A-01 - Cedar Port - Construction Loan Agreement 267279942 1

CONSTRUCTION LOAN AGREEMENT
BY AND BETWEEN
PACIFICCAL DEBT III, LLC,
AS LENDER
AND
CEDAR PORT NAVY BUILDING I, LLC
AS BORROWER
DATED AS OF APRIL 21, 2021
CONSTRUCTION LOAN AGREEMENT
CEDAR PORT LOGISTICS CENTER
DEAL ID 21-0070
265741215
TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS .................................................................................................... 1
ARTICLE II
THE LOAN ....................................................................................................... 28
ARTICLE III
CONDITIONS TO DISBURSEMENT ............................................................ 40
ARTICLE IV
CONSTRUCTION ............................................................................................ 54
ARTICLE V
INSURANCE; CASUALTY, CONDEMNATION AND RESTORATION ... 64
ARTICLE VI
REPRESENTATIONS AND WARRANTIES................................................. 70
ARTICLE VII REPORTING COVENANTS ........................................................................... 78
ARTICLE VIII OTHER COVENANTS .................................................................................... 80
ARTICLE IX
INTENTIONALLY DELETED ....................................................................... 89
ARTICLE X
CASH MANAGEMENT .................................................................................. 90
ARTICLE XI
EVENTS OF DEFAULT AND REMEDIES ................................................... 93
ARTICLE XII SECONDARY MARKET TRANSACTIONS ................................................. 99
ARTICLE XIII MISCELLANEOUS ....................................................................................... 102
CONSTRUCTION LOAN AGREEMENT
CEDAR PORT LOGISTICS CENTER
DEAL ID 21-0070
265741215
EXHIBITS AND SCHEDULES:
Exhibits:
Exhibit A
Exhibit B
Exhibit C
Exhibit D
Exhibit E
Exhibit F
Exhibit G
Exhibit H
Exhibit I
Exhibit J
Exhibit K
Exhibit L
Exhibit M
Exhibit N
-
Legal Description of Real Property
List of Loan Documents
Summary Sources and Uses
Major Contracts
Form of Disbursement Request
Intentionally Deleted
Approved Construction Budget
Approved Construction Schedule
Milestones/Milestone Dates
Intentionally Deleted
Form of Compliance Certificate
Definition of “Special Purpose Entity” and Related Defined Terms
Form of U.S. Tax Compliance Certificates
Specimen Signature
-
List of Promissory Notes
Organizational Chart
Approved Affiliate Fees & Agreements
List of Plans and Specifications
Government Approvals
Schedules:
Schedule I
Schedule II
Schedule III
Schedule IV
Schedule V
CONSTRUCTION LOAN AGREEMENT
CEDAR PORT LOGISTICS CENTER
DEAL ID 21-0070
265741215
CONSTRUCTION LOAN AGREEMENT
THIS CONSTRUCTION LOAN AGREEMENT is made and entered into as of April 21,
2021, by and between CEDAR PORT NAVY BUILDING I, LLC, a Texas limited liability
company (“Borrower”), and PACIFICCAL DEBT III, LLC, a Delaware limited liability
company (together with its successors and/or assigns, “Lender”).
RECITALS
A.
Borrower has requested that Lender provide Borrower with real estate secured
financing (the “Loan”) in the amount of up to Fifty Million and No/100 Dollars
($50,000,000.00) (the “Loan Amount”) in connection with Borrower’s costs relating to the
Property (as defined below).
B.
Lender is willing to provide such secured loan to Borrower, on the terms and
conditions contained in this Agreement and the other Loan Documents.
AGREEMENT
NOW, THEREFORE, in consideration of the making of the Loan by Lender, and for
other good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereby agree as follows:
ARTICLE I
DEFINITIONS
1.1
Defined Terms. As used in this Agreement, the following terms shall have the
meanings set forth respectively after each:
“15% Capital Requirement” is defined in Section 8.13.
“Acceptable Blanket Policy” means any blanket insurance policy that otherwise
provides the same protection as would a separate Policy insuring only the Property in compliance
with the provisions of Article V.
“Account” means, collectively, the Collection Account, the Cash Management
Account, the Operating Account, and the Reserve Accounts, together with any accounts now or
hereafter established by Borrower for the benefit of Lender in connection with the Loan.
“Actual Net Operating Income” means (a) the actual Gross Operating Income
derived from the Property including only those tenants of the Property who, as of the date of
determination, occupy their respective demised spaces and have more than six (6) calendar
months remaining on their respective Leases (including renewal options, provided that such
tenant has in fact exercised its renewal option), less (b) (i) any Concessions (as defined below)
during the same period, and (ii) actual Operating Expenses (as defined below) during the
immediately preceding three (3) calendar months, annualized, with an adjustment for
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CONSTRUCTION LOAN AGREEMENT
CEDAR PORT LOGISTICS CENTER
DEAL ID 21-0070
265741215
vacancy/collection losses equal to the greater of (x) the then applicable actual vacancy
percentage, or (y) two percent (2.0%) of the Gross Operating Income. For those Operating
Expenses that are not paid on a monthly or quarterly basis, such as real property taxes and
insurance premiums, Lender shall make an adjustment so that such Operating Expenses shall be
deemed to have been incurred by Borrower during the period in question on a basis proportionate
to the balance of the year in question. For the purposes of this definition of Actual Net
Operating Income, “Operating Expenses” shall include (x) operating expenses of any kind and
nature relating to the Property, as well as those operating expenses incurred in connection with
maintenance, repairs, taxes, insurance, utilities, and other costs and expenses of ownership and
operation (including, without limitation, as an adjustment for property management fees payable
to the Property Manager under the Property Management Agreement, three percent (3.0%) of the
Gross Operating Income), and (y) a capital expenditure reserve equal to fifteen cents ($0.15) per
square foot on gross square footage of 799,680 square feet. For those Operating Expenses that
are not paid on a monthly or quarterly basis, such as real property taxes and insurance premiums,
Lender shall make an adjustment so that such Operating Expenses shall be deemed to have been
incurred by Borrower for a full year. For the purposes of this definition of Actual Net Operating
Income, “Concessions” shall mean (1) those costs incurred or amounts paid by Borrower
directly to or on behalf of any tenant for the purpose of inducing such tenant to enter into a Lease
and/or (2) the aggregate amount of any free rent credited or granted by Borrower to tenants under
Leases (as permitted pursuant to the Loan Documents). Such Concessions shall be amortized
over the full term of the applicable Lease with only the amortization for the period in question to
be deducted from Gross Operating Income for such period. Actual Net Operating Income shall
be evidenced by the operating statements, rent rolls and other operating information provided by
Borrower to Lender under this Agreement, and such other evidence of income and expense as
Lender shall reasonably require in order to evaluate Actual Net Operating Income.
“ADA” means the Americans with Disabilities Act, 42 U.S.C. §§ 12101, et seq.,
as the same may be hereafter amended or modified.
