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CONSTRUCTION LOAN AGREEMENT
among
TAUBMAN MACARTHUR ASSOCIATES LIMITED PARTNERSHIP,
as Borrower,
BAYERISCHE HYPOTHEKEN- UND WECHSEL-BANK,
AKTIENGESELLSCHAFT, NEW YORK BRANCH and
THE OTHER BANKS AND FINANCIAL INSTITUTIONS
FROM TIME TO TIME PARTIES HERETO,
as Lenders,
and
BAYERISCHE HYPOTHEKEN- UND WECHSEL-BANK
AKTIENGESELLSCHAFT, NEW YORK BRANCH,
as Agent
Dated as of October 28, 1997
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TABLE OF CONTENTS
Page
SECTION 1. DEFINITIONS.................................................. 2
1.1 Defined Terms............................................... 2
1.2 Other Definitional Provisions............................... 17
SECTION 2. AMOUNT AND TERMS OF COMMITMENTS.............................. 17
2.1 Agreement to Lend and to Borrow; Notes...................... 17
2.2 Determination of Amounts of Loan Advances................... 18
2.3 Budget Evaluation........................................... 19
2.4 Budget Reallocation and Adjustments......................... 19
2.5 Use of Proceeds............................................. 20
SECTION 3. BORROWING PROCEDURES......................................... 20
3.1 Procedure for Borrowing..................................... 20
3.2 First Advance and Subsequent Advances....................... 20
3.3 Waivers of Conditions....................................... 21
3.4 Advances to Pay Interest.................................... 21
3.5 Optional Prepayments........................................ 22
3.6 Conversion and Continuation Options......................... 22
3.7 Minimum Amounts of Tranches; Maximum Number of
Tranches................................................. 23
3.8 Interest Rates and Payment Dates............................ 23
3.9 Computation of Interest and Fees............................ 23
3.10 Inability to Determine Interest Rate....................... 24
3.11 Pro Rata Treatment and Payments............................ 24
3.12 Illegality................................................. 25
3.13 Legal Requirements......................................... 25
3.14 Taxes...................................................... 27
3.15 Indemnity.................................................. 28
3.16 Substitution of Lenders.................................... 29
3.17 Extension of Maturity Date................................. 30
SECTION 4. REPRESENTATIONS AND WARRANTIES............................... 31
4.1 Formation and Existence..................................... 31
4.2 Power and Authority......................................... 32
4.3 Authorization; Enforceable Obligations...................... 32
4.4 No Litigation............................................... 32
4.5 Consents, Approvals, Authorizations, Etc.................... 32
4.6 No Legal Bar................................................ 33
4.7 Compliance with Building Codes, Zoning Laws,
Etc...................................................... 33
4.8 No Default.................................................. 33
4.9 Taxes....................................................... 33
4.10 Availability of Utilities.................................. 33
4.11 Brokerage.................................................. 33
4.12 Permits, Etc............................................... 34
4.13 Financial Statements....................................... 34
4.14 ERISA...................................................... 34
4.15 Solvency................................................... 35
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Page
4.16 Roads...................................................... 35
4.17 REA and Leases............................................. 35
4.18 Accuracy of Information; Full Disclosure................... 35
4.19 Mall Site in Buildable Condition........................... 36
4.20 Plans under REA............................................ 36
SECTION 5. AFFIRMATIVE COVENANTS........................................ 36
5.1 Construction................................................ 36
5.2 Performance under Other Agreements.......................... 37
5.3 No Encroachments............................................ 37
5.4 Application of Insurance and Condemnation Proceeds.......... 37
5.5 Certain Notices............................................. 38
5.6 Plan Changes................................................ 38
5.7 Indemnification............................................. 39
5.8 Expenses.................................................... 39
5.9 Construction Schedule....................................... 40
5.10 Inspection of Books and Records............................ 40
5.11 Movement of Unincorporated Materials..................... 40
5.12 Inspection Reports......................................... 41
5.13 Financial Statements; Other Information.................... 41
5.14 Administration Fee......................................... 42
5.15 Leasing.................................................... 42
SECTION 6. NEGATIVE COVENANTS........................................... 43
6.1 Additional Debt............................................. 43
6.2 Changes in Plans............................................ 43
6.3 ............................................................ 43
6.4 Changes in Agreements....................................... 43
6.5 Transactions with Affiliates................................ 44
6.6 Appointment of Manager; Amendment of Third Party Management
Agreement. .............................................. 44
SECTION 7. CONDITIONS PRECEDENT TO FIRST ADVANCE........................ 44
7.1 Closing Documents........................................... 44
7.2 Fees........................................................ 48
7.3 Agency Construction Funding................................. 49
7.4 Accounting.................................................. 49
7.5 Representations and Warranties.............................. 49
7.6 No Default or Event of Default.............................. 49
7.7 Notices of Leasehold Mortgage............................... 49
7.8 Surety Bonds; Construction Contracts....................... 49
7.9 Additional Matters.......................................... 49
SECTION 8. CONDITIONS PRECEDENT TO SUBSEQUENT ADVANCES.................. 49
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Page
8.1 All Subsequent Advances..................................... 49
8.2 Completion of Improvements.................................. 52
SECTION 9. EVENTS OF DEFAULT............................................ 53
9.1 Events of Default........................................... 53
9.2 Lenders' Right to Apply Loan Proceeds....................... 56
9.3 Lenders' Right to Stop Advancing Funds and to Accelerate
the Loans................................................... 57
9.4 Lenders' Right to Complete.................................. 57
9.5 Power of Attorney........................................... 58
SECTION 10. THE AGENT................................................... 58
10.1 Appointment................................................ 58
10.2 Delegation of Duties....................................... 58
10.3 Exculpatory Provisions..................................... 59
10.4 Reliance by Agent.......................................... 59
10.5 Notice of Default.......................................... 59
10.6 Non-Reliance on Agent and Other Lenders.................... 60
10.7 Indemnification............................................ 60
10.8 Agent in Its Individual Capacity........................... 61
10.9 Successor Agent............................................ 61
10.10 Rights of Agent and the Lenders........................... 61
10.11 Participation. .......................................... 63
10.12 Liability of Agent........................................ 64
SECTION 11. GENERAL CONDITIONS.......................................... 65
11.1 No Waivers................................................. 65
11.2 Lenders and Agent Sole Beneficiary......................... 65
11.3 Notices.................................................... 65
11.4 Modifications.............................................. 66
11.5 Rights Cumulative.......................................... 66
11.6 Sign....................................................... 67
11.7 Schedules.................................................. 67
11.8 Successors and Assigns..................................... 67
11.9 Governing Law.............................................. 67
11.10 Submission to Jurisdiction................................ 67
11.11 WAIVERS OF JURY TRIAL..................................... 68
11.12 Captions.................................................. 68
11.13 Adjustments; Set-off...................................... 68
11.14 Counterparts.............................................. 68
11.15 Severability.............................................. 69
11.16 Integration............................................... 69
11.17 Cure Rights of Agency..................................... 69
11.18 Exculpation............................................... 69
11.19 Non-Recourse to TRG Partners.............................. 70
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SCHEDULES
Schedule 1 Borrower Construction Plans
EXHIBITS
Exhibit A Form of Borrowing Certificate and Requisition
Exhibit B Form of Note
Exhibit C Form of Assignment and Acceptance
Exhibit D Solvency Certificate
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CONSTRUCTION LOAN AGREEMENT
---------------------------
THIS AGREEMENT is made as of the 28th day of October, 1997 among
TAUBMAN MACARTHUR ASSOCIATES LIMITED PARTNERSHIP, a Delaware limited partnership
("Borrower"), BAYERISCHE HYPOTHEKEN- UND WECHSEL-BANK AKTIENGESELLSCHAFT, NEW
YORK BRANCH, the New York branch of a German banking corporation as
administrative agent (in such capacity, the "Agent") for itself and the other
banks and financial institutions from time to time parties to this Agreement
(the Agent, together with such other banks and financial institutions, being
sometimes referred to collectively as "Lenders" and individually as a "Lender").
RECITALS
--------
A. The Borrower is developing and constructing a regional shopping
mall in the Xxxxxxxx Xxxxx Xxxx xx Xxxxxxx, Xxxxxxxx to be known as "MacArthur
Center", containing approximately 930,000 square feet of gross leasable area
(the "Mall"), which Mall may include an entertainment center. The Norfolk
Redevelopment and Housing Authority in its capacity as the Redevelopment
Commission of the City of Norfolk (the "Agency") is leasing to Borrower a
portion of the Mall, as more particularly described in Schedule A to the
Mortgage (the "Leased Premises"). The Mall is to be anchored by Nordstrom, Inc.,
which will lease its site (the "Nordstrom Site") directly from the Agency and
Dillards, Inc. which will lease its site (the "Dillards Site") directly from
Borrower.
B. Borrower has requested Lenders to make loans to Borrower in the
aggregate principal amount not to exceed $150,000,000 in order to provide the
financing for (i) construction of improvements to be located on the Leased
Premises and (ii) certain other costs, as described in the Budget referred to
below.
C. Subject to the terms and conditions of this Agreement, Lenders
will make the loans to Borrower.
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AGREEMENT
---------
SECTION 1. DEFINITIONS
-----------
1.1 Defined Terms. For the purposes of this Agreement each of the
following terms shall have the meaning given such term below:
Administrative Fee: As defined in Section 3.14.
Affected Bank: As defined in Section 3.16
Agent: As defined in the Preamble, including any successor agent
appointed pursuant to this Agreement.
Affiliate: As to any Person, any other Person (other than a
subsidiary) which, directly or indirectly, is in control of, is controlled
by, or is under common control with, such Person. For purposes of this
definition "control" of a Person means the power, directly or indirectly,
either to (a) vote 10% or more of the securities having ordinary voting
power for the election of directors of such Person or (b) direct or cause
the direction of the management and policies of such Person, whether by
contract or otherwise.
Agency: As defined in the Recitals.
Agency Construction Plans: Any schematic plan, design development
document, plan or specification delivered by the Agency to Agent with
respect to the Public Components (as defined in the Project Agreement).
Agency Estoppel: The certificate dated as of the date of this
Agreement addressed to the Agent for the benefit of the Lenders from the
Agency in which the Agency certifies the amount it has funded to date for
completion of the Agency's Work and other amounts which it is required to
fund pursuant to the Project Documents and other matters reasonably
requested by the Agent.
Agency Documents: The collective reference to the Project Agreement
and the Mall Lease.
Agency's Work: shall mean the design and construction of the Public
Components (as defined in the Project Agreement).
Agreement: This Construction Loan Agreement, as it may be amended,
supplemented or otherwise modified from time to time.
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Anchor Leases: The collective reference to xxx Xxxxxxxx Lease, the
Nordstrom's Lease, the Nordstrom Supplement, xxx Xxxxxxxx' Supplement and
any lease or other agreement entered into by Borrower with a department
store which occupies the Third Anchor Parcel (as defined in the Mortgage).
Applicable Margin: with respect to each Type of Loan at any date, the
applicable percentage per annum set forth below:
Eurodollar Loans 1.20%
Prime Rate Loans 0.50%
provided, if during any Interest Period the Negative Rating Condition
exists, the Applicable Margin shall be increased by 0.15% with respect to
the Guarantied Principal for such Interest Period (and remain as stated
above with respect to the Non-Guarantied Principal) and provided, further,
during the Second Extension Period, the then Applicable Margin (after
giving effect to any increase pursuant to the proviso above) shall be
increased by 0.15% with respect to the entire principal amount of the Loans
outstanding.
Architect: Xxxxx & Black Associates, Inc. or such architect as
Borrower may engage from time to time with the prior written consent of
Agent if required under the terms of this Agreement.
Architect's Agreement: The Agreement dated January 15, 1996 between
Borrower and the Architect as the same may be amended, supplemented or
otherwise modified from time to time with the prior written consent of
Agent in accordance with the terms of this Agreement.
Architect's Certificate: A certificate (which shall include standard
form G-702) by the Architect delivered to the Agent on or before the date
of the initial advance of the Loan, satisfactory in form and substance to
Agent.
Assignee: As defined in subsection 10.11(b).
Assignment of Leases: The Assignment of Leases dated as of the date
this Agreement made by Borrower to Agent, as it may be amended,
supplemented or otherwise modified from time to time.
Automatic Acceleration Default: As defined in the Mortgage.
Available Commitment: As to any Lender at any time, an amount equal to
the excess, if any, of (a) the amount of
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such Lender's Commitment over (b) the aggregate principal amount of all
Loans theretofore made by such Lender, provided that from and after the
Termination Date, the Available Commitment shall equal zero.
Borrower: As defined in the Preamble.
Borrowing Certificate and Requisition: A certificate by a Responsible
Officer, delivered to Agent on each Borrowing Date, substantially in the
form of Exhibit A.
Borrowing Date: Any Business Day (or LIBOR Business Day for a
Eurodollar Loan) specified in a notice pursuant to subsection 3.1 as a date
on which Borrower requests Lenders to make Loans hereunder.
Borrower Construction Plans: The plan, design development document and
specifications delivered by Borrower to Agent with respect to the Private
Components (as defined in the Project Agreement), a schedule of which is
attached hereto as Schedule 1.
Borrower Documents: The collective reference to the Management
Agreement, the Partnership Agreement, the REA, xxx Xxxxxxxx' Supplement,
the Nordstrom Supplement and the Construction Documents.
Borrower's Work: Shall mean the design and Construction of the Private
Components (as defined in the Project Agreement).
Budget: The budget previously delivered to and approved by Agent, as
it may be amended, supplemented or otherwise modified from time to time in
accordance with this Agreement.
Budget Deficit: As defined in subsection 2.3.
Business Day: A day other than a Saturday, Sunday or other day on
which commercial banks in New York City are authorized or required by law
to close.
Code: The Internal Revenue Code of 1986, as amended from time to time.
Collateral: The collective reference to the Leased Premises and any
other property encumbered by the Security Documents.
Commitment: As to any Lender, the obligations of such Lender to make
Loans to Borrower hereunder in an aggregate principal amount not to exceed
the amount set forth opposite such Lender's name on the signature page to
this Agreement.
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Commitment Amount: At any time, the aggregate principal amount of the
Loans outstanding at such time plus the sum of the Available Commitment of
each Lender at such time.
Commitment Percentage: As to any Lender at any time, the percentage
which such Lender's Commitment then constitutes of the aggregate
Commitments (or, at any time after the Commitments shall have expired or
terminated, the percentage which the aggregate principal amount of such
Lender's Loans then outstanding constitutes of the aggregate principal
amount of the Loans then outstanding).
Commitment Period: The period from and including the date hereof to
but not including the Termination Date or such earlier date as the
Commitments shall terminate as provided herein.
Commonly Controlled Entity: An entity, whether or not incorporated,
which is under common control with the Borrower within the meaning of
Section 4001 of ERISA or is part of a group which includes the Borrower and
which is treated as a single employer under Section 414 of the Code.
Completion or Completed: Shall mean, with respect to the Improvements,
completion of the Improvements in accordance with each of the conditions
set forth in Section 8.2.
Completion Guaranty: The Completion Guaranty dated of even date
herewith made by Guarantor in favor of Agent, as it may be amended,
supplemented or otherwise modified from time to time.
Construction Agreement: The agreement dated on or about the date
hereof, between Borrower and the Construction Manager, providing for the
construction of the Improvements, as the same may be amended, supplemented
or otherwise modified from time to time in accordance with the terms of
this Agreement.
Construction Documents: The collective reference to the Construction
Agreement, the Architect's Agreement, the Engineer's Agreement and the
Permits.
Construction Manager: Sordoni Skanska Construction Co. or such other
construction manager or general contractors as may be engaged by Borrower
from time to time in connection with the construction of the Improvements
with the Agent's prior written approval if required under the terms of this
Agreement.
Construction Manager's Certificate: A certificate by the Construction
Manager (which shall include standard form
6
G-702) delivered to the Agent on or before the date of the initial advance
of the Loan, satisfactory in Form and substance to Agent.
Consulting Professional: Inspection & Valuation International, Inc.,
or such other architectural or engineering consultant as Lenders may engage
from time to time to examine the Plans, changes in the Plans and Budget
cost breakdowns and estimates, to make periodic inspections of the progress
on construction of the Improvements on Lenders' behalf and to advise and
render reports to Lenders.
Contractual Obligation: As to any Person, any provision of any
security issued by such Person or of any agreement, instrument or
undertaking to which such Person is a party or by which it or any of its
property is bound.
Default: Any of the events specified in subsection 9.1, whether or not
any requirement for the giving of notice, the lapse of time, or both, or
any other condition has been satisfied.
Dillards: Dillards Department Stores, Inc., a Delaware corporation.
Dillards' Improvements: The improvements constituting a Dillards
retail department store containing approximately 260,000 square feet of
space to be constructed on xxx Xxxxxxxx' Site and to be operated by
Dillards.
Dillards' Lease: The Land Sublease dated as of November 22, 1996
between Dillards and the Borrower for the occupancy of xxx Xxxxxxxx' Site.
Dillards' Site: As defined in the Recitals.
Dillards' Supplement: The Supplemental Agreement dated as of November
22, 1996 by and between Borrower and Dillards.
Dollars and $: Dollars in lawful currency of the United States of
America.
Engineer: Xxxxxxx Xxxxx Jr., Inc or such other engineer as may be
engaged by Borrower from time to time in connection with the construction
of the Improvements with the Agent's prior written approval if required
under this Agreement.
Engineer's Agreement: The agreement dated on or about the date hereof
between Borrower and the Engineer, as the same may be amended, supplemented
or otherwise modified from time to time with the prior written consent of
Agent if required under this Agreement.
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Engineer's Certificate: A certificate from the Engineer delivered to
the Agent on or before the date of the initial advance of the Loan,
satisfactory in form and substance to Agent.
Environmental Indemnity: The Environmental Indemnity Agreement dated
as of the date of this Agreement made by Borrower and the Guarantor in
favor of Lenders as the same may be amended, supplemented or otherwise
modified from time to time.
ERISA: The Employee Retirement Income Security Act of 1974, as amended
from time to time.
ERISA Plan: At a particular time, any employee benefit plan which is
covered by ERISA and in respect of which the Borrower or a Commonly
Controlled Entity is (or, if such plan were terminated at such time, would
under Section 4069 of ERISA be deemed to be) an "employer" as defined in
Section 3(5) of ERISA.
Eurodollar Loans: Loans the rate of interest applicable to which is
based upon the Eurodollar Rate.
Eurodollar Rate: with respect to each Eurodollar Loan during a
specified Interest Period, the rate of interest per annum obtained by
dividing (i) the Eurodollar rate commencing on the first day of such
Interest Period, appearing on Page 3750 of the Telerate Service as of 11:00
A.M., London time, two LIBOR Business Days prior to the beginning of such
Interest Period by (ii) a percentage equal to 100% minus the stated maximum
rate (expressed as a percentage, rounded upward to the next 1/100th of one
percent) of all reserve requirements (including any marginal, emergency,
supplemental, special or other reserves) applicable as of a date which is
two LIBOR Business Days prior to the beginning of such Interest Period to
any member bank of the Federal Reserve System in respect of "Eurocurrency
liabilities" as defined in Regulation D (or any successor category of
liabilities under Regulation D). In the event that such rate does not
appear on Page 3750 of the Telerate Service (or otherwise on such service),
the "Eurodollar Rate" shall be determined on the basis of the rates at
which deposits in U.S. dollars are offered by four major banks (the
"Reference Banks") at or about 11:00 A.M., London time, two LIBOR Business
Days prior to the beginning of such Interest Period, to prime banks in the
interbank eurodollar market for delivery on the first day of such Interest
Period, for a period equal to such Interest Period, and in an amount
comparable to the amount of its Eurodollar Loan to be outstanding during
such Interest Period, as adjusted for reserve requirements pursuant the
previous sentence. Agent will request the principal London office of each
of the Reference Banks to provide a quotation of its
8
rate. If at least two such quotations are provided, the rate for that
Interest Period will be the arithmetic mean of the quotations.
If fewer than two quotations are provided as requested, the rate for that
Interest Period will be the arithmetic mean of the rates quoted by major
banks in New York City, selected by Agent, at approximately 11:00 A.M., New
York City time, on the date that is two LIBOR Business Days prior to the
beginning of such Interest Period for loans in U.S. dollars to leading
European banks for a period equal to such Interest Period, and in an amount
comparable to the amount of its Eurodollar Loan to be outstanding during
such Interest Period, as adjusted for reserve requirements pursuant the
above definition.
