Contract
Exhibit
10.3
NOTE:
THIS DOCUMENT IS THE SUBJECT OF A CONFIDENTIAL TREATMENT REQUEST PURSUANT TO
RULE 24b-2 UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED. PORTIONS
OF
THIS DOCUMENT FOR WHICH CONFIDENTIAL TREATMENT HAS BEEN REQUESTED HAVE BEEN
REDACTED AND ARE MARKED HEREIN BY “[***]”. SUCH REDACTED INFORMATION HAS
BEEN FILED SEPARATELY WITH THE COMMISSION PURSUANT TO THE CONFIDENTIAL TREATMENT
REQUEST.
dated
as of
March
19, 2007
among
THE
CHALETS AT THE LODGE AT VAIL, LLC,
The
LENDERS Party hereto,
and
XXXXX
FARGO BANK, NATIONAL ASSOCIATION,
as
Administrative Agent and Book Manager
_______________________________
$123,000,000
_______________________________
XXXXX
FARGO BANK, NATIONAL ASSOCIATION and
U.S.
BANK NATIONAL ASSOCIATION
Joint
Lead Arrangers
U.S.
BANK NATIONAL ASSOCIATION
Syndication
Agent
TABLE
OF CONTENTS
Page
ARTICLE
I
DEFINITIONS AND ACCOUNTING MATTERS 1
1.1 Certain
Defined Terms 1
1.2 Accounting
Terms and Determinations 27
1.3 Terms
Generally 27
1.4 Additional
Defined Terms 27
ARTICLE
II THE LOAN FACILITY 29
2.1 Loans. 29
2.2 Borrowings;
Certain Notices. 29
2.3 Changes
to Commitments. 34
2.4 Lending
Offices 35
2.5 Several
Obligations; Remedies Independent 35
2.6 Notes 35
2.7 Conversion
and Continuations of Loans. 35
ARTICLE
III PAYMENTS OF INTEREST AND PRINCIPAL 36
3.1 Interest. 36
3.2 Repayment
of Loans 36
3.3 Late
Charge 37
3.4 Optional
Prepayments 37
3.5 Mandatory
Prepayments. 37
3.6 Interest
and Other Charges on Prepayment 40
3.7 Lender's
Records as to Sums Owing 40
3.8 Application
of Payments Received 40
3.9 Sharing
of Payments, Etc. 40
ARTICLE
IV EXTENSION OF THE MATURITY DATE 41
4.1 Extension
of Scheduled Maturity Date 41
ARTICLE
V
INCREASED COSTS, LIBOR AVAILABILITY, ILLEGALITY, ETC. 42
5.1 Costs
of
Making or Maintaining LIBOR Rate Loans 42
5.2 Limitation
on LIBOR Rate Loans; LIBOR Not Available 43
5.3 Illegality 43
5.4 Treatment
of Affected Loans 43
5.5 Compensation 44
5.6 Additional
Waivers 45
5.7 Taxes. 45
ARTICLE
VI CONDITIONS PRECEDENT 46
6.1 Conditions
Precedent to Closing and the Effectiveness of Commitments 46
6.2 Conditions
Precedent to the Making of any Loans 48
6.3 Conditions
Precedent to the Final Loans 49
ARTICLE
VII DISBURSEMENT OF THE LOANS; LOAN BALANCING 50
7.1 General
Conditions. 50
7.2 Loan
Balancing. 51
7.3 Project
Budget Line-Items; Loans to be Used for Specific Line-Items. 52
7.4 Project
Budget Contingencies. 53
7.5 Interest;
Fees; and Expenses. 54
7.6 Retainage. 54
7.7 Unsatisfactory
Work 55
7.8 No
Waiver
or Approval by Reason of Loan Advances 55
7.9 Construction
Consultant 56
7.10 Authorization
to Make Loan Advances to Cure Borrower's Defaults 56
7.11 Administrative
Agent's Right to Make Loan Advances in Compliance with the Completion Guaranty
and Development Agreement Guaranty 56
7.12 No
Third-Party Benefit 57
7.13 Payments
for Spa Project 57
ARTICLE
VIII REPRESENTATIONS AND WARRANTIES 57
8.1 Organization;
Powers 57
8.2 Authorization;
Enforceability 57
8.3 Government
Approvals; No Conflicts 58
8.4 Financial
Condition 58
8.5 Litigation 58
8.6 ERISA 58
8.7 Taxes 58
8.8 Investment
and Holding Company Status 59
8.9 Environmental
Matters 59
8.10 Organizational
Structure. 60
8.11 Title. 60
8.12 No
Bankruptcy Filing 61
8.13 Executive
Offices; Places of Organization 61
8.14 Compliance;
Government Approvals 61
8.15 Condemnation;
Casualty 62
8.16 Utilities
and Public Access; No Shared Facilities 62
8.17 Solvency 62
8.18 Governmental
Regulations 62
8.19 No
Joint
Assessment; Separate Lots 62
8.20 Security
Documents and Liens 62
8.21 Project
Documents 63
8.22 Material
Agreements 63
8.23 Project
Budget 63
8.24 Insurance 63
8.25 Flood
Zone 63
8.26 Boundaries 63
8.27 Illegal
Activity 64
8.28 Permitted
Liens 64
8.29 Anti-Terrorism
Laws. 64
8.30 Defaults 64
8.31 Design
Professionals' Certificates 64
8.32 Other
Representations 65
8.33 Loan
In
Balance 65
8.34 Employee
Benefit Plans 65
8.35 No
Construction 65
8.36 Appraisal 65
8.37 Labor
Controversies 65
8.38 Insider 65
8.39 True
and
Complete Disclosure 65
8.40 Survival
of Representations 66
ARTICLE
IX AFFIRMATIVE COVENANTS OF BORROWER 66
9.1 Information 66
9.2 Notices
of Material Events 67
9.3 Existence,
Etc. 67
9.4 Compliance
with Laws; Adverse Regulatory Changes. 68
9.5 Insurance. 68
9.6 Real
Estate Taxes and Other Charges. 69
9.7 Further
Assurances 70
9.8 Performance
of Project Documents, Material Agreements, and Easements. 70
9.9 Performance
of the Loan Documents 71
9.10 Books
and
Records; Inspection Rights 71
9.11 Environmental
Compliance. 71
9.12 Reserves 72
9.13 Accessibility
Laws. 73
9.14 Use
of
Proceeds; Margin Regulations. 73
9.15 Inspection 74
9.16 Project
Construction. 74
9.17 Proceedings
to Enjoin or Prevent Construction 75
9.18 Administrative
Agent's, Lenders' and Construction Consultant's Actions for their Own Protection
Only 76
9.19 Sign
and
Publicity 76
9.20 On-Site
and Off-Site Materials 76
9.21 Minimum
Loan Coverage Ratio 77
9.22 Loan
to
Value and Loan to Cost 77
9.23 Leasing. 78
9.24 Club
Memberships 78
ARTICLE
X
NEGATIVE COVENANTS OF BORROWER 78
10.1 Fundamental
Change. 79
10.2 Limitation
on Liens 79
10.3 Transfer;
Pledge. 79
10.4 Indebtedness 80
10.5 Investments 81
10.6 Restricted
Payments 81
10.7 Change
of
Organization Structure; Location of Principal Office 81
10.8 Transactions
with Affiliates 81
10.9 No
Joint
Assessment; Separate Lots 81
10.10 Zoning 81
10.11 ERISA 82
10.12 Amendment
of Contracts and Government Approvals 82
10.13 Change
Orders; Purchaser Upgrades. 82
10.14 Special
Districts/Sales Tax Increment Financing 83
10.15 Anti-Terrorism
Law 84
ARTICLE
XI INSURANCE OR CONDEMNATION AWARDS 84
11.1 Casualties
and Condemnations. 84
11.2 Insurance
Proceeds and Condemnation Awards. 84
11.3 Application
of Insurance Proceeds and Condemnation Awards. 86
ARTICLE
XII EVENTS OF DEFAULT 87
12.1 Events
of
Default 87
12.2 Remedies 91
ARTICLE
XIII ADMINISTRATIVE AGENT 93
13.1 Appointment,
Powers and Immunities 93
13.2 Reliance
by Administrative Agent 94
13.3 Borrower
Defaults. 95
13.4 Rights
as
a Lender 97
13.5 Indemnification 97
13.6 Non-Reliance
on Administrative Agent and Other Lenders 97
13.7 Failure
to Act 98
13.8 Resignation
and Removal of Administrative Agent. 98
13.9 Consents
and Certain Actions under, and Modifications of, Loan Documents. 99
13.10 Authorization 101
13.11 Defaulting
Lenders. 102
13.12 Amendments
Concerning Agency Functions 105
13.13 Liability
of Administrative Agent 105
13.14 Transfer
of Agency Function 105
13.15 Sharing
of Payments, Etc. 105
13.16 Bankruptcy
of Borrower 106
13.17 Termination 106
ARTICLE
XIV MISCELLANEOUS 106
14.1 Non-Waiver;
Remedies Cumulative 106
14.2 Notices. 107
14.3 Expenses,
Etc. 108
14.4 Indemnification 108
14.5 Amendments,
Etc. 109
14.6 Successors
and Assigns 109
14.7 Assignments
and Participations. 109
14.8 Survival 110
14.9 Multiple
Copies 110
14.10 Right
of
Set-off. 110
14.11 Brokers 111
14.12 Estoppel
Certificates. 111
14.13 Preferences 112
14.14 Certain
Waivers 112
14.15 Entire
Agreement 112
14.16 Severability 112
14.17 Captions 113
14.18 Counterparts 113
14.19 GOVERNING
LAW 113
14.20 SUBMISSION
TO JURISDICTION 113
14.21 WAIVER
OF
JURY TRIAL; COUNTERCLAIM 113
14.22 Confidentiality 114
14.23 Usury
Savings Clause 115
14.24 Controlled
Accounts 115
14.25 Financing
Statements 116
14.26 Unavoidable
Delay 116
EXHIBITS
AND SCHEDULES
Exhibits
Exhibit
A: Legal
Description
Exhibit
B: Project
Budget
Exhibit
C: Commitment
Amounts and Percentage
Exhibit
D: Qualified
Purchase Contracts
Exhibit
E: Plans
and
Specifications
Exhibit
F: Loan
Par
Value
Exhibit
G: Request
for Continuation or Conversion
Exhibit
H: Request
for Loan Advance
Exhibit
I: Form
of
Deposit Letter of Credit
Exhibit
J: Transfer
Authorizer Designation
Exhibit
K: Anticipated
Encumbrances
Schedules
Schedule
6.1: Closing
Conditions
Schedule
6.2: Conditions
to Loans
Schedule
6.3: Conditions
to Final Loans
Schedule
8.5: Pending
Litigation
Schedule
8.10: Organization
Chart
Schedule
8.14: Government
Approvals
Schedule
9.5: Insurance
Requirements
This
CONSTRUCTION LOAN AGREEMENT is dated as of March 19, 2007, by and among THE
CHALETS AT THE LODGE AT VAIL, LLC, a Colorado limited liability company (the
"Borrower");
each
of the lenders that is a signatory hereto identified under the caption "LENDERS"
on the signature pages hereto (individually, a "Lender"
and,
collectively, the "Lenders");
and
XXXXX FARGO BANK, NATIONAL ASSOCIATION, a national banking association
("Xxxxx
Fargo"),
as
contractual representative of the Lenders to the extent and in the manner
provided in Article
XIII
hereof
(in such capacity, the "Administrative
Agent").
RECITALS
1. Borrower
is the fee owner of that certain real property located in the County of Eagle,
State of Colorado and being more fully described in Exhibit
A
attached
hereto (the "Land").
2. Borrower
proposes to construct the Improvements (as hereinafter defined) on the Land
and,
in connection therewith has requested and applied to the Lenders for a loan
in
the amount of One Hundred Twenty-Three Million and No/100 Dollars
($123,000,000.00) or such other amount as may be permitted by the terms hereof
for the purposes of paying certain costs pertaining thereto. The Lenders have
agreed to make such loans on and subject to the terms and conditions hereinafter
set forth.
NOW,
THEREFORE, for good and valuable consideration, the receipt and sufficiency
of
which is hereby acknowledged, the parties hereto agree as follows:
ARTICLE
I
DEFINITIONS
AND ACCOUNTING MATTERS
1.1 Certain
Defined Terms
.
As used
herein, the following terms shall have the following meanings (all terms defined
in this Section 1.1
or in
other provisions of this Agreement in the singular shall have the same meanings
when used in the plural and vice versa):
"Accessibility
Laws"
shall
mean the Americans with Disabilities Act of 1990, as amended from time to time,
and any similar state or local laws, rules or regulations relating to the
accessibility of buildings or facilities.
"Administrative
Agent"
shall
have the meaning assigned to such term in the preamble.
"Administrative
Agent's Account"
shall
mean the account maintained by Administrative Agent with such bank as may from
time to time be specified by Administrative Agent.
"Affiliate"
shall
mean, with respect to any Person, another Person that directly or indirectly
controls, or is under common control with, or is controlled by, such Person
and,
if such Person is an individual, any member of the immediate family (including
parents, spouse, children and siblings) of such individual and any trust whose
principal beneficiary is such individual or one or more members of such
immediate family and any Person who is controlled by any such member or trust.
In no event shall the Administrative Agent or any Lender be deemed to be an
Affiliate of Borrower.
"Agency
Fee"
shall
mean any agency fees agreed to by Borrower and Administrative
Agent.
"Agreement"
shall
mean this Construction Loan Agreement, as the same may be Modified from time
to
time.
"Anticipated
Encumbrances"
shall
mean those encumbrances, easements and agreements first appearing after the
date
hereof that Borrower reasonably anticipates will be required to obtain final
Government Approval of the Project or for the sale or operation of the Project.
No encumbrance, easement or agreement materially adversely affecting the Project
may be an "Anticipated Encumbrance." Anticipated Encumbrances may include,
without limitations, the Condominium Declaration, Condominium Map and other
matters contemplated by the Subdivision Agreement, certain easements required
for access and other encumbrances contemplated by the Development Agreement
with
the Town of Vail. The list of certain of the Anticipated Encumbrances is set
forth in Exhibit
K
attached
hereto.
"Anti-Terrorism
Laws"
shall
mean any Applicable Laws relating to terrorism or money laundering, including,
but not limited to, the Anti-Terrorism Order and the Uniting and Strengthening
America by Providing Appropriate Tools Required to Intercept and Obstruct
Terrorism Act of 2001, Public Law 107-56.
"Anti-Terrorism
Order"
shall
mean Executive Order No. 13,224, 66 Fed. Reg. 49,079 (2001), issued by the
President of the United States of America (Executive Order Blocking Property
and
Prohibiting Transactions With Persons Who Commit, Threaten to Commit, or Support
Terrorism).
"Applicable
Law"
shall
mean any statute, law, regulation, ordinance, rule, judgment, rule of common
law, order, decree, Government Approval, approval, concession, grant, franchise,
license, agreement, directive, guideline, policy, requirement, or other
governmental restriction or any similar form of decision of, or determination
by, or any interpretation or administration of any of the foregoing by, any
Governmental Authority, whether now or hereinafter in effect and, in each case,
as amended (including any thereof pertaining to land use, zoning and building
ordinances and codes).
"Applicable
Interest Rate"
shall
mean, subject to Section 14.23
below,
with respect to any Loan, (a) the LIBOR-Based Rate, (b) the Base Rate, or (c)
during the existence of any Event of Default, the Default Rate.
"Applicable
Lending Office"
shall
mean, for each Lender, the "Lending Office" of such Lender (or of an Affiliate
of such Lender) designated by such Lender from time to time in writing to
Administrative Agent.
"Applicable
Margin"
shall
mean 145 basis points; provided, however, that upon the receipt, review and
approval by Administrative Agent of Qualified Purchase Contracts for all
thirteen (13) Units comprising the Residential Component, the Applicable Margin
shall mean 135 basis points.
"Appraisal"
shall
mean the appraisal report of the Project from the Appraiser dated February
4,
2007, and any future appraisal of the Project ordered by Administrative Agent
and prepared by an Appraiser, which Appraisal must comply in all respects with
the standards for real estate appraisal established pursuant to Title XI of
the
Financial Institutions Reform, Recovery, and Enforcement Act of 1989, and
otherwise in form and substance satisfactory to Administrative
Agent.
"Appraised
Land Value"
shall
mean the "as-is" appraised value of the Land only as determined by the Appraisal
dated February 4, 2007, which amount is Twenty-Four Million Dollars
($24,000,000.00).
"Appraised
Value"
shall
mean the sum of the values of the Residential and Commercial Components as
determined by the Appraisal. With respect to the Residential Component, the
Appraised Value is the bulk discounted value to a single user "upon completion"
of the Project, which amount, based upon the Appraisal, is One Hundred
Forty-Four Million Seven Hundred Thousand Dollars ($144,700,000.00), and with
respect to the Commercial Component, the Appraised Value is the value "upon
completion" of construction, which amount is Seventy-Two Million Dollars
($72,000,000.00), as determined pursuant to the Appraisal.
"Appraiser"
shall
mean National Valuation Consultants, Inc., or any other "state certified general
appraiser" as such term is defined and construed under applicable regulations
and guidelines issued pursuant to Title XI of the Financial Institutions Reform,
Recovery, and Enforcement Act of 1989, which appraiser must have been licensed
and certified by the applicable Governmental Authority having jurisdiction
in
the state where the Project is located, and which appraiser shall have been
selected by Administrative Agent.
"Architecture
Agreement"
shall
mean that certain agreement entitled Architectural Work Release Agreement dated
May 1, 2003, between 42|40
Architecture Inc., and The Vail Corporation, as assigned to Borrower on November
1, 2006.
"Assignment
and Assumption"
shall
mean an Assignment and Assumption, duly executed by the parties thereto and
consented to by Borrower and Administrative Agent in accordance with Section
14.7(b).
"Assignment
of Architectural Agreements"
shall
mean that certain Assignment of Architectural Agreements and Plans and
Specifications of even date herewith, and the "Architect's Consent" of even
date
herewith executed by Borrower, and the Borrower's Architect, in favor of
Administrative Agent, for the benefit of the Lenders, as the same may be
Modified.
"Assignment
of Borrower's Rights in Purchase Contracts"
shall
mean that certain Assignment of Borrower's Rights in Purchase Contracts of
even
date herewith, executed by the Borrower in favor of the Administrative Agent,
for the benefit of the Lenders, as the same may be Modified.
"Assignment
of Construction Agreements"
shall
mean that certain Assignment of Construction Agreements, and the "Contractor's
Consent" attached thereto, of even date herewith executed by Borrower, and
the
General Contractor, in favor of Administrative Agent, for the benefit of the
Lenders, as the same may be Modified.
"Authorized
Officer"
shall
mean, (a) with respect to any Person, any authorized officer of such Person
whose name appears on a certificate of incumbency delivered concurrently with
the execution of this Agreement, as such certificate of incumbency may be
amended from time to time to identify the names of the individuals then holding
such offices, and (b) with respect to Borrower, its Managing Member.
"Available
Contingency Amount"
shall
mean an amount equal to the applicable percentage of the Contingency Fund
available to Borrower for reallocation as set forth in Section 7.3(b)
during
each phase of Project Completion as follows: (a) 0% - 25% complete 25% shall
be
available, (b) 26 - 50% complete 50% shall be available, (c) 51% - 75% complete
75% shall be available, and (d) 76% - 100% complete 100% shall be available.
The
percentage of Completion shall be as determined by Administrative Agent and
the
Construction Consultant in their reasonable discretion.
"Bankruptcy
Action"
shall
mean, as to any Person, (a) an involuntary proceeding shall be commenced or
an
involuntary petition shall be filed, seeking (i) liquidation, reorganization
or
other relief in respect of such Person or its debts, or of a substantial part
of
its assets, under any Federal, state or foreign bankruptcy, insolvency,
receivership or similar law now or hereafter in effect or (ii) the appointment
of a receiver, trustee, custodian, sequestrator, conservator or similar official
for such Person or for a substantial part of its assets, and, in any such case,
such proceeding or petition shall continue undismissed for a period of sixty
(60) days or an order or decree approving or ordering any of the foregoing
shall
be entered; or (b) any Person shall (i) voluntarily commence any proceeding
or
file any petition seeking liquidation, reorganization or other relief under
any
Federal, state or foreign bankruptcy, insolvency, receivership or similar law
now or hereafter in effect, (ii) consent to the institution of, or fail to
contest in a timely and appropriate manner, any proceeding or petition described
in clause (a) above, (iii) apply for or consent to the appointment of a
receiver, trustee, custodian, sequestrator, conservator or similar official
of
such Person or for a substantial part of any of their assets, (iv) file an
answer admitting the allegations of a petition filed against it in any such
proceeding, (v) make a general assignment for the benefit of creditors or (vi)
take any action for the purpose of effecting any of the foregoing.
"Bankruptcy
Code"
shall
mean the Federal Bankruptcy Code of 1978, as amended from time to
time.
"Base
Building Work"
shall
mean all of that certain work to be performed by Borrower and/or its contractors
constituting construction of the Improvements as more particularly described
in
the Plans and Specifications (except for (i) minor Punch List Items that do
not
adversely affect the use, occupancy or operation of the Project and (ii) tenant
improvements to rentable space in the Commercial Component that is not yet
occupied.)
"Base
Rate"
shall
mean, for any day, a rate per annum equal to the greater of the (a) Prime Rate
for such day, and (b) the Federal Funds Rate in effect on that day as announced
by the Federal Reserve Bank of New York, plus 0.5%. Each change in any interest
rate provided for herein based upon the Base Rate resulting from a change in
the
Base Rate shall take effect at the time of such change in the Base
Rate.
"Base
Rate Loans"
shall
mean the portions of the Outstanding Principal Amount that bear interest at
the
Base Rate.
"Borrower"
shall
have the meaning assigned to such term in the preamble.
"Borrower
Party"
shall
mean each of Borrower and Guarantor.
"Borrower's
Account"
shall
mean an account maintained by Borrower with Xxxxx Fargo Bank, National
Association as may from time to time be specified by or approved by
Administrative Agent to accept the deposit of loan advances in accordance with
this Agreement.
"Borrower's
Architect"
shall
mean 42|40
Architecture Inc., or any replacement thereof approved by Administrative
Agent.
"Business
Day"
shall
mean any day that is not a Saturday, Sunday or other day on which commercial
banks in Colorado and California are authorized or required by law to remain
closed; provided
that,
when used in connection with a borrowing, or Continuation of, or Conversion
into, a payment or prepayment of principal of or interest on, or an Interest
Period for, a LIBOR Rate Loan, or a notice by Borrower with respect to any
such
borrowing, Continuation, Conversion, payment, prepayment or Interest Period,
the
term "Business Day" shall also exclude any day on which banks are not open
for
dealings in dollar deposits in the London interbank market. Unless specifically
referenced in this Agreement as a Business Day, all references to "days" shall
be to calendar days.
"Casualty"
shall
mean any loss of or damage to, any portion of the Project by fire or other
casualty.
"CCR
Agreement"
shall
mean any agreement regarding conditions, covenants and restrictions which may
be
entered into by Borrower which are related to all or any portion of the
Project.
"Change
of Control"
shall
mean any transaction that results in, directly or indirectly, (a) any Person
other than Vail Resorts, Inc. or the Vail Corporation or a wholly-owned
subsidiary thereof, whether directly or indirectly, owning 51% or more of the
Equity Interests in Borrower, (b) any Person other than Vail Resorts, Inc.
or
The Vail Corporation or a wholly-owned subsidiary thereof having the
responsibility for managing and administering the day-to-day business and
affairs of Borrower, (c) in any other respects, any Person other than Vail
Resorts, Inc. or The Vail Corporation directly or indirectly controlling
Borrower, or (d) a "Change of Control Transaction" under the Principal Bank
Credit Facility.
"Change
Order"
shall
mean any Modification to (a) the Plans and Specifications, (b) the Project
Budget, (c) the Construction Schedule, or (d) the General Contract, a Major
Subcontract or any subcontract, which increases the cost of Construction Work
above the budgeted cost therefor previously approved by Administrative Agent
but
specifically excluding any Purchaser Upgrades.
"Closing
Date"
shall
mean the date of this Agreement.
"Club"
shall
mean the private membership club known as “The Vail Mountain Club” comprised of
members who have purchased Club Memberships for the privilege of access to
and
use of the Club Component, which includes approximately 14,813 square feet
of
social facilities, and parking facilities in the Shared Parking Garage
Component.
"Club
Component"
shall
mean the Club portion of the Improvements to be available for use to third
party
purchasers of Club Memberships.
"Club
Component Personal Property"
shall
mean all furniture, furnishings, and personal property located at or used or
to
be used in connection with the Club Component.
"Club
Membership Deposit Account"
shall
mean an account with Administrative Agent pledged as Collateral in which
Borrower shall deposit the Club Membership Deposits and from which such Club
Membership Deposits may be withdrawn to be applied to the Facility Amount as
set
forth herein or otherwise disbursed by Administrative Agent or returned to
the
buyer, subject to the terms of the application for Club
Memberships.
"Club
Membership Deposits"
shall
mean: (a) the initial application deposit fee of not less than One Hundred
Thousand Dollars ($100,000.00) for a Full Membership and Fifty Thousand Dollars
($50,000.00) for a Social Membership (provided, however, up to ten (10) Social
Memberships shall be sold for $80,000.00), paid to Borrower for each of the
Club
Memberships upon execution of the application for membership, and (b) the
balance of the purchase price of the respective Club Memberships when paid
to
Borrower for each of the Club Memberships. The Club Membership Deposits shall
be
held in the Club Membership Deposit Account to be released and applied to the
Facility Amount as set forth herein up to the amount of the Release Price for
the Club Component, or otherwise disbursed by Administrative Agent or returned
to the buyer, subject to the terms of the application for Club Memberships.
"Club
Memberships"
shall
mean not less than 450 memberships (consisting of not less than 150 Full
Memberships and 300 Social Memberships) to be sold by Borrower pursuant to
membership agreements. For purposes of these definitions, a "Full Membership"
shall be a membership that includes access to both social facilities and the
Shared Parking Garage Component. The membership fee for a Full Membership shall
be at least $250,000. A "Social Membership" shall be a membership that includes
access to only social facilities. The membership fee for a Social Membership
shall be at least $100,000 (other than with respect to up to ten (10) Social
Memberships sold for $80,000.00).
"Code"
shall
mean the Internal Revenue Code of 1986, as amended from time to
time.
"Collateral"
shall
mean, collectively, (a) all construction materials and equipment and all
furniture, furnishings, fixtures, machinery, equipment, inventory and any other
item of personal property in which Borrower now or hereafter owns or acquires
any interest or right, including any of the foregoing that are leased, which
are
used or useful in the construction, operation, use, sale or occupancy of the
Project (or any portion thereof); (b) all of Borrower's accounts receivable
in
connection with the Project (or any portion thereof); (c) all of Borrower's
documents, instruments, contract rights (including any rights under any
development agreement) and general intangibles relating to the present or future
construction, use, sale, operation or occupancy of the Project (or any portion
thereof), including the right to use the name "The Lodge at Vail Chalets",
"Vail
Mountain Club", or any such name given the Project or any component thereof,
but
excluding any rights to the Vail Resorts name and any tradenames or trademarks
associated therewith; (d) all insurance proceeds from any policies of insurance
covering any of the aforesaid; and (e) such other collateral as may be described
in the Security Documents.
"Commercial
Component"
shall
mean, collectively, the Club Component and the Retail/Resort Services
Component.
"Commitment"
shall
mean, as to each Lender, the obligation of such Lender to make Loans in an
aggregate amount up to but not exceeding the amount set opposite the name of
such Lender on Exhibit
C
attached
hereto under the caption "Commitment" or, in the case of a Person that becomes
a
Lender pursuant to an assignment permitted under Section 14.7(b),
as
specified in the respective Assignment and Assumption (consented to by Borrower
and Administrative Agent in accordance with Section 14.7(b))
pursuant to which such assignment is effected, as such amount may be modified
by
any Assignment and Assumption or as determined by Administrative
Agent.
"Completion"
as
applicable to the Construction Work, Project or Improvements shall mean the
satisfaction of all of the following conditions: (a) the Construction Work
(except for (i) minor Punch List Items that do not adversely affect the use,
occupancy or operation thereof and (ii) tenant improvements to rentable space
in
the Commercial Component that is not yet occupied) or Base Building Work, as
appropriate, shall be completed substantially in accordance with the Plans
and
Specifications; (b) the Construction Consultant or Design Professional, at
Administrative Agent's discretion, shall have issued to Administrative Agent
a
report confirming the satisfaction of the condition set forth in clause (a)
above; (c) valid certificates of occupancy for all components of the Project
(except the incomplete portions thereof referred to in clause (a) above)
shall have been issued by the appropriate Governmental Authority (which
certificates of occupancy may be temporary certificates of occupancy), and
(d)
the statutory lien period or periods within which contractors, subcontractors,
mechanics, materialmen and others providing labor and/or materials must file
mechanic's and other liens shall have expired or appropriate waivers of such
liens or bonds sufficient to cover the amount of such liens reasonably
acceptable to Administrative Agent shall have been obtained from such parties
or
the Borrower, as appropriate.
"Completion
Date"
shall
mean, subject to Section 14.26,
(a)
with respect to the Residential Component, the first to occur of (i) the date
that is fifteen (15) days in advance of the date required for delivery of a
Unit
pursuant to the terms of a Qualified Purchase Contract, or (ii) the date that
is
twenty-four (24) months after the Closing Date, and (b) with respect to the
Project (other than the Residential Component), the date that is twenty-four
(24) months after the Closing Date..
"Completion
Guaranty"
shall
mean that certain Guaranty of Completion executed by Guarantor in favor of
Administrative Agent substantially concurrently herewith, as the same may be
Modified from time to time.
"Condemnation"
shall
mean a taking or voluntary conveyance during the term hereof of all or part
of
the Project, or any interest therein or right accruing thereto or use thereof,
as the result of, or in settlement of, any condemnation or other eminent domain
proceeding (including but not limited to any transfer made in lieu of or in
anticipation of the exercise of such taking) by any Governmental Authority
affecting the Project or any portion thereof whether or not the same shall
have
actually been commenced.
"Condemnation
Awards"
shall
mean all compensation, awards, damages, rights of action and proceeds awarded
to
Borrower by reason of a Condemnation.
"Consents"
shall
mean the written consents of the Borrower's Architect and the General Contractor
attached to the Assignment of Architecture Agreement and the Assignment of
Construction Agreements, respectively.
"Construction
Consultant"
shall
mean RE Tech + and/or such other consultant as Administrative Agent may engage
on behalf of the Lenders in connection herewith.
"Construction
Schedule"
shall
mean the schedule prepared and certified by Borrower and verified by the
Construction Consultant establishing a timetable for commencement and Completion
of the Construction Work, showing, on a monthly basis, the anticipated progress
of the Construction Work and showing that all of the Construction Work will
be
completed on or before the Completion Date, as the same may from time to time
hereafter be Modified in accordance with the terms of this
Agreement.
"Construction
Work"
shall
mean all work and materials (including all labor, equipment and fixtures with
respect thereto) necessary to construct the Improvements, all of which shall
be
performed and completed substantially in accordance with and as contemplated
by
the Plans and Specifications and all Applicable Laws.
"Consumer
Price Index"
shall
mean the consumer price index for the Denver area for all Urban Consumers-All
Items, published monthly by the Bureau of Labor Statistics of the United States
Department of Labor.
"Continue",
"Continuation"
and
"Continued"
shall
refer to the continuation pursuant to Section 2.7
of (a) a
LIBOR Rate Loan from one Interest Period to the next Interest Period or
(b) a Base Rate Loan at the Base Rate.
"Controlled
Account"
shall
mean one or more deposit accounts established by Administrative Agent (for
the
benefit of the Lenders) at a depository bank or financial institution that
is
acceptable to Administrative Agent, and which is established and maintained
in
accordance with Section 14.24
herewith.
"Convert",
"Conversion"
and
"Converted"
shall
refer to a conversion pursuant to Section 2.7
of one
Type of Loans into another Type of Loans.
"Cost
and Plan Review"
shall
mean a report of the Construction Consultant in form and substance reasonably
satisfactory to Administrative Agent, as to the Project Budget, the Plans and
Specifications, the Construction Schedule, a pro forma draw schedule, equipment
selection, expected performance, operating costs and as to such other matters
as
Administrative Agent may reasonably request, including, without limitation,
a
detailed plan and cost review.
"Date
Down Endorsement"
shall
mean any date down endorsements (Form 122 or otherwise) to the Title Policy
or
other evidence of date down of title acceptable to Administrative Agent in
its
reasonable discretion covering disbursements of loan proceeds made or to be
made
subsequent to the date of the Title Insurance Policy.
"Default"
shall
mean an event that with notice, lapse of time, or both would become an Event
of
Default.
"Default
Rate"
shall
mean, as applicable, a rate per annum equal to the greater of (a) the
LIBOR-Based Rate plus three and one-half percent (3.5%) or (b) the Base Rate
as
in effect from time to time plus three and one-half percent (3.5%); provided,
however,
that in
no event shall the Default Rate exceed the Maximum Rate.
"Deposit
Letter of Credit"
shall
mean an unconditional, irrevocable standby letter of credit that may be
delivered to Administrative Agent by Borrower in lieu of Framing Deposits and/or
Club Membership Deposits, in accordance with Section 6.1(j)
hereof,
in substantially the same form as attached hereto as Exhibit
I
and
subject to the following:
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(a)
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(b)
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The
amount of the Deposit Letter of Credit shall be equal to the amount
of the
Framing Deposits and/or Club Membership Deposits that it replaces;
provided, that it does not have to replace all of such required Framing
Deposits and/or Club Membership Deposits, but shall be in the full
amount
of the Framing Deposit for each Unit that it replaces, and shall
be in
incremental amounts equal to Club Membership
Deposits;
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(c)
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The
Deposit Letter of Credit must provide for partial drawings, to the
extent
that amounts are required to be drawn to refund Framing Deposits
and/or
Club Membership Deposits, or to apply the same to the Facility Amount
as
set forth herein, unless Borrower provides other funds for such refund
or
application;
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(d)
|
The
Deposit Letter of Credit shall be deemed Collateral for the Facility
Amount and may be drawn upon by Administrative Agent in the Event
of
Default hereunder; and
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(e)
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The
term of the Deposit Letter of Credit shall be coterminous with the
Maturity Date, unless it provides that it will be renewed or replaced
prior to its expiration. It shall not be canceled unless the corresponding
amount of deposits that it represents is deposited in the appropriate
Controlled Account; provided, however, that in connection with the
release
of the Club Component, the Deposit Letter of Credit shall be reduced
by an
amount equal to all Club Membership Deposits that were replaced by
such
Deposit Letter of Credit and upon the release of any Residential
Unit, the
Deposit Letter of Credit shall be reduced by the amount of the Framing
Deposit attributable to such released Residential Unit and the Deposit
Letter of Credit may reduce by its own terms to reflect the foregoing
or
the Borrower shall have a right to provide a replacement Deposit
Letter of
Credit in such reduced amount.
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"Depository
Bank"
shall
mean any bank or financial institution in which a Controlled Account is
established in accordance with Section 14.24
hereof.
"Design
Professional"
shall
mean, collectively, Borrower's Architect, structural engineer, mechanical
engineer and other design professionals relating to the Construction Work,
as
approved by Administrative Agent, and any reference in this Agreement to a
certification or other document to be executed by the applicable Design
Professional shall mean one or more of such Design Professionals designated
by
Administrative Agent as the Design Professionals to execute such certification
or document, depending on the areas of expertise covered by such certification
or document.
"Development
Agreement"
shall
mean individually or collectively, (a) that certain Front Door Development
Agreement dated effective July 18, 2006, by and between the Town of Vail, and
The Vail Corporation, d/b/a Vail Associates, Inc., as assigned to Borrower
pursuant to an Assignment of Development Agreement dated as of March ___, 2007;
(b) that certain Development and Use Agreement dated ___________, 2006, by
and
among Lodge Apartment Condominium Association, Inc., Lodge Properties, Inc.,
and
Borrower; (c) that certain Development and Use Agreement dated October 6, 2006,
by and among One Vail Place Condominium Association, Riva Ridge 45/05, LLC,
Xxxxxx Xxxxx, Xxxxx X. Xxxxxxxx and Xxxxx X. Xxxxxxxx, and Borrower; and (d)
that certain Development and Use Agreement dated August 13, 2002, as amended,
by
and between The Lodge South Condominium Association, Inc., and Vail Resorts
Development Company, as assigned to Borrower pursuant to an Assignment of
Development Agreement dated as of March ___, 2007.
"Development
Agreement Guaranty"
shall
mean that certain Development Agreement Guaranty executed by Guarantor in favor
of Administrative Agent substantially concurrently herewith, as the same may
be
Modified from time to time.
"Discretionary
Approvals"
shall
mean all discretionary governmental approvals, authorizations, permits and
entitlements which have been or will be issued with respect to the Improvements,
including, without limitation, all applicable building, land use and zoning
approvals, annexation agreements, plot plan approvals, subdivision approvals
(including the approval and recordation of any required subdivision map),
environmental approvals (including a negative declaration or an environmental
impact report if required under applicable law), and sewer and water
permits.
"Distribution"
shall
mean a payment of cash, assets, or proceeds of any kind by a Person (the
"Distributor")
to any
other Person (a "Distributee")
that
owns a direct or indirect Equity Interest in such Distributor, including,
without limitation, repayment of any loans made by such Distributee to such
Distributor, or a return of any capital contribution made by such Distributee,
distributions upon termination, liquidation or dissolution of such
Distributor.
"Dollars"
and
"$"
shall
mean lawful money of the United States of America.
"Xxxxxxx
Money Deposits"
shall
mean those non-refundable cash deposits made by purchasers under any Qualified
Purchase Contract in the amount of fifteen percent (15%) of the sales price
of
any Residential Component Unit and referred to therein as "Xxxxxxx Money",
but
not a Framing Deposit. Xxxxxxx Money Deposits to be deposited by Borrower into
the Xxxxxxx Money Deposit Account shall serve as pledged collateral and, at
Administrative Agent’s determination, may be used in connection with
construction of Improvements or applied to the Facility Amount or otherwise
disbursed by Administrative Agent or returned to the buyer, subject to the
terms
of the Qualified Purchase Contract; provided, however, to the extent that
Xxxxxxx Money is paid to Borrower under a Qualified Purchase Contract for the
replacement of a Unit in the Residential Component for which an Xxxxxxx Money
Deposit was already paid at the time of initial sale, deposited in the Xxxxxxx
Money Deposit Account, and determined by Administrative Agent to be
unconditionally forfeited by the former purchaser, then such Xxxxxxx Money
shall
be released to Borrower provided no Event of Default has occurred and is
continuing hereunder.
"Xxxxxxx
Money Deposit Account"
shall
mean an account with Administrative Agent pledged as Collateral in which
Borrower shall deposit the Xxxxxxx Money Deposits and from which such Xxxxxxx
Money Deposits may be withdrawn for use in connection with the construction
of
the Improvements or applied to the Facility Amount or otherwise disbursed by
Administrative Agent or returned to the buyer, subject to the terms of this
Agreement or the Qualified Purchase Contract.
"Eligible
Assignee"
shall
mean any Person that is: (a) an existing Lender; (b) a commercial bank, trust
company, savings and loan association, savings bank, insurance company,
investment bank or pension fund organized under the laws of the United States
of
America, any state thereof or the District of Columbia, and having total assets
in excess of $5,000,000,000; or (c) a commercial bank organized under the laws
of any other country which is a member of the Organization for Economic
Co-operation and Development, or a political subdivision of any such country,
and having total assets in excess of $10,000,000,000, provided that such bank
is
acting through a branch or agency located in the United States of America.
If
such entity is not currently a Lender, such entity's (or in the case of a bank
which is a subsidiary, such bank's parent's) senior unsecured long term
indebtedness must be rated BBB or higher by S&P, Baa2 or higher by Xxxxx'x
Investor Service or the equivalent or higher of either such rating by another
rating agency accepted to the Administrative Agent.
"Environmental
Claim"
shall
mean, with respect to any Person, any written request for information by a
Governmental Authority, or any written notice, notification, claim,
administrative, regulatory or judicial action, suit, judgment, demand or other
written communication by any Person or Governmental Authority alleging or
asserting liability with respect to Borrower or the Project, whether for
damages, contribution, indemnification, cost recovery, compensation, injunctive
relief, investigatory, response, Remediation, damages to natural resources,
personal injuries, fines or penalties arising out of, based on or resulting
from
(a) the presence, use or Release into the environment of any Hazardous Substance
originating at or from, or otherwise affecting, the Project, (b) any fact,
circumstance, condition or occurrence forming the basis of any violation, or
alleged violation, of any Environmental Law by Borrower or otherwise affecting
the health, safety or environmental condition of the Project or (c) any alleged
injury or threat of injury to health, safety or the environment by Borrower
or
otherwise affecting the Project.
"Environmental
Indemnity"
shall
mean that certain Environmental Indemnity Agreement by executed by Borrower
and
Guarantor substantially concurrently herewith, in favor of Administrative Agent,
as the same may be Modified from time to time.
"Environmental
Laws"
shall
mean any and all present and future federal, state and local laws, rules or
regulations, and any orders or decrees, in each case as now or hereafter in
effect, relating to the regulation or protection of health, safety or the
environment or the Release or threatened Release of Hazardous Substances into
the indoor or outdoor environment, including ambient air, soil, surface water,
ground water, wetlands, land or subsurface strata, or otherwise relating to
the
use of Hazardous Substances.
"Environmental
Losses"
shall
mean any losses, damages, costs, fees, expenses, claims, suits, judgments,
awards, liabilities (including but not limited to strict liabilities),
obligations, debts, diminutions in value, fines, penalties, charges, costs
of
Remediation (whether or not performed voluntarily), amounts paid in settlement,
foreseeable and unforeseeable consequential damages, litigation costs,
reasonable attorneys' fees and expenses, engineers' fees, environmental
consultants' fees, and investigation costs (including, but not limited to,
costs
for sampling, testing and analysis of soil, water, air, building materials,
and
other materials and substances whether solid, liquid or gas), of whatever kind
or nature, and whether or not incurred in connection with any judicial or
administrative proceedings, actions, claims, suits, judgments or awards relating
to Hazardous Substances, Environmental Claims, Environmental Liens and violation
of Environmental Laws.
"Environmental
Reports"
shall
mean, collectively, (a) the Environmental Site Assessment (Phase I) prepared
on
February 21, 2007, by Environmental Resources Management, and (b) any
environmental surveys and assessments Administrative Agent in its reasonable
discretion may require.
"Equity
Interests"
shall
mean shares of capital stock, partnership interests, membership interests in
a
limited liability company, beneficial interests in a trust or other equity
ownership interests in a Person, and any warrants, options or other rights
entitling the holder thereof to purchase or acquire any such equity
interest.
"Equity
Rights"
shall
mean, with respect to any Person, any subscriptions, options, warrants,
commitments, preemptive rights or agreements of any kind (including any
'shareholders' or voting trust agreements) for the issuance, sale, registration
or voting of, or securities convertible into, any additional shares of capital
stock of any class, or partnership, membership or other ownership interests
of
any type in, such Person.
"ERISA"
shall
mean the Employee Retirement Income Security Act of 1974, as amended from time
to time.
"ERISA
Affiliate"
shall
mean any trade or business (whether or not incorporated) that, together with
any
Borrower Party, is treated as a single employer under Section 414(b) or (c)
of
the Code, or, solely for purposes of Section 302 of ERISA and Section 412 of
the
Code, is treated as a single employer under Section 414 of the
Code.
"ERISA
Event"
shall
mean (a) any "reportable event", as defined in Section 4043 of ERISA or the
regulations issued thereunder with respect to a Plan (other than an event for
which the 30-day notice period is waived); (b) the existence with respect to
any
Plan of an "accumulated funding deficiency" (as defined in Section 412 of the
Code or Section 302 of ERISA), whether or not waived; (c) the filing pursuant
to
Section 412(d) of the Code or Section 303(d) of ERISA of an application for
a
waiver of the minimum funding standard with respect to any Plan; (d) the
incurrence by a Borrower Party or any of its ERISA Affiliates of any liability
under Title IV of ERISA with respect to the termination of any Plan; (e) the
receipt by any Borrower Party or any ERISA Affiliate from the PBGC or a plan
administrator of any notice relating to an intention to terminate any Plan
or
Plans or to appoint a trustee to administer any Plan; (f) the incurrence by
a
Borrower Party or any of its ERISA Affiliates of any liability with respect
to
the withdrawal or partial withdrawal from any Plan or Multiemployer Plan; or
(g)
the receipt by a Borrower Party or any ERISA Affiliate of any notice, or the
receipt by any Multiemployer Plan from a Borrower Party or any ERISA Affiliate
of any notice, concerning the imposition of Withdrawal Liability or a
determination that a Multiemployer Plan is, or is expected to be, insolvent
or
in reorganization, within the meaning of Title IV of ERISA.
"Excluded
Taxes"
shall
mean, with respect to Administrative Agent, any Lender, or any other recipient
of any payment to be made by or on account of any obligation of Borrower
hereunder, (a) income or franchise taxes imposed on (or measured by) its net
income by the United States of America, or by the jurisdiction under the laws
of
which such recipient is organized or in which its principal office is located
or, in the case of any Lender, in which its Applicable Lending Office is
located, or (b) any branch profits taxes imposed by the United States of America
or any similar tax imposed by any other jurisdiction in which Borrower is
located.
"Facility
Amount"
shall
mean One Hundred Twenty-Three Million and No/100 Dollars ($123,000,000.00)
as
such amount may be reduced pursuant to Sections 3.4
and
3.5
hereof.
"Federal
Funds Rate"
means,
for any day, the weighted average of the rates on overnight Federal funds
transactions with members of the Federal Reserve System arranged by Federal
funds brokers, as published on the next succeeding Business Day by the Federal
Reserve Bank of New York, or, if such rate is not so published for any day
that
is a Business Day, the average of the quotations for such day for such
transactions received by the Administrative Agent from three Federal funds
brokers of recognized standing selected by it.
"Framing
Deposit Account"
shall
mean an account with Administrative Agent pledged as Collateral in which
Borrower shall deposit the Framing Deposits and from which such Framing Deposits
may be withdrawn to be applied to the Facility Amount or otherwise disbursed
by
Administrative Agent or returned to the buyer, subject to the terms of this
Agreement and the Qualified Purchase Contract.
"Framing
Deposits"
shall
mean those cash deposits to be made by purchasers under a Qualified Purchase
Contract in the amount of at least ten percent (10%) of the sales price of
the
Residential Component Unit, to be deposited by Borrower into the Framing Deposit
Account and to be pledged as collateral until disbursed by Administrative Agent
upon the sale of the Unit and applied to the Facility Amount or otherwise
disbursed by Administrative Agent or returned to the buyer, subject to the
terms
of the Qualified Purchase Contract.
"Funding
Date"
shall
mean any Business Day on which proceeds of the Commitment are advanced to or
for
the benefit of Borrower in accordance with and subject to the terms and
conditions of this Agreement.
"GAAP"
shall
mean generally accepted accounting principles in the United States applied
on a
consistent basis, in accordance with Section 1.2.
"General
Assignment"
shall
mean that certain Assignment of Contracts, Licenses, Approvals and Rights
executed by Borrower for the benefit of Administrative Agent substantially
concurrently herewith, as the same may be Modified from time to
time.
"General
Contract"
shall
mean that certain Construction Contract dated as of May 1, 2006, as amended
by
Change Orders, between Borrower and the General Contractor, as the same may
be
Modified from time to time in accordance with the terms of this
Agreement.
"General
Contractor"
shall
mean Xxxxx Construction, Inc.
"General
Contractor Fee"
shall
mean the general contractor fees agreed to by Borrower and General Contractor
as
provided in the General Contract.
"Government
Approval"
shall
mean any action, authorization, consent, approval, license, lease, ruling,
permit, tariff, rate, certification, exemption, filing or registration by or
with any Governmental Authority, including all licenses, permits, allocations,
authorizations, approvals and certificates obtained by or in the name of, or
assigned to, Borrower and used in connection with the ownership, construction,
operation, use or occupancy of the Project, including building permits, zoning
and planning approvals, business licenses, licenses to conduct business,
certificates of occupancy and all such other permits, licenses and
rights.
"Governmental
Authority"
shall
mean any governmental department, commission, board, bureau, agency, regulatory
authority, instrumentality, judicial or administrative body, federal, state,
local, or foreign having jurisdiction over the matter or matters in
question.
"Guarantor
Documents"
shall
mean the Completion Guaranty and the Development Agreement
Guaranty.
"Guarantor"
shall
mean each of Vail Resorts, Inc., a Delaware corporation, and The Vail
Corporation, a Colorado corporation, and sometimes referred to collectively
herein as "Guarantor."
"Hard
Costs"
shall
mean the aggregate costs of all labor, materials, equipment and fixtures
necessary for completion of construction of the Improvements, as more
particularly set forth in the Project Budget.
"Hazardous
Substance"
shall
mean, collectively, (a) any petroleum or petroleum products, flammable
materials, explosives, radioactive materials, asbestos, urea formaldehyde foam
insulation, and transformers or other equipment that contain polychlorinated
biphenyls ("PCB"),
(b)
any chemicals or other materials or substances that are now or hereafter become
defined as or included in the definition of "hazardous substances," "hazardous
wastes," "hazardous materials," "extremely hazardous wastes," "restricted
hazardous wastes," "toxic substances," "toxic pollutants," "contaminants,"
"pollutants" or words of similar import under any Environmental Law and (c)
any
other chemical or other material or substance, exposure to which is now or
hereafter prohibited, limited or regulated under any Environmental
Law.
