Exhibit 10.44
SECURED REVOLVING CREDIT AGREEMENT
THIS SECURED REVOLVING CREDIT AGREEMENT, dated as of this 27th day of
September, 2002 by and between WINDROSE MEDICAL PROPERTIES, L.P., a Virginia
limited partnership (the "Borrower"), and THE HUNTINGTON NATIONAL BANK, a
national banking association ("Bank");
WITNESSETH:
The parties hereto, in consideration of their mutual covenants
hereinafter set forth and intending to be legally bound hereby, agree as
follows:
ARTICLE I
DEFINITIONS
1.01. CERTAIN DEFINITIONS.
The following words and terms shall have the following meanings, respectively,
unless the context hereof clearly otherwise requires:
"Adjusted LIBOR Interest Rate" shall mean a rate per annum equal to the
quotient obtained (rounded upwards, if necessary, to the nearest
1/100th of 1%) by dividing (i) the applicable LIBOR Interest Rate by
(ii) 1.00 minus the Reserve Percentage.
"Advance" shall mean an advance to the Borrower on the account of Loan.
"Agreement" shall mean this Secured Revolving Credit Agreement, as the
same may be supplemented, modified or amended from time to time.
"Assignment" shall mean an Assignment in the form attached hereto as
Exhibit A, with blanks completed appropriately, given by the Borrower
to the Bank with respect to a Mortgaged Property as security for the
Borrower's obligation under the Loan, subject to such changes as may be
required to comply with the requirements of the law of the state in
which such Mortgaged Property is located, as the same may be
supplemented, modified or amended from time to time.
"Assignment of Rents" shall mean an Assignment of Rents and Leases in
the form attached hereto as Exhibit B, with blanks completed
appropriately, given by the Borrower to the Bank with respect to a
Mortgaged Property as security for the Borrower's obligations under the
Loan, subject to such changes as may be required to comply with the
requirements of the law of the state in which such Mortgaged Property
is located, as the same may be supplemented, modified or amended from
time to time.
"Bank" shall mean The Huntington National Bank, a national banking
association, its successors and assigns.
"Borrower's Affidavit" shall mean a Borrower's Closing Affidavit in the
form of Exhibit C attached hereto, with blanks completed appropriately,
given by the Borrower to the Bank with respect to a Mortgaged Property.
"Borrowing Base" shall mean sixty-five percent (65%) of the appraised
value of the Mortgaged Properties.
"Borrowing Base Certificate" shall mean a certificate in the form of
Exhibit D attached hereto executed by the Chief Executive Officer or
Chief Financial Officer of the Borrower.
"Brierbrook" shall mean Brierbrook Partners, LLC, a Tennessee limited
liability company.
"Closing" shall mean the execution and delivery by the Borrower to the
Bank of this Agreement and the Note.
"Closing Date" shall mean the date of the Closing.
"Collateral Assignment of Mortgaged Property Sale Agreement" shall mean
a Collateral Assignment of Mortgaged Property Sale Agreement in the
form attached hereto as Exhibit E, with blanks completed appropriately,
given by the Borrower to the Bank with respect to a Mortgaged Property
as security for the Borrower's obligations under the Loan, as the same
may be supplemented, modified or amended from time to time.
"Compliance Certificate" shall mean a certificate in the form of
Exhibit F annexed hereto, executed by the chief executive officer or
chief financial officer of Borrower to the effect that: (a) as of the
effective date on the certificate, no Default or Event of Default under
this Agreement exists or would exists after giving effect to the action
intended to be taken by the Borrower as described in such certificate,
including, without limitation, that the covenants set forth herein
would not be breached after giving effect to such action, together with
a calculation in reasonable detail, and in form and substance
satisfactory to the Bank of such compliance, and (b) the
representations and warranties were made on the date of such
certificate, except for changes in the ordinary course of business none
of which, either singly or in the aggregate, have had a Material
Adverse Effect.
"Conditional Default" shall mean any condition, event, act or omission
which, with the giving of notice or passage of time or both, would
constitute an Event of Default.
"Debt Service Coverage Ratio" shall mean the ratio of EBITDA to the
aggregate sum of all interest payments and principal payments on
indebtedness of Borrower and/or Guarantor due and payable during any
twelve (12) months trailing period determined as of the first day of
each calendar quarter.
"Default Rate" shall mean a rate of interest from time to time which is
Two Percent (2%) per annum above the applicable Interest Rates
otherwise then in effect.
"Deposit" shall mean an xxxxxxx money deposit made by a buyer under a
Mortgaged Property Sale Agreement and held by a Title Company or by the
Borrower.
"Disbursement Request" shall mean a statement of the Borrower setting
forth the amount of an Advance being requested and containing such
other information as is required by Paragraph (a) of Section 5.01
hereof.
"EBITDA" shall mean for any quarterly period, with respect to the
Borrower and Guarantor on a consolidated basis, determined in
accordance with GAAP, the sum of net income (or net loss) for such
period plus, the sum of all amounts treated as expenses for(a)
interest, (b) depreciation, (c) amortization, and (d) all accrued or
paid taxes on or measured by income to the extent included in the
determination of such net income (or net loss plus amounts attributable
to the minority interest of members of Brierbrook and other minority
members or partners of Windrose); provided, however, that net income
(or net loss) shall be computed without giving effect to extraordinary
losses or gains.
"Environmental Indemnity Agreement" shall mean an Environmental
Indemnity Agreement in the form attached hereto as Exhibit G, with
blanks completed appropriately, to be executed and delivered with
respect to a Mortgaged Property by the Borrower and the Guarantor to
the Bank, as the same may be supplemented, modified or amended from
time to time.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974,
as amended.
"ERISA Affiliate" shall mean any trade or business, whether or not
incorporated, which together with the Borrower would be treated as a
single employer under ERISA.
"Event of Default" shall mean any of the events of default described in
Section 8.01 hereof.
"FEMA" shall mean the Federal Emergency Management Agency, or any
successor entity.
"Fixtures" shall mean all personal property now or hereafter owned by
the Borrower and now or hereafter affixed to, incorporated into or to
be incorporated into, or used or useful in connection with, a Mortgaged
Property or any part thereof, all replacements thereof, additions
thereto and substitutions therefor.
"GAAP" shall mean generally accepted accounting principles in the
United States of America in effect from time to time as promulgated by
the Financial Standards Accounting Board and recognized and interpreted
by the American Institute of Certified Public Accountants.
"Governmental Authorities" shall mean the United States of America, the
state and local jurisdictions in which a Mortgaged Property is located
and any political subdivision thereof, and any agency, department,
commission, board, bureau or instrumentality of any of them.
"Governmental Requirement" shall mean any law, ordinance, order, rule
or regulation of any Governmental Authority, including but not limited
to laws, ordinances, orders, rules or regulations with regard to
zoning, subdivision, building, safety, fire protection or environmental
matters applicable to a Mortgaged Property.
"Guarantor" shall mean Windrose Medical Properties Trust, a Maryland
real estate investment trust.
"Guaranty" shall mean the Unconditional Guaranty executed and delivered
by Guarantor to the Bank of even date herewith, pursuant to which the
Guarantor guarantees the Borrower's obligations under the Loan, as the
same may be supplemented, modified or amended from time to time.
"Hazardous Constituent" shall have the meaning assigned thereto under
40 C.F.R. Section 260.10.
"Hazardous Materials" shall mean, collectively, Hazardous Substances,
Hazardous Constituent and Solid Wastes.
"Hazardous Materials Laws" shall mean all laws, statutes, ordinances,
rules, regulations, permits, licenses, judgments, writs, injunctions,
decrees, orders, determinations, directives and standards promulgated
by any governmental authority concerning Hazardous Materials or
concerning the protection of, or regulation of the discharge of
substances into, the environment or concerning the health or safety of
persons with respect to environmental hazards, and includes, without
limitation, the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, as amended by the Superfund Amendments and
Reauthorization Act of 1986, 42 U.S.C. Sections 9601 et seq., Solid
Waste Disposal Act, as amended by the Resource Conservation and
Recovery Act of 1976 and Solid and Hazardous Waste Amendments of 1984,
42 U.S.C. Sections 6901 et seq., Federal Water Pollution Control Act,
as amended by the Clean Water Act of 1977, 33 U.S.C. Sections 1251 et
seq., Clean Air Act of 1966, as amended, 42 U.S.C. Sections 7401 et
seq., Toxic Substances Control Act of 1976, 15 U.S.C. Sections 2601 et
seq., Occupational Safety and Health Act of 1970, as amended, 29 U.S.C.
Sections 651 et seq., Emergency Planning and Community Right-to-Know
Act of 1986, 42 U.S.C.Sections 11001 et seq., National Environmental
Policy of 1975, 42 U.S.C. Sections 4321 et seq., Safe Drinking Water
Act of 1974, as amended, 42 U.S.C. Section 300(f) et seq., the
Hazardous Materials Transportation Act, 42, U.S.C. Section 1801 et
seq., the Federal Insecticide, Fungicide, and Rodenticide Act, U.S.C.
Section 7401 et seq., and any similar or implementing law of the state
in which a Mortgaged Property is located, and all amendments, rules,
and regulations promulgated thereunder or implementing the same.
"Hazardous Substances" shall mean at any time any substance, waste,
pollutant, contaminant or material, in solid, liquid or gaseous form,
which: (i) is a substance regulated or defined or designated as
hazardous, extremely or imminently hazardous, objectionable, dangerous,
or toxic pursuant to any law, by any local, state, territorial or
federal governmental authority; (ii) is a substance with respect to
which such a governmental authority otherwise requires environmental
compliance, investigation, monitoring, reporting, or remediation;
including but not limited to, (A) all substances, wastes, pollutants,
contaminants and materials regulated, or defined or designated as
hazardous, extremely or imminently hazardous, dangerous, objectionable
or toxic, under any Hazardous Materials Law; (B) petroleum and
petroleum based products including crude oil, used oil and any
fractions thereof; (C) natural gas, synthetic gas, and any mixtures
thereof; (D) radon; (E) radioactive substances and materials; (F)
asbestos; (G) urea formaldehyde; (H) polychlorinated biphenyls; (I)
lead; (J) methane; (K) flammable substances and materials; and (L)
explosives.
"Improvements" shall mean the improvements portion of a Mortgaged
Property.
"Inspecting Architect" shall mean an independent architectural or
engineering firm employed by the Bank with respect to a Mortgaged
Property. The Borrower may submit to the Bank a list of suggested
architectural and engineering firms for consideration by the Bank. The
Bank shall not, however, be obligated to select or retain an Inspecting
Architect from such list.
"Interest Rate" shall mean, as to each Advance, a rate per annum equal
to (i) for Prime Advances, the Prime Interest Rate and (ii) for LIBOR
Advances, the Adjusted LIBOR Interest Rate.
"Lease" shall mean a lease of all or a portion of a Mortgaged Property
(excluding any incidental real estate which is contiguous to the leased
real estate and improvements and which the Borrower is or was required
to purchase as part of the acquisition of the leased real estate and
improvements) by and between the Borrower, as landlord (or joint
venture partner), and a Tenant, as tenant.
"Leverage Ratio" shall mean the percentage determined in accordance
with the Compliance Certificate.
"LIBOR" shall mean the average (rounded upward to the nearest 1/16 of
1%) of the per annum rates at which deposits in immediately available
funds in U.S. dollars for the applicable LIBOR Interest Period and in
the amount of the applicable LIBOR Advance are offered to the Bank by
prime banks in the London interbank Eurodollar market, determined as of
11:00 a.m. London time (or as soon thereafter as practicable) two (2)
London Banking Days prior to the beginning of the applicable LIBOR
Interest Period;
"LIBOR Advance" shall mean any Advance which is determined with
reference to the Adjusted LIBOR Interest Rate;
"LIBOR Interest Period" shall mean a period of one (1) month, two (2)
months, three (3) months, or six (6) months as selected by the
Borrower;
"LIBOR Interest Rate" shall mean a rate per annum equal to (i) One and
Three Quarters Percent (1-3/4%) above LIBOR at such time as the
Leverage Ratio is less than Forty Percent (40%), and (ii) Two Percent
(2%) above LIBOR at such time as the Leverage Ratio equals or exceeds
Forty Percent (40%).
"Loan" shall mean a revolving loan from the Bank to the Borrower in a
principal amount not to exceed Twenty-Five Million Dollars
($25,000,000) at any time outstanding.
"Loan Documents" shall mean, this Agreement, the Note, Mortgages,
Assignments of Rents, Assignments, Collateral Assignments of Mortgaged
Property Sale Agreements, Guaranty, Borrower's Affidavits,
Environmental Indemnities and other documents executed and/or delivered
by or on behalf of the Borrower or the Guarantor in connection with the
Loan or any Advance which are in effect from time to time, as the same
may be supplemented, modified or amended from time to time.
"London Banking Day" shall mean a day on which commercial banks are
open for business in London, England, and quoting deposit rates for
U.S. dollar deposits.
"Major Lease" shall mean a Lease between Borrower and a Major Tenant.
"Major Tenant" shall mean any Tenant occupying twenty-five percent
(25%) or more of a Mortgaged Property.
"Material Adverse Effect" shall mean any fact or circumstance which (a)
materially and adversely affects the business, operation, property or
financing conditions of the Borrower taken as a whole, or (b) has a
material adverse effect on the ability of a Borrower to perform their
respective obligations under this Agreement, the Note or the other Loan
Documents.
"Maturity Date" shall mean September 30, 2004.
"Monetary Event of Default" shall mean an Event of Default under
Section 8.01(a) hereof or any other Event of Default which can be cured
by the payment of money.
"Mortgage" shall mean a Real Estate Mortgage and Security Agreement in
the form of Exhibit H-1 attached hereto, with blanks completed
appropriately, or a Deed of Trust and Security Agreement in the form of
Exhibit H-2 attached hereto, with blanks completed appropriately, given
by the Borrower to the Bank with respect to a Mortgaged Property as
security for the Borrower's obligations under the Loan, subject to such
changes as may be required to comply with the requirements of the laws
of the state in which the Mortgaged Property is located, as the same
may be supplemented, modified or amended from time to time.
"Mortgage Release Price" shall mean with respect to a Mortgaged
Property, an amount equal to (a) so long as no Event of Default is then
continuing, an amount equal to principal reduction required to allow
Borrower to remain in compliance with the Borrowing Base and the Debt
Service Coverage Ratio as set forth in this Agreement, or (b) if an
Event of Default is then continuing, the Net Sales Price of such
Mortgaged Property.