Event of Default: Any of the events specified in subsection 9.1,
provided that any requirement for the giving of notice, the lapse of time,
or both, or any other condition, has been satisfied.
Federal Funds Rate: For any day, the rate per annum equal to the
weighted average of the rates on overnight federal funds transactions, as
published by the Federal Reserve Bank of New York for such day provided
that (a) if such day is not a Business Day, the Federal Funds Rate for such
day shall be such rate on such transactions on the immediately preceding
Business Day as so published on the next succeeding Business Day, and (b)
if such rate is not so published for any day which is a Business Day, the
Federal Funds Rate for such day shall be the average of the rates quoted to
Agent by three federal funds brokers of recognized standing selected by it
on such day on such transactions.
Financing Lease: Any lease of property, real or personal, the
obligations of the lessee in respect of which are required in accordance
with GAAP to be capitalized on a balance sheet of the lessee.
First Extended Maturity Date: As defined in Section 3.17.
First Extension: The extension of the Initial Maturity Date until the
First Extended Maturity Date pursuant to Section 3.17.
Force Majeure Delay: Any cause or event which is beyond the reasonable
control and not due to the fault or negligence of Borrower, which delays,
prevents or prohibits the construction of the Improvements, including,
without limitation, acts of God or the elements, fire, strikes, labor
disputes, delays in delivery of material and disruption of shipping.
9
GAAP: Generally accepted accounting principles in the United States of
America in effect from time to time.
Garage Agreement: as defined in the definition of REA.
Governmental Authority: Any nation or government, any state or other
political subdivision thereof and any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or
pertaining to government.
Guarantied Obligations: As defined in the Payment Guaranty.
Guarantied Principal: As defined in the Payment Guaranty.
Guaranties: The collective reference to (i) the Completion Guaranty,
(ii) the Payment Guaranty and (iii) the Environmental Indemnity.
Guarantor: The Taubman Realty Group Limited Partnership, a Delaware
limited Partnership.
Guaranty Percentage: As defined in the Payment Guaranty.
Hypo: Bayerische Hypotheken-Und Wechsel-Bank Aktiengesellschaft, New
York Branch.
Improvements: The Borrower's Work to be constructed on the Leased
Premises in accordance with Borrower Construction Plans.
Indebtedness: Of any Person at any date, means, without duplication
(a) all indebtedness of such Person for borrowed money or for the deferred
purchase price of property or services (including trade obligations), (b)
all obligations of such Person as the lessee under Financing Leases, (c)
current liabilities in respect of unfunded vested benefits under any ERISA
Plan, (d) obligations under letters of credit issued for the account of
such Person, (e) obligations under bankers' or trade acceptance facilities,
(f) all guarantees of such Person of any Indebtedness or other obligation
of any other Person, (g) all endorsements (other than for collection or
deposit in the ordinary course of business) and other contingent
obligations to purchase any of the items included in this definition, to
provide funds for payment, to supply funds to invest in any Person or
otherwise to assure a creditor against loss, (h) all obligations secured by
any Lien on any property owned by such Person even though such Person has
not assumed or otherwise become liable for the payment thereof, (i) all
obligations under any agreement providing for contingent participation or
other hedging mechanisms with respect to
10
interest on any other indebtedness of such Person payable on any of the
items described above in this definition and (j) any other indebtedness of
such Person which is evidenced by a note, bond, debenture or similar
instrument.
Initial Maturity Date: October 27, 2000.
Insolvency: With respect to any Multiemployer Plan, the condition that
such ERISA Plan is insolvent within the meaning of Section 4245 of ERISA.
Insolvent: Pertaining to a condition of Insolvency.
Interest Payment Date: The first Business Day of each calendar month.
Interest Period: With respect to any Eurodollar Loan:
(i) initially, the period commencing on the borrowing or
conversion date, as the case may be, with respect to such Eurodollar
Loan and ending one, two, three or six months (to the extent funds are
available for such six-month period) thereafter, as selected by
Borrower in its notice of borrowing or notice of conversion, as the
case may be, given with respect thereto; and
(ii) thereafter, each period commencing on the last day of the
immediately preceding Interest Period applicable to such Eurodollar
Loan and ending one, two, three or six months (to the extent funds are
available for such six-month period) thereafter, as selected by
Borrower by irrevocable notice to Agent not less than three LIBOR
Business Days prior to the last day of the then current Interest
Period with respect thereto;
provided that, all of the foregoing provisions relating to Interest Periods
are subject to the following:
(A) if any Interest Period pertaining to a Eurodollar Loan would
otherwise end on a day that is not a LIBOR Business Day, such Interest
Period shall be extended to the next succeeding LIBOR Business Day
unless the result of such extension would be to carry such Interest
Period into another calendar month in which event such Interest Period
shall end on the immediately preceding LIBOR Business Day;
(B) any Interest Period that would otherwise extend beyond the
Maturity Date shall end on the Maturity Date; and
(C) any Interest Period pertaining to a Eurodollar Loan that
begins on the last LIBOR Business
11
Day of a calendar month (or on a day for which there is no numerically
corresponding day in the calendar month at the end of such Interest
Period) shall end on the last LIBOR Business Day of a calendar month.
Land: the parcel of land demised by the Agency to Borrower under the
Mall Lease.
Leased Premises: As defined in the Recitals.
Leases: All subleases, underlettings, concession agreements and
licenses of any portion of the Leased Premises, now existing or entered
into in the future to which Borrower is a party.
Legal Requirement: As to any Person, any law, treaty, rule or
regulation or determination of an arbitrator or a court or other
Governmental Authority, in each case applicable to or binding upon such
Person or any of its property or to which such Person or any of its
property is subject.
Lender or Lenders: As defined in the Preamble.
LIBOR Business Day: A day other than a Saturday, Sunday or other day
on which commercial banks in London, England are authorized or required by
law to close.
Lien: Any mortgage, pledge, hypothecation, assignment, deposit
arrangement, encumbrance, lien (statutory or other), charge or other
security interest or any preference, priority or other security agreement
or preferential arrangement of any kind or nature whatsoever (including,
without limitation, any conditional sale or other title retention agreement
and any Financing Lease having substantially the same economic effect as
any of the foregoing).
Loan: Any loan made by any Lender pursuant to this Agreement.
Loan Documents: The collective reference to this Agreement, the Notes,
the Security Documents, the Guaranties, the Environmental Indemnity and all
other documents and instruments from time to time evidencing or securing
the Loan.
Major Agreements: The collective reference to the Project Documents,
the Construction Documents and the Anchor Leases, as the same may be
amended, supplemented, modified or replaced from time to time with the
prior written consent of Agent in accordance with the terms hereof.
12
Major Leases: Any lease or sublease of space by Borrower which demises
in excess of 10,000 square feet.
Mall: As defined in the Recitals.
Mall Lease: The Deed of Ground Lease dated as of June 14, 1996 between
the Agency, as lessor, and Borrower, as lessee, as it may be amended,
supplemented or otherwise modified with Lenders' prior written approval in
accordance with subsection 6.4.
Management Agreement: any management agreement entered into by
Borrower and Manager in accordance with the terms of this Agreement, as it
may be amended, supplemented or otherwise modified from time to time with
Lenders' prior written approval in accordance with subsection 6.4.
Manager: an entity engaged by Borrower from time to time in accordance
with this Agreement to operate and lease the Mall.
Material Adverse Effect: A material adverse effect on (a) the
business, operations, property, financial condition or prospects of
Borrower or Guarantor which would materially impair Borrower's or the
Guarantor's ability to perform its obligations under this Agreement or any
of the other Loan Documents or any of the Project Documents or (b) the
validity or enforceability of any of the Loan Documents or the material
rights or remedies of the Agent or the Lenders thereunder.
Maturity Date: The Initial Maturity Date, the First Extended Maturity
Date or the Second Extended Maturity Date, whichever is applicable.
Moody's: Xxxxx'x Investors Service, Inc. and its successors.
Mortgage: The Leasehold Deed of Trust, Assignment of Leases and Rents
and Security Agreement dated as of the date of this Agreement made by
Borrower to the trustee named therein for the benefit of Agent, as it may
be amended, supplemented or otherwise modified from time to time.
Multiemployer Plan: An ERISA Plan which is a multiemployer plan as
defined in Section 4001(a)(3) of ERISA.
Negative Rating Condition: At any time, (a) the Guarantied Obligations
of the Loan is above zero and (b) the Guarantor has a long-term senior
unsecured debt rating of below BBB- by S&P and below Baa3 by Moodys.
13
provided that if S&P and/or Moody's shall cease to issue ratings of debt
securities of Guarantor, then the Agent and the Borrower shall negotiate in
good faith to agree upon a substitute rating agency or agencies (and to
correlate the system of ratings of each substitute rating agency with that
of the rating agency for which it is substituting) and (a) until such
substitute rating agency or agencies are agreed upon, the existence of the
Negative Rating Condition shall be determined on the basis of the rating
assigned by the other rating agency (or, if both S&P and Moody's shall have
so ceased to issue such ratings, on the basis of the rating in effect
immediately prior thereto) and (b) after such substitute rating agency or
agencies are agreed upon, the existence of the Negative Rating Condition
shall be determined on the basis of the rating assigned by the other rating
agency and such substitute rating agency or the two substitute rating
agencies, as the case may be.
Non-Excluded Taxes: As defined in subsection 3.14.
Non-Guarantied Principal: As defined in the Payment Guaranty.
Nordstrom: Nordstrom, Inc., a Washington corporation.
Nordstrom Improvements: The improvements constituting a retail
department store containing approximately 160,000 square feet of space to
be constructed on the Nordstrom Site and to be operated by Nordstrom.
Nordstrom's Lease: The Lease dated as of November 22, 1996 between
Nordstrom and the Agency for the occupancy of the Nordstrom Site and
improvements.
Nordstrom's Supplement: The Supplemental Agreement dated as of
November 22, 1996 by and between Borrower and Nordstrom.
Note or Notes: The collective reference to the Notes dated as of the
date of this Agreement made by Borrower to the order of each Lender, as the
same may be amended, supplemented, modified, extended, restated or replaced
from time to time (including, without limitation, any new or replacement
notes issued to any Lender pursuant to subsection 10.11(d) of this
Agreement).
NPA: Norfolk Place Associates, L.P., a Virginia limited partnership.
Outside Completion Date: February 15, 2000 subject to extension for
Force Majeure delays, but in no event later than March 10, 2000.
Participants: As defined in subsection 10.11(a).
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Partnership Agreement: The Agreement of Limited Partnership of
Borrower dated as of May 11, 1995, as it may be amended, supplemented or
otherwise modified from time to time in accordance with Section 6.4(b).
Payment Guaranty: The Payment Guaranty dated as of the date of this
Agreement, as the same may be amended, supplemented or otherwise modified
from time to time.
PBGC: The Pension Benefit Guaranty Corporation established pursuant to
Subtitle A of Title IV of ERISA.
Permits: All consents, licenses and building permits required for
construction, completion, occupancy and operation of the Improvements in
accordance with all Legal Requirements affecting the Project.
Permitted Encumbrances: As defined in the Mortgage.
Permitted Exceptions: As defined in the Mortgage.
Person: An individual, partnership, limited liability company,
corporation, business trust, joint stock company, trust, unincorporated
association, joint venture, Governmental Authority or other entity of
whatever nature.
Plans: The collective reference to the Agency Construction Plans and
Borrower Construction Plans, as such plans and specifications may be
amended, supplemented or otherwise modified from time to time in accordance
with subsections 6.2 and 6.3.
Prime Rate: The rate of interest publicly announced by Agent's New
York Branch in New York, New York from time to time as its prime commercial
lending rate. The prime commercial lending rate is not intended to be the
lowest rate of interest charged by such Branch in connection with the
extension of credit to debtors.
Prime Rate Loans: Loans the rate of interest applicable to which is
based upon the Prime Rate.
Project: The collective reference to the Land and the Improvements.
Project Agreement: The Land Disposition and Development Contract dated
May 31, 1994 between the Agency and NPA as assigned by NPA to Borrower
pursuant to an Assignment and Assumption Agreement dated May 11, 1995 and
as amended by a First Amendment dated as of May 8, 1995, a Second Amendment
dated November 13, 1995 and a Third Amendment dated March 11, 1996 and as
it may be further amended, supplemented or otherwise modified from time to
time in accordance with subsection 6.4.
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Project Documents: The collective reference to the Agency Documents
and the Borrower Documents.
REA: The collective reference to (i) the Construction, Operation and
Reciprocal Easement Agreement dated as of November 22, 1996 by and among
Borrower, Nordstrom, Dillards and the Agency and (ii) the Parking
Development, Operation and Maintenance Agreement (the "Garage Agreement")
dated as of June 14, 1996 by and among the City, the Agency, Borrower,
Nordstrom and Dillards, as each may be further amended, supplemented or
otherwise modified from time to time in accordance with subsection 6.4.
Regal Lease: That certain Lease dated February 12, 1997 between
Borrower and Regal Cinema, Inc, as it may be amended, supplemented or
otherwise modified from time to time.
Register: As defined in subsection 10.11(c).
Reorganization: With respect to any Multiemployer Plan, the condition
that such plan is in reorganization within the meaning of Section 4241 of
ERISA.
Reportable Event: Any of the events set forth in Section 4043(b) of
ERISA, other than those events as to which the thirty day notice period is
waived under subsections .13, .14, .16, .18, .19 or .20 of PBGC Reg. ss.
2615.
Required Lenders: At any time, Lenders the Commitment Percentages of
which aggregate at least 66 2/3%.
Rents: All rights of Borrower in respect of cash and securities
deposited under any Lease and the right to receive and collect the
revenues, income, rents, issues and profits of any Lease.
Responsible Officer: Shire Xxxxxxxx, Xxxxx Xxxxxx, Xxxxxxx XxXxxxx or
Xxxx Xxxxxxxxx or such other individual as shall be named by a Responsible
Officer by notice to Agent.
S&P: Standard & Poor's Ratings Group and its successors.
Second Extension: The extension of the First Extended Maturity Date
until the Second Extended Maturity Date pursuant to Section 3.17.
Second Extension Period: As defined in Section 3.17.
Security Agreement: The Security Agreement and Assignment of Contracts
made by Borrower to Agent dated as
16
of the date of this Agreement as it may be amended, supplemented or
otherwise modified from time to time.
Security Documents: The collective reference to the Mortgage, the
Assignment of Leases, the Security Agreement and all other documents from
time to time entered into or consented to by Borrower which secure the
repayment of the Notes.
Single Employer Plan: Any ERISA Plan which is covered by Title IV of
ERISA, but which is not a Multiemployer Plan.
Solvency Certificate: A certificate substantially in the form of
Exhibit D.
Solvent: means, when used with respect to any Person, that (1) the
fair value of the property of such Person, on a going concern basis, is
greater than the total amount of liabilities (including, without
limitation, contingent liabilities) of such Person; (2) the present fair
saleable value of the assets of such Person, on a going concern basis, is
not less than the amount that will be required to pay the probable
liabilities of such Person on its debts as they become absolute and
matured; (3) such Person does not intend to, and does not believe that it
will, incur debts or liabilities beyond such Person's ability to pay as
such debts and liabilities mature; (4) such Person is not engaged in
business or a transaction, and is not about to engage in business or a
transaction, for which such Person's property would constitute unreasonably
small capital after giving due consideration to the prevailing practice in
the industry in which such Person is engaged; and (5) such Person has
sufficient resources, provided that such resources are prudently utilized,
to satisfy all of such Person's obligations. Contingent liabilities will be
computed at the amount that, in light of all the facts and circumstances
existing at such time, represents the amount that can reasonably be
expected to become an actual or matured liability.
Termination Date: the date that is six months after the Outside
Completion Date.
Title Company: Lawyers Title Insurance Company, or such other title
company as may be approved in writing by Agent.
Tranche: The collective reference to Eurodollar Loans the then current
Interest Periods with respect to all of which begin on the same date and
end on the same later date (whether or not such Loans shall originally have
been made on the same day); Tranches may be identified as "Eurodollar
Tranches".
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Transferee: As defined in subsection 11.8(f).
Trust Property: As defined in the Mortgage.
Type: As to any Loan, its nature as a Prime Rate Loan or a Eurodollar
Loan.
Unincorporated Materials: Materials purchased or manufactured for
incorporation in the Improvements but, at the time an advance under the
Loan is made to pay the cost therefor, not yet incorporated in the
Improvements.
1.2 Other Definitional Provisions. (a) Unless otherwise specified
therein, all terms defined in this Agreement shall have the defined meanings
when used in the Notes or any certificate or other document made or delivered
pursuant hereto.
(b) As used herein and in the Notes, and any certificate or other
document made or delivered pursuant hereto, accounting terms relating to
Borrower not defined in subsection 1.1 and accounting terms partly defined in
subsection 1.1, to the extent not defined, shall have the respective meanings
given to them under GAAP.
(c) The words "hereof", "herein" and "hereunder" and words of similar
import when used in this Agreement shall refer to this Agreement as a whole and
not to any particular provision of this Agreement, and Section, subsection,
Schedule and Exhibit references are to this Agreement unless otherwise
specified.
(d) The meanings given to terms defined herein shall be equally
applicable to both the singular and plural forms of such terms.
SECTION 2. AMOUNT AND TERMS OF COMMITMENTS
-------------------------------
2.1 Agreement to Lend and to Borrow; Notes. (a) Subject to the
conditions and upon the terms provided for in this Agreement, each Lender
severally agrees to make loans to Borrower in an aggregate principal amount not
to exceed the amount of the Commitment of such Lender, but only during the
Commitment Period. The Loans may from time to time be (a) Eurodollar Loans, (b)
Prime Rate Loans or (c) a combination thereof, as determined by Borrower and
notified to Agent in accordance with subsection 3.1.
(b) The Loans made by each Lender shall be evidenced by a Note of
Borrower, substantially in the form of Exhibit B, with appropriate insertions
therein as to payee, date and principal amount, payable to the order of such
Lender. Each Lender is hereby authorized to record the date and amount of each
advance and payment or prepayment of principal of its Loan, each continuation
thereof, each conversion of all or a portion thereof to another Type and, in the
case of Eurodollar Loans, the length
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of each Interest Period with respect thereto, on the schedule annexed to and
constituting a part of its Note, and any such recordation shall constitute prima
facie evidence of the accuracy of the information so recorded. The Note of each
Lender shall (a) be dated the date hereof, (b) be stated to mature on the
Maturity Date and (c) provide for the payment of interest in accordance with
subsection 3.8.
2.2 Determination of Amounts of Loan Advances.
(a) Disbursements for costs of constructing and equipping the
Improvements included in the Budget, shall be made as such costs are incurred;
the amount of the costs which have been incurred shall be determined by the
Agent, in its reasonable discretion, based upon certifications of Borrower, the
Construction Manager and the Consulting Professional and such other evidence as
may be reasonably required by the Agent, less the amount which Borrower retains
under the relevant construction contracts. Upon final completion of the work
performed by any contractor or subcontractor substantially in accordance with
the Plans, as certified to Agent by the Construction Manager and confirmed by
the Consulting Professional, Agent shall release that portion of the retention
allocated to the work performed by such contractor or subcontractor in
accordance with the Budget, provided that Agent shall have received a final lien
waiver and sworn statement from such contractor or subcontractor.
(b) The Lenders, upon instruction by the Agent, shall advance from
time to time portions of the Loans to pay costs of Unincorporated Materials;
provided, that, in no event shall the outstanding amount of the Loans disbursed
to pay the costs of Unincorporated Materials at any one time exceed the sum of
$3,500,000. Any such advances shall be made subject to satisfaction of all other
conditions of this Agreement applicable to advances of the Loan and each of the
following conditions:
(1) the Unincorporated Materials, whether stored on or off the
Leased Premises, shall be secured, segregated and identifiable in a
manner reasonably satisfactory to the Agent;
(2) the Agent shall be given the complete address of the place of
storage of any Unincorporated Materials stored off the Land and the
Consulting Professional shall be allowed access at reasonable times to
inspect such Unincorporated Materials;
(3) the Agent shall be provided with insurance with respect to
the Unincorporated Materials of kinds, in form and amount and written
by insurers satisfactory to the Agent and covering the Agent as an
insured;
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(4) except as provided in clause (8) below, the Agent shall have
received evidence satisfactory to it that Borrower has good title to
the Unincorporated Materials, free from any lien or encumbrances, upon
payment therefor;
(5) the Agent shall have received copies of any documents of
title and warehouse receipts that evidence title to the Unincorporated
Materials;
(6) the Agent shall have received such documents and instruments,
including, without limitation, financing statements, security
agreements, consents of manufacturers, vendors, warehousemen and
bailees, as the Agent may reasonably require to evidence or perfect
the Agent's lien on the Unincorporated Materials;
(7) upon request by Agent, the Agent shall have received evidence
satisfactory to it that all specially fabricated Unincorporated
Materials have been fabricated in accordance with the Plans; and
(8) if the Agent advances amounts to pay contract deposits for
Unincorporated Materials, and title has not passed to Borrower, the
Agent shall have received a first, perfected, enforceable security
interest in Borrower's rights in the contract for the purchase of such
materials and any sums payable or refundable to Borrower thereunder,
and, if requested by the Agent, the contract vendor shall have
consented to such assignment and agreed to perform its obligations
under such contract for the benefit of the Agent.