“Affiliate” shall mean, as to any Person, any other Person that (a) directly or
indirectly, through one or more intermediaries, controls, is controlled by, or is under common
control with, such Person, and/or (b) holds, whether beneficially or of record, ten percent (10%)
or more of the Equity Interests of such Person.
“Affiliate Agreement(s)” is defined in Section 6.15 of this Agreement.
“Affiliate Fee(s)” is defined in Section 6.15 of this Agreement.
“Agreement” means this Construction Loan Agreement.
“Annual Budget” is defined in Section 7.1(f) of this Agreement.
“Anti-Money Laundering Laws” shall mean any laws relating to money
laundering or terrorist financing, including, without limitation, (A) the criminal laws against
terrorism, (B) the criminal laws against money laundering, (C) the Bank Secrecy Act, as
amended, (D) the Money Laundering Control Act of 1986, as amended, and (E) the Patriot Act.
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CEDAR PORT LOGISTICS CENTER
DEAL ID 21-0070
265741215
“Applicable Interest Rate” has the meaning set forth in Section 2.7(d), as
adjusted pursuant to this Agreement.
“Appraisal” means a written appraisal prepared by an MAI appraiser acceptable
to Lender in its sole discretion and prepared in compliance with applicable regulatory
requirements, including, without limitation, the Financial Institutions Recovery, Reform and
Enforcement Act of 1989, as amended from time to time, and subject to Lender’s customary
independent appraisal requirements.
“Approved Accounting Method” means any of the following: (i) GAAP; and
(ii) another sound accounting method approved in writing by Lender.
“Approved Affiliate Agreements” is defined in Section 6.15 of this Agreement.
“Approved Affiliate Fees” is defined in Section 6.15 of this Agreement.
“Approved Annual Budget” means the operating budget for the Property
approved by Lender as required under Section 7.1(f) of this Agreement, as amended from time to
time in accordance with this Agreement.
“Approved Budget” means, individually and collectively, as Lender may
determine, the Approved Construction Budget and the Approved Annual Budget.
“Approved Carry Costs” means Carry Costs incurred or owed by Borrower
consistent with the Approved Annual Budget, but excluding Debt Service.
“Approved Construction Budget” means the construction budget for the initial
Construction Work set forth on Exhibit G, as the same may be amended from time to time in
accordance with Section 4.12 of this Agreement.
“Approved Hard Costs” means the hard costs incurred by Borrower in
connection with the construction of the Construction Work and consistent with (and no more
than) the anticipated hard costs set forth in the Approved Construction Budget.
“Approved Soft Costs” means the soft costs incurred by Borrower in connection
with the construction of the Construction Work and consistent with (and no more than) the
anticipated soft costs set forth in the Approved Construction Budget.
“Approved Uses” is defined in Section 3.2(a) of this Agreement.
“Architect” means Powers Brown Architecture, which is the entity retained by
Design-Builder as the architect-of-record. If, after the date hereof, Design-Builder engages a
replacement architect or another architect with Lender’s prior written approval (in Lender’s
reasonable discretion), then the same shall thereafter be deemed to be an “Architect” hereunder.
“Assignment of Construction Agreements” means that certain Assignment of
Design-Build and Construction Agreements dated as of the date hereof, executed and delivered
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CEDAR PORT LOGISTICS CENTER
DEAL ID 21-0070
265741215
by Borrower in favor of Lender.
“Assignment of Design Agreements” means that certain Assignment of Design
and Consulting Agreements and Plans and Specifications, dated as of the date hereof, executed
and delivered by Borrower in favor of Lender.
“Assignment of Interest Rate Protection Agreement” means a Collateral
Assignment of Interest Rate Protection Agreement, in form and substance satisfactory to Lender
or in such other form reasonably acceptable to Borrower and Lender, executed by Borrower, in
favor of Lender, and consented to by the Counterparty thereunder.
“Assignment of Management Agreement” means an Assignment and
Subordination of Property Management Agreement, in form and substance satisfactory to Lender
(Lender and Borrower acknowledge that the form executed and delivered to Lender on the
Effective Date is satisfactory to it) or in such other form reasonably acceptable to Borrower and
Lender, executed by Borrower and Property Manager in favor of Lender.
“Assignment of Sale Agreement” means that certain Collateral Assignment of
Purchase and Sale Agreement dated as of the date hereof, executed by and between Borrower
and Lender, and acknowledged and agreed to by Buyer and Sale Agreement Escrow Agent.
“Available Cash” is defined in Section 10.1(a) of this Agreement.
“Bail-In Action” shall mean the exercise of any Write-Down and Conversion
Powers by the applicable EEA Resolution Authority in respect of any liability of an EEA
Financial Institution.
“Bail-In Legislation” shall mean, with respect to any EEA Member Country
implementing Article 55 of Directive 2014/59/EU of the European Parliament and of the Council
of the European Union, the implementing law for such EEA Member Country from time to time
which is described in the EU Bail-In Legislation Schedule.
“Balancing Account” has the meaning set forth in Section 10.9 of this
Agreement.
“Balancing Funds” has the meaning set forth in Section 10.9 of this Agreement.
“Bankruptcy Action” means with respect to any Person: (a) such Person filing a
voluntary petition under the Bankruptcy Code or any other Federal or state bankruptcy or
insolvency law; (b) the filing of an involuntary petition against such Person under the
Bankruptcy Code or any other Federal or state bankruptcy or insolvency law; (c) such Person
filing an answer consenting to or otherwise colluding or acquiescing in or joining in any
involuntary petition filed against it, by any other Person under the Bankruptcy Code or any other
Federal or state bankruptcy or insolvency law; or soliciting or causing to be solicited petitioning
creditors for any involuntary petition from any Person; (d) the appointment of a custodian,
receiver, trustee, or examiner for such Person or any portion of the Property; (e) such Person
making an assignment for the benefit of creditors, or admitting, in writing or in any legal
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CONSTRUCTION LOAN AGREEMENT
CEDAR PORT LOGISTICS CENTER
DEAL ID 21-0070
265741215
proceeding, its insolvency or inability to pay its debts as they become due; or (f) such Person
commencing (or have commenced against it) a proceeding for the dissolution or liquidation of it.
“Bankruptcy Code” means the Bankruptcy Reform Act of 1978, 11 U.S.C.
§101-1330, as the same may be hereafter amended or modified.
“Base Rate” means the higher of (a) the Prime Rate and (b) the Federal Funds
Rate plus 0.50%.
“Basel Accord” means the various recommendations for capital and liquidity
standards issued by the Bank for International Settlement’s Basel Committee on Banking
Supervision, including, without limitation, those recommendations known informally as
“Basel I”, “Basel II”, and “Basel III”, as amended, modified and supplemented and in effect
from time to time or any replacement thereof.
