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EXHIBIT 10.59
CREDIT AGREEMENT
CREDIT AGREEMENT dated as of October 6, 1998 between
ALTERNATIVE LIVING SERVICES, INC., a Delaware corporation (the "COMPANY"), and
DEUTSCHE BANK AG, a bank chartered under the laws of the Federal Republic of
Germany, acting by and through its New York Branch, (together with its
successors and assigns,"LENDER").
PRELIMINARY STATEMENTS:
(1) The Company intends to develop, through its
Affiliates, assisted living facilities, including Alzheimers and other dementia
care facilities, each to be owned by a Borrower and shall be leased to and
operated by the Operating Lessee.
(2) The Company has requested that Lender lend to the
respective Borrowers an aggregate principal amount of up to One Hundred Fifty
Million Dollars ($150,000,000.00) in order to repay and refinance the
construction financing provided by Construction Lenders with respect to each
such facility. Lender has indicated its willingness to agree to lend such amount
on the terms and conditions set forth in this Agreement.
NOW, THEREFORE, in consideration of the premises and of the
mutual covenants and agreements contained herein, the parties hereto hereby
agree as follows:
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
SECTION 1.01. CERTAIN DEFINED TERMS. As used in this
Agreement, the following terms shall have the following meanings (such meanings
to be equally applicable to both the singular and plural forms of the terms
defined):
"AFFILIATE" means, as to any Person, any other Person that,
directly or indirectly, controls, is controlled by or is under common
control with such Person or is a director or officer of such Person.
For purposes of this definition, the term "control" (including the
terms "controlling," "controlled by" and "under common control with")
of a Person means the possession, direct or indirect, of the power to
vote ten percent (10%) or more of the Voting Stock of such Person or to
direct or cause the direction of the management and policies of such
Person, whether through the ownership of Voting Stock, by contract or
otherwise.
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"APPLICABLE LENDING OFFICE" means Lender's Eurodollar Lending
Office during any period in which a Loan is maintained as a Eurodollar
Rate Loan and Lender's Domestic Lending Office during any period in
which such Loan is maintained as a Base Rate Loan.
"APPRAISAL" means an appraisal of one or more of the Projects
prepared by an Appraiser in accordance with the Uniform Standards of
Appraisal Practice of the Appraisal Foundation and complying with the
requirements of Title 11 of the Federal Financial Institutions Reform,
Recovery and Enforcement Act of 1989 and otherwise in form and
substance acceptable to Lender, as may be updated by recertification
from time to time.
"APPRAISER" means an Independent appraiser approved by Lender.
"ASSIGNEE" means any assignee of Lender pursuant to SECTION
7.01.
"ASSIGNMENT AND ACCEPTANCE" means an assignment and acceptance
entered into by Lender and an Assignee, and accepted by Lender, in
accordance with SECTION 7.01 and in substantially the form of EXHIBIT
B.
"BASE RATE" means a fluctuating interest rate per annum in
effect from time to time, which rate per annum shall be equal to the
lesser of (i) the maximum nonusurious rate permitted by Law or (ii) the
greater of (A) the rate of interest announced publicly by Deutsche Bank
AG, New York Branch, in New York, from time to time, as its "Prime
Rate" and (B) one percent (1%) above the Federal Funds Rate.
"BASE RATE LOAN" means any Interim Loan which bears interest
in accordance with SECTION 2.06(A)(I).
"BORROWER" except as otherwise limited herein, means each of
the wholly owned Subsidiaries of the Company designated by the Company
to receive the Loans in accordance with the terms of this Agreement.
"BUSINESS DAY" means a day of the year on which banks are not
required or authorized by law to close in New York City, the city in
which the principal office of the Loan Servicer is located and, if the
applicable Business Day relates to any Determination Date during any
period in which any Loan is maintained as a Eurodollar Rate Loan, a
Business Day on which commercial banks are open for international
business (including dealings in dollar deposits in the London interbank
market).
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"CAPITALIZED LEASES" means, with respect to any Person, any
lease of any property by such Person, as lessee, which, in accordance
with GAAP, is required to be accounted for as a capital lease on the
balance sheet of such Person.
"CHANGE OF CONTROL" shall mean and include any of the
following:
(i) any person or group (as such term is defined
in Section 13(d)(3) of the 1934 Act), other than the Company,
any trustee or other fiduciary holding securities under an
employee benefit plan of the Company, and any member of the
Current Holder Group, shall acquire, other than in a Merger
Transaction which itself does not result in a Change of
Control under clause (iii) below, directly or indirectly,
beneficial ownership (within the meaning of Rule 13d-3 and
13d-5 of the 1934 Act) of more than 50%, on a fully diluted
basis, of the economic or voting interest in the Company's
capital stock;
(ii) the shareholders of the Company approve a
plan of complete liquidation of the Company or an agreement or
agreements for the sale or disposition by the Company of all
or substantially all of the Company's assets; and/or
(iii) the shareholders of the Company approve a
merger, business combination or consolidation of the Company
with any other person, including a triangular merger involving
the Company (any such transaction, a "MERGER TRANSACTION"),
other than a Merger Transaction which would result in the
voting securities of the Company outstanding immediately prior
thereto continuing to represent (either by remaining
outstanding or by being converted or exchanged for voting
securities of the surviving or resulting entity) more than 50%
of the combined voting power of the voting securities of the
Company or such surviving or resulting entity outstanding (on
a fully diluted basis) after such Merger Transaction.
As used in this definition, "CURRENT HOLDER GROUP" shall mean (i) those
persons who are officers and directors of the Company at the Effective
Date, (ii) the spouses, heirs, legatees, descendants and blood
relatives to the third degree of consanguinity of any such person,
(iii) the executors and administrators of the estate of any such
person, and any court appointed guardian of any such person, and (iv)
any trust,
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family partnership or other investment entity for the benefit of any
such person referred to in the foregoing clauses (i) and (ii) or any
other persons or charitable purposes, so long as one or more members of
the Current Holder Group has the exclusive or joint right to control
the voting and disposition of securities held by such trust.
"CLOSING DATE" means, with respect to any Loan, the date on
which the applicable Borrower shall execute and deliver the Project
Loan Documents and Lender shall disburse the proceeds of such Loan.
"COLLATERAL" means all "Collateral" referred to in the
Collateral Documents and all other property that is or is intended to
be subject to any Lien in favor of Lender.
"COLLATERAL DOCUMENTS" means, with respect to each Loan, the
Mortgage, the Security Agreement and any other agreement that creates
or purports to create a Lien in favor of Lender to secure such Loan
and, collectively, all such agreements for all the Loans.
"COMMITMENT" means, Lender's commitment to lend an aggregate
principal amount of up to One Hundred Fifty Million and No/100 Dollars
($150,000,000.00) on the terms and conditions of this Agreement.
"COMMITMENT DATE" has the meaning specified in SECTION 3.02.
"COMMITMENT TERMINATION DATE" has the meaning specified in
SECTION 2.01.
"COMPANY" has the meaning specified in the Preliminary
Statements.
"CONSTRUCTION LENDER" means the lender providing Construction
Loan financing with respect to any Project.
"CONSTRUCTION LOAN" means the loan provided by the
Construction Lender with respect to any Project.
"DEBT" of any Person means, without duplication, (a) all
indebtedness of such Person for borrowed money, (b) all Obligations of
such Person for the deferred
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purchase price of property or services, (c) all Obligations of such
Person evidenced by notes, bonds, debentures or other similar
instruments, (d) all Obligations of such Person created or arising
under any conditional sale or other title retention agreement with
respect to property acquired by such Person (even though the rights and
remedies of the seller or lender under such agreement in the event of
default are limited to repossession or sale of such property), (e) all
Obligations of such Person as lessee under Capitalized Leases, (f) all
Obligations, contingent or otherwise, of such Person under acceptance,
letter of credit or similar facilities, (g) all Obligations of such
Person to purchase, redeem, retire, defease or otherwise make any
payment in respect of any capital stock of or other ownership or profit
interest in such Person or any other Person, valued, in the case of
redeemable preferred stock, at the greater of its voluntary or
involuntary liquidation preference plus accrued and unpaid dividends,
(h) all Debt of others referred to in clauses (a) through (g) above or
clause (i) below guaranteed directly or indirectly in any manner by
such Person, or in effect guaranteed directly or indirectly by such
Person through an agreement (i) to pay or purchase such Debt or to
advance or supply funds for the payment or purchase of such Debt, (ii)
to purchase, sell or lease (as lessee or lessor) property, or to
purchase or sell services, primarily for the purpose of enabling the
debtor to make payment of such Debt or to assure the holder of such
Debt against loss, (iii) to supply funds to or in any other manner
invest in the debtor (including any agreement to pay for property or
services irrespective of whether such property is received or such
services are rendered) or (iv) otherwise to assure a creditor against
loss, and (i) all Debt referred to in clauses (a) through (h) above of
another Person secured by (or for which the holder of such Debt has an
existing right, contingent or otherwise, to be secured by) any Lien on
property (including, without limitation, accounts and contract rights)
owned by such Person, even though such Person has not assumed or become
liable for the payment of such Debt.
"DEFAULT" means any Event of Default or any event that would
constitute an Event of Default but for the requirement that notice be
given or time elapse or both.
"DEFAULT INTEREST RATE" has the meaning specified in SECTION
2.06(B).
"DETERMINATION DATE" means, with respect to each Interest
Period, the second Business Day prior to the Interest Reset Date.
"DOMESTIC LENDING OFFICE" means the office of Lender specified
as its "Domestic Lending Office" on SCHEDULE 1 or in the Assignment and
Acceptance pursuant to which it became a Lender Party, as the case may
be, or such other office of such Lender Party as such Lender Party may
from time to time specify to the Company and Lender.
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"EFFECTIVE DATE" has the meaning specified in SECTION 3.01.
"ENVIRONMENTAL ACTION" means any action, suit, demand, demand
letter, claim, notice of noncompliance or violation, notice of
liability or potential liability, investigation, proceeding, consent
order or consent agreement relating in any way to any Environmental
Law, any Environmental Permit or Hazardous Material or arising from
alleged injury or threat to health, safety or the environment,
including, without limitation, (a) by any governmental or regulatory
authority for enforcement, cleanup, removal, response, remedial or
other actions or damages and (b) by any governmental or regulatory
authority or third party for damages, contribution, indemnification,
cost recovery, compensation or injunctive relief.
"ENVIRONMENTAL LAW" means any federal, state, local or foreign
statute, law, ordinance, rule, regulation, code, order, writ, judgment,
injunction, decree or judicial or agency interpretation, policy or
guidance relating to pollution or protection of the environment,
health, safety or natural resources, including, without limitation,
those relating to the use, handling, transportation, treatment,
storage, disposal, release or discharge of Hazardous Materials.
"ENVIRONMENTAL PERMIT" means any permit, approval,
identification number, license or other authorization required under
any Environmental Law.
"EQUIPMENT" means all equipment referred to in SECTION 1(A) of
the Security Agreement.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended from time to time, and the regulations promulgated and
rulings issued thereunder.
"EUROCURRENCY LIABILITIES" has the meaning specified in
Regulation D of the Board of Governors of the Federal Reserve System,
as in effect from time to time.