"Mortgaged Property" shall mean all Projects securing the Loan by
virtue of a Mortgage.
"Mortgaged Properties Debt Service" shall mean the projected total
annual sum of all interest payments and principal payments on the
outstanding principal balance of the Loan which would be due and
payable during the trailing twelve (12) month period assuming the level
amortization of the then outstanding principal balance of the Loan over
a period of twenty-five (25) years, at a per annum interest rate equal
to Two Percent (2%) above the most recent weekly average yield on
United States Treasury Securities adjusted to a constant maturity of
ten (10) years as measured on the first day of each calendar quarter.
"Mortgaged Properties Debt Service Coverage Ratio" shall mean the
Mortgaged Properties Net Operating Income divide by the Mortgaged
Property Debt Service.
"Mortgaged Properties Net Operating Income" shall mean the projected
total annual rental income measured on the previous trailing twelve
(12) months (including minimum rent, additional rent, common area
maintenance ("CAM" payments) escalation and pass through payments) to
be received by Borrower and arising from the ownership and operation of
the Mortgaged Properties (excluding tenant security deposits), less the
sum of all reasonable and customary costs, taxes, expenses and
disbursements projected to be paid or due and payable during such
trailing twelve (12) months in connection with the leasing, management,
operation, maintenance and repair of the Mortgaged Properties and of
the personal property, fixtures, machinery, equipment, systems and
apparatus located therein or used in connection therewith, but
excluding (i) non-cash expenses, such as depreciation and amortized
costs, (ii) state and federal income taxes, (iii) the non-current
portion of capital expenditures, (iv) any expenses to be paid directly
by tenants to third parties, and (v) debt service payments on all
indebtedness of Borrower with respect to the Mortgaged Property; all
determined in accordance with GAAP, as measured on the first day of
each calendar quarter.
"Mortgaged Property Sale Agreement" shall mean with respect to a
Mortgaged Property, an agreement between the Borrower and a buyer not
affiliated with the Borrower or the Guarantor which is approved by the
Bank in a form reasonably acceptable to the Bank, pursuant to which
agreement the Borrower agrees to sell, and such buyer agrees to
purchase, a Mortgaged Property. Such sale agreement shall require the
buyer thereunder to deposit a Deposit with the Borrower or a Title
Company or other escrow agent. Such term shall also include the
exercise of a right of first refusal or purchase option in a lease of a
Mortgaged Property held by a Major Tenant.
"Mortgaged Property Site" shall mean the real estate portion of a
Mortgaged Property.
"Net Sales Price" shall mean with respect to a Mortgaged Property, an
amount equal to One Hundred Percent (100%) of the gross sales price of
such Mortgaged Property, less closing costs payable by the Borrower in
respect of the sale of such Mortgaged Property, provided such closing
costs are in a reasonable amount and are of a type customarily paid by
a Seller in the area in which such Mortgaged Property is located. Such
closing costs shall include without limitation, pro rations for
property taxes, costs of survey and title insurance and the cost of any
brokerage commissions or fees payable in respect of such sale;
provided, however, that a brokerage fee or commission payable to an
affiliate of the Borrower or the Guarantor shall not be permitted as a
closing cost in calculating the Net Sales Price of such Mortgaged
Property.
"Non-Monetary Event of Default" shall mean any Event of Default, other
than a Monetary Event of Default.
"Note" shall mean that certain Credit Note in the original principal
amount of Twenty-Five Million Dollars ($25,000,000) executed and
delivered by Borrower to Bank of even date herewith, as the same may be
renewed, extended, supplemented, modified or amended from time to time.
"PBGC" shall mean the Pension Benefit Guaranty Corporation established
pursuant to ERISA, or any successor entity.
"Personal Property" shall mean all tangible personal property owned by
the Borrower and now or at any time hereafter located on or at a
Mortgaged Property or used in connection therewith or with the
improvements forming a part of such Mortgaged Property.
"Plan" shall mean an Employee Benefit Plan which is covered by Title 4
of ERISA or subject to the minimum lending standards under Section 412
of the Internal Revenue Service as to which the Borrower may have any
liability.
"Plans and Specifications" shall mean the plans and specifications for
the construction of the Improvements forming part of an applicable
Mortgaged Property prepared by the architect therefor approved by
Borrower.
"Prime Advance" shall mean any Advance which is determined with
reference to the Prime Rate.
"Prime Interest Rate" shall mean a rate per annum equal to the Prime
Rate.
"Prime Rate" shall mean the interest rate per annum announced from time
to time by the Bank as its prime rate. Each interest rate determined by
reference to the Prime Rate shall change automatically from time to
time, effective as of the effective date of each change in the Prime
Rate. The Bank's Prime Rate is not necessarily the rate at which the
Bank lends its funds. The Prime Rate is only an index rate from which
interest rates actually charged to the Bank's customers may be
measured. The use of the Prime Rate does not constitute a commitment by
the Bank to lend money at a preferred rate.
"Prohibited Transaction" shall have the meaning ascribed thereto by
ERISA.
"Project" shall mean the real estate and all improvements thereon which
will be owned by the Borrower and leased to Tenants under a Lease,
together with any incidental real estate which is contiguous to the
leased real estate and improvements and which the Borrower is or was
required to purchase as part of the acquisition of the leased real
estate and improvements.
"Project Agreement" shall mean a Project Agreement in the form of
Exhibit I attached hereto, with blanks completed appropriately, to be
entered into by the Bank and the Borrower, pursuant to which the Bank
approves a Mortgaged Property.
"Project Purchase Agreement" shall mean an agreement between Borrower
and a seller pursuant to which Borrower agrees to purchase a Project.
"Regulation U" shall mean Regulation U of the Board of Governors of the
Federal Reserve System, as amended from time to time.
"Reportable Event" shall have the meaning ascribed thereto by ERISA.
"Reserve Percentage" shall mean for any day that percentage (expressed
as a decimal) which is in effect on such day, as prescribed by the
Board of Governors of the Federal Reserve System (or any successor) for
determining the maximum reserve requirement (including, without
limitation, all basic, supplemental, marginal and other reserves and
taking into account any transitional adjustments or other scheduled
changes in reserve
requirements) for a member of the Federal Reserve System in Cleveland,
Ohio, in respect of "Eurocurrency Liabilities." The Adjusted LIBOR
Interest Rate shall be adjusted automatically on and as of the
effective date of any change in the Reserve Percentage;
"Solid Wastes" shall have the meaning assigned thereto in 40 C.F.R.
Section 261.2.
"Storage Containers" shall mean existing and future containers for
Hazardous Materials and above ground and underground storage tank
systems (including underground piping, conduits or sumps).
"Subordination, Non-Disturbance and Attornment Agreement" shall mean a
Subordination, Non-Disturbance and Attornment Agreement in the form of
Exhibit J attached hereto, with blanks completed appropriately, entered
into by the Bank, the Borrower and a Major Tenant with respect to a
Mortgaged Property, subject to such changes as may be required to
comply with the requirements of the law of the state in which the
Mortgaged Property is located and such other revisions as may be
reasonably acceptable to Bank, as the same may be supplemented,
modified or amended from time to time.
"Tangible Net Worth" shall mean the sum of capital surplus, earned
surplus and capital stock, minus deferred charges, intangibles and
treasury stock, all as determined in accordance with GAAP consistently
applied.
"Tenant" shall mean any tenant of a Mortgaged Property.
"Title Company" shall mean with respect to a Mortgaged Property, any
other title insurer designated by the Borrower and approved by the Bank
which agrees to insure the priority of the lien of the Mortgage on such
Mortgaged Property.
"Title Policy" shall mean with respect to a Mortgaged Property, the
policy of title insurance issued by a Title Company to the Bank
insuring the priority of the lien of the Mortgage on such Mortgaged
Property.
"Wetlands" shall mean any wetlands area or other area which is subject
to the regulatory jurisdiction of the United States Environmental
Protection Agency and/or Army Corps of Engineers and/or any other
Governmental Authority, under any Governmental Requirement, including,
without limitation, the Clean Water Act, 33 U.S.C. Section 1251, et.
seq.
Unless the context clearly otherwise requires, the foregoing
definitions shall be equally applicable to both the singular and plural forms.
ARTICLE II
THE LOAN
2.01. LOAN.
Subject to the terms and conditions hereof, and relying upon the representations
and warranties herein set forth, the Bank agrees to make the Loan to the
Borrower. Unless otherwise extended by Bank, the Bank's commitment to make
Advances shall expire on the Maturity Date. The
proceeds of the Loan will be used solely for the acquisition by the Borrower of
Projects and for working capital purposes as described herein. The proceeds of
the Loan will be advanced to the Borrower in accordance with and subject to the
requirements and limitations set forth herein. Advances of the Loan will be made
to Borrower for working capital purposes provided such Advances shall not exceed
Five Million Dollars ($5,000,000) at any one time. If prior to the Maturity
Date, the Borrower repays any Advance(s), or any portion thereof, Loan proceeds
in an amount equal to the amount of the repayment will again be made available
to the Borrower for Advances, subject to the terms and conditions hereof.
2.02. MORTGAGED PROPERTY APPROVAL.
With respect to a proposed Mortgaged Property, the Bank shall have received
and approved those materials identified in Exhibit K attached hereto. In
connection with the approval of a Mortgaged Property, the Bank may impose
requirements regarding disbursement of such Advance in addition to those set
forth herein. Such additional requirements will be set forth in the Project
Agreement to be executed by the Bank and the Borrower in respect of such
Mortgaged Property, which Project Agreement, when executed, shall be deemed to
be a modification and amendment of this Agreement.
2.03. NOTE.
The Loan and all Advances thereunder shall be evidenced by the Borrower's
receipts and the Note.
2.04. RATE OF INTEREST.
During the term of the Loan, the unpaid principal amount thereof shall,
subject to the terms and conditions hereinafter set forth, bear interest on a
basis selected by the Borrower from the following interest rate selections: (a)
the Adjusted LIBOR Interest Rate; and (b) the Prime Interest Rate.
Each Advance shall be made as either a Prime Advance or a LIBOR Advance, as
selected by the Borrower. The Borrower may have Prime Advances and LIBOR
Advances outstanding simultaneously; provided, however, the Borrower may not
have more than five (5) LIBOR Advances in existence at any time and each LIBOR
Advance must be in an amount which is greater than or equal to $1,000,000. The
Borrower may convert any Prime Advances aggregating at least $1,000,000 in
principal amount into a LIBOR Advance on the first day of a calendar month. At
the end of the LIBOR Interest Period applicable to a LIBOR Advance, the Borrower
may renew the LIBOR Advance or may convert the LIBOR Advance to a Prime Advance.
If the Borrower fails to renew any LIBOR Advance or if the Borrower shall
receive any new Advance without designating whether such Advance is a LIBOR
Advance or a Prime Advance, such Advance shall automatically be deemed to be a
Prime Advance. At any time that the Borrower desires a LIBOR Advance or intends
to renew a LIBOR Advance or convert a Prime Advance into a LIBOR Advance, the
Borrower must notify the Bank by a Notice of Pricing Election in the form
attached to the Note at least three (3) London Banking Days prior to the day on
which the Borrower desires such Advance, renewal or conversion to be effective.
The Borrower shall have no right to designate a new Advance as, or convert an
existing Prime Rate Advance to, a LIBOR Advance if an Event of Default is then
continuing. The Borrower shall have no right to select a LIBOR Interest Period
for a LIBOR Advance if such LIBOR Interest Period would extend beyond the
Maturity Date.
While and so long as no Event of Default is continuing, interest shall
accrue at the applicable Interest Rates upon the daily principal balance of the
Loan, based on a three hundred sixty (360) day year, for the actual number of
days elapsed since the date to which interest has been paid. While and so long
as an Event of Default is continuing, interest shall accrue at the applicable
Default Rates upon the daily principal balance of the Loan, based on a three
hundred sixty (360) day year, for the actual number of days elapsed since the
date to which interest has been paid.
If the Bank shall determine, after the date hereof, that the adoption
of any applicable law, rule, regulation or guideline regarding capital adequacy,
or any change therein, or any change in the interpretation or administration
thereof by any governmental authority, central bank or comparable agency charged
with the interpretation or administration thereof, or compliance by the Bank (or
its lending office) with any request or directive regarding capital adequacy
(whether or not having the force of law) of any such authority, central bank or
comparable agency, has or would have the effect of reducing the rate of return
on the Bank's capital (or on the capital of the Bank's holding company) as a
consequence of the Loan to a level below that the Bank (or its holding company)
could have achieved but for such adoption, change or compliance (taking into
consideration the Bank's policies or the policies of its holding company with
respect to capital adequacy) by an amount deemed by the Bank to be material,
then from time to time, within fifteen (15) days after demand by the Bank, the
Borrower shall either (a) pay to the Bank such additional amount or amounts as
will compensate the Bank (or its holding company) for such reduction, or (b)
convert all LIBOR Advances to a Prime Advance. If the Borrower elects the option
provided in the foregoing subparagraph (b), the Borrower shall not be subject to
the requirement hereunder that the Borrower reimburse the Bank for any loss,
cost or expense incurred by the Bank as a result of the Borrower paying a LIBOR
Advance prior to the end of the applicable LIBOR Interest Period, provided,
however, thereafter the Borrower may not elect for any Advances to be LIBOR
Advances. The Bank will designate a different lending office if such designation
will avoid the need for, or reduce the amount of, such compensation and will
not, in the judgment of the Bank, be otherwise disadvantageous to the Bank. In
determining such amount, the Bank may use any reasonable averaging and
attribution methods. Failure on the part of the Bank to demand compensation for
any reduction in return on capital with respect to any period shall not
constitute a waiver of the Bank's rights to demand compensation for any
reduction in return on capital in such period or in any other period. The
protection of this Section shall be available to the Bank regardless of any
possible contention of the invalidity of the law, regulation or other condition
which shall have been imposed.
2.05. PRINCIPAL PAYMENT OF ADVANCES.
If not sooner paid, all Advances shall be due and payable on the Maturity Date.
2.06. INTEREST PAYMENTS.
The Borrower shall pay interest at the applicable Interest Rates on the
outstanding principal balance of the Loan on the first (1st) day of each
calendar month while proceeds of the Loan remain outstanding, commencing on the
first (1st) day of the first (1st) calendar month following the first Advance.
