EXHIBIT 10.23
LOAN AGREEMENT
BETWEEN
WMPT BELLAIRE POB, L.P.,
a Virginia limited partnership,
as Borrower
and
THE HUNTINGTON NATIONAL BANK
a national banking association,
as Lender
December 2, 2004
TABLE OF CONTENTS
SECTION PAGE NO.
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1. DEFINITIONS............................................................ 1
2. COMMITMENT TO LEND; COMMITMENT FEE..................................... 6
2.1 Maximum Loan Amount.............................................. 6
2.2 Loan Advances Evidenced by Note.................................. 6
2.3 Payment of Interest and Principal................................ 6
2.4 Default Rate..................................................... 6
2.5 Late Charge...................................................... 6
2.6 Commitment Fee................................................... 6
3. LOAN DOCUMENTS......................................................... 7
4. DISBURSEMENT OF THE LOAN............................................... 10
4.1 Conditions Precedent............................................. 10
4.2 Use of Loan Proceeds............................................. 11
4.3 Disbursement Requests............................................ 12
4.4 Certifications; Representations and Warranties................... 13
4.5 Costs............................................................ 13
4.6 Development Fees................................................. 14
4.7 Loan In Balance.................................................. 14
4.8 Application of Disbursements..................................... 14
4.9 Payment of Interest by Lender.................................... 15
5. REPRESENTATIONS AND WARRANTIES......................................... 15
5.1 Borrower......................................................... 16
5.2 Guarantor........................................................ 16
5.3 Title............................................................ 16
5.4 Improvements..................................................... 16
5.5 Validity and Enforceability of Documents......................... 16
5.6 Litigation....................................................... 16
5.7 Utilities; Authorities........................................... 17
5.8 Financial Statements; Solvency................................... 17
5.9 Compliance with Laws............................................. 17
5.10 Construction Contract............................................ 18
5.11 Subcontracts..................................................... 18
5.12 Plans and Specifications......................................... 18
5.13 Budget........................................................... 18
5.14 Hazardous Materials.............................................. 18
5.15 Financing Statements............................................. 19
5.16 Event of Default................................................. 19
5.17 Sale Agreements.................................................. 19
5.18 Environmental Matters............................................ 19
5.19 Continuation of Representations and Warranties................... 19
6. CASUALTIES AND CONDEMNATION............................................ 20
6.1 Lender's Election to Apply Proceeds on Indebtedness.............. 20
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6.2 Borrower's Obligation to Rebuild and Use of Proceeds Therefor.... 20
7. BORROWER'S COVENANTS................................................... 21
7.1 Manner of Construction........................................... 21
7.2 Certificate of Completion........................................ 21
7.3 Change Orders.................................................... 21
7.4 Compliance with Laws............................................. 22
7.5 Inspection....................................................... 22
7.6 Mechanics' Liens................................................. 22
7.7 Release by Lender................................................ 22
7.8 Financial Statements; Reports.................................... 23
7.9 Affirmation of Representations and Warranties.................... 23
7.10 Title............................................................ 23
7.11 Proceedings Affecting Property................................... 23
7.12 Disposal and Encumbrance of Property............................. 24
7.13 Insurance........................................................ 24
7.14 Performance of Obligations; Notice of Default.................... 24
7.15 Subcontracts..................................................... 24
7.16 Restrictions Affecting Borrower.................................. 25
7.17 Use of Receipts.................................................. 25
7.18 Additional Documents............................................. 25
8. LOAN EXPENSES.......................................................... 25
9. LENDER'S REPRESENTATIVES............................................... 25
10. EVENTS OF DEFAULT...................................................... 26
11. EXERCISE OF REMEDIES................................................... 27
11.1 Remedies......................................................... 27
12. MISCELLANEOUS.......................................................... 29
12.1 Additional Indebtedness.......................................... 29
12.2 Additional Acts.................................................. 29
12.3 Loan Agreement Governs........................................... 29
12.4 Additional Advances.............................................. 29
12.5 Amendment; Waiver; Approval...................................... 29
12.6 Notice........................................................... 30
12.7 Benefit; Assignment.............................................. 30
12.8 Governing Law.................................................... 30
12.9 Indemnity........................................................ 31
12.10 Headings......................................................... 31
12.11 No Partnership or Joint Venture.................................. 31
12.12 Time is of the Essence........................................... 31
12.13 Invalid Provisions............................................... 31
12.14 Offset........................................................... 31
12.15 Acts by Lender................................................... 32
12.16 Joint and Several Liability; Binding Provisions.................. 32
12.17 Counterparts..................................................... 32
12.18 No Third Party Borrower.......................................... 32
12.19 Sign............................................................. 32
12.20 WAIVER OF RIGHT TO JURY TRIAL.................................... 32
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13. ASSIGNMENTS AND PARTICIPATIONS......................................... 33
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LOAN AGREEMENT
This Loan Agreement ("Agreement") is dated as of December 2, 2004, by and
between WMPT BELLAIRE POB, L.P. a Virginia limited partnership ("Borrower"), and
THE HUNTINGTON NATIONAL BANK, a national banking association ("Lender").
1. DEFINITIONS.
As used in this Agreement, the following terms shall have the following
meanings:
"Applicable Rate" shall have the meaning ascribed thereto in the Note.
"Assignment of Rents and Leases" shall mean the collateral assignment of
the rents and leases of the Project, or any part thereof, to be made by Borrower
to Lender to secure the Loan.
"Borrower's Equity" shall mean the sum of $5,677,204, inclusive of
proceeds of the Subordinate Loan.
"Budget" shall mean the detailed budget of all costs to be incurred in
connection with the Work, including both hard costs and soft costs, as set forth
in EXHIBIT "A" attached hereto and made a part hereof.
"Business Day" shall mean each day excluding Saturdays, Sundays and any
other day on which Lender is closed for business to the public.
"Commitment Fee" shall mean the sum of One Hundred Twelve Thousand Five
Hundred Dollars ($112,500).
"Completion Date" shall mean January 31, 2006.
"Construction Contract" shall mean that certain agreement between Borrower
and the General Contractor dated November 30, 2004, regarding the construction
of the Improvements.
"Consultant" shall mean C.D. Construction Consulting, Inc. or such other
Person hereafter designated as such by the Lender.
"Deed of Trust" shall mean the Deed of Trust, Security Agreement and
Fixture Filing encumbering the Real Property of even date herewith made by
Borrower to Lender to secure the Loan.
"Default Rate" shall mean the Interest Rate plus four percent (4.0%) per
annum.
"Event of Default" shall have the meaning ascribed to it in Section 10 of
this Agreement.
"Force Majeure" shall mean acts of God, acts of a public enemy, terrorist
activities, fires, floods, wars, civil disturbances, sabotage, accidents,
insurrections, blockades, embargoes, storms, severe weather, explosions, damage
to improvements constructed, labor disputes (whether or not the employees'
demands are reasonable and within the party's power to satisfy), government
restrictions or regulations, acts of any Governmental Authority (whether civil
or
military, foreign or domestic), all perils of the seas and other waters, failure
or delay of third parties or Governmental Authorities from whom a party is
obtaining or must obtain licenses, permits, approvals, rights of way, easements,
franchises, machinery, materials, equipment, transportation, independent
contractor's services or supplies to grant or deliver the same, or inability to
obtain labor, services, materials, equipment or transportation or other causes
beyond the control of the party responsible for performing an obligation
hereunder.
"General Contract Assignment" shall mean the Assignment of even date
herewith by Borrower to Lender of the Construction Contract, together with all
plans, specifications, permits and licenses relating to the Project.
"General Contractor" shall mean ▇.▇. ▇▇▇▇▇▇ Construction Company, Inc.
"Guarantor" shall mean the Trust.
"Guaranty" shall mean the unconditional guaranty of payment and completion
executed by the Trust.
"Hazardous Materials" shall mean and include any and all hazardous, toxic
or dangerous substances, wastes and materials and other pollutants and
contaminants as defined or described in any or all applicable federal, state or
local statutes, laws, ordinances, codes, rules, regulations, orders or decrees
(other than medical wastes created and disposed in accordance with applicable
laws in the ordinary course of business of any tenant hereafter occupying any
part of the Improvements) now or hereafter regulating, relating to or imposing
liability or standards of conduct with respect to environmental matters,
including, 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. Section 9601 et seq.), the Hazardous
Materials Transportation Act (49 U.S.C. Section 1801 et seq.), the Solid Waste
Disposal Act, as amended by the Resource Conservation and Recovery Act of 1976,
as amended by the Solid and Hazardous Waste Amendments of 1984 (42 U.S.C.
Section 6901 et seq.), the Federal Water Pollution Control Act, as amended by
the Clean Water Act of 1977 and the Water Quality Act of 1987 (33 U.S.C. Section
1251 et seq.), the Toxic Substances Control Act of 1976 (15 U.S.C. Section 2601
et seq.), the Emergency Planning and Community Right-to-Know Act of 1986 (42
U.S.C. Section 11001 et seq.), the Clear Air Act of 1966, as amended (42 U.S.C.
Section 7401 et seq.), the National Environmental Policy Act of 1970 (42 U.S.C.
Section 43 21 et seq.), the Rivers and Harbours Act of 1899 (33 U.S.C. Section
401 et seq.), the Endangered Species Act of 1973, as amended (16 U.S.C. Section
1531 et seq.), the Safe Drinking Water Act of 1974, as amended (42 U.S.C.
Section 300(f)-9 seq.), the Occupational Safety and Health Act of 1970, as
amended (29 U.S.C. Section 651 et seq.) and all rules, regulations and guidance
documents promulgated or published thereunder, all as amended or hereinafter
amended. Without intending to limit the scope or breadth of the foregoing
definition, the term Hazardous Materials shall include asbestos, urea
formaldehyde, polychlorinated biphenyls, crude oil, radioactive materials and
underground storage tanks.
"Improvements" shall mean the medical office facility containing
approximately 102,781 gross square feet of floor space and a parking deck with
418 parking spaces to be constructed upon the Land, all paving, lighting,
landscaping, amenities, utility lines and equipment and all
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other site improvements and all other improvements located on the Land in
substantial accordance with the Plans and Specifications.
"Indemnity Agreement" shall mean the environmental indemnity agreement of
even date herewith made by Borrower and Guarantor in favor of Lender.
"Intercreditor Agreement" shall mean, collectively, that certain
Intercreditor Agreement and that certain Standstill Agreement, both between
Lender and Subordinate Lender of even date herewith relating to the Loan and the
Subordinate Loan.
"Interest Rate" shall have the meaning set forth in the Note.
"Initial Advance" shall mean the first draw or disbursement made from the
proceeds of the Loan.
"Land" shall mean the tract of land consisting of approximately 2.331
acres of real estate, located in ▇▇▇▇▇▇ County, Texas and legally described in
EXHIBIT "B" attached hereto in which Borrower has a fee simple interest.
"Loan Advance" shall mean a disbursement of all or any portion of the
Loan.
"Loan" shall mean the Eighteen Million Dollar ($18,000,000) construction
loan to be made by Lender to Borrower pursuant to the terms hereof.
