, (ii) make Advances of such Project Loan to
pay interest on such Project Loan, (iii) make Advances of such
Project Loan to pay the reasonable fees and expenses of counsel
for the Bank and the Inspecting Architect for the Project in
respect of which such Project Loan is being made; and (iv) make
Advances of such Project Loan to pay the reasonable fees and
expenses payable to the Title Company for endorsements to the
Title Policy for such Project Loan as required herein. Any
Advances made pursuant to this paragraph (f) shall be evidenced by
the Project Note for such Project Loan and secured by the Mortgage
and the other Project Loan Document for such Project, as fully as
if made to such Borrower.
g. PROJECT LOAN AMOUNT. Notwithstanding any other
provision contained herein to the contrary, the maximum principal
amount of a Project Loan shall not exceed an amount equal to the
lesser of: (a) Ninety Percent (90%) of the appraised value of the
Project (as determined by the Appraisal therefor)in respect of
which such Project Loan is being made; (b) the purchase price
payable by the buyer under the Project Purchase Agreement for such
Project; and (c) the Project Costs (excluding any development fee)
for such Project.
h. BORROWER'S INVESTMENT. No Advance of such Project
Loan shall be made by the Bank until such time as such Borrower
has furnished satisfactory evidence to the Bank that such Borrower
has invested an amount equal to not less than the total Project
Costs for the Project in respect of which such Project Loan is
being made, less, the amount of the Project Loan, as evidenced by
copies of canceled checks, paid receipts, lien waivers or other
documentary evidence acceptable to Bank, or until such time as
such Borrower has deposited with the Bank in escrow an amount
equal to the difference between such Project Costs and the amount
of the Project Loan. In the event such Borrower elects to deposit
such amounts with the Bank, such deposit shall earn interest at
prevailing interest rates and shall be disbursed by the Bank to
pay Project Costs in accordance with the disbursement procedures
of this Agreement governing the disbursement of proceeds of such
Project Loan.
27
ARTICLE VI
BORROWER'S AFFIRMATIVE COVENANTS
By acceptance of a Project Loan, the Borrower thereunder covenants
that until payment in full of such Project Loan and performance of all of
such Borrower's other obligations under the Project Loan Document for such
Project Loan:
6.01. FINANCIAL STATEMENTS. Such Borrower covenants that, during the
term of such Project Loan, will deliver or cause to be delivered to the Bank:
a. as soon as practicable, but in any event within ninety (90)
days after the end of each fiscal year of such Borrower, financial
statements of such Borrower for such year, as of the end of such year,
all in reasonable detail and satisfactory in scope to the Bank and
certified as to accuracy by the managing member of such Borrower; and
b. Such Borrower will with reasonable promptness furnish to
the Bank such additional financial and other information respecting the
financial condition, business or operations of such Borrower as the Bank
may from time to time reasonably request.
All such financial statements shall be prepared in accordance with
generally accepted accounting principles applied on a basis consistent with
prior practice unless otherwise specifically noted thereon.
6.02. NOTICES. Such Borrower will promptly give the Bank written
notice of:
a. the occurrence or existence of any Event of Default under
such Project Loan, together with a written statement of the action being
taken by such Borrower to remedy such Event of Default;
b. all litigation or proceedings before any court or
Governmental Authority affecting such Borrower or the Project in respect
of which such Project Loan is being made; and
c. any difficulty encountered by such Borrower in obtaining
labor or Materials in a timely manner or any other manner which would
substantially impair such Borrower's ability to complete construction of
such Project in accordance with the Plans and Specifications therefor by
the Completion Date therefor.
6.03. ACCESS TO BOOKS AND INSPECTION. Such Borrower will give any
officer or representative of the Bank access to, and permit such
representative to examine, copy or make extracts from, any and all books,
records and documents in the possession of such Borrower relating to the
Project in respect of which such Project Loan is being made and the
construction of the Improvements forming a part of such Project, and to
inspect such Improvements and all Materials to be used in the construction
thereof (provided such inspections shall not interfere with Borrower's
construction of the Project), all at such times and as often as the Bank may
reasonably request;
28
provided, however, that the Bank shall have no obligation to make any such
inspections nor any responsibility to such Borrower, the Developer or any
person, firm or corporation for any deficiency in construction or variance
from the Plans and Specifications therefor which may be or which would have
been revealed by any such inspection, whether or not discovered by the Bank.
6.04. GOVERNMENTAL REQUIREMENTS. Such Borrower will comply with all
Governmental Requirements and all restrictive covenants applicable to the
Project in respect of which such Project Loan is being made.