2.3 Budget Evaluation. If at any time Agent, after reallocation of any
amounts under subsection 2.4, reasonably determines after consultation with
Borrower that the portion of the Available Commitment allocated to any line item
of the Budget is not sufficient to pay the cost of completing such line item,
except, so long as no Event of Default is continuing, the line item for
interest, (any such deficiency, a "Budget Deficit"), Borrower shall be required
to pay costs of such line item or items as to which the Budget Deficit exists
with funds from some other source (including the contingency line item) before
Lenders advance proceeds of the Loans to pay such costs and upon such payment by
Borrower, such Budget Deficit shall be remedied.
2.4 Budget Reallocation and Adjustments. If at any time the Available
Commitment allocated to any line item shown on the Budget exceeds the amount
necessary for such line item, then Borrower, with the approval of Agent, which
approval shall not be unreasonably withheld or delayed, may allocate the amount
of such excess to any other line item shown on the Budget that Agent deems to be
insufficient, or if no other line item is insufficient Borrower may reallocate
the amount of such excess to
20
any other line item shown on the Budget (including contingency), provided,
however, such reallocation shall require Agent's prior approval, such approval
not to be unreasonably withheld and which approval shall not be required if the
aggregate amount of such reallocation is for an amount less then $5,000,000.
2.5 Use of Proceeds. The proceeds of the Loans shall be used by
Borrower only for payment of costs specified in the Budget.
SECTION 3. BORROWING PROCEDURES
--------------------
3.1 Procedure for Borrowing. Borrower shall give Agent irrevocable
notice (which notice must be received by Agent prior to 10:00 A.M., New York
City time, seven Business Days prior to the Borrowing Date (which date shall be
prior to the Termination Date) requesting that Lenders make loans on the
Borrowing Date and specifying (i) the amount to be borrowed, (ii) whether the
Loans are to be initially Eurodollar Loans, Prime Rate Loans, or a combination
thereof, and (iii) if the Loans are to be entirely or partly Eurodollar Loans,
the respective amounts of each such Type of Loan and the respective lengths of
the initial Interest Periods therefor. Upon receipt of such notice Agent shall
promptly notify each Lender thereof. Provided all conditions to an advance of
the Loan proceeds have been satisfied or otherwise waived by Agent in accordance
with the terms hereof, Lenders shall deposit in an account designated by
Borrower for transmittal upon Borrower's order, in immediately available funds,
the amount of the advance then requested. Upon the occurrence and during the
continuance of an Event of Default, at Agent's option, Lenders may advance funds
by payment directly to the third party to whom an amount is payable and Agent
shall provide Borrower with notice promptly after such advance is made. The
execution of this Agreement by Borrower constitutes an irrevocable authorization
to Lenders to advance Loan proceeds as provided in this subsection. No further
authorization shall be necessary to warrant such direct advances. All sums
advanced by direct payment to third parties shall reduce the Available
Commitment, shall be evidenced by the Notes and shall be secured by the Security
Documents. Lenders shall have no obligation to make advances of the Loan
proceeds more often than once in each calendar month. Lenders shall have no
obligation to see to the disposition of any direct payments to any contractor or
other Person.
3.2 First Advance and Subsequent Advances. The first advance of Loan
proceeds shall be made upon satisfaction of all conditions specified in Section
7 of this Agreement. All advances after the first advance shall be made upon
satisfaction of all conditions specified in Section 8 of this Agreement.
21
3.3 Waivers of Conditions. (a) Agent, in its sole discretion may, but
shall have no obligation to, waive any requirements imposed on Borrower for
giving notice of borrowing.
(b) If any or all conditions precedent to an advance of Loan proceeds
have not been satisfied on any Borrowing Date, Agent, in its sole discretion,
may, but shall have no obligation to, waive such conditions and disburse all or
a part of the requested advance subject however, to the provisions of Section
11.4 hereof. No person dealing with Borrower, directly or indirectly, shall have
standing to object to such waiver. Such waivers and advances pursuant to such
waivers shall be deemed made pursuant to this Agreement and not in modification
of this Agreement.
3.4 Advances to Pay Interest. (a) Included in the Budget are amounts
allocated to pay interest on the Loans. Subject to the conditions set forth
below, Borrower shall request advances to be made on each Interest Payment Date
for the purpose of paying the interest due or to become due at such time, in
which event Lenders shall be authorized and are hereby directed to disburse the
amount of such interest by crediting the bank account maintained by Borrower
with Agent. No separate fund or account shall be created for such interest. In
no event shall Lenders be obligated to make any advance if the request for such
advance does not contain a direction to pay interest on the Loans due at the
time of such advance unless Borrower has paid interest to Lenders directly from
a source other than the Loan proceeds. Any such request for an advance of
interest shall be accompanied by a direction by Borrower to Lenders to charge
such bank account for the amount of such interest then due and advanced to
Borrower by Lenders. Notwithstanding the foregoing, Borrower hereby requests
Lenders to make advances to pay such interest on the day when each interest
payment is due in the amount of interest then due, by crediting such amount to
the bank account maintained by Borrower with Agent and charging such account for
such interest. Lenders may comply with the foregoing request at any time,
notwithstanding any failure by Borrower to make a more specific request.
(b) Agent, in its discretion, may refuse to advance for the payment of
interest at such time and so long as either a Default or an Event of Default has
occurred and is continuing. If Agent determines not to advance for the payment
of interest for such reason, Agent shall so notify Borrower and Borrower shall
be obligated to pay all interest becoming due on the Loans after such notice
from a source other than Loan proceeds, in the manner and at the times provided
in the Notes, provided that if Agent is stayed or otherwise prohibited from
providing such notice, Borrower shall nevertheless be liable for all interest
becoming due.
3.5 Optional Prepayments. Borrower may at any time and from time to
time prepay the Loans, in whole or in part,
22
without premium or penalty, provided that (a) Borrower shall have given at least
four Business Days' prior notice to Agent, specifying the date and amount of
prepayment and whether the prepayment is of Eurodollar Loans, Prime Rate Loans
or a combination thereof, and, if of a combination thereof, the amount allocable
to each, (b) all accrued and unpaid interest to the date of such prepayment on
the amount being prepaid is then paid and (c) any amounts payable pursuant to
subsection 3.15 are then paid. Upon receipt of any such notice Agent shall
promptly notify each Lender thereof. Amounts prepaid on account of the Loans may
not be reborrowed. Partial prepayments shall be in an aggregate principal amount
of $100,000 or a whole multiple thereof.
3.6 Conversion and Continuation Options. (a) Borrower may elect from
time to time to convert Eurodollar Loans to Prime Rate Loans by giving Agent
irrevocable notice no later than 11:00 A.M. at least three LIBOR Business Days
prior to such requested conversion, provided that any such conversion of
Eurodollar Loans may only be made on the last day of an Interest Period with
respect thereto. Borrower may elect from time to time to convert Prime Rate
Loans to Eurodollar Loans by giving Agent irrevocable notice no later than 11:00
A.M. at least three LIBOR Business Days prior to such requested conversion. Any
such notice of conversion to Eurodollar Loans shall specify the length of the
initial Interest Period or Interest Periods therefor. Upon receipt of any such
notice Agent shall promptly notify each Lender thereof. All or any part of
outstanding Eurodollar Loans and Prime Rate Loans may be converted as provided
herein, provided that (i) no Loan may be converted into a Eurodollar Loan when
any Event of Default has occurred and is continuing and Agent has determined
that such a conversion is not appropriate and (ii) no Loan may be converted into
a Eurodollar Loan after the date that is one month prior to the Maturity Date.
(b) Any Eurodollar Loans may be continued as such upon the expiration
of the then current Interest Period with respect thereto by Borrower giving
notice to Agent, in accordance with the applicable provisions of the term
"Interest Period" set forth in subsection 1.1, of the length of the next
Interest Period to be applicable to such Loans, provided that no Eurodollar Loan
may be continued as such (i) when any Event of Default has occurred and is
continuing and Agent has determined that such a continuation is not appropriate
or (ii) after the date that is one month prior to the Maturity Date and
provided, further, that if Borrower shall fail to give any required notice as
described above in this paragraph or if such continuation is not permitted
pursuant to the preceding proviso such Loans shall be automatically converted,
at Agent's election, to Prime Rate Loans or one-month Eurodollar Loans on the
last day of such then expiring Interest Period.
3.7 Minimum Amounts of Tranches; Maximum Number of Tranches. All
borrowings, conversions and continuations of Loans
23
hereunder and all selections of Interest Periods hereunder shall be in such
amounts and be made pursuant to such elections so that, after giving effect
thereto, the aggregate principal amount of the Loans comprising each Eurodollar
Tranche shall be at least equal to $1,000,000. No more than five Eurodollar
Tranches in the aggregate may be outstanding at any time under this Agreement
and the Notes.
3.8 Interest Rates and Payment Dates. (a) Each Eurodollar Loan shall
bear interest for each day during each Interest Period with respect thereto at a
rate per annum equal to the Eurodollar Rate determined for such day plus the
Applicable Margin.
(b) Each Prime Rate Loan shall bear interest at a rate per annum equal
to the Prime Rate plus the Applicable Margin.
(c) If all or a portion of (i) the principal amount of any Loan, (ii)
any interest payable thereon or (iii) any fee or other amount payable hereunder
shall not be paid when due (whether at the stated maturity, by acceleration or
otherwise), such overdue amount shall bear interest at a rate per annum which is
(x) in the case of overdue principal, the rate that would otherwise be
applicable thereto pursuant to the foregoing provisions of this subsection plus
4% or (y) in the case of overdue interest, fee or other amount, the rate
described in paragraph (b) of this subsection plus 4%, in each case from the
date of such non-payment until such amount is paid in full (as well after as
before judgment); provided, however, that in the case of overdue interest, the
rate described in clause (y) shall not apply if such interest is paid within
three Business Days after written notice to Borrower.
(d) Interest shall be payable in arrears on each Interest Payment
Date, provided that interest accruing pursuant to paragraph (c) of this
subsection shall be payable from time to time on demand.
3.9 Computation of Interest and Fees. (a) Fees and interest shall be
calculated on the basis of a 360-day year for the actual days elapsed. Agent
shall as soon as practicable notify Borrower and Lenders of each determination
of a Eurodollar Rate. Any change in the interest rate on a Loan resulting from a
change in the Prime Rate, or the Eurocurrency Reserve Requirements, shall become
effective as of the opening of business on the day on which such change becomes
effective. Agent shall as soon as practicable notify Borrower and Lenders of the
effective date and the amount of each such change in interest rate.
(b) Each determination of an interest rate by Agent pursuant to any
provision of this Agreement shall be conclusive and binding on Borrower in the
absence of manifest error. Agent shall, at the request of Borrower, deliver to
Borrower a
24
statement showing the quotations used by Agent in determining any interest rate
pursuant to subsection 3.9(a).
3.10 Inability to Determine Interest Rate. If prior to the first day
of any Interest Period:
(a) Agent shall have determined (which determination shall be
conclusive and binding upon Borrower) that, by reason of circumstances
affecting the relevant market, adequate and reasonable means do not exist
for ascertaining the Eurodollar Rate for such Interest Period, or
(b) Agent shall have received notice from the Required Lenders that
the Eurodollar Rate determined or to be determined for such Interest Period
will not adequately and fairly reflect the cost to such Lenders of making
or maintaining their affected Loans during such Interest Period,
Agent shall give telecopy or telephonic notice thereof to Borrower and Lenders
as soon as practicable thereafter. If such notice is given (x) any Eurodollar
Loans requested to be made on the first day of such Interest Period shall be
made as Prime Rate Loans, (y) any Loans that were to have been converted on the
first day of such Interest Period to Eurodollar Loans shall be converted to or
continued as Prime Rate Loans and (z) any outstanding Eurodollar Loans shall be
converted, on the first day of such Interest Period, to Prime Rate Loans. Until
such notice has been withdrawn by Agent, no further Eurodollar Loans shall be
made or continued as such, nor shall Borrower have the right to convert Loans to
Eurodollar Loans.
3.11 Pro Rata Treatment and Payments. (a) Each borrowing by Borrower
from the Lenders hereunder, each payment by Borrower on account of any fees
hereunder shall be made pro rata according to the respective Commitment
Percentages of the Lenders. Each payment (including each prepayment) by Borrower
on account of principal of and interest on the Loans shall be made pro rata
according to the respective outstanding principal amounts of the Loans then held
by Lenders. All payments (including prepayments) to be made by Borrower
hereunder and under the Notes, whether on account of principal, interest, fees
or otherwise, shall be made without set off or counterclaim and shall be made
prior to 12:00 Noon, New York City time, on the due date thereof to Agent, for
the account of Lenders, at Agent's office specified in subsection 11.3, in
Dollars and in immediately available funds. Agent shall distribute such payments
to Lenders promptly upon receipt in like funds as received. If any payment
hereunder (other than payments on the Eurodollar Loans) becomes due and payable
on a day other than a Business Day, such payment shall be extended to the next
succeeding Business Day, and, with respect to payments of principal, interest
thereon shall be payable at the then applicable rate during such extension. If
any payment on a
25
Eurodollar Loan becomes due and payable on a day other than a LIBOR Business
Day, the maturity thereof shall be extended to the next succeeding LIBOR
Business Day unless the result of such extension would be to extend such payment
into another calendar month, in which event such payment shall be made on the
immediately preceding LIBOR Business Day.
(b) Unless Agent shall have been notified in writing by any Lender
prior to a borrowing that such Lender will not make the amount that would
constitute its Commitment Percentage of such borrowing available to Agent, Agent
may assume that such Lender is making such amount available to Agent, and Agent
may (but shall be under no obligation), in reliance upon such assumption, make
available to Borrower a corresponding amount. If such amount is not made
available to Agent by the required time on the Borrowing Date therefor, such
Lender shall pay to Agent, on demand, such amount with interest thereon at a
rate equal to the daily Federal Funds Rate for the period until such Lender
makes such amount immediately available to Agent. A certificate of Agent
submitted to any Lender with respect to any amounts owing under this subsection
shall be conclusive in the absence of manifest error. If such Lender's
Commitment Percentage of such borrowing is not made available to Agent by such
Lender within three Business Days of such Borrowing Date, Agent shall also be
entitled to recover such amount with interest thereon at the rate per annum
applicable to Prime Rate Loans hereunder, on demand, from Borrower, provided
that (i) the foregoing shall not impair any of Borrower's rights or remedies
against such Lender and (ii) Agent shall promptly notify such Lender that it has
defaulted under this Agreement.
3.12 Illegality. Notwithstanding any other provision herein, if the
adoption of or any change in any Legal Requirement or in the interpretation or
application thereof shall make it unlawful for any Lender to make or maintain
Eurodollar Loans as contemplated by this Agreement, (a) the commitment of such
Lender hereunder to make Eurodollar Loans, continue Eurodollar Loans as such and
convert Prime Rate Loans to Eurodollar Loans shall forthwith be cancelled and
(b) such Lender's Loans then outstanding as Eurodollar Loans, if any, shall be
converted automatically to Prime Rate Loans on the respective last days of the
then current Interest Periods with respect to such Loans or within such earlier
period as required by law. If any such conversion of a Eurodollar Loan occurs on
a day which is not the last day of the then current Interest Period with respect
thereto, Borrower shall pay to such Lender such amounts, if any, as may be
required pursuant to subsection 3.15.
3.13 Legal Requirements. (a) If the adoption of or any change in any
Legal Requirement or in the interpretation or application thereof or compliance
by any Lender with any request or directive (whether or not having the force of
law) from any central bank or other Governmental Authority, in any such case
made subsequent to the date hereof:
26
(i) shall subject any Lender to any tax of any kind whatsoever with
respect to this Agreement, any Note or any Eurodollar Loan made by it, or
change the basis of taxation of payments to such Lender in respect thereof
(except for Non-Excluded Taxes covered by subsection 3.15 and changes in
the rate of tax on the overall net income of such Lender);
(ii) shall impose, modify or hold applicable any reserve, special
deposit, compulsory loan or similar requirement against assets held by,
deposits or other liabilities in or for the account of, advances, loans or
other extensions of credit by, or any other acquisition of funds by, any
office of such Lender which is not otherwise included in the determination
of the Eurodollar Rate; or
(iii) shall impose on such Lender any other condition;
and the result of any of the foregoing is to increase the cost to such Lender,
by an amount which such Lender deems to be material, of making, converting into,
continuing or maintaining Eurodollar Loans or to reduce any amount receivable
hereunder in respect thereof, then, in any such case, Borrower shall promptly
pay such Lender, upon its demand, any additional amounts necessary to compensate
such Lender for such increased cost or reduced amount receivable. If any Lender
becomes entitled to claim any additional amounts pursuant to this subsection, it
shall promptly notify Borrower after it becomes aware of such increased costs,
through Agent, of the event by reason of which it has become so entitled. A
certificate as to any additional amounts payable pursuant to this subsection
submitted by such Lender, through Agent, to Borrower shall be conclusive in the
absence of manifest error. No Lender shall be entitled to any compensation
pursuant to this Section relating to any period more than 90 days prior to the
date notice thereof is given to Borrower by such Lender.
(b) If any Lender shall have determined that any change in any Legal
Requirement regarding capital adequacy or in the interpretation or application
thereof or compliance by such Lender or any corporation controlling such Lender
with any request or directive regarding capital adequacy (whether or not having
the force of law) from any Governmental Authority, in any such case made
subsequent to the date hereof, does or shall have the effect of reducing the
rate of return on such Lender's or such corporation's capital as a consequence
of its obligations hereunder to a level below that which such Lender or such
corporation could have achieved but for such change or compliance (taking into
consideration such Lender's or such corporation's policies with respect to
capital adequacy) by an amount deemed by such Lender to be material, then from
time to time, after submission by such Lender to Borrower (with a copy to Agent)
of a written request therefor, Borrower shall pay to such Lender such additional
amount or amounts as will compensate such Lender for such reduction.
27
(c) If, subsequent to the date of this Agreement, any Lender obtains
actual knowledge of any increased costs or losses of yield as described above or
any indemnified Non-Excluded Taxes described in subsection 3.14(a) below
(collectively, "Indemnified Losses"), Agent, on behalf of such Lender, shall
promptly notify Borrower thereof, and Lenders agree to use reasonable efforts
(without incurring material costs and without undertaking to restructure or
reallocate any assets other than the Loans) to minimize any Indemnified Losses.
Notwithstanding any provision to the contrary in this subsection or subsection
3.15, Borrower shall not be required to reimburse or indemnify Lenders for any
Indemnified Losses to the extent any such Indemnified Losses are incurred or
attributable to the period ending 90 days after Borrower's receipt of notice of
such Indemnified Losses, provided such Indemnified Losses shall not apply
retroactively and Borrower shall prepay the Loans pursuant to subsection 3.5
hereof within such 90-day period (such prepayment to be made at Borrower's sole
option).
