PROJECT LOAN AGREEMENT
between
WILMINGTON TRUST COMPANY,
not in its individual capacity,
but solely as Owner Trustee, as Lender,
and
AGREE-MILESTONE CENTER PROJECT, L.L.C.
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Dated as of June 17,1999
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TABLE OF CONTENTS
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PAGE
PRELIMINARY STATEMENT....................................................1
SECTION 1. DEFINITIONS...................................1
1.1 Defined Terms..........................................1
1.2 Construction..........................................12
1.3 Accounting Principles.................................13
SECTION 2. THE PROJECT LOAN.............................14
2.1 Project Loan Commitment...............................14
2.2 Determination of Amounts of Project Loan Advances.....14
2.3 Construction Budget Evaluation........................14
2.4 Reduction of Project Loan Commitment..................15
2.5 Project Loan Advance Requests.........................15
2.6 Project Loan Advances.................................16
2.7 Notes.................................................16
2.8 Interest Rate on Project Loan Advances................16
2.9 Maximum Interest Rate.................................16
2.10 Use of Proceeds.......................................16
2.11 Advances to Pay Interest..............................16
SECTION 3. PAYMENTS.....................................16
3.1 Payments..............................................16
3.2 Interest Payment Dates................................17
3.3 Prepayments...........................................17
3.4 Indemnity.............................................18
SECTION 4. BORROWER REPRESENTATIONS AND WARRANTIES......18
4.1 Existence; Compliance with Law........................18
4.2 Power; Authorization; Enforceable Obligations.........19
4.3 No Litigation.........................................19
4.4 Consents, Approvals, Authorizations, Etc..............19
4.5 No Legal Bar..........................................19
4.6 Compliance with Building Codes, Zoning Laws, Etc......20
4.7 Ownership of Property; Liens..........................20
4.8 No Default............................................20
4.9 Taxes.................................................20
4.10 Availability of Utilities.............................20
4.11 Permits, Etc..........................................20
4.12 Financial Statements..................................20
4.13 Federal Regulations...................................21
4.14 Investment Company Act; Other Regulations.............21
4.15 Environmental Matters.................................21
4.16 Regulation H..........................................22
4.17 No other Assets.......................................22
SECTION 5. AFFIRMATIVE COVENANTS........................22
5.1 Construction..........................................22
5.2 Correction of Work....................................23
5.3 No Encroachments......................................23
5.4 Certain Notices.......................................23
5.5 Indemnification.......................................24
5.6 Construction Schedule.................................24
5.7 Expenses..............................................24
5.8 Conduct of Business and Maintenance of Existence......24
5.9 Inspection of Property; Books and Records;
Discussions..........................................24
5.10 Compliance with Project Loan Documents................25
5.11 Further Assurances....................................25
5.12 Single Purpose Entity; Separateness...................25
SECTION 6. NEGATIVE COVENANTS...........................27
6.1 Changes in Plans and Specifications...................27
6.2 Change Orders.........................................27
6.3 Changes in Agreements.................................28
6.4 Limitation on Liens...................................28
6.5 Limitation on Contingent Obligations..................28
6.6 Other Activities......................................28
6.7 Ownership of Properties, Indebtedness.................28
6.8 Disposition of Assets.................................29
6.9 Discharge of Liens....................................29
6.10 Change in Ownership...................................29
SECTION 7. CONDITIONS PRECEDENT TO FIRST ADVANCE........29
7.1 Closing Documents.....................................29
7.2 Accounting............................................32
7.3 Representations and Warranties........................32
7.4 No Default or Event of Default........................32
7.5 Additional Matters....................................32
7.6 Environmental Audit...................................33
7.7 Developer Equity......................................33
7.8 Acquisition of Property...............................33
SECTION 8. CONDITIONS PRECEDENT TO
SUBSEQUENT ADVANCES........................33
8.1 All Subsequent Advances...............................33
8.2 Completion of Improvements............................35
SECTION 9. MATTERS RELATING TO PAYMENTS
AND COLLATERAL.............................36
9.1 The Account...........................................36
9.2 Proceeds of Collateral; Proceeds
Remaining in Account.................................38
9.3 Certain Remedial Matters..............................39
9.4 Release of the Property, Etc..........................39
SECTION 10. EVENTS OF DEFAULT.....................................40
10.1 Events of Default.....................................40
10.2 Lender's Right to Apply Project Loan Proceeds.........42
10.3 Lender's Right to Complete............................42
10.4 Power of Attorney.....................................43
SECTION 11. MISCELLANEOUS.........................................43
11.1 No Waivers............................................43
11.2 Lender and Lessee as Sole Beneficiaries...............43
11.3 Notices...............................................44
11.4 Modifications.........................................45
11.5 Rights Cumulative.....................................45
11.6 Schedules.............................................45
11.7 Governing Law.........................................45
11.8 Waiver of Jury Trial, Submission to Jurisdiction......45
11.9 Captions..............................................46
11.10 Obligations Non-Recourse................................46
EXHIBITS
EXHIBIT A LEGAL DESCRIPTION OF PROPERTY
EXHIBIT B SITE PLAN
EXHIBIT C CONSTRUCTION BUDGET
[NOTE: Documents referred to in Project Loan Agreement, as being executed on
date of execution of Project Loan Agreement:
1. Lease and Lease Supplement, if applicable
2. Mortgage or Deed of Trust
3. Project Loan Note
4. Assignment of Leases and Rents
5. Development Agreement
6. Development Agency Agreement
7. Assignment of Development Agency Agreement
8. Completion Guarantee (Borders)
9. Organizational Certificate of Borrower
PROJECT LOAN AGREEMENT
(Germantown, Maryland)
PROJECT LOAN AGREEMENT, dated as of June 17, 1999 (this
"Agreement"), between WILMINGTON TRUST COMPANY, not in its individual
capacity, but solely as Owner Trustee, having an office at ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ("Lender"), and AGREE-MILESTONE CENTER
PROJECT, L.L.C., a Delaware limited liability company, having its principal
office at ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
("Borrower").
PRELIMINARY STATEMENT
Borrower is the owner of the land located in the City of Germantown,
County of ▇▇▇▇▇▇▇▇▇▇ and State of Maryland, and more particularly described
in Exhibit A attached hereto and incorporated herein by reference (the
"Land"). Borrower wishes to construct and equip on the Land a building
containing approximately 25,000 square feet of rentable space in the
approximate location depicted on Exhibit B attached hereto and incorporated
herein by reference and any other improvements to be constructed pursuant to
the Development Agreement. In order to acquire the Land and construct the
Improvements, Borrower has requested Lender to provide to Borrower a loan in
the aggregate principal amount of $4,138,247.77 (the "Project Loan").
Subject to the terms and conditions of this Agreement, Lender has
agreed to make the Project Loan to Borrower.
NOW THEREFORE, in consideration of the foregoing, and for other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto covenant and agree as follows:
SECTION 1. DEFINITIONS
1.1 Defined Terms. For the purposes of this Agreement the following
terms shall have the meaning given to such term below:
"Account" shall have the meaning specified in Section 9.1.
"Affiliate" with respect to any Person, any other Person (i) which
directly or indirectly controls, is controlled by, or is under common control
with such Person, (ii) which beneficially owns or holds 5% or more of any
class of the voting or other equity interests of such Person, or (iii) 5% or
more of any class of voting interests or other equity interests of which is
beneficially owned or held, directly or indirectly, by such Person. Control,
as used in this definition, shall mean the possession, directly or
indirectly, of the power to direct or cause the direction of the management
or policies of a Person, whether through the ownership of voting securities,
by contract or otherwise, including the power to elect a majority of the
directors or trustees of a corporation or trust, as the case may be.
"Agent" shall mean Bankers Trust Company, a New York banking
corporation.
"Agreement" shall mean this Project Loan Agreement, as it may be
amended, supplemented or otherwise modified from time to time.
"Allocated Interest" shall mean, as of any Interest Payment Date
during the Construction Period, the amount of interest due and payable on
such date with respect to the Project Loan.
"Architect" shall mean such architect or architects as may be
engaged by Borrower from time to time in connection with the Improvements
with Lender's prior written approval.
"Architect's Agreement" shall mean any agreements entered into
between Borrower and the Architect providing for architectural services in
connection with the construction of the Improvements, as it may be amended,
supplemented or otherwise modified from time to time with Lender's prior
written approval.
"Assignment of Development Agency Agreement" shall mean the
Assignment of Development Agency Agreement, dated as of the date hereof made
by Borrower in favor of Lender.
"Assignment of Lease" shall mean the Assignment of Leases and Rents,
dated as of the date hereof made by Borrower in favor of Lender.
"Available Project Loan Commitment" shall mean, at any particular
time, an amount equal to the difference between (a) the amount of the Project
Loan and (b) the aggregate amount of all Project Loan Advances made pursuant
to this Agreement.
"Basic Rent" shall mean, the sum of (i) the Project Loan Basic Rent
and (ii) the Developer Basic Rent, calculated as of the applicable date on
which Basic Rent is due.
"Beneficial Owner" shall have the meaning specified in Section 5.12.
"Borrowing Certificate" shall mean a certificate executed by a
Responsible Officer, delivered to Lender on each Borrowing Date, satisfactory
in form and substance to Lender.
"Borrowing Date" shall mean, with respect to any Project Loan
Advance, the date for the making thereof, which shall be a Business Day.
"Business Day" shall mean any day other than a Saturday or Sunday or
a legal holiday on which commercial banks are authorized or required to be
closed for business in New York, New York.
"Collateral" shall mean all assets of Borrower, now owned or
hereafter acquired, upon which a Lien is purported to be created by the
Security Documents.
"Completion" or "Completed" shall mean, with respect to any
Improvements, such time as substantial completion of such Improvements has
been achieved in accordance with the Plans and Specifications and in
compliance with all material Legal Requirements and Insurance Requirements
and otherwise in accordance with the Development Agreement.
"Completion Guarantee" shall mean Guarantee of Completion, dated as
the date hereof, made by Lessee in favor of Lender.
"Construction Budget" shall mean the budget for the cost of
acquiring the Land and constructing the Improvements attached as Exhibit C
hereto, as it may be amended, supplemented or otherwise modified from time to
time with the prior written approval of Lender and Lessee.
"Construction Budget Deficit" shall have the meaning assigned to
that term in Section 2.3.
"Contingent Obligation" shall mean as to any Person, any obligation
of such Person guaranteeing or intended to guarantee any Indebtedness,
leases, dividends or other monetary obligations ("primary obligations") of
any other Person (the "primary obligor") in any manner, whether directly or
indirectly, including, without limitation, any obligation of such Person,
whether or not contingent, (a) to purchase any such primary obligation or any
property constituting direct or indirect security therefor, (b) to advance or
supply funds (i) for the purchase or payment of any such primary obligation
or (ii) to maintain working capital or equity capital of the primary obligor
or otherwise to maintain the net worth or solvency of the primary obligor,
(c) to purchase property, securities or services primarily for the purpose of
assuring the owner of any such primary obligation of the ability of the
primary obligor to make payment of such primary obligation or (d) otherwise
to assure or hold harmless the owner of such primary obligation against loss
in respect thereof; provided, however, that the term Contingent Obligation
shall not include (x) endorsements of instruments for deposit or collection
in the ordinary course of business or (y) guarantees made by a Person of the
obligations of a Subsidiary or Affiliate of such Person which do not
constitute Indebtedness of such Subsidiary or Affiliate and are incurred in
the ordinary course of business of such Subsidiary or Affiliate. The amount
of any Contingent Obligation shall be deemed to be an amount equal to the
stated or determinable amount of the primary obligation in respect of which
such Contingent Obligation is made or, if not stated or determinable, the
maximum reasonably anticipated liability in respect thereof (assuming such
Person is required to perform thereunder) as determined by such Person in
good faith.
"Construction Period" shall mean the period commencing on the
Property Closing Date for such Property and ending on the earlier to occur of
(a) the Interest Capitalization Termination Date or (b) Completion of such
Property.
"Consulting Professional" shall mean the Agent, or such other
architectural or engineering consultant as Lender may engage from time to
time to examine the Plans and Specifications, changes in the Plans and
Specifications and Construction Budget cost breakdowns and estimates, to make
periodic inspections of the progress on construction of the Improvements on
Lender's behalf and to advise and render reports to Lender.
"Contractual Obligation" shall mean as to any Person, any provision
of any security issued by such Person or of any agreement, instrument or
undertaking to which such Person is a party or by which it or any of its
property is bound.
"Credit Agreement" shall mean the Amended and Restated Credit
Agreement, dated as of November 22, 1995, and amended and restated as of
October 17, 1997, between Lender, as borrower, PNC Bank, National
Association, as administrative agent, First National Bank of Chicago as
syndication agent, Bankers Trust Company, as real estate administrative
agent, and the lenders party thereto.
"Credit Agreement Event of Default" shall mean any event or
condition defined as an "Event of Default" in Article IX of the Credit
Agreement.
"Credit Agreement Interest Rate" shall mean as of any date of
determination, the weighted average interest rate payable by Lender on
outstanding loans under the Credit Agreement, including, interest payable
under Article IV of the Credit Agreement, expressed as a percentage on an
annualized basis.
"Default" shall mean any of the events specified in the "Events of
Default" subsection, whether or not any requirement for the giving of notice,
the lapse of time, or both, or any other condition has been satisfied.
