1
EXHIBIT 10.48
LOAN AGREEMENT
THIS AGREEMENT is made this 1st day of June, 1999, between
RAMCO-XXXXXXXXXX PROPERTIES, L.P., a Delaware limited partnership, whose address
is 00000 Xxxxxxxxxxxx Xxxxxxx, Xxxxx 000, Xxxxxxxxxx, Xxxxxxxx 00000
("Borrower"), and BANK ONE, MICHIGAN, a Michigan banking corporation, whose
address is 000 Xxxxxxxx Xxxxxx, Xxxx Xxxxx XX0-0000, Xxxxxxx, Xxxxxxxx 00000
("Lender").
Following is a recital of the facts underlying this Agreement:
The purpose of this facility is to provide partial construction
financing for a shopping center development on certain real estate located in
Oakland County, Michigan ("Site") which Site is described in Exhibit A attached
and is sometimes called "Premises" or "Project."
Borrower has applied to Lender for a loan for the purpose of providing
funds for the acquisition and construction described above. Lender desires to
make the loan to Borrower, and Borrower desires to borrow the money from Lender,
upon the terms and conditions set forth in this Agreement.
In consideration of the covenants and agreements of the parties,
Borrower and Lender agree:
DEFINITIONS 1. As used in this
Agreement, the
following terms shall
have the following
meanings:
1.1 "Appraisal" shall mean an Appraisal of the Project prepared by
an appraiser approved by Lender in form and substance
acceptable to Lender.
1.2 "Appraised Value" shall mean the value of the Project as
determined by Lender, in its discretion, based upon the
Appraisal.
1.3 "Assignment of Leases" shall mean the Assignment of Leases
executed by Borrower and delivered to Lender on even date, as
it may be amended, restated or replaced from time to time.
1.4 "Base LIBOR Rate" shall mean, with respect to a LIBOR
Borrowing for a LIBOR Interest Period, the rate at which
deposits in U.S. Dollars are offered to Lender by first-class
banks in the London interbank market at approximately 11:00
a.m. (London time) two (2) Business Days prior to the first
day of such LIBOR Interest Period, with a maturity
approximately equal to such LIBOR Interest Period and in an
amount approximately equal to the amount of such LIBOR
Borrowing.
1.5 Each "Basis Point" shall mean one one-hundredth of one
(1/100%) percent per annum.
1.6 "Borrowing" or "Loan Advance" shall mean an advance of all or
any portion of the Loan.
1.7 "Borrowing and Rate Selection Notice" shall mean a written,
telex or telephonic notice by Borrower to Lender specifying:
(1) that Borrower wishes to make a Borrowing;
(2) the amount thereof and the rate option or options
applicable to the whole or designated portions;
(3) the Effective Date of the selection of the Rate; and
(4) the Interest Period applicable to each Borrowing.
2
1.8 "Business Day" shall mean with respect to borrowing, payment
or rate selection of LIBOR Borrowings, a day on which banks,
generally, are open for business in Detroit and on which
dealings in U.S. Dollars are carried on in the London
interbank market.
1.9 "Completion Date" shall mean the Maturity Date of the
Construction Note.
1.10 "Construction Loan" shall mean the loan evidenced by the
Construction Note.
1.11 "Construction Note" shall mean the Construction Note in the
original principal amount of Eighteen Million Five Hundred
Thousand ($18,500,000.00) Dollars, executed by Borrower and
delivered to Lender on even date, as it may be amended,
restated or replaced from time to time.
1.12 "Conversion Date" shall mean the earlier of (i) the date of
the final advance, or (ii) the Maturity Date of the
Construction Note.
1.13 "Cost Budget" shall mean a budget attached as Exhibit B, which
Borrower certifies as true and correct for the development and
construction costs for the Project.
1.14 "Debt Service Coverage Ratio" shall mean Net Operating Income
divided by principal and interest debt service.
1.15 "Effective Date" shall mean any future Business Day designated
by Borrower in a Borrowing and Rate Selection Notice or in a
Prepayment Notice as the date such borrowing and rate
selection or such prepayment shall become effective.
1.16 "Effective Rate" shall mean the Prime Rate.
1.17 "Fixed Rate" shall mean a fixed rate of interest negotiated by
the parties for the Term Note.
1.18 "Guarantor" shall mean Ramco-Xxxxxxxxxx Properties Trust.
1.19 "Guaranty" shall mean the Guaranty executed by Guarantor and
delivered to Lender on even date, as it may be amended,
restated or replaced from time-to-time.
1.20 "Improvements" shall mean the Site development and the
construction of the shopping center and related amenities and
improvements in accordance with the Plans and Specifications.
1.21 "Interest Period" shall mean a LIBOR Interest Period.
1.22 "LIBOR Borrowing" shall mean that portion of any Borrowing at
the time a LIBOR Rate is applicable, under Section 2.5.
1.23 "LIBOR Interest Period" shall mean, with respect to a LIBOR
Borrowing, a period of thirty (30), sixty (60), ninety (90),
or one-hundred eighty (180) days, to the extent LIBOR
Borrowings of such or similar periods are available,
commencing on a Business Day and selected by Borrower in its
Borrowing and Rate Selection Notice. If any LIBOR Interest
Period would otherwise end on a day which is not a Business
Day, such LIBOR Interest Period shall end on the next
succeeding Business Day.
1.24 "LIBOR Rate" shall mean, with respect to a LIBOR Borrowing and
a LIBOR Interest Period, the sum of:
(1) the quotient of:
(a) the Base LIBOR Rate applicable to that LIBOR
Interest Period, divided by
3
(b) one (1) minus the Reserve Requirement (expressed
as a decimal) applicable to that LIBOR Interest
Period; plus
(2) Two hundred fifty (250) Basis Points per annum. When the
budget becomes In Balance, this shall reduce to two
hundred (200) Basis Points per annum. For purposes of
this provision and Section 8.10, "In Balance" means that
Borrower shall have contributed thirty (30%) percent of
the total project costs as equity. The total project
costs as now set forth on the Cost Budget is Twenty-Six
Thousand Eight Hundred Ninety-Three Thousand Eight
Hundred Sixty-Seven ($26,893,867.00) Dollars.
The LIBOR Rate shall be rounded, if necessary, to the next
higher one one-hundredth of one (1/100%) percent.
1.25 "Loan" shall mean the facility provided for under this Loan
Agreement and evidenced by the Note (the Construction Loan and
Term Loan).
1.26 "Loan Amount" shall mean Eighteen Million Five Hundred
Thousand ($18,500,000.00) Dollars.
1.27 "Loan Documents" shall mean this Loan Agreement, the
Construction Note, the Term Note, the Mortgage, the Assignment
of Leases, the Security Agreement, and all accompanying
financing statements, and the Guaranty, as these documents may
be amended, restated or replaced from time to time, together
with each and every other document now or hereafter
evidencing, securing or executed in conjunction with the Loan.
1.28 "Maturity Date" shall mean eighteen (18) months from the date
of this Agreement for the Construction Note, and if the
Construction Note is converted to a Term Note in accordance
with this Agreement, the Maturity Date for the Term Note shall
mean twenty-four (24) months from the Conversion Date.
1.29 "Minimum Notice Period" shall mean receipt of notice no later
than:
(1) 11:00 a.m. (Detroit time) on the Effective Date of a
Prime Rate Borrowing or a rate selection relating
thereto; and
(2) 11:00 a.m. (Detroit time) four (4) Business Days before
the Effective Date of a LIBOR Rate Borrowing and the rate
selection relating thereto.