“Benchmark” means, initially, the LIBOR; provided that if a Benchmark
Transition Event or an Early Opt-in Election, as applicable, has occurred with respect to the
LIBOR or the then-current Benchmark, then “Benchmark” means the applicable Benchmark
Replacement to the extent that such Benchmark Replacement has become effective pursuant to
Section 2.7(d).
“Benchmark Index Rate Cap Agreement” means an index rate derivative
product comparable to the Interest Rate Protection Agreement, which product caps exposure to
fluctuations in the Benchmark, and which otherwise satisfies all of the conditions set forth in
Section 8.20(b) hereof, provided that references in such Section 8.20(b) to LIBOR shall be
replaced with the Benchmark, and provided further that the strike rate for such derivative product
shall be as determined by Lender in its good faith discretion as providing a hedge against rising
interest rates that is no less beneficial to Borrower and Lender than, and is substantially
comparable to, the Interest Rate Protection Agreement being replaced or required to be
purchased, as applicable.
“Benchmark Replacement” means the first alternative set forth in the order
below that can be determined by Lender as of the applicable Benchmark Replacement Date:
(a) the sum of: (i) Term SOFR; plus (ii) an applicable index adjustment, or
method for calculating or determining such index adjustment, (which may be a positive or
negative value or zero) that has been selected or recommended by the Relevant Governmental
Body for Term SOFR;
(b)
the sum of: (i) the alternate rate of interest that has been selected by
Lender as the replacement for the then-current Benchmark for the Corresponding Tenor (which,
without limitation, may be compounded SOFR in arrears, or another benchmark selected by
Lender); plus (ii) any applicable index adjustment, or method for calculating or determining such
index adjustment, (which may be a positive or negative value or zero) that has been selected by
Lender. With respect to Lender’s decisions under this subsection (b): (i) Lender’s selection of
any applicable Benchmark Replacement shall give due consideration to: (A) any selection or
recommendation by the Relevant Governmental Body at such time for a replacement rate, the
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CONSTRUCTION LOAN AGREEMENT
CEDAR PORT LOGISTICS CENTER
DEAL ID 21-0070
265741215
mechanism for determining such a rate, the methodology or conventions applicable to such rate,
or the index adjustment, or method for calculating or determining such index adjustment, for
such rate; or (B) any evolving or then-prevailing market convention for determining a rate of
interest as a replacement to the then-current Benchmark, the methodology or conventions
applicable to such rate, or the index adjustment, or method for calculating or determining such
index adjustment, for such alternate rate for U.S. dollar-denominated syndicated or bilateral
credit facilities at such time.
“Benchmark Replacement Conforming Changes” means, with respect to any
Benchmark Replacement, any technical, administrative or operational changes (including
changes to the definition of “Base Rate,” the definition of “Interest Period,” timing and
frequency of determining rates and making payments of interest and other administrative
matters) that Lender decides may be appropriate to reflect the adoption and implementation of
such Benchmark Replacement and to permit the administration thereof by Lender in a manner
substantially consistent with market practice (or, if Lender decides that adoption of any portion
of such market practice is not administratively feasible or if Lender determines that no market
practice for the administration of the Benchmark Replacement exists, in such other manner of
administration as the Lender decides is reasonably necessary in connection with the
administration of this Agreement);
“Benchmark Replacement Date” means the date that is the first day of an
Interest Period specified by Lender in a notice sent to Borrower following a Benchmark
Transition Event or an Early Opt-in Election.
“Benchmark Transition Event” means the occurrence of one or more of the
following events with respect to LIBOR:
(a)
a public statement or publication of information by or on behalf of the
administrator of LIBOR announcing that such administrator has ceased or will cease to provide
LIBOR, permanently or indefinitely, provided that, at the time of such statement or publication,
there is no successor administrator that will continue to provide LIBOR;
(b)
a public statement or publication of information by the regulatory
supervisor for the administrator of LIBOR, the U.S. Federal Reserve System, an insolvency
official with jurisdiction over the administrator for LIBOR, a resolution authority with
jurisdiction over the administrator for LIBOR or a court or an entity with similar insolvency or
resolution authority over the administrator for LIBOR, which states that the administrator of
LIBOR has ceased or will cease to provide LIBOR permanently or indefinitely, provided that, at
the time of such statement or publication, there is no successor administrator that will continue to
provide LIBOR; or
(c)
a public statement or publication of information by the regulatory
supervisor for the administrator of LIBOR announcing that LIBOR is no longer representative of
underlying markets.
“Benchmark Unavailable Determination” has the meaning set forth in Section
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CONSTRUCTION LOAN AGREEMENT
CEDAR PORT LOGISTICS CENTER
DEAL ID 21-0070
265741215
2.7(e).
“Borrower” is defined in the opening paragraph of this Agreement.
“Borrower Equity” means the amount of cash equity contributed by the
Members to Borrower, which amount shall not be less than the Borrower Minimum Equity.
“Borrower Additional Equity” means an amount not less than Three Hundred
Ninety Seven Thousand Eight Hundred Eighty-Two and No/100 Dollars ($397,882.00).
“Borrower Minimum Equity” means an amount not less than Six Million Five
Hundred Forty Thousand Seven Hundred Thirty-Four and No/100 Dollars ($6,540,734.00).
“Borrower Party(ies)” means, individually and collectively, Borrower, each
Member, Guarantor, Sponsor, any Affiliate of any of the foregoing, and any of the respective
officers or directors of any of the foregoing.
“Building” means a building to be constructed on the Real Property with
approximately 799,680 rentable square feet of warehouse/distribution space.
“Business Day” means (a) any day, other than a Saturday, Sunday or any other
day on which the New York Stock Exchange or the Federal Reserve Bank of New York is not
open for business, and (b) any day other than a Saturday, Sunday or any day that is a legal
holiday under the laws of the State of New York or the State of Texas, or which is a day on
which banking institutions located in the State of New York or State of Texas are required or
authorized by law or other governmental action to close.
“Buyer” means Core and Value Advisors, LLC, a Delaware limited liability
company.
“Carry Costs” means Property Taxes, insurance premiums for insurance required
by the Loan Documents, any operating costs and any other costs necessary to own, operate and
maintain the Property, but excluding Debt Service.
“Carry Cost Holdback” means the portion of the Loan initially designated for
payment of Approved Carry Costs incurred after Substantial Completion. The initial amount of
the Carry Cost Holdback is set forth on Exhibit C.
“Carveout Guaranty” means that certain Guaranty of Recourse Obligations
executed and delivered by Guarantor in favor of Lender pursuant to this Agreement.
“Cash Management Account” has the meaning set forth in Section 10.2(a) of
this Agreement.
“Cash Management Period” means any period during which an Event of
Default exists.
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CONSTRUCTION LOAN AGREEMENT
CEDAR PORT LOGISTICS CENTER
DEAL ID 21-0070
265741215
“Casualty” is defined in Section 5.7(a) of this Agreement.