6.05. CONSTRUCTION OF THE IMPROVEMENTS. Such Borrower will prosecute
the construction of the Improvements forming a part of the Project in respect
of which such Project Loan is being made with diligence and continuity to
completion, and will cause such Improvements to be completed in a good and
workmanlike manner in accordance with the Plans and Specifications therefor
and in compliance with all applicable Governmental Requirements and all
applicable restrictive covenants, free and clear of all liens or claims of
liens for Materials supplied or work performed in connection therewith. Upon
demand of the Bank, such Borrower will correct any structural defect in such
Improvements or any departure from the Plans and Specifications therefor,
which materially decreases the value of such Improvements or which, if
uncorrected, would result in a default under the OfficeMax Lease for such
Project. Borrower will commence construction of such Improvements by the
deadline for such commencement set forth in such OfficeMax Lease. Borrower
shall complete such Improvements on or before the Completion Date therefor.
6.06. MATERIALS. Such Borrower will cause all Materials acquired or
furnished in connection with the construction of, but not incorporated into,
the Improvements forming a part of the Project in respect of which such
Project Loan is being made to be stored at the Project Site or in bonded
warehouses to be selected by such Borrower and reasonably approved by the
Bank or at such other place as the Bank may reasonably approve under adequate
insurance and under adequate safeguards to minimize the possibility of loss,
theft, damage or commingling with other materials or projects, and shall
deliver to the Bank, on demand, copies of any contracts, bills of sale,
statements, receipted vouchers or agreements under which such Borrower claims
title to any Materials used in the construction of, or incorporated or to be
incorporated into, such Improvements.
6.07. MAINTENANCE. Such Borrower will maintain the Project in
respect of which such Project Loan is being made in good repair and safe
condition at all times and indemnify and defend and hold the Bank harmless
from any and all claims relative to the use and occupancy of such Project.
6.08. INSURANCE. Such Borrower will maintain such insurance on the
Project as is required by the Mortgage securing such Project Loan or this
Agreement.
6.09. FURTHER ASSURANCES. Such Borrower will execute, acknowledge
when appropriate, and deliver from time to time at the request of the Bank,
such instruments and documents as in the reasonable opinion of the Bank are
necessary or desirable to perfect the security interests required herein.
6.10. FAILURE TO PERFORM. If such Borrower neglects or refuses to
pay the costs, premiums, liabilities or other charges incurred in connection
with such Project Loan or the Project in respect to
29
which such Project Loan is being made, or otherwise fails to perform its
covenants hereunder, the Bank may do so and may add the cost thereof to such
Project Loan as indebtedness evidenced by the Project Note therefor, and may
collect the same from such Borrower upon demand with interest thereon at the
Default Rate until paid thereunder.
6.11. ENVIRONMENTAL. During the term of such Project Loan, such
Borrower covenants and agrees to keep or cause such Project in respect of
which such Project Loan is being made to be kept free of Hazardous Materials
in violation of any Governmental Requirement and, without limiting the
foregoing, Borrower shall not cause or permit such Project to be used to
generate, manufacture, refine, transport, treat, store, handle, dispose of,
transfer, produce or process Hazardous Materials, except in compliance with
all applicable Governmental Regulations, nor shall Borrower cause or permit,
as a result of any intentional or unintentional act or omission on the part
of such Borrower or any tenant, subtenant or occupant, a release of Hazardous
Materials in violation of any Governmental Requirement onto such Project or
onto any property.
If Hazardous Materials are present at such Project in violation of the
requirements of this Section 6.11, such Borrower shall:
a. conduct and complete all investigations, studies, sampling
and testing, and all remedial, removal and other actions necessary to
clean up and remove all Hazardous Materials on, under or from the Project
Site in accordance with all applicable federal, state and local laws,
ordinances, rules, regulations and policies, to the reasonable
satisfaction of the Bank, and in accordance with the orders and
directives of all the federal, state and local governmental authorities;
b. defend, indemnify and hold harmless the Bank, its
employees, agents, officers and directors from and against any claims,
demands, penalties, fines, liabilities, settlements, damages, costs or
expenses of whatever kind or nature, known or unknown, contingent or
otherwise, arising out of or in any way related to:
i. the presence, disposal, release or threatened
release of any Hazardous Materials on, over, under, from or
affecting such Project or the soil, water, vegetation,
buildings, personal property, persons or animals thereon;
ii. any personal injury (including wrongful
death) or property damage (real or personal) arising out of
or related to such Hazardous Materials;
iii. any lawsuit brought or threatened, settlement
reached or government order relating to such Hazardous
Materials; and/or
iv. any violation of laws, orders, regulations,
requirements or demands of Governmental Authorities, which
are based upon or in any way related to such Hazardous
Materials, including, without limitation, attorney's
30
and consultant's fees, investigation and laboratory fees,
court costs and litigation expenses.
6.12. PERSONAL PROPERTY. Except for the security interest granted by
the Mortgage for such Project Loan, such Borrower is, and as to portions of
the Personal Property forming a part of the Project in respect of which such
Project Loan is being made to be acquired after the date hereof will be, the
sole owner of such Personal Property, free from any adverse lien, security
interest, encumbrance or adverse claims thereon of any kind whatsoever. Such
Borrower will notify the Bank of, and will defend such Personal Property
against, all claims and demands of all persons at any time claiming the same
or any interest therein. Such Personal Property will not be used or bought
for personal, family or household purposes. Such Personal Property will be
kept on or at such Project and such Borrower will not remove such Personal
Property from such Project without the prior written consent of the Bank,
except such portions or items of such Personal Property which are consumed or
worn out in ordinary usage, all of which shall be promptly replaced by such
Borrower. All covenants and obligations of such Borrower contained herein
and in the Project Loan Document for such Project Loan shall be deemed to
apply to such Personal Property whether or not expressly referred to herein
or therein.