2.07. PRINCIPAL PAYMENTS.
Upon the sale of a Mortgaged Property, the Borrower shall pay to the Bank an
amount equal to the Mortgage Release Price payable in respect thereof, and such
Mortgage Release Price payment
when received by the Bank, shall be applied in reduction of the principal
balance of the Loan. Notwithstanding the foregoing provisions, during the
continuance of an Event of Default, any Mortgage Release Price payment received
by the Bank may be applied, in the discretion of the Bank, in reduction of any
accrued and unpaid interest on the Loan or any outstanding Advance made pursuant
to Section 5.01(c) hereof, so long as the Bank provides to Borrower all
documents necessary to release the Mortgaged Property being sold.
At the request of the Bank, the Borrower will furnish to the Bank
copies of any closing statement, purchase agreement and similar documents
relating to the sale of a Mortgaged Property prior to the release by the Bank of
its security with respect to such Mortgaged Property.
During the term of the Loan, upon the Bank's receipt of the Mortgage
Release Price with respect to a Mortgaged Property, the Bank will release the
applicable Mortgaged Property and all other security of the Bank encumbering
such Mortgaged Property.
2.08. LOAN PREPAYMENTS.
The Borrower may prepay the principal amount of any Prime Advance in whole or
in part from time to time without any prepayment penalty. The Borrower may not
prepay any LIBOR Advance before the expiration of the LIBOR Interest Period
applicable to such LIBOR Advance, except upon the payment of the amount provided
for below.
If any LIBOR Advance becomes due and payable or is prepaid prior to the
last day of the applicable LIBOR Interest Period (including any prepayment
resulting from the acceleration of the Loan by the Bank as a consequence of an
Event of Default), the Borrower also promises to reimburse the Bank on demand
for any resulting loss, cost, or expense incurred by the Bank as a result
thereof including, without limitation, any loss incurred in obtaining,
liquidating, or employing deposits from third parties, but excluding the Bank's
loss of margin for the period after any such payment. If, because of the
introduction of or any change in, or because of any judicial, administrative, or
other governmental interpretation of, any law or regulation, there shall be any
increase in the cost to the Bank of making, funding, maintaining, or allocating
capital to LIBOR Advances, then from time to time, within fifteen (15) days
after demand by the Bank, the Borrower shall either (a) pay to the Bank
additional amounts sufficient to compensate the Bank for such increased cost; or
(b) convert all LIBOR Advances to a Prime Advance. If the Borrower elects the
option provided in the foregoing subparagraph (b), the Borrower shall not be
subject to the requirement hereunder that the Borrower reimburse the Bank for
any loss, cost or expense incurred by the Bank as a result of the Borrower
paying a LIBOR Advance prior to the end of the applicable LIBOR Interest Period;
provided, however, thereafter the Borrower may not elect for any Advances to be
LIBOR Advances. If, because of the introduction of or any change in, or because
of any judicial, administrative, or other governmental interpretation of, any
law or regulation, it becomes unlawful for the Bank to make, fund, or maintain
any LIBOR Advance, then the Bank's obligation to make, fund, or maintain any
LIBOR Advance shall terminate.
2.09. LATE FEE.
If any sum of principal or interest in respect of the Loan is not paid within
five (5) days after the date when due, then, in addition to and not in lieu of
any other rights or remedies available to the Bank, the Borrower shall pay to
the Bank, on demand, a late fee in an amount equal to the greater of five
percent (5%) of such sum or Twenty-Five Dollars ($25.00), but not to exceed Two
Thousand Dollars ($2,000.00). In no event, however, shall a late fee be payable
under this Section 2.09 in respect of an Advance and the interest therein if the
Borrower fails to pay such
Advance and interest on the Advance Maturity Date therefor or on the date on
which such Advance and interest are payable as a result of the acceleration of
the Loan pursuant to the terms of this Agreement.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
The Borrower represents and warrants to the Bank that as of the Closing
Date:
3.01. ORGANIZATION AND QUALIFICATION.
The Borrower is a duly formed and validly existing limited partnership under
the laws of the Virginia. The Guarantor is a duly formed and validly existing
real estate investment trust under the laws of the State of Maryland.
3.02. RIGHT AND POWER; CORPORATE AUTHORITY.
The Borrower has full right, power and authority to execute and deliver this
Agreement and the Note and to perform its obligation thereunder. The Borrower
has taken the necessary corporate action to authorize the execution and delivery
of the Agreement and the Note and the borrowings thereunder.
3.03. CONFLICT WITH OTHER INSTRUMENTS.
The execution and delivery of this Agreement and the Note, the consummation
of the transactions contemplated thereby, and the compliance with the terms,
conditions and provisions thereof will not conflict with or result in a breach
of any of the terms, conditions or provisions of the articles or certificate of
incorporation or by-laws of the Borrower, or, to the Borrower's actual
knowledge, any law or any regulation, order, writ, injunction or decree of any
court or Governmental Authority or any agreement or instrument to which the
Borrower is a party or by which the Borrower or its properties or assets are
subject to or bound, or constitute a default thereunder or result in the
creation or imposition of any lien, charge, security interest or encumbrance of
any nature whatsoever upon any of the property of the Borrower pursuant to the
terms of any such agreement or instrument, except as created by the Loan
Documents.
3.04. AUTHORITY, VALIDITY AND BINDING EFFECT.
The execution and delivery of this Agreement and the Note, and the making of
the borrowings contemplated by the provisions hereof and thereof, have been duly
authorized by all necessary action on the part of the Borrower, and no
authorization, approval or consent by, or filing with, any Governmental
Authority or public regulatory authority is necessary therefor except for
disclosures as required with the Securities and Exchange Commission. This
Agreement and the Note have been duly and validly executed and delivered by the
Borrower and constitute a legal, valid and binding obligation of the Borrower,
enforceable in accordance with their terms, except as the enforceability thereof
may be limited by bankruptcy, insolvency or other laws of general application
affecting the enforcement of creditors' rights generally and by principles of
equity.
3.05. FINANCIAL CONDITION.
The financial statements of the Borrower and the Guarantor furnished to the
Bank are complete and correct in all material respects. Such financial
statements were prepared in accordance with
GAAP consistently applied. The financial statements of the Borrower and the
Guarantor fairly present their respective financial condition at the respective
dates indicated therein. Since the dates of such financial statements, there has
been no material adverse change in the assets, liabilities or financial
condition of the Borrower and the Guarantor from that reflected thereon.
3.06. LITIGATION.
There are no actions, suits or proceedings pending or, to the Borrower's
actual knowledge, threatened, against or affecting the Borrower or the Guarantor
before any court or Governmental Authority which might have a Material Adverse
Effect on the Borrower or the Guarantor or their operations or financial
condition.
3.07. ERISA.
The Borrower and each ERISA Affiliate is in compliance in all material
respects with all applicable provisions of ERISA, and neither the Borrower nor
any ERISA Affiliate has incurred any liability to the PBGC. Neither a Reportable
Event nor a Prohibited Transaction, has occurred under, nor has there occurred
any complete or partial withdrawal from, nor has there occurred any other event
which would constitute grounds for termination of or the appointment of a
trustee to administer any "employee benefit plan" (including any "multi-employer
plan") maintained for employees of Borrower or any ERISA Affiliate, all within
the meanings ascribed by ERISA.
3.08. REGULATION U.
The Borrower is not engaged in the business of extending credit for the
purpose of purchasing or carrying margin stock (within the meaning of Regulation
U) and the Borrower does not hold any margin stock (as defined in Regulation U).
3.09. INVESTMENT COMPANY ACT.
Neither the Borrower nor the Guarantor is an "investment company" or a
company "controlled" by an "investment company," within the meaning of the
Investment Company Act of 1940, as amended.
3.10. PUBLIC UTILITY HOLDING COMPANY.
Neither the Borrower nor the Guarantor is a "holding company" or a
"subsidiary company" of a "holding company," or an "affiliate" of a "holding
company" or of a "subsidiary company" of a "holding company," within the meaning
of the Public Utility Holding Company Act of 1935, as amended.
3.11. INSOLVENCY.
Neither the Borrower nor the Guarantor is "insolvent" within the meaning of
that term as defined in the Federal Bankruptcy Code and the Borrower and the
Guarantor are each able to pay their debts as they mature.
3.12. ORGANIZATION AND QUALIFICATION.
To the extent required by Governmental Requirement, the Borrower is duly
qualified to conduct business in the state in which the Mortgaged Property is
located.
3.13. RIGHT AND POWER; CORPORATE AUTHORITY.
The Borrower has full right, power and authority to execute and deliver the
Loan Documents contemplated by the provisions hereof for such Advance and to
perform its obligation thereunder. The Borrower has taken the necessary
corporate action to authorize the execution and deliver of such Loan Documents.
3.14. CONFLICT WITH OTHER INSTRUMENTS.
The execution and delivery of the Loan Documents contemplated by the
provisions hereof for such Advance, the consummation of the transactions
contemplated thereby, and the compliance with the terms, conditions and
provisions thereof will not conflict with or result in a breach of any of the
terms, conditions or provisions of the articles or certificate of incorporation
or by-laws of the Borrower, or, to the Borrower's actual knowledge, any law or
any regulation, order, writ, injunction or decree of any court or Governmental
Authority or any agreement or instrument to which the Borrower is a party or by
which the Borrower or its properties or assets are subject to or bound, or
constitute a default thereunder or result in the creation or imposition of any
lien, charge, security interest or encumbrance of any nature whatsoever upon the
Mortgaged Properties or any other property of the Borrower pursuant to the terms
of any such agreement or instrument, except as created by the Loan Documents.
The execution and delivery of the Guaranty, the Guarantor's guarantee
contemplated thereby, and the compliance with the terms, conditions and
provisions thereof will not conflict with or result in a breach of any of the
terms, conditions or provisions of the trust agreement of the Guarantor, or, to
the Guarantor's actual knowledge, any law or any regulation, order, writ,
injunction or decree of any court or Governmental Authority or any agreement or
instrument to which the Guarantor is a party or by which the Guarantor or its
properties or assets are subject to or bound.
3.15. AUTHORITY, VALIDITY AND BINDING EFFECT.
The execution and delivery of the Loan Documents contemplated by the
provisions hereof for such Advance, have been duly authorized by all necessary
action on the part of the Borrower, and no authorization, approval or consent
by, or filing with, any Governmental Authority or public regulatory authority is
necessary therefor. Such Loan Documents have been duly and validly executed and
delivered by the Borrower and constitute legal, valid and binding obligations of
the Borrower, enforceable in accordance with their terms, except as the
enforceability thereof may be limited by bankruptcy, insolvency or other laws of
general application affecting the enforcement of creditors' rights generally and
by principles of equity.
3.16. LITIGATION.
There are no actions, suits or proceedings pending or, to the Borrower's
actual knowledge, threatened, against or affecting the Mortgaged Properties
before any court or Governmental Authority which might have a Material Adverse
Effect on the Borrower or a Mortgaged Property.
3.17. COMPLIANCE WITH GOVERNMENTAL REQUIREMENTS.
To Borrower's knowledge, the intended use of the Mortgaged Properties
complies in all material respects with all applicable Governmental Requirements,
as the same may be modified by any applicable variances and exceptions, and all
material provisions of any applicable restrictive
covenants, and the Borrower has obtained all material required permits with
respect to the operation and use of such Mortgaged Properties.
3.18. UTILITY SERVICES.
To Borrower's knowledge, all utility services necessary for the use and
operation of the Mortgaged Property contemplated by the Lease for such Mortgaged
Property are available at the boundaries of the Mortgaged Property and are
located within a public right of way adjacent to the Mortgaged Property or
within an easement benefiting the Mortgaged Property, which easement is
contiguous to the Mortgaged Property and a public right of way, and, to the
actual knowledge of Borrower, such utilities have sufficient capacity to serve
such Mortgaged Property.
3.19. HAZARDOUS MATERIALS; STORAGE CONTAINERS; WETLANDS.
The Borrower has not used Hazardous Materials on, from or affecting the
Mortgaged Property in any manner which violates any Governmental Requirements or
Hazardous Materials Laws, and, to the best of the Borrower's knowledge, except
as disclosed in any written reports and data provided to the Bank, no prior
owner of such Mortgaged Property or prior occupant thereof, has used Hazardous
Materials on, from or affecting the Mortgaged Property in any manner which
violates any Governmental Requirements or Hazardous Materials Laws. The Borrower
further represents to the Bank that, except as disclosed in any written reports
and data provided to the Bank, the Borrower has not received any notice of any
violations of Governmental Requirements or Hazardous Materials Laws governing
the use, storage, treatment, transportation, manufacture, refinement, handling,
production or disposal of Hazardous Materials at such Mortgaged Property and, to
the best of the Borrower's knowledge, there have been no actions commenced or
threatened by any party for non-compliance with any such laws or regulations at
such Mortgaged Property. The Borrower further represents that, except as
disclosed in any written reports and data provided to the Bank, no Storage
Containers are located on or under such Mortgaged Property, except in compliance
with all applicable Hazardous Materials Laws, and such Mortgaged Property does
not contain any Wetlands.
3.20. COVENANTS AND RESTRICTIONS.
Except as disclosed in writing to Bank, there are no covenants, conditions or
restrictions of record or of which the Borrower has knowledge that prohibit the
Mortgaged Property from being used and operated as contemplated by the Lease for
such Mortgaged Property.
3.21. FLOOD HAZARD.
Except as may be disclosed in any survey or flood hazard certificate provided
to the Bank, no part of the Improvements forming a part of the Mortgaged
Property are located in or on an "area having special flood hazards" ("SFHA"),
as that term is defined in the Flood Disaster Protection Act of 1973, as amended
by the 1994 National Flood Insurance Reform Act, and as otherwise amended. If
such Improvements (or any portion thereof) are located in an SFHA, the building
floor elevations of such Improvements are located at the height prescribed (if
any) by Governmental Requirements above the designated flood plain elevation for
the SFHA, as determined by FEMA. For purposes of this Paragraph 3.21, the
defined term Improvements shall include only walled and roofed buildings.
The representations and warranties contained above and in the other
Loan Documents shall be true on and as of the date of each Advance with the same
effect as though such representations and warranties had been made on and as of
each such date.