“Casualty Retainage” is defined in Section 5.9 of this Agreement.
“Central Bank Pledge” is defined in Section 12.1(d) of this Agreement.
“Change Order” means any change in, modification to or deviation from any
Contract Document, the Plans and Specifications or any Major Contract, whether designated a
change order, construction change directive or the like, and whether or not there is a change in
the contract sum or contract time under any Contract Document or Major Contract.
“City” means the City of Baytown, located in the County of Chambers and State
of Texas.
“Code” means the Internal Revenue Code of 1986, as the same may be hereafter
amended or modified.
“Collateral” means, collectively, the Property and any other real or personal
property now or hereafter acquired by Borrower in or upon which a Lien is granted by Borrower
in favor of Lender, or as to which an assignment for security purposes is made by Borrower in
favor of Lender, in each case, pursuant to this Agreement or the other Loan Documents.
“Collection Account” is defined in Section 10.2(a).
“Collection Account Agreement” is defined in Section 10.2(a).
“Collection Bank” is defined in Section 10.2(a).
“Completion Guaranty” means that certain Completion Guaranty executed and
delivered by Guarantor in favor of Lender pursuant to this Agreement.
“Compliance Certificate” means a certificate in the form attached hereto as
Exhibit K, evidencing Guarantor’s compliance with the Net Worth/Liquidity Covenant.
“Condemnation Proceeds” is defined in Section 5.7(a) of this Agreement.
“Connection Income Taxes” means Other Connection Taxes that are imposed on
or measured by net income (however denominated) or that are franchise Taxes or branch profits
Taxes.
“Construction” means the demolition, grading, site preparation, foundation work
and construction, furnishing and equipping of the Property and related facilities pursuant to the
Contract Documents, including all onsite and offsite improvements.
“Construction Holdback” means either the Construction Holdback (Hard Costs)
or the Soft Costs Holdback.
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CONSTRUCTION LOAN AGREEMENT
CEDAR PORT LOGISTICS CENTER
DEAL ID 21-0070
265741215
“Construction Holdback (Hard Costs)” means the portion of the Loan initially
designated to fund Approved Hard Costs. The initial amount of the Construction Holdback
(Hard Costs) is set forth on Exhibit C.
“Construction Schedule” means the schedule prepared by Borrower (which shall
be verified by Lender’s construction consultant and, if requested by Lender, certified by
Borrower) establishing a timetable for commencement and completion of the Construction
Work, showing, on a monthly basis, the anticipated progress of the Construction Work and
showing that all of the Construction Work will be completed on or before the Final Completion
Outside Date. The initially approved Construction Schedule attached hereto as Exhibit H.
“Construction Work” or “Planned Improvements” means the Building and
other improvements contemplated to be constructed by Borrower at the Property pursuant to the
Contract Documents and Plans and Specifications as permitted hereunder and in accordance with
the Approved Construction Budget and any tenant improvements contemplated to by constructed
by Borrower at the Property pursuant to permitted Leases.
“Contract” means any contract, subcontract, trade contract, material agreement
or supply contract relating to the construction of the Construction Work or a component thereof,
whether entered into (or assumed) directly or on behalf of Borrower.
“Contract Documents” means the Design-Build Contract, the Plans and
Specifications prepared by the Design-Builder and its Architect and other consultants, the other
documents listed in the Design-Build Contract and change orders or other written modifications
to the Design-Build Contract or Design-Builder’s Plans and Specifications issued after execution
of the Design-Build Contract.
“Contractor” means any design-builder, contractor, subcontractor, tradesman,
materialman or supplier under any Contract.
“Control” means the possession, directly or indirectly, of the power to cause the
direction of the management and policies of a Person, whether through the ownership of voting
securities, by contract, family relationship, or otherwise; and the terms “controls”, “controlling”
and “controlled” have the meanings correlative to the foregoing.
“Corresponding Tenor” means a tenor having an approximate length as the
Interest Period.
“Cost Savings” means either (a) the completion of any line item in the Approved
Construction Budget without the expenditure of all amounts allocated to such line item in the
Approved Construction Budget (whether within a particular phase of construction or between
phases of construction), or (b) demonstration by Borrower to Lender’s reasonable satisfaction
that a cost savings has been, or is reasonably likely to be, realized with respect to any
uncompleted line item in the Approved Construction Budget (whether within a particular phase
of construction or between phases of construction).
“Counterparty” is defined in Section 8.20(a) of this Agreement.
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CONSTRUCTION LOAN AGREEMENT
CEDAR PORT LOGISTICS CENTER
DEAL ID 21-0070
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“Debt” means the outstanding principal balance of the Loan, together with all
interest accrued and unpaid thereon and all other sums due from Borrower under the Loan
Documents.
“Debt Service” as of any date, means the interest due on the outstanding principal
balance of the Loan, as of such date, at the Applicable Interest Rate in effect as of such date,
together with the principal reduction payment, if any, required on such date pursuant to this
Agreement.
“Debt Service Coverage Ratio” means the ratio of the Actual Net Operating
Income to Deemed Debt Service, as determined by Lender in its sole but good faith discretion
for the period in question.
“Deemed Debt Service” means the product of (a) the greater of (i) an assumed
constant interest rate under the Note equal to six percent (6.0%) or (ii) the Applicable Interest
Rate per annum as of the date of determination, together with the amount of level monthly
payments that would be required under the Loan in order to fully amortize the Loan over an
assumed thirty (30) year amortization schedule, multiplied by (b) the then current outstanding
principal balance of the Loan on such date.
“Default Interest Rate” means a rate per annum equal to five percent (5.0%),
plus the Applicable Interest Rate applicable, as the case may be, pursuant to clause (A), (B) or
(C) of the definition of “Applicable Interest Rate”, or if such increased rate of interest may not be
collected under applicable law, then at the maximum rate of interest, if any, which may be
collected from Borrower under applicable law.
“Design Agreements” means any and all agreements for professional design or
engineering services with Design Professionals, entered into by Borrower, together with all
extensions, renewals, substitutions, restatements, modifications and amendments thereto.
“Design-Build Contract” means that certain AIA Document A141-2014 DesignBuild Agreement, dated April 16, 2021, by and between Borrower and Design-Builder for the
design and construction of the Planned Improvements, as the same may be amended,
supplemented, or otherwise modified in accordance with the provisions of this Agreement. If,
after the date hereof, Borrower enters into a replacement construction contract or another
construction contract with Lender’s prior written approval (in Lender’s reasonable discretion),
then the same shall thereafter be deemed to be a “Design-Build Contract” hereunder.
“Design-Builder” means E.E. Reed Construction, L.P. If, after the date hereof,
Borrower engages a replacement design-builder or another design-builder with Lender’s prior
written approval (in Lender’s reasonable discretion), then the same shall thereafter be deemed to
be a “Design-Builder” hereunder.