"EURODOLLAR LENDING OFFICE" means the office of Lender
specified as its "Eurodollar Lending Office" opposite its name on
SCHEDULE 1 or in the Assignment and Acceptance pursuant to which it
became a Lender Party, as the case may be, or such other office of
Lender Party as such Lender Party may from time to time specify to the
Company and Lender.
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"EURODOLLAR MARGIN" has the meaning specified in that certain
Side Letter by and between the Company and Lender, dated as of the date
hereof.
"EURODOLLAR RATE" means, for any Interest Period, the lesser
of (i) the maximum nonusurious rate permitted by Law or (ii) (A) either
(a) the quotation (expressed as percentage per annum) appearing on
Telerate Page 3750 as of 11:00 a.m., New York time, on the relevant
Determination Date for such Interest Period for U.S. Dollar deposits
for the relevant Interest Period in the London interbank market
(rounded upward, if necessary, to the nearest one hundred-thousandth of
a percentage point) or, if no such rate appears on Telerate Page 3750,
(b) the arithmetic mean (rounded upward, if necessary, to the nearest
one hundred-thousandth of a percentage point) of the rates quoted at
approximately 11:00 a.m., London time, on such Determination Date, by
four (4) major banks in the London interbank market, selected by
Lender, to prime banks in the London interbank market for U.S. Dollar
deposits for the relevant Interest Period commencing on the first day
of the applicable Interest Period and in a principal amount equal to an
amount of not less than $250,000.00 that is representative for a single
transaction in such market at such time, provided that, if fewer than
four (4) such quotations are provided as requested, the rate of
interest that is in effect on such Determination Date will be the
Eurodollar Rate for the immediately preceding Interest Period divided
by (B) one (1) minus the Eurodollar Rate Reserve Percentage. The
foregoing notwithstanding, the Eurodollar Rate for any Stub Interest
Period shall be determined on the basis of a one-month Interest Period
commencing on the applicable Closing Date.
"EURODOLLAR RATE LOAN" means any Loan during any period in
which such Loan bears interest in accordance with SECTION 2.06(A)(II).
"EURODOLLAR RATE RESERVE PERCENTAGE" for any Interest Period
for all Eurodollar Rate Loans means the reserve percentage applicable
two (2) Business Days before the first day of such Interest Period
under regulations issued from time to time by the Board of Governors of
the Federal Reserve System (or any successor) for determining the
maximum reserve requirement (including, without limitation, any
emergency, supplemental or other marginal reserve requirement) for a
member bank of the Federal Reserve System in New York City with respect
to liabilities or assets consisting of or including Eurocurrency
Liabilities (or with respect to any other category of liabilities that
includes deposits by reference to which the interest rate on Eurodollar
Rate Loans is determined) having a term equal to such Interest Period.
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"EVENTS OF DEFAULT" has the meaning specified in SECTION 6.01.
"EXCLUDED TAXES" has the meaning specified in SECTION 2.11(A).
"FEDERAL FUNDS RATE" means, for any period, a fluctuating
interest rate per annum equal for each day during such period to the
weighted average of the rates on overnight Federal funds transactions
with members of the Federal Reserve System arranged by Federal funds
brokers, as published for such day (or, if such day is not a Business
Day, for the next preceding Business Day) by the Federal Reserve Bank
of New York, or, if such rate is not so published for any day that is a
Business Day, the average of the quotations for such day for such
transactions received by Lender from three Federal funds brokers of
recognized standing selected by it.
"FISCAL YEAR" means a fiscal year of the Company and its
consolidated Subsidiaries or each Borrower ending on December 31 in any
calendar year or such other fiscal year as the Company may select from
time to time in accordance with the terms of this Agreement.
"GAAP" means generally accepted accounting principles
consistently applied and consistent with those applied in the
preparation of the financial statements referred to in SECTION 5.03.
"GUARANTOR" means the Company.
"GUARANTY" means the Guaranty in the form of EXHIBIT E.
"HAZARDOUS MATERIALS" means (a) refined petroleum products,
by-products or breakdown products, radioactive materials,
asbestos-containing materials, polychlorinated biphenyls and radon gas
and (b) any other chemicals, materials or substances designated,
classified or regulated as hazardous or toxic or as a pollutant or
contaminant under any Environmental Law.
"IMPOSITIONS" has the meaning specified in the Mortgages.
"INDEMNIFIED PARTY" has the meaning specified in SECTION
8.04(B).
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"INDEPENDENT" means, with respect to any specified Person,
such a Person who (a) does not have any direct financial interest or
any material indirect financial interest in the Company, any Borrower
or in any of their respective Affiliates, (b) is not connected with the
Company or any Borrower as an officer, employee, promoter, underwriter,
trustee, partner or director and (c) is not controlled by or under
common control with the Company, or any Borrower.
"INTEREST PAYMENT DATE" means, with respect to any Loan, the
first (1st) day of each calendar month while any portion of such Loan
remains unpaid; provided, however, that if such Interest Payment Date
is not a Business Day, such Interest Payment Date shall be the
immediately succeeding Business Day.
"INTEREST PERIOD" means with respect to any Loan (a) the
period beginning on (and including) the applicable Closing Date and
ending on (but excluding) the first Interest Payment Date and (b) each
successive period beginning on (and including) an Interest Payment Date
and ending on (but excluding) the next succeeding Interest Payment Date
provided, however, that no Interest Period shall extend beyond the
applicable Loan Maturity Date.
"INTEREST RESET DATE" means, with respect to any Eurodollar
Rate Loan, the first day of the applicable Interest Period.
"INTERNAL REVENUE CODE" means the Internal Revenue Code of
1986, as amended from time to time, and the regulations promulgated and
rulings issued thereunder.
"LAWS" means all present and future laws, statutes, codes,
ordinances, orders, judgments, decrees, injunctions, rules,
regulations, determinations, awards and court orders of any federal,
state, municipal or local government, governmental authority,
regulatory agency or authority.
"LENDER" has the meaning specified in the Preliminary
Statement.
"LENDER PARTY" means, collectively, Lender and any assignee of
all or a portion of Lender's interests in this Agreement or any Loan
and any subsequent assignee of any Lender Party.
"LENDER'S ACCOUNT" means an account of Lender or the Loan
Servicer designated in writing by Lender or the Loan Servicer to the
applicable Borrower.
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"LIABILITIES" has the meaning specified in SECTION 7.02.
"LIBOR BREAKAGE COSTS" means the amount of all losses, costs,
charges and damages which are actually incurred or which would be
incurred by Lender through the end of an Interest Period as a result of
any early termination of any arrangement, or the entering into a new
arrangement, with any member of the London interbank market for the
funding of the aggregate outstanding principal amount of the Loan
(determined as though Lender had funded one hundred percent (100%) of
such outstanding principal amount in the London interbank market and
calculated as of the date of any applicable early termination, in the
same manner as the Eurodollar Rate).
"LIEN" means any lien, security interest or other charge or
encumbrance of any kind, or any other type of preferential arrangement,
including, without limitation, the lien or retained security title of a
conditional vendor and any easement, right of way or other encumbrance
on title to real property.
"LOAN" has the meaning set forth in SECTION 2.01.
"LOAN MATURITY DATE" means, with respect to each Loan, the
second anniversary of the Closing Date of such Loan.
"LOAN DOCUMENTS" means collectively (i) this Agreement, (ii)
the Guaranty and (iii) the Project Loan Documents for each Loan, in
each case as amended or otherwise modified from time to time.
"LOAN PARTIES" means, collectively, each Borrower and the
Company, in its capacity as Guarantor.
"LOAN SERVICER" has the meaning specified in the related
Mortgage.
"LOAN-TO-VALUE RATIO" means the ratio, as of the applicable
date of determination, of (a) the outstanding principal amount of such
Loan to (b) the fair market value of the related Project as determined
by the Appraisal.
"MANAGER" means the Company, or any successor appointed in
accordance with the terms of the Loan Documents.
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"MANAGEMENT AGREEMENT" means a management agreement or
sublease between the Borrower or Operating Lessee and the Manager in
substantially the form of EXHIBIT I hereto with respect to the
management and operation of the applicable Project.
"MARGIN STOCK" has the meaning specified in Regulation U.
"MATERIAL ADVERSE CHANGE" means a change which results in a
Material Adverse Effect.
"MATERIAL ADVERSE EFFECT" means a material adverse effect on
(a) the business, condition (financial or otherwise), operations,
performance, properties or prospects of the applicable Borrower or the
Company, (b) the rights and remedies of Lender under any Loan Document
or (c) the ability of any applicable Borrower or the Company to perform
its Obligations under any Loan Document to which it is or is to be a
party.
"MOODY'S" means Moody's Investors Service, Inc.
"MORTGAGE" means a Mortgage or Deed of Trust, as the case may
be, Assignment of Leases and Rents, Security Agreement and Financing
Statement from the applicable Borrower to Lender, in substantially the
form attached as EXHIBIT D to the applicable Project Commitment.
"NET PROCEEDS", with respect to any Loan, has the meaning
specified in the related Mortgage.
"NOTE" means a promissory note of a Borrower payable to the
order of Lender, in substantially the form attached as EXHIBIT C to the
related Project Commitment evidencing the indebtedness of such Borrower
to Lender resulting from the Loan made by Lender to such Borrower,
together with any amendment, modification, consolidation or replacement
thereof.
"NOTICE OF BORROWING" has the meaning specified in SECTION
2.02.
"OBLIGATION" means, with respect to any Person, any payment,
performance or other obligation of such Person of any kind, including,
without limitation, any liability
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of such Person on any claim, whether or not the right of any creditor
to payment in respect of such claim is reduced to judgment, liquidated,
unliquidated, fixed, contingent, matured, disputed, undisputed, legal,
equitable, secured or unsecured, and whether or not such claim is
discharged, stayed or otherwise affected by any proceeding referred to
in SECTION 6.01(F). Without limiting the generality of the foregoing,
the Obligations of any Borrower under the Loan Documents include (a)
the obligation to pay principal, interest, charges, expenses, fees,
attorneys' fees and disbursements, indemnities and other amounts
payable by such Borrower under any Loan Document and (b) the obligation
of such Borrower to reimburse any amount in respect of any of the
foregoing that Lender, in its sole discretion, may elect to pay or
advance on behalf of such Borrower.
"OPERATING LEASE" means the applicable lease for each of the
Projects between the related Borrower, as Lessor, and the applicable
joint venture entity identified in the Notice of Borrowing or the
Company, as applicable, as Lessee, in a form reasonably acceptable to
Lender.
"OPERATING LESSEE" means the lessee under the applicable
Operating Lease.
"ORGANIZATIONAL DOCUMENTS" means, (i) with respect to any
Person that is a corporation, the certificate of incorporation or
charter and by-laws of such Person, (ii) with respect to any Person
that is a partnership, the partnership agreement and, if a limited
partnership, certificate of limited partnership of such person, and
(iii) with respect to any Person that is a limited liability company,
the articles of organization and the operating agreement of such
Person.
"ORIGINATION FEE" has the meaning specified in SECTION
2.08(A).
"OTHER TAXES" has the meaning specified in SECTION 2.11(B).