6.13. FINANCING STATEMENTS. At the request of the Bank, such
Borrower will join the Bank in executing in respect of such Project Loan one
or more financing statements and renewals and amendments thereof pursuant to
the Uniform Commercial Code of the state in which the Project in respect of
which such Project Loan is being made is located in form satisfactory to the
Bank, and will pay the cost of filing the same in all public offices wherever
filing is deemed by the Bank to be necessary or desirable.
ARTICLE VII
BORROWER'S NEGATIVE COVENANTS
By acceptance of a Project Loan, the Borrower thereunder covenants
that until payment in full of such Project Loan and performance of all of
such Borrower's other obligations under the Project Loan Document for such
Project Loan:
7.01. PROHIBITION UPON TRANSFER, SECONDARY FINANCING. Such Borrower
shall not convey, sell (other than pursuant to a Project Purchase Agreement),
lease (other than pursuant to an OfficeMax Lease) or otherwise dispose of all
or any part of the Project in respect of which such Project Loan is being
made or any interest therein (legal or equitable), or grant any security
interest with respect to such Project without the prior written consent of
the Bank unless in connection therewith the outstanding principal balance of
such Project Loan, together with all accrued and unpaid interest thereon is
fully paid.
7.02. MATERIALS. Such Borrower will not purchase any Materials to be
incorporated into the Project in respect of which such Project Loan is being
made in any manner that will result in the ownership thereof not vesting
unconditionally in such Borrower, free from all liens, charges, encumbrances
and security interests upon delivery of such Materials to the Project Site
forming a part
31
of such Project, or, if the only condition to such title is payment of the
purchase price therefor, upon the making of an Advance of such Project Loan
therefor.
7.03. CONSTRUCTION CONTRACT. Such Borrower will not modify the
Construction Contract for the Project in respect of which such Project Loan
is being made without the Bank's consent, except pursuant to Change Orders
permitted under Section 7.04 hereof. Such Borrower will not assign or pledge
any of its right, title or interest in the Building Contracts for such
Project to anyone other than the Bank and such right, title and interest
shall not be subject to any other liens, claims, encumbrances or security
interests.
7.04. CHANGE ORDERS. Without the Bank's prior written consent, such
Borrower will not execute, or permit the performance of work on the Project
in respect of which such Project Loan is being made, or the furnishing of
Materials therefor pursuant to any Change Order involving an increase in the
Direct Costs of such Project of Fifty Thousand Dollars ($50,000) or more for
single Change Orders or One Hundred Thousand Dollars ($100,000) or more in
the aggregate or involving any fundamental change in the architectural,
mechanical or structural design of any portion of the Improvements forming a
part of such Project, or involving any materially adverse change in the
quality of workmanship or Materials in such Improvements or causing any delay
in completion of construction of such Improvements beyond the Completion Date
therefor. Such Borrower will deliver copies of all Change Orders to the Bank
promptly following their execution. Such Borrower will not execute or permit
the performance of work on such Project or the furnishing of Materials
therefor pursuant to a Change Order without the prior written consent of
OfficeMax, if such consent is required under the OfficeMax Lease for such
Project.
7.05. EASEMENTS. Such Borrower will not enter into any easement
affecting the Project Site forming a part of the Project in respect of which
such Project Loan is being made without first obtaining the Bank's written
approval of such easement and the terms and conditions thereof.
7.06. OFFICEMAX LEASE\PROJECT PURCHASE AGREEMENT. Such Borrower
will not modify, amend, alter, terminate or cancel the OfficeMax Lease for
the Project in respect of which such Project Loan is being made, or assign,
transfer, pledge or encumber any of its right, title or interest thereunder,
without the Bank's prior written consent. Such Borrower will not modify,
amend, alter, terminate or cancel the Project Purchase Agreement for such
Project, or assign, transfer, pledge or encumber any of its right, title or
interest thereunder, without the Bank's prior written consent.