“Design Professional” means Architect, Engineer and other design professionals
relating to the Construction Work, as approved by Lender, and any reference in this Agreement
to a certification or other document to be executed by the applicable Design Professional shall
mean one or more of such Design Professionals designated by Lender as the Design Professional
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to execute such certification or document, depending upon the areas of expertise covered by such
certification or document.
“Disbursement” has the meaning given to such term in Section 2.4(b) of this
Agreement.
“Early Opt-in Election” means the occurrence of:
(1) a determination by Lender that U.S. dollar-denominated credit facilities being
executed at such time, or that include language similar to that contained in Section 2.7(d)-(f) are
being executed or amended, as applicable, and incorporating or adopting a new benchmark
interest rate to replace LIBOR, and
(2) the election by the Lender to declare that an Early Opt-in Election has
occurred and the provision by Lender of written notice of such election to the Borrower.
“Earnest Money Deposit” shall mean the “Deposit” (as defined in the Sale
Agreement) in the amount of $7,500,000, plus the interest, if any, that is collected on such funds
by the escrow agent under the Sale Agreement.
“EEA Financial Institution” means (a) any credit institution or investment firm
established in any EEA Member Country which is subject to the supervision of an EEA
Resolution Authority, (b) any Person established in an EEA Member Country which is a parent
of an institution described in clause (a) of this definition, or (c) any financial institution
established in an EEA Member Country which is a subsidiary of an institution described in
clauses (a) or (b) of this definition and is subject to consolidated supervision with its parent.
“EEA Member Country” means any of the member states of the European
Union, Iceland, Liechtenstein and Norway.
“EEA Resolution Authority” means any public administrative authority or any
person entrusted with public administrative authority of any EEA Member Country (including
any delegee) having responsibility for the resolution of any EEA Financial Institution.
“Effective Date” is defined in Section 2.6 of this Agreement.
“Engineer” means, as applicable, the engineer under the Engineer’s Agreement
engaged by Borrower.
“Engineer’s Agreement” means, if applicable, any agreement with respect to the
engineering of the Construction Work entered into by Borrower, together with all extensions,
renewals, substitutions, restatements, modifications and amendments thereto.
“Environmental Indemnity Agreement” means that certain Environmental
Indemnity Agreement executed and delivered by Borrower and Guarantor collectively and
jointly and severally in favor of Lender pursuant to this Agreement.
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“Equity Interests” means (a) partnership interests (general or limited) in a
partnership; (b) membership interests in a limited liability company; (c) shares or stock interests
in a corporation; and (d) the beneficial ownership interests in a trust.
“ERISA” means the Employee Retirement Income Security Act of 1974, as
amended or re-codified from time to time, and the regulations promulgated thereunder.
“ERISA Affiliate” means any corporation or trade or business that is a member
of any group of organizations (a) described in Section 414(b) or (c) of the Code, of which
Borrower is a member, and (b) solely for purposes of potential liability under Section 302(b)(2)
of ERISA and Section 412(b)(2) of the Code and the lien created under Section 303(k) of ERISA
and Section 430(k) of the Code, described in Section 414(m) or (o) of the Code, of which
Borrower is a member.
“EU Bail-In Legislation Schedule” means the EU Bail-In Legislation Schedule
published by the Loan Market Association (or any successor Person), as in effect from time to
time.
“Event of Default” means each of those events so designated in Section 11.1 of
this Agreement.
“Excluded Taxes” means any of the following Taxes imposed on or with respect
to a Lender or required to be withheld or deducted from a payment to a Lender, (a) Taxes
imposed on or measured by net income (however denominated), franchise Taxes, and branch
profits Taxes, in each case, (i) imposed as a result of such Lender being organized under the laws
of, or having its principal office or its applicable lending office located in, the jurisdiction
imposing such Tax (or any political subdivision thereof) or (ii) that are Other Connection Taxes,
(b) in the case of a Lender, U.S. federal withholding Taxes imposed on amounts payable to or for
the account of such Lender with respect to an applicable interest in a Loan or Commitment
pursuant to a law in effect on the date on which (i) such Lender acquires such interest in the
Loan or Commitment (other than pursuant to an assignment request by Borrower under Section
2.20 of this Agreement) or (ii) such Lender changes its lending office, except in each case to the
extent that, pursuant to Section 2.19 of this Agreement, amounts with respect to such Taxes were
payable either to such Lender’s assignor immediately before such Lender became a party hereto
or to such Lender immediately before it changed its lending office, (c) Taxes attributable to such
Lender’s failure to comply with Section 2.19(e) of this Agreement and (d) any withholding
Taxes imposed under FATCA.
“Extended Maturity Date” means May1, 2024.
“Extended Term” is defined in Section 2.13 of this Agreement.
“Extension Fee” is defined in Section 2.13(c) of this Agreement.
“Extension Notice” is defined in Section 2.13(a) of the Agreement.
“Extension Option” is defined in Section 2.13 of this Agreement.
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“FATCA” means Sections 1471 through 1474 of the Code, as of the date of this
Agreement (or any amended or successor version that is substantively comparable and not
materially more onerous to comply with), any current or future regulations or official
interpretations thereof, any agreement entered into pursuant to Section 1471(b)(1) of the Code
and any fiscal or regulatory legislation, rules or practices adopted pursuant to any
intergovernmental agreement, treaty or convention among Governmental Authorities and
implementing such Sections of the Code.
“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 which is a Business Day, the average of the quotations for such day on
such transactions received by Lender from three Federal Funds brokers of recognized standing
selected by Lender.
“Final Completion” means that Borrower shall have caused each of the matters
described in Section 4.1(g) to have been completed.
“Final Completion Date” means the date upon which Final Completion is
achieved.
“Final Completion Outside Date” means the Milestone Date for Final
Completion.
“Financing Statement” means that certain Uniform Commercial Code – National
Financing Statement – Form UCC-1, identifying Borrower as debtor and Lender as secured
party, to be filed with the Secretary of State of the State of Texas.
“Fiscal Year” means the twelve (12) month period ending on December 31 of
each year or such other fiscal year of Borrower as Borrower may select from time to time with
the prior written consent of Lender, such consent not to be unreasonably withheld.
“Fitch” shall mean Fitch, Inc.
“Force Majeure Event” means strikes, lock-outs, war, civil disturbance, natural
disaster, acts of terrorism or acts of God or other matters beyond the control of a Person
(including, without limitation, the failure of any other party hereto to timely perform its
obligations under, or provide notice within the timeframes specified in, any of the Loan
Documents) which cause a delay in such Person’s performance of its obligations or exercise of
its rights under the Loan Documents. An event will be deemed a “Force Majeure Event” only if:
(i) Borrower delivers to Lender within a reasonable period after the commencement of any such
circumstance (not to exceed ten (10) days), written notice of such claimed Force Majeure Event,
(ii) irrespective of the actual duration of any such circumstance, the maximum aggregate delay
permitted pursuant to this Agreement based upon a Force Majeure Event (whether caused by one
or multiple incidents) shall be ninety (90) days, and (iii) inadequate funding availability or
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capability on the part of Borrower shall not be deemed a Force Majeure Event.