ARTICLE IV
CONDITIONS OF LENDING
The Borrower agrees that the obligation of the Bank to make an Advance
is subject to the accuracy in all material respects, as of the date hereof and
the date of such Advance of the representations and warranties contained herein
and under the other Loan Document, to performance by the Borrower of its
agreements to be performed hereunder and under the other Loan Document on or
before the date of such Advance, and to the satisfaction of the following
further conditions:
4.01. INITIAL ADVANCE.
Prior to the initial Advance by the Bank:
a. ORGANIZATIONAL DOCUMENTS. THERE SHALL HAVE BEEN
FURNISHED TO THE BANK BY THE BORROWER:
i. A copy of the certificate of limited
partnership of the Borrower, together with any and all
amendments thereto, filed with the appropriate Governmental
Authorities of the State of Virginia;
ii. A copy of the limited partnership agreement
of the Borrower, together with any and all amendments thereto
certified by the Guarantor;
iii. An original or a copy of a Certificate of
Existence for the Borrower issued by the appropriate
Governmental Authorities of the State of Virginia bearing a
recent date;
iv. A copy of the resolutions of the Board of
Directors of the Borrower authorizing the Loan and the
execution of this Agreement and the Borrower Note certified by
the Guarantor;
v. A copy of the articles of organization of
Brierbrook, together with any and all amendments thereto,
filed with the appropriate Governmental Authorities of the
State of Tennessee;
vi. A copy of the operating agreement of
Brierbrook, together with any and all amendments thereto,
certified by the Borrower;
vii. An original or copy of a Certificate of
Existence for Brierbrook issued by the appropriate
Governmental Authorities for the State of Tennessee;
viii. A copy of the resolutions authorizing the
Loan and the execution of this Agreement certified by the
Borrower.
ix. A copy of the trust agreement for the
Guarantor, together with any and all amendments thereto,
certified by the Secretary thereof;
x. A copy of the resolutions of the Guarantor
authorizing the Guaranty, certified by the Secretary of
Guarantor; and
xi. An original or a copy of a Certificate of
Existence for the Guarantor issued by the appropriate
Governmental Authorities of the State of Maryland.
b. BORROWER'S COUNSEL OPINION. THE BORROWER SHALL
FURNISH TO THE BANK AN OPINION OF COUNSEL FOR THE BORROWER AND THE
GUARANTOR IN FORM AND SUBSTANCE REASONABLY ACCEPTABLE TO BANK.
c. NOTE. THE BORROWER SHALL HAVE EXECUTED AND DELIVERED
TO THE BANK THE NOTE WITH BLANKS APPROPRIATELY COMPLETED.
d. COMMITMENT FEE. THE BORROWER SHALL HAVE PAID TO THE
BANK THE COMMITMENT FEE. THE COMMITMENT FEE SHALL BE PAID ON THE
CLOSING DATE.
4.02. MORTGAGED PROPERTIES.
With respect to each of the Mortgaged Properties, the Borrower shall
have satisfied each of the following conditions:
a. ORGANIZATIONAL DOCUMENTS. THERE SHALL HAVE BEEN
FURNISHED TO THE BANK BY THE BORROWER:
i. A certificate of the Borrower, certifying
that no amendments or modifications have been made to the
articles of incorporation or by-laws of the Borrower furnished
to the Bank pursuant to Section 4.01(a) hereof, other than
such amendments or modifications as have been furnished to the
Bank pursuant to Section 6.14 hereof.
ii. An original or copy of a Certificate of
Existence for the Borrower issued by the Secretary of State of
Virginia or Tennessee, as applicable, Delaware bearing a
recent date;
iii. To the extent required by Governmental
Requirement, an original or copy of a Certificate of Authority
for the Borrower as a foreign corporation doing business in
the state in which the Mortgaged Property is located;
iv. A copy of the resolutions authorizing the
Advance and the execution of the Loan Documents contemplated
by the provisions hereof for such Advance;
v. A certificate of the Guarantor certifying
that no amendments or modifications have been made to the
trust agreement of the Guarantor furnished to the Bank
pursuant to Section 4.01(ix) hereof;
vi. An original or copy of a Certificate of
Existence for the Guarantor issued by the Secretary of State
of Maryland bearing a recent date; and
vii. A copy of the resolutions of the Guarantor
authorizing such Advance or for all Advances made pursuant to
this Agreement.
b. BORROWER'S COUNSEL OPINION. THE BORROWER SHALL
FURNISH TO THE BANK THE OPINIONS OF COUNSEL FOR THE BORROWER AND THE
GUARANTOR IN FORM AND SUBSTANCE REASONABLY ACCEPTABLE TO BANK.
c. PROJECT AGREEMENT. THE BANK AND THE BORROWER SHALL
HAVE ENTERED INTO A SATISFACTORY PROJECT AGREEMENT WITH RESPECT TO THE
MORTGAGED PROPERTY.
d. SECURITY DOCUMENTS. THERE SHALL HAVE BEEN EXECUTED
AND DELIVERED TO THE BANK THE FOLLOWING SECURITY DOCUMENTS WITH RESPECT
TO SUCH MORTGAGED PROPERTY:
i. a Mortgage which shall constitute a first
mortgage or deed of trust lien, as applicable, on the
Borrower's fee simple interest in such Mortgaged Property or
the Assignment of a ground lease in form and substance
acceptable to the Bank;
ii. an Assignment of Rents and Leases pursuant
to which the Borrower shall have collaterally assigned to the
Bank all the right, title and interest of the Borrower as
landlord in and to all existing and future leases of space in
such Mortgaged Property, including, without limitation, the
Lease for such Mortgaged Property, and all rentals and other
monies due and to become due under said leases;
iii. an Assignment pursuant to which the Borrower
shall have collaterally assigned to the Bank all the right,
title and interest of the Borrower in and to the material
permits, licenses, warranties and other agreements in respect
of such Mortgaged Property;
iv. If the Borrower has then entered into a
Project Purchase Agreement for such Mortgaged Property, a
Collateral Assignment of Project Purchase Agreement pursuant
to which the Borrower shall have collaterally assigned to the
Bank all the right, title and interest of the Borrower in, to
and under such Project Purchase Agreement and the Deposit made
thereunder; and
Each of the above-described collateral documents shall be properly
completed and reflect only such further changes as may be necessary to comply
with the requirements of the jurisdiction in which such Mortgaged Property is
located.
e. BORROWER'S AFFIDAVIT. THE BORROWER SHALL HAVE
FURNISHED TO THE BANK AN EXECUTED BORROWER'S AFFIDAVIT WITH RESPECT TO
SUCH MORTGAGED PROPERTY.
f. ENVIRONMENTAL INDEMNITY. THE BORROWER AND THE
GUARANTOR SHALL HAVE FURNISHED TO THE BANK AN EXECUTED ENVIRONMENTAL
INDEMNITY AGREEMENT WITH RESPECT TO SUCH MORTGAGED PROPERTY.
g. TITLE POLICY. A TITLE COMPANY SHALL HAVE ISSUED AND
DELIVERED TO THE BANK A POLICY OF TITLE INSURANCE ACCEPTABLE TO THE
BANK INSURING THE PRIORITY OF THE LIEN OF THE MORTGAGE ENCUMBERING SUCH
MORTGAGED PROPERTY IN THE AMOUNT OF NOT LESS THAN SIXTY-FIVE PERCENT
(65%) OF THE APPRAISED VALUE OF THE MORTGAGED PROPERTY. THE TITLE
POLICY SHALL HAVE AN EFFECTIVE DATE OF NO EARLIER THAN THE DATE OF SUCH
ADVANCE, SHALL PROVIDE EXTENDED COVERAGE (i.e., ALL PREPRINTED OR
STANDARD EXCEPTIONS SHALL BE DELETED), A 3.1 ZONING ENDORSEMENT (IF
SUCH ENDORSEMENT IS SELECTED BY THE BORROWER PURSUANT TO SECTION
4.01(j)(i) HEREOF TO EVIDENCE PROPER ZONING OF THE MORTGAGED PROPERTY),
AN ACCESS ENDORSEMENT, A COMPREHENSIVE ENDORSEMENT, A SUBDIVISION
ENDORSEMENT (WHERE NECESSARY), A LAST DOLLAR ENDORSEMENT, A CONTIGUITY
ENDORSEMENT (IF NEEDED), A REVOLVING CREDIT ENDORSEMENT AND AFFIRMATIVE
COVERAGE WITH RESPECT TO FILED OR UNFILED MECHANIC'S LIEN (WHERE
AVAILABLE AT REASONABLE COST) AND SHALL BE SUBJECT ONLY TO SUCH
EXCEPTIONS AS MAY BE REASONABLY APPROVED BY THE BANK.
h. SURVEY. THE BORROWER SHALL HAVE FURNISHED TO THE BANK
AN URBAN CLASS ALTA/ACSM MINIMUM STANDARD DETAIL SURVEY (INCLUDING
ITEMS 1,3,4,6,7,8,9,10,11 AND 13 OF TABLE A THEREOF) OF THE MORTGAGED
PROPERTY, MADE BY A REGISTERED ENGINEER OR SURVEYOR LICENSED BY THE
STATE IN WHICH SUCH MORTGAGED PROPERTY IS LOCATED AND REASONABLY
SATISFACTORY TO THE BANK AND THE TITLE COMPANY AND CERTIFIED TO EACH OF
THEM AS OF A DATE NOT MORE THAN SIXTY (60) DAYS PRIOR TO THE DATE OF
THE ADVANCE MADE IN RESPECT OF SUCH MORTGAGED PROPERTY THE BOUNDARIES
OF SUCH MORTGAGED PROPERTY, THE ACTUAL LOCATION OF THE IMPROVEMENTS
LOCATED ON SUCH MORTGAGED PROPERTY, ALL BUILDING SETBACK LINES,
EASEMENTS, RIGHTS OF WAY AND ENCROACHMENTS AFFECTING SUCH MORTGAGED
PROPERTY AND OTHER MATTERS APPARENT THEREON AND THE RELATION OF SUCH
MORTGAGED PROPERTY TO PUBLIC THOROUGHFARES FOR ACCESS PURPOSES,
CERTIFYING THAT THE IMPROVEMENTS (EXCLUDING IMPROVEMENTS THAT ARE NOT
WALLED AND ROOFED BUILDINGS) LOCATED ON THE MORTGAGED PROPERTY ARE NOT
LOCATED WITHIN A SPECIAL FLOOD HAZARD AREA AS DEFINED BY THE FLOOD
DISASTER PROTECTION ACT OF 1973, AND SHOWING THE NUMBER OF THE FLOOD
INSURANCE RATE MAP ON WHICH SUCH MORTGAGED PROPERTY IS SHOWN AND THE
DATE OF SUCH MAP, AND SHALL SPECIFY THE FLOOD HAZARD ZONE IN WHICH SUCH
MORTGAGED PROPERTY IS SITUATED. SUCH SURVEY SHALL BE REASONABLY
ACCEPTABLE TO THE BANK AND SHALL NOT DISCLOSE, IN THE BANK'S REASONABLE
OPINION, ANY FACTS OR CIRCUMSTANCES WHICH MATERIALLY AFFECT OR COULD
MATERIALLY AFFECT THE MARKETABILITY OF SUCH MORTGAGED PROPERTY OR THE
BORROWER'S ABILITY TO SELL OR FINANCE SUCH MORTGAGED PROPERTY;
i. APPROVALS AND PERMITS. THE BORROWER SHALL SUBMIT TO
THE BANK EVIDENCE REASONABLY SATISFACTORY TO THE BANK TO THE EFFECT
THAT:
i. The Mortgaged Property is presently zoned to
permit its use and operation as contemplated by the Lease for
such Mortgaged Property, which evidence may be a 3.1 zoning
endorsement issued by the Title Company or a satisfactory
opinion of counsel admitted to practice in the state in which
such Mortgaged Property is located or a zoning confirmation
letter of the Governmental Authority having zoning
jurisdiction over such Mortgaged Property;
ii. The Borrower has obtained such access
easements and utility easements, if any, as may be reasonably
necessary for the contemplated use of such Mortgaged Property
and such easements are insured under the Title Policy;
iii. All required permits, licenses and approvals
for the use and operation of such Mortgaged Property
(including a permanent occupancy permit or a certificate of
occupancy, if issued by the jurisdiction in which such
Mortgaged Property is located) have been obtained from the
applicable Governmental Authorities; and
iv. All utility services necessary for the
operation of such Mortgaged Property are available at the
boundaries of the Mortgaged Property and are located within a
public right of way adjacent to the Mortgaged Property or
within an easement benefiting the Mortgaged Property, which
easement is contiguous to the Mortgaged Property and a public
right of way, and all such utilities have the capacity
necessary to provide service to such Mortgaged Property.
j. INSURANCE. THE BORROWER SHALL HAVE FURNISHED TO THE
BANK THE INSURANCE REQUIRED BY THE MORTGAGE ENCUMBERING SUCH MORTGAGED
PROPERTY, TOGETHER WITH EVIDENCE OF PAYMENT IN FULL OF THE PREMIUMS
THEREON.
k. PLANS AND SPECIFICATIONS. TO THE EXTENT THE SAME ARE
IN THE BORROWER'S OR ITS AGENT'S POSSESSION, THE BORROWER SHALL HAVE
FURNISHED TO THE BANK FOR ITS REVIEW AND REASONABLE APPROVAL THE PLANS
AND SPECIFICATIONS FOR SUCH MORTGAGED PROPERTY.
l. APPRAISAL. THE BANK SHALL HAVE RECEIVED A WRITTEN
APPRAISAL IN A FORM ACCEPTABLE TO BANK. THE APPRAISER PROVIDING A
MORTGAGED PROPERTY APPRAISAL WILL BE SELECTED AND DIRECTLY ENGAGED BY
THE BANK. THE COST OF A MORTGAGED PROPERTY APPRAISAL WILL BE CHARGED TO
THE BORROWER AND PAID BY THE BORROWER UPON THE BORROWER'S RECEIPT OF AN
INVOICE THEREFOR. EACH MORTGAGED PROPERTY APPRAISAL SHALL BE PREPARED
IN ACCORDANCE WITH THE UNIFORM STANDARDS OF PROFESSIONAL APPRAISAL
PRACTICE APPLICABLE TO FEDERALLY RELATED TRANSACTIONS AS SET OUT IN
APPENDIX A TO THE REAL ESTATE APPRAISAL REGULATIONS ADOPTED BY THE
OFFICE OF THE COMPTROLLER OF THE CURRENCY PURSUANT TO THE FINANCIAL
INSTITUTIONS REFORM, RECOVERY AND ENFORCEMENT ACT OF 1989 (SUB-PART C
OF 12 C.F.R. 34) AND SHALL BE PREPARED IN RESPONSE TO AN ENGAGEMENT
LETTER TO BE ISSUED BY THE BANK. PRIOR TO THE INITIAL ADVANCE HEREUNDER
THE BANK AND THE BORROWER SHALL AGREE UPON A LIST OF APPRAISERS FROM
WHICH THE BANK SHALL SELECT APPRAISERS TO PROVIDE THE APPRAISALS
REQUIRED HEREUNDER.
