EXHIBIT 10.1
SECOND AMENDED AND RESTATED
SECURED REVOLVING CREDIT AGREEMENT
THIS SECOND AMENDED AND RESTATED SECURED REVOLVING CREDIT AGREEMENT, dated
as of this 30th day of September, 2005 by and among WINDROSE MEDICAL PROPERTIES,
L.P., a Virginia limited partnership and THE HUNTINGTON NATIONAL BANK, a
national banking association and each of the Lenders (as hereinafter defined)
made a party hereto from time to time, and each of their respective successors
and assigns;
WITNESSETH:
The parties hereto, in consideration of their mutual covenants hereinafter
set forth and intending to be legally bound hereby, agree as follows:
ARTICLE I
DEFINITIONS
1.01. Certain Definitions. The following words and terms shall have the
following meanings, respectively, unless the context hereof clearly otherwise
requires:
"Acquisition Price" shall mean the total costs (including, but not
limited to the purchase price, due diligence costs, legal fees, accounting
fees, loan assumption costs and expenses, closing costs and other customary
costs and expenses of closing) paid by Borrower or a Special Purpose Entity
to acquire a Real Estate Asset.
"Adjusted EBITDA" shall mean EBITDA, plus Loss on Interest Rate Swap
plus corporate general and administrative expenses.
"Affiliate" of any Person means any other Person directly or
indirectly controlling, controlled by or under common control with such
Person. A Person shall be deemed to control another Person if such Person
owns 10% or more of any class of voting securities (or other ownership
interests) of the controlled Person or possesses, directly or indirectly,
the power to direct or cause the direction of the management or policies of
the controlled Person, whether through ownership of stock, by contract or
otherwise.
"Agent" shall mean The Huntington National Bank and any successor
Agent appointed hereunder.
"Adjusted LIBOR Interest Rate" shall mean a rate per annum equal to
the quotient obtained (rounded upwards, if necessary, to the nearest
1/100th of 1%) by dividing (i) the applicable LIBOR Interest Rate by (ii)
1.00 minus the Reserve Percentage.
"Advance" shall mean an advance to the Borrower on the account of a
Loan.
"Agreement" shall mean this Second Amended and Restated Secured
Revolving Credit Agreement, as the same may be supplemented, modified or
amended from time to time.
"Appraised Value" shall mean, with respect to a Mortgaged Property,
the fair market value of such Mortgaged Property, as determined by the
appraisal or any update thereof for such Mortgaged Property, as provided in
Section 4.02 (l) hereof.
"Assignee" shall have the meaning assigned thereto in Section 10.02
hereof.
"Assignment and Acceptance" shall mean an Assignment and Acceptance
Agreement in the form attached hereto as Exhibit A.
"Assignment of Rents" shall mean an Assignment of Rents and Leases in
the form attached hereto as Exhibit B, with blanks completed appropriately,
given by the Borrower or a Special Purpose Entity, as applicable, to the
Lenders with respect to a Mortgaged Property as security for the Borrower's
obligations under the Loans, subject to such changes as may be required to
comply with the requirements of the law of the state in which such
Mortgaged Property is located, as the same may be supplemented, modified or
amended from time to time.
"Borrower" shall mean Windrose Medical Properties, L.P., a Virginia
limited partnership.
"Borrower's Affidavit" shall mean a Borrower's Closing Affidavit in
the form of Exhibit C attached hereto, with blanks completed appropriately,
given by the Borrower or a Special Purpose Entity to the Lenders with
respect to a Mortgaged Property.
"Borrowing Base" shall mean, with respect to Facility 1 only,
sixty-five percent (65%) of the aggregate Appraised Value of the Mortgaged
Properties, subject to the provisions of Section 2.01 hereof, and with
respect to Facility 1 and Facility 2, on a combined basis, eighty percent
(80%) of the aggregate Appraised Value of the Mortgaged Properties, subject
to the provisions of Section 2.01 hereof.
"Borrowing Base Certificate" shall mean a certificate in the form of
Exhibit D attached hereto executed by the Chief Executive Officer or Chief
Financial Officer of the Borrower.
"Business Day" shall mean each day excluding Saturdays, Sundays and
any other day on which Agent is closed for business to the public.
"Capital Expenditure Reserve" shall mean an amount equal to the
product of (a) $0.15 multiplied by (b) the gross rentable square footage of
the Real Estate Assets as determined from time to time by the Compliance
Certificate and identified as item E thereon.
"Capital Expenditure Reserve Factor" shall mean $0.15 per rentable
square foot.
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"Closing" shall mean the execution and delivery by the Borrower to the
Lenders of this Agreement, the Notes and the other Loan Documents.
"Closing Date" shall mean the date of the Closing.
"Collateral Assignment of Mortgaged Property Sale Agreement" shall
mean a Collateral Assignment of Mortgaged Property Sale Agreement in the
form attached hereto as Exhibit E, with blanks completed appropriately,
given by the Borrower or a Special Purpose Entity, as applicable, to the
Lenders with respect to a Mortgaged Property as security for the Borrower's
obligations under the Loans as the same may be supplemented, modified or
amended from time to time.
"Commitment" shall mean the maximum amount each Lender has agreed to
lend to Borrower as part of the Loans, as set forth below the signature
line of each Lender, subject to modification by each Assignment and
Acceptance.
"Compliance Certificate" shall mean a certificate in the form of
Exhibit F annexed hereto, executed by the chief executive officer or chief
financial officer of Borrower.
"Conditional Default" shall mean any condition, event, act or omission
which, with the giving of notice or passage of time or both, would
constitute an Event of Default.
"Consolidated Group" shall mean Guarantor, Borrower and all
Subsidiaries of Guarantor or Borrower which are consolidated with Guarantor
and/or Borrower for financial reporting purposes under GAAP. Consolidated
Group shall not include an Investment Affiliate or any other Affiliate
which is not owned 50% or more by the Borrower, Guarantor, or their
respective Subsidiaries.
"Construction Loans" shall mean financing obtained by Borrower,
Guarantor or a Special Purpose Entity to finance the costs set forth in the
Real Estate Asset Budget Amount for the construction of a Real Estate
Asset.
"Current Asset Value of Existing Real Estate Asset" shall mean, for
any calendar quarter, the current asset value of Real Estate Assets, other
than Real Estate Assets acquired during such calendar quarter, determined
from time to time by the Compliance Certificate and identified as item H
thereon.
"Debt Service Coverage Ratio" shall mean the ratio of EBITDA plus Loss
on Interest Rate Swap during the then-ending calendar quarter determined as
of the last day of such calendar quarter, annualized (multiplied by 4), to
the aggregate sum of all Interest payments and principal payments
(excluding principal payments upon maturity of a loan or voluntary
prepayments of principal) on Indebtedness of the Consolidated Group, and
the Consolidated Group's pro rata share of any Indebtedness of any
Investment Affiliate due and payable during such then-ending calendar
quarter determined as of the last day of such calendar quarter, annualized
(multiplied by 4). The first test shall be conducted for the quarter ended
September 30, 2005, and tested at each quarter end thereafter.
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"Default Rate" shall mean a rate of interest from time to time which
is Two Percent (2%) per annum above the applicable Interest Rates otherwise
then in effect.
"Defaulting Lender" shall have the meaning set forth in Section
11.5(b) hereof.
"Deposit" shall mean an xxxxxxx money deposit made by a buyer under a
Mortgaged Property Sale Agreement and held by a Title Company or by the
Borrower or Special Purpose Entity, as applicable.
"Disbursement Request" shall mean a statement of the Borrower setting
forth the amount of an Advance being requested and containing such other
information as is required by Paragraph (a) of Section 5.01 hereof.
"EBITDA" shall mean for any period, with respect to the Consolidated
Group on a consolidated basis, determined in accordance with GAAP, the sum
of the net income (or net loss) for the then-ending calendar quarter,
including the Consolidated Group's pro rata share of net income (or net
loss) in any Investment Affiliate, plus the sum of all expenses determined
in accordance with GAAP for the then-ending calendar quarter for (a)
Interest, including interest on the Mezzanine Debt upon achievement of
Stabilized Occupancy of the Real Estate Asset for which the Mezzanine Debt
has been incurred, (b) depreciation, (c) amortization, (d) all accrued or
paid taxes on or measured by income to the extent included in the
determination of such net income (or net loss), and (e) amounts
attributable to the minority interest of members of Special Purpose
Entities and other minority members or partners of Borrower, Special
Purpose Entities or Guarantor). Net income (or net loss) shall be computed
without giving effect to extraordinary losses or gains.
"Environmental Indemnity Agreement" shall mean an Environmental
Indemnity Agreement in the form attached hereto as Exhibit G, with blanks
completed appropriately, to be executed and delivered with respect to a
Mortgaged Property by a Special Purpose Entity, the Borrower and the
Guarantor to the Lenders, as the same may be supplemented, modified or
amended from time to time.
"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended.
"ERISA Affiliate" shall mean any trade or business, whether or not
incorporated, which together with the Borrower would be treated as a single
employer under ERISA.
"Event of Default" shall mean any of the events of default described
in Section 8.01 hereof.
"FEMA" shall mean the Federal Emergency Management Agency, or any
successor entity.
"Facility 1" shall mean the revolving loan under the Loan Documents
from the Lenders to the Borrower in a principal amount not to exceed Fifty
Million Dollars ($50,000,000) at any time outstanding.
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"Facility 1 and Facility 2 Combined Mortgaged Properties Debt Service"
shall mean the sum of all Interest payments and principal payments on the
outstanding aggregate principal balance of the Loans due and payable during
the then-ending calendar quarter, annualized (multiplied by 4), assuming
the level amortization of the then outstanding aggregate principal balance
of the Loans over a period of twenty-five (25) years, at a per annum
interest rate equal to One and One-Half Percent (1 1/2%) above the most
recent weekly average yield on United States Treasury Securities adjusted
to a constant maturity of ten (10) years as measured on the first day of
each calendar quarter.
"Facility 1 and Facility 2 Combined Mortgaged Properties Debt Service
Coverage Ratio" shall mean the Mortgaged Properties Net Operating Income
divide by the Facility 1 and Facility 2 Combined Mortgaged Property Debt
Service.
"Facility 1 Extended Maturity Date" shall mean September 30, 2008.
"Facility 1 Maturity Date" shall mean (a) the Facility 1 Original
Maturity Date, or (b) the Facility 1 Extended Maturity Date if the term of
Facility 1 is extended in accordance with Section 2.05 hereof.
"Facility 1 Mortgaged Properties Debt Service" shall mean the sum of
all Interest payments and principal payments on the outstanding principal
balance of Facility 1 due and payable during the then-ending calendar
quarter, annualized (multiplied by 4), assuming the level amortization of
the then outstanding principal balance of Facility 1 over a period of
twenty-five (25) years, at a per annum interest rate equal to One and
One-Half Percent (1 1/2%) above the most recent weekly average yield on
United States Treasury Securities adjusted to a constant maturity of ten
(10) years as measured on the first day of each calendar quarter.
"Facility 1 Mortgaged Properties Debt Service Coverage Ratio" shall
mean the Mortgaged Properties Net Operating Income divide by the Facility 1
Mortgaged Property Debt Service.
"Facility 1 Note" shall mean that certain Second Replacement Credit
Note in the original principal amount of Fifty Million Dollars
($50,000,000) executed and delivered by Borrower to The Huntington National
Bank of even date herewith, as the same may be renewed, extended,
supplemented, replaced, modified or amended from time to time.
"Facility 1 Original Maturity Date" shall mean September 30, 2007.
"Facility 2" shall mean the revolving loan under the Loan Documents
from the Lenders to the Borrower in a principal amount not to exceed Ten
Million Dollars ($10,000,000) at any time outstanding.
"Facility 2 Maturity Date" shall mean June 30, 2006.
"Facility 2 Note" shall mean that certain Second Replacement Credit
Note in the original principal amount of Ten Million Dollars ($10,000,000)
executed and delivered
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by Borrower to The Huntington National Bank of even date herewith, as the
same may be renewed, extended, supplemented, replaced, modified or amended
from time to time.
"Facility 3" shall have the meaning set forth in Section 2.10 hereof.
"Facility 3 Note" shall mean that certain Reimbursement Note in the
original principal amount of Three Million Dollars ($3,000,000) executed
and delivered by Borrower to The Huntington National Bank of even date
herewith, as the same may be renewed, extended, supplemented, replaced,
modified or amended from time to time.
"Fixtures" shall mean all personal property now or hereafter owned by
the Borrower or a Special Purpose Entity and now or hereafter affixed to,
incorporated into or to be incorporated into, or used or useful in
connection with, a Mortgaged Property or any part thereof, all replacements
thereof, additions thereto and substitutions therefor.
"GAAP" shall mean generally accepted accounting principles in the
United States of America in effect from time to time as promulgated by the
Financial Accounting Standards Board and recognized and interpreted by the
American Institute of Certified Public Accountants as of the end of the
first full quarter following the promulgation of such standards.
"Governmental Authorities" shall mean the United States of America,
the state and local jurisdictions in which a Mortgaged Property is located
and any political subdivision thereof, and any agency, department,
commission, board, bureau or instrumentality of any of them.
"Governmental Requirement" shall mean any law, ordinance, order, rule
or regulation of any Governmental Authority, including but not limited to
laws, ordinances, orders, rules or regulations with regard to zoning,
subdivision, building, safety, fire protection or environmental matters
applicable to a Mortgaged Property.
"Guarantor" shall mean Windrose Medical Properties Trust, a Maryland
real estate investment trust.
"Guaranty" shall mean the Second Amended and Restated Unconditional
Guaranty executed and delivered by Guarantor to the Lenders of even date
herewith, pursuant to which the Guarantor guarantees the Borrower's
obligations under the Loan Documents and the Facility 3 Note, as the same
may be supplemented, modified or amended from time to time.
"Hazardous Constituent" shall have the meaning assigned thereto under
40 C.F.R. Section 260.10.
"Hazardous Materials" shall mean, collectively, Hazardous Substances,
Hazardous Constituent and Solid Wastes.
"Hazardous Materials Laws" shall mean all laws, statutes, ordinances,
rules, regulations, permits, licenses, judgments, writs, injunctions,
decrees, orders,
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determinations, directives and standards promulgated by any governmental
authority concerning Hazardous Materials or concerning the protection of,
or regulation of the discharge of substances into, the environment or
concerning the health or safety of persons with respect to environmental
hazards, and includes, without limitation, the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, as amended by the
Superfund Amendments and Reauthorization Act of 1986, 42 U.S.C. Sections
9601 et seq., Solid Waste Disposal Act, as amended by the Resource
Conservation and Recovery Act of 1976 and Solid and Hazardous Waste
Amendments of 1984, 42 U.S.C. Sections 6901 et seq., Federal Water
Pollution Control Act, as amended by the Clean Water Act of 1977, 33 U.S.C.
Sections 1251 et seq., Clean Air Act of 1966, as amended, 42 U.S.C.
Sections 7401 et seq., Toxic Substances Control Act of 1976, 15 U.S.C.
Sections 2601 et seq., Occupational Safety and Health Act of 1970, as
amended, 29 U.S.C. Sections 651 et seq., Emergency Planning and Community
Right-to-Know Act of 1986, 42 U.S.C. Sections 11001 et seq., National
Environmental Policy of 1975, 42 U.S.C. Sections 4321 et seq., Safe
Drinking Water Act of 1974, as amended, 42 U.S.C. Section 300(f) et seq.,
the Hazardous Materials Transportation Act, 42, U.S.C. Section 1801 et
seq., the Federal Insecticide, Fungicide, and Rodenticide Act, U. S.C.
Section 7401 et seq., and any similar or implementing law of the state in
which a Mortgaged Property is located, and all amendments, rules, and
regulations promulgated thereunder or implementing the same.
"Hazardous Substances" shall mean at any time any substance, waste,
pollutant, contaminant or material, in solid, liquid or gaseous form,
which: (i) is a substance regulated or defined or designated as hazardous,
extremely or imminently hazardous, objectionable, dangerous, or toxic
pursuant to any law, by any local, state, territorial or federal
governmental authority; (ii) is a substance with respect to which such a
governmental authority otherwise requires environmental compliance,
investigation, monitoring, reporting, or remediation; including but not
limited to, (A) all substances, wastes, pollutants, contaminants and
materials regulated, or defined or designated as hazardous, extremely or
imminently hazardous, dangerous, objectionable or toxic, under any
Hazardous Materials Law; (B) petroleum and petroleum based products
including crude oil, used oil and any fractions thereof; (C) natural gas,
synthetic gas, and any mixtures thereof; (D) radon; (E) radioactive
substances and materials; (F) asbestos; (G) urea formaldehyde; (H)
polychlorinated biphenyls; (I) lead; (J) methane; (K) flammable substances
and materials; and (L) explosives.
"Improvements" shall mean the improvements located upon a Mortgaged
Property.
"Indebtedness" shall mean all obligations, contingent and otherwise,
that in accordance with GAAP should be classified upon a Person's balance
sheet as liabilities, or to which reference should be made by footnotes
thereto, including, without limitation, all of the following, whether or
not so classified: (a) all debt and similar monetary obligations, whether
direct or indirect; (b) all liabilities secured by any mortgage, pledge,
negative pledge, security interest, lien, negative lien, charge, or other
encumbrance existing on property owned or acquired subject thereto, whether
or not the liability secured thereby shall have been assumed; (c) all
guarantees, endorsements and other contingent obligations whether direct or
indirect in respect of indebtedness or obligations
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of others, including any liability as the general partner of a partnership,
any obligation to supply funds to or in any manner to invest in, directly
or indirectly, any Person, to purchase indebtedness, or to assure the owner
of indebtedness against loss, through an agreement to purchase goods,
supplies, or services for the purpose of enabling the debtor to make
payment of the indebtedness held by such owner or otherwise, and the
obligations to reimburse the issuer in respect of any letters of credit;
(d) obligations as a lessee under any "capitalized lease" (as determined in
accordance with GAAP); (e) all subordinated debt; (f) all obligations in
respect of deferred purchase prices; (g) all obligations to contribute
money; (h) all obligations under interest rate swaps and similar
agreements; and (i) such Person's liabilities, contingent or otherwise of
the type set forth in (a) through (h) above, under any joint venture,
limited liability company or partnership agreement. Indebtedness shall not
include proceeds from the issuance of preferred stock if such proceeds are
classified as equity under GAAP.
"Inspecting Architect" shall mean an independent architectural or
engineering firm employed by the Agent with respect to a Mortgaged
Property. The Borrower may submit to the Agent a list of suggested
architectural and engineering firms for consideration by the Agent. The
Agent shall not, however, be obligated to select or retain an Inspecting
Architect from such list.
"Interest" shall mean, for any period, the sum of all interest due and
payable for such period (including amortization of original issue discount
and debt issuance costs on any Indebtedness and the interest portion of any
deferred payment obligation, calculated in accordance with generally
accepted accounting principles), capitalized interest and non-cash interest
expenses, all commissions, discounts and other fees and expenses owed with
respect to letters of credit and bankers' acceptance financing, the net
costs associated with any type of interest rate protection agreements
(including caps, swaps, options, futures or similar agreements or
arrangements with respect to interest rates), and all but the principal
component of rentals in respect of "capitalized leases" (determined in
accordance with GAAP) paid, accrued or due to be paid or to be accrued
during such period.
"Interest Rate" shall mean, as to each Advance, a rate per annum equal
to (i) for Prime Advances, the Prime Interest Rate and (ii) for LIBOR
Advances, the Adjusted LIBOR Interest Rate.
"Interest Rate Protection Product" shall mean an interest rate hedging
program through the purchase of an interest rate swap, cap or other such
interest rate protection product with respect to any Indebtedness during
the term of the Loans plus one (1) day.
"Investment Affiliate" shall mean any Person in which the Consolidated
Group, directly or indirectly, has an ownership interest, whose financial
results are not consolidated under GAAP with the financial results of the
Consolidated Group.
"Lease" shall mean a lease of all or a portion of a Mortgaged Property
(excluding any incidental real estate which is contiguous to the leased
real estate and improvements and which the Borrower or a Special Purpose
Entity is or was required to purchase as part
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of the acquisition of the leased real estate and improvements) entered into
in the ordinary course of business by and between the Borrower or a Special
Purpose Entity, as applicable, as landlord, and a Tenant, as tenant.
"Lenders" shall mean The Huntington National Bank, a national banking
association, and any successor thereto or any holder(s) of the Loans (or
any portion thereof) from time to time who is an Assignee.
"Letters of Credit" shall mean Standby Letters of Credit issued by
Agent on behalf of Lenders at the request of Borrower and Guarantor not
exceeding the aggregate sum of Three Million Dollars ($3,000,000) pursuant
to Section 2.10 hereof.
"Leverage Ratio" shall mean the ratio of (a) Total Current Value of
Assets to (b) Total Liabilities as such ratio shall be determined from time
to time in accordance with this Agreement and calculated in the manner set
forth in the Compliance Certificate.