ARTICLE VIII
DEFAULTS
8.01. EVENTS OF DEFAULT. By acceptance of a Project Loan, the
Borrower thereunder agrees if one or more of the following described events
shall occur (an "Event of Default") and be continuing or shall exist:
a. Such Borrower shall fail to make any payment under the
Project Note evidencing such Project Loan within ten (10) days after the
date the same is due and payable; or
32
b. Any representation or warranty made by such Borrower
herein, in any other Project Loan Document to which such Borrower is a
party or in any certificate, financial statement or other document
furnished by such Borrower pursuant to the provisions hereof, shall prove
to have been false or misleading as of the time made or furnished, and
such Borrower does not, within fifteen (15) days after the earlier of
receiving written notice from Bank or such Borrower's own determination
that such representation or warranty is false or misleading, commence and
complete such actions as are necessary to make such warranty or
representation true and accurate; provided, however, that such Borrower
shall not be entitled to the foregoing cure period if, such Borrower had
actual knowledge that such representation or warranty was false or
misleading when made; or
c. Such Borrower shall default in the performance or
observance of any covenant contained in Article VI hereof, and such
default has not been cured or corrected within thirty (30) days
following written notice from the Bank to such Borrower; provided,
however, that if such default is of such a nature that it cannot be cured
or corrected within such thirty (30) day period, such Borrower shall be
entitled to such additional time as may be necessary to cure or correct
such default if such Borrower promptly commences such cure or corrective
action and diligently pursues such cure or corrective action to
completion; or
d. Such Borrower shall default in the performance or
observance of any covenant contained in Article VII; or
e. Such Borrower shall default in the performance or
observance of any other covenant, condition or provision herein
contained, and such default has not been cured or corrected within
thirty (30) days following written notice from the Bank to such Borrower;
provided, however, that if such default is of such a nature that it
cannot be cured or corrected within such thirty (30) day period, such
Borrower shall be entitled to such additional time as may be necessary to
cure or correct such default if such Borrower promptly commences such
cure or corrective action and diligently pursues such cure or corrective
action to completion; or
f. Such Borrower shall default in the performance or
observance of any covenant, condition or provision contained in any other
Project Loan Document to which such Borrower is a party, and such default
shall continue uncured after any applicable cure or grace period; or
g. Any party shall obtain an order or decree in any court of
competent jurisdiction enjoining or delaying the construction of any of
the Improvements being constructed with such Project Loan or enjoining or
prohibiting the carrying out of the terms and conditions hereof, and such
order or decree shall remain undismissed or unstayed and in effect for a
period of Thirty (30) days; or
h. Such Borrower shall neglect, refuse or fail to keep in full
force and effect any permit or approval issued by any Governmental
Authority required for the continuation of the construction, occupancy or
use of the Project in respect of which such Project Loan is being
33
made and the same is not reinstated within thirty (30) days after such
Borrower receives notice (from any source) that such permit or approval
is no longer in full force and effect; or
i. Such Borrower shall be unable to satisfy any condition to
its right to the receipt of an Advance under such Project Loan for a
period in excess of sixty (60) days beyond the date of the Request for
such Advance; or
j. Such Borrower shall deliberately abandon construction of
the Improvements being constructed with such Project Loan and as a result
of such abandonment the Bank reasonably concludes that completion of
construction will not occur on or before the Completion Date therefor; or
k. The Improvements being constructed with such Project Loan,
shall not have been substantially completed in accordance with the Plans
and Specifications therefor by the Completion Date therefor; or
l. The Improvements being constructed with such Project Loan,
shall not have been completed in accordance with the Plans and
Specifications therefor, by the required completion date for such
Improvements pursuant to the OfficeMax Lease for such Project; or
m. The Project in respect of which such Project Loan is being
made, or any part thereof shall be condemned or damaged by fire or other
casualty in such manner as to preclude, in the Bank's sole reasonable
judgment, the completion or restoration of the Improvements forming a
part of such Project by the Maturity Date for such Project Loan or by the
required completion date for such Improvements pursuant to the OfficeMax
Lease for such Project; or
n. An accurate survey of the Project Site at any time shall
show that any of the Improvements being constructed with such Project
Loan encroach upon any street, easement, right of way or adjoining
property or violate any set back requirement, unless such encroachment or
violation is satisfactorily insured against under the Title Policy issued
in respect of such Project Loan, or that any adjoining structure
encroaches on the Project Site to an extent deemed material by the Bank,
unless such encroachment is cured within 30 days following receipt of
notice thereof by Borrower; or
o. There is any material adverse change in the financial
condition of such Borrower or any Guarantor for such Project Loan; or
p. A writ of execution or attachment or any similar process
shall be issued or levied against all or any part of or interest in the
Project in respect of which such Project Loan is being made, or any
judgment involving monetary damages shall be entered against such
Borrower which shall become a lien on such Project or any portion thereof
or interest therein and such execution, attachment or similar process or
judgment is not released, bonded, satisfied, vacated or stayed within
sixty (60) days after its entry or levy; or
34
q. Such Borrower or any Guarantor for such Project Loan shall
file a voluntary petition in bankruptcy or shall file any petition or