m. INSPECTING ARCHITECT'S REPORT. IF REQUESTED BY THE
BANK, THE BANK SHALL HAVE RECEIVED A SATISFACTORY REPORT OF AN
INSPECTING ARCHITECT FOR SUCH MORTGAGED PROPERTY.
n. ENVIRONMENTAL REPORT. THE BORROWER SHALL HAVE
FURNISHED TO THE BANK A COPY OF AN ENVIRONMENTAL REPORT BY AN
ENVIRONMENTAL CONSULTING COMPANY REASONABLY ACCEPTABLE TO THE BANK (THE
"ENVIRONMENTAL REPORT") SHOWING THAT THE ENVIRONMENTAL CONDITION OF
SUCH MORTGAGED PROPERTY IS REASONABLY ACCEPTABLE TO THE BANK. THE
ENVIRONMENTAL REPORT SHALL BE ADDRESSED TO THE BANK, OR, IN THE
ALTERNATIVE, THE BORROWER SHALL PROVIDE TO THE BANK A LETTER OF THE
CONSULTING COMPANY THAT PREPARED THE ENVIRONMENTAL REPORT PURSUANT TO
WHICH SUCH CONSULTING COMPANY AUTHORIZES THE BANK TO RELY ON THE
ENVIRONMENTAL REPORT.
o. MASTER LEASE. IN THE EVENT A MORTGAGED PROPERTY IS
SUBJECT TO MASTER LEASE TO ONE TENANT, THE BORROWER SHALL HAVE
FURNISHED TO THE BANK AN EXECUTED LEASE FOR SUCH MORTGAGED PROPERTY
WHICH SHALL HAVE A REMAINING TERM (EXCLUDING OPTIONAL EXTENSION OR
RENEWAL PERIODS) ACCEPTABLE TO BANK AND SHALL BE IN A FORM AND CONTENT
REASONABLY ACCEPTABLE TO THE BANK IN ALL OTHER RESPECTS, INCLUDING
RENTAL AMOUNTS PAYABLE THEREUNDER. SUCH LEASE OR A SEPARATE DOCUMENT
FROM THE TENANT WHICH IS PARTY THERETO SHALL INCLUDE THE AGREEMENT OF
SUCH TENANT TO SUBORDINATE ITS INTEREST THEREUNDER TO ANY FIRST
MORTGAGE OR DEED OF TRUST ON SUCH MORTGAGED PROPERTY UPON THE REQUEST
OF THE MORTGAGEE OR THE BENEFICIARY THEREUNDER (A "MORTGAGEE") AND TO
ATTORN TO SUCH MORTGAGEE OR ANY PURCHASER OF SUCH MORTGAGED PROPERTY AT
A FORECLOSURE SALE OR A SALE MADE UNDER ANY POWER OF SALE OR PURSUANT
TO A DEED IN LIEU OF FORECLOSURE, PROVIDED THE BANK AGREES TO
REASONABLE NON-DISTURBANCE PROVISIONS IF THE TENANT UNDER SUCH LEASE IS
NOT IN DEFAULT BEYOND ANY APPLICABLE CURE PERIOD THEREUNDER.
The Borrower shall use reasonable efforts to attempt to obtain the
following provisions in such Lease or separate document:
i. The Tenant party thereto shall agree to give
a Mortgagee by registered or certified mail, a copy of any
notice of default served upon the landlord, provided that
prior to such notice of default such Tenant has been notified
in writing, of the existence of such mortgage or deed of trust
and the address of such Mortgagee;
ii. A Mortgagee shall have sixty (60) days after
its receipt from such Tenant of written notice of a default by
the landlord under the such Lease to correct or cure such
default; and
iii. Such Tenant shall comply with all Hazardous
Materials Laws, and shall not store any Hazardous Materials
in, on or under such Mortgaged Property, except in accordance
with Hazardous Materials Laws.
p. SUBORDINATION, NON-DISTURBANCE AND ATTORNMENT
AGREEMENT. THE BORROWER SHALL HAVE FURNISHED TO THE BANK A
SUBORDINATION, NON-DISTURBANCE AND ATTORNMENT AGREEMENT FOR SUCH
MORTGAGED PROPERTY, EXECUTED BY THE BORROWER, THE BANK AND TENANT
MASTER LEASING SUCH MORTGAGED PROPERTY.
q. NO EVENT OF DEFAULT. ON THE DATE OF SUCH ADVANCE NO
EVENT OF DEFAULT SHALL HAVE OCCURRED AND BE CONTINUING UNLESS THE
ADVANCE IS DESIGNATED BY BORROWER AS NECESSARY TO CURE A DEFAULT WHICH
BUT FOR THE ADVANCE WOULD BE CURED BY SUCH ADVANCE.
r. DAMAGE. SUCH MORTGAGED PROPERTY SUCH SHALL NOT HAVE
BEEN MATERIALLY INJURED OR DAMAGED BY FIRE OR OTHER CASUALTY.
s. TENANT ESTOPPEL. THE BORROWER SHALL HAVE FURNISHED TO
THE BANK A TENANT ESTOPPEL LETTER IN RESPECT OF SUCH MORTGAGED PROPERTY
EXECUTED BY THE TENANT LEASING SUCH MORTGAGED PROPERTY IN A FORM WHICH
IS REASONABLY SATISFACTORY TO THE BANK AND SUCH TENANT, STATING THAT
THE LEASE IS IN FULL FORCE AND EFFECT, THAT LANDLORD
IS NOT IN DEFAULT AND THAT TENANT IS NOT AWARE OF ANY AMOUNTS IT COULD
SETOFF AGAINST RENT AND INCLUDING SUCH OTHER STATEMENTS AS ARE
REASONABLY REQUIRED BY THE BANK.
t. PURCHASE AGREEMENT FOR ACQUISITION OF MORTGAGED
PROPERTY. THE BORROWER SHALL HAVE FURNISHED TO THE BANK A COPY OF THE
EXECUTED PURCHASE AGREEMENT PURSUANT TO WHICH THE BORROWER HAS ACQUIRED
OR WILL ACQUIRE SUCH MORTGAGED PROPERTY AND A COPY OF THE CLOSING
STATEMENT THEREFOR.
u. SFHA. IF THE IMPROVEMENTS (OR ANY PORTION THEREOF)
FORMING A PART OF SUCH MORTGAGED PROPERTY (EXCLUDING IMPROVEMENTS THAT
ARE NOT WALLED AND ROOFED BUILDINGS) ARE LOCATED IN AN SFHA:
i. The Borrower shall have furnished evidence
satisfactory to the Bank that the building floor elevations of
such Improvements are located at the height (if any)
prescribed by Governmental Requirements above the designated
flood plain elevation for the SFHA, as determined by FEMA; and
ii. The Borrower shall have provided to the Bank
either: (A) the flood insurance required by the Mortgage
encumbering such Mortgaged Property, together with evidence of
payment in full of the premium thereon, or (B) a copy of a
Letter of Map Revision ("LOMR") issued by FEMA, removing such
Mortgaged Property from the SFHA as determined by FEMA.
The Borrower shall furnish each of the items required under Section
4.02(g), (h), (i), (n), (o) and (p) at least ten (10) days prior to the making
of such Advance.
4.03. PROJECT ADVANCES. WITH RESPECT TO ADVANCES OF THE
LOAN IN CONNECTION WITH THE ACQUISITION BY BORROWER OF PROJECTS, OTHER
THAN A MORTGAGED PROPERTY, BORROWER SHALL FURNISH TO BANK NOT LESS THAN
TEN (10) DAYS PRIOR TO SUCH ADVANCE, COPIES OF BORROWER'S INTERNAL
ANALYSIS OF SUCH PROJECT TOGETHER WITH THE APPLICABLE PURCHASE
AGREEMENT. AS SOON AS PRACTICABLE FOLLOWING THE ACQUISITION OF A
PROJECT, BORROWER SHALL DELIVER TO BANK A COPY OF ITS OWNER'S TITLE
INSURANCE POLICY WITH RESPECT TO SUCH PROJECT.
4.04. WORKING CAPITAL ADVANCES. WITH RESPECT TO ADVANCE OF
THE LOAN FOR BORROWER'S WORKING CAPITAL PURPOSE, SUCH ADVANCES WILL BE
MADE BY BANK TO BORROWER UPON APPLICATION BY BORROWER WHICH APPLICATION
SHALL STATE THE INTENDED USE OF SUCH ADVANCES.
4.05. PROCEEDINGS AND DOCUMENTS.
All legal details and proceedings in connection with the transactions
contemplated by this Agreement shall be in form and substance reasonably
satisfactory to counsel for the Bank, and the Bank shall have received all such
counterpart originals or certified or other copies of such documents and
proceedings in connection with such transactions, in form and substance, as to
certification and otherwise, reasonably satisfactory to such counsel, as the
Bank or its counsel may request.
ARTICLE V
DISBURSEMENTS
5.01. ADVANCES.
Subject to the terms and conditions hereof, and relying upon the
representations and warranties herein set forth, the Bank agrees to make
Advances to the Borrower in accordance with, and subject to the following
requirements and limitations:
a. REQUESTS FOR LOAN ADVANCES. NOT LESS THAN FIVE (5)
BUSINESS DAYS PRIOR TO THE MAKING OF AN ADVANCE, THE BORROWER SHALL
SUBMIT TO THE BANK A REQUEST FOR ADVANCE IN SUCH FORM AS THE BANK MAY
REQUIRE SETTING FORTH THE TOTAL AMOUNT OF THE ADVANCE WHICH IS
REQUESTED. EACH REQUEST FOR ADVANCE AND EACH RECEIPT OF THE ADVANCE
REQUESTED THEREBY SHALL CONSTITUTE A CERTIFICATION BY THE BORROWER THAT
THE REPRESENTATIONS AND WARRANTIES CONTAINED IN ARTICLE III HEREOF ARE
TRUE AND CORRECT ON THE DATE OF SUCH REQUEST FOR ADVANCE OR SUCH
RECEIPT, AS THE CASE MAY BE.
b. BORROWING LIMITATIONS. IN NO EVENT SHALL THE
OUTSTANDING PRINCIPAL BALANCE OF THE LOAN EXCEED THE BORROWING BASE.
c. ADVANCES TO CURE DEFAULTS; ETC. NOTWITHSTANDING THE
FOREGOING PROVISIONS OF THIS SECTION 5.01, AND WITHOUT RECEIVING
REQUESTS FOR ADVANCES FOR SUCH ADVANCES, THE BANK MAY AT ANY TIME OR
FROM TIME TO TIME (i) MAKE ADVANCES TO CURE ANY EVENT OF DEFAULT OR
CONDITIONAL DEFAULT, (ii) MAKE ADVANCES TO PAY INTEREST ON THE LOAN,
(iii) MAKE ADVANCES TO PAY THE REASONABLE FEES AND EXPENSES OF COUNSEL
FOR THE BANK; AND (iv) MAKE ADVANCES TO PAY THE REASONABLE FEES AND
EXPENSES PAYABLE TO A TITLE COMPANY FOR THE ISSUANCE OF A TITLE POLICY.
ANY ADVANCES MADE PURSUANT TO THIS SUBPARAGRAPH (c) SHALL BE EVIDENCED
BY THE NOTE, AS FULLY AS IF MADE TO THE BORROWER, AND SHALL BE PAID BY
THE BORROWER UPON DEMAND BY THE BANK. THE BANK SHALL PROVIDE WRITTEN
NOTICE TO THE BORROWER OF EACH ADVANCE MADE UNDER THIS SUBPARAGRAPH
(c).
ARTICLE VI
BORROWER'S AFFIRMATIVE COVENANTS
The Borrower covenants that until payment in full of the Loan and
performance of all of the Borrower's other obligations under the Loan Documents:
6.01. FINANCIAL STATEMENTS.
The Borrower will deliver or cause to be delivered to the Bank:
a. AS SOON AS PRACTICABLE, BUT IN ANY EVENT WITHIN
NINETY (90) DAYS AFTER THE CLOSE OF EACH FISCAL YEAR OF GUARANTOR,
AUDITED FINANCIAL STATEMENTS OF BORROWER, PREPARED BY A CERTIFIED
PUBLIC ACCOUNTANT ACCEPTABLE TO BANK, INCLUDING A BALANCE SHEET,
STATEMENT OF INCOME AND RETAINED EARNINGS AND A STATEMENT OF CASH
FLOWS.
b. WITHIN TEN (10) DAYS AFTER THE SAME ARE FILED, COPIES
OF ALL REPORTS FILED BY GUARANTOR WITH THE SECURITIES AND EXCHANGE
COMMISSION.
c. FIVE (5) DAYS PRIOR TO EACH ADVANCE, A BORROWING BASE
CERTIFICATE.
d. AS SOON AS PRACTICABLE, BUT IN ANY EVENT WITHIN
THIRTY (30) DAYS AFTER THE END OF EACH FISCAL QUARTER OF THE BORROWER,
RENT ROLLS FOR EACH OF THE MORTGAGED PROPERTIES, TOGETHER WITH A
COMPLIANCE CERTIFICATE.
e. WITHIN NINETY (90) DAYS AFTER THE END OF EACH FISCAL
YEAR, PROJECTED INCOME STATEMENTS AND BALANCE SHEETS FOR BORROWER AND
GUARANTOR.
f. AS SOON AS POSSIBLE, BUT IN ANY EVENT WITHIN TEN (10)
DAYS AFTER THE BORROWER BECOMES AWARE THEREOF, A WRITTEN STATEMENT
SIGNED BY THE CHIEF EXECUTIVE OFFICER OR THE CHIEF FINANCIAL OFFICER OF
THE BORROWER DESCRIBING ANY REPORTABLE EVENT OR PROHIBITED TRANSACTION
WHICH HAS OCCURRED WITH RESPECT TO ANY PLAN AND THE ACTION WHICH THE
BORROWER PROPOSES TO TAKE WITH RESPECT THERETO; AND
g. THE BORROWER WILL WITH REASONABLE PROMPTNESS FURNISH
TO THE BANK SUCH ADDITIONAL FINANCIAL AND OTHER INFORMATION RESPECTING
THE FINANCIAL CONDITION, BUSINESS OR OPERATIONS OF THE BORROWER AS THE
BANK MAY FROM TIME TO TIME REASONABLY REQUEST.