"Improvements"
shall
mean a mixed-use development consisting of approximately 215,548 square feet,
comprised of the Residential Component, Commercial Component, the Shared Parking
Garage Component, and all of the other improvements to be constructed on the
Land by and for the benefit of the Borrower, as more particularly described
in
the Plans and Specifications.
"Indebtedness"
shall
mean, for any Person: (a) obligations created, issued or incurred by such Person
for borrowed money (whether by loan, the issuance and sale of debt securities
or
the sale of Property to another Person subject to an understanding or agreement,
contingent or otherwise, to repurchase such Property from such Person), other
than trade accounts payable (other than for borrowed money) arising, and accrued
expenses incurred, in the ordinary course of business so long as such trade
accounts payable are payable within ninety (90) days of the date the respective
goods are delivered or the respective services are rendered; (b) obligations
of
such Person to pay the deferred purchase or acquisition price of Property or
services; (c) Indebtedness of others secured by a Lien on the Property of such
Person, whether or not the respective indebtedness so secured has been assumed
by such Person; (d) obligations of such Person in respect of letters of credit
or similar instruments issued or accepted by banks and other financial
institutions for account of such Person; and (e) Indebtedness of others
Guaranteed by such Person. Indebtedness shall not include obligations to return
Xxxxxxx Money Deposits, Club Membership Deposits, Purchaser Upgrade Deposits,
or
Framing Deposits to Purchasers of Units pursuant to a Qualified Purchase
Contract or Club Membership.
"Indemnified
Parties"
shall
mean Administrative Agent, the Affiliates of Administrative Agent, each Lender,
and each of the foregoing parties' respective directors, officers, employees,
attorneys, agents, successors and assigns.
"Indemnified
Taxes"
shall
mean Taxes other than Excluded Taxes.
"Initial
Equity Contribution"
shall
mean an equity contribution by Borrower in a minimum amount equal to Forty-Seven
Million Nine Hundred Forty-Three Thousand Seven Hundred Fifty and No/100 Dollars
($47,943,750.00) which shall be comprised of the Land at its Appraised Land
Value of Twenty-Four Million and No/100 Dollars ($24,000,000.00) and all Xxxxxxx
Money Deposits in an amount not less than Twenty-Three Million Nine Hundred
Forty-Three Thousand Seven Hundred Fifty and No/100 Dollars
($23,943,750.00).
"Insurance
Proceeds"
shall
mean all insurance proceeds, damages, claims and rights of action and the right
thereto under any insurance policies relating to the Project.
"Interest
Period"
shall
mean each period commencing on the date such LIBOR Rate Loan is made or
Converted from a Base Rate Loan or (in the event of a Continuation) the last
day
of the immediately preceding Interest Period for such Loan and ending on the
numerically corresponding day in the first, second, third or sixth calendar
month thereafter, as Borrower may select (subject to the terms and conditions
hereof).
"Knowledge"
shall
mean, with respect to a Person, (a) the actual knowledge of such Person (and
if
such Person is an entity, the actual knowledge of the individuals with
responsibility for the management, control, and day to day operations of such
entity), including, without limitation, with respect to Borrower and its
Affiliates, in connection with the acquisition, development and construction
of
the Improvements, and (b) the knowledge such Person would have after having
undertaken and completed such commercially reasonable diligence and
investigation that a similarly-situated commercial property owner or developer
would have undertaken with respect to the matter about which the applicable
representation is made.
"Land"
shall
have the meaning assigned to such term in the Recitals.
"Lender"
shall
have the meaning assigned to such term in the preamble.
"LIBOR"
shall
mean, as of the applicable date and time for determination provided herein,
a
per annum rate of interest (rounded upward, if necessary, to the nearest 1/100th
of 1%) equal to the rate which appears on the Telerate Page 3750 (or any
successor or substitute thereto selected by Administrative Agent in its sole
discretion) as of 11:00 a.m., London time, two (2) Banking Days prior to the
first day of the applicable Interest Period selected by Borrower, for United
States dollar deposits having a term coinciding with the Interest Period
selected by Borrower, adjusted for any reserve requirements and any subsequent
costs arising from a change in government regulation; provided that if such
rate
does not appear on such page as of the date of determination, or if such page
shall cease to be publicly available at such time, or if the information
contained on such page, in the sole judgment of Administrative Agent shall
cease
accurately to reflect the rate offered by leading banks in the London interbank
market, LIBOR shall be based on the rate that appears as of 11:00 a.m. London
time on such date of determination on the LIBOR Page of Reuters Screen for
Dollar deposits having a term comparable to such Interest Period and in an
amount comparable to the amount of the applicable LIBOR Rate Loan; and provided
further if both of such pages shall cease to be publicly available as of the
time of determination, or if the information contained on such page, in the
sole
judgment of Administrative Agent shall cease accurately to reflect the rate
offered by leading banks in the London interbank market, LIBOR shall be based
on
the rate reported by any publicly available source of similar market data
selected by Administrative Agent that, in its sole judgment, accurately reflects
such rate offered by leading banks in the London interbank market.
"LIBOR-Based
Rate"
shall
mean the sum of (a) LIBOR, plus
(b) the
Applicable Margin.
"LIBOR
Rate Loans"
shall
mean the portions of the Outstanding Principal Amount that bear interest at
LIBOR-Based Rate.
"Lien"
shall
mean, with respect to any Property (including the Project), any mortgage, deed
of trust, lien, pledge, charge, security interest or encumbrance of any kind
in
respect of such Property. For purposes of this Agreement and the other Loan
Documents, a Person shall be deemed to own subject to a Lien any Property that
it has acquired or holds subject to the interest of a vendor or lessor under
any
conditional sale agreement, capital lease or other title retention agreement
(other than an operating lease) relating to such Property.
"Lien
Law"
shall
mean the mechanics' lien laws of the State of Colorado, as amended from time
to
time.
"Limiting
Regulation"
shall
mean any law or regulation of any jurisdiction, or any interpretation, directive
or request under any such law or regulation (whether or not having the force
of
law and whether or not failure to comply therewith would be unlawful) by any
court or Governmental Authority charged with the interpretation or
administration thereof, or any internal bank policy resulting therefrom
(applicable to loans made in the United States of America) which would or could
in any way require a Lender to have the approval right contained in Section
10.3(d).
"Loan
Documents"
shall
mean, collectively, this Agreement, the Notes, the Security Documents, the
Guarantor Documents, the Representation Agreement, and each other agreement,
instrument or document required to be executed and delivered in connection
with,
or evidencing, securing, or supporting, the Loans, together with any
Modifications thereof.
"Loan
Par Value"
shall
mean the portion of the Facility Amount allocated to each Unit as set forth
on
Exhibit F.
"Loan
to Cost Ratio"
shall
mean the ratio, expressed as a percentage that (a) the Facility Amount bears
to
(b) the Project Budget.
"Loan
to Value Ratio"
shall
mean the ratio, expressed as a percentage, that (a) the Facility Amount bears
to
(b) the Appraised Value as determined on the basis of the most recent Appraisal
obtained by Administrative Agent, any such Appraisal to be conclusive absent
demonstrable error.
"Major
Subcontract"
shall
mean any subcontract, trade contract, material agreement or supply contract
relating to the construction of the Improvements or a component thereof in
the
amount of One Million and No/100 Dollars ($1,000,000.00) or more.
"Major
Subcontractor"
shall
mean any subcontractor or trade contractor or supplier, other than a Design
Professional, who is a party to a Major Subcontract.
"Managing
Member"
shall
mean Vail Resorts Development Company, a Colorado corporation, as managing
member under the Organizational Documents of Borrower, and its successors
thereunder as managing member of Borrower as permitted under the Loan
Documents.
"Material
Adverse Effect"
shall
mean (a) as to Borrower, the likely inability or reasonably anticipated
inability of Borrower to pay and perform its respective obligations under and
in
full compliance with the terms of the Loan Documents (including, without
limitation, Completion of the Base Building Work on or before the Completion
Date) as a result of (i) a material and adverse effect on the condition
(financial or otherwise), assets or business of Borrower (other than a change
solely as a result of a change in the financial markets), (ii) a material and
adverse effect on the value of the Project (other than a change solely as a
result of a change in the financial markets), or (iii) a material and adverse
effect on the status of the liens in favor of Administrative Agent on the
Collateral; (b) as to Guarantor Vail Resorts, Inc., the acceleration of that
certain Indenture dated as of January 29, 2004, by Vail Resorts, Inc. as Issuer
and The Bank of New York, as Trustee, as a result of any material default
thereunder after giving effect to all applicable notice, cure and grace periods
and all consents, waivers or modifications entered into or permitted therein,
and (c) as to Guarantor The Vail Corporation, the acceleration of The Vail
Corporation's Principal Bank Credit Facility as the result of any material
default thereunder after giving effect to all applicable notice, cure and grace
periods and all consents, waivers or modifications which have been entered
into
by the requisite lenders under the terms of the such facility. In the event
that
the Principal Bank Credit Facility or its successor is terminated without
replacement or that such agreement or its successor is Modified on terms and
conditions that are not substantially similar, "Principal
Bank Credit Facility"
as to
The Vail Corporation shall mean The Vail Corporation's principal bank revolving
credit agreement as in effect as of the date immediately before its termination
or substantial Modification and the covenants contained therein. In which case,
"Material Adverse Effect" shall mean a material default of any such
covenants.
"Material
Agreement"
shall
mean, individually and collectively, the General Contract, Architecture
Agreement, each Qualified Purchase Contract, any CCR Agreement, any Development
Agreement, and Borrower's Organizational Documents.
"Maturity
Date"
shall
mean the earliest to occur of (a) the Scheduled Maturity Date in the event
Borrower does not properly exercise the Extension Option pursuant to
Article IV
below;
(b) the Extended Maturity Date in the event Borrower has properly exercised
the
Extension Option pursuant to Article
IV;
(c) the
occurrence of any Transfer prohibited by the Loan Documents; and (d) the date
on
which the Outstanding Principal Balance is accelerated pursuant to the terms
of
this Agreement.
"Member(s)"
shall
mean, collectively, the Managing Member and such other Person or Persons as
may
be a member of Borrower from time to time in accordance with the terms of the
Loan Documents.
"Minimum
Loan Coverage Ratio"
shall
mean the ratio that (a) Net Sales Proceeds derived from sales pursuant to
Qualified Purchase Contracts bears to (b) the Facility Amount, which ratio
shall
not be less than 0.75:1.0; provided, however, upon the release of the Club
Component and the payment of the applicable Release Price for such release,
the
Minimum Loan Coverage Ratio shall not be less than 1.0:1.0.
"Ministerial
Matter"
shall
mean matters of an administrative or ministerial nature with respect to the
Borrower, the Improvements, or the Loan, including, without limitation, matters
involving: (a) construction budgets, schedules, plans and specifications, and
any changes made (or requested by Borrower to be made) with respect thereto,
(b)
construction contracts, architecture contracts, bonds, and other documents
related to the Project, and any changes made (or requested by Borrower to be
made) thereto, (c) forms of documents and Collateral required to be executed
and/or delivered by Borrower or any other Person in connection with the Loan,
including documents relating to Anticipated Encumbrances, (d) approval of
Anticipated Encumbrances and Subordination of the Security Documents thereto,
and (e) the satisfaction of conditions precedent to disbursements of the Loan
to
Borrower; provided,
however,
that
Ministerial Matters shall not be deemed to include any of the matters described
in Section 13.9(b)
below.
"Modifications"
shall
mean any amendments, supplements, modifications, renewals, replacements,
consolidations, severances, substitutions and extensions thereof from time
to
time; "Modify," "Modified," or related words shall have meanings correlative
thereto.
"Multiemployer
Plan"
shall
mean a multiemployer plan as defined in Section 4001(a)(3) of
ERISA.
"Net
Sales Proceeds"
shall
mean the actual sales price of Unit subject to a Qualified Purchase Contract,
less commissions and closing costs paid by Borrower to third parties; provided,
however, in no event shall such commissions and closing costs exceed seven
percent (7%) of the actual Unit sales price, and, with respect to the
calculation of the Minimum Loan Coverage Ratio, the projected aggregate amount
of the actual sales prices less commissions, closing costs, and the Xxxxxxx
Money Deposit, for Units subject to Qualified Purchase Contracts.
"Non-Discretionary
Approvals"
shall
mean all non-discretionary governmental approvals, authorizations, permits
and
entitlements where issuing of the same is based solely on a determination of
compliance or non-compliance with applicable laws and previously issued
Discretionary Approvals, including, without limitation, all grading, shoring,
excavating, and building permits.
"Notes"
shall
mean those certain Promissory Notes, each of even date herewith, executed and
delivered by Borrower to the order of the Lender named therein, in the aggregate
original principal amount of the Facility Amount, to evidence the Loans, as
the
same may be Modified from time to time, and including any Replacement
Notes.
"Obligations"
shall
mean all obligations, liabilities and indebtedness of every nature of Borrower,
from time to time owing to Administrative Agent or any Lender under or in
connection with this Agreement, the Notes or any other Loan Document to which
it
is a party, including principal, interest, fees (including fees of counsel),
and
expenses whether now or hereafter existing under the Loan
Documents.
"Official
Records"
shall
mean the official records of the office of the Clerk and Recorder of Eagle
County, State of Colorado.
"Organizational
Documents"
shall
mean (a) for any corporation, the certificate or articles of incorporation,
the
bylaws, any certificate of determination or instrument relating to the rights
of
preferred shareholders of such corporation, any shareholder rights agreement,
and any amendments thereto, (b) for any limited liability company, the articles
of organization and any certificate relating thereto and the limited liability
company (or operating) agreement of such limited liability company, and any
amendments thereto, and (c) for any partnership (general or limited), the
certificate of limited partnership or other certificate pertaining to such
partnership and the partnership agreement of such partnership (which must be
a
written agreement), and any amendments thereto.
"Other
Charges"
shall
mean all maintenance charges, impositions other than Real Estate Taxes, and
any
other charges, including license fees for the use of areas adjoining the
Project, now or hereafter levied or assessed or imposed against the Project
or
any part thereof.
"Other
Taxes"
shall
mean any and all present or future stamp or documentary taxes or any other
excise or property taxes, charges or similar levies arising from any payment
made under any Loan Document or from the execution, delivery or enforcement
of,
or otherwise with respect to, any Loan Document.
"Outstanding
Principal Amount"
shall
mean the aggregate outstanding principal amount of the Loans at any point in
time.
"Payment
Date"
shall
mean the first Business Day of each calendar month. The first Payment Date
shall
be the first Business Day of the first calendar month following the making
of
the first Loan pursuant to this Agreement.
"PBGC"
shall
mean the Pension Benefit Guaranty Corporation referred to and defined in ERISA
and any successor entity performing similar functions.
"Permitted
Liens"
shall
mean (a) any Lien created by the Loan Documents, (b) those matters listed as
exception on Schedule B to the Title Policy, (c) Liens for Real Estate Taxes
and
Other Charges imposed by any Governmental Authority not yet due or delinquent,
(d) the Anticipated Encumbrances approved by Administrative Agent, (e) the
Development Agreements, and (f) any Lien created by the recordation of documents
required for the establishment of a homeowners association, and such other
title
and survey exceptions as Administrative Agent may approve.
"Person"
shall
mean any individual, corporation, company, voluntary association, partnership,
limited liability company, joint venture, trust, unincorporated organization
or
government (or any agency, instrumentality or political subdivision
thereof).
"Plan"
shall
mean any employee pension benefit plan (other than a Multiemployer Plan) subject
to the provisions of Title IV of ERISA or Section 412 of the Code or Section
302
of ERISA, and in respect of which any of their ERISA Affiliates is (or, if
such
plan were terminated, would under Section 4069 of ERISA be deemed to be) an
"employer" as defined in Section 3(5) of ERISA.
"Plans
and Specifications"
shall
mean the plans and specifications for the construction of the Improvements
delivered by Borrower to Administrative Agent, prepared by Borrower's Design
Professionals and approved by Administrative Agent, the Construction Consultant
and, to the extent then required, by any applicable Governmental Authority
and
such other parties whose approval or consent may be required under any law,
regulation, prior agreement, this Agreement and all Modifications thereof made
by Change Orders permitted pursuant to the terms of this Agreement. A list
of
the presently existing Plans and Specifications is attached hereto as
Exhibit E.
"Prime
Rate"
shall
mean, at any time, the rate of interest most-recently announced within Xxxxx
Fargo Bank, National Association, at its principal office in San Francisco,
California, from time to time as its prime rate, notwithstanding the fact that
Administrative Agent and the Lenders may lend funds to their customers at rates
that are at, above or below said prime rate, it being understood that such
prime
commercial rate is a reference rate and does not necessarily represent the
lowest or best rate being charged by Xxxxx Fargo Bank, National Association,
to
any customer. Changes in the Prime Rate shall become effective on the same
day
as the date of any change in said prime rate.
"Principal
Bank Credit Facility"
means
that certain Fourth Amended and Restated Credit Agreement, dated as of January
28, 2005, as amended, among The Vail Corporation (d/b/a Vail Associates, Inc.),
Bank of America, N.A., as Administrative Agent and the other financial
institutions identified therein, as amended, modified, extended or replaced
from
time to time on substantially similar terms and conditions.
"Principal
Office"
shall
mean the office of Administrative Agent, located on the date hereof at x/x
Xxxx
Xxxxxx Xxxxx, XXX X0000-000, 0000 X. Xxxxxx Xxxxxx, Xxxxxx, Xxxxxxxx 00000,
or
such other office as Administrative Agent shall designate upon ten (10) days'
prior notice to Borrower and the Lenders.
"Project"
shall
mean, collectively, (a) the Land, together with any air rights and other rights,
privileges, easements, hereditaments and appurtenances thereunto relating or
appertaining to the Land owned by and for the benefit of Borrower, (b) the
Improvements, together with all fixtures and equipment owned by and for the
benefit of Borrower required for the operation of the Improvements, (c) all
building materials and personal property owned by and for the benefit of
Borrower related to the foregoing, and (d) all other items described as
"Property" in the Security Instrument.
"Project
Budget"
shall
mean the budget attached as Exhibit
B
hereto
as the same may be Modified from time to time in accordance with the provisions
of this Agreement.
"Project
Costs"
shall
mean, collectively, the Appraised Land Value, Hard Costs and Soft
Costs.
"Project
Documents"
shall
mean, collectively, (a) the General Contract, (b) the Architecture Agreement,
(c) the Plans and Specifications, (d) all Major Subcontracts, (e) the Government
Approvals, (f) the Construction Schedule, (g) Consents, (h) the Design
Professionals' Certificates, and (i) the Development Agreement, as the same
may
be Modified from time to time as permitted under the Loan
Documents.
"Property"
shall
mean any right or interest in or to property of any kind whatsoever, whether
real, personal or mixed and whether tangible or intangible.
"Proportionate
Share"
shall
mean, with respect to each Lender, the percentage set forth opposite such
Lender's name on Exhibit
C
attached
hereto under the caption "Proportionate Share," as such percentage may change
from time to time as permitted herein.
"Protective
Advance"
shall
mean all necessary costs and expenses (including attorneys' fees and
disbursements) incurred by Administrative Agent (a) in order to remedy an Event
of Default under the Loan Documents, which Event of Default, by its nature,
may
impair any portion of the Collateral for the Loans or the value of such
Collateral, interfere with the enforceability or enforcement of the Loan
Documents, or otherwise materially impair the payment of the Loan (including,
without limitation, the costs of unpaid insurance premiums, foreclosure costs,
costs of collection, costs incurred in bankruptcy proceedings and other costs
incurred in enforcing any of the Loan Documents); or (b) in respect of the
operation of the Project following a foreclosure under the Security
Instrument.
"Punch
List Items"
shall
mean minor construction items to be completed or constructed with respect to
the
Base Building Work or Construction Work which do not materially interfere either
with the use of the Improvements or the acceptance and occupancy of the space
to
a buyer.
"Purchaser
Upgrade(s)"
shall
mean a Modification(s) or upgrade(s) to the Plans and Specifications for a
Unit
requested by the purchaser of such Unit and required to be paid for by such
purchaser.
"Purchase
Upgrade Deposits"
shall
mean those cash deposits made by purchasers under a Qualified Purchase Contract
for Purchase Upgrades, to be deposited by Borrower into the Purchase Upgrade
Deposit Account and to be pledged collateral until applied to the Facility
Amount or otherwise disbursed by Administrative Agent or refunded to the buyer,
subject to the terms of the Qualified Purchase Contract.
"Purchaser
Upgrade Deposit Account"
shall
mean one or more deposit accounts established by Borrower with Administrative
Agent, and which is established and into which Purchaser Upgrade Deposits shall
be held for disbursement in accordance with Section 2.2(c).
"Qualified
Purchase Contract"
shall
mean with respect to Units in the Residential Component (a) each of the
contracts listed on Exhibit
D,
provided no defaults exist thereunder and the same is in full force and effect
for the purchase of a Unit or (b) such other or substitute contract for the
purchase of a Unit which is in full force and effect and meets the following
criteria: (i) is in substantially the form previously submitted to and accepted
by Administrative Agent; (ii) is with an unaffiliated third-party purchaser
purchasing no more than two (2) Units (except as described herein); (iii)
pursuant to which the purchaser of such Unit, in accordance with the provisions
of such contract, has placed into escrow or delivered to Borrower or Guarantor
an Xxxxxxx Money Deposit and requiring a Framing Deposit; (iv) contains no
major
contingencies (other than construction of the Improvements and customary
inspection, and title); and (v) the Administrative Agent has received a fully
executed copy of the contract. The Administrative Agent acknowledges that all
of
the contracts currently listed on Exhibit
D
constitute "Qualified Purchase Contracts."
"Real
Estate Taxes"
shall
mean all real estate taxes and all general and special assessments, levies,
permits, inspection and license fees, all water and sewer rents and charges,
all
charges for utilities and all other public charges whether of a like kind or
different nature, imposed upon or assessed against Borrower or the Project
or
any part thereof or upon the revenues, rents, issues, income and profits of
the
Project or arising in respect of the occupancy, use or possession
thereof.
"Regulations
A, D, T, U and X"
shall
mean, respectively, Regulations A, D, T, U and X of the Board of Governors
of
the Federal Reserve System (or any successor), as the same may be Modified
and
in effect from time to time.
"Regulatory
Change"
shall
mean, with respect to any Lender, any change after the Closing Date in federal,
state or foreign law or regulations (including Regulation D) or the adoption
or
making after such date of any interpretation, directive or request applying
to a
class of banks including such Lender of or under any federal, state or foreign
law or regulations (whether or not having the force of law and whether or not
failure to comply therewith would be unlawful) by any Governmental Authority
or
monetary authority charged with the interpretation or administration
thereof.
"Release"
shall
mean any release, spill, emission, leaking, pumping, injection, deposit,
disposal, discharge, dispersal, leaching or migration into the indoor or outdoor
environment, including the movement of Hazardous Substances through ambient
air,
soil, surface water, ground water, wetlands, land or subsurface
strata.
"Release
Price"
shall
mean the amount paid by Borrower to Administrative Agent to obtain a release
or
partial release of the Security Instrument. With respect to the Residential
Component, the Release Price for each Unit (together with the Unit Specific
Personal Property) shall be equal to the greater of: (a) Net Sales Proceeds
for
each Unit, and (b) Loan Par Value; provided, that the Release Price for each
Residential Component Unit shall be reduced by the Xxxxxxx Money Deposit applied
to the costs of construction and the Framing Deposit applied to the Facility
Amount for said Unit. With respect to the Club Component (together with the
Club
Component Personal Property and the Shared Parking Garage Component, all to
be
released contemporaneously), the Release Price shall be equal to the greater
of:
(a) sixty percent (60%) of Club Membership sales proceeds received by Borrower
from the sale of Club Memberships as of the time of the release of the Club
Component, and (b) Forty Million Dollars ($40,000,000.00); provided, that the
Release Price for the Club Component shall be reduced by Club Membership
Deposits applied to the Facility Amount.
"Remediation"
shall
mean, without limitation, any investigation, site monitoring, response,
remedial, removal, or corrective action, any activity to cleanup, detoxify,
decontaminate, contain or otherwise remediate any Hazardous Substance, any
actions to prevent, cure or mitigate any Release of any Hazardous Substance,
any
action to comply with any Environmental Laws or with any permits issued pursuant
thereto, any inspection, investigation, study, monitoring, assessment, audit,
sampling and testing, laboratory or other analysis, or evaluation relating
to
any Hazardous Substances.
"Replacement
Note(s)"
shall
mean any Note executed by Borrower to the order of a Lender upon the assignment
by such Lender of all or any portion of such Lender's interest in the Loan
and
the Loan Documents.
"Representation
Agreement"
shall
mean that certain Representation Agreement of even date herewith executed by
Guarantor in favor of Administrative Agent and Lenders.
"Request
for Continuation or Conversion"
shall
mean the notice to be given by Borrower to Administrative Agent in respect
of
each Loan, in the form of Exhibit
G
hereto.
"Request
for Loan Advance"
shall
mean the notice to be given by Borrower to Administrative Agent in respect
of
each Loan, in the form of Exhibit H
hereto.
"Required
Lenders"
shall
mean Lenders holding an aggregate Proportionate Share of at least 66.67% of
the
Facility Amount, or, if the Commitments have been terminated, then Lenders
holding an aggregate Proportionate Share of the Outstanding Principal Balance
of
at least 66.67%; provided, however, in connection with any waiver, modification,
or otherwise any change relating to Sections 9.21
and
9.22
herein,
"Required Lenders" shall mean Lenders holding an aggregate Proportionate Share
of at least 75% of the Facility Amount.
"Residential
Component"
shall
mean, collectively, the thirteen (13) residential chalet condominium Units,
including the associated twenty-six (26) underground parking spaces, comprising
a portion of the Improvements.
"Retail/Resort
Services Component"
shall
mean the approximately 27,765 square foot Unit comprising a portion of the
Improvements designated for use for retail, skier services, mountain operations
offices, and associated parking rights in the Shared Parking Garage Component,
if any.
"Scheduled
Maturity Date"
shall
mean September 1, 2009, as such date may be extended by the Extension
Period.
"Security
Documents"
shall
mean, collectively, the Security Instrument, the General Assignment, the
Assignment of Architecture Agreements, the Assignment of Construction
Agreements, any Controlled Account Agreement, the Assignment of Accounts, any
other agreements executed by any Borrower Party granting a Lien on any Property
or rights as security for the Loans, and all Uniform Commercial Code financing
statements required by this Agreement (provided in no event shall the Guarantor
Documents or the Environmental Indemnity be deemed Security
Documents).
"Security
Instrument"
shall
mean the Deed of Trust, Assignment of Leases and Rents, Security Agreement
and
Fixture Filing executed by Borrower for the benefit of Administrative Agent
concurrently herewith, as the same may be Modified from time to
time.
"Shared
Parking Garage Component"
shall
mean that portion of the Improvements to be constructed by Borrower consisting
of an underground parking garage of approximately 199 parking spaces, that
shall
primarily service the Club Component, the South Lodge Tower, The Lodge at Vail,
the Retail/Resort Component, employees of Guarantor and their subsidiaries,
as
well as other uses, as determined by Borrower and reasonably approved by
Administrative Agent.
"Solvent"
shall
mean, when used with respect to any Person, that at the time of determination:
(a) the fair saleable value of its assets is in excess of the total amount
of
its liabilities (including contingent liabilities); (b) the present fair
saleable value of its assets is greater than its probable liability on its
existing debts as such debts become absolute and matured; (c) it is then able
and expects to be able to pay its debts (including contingent debts and other
commitments) as they mature; and (d) it has capital sufficient to carry on
its
business as conducted and as proposed to be conducted.
"Soft
Costs"
shall
mean those Project Costs associated with the development, construction,
marketing, leasing, operation and maintenance of the Improvements which are
not
Hard Costs or Appraised Land Value, including, without limitation, the sales
and
leasing commissions, architectural and engineering fees, consultant fees,
professional fees, marketing fees and expenses, real estate taxes, insurance
and
bonding costs, financing fees, interest payable on the principal amount of
the
Loans and any other items identified as "Soft Costs" on the Project
Budget.
"Spa
Project"
shall
mean the spa facility to be constructed on the Land and on land adjacent to
the
Land, by Borrower for the benefit of Lodge Properties Inc., and upon completion,
to be made a part of The Lodge at Vail adjacent to the Improvements, pursuant
to
the terms of the Subdivision Agreement, together with any associated parking
rights in the Shared Parking Garage Component, if any.
"S&P"
shall
mean Standard & Poor's Ratings Services, a division of The XxXxxx-Xxxx
Companies, Inc., or any successor thereto.
"Subdivision
Agreement"
shall
mean that certain Subdivision, Conveyance and Construction Agreement dated
_____________, 2007, by and between Borrower and Lodge Properties,
Inc.
"Subsidiary"
shall
mean, with respect to any Person, any corporation, limited liability company,
partnership or other entity of which at least a majority of the securities
or
other ownership interests having by the terms thereof ordinary voting power
to
elect a majority of the board of directors or other persons performing similar
functions of such corporation, limited liability company, partnership or other
entity (irrespective of whether or not at the time securities or other ownership
interests of any other class or classes of such corporation, limited liability
company, partnership or other entity shall have or might have voting power
by
reason of the happening of any contingency) is at the time directly or
indirectly owned or controlled by such Person or one or more Subsidiaries of
such Person or by such Person and one or more Subsidiaries of such
Person.
"Survey"
shall
mean an ALTA survey of the Project reasonably satisfactory to Administrative
Agent in form and content and made by a registered land surveyor reasonably
satisfactory to Administrative Agent.
"Taxes"
shall
mean any and all present or future taxes, levies, imposts, duties, deductions,
charges or withholdings imposed by any Governmental Authority.
"Title
Company"
shall
mean Land Title Guaranty Co. and any one or more co-insurers or reinsurers
acceptable to Administrative Agent.
"Title
Policy"
shall
mean an ALTA policy or policies of title insurance satisfactory to
Administrative Agent, together with evidence of the payment of all premiums
due
thereon, issued by the Title Company (a) insuring Administrative Agent for
the
benefit of the Lenders in an amount equal to the Facility Amount that Borrower
is lawfully seized and possessed of a valid and subsisting fee simple interest
in the Project and that the Security Instrument constitutes a valid fee simple
deed of trust lien on the Project, subject to no Liens other than Permitted
Liens and (b) providing (i) affirmative insurance or endorsements for coverage
against all mechanics' and materialmen's liens, and (ii) such other affirmative
insurance and endorsements as Administrative Agent may require (including,
without limitation, 100 or its equivalent (comprehensive endorsement, modified
for a lender), 116.1 (same land as shown on survey), 116.4 (contiguity
endorsement), 103.4 or equivalent (street access endorsement), 100.30 (mineral
protection) and ALTA 8.1 (environmental).
"Trading
with the Enemy Act"
shall
mean 50 U.S.C. App. 1 et seq.
"Transactions"
shall
mean, collectively, (a) the execution, delivery and performance by Borrower
of
this Agreement and the other Loan Documents, the borrowing of the Loans, the
use
of the proceeds thereof and (b) the execution, delivery and performance by
the
other Borrower Parties of the other Loan Documents to which they are a party
and
the performance of their obligations thereunder.
"Transfer"
shall
mean any transfer, sale, lease, assignment, mortgage, encumbrance (other than
an
Anticipated Encumbrance or as contemplated by the Subdivision Agreement), pledge
or conveyance (other than an Anticipated Encumbrance) of all or a portion of
any
of (a) the Project, (b) the direct or indirect Equity Interests in Borrower
(other than Transfers of interest in Vail Resorts, Inc.), or (c) the direct
or
indirect right or power to direct the operations, decisions and affairs of
Borrower, whether through the ability to exercise voting power, by contract
or
otherwise (other than rights in connection with the ownership of interest in
Vail Resorts, Inc.).
"Types
of Loans"
refers
to whether such Loan is a Base Rate Loan or a LIBOR Rate Loan, each of which
constitutes a "Type". Loans hereunder are distinguished by "Type."
"Unavoidable
Delay"
shall
mean any delay due to strikes, acts of God, fire, earthquake, floods, explosion,
actions of the elements, other accidents or casualty, declared or undeclared
war, terrorist acts, riots, mob violence, inability to procure or a general
shortage of labor, equipment, facilities, energy, materials or supplies in
the
open market, failure of transportation, lockouts, actions of labor unions,
condemnation, court orders, laws, rules, regulations or orders of Governmental
Authorities, or other cause beyond the reasonable control of Borrower;
provided,
however,
"Unavoidable Delays" shall not include delays caused by Borrower's lack of
or
inability to procure monies to fulfill Borrower's commitments and obligations
under this Agreement or the other Loan Documents.
"Uniform
Commercial Code"
shall
mean the Uniform Commercial Code of the State of Colorado and the state of
formation/organization of Borrower, as applicable.
"Unit"
shall
mean each and any of the (i) 13 residential condominium units comprising the
Residential Component, including Purchaser Upgrades and Unit Specific Personal
Property, (ii) the Club Component, (iii) the Retail/Resort Services Component;
and (iv) the Shared Parking Garage Component.
"Unit
Specific Personal Property"
shall
mean furnishings and other personal property sold or conveyed in connection
with
the sale of a Unit pursuant to a Qualified Purchase Contract.
"Unsatisfactory
Work"
shall
mean any Construction Work which Administrative Agent and/or the Construction
Consultant has reasonably determined has not been completed in a good and
workmanlike manner, and, to the extent any Construction Work is not specifically
addressed in the construction drawings and specifications, in a manner
consistent with sound design principles and/or sound construction practices,
or
in substantial conformity with the Plans and Specifications, or in accordance
with all Applicable Law.
"Withdrawal
Liability"
shall
mean liability to a Multiemployer Plan as a result of a complete or partial
withdrawal from such Multiemployer Plan, as such terms are defined in Part
I of
Subtitle E of Title IV of ERISA.
1.2 Accounting
Terms and Determinations
.
Except
as otherwise expressly provided herein, all terms of an accounting or financial
nature shall be construed in accordance with GAAP, as in effect from time to
time.
1.3 Terms
Generally
.
The
definitions of terms herein shall apply equally to the singular and plural
forms
of the terms defined. Whenever the context may require, any pronoun shall
include the corresponding masculine, feminine and neuter forms. The words
"include," "includes" and "including" shall be deemed to be followed by the
phrase "without limitation." The word "will" shall be construed to have the
same
meaning and effect as the word "shall." Unless the context requires otherwise
(a) any definition of or reference to any agreement, instrument or other
document herein shall be construed as referring to such agreement, instrument
or
other document as from time to time Modified (subject to any restrictions on
such Modifications set forth herein), (b) any reference herein to any Person
shall be construed to include such Person's successors and assigns, (c) the
words "herein," "hereof" and "hereunder," and words of similar import, shall
be
construed to refer to this Agreement in its entirety and not to any particular
provision hereof, (d) all references herein to Articles, Sections, Exhibits
and
Exhibits shall be construed to refer to Articles and Sections of, and Exhibits
and Exhibits to, this Agreement, (e) the words "asset" and "property" shall
be
construed to have the same meaning and effect and to refer to any and all
tangible and intangible assets and properties, including cash, securities,
accounts and contract rights, (f) whenever this Agreement provides that any
consent or approval will not be "unreasonably withheld" or words of like import,
the same shall be deemed to include within its meaning that such consent or
approval will not be unreasonably delayed, and (g) all references to a time
of
day shall mean Mountain Time, unless otherwise provided.
1.4 Additional
Defined Terms
.
The
following terms are defined in the following Sections:
"Additional
Costs" Section
5.1
"Advance
Date" Section
2.2(h)
"Advanced
Amount" Section
13.11(b)
"Base
Building Substantial Completion Conditions" Section
6.3
"Bond
Financing" Section
10.14
"Breakage
Costs" Section
5.5
"Condemnation
Threshold Amount" Section
11.2(a)
"Contingency
Fund" Section
7.4(a)
"Controlled
Account Agreement" Section
14.24(a)(i)
"Controlled
Account Collateral" Section
14.24(c)
"Default
Cure Period" Section
13.11(f)
"Defaulting
Lender" Section
13.11(a)
"Deficiency
Deposit" Section
7.2(b)
"Environmental
Liens" Section
9.11(a)
"Event
of
Default" Article
XII
"Extended
Maturity Date" Section
4.1
"Extension
Fee" Section
4.1(f)
"Extension
Notice" Section
4.1(a)
"Extension
Option" Section
4.1
"Extension
Period" Section
4.1
"In
Balance" Section
7.2(a)
"Information"
Section
14.22
"Insurance
Premiums" Section
9.5(d)
"Insurance
Threshold Amount" Section
11.2(a)
"Interest
Reserve" Section
7.5(a)
"Late
Charge" Section
3.3
"Lay-Down
Yard" Section
9.20
"Loan"
and "Loans" Section
2.1(a)
"Loan
Transactions" Section
2.2(k)
"Losses"
Section
14.4
"Maximum
Rate" Section
14.23
"Non-Defaulting
Lender" Section
13.11(a)
"Off-Site
Stored Furnishings" Section
9.20
"Off-Site
Stored Materials" Section
9.20
"On-Site
Stored Materials" Section
9.20
"Payee"
Section
2.2(h)
"Policy"
and "Policies" Section
9.5(b)
"Payor"
Section
2.2(h)
"Project
Budget Line-Item" Section
7.3(a)
"Rejected
Lender" Section
10.3(d)
"Replacement
Lender" Section
13.11(g)
"Required
Payment" Section
2.2(h)
"Restoration"
Section
11.1(a)
"Retainage"
Section
7.6(a)
"Significant
Casualty" Section
11.2(b)
"Significant
Condemnation Event" Section
11.2(b)
"Special
Advance Lender" Section
13.11(a)
"Syndication"
Section
14.7(c)
"Unpaid
Amount" Section
13.11(b)
ARTICLE
II
THE
LOAN FACILITY
2.1 Loans.
(a) Each
Lender severally agrees, on the terms and conditions of this Agreement, to
make
loans (each advance of such a loan being a "Loan"
and
collectively, the "Loans")
on a
non-revolving basis to Borrower in Dollars from time to time in amounts equal
to
its Proportionate Share of the aggregate amount of Loans to be made at such
time; provided,
however,
that
(i) in no event shall the aggregate principal amount advanced by each Lender
exceed the applicable Lender's Commitment, subject to the provisions of Section
13.11;
(ii) no
more than five (5) LIBOR Rate Loans may be in effect at any one time provided
that all LIBOR Rate Loans with the same Interest Period (commencing and ending
on the same day) shall be considered one LIBOR Rate Loan for the purposes of
this Section 2.1(a);
and
(iii) the Loans shall be advanced for the payment of Project Costs in accordance
with the Project Budget.
(b) Subject
to the terms of this Agreement, Borrower may borrow the Loans by Type, which
shall mean as Base Rate Loans and/or LIBOR Rate Loans, and such Loans may be
Converted or Continued pursuant to Section 2.7.
2.2 Borrowings;
Certain Notices.
(a) Notices
by the Borrower to Administrative Agent regarding (i) requests for Loans; (ii)
the Continuations or Conversions of Loans, (iii) optional prepayments of the
Loans, and (iv) requests for disbursements from the Purchaser Upgrade Deposit
Account, shall be irrevocable and shall be effective only if received by
Administrative Agent not later than 1:00 p.m. Mountain time, on the number
of
Business Days prior to the date of the requested actions as specified
below:
|
Notice
|
Number
of Business Days Prior
|
|
Request
For Loan Advance
|
7
|
|
Designation
of Applicable Interest Period
|
2
prior to last day of
applicable
LIBOR Period
(or,
for initial advance,
3
days prior to initial advance)
|
|
Requests
for disbursements from the Purchaser Upgrade Deposit Account or Optional
Prepayment
|
3
|
Each
Request for Loan Advance or Request for Continuation or Conversion shall (1)
be
duly completed and signed by an Authorized Officer of Borrower, (2) be
accompanied by all of the applicable documents and materials, required pursuant
to Article
VI
and
Article
VII,
(3)
specify the amount (subject to Section 2.2(k)),
of
such proposed Loan Transaction, and the date (which shall be a Business Day)
of
such proposed Loan Transaction, as applicable, and (4) in the case of a Request
for Loan Advance, be accompanied by all documentation required by this Agreement
as a condition precedent to the applicable Loans. Two (2) business days prior
to
the date of the proposed Loan Transaction, Borrower shall specify the Interest
Period and shall specify the Loans to which such requested Interest Period
is to
relate. If Borrower fails to select the duration of any Interest Period for
any
LIBOR Rate Loan within the time period (i.e., three (3) Business Days prior
to
the first day of the next applicable Interest Period) and otherwise as provided
in this Section 2.2(a),
such
Loan (if outstanding as a LIBOR Rate Loan) will be automatically Continued
as a
LIBOR Rate Loan with an Interest Period of one (1) month on the last day of
the
current Interest Period for such Loan (based on LIBOR determined two (2)
Business Days prior to the first day of the next Interest Period). Requests
for
disbursements from the Purchaser Upgrade Deposit Account shall be delivered
in
writing as set forth above and shall contain such information and documentation
as Administrative Agent deems reasonably necessary, which shall in no event
be
greater than the information and document requirement for a Loan
Advance.
(b) Funds
for Borrowing.
Not
less than six (6) Business Days prior to any Funding Date, Administrative Agent
shall notify the Lenders in writing of its receipt of a Request for Loan Advance
(and shall, within a reasonable time after being requested by a Lender, deliver
or cause to be delivered to such Lender a copy of the Request for Loan Advance
and supporting documentation). Not less than two (2) Business Days prior to
any
Funding Date, Administrative Agent shall notify Lender in writing of (i) its
determination that all conditions to the advance of Loan proceeds requested
pursuant thereto have been satisfied by Borrower or, subject to Article XIII
below,
waived by Administrative Agent; and (ii) the Funding Date on which each Lender's
Loan in respect thereof is required to be made. Not later than 10:00 a.m.
Mountain time on the Funding Date specified by Administrative Agent, each Lender
shall make available to Administrative Agent at the Administrative Agent's
Account, in immediately available funds, such Lender's Proportionate Share
of
the portion of the Loan to be made pursuant to such Request for Loan
Advance.
(c) Disbursement
to Borrower.
Prior
to 2:00 p.m. Mountain time on the applicable Funding Date, Administrative Agent
shall, subject to the determination by Administrative Agent that all conditions
to the advance of Loan proceeds or for a disbursement from the Purchaser Upgrade
Deposit Account requested pursuant to the applicable Request for Loan Advance
or
Request for Purchaser Upgrade Deposit Account disbursement have been satisfied
by Borrower or, waived by Administrative Agent, disburse the amounts made
available to Administrative Agent by the Lenders pursuant to Section
2.2(b)
above
(and such funds made available to Administrative Agent pursuant to Section
13.11
below)
in like funds, or funds from the Purchaser Upgrade Deposit Account, as
applicable, at Borrower's direction as set forth in the Request for Loan Advance
or Request for Purchaser Upgrade Deposit Account disbursement, or, during the
continuance of an Event of Default, at the election of Administrative Agent,
(i)
to the Borrower for disbursement in accordance with the Request for Loan Advance
and application in accordance with the requirements of the Loan Documents,
(ii)
directly to General Contractor or other party any costs payable to such party,
or (iii) at the Borrower's expense, to the Title Company, with instructions
to
such Person to pay said monies to the parties as so instructed by Administrative
Agent. The execution of this Agreement by Borrower shall, and hereby does,
constitute an irrevocable authorization to Administrative Agent to make direct
advances provided for in this Section 2.2(c)
and no
further authorization from the Borrower shall be necessary to warrant such
direct advances, and all such direct advances shall be secured by the Security
Instrument as fully as if made directly to Borrower, regardless of the
disposition thereof by any party so paid. At Administrative Agent's request,
any
advance of Loan proceeds made by and through the Title Company may be made
pursuant to the provisions of a construction escrow agreement in the form then
in use by such company with such Modifications thereto as are reasonably
required by Administrative Agent. Borrower agrees to join as a party to such
escrow agreement and to comply with the requirements set forth therein (which
shall be in addition to and not in substitution for the requirements contained
in this Agreement) and to pay the fees and expenses of the Title Company charged
in connection with the performance of its duties under such construction escrow
agreement.
(d) Funds
Transfer Disbursements.
Notwithstanding anything to the contrary contained herein, Borrower hereby
authorizes Administrative Agent to disburse the proceeds of any Loan(s) made
by
Lenders hereunder as requested by an authorized representative of the Borrower
to any of the accounts designated in that certain Transfer Authorizer
Designation attached hereto as Exhibit
J.
Borrower agrees to be bound by any transfer request: (i) authorized or
transmitted by Borrower; or, (ii) made in Borrower's name and accepted by
Administrative Agent in good faith and in compliance with these transfer
instructions, even if not properly authorized by Borrower. Borrower further
agrees and acknowledges that Administrative Agent may rely solely on any bank
routing number or identifying bank account number or name provided by Borrower
to effect a wire or funds transfer even if the information provided by Borrower
identifies a different bank or account holder than named by the Borrower.
Administrative Agent is not obligated or required in any way to take any actions
to detect errors in information provided by Borrower. If Administrative Agent
takes any actions in an attempt to detect errors in the transmission or content
of transfer or requests or takes any actions in an attempt to detect
unauthorized funds transfer requests, Borrower agrees that no matter how many
times Administrative Agent takes these actions, Administrative Agent will not
in
any situation be liable for failing to take or correctly perform these actions
in the future and such actions shall not become any part of the transfer
disbursement procedures authorized under this provision, the Loan Documents,
or
any agreement between Administrative Agent and Borrower. Borrower agrees to
notify Administrative Agent of any errors in the transfer of any funds or of
any
unauthorized or improperly authorized transfer requests within 14 days after
Administrative Agent's confirmation to Borrower of such transfer. Administrative
Agent will, in its sole discretion, determine the funds transfer system and
the
means by which each transfer will be made. Administrative Agent may delay or
refuse to accept a funds transfer request if the transfer would: (i) violate
the
terms of this authorization (ii) require use of a bank unacceptable to
Administrative Agent or prohibited by government authority; (iii) cause
Administrative Agent to violate any Federal Reserve or other regulatory risk
control program or guideline, or (iv) otherwise cause Administrative Agent
to
violate any applicable law or regulation. Administrative Agent shall not be
liable to Borrower or any other parties for (i) errors, acts or failures to
act
of others, including other entities, banks, communications carriers or
clearinghouses, through which Borrower's transfers may be made or information
received or transmitted, and no such entity shall be deemed an agent of the
Administrative Agent, (ii) any loss, liability or delay caused by fires,
earthquakes, wars, civil disturbances, power surges or failures, acts of
government, labor disputes, failures in communications networks, legal
constraints or other events beyond Administrative Agent's control, or (iii)
any
special, consequential, indirect or punitive damages, whether or not (a) any
claim for these damages is based on tort or contract or (b) Administrative
Agent
or Borrower knew or should have known the likelihood of these damages in any
situation. Administrative Agent makes no representations or warranties other
than those expressly made in this Agreement.
(e) Payments
by Borrower.
Except
to the extent otherwise provided herein, all payments of principal, interest
and
other amounts to be made by the Borrower under this Agreement, the Notes, and
any other Loan Document, shall be made in U.S. Dollars, in immediately available
funds, without deduction, set-off or counterclaim, to Administrative Agent
(for
the benefit of the Lenders) at Administrative Agent's Account, not later than
12:00 noon Mountain time, on the date on which such payment shall be due (each
such payment made after such time on such due date to be deemed to have been
made on the next succeeding Business Day).
(f) Application
of Payments.
Provided no Event of Default then exists, Borrower shall, at the time of making
each payment under this Agreement, any Note or any other Loan Document for
the
account of any Lender, be entitled to specify to Administrative Agent (which
shall so notify the intended recipient(s) thereof) the Loans or other amounts
to
which such payment is to be applied (and if Borrower fails to so specify, or
if
an Event of Default exists, Administrative Agent may distribute such payment
to
the Lenders for application in such manner as it, subject to
Section 2.2(i),
may
determine to be appropriate).
(g) Payments
to Lenders.
Provided Administrative Agent has received such payment by 12:00 noon Mountain
time, each payment received by Administrative Agent under this Agreement, the
Notes or any other Loan Document for account of the Lenders shall, to the extent
reasonably possible, be paid by Administrative Agent to such Lender by 3:00
p.m.
Mountain time on the Business Day on which Administrative Agent received such
payment, in immediately available funds, at the account designated in writing
by
such Lender from time to time. If Administrative Agent has not received such
payment by 12:00 noon Mountain time, such payment shall, to the extent
reasonably possible, be paid by Administrative Agent to such Lender by 10:00
a.m. Mountain time on the next Business Day following the Business Day on which
Administrative Agent received such payment, in immediately available funds,
at
the account designated in writing by such Lender from time to time. In the
event
Administrative Agent fails to make payments to Lenders as set forth in this
Section 2.2(g),
the
amount of such payments shall accrue interest at the Federal Funds Rate until
paid.
(h) Non-Receipt
of Funds by Administrative Agent.