“Foreign Lender” means (a) if Borrower is a U.S. Person, a Lender that is not a
U.S. Person, and (b) if Borrower is not a U.S. Person, a Lender that is resident or organized
under the laws of a jurisdiction other than that in which Borrower is resident for tax purposes.
“Future Funding Allocation” is defined in Section 3.2(a) of this Agreement.
“GAAP” means generally accepted accounting principles in the United States set
forth in the opinions and pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accounts and statements and pronouncements of the Financial
Accounting Standards Board or in such other statements by such other entity as may be approved
by a significant segment of the accounting profession, which are applicable to the circumstances
as of the date of determination.
“Government Approvals” means each and every action, authorization, consent,
approval, entitlement, variance, dedication, license, lease, ruling, permit, certification,
exemption, filing or registration by or with any Governmental Authority, including all licenses,
permits, allocations, authorizations, approvals and certificates obtained by or in the name of, or
assigned to, Borrower and used in connection with the ownership, construction, operation, use or
occupancy of the Property, including building permits, zoning and planning approvals, business
licenses, licenses to conduct business, certificates of occupancy and all such other permits,
licenses and rights.
“Governmental Authority” means any national, federal, state, regional or local
government, or any other political subdivision of any of the foregoing, in each case with
jurisdiction over Borrower, Guarantor, the Property, or any Person with jurisdiction over
Borrower, Guarantor, or the Property exercising executive, legislative, judicial, regulatory or
administrative functions of or pertaining to government.
“Government Lists” means: (A) the Specially Designated Nationals and
Blocked Persons Lists maintained by OFAC; (B) any other list of terrorists, terrorist
organizations or narcotics traffickers maintained pursuant to any of the rules and regulations of
OFAC that Lender notified Borrower in writing is now included in Government Lists; or (C) any
similar lists maintained by the United States Department of State, the United States Department
of Commerce or any other government authority or pursuant to any Executive Order of the
President of the United States of America.
“Gross Operating Income” means all income from or in respect of the Property,
including, without limitation, rental revenues, amounts, payments, fees, rentals, additional
rentals, reimbursements (including all reimbursements of expenses or other reimbursements by
tenants, licensees or other users of the Property, or by insurance or other reimbursement,
recoupment, discount or credit to Borrower), income, interest and other monies directly or
indirectly received by or on behalf of or credited to Borrower from any Person with respect to
Borrower’s ownership, use, development, operation, leasing, franchising, marketing or licensing
of the Property.
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“Guarantor” means, individually and collectively and jointly and severally,
Capital Development Partners, Inc., a Texas corporation, and any other Person guaranteeing any
of Borrower’s obligations under this Agreement or the other Loan Documents.
“Guaranty Documents” is defined in Section 2.5 of this Agreement.
“Hazardous Materials” has the meaning given to such term in the
Environmental Indemnity Agreement.
“Hazardous Materials Laws” has the meaning given to such term in the
Environmental Indemnity Agreement.
“High Volatility Commercial Real Estate Loan” or “HVCRE” shall, together
with any correlative thereof applicable at any time, have the meaning given to such term under
the Basel Accord and/or any other Risk-Based Capital Guidelines, respectively, as applicable, at
any time and as the context may suggest, permit, or require.
“Holdback” means any of the Interest Holdback, the Construction Holdback
(Hard Costs), the Soft Costs Holdback, and/or the Carry Cost Holdback. The foregoing are
collectively referred to as the “Holdbacks”.
“Improvements” has the meaning given to such term in the Security Instrument.
“In-Balance” is defined in Section 3.2(b)(v) of this Agreement.
“Indebtedness” means, at any given time, the outstanding principal indebtedness
under the Note, together with all accrued and unpaid interest thereon and all other Obligations
and liabilities due or to become due to Lender pursuant hereto or any of the other Loan
Documents.
“Independent Director” or “Independent Manager” is defined in Exhibit L of
this Agreement.
“Indemnified Party” means each of Lender, each of its affiliates and their
respective successors and assigns, any Person who is or will have been involved with the
servicing of the Loan, Persons who may hold or acquire or will have held a full or partial interest
in the Loan (including Investors, as well as custodians, trustees and other fiduciaries who hold or
have held a full or partial interest in the Loan for the benefit of third parties) (including any other
Person who holds or acquires or will have held a participation or other full or partial interest in
the Loan or the collateral therefor), and the respective officers, directors, and employees, agents,
affiliates, successors and assigns of any and all of the foregoing.
“Indemnified Taxes” means (a) Taxes, other than Excluded Taxes, imposed on
or with respect to any payment made by or on account of any obligation of Borrower under any
Loan Document and (b) to the extent not otherwise described in clause (a), Other Taxes.
“Initial Construction Advance” is defined in Section 2.4(b) of this Agreement.
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“Initial Funding Amount” is defined in Section 2.4(a) of this Agreement.
“Insurance Account” is defined in Section 10.4(a) of this Agreement.
“Insurance Funds” is defined in Section 10.4(a) of this Agreement.
“Insurance Proceeds” is defined in Section 5.7(a) of this Agreement.
“Intended Use” means the use of the Real Property and Improvements for
warehouse and distribution purposes.
“Interest and Carry Guaranty” means that certain Interest and Carry Guaranty
executed and delivered by Guarantor in favor of Lender pursuant to this Agreement.
“Interest Holdback” means the portion of the Loan initially designated for
payment of Debt Service. The initial amount of the Interest Holdback is set forth on Exhibit C.
“Interest Period” means (a) the period from the date of the initial advance under
the Note through last day of the calendar month in which the initial advance occurs, and (b) each
period thereafter from the first (1st) day of each calendar month through the last day of each
calendar month; except that the Interest Period, if any, that would otherwise commence before
and end after the Maturity Date shall end on the Maturity Date. Notwithstanding the foregoing,
if Lender shall have elected to change the date on which scheduled payments under the Loan are
due, as described in Section 12.4 of this Agreement, from and after the effective date of such
election, each Interest Period shall commence on the day of each month in which occurs such
changed Payment Date and end on the day immediately preceding the following Payment Date,
as so changed.
“Interest Rate Protection Agreement” means an agreement acceptable to
Lender in its sole and absolute discretion, which satisfies the following:
(1)
for the agreement to be purchased by Borrower on the Effective
Date, a term to commence on the Effective Date and to expire no earlier than the last day of the
month that is twelve (12) months after the Effective Date, which caps the one (1) month
Benchmark at a strike price of not more than three percent (3.00%) and which has a notional
amount not less than the Loan Amount.