"Loan Documents" shall mean this Agreement, the Deed of Trust, the Note,
the Assignment of Rents and Leases, the Contract Assignment, the Guaranty, the
Indemnity Agreement, and every other document now or hereafter evidencing,
securing or otherwise executed in conjunction with the Loan, together with all
amendments and modifications thereof.
"Loan Expenses" shall mean the expenses, charges, costs (including both
hard costs and soft costs) and fees of Lender relating to the making,
administration, negotiation, documentation or any other aspect of the Loan or
relating to the performance of the Work, including, without limitation, Lender's
reasonable attorneys' fees and costs in connection with the negotiation,
documentation and enforcement of the Loan, the fees of the Consultant, all
recording fees and charges, title insurance charges and premiums, escrow fees,
costs of surveys and of other bonds required by the Title Company in connection
with clearing title to the Real Property or the issuance of title reports,
binders, policies and the like, and all other costs, expenses, charges and fees
referred to in or necessitated by the terms of this Agreement or any of the
other Loan Documents.
"Maturity Date" shall mean December 1, 2006.
"Maximum Amount" shall mean $18,000,000 being the maximum aggregate amount
of the Loan, as such amount may be reduced in accordance with the terms of this
Agreement.
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"Note" shall mean that certain promissory note of even date herewith
evidencing the Loan, executed by Borrower payable to the order of Lender in the
original principal amount of $18,000,000.
"Permitted Exceptions" shall mean the exceptions to the title of the Real
Property listed on EXHIBIT "C" attached hereto and the Subordinated Loan
Documents.
"Person" shall mean any individual, firm, corporation, business
enterprise, trust, association, joint venture, partnership, governmental body or
other entity, whether acting in an individual, fiduciary or other capacity.
"Personal Property" shall mean and include any and all furniture,
furnishings, appliances, equipment and all fixtures (to the extent such fixtures
are attached in a manner so as not to be deemed to be part of the Real Property)
owned by Borrower to be located in the Improvements or otherwise at the Land
which will be used or usable in connection with the operation of the
Improvements and which will be owned, leased or otherwise possessed by Borrower
or any of its affiliates, including all of such personal property contemplated
under the Plans and Specifications.
"Plans and Specifications" shall mean, collectively, the architectural and
engineering plans and specifications relating to the Work or any portion
thereof, all of which must be acceptable to Lender in its reasonable discretion,
as listed on EXHIBIT "D" attached hereto as the same are supplemented from time
to time.
"Principal Balance" shall mean the unpaid principal balance of the Loan
outstanding from time to time.
"Project" shall mean the medical office facility consisting of the Land
and the Improvements, together with the Personal Property.
"Project Costs" shall mean the following, all as more specifically set
forth in the Budget:
(a) The actual hard costs of completing construction of the
Improvements and the costs of the Personal Property;
(b) Premiums for title, casualty, liability and other insurance
required by Lender;
(c) The cost of recording and filing the applicable Loan Documents;
(d) Interest, fees and similar charges payable by Borrower to Lender
hereunder or under the Note;
(e) Legal and other closing costs;
(f) Government fees for permits or other matters, Architectural,
engineering, survey, geotechnical, environmental and other consulting fees
and testing fees;
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(g) Pre-construction developments costs as set forth in the Budget;
(h) The direct costs of HADC personnel assigned to the Project and
on site costs of its project manager and reimbursable expenses related
thereto;
(i) Such other soft costs (including contingency) as may be set
forth in the Budget or as may be hereafter approved in writing by Lender;
and
(j) All other Loan Expenses.
"Real Property" shall mean the Land, the Improvements and all easements
and appurtenants thereto.
"Soil Report" shall mean the soil test report as described in Section 3(v)
below.
"Subcontracts" shall mean all subcontracts now or hereafter entered into
by the Contractor for the construction of any of the Improvements or the
installation of any of the Personal Property.
"Subordinate Lender" shall mean The Huntington Real Estate Investment
Company, an Ohio corporation.
"Subordinate Loan" shall mean the One Million Five Hundred Thousand Dollar
($1,500,000) loan to Borrower by the Subordinate Lender.
"Subordinated Loan Documents" shall mean, collectively, all loan documents
and agreements by and between Borrower and Subordinate Lender evidencing the
Subordinate Loan including the Intercreditor Agreement
"Survey" shall mean the plat of survey of the Real Property as described
in Section 3(h) below.
"Tenant Improvement Contract Assignment" shall mean the Assignment of even
date herewith by Borrower to Lender of the Construction Contract, together with
all plans, specifications, permits and licenses relating to the Project.
"Tenant Improvement Contractor" shall mean ▇.▇. ▇▇▇▇▇▇, Inc.
"Title Company" shall mean Fidelity National Title Insurance Company.
"Title Policy" shall mean the title insurance policy described in Section
3(j) below.
"Trust" shall mean Windrose Medical Properties Trust, a Maryland real
estate investment trust.
"Work" shall mean the performance of all work to be performed and the
supplying of all materials to be supplied in connection with the building,
furnishing, fixturing and equipping of
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the Improvements, all in accordance with the provisions of this Agreement and
with the Plans and Specifications, the Budget and other documentation approved
by Lender.
2. COMMITMENT TO LEND; COMMITMENT FEE.
2.1 Maximum Loan Amount.
Lender agrees to lend to Borrower, and Borrower agrees to borrow from Lender,
an amount not to exceed the Maximum Amount for the purposes, upon the terms and
subject to the conditions contained in this Agreement. Notwithstanding anything
contained in this Article 2 to the contrary, Loan Advances shall be limited to
such amounts as Borrower is eligible to receive pursuant to, and upon compliance
with, the conditions of Article 4 hereof. The proceeds of the Loan disbursed to
Borrower shall be used by Borrower solely for the purpose of paying the Project
Costs. Borrower may prepay the Loan in accordance with the terms of the Note.
2.2 Loan Advances Evidenced by Note.
All Loan Advances of the Loan hereunder shall be evidenced by the Note, which
shall be executed and delivered by Borrower simultaneously with the execution of
this Agreement.
2.3 Payment of Interest and Principal.
The payment of interest and principal shall be governed by the provisions of
the Note; provided, however, that Borrower hereby unconditionally and
irrevocably authorizes and directs Lender, to disburse from the Interest Reserve
established pursuant to Section 4.9 below, the amount of the monthly interest
payments then owing to Lender under the Note and to apply said amounts to said
interest payments. Any amounts disbursed from the Interest Reserve shall become
part of the outstanding principal balance and interest thereon shall accrue and
be payable as provided in the Note. Principal and interest on the Loan shall be
due and payable in accordance with the terms of the Note.
2.4 Default Rate.
At any time after the Maturity Date or otherwise when an Event of Default
exists under this Agreement or any of the other Loan Documents, the Principal
Balance and any other amounts then owing by Borrower to Lender shall bear
interest at the Default Rate.
2.5 Late Charge.
If any payment of interest or principal due under a Note is not made within
five days after such payment is due, then, in addition to the payment of the
amount so due, Borrower shall pay to Lender a "late charge" of three cents
(3(cent)) for each whole dollar so overdue to defray part of the cost of
collecting and handling such late payment.
2.6 Commitment Fee.
Concurrently herewith, Borrower shall pay the Commitment Fee to Lender.
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3. LOAN DOCUMENTS.
Prior to the first Loan Advance pursuant to this Agreement, Borrower shall
execute and deliver to Lender those of the following documents required to be
executed by Borrower, and shall cause to be executed and delivered to Lender
those of the following documents required to be executed by others, all of which
documents shall contain such provisions as shall be required to conform to this
Agreement and otherwise shall be satisfactory in form and substance to Lender:
(a) The Note.
(b) The Guaranty.
(c) The Deed of Trust together with the UCC financing statements
perfecting the security interests created by the security agreement
granted thereunder.
(d) The Assignment of Rents and Leases.
(e) The Indemnity Agreement.
(f) The Contract Assignment, together with the consents thereto by
the Contractors.
(g) Three copies of a plat of survey (the "Survey") prepared and
certified by a registered surveyor licensed in Texas in compliance with
the minimum detail requirements most recently established by ALTA/ACSM
(for a Class A Survey), including, without limitation: the boundaries and
legal descriptions of the Land; the location of all existing improvements
on the Land; the area of the Land in square feet and acres (to the nearest
one one-hundredth of an acre); the location of all set-back lines,
rights-of-way, easements and public utilities; the location of all
abutting roadways, streets, and alleys; the location of utility services
and storm drain and sewer facilities; and showing any encroachments by
improvements on the Land over easements or adjoining property and showing
any encroachments from adjoining property onto the Land. The Survey shall
be as of a current date and shall be certified in favor of Lender and the
Title Company. All matters shown on the Survey must be reasonably
acceptable to Lender.
(h) Evidence that the following insurance coverages are in effect
with respect to the Project and in a form satisfactory to Lender:
(i) All-Risk Builder's Risk Insurance issued with respect to
the Project in an amount equal to not less than the full aggregate
amount of the Construction Contract, together with extended
coverage, vandalism and malicious mischief coverage, and such other
coverage as may be required by Lender;
(ii) Comprehensive general public liability insurance in such
an amount as may be required by Lender;
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(iii) Workers' compensation insurance and employer's liability
insurance for all contractors and subcontractors in such amounts as
may be required by Lender;
(iv) Flood Insurance if the Land is located in an area
designated as a special flood hazard area by any governmental
authority having jurisdiction over the Land; and
(v) Such other insurance coverages as Lender may reasonably
require.
All policies of insurance required to be maintained by Borrower shall be issued
by companies satisfactory to Lender and shall have coverages and endorsements
and be written for such amounts as Lender may reasonably require. All policies
of insurance shall (x) name Lender as mortgagee or additional named insured, as
the case may require, and (y) provide that the policies may not be canceled or
modified without thirty days prior written notice to Lender.
(i) An ALTA Loan Policy of Title Insurance issued by the Title
Company in the full amount of the Loan insuring that the Deed of Trust
will be a prior lien upon the fee simple title to the Real Property to the
extent of advances made by Lender from time to time under this Agreement,
subject to no liens, claims, exceptions or encumbrances except the
Permitted Exceptions and mechanic lien claims insured over by the Title
Company in a manner satisfactory to Lender and containing the following
endorsements:
(i) Endorsements for Interim Certification;
(ii) Comprehensive Endorsement No. 1 (in form modified for
construction loans);
(iii) Vehicular Access Endorsement;
(iv) Survey/Legal Description Endorsement;
(v) Environmental Lien Endorsement;
(vi) Contiguity Endorsement; and
(vii) Such additional endorsements as may be reasonably
required by Lender based upon its review of the Title Policy and
Survey.
(j) Copies of such documents, if any, as Borrower has provided the
Title Company in connection with the issuance of the Title Policy.
(k) Copies of all recorded documents described in the Title Policy.
(l) Uniform Commercial Code searches covering the Guarantor and
federal and state tax lien and judgment searches covering the Guarantor.