3.14 Taxes. (a) All payments made by Borrower under this Agreement and
the Notes shall be made free and clear of, and without deduction or withholding
for or on account of, any present or future stamp or other taxes, levies,
imposts, duties, charges, fees, deductions or withholdings, now or hereafter
imposed, levied, collected, withheld or assessed by any Governmental Authority,
excluding income taxes and franchise taxes (imposed in lieu of or in addition to
income taxes) imposed on Agent or any Lender as a result of a present or former
connection between Agent or such Lender and the jurisdiction of the Governmental
Authority imposing such tax or any political subdivision or taxing authority
thereof or therein. If any such non-excluded taxes, levies, imposts, duties,
charges, fees, deductions or withholdings ("Non-Excluded Taxes") are required to
be withheld from any amounts payable to Agent or any Lender hereunder or under
the Notes, the amounts so payable to Agent or such Lender shall be increased to
the extent necessary to yield to Agent or such Lender (after payment of all
Non-Excluded Taxes) interest or any such other amounts payable hereunder at the
rates or in the amounts specified in this Agreement and the Notes, provided,
however, that Borrower shall not be required to increase any such amounts
payable to any Lender that is not organized under the laws of the United States
of America or a state thereof if such Lender fails to comply with the
requirements of paragraph (b) of this subsection. Whenever any Non-Excluded
Taxes are payable by Borrower, as promptly as possible thereafter Borrower shall
send to Agent for its own account or for the account of such Lender, as the case
may be, a certified copy of an original official receipt received by Borrower
showing payment thereof. If Borrower fails to pay any Non-Excluded Taxes when
due to the appropriate taxing authority or fails to remit to Agent the required
receipts or other required documentary evidence, Borrower shall indemnify Agent
and Lenders for any incremental taxes, interest or penalties that may become
payable by Agent or any Lender as a result of any such
28
failure. Any Lender making a claim against Borrower for the payment of
Non-Excluded Taxes under this Section shall provide prompt notice to Borrower
that such taxes are due. Notwithstanding anything contained herein to the
contrary, Borrower shall not be responsible for the payment of any Taxes
incurred more than 90 days prior to Borrower's receipt of such notice.
(b) Each Lender that is not incorporated under the laws of the United
States of America or a state thereof shall:
(i) deliver to Borrower and Agent (A) two duly completed copies of
United States Internal Revenue Service Form 1001 or 4224, or successor
applicable form, as the case may be, and (B) an Internal Revenue Service
Form W-8 or W-9, or successor applicable form, as the case may be;
(ii) deliver to Borrower and Agent two further copies of any such form
or certification on or before the date that any such form or certification
expires or becomes obsolete and after the occurrence of any event requiring
a change in the most recent form previously delivered by it to Borrower;
and
(iii) obtain such extensions of time for filing and complete such
forms or certifications as may reasonably be requested by Borrower or
Agent;
unless in any such case an event (including, without limitation, any change in
treaty, law or regulation) has occurred prior to the date on which any such
delivery would otherwise be required which renders all such forms inapplicable
or which would prevent such Lender from duly completing and delivering any such
form with respect to it and such Lender so advises Borrower and Agent. Such
Lender shall certify (i) in the case of a Form 1001 or 4224, that it is entitled
to receive payments under this Agreement without deduction or withholding of any
United States federal income taxes and (ii) in the case of a Form W-8 or W-9,
that it is entitled to an exemption from United States backup withholding tax.
Each Person that shall become a Transferee pursuant to Section 10.11 shall, upon
the effectiveness of the related transfer, be required to provide all of the
forms and statements required pursuant to this subsection, provided that in the
case of a Participant such Participant shall furnish all such required forms and
statements to the Lender from which the related participation shall have been
purchased.
3.15 Indemnity. Borrower agrees to indemnify each Lender and to hold
each Lender harmless from any loss or expense which such Lender may sustain or
incur as a consequence of (a) default by Borrower in making a borrowing of,
conversion into or continuation of Eurodollar Loans after Borrower has given a
notice requesting the same in accordance with the provisions of this Agreement,
(b) failure by Borrower in making any prepayment
29
after Borrower has given a notice thereof in accordance with the provisions of
this Agreement or (c) the making of a prepayment of Eurodollar Loans on a day
which is not the last day of an Interest Period with respect thereto. Such
indemnification may include an amount equal to the excess, if any, of (i) the
amount of interest which would have accrued on the amount so prepaid, or not so
borrowed, converted or continued, for the period from the date of such
prepayment or of such failure to borrow, convert or continue to the last day of
such Interest Period (or, in the case of a failure to borrow, convert or
continue, the Interest Period that would have commenced on the date of such
failure) in each case at the applicable rate of interest for such Loans provided
for herein (excluding, however, the Applicable Margin included therein, if any)
over (ii) the amount of interest (as reasonably determined by such Lender) which
would have accrued to such Lender on such amount by placing such amount on
deposit for a comparable period with leading banks in the interbank eurodollar
market.
3.16 Substitution of Lenders. (a) If any Lender (an "Affected Bank")
(i) makes demand upon Borrower for (or if Borrower is otherwise required to pay)
amounts pursuant to Section 3.13 (any such amounts referred to as "Additional
Costs") or (ii) is unable to make or maintain a Eurodollar Loan as a result of a
condition described in Section 3.12, or (iii) defaults in its obligations to
make Advances in accordance with the terms of this Agreement, Borrower may,
within 90 days of receipt of such demand or notice (or the occurrence of such
other event causing Borrower to be required to pay Additional Costs or causing
said Section 3.12 to be applicable) or the occurrence of such default, as the
case may be, give notice (a "Replacement Notice") to Agent (which will promptly
forward a copy of such notice to each Lender) of Borrower's intention either (x)
to prepay in full the Affected Bank's Note and to terminate the Affected Bank's
entire Commitment or (y) to replace the Affected Bank with another financial
institution (the "Replacement Bank") designated in such Replacement Notice.
In the event Borrower gives the notice provided for in clause (x) above,
and if the Affected Bank shall not agree within 30 days of its receipt thereof
to waive the payment of the Additional Costs in question or the effect of the
circumstances described in Section 3.12 or if the Affected Bank shall not cure
such default within five days of its receipt thereof, then, so long as no
Default or Event of Default shall exist, Borrower may (notwithstanding the
provisions of Section 3.11) terminate the Affected Bank's entire Commitment,
provided that in connection therewith it pays to the Affected Bank all
outstanding principal and accrued and unpaid interest under the Affected Bank's
Note, together with all other amounts, if any, due from Borrower to the Affected
Bank, including all amounts properly demanded and unreimbursed under Sections
3.5 and all Additional Costs.
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In the event Borrower gives the notice provided for in clause (y) above,
and if (i) Agent shall, within 30 days of its receipt of the Replacement Notice,
notify Borrower and each Lender in writing that the Replacement Bank is
reasonably satisfactory to Agent and (ii) the Affected Bank shall not, prior to
the end of such 30-day period, agree to waive the payment of the Additional
Costs in question or the effect of the circumstances described in Section 3.12
or if the Affected Bank shall not cure such default, then the Affected Bank
shall, so long as no Default or Event of Default shall exist, assign its Note
and all of its rights and obligations under this Agreement to the Replacement
Bank, and the Replacement Bank shall assume all of the Affected Bank's rights
and obligations, pursuant to an agreement, substantially in the form of an
Assignment and Assumption Agreement, executed by the Affected Bank and the
Replacement Bank and otherwise in accordance with the provisions of Section
10.11(b). In connection with such assignment and assumption, the Replacement
Bank shall pay to the Affected Bank an amount equal to the outstanding principal
amount under the Affected Bank's Note plus all interest accrued thereon, plus
all other amounts, if any (other than the Additional Costs in question), then
due and payable to the Affected Bank; provided, however, that prior to or
simultaneously with any such assignment and assumption, Borrower shall have paid
to such Affected Bank all amounts properly demanded and unreimbursed under
Section 3.15. Upon the effective date of such assignment and assumption, the
Replacement Bank shall become a Lender under this Agreement and shall have all
the rights and obligations of a Lender as set forth in such Assignment and
Assumption Agreement, and the Affected Bank shall (except to the extent of any
damages caused by a default by such Lender) be released from its obligations
hereunder, and no further consent or action by any party shall be required. Upon
the consummation of any assignment pursuant to this Section, a substitute Note
shall be issued to the Replacement Bank by Borrower, in exchange for the return
of the Affected Bank's Note. The obligations evidenced by such substitute note
shall constitute "Obligations" for all purposes of this Agreement and the other
Loan Documents. If the Replacement Bank is not incorporated under the laws of
the United States of America or a state thereof, it shall, prior to the first
date on which interest or fees are payable hereunder for its account, deliver to
Borrower and Agent certification as to exemption from deduction or withholding
of any United States federal income taxes in accordance with Section 3.14.
Borrower, Agent and the Lenders shall execute such modifications to the
Loan Documents as shall be reasonably required in connection with and to
effectuate the foregoing.
3.17 Extension of Maturity Date. Borrower shall have the option to
extend the Initial Maturity Date for a period of one year, from the date that is
one day after the Initial Maturity Date to the date that is one year after the
Initial Maturity Date (the "First Extended Maturity Date") and for a
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further period (the "Second Extension Period") of one year from the date that is
one day after the First Extended Maturity Date to the date (the "Second Extended
Maturity Date") that is one year after the First Extended Maturity Date,
provided that the following conditions are satisfied for each such extension:
(a) at least 60 days prior to the Initial Maturity Date or the First
Extended Maturity Date, as the case may be, Agent shall have received:
(i) written notice from Borrower of its election to extend the
Initial Maturity Date or the First Extended Maturity Date, as the case
may be; and
(ii) an extension fee, for the account of the Lenders, in an
amount equal to (a) 0.10% for the First Extension and (b) 0.25% for
the Second Extension, of the Commitment Amount as of the Initial
Maturity Date or the First Extended Maturity Date, as the case may be;
(b) no Default or Event of Default shall have occurred and be
continuing as of the Initial Maturity Date or the First Extended Maturity
Date, as the case may be.
SECTION 4. REPRESENTATIONS AND WARRANTIES
------------------------------
In order to induce Lenders to enter into this Agreement and to make
the Loan, Borrower covenants, represents and warrants to Lenders as follows:
4.1 Formation and Existence. (a) Borrower (i) is a duly organized and
validly existing limited partnership, formed under the laws of the State of
Delaware, (ii) has all requisite power and authority to consummate the
transactions contemplated in the Loan Documents and the Project Documents and
(iii) is in compliance with all applicable Legal Requirements, except to the
extent that the failure to comply would not be likely to result in a Material
Adverse Effect.
(b) The Guarantor (i) is a duly organized and validly existing limited
partnership, formed and in good standing under the laws of the State of
Delaware, (ii) has all requisite power and authority to be a Partner, (iii) has
all requisite power and authority to authorize and has authorized Borrower to
consummate the transactions contemplated in the Loan Documents and (iv) is in
compliance with all applicable Legal Requirements, except to the extent that the
failure to comply would not reasonably be expected to have a Material Adverse
Effect.
4.2 Power and Authority. The consummation of the transactions
contemplated in the Loan Documents and the Project Documents and the performance
or observance of Borrower's
32
obligations under the Loan Documents and the Project Documents have been duly
authorized by all necessary action on the part of Borrower and Guarantor.
4.3 Authorization; Enforceable Obligations. (a) The Loan Documents
have been duly executed and delivered on behalf of Borrower and each
constitutes, the legal, valid and binding obligation of Borrower, enforceable
against Borrower in accordance with its terms, except as enforceability may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium or
similar laws affecting the enforcement of creditors' rights generally.
(b) The Project Documents have been duly executed and delivered,
constitute the legal, valid and binding obligations of Borrower, and to the best
of Borrower's knowledge, the other parties to such agreements, have not been
amended, modified or terminated (except for certain amendments thereto, copies
of which have been furnished to Agent) and are in full force and effect. The
rights of Borrower under each of the Project Agreement, the Management
Agreement, the REA and the Mall Lease may be assigned to Lenders without the
consent of any Person. Borrower has done all things required to be done as of
the date of this Agreement to keep unimpaired the leasehold created by the Mall
Lease (other than the Permitted Exceptions). To the best of Borrower's
knowledge, there exists no default of any party under the Project Documents and
no event has occurred and is continuing which with notice or the passage of time
or both would constitute a default under the Project Documents.
4.4 No Litigation. There is no action, suit or proceeding pending
against or directly involving Borrower or the Collateral, or to the best of
Borrower's knowledge threatened in writing against or directly involving
Borrower or the Collateral which would have a Material Adverse Effect or would
materially adversely affect the Collateral in any court, or before or by any
Governmental Authority, whether federal, state, county or municipal, which has
not been disclosed in writing to Agent.
4.5 Consents, Approvals, Authorizations, Etc. No consent, approval,
order or authorization of or registration, declaration or filing with any
Governmental Authority is required in connection with the valid execution and
delivery of the Loan Documents or the Agency Documents or the carrying out or
performance of any of the transactions required or contemplated by the Loan
Documents or the Agency Documents in each case by Borrower or, if required, such
consent, approval, order or authorization has been obtained or such
registration, declaration or filing has been accomplished (other than the
recording of the Mortgage and filing of UCC-1 Financing Statements) or will be
obtained or accomplished prior to the time any such action requiring consent is
undertaken.
33
4.6 No Legal Bar. The execution, delivery and performance of the Loan
Documents and the Project Documents, borrowings under this Agreement and the use
of the proceeds of the Loan will not violate any Legal Requirement affecting or
any Contractual Obligation of Borrower or Guarantor and will not result in, or
require, the creation or imposition of any Lien on any of Borrower's properties
or revenues pursuant to any Legal Requirement or Contractual Obligation, except
for the Lien of the Security Documents.
4.7 Compliance with Building Codes, Zoning Laws, Etc. To the best of
Borrower's knowledge, there are no existing violations of any Legal Requirement
affecting the Land or the construction, use or occupancy of the Improvements.
4.8 No Default. Borrower is not in default under or with respect to
any Contractual Obligation in any respect which has a Material Adverse Effect.
No Default or Event of Default has occurred and is continuing.
4.9 Taxes. Borrower has filed or caused to be filed all tax returns
that are required to be filed, and has paid all taxes shown to be due and
payable on such returns or on any assessments made against Borrower or the
Project and all other taxes, fees or other charges imposed on Borrower or the
Project by any Governmental Authority (other than those taxes, the amount or
validity of which is being contested in good faith by appropriate proceedings
diligently prosecuted and with respect to which prior notice has been given to
Agent and reserves reasonably satisfactory to Agent have been provided or a bond
reasonably satisfactory to Agent has been posted); and no tax Liens have been
filed and no claims are being asserted with respect to any such taxes, fees or
other charges.
4.10 Availability of Utilities. All utility services and facilities
necessary for the construction of the Improvements without impediment or delay
(including, without limitation, gas, electrical, water and storm and sanitary
sewage services and facilities) will be available at the boundaries of the Land
upon the commencement of construction and all utility services necessary for the
operation of the Improvements for their intended purposes will be available at
or within the boundaries of the Land when needed.
4.11 Brokerage. No brokerage or other fee, commission or compensation
is to be paid by Lenders in connection with this Loan as a result of any actions
by Borrower or any Affiliate of Borrower or Lender.
4.12 Permits, Etc. All Permits for the construction of Borrower's Work
and to the extent that Borrower is obligated to perform any of the Agency's Work
in accordance with any of the Project Documents, all permits for the
Construction of such Agency's Work that Borrower is obligated to obtain and
which are
34
required to the date that this representation is being made or reaffirmed have
been obtained and are in full force and effect.
4.13 Financial Statements. Any and all financial statements delivered
to Lenders by or on behalf of Borrower or Guarantor are true and correct in all
material respects and fairly present the financial conditions of their subjects
as of their respective dates, no material adverse change has occurred in the
financial conditions reflected since their respective dates and no additional
Indebtedness has been incurred by Borrower since the respective dates of the
latest statements, other than the borrowings contemplated by this Agreement or
other Indebtedness which has been approved by Lenders in writing. No such
financial statement or any certificate or statement furnished to Lenders by or
on behalf of Borrower or Guarantor in connection with the transactions
contemplated by this Agreement, and no representation or warranty in this
Agreement, contains any untrue statement of a material fact or omits to state a
material fact necessary in order to make the statements contained in such
financial statements, certificates or other statements or this Agreement not
misleading in any material respect.
4.14 ERISA. Neither a Reportable Event nor an "accumulated funding
deficiency" (within the meaning of Section 412 of the Code or Section 302 of
ERISA) has occurred during the five-year period prior to the date on which this
representation is made or deemed made with respect to any ERISA Plan, and each
ERISA Plan has complied in all material respects with the applicable provisions
of ERISA and the Code. No termination of a Single Employer Plan has occurred,
and no Lien in favor of the PBGC or an ERISA Plan has arisen, during such
five-year period. The present value of all accrued benefits under each Single
Employer Plan (based on those assumptions used to fund such Single Employer
Plans) did not, as of the last annual valuation date prior to the date on which
this representation is made or deemed made, exceed the value of the assets of
such ERISA Plan allocable to such accrued benefits. Neither Borrower nor any
Commonly Controlled Entity has had a complete or partial withdrawal from any
Multiemployer Plan, and neither Borrower nor any Commonly Controlled Entity
would become subject to any liability under ERISA if Borrower or any such
Commonly Controlled Entity were to withdraw completely from all Multiemployer
Plans as of the valuation date most closely preceding the date on which this
representation is made or deemed made. No such Multiemployer Plan is in
Reorganization or Insolvent. The present value (determined using actuarial and
other assumptions which are reasonable in respect of the benefits provided and
the employees participating) of the liability of Borrower and each Commonly
Controlled Entity for post retirement benefits to be provided to their current
and former employees under ERISA Plans which are welfare benefit plans (as
defined in Section 3(1) of ERISA) does not, in the aggregate, exceed the assets
under all such ERISA Plans allocable to such benefits.
35
4.15 Solvency. Borrower is, and upon consummation of the transactions
contemplated by this Agreement, the other Loan Documents and any other
documents, instruments or agreements relating thereto, will be, Solvent.
4.16 Roads. All roads necessary for the use of the Improvements for
their intended purposes and required by Governmental Authorities have either
been completed or the necessary rights of way therefor are owned by Borrower or
have been acquired by appropriate Governmental Authorities or dedicated to
public use and accepted by said Governmental Authorities, and all necessary
steps have been taken by Borrower and said Governmental Authorities to assure
the complete construction and installation thereof no later than the Outside
Completion Date or any earlier date required by any Legal Requirement, any Lease
or the REA.
4.17 REA and Leases. The REA and all existing Leases in respect of the
Project are unmodified and in full force and effect, there exists no default by
Borrower, or to the best of Borrower's knowledge, by any other party under the
REA or any existing Leases, and all conditions to the effectiveness and
continuing effectiveness the REA and all existing Leases required to be
satisfied as of the date hereof have been satisfied.
4.18 Accuracy of Information; Full Disclosure. All written
information, reports and other papers and data with respect to Borrower
furnished to Lenders by Borrower were, to the best of Borrower's knowledge, at
the time the same were so furnished or as of the date of such report or
information, correct in all material respects, or have been subsequently
supplemented by other information, reports or other papers or data, to the
extent necessary to give Lenders a true and accurate knowledge of the subject
matter of such information, reports, or other papers and data in all material
respects. All projections with respect to Borrower furnished to Lenders by or on
behalf of Borrower, as supplemented, were prepared and presented in good faith
by Borrower. No fact is known to Borrower which has or is reasonably likely to
have a Material Adverse Effect, which has not been set forth in the financial
statements referred to in subsection 4.13 or in such information, reports,
papers and data or otherwise disclosed in writing to Lenders prior to the date
hereof. Neither this Agreement nor any documents, financial statements, reports,
notices, schedules, certificates, statements or other writings furnished by or
on behalf of Borrower to Agent or any Lender in connection with the negotiation
of this Agreement or the consummation of the transactions contemplated hereby,
or required herein to be furnished by or on behalf of Borrower, contains to
Borrower's knowledge any untrue or misleading statement of a material fact or
omits a material fact necessary to make the statements herein or therein not
misleading. There is no fact known to Borrower which Borrower has not disclosed
to Agent and Lenders in writing which materially affects adversely nor, so far
as Borrower can now
36
foresee, will materially affect adversely the business, prospects, profits or
financial condition of Borrower or the ability of Borrower to perform this
Agreement.
4.19 Mall Site in Buildable Condition. The Agency has delivered the
Leased Premises in "Buildable Condition" as such term is defined in the Project
Agreement.
4.20 Plans under REA. Borrower has delivered all Plans required to be
delivered under the REA to the other parties to the REA and such Plans have
either been approved or deemed approved pursuant to the terms of the REA by all
of such parties.
SECTION 5. AFFIRMATIVE COVENANTS.
----------------------
Borrower agrees, unless otherwise consented to in writing by Agent or
Lenders, as applicable, that, so long as the Commitments remain in effect or the
Notes remain outstanding and unpaid or any amount is owing to any Lender
hereunder or under any of the other Loan Documents, Borrower shall fully keep
and perform each of the covenants set forth in this Section.