1.30 "Mortgage" shall mean the Mortgage executed by Borrower and
delivered to Lender on even date, as it may be amended,
restated or replaced from time to time.
1.31 "Net Operating Income" shall mean gross receipts and all other
income, less Operating Expenses.
1.32 "Note" shall mean the Construction Note and/or the Term Note,
as the context requires.
1.33 "Operating Expenses" shall mean expenditures of all kinds made
with respect to operation of the Premises in the normal course
of business, including but not limited to, expenditures for
taxes, insurance, repairs, replacements, maintenance,
management fees, advertising expenses, salaries and wages, and
utility payments and amounts equal to Seven ($0.07) Cents per
square foot for capital reserves, but expressly exclusive of
(i) any debt service on the Loan, (ii) depreciation,
amortization and other non-cash expenditures, and (iii)
capital expenditures.
1.34 "Phase I Environmental Report" shall mean a Phase I
Environmental Site Assessment Report, in form and substance
satisfactory to Lender.
1.35 "Plans and Specifications" shall mean the plans and
specifications pertaining to the construction of the
Improvements identified on Exhibit C, as they may be amended
in accordance with the terms of this Loan Agreement.
4
1.36 "Premises" shall mean the Site.
1.37 "Prepayment Notice" shall mean a written, telex or telephonic
notice by Borrower to Lender in accordance with Section 2.9,
specifying the amount of principal to be prepaid and the
Effective Date of such prepayment.
1.38 "Prime Rate" shall mean a rate of interest per annum equal to
the prime rate of interest as publicly announced by Lender
from time to time, adjusting and changing when and as the
prime rate changes, which rate may not be the lowest rate
charged by Lender.
1.39 "Prime Rate Borrowing" shall mean that portion of the Loan
outstanding at any time that the Effective Rate is applicable.
1.40 "Project" shall mean the Site and all Improvements constructed
or to be constructed thereon.
1.41 "Regulation D" shall mean Regulation D of the Board of
Governors of the Federal Reserve System from time to time in
effect and shall include any successor or other regulation or
official interpretation of said Board of Governors relating to
reserve requirements applicable to member banks of the Federal
Reserve System.
1.42 "Reserve Requirement" shall mean, with respect to a LIBOR
Interest Period, the daily average during such LIBOR Interest
Period of the aggregate reserve requirement (including all
basic, supplemental, marginal and other reserves and taking
into account any transitional adjustments or other scheduled
changes in reserve requirements during such LIBOR Interest
Period) which may be imposed on Lender under Regulation D in
respect of "Eurocurrency liabilities" (or in respect of any
other category of liabilities which consist of or include
deposits by reference to which the interest rate on LIBOR
loans is determined or any category of extensions of credit or
other assets which consists of or includes loans by any
non-United States office of Lender to United States
residents).
1.43 "Security Agreement" shall mean the Security Agreement
executed by Borrower and delivered to Lender on even date, as
it may be amended, restated or replaced from time to time.
1.44 "Site" shall mean the real property upon which the
Improvements shall be constructed, as more particularly
described in Exhibit A.
1.45 "Survey" shall mean an ALTA/ACSM mortgage survey otherwise
conforming to requirements set forth in Section 4.2(2)(l).
1.46 "Term Loan" shall mean the loan evidenced by the Term Note.
1.47 "Term Note" shall mean the promissory note to be executed by
Borrower and delivered to Lender in the form attached as
Exhibit D-1 or D-2 if the requirements for conversion under
Section 13 of this Agreement have been satisfied.
5
COMMITMENT TO LEND,
BORROWINGS AND
CONDITIONS OF LENDING 2.
2.1 Agreement to Lend. Lender agrees, subject to the terms and
conditions set forth in this Agreement, to advance to Borrower, from time to
time, from and after the effective date of this Agreement, sums not to exceed,
in the aggregate at any one time outstanding, the Loan Amount. The sums shall be
repaid, together with interest and certain costs and charges which may be
incurred by Lender, all as set forth in the Note.
2.2 The Note and Other Loan Documents. All Borrowings under this
Agreement shall be evidenced by, secured, and repaid pursuant to the Note and by
the other Loan Documents, which shall be executed and delivered by Borrower
simultaneously upon the execution of this Agreement (except the Term Note which
shall be executed and delivered under the terms of this Loan Agreement).
2.3 Limitation on Borrowings. Anything herein to the contrary
notwithstanding, Loan Advances shall be limited to the amounts as Borrower is
eligible to receive under and upon compliance with, the conditions of Section 4.
2.4 Rate. The outstanding principal balance due under the Construction
Note shall bear interest at the Effective Rate, unless the LIBOR Rate is
selected by Borrower as provided in Section 2.5. The outstanding principal
balance due under the Term Note shall bear interest at the Prime Rate unless a
Fixed Rate or the LIBOR Rate is selected by Borrower.
2.5 Selection of LIBOR Rate. Subject to the terms and conditions of
this Agreement, with respect to the Construction Note, Borrower may elect once
per month, which shall be at the time when the monthly advance is made if an
advance is made during such month, to have interest accrue and be payable at the
LIBOR Rate and for a LIBOR Interest Period selected by Borrower as provided in
this Agreement for any new Borrowing or any Borrowing made upon expiration of
the Interest Period by giving Lender a Borrowing and Rate Selection Notice of
not less than the applicable Minimum Notice Period. Borrower may request Lender
to provide a LIBOR Rate quote, but the quotation shall only remain available for
a period of thirty (30) minutes. The unpaid principal amount of each LIBOR
Borrowing shall bear interest from and including the first day of the applicable
Interest Period, but not including, the last day of such Interest Period at the
rate of interest applicable to the Borrowing. During the Interest Period, the
rate of interest applicable to the Borrowing shall not be changed. If, at the
end of an Interest Period for an outstanding LIBOR Borrowing, Borrower fails to
extend the option by giving a new Borrowing and Rate Selection Notice as to the
Borrowing, then the Borrowing shall bear interest at the Effective Rate on and
after the last day of the Interest Period until paid or until the Effective Date
of a new LIBOR Rate which is selected by Borrower in accordance with this
section. This provision shall also apply to the Term Note except LIBOR
Borrowings must apply to the entire outstanding principal balance.
2.6 Limitation on Selection of LIBOR Rate. Borrower shall not have the
right to make a LIBOR Rate election of any Interest Period extending beyond the
Maturity Date of the Construction Note or the Term Note, as the case may be. In
addition, Borrower shall not have the right to make a LIBOR Rate election for
LIBOR Borrowings in any amount less than Five Hundred Thousand ($500,000.00)
Dollars for the Construction Note and the full principal balance for the Term
Note.
2.7 Interest Basis and Payment Dates. Interest on the outstanding
principal balance of the Loan shall be calculated on the basis of the actual
number of days elapsed over a three hundred sixty (360) day year. The interest
rate payable on Prime Rate Borrowings shall change when and as the Prime Rate
changes. Interest accrued on all Prime Rate Borrowings, Fixed Rate Borrowings
and LIBOR Borrowings shall be payable monthly on the first day of each calendar
month beginning on the first day of the first month following the date of the
first disbursement under the Construction Note. Interest shall be payable for
the day on which a Borrowing is made, but not for the day of any payment on the
amount paid.
2.8 Method of Payment. All principal payments and any interest paid on
the Maturity Date (defined in the Note) shall be made in immediately available
funds to Lender at the place specified by Lender by 12:00 noon (Detroit time) on
the date when due, and all interim interest payments due under the Note and fees
due may be paid by Borrower's check or draft.