"PERMITTED CHANGE OF CONTROL" shall mean any transaction in
which either the Company or the entity exerting effective control over
the Company (A) has a consolidated net worth (determined in accordance
with GAAP) equal to or greater than One Hundred Fifty Million and
No/100 Dollars ($150,000,000.00), and (B) is publicly traded on the New
York Stock Exchange ("NYSE"), American Stock Exchange ("AMEX"), or the
National Association of Securities Dealers ("NASDAQ").
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"PERSON" means an individual, partnership, corporation
(including a business trust), limited liability company, joint stock
company, trust, unincorporated association, joint venture or other
entity, or a government or any political subdivision or agency thereof.
"PREMISES" has the meaning specified in the related Mortgage.
"PRINCIPAL LIMITED PARTNERS" means any limited partner or
member of a Borrower that owns directly or indirectly, greater than a
49% beneficial interest in such Borrower.
"PROJECT" means the land, improvements and personal property
comprising one of the assisted living facilities (including Alzheimers
and other dementia care facilities) owned by the applicable Borrower
and with respect to which a Loan is made by Lender in accordance with
the terms of this Agreement.
"PROJECT COMMITMENT" means a written loan commitment in the
form of EXHIBIT F hereto pursuant to which Lender confirms its
obligation under and subject to the terms of this Agreement to fund a
Loan with respect to a particular Project.
"PROJECT COSTS" means, the sum, for each Project, of (i) the
total actual costs of development and construction of the Project,
including (A) land acquisition costs, (B) site improvement and
development costs, (C) all direct costs of construction, bricks,
mortar, painting, carpeting, HVAC systems, sprinkler systems, other
building mechanical, electrical and plumbing systems and other costs
generally considered "hard" costs under construction industry practice,
(D) the purchase price of fixed, moveable or mobile fixtures,
furnishings and equipment located on or used in connection with the
Project, (E) architectural and engineering fees, permit fees, financing
fees and other costs generally considered "soft" costs under
construction industry practice and (F) construction period interest and
Impositions.
"PROJECT LOAN DOCUMENTS" means with respect to each Loan, (i)
the Note, (ii) the Collateral Documents and (iii) any other written
agreement or instruction evidencing, securing or otherwise related to
such Loan.
"RATING AGENCY" means any of Fitch Investors Service, L.P.,
Moody's, Duff & Phelps Credit Rating Co. and S&P and "RATING AGENCIES"
means at least two of the foregoing.
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"REGISTER" has the meaning specified in SECTION 7.01(C).
"REGULATION U" means Regulation U of the Board of Governors of
the Federal Reserve System, as in effect from time to time.
"REMIC" means a "real estate mortgage investment conduit"
within the meaning of SECTION 860D of the Internal Revenue Code.
"RESERVES" has the meaning specified in the Mortgages.
"RESPONSIBLE OFFICER" means any officer of any Loan Party or
any of its Subsidiaries.
"S&P" means Standard & Poor's Ratings Group, a division of The
McGraw-Hill Companies.
"SECURITIES" has the meaning specified in SECTION 7.02.
"SECURITIZATION" has the meaning specified in SECTION 7.02.
"SECURITY AGREEMENT" means a Security Agreement from the
Borrower to Lender in substantially the form attached as EXHIBIT E to
the applicable Project Commitment.
"SOLVENT" and "SOLVENCY" mean, with respect to any Person on a
particular date, that on such date (a) the fair value of the property
of such Person is greater than the total amount of liabilities,
including, without limitation, contingent liabilities, of such Person,
(b) the present fair salable value of the assets of such Person is not
less than the amount that will be required to pay the probable
liability of such Person on its debts as they become absolute and
matured, (c) such Person does not intend to, and does not believe that
it will, incur debts or liabilities beyond such Person's ability to pay
such debts and liabilities as they mature and (d) such Person is not
engaged in business or a transaction, and is not about to engage in
business or a transaction, for which such Person's property would
constitute an unreasonably small capital. The amount of contingent
liabilities at any time shall be computed as the amount that, in the
light of all the facts and circumstances existing at such time,
represents the amount that can reasonably be expected to become an
actual or matured liability.
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"SPECIAL PURPOSE ENTITY" means a corporation, limited
partnership or limited liability company which complies (and whose
general partners, managing members and Principal Limited Partners, as
applicable, comply) with the provisions of EXHIBIT G (including any
representations and warranties contained therein) and the
Organizational Documents of which (and of its general partners,
managing members and Principal Limited Partners, as the case may be)
include provisions and restrictions that will insure continued
compliance with such EXHIBIT G, in each case, such that such Person
would satisfy the criteria adopted from time to time by any Rating
Agency rating any Securities issued with respect to the Loans of a
special purpose entity.
"SUBSIDIARY" of any Person means any corporation, partnership,
joint venture, limited liability company, trust or estate of which (or
in which) more than fifty percent (50%) of (a) the issued and
outstanding capital stock having ordinary 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 have voting power upon the occurrence of any
contingency), (b) the interest in the capital or profits of such
partnership, joint venture or limited liability company or (c) the
beneficial interest in such trust or estate is at the time directly or
indirectly owned or controlled by such Person, by such Person and one
or more of its other Subsidiaries or by one or more of such Person's
other Subsidiaries.
"SUCCESSOR BORROWER" has the meaning specified in SECTION
2.05(B).
"TAKE-OUT AGREEMENT" means an agreement in substantially the
form of EXHIBIT H attached hereto among Lender, the applicable
Construction Lender and the applicable Borrower.
"UNITED STATES" has the meaning specified in SECTION 2.11(D).
"UNITED STATES PERSON" has the meaning specified in SECTION
2.11(D).
"TAXES" has the meaning specified in SECTION 2.11(A).
"TREASURY RATE" means, as of the applicable date of
determination, the annualized yield on securities issued by the United
States Treasury having a ten (10) year maturity, as quoted in Federal
Reserve Statistical Release [H. 15 (519)] under the heading "U.S.
Government Securities - Treasury Constant Maturities" for the date most
nearly two (2) weeks before the date of determination (or a comparable
rate if this rate is no longer published).
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"U.S. GOVERNMENT SECURITIES" means securities that are (i)
direct obligations of the United States of America for the payment of
which its full faith and credit is pledged or (ii) obligations of a
Person controlled or supervised by and acting as an agency or
instrumentality of the United States of America the payment of which is
unconditionally guaranteed as a full faith and credit obligation by the
United States of America, which, in either case, are not callable or
redeemable at the option of the issuer thereof at any time prior to the
stated maturity of the Securities, and shall also include a depository
receipt issued by a bank or trust company as custodian with respect to
any such U.S. Government Security or a specific payment of interest on
or principal of any such U.S. Government Security held by such
custodian for the account of the holder of a depository receipt;
provided, that (except as required by law) such custodian is not
authorized to make any deduction from the amount payable to the holder
of such depository receipt from any amount received by the custodian in
respect of the U.S. Government Security or the specific payment of
interest on or principal of the U.S. Government Security evidenced by
such depository receipt.
"VOTING STOCK" means capital stock issued by a corporation, or
equivalent interests in any other Person, the holders of which are
ordinarily, in the absence of contingencies, entitled to vote for the
election of directors (or persons performing similar functions) of such
Person, even if the right so to vote has been suspended by the
happening of such a contingency.
SECTION 1.02. COMPUTATION OF TIME PERIODS. In this Agreement
in the computation of periods of time from a specified date to a later specified
date, the word "from" means "from and including" and the words "to" and "until"
each mean "to but excluding".
SECTION 1.03. ACCOUNTING TERMS. All accounting terms not
specifically defined herein shall be construed in accordance with GAAP.
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ARTICLE II
AMOUNT AND TERMS OF THE LOANS
SECTION 2.01. THE LOANS. Subject to the terms and conditions
set forth in this Agreement, Lender agrees to make advances (the "LOANS") to the
respective Borrowers from time to time pursuant to Project Commitments issued
during the period from the Effective Date until the date which is the
twenty-fourth (24th) month anniversary of the Effective Date (such date, or the
earlier date of termination of the Commitment pursuant to SECTION 2.16 or
SECTION 6.01, being the "COMMITMENT TERMINATION DATE") in accordance with
SECTION 2.02, in an aggregate amount not to exceed One Hundred Fifty Million
Dollars ($150,000,000.00). Amounts borrowed hereunder and repaid or prepaid may
not be reborrowed.
SECTION 2.02. MAKING THE LOANS. (a) From and after the
Effective Date, at the written request of the Company and upon the satisfaction
of the conditions precedent set forth in SECTION 3.02, Lender shall issue,
execute and deliver (i) to the applicable Borrower a Project Commitment and (ii)
to the applicable Construction Lender and such Borrower a Take-Out Agreement,
pursuant to which agreements, Lender shall confirm its commitment to make the
applicable Loan with respect to the related Project.
(b) Each Loan shall be made in accordance with the terms
of the applicable Project Commitment upon delivery of a Notice of Borrowing not
later than 11:00 A.M. (New York City time) on the third (3rd) Business Day prior
to the date of the proposed Loan, by the applicable Borrower to Lender. Such
notice (the "NOTICE OF BORROWING") shall be substantially in the form of EXHIBIT
A attached hereto and shall specify therein the requested date of the Loan. Upon
satisfaction of the conditions precedent to Lender's obligations to make such
Loan set forth in ARTICLE III and the applicable Project Commitment, the Lender
shall make such Loan available, before 11:00 A.M. (New York City time) on the
applicable Closing Date, to such Borrower in accordance with the terms of the
related Project Commitment and Take-Out Agreement.
(c) Each Loan shall be in a principal amount equal to the
least of (i) the outstanding principal amount of and accrued and unpaid interest
on the related Construction Loan; (ii) eighty percent (80%) of the fair market
value (determined without any reduction on account of (i) any special,
extraordinary or other non-recurring charges or expenses associated with a new
opening or the initial 12 months of lease-up or (ii) operating deficits during
the initial 12 months of operation) of the applicable Project (as determined by
the Appraisal delivered to Lender pursuant to SECTION 3.02); and (iii) ninety
percent (90%) of the
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Project Costs of the applicable Project; provided, however, that no such Loan
shall be in an amount less than One Million and No/100 Dollars ($1,000,000.00),
except that the final Loan may be in an amount equal to the then entire unused
Commitment.
(d) Each Notice of Borrowing from a Borrower to Lender
shall be irrevocable and binding on such Borrower. In the case of any Notice of
Borrowing delivered by a Borrower, the Company and such Borrower shall indemnify
and hold harmless Lender against any loss, cost or expense incurred by Lender as
a result of any failure to fulfill on or before the date specified in such
Notice of Borrowing the applicable conditions set forth in ARTICLE III,
including, without limitation, any loss (including loss of anticipated profits)
cost or expense incurred by reason of the liquidation or reemployment of
deposits or other funds acquired by Lender to fund the Loan when the Loan, as a
result of such failure, is not made on such date.
(e) The Company shall have the right to designate a
single Borrower to receive all Loans to be funded in accordance herewith within
any sixty (60) day period; provided, however, that no single Borrower shall be
designated to receive Loans in an aggregate principal amount exceeding Thirty
Million and No/100 Dollars ($30,000,000). Each such Borrower shall be a
corporation, limited partnership or limited liability company that is organized
(and, in the case of a limited partnership or limited liability company, whose
general partner or managing member is organized) as a Special Purpose Entity;
provided, however, that, subject to SECTION 7.02, such Person shall not be
required to comply with CLAUSE (Y) of EXHIBIT G.