"Developer" shall mean the person identified as the Developer in the
Development Agreement.
"Developer Basic Rent" shall mean the amount set forth in a Lease as
"Developer Basic Rent."
"Developer Equity" shall mean a portion of the developer's fees
payable by a Lessor as set forth in each Construction Budget equal to 5% of
the Total Property Costs (as defined in the Lease) for a particular Property
or, if there is no Developer with respect to a Project Loan, the equity, in
the amount of 5% of the total funds required by the Lessor on a Borrowing
Date, contributed by the Lessor simultaneously with the funding of such
Project Loan.
"Developer Yield" shall mean 12% of Developer Equity, payable as
Developer Basic Rent under the Lease.
"Development Agency Agreement" shall mean the Development Agency
Agreement, dated as of the date hereof between Borrower and the Developer,
pursuant to which the Developer agrees to assume all of the obligations of
Borrower under the Development Agreement.
"Development Agreement" shall mean the Development Agreement, dated
as of the date hereof between Borrower and Lessee, providing for the
construction and development of the Property.
"Development Documents" shall mean the collective reference to the
Architect's Agreement, the Development Agreement, the Development Agency
Agreement, the Plans and Specifications and the Permits.
"Dollar, Dollars, U.S. Dollars" and the symbol "$" shall mean lawful
money of the United States of America.
"Environmental Laws" shall mean all federal, state, local and
foreign Laws and regulations, including permits, licenses, authorizations,
bonds, orders, judgments, consent decrees issued, or entered into, pursuant
thereto, relating to pollution or protection of human health or the
environment or employee safety in the work place.
"Event of Default" shall mean any of the events specified in the
"Events of Default" subsection, provided that any requirement for the giving
of notice, the lapse of time, or both, or any other condition, has been
satisfied.
"Excepted Payments" shall mean:
(a) all indemnity payments (including indemnity payments
made pursuant to Section 13 of the Participation Agreement), whether made by
adjustment to Developer Basic Rent or otherwise, to which Lender, the Trust
Company, the Investor, or any of their respective Affiliates, agents,
officers, directors or employees is entitled;
(b) any amounts (other than Project Loan Basic Rent,
Termination Value, or Purchase Option Price) payable under any Operative
Agreement to reimburse Lender, the Trust Company, the Investor, or any of
their respective Affiliates (including the reasonable expenses of Lender, the
Trust Company, the Investor, or any of their Affiliates incurred in
connection with any such payment) for performing or complying with any of the
obligations of any of Lessees under and as permitted by any Operative
Agreement;
(c) any amount payable to the Investor by any transferee of
the interest of the Investor as the purchase price of the Investor's interest
in the Trust Estate (or a portion thereof);
(d) any insurance proceeds (or payments with respect to
risks self-insured or policy deductibles) under liability policies other than
such proceeds or payments payable to the Agent;
(e) any insurance proceeds under policies maintained by
Lender, the Trust Company, or the Investor other than such proceeds or
payments payable to the Agent;
(f) Transaction Expenses or other amounts or expenses paid
or payable to or for the benefit of Lender, the Trust Company or the
Investor;
(g) any payments in respect of interest to the extent
attributable to payments referred to in clauses (a) through (f) above; and
(h) any rights of the Investor, Lender, or the Trust
Company to demand, collect, ▇▇▇ for or otherwise receive and enforce payment
of any of the foregoing amounts.
"Excess Proceeds" shall mean the excess, if any, of the aggregate of
all awards, compensation or insurance proceeds payable in connection with a
Casualty or Condemnation over the Termination Value paid by Lessee pursuant
to Article XVII of the Lease with respect to such Casualty or Condemnation.
"Excess Sale Proceeds" shall have the meaning specified in Section
9.1(b)(iv).
"Fixtures" shall mean all fixtures relating to the Improvements,
including all components thereof, located in or on the Improvements, together
with all replacements, modifications, alterations and additions thereto.
"Force Majeure Delay" shall mean any cause or event which is beyond
the reasonable control and not due to the fault or negligence of Borrower,
which delays, prevents or prohibits the Developer's construction of the
Improvements including without limitation, acts of God or the elements, fire,
strikes, labor disputes, delays in delivery of material and disruption of
shipping; provided, however, any such cause or event shall be deemed not to
be a Force Majeure Delay if Borrower shall fail to give Lender written notice
at the beginning of such delay as required under the Development Agreement.
"GAAP" shall mean generally accepted accounting principles as are in
effect from time to time.
"Governmental Authority" shall mean the United States of America,
any state and any municipality, local government or other political
subdivision thereof and any agency, department, bureau, board, commission or
other instrumentality or any of them, now existing or subsequently created.
"Improvements" shall mean the improvements existing on the Land and
all improvements to be constructed on the Land and certain ancillary off-site
improvements, if any, to be constructed outside the Land, each in accordance
with the Plans and Specifications and the Development Agreement.
"Indebtedness" shall mean as to any Person at a particular time, (a)
indebtedness for borrowed money or for the deferred purchase price of
property or services in respect of which such Person is liable, contingently
or otherwise, as obligor, guarantor or otherwise and (b) obligations under
leases which shall have been or should be, in accordance with GAAP, recorded
as capital leases in respect of which obligations such Person is liable,
contingently or otherwise, or in respect of which obligations such Person
assures a creditor against loss.
"Independent Director" shall mean a Person which is a director among
the board of directors of the managing member or general partner, as
applicable, of Borrower which is reasonably satisfactory to Lenders who shall
not have been at the time of such individual's appointment or at any time
thereafter, and may not have been at any time during the preceding two years
(i) a shareholder of, or an officer, director, partner or employee of,
Borrower or any of its shareholders, subsidiaries or affiliates, (ii) a
substantial creditor, customer of, or supplier to, Borrower or any of its
shareholders, subsidiaries or affiliates, (iii) a Person or other entity
controlling or under common control with any such shareholder, partner,
supplier or customer, or (iv) a member of the immediately family of any such
shareholder, officer, director, partner, employee, supplier or customer. As
used herein, the term "control" means the possession, directly or indirectly,
of the power to direct or cause the direction of the management and policies
of a Person or entity, whether through ownership of voting securities, by
contract or otherwise.
"Insurance Requirements" shall mean all terms and conditions of any
insurance policy either required by the Lease to be maintained by Lessee or
required by the Development Agency Agreement to be maintained by the
Developer, and all requirements of the issuer of any such policy.
"Interest Capitalization Termination Date" shall mean the date which
occurs 24 months subsequent to the Property Closing Date.
"Interest Payment Date" shall mean each date specified for the
payment of interest in Section 3.2.
"Investor" shall mean ▇▇▇ Project Funding Corp. I., a Delaware
corporation.
"Land" shall have the meaning specified in the Preliminary Statement.
"Law" shall mean any law (including common law), constitution,
statute, treaty, regulation, rule, ordinance, opinion, release, ruling,
order, injunction, writ, decree or award of any Official Body.
"Lease" shall mean the Lease, dated as of the date hereof, between
Lessee and Borrower with respect to the Property, as the same may be
supplemented by a Lease Supplement.
"Lease Event of Default" shall have the meaning given to such term
in Section 18.1 of the Lease.
"Lease Supplement" shall have the meaning given to such term in
Section 2.1 of the Lease, if applicable.
"Legal Requirements" shall mean all present and future laws,
statutes, codes, ordinances, orders, judgments, decrees, injunctions, rules,
regulations and requirements of every Governmental Authority having
jurisdiction over the Land, the Improvements or Borrower, and all covenants,
restrictions and conditions now or in the future applicable to the Land or
the Improvements.
"Lessee" shall mean Borders, Inc., a Colorado corporation.
"Lessor Liens" shall mean any Lien, true lease or sublease or
disposition of title arising as a result of (a) any claim against the Lessor
or the Developer, (b) any act or omission of the Lessor or the Developer
which is not required by the Project Loan Documents or is in violation of any
of the terms of the Project Loan Documents, (c) any claim against the Lessor
or the Developer with respect to the Property against which Lessee is not
required to indemnify Lessor or the Developer or (d) any claim against the
Lessor or the Developer arising out of any transfer by the Lessor of all or
any portion of the interest of the Lessor in the Property, other than the
transfer of title to or possession of the Property by Lessor pursuant to and
in accordance with the Lease or the Project Loan Agreement or pursuant to the
exercise of the remedies set forth in Article XVIII of the Lease.
"Lien" shall mean any mortgage, deed of trust, pledge, lien,
security interest, charge or other encumbrance or security arrangement of any
nature whatsoever, whether voluntarily or involuntarily given, including any
conditional sale or title retention arrangement, and any assignment, deposit
arrangement or lease intended as, or having the effect of, security.
"Maturity Date" shall mean October 16, 2002, as such date may be
extended pursuant to the Credit Agreement.
"Modifications" shall have the meaning specified in Section 12.1 of
the Lease.
"Mortgage" shall mean the Mortgage or Deed of Trust, as applicable,
dated as of the date hereof, made by Borrower in favor of Lender.
"Net Sale Proceeds" shall have the meaning specified in Section
9.1(b)(iv).
"Obligation" shall mean any obligation or liability of Borrower to
Lender, however created, arising or evidenced, whether direct or indirect,
absolute or contingent, now or hereafter existing, or due or to become due,
under or in connection with this Agreement or any other Project Loan
Document.
"Official Body" shall mean any national, federal, state, local or
other government or political subdivision or any agency, authority, bureau,
central bank, commission, department or instrumentality of either, or any
court, tribunal, grand jury or arbitrator, in each case whether foreign or
domestic.
"Operative Agreements" shall have the meaning assigned to such term
in the Lease.
"Organizational Certificate of Borrower" shall mean the certificate
executed by Borrower and delivered to Lender at the time of execution and
delivery of this Agreement by Borrower.
"Outside Completion Date" shall mean a date one month prior to the
Maturity Date.
"Permits" shall mean all consents, licenses and building permits
required for construction, completion, occupancy and operation of the
Improvements in accordance with all Legal Requirements affecting the
Property.
"Permitted Exceptions" shall mean those exceptions to title of the
Property set forth in the mortgagee title insurance policy issued to Lender
by the Title Company.
"Person" shall mean an individual, partnership, corporation,
business trust, joint stock company, limited liability company, trust,
unincorporated association, joint venture, Governmental Authority or other
entity of whatever nature.
"Plans and Specifications" shall mean the plans and specifications
for the construction of the Improvements, including, without limitation,
installation of curbs, sidewalks, gutters, landscaping, utility connections
(whether located on or off the Land) and all fixtures and equipment necessary
for construction, operation and occupancy of the Improvements, prepared or to
be prepared by the Architect, and approved in writing by Lender, as such
plans and specifications may be amended, supplemented or otherwise modified
from time to time with Lender's prior written approval.
"Principal Office" shall mean the main lending office of Bankers
Trust Company in New York, New York.
"Project Cost" shall mean the cost to the Lessor to construct any
Improvements, Fixtures or Modifications to be used on the Property in
accordance with the Plans and Specifications and the Operative Agreements.
"Project Loan" shall have the meaning set forth in the Preliminary
Statement.
"Project Loan Advance" shall mean each disbursement of the Project
Loan pursuant to Section 2.6 hereof.
"Project Loan Basic Rent" shall mean an amount equal to the interest
due on the Project Loan on any Specified Interest Payment Date pursuant to
the Project Loan Agreement.
"Project Loan Commitment" shall mean Lender's obligation to advance
the Project Loan to Borrower in accordance with the terms of this Agreement.
"Project Loan Documents" shall mean the collective reference to this
Agreement, the Project Loan Note, the Security Documents and all other
documents and instruments from time to time evidencing or securing the
Project Loan.
"Project Loan Note" shall have the meaning specified in Section 2.7.
"Property" shall mean the collective reference to the Land and the
Improvements.
"Property Acquisition Cost" shall mean the cost to Lessor to
purchase the Property.
"Property Closing Date" shall mean each date on which a Lessor
purchases or ground leases the Property.
"Purchase Option" shall have the meaning given to such term in
Section 21.1 of the Lease or in the Three Party Agreement.
"Regulated Substances" shall mean any substance, including any
solid, liquid, semisolid, gaseous, thermal, thoriated or radioactive
material, refuse, garbage, wastes, chemicals, petroleum products,
by-products, co products, impurities, dust, scrap, heavy metals, any
substance defined as a "hazardous substance," "pollutant," "pollution,"
"contaminant," "hazardous or toxic substance," "extremely hazardous
substance," "toxic chemical," "toxic waste," "hazardous waste," "industrial
waste," "residual waste," "solid waste," "municipal waste," "mixed waste,"
"infectious waste," "chemotherapeutic waste," "medical waste," "regulated
substance" or any related materials, substances or wastes as now or hereafter
defined pursuant to any Environmental Laws, the generation, manufacture,
extraction, processing, distribution, treatment, storage, disposal,
transport, recycling, reclamation, use, reuse, spilling, leaking, dumping,
injection, pumping, leaching, emptying, discharge, escape, release or other
management or mismanagement of which is regulated by the Environmental Laws.
"Rent" shall have the meaning given to such term in Section 3.4 of
the Lease.
"Requisition" shall have the meaning specified in Section 2.5.