"LIBOR" shall mean the average (rounded upward to the nearest 1/16 of
1%) of the per annum rates at which deposits in immediately available funds
in U.S. dollars for the applicable LIBOR Interest Period and in the amount
of the applicable LIBOR Advance are offered to the Agent by prime banks in
the London interbank Eurodollar market, determined as of 11:00 a.m. London
time (or as soon thereafter as practicable) two (2) London Banking Days
prior to the beginning of the applicable LIBOR Interest Period.
"LIBOR Advance" shall mean any Advance which is determined with
reference to the Adjusted LIBOR Interest Rate.
"LIBOR Interest Period" shall mean a period of one (1) month, two (2)
months, three (3) months, or six (6) months as selected by the Borrower.
"LIBOR Interest Rate" shall mean, (a) with respect to Facility 1, a
rate per annum equal to (i) one hundred fifty (150) basis points above
LIBOR at such time as the Leverage Ratio is less than Forty Percent (40%),
(ii) one hundred sixty-five (165) basis points above LIBOR at such time as
the Leverage Ratio equals or exceeds Forty Percent (40%) but is less than
Fifty-Five Percent (55%), (iii) two hundred (200) basis points above LIBOR
at such time as the Leverage Ratio equals or exceeds fifty-five percent
(55%), but is less than sixty-five percent (65%), and (iv) two hundred
fifty (250) basis points above LIBOR at such time as the Leverage Ratio
equals or exceeds Sixty-Five Percent (65%) or in the event Borrower fails
to provide Agent with the Compliance Certificate in accordance with the
terms hereof; and (b) with respect to Facility 2, a rate per annum equal to
two hundred seventy-five (275) basis points above LIBOR.
"Loan Documents" shall mean, this Agreement, the Notes, Mortgages,
Assignments of Rents, Collateral Assignments of Mortgaged Property Sale
Agreements, Guaranty, Borrower's Affidavits, Environmental Indemnities, the
Pledge Agreements and other documents executed and/or delivered by or on
behalf of the Borrower, the Guarantor or a Special Purpose Entity in
connection with the Loans or any Advance
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which are in effect from time to time, as the same may be supplemented,
modified or amended from time to time.
"Loan" shall mean, singly, Facility 1 or Facility 2.
"Loans" shall mean, together, Facility 1 and Facility 2.
"London Banking Day" shall mean a day on which commercial banks are
open for business in London, England, and quoting deposit rates for U.S.
dollar deposits.
"Loss on Interest Rate Swap" shall mean the loss recognized currently
in earnings pursuant to compliance with Statement of Financial Accountings
Standard No. 133, "Accounting for Derivative Instruments and Hedging
Activities."
"Major Lease" shall mean a Lease between Borrower or a Special Purpose
Entity, as applicable, and a Major Tenant.
"Major Tenant" shall mean any Tenant occupying twenty-five percent
(25%) or more of a Mortgaged Property.
"Material Adverse Effect" shall mean any fact or circumstance which
(a) materially and adversely effects the business, operation, property or
financing conditions of the Borrower and Guarantor taken as a whole, or (b)
has a material adverse effect on the ability of the Borrower, Guarantor or
a Special Purpose Entity to perform their respective obligations under this
Agreement, the Notes or the other Loan Documents.
"Mezzanine Debt" shall mean Indebtedness of Borrower to The Huntington
Real Estate Investment Company or to other financial institutions
acceptable to Agent not to exceed the sum of Fifteen Million Dollars
($15,000,000) in the aggregate, which Indebtedness is secured by equity
interests in entities having Indebtedness secured by mortgages and which
Indebtedness is subordinate to such mortgage debt and which Indebtedness
shall have terms not to exceed the Facility 2 Maturity Date.
"Monetary Event of Default" shall mean an Event of Default under
Section 8.01(a) hereof or any other Event of Default which can be cured by
the payment of money.
"Mortgage" shall mean a Real Estate Mortgage and Security Agreement
substantially in the form of Exhibit H-1 attached hereto, with blanks
completed appropriately, or a Deed of Trust and Security Agreement
substantially in the form of Exhibit H-2 attached hereto, with blanks
completed appropriately, given by the Borrower or a Special Purpose Entity,
as applicable, to the Lenders with respect to a Mortgaged Property as
security for the Borrower's obligations under the Loans, subject to such
changes as may be required to comply with the requirements of the laws of
the state in which the Mortgaged Property is located, as the same may be
supplemented, modified or amended from time to time.
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"Mortgage Release Price" shall mean with respect to a Mortgaged
Property, an amount equal to the principal reduction required to allow
Borrower to remain in compliance with the Borrowing Base and the Debt
Service Coverage Ratio as set forth in this Agreement determined in
accordance with Section 2.07 (b) hereof.
"Mortgaged Property" shall mean all Real Estate Assets securing the
Loans by virtue of a Mortgage.
"Mortgaged Properties Net Operating Income" shall mean the total
rental income during the then-ending calendar quarter, annualized
(multiplied by 4) (including minimum rent, additional rent, common area
maintenance, real estate tax and insurance reimbursements and other tenant
reimbursements, including tenant expense reimbursements and tenant
improvement reimbursements, recurring parking income), received by Borrower
and each Special Purpose Entity, as applicable, and arising from the
ownership and operation of the Mortgaged Properties (excluding tenant
security deposits, rents from tenants that are subject to a voluntary or
involuntary petition for relief under any federal or state bankruptcy codes
or insolvency laws, and rents from tenants that are not in possession of
its demised premises, except rents and other payments from tenants under
master leases or occupancy agreements approved by Agent), less the sum of
all actual costs, taxes, expenses and disbursements paid or due and payable
during such then-ending calendar quarter, annualized (multiplied by 4), in
connection with the ownership, leasing, management, operation, maintenance
and repair of the Mortgaged Properties and of the personal property,
fixtures, machinery, equipment, systems and apparatus located therein or
used in connection therewith, but excluding (i) non-cash expenses, such as
depreciation and amortized costs, (ii) state and federal income taxes,
(iii) the non-current portion of capital expenditures, (iv) any expenses
paid directly by tenants to third parties, (v) any adjustments made for
straight lining of rents, (vi) extraordinary income or expense, and (vii)
debt service payments on all Indebtedness of Borrower with respect to the
Mortgaged Properties; all determined in accordance with GAAP, as measured
on the last day of each calendar quarter.
"Mortgaged Property Sale Agreement" shall mean with respect to a
Mortgaged Property, an agreement between the Borrower or a Special Purpose
Entity, as applicable, and a buyer not affiliated with the Borrower or the
Guarantor which is approved by the Agent in a form reasonably acceptable to
the Agent, pursuant to which agreement the Borrower or a Special Purpose
Entity, as applicable, agrees to sell, and such buyer agrees to purchase, a
Mortgaged Property. Such sale agreement shall require the buyer thereunder
to deposit a Deposit with the Borrower or a Special Purpose Entity, as
applicable, or a Title Company or other escrow agent. Such term shall also
include the exercise of a right of first refusal or purchase option in a
lease of a Mortgaged Property held by a Major Tenant.
"Mortgaged Property Site" shall mean the real estate portion of a
Mortgaged Property.
"Non-Monetary Event of Default" shall mean any Event of Default, other
than a Monetary Event of Default.
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"Notes" shall mean. together, the Facility 1 Note and the Facility 2
Note.
"PBGC" shall mean the Pension Benefit Guaranty Corporation established
pursuant to ERISA, or any successor entity.
"Percentage" shall mean, with respect to each Lender, the percentage
which its Commitment constitutes of the maximum aggregate amount of the
Loans as set forth below the signature line of each Lender as the same may
be adjusted from time to time.
"Person" shall mean an individual, a partnership, a joint venture, a
corporation, a limited liability company, a trust, an unincorporated
organization or a Governmental Authority.
"Personal Property" shall mean all tangible personal property owned by
the Borrower or a Special Purpose Entity and now or at any time hereafter
located on or at a Mortgaged Property or used in connection therewith or
with the improvements forming a part of such Mortgaged Property.
"Plan" shall mean an Employee Benefit Plan which is covered by Title 4
of ERISA or subject to the minimum lending standards under Section 412 of
the Internal Revenue Service as to which the Borrower may have any
liability.
"Plans and Specifications" shall mean the plans and specifications for
the construction of the Improvements forming part of an applicable
Mortgaged Property prepared by the architect therefor approved by Borrower.
"Pledge Agreements" shall mean certain Membership Pledge Agreements
now or hereafter executed by Borrower in favor of Lenders pursuant to which
Borrower pledges its membership interest in Special Purpose Entities.
"Prime Advance" shall mean any Advance which is determined with
reference to the Prime Rate.
"Prime Interest Rate" shall mean a rate per annum equal to the Prime
Rate.
"Prime Rate" shall mean the interest rate per annum announced from
time to time by the Agent as its prime rate. Each interest rate determined
by reference to the Prime Rate shall change automatically from time to
time, effective as of the effective date of each change in the Prime Rate.
The Agent's Prime Rate is not necessarily the lowest rate at which the
Agent lends its funds. The Prime Rate is only an index rate from which
interest rates actually charged to the Agent's customers may be measured.
The use of the Prime Rate does not constitute a commitment by the Agent to
lend money at a preferred rate.
"Prohibited Transaction" shall have the meaning ascribed thereto by
ERISA.
"Project Agreement" shall mean a Project Agreement in the form of
Exhibit I attached hereto, with blanks completed appropriately, to be
entered into by the Agent and
12
the Borrower and a Special Purpose Entity, pursuant to which the Required
Lenders approve a Mortgaged Property.
"Real Estate Asset" shall mean the real estate and all improvements
thereon for use as a medical related facility owned by the Consolidated
Group, together with any incidental real estate which is contiguous to the
leased real estate and improvements and which Consolidated Group is or was
required to purchase as part of the acquisition of the leased real estate
and improvements.
"Real Estate Asset Budget Amount" shall mean the total budgeted cost
(as such budget shall be updated from time to time) of all projects under
construction owned by the Consolidated Group plus the Consolidated Group's
pro rata share of the total budgeted cost (as such budget shall be updated
from time to time) of all projects under construction owned by any
Investment Affiliate or by any Subsidiary of the Consolidated Group that is
not a wholly owned Subsidiary provided, however, that with respect to (i)
projects owned by any such Investment Affiliate or Subsidiary for which the
respective financial responsibilities of the other owners of such
Investment Affiliate or Subsidiary on the one hand and the Consolidated
Group and its wholly owed Subsidiaries on the other hand are not in
proportion to the respective ownership interests in the applicable
Investment Affiliate or Subsidiary, then the portion of budgeted cost of
such project included in the Real Estate Asset Budget Amount shall be
adjusted to reflect the Consolidated Group's actual financial
responsibility related to such project. Such costs shall include, without
limitation, all land acquisition costs (but may exclude costs of land used
for expansion projects which was not purchased for the purpose of such
expansion project), design and permitting costs, construction period real
estate taxes, leasing costs including brokers' commissions and tenant
improvements, allowances or reimbursements, construction costs and opening
costs. With respect to any projects financed with Indebtedness other than
the Loans, such costs shall also include construction period interest and
all fees and expenses associated with such Indebtedness.
"Recourse Indebtedness" shall mean any Indebtedness of the Borrower,
Guarantor or Special Purpose Entity, including the Borrower's, Guarantor's
or Special Purpose Entity's respective recourse pro rata share of any
Indebtedness in any Investment Affiliate, for which the lender thereof does
not agree to look solely to a Real Estate Asset for the payment of the
indebtedness subject to usual and customary exculpation carve out
provisions and environmental indemnification agreements.
"Regulation U" shall mean Regulation U of the Board of Governors of
the Federal Reserve System, as amended from time to time.
"Reportable Event" shall have the meaning ascribed thereto by ERISA.
"Restricted Assets" shall have the meaning set forth in Section 7.07
hereof.
"Required Lenders" shall mean Lenders holding Percentages aggregating
at least Sixty-Six and Two-Thirds Percent (66-2/3%) or greater.
13
"Reserve Percentage" shall mean for any day that percentage (expressed
as a decimal) which is in effect on such day, as prescribed by the Board of
Governors of the Federal Reserve System (or any successor) for determining
the maximum reserve requirement (including, without limitation, all basic,
supplemental, marginal and other reserves and taking into account any
transitional adjustments or other scheduled changes in reserve
requirements) for a member of the Federal Reserve System in Cleveland,
Ohio, in respect of "Eurocurrency Liabilities." The Adjusted LIBOR Interest
Rate shall be adjusted automatically on and as of the effective date of any
change in the Reserve Percentage.
"Single Mortgaged Property Debt Service" shall mean the total sum of
all Interest payments and principal payments which would be due and payable
during the then-ending calendar quarter, annualized (multiplied by 4), with
respect to a single Mortgaged Property assuming the level amortization of a
principal loan balance equal to Sixty-Five Percent (65%) of the Appraised
Value of such Mortgaged Property over a period of twenty-five (25) years,
at a per annum interest rate equal to One and One-Half Percent (1 1/2%)
above the most recent weekly average yield on United States Treasury
Securities adjusted to a constant maturity of ten (10) years as measured on
the last day of each calendar quarter.
"Single Mortgaged Property Debt Service Coverage Ratio" shall mean the
Single Mortgaged Property Net Operating Income divided by the Single
Mortgaged Property Debt Service.
"Single Mortgaged Property Net Operating Income" shall mean the total
rental income, with respect to a Mortgaged Property during the then-ending
calendar quarter, annualized (multiplied by 4) (including minimum rent,
additional rent, common area maintenance, real estate tax and insurance
reimbursements and other tenant reimbursements, including tenant expense
reimbursements and tenant improvement reimbursements, recurring parking
income), received by Borrower and each Special Purpose Entity, as
applicable, arising from the ownership and operation such Mortgaged
Property (excluding tenant security deposits, rents from tenants that are
subject to a voluntary or involuntary petition for relief under any federal
or state bankruptcy codes or insolvency laws and rents from tenants that
are not in possession in its demised premises at such Mortgaged Property,
except rents and other payments from tenants under master leases or
occupancy agreements approved by Agent), less the sum of actual costs,
taxes, expenses and disbursements paid or due and payable during such
then-ending calendar quarter, annualized (multiplied by 4), in connection
with the ownership, leasing, management, operation, maintenance and repair
of such Mortgaged Property and of the personal property, fixtures,
machinery, equipment, systems and apparatus located therein or used in
connection therewith, but excluding (i) non-cash expenses, such as
depreciation and amortized costs, (ii) state and federal income taxes,
(iii) the non-current portion of capital expenditures, (iv) any expenses to
be paid directly by tenants to third parties, (v) any adjustments made for
straight lining of rents, (vi) extraordinary income or expense, and (vii)
the Single Mortgaged Property Debt Service for such Mortgaged Property, all
determined in accordance with GAAP, as measured on the last day of each
calendar quarter.
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"Solid Wastes" shall have the meaning assigned thereto in 40
C.F.R. Section 261.2.
"Special Purpose Entities" shall mean limited liability companies or
limited partnerships which own a Mortgaged Property and in which Borrower
holds a controlling interest.
"Stabilized Occupancy" shall mean, with respect to a Real Estate Asset
under construction, the time when such Real Estate Asset has received a
certificate of occupancy (or similar permit or approval).
"Storage Containers" shall mean existing and future containers for
Hazardous Materials and above ground and underground storage tank systems
(including underground piping, conduits or sumps).
"Subordination, Non-Disturbance and Attornment Agreement" shall mean a
Subordination, Non-Disturbance and Attornment Agreement in the form of
Exhibit J attached hereto, with blanks completed appropriately, entered
into by the Agent, the Borrower or a Special Purpose Entity, as applicable,
and a Major Tenant with respect to a Mortgaged Property, subject to such
changes as may be required to comply with the requirements of the law of
the state in which the Mortgaged Property is located and such other
revisions as may be reasonably acceptable to Agent, as the same may be
supplemented, modified or amended from time to time.
"Subsidiary" shall mean, with respect to any Person, (i) any
corporation more than 50% of the outstanding securities having ordinary
voting power of which shall at the time be owned or controlled, directly or
indirectly, by such Person or by one or more of its Subsidiaries or by such
Person and one or more of its Subsidiaries, or (ii) any partnership,
limited liability company, association, joint venture or similar business
organization more than 50% of the ownership interests having ordinary
voting power of which shall at the time be so owned or controlled. Unless
otherwise expressly provided, all references herein to a "Subsidiary" shall
mean a Subsidiary of the Borrower and/or Guarantor. Subsidiaries of a
Person shall not include an Investment Affiliate or any other Affiliate
which is not owned 50% or more directly by a Person.
"Tangible Net Worth" shall mean the sum of capital surplus, earned
surplus, capital stock, accumulated depreciation and amortization minus
deferred charges, intangibles (excluding lease intangibles and deferred
loan fees) and treasury stock, all as determined in accordance with GAAP
consistently applied.
"Tenant" shall mean any tenant of a Mortgaged Property.
"Title Company" shall mean with respect to a Mortgaged Property, any
title insurer designated by the Borrower and approved by the Agent which
agrees to insure the priority of the lien of the Mortgage on such Mortgaged
Property.
"Title Policy" shall mean with respect to a Mortgaged Property, the
policy of title insurance issued by a Title Company to the Lenders insuring
the priority of the lien of the Mortgage on such Mortgaged Property.
15
"Total Current Value of Assets" shall be the amount determined from
time to time by the Compliance Certificate and identified as item N
thereon.
"Total Current Value of Real Estate Assets" shall be the amount
determined from time to time by the Compliance Certificate and identified
as item K thereon.
"Total Liabilities" shall mean all liabilities of the Consolidated
Group, including the pro rata share of any liabilities of the Consolidated
Group in any Investment Affiliate, all as determined in accordance with
GAAP.
"Unrestricted Cash and Cash Equivalents" shall mean unencumbered cash
on hand plus cash reserved for the payment of taxes, tenant improvements,
capital expenditures, lease commissions or other reserves available to
offset expenditures generally recognized as property operating expenses, or
other general and administrative expenses.
"Variable Rate Indebtedness" shall mean Indebtedness which does not
bear interest at a fixed rate of interest and is not covered by an Interest
Rate Protection Product.
"Wetlands" shall mean any wetlands area or other area which is subject
to the regulatory jurisdiction of the United States Environmental
Protection Agency and/or Army Corps of Engineers and/or any other
Governmental Authority, under any Governmental Requirement, including,
without limitation, the Clean Water Act, 33 U.S.C. Section 1251, et. seq.
Unless the context clearly otherwise requires, the foregoing definitions
shall be equally applicable to both the singular and plural forms.
ARTICLE II
THE LOANS
2.01. Facility 1. Subject to the terms and conditions hereof, and relying
upon the representations and warranties herein set forth, the Lenders agree to
make Facility 1 to the Borrower. The principal amount of Facility 1 outstanding
at any time shall not exceed the lesser of: (a) Fifty Million Dollars
($50,000,000), or (b) the Borrowing Base (as the same may be adjusted as set
forth below in this Section 2.01). The proceeds of Facility 1 will be used
solely for the acquisition and development by the Borrower, as applicable, of
Real Estate Assets and for working capital purposes as described herein. The
proceeds of Facility 1 will be advanced to the Borrower in accordance with and
subject to the requirements and limitations set forth herein. Advances of
Facility 1 will be made to Borrower for working capital purposes provided such
Advances shall not exceed Five Million Dollars ($5,000,000) at any one time. If
prior to the Facility 1 Maturity Date, the Borrower repays any Advance(s) of
Facility 1, or any portion thereof, loan proceeds in an amount equal to the
amount of the repayment will again be made available to the Borrower for
Advances, subject to the terms and conditions hereof.
In the event a Single Mortgaged Property Debt Service Coverage Ratio is
less than 1.25 to 1.00, the Borrowing Base shall be reduced to an amount
sufficient to support a 1.40 to 1.0
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Single Mortgaged Property Debt Service Coverage Ratio with respect to the
subject Mortgaged Property until such time as such Mortgaged Property achieves a
1.40 to 1.0 Single Mortgaged Property Debt Service Coverage Ratio. By way of
illustration, assume a Single Mortgaged Property has (i) an Appraised Value of
$1,000,000; (ii) an initial Borrowing Base Value of $650,000 (65% of Appraised
Value); (iii) an initial Single Mortgaged Property Debt Service of $50,256
(assuming an interest rate of six percent (6%) for this example); and (iv)
single Mortgaged Property Net Operating Income of $62,820 (or, 1.25 to 1.0 of
the Single Mortgaged Property Debt Service Ratio). If the Single Mortgaged
Property Net Operating Income decreases to $55,000 (a Single Mortgaged Property
Debt Service Ratio below 1.25 to 1.0 using a Borrowing Base Value of $650,000
and a debt constant of $50,256), then the required Single Mortgaged Property
Debt Service Ratio is adjusted to 1.4 to 1.0 Assuming net operating income to
$55,000, then the Borrowing Base value for this property is reduced to $508,117.