Without
limiting the provisions of Section 13.11
below as
to the Lenders, and Section 12.1
below as
to Borrower, unless Administrative Agent shall have been notified by a Lender
or
Borrower, as the case may be (for the purposes of this Section 2.2(h),
each a
"Payor")
prior
to the date on which such Payor is required to make payment to Administrative
Agent of (in the case of a Lender pursuant to Section 2.2(b)
above)
the proceeds of a Loan to be made by such Payor hereunder, or (in the case
of
the Borrower pursuant to Section 2.2(d)
above) a
payment to Administrative Agent for the account of one or more of the Lenders
hereunder (such payment being herein called a "Required
Payment"),
which
notice shall be effective upon receipt, that such Payor does not intend to
make
such Required Payment to Administrative Agent, Administrative Agent may assume
that such Required Payment has been made and may, in reliance upon such
assumption (but shall not be required to), make the amount thereof available
to
the intended recipient(s) of such Required Payment (a "Payee")
on
such date. If such Payor has not in fact made the Required Payment to
Administrative Agent, the Payee of such payment from Administrative Agent shall,
within one (1) Business Day after Administrative Agent's demand therefor, repay
to Administrative Agent the amount so paid together with interest thereon in
respect of each day during the period commencing on the date (the "Advance
Date")
such
amount was so paid by Administrative Agent until the date Administrative Agent
recovers such amount at a rate per annum equal to (i) the Federal Funds Rate
for
such day in the case of payments required to be returned to Administrative
Agent
by any of the Lenders, or (ii) the Applicable Interest Rate due hereunder with
respect to payments returned by the Borrower to Administrative Agent, and,
if
such Payee(s) shall fail to promptly make such payment, Administrative Agent
shall be entitled to recover such amount, on demand, from the applicable Payor,
together with interest at the aforesaid rates; provided,
however,
that if
neither the Payee(s) nor applicable Payor shall return the Required Payment
to
Administrative Agent within three (3) Business Days of the Advance Date, then,
retroactively to the Advance Date, such Payor and the Payee(s) shall each be
obligated to pay interest on the Required Payment as follows:
(i) if
the
Required Payment shall represent a payment to be made by Borrower to the
Lenders, Borrower and the Payee(s) shall each be obligated to pay interest
retroactively to the Advance Date in respect of the Required Payment at the
Default Rate (without duplication of the obligation of Borrower under Section
3.1
to pay
interest on the Required Payment at the Default Rate), it being understood
that
the return by the recipient(s) of the Required Payment to Administrative Agent
shall not limit such obligation of Borrower under Section 3.1
to pay
interest at the Default Rate in respect of the Required Payment,
and
(ii) if
the
Required Payment shall represent proceeds of a Loan to be made by the Lenders
to
Borrower, such Payor and Borrower shall each be obligated to pay interest
retroactively to the Advance Date in respect of the Required Payment pursuant
to
whichever of the rates specified in Section 3.1
is
applicable to the Type of such Loan (without duplication of Borrower's
obligation to pay interest pursuant to Section 3.1
on the
Required Payment), it being understood that the return by Borrower of the
Required Payment to Administrative Agent shall not limit any claim that Borrower
may have against such Payor in respect of such Required Payment and shall not
relieve such Payor of any obligation it may have hereunder or under any other
Loan Documents to Borrower and no advance by Administrative Agent to Borrower
under this Section 2.2
shall
release any Lender of its obligation to fund such Loan except as set forth
in
the following sentence. If any such Lender shall thereafter advance any such
Required Payment to Administrative Agent, such Required Payment shall be deemed
such Lender's applicable Loan to Borrower.
(i) Pro
Rata Treatment.
Except
to the extent otherwise provided herein: (i) each borrowing from the Lenders
shall be made by the Lenders pro rata in accordance with the amounts of their
respective Commitments; (ii) except as otherwise provided in Section
5.4,
LIBOR
Rate Loans having the same Interest Period shall be allocated pro rata among
the
Lenders according to the amounts of their respective Commitments (in the case
of
the making of Loans) or their respective Loans (in the case of Conversions
and
Continuations of Loans); (iv) each payment or prepayment of principal of Loans
by Borrower shall be made for account of the Lenders pro rata in accordance
with
the respective unpaid principal amounts of the Loans held by them; and (iv)
each
payment of interest on Loans by Borrower shall be made for the account of the
Lenders pro rata in accordance with the amounts of interest on such Loans then
due and payable to the respective Lenders.
(j) Computations.
Interest on all LIBOR Rate Loans and Base Rate Loans shall be computed on the
basis of a year of three hundred sixty (360) days and actual days elapsed
(including the first day but excluding the last day) occurring in the period
for
which payable.
(k) Minimum
Amounts.
Except
for (i) mandatory prepayments made pursuant to Section 3.5,
(ii)
Conversions or prepayments made pursuant to Section 5.4,
(iii)
prepayments made pursuant to Section 10.3(d),
and
(iv) advances pursuant to Sections 2.2(c),
7.4,
7.5
and
7.10,
each
borrowing, Conversion, Continuation and optional partial prepayment of principal
(collectively, "Loan
Transactions")
of
Loans shall be in an aggregate amount at least equal to One Hundred Thousand
and
No/100 Dollars ($100,000.00). Loan Transactions of or into Loans of different
Types or Interest Periods at the same time hereunder shall be deemed separate
Loan Transactions for purposes of the foregoing, one for each Type or Interest
Period; provided that (1) if any Loans or borrowings would otherwise be in
a
lesser principal amount for any period, such Loans shall be Base Rate Loans
during such period, (2) Loans for the payment of interest due under the Notes
may be in a lesser principal amount, and (3) if any Loans are LIBOR Rate Loans,
additional increments shall be in a minimum amount at least equal to One Hundred
Thousand and No/100 Dollars ($100,000.00). Notwithstanding the foregoing, the
minimum amount of One Hundred Thousand and No/100 Dollars ($100,000.00) shall
not apply to Conversions of lesser amounts into a Type or Interest Period that
has (or will have upon such Conversion) an aggregate principal amount exceeding
such minimum amount and one Interest Period.
(l) Extension
to Next Business Day.
If the
due date of any payment under this Agreement or any Note would otherwise fall
on
a day that is not a Business Day, such date shall be extended to the next
succeeding Business Day, and interest shall be payable for any principal so
extended for the period of such extension; provided, however, that if such
event
relates to the Maturity Date, payments due on the Maturity Date shall be payable
on the immediately preceding Business Day.
2.3 Changes
to Commitments.
(a) The
respective Commitments shall reduce pro rata automatically by reason of any
prepayment of the Loans applicable thereto in the amount of any such
prepayment.
(b) If
the
Scheduled Maturity Date is extended in accordance with Section 4.1,
Borrower may elect to reduce the amount of the unused Commitments which shall
be
available during the Extension Period by notifying Administrative Agent of
such
reduced Commitment amounts in its Extension Notice.
(c) The
Commitments, once terminated or reduced, may not be reinstated. Each termination
or reduction of the Commitments shall be made ratably among the Lenders in
accordance with their respective Commitments.
2.4 Lending
Offices
.
The
Loans of each Type made by each Lender shall be made and maintained at such
Lender's Applicable Lending Office for Loans of such Type.
2.5 Several
Obligations; Remedies Independent
.
The
failure of any Lender to make any Loan to be made by it on the date specified
therefor shall not relieve any other Lender of its obligation to make its Loan
on such date, but no Lender nor Administrative Agent shall be responsible for
the failure of any other Lender to make a Loan required to be made by such
other
Lender. The amounts payable by Borrower at any time hereunder and under the
Note
to each Lender shall be a separate and independent debt.
2.6 Notes
.
The
Loans made by each Lender shall be evidenced by its Note. No Lender shall be
entitled to have its Note substituted or exchanged for any reason, or subdivided
for promissory notes of lesser denominations. In the event of the loss, theft
or
destruction of any Note, upon Borrower's receipt of a reasonably satisfactory
indemnification agreement executed in favor of Borrower by the holder of such
Note, or in the event of the mutilation of any Note, upon the surrender of
such
mutilated Note by the holder thereof to Borrower, Borrower shall execute and
deliver to such holder a replacement Note in lieu of the lost, stolen, destroyed
or mutilated Note. The Notes shall not be necessary to establish the
indebtedness of the Borrower to the Lenders on account of advances made under
this Agreement.
2.7 Conversion
and Continuations of Loans.
(a) Subject
to Section 2.2(j),
Borrower shall have the right to Convert Loans of one Type into Loans of another
Type or Continue Loans of one Type as Loans of the same Type at any time or
from
time to time until one (1) month preceding the Maturity Date; provided that:
(i)
Borrower shall give Administrative Agent notice of each such Conversion or
Continuation as provided in Section 2.2(a)
above,
(ii) LIBOR Rate Loans may be prepaid or Converted only on the last day of an
Interest Period for such Loans unless Borrower complies with the terms of
Section 5.5,
(iii)
subject to Sections 5.1
and
5.3,
any
Conversion or Continuation of Loans shall be pro rata among the Lenders, (iv)
each Interest Period that commences on the last Business Day of a calendar
month
(or on any day for which there is no numerically corresponding day in the
appropriate subsequent calendar month) shall end on the last Business Day of
the
appropriate subsequent calendar month; (v) each Interest Period that would
otherwise end on a day that is not a Business Day shall end on the next
succeeding Business Day (or, if such next succeeding Business Day falls in
the
next succeeding calendar month, on the immediately preceding Business Day);
(vi)
no Interest Period shall have a duration of less than one (1) month; (vii)
in no
event shall any Interest Period extend beyond the Maturity Date; and (viii)
there may be no more than 5 separate Interest Periods in respect of LIBOR Rate
Loans outstanding from each Lender at any one time. Notwithstanding the
foregoing, and without limiting the rights and remedies of Administrative Agent
and the Lenders under Article
XII,
in the
event that any Event of Default exists, Administrative Agent may (and at the
request of the Required Lenders shall) suspend the right of Borrower to Convert
any Loan into a LIBOR Rate Loan or Continue any Loan as a LIBOR Rate Loan for
so
long as such Event of Default remains outstanding, in which event all Loans
shall be converted (on the last day(s) of the respective Interest Periods
therefor) or Continued, as the case may be, as Base Rate Loans.
(b) Notwithstanding
Section 2.7(a)
above,
(i) Borrower shall not be entitled to select a LIBOR Period that does not end
on
or before the Maturity Date; (ii) on each date for determination of LIBOR,
the
Administrative Agent shall determine the applicable LIBOR-Based Rate (which
determination shall be conclusive in the absence of manifest error) and shall
promptly give notice of the same to Borrower and Lender by telephone, telecopier
or electronic mail; and (iii) during the existence of an Event of Default,
Borrower may not elect a LIBOR-Based Rate. Lender shall be deemed to have funded
its Loans that bear interest at the LIBOR-Based Rate from LIBOR deposits
obtained by Lender, regardless of whether Lender has funded such LIBOR-Based
Loan from another source.
ARTICLE
III
PAYMENTS
OF INTEREST AND PRINCIPAL
3.1 Interest.
(a) Borrower
hereby promises to pay to Administrative Agent for account of each Lender
interest on the unpaid principal amount of each Loan made by such Lender for
the
period from and including the date of such Loan to but excluding the date such
Loan shall be paid in full, at the Applicable Interest Rate.
(b) Accrued
interest on each Loan shall be payable, in arrears, monthly on each Payment
Date
subject to Section 7.5(b);
provided that (i) in the case of payment or prepayment of all or a portion
of a
Loan, interest accrued thereon shall be payable at the time of such payment
or
prepayment and (ii) interest payable at the Default Rate shall be payable from
time to time on demand. Subject to the provisions of Article
VI
and
Article
VII,
such
accrued interest shall be payable from the Interest Reserves established
pursuant to the Project Budget; provided,
however,
that
the allocation of Loan funds to the Interest Reserve shall not limit Borrower's
obligation to pay such accrued interest.
(c) Notwithstanding
anything to the contrary contained herein, after the Maturity Date and during
any period when an Event of Default exists, Borrower shall pay to Administrative
Agent for the account of each Lender interest at the Default Rate on (i) the
outstanding principal amount of any Loan made by such Lender, (ii) any interest
payments thereon not paid when due, and (iii) on any other amount payable by
Borrower hereunder, under the Notes and any other Loan Documents.
(d) Promptly
after the determination of any interest rate provided for herein or any change
therein, Administrative Agent shall give notice thereof to the Lenders to which
such interest is payable and to Borrower, but the failure of Administrative
Agent to provide such notice shall not affect Borrower's obligation for the
payment of interest on the Loans.
3.2 Repayment
of Loans
.
Borrower hereby promises to pay to Administrative Agent for the account of
each
Lender the principal of such Lender's outstanding Loans, together with accrued
and unpaid interest, fees and all other amounts due under the Loan Documents,
on
the Maturity Date.
3.3 Late
Charge
.
In
addition to any sums due under Section 3.1(c),
if
Borrower fails to pay any installment of interest as provided in Sections
3.1
and
3.2
above,
except the payment of principal due on the Maturity Date, within ten (10) days
after the date on which the same is due, Borrower shall pay to Administrative
Agent a late charge on such past-due amount, as liquidated damages and not
as a
penalty, equal to five percent (5.0%) of such amount (a "Late Charge"). In
connection therewith, Borrower agrees as follows: (a) because of such late
payment, Administrative Agent and Lender will incur certain costs and expenses
including, without limitation, administrative costs, collection costs, loss
of
interest, and other direct and indirect costs in an uncertain amount; (b) it
would be impractical or extremely difficult to fix the exact amount of such
costs in such event; and (c) the Default Rate and the late charge are reasonable
and good faith estimates of such costs. The application of the Default Rate
or
the assessment of a late charge to any such late payment as described in this
Section 3.3
will not
be interpreted or deemed to extend the period for payment or otherwise limit
any
of Administrative Agent's or Lender's remedies hereunder or under the other
Loan
Documents.
3.4 Optional
Prepayments
.
Subject
to the provisions of Sections 3.6
and
5.5,
Borrower shall have the right to prepay Loans in whole or in part, without
premium or penalty; provided that: (a) Borrower shall give Administrative Agent
notice of each such prepayment as provided in Section 2.2(a)
(and,
upon the date specified in any such notice of prepayment, the amount to be
prepaid shall become due and payable hereunder) and (b) except as otherwise
set
forth in Section 2.2(k),
partial
prepayments shall be in the minimum aggregate principal amount of One Hundred
Thousand and No/100 Dollars ($100,000.00), and in whole multiples of One Hundred
Thousand and No/100 Dollars ($100,000.00) above such amount. Loans that are
prepaid cannot be reborrowed.
3.5 Mandatory
Prepayments.
(a) Casualties;
Condemnations.
If a
Casualty or Condemnation shall occur with respect to the Project, Borrower,
upon
Borrower's or Administrative Agent's receipt of the applicable Insurance
Proceeds or Condemnation Award, shall prepay the Loan, if required by the
provisions of Article
XI,
on the
dates and in the amounts specified therein without premium (but subject to
the
provisions of Section 5.5).
Nothing in this Section 3.5(a)
shall be
deemed to limit any obligation of Borrower under the Security Instrument or
any
other Security Document, including any obligation to remit to a collateral
or
similar account maintained by Administrative Agent pursuant to the Security
Instrument or any of the other Security Documents the proceeds of insurance,
condemnation award or other compensation received in respect of any Casualty
or
Condemnation.
(b) Partial
Release or Release of Security Instrument.
Provided no Event of Default has occurred and is continuing, Borrower shall
have
the right from time to time to obtain releases of: (1) individual Units and
Unit
Specific Personal Property with respect to the Residential Component, (2) the
Club Component, the Club Component Personal Property, and the Shared Parking
Garage Component, and (3) the Spa Project (provided, however, if the Spa Project
is a separate legal parcel as contemplated by the Subdivision Agreement, the
Spa
Project may be released subject to the following conditions even if an Event
of
Default exists), from the lien of the Security Instrument following prepayment
of the Loan as follows:
(i) Borrower
shall provide written notice to Administrative Agent of the date such prepayment
and/or release is intended to be made at least ten (10) days in advance thereof
provided that such notice shall be revocable and the date of such prepayment
and/or release shall be subject to adjustment upon such notice to Administrative
Agent as shall be reasonably possible;
(ii) the
subdivision plat, including the subdivision plat contemplated by the Subdivision
Agreement, condominium map, owners' association and related documents for the
Project shall have been approved by all applicable Governmental Authorities,
Administrative Agent (to the extent required at the time of release) and the
title insurance company that agrees to issue owner's title insurance policies
to
purchasers of the Units and all such referenced documents, where appropriate,
shall be recorded in the Official Records;
(iii) Borrower
(1) shall have delivered a notice to Administrative Agent specifying (A) the
legal description of the Unit or portion of the Project to be released, and
(B)
the Release Price, if applicable, and each notice shall be accompanied by a
proper instrument of release, (2) shall execute and deliver to Administrative
Agent any other documents or instruments reasonably required by Administrative
Agent, including, without limitation, an amendment to the Security Instrument
with respect to a revised legal description for the Project, and (3) prior
to
the closing of the Unit, if applicable, shall have delivered to Administrative
Agent and Administrative Agent shall have approved a settlement statement for
such Unit;
(iv) Borrower
shall have paid to Administrative Agent the Release Price for the Unit being
released; provided, however, there is no applicable Release Price for the Spa
Project and no amount is required to be paid to release the Spa
Project;
(v) Administrative
Agent shall have received such endorsements to the Title Policy as it deems
appropriate and has confirmed that the Title Policy remains in full force and
effect with respect to that portion of the Project not released;
(vi) after
any
release, the portion of the Project and the personal property Collateral not
released shall continue to be subject to the Security Instrument;
(vii) Borrower
shall pay Administrative Agent's reasonable fees and expenses incurred in
connection with each such release including, but not limited to, any Breakage
Fees required pursuant to Section 5.5;
(viii) Borrower
shall have provided evidence to Administrative Agent that any bond assessment
that constitutes a lien against the property has been properly allocated between
the Unit(s) to be released and the portion of the Project not released;
provided, however, an allocation shall be deemed proper if the allocation is
in
accordance with the assessed value;
Furthermore,
with respect to a request for a release of the Club Component and Shared Parking
Garage Component (it being intended that the Shared Parking Garage shall be
released contemporaneously with the Club Component), and for a release of the
Spa Project, in addition to the requirements in Sections 3.5(b)(i)
though
3.5(b)(viii)
above,
Borrower shall:
(ix) Provide
evidence satisfactory to the Administrative Agent that:
(1) The
portion of the Project to be released and the portion of the Project that would
remain encumbered by the Deed of Trust are each legal parcels lawfully created
and are in compliance with all subdivision laws and ordinances; and
(2) The
remaining portions of the Project after the proposed release have the benefit
of
all utilities, easements, public or private streets, covenants, conditions
or
restrictions as may be necessary for the continued use and operation thereof
for
their respective intended purposes, including without limitation all ingress
and
egress rights and parking rights that may be necessary or intended in the Shared
Parking Garage Component upon its release, and if, but only if the Spa Project
has been completed, but not otherwise, all necessary or intended use rights
pursuant to a license agreement between Borrower and Lodge Properties, Inc.,
in
the Spa Project upon its release.
(c) Unit
Sales Exception.
Notwithstanding Section 3.5(b)
above,
Administrative Agent shall, to accommodate the sale of Units and the release
of
individual Units from the Lien of the Security Instrument, upon Borrower's
request, deliver to the Title Company executed copies of the release documents
necessary for the separate release of the Lien of the Security Document as
to
each Unit, with such release documents to be held in escrow, pursuant to an
escrow agreement in form and substance satisfactory to Administrative Agent
and
Borrower, pending the sale of such Units and the receipt by the Title Company
of
the Release Price for such Unit, provided that Borrower has delivered to
Administrative Agent the notices required by Section 3.5(b)
and
Administrative Agent has not delivered any objection to the release of such
Unit
to the Title Company prior to the earliest date set forth for the release of
such Unit in the notice of prepayment delivered by Borrower.
(d) Club
Membership Deposits.
Promptly upon receipt of a Club Membership Deposit, Borrower shall deposit
the
Club Membership Deposit into the Club Membership Deposit Account or provide
a
Deposit Letter of Credit in lieu thereof. Upon release of the Club Component,
all Club Membership Deposits on deposit in the Club Membership Deposit Account
shall be released and applied by the Administrative Agent to the outstanding
balance of the Facility Amount. The Release Price paid for the release of the
Club Component shall be reduced by the Club Membership Deposits applied to
the
Facility Amount. At any time that Administrative Agent receives a Deposit Letter
of Credit complying with all of the terms set forth in the definition thereof,
the Club Membership Deposits replaced by such Deposit Letter of Credit shall
be
released to Borrower for use by Borrower in the manner determined by
Borrower.
(e) Framing
Deposits.
Promptly upon receipt of a Framing Deposit, Borrower shall deposit the Framing
Deposit into the Framing Deposit Account or provide a Deposit Letter of Credit
in lieu thereof. Upon release of a Unit in the Residential Component, the
applicable Framing Deposit on deposit in the Framing Deposit Account shall
be
released and applied by the Administrative Agent to the outstanding balance
of
the Facility Amount. The Release Price paid for the release of the Unit in
the
Residential Component shall be reduced by the Framing Deposit applied to the
Facility Amount. At any time that Administrative Agent receives a Deposit Letter
of Credit complying with all of the terms set forth in the definition thereof,
the Framing Deposits replaced by such Deposit Letter of Credit shall be released
to Borrower for use by Borrower in the manner determined by
Borrower.
(f) Covenant
Compliance.
If
Borrower is not in compliance with the provisions of Section 7.2(a)(i)
and
(ii) or Section 9.21,
Borrower shall prepay the Loan by such amount necessary for compliance with
such
provisions, as appropriate.
(g) Application.
Prepayments pursuant to Section 3.5(a)
above
shall be applied to the Loans then outstanding pro rata in the order set forth
in Section 3.8.
3.6 Interest
and Other Charges on Prepayment
.
If the
Loans are prepaid, in whole or in part, pursuant to Sections 3.4
or
3.5,
each
such prepayment shall be made on the prepayment date specified in the notice
to
Administrative Agent pursuant to Section 2.2(a)
or as
otherwise permitted pursuant to Section 3.5,
and (in
every case) together with (a) the accrued and unpaid interest on the principal
amount prepaid, and (b) any amounts payable to the Lender pursuant to
Section 5.5
as a
result of such prepayment.
3.7 Lender's
Records as to Sums Owing
.
Absent
manifest error, Administrative Agent's records as to the amounts of principal,
interest and other sums owing hereunder shall be conclusive and
binding.
3.8 Application
of Payments Received
.
All
payments received by Administrative Agent hereunder shall be applied: first,
to
the payment of all fees, expenses and other amounts due Administrative Agent
or
the Lenders hereunder (excluding principal and interest); second, to accrued
interest; and third, the balance to outstanding principal. As to sums applied
to
accrued interest under clause "second" above, such prepayment shall be applied
first to LIBOR Rate Loans of the shortest maturity so as to minimize breakage
costs. Notwithstanding anything to the contrary set forth in this Section
3.8
or in
any of the Loan Documents, if an Event of Default exists, Administrative Agent
may distribute payments to the Lenders for application in such manner as it,
subject to Section 2.2(i),
may
determine to be appropriate.
3.9 Sharing
of Payments, Etc.
(a) Sharing.
If any
Lender obtains from Borrower payment of any principal of or interest on any
Loan
owing to it or payment of any other amount under this Agreement or any other
Loan Document through the exercise of any right of set-off, banker's lien or
counterclaim or similar right or otherwise (other than from Administrative
Agent
as provided herein), and, as a result of such payment, such Lender shall have
received a greater percentage of the principal of or interest on the Loans
or
such other amounts then due hereunder or thereunder by Borrower to such Lender
than the percentage received by any other Lender, it shall promptly purchase
from such other Lenders participations in (or, if and to the extent specified
by
such Lender, direct interests in) the Loans or such other amounts, respectively,
owing to such other Lenders (or in interest due thereon, as the case may be)
in
such amounts, and make such other adjustments from time to time as shall be
equitable, to the end that all the Lenders shall share the benefit of such
excess payment (net of any expenses that may be incurred by such Lender in
obtaining or preserving such excess payment) pro rata in accordance with the
unpaid principal of and/or interest on the Loans or such other amounts,
respectively, owing to each of the Lenders. To such end, all the Lenders shall
make appropriate adjustments among themselves (by the resale of participations
sold or otherwise) if such payment is rescinded or must otherwise be restored.
Each Lender agrees that it shall turn over to Administrative Agent (for
distribution by Administrative Agent to the other Lenders in accordance with
the
terms of this Agreement) any payment (whether voluntary or involuntary, through
the exercise of any right of setoff or otherwise) on account of the Loans held
by it in excess of its ratable portion of payments on account of the Loans
obtained by all the Lenders.
(b) Rights
of Lenders; Bankruptcy.
Nothing
contained herein shall require any Lender to exercise any such right or shall
affect the right of any Lender to exercise, and retain the benefits of
exercising, any such right with respect to any other indebtedness or obligation
of Borrower. If, under any applicable bankruptcy, insolvency or other similar
law, any Lender receives a secured claim in lieu of a set-off to which Section
14.10
applies,
then such Lender shall, to the extent practicable, exercise its rights in
respect of such secured claim in a manner consistent with the rights of the
Lenders entitled under Section 14.10
to share
in the benefits of any recovery on such secured claim.
ARTICLE
IV
EXTENSION
OF THE MATURITY DATE
4.1 Extension
of Scheduled Maturity Date
.
Borrower may, at its option, extend the Scheduled Maturity Date for a period
(the "Extension
Period")
of six
(6) months (and the end of such period, the "Extended
Maturity Date"),
subject to the satisfaction of the following conditions (the "Extension
Option"):
(a) Borrower
shall notify (the "Extension
Notice")
Administrative Agent of Borrower's exercise of such option at least ninety
(90)
days, but not more than one hundred eighty (180) days prior to the Scheduled
Maturity Date;
(b) As
of the
date of the Extension Notice and as of the Scheduled Maturity Date, (i) no
Event
of Default then exists, (ii) no Default then exists or would result from the
extension of the maturity of the Loans for the Extension Period; (iii) the
Loans
are In Balance; (iv) Completion of the construction of the Improvements shall
have occurred; (v) no liens shall exist against the Project; (vi) the Minimum
Loan Coverage Ratio requirement shall be met; and (vii) Borrower shall have
sold
all thirteen (13) Units of the Residential Component and closed on the sale
of
at least seven (7) Units from the Residential Component of the Project pursuant
to the terms of Qualified Purchase Contracts, but at sales prices of no less
than the amount set forth in Exhibit
D.
(c) Borrower
and each Guarantor shall have executed and delivered to Administrative Agent
such Modifications to and reaffirmations of the Loan Documents as Administrative
Agent may reasonably require in connection with the foregoing.
(d) Whether
or not the extension becomes effective, Borrower shall pay all reasonable and
actual out-of-pocket costs and expenses incurred by Administrative Agent in
connection with the proposed extension (pre- and post-closing), including
appraisal fees and legal fees; all such costs and expenses shall be due and
payable upon demand, and any failure to pay such amounts shall constitute a
Default under this Agreement and the Loan Documents;
(e) Not
later
than the initial Scheduled Maturity Date, (i) the extension shall have been
documented to the Lenders' reasonable satisfaction unless the failure to so
document the extension is not the fault of Borrower and consented to by
Borrower, Administrative Agent and all the Lenders, and (ii) Administrative
Agent shall have been provided with an updated title report and judgment and
lien searches, and appropriate title insurance endorsements shall have been
issued as required by Administrative Agent;
(f) On
the
Scheduled Maturity Date, Borrower shall pay to Administrative Agent (for payment
to the Lenders in accordance with their respective Proportionate Shares) an
extension fee in the amount of one-eighth of one percent (0.125%) of the total
Commitments of all Lenders (whether disbursed or undisbursed), which Commitments
may have been reduced by prepayments by Borrower of principal on the Loans
as
permitted by the terms of this Agreement and may be reduced as part of the
exercise of the Extension Option as set forth in Section 2.3(b)
(the
"Extension
Fee").
Any
such
extension shall be otherwise subject to all of the other terms and provisions
of
this Agreement and the other Loan Documents.
ARTICLE
V
INCREASED
COSTS, LIBOR AVAILABILITY, ILLEGALITY, ETC.
5.1 Costs
of Making or Maintaining LIBOR Rate Loans
.
Borrower shall pay to Administrative Agent (for the benefit of the applicable
Lender) from time to time such amounts as any Lender may determine to be
necessary to compensate such Lender for any costs that such Lender determines
are attributable to its making or maintaining of any LIBOR Rate Loans or its
obligation to make any LIBOR Rate Loans hereunder (in each case, as opposed
to
Base Rate Loans), or, subject to the following provisions of this Article
V,
any
reduction in any amount receivable by such Lender hereunder in respect of any
of
such LIBOR Rate Loans or such obligation (such increases in costs and reductions
in amounts receivable being herein called "Additional
Costs"),
provided such Additional Costs result from any Regulatory Change
that:
(a) shall
subject any Lender (or its Applicable Lending Office for any of such LIBOR
Rate
Loans) to any tax, duty or other charge in respect of such LIBOR Rate Loans
or
its Note or changes the basis of taxation of any amounts payable to such Lender
under this Agreement or its Note in respect of any of such LIBOR Rate Loans
(other than Excluded Taxes); or
(b) imposes
or Modifies any reserve, special deposit or similar requirements (other than
the
Reserve Requirement utilized in the determination of the Adjusted LIBOR for
such
LIBOR Rate Loan) relating to any extensions of credit or other assets of, or
any
deposits with or other liabilities of, such Lender (including any of such LIBOR
Rate Loans or any deposits referred to in the definition of "LIBOR" in Section
1.1),
or any
commitment of such Lender (including the Commitment of such Lender hereunder);
or
(c) imposes
any other condition affecting this Agreement or its Note (or any of such
extensions of credit or liabilities) or its Commitment.
If
any
Lender requests compensation from Borrower under this Section 5.1,
Borrower may, by notice to such Lender (with a copy to Administrative Agent),
suspend the obligation of such Lender thereafter to make or Continue LIBOR
Rate
Loans, or Convert Base Rate Loans into LIBOR Rate Loans, until the Regulatory
Change giving rise to such request ceases to be in effect or until Borrower
notifies such Lender that Borrower is lifting such suspension (in which case
the
provisions of Section 5.4
shall be
applicable); provided that such suspension shall not affect the right of such
Lender to receive the compensation so requested for so long as any LIBOR Rate
Loan remains in effect.
5.2 Limitation
on LIBOR Rate Loans; LIBOR Not Available
.
Anything herein to the contrary notwithstanding, if, on or prior to the
determination of any LIBOR for any Interest Period for any LIBOR Rate
Loan:
(a) Administrative
Agent determines, which determination shall be conclusive absent manifest error,
that quotations of interest rates for the relevant deposits referred to in
the
definition of "LIBOR" are not being provided in the relevant amounts or for
the
relevant maturities for purposes of determining rates of interest for LIBOR
Rate
Loans as provided herein; or
(b) the
Required Lenders determine, which determination shall be conclusive absent
manifest error, and notify Administrative Agent that the relevant rates of
interest referred to in the definition of "LIBOR" upon the basis of which the
rate of interest for LIBOR Rate Loans for such Interest Period is to be
determined are not likely adequate to cover the cost to such Lenders of making
or maintaining LIBOR Rate Loans for such Interest Period;
then
Administrative Agent shall give Borrower and each Lender prompt notice thereof
and, so long as such condition remains in effect, the Lenders shall be under
no
obligation to make additional LIBOR Rate Loans, or to Continue LIBOR Rate Loans
or to Convert Base Rate Loans into LIBOR Rate Loans, and Borrower shall, on
the
last day(s) of the then current Interest Period(s) for the outstanding LIBOR
Rate Loans, either prepay such LIBOR Rate Loans or, in accordance with Section
2.7,
Convert
such LIBOR Rate Loans into Base Rate Loans or other LIBOR Rate Loans in amounts
and maturities which are still being provided. Notwithstanding the foregoing,
(i) if the applicable conditions under Sections 5.2(a)
or
5.2(a)
above
affect only a portion of LIBOR Rate Loans, the balance of LIBOR Rate Loans
may
continue as LIBOR Rate Loans and (ii) if the applicable conditions under
Sections 5.2(a)
and
5.2(b)
only
affect certain Interest Periods, Borrower, subject to the terms and conditions
of this Agreement, may elect to have LIBOR Rate Loans with such other Interest
Periods.
5.3 Illegality
.
Notwithstanding any other provision of this Agreement, if it becomes unlawful
for any Lender or its Applicable Lending Office to honor its obligation to
make
or maintain LIBOR Rate Loans hereunder, then such Lender shall promptly notify
Administrative Agent thereof (who shall notify Borrower), and such Lender's
obligation to make or Continue, or to Convert Loans of any other Type into
LIBOR
Rate Loans, shall be suspended until such time as such Lender may again make
and
maintain LIBOR Rate Loans (in which case the provisions of Section 5.4
shall be
applicable).
5.4 Treatment
of Affected Loans
.
If the
obligation of any Lender to make LIBOR Rate Loans or to Continue or to Convert
Base Rate Loans into LIBOR Rate Loans shall be suspended pursuant to Sections
5.1
or
5.3,
then
such Lender's LIBOR Rate Loans shall be automatically Converted into Base Rate
Loans on the last day(s) of the then current Interest Period(s) for LIBOR Rate
Loans (or, in the case of a Conversion resulting from a circumstance described
in Section 5.3,
on such
earlier date as such Lender may specify to Borrower with a copy to
Administrative Agent) and, unless and until either (i) such Lender gives notice
as provided below that the circumstances specified in Sections 5.1
or
5.3
that
gave rise to such conversion no longer exist or (ii) Borrower, in the case
of
Section 5.1,
ends
any suspension by Borrower:
(a) to
the
extent that such Lender's LIBOR Rate Loans have been so Converted, all payments
and prepayments of principal that would otherwise be applied to such Lender's
LIBOR Rate Loans shall be applied instead to its Base Rate Loans;
and
(b) all
Loans
that would otherwise be made or Continued by such Lender as LIBOR Rate Loans
shall be made or Continued instead as Base Rate Loans, and all Base Rate Loans
of such Lender that would otherwise be Converted into LIBOR Rate Loans shall
remain as Base Rate Loans.
If
such
Lender gives notice to Borrower with a copy to Administrative Agent that the
circumstances specified in Sections 5.1
or
5.3
that
gave rise to the Conversion of such Lender's LIBOR Rate Loans pursuant to this
Section 5.4
no
longer exist (which notice such Lender agrees to give promptly upon such
circumstances ceasing to exist) or Borrower terminates its applicable suspension
at a time when LIBOR Rate Loans made by other Lenders are outstanding, such
Lender's Base Rate Loans shall be automatically Converted, on the first day(s)
of the next succeeding Interest Period(s) for such outstanding LIBOR Rate Loans,
to the extent necessary so that, after giving effect thereto, all Base Rate
and
LIBOR Rate Loans are allocated among the Lenders ratably (as to principal
amounts, Types and Interest Periods) in accordance with their respective
Commitments.
5.5 Compensation
.
Borrower shall pay to Administrative Agent for account of each Lender, upon
the
request of such Lender through Administrative Agent, such amount or amounts
as
shall be sufficient to compensate it for any loss, cost or expense (including,
without limitation, any loss or expense sustained or incurred in obtaining,
liquidating or employing deposits or other funds acquired to effect, fund or
maintain any LIBOR Rate Loan) (collectively, "Breakage
Costs")
that
such Lender determines is attributable to:
(a) any
failure by Borrower for any reason (including the failure of any of the
conditions precedent specified in Article
VI
or
Article
VII
to be
satisfied) to (i) borrow a LIBOR Rate Loan from such Lender (other than the
default of such Lender) on the date for such borrowing specified in the relevant
Request for Loan Advance, or (ii) Continue or Convert a Loan on a date specified
therefor in a notice thereof;
(b) except
as
provided in Section 3.5(a),
any
payment, mandatory or optional prepayment or Conversion of a LIBOR Rate Loan
made by such Lender for any reason (including the acceleration of the Loans
pursuant to Article
XII)
on a
date other than the last day of the applicable Interest Period;
(c) any
failure by Borrower for any reason to prepay a LIBOR Rate Loan pursuant to
a
notice of prepayment given in accordance with Section 3.4;
or
(d) the
occurrence of any Event of Default, including, but not limited to, any loss
or
expense sustained or incurred or to be sustained or incurred in liquidating
or
employing deposits from third parties acquired to effect or maintain a LIBOR
Rate Loan.
Without
limiting the effect of the preceding sentence, such compensation shall include,
without limitation, an amount equal to the excess, if any, of (a) the amount
of
interest that otherwise would have accrued on the principal amount so paid,
prepaid, Converted or not borrowed for the period from the date of such payment,
prepayment, Conversion or failure to borrow to the last day of the then current
Interest Period for such Loan (or, in the case of a failure to borrow, the
Interest Period for such Loan that would have commenced on the date specified
for such borrowing) at the applicable Adjusted LIBOR for such Loan provided
for
herein over (b) the amount of interest that such Lender would earn on such
principal amount for such period if such Lender would have bid in the London
interbank market for Dollar deposits of leading banks in amounts comparable
to
such principal amount and with maturities comparable to such period (as
reasonably determined by such Lender), or if such Lender shall not, or shall
cease to, make such bids, the equivalent rate, as reasonably determined by
such
Lender, derived from Telerate Page 3750 or other publicly available source
as
described in the definition of "LIBOR").
A
certificate of any Lender setting forth any amount or amounts that such Lender
is entitled to receive pursuant to this Section 5.5
shall be
delivered to Borrower and shall be conclusive absent manifest error. Borrower
shall pay such Lender the amount shown as due on any such certificate within
ten
(10) days after receipt thereof. Any payment due to any of the Lenders pursuant
to this Section 5.5
shall be
deemed additional interest under such Lender's Note.
5.6 Additional
Waivers
.
Borrower acknowledges that, during any period in which Borrower has elected
the
LIBOR-Based Rate as the Applicable Interest Rate, payment or prepayment of
any
portion of the Loan on a date other than the last day of an applicable LIBOR
Period shall result in Lender's incurring additional costs, expenses and/or
liabilities and that it is extremely difficult and impractical to ascertain
the
extent of such costs, expenses and/or liabilities, and, to the extent specified
herein, any such payment or prepayment therefore must include the Breakage
Costs
and other sums set forth above. Borrower hereby expressly (a) waives any rights
it may have under Applicable Law to prepay any portion of the Loan without
penalty or charge, upon acceleration of the maturity of this Note, and (b)
agrees that if a prepayment of any portion of the Loans is made, following
any
acceleration of the maturity of the Notes by the holders thereof on account
of
any transfer or disposition as prohibited or restricted by the Loan Agreement
or
by the Security Instrument, then Borrower shall be obligated to pay,
concurrently therewith, as a prepayment premium, the applicable Breakage Costs
and other sums specified above.
5.7 Taxes.
(a) Payments
Free of Taxes.
Any and
all payments by or on account of any obligation of Borrower hereunder or under
any other Loan Document shall be made free and clear of and without deduction
for any Indemnified Taxes or Other Taxes; provided that if Borrower shall be
required to deduct any Indemnified Taxes or Other Taxes from such payments,
then
(i) the sum payable shall be increased as necessary so that after making all
required deductions (including deductions applicable to additional sums payable
under this Section 5.7)
Administrative Agent or the Lender (as the case may be) receives an amount
equal
to the sum it would have received had no such deductions been made, (ii)
Borrower shall make such deductions and (iii) Borrower shall pay the full amount
deducted to the relevant Governmental Authority in accordance with applicable
law.
(b) Payment
of Other Taxes by Borrower.
In
addition, Borrower shall pay any Other Taxes to the relevant Governmental
Authority in accordance with applicable law.
(c) Indemnification
by Borrower.
Borrower shall indemnify Administrative Agent and each Lender, within ten (10)
days after written demand therefor, for the full amount of any Indemnified
Taxes
or Other Taxes paid by Administrative Agent or such Lender, as the case may
be,
on or with respect to any payment by or on account of any obligation of Borrower
hereunder (including Indemnified Taxes or Other Taxes imposed or asserted on
or
attributable to amounts payable under this Section 5.7)
and any
penalties, interest and reasonable expenses arising therefrom or with respect
thereto, whether or not such Indemnified Taxes or Other Taxes were correctly
or
legally imposed or asserted by the relevant Governmental Authority. A
certificate as to the amount of such payment or liability delivered to Borrower
by a Lender or by Administrative Agent on its own behalf or on behalf of a
Lender or the Issuing Lender, shall be conclusive absent manifest
error.
(d) Evidence
of Payments.
As soon
as practicable after any payment of Indemnified Taxes or Other Taxes by Borrower
to a Governmental Authority, Borrower shall deliver to Administrative Agent
the
original or a certified copy of a receipt issued by such Governmental Authority
evidencing such payment, a copy of the return reporting such payment or other
evidence of such payment reasonably satisfactory to Administrative
Agent.
(e) Refunds.
If
Administrative Agent or a Lender determines that it has received a refund of
any
Taxes or Other Taxes as to which it has been indemnified by Borrower or with
respect to which Borrower has paid additional amounts pursuant to this Section
5.7,
it
shall pay over such refund to Borrower (but only to the extent of indemnity
payments made, or additional amounts paid, by Borrower under this Section
5.7
with
respect to the Taxes or Other Taxes giving rise to such refund), net of all
out-of-pocket expenses of Administrative Agent or such Lender and without
interest (other than any interest paid by the relevant Governmental Authority
with respect to such refund).
ARTICLE
VI
CONDITIONS
PRECEDENT
6.1 Conditions
Precedent to Closing and the Effectiveness of Commitments
.
The
Closing shall not be deemed to have occurred and, regardless as to whether
Administrative Agent or any Lender has executed this Agreement, neither
Administrative Agent nor any Lender shall have any obligation hereunder or
under
any of the other Loan Documents, unless and until the conditions and
requirements set forth in this Section 6.1
have
been completed and fulfilled to the satisfaction of Administrative Agent, in
Administrative Agent's sole and absolute discretion, and at Borrower's sole
cost
and expense:
(a) Loan
Documents.
Borrower and all other Borrower Parties shall have executed and delivered (or
cause to be executed and delivered) to Administrative Agent the Loan Documents
and such other documents as Administrative Agent may require, in form and
substance acceptable to Administrative Agent. Administrative Agent may designate
which of the Loan Documents are to be placed of record, the order of recording
thereof, and the offices in which the same are to be recorded.
(b) Recordation
of Security Interest and Perfection of all Security Interests.
The
Security Instrument shall have been recorded in the Official Records in full
compliance with the letter of closing instructions from Administrative Agent
to
the Title Company, Administrative Agent shall, subject to the Permitted Liens,
have a valid, perfected, first-priority lien on all Collateral covered by the
Security Documents, and Borrower shall have paid all documentary, intangible,
recording and/or registration taxes and/or fees due upon the Note, the Security
Instrument, any Financing Statement and/or the other Loan
Documents.
(c) No
Defaults.
No
Default or Event of Default shall then exist.
(d) Representations
and Warranties.
All of
the representations and warranties of Borrower and other Borrower Parties are
true and correct in all material respects.
(e) Fees
and Expenses.
Borrower shall have paid any and all fees and charges due to Administrative
Agent or the Lenders.
(f) Discretionary
Approvals.
All
Discretionary Approvals necessary as of such date shall have been granted and/or
issued, as applicable, by the applicable Governmental Authority, the same shall
be in full force and effect without any pending legal or regulatory challenge
thereto, and to the extent requested by Administrative Agent, Administrative
Agent shall have received copies of the foregoing certified by an Authorized
Officer of Borrower to be true and correct.
(g) Project
Budget.
The
Project Budget shall have been approved by Administrative Agent, and shall
include all Hard Costs and Soft Costs, including line-item cost breakdown,
and
shall be sufficient for Completion of the Improvements based on Borrower's
final
Plans and Specifications.
(h) Third-Party
Reports.
Administrative Agent shall have received and approved (i) the Cost and Plan
Review; (ii) the Environmental Reports; and (iii) the Appraisal.
(i) Pre-Sale
Requirement.
Qualified Purchase Contracts providing not less than the Minimum Loan Coverage
Ratio.
(j) Controlled
Accounts; Deposit Letter of Credit.
Borrower shall have established and funded, to the extent applicable, the
Borrower's Account, the Xxxxxxx Money Deposit Account, the Framing Deposit
Account, the Club Membership Deposit Account, the Purchaser Upgrade Deposit
Account, and any other account required by Administrative Agent; provided,
however, in lieu of maintaining Framing Deposits and/or Club Membership
Deposits, Borrower may provide to Administrative Agent, prior to closing or
at
any time during the term of the Loan, the Deposit Letter of Credit in an amount
equal to the amount of Framing Deposits and/or Club Membership Deposits being
replaced by the Deposit Letter of Credit.
(k) Agreement
for License.
Borrower shall have delivered to Administrative Agent that certain Agreement
dated of even date herewith between Borrower and Lodge Properties, Inc.,
concerning the grant of a license in the future for the use of the Spa
Project.
(l) Subdivision
Agreement.
The
Subdivision Agreement shall have been executed and recorded in the Official
Records, prior to the recording of the Security Documents.
(m) Other
Documents and Deliveries.
Administrative Agent shall have received and approved all documents and other
items described on Schedule
6.1.
(n) In
the
event Administrative Agent, subject to Section 13.9(b)(ii),
authorizes the recording of the Security Instrument or the making of any Loan
at
a time when all conditions described in this Section 6.1
have not
been satisfied (including, without limitation, that all documents and other
items described on Schedule 6.1
have not
been approved by and/or delivered to Administrative Agent), such condition
must
be satisfied before any additional Loan shall be made.
6.2 Conditions
Precedent to the Making of any Loans
.
Neither
Administrative Agent nor any of the Lenders shall be required to make any Loans
hereunder until the conditions and requirements set forth in this Section
6.2
have
been completed and fulfilled to the satisfaction of Administrative Agent, in
Administrative Agent's sole discretion, at Borrower's sole cost and expense.
It
is agreed, however, that Administrative Agent (on behalf of the Lenders) may,
subject to Section 13.9(b)(ii),
in its
discretion, make advances prior to completion and fulfillment of any or all
of
the conditions and requirements set forth below, without waiving its right
to
require such completion and fulfillment before any additional advances are
made.
If all such conditions set forth below are not satisfied as of the date of
each
proposed Loan set forth in each Request for Loan Advance, neither Administrative
Agent nor any of the Lenders shall have any further obligation to make any
advances of Loan proceeds hereunder.
(a) Closing
Conditions.
All
conditions set forth in Section 6.1
above
shall be satisfied.
(b) No
Default.
No
Default or Event of Default shall have occurred and be continuing.
(c) Representations
and Warranties.
The
representations and warranties, both immediately prior to the making of such
Loan and also after giving effect thereto, made by (i) Borrower in Article
VIII
and in
each of the other Loan Documents to which it is a party and (ii) each Guarantor
in the Loan Documents to which it is a party, shall be true and complete in
all
material respects on and as of the date of the making of such Loan with the
same
force and effect as if made on and as of such date (or, if any such
representation or warranty is expressly stated to have been made as of a
specific date, as of such specific date).
(d) Plans
and Specifications.
The
Construction Work (or such part thereof as may have been constructed at the
time
of any borrowing) shall have been substantially completed in accordance with
the
Plans and Specifications (as the same may have been Modified in accordance
with
this Agreement) and Government Approvals; and there shall exist no material
defects in the Improvements.
(e) Construction
Consultant.
Administrative Agent shall have received advice from the Construction Consultant
to the effect that the Construction Consultant has reviewed and approved the
disbursement requested in the Request for Loan Advance for Hard
Costs.
(f) Request
for Loan Advance.
A
Request for Loan Advance as provided in Section 2.2(a)
duly
executed by an Authorized Officer of Borrower, together with the required
attachments thereto;
(g) Casualty
and Condemnation.
The
Project shall not have been subject to (i) a material injury from fire or other
casualty or (ii) a Condemnation, which, in either case, would, following the
allocation of Insurance Proceeds or Condemnation Awards to the Project Budget,
cause a failure of the Loans to be In Balance.
(h) Fees
and Expenses.
Borrower shall have paid (i) all installments of the fees and expenses that
are
then due and payable to Administrative Agent or the Lenders, and (ii) any
unreimbursed costs and expenses due to Administrative Agent, and/or any of
the
Lenders pursuant to Section 14.3.
(i) Prior
Loans.
To the
extent not previously delivered to Administrative Agent, Borrower shall provide
evidence of the payment of all costs, expenses and other charges for which
advances of Loans shall have been previously provided.
(j) Non-Discretionary
Approvals.
All
Non-Discretionary Approvals required as of such date shall have been granted
and/or issued, as applicable, shall be in full force and effect without any
pending legal or regulatory challenge thereto, and Administrative Agent shall
have received evidence of the foregoing.
(k) Access.
Borrower shall have provided the Construction Consultant, Administrative Agent
and the Lenders, or their representatives, prompt and reasonable access to
the
Project, and copies of all such documents, bills, construction records, lien
waivers, Change Orders, drawings, plans and specifications as the Construction
Consultant shall reasonably require, to enable the Construction Consultant
to
review each Request for Loan Advance.
(l) Other
Conditions.
All of
the requirements of Article
VII
shall
have been complied with.
(m) Other
Documents and Deliveries.
Administrative Agent shall have received and approved of all documents and
other
items described on Schedule
6.2.
6.3 Conditions
Precedent to the Final Loans
.
The
obligation of the Lenders to make the final Loans to Borrower for Base Building
Work is subject to the further condition precedent that all of the following
requirements (collectively, the "Base Building Substantial Completion
Conditions") shall have been completed to the satisfaction of Administrative
Agent:
(a) Loan
Conditions.
All
conditions set forth in Section 6.2
above
shall be satisfied.
(b) Construction
Consultant.