SECTION 2.03. REPAYMENT OF THE LOAN. (a) On each Interest
Payment Date occurring after the Closing Date with respect to each Loan, the
related Borrower shall pay such portion of the principal of such Loan as shall
be calculated based upon a twenty-five (25) year, constant-payment amortization
schedule commencing on such Closing Date.
(b) Subject to the provisions of SECTION 2.04 and SECTION
2.07, the applicable Borrower shall repay to Lender the aggregate outstanding
principal amount of its related Loan on the applicable Loan Maturity Date.
SECTION 2.04. PREPAYMENTS. (a) VOLUNTARY. Any Borrower may
prepay its related Loan, in whole or in part, upon at least thirty (30) days'
prior notice to Lender stating the proposed prepayment date and aggregate
principal amount of the prepayment. If such notice is given, such Borrower
shall, consistent with such notice, prepay the outstanding aggregate principal
amount of the applicable Loan in whole or in part, together with accrued
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interest to the date of such prepayment on the aggregate principal amount
prepaid, provided, however, that (1) each partial prepayment shall be in an
aggregate principal amount of One Hundred Thousand and No/100 Dollars
($100,000.00) or an integral multiple of One Thousand and No/100 Dollars
($1,000.00) in excess thereof and (2) no prepayment of a Loan shall be made
other than on an Interest Payment Date.
(b) ACCELERATION. If an Event of Default occurs, and any
Loan is declared to be immediately due and payable, then Lender will be entitled
to add to the outstanding principal of the applicable Loan, plus any LIBOR
Breakage Costs.
(c) PREPAYMENT ON CASUALTY OR CONDEMNATION. Each Loan
shall be prepayable, in whole or in part, without premium, upon any application
by Lender of any Net Proceeds in accordance with ARTICLE IV of the related
Mortgage.
SECTION 2.05. [RESERVED].
SECTION 2.06. INTEREST. (a) SCHEDULED INTEREST. Each Borrower
shall pay interest on the unpaid principal amount of its related Loan owing to
Lender from the date of disbursement of such Loan until such principal amount
shall be paid in full, at the following rates per annum:
(i) BASE RATE. During the periods, if any, during which
SECTION 2.09 provides that the applicable Loan shall accrue interest
based upon the Base Rate, a rate per annum equal to the Base Rate in
effect from time to time, payable in arrears on each applicable
Interest Payment Date.
(ii) EURODOLLAR RATE. Except as otherwise provided in
clause (i) above, a rate per annum equal at all times during each
Interest Period to the sum of (A) the Eurodollar Rate for such Interest
Period plus (B) the Eurodollar Margin, payable in arrears on each
applicable Interest Payment Date.
(b) DEFAULT INTEREST. Upon the occurrence and during the
continuance of a Default, the applicable Borrower shall pay interest on (i) the
unpaid principal amount of its related Loan, payable in arrears on each Interest
Payment Date and on demand, at a rate (the "DEFAULT INTEREST RATE") per annum
equal at all times to the lesser of (x) the maximum nonusurious rate permitted
by Law or (y) five percent (5%) per annum above the rate per annum required to
be paid on such Loan pursuant to CLAUSE (A)(I) or (A)(II) above, as the case may
be, and (ii) to the fullest extent permitted by Law, the amount of any interest,
fee or other
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amount payable hereunder that is not paid when due, from the date such amount
shall be due until such amount shall be paid in full, payable in arrears on the
date such amount shall be paid in full and on demand, at a rate per annum equal
at all times to the lesser of (x) the maximum nonusurious rate permitted by Law
or (y) five percent (5%) per annum above the rate per annum required to be paid,
in the case of interest, on its related Loan pursuant to CLAUSE (A)(I) or
(A)(II) above, as the case may be.
(c) NOTICE OF INTEREST RATE. (i) Promptly after receipt
of a Notice of Borrowing pursuant to SECTION 2.02, Lender shall give notice to
the Company and any Loan Servicer of the applicable interest rate determined by
Lender for purposes of CLAUSE (A)(I) or (II).
(ii) Lender (or a Loan Servicer on behalf of Lender)
shall, on each Determination Date, determine and provide each applicable
Borrower with a statement of the Eurodollar Rate applicable for the related
Interest Period and the applicable interest rate for the related Interest
Period. After determining the applicable interest rate, Lender (or a Loan
Servicer on behalf of Lender) shall calculate the aggregate interest payment
payable on the applicable Loan on the relevant Interest Payment Date and shall,
as soon as practicable, notify the related Borrower of such rates and the amount
of the applicable interest installments. The determination of the interest rate
payable on each Loan and the calculation of each interest installment by Lender
(or a Loan Servicer on behalf of Lender) shall, in the absence of manifest
error, be final and binding; provided, however, that any error in the
determination of such interest rates and the calculation of each interest
installment made by Lender (or a Loan Servicer on behalf of Lender) shall not
relieve any Borrower from its obligations hereunder.
SECTION 2.07. [RESERVED].
SECTION 2.08. FEES. (a) ORIGINATION FEE. On the Effective
Date, the Company shall pay to Lender a nonrefundable origination fee in the
amount of Three Million and 00/100 Dollars ($3,000,000.00)
SECTION 2.09. INCREASED COSTS, ETC. (a) If, due to either (i)
the introduction of or any change in or in the interpretation of any law or
regulation or (ii) the compliance with any guideline or request from any central
bank or other governmental authority (whether or not having the force of law),
there shall be any increase in the cost to Lender of agreeing to make or of
making, funding or maintaining any Loan as a Eurodollar Rate Loan (excluding for
purposes of this SECTION 2.09 any such increased costs resulting from (i) Taxes
or Other Taxes (as to which SECTION 2.11 shall govern) and (ii) changes in the
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basis of taxation of overall net income or overall gross income by the United
States or by the foreign jurisdiction or state under the laws of which Lender is
organized or has its Applicable Lending Office or any political subdivision
thereof), then the related Borrower shall from time to time, upon notice thereof
and demand by Lender therefor, pay to Lender additional amounts sufficient to
compensate Lender for such increased cost. A certificate as to the amount of
such increased cost, submitted to such Borrower by Lender, shall be conclusive
and binding for all purposes, absent manifest error.
(b) If, due to either (i) the introduction of or any
change in or in the interpretation of any law or regulation or (ii) the
compliance with any guideline or request from any central bank or other
governmental authority (whether or not having the force of law), there shall be
any increase in the amount of capital required or expected to be maintained by
Lender or any corporation controlling Lender as a result of or based upon the
existence of Lender's commitment to lend hereunder and other commitments of such
type, then, upon demand by Lender, applicable Borrower shall pay to Lender, from
time to time as specified by Lender, additional amounts sufficient to compensate
Lender in the light of such circumstances, to the extent that Lender reasonably
determines such increase in capital to be allocable to the existence of Lender's
commitment to lend hereunder. A certificate as to such amounts submitted to the
Company by Lender shall be conclusive and binding for all purposes, absent
manifest error.
(c) If Lender notifies any Borrower that the Eurodollar
Rate for any Interest Period for any Loan will not adequately reflect the cost
to Lender of making, funding or maintaining its related Loan for such Interest
Period, (i) such Loan will automatically, on the last day of the then existing
Interest Period therefor, convert from a Eurodollar Rate Loan into a Base Rate
Loan and (ii) the obligation of Lender to maintain such Loan as a Eurodollar
Rate Loan shall be suspended until Lender shall notify such Borrower that it has
determined that the circumstances causing such suspension no longer exist.
(d) Notwithstanding any other provision of this
Agreement, if the introduction of or any change in or in the interpretation of
any law or regulation shall make it unlawful, or any central bank or other
governmental authority shall assert that it is unlawful, for Lender or its
Eurodollar Lending Office to perform its obligations hereunder to fund or
maintain any Loan as a Eurodollar Rate Loan hereunder, then, on notice thereof
and demand therefor by Lender to any applicable Borrower (i) such Loan will
automatically, upon such demand, convert into a Base Rate Loan and (ii) the
obligation of Lender to make or maintain such Loan as a Eurodollar Rate Loan
shall be suspended until Lender shall notify each such Borrower that it has
determined that the circumstances causing such suspension no longer exist.
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SECTION 2.10. PAYMENTS AND COMPUTATIONS. (a) Each Borrower
shall make each payment hereunder and under its related Note, irrespective of
any right of counterclaim or set-off, not later than 11:00 A.M. (New York City
time) on each Interest Payment Date in U.S. dollars to Lender at Lender's
Account in same day funds.
(b) All computations of interest and fees with respect to
the Loans shall be made by Lender (or any Loan Servicer on behalf of Lender) on
the basis of a year of 360 days, in each case for the actual number of days
(including the first day but excluding the last day) occurring in the period for
which such interest, fees or commissions are payable. Each determination by
Lender (or any Loan Servicer on behalf of Lender) of an interest rate or fee
hereunder shall be conclusive and binding for all purposes, absent manifest
error.
(c) Whenever any payment hereunder or under any Note
shall be stated to be due on a day other than a Business Day, such payment shall
be made on the next succeeding Business Day, and such extension of time shall in
such case be included in the computation of payment of interest; provided,
however, that, if such extension would cause payment of interest on or principal
of any Loan (at any time during which such Loan is a Eurodollar Rate Loan) to be
made in the next following calendar month, such payment shall be made on the
next preceding Business Day.
SECTION 2.11. TAXES. (a) Any and all payments by each Borrower
under its related Note shall be made, in accordance with SECTION 2.10 and the
terms of such Note, free and clear of and without deduction for any and all
present or future taxes, levies, imposts, deductions, charges or withholdings,
and all liabilities with respect thereto, excluding taxes that are imposed on
Lender's overall net income by the United States and taxes that are imposed on
Lender's overall net income (and franchise taxes imposed in lieu thereof) by the
state or foreign jurisdiction under the laws of which Lender is organized or any
political subdivision thereof and taxes that are imposed on Lender's overall net
income (and franchise taxes imposed in lieu thereof) by the state or foreign
jurisdiction of Lender's Applicable Lending Office or any political subdivision
thereof (all such excluded taxes being hereafter referred to as "EXCLUDED TAXES"
and all such non-excluded taxes, levies, imposts, deductions, charges,
withholdings and liabilities in respect of payments hereunder or under the Notes
being hereinafter referred to as "TAXES"). If any Borrower shall be required by
law to deduct any Taxes from or in respect of any sum payable under its related
Note to Lender (i) the sum payable shall be increased as may be necessary so
that after making all required deductions (including deductions applicable to
additional sums payable under this
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SECTION 2.11) Lender receives an amount equal to the sum it would have received
had no such deductions been made, (ii) such Borrower shall make such deductions
and (iii) such Borrower shall pay the full amount deducted to the relevant
taxation authority or other authority in accordance with applicable law.