6
2.9 Prepayment. Borrower may, from time to time and without penalty,
pay all, or any part of the principal, of the Prime Rate Borrowings at any time
outstanding before maturity by paying, in addition to the principal amount of
the payment, all interest accrued on the amount of such prepayment to the date
thereof. Fixed Rate Borrowings may be prepaid in accordance with Section 13 of
this Loan Agreement. LIBOR Borrowings may not be prepaid before the last day of
the applicable Interest Period unless:
(1) the Borrowings are subject to either Sections 2.10 or 2.11; and
(2) all sums described in Sections 2.10 and 2.11 are paid by Borrower
to Lender.
2.10 Failure to Pay or Borrow on Certain Dates. If (i) any payment of a
LIBOR Borrowing occurs on a date which is not the last day of an applicable
Interest Period, or (ii) a LIBOR Borrowing is not made on the date specified in
a Borrowing and Rate Selection Notice for any reason other than default by
Lender, Borrower will indemnify Lender for any loss, costs or penalties
reasonably incurred by it resulting therefrom, including, without limitation,
any prepayment costs or penalties or loss in liquidating or employing deposits
acquired or required to fund or maintain the LIBOR Borrowing.
2.11 Yield Protection. If either:
(1) there is any change (including, but not limited to, any change by
way of imposition of increased Reserve Requirement) of or in the
official interpretation of any existing or future law, rule,
regulation or directive, whether or not having the force of law;
or
(2) the compliance by Lender with any guidelines or requests from any
central bank or other governmental authority, whether or not
having the force of law, shall in the reasonable judgment of
Lender's counsel result in any increase in the cost to Lender of
making, funding or maintaining Eurodollar Advances (LIBOR
Borrowings),
then, within fifteen (15) days of demand by Lender, Borrower shall pay as
additional interest the increased costs or the amount of reduction in the amount
received by Lender which Lender reasonably determines is attributable to making,
funding and maintaining the LIBOR Borrowings, or if such increased costs would
cause the Loan to violate Michigan's criminal usury laws, Lender may, at its
option, without complying with Article 24 of the Mortgage, waive the portion of
the costs which would be violative of the criminal usury law or immediately
terminate Borrower's right to elect LIBOR Rate Borrowings.
2.12 Certificates; Survival of Indemnity. A certificate of Lender as to
the amount of payment or additional interest due under Sections 2.10 and 2.11
shall be rebuttably presumed to be correct in the absence of manifest error, and
Borrower shall pay Lender during the pendency of any dispute all amounts
specified in such certificate. Lender will, on request, provide evidence
supporting the certificate. Determination of amounts payable under Sections 2.10
and 2.11 in connection with a LIBOR Borrowing shall be calculated as though
Lender funded the LIBOR Borrowing through the purchase of a deposit of the type,
maturity and amount corresponding to the deposit used as a reference in
determining the amount payable which is applicable to the Borrowing. Unless
otherwise provided in this Agreement, the amount specified in the certificate
shall be payable five (5) Business Days after Lender's mailing of the
certificate by certified mail. The obligations under Sections 2.10 and 2.11
shall survive payment of the Loan and termination of this Agreement.
2.13 Availability of Interest Rate. If and as long as Lender, in its
sole discretion, determines, and notifies Borrower, that:
(1) Lender is unable to obtain deposits in U.S. dollars in the London
interbank market; or
(2) maintenance of Eurodollar advances (LIBOR Borrowings) would
violate any applicable law, rule, regulation or directive, whether
or not having the force of law;
then Lender may suspend the availability of the LIBOR Rate and LIBOR Borrowings
with respect to all Borrowings and require all outstanding Borrowings under a
LIBOR Rate to be converted to Prime Rate Borrowings.
7
2.14 Telephonic Notices. Lender is authorized to extend Borrowings and
effect rate selection choices based on telephonic Borrowing and Rate Selection
Notices made by any person Lender, in good faith, believes to be an authorized
agent acting on behalf of Borrower. Borrower agrees to confirm to Lender
promptly any telephonic Borrowing and Rate Selection Notice in writing signed by
an authorized agent. If the written confirmation differs in any material respect
from the action taken by Lender, the records of Lender shall govern, absent
manifest error.
2.15 Conditions of Lending. Lender shall not be obligated to lend or
make any Loan Advances at any time unless:
(1) all of the conditions for receipt of Loan Advances set forth in
Section 4 have been fulfilled; and
(2) no uncured default under any of the Loan Documents then exists,
and no event which might become a default after the lapse of time
or the giving of notice, or both, has occurred and is continuing
or shall exist upon the disbursement of such advance, provided
that Lender shall not unreasonably exercise its right to refuse to
make advances because of conditions which have not yet ripened
into defaults.
2.16 Designation of Agent. Borrower designates Xxxxxx Xxxxxxxxxx as its
agent for purposes of delivery of all notices required or permitted to be given
pursuant to this Agreement and for purposes of execution and/or certification,
on behalf of Borrower, of all documents required to be executed and/or certified
on behalf of Borrower in conjunction with all requests for advances under this
Agreement, and any such notice delivered by or document executed and/or
certified by the said agent shall be fully binding upon Borrower.
CONSTRUCTION, COSTS
AND FEES 3.
3.1 Construction. Borrower shall, at its expense, construct or cause
to be constructed upon the Site the Improvements described in Exhibit A attached
hereto. Said Improvements shall be completed prior to the Completion Date, in a
workmanlike manner and in substantial compliance with the Plans and
Specifications, heretofore submitted to and approved by Lender, and in
accordance with all building, safety, zoning, environmental and other
requirements of any state, municipal or other governmental authority. Borrower
shall diligently and continuously carry out or cause to be carried out the
construction of the Improvements so as to insure the completion thereof by the
Completion Date.
With respect to the Project and this Loan Agreement, Lender hereby
approves as:
A. General Contractor: Xxxxx Construction Company
0000 Xxxx Xxxxx Xxxxxx Xxxxxx
Post Office Xxx 00000
Xxxxxxx, XX 00000
B. Project Architect:
-------------------------------
-------------------------------
-------------------------------
C. Site Engineer: Xxxxxxx-Xxxxxxx Engineers, Inc.
000 Xxxx Xxxx Xxxxxx, Xxxxx 000
Xxxxxxx, Xxxxxxxx 00000-0000
3.2 Plans and Specifications. All requests for changes in the Plans
and Specifications must be in writing signed and approved by the General
Contractor, Borrower, Permanent Lender, if any, tenants whose approval is
required, if any, Lender and such other parties as Lender may require. Lender's
approval may be subject to such terms and conditions as Lender may prescribe.
Copies of all bulletins, addenda, change orders and modifications to the Plans
and Specifications shall be promptly delivered to Lender.
Lender shall at all times have the right to require strict compliance
with the original Plans and Specifications, but Borrower may effect changes in
the Plans from time to time, without first obtaining Lender's approval, provided
such
8
changes do not impair the structural integrity, design concept or architectural
appearance of the Improvements, no default in any other obligation to any other
party or authority results therefrom and the aggregate of all such changes does
not result in a net construction cost increase or decrease of more than two
(2.0%) percent of the construction contract.
All materials, fixtures, equipment or articles used in the construction
or equipping of Improvements shall comply with the Plans and Specifications, and
said Improvements shall not be constructed in violation of any restrictive
covenants, laws, statutes, ordinances or other governmental rules or
regulations.