answer seeking or acquiescing in any reorganization, arrangement,
composition, readjustment, liquidation, dissolution or similar relief for
itself under any present or future federal, state or other statute, law
or regulation relating to bankruptcy, insolvency or other relief for
debtors; or shall seek or consent to or acquiesce in the appointment of
any trustee, receiver, liquidator, assignee, custodian, sequestrator (or
other similar official) of such Borrower or such Guarantor, or of all or
any part of the Project in respect of which such Project Loan is being
made, or of any or all of the royalties, revenues, rents, issues or
profits thereof, or shall make any general assignment for the benefit of
creditors, or shall admit in writing its inability to pay its debts, as
the case may be, generally as they become due, or shall become insolvent
or unable to pay its debts as they mature, or shall make a general
assignment for the benefit of creditors, or shall voluntarily suspend
transaction of its or his business or take any corporate action in
furtherance of the foregoing; or
r. A court of competent jurisdiction shall enter an order,
judgment or decree adjudicating such Borrower or any Guarantor for such
Project Loan as bankrupt or insolvent or approving a petition filed
against such Borrower or such Guarantor seeking any reorganization,
dissolution or similar relief under any present or future federal, state
or other statute, law or regulation relating to bankruptcy, insolvency,
or other relief for debtors, and such order, judgment or decree shall
remain unvacated and unstayed for an aggregate of sixty (60) days
(whether or not consecutive) from the first date of entry thereof; or any
trustee, receiver or liquidator of such Borrower or such Guarantor or of
all or any part of the Project in respect of which such Project Loan is
being made, or of any or all of the royalties, revenues, rents, issues or
profits thereof, shall be appointed without the consent or acquiescence
of such Borrower or such Guarantor, as the case may be, and such
appointment shall remain unvacated and unstayed for an aggregate period
of sixty (60) days (whether or not consecutive); or
s. Such Borrower has breached or defaulted under the OfficeMax
Lease for the Project in respect of which such Project Loan is being
made, and such breach or default has not been cured or corrected within
any applicable cure period provided under such OfficeMax Lease;
then, and upon the occurrence of any such event, the Bank shall be under no
further obligation to make any Advances under such Project Loan and such
Project Loan and interest accrued thereon and any penalty or premium
thereunder and all other liabilities of such Borrower hereunder, thereunder
and under the other Project Loan Document in respect of such Project Loan
shall thereupon become and be immediately due and payable without
presentment, demand, protest, or notice of any kind and without relief from
valuation and appraisement laws, all of which are hereby expressly waived.
8.02. RIGHTS OF SET-OFF. If an Event of Default shall exist under a
Project Loan, the Bank shall have the right, in addition to all other rights
and remedies available to it, to set-off against and to appropriate and apply
to the unpaid balance of such Project Loan and all other obligations of the
Borrower thereunder or under any other Project Loan Document executed by such
Borrower in connection therewith, any debt owing to, and any other funds held
in any manner for the account of,
35
such Borrower by the Bank, including, without limitation, all funds in all
deposit accounts (general or special) now or hereafter maintained by such
Borrower with the Bank. Such right shall exist whether or not the Bank shall
have made demand under this Agreement or such Project Loan and whether or not
such Project Loan or such other obligations are matured or unmatured. A
Borrower, by its acceptance of a Project Loan, hereby confirms the foregoing
arrangements and the Bank's right of banker's lien and set-off and nothing in
this Agreement shall be deemed a waiver of the Bank's right of the banker's
lien or set-off.
8.03. SPECIAL REMEDIES. If an Event of Default shall exist under a
Project Loan, the Bank shall have the right, in addition to any rights or
remedies available to it under the Project Loan Document for such Project
Loan or otherwise available to it at law or in equity, to enter upon and take
possession of the Project in respect of which such Project Loan is being
made, (and any Materials not yet incorporated into the Improvements forming a
part of such Project) and, to complete or cause to be completed such
Improvements, and all sums so expended by the Bank shall be deemed to be
Advances under such Project Loan to such Borrower and shall be allocated to
such Project. All such Advances shall be evidenced by the Project Note
evidencing such Project Loan and secured by the lien of the Project Loan
Document for such Project Loan. For purposes of this Section 8.03, such
Borrower agrees that the Bank shall have the right, and hereby irrevocably
constitutes and appoints the Bank its true and lawful attorney-in-fact,
coupled with an interest, with full power of substitution, to (i) use any
funds of such Borrower (including any funds which may be held in escrow and
any funds which may remain unadvanced hereunder) for the purpose of
completing such Improvements; (ii) make such additions and changes to and
corrections of the Plans and Specifications for such Improvements, as may be
necessary or desirable to complete such Improvements substantially in the
manner contemplated by such Plans and Specifications; (iii) employ such
contractors, subcontractors, agents, architects, watchmen and inspectors as
shall be required in connection with such Project; (iv) pay, settle or
compromise all existing bills and claims which are or may be liens against
such Project; (v) execute all applications and certificates in the name of
such Borrower which may be required by the Construction Contract for such
Project; (vi) prosecute and defend all actions or proceedings in connection
with such Project and to take such action and require such performance as the
Bank deems necessary in connection therewith; and (vii) generally do any and
every act with respect to the construction, occupancy and use of such
Improvements and such Project as such Borrower may do in its own behalf.