"Responsible Officer" shall mean ▇▇▇▇▇▇▇ Agree, or such other
individual as shall be named by a Responsible Officer by notice to Lender.
"Security Documents" shall mean the collective reference to the
Mortgage, the Assignment of Lease and consent thereto, the Completion
Guaranty, the Assignment of Development Agency Agreement and the consent
thereto and all other documents from time to time securing the Indebtedness
evidenced by the Project Loan Note.
"SPC Member" shall have the meaning described in Section 5.12.
"Subsidiary" of any Person shall mean any corporation, partnership,
joint venture, trust or estate of which (or in which) more than 50% of:
(i) the outstanding capital stock having voting power to elect
a majority of the Board of Directors of such corporation
(irrespective of whether at the time capital stock of any
other class or classes of such corporation shall or might
having voting power upon the occurrence of any
contingency),
(ii) the interest in the capital or profits of such partnership
or joint venture, or
(iii) the beneficial interest of such trust or estate,
is at the time directly or indirectly owned by such Person, by such Person
and one or more of its Subsidiaries or by one or more of such Person's
Subsidiaries.
"Taxes" shall have the meaning given to such term in the Lease.
"Three Party Agreement" shall mean that certain agreement of even
date herewith entitled "Three Party Agreement" and executed by Agree Limited
Partnership, a Delaware limited partnership, Borrower and Lessee.
"Title Company" shall mean Chicago Title Insurance Company, together
with such reinsurers or coinsurers of such title company or companies, or
such other title companies as may be approved by Lender.
"Total Property Costs" shall mean the sum of Project Cost and
Property Acquisition Cost.
"Transaction Expenses" shall mean all costs and expenses incurred in
connection with the preparation, execution and delivery of the Operative
Agreements and the transactions contemplated by the Operative Agreements
including:
(a) the reasonable fees, out-of-pocket expenses and
disbursements of counsel in negotiating the terms of the Operative Agreements
and the other transaction documents, preparing for the closings under, and
rendering opinions in connection with, such transactions and in rendering
other services customary for counsel representing parties to transactions of
the types involved in the transactions contemplated by the Operative
Agreements;
(b) any other reasonable fee, out-of-pocket expenses,
disbursement or cost of any party to the Operative Agreements or any of the
other transaction documents; and
(c) any and all Taxes and fees incurred in recording or
filing any Operative Agreement or any other transaction document, any deed,
declaration, mortgage, security agreement, notice or financing statement with
any public office, registry or governmental agency in connection with the
transactions contemplated by the Operative Agreements.
1.2 Construction. Unless the context of this Agreement otherwise
clearly requires, the following rules of construction shall apply to this
Agreement and each of the other Project Loan Documents:
(a) references to the plural include the singular, the
plural, the part and the whole; "or" has the inclusive meaning represented by
the phrase "and/or," and "including" has the meaning represented by the
phrase "including without limitation";
(b) references to "determination" of or by Lender shall be
deemed to include good faith estimates by Lender (in the case of quantitative
determinations) and good faith beliefs by Lender (in the case of qualitative
determinations) and such determination shall be conclusive absent manifest
error;
(c) whenever Lender is granted the right herein to act in
its sole discretion or to grant or withhold consent such right shall be
exercised in good faith;
(d) the words "hereof," "herein," "hereunder," "hereto" and
similar terms in this Agreement or any other Project Loan Document refers to
this Agreement or such other Project Loan Document as a whole and not to any
particular provision of this Agreement or such other Project Loan Document;
(e) the section and other headings contained in this
Agreement or such other Project Loan Document and the Table of Contents
preceding this Agreement or such other Project Loan Document are for
reference purposes only and shall not control or affect the construction of
this Agreement or such other Project Loan Document or the interpretation
thereof in any respect;
(f) article, section, subsection, clause, schedule and
exhibit references are to this Agreement or other Project Loan Document, as
the case may be, unless otherwise specified;
(g) reference to any Person includes such Person's
successors and assigns but, if applicable, only if such successors and
assigns are permitted by this Agreement or other Project Loan Document, as
the case may be, and reference to a Person in a particular capacity excludes
such Person in any other capacity;
(h) reference to any agreement (including this Agreement
and any other Project Loan Document together with the schedules and exhibits
hereto or thereto), document or instrument means such agreement, document or
instrument as amended, modified, replaced, substituted for, superseded or
restated;
(i) relative to the determination of any period of time,
"from" means "from and including," "to" means "to but excluding" and
"through" means "through and including"; and
(j) references to "shall" and "will" are intended to have
the same meaning.
1.3 Accounting Principles. Except as otherwise provided in this
Agreement, all computations and determinations as to accounting or financial
matters and all financial statements to be delivered pursuant to this
Agreement shall be made and prepared in accordance with GAAP (including
principles of consolidation where appropriate), and all accounting or
financial terms shall have the meanings ascribed to such terms by GAAP;
provided, that if any change in GAAP or the application thereof occurs
hereafter, or if Lessee adopts a change to its accounting principles or
methods with the agreement of its independent certified public accountants,
and such change results in a change in the calculation of any financial
covenant or restriction set forth herein, then the parties hereto agree to
enter into and diligently pursue negotiations in order to amend such
financial covenant or restriction so as to equitably reflect such change,
with the desired result that the criteria for evaluating the financial
condition and results of operations of Lessee shall be the same after such
change as if such change had not been made. Pending the resolution of any
such negotiations, Lessee agrees to provide to Lender such unaudited
financial information and pro forma statements using the accounting methods
and principles used in the preparation of the audited financial statements
for the fiscal year ended January 26, 1997, as are necessary to enable Lender
to test any financial covenants contained herein.
SECTION 2. THE PROJECT LOAN
2.1 Project Loan Commitment. Subject to the terms and conditions of
this Agreement and relying upon the representations and warranties herein set
forth, Lender agrees to make the Project Loan to Borrower from time to time
on any Borrowing Date on or after the date hereof to, but not including, the
day which is one month prior to the Maturity Date in an aggregate principal
amount not to exceed at any one time the Project Loan Commitment.
2.2 Determination of Amounts of Project Loan Advances.
(a) Disbursements for costs of acquiring the Land and for
costs of developing, constructing and equipping the Improvements included in
the Construction Budget, shall be made as such costs are incurred in such
amounts as shall be determined by Lender, based upon certifications of
Borrower and the Consulting Professional and such other evidence as may be
required by Lender, less a retention of 10% of the costs attributable to
construction of the Improvements until the Improvements have been completed;
provided, however, that after 50% of the work of constructing the
Improvements has been completed, Lender, with Lessee's consent, may determine
that satisfactory progress is being made and may disburse the full amount of
such costs as such costs are incurred or may impose a reduced retention; and
provided further than when the Improvements or any part of the Improvements
identified as a separate line item on the Construction Budget have been
Completed, Lender, with Lessee's consent, may release and disburse that
portion of the retention with respect to such line item which may be
determined by Lender to be in excess of the requirements for Lender's
protection. Upon final completion of the work performed by any subcontractor
(as determined by Lender in its sole discretion), Lender shall release that
portion of the retention allocated to the work performed by such
subcontractor in accordance with the Construction Budget.
(b) Disbursements for any other costs related to the
Property included in the Construction Budget shall be made as such costs are
incurred, in such amounts as shall be determined by Lender, based upon
certifications of Borrower and such other evidence as may be required by
Lender.
2.3 Construction Budget Evaluation. If Lender determines at any time
that the portion of the Available Project Loan Commitment allocated to any
line item of the Construction Budget or otherwise is not sufficient to pay
the cost of completing construction of such line item or the Improvements, or
in the case of the line item for interest, to pay interest on the Project
Loan during the Construction Period (any such deficiency, a "Construction
Budget Deficit"), Lender may, in its sole discretion, stop making Project
Loan Advances and Borrower shall deposit with Lender additional funds from
some other source in an amount equal to the Construction Budget Deficit. Sums
so deposited with Lender shall be applied to pay costs of any line item or
line items as to which the Construction Budget Deficit exists before Lender
advances proceeds of the Project Loan to pay such costs.
2.4 Reduction of Project Loan Commitment. So long as no Construction
Budget Deficit occurs as a result thereof, Borrower shall have the right at
any time and from time to time upon five (5) Business Days' prior written
notice to Lender to permanently reduce or to terminate the Project Loan
Commitment without penalty or premium (except for any breakage fees payable
under the Credit Agreement resulting from such reduction or termination)
provided that any such reduction or termination shall be accompanied by
prepayment of the Project Loan to the extent necessary to reduce the
outstanding amount of Project Loan Advances to an amount equal to or less
than the Project Loan Commitment, as so reduced, together with the full
amount of interest and fees accrued on the principal sum to be prepaid.
2.5 Project Loan Advance Requests.
(a) Except as otherwise provided herein, Borrower may on
the fifteenth or thirtieth day of each calendar month or on such other dates
as permitted by Lessee (or, if such days are not Business Days, on the next
succeeding Business Day) prior to the date which is one month prior to the
Maturity Date request Lender to make Project Loan Advances by delivering to
Lender, not later than 10:00 a.m. Eastern Standard time (i) ten (10) Business
Days prior to the proposed Borrowing Date with respect to (A) the initial
advance of a Project Loan or (B) any other advance of a Project Loan where
Lessee has not waived certain conditions precedent to such Project Loan
Advance pursuant to Section 11.2 to the Participation Agreement or (ii) two
(2) Business Days prior to the proposed Borrowing Date with respect to any
Project Loan Advance (other than an Acquisition Advance) where Lessee has
waived the conditions precedent to such Project Loan Advance pursuant to
Section 11.2 to the Participation Agreement, a duly completed request
therefor in form acceptable to Lender or a request by telephone immediately
confirmed in writing by letter, facsimile or telex in such form (each, a
"Requisition"), it being understood that Lender may rely on the authority of
any individual making such a telephonic request without the necessity of
receipt of such written confirmation. Each Requisition shall be irrevocable
and shall specify (i) the proposed Borrowing Date and (ii) the aggregate
amount of the proposed Project Loan Advance which shall not be less than
$50,000, except for the last Requisition, which may be in an amount equal to
the balance of the Project Loan.
(b) Borrower acknowledges and agrees that Lessee shall make
all requests and make all other decisions under this Agreement on behalf but
with the consent of Borrower. Borrower further acknowledges and agrees that
the Agent shall have the authority to make all decisions, take all actions
and receive all payments, on behalf of Lender under this Agreement.
2.6 Project Loan Advances. Lender shall remit the principal amount
of the Project Loan Advance to be made to Borrower in U.S. Dollars and
immediately available funds at the Principal Office prior to 12:00 (noon)
Eastern Standard time on the Borrowing Date.
2.7 Notes. The Project Loan is evidenced by a promissory note of
Borrower dated as of the date of this Agreement (the "Project Loan Note"), in
a principal amount equal to the Project Loan Commitment. Lender is hereby
authorized to record the date and amount of each Project Loan Advance made by
Lender, each continuation thereof, the date and amount of each payment or
prepayment of principal thereof on the schedule annexed to and constituting a
part of the Project Loan Note, and any such recordation shall constitute
prima facie evidence of the accuracy of the information so recorded,
provided, that the failure to make any such recordation or any error in such
recordation shall not affect Borrower's obligations hereunder or under the
Project Loan Note.
2.8 Interest Rate on Project Loan Advances. Borrower shall pay
interest in respect of the outstanding unpaid principal amount of the Project
Loan at the Credit Agreement Interest Rate.
2.9 Maximum Interest Rate. If at any time the designated rate
applicable to the Project Loan made by Lender exceeds the highest lawful
rate, the rate of interest on the Project Loan shall be limited to Lender's
highest lawful rate.
2.10 Use of Proceeds. The proceeds of the Project Loan shall be used
by Borrower only for payment of costs specified in the Construction Budget
and for the acquisition of the Property.
2.11 Advances to Pay Interest. During the Construction Period, on
each date which is one Business Day prior to any Interest Payment Date
Borrower shall be deemed to have requested a borrowing pursuant to Section
2.5 in an amount equal to the aggregate amount of Allocated Interest due and
payable on such date with respect to the Property. Three Business Days prior
to such Interest Payment Date, Lessee, as agent for Borrower, shall deliver
to Lender a notice indicating the amount of such Allocated Interest. The
Borrowing Date with respect to any such borrowing shall be the applicable
Interest Payment Date (provided, that the making of an advance of the Project
Loan pursuant to such borrowing shall be subject to satisfaction of the
applicable conditions precedent set forth in Section 7 and Section 8, as
applicable) and the proceeds of such borrowing shall be deemed to be applied
to pay such Allocated Interest. Lender shall record the information relating
to such borrowing to pay Allocated Interest on the schedule annexed to and
constituting part of its Project Loan Note.
SECTION 3. PAYMENTS
3.1 Payments. All payments and prepayments to be made in respect of
principal, interest, fees or other amounts due from Borrower hereunder shall
be payable prior to 2:00 p.m. (Eastern Standard time) on the Interest Payment
Date without presentment, demand, protest or notice of any kind, all of which
are hereby expressly waived by Borrower, and without setoff, counterclaim or
other deduction of any nature, and an action therefor shall immediately
accrue. Such payments shall be made to Lender at the Principal Office in U.S.