3.3 Construction Costs and Fees. Borrower represents that the total
construction costs, together with Related Costs (as hereinafter defined), shall
not exceed Twenty-Six Million Eight Hundred Ninety-Three Thousand Eight Hundred
Sixty-Seven ($26,893,867.00) Dollars, as more particularly set forth in the Cost
Budget. Borrower acknowledges and agrees that the Loan Amount does not
constitute adequate funds to complete construction of the Improvements. Borrower
further acknowledges and agrees that Lender shall not be obligated to fund any
amounts in excess of the Loan Amount. Before the first request for a Loan
Advance, Borrower shall furnish sworn statements, waivers of lien and other
assurances of payment as Lender may require and acceptable to the title company
insuring the Loan, evidencing payment of all costs heretofore paid including the
Borrower's equity described on Exhibit B.
Related Costs of the Project shall include:
(1) premiums for title, casualty and other insurance required by
Lender;
(2) the cost of recording and filing Loan Documents and any tax
levied upon such filing;
(3) real estate taxes and other assessments which Borrower is
obligated to pay;
(4) fees and disbursements of Lender's counsel and architect, if
any; and
(5) interest and other costs and charges payable by Borrower to
Lender or the mortgagee under the permanent loan commitment, as
they become due and payable.
Lender may advance to or on behalf of Borrower amounts payable as
Related Costs to the extent costs have accrued. Borrower shall deliver to Lender
acceptable receipts showing payment of these items.
3.4. Commitment Fee and Expenses. Borrower shall pay to Lender an
initial commitment fee of one (1.0%) percent of the Loan Amount, which fee is
deemed earned and nonrefundable. This commitment fee shall be paid
simultaneously with the execution of this Agreement.
In addition, Borrower shall promptly pay all of Lender's out-of-pocket
costs incurred related to the Loan, including, without limitation, reasonable
attorneys' fees, costs of title insurance, surveys and environmental reports,
recording costs, outside architectural/engineering inspection fees, and such
other work provided for in the Loan Documents, upon presentation of an invoice
therefor.
3.5 Conversion Fee. In the event the Loan is converted to a Term Loan
in accordance with Paragraph 13, Borrower shall pay to Lender as a condition of
the conversion a conversion fee of one-quarter (0.25%) percent of the original
principal amount of the Term Note.
ADVANCES 4. Lender shall, subject
to the terms and
conditions of this
Loan Agreement, make
advances to the
Borrower to
defray actual costs of construction of the Improvements incurred up to the Loan
Amount, subject to the following:
4.1 Requests for Loan Advances shall be made on forms provided by or
acceptable to Lender, and all requests shall be approved by parties as Lender
requires. The requests shall indicate the amount of the Loan Advance and the
date on which the Loan Advance is desired, which shall be not less than ten (10)
days after the date on which the request
9
is received by Lender. Advances shall be limited to one (1) in any calendar
month. Additional Loan Advances may be made available at the sole discretion of
Lender.
4.2. Lender shall not be obligated to make the first Loan Advance
unless the following have been satisfied:
(1) All representations and warranties made in this Loan
Agreement shall be true and correct on and as of the date
of the Loan Advance with the same effect as if made on
that date;
(2) Lender shall have received:
(a) executed copies of all Loan Documents and any
other documents required by Lender;
(b) an estimated cost breakdown of all direct and
indirect costs of the Project;
(c) appraisals of the Project as required by Lender
in form and substance satisfactory to Lender;
(d) Plans and Specifications, and all bulletins,
addenda, change orders and modifications to the date of
the request for the Loan Advance, acceptable to Lender,
and approved in writing by Borrower, the Architect, the
General Contractor, Permanent Lender and tenants whose
approval is required, if any;
(e) an undertaking by the General Contractor and
Architect to continue performance on Lender's behalf
without additional cost in the event of Borrower's
default;
(f) evidence of compliance with all building, safety,
zoning, environmental and other requirements of any state,
municipal or other governmental authority affecting the
construction and use of the Project;
(g) all required permits, licenses, approvals and
authorizations then procurable which are required for the
construction and use of the Project;
(h) original paid insurance policies as required
hereunder and by the Mortgage;
(i) a request for advance as specified in Section
4.2(l);
(j) Borrower shall, in Lender's opinion, have fully
complied with all of the provisions of the Construction
Lien Act, being Michigan Public Act 497 of 1980, as
amended, and shall prior to the commencement of any actual
physical improvements (as defined in said Act) on the
Site, have recorded a Notice of Commencement (as defined
therein) and delivered a copy to Lender;
(k) sworn statements, schedule of costs by work trade
category, waivers of lien, copies of all writings received
or transmitted by the "Designee" identified in the Notice
of Commencement during the period ending with the date of
the request for Loan Advance, affidavits and certificate
of the Architect and of Borrower, and acceptable
assurances of payment of the General Contractor, all
subcontractors and materialmen, which shall cover all
work, labor and materials, including equipment and
fixtures of all kinds, done, performed or furnished for
the Project to the date of the request. The Architect's
certificate shall be certified to both Lender and Borrower
and certify:
(1) that each request for payment is correct and
that to the best of its knowledge all work
pursuant to the contract to the date thereof has
been done in substantial compliance with the
Plans and Specifications;
10
(2) that to the date thereof, there has been no
material deviation from the contract amount or
time of completion of the work, except as
authorized by contract modifications approved by
Lender; and
(3) the total construction cost, the cost to
complete the Improvements, and that after giving
effect to all amounts previously certified for
payment, plus the amount then requested, the
remaining uncertified and undisbursed funds will
be sufficient to meet all known costs to complete
the work covered by the contract;
(l) a current engineering survey, certified by a
registered land surveyor or engineer to Lender and the
mortgage title insurer, showing the location of all
Improvements made to the Site, the location of all
easements and public utilities (identified by liber and
page of recording), all means of ingress and egress, all
set-back lines, any encroachments either upon the real
estate of others or by others upon the Site, indicating
the location and availability of satisfactory utility
services and storm drain and sewer facilities, and
disclosing no other matter objectionable to Lender, and
bearing the following certification:
"We certify to Bank One, Michigan and Lawyers Title
Insurance Company, we have surveyed the property described
herein (the "Property") for the purpose of a mortgage loan
to be received by Ramco-Xxxxxxxxxx Properties L.P., a
Michigan limited partnership, from Bank One, Michigan, and
further certify that (i) there are located thereon
buildings, improvements and parking areas, as shown, (ii)
said buildings, improvements and parking areas are within
the boundaries of the Property and do not encroach on any
adjoining property, nor do the buildings, improvements or
parking areas on any adjoining property encroach upon the
Property, (iii) all easements, rights-of-way and building
lines affecting the Property are noted and located hereon
by dimension and liber and page of recording, (iv) all
means of ingress and egress to the Property are shown and,
if by virtue of an easement, the liber and page of
recording thereof is shown, (v) there is no moving or
standing water on the Property, except as shown, and (vi)
the Property (is) (is not) located within a Special Flood
Hazard Area as identified by the Federal Insurance
Administration, Department of Housing and Urban
Development.