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(m) Certificate of the general partner of Borrower with (i)
Certificate of Limited Partnership, (ii) Limited Partnership Agreement,
(iii) Incumbency Certificate, (iv) Certificate of Existence issued by the
Secretary of State of Virginia, (v) a Certificate of Qualification issued
by the Texas Secretary of State and (vi) Resolutions authorizing this
transaction.
(n) Certificate of an officer of Guarantor with Resolutions
authorizing the Guaranty.
(o) An executed copy of the Construction Contract.
(p) Copies of all applicable zoning ordinances and all zoning
proceedings relating to the Project.
(q) One or more certificates executed by the Contractor certifying
the following:
(i) the Plans and Specifications prepared by the Architect and
the Engineer, as applicable, are significantly complete and to
provide a Guaranteed Maximum Price ("GMP") and build the Project and
to conform to all applicable laws;
(ii) if the Project is constructed in accordance with such
Plans and Specifications (as completed), upon completion the Project
will comply with all applicable zoning, subdivision, land use,
building, landmark, occupational health and safety, environmental
and pollution control laws, statutes, codes, ordinances and
regulations; and
(iii) all permits necessary to start the construction of the
Project have been issued or can be obtained or sufficient evidence
thereof can be obtained.
(r) One set of the Plans and Specifications, which have been
approved by Borrower and the Contractor. The Plans and Specifications are
subject to approval by Lender, which will not be unreasonably withheld.
(s) Certified copies of the Construction Contracts, all licenses,
permits and governmental approvals necessary to start the construction,
use or operation of the Project and all other documents and instruments
relating to performance of the Work.
(t) Opinion letter from counsel for Borrower and the Guarantor in a
form satisfactory to Lender.
(u) A soil test report prepared by a licensed soil engineer approved
by Lender and otherwise satisfactory in all respects to Lender containing,
among other things, boring logs and the locations of all borings and
confirming that no condition exists with respect to the Land which would
cause subsidence of any portion of the Land and showing that no state of
facts exists which would adversely affect the completion of the
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Work in accordance with the Plans and Specifications or would require any
costs with respect thereto not otherwise provided for in the Budget.
(v) Evidence that (i) no portion of the Project on which
Improvements are to be built under the Plans and Specifications is located
in an area designated by the Secretary of Housing and Urban Development as
having special flood hazards, or if any portion of the Project is so
located, evidence that flood insurance is in effect; and (ii) no portion
of the Land is located in a federally, state or locally designated wetland
or other type of government protected area.
(w) Certified copies of all service contracts, management
agreements, development agreements and other agreements affecting the use,
development or operation of the Project, if any.
(x) A satisfactory report prepared by an environmental engineer
approved by Lender and otherwise satisfactory in all respects to Lender.
(y) An appraisal prepared by an appraiser satisfactory to Lender and
indicating that the fair market value of the Project, as stabilized, is
not less than $24,000,000, which has been received and approved by Lender.
(z) Satisfactory leases for not less than 80,991 gross square feet
of floor space in the Project.
(aa) The Intercreditor Agreement.
(bb) Such other assignments, certificates, opinions and other
documents, instruments and information affecting or relating to Lender's
interest in the Project or the use, operation, development or construction
of the Project as Lender may reasonably require.
4. DISBURSEMENT OF THE LOAN.
4.1 Conditions Precedent.
The obligation of Lender to make the initial and each subsequent disbursement
of the Loan under this Agreement shall be conditioned upon and subject to the
payment to Lender of all loan fees then owing from Borrower to Lender and to
satisfaction of all of the following conditions:
(a) All representations and warranties contained in this Agreement
and in the other Loan Documents shall be true in all material respects on
and as of the date of such disbursement.
(b) Borrower shall have performed all of its obligations under all
Loan Documents which are required to be performed on or prior to the date
of such disbursement.
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(c) The Loan shall not be "out of balance" as determined under
Section 4.7 below, and the disbursement shall not cause the Loan to be
"out of balance."
(d) Lender shall have received an inspection report of the
Consultant certifying the percentages of completion of the components of
the Work and setting forth the amount authorized for disbursement and such
other matters as Lender may reasonably require (including compliance of
the Work with the Plans and Specifications). Notwithstanding anything
contained in this Agreement to the contrary, all inspections of the Work
made by Lender, the Consultant or their respective agents, employees and
designees shall be solely for Lender's own information and shall not be
deemed to have been made for or on account of Borrower or any other party.
Borrower hereby relieves Lender of any and all liability or responsibility
relating in any way whatsoever to the construction of the Project,
including but not limited to, the work thereat, the material or labor
supplied in connection therewith, and any errors, inconsistencies or other
defects in the Project or the Plans and Specifications.
(e) There shall be no material adverse change in the financial
condition of any of Borrower, Guarantor or the Project from that reflected
in the financial statements of Borrower, Guarantor and the Project
furnished to Lender in connection with the Lease.
(f) Borrower shall have delivered to Lender certificates from the
Contractor stating that the portion of the Project that has been completed
was constructed in substantial accordance with the Plans and
Specifications prepared by the Architect and Engineer, as applicable, and
complies with all applicable zoning, subdivision, land use, building,
landmark, occupational health and safety, environmental and pollution
control laws, statutes, codes, ordinances or regulations, and does not
require any variances therefrom, or is in compliance therewith, as the
case may be. In addition, Borrower shall have delivered to Lender copies
of all licenses and building permits necessary for commencement and
completion of the Work for which such disbursement is being requested, all
of which shall be unconditional.
(g) If any portion of the requested disbursement is for the payment
of fees owing by Borrower to any broker, then Borrower shall have
delivered to Lender a waiver of lien rights executed by such broker and
otherwise in a form satisfactory to Lender.
(h) No Event of Default shall have occurred and no event or
condition, which with the giving of notice or the passage of time, or
both, would constitute an Event of Default shall then exist.
(i) Borrower shall have provided satisfactory evidence to Lender of
its investment in the Project, including the Subordinate Loan, of not less
than the Borrower's Equity.
4.2 Use of Loan Proceeds.
The proceeds of the Loan disbursed to Borrower shall be used by Borrower
solely for the purpose of paying (or reimbursement to others for payment of)
items of Project Costs actually
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incurred by Borrower. No disbursement of the Loan will be made until such time
as the Borrower's Equity is fully disbursed.
4.3 Disbursement Requests.
(a) During each month, Borrower shall, subject to the conditions set
forth herein and in the Loan Documents, request disbursements of the Loan
to pay the actual costs incurred in connection with the construction and
development of the Project. All disbursements shall be made by Lender
within ten days of receiving a draw request and all other documentation or
information required hereunder, from Borrower.
(b) Lender shall not be required to make more than one Loan
disbursement in any given 30 day period. Lender may at any time take such
action as it deems appropriate to verify that the conditions precedent to
each disbursement have been satisfied, including, without limitation,
verification of any amounts due under the Construction Contract or any
Subcontract. Borrower agrees to cooperate with Lender in any such action.
If in the course of any such verification, any amount shown on the
contract entered into for the performance of any portion of the Work
(including the Construction Contract or any Subcontract), or any
application for payment, sworn statement or waiver of lien is subject to a
possible discrepancy, such discrepancy shall be eliminated by Borrower to
Lender's reasonable satisfaction. Each request for disbursement shall be
made by a letter from an authorized agent of Borrower addressed to Lender,
specifying in detail the amount and mode of each disbursement and
accompanied by the following, all in form and substance satisfactory to
Lender:
(i) An Owner's Sworn Statement and disbursement request,
including an allocation among line items in the Budget, of all hard
costs of construction so requested;
(ii) A Contractor's Application for Payment and Sworn
Contractor's Statement, together with (A) a statement of a duly
authorized agent of the Contractor that all items of construction
cost have been incorporated into the Project in accordance with the
Plans and Specifications, and (B) waivers of lien from each
contractor, subcontractor to whom payment is to be made, with
respect to previous disbursements;
(iii) Evidence (including invoices and contracts) showing the
propriety of each non-construction cost item for which payment is
requested and such supporting data as Lender may reasonably require
to enable Lender to verify the correctness thereof;
(iv) Certificates of the Contractor and the Consultant stating
that each of them has made diligent investigation and that based on
such investigation all Work performed to the date of the request for
disbursement has been completed in substantial accordance with the
Plans and Specifications and certifying (A) the percentage of
completion of each component of the Work, (B) that there has been no
material deviation from the contract amount under the Construction
Contract
12
or any Subcontract or the projected time of completion of any
component of the Work, (C) the total cost to complete the Work, (D)
and that after giving effect to all amounts previously certified for
payment, plus the amount then requested, the remaining uncertified
and undisbursed funds will be sufficient to pay all known costs
required to complete the Work in accordance with the Plans and
Specifications;
(v) Copies of all licenses and permits (including building
permits) necessary for construction and completion of the Work with
respect thereto; and
(vi) Such other documents, assignments, certificates and
opinions as are required by the Title Company, or as may be
reasonably required by Lender.
(c) Notwithstanding anything contained in this Agreement to the
contrary, Lender shall not be required to make any disbursement of the
Loan pursuant to this Agreement until the Title Company is prepared to
issue an endorsement to the Title Policy updating the same to the date of
such disbursement and increasing the amount of coverage (including
mechanic's lien coverage) thereunder by the amount so disbursed, and
insuring the lien of the Deed of Trust to be superior to all defects in
title other than the Permitted Exceptions.
4.4 Certifications; Representations and Warranties.
Each request for disbursement by Borrower shall constitute (a) Borrower's
certification that the representations and warranties contained in Article 5
below are true and correct in all material respects as of the date of such
request, (b) Borrower's certification that Borrower is in compliance with the
conditions contained in this Article 4, and (c) Borrower's representation and
warranty to Lender, with respect to the Work, materials and other items for
which payment is requested that (i) such Work and materials have been
incorporated into the Project, free and clear of liens and encumbrances, (ii)
the value thereof is as estimated therein, (iii) such Work and materials
substantially conform to the Plans and Specifications, this Agreement and all
applicable statutes, laws, ordinances, rules and regulations, and (iv) the
requisitioned value of such Work and materials and the amounts of all other
items of cost for which payment is requested by Borrower have theretofore been
in fact paid for in cash by Borrower or the same are then due and owing by
Borrower and (unless Lender disburses funds directly to the parties performing
the Work or to the Title Company) will in fact be paid in cash by Borrower
within five days after Borrower's receipt of the requested disbursement. Neither
review nor approval by Lender of requests for disbursement or any information
contained therein or any other information provided to Lender in accordance with
the other provisions of this Article 4 shall constitute the acceptance or
approval by Lender of any portion of the Work or any such information except for
the purpose of making the requested disbursement.
4.5 Costs.
For purposes of this Agreement, including without limitation, Section 4.3
hereof, (a) the cost of labor and material furnished for the Work shall be
deemed to be incurred by Borrower when the labor and material have been
incorporated into the Project and the payment therefor is due and
13
payable, (b) the cost of services (other than labor included in the Work) shall
be deemed to be incurred by Borrower when the services are actually rendered and
the payment therefor is due and payable, (c) real estate taxes, interest and
insurance premiums shall be deemed to be incurred by Borrower when such items
become due and payable, and (d) any other costs shall be deemed to be incurred
by Borrower when the payment therefor is due and payable, but not before the
value to be received in return for such cost has been received by Borrower.