At 1.40 to 1.0, net operating income of $55,000 supports a Single Mortgaged
Property Debt Service of $39,285, which is a Borrowing Base Value of $508,117
(at the assumed interest rate). The Single Mortgaged Property Debt Service Ratio
will remain at 1.40 to 1.0 until the Borrowing Base Value for such property
equals $650,000. Thereafter, the Borrowing Base Value (subject to the 65%)
limit) shall be calculated based on the actual Single Mortgaged Property Debt
Service unless and until the Single Mortgaged Property Debt Service falls below
1.25 to 1.0 at which time the Single Mortgaged Property Debt Service Ratio shall
return to 1.4 to 1.0.
In the event of an occurrence of an event which has a Material Adverse
Effect upon a Special Purpose Entity and the same is not cured within sixty (60)
days after notice by Agent to Borrower, the Borrowing Base will be reduced by
sixty percent (60%) of the Appraised Value of the applicable Mortgaged Property.
2.02. Facility 2. Subject to the terms and conditions hereof, and relying
upon the representations and warranties herein set forth, the Lenders agree to
make Facility 2 to the Borrower. The principal amount of Facility 2 outstanding
at any time shall not exceed Ten Million Dollars ($10,000,000) and the principal
amount of Facility 2 on a combined basis with Facility 1 shall not exceed the
Borrowing Base. The proceeds of Facility 2 will be used solely for the
acquisition and development by the Borrower of Real Estate Assets as described
herein. The proceeds of Facility 2 will be advanced to the Borrower in
accordance with and subject to the requirements and limitations set forth
herein. If prior to the Facility 2 Maturity Date, the Borrower repays any
Advance(s) of Facility 2, or any portion thereof, loan proceeds in an amount
equal to the amount of the repayment will again be made available to the
Borrower for Advances, subject to the terms and conditions hereof.
2.03. Notes. Facility 1 and all Advances thereunder shall be evidenced by
the Borrower's receipts and the Facility 1 Note, and Facility 2 and all Advances
thereunder shall be evidenced by the Borrower's receipts and the Facility 2
Note. Borrower agrees that if after the Closing Date an Assignee becomes a
Lender in accordance with the terms of this Agreement, Borrower shall execute
Notes payable to the order of such Lender in the principal amount of its
Commitment (i.e., its share of the Loans). Borrower further agrees that if a
Lender's Commitment hereafter increases or decreases pursuant to an assignment
complying with the terms of Article X hereof, Borrower agrees to execute
replacement Notes (substantially in the form of the Notes executed by Borrower
payable to The Huntington National Bank of even date
17
herewith) payable to the order of such Lender in the principal amount of such
revised Commitment.
2.04. Rate of Interest. During the term of a Loan, the unpaid principal
amount thereof shall, subject to the terms and conditions hereinafter set forth,
bear interest on a basis selected by the Borrower from the following interest
rate selections: (a) the Adjusted LIBOR Interest Rate; and (b) the Prime
Interest Rate.
Each Advance of a Loan shall be made as either a Prime Advance or a LIBOR
Advance, as selected by the Borrower. The Borrower may have Prime Advances and
LIBOR Advances outstanding simultaneously; provided, however, the Borrower may
not have more than five (5) LIBOR Advances of a Loan in existence at any time
and each LIBOR Advance must be in an amount which is greater than or equal to
$1,000,000. The Borrower may convert any Prime Advances aggregating at least
$1,000,000 in principal amount into a LIBOR Advance on the first day of a
calendar month. At the end of the LIBOR Interest Period applicable to a LIBOR
Advance, the Borrower may renew the LIBOR Advance or may convert the LIBOR
Advance to a Prime Advance. If the Borrower fails to renew any LIBOR Advance or
if the Borrower shall receive any new Advance without designating whether such
Advance is a LIBOR Advance or a Prime Advance, such Advance shall automatically
be deemed to be a Prime Advance. At any time that the Borrower desires a LIBOR
Advance or intends to renew a LIBOR Advance or convert a Prime Advance into a
LIBOR Advance, the Borrower must notify the Agent by a Notice of Pricing
Election in the form attached hereto as Exhibit L at least three (3) London
Banking Days prior to the day on which the Borrower desires such Advance,
renewal or conversion to be effective. The Borrower shall have no right to
designate a new Advance as, or convert an existing Prime Rate Advance to, a
LIBOR Advance if an Event of Default is then continuing. The Borrower shall have
no right to select a LIBOR Interest Period for a LIBOR Advance if such LIBOR
Interest Period would extend beyond the Maturity Date.
While and so long as no Event of Default is continuing, interest shall
accrue at the applicable Interest Rates upon the daily principal balance of each
Loan, based on a three hundred sixty (360) day year, for the actual number of
days elapsed since the date to which interest has been paid.
If a Lender shall determine, after the date hereof, that the adoption of
any applicable law, rule, regulation or guideline regarding capital adequacy, or
any change therein, or any change in the interpretation or administration
thereof by any governmental authority, central bank or comparable agency charged
with the interpretation or administration thereof, or compliance by such Lender
(or such Lender's lending office) with any request or directive regarding
capital adequacy (whether or not having the force of law) of any such authority,
central bank or comparable agency, has or would have the effect of reducing the
rate of return on such Lender's capital (or on the capital of a Lender's holding
company) as a consequence of the Loan to a level below that such Lender (or such
Lender's holding company) could have achieved but for such adoption, change or
compliance (taking into consideration such Lender's policies or the policies of
such Lender's holding company with respect to capital adequacy) by an amount
deemed by such Lender to be material, then from time to time, within fifteen
(15) days after demand by such Lender, the Borrower shall either (a) pay to such
Lender such additional amount or amounts as will compensate such Lenders (or
such Lender's holding company) for such reduction, or (b)
18
convert all LIBOR Advances to a Prime Advance. If the Borrower elects the option
provided in the foregoing subparagraph (b), the Borrower shall not be subject to
the requirement hereunder that the Borrower reimburse such Lender for any loss,
cost or expense incurred by such Lender as a result of the Borrower paying a
LIBOR Advance prior to the end of the applicable LIBOR Interest Period,
provided, however, thereafter the Borrower may not elect for any Advances to be
LIBOR Advances. A Lender will designate a different lending office if such
designation will avoid the need for, or reduce the amount of, such compensation
and will not, in the judgment of such Lender, be otherwise disadvantageous to
such Lender. In determining such amount, a Lender may use any reasonable
averaging and attribution methods. Failure on the part of a Lender to demand
compensation for any reduction in return on capital with respect to any period
shall not constitute a waiver of such Lender's rights to demand compensation for
any reduction in return on capital in such period or in any other period. The
protection of this Section shall be available to the Lenders regardless of any
possible contention of the invalidity of the law, regulation or other condition
which shall have been imposed.
2.05. Maturity Dates. If not sooner paid, all Advances of Facility 1 shall
be due and payable on the Facility 1 Original Maturity Date. Borrower shall have
the option to extend the term of Facility 1 from the Facility 1 Original
Maturity Date to the Facility 1 Extended Maturity Date upon satisfaction of the
following conditions: (a) Borrower shall give the Agent written notice of
Borrower's election to extend the term of Facility 1 no earlier than thirty (30)
days prior to the Facility 1 Original Maturity Date; (b) no Event of Default or
Conditional Default is then continuing; and (c) Borrower shall pay to Agent on
the Facility 1 Original Maturity Date an extension fee in an amount equal to
twenty-five (25) basis points of the maximum principal amount of Facility 1.
If not sooner paid, all Advances of Facility 2 shall be due and payable on
the Facility 2 Maturity Date.
2.06. Interest Payments. The Borrower shall pay interest to the Agent at
the applicable Interest Rates on the outstanding principal balance of a Loan on
the first (1st) day of each calendar month while proceeds of such Loan remain
outstanding, commencing on the first (1st) day of the first (1st) calendar month
following the first Advance of such Loan.
2.07. Principal Payments. Except as set forth herein, all payments of
principal shall be first applied to the reduction of Advances for working
capital purposes or as otherwise directed by Borrower. Upon the sale of a
Mortgaged Property, the Borrower shall pay to the Agent an amount equal to the
Mortgage Release Price payable in respect thereof, and such Mortgage Release
Price payment when received by the Agent, shall be applied in reduction of the
principal balance of the Loans in such order as Agent may determine in its sole
discretion. Notwithstanding the foregoing provisions, during the continuance of
an Event of Default, any Mortgage Release Price payment received by the Agent
may be applied, in the discretion of the Lenders, in reduction of any accrued
and unpaid interest on the Loans or any outstanding Advance made pursuant to
Section 5.01(c) hereof, so long as the Agent provides to Borrower all documents
necessary to release the Mortgaged Property being sold.
At the request of the Agent, the Borrower will furnish to the Agent copies
of any closing statement, purchase agreement and similar documents relating to
the sale of a Mortgaged
19
Property prior to the release by the Agent of the security with respect to such
Mortgaged Property.
During the term of the Loans, upon the Agent's receipt of the Mortgage
Release Price with respect to a Mortgaged Property, the Agent will release the
applicable Mortgaged Property and all other security of the Lenders encumbering
such Mortgaged Property by the prompt delivery of appropriate documents duly
authorized and executed and in accordance with the law of the State in which the
Mortgaged Property is located to fully and completely release any security
interest of Lenders encumbering such Mortgaged Property.
Notwithstanding anything contained herein to the contrary, as a condition
to any release Borrower shall have satisfied the following conditions prior to
the Agent's release of a Mortgaged Property:
a. No Conditional Default or Event of Default shall exist;
b. Borrower shall have provided to Agent a proforma Borrowing Base
Certificate as of the end of the previous calendar month and a proforma
Compliance Certificate as of the end of the previous calendar quarter,
demonstrating Borrower's compliance with the terms of this Agreement after
giving effect to the release of such Mortgaged Property; and
c. Borrower shall pay all costs and expenses reasonably incurred by
Agent in connection with the release of such Mortgaged Property.
2.08. Loan Prepayments. The Borrower may prepay the principal amount of any
Prime Advance in whole or in part from time to time without any prepayment
penalty. The Borrower may not prepay any LIBOR Advance before the expiration of
the LIBOR Interest Period applicable to such LIBOR Advance, except upon the
payment of the amount provided for below.
If any LIBOR Advance becomes due and payable or is prepaid prior to the
last day of the applicable LIBOR Interest Period (including any prepayment
resulting from the acceleration of the Loan(s) by the Lenders as a consequence
of an Event of Default), the Borrower also promises to reimburse the Lenders on
demand for any resulting loss, cost, or expense incurred by the Lenders as a
result thereof including, without limitation, any loss incurred in obtaining,
liquidating, or employing deposits from third parties, but excluding the
Lenders' loss of margin for the period after any such payment. If, because of
the introduction of or any change in, or because of any judicial,
administrative, or other governmental interpretation of, any law or regulation,
there shall be any increase in the cost to the Lenders of making, funding,
maintaining, or allocating capital to LIBOR Advances, then from time to time,
within fifteen (15) days after demand by the Agent, the Borrower shall either
(a) pay to the Lenders additional amounts sufficient to compensate the Lenders
for such increased cost; or (b) convert all LIBOR Advances to a Prime Advance.
If the Borrower elects the option provided in the foregoing subparagraph (b),
the Borrower shall not be subject to the requirement hereunder that the Borrower
reimburse the Lenders for any loss, cost or expense incurred by the Lenders as a
result of the Borrower paying a LIBOR Advance prior to the end of the applicable
LIBOR Interest Period; provided, however, thereafter the Borrower may not elect
for any Advances to be LIBOR Advances. If,
20
because of the introduction of or any change in, or because of any judicial,
administrative, or other governmental interpretation of, any law or regulation,
it becomes unlawful for the Lenders to make, fund, or maintain any LIBOR
Advance, then the Lenders' obligation to make, fund, or maintain any LIBOR
Advance shall terminate.
2.09. Late Fee. If any sum of principal or interest in respect of a Loan is
not paid within five (5) days after the date when due, then, in addition to and
not in lieu of any other rights or remedies available to the Lenders, the
Borrower shall pay to the Lenders, on demand, a late fee in an amount equal to
the greater of five percent (5%) of such sum or Twenty-Five Dollars ($25.00),
but not to exceed Two Thousand Dollars ($2,000.00). In no event, however, shall
a late fee be payable under this Section 2.09 in respect of an Advance and the
interest thereon if the Borrower fails to pay such Advance and interest on the
Advance Maturity Date therefor or on the date on which such Advance and interest
are payable as a result of the acceleration of a Loan pursuant to the terms of
this Agreement.
2.10. Facility 3/Letters of Credit. Subject to the terms, provisions and
conditions hereof, The Huntington National Bank agrees to make available to
Borrower an unsecured line of credit in an amount not to exceed Three Million
Dollars ($3,000,000) for the issuance of Letters of Credit ("Facility 3"). Each
Letter of Credit shall be irrevocable and shall have an expiration date not
later than the Facility 1 Maturity Date. Any draw upon the Letters of Credit
issued hereunder shall be (a) evidenced by the Facility 3 Note, (b) due and
payable on demand, and (c) shall bear interest at the Prime Rate.
Borrower shall pay to The Huntington National Bank a fee for issuance of a
Letter of Credit in an amount equal to 125 basis points per annum (computed on
the basis of a year of 360-days and the actual number of days of the stated term
of the applicable Letter of Credit) of the aggregate stated amount of the
applicable Letter of Credit. Such fee shall be payable in advance on the date of
issuance of the applicable Letter of Credit. Borrower shall also pay to The
Huntington National Bank when due all usual and customary administrative fees
associated with the issuance of the Letters of Credit.
2.11. Increase in Facility 1. If no Conditional Default or Event of Default
shall have occurred and be continuing at such time, the Borrower may request, if
it so elects, an increase in the aggregate principal amount of Facility 1 by
making a written request to Agent that the aggregate principal amount of
Facility 1 be increased; provided that (i) the aggregate principal amount shall
at no time exceed Seventy Million Dollars ($70,000,000), (ii) the Agent shall
have approved such increase in writing, and (iii) any Lender increasing its
Commitment, as appropriate, shall have received any required customary closing
conditions, including, without limitation, the Borrower's authorizing
resolutions and opinions of counsel. Any request received by the Agent from the
Borrower to increase the aggregate principal amount of Facility 1 shall be
delivered to each Lender and shall be implemented by one or more existing
Lenders agreeing to increase their Commitments; provided that no Lender shall
have any obligation to increase its Commitment but each Lender shall have the
right to elect to increase its Commitment in its sole discretion pro rata with
any Lender hereunder or by any combination of the foregoing, as determined by
the Agent in consultation with the Borrower. An increase in the aggregate
principal amount of Facility 1 and any amendments to this Agreement made solely
to evidence such increase shall not require the consent of any Lender not
participating in such increase.
21
ARTICLE III
REPRESENTATIONS AND WARRANTIES
The Borrower represents and warrants to the Lenders that as of the Closing
Date:
3.01. Organization and Qualification. The Borrower is a duly formed and
validly existing limited partnership under the laws of the Commonwealth of
Virginia. The Guarantor is a duly formed and validly existing real estate
investment trust under the laws of the State of Maryland.
3.02. Right and Power; Corporate Authority. The Borrower has full right,
power and authority to execute and deliver this Agreement and the other Loan
Documents and to perform its obligations thereunder. The Borrower has taken the
necessary corporate action to authorize the execution and delivery of the
Agreement and the other Loan Documents and the borrowings thereunder.
3.03. Conflict With Other Instruments. The execution and delivery of this
Agreement and the other Loan Documents, the consummation of the transactions
contemplated thereby, and the compliance with the terms, conditions and
provisions thereof will not conflict with or result in a breach of any of the
terms, conditions or provisions of the partnership agreement of the Borrower,
or, to the Borrower's actual knowledge, any law or any regulation, order, writ,
injunction or decree of any court or Governmental Authority or any agreement or
instrument to which the Borrower is a party or by which the Borrower or its
properties or assets are subject to or bound, or constitute a default thereunder
or result in the creation or imposition of any lien, charge, security interest
or encumbrance of any nature whatsoever upon any of the property of the Borrower
pursuant to the terms of any such agreement or instrument, except as created by
the Loan Documents.
3.04. Authority, Validity and Binding Effect. The execution and delivery of
this Agreement and the other Loan Documents, and the making of the borrowings
contemplated by the provisions hereof and thereof, have been duly authorized by
all necessary action on the part of the Borrower, and no authorization, approval
or consent by, or filing with, any Governmental Authority or public regulatory
authority is necessary therefor except for disclosures as required with the
Securities and Exchange Commission. This Agreement and the other Loan Documents
have been duly and validly executed and delivered by the Borrower and constitute
a legal, valid and binding obligation of the Borrower, enforceable in accordance
with their terms, except as the enforceability thereof may be limited by
bankruptcy, insolvency or other laws of general application affecting the
enforcement of creditors' rights generally and by principles of equity.
3.05. Financial Condition. The financial statements of the Borrower and the
Guarantor furnished to the Lenders are complete and correct in all material
respects. Such financial statements were prepared in accordance with GAAP
consistently applied. The financial statements of the Borrower and the Guarantor
fairly present their respective financial condition at the respective dates
indicated therein. Since the dates of such financial statements, there has been
no material adverse change in the assets, liabilities or financial condition of
the Borrower and the Guarantor from that reflected thereon.
22
3.06. Litigation. There are no actions, suits or proceedings pending or, to
the Borrower's actual knowledge, threatened, against or affecting the Borrower,
a Special Purpose Entity or the Guarantor before any court or Governmental
Authority which might have a Material Adverse Effect.
3.07. ERISA. The Borrower and each ERISA Affiliate is in compliance in all
material respects with all applicable provisions of ERISA, and neither the
Borrower nor any ERISA Affiliate has incurred any liability to the PBGC. Neither
a Reportable Event nor a Prohibited Transaction, has occurred under, nor has
there occurred any complete or partial withdrawal from, nor has there occurred
any other event which would constitute grounds for termination of or the
appointment of a trustee to administer any "employee benefit plan" (including
any "multi-employer plan") maintained for employees of Borrower or any ERISA
Affiliate, all within the meanings ascribed by ERISA.
3.08. Regulation U. The Borrower is not engaged in the business of
extending credit for the purpose of purchasing or carrying margin stock (within
the meaning of Regulation U) and the Borrower does not hold any margin stock (as
defined in Regulation U).
3.09. Investment Company Act. Neither the Borrower nor the Guarantor is an
"investment company" or a company "controlled" by an "investment company,"
within the meaning of the Investment Company Act of 1940, as amended.
3.10. Public Utility Holding Company. Neither the Borrower nor the
Guarantor is a "holding company" or a "subsidiary company" of a "holding
company," or an "affiliate" of a "holding company" or of a "subsidiary company"
of a "holding company," within the meaning of the Public Utility Holding Company
Act of 1935, as amended.
3.11. Insolvency. Neither the Borrower, a Special Purpose Entity nor the
Guarantor is "insolvent" within the meaning of that term as defined in the
Federal Bankruptcy Code and the Borrower and the Guarantor are each able to pay
their debts as they mature.
3.12. Organization and Qualification. To the extent required by
Governmental Requirement, the Borrower and each Special Purpose Entity is duly
qualified to conduct business in the state in which the Mortgaged Property is
located.
3.13. Right and Power; Corporate Authority. The Borrower and each Special
Purpose Entity has full right, power and authority to execute and deliver the
Loan Documents contemplated by the provisions hereof for such Advance and to
perform its obligation thereunder. The Borrower has taken the necessary
corporate action to authorize the execution and deliver of such Loan Documents.
3.14. Conflict With Other Instruments. The execution and delivery of the
Loan Documents contemplated by the provisions hereof for such Advance, the
consummation of the transactions contemplated thereby, and the compliance with
the terms, conditions and provisions thereof will not conflict with or result in
a breach of any of the terms, conditions or provisions of the limited
partnership agreement of the Borrower and the operating agreement of each
Special Purpose Entity, or, to the Borrower's actual knowledge, any law or any
regulation, order, writ, injunction or decree of any court or Governmental
Authority or any agreement or instrument
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(except to the extent required under ground leases applicable to future
Mortgaged Properties) to which the Borrower and each Special Purpose Entity is a
party or by which the Borrower and each Special Purpose Entity or their
properties or assets are subject to or bound, or constitute a default thereunder
or result in the creation or imposition of any lien, charge, security interest
or encumbrance of any nature whatsoever upon the Mortgaged Properties or any
other property of the Borrower and each Special Purpose Entity pursuant to the
terms of any such agreement or instrument, except as created by the Loan
Documents.