We further certify that this map or plat and the survey on
which it is based were made in accordance with "Minimum
Standard Detail Requirements for ALTA/ACSM Land Title
Surveys" currently established and adopted by ALTA and
ACSM in 1997; and meets the accuracy requirements of a
Class A survey as registered therein.";
(m) copies of soil tests, indicating that the
sub-soil and geological conditions of the land are normal
and suitable for the Project without incurring any premium
costs with respect thereto;
(n) a paid policy of mortgage title insurance,
without exceptions, issued by a company and in form
satisfactory to Lender, in the full amount of the Loan,
insuring that Lender is a first mortgagee of the Premises,
and that title to the Premises is in Borrower, free and
clear of all other liens, claims, charges and
encumbrances, except such as are indicated in the Schedule
of Encumbrances attached to the Mortgage or approved by
Lender hereafter. At the time of each Loan Advance, Lender
shall be furnished with an appropriate endorsement of
coverage with respect to each Loan Advance then being
made, indicating that since the last advance, there has
been no change in the state of title and no survey
exceptions not approved by Lender, increasing the coverage
under the policy by an amount equal to the advance then
being made, and insuring that the full amount of all
disbursements up to and including such increase
constitutes a valid lien prior to any liens or other
matters of record and any unrecorded mechanics' liens
arising from nonpayment of bills covering improvements set
forth in the work progress and inspection reports and
sworn statements submitted in connection with such
disbursements;
(o) a written opinion of counsel for Borrower and
Guarantor, in form and substance satisfactory to Lender,
setting forth that:
11
(1) Borrower is a duly organized and existing
Delaware limited partnership with a current and
valid Certificate of Limited Partnership and a
Certificate of Fact, each certified by the
Secretary of State, Division of Corporations and
the Borrower and Guarantor are authorized to do
business in Michigan. Guarantor is a duly formed
Maryland Corporation (Real Estate Investment
Trust).
(2) the due authorization of the Loan by
appropriate partnership action and due
authorization of the Guaranty by appropriate
corporate action;
(3) the execution of the Loan Documents is not in
contravention of the Limited Partnership
Agreement or of any undertaking, contract or
restriction known to such counsel to which
Borrower is a party or subject and the execution
of the Guaranty is not in contravention of the
bylaws or of Declaration of Trust or any
undertaking, contract or restriction known to
such counsel to which Borrower or Guarantor is a
party or subject;
(4) counsel has no knowledge of any proceeding,
whether legal or equitable, pending or threatened
against Borrower, Guarantor or the Premises which
involves the validity or enforceability of the
Loan Documents or which would affect the
contemplated use of the Premises; and
(5) when executed and delivered, the Loan
Documents will be valid and legally binding upon
Borrower and Guarantor enforceable in accordance
with their respective terms, except as
enforcement thereof may be limited by any
proceedings in bankruptcy, insolvency,
reorganization, moratorium or other laws relating
to or affecting generally the enforcement of
creditors' rights and remedies;
(p) a Phase I environmental report by an
environmental engineer acceptable to Lender (including a
50-year title search), together with an Environmental
Questionnaire and an Environmental Certificate executed by
Borrower;
(q) other documents as may be reasonably required by
Lender; and
(r) each of the items described above shall be in
form and substance satisfactory to Lender.
4.3 The obligation of Lender to make any Loan Advances after the first
Loan Advance shall be subject to satisfaction of the following conditions:
(1) All conditions for the first Loan Advance set forth in
Section 4.2, except condition 4.2(2)(l);
(2) There shall be no default under any of the Loan Documents;
(3) If required by Lender, an updated engineering survey in
form and substance as required by Section 4.2(l);
(4) That the budget is In Balance as defined in Section
1.24(2).
4.4 Each Loan Advance(s) shall be subject to inspection and approval
of the portion of the Improvements which has been completed at the time of the
Loan Advance by Lender or its designee.
4.5 Lender shall not be required to make any Loan Advance if:
(1) there is any materially adverse change in the projected
income and expenses of the Premises or any lessee under a lease to
be assigned as security or Borrower does not satisfy the financial
covenants set forth in the Second Amended and Restated Revolving
Credit Agreement dated as of October 30, 1997 between Borrower and
Bank Boston, N.A., and others, as it may be amended, restated or
replaced from time to time;
12
(2) there shall have occurred any of the events described in
Sections 14.5 or 14.6 for which Lender has the right to terminate
this Loan Agreement;
(3) either the Borrower, or any tenant under any lease to be
assigned as security, or any Guarantor of the Loan or any such
lease shall be the subject of any bankruptcy, reorganization or
insolvency proceeding;
(4) there shall have occurred and be continuing any default by
Borrower under the Loan Documents; or
(5) there shall be a default in any other loan by Lender to
Borrower or any Guarantor of the Loan.
4.6 At no time shall the total amount of Loan Advances, together with
the cost to complete the Improvements in accordance with the Plans and
Specifications, Loan Documents and leases, if any, exceed the Loan Amount. As
construction progresses, Lender will hold back from each advance ten (10%)
percent (the hold back shall be reduced to five (5%) percent once fifty (50%)
percent of the Improvements have been completed) of all amounts advanced to
cover the cost of labor and materials furnished to the Project, which hold-backs
shall be distributed upon completion of the Improvements in accordance with the
Plans and Specifications, Loan Documents and leases, if any, and upon
satisfaction of all of the conditions for the final Loan Advance hereinafter set
forth.
4.7 Lender may establish reserves from the undisbursed portion of the
Loan in sums sufficient, in its opinion, to pay or satisfy any requirements of
the permanent loan commitment or any lien or claim prior or prejudicial to the
lien of Lender, and all funds so reserved shall be deemed loan proceeds
disbursed under this Loan Agreement whether or not segregated and whether or not
at interest. If at any time, in the reasonable judgment of Lender, the then
undisbursed portion of the Loan shall be insufficient to defray the remaining
cost of completion of the Improvements, then, Lender may in its sole discretion
cease making Loan Advances until the Loan is brought in balance and Borrower
shall go out-of-pocket to pay all costs of the Project until the Loan is brought
in balance.
4.8 Lender's obligation to make the final Loan Advance shall be
subject to satisfaction of the following:
(1) Borrower shall have furnished all of the certificates and
documents required hereunder; provided, that the certified
engineering survey required shall be a final, as-built survey and
shall include the location of all parking areas, if any, with any
dimensions and striping indicated and photographs of the Premises
from at least three (3) different views.
(2) Delivery to Lender of evidence satisfactory to it of
issuance of all certificates, permits, licenses and other
approvals required by any governmental or public authority or
rating bureau of all work requiring inspection and authorizing the
use and occupancy of the Premises.
(3) The requirements of Section 4.5.
(4) Receipt of Subordination, Non-Disturbance and Attornment
Agreements and Tenant Estoppels from tenants where required by
leases with such tenants or if requested by Lender.
(5) Certification by the Architect and General Contractor, if
any, and by Borrower of final completion of the Improvements in
accordance with the Plans and Specifications, and final inspection
and approval of the construction by Lender or its designee.
(6) All other documents, as may be reasonably required by
Lender.
(7) Each of the items described above shall be in form and
substance satisfactory to Lender.
Anything herein to the contrary notwithstanding, Lender's obligation to
make the final Loan Advance shall terminate on the Maturity Date of the Note,
without in any way affecting the obligations of Borrower hereunder.
13
INSURANCE 5. During the
construction of the
Improvements and for
as long as any part of
the Loan advanced to
or on behalf of
Borrower
remains unpaid, Borrower shall maintain a policy or policies of insurance
against fire (with extended coverage, malicious mischief and vandalism
endorsements and covering all property covered by the lien of the Mortgage or
any other instrument securing the Loan), builder's risk, public liability,
workers' compensation, Federal Flood Insurance and other insurance as Lender
may, from time to time, require (including but not limited to rental
interruption insurance for a term of at least 12 months upon issuance of a
temporary certificate of occupancy), containing where applicable a standard loss
payable clause, without contribution, in favor of Lender. All policies shall be
with companies and in form, amount and substance satisfactory to Lender, and
shall be noncancellable, except upon thirty (30) days' written notice to Lender.