Dollars and in immediately available funds. Lender's statement of account,
ledger or other relevant record shall, in the absence of manifest error, be
conclusive as the statement of the amount of principal of and interest on the
Project Loan and other amounts owing under this Agreement and shall be deemed
an "account stated." All Project Loan Advances outstanding on the Maturity
Date shall be due and payable in full on the Maturity Date.
3.2 Interest Payment Dates. Interest on any portion of the Project
Loan shall be due and payable in arrears on the last Business Day of each
March, June, September and December after the date hereof and on the Maturity
Date or upon acceleration of the indebtedness evidenced by the Project Loan
Note. Interest on prepayments of principal under Section 3.3 shall be paid on
the date such prepayment is due. Interest on the principal amount of the
Project Loan shall be due and payable on demand after such principal amount
becomes due and payable (whether on the stated maturity date, upon
acceleration or otherwise).
3.3 Prepayments.
(a) Optional Prepayments. Borrower shall have the right at
its option from time to time, with the written consent of Lessee, to prepay
the Project Loan in whole or part without premium or penalty on the date
specified in a notice by Borrower pursuant to this subsection; provided,
however, that if Lessee is not in Default of its Obligations under the
Operative Agreements beyond any applicable cure period, Borrower shall not
prepay the Project Loan without the prior written consent of Lessee. Whenever
Borrower desires to prepay any part of the Project Loan, Borrower shall, with
the written consent of Lessee, provide a prepayment notice to Lender at least
one (1) Business Day prior to the date of prepayment of Project Loan setting
forth the following information: (i) the date, which shall be a Business Day,
on which the proposed prepayment is to be made; and (ii) the total principal
amount of such prepayment, which shall not be less than Twenty-Five Thousand
Dollars ($25,000). All prepayment notices shall be irrevocable. The principal
amount of the Project Loan for which a prepayment notice is given, together
with interest on such principal amount, shall be due and payable on the date
specified in such prepayment notice as the date on which the proposed
prepayment is to be made.
(b) Mandatory Prepayments.
(i) If on any date Borrower shall receive any
payment which is the proceeds of any
title insurance policy (excluding any
payments in respect thereof which are
payable to Lessee in accordance with the
Lease), Borrower shall prepay the Project
Loan on such date in accordance with
Section 9.1(b).
(ii) Intentionally Deleted.
(iii) The Borrower shall prepay the Project
Loan in full on any date that the
Borrower shall receive any amount which
represents proceeds of a payment by
Lessee in respect of (A) the Termination
Value in connection with the delivery of
a Termination Notice; (B) the
Satisfactions Payment required by Section
21(e) of the Lease; (C) a sale of the
Property pursuant to Article XXI or
Article XXII of the Lease; (D) a sale of
the Property pursuant to the terms of the
Three Party Agreement; or (E) Lessor
Financing or Take-Out Financing provided
to the Lessor pursuant to the provisions
of the Three Party Agreement.
(iv) On any date on which the Lessor shall
receive any payment in respect of Excess
Proceeds, Borrower shall prepay the
Project Loan (to the extent not already
paid in full) in accordance with Section
9.1(b)(viii).
(v) Amounts prepaid on account of the Project
Loan may not be reborrowed.
3.4 Indemnity. Borrower covenants to indemnify Lender and hold
Lender harmless from and against all costs, losses and expenses incurred by
Lender under the Credit Agreement occasioned by a default by Borrower under
this Agreement, including, without limitation, breakage costs caused by a
failure by Borrower to make payments hereunder when due.
SECTION 4. BORROWER REPRESENTATIONS AND WARRANTIES
In order to induce Lender to enter into this Agreement, and in order
to induce Lender to make the Project Loan to Borrower, Borrower represents
and warrants to Lender as follows:
4.1 Existence; Compliance with Law. Borrower (a) is duly organized,
validly existing and in good standing under the laws of the jurisdiction of
its organization, (b) has the power and authority, and the legal right, to
own and operate its property and to conduct the business in which it is
currently engaged, (c) is a limited liability company duly qualified as a
foreign limited liability company and in good standing under the law of the
jurisdiction in which the Property is located and (d) is in compliance with
all material Legal Requirements;
4.2 Power; Authorization; Enforceable Obligations. Borrower has the
power and authority, and the legal right, to make, deliver and perform the
Project Loan Documents to which it is a party and to borrow hereunder and has
taken all necessary action to authorize the borrowings on the terms and
conditions of this Agreement and the Project Loan Note and to authorize the
execution, delivery and performance of the Project Loan Documents to which it
is a party. No consent or authorization of, filing with, notice to or other
act by or in respect of, any Governmental Authority or any other Person is
required in connection with the borrowings hereunder or with the execution,
delivery, performance, validity or enforceability of the Project Loan
Documents to which Borrower is a party. This Agreement has been, and each
other Project Loan Document to which it is a party will be, duly executed and
delivered on behalf of Borrower. This Agreement constitutes, and each other
Project Loan Document to which it is a party when executed and delivered will
constitute, a legal, valid and binding obligation of Borrower enforceable
against Borrower in accordance with its terms, subject to the effects of
bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and
other similar laws relating to or affecting creditors' rights generally,
general equitable principles (whether considered in a proceeding in equity or
at law) and an implied covenant of good faith and fair dealing;
4.3 No Litigation. There is no action, suit or proceeding pending,
or to the best of Borrower's knowledge threatened, against or affecting
Borrower or the Property or that might have a materially adverse affect on
Borrower or the Property in any court, or before or by any Governmental
Authority, whether federal, state, county or municipal, which has not been
disclosed in writing to Lender;
4.4 Consents, Approvals, Authorizations, Etc. No consent, approval,
order or authorization of or registration, declaration or filing with any
Governmental Authority is required in connection with the valid execution and
delivery of the Project Loan Documents or the Development Documents or the
carrying out or performance of any of the transactions required or
contemplated by the Project Loan Documents or the Development Documents or,
if required, such consent, approval, order or authorization has been obtained
or such registration, declaration or filing has been accomplished, except as
has been previously disclosed to Lender or waived by Lessee with the consent
of Lender;
4.5 No Legal Bar. The execution, delivery and performance of the
Project Loan Documents and the Development Documents, the borrowings under
this Agreement and the use of the proceeds of the Project Loan will not
violate any Legal Requirement or any Contractual Obligation of Borrower and
will not result in, or require, the creation or imposition of any Lien on any
of Borrower's properties or revenues pursuant to any Legal Requirement or
Contractual Obligation, except for the Lien of the Security Documents;
4.6 Compliance with Building Codes, Zoning Laws, Etc. Borrower has
no knowledge of any existing, probable or potential violations of any Legal
Requirement affecting the Land or the construction, use or occupancy of the
Improvements;
4.7 Ownership of Property; Liens. Borrower holds good record and
marketable title in fee simple to, or a valid leasehold interest in, the
Property, and good title to, or a valid leasehold interest in, all its other
property, and none of such property is subject to any Lien, other than a
Permitted Exception;
4.8 No Default. Borrower is not in default under or with respect to
any Contractual Obligation in any respect which could be materially adverse
to the business, operations, property or financial or other condition of
Borrower, or which could materially adversely affect the ability of Borrower
to perform its obligations under the Project Loan Documents or the
Development Documents. No Default or Event of Default has occurred and is
continuing;
4.9 Taxes. Borrower has filed or caused to be filed all tax returns
that are required to be filed, and has paid all taxes shown to be due and
payable on such returns or on any assessments made against Borrower or the
Property and all other taxes, fees or other charges imposed on Borrower or
the Property by any Governmental Authority (other than those taxes, the
amount or validity of which is being contested in good faith by appropriate
proceedings diligently prosecuted and with respect to which prior notice has
been given to Lender and reserves satisfactory to Lender have been provided
or a bond satisfactory to Lender has been posted); and no tax Liens have been
filed and no claims are being asserted with respect to any such taxes, fees
or other charges;
4.10 Availability of Utilities. All utility services and facilities
necessary for the construction of the Improvements without impediment or
delay (including, without limitation, gas, electrical, water and sewage
services and facilities) will be available at the boundaries of the Land upon
the commencement of construction and all utility services necessary for the
operation of the Improvements for their intended purposes will be available
at or within the boundaries of the Land when needed;
4.11 Permits, Etc. All Permits for the construction of the
Improvements required to the date that this representation is being made or
reaffirmed have been obtained and are in full force and effect;
4.12 Financial Statements. Any and all financial statements
delivered to Lender by or on behalf of Borrower are true and correct in all
material respects and fairly present the financial conditions of their
subjects as of their respective dates, no material adverse change has
occurred in the financial conditions reflected since their respective dates
and no additional Indebtedness has been incurred by their subjects since the
respective dates of the latest statements, other than the borrowings
contemplated by this Agreement or other Indebtedness which has been approved
by Lender in writing. No such financial statement or any certificate or
statement furnished to Lender by or on behalf of Borrower in connection with
the transactions contemplated by this Agreement, and no representation or
warranty in this Agreement, contains any untrue statement of a material fact
or omits to state a material fact necessary in order to make the statements
contained in such financial statements, certificates or other statements or
this Agreement not misleading;
4.13 Federal Regulations. No part of the proceeds of the Project
Loan will be used for "purchasing" or "carrying" any "margin stock" within
the respective meanings of each of the quoted terms under Regulation G or
Regulation U of the Board of Governors of the Federal Reserve System as now
and from time to time hereafter in effect. If requested by Lender, Borrower
will furnish to Lender a statement to the foregoing effect in conformity with
the requirements of FR Form G-1 or FR Form U-1 referred to in said Regulation
G or Regulation U, as the case may be;
4.14 Investment Company Act; Other Regulations. Borrower is not an
"investment company," or a company "controlled" by an "investment company,"
within the meaning of the Investment Company Act of 1940, as amended.
Borrower is not subject to regulation under any Federal or State statute or
regulation (other than Regulation X of the Board of Governors of the Federal
Reserve System) which limits its ability to incur Indebtedness;
4.15 Environmental Matters.
(a) The Property does not contain any Regulated Substances
in amounts or concentrations which (i) constitute or constituted a violation
of, or (ii) could give rise to liability under, any Environmental Law.
(b) The Property and all operations at the Property are in
compliance with all applicable Environmental Laws, and there is no
contamination at, under or about the Property or violation of any
Environmental Law with respect to the Property.
(c) Borrower has not received any notice of violation,
alleged violation, non-compliance, liability or potential liability regarding
environmental matters or compliance with Environmental Laws with regard to
the Property and Borrower does not have knowledge or reason to believe that
any such notice will be received or is being threatened.
(d) Regulated Substances have not been transported or
disposed of from the Property in violation of, or in a manner or to a
location which could reasonably be expected to give rise to liability under,
any Environmental Law, nor have any Regulated Substances been generated,
treated, stored or disposed of at, on or under the Property in violation of,
or in a manner that could reasonably be expected to give rise to liability
under, any applicable Environmental Law.
(e) No judicial proceeding or governmental or
administrative action is pending or, to the knowledge of Borrower,
threatened, under any Environmental Law to which Borrower is or will be named
as a party with respect to the Property nor are there any consent decrees or
other decrees, consent orders, administrative orders or other orders, or
other administrative or judicial requirements outstanding under any
Environmental Law with respect to the Property.
(f) There has been no release or threat of release of
Regulated Substances at or from the Property, or arising from or related to
the operations of Borrower in connection with the Property, in violation of
or in amounts or in a manner that could give rise to liability under any
Environmental Laws;
4.16 Regulation H. The Mortgage does not encumber improved real
property which is located in an area that has been identified by the
Secretary of Housing and Urban Development as an area having special flood
hazards and in which flood insurance has been made available under the
National Flood Insurance Act of 1968; and
4.17 No other Assets.
(a) Borrower does not now own and will not in the future
own any asset or property other than the Property and incidental property
necessary for the ownership or operation of the Property.
(b) Borrower has not made and will not in the future make
any loans or advances to any third party (including any affiliate or
constituent party, any Beneficial Owner or any affiliate of any constituent
party of Beneficial Owner), and shall not acquire obligations or securities
of its affiliates.
(c) Borrower is and will remain solvent and Borrower will
pay its debts and liabilities (including, as applicable, shared personnel and
overhead expenses) from its assets as the same shall become due.