(b) In addition, each Borrower shall pay any present or
future stamp, documentary, excise, property or similar taxes, charges or levies
that arise from any payment made hereunder or under its related Note or from the
execution, delivery or registration of, performance under, or otherwise with
respect to, this Agreement or its related Note or any related Project Loan
Document other than Excluded Taxes (hereinafter referred to as "OTHER TAXES").
(c) Each Borrower shall indemnify Lender for and hold it
harmless against the full amount of Taxes and Other Taxes, and for the full
amount of taxes of any kind imposed by any jurisdiction on amounts payable under
this SECTION 2.11, imposed on or paid by Lender and any liability (including
penalties, additions to tax, interest and expenses) arising therefrom or with
respect thereto. This indemnification shall be made within thirty (30) days from
the date Lender makes written demand therefor.
(d) Within thirty (30) days after the date of any payment
of Taxes, each applicable Borrower shall furnish to Lender, at its address
referred to in SECTION 8.02, the original or a certified copy of a receipt
evidencing such payment. In the case of any payment hereunder or under any Note
by or on behalf of any Borrower through an account or branch outside the United
States or by or on behalf of any Borrower by a payor that is not a United States
person, if such Borrower determines that no Taxes are payable in respect
thereof, such Borrower shall furnish, or shall cause such payor to furnish, to
Lender, at such address, an opinion of counsel acceptable to Lender stating that
such payment is exempt from Taxes. For purposes of this SUBSECTION (D) and
SUBSECTION (E), the terms "UNITED STATES" and "UNITED STATES PERSON" shall have
the meanings specified in SECTION 7701 of the Internal Revenue Code.
(e) Lender shall, on or prior to the date of its
execution and delivery of this Agreement, and from time to time thereafter as
requested in writing by any Borrower (but only so long thereafter as Lender
remains lawfully able to do so), provide such Borrower with two (2) original
Internal Revenue Service forms 1001 or 4224, as appropriate, or any successor or
other form prescribed by the Internal Revenue Service, certifying that Lender is
exempt from or entitled to a reduced rate of United States withholding tax on
payments pursuant to this Agreement or the Notes. If any form or document
referred to in this
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SUBSECTION (E) requires the disclosure of information, other than information
necessary to compute the tax payable and information required on the date hereof
by Internal Revenue Service form 1001 or 4224 that Lender reasonably considers
to be confidential, Lender shall give notice thereof to such Borrower and shall
not be obligated to include in such form or document such confidential
information.
(f) For any period with respect to which Lender has
failed to provide any Borrower with the appropriate form described in SUBSECTION
(E) above (other than if such failure is due to a change in law occurring after
the date on which a form originally was required to be provided or if such form
otherwise is not required under SUBSECTION (E) above), Lender shall not be
entitled to indemnification under subsection (a) or (c) with respect to Taxes
imposed by the United States by reason of such failure; provided, however, that
should Lender become subject to Taxes because of its failure to deliver a form
required hereunder, such Borrower shall take such steps as Lender Party shall
reasonably request to assist Lender to recover such Taxes.
SECTION 2.12. USE OF PROCEEDS. The proceeds of the Loans shall
be available (and the Company shall cause the applicable Borrower to use such
proceeds) solely to repay the related Construction Loan with respect to the
related Project and pay and reimburse the Company and others for transaction
fees and expenses.
SECTION 2.13. LATE CHARGE. Subject to SECTION 8.12, in the
event that any installment of interest or principal with respect to any Loan
shall become overdue for a period in excess of five (5) days, a "late charge" in
an amount equal to five percent (5%) of the amount so overdue may be charged to
the applicable Borrower by Lender for the purpose of defraying the expenses
incident to handling such delinquent payments. Subject to SECTION 8.12, such
late charge shall be in addition to, and not in lieu of, any other remedy Lender
may have and is in addition to Lender's right to collect reasonable fees and
charges of any agents or attorneys which Lender may employ in connection with
any Default.
SECTION 2.14. SECURITY FOR THE LOANS. Each Loan shall
constitute one general obligation of the applicable Borrower to Lender and each
Borrower's obligations hereunder and under the other Loan Documents shall be
secured by the applicable (a) Mortgage, (b) Security Agreement, (c) other
Collateral Documents and (d) the security interests and Liens granted in this
Agreement and in the other Loan Documents with respect to such Loan. Each Loan
shall be cross-collateralized with each other Loan made pursuant to this
Agreement and any Default or Event of Default under one of the Loans shall
constitute a Default or Event of Default of all the Loans.
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SECTION 2.15. THE NOTES. The obligation of each Borrower to
pay the principal of and interest on each Loan shall be evidenced by a Note,
duly executed and delivered by the applicable Borrower on the applicable Closing
Date. Each Note shall be payable as to principal, interest and all other amounts
due under the Loan Documents, as specified in this agreement, the applicable
Note and the other applicable Loan Documents.
SECTION 2.16. TERMINATION OF COMMITMENT. Anything to the
contrary provided in this Agreement notwithstanding, the Commitment of Lender
hereunder shall automatically terminate if the Effective Date has not occurred
on or prior to October __, 1998.
ARTICLE III
CONDITIONS OF LENDING
SECTION 3.01. CONDITIONS PRECEDENT TO EFFECTIVE DATE. The
obligations of Lender under this Agreement, including the obligation to make any
Loans hereunder, shall become effective on the date (the "EFFECTIVE DATE") upon
which the following conditions precedent have been satisfied:
(a) There shall have occurred no Material Adverse Change
with respect to the Company since March 17, 1998.
(b) Lender shall have received the following, each in
form and substance satisfactory to Lender (unless otherwise specified):
(i) Certified copies of the resolutions of the
Board of Directors of the Company approving this Agreement and
each other Loan Document to which it is or is to be a party,
and of all documents evidencing other necessary corporate
action and governmental and other third party approvals and
consents, if any, with respect to this Agreement and each
other Loan Document.
(ii) A copy of the Organizational Documents of
the Company, together with each amendment thereto, and, in the
case of the certificate of incorporation of the Company,
certified by the Secretary of State of the jurisdiction of its
formation or incorporation as being a true and correct copy
thereof.
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(iii) A copy of a certificate of the Secretary of
State of the jurisdiction of its incorporation, dated
reasonably near the Effective Date, certifying that (A) the
Company has paid all franchise taxes to the date of such
certificate and (B) the Company is duly incorporated or formed
and in good standing under the laws of the State of the
jurisdiction of its organization.
(iv) A certificate of the Company, signed on
behalf of the Company by its President or a Vice President and
its Secretary or any Assistant Secretary, dated the Effective
Date (the statements made in which certificate shall be true
on and as of the Effective Date), certifying as to (A) the
truth of the representations and warranties contained in the
Loan Documents as though made on and as of the Effective Date
and (B) the absence of any event occurring and continuing that
constitutes a Default.
(v) A certificate of the Secretary or an
Assistant Secretary of the Company certifying the names and
true signatures of the officers of the Company authorized to
sign this Agreement and each other Loan Document to which the
company is or is to be a party and the other documents to be
delivered hereunder and thereunder.
(vi) The Guaranty executed by the Guarantor.
(vii) A favorable opinion of counsel for the
Company acceptable to Lender, as to the enforceability of this
Agreement and the Guaranty, in form and substance satisfactory
to Lender.
SECTION 3.02. CONDITIONS PRECEDENT TO ISSUANCE OF A PROJECT
COMMITMENT. The obligation of Lender to issue each Project Commitment and
Take-Out Agreement with respect to a Loan hereunder is subject to the
satisfaction of the following conditions precedent before or concurrently with
the issuance of the applicable Project Commitment (the "COMMITMENT DATE"):
(a Lender shall have completed a due diligence
investigation of the applicable Project and determined, in its sole
discretion, that such Project meets Lender's underwriting standards,
which due diligence investigation may include, without limitation:
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(i) review of environmental reports,
architectural and engineering reports, management, title
reports, surveys, insurance policies and other information and
materials requested by Lender with respect to issues affecting
or potentially affecting (A) the feasibility, viability and
quality of the applicable Project and (B) the ability of the
applicable Project to generate stabilized cashflows, net
operating income and net operating cash flow;
(ii) review of such projected financial
information and references with respect to such Project as
Lender deems necessary; and
(iii) a site inspection of the Project; and
(iv) an Appraisal of the Project performed by an
Appraiser.
(b) The representations and warranties of the Company
contained in each Loan Document to which the Company is a party shall
be true and correct on and as of the applicable Commitment Date, before
and after giving effect to the making of the applicable Loan by Lender
and to the application of the proceeds therefrom, as though made on and
as of such date.
(c) No event shall have occurred and be continuing, or
would result from the making of the applicable Loan by Lender or from
the application of the proceeds therefrom, that constitutes a Default.
(d) Before giving effect to the transactions contemplated
by the applicable Project Commitment, there shall have occurred no
Material Adverse Change.
(e) There shall exist no action, suit, investigation,
litigation or proceeding affecting the Company pending or threatened
before any court, governmental agency or arbitrator that (i) would be
reasonably likely to have a Material Adverse Change or (ii) purports to
affect the legality, validity or enforceability of this Agreement, any
Note, any other Loan Document or the consummation of the transactions
contemplated hereby.
(f) The Company shall have paid all accrued fees and
expenses of Lender which each such Loan Party is required to pay under
the Loan Documents (including the accrued fees and expenses of counsel
to Lender and local counsel to Lender).
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(g) The Company shall not have been involved in any
merger as a result of which the Company is not the surviving entity and
no other Change or Control of the Company shall have occurred other
than a Permitted Change of Control.
(h) The issuance of such Project Commitment to the
applicable Borrower and the funding of the related Loan shall not
exceed the limitations set forth in SECTION 2.02(E).
SECTION 3.03. CONDITIONS PRECEDENT TO FUNDING EACH LOAN. The
obligation of Lender to fund each Loan hereunder is subject to the satisfaction
of the conditions precedent set forth in the applicable Project Commitment
issued with respect to such Loan.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
SECTION 4.01. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
The Company represents and warrants as follows:
(a) The Company (i) is a corporation duly organized,
validly existing and in good standing under the laws of the
jurisdiction of its incorporation, (ii) is duly qualified and in good
standing in each other jurisdiction in which it owns or leases property
or in which the conduct of its business requires it to so qualify or be
licensed except where the failure to so qualify or be licensed would
not have a Material Adverse Effect and (iii) has all requisite power
and authority (including, without limitation, all governmental
licenses, permits and other approvals) to own or lease and operate its
properties and to carry on its business as now conducted and as
proposed to be conducted.
(b) The execution, delivery and performance by the
Company of this Agreement and each other Loan Document to which it is
or is to be a party, and the consummation of the transactions
contemplated hereby, are within the Company's corporate powers, have
been duly authorized by all necessary corporate action, and do not (i)
contravene the Company's certificate of incorporation or by-laws, (ii)
violate
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any law (including, without limitation, the Securities Exchange Act of
1934 and the Racketeer Influenced and Corrupt Organizations Chapter of
the Organized Crime Control Act of 1970), rule, regulation (including,
without limitation, Regulation X of the Board of Governors of the
Federal Reserve System), order, writ, judgment, injunction, decree,
determination or award, (iii) conflict with or result in the breach of,
or constitute a default under, any contract, loan agreement, indenture,
mortgage, deed of trust, lease or other instrument binding on or
affecting the Company, any of its Subsidiaries or any of their
properties or (iv) except for the Liens created under the Loan
Documents, result in or require the creation or imposition of any Lien
upon or with respect to any of the properties of the Company or any of
its Subsidiaries. Neither the Company nor any of its Subsidiaries is in
violation of any such law, rule, regulation, order, writ, judgment,
injunction, decree, determination or award or in breach of any such
contract, loan agreement, indenture, mortgage, deed of trust, lease or
other instrument, the violation or breach of which is reasonably likely
to have a Material Adverse Effect.