The execution and delivery of the Guaranty, the Guarantor's guarantee
contemplated thereby, and the compliance with the terms, conditions and
provisions thereof will not conflict with or result in a breach of any of the
terms, conditions or provisions of the trust agreement of the Guarantor, or, to
the Guarantor's actual knowledge, any law or any regulation, order, writ,
injunction or decree of any court or Governmental Authority or any agreement or
instrument to which the Guarantor is a party or by which the Guarantor or its
properties or assets are subject to or bound.
3.15. Authority, Validity and Binding Effect. The execution and delivery of
the Loan Documents contemplated by the provisions hereof for such Advance, have
been duly authorized by all necessary action on the part of the Borrower and
each Special Purpose Entity, and no authorization, approval or consent by, or
filing with, any Governmental Authority or public regulatory authority is
necessary therefor. Such Loan Documents have been duly and validly executed and
delivered by the Borrower and each Special Purpose Entity and constitute legal,
valid and binding obligations of the Borrower and each Special Purpose Entity,
enforceable in accordance with their terms, except as the enforceability thereof
may be limited by bankruptcy, insolvency or other laws of general application
affecting the enforcement of creditors' rights generally and by principles of
equity.
3.16. Litigation. There are no actions, suits or proceedings pending or, to
the Borrower's actual knowledge, threatened, against or affecting the Mortgaged
Properties before any court or Governmental Authority which might have a
Material Adverse Effect.
3.17. Compliance With Governmental Requirements. To Borrower's knowledge,
the intended use of the Mortgaged Properties complies in all material respects
with all applicable Governmental Requirements, as the same may be modified by
any applicable variances and exceptions, to Borrower's knowledge, and all
material provisions of any applicable restrictive covenants, and to Borrower's
knowledge, the Borrower has obtained all material required permits with respect
to the operation and use of such Mortgaged Properties.
3.18. Utility Services. To Borrower's knowledge, all utility services
necessary for the use and operation of the Mortgaged Property for such Mortgaged
Property are available at the boundaries of the Mortgaged Property and are
located within a public right of way adjacent to the Mortgaged Property or
within an easement benefiting the Mortgaged Property, which easement is
contiguous to the Mortgaged Property and a public right of way, and, to the
actual knowledge of Borrower, such utilities have sufficient capacity to serve
such Mortgaged Property.
3.19. Hazardous Materials; Storage Containers; Wetlands. The Borrower and
each Special Purpose Entity have not used Hazardous Materials on, from or
affecting the Mortgaged
24
Property in any manner which violates any Governmental Requirements or Hazardous
Materials Laws, and, to the best of the Borrower's knowledge, except as
disclosed in any written reports and data provided to the Lenders, no prior
owner of such Mortgaged Property or prior occupant thereof, has used Hazardous
Materials on, from or affecting the Mortgaged Property in any manner which
violates any Governmental Requirements or Hazardous Materials Laws. The Borrower
further represents to the Lenders that, except as disclosed in any written
reports and data provided to the Lenders, the Borrower and each Special Purpose
Entity have not received any notice of any violations of Governmental
Requirements or Hazardous Materials Laws governing the use, storage, treatment,
transportation, manufacture, refinement, handling, production or disposal of
Hazardous Materials at such Mortgaged Property and, to the best of the
Borrower's knowledge, there have been no actions commenced or threatened by any
party for non-compliance with any such laws or regulations at such Mortgaged
Property. The Borrower further represents that, except as disclosed in any
written reports and data provided to the Lenders, no Storage Containers are
located on or under such Mortgaged Property, except in compliance with all
applicable Hazardous Materials Laws, and such Mortgaged Property does not
contain any Wetlands.
3.20. Covenants and Restrictions. Except as disclosed in writing to Agent
or in any Title Policy delivered to Agent hereunder, there are no covenants,
conditions or restrictions of record or of which the Borrower has knowledge that
prohibit the Mortgaged Property from being used and operated as contemplated by
the Lease for such Mortgaged Property.
3.21. Flood Hazard. To Borrower's knowledge, except as may be disclosed in
any survey or flood hazard certificate provided to Agent, no part of the
Improvements forming a part of the Mortgaged Property are located in or on an
"area having special flood hazards" ("Special Flood Hazard Area"), as that term
is defined in the Flood Disaster Protection Act of 1973, as amended by the 1994
National Flood Insurance Reform Act, and as otherwise amended. If such
Improvements (or any portion thereof) are located in a Special Flood Hazard
Area, to Borrower's knowledge, the building floor elevations of such
Improvements are located at the height prescribed (if any) by Governmental
Requirements above the designated flood plain elevation for the Special Flood
Hazard Area, as determined by FEMA. For purposes of this Section 3.21, the
defined term Improvements shall include only walled and roofed buildings.
The representations and warranties contained above and in the other Loan
Documents shall be true on and as of the date of each Advance with the same
effect as though such representations and warranties had been made on and as of
each such date.
ARTICLE IV
CONDITIONS OF LENDING
The Borrower agrees that the obligation of the Lenders to make an Advance
is subject to the accuracy in all material respects, as of the date hereof and
the date of such Advance of the representations and warranties contained herein
and under the other Loan Document, to performance by the Borrower of its
agreements to be performed hereunder and under the other Loan Document on or
before the date of such Advance, and to the satisfaction of the following
further conditions:
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4.01. Initial Advance. Prior to the initial Advance by the Lenders:
a. Organizational Documents. There shall have been furnished to the
Agent by the Borrower:
i. A copy of the certificate of limited partnership of the
Borrower, together with any and all amendments thereto, filed with the
appropriate Governmental Authorities of the Commonwealth of Virginia;
ii. A copy of the limited partnership agreement of the Borrower,
together with any and all amendments thereto certified by the
Guarantor, as the general partner of Borrower;
iii. An original or a copy of a Certificate of Existence for the
Borrower issued by the appropriate Governmental Authorities of the
Commonwealth of Virginia bearing a recent date;
iv. A copy of the resolutions of the Borrower authorizing the
Loans and the execution of this Agreement and the Loan Documents
certified by the Guarantor, as the general partner of Borrower;
v. A copy of the articles of organization of each Special Purpose
Entity, together with any and all amendments thereto, filed with the
appropriate Governmental Authorities of the state in which the Special
Purpose Entity is organized;
vi. A copy of the operating agreement of each Special Purpose
Entity, together with any and all amendments thereto, certified by the
Borrower;
vii. An original or copy of a Certificate of Existence for each
Special Purpose Entity issued by the appropriate Governmental
Authorities for the state in which the Special Purpose Entity is
organized;
viii. A copy of the trust agreement for the Guarantor, together
with any and all amendments thereto, certified by the Secretary
thereof;
ix. A copy of the resolutions of the Guarantor authorizing the
Guaranty, certified by the Secretary of Guarantor; and
x. An original or a copy of a Certificate of Existence for the
Guarantor issued by the appropriate Governmental Authorities of the
State of Maryland.
b. Borrower's Counsel Opinion. The Borrower shall furnish to the
Lenders an opinion of counsel for the Borrower, the Guarantor and the
Special Purpose Entities in form and substance reasonably acceptable to the
Lenders.
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c. Notes/Loan Documents. The Borrower shall have executed and
delivered to the Lenders the Notes, the Facility 3 Note and the applicable
Loan Documents with blanks appropriately completed.
d. Guaranty. The Guarantor shall have executed and delivered to the
Agent the Guaranty.
4.02. Mortgaged Properties. With respect to each of the Mortgaged
Properties, the Borrower shall have satisfied each of the following conditions:
a. Organizational Documents. There shall have been furnished to the
Agent by the Borrower:
i. A certificate of the Borrower, certifying that no amendments
or modifications have been made to the limited partnership agreement
of the Borrower furnished to the Agent pursuant to Section 4.01(a)
hereof, other than such amendments or modifications as have been
furnished to the Agent pursuant to Section 6.12 hereof.
ii. An original or copy of a Certificate of Existence for the
Borrower and each Special Purpose Entity issued by the Secretary of
State of Virginia or the state in which a Special Purpose Entity is
organized, as applicable, bearing a recent date;
iii. To the extent required by Governmental Requirement, an
original or copy of a Certificate of Authority for the Borrower, if
applicable, and each Special Purpose Entity as a foreign limited
liability company doing business in the state in which the Mortgaged
Property is located;
iv. A copy of the resolutions of Borrower authorizing the Advance
and the execution of the Loan Documents contemplated by the provisions
hereof for such Advance;
v. A certificate of the Guarantor certifying that no amendments
or modifications have been made to the trust agreement of the
Guarantor furnished to the Lenders pursuant to Section 4.01(ix)
hereof;
vi. An original or copy of a Certificate of Existence for the
Guarantor issued by the Secretary of State of Maryland bearing a
recent date; and
vii. A copy of the resolutions of the Guarantor authorizing such
Advance or for all Advances made pursuant to this Agreement.
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b. Borrower's Counsel Opinion. The Borrower shall furnish to the
Lenders the opinions of counsel for the Borrower, each Special Purpose
Entity and the Guarantor in form and substance reasonably acceptable to the
Lenders.
c. Project Agreement. The Agent, the Borrower and each Special Purpose
Entity shall have entered into a satisfactory Project Agreement with
respect to a Mortgaged Property.
d. Security Documents. There shall have been executed and delivered to
the Agent the following security documents with respect to such Mortgaged
Property:
i. a Mortgage which shall constitute a first mortgage or deed of
trust lien, as applicable, on the Borrower's and each Special Purpose
Entity's fee simple interest in such Mortgaged Property or Borrower's
or a Special Purpose Entity's interest in the ground lease (which
ground lease shall be in form and substance acceptable to the Lenders
and which ground lease shall have no less than 35 years remaining on
its lease term and the lessor thereunder shall provide Lenders with an
estoppel letter containing lender protection provisions acceptable to
Lenders);
ii. an Assignment of Rents and Leases pursuant to which the
Borrower shall have collaterally assigned to the Lenders all the
right, title and interest of the Borrower and each Special Purpose
Entity as landlord in and to all existing and future leases of space
in such Mortgaged Property, including, without limitation, the Lease
for such Mortgaged Property, and all rentals and other monies due and
to become due under said leases;
iii. an Assignment pursuant to which the Borrower and each
Special Purpose Entity shall have collaterally assigned to the Lenders
all the right, title and interest of the Borrower and each Special
Purpose Entity in and to the material permits, licenses, warranties
and other agreements in respect of such Mortgaged Property; and
iv. the Borrower or a Special Purpose Entity has then entered
into a Mortgaged Property Sale Agreement for such Mortgaged Property,
a Collateral Assignment of Mortgaged Property Sale Agreement pursuant
to which the Borrower and a Special Purpose Entity shall have
collaterally assigned to the Lenders all the right, title and interest
of the Borrower and a Special Purpose Entity in, to and under such
Mortgaged Property Sale Agreement and the Deposit made thereunder.
Each of the above-described collateral documents shall be properly
completed and reflect only such further changes as may be necessary to
comply with the requirements of the jurisdiction in which such Mortgaged
Property is located.
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e. Borrower's Affidavit. The Borrower and the applicable Special
Purpose Entity shall have furnished to the Lenders an executed Borrower's
Affidavit with respect to such Mortgaged Property.
f. Environmental Indemnity. The Borrower, the applicable Special
Purpose Entity and the Guarantor shall have furnished to the Lenders an
executed Environmental Indemnity Agreement with respect to such Mortgaged
Property.
g. Title Policy. A Title Company shall have issued and delivered to
the Agent a policy of title insurance acceptable to the Lenders insuring
the priority of the lien of the Mortgage encumbering such Mortgaged
Property in an amount of not less than the purchase price paid by Borrower
or the applicable Special Purpose Entity for the purchase of the Mortgaged
Property. The Title Policy shall have an effective date of no earlier than
the date of such Advance, shall provide extended coverage (i.e., all
preprinted or standard exceptions shall be deleted), a 3.1 zoning
endorsement (if such endorsement is selected by the Borrower pursuant to
Section 4.01(i)(i) hereof to evidence proper zoning of the Mortgaged
Property), an access endorsement, a comprehensive endorsement, a
subdivision endorsement (where necessary), a last dollar endorsement, a
contiguity endorsement (if needed), a revolving credit endorsement and
affirmative coverage with respect to filed or unfiled mechanic's lien
(where available at reasonable cost) and shall be subject only to such
exceptions as may be reasonably approved by the Agent.
h. Survey. The Borrower shall have furnished to the Agent an Urban
Class ALTA/ACSM Minimum Standard Detail Survey (including Items
1,3,4,6,7,8,9,10,11 and 13 of Table A thereof or such provisions thereof as
are acceptable to Agent) of the Mortgaged Property, made by a registered
engineer or surveyor licensed by the state in which such Mortgaged Property
is located and reasonably satisfactory to the Agent and the Title Company
and certified to each of them as of a date not more than sixty (60) days
prior to the date of the Advance made in respect of such Mortgaged Property
the boundaries of such Mortgaged Property, the actual location of the
Improvements located on such Mortgaged Property, all building setback
lines, easements, rights of way and encroachments affecting such Mortgaged
Property and other matters apparent thereon and the relation of such
Mortgaged Property to public thoroughfares for access purposes, certifying
that the Improvements (excluding Improvements that are not walled and
roofed buildings) located on the Mortgaged Property are not located within
a special flood hazard area as defined by the Flood Disaster Protection Act
of 1973, and showing the number of the Flood Insurance Rate Map on which
such Mortgaged Property is shown and the date of such map, and shall
specify the flood hazard zone in which such Mortgaged Property is situated.
Such survey shall be reasonably acceptable to the Agent and shall not
disclose, in the Agent's reasonable opinion, any facts or circumstances
which materially affect or could materially affect the marketability of
such Mortgaged Property or the Borrower's ability to sell or finance such
Mortgaged Property.
i. Approvals and Permits. The Borrower shall submit to the Agent
evidence reasonably satisfactory to the Agent to the effect that:
29
i. The Mortgaged Property is presently zoned to permit its use
and operation as contemplated by the Borrower or the applicable
Special Purpose Entity for such Mortgaged Property, which evidence may
be a 3.1 zoning endorsement issued by the Title Company or a
satisfactory opinion of counsel admitted to practice in the state in
which such Mortgaged Property is located or a zoning confirmation
letter of the Governmental Authority having zoning jurisdiction over
such Mortgaged Property;
ii. The Borrower has obtained such access easements and utility
easements, if any, as may be reasonably necessary for the contemplated
use of such Mortgaged Property and such easements are insured under
the Title Policy;
iii. All required permits, licenses and approvals for the use and
operation of such Mortgaged Property (including a permanent occupancy
permit or a certificate of occupancy, if issued by the jurisdiction in
which such Mortgaged Property is located) have been obtained from the
applicable Governmental Authorities; and
iv. All utility services necessary for the operation of such
Mortgaged Property are available at the boundaries of the Mortgaged
Property and are located within a public right of way adjacent to the
Mortgaged Property or within an easement benefiting the Mortgaged
Property, which easement is contiguous to the Mortgaged Property and a
public right of way, and all such utilities have the capacity
necessary to provide service to such Mortgaged Property.
j. Insurance. The Borrower shall have furnished to the Agent the
insurance required by the Mortgage encumbering such Mortgaged Property,
together with evidence of payment in full of the premiums thereon.
k. Plans and Specifications. To the extent the same are in the
Borrower's or its agent's possession, the Borrower shall have furnished to
the Agent for its review and reasonable approval the Plans and
Specifications for such Mortgaged Property.
l. Appraisal. The Agent shall have received a written appraisal in a
form acceptable to Lenders. The appraiser providing a Mortgaged Property
appraisal will be selected and directly engaged by the Agent. The cost of a
Mortgaged Property appraisal, and any update thereof as provided below,
will be charged to the Borrower and paid by the Borrower upon the
Borrower's receipt of an invoice therefor; provided, however, Borrower
shall be responsible for the costs of no more than one (1) appraisal or
update per year with respect to a Mortgaged Property, except in the case of
a foreclosure. Each Mortgaged Property appraisal shall be prepared in
accordance with the Uniform Standards of Professional Appraisal Practice
applicable to Federally Related Transactions as set out in Appendix A to
the real estate appraisal regulations adopted by the Office of the
Comptroller of the Currency pursuant to the Financial Institutions Reform,
Recovery
30
and Enforcement Act of 1989 (Sub-part C of 12 C.F.R. 34) and shall be
prepared in response to an engagement letter to be issued by the Agent.
Agent shall be entitled to order an update to any Mortgaged Property if
Agent reasonably determines in good faith that a Material Adverse Effect
has occurred or is required to do so under applicable banking regulations.
Any new Mortgaged Property appraisal or update to an existing Mortgaged
Property appraisal needs to be approved by the Required Lenders prior to
any change in the appraised value of a Mortgaged Property.
m. Inspecting Architect's Report. If requested by the Agent, the
Lenders shall have received a satisfactory report of an Inspecting
Architect for such Mortgaged Property.
n. Environmental Report. The Borrower shall have furnished to the
Agent a copy of an environmental report by an environmental consulting
company reasonably acceptable to the Agent (the "Environmental Report")
showing that the environmental condition of such Mortgaged Property is
reasonably acceptable to the Agent. The Environmental Report shall be
addressed to the Lenders, or, in the alternative, the Borrower shall
provide to the Agent a letter of the consulting company that prepared the
Environmental Report pursuant to which such consulting company authorizes
the Lenders to rely on the Environmental Report. Agent shall be entitled to
order an update to any Environmental Report, as Agent deems necessary in
its reasonable discretion.
o. Leases. The Borrower shall have furnished to the Agent a copy of
all Leases for such Mortgaged Property.
p. Major Lease. In the event a Mortgaged Property is subject to a
Major Lease to one Tenant, the Borrower shall have furnished to the Agent
an executed Lease for such Mortgaged Property which shall have a remaining
term (excluding optional extension or renewal periods) acceptable to the
Lenders and shall be in a form and content reasonably acceptable to the
Lenders in all other respects, including rental amounts payable thereunder.
Such Lease or a separate document from the Tenant which is party thereto
shall include the agreement of such Tenant to subordinate its interest
thereunder to any first mortgage or deed of trust on such Mortgaged
Property upon the request of the mortgagee or the beneficiary thereunder (a
"Mortgagee") and to attorn to such Mortgagee or any purchaser of such
Mortgaged Property at a foreclosure sale or a sale made under any power of
sale or pursuant to a deed in lieu of foreclosure, provided such Mortgagee
agrees to reasonable non-disturbance provisions if the Tenant under such
Lease is not in default beyond any applicable cure period thereunder.
The Borrower shall use reasonable efforts to attempt to obtain the
following provisions in such Major Lease or separate document:
i. The Major Tenant party thereto shall agree to give a Mortgagee
by registered or certified mail, a copy of any notice of default
served upon the landlord, provided that prior to such notice of
default such Major Tenant has been notified in writing, of the
existence of such mortgage or deed of trust and the address of such
Mortgagee;
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ii. A Mortgagee shall have sixty (60) days after its receipt from
such Major Tenant of written notice of a default by the landlord under
such Major Lease to correct or cure such default; and
iii. Such Major Tenant shall comply with all Hazardous Materials
Laws, and shall not store any Hazardous Materials in, on or under such
Mortgaged Property, except in accordance with applicable laws and
regulations.
q. Subordination, Non-Disturbance and Attornment Agreement. The
Borrower and each Special Purpose Entity shall have furnished to the Agent
a Subordination, Non-Disturbance and Attornment Agreement for such
Mortgaged Property, executed by the Borrower or the Special Purpose Entity,
the Agent and all Major Tenants and Tenants under "master leases" of such
Mortgaged Property.
r. Damage. Such Mortgaged Property shall not have been materially
injured or damaged by fire or other casualty.
s. Tenant Estoppel. The Borrower shall have furnished to the Agent a
tenant estoppel letter in respect of such Mortgaged Property executed by
all Major Tenants and Tenants under "master leases" of such Mortgaged
Property in a form which is reasonably satisfactory to the Agent and such
Tenant, stating that the Lease is in full force and effect, that landlord
is not in default and that Tenant is not aware of any amounts it could
setoff against rent and including such other statements as are reasonably
required by the Agent.
t. Purchase Agreement for Acquisition of Mortgaged Property. The
Borrower shall have furnished to the Agent a copy of the executed purchase
agreement pursuant to which the Borrower has acquired or will acquire such
Mortgaged Property and a copy of the closing statement therefor.
u. Special Flood Hazard Area. If the Improvements (or any portion
thereof) forming a part of such Mortgaged Property (excluding Improvements
that are not walled and roofed buildings) are located in an Special Flood
Hazard Area:
i. The Borrower shall have furnished evidence satisfactory to the
Agent that the building floor elevations of such Improvements are
located at the height (if any) prescribed by Governmental Requirements
above the designated flood plain elevation for the Special Flood
Hazard Area, as determined by FEMA; and
ii. The Borrower shall have provided to the Agent either: (A) the
flood insurance required by the Mortgage encumbering such Mortgaged
Property, together with evidence of payment in full of the premium
thereon, or (B) a copy of a Letter of Map Revision ("LOMR") issued by
FEMA, removing such Mortgaged Property from the Special Flood Hazard
Area as determined by FEMA.