APPLICATION
OF ADVANCES 6. Borrower shall apply each
Loan Advance against amounts
due and payable for
construction of the
Improvements or
obligations in connection therewith, and shall set aside the remainder, if any,
to apply against all amounts as shall become due and payable therefor. Nothing
contained in the Loan Documents shall impose upon Lender any obligation to see
to the proper application of Loan Advances by Borrower or any other party. In
the event of Borrower's default, Lender may, in making Loan Advances, pay any
portion of the Loan Advance directly to the General Contractor or any
subcontractor or supplier of materials, fixtures, equipment or labor for the
Premises.
REPRESENTATIONS
AND WARRANTIES 7. Borrower and Guarantor
(where applicable)
represent and warrant
that:
7.1 Borrower has good and marketable fee simple title to the Premises
free from all liens and encumbrances, except as provided in the Mortgage.
7.2. Borrower has fully performed all covenants and obligations to be
performed by Borrower under all leases assigned as security for the repayment of
the Loan.
7.3 The financial statements heretofore delivered to Lender are true
and correct in all material respects and have been prepared in conformity with
generally accepted accounting principles. No materially adverse change has
occurred since the date of each financial statement.
7.4 There are no suits or proceedings pending or, to the knowledge of
Borrower, threatened against or affecting Borrower, the Premises or the
Guarantor, if any, or involving the validity or enforceability of the Loan
Documents or involving any risk of a judgment or liability which, if satisfied,
would have a materially adverse effect on the financial condition, business or
properties of Borrower, or the priority of the lien of the Mortgage.
7.5 The execution and delivery of this Loan Agreement and the other
Loan Documents, and the consummation of the transactions contemplated do not
conflict with or result in the breach of any valid regulation, order, writ,
injunction, judgment or decree of any court or governmental or municipal
instrumentality or in breach of or default under any agreement or other
instrument to which the Borrower or Guarantor is a party or by which it is
bound.
7.6 Borrower has delivered to Lender accurate and complete copies of
the Plans and Specifications and all other contract documents requested,
including all modifications thereof.
7.7 The Premises have adequate rights of access to public ways, soil
conditions are appropriate for the construction of the Project, and water,
sanitary sewer and storm drain facilities and all public utilities necessary or
convenient to the full use and enjoyment of the completed Project are available
to the Site and, if not now installed, will be promptly constructed and
installed to service the Project.
7.8 Borrower has obtained all required permits, licenses, approvals
and authorizations, including those
14
required by the Federal Environmental Protection Agency and any state or local
authority charged with the enforcement of regulations of such agency, and fully
complied with all building, safety, zoning, environmental and other requirements
of any state, municipal or other governmental authority pertaining to the
construction of the Improvements capable of being complied with at the date
hereof, and will obtain all such permits, licenses, approvals and authorizations
and will comply with all such building, safety, zoning and other requirements
hereafter.
7.9 The Project will be constructed in strict accordance with all
applicable building, safety, zoning and other requirements of all state,
municipal or other governmental or regulatory authorities and rating or
inspection offices having jurisdiction, and will be constructed entirely on the
Site and will not unlawfully encroach on any easement, right-of-way or land of
others or violate any set-back lines or applicable use or other restrictions or
regulations.
7.10 There is no default on the part of the Borrower under any of the
Loan Documents.
COVENANTS OF
BORROWER 8. Borrower and Guarantor
(where applicable)
covenant with Lender
as follows:
8.1 To permit Lender or its designee access to the Project and to make
available for audit and inspection, at any reasonable time by the Lender or its
duly authorized agents, all property, equipment, books, contracts, records and
other papers relating to the Project. To keep the books and accounts of all
operations relating to the Project in accordance with generally accepted
accounting procedures.
8.2 To promptly respond to any inquiry from Lender for information
with respect to the Project, which information may be verified by Lender at
Borrower's expense; provided, however, that Lender shall at all times be
entitled to rely upon any statements or representations made by Borrower or its
agents, and Borrower shall hold Lender harmless from and indemnify it against
all loss, cost (including reasonable attorney's fees) and damage suffered
through any action taken or forbearance granted by Lender in reliance on these
statements or representations, excluding, however, any loss, cost or damage
resulting from Lender's willful misconduct or negligence.
8.3 To cause the construction of the Project to be prosecuted with
diligence and continuity and to complete the same in accordance with the Plans
and Specifications, leases, if any, and the Loan Documents before the Completion
Date.
8.4 To pay, when due, all costs, fees and expenses, required to
satisfy the conditions of the Loan Documents, and the consummation of the
transactions contemplated thereby.
8.5 Borrower shall not, without the prior written approval of Lender:
(1) Convey, transfer, sell, lease or encumber any of the mortgaged
property, or modify any existing or future lease affecting the
Premises (other than the leases to Xxxxxx Xxxxxx Corporation and
Meijer, Inc.);
(2) Assign, transfer, dispose of or encumber any personal property
or equipment covered by the Loan Documents, except in the ordinary
course of its business and as permitted by any of said Loan
Documents;
(3) Convey, assign or transfer any beneficial interest in the
properties described in the Mortgage or any right to manage or
receive any of the rents, contract payments, income and profits
thereof;
(4) Remodel, add to, reconstruct, improve or demolish any part of
the properties described in the Mortgage, except as required to do
so by the provisions of this Loan Agreement;
(5) Permit the use of the Project for any purpose except the use
which was originally intended, nor suffer any occupancy of the
Project prior to completion thereof, excepting only in connection
with the construction thereof;
(6) Guarantee the indebtedness of any other party except affiliate
parties;
15
(7) Purchase or acquire any materials, fixtures or equipment for
the Project upon leases, conditional sale or other type of title
retention of security agreement.
8.6 To comply with all terms and conditions of the permanent loan
commitment, if any, so that Borrower will
qualify for the financing provided for therein (which financing Borrower will
accept), and to transmit to Lender, immediately upon receipt thereof, any
communication pertaining to the permanent loan commitment or the Project.
8.7 Upon demand of Lender, to correct any structural defect or
unauthorized departure from the Plans and Specifications not approved by Lender.
8.8 The Borrower will take all actions reasonably necessary to assure
that Year 2000 Issues will not have a material adverse effect on the business
operations or financial condition of the Borrower. "Year 2000 Issues" means
anticipated costs, problems and uncertainties associated with the inability of
certain computer applications to effectively handle data including dates on and
after January 1, 2000, as such inability affects the business, operations, and
financial condition of the Borrower and of the Borrower's material customers,
suppliers and vendors. Upon Banks' request, Borrower will provide Banks with a
description of its plan to address Year 2000 Issues, including updates and
progress reports. Borrower will advise Banks of any reasonably anticipated
material adverse effect on the business operations or financial condition of the
Borrower as a result of Year 2000 Issues.
8.9 From and after one year from conversion to a Term Loan under
Section 13, it will maintain a debt service coverage ratio of not less than 1:25
to 1. This covenant shall be serviced quarterly based on a trailing twelve (12)
month period.
8.10 From and after six (6) months from the date of this Agreement,
Borrower shall bring the budget In Balance.