Should the unadvanced portion of a Project Loan be insufficient to pay the
sums expended or incurred by the Bank for any of the foregoing purposes, the
amount of the deficiency shall be added to the indebtedness evidenced by the
Project Note for such Project Loan and in all events shall be secured by the
lien of the Project Loan Document executed by such Borrower in connection
with such Project Loan and shall be paid by such Borrower to the Bank on
demand with interest thereon at the Default Rate(s) until paid.
8.04. SPECIAL REMEDIES/PROJECT LETTER OF CREDIT. If a Borrower shall
have furnished a Project Letter of Credit to the Bank in respect of a Project
Loan, and an Event of Default shall occur under such Project Loan, the Bank
shall have the right, in addition to any other rights or remedies available
to it under the Project Loan Document for such Project Loan, or available to
it at law or equity, to draw upon such Letter of Credit and apply the
proceeds thereof at its discretion as follows: (a) in payment of such
Project Loan as outstanding from time to time; or (b) for the costs of
completing the Project in respect of which such Project Loan was made. As
used herein, "costs of completing the Project" means payment of sums required
to be paid under the terms of the Construction Contract
36
for such Project in order for the Contractor thereunder to complete the work
specified in such Construction Contract (including the payment of any unpaid
bills or invoices that are outstanding thereunder), or in the event such
Construction Contract has been terminated, payment of sums required to be
paid to a replacement contractor furnishing work that was covered by such
terminated Construction Contract.
ARTICLE IX
MISCELLANEOUS
9.01. NO IMPLIED WAIVER; CUMULATIVE REMEDIES; WRITING REQUIRED. No
delay or failure of the Bank in exercising any right, power or privilege
hereunder shall affect such right, power or privilege, nor shall any single
or partial exercise thereof or any abandonment or discontinuance of steps to
enforce such a right, power or privilege preclude any further exercise
thereof or of any other right, power or privilege. The rights and remedies
of the Bank hereunder and under the Project Loan Document are cumulative and
not exclusive of any rights or remedies which it would otherwise have. Any
waiver, permit, consent or approval of any kind or character on the part of
the Bank of any breach or default under this Agreement or any other Project
Document, or any waiver by the Bank of any provision or condition of this
Agreement or any other Project Document, must be in writing and shall be
effective only to the extent as may be specifically set forth in such writing.
9.02. TAXES. A Borrower shall pay any and all stamp, document,
transfer and recording taxes, fees and similar impositions payable or
hereafter determined to be payable in connection with the execution, delivery
and/or recording of the Project Loan Document to which it is party, and such
Borrower agrees to save the Bank harmless from and against any and all
present or future claims or liabilities with respect to, or resulting from,
any delay in paying or omitting to pay any such taxes, fees or similar
impositions.
9.03. MODIFICATIONS AND AMENDMENTS. Upon execution thereof, each
Project Agreement shall automatically be deemed to be an amendment of this
Agreement, which amendment shall apply, however, only to the Project and the
Project Loan which is the subject of such Project Agreement.
9.04. HOLIDAYS. Except as otherwise provided herein, whenever any
payment or action to be made or taken under any of the Project Loan Document
shall be stated to be due or to be performed on a day which is not a business
day, such payment or action shall be made or taken on the next-following
business day and such extension of time shall be included in computing
interest or fees, if any, in connection with such payment or action.
9.05. NOTICES. All notices, statements, requests and demands given
to or made upon either party hereto in accordance with the provisions of this
Agreement shall be deemed to have been given or made two (2) days after the
same are deposited in the United States mail, postage prepaid, or immediately
upon personal delivery, addressed as follows:
37
If to the Bank: KeyBank National Association
00 Xxxx Xxxxxx Xxxxxx
0xx Xxxxx
Xxxxxxxxxxxx, Xxxxxxx 00000, and
Attention:___________________
If to the Developer
or a Borrower: c/o Xxxxxxxx Xxxx BTS, Inc.
0000 Xxxx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxx 00000
Attention: Xxxxxx Xxxx
or in accordance with the latest unrevoked written direction from either
party to the other party hereto.
9.06. REIMBURSEMENT FOR CERTAIN EXPENSES. All costs incidental to a
Project Loan, including, but not limited to, title insurance premiums, survey
charges, appraisal fees, insurance premiums, inspecting engineers' and/or
architects' fees, attorneys' costs and fees and any and all other incidental
expenses of the Bank, shall be paid by the Borrower thereunder and the
Developer. All such fees and expenses shall be paid upon the latter of
receipt of a statement therefor or the closing of such Project Loan.
9.07. NO THIRD PARTY RIGHTS. Nothing in this Agreement, whether
express or implied, shall be construed to give to any person other than the
parties hereto any legal or equitable right, remedy or claim under or in
respect of this Agreement or any other Project Loan Document, which is
intended for the sole and exclusive benefit of the parties hereto and thereto.
9.08. SIGN. The Bank may, at its option and expense, (i) erect
signs on a Project in locations and in a manner acceptable to the Borrower
owning the same and the Bank indicating that the Bank has provided financing
with respect to such Project; and (ii) otherwise publicize its involvement in
such Project.