5.1 Construction. (a) Borrower shall complete the erection and
equipping of Borrower's Work with due diligence on or before the Outside
Completion Date subject to and in accordance with the Borrower Construction
Plans, this Agreement, the REA, the Project Agreement and the Leases, and shall
diligently enforce all of its rights, if any, under any of the Project Documents
to cause the Agency to complete the erection and equipping of the Agency's Work
with due diligence, subject to and in accordance with the Agency Construction
Plans and the Project Agreement. Borrower shall construct and equip Borrower's
Work and shall diligently enforce all of its rights, if any, under any of the
Project Documents to cause the Agency to construct and equip the Agency's Work
in full compliance with the Legal Requirements affecting the Project and all
requirements of the appropriate Board of Fire Underwriters or other similar body
acting in and for the locality in which the Project is situated.
(b) Upon demand of the Agent, Borrower at its sole cost and expense,
shall correct promptly any structural defect in the Improvements, any material
departure from the Plans in violation of this Agreement and any failure to
comply with applicable Legal Requirements in all material respects (unless such
Legal Requirements are being contested by Borrower in accordance with the terms
of the Mortgage).
37
5.2 Performance under Other Agreements. Borrower shall duly perform
and observe in all material respects all of (a) the covenants, agreements and
conditions on its part to be performed and observed under each of the Loan
Documents and the Leases, and (b) the covenants, agreements and conditions on
its part to be performed and observed under each of the Project Documents.
Borrower shall diligently enforce its rights and remedies under the Agency
Documents, the REA and the Anchor Leases in a commercially reasonable manner.
5.3 No Encroachments. The Improvements shall be constructed entirely
on the Leased Premises and shall not encroach upon or overhang any easement or
right-of-way or the land of others in any material manner. When erected the
Improvements shall be wholly within any building restriction lines, however
established. Borrower shall furnish to Agent promptly after the foundations for
the Improvements have been completed, a foundation survey prepared by a
registered surveyor or engineer.
5.4 Application of Insurance and Condemnation Proceeds. Any proceeds
of insurance or condemnation received as a result of a casualty or taking shall
be applied as provided in the Mortgage. In the event that Agent shall make
available to Borrower the proceeds of any fire or other casualty insurance or
condemnation actually paid to Agent in respect of such damage or destruction of
the Improvements (after deducting therefrom any sums retained by Agent in
reimbursement for costs of collection) to pay the cost of restoration, as
provided in the Mortgage, Borrower shall, and shall diligently enforce its
rights, if any, under the Project Documents to cause the Agency to, proceed
promptly with the work of restoration of the Improvements or any other
improvements located at the Mall in accordance with the Plans and shall
prosecute the work of restoration diligently to completion. Except as otherwise
provided in the Mortgage with respect to insurance proceeds in an amount less
than $3,000,000, all insurance proceeds shall be held by Agent to secure payment
of Borrower's obligations under this Agreement, the Notes and the Security
Documents and disbursed in accordance with the procedures and subject to the
conditions specified in this Agreement and the Mortgage for the disbursement of
Loan proceeds. If any Event of Default or payment Default shall occur prior to
completion of such work of restoration, then Agent, at its option, may apply
such insurance or condemnation proceeds in payment of sums due under this
Agreement or on the Notes or any of the Security Documents, in such order as
Agent may elect in its sole discretion. Any insurance or condemnation proceeds
remaining after restoration of the Improvements is completed shall be, (a) if
completion of such restoration occurs prior to the Completion Date, at Agent's
election, applied in prepayment of the principal amount of the Loans, in the
inverse order of maturity if payable in installments, or paid over to Borrower
or (b) if such completion of restoration occurs after the Completion Date, paid
over to Borrower.
38
5.5 Certain Notices. Borrower shall give notice to Agent promptly upon
the occurrence of:
(a) the receipt by Borrower of any notice given to Borrower that a
default by Borrower has occurred under any Anchor Lease, Major Lease, the
REA, or any Project Document;
(b) the giving by Borrower of any notice of default or other material
notice under any Anchor Lease, the REA, any Agency Document and any
Construction Document;
(c) the giving by Borrower of any notice under any Major Lease
alleging that a default has occurred under such Major Lease or indicating
Borrower's intent to terminate such Major Lease, provided that the
foregoing notice requirement shall be satisfied if the default giving rise
to such notice is described in the report delivered by Borrower to Agent
pursuant to subsection 5.13(a)(iii);
(d) the receipt by Borrower of any notice given to Borrower or with
respect to the Project or the giving by Borrower of any notice which
alleges that any portion of construction or equipping or furnishing of the
Improvements does not comply with any Legal Requirement;
(e) Borrower becoming aware of any development or event which is
reasonably likely to have a Material Adverse Effect;
(f) any condition which results or is reasonably likely to result in a
Force Majeure Delay in completion of the Improvements; and
(g) the following events, as soon as possible and in any event within
30 days after Borrower knows or has reason to know thereof: (i) the
occurrence or expected occurrence of any Reportable Event with respect to
any ERISA Plan, a failure to make any required contribution to a ERISA
Plan, the creation of any Lien in favor of the PBGC or a ERISA Plan or any
withdrawal from, or the termination, Reorganization or Insolvency of, any
Multiemployer Plan or (ii) the institution of proceedings or the taking of
any other action by the PBGC or Borrower or any Commonly Controlled Entity
or any Multiemployer Plan with respect to the withdrawal from, or the
terminating, Reorganization or Insolvency of, any ERISA Plan.
Each notice pursuant to this subsection shall be accompanied by a statement of a
Responsible Officer setting forth details of the occurrence referred to in such
notice and stating what action Borrower proposes to take with respect to such
occurrence.
5.6 Plan Changes. Borrower, without the prior written consent of the
Agent but subject to the provisions of Section
39
2.3, shall not make (a) any single change to the Plans or direct or make change
orders or change bulletins that would require Borrower to incur greater than
$500,000 in additional costs or (b) any changes to the Plans or direct or make
change orders or change bulletins that would, in the aggregate, require Borrower
to incur greater than $3,000,000 in additional costs, provided, however, once
the aggregate increased costs resulting from approved or unapproved changes to
the Plans or change orders exceeds $3,000,000, Agent's prior approval shall be
necessary prior to Borrower's making any change to the Plans that would require
Borrower to incur greater than $250,000 in additional costs. Furthermore,
Borrower shall provide copies of all change orders, change bulletins and other
revisions of the Plans and the Construction Agreement to the Consulting
Professional and, if Agent's prior approval is required under this Section, to
Agent, prior to commencement of any work reflecting such changes or revisions,
and, if Agent's prior approval is not required pursuant to this Section, to the
Agent, promptly after such work is commenced.
5.7 Indemnification. Borrower hereby indemnifies Agent and Lenders
against any claims for brokerage fees or commissions asserted in connection with
the Loans arising out of or in connection with any act or omission of Borrower
or any Affiliate of Borrower and agrees to pay all reasonable out-of-pocket
expenses incurred by Lenders in connection with the defense of any such action
or proceeding brought to collect any such brokerage fees or commissions.
5.8 Expenses. (a) Borrower shall pay or reimburse Agent and Lenders
for all reasonable out-of-pocket expenses incurred by Agent and Lenders before
and after the date of this Agreement with respect to any and all transactions
contemplated by this Agreement including, without limitation, the preparation of
any document reasonably required by Agent and the enforcement of any of Agent's
and/or Lenders' rights under this Agreement, but excluding expenses incurred by
any Lender in connection with its sale of participating interests in, or
assignment of, all or any part of its rights and obligations hereunder pursuant
to subsection 10.11(b) and (c) of this Agreement. From time to time after the
closing, Borrower may receive statements for such expenses, including, without
limitation, attorneys' fees and disbursements. Borrower shall pay such
statements promptly upon receipt. Agent acknowledges that the Administrative Fee
is payable in consideration for the ordinary administration of the Loan by Agent
and that no additional compensation shall be due therefor.
(b) If, with respect to the Loans or the Project, any action or
proceeding is commenced by Agent (including, without limitation, any action to
foreclose under the Mortgage or to collect the Loans or enforce the Guaranties)
or to which Agent and/or one or more Lenders are made a party, or in which it
becomes necessary to defend or uphold the lien of the Mortgage,
40
or in which Agent and/or one or more Lenders are served with any legal process,
discovery notice or subpoena relating to Lenders' lending to Borrower or
accepting the Guaranties, Borrower will reimburse Agent and Lenders for all
expenses (including, without limitation, attorney's fees and costs) which have
been or may be incurred by Agent and Lenders arising from or in connection with
such action or proceeding promptly upon receipt of statements for such expenses.
(c) Any amounts payable or reimbursable by Borrower under this
subsection which are not paid or reimbursed within thirty days after demand by
Agent shall bear interest at the rate of interest payable under subsection
3.8(c) from the date of such demand until payment. Agent shall furnish Borrower
with supporting information for such statements as reasonably requested by
Borrower.
5.9 Construction Schedule. As soon as reasonably available after
commencement of construction, Borrower shall provide Agent, at Borrower's
expense, with a critical path method schedule for completion of the construction
and equipping of the Improvements, which schedule shall be in form and substance
reasonably satisfactory to Agent.
5.10 Inspection of Books and Records. Agent and the Consulting
Professional, and designated representatives of either of them, shall, upon
reasonable prior notice and at reasonable times, have the right of entry and
free access to the Improvements (subject to the rights of lessees) and the right
in the presence of a representative of Borrower (provided Borrower makes its
representative available on a timely basis) to inspect all work done, labor
performed and materials furnished in and about the Improvements and to inspect
all books, contracts, records and plans and shop drawings of Borrower relating
to the Project or the construction of the Improvements. Upon reasonable prior
notice and at reasonable times, Borrower shall make its representatives
available for Agent or the Consulting Professional and any designated
representative of either, to discuss Borrower's affairs, finances and accounts
relating to the Project and the construction of the Improvements and Borrower
will cooperate, and cause the Construction Manager to cooperate, with Agent and
the Consulting Professional and any designated representative of either of them.
5.11 Movement of Unincorporated Materials. With respect to any
Unincorporated Materials for which advances of the Loan have been made, Borrower
shall give notice to Agent not less than five days prior to any change in the
location of such Unincorporated Materials, which notice shall state the date on
which transfer shall commence, the destination and the name and address of the
carrier. If requested by Agent at the time such notice is given, Borrower shall
furnish to Agent, promptly when available, copies of bills of lading,
certificates of bailment, warehouse receipts and other documents and instruments
evidencing
41
Borrower's rights in the Unincorporated Materials in transit and on arrival at
destination.
5.12 Inspection Reports. Borrower shall furnish, or cause to be
furnished, to the Consulting Professional as soon as available: (a) copies of
all construction contracts and purchase orders entered into after the date
hereof, (b) copies of contractor trade payment breakdowns and monthly job cost
reports prepared by Borrower and the Construction Manager and (c) such other
information as may be reasonably requested by the Consulting Professional in
order to make reports to Agent as to the status of the Project. Upon request by
Agent, Borrower shall furnish or cause to be furnished to the Consulting
Professional, copies of all testing and quality control reports and Architect's
field reports prepared for and delivered to Borrower.
5.13 Financial Statements; Other Information. (a) Borrower shall
deliver to the Agent (i) within 90 days after the end of each of its fiscal
years after the opening of the Project to the general public, annual audited
operating statements and a rent roll for the Project and a copy of the balance
sheet and statement of sources and uses of funds of Borrower as at the end of
such year, and related statements of income and retained earnings and changes in
financial position for such year, (ii) within 45 days after the end of each of
its fiscal quarters after the opening of the Project to the general public,
(other than the last) quarterly operating statements and a rent roll for the
Project and a copy of the balance sheet and statement of sources and uses of
funds of Borrower as at the end of such quarter, and related statements of
income and retained earnings and changes in financial position for such quarter
and a statement of Borrower's calculation of the Guarantied Obligations as of
the end of such fiscal quarter and (iii) within 20 days after the end of each
two-month period, a leasing status report, tenant sales reports, tenant
receivable reports and a current rent roll, each in the form reasonably
acceptable to Agent. The foregoing financial statements of Borrower shall be
certified by a Responsible Officer and, with respect to the annual financial
statements of Borrower, also by Deloitte & Touche or such other nationally
recognized certified public accountant reasonably approved by the Agent. All
financial statements of Borrower delivered to the Agent shall be true and
correct in all material respects, shall be prepared in accordance with generally
accepted accounting principles, consistently applied, and in each case shall
fairly present the financial condition of the subject as of the dates thereof
and each of the operating statements shall be in reasonable detail and include
cash flow and any other information reasonably requested by the Agent. Any
material adverse change that occurs in the financial condition of Borrower after
the date of the most recent financial statements shall be reported to the Agent
promptly. None of the financial statements of Borrower or any certificate or
statement furnished to the Agent by or on behalf of Borrower in connection with
the transactions contemplated hereby, shall contain any untrue statement of a
42
material fact or omit to state a material fact necessary in order to make the
statements contained therein or herein not misleading.
(b) Borrower shall furnish to the Agent:
(i) concurrently with the delivery of the financial statements
referred to in subsection (a), a certificate of a Responsible Officer
(A) stating that, to the best of such person's knowledge, after such
examination or investigation as is necessary to enable such person to
make an informed judgment, Borrower during such period has, in all
material respects, observed or performed all of its covenants and
other agreements, and satisfied every condition, contained in this
Agreement and all other Loan Documents to be observed, performed or
satisfied by it, and that such person has obtained no knowledge of any
Default or any Event of Default, except as specified in such
certificate and (B) stating Borrower's calculation of the Guarantied
Obligations as of the end of such fiscal year;
(ii) not later than November 30th of each year commencing after
Completion, a copy of the projections by Borrower of the operating
budget and cash flow for the Project for the following year; and
(iii) promptly, such additional financial and other information
as the Agent may from time to time reasonably request.
5.14 Administration Fee. Borrower agrees to pay on the first day of
each calendar quarter, for the immediately preceding calendar quarter, to the
Agent an administrative fee (the "Administrative Fee") in an amount equal to (i)
$30,000 (i.e., $120,000 per calendar year) for the period beginning on the date
hereof and ending on the date of Completion of the Improvements and (ii) $15,000
(i.e., $60,000 per calendar year) for the period beginning after Completion of
the Improvements and ending on the date that the Loans are repaid in full. The
Administrative Fee shall be pro rated for any partial calendar quarter during
which this Agreement is in effect.
5.15 Leasing. Borrower shall generally lease space in the Project to
quality tenants at prevailing market rents and other market terms.
43
SECTION 6. NEGATIVE COVENANTS
------------------
Borrower agrees, unless otherwise consented to in writing by Agent or
Lenders, which consent shall not be unreasonably withheld with respect to
subsections 6.3, 6.4 and 6.6, that, so long as the Commitments remain in effect,
any Note remains outstanding and unpaid or any other amount is owing to any
Lender hereunder or under any of the other Loan Documents, Borrower shall not
take or permit the actions set forth in this Section.
6.1 Additional Debt. Borrower shall not create, incur, assume or
suffer to exist any Indebtedness other than (a) the Loans, (b) trade payables
incurred in the ordinary course of business, (c) unsecured loans made to
Borrower by any partner in Borrower, provided that such loans are subordinated
to the Loans in a manner reasonably acceptable to Agent and (d) unsecured loans
incurred for working capital purposes of the Project (which shall include the
right to enter into Financing Leases), provided that such loans and Financing
Leases described in clause (d) shall (i) not become effective until after the
Completion of the Project, (ii) be subordinated to the Loans in a manner
reasonably satisfactory to Agent and (iii) be in an aggregate amount not to
exceed $10,000,000 at any time outstanding.
6.2 Changes in Plans. (a) Borrower shall not modify or supplement, or
permit the modification or supplementing of, the Plans in any respect, which in
the reasonable determination of the Consulting Professional would (i) materially
adversely affect the structural integrity of the Improvements or alter the
nature of the Improvements as a regional shopping center or (ii) cause the
Improvements to be Completed after the Outside Completion Date and (b) Borrower
shall not modify or supplement, or permit the modification or supplementing of,
the Plans in any respect without the prior written consent of lessees under
Leases which specify construction requirements, parties to any Project Document
which have the authority to approve any changes in Plans and all Governmental
Authorities which previously have approved the matters to be changed.
6.3 Intentionally Deleted.
6.4 Changes in Agreements. Borrower shall not:
(a) surrender, terminate, cancel, rescind or supplement, alter, revise,
modify or amend any Agency Document, Anchor Lease or the REA (including, without
limitation, allowing the ipso facto amendment which is contemplated by the
penultimate paragraph of Section 13.2 of the REA to occur) or permit any such
action to be taken.
(b) amend, modify or waive any of the provisions of the Partnership
Agreement which would result in (i) the reduction or impairment of authority of
Guarantor, (ii) the loss by Guarantor
44
of control over the operation and management of Borrower or the Project or (iii)
the reduction of Guarantor's ownership interest in Borrower to an amount less
than 51% of the total ownership and economic interests in Borrower.
(c) enter into a Management Agreement which does not expressly provide (i)
that the Agent shall have the right to terminate such Management Agreement
without penalty or cost to Agent after the occurrence and during the continuance
of an Event of Default and (ii) that the Agent or its designee shall have the
right to continue the Management Agreement in full force in accordance with the
terms of such Management Agreement for a period not to exceed 120 days from the
date that the Agent or its designee takes over the Project.
(d) amend, modify or waive any of the material provisions of any of the
Construction Documents or permit any such action to be taken, except to the
extent such changes do not materially affect the rights or interests of Agent or
the Lenders (which rights shall include the Agent's right to succeed to
Borrower's interest under the Construction Documents after an Event of Default).
6.5 Transactions with Affiliates. Borrower shall not enter into any
transaction, including, without limitation, any purchase, sale, lease or
exchange of property or the rendering of any service, with any Affiliate except
for transactions which (a) are upon fair and reasonable terms no less favorable
to Borrower than it would obtain in a hypothetical comparable arm's length
transaction with a Person not an Affiliate or (b) neither the Agent nor the
Lenders or any of their successors or assigns would be bound upon the
foreclosure or assignment-in-lieu of foreclosure of the Project.
6.6 Appointment of Manager; Amendment of Third Party Management
Agreement. Borrower shall not appoint any Manager other than an Affiliate of
Guarantor. If Agent consents to Borrower entering into a Management Agreement
with a Manager that is not an Affiliate of Guarantor, Borrower shall not amend,
modify or terminate such Management Agreement.
SECTION 7. CONDITIONS PRECEDENT TO FIRST ADVANCE
-------------------------------------
Lenders shall not be obligated to make the first advance of Loan
proceeds until all of the conditions set forth in this Section shall have been
satisfied.
7.1 Closing Documents. Agent shall have received all the items set
forth in this subsection, in each case in form and substance satisfactory to
Agent.
(a) Taxes. Evidence that all past and current taxes and assessments
(or installments thereof, if payable in
45
installments) applicable to the Project or payable by Borrower have been
paid, except for any taxes or assessments which are not yet delinquent.
(b) Title Insurance Policy. A mortgagee's policy of title insurance or
satisfactory evidence of Title Company's unconditional obligation to issue
such a policy, dated as the date of the first advance of the Loan (the
"Title Insurance Policy"). Such Title Insurance Policy shall (i) be in the
amount of the Loan; (ii) be issued at ordinary rates; (iii) insure the
Agent that the Mortgage creates a valid Lien on the Leased Premises and the
Improvements located thereon, free and clear of all defects and
encumbrances, except for the Permitted Exceptions; (iv) be in the form of
policies providing the Agent with the broadest coverage that is then
offered by Title Company to mortgagees of properties located in the City of
Norfolk and Commonwealth of Virginia and that is otherwise satisfactory to
the Agent; (v) provide full coverage against mechanics' liens and against
survey exceptions not specified as Permitted Exceptions; (vi) contain a
pending disbursements clause or endorsement in form and substance
satisfactory to Agent and a commitment of Title Company to provide notices
of title continuation or endorsement sufficient to enable Agent to
determine that title to the Project is satisfactory prior to Agent's making
any subsequent advance of the Loan; and (vii) contain such other
endorsements and affirmative coverage as Agent may request. The Agent shall
be furnished with copies of all documents that appear as exceptions in the
Title Insurance Policy.
(c) Payment of Title Insurance Premium. Evidence satisfactory to Agent
that all premiums in respect of such title insurance policy have been paid.