All such financial statements shall be prepared in accordance with GAAP
applied on a basis consistent with prior practice unless otherwise specifically
noted thereon. The Borrower will with reasonable promptness furnish to the Bank
such additional financial and other information respecting the financial
condition, business or operations of the Borrower as the Bank may from time to
time reasonably request.
6.02. NOTICES.
The Borrower will promptly give the Bank written notice of:
a. THE OCCURRENCE OR EXISTENCE OF ANY EVENT OF DEFAULT
OF WHICH THE BORROWER HAS ACTUAL KNOWLEDGE, TOGETHER WITH A WRITTEN
STATEMENT OF THE ACTION BEING TAKEN BY THE BORROWER TO REMEDY SUCH
EVENT OF DEFAULT; AND
b. ALL LITIGATION OR PROCEEDINGS BEFORE ANY COURT OR
GOVERNMENTAL AUTHORITY AFFECTING THE BORROWER OR ITS PROPERTIES THAT
THE BORROWER REASONABLY DETERMINES MAY HAVE A MATERIAL ADVERSE EFFECT
OR THAT AFFECTS THE USE OR OPERATION OF A PROJECT IN RESPECT OF WHICH
AN ADVANCE HAS BEEN MADE AND IS OUTSTANDING.
6.03. ACCESS TO BOOKS AND INSPECTION.
The Borrower will give any officer or representative of the Bank access to,
and permit such representative to examine, copy or make extracts from, any and
all books, records and documents in the possession of the Borrower relating to
the Projects financed with proceeds of the Loan and to inspect such Projects
(provided such inspections shall not interfere with a Tenant's use of a
Project), all at such reasonable times and as often as the Bank may reasonably
request; provided, however, that the Bank shall have no obligation to make any
such inspections nor have any responsibility to the Borrower or any person, firm
or corporation for any defects or deficiency which may be or which would have
been revealed by any such inspection, whether or not discovered by the Bank.
6.04. GOVERNMENTAL REQUIREMENTS.
The Borrower will comply with all Governmental Requirements (including ERISA)
and all material terms of restrictive covenants applicable to the each Mortgaged
Property in respect of which Advances have been made and are outstanding.
6.05. MAINTENANCE.
The Borrower will maintain each Mortgaged Property in respect of which an
Advance has been made and is outstanding in good repair and safe condition at
all times and indemnify and defend and hold the Bank harmless from any and all
claims relative to the use and occupancy of each Mortgaged Property.
6.06. INSURANCE.
The Borrower will maintain such insurance on each Mortgaged Property in
amounts acceptable to Bank, provided, however, such coverages and amounts are
reasonably and commercially available.
6.07. FURTHER ASSURANCES.
The Borrower will execute, acknowledge when appropriate, and deliver from
time to time at the request of the Bank, such instruments and documents as in
the reasonable opinion of the Bank are necessary or desirable to perfect the
security interests required herein.
6.08. FAILURE TO PERFORM.
If the Borrower neglects or refuses to pay the costs, premiums, liabilities
or other charges incurred in connection with the Loan or otherwise fails to
perform its covenants hereunder, the Bank may do so and may add the cost thereof
to the Loan as indebtedness evidenced by the Note, and may collect the same from
the Borrower upon demand with interest thereon at the highest Default Rate until
paid thereunder.
6.09. ENVIRONMENTAL.
The Borrower covenants and agrees to keep or cause each Mortgaged Property to
be kept free of Hazardous Materials in violation of any Governmental Requirement
and, without limiting the foregoing, the Borrower shall not cause or permit any
such Mortgaged Property to be used to generate, manufacture, refine, transport,
treat, store, handle, dispose of, transfer, produce or process Hazardous
Materials, except in compliance with all applicable Governmental Requirements,
nor shall the Borrower cause or permit, as a result of any intentional or
unintentional act or omission on the part of the Borrower or any tenant,
subtenant or occupant, a release of Hazardous Materials in violation of any
Governmental Requirement onto any such Mortgaged Property or onto any other
property.
If Hazardous Materials are present at a Mortgaged Property in violation
of the requirements of this Section 6.09, the Borrower shall:
a. CONDUCT AND COMPLETE ALL INVESTIGATIONS, STUDIES,
SAMPLING AND TESTING, AND ALL REMEDIAL, REMOVAL AND OTHER ACTIONS
NECESSARY TO CLEAN UP AND REMOVE ALL HAZARDOUS MATERIALS ON, UNDER OR
FROM SUCH MORTGAGED PROPERTY IN
ACCORDANCE WITH ALL APPLICABLE FEDERAL, STATE AND LOCAL LAWS,
ORDINANCES, RULES, REGULATIONS AND POLICIES (INCLUDING, WITHOUT
LIMITATION, HAZARDOUS MATERIALS LAWS), TO THE REASONABLE SATISFACTION
OF THE BANK, AND IN ACCORDANCE WITH THE ORDERS AND DIRECTIVES OF ALL
GOVERNMENTAL AUTHORITIES;
b. DEFEND, INDEMNIFY AND HOLD HARMLESS THE BANK, ITS
EMPLOYEES, AGENTS, OFFICERS AND DIRECTORS (THE "BANK INDEMNIFIED
PARTIES") FROM AND AGAINST ANY CLAIMS, DEMANDS, PENALTIES, FINES,
LIABILITIES, SETTLEMENTS, DAMAGES, COSTS OR EXPENSES OF WHATEVER KIND
OR NATURE, KNOWN OR UNKNOWN, CONTINGENT OR OTHERWISE, ARISING OUT OF OR
IN ANY WAY RELATED TO ("ENVIRONMENTAL LOSSES").
i. the presence, disposal, release or
threatened release of any Hazardous Materials on, over, under,
from or affecting such Mortgaged Property or the soil, water,
vegetation, buildings, personal property, persons or animals
thereon;
ii. any personal injury (including wrongful
death) or property damage (real or personal) arising out of or
related to such Hazardous Materials;
iii. any lawsuit brought or threatened,
settlement reached or government order relating to such
Hazardous Materials; and/or
iv. any violation of laws, orders, regulations,
requirements or demands of Governmental Authorities, which are
based upon or in any way related to such Hazardous Materials,
including, without limitation, attorney's and consultant's
fees, investigation and laboratory fees, court costs and
litigation expenses.
Notwithstanding any provision hereof, the Borrower does not indemnify
the Bank Indemnified Parties against any Environmental Losses (i) caused by any
Bank Indemnified Party, (ii) arising from the breach, violation or threatened
violation of any applicable Hazardous Materials Laws which first occurs after
the Bank takes actual possession of a Mortgaged Property pursuant to a
foreclosure of the Mortgage encumbering the same or pursuant to a transfer
pursuant to a power of sale or deed in lieu of foreclosure thereof; or (iii) any
release, discharge, disposal or presence of Hazardous Materials caused by a
receiver of a Mortgaged Property or which first occurs while a receiver is in
possession of such Mortgaged Property.
6.10. PERSONAL PROPERTY.
Except for the security interest granted by the Mortgage encumbering a
Mortgaged Property, the Borrower will be the sole owner of all Personal Property
and Fixtures incorporated into such Mortgaged Property, free from any adverse
lien, security interest, encumbrance or adverse claims thereon of any kind
whatsoever. The Borrower will notify the Bank of, and will defend such Personal
Property and Fixtures against, all claims and demands of all persons at any time
claiming the same or any interest therein. Such Personal Property and Fixtures
will not be used or bought for personal, family or household purposes. Such
Personal Property and Fixtures will be kept on or at such Mortgaged Property and
the Borrower will not remove such Personal Property or Fixtures from such
Mortgaged Property without the prior written consent of the Bank, except such
portions or items of such Personal Property or fixtures which are consumed or
worn out in ordinary usage, all of which shall be promptly replaced by the
Borrower. All covenants
and obligations of the Borrower contained herein and in the Loan Document shall
be deemed to apply to such Personal Property or Fixtures whether or not
expressly referred to herein or therein.
6.11. FINANCING STATEMENTS.
The Borrower hereby authorizes the Bank to execute one or more financing
statements and renewals and amendments thereof pursuant to the Uniform
Commercial Code of the State of Virginia and the state in which a Mortgaged
Property is located in form satisfactory to the Bank, and will pay the cost of
filing the same in all public offices wherever filing is deemed by the Bank to
be necessary or desirable.
6.12. ORGANIZATIONAL DOCUMENTS.
The Borrower shall provide to the Bank copies of any amendments or
modifications to, or replacements of, the Borrower's certificate or articles of
incorporation or by-laws. The Borrower shall cause to be provided to the Bank
copies of any amendments or modifications to, or replacements of, the
Guarantor's certificate or articles of incorporation or by-laws.
ARTICLE VII
BORROWER'S NEGATIVE COVENANTS
The Borrower covenants that until payment in full of Loan and
performance of all of the Borrower's other obligations under the Loan Documents:
7.01. PROHIBITION UPON TRANSFER, SECONDARY FINANCING.
The Borrower shall not convey, sell (other than pursuant to a Mortgaged
Property Sale Agreement), lease (other than pursuant to a Lease) or otherwise
dispose of all or any part of a Mortgaged Property or any interest therein
(legal or equitable), or grant any security interest with respect to such
Mortgaged Property without the prior written consent of the Bank, unless in
connection therewith the applicable Mortgage Release Price is paid to Bank.
7.02. EASEMENTS.
The Borrower will not enter into any easement affecting a Mortgaged Property
without first obtaining the Bank's written approval of such easement and the
terms and conditions thereof; provided, however, no such approval shall be
required if such easement is granted in the ordinary course of business and
provides reasonable benefit to such Mortgaged Property. The Borrower shall
provide to the Bank an executed copy of any easement entered into in respect of
a Mortgaged Property in respect of which an Advance has been made and remains
outstanding.
7.03. LEASE/MORTGAGED PROPERTY PURCHASE AGREEMENT.
The Borrower will not modify, amend, alter, terminate or cancel a Major Lease
for a Mortgaged Property, or assign, transfer, pledge or encumber any of its
right, title or interest thereunder, without the Bank's prior written consent or
payment of the Mortgage Release Price for such Mortgaged Property to the Bank.
The Bank shall not unreasonably withhold or delay its consent to a modification,
amendment or alteration to such a Major Lease. If the Borrower enters into a
Mortgaged Property Sale Agreement for a Mortgaged Property, the Borrower will
not assign, transfer, pledge or encumber any of its right, title or interest
thereunder, without the Bank's written consent, nor will the Borrower modify,
amend, alter, terminate or cancel such Mortgaged
Property Sale Agreement, without the Bank's prior written consent, which consent
shall not be unreasonably withheld or delayed; provided, however, the Borrower
may, without the prior written consent of the Bank, (a) amend such Mortgaged
Property Sale Agreement to extend the closing date thereunder so long as the
closing date thereunder is at least ten (10) days before the Maturity Date, and
(b) amend such Mortgaged Property Sale Agreement to adjust the purchase price
thereunder and provide for adjustments thereunder. The Borrower shall provide
notice to the Bank of the termination or cancellation of such a Mortgaged
Property Sale Agreement within two (2) business days after the effect thereof.
The Borrower shall provide to the Bank copies of any amendment or modification
to a Mortgaged Property Sale Agreement within two (2) business days after the
execution thereof.
7.04. MARGIN STOCK.
The Borrower shall not use or cause or permit any of the proceeds of the Loan
to be used, either directly or indirectly, for the purpose whether immediate,
incidental or remote of purchasing or carrying any margin stock within the
meaning of Regulation U or of extending credit to others for the purpose of
purchasing or carrying any margin stock, and the Borrower shall furnish to the
Bank, upon its request, a statement in conformity with the requirements of
Federal Reserve Board Form U-1 referred to in Regulation U. Further, no part of
the proceeds of the Loan will be used for any purpose that violates, or which is
inconsistent with, the provisions of Regulations G, T, U or X of the Board of
Governors of the Federal Reserve System.
7.05. CHANGE NAME AND PLACE OF BUSINESS.
The Borrower shall not change its corporate name or principal place of
business, except on not less than fifteen (15) days' prior written notice to the
Bank.
7.06. BENEFIT PLANS.
The Borrower shall not permit any condition to exist in connection with any
employee benefit plan which might constitute grounds for the PBGC to institute
proceedings to have the employee benefit plan terminated or a trustee appointed
to administer the employee benefit plan; or engage in, or permit to exist or
occur any other condition, event or transaction with respect to any employee
benefit plan which could result in the Borrower incurring any material
liability, fine or penalty.
7.07. RESTRICTIVE AGREEMENTS.
For a period of one (1) year from the date hereof, the Borrower shall not
acquire nursing homes, congregate care or assisted living facilities or any
non-medical real estate assets or acquire any undeveloped real estate which
Borrower does not intend to construct a Project thereon or a portion thereof
(collectively, the "Restricted Assets"). Thereafter, Borrower may acquire such
Restricted Assets so long as Borrower delivers to Bank copies of resolutions of
its board of directors authorizing such acquisitions and the value of such
Restricted Assets does not exceed Ten Percent (10%) of the value of all
Projects.
7.08. INDEBTEDNESS.
Other than the Loan, Borrower and Guarantor will not incur recourse
indebtedness in excess of Twenty Million Dollars ($20,000,000).
7.09. VARIABLE RATE INDEBTEDNESS.
Other than the Loan and construction loans for Projects, Borrower and
Guarantor will not incur unprotected variable rate indebtedness in excess of Ten
Million Dollars ($10,000,000).
7.10. MORTGAGED PROPERTY DEBT SERVICE COVERAGE RATIO.
Borrower shall maintain a Mortgaged Properties Debt Service Coverage Ratio of
not less than 1.40 to 1.00.