4.6 Development Fees.
No proceeds of the Loan will be disbursed for development fees but project
management direct costs and reimbursable expenses will be paid to HADC as set
forth in the Budget.
4.7 Loan In Balance.
(a) At all times prior to the Maturity Date, (i) the undisbursed
proceeds from the Loan together with the undisbursed amount of the
Borrower's Equity and the Subordinate Loan, shall be sufficient to pay all
Project Costs remaining unpaid through the projected date on which the
Improvements will be substantially completed.
(b) If Lender reasonably determines that the undisbursed proceeds
from the Loan together with the undisbursed amount of the Borrower's
Equity and the Subordinate Loan, are insufficient to pay all Project Costs
remaining unpaid through the projected date on which the Improvements will
be substantially completed, then the Loan shall be deemed "out of balance"
to the extent of such excess.
(c) If Lender reasonably deems the Loan to be out of balance as
aforesaid, Borrower shall, within ten days after written request by
Lender, deposit with Lender an amount equal to the excess amount. The sums
thus deposited with Lender will be disbursed by Lender to complete the
Work prior to any further disbursement of proceeds of the Loan (or, if the
Work has been completed, to the repayment of the Principal Balance). If
such deposit is not made within such time, an Event of Default shall be
deemed to have occurred. No interest shall be payable to Lender on such
amounts when disbursed to pay the cost of any Work.
(d) Borrower shall be entitled to reallocate among line items in the
Budget without obtaining Lender's prior written consent, so long as such
reallocation does not result in an increase in the Project Budget. The
amount allocated to the contingency and the interest reserves line shall,
at all times, be an amount reasonably acceptable to the Lender.
4.8 Application of Disbursements.
(a) Lender shall make each requested disbursement of the Loan to an
account maintained by Borrower with Lender within ten days after all of
the conditions precedent to such disbursement set forth in Section 4.1
above have been satisfied and all documentation required under Section 4.3
above has been delivered to Lender.
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(b) Notwithstanding the foregoing, Lender shall not be responsible,
liable or obligated to the contractors, sub-contractors, suppliers,
materialmen, laborers, architects, engineers, or any other parties, for
services or work performed, or for goods delivered by them or any of them,
in and upon the Land or employed directly or indirectly in the performance
of the Work, or for any debts or claims whatsoever accruing in favor of
any such parties and against Borrower or others, or against the Project.
It is expressly understood and agreed that Borrower is not and shall not
be an agent of Lender for any purpose whatsoever. Without limiting the
generality of the foregoing, advances made at Lender's option, directly to
any contractor, subcontractor or supplier of labor or materials, or any
other party, shall not be deemed a recognition by Lender of any third
party beneficiary status of any such person or entity.
(c) Borrower covenants and agrees that it shall receive all Loan
Advances to be made hereunder by Lender as a trust fund and that Borrower
shall withdraw and use said funds solely for the payment of the bills for
the labor and materials used in the performance of the Work for which such
Loan funds were requested by Borrower, and for the payment of the other
items of Project Cost for which such Loan proceeds were requested by
Borrower, and for no other purpose whatsoever; however, nothing herein
shall impose upon Lender any obligation whatsoever to see to the proper
application of any such monies by Borrower.
(d) Whenever so requested by Lender, Borrower shall promptly furnish
Lender written evidence reasonably satisfactory to Lender that all monies
theretofore advanced by Lender pursuant to this Agreement have actually
been paid or applied in payment of the cost of performance of the Work and
in payment of the other items of Project Cost for which such funds were
advanced by Lender, and until such evidence is produced, at the option of
Lender, no future or additional payments or Loan Advances need be made
hereunder.
4.9 Payment of Interest by Lender.
Proceeds of the Loan shall be allocated to an interest reserve (the "Interest
Reserve") as set forth in the Budget approved by Lender. All accrued interest on
the Loan shall be paid from the Interest Reserve until fully disbursed and
thereafter from rental income received by Borrower. Borrower hereby authorizes
Lender on the first day of each month during the term of the Loan (and on any
other date on which interest is due under the Note) to disburse to itself from
the undisbursed proceeds of the Interest Reserve to pay all then accrued and
unpaid interest on the Loan; provided, however, that such authorization shall
not be deemed to limit, reduce or otherwise affect Borrower's obligation to pay
interest if (a) there are no remaining amounts in the Interest Reserve, or (b)
Lender is entitled to withhold disbursement of the Interest Reserve for any
reason.
5. REPRESENTATIONS AND WARRANTIES.
In order to induce Lender to execute this Agreement and to make the Loan,
Borrower represents and warrants to Lender as follows:
15
5.1 Borrower.
Borrower is a duly formed limited liability partnership validly existing in
the State of Virginia, duly qualified to conduct business in the State of Texas,
and has full power and authority to execute and deliver the Loan Documents and
to perform its obligations hereunder and thereunder. The Limited Partnership
Agreement of Borrower dated as of August 26, 2003, a copy of which has been
furnished to Lender, is in effect, unamended and are the true, correct and
complete documents relating to Borrower's governance. The Certificate of Limited
Partnership dated as of November 6, 2003 creating Borrower, a copy of which has
been furnished to Lender, is in effect, unamended and is the true, correct and
complete document relating to Borrower's creation and governance. Borrower has
fully complied with all applicable securities and other laws and regulations in
connection with the formation of Borrower and the sale and offer for sale of
interests therein.
5.2 Guarantor.
Guarantor has full power and authority to execute the Guaranty, the Indemnity
Agreement and all other Loan Documents executed by it and to perform its
obligations thereunder.
5.3 Title.
At closing Borrower will own good and marketable fee simple title to the Real
Property. The Real Property is owned free and clear of all liens, claims and
encumbrances, except the Permitted Exceptions.
5.4 Improvements.
Subject to the terms and conditions contained in this Agreement, Borrower
intends to improve the Land with the Improvements. The Work will be performed in
substantial accordance with the provisions of the Plans and Specifications and
the Budget and all of the other requirements of this Agreement.
5.5 Validity and Enforceability of Documents.
Upon the execution and delivery of the Loan Documents, the Loan Documents
shall be valid and binding upon the Borrower and Guarantor in accordance with
the respective provisions thereof, and enforceable in accordance with the
respective provisions thereof, subject only to applicable bankruptcy,
reorganization, insolvency, moratorium and other similar laws affecting the
enforcement of creditor's rights. Execution, delivery and performance of the
Loan Documents do not and will not contravene, conflict with, violate or
constitute a default under the Certificate of Limited Partnership creating
Borrower, the Limited Partnership Agreement of Borrower, or any applicable law,
rule, regulation, judgment, decree or order or any agreement, indenture or
instrument to which Borrower or Guarantor is a party or is bound or which is
binding upon or applicable to the Project or any portion thereof.
5.6 Litigation.
16
There is not any condition, event or circumstance existing, or any
litigation, arbitration, governmental or administrative proceeding, action,
examination, claims or demand pending or, to the best of Borrower's knowledge
after due inquiry, threatened affecting Borrower, Guarantor or the Project, or
involving the validity or enforceability of the Loan Documents or involving any
risk of a judgment or liability which, if satisfied, would have a material
adverse effect on the financial condition, business or properties of Borrower,
Guarantor or the priority of the lien of the Deed of Trust, or which would
prevent Borrower or Guarantor from complying with or performing its obligations
under this Agreement, the Note, the Guaranty or any of the other Loan Documents
within the time limits set forth therein for such compliance or performance and
no basis for any such matter exists.
5.7 Utilities; Authorities.
All utilities necessary for use, operation and occupancy of the Project
(including, without limitation, water, storm sewer, sanitary sewer and drainage,
electric, gas and telephone facilities) are or will, as a result of the
development of the Project, be available at the boundaries of the Land (or in
the streets adjoining the Land), and all requirements for the use of such
utilities have been fulfilled. All building, zoning, safety, health, fire, water
district, sewerage and environmental protection agency permits and other
licenses and permits which are required by any governmental authority for
construction of the Improvements, and the use, occupancy and operation of the
Project as a medical office facility in accordance with the Plans and
Specifications have been obtained by or furnished to Borrower and are in full
force and effect or will be obtained by and maintained in full force and effect
by Borrower when and as required by any governmental authority.
5.8 Financial Statements; Solvency.
All financial statements submitted to Lender relating to Borrower and the
Guarantor are true, complete and correct, and have been prepared in accordance
with sound accounting principles consistently applied and fairly present the
financial condition of the Person to which they pertain and the other
information therein described and do not contain any untrue statement of a
material fact or omit to state a fact material to the financial statement
submitted or this Agreement. No material adverse change has occurred in the
financial condition of Borrower, or Guarantor since the dates of each such
financial statements. Borrower and Guarantor are able to pay their respective
debts as such debts become due, and they have capital sufficient to carry on
their respective present businesses and transactions and all businesses and
transactions in which they are about to engage and neither Borrower nor
Guarantor (i) are bankrupt or insolvent, (ii) have made an assignment for the
benefit of its or his creditors, (iii) have had a trustee or receiver appointed,
(iv) have had any bankruptcy, reorganization or insolvency proceedings
instituted by or against it or him, or (v) shall be rendered insolvent by its or
his execution, delivery or performance of this Agreement, the Loan Documents or
by the transactions contemplated hereunder and thereunder.
5.9 Compliance with Laws.
Upon completion of the Work in substantial accordance with the Plans and
Specifications, the
17
Project and the use, occupancy and operation (subject to the acquisition of
appropriate healthcare governmental authorities approvals and certifications by
the owner of the hospital operations) thereof for their intended purposes will
not, violate any laws, statutes, ordinances, rules, orders or regulations of any
kind whatsoever (including without limitation, those relating to environmental
protection, water use, zoning, building, fire, health or safety), any
contractual arrangements with third parties or any covenants, conditions,
easements, rights of way or restrictions of record. Neither Borrower nor any
agent thereof has received any notice, written or otherwise, alleging any such
violation, which violation has not previously been cured. Upon completion of the
Work in accordance with the Plans and Specifications, the Project will be in
full compliance and conformity with all zoning requirements, including without
limitation, those relating to setbacks, height, parking, floor area ratio, fire
lanes and percentage of land coverage. No right to any off-site facilities will
be necessary to insure compliance by the Project with all environmental
protection, public highway, water use, zoning, building, fire, health, safety or
similar statutes, laws, ordinances, codes, rules, regulations, orders and
decrees.
5.10 Construction Contract.
Pursuant to the Construction Contract, the Contractor has agreed to construct
the Improvements. The Construction Contract is in full force and effect,
unamended, and no default exists thereunder by either party thereto. In the
event of any conflict between the terms of the Construction Contract, other
Subcontracts and this Agreement or any other Loan Document, Borrower shall abide
by and shall cause the applicable Contractor to act in accordance with the
provisions of the Loan Documents.