(2)
for the agreement to be purchased by Borrower prior to, and to
commence upon, the expiration of the agreement described in clause (1) immediately above,
with a term to expire on the Original Maturity Date, which caps the one (1) month Benchmark at
a strike price of not more than three percent (3.00%) and which has a notional amount not less
than the Loan Amount.
(3)
for the agreement to be purchased by Borrower as required by
Section 2.13(a), a term to commence on the first day of the Extended Term and to expire on the
Extended Maturity Date, which caps the one (1) month Benchmark at a strike price of not more
than three percent (3.00%) and which has a notional amount not less than the Loan Amount.
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“Investor” and “Investors” have the meaning given to such term in Section 12.3
of this Agreement.
“IRS” means the United States Internal Revenue Service.
“Key Individual” has the meaning set forth in Section 11.1(k).
“Late Payment Charge” is defined in Section 2.7(c) of this Agreement.
“Lease” means any lease, including the Plastic Express Lease, and other
agreements or arrangements affecting the use or occupancy of all or any portion of the Property
now in effect or hereafter entered into (including all lettings, subleases, licenses, concessions,
tenancies and other occupancy agreements covering or encumbering all or any portion of the
Property), together with any guarantee, supplement, amendment, modification, extension and/or
renewal of the same.
“Legal Requirements” means (a) all statutes, laws (including, without
limitation, Hazardous Materials Laws), rules, rule of common law, orders, regulations,
ordinances, judgments, orders, decrees and injunctions of Governmental Authorities, approval,
concession, grant, franchise, license, agreement, directive, guideline, policy, requirement, or
other governmental restriction or any similar form of decision of, or determination by, or any
interpretation or administration of any of the foregoing by, any Governmental Authority, whether
now or hereinafter in effect and, in each case, as amended (including any thereof pertaining to
land use, zoning and building ordinances and codes applicable to the Property) affecting
Borrower, the Loan Documents, the Property or any part thereof, and all permits and regulations
relating thereto, and (b) the organizational documents of Borrower.
“Lender” is defined in the opening paragraph of this Agreement.
“Liabilities and Costs” means any losses, actual damages, costs, fees, expenses,
claims, suits, judgments, awards, liabilities (including strict liabilities), obligations, debts,
diminutions in value, fines, penalties, charges, costs of Remediation (whether or not performed
voluntarily), amounts paid in settlement, foreseeable and unforeseeable consequential damages,
litigation costs, reasonable attorneys’ fees, engineers’ fees, environmental consultants’ fees, and
investigation costs (including costs for sampling, testing and analysis of soil, water, air, building
materials, and other materials and substances whether solid, liquid or gas), of whatever kind or
nature, and whether or not incurred in connection with any judicial or administrative
proceedings, actions, claims, suits, judgments or awards.
“LIBOR” means the rate designated as “LIBOR” for U.S. dollar deposits with
one (1) month maturities as quoted by a national bank as determined by Lender (in any case,
“Bank”) from Reuters LIBOR01 or any successor thereto, which shall be that one (1)-month
LIBOR rate in effect two (2) New York Banking Days prior to the beginning of each Interest
Period.
“Lien” means any mortgage, deed of trust, deed to secure debt, lien, pledge,
easement, restrictive covenant, hypothecation, assignment, security interest, PACE Loan,
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conditional sale or other title retention agreement, financing lease having substantially the same
economic effect as any of the foregoing, or financing statement or similar instrument.
“Liquid Asset” shall mean any of the following, but only to the extent owned
individually and located in the United States or Canada, free of all security interests, liens,
pledges, charges or any other encumbrance: (a) cash in United States dollars, (b) certificates of
deposit (with a maturity of two years or less) issued by, or savings account held with, any bank
or other financial institution reasonably acceptable to Lender (c) marketable securities listed on a
national or international exchange reasonably acceptable to Lender, marked to market; provided
that Liquid Assets shall not include any asset that is a part of any of the Property or that is
otherwise part of the collateral for the Loan.
“Loan” is defined in Recital A above.
“Loan Amount” is defined in Recital A above.
“Loan Documents” means, collectively, this Agreement and all other documents,
agreements, instruments and certificates now or hereafter evidencing, securing or delivered to
Lender in connection with the Loan, including the documents listed on Exhibit B attached hereto,
as each may be (and each of the defined terms shall refer to such documents as they may be)
amended, restated, or otherwise modified from time to time.
“Loan Fee” is defined in Section 2.3 of this Agreement.
“Loan-to-Value Ratio” means the ratio of (a) the sum of (i) the outstanding
principal amount of the Loan as of the date in question, and (ii) the committed and undisbursed
portion of the Loan as of the date in question, to (b) the as-is value of the Property, as determined
by Lender in its sole but good faith discretion.
“Major Contract” means (a) any Contract providing for payments in excess of
$250,000.00 in any annual period, (b) any Contract providing for payments in excess of
$25,000.00 in any annual period which is not terminable by Borrower upon sixty (60) or fewer
days’ notice without penalty, (c) any Engineer’s Agreement, (d) any Design Agreement, and/or
(e) any agreement relating to the environmental condition of the Property.
“Major Contractor” means any Contractor who is a party to a Major Contract.
“Material Adverse Effect” means, as applicable, a material adverse effect upon
(a) the business or financial position or results of operation of Borrower or any Guarantor, (b) the
ability of Borrower to perform, or of Lender to enforce, any of the Loan Documents, (c) the
ability of any Guarantor to perform, or of Lender to enforce, any of the Guaranty Documents or
(d) the value of the Property.
“Maturity Date” means the Original Maturity Date, unless extended in
accordance with Section 2.13, in which case the Maturity Date shall be the Extended Maturity
Date.
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“Members” means the direct and indirect holders of Equity Interests in Borrower.
“Milestones” means those certain events and actions set forth on Exhibit I to be
completed and performed by the applicable Milestone Dates.
“Milestone Dates” means the specific dates by which the Milestones must be
completed and performed, as set forth on Exhibit I.
“Minimum Counterparty Rating” means (a) a long term credit rating from S&P
of at least “A+”, and (b) a long term credit rating from Moody’s of at least “A1”.
“Moody’s” means Moody’s Investors Service, Inc.
“Net Restoration Proceeds” is defined in Section 5.7(a) of this Agreement.
“Net Worth” shall mean, as of a given date, (i) the fair market value of all of
Guarantor’s assets located in the United States or Canada as of such date (exclusive of any
interest in the Borrower, the Property or in any other asset that is part of the collateral for the
Loan), and excluding, without limitation, intangible assets such as goodwill, intellectual
property, licenses, organizational costs, deferred amounts, covenants not to compete, unearned
income, restricted funds, intercompany receivables and accumulated depreciation, less (ii)
Guarantor’s total liabilities (taking into consideration contingent liabilities but exclusive of any
liability under the Loan Documents) as of such date, determined in accordance with GAAP.