9.09. INTEREST LIMITATION. Notwithstanding anything to the contrary
contained herein or in any of the other Project Loan Document, the
obligations of a Borrower to the Bank under this Agreement and any other
Project Loan Document to which such Borrower is a party, are subject to the
limitation that payments of interest to the Bank shall not be required to the
extent that receipt of any such payment by such Borrower would be contrary to
provisions of governmental requirements applicable to the Bank which limit
the maximum rate of interest which may be charged or collected by the Bank.
9.10. SEVERABILITY. The provisions of this Agreement are intended to
be severable. If any provision of this Agreement shall be held invalid or
unenforceable in whole or in part in any jurisdiction, such provision shall,
as to such jurisdiction, be ineffective to the extent of such invalidity or
unenforceability without in any manner affecting the validity or
enforceability thereof in any other jurisdiction or the remaining provisions
hereof in any jurisdiction.
38
9.11. GOVERNING LAW. BY ACCEPTANCE OF A PROJECT LOAN, THE BORROWER
THEREUNDER AGREES WITH BANK THAT, EXCEPT AS EXPRESSLY SET FORTH IN THE DEED
OF TRUST AND THE ASSIGNMENT OF RENTS AND THE OTHER PROJECT LOAN DOCUMENTS FOR
SUCH PROJECT LOAN, THE LAW OF THE STATE OF INDIANA SHALL GOVERN ALL MATTERS
RELATING TO THIS AGREEMENT AND THE OTHER PROJECT LOAN DOCUMENTS IN RESPECT OF
SUCH PROJECT LOAN AND ALL OF THE INDEBTEDNESS OR OBLIGATIONS OF SUCH BORROWER
ARISING HEREUNDER OR THEREUNDER. SUCH BORROWER BY ITS ACCEPTANCE OF SUCH
PROJECT LOAN (a) SHALL BE SUBJECT TO PERSONAL JURISDICTION IN THE STATE OF
INDIANA AND THE FEDERAL COURTS OF THE UNITED STATES OF AMERICA LOCATED IN
STATE OF INDIANA (AND ANY APPELLATE COURTS TAKING APPEALS THEREFROM) FOR THE
ENFORCEMENT OF SUCH BORROWER'S OBLIGATIONS HEREUNDER AND UNDER THE OTHER
PROJECT LOAN DOCUMENTS FOR SUCH PROJECT LOAN AND (b) WAIVES ANY AND ALL
PERSONAL RIGHTS UNDER THE LAW OF ANY OTHER STATE TO OBJECT TO JURISDICTION
WITHIN SUCH STATE FOR THE PURPOSES OF SUCH ACTION, SUIT, PROCEEDING OR
LITIGATION TO ENFORCE SUCH OBLIGATIONS OF such BORROWER. BY ACCEPTANCE OF ITS
PROJECT LOAN, SUCH BORROWER WAIVES AND AGREES NOT TO ASSERT, AS A DEFENSE IN
ANY ACTION, SUIT OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT
OR THE OTHER PROJECT LOAN DOCUMENTS FOR SUCH PROJECT LOAN (x) THAT IT IS NOT
SUBJECT TO SUCH JURISDICTION OR THAT SUCH ACTION, SUIT OR PROCEEDING MAY NOT
BE BROUGHT OR IS NOT MAINTAINABLE IN THOSE COURTS OR THAT THIS AGREEMENT AND
SUCH OTHER PROJECT LOAN DOCUMENTS MAY NOT BE ENFORCED IN OR BY THOSE COURTS
OR THAT IT IS EXEMPT OR IMMUNE FROM EXECUTION, (y) THAT THE ACTION, SUIT OR
PROCEEDING IS BROUGHT IN AN INCONVENIENT FORUM, OR (z) THAT THE VENUE OF THE
ACTION, SUIT OR PROCEEDING IS IMPROPER. NOTHING IN THIS SECTION 9.11 SHALL
BE DEEMED TO PRECLUDE BANK FROM FILING ANY ACTION, SUIT OR PROCEEDING IN
RESPECT OF THIS AGREEMENT OR SUCH OTHER PROJECT LOAN DOCUMENTS IN THE STATE
OF TEXAS OR THE STATE WHERE SUCH PROJECT IS LOCATED OR THE FEDERAL COURTS OF
THE UNITED STATES OF AMERICA LOCATED IN THE STATE OF TEXAS OR THE STATE WHERE
SUCH PROJECT IS LOCATED.
9.12. SURVIVAL. All representations, warranties, covenants,
agreements and obligations of a Borrower contained in this Agreement made in
respect of the Project Loan to such Borrower, as amended or supplemented from
time to time, shall survive the making of Advances of such Project Loan and
shall continue in full force and effect so long as such Project Loan is
outstanding and until payment and performance in full of all of such
Borrower's obligation thereunder and under the Project Loan Documents in
respect of such Project Loan.