5.11 Subcontracts.
Pursuant to the requirements of Paragraph 7.15 below, Borrower will promptly
deliver to Lender true, complete and correct copies of all Subcontracts that are
entered into after the date hereof.
5.12 Plans and Specifications.
Borrower has delivered to Lender true, complete and correct copies of all of
the Plans and Specifications listed in EXHIBIT "D" attached hereto and the plans
and specifications listed in EXHIBIT "D" are the Plans and Specifications which
have been approved by Lender.
5.13 Budget.
The Budget is a true, complete and correct budget with respect to Project
Costs. The total of all Project Costs as specified in the Budget will not exceed
$23,677,204.
5.14 Hazardous Materials.
Except as set forth in the Reports (as defined in the Deed of Trust) and
otherwise disclosed to Lender, neither Borrower nor Guarantor has any knowledge
of any Hazardous Materials that have been generated, released, stored or
deposited over, beneath or on the Land or in any structure located on the Land.
No Hazardous Materials will be used in the construction of all or
18
any portion of the Project, nor, to the best of Borrower's knowledge after due
inquiry, has any part of the Land been used for or as a land fill, the result of
which could impose any liability against Borrower, Lender or the Project under
any applicable law or regulation, including, without limitation the laws and
regulations mentioned in the definition of "Hazardous Materials" set forth
above. Borrower covenants that it shall indemnify, hold harmless and defend
Lender from any and all claims, losses, damages, response costs and expenses
(collectively, "Claims") arising out of or in any way relating to the past,
present or future presence, removal or disposal of any Hazardous Materials over,
beneath, in or on the Project regardless of whether such presence, removal or
disposal constitutes a breach of the representations, warranties, covenants and
agreements set forth in this paragraph, including, but not limited to: (a)
claims of third parties (including governmental agencies) for damages,
penalties, response costs, injunctive or other relief; (b) costs of removal and
restoration, including fees of attorneys and experts and costs of reporting the
existence of any Hazardous Materials to any governmental agency; and (c) any and
all expenses or obligations incurred at, before and after any trial or appeal
therefrom, including without limitation, attorneys' fees, witness fees,
deposition costs, photocopying charges and other expenses, all of which shall be
paid by Borrower when incurred. The provisions of the foregoing representations,
warranties and covenants shall not limit the provisions of the Indemnity
Agreement and the rights, remedies and protections herein and therein shall be
cumulative.
5.15 Financing Statements.
There are no UCC financing statements in effect other than those to be filed
and/or recorded by Lender which name Borrower as debtor and pertaining to any
rights in any of the Personal Property.
5.16 Event of Default.
No Event of Default has occurred, and no event or condition exists, that with
the giving of notice, the passage of time or both could constitute an Event of
Default.
5.17 Sale Agreements.
There are no sale contracts affecting all or any portion of the Project as of
the date hereof.
5.18 Environmental Matters.
There are no facilities on the Real Estate that are subject to reporting
under ss.312 of the federal Emergency Planning and Community Right-To-Know Act
of 1986, 43 U.S.C. Section 11022, and federal regulations promulgated
thereunder. Except as set forth in the Reports or otherwise disclosed by
Borrower to Lender, the Real Estate does not contain any underground storage
tanks.
5.19 Continuation of Representations and Warranties.
All representations and warranties which have been made by Borrower shall be
true in all respects at the time of each disbursement of the Loan, and in the
event of any material breach,
19
misrepresentation or omission, Lender shall have the absolute right to terminate
its obligations under this Agreement (without any obligation to refund any loan
fees previously paid), and upon demand by Lender, Borrower shall reimburse
Lender for the Loan Expenses, and Lender shall be entitled to recover from
Borrower all losses and damages resulting therefrom.
6. CASUALTIES AND CONDEMNATION.
6.1 Lender's Election to Apply Proceeds on Indebtedness.
(a) Subject to the provisions of Section 6.1(b) below, Lender may
elect to collect, retain and apply upon the indebtedness of Borrower under
this Agreement or any of the other Loan Documents all proceeds of
insurance or condemnation (individually and collectively referred to as
"Proceeds") after deduction of all expenses of collection and settlement,
including attorneys' and adjusters' fees and charges. Any proceeds
remaining after repayment of the indebtedness under the Loan Documents
shall be paid by Lender to Borrower.
(b) Notwithstanding anything in Section 6.1(a) to the contrary, in
the event of any casualty to the Improvements or any condemnation of part
of the Project, Borrower shall have the option of applying the Proceeds to
restoration of the Improvements if (i) no Event of Default exists, (ii)
all Proceeds are deposited with Lender, (iii) in Lender's reasonable
judgment, the amount of Proceeds available for restoration of the
Improvements (together with undisbursed proceeds of the Loan, if any,
allocated for the cost of the Construction and any sums or other security
acceptable to Lender deposited with Lender by Borrower for such purpose)
is sufficient to pay the full and complete costs of such restoration, (iv)
no leases for space in the Project will be terminated as a result of such
casualty or condemnation, (v) the cost of restoration exceeds twenty
percent (20%) of the Loan Amount, in Lender's sole determination after
completion of restoration the Loan Amount (as the same may be reduced by
Borrower) will not exceed 75% of the fair market value of the Project,
(vi) in Lender's reasonable determination, the Project can be restored to
an architecturally and economically viable project in compliance with
applicable Laws, and (vii) in Lender's reasonable determination, such
restoration is likely to be completed not later than three months prior to
the Maturity Date.
6.2 Borrower's Obligation to Rebuild and Use of Proceeds Therefor.
In case Lender does not elect to apply or does not have the right to apply the
Proceeds to the indebtedness, as provided in Section 6.1 above, Borrower shall:
(a) Proceed with diligence to make settlement with insurers or the
appropriate governmental authorities and cause the Proceeds to be
deposited with Lender;
(b) In the event of any delay in making settlement with insurers or
the appropriate governmental authorities or effecting collection of the
Proceeds, deposit with Lender the fully amount required to complete
construction as aforesaid;
20
(c) In the event the Proceeds and the available proceeds of the Loan
are insufficient to assure the Lender that the Loan will be In Balance,
promptly deposit with Lender any amount necessary to place the Loan in
Balance; and
(d) Promptly proceed with the assumption of construction of the
Improvements, including the repair of all damage resulting from such fire,
condemnation or other cause and restoration to its former condition.
Any request by Borrower for a disbursement by Lender of Proceeds and funds
deposited by Borrower shall be treated by Lender as if such request were for an
advance of the Loan hereunder, and the disbursement thereof shall be conditioned
upon Borrower's compliance with and satisfaction of the same conditions
precedent as would be applicable under this Agreement for an advance of the
Loan.
7. BORROWER'S COVENANTS.
7.1 Manner of Construction.
Borrower shall, at its expense, cause the Work to be diligently and
expeditiously carried out, in a good and workmanlike manner, in accordance with
the Plans and Specifications and all applicable laws, ordinances and
regulations. All materials, fixtures, equipment and other articles used in the
construction or equipping of the Project shall comply with the Plans and
Specifications. Subject to Force Majeure, Borrower shall cause the Improvements
to be completed on or before the Completion Date.
7.2 Certificate of Completion.
Within thirty days after the Project is substantially completed, Borrower
shall deliver to Lender a certificate of the Contractor stating that the Project
has been completed in substantial accordance with the Plans and Specifications
and all applicable laws and regulations.
7.3 Change Orders.
Borrower shall not, without the prior written approval of Lender, make or
permit any modification of the Plans and Specifications, or amend or modify the
Construction Contracts, or enter into any change orders or additional contracts
for the performance of any portion of the Work; provided, however, Borrower
shall have the right to enter into one or more amendments, change orders or
additional contracts so long as (i) no Event of Default or event or circumstance
that with the passage of time, the giving of notice, or both, would constitute
an Event of Default, then exists under this Agreement or any of the other Loan
Documents, (ii) such amendment, change order or additional contract does not
involve work of a structural nature or modify the exterior of the Improvements
and does not increase the total Project Cost in excess of Twenty-Three Million
Six Hundred Seventy-Seven Thousand Two Hundred Four Dollars ($23,677,204), and
(iii) following the implementation of each such amendment, change order or
additional contract, the amount of the contingency reserve contained in the
Budget shall be an amount reasonably acceptable to the Lender. As a condition
precedent to Lender approving any amendment, change order or additional
contract, or to Borrower entering into any other contract
21
for the performance of any portion of the Work, Borrower shall, immediately upon
request of Lender and prior to commencing any Work relating to any such
amendment, change order or additional contract, deposit with Lender an amount of
money as reasonably determined by the Lender after taking into account the
additional costs and expenses resulting from said amendment, change order, or
additional contract.
7.4 Compliance with Laws.
Borrower shall comply or cause compliance with all applicable building codes,
zoning ordinances, environmental protection, health and safety laws and
regulations and other laws and regulations governing the construction,
development, use and operation of the Project and the development, operation and
sale of the Improvements. Evidence of such compliance shall be submitted to
Lender on request.
7.5 Inspection.
Borrower shall permit inspection of the Project by Lender, the Consultant and
any other agent or designee of Lender. In addition, upon prior reasonable
notice, Borrower shall permit Lender and/or its agents and designees access to
and the right to inspect, audit and copy all books, records, contracts, leases
and other documents and information relating to Borrower or the Project. All
such books, records and accounts of operations relating to the Project shall be
kept in accordance with sound accounting practices consistently applied.
Borrower shall promptly respond to any inquiry from Lender for information with
respect to the Project which information may be verified by Lender at Borrower's
expense; provided, however, that Lender shall at all times be entitled to rely
upon any statements or representations made by Borrower or any agent thereof.
7.6 Mechanics' Liens.
Borrower shall not permit any mechanics' lien claims to be filed or otherwise
asserted against the Project or against any funds due any contractor or
subcontractor, and Borrower shall promptly (and in any event within fifteen days
after Borrower has received notice of such filing) discharge or cause to be
discharged the same in case of the filing of any claims for lien or proceedings
for the enforcement thereof; provided that in connection with any such lien or
claim which Borrower may in good faith desire to contest, Borrower may contest
the same by appropriate legal proceedings diligently prosecuted, but only if
Borrower shall furnish to the Title Company such security or indemnity as the
Title Company requires to induce the Title Company to issue an endorsement to
the Title Policy insuring over the exception created by such lien, and provided
further, that Lender shall not be required to make any further disbursements of
the Loan until any mechanics' lien claims have been so insured against by the
Title Company.