(c) No authorization or approval or other action by, and
no notice to or filing with, any governmental authority or regulatory
body or any other third party is required for (i) the due execution,
delivery, recordation, filing or performance by the Company of this
Agreement or any other Loan Document to which it is or is to be a
party, or for the consummation of the transactions contemplated hereby,
(ii) the grant by the Borrower of the Liens granted by it pursuant to
the Collateral Documents, (iii) the perfection or maintenance of the
Liens created by the Collateral Documents (including the first priority
nature thereof) or (iv) the exercise by Lender of its rights under the
Loan Documents or the remedies in respect of the Collateral pursuant to
the Collateral Documents.
(d) This Agreement has been, and each other Loan Document
to which the Company is or is to be a party when delivered hereunder
will have been, duly executed and delivered by the Company. This
Agreement is, and each other Loan Document to which the Company is a
party when delivered hereunder will be, the legal, valid and binding
obligation of the Company, enforceable against the Company in
accordance with its terms.
(e) The consolidated balance sheet of the Company as of
March 31, 1998 and the related consolidated statement[s] of income and
Consolidated statement of cash flows of the Company and its
Subsidiaries for the fiscal year then ended, copies of which have been
furnished to Lender, fairly present the consolidated financial
condition of the Company and its Subsidiaries as at such date and the
consolidated
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results of the operations of the Company and its Subsidiaries for the
period ended on such date, all in accordance with generally accepted
accounting principles applied on a consistent basis, and since March
31, 1998 there has been no Material Adverse Change.
(f) No information, exhibit or report furnished by the
Company or any of its Affiliates or shareholders to Lender in
connection with the negotiation of the Loan Documents or pursuant to
the terms of the Loan Documents contained any untrue statement of a
material fact or omitted to state a material fact necessary to make the
statements made therein not misleading.
(g) There is no action, suit, investigation, litigation
or proceeding affecting the Company or any of its Subsidiaries,
including any Environmental Action, pending or threatened before any
court, governmental agency or arbitrator that (i) would be reasonably
likely to have a Material Adverse Effect or (ii) purports to affect the
legality, validity or enforceability of this Agreement or any other
Loan Document or the consummation of the transactions contemplated
hereby.
(h) No proceeds of any Loan will be used to acquire any
equity security of a class that is registered pursuant to Section 12 of
the Securities Exchange Act of 1934.
(i) The Company is not engaged in the business of
extending credit for the purpose of purchasing or carrying Margin
Stock, and no proceeds of any Loan will be used to purchase or carry
any Margin Stock or to extend credit to others for the purpose of
purchasing or carrying any Margin Stock.
(j) The Company is not and will not be an "employee
benefit plan" as defined in Section 3(3) of ERISA, which is subject to
Title I of ERISA, and the assets of the Company do not and will not
constitute "plan assets" of one or more such plans for purposes of
Title I of ERISA.
(k) The Company (1) is not and will not be a
"governmental plan" within the meaning of Section 3(32) of ERISA and
transactions by or with the Company are not and will not be subject to
state statutes applicable to the Company regulating investments of and
fiduciary obligations with respect to governmental plans and (2) one or
more of the following circumstances is true:
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(A) equity interests in the Company or publicly
offered securities within the meaning of 29 C.F.R. ss.
2510.3-101(b)(2);
(B) less than twenty-five percent (25%) of each
outstanding class of equity interests in the Company are held
by "benefit plan investors" within the meaning of 29 C.F.R.
ss.2510.3-101(f)(2); or (C) the Company qualifies as an
"operating company" or a "real estate operating company"
within the meaning of 29 C.F.R. ss. 2510.3-101(c) or (e) or an
investment company registered under the Investment Company Act
of 1940.
(l) The Company is not (i) an "investment company" or a
company "controlled" by an "investment company", within the meaning of
the Investment Company Act of 1940, as amended, (ii) a "holding
company" or a "subsidiary company" of a "holding company" or an
"affiliate" of either a "holding company" or a "subsidiary company"
within the meaning of the Public Utility Holding Company Act of 1935,
as amended, or (iii) subject to any other Law that purports to restrict
or regulate its ability to borrow money.
(m) The Company and each of its Subsidiaries and
Affiliates has filed, has caused to be filed or has been included in
all tax returns (Federal, state, local and foreign) required to be
filed (or has obtained valid extensions of the deadlines to file) and
has paid all taxes shown thereon to be due, together with applicable
interest and penalties.
(n) The Company is, individually and together with its
Subsidiaries, Solvent.
(o) The location of the Company's principal place of
business and chief executive office is as set forth in SECTION 8.02.
(p) The Company is not a "foreign person" within the
meaning of ss.1445(f)(3) of the Internal Revenue Code.
(q) The Company is not a party to any collective
bargaining agreements.
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ARTICLE V
COVENANTS OF COMPANY
SECTION 5.01. AFFIRMATIVE COVENANTS. So long as any portion of
any Loan shall remain unpaid, the Company will:
(a) Payment of Taxes, Etc. Pay and discharge, before the
same shall become delinquent, (i) all taxes, assessments and
governmental charges or levies imposed upon it or upon its property and
(ii) all lawful claims that, if unpaid, might by law become a Lien upon
any of the Projects; provided, however, that the Company shall not be
required to pay or discharge any such tax, assessment, charge or claim
that is being contested in good faith and by proper proceedings and as
to which appropriate reserves are being maintained, unless and until
any Lien resulting therefrom attaches to its property and becomes
enforceable against its other creditors;
(b) Preservation of Existence, Etc. Preserve and maintain
its existence, legal structure, legal name, rights (charter and
statutory), permits, licenses, approvals, privileges and franchises;
provided, however, that the Company shall not be required to preserve
any right, permit, license, approval, privilege or franchise if the
Board of Directors of the Company shall determine that the preservation
thereof is no longer desirable in the conduct of the business of the
Company, as the case may be, and that the loss thereof would not result
in a Material Adverse Effect;
(c) Keeping of Books. Keep proper books of record and
account, in which full and correct entries shall be made of all
financial transactions and the assets and business of the Company in
accordance with generally accepted accounting principles in effect from
time to time; and
(d) ERISA. Deliver to Lender such certifications or other
evidence from time to time throughout the term of the Loan, as
reasonably requested by Lender, that (i) the Company is not an
"employee benefit plan" as defined in Section 3(3) of ERISA, which is
subject to Title I of ERISA, or a "governmental plan" within the
meaning of Section 3(32) of ERISA; (ii) the Company is not subject to
state statutes regulating investments and fiduciary obligations with
respect to governmental plans; and (iii) one or more of the following
circumstances is true:
(A) equity interests in the Company are publicly
offered securities, within the meaning of 29 C.F.R. ss.
2510.3-101(b)(2);
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(B) less than twenty-five percent (25%) of each
outstanding class of equity interests in the Company are held
by "benefit plan investors" within the meaning of 29 C.F.R.
ss. 2510.3-101(f)(2); or
(C) the Company qualifies as an "operating
company" or a "real estate operating company" within the
meaning of 29 C.F.R. ss. 2510.3-101(c) or (e) or an investment
company registered under The Investment Company Act of 1940.
(e) Net Worth. From and after any Permitted Change of
Control, maintain a net worth (determined in accordance with GAAP) of
at least One Hundred Fifty Million and 00/100 Dollars
($150,000,000.00).
SECTION 5.02. NEGATIVE COVENANTS. So long as any portion of
any Loan shall remain unpaid, the Company will not, at any time:
(a) Change in Nature of Business. Make, or permit any of
its Subsidiaries to make, any material change in the nature of its
business as carried on at the date hereof;
(b) Accounting Changes. Make or permit, or permit any of
its Subsidiaries to make or permit, any change in accounting policies
or reporting practices, except as required by GAAP; or
(c) ERISA. Engage in any transaction which would cause
any obligation, or action taken or to be taken, hereunder (or the
exercise by Lender of any of its rights under this Agreement and the
Loan Documents) to be a nonexempt (under a statutory or administrative
class exemption) prohibited transaction under ERISA.
SECTION 5.03. REPORTING REQUIREMENTS. So long as any portion
of the Loan shall remain unpaid, the Company will furnish to Lender:
(a) [Reserved]
(b) Quarterly Financials. As soon as available, and in
any event within forty-five (45) days after the end of each quarter, a
balance sheet of the Company as of the end of such month and a
statement of income and a statement of cash
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flows of the Company for such quarter and a statement of income and a
statement of cash flows of the Company for such quarter, in each case
in comparative form the corresponding figures (i) set forth in the
applicable budget for such Fiscal Year and (ii) for the corresponding
quarter of the preceding Fiscal Year, all in reasonable detail and duly
certified by the Company.
(c) Annual Financials. As soon as available, and in any
event within ninety (90) days after the end of each Fiscal Year, a
balance sheet of the Company as of the end of such Fiscal Year and a
statement of income and a statement of cash flows of the Company for
such Fiscal Year, in each case accompanied by an unqualified opinion of
independent public accountants of nationally recognized standing
acceptable to the Lender.
(d) [Reserved]
(e) Litigation. Promptly after the commencement thereof,
notice of all actions, suits, investigations, litigation and
proceedings before any court or governmental department, commission,
board, bureau, agency or instrumentality, domestic or foreign,
affecting any Loan Party or any of its Subsidiaries of the type
described in SECTION 4.01(G);
(f) Environmental Conditions. Promptly after the
assertion or occurrence thereof, notice of any Environmental Action
against or of any material noncompliance by any of the Projects with
any Environmental Law or Environmental Permit;
(g) Other Information. Such other information respecting
the business, condition (financial or otherwise), operations,
performance, properties or prospects of any Loan Party as Lender may
from time to time reasonably request.