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4.03. Working Capital Advances. With respect to Advances of the Loans for
Borrower's working capital purpose, such Advances will be made by the Lenders to
Borrower upon application by Borrower which application shall state the intended
use of such Advances.
4.04. Subsequent Advances. Prior to any Advance:
a. Representations and Warranties. The representations and warranties
contained herein and in the other Loan Documents shall be true in all
material respects on and as of the date each Advance with the same effect
as though such representations and warranties had been made on and as of
each such date.
b. Conditional Default/Event of Default. No Event of Default or
Conditional Default shall have occurred and be continuing or shall exist.
c. Conditions in 4.01. All of the conditions set forth in Section 4.01
hereof shall remain satisfied.
4.05. Proceedings and Documents. All legal details and proceedings in
connection with the transactions contemplated by this Agreement with respect to
a Mortgaged Property shall be in form and substance reasonably satisfactory to
counsel for the Agent, and the Agent shall have received all such counterpart
originals or certified or other copies of such documents and proceedings in
connection with such Mortgaged Property, in form and substance, as to
certification and otherwise, reasonably satisfactory to such counsel, as the
Agent or its counsel may request.
ARTICLE V
DISBURSEMENTS
5.01. Advances. Subject to the terms and conditions hereof, and relying
upon the representations and warranties herein set forth, the Lenders agree to
make Advances to the Borrower in accordance with, and subject to the following
requirements and limitations:
a. Requests for Loan Advances. Not less than five (5) business days
prior to the making of an Advance, the Borrower shall submit to the Agent a
Disbursement Request in such form as the Agent may require setting forth
the total amount of the Advance which is requested. Each Disbursement
Request and each receipt of the Advance requested thereby shall constitute
a certification by the Borrower that the representations and warranties
contained in Article III hereof are true and correct on the date of such
Disbursement Request or such receipt, as the case may be.
b. Borrowing Limitations. In no event shall the outstanding principal
balance of Facility 1 or Facility 1 and Facility 2 on a combined basis
exceed the applicable Borrowing Base.
c. Advances to Cure Defaults; etc. Notwithstanding the foregoing
provisions of this Section 5.01, and without receiving Requests for
Advances for such Advances, the Lenders may at any time or from time to
time (i) make Advances to cure any Event of Default or Conditional Default,
(ii) make Advances to pay interest on the Loans, (iii) make Advances to pay
the reasonable fees and expenses of counsel for the Agent; and
33
(iv) make Advances to pay the reasonable fees and expenses payable to a
Title Company for the issuance of a Title Policy. Any Advances made
pursuant to this subparagraph (c) shall be evidenced by the Facility 1
Note, as fully as if made to the Borrower, and shall be paid by the
Borrower upon demand by the Agent. The Agent shall provide written notice
to the Borrower of each Advance made under this subparagraph (c).
ARTICLE VI
BORROWER'S AFFIRMATIVE COVENANTS
The Borrower covenants that until payment in full of the Loans and
performance of all of the Borrower's other obligations under the Loan Documents:
6.01. Financial Statements. The Borrower will deliver or cause to be
delivered to the Agent:
a. As soon as practicable, but in any event within ninety (90) days
after the close of each fiscal year of Guarantor, audited financial
statements of Guarantor, prepared by a nationally recognized certified
public accounting firm on a consolidated and consolidating basis for itself
and its Subsidiaries, including a balance sheet, statement of income and
retained earnings and a statement of cash flows;
b. As soon as practicable, but in any event within ninety (90) days
after the close of each fiscal year of Borrower, audited financial
statements of Borrower, prepared by a nationally recognized certified
public accounting firm on a consolidated and consolidating basis for itself
and its Subsidiaries, including a balance sheet, statement of income and
retained earnings and a statement of cash flows;
c. Within ten (10) days after the same are filed, copies of all
reports filed by Guarantor with the Securities and Exchange Commission;
d. Five (5) days prior to each Advance, a Borrowing Base Certificate
(as of the end of the last calendar month);
e. As soon as practicable, but in any event within thirty (30) days
after the end of each fiscal quarter of the Borrower, certified rent rolls
and operating statements for each of the Mortgaged Properties, together
with a Compliance Certificate;
f. Within ninety (90) days after the end of each fiscal year,
projected income statements and balance sheets for Borrower and Guarantor;
g. As soon as possible, but in any event within ten (10) Business Days
after the Borrower becomes aware thereof, a written statement signed by the
chief executive officer or the chief financial officer of the Borrower
describing any Reportable Event or Prohibited Transaction which has
occurred with respect to any Plan and the action which the Borrower
proposes to take with respect thereto; and
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h. The Borrower will with reasonable promptness furnish to the Agent
such additional financial and other information respecting the financial
condition, business or operations of the Borrower as the Agent may from
time to time reasonably request.
All such financial statements shall be prepared in accordance with GAAP
applied on a basis consistent with prior practice unless otherwise specifically
noted thereon.
6.02. Notices. The Borrower will promptly give the Agent written notice of:
a. the occurrence or existence of any Event of Default of which the
Borrower has actual knowledge, together with a written statement of the
action being taken by the Borrower to remedy such Event of Default;
b. all litigation or proceedings before any court or Governmental
Authority affecting the Borrower or its properties that the Borrower
reasonably determines may have a Material Adverse Effect or that affects
the use or operation of a Mortgaged Property; and
c. any claims against any collateral given by Borrower or Guarantor to
secure the Loan.
6.03. Access to Books and Inspection. The Borrower will give any officer or
representative of the Agent access to, and permit such representative to
examine, copy or make extracts from, any and all books, records and documents in
the possession of the Borrower relating to the Mortgaged Properties financed
with proceeds of the Loan and to inspect such Mortgaged Properties (provided
such inspections shall not interfere with a Tenant's use of a Mortgaged
Property), all at such reasonable times and as often as the Agent may reasonably
request; provided, however, that the Agent shall have no obligation to make any
such inspections nor have any responsibility to the Borrower or any person, firm
or corporation for any defects or deficiency which may be or which would have
been revealed by any such inspection, whether or not discovered by the Agent.
6.04. Governmental Requirements. The Borrower will comply with all material
Governmental Requirements (including ERISA) and all material terms of
restrictive covenants applicable to the each Mortgaged Property in respect of
which Advances have been made and are outstanding.
6.05. Maintenance. The Borrower will maintain each Mortgaged Property in
good repair and safe condition at all times and indemnify and defend and hold
the Lenders harmless from any and all claims relative to the use and occupancy
of each Mortgaged Property.
6.06. Insurance. The Borrower will maintain such insurance on each
Mortgaged Property in amounts set forth in the Mortgage for such Mortgaged
Property.
6.07. Further Assurances. The Borrower will execute, acknowledge when
appropriate, and deliver from time to time at the request of the Agent, such
instruments and documents as in the reasonable opinion of the Agent are
necessary or desirable to perfect the security interests required herein.
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6.08. Failure to Perform. If the Borrower neglects or refuses to pay the
costs, premiums, liabilities or other charges incurred in connection with the
Loans or otherwise fails to perform its covenants hereunder, the Lenders may do
so and may add the cost thereof to the Loans as indebtedness evidenced by the
Notes, and may collect the same from the Borrower upon demand with interest
thereon at the highest Default Rate until paid thereunder.
6.09. Environmental. The Borrower covenants and agrees to keep or cause
each Mortgaged Property to be kept free of Hazardous Materials in violation of
any Governmental Requirement and, without limiting the foregoing, the Borrower
and each Special Purpose Entity shall not cause or permit any such Mortgaged
Property to be used to generate, manufacture, refine, transport, treat, store,
handle, dispose of, transfer, produce or process Hazardous Materials, except in
compliance with all applicable Governmental Requirements, nor shall the Borrower
and each Special Purpose Entity cause or permit, as a result of any intentional
or unintentional act or omission on the part of the Borrower and each Special
Purpose Entity or any tenant, subtenant or occupant, a release of Hazardous
Materials in violation of any Governmental Requirement onto any such Mortgaged
Property or onto any other property.
If Hazardous Materials are present at a Mortgaged Property in violation of
the requirements of this Section 6.09, the Borrower shall immediately notify
Agent and:
a. conduct and complete all investigations, studies, sampling and
testing, and all remedial, removal and other actions necessary to clean up
and remove all Hazardous Materials on, under or from such Mortgaged
Property in accordance with all applicable federal, state and local laws,
ordinances, rules, regulations and policies (including, without limitation,
Hazardous Materials Laws), to the reasonable satisfaction of the Agent, and
in accordance with the orders and directives of all Governmental
Authorities;
b. defend, indemnify and hold harmless the Lenders, their employees,
agents, officers and directors (the "Indemnified Parties") from and against
any claims, demands, penalties, fines, liabilities, settlements, damages,
costs or expenses of whatever kind or nature, known or unknown, contingent
or otherwise, arising out of or in any way related to any of the following
("Environmental Losses"):
i. the presence, disposal, release or threatened release of any
Hazardous Materials on, over, under, from or affecting such Mortgaged
Property or the soil, water, vegetation, buildings, personal property,
persons or animals thereon;
ii. any personal injury (including wrongful death) or property
damage (real or personal) arising out of or related to such Hazardous
Materials;
iii. any lawsuit brought or threatened, settlement reached or
government order relating to such Hazardous Materials; and/or
iv. any violation of laws, orders, regulations, requirements or
demands of Governmental Authorities, which are based upon or in any
way related to such Hazardous Materials, including, without
limitation,
36
attorney's and consultant's fees, investigation and laboratory fees,
court costs and litigation expenses.
Notwithstanding any provision hereof, the Borrower does not indemnify the
Indemnified Parties against any Environmental Losses (i) caused by any
Indemnified Party, (ii) arising from the breach, violation or threatened
violation of any applicable Hazardous Materials Laws which first occurs after
the Indemnified Parties take actual possession of a Mortgaged Property pursuant
to a foreclosure of the Mortgage encumbering the same or pursuant to a transfer
pursuant to a power of sale or deed in lieu of foreclosure thereof; or (iii) any
release, discharge, disposal or presence of Hazardous Materials caused by a
receiver of a Mortgaged Property or which first occurs while a receiver is in
possession of such Mortgaged Property.
6.10. Personal Property. Borrower and each Special Purpose Entity shall
maintain all Personal Property and Fixtures incorporated into a Mortgaged
Property in accordance with the terms of the Mortgage encumbering such Mortgaged
Property.
6.11. Financing Statements. The Borrower hereby authorizes the Agent to
execute one or more financing statements and renewals and amendments thereof
pursuant to the Uniform Commercial Code of the State of Virginia and the state
in which each Special Purpose Entity is organized and the state in which a
Mortgaged Property is located in form satisfactory to the Agent, and will pay
the cost of filing the same in all public offices wherever filing is deemed by
the Agent to be necessary or desirable.
6.12. Organizational Documents. The Borrower shall provide to the Agent
copies of any amendments or modifications to, or replacements of, the Borrower's
certificate or articles of limited partnership, and the organizational documents
of each Special Purpose Entity. The Borrower shall cause to be provided to the
Agent copies of any amendments or modifications to, or replacements of, the
Guarantor's certificate or articles of incorporation or by-laws.
6.13. USA Patriot Act. Borrower represents and warrants to the Lenders that
neither Borrower nor any entity or individual owning, owned by or under common
ownership with Borrower or any guarantor of the Loans (each for purpose of this
Section 6.14, an "Affiliate"), is identified in any list of known or suspected
terrorists published by any United States government agency (individually, as
each such list may be amended or supplemented from time to time, referred to as
a "Blocked Persons List"), including, without limitation, (a) the annex to
Executive Order 13224 issued on September 23, 2001 by the President of the
United States and (b) the Specially Designated Nationals List published by the
United States Office of Foreign Assets Control. Furthermore, Borrower hereby
agrees that if Borrower becomes aware that Borrower or any Affiliate is
identified on any Blocked Persons List, Borrower shall immediately notify Agent
in writing of such information. In the event Borrower or any Affiliate is at any
time identified on any Blocked Persons List, such event shall be an Event of
Default, and shall entitle the Agent and the Lenders to exercise any and all
remedies provided hereunder or in any other Loan Document or otherwise permitted
by law. In addition, Agent or any Lender may immediately contact the Office of
Foreign Assets Control and any other governmental agency Agent or such Lender
deems appropriate in order to comply with its legal obligations. Upon the
occurrence of such Event of Default, Agent and Lenders shall forbear enforcement
of their rights and remedies during such time as (1) the party identified in a
Blocked Persons List is contesting in good faith
37
by appropriate legal proceedings such party's inclusion in a Blocked Persons
List and (2) Agent or any Lender, as the case may be, determines, in its sole
and absolute discretion, that such forbearance will not adversely affect title
to, the condition or value of, or any lien in favor of the Lenders and
encumbering any part of the Mortgaged Property or otherwise adversely impact the
ability of the party or Borrower to perform their respective obligations under
or with respect to any Loan Document.
6.14. Mortgaged Property Approval. With respect to a proposed Mortgaged
Property, Borrower shall submit the information required by Exhibit K to the
Agent and Agent shall deliver copies of such information to all of the Lenders,
and the Required Lenders shall have approved those materials identified in
Exhibit K attached hereto. In connection with the approval of a Mortgaged
Property, the Required Lenders may impose requirements with respect to the
proposed Mortgaged Property regarding disbursement of any Advance in addition to
those set forth herein. Such additional requirements will be set forth in the
Project Agreement to be executed by the Agent and the Borrower in respect of
such Mortgaged Property, which Project Agreement, when executed, shall be deemed
to be a modification and amendment of this Agreement.
Each Lender hereby acknowledges and agrees that the information submitted
by Borrower to the Lenders, including the information identified on Exhibit K is
proprietary and confidential information of Borrower and shall be maintained in
confidence by the Lenders and used solely and exclusively for the purpose of
determining such Lender's consent to the inclusion of such Real Estate Asset as
a Mortgaged Property subject to disclosure to their respective auditors,
regulatory authorities and potential participants in the Loan.
ARTICLE VII
BORROWER'S NEGATIVE COVENANTS
The Borrower covenants that until payment in full of the Loans and
performance of all of the Borrower's other obligations under the Loan Documents:
7.01. Prohibition upon Transfer, Secondary Financing. The Borrower and each
Special Purpose Entity shall not convey, sell (other than pursuant to a
Mortgaged Property Sale Agreement), lease (other than pursuant to a Lease) or
otherwise dispose of all or any part of a Mortgaged Property or any interest
therein (legal or equitable) (other than in connection with any Mezzanine Debt),
or grant any security interest or lien with respect to such Mortgaged Property,
unless in connection therewith the applicable Mortgage Release Price is paid to
the Lenders; provided, however, Borrower and each Special Purpose Entity shall
be entitled to waive its landlord lien, if required by a Tenant.
7.02. Easements. The Borrower and each Special Purpose Entity will not
enter into any easement affecting a Mortgaged Property without first obtaining
the Agent's written approval, which approval will not be unreasonably delayed or
withheld or conditioned upon payment of fees, of such easement and the terms and
conditions thereof; provided, however, no such approval shall be required if
such easement is granted in the ordinary course of business and provides
reasonable benefit to such Mortgaged Property. The Borrower shall provide to the
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Agent an executed copy of any easement entered into in respect of a Mortgaged
Property in respect of which an Advance has been made and remains outstanding.
7.03. Lease/Mortgaged Property Sale Agreement. The Borrower and each
Special Purpose Entity may, in the ordinary course of business, enter into,
modify, amend, alter, terminate or cancel any Lease (other than a Major Lease).
The Borrower and each Special Purpose Entity will not enter into, modify, amend,
alter, terminate or cancel any Major Lease for a Mortgaged Property, or assign,
transfer, pledge or encumber any of its right, title or interest under any
Lease, without the Agent's prior written consent, which consent will not be
unreasonably delayed or withheld or conditioned upon payment of fees, or payment
of the Mortgage Release Price for such Mortgaged Property to the Lenders. The
Agent shall not unreasonably withhold or delay its consent to a modification,
amendment or alteration to such a Major Lease. If the Borrower or a Special
Purpose Entity enters into a Mortgaged Property Sale Agreement for a Mortgaged
Property, the Borrower or a Special Purpose Entity will provide to the Agent a
copy of the same within twenty (20) Business Days after the execution thereof.
7.04. Margin Stock. The Borrower shall not use or cause or permit any of
the proceeds of the Loans to be used, either directly or indirectly, for the
purpose whether immediate, incidental or remote of purchasing or carrying any
margin stock within the meaning of Regulation U or of extending credit to others
for the purpose of purchasing or carrying any margin stock, and the Borrower
shall furnish to the Agent, upon its request, a statement in conformity with the
requirements of Federal Reserve Board Form U-1 referred to in Regulation U.
Further, no part of the proceeds of the Loans will be used for any purpose that
violates, or which is inconsistent with, the provisions of Regulations G, T, U
or X of the Board of Governors of the Federal Reserve System.
7.05. Change Name and Place of Business. The Borrower or a Special Purpose
Entity shall not change its corporate name or principal place of business,
except on not less than fifteen (15) days' prior written notice to the Agent.
7.06. Benefit Plans. The Borrower shall not permit any condition to exist
in connection with any employee benefit plan which might constitute grounds for
the PBGC to institute proceedings to have the employee benefit plan terminated
or a trustee appointed to administer the employee benefit plan; or engage in, or
permit to exist or occur any other condition, event or transaction with respect
to any employee benefit plan which could result in the Borrower incurring any
material liability, fine or penalty.
7.07. Restricted Assets. The Consolidated Group shall not construct,
acquire or otherwise own nursing homes, congregate care or assisted living
facilities or acquire any undeveloped real estate which the Consolidated Group
does not intend to construct a Real Estate Asset thereon or a portion thereof
(collectively, the "Restricted Assets") unless Borrower delivers to Agent copies
of resolutions authorizing such acquisitions and the aggregate value of all such
Restricted Assets does not exceed Ten Percent (10%) of the Total Current Value
of Assets.
7.08. Recourse Indebtedness. Other than the Loans, the Mezzanine Debt and
the Construction Loans, Borrower, Guarantor and the Special Purpose Entities
will not have
39
outstanding Recourse Indebtedness in excess of twenty percent (20%) of the Total
Current Value of Assets.
7.09. Facility 1 Mortgaged Properties Debt Service Coverage Ratio. Borrower
will not allow the Facility 1 Mortgaged Properties Debt Service Coverage Ratio
to be less than 1.40 to 1.00.
7.10. Facility 1 and Facility 2 Combined Mortgaged Properties Debt Service
Coverage Ratio. Borrower will not allow the Facility 1 and Facility 2 Combined
Debt Service Coverage Ratio to be less than 1.30 to 1.00.
7.11. Mezzanine Debt. Other than the Mezzanine Debt, the Consolidated Group
will not incur any additional Mezzanine Debt. In addition, the Consolidated
Group shall not incur Mezzanine Debt on any one Real Estate Asset in excess of
Four Million Dollars ($4,000,000), and provided further, the aggregate amount of
the applicable Construction Loan and the Mezzanine Debt shall not exceed ninety
percent (90%) of the Real Estate Asset Budget Amount for any such Real Estate
Asset.
7.12. Asset Value of Real Estate Assets. The total asset value of all
projects under construction (measured by the Real Estate Assets Budget Amount)
shall not exceed thirty-five percent (35%) of the Total Current Value of Assets.
7.13. Dissolve, Liquidate, Merge, Etc. The Borrower, Guarantor or any
Special Purpose Entity shall not dissolve, liquidate, enter into any
consolidation or merger with, or acquisition of, any other Person.
Notwithstanding the foregoing, Borrower or a Special Purpose Entity may, without
the written consent of Agent (A) transfer limited partnership interests or
membership units in the Borrower or a Special Purpose Entity, as applicable, (B)
replace the general partner for the Borrower or the manager of a Special Purpose
Entity with a wholly owned Subsidiary of Guarantor, (C) convert interests in the
Borrower into interests in Guarantor, and (D) issue additional limited
partnership units or other securities, even if such issuance results in a
reduction of the partnership interest of Guarantor in the Borrower, provided
that, after giving effect to such transactions, transfer or series of transfers
described in (A), (B), (C) and (D), Guarantor or a wholly owned Subsidiary of
Guarantor owns more than fifty-one percent (51%) of the partnership interests of
the Borrower and the Borrower owns more than fifty-one percent (51%) of the
Special Purpose Entity and the Guarantor has managerial control over Borrower
and Borrower has managerial control over the applicable Special Purpose Entity.
7.14. Value of Undeveloped Land. The total asset value of all undeveloped
land owned by the Consolidated Group (excluding the value of any land under
construction) shall not exceed Five Percent (5%) of the Total Current Value of
Assets.