Administrative Agent shall have received written advice from the Construction
Consultant that the Completion of the Base Building Work has been satisfactorily
accomplished in accordance with the Plans and Specifications, subject to
completion of Punch List Items (which if incomplete on the date of the final
disbursement of a Loan for Base Building Work, Administrative Agent may, in
its
sole discretion, hold back an amount equal to (i) 150% of the estimated cost
of
completing such Punch List Items from the final disbursement minus
(ii) any
Retainage that Administrative Agent is still holding with respect to the
applicable Punch List Items, such amount to be advanced to Borrower on
completion of such Punch List Items and the satisfaction of the requirements
of
Section 7.6(b)
with
respect to Retainage, which Borrower shall diligently complete).
(c) Other
Documents and Deliveries.
Administrative Agent and the Construction Consultant shall have received and
approved of all documents and other items described on Schedule
6.3.
ARTICLE
VII
DISBURSEMENT
OF THE LOANS; LOAN BALANCING
7.1 General
Conditions.
(a) Subject
to (i) Borrower's satisfaction of the conditions precedent set forth in
Article
VI
and (ii)
Borrower's compliance with the applicable provisions of this Article
VII,
Administrative Agent shall disburse the proceeds of each Loan within seven
(7)
Business Days after Administrative Agent's receipt all of the documents and
items to be delivered or received pursuant to Article
VI
and
Article
VII.
Notwithstanding the foregoing, at no time shall Administrative Agent or the
Lenders be obligated to: (1) advance to Borrower more than the amount that
Borrower has funded from its own monies or is then required to fund to the
party
seeking payment or, in the case of reimbursement, to the party seeking
reimbursement (subject to Retainage, if applicable), (2) make an advance if
the
Loans are not In Balance in accordance with Section 7.2,
(3)
subject to possible reallocation in accordance with Section 7.3,
advance
proceeds of a Loan in an amount in excess of the Project Budget Line-Items
set
forth in the Project Budget, as the same may be adjusted in accordance with
the
terms of this Agreement, (4) except as provided in Section 7.6
hereof,
advance any portion of the Retainage, (5) except as provided in Section
9.2
hereof,
make any Loans with respect to materials not yet incorporated into the
Improvements, (6) make an advance in connection with any Change Order for which
Administrative Agent's approval is required under Section 10.13
which
has not been approved by Administrative Agent in accordance with Section
10.13,
(7)
make any Loans for payments to any subcontractor until: (A) in the case of
a
Major Subcontractor, such Major Subcontractor has been approved by
Administrative Agent, (B) in the case of a Major Subcontractor, duly executed
and delivered to Administrative Agent the applicable consent and attornment
agreement in substantially the form attached to the Assignment of Construction
Agreements, and (C) in the case of a Major Subcontractor, at the request of
Administrative Agent, such Major Subcontractor has delivered to Administrative
Agent a payment and performance bond in form and substance acceptable to
Administrative Agent, or (8) make any Loans with respect to any sums due a
Design Professional until such Design Professional if the total amount of the
projected costs payable to such Design Professional are in excess of Two Hundred
Fifty Thousand and No/100 Dollars ($250,000.00) has (A) entered into a duly
executed and delivered contract with Borrower, a copy (certified by an
Authorized Officer of Borrower) of which contract has been delivered to
Administrative Agent, and (B) duly executed and delivered to Administrative
Agent the applicable consent and attornment agreement in substantially the
form
attached to the Assignment of Architecture Agreement, or (C) make any Loans
with
respect to the General Contractor Fee except for General Contractor Fees
advanced based upon percentage of completion with payment to be complete upon
the issuance of all certificates of occupancy, release of all liens by
contractors, materialmen and suppliers, and the Loans being In
Balance.
(b) Notwithstanding
anything to the contrary contained in this Agreement, the Lenders shall have
no
obligation to advance any Loan unless Administrative Agent is, at all times,
satisfied that the Improvements can be constructed Lien free, substantially
in
accordance with the Plans and Specifications for the sums set forth in the
Project Budget as adjusted pursuant to this Agreement and subject to
Article
XI
(or, if
more, Borrower has furnished the difference in cash or cash equivalents, subject
to the provisions of Sections 7.2,
7.3
and
7.4),
by the
Completion Date subject to Unavoidable Delay. Administrative Agent will endeavor
to give notice to Borrower of its intention not to disburse any Loan proceeds
based on the foregoing, but neither the Lenders nor Administrative Agent shall
have any liability hereunder should Administrative Agent fail to do so, and
no
failure by Administrative Agent to give such notice shall affect Administrative
Agent's or any Lender's rights under this Section 7.1(b).
(c) Disbursements
shall be made no more frequently than once in each calendar month.
(d) Upon
the
Closing Date, Borrower shall submit a Request for Loan Advance relating to
all
expenses incurred as of such date by Borrower in connection with Project Costs
and Borrower shall be entitled to draw from the Xxxxxxx Money Deposits in
payment of such amounts and, to the extent such Xxxxxxx Money Deposits are
not
sufficient for the payment of such amounts, Borrower shall be entitled, subject
to the provisions of this Agreement, to a Loan advance in reimbursement of
such
excess costs.
(e) Notwithstanding
anything to the contrary contained herein, with respect to Advances for budgeted
tenant improvements and leasing commissions relating to a lease or leases in
the
Retail/Resort Component, no Advances shall be made for tenant improvements
and
leasing commissions until Administrative Agent has received from Borrower and
has approved an executed lease or leases under which such tenant improvements
and leasing commissions are to be paid.
7.2 Loan
Balancing.
(a) Definition
of "In Balance" Loans.
Borrower represents that the Project Budget sets forth all anticipated costs
to
be incurred by Borrower in connection with the ownership, development,
construction, financing, and marketing of the Project from time to time through
the Scheduled Maturity Date. Borrower acknowledges and agrees that the Loans
shall be deemed not "In
Balance"
if, at
any time, (i) the Loan to Value Ratio is greater than 75%; (ii) the Loan
coverage is less than the Minimum Loan Coverage Ratio; (iii) the projected
cost
of any category of costs included in any individual Project Budget Line-Item
(including, without limitation, the Interest Reserve and the Contingency Fund
line items) exceeds the amount set forth in the Project Budget for such
individual Project Budget Line-Item by more than fifteen percent (15%) (as
the
same may be adjusted in accordance with Section 7.4
and any
other terms of this Agreement), or (iv) the projected cost to achieve Completion
of the Project exceeds the Project Budget as determined by Administrative Agent
and the Construction Consultant in their reasonable discretion. So long as
the
foregoing events do not exist, the Loans shall be deemed "In
Balance."
(b) Deficiency
Deposits.
If at
any time the Loans are deemed not "In Balance," with respect to Section
7.2(a)(iii)
and
(iv) above then Borrower shall, provided sufficient funds do not remain in
the
Contingency Fund to cover such deficiency, within ten (10) Business Days after
written notice from Administrative Agent deposit with Administrative Agent
an
amount sufficient to cover such deficiency (a "Deficiency
Deposit"),
which
Deficiency Deposit shall be deposited into a Controlled Account. Administrative
Agent and the Lenders shall not be required to make any disbursement of any
Loans before receiving payment of any such Deficiency Deposit and the prior
application of any such Deficiency Deposit to the payment of any budgeted costs
to bring the Loans In Balance. If an Event of Default shall occur and be
continuing, Administrative Agent may (subject to the provisions of Section
13.3),
at its
option, (i) exercise any or all of its rights under the Loan Documents, (ii)
apply any unexpended Deficiency Deposit to the costs of Completion of the
Improvements, and/or (iii) apply any unexpended Deficiency Deposit to the
immediate reduction of any amounts due under the Notes and the other Loan
Documents. Notwithstanding anything in this Section 7.2(b)
or
elsewhere in this Agreement to the contrary, nothing in this Section
7.2(b)
or
elsewhere in this Agreement or the Loan Documents (other than the Development
Agreement Guaranty) shall obligate the holders of any Equity Interests for
the
payment of any amounts due from Borrower to Lender hereunder.
(c) Additional
Appraisals.
At any
time and from time to time Administrative Agent may obtain a new Appraisal
of
the Project, provided, however, unless an Event of Default has occurred and
is
continuing, Borrower shall not be obligated to pay or reimburse Administrative
Agent for an Appraisal more that once during a twelve-month period.
7.3 Project
Budget Line-Items; Loans to be Used for Specific Line-Items.
(a) The
Project Budget includes as line items (collectively, "Project
Budget Line-Items")
the
cost of all labor, materials, equipment, fixtures and furnishings needed for
the
Completion of all Construction Work, and all other costs, fees and expenses
relating in any way whatsoever thereto. Borrower agrees that all Loans shall
be
used only for the Project Budget Line-Items for which such Loans are made as
reallocated from time to time in accordance with the terms of this Agreement.
Administrative Agent shall not be obligated to advance any amount for any
category of costs set forth as a Project Budget Line-Item which is greater
than
115% of the amount set forth for such category in the applicable Project Budget
Line-Item as adjusted pursuant to this Agreement.
(b) Reallocation
of Contingency Fund and Line-Items Based on Costs Savings.
Borrower may apply the Available Contingency Amount and/or savings from one
Project Budget Line-Item to cost overruns in another Project Budget Line-Item,
to any other unbudgeted Project Cost or to bring the Loans in Balance provided:
(i) no Event of Default then exists, and (ii) as to reallocations from a Project
Budget Line Item (1) all costs to be paid out of the Project Budget Line-Item
from which funds are being reallocated have been paid or sufficient sums remain
in said line item to pay such costs when the same become due, (2) said savings
are actual savings and are documented to the reasonable satisfaction of
Administrative Agent and the Construction Consultant in their reasonable
discretion, (3) such reallocation will not violate the provisions of the Lien
Law or affect the priority of the Security Instrument on the Project, and (4)
no
Interest Reserve funds are reallocated. Notwithstanding anything to the contrary
contained herein, in the event Administrative Agent's approval of an adjustment
to a Project Budget Line Item is required, Administrative Agent, in its
reasonable discretion, may condition any such approval on obtaining, at
Borrower's sole cost and expense, an endorsement to the Title Policy insuring
against any statutory lien for services, labor or materials furnished or
contracted for which at such time has gained (or may thereafter gain) priority
over the lien of the Security Instrument as a result of such
reallocation.
7.4 Project
Budget Contingencies.
(a) Contingency
Fund Line-Item.
The
Project Budget shall initially contain a line item equal to $12,061,016 for
Hard
Costs contingency and $2,566,591.00 for Soft Costs contingency (the
"Contingency
Fund")
designated for contingency which represent amounts necessary to provide
reasonable assurances to Administrative Agent and the Lenders that additional
funds are available to be used if additional costs, expenses and/or delays
are
incurred or additional interest accrues on the Loans, or unanticipated events
or
problems occur. The Contingency Fund shall be subject to reduction upon
reallocation, disbursement, or otherwise as provided herein. Administrative
Agent may, in its sole discretion, reallocate the required amount of the
Contingency Fund to other Project Budget Line-Items from time to
time.
(b) Use
of
Contingency Fund.
In
addition to Borrower's right to reallocate the Available Contingency Amount
as
set forth in Section 7.2(b),
upon
request of Borrower, Administrative Agent may (but shall not be obligated to
do
so), from time to time in its sole discretion, disburse the Contingency Fund
or
portions thereof to Borrower (thereby reducing the amount of the same) for
use
under the Project Budget Line-Items for which they are reallocated. Borrower
agrees that except as set forth in Section7.2(b),
the
decision with respect to utilizing any portion of the Contingency Fund in order
to keep the Loans In Balance shall be made by Administrative Agent in its sole
discretion and that Borrower may be required to make a Deficiency Deposit even
if funds remain in the Contingency Fund. Notwithstanding anything to the
contrary contained herein, Administrative Agent may condition any such
reallocation under this Section 7.4(b),
on
obtaining, at Borrower's sole cost and expense, an endorsement to the Title
Policy insuring against any statutory lien for services, labor or materials
furnished or contracted for which at such time has gained (or may thereafter
gain) priority over the lien of the Security Instrument as a result of the
reallocation of the Contingency Fund.
7.5 Interest;
Fees; and Expenses.
(a) Included
in the Project Budget are projected amounts for (i) interest on the Loans (the
"Interest
Reserve"),
(ii)
the fees payable to Administrative Agent and the Lenders, (iii) the fees and
expenses of the Construction Consultant, Administrative Agent's counsel and
the
Title Company, and (iv) the fees and expenses related to the recording of the
Security Instrument.
(b) Borrower
hereby authorizes and directs, and no further request shall be necessary from
Borrower for, Administrative Agent to disburse the proceeds of any Loan as
and
when needed to pay (i) interest accrued on the Notes, (ii) the fees payable
to
Administrative Agent and the Lenders, (iii) the fees and expenses of the
Construction Consultant, Administrative Agent's counsel and the Title Company,
(iv) any expenses payable in accordance with Section 14.3
and (v)
any Date Down Endorsements, notwithstanding that Borrower may not have requested
a disbursement of such amounts. Administrative Agent shall give Borrower prompt
written notice of any such disbursements.
(c) Subject
to the provisions of Section 13.3,
Administrative Agent in its sole discretion may (but shall not be obligated
to
do so) make such disbursements authorized under this Section 7.5
notwithstanding that the Loans are not In Balance or that a Default or Event
of
Default exists under the terms of this Agreement or any other Loan Document.
Such disbursements shall constitute a Loan and be added to the principal balance
of the Notes, and the Lenders shall make the applicable Loans to fund any such
disbursements. The authorization hereby granted is irrevocable, and no further
direction or authorization from Borrower is necessary for Administrative Agent
to make such disbursements.
7.6 Retainage.
(a) Disbursement
of the available proceeds of each Loan with respect only to Hard Costs shall
be
limited to ninety percent (90%) of the value of the Hard Costs set forth in
the
applicable Request for Loan Advance; provided,
however,
that in
no event shall such percentage be less than the retainage percentage set forth
in any contract or subcontract for such portion of the Improvements (the amounts
retained by Administrative Agent pursuant to this Section 7.6(a)
being,
collectively, the "Retainage").
No
Retainage will apply to (i) any Soft Costs or (ii) the General Contractor Fees
and general conditions performed by the General Contractor pursuant to the
General Contract.
(b) Administrative
Agent shall advance proceeds of Loans pursuant to a Request for Loan Advance
to
pay portions of the Retainage with respect to each contract (including a Major
Subcontract) prior to the Completion of all Base Building Work, within fifteen
(15) days after Borrower's compliance with the following conditions to the
satisfaction of Administrative Agent with respect to such
contracts:
(i) except
with respect to the payment of interim retainage prior to the completion of
all
of the work in accordance with the terms of the applicable contract, all of
the
work under such contract is finally completed in accordance with the terms
of
such contract and the applicable Plans and Specifications, and Administrative
Agent receives a certification to that effect from an Authorized Officer of
Borrower and Borrower's Architect and such work has been approved by the
Construction Consultant;
(ii) the
work
performed by such contractor has been approved, to the extent such approval
is
required, by the Governmental Authorities having jurisdiction over the same
and
the applicable permits with respect to such work, if any, have been
issued;
(iii) the
contract provides for such early release of the applicable
Retainage;
(iv) the
applicable contractor (including the General Contractor), subcontractor,
materialman or other supplier with respect to which the Retainage is being
released delivers to Administrative Agent a final and complete unconditional
release of Lien;
(v) if
and as
required by Administrative Agent, Administrative Agent shall have received
copies of any warranties, guaranties or "as built" drawings relating to the
work
performed by each such contractor, subcontractor, materialman or other supplier
in connection with the Base Building Work; and
(vi) all
other
applicable requirements and conditions with respect to such advance of Loan
proceeds have been satisfied or previously waived in writing by Administrative
Agent.
7.7 Unsatisfactory
Work
.
If the
Construction Consultant or Administrative Agent shall determine that a portion
of the Construction Work for which Loans are sought is Unsatisfactory Work,
Administrative Agent shall be entitled to (a) withhold from such Loans such
amounts the proceeds of which are intended to pay for the Unsatisfactory Work
and (b) to the extent the Construction Consultant reasonably determines that
the
failure to remedy such Unsatisfactory Work prior to proceeding with Construction
Work would have a material adverse impact on the value of the Project or the
ability to complete other work pursuant to the Plans and Specifications, require
the affected portion of the Construction Work to be stopped until such time
as
Administrative Agent and the Construction Consultant are satisfied that the
Unsatisfactory Work is corrected, and no such action by Administrative Agent
shall be deemed to affect Borrower's Completion obligation with respect to
the
Improvements on or before the Completion Date or right to proceed with and
receive Loans in connection with Construction Work that is not affected by
the
Unsatisfactory Work, and the Lenders shall, subject to compliance by Borrower
with all other applicable requirements of this Agreement, be required to make
Loans with respect to such Unsatisfactory Work only after the Construction
Consultant and Administrative Agent shall have determined that the work which
had been identified as Unsatisfactory Work has been corrected to the
satisfaction of the Construction Consultant and Administrative
Agent.
7.8 No
Waiver or Approval by Reason of Loan Advances
.
The
making of any Loans by the Lenders shall not be deemed an acceptance or approval
by Administrative Agent or the Lenders (for the benefit of Borrower or any
third
party) of the completed Construction Work or other work theretofore done or
constructed or to the Lenders' obligations to make further Loans, nor, in the
event Borrower is unable to satisfy any condition, shall any such failure to
insist upon strict compliance have the effect of precluding Administrative
Agent
or the Lenders from thereafter declaring such inability to be an Event of
Default as herein provided. Administrative Agent's and/or the Lenders' waiver
of, or failure to enforce, any conditions to or requirements associated with
any
Loans in any one or more circumstances shall not constitute or imply a waiver
of
such conditions or requirements in any other circumstances.
7.9 Construction
Consultant
.
Administrative Agent reserves the right to employ the Construction Consultant
and any other consultants necessary, in Administrative Agent's reasonable
judgment, to review Requests for Loan Advance, inspect all construction and
the
periodic progress of the same, the reasonable cost therefor to be borne by
Borrower as a loan expense. Borrower shall make available to Administrative
Agent and the Construction Consultant on reasonable notice during business
hours, all documents and other information (including, without limitation,
receipts, invoices, lien waivers and other supporting documentation to
substantiate the costs to be paid with the proceeds of any Request for Loan
Advance) which any contractor or other Person entitled to payment for
Construction Work is required to deliver to Borrower and shall use commercially
reasonable efforts to obtain any further documents or information reasonably
requested by Administrative Agent or the Construction Consultant in connection
with any Loan or the administration of this Agreement. Borrower acknowledges
and
agrees that the Construction Consultant shall have no responsibilities or duties
to Borrower, and shall be employed solely for the benefit of Administrative
Agent and the Lenders. No default of Borrower will be waived by an inspection
by
Administrative Agent or the Construction Consultant. In no event will any
inspection by Administrative Agent or the Construction Consultant be a
representation that there has been or will be compliance with the Plans and
Specifications or that the Construction Work is free from defective materials
or
workmanship. Any and all provisions of this Agreement in respect of the
Construction Consultant shall be enforceable solely by, and at the option of,
Administrative Agent, and Borrower shall not be a third-party beneficiary
thereof. Any and all reports, advice or other information provided by the
Construction Consultant to Administrative Agent and/or the Lenders or otherwise
produced by or in the possession of the Construction Consultant shall be
confidential and Borrower shall have no right to obtain or review
same.
7.10 Authorization
to Make Loan Advances to Cure Borrower's Defaults
.
If an
Event of Default shall occur and be continuing, Administrative Agent (subject
to
the provisions of Section 13.3)
may
(but shall not be required to) perform any of such covenants and agreements
with
respect to which Borrower is in Default and of which Administrative Agent has
notified Borrower. Any amounts expended by Administrative Agent in so doing
and
any amounts expended by Administrative Agent in connection therewith shall
constitute a Loan and be added to the Outstanding Principal Amount, and the
Lenders shall make the applicable Loans to fund any such disbursements. The
authorization hereby granted is irrevocable, and no prior notice to or further
direction or authorization from Borrower is necessary for Administrative Agent
to make such disbursements.
7.11 Administrative
Agent's Right to Make Loan Advances in Compliance with the Completion Guaranty
and Development Agreement Guaranty
.
Any
Loan proceeds disbursed by Administrative Agent as contemplated by Section
2 of
the Completion Guaranty and Development Agreement Guaranty (whether the
applicable work is being performed by the Guarantor or Administrative Agent)
shall constitute a Loan and be added to the Outstanding Principal Amount, and
the Lenders shall make the applicable Loans to fund any such disbursements.
The
authorization hereby granted is irrevocable and no prior notice to or further
direction or authorization from Borrower is necessary for Administrative Agent
to make such disbursements.
7.12 No
Third-Party Benefit
.
This
Agreement is solely for the benefit of the Lenders, Administrative Agent and
Borrower. All conditions of the obligations of the Lenders to make advances
hereunder are imposed solely and exclusively for the benefit of the Lenders
and
may be freely waived or Modified in whole or in part by the Lenders at any
time
if in their sole discretion they deem it advisable to do so, and no Person
other
than Borrower (provided, however, that all conditions have been satisfied)
shall
have standing to require the Lenders to make any Loan advances or shall be
a
beneficiary of this Agreement or any advances to be made hereunder.
7.13 Payments
for Spa Project
.
As
acknowledged by Borrower and Lodge Properties Inc. in the Subdivision Agreement,
the Improvements to be constructed with Advances hereunder and the Spa Project
are interrelated from a construction standpoint and in fact, are governed by
the
terms of the single General Contract. It is in the interest of all parties
involved that the construction of the Improvements and the Spa Project remains
on schedule and that payments for the construction are made on a timely basis
and in a manner to maintain a lien-free Project. In that regard, upon the
request of Administrative Agent, Borrower agrees to request Lodge Properties
Inc. to fund into Borrower's Account the monthly payments necessary to pay
that
portion of the General Contractor's monthly draw requests attributable to the
Spa Project. Thereafter, upon Borrower's receipt of a Loan Advance hereunder
after a Request for Loan Advance pursuant to the terms hereof, Borrower shall
use such funds deposited by Lodge Properties, Inc., to pay the General
Contractor's draw request in full, subject to any Retainage requirements.
Administrative Agent reserves the right but not the obligation to review the
payment request for the Spa Project and to request its Construction Consultant
to review the payment request and inspect the Spa Project to determine the
applicability and appropriateness of the payment relating to the Construction
Work performed.
ARTICLE
VIII
REPRESENTATIONS
AND WARRANTIES
Borrower
represents and warrants to Administrative Agent and the Lenders
that:
8.1 Organization;
Powers
.
Each of
Borrower Parties is duly organized, validly existing and in good standing under
the laws of the jurisdiction of its organization, has all requisite power and
authority to carry on its business as now conducted and, is qualified to do
business in, and is in good standing in, every jurisdiction where such
qualification is required. Each of Borrower and the Guarantor is organized
or
qualified to do business and in good standing in the State of
Colorado.
8.2 Authorization;
Enforceability
.
The
Transactions are within each of Borrower Party's organizational powers and
have
been duly authorized by all necessary organizational action under their
respective Organizational Documents. This Agreement and the other Loan Documents
have been duly executed and delivered by Borrower Parties party thereto and
each
of the Loan Documents to which a Borrower Party is a party when delivered will
constitute, a legal, valid and binding obligation of the applicable Borrower
Party, enforceable in accordance with its terms, subject to applicable
bankruptcy, insolvency, reorganization, moratorium or other laws of affecting
creditors' rights generally and subject to general principles of equity
(regardless of whether such enforceability is considered in a proceeding in
equity or at law).
8.3 Government
Approvals; No Conflicts
.
The
Transactions (a) do not require any Government Approvals of, registration or
filing with, or any other action by, any Governmental Authority, except for
(i)
such as have been obtained or made and are in full force and effect (ii) filings
and recordings in respect of the Liens created pursuant to the Security
Documents and (iii) the Discretionary and Non-Discretionary Approvals required
in connection with the Construction Work, (b) will not violate any Applicable
Law or the Organizational Documents of any of Borrower Parties, (c) will not
violate or result in a default under any indenture, agreement or other
instrument binding upon any of Borrower Parties, or give rise to a right
thereunder to require any payment to be made by any of Borrower Parties, and
(d)
except for Permitted Liens and the Liens created pursuant to the Security
Documents, will not result in the creation or imposition of any Lien on any
asset of any of Borrower Parties.
8.4 Financial
Condition
.
Borrower has heretofore furnished to each of the Lenders certain financial
statements of Borrower and Guarantor Vail Resorts, Inc. All such financial
statements are complete and correct in all material respects and fairly present
the financial condition of Borrower and Guarantor Vail Resorts, Inc. as of
the
dates of such financial statements, all in accordance with GAAP. Neither
Borrower or Guarantor Vail Resorts, Inc. has on the date hereof any
Indebtedness, material contingent liabilities, liabilities for taxes, unusual
forward or long-term commitments or unrealized or anticipated losses from any
unfavorable commitments of a type required to be disclosed in said financial
statements in accordance with GAAP, except as referred to or reflected or
provided for in said balance sheets as at said dates. Since the applicable
dates
of such financial statements, there has been no event that would have a Material
Adverse Effect.
8.5 Litigation
.
Except
as disclosed in Schedule
8.5
hereto,
(a) there are no legal or arbitral proceedings, or any proceedings by or before
any Governmental Authority or agency, now pending or (to the Knowledge of
Borrower) threatened against Borrower or the Project which could reasonably
be
expected to have a Material Adverse Effect.
8.6 ERISA
.
Borrower has not established any Plan which would cause Borrower to be subject
to ERISA and none of Borrower's assets constitutes or will constitute "plan
assets" of one or more Plans. No ERISA Event has occurred or is reasonably
expected to occur that, when taken together with all other such ERISA Events
for
which liability is reasonably expected to occur, could reasonably be expected
to
result in a Material Adverse Effect. Each Plan, and, to the Knowledge of
Borrower Parties, each, Multiemployer Plan, is in compliance with, the
applicable provisions of ERISA, the Code and any other Applicable Law.
8.7 Taxes
.
Each of
Borrower Parties has timely filed or timely caused to be filed all Tax returns
and reports required to have been filed and has paid or caused to be paid all
Taxes required to have been paid by it, except (a) Taxes that are being
contested in good faith by appropriate proceedings and for which such Borrower
Party has set aside on its books adequate reserves in accordance with GAAP
or
(b) to the extent that the failure to do so could not reasonably be expected
to
result in a Material Adverse Effect.
8.8 Investment
and Holding Company Status
.
None of
Borrower Parties is (a) an "investment company" as defined in, or subject to
regulation under, the Investment Company Act of 1940 or (b) a "holding company,"
or an "affiliate" of a "holding company" or a "subsidiary company" of a "holding
company," as defined in, or subject to regulation under, the Public Utility
Holding Company Act of 1935.
8.9 Environmental
Matters
.
Except
for matters set forth in the Environmental Reports:
(a) To
Borrower's Knowledge, Borrower and the Project are in compliance with all
applicable Environmental Laws except where the failure to comply with such
laws
is not reasonably likely to result in a Material Adverse Environmental Effect
and there are no underground storage tanks at the Project. The term "Material
Adverse Environmental Effect" is defined herein as (i) any violation of
Environmental Laws, (ii) any Environmental Claim or penalty arising under
Environmental Laws, or (iii) any Release of Hazardous Substances; resulting
in
Environmental Losses of Five Hundred Thousand and No/100 Dollars ($500,000.00)
or more.
(b) To
Borrower's Knowledge, there is no Environmental Claim pending or Environmental
Claim threatened, and no penalties arising under Environmental Laws have been
assessed, against Borrower, the Project or against any Person whose liability
for any Environmental Claim Borrower has or may have retained or assumed either
contractually or by operation of law, and no investigation or review is pending
or, to the Knowledge of Borrower, threatened by any Governmental Authority,
with
respect to any alleged failure by Borrower or the Project to have any
environmental, health or safety permit, license or other authorization required
under, or to otherwise comply with, any Environmental Law, except where the
failure to have any such permit or comply with such Environmental Law is not
reasonably likely to result in a Material Adverse Environmental
Effect.
(c) To
Borrower's Knowledge, there have been no past, and there are no present,
Releases of any Hazardous Substance that are reasonably likely to form the
basis
of any Environmental Claim against Borrower, the Project or against any Person
whose liability for any Environmental Claim Borrower has or may have retained
or
assumed either contractually or by operation of law, which Environmental Claim
is reasonably likely to result in a Material Adverse Environmental
Effect.
(d) To
Borrower's Knowledge, there is no threat of a Release of Hazardous Substances
migrating to the Project which is reasonably likely to result in a Material
Adverse Environmental Effect.
(e) To
Borrower's Knowledge, without limiting the generality of the foregoing, there
is
not present at, on, in or under the Project, PCB-containing equipment, asbestos
or asbestos containing materials, underground storage tanks or surface
impoundments for Hazardous Substances, lead in drinking water (except in
concentrations that comply with all Environmental Laws), or lead-based
paint.
(f) No
Liens
are presently recorded with the appropriate land records under or pursuant
to
any Environmental Law with respect to the Project and no Governmental Authority
has been taking or is in the process of taking any action that could reasonably
be expected to subject the Project to Liens under any Environmental
Law.
(g)
There
have been no environmental investigations, studies, audits, reviews or other
analyses conducted by or that are in the possession of Borrower in relation
to
the Project which have not been made available to the Lenders.
8.10 Organizational
Structure.
(a) Borrower
has heretofore delivered to Administrative Agent a true and complete copy of
the
Organizational Documents of each Borrower Party. The only members of Borrower
on
the date hereof are the Members. The Managing Member is the sole managing member
of the Borrower. As of the date hereof, there are no outstanding Equity Rights
with respect to Borrower or the Managing Member.
(b) The
sole
Managing Member of Borrower on the date hereof is Vail Resorts Development
Company, a Colorado corporation.
(c) Schedule
8.10
contains
a true and accurate chart reflecting the ownership of all of the direct and
indirect Equity Interests in Borrower, including the percentage of ownership
interest of the Persons shown thereon.
(d) Borrower
has no Subsidiaries.
8.11 Title.
(a) Borrower
owns and has on the date hereof good, marketable and insurable fee simple title
to the Project free and clear of all Liens, other than Permitted Liens. Borrower
owns and has on the date hereof good and marketable title to all other portions
of the Project. There are no outstanding options to purchase or rights of first
refusal affecting the Project.
(b) Borrower
owns, or is licensed to use, all trademarks, tradenames, copyrights, patents
and
other intellectual property material to its business, and the use thereof by
Borrower does not infringe upon the rights of any other Person, except for
any
such infringements that, individually or in the aggregate, could not reasonably
be expected to result in a Material Adverse Effect.
(c) Subject
to Section 10.2,
Borrower is now and shall continue to be the sole owner of the Collateral free
from any lien, security interest or adverse claim of any kind whatsoever, except
for the Permitted Liens, liens or security interests in favor of Administrative
Agent, the interest of a lessor pursuant to a lease of personal property
approved by Administrative Agent, in Administrative Agent's sole good faith
discretion, or liens or security interests otherwise approved by Administrative
Agent in Administrative Agent's sole good faith discretion.
8.12 No
Bankruptcy Filing
.
Borrower is not contemplating either the filing of a petition by it under any
state or federal bankruptcy or insolvency laws or the liquidation of all or
a
major portion of Borrower's assets or property, and Borrower has no Knowledge
of
any Person contemplating the filing of any such petition against it.
8.13 Executive
Offices; Places of Organization
.
The
location of Borrower's and the Managing Member's principal place of business
and
chief executive office is the address set forth in Section 14.2
of this
Agreement, except to the extent changed in accordance with Section 10.7.
Borrower and the Managing Member were organized, or incorporated, as applicable,
in the State of Colorado.
8.14 Compliance;
Government Approvals
.
Borrower, the Project and Borrower's use thereof and operations thereat comply,
and upon Completion of construction of the Improvements will comply, in all
material respects with all Applicable Laws. All Government Approvals necessary
in connection with the construction and operation of the Project as contemplated
by the Loan Documents and the Project Documents and the Material Agreements,
to
be obtained by Borrower and any other Person on behalf of Borrower (to the
Knowledge of Borrower) are set forth in Schedule
8.14
hereto
and, except for those Government Approvals set forth in Part B of Schedule
8.14
hereto,
have been duly obtained, were validly issued, are in full force and effect,
are
not subject to appeal, are held in the name of Borrower and are free from
conditions or requirements, including conditions and requirements related to
employee housing, the compliance with which could reasonably be expected to
have
a Material Adverse Effect or which Borrower does not reasonably expect to be
able to satisfy. There is no proceeding pending or, to the Knowledge of
Borrower, threatened that seeks, or may reasonably be expected, to rescind,
terminate, Modify or suspend any such Government Approval. The information
set
forth in each application and other written material submitted by Borrower
to
the applicable Governmental Authority in connection with each such Government
Approval is accurate and complete in all material respects. The Government
Approvals set forth in Part B of Schedule
8.14
hereto
are required solely in connection with later stages of construction and
operation of the Improvements and are not customarily obtained until a later
stage of construction or after residential occupancy has commenced. Borrower
has
no reason to believe that any Government Approval that has not been obtained
by
Borrower, but which will be required in the future, will not be granted to
it in
due course, on or prior to the date when required and free from any condition
or
requirement compliance with which could reasonably be expected to have a
Material Adverse Effect or which Borrower does not reasonably expect to be
able
to satisfy. The Project, if constructed in accordance with the Plans and
Specifications, the Project Documents and the Material Agreements, will conform
to and comply in all material respects with all covenants, conditions,
restrictions and reservations in the Government Approvals and the Project
Documents and the Material Agreements applicable thereto and all Applicable
Laws. Borrower has no reason to believe that Administrative Agent, acting for
the benefit of the Lenders, will not be entitled, without undue expense or
delay, to the benefit of each Government Approval set forth on Schedule
8.14
hereto
upon the exercise of remedies under the Security Documents. Administrative
Agent
has received a true and complete copy of each Government Approval heretofore
obtained or made by Borrower.
8.15 Condemnation;
Casualty
.
No
Condemnation has been commenced or, to Borrower's Knowledge, is contemplated
with respect to all or any portion of the Project or for the relocation of
roadways providing access to the Project. No Casualty has occurred with respect
to the Project.
8.16 Utilities
and Public Access; No Shared Facilities
.
The
Project has adequate rights of access to public ways and is or will be served
by
adequate electric, gas, water, sewer, sanitary sewer and storm drain facilities
during both the construction and operation of the Improvements. All public
utilities necessary to the use and enjoyment of the Project as intended to
be
used and enjoyed are or will be located as set forth in the Plans and
Specifications. Telephone and communications services are, or will be, available
to the boundaries of the Land, adequate to serve the Project and not subject
to
any conditions (other than normal charges to the utility supplier) which would
limit the use of such utilities. All streets and easements necessary for
construction and operation of the Project are available to the boundaries of
the
Land. Except for public infrastructure improvements, or as otherwise shown
in
the Plans and Specifications or in the Development Agreement with the Town
of
Vail, there are no amenities, services or facilities (including those for
access, parking, recreational activities and otherwise) not located or to be
constructed upon the Project which are necessary to the use or enjoyment of,
or
intended to benefit the owner or occupants of, the Improvements.
8.17 Solvency
.
On the
Closing Date and after and giving effect to the Loans occurring on the Closing
Date, and the disbursement of the proceeds of such Loans pursuant to Borrower's
instructions, each Borrower Party is and will be Solvent.
8.18 Governmental
Regulations
.
Borrower is not a "foreign person" within the meaning of Section 1445(f)(3)
of
the Internal Revenue Code of 1986, as amended from time to time. No part of
the
proceeds of the Loan made hereunder will be used for "purchasing" or "carrying"
"margin stock" as so defined or for any purpose which violates, or which would
be inconsistent with, the provisions of the Regulations of the Board of
Governors of the Federal Reserve System. The Loan is an exempt transaction
under
the Truth-in-Lending Act (15 U.S.C.A. Sections 1601, et seq.).
8.19 No
Joint Assessment; Separate Lots
.
Borrower has not suffered, permitted or initiated the joint assessment of the
Project with any other real property constituting a separate tax
lot.
8.20 Security
Documents and Liens
.
The
Security Documents upon recording with the County Recorder of Eagle County,
will
create, as security for the Obligations, valid and enforceable, exclusive,
perfected first priority security interests in and Liens on all of the
respective collateral intended to be covered thereunder, in favor of
Administrative Agent as administrative agent for the ratable benefit of the
Lenders, subject to no Liens other than the Permitted Liens, except as
enforceability may be limited by applicable insolvency, bankruptcy or other
laws
affecting creditors rights generally, or general principles of equity, whether
such enforceability is considered in a proceeding in equity or at law. Such
security interests in and Liens on such collateral shall be superior to and
prior to the rights of all third parties in such collateral except as set forth
in the Permitted Liens, and, other than in connection with any future change
in
Borrower's name or the location in which Borrower is organized or registered,
no
further recordings or filings are or will be required in connection with the
creation, perfection or enforcement of such security interests and Liens, other
than the filing of continuation statements in accordance with applicable law.
Upon filing with the Secretary of State of Colorado and recording with the
County Recorder of Eagle County of a Uniform Commercial Code financing statement
describing the Collateral covered by any Security Document that is governed
by
the Uniform Commercial Code (or irrevocably delivered to a title agent for
such
filing), such filing will perfect a valid first priority security interest
with
respect to the rights and property that are the subject of such Security
Document to the extent a security interest in such Collateral can be perfected
by filing a financing statement and subject to the Permitted Liens. Any
agreement, executed with respect to the Project or any part thereof are and
shall be subject and subordinate to the Security Instrument except as set forth
in the Permitted Liens.
8.21 Project
Documents
.
Borrower has heretofore delivered to Administrative Agent a true and complete
copy of each Project Document and, subject to the terms of Section 10.12,
none of
the Project Documents has been further amended, modified or terminated. The
Project Documents are in full force and effect and Borrower is not in default
under or with respect to any material provisions of any Project Document. To
the
Borrower's Knowledge, no other party to a Project Document is in default under
any material covenant or obligation set forth therein.
8.22 Material
Agreements
.
Borrower has heretofore delivered to Administrative Agent a true, correct and
complete copy of each Material Agreement, and the Material Agreements, together
with matters appearing in the Official Records and other agreements delivered
to
Administrative Agent prior to the date hereof, constitute all of the agreements
to which Borrower (or any predecessor-in-interest to Borrower) is a party that
materially affects or relates to the ownership or operation of the Project.
Subject to the terms of Section 10.12,
none of
the Material Agreement has been further Modified. The Material Agreements are
in
full force and effect and Borrower is not in default beyond any applicable
notice or cure periods under or with respect to any material provisions of
any
Material Agreement. To Borrower's Knowledge, as of the date hereof, except
as
set forth herein, no other party to a Material Agreement is in default under
any
material covenant or obligation set forth therein.
8.23 Project
Budget
.
The
amounts and allocations set forth in the Project Budget (including the Hard
Costs and Soft Costs), as each may be amended in accordance with the terms
of
this Agreement, present a full, complete and good faith representation of all
costs, expenses and fees required to acquire and develop the Project and for
Completion of the Construction Work. Borrower is unaware of any other such
costs, expenses or fees which are material and are not covered by the Project
Budget.
8.24 Insurance
.
Borrower has in force, and has paid the Insurance Premiums in respect of, all
of
the insurance required by Section 9.5.
8.25 Flood
Zone
.
Except
as shown on the Survey, no portion of the Improvements is located in a flood
hazard area as designated by the Federal Emergency Management Agency or, if
in
the flood zone, flood insurance is maintained therefor in full compliance with
the provisions of Section 9.5.
8.26 Boundaries
.
Except
as may be disclosed on the Survey and in the Title Policy or as set forth in
the
Plans and Specifications (with respect to which easements are in effect), none
of the Improvements are outside the boundaries of the Project (or building
restriction or setback lines applicable thereto) and no improvements on
adjoining properties encroach upon the Land and no easements or other
encumbrances upon the Land encroach upon any of the Improvements so as to
adversely effect the value or marketability of the Project.
8.27 Illegal
Activity
.
No
portion of the Project has been purchased with proceeds of any illegal activity
and no part of the proceeds of the Loans will be used in connection with any
illegal activity.
8.28 Permitted
Liens
.
None of
the Permitted Liens individually or in the aggregate, materially interferes
with
the benefits of the security intended to be provided by the Loan Documents,
materially and adversely affects the value of the Project, impairs the use
or
the operation of the Project or impairs Borrower's ability to pay its
obligations in a timely manner.
8.29 Anti-Terrorism
Laws.
(a) None
of
Borrower or, to Borrower's Knowledge, its Affiliates is in violation of any
Anti-Terrorism Laws.
(b) None
of
Borrower or, to Borrower's Knowledge, any of its Affiliates, or any of its
brokers or other agents acting or benefiting in any capacity in connection
with
the Loan is any of the following: (i) a person or entity that is listed in
the
Annex to, or is otherwise subject to the provisions of, the Anti-Terrorism
Order; (ii) a person or entity owned or controlled by, or acting for or on
behalf of, any person or entity that is listed in the Annex to, or is otherwise
subject to the provisions of, the Anti-Terrorism Order; (iii) a person or entity
with whom any Lender is prohibited from dealing or otherwise engaging in any
transaction by any Anti-Terrorism Law; (iv) a person or entity who commits,
threatens or conspires to commit or supports "terrorism" as defined in the
Anti-Terrorism Order; or (v) a person or entity that is named as a "specially
designated national and blocked person" on the most current list published
by
the U.S. Treasury Department Office of Foreign Asset Control at its official
website or any replacement website or other replacement official publication
of
such list.
(c) None
of
Borrower or, to Borrower's Knowledge, any of its Affiliates or any of its
brokers or other agents acting in any capacity in connection with the Loan
(i)
conducts any business or engages in making or receiving any contribution of
funds, goods or services to or for the benefit of any Person described in
Section 8.29(b)
above,
(ii) deals in, or otherwise engages in any transaction relating to, any property
or interests in property blocked pursuant to the Anti-Terrorism Order, or (iii)
engages in or conspires to engage in any transaction that evades or avoids,
or
has the purpose of evading or avoiding, or attempts to violate, any of the
prohibitions set forth in any Anti-Terrorism Law.
8.30 Defaults
.
No
Event of Default exists under any of the Loan Documents.
8.31 Design
Professionals' Certificates
.
To
Borrower's Knowledge, the certifications set forth in the certificates of the
Design Professionals which Borrower has furnished to Administrative Agent in
connection herewith are true and correct in all material respects.
8.32 Other
Representations
.
All of
the representations in the other Loan Documents by Borrower and its Affiliates
are true and correct in all material respects as of the date
hereof.
8.33 Loan
In Balance
.
The
Loan is In Balance.
8.34 Employee
Benefit Plans
.
Borrower maintains no pension, retirement or profit sharing employee benefit
plan that is subject to any provision of ERISA. Borrower has no
employees.
8.35 No
Construction
.
No
construction, other than site development work and construction previously
disclosed to Administrative Agent, has commenced on the Land.
8.36 Appraisal
.
Borrower is not aware of any facts or circumstances of any nature which make,
or
are likely in the future to make, the Appraisal of the Project inaccurate in
any
material respect.
8.37 Labor
Controversies
.
To
Borrower's knowledge there are no labor controversies pending or threatened
against Borrower with respect to the Project or any construction contractor
involved in the construction of the Improvements which have not been disclosed
in writing to the Administrative Agent or the Lenders and would not reasonably
be expected to constitute or result in a Material Adverse Effect.
8.38 Insider
.
Neither
Borrower nor any Affiliate of Borrower (which shall not include any member
of
Borrower which is not deemed to have "control" of Borrower respectively, as
the
term "control" is defined in 12 U.S.C. §375b(9)(B) or in regulations promulgated
pursuant thereto) nor any other Person having "control" (as so defined) of
Borrower is, or is a "related interest" of, an "executive officer," "director,"
or Person who "directly or indirectly, or acting through or in concert with
one
or more persons, owns, controls, or has the power to vote more than 10 percent
of any class of voting securities" or other "insider" (as those terms are
defined in 12 U.S.C. §375b or in regulations promulgated pursuant thereto) of
any Lender, of a bank holding company of which any Lender is a subsidiary,
or of
any subsidiary of a bank holding company of which any Lender is a subsidiary,
or
of any bank at which any Lender maintains a correspondent account, or of any
bank which maintains a correspondent account with any Lender.
8.39 True
and Complete Disclosure
.
To
Borrower's Knowledge, the information, reports, financial statements, exhibits
and schedules furnished in writing by or on behalf of Borrower Parties to
Administrative Agent or any Lender in connection with the negotiation,
preparation or delivery of this Agreement and the other Loan Documents or
included herein or therein, when taken as a whole do not contain any untrue
statement of material fact or omit to state any material fact necessary to
make
the statements herein or therein under the circumstances made, not misleading.
All written information furnished after the date hereof by any Borrower Party
to
Administrative Agent and the Lenders in connection with this Agreement and
the
other Loan Documents and the Transactions will be true, complete and accurate
in
every material respect, or (in the case of projections) based on reasonable
estimates, on the date as of which such information is stated or
certified.
8.40 Survival
of Representations
.
Each
Request for Loan Advance shall constitute an affirmation that the
representations and warranties of Article
VIII
remain
true and correct in all material respects as of the date of such Request for
Loan Advance and will be so on the date of disbursement of the requested Loan,
except with respect to (a) matters which have been disclosed in writing to
and
approved by Administrative Agent (subject, however, to the terms of this
Agreement) or (b) liens of mechanics and materialmen and matters addressed
in
Section 8.5,
would
not, if adversely decided, be reasonably expected to have a Material Adverse
Effect.
ARTICLE
IX
AFFIRMATIVE
COVENANTS OF BORROWER
Borrower
covenants and agrees with the Lenders and Administrative Agent that, so long
as
any Commitment or Loan is outstanding and until payment in full of all amounts
payable (other than contingent indemnification obligations) by Borrower
hereunder:
9.1 Information
.
Borrower shall deliver to Administrative Agent:
(a) within
one hundred twenty (120) days after the close of each fiscal year of Borrower,
Borrower prepared annual financial statements, in form reasonably satisfactory
to Administrative Agent and certified by Borrower as being true and correct
in
all material respects, including a balance sheet, a statement of cash flows
and
a statement of profit and loss setting forth in comparative form figures for
the
preceding fiscal year, prepared in accordance with GAAP;
(b) not
later
than ten (10) days after the close of any month during which a Qualified
Purchase Contract has been modified, amended, replaced or terminated, a sales
report detailing the sales of Units in the Residential Component and including
gross and net sales proceeds to date, Units under contract and expected closing
dates and remaining Unit inventory for the Project for the most recent
month;
(c) not
later
than ten (10) days after the close of any month, commencing with the first
month
following the close of the Loan, a monthly Club Membership sales report
indicating the number and dollar value of Full Memberships and Social
Memberships sold and the number of and dollar value of the remaining Club
Memberships to be sold. In addition, said report will track Full Membership
deposits and Social Membership deposits received;
(d) commencing
with the first month following Completion and initial occupancy of each of
the
Club Component and Retail/Resort Services Component, monthly operating
statement, and rent rolls, as appropriate, not later than 10 days following
the
end of each month;
(e) at
the
time of the delivery of each of the financial statements provided for in
Sections 9.1(a),
9.1(b),
and
9.1(c),
a
certificate of an Authorized Officer of Borrower or its Managing Member, as
applicable, certifying that (i) such respective financial statements and reports
as being true, correct, and accurate and (ii) that such officer has no knowledge
(after due inquiry), except as specifically stated, of any Default or if a
Default has occurred, specifying the nature thereof in reasonable detail and
the
action which Borrower is taking or proposes to take with respect
thereto;
(f) within
one hundred twenty (120) days after the close of each fiscal year of Guarantor
Vail Resorts, Inc., audited annual financial statements of Vail Resorts, Inc.,
including a balance sheet, a statement of cash flows, and a statement of profit
and loss setting forth, in comparative form, figures for the preceding fiscal
year, prepared in accordance with GAAP;
(g) within
forty-five (45) days after the close of each fiscal quarter of Vail Resorts,
Inc., quarterly financial statements of Guarantor Vail Resorts, Inc., in a
form
consistent with the financial statements previously provided to Administrative
Agent by Vail Resorts, Inc., certified as true and correct by an authorized
officer of Vail Resorts, Inc., and containing a balance sheet, statement of
cash
flows and a statement of profit and loss;
(h) within
five (5) days after furnishing to the Lenders under The Vail Corporation's
Principal Bank Credit Facility, a copy of the compliance certificate required
thereunder; and
(i) from
time
to time such other information regarding the financial condition, operations,
business or prospects of Borrower, the Project and/or the other Borrower Parties
as Administrative Agent may reasonably request.
9.2 Notices
of Material Events
.
Borrower shall give to Administrative Agent prompt written notice of the
following:
(a) the
occurrence of any Default or Event of Default, including a description of the
same in reasonable detail;
(b) the
commencement (or threatened commencement) of any legal or arbitral proceedings,
and of all proceedings, other than any proceeding in connection with Anticipated
Encumbrances, by or before any Governmental Authority, and any material
development in respect of such legal or other proceedings, affecting any of
Borrower, the Project, or any Material Agreement;
(c) promptly
after Borrower knows or has reason to believe that any material default by
any
other party has occurred under any Project Document or any Material Agreement
(other than a Qualified Purchase Contract), a notice of such
default;
(d) notice
of
any threatened Condemnation, or the occurrence of any Casualty; and
(e) any
other
development that results in, or could reasonably be expected to result in,
a
Material Adverse Effect.
9.3 Existence,
Etc.
Borrower
will, and will cause each other Borrower Party to, preserve and maintain its
legal existence and all material rights, privileges, licenses and franchises
necessary for the maintenance of its existence and the conduct of its
affairs.