ARTICLE VI
EVENTS OF DEFAULT
SECTION 6.01. EVENTS OF DEFAULT. If any of the following
events ("EVENTS OF DEFAULT") shall occur and be continuing:
(a) the Company shall fail to make any payment required
hereunder or under any related Loan Documents, within five (5) days
after the same becomes due and payable; or
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(b) any representation or warranty made by the Company
(or any of its officers) under or in connection with any Loan Document
shall prove to have been incorrect in any material respect when made;
or
(c) [Reserved];
(d) if a Change of Control has occurred with respect to
the Company or the Guaranty, other than (i) a Permitted Change of
Control or (ii) Change of Control resulting from the death or
incapacity of any natural person; or
(e) [Reserved]; or
(f) [Reserved]; or
(g) if the Company shall violate or fail to comply with
any of the provisions of SECTION 5.02; or
(h) [Reserved]; or
(i) if the Company or Guarantor shall fail to perform any
other term, covenant or agreement contained in any Loan Document on its
part to be performed or observed if such failure shall remain
unremedied for thirty (30) days after the earlier of the date on which
(A) a Responsible Officer becomes aware of such failure or (B) written
notice thereof shall have been given to the Company by Lender, provided
that if such failure is susceptible to cure but cannot be cured within
such thirty (30) day period and such Loan Party commences action to
cure such failure within such thirty (30) day period and diligently and
continuously prosecutes such cure to completion, such thirty (30) day
period shall be extended for up to an additional sixty (60) days; or
(j) the Company or Guarantor shall admit in writing its
inability to pay its debts generally, or shall make a general
assignment for the benefit of creditors; or any proceeding shall be
instituted by or against the Company or Guarantor seeking to adjudicate
it a bankrupt or insolvent, or seeking liquidation, winding up,
reorganization, arrangement, adjustment, protection, relief or
composition of it or its debts under any law relating to bankruptcy,
insolvency or reorganization or relief of
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debtors, or seeking the entry of an order for relief or the appointment
of a receiver, trustee or other similar official for it or for any
substantial part of its property and, in the case of any such
proceeding instituted against it (but not instituted by it) that is
being diligently contested by it in good faith, either such proceeding
shall remain undismissed or unstayed for a period of sixty (60) days or
any of the actions sought in such proceeding (including, without
limitation, the entry of an order for relief against, or the
appointment of a receiver, trustee, custodian or other similar official
for, it or any substantial part of its property) shall occur; or the
Company or Guarantor shall take any corporate action to authorize any
of the actions set forth above in this SUBSECTION (J); or
(k) [Reserved]; or
(l) any nonmonetary judgment or order shall be rendered
against the Company or Guarantor that is reasonably likely to have a
Material Adverse Effect, and there shall be any period of ten (10)
consecutive days during which a stay of enforcement of such judgment or
order, by reason of a pending appeal or otherwise, shall not be in
effect; or
(m) any material provision of any Loan Document after
delivery thereof shall for any reason cease to be valid and binding on
or enforceable against the Company or Guarantor to it, or the Company
or Guarantor shall so state in writing; or
then, and in any such event, Lender (i) may by notice to the Company or each of
the Borrowers, declare each of the Notes, all interest thereon and all other
amounts payable under this Agreement and the other Loan Documents to be
forthwith due and payable, whereupon the Notes, all such interest and all such
amounts shall become and be forthwith due and payable, without presentment,
demand, protest or further notice of any kind, all of which are hereby expressly
waived by the Company and (ii) immediately terminate any unadvanced portion of
the Commitment; provided, however, that Lender agrees to fund any and all
amounts of any existing Project Commitments; and provided further that, in the
event of an actual or deemed entry of an order for relief with respect to any
Loan Party under the Federal Bankruptcy Code, all of the Notes, all such
interest and all such amounts shall automatically become and be due and payable,
without presentment, demand, protest or any notice of any kind, all of which are
hereby expressly waived by each Borrower, and any unadvanced portion of the
Commitment shall be immediately and automatically terminated.
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ARTICLE VII
SECONDARY MARKET; SERVICING
SECTION 7.01. ASSIGNMENTS AND PARTICIPATIONS. (a) Lender may
assign to one or more Persons all or a portion of its rights and obligations
under this Agreement or any Loan (including, without limitation, all or a
portion of any Note); provided that the parties to each such assignment shall
execute and deliver to Lender, for its acceptance and recording in the Register,
an Assignment and Acceptance.
(b) Upon such execution, delivery, acceptance and
recording, from and after the effective date specified in such Assignment and
Acceptance, (x) the Assignee thereunder shall be a party hereto and, to the
extent that rights and obligations hereunder have been assigned to it pursuant
to such Assignment and Acceptance, have the rights and obligations of a Lender,
as the case may be, hereunder and (y) Lender assignor thereunder shall, to the
extent that rights and obligations hereunder have been assigned by it pursuant
to such Assignment and Acceptance, relinquish its rights and be released from
its obligations under this Agreement (and, in the case of an Assignment and
Acceptance covering all or the remaining portion of an assigning Lender's rights
and obligations under this Agreement or with respect to a particular Loan, such
Lender shall cease to be a party hereto or to such Loan Documents, as the case
may be). The foregoing notwithstanding, Lender shall not be released from its
obligations hereunder to issue Project Commitments or fund Loans thereunder
unless the applicable Assignee shall be approved by the Company and any
Construction Lender.
(c) Lender shall maintain at its address referred to in
SECTION 8.02 a copy of each Assignment and Acceptance delivered to and accepted
by it and a register for the recordation of the names and addresses of Lender
Parties and the principal amount of the Loan owing to each Lender from time to
time (the "REGISTER"). The entries in the Register shall be conclusive and
binding for all purposes, absent manifest error, and the applicable Borrower,
Lender and Lender Parties shall treat each Person whose name is recorded in the
Register as a Lender Party hereunder for all purposes of this Agreement. The
Register shall be available for inspection by the applicable Borrower or any
Lender Party at any reasonable time and from time to time upon reasonable prior
notice.
(d) Upon its receipt of an Assignment and Acceptance
executed by an assigning Lender Party and an assignee, together with any Note or
Notes subject to such assignment, Lender shall, if such Assignment and
Acceptance has been completed and is in
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substantially the form of EXHIBIT B hereto, (i) accept such Assignment and
Acceptance, (ii) record the information contained therein in the Register and
(iii) give prompt notice thereof to the applicable Borrower and the Company. In
the case of any assignment by a Lender, within five (5) Business Days after its
receipt of such notice, the applicable Borrower, at its own expense, shall
execute and deliver to Lender in exchange for the surrendered Note or Notes a
new Note to the order of such Assignee in an amount equal to the portion of the
applicable Loan(s) assigned to it and a new Note to the order of the assigning
Lender in an amount equal to the portion of the applicable Loan(s) retained by
it hereunder. Such new Note or Notes shall be in an aggregate principal amount
equal to the aggregate principal amount of such surrendered Note or Notes, shall
be dated the effective date of such Assignment and Acceptance and shall
otherwise be in substantially the form of the Note.
(e) Each Lender Party may sell participations to one or
more Persons (other than any Loan Party or any of its Affiliates) in or to all
or a portion of its rights and obligations under this Agreement (including,
without limitation, all or a portion of the Notes held by it); provided,
however, that (i) such Lender Party's obligations under this Agreement shall
remain unchanged, (ii) such Lender Party shall remain solely responsible to the
other parties hereto for the performance of such obligations, (iii) such Lender
Party shall remain the holder of any such Notes for all purposes of this
Agreement and (iv) the applicable Borrower, Lender and the other Lender Parties
shall continue to deal solely and directly with such Lender Party in connection
with such Lender Party's rights and obligations under this Agreement.
(f) Any Lender Party may, in connection with any
assignment or participation or proposed assignment or participation pursuant to
this SECTION 7.01, disclose to the assignee or participant or proposed assignee
or participant, any information relating to the applicable Borrower furnished to
such Lender Party by or on behalf of such Borrower.
(g) Notwithstanding any other provision set forth in this
Agreement, any Lender Party may at any time create a security interest in all or
any portion of its rights under this Agreement (including, without limitation,
the Loans owing to it and the Note or Notes held by it) in favor of any Federal
Reserve Bank in accordance with Regulation A of the Board of Governors of the
Federal Reserve System.
SECTION 7.02. SECURITIZATION. Lender may elect to effect a
securitization of any of the Loans by means of the issuance of certificates of
interest therein or notes secured thereby (the "SECURITIES") rated by one or
more Rating Agencies (the
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"SECURITIZATION"). In such event and upon request by Lender, the Company and
each applicable Borrower shall cooperate in all reasonable respects with Lender
in the Securitization, including, but not limited to, (i) amending this
Agreement and the other Loan Documents, and executing and delivering such
additional documents, as may be requested by a Rating Agency; (ii) providing
such information as may be requested in connection with the preparation of a
private placement memorandum or registration statement required to privately
place or publicly distribute the Securities in a manner which does not conflict
with federal or state securities laws; (iii) providing in connection with such
information an indemnification certificate (A) certifying that such Borrower has
carefully examined such private placement memorandum or registration statement,
as applicable, including, without limitation, the sections entitled "Special
Considerations", "Description of the Mortgage Loan and the Underlying Mortgaged
Properties", "Operator", "The Mortgagor" and "Certain Legal Aspects of the
Mortgage Loan" (or similarly titled sections), and that such Sections (and any
other sections reasonably requested), insofar as they relate to the applicable
Borrower, the Company, the applicable Loan or related Project, do not contain
any untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements made, in the light of the
circumstances under which they were made, not misleading, (B) indemnifying
Lender, the underwriter or placement agent and any of their Affiliates for any
losses, claims, damages or liabilities (the "LIABILITIES") to which such parties
may become subject insofar as the Liabilities arise out of or are based upon any
untrue statement or alleged untrue statement of any material fact relating to
such Borrower, the Company, the applicable Loan or the related Project to which
the Company and Borrower has certified to pursuant to CLAUSE (A) above or arise
out of or are based upon the omission or alleged omission to state therein a
material fact relating to such Borrower, the Company, the applicable Loan or the
related Project required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading and (C) agreeing to reimburse such parties for any legal or other
expenses reasonably incurred by such parties in connection with investigating or
defending the Liabilities; (iv) causing to be rendered such customary opinion
letters as may be requested by and satisfactory to any Rating Agency including,
without limitation, substantive nonconsolidation opinion letters and an opinion
letter from each local real estate counsel to such Borrower stating that the
assignment of the applicable Loan and the Loan Documents to a trustee in
connection with the Securitization is enforceable; (v) making such customary
representations, warranties and covenants with respect to such Borrower and the
related Project as may be requested by any Rating Agency, (vi) providing such
information regarding the related Project and such Borrower as may be requested
by a Rating Agency or potential investors in certificates or otherwise required
in connection with an election of REMIC or other tax status and ongoing
administration and reporting by any trust formed in connection with the
Securitization; and (vii) amending the related Borrower's or any partner
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or member of such Borrower's Organizational Documents to comply with CLAUSE (Y)
of EXHIBIT G or making such other changes to the structure of such Borrower or
such partners required by any Rating Agency to conform to requirements
customarily imposed in similar transactions. Notwithstanding any of the
Company's or the applicable Borrower's obligations under this SECTION 7.02,
neither the company nor any Borrower shall be obligated to pay any Rating Agency
fees or other of Lender's costs in connection with the Securitization, other
than any amounts payable by the Company or any applicable Borrower with respect
to the indemnity provided for in CLAUSE (B) of the preceding sentence.
SECTION 7.03. [RESERVED].
ARTICLE VIII
MISCELLANEOUS
SECTION 8.01. AMENDMENTS, ETC. No amendment or waiver of any
provision of this Agreement, the Notes or any other Loan Document, nor consent
to any departure by any Borrower therefrom, shall in any event be effective
unless the same shall be in writing and signed (or, in the case of the
Collateral Documents, consented to) by Lender, and then such waiver or consent
shall be effective only in the specific instance and for the specific purpose
for which given.