SECTION 5. AFFIRMATIVE COVENANTS
Borrower agrees, unless otherwise consented to in writing by Lender,
that, so long as the Project Loan Commitment remains in effect or the Project
Loan Note remains outstanding and unpaid, Borrower shall:
5.1 Construction. Cause the Completion and equipping of the
Improvements to occur on or before the Outside Completion Date. The
Improvements shall be constructed and equipped in full compliance with the
Legal Requirements affecting the Property and all requirements of the
appropriate Board of Fire Underwriters or other similar body acting in and
for the locality in which the Property is situated;
5.2 Correction of Work. Upon demand of Lender, and at Borrower's
sole cost and expense, correct any structural defect in the Improvements, any
departure from the Plans and Specifications and any failure to comply with
applicable Legal Requirements;
5.3 No Encroachments. Construct the Improvements entirely on the
Land (other than certain off-site ancillary Improvements) and not encroach
upon or overhang any easement or right-of-way or the land of others (unless
such encroachment or overhang is consented to in writing by the owner of the
affected property). When erected the Improvements shall be wholly within any
building restriction lines, however established. Borrower shall furnish from
time to time evidence satisfactory to Lender of compliance with the foregoing
covenant, including, without limitation, a survey prepared by a registered
surveyor or engineer;
5.4 Certain Notices. Give notice to Lender promptly upon the
occurrence of:
(a) the receipt by Borrower of any notice given to Borrower
that a default by Borrower has occurred under the Lease or any of the
Development Documents;
(b) the giving by Borrower of any notice alleging that a
default has occurred under the Lease or any of the Development Documents;
(c) the receipt by Borrower of any notice given to Borrower
or with respect to the Property or the giving by Borrower of any notice which
alleges that any portion of construction or equipping or furnishing of the
Improvements does not comply with any Legal Requirement;
(d) any condition which results or is reasonably likely to
result in a Force Majeure Delay in completion of the Improvements;
(e) any Default or Event of Default;
(f) any (i) default or event of default under any
Contractual Obligation of Borrower or (ii) litigation, investigation or
proceeding which may exist at any time between Borrower and any Governmental
Authority; and
(g) any litigation or proceeding affecting Borrower in
which the amount involved is $100,000 or more and not covered by insurance or
in which injunctive or similar relief is sought;
Each notice pursuant to this subsection shall be accompanied by a statement
of a Responsible Officer setting forth details of the occurrence referred to
in such notice and stating what action Borrower proposes to take with respect
to such occurrence;
5.5 Indemnification. Indemnify Lender against any claims for
brokerage fees or commissions asserted in connection with the Project Loan
and to pay all expenses incurred by Lender in connection with the defense of
any action or proceeding brought to collect any such brokerage fees or
commissions;
5.6 Construction Schedule. As soon as reasonably available after
commencement of construction, provide Lender, at Borrower's expense, with a
critical path method schedule for completion of the construction and
equipping of the Improvements, which schedule shall be in form and substance
satisfactory to Lender;
5.7 Expenses.
(a) Pay or reimburse Lender for all expenses incurred by
Lender before and after the date of this Agreement with respect to any and
all transactions contemplated by this Agreement including, without
limitation, the preparation of any document reasonably required by Lender and
the enforcement of any of Lender's rights under this Agreement and the other
Project Loan Documents.
(b) If any action or proceeding is commenced by Lender,
including, without limitation, any action to foreclose the lien of the
Mortgage or to collect the Project Loan or enforce the Completion Guarantee
or to which Lender is made a party, or in which it becomes necessary to
defend or uphold the lien of the Mortgage, or in which Lender is served with
any legal process, discovery notice or subpoena relating to Lender's lending
to Borrower or accepting the Completion Guarantee, Borrower will reimburse
Lender for all expenses which have been or may be incurred by Lender arising
from or in connection with such action or proceeding;
5.8 Conduct of Business and Maintenance of Existence. Continue to
engage in business of the same general type as now conducted by it and
preserve, renew and keep in full force and effect its existence and take all
reasonable action to maintain all rights, privileges and franchises necessary
or desirable in the normal conduct of its business and comply with all
Contractual Obligations (including the Project Loan Documents, the Lease and
the Development Documents) and Legal Requirements;
5.9 Inspection of Property; Books and Records; Discussions. Keep
proper books of records and account in which full, true and correct entries
in conformity with GAAP and all Legal Requirements shall be made of all
dealings and transactions in relation to its business and activities; and
permit representatives of Lender to visit and inspect any of its properties
and examine and make abstracts from any of its books and records at any
reasonable time and as often as may reasonably be desired and to discuss the
business, operations, properties and financial and other condition of
Borrower with officers and employees of Borrower and with its independent
certified public accountants;
5.10 Compliance with Project Loan Documents. Borrower shall at all
times (a) observe and perform all of the covenants, conditions and
obligations required to be performed by it (whether in its capacity as Lessor
or otherwise) under each Project Loan Document and each Development Document
to which it is a party and (b) observe and perform, or cause to be observed
and performed, (i) all of the covenants, conditions and obligations of Lessee
under the Lease, even in the event that the Lease is terminated at stated
expiration, following a Lease Event of Default or otherwise and (ii) all of
the covenants, conditions and obligations of the Developer relating to the
construction of Improvements under the Development Agency Agreement;
provided, that the performance of any such obligation by Lessee during the
term of the Lease or by the Developer during the term of the Development
Agency Agreement, respectively, shall be deemed to satisfy such obligation on
the part of Borrower;
5.11 Further Assurances. At any time and from time to time, upon the
written request of Lender, and at the sole expense of Borrower, Borrower will
promptly and duly execute and deliver such further instruments and documents
and take such further action as Lender may reasonably request for the purpose
of obtaining or preserving the full benefits of this Agreement and the other
Project Loan Documents and of the rights and powers herein or therein
granted; and
5.12 Single Purpose Entity; Separateness.
(a) Borrower will not engage in any business other than the
ownership, management, leasing and operation of the Property and Borrower
will conduct and operate its business as presently conducted and operated.
(b) Borrower will not enter into any contract or agreement
with any affiliate of Borrower, any constituent party of Borrower, the holder
of any partnership or membership interest, any manager or the owner of any
beneficial interest in Borrower (each, a "Beneficial Owner") or any affiliate
of any constituent party or Beneficial Owner, except upon terms and
conditions that are intrinsically fair and substantially similar to those
that would be available on an arms-length basis with third parties other than
any such party.
(c) Borrower has done or caused to be done and will do all
things necessary to observe organizational formalities and preserve its
existence including, without limitation, the holding of such annual and other
meetings as are required by Borrower's organizational documents, and Borrower
will not, nor will Borrower permit any constituent party or Beneficial Owner
to amend, modify or otherwise change the partnership certificate, partnership
agreement, articles of incorporation and bylaws, trust certificate and
agreement or other organizational documents of Borrower or such constituent
party or Beneficial Owner, if such amendments would violate any provision of
the Project Loan Documents, without the prior written consent of Lender,
which consent shall not be unreasonably withheld, nor will Borrower permit
any constituent party or Beneficial Owner to amend, modify or otherwise
change the partnership certificate, partnership agreement, articles of
incorporation and bylaws, trust certificate and agreement or other
organizational documents of such constituent party or Beneficial Owner, if
such amendment, modification or change (i) would adversely affect the
bankruptcy remote nature of Borrower; or (ii) would adversely affect Lender's
interest in the Project Loan. Borrower shall deliver copies of minutes of
annual meetings of Borrower to Lender within thirty (30) days of its receipt
of written request therefor.
(d) Borrower will maintain books, records, financial
statements and bank accounts separate from those of its affiliates and any
constituent party and Borrower will file its own tax returns where required
by applicable code or regulation. Borrower shall maintain its books, records,
resolutions and agreements as official records.
(e) Borrower will be, and at all times will hold itself out
to the public as, a legal entity separate and distinct from any other entity
(including any Affiliate of Borrower, any constituent party of Borrower, any
Beneficial Owner or any Affiliate of any constituent party), and shall
conduct business in its own name and shall maintain and utilize separate
stationery, invoices and checks. Borrower shall correct any known or unknown
misunderstanding regarding its status as a separate entity and shall not
identify itself as a division or part of its Affiliates or any of its
Affiliates as a division or part of Borrower.
(f) Borrower will maintain adequate capital for the normal
obligations reasonably foreseeable in a business of its size and character
and in light of its contemplated business operations.
(g) Neither Borrower nor any constituent party will seek or
effect the liquidation, dissolution, winding up, consolidation or merger, in
whole or in part, of Borrower or the sale of all or substantially all of
Borrower's or any constituent party's assets.
(h) Borrower will not commingle the funds and other assets
of Borrower with those of any affiliate or constituent party, any Beneficial
Owner, or any affiliate of any constituent party or Beneficial Owner, or any
other Person.
(i) Borrower has and will maintain its assets in such a
manner that it will not be costly or difficult to segregate, ascertain or
identify its individual assets from those of any affiliate or constituent
party, any Beneficial Owner, or any affiliate of any constituent party or
Beneficial Owner, or any other Person.
(j) Borrower does not and will not hold itself out to be
responsible for the debts or obligations of any other Person.
(k) If Borrower is a limited liability company, partnership
or business trust, at least one manager, managing partner, general partner or
trustee (the "SPC Member") of Borrower shall itself be a limited liability
company or corporation the sole asset of which is its interest in Borrower
and which at all times has as one of its members or directors an individual
who qualifies as an Independent Director, the SPE Member will at all times
comply with each of the representations, warranties, and covenants contained
in this Section 5.12 as if such representation, warranty or covenant were
made, mutatis mutandis, directly by such SPC Member, the SPC Member and the
Beneficial Owner shall cause Borrower at all times to comply with each of the
representations, warranties, and covenants contained in this Section 5.12.
(l) Borrower shall not cause or permit the board of
directors of Borrower or the SPC Member, as applicable, to take any action
which, under the terms of any certificate of incorporation, by-laws,
operating agreement or any voting trust agreement with respect to any common
stock, requires the unanimous vote of the board of directors of Borrower or
the general partners or members of Borrower or the SPC Member, as applicable,
unless at the time of such action there shall be at least one member of the
board of directors of Borrower or the SPC Member, as applicable, who is an
Independent Director.
(m) Borrower has not incurred and will not incur any
indebtedness, secured or unsecured, direct or indirect, absolute or
contingent (including guaranteeing any obligation), other than (i) the
Project Loan or (ii) unsecured trade debt customarily payable within thirty
(30) days.
Borrower shall deliver a certificate to Lender within thirty (30)
days upon written request from Lender but not more frequently than on an
annual basis except for good cause shown, certifying as to its compliance
with each of the provisions of this Section 5.12.
SECTION 6. NEGATIVE COVENANTS
Borrower agrees that, so long as the Project Loan Commitment remains
in effect or the Project Loan Note remains outstanding and unpaid, Borrower
shall not:
6.1 Changes in Plans and Specifications. Modify or supplement the
Plans and Specifications in any material respect without the prior written
consent, as required, of all Governmental Authorities which previously have
approved the matters to be changed;
6.2 Change Orders. Direct or permit the performance of any work
pursuant to any revision (of whatever nature or form) of the Plans and
Specifications or any change orders or change bulletins or other instruments
or understandings without the consent of Lessee, and if such work would
result in a Construction Budget Deficit, the consent of Lender;
6.3 Changes in Agreements. Surrender, terminate, cancel, rescind or
supplement, alter, revise, modify or amend any of the Development Documents
or permit any such action to be taken;
6.4 Limitation on Liens. Create, incur, assume or suffer to exist
any Lien upon the Property except for:
(a) Liens for taxes not yet due or which are being
contested in good faith by appropriate proceedings, provided that adequate
reserves with respect thereto are maintained on the books of Borrower or
Lessee in conformity with GAAP;
(b) carriers', warehousemen's, mechanics', materialmen's,
repairmen's or other like Liens arising in the ordinary course of business
which are not overdue for a period of more than sixty (60) days or which are
being contested in good faith by appropriate proceedings;
(c) easements, rights-of-way, restrictions and other
similar encumbrances incurred in the ordinary course of business which, in
the aggregate, are not substantial in amount and which do not in any case
detract from the value of the Property or interfere with the ordinary conduct
of the business of Borrower or Lessee;
(d) Liens created pursuant to the Project Loan Documents;
and
(e) Permitted Exceptions;
6.5 Limitation on Contingent Obligations. Create, incur, assume or
suffer to exist any Contingent Obligations;
6.6 Other Activities. Conduct, transact or otherwise engage in, or
commit to transact, conduct or otherwise engage in, any business or
operations other than the entry into, and exercise of rights and performance
of obligations in respect of, the Project Loan Documents, the Lease and the
Development Documents and other activities incidental or related to the
foregoing;
6.7 Ownership of Properties, Indebtedness. Own, lease, manage or
otherwise operate any properties or assets other than in connection with the
activities described in Section 6.6, or incur, create, assume or suffer to
exist any Indebtedness or other consensual liabilities or financial
obligations other than as may be incurred, created or assumed or as may exist
in connection with the Project Loan and other obligations incurred by
Borrower hereunder;
6.8 Disposition of Assets. Convey, sell, lease, assign, transfer or
otherwise dispose of any of its property, business or assets, whether now
owned or hereafter acquired, except to the extent expressly contemplated by
the Project Loan Documents;
6.9 Discharge of Liens. Create or permit to exist at any time, and
will, at its own expense, promptly take such action as may be necessary duly
to discharge, or cause to be discharged, all Lessor Liens attributable to it,
provided, that Borrower shall not be required to discharge any Lessor Lien
while the same is being contested in good faith by appropriate proceedings
diligently prosecuted so long as such proceedings shall not involve any
material danger of impairment of any of the Liens contemplated by the
Security Documents or of the sale, forfeiture or loss of, and shall not
materially interfere with the disposition of, any Property or title thereto
or any interest therein or the payment of Rent; and
6.10 Change in Ownership. Amend or modify its organizational
documents or transfer its beneficial ownership to any other Person prior to
Completion except to Lessee or its designee. After Completion, Borrower may,
with Lessee's consent, transfer its beneficial interest to any other Person
subject, however, to such Person's compliance with Section 5.12.