ARTICLE VIII
DEFAULTS
8.01. EVENTS OF DEFAULT.
The Borrower agrees each of the following described events shall constitute
an "Event of Default" hereunder:
a. THE BORROWER SHALL FAIL TO MAKE ANY PAYMENT UNDER THE
NOTE WITHIN TEN (10) DAYS AFTER THE DATE THE SAME IS DUE AND PAYABLE;
OR
b. ANY REPRESENTATION OR WARRANTY MADE BY THE BORROWER
HEREIN, IN ANY OTHER LOAN DOCUMENT OR IN ANY CERTIFICATE, FINANCIAL
STATEMENT OR OTHER DOCUMENT FURNISHED BY THE BORROWER PURSUANT TO THE
PROVISIONS HEREOF, SHALL PROVE TO HAVE BEEN MATERIALLY FALSE OR
MISLEADING AS OF THE TIME MADE OR FURNISHED, AND THE BORROWER DOES NOT,
WITHIN THIRTY (30) DAYS AFTER THE EARLIER OF RECEIVING WRITTEN NOTICE
FROM THE BANK OR THE BORROWER'S OWN DETERMINATION THAT SUCH
REPRESENTATION OR WARRANTY IS FALSE OR MISLEADING, COMMENCE AND
COMPLETE SUCH ACTIONS AS ARE NECESSARY TO MAKE SUCH WARRANTY OR
REPRESENTATION TRUE AND ACCURATE; PROVIDED, HOWEVER, THAT THE BORROWER
SHALL NOT BE ENTITLED TO THE FOREGOING CURE PERIOD IF, THE BORROWER HAD
ACTUAL KNOWLEDGE THAT SUCH REPRESENTATION OR WARRANTY WAS FALSE OR
MISLEADING WHEN MADE; OR
c. THE BORROWER SHALL DEFAULT IN THE PERFORMANCE OR
OBSERVANCE OF THE COVENANT CONTAINED IN ARTICLE VII HEREOF, AND SUCH
DEFAULT HAS NOT BEEN CURED OR CORRECTED WITHIN THIRTY (30) DAYS
FOLLOWING WRITTEN NOTICE FROM THE BANK TO THE BORROWER; PROVIDED,
HOWEVER, THAT IF SUCH DEFAULT IS OF SUCH A NATURE THAT IT CANNOT BE
CURED OR CORRECTED WITHIN SUCH THIRTY (30) DAY PERIOD, THE BORROWER
SHALL BE ENTITLED TO SUCH ADDITIONAL TIME AS MAY BE NECESSARY TO CURE
OR CORRECT SUCH DEFAULT IF THE BORROWER PROMPTLY COMMENCES SUCH CURE OR
CORRECTIVE ACTION AND DILIGENTLY PURSUES SUCH CURE OR CORRECTIVE ACTION
TO COMPLETION; OR
d. THE BORROWER SHALL DEFAULT IN THE PERFORMANCE OR
OBSERVANCE OF ANY OTHER COVENANT, CONDITION OR PROVISION HEREIN
CONTAINED INCLUDING THOSE SET FORTH IN THIS ARTICLE VIII FOR WHICH NO
SPECIFIC CURE PERIOD IS SET FORTH, AND SUCH DEFAULT HAS NOT BEEN CURED
OR CORRECTED WITHIN THIRTY (30) DAYS FOLLOWING WRITTEN NOTICE FROM THE
BANK TO THE BORROWER; PROVIDED, HOWEVER, THAT IF SUCH DEFAULT IS OF
SUCH A NATURE THAT IT CANNOT BE CURED OR CORRECTED WITHIN SUCH THIRTY
(30) DAY PERIOD, THE BORROWER SHALL BE ENTITLED TO SUCH ADDITIONAL TIME
AS MAY BE NECESSARY TO CURE OR CORRECT SUCH DEFAULT IF THE BORROWER
PROMPTLY COMMENCES SUCH CURE OR CORRECTIVE ACTION AND DILIGENTLY
PURSUES SUCH CURE OR CORRECTIVE ACTION TO COMPLETION; OR
e. THE BORROWER SHALL DEFAULT IN THE PERFORMANCE OR
OBSERVANCE OF ANY COVENANT, CONDITION OR PROVISION CONTAINED IN ANY
OTHER LOAN DOCUMENT TO WHICH THE BORROWER IS A PARTY, AND SUCH DEFAULT
SHALL CONTINUE UNCURED AFTER ANY APPLICABLE CURE OR GRACE PERIOD, OR IF
SUCH LOAN DOCUMENT DOES NOT CONTAIN AN APPLICABLE CURE PERIOD, SUCH
DEFAULT HAS NOT BEEN CURED OR CORRECTED WITHIN THIRTY (30) DAYS
FOLLOWING WRITTEN NOTICE FROM THE BANK TO THE BORROWER; PROVIDED,
HOWEVER, THAT IF SUCH DEFAULT IS OF SUCH A NATURE THAT IT CANNOT BE
CURED OR CORRECTED WITHIN SUCH THIRTY (30) DAY PERIOD, THE BORROWER
SHALL BE ENTITLED TO SUCH ADDITIONAL TIME AS MAY BE NECESSARY TO CURE
OR CORRECT SUCH DEFAULT IF THE BORROWER PROMPTLY COMMENCES SUCH CURE OR
CORRECTIVE ACTION AND DILIGENTLY PURSUES SUCH CURE OR CORRECTIVE ACTION
TO COMPLETION; OR
f. THE BORROWER SHALL NEGLECT, REFUSE OR FAIL TO KEEP IN
FULL FORCE AND EFFECT ANY PERMIT OR APPROVAL ISSUED BY ANY GOVERNMENTAL
AUTHORITY REQUIRED FOR THE OCCUPANCY OR USE OF A MORTGAGED PROPERTY AND
THE SAME IS NOT REINSTATED WITHIN THIRTY (30) DAYS AFTER THE BORROWER
RECEIVES NOTICE (FROM ANY SOURCE) THAT SUCH PERMIT OR APPROVAL IS NO
LONGER IN FULL FORCE AND EFFECT; OR
g. A MORTGAGED PROPERTY OR ANY PART THEREOF SHALL BE
CONDEMNED OR DAMAGED BY FIRE OR OTHER CASUALTY IN SUCH MANNER AS TO
PRECLUDE, IN THE BANK'S SOLE REASONABLE JUDGMENT, THE RESTORATION OF
THE IMPROVEMENTS FORMING A PART OF SUCH MORTGAGED PROPERTY AND THE
BORROWER FAILS TO SUBSTITUTE AN ALTERNATE MORTGAGED PROPERTY WITHIN
SIXTY (60) DAYS THEREOF OR FAILS TO DELIVER TO THE BANK THE MORTGAGE
RELEASE PRICE FOR SUCH MORTGAGED PROPERTY; OR
h. AN ACCURATE SURVEY OF A MORTGAGED PROPERTY AT ANY
TIME SHALL SHOW THAT ANY OF THE IMPROVEMENTS CONSTRUCTED THEREON
MATERIALLY ENCROACH UPON ANY STREET, EASEMENT, RIGHT OF WAY OR
ADJOINING PROPERTY OR VIOLATE ANY SET BACK REQUIREMENT, UNLESS SUCH
ENCROACHMENT OR VIOLATION IS SATISFACTORILY INSURED AGAINST UNDER THE
TITLE POLICY ISSUED IN RESPECT OF SUCH MORTGAGED PROPERTY OR WAS IN
EXISTENCE AT THE TIME THE BANK APPROVES THE PROJECT AS MORTGAGED
PROPERTY AND SHOWN ON THE SURVEY PROVIDED TO THE BANK, OR THAT ANY
ADJOINING STRUCTURE MATERIALLY ENCROACHES ON A MORTGAGED PROPERTY,
UNLESS SUCH ENCROACHMENT IS CURED WITHIN SIXTY (60) DAYS FOLLOWING
RECEIPT OF NOTICE THEREOF BY THE BORROWER; OR
i. THE OCCURRENCE OF A MATERIAL ADVERSE EFFECT; OR
j. A WRIT OF EXECUTION OR ATTACHMENT OR ANY SIMILAR
PROCESS SHALL BE ISSUED OR LEVIED AGAINST ALL OR ANY PART OF OR
INTEREST IN A MORTGAGED PROPERTY, OR ANY JUDGMENT INVOLVING MONETARY
DAMAGES SHALL BE ENTERED AGAINST THE BORROWER WHICH SHALL BECOME A LIEN
ON A MORTGAGED PROPERTY OR ANY PORTION THEREOF OR INTEREST THEREIN AND
SUCH EXECUTION, ATTACHMENT OR SIMILAR PROCESS OR JUDGMENT IS NOT
RELEASED, BONDED, SATISFIED, VACATED OR STAYED WITHIN SIXTY (60) DAYS
AFTER ITS ENTRY OR LEVY; OR
k. THE BORROWER OR THE GUARANTOR SHALL FILE A VOLUNTARY
PETITION IN BANKRUPTCY OR SHALL FILE ANY PETITION OR ANSWER SEEKING OR
ACQUIESCING IN ANY REORGANIZATION, ARRANGEMENT, COMPOSITION,
READJUSTMENT, LIQUIDATION, DISSOLUTION OR SIMILAR RELIEF FOR ITSELF
UNDER ANY PRESENT OR FUTURE FEDERAL, STATE OR OTHER STATUTE, LAW OR
REGULATION RELATING TO BANKRUPTCY, INSOLVENCY OR OTHER RELIEF FOR
DEBTORS; OR SHALL SEEK OR CONSENT TO OR ACQUIESCE IN THE APPOINTMENT OF
ANY TRUSTEE, RECEIVER,
LIQUIDATOR, ASSIGNEE, CUSTODIAN, SEQUESTRATOR (OR OTHER SIMILAR
OFFICIAL) OF THE BORROWER OR THE GUARANTOR, OR OF ALL OR ANY PART OF A
MORTGAGED PROPERTY, OR OF ANY OR ALL OF THE ROYALTIES, REVENUES, RENTS,
ISSUES OR PROFITS THEREOF, OR SHALL MAKE ANY GENERAL ASSIGNMENT FOR THE
BENEFIT OF CREDITORS, OR SHALL ADMIT IN WRITING ITS INABILITY TO PAY
ITS DEBTS, AS THE CASE MAY BE, GENERALLY AS THEY BECOME DUE, OR SHALL
BECOME INSOLVENT OR UNABLE TO PAY ITS DEBTS AS THEY MATURE, OR SHALL
MAKE A GENERAL ASSIGNMENT FOR THE BENEFIT OF CREDITORS, OR SHALL
VOLUNTARILY SUSPEND TRANSACTION OF ITS BUSINESS OR TAKE ANY CORPORATE
ACTION IN FURTHERANCE OF THE FOREGOING; OR
l. A COURT OF COMPETENT JURISDICTION SHALL ENTER AN
ORDER, JUDGMENT OR DECREE ADJUDICATING THE BORROWER OR THE GUARANTOR AS
BANKRUPT OR INSOLVENT OR APPROVING A PETITION FILED AGAINST THE
BORROWER OR THE GUARANTOR SEEKING ANY REORGANIZATION, DISSOLUTION OR
SIMILAR RELIEF UNDER ANY PRESENT OR FUTURE FEDERAL, STATE OR OTHER
STATUTE, LAW OR REGULATION RELATING TO BANKRUPTCY, INSOLVENCY, OR OTHER
RELIEF FOR DEBTORS, AND SUCH ORDER, JUDGMENT OR DECREE SHALL REMAIN
UNVACATED AND UNSTAYED FOR AN AGGREGATE OF SIXTY (60) DAYS (WHETHER OR
NOT CONSECUTIVE) FROM THE FIRST DATE OF ENTRY THEREOF; OR ANY TRUSTEE,
RECEIVER OR LIQUIDATOR OF THE BORROWER OR THE GUARANTOR OR OF ALL OR
ANY PART OF A MORTGAGED PROPERTY, OR OF ANY OR ALL OF THE ROYALTIES,
REVENUES, RENTS, ISSUES OR PROFITS THEREOF, SHALL BE APPOINTED WITHOUT
THE CONSENT OR ACQUIESCENCE OF THE BORROWER OR THE GUARANTOR, AS THE
CASE MAY BE, AND SUCH APPOINTMENT SHALL REMAIN UNVACATED AND UNSTAYED
FOR AN AGGREGATE PERIOD OF SIXTY (60) DAYS (WHETHER OR NOT
CONSECUTIVE); OR
m. THE BORROWER HAS BREACHED OR DEFAULTED UNDER THE
LEASE FOR A MORTGAGED PROPERTY, AND SUCH BREACH OR DEFAULT HAS NOT BEEN
CURED OR CORRECTED WITHIN ANY APPLICABLE CURE PERIOD PROVIDED UNDER
SUCH LEASE; OR
n. GUARANTOR SELLS, ASSIGNS, HYPOTHECATES, PLEDGES OR
OTHERWISE TRANSFERS ITS INTEREST AS A PARTNER OF THE BORROWER.
o. THE LEVERAGE RATIO EXCEEDS FIFTY-FIVE PERCENT (55%)
AND THE SAME IS NOT CURED WITHIN NINETY DAYS AFTER WRITTEN NOTICE FROM
BANK TO BORROWER.
p. THE MINIMUM TANGIBLE WORTH OF GUARANTOR IS LESS THAN
SIXTY MILLION DOLLARS ($60,000,000) PLUS ONE HUNDRED PERCENT (100%) OF
ADDITIONAL NET PROCEEDS OF FUTURE STOCK SALES (EXCLUSIVE OF
DEPRECIATION DETERMINED IN ACCORDANCE WITH GAAP).
q. GUARANTOR'S DIVIDENDS EXCEED ONE HUNDRED PERCENT
(100%) OF ITS FUNDS FROM OPERATIONS AS DETERMINED IN ACCORDANCE WITH
GAAP IN ANY FISCAL YEAR.
r. THE AGGREGATE OCCUPANCY OF THE MORTGAGED PROPERTIES
IS LESS THAN EIGHTY-FIVE PERCENT (85%).
s. THE DEBT SERVICE COVERAGE RATIO IS LESS THAN 2.0 TO
1.0.
t. THERE OCCURS A REPORTABLE EVENT OR A PROHIBITED
TRANSACTION UNDER, OR ANY COMPLETE OR PARTIAL WITHDRAWAL FROM, OR ANY
OTHER EVENT WHICH WOULD CONSTITUTE GROUNDS FOR TERMINATION OF OR THE
APPOINTMENT OF A TRUSTEE TO ADMINISTER, ANY "PLAN" MAINTAINED BY THE
BORROWER OR ANY ERISA AFFILIATE FOR THE BENEFIT OF ITS
"EMPLOYEES" (AS SUCH TERMS ARE DEFINED IN ERISA) WHICH COULD HAVE A
MATERIAL ADVERSE EFFECT.