9.4 Compliance
with Laws; Adverse Regulatory Changes.
(a) Borrower
shall comply in all material respects (subject to such more stringent
requirements as may be set forth elsewhere herein) with all Applicable Laws.
Borrower shall maintain in full force and effect all Government Approvals and
shall from time to time obtain all Government Approvals as shall now or
hereafter be necessary under Applicable Law in connection with the construction,
operation or maintenance of the Project or the execution, delivery and
performance by Borrower of any of the Project Documents to which it is a party
and shall comply with all such Government Approvals and keep them in full force
and effect. Borrower shall promptly furnish a true and complete copy of each
such Government Approval obtained after the date hereof to Construction
Consultant.
(b) After
prior notice to Administrative Agent, Borrower, at its own expense, may contest
by appropriate legal proceedings promptly initiated and conducted in good faith
and with due diligence, the validity or application of any Applicable Law;
provided that: (i) no Event of Default or monetary Default of which
Administrative Agent has given Borrower notice exists; (ii) Borrower shall
pay
any outstanding fines, penalties or other payments under protest unless such
proceeding shall suspend the collection of such items; (iii) such proceeding
shall be permitted under and be conducted in accordance with the provisions
of
any other instrument to which Borrower or the Project is subject and shall
not
constitute a default thereunder; (iv) no part of or interest in the Project
will
be in imminent danger of being sold, forfeited, terminated, canceled or lost
during the pendency of the proceeding; (v) such proceeding shall not subject
Borrower, Administrative Agent or any Lender to criminal or civil liability
(other than civil liability as to which adequate security has been provided
pursuant to clause (vi) below); (vi) unless paid under protest, Borrower shall
have furnished such security as may be required in the proceeding, or as may
be
reasonably requested by Administrative Agent, to insure the payment of any
such
items, together with all interest and penalties thereon, which shall not be
less
than 110% of the maximum liability of Borrower as reasonably determined by
Administrative Agent, which security shall be deposited in a Controlled Account;
and (vii) Borrower shall promptly upon final determination thereof pay the
amount of such items, together with all costs, interest and
penalties.
9.5 Insurance.
(a) Borrower
shall at all applicable times obtain and maintain, at Borrower's expense, for
the benefit of Borrower, Administrative Agent and the Lenders, the insurance
listed on Schedule 9.5.
(b) Such
insurance shall be obtained under valid and enforceable policies (individually,
a "Policy"
and,
collectively, the "Policies")
written by financially responsible companies (i) authorized to issue such
insurance in the State of Colorado, (ii) having a Best's Rating of not less
than
A-IX and (iii) otherwise satisfactory to Administrative Agent.
(c) If
any
such Insurance Proceeds required to be paid to Administrative Agent are instead
made payable to Borrower, Borrower hereby appoints Administrative Agent as
its
attorney-in-fact, irrevocably and coupled with an interest, to endorse and/or
transfer any such payment to Administrative Agent (on behalf of the
Lenders).
(d) Borrower
shall deliver to Administrative Agent on or before the Closing Date valid
evidence (i.e., Policies and/or certificates of insurance) acceptable to
Administrative Agent of the Policies required by this Agreement or any other
Loan Document establishing (i) the issuance of such policies, (ii) that the
payment of all premiums (collectively, the "Insurance
Premiums")
payable for the period are current and (iii) coverage which meets all of the
insurance requirements set forth in this Agreement.
(e) Not
less
than thirty (30) days prior to the expiration, termination or cancellation
of
any Policy which Borrower is required to maintain hereunder, Borrower shall
obtain a replacement or renewal Policy or Policies (or a binding commitment
for
such replacement or renewal Policy or Policies) meeting the requirements of
this
Agreement, which shall be effective no later than the date of the expiration,
termination or cancellation of the previous Policy, and shall deliver to
Administrative Agent (i) a valid binder in respect of such Policy or Policies
in
the same form and containing the same information as the expiring Policy or
Policies required to be delivered by Borrower and (ii) evidence that the payment
of all Insurance Premiums then due to the applicable insurer are
current.
(f) Without
limiting the obligations of Borrower under the foregoing provisions of this
Section 9.5,
if
Borrower shall fail to maintain in full force and effect insurance as required
by the foregoing provisions of this Section 9.5,
then
Administrative Agent may, but shall have no obligation so to do, procure
insurance covering the interests of the Lenders and Administrative Agent in
such
amounts and against such risks as Administrative Agent (or the Required Lenders)
shall deem reasonably appropriate and in accordance with the requirements
hereof, and Borrower shall reimburse Administrative Agent in respect of any
Insurance Premiums paid by Administrative Agent in respect thereof.
(g) In
the
event of foreclosure of the Security Instrument or other transfer of title
or
assignment of the Project in extinguishment, in whole or in part, of the Loans,
all right, title and interest of Borrower in and to all Policies of insurance
required hereunder except the right to proceeds of such policies relating to
events occurring prior to such transfer of title, shall inure to the benefit
of
and pass to the successor in interest to Administrative Agent and the Lenders
or
the purchaser or grantee of the Project.
(h) Notwithstanding
the foregoing, Administrative Agent may require Borrower to obtain additional
insurance coverages and amounts, provided that such additional insurance is
then
customarily required by other lenders for properties similar to the Project,
as
reasonably determined by Administrative Agent.
9.6 Real
Estate Taxes and Other Charges.
(a) Subject
to the provisions of Section 9.6(b)
of this
Section 9.6
and
Section 9.12,
Borrower shall pay all Real Estate Taxes and Other Charges now or hereafter
levied or assessed or imposed against the Project or any part thereof before
fine, penalty, interest or cost attaches thereto. Subject to the provisions
of
Section 9.6(b)
of this
Section 9.6,
Borrower shall furnish to Administrative Agent receipts for the payment of
Real
Estate Taxes and Other Charges prior to the date the same shall become
delinquent; provided,
however,
that
Borrower is not required to furnish such receipts for payment of Real Estate
Taxes if Administrative Agent is paying the same pursuant to the reserves
established under Section 9.12.
(b) After
prior written notice to Administrative Agent, Borrower, at its own expense,
may
contest by appropriate legal proceeding, promptly initiated and conducted in
good faith and with due diligence, the amount or validity or application in
whole or in part of any Real Estate Taxes and Other Charges, provided that:
(i)
no Default and no Event of Default exists; (ii) Borrower shall pay the Real
Estate Taxes and Other Charges under protest unless such proceeding shall
suspend the collection of the Real Estate Taxes and Other Charges; (iii) such
proceeding shall be permitted under and be conducted in accordance with the
provisions of any other instrument to which Borrower or the Project is subject
and shall not constitute a default thereunder; (iv) such proceeding shall be
conducted in accordance with all applicable statutes, laws and ordinances;
(v)
neither the Project nor any part thereof or interest therein will, in the
reasonable opinion of Administrative Agent, be in danger of being sold,
forfeited, terminated, cancelled or lost during the pendency of the proceeding;
(vi) Borrower shall have furnished such security as may be required in the
proceeding, or as may be reasonably requested by Administrative Agent (but
in no
event less than 110% of the Real Estate Taxes or Other Charges being contested),
to insure the payment of any such Real Estate Taxes and Other Charges, together
with all interest and penalties thereon; and (vii) Borrower shall promptly
upon
final determination thereof pay the amount of such Real Estate Taxes or Other
Charges, together with all costs, interest and penalties.
9.7 Further
Assurances
.
Borrower will, and will cause each of the other Borrower Parties to promptly,
upon request by Administrative Agent, execute any and all further documents,
agreements and instruments, and take all such further actions which may be
required under any applicable law, or which Administrative Agent may reasonably
request, to effectuate the Transactions, all at the expense of Borrower.
Borrower, at its sole cost and expense, shall take or cause to be taken all
action reasonably required or requested by Administrative Agent to maintain
and
preserve the Liens of the Security Documents and the priority thereof Borrower
shall from time to time execute or cause to be executed any and all further
instruments (including financing statements, continuation statements and similar
statements with respect to any of the Security Documents), and register and
record such instruments in all public and other offices, and shall take all
such
further actions, as may be necessary or requested by Administrative Agent for
such purposes, including timely filing or refiling all continuations and any
assignments of any such financing statements, as appropriate, in the appropriate
filing offices.
9.8 Performance
of Project Documents, Material Agreements, and Easements.
(a) Borrower
shall (i) perform and observe in all material respects all of its covenants
and
agreements contained in any of the Project Documents and Material Agreements
to
which it is a party, including the application (to the extent required under
this Agreement) of any funds to Project Costs received by Borrower from any
party pursuant to any such Material Agreement, (ii) take all reasonable and
necessary action to prevent the termination of any such Project Document or
Material Agreement (other than a Qualified Purchase Contract) in accordance
with
the terms thereof or otherwise, (iii) enforce each material covenant or
obligation of each such Project Document and Material Agreement in accordance
with its terms, (iv) promptly give Administrative Agent copies of any default
or
other material notices given by or on behalf of Borrower received by or on
behalf of Borrower from any other Person under the Project Documents or the
Material Agreements, and (v) take all such action to achieve the purposes
described in clauses (i), (ii) and (iii) of this Section 9.8
as may
from time to time be reasonably requested by Administrative Agent; provided,
however,
that
Borrower shall be permitted, upon Administrative Agent's reasonable approval,
to
contest the validity or applicability of any requirement under the Project
Documents or any Material Agreement.
(b) Borrower
will comply with all restrictive covenants and easements affecting the Project
(unless the Title Company has insured against the enforcement of same in the
Title Policy). All covenants, easements, cross easements or operating agreements
which may hereafter be acquired, entered into or amended by Borrower affecting
the Project (it being understood that Borrower will use commercially reasonable
efforts to procure such of the foregoing items as Administrative Agent may
reasonably deem appropriate) shall be submitted to Administrative Agent for
Administrative Agent's approval, which shall not be unreasonably withheld or
delayed, prior to the execution thereof by Borrower, accompanied by a drawing
or
survey showing the location thereof.
9.9 Performance
of the Loan Documents
.
Borrower shall observe, perform and satisfy all the terms, provisions, covenants
and conditions required to be observed, performed or satisfied by it under
the
Loan Documents, and shall pay when due all costs, fees and expenses required
to
be paid by it under the Loan Documents.
9.10 Books
and Records; Inspection Rights
.
Borrower will, and will cause each of the other Borrower Parties to, keep proper
books of record and account in which full, true, complete and correct entries
are made of all dealings and transactions in relation to its business and
activities. Borrower will, and will cause each of the other Borrower Parties
to,
permit any representatives designated by Administrative Agent or any Lender,
upon reasonable prior notice, to visit and inspect its properties, to examine
and make extracts from its books and records relating to the Project and the
overall financial condition of such parties, and to discuss its affairs,
finances and condition with its officers and independent accountants, all at
such reasonable times and as often as reasonably requested.
9.11 Environmental
Compliance.
(a) Environmental
Covenants.
Borrower covenants and agrees that: (i) all uses and operations on or off the
Project by Borrower shall be in compliance with all Environmental Laws and
permits issued pursuant thereto (and that Borrower will use commercially
reasonable efforts to cause any other Person who uses the Project to do so
in
compliance with all Environmental Laws and permits issued pursuant thereto),
except where the failure to comply with such laws and permits is not reasonably
likely to result in a Material Adverse Environmental Effect; (ii) Borrower
shall
not permit a Release of Hazardous Substances in, on, under or from the Project,
which release results in a Material Adverse Environmental Effect; (iii) Borrower
shall not permit Hazardous Substances in, on, or under the Project, except
those
that are in compliance with all Environmental Laws (i.e., materials used in
cleaning and other building operations) and matters disclosed in the
Environmental Reports; (iv) Borrower shall keep the Project free and clear
of
all liens and other encumbrances imposed pursuant to any Environmental Law,
whether due to any act or omission of Borrower or any other Person
(collectively, "Environmental
Liens");
(v)
notwithstanding clause (iii) above, Borrower shall not, or permit any other
Person to, install any asbestos or asbestos containing materials on the Project;
(vi) Borrower shall cause the Remediation of such Hazardous Substances present
on, under or emanating from the Project, or migrating onto or into the Project,
in accordance with and to the extent required by this Agreement and
Environmental Laws; (vii) Borrower shall provide Administrative Agent, the
Lenders and their representatives with access at reasonable times to all or
any
portion of the Project for purposes of inspection, provided that such
inspections shall not unreasonably interfere with the operation of the Project
or occupants thereof, and shall cooperate with Administrative Agent, the Lenders
and their representatives in connection with such inspections, including but
not
limited to providing all relevant information and making knowledgeable persons
available for interviews; and (viii) promptly deliver to Administrative Agent
copies of all required Government Approvals relating to the proper removal
of
any asbestos, any aboveground storage tank, any underground storage tank
currently existing at the Project relating to Remediation of any Release of
Hazardous Substances or evidencing compliance with violations addressed in
the
Xxxx Discharge Report.
(b) Environmental
Notices.
Borrower shall promptly provide notice to Administrative Agent of: (i) all
Environmental Claims asserted and material Environmental Claims threatened
against Borrower or the Project and any material Environmental Claims asserted
or threatened against any other party occupying the Project or any portion
thereof which become known to Borrower; (ii) the discovery by Borrower of any
occurrence or condition on the Project or on any real property adjoining or
in
the vicinity of the Project which could reasonably be expected to lead to an
Environmental Claim against Borrower, Administrative Agent or any of the
Lenders; (iii) the commencement or completion of any Remediation at the Project;
and (iv) any Environmental Lien. In connection therewith, Borrower shall
transmit to Administrative Agent copies of any citations, orders, notices or
other written communications received from any Person and any notices, reports
or other written communications submitted to any Governmental Authority with
respect to the matters described above.
9.12 Reserves
.
Administrative Agent may, following and during the continuance of an Event
of
Default, at any time and from time to time, at its option (or at the direction
of the Required Lenders), to be exercised by written notice to Borrower, require
the deposit by Borrower into a Controlled Account, at the time of each payment
of an installment of interest or principal under the Notes, of additional
amounts sufficient to discharge the obligations of Borrower under Sections
9.5
and
9.6
(if
applicable, and excluding all income, franchise, single business or other taxes
imposed on Borrower unless the same is in lieu of real estate taxes) when they
become due. Simultaneously with the initial deposit under this Section
9.12,
Borrower shall deposit with Administrative Agent an amount determined by
Administrative Agent to be necessary to ensure that there will be on deposit
with Administrative Agent an amount which, when added to the monthly payments
subsequently required to be deposited with Administrative Agent hereunder on
account of Real Estate Taxes and Insurance Premiums, will result in there being
on deposit with Administrative Agent an amount sufficient to pay the next due
periodic installment of Real Estate Taxes and Insurance Premiums at least one
(1) month prior to the delinquency date thereof and the next periodic payments
of insurance premiums and ground rent at least one (1) month prior to the due
date thereof. Commencing on the first Business Day of the first calendar month
after the occurrence of an Event of Default and continuing thereafter on the
first Business Day of each month thereafter, Borrower shall pay to
Administrative Agent deposits in an amount equal to one-twelfth (1/12) of the
yearly amount of Real Estate Taxes and Insurance Premiums that will next become
due and payable on the Project. The determination of the amount to be deposited
with Administrative Agent with each installment shall be made by Administrative
Agent in its sole discretion. Such amounts shall be held by Administrative
Agent
in a Controlled Account and applied (together with any interest earned thereon)
to the payment of the obligations in respect to which such amounts were
deposited or, at the option of Administrative Agent, to the payment of said
obligations in such order or priority as Administrative Agent shall determine,
on or before the respective dates on which the same or any of them would become
delinquent. If one (1) month prior to the due date of any of the aforementioned
obligations the amounts then on deposit therefor shall be insufficient for
the
payment of such obligations in full, Borrower, within five (5) Business Days
after demand, shall deposit the amount of the deficiency Administrative Agent
into the Controlled Account. Nothing herein contained shall be deemed to affect
any right or remedy of Administrative Agent and/or the Lenders under the
provisions of this Agreement or the other Loans Documents or of any statute
or
rule of law to pay any such amount and to add the amount so paid together with
interest at the Default Rate to the indebtedness secured by the Security
Instrument. Borrower hereby pledges to and grants to Administrative Agent a
security interest in any and all monies now or hereafter deposited in such
Controlled Account as additional security for the payment of the Loans and
agrees to enter into an agreement with Administrative Agent and the bank where
such account is established substantially in the form in order to perfect
Administrative Agent's security interest therein. In making any payment from
such Controlled Account, Administrative Agent may do so according to any xxxx,
statement or estimate or procured from the appropriate public office (with
respect to Real Estate Taxes), insurer or agent (with respect to Insurance
Premiums), without inquiry into the accuracy of such xxxx, statement or estimate
or into the validity of any such charge.
9.13 Accessibility
Laws.
(a) Compliance.
Borrower will perform and comply promptly with, and cause the Project, including
any future alterations to the Project constructed by Borrower to be constructed,
maintained, used and operated in accordance with all applicable Accessibility
Laws and will maintain accurate records of all expenditures made in connection
with any alterations with respect to Accessibility Laws to the Project. Upon
the
request of Administrative Agent, and if (i) any Governmental Authority having
jurisdiction over the Project or Borrower shall issue a violation or a notice
of
violation with respect to any Accessibility Laws, (ii) required by any
applicable Accessibility Laws or (iii) Administrative Agent reasonably believes
an Accessibility Laws violation may exist at or affect the Project, Borrower
shall conduct such surveys of the Project as Administrative Agent shall
reasonably require to ascertain that the Project is in compliance with all
Accessibility Laws.
(b) Notices.
If
Borrower receives any notice that Borrower or the Project is in default under
or
is not in compliance with any Accessibility Law, or notice of any proceeding
initiated under or with respect thereto, Borrower will promptly furnish a copy
of such notice to Administrative Agent.
9.14 Use
of
Proceeds; Margin Regulations.
(a) Borrower
will use (i) the proceeds of the Loans in accordance with the Project Budget
and
(ii) the disbursements from any Deficiency Deposit for the Project
Costs.
(b) No
part
of the proceeds of the Loans will be used for the purpose of purchasing or
acquiring any "margin stock" within the meaning of Regulation U of the Board
of
Governors of the Federal Reserve System or for any other purpose which would
be
inconsistent with Regulation T, U, X or any other Regulations of such Board
of
Governors, or for any purposes prohibited by Legal Requirements.
9.15 Inspection
.
Borrower shall permit representatives of Administrative Agent, the Construction
Consultant and the Lenders, at reasonable times and on reasonable advance
notice, to examine its books of record and account, to make copies and abstracts
therefrom, and to discuss its affairs, finances and accounts with its principal
officers, engineers and independent accountants (and by this provision Borrower
authorizes said accountants to discuss with such Persons such affairs, finances
and accounts, but after prior notice to Borrower of such discussions). Without
limiting the foregoing, representatives of the Construction Consultant,
Administrative Agent and the Lenders shall have the right at reasonable times
and on reasonable advance notice to (a) inspect the Project and all materials
to
be used in connection with the construction of the Improvements from time to
time and to witness the construction thereof, (b) to examine all detailed plans
and shop drawings in connection with the construction of the Improvements and
(c) meet with the representatives of the Design Professionals, the General
Contractor and the Major Subcontractors to discuss the status and issues
relating to the construction of the Improvements (and by this provision Borrower
authorizes Borrower's Architect, the General Contractor and the Major
Subcontractors to cooperate and discuss with such Persons such construction
matters, but after reasonable prior notice to Borrower of such discussions).
Borrower shall at all times cause a complete set of the original plans (and
all
supplements thereto) relating to the construction of the Project to be
maintained at the Project or construction office and available for inspection
by
such representatives.
9.16 Project
Construction.
(a) Borrower
will prosecute or cause to be prosecuted the Construction Work in accordance
with generally accepted engineering and construction practice, the Plans and
Specifications, the Construction Schedule and Applicable Laws. Borrower will
timely commence (but in no event later than sixty (60) days after the date
hereof) the Construction Work. Borrower shall cause Completion of such
Construction Work to be accomplished by the Completion Date (other than Punch
List items that do not adversely affect the use, occupancy or operation of
the
Project and tenant improvements to rentable space in the Commercial Component
that is not yet occupied) subject to Section 14.26.
Once
begun, Borrower shall use its commercially reasonable efforts to cause the
Construction Work to be prosecuted with diligence in accordance with the
Construction Schedule so as (i) to achieve Completion of the Base Building
Work
(including the satisfaction of the Base Building Substantial Completion
Conditions) and obtain a temporary certificate of occupancy or such other
permits or approvals as may be applicable to the Base Building Work on or before
the Completion Date, free and clear of Liens or claims for Liens for materials
supplied and for labor or services performed in connection with the Base
Building Work and (ii) to achieve Completion of each portion of the Construction
Work prior to the date required pursuant to each Qualified Purchase Contract.
Borrower shall not commence the Construction Work, or any particular component
or phase thereof, until Borrower has obtained all permits, licenses and
approvals required under any Applicable Law for the commencement of the
Construction Work or such component or phase thereof, as the case may be. In
no
event will Borrower permit or suffer any party, including subcontractors, to
commence proceedings to enforce any Lien unless and to the extent that said
Lien
is fully bonded; provided that such bonding effects the removal of any such
Liens or claims.
(b) Borrower
will deliver to Administrative Agent, on demand, copies of all contracts, bills
of sale, statements, receipted vouchers and agreements under which Borrower
claims title to any materials, fixtures or articles incorporated in the
Improvements, or subject to the lien of the Security Instrument.
(c) Borrower
will, upon demand of Administrative Agent based upon the advice of the
Construction Consultant, correct any Unsatisfactory Work pursuant to Section
7.7;
and the
advance of any proceeds of any Loan shall not constitute a waiver of
Administrative Agent's right to require compliance with this covenant with
respect to any such defects or departures from the Plans and Specifications
not
theretofore discovered by or called to the attention of the Construction
Consultant. Notwithstanding the above, none of Administrative Agent, the Lenders
or the Construction Consultant shall have any affirmative duty to Borrower
or
any third party to inspect for said defects or to call them to the attention
of
Borrower or anyone else.
(d) Borrower
shall deliver to Administrative Agent and the Construction Consultant copies
of
all Major Subcontracts for Administrative Agent's approval and shall deliver
to
Construction Consultant all other subcontracts for informational purposes
entered into for the construction of the Improvements.
(e) Subject
to the provisions of Section 10.12,
Borrower shall from time to time promptly deliver to Administrative Agent and
the Construction Consultant all Change Orders, pending or executed, along with
evidence that all Government Approvals then required have been obtained,
together with any documents related thereto and a written explanation of the
reasons therefor.
(f) Administrative
Agent may (and if requested by the Required Lenders, shall) commission an
Appraisal (i) upon the satisfaction of the Base Building Substantial Completion
Conditions, (ii) at any other time if required by Applicable Law or (iii) as
may
be required to determine compliance with Section 9.22.
Such
Appraisals shall be completed at Borrower's expense and shall be prepared by
an
appraiser satisfactory to Administrative Agent, provided however, if no Event
of
Default has occurred, Borrower shall not be required to pay for any such
Appraisal more than once in any twelve (12) month period.
9.17 Proceedings
to Enjoin or Prevent Construction
.
If any
proceedings are filed seeking to enjoin or otherwise prevent or declare invalid
or unlawful all or any part of the Construction Work, Borrower, at its sole
cost
and expense, will use commercially reasonable efforts to cause such proceedings
to be vigorously contested in good faith, and in the event of an adverse ruling
or decision, use commercially reasonable efforts to prosecute all allowable
appeals therefrom, and will, without limiting the generality of the foregoing,
use commercially reasonable efforts to resist the entry or seek the stay of
any
temporary or permanent injunction that may be entered, and use its best efforts
to bring about a favorable and speedy disposition of all such
proceedings.
9.18 Administrative
Agent's, Lenders' and Construction Consultant's Actions for their Own Protection
Only
.
The
authority herein conferred upon Administrative Agent, the Lenders and/or the
Construction Consultant and any action taken by Administrative Agent, the
Lenders and/or the Construction Consultant in making inspections, procuring
sworn statements and waivers of lien, approving contracts and subcontracts
and
approving Plans and Specifications will be taken by Administrative Agent, the
Lenders and the Construction Consultant for their own protection only, and
none
of Administrative Agent, the Lenders or the Construction Consultant shall be
deemed to have assumed any responsibility to Borrower or any other party with
respect to any such action herein authorized or taken by Administrative Agent,
the Lenders or the Construction Consultant or with respect to the Construction
Work, performance of contracts or subcontracts by any contractors or
subcontractors, or prevention of claims for mechanics' liens. Any review,
investigation or inspection conducted by Administrative Agent, the Lenders,
the
Construction Consultant or any other architectural or engineering consultants
retained by Administrative Agent in order to verify independently Borrower's
satisfaction of any conditions precedent to advances under this Agreement,
Borrower's performance of any of the covenants, agreements and obligations
of
Borrower under this Agreement, or the validity of any representations and
warranties made by Borrower hereunder (regardless of whether or not the party
conducting such review, investigation or inspection should have discovered
that
any of such conditions precedent were not satisfied or that any such covenants,
agreements or obligations were not performed or that any such representations
or
warranties were not true), shall not affect (or constitute a waiver by
Administrative Agent or the Lenders of) (a) any of Borrower's representations,
warranties or obligations under this Agreement or Administrative Agent's and
the
Lenders' reliance thereon or right to require the performance thereof or (b)
Administrative Agent's or the Lenders' reliance upon any certifications of
Borrower or the Design Professionals required under this Agreement or any other
facts, information or reports furnished to Administrative Agent and/or the
Lenders by Borrower hereunder.
9.19 Sign
and Publicity
.
If
Administrative Agent requests, Borrower shall, to the extent permitted by
Applicable Law, erect a sign approved by Administrative Agent and Borrower
on
the Project in a conspicuous location indicating that the financing for the
Project has been provided by the Lenders. The cost of any such sign shall be
paid by Administrative Agent. In addition, Administrative Agent and the Lenders
shall have the right to publicize the making of the Loans notwithstanding the
provisions of Section 14.22.
9.20 On-Site
and Off-Site Materials
.
Borrower shall cause all materials supplied for or intended to be utilized
in,
the construction of the Project, but not affixed to or incorporated into the
Project, to be stored on the Project site or at such other location as may
be
approved by Administrative Agent in writing, with adequate safeguards, as
required by Administrative Agent, to prevent loss, theft, damage or commingling
with other materials or projects, such safeguards shall include: (a) prior
to
making disbursements for materials which are stored on the Project or on
property owned by an Affiliate of Borrower in the immediate vicinity of the
Project (the "Lay-Down
Yard")
and
intended to be incorporated into the Improvements pursuant to the Plans
(collectively, "On-Site
Stored Materials"),
Administrative Agent shall have received (i) invoices, bills of sale and other
documentation evidencing the amount owed for such materials, Borrower's
ownership thereof, and evidence of the release of any right, title or lien
in
respect thereof by any vendor, conditioned only upon disbursement to such vendor
of the disbursement amount requested, (ii) evidence that such materials are
covered by the insurance policies required by this Construction Loan Agreement
and are identified and protected against loss, theft and damage in a manner
acceptable to Administrative Agent and the Construction Consultant, and (iii)
evidence that advances made by the Lenders for any stored materials, whether
or
not such stored materials are stored on the Project or the Lay-Down Yard, do
not, without the prior approval of the Administrative Agent, at any one time
exceed in the aggregate Ten Million and No/100 Dollars ($10,000,000.00)
inclusive of the amount requested; (b) with respect to advances for the purchase
of certain major building materials which are ready for delivery to the Property
but are temporarily stored at off-site locations other than the Project or
property adjacent to the Project (collectively, "Off-Site
Stored Materials"),
approved by the Administrative Agent and the Construction Consultant prior
to
the delivery to the Project or incorporation into the Improvements of such
Off-Site Stored Materials; provided, however, that in the case of each such
advance, the Administrative Agent shall have received (i) invoices, bills of
sale and other documentation evidencing the amount owed for such materials,
Borrower's ownership thereof, and evidence of the release of any right, title
or
lien in respect thereof by any vendor, conditioned only upon disbursement to
such vendor of the disbursement amount requested, (ii) evidence that such
materials are covered by the insurance policies required by this Construction
Loan Agreement and are identified and protected against loss, theft and damage
in a manner acceptable to Administrative Agent and the Construction Consultant,
(iii) a written statement from the manufacturer or xxxxxx of such Off-Site
Stored Materials (or a provision in the purchase order therefor to such effect)
that Administrative Agent, the Construction Consultant and either of their
agents may fully inspect such Off-Site Stored Materials at all reasonable times,
and (iv) evidence that advances to be made by the Lenders for all Off-Site
Stored Materials do not, without the prior approval of the Administrative Agent,
exceed, at any one time Two Million and No/100 Dollars ($2,000,000.00),
inclusive of the amount requested; and (c) with respect to advances for the
purchase of certain finally assembled, fully fabricated furniture, fixtures
and
equipment, which are ready for delivery to the Project but are temporarily
stored at off-site locations other than the Project (collectively, "Off-Site
Stored Furnishings"),
approved by Administrative Agent and the Construction Consultant prior to
delivery to the Project; provided, however, that in the case of each such Loan,
the conditions contained herein have been satisfied with respect to the Off-Site
Stored Furnishings and Administrative Agent shall have received a written
statement from the manufacturer or xxxxxx of such Off-Site Stored Furnishings
(or a provision in the purchase order therefor to such effect) that
Administrative Agent, the Construction Consultant and either of their agents
may
fully inspect such Off-Site Stored Furnishings at all reasonable
times.
9.21 Minimum
Loan Coverage Ratio
.
At all
times during the term of this Agreement, Borrower shall maintain the Minimum
Loan Coverage Ratio. If at any time Borrower shall fail to maintain the Minimum
Loan Coverage Ratio, Borrower shall, within thirty (30) days after receipt
of
notice from Administrative Agent, (a) repay the Loan in an amount sufficient
to
comply with the Minimum Loan Coverage Ratio, or (b) provide evidence
satisfactory to Administrative Agent in its sole discretion, that Qualified
Purchase Contracts are in place to provide Net Sales Proceeds sufficient to
meet
the Minimum Loan Coverage Ratio.
9.22 Loan
to Value and Loan to Cost
.
At all
times during the term of this Agreement, Borrower shall maintain a Loan to
Value
Ratio of not greater than 75% and a Loan to Cost Ratio percent not greater
than
80%. If at any time Administrative Agent shall determine, based upon an
Appraisal obtained pursuant to Section 9.16(f),
that
the Loan to Value Ratio is greater than 75%, or the Loan to Cost Ratio is
greater than 80%, Borrower shall, within thirty (30) days after receipt of
Notice from Administrative Agent, repay the Loan in an amount sufficient to
comply with this Section 9.22.
9.23 Leasing.
(a) The
Administrative Agent shall be given an opportunity to review leases for rentable
space in the Commercial Component; provided, however, that Administrative
Agent's approval of such leases will not be required if such lease provides
for
rents that are at commercially reasonable rates and contain commercially
reasonable terms and conditions and are with third-party tenants unrelated
to
Borrower, or such lease is for rental of less than 2,500 square feet. In no
event may any lease contain an option to purchase. In all other cases,
Administrative Agent shall use reasonable efforts to approve or disapprove
any
proposed lease within seven (7) Business Days of receipt by Administrative
Agent
of the lease and all other information reasonably deemed necessary by
Administrative Agent in connection with approval of the lease. Failure of the
Administrative Agent to disapprove any such lease within such seven (7) Business
Day period shall be deemed to be approval of such lease. Administrative Agent
shall not unreasonably withhold its approval of any proposed lease. Without
limiting the foregoing, Administrative Agent may condition approval of any
such
proposed lease on the execution and delivery by the tenant of a subordination,
non-disturbance and attornment agreement in a form that is reasonably acceptable
to Administrative Agent.
(b) Borrower
shall use commercially reasonable efforts to deliver to Administrative Agent
within fifteen (15) Business Days following a request therefore, a
subordination, non-disturbance and attornment agreement and/or an estoppel
certificate, for the benefit of Lenders, each in form and substance reasonably
satisfactory to Administrative Agent, from such tenant or tenants as
Administrative Agent shall specify.
(c) Within
ten (10) days after the execution thereof, Borrower shall deliver to
Administrative Agent copies of all leases.
(d) Borrower
shall not amend or modify any lease requiring approval by Administrative Agent
in any material respect, or waive or release any of the material provisions
thereof.
(e) Borrower
shall at all times comply with all of the terms and conditions of the leases
and
shall not permit any violation of the terms thereof or default
thereunder.
9.24 Club
Memberships
.
Monthly, within ten (10) days after end of each month, Borrower shall deliver
to
Administrative Agent copies of all membership agreements in connection with
the
sale of Club Memberships.
ARTICLE
X
NEGATIVE
COVENANTS OF BORROWER
Borrower
covenants and agrees that, until the payment in full of the Obligations (other
than contingent indemnification obligations), it will not do or permit, directly
or indirectly, any of the following:
10.1 Fundamental
Change.
(a) Mergers;
Consolidations; Disposal of Assets.
Borrower will not merge into or consolidate with any other Person, or permit
any
other Person to merge into or consolidate with it, or sell, transfer, lease
or
otherwise dispose of (in one transaction or in a series of transactions) any
substantial part of its properties and assets whether now owned or hereafter
acquired (but excluding any sale or disposition of obsolete or excess furniture,
fixture and equipment in the ordinary course of business if same is replaced
with new furniture, fixtures and equipment of equal or greater utility or as
contemplated by the Subdivision Agreement), or wind up, liquidate or dissolve,
or enter into any agreement to do any of the foregoing.
(b) Organizational
Documents.
Without
the prior written consent of Administrative Agent, Borrower will not make any
Modification of the terms or provisions in any such Person's Organizational
Documents.
10.2 Limitation
on Liens
.
Borrower will not create, incur, assume or suffer to exist any Lien upon any
of
the Project or its interest therein, whether now owned or hereafter acquired,
except for the Permitted Liens. Borrower shall not be in Default under this
Section 10.2
if (a) a
Lien for the performance of work or the supply of materials is filed against
the
Project unless Borrower fails to discharge such Lien by payment or bonding
on or
prior to the date that is the earlier of (i) forty-five (45) days after the
date
of filing of such lien and (ii) the date on which the Project is subject to
a
levy, execution, attachment or sequestration, or (b) so long as Borrower
contests in good faith the validity or amount of any asserted lien and
diligently prosecutes or defends an action appropriate to obtain a binding
determination of the disputed matter, and in connection with such contest
provides Administrative Agent with such security as it may require in its sole
discretion to protect Administrative Agent against all loss, damage, and
expense, including reasonable attorneys' fees, which Administrative Agent might
incur if the asserted lien is determined to be valid.
10.3 Transfer;
Pledge.
(a) Except
as
expressly permitted by or pursuant to this Agreement, Borrower shall not allow
any Transfer to occur or permit any owner of the Equity Interests in Borrower
to
pledge or otherwise encumber such Equity Interests, or any of the economic
or
other benefits therefrom.
(b) Notwithstanding
anything herein to the contrary, direct and indirect Equity Interests in
Borrower shall be permitted to be transferred to Persons that are wholly-owned,
direct or indirect, subsidiaries of Vail Resorts, Inc.
(c) Borrower
acknowledges that Administrative Agent is making one or more advances under
this
Agreement in reliance on the expertise, skill and experience of Borrower; thus
the Obligations secured by the Security Documents include material elements
similar in nature to a personal service contract. In consideration of
Administrative Agent's reliance, Borrower agrees that Borrower shall not make
any Transfer if such Transfer is prohibited by this Agreement unless the
Transfer is preceded by Administrative Agent's express written consent to the
particular transaction and transferee. If any prohibited Transfer occurs,
Administrative Agent in its sole discretion may declare the Obligations to
be
immediately due and payable, and Administrative Agent may invoke any rights
and
remedies provided under Section 12.2
hereof.
Borrower acknowledges the materiality of the provisions of this Section
10.3(c)
as a
covenant of Borrower, and that such covenant was given individual weight and
consideration by Administrative Agent in entering into the Obligations secured
by the Security Documents, and that any Transfer in violation of the prohibited
transfer provisions herein set forth shall result in a material impairment
of
Administrative Agent's interest in the Obligations and be deemed a breach of
the
foregoing covenant.
(d) Notwithstanding
anything to the contrary in this Section 10.3,
except
as set forth in Section 10.3(b),
any
Change of Control or Transfer which would result in a Change of Control (in
addition to any other consents or approvals required hereunder) shall be further
subject to (i) Borrower providing prior written notice to Administrative Agent
of any such transfer, (ii) no Default or Event of Default then existing, (iii)
the proposed transferee being a corporation, partnership, joint venture,
joint-stock company, trust or individual approved in writing by each Lender
subject to a Limiting Regulation in its discretion, and (iv) payment to
Administrative Agent on behalf of the Lenders of all costs and expenses incurred
by Administrative Agent or any of the Lenders in connection with such transfer.
Each Lender at the time subject to a Limiting Regulation shall, within ten
(10)
Business Days after receiving Borrower's notice of a proposed Change of Control
or Transfer subject to this Section 10.3(b),
furnish
to Borrower a certificate (which shall be conclusive absent manifest error)
stating that it is subject to a Limiting Regulation, whereupon such Lender
shall
have the approval right contained in clause (iii) above. Each Lender which
fails
to furnish such a certificate to Borrower during such ten (10) Business Day
period shall be automatically and conclusively deemed not to be subject to
a
Limiting Regulation. If any Lender subject to a Limiting Regulation fails to
approve a proposed transferee under clause (iii) above (any such Lender being
herein called a "Rejecting
Lender"),
Borrower, upon three (3) Business Days notice, may (1) notwithstanding Section
2.2(i),
prepay
such Rejecting Lender's outstanding Loans in accordance with the provisions
for
prepayment set forth in Section 3.4,
or (2)
require that such Rejecting Lender transfer all of its right, title and interest
under this Agreement and such Rejecting Lender's Note to an Eligible Assignee
designated by Borrower that is approved by Administrative Agent provided that
such Eligible Assignee assumes all of the obligations of such Rejecting Lender
hereunder, and purchases all of such Rejecting Lender's Loans hereunder for
consideration equal to the aggregate outstanding principal amount of such
Rejecting Lender's Loans, together with interest thereon to the date of such
purchase (to the extent not paid by Borrower), and satisfactory arrangements
are
made for payment to such Rejecting Lender of all other amounts accrued and
payable hereunder to such Rejecting Lender as of the date of such transfer
(including any fees accrued hereunder and any amounts that would be payable
under Section 2.2(i)
as if
all such Rejecting Lender's Loans were prepaid in full on such date). Subject
to
the provisions of Section 14.7(b),
such
Eligible Assignee shall be a "Lender" for all purposes hereunder. Without
prejudice to the survival of any other agreement of Borrower hereunder, the
agreements of Borrower contained in Sections 5.1,
5.7,
and
14.3
shall
survive for the benefit of such Rejecting Lender with respect to the time period
prior to such replacement.
10.4 Indebtedness
.
Borrower shall not create, incur or suffer to exist, or otherwise become or
remain directly or indirectly liable with respect to, any Indebtedness except
the following:
(a) Indebtedness
Under the Loan Documents.
Indebtedness of Borrower in favor of Administrative Agent and the Lenders
pursuant to this Agreement and the other Loan Documents;
(b) Trade
Payables.
Indebtedness of Borrower with respect to trade payables and accrued expenses
incurred in the ordinary course of the business of operating and constructing
the Project, provided the same are not evidenced by a promissory note, are
paid
when due (subject to good faith disputes), and do not exceed in the aggregate
at
any one time outstanding One Million and No/100 Dollars ($1,000,000.00) or
such
greater amounts shown on the Project Budget.
10.5 Investments
.
Borrower will not make or permit to remain outstanding any Investments except
operating deposit accounts with banks.
10.6 Restricted
Payments
.
Borrower shall make no Distributions until the Notes have been paid in full;
provided, however, Distributions for repayment of sums advanced for payment
of
Project Costs shall be permitted so long as the sums advanced are in addition
to
Borrower's Initial Equity Contribution.
10.7 Change
of Organization Structure; Location of Principal Office
.
Borrower shall not change its name or change the location of its chief executive
office, state of formation or organizational structure unless, in each instance,
Borrower shall have (a) given Administrative Agent at least thirty (30) days'
prior notice thereof, (b) made all filings or recordings, and taken all other
action, necessary or desirable under Applicable Law to protect and continue
the
priority of the Liens created by the Security Documents, (c) if reasonably
requested by Administrative Agent, delivered to Administrative Agent an opinion
of counsel reasonably satisfactory to Administrative Agent covering the matters
referred to in clause (b) above, and (d) if reasonably requested by
Administrative Agent, caused the Title Company to issue an endorsement to the
Title Policy reflecting such change and indicating that there has been no change
in the state of title to the Project as a result of such change.
10.8 Transactions
with Affiliates
.
Except
for transactions with Xxxxxx, Xxxxx and Xxxxxxxx, payments of project management
fees or reimbursable expenses to Vail Resorts Development Company as provided
in
the Project Budget, and construction of the Spa Project for Lodge Properties
Inc., or as expressly permitted by this Agreement, Borrower shall not enter
into, or be a party to, any transaction with an Affiliate of Borrower, except
in
the ordinary course of business and on terms which are fully disclosed to
Administrative Agent, and are no less favorable to Borrower than would be
obtained in a comparable arm's length transaction with an unrelated third
party.
10.9 No
Joint Assessment; Separate Lots
.
Borrower shall not suffer, permit or initiate the joint assessment of the
Project with any other real property constituting a separate tax
lot.
10.10 Zoning
.
Borrower shall not, without Administrative Agent's reasonably prior written
consent, seek, make, suffer, consent to or acquiesce in any change or variance
in any zoning or land use laws or other conditions of use of the Project or
any
portion thereof. Borrower shall not use or permit the use of any portion of
the
Project in any manner that could reasonably be expected to result in such use
becoming a non-conforming use under any zoning or land use law or any other
applicable law or Modify any agreements relating to zoning or land use matters
or with the joinder or merger of lots for zoning, land use or other purposes,
without the prior written consent of Administrative Agent. Without limiting
the
foregoing, in no event shall Borrower take any action that would reduce or
impair either (a) the number of parking spaces at the Improvements required
by
Applicable Law or (b) access to the Project from adjacent public
roads.
10.11 ERISA
.
Borrower shall not shall not take any action, or omit to take any action, which
would (a) cause Borrower's assets to constitute "plan assets" for purposes
of
ERISA or the Code or (b) cause the Transactions to be a nonexempt prohibited
transaction (as such term is defined in Section 4975 of the Code or Section
406
of ERISA) that could subject Administrative Agent and/or the Lenders, on account
of any Loan or execution of the Loan Documents hereunder, to any tax or penalty
on prohibited transactions imposed under Section 4975 of the Code or Section
502(i) of ERISA.
10.12 Amendment
of Contracts and Government Approvals
.
Borrower shall not, without Administrative Agent's prior consent (which shall
not be unreasonably withheld or delayed, except with respect to clause (b)
below
and to the extent otherwise provided in this Section 10.12),
(a)
take any action to cancel or terminate any Project Document, any Material
Agreement other than a Qualified Purchase Contract, or any Government Approval
to which it is a party; (b) sell, assign, pledge, transfer, mortgage,
hypothecate or otherwise dispose of (by operation of law or otherwise) or
encumber any part of its interest in such Project Documents, Material Agreements
or Government Approvals; (c) waive any material default under or breach of
any
material provisions of any such Project Document, Material Agreement or
Government Approval or waive, fail to enforce, forgive or release any material
right, interest or entitlement, howsoever arising, under or in respect of any
material provisions of any such Project Document, Material Agreement or
Government Approval or vary or agree to the variation in any material way of
any
material provisions of any such Project Document, Material Agreement or
Government Approval or of the performance of any other Person under any such
Project Document, Material Agreement or Government Approval; (d) Modify any
material provision of, or give any material consent under, any such Project
Document (including, without limitation, the Plans and Specifications, the
Construction Schedule, the General Contract and any Major Subcontract), Material
Agreement or Government Approval, including, without limitation, any
Modification which, subject to Purchaser Upgrades and Borrower's right to make
Change Orders pursuant to the provisions of Section 10.13
below,
would materially increase the Project Budget (including, without limitation,
any
Project Budget Line-Item); (e) petition, request or take any other legal or
administrative action that seeks, or may reasonably be expected, to rescind,
terminate or suspend any such Project Document, Material Agreement or Government
Approval or amend or modify all or any material part thereof; or (f) enter
into,
or permit the General Contractor to enter into any new Major
Subcontract.
10.13 Change
Orders; Purchaser Upgrades.
(a) Borrower
shall not agree to or request any Change Order without Administrative Agent's
and Construction Consultant's reasonable prior written consent except as
specifically set forth in this Section 10.13.
Each
request for a Change Order shall be accompanied by appropriate supporting
documents and shall be processed by the Administrative Agent within eight (8)
Business Days of receipt of such a request except as otherwise provided in
Section 10.13(d)
and
Section 13.9(b)(ii)(5).
(b) In
addition to the rights under Section 10.12
to make
non-material changes, Borrower may make changes to the Plans and Specifications
without obtaining Administrative Agent's or Construction Consultant's consent
pursuant to a Purchaser Upgrade or a Change Order if (i) Borrower obtains the
approval of all parties whose approval is required, including, without
limitation, any consent or approval required from the General Contractor,
subcontractors, sureties and Governmental Authorities; (ii) the structural
integrity of the Improvements is not impaired; (iii) no substantial change
in
architectural appearance is effected and the salable and rentable square footage
is not materially reduced; (iv) the performance of the mechanical, electrical
and life safety systems of the Improvements is not materially adversely affected
and are in conformance with Applicable Laws; (v) the Government Approvals will
not be revoked, rescinded or otherwise invalidated as a result of any such
change or an aggregate of such changes; and (vi) in the case of Change Orders,
(1) no Event of Default has occurred and is continuing, (2) Borrower notifies
Administrative Agent and the Construction Consultant in writing of such change
within three (3) Business Days thereafter, and (3) the cost of or reduction
resulting from any one such change does not exceed Five Hundred Thousand and
No/100 Dollars ($500,000.00) and the aggregate change in cost of all such Change
Orders does not exceed Two Million Five Hundred Thousand and No/100 Dollars
($2,500,000.00);
(c) Any
Change Order or Purchaser Upgrade permitted pursuant to this Section
10.13
or
otherwise approved by Administrative Agent shall have the effect of Modifying
the Plans and Specifications and the Project Budget consistent with such Change
Order or Purchaser Upgrade.
(d) The
provisions of Section 2.2
and
Section 10.13
notwithstanding, Borrower may elect, not more than three (3) times during the
term of the Loan, to request an expedited response to a request for consent
to
changes to the Plans and Specifications or request a Change Order (to the extent
either such consent is required under the terms of this Construction Loan
Agreement). Such request shall specifically state that "BORROWER REQUESTS
EXPEDITED CONSENT PURSUANT TO SECTION 10.13(d)
THE
CONSTRUCTION LOAN AGREEMENT." If such request pursuant to this paragraph (e)
requires approval of the Required Lenders under Section 13.9(b)(ii),
then
Administrative Agent shall request such approval within five (5) Business Days
of receipt of the request, and the Lender reply period under
Section 13.9(c),
solely
for purposes of the provisions of this paragraph (e), shall be reduced to five
(5) Business Days; in such event, unless a Lender shall give written notice
to
Administrative Agent within such five (5) Business Day period that such Lender
objects to the Plans and Specifications or changes therein submitted with the
request (together with a written explanation of the reasons behind the
objection), such Lender shall be deemed to have approved the request. If a
request under this paragraph (e) does not require approval of the Required
Lenders, the Administrative Agent shall be required to respond to such request
within five (5) Business Days of receipt of the request.
10.14 Special
Districts/Sales Tax Increment Financing
.
Borrower shall not cause the formation of any special districts, nor enter
into
or approve of any sales tax increment financing agreement or other financing
agreement with any Governmental Authority relating in any way to the
Project.
10.15 Anti-Terrorism
Law
.
Borrower shall not (a) conduct any business or engage in making or receiving
any
contribution of funds, goods or services to or for the benefit of any Person
described in Section 8.29
above,
(b) deal in, or otherwise engage in any transaction relating to, any property
or
interests in property blocked pursuant to the Anti-Terrorism Order or any other
Anti-Terrorism Law, or (c) engage in or conspire to engage in any transaction
that evades or avoids, or has the purpose of evading or avoiding, or attempts
to
violate, any of the prohibitions set forth in any Anti-Terrorism Law (and
Borrower shall deliver to the Lenders any certification or other evidence
requested from time to time by any Lender in its reasonable discretion,
confirming Borrower's compliance with this Section 10.15
and
Section 8.29).
ARTICLE
XI
INSURANCE
OR CONDEMNATION AWARDS
11.1 Casualties
and Condemnations.
(a) If
a
Casualty shall occur, Borrower shall give prompt notice of such damage to
Administrative Agent and shall promptly commence and diligently prosecute the
completion of the repair and restoration of the Project in accordance with
Applicable Law and the Material Agreements to, as nearly as reasonably possible,
the condition the Project was in immediately prior to such Casualty, with such
alterations as may be reasonably approved by Administrative Agent and, to the
extent required under any Material Agreement, any party thereto (a "Restoration").
Borrower shall pay all costs of such Restoration regardless of whether such
costs are covered by Insurance Proceeds (and regardless of whether Borrower
is
entitled to any disbursement of Insurance Proceeds pursuant to Section
11.3
below).
Administrative Agent may, but shall not be obligated to make proof of loss
if
not made promptly by Borrower.