EVENTS
OF DEFAULT 9. The following shall
constitute Events of
Default:
9.1 If Borrower is in default under any of the Loan Documents;
9.2 If at any time any representation or warranty contained herein or
in any certificate or document delivered to the Lender is false or incorrect;
9.3 If the Project, in the exclusive judgment of Lender, is not or
cannot be completed on or before the Completion Date;
9.4 If construction of the Improvements is not carried on with
reasonable dispatch, except for delays and events entirely beyond the control of
Borrower, such as strikes, acts of God or inability to obtain materials;
9.5 If a lien for the performance of work or the supply of materials
be perfected against the Premises and remains unsatisfied or unbonded at the
time of any request for advance or for a period of thirty (30) days after the
date of filing thereof;
9.6 Any assignment by Borrower of this Loan Agreement or any advance
hereunder without Lender's prior written consent;
9.7 The filing of formal charges under any federal, state or local
statute, law or ordinance for which forfeiture of any property mortgaged or
pledged to Lender or in which Lender is granted a security interest pursuant to
any documents required to be executed by Borrower under this Agreement is a
potential penalty; or
9.8 If Lender, or its employees, agents or designees, shall be denied
any information relating to the Premises or access thereto for information
purposes.
16
REMEDIES
UPON DEFAULT 10. In addition to all other remedies
available under the Loan Documents,
the following remedies shall be
available upon
default by Borrower:
10.1 Lender may, as an alternative to other methods of summary
execution, but without waiving such other methods, and particularly its rights
and remedies as mortgagee, enter into possession of the Premises and perform any
and all work and labor necessary to complete said Project substantially
according to said Plans and Specifications and/or take all appropriate steps to
secure and protect the Project. All sums expended by Lender for such purpose
shall be deemed to have been paid to Borrower and secured by the Mortgage. In
the event of any default, Borrower hereby constitutes and appoints Lender its
true and lawful attorney-in-fact with full power of substitution in the
premises, to complete the Project in the name of Borrower, and hereby empowers
Lender as its attorney-in-fact as follows: (a) to use any funds of Borrower,
including any balance which may be held in escrow and any funds which may remain
unadvanced under the Mortgage or hereunder, for the purpose of completing the
Project in the manner called for by the Plans and Specifications; (b) to make
such additions, changes and corrections in the Plans and Specifications which
may be necessary or desirable to complete the Project in the manner contemplated
by the permanent loan commitment or otherwise to Lender's satisfaction; (c) to
employ such contractors, subcontractors, agents, architects and inspectors as
shall be required for said purposes; (d) to execute all applications and
certificates in the name of Borrower which may be required by any contract
documents relating to the Project; and (e) to do any and every act which
Borrower could be required by Lender to do in its own behalf. In the event of
entry by Lender for the purposes aforesaid, Lender shall be paid as compensation
for such efforts and in addition to all other sums payable to it, a sum equal to
ten (10%) percent of all costs incurred for such purposes and of all costs
directly related thereto. This power of attorney shall be deemed a power coupled
with an interest and cannot be revoked by Borrower. Lender, as attorney-in-fact,
shall also have power to prosecute and defend all actions or proceedings in
connection with the construction and/or security of the Project or in any other
respect relating to the Premises and to take such action and require such
performance as it deems necessary under accepted bonds, guaranties or other
assurances of completion. Borrower hereby assigns and transfers to Lender all
sums unadvanced under said Mortgage or hereunder and all sums held in escrow,
conditioned upon the use of said sums in the completion of the Improvements and
payment of all costs directly related to such completion and/or security
thereof, such assignment to become effective only in case of Borrower's default,
but upon such default being called, without further notice to or demand made
upon Borrower. In the event of such default and entry by Lender, all materials
purchased by Borrower for use in construction shall be and become forthwith the
property of Lender and shall be deemed to have been delivered to Lender
accordingly, and, upon demand, Borrower shall deliver to Lender bills of sale as
further evidence thereof.
10.2 Lender may avail itself of any and all remedies available to it at
law or in equity or hereunder, and all such remedies shall be cumulative and
none shall be deemed exclusive of any other. Further, and not in limitation of
the foregoing, Lender may terminate this Loan Agreement and demand full payment
of Borrower's indebtedness to it, may enter upon the Premises and complete the
Project as hereinabove provided, and may utilize any remedy available to it
under the terms and provisions of the Loan Documents. In addition, Borrower
will, at the request of Lender, assign, transfer and set over to Lender by
appropriate instrument, in writing, all of Borrower's right, title and interest
in and to any construction contract, bonds or other contracts relating to the
construction and operation of the Project. Borrower does hereby constitute
Lender its attorney-in-fact, with full power of substitution, to act in
Borrower's name to execute assignments and contracts and to realize upon any of
Borrower's right, title and interest therein and to negotiate, receive and
receipt for all goods, funds or credits which may be owing Borrower, and to such
end to initiate legal action and prosecute or compromise all claims relating
thereto.
CAPITAL
ADEQUACY PROTECTION 11. If Lender shall have determined that
(i) the adoption of, or compliance
with, the risk based capital
guidelines adopted by
the Board of Governors of the Federal Reserve System, 12 CFR Part 208, Appendix
A, or the Federal Deposit Insurance Corporation, 12 CFR Part 325, Appendix A,
and amendments thereto, or (ii) the adoption of any applicable law, rule or
regulation 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 Lender (or any branch or lending office
thereof) 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 Lender's
capital as a consequence of its obligations under this Agreement and the
17
Note to a level below that which Lender could have achieved but for such
adoption, change or compliance (taking into consideration Lender's policies with
respect to capital adequacy) by an amount deemed by Lender to be material, then,
from time to time within fifteen (15) days after demand by Lender, Borrower
shall pay to Lender such additional amount or amounts as will compensate Lender
for such reduction.
Lender will promptly notify Borrower of any event of which it has
knowledge, occurring after such date, which will entitle Lender to compensation
pursuant to this Section 11 pertaining to capital adequacy requirements and will
designate a different branch or lending office if such designation will avoid
the need for, or reduce the amount of, such compensation and will not, in the
judgment of Lender, be otherwise disadvantageous to Lender. A certificate of
Lender claiming such compensation and setting forth the additional amount or
amounts to be paid to it in respect hereof shall be conclusive in the absence of
manifest error. In determining such amount, Lender may use any reasonable
averaging and attribution methods.
APPLICATION OF
RENTS AND RECEIPTS 12. After completion of the Project, or
of any phase, unit or portion
thereof, all rents, revenues or
receipts received by
Borrower from the operation in excess of normal operating expenses shall be used
by Borrower exclusively for payment of (i) construction costs and Related Costs
of the Project, or (ii) interest or principal due on the Note, as specified by
Lender.
CONVERSION TO
TERM LOAN 13. Besides any other conditions or
requirements the Borrower must meet
under the terms of this Agreement or
the other Loan
Documents to convert the Construction Loan to the Term Loan, Lender's obligation
to convert the Construction Loan to the Term Loan shall be further subject to
the Borrower's compliance with and fulfillment of the following
conditions/requirements on or before the Conversion Date, each in form,
substance and amount (if applicable) satisfactory to Lender:
(A) There is no default under any of the Loan Documents, and a
default would not occur with the passage of time or giving of
notice or both;
(B) The Borrower shall have paid all fees, expenses and costs
associated with the conversion;
(C) The Borrower shall have caused the title insurance company
insuring the Mortgage to issue a "date down" or other
appropriate endorsement(s) to its title policy for the
Mortgage (1) changing the "Date of Policy" in the title policy
to the Conversion Date, (2) indicating that since the last
advance under the Construction Loan, there has been no change
in the state of title of the Site and no survey exceptions not
previously approved by the Bank and (3) insuring that, as of
the Conversion Date, the full amount of the Term Loan
constitutes a valid lien on the Site that is prior to any
liens or other matters of record and any unrecorded
construction liens arising from nonpayment of bills covering
improvements described in the work progress and inspection
reports and sworn statements submitted as part of advances
made under Construction Loan:
(D) The Borrower shall have caused the title insurance company
insuring the Mortgage to have (1) changed the ALTA Form 3.0
zoning endorsement to an ALTA Form 3.1 zoning endorsement that
covers the completed Improvements and (2) issued/brought
current such other endorsements (including, without
limitation, the ALTA 9 endorsement) to the title policy as the
Bank may require; and
(E) The Borrower shall have executed and delivered the Term Note
in the form attached as Exhibit D-1 or D-2 to Lender, together
with all other documents required under this Agreement and the
other Loan Documents; and
(F) At least one (1) day before the conversion, Borrower shall
notify Lender in writing of its election of a LIBOR Rate, the
Effective Rate, or a Fixed Rate. If Borrower wishes to elect a
LIBOR Rate, it shall comply with the requirements set forth in
this Loan Agreement. If Borrower does not elect a rate of
interest, the Effective Rate will apply.