If any Event of Default described in 8.01(l) or (m) occurs the Bank
shall be under no further obligation to make any Advances and the Loan and all
interest accrued thereon and any penalty or premium thereunder and all other
liabilities of the Borrower hereunder, thereunder and under the other Loan
Documents shall thereupon become and be immediately due and payable without any
election or action on the part of the Bank, and without presentment, demand,
protest, or notice of any kind, all of which are hereby expressly waived, and if
any other Event of Default described in Section 8.01 occurs and is not cured as
set forth herein, the Bank may terminate its commitment to make Advances
hereunder and declare the Loan and all interest accrued thereon and any penalty
or premium thereunder pursuant to Section 2.08 hereof and all other liabilities
of the Borrower hereunder, thereunder and under the other Loan Documents to be
due and payable, whereupon the same shall become and be immediately due and
payable without presentment, demand, protest or notice of any kind, all of which
are hereby expressly waived.
8.02. SPECIAL REMEDIES.
If an Event of Default shall exist, the Bank shall have the right, in
addition to any rights or remedies available to it under the Loan Documents or
otherwise available to it at law or in equity, to enter upon and take possession
of the Mortgaged Properties in respect of which Advances have been made and are
then outstanding. For purposes of this Section 8.03, the Borrower agrees that
the Bank shall have the right, and hereby irrevocably constitutes and appoints
the Bank its true and lawful attorney-in-fact, coupled with an interest, with
full power of substitution, to (i) prosecute and defend all actions or
proceedings in connection with the Mortgaged Properties and to take such action
and require such performance as the Bank deems necessary in connection
therewith; and (ii) generally do any and every act with respect to the occupancy
and use of such Mortgaged Properties as the Borrower may do in its own behalf.
Should the unadvanced portion of the Loan be insufficient to pay the sums
expended or incurred by the Bank for any of the foregoing purposes, the amount
of the deficiency shall be added to the indebtedness evidenced by the Note and
in all events shall be secured by the lien of the Loan Documents and shall be
paid by the Borrower to the Bank on demand with interest thereon at the
respective Default Rates until paid.
ARTICLE IX
MISCELLANEOUS
9.01. NO IMPLIED WAIVER; CUMULATIVE REMEDIES; WRITING
REQUIRED.
No delay or failure of the Bank in exercising any right, power or privilege
hereunder (or under any Loan Document) shall affect such right, power or
privilege, nor shall any single or partial exercise thereof or any abandonment
or discontinuance of steps to enforce such a right, power or privilege preclude
any further exercise thereof or of any other right, power or privilege. The
rights and remedies of the Bank hereunder and under the other Loan Documents are
cumulative and not exclusive of any rights or remedies which it would otherwise
have. Any waiver, permit, consent or approval of any kind or character on the
part of the Bank of any breach or default under this Agreement or any other Loan
Document, or any waiver by the Bank of any provision or condition of this
Agreement or any other Loan Document, must be in writing and shall be effective
only to the extent as may be specifically set forth in such writing.
9.02. TAXES.
The Borrower shall pay any and all stamp, document, mortgage, intangibles,
transfer and recording taxes, fees (including notary fees and mortgage/deed of
trust release fees) and similar impositions payable or hereafter determined to
be payable in connection with the execution, delivery and/or recording and
release of the Loan Documents, and the Borrower agrees to save the Bank harmless
from and against any and all present or future claims or liabilities with
respect to, or resulting from, any delay in paying or omitting to pay any such
taxes, fees or similar impositions.
9.03. MODIFICATIONS AND AMENDMENTS.
Upon execution thereof, each Mortgaged Property Project Agreement shall
automatically be deemed to be an amendment of this Agreement, which amendment
shall apply, however, only to the Mortgaged Property which is the subject of
such Project Agreement.
9.04. HOLIDAYS.
Except as otherwise provided herein, whenever any payment or action to be
made or taken under any of the Loan Documents shall be stated to be due or to be
performed on a day which is not a business day, such payment or action shall be
made or taken on the next-following business day and such extension of time
shall be included in computing interest or fees, if any, in connection with such
payment or action.
9.05. NOTICES.
All notices, statements, requests and demands given to or made upon either
party hereto in accordance with the provisions of this Agreement shall be deemed
to have been given or made one (1) day after the same are deposited with a
nationally recognized overnight delivery service, or immediately upon receipt,
if delivered by courier, addressed as follows:
If to the Bank: The Huntington National Bank
000 Xxxxx Xxxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxxxxxx, XX 00000
Attention: Xxxxxxxxxx X. XxXxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
With a copy to: Xxxxxx & Xxxxxxxxx
00 Xxxxx Xxxxxxxx Xxxxxx
Xxxxxxxxxxxx, Xxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
If to the Borrower: Windrose Medical Properties, L.P.
0000 Xxxxxxxx Xxxxx, Xxxxx 000
Xxxxxxxxxxxx, Xxxxxxx 00000
Attention: Xxxxxxxxx X. Xxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
With a copy to: Xxxxxx X. Xxxxxx
Secretary and General Counsel
0000 Xxxxxxxxx Xxxxxx Xxxxx
Xxxxx 000
Xxxxxxxxx, Xxxxxxxxx 00000
000-000-0000
000-000-0000
or in accordance with the latest unrevoked written direction from
either party to the other party hereto. Failure of Bank to furnish the
Borrower's attorney with a copy of any notice provided to the Borrower hereunder
shall not be deemed a failure of the Bank to provide the Borrower with such
notice and shall not affect, or in any way prevent or estop the Bank from
exercising, any right or remedy of the Bank hereunder or under any of the other
Loan Documents.
9.06. REIMBURSEMENT FOR CERTAIN EXPENSES.
All reasonable costs incidental to the Loan and all Advances thereof,
including, but not limited to, title insurance premiums, survey charges,
appraisal fees, insurance premiums, inspecting engineers' and/or architects'
fees, attorneys' costs and fees and any and all other incidental expenses of the
Bank, shall be paid by the Borrower. All such fees and expenses shall be paid
upon the receipt of a statement therefor.
9.07. NO THIRD PARTY RIGHTS.
Nothing in this Agreement, whether express or implied, shall be construed to
give to any person other than the parties hereto any legal or equitable right,
remedy or claim under or in respect of this Agreement or any other Loan
Document, which is intended for the sole and exclusive benefit of the parties
hereto and thereto.
9.08. INTEREST LIMITATION.
Notwithstanding anything to the contrary contained herein or in any of the
other Loan Documents, the obligations of the Borrower to the Bank under this
Agreement and any other Loan Documents are subject to the limitation that
payments of interest to the Bank shall not be required to the extent that
receipt by the Bank of any such payment by the Borrower would be contrary to
provisions of governmental requirements applicable to the Bank which limit the
maximum rate of interest which may be charged or collected by the Bank.
9.09. SEVERABILITY.
The provisions of this Agreement are intended to be severable. If any
provision of this Agreement shall be held invalid or unenforceable in whole or
in part in any jurisdiction, such provision shall, as to such jurisdiction, be
ineffective to the extent of such invalidity or
unenforceability without in any manner affecting the validity or enforceability
thereof in any other jurisdiction or the remaining provisions hereof in any
jurisdiction.
9.10. GOVERNING LAW.
THE BORROWER AGREES WITH BANK THAT, EXCEPT AS EXPRESSLY SET FORTH IN THE
MORTGAGES AND THE ASSIGNMENTS OF RENTS AND ANY OTHER LOAN DOCUMENTS, THE LAW OF
THE STATE OF INDIANA SHALL GOVERN ALL MATTERS RELATING TO THIS AGREEMENT AND THE
OTHER LOAN DOCUMENTS AND ALL OF THE INDEBTEDNESS OR OBLIGATIONS OF THE BORROWER
ARISING HEREUNDER OR THEREUNDER. THE BORROWER (a) SHALL BE SUBJECT TO PERSONAL
JURISDICTION IN THE STATE OF INDIANA AND THE FEDERAL COURTS OF THE UNITED STATES
OF AMERICA LOCATED IN STATE OF INDIANA (AND ANY APPELLATE COURTS TAKING APPEALS
THEREFROM) FOR THE ENFORCEMENT OF THE BORROWER'S OBLIGATIONS HEREUNDER AND UNDER
THE OTHER LOAN DOCUMENTS AND (b) WAIVES ANY AND ALL PERSONAL RIGHTS UNDER THE
LAW OF ANY OTHER STATE TO OBJECT TO JURISDICTION WITHIN INDIANA FOR THE PURPOSES
OF SUCH ACTION, SUIT, PROCEEDING OR LITIGATION TO ENFORCE SUCH OBLIGATIONS OF
THE BORROWER. THE BORROWER WAIVES AND AGREES NOT TO ASSERT, AS A DEFENSE IN ANY
ACTION, SUIT OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE
OTHER LOAN DOCUMENTS (x) THAT IT IS NOT SUBJECT TO SUCH JURISDICTION OR THAT
SUCH ACTION, SUIT OR PROCEEDING MAY NOT BE BROUGHT OR IS NOT MAINTAINABLE IN
THOSE COURTS OR THAT THIS AGREEMENT AND SUCH OTHER LOAN DOCUMENTS MAY NOT BE
ENFORCED IN OR BY THOSE COURTS OR THAT IT IS EXEMPT OR IMMUNE FROM EXECUTION,
(y) THAT THE ACTION, SUIT OR PROCEEDING IS BROUGHT IN AN INCONVENIENT FORUM, OR
(z) THAT THE VENUE OF THE ACTION, SUIT OR PROCEEDING IS IMPROPER. NOTHING IN
THIS SECTION 9.10 SHALL BE DEEMED TO PRECLUDE BANK FROM FILING ANY ACTION, SUIT
OR PROCEEDING IN RESPECT OF THIS AGREEMENT OR SUCH OTHER LOAN DOCUMENTS IN THE
STATE IN WHICH THE BORROWER HAS ITS CHIEF EXECUTIVE OFFICE OR THE FEDERAL COURTS
OF THE UNITED STATES OF AMERICA LOCATED IN THE STATE IN WHICH THE BORROWER HAS
ITS CHIEF EXECUTIVE OFFICE, OR, WITH RESPECT TO A SPECIFIC ADVANCE, THE STATE IN
WHICH A MORTGAGED PROPERTY IS LOCATED OR THE FEDERAL COURTS OF THE UNITED STATES
OF AMERICA LOCATED IN THE STATE IN WHICH A MORTGAGED PROPERTY IS LOCATED.
9.11. CERTAIN FEES.
No broker's or finder's fee or commission will be payable with respect to the
Loan, this Agreement, or the other Loan Documents, or any of the transactions
contemplated hereby, and the Borrower hereby indemnifies the Bank against, and
agrees that it will hold the Bank harmless from, any claim, demand, or liability
for any such broker's or finder's fee or commission alleged to have been
incurred in connection herewith or therewith and any expenses (including
reasonable fees, expenses, and disbursements of counsel) arising in connection
with any such claim, demand, or liability.
9.12. SURVIVAL.
All representations, warranties, covenants, agreements and obligations of the
Borrower contained in this Agreement, as amended or supplemented from time to
time, shall survive the
making of Advances and shall continue in full force and effect so long as the
Loan is outstanding and until payment and performance in full of all of the
Borrower's obligation thereunder and under the Loan Documents.
9.13. COUNTERPARTS.
This Agreement may be executed in any number of counterparts and by the
different parties hereto on separate counterparts, each of which, when so
executed and delivered by the parties, shall constitute an original but all such
counterparts together constituting but one and the same instrument.
9.14. SUCCESSORS AND ASSIGNS.
This Agreement shall be binding upon and shall inure to the benefit of the
Bank, the Borrower and their respective successors and assigns, except that the
Borrower may not assign or transfer its rights and obligations hereunder or any
interest herein without the prior written consent of the Bank.
9.15. TIME OF ESSENCE.
Time is of the essence under the Loan Documents.
9.16. NO JOINT VENTURE.
Notwithstanding anything to the contrary herein contained or implied, the
Bank, by this Agreement, or by any action pursuant hereto, shall not be deemed
to be a partner of, or a joint venturer with, the Borrower, and the Borrower
hereby indemnifies and agrees to defend and hold the Bank harmless, including
the payment of reasonable attorneys' fees, from any loss resulting from any
judicial construction of the parties' relationship as such.
9.17. BANK NOT IN CONTROL.
None of the covenants or other provisions contained in the Loan Documents
shall, or shall be deemed to, give the Bank the rights or power to exercise
control over the affairs and/or management of the Borrower, the power of the
Bank being limited to the right to exercise the rights and remedies provided to
it in the Loan Documents.
9.18. SYNDICATION.
Bank reserves the right to assign and transfer portions of the Loan, this
Agreement and any of its rights and security hereunder and under the Loan
Documents to other financial institutions. In the event of such transfer, Bank
and Borrower agree to incorporate within this Agreement provisions substantially
similar to those attached hereto as Exhibit L.
9.19. WAIVER OF JURY TRIAL.
The Borrower and the Bank, after consulting or having had the opportunity to
consult with counsel, knowingly, voluntarily and intentionally waives any right
they may have to a trial by jury in any litigation based upon or arising out of
the Loan, this Agreement or any other Loan Document or any of the transactions
contemplated hereby or by any other Loan Document or any course of conduct,
dealing, statements, whether oral or written, or actions of the Borrower or the
Bank. Neither the Borrower nor the Bank shall seek to consolidate, by
counterclaim or otherwise, any action in which a jury trial has been waived with
any other action in which a jury trial cannot be or has not been waived. These
provisions shall not be deemed to have been modified in any respect or
relinquished by the Bank or the Borrower except by written instrument executed
by both the Borrower and the Bank.
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement as of the day and year first above written.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
"BORROWER"
WINDROSE MEDICAL PROPERTIES, L.P., a Virginia
limited partnership
By: Windrose Medical Properties Trust, a Maryland real
estate investment trust, its general partner
By: /s/ Xxxxxxxxx X. Xxxxxx
---------------------------------
Xxxxxxxxx X. Xxxxxx, President
"BANK"
THE HUNTINGTON NATIONAL BANK, a national
banking association
By: /s/ Xxxxxxxxxx X. XxXxxxxx
--------------------------------------
Xxxxxxxxxx X. XxXxxxxx, Vice President