(b) Borrower
shall promptly give Administrative Agent notice of the commencement of (or
of
any threatened) Condemnation proceedings and shall deliver to Administrative
Agent copies of any and all papers served in connection with such actual or
threatened Condemnation. Administrative Agent may participate in any
Condemnation proceedings, and Borrower shall from time to time deliver to
Administrative Agent all instruments requested by it to permit such
participation. Borrower shall, at its expense, diligently prosecute any such
proceedings, and shall consult with Administrative Agent, its attorneys and
experts, and cooperate with them in the carrying on or defense of any such
proceedings.
11.2 Insurance
Proceeds and Condemnation Awards.
(a) If
(i)
Restoration of the Project following a Casualty is reasonably expected to cost
less than One Million Five Hundred Thousand and No/100 Dollars ($1,500,000.00)
(the "Insurance
Threshold Amount"),
or
(ii) the Condemnation Award is reasonably expected to be less than One Million
Five Hundred Thousand and No/100 Dollars ($1,500,000.00) (the "Condemnation
Threshold Amount"),
provided no Default or Event of Default then exists, Borrower may, upon written
notice to Administrative Agent but without the need to obtain the prior written
consent of Administrative Agent, settle and adjust any claim with respect to
a
Casualty and settle or agree to any Condemnation Award, and Borrower is hereby
authorized to collect such Insurance Proceeds or Condemnation Awards with
respect thereto.
(b) If
Restoration of the Project is reasonably expected to cost an amount equal to
or
in excess of the Insurance Threshold Amount (a "Significant
Casualty",
or the
Condemnation Award is reasonably expected to be an amount equal to or in excess
of the Condemnation Threshold Amount (a "Significant
Condemnation Event"),
then
(i) Borrower shall not, without the reasonable prior written consent of
Administrative Agent, settle or adjust any claim of Borrower or agree with
any
insurer(s) on the amount to be paid in connection with such Significant
Casualty, or settle or agree to the amount of any such Condemnation Award,
and
(ii) all Insurance Proceeds and Condemnation Awards shall be due and payable
solely to Administrative Agent and held in a Controlled Account in accordance
with Section 11.3.
(c) If
an
Event of Default exists, with respect to any Casualty or Condemnation, (i)
Administrative Agent, in its sole discretion, may settle and adjust any claim
or
award without the consent of Borrower, (ii) all Insurance Proceeds and
Condemnation Awards shall be due and payable solely to and held by
Administrative Agent in a Controlled Account and applied in accordance with
Section 11.3,
and
(iii) without Administrative Agent's prior consent, other than as required
by
any applicable insurance policy or Applicable Law Borrower shall not take any
action or fail to take any action which would cause the amount of the Insurance
Proceeds or Condemnation Awards to be affected or determined. Administrative
Agent shall be under no obligation to question the amount of any Insurance
Proceeds or Condemnation Award and may accept the same in the amount in which
the same shall be paid.
(d) If
Borrower is a payee on any check representing Insurance Proceeds with respect
to
a Significant Casualty, Borrower shall immediately endorse, such check payable
to the order of Administrative Agent. Borrower hereby irrevocably appoints
Administrative Agent as its attorney-in-fact, coupled with an interest, to
endorse such check payable to the order of Administrative Agent. All
out-of-pocket expenses incurred by Administrative Agent in the settlement,
adjustment and collection of the Insurance shall become part of the Obligations
and shall be reimbursed by Borrower to Administrative Agent upon
demand.
(e) Notwithstanding
the occurrence of any Casualty or Condemnation, (i) Borrower shall continue
to
pay the Obligations at the time and in the manner provided for its payment
in
this Agreement and the Obligations shall not be reduced until any Insurance
Proceeds or Condemnation Awards shall have been actually received and applied
by
Administrative Agent, after the deduction of expenses of collection, to the
reduction or discharge of the Obligations, and (ii) subject to all other
provisions of this Agreement, Administrative Agent shall continue to make Loan
Advances to Borrower notwithstanding the existence of such Casualty or
Condemnation.
(f) With
respect to any Condemnation, (i) the Lenders shall not be limited to the
interest paid on the Condemnation Award by the condemning authority but shall
be
entitled to receive out of the Condemnation Award interest at the rate or rates
provided herein or in the Notes and this Agreement, (ii) if the Project or
any
portion thereof is subject to a Condemnation, provided that any Condemnation
Awards are made available to Borrower for such purpose by Administrative Agent,
Borrower shall promptly commence and diligently prosecute the Restoration of
the
Project and otherwise comply with the provisions of Section 11.3,
(iii)
if the Project is sold, through foreclosure or otherwise, prior to the receipt
by Administrative Agent of the Condemnation Award, Administrative Agent and
the
Lenders shall have the right, whether or not a deficiency judgment on the Notes
shall have been sought, recovered or denied, to receive the Condemnation Award,
or a portion thereof sufficient to pay the Obligations. The failure by Borrower
to apply Condemnation Awards in accordance with this Article
XI
(not
cured within any applicable cure period) shall be an Event of
Default.
11.3 Application
of Insurance Proceeds and Condemnation Awards.
(a) If
either
the Insurance Proceeds or the Condemnation Award are equal to or greater than
the Insurance Threshold Amount or the Condemnation Threshold Amount, as
applicable, Administrative Agent shall adjust the Project Budget to reflect
any
such Insurance Proceeds or Condemnation Award and shall make the Insurance
Proceeds or Condemnation Award available to Borrower for Restoration so long
as
each of the following conditions are met (provided that, if at the time of
any
request for disbursement of Insurance Proceeds or Condemnation Awards Borrower
shall fail to satisfy such conditions, Borrower shall be entitled, except as
to
Section 11.3(a)(i),
to cure
such failure within ten (10) days after Administrative Agent's refusal to make
such disbursement and resubmit such request for disbursement):
(i) no
Event
of Default has occurred and then exists (including at any time required for
any
disbursements of such Insurance Proceeds or Condemnation Awards);
(ii) such
Insurance Proceeds or Condemnation Awards, together with such additional funds
deposited by Borrower with Administrative Agent and/or allocated by Borrower
from the Contingency Fund are sufficient to pay for all of the costs and
expenses associated with the repair or restoration of the Improvements in the
manner required by Sections 11.1(a)
or
11.2(f),
as
applicable;
(iii) if
(1)
such Casualty or Condemnation occurs prior to the initial Completion of the
Improvements, the Improvements can be repaired, restored and completed prior
to
the Completion Date, or such later date as shall be approved by the Required
Lenders and (2) such Casualty or Condemnation occurs after the initial
Completion of the Improvements, the Improvements can be repaired or restored
to
substantially the condition in which they existed prior to such Casualty or
Condemnation prior to the Extended Maturity Date;
(iv) Administrative
Agent (in the exercise of its reasonable discretion) and all applicable
Governmental Authorities have approved the final plans and specifications for
reconstruction or restoration of the damaged portion of the
Improvements;
(v) Administrative
Agent has approved (in the exercise of its reasonable discretion) all budgets,
schedules, and architecture and construction contracts in connection with such
repair or restoration;
(vi) with
respect to a Casualty, Administrative Agent has determined (in the exercise
of
its reasonable discretion) that during the reconstruction or restoration work
and after the reconstruction or restoration work is completed, the Loans will
be
In Balance;
(vii) with
respect to a partial Condemnation, Administrative Agent has determined (in
the
exercise of its reasonable discretion) that the remaining Improvements are
sufficient to cause the Loans to be In Balance;
(viii) Borrower
shall commence (which shall include commencing "soft" costs activities, i.e.,
obtaining development approval from the applicable Governmental Authorities,
soliciting bid proposals, restoration planning, etc.) the Restoration as soon
as
reasonably practicable (but in no event later than ninety (90) days after such
Casualty or Condemnation, as the case may be, occurs) and shall in any event
have undertaken reasonable actions within ninety (90) days to obtain all
necessary permits and shall within such ninety (90) days, have entered into
a
construction contract reasonably acceptable to Administrative Agent, and shall
diligently pursue the same to Completion to the reasonable satisfaction of
Administrative Agent;
(ix) Administrative
Agent shall have received a guaranty of Completion with respect to all
Restoration in substantially the same form as the Completion Guaranty and
otherwise reasonably satisfactory to Administrative Agent from
Guarantor;
(x) the
Project and the use thereof after the Restoration will be in substantial
compliance with and permitted under all Applicable Laws;
(xi) such
Casualty or Condemnation, as the case may be, does not result in the permanent
loss of access to the Project or the Improvements;
(b) Pending
disbursement to Borrower, the Insurance Proceeds or Condemnation Awards shall
be
held by Administrative Agent in a Controlled Account. If the entire amount
of
Insurance Proceeds or a Condemnation Award are not required (i) to be made
available for the Restoration or (ii) the conditions for Insurance Proceeds
or
Condemnation Awards to be made available to Borrower set forth in Section
11.3(a)
above
are not satisfied and Borrower's right to cure such matters has expired, the
Insurance Proceeds or Condemnation Award may (1) be retained and applied by
Administrative Agent toward the payment of the Obligations not later than the
end of the next Interest Period that is at least five (5) days after Borrower
shall have failed to satisfy the funding conditions (subject to Borrower's
cure
rights), whether or not then due and payable, in such order, priority and
proportions as Administrative Agent in its sole discretion shall deem proper,
or
(2) at the sole discretion of Administrative Agent, the same may be paid, either
in whole or in part, to Borrower for such purposes and upon such conditions
as
Administrative Agent shall designate.
ARTICLE
XII
EVENTS
OF DEFAULT
12.1 Events
of Default
.
Any one
or more of the following events shall constitute an "Event of
Default":
(a) Monetary
Defaults.
Borrower shall: (i) fail to pay any principal of or interest on) any Loan when
due (including, without limitation, on the Maturity Date or any other date
on
which the same is due); or (ii) fail to pay any other monetary sum (other than
an amount referred to in clause (i) above) payable by it under this
Agreement or under any other Loan Document, when and as the same shall become
due and payable, and, in the case of this clause (ii) such default shall
continue for a period of five (5) days after Administrative Agent shall have
delivered notice of such default to Borrower (provided such 5-day grace period
shall not apply to any sums due on the Maturity Date); or
(b) Negative
Covenants.
Borrower shall default in the performance of any of its obligations under any
of
Sections 9.14(b),
9.21,
9.22,
10.1(a),
10.2,
10.3,
10.7,
or
10.15.
(c) Representations
and Warranties.
Any
representation, warranty or certification made or deemed made herein or in
any
other Loan Document (or in any Modification hereto or thereto) by Borrower
or
any request, notice or certificate furnished by or on behalf of any Borrower
Party pursuant to the provisions hereof or thereof, shall prove to have been
false or misleading as of the time made or furnished in any material respect
and
if the same is capable of being cured, is not cured within ten (10) days after
written notice from the Administrative Agent unless another cure period is
specified; or
(d) Borrower
Insolvency.
(i)
Borrower shall admit in writing its inability to, or be generally unable to,
pay
its debts as such debts become due; or (ii) an involuntary proceeding shall
be
commenced or an involuntary petition shall be filed, seeking (1) liquidation,
reorganization or other relief in respect of any Borrower or its debts, or
of a
substantial part of its assets, under any Federal, state or foreign bankruptcy,
insolvency, receivership or similar law now or hereafter in effect or (2) the
appointment of a receiver, trustee, custodian, sequestrator, conservator or
similar official for any of Borrower Parties or for a substantial part of its
assets, and, in any such case, such proceeding or petition shall continue
undismissed for a period of sixty (60) days or an order or decree approving
or
ordering any of the foregoing shall be entered; or (iii) Borrower shall (1)
voluntarily commence any proceeding or file any petition seeking liquidation,
reorganization or other relief under any Federal, state or foreign bankruptcy,
insolvency, receivership or similar law now or hereafter in effect, (2) consent
to the institution of, or fail to contest in a timely and appropriate manner,
any proceeding or petition described in clause (ii) above, (3) apply for or
consent to the appointment of a receiver, trustee, custodian, sequestrator,
conservator or similar official for Borrower or for a substantial part of any
of
its assets, (4) file an answer admitting the material allegations .of a petition
filed against it in any such proceeding, (5) make a general assignment for
the
benefit of creditors or (6) take any action for the purpose of effecting any
of
the foregoing; or
(e) Default
on other Indebtedness.
Borrower defaults (after the passage of any grace or cure periods) on any other
Indebtedness where any Lender is acting as lender; or
(f) Dissolution.
Borrower or Guarantor shall be terminated, dissolved or liquidated (as a matter
of law or otherwise) or proceedings shall be commenced by any Person (including
any Borrower Party) seeking the termination, dissolution or liquidation of
Borrower or Guarantor; or
(g) Judgments
Against Borrower.
One or
more (i) final, non-appealable judgments (or, regardless as to whether the
same
is final and non-appealable, a judgment shall be recorded as a lien against
the
Project) for the payment of money (exclusive of judgment amounts covered by
insurance where the insurer has admitted liability in respect of such judgment)
aggregating in excess of Five Hundred Thousand and No/100 Dollars ($500,000.00)
shall be rendered against Borrower, unless the same is paid, bonded over to
the
reasonable satisfaction of Administrative Agent, or additional cash collateral
in an amount satisfactory to Administrative Agent is deposited into a Controlled
Account, in each case within thirty (30) consecutive days of such judgment;
or
(ii) final, non-appealable non-monetary judgments, orders or decrees shall
be
entered against Borrower which does or would reasonably be expected to have
a
Material Adverse Effect, and, in either case, the same shall remain undischarged
for a period of thirty (30) consecutive days during which execution shall not
be
effectively stayed, or any action shall be legally taken by a judgment creditor
to attach or levy upon any assets of Borrower to enforce any such judgment;
or
(h) Judgments
Against Guarantor.
One or
more (i) final, non-appealable judgments for the payment of money (exclusive
of
judgment amounts covered by insurance where the insurer has admitted liability
in respect of such judgment) aggregating in excess of One Million Five Hundred
Thousand and No/100 Dollars ($1,500,000.00) shall be rendered against Guarantor,
unless the same is paid, bonded over to the reasonable satisfaction of
Administrative Agent, or additional cash collateral in an amount satisfactory
to
Administrative Agent is deposited into a Controlled Account, in each case within
thirty (30) consecutive days of such judgment; or (ii) final, non-appealable
non-monetary judgments, orders or decrees shall be entered against Guarantor
which does or would reasonably be expected to have a Material Adverse Effect,
and, in either case, the same shall remain undischarged for a period of thirty
(30) consecutive days during which execution shall not be effectively stayed,
or
any action shall be legally taken by a judgment creditor to attach or levy
upon
any assets of such Guarantor to enforce any such judgment; or
(i) ERISA.
An
ERISA Event shall have occurred that, in the opinion of Administrative Agent,
when taken together with all other ERISA Events that have occurred, could
reasonably be expected to result in a Material Adverse Effect; or
(j) Loan
Document Liens.
The
Liens created by the Security Documents shall at any time not constitute a
valid
and perfected first priority Lien (subject to the Permitted Liens) on the
collateral intended to be covered thereby in favor of Administrative Agent,
free
and clear of all other Liens (other than the Permitted Liens), or, except for
expiration in accordance with its terms, any of the Security Documents shall
for
whatever reason be terminated or cease to be in full force and effect, or the
enforceability thereof shall be contested by any Borrower Party or any of their
Affiliates and Borrower does not cause such matter to be cured within ten (10)
Business Days following written notice from Administrative Agent;
or
(k) Guarantor
Default.
Any
Event of Default shall occur under, or Guarantor shall revoke or attempt to
revoke, contest or commence any action against or seeking to nullify or void
its
obligations under, any of the Guarantor Documents; or
(l) Material
Adverse Effect.
An
event shall occur that results in a Material Adverse Effect and such Material
Adverse Effect shall be continuing; or
(m) Access
to Project.
If (i)
Administrative Agent or any of the Lenders, or its representatives or the
Construction Consultant is not permitted, at all reasonable times, following
prior notice to Borrower, to enter upon the Project, inspect the Improvements
and the construction thereof and all materials, fixtures and articles used
or to
be used in connection therewith, and to examine all detailed plans, shop
drawings and specifications which relate to the Improvements, or (ii) Borrower,
the General Contractor or a Major Subcontractor shall fail to furnish to
Administrative Agent, the Construction Consultant or their authorized
representatives, within a reasonable period of time after requested, copies
of
such plans, drawings and specifications, or copies of any invoices,
subcontracts, or bills of sale relating to the construction or equipping of
the
Improvements, and, in any of the foregoing cases such default remains uncured
for a period of five (5) Business Days after notice thereof from Administrative
Agent to Borrower; provided,
however,
that if
such default is caused as a result of the General Contractor or a Major
Subcontractor, such five (5) Business Day period shall be extended so long
as
Borrower is diligently pursuing its rights and remedies to cause compliance
by
the General Contractor or such Major Subcontractor; or
(n) Deficiency
Deposits.
Borrower shall fail to make (or cause to be made) a Deficiency Deposit within
the time and in the manner provided in Section 7.2;
or
(o) Material
Agreements.
Borrower shall default under any of the Material Agreements after the expiration
any applicable notice or cure periods thereunder, or any Material Agreement
other than a Qualified Purchase Contract is materially Modified or terminated
without Administrative Agent's prior written approval if such approval is
required pursuant to Section 10.12,
and the
benefits provided for in such Material Agreement are not promptly (but in no
event later than thirty (30) days after any such termination) replaced to the
reasonable satisfaction of Administrative Agent; or
(p) Unsatisfactory
Work.
Borrower shall fail to cause any Unsatisfactory Work to be corrected to the
reasonable satisfaction of Administrative Agent and the Construction Consultant
within twenty (20) Business Days after notice of such disapproval; provided,
however,
that if
such Unsatisfactory Work cannot reasonably be corrected within such twenty
(20)
day period, then so long as Borrower shall have commenced to cause the
correction of such Unsatisfactory Work within such twenty (20) Business Day
period and thereafter diligently and expeditiously proceeds to cause the
correction of the same, such twenty (20) Business Day period shall be extended
for such time as is reasonably necessary for Borrower in the exercise of due
diligence to cause the correction of such Unsatisfactory Work, but in no event
beyond the date which is sixty (60) days after the applicable notice of
disapproval or such later date as may be approved in Administrative Agent's
sole
discretion; or
(q) Contractor
Bankruptcy.
The
bankruptcy or insolvency of the General Contractor and failure of Borrower
to
procure a contract with a new general contractor or guarantor (such contract,
general contractor, guaranty and guarantor, as the case may be, to be approved
by Administrative Agent) within sixty (60) days after the occurrence of such
bankruptcy or insolvency (such approval not to be unreasonably withheld); or
(r) Completion
Date.
Completion of the Project is not achieved (subject to Section 14.26)
on or
before the Completion Date; or
(s) Cessation
of Construction.
If the
Construction Work shall, at any time, be discontinued (subject to Section
14.26)
or
abandoned for more than ten (10) Business Days, or a delay in the Construction
Work shall occur so that the same cannot, in Administrative Agent's sole but
reasonable judgment, be Completed on or before the Completion Date;
or
(t) Change
in Control.
The
occurrence of any Change of Control not permitted by this Agreement;
or
(u) General.
If
Borrower or Guarantor shall default as set forth in Sections 12.1(c),
or
12.1(l)
or under
any of the other non-monetary terms, covenants or conditions of this Agreement
or any other Loan Document not set forth above in this Section 12.1
and such
default shall continue for thirty (30) days after notice from Administrative
Agent to Borrower; provided,
however
, that
if (i) such default is susceptible of cure but Administrative Agent reasonably
determines that such non-monetary default cannot be reasonably cured within
such
thirty (30) day period and (ii) Administrative Agent determines, in its sole
discretion, that such default does not create a material risk of sale or
forfeiture of, or substantial impairment in value to, any material portion
of
the Project, then, so long as the Borrower or Guarantor, as appropriate, shall
have commenced to cure such default within such thirty (30) day period and
thereafter diligently and expeditiously proceeds to cure the same, such thirty
(30) day period shall be extended for such time as is reasonably necessary
for
the Borrower or Guarantor, as appropriate, in the exercise of due diligence
to
cure such default, but in no event shall such period exceed ninety (90) days
after the original notice from Administrative Agent or extend beyond the
Maturity Date; or
(v) Other
Loan Documents.
Any
"Event of Default" shall occur under and is defined by the provisions of any
of
the other Loan Documents.
12.2 Remedies
.
Upon
the occurrence of an Event of Default and at any time thereafter during the
continuance of such event, Administrative Agent may (subject to, and in
accordance with, the provisions of Section 13.3)
and,
upon request of the Required Lenders shall, by written notice to Borrower,
pursue any one or more of the following remedies, concurrently or successively,
it being the intent hereof that none of such remedies shall be to the exclusion
of any other:
(a) In
the
case of an Event of Default other than one referred to in Sections 12.1(d)
or
12.1(f)
with
respect to Borrower, terminate the Commitments and/or declare the Outstanding
Principal Amount, and the accrued interest on the Loans and all other amounts
payable by Borrower hereunder (including any amounts payable under
Section 5.5)
and
under the Notes and the other Loan Documents to be forthwith due and payable
whereupon such amounts shall be immediately due and payable without presentment,
demand, protest or other formalities of any kind, all of which are hereby
expressly waived by Borrower; provided,
however,
that in
the case of the occurrence of an Event of Default referred to in
Sections 12.1(d)
or
12.1(f)
with
respect to a Borrower Party, the Commitments shall automatically be terminated
and the Outstanding Principal Amount, and the accrued interest on, the Loans
and
all other amounts payable by Borrower hereunder (including any amounts payable
under Section 5.5),
under
the Notes and the other Loan Documents shall automatically become immediately
due and payable without presentment, demand, protest or other formalities of
any
kind, all of which are hereby expressly waived by Borrower;
(b) In
the
case of any Event of Default resulting from Borrower's failure, refusal or
neglect to make any payment or perform any act required by the Loan Documents,
then, while any Event of Default exists and without notice to or demand upon
Borrower and without waiving or releasing any other right, remedy or recourse
Administrative Agent and the Lenders may have because of such Event of Default,
Administrative Agent may (but shall not be obligated to) make such payment
or
perform such act for the account of and at the expense of Borrower, and shall
have the right to enter upon the Project for such purpose and to take all such
action thereon and with respect to the Project as it may deem necessary or
appropriate. If Administrative Agent shall elect to pay any sum due with respect
to the Project, Administrative Agent may do so in reliance on any xxxx,
statement or assessment procured from the appropriate Governmental Authority
or
other issuer thereof without inquiring into the accuracy or validity thereof.
Similarly, in making any payments to protect the security intended to be created
by the Loan Documents, Administrative Agent shall not be bound to inquire into
the validity of any apparent or threatened adverse title, Lien, encumbrance,
claim or charge before making an advance for the purpose of preventing or
removing the same. Additionally, after the occurrence of an Event of Default,
if
any Hazardous Substance affects or threatens to affect the Project,
Administrative Agent may (but shall not be obligated to) give such notices
and
take such actions as it deems necessary or advisable in order to xxxxx the
discharge of or remove any Hazardous Substance;
(c) Take
possession of the Project and cause Completion of the Improvements and do
anything in its sole judgment to fulfill the obligations of Borrower hereunder,
including either the right to avail itself of and procure performance of
existing contracts or let any contracts with the same contractors or others
and
to employ watchmen to protect the Project from injury. Without restricting
the
generality of the foregoing and for the purposes aforesaid, Borrower hereby
appoints and constitutes Administrative Agent its lawful attorney-in-fact with
full power of substitution in the Project to cause Completion of the
Improvements in the name of Borrower; to use unadvanced funds remaining under
the Commitments or which may be reserved, or escrowed or set aside for any
purposes hereunder at any time, or to advance funds in excess of the face amount
of the Notes (and all such amounts shall be payable by Borrower together with
interest at the Default Rate), to cause Completion the Improvements; to make
changes in the Plans and Specifications which shall be necessary or desirable
for Completion of the Improvements in substantially the manner contemplated
by
the Plans and Specifications; to retain or employ new general contractors,
subcontractors, architects, engineers and inspectors as shall be required for
said purposes; to pay, settle, or compromise all existing bills and claims,
which may be liens or security interests, or to avoid such bills and claims
becoming liens against the Project or security interest against fixtures or
equipment, or as may be necessary or desirable for the Completion of the
Improvements or for the clearance of title; to execute all applications and
certificates in the name of Borrower which may be required by any of the
contract documents; to do any and every act which Borrower might do in its
own
behalf; and to prosecute and defend all actions or proceedings in connection
with the Project or fixtures or equipment; to take action and require such
performance as it deems necessary under any bonds furnished in connection with
the construction of the Improvements and to make settlements and compromises
with surety or sureties thereunder, and in connection therewith, to execute
instruments of release and satisfaction; it being understood and agreed that
this power of attorney shall be a power coupled with an interest and cannot
be
revoked;
(d) Exercise
the Lenders' rights under the Completion Guaranty and Development Agreement
Guaranty to require any Guarantor to perform thereunder, in which case Borrower
hereby (i) authorizes Administrative Agent and the Lenders to make advances
of
the Loans directly to such Guarantor in accordance with the terms of the
Completion Guaranty and Development Agreement Guaranty and this Agreement and
(ii) agrees that Borrower shall be liable to the Lenders for all such advances
to such Guarantor and such advances shall be deemed Loans under this Agreement
and be evidenced by the Notes and secured by the Security Instrument and the
other Security Documents; and
(e) Exercise
or pursue any other remedy or cause of action permitted under this Agreement,
any or all of the Security Documents, or any other Loan Document, or conferred
upon Administrative Agent and the Lenders by operation of law.
WHETHER
OR NOT ADMINISTRATIVE AGENT OR THE LENDERS ELECT TO EMPLOY ANY OR ALL OF THE
REMEDIES AVAILABLE UPON THE OCCURRENCE OF AN EVENT OF DEFAULT, NEITHER
ADMINISTRATIVE AGENT NOR ANY OF THE LENDERS SHALL BE LIABLE FOR THE CONSTRUCTION
OF OR FAILURE TO CONSTRUCT, COMPLETE OR PROTECT THE IMPROVEMENTS OR FOR PAYMENT
OF ANY EXPENSES INCURRED IN CONNECTION WITH THE EXERCISE OF ANY REMEDY AVAILABLE
TO ADMINISTRATIVE AGENT OR THE LENDERS OR FOR THE PERFORMANCE OR NON-PERFORMANCE
OF ANY OTHER OBLIGATION OF BORROWER.
ARTICLE
XIII
ADMINISTRATIVE
AGENT
13.1 Appointment,
Powers and Immunities
.
Each
Lender hereby irrevocably appoints and authorizes Administrative Agent to act
as
its agent hereunder and under the other Loan Documents with such powers as
are
specifically delegated to Administrative Agent by the terms of this Agreement
and of the other Loan Documents, together with such other powers as are
reasonably incidental thereto. Administrative Agent shall be a party to each
of
the Loan Documents (other than the Notes) as secured party, beneficiary,
indemnitee, and such other applicable capacities, on behalf of and for the
benefit of Lenders (and each Lender hereby ratifies and reaffirms the Loan
Documents so executed and agrees to be bound by the terms thereof) and hold
all
Collateral covered thereby for the benefit of the Lenders, and receive all
payments or proceeds received in connection therewith for the undivided benefit
and protection of the Lenders in accordance with the terms and conditions of
this Agreement. As soon as practicable after each such receipt of proceeds
by
Administrative Agent, Administrative Agent shall determine the respective
amounts to be distributed and promptly thereafter shall credit to itself the
amount to which it is entitled (as Administrative Agent, Lender or otherwise)
and wire the amounts to which the other Lenders are entitled in accordance
with
such written instruction as each Lender from time to time may deliver to
Administrative Agent. Each Lender shall hold its own Note and shall receive
a
copy of each Loan Document. Administrative Agent (which term as used in this
Section 13.1
shall
include reference to its Affiliates and its own and its Affiliates' officers,
directors, employees and agents) shall not:
(a) have
any
duties or responsibilities except those expressly set forth in this Agreement
and in the other Loan Documents, and shall not by reason of this Agreement
or
any other Loan Document be a fiduciary or trustee for any Lender except to
the
extent that Administrative Agent acts as an agent with respect to the receipt
or
payment of funds, nor shall Administrative Agent have any fiduciary duty to
the
Borrower nor shall any Lender have any fiduciary duty to the Borrower or any
other Lender;
(b) be
responsible to the Lenders for any recitals, statements, representations or
warranties contained in this Agreement or in any other Loan Document, or in
any
certificate or other document referred to or provided for in, or received by
any
of them under, this Agreement or any other Loan Document, or for the value,
validity, effectiveness, genuineness, enforceability or sufficiency of this
Agreement, any Note or any other Loan Document or any other document referred
to
or provided for herein or therein or for any failure by the Borrower or any
other Person to perform any of its Obligations hereunder or
thereunder;
(c) be
responsible for any action taken or omitted to be taken by it hereunder or
under
any other Loan Document or under any other document or instrument referred
to or
provided for herein or therein or in connection herewith or therewith, except
for its own gross negligence or willful misconduct;
(d) except
to
the extent expressly instructed in writing by the Required Lenders with respect
to collateral security under the Loan Documents, be required to initiate or
conduct any litigation or collection proceedings hereunder or under any other
Loan Document; and
(e) be
required to take any action which is contrary to this Agreement or any other
Loan Document or Governmental Requirement.
The
relationship between and among Administrative Agent and each Lender is a
contractual relationship only, and nothing herein shall be deemed to impose
on
Administrative Agent any obligations other than those for which express
provision is made herein or in the other Loan Documents. Administrative Agent
may employ agents and attorneys-in-fact and shall not be responsible for the
negligence or misconduct of any such agents or attorneys-in-fact selected by
it
in good faith. Administrative Agent may deem and treat the payee of a Note
as
the holder thereof for all purposes hereof unless and until a notice of the
assignment or transfer thereof shall have been filed with Administrative Agent
pursuant to Section 14.7.
Except
to the extent expressly provided in Sections 13.8,
13.10,
and
13.11(g),
the
provisions of this Article XIII
are
solely for the benefit of Administrative Agent and the Lenders, and the Borrower
shall not have any rights as a third-party beneficiary of any of the provisions
hereof and the Administrative Agent and Lenders may, pursuant to a written
agreement executed by all such Persons, Modify or waive such provisions of
this
Article XIII
in their
sole and absolute discretion.
13.2 Reliance
by Administrative Agent
.
Administrative Agent shall be entitled to rely upon any certification, notice,
document or other communication (including any thereof by telephone, telecopy,
telegram or cable) reasonably believed by it to be genuine and correct and
to
have been signed or sent by or on behalf of the proper Person or Persons, and
upon advice and statements of legal counsel, independent accountants and other
experts selected by Administrative Agent. As to any matters not expressly
provided for by this Agreement or any other Loan Document, Administrative Agent
shall in all cases be fully protected in acting, or in refraining from acting,
hereunder or thereunder in accordance with instructions given by the Required
Lenders, and such instructions of the Required Lenders and any action taken
or
failure to act pursuant thereto shall be binding on all of the
Lenders.
13.3 Borrower
Defaults.
(a) Administrative
Agent shall give the Lenders notice of any material Default of which
Administrative Agent has knowledge or notice. Except with respect to (i) the
nonpayment of principal, interest or any fees that are due and payable under
any
of the Loan Documents, (ii) Defaults with respect to which Administrative Agent
has actually sent written notice of to the Borrower and (iii) Defaults with
respect to which Administrative Agent has entered into discussions with the
Borrower, Administrative Agent shall be deemed to not have knowledge or notice
of the occurrence of a Default unless Administrative Agent has received notice
from a Lender or the Borrower specifying such Default and stating that such
notice is a "Notice of Default." If Administrative Agent has such knowledge
or
receives such a notice from the Borrower or a Lender in accordance with the
immediately preceding sentence with respect to the occurrence of a material
Default, Administrative Agent shall give prompt notice thereof to the Lenders.
Within ten (10) days of delivery of such notice of Default from Administrative
Agent to the Lenders (or such shorter period of time as Administrative Agent
determines is necessary), Administrative Agent and the Lenders shall consult
with each other to determine a proposed course of action. Administrative Agent
shall (subject to Section 13.7)
take
such action with respect to such Default as shall be directed by the Required
Lenders; provided that (i) unless and until Administrative Agent shall have
received such directions, Administrative Agent may (but shall not be obligated
to) take such action, or refrain from taking such action (including decisions
(1) to make Protective Advances that Administrative Agent determines are
necessary to protect or maintain the Project and (2) to foreclose on the Project
or exercise any other remedy), with respect to such Default as it shall deem
advisable in the interest of the Lenders except to the extent that this
Agreement expressly requires that such action be taken, or not be taken, only
with the consent or upon the authorization of all of the Lenders and (ii) no
actions approved by the Required Lenders shall violate the Loan Documents or
Governmental Requirement.
(b) Each
of
the Lenders acknowledges and agrees that no individual Lender may separately
enforce or exercise any of the provisions of any of the Loan Documents
(including, without limitation, the Notes) other than through Administrative
Agent. Administrative Agent shall advise the Lenders of all material actions
which Administrative Agent takes in accordance with the provisions of this
Section 13.3.
Notwithstanding the foregoing, if the Required Lenders shall at any time direct
that a different or additional remedial action be taken from that already
undertaken by Administrative Agent, including the commencement of foreclosure
proceedings, such different or additional remedial action shall be taken in
lieu
of or in addition to, the prosecution of such action taken by Administrative
Agent; provided that all actions already taken by Administrative Agent pursuant
to Section 13.3(a)
shall be
valid and binding on each Lender.
(c) All
money
(other than money subject to the provisions of Section 13.3(g))
received from any enforcement actions, including the proceeds of a foreclosure
sale of the Project, shall be applied: First, to the payment or reimbursement
of
Administrative Agent for expenses incurred in accordance with the provisions
of
Sections 13.3(d),
13.3(e),
and
13.3(f)
and
13.5
and to
the payment of any fees and charges then due agent to the extent not paid by
the
Borrower; Second, to the Lenders for expenses incurred in accordance with the
provisions of Section 13.3(d),
13.3(e),
and
13.3(f)
and
13.5;
Third,
to the payment or reimbursement of the Lenders for any advances made pursuant
to
Section 13.3(d);
and
Fourth, pari passu to the Lenders in accordance with their respective
Proportionate Shares, unless an Unpaid Amount is owed pursuant to
Section 13.11,
in
which event such Unpaid Amount shall be deducted from the portion of such
proceeds of the Defaulting Lender and be applied to payment of such Unpaid
Amount to the Special Advance Lender.
(d) All
losses with respect to interest (including interest at the Default Rate) and
other sums payable pursuant to the Notes or incurred in connection with the
Loans, the enforcement thereof or the realization of the security therefor,
shall be borne by the Lenders in accordance with their respective Proportionate
Shares. The Lenders shall promptly, upon request, remit to Administrative Agent
their respective Proportionate Shares of (i) any expenses incurred by
Administrative Agent in connection with any Default to the extent any expenses
have not been paid by the Borrower, (ii) any advances made to pay taxes or
insurance or otherwise to preserve the lien of the Loan Documents or to preserve
and protect the Project or made to effect the Completion of the Improvements
to
be constructed pursuant to this Agreement whether or not the amount necessary
to
be advanced for such purposes exceeds the amount of the respective Commitments
of the Lenders, (iii) any other expenses incurred in connection with the
enforcement of the Security Instrument or other Loan Documents, and (iv) any
expenses incurred in connection with the consummation of the Loans not paid
or
provided for by the Borrower. To the extent any such advances are recovered
in
connection with the enforcement of the Security Instrument or the other Loan
Documents, each Lender shall be paid its Proportionate Share of such recovery
after deduction of the expenses of Administrative Agent.
(e) If
any
action is brought to collect on the Notes, foreclose under the Security
Instrument, or enforce any of the Loan Documents, such action shall (to the
extent permitted under applicable law and the decisions of the court in which
such action is brought) be an action brought by Administrative Agent and the
Lenders, collectively, to collect on all or a portion of the Notes or enforce
the Loan Documents, and counsel selected by Administrative Agent shall prosecute
any such action on behalf of Administrative Agent and the Lenders, and
Administrative Agent and the Lenders shall consult and cooperate with each
other
in the prosecution thereof. The costs and expenses of foreclosure, to the extent
not paid by Borrower within ten (10) days after Administrative Agent's demand
therefor, will be borne by the Lenders in accordance with their respective
Proportionate Shares.
(f) If
title
is acquired to the Project after a foreclosure sale, nonjudicial foreclosure
or
by a deed in lieu of foreclosure, title shall be held by Administrative Agent
in
its own name in trust for the Lenders or, at Administrative Agent's election,
in
the name of a wholly owned subsidiary of Administrative Agent on behalf of
the
Lenders.
(g) If
Administrative Agent (or its subsidiary) acquires title to the Project or is
entitled to possession of the Project during or after the foreclosure, all
material decisions with respect to the possession, ownership, development,
construction, control, operation, leasing, management and sale of the Project
shall be made by Administrative Agent. All income or other money received after
so acquiring title to or taking possession of the Project with respect to the
Project, including income from the operation and management of the Project
and
the proceeds of a sale of the Project, shall be applied: First, to the payment
or reimbursement of Administrative Agent for expenses incurred in accordance
with the provisions of this Article
XIII
and to
the payment of any fees and charges then due agent to the extent not paid by
the
Borrower; Second, to the payment of operating expenses with respect to the
Project; Third, to the establishment of reasonable reserves for the operation
of
the Project; Fourth, to the payment or reimbursement of the Lenders for any
advances made pursuant to Section 13.3(d);
Fifth
to fund any capital improvement, leasing and other reserves established at
the
discretion of Administrative Agent; and Sixth, pari passu to the Lenders in
accordance with their respective Proportionate Shares, unless an Unpaid Amount
is owed pursuant to Section 13.11,
in
which event such Unpaid Amount shall be deducted from the portion of such
proceeds of the Defaulting Lender and be applied to payment of such Unpaid
Amount to the Special Advance Lender.
13.4 Rights
as a Lender
.
With
respect to its Loan Commitment and the Loans made by it, Xxxxx Fargo (and any
successor acting as "Administrative Agent" hereunder) in its capacity as a
Lender hereunder shall have the same rights and powers hereunder as any other
Lender and may exercise the same as though it were not acting as Administrative
Agent, and the term "Lender" or "Lenders" shall, unless the context otherwise
indicates, include Administrative Agent in its individual capacity as Lender.
Xxxxx Fargo (and any successor acting as "Administrative Agent" hereunder)
and
any of its Affiliates may (without having to account therefor to any other
Lender) accept deposits from, lend money to, make investments in and generally
engage in any kind of banking, investment banking, trust or other business
with
the Borrower (and any of its Affiliates) as if it were not acting as
Administrative Agent, and Xxxxx Fargo (and any such successor) and any of its
Affiliates may accept fees and other consideration from the Borrower for
services in connection with this Agreement or otherwise without having to
account for the same to the Lenders.
13.5 Indemnification
.
Each
Lender agrees to indemnify Administrative Agent (to the extent not reimbursed
by
the Borrower, but without limiting the Obligations of the Borrower hereunder)
ratably in accordance with their Proportionate Shares, for any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements of any kind and nature whatsoever that may
be
imposed on, incurred by or asserted against Administrative Agent in its capacity
as Administrative Agent (including by any Lender) arising out of or by reason
of
any investigation in or in any way relating to or arising out of this Agreement
or any other Loan Document or any other documents contemplated by or referred
to
herein or therein (including the costs and expenses that the Borrower is
obligated to pay hereunder) or the enforcement of any of the terms hereof or
thereof; provided that no Lender shall be liable for any of the foregoing to
the
extent they arise from the gross negligence or willful misconduct of
Administrative Agent.
13.6 Non-Reliance
on Administrative Agent and Other Lenders
.
Each
Lender agrees that it has, independently and without reliance on Administrative
Agent or any other Lender, and based on such documents and information as it
has
deemed appropriate, made its own credit analysis of the Borrower and the
Guarantor and its decision to enter into this Agreement and that it will,
independently and without reliance upon Administrative Agent or any other
Lender, and based on such documents and information as it shall deem appropriate
at the time, continue to make its own analysis and decisions in taking or not
taking action under this Agreement or under any other Loan Document. Subject
to
the provisions of Section 13.5
above,
Administrative Agent shall not be required to keep itself informed as to the
performance or observance by the Borrower or the Guarantor of this Agreement
or
any of the other Loan Documents or any other document referred to or provided
for herein or therein or to inspect the properties or books of the Borrower
or
the Guarantor. Except for notices, reports and other documents and information
expressly required to be furnished to the Lenders by Administrative Agent
hereunder, Administrative Agent shall not have any duty or responsibility to
provide any Lender with any credit or other information concerning the affairs,
financial condition or business of the Borrower or the Guarantor (or any of
their Affiliates) that may come into the possession of Administrative Agent
or
any of its Affiliates. Without limiting the foregoing, Administrative Agent
shall not be responsible in any manner to any Lender (or any permitted successor
or assign of any Lender), and each Lender represents and warrants that it has
not relied upon Administrative Agent for or in respect of, (a) the
creditworthiness of Borrower and the risks involved to such Lender, (b) the
effectiveness, enforceability, genuineness, validity, or the due execution
of
any Loan Document, (c) any representation, warranty, document, certificate,
report, or statement made therein or furnished thereunder or in connection
therewith, (d) the existence, priority, or perfection of any Lien granted or
purported to be granted under any Loan Document, or (e) the observation of
or
compliance with any of the terms, covenants, or conditions of any Loan Document
on the part of Borrower.
13.7 Failure
to Act
.
Except
for action expressly required of Administrative Agent hereunder and under the
other Loan Documents, Administrative Agent shall in all cases be fully justified
in failing or refusing to act hereunder and thereunder unless it shall receive
further assurances to its satisfaction from the Lenders of their indemnification
obligations under Section 13.5
against
any and all liability and expense that may be incurred by it by reason of taking
or continuing to take any such action.
13.8 Resignation
and Removal of Administrative Agent.
(a) It
is
agreed by the Lenders that Administrative Agent shall remain Administrative
Agent under this Agreement and the other Loan Documents throughout the term
of
the Loan; provided, however, Administrative Agent may resign at any time by
giving at least thirty (30) days prior notice thereof to the Lenders and the
Borrower. Upon any such resignation, the Required Lenders shall have the right
to appoint a successor Administrative Agent that shall be a Person
that:
(i) meets
the
qualifications of an Eligible Assignee; and
(ii) has
substantial experience in construction loan administration, and if such
successor Administrative Agent is not a Lender, as long as no Event of Default
exists, the Borrower shall have the right to approve such successor
Administrative Agent, which approval shall not be unreasonably withheld,
conditioned or delayed.
If
no
successor Administrative Agent shall have been so appointed by the Required
Lenders and shall have accepted such appointment within thirty (30) days after
the retiring Administrative Agent's giving of notice of resignation of the
retiring Administrative Agent, then the retiring Administrative Agent may,
on
behalf of the Lenders, appoint a successor Administrative Agent, that shall
be a
Person that meets the requirements of clauses (i) and (ii) above, and if such
successor Administrative Agent is not a Lender, the Borrower, as long as no
Event of Default exists, shall have the right to approve such successor
Administrative Agent, which approval shall not be unreasonably withheld,
conditioned or delayed. Upon the acceptance of any appointment as Administrative
Agent hereunder by a successor Administrative Agent, such successor
Administrative Agent shall thereupon succeed to and become vested with all
the
rights, powers, privileges and duties of the retiring Administrative Agent,
and
the retiring Administrative Agent shall be discharged from its duties and
obligations hereunder; provided,
however,
that
the retiring Administrative Agent shall not be discharged from any liabilities
which existed prior to the effective date of such resignation. After any
retiring Administrative Agent's resignation hereunder as Administrative Agent,
the provisions of this Article
XIII
shall
continue in effect for its benefit in respect of any actions taken or omitted
to
be taken by it while it was acting as Administrative Agent.
(b) Administrative
Agent may be removed by the Required Lenders if:
(i) Administrative
Agent shall have failed to pay to Lenders any amount due to any Lender pursuant
to this Agreement (and not reasonably disputed by Administrative Agent) within
seven (7) Business Days of the date Administrative Agent is notified of a
default in a payment due from Administrative Agent to such Lenders;
(ii) Administrative
Agent shall have failed to perform any of its obligations under this Agreement
in any material respect and such failure shall not have been cured within thirty
(30) calendar days after written notice from Lenders to Administrative Agent
of
such failure, or if such failure cannot reasonably be cured within such thirty
(30) day period, within such longer period of time as may be necessary to
complete such cure so long as Administrative Agent commences such cure within
such thirty (30) day period and thereafter diligently pursues such cure to
completion; or
(iii) Administrative
Agent is a Defaulting Lender.
13.9 Consents
and Certain Actions under, and Modifications of, Loan Documents.
(a) Administrative
Agent may, except as provided below in Section 13.9(b)
below,
(i) grant or refuse to grant any consent or approval required or requested
of it
hereunder or under any of the other Loan Documents in its sole and absolute
discretion (except where another standard of discretion is expressly required
of
Administrative Agent pursuant to the applicable Loan Document), and (ii) consent
or refuse to consent to any Modification, supplement or waiver under any of
the
Loan Documents. Without limiting the foregoing, such authority shall include
the
power to grant approvals consents and make all decisions with respect to all
Ministerial Matters. Notwithstanding anything to the contrary contained herein,
the Administrative Agent, shall be authorized on behalf of all the Lenders,
without the necessity of any notice to, or further consent from, any Lender,
to
waive the imposition of the Late Charge provided in Section 3.3,
up to a
maximum of 3 times per calendar year.
(b) Notwithstanding
any other provision of this Agreement or the other Loan Documents to the
contrary, Administrative Agent shall not, without the approval of the Required
Lenders or all of the Lenders, as specified below, have the right or power
(and
Borrower acknowledges and agrees that Administrative Agent shall not have the
right or power) to grant any consent or approval required or requested of it
hereunder or under any of the other Loan Documents, consent to any Modification,
supplement or waiver under any of the Loan Documents, or take any action, if
the
effect of such consent, approval, Modification, supplement, waiver or action
would result in:
(i) Without
the consent of all Lenders:
(1) a
waiver
of any provision regarding the scheduled payment of principal of or interest
on
the Loan;
(2) the
postponement the Maturity Date;
(3) the
reduction or forgiveness of the principal amount of the Loan;
(4) a
decrease in the Applicable Interest Rate under the Loan or the waiver of any
interest (including interest at the Default Rate) thereon, except to the extent
permitted in the Loan Documents;
(5) a
release
of Borrower from its Obligations under the Loan Documents, or a release of
any
of the Guarantors under the Guaranties from their obligations with respect
to
the Loan (except upon payment in full of the Loan and all other sums due under
the Loan Documents);
(6) a
release
of any material portion of the Collateral from the lien of the applicable Loan
Documents, except to the extent permitted in the Loan Documents;
(7) a
waiver
of interest at the Default Rate, or any Extension Fee;
(8) a
consent
to any waiver of the prohibitions on Transfer or encumbrances, other than an
Anticipated Encumbrance, of the Project or Equity Interests in
Borrower;
(9) a
Modification of the definition of "Required Lenders" or the provisions of
Article XIII,
or
alters the several nature of the Lenders' obligations under the Loan
Documents;
(ii) Without
the consent of the Required Lenders:
(1) a
decision to foreclose on, or exercise remedies in order to realize upon, any
Collateral after a Default or an Event of Default, as the case may be or bring
any action to enforce any of the Guaranties or other Loan Documents
(provided,
however,
all
decisions concerning the conduct of any receivership, the manner (i.e.,
judicial, non-judicial, acceptance of deed-in-lieu of foreclosure) and conduct
of any foreclosure action or trustee's sale, the collection of any judgment,
the
settlement of such action, any bid on behalf of Administrative Agent and the
Lenders at a foreclosure sale, the manner of taking and holding title to the
Project, and the commencement and conduct of any deficiency judgment proceeding
shall be made by Administrative Agent);
(2) a
decision made with respect to the sale or disposition of the Project or any
Collateral after Administrative Agent has obtained possession
thereof;
(3) a
decision on the use of application of proceeds from any insurance maintain
by
Borrower or any awards from a taking or condemnation of the
Project;
(4) a
Protective Advance that exceeds Two Hundred Fifty Thousand and No/100 Dollars
($250,000.00) or Protective Advances that exceed, in the aggregate, Five Hundred
Thousand and No/100 Dollars ($500,000.00) in any calendar year; and
(5) a
single
Change Order in excess of One Million and No/100 Dollars ($1,000,000.00) and
all
Change Orders at such time as the aggregate amount of Change Orders exceeds
Five
Million and No/100 Dollars ($5,000,000.00).
(6) a
waiver
of the conditions precedent to the making of Loans set forth in Section
6.2.
(iii) Without
the consent of the affected Lender, change such Lender's Proportionate Share
(provided,
however,
that
this clause shall not apply to reductions in or a deemed reduction in any
Lender's Proportionate Share pursuant to Section 13.11
hereof,
nor shall it be construed to prevent a Lender from assigning its interest in
the
Loan pursuant to Section 14.7).
(c) If
Administrative Agent solicits any consents or approvals from the Lenders under
any of the Loan Documents, each Lender shall within ten (10) Business Days
of
receiving such request, give Administrative Agent written notice of its consent
or approval or denial thereof (or such shorter time as may be required under
the
applicable Loan Document for Administrative Agent to respond, in which case
Lenders shall have the same time period minus one (1) Business Day); provided
that if any Lender does not respond within such ten (10) Business Days, such
Lender shall be deemed to have authorized Administrative Agent to vote such
Lender's interest with respect to the matter which was the subject of
Administrative Agent's solicitation as Administrative Agent elects. Any such
solicitation by Administrative Agent for a consent or approval shall be in
writing and shall include a description of the matter or thing as to which
such
consent or approval is requested and shall include Administrative Agent's
recommended course of action or determination in respect thereof.