(d) Survey. A survey of the Leased Premises (current to within 60 days
of the date of the first advance of the Loan), certified to Lenders by an
independent professional licensed land surveyor satisfactory to Agent,
which survey shall be made in accordance with the Minimum Standard Detail
Requirements for Land Title Surveys jointly established and adopted by the
American Title Association and the American Congress on Surveying and
Mapping in 1988. Without limiting the generality of the foregoing, there
shall be surveyed and shown on such survey the following: (i) the locations
of all buildings and other structures, if any, on the Leased Premises and
the established building setback lines; (ii) the lines and the width of
streets abutting the Leased Premises; (iii) all access and other easements
appurtenant to or necessary to the use of the Leased Premises; (iv) all
roadways, paths, driveways, easements, encroachments and overhanging
projections and similar encumbrances affecting the Leased Premises, whether
recorded, apparent from a physical inspection of the Leased Premises or
otherwise
46
known to the surveyor; (v) any party walls with structures on adjoining
property any encroachments on any adjoining property by the building
structures and improvements on the Leased Premises; and (vi) if the Leased
Premises is described by reference to a filed map, a legend relating the
survey to such map.
(e) Availability of Utilities. Letters from local utility companies or
Governmental Authorities stating, or such other evidence satisfactory to
Agent, showing that gas, electric power, sanitary and storm sewers, water
and all other utilities (i) that are necessary and required during the
construction period have been completed and will be available in such a
manner as to assure Agent that construction will not be impeded by a lack
of utilities and (ii) that are necessary for operation and occupancy of the
Improvements will be completed in such a manner and at such a time as will
assure the opening and operation of the Improvements on or before the
Outside Completion Date.
(f) Architect's Certificate. The Architect's Certificate.
(g) Construction Manager's Certificate. The Construction Manager's
Certificate and a certified list of all construction contracts entered into
in connection with the Improvements.
(h) Hazard Insurance. Policies or certificates of insurance required
by the Mortgage and any of the other Security Documents, accompanied by
evidence of the payment of the premiums for such policies, with mortgagee
loss payable endorsements naming Lenders as loss payees and confirmation by
Agent's insurance consultant that the insurance in place complies with all
requirements of the Mortgage.
(i) Flood Insurance. If required by the Mortgage, a policy of flood
insurance in an amount equal to the lesser of (i) the maximum limit of
coverage available under the National Flood Insurance Act of 1968, as
amended, and (ii) the amount of the Loan.
(j) Permits, Etc. Copies of all Permits required for Borrower's Work
as available, and, to the extent available to Borrower, copies of all
Permits required for Agency's Work.
(k) Soils and Geological Report. If requested by Agent, a soils and
geological report, including a summary of soils tests borings issued by a
professional engineer satisfactory to Agent.
47
(l) Opinion of Counsel for Borrower. An opinion of counsel for
Borrower.
(m) Opinion of Counsel for Guarantor. An opinion of counsel for
Guarantor.
(n) Project Documents. Certified copies of duly executed counterparts
of the Major Agreements.
(o) Plans. A copy of the Plans.
(p) Loan Documents. Duly executed copies of all Loan Documents.
(q) Budget. The Budget, together with the cost breakdown and schedule
for construction of the Improvements setting forth all items of costs and
expenses and estimating the construction trade schedules required to
complete the construction and equipping of the Improvements.
(r) Organizational Documentation. For Borrower and Guarantor, with
respect to each such entity:
(1) the partnership agreement including all amendments and
attachments, certified by a general partner;
(2) the partnership certificate including all amendments,
certified by an official in whose office it is filed or recorded;
(3) any certificates filed or recorded or required to be filed or
recorded by such partnership in the state of its formation and the
state where the Land is located in order for it to do business in
those states;
(4) any consents by other partners required for the borrowing
contemplated by this Agreement and the execution, delivery and
performance of the Loan Documents or the execution, delivery and
performance of the Guaranty, as applicable; and
(5) if requested by Lender, an acknowledgement by each of the
partners in Borrower of his or its continued membership in Borrower.
(s) Borrowing Certificate and Requisition. A Borrowing Certificate and
Requisition, duly executed by Borrower.
(t) Pre-Leasing Requirement. Fully executed counterparts of the
Nordstrom's Lease and xxx Xxxxxxxx' Lease. In addition, each of Nordstrom
and Dillards shall
48
have executed the REA in form and substance satisfactory to the Lenders.
(u) Environmental Report. An environmental report with respect to the
Leased Premises in form and substance satisfactory to Agent, in its sole
discretion.
(v) Construction Schedule. The Agent shall have received a critical
path method schedule for completion of the construction and equipping of
the Improvements in form and substance satisfactory to Agent.
(w) Engineer's Certificate. The Engineer's Certificate.
(x) Lien Searches. The results of a recent search by a Person
satisfactory to Agent, of the Uniform Commercial Code, judgment and tax
lien filings which may have been filed with respect to personal property of
Borrower.
(y) Solvency Certificates. A Solvency Certificate, duly executed, from
each of Borrower and Guarantor.
(z) Appraisal. An independent M.A.I. appraisal which shall comply in
all respects with the standards for real estate appraisals established
pursuant to the Financial Institutions Reform, Recovery, and Enforcement
Act of 1989.
(aa) Leases. Copies of all fully executed Leases of the Improvements
existing on the date of this Agreement, together with, to the extent in
Borrower's possession and not prohibited by the terms of the Lease, current
financial statements of the tenants (and guarantors of the tenants'
obligations, if applicable) thereunder.
(ab) Standard Form of Lease. The standard form of lease Borrower
intends to use in connection with the leasing of space in the Improvements.
(ac) REA. A copy, certified to be true and complete, of the REA,
together with estoppel certificates with respect thereto from each of
Dillards, Nordstrom and the Agency.
(ad) Management and Leasing Contracts. Copies of all existing
contracts providing for the management, maintenance, operation or leasing
of the Project or any improvements thereon, together with, in each case,
such collateral assignments as Agent may require.
7.2 Fees. Agent shall have received any fees payable hereunder and all
reasonable legal fees and disbursements of Lenders' counsel payable in
connection with the preparation, execution and delivery of the Loan Documents
and the consummation of the transactions contemplated by the Loan Documents.
49
7.3 Agency Construction Funding. Agent shall have received evidence,
satisfactory to Agent, that the Agency has appropriated and funded no less than
$95,000,000 to cause the completion of the Agency's Work in accordance with the
Project Agreement and the Agency Construction Plans.
7.4 Accounting. Agent shall have received and approved an accounting
of all expenditures for costs shown on the Budget incurred prior to the first
advance of the Loan.
7.5 Representations and Warranties. The representations and warranties
which are contained in any of the Loan Documents or any certificate, document or
financial or other statement furnished under or in connection with the Loan
Documents, shall be correct in all material respects on and as of the date of
the first advance as if made on and as of such date.
7.6 No Default or Event of Default. No Default or Event of Default
shall have occurred and be continuing on such date or after giving effect to the
advance to be made on such Borrowing Date.
7.7 Notices of Leasehold Mortgage. Borrower shall have provided Agent
executed notices to the Agency, as lessor under the Mall Lease and each party to
the REA, informing such parties of the existence of the Mortgage and the notice
address of Agent, in a manner which will ensure that Agent will be afforded all
rights of a leasehold mortgagee under the Mall Lease and the REA and otherwise
in form and substance reasonably satisfactory to Agent.
7.8 Surety Bonds; Construction Contracts. Borrower shall have provided
evidence reasonably satisfactory to Agent and the Consulting Professional that
the Construction Manager and all subcontractors which are required pursuant to
the terms of the relevant Construction Documents or subcontracts to procure
payment and performance bonds have procured such bonds in form and substance as
required by such Construction Documents. Agent shall have received executed
copies of all trade contracts for any contractors which are being paid with the
proceeds of the Loans.
7.9 Additional Matters. All of the foregoing items and all other
documents and legal matters in connection with the transactions contemplated by
this Agreement shall be satisfactory in form and substance to Agent and its
counsel.
SECTION 8. CONDITIONS PRECEDENT TO SUBSEQUENT ADVANCES
-------------------------------------------
8.1 All Subsequent Advances. Lenders shall not be obligated to make
any advance of Loan proceeds subsequent to the initial advance until all of the
conditions set forth in this subsection shall have been satisfied.
(a) Satisfactory Title. The Security Documents shall constitute a
valid first lien on the Collateral for the full
50
amount of the Loan advanced to and including such date, free and clear of
all Liens except for Permitted Exceptions and Permitted Encumbrances. Agent
shall have been furnished with a notice of title continuation or an
endorsement to the title insurance policy issued to Lenders in connection
with the first advance of the Loan, which continuation or endorsement shall
state that since the last disbursement of the Loan there have been no
changes in the state of title to the Project and that there are no
additional survey exceptions not previously approved by Agent.
(b) No Other Security Interests. Except as otherwise permitted herein,
all materials and fixtures incorporated in the construction of the
Improvements shall have been purchased so that their absolute ownership
shall have vested in Borrower immediately upon delivery to the Land and
Borrower shall have produced and furnished, if required by Agent, the
contracts, bills of sale or other agreements under which title to such
materials and fixtures is claimed.
(c) Statement of Expenditures. Agent shall have received with respect
to Borrower's Work, a statement of Borrower, in form and substance
satisfactory to Agent, setting forth the names, addresses and amounts due
or to become due as well as the amounts previously paid to every
contractor, subcontractor, and supplier furnishing materials for or
performing labor on the construction of any part of Borrower's Work.
(d) Representations and Warranties. The representations and warranties
contained in any of the Loan Documents or any certificate, document or
financial or other statement furnished under or in connection with the Loan
Documents, shall be correct in all material respects on and as of the
Borrowing Date for such advance as if made on and as of such date.
(e) No Default or Event of Default. No Default or Event of Default
shall have occurred and be continuing on such date or result from the
advance to be made on such Borrowing Date.
(f) Borrower's Work. Agent shall have received and approved (i) an
inspection report of the Consulting Professional and the Architect covering
the progress of construction, conformity of Borrower's Work with the
Borrower Construction Plans, quality of work completed and percentage of
work completed and standard form G-702 (or such alternate form reasonably
approved by Agent) executed by the Architect and the Construction Manager,
(ii) a draw request signed by the Construction Manager, satisfactory in
form and substance to Agent, with appropriate insertions, accompanied by
true copies of unpaid invoices, receipted bills and lien waivers for all
items paid with the previous advance of the Loans, and such other
supporting information as Agent may request. Agent shall have also received
(i) an inspection report of the Consulting Professional and the Architect
covering the progress of
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construction, conformity of the Agency's Work relating to items covered by
the Garage Agreement with the Agency Plans, quality of work completed and
percentage of work completed and standard AIA form G-702 (or such alternate
form reasonably approved by Agent) executed by the Architect and the
Construction Manager and with respect to any request for an advance for
Borrower's contribution towards the construction of the parking garage
under the Garage Agreement, Agent shall have confirmed that the conditions
to Borrower's obligation to make such contribution under the Garage
Agreement have been satisfied.
(g) Other Costs. In the case of advances to pay the costs included in
the Budget that are not among the costs described in the preceding
paragraph, Agent shall have received such evidence as it may reasonably
require that such costs have been properly incurred and are due and
payable.
(h) Evidence of Compliance. All instruments relating to each advance
and all actions taken on or prior to each advance in connection with the
performance of the Loan Documents shall be satisfactory to Agent, and Agent
shall have been furnished with such documents, reports, certificates,
affidavits and other information, in form and substance satisfactory to
Agent, as Agent may require to evidence compliance with all of the
provisions of the other Loan Documents.
(i) Lien Waivers. Borrower shall have furnished to Lender with respect
to Borrower's Work, lien waivers in form and substance satisfactory to
Agent from the Construction Manager and all contractors, subcontractors,
suppliers and materialmen, evidencing that they have been paid in full for
all work performed or materials supplied to the date of the preceding
advance, except for retentions provided for in this Agreement.
(j) Agreements. Each of the Major Agreements shall be in full force
and effect. There shall exist no default, after the giving of notice, if
applicable, and/or expiration of cure periods, if applicable, by (i) any
party other than Borrower under any Major Agreement that, in the reasonable
judgement of Agent, could have a Material Adverse Effect and (ii) Borrower
under any Agency Document, any Anchor Lease, the REA or any Construction
Document, subject to Borrower's right, with respect to the Construction
Documents, to dispute in consultation with Agent, both acting in good faith
to determine the proper course of action to be taken under such agreements,
the charges or amounts which may be due under such agreements.
(k) Damage or Injury. The Improvements shall not have been materially
damaged by fire or other casualty unless there shall have been received by
Agent or a person approved by Agent, or unless the relevant insurance
company shall have confirmed coverage for such casualty and committed to
disburse, insurance proceeds sufficient in the sole judgment of Agent and
the Consulting Professional, to effect satisfactory restoration and
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completion of the Improvements on or before the Outside Completion Date.
(l) Taxes. Agent shall have received evidence that all past and
current (if then due and payable) taxes and assessments applicable to the
Project or payable by Borrower in connection with the Project have been
paid.
(m) Waived Conditions. Upon the request of Agent, all conditions
waived with respect to the initial advance or any subsequent advance shall
be met.
(n) Borrowing Certificate and Requisition. Agent shall have received a
Borrowing Certificate and Requisition dated the date of such advance.
(o) No Litigation. There shall be no action, suit or proceeding
(zoning or otherwise) pending against or involving Borrower or the
Collateral or with respect to any of the Permits in any court, or before or
by any Governmental Authority, whether federal, state, county or municipal
which Agent determines to have a reasonable likelihood to be adversely
determined and which, if adversely determined, would be reasonably likely
to have a Material Adverse Effect.
(p) Surety Bonds; Construction Contracts. To the extent not previously
delivered to Agent, Borrower shall have provided evidence reasonably
satisfactory to Agent and the Consulting Professional that the Construction
Manager and all subcontractors which are required in accordance with the
terms of the relevant Construction Documents or subcontracts to procure
payment and performance bonds have procured such bonds in form and
substance as required by such Construction Documents. Agent shall have
received executed copies of all trade contracts for any contractors which
are being paid with the proceeds of the Loans.
8.2 Completion of Improvements. The Improvements shall not be deemed
completed for purposes of this agreement until all of the conditions set forth
in this subsection shall have been satisfied.
(a) The Improvements shall have been completed substantially in
accordance with the Plans and accepted by Borrower subject to completion of
minor "punch list" items having an aggregate cost to complete or repair not to
exceed $1,500,000;
(b) The Agency's Work shall have been completed substantially in
accordance with the Agency Plans;
(c) The Agent shall have received the following, in each case in form
and substance satisfactory to the Agent:
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(i) evidence of the approval by all appropriate Governmental
Authorities of the Improvements as being complete as to construction
including, without limitation, a copy of the Temporary Certificate of
Occupancy;
(ii) the certificate of (a) the Architect and (b) the
Construction Manager that the Improvements have been completed
substantially in accordance with the Plans, that connection has been
made to all appropriate utility facilities; and
(iii) a perimeter survey showing the completed Improvements, all
easements on and appurtenant to the Leased Premises and the location
of access to the Leased Premises and all utility and water easements
directly affecting the Leased Premises with a certification that the
Improvements do not encroach on any property other than the Leased
Premises, that no buildings, other structures or appurtenances on
other property encroach on the Leased Premises and that all set-back
requirements have been complied with.
SECTION 9. EVENTS OF DEFAULT
-----------------
9.1 Events of Default. The occurrence of any of the events set forth
in this subsection shall constitute an Event of Default.
(a) Payment of Note. Borrower shall fail to pay any principal of
any Note when due in accordance with the terms thereof or hereof; or
Borrower shall fail to pay any interest, fees, charges or other
amounts payable hereunder, under any Note or any other Loan Document
within three Business Days after written notice to Borrower.
(b) Unsatisfactory Title. Title to any part of the Collateral
shall not be satisfactory to Agent, in its reasonable judgment, by
reason of any Lien or other defect (even though any such defect may
have existed at the time of any prior advance), except the Permitted
Exceptions, the Permitted Encumbrances and the Liens of the Security
Documents, and such Lien, encumbrance or other defect shall not be
removed or bonded or insured over within 30 days after notice to
Borrower.
(c) Unauthorized Assignments, Etc. Borrower shall assign any
interest in this Agreement or any advance to be made or any interest
in either.
(d) Damage or Destruction. The Improvements are partially or
totally damaged or destroyed by fire or any other cause prior to
Completion and the restoration of the Improvements cannot with the
exercise of ordinary diligence reasonably be expected to be completed
on or prior to the Outside Completion Date, subject to extensions by
the period of any Force Majeure Delay.
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(e) Cessation of Construction. For the period commencing on the
date of the first advance hereunder through the Outside Completion
Date, there is any cessation of construction of Borrower's Work for
any period after the date construction commences in excess of 60
successive calendar days, unless the conditions of each of
subparagraphs (i), (ii), (iii) and (iv) of this subparagraph shall be
satisfied at all times during such cessation:
(i) the cessation of construction shall have been caused by
reason of a Force Majeure Delay;
(ii) Borrower shall have made adequate provision, acceptable
to Agent, for the protection of materials acquired by Borrower
stored on site and for the protection of the tenant finish work
constituting Borrower's Work, to the extent then constructed,
against deterioration and against other loss or damage and theft;
(iii) Borrower shall have furnished to Agent satisfactory
evidence that such cessation of construction will not (x)
materially adversely affect or jeopardize the rights of Borrower
under agreements relating to the construction or operation of the
Project (including any Leases) or (y) increase the cost of
construction of Borrower's Work, unless Borrower shall either
demonstrate to Agent's satisfaction that an adequate source of
funds is and shall remain available to cover such increased costs
or deposit with Agent additional funds in an amount equal to such
increased costs; and
(iv) from time to time upon Agent's request during any such
cessation of construction, Borrower shall furnish to Agent
satisfactory evidence that (notwithstanding such cessation of
construction) the completion of the Improvements can be
accomplished on or prior to the Outside Completion Date, subject
to extensions by the period of any Force Majeure Delay.
(f) Nonconforming Work. The construction of all or any material
part of the Improvements, including, without limitation, materials,
fixtures and articles, is performed in a manner other than
substantially in accordance with the Plans and Borrowers does not
promptly remedy the same after Borrower is aware of such variance.
(g) Other Security Agreements. Any of the following occurs: (i)
Borrower executes any chattel mortgage or other security agreement on
any materials, fixtures or articles of personal property used in the
construction of Borrower's Work, which, for security agreements
securing an amount less than $1,000,000, are not discharged within 5
days after notice from Agent of the existence of such security
agreement or if any such materials, fixtures or articles are purchased
pursuant to any
55
conditional sales contract or other security agreement or otherwise so
that the ownership of such materials, fixtures or articles will not
vest unconditionally in Borrower upon delivery, unconditionally and
free from encumbrance or (ii) Borrower does not furnish to Agent
within 30 days after request the contracts, bills of sale, statements,
receipted vouchers and agreements, or any of them, under which
Borrower claims title to such materials, fixtures or articles.
(h) Insufficient Funds. Borrower shall fail to remedy any Budget
Deficit within (i) 30 days after demand by Agent if such Budget
Deficit shall occur prior to the making of the first advance hereunder
and (ii) 30 days after demand by Agent if such Budget Deficit shall
occur after the making of the first advance hereunder.
(i) Defaults under Other Agreements. Any default by Borrower
shall occur under the Ground Lease, the REA, the Project Agreement,
any Anchor Lease, the Construction Documents (subject to Borrowers
right to dispute amounts due under the Construction Documents in
accordance with Section 8.1(j)), and any notice, if required, shall
have been given and any grace or cure period, if applicable, shall
have expired.
(j) Failure to Complete. The Improvements shall not be completed,
as provided in this Agreement, as of the close of business on the
Outside Completion Date.
(k) Other Covenants. Borrower shall default in the performance or
observance of any of the provisions contained in Section 6.1 or 6.4 of
this Agreement.
(l) Other Defaults. An Event of Default (as defined in the
Mortgage) shall have occurred and be continuing, or Borrower shall
default in the performance or observance of any other term, covenant,
condition or obligation contained in this Agreement or any of the Loan
Documents (other than the Mortgage) and such default shall continue
for 30 days after notice shall have been given to Borrower by Agent
specifying such default and requiring such default to be remedied,
which 30-day period may be extended to the extent required (provided
that such extended period shall not be longer than 180 days at any
time when the Guaranty Percentage is less than 100%) if such default
is not susceptible of cure within 30 days so long as Borrower has
commenced to cure such default within such 30-day period and is
thereafter diligently prosecuting such cure to completion and so long
as such delay is not likely to have a Material Adverse Effect;
provided, however, any default in the payment of an obligation to pay
a liquidated amount (including, without limitation, discharging any
non-permitted Liens) shall be promptly cured after notice by Agent.