If Borrower elects a floating rate of interest, the Term Note may be
prepaid in whole or in part, at any time without penalty as to any floating rate
borrowings. If Borrower elects a Fixed Rate of interest, prepayment shall be
subject to a prepayment premium equal to the Current Value of: (a) the interest
that would have accrued on the amount prepaid at
18
the Fixed Rate, minus (b) the interest rate that could accrue on the amount
prepaid at the Treasury Rate. In both cases, interest will be calculated from
the prepayment to the maturity dates of the installments being paid. Such
maturity dates shall be determined by applying the prepayment to the scheduled
installments of principal in their inverse order of maturity. "Treasury Rate"
shall mean the yield, as of the date of prepayment, on United States Treasury
bills, notes or bonds, selected by the Lender in its discretion, having
maturities comparable to the scheduled maturities of the installments being
prepaid. "Current Value" means the net present value of the dollar amount of the
interest to be earned, discounted at the Treasury Rate. In no event shall the
prepayment premium be less than zero. As to LIBOR Borrowings, prepayment shall
be subject to Section 2.
Borrower shall provide one (1) day notice of its intent to prepay the
Term Note which notice shall be irrevocable. If the balance of the Loan is
accelerated, the resulting balance due shall be considered a prepayment due and
payable as of the date of acceleration.
Borrower agrees that the prepayment premium is a reasonable estimate of
loss and not a penalty. The prepayment premium is payable as liquidated damages
for the loss of bargain, and its payments shall not in any way reduce,
affect or impair any other obligation of the Borrower under the Loan.
MISCELLANEOUS 14.
14.1 No waiver at any time of the provisions or conditions of this Loan
Agreement or of any other Loan Documents shall be construed as a waiver of any
of the other provisions or conditions thereof, nor shall a waiver of any such
provision or condition be construed as a right to subsequent waiver of the same
provision or condition.
14.2 No provision of this Agreement shall be amended, waived or
modified, except by an instrument in writing signed by the parties.
14.3 Unenforceability for any reason of any provision of this Loan
Agreement shall not limit or impair the operation or validity of any other
provisions of this Loan Agreement or any other of the Loan Documents.
14.4 If, in the opinion of Lender, its position under the Loan
Documents may be prejudiced or impaired by failure or unreasonable delay on the
part of Borrower in the performance of its obligations hereunder, including the
payment of any prior charge upon the Premises or any other charge payable by
Borrower whether or not related to the Project, then and in any such events,
Lender may pay or otherwise satisfy the obligations of Borrower with respect
thereto, and any such payments or costs of such satisfaction, including a
reasonable attorney's fee, may be charged to the proceeds of the Loan as any
other advance hereunder and deemed made pursuant to this Loan Agreement and not
in modification thereof.
14.5 In the event of any loss or damage to the Project by fire or other
casualty, and the same is not repaired or replaced, or such repairs commenced or
arrangements therefor made and reasonable progress toward the completion thereof
made, within sixty (60) days from date of such fire or casualty in accordance
with Article 4 of the Mortgage, Lender may, at its election, terminate this Loan
Agreement without affecting the validity of the Note or the security for the
principal advances already made and interest thereon, and demand full payment of
the entire indebtedness owing hereunder and under the Loan Documents. If this
Loan Agreement is not terminated, as provided above, when the Project shall have
been repaired to the same state of completion as was when the loss or damage was
suffered, both parties shall then carry out the terms of this Loan Agreement as
if no such loss or damage had occurred.
14.6 In the event that by or pursuant to proper authority there is
taken or condemned the entire Premises, or such part thereof as in the opinion
of Lender would result in limitation or impairment of Borrower's ability or
capacity to satisfy all of its obligations now or at any time relating to the
Premises, or if any such taking or condemnation results in the cancellation,
termination or amendment of the permanent loan commitment or any lease or other
agreement for occupancy of the Premises or any part thereof, which is
unsatisfactory to Lender, Lender may terminate this Loan Agreement without
affecting the validity of the Note or the security for the principal advances
already made and interest thereon and demand full payment of the entire
indebtedness owing hereunder and under the Loan Documents; provided, however,
Borrower shall have thirty (30) days within which to seek other financing
arrangements satisfactory to Borrower and Lender.
14.7 Borrower acknowledges that the right to trial by jury is a
constitutional one, but that it may be waived.
19
Borrower, after consulting counsel of its choice (or having had the opportunity
to consult with counsel), knowingly, voluntarily and without coercion, waives
all rights to a trial by jury of all disputes between Borrower and Lender.
14.8 This Agreement is cross-defaulted with all other Loan Documents.
Any default under any instrument or agreement delivered to evidence or secure
the indebtedness secured by the Note, or executed in conjunction therewith,
including, this Loan Agreement, shall be deemed an act of default by the
Mortgagor under any other instrument or agreement delivered to evidence or
secure the indebtedness evidenced by the Note.
14.9 This Agreement is entered into by and between, and for the benefit
of, Borrower and Lender only. No other party (including, but not limited to, the
General Contractor, Architect, subcontractors, laborers and materialmen) shall
have the right to rely upon or derive any benefits from this Agreement, nor
shall such party be deemed to be a third party beneficiary of this Agreement.
14.10 Lender shall release portions of the Property from the lien of
the Mortgage in accordance with the release provision of the Mortgage.
14.11 Any notice, demand, request or other instrument which may be or
is required to be given under this Loan Agreement shall be given to the parties
at their respective addresses first above written by U.S. Certified Mail, Return
Receipt Requested.
14.12 Time is of the essence for all purposes of this Agreement.
14.13 This Loan is made and accepted in the State of Michigan and this
Loan Agreement and all of the Loan
Documents shall be construed in accordance with the laws of the State of
Michigan.
The parties have executed this Loan Agreement as of the day and year
first above written.
Signed:
RAMCO-XXXXXXXXXX PROPERTIES, L.P., a Delaware
limited partnership
By: Ramco-Xxxxxxxxxx Properties Trust, a Maryland
real estate investment trust
Its: General Partner
By: /s/ XXXXXX XXXXXXXXXX
Xxxxxx Xxxxxxxxxx
Its: President
"Borrower"
BANK ONE, MICHIGAN, a Michigan banking corporation
By: /s/ XXXXXX X. XXXX
Xxxxxx X. Xxxx
Its: First Vice President
"Lender"
INSTRUMENT DRAFTED BY:
Xxxxxx Xxxxxxxx, Atty.
BARRIS, SOTT, DENN & DRIKER, P.L.L.C.
000 Xxxx Xxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000-0000