7.7 Release by Lender.
With respect to the matters set forth in Section 7.6 above, if Borrower shall
(a) fail promptly to discharge any asserted liens or claims, or (b) fail
promptly to contest asserted liens or claims or to give security or indemnity in
the manner provided in Section 7.6 above, or (c) having commenced to contest the
same, and having given such security or indemnity, fail to prosecute
22
such contest with diligence, or to maintain such indemnity or security so
required by the Title Company for its full amount, or (d) upon adverse
conclusion of any such contest, fail promptly to cause any judgment or decree to
be satisfied and lien to be released, then Lender may, but shall not be required
to, upon prior written notice to Borrower procure the release and discharge of
any such claim and any judgment or decree thereon and, further, may, in its sole
discretion, effect any settlement or compromise of the same, or may furnish such
security or indemnity to the Title Company, and any amounts so expended by
Lender, including premiums paid or security furnished in connection with the
issuance of any surety company bonds, shall be deemed to constitute
disbursements of the proceeds of the Loan hereunder and shall bear interest from
the date so disbursed until paid at the Default Rate. In settling, compromising
or discharging any claims for lien, Lender shall not be required to inquire into
the validity or amount of any such claim.
7.8 Financial Statements; Reports.
During the term of the Loan, Borrower will furnish to Lender: (i) on or
before the thirtieth (30th) day following the end of each calendar quarter
commencing upon completion and occupancy of the Project quarterly operating
statements, balance sheets and rent rolls for Borrower, (ii) within ten (10)
days after receipt by Borrower financial statements for each of the tenants in
the Project if Borrower is entitled to financial statements under the respective
tenant lease, and (iii) within thirty (30) days after the same are filed, copies
of the federal tax returns for Borrower and the Trust, together with copies of
all filings by the Trust with the Securities and Exchange Commission. With
respect to financial statements of tenants in the Project, failure to furnish
such financial statements shall not be an Event of Default hereunder so long as
Borrower makes a responsible effort to do so.
7.9 Affirmation of Representations and Warranties.
Borrower agrees that all representations and warranties of Borrower contained
in Article 5 hereof shall remain true in all material respects at all times
until the Loan is repaid in full.
7.10 Title.
Except for (a) the Deed of Trust and other security for the Loan, and (b) the
Permitted Exceptions, Borrower shall keep the title to the Real Property and the
Personal Property free of all liens, claims and encumbrances, whether senior or
junior to or at parity with the Deed of Trust and such other security, subject,
however, to Borrower's right to contest mechanics' liens provided in Section 7.6
above.
7.11 Proceedings Affecting Property.
If any proceedings are filed seeking to enjoin or otherwise prevent or
declare invalid or unlawful the construction, occupancy, use, maintenance or
operation of the Project, or any portion thereof, Borrower shall cause such
proceedings to be vigorously contested in good faith, and in the event of an
adverse ruling or decision, prosecute all allowable appeals therefrom, and
shall, without limiting the generality of the foregoing, resist the entry or
seek the stay of any temporary or permanent injunction that may be entered, and
use its best efforts to bring about a
23
favorable and speedy disposition of all such proceedings. All such proceedings,
including without limitation, all of Lender's costs, and fees and disbursements
of Lender's counsel in connection with any such proceedings, whether or not
Lender is a party thereto, shall be at Borrower's expense. To the extent that
Lender incurs any such expenses, including attorneys' fees and fees and charges
for court costs, bonds and the like, Borrower shall reimburse Lender for such
expenses and the amount due Lender shall bear interest from the date so incurred
by Lender until repaid to Lender at the Default Rate and shall be payable to
Lender on demand. The foregoing provisions of this Section 7.11 shall not limit
or affect the provisions of Section 10(i) below.
7.12 Disposal and Encumbrance of Property.
Except for the Lease and the Subordinate Loan, Borrower shall not, without
Lender's prior written consent, suffer, permit or enter into any agreement for
any sale, lease, transfer, or in any way encumber or dispose of or grant or
suffer any security or other assignment (collateral or otherwise) of or in all
or any portion of the Project. Any consent given by Lender or deemed to have
been given by Lender, or any waiver of default under this Section 7.12, shall
not constitute a consent to, or waiver of any right, remedy or power of Lender
under any subsequent default hereunder.
7.13 Insurance.
Borrower shall obtain and at all times maintain the insurance required upon
the terms of the Deed of Trust Borrower shall pay all premiums on all insurance
policies required from time to time under this Agreement, and thirty days prior
to expiration of any such policies, Borrower shall furnish to Lender, with
premiums prepaid, additional and renewal policies in form, and with companies,
coverage, deductibles and amounts satisfactory to Lender. In the event of
failure by Borrower to provide such insurance, Lender may, but shall not be
required to, place insurance and treat the amounts expended therefor as
disbursements of Loan proceeds and such amounts from the date so expended by
Lender until repaid to Lender shall bear interest at the Default Rate. Borrower
shall not store materials or supplies on the Project site without first
providing to Lender evidence of insurance covering such materials or supplies,
in form and substance satisfactory to Lender.
7.14 Performance of Obligations; Notice of Default.
Borrower shall promptly and fully perform and comply in all respects with the
obligations, terms, agreements, provisions and requirements of this Agreement
and the other Loan Documents and all other documents and instruments relating
thereto and will not permit to occur any default or breach hereunder or
thereunder. Borrower shall promptly give to Lender notice of the occurrence of
any event which does or would with the passage of time or the giving of notice,
or both, constitute an Event of Default, or have any material adverse effect on
any security for the Loan or on Borrower's ability to perform its obligations
under this Agreement or any of the other Loan Documents or on the Guarantor's
ability to perform its obligations under the Guaranty and the other Loan
Documents to which it is a party.
7.15 Subcontracts.
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Within ten days after being executed, Borrower shall deliver to Lender a copy
of each Subcontract entered into by the Contractor for an amount exceeding
$500,000.
7.16 Restrictions Affecting Borrower.
Except as required by the Subordinate Loan, Borrower covenants and agrees
that, without the prior written consent of Lender, there shall not occur: (i)
any amendment or modification of the Certificate of Limited Partnership or
Partnership Agreement establishing or governing Borrower, (ii) the release or
discharge of any partner of Borrower, (iii) the admission of any new partner, or
(iv) any change in the beneficial ownership of Borrower which reduces the
interest held by the Trust to less than Fifty-One Percent (51%). Provided,
however, that borrower shall be entitled to offer up to thirty percent (30%) of
the ownership interest in Borrower to tenants in the Project upon such terms
reasonably acceptable to Lender, which acceptance shall not be unreasonably
withheld, delayed or conditioned.
7.17 Use of Receipts.
Borrower shall cause all rents and other income and receipts realized and
received by Borrower from and in connection with the Project during the term of
the Loan to be used, first for the purpose of paying interest on the Loan in
accordance with Paragraph 4.9 above, and then for the actual costs and expenses
incurred by Borrower in connection with the ownership, operation, management and
repair of the Project, including without limitation, operating expenses, real
estate taxes and insurance premiums.
7.18 Additional Documents.
Borrower shall not record any document pertaining to the title to the Land
without the prior written approval of Lender of the form and substance of such
documents.
8. LOAN EXPENSES.
Borrower agrees to pay all of the Loan Expenses. Any Loan Expenses paid by
Lender shall bear interest commencing on the date demand for repayment thereof
is made by Lender until paid at the Default Rate and shall be paid by Borrower
upon demand, or may be paid by Lender at any time by disbursement of proceeds of
the Loan. Any Loan Expenses paid by Lender shall be reimbursed to Lender by
Borrower regardless of whether there shall be any disbursements of the Loan.
9. LENDER'S REPRESENTATIVES.
Lender, at Borrower's expense as identified in the Budget, shall have the
right to engage third party personnel in connection with negotiation,
documentation and administration of the Loan, including without limitation, the
Consultant, to (i) review the Plans and Specifications, (ii) review Borrower's
final construction budget, (iii) conduct monthly inspections of the Work and
report on the progress of construction thereof, (iv) review all change orders,
(v) review applications for disbursements and accompanying documents, (vi) issue
reports and certificates to Lender, (vii) inspect the structural, mechanical,
electrical, plumbing, HVAC and roof systems
25
constituting the Work, (viii) determine whether the Work has been completed in
accordance with the Plans and Specifications, and (ix) provide other services as
requested by Lender, and Borrower shall fully cooperate with the Consultant and
other personnel in all reasonable respects in connection therewith.
10. EVENTS OF DEFAULT.
The occurrence of any one or more of the following shall constitute an "Event
of Default":
(a) Failure by Borrower or any other obligor to pay any installment
of principal or interest or any other amount payable pursuant to the Note,
this Agreement, the Indemnity Agreement or any of the other Loan Documents
on or before the fifth day after the date when such amount is due and
payable.
(b) Failure by Borrower to promptly perform or cause to be performed
any non-monetary obligation or observe any non-monetary condition,
covenant, term, agreement or provision required to be performed or
observed by Borrower or Guarantor under this Agreement, the Note, the Deed
of Trust, the Indemnity Agreement or any of the other Loan Documents;
provided, however, that if such failure by its nature can be cured, then
so long as the continued operation and safety of the Project, and the
priority, validity and enforceability of the lien created by the Deed of
Trust or any of the other Loan Documents and the value of the Project are
not imminently impaired, threatened or jeopardized, then Borrower shall
have a period (the "Cure Period") of thirty (30) days after written notice
from Lender of any such failure of performance or observance to cure or
cause the cure of the same, and an Event of Default shall not be deemed to
exist during the Cure Period, provided further that if Borrower commences
to cure such failure during the Cure Period and is diligently and in good
faith attempting to effect such cure, the Cure Period shall be extended
for thirty additional days, but in no event shall the Cure Period be
longer than sixty days in the aggregate. The foregoing Cure Period is
intended only to apply in circumstances not referred to in any of the
other paragraphs of this Section 10; Borrower's right to a grace or cure
period, if any, with respect to such other circumstances are to be
governed by the provisions of such other paragraphs.
(c) The existence of any material inaccuracy or untruth in any
representation, covenant or warranty contained in this Agreement or any
other Loan Documents, or of any statement or certification as to facts
delivered to Lender by or on behalf of Borrower, Guarantor or any other
applicant for the Loan.
(d) A discontinuance of the construction of the Work for a period of
thirty consecutive business days (unless otherwise approved by Lender),
other than a discontinuance resulting from Force Majeure events (it being
understood that a delay caused by an insufficiency of funds shall not be
deemed to be beyond the control of Borrower), or any delay in the Work,
other than Force Majeure events, the result of which may be, in Lender's
sole judgment, that the Work will not be substantially completed on or
before the Completion Date.
26
(e) At any time Borrower or Guarantor files a voluntary petition in
bankruptcy, or institutes (by petition, application, answer, consent or
otherwise) any bankruptcy, insolvency, reorganization, arrangement,
composition, readjustment, dissolution, liquidation or similar proceedings
under any present or future federal, state or other statute or law, or
admits in writing his or its inability to pay his or its debts as they
mature, or makes an assignment for the benefit of its creditors, or seeks
or consents to the appointment of any receiver, trustee or similar officer
for all or any substantial part of its property.
(f) The commencement of any involuntary petition in bankruptcy
against Borrower or Guarantor or the institution against Borrower or
Guarantor of any reorganization, arrangement, composition, readjustment,
dissolution, liquidation or similar proceedings under any present or
future federal, state or other statute or law, or the appointment of a
receiver, trustee or other officer for all or any substantial part of the
property of Borrower or Guarantor which remains undismissed or
undischarged for a period of sixty (60) days.