SECTION 7. CONDITIONS PRECEDENT TO FIRST ADVANCE
Lender shall not be obligated to make the first advance of the
Project Loan proceeds until all of the conditions set forth in this Section 7
shall have been satisfied.
7.1 Closing Documents. Lender shall have received all the items set
forth in this subsection, in each case in form and substance satisfactory to
Lender:
(a) Taxes. Evidence that all past and current (if then due
and payable) taxes and assessments applicable to the Property or payable by
Borrower have been paid;
(b) Title Insurance Policy. A mortgagee's policy of title
insurance or satisfactory evidence of the Title Company's unconditional
obligation to issue such a policy, dated as the date of the first advance of
the Project Loan. Such policy shall (i) be in the amount of the Project Loan
(or the maximum amount that the title insurance company is permitted by law
to insure, whichever is lower); (ii) insure Lender that the Mortgage creates
a valid Lien on the Property, free and clear of all defects and encumbrances,
except for the Permitted Exceptions; (iii) provide full coverage against
mechanics' liens and against survey exceptions not specified as Permitted
Exceptions; (iv) contain a pending disbursements clause or endorsement in
form and substance satisfactory to Lender and a commitment of the Title
Company to provide notices of title continuation or endorsement sufficient to
enable Lender to determine that title to the Property is satisfactory prior
to Lender's making any subsequent advance of the Project Loan; and (v)
contain such other endorsements and affirmative coverage as Lender may
reasonably request. Lender shall be furnished with copies of all documents
that appear as exceptions in such policy or commitment;
(c) Payment of Title Insurance Premium. Evidence
satisfactory to Lender that all premiums in respect of such title insurance
policy have been paid or will be paid concurrently with the first advance of
the Project Loan;
(d) Survey. A survey of the Land (current to within thirty
(30) days of the date of the first advance of the Project Loan), certified to
Lender and the Title Company by an independent professional licensed land
surveyor satisfactory to Lender, which survey shall be made in accordance
with the Minimum Standard Detail Requirements for Land Title Surveys jointly
established and adopted by the American Title Association and the American
Congress on Surveying and Mapping in 1992. Without limiting the generality of
the foregoing, there shall be surveyed and shown on such survey the
following: (i) the locations of all buildings and other structures, if any,
on the Land and the established building setback lines; (ii) the lines and
the width of streets abutting the Land; (iii) all access and other easements
appurtenant to or necessary or desirable to the use of the Land; (iv) all
roadways, paths, driveways, easements, encroachments and overhanging
projections and similar encumbrances affecting the Land, whether recorded,
apparent from a physical inspection of the Land or otherwise known to the
surveyor; (v) any party walls with structures on adjoining property any
encroachments on any adjoining property by the building structures and
improvements on the Land; and (vi) if the Land is described by reference to a
filed map, a legend relating the survey to such map;
(e) Availability of Utilities. Letters from local utility
companies or Governmental Authorities stating, or such other evidence
satisfactory to Lender, showing that gas, electric power, sanitary and storm
sewers, water and all other utilities (i) that are necessary and required
during the Construction Period have been completed and/or will be available
in such a manner as to assure Lender that construction will not be impeded by
a lack of utilities and (ii) that are necessary for operation and occupancy
of the Improvements will be completed in such a manner and at such a time as
will assure the opening and operation of the Improvements on or before the
Outside Completion Date;
(f) Hazard Insurance. Policies or certificates of insurance
required by the Lease, accompanied by evidence of the payment of the premiums
for such policies, with mortgagee loss payable endorsements naming Lender as
loss payee;
(g) Flood Insurance. If requested by Lender, a policy of
flood insurance in an amount equal to the lesser of (i) the maximum limit of
coverage available under the National Flood Insurance Act of 1968, as
amended, and (ii) the amount of the Project Loan;
(h) Builder's Risk Insurance. Such builder's risk insurance
as may be required pursuant to the Development Agreement;
(i) Permits. All Permits issued prior to the date of the
Project Loan Advance;
(j) Soil and Geological Report. If requested by Lender, a
soil and geological report, including a summary of soil test borings issued
by a professional engineer satisfactory to Lender;
(k) Opinion of Counsel for Borrower and Lessee. An opinion
of counsel for Borrower and Lessee in form and substance satisfactory to
Lender;
(l) Development Documents. Certified copies of duly
executed counterparts of the Development Agreement, the Development Agency
Agreement and the Architect's Agreement;
(m) Plans and Specifications. A copy of the Plans and
Specifications, satisfactory in form and substance to Lender and Consulting
Professional;
(n) Cost Breakdown. A cost breakdown and schedule for
construction of the Improvements setting forth all items of costs and
expenses and estimating the construction trade schedules required to complete
the construction and equipping of the Improvements;
(o) Project Loan Documents. Duly executed copies of all
Project Loan Documents and a fully executed original Lease;
(p) Construction Budget. A certified copy of the
Construction Budget;
(q) Organizational Documentation. The Organizational
Certificate of Borrower, which shall include, if Borrower is a limited
partnership or a limited liability company, with respect to such entity:
(1) the partnership agreement or limited
liability company agreement, including
all amendments and attachments, certified
by a general partner or member;
(2) the partnership certificate or
certificate of formation, including all
amendments, certified by an official in
whose office it is filed or recorded;
(3) any certificates filed or recorded or
required to be filed or recorded by such
partnership or limited liability company
in the state of its formation and the
state where the Land is located in order
for it to do business in those states;
(4) any consents by other partners or members
required for the borrowing contemplated
by this Agreement and the execution,
delivery and performance of the Project
Loan Documents; and
(5) if requested by Lender, an acknowledgment
by each of the Partners or Members of his
or its continued membership in Borrower;
(r) Borrowing Certificate. A Borrowing Certificate, duly
executed by Borrower and Lessee.
7.2 Accounting. Lender shall have received and approved an
accounting of all expenditures for costs shown on the Construction Budget
incurred prior to the first advance of the Project Loan.
7.3 Representations and Warranties. The representations and
warranties which are contained in the Project Loan Documents or any
certificate, document or financial or other statement furnished under or in
connection with the Project Loan Documents, shall be correct on and as of the
date of the first advance as if made on and as of such date.
7.4 No Default or Event of Default. No Default or Event of Default
shall have occurred and be continuing on such date or after giving effect to
the advance to be made on such Borrowing Date.
7.5 Additional Matters. All other documents and legal matters in
connection with the transactions contemplated by this Agreement shall be
satisfactory in form and substance to Lender and its counsel.
7.6 Environmental Audit. Lender shall have received an Environmental
Audit in form and substance acceptable to Lender, provided that such
Environmental Audit shall be delivered to Lender not less than five (5)
Business Days prior to the Property Closing Date.
7.7 Developer Equity. Lender shall be satisfied that the Lessor
shall have contributed on the relevant Borrowing Date an amount equal to the
Developer Equity associated with such Project Loan Advance.
7.8 Acquisition of Property. Borrower will be using all or the
applicable portion of such proceeds to acquire fee title or a valid leasehold
interest in the Land.
SECTION 8. CONDITIONS PRECEDENT TO SUBSEQUENT ADVANCES
8.1 All Subsequent Advances. Lender shall not be obligated to make
any Project Loan Advance subsequent to the initial advance until all of the
conditions set forth in this subsection shall have been met to Lender's
satisfaction.
(a) Satisfactory Title. The Security Documents shall
constitute a valid lien on the Property for the full amount of the Project
Loan advanced to and including such date, free and clear of all Liens except
for Permitted Exceptions. Lender shall have been furnished with a notice of
title continuation or an endorsement to the title insurance policy issued to
Lender in connection with the first advance of the Project Loan, which
continuation or endorsement shall state that since the last disbursement of
the Project Loan there have been no changes in the state of title to the
Property.
(b) No Other Security Interests. All materials and fixtures
incorporated in the construction of the Improvements shall have been
purchased so that their absolute ownership shall have vested in Borrower
immediately upon delivery to the Land and Borrower shall have produced and
furnished, if required by Lender, the contracts, bills of sale or other
agreements under which title to such materials and fixtures is claimed.
(c) Statement of Expenditures. If requested by Lender,
Lender shall have received a statement of Borrower and any contractor or
subcontractor, in form and substance satisfactory to Lender, setting forth
the names, addresses and amounts due or to become due as well as the amounts
previously paid to every contractor, subcontractor, and supplier furnishing
materials for or performing labor on the construction of any part of the
Improvements.
(d) Representations and Warranties. The representations and
warranties contained in any of the Project Loan Documents or any certificate,
document or financial or other statement furnished under or in connection
with the Project Loan Documents, shall be correct on and as of the Borrowing
Date for such advance as if made on and as of such date.
(e) No Default or Event of Default. No Default or Event of
Default shall have occurred and be continuing on such date or result from the
advance to be made on such Borrowing Date; provided, however, if a Default or
an Event of Default has occurred under Sections 10.1(b), 10.1(d), 10.1(f) or
10.1(i), so long as no Lease Event of Default has occurred and is continuing,
Lender will continue to make Project Loan Advances to Borrower in accordance
with the terms and conditions of this Agreement; provided, further, however,
Lender shall not be obligated to make Project Loan Advances if such Default
or Event of Default threatens the lien priority of the Mortgage or the right
of Lender to receive payments of Rent under the Assignment of Lease.
(f) Construction Progress. In the case of advances to pay
costs of constructing and equipping of the Improvements, at Lender's option,
Lender shall have received and approved a draw request signed by the
Developer, satisfactory in form and substance to Lender, with appropriate
insertions, accompanied by true copies of unpaid invoices, receipted bills
and lien waivers, and such other supporting information as Lender may
request.
(g) Soft Costs. In the case of advances to pay the costs
included in the Construction Budget that are not among the costs described in
the preceding paragraph, Lender shall have received such evidence as it may
require that such costs have been properly incurred and are due and payable.
(h) Evidence of Compliance. All instruments relating to
each advance and all actions taken on or prior to each advance in connection
with the performance of the Project Loan Documents shall be satisfactory to
Lender, and Lender shall have been furnished with such documents, reports,
certificates, affidavits and other information, in form and substance
satisfactory to Lender, as Lender may require to evidence compliance with all
of the provisions of the other Project Loan Documents.
(i) Lien Waivers. Borrower shall have furnished to Lender
lien waivers in form and substance satisfactory to Lender from such
contractors, subcontractors, suppliers and materialmen as Lender may specify,
evidencing that they have been paid in full for all work performed or
materials supplied to the date of Borrower's request for such advance, except
for retentions provided for in this Agreement.
(j) Agreements. Each of the Development Documents and the
Lease shall be in full force and effect and there shall exist no uncured
default by any party under the Development Documents or the Lease (provided
that performance by Lessee under the Completion Guaranty shall be deemed for
the purposes of this subsection 8.1(j) to have cured any default under the
Development Documents or related default under the Lease).
(k) Damage or Injury. The Improvements shall not have been
materially damaged by fire or other casualty unless there shall have been
received, by Lender or a person approved by Lender, insurance proceeds
sufficient in the sole judgment of Lender and the Consulting Professional, to
effect satisfactory restoration and completion of the Improvements on or
before the Outside Completion Date.
(l) Taxes. If requested by Lender, Lender shall have
received evidence that all past and current (if then due and payable) taxes
and assessments applicable to the Property or payable by Borrower in
connection with the Property have been paid.
(m) Waived Conditions. If requested by Lender, all
conditions waived with respect to the initial advance or any subsequent
advance shall be met.
(n) Borrowing Certificate. Lender shall have received a
Borrowing Certificate dated the date of such advance.
(o) Cost Overruns. Lender shall have received a certificate
of the Developer, acknowledged by Lessee, indicating that the cost to
complete the construction of the Property in accordance with the Plans and
Specifications is expected to be less than or equal to 150% of the amounts
shown on the initial Construction Budget.
(p) Developer Equity. Lender shall be satisfied that the
Lessor shall have contributed on the relevant Borrowing Date an amount equal
to the Developer Equity associated with such Project Loan Advance.
8.2 Completion of Improvements. The Improvements shall not be deemed
completed for purposes of this Agreement until all of the conditions set
forth in this subsection shall have been satisfied.
(a) The Improvements shall have been completed in
accordance with the Plans and Specifications and the Development Agreement
and accepted by Lessee.
(b) Lender shall have received the following, in each case
in form and substance satisfactory to Lender:
(i) evidence of the approval by all
appropriate Governmental Authorities of
the Improvements as being complete as to
construction;
(ii) the certification of the Architect and of
any Consulting Professional that the
Improvements have been completed
substantially in accordance with the
Plans and Specifications, that direct
connection has been made to all
appropriate utility facilities and that
the Improvements are ready for occupancy;
and
(iii) a perimeter survey showing the completed
Improvements, all easements on and
appurtenant to the Property and the
location of access to the Land and all
utility and water easements directly
affecting the Land, with a certification
that the Improvements do not encroach on
any other property that no buildings,
other structures or appurtenances on
other property encroach on the Land and
that all set-back requirements have been
complied with.
SECTION 9. MATTERS RELATING TO PAYMENTS AND COLLATERAL
9.1 The Account.
(a) Lender shall establish an account (the "Account") into
which Lender shall deposit all payments, receipts and other consideration of
any kind whatsoever received by Lender pursuant to the Assignment of Lease or
otherwise.