ARTICLE VIII
DEFAULTS
8.01. Events of Default. The Borrower agrees each of the following
described events shall constitute an "Event of Default" hereunder:
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a. The Borrower shall fail to make any payment under the Notes within
ten (10) days after the date the same are due and payable; or
b. Any representation or warranty made by the Borrower herein, in any
other Loan Document or in any certificate, financial statement or other
document furnished by the Borrower or a Special Purpose Entity pursuant to
the provisions hereof, shall prove to have been materially false or
misleading as of the time made or furnished, and the Borrower does not,
within thirty (30) days after the earlier of receiving written notice from
the Agent or the Borrower's own determination that such representation or
warranty is false or misleading, commence and complete such actions as are
necessary to make such warranty or representation true and accurate;
provided, however, that the Borrower shall not be entitled to the foregoing
cure period if the Borrower had actual knowledge that such representation
or warranty was false or misleading when made; or
c. The Borrower shall default in the performance or observance of the
covenants contained in Article VII hereof, and such default has not been
cured or corrected within thirty (30) days following written notice from
the Agent to the Borrower; provided, however, that if such default is of
such a nature that it cannot be cured or corrected within such thirty (30)
day period, the Borrower shall be entitled to such additional time as may
be necessary to cure or correct such default if the Borrower promptly
commences such cure or corrective action and diligently pursues such cure
or corrective action to completion; or
d. The Borrower shall default in the performance or observance of any
other covenant, condition or provision herein contained including those set
forth in this Article VIII for which no specific grace or cure period is
set forth, and such default has not been cured or corrected within thirty
(30) days following written notice from the Agent to the Borrower;
provided, however, that if such default is of such a nature that it cannot
be cured or corrected within such thirty (30) day period, the Borrower
shall be entitled to such additional time as may be necessary to cure or
correct such default if the Borrower promptly commences such cure or
corrective action and diligently pursues such cure or corrective action to
completion; provided, further, however, there shall be no grace or cure
period afforded to Borrower for any Event of Default set forth under
Sections 8.01(o) through 8.01(s) below; or
e. The Borrower shall default in the performance or observance of any
covenant, condition or provision contained in any other Loan Document to
which the Borrower is a party, and such default shall continue uncured
after any applicable cure or grace period, or if such Loan Document does
not contain an applicable cure period, such default has not been cured or
corrected within thirty (30) days following written notice from the Agent
to the Borrower; provided, however, that if such default is of such a
nature that it cannot be cured or corrected within such thirty (30) day
period, the Borrower shall be entitled to such additional time as may be
necessary to cure or correct such default if the Borrower promptly
commences such cure or corrective action and diligently pursues such cure
or corrective action to completion; or
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f. The Borrower or a Special Purpose Entity shall neglect, refuse or
fail to keep in full force and effect any permit or approval issued by any
Governmental Authority required for the occupancy or use of a Mortgaged
Property and the same is not reinstated within thirty (30) days after the
Borrower receives notice (from any source) that such permit or approval is
no longer in full force and effect; or
g. A Mortgaged Property or any part thereof shall be condemned or
damaged by fire or other casualty in such manner as to preclude, in the
Lenders' sole reasonable judgment, the restoration of the Improvements
forming a part of such Mortgaged Property and the Borrower fails to
substitute an alternate Mortgaged Property within sixty (60) days thereof
or fails to deliver to the Lenders the Mortgage Release Price for such
Mortgaged Property; or
h. An accurate survey of a Mortgaged Property at any time shall show
that any of the Improvements constructed thereon materially encroach upon
any street, easement, right of way or adjoining property or violate any set
back requirement, unless such encroachment or violation is satisfactorily
insured against under the Title Policy issued in respect of such Mortgaged
Property or was in existence at the time the Lenders approve the Real
Estate Asset as Mortgaged Property and shown on the survey provided to the
Agent, or that any adjoining structure materially encroaches on a Mortgaged
Property, unless such encroachment is cured within sixty (60) days
following receipt of notice thereof by the Borrower or was in existence at
the time such Mortgaged Property was mortgaged; or
i. The occurrence of any event which results in or causes a Material
Adverse Effect; or
j. Except as a result of the enforcement of any default under the
Mezzanine Debt, a writ of execution or attachment or any similar process
shall be issued or levied against all or any part of or interest in a
Mortgaged Property, or any judgment involving monetary damages shall be
entered against the Borrower which shall become a lien on a Mortgaged
Property or any portion thereof or interest therein and such execution,
attachment or similar process or judgment is not released, bonded,
satisfied, vacated or stayed within sixty (60) days after its entry or levy
or Borrower fails to deliver to the Lenders the Mortgage Release Price for
such Mortgaged Property within sixty (60) days after the date of such entry
or levy; or
k. The Borrower, a Special Purpose Entity or the Guarantor shall file
a voluntary petition in bankruptcy or shall file any petition or answer
seeking or acquiescing in any reorganization, arrangement, composition,
readjustment, liquidation, dissolution or similar relief for itself under
any present or future federal, state or other statute, law or regulation
relating to bankruptcy, insolvency or other relief for debtors; or shall
seek or consent to or acquiesce in the appointment of any trustee,
receiver, liquidator, assignee, custodian, sequestrator (or other similar
official) of the Borrower, a Special Purpose Entity or the Guarantor, or of
all or any part of a Mortgaged Property, or of any or all of the royalties,
revenues, rents, issues or profits thereof, or shall make any general
assignment for the benefit of creditors, or shall admit in writing its
inability to
42
pay its debts, as the case may be, generally as they become due, or shall
become insolvent or unable to pay its debts as they mature, or shall make a
general assignment for the benefit of creditors, or shall voluntarily
suspend transaction of its business or take any corporate action in
furtherance of the foregoing; or
l. A court of competent jurisdiction shall enter an order, judgment or
decree adjudicating the Borrower, a Special Purpose Entity or the Guarantor
as bankrupt or insolvent or approving a petition filed against the
Borrower, a Special Purpose Entity or the Guarantor seeking any
reorganization, dissolution or similar relief under any present or future
federal, state or other statute, law or regulation relating to bankruptcy,
insolvency, or other relief for debtors, and such order, judgment or decree
shall remain unvacated and unstayed for an aggregate of sixty (60) days
(whether or not consecutive) from the first date of entry thereof; or any
trustee, receiver or liquidator of the Borrower, a Special Purpose Entity
or the Guarantor or of all or any part of a Mortgaged Property, or of any
or all of the royalties, revenues, rents, issues or profits thereof, shall
be appointed without the consent or acquiescence of the Borrower, a Special
Purpose Entity or the Guarantor, as the case may be, and such appointment
shall remain unvacated and unstayed for an aggregate period of sixty (60)
days (whether or not consecutive); or
m. The Borrower or a Special Purpose Entity has breached or defaulted
under the Lease for a Mortgaged Property which results in a Material
Adverse Effect, and such breach or default has not been cured or corrected
within any applicable cure period provided under such Lease; or
n. Except in connection with any Mezzanine Debt, Guarantor sells,
assigns, hypothecates, pledges or otherwise transfers its interest as a
partner of the Borrower; or
o. At any time prior to the Facility 2 Maturity Date, the Leverage
Ratio is less than Seventy-Five Percent (75%), or at any time from and
after the Facility 2 Maturity Date, the Leverage Ratio exceeds Sixty
Percent (60%) and the same is not cured within ninety (90) days after
written notice from the Agent to Borrower; or
p. At any time, the Minimum Tangible Worth of the Borrower is less
than One Hundred Twenty Million Dollars ($120,000,000) plus Seventy-Five
Percent (75%) of additional net proceeds of future stock sales; or
q. Guarantor's dividends exceed One Hundred Percent (100%) of its
funds from operations as determined in accordance with NAREIT in any
calendar year; or
r. At any time, the aggregate occupancy of the Mortgaged Properties is
less than Eighty-Five Percent (85%), inclusive of occupancy with respect to
master leases and occupancy agreements approved by Agent; or
s. At any time, the Debt Service Coverage Ratio is less than 1.8 to
1.0 during any calendar quarter; or
t. There occurs a Reportable Event or a Prohibited Transaction under,
or any complete or partial withdrawal from, or any other event which would
constitute grounds
43
for termination of or the appointment of a trustee to administer, any
"plan" maintained by the Borrower or any ERISA Affiliate for the benefit of
its "employees" (as such terms are defined in ERISA) which could have a
Material Adverse Effect; or
u. Xxxx Klipsch shall cease to be Chairman and CEO of Guarantor or
Xxxx Xxxxxx shall cease to be President and Chief Operating Officer of
Borrower and replacements acceptable to Required Lenders are not in place
within ninety (90) days.
If any Event of Default described in Section 8.01(k) or (l) occurs the
Lenders shall be under no further obligation to make any Advances and the Loans
and all interest accrued thereon and any penalty or premium thereunder and all
other liabilities of the Borrower hereunder, thereunder and under the other Loan
Documents shall thereupon become and be immediately due and payable without any
election or action on the part of the Lenders, and without presentment, demand,
protest, or notice of any kind, all of which are hereby expressly waived, and if
any other Event of Default described in Section 8.01 occurs and, if there is a
cure period, is not cured as set forth herein, the Lenders shall terminate their
commitments to make Advances hereunder and declare the Loans and all interest
accrued thereon and any penalty or premium thereunder pursuant to Section 2.08
hereof and all other liabilities of the Borrower hereunder, thereunder and under
the other Loan Documents to be due and payable, whereupon the same shall become
and be immediately due and payable without presentment, demand, protest or
notice of any kind, all of which are hereby expressly waived.
8.02. Special Remedies. If an Event of Default shall exist, the Lenders
shall have the right, in addition to any rights or remedies available to them
under the Loan Documents or otherwise available to them at law or in equity, to
enter upon and take possession of the Mortgaged Properties. For purposes of this
Section 8.02, the Borrower agrees that the Lenders shall have the right, and
hereby irrevocably constitutes and appoints the Agent its true and lawful
attorney-in-fact, coupled with an interest, with full power of substitution, to
(i) prosecute and defend all actions or proceedings in connection with the
Mortgaged Properties and to take such action and require such performance as the
Lenders deem necessary in connection therewith; and (ii) generally do any and
every act with respect to the occupancy and use of such Mortgaged Properties as
the Borrower or a Special Purpose Entity may do in its own behalf. Should the
unadvanced portion of the Loans be insufficient to pay the sums expended or
incurred by the Lenders for any of the foregoing purposes, the amount of the
deficiency shall be added to the indebtedness evidenced by the Notes and in all
events shall be secured by the lien of the Loan Documents and shall be paid by
the Borrower to the Lenders on demand with interest thereon at the respective
Default Rates until paid.
ARTICLE IX
MISCELLANEOUS
9.01. No Implied Waiver; Cumulative Remedies; Writing Required. No delay or
failure of the Lenders in exercising any right, power or privilege hereunder (or
under any Loan Document) shall affect such right, power or privilege, nor shall
any single or partial exercise thereof or any abandonment or discontinuance of
steps to enforce such a right, power or privilege preclude any further exercise
thereof or of any other right, power or privilege. The rights and remedies of
the Lenders hereunder and under the other Loan Documents are cumulative and not
44
exclusive of any rights or remedies which it would otherwise have. Any waiver,
permit, consent or approval of any kind or character on the part of the Lenders
of any breach or default under this Agreement or any other Loan Document, or any
waiver by the Lenders of any provision or condition of this Agreement or any
other Loan Document, must be in writing and shall be effective only to the
extent as may be specifically set forth in such writing.
9.02. Taxes. The Borrower shall pay any and all stamp, document, mortgage,
intangibles, transfer and recording taxes, fees (including notary fees and
mortgage/deed of trust release fees) and similar impositions payable or
hereafter determined to be payable in connection with the execution, delivery
and/or recording and release of the Loan Documents, and the Borrower agrees to
save the Lenders harmless from and against any and all present or future claims
or liabilities with respect to, or resulting from, any delay in paying or
omitting to pay any such taxes, fees or similar impositions.
9.03. Modifications and Amendments. Upon execution thereof, each Project
Agreement shall automatically be deemed to be an amendment of this Agreement,
which amendment shall apply, however, only to the Mortgaged Property which is
the subject of such Project Agreement.
9.04. Holidays. Except as otherwise provided herein, whenever any payment
or action to be made or taken under any of the Loan Documents shall be stated to
be due or to be performed on a day which is not a business day, such payment or
action shall be made or taken on the next-following business day and such
extension of time shall be included in computing interest or fees, if any, in
connection with such payment or action.
9.05. Notices. All notices, statements, requests and demands given to or
made upon either party hereto in accordance with the provisions of this
Agreement shall be deemed to have been given or made one (1) day after the same
are deposited with a nationally recognized overnight delivery service, or
immediately upon receipt, if delivered by courier, addressed as follows:
If to the Agent: The Huntington National Bank
000 Xxxxx Xxxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxxxxxx, XX 00000
Attention: Xxxxxxx X. Xxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
With a copy to: Xxxxxx & Xxxxxxxxx LLP
00 Xxxxx Xxxxxxxx Xxxxxx
Xxxxxxxxxxxx, Xxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
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If to the Borrower: Windrose Medical Properties, L.P.
0000 Xxxxxxxx Xxxxx, Xxxxx 000
Xxxxxxxxxxxx, Xxxxxxx 00000
Attention: Xxxxxxxxx X. Xxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
With a copy to: Xxxxxx X. Xxxxxx
Secretary and General Counsel
0000 Xxxxxxxx Xxxxx, Xxxxx 000
Xxxxxxxxxxxx, Xxxxxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
or in accordance with the latest unrevoked written direction from either party
to the other party hereto. Failure of the Agent to furnish the Borrower's
attorney with a copy of any notice provided to the Borrower hereunder shall not
be deemed a failure of the Agent to provide the Borrower with such notice and
shall not affect, or in any way prevent or estop the Lenders from exercising,
any right or remedy of the Lenders hereunder or under any of the other Loan
Documents.
9.06. Reimbursement for Certain Expenses. All reasonable costs incidental
to the Loans and all Advances thereof, including, but not limited to, title
insurance premiums, survey charges, appraisal fees, insurance premiums,
inspecting engineers' and/or architects' fees, attorneys' costs of the Agent and
fees and any and all other incidental expenses of the Agent, shall be paid by
the Borrower, together with any other fees agreed upon by Borrower, Agent and
Lenders. All such fees and expenses shall be paid upon the receipt of a
statement therefor.
9.07. No Third Party Rights. Nothing in this Agreement, whether express or
implied, shall be construed to give to any Person other than the parties hereto
any legal or equitable right, remedy or claim under or in respect of this
Agreement or any other Loan Document, which is intended for the sole and
exclusive benefit of the parties hereto and thereto.
9.08. Interest Limitation. Notwithstanding anything to the contrary
contained herein or in any of the other Loan Documents, the obligations of the
Borrower to the Lenders under this Agreement and any other Loan Documents are
subject to the limitation that payments of interest to the Lenders shall not be
required to the extent that receipt by the Lenders of any such payment by the
Borrower would be contrary to provisions of governmental requirements applicable
to the Lenders which limit the maximum rate of interest which may be charged or
collected by the Lenders.
9.09. Severability. The provisions of this Agreement are intended to be
severable. If any provision of this Agreement shall be held invalid or
unenforceable in whole or in part in any jurisdiction, such provision shall, as
to such jurisdiction, be ineffective to the extent of such invalidity or
unenforceability without in any manner affecting the validity or enforceability
thereof in any other jurisdiction or the remaining provisions hereof in any
jurisdiction.
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9.10. Governing Law. THE BORROWER AGREES WITH THE LENDERS THAT, EXCEPT AS
EXPRESSLY SET FORTH IN THE MORTGAGES AND THE ASSIGNMENTS OF RENTS AND ANY OTHER
LOAN DOCUMENTS, THE LAW OF THE STATE OF INDIANA SHALL GOVERN ALL MATTERS
RELATING TO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS AND ALL OF THE
INDEBTEDNESS OR OBLIGATIONS OF THE BORROWER ARISING HEREUNDER OR THEREUNDER. THE
BORROWER (a) SHALL BE SUBJECT TO PERSONAL JURISDICTION IN THE STATE OF INDIANA
AND THE FEDERAL COURTS OF THE UNITED STATES OF AMERICA LOCATED IN STATE OF
INDIANA (AND ANY APPELLATE COURTS TAKING APPEALS THEREFROM) FOR THE ENFORCEMENT
OF THE BORROWER'S OBLIGATIONS HEREUNDER AND UNDER THE OTHER LOAN DOCUMENTS AND
(b) WAIVES ANY AND ALL PERSONAL RIGHTS UNDER THE LAW OF ANY OTHER STATE TO
OBJECT TO JURISDICTION WITHIN INDIANA FOR THE PURPOSES OF SUCH ACTION, SUIT,
PROCEEDING OR LITIGATION TO ENFORCE SUCH OBLIGATIONS OF THE BORROWER. THE
BORROWER WAIVES AND AGREES NOT TO ASSERT, AS A DEFENSE IN ANY ACTION, SUIT OR
PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE OTHER LOAN
DOCUMENTS (x)THAT IT IS NOT SUBJECT TO SUCH JURISDICTION OR THAT SUCH ACTION,
SUIT OR PROCEEDING MAY NOT BE BROUGHT OR IS NOT MAINTAINABLE IN THOSE COURTS OR
THAT THIS AGREEMENT AND SUCH OTHER LOAN DOCUMENTS MAY NOT BE ENFORCED IN OR BY
THOSE COURTS OR THAT IT IS EXEMPT OR IMMUNE FROM EXECUTION, (y) THAT THE ACTION,
SUIT OR PROCEEDING IS BROUGHT IN AN INCONVENIENT FORUM, OR (z) THAT THE VENUE OF
THE ACTION, SUIT OR PROCEEDING IS IMPROPER. NOTHING IN THIS SECTION 9.10 SHALL
BE DEEMED TO PRECLUDE THE LENDERS FROM FILING ANY ACTION, SUIT OR PROCEEDING IN
RESPECT OF THIS AGREEMENT OR SUCH OTHER LOAN DOCUMENTS IN THE STATE IN WHICH THE
BORROWER HAS ITS CHIEF EXECUTIVE OFFICE OR THE FEDERAL COURTS OF THE UNITED
STATES OF AMERICA LOCATED IN THE STATE IN WHICH THE BORROWER HAS ITS CHIEF
EXECUTIVE OFFICE, OR THE STATE IN WHICH A MORTGAGED PROPERTY IS LOCATED OR THE
FEDERAL COURTS OF THE UNITED STATES OF AMERICA LOCATED IN THE STATE IN WHICH A
MORTGAGED PROPERTY IS LOCATED.
9.11. Certain Fees. No broker's or finder's fee or commission will be
payable with respect to the Loans, this Agreement, or the other Loan Documents,
or any of the transactions contemplated hereby, and the Borrower hereby
indemnifies the Lenders against, and agrees that it will hold the Lenders
harmless from, any claim, demand, or liability for any such broker's or finder's
fee or commission alleged to have been incurred in connection herewith or
therewith and any expenses (including reasonable fees, expenses, and
disbursements of counsel) arising in connection with any such claim, demand, or
liability.
9.12. Survival. All representations, warranties, covenants, agreements and
obligations of the Borrower contained in this Agreement, as amended or
supplemented from time to time, shall survive the making of Advances and shall
continue in full force and effect so long as the Loans are outstanding and until
payment and performance in full of all of the Borrower's obligation thereunder
and under the Loan Documents.
47
9.13. Counterparts. This Agreement may be executed in any number of
counterparts and by the different parties hereto on separate counterparts, each
of which, when so executed and delivered by the parties, shall constitute an
original but all such counterparts together constituting but one and the same
instrument.
9.14. Successors and Assigns. This Agreement shall be binding upon and
shall inure to the benefit of the Lenders, the Borrower and their respective
successors and assigns, except that the Borrower may not assign or transfer its
rights and obligations hereunder or any interest herein without the prior
written consent of the Lenders.
9.15. Time of Essence. Time is of the essence under the Loan Documents.
9.16. No Joint Venture. Notwithstanding anything to the contrary herein
contained or implied, the Lenders, by this Agreement, or by any action pursuant
hereto, shall not be deemed to be a partner of, or a joint venturer with, the
Borrower, and the Borrower hereby indemnifies and agrees to defend and hold the
Lenders harmless, including the payment of reasonable attorneys' fees, from any
loss resulting from any judicial construction of the parties' relationship as
such.
1.01. Lenders Not in Control. . None of the covenants or other provisions
contained in the Loan Documents shall, or shall be deemed to, give the Lenders
the rights or power to exercise control over the affairs and/or management of
the Borrower, the power of the Lenders being limited to the right to exercise
the rights and remedies provided to it in the Loan Documents.