(m) Security Documents. Any of the Security Documents or the
Guaranties shall cease for any reason to be in full force
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and effect (except in accordance with their terms), or Borrower or any
other Person executing any Security Document or any Guaranty shall so
assert in writing.
(n) Acceleration Events. Any Automatic Acceleration Default shall
occur.
(o) ERISA. (i) Any Person shall engage in any "prohibited
transaction" (as defined in Section 406 of ERISA or Section 4975 of
the Code) involving any ERISA Plan, (ii) any "accumulated funding
deficiency" (as defined in Section 302 of ERISA), whether or not
waived, shall exist with respect to any ERISA Plan or any Lien in
favor of the PBGC or an ERISA Plan shall arise on the assets of
Borrower or any Commonly Controlled Entity, (iii) a Reportable Event
shall occur with respect to, or proceedings shall commence to have a
trustee appointed, or a trustee shall be appointed, to administer or
to terminate, any Single Employer Plan, which Reportable Event or
commencement of proceedings or appointment of a trustee is, in the
reasonable opinion of Required Lenders, likely to result in the
termination of such Single Employer Plan for purposes of Title IV of
ERISA, (iv) any Single Employer Plan shall terminate for purposes of
Title IV of ERISA, (v) Borrower or any Commonly Controlled Entity
shall, or in the reasonable opinion of Required Lenders is likely to,
incur any liability in connection with a withdrawal from, or the
Insolvency or Reorganization of, a Multiemployer Plan or (vi) any
other event or condition shall occur or exist with respect to an ERISA
Plan; and in each case in clauses (i) through (vi) above, such event
or condition, together with all other such events or conditions, if
any, could subject Borrower to any tax, penalty or other liability
which, in the aggregate, is material in relation to the business,
operations, property or financial or other condition of Borrower.
(p) Guarantor Covenants. Guarantor shall default in the
performance or observance of any of the covenants contained in any of
the Guaranties, after any required notice has been provided and
applicable cure period has expired.
9.2 Lenders' Right to Apply Loan Proceeds. During the continuance of
an Event of Default, Lenders shall have the right, but not the obligation, to
disburse and directly apply proceeds of the Loans to satisfy Borrower's
obligations if and to the extent the same are due and payable. Borrower hereby
authorizes Lenders during the continuance of any Event of Default to hold, use,
disburse and apply advances of the Loans for costs incurred in constructing and
equipping Borrower's Work, payment or performance of obligations of Borrower
under the Loan Documents (including payment of interest on the Loans) and
preservation and protection of the Collateral. Such disbursements shall be
deemed advances of the Loans for all purposes and shall be secured by the
Security Documents.
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9.3 Lenders' Right to Stop Advancing Funds and to Accelerate the
Loans. In addition to any other rights and remedies Lenders may have pursuant to
the Loan Documents or otherwise, and without limitation, if any Event of Default
shall occur, (a) if such Event of Default is an Automatic Acceleration Default,
automatically the Commitments shall terminate and the Loans (together with
accrued interest) and all other amounts owing under this Agreement, the Notes,
the Security Documents and the other Loan Documents immediately shall become due
and payable, and (b) if such event is any other Event of Default, either or both
of the following actions may be taken: (i) Agent may by notice to Borrower,
declare the Commitments to be terminated, in which case the Commitments shall
immediately terminate; and (ii) Agent may, by notice to Borrower, declare the
Loans (together with accrued interest thereon) and all other amounts payable
under this Agreement, the Notes, the Security Documents and the other Loan
Documents to be due and payable, in which case such amounts immediately shall
become due and payable. Except as expressly provided above in this subsection,
Borrower hereby expressly waives presentment, demand, protest and all other
notices of any kind.
9.4 Lenders' Right to Complete. Upon the occurrence and during the
continuance of any Event of Default, in addition to any other remedies which
Lenders may have pursuant to the Loan Documents, or as provided by statute or
rule of law, Agent may enter upon the Leased Premises and construct, equip and
complete Borrower's Work in accordance with the Borrower Construction Plans with
such changes in the Borrower Construction Plans as Lenders may from time to time
and in their sole discretion deem appropriate, all at the risk, cost and expense
of Borrower. Lenders shall have the right at any and all times to discontinue
any work commenced by it in respect of Borrower's Work or to change any course
of action undertaken by it and shall not be bound to Borrower by any limitations
or requirements of time whether set forth in this Agreement or otherwise.
Lenders shall have the right and power, but shall not be obligated, to assume
Borrower's interest under any contract made by or on behalf of Borrower in any
way relating to Borrower's Work or the construction of Borrower's Work and to
take over and use all or any part or parts of the labor, materials, supplies and
equipment contracted for by or on behalf of Borrower, whether or not previously
incorporated into Borrower's Work, all in the sole and absolute discretion of
Lenders. In connection with any construction of Borrower's Work undertaken by
Lenders pursuant to the provisions of this subsection, Lenders may (i) engage
builders, contractors, architects, engineers and others for the purpose of
furnishing labor, materials and equipment in connection with any construction of
Borrower's Work, (ii) pay, settle or compromise all bills or claims which may
become Liens against the Leased Premises, or any part of the Leased Premises, or
which have been or may be incurred in any manner in connection with the
construction, completion and equipping of Borrower's Work or for the discharge
of Liens or defects in the title of the Leased Premises, or any part of the
Leased Premises, and (iii) take such other action (including the employment of
watchmen to protect the Leased Premises) or refrain from acting under this
Agreement, as Lenders may in their
58
sole and absolute discretion from time to time determine without any limitation
whatsoever. Borrower shall be liable to reimburse Lenders for all sums paid or
incurred for the construction, completion and equipping of Borrower's Work,
whether such sums shall be paid or incurred pursuant to the provisions of this
subsection or otherwise. At Lenders' option, all such sums shall be treated as
advances hereunder for all purposes or as demand obligations of Borrower,
bearing interest at the non-default interest rate provided in this Agreement
plus 4% from the date of payment by Lenders to the date of repayment by
Borrower. All of the foregoing amounts, including interest, shall be deemed to
constitute advances under this Agreement, be evidenced by the Note and secured
by the Security Documents. Upon the occurrence and during the continuance of any
Event of Default, the rights, powers and privileges provided in this subsection
and all other remedies available to Lenders under this Agreement or by statute
or by rule of law may be exercised by Lenders at any time and from time to time
whether or not the Loan shall be due and payable, and whether or not Lenders
shall have instituted any foreclosure or other action for the enforcement of the
Security Documents or the Note.
9.5 Power of Attorney. For the purpose of carrying out the provisions
and exercising the rights, powers and privileges granted in this Section,
Borrower hereby irrevocably constitutes and appoints Agent, effective upon the
occurrence and during the continuance of an Event of Default, its true and
lawful attorney-in-fact to execute, acknowledge and deliver any instruments and
do and perform any acts such as are referred to in this Section in the name and
on behalf of Borrower. This power of attorney is a power coupled with an
interest and cannot be revoked.
SECTION 10. THE AGENT
---------
10.1 Appointment. Each Lender hereby irrevocably designates and
appoints Bayerische Hypotheken-Und Wechsel-Bank Aktiengesellschaft, New York
Branch as Agent of such Lender under this Agreement and the other Loan
Documents, and each such Lender irrevocably authorizes Hypo as Agent for such
Lender, to take such action on its behalf under the provisions of this Agreement
and the other Loan Documents and to exercise such powers and perform such duties
as are expressly delegated to Agent by the terms of this Agreement and the other
Loan Documents, together with such other powers as are reasonably incidental
thereto. Notwithstanding any provision to the contrary elsewhere in this
Agreement, Agent shall not have any duties or responsibilities, except those
expressly set forth herein, or any fiduciary relationship with any Lender, and
no implied covenants, functions, responsibilities, duties, obligations or
liabilities shall be read into this Agreement or any other Loan Document or
otherwise exist against Agent.
10.2 Delegation of Duties. Agent may execute any of its duties under
this Agreement and the other Loan Documents by or through agents or
attorneys-in-fact and shall be entitled to advice
59
of counsel concerning all matters pertaining to such duties. Agent shall not be
responsible for the negligence or misconduct of any agents or attorneys in-fact
selected by it with reasonable care.
10.3 Exculpatory Provisions. Neither Agent nor any of its officers,
directors, employees, agents, attorneys-in-fact or Affiliates shall be (i)
liable to any Lenders for any action lawfully taken or omitted to be taken by it
or such Person under or in connection with this Agreement or any other Loan
Document (except for its or such Person's own gross negligence or willful
misconduct) or (ii) responsible in any manner to any Lenders for any recitals,
statements, representations or warranties made by Borrower or any Partner
therein contained in this Agreement or any other Loan Document or in any
certificate, report, statement or other document referred to or provided for in,
or received by Agent under or in connection with, this Agreement or any other
Loan Document or for the value, validity, effectiveness, genuineness,
enforceability or sufficiency of this Agreement or the Notes or any other Loan
Document or for any failure of Borrower to perform its obligations hereunder or
thereunder. Agent shall not be under any obligation to any Lender to ascertain
or to inquire as to the observance or performance of any of the agreements
contained in, or conditions of, this Agreement or any other Loan Document, or to
inspect the properties, books or records of Borrower.
10.4 Reliance by Agent. Agent shall be entitled to rely, and shall be
fully protected in relying, upon any Note, writing, resolution, notice, consent,
certificate, affidavit, letter, telecopy, telex or teletype message, statement,
order or other document or conversation believed by it to be genuine and correct
and to have been signed, sent or made by the proper Person or Persons and upon
advice and statements of legal counsel (including, without limitation, counsel
to Borrower), independent accountants and other experts selected by Agent. Agent
may deem and treat the payee of any Note as the owner thereof for all purposes
unless a written notice of assignment, negotiation or transfer thereof shall
have been filed with Agent. Agent shall be fully justified in failing or
refusing to take any action under this Agreement or any other Loan Document
unless it shall first receive such advice or concurrence of the Required Lenders
as it deems appropriate or it shall first be indemnified to its satisfaction by
Lenders against any and all liability and expense which may be incurred by it by
reason of taking or continuing to take any such action. Agent shall in all cases
be fully protected by all Lenders in acting, or in refraining from acting, under
this Agreement and the Notes and the other Loan Documents in accordance with a
request of the Required Lenders, and such request and any action taken or
failure to act pursuant thereto shall be binding upon all Lenders and all future
holders of the Notes.
10.5 Notice of Default. Agent shall not be deemed to have knowledge or
notice of the occurrence of any Default or Event of Default hereunder unless
Agent has received notice from a Lender or Borrower referring to this Agreement,
describing such Default or
60
Event of Default and stating that such notice is a "notice of default". In the
event that Agent receives such a notice, Agent shall give notice thereof to
Lenders. Agent shall take such action with respect to such Default or Event of
Default as shall be reasonably directed by the Required Lenders; provided that
unless and until Agent shall have received such directions, Agent may (but shall
not be obligated to) take such action, or refrain from taking such action, with
respect to such Default or Event of Default as it shall deem advisable in the
best interests of Lenders. In no event shall Agent be required to take any such
action which it determines to be contrary to law.
10.6 Non-Reliance on Agent and Other Lenders. Each Lender expressly
acknowledges that neither Agent nor any of its officers, directors, employees,
agents, attorneys-in-fact or Affiliates has made any representations or
warranties to it and that no act by Agent hereinafter taken, including any
review of the affairs of Borrower, shall be deemed to constitute any
representation or warranty by Agent to any Lender. Each Lender represents to
Agent that it has, independently and without reliance upon Agent or any other
Lender, and based on such documents and information as it has deemed
appropriate, made its own appraisal of and investigation into the business,
operations, property, financial and other condition and creditworthiness of
Borrower and made its own decision to make its Loans hereunder and enter into
this Agreement. Each Lender also represents that it will, independently and
without reliance upon Agent or any other Lender, and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit analysis, appraisals and decisions in taking or not taking action under
this Agreement and the other Loan Documents, and to make such investigation as
it deems necessary to inform itself as to the business, operations, property,
financial and other condition and creditworthiness of Borrower. Except for
notices, reports and other documents expressly required to be furnished to
Lenders by Agent hereunder, Agent shall not have any duty or responsibility to
provide any Lender with any credit or other information concerning the business,
operations, property, condition (financial or otherwise), prospects or
creditworthiness of Borrower which may come into the possession of Agent or any
of its officers, directors, employees, agents, attorneys-in-fact or Affiliates.
10.7 Indemnification. Lenders agree to indemnify Agent in its capacity
as such (to the extent not reimbursed by Borrower and without limiting the
obligation of Borrower to do so), ratably according to their respective
Commitment Percentages in effect on the date on which indemnification is sought
under this subsection (or, if indemnification is sought after the date upon
which the Commitments shall have terminated and the Loans shall have been paid
in full, ratably in accordance with their Commitment Percentages immediately
prior to such date), from and against any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind whatsoever which may at any time (including, without
limitation, at any time following the payment of the Notes) be imposed on,
incurred by or asserted against
61
Agent in any way relating to or arising out of this Agreement, any of the other
Loan Documents or any documents contemplated by or referred to herein or therein
or the transactions contemplated hereby or thereby or any action taken or
omitted by Agent under or in connection with any of the foregoing; provided that
no Lender shall be liable for (a) the payment of any portion of such
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements resulting solely from Agent's gross negligence
or willful misconduct, (b) any loss of principal of or interest with respect to
Agent's Loans or (c) any loss suffered by Agent in connection with an interest
rate cap, swap or other interest rate hedging arrangement entered into with
Borrower. The agreements in this subsection shall survive the payment of the
Notes and all other amounts payable hereunder.
10.8 Agent in Its Individual Capacity. Agent and its Affiliates may
make loans to, accept deposits from and generally engage in any kind of business
with Borrower as though Agent were not Agent hereunder and under the other Loan
Documents. With respect to its Loans made or renewed by it and any Note issued
to it, Agent shall have the same rights and powers under this Agreement and the
other Loan Documents as any Lender and may exercise the same as though it were
not Agent, and the terms "Lender" and "Lenders" shall include Agent in its
individual capacity.
10.9 Successor Agent. Agent agrees not to resign without the prior
consent of Borrower, which consent shall not be unreasonably withheld, provided,
however, Agent shall have the right to resign without Borrower's consent if an
Event of Default has occurred and is continuing or in the event it becomes an
Affected Bank and is removed or replaced as a Lender pursuant to Section 3.16.
If Agent shall resign as Agent under this Agreement and the other Loan
Documents, then the Required Lenders shall appoint from among Lenders a
successor agent for Lenders, provided that the appointment of any successor
agent other than Hypo shall be subject to the consent of Borrower, which consent
shall not be unreasonably withheld or delayed. Upon the appointment of a
successor agent for Lenders, such successor agent shall succeed to the rights,
powers and duties of Agent, and the term "Agent" shall mean such successor agent
effective upon such appointment and approval, and the former Agent's rights,
powers and duties as Agent shall be terminated, without any other or further act
or deed on the part of such former Agent or any of the parties to this Agreement
or any holders of the Notes. After any retiring Agent's resignation as Agent,
the provisions of this subsection shall inure to its benefit as to any actions
taken or omitted to be taken by it while it was Agent under this Agreement and
the other Loan Documents.
10.10 Rights of Agent and the Lenders. Notwithstanding anything to the
contrary herein or in any other Loan Documents:
(a) with the written consent of the Required Lenders, the Agent may,
from time to time, (i) enter into with the Borrower written amendments,
supplements or modifications hereto and to
62
the Notes and the other Loan Documents, or change in any manner the rights
of the Lenders or of Borrower hereunder or thereunder (including, without
limitation, modifying any financial covenant contained herein) or (ii)
waive, on such terms and conditions as the Required Lenders or the Agent,
as the case may be, may specify in such instrument, any of the requirements
of this Agreement, the Notes or the other Loan Documents or any Default or
Event of Default and its consequences; provided, however, that no such
waiver and no such amendment, supplement or modification shall (A) without
the written consent of each Lender affected thereby (i) reduce or forgive
the amount of any Note or of any installment thereof, (ii) extend the
scheduled date of maturity of the Loans or any mandatory principal payment
thereon, (iii) reduce the stated rate of any interest or fee payable
hereunder or extend the scheduled date of any payment thereof or (iv)
forgive any portion of interest or principal, fees or other amounts due
hereunder, (B) without the written consent of all the Lenders, (i) amend,
modify or waive any provision of this subsection, (ii) reduce the number
specified in the definition of Required Lenders, (iii) consent to the
assignment or transfer by Borrower of any of its rights and obligations
under this Agreement and the other Loan Documents or (iv) release any
collateral or subordinate the Lien of the Mortgage to any other mortgage,
and (C) without the written consent of the Agent, amend, modify or waive
any provision of Section 10 of this Agreement. Any such waiver and any such
amendment, supplement or modification shall apply equally to each of the
Lenders and shall be binding upon each of the Borrower, the Lenders, the
Agent and all future holders of any of the Notes. In the case of any
waiver, the Borrower, the Lenders and the Agent shall be restored to their
former position and rights hereunder and under the outstanding Notes and
any other Loan Documents, and any Default or Event of Default waived shall
be deemed to be cured and not continuing; but no such waiver shall extend
to any subsequent or other Default or Event of Default, or impair any right
consequent thereon.
(b) In addition to the Agent, the Required Lenders shall have the
right to determine that conversion to a Eurodollar Loan is inappropriate
pursuant to subsection 3.6(a) or 3.6(b) above;
(c) If clause (b) of subsection 3.10 is invoked, the Required Lenders
shall certify that the Eurodollar Rate determined or to be determined for
such Interest Period will not adequately and fairly reflect the cost to the
Lenders of making or maintaining the affected Eurodollar Loan during the
applicable Interest Period; and
(d) Under clause (b) of Section 9.3, (i) the Agent may only accelerate
the Obligations with the consent of the Required Lenders and (ii) the Agent
shall accelerate the Obligations upon the direction of the Required
Lenders.
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10.11 Participation; Assignments. (a) Except as provided in paragraph
10.11(g), any Lender may, in the ordinary course of its commercial banking
business and in accordance with applicable law, at any time sell to one or more
banks or other entities ("Participants") participating interests in any Loan
owing to such Lender, any Note held by such Lender, any Commitment of such
Lender or any other interest of such Lender in connection with the Loans. In the
event of any such sale by a Lender of a participating interest to a Participant,
such Lender's obligations under this Agreement to the other parties to this
Agreement shall remain unchanged, such Lender shall remain solely responsible
for the performance thereof, such Lender shall remain the holder of any such
Note for all purposes under this Agreement and the other Loan Documents, and
Borrower and Agent shall continue to deal solely and directly with such Lender
in connection with such Lender's rights and obligations under this Agreement and
the other Loan Documents. Borrower agrees that each Participant shall be
entitled to the benefits of subsections 3.13, 3.14 and 3.15 with respect to its
participation in the Commitments outstanding from time to time; provided, that
no Participant shall be entitled to receive any greater amount pursuant to such
provisions than the transferor Lender would have been entitled to receive in
respect of the amount of the participation transferred by such transferor Lender
to such Participant had no such transfer been made.
(b) Except as provided in paragraph 10.11(g), any Lender, in the
ordinary course of its commercial banking business and in accordance with
applicable law, at any time and from time to time may sell to any Lender or any
Affiliate thereof without Borrower's consent or to one or more additional banks
or financial institutions with the prior written consent of Agent and Borrower,
which consent of Borrower shall not be unreasonably withheld and which consent
shall not be required during the continuance of an Event of Default ("an
Assignee") all or any part of its rights and obligations under this Agreement,
the Notes and the other Loan Documents pursuant to an Assignment and Acceptance,
substantially in the form of Exhibit C, executed by such Assignee and such
assigning Lender (and Borrower, if required) and delivered to Agent for its
acceptance and recording in the Register. Upon such execution, delivery,
acceptance and recording, from and after the effective date determined pursuant
to such Assignment and Acceptance, (x) the Assignee thereunder shall be a party
hereto and shall have the rights and obligations of a Lender hereunder with a
Commitment as set forth therein, and (y) the assigning Lender thereunder shall,
to the extent provided in such Assignment and Acceptance, be released from its
obligations under this Agreement (and, in the case of an Assignment and
Acceptance covering all or the remaining portion of an assigning Lender's rights
and obligations under this Agreement, such assigning Lender shall cease to be a
party hereto). Notwithstanding the foregoing, provided that an Event of Default
has not occurred, (a) Hypo shall retain Commitments in an amount not less than
$25,000,000 and (b) no Lender may assign any portion of its Commitment (other
than to an existing Lender) in an amount less than $15,000,000 unless it assigns
its entire Commitment.