(b) Except as otherwise provided in Section 9.2, payments
deposited from time to time in the Account shall be paid out as follows:
(i) An amount equal to any payment identified
by Lessee as Project Loan Basic Rent
shall be paid out of the Account by
Lender on the date received, and shall be
applied to the payment of the interest
then due and payable on the Project Loan
until such amounts are paid in full.
(ii) An amount equal to any payment identified
by Lessee as a payment which is the
proceeds of any title insurance policy
(excluding any payments in respect
thereof which are payable to Lessee in
accordance with the Lease) shall be paid
out of the Account by Lender promptly
after receipt, and shall be applied on
the date deposited in the Account, first,
to the payment of principal and interest
on the Project Loan until such amounts
are paid in full, second, to the payment
to Borrower of an amount equal to the
Developer Yield and the Developer Equity
until such amounts are paid in full and,
third, the remainder, if any, shall be
paid to such Person or Persons as
Borrower may designate.
(iii) An amount equal to any such payment
identified by Lessee as a payment in
respect of the Termination Value pursuant
to Section 17.1 of the Lease shall be
paid out of the Account by Lender
promptly after receipt, and shall be
applied on the date deposited in the
Account, first, to the payment of
principal and interest on the Project
Loan until such amounts are paid in full,
second, to the payment to Borrower of an
amount equal to the Developer Yield and
the Developer Equity until such amounts
are paid in full and, third, the
remainder, if any, shall be paid to
such Person or Persons as Borrower may
designate.
(iv) An amount equal to any such payment
identified by Lessee as proceeds of the
sale of any Property pursuant to Article
XXI of the Lease ("Net Sale Proceeds")
shall be paid out of the Account by
Lender promptly after receipt, and shall
be applied on the date deposited in the
Account, first, to the payment of the
principal of the Project Loan then
outstanding, second, to the payment to
Borrower of an amount not to exceed the
outstanding the Developer Equity, and,
third, the remainder of such amount
("Excess Sale Proceeds") shall be
deposited with Lender in escrow to secure
the obligations of Lessee and other
Lessees under other leases of real
property.
(v) An amount equal to any payment identified
by Lessee as the Maximum Residual
Guarantee Amount (as defined in the
Lease) shall be paid out of the Account
by Lender promptly after receipt, and
shall be applied on the date deposited in
the Account to the payment only of
principal of the Project Loan then
outstanding.
(vi) Intentionally Deleted.
(vii) An amount equal to any such payment
identified by Lessee as Supplemental Rent
(as defined in the Lease) (but, so long
as an Event of Default has not occurred
and is continuing, excluding all Excepted
Payments) shall be paid out of the
Account by Lender promptly after receipt,
and shall be applied on the date
deposited in the Account to the payment
of any amounts then owing to Lender.
(viii) An amount equal to any such payment
identified by the Lessor as Excess
Proceeds shall be paid out of the Account
by Lender promptly after receipt, and
shall be applied on the date deposited in
the Account to the payment of any amounts
then owing to Lender.
If Lender receives any payment in lieu of Basic Rent in any case or
proceeding arising under the United States Bankruptcy Code, then such payment
shall be deemed to be a payment on account of Basic Rent for the purpose of
this Section 9.1. In the event that Lessee shall fail to identify the nature
of any payment deposited by it in the Account, or Lender in its reasonable
judgment shall determine that the identification made by Lessee is incorrect
or inappropriate, the nature of such payment shall instead be identified by
Lender in its reasonable judgment and applied in the manner specified above;
provided, that in the event that Lender identifies such payment as an
Excepted Payment, such payment shall be paid out of the Account by Lender to
such Person or Persons as Borrower may designate.
(c) Upon payment in full of the Project Loan and all other
amounts owing by Borrower hereunder or under any other Project Loan Document
and termination of the Project Loan Commitment by Borrower, any moneys
remaining in the Account shall be paid to Borrower or such other Person or
Persons as Borrower may designate.
9.2 Proceeds of Collateral; Proceeds Remaining in Account.
(a) All moneys collected by Lender upon any sale or other
disposition of the Property (including all moneys realized from the exercise
of the Purchase Option and upon the exercise of remedies under the Mortgage),
together with all other moneys received by Lender in connection therewith
(except as otherwise specified in Section 9.1) and (b) all moneys contained
in the Account on the date of an acceleration or on the Maturity Date (if the
Project Loan has not then been repaid in full), or deposited in the Account
thereafter (except as otherwise specified in Section 9.1(c)), shall be
applied as follows:
First, to the payment of (x) any and all sums advanced by
Lender in order to preserve the Collateral or preserve its
security interest therein and (y) the expenses of retaking,
holding, preparing for sale or lease, selling or otherwise
disposing or realizing on the Collateral, or of any
exercise by Lender of its rights under the Project Loan
Documents, together with attorneys' fees and court costs;
Second, to the payment of the amounts then due and unpaid
for principal of, interest on, and any other amounts then
due and unpaid in respect of the Project Loan;
Third, to the payment to Borrower of the amounts then due
on account of the Developer Yield and an amount sufficient
to return the Developer Equity; and
Fourth, to the extent moneys remain after application
pursuant to clauses First through Third above, to Borrower
or to whomever may be lawfully entitled to receive such
surplus.
9.3 Certain Remedial Matters. Notwithstanding any other provision of
this Agreement or any other Project Loan Document:
(i) except during the continuance of an Event
of Default, Borrower shall, at all times
to the exclusion of Lender, receive all
rights to Excepted Payments due to
Borrower and to demand, collect or
commence an action at law to obtain such
payments and to enforce any judgment with
respect thereto whether against Lessee,
Lender or any other Person; and
(ii) except during the continuance of an Event
of Default, Borrower shall at all times
retain the right, but not to the
exclusion of Lender, (A) to receive from
Lessee all notices, certificates and
other documents and all information that
Lessee is permitted or required to give
or furnish to the "Borrower" or the
"Lessor" pursuant to the Lease, the
Participation Agreement or any other
Operative Agreement, (B) to inspect the
Property, (C) to retain all rights with
respect to insurance that Article XIV of
the Lease specifically confers upon the
"Lessor," (D) to provide such insurance
as Lessee shall have failed to maintain
or as Borrower may desire, (E) to enforce
compliance by Lessee with the provisions
of Articles VIII, X, XI, XII, XIV and
XXXIII of the Lease, and (F) subject to
the other applicable provisions of this
Agreement, to perform for Lessee under
Article XVIII of the Lease.
9.4 Release of the Property, Etc.
(a) If Lessee shall at any time purchase the Property
pursuant to Section 17.2 of the Lease or exercise its Purchase Option with
respect to the Property under Article XXI of the Lease, then upon
satisfaction by Borrower of its obligation to prepay the Project Loans
pursuant to Section 3.3(b) and to pay accrued interest on the Project Loans
so prepaid pursuant to Section 3.2, the Property shall be released from the
Liens created by the Security Documents, all without delivery of any
instrument or performance of any act by any party. In addition, upon payment
in full of the Project Loan and all other amounts owing by Borrower hereunder
or under any other Project Loan Document and termination of the Project Loan
Commitment by Borrower, the Property shall be released from the Liens created
by the Security Documents, all without delivery of any instrument or
performance of any act by any party. Upon request of Borrower following any
such release, Lender shall, at the sole cost and expense of Borrower, execute
and deliver to Borrower or Lessee such documents as Borrower shall reasonably
request to evidence such release.
(b) Notwithstanding anything to the contrary herein, upon
termination of the Project Loan Commitment and upon the payment in full of
(i) the Project Loan and all other amounts owing by Borrower hereunder or
under any other Project Loan Document and (ii) all amounts owing by Lessee to
the Developer or to any other Person under the Operative Agreements, all
remaining moneys in the Account (other than any Excess Sales Proceeds which
shall be held in escrow to secure the obligations of Lessees under other
Leases of Real Property) shall be paid out to Lessee.
SECTION 10. EVENTS OF DEFAULT
10.1 Events of Default. The occurrence of any of the events set
forth in this subsection shall constitute an "Event of Default":
(a) Borrower shall fail to pay any principal of the Project
Loan when due in accordance with the terms thereof or hereof; or Borrower
shall fail to pay any interest on the Project Loan, or any other amount
payable hereunder, within five (5) days after any such interest or other
amount becomes due in accordance with the terms thereof or hereof; or
(b) Any representation or warranty made or deemed made by
Borrower herein or in any other Project Loan Document or which is contained
in any certificate, document or financial or other statement furnished by it
at any time under or in connection with this Agreement or any other Project
Loan Document shall prove to have been incorrect in any material respect on
or as of the date made or deemed made; or
(c) Construction of the Improvements shall not be Completed
on or before the Outside Completion Date; or
(d) Borrower shall default in the observance or performance
of any agreement contained in this Agreement or any other Project Loan
Document and such failure shall continue unremedied for a period of thirty
(30) days after written notice thereof has been given to Borrower by Lender;
or
(e) (i) Borrower shall commence any case, proceeding or
other action (A) under any existing or future law of any jurisdiction,
domestic or foreign, relating to bankruptcy, insolvency, reorganization or
relief of debtors, seeking to have an order for relief entered with respect
to it, or seeking to adjudicate it a bankrupt or insolvent, or seeking
reorganization, arrangement, adjustment, winding-up, liquidation,
dissolution, composition or other relief with respect to it or its debts, or
(B) seeking appointment of a receiver, trustee, custodian, conservator or
other similar official for it or for all or any substantial part of its
assets, or Borrower shall make a general assignment for the benefit of its
creditors; or (ii) there shall be commenced against Borrower any case,
proceeding or other action of a nature referred to in clause (i) above which
(A) results in the entry of an order for relief or any such adjudication or
appointment or (B) remains undismissed, undischarged or unbonded for a period
of sixty (60) days; or (iii) there shall be commenced against Borrower any
case, proceeding or other action seeking issuance of a warrant of attachment,
execution, distraint or similar process against all or any substantial part
of its assets which results in the entry of an order for any such relief
which shall not have been vacated, discharged, or stayed or bonded pending
appeal within sixty (60) days from the entry thereof; or (iv) Borrower shall
take any action in furtherance of, or indicating its consent to, approval of,
or acquiescence in, any of the acts set forth in clause (i), (ii), or (iii)
above; or (v) Borrower shall generally not, or shall be unable to, or shall
admit in writing its inability to, pay its debts as they become due; or
(f) One or more judgments or decrees shall be entered
against Borrower involving in the aggregate a liability (not paid or fully
covered by insurance) of $100,000 or more, and all such judgments or decrees
shall not have been vacated, discharged, stayed or bonded pending appeal
within sixty (60) days from the entry thereof; or
(g) (i) Any of the Project Loan Documents shall cease, for
any reason, to be in full force and effect, or Borrower shall so assert, or
(ii) the Lien created by any of the Security Documents shall cease to be
enforceable and of the same effect and priority purported to be created
thereby; or
(h) The Completion Guarantee shall cease, for any reason,
to be in full force and effect or Lessee shall so assert; or
(i) Except as otherwise expressly provided in Section 6.10,
the entire outstanding equity interest in Borrower shall cease to be owned by
those individuals and entities set forth on Schedule A to the Organizational
Certificate of Borrower; or
(j) The Lease shall cease, for any reason, to be in full
force and effect or Lessee shall so assert; or
(k) A Lease Event of Default shall have occurred and be
continuing; or
(l) A Credit Agreement Event of Default shall have occurred
and be continuing.
then, and in any such event, (A) if such event is an Event of Default
specified in clause (i) or (ii) of Section 10.1(e), automatically the Project
Loan Commitment shall immediately terminate and the Project Loan (with
accrued interest thereon) and all other amounts owing under this Agreement
and the other Project Loan Documents shall immediately become due and
payable, and (B) if such event is any other Event of Default, either or both
of the following actions may be taken: (i) Lender may by notice to Borrower
declare the Project Loan Commitment to be terminated forthwith, whereupon the
Project Loan Commitment shall immediately terminate; and (ii) Lender may by
notice to Borrower, declare the Project Loan (with accrued interest thereon)
and all other amounts owing under this Agreement and the other Project Loan
Documents to be due and payable forthwith, whereupon the same shall
immediately become due and payable. Except as expressly provided above in
this Section, presentment, demand, protest and all other notices of any kind
are hereby expressly waived.
10.2 Lender's Right to Apply Project Loan Proceeds. During the
continuance of an Event of Default, Lender shall have the right, but not the
obligation, to disburse and directly apply Project Loan proceeds to satisfy
Borrower's obligations. Borrower hereby authorizes Lender during the
continuance of any Event of Default to hold, use, disburse and apply advances
of the Project Loan for costs incurred in developing, constructing and
equipping the Improvements, payment or performance of obligations of Borrower
under the Project Loan Documents (including payment of interest on the
Project Loan) and preservation and protection of the Collateral. Such
disbursements shall be deemed advances of the Project Loan for all purposes
and shall be secured by the Security Documents.