13.10 Authorization
.
Administrative Agent is hereby authorized by the Lenders to execute, deliver
and
perform in accordance with the terms of each of the Loan Documents to which
Administrative Agent is or is intended to be a party and each Lender agrees
to
be bound by all of the agreements of Administrative Agent contained in such
Loan
Documents. The Borrower shall be entitled to rely on all written agreements,
approvals and consents received from Administrative Agent as being that also
of
the Lenders, without obtaining separate acknowledgment or proof of authorization
of same.
13.11 Defaulting
Lenders.
(a) If
any
Lender (a "Defaulting
Lender";
and,
for purposes hereof, any Lenders that is not a Defaulting Lender, a
"Non-Defaulting
Lender")
shall
for any reason fail to (i) make any respective Loan required pursuant to the
terms of this Agreement or (ii) pay its Proportionate Share of an advance or
disbursement to protect the Project or the lien of the Loan Documents,
Administrative Agent and any of the Non-Defaulting Lenders may, but shall not
be
obligated to, make all or a portion of the Defaulting Lender's Proportionate
Share of such advance; provided,
however,
that
Administrative Agent or such Non-Defaulting Lender gives the Defaulting Lender
and Administrative Agent three (3) Business Days prior notice of its intention
to do so. The right to make such advances in respect of the Defaulting Lender
shall be exercisable first by Administrative Agent, and then by the
Non-Defaulting Lender holding the greatest Proportionate Share, and thereafter
to each of the Non-Defaulting Lenders in descending order of their respective
Proportionate Shares or in such other manner as the Required Lenders (excluding
the Defaulting Lender) may agree on. Any Lender making all or any portion of
a
Defaulting Lender's Proportionate Share of the applicable Loan advance in
accordance with the foregoing terms and conditions shall be referred to as
a
"Special
Advance Lender."
Subject to a Defaulting Lender's right to cure as provided in
Section 13.11(f),
but
notwithstanding anything else to the contrary contained in this Agreement,
the
Defaulting Lender's interest in, and any amounts due to a Defaulting Lender
under, the Loan Documents (including, without limitation, all principal,
interest, fees and expenses) shall be subordinate in lien priority and to the
repayment of all amounts (including, without limitation, interest) then or
thereafter due or to become due to the other Lenders under the Loan Documents,
and the Defaulting Lender thereafter shall have no right to participate in
any
discussions among and/or decisions by the Lenders hereunder and/or under the
other Loan Documents. Further, subject to Section 13.11(f)
below,
any Defaulting Lender shall be bound by any amendment to, or waiver of, any
provision of, or any action taken or omitted to be taken by Administrative
Agent
and/or the other Lenders under, any Loan Document which is made subsequent
to
the Defaulting Lender becoming a Defaulting Lender and, during such period,
the
Loan Commitment of and outstanding principal amount held by such Defaulting
Lender shall be disregarded in any determination requiring the approval of
the
Lenders or the Required Lenders hereunder.
(b) In
any
case where a Non-Defaulting Lender becomes a Special Advance Lender (i) the
Special Advance Lender shall, at the election of such Special Advance Lender,
be
deemed to have purchased, and the Defaulting Lender shall be deemed to have
sold, a senior participation in the Defaulting Lender's respective Loans to
the
extent of the amount so advanced or disbursed (the "Advanced
Amount")
bearing interest at the Applicable Interest Rate (including interest at the
Default Rate, if applicable) and (ii) the Defaulting Lender shall have no voting
rights under this Agreement or any other Loan Documents (and its Proportionate
Share shall be disregarded in determining whether any act or decision requiring
the approval of the Required Lenders shall have been approved) so long as it
is
a Defaulting Lender. It is expressly understood and agreed that each of the
respective obligations of the Lenders under this Agreement and the other Loan
Documents, including to advance Loans, to share losses incurred in connection
with the Loan, including costs and expenses of enforcement of the Loans, to
make
advances to preserve the lien of the Security Instrument or to preserve and
protect the Project or to effect Completion of the Improvements to be
constructed pursuant to the Loan Documents, shall be without regard to any
adjustment in the Proportionate Shares occasioned by the acts of a Defaulting
Lender. The Special Advance Lender shall be entitled to an amount (the
"Unpaid
Amount")
equal
to the applicable Advanced Amount, plus any unpaid interest due and owing with
respect thereto, less any repayments thereof made by the Defaulting Lender
immediately upon demand. The Defaulting Lender shall have the right to
repurchase the senior participation in its Loans from the Special Advance Lender
pursuant to Section 13.11(f)
below by
the payment of the Unpaid Amount.
(c) A
Special
Advance Lender shall (i) give notice to the Defaulting Lender, Administrative
Agent and each of the other Lenders (provided that failure to deliver said
notice to any party other than the Defaulting Lender shall not constitute a
default under this Agreement) of the Advance Amount and the percentage of the
Special Advance Lender's senior participation in the Defaulting Lender's Loans
and (ii) in the event of the repayment of any of the Unpaid Amount by the
Defaulting Lender, give notice to the Defaulting Lender, Administrative Agent
and each of the other Lenders of the fact that the Unpaid Amount has been repaid
(in whole or in part), the amount of such repayment and, if applicable, the
revised percentage of the Special Advance Lender's senior participation.
Provided that Administrative Agent has received notice of such participation,
Administrative Agent shall have the same obligations to distribute interest,
principal and other sums received by Administrative Agent with respect to a
Special Advance Lender's senior participation as Administrative Agent has with
respect to the distribution of interest, principal and other sums under this
Agreement; and at the time of making any distributions to the Lenders, shall
make payments to the Special Advance Lender with respect to a Special Advance
Lender's senior participation in the Defaulting Lender's Loans out of the
Defaulting Lender's share of any such distributions.
(d) A
Defaulting Lender shall immediately pay to a Special Advance Lender all sums
of
any kind paid to or received by the Defaulting Lender from the Borrower, whether
pursuant to the terms of this Agreement or the other Loan Documents or in
connection with the realization of the security therefor until the Unpaid Amount
is fully repaid. Notwithstanding the fact that the Defaulting Lender may
temporarily hold such sums, the Defaulting Lender shall be deemed to hold same
as a trustee for the benefit of the Special Advance Lender, it being the express
intention of the Lenders that the Special Advance Lender shall have an ownership
interest in such sums to the extent of the Unpaid Amount.
(e) Nothing
contained in Section 13.11(a),
13.11(f)
or
13.11(h)
shall
release or in any way limit a Defaulting Lender's obligations as a Lender
hereunder and/or under any other of the Loan Documents or impair the Borrower's
right to exercise its remedies against such Defaulting Lender which remedies
shall include, without limitation, the recovery of any losses, costs and
expenses incurred as a result thereof Each Defaulting Lender shall indemnify,
defend and hold Administrative Agent and each of the other Lenders harmless
from
and against any and all losses, damages, liabilities or expenses (including
reasonable attorneys' fees and expenses and interest at the Default Rate) which
they may sustain or incur by reason of the Defaulting Lender's failure or
refusal to abide by its obligations under this Agreement or the other Loan
Documents, except to the extent a Defaulting Lender became a Defaulting Lender
due to the gross negligence or willful misconduct of Administrative Agent and/or
any Lender. Administrative Agent shall, after payment of any amounts due to
any
Special Advance Lender pursuant to the terms of Section 13.11(c)
above,
set-off against any payments due to such Defaulting Lender for the claims of
Administrative Agent and the other Non-Defaulting Lenders pursuant to this
indemnity.
(f) A
Defaulting Lender may cure a default arising out its failure to fund its
Proportionate Share of an advance or to make any respective Loan required
pursuant to this Agreement, and subject to the following, upon such cure shall
no longer be deemed to be a Defaulting Lender, if, within five (5) days (the
"Default
Cure Period")
of
such default, it pays the full amount of the Unpaid Amount, together with
interest thereon in respect of each day during the period commencing on the
date
such Advanced Amount was so paid by the Special Advance Lender until the date
the Special Advance Lender recovers such amount at a rate per annum equal to
the
Federal Funds Rate in the event such cure is made within three (3) Business
Days
of such default; provided,
however,
if such
Defaulting Lender fails to cure such default within such three (3) Business
Days, the Special Advance Lender shall be entitled to recover, and such
Defaulting Lender shall pay, such amount, on demand from Administrative Agent,
together with interest thereon in respect of each day during the period
commencing on such third (3rd) Business Day until the date the Special Advance
Lender recovers such amount at a rate per annum equal to the Default Rate for
each such day. If a Defaulting Lender pays the Unpaid Amount and interest due
thereon within the Default Cure Period (or thereafter with the consent of
Administrative Agent), such Defaulting Lender nonetheless shall be bound by
any
amendment to or waiver of any provision of, or any action taken or omitted
to be
taken by Administrative Agent and/or the other Lenders under, any Loan Document
which is made subsequent to the Lender's becoming a Defaulting Lender and prior
to its curing the default as provided in this Section 13.11(f);
provided that such amendment or waiver of action was taken in accordance with
the provisions of this Agreement. A Defaulting Lender shall have absolutely
no
right to cure any default after the expiration of the Default Cure Period unless
Administrative Agent, in its sole discretion, elects to permit such
cure.
(g) If
any
Lender becomes a Defaulting Lender and none of the other Lenders becomes a
Special Advance Lender pursuant to Section 13.11(a),
the
Borrower shall have the right, provided there exists no Default or Event of
Default that has not arisen as a result of the Defaulting Lender's failure
to
fund, to cause another financial institution acceptable to Administrative Agent
to assume the Defaulting Lender's obligations with respect to the Advance Amount
on the then-existing terms and conditions of the Loan Documents (such
replacement institution, a "Replacement
Lender").
It
shall be a condition to such assumption that the Replacement Lender concurrently
assumes the obligations of the Defaulting Lender with respect to the unfunded
portion of the Commitments of such Defaulting Lender. Such assumption shall
be
pursuant to a written instrument reasonably satisfactory to Administrative
Agent. Upon such assumption, the Replacement Lender shall become a "Lender"
for
all purposes hereunder, with a Loan Commitment in an amount equal to the Advance
Amount, and the Defaulting Lender's Loan Commitment shall automatically be
reduced by the Advance Amount. In connection with the foregoing, the Borrower
shall execute and deliver to the Replacement Lender and the Defaulting Lender
Replacement Notes. Such Replacement Notes shall be in amounts equal to, in
the
case of the Replacement Lender's note, the Advance Amount and, in the case
of
the Defaulting Lender's note, its Commitment, as reduced as aforesaid. Such
replacement notes shall constitute "Notes" and the obligations evidenced thereby
shall be secured by the Security Instrument. In connection with the Borrower's
execution of replacement notes as aforesaid, the Borrower shall deliver to
Administrative Agent such evidence of the due authorization, execution and
delivery of the replacement notes and any related documents as Administrative
Agent may reasonably request. The execution and delivery of replacement notes
as
required above shall be a condition precedent to any further advances of Loan
proceeds. Upon receipt of its replacement note, the Defaulting Lender will
return to the Borrower its note(s) that was replaced; provided that the delivery
of a replacement note to the Defaulting Lender pursuant to this
Section 13.11(g)
shall
operate to void and replace the note(s) previously held by the Defaulting Lender
regardless of whether or not the Defaulting Lender returns same as required
hereby.
(h) In
addition to the foregoing, in the event the Defaulting Lender has not cured
such
default within the Default Cure Period, Administrative Agent (unless the Lender
serving in the capacity of Administrative Agent is the Defaulting Lender) and
the Non-Defaulting Lenders, shall, in accordance with the priority established
pursuant to Section 13.11(a)
above,
be entitled to purchase such Defaulting Lender's entire Loan Commitment,
excluding accrued and unpaid interest thereon, for a purchase price equal to
the
outstanding principal balance of all Loans which have been funded by such
Defaulting Lender as of the date of such purchase.
(i) The
Borrower, Administrative Agent and Lenders shall, at the Borrower's expense
solely with respect to Administrative Agent's reasonable costs and expenses
in
connection therewith, execute such modifications to the Loan Documents as shall,
in the reasonable judgment of Administrative Agent, be necessary in order to
effect the substitution of Lenders in accordance with the foregoing provisions
of this Section 13.11(i).
The
Lenders shall reasonably cooperate with the Borrower's attempts to obtain a
Replacement Lender, but they shall not be obligated to modify the Loan Documents
in connection therewith, other than modifications pursuant to the immediately
preceding paragraph.
13.12 Amendments
Concerning Agency Functions
.
Notwithstanding anything to the contrary contained in this Agreement,
Administrative Agent shall not be bound by any Modification of this Agreement
or
any other Loan Document which affects its duties, rights, and/or functions
hereunder or thereunder unless it shall have given its prior written consent
thereto.
13.13 Liability
of Administrative Agent
.
Administrative Agent shall not have any liabilities or responsibilities to
the
Borrower on account of the failure of any Lender (other than Administrative
Agent in its capacity as a Lender) to perform its obligations hereunder or
to
any Lender on account of the failure of the Borrower to perform its obligations
hereunder or under any other Loan Document.
13.14 Transfer
of Agency Function
.
Without
the consent of the Borrower or any Lender, Administrative Agent may at any
time
or from time to time transfer its functions as Administrative Agent hereunder
to
any of its offices wherever located in the United States; provided that
Administrative Agent shall promptly notify the Borrower and the Lenders
thereof.
13.15 Sharing
of Payments, Etc.
If
any
Lender shall obtain from the Borrower payment of any principal of or interest
on
any Loan owing to it or payment of any other amount under this Agreement or
any
other Loan Document through the exercise of any right of set-off, banker's
lien
or counterclaim or similar right or otherwise (other than from Administrative
Agent as provided herein), and, as a result of such payment, such Lender shall
have received a greater percentage of the principal of or interest on the Loans
or such other amounts then due hereunder or thereunder by the Borrower to such
Lender than the percentage received by any other Lender, it shall promptly
purchase from such other Lenders participations in (or, if and to the extent
specified by such Lender, direct interests in) the Loans or such other amounts,
respectively, owing to such other Lenders (or in interest due thereon, as the
case may be) in such amounts, and make such other adjustments from time to
time
as shall be equitable, to the end that all the Lenders shall share the benefit
of such excess payment (net of any expenses that may be incurred by such Lender
in obtaining or preserving such excess payment) pro rata in accordance with
the
unpaid principal of and/or interest on the Loans or such other amounts,
respectively, owing to each of the Lenders. To such end, all the Lenders shall
make appropriate adjustments among themselves (by the resale of participations
sold or otherwise) if such payment is rescinded or must otherwise be restored.
Each Lender agrees that it shall turn over to Administrative Agent (for
distribution by Administrative Agent to the other Lenders in accordance with
the
terms of this Agreement) any payment (whether voluntary or involuntary, through
the exercise of any right of setoff or otherwise) on account of the Loans held
by it in excess of its ratable portion of payments on account of the Loans
obtained by all the Lenders. Nothing contained herein shall require any Lender
to exercise any such right or shall affect the right of any Lender to exercise,
and retain the benefits of exercising, any such right with respect to any other
indebtedness or Obligation of the Borrower. If, under any applicable bankruptcy,
insolvency or other similar law, any Lender receives a secured claim in lieu
of
a set-off to which Section 14.10
applies,
then such Lender shall, to the extent practicable, exercise its rights in
respect of such secured claim in a manner consistent with the rights of the
Lenders entitled under Section 14.10
to share
in the benefits of any recovery on such secured claim.
13.16 Bankruptcy
of Borrower
.
In the
event a bankruptcy or other insolvency proceeding is commenced by or against
the
Borrower or any Guarantor, Administrative Agent shall have the sole and
exclusive right to file and pursue a joint proof of claim on behalf of the
Lenders. Each Lender irrevocably waives its right to file or pursue a separate
proof of claim in any such proceedings.
13.17 Termination
.
The
rights and obligations of Administrative Agent and the Lenders shall terminate
when the Obligations of Borrower hereunder have been paid and finally discharged
in full and the obligations of the Lenders to advance funds to the Borrower
under this Agreement are terminated or, if the Administrative Agent or
Administrative Agent's nominee takes title to the Project by foreclosure or
conveyance in lieu of foreclosure, when the Project is thereafter sold to a
third-party purchaser. All indemnification provisions in favor of Administrative
Agent herein and in the other Loan Documents shall survive the termination
hereof.
ARTICLE
XIV
MISCELLANEOUS
14.1 Non-Waiver;
Remedies Cumulative
.
No
failure on the part of Administrative Agent, any Lender or Borrower to exercise
and no delay in exercising, and no course of dealing with respect to, any right,
power or privilege under this Agreement or any other Loan Documents shall
operate as a waiver thereof, nor shall any single or partial exercise of any
right, power or privilege under this Agreement or any other Loan Documents
preclude any other or further exercise thereof or the exercise of any other
right, power or privilege. The remedies provided herein and the other Loan
Documents are cumulative and not exclusive of any remedies provided by
law.
14.2 Notices.
(a) All
notices, requests, demands, statements, authorizations, approvals, directions,
consents and other communications provided for herein and under the Loan
Documents (to which Borrower is a party) shall be given or made in writing
and
shall be deemed sufficiently given or served for all purposes as of the date
(i)
when hand delivered (provided that delivery shall be evidenced by a receipt
executed by or on behalf of the addressee), (ii) one (1) Business Day after
being sent by reputable overnight courier service (with delivery evidenced
by
written receipt) for next Business Day delivery, or (iii) with a simultaneous
delivery by one of the methods in clause (i) or (ii) above, by facsimile, when
sent, with confirmation and a copy sent by first class mail, in each case
addressed to the intended recipient at the address specified below; or, as
to
any party, at such other address as shall be designated by such party in a
notice to each other party hereto. Unless otherwise expressly provided in the
Loan Documents, Borrower shall only be required to send notices, requests,
demands, statements, authorizations, approvals, directions, consents and other
communications to Administrative Agent on behalf of all of the
Lenders.
If
to
Borrower: The
Chalets at the Lodge at Vail, LLC
c/o
Vail
Resorts Development Co.
000
Xxxxxxxxxxx Xxxxxxxx, Xxxxx 0000
Xxxxxxxxxx,
XX 00000
Attention: Xxxxxxx
X. Xxxxx
Facsimile: 000-000-0000
With
a
copy to: Holme
Xxxxxxx & Xxxx LLP
0000
Xxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxx,
XX 00000
Attention: Xxxxxx
X. Xxxx, Esq.
Facsimile: 303-866-0200
If
to
Beneficiary: Xxxxx
Fargo Bank, National Association
Denver
Real Estate Group
0000
X.
Xxxxxx, Xxxxx 0000
Xxxxxx,
XX 00000
Attention: Xx.
Xxxx X. XxXxxxx
Facsimile: 000-000-0000
With
a
copy to: Xxxxx
Xxxxxxx & Xxxxxxxxxx
0000
Xxxxxxxx, Xxxxx 0000
Xxxxxx,
XX 00000
Attention:
Xxxxxx X. Xxxxxxxx, Esq.
Facsimile:
000-000-0000
(b) Notices
and other communications to the Lenders hereunder may be delivered or furnished
by electronic communications pursuant to procedures approved by Administrative
Agent; provided that the foregoing shall not apply to notices pursuant to
Article II
unless
otherwise agreed by Administrative Agent and the applicable Lender.
Administrative Agent or Borrower may, in its discretion, agree to accept notices
and other communications to it hereunder by electronic communications pursuant
to procedures approved by it; provided that approval of such procedures may
be
limited to particular notices or communications.
14.3 Expenses,
Etc.
Borrower
agrees to pay on demand or reimburse on demand to the applicable party: (a)
all
out-of-pocket costs and expenses of Administrative Agent (including, but not
limited to, the reasonable legal fees and expenses of its counsel, (ii) due
diligence expenses, including title insurance reports and policies, surveys,
title and lien searches, appraisals (including the Appraisal and any additional
Appraisals ordered as a result of Borrower's election to extend the Scheduled
Maturity Date pursuant to Section 4.1),
the
Environmental Report, the Construction Consultant's Construction, Cost and
Plan
Review, (iii) accounting firms, (iv) insurance consultants and (v) the
Construction Consultant) in connection with (1) the negotiation, preparation,
execution and delivery of this Agreement and the other Loan Documents and the
syndication, making and administration of the Loans hereunder, (2) the creation,
perfection or protection of the Liens to be created by the Security Documents,
(3) the negotiation or preparation of any Modification or waiver of any of
the
terms of this Agreement or any of the other Loan Documents (whether or not
consummated) and the construction of the Improvements and (4) Administrative
Agent's duties under this Agreement and the other Loan Documents; (b) all
reasonable out-of-pocket costs and expenses of the Lenders and Administrative
Agent (including the reasonable fees and expenses of legal counsel in connection
with (i) any Default and any enforcement or collection proceedings resulting
therefrom, including all manner of participation in or other involvement with
(1) bankruptcy, insolvency, receivership, foreclosure, winding up or liquidation
proceedings, (2) judicial or regulatory proceedings and (3) workout,
restructuring or other negotiations or proceedings (whether or not the workout,
restructuring or transaction contemplated thereby is consummated) and (ii)
the
enforcement of this Section 14.3;
and (c)
all transfer, stamp, documentary or other similar taxes, assessments or charges
levied by any governmental or revenue authority in respect of this Agreement
or
any of the other Loan Documents or any other document referred to herein or
therein and all costs, expenses, taxes, assessments and other charges incurred
in connection with any filing, registration, recording or perfection of any
security interest contemplated by any Security Document or any other document
referred to therein.
14.4 Indemnification
.
Borrower hereby agrees to (a) indemnify the Indemnified Parties from, and hold
each of them harmless, from and against all damages, losses, claims, actions,
liabilities (or actions, investigations or other proceedings commenced or
threatened in respect thereof) penalties, fines, costs and expenses including
reasonable attorneys' fees and expenses (collectively and severally,
"Losses")
which
may be imposed upon, asserted against or incurred or paid by any of them
resulting from the claims of any third party relating to or arising out of
(i)
the Project, (ii) any of the Loan Documents or the Transactions, (iii) any
ERISA
Events, (iv) any Environmental Losses, (v) any defective workmanship or
materials occurring in the construction of the Improvements or any Restoration
and (vi) any act performed or permitted to be performed by any Indemnified
Party
under any of the Loan Documents, except for Losses to the extent determined
by a
court of competent jurisdiction to be caused by the gross negligence or willful
misconduct of an Indemnified Party (but the effect of this exception only
eliminates the liability of Borrower with respect to the Indemnified Party
(and
if such Indemnified Party is not a Lender, the Lender on whose behalf such
Indemnified Party was acting) to the extent such Indemnified Party has been
adjudged to have so acted and not with respect to any other Indemnified Party),
and (b) reimburse each Indemnified Party on demand for any expenses (including
attorneys' fees and disbursements) reasonably incurred in connection with the
investigation of, preparation for or defense of any actual or threatened claim,
action or proceeding arising therefrom (excluding any action or proceeding
where
the Indemnified Party is not a party to such action or proceeding out of which
any such expenses arise unless such Indemnified Party is required to participate
or respond in connection with such action or proceeding (e.g., by way of
deposition, discovery requests, testimony, subpoena or similar reason)). The
Obligations shall not be considered to have been paid in full unless all
obligations of Borrower under this Section 14.4
shall
have been fully performed (except for contingent indemnification obligations
for
which no claim has actually been made pursuant to this Agreement). This
Section 14.4
shall
survive repayment in full of the Loans and the assignment, sale or other
transfer of Administrative Agent's or any Lender's interest
hereunder.
14.5 Amendments,
Etc.
Except
as
otherwise expressly provided in this Agreement or the other Loan Documents,
and
subject to the provisions of Sections 13.9
and 13.11(a),
this
Agreement and the other Loan Documents may be Modified only by an instrument
in
writing signed by Borrower and the Required Lenders, or by Borrower and
Administrative Agent acting with the consent of the Required Lenders.
Notwithstanding anything to the contrary contained in this Agreement or the
other Loan Documents, Administrative Agent is hereby authorized to enter into
Modifications to the Loan Documents which are ministerial in nature, including
the preparation and execution of Uniform Commercial Code forms, and Assignments
and Acceptances.
14.6 Successors
and Assigns
.
This
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and permitted assigns.
14.7 Assignments
and Participations.
(a) Consent
Required for Assignments by Borrower.
Borrower may not assign any of its rights or obligations hereunder or under
the
Loan Documents without the prior consent of all of the Lenders and
Administrative Agent.
(b) Assignments
to Operation of Law or Pledges.
Notwithstanding anything to the contrary herein, each Lender shall have the
right at any time and from time to time, to (i) assign or participate an
undivided interest in the Loan, in minimum amounts of Ten Million and No/100
Dollars ($10,000,000.00), and upon payment to Administrative Agent of an
assignment or participation fee of Three Thousand Five Hundred and No/100
Dollars ($3,500.00) for each such assignment or participation to any Affiliate
of such Lender or to a successor entity by reason of any merger affecting
Lender, or to an Eligible Assignee (ii) pledge or assign the same to any Federal
Reserve Bank in accordance with applicable law as collateral security pursuant
to Regulation A of the Board of Governors of the Federal Reserve System and
any
operating circular issued by such Federal Reserve Bank; provided that (1) no
Lender shall, as between Borrower and such Lender, be relieved of any of its
obligations hereunder as a result of any such assignment and pledge and (2)
in
no event shall such Federal Reserve Bank be considered to be a "Lender" or
be
entitled to require the assigning Lender to take or omit to take any action
hereunder.
(c) Cooperation
with Syndication Efforts.
Borrower acknowledges that a portion of the Loan Commitments will be syndicated
to one or more Lenders (the "Syndication")
and in
connection therewith, the Borrower will take all actions as Administrative
Agent
and the Lenders may request to assist in the Syndication effort, including
the
execution by Borrower of Replacement Notes.
(d) Provision
of Information to Assignees and Participants.
A
Lender may furnish any information concerning Borrower, the Project, the Loans
and any Guarantor in the possession of such Lender from time to time to
assignees, pledgees and participants (including prospective assignees, pledgees
and participants), subject, however, to the party receiving such information
confirming in writing that such party and such information is subject to the
provisions of Section 14.22.
14.8 Survival
.
The
obligations of Borrower under Sections 5.1,
5.5,
5.7,
14.3,
14.4,
and
14.11,
and the
obligations of the Lenders under Sections 13.5
and
13.11(e),
shall
survive the repayment of the Obligations and the termination of the Commitments
and, in the case of any Lender that may assign any interest under the Loan
Documents in accordance with the terms thereof including any Lender's interest
in its Commitment or Loans hereunder, shall survive the making of such
assignment, notwithstanding that such assigning Lender may cease to be a
"Lender" hereunder. In addition, each representation and warranty made, or
deemed to be made by a Request for Loan Advance, herein or pursuant hereto
by
Borrower shall survive the making of such representation and warranty, and
no
Lender shall be deemed to have waived, by reason of making any Loan, any Default
that may arise by reason of such representation or warranty proving to have
been
false or misleading, notwithstanding that such Lender or Administrative Agent
may have had notice or knowledge or reason to believe that such representation
or warranty was false or misleading at the time such Loan was made.
14.9 Multiple
Copies
.
Each
document to be delivered to Administrative Agent hereunder or under any other
Loan Document shall be delivered in duplicate.
14.10 Right
of Set-off.
(a) Upon
the
occurrence and during the continuance of any Event of Default, each of the
Lenders is, subject (as between the Lenders) to the provisions of
Section 14.10(c)
of this
Section 14.10,
hereby
authorized at any time and from time to time, without notice to Borrower (any
such notice being expressly waived by Borrower) and to the fullest extent
permitted by law, to set-off and apply any and all deposits (general or special,
time or demand, provisional or final) at any time held, and other indebtedness
at any time owing, by such Lender in any of its offices, in Dollars or in any
other currency, to or for the credit or the account of Borrower against any
and
all of the respective obligations of Borrower now or hereafter existing under
the Loan Documents, irrespective of whether or not such Lender or any other
Lender shall have made any demand hereunder and although such obligations may
be
contingent or unmatured and such deposits or indebtedness may be unmatured.
Each
Lender hereby acknowledges that the exercise by any Lender of offset, set-off,
banker's lien, or similar rights against any deposit or other indebtedness
of
Borrower whether or not located in Colorado or any other state with certain
laws
restricting lenders from pursuing multiple collection methods, could result
under such laws in significant impairment of the ability of all the Lenders
to
recover any further amounts in respect of the Loan. Therefore, each Lender
agrees that no Lender shall exercise any such right of set-off, banker's lien,
or otherwise, against any assets of Borrower (including all general or special,
time or demand, provisional or other deposits and other indebtedness owing
by
such Lender to or for the credit or the account of Borrower) without the prior
written consent of Administrative Agent and the Required Lenders.
(b) Each
Lender shall promptly notify Borrower and Administrative Agent after any such
set-off and application; provided that the failure to give such notice shall
not
affect the validity of such set-off and application. The rights of the Lenders
under this Section 14.10
are in
addition to other rights and remedies (including other rights of set-off) which
the Lenders may have.
(c) If
an
Event of Default has resulted in the Loans becoming due and payable prior to
the
stated maturity thereof, each Lender agrees that it shall turn over to
Administrative Agent any payment (whether voluntary or involuntary, through
the
exercise of any right of setoff or otherwise) on account of the Loans held
by it
in excess of its ratable portion of payments on account of the Loans obtained
by
all the Lenders.
14.11 Brokers
.
Borrower hereby represents to Administrative Agent and each Lender that it
has
not dealt with any broker, underwriters, placement agent, or finder in
connection with the Transactions. Borrower hereby agrees to indemnify and hold
Administrative Agent and each Lender harmless from and against any and all
claims, liabilities, costs and expenses of any kind in any way relating to
or
arising from a claim by any Person that such Person acted on behalf of Borrower
in connection with the Transactions.
14.12 Estoppel
Certificates.
(a) Borrower,
within ten (10) Business Days after Administrative Agent's request, shall
furnish to Administrative Agent a written statement, duly acknowledged,
certifying to Administrative Agent and each Lender and/or, subject to the terms
of Section 14.7,
any
proposed assignee of any portion of the interests hereunder: (i) the amount
of
the Outstanding Principal Amount then owing under this Agreement and each of
the
Notes, (ii) the terms of payment and Scheduled Maturity Date of the Loans (or
if
earlier, the Maturity Date), (iii) the date to which interest has been paid
under each of the Notes, (iv) whether any offsets or defenses exist against
the
repayment of the Loans and, if any are alleged to exist, a detailed description
thereof, (v) the extent to which the Loan Documents have been Modified and
(vi)
such other information as Administrative Agent shall reasonably
request.
(b) Administrative
Agent, within ten (10) Business Days after Borrower's reasonable request
therefor, shall furnish to Borrower a written statement, duly acknowledged,
certifying to any prospective permitted purchaser of an interest in Borrower
or
any prospective permitted lender to Borrower: (i) the amount of the Outstanding
Principal Amount, (ii) the terms of payment and Scheduled Maturity Date of
the
Loans (or if earlier, the Maturity Date), (iii) the date to which interest
has
been paid under each of the Notes, (iv) whether, to the actual knowledge of
the
Person signing on behalf of Administrative Agent, there are any Defaults on
the
part of Borrower hereunder or under any of the other Loan Documents, and, if
any
are alleged to exist, a detailed description thereof, (v) the extent to which
the Loan Documents have been Modified, and (vi) such other information as
Borrower shall reasonably request.
14.13 Preferences
.
To the
extent that Borrower makes a payment or payments to Administrative Agent and/or
any Lender, which payment or proceeds or any part thereof are subsequently
invalidated, declared to be fraudulent or preferential, set aside or required
to
be repaid to a trustee, receiver or any other party under any bankruptcy law,
state or federal law, common law or equitable cause, then, to the extent of
such
payment or proceeds received, the obligations hereunder or part thereof intended
to be satisfied shall be revived and continue in full force and effect, as
if
such payment or proceeds had not been received by Administrative Agent or a
Lender, as the case may be.
14.14 Certain
Waivers
.
Borrower hereby irrevocably and unconditionally waives (a) notice of any actions
taken by Administrative Agent or any Lender hereunder or under any other Loan
Document or any other agreement or instrument relating thereto except to the
extent (i) otherwise expressly provided herein or therein or (ii) Borrower
is
not, pursuant to Applicable Law, permitted to waive the giving of notice, (b)
all other notices, demands and protests, and all other formalities of every
kind
in connection with the enforcement of Borrower's obligations hereunder and
under
the other Loan Documents, the omission of or delay in which, but for the
provisions of this Section 14.14,
might
constitute grounds for relieving Borrower of any of its obligations hereunder
or
under the other Loan Documents, except to the extent that Borrower is not,
pursuant to Applicable Law, permitted to waive the giving of notice, (c) any
requirement that Administrative Agent or any Lender protect, secure, perfect
or
insure any lien on any collateral for the Loans or exhaust any right or take
any
action against Borrower or any other Person or against any collateral for the
Loans, (d) any right or claim of right to cause a marshalling of Borrower's
assets and (e) all rights of subrogation or contribution, whether arising by
contract or operation of law or otherwise by reason of payment by Borrower
pursuant hereto or to the other Loan Documents.
14.15 Entire
Agreement
.
This
Agreement, the Notes and the other Loan Documents constitute the entire
agreement between Borrower, Administrative Agent and the Lenders with respect
to
the subject matter hereof and all understandings, oral representations and
agreements heretofore or simultaneously had among the parties are merged in,
and
are contained in, such documents and instruments.
14.16 Severability
.
If any
provision of this Agreement shall be held by any court of competent jurisdiction
to be unlawful, void or unenforceable for any reason as to any Person or
circumstance, such provision or provisions shall be deemed severable from and
shall in no way affect the enforceability and validity of the remaining
provisions of this Agreement.
14.17 Captions
.
The
table of contents and captions and section headings appearing herein are
included solely for convenience of reference and are not intended to affect
the
interpretation of any provision of this Agreement.
14.18 Counterparts
.
This
Agreement may be executed in any number of counterparts, all of which taken
together shall constitute one and the same instrument and any of the parties
hereto may execute this Agreement by signing any such counterpart.
14.19 GOVERNING
LAW
.
THIS
AGREEMENT, THE NOTES AND THE OTHER LOAN DOCUMENTS SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF COLORADO, EXCEPT TO THE
EXTENT OTHERWISE SPECIFIED IN ANY OF THE LOAN DOCUMENTS.
14.20 SUBMISSION
TO JURISDICTION
.
BORROWER, ADMINISTRATIVE AGENT AND EACH OF THE LENDERS HEREBY IRREVOCABLY (A)
AGREE THAT ANY SUIT, ACTION OR OTHER LEGAL PROCEEDING ARISING OUT OF OR RELATING
TO THIS AGREEMENT, THE NOTES, THE GUARANTY, ANY SECURITY DOCUMENT, OR ANY OTHER
LOAN DOCUMENT MAY BE BROUGHT IN A COURT OF RECORD IN THE STATE OF COLORADO,
CITY
AND COUNTY OF DENVER OR IN THE COURTS OF THE UNITED STATES OF AMERICA LOCATED
IN
SUCH STATE AND COUNTY, (B) CONSENT TO THE JURISDICTION OF EACH SUCH COURT IN
ANY
SUCH SUIT, ACTION OR PROCEEDING, (C) WAIVE ANY OBJECTION WHICH IT MAY HAVE
TO
THE LAYING OF VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING IN ANY OF SUCH COURTS
AND ANY CLAIM THAT ANY SUCH SUIT, ACTION OR PROCEEDING HAS BEEN BROUGHT IN
AN
INCONVENIENT FORUM AND (D) AGREE AND CONSENT THAT ALL SERVICE OF PROCESS IN
ANY
SUCH SUIT, ACTION OR PROCEEDING IN COLORADO STATE OR FEDERAL COURT SITTING
IN
DENVER, MAY BE MADE BY CERTIFIED OR REGISTERED MAIL, RETURN RECEIPT REQUESTED,
DIRECTED TO BORROWER, ADMINISTRATIVE AGENT OR A LENDER, AS APPLICABLE, AT THE
ADDRESS FOR NOTICES PURSUANT TO SECTION 14.2
HEREOF,
AND SERVICE SO MADE SHALL BE COMPLETE FIVE (5) DAYS AFTER THE SAME SHALL HAVE
BEEN SO MAILED. NOTHING IN THIS SECTION SHALL AFFECT THE RIGHT OF ADMINISTRATIVE
AGENT OR ANY LENDER TO SERVE LEGAL PROCESS IN ANY OTHER MANNER PERMITTED BY
LAW
OR AFFECT THE RIGHT OF ADMINISTRATIVE AGENT OR ANY LENDER TO BRING ANY SUIT,
ACTION OR PROCEEDING AGAINST BORROWER OR THE PROPERTY OF BORROWER IN THE COURTS
OF ANY OTHER JURISDICTIONS.
14.21 WAIVER
OF JURY TRIAL; COUNTERCLAIM
.
EACH OF
BORROWER, ADMINISTRATIVE AGENT AND THE LENDERS HEREBY IRREVOCABLY WAIVES, TO
THE
FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY
IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT, THE NOTES,
THE GUARANTY, THE OTHER LOAN DOCUMENTS OR THE TRANSACTIONS. BORROWER FURTHER
HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES, IN CONNECTION WITH ANY LEGAL
PROCEEDING BROUGHT BY OR ON BEHALF OF ADMINISTRATIVE AGENT OR THE LENDERS WITH
RESPECT TO THIS AGREEMENT, THE NOTES, THE OTHER LOAN DOCUMENTS OR OTHERWISE
IN
RESPECT OF THE LOANS, ANY AND EVERY RIGHT BORROWER MAY HAVE TO (A) INTERPOSE
ANY
COUNTERCLAIM THEREIN, OTHER THAN A COMPULSORY COUNTERCLAIM, AND (B) HAVE THE
SAME CONSOLIDATED WITH ANY OTHER OR SEPARATE SUIT, ACTION OR PROCEEDING. NOTHING
CONTAINED IN THE IMMEDIATELY PRECEDING SENTENCE SHALL PREVENT OR PROHIBIT
BORROWER FROM INSTITUTING OR MAINTAINING A SEPARATE ACTION AGAINST
ADMINISTRATIVE AGENT OR THE LENDERS WITH RESPECT TO ANY ASSERTED
CLAIM.
14.22 Confidentiality
.
Each of
Administrative Agent and the Lenders agrees to maintain the confidentiality
of
the Information (as defined below), except that Information that may be
disclosed (a) to its Subsidiaries and Affiliates' directors, officers, employees
and agents, including accountants, legal counsel and other advisors (it being
understood that the Persons to whom such disclosure is made will be informed
of
the confidential nature of such Information and instructed to keep such
Information confidential), (b) to the extent requested by any regulatory
authority, (c) to the extent required by applicable laws or regulations or
by
any subpoena or similar legal process, (d) to any other party to this Agreement,
(e) in connection with the exercise of any remedies hereunder or under any
other
Loan Document or any suit, action or proceeding relating to this Agreement
or
any other Loan Document or the enforcement of rights hereunder or thereunder,
(f) subject to an agreement containing provisions substantially the same as
those of this Section 14.22,
to (i)
any assignee or pledgee of or Participant in, or any prospective assignee or
pledgee of or Participant in, any of its rights or obligations under this
Agreement or (ii) any actual or prospective counterparty (or its advisors)
to
any swap or derivative transaction relating to Borrower and its obligations,
(g)
with the consent of Borrower or (h) to the extent such Information (i) becomes
publicly available other than as a result of a breach of this
Section 14.22
or (ii)
becomes available to Administrative Agent or any Lender on a nonconfidential
basis from a source other than Borrower. For the purposes of this
Section 14.22,
"Information"
shall
mean all information received from or on behalf of Borrower relating to
Borrower, its Subsidiaries or Affiliates or their respective businesses, other
than any such information that is available to Administrative Agent or any
Lender on a nonconfidential basis prior to disclosure by Borrower; provided
that
in the case of information received from Borrower after the date hereof, such
information is clearly identified at the time of delivery as confidential.
Any
Person required to maintain the confidentiality of Information as provided
in
this Section 14.22
shall be
considered to have complied with its obligation to do so if such Person has
exercised the same degree of care to maintain the confidentiality of such
Information as such Person would accord to its own confidential information.
Notwithstanding anything herein to the contrary, the information subject to
this
Section 14.22
shall
not include, and Administrative Agent and each Lender may disclose without
limitation of any kind, any information with respect to the "tax treatment"
and
"tax structure" (in each case, within the meaning of Treasury Regulation
Section 1.6011-4) of the transactions contemplated hereby and all materials
of any kind (including opinions or other tax analyses) that are provided to
Administrative Agent or such Lender relating to such tax treatment and tax
structure; provided that with respect to any document or similar item that
in
either case contains information concerning the tax treatment or tax structure
of the transactions as well as other information, this sentence shall only
apply
to such portions of the document or similar item that relate to the tax
treatment or tax structure of the Loans and transactions contemplated
hereby.
14.23 Usury
Savings Clause
.
It is
the intention of Borrower, Administrative Agent and the Lenders to conform
strictly to the usury and similar laws relating to interest payable on loans
from time to time in force, and all Loan Documents between Borrower,
Administrative Agent and the Lenders, whether now existing or hereafter arising
and whether oral or written, are hereby expressly limited so that in no
contingency or event whatsoever, whether by acceleration of maturity hereof
or
otherwise, shall the amount paid or agreed to be paid in the aggregate to the
Lenders as interest (whether or not designated as interest, and including any
amount otherwise designated by or deemed to constitute interest by a court
of
competent jurisdiction) hereunder or under the other Loan Documents or in any
other agreement given to secure the Loans, or in any other document evidencing,
securing or pertaining to the Loans, exceed the maximum amount (the "Maximum
Rate") permissible under Applicable Laws. If under any circumstances whatsoever
fulfillment of any provision hereof, of this Agreement or of the other Loan
Documents, at the time performance of such provisions shall be due, shall
involve exceeding the Maximum Rate, then, ipso facto, the obligation to be
fulfilled shall be reduced to the Maximum Rate. For purposes of calculating
the
actual amount of interest paid and/or payable hereunder in respect of laws
pertaining to usury or such other laws, all sums paid or agreed to be paid
to
the Lenders for the use, forbearance or detention of the Loans evidenced hereby,
outstanding from time to time shall, to the extent permitted by Applicable
Law,
be amortized, pro-rated, allocated and spread from the date of disbursement
of
the proceeds of the Notes until payment in full of all of such indebtedness,
so
that the actual rate of interest on account of such Loans is uniform through
the
term hereof. If under any circumstances any Lender shall ever receive an amount
which would exceed the Maximum Rate, such amount shall be deemed a payment
in
reduction of the principal amount of the applicable Loans and shall be treated
as a voluntary prepayment under this Agreement and shall be so applied in
accordance with the provisions of this Agreement, or if such excessive interest
exceeds the outstanding amount of the applicable Loans and any other
Obligations, the excess shall be deemed to have been a payment made by mistake
and shall be refunded to Borrower.
14.24 Controlled
Accounts
.
Borrower hereby agrees with Administrative Agent, as to any Controlled Account
into which this Agreement requires Borrower to deposit funds, as
follows:
(a) Establishment
and Maintenance of the Controlled Account.
(i) Each
Controlled Account (1) shall be a separate and identifiable account from all
other funds held by the Depository Bank and (2) shall contain only funds
required to be deposited pursuant to this Agreement. Any interest which may
accrue on the amounts on deposit in a Controlled Account shall be added to
and
shall become part of the balance of such Controlled Account. Borrower,
Administrative Agent and the applicable Depository Bank shall enter into an
agreement (the "Controlled
Account Agreement"),
in
form and content acceptable to Administrative Agent which shall govern the
Controlled Account and the rights, duties and obligations of each party to
the
Controlled Account Agreement.
(ii) The
Controlled Account Agreement shall provide that (1) the Controlled Account
shall
be established in the name of Administrative Agent (on behalf of the Lenders),
(2) the Controlled Account shall be subject to the sole dominion, control and
discretion of Administrative Agent, and (3) neither Borrower nor any other
Person, including, without limitation, any Person claiming on behalf of or
through Borrower, shall have any right or authority, whether express or implied,
to make use of or withdraw, or cause the use or withdrawal of, any proceeds
from
the Controlled Account or any of the other proceeds deposited in the Controlled
Account, except as expressly provided in this Agreement or in the Controlled
Account Agreement.
(b) Deposits
to and Disbursements from the Controlled Account.
All
deposits to and disbursements of all or any portion of the deposits to the
Controlled Account shall be in accordance with this Agreement and the Controlled
Account Agreement. Any disbursement of funds held in any Controlled Account
shall be subject to the satisfaction of all applicable conditions precedent
to
the making of a Loan advance by the Lenders hereunder (including, without
limitation, that no Event of Default then exists, and that Borrower shall have
submitted a written request for such amount in accordance with the procedures
generally applicable to advances of the Loan). Borrower hereby agrees to pay
any
and all fees charged by Depository Bank in connection with the maintenance
of
the Controlled Account and the performance of its duties. Under no circumstances
shall Administrative Agent or the Lenders be obligated to make advances of
the
Loan while funds are available in a Controlled Account to pay for costs of
the
Construction Work.
(c) Security
Interest.
Borrower hereby grants a first priority security interest in favor of
Administrative Agent for the ratable benefit of the Lenders in each Controlled
Account and all financial assets and other property and sums at any time held,
deposited or invested therein, and all security entitlements and investment
property relating thereto, together with any interest or other earnings thereon,
and all proceeds thereof, whether accounts, general intangibles, chattel paper,
deposit accounts, instruments, documents or securities (collectively,
"Controlled
Account Collateral"),
together with all rights of a secured party with respect thereto (even if no
further documentation is requested by Administrative Agent or the Lenders or
executed by Borrower with respect thereto).
14.25 Financing
Statements
.
Borrower authorizes Administrative Agent to file such financing statements
(and
any continuations statements with respect thereto) under the Uniform Commercial
Code as Administrative Agent may deem necessary in order to perfect or maintain
the perfection of any security interest granted or to be granted to
Administrative Agent pursuant to any of the Loan Documents, in such
jurisdictions as Administrative Agent may elect.
14.26 Unavoidable
Delay
.
If the
work of construction is directly affected and delayed by an Unavoidable Delay,
Borrower must notify Administrative Agent in writing within ten (10) Business
Days after the occurrence of any such Unavoidable Delay. So long as no Event
of
Default has occurred and is continuing and such notice has been given in a
timely manner, and provided further that in each case, (a) the cause of the
Unavoidable Delay is not within the control of Borrower, (b) after giving effect
to the consequences of each such delay, the Loans shall remain In Balance,
(c)
after giving effect to the consequences of each such delay, the Qualified
Purchase Contracts remain in full force and effect, (d) Borrower shall use
all
commercially reasonable efforts to mitigate the delay caused by such event
of
Unavoidable Delay, and (e) Administrative Agent reasonably acknowledges that
such delay is due to one of the foregoing causes (which acknowledgment shall
not
be unreasonably withheld or delayed), then Administrative Agent shall extend
the
Completion Date and the time for performance of any other construction
obligations hereunder by a period of time equal to the period of such
Unavoidable Delay. No such extension shall affect the time for performance
of,
or otherwise modify, any of Borrower's other Obligations under the Loan
Documents or the maturity of the Notes. Neither Administrative Agent nor any
Lender shall be liable in any way for Administrative Agent's or such Lender's
failure to perform or delay in performing under the Loan Documents, and
Administrative Agent may suspend or terminate all or any portion of its and
the
Lenders' obligations under the Loan Documents if such delay or failure to
perform results directly or indirectly from, or is based upon, an Unavoidable
Delay.
[Signature
Pages Follow]
IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed and delivered as of the day and year first above written.
BORROWER:
THE
CHALETS AT THE LODGE AT VAIL, LLC, a Colorado limited liability
company
|
By:
|
Vail
Resorts Development Company,
|
a
Colorado corporation, its Managing Member
By:
/s/
Xxxxxxx X. Xxxxx
Xxxxxxx
X. Xxxxx,
Senior
Executive Vice President
[Signatures
continued on next page.]
ADMINISTRATIVE
AGENT:
XXXXX
FARGO BANK, NATIONAL ASSOCIATION, a national banking association, as
Administrative Agent for the Lenders
By:
/s/
Xxxx X. XxXxxxx
Xxxx
X.
XxXxxxx,
Senior
Vice President
[Signatures
continued on next page.]
LENDER:
XXXXX
FARGO BANK, NATIONAL ASSOCIATION, a national banking association
By:
/s/
Xxxx X. XxXxxxx
Xxxx
X.
XxXxxxx,
Senior
Vice President
[Signatures
continued on next page.]
LENDER:
U.S.
BANK
NATIONAL ASSOCIATION,
a
national banking association
By:
/s/
Xxxxxxx X. Xxxxxxxxxx
Xxxxxxx
X. Xxxxxxxxxx,
Vice
President
[Signatures
continued on next page.]
LENDER:
JPMORGAN
CHASE BANK, N.A.,
a
national banking association
By:
/s/
Xxxxx Xxxxxx
Name:
Xxxxx Xxxxxx
Title:
Vice President
[Signatures
continued on next page.]
LENDER:
BANK
OF
AMERICA, N.A.,
a
national banking association
By:
/s/
Xxxx Xxxxxxx
Xxxx
Xxxxxxx
Assistant
Vice President
[Signatures
continued on next page.]