9.17. Waiver of Jury Trial. The Borrower and the Lenders, after consulting
or having had the opportunity to consult with counsel, knowingly, voluntarily
and intentionally waives any right they may have to a trial by jury in any
litigation based upon or arising out of the Loan, this Agreement or any other
Loan Document or any of the transactions contemplated hereby or by any other
Loan Document or any course of conduct, dealing, statements, whether oral or
written, or actions of the Borrower or the Lenders. Neither the Borrower nor the
Lenders shall seek to consolidate, by counterclaim or otherwise, any action in
which a jury trial has been waived with any other action in which a jury trial
cannot be or has not been waived. These provisions shall not be deemed to have
been modified in any respect or relinquished by the Lenders or the Borrower
except by written instrument executed by both the Borrower and the Lenders.
ARTICLE X
ASSIGNMENT AND PARTICIPATIONS
10.01. Several Liability. Anything contained in this Agreement to the
contrary notwithstanding, the obligations of the Lenders to Borrower under this
Agreement are several and not joint and several; each Lender shall only be
obligated to fund its Percentage of each disbursement to be made hereunder up to
the amount of its Commitment.
10.02. Assignments and Participations.
a. Each Lender shall have the right to assign, transfer, sell,
negotiate, pledge or otherwise hypothecate this Agreement and any of its
rights and security hereunder and
48
under the other Loan Documents to any other lending institution (an
"Assignee") with the prior written consent of the Agent and with the prior
written consent of Borrower, which consents by the Agent and the Borrower
shall not be unreasonably withheld, conditioned or delayed (provided that
no consent of Borrower shall be required if the Assignee is also a Lender
or if an Event of Default then exists) and no consent of the Agent shall be
required if the Assignee is also a Lender; provided, however, that (i) the
parties to each such assignment shall execute and deliver to Agent, for its
approval and acceptance, an Assignment and Acceptance, (ii) each such
assignment shall be of a constant, and not a varying, percentage of the
assigning Lender's rights and obligations under this Agreement, (iii)
unless the Agent and, so long as no Event of Default exists, Borrower
otherwise consent, the aggregate amount of the Commitment of the assigning
Lender being assigned pursuant to each such assignment shall in no event be
less than Five Million Dollars ($5,000,000), and (iv) if the assignment is
less than the assigning Lender's entire interest in the Loans, the
assigning Lender must retain at least a Five Million Dollar ($5,000,000)
interest in the Loans. The Agent may designate any Assignee accepting an
assignment of a specified portion of the Loans to be a Co-Agent, an
"Arranger" or similar title, but such designation shall not confer on such
Assignee the rights or duties of the Agent. Upon such execution, delivery,
approval and acceptance, and upon the effective date specified in the
applicable Assignment and Acceptance, (a) the Assignee thereunder shall be
a party hereto and, to the extent that rights and obligations hereunder
have been assigned to it pursuant to such Assignment and Acceptance, have
the rights and obligations of a Lender hereunder and under the other Loan
Documents, and Borrower hereby agrees that all of the rights and remedies
of the Lenders in connection with the interest so assigned shall be
enforceable against Borrower by an Assignee with the same force and effect
and to the same extent as the same would have been enforceable but for such
assignment, and (b) the assigning Lender thereunder shall, to the extent
that rights and obligations hereunder and under the other Loan Documents
have been assigned by it pursuant to such Assignment and Acceptance,
relinquish its rights and be released from its obligations hereunder and
thereunder. Notwithstanding the foregoing, if, as a result of such
assignment by a Lender (or by entities of which a Lender or Lenders are
subsidiaries), a Lender or two or more Lenders that are, directly or
indirectly, subsidiaries of a common parent (collectively, "Merged
Lenders") hold a Commitment or Commitments in an aggregate amount exceeding
the amount of the Commitment held by the Agent, the Agent may, at its
election, but without any obligation to do so, acquire from such Lender or
Merged Lenders a portion of its or their Commitments and rights and
obligations hereunder in an amount necessary to reduce the aggregate amount
of the Commitments of the Merged Lenders, and to increase the Commitment of
the Agent, to equal amounts. Such election shall be exercisable by notice
from the Agent to the Merged Lenders and shall be effected, on a date
designated in such notice.
b. By executing and delivering an Assignment and Acceptance, the
assigning Lender thereunder and the Assignee thereunder confirm to and
agree with each other and the other parties hereto as follows: (i) except
as provided in such Assignment and Acceptance, such assigning Lender makes
no representation or warranty and assumes no responsibility with respect to
any statements, warranties or representations made in or in connection with
this Agreement or any other Loan Document or the execution, legality,
49
validity, enforceability, genuineness, sufficiency or value of this
Agreement or any other Loan Document or any other instrument or document
furnished in connection therewith; (ii) such assigning Lender makes no
representation or warranty and assumes no responsibility with respect to
the financial condition of the Borrower, Guarantor or any Special Purpose
Entity or the performance or observance by the Borrower, Guarantor or any
Special Purpose Entity of any of its obligations under any Loan Document or
any other instrument or document furnished in connection therewith; (iii)
such Assignee confirms that it has received a copy of this Agreement
together with such financial statements, Loan Documents and other documents
and information as it has deemed appropriate to make its own credit
analysis and decision to enter into the Assignment and Acceptance and to
become a Lender hereunder; (iv) such Assignee will, independently and
without reliance upon Agent, the assigning Lender 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 decisions in taking or not taking
action under this Agreement; (v) such Assignee appoints and authorizes the
Agent to take such action as the Agent on its behalf and to exercise such
powers under this Agreement and the other Loan Documents as are delegated
to Agent by the terms hereof and thereof, together with such powers as are
reasonably incidental thereto; and (vi) such Assignee agrees that it will
perform in accordance with their terms all of the obligations which by the
terms of this Agreement are required to be performed by it as a Lender.
c. Agent shall maintain a copy of each Assignment and Acceptance
delivered to and accepted by it and shall record in its records the names
and address of each Lender and the Commitment of, and Percentage of the
Loans owing to, such Lender from time to time. Borrower, the Agent and
Lenders may treat each entity whose name is so recorded as a Lender
hereunder for all purposes of this Agreement.
d. Upon receipt of an Assignment and Acceptance executed by an
assigning Lender and an Assignee, Agent shall, if such Assignment and
Acceptance has been properly completed and consented to if required herein,
accept such Assignment and Acceptance, and record the information contained
therein in its records, and the Agent shall use its best efforts to give
prompt notice thereof to Borrower (provided that neither the Agent nor the
Lenders shall be liable for any failure to give such notice).
e. Borrower shall use reasonable efforts to cooperate with Agent and
each Lender in connection with the assignment of interests under this
Agreement or the sale of participations herein.
f. Anything in this Agreement to the contrary notwithstanding, and
without the need to comply with any of the formal or procedural
requirements of this Agreement, including this Section, any Lender may at
any time and from time to time pledge and assign all or any portion of its
rights under all or any of the Loan Documents to a Federal Reserve Bank;
provided that no such pledge or assignment shall release such Lender from
its obligations hereunder. To facilitate any such pledge or assignment, the
Agent shall, at the request of such Lender, enter into a letter agreement
with the Federal Reserve Bank in, or substantially in, the form of the
exhibit to Appendix C to the Federal Reserve Bank of New York Operating
Circular No. 12.
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g. Anything in this Agreement to the contrary notwithstanding, any
Lender may assign all or any portion of its rights and obligations under
this Agreement to another branch or affiliate of such Lender without first
obtaining the approval of any Agent or the Borrower, provided that (i) such
Lender remains liable hereunder unless the Borrower and Agent shall
otherwise agree, (ii) at the time of such assignment such Lender is not a
Defaulting Lender, (iii) such Lender gives the Agent and Borrower at least
fifteen (15) days prior written notice of any such assignment, and (iv) the
parties to each such assignment execute and deliver to Agent an Assignment
and Acceptance.
h. Each Lender shall have the right, without the consent of the
Borrower, to sell participations to one or more other Lenders (a
"Participant") in or to all or a portion of its rights and obligations
under the Loans and the Loan Documents; provided, however, that (i) such
Lender's obligations under this Agreement (including without limitation its
Commitment to Borrower hereunder) shall remain unchanged, (ii) such Lender
shall remain solely responsible to the other parties hereto for the
performance of such obligations (iii) the Borrower, the Agent and the other
Lenders shall continue to deal solely and directly with such Lender in
connection with such Lender's rights and obligations under this Agreement
and with regard to any and all payments to be made under this Agreement and
(iv) the holder of any such participation shall not be entitled to voting
rights under this Agreement or the other Loan Documents (but such holder
may contract with the Lender selling such Participant its interest in such
Lender's share of the Loan as to voting of such Lender's interest under
Section 11.06(b) [but not under any other section of this Agreement],
provided that any such agreement by a Lender shall bind only such Lender
alone and not Borrower, the other Lenders or the Agent).
i. No Assignee of any rights and obligations under this Agreement
shall be permitted to subassign such rights and obligations. No participant
in any rights and obligations under this Agreement shall be permitted to
sell subparticipations of such rights and obligations.
j. Borrower acknowledges and agrees that Lenders may provide to any
Assignee or Participant originals or copies of this Agreement, any other
Loan Document and any other documents, instruments, certificates, opinions,
insurance policies, letters of credit, reports, requisitions and other
materials and information of every nature or description, and may
communicate all oral information, at any time submitted by or on behalf of
Borrower or received by any Lender in connection with the Loan or with
respect to Borrower, provided that prior to any such delivery or
communication, such Assignees or Participants shall agree to preserve the
confidentiality of any of the foregoing to the same extent that such Lender
agreed to preserve such confidentiality. In order to facilitate assignments
to Assignees and sales to Participants, Borrower shall execute such further
documents, instruments or agreements as Lenders may reasonably require;
provided, that Borrower shall not be required (i) to execute any document
or agreement which would materially decrease its rights, or materially
increase its obligations, relative to those set forth in this Agreement or
any of the other Loan Documents unless the Loan Documents are amended
concurrently therewith (including financial obligations, personal recourse,
representations and warranties and reporting requirements), or (ii) to
expend more than incidental sums of money or incidental
51
administrative time for which it does not receive reasonable reimbursement
in order to comply with any requests or requirements of any Lender in
connection with such assignment or sale arrangement. In addition, Borrower
agrees to cooperate fully with Lenders in the exercise of the Lenders'
rights pursuant to this Section, including providing such information and
documentation regarding Borrower as any Lender or any potential Assignee or
Participant may reasonably request and to meet with potential Assignees and
Participants.
ARTICLE XI
AGENT
11.01. Appointment. The Huntington National Bank is hereby appointed as
Agent hereunder and under each other Loan Document, and, subject to the terms
hereof, each Lender hereby irrevocably authorizes the Agent to act as agent for
the Lenders and to take such actions as the Lenders are obligated or entitled to
take under the provisions of this Agreement and the other Loan Documents and to
exercise such powers as are set forth herein or therein, together with such
other powers as are reasonably incidental thereto. Agent agrees to act as such
upon the express conditions contained in this Article in substantially the same
manner that it would act in dealing with a loan held for its own account. Agent
shall not have a fiduciary relationship with respect to any Lender by reason of
this Agreement.
The provisions of this Article are solely for the benefit of the Agent and
the Lenders, and Borrower shall not have any rights to rely on or enforce any of
the provisions hereof except as provided in Section 11.02 below. In performing
its functions and duties under this Agreement, the Agent shall act solely as
agent for the Lenders and does not assume, and shall not be deemed to have
assumed, any obligations toward or relationship of agency or trust with or for
the Borrower.
11.02. Reliance on Agent. All acts of and communications by the Agent, as
agent for the Lenders, shall be deemed legally conclusive and binding; and
Borrower or any third party (including any court) shall rely on any and all
communications or acts of the Agent with respect to the exercise of any rights
or the granting of any consent, waiver or approval on behalf of a Lender in all
circumstances where an action by such Lender is required or permitted pursuant
to this Agreement or the provisions of any other Loan Document or by applicable
law without the right or necessity of making any inquiry of any individual
Lender as to the authority of Agent with respect to such matter. In no event
shall any of the foregoing limit the rights or obligations of any Lender with
respect to any other Lender pursuant to this Article XI.
11.03. Powers. The Agent shall have and may exercise such powers under the
Loan Documents as are specifically delegated to the Agent by the terms of each
thereof, together with such powers as are reasonably incidental thereto, and may
exercise all other powers of Lender as are not made subject to the consent of
the Required Lenders pursuant to Section 11.06(a) or any other provision of this
Agreement or to the consent of all Lenders pursuant to Section 11.06(b) or any
other provision of this Agreement. The Agent shall not be considered, or be
deemed, a separate agent of any Lender hereunder, but is, and shall be deemed,
acting in its contractual capacity as Agent, exercising such rights and powers
under the Loan Documents as are specifically delegated to the Agent or Agent is
otherwise entitled to take hereunder. Agent shall
52
have no implied duties to any Lender, or any obligation to any Lender to take
any action except any action specifically provided by the Loan Documents to be
taken by the Agent.
11.04. Disbursements.
a. At least one (1) Business Day (by 11:00 a.m. Columbus, Ohio time)
prior to each date a disbursement of the Loan is to be made hereunder
pursuant to this Agreement (or at least three (3) LIBOR Business Days [by
11:00 a.m. Columbus, Ohio time] for any disbursements to be made at the
Adjusted LIBOR Rate), the Agent shall notify each Lender of the proposed
disbursement. Each Lender shall make available to Agent (or the funding
Lender or entity designated by the Agent), the amount of such Lender's
Percentage of such disbursement (with respect to such Lender, such amount
being referred to herein as an "Advance") in immediately available funds
not later than 11:00 a.m. (Columbus, Ohio time) on the date such
disbursement is to be made (such date being referred to herein as a
"Funding Date"). Unless the Agent shall have been notified by any Lender
prior to such time for funding in respect of any Advance that such Lender
does not intend to make available to the Agent such Lender's Advance, the
Agent may assume that such Lender has made such amount available to the
Agent and the Agent, in its sole discretion, may, but shall not be
obligated to, make available to Borrower a corresponding amount. If such
corresponding amount is not in fact made available to the Agent by such
Lender on or prior to the respective Funding Date, such Lender agrees to
pay and Borrower agrees to repay to Agent forthwith on demand such
corresponding amount together with interest thereon, for each day from the
date such amount is made available to Borrower until the date such amount
is paid or repaid to Agent, at (A) in the case of such Lender, the Federal
Funds Effective Rate, and (B) in the case of Borrower, the interest rate
applicable at the time to a disbursement made on such Funding Date. If such
Lender shall pay to Agent such corresponding amount, such amount so paid
shall constitute such Lender's Advance, and if both such Lender and
Borrower shall have paid and repaid, respectively, such corresponding
amount, Agent shall promptly return to Borrower such corresponding amount
in same day funds.
b. Requests by the Agent for funding by the Lenders of disbursements
of the Loan will be made by facsimile. Each Lender shall make its Advance
available to the Agent in dollars and in immediately available funds to
such Lender and account as the Agent may designate, not later than 11:00
a.m. (Columbus, Ohio time) on the Funding Date. Nothing in this Section
11.04 shall be deemed to relieve any Lender of its obligation hereunder to
make any Advance on any Funding Date, nor shall any Lender be responsible
for the failure of any other Lender to perform its obligations to make any
Advance hereunder, and the Commitment of any Lender shall not be increased
or decreased as a result of the failure by any other Lender to perform its
obligation to make any Advances hereunder.
c. As soon as practical Agent will promptly forward to each Lender
copies of the Disbursement Request documents described in Section 5.01
hereof. Delivery of the Disbursement Request documents shall not be a
condition to funding any Advance.
11.05. Distribution and Apportionment of Payments.
53
a. Subject to Section 11.05(b), payments actually received by Agent
for the account of the Lenders shall be paid to them promptly after receipt
thereof by Agent, but in any event within one (1) Business Day, provided
that, if any such payments are not distributed to the Lenders within one
Business Day after Agent's receipt thereof, Agent shall pay to such Lenders
interest thereon, at the lesser of (i) the Federal Funds Effective Rate and
(ii) if the applicable payment represents repayment of a portion of the
principal of the Loan, the rate of interest applicable to such portion of
the Loan, from the date of receipt of such funds by Agent until such funds
are paid in immediately available funds to such Lenders provided such funds
are received by Agent not later than 11:00 A.M. (Columbus, Ohio time) on
the date of receipt. All payments of principal and interest in respect of
the Loan, all payments of the fees described in this Agreement (but not in
any separate fee letter except to the extent expressly set forth therein),
and all payments in respect of any other obligations of Borrower under the
Loan Documents shall be allocated among such of Lenders as are entitled
thereto, in proportion of their respective Percentages or otherwise as
provided herein in the other Loan Documents, as the case may be. The Agent
shall distribute to each Lender at its primary address set forth herein or
in its Assignment and Acceptance, or at such other address as a Lender may
request in writing, such funds as it may be entitled to receive, provided
that the Agent shall in any event not be bound to inquire into or determine
the validity, scope or priority of any interest or entitlement of any
Lender and may suspend all payments and seek appropriate relief (including
without limitation instructions from the Required Lenders, or all Lenders,
as applicable, or an action in the nature of interpleader) in the event of
any doubt or dispute as to any apportionment or distribution contemplated
hereby. The order of priority herein is set forth solely to determine the
rights and priorities of the Lenders as among themselves and may at any
time or from time to time be changed by the Lenders as they may elect, in
writing, without necessity of notice to or consent of or approval by
Borrower. If a Lender (a "Defaulting Lender") defaults in making any
Advance or paying any other sum payable by it hereunder, such sum together
with interest thereon at the Default Rate from the date such amount was due
until repaid (such sum and interest thereon as aforesaid referred to,
collectively, as the "Lender Default Obligation") shall be payable by the
Defaulting Lender (i) to any Lender(s) which elect, at their sole option
(and with no obligation to do so), to fund the amount which the Defaulting
Lender failed to fund or (ii) to Agent or any other Lender which under the
terms of this Agreement is entitled to reimbursement from the Defaulting
Lender for the amounts advanced or expended. Notwithstanding any provision
hereof to the contrary, until such time as a Defaulting Lender has repaid
the Lender Default Obligation in full, all amounts which would otherwise be
distributed to the Defaulting Lender shall instead be applied first to
repay the Lender Default Obligation (to be applied first to interest at the
Default Rate and then to principal) until the Lender Default Obligation has
been repaid in full (whether by such application or by cure by the
Defaulting Lender), whereupon such Lender shall no longer be a Defaulting
Lender. Any interest collected from Borrower on account of principal
advanced by any Lender(s) on behalf of a Defaulting Lender shall be paid to
the Lender (s) who made such advance and shall be credited against the
Defaulting Lender's obligation to pay interest on the amount advanced at
the Default Rate. If no other Lender makes an advance a Defaulting Lender
failed to fund, a portion of the indebtedness of Borrower to the Defaulting
Lender equal to the Lender Default Obligation shall be
54
subordinated to the indebtedness of Borrower to all other Lenders and shall
be paid only after the indebtedness of Borrower to all other Lenders is
paid. The provisions of this Section shall apply and be effective
regardless of whether an Event of Default occurs and is then continuing,
and notwithstanding (i) any other provision of this Agreement to the
contrary or (ii) any instruction of Borrower as to its desired application
of payments. No Defaulting Lender shall have the right to vote on matters
which are subject to the consent or approval of Required Lenders or all
Lenders and while any Lender is a Defaulting Lender the requisite
percentage of Lenders which constitutes the Required Lenders shall be
calculated exclusive of the Percentage of the Defaulting Lender. The Agent
shall be entitled to (i) withhold or set off, and to apply to the payment
of the Lender Default Obligation any amounts to be paid to such Defaulting
Lender under this Agreement, and (ii) bring an action or suit against such
Defaulting Lender in a court of competent jurisdiction to recover the
Lender Default Obligation and, to the extent such recovery would not fully
compensate the Lenders for the Defaulting Lender's breach of this
Agreement, to collect damages. In addition, the Defaulting Lender shall
indemnify, defend and hold Agent and each of the other Lenders harmless
from and against any and all claims, actions, liabilities, damages, costs
and expenses (including attorneys' fees and expenses), plus interest
thereon at the Default Rate, for funds advanced by Agent or any other
Lender on account of the Defaulting Lender or any other damages such
persons may sustain or incur by reason of or as a direct consequence of the
Defaulting Lender's failure or refusal to abide by its obligations under
this Agreement.
b. At least five Business Days prior to the first date on which
interest or fees are payable hereunder for the account of any Lender, each
Lender that is not incorporated under the laws of the United States of
America, or a state thereof, agrees that it will deliver to the Agent two
duly completed copies of United States Internal Revenue Service Form 1001
or 4224, certifying in either case that such Lender is entitled to receive
payments under this Agreement and the Notes without deduction or
withholding of any United States federal income taxes. Each Lender which so
delivers a Form 1001 or 4224 further undertakes to deliver the Agent two
additional copies of such form (or a successor form) on or before the date
that such form expires or becomes obsolete or after the occurrence of any
event requiring a change in the most recent forms so delivered by it, and
such amendments thereto or extensions or renewals thereof as may be
reasonably requested by the Agent, in each case certifying that such Lender
is entitled to receive payments under this Agreement and the Note without
deduction or withholding of any United States federal income taxes, unless
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 advises the Agent that it is not capable
of receiving payments without any deduction or withholding of United States
federal income tax.