SECTION 8.02. NOTICES, ETC. All notices and other
communications provided for hereunder shall be in writing (including
telegraphic, telecopy or telex communication) and mailed, telegraphed,
telecopied, telexed or delivered, if to the Company or any Borrower, at 450 N.
Sunnyslope Road, Suite 300, Brookfield, Wisconsin 53005, Attention: Mark
Ohlendorf, Senior Vice President and at 1201 Pacific Avenue, Suite 1800, Tacoma,
Washington 98402, Attention: Mr David Boitano, Vice President, with a copy to
Rogers & Hardin, 299 Peachtree Street, N.E., Atlanta, Georgia 30303, Attention:
Carolyn B. Dobbins, Esq.; and if to Lender, at its address at 31 West 52nd
Street, New York, New York 10019, Attention: General Counsel, Real Estate
Finance, with a copy to the Loan Servicer; or as to each other party, at such
other address as shall be designated by such party in a written notice to any
Borrower and Lender. All such notices and communications shall, when mailed,
telegraphed, telecopied or telexed, be effective when deposited in the mails,
delivered to the telegraph company, transmitted by telecopier or confirmed by
telex answerback, respectively, except that notices and communications to Lender
pursuant to ARTICLE II, III or VII shall not be effective until received by
Lender. Delivery by telecopier of an executed counterpart of any amendment or
waiver of any provision of this Agreement,
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the Note or of any Exhibit hereto to be executed and delivered hereunder shall
be effective as delivery of a manually executed counterpart thereof. Any notice
delivered by Lender (or a Loan Servicer on behalf of Lender) shall be effective
if it (a) complies with this SECTION 8.02 and (b) identifies the applicable
Project with respect to the notice that is being delivered.
SECTION 8.03. NO WAIVER; REMEDIES. No failure on the part of
any Lender Party or Lender to exercise, and no delay in exercising, any right
hereunder or under any Note shall operate as a waiver thereof; nor shall any
single or partial exercise of any such right preclude any other or further
exercise thereof or the exercise of any other right. The remedies herein
provided are cumulative and not exclusive of any remedies provided by law.
SECTION 8.04. COSTS, EXPENSES. (a) The Company agrees to pay
or cause each Borrower to pay on demand (i) all reasonable costs and expenses of
Lender or the Loan Servicer in connection with the preparation, execution,
delivery, administration, modification and amendment of the Loan Documents
(including, without limitation, (A) all due diligence, collateral review,
transportation, computer, duplication, appraisal, Lender audit, insurance,
consultant, search, filing and recording fees and expenses and (B) the
reasonable fees and expenses of counsel for Lender or the Loan Servicer with
respect thereto, with respect to advising Lender or the Loan Servicer as to its
rights and responsibilities, or the perfection, protection or preservation of
rights or interests, under the Loan Documents, with respect to negotiations with
any Loan Party or with other creditors of any Loan Party or any of its
Subsidiaries arising out of any Default or any events or circumstances that may
give rise to a Default and with respect to presenting claims in or otherwise
participating in or monitoring any bankruptcy, insolvency or other similar
proceeding involving creditors' rights generally and any proceeding ancillary
thereto) and (ii) all costs and expenses of Lender or the Loan Servicer in
connection with the enforcement of the Loan Documents, whether in any action,
suit or litigation, any bankruptcy, insolvency or other similar proceeding
affecting creditors' rights generally (including, without limitation, the
reasonable fees and expenses of counsel for Lender and with respect thereto).
(b) The Company agrees to indemnify and hold harmless
Lender, the Loan Servicer and each of their respective Affiliates and their
officers, directors, employees, agents and advisors (each, an "INDEMNIFIED
PARTY") from and against any and all claims, damages, losses, liabilities and
expenses (including, without limitation, reasonable fees and expenses of
counsel) that may be incurred by or asserted or awarded against any Indemnified
Party, in each case arising out of or in connection with or by reason of
(including, without limitation, in connection with any investigation, litigation
or proceeding or preparation of a defense in connection therewith) (i) the
Loans, the actual or proposed use of the proceeds of
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the Loans, the Loan Documents or any of the transactions contemplated thereby,
or (ii) the actual or alleged presence of Hazardous Materials on any Project or
any Environmental Action relating in any way to any Project, except to the
extent such claim, damage, loss, liability or expense is found in a final,
non-appealable judgment by a court of competent jurisdiction to have resulted
from such Indemnified Party's gross negligence or willful misconduct. In the
case of an investigation, litigation or other proceeding to which the indemnity
in this SECTION 8.04(B) applies, such indemnity shall be effective whether or
not such investigation, litigation or proceeding is brought by any Loan Party,
its directors, shareholders or creditors or an Indemnified Party or any
Indemnified Party is otherwise a party thereto and whether or not the
transactions contemplated hereby are consummated. The Company also agrees not to
assert any claim against Lender or any of its Affiliates, or any of their
respective officers, directors, employees, attorneys and agents, on any theory
of liability, for special, indirect, consequential or punitive damages arising
out of or otherwise relating to the Loans, the actual or proposed use of the
proceeds of the Loans, the Loan Documents or any of the transactions
contemplated thereby. THE FOREGOING INDEMNITY AND AGREEMENT NOT TO ASSERT CLAIMS
EXPRESSLY APPLIES, WITHOUT LIMITATION, TO THE NEGLIGENCE (BUT NOT GROSS
NEGLIGENCE OR WILLFUL MISCONDUCT) OF THE INDEMNIFIED PARTIES.
(c) [Reserved]
(d) If any Loan Party fails to pay when due any costs,
expenses or other amounts payable by it under any Loan Document, including,
without limitation, fees and expenses of counsel and indemnities, such amount
may be paid on behalf of such Loan Party by Lender, in its sole discretion.
(e) Without prejudice to the survival of any other
agreement of any Loan Party hereunder or under any other Loan Document, the
agreements and obligations of each Borrower and the Company contained in
SECTIONS 2.11 and 2.13 and this SECTION 8.04 shall survive the payment in full
of principal, interest and all other amounts payable hereunder and under any of
the other Loan Documents.
SECTION 8.05. RIGHT OF SET-OFF. Upon the occurrence and during
the continuance of any Event of Default, Lender and each of its respective
Affiliates is hereby authorized at any time and from time to time, to the
fullest extent permitted by law, to set off and otherwise apply any and all
deposits (general or special, time or demand, provisional or final) at any time
held and other indebtedness at any time owing by Lender or such Affiliate
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to or for the credit or the account of any Borrower against any and all of the
Obligations of the applicable Borrower now or hereafter existing under this
Agreement and the related Note, irrespective of whether Lender shall have made
any demand under this Agreement or such Note and although such obligations may
be unmatured. Lender agrees promptly to notify such Borrower after any such
set-off and application; provided, however, that the failure to give such notice
shall not affect the validity of such set-off and application. The rights of
Lender and its respective Affiliates under this SECTION 8.05 are in addition to
other rights and remedies (including, without limitation, other rights of
set-off) that Lender and its respective Affiliates may have.
SECTION 8.06. BINDING EFFECT. This Agreement shall become
effective when it shall have been executed by the Company and Lender and
thereafter shall be binding upon and inure to the benefit of the Company and
Lender and their respective successors and assigns, except that the Company
shall not have the right to assign its rights hereunder or any interest herein
without the prior written consent of Lender.
SECTION 8.07. [RESERVED]
SECTION 8.08. EXECUTION IN COUNTERPARTS. This Agreement may be
executed in any number of counterparts and by different parties hereto in
separate counterparts, each of which when so executed shall be deemed to be an
original and all of which taken together shall constitute one and the same
agreement. Delivery of an executed counterpart of a signature page to this
Agreement by telecopier shall be effective as delivery of a manually executed
counterpart of this Agreement.
SECTION 8.09. JURISDICTION, ETC. (a) Each of the parties
hereto hereby irrevocably and unconditionally submits, for itself and its
property, to the nonexclusive jurisdiction of any New York state court or
federal court of the United States of America sitting in New York City, and any
appellate court from any thereof, in any action or proceeding arising out of or
relating to this Agreement or any of the other Loan Documents to which it is a
party, or for recognition or enforcement of any judgment, and each of the
parties hereto hereby irrevocably and unconditionally agrees that all claims in
respect of any such action or proceeding may be heard and determined in any such
New York state court or, to the extent permitted by law, in such federal court.
Each of the parties hereto agrees that a final judgment in any such action or
proceeding shall be conclusive and may be enforced in other jurisdictions by
suit on the judgment or in any other manner provided by law. Nothing in this
Agreement shall affect any right that any party may otherwise have to bring any
action or proceeding relating to this Agreement or any of the other Loan
Documents in the courts of any jurisdiction.
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(b) Each of the parties hereto irrevocably and
unconditionally waives, to the fullest extent it may legally and effectively do
so, any objection that it may now or hereafter have to the laying of venue of
any suit, action or proceeding arising out of or relating to this Agreement or
any of the other Loan Documents to which it is a party in any New York state or
federal court. Each of the parties hereto hereby irrevocably waives, to the
fullest extent permitted by law, the defense of an inconvenient forum to the
maintenance of such action or proceeding in any such court.
SECTION 8.10. GOVERNING LAW. This Agreement shall be governed
by, and construed in accordance with, the laws of the State of New York
applicable to contracts made and to be performed entirely within such State.
SECTION 8.11. WAIVER OF JURY TRIAL. To the maximum extent
permitted by law, each of the Company, and Lender and Lender Parties irrevocably
waive all right to trial by jury in any action, proceeding or counterclaim
(whether based on contract, tort or otherwise) arising out of or relating to any
of the Loan Documents, the Advances or the actions of Lender or any Lender Party
in the negotiation, administration, performance or enforcement thereof.
SECTION 8.12. COMPLIANCE WITH USURY LAWS. It is expressly
stipulated and agreed to be the intent of Company and Lender that each Loan made
hereunder comply with the usury and other laws relating to the Loan Documents
now or hereafter in effect in the state in which the applicable Project is
located, to the extent any of the same are applicable thereto. If any such
applicable laws render usurious any amount called for under any of the Loan
Documents, or contracted for, charged or received with respect to any Loan, or
if the acceleration of the maturity of any Loan or if any prepayment by the
applicable Borrower results in such Borrower having paid any interest in excess
of that permitted by law, then it is the express intent of the parties that all
excess amounts theretofore collected by Lender be credited on the principal
balance of the applicable Note (or, if such Note has been paid in full, refunded
to such Borrower), and the provisions of the applicable Loan Documents
immediately be deemed reformed and the amounts thereafter collected under such
Loan Documents reduced, without the necessity of the execution of any new
document, so as to comply with the then applicable law, but so as to permit the
recovery of the fullest amount otherwise called for under the applicable Loan
Documents.
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IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed by their respective officers thereunto duly authorized,
as of the date first above written.
THE COMPANY
ALTERNATIVE LIVING SERVICES, INC.
By /s/ David M. Boitano
--------------------
Name: David M. Boitano
Title: Senior Vice President
LENDER:
DEUTSCHE BANK, AG
NEW YORK BRANCH
By /s/ Steven Stuart
-----------------
Name: Steven Stuart
Title: Attorney-in-Fact
By /s/ Allisson Michaels
---------------------
Name: Allisson Michaels
Title: Attorney-in-Fact