(g) The disapproval by Lender at any time of any Work for failure to
comply with the Plans and Specifications or any other provisions of this
Agreement, and Borrower's failure to cause the same to be corrected to the
satisfaction of Lender within fifteen business days after the date
Borrower is given written notice of such disapproval.
(h) Any sale, transfer, lease, assignment, conveyance, financing,
lien, encumbrance or other transaction made in violation of Section 7.12
or 7.16 above.
(i) Failure of Borrower for a period of thirty days after Lender's
demand to procure the reversal, dismissal or disposition to Lender's
satisfaction of any order enjoining or otherwise preventing or declaring
invalid or unlawful the construction, occupancy, maintenance, operation or
use of the Project, or any portion thereof, in the manner required by the
terms of this Agreement, or of any proceedings which could affect the
validity or priority of the lien of the Deed of Trust or any of the other
security for the Loan, or which could materially affect Borrower's ability
to perform its obligations under this Agreement or the other Loan
Documents or Guarantor's obligations under the Guaranty.
(j) Except as set forth in the Subordinated Loan Documents, the
attachment, seizure, levy upon or taking of possession by any receiver,
custodian or assignee for the benefit of creditors of all or a substantial
part of the property of Borrower or Guarantor which is not stayed or
dismissed within thirty days after the occurrence thereof.
(k) The assignment or attempted assignment of this Agreement by
Borrower without Lender's prior written consent.
11. EXERCISE OF REMEDIES.
11.1 Remedies.
27
Upon the occurrence of any Event of Default, Lender, in addition to availing
itself of any remedies conferred upon it by law and by the terms of the Note,
the Deed of Trust and the other Loan Documents, may pursue any one or more of
the following remedies first, concurrently or successively with each other and
with any other available remedies, it being the intent hereof that none of such
remedies shall be to the exclusion of any others:
(a) Take possession of the Project and complete the Work and do
anything necessary or desirable in Lender's sole judgment to fulfill the
obligations of Borrower hereunder, including either the right to avail
itself of and procure performance of the Construction Contract, any
Subcontracts or any other contract entered into for the performance of all
or any portion of the Work (or any substitute therefor), or to let new or
additional contracts with the same contractors or subcontractors or
others, and to employ watchmen to protect the Project from injury. Without
restricting the generality of the foregoing and for the purposes
aforesaid, Borrower hereby appoints and constitutes Lender its lawful
attorney-in-fact with full power of substitution (i) to complete the Work
in the name of Borrower; (ii) to use portions of the Loan or other funds
which may be reserved, escrowed or set aside for any purposes hereunder at
any time to complete the Work; (iii) to make changes in the Plans and
Specifications which shall be reasonably necessary or reasonably desirable
to complete the Work; (iv) to retain or employ new general contractors,
subcontractors, architects, engineers and inspectors as shall be required
for such purposes; (v) to pay, settle or compromise all existing bills and
claims, which may be liens or security interests or to avoid such bills
and claims becoming liens or security interests against the Project, or as
may be necessary or desirable for the completion of the Work or for the
clearance of title; (vi) to execute all applications and certificates in
the name of Borrower which may be required by any of the Loan Documents;
(vii) to prosecute and defend all actions or proceedings in connection
with the Work; (viii) to take such action and require such performance as
it deems necessary under any of the bonds to be furnished pursuant to the
provisions hereof and to make settlements and compromises with the surety
or sureties thereunder, and in connection therewith, to execute
instruments of release and satisfaction; it being understood that the
foregoing power of attorney is coupled with an interest and cannot be
revoked. All sums expended by Lender pursuant to this Article 11 shall be
deemed to have been paid to Borrower and secured by the Deed of Trust and
the other Loan Documents, and shall bear interest at the Default Rate
until repaid to Lender.
(b) Withhold further disbursements of proceeds of the Loan.
(c) Declare the unpaid indebtedness evidenced by the Note to be
immediately due and payable.
(d) Exercise any of the rights and remedies contained in this Deed
of Trust and/or any of the other Loan Documents and/or exercise any other
rights and remedies that Lender may have at law or in equity.
(e) Apply the balance of any deposits made with Lender toward the
repayment of the Loan.
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12. MISCELLANEOUS.
12.1 Additional Indebtedness.
If any advances or payments made by Lender pursuant to this Agreement or any
other Loan Document, together with disbursements of the Loan, shall exceed the
aggregate face amount of the Note, all such advances and payments shall
constitute additional indebtedness secured by the Deed of Trust and all other
security for the Loan, and shall bear interest at the Default Rate from the date
advanced until paid.
12.2 Additional Acts.
Borrower shall, upon request, execute and deliver such further instruments and
documents and do such further acts and things as may be reasonably required to
provide to Lender the evidence of and security for the Loan contemplated by this
Agreement.
12.3 Loan Agreement Governs.
In the event of any inconsistency between any provision of this Agreement and
any provision of any other Loan Document, the provision of this Agreement shall
govern; provided, however, that the provisions of all of the Loan Documents
shall be construed as an integrated set of provisions governing the Loan and,
accordingly, shall be interpreted and construed liberally to give the maximum
validity, enforceability and effect to all of such provisions.
12.4 Additional Advances.
If an Event of Default shall occur, Lender may, but shall not be obligated to,
take any and all actions to cure such default, and all amounts expended in so
doing, all Loan Expenses and all other amounts paid or advanced by Lender
pursuant to the Loan Documents, and all other amounts advanced by Lender in
connection with the performance of the Work or preserving any security for the
Loan, shall constitute additional advances of the Loan, shall be secured by the
Deed of Trust and all other security for the Loan, and shall bear interest at
the Default Rate from the date advanced until paid.
12.5 Amendment; Waiver; Approval.
This Agreement shall not be amended, modified or supplemented without the
written agreement of Borrower and Lender at the time of such amendment,
modification or supplement. No waiver of any provision of this Agreement or any
of the other Loan Documents shall be effective unless set forth in writing
signed by the party making such waiver, and any such waiver shall be effective
only to the extent therein set forth. Failure by Lender to insist upon full and
prompt performance of any provisions of this Agreement or any of the other Loan
Documents, or to take action in the event of any breach of any such provision or
upon the occurrence of any Event of Default, shall not constitute a waiver of
any rights of Lender, and Lender may at any time thereafter exercise all
available rights and remedies with respect to such breach or Event of Default.
Receipt by Lender of any instrument or document shall not constitute or be
deemed to be an approval thereof. Any approvals required under any of the other
Loan Documents must be
29
in writing, signed by Lender and directed to Borrower.
12.6 Notice.
All notices, communications and waivers under this Loan Agreement shall be in
writing and shall be (i) delivered in person or (ii) mailed, postage prepaid,
either by registered or certified mail, return receipt requested, or (iii) by
overnight express carrier, addressed in each case as follows:
To Lender: The Huntington National Bank
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Vice President
With a copy to: ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇ LLP
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
To Borrower: c/o Windrose Medical Property Trust
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, President
With a copy to: Windrose Medical Properties Trust
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq., General Counsel
or to any other address as to either of the parties hereto, as such party shall
designate in a written notice to the other party hereto. All notices sent
pursuant to the terms of this Section 12.6 shall be deemed received (i) if
personally delivered, then on the date of delivery, (ii) if sent by overnight,
express carrier, then on the next Business Day immediately following the day
sent, or (iii) if sent by registered or certified mail, on the earlier of the
third Business Day following the day sent or when actually received.
12.7 Benefit; Assignment.
The rights, powers and remedies of Lender under this Agreement shall inure to
the benefit of Lender and its successors and assigns. The rights and obligations
of Borrower under this Agreement may not be assigned and any purported
assignment by Borrower shall be null and void.
12.8 Governing Law.
This Agreement shall be governed by and construed in accordance with the laws
of the State of Texas.
30
12.9 Indemnity.
Borrower agrees to indemnify, defend and hold Lender harmless from and against
any and all liabilities, obligations, losses, damages, claims, costs and
expenses (including reasonable attorneys' fees and court costs) of whatever kind
or nature which may be imposed on, incurred by or asserted against Lender at any
time which relate to or arise from the performance of the Work, the offer to
rent all or any portion of the Project and/or the ownership, use, operation or
maintenance of the Project, including without limitation, any brokerage
commissions or finder's fees asserted by, through or under Borrower against
Lender with respect to the making of the Loan and any damages incurred by Lender
by reason of the construction of Borrower and Lender as having the relationship
of joint venturers or partners or Borrower or Lender being deemed to have acted
as agent for the other, except to the extent such liability, obligation, loss,
damage, claim, cost or expense arises or results directly from the gross
negligence or willful misconduct of Lender, its agents or its representatives
following the date, if any, on which Lender becomes mortgagee in possession of
the Project or if Lender does not become mortgagee in possession of the Project,
the date, if any, on which Lender or its nominee acquires title to the Project.
To the extent the provisions of this Section 12.9 are inconsistent with the
terms and provisions of the Deed of Trust, the provisions of the Deed of Trust
shall be deemed controlling.
12.10 Headings.
The titles and headings of the articles and paragraphs of this Agreement have
been inserted as a matter of convenience of reference only and shall not control
or affect the meaning or construction of any of the terms or provisions of this
Agreement.
12.11 No Partnership or Joint Venture.
Lender, by executing and performing this Agreement shall not become a partner
or joint venturer with Borrower or any partner of Borrower or any of their
respective associates or affiliates and all inspections of the Project herein
provided for are for the sole benefit of Lender.
12.12 Time is of the Essence.
Time is of the essence of the payment of all amounts due Lender under this
Agreement and performance and observance by Borrower of each covenant,
agreement, provision and term of this Agreement and the other Loan Documents.
12.13 Invalid Provisions.
In the event any one or more of the provisions contained in this Agreement or
in any of the other Loan Documents shall for any reason be held to be invalid,
illegal or unenforceable in any respect by a court of competent jurisdiction,
such invalidity, illegality or unenforceability shall not affect any other
provision of this Agreement or any other Loan Document, and this Agreement and
the other Loan Documents shall be construed as if such invalid, illegal or
unenforceable provision had never been in the Loan Documents.
12.14 Offset.
31
Without limitation of any other right or remedy of Lender hereunder or
provided by law, any indebtedness relating to the Project or its operation and
now or hereafter owing to Borrower by Lender (including, without limitation, any
amounts on deposit in any demand, time, savings, passbook or like account
maintained by Borrower with Lender) may be offset and applied by Lender
hereunder, or under the Note, the Deed of Trust or any of the other Loan
Documents.
12.15 Acts by Lender.
Notwithstanding anything herein contained to the contrary, Lender will not be
required to make any disbursement or perform any other act under this Agreement
if, as a result thereof, Lender will violate any law, statute, ordinance, rule,
regulation or judicial decision applicable thereto.
12.16 Joint and Several Liability; Binding Provisions.
The obligations and liabilities of Borrower under this Agreement shall be
joint and several. The covenants, warranties, agreements, obligations,
liabilities and responsibilities of Borrower under this Agreement shall be
binding upon and enforceable against Borrower and its legal representatives,
administrators, successors and permitted assigns.