10.3 Lender's Right to Complete. Upon the occurrence of any Lease Event of
Default or a default by Lessee under the Completion Guarantee, in addition to
any other remedies which Lender may have pursuant to the Project Loan
Documents, or as provided by statute or rule of law, Lender may enter upon
the Land and construct, equip and complete the Improvements in accordance
with the Plans and Specifications with such changes in the Plans and
Specifications as Lender may from time to time deem appropriate, all at the
risk, cost and expense of Borrower. Lender shall have the right at any and
all times to discontinue any work commenced by it in respect of the
Improvements or to change any course of action undertaken by it and shall not
be bound by any limitations or requirements of time whether set forth in this
Agreement or otherwise. Lender shall have the right and power, but shall not
be obligated, to assume Borrower's interest under any contract made by or on
behalf of Borrower in any way relating to the Improvements or the
construction of the Improvements and to take over and use all or any part or
parts of the labor, materials, supplies and equipment contracted for by or on
behalf of Borrower, whether or not previously incorporated into the
Improvements, all in the sole and absolute discretion of Lender. In
connection with any construction of the Improvements undertaken by Lender
pursuant to the provisions of this subsection, Lender may (i) engage
builders, contractors, architects, engineers and others for the purpose of
furnishing labor, materials and equipment in connection with any construction
of the Improvements, (ii) pay, settle or compromise all bills or claims which
may become Liens against the Property, or any part of the Property, or which
have been or may be incurred in any manner in connection with the
construction, completion and equipping of the Improvements or for the
discharge of Liens or defects in the title of the Property, or any part of
the Property, and (iii) take such other action (including the employment of
watchmen to protect the Property) or refrain from acting under this
Agreement, as Lender may in its sole and absolute discretion from time to
time determine without any limitation whatsoever. Borrower shall be liable to
reimburse Lender for all sums paid or incurred for the construction,
completion and equipping of the Improvements, whether such sums shall be paid
or incurred pursuant to the provisions of this subsection or otherwise. At
Lender's option, all such sums shall be treated as advances of the Project
Loan for all purposes or as demand obligations of Borrower, bearing interest
at the non-default interest rate provided in the Project Loan Note plus 4%
from the date of payment by Lender to the date of repayment by Borrower. All
of the foregoing amounts, including interest, shall be deemed to constitute
advances under this Agreement, be evidenced by the Project Loan Note and
secured by the Security Documents. Upon the occurrence of any Lease Event of
Default or a default by Lessee under the Completion Guaranty, the rights,
powers and privileges provided in this subsection and all other remedies
available to Lender under this Agreement or by statute or by rule of law may
be exercised by Lender at any time and from time to time whether or not the
Project Loan shall be due and payable, and whether or not Lender shall have
instituted any foreclosure or other action for the enforcement of the
Security Documents or the Project Loan Note.
10.4 Power of Attorney. For the purpose of carrying out the
provisions and exercising the rights, powers and privileges granted in
Section 10.3 above, Borrower hereby irrevocably constitutes and appoints
Lender its true and lawful attorney-in-fact to execute, acknowledge and
deliver any instruments and do and perform any acts such as are referred to
in this subsection in the name and on behalf of Borrower. This power of
attorney is a power coupled with an interest and cannot be revoked.
SECTION 11. MISCELLANEOUS
11.1 No Waivers. The making of a Project Loan Advance shall not
constitute a waiver of any of the conditions of Lender's obligation to make
further advances. No waiver of any such condition shall constitute a waiver
of any Default or Event of Default related to or predicated upon such
condition. Any advance made by Lender and any sums expended by Lender
pursuant to the Project Loan Documents shall be deemed to have been made
pursuant to this Agreement, notwithstanding the existence of an uncured
Default or Event of Default. No advance of the Project Loan at a time when an
Event of Default exists, whether or not Lender had actual knowledge of such
default, shall constitute a waiver of any right or remedy of Lender existing
by reason of such Event of Default, including, without limitation, the right
to accelerate the maturity of the Project Loan or to foreclose the Lien of
the Security Documents or to refuse to make further Project Loan Advances.
11.2 Lender and Lessee as Sole Beneficiaries. All conditions of the
obligation of Lender to make Project Loan Advances are imposed solely and
exclusively for the benefit of Lender and Lessee and their respective assigns
and no other Person shall have standing to require satisfaction of such
conditions in accordance with their terms or be entitled to assume that
Lender will refuse to make advances in the absence of strict compliance with
any or all such terms and no Person shall, under any circumstances, be deemed
to be a beneficiary of such conditions, any or all of which may be freely
waived in whole or in part by Lender at any time if in its sole discretion
Lender deems such waiver to be advisable. Lender's obligation to make
advances of the Project Loan, subject to the terms and conditions of this
Agreement, is solely for the benefit of Borrower and Lessee and no other
Person shall be deemed to be a beneficiary of such obligation nor entitled to
require any advance of Project Loan proceeds. Inspections and approvals of
the Plans and Specifications and the Improvements and the workmanship and
materials used in the construction of the Improvements shall impose no
responsibility or liability of any nature whatsoever on Lender, and no Person
shall, under any circumstances, be entitled to rely upon such inspections and
approvals by Lender for any reason.
Lender's sole obligation under this Agreement is to make the advances if and
to the extent required by this Agreement.
11.3 Notices. All notices, requests and demands to or upon the
respective parties hereto to be effective shall be in writing (including by
facsimile transmission) and, unless otherwise expressly provided herein,
shall be deemed to have been duly given or made (a) in the case of delivery
by hand, when delivered, (b) in the case of delivery by mail, three (3) days
after being deposited in the mails, postage prepaid, or (c) in the case of
delivery by facsimile transmission, when sent and receipt has been confirmed,
addressed as follows, or to such other address as may be hereafter notified
by the respective parties hereto:
Borrower: Agree-Milestone Center Project, L.L.C.
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ Agree
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to: Sommers, Schwartz, Silver & ▇▇▇▇▇▇▇▇, P.C.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇▇, Esq.
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Lender: Wilmington Trust Company
▇▇▇▇▇▇ Square North
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Corporate Trust Department
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Lessee: Borders, Inc.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Real Estate Department
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to: ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇, P.C.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
provided that any notice, request or demand to or upon Lender shall not be
effective until received.
11.4 Modifications. Any provision of this Agreement may be changed,
waived or terminated only by an instrument in writing signed by the party
against whom enforcement of the change, waiver or termination is sought.
11.5 Rights Cumulative. All rights, powers and remedies given to
Lender under this Agreement are cumulative and not alternative, and are in
addition to all rights, powers and remedies otherwise afforded Lender (all
rights, powers and remedies of Lender collectively, "Lender's Rights"); any
forbearance or delay by Lender in exercising any of Lender's Rights shall not
be deemed to be a waiver, and the exercise or partial exercise of any of
Lender's Rights shall not preclude the further exercise of any of Lender's
Rights which shall continue in full force and effect until specifically
waived by an instrument in writing executed by Lender. All representations,
warranties and covenants contained in any of the Project Loan Documents shall
survive the making of the advances of the Project Loan.
11.6 Schedules. The Schedules attached to this Agreement are
essential to and are made a part of this Agreement.
11.7 Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW
YORK, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW.
11.8 Waiver of Jury Trial, Submission to Jurisdiction. Borrower
IRREVOCABLY WAIVES TRIAL BY JURY AND ANY OBJECTIONS, INCLUDING WITHOUT
LIMITATION ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF
FORUM NON CONVENIENS, WHICH IT MAY NOW OR IN THE FUTURE HAVE TO THE BRINGING
OF ANY SUCH ACTION OR PROCEEDING IN ANY JURISDICTION. All judicial actions,
suits or proceedings brought against Borrower and its property with respect
to its obligations, liabilities or any other matter under or arising out of
or in connection with this Agreement or any other Project Loan Document or
for recognition or enforcement of any judgment rendered in any such
proceedings may be brought in any trial or appellate state or federal court
of competent jurisdiction in The City of New York. By execution and delivery
of this Agreement, Borrower accepts, generally and unconditionally, the
non-exclusive jurisdiction of such courts and irrevocably waives, and agrees
not to plead or claim, any objection that it may ever have to the venue of
any such action or proceeding in any such court or that such action or
proceeding was brought in an inconvenient court. Borrower irrevocably agrees
that all process in any proceeding or any court arising out of or in
connection with this Agreement or any of the other Project Loan Documents,
may be effected by mailing to Borrower a copy by registered or certified mail
or any substantially similar form of mail, postage prepaid, to Borrower at
its address set forth in subsection 11.3 or at such other address of which
Lender shall have been notified in accordance with the terms of such
subsection. Such service shall be effective five (5) days after such mailing.
Such service will be effective and binding service in every respect. Borrower
shall not assert that such service did not constitute effective and binding
service within the meaning of any applicable state or federal law, rule,
regulation or the like. Nothing in this Agreement shall affect the right to
effect service of process in any other manner permitted by law or shall limit
the right to ▇▇▇ in any other jurisdiction.
11.9 Captions. The captions in this Agreement are for convenience of
reference only, and in no way limit or amplify the provisions of this
Agreement.
11.10 Obligations Non-Recourse. Anything to the contrary contained
in this Agreement, the Project Loan Note or in any other Project Loan
Document notwithstanding, neither Borrower, nor any member, partner (general
or limited), officer, director or shareholder of Borrower, nor any member,
partner (general or limited), officer, director or shareholder thereof, nor
any of their respective successors or assigns (all such Persons being
hereinafter referred to collectively as the "Exculpated Persons"), shall be
personally liable in any respect for any representation, warranty, liability
or obligation hereunder or in any other Project Loan Document including the
payment of the principal of, or interest on, the Project Loan Note, or for
monetary damages for the breach of performance of any of the covenants
contained in this Agreement, the Project Loan Note, the Mortgage or any other
Project Loan Document. Lender agrees that, in the event it pursues any
remedies available to it under this Agreement, the Project Loan Note, the
Assignment of Lease, the Mortgage or under any other Project Loan Document,
Lender shall have no recourse against Borrower nor any Exculpated Person, for
any deficiency, loss or claim for monetary damages or otherwise resulting
therefrom and recourse shall be had solely and exclusively only against the
Property; but nothing contained herein shall be taken to prevent recourse
against or the enforcement of remedies against the Property in respect of any
and all liabilities, obligations and undertakings contained in the Mortgage,
this Agreement, the Project Loan Note, the Assignment of Lease or in any
other Project Loan Document. Notwithstanding the provisions of this
paragraph, nothing in the Mortgage, the Assignment of Lease, this Agreement,
the Project Loan Note or any other Project Loan Document shall: (a)
constitute a waiver, release or discharge of any indebtedness or obligation
evidenced by the Project Loan Note or arising under the Mortgage or this
Agreement or secured by the Mortgage, but the same shall continue until paid
or discharged; (b) relieve Borrower from liability and responsibility for
(but only to the extent of the damages arising by reason of): (i) active
waste knowingly committed by Borrower with respect to the Property or (ii)
any fraud on the part of Borrower or any such Exculpated Person; (c) relieve
Borrower from liability and responsibility for (but only to the extent of the
moneys misappropriated, misapplied or not turned over): (i) except for
Excepted Payments, misappropriation or misapplication by Borrower (i.e.,
application in a manner contrary to any of the Project Loan Documents) of any
insurance proceeds or condemnation award paid or delivered to Borrower by any
Person other than Lender; or (ii) except for Excepted Payments, any rents or
other income received by Borrower from Lessee that are not turned over to
Lender in accordance with the Assignment of Lease; or (d) affect or in any
way limit Lender's rights and remedies hereunder with respect to the rights
and powers assigned under the Assignment of Lease or to obtain a judgment
against Borrower (provided that no deficiency judgment or other money
judgment shall be enforced against Borrower or any Exculpated Person except
to the extent of Borrower's interest in the Property or to the extent
Borrower may be liable as otherwise contemplated in clauses (b) and (c) of
this Section).
IN WITNESS WHEREOF, this Agreement has been duly executed by Lender
and Borrower as of the date first written above.
WILMINGTON TRUST COMPANY,
not in its individual capacity,
but solely as Owner Trustee
By:/s/ ▇▇▇▇▇▇ ▇▇▇▇
------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇
Title: Financial Services Officer
AGREE-MILESTONE CENTER, L.L.C.
a Delaware limited liability company
BY: Agree Limited Partnership
a Delaware limited partnership
ITS: Member
By: Agree Realty Corporation
a Maryland corporation
By: /s/ ▇▇▇▇▇▇▇ Agree
-----------------
Name: ▇▇▇▇▇▇▇ Agree
Title: President
EXHIBIT A
LEGAL DESCRIPTION OF PROPERTY
All that certain land situated in ▇▇▇▇▇▇▇▇▇▇ County, Maryland, and more
particularly described as follows:
Lot numbered Twenty-nine (29)in Block lettered "C" as shown on a plat of
subdivision entitled "Plat of Resubdivision, ▇▇▇▇ ▇▇-▇▇ ▇▇▇ ▇▇▇▇▇▇▇ ▇ & ▇,
▇▇▇▇▇ ▇. MILESTONE CENTER", and recorded among the land records of ▇▇▇▇▇▇▇▇▇▇
County, Maryland, in Plat Book 185, at Plat No. 20444.
Address: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇
Parcel ID No: ▇▇▇ ▇▇, ▇▇▇▇▇ ▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ Tax Account No: ▇▇▇▇▇▇▇▇
A-1
EXHIBIT B
SITE PLAN
(Graphic Omitted)
B-1
EXHIBIT C
CONSTRUCTION BUDGET
(Attached)
C-1