9.13. COUNTERPARTS. This Agreement may be executed in any number of
counterparts and by the different parties hereto on separate counterparts,
each of which, when so executed and delivered by the parties, shall
constitute an original but all such counterparts together constituting but
one and the same instrument.
39
9.14. SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon
and shall inure to the benefit of the Bank, the Developer, the Borrower(s)
and their respective successors and assigns, except that the Developer and
the Borrower(s) may not assign or transfer their rights and obligations
hereunder or any interest herein without the prior written consent of the
Bank.
9.15. PROJECT AGREEMENT. Upon the execution of a Project Agreement
by a Borrower, all of the terms and conditions hereof applicable to a
"Borrower" and a "Project Loan" shall be incorporated into such Project
Agreement and shall apply to the Borrower thereunder and the Project Loan
governed thereby, and such Borrower shall be deemed to have accepted such
Project Loan subject to the terms and conditions of this Agreement.
9.16. DEVELOPER'S COVENANTS. Developer covenants that from the date
hereof through the Project Loan Commitment Expiration Date and thereafter
until all Project Loans have been paid in full:
a. Developer will not develop or construct, or guarantee any
indebtedness in respect of, any build to suit retail project (other than
the projects contemplated by this Agreement), unless such project is One
Hundred Percent (100%) pre-leased to a bona-fide third party;
b. Developer shall maintain a net worth (as determined
pursuant to generally accepted accounting principles) of not less than
Five Hundred Thousand Dollars ($500,000);
c. Developer shall not create, incur, assume, suffer to exist,
guarantee or otherwise become liable as a guarantor or as a surety of,
any Indebtedness, except for that certain Twenty Million Dollar
($20,000,000) revolving credit facility from Bank One Arizona, N.A. to
Developer, and any renewal, extension or modification thereof. For the
purposes hereof, Indebtedness shall mean: (a) all indebtedness or other
obligations of Developer for borrowed money or for the deferred purchase
price of property or services, (b) all recourse indebtedness or other
obligations of Developer for borrowed money or for the deferred purchase
price of property or services, the payment or collection of which
Developer is guaranteeing or in respect of which Developer is liable,
contingent or otherwise, including without limitation, liability by way
of agreement to purchase, to provide funds for payment, to supply funds
or otherwise to invest in such another person, or to assure a creditor
against lost, (c) all indebtedness or other obligations of Developer for
borrowed money or for the deferred purchase price of property or services
secured by, or for which the holder of such indebtedness has an existing
right, contingent or otherwise to be secured by any mortgage, deed of
trust, pledge, lien, security interest or other charge or encumbrance
upon or on property owned by Developer, whether or not Developer has
assumed to become liable for the payment of such indebtedness or such
obligations; and (d) capitalized lease obligations of Developer.
d. Developer will furnish to Bank within ninety (90) days
after the end of each fiscal year of Developer, annual financial
statements of Developer, which financial statements shall be reviewed by
certified public accountants acceptable to Lender and certified as to
accuracy by an officer thereof, and shall include a balance sheet,
statement of income and
40
retained earnings and a statement of cash flows, with accompanying
notes to financial statements, shall be prepared in accordance with
generally accepted accounting principles on a basis consistent with
prior years and shall otherwise be in form satisfactory to the Bank.
In addition, Developer covenants that from the Closing Date of the
second Project Loan made hereunder through the Project Loan Commitment
Expiration Date and thereafter until all Project Loans have been paid in
full, Developer shall maintain a minimum cash or cash equivalent balance of
Two Hundred Fifty Thousand Dollars ($250,000).
9.17. WAIVER OF JURY TRIAL. The Developer and the Bank, after
consulting or having had the opportunity to consult with counsel, knowingly,
voluntarily and intentionally waives any right they may have to a trial by
jury in any litigation based upon or arising out of the Loan, any Project
Loan, this Agreement or any other Project Loan Document or any of the
transactions contemplated hereby or by any other Project Loan Document or any
course of conduct, dealing, statements, whether oral or written, or actions
of the Developer or the Bank. Neither the Developer nor the Bank shall seek
to consolidate, by counterclaim or otherwise, any action in which a jury
trial has been waived with any other action in which a jury trial cannot be
or has not been waived. These provisions shall not be deemed to have been
modified in any respect or relinquished by the Bank or the Developer except
by written instrument executed by both the Developer and the Bank.
IN WITNESS WHEREOF, the parties hereto have executed and delivered
this Agreement as of the day and year first above written.
"DEVELOPER"
XXXXXXXX XXXX BTS, INC.,
a Delaware corporation
By: /s/ Xxxxxxx X. Xxx
------------------------------------
Printed: Xxxxxxx X. Xxx
-------------------------------
Title: Vice President
---------------------------------
41
"BANK"
KEYBANK NATIONAL ASSOCIATION, a
national banking association
By: /s/ Xxxxxxxx X. Xxxxx
------------------------------------
Printed: Xxxxxxxx X. Xxxxx
-------------------------------
Title: Vice President
---------------------------------
42