12.17 Counterparts.
This Agreement may be executed in counterparts, and all said counterparts when
taken together shall constitute one and the same Agreement.
12.18 No Third Party Borrower.
This Agreement is only for the benefit of the parties hereto. No other person
or entity shall be entitled to rely on any matter set forth herein without the
prior written consent of such parties.
12.19 Sign.
Subject to compliance with applicable laws, codes and ordinances, Lender
reserves the right to publicize the making of the Loan in any manner it deems
appropriate, including, without limitation, advertisements in trade journals and
newspapers. In addition, Borrower agrees that Lender shall have the right to
erect and maintain a sign at the Project, at Lender's expense, in a prominent
location for the first twelve months of the Loan. Lender acknowledges and agrees
that any public announcement of this Loan will not be made by Lender without the
prior approval of Borrower, which will not be unreasonably withheld or delayed.
12.20 WAIVER OF RIGHT TO JURY TRIAL.
LENDER AND BORROWER ACKNOWLEDGE AND AGREE THAT ANY CONTROVERSY WHICH MAY ARISE
UNDER THIS LOAN AGREEMENT OR ANY OTHER LOAN DOCUMENT OR WITH RESPECT TO THE
TRANSACTIONS CONTEMPLATED HEREIN AND THEREIN WOULD BE BASED UPON DIFFICULT AND
COMPLEX ISSUES AND, THEREFORE, THE PARTIES AGREE THAT ANY COURT PROCEEDING
ARISING OUT OF ANY SUCH CONTROVERSY WILL BE TRIED IN A
32
COURT OF COMPETENT JURISDICTION BY A JUDGE SITTING WITHOUT A JURY.
13. ASSIGNMENTS AND PARTICIPATIONS.
Lender may from time to time sell the Loan and the Loan Documents (or any
interest therein) and may grant participations in the Loan. Borrower agrees to
cooperate with Lender's efforts to do any of the foregoing and to execute all
documents reasonably required by Lender in connection therewith (including, but
not limited to, the provisions of the Syndication Rider attached hereto) which
do not materially adversely affect Borrower's rights under the Loan Documents.
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the
date first above written.
33
SIGNATURE PAGE OF BORROWER TO LOAN AGREEMENT
WMPT BELLAIRE POB, L.P. a Virginia Limited
Partnership
By: WMPT Bellaire POB Properties, L.L.C.,
a Virginia limited liability company, its
sole General Partner
By:_________________________________
▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, President
SIGNATURE PAGE OF LENDER TO LOAN AGREEMENT
THE HUNTINGTON NATIONAL BANK, a
national banking association
By: ________________________________________
▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Vice President
EXHIBITS TO LOAN AGREEMENT
A - Budget
B - Land
C - Permitted Exceptions
D - Plans and Specifications
RIDER TO LOAN AGREEMENT
Syndication Rider
EXHIBIT A
BUDGET
EXHIBIT B
LAND
EXHIBIT C
PERMITTED EXCEPTIONS
Those exceptions set forth in Schedule B of the Loan Policy of Title Insurance
issued by Fidelity National Title Insurance Company as Policy No.
GF-04-02-10696.
EXHIBIT D
PLANS AND SPECIFICATIONS
On file with the Lender
14. SYNDICATION RIDER
14.1 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 under the other Loan Documents to any
other Eligible 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
Eligible Assignee is also a Lender or if an Event of Default then exists)
and no consent of the Agent shall be required if the Eligible 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 Assumption, (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 Three
Million Dollars ($3,000,000), (iv) if the assignment is made to an
Eligible Assignee which is not an original Lender, the Agent shall receive
from the assigning Lender a processing fee of Three Thousand Five Hundred
Dollars ($3,500), and (v) if the assignment is less than the assigning
Lender's entire interest in the Loan, the assigning Lender must retain at
least a Three Million Dollar ($3,000,000) interest in the Loan. The Agent
may designate any Eligible Assignee accepting an assignment of a specified
portion of the Loan 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
Assumption, (a) the Eligible 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 Assumption, 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 Lenders
in connection with the interest so assigned shall be enforceable against
Borrower by an Eligible 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 Assumption,
relinquish its rights and be released from its obligations hereunder and
thereunder.
(b) By executing and delivering an Assignment and Assumption, the
assigning Lender thereunder and the Eligible Assignee thereunder confirm
to and agree with each other and the other parties hereto as follows: (i)
except as provided in such Assignment and Assumption, 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, 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 or the performance or observance by the Borrower of any of
its obligations under any Loan Document or any other instrument or
document furnished in connection therewith; (iii) such Eligible 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 Assumption and to become a Lender
hereunder; (iv) such Eligible 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 Eligible 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 Eligible
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 Assumption
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
Loan 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 Assumption executed by an
assigning Lender and an Eligible Assignee, Agent shall, if such Assignment
and Assumption has been properly completed and consented to if required
herein, accept such Assignment and Assumption, 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.
(f) 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; (iv) the
parties to each such assignment execute and deliver to Agent an Assignment
and Assumption, and (v) the Agent receives from the assigning Lender a
processing fee of One Thousand Five Hundred Dollars ($1,500).
(g) Each Lender shall have the right, without the consent of the
Borrower, to sell participations to one or more Eligible Assignees in or
to all or a portion of its rights and obligations under the Loan 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 Eligible Assignee its interest in
such Lender's share of the Loan as to voting of such Lender's interest
under Section 15.7(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).
(h) No Eligible 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.
(i) 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 Eligible 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 Eligible Assignees and sales to Eligible
Assignees, 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 (including financial obligations, personal recourse,
representations and
warranties and reporting requirements), or (ii) to expend more than
incidental sums of money or incidental 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 Lenders' rights pursuant to this Section,
including providing such information and documentation regarding Borrower
as any Lender or any potential Eligible Assignee may reasonably request
and to meet with potential Eligible Assignees.
14.2 Several Liability.
Anything in this Agreement contained to the contrary notwithstanding, the
obligations of each Lender 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.
During any time, and only during such time, as Agent has not assigned any
portion or portions of its interest in the Loan to another Lender pursuant to an
Assignment and Assumption Agreement, Agent in its individual capacity shall be
liable for all of the obligations of the Lender under this Agreement and the
other Loan Documents. From and after the date that Agent as the sole Lender
assigns any portion or portions of its interest in the Loan to another Lender
pursuant to an Assignment and Assumption Agreement, then Agent shall act as the
administrative agent on behalf of itself as a Lender and the other Lenders.
14.3 Costs to Borrower.
Except for the legal fees of Agent's counsel, Borrower shall not be charged
for any fees or expenses by Agent or Lender or any Eligible Assignee in
connection with any assignment or participation of the Loan as provided in this
Article 14.
15. AGENT.
15.1 Appointment. The Huntington National Bank is hereby appointed as
Agent hereunder and under each other Loan Document, and each Lender hereby
irrevocably authorize the Agent to act as agent for Lender and to take such
actions as Lender is 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 15.2 below. In performing
its functions and duties under this Agreement, the Agent shall act solely as
agent of Lender 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.
15.2 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 15.
15.3 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 15.7(a) or to the consent of all
Lenders pursuant to Section 15.7(b). The Agent shall not be considered, or be
deemed, a separate agent of the Lenders 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 have no implied duties to the
Lenders, or any obligation to the Lenders to take any action except any action
specifically provided by the Loan Documents to be taken by the Agent.
15.4 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 two (2) 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 or e-mail. 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 Noon (Columbus, Ohio time) on the Funding Date.
Nothing in this Section 15.4 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 Receipt and Certification described in Section 4.3(a) and
cause the Lender's Consultant to forward to each Lender a copy of the
Lender's Consultant's most recent inspection. Delivery of the Draw Request
documents and the Lender's Consultant's inspection report shall not be a
condition to funding any Advance.
15.15 Distribution and Apportionment of Payments.
(a) Subject to Section 15.5(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 Assumption, 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.
(b) 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 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.
(c) 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 Note 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.
15.6 Consents and Approvals.
(a) Each of the following shall require the approval or consent of
the Required Lenders:
(i) The exercise of any rights and remedies under the Loan
Documents following an Event of Default, provided that absent any
direction from the Required Lenders, Agent may exercise any right or
remedy under the Loan Documents as Agent may determine in good faith
to be necessary or appropriate to protect the Lenders or the
collateral securing the Loan;
(ii) Appointment of a successor Agent;
(iii) Approval of Post-Default Plan (defined in Section
15.8(d)); and
(iv) 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 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 (beyond any extension
permitted herein);
(ii) Forgiveness of all or any portion of the principal amount
of the Loan or any accrued interest thereon, or
(iii) Any amendment of this Agreement or the other Loan
Documents, including without limitation, any change in the Interest
Rate;
(iv) Any change in the definition of Required Lenders;
(v) Any Increase of the amount of the Maximum Amount or any
Lender's Commitment;
(vi) Release of any collateral or any Guarantor (except as
Borrower is entitled to under the Loan Documents);
(vii) Any amendment or modification of the Lease; and
(viii) Amendment of the provisions of this Article 15.
(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 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.
(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
Lenders' 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 if Agent reasonably determines that
such action needs to be taken for the protection of the Lenders. 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.
15.7 Agency Provisions Relating to Collateral.
(a) 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 Loan or any Loan 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.
(b) 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.
(c) 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 employs counsel for advice or other
representation (whether or not any suit has been or shall be filed) with
respect to any collateral for the Loan 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 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.
(d) In the event that all or any portion of the collateral for the
Loan 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
Lenders. All such distributions shall be made to 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.
15.8 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 Guarantor 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
Lenders with respect to the Borrower and any collateral in accordance with the
terms of this Agreement, each Lender hereby consents to the jurisdiction of the
court in which such action is maintained.
15.9 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.
15.10 Ratable Sharing.
Subject to Sections 15.4 and 15.5, Lenders agree among themselves that (i)
with respect to all amounts received by them which are applicable to the payment
of the Loan, 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.
15.11 General Immunity.
Neither Agent nor any of its directors, officers, agents or employees
shall be liable to Borrower or 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. In the absence of gross negligence, the Agent shall not be liable
for any apportionment or distribution of payments made by it in good faith
pursuant to Section 15.5, and if any such apportionment or distribution is
subsequently determined to have been made in error the sole recourse of any
Lender to whom payment was due, but not made, shall be to recover from the
recipients of such payments any payment in excess of the amount to which they
are determined to have been entitled.
15.12 No Responsibility for Loan, 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, or verify
(i) any statement, warranty or representation made in connection with any Loan
Document or any use of the Loan; (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.
15.13 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
release Agent from liability for its gross negligence or willful misconduct.
15.14 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.
15.15 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 Loan, but shall not be
precluded from also representing Agent in any matter in which the interests of
Agent and the other Lenders may differ.
15.16 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, 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.
15.7 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
acknowledge and agree 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.
15.18 Lenders' 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.
15.19 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.
15.20 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 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, 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 15 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.