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(c) Agent shall maintain at its address referred to in subsection 11.3
a copy of each Assignment and Acceptance delivered to it and a register (the
"Register") for the recordation of the names and addresses of Lenders and the
Commitment of, and principal amount of the Loans owing to, each Lender from time
to time. The entries in the Register shall be conclusive, in the absence of
manifest error, and Borrower, Agent and Lenders may treat each Person whose name
is recorded in the Register as the owner of the Loan recorded therein for all
purposes of this Agreement. The Register shall be available for inspection by
Borrower or any Lender at any reasonable time and from time to time upon
reasonable prior notice.
(d) Upon its receipt of an Assignment and Acceptance executed by an
assigning Lender and an Assignee (and Borrower, if required), together with
payment to Agent of a registration and processing fee of $3,000 (payable by such
assigning Lender), Agent shall (i) promptly accept such Assignment and
Acceptance and (ii) on the effective date determined pursuant thereto record the
information contained therein in the Register and give notice of such acceptance
and recordation to Lenders and Borrower. On or prior to such effective date,
Borrower shall execute and deliver to Agent (in exchange for the Note of the
assigning Lender) a new Note, as the case may be, to the order of such Assignee
in an amount equal to the Commitment or Loan, as the case may be, assumed by it
pursuant to such Assignment and Acceptance and, if the assigning Lender has
retained a Commitment or Loan hereunder, a new Note, as the case may be, to the
order of the assigning Lender in an amount equal to the Commitment or Loan, as
the case may be, retained by it hereunder. Such new Note shall be dated the date
of this Agreement, and shall otherwise be in the form of the Note replaced
thereby.
(e) Borrower authorizes each Lender to disclose to any Participant or
Assignee (each, a "Transferee") and any prospective Transferee, on a
confidential basis, any and all financial information in such Lender's
possession concerning Borrower and its Affiliates which has been delivered to
such Lender by or on behalf of Borrower pursuant to this Agreement or which has
been delivered to such Lender by or on behalf of Borrower in connection with
such Lender's credit evaluation of Borrower and its Affiliates prior to becoming
a party to this Agreement.
(f) Nothing herein shall prohibit any Lender from pledging or
assigning any Note to any Federal Reserve Bank in accordance with applicable
law, provided that no such assignment shall release such Lender from it
obligations hereunder.
(g) Notwithstanding the foregoing provisions of this Section, so long
as an Event of Default is not continuing, no Lender shall assign, grant, convey,
or transfer all or any portion of or interest (participation or otherwise) in
the Loan to any Person if such Person is a partner in Borrower. Any Person who
becomes a Lender or Participant in accordance with the terms of this Agreement
agrees to be bound by the provisions of this Paragraph and, other than in
connection with a bankruptcy proceeding of a partner in
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Borrower or during the continuance of an Event of Default, agrees not to take
any action that would make it a partner in Borrower. Any Lender may conclusively
rely upon the certificate of any proposed Transferee stating that such proposed
Transferee is not a partner in Borrower and the assigning or participating
Lender shall have no liability to Borrower or any partner in Borrower for
assigning or participating any interest in the Loan in reliance on such
certification.
10.12 Liability of Agent. Agent shall not have any liabilities or
responsibilities to Borrower on account of the failure of any Lender to perform
its obligations hereunder (without affecting any rights of Borrower hereunder)
or to any Lender on account of the failure of Borrower to perform its
obligations hereunder or under any other Loan Document.
SECTION 11. GENERAL CONDITIONS
------------------
The following conditions shall be applicable throughout the term of
this Agreement:
11.1 No Waivers. No advance of proceeds of the Loans shall constitute
a waiver of any of the conditions of Lenders' obligation to make further
advances. No waiver of any such condition shall constitute a waiver of any
Default or Event of Default related to or predicated upon such condition. Any
advance made by Lenders and any sums expended by Lenders pursuant to the Loan
Documents shall be deemed to have been made pursuant to this Agreement,
notwithstanding the existence of an uncured Default or Event of Default. No
advance of the Loans at a time when an Event of Default exists, whether or not
Lenders had actual knowledge of such default, shall constitute a waiver of any
right or remedy of Lenders existing by reason of such Event of Default,
including, without limitation, the right to accelerate the maturity of the Loan
or to foreclose the Lien of the Security Documents or to refuse to make further
advances of the Loan.
11.2 Lenders and Agent Sole Beneficiary. All conditions of the
obligation of Lenders and Agent to make advances of the Loan are imposed solely
and exclusively for the benefit of Lenders and Agent and their assigns and no
other Person shall have standing to require satisfaction of such conditions in
accordance with their terms or be entitled to assume that Lenders will refuse to
make advances in the absence of strict compliance with any or all such terms and
no Person shall, under any circumstances, be deemed to be a beneficiary of such
conditions, any or all of which may be freely waived in whole or in part by
Agent and/or Lenders at any time if in their sole discretion they deem such
waiver to be advisable. Lenders' obligation to make advances of the Loan,
subject to the terms and conditions of this Agreement, is solely for the benefit
of Borrower and no other Person shall be deemed to be a beneficiary of such
obligation nor entitled to require any advance of Loan proceeds. Inspections and
approvals of the Plans and the Improvements and the
66
workmanship and materials used in the construction of the Improvements shall
impose no responsibility or liability of any nature whatsoever on Agent and/or
Lenders, and no Person shall, under any circumstances, be entitled to rely upon
such inspections and approvals by Agent and/or Lenders for any reason. Lenders
are only obligated under this Agreement to make the advances if and to the
extent required by this Agreement.
11.3 Notices. All notices, demands, consents and approvals hereunder
shall be in writing and shall be deemed to have been sufficiently given or
served when presented personally, when delivered to an overnight courier service
with guaranteed next business day delivery or, 5 days after being deposited in
the mail, postage prepaid, certified or registered, return receipt requested,
addressed as follows:
Borrower: Taubman MacArthur Associates Limited Partnership
c/o The Taubman Company
000 Xxxx Xxxx Xxxx Xxxx, Xxxxx 000
P.O. Box 200
Bloomfield Hills, Michigan 48303-0200
Attention: Shire Xxxxxxxx
with a copy to: Xxxx Xxxxxx & Xxxxxx
Suite 100
000 Xxxxx Xxxxxxxx Xxxxxx
Xxxxxxxxxx Xxxxx, Xxxxxxxx 00000
Attention: Xxxxxx Xxxx, Esq.
Agent: Bayerische Hypotheken- Und Wechsel-Bank
Aktiengesellschaft, New York Branch
00 Xxx Xxxx
Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx Xxxxxx
with a copy to: Xxxxxxx Xxxxxxx & Xxxxxxxx
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx X. Xxxxx
provided that any notice, request or demand to or upon the Agent or Lenders
pursuant to subsection 3.1, 3.4, 3.5, 3.6 or 3.11 shall not be effective until
received. Any party may change its address by notice to the other parties.
11.4 Modifications. Neither this Agreement, any Note or any other Loan
Document, nor any terms hereof or thereof may be amended, supplemented or
modified except in a writing duly executed by Borrower and Agent in accordance
with the terms of this Agreement. Any such waiver and any such amendment,
supplement or modification shall apply equally to each of Lenders and shall be
binding upon Borrower, Lenders, Agent and all future holders of the Notes. In
the case of any waiver, Borrower, Lenders and Agent shall be restored to
67
their former position and rights hereunder and under the outstanding Notes and
any other Loan Documents, and any Default or Event of Default waived shall be
deemed to be cured and not continuing; but no such waiver shall extend to any
subsequent or other Default or Event of Default, or impair any right consequent
thereon.
11.5 Rights Cumulative. All rights, powers and remedies given to Agent
and Lenders under this Agreement are cumulative and not alternative, and are in
addition to all rights, powers and remedies otherwise afforded Agent and Lenders
under all statutes and rules of law (all rights, powers and remedies
collectively, "Lenders' Rights"); any forbearance or delay by Agent or Lenders
in exercising any of Lenders' Rights shall not be deemed to be a waiver, and the
exercise or partial exercise of any of Lenders' Rights shall not preclude the
further exercise of any of Lenders' Rights which shall continue in full force
and effect until specifically waived by an instrument in writing executed by
Agent or Lenders. All representations, warranties and covenants contained in any
of the Loan Documents shall survive the making of the Loans.
11.6 Sign. Prior to the Outside Completion Date, at Lenders' option,
Borrower will, to the extent it has the right to do so under the Agency
Documents and in compliance with Legal Requirements and at its sole cost and
expense, erect and maintain a sign on the Land indicating the source of the
construction financing, which sign shall be subject to Agent's and Borrower's
reasonable approval.
11.7 Schedules. The Schedules attached to this Agreement are essential
to and are made a part of this Agreement.
11.8 Successors and Assigns. This Agreement shall be binding upon and
inure to the benefit of Borrower, Lenders, Agent, all future holders of the
Notes and their respective successors and assigns, except that Borrower may not
assign or transfer any of its rights or obligations under this Agreement without
the prior written consent of each Lender.
11.9 Governing Law. THIS AGREEMENT IS MADE AND DELIVERED IN NEW YORK,
NEW YORK AND SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE
WITH, THE LAW OF THE STATE OF NEW YORK, WITHOUT REGARD TO PRINCIPLES OF CONFLICT
OF LAWS.
11.10 Submission to Jurisdiction. All judicial actions, suits or
proceedings brought against Borrower and its property with respect to its
obligations, liabilities or any other matter under or arising out of or in
connection with this Agreement or any other Loan Document or for recognition or
enforcement of any judgment rendered in any such proceedings may be brought in
any trial or appellate state or federal court of competent jurisdiction in the
City of New York. By execution and delivery of this Agreement, Borrower accepts,
generally and unconditionally, the non-exclusive jurisdiction of such courts and
irrevocably waives, and agrees not to plead or claim, any objection that it may
ever have to the venue of any such action or
68
proceeding in any such court or that such action or proceeding was brought in an
inconvenient court. Borrower irrevocably agrees that all process in any
proceeding or any court arising out of or in connection with this Agreement or
any of the other Loan Documents, may be effected by mailing to Borrower a copy
by registered or certified mail or any substantially similar form of mail,
postage prepaid, to Borrower at its address set forth in subsection 11.3 or at
such other address of which Lenders shall have been notified in accordance with
the terms of such subsection. Such service shall be effective ten days after
such mailing. Such service will be effective and binding service in every
respect. Borrower shall not assert that such service did not constitute
effective and binding service within the meaning of any applicable state or
federal law, rule, regulation or the like. Borrower irrevocably waives any
objections, including without limitation any objection to the laying of venue or
based on the grounds of forum non conveniens, which it may now or in the future
have to the bringing of any such action or proceeding in any such jurisdiction.
Nothing in this Agreement shall affect the right to effect service of process in
any other manner permitted by law or shall limit the right to xxx in any other
jurisdiction.
11.11 WAIVERS OF JURY TRIAL. BORROWER, Agent AND LENDERS HEREBY
IRREVOCABLY AND UNCONDITIONALLY WAIVE TRIAL BY JURY IN ANY LEGAL ACTION OR
PROCEEDING RELATING TO THIS AGREEMENT OR THE NOTES OR ANY OTHER LOAN DOCUMENT
AND FOR ANY COUNTERCLAIM THEREIN.
11.12 Captions. The captions in this Agreement are for convenience of
reference only, and in no way limit or amplify the provisions of this Agreement.
11.13 Adjustments; Set-off. (a) If any Lender (a "benefitted Lender")
shall at any time receive any payment of all or part of its Loans, or interest
thereon, or receive any collateral in respect thereof (whether voluntarily or
involuntarily, by set-off, pursuant to events or proceedings of the nature
referred to in Section 19(a)(v) of the Mortgage, or otherwise), in a greater
proportion than any such payment to or collateral received by any other Lender,
if any, in respect of such other Lender's Loans, or interest therein, such
benefitted Lender shall purchase for cash from the other Lenders a participating
interest in such portion of each such other Lender's Loan, or shall provide such
other Lenders with the benefits of any such collateral, or the proceeds thereof,
as shall be necessary to cause such benefitted Lender to share the excess
payment or benefits of such collateral or proceeds ratably with each of the
Lenders; provided, however, if all or any portion of such excess payment or
benefits is thereafter recovered from such benefitted Lender, such purchase
shall be rescinded, and the purchase price and benefits returned, to the extent
of such recovery, but without interest.
(b) In addition to any rights and remedies of Lenders provided by law,
each Lender shall have the right, without prior notice to Borrower, any such
notice being expressly waived by
69
Borrower to the extent permitted by applicable law, upon any amount becoming due
and payable by Borrower hereunder or under the Notes (whether at the stated
maturity, by acceleration or otherwise) to set-off and appropriate and apply
against such amount any and all deposits (general or special, time or demand,
provisional or final), in any currency, and any other credits, indebtedness or
claims, in any currency, in each case whether direct or indirect, absolute or
contingent, matured or unmatured, at any time held or owing by such Lender or
any branch or agency thereof to or for the credit or the account of Borrower.
Each Lender agrees promptly to notify Borrower and Agent after any such set-off
and application made by such Lender, provided that the failure to give such
notice shall not affect the validity of such set-off and application.
11.14 Counterparts. This Agreement may be executed by one or more of
the parties to this Agreement on any number of separate counterparts (including
by telecopy), and all of said counterparts taken together shall be deemed to
constitute one and the same instrument. A set of the copies of this Agreement
signed by all the parties shall be lodged with Borrower and Agent.
11.15 Severability. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
11.16 Integration. This Agreement and the other Loan Documents
represent the agreement of Borrower, Agent and the Lenders with respect to the
subject matter hereof, and there are no promises, undertakings, representations
or warranties by Agent or any Lender or Borrower relative to subject matter
hereof not expressly set forth or referred to herein or in the other Loan
Documents.
11.17 Cure Rights of Agency. Lenders agree that the Agency shall have
the right to cure any Default hereunder and under the other Loan Documents
during the applicable cure period provided herein and in the other Loan
Documents and Lenders shall accept such cure by the Agency. Notwithstanding the
foregoing, neither the Agent nor any Lender shall have any obligation to provide
a notice of default to the Agency.
11.18 Exculpation. Notwithstanding anything to the contrary contained
in this Agreement, the Notes, the Security Documents, any other Loan Documents
or any certificates, documents or instruments executed in connection with the
Loan, except as provided below, (a) no partner in Borrower nor any partner,
director, officer, trustee, shareholder, member, employee or principal in any
such partner, nor any of their successors and assigns (collectively, "Exculpated
Persons") shall have any personal liability for the payment of the Notes or any
other fee, charge or other amount which may become due under this Agreement, the
Notes, the Security
70
Documents or the other Loan Documents or for the performance of the obligations
under this Agreement, the Notes, the Security Documents or the other Loan
Documents and (b) Lenders' and Agent's sole recourse shall be against Borrower,
all of Borrower's assets, Borrower's interests in the Trust Property, the
security of any of the other Security Documents and Guarantor under the
Guaranties, and no deficiency judgment or judgment for payment of money or
damages shall lie against any Exculpated Person in any suit or action to collect
on the Notes or to foreclose upon the Mortgage or to realize upon the security
of any of the other Security Documents; provided, however, that the foregoing
shall not apply to liability (to the extent hereafter provided) arising from:
(a) the fraudulent acts and intentional misrepresentations of any
Exculpated Persons;
(b) the failure of Borrower during the continuance of an Event of
Default to apply the rents, income and other revenues of the Trust Property
to the payment of real estate taxes, operating expenses, maintenance and
other expenses of the Trust Property in accordance with the terms of the
Mortgage and to amounts due under the Loan Documents, to the extent of the
funds not so applied; and
(c) the willful failure of Borrower to apply or use any insurance
proceeds or condemnation awards or proceeds of any taking under power of
eminent domain or conveyance in lieu thereof in accordance with the terms
of the Mortgage, to the extent of the awards or proceeds not so applied.
Nothing contained in this paragraph shall (i) prevent Lenders' full recourse
against Borrower, all of Borrower's assets and Borrower's interests in the Trust
Property and the security of any of the other Loan Documents, (ii) impair the
validity of the indebtedness evidenced by the Notes, (iii) except as set forth
in this paragraph, in any way affect or impair the right of the holder of the
Notes, the Security Documents or any of the other Loan Documents to exercise any
or all of its rights under the Notes, the Security Documents or any of the other
Loan Documents, or affect or impair the obligations of Borrower hereunder so
long as recourse to any Exculpated Person is limited as aforesaid and (iv)
modify, qualify or affect in any manner whatsoever the personal recourse
undertakings, obligations and liabilities of any Person under any guaranty of
payment or other guaranty now or hereafter executed and delivered to Agent or
Lenders in connection with the Loan.
11.19 Non-Recourse to TRG Partners. Notwithstanding anything to the
contrary contained in this Agreement, in any of the other Loan Documents, or in
any other instruments, certificates, documents or agreements executed in
connection with the Loans (all of the foregoing, for purposes of this
subsection, hereinafter referred to, individually and collectively, as the
"Relevant Documents"), no recourse under or upon any Obligation, representation,
warranty, promise or other matter whatsoever shall be had against any of the
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constituent partners of the Guarantor and their successors or assigns (said
constituent partners of the Guarantor and their successors or assigns for
purposes of this subsection, hereinafter referred to, individually and
collectively, as the "TRG Partners") and each Lender expressly waives and
releases, on behalf of itself and its successors and assigns, all right to
assert any liability whatsoever under or with respect to the Relevant Documents
against, or to satisfy any claim or obligation arising thereunder against, any
of the TRG Partners or out of any assets of the TRG Partners, provided, however,
that nothing in this subsection shall be deemed to: (i) release the Guarantor or
Borrower from any personal liability pursuant to, or from any of its respective
obligations under this Agreement or the Guaranties or the other Relevant
Documents, or from personal liability for its fraudulent actions or fraudulent
omissions; (ii) release any TRG Partner from personal liability for its or his
own fraudulent actions or fraudulent omissions; (iii) constitute a waiver or
impairment of any obligation evidenced or secured by, or contained in, the
Relevant Documents or affect in any way the validity or enforceability of the
Relevant Documents; or (iv) limit the right of Agent and/or the Lenders to
proceed against or realize upon any collateral now or hereafter given for the
Loans or any and all of the assets of Borrower or the Guarantor (notwithstanding
the fact that the TRG Partners have an ownership interest in Borrower and the
Guarantor and, thereby, an interest in the assets of Borrower and the Guarantor)
or to name Borrower or the Guarantor (or, to the extent that the same are
required by applicable law or are determined by a court to be necessary parties
in connection with an action or suit against Borrower or the Guarantor or any
collateral now or hereafter given for the Loans, any of the TRG Partners) as a
party defendant in, and to enforce against any collateral now or hereafter given
for the Loans and/or assets of Borrower or the Guarantor any judgment obtained
by Agent and/or the Lenders with respect to, any action or suit under the
Relevant Documents so long as no judgment shall be taken (except to the extent
taking a judgment is required by applicable law or determined by a court to be
necessary to preserve Agent's and/or the Lenders' rights against any collateral
now or hereafter given for the Loans or Guarantor, but not otherwise) or shall
be enforced against the TRG Partners, their successors and assigns, or their
assets.
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TO CONFIRM THEIR AGREEMENT, this Agreement has been duly executed by
Lenders, Borrower and Agent as of the date first written above.
BAYERISCHE HYPOTHEKEN- UND WECHSEL-
BANK, AKTIENGESELLSCHAFT, NEW YORK
BRANCH
By: /s/ Xxxxxxx X. Xxxxxx
---------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Vice President
By: /s/ Xxxxxxx X. Xxxxxxxxx
----------------------------------
Name: Xxxxxxx X. Xxxxxxxxx
Title: Assistant Vice President
TAUBMAN MACARTHUR ASSOCIATES LIMITED
PARTNERSHIP
By: Taubman Realty Group Limited
Partnership, its general partner
By: /s/ Shire Xxxxxxxx
-----------------------------
Name: Shire Xxxxxxxx
Title: Authorized Signatory