11.06. Consents and Approvals.
a. Each of the following shall require the approval or consent of the
Required Lenders:
55
i. Declaring the Notes to be immediately due and payable
following an Event of Default or any rescission of any such
acceleration;
ii. Approval of the exercise of rights and remedies under the
Loan Documents following an Event of Default;
iii. Appointment of a successor Agent or removal of Agent;
iv. Approval of Post-Default Plan (defined in Section 11.07(d));
v. Approval of a new Mortgaged Property which is not a Restricted
Asset; and
vi. Except as referred to in subsection (b) below, approval of
any amendment or modification of this Agreement or any of the other
Loan Documents, or issuance of any waiver of any material provision of
this Agreement (including any Conditional Default or Event of Default)
or any of the other Loan Documents;
b. Each of the following shall require the approval or consent of all
the Lenders:
i. Extension of the maturity date of a Loan (beyond any extension
permitted herein) or forgiveness of all or any portion of the
principal amount of a Loan or any accrued interest thereon, or any
other amendment of this Agreement or the other Loan Documents which
would reduce the interest rate options or the rate at which fees are
calculated or forgive any loan fee, or extend the time of payment of
any principal, interest or fees;
ii. Reduction of the percentage specified in the definition of
Required Lenders;
iii. Increasing of the amount of a Loan or any Lender's
Commitment;
iv. Release of Borrower, Guarantor or any lien on any material
collateral (including the Mortgaged Properties) (except as Borrower is
entitled to under the Loan Documents);
v. Approval of a Restricted Asset as a Mortgaged Property; and
vi. Amendment of the provisions of this Article XI.
c. In addition to the required consents or approvals referred to in
subsections (a) and (b) above, the Agent may at any time request
instructions from the Required
56
Lenders with respect to any actions or approvals which, by the terms of
this Agreement or of any of the Loan Documents, the Agent is permitted or
required to take or to grant without instructions from any Lenders, and if
such instructions are promptly requested, the Agent shall be absolutely
entitled to refrain from taking any action or to withhold any approval and
shall not be under any liability whatsoever for refraining from taking any
action or withholding any approval under any of the Loan Documents until it
shall have received such instructions from the Required Lenders. Without
limiting the foregoing, no Lender shall have any right of action whatsoever
against any Agent as a result of such Agent acting or refraining from
acting under this Agreement or any of the other Loan Documents in
accordance with the instructions of the Required Lenders or, where
applicable, all Lenders. The Agent shall promptly notify each Lender at any
time that the Required Lenders have instructed the Agent to act or refrain
from acting pursuant hereto. Each Lender hereby agrees to approve or
disapprove a request by Borrower to add new Mortgaged Properties within ten
(10) Business Days after receipt of the information set forth in Exhibit K
hereto.
d. Each Lender authorizes and directs the Agent to enter into the Loan
Documents other than this Agreement for the benefit of the Lenders. Each
Lender agrees that any action taken by the Agent at the direction or with
the consent of the Required Lenders in accordance with the provisions of
this Agreement or any other Loan Document, and the exercise by the Agent at
the direction or with the consent of the Required Lenders of the powers set
forth herein or therein, together with such other powers as are reasonably
incidental thereto, shall be authorized and binding upon all Lenders,
except for actions specifically requiring the approval of all Lenders. All
communications from the Agent to the Lenders requesting Lender's
determination, consent, approval or disapproval (i) shall be given in the
form of a written notice to each Lender, (ii) shall be accompanied by a
description of the matter or item as to which such determination, approval,
consent or disapproval is requested, or shall advise each Lender where such
matter or item may be inspected, or shall otherwise describe the matter or
issue to be resolved, (iii) shall include, if reasonably requested by a
Lender and to the extent not previously provided to such Lender, written
materials and a summary of all oral information provided to the Agent by
Borrower in respect of the matter or issue to be resolved, and (iv) shall
include the Agent's recommended course of action or determination in
respect thereof. Each Lender shall reply promptly, but in any event within
ten (10) Business Days after receipt of the request therefor from the Agent
(the "Lender Reply Period"). Unless a Lender shall give written notice to
the Agent that it objects to the recommendation or determination of the
Agent (together with a written explanation of the reasons behind such
objection) within the Lender Reply Period, such Lender shall be deemed to
have approved of or consented to such recommendation or determination. With
respect to decisions requiring the approval of the Required Lenders or all
Lenders, the Agent shall upon receiving the required approval or consent
follow the course of action or determination recommended to the Lenders by
the Agent or such other course of action recommended by the Required
Lenders.
11.07. Consents and Approvals. The Agent is hereby authorized on behalf of
all Lenders, without the necessity of any notice to or further consent from any
Lender, at any time and from time to time, to take any action with respect to
any collateral for the Loans or any Loan
57
Document which may be necessary to preserve and maintain such collateral or to
perfect and maintain perfected the liens upon such collateral granted pursuant
to this Agreement and the other Loan Documents.
a. Except as provided in this Agreement, the Agent shall have no
obligation whatsoever to any Lender or to any other person or entity to
assure that any collateral exists or is owned by Borrower or is cared for,
protected or insured or has been encumbered or that the liens granted
herein or in any of the other Loan Documents or pursuant hereto or thereto
have been properly or sufficiently or lawfully created, perfected,
protected or enforced or are entitled to any particular priority.
b. Should the Agent commence any proceeding or in any way seek to
enforce the Agent's or the Lenders' rights or remedies under the Loan
Documents, irrespective of whether as a result thereof the Agent shall
acquire title to any collateral, each Lender, upon demand therefor from
time to time, shall contribute its share (based on its Percentage) of the
reasonable costs and/or expenses of any such enforcement or acquisition,
including, but not limited to, fees of receivers or trustees, court costs,
title company charges, filing and recording fees, appraisers' fees and fees
and expenses of attorneys to the extent not otherwise reimbursed by
Borrower. Without limiting the generality of the foregoing, each Lender
shall contribute its share (based on its Percentage) of all reasonable
costs and expenses incurred by the Agent (including reasonable attorneys'
fees and expenses) if the Agent employ counsel for advice or other
representation (whether or not any suit has been or shall be filed) with
respect to any collateral for the Loans or any part thereof, or any of the
Loan Documents, or the attempt to enforce any security interest or lien on
any collateral, or to enforce any rights of the Agent or the Lenders or any
of Borrower's or any other party's obligations under any of the Loan
Documents, but not with respect to any dispute between any Agent and any
other Lender(s). It is understood and agreed that in the event the Agent
determines it is necessary to engage counsel for Lender from and after the
occurrence of a Default or Event of Default, said counsel shall be selected
by the Agent and written notice of such selection, together with a copy of
such counsel's engagement letter and fee estimate, shall be delivered to
the Lenders.
c. In the event that all or any portion of the collateral for the
Loans is acquired by the Agent as the result of the exercise of any
remedies hereunder or under any other Loan Document, or is retained in
satisfaction of all or any part of Borrower's obligations under the Loan
Documents, title to any such collateral or any portion thereof shall be
held in the name of the Agent or a nominee or subsidiary of Agent, as
agent, for the ratable benefit of the Agent and the Lenders. The Agent
shall prepare a recommended course of action for such collateral (the
"Post-Default Plan"), which shall be subject to the approval of the
Required Lenders. The Agent shall administer the collateral in accordance
with the Post-Default Plan, and upon demand therefor from time to time,
each Lender will contribute its share (based on its Percentage) of all
reasonable costs and expenses incurred by the Agent pursuant to the
Post-Default Plan, including without limitation, any operating losses and
all necessary operating reserves. To the extent there is net operating
income from such collateral, the Agent shall, in accordance with the
Post-Default Plan, determine the amount and timing of distributions to the
58
Lenders. All such distributions shall be made to the Lenders in accordance
with their respective Percentages. In no event shall the provisions of this
subsection or the Post-Default Plan require the Agent or any Lender to take
an action which would cause such Lender to be in violation of any
applicable regulatory requirements.
11.08. Lender Actions Against Borrower or the Collateral. Each Lender
agrees that it will not take any action, nor institute any actions or
proceedings, against Borrower or any other Person hereunder or under any other
Loan Documents with respect to exercising claims against the Borrower or rights
in any Collateral without the consent of the Required Lenders. With respect to
any action by the Agent to enforce the rights and remedies of the Agent and the
Lenders with respect to the Borrower and any collateral in accordance with the
terms of this Agreement, each Bank hereby consents to the jurisdiction of the
court in which such action is maintained.
11.09. Assignment and Participation. No Lender shall be permitted to assign
or sell all or any portion of its rights and obligations under this Agreement to
Borrower or any Affiliate of Borrower.
11.10. Ratable Sharing. Subject to Sections 11.04 and 11.05, Lenders agree
among themselves that (i) with respect to all amounts received by them which are
applicable to the payment of the Loans, equitable adjustment will be made so
that, in effect, all such amounts will be shared among them ratably in
accordance with their Percentages, whether received by voluntary payment, by the
exercise of the right of set-off or bankers' lien, by counterclaim or cross
action or by the enforcement of any or all of the Loan Documents or any
collateral and (ii) if any of them shall by voluntary payment or by the exercise
of any right of counterclaim, set-off, bankers' lien or otherwise, receive
payment of a proportion of the aggregate amount of the Loan held by it which is
greater than its Percentage of the payments on account of the Loan, the one
receiving such excess payment shall purchase, without recourse or warranty, an
undivided interest and participation (which it shall be deemed to have done
simultaneously upon the receipt of such payment) in such obligations owed to the
others so that all such recoveries with respect to such obligations shall be
applied ratably in accordance with their Percentages; provided, that if all or
part of such excess payment received by the purchasing party is thereafter
recovered from it, those purchases shall be rescinded and the purchase prices
paid for such participations shall be returned to that party to the extent
necessary to adjust for such recovery, but without interest except to the extent
the purchasing party is required to pay interest in connection with such
recovery. Borrower agrees that any Lender so purchasing a participation from
another Lender pursuant to this Section may, to the fullest extent permitted by
law, exercise all its rights of payment (including the right of set-off) with
respect to such participation as fully as if such Lender were the direct
creditor of Borrower in the amount of such participation.
11.11. General Immunity. Neither Agent nor any of its directors, officers,
agents or employees shall be liable to any Lender for any action taken or
omitted to be taken by it or them hereunder or under any other Loan Document or
in connection herewith or therewith, except for its or their own gross
negligence or willful misconduct.
11.12. No Responsibility for Loans, Recitals, etc. Neither Agent nor any of
its directors, officers, agents or employees shall be responsible for or have
any duty to ascertain, inquire into,
59
or verify (i) any statement, warranty or representation made in connection with
any Loan Document or any use of the Loans; (ii) the performance or observance of
any of the covenants or agreements of any party to any Loan Document; (iii) the
satisfaction of any condition specified in this Agreement, except receipt of
items purporting to be the items required to be delivered to any Agent; or (iv)
the validity, effectiveness or genuineness of any Loan Document or any other
instrument or writing furnished in connection therewith, provided that the
foregoing shall not release Agent from liability for its gross negligence or
willful misconduct.
11.13. Action on Instructions of Lenders. The Agent shall in all cases be
fully protected in acting, or in refraining from acting, hereunder and under any
other Loan Document in accordance with written instructions signed by all the
Lenders (or the Required Lenders, if such action may be directed hereunder by
the Required Lenders), and such instructions and any action taken or failure to
act pursuant thereto shall be binding on all of Lenders. Each Lender, severally
to the extent of its Percentage, hereby agrees to indemnify Agent against and
hold it harmless from any and all liability, cost and expense that it may incur
by reason of taking or continuing to take any such action, provided that the
foregoing shall not require any Lender to indemnify Agent from liability for its
gross negligence or willful misconduct.
11.14. Employment of Agents and Counsel. The Agent may undertake any of its
duties as Agent hereunder and under any other Loan Document by or through
employees, agents, and attorneys-in-fact and shall not be liable to Lenders,
except as to money or securities received by them or their authorized agents,
for the default or misconduct of any such agents or attorneys-in-fact selected
by it with reasonable care. The Agent shall be entitled to advice of counsel
concerning all matters pertaining to the agency hereby created and its duties
hereunder and under any other Loan Document.
11.15. Reliance on Documents; Counsel. The Agent shall be entitled to rely
upon any notice, consent, certificate, affidavit, letter, telegram, statement,
paper or document believed by it to be genuine and correct and to have been
signed or sent by the proper person or persons, and, in respect to legal
matters, upon the opinion of counsel selected by the Agent, which counsel may be
an employee of Agent, provided that the foregoing shall not release the Agent
from liability for its gross negligence or willful misconduct. Any such counsel
shall be deemed to be acting on behalf of Lender in assisting the Agent with
respect to the Loans, but shall not be precluded from also representing Agent in
any matter in which the interests of Agent and the other Lenders may differ.
11.16. Agent's Reimbursement and Indemnification. Lenders agree to
reimburse and indemnify Agent ratably (i) for any amounts (excluding principal
and interest on the Loan and loan fees) not reimbursed by Borrower for which
Agent is entitled to reimbursement under the Loan Documents, (ii) for any other
expenses incurred by Agent on behalf of Lender, in connection with the
preparation, execution, delivery, administration and enforcement of the Loan
Documents, if not paid by Borrower, (iii) for any expenses incurred by Agent on
behalf of Lender which may be necessary or desirable to preserve and maintain
collateral or to perfect and maintain perfected the liens upon the collateral
granted pursuant to this Agreement and the other Loan Documents, if not paid by
Borrower, (iv) for any amounts and other expenses incurred by Agent on behalf of
Lender in connection with any default by any Lender hereunder or under the other
Loan Documents, if not paid by such Lender, and (v) for any liabilities,
obligations, losses,
60
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
of any kind and nature whatsoever which may be imposed on, incurred by or
asserted against Agent in any way relating to or arising out of the Loan
Documents or any other document delivered in connection therewith or the
transactions contemplated thereby, or the enforcement of any of the terms
thereof or of any such other documents, provided that no Lender shall be liable
for any of the foregoing to the extent they arise from the gross negligence or
willful misconduct of Agent.
11.17. Rights as a Lender. With respect to its Commitment, if any, Agent
shall have the same rights, powers and obligations hereunder and under any other
Loan Document as any Lender and may exercise such rights and powers as though it
were not an Agent, and the term "Lender" or " Lenders" shall, unless the context
otherwise indicates, include Agent in its individual capacities. The Borrower
and each Lender acknowledges and agrees that Agent and/or its Affiliates may
accept deposits from, lend money to, hold other investments in, and generally
engage in any kind of trust, debt, equity or other transaction or have other
relationships, in addition to those contemplated by this Agreement or any other
Loan Document, with Borrower or any of its Affiliates in which Borrower or such
Affiliate is not restricted hereby from engaging with any other Person.
11.18. Lender's Credit Decisions. Each Lender acknowledges that it has,
independently and without reliance upon the Agent or any other Lender and based
on the financial statements and other information prepared by Borrower and such
other documents and information as it has deemed appropriate, made its own
credit analysis and decision to enter into this Agreement and the other Loan
Documents. Each Lender also acknowledges 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 decisions in taking or not taking action under this Agreement and the
other Loan Documents.
11.19. Notice of Events of Default. Should Agent receive any written notice
of the occurrence of a default or Event of Default, or should the Agent send
Borrower a notice of Default or Event of Default, the Agent shall promptly
furnish a copy thereof to each Lender.
11.20. Successor Agent.
a. Agent may resign from the performance of all its functions and
duties hereunder at any time by giving at least thirty (30) days prior
written notice to Lenders and Borrower. Such resignation shall take effect
on the date set forth in such notice or as otherwise provided below. Such
resignation by Agent as agent shall not affect its obligations hereunder,
if any, as a Lender.
b. Upon resignation by, or removal of, the Agent, or any successor
Agent, the Required Lenders shall appoint a successor Agent with the
consent of Borrower, which shall not be unreasonably withheld, conditioned
or delayed (provided that no consent of Borrower shall be required if the
successor Agent is also a Lender or if an Event of Default then exists). If
no successor Agent shall have been so appointed by the Required Lenders,
and shall have accepted such appointment within thirty (30) days after the
retiring Agent's giving notice of resignation, then the retiring Agent may
appoint a successor Agent with the consent of Borrower, which shall not be
unreasonably withheld,
61
conditioned or delayed (provided that no consent of Borrower shall be
required if the successor Agent is also a Lender or if an Event of Default
then exists). Upon the acceptance of any appointment as an Agent hereunder
by a successor Agent, such successor Agent shall thereupon succeed to and
become vested with all the rights, powers, privileges and duties of the
Agent and the Agent, and the retiring Agent shall be discharged from its
duties and obligations hereunder and under the other Loan Documents other
than its liability, if any, for duties and obligations accrued prior to its
retirement. After any retiring Agent's resignation hereunder as an Agent,
the provisions of this Article XI shall continue in effect for its benefit
in respect of any actions taken or omitted to be taken by it while it was
acting as an Agent hereunder and under the other Loan Documents.
11.21. Additional Duties of Agent.
a. The Agent shall keep proper accounts and records reflecting the
interests of each Lender in the Loans and the Loan Documents; such accounts
and records shall be maintained in accordance with the Standard of Care (as
hereinafter defined), and shall be available for inspection by any lender
during regular business hours upon reasonable prior notice fro such Lender.
As used herein, the term "Standard of Care" shall mean the same standard of
diligence, care and judgment as Agent uses with loans comparable to the
Loans which Agent makes, holds and administers for its own account.
b. Agent shall furnish to each Lender, promptly after Agent's receipt
thereof, true and complete copies of all financial reports, statements and
accounts submitted by Borrower or by other on Borrower's behalf in
accordance with the Loan Documents or otherwise with respect to the Loans.
c. Agent shall provide each Lender with (i) true and complete copies
of all notices and other written communications which Agent shall receive
from Borrower or Guarantor with respect to the Loans promptly after Agent's
receipt of the same; and (ii) true and correct copies of any and all
notices which Agent may furnish to Borrower or Guarantor with respect to
the Loans, promptly after sending the same to Borrower or Guarantor.
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement as of the day and year first above written.
[THE REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
62
SIGNATURE PAGE OF WINDROSE MEDICAL PROPERTIES, L.P. TO
SECOND AMENDED AND RESTATED SECURED REVOLVING CREDIT AGREEMENT
"BORROWER"
WINDROSE MEDICAL PROPERTIES, L.P., a
Virginia limited partnership
By: Windrose Medical Properties Trust,
a Maryland real estate investment
trust, its general partner
By: /s/ Xxxxxxxxx X. Xxxxxx
------------------------------------
Xxxxxxxxx X. Xxxxxx, President
STATE OF INDIANA )
) SS:
COUNTY OF __________ )
Before me, a Notary Public in and for said County and State, personally
appeared Xxxxxxxxx X. Xxxxxx, known to me to be the President of Windrose
Medical Properties Trust, a Maryland real estate investment trust, the General
Partner of WINDROSE MEDICAL PROPERTIES, L.P., a Virginia limited partnership,
and acknowledged the execution of the foregoing for and on behalf of said real
estate investment trust for and on behalf of said limited partnership.
Witness my hand and Notarial Seal, this ______ day of September, 2005.
----------------------------------------
Notary Public - Signature
----------------------------------------
Notary Public - Printed
My Commission Expires: My County of Residence:
------------------------------------- ----------------------------------------
SIGNATURE PAGE OF THE HUNTINGTON NATIONAL BANK TO SECOND
AMENDED AND RESTATED SECURED REVOLVING CREDIT AGREEMENT
"LENDER"
THE HUNTINGTON NATIONAL BANK, a national
banking association, individually and as
agent for the Lenders
By: /s/ Xxxxxxx X. Xxxx
------------------------------------
Xxxxxxx X. Xxxx, Vice President
Commitment: Facility 1 $50,000,000
Facility 2 $10,000,000
Percentage Interest: 100%
STATE OF INDIANA )
) SS:
COUNTY OF __________ )
Before me, a Notary Public in and for said County and State, personally
appeared Xxxxxxx X. Xxxx, known to me to be a Vice President of THE HUNTINGTON
NATIONAL BANK, a national banking association, and acknowledged the execution of
the foregoing for and on behalf of said national banking association.
Witness my hand and Notarial Seal, this ______ day of September, 2005.
----------------------------------------
Notary Public - Signature
----------------------------------------
Notary Public - Printed
My Commission Expires: My County of Residence:
------------------------------------- ----------------------------------------