LENDER:
COMPASS
BANK,
a
national banking association
By:
/s/
Xxxx X. Xxxxxx
Xxxx
X.
Xxxxxx
Vice
President
[Signatures
continued on next page.]
LENDER:
COMERICA
WEST INCORPORATED
By:
/s/
Xxxxx X. Xxxxx
Xxxxx
X.
Xxxxx
Assistant
Vice President
[End
of signatures.]
Exhibit
A
Description
of Land
LOTS
1
AND 2, MILL CREEK SUBDIVISION, ACCORDING TO THE PLAT RECORDED NOVEMBER 6, 2000,
UNDER RECEPTION XX. 000000, XXXXXX XX XXXXX, XXXXX XX XXXXXXXX.
TOGETHER
WITH:
XXXX
0
XXX 0, XXXXXXX 0, XXXXXXXX 0 XXXXX, XXXXX 00 XXXX XX XXX 0XX XXXXXXXXX XXXXXXXX,
XXXXXX OF EAGLE, STATE OF COLORADO;
ALTERNATIVELY
DESCRIBED AS FOLLOWS:
XXXX
0
XXX 0, XXXXXXX 0, XXXXXXXX 0 XXXXX, XXXXX 80 WEST, OF THE SIXTH PRINCIPAL
MERIDIAN, COUNTY OF EAGLE, STATE OF COLORADO, AS ESTABLISHED BY THE DEPENDENT
RESURVEYS AND SURVEYS COMPLETED BY THE UNITED STATES DEPARTMENT OF THE INTERIOR,
BUREAU OF LAND MANAGEMENT DATED FEBRUARY 3, 2005 (LOT 4), AND DECEMBER 30,
1988
(LOT 1), AND ALSO BEING DESCRIBED ALTERNATIVELY AS FOLLOWS:
BEGINNING
AT THE NORTHWEST 1/16 XXXXXX XX XXXXXXX 0, XXXXXXXX 0 XXXXX, XXXXX 80 WEST,
OF
THE SIXTH PRINCIPAL MERIDIAN, COUNTY OF EAGLE, STATE OF COLORADO; WHENCE THE
NORTH 1/16 CORNER OF SECTION 7 AND SECTION 8 BEARS N89 DEGREES 43 MINUTES 59
SECONDS W A DISTANCE OF 1323.26 FEET, SAID LINE BEING THE BASIS OF BEARING
FOR
THIS DESCRIPTION.
THENCE
ALONG THE EAST LINE OF THE SOUTHWEST QUARTER OF THE NORTH WEST QUARTER OF SAID
SECTION 8 (ALSO BEING CO-EXTENSIVE WITH THE BOUNDARY OF THE FORMER VAIL VILLAGE,
FIRST FILING, ACCORDING TO THE PLAT THEREOF RECORDED AUGUST 6, 1962 AT
RECEPTION NUMBER 96382) THE FOLLOWING TWO COURSES:
1)
S00
DEGREES 21 MINUTES 52 SECONDS W 165.00 FEET
2)
S00
DEGREES 21 MINUTES 52 SECONDS W 277.76 FEET
THENCE
ALONG SAID EAST LINE OF THE SOUTHWEST QUARTER OF THE NORTHWEST QUARTER OF
SECTION 8 (ALSO BEING CO-EXTENSIVE WITH THE BOUNDARY OF PARCEL 1, GOLDEN PEAK
SKI BASE AND RECREATION DISTRICT (RECEPTION NUMBER 352168)), S00 DEGREES 21
MINUTES 52 SECONDS W 57.22 FEET; THENCE N89 DEGREES 45 MINUTES 07 SECONDS W
248.01 FEET: THENCE N33 DEGREES 20 MINUTES 55 SECONDS W 282.22 FEET;
THENCE
N89 DEGREES 45 MINUTES 45 SECONDS W 488.32 FEET; THENCE N00 DEGREES 14 MINUTES
21 SECONDS E 265.29 FEET TO A POINT ON THE NORTH LINE OF SAID SOUTHWEST QUARTER
OF THE NORTHWEST QUARTER OF SECTION 8; THENCE ALONG SAID NORTH LINE (AGAIN
ALSO
BEING CO-EXTENSIVE WITH SAID BOUNDARY OF THE FORMER VAIL VILLAGE, FIRST FILING
ACCORDING TO THE PLAT THEREOF RECORDED AUGUST 6, 1962 AT RECEPTION NUMBER 96382)
S89 DEGREES 43 MINUTES 59 SECONDS E 99.99 FEET TO THE NORTHWEST CORNER OF MILL
CREEK SUBDIVISION, ACCORDING TO THE PLAT THEREOF RECORDED NOVEMBER 6, 2000
AT
RECEPTION NUMBER 743366; THENCE ALONG THE WESTERLY BOUNDARY OF SAID MILL CREEK
SUBDIVISION S00 DEGREES 15 MINUTES 18 SECONDS W 165.37 FEET TO THE SOUTHWEST
CORNER OF SAID MILL CREEK SUBDIVISION; THENCE ALONG THE SOUTHERLY BOUNDARY
OF
SAID MILL CREEK SUBDIVISION S89 DEGREES 45 MINUTES 57 SECONDS E 131.89 FEET;
THENCE CONTINUING ALONG THE SOUTHERLY BOUNDARY OF SAID MILL CREEK SUBDIVISION
S89 DEGREES 46 MINUTES 28 SECONDS E 413.26 FEET TO THE SOUTHEAST CORNER OF
SAID
MILL CREEK SUBDIVISION: THENCE ALONG THE EASTERLY BOUNDARY OF SAID MILL CREEK
SUBDIVISION N00 DEGREES 21 MINUTES 19 SECONDS E 165.00 FEET TO A POINT ON THE
NORTH LINE OF SAID SOUTHWEST QUARTER OF THE NORTHWEST QUARTER OF SECTION 8,
SAID
POINT ALSO BEING THE NORTHEAST CORNER OF SAID MILL CREEK SUBDIVISION; THENCE
ALONG SAID NORTH LINE (AGAIN ALSO BEING CO-EXTENSIVE WITH THE BOUNDARY OF THE
FORMER VAIL VILLAGE, FIRST FILING, RECEPTION NUMBER 96382) S89 DEGREES 43
MINUTES 59 SECONDS E 248.12 FEET TO THE TRUE POINT OF BEGINNING, COUNTY OF
EAGLE, STATE OF COLORADO.
NOTE:
THE
LAND ON WHICH THE CHALETS AT THE LODGE AT VAIL WILL BE LOCATED AS DEPICTED
ON
THE SITE PLAN PREPARED BY 42/40 ARCHITECTURE, IS ENCOMPASSED WITHIN THE PROPERTY
SHOWN ON THE PLAT DESCRIBED ABOVE.
TOGETHER
WITH THE EASEMENTS GRANTED IN THE SUBDIVISION. CONVEYANCE AND CONSTRUCTION
AGREEMENT RECORDED ___________________ RECEPTION NO.
__________________
Exhibit
B
Project
Budget
[***]
Exhibit
C
List
of Commitments and Proportionate Shares
|
Lender
|
Amount
of Commitment
|
Proportionate
Share
|
|
Xxxxx
Fargo Bank National Association
|
$34,000,000
|
28%
|
|
U.S.
Bank National Association
|
$34,000,000
|
28%
|
|
Bank
of America, N.A.
|
$15,000,000
|
12%
|
|
Compass
Bank
|
$15,000,000
|
12%
|
|
JPMorgan
Chase Bank, N.A.
|
$15,000,000
|
12%
|
|
Comerica
West Incorporated
|
$10,000,000
|
8%
|
|
Total:
|
$123,000,000.00
|
100%
|
Exhibit
D
Summary
Qualified Purchase Contracts
CHALETS
AT THE LODGE AT VAIL
|
UNIT
|
PURCHASE
PRICE
|
PROJECTED
CLOSING COSTS
|
XXXXXXX
MONEY
|
FRAMING
DEPOSIT
|
BALANCE
DUE
|
|
1
|
$
9,750,000.00
|
$
682,500.00
|
$
1,462,500.00
|
$
975,000,00
|
$
7,312,500.00
|
|
2
|
$
9,975,000.00
|
$
698,250.00
|
$
1496,250.00
|
$
997,500,00
|
$
7,481,250.00
|
|
3
|
$
12,150,000.00
|
$
850,500.00
|
$
1,822,500,00
|
$
1,215,000.00
|
$
9,112,500.00
|
|
4
|
$
14,350.000.00
|
$
1,004,500.00
|
$
2,152,500.00
|
$
1.435,000.00
|
$
10,762,500.00
|
|
5
|
$
12,950,000.00
|
$
906,500.00
|
$
1,942,500.00
|
$
1,295,000.00
|
$
9,712,500.00
|
|
6
|
$
12,450,000.00
|
$
871,500.00
|
$
1,867,500.00
|
$
1,245,000.00
|
$
9,337,500.00
|
|
7
|
$
11,125,000.00
|
$
778,750.00
|
$
1,668,750.00
|
$
1,112,500.00
|
$
8,343,750,00
|
|
8
|
$
13,125,000.00
|
$
918,750.00
|
$
1,968,750.00
|
$
1,312,500.00
|
$
9,843,750.00
|
|
9
|
$
10,975,000.00
|
$
768,250.00
|
$
1,646,250,00
|
$
1,097,500,00
|
$
8,231,250.00
|
|
10
|
$
10,850,000.00
|
$
759,500.00
|
$
1,627,500.00
|
$
1,085,000.00
|
$
8,137,500.00
|
|
11
|
$
13,225,000,00
|
$
925,750.00
|
$
1,983,750.00
|
$
1,322,500.00
|
$
9,918,750.00
|
|
12
|
$
12,750,000,00
|
$
892, 500.00
|
$
1,912,500.00
|
$
1,275,000,00
|
$
9,562,500.00
|
|
13
|
$
15,950.000.00
|
$
1,116,500.00
|
$
2,392,500,00
|
$
1,595,000,00
|
$
11,962500.00
|
|
$159,625,000.00
|
$11,173,750.00
|
$23,943,750,00
|
$15,962,500.00
|
$1l9,718,750.00
|
Exhibit
E
List
of Plans and Specifications
Plans
and
Specifications prepared by 42/40 Architecture, last revised May 15,
2006.
Exhibit
F
|
Loan
Par Value
|
|
(Prior
To Club Component Release)
|
|
Chalet
Unit
|
List
Price
|
Loan
Par Value
|
||
|
Unit
1
|
$
9,750,000
|
$
7,512,921
|
||
|
Xxxx
0
|
$
9,975,000
|
$
7,686,296
|
||
|
Xxxx
0
|
$12,150,000
|
$
9,362,255
|
||
|
Xxxx
0
|
$14,350,000
|
$
11,057,478
|
||
|
Xxxx
0
|
$12,950,000
|
$
9,978,700
|
||
|
Xxxx
0
|
$12,450,000
|
$
9,593,422
|
||
|
Xxxx
0
|
$11,125,000
|
$
8,572,435
|
||
|
Xxxx
0
|
$13,125,000
|
$
10,113,547
|
||
|
Xxxx
0
|
$10,975,000
|
$
8,456,852
|
||
|
Xxxx
00
|
$10,850,000
|
$
8,360,532
|
||
|
Xxxx
00
|
$13,225,000
|
$
10,190,603
|
||
|
Xxxx
00
|
$12,750,000
|
$
9,824,589
|
||
|
Xxxx
00
|
$15,950,000
|
$
12,290,368
|
||
|
Chalet
Total
|
$159,625,000
|
$123,000,000
|
||
|
Loan
Par Value
|
||||
|
(Following
Club Component Release)
|
||||
|
Chalet
Unit
|
List
Price
|
Loan
Par
Value
|
||
|
Unit
1
|
$9,750,000
|
$5,069,695
|
||
|
Xxxx
0
|
$9,975,000
|
$5,186,688
|
||
|
Xxxx
0
|
$12,150,000
|
$6,317,619
|
||
|
Xxxx
0
|
$14,350,000
|
$7,461,551
|
||
|
Xxxx
0
|
$12,950,000
|
$6,733,594
|
||
|
Xxxx
0
|
$12,450,000
|
$6,473,610
|
||
|
Xxxx
0
|
$11,125,000
|
$5,784,652
|
||
|
Xxxx
0
|
$13,125,000
|
$6,824,589
|
||
|
Xxxx
0
|
$10,975,000
|
$5,706,656
|
||
|
Xxxx
00
|
$10,850,000
|
$5,641,660
|
||
|
Xxxx
00
|
$13,225,000
|
$6,876,586
|
||
|
Xxxx
00
|
$12,750,000
|
$6,629,601
|
||
|
Unit
13
|
$15,950,000
|
$8,293,500
|
||
|
Chalet
Total
|
$159,625,000
|
|
$83,000,000
|
|
Exhibit
G
Request
for Continuation or Conversion
REQUEST
FOR CONTINUATION OR CONVERSION
Pursuant
to Section 2.2(a)
of that
certain Construction Loan Agreement among The Chalets at the Lodge at Vail,
LLC
("Borrower"),
the
Lenders party thereto, and Xxxxx Fargo Bank, National Association, as
Administrative Agent for the Lenders ("Administrative
Agent"),
this
represents Borrower’s irrevocable notice to the Administrative Agent of
Borrower’s intention to:
|
(a)
|
[_____]
continue the Loan with the Base Rate as the Applicable Interest
Rate;
|
|
(b)
|
[_____]
continue the Loan with a LIBOR-Based Rate as the Applicable Interest
Rate
for a [_____] one (1) / [_____] two (2) / [_____] three (3) / [_____]
six
(6) month LIBOR Period;
|
|
(c)
|
[_____]
convert the Loan to a Based Rate Loan as the Applicable Interest
Rate;
|
|
(d)
|
[_____]
convert the Loan to a LIBOR-Based Rate as the Applicable Interest
Rate for
a [_____] one (1) / [_____] two (2) / [_____] three (3) / [_____]
six (6)
month LIBOR Period.
|
Borrower
certifies that:
|
(1)
|
after
giving effect to any continuation or conversion of the Loan, all
the
requirements contained in the Notes and the Loan Agreement applicable
thereto are satisfied;
|
|
(2)
|
the
representations and warranties contained in the Loan Agreement and
the
other Loan Documents are true and correct in all material respects
on and
as of the date hereof to the same extent as though made on and as
of the
date hereof, except to the extent such representations and warranties
specifically relate to an earlier date, in which case such representations
and warranties were true and correct in all material respects on
and as of
such earlier date; and
|
|
(3)
|
no
event has occurred and is continuing or would result from the consummation
of the continuation or conversion contemplated hereby that would
constitute an Event of Default.
|
[Signature
Page Follows]
DATED:
________________
BORROWER:
THE
CHALETS AT THE LODGE AT VAIL, LLC, a Colorado limited liability company
|
By:
|
Vail
Resorts Development Company, a Colorado corporation, its Managing
Member
|
By:
Name:
Its:
Exhibit
H
Request
for Loan Advance
REQUEST
FOR LOAN ADVANCE
Re: XXXXX
FARGO BANK, NATIONAL ASSOCIATION, as Administrative Agent, Loans in the
aggregate amount of $[__________] to [__________]
Project: The
Chalets at the Lodge at Vail, LLC
Ladies
and Gentlemen:
Reference
is made to that certain Construction Loan Agreement dated March __, 2007 among
XXXXX FARGO BANK, NATIONAL ASSOCIATION, as Administrative Agent, certain lenders
party thereto and the undersigned (the "Construction
Loan Agreement").
Terms
not defined in this Request for Loan Advance shall have the same meaning as
in
the Construction Loan Agreement.
This
Request for Loan Advance (a) is request No. _______ under the Construction
Loan
Agreement, (b) constitutes Borrower’s request to borrow Loans in the amounts and
in the manner set forth below and (c) is otherwise subject to the terms of
the
Construction Loan Agreement. The information relating to the proposed Loans
is
as follows:
|
1.
|
The
date of the proposed Loans is _________ __,
_____.
|
|
2.
|
The
aggregate amount of the proposed Loans (after deducting an aggregate
Retainage of $__________) is
$_________.
|
|
3.
|
The
aggregate amount of the proposed Loans which are to bear interest
as LIBOR
Rate Loans is $__________.
|
|
4.
|
The
aggregate amount of the proposed Loans which are to bear interest
at Base
Rate Loans is $__________.
|
|
5.
|
The
aggregate amount of Loans requested hereunder, when added to prior
(if
any) Loans funded under the Construction Loan Agreement, will result
in
total Loans outstanding under the Construction Loan Agreement of
$__________.
|
|
6.
|
Funds
undrawn under the aggregate Commitments after giving effect to the
Loans
requested hereunder will then be
$__________.
|
Attached
to this Request for Loan Advance are the following items:
|
A.
|
To
the extent not previously delivered to Administrative Agent, for
funds due
under the General Contract, copies of the General Contractor’s invoices
relating to payments requested under this Request for Loan Advance,
together with paid invoices evidencing payment of funds previously
advanced to the General Contractor pursuant to Loans, provided, however,
presentation of invoices shall not be required when the amount of
the
payment requested from the proceeds of the Advance is less than $250,000;
in those circumstances, presentation of general ledger entries evidencing
the amount due shall be sufficient;
|
|
B.
|
To
the extent not previously delivered to Administrative Agent, for
funds
paid directly by Borrower, copies of all invoices relating to payments
requested under this Request for Loan Advance, together with paid
invoices
evidencing payment of funds previously advanced to Borrower pursuant
to
Loans, provided,
however,
presentation of invoices shall not be required when the amount of
the
payment requested from the proceeds of the Advance is less than $250,000;
in those circumstances, presentation of general ledger entries evidencing
the amount due shall be sufficient;
|
|
C.
|
Copy
of the Project Budget attached as Exhibit 1
hereto, showing the portion of each budget line item comprising the
aggregate Loans subject to this request and any Retainage with respect
thereto, and the total of all Loans to date, inclusive of the Loans
subject to this request;
|
|
D.
|
Copies
of sworn unconditional lien wavers from each trade contractor,
subcontractor, materialman, supplier and vendor (each a “Subcontractor”)
who is to be paid from the proceeds of this Advance, to the extent
not
previously delivered to Administrative Agent releasing any right
to a lien
through a date not more than 30 days prior to the date hereof. Lien
waivers shall not be required from any Subcontractor when the amount
to be
paid to such Subcontractor from the proceeds of the Advance is less
than
$25,000 and the aggregate amount paid to such Subcontractor is less
than
$100,000;
|
|
E.
|
Borrower’s
Architect’s Certificate for Payment in accordance with AIA Document
G-702;
|
|
F.
|
Requisition
form duly executed by the General Contractor;
and
|
|
G.
|
Copies
of all other documents required pursuant to Article
VI
and Article
VII
of
the Construction Loan Agreement.
|
In
connection with this advance, Borrower hereby certifies that the following
are
true and correct:
|
(a)
|
The
facts set forth in the General Contractor’s invoices and in Exhibit
1;
|
|
(b)
|
Except
for contractors, subcontractors, materialmen, suppliers or vendors
who are
to be paid from proceeds of the Loans requested hereunder, there
is no
outstanding Indebtedness of the undersigned for labor, wages or materials
in connection with the construction of the Improvements which is
currently
due and which could become the basis of a Lien on the
Project;
|
|
(c)
|
All
sums previously requisitioned have been applied to the payment of
the Hard
Costs and the Soft Costs heretofore incurred;
|
|
(d)
|
All
Change Orders have been submitted to Administrative Agent and the
Construction Consultant and all Change Orders for which a Loan is
requested hereby have been approved by Administrative Agent and the
Construction Consultant to the extent required by the Construction
Loan
Agreement;
|
|
(e)
|
In
the judgment of Borrower, the Improvements are _____%
complete;
|
|
(f)
|
Borrower
is not in Default under any of the terms and conditions of the Loan
Documents;
|
|
(g)
|
After
giving effect to this advance, the Loans will remain In Balance in
accordance with Section 7.2
of
the Construction Loan Agreement, and all conditions to this advance
have
been satisfied in accordance with Section 7.1
of
the Construction Loan Agreement;
|
|
(h)
|
Each
representation and warranty of Article
VIII
of
the Construction Loan Agreement remains true and correct in all material
respects as of the date of this Request for Loan Advance and will
be so on
the date of disbursement of the requested Loan, except with respect
to (i)
matters which have been disclosed in writing to and approved by
Administrative Agent (subject, however, to the terms of the Construction
Loan Agreement) or (ii) liens of mechanics and materialmen and matters
addressed in Section 8.5
of
the Construction Loan Agreement, which would not, if adversely decided,
have a Material Adverse Effect;
|
|
(i)
|
No
litigation or arbitral proceedings are pending or, to the best of
Borrower’s knowledge, threatened against Borrower, any Guarantor or the
Manager, which could or might (i) affect the validity or priority
of the
liens of the Security Instrument or (ii) or, if adversely decided,
would
reasonably be expected have a Material Adverse Effect;
and
|
|
(j)
|
All
Government Approvals, to the extent then required for the Construction
Work, have been obtained and that all Applicable Laws relating to
the
construction and operation of the Project have been and will continue
to
be complied with.
|
|
(k)
|
Borrower
has contributed the required Initial Equity
Contribution.
|
The
undersigned requests that the requested Loans be advanced by depositing the
same
into Borrower’s Account No. __________. The person signing this Request for Loan
Advance on behalf of Borrower represents and warrants to you that such person
is
authorized to execute this letter on behalf of Borrower.
BORROWER:
THE
CHALETS AT THE LODGE AT VAIL, LLC, a Colorado limited liability company
|
By:
|
Vail
Resorts Development Company, a Colorado corporation, its Managing
Member
|
By:
Name:
Its:
ACKNOWLEDEGMENT
Each
representation and warranty contained in the Representation Agreement remains
true and correct in all material respects as of the date of this Request for
Loan Advance.
GUARANTOR:
VAIL
RESORTS, INC., a Delaware corporation
By:
Its:
THE
VAIL
CORPORATION, a Colorado corporation
By:
Its:
Exhibit
I
Form
of Deposit Letter of Credit
IRREVOCABLE
LETTER OF CREDIT
[Address]
BENEFICIARY:
Xxxxx
Fargo Bank, National Association, Letter
of Credit No.
as
Administrative Agent
0000
X.
Xxxxxx, Xxxxx 0000 Date:
Xxxxxx,
XX 00000
Attention: Xx.
Xxxx X. XxXxxxx
Issued
at the Request of
The
Chalets at the Lodge at Vail, LLC
c/o
Vail
Resorts Development Co.
000
Xxxxxxxxxxx Xxxxxxxx, Xxxxx 0000
Xxxxxxxxxx,
XX 00000
Ladies
and Gentlemen:
For
the
account of The Chalets at the Lodge at Vail, LLC, a Colorado limited liability
limited partnership (the "Borrower") we hereby establish our Irrevocable Letter
of Credit in your favor in the amount of ______________
and NO/100 United States Dollars (US$_______)
available with us at our above office by payment of your draft drawn on us
at
sight.
Partial
drafts may be drawn and presented under this Letter of Credit.
The
draft
must be marked "Drawn under Letter of Credit No. ________."
The
draft
must also be accompanied by (1) the original of this Letter of Credit for our
endorsement on this Letter of Credit of our payment of such draft and (2) a
certification from the Beneficiary that an Event of Default under the Loan
Agreement dated as of March ___, 2007, between the Borrower and Beneficiary
(the
"Loan Agreement"), has occurred and is continuing, and that Beneficiary is
entitled to draw on this Letter of Credit.
This
Letter of Credit is transferable, without charge, one or more times, but in
each
instance to a single transferee and only in the full amount available to be
drawn under this Letter of Credit at the time of such transfer. Any such
transfer may be effected only through ourselves and upon presentation to us
at
our above-specified office of a duly executed instrument of transfer in the
form
attached to this Letter of Credit as Exhibit A. Any transfer of this Letter
of
Credit may not change the place of expiration of this Letter of Credit from
our
above-specified office. Each transfer shall be evidenced by our endorsement
on
the reverse of the original of this Letter of Credit, and we shall deliver
the
original of this Letter of Credit so endorsed to the transferee.
This
Letter of Credit expires at our above-specified office on __________, 2008,
but
shall be automatically extended,
without
written amendment, for a one or more one year period unless on or before
_________, 2008 or each one year anniversary thereafter we have sent written
notice to you at your address above by registered mail or express courier that
we elect not to renew this Letter of Credit beyond each one year anniversary.
In
no event will this letter of credit extend beyond October 1, 2009.
Upon
your
receipt of such notice, you may draw hereunder, the then credit amount
available, by presentation to us of your sight draft drawn on us bearing the
clause: "Drawn under Letter of Credit No. _________."
This
credit sets forth in full terms of our obligation to you, and such undertaking
shall not in any way be modified or amplified by any agreement in which this
credit is referred to or to which the credit relates, and any such reference
shall not be deemed to incorporate herein by reference any
agreement.
We
engage
with you that your draft drawn under and in compliance with the terms of the
credit will be duly honored.
This
letter of credit is subject to the Uniform Customs and Practice for Documentary
Credits (1993 Revision) International Chamber of Commerce, Publication No.
500
("UCP") and engages us in accordance with the terms thereof; provided, however,
that notwithstanding the provisions of Article 17 of the UCP, if this Letter
of
Credit expires during an interruption of business (as described in Article
17 of
the UCP), we agree to effect payment under this Letter of Credit if a drawing
which strictly conforms to the terms and conditions of this Letter of Credit
is
made within 15 days after the resumption of business.
Very
truly yours,
By:_____________________
(Authorized
Signature)
Exhibit
A
to
Irrevocable
Letter of Credit
Date:
_______________
[Bank
Address]
Subject:
Your Letter of Credit No. _________
Ladies
and Gentlemen:
For
value
received, we hereby irrevocably assign and transfer all our rights under the
above-captioned Letter of Credit, as heretofore and hereafter amended, extended
or increased, to:
_________________________
[insert
name of transferee]
_________________________
_________________________
[insert
address]
By
this
transfer, all of our rights in the Letter of Credit are transferred to the
transferee, and the transferee shall have sole rights as beneficiary under
the
Letter of Credit, including sole rights relating to any amendments, whether
increases or extensions or other amendments, and whether now existing or
hereafter made. You are hereby irrevocably instructed to advise future
amendment(s) of the Letter of Credit to the transferee without our consent
or
notice to us.
Enclosed
are the original Letter of Credit and the original of all amendments to this
date. Please notify the transferee of this transfer and of the terms and
conditions of the Letter of Credit as transferred. This transfer will not become
effective until the transferee is so notified.
Very
truly yours,
[insert
name of transferor]
By:
___________________________
Name:
_________________________
Title:
__________________________
Signature
of Transferor Guaranteed
[insert
name of bank]
By:
______________________________
Name:
__________________________
Title:
__________________________
Exhibit
J
Transfer
Authorizer Designation
TRANSFER
AUTHORIZER DESIGNATION
(For
Disbursement of Loan Proceeds by Funds Transfer)
o NEW
o REPLACE
PREVIOUS DESIGNATION o ADD
o CHANGE
o DELETE
LINE NUMBER
_____
The
following representatives of THE CHALETS AT THE LODGE AT VAIL, LLC
("Borrower")
are
authorized to request the disbursement of Loan Proceeds and initiate funds
transfers for Loan Number _______ dated March ___, 2007, between Xxxxx Fargo
Bank, National Association ("Bank")
and
Borrower. Bank is authorized to rely on this Transfer Authorizer Designation
until it has received a new Transfer Authorizer Designation signed by Borrower,
even in the event that any or all of the foregoing information may have
changed.
|
Name
|
Title
|
Maximum
Wire
Amount1
|
|
|
1.
|
|||
|
2.
|
|||
|
3.
|
|||
|
4.
|
|||
|
5.
|
Beneficiary
Bank and Account Holder Information
1.
|
Transfer
Funds to (Receiving Party Account Name):
|
||
|
Receiving
Party Account Number:
|
||
|
Receiving
Bank Name, City and State:
|
Receiving
Bank Routing (ABA) Number
|
|
|
Maximum
Transfer Amount:
|
||
|
Further
Credit Information/Instructions:
|
||
2.
|
Transfer
Funds to (Receiving Party Account Name):
|
||
|
Receiving
Party Account Number:
|
||
|
Receiving
Bank Name, City and State:
|
Receiving
Bank Routing (ABA) Number
|
|
|
Maximum
Transfer Amount:
|
||
|
Further
Credit Information/Instructions:
|
||
3.
|
Transfer
Funds to (Receiving Party Account Name):
|
||
|
Receiving
Party Account Number:
|
||
|
Receiving
Bank Name, City and State:
|
Receiving
Bank Routing (ABA) Number
|
|
|
Maximum
Transfer Amount:
|
||
|
Further
Credit Information/Instructions:
|
||
1
Maximum Wire Amount may not exceed the Loan Amount.
Date:
March _____, 2007 BORROWER:
THE
CHALETS AT THE LODGE AT VAIL, LLC, a Colorado limited liability company
|
By:
|
Vail
Resorts Development Company, a Colorado corporation, its Managing
Member
|
By:
Name:
Its:
Exhibit
K
Anticipated
Encumbrances
| (i) |
Additional
replatting(s) pursuant to the Subdivision, Conveyance and Construction
Agreement, and as necessary or appropriate to establish separate
legal
descriptions for the Residential Component, Club Component, Retail/Resort
Services Component, and Shared Parking Garage
Component.
|
| (ii) |
Loading/Delivery
Easement Agreement between Borrower and the Town of Vail affecting
the
Shared Parking Access Component, to be made pursuant to the requirements
of the Development Agreement with the Town of
Vail.
|
| (iii) |
Utility
easements made with utility providers and similar instruments made
in the
ordinary course of the development of the
Project.
|
| (iv) |
Implementation
of ownership structure for the Residential
Component.
|
| (a) |
Condominium
Declaration, and supplements
thereto.
|
| (b) |
Condominium
Map, and supplements thereto.
|
| (c) |
Access
and Support Easement Agreement, which, among other things, gives
the
Residential Component access easement rights over the Project surface
road.
|
| (v) |
Licenses
for Spa access:
|
| (a) |
in
favor of the Residential Component.
|
| (b) |
in
favor of the Club Component.
|
| (vi) |
License
in favor of Residential Component for Club
access.
|
Compliance
with the requirements of and carrying out the transactions contemplated by
the
Development Agreements.
Schedule
6.1
Closing
Conditions
(a) Title
Insurance.
An
unconditional and irrevocable commitment from the Title Company to issue the
Title Policy. The Title Policy and all endorsements thereto shall be approved
by
Administrative Agent in its reasonable discretion. In addition, Borrower shall
have paid to the Title Company all expenses and premiums of the Title Company
in
connection with the issuance of such policies as and when required by the Title
Company and all recording, mortgage taxes and filing fees payable in connection
with recording the Security Instrument and the filing of the Uniform Commercial
Code financing statements related thereto in the appropriate
offices.
(b) Opinion
of Borrower’s and Each Borrower Party’s Attorneys.
A
current written opinion from outside counsel for Borrower covering matters
in
scope, form and substance acceptable to Administrative Agent.
(c) Qualified
Purchase Contracts.
Copies
of all Qualified Purchase Contracts in effect with respect to the Residential
Component.
(d) Survey.
An ALTA
survey of the Land certified to Administrative Agent, Title Company and their
successors and assigns, acceptable to Administrative Agent in its reasonable
discretion, made by a registered land surveyor satisfactory to Administrative
Agent, showing, through the use of course bearings and distances, (i) all
foundations of the Improvements and driveways, if any, in place; (ii) all
easements and roads or rights of way and setback lines, if any, affecting the
Improvements and that the same are unobstructed; (iii) except as set forth
in
the Plans and Specifications, all foundations and other structures, if any,
so
placed that the Improvements are within the lot lines or applicable easements
and in compliance with any restrictions of record or ordinances relating to
the
location thereof; (iv) the dimensions of all existing buildings and distance
of
all material Improvements from the lot lines; (v) any encroachments by
improvements located on adjoining property; (vi) access to a public road; and
(vii) such additional information which may be required by Administrative Agent.
Said survey shall be dated a date required by Administrative Agent, bear a
certificate in an acceptable form, and include the legal description of the
Land.
(e) Organizational
Documents; Resolutions.
Copies
of all Organizational Documents for each Borrower Party and appropriate
resolutions authorizing such parties to enter into and perform under the
applicable Loan Documents, each certified to be true and correct by an
Authorized Officer of such Borrower Party and each in form and content
reasonably acceptable to Administrative Agent, and evidence of the good standing
of each Borrower Party issued by the applicable Governmental Authority where
such Borrower Party is organized.
(f) Project
Documents.
A
schedule of the Project Documents. A certificate of Borrower executed by an
Authorized Officer certifying that (i) each of the Project Documents has been
duly executed and delivered by each Person that is a party thereto and is in
full force and effect; (ii) neither Borrower nor, to the best of Borrower’s
knowledge, any other Person which is party to any of the Project Documents,
is
in default thereunder beyond any applicable cure and notice periods; (iii)
no
term or condition thereof shall have been Modified or waived without the prior
consent of Administrative Agent; and (iv) a true and correct copy of each such
Project Document.
(g) Violations.
Municipal searches showing no violations of Applicable Law with respect to
any
portion of the Project; and if violations are shown, then Administrative Agent
must have received (in Administrative Agent’s sole discretion) either
satisfactory evidence of the curing of the same or such undertakings,
indemnities, escrow deposits or affidavits relating thereto as Administrative
Agent shall require.
(h) Insurance.
A
certified copy of the insurance policies required by Section 9.5
or
certificates of insurance with respect thereto, such policies or certificates,
as the case may be, to be in form and substance, and issued by companies
reasonably acceptable to Administrative Agent and otherwise in compliance with
the terms of Section 9.5,
together with evidence of the payment of all premiums therefore.
(i) Lien
Waivers.
Sworn
partial waivers of liens from Major Subcontractors covering all work and
materials performed or supplied prior to the Closing Date (if any).
(j) Plans
and Specifications.
The
final Plans and Specifications, together with any required Governmental
Approvals related thereto and sealed by the applicable Design
Professionals.
(k) Construction
Schedule.
The
Construction Schedule, including evidence reasonably satisfactory to
Administrative Agent that the Construction Work is proceeding on time and on
budget.
(l) Construction
Status.
The
most recent General Contractor’s progress payment request approved by the
Developer showing the percentage of completion, the amount funded and Change
Order status.
(m) Design
Professionals’ Certificates.
Certificates of Borrower’s Architect, or other appropriate Design Professional,
in favor of Administrative Agent (on behalf of the Lenders) (the "Architect
Certificates"),
or
other evidence satisfactory to Administrative Agent, that to the best of the
Design Professional’s knowledge (i) the Plans and Specifications are in full
compliance with all applicable building code and environmental, health and
safety laws, statutes, regulations and requirements; (ii) the Plans and
Specifications are full and complete in all respects and contain all details
necessary for the Base Building Work; (iii) all Government Approvals to the
extent presently necessary for the Base Building Work have been issued; (iv)
the
gross square footage as shown on a Schedule attached to the certificate of
the
applicable Design Professional accurately reflects the gross square footage
relating to the Plans and Specifications; (v) there exists or will exist
adequate water, storm and sanitary sewerage facilities and other required public
utilities, together with a means of ingress and egress to and from the Project
over public streets; (vi) no building or parking structure to be constructed
on
the Project will exceed the height of any building permitted on the Project
as
of the Closing Date; and (vii) the Construction Schedule and the Project Budget
are realistic and can be adhered to in completing the Base Building Work in
accordance with the Plans and Specifications.
(n) Initial
Equity.
A
certificate of an Authorized Officer of Borrower certifying that Borrower shall
have provided the Initial Equity and itemizing the uses of the Initial Equity,
such certificate to be accompanied by backup materials evidencing such Initial
Equity and the use of same.
(o) UCC
Searches.
Uniform
Commercial Code searches with respect to Borrower and each Borrower Party,
the
Managing Member and each Guarantor as required by Administrative
Agent.
(p) Non-Foreign
Status.
A
certificate by an Authorized Officer of Borrower certifying Borrower’s tax
identification number and the fact that it is not a foreign person under the
Code.
(q) Standard
Forms.
Standard forms of agreements and/or leases with respect to the Commercial
Component.
(r) Contractor’s
Agreement.
A copy
of the fully executed GMP Agreement with Xxxx Construction.
(s) Architect’s
Agreement.
A copy
of the fully executed Architect’s Agreement.
(t) Other
Documents.
Such
other documents as Administrative Agent may reasonably request.
Schedule
6.2
Conditions
to Loans
(a) Title
Continuation.
Administrative Agent shall have received a notice of title continuation or
a
Date Down Endorsement to the Title Policy indicating that since the last
preceding Loan, there has been no change in the state of title and no new
adverse survey exceptions have been raised by the Title Company not theretofore
approved by Administrative Agent, which Date Down Endorsement shall have the
effect of increasing the coverage of the Title Policy (including full coverage
against mechanic’s liens) by an amount equal to the advance then made if the
Title Policy does not by its own terms provide for such an increase. If any
mechanics’ liens are filed against the Project, Borrower shall use commercially
reasonable efforts to cause such liens to be discharged by payment or other
shall mean; provided,
however,
that if
such mechanics’ liens are less than $250,000 in the aggregate, Borrower may
elect to cause the Title Company to provide affirmative coverage over such
liens
insuring against “any statutory lien for services, labor or materials furnished
or contracted for prior to the date hereof [i.e., the date of such endorsement]
(or any statutory lien for services, labor or materials furnished after the
date
hereof, the priority of which lien relates back to services, labor or materials
furnished or contracted for prior to the date hereof), and which has now gained
or which may hereafter gain priority over the estate or interest of the insured
as shown in Exhibit A
of this
policy”; and provided further, however, that, Borrower shall obtain a bond
reasonably acceptable to Administrative Agent to cover all mechanics’ liens that
exceed $1,000,000 in the aggregate of all such liens;
(b) Lien
Waivers.
Unconditional waivers of lien from Major Subcontractors covering all work for
which funds have been advanced pursuant to a prior disbursement and, at
Administrative Agent’s election, conditional waivers of lien from Major
Subcontractors covering all work of such Persons for which funds are being
advanced pursuant to the then current Request for Loan Advance, all in
compliance with the Lien Law together with such invoices, contracts, or other
supporting data as Administrative Agent may reasonably require to evidence
that
all Project Costs for which disbursement is sought have been
incurred;
(c) Change
Orders.
Copies
of any material Change Orders which have not been previously furnished to
Administrative Agent and the Construction Consultant;
(d) Contracts.
Copies
of all Major Subcontracts which have been executed or Modified since the last
Loan, together with (i) a certificate by an Authorized Officer of Borrower
certifying that the delivered items are true, accurate and complete copies
and
(ii) Consents and Agreements in the applicable form attached to the General
Assignment from any Major Subcontractors who have executed a Major Subcontract
not previously delivered;
(e) Stored
Materials.
Inventory of materials and equipment stored on the Project;
(f) Testing
Reports.
Testing
reports for materials-in-place as applicable;
(g) Governmental
Approvals.
Copies,
certified by an Authorized Officer of Borrower, of all required Governmental
Approvals (to the extent required as of such date) not previously delivered
to
Administrative Agent;
(h) Contract
Disputes.
If any
material dispute arises between or among Borrower, the General Contractor or
any
Major Subcontractor, a written summary of the nature of such
dispute;
(i) Project
Budget Amendments.
If the
Project Budget shall have been Modified, copies of all such Modifications,
all
of which shall be subject to Administrative Agent’s review and approval in
accordance with this Agreement Administrative Agent Borrower;
(j) Updated
Survey and Title Endorsement.
Promptly after the completion of the construction of the foundation of the
Base
Building Work, Borrower shall provide to Administrative Agent a current survey
of the Project showing all Improvements located thereon and complying with
the
requirements set forth in Schedule
6.1(d)
and
shall obtain a foundation endorsement to the Title Policy in form satisfactory
to Administrative Agent insuring that, except as set forth on the Plans and
Specifications, all foundations are located within applicable property and
setback lines and do not encroach upon any easements or rights of way;
and
(k) Insurance.
To the
extent not previously delivered to Administrative Agent, evidence showing
compliance with the provisions of Section 9.5.
(l) Additional
Project Documents and Plans and Plans and Specifications.
To the
extent not previously received and approved by Administrative Agent,
Administrative Agent shall have received and approved all Project Documents
and
all Plans and specifications relating to the aspect of the Improvements for
which such Loan is being requested.
(m) Other
Documents.
Such
other documents and items as Administrative Agent may reasonably
request.
Schedule
6.3
Conditions
to Final Loans
(a) Approval
by Governmental Authority.
Evidence of the approval by the applicable Governmental Authorities of the
Base
Building Work in its entirety for operation to the extent any such approval
is a
condition of the lawful use of the Base Building Work, including, without
limitation, valid certificates of occupancy (or other evidence) to the extent
required for the Base Building Work, which core and shell certificates of
occupancy (or other evidence) may be temporary core and shell certificates
of
occupancy;
(b) Survey.
A final
as-built survey covering the completed Base Building Work and any paving,
driveways and exterior improvements and otherwise in compliance with
Schedule 6.1(d),
together with an endorsement to the Title Policy amending any survey exception
to reflect such final survey;
(c) Plans
and Specifications.
To the
extent available, a full and complete certified set of “as built” Plans and
Specifications for the Base Building Work;
(d) Lien
Waivers.
Conditional waivers of lien and sworn statements from all (i) contractors and
subcontractors and (ii) any materialmen, suppliers and vendors with respect
to
the Base Building Work, and Borrower shall deliver final waivers of lien and
sworn statements from all such parties to Administrative Agent within sixty
(60)
days thereafter;
(e) Design
Professionals’ Certificates.
Certificates from the Architect stating that, to the best of Architect’s
knowledge, (i) the Base Building Work (1) has been substantially completed
in
accordance with the Plans and Specifications, (2) the Improvements are
structurally sound (the certification as to structural soundness to be made
by
the structural engineer only) and (3) except for tenant improvements to rentable
space in the Commercial Component that is not yet occupied is available for
occupancy (subject to completion of Punch List Items), and (ii) the Improvements
as so completed comply with all applicable building codes;
(f) Testing
Engineer Statement.
Statement from the testing engineer performing construction materials testing
indicating that all Base Building Work was performed according to the Plans
and
Specifications;
(g) Violation
Searches.
If
available and requested by Administrative Agent, violation searches with
Governmental Authorities indicating no notices of violation have been issued
with respect to the Project;
(h) UCC
Searches.
Current
searches of all Uniform Commercial Code financing statements filed with the
Secretary of State of the State of Colorado and of the state of
formation/organization of Borrower, showing that no Uniform Commercial Code
financing statements are filed or recorded against Borrower in which the
collateral is personal property or fixtures located on the Project or used
in
connection with the Project other than financing statements with respect to
the
Loans;
(i) Borrower’s
Certificate.
A
certificate of an Authorized Officer of Borrower certifying that:
(i) no
condemnation of any portion of the Project or any action which could result
in a
relocation of any roadways abutting the Project or the denial of access, which,
in Administrative Agent’s sole judgment, adversely affects the Lenders’ security
or the operation of the Project, has commenced or, to the Borrower’s Knowledge,
is contemplated by any Governmental Authority;
(ii) all
fixtures, attachments and equipment necessary for the operation of the Base
Building Work have been installed or incorporated into the Project and are
operational; all Guaranties and warranties have been transferred/assigned to
Borrower; and, that Borrower is the absolute fee owner of all of said property
free and clear of all chattel mortgages, conditional vendor’s liens and other
liens, encumbrances and security interests, and that all of said property is
in
good working order, free from defects; and
(iii) all
Project Costs relating to the Construction Work have been paid in full except
(1) to the extent covered by the final Loans then being requested and (2)
amounts for Hard Costs which Borrower is disputing in good faith and with due
diligence; provided that Administrative Agent may, in its sole discretion,
hold
back an amount equal to (x) 150% of the disputed amount minus (y) any Retainage
that Administrative Agent is still holding with respect to the applicable Hard
Costs and (3) amounts held by Administrative Agent with respect to Punch List
Items with respect to the applicable Hard Costs.
(j) Engineering
Report.
At
Borrower’s expense, a report from the Construction Consultant, satisfactory in
form and content to Administrative Agent, which shall verify that the Base
Building Work has been completed in accordance with the Plans and
Specifications, approved by the appropriate Governmental Authorities and that
the Project, and the Improvements constructed thereon, satisfy all Applicable
Law.
Schedule
8.5
Pending
Litigation
None
Schedule
8.10
Organizational
Chart
Schedule
8.14
Government
Approvals
Part
A
- Existing Approvals Obtained
| (vii) |
Annexation
to Town of Vail of the exchange parcel within the Property acquired
from
United States Forest Service
|
| (viii) |
Town
of Vail re-zonings to Ski Base Recreation 2 (SBR 2) Zone
District
|
| (ix) |
Town
of Vail approval of the Development Plan under applicable
zoning
|
| (x) |
Town
of Vail approval of and entry into its Development
Agreement
|
| (xi) |
Town
of Vail Design Review Board (DRB) approvals in relation to existing
Plans
and Specifications
|
| (xii) |
Town
of Vail grading and building permits for existing Plans and
Specifications
|
| (xiii) |
HUD
registration approval for Residential
Component
|
Part
B
- Approvals to be Obtained at a Later Date
| (xiv) |
Town
of Vail DRB approvals for any Modifications to Plans and
Specifications
|
| (xv) |
Town
of Vail building permit(s) for any Modifications to Plans and
Specifications
|
| (xvi) |
Town
of Vail Temporary Certificates of
Occupancy
|
| (xvii) |
Town
of Vail Certificates of Occupancy
|
| (xviii) |
Town
of Vail approvals of
resubdivision(s)
|
| (xix) |
Town
of Vail approvals of condominium documents for Residential Component
(Condominium Map and Declaration, and any amendments and supplements
thereto)
|
Schedule
9.5
Insurance
Requirements
Borrower
shall, while any obligation of Borrower under any Loan Document remains
outstanding, maintain at Borrower’s sole expense, with licensed insurers
approved by Administrative Agent, the following policies of insurance in form
and substance satisfactory to Administrative Agent. Capitalized terms used
in
this Article shall have the same meaning as such terms are commonly and
presently defined in the insurance industry.
TITLE
INSURANCE.
A
Title
Policy, together with any endorsements which Administrative Agent may require,
insuring Administrative Agent, for the benefit of Lenders, in the principal
amount of the Loan, of the validity and the priority of the lien of the Deed
of
Trust upon the Property and Improvements, subject only to matters approved
by
Administrative Agent in writing. During the term of the Loan, Borrower shall
deliver to Administrative Agent, within ten (10) days of Administrative Agent’s
written request, such other endorsements to the Title Policy as Administrative
Agent may reasonably require with respect to the Property.
PROPERTY
INSURANCE.
A
Builders All Risk/Special Form Completed Value (Non-Reporting Form) Hazard
Insurance policy, including without limitation, theft coverage and such other
coverages and endorsements as Administrative Agent may require, insuring
Administrative Agent, for the benefit of Lenders against damage to the Property
and Improvements in an amount not less than 100% of the full replacement cost
at
the time of completion of the Improvements. Such coverage should adequately
insure any and all Loan collateral, whether such collateral is onsite, stored
offsite or otherwise. Administrative Agent, for the benefit of Lenders, shall
be
named on the policy as Mortgagee and named under a Lender’s Loss Payable
Endorsement (form
#438BFU or equivalent).
FLOOD
HAZARD INSURANCE.
A
policy
of flood insurance, as required by applicable governmental regulations, or
as
deemed necessary by Administrative Agent, in an amount required by
Administrative Agent, but in no event less than the amount sufficient to meet
the requirements of applicable law and governmental regulation.
LIABILITY
INSURANCE.
A
policy
of Commercial General Liability insurance on an occurrence basis, with coverages
and limits as required by Administrative Agent, insuring against liability
for
injury and/or death to any person and/or damage to any property occurring on
the
Property and/or in the Improvements. During the period of any construction,
Borrower may cause its contractors and/or subcontractors to maintain in full
force and effect any or all of the liability insurance required hereunder.
Administrative Agent may require that Borrower be named as an additional insured
on any such policy. Whether Borrower employs a general contractor or performs
as
owner-builder, Administrative Agent may require that coverage include statutory
workers’ compensation insurance.
OTHER
COVERAGE.
Borrower
shall provide to Administrative Agent evidence of such other reasonable
insurance in such reasonable amounts as Administrative Agent may from time
to
time request against such other insurable hazards which at the time are commonly
insured against for property similar to the subject Property located in or
around the region in which the subject Property is located. Such coverage
requirements may include but are not limited to coverage for earthquake, acts
of
terrorism, business income, delayed business income, rental loss, sink hole,
soft costs, tenant improvement or environmental.
GENERAL.
Borrower
shall provide to Administrative Agent insurance certificates or other evidence
of coverage in form acceptable to Administrative Agent, with coverage amounts,
deductibles, limits and retentions as required by Administrative Agent. All
insurance policies shall provide that the coverage shall not be cancelable
or
materially changed without 10 days prior written notice to Administrative Agent
of any cancellation for nonpayment of premiums, and not less than 30 days prior
written notice to Administrative Agent of any other cancellation or any
modification (including a reduction in coverage). Administrative Agent, for
the
benefit of Lenders shall be named under a Lender’s Loss Payable
Endorsement (form
#438BFU or equivalent) on all insurance policies which Borrower actually
maintains with respect to the Property and Improvements. All insurance policies
shall be issued and maintained by insurers approved to do business in the state
in which the Property is located and must have an A.M. Best Company financial
rating and policyholder surplus acceptable to Administrative Agent.