“Net Worth/Liquidity Covenant” means that, at all times, Guarantor and its
subsidiaries on a consolidated basis shall have (i) an aggregate Net Worth of at least Twenty
Million and No/100 Dollars ($20,000,000.00), and (ii) aggregate Liquid Assets of not less than
Seven Million Five Hundred Thousand and No/100 Dollars ($7,500,000.00).
“New Payment Date” is defined in Section 12.4 of this Agreement.
“New York Banking Day” means any day (other than a Saturday or Sunday) on
which commercial banks are open for business in New York, New York.
“Note” and “Notes” mean, individually and collectively, as applicable, those
certain promissory notes listed on Schedule I attached hereto, each in the original principal
amount as listed thereon and evidencing the Loan in the aggregate in the maximum principal
amount thereof, made by Borrower in favor of Lender pursuant to this Agreement, as any such
Note may be replaced by multiple Notes or divided into multiple Notes in accordance with this
Agreement and as otherwise assigned (in whole or in part), amended, restated, replaced,
supplemented or otherwise modified in accordance herewith.
“Obligations” means collectively, Borrower’s obligations for the payment of the
Debt and the performance of all obligations of Borrower contained in the Loan Documents.
“OFAC” means the Office of Foreign Assets Control, an agency of the United
States Department of the Treasury.
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“Official Records” means the Real Property Records of the County of Chambers,
State of Texas.
“Offsite Materials” is defined in Section 3.3(m) of this Agreement.
“Onsite Materials” is defined in Section 3.3(n) of this Agreement.
“Operating Account” is defined in Section 10.2(b) of this Agreement.
“Original Maturity Date” means May 1, 2023.
“Other Connection Taxes” means, with respect to any Lender, Taxes imposed as
a result of a present or former connection between such Lender and the jurisdiction imposing
such Tax (other than connections arising from such Lender having executed, delivered, become a
party to, performed its obligations under, received payments under, received or perfected a
security interest under, engaged in any other transaction pursuant to or enforced any Loan
Document, or sold or assigned an interest in any Loan or Loan Document).
“Other Taxes” means all present or future stamp, court or documentary,
intangible, recording, filing or similar Taxes that arise from any payment made under, from the
execution, delivery, performance, enforcement or registration of, from the receipt or perfection
of a security interest under, or otherwise with respect to, any Loan Document, except any such
Taxes that are Other Connection Taxes imposed with respect to an assignment (other than an
assignment made pursuant to Section 2.20 of this Agreement).
“Out-of-Balance” is defined in Section 3.2(b)(v) of this Agreement.
“PACE Loan” means any (a) “Property-Assessed Clean Energy loan”, or
(b) other indebtedness, without regard to the name given to such indebtedness, that is (i) incurred
for improvements to the Property for the purpose of increasing energy efficiency, increasing use
of renewable energy sources, resource conservation or a combination of the foregoing, and
(ii) repaid through multi-year assessments against the Property.
“Participant Register” is defined in Section 12.1(c) of this Agreement.
“Patriot Act” means the Uniting and Strengthening America by Providing
Appropriate Tools Required to Intercept and Obstruct Terrorism (USA PATRIOT ACT) Act of
2001, as the same may be amended from time to time, and corresponding provisions of future
Legal Requirements.
“Patriot Act Offense” means any violation of the criminal laws of the United
States of America or of any of the several states, or that would be a criminal violation if
committed within the jurisdiction of the United States of America or any of the several states,
relating to terrorism or the laundering of monetary instruments, including any offense under any
Anti-Money Laundering Laws.
“Payment Date” means the first (1st) New York Banking Day of the first
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calendar month following the date of the Note, and on the first (1st) New York Banking Day of
each calendar month thereafter until the Maturity Date, provided that, if the Loan is funded on a
date which is within the last five (5) days of a calendar month, then Borrower’s first monthly
interest payment shall be on the first (1st) day of the second (2nd) calendar month following the
date of the Note.
“Permitted Change Order” is defined in Section 4.5(a) of this Agreement.
“Permitted Contingency Allocation” is defined in Section 4.12 of this
Agreement.
“Permitted Encumbrances” means, with respect to the Property, collectively,
(a) the Lien created by the Loan Documents, (b) all Liens and other matters disclosed in the Title
Policy, (c) Liens, if any, for Taxes imposed by any Governmental Authority not yet delinquent or
which are contested in compliance with Section 8.3, (d) Liens which are mechanic’s liens (or
claims of mechanic’s liens) or stop notices (or claims of stop notices) which are contested or
discharged in compliance with Section 4.2, (e) Liens or claims of Lien (which are not
mechanic’s liens or stop notices) which are contested or discharged in compliance with Section
8.15, and (f) such governmental, public utility and private restrictions, covenants, reservations,
easements, licenses or other agreements of an immaterial nature which may be granted by
Borrower after the Effective Date and which do not have a Material Adverse Effect.
“Permitted Indebtedness” means, in the case of Borrower, (i) the Debt, and (ii)
(A) prior to the Final Completion of the Construction Work, all amounts payable by Borrower
pursuant to Contract Documents entered into in compliance with this Agreement, and (B) from
and after the Final Completion of the Construction Work, unsecured trade and operational debt
incurred in the ordinary course of business relating to the ownership and operation of the
Property and the routine administration of Borrower, in amounts not to exceed two percent
(2.0%) of the Loan Amount, which liabilities are not due more than sixty (60) days past the date
incurred, are not evidenced by a note, and are paid when due.
“Permitted Transfer” is defined in Section 8.14(b) of this Agreement.
“Person” means any individual, corporation, partnership, limited liability
company, trust, unincorporated organization or other entity, and any Governmental Authority.
“Personal Property” means any tangible and intangible personal property of
Borrower in which Lender shall be granted a Lien pursuant to the Security Instrument or any
other Loan Document.
“Pfandbrief Pledge” is defined in Section 12.1(d) of this Agreement.
“Plans and Specifications” means all final plans and specifications which
describe and show the labor, materials, equipment, fixtures and furnishings necessary for the
construction of the Improvements (and also showing minimum grade of finishes and furnishings
for all areas of the Improvements, to be leased or sold in ready-for-occupancy condition), in each
case delivered by Borrower to Lender, prepared by Borrower’s Design-Builder (and its Architect
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and consultants) and Design Professionals and approved by Lender (in consultation with its
construction consultant, as applicable) and, to the extent then required, by any applicable
Governmental Authority and such other parties whose approval or consent may be required
under any law, regulation, prior agreement or this Agreement, and all modifications thereof made
by Change Orders permitted pursuant to the terms of this Agreement. A list of the presently
existing Plans and Specifications is attached hereto as Schedule IV.
“Plastic Express” means Plastic Express Inc., a Nevada corporation.
“Plastic Express Lease” means that certain Lease Agreement dated as of April 2,
2021 by and between Borrower, as landlord, and Plastic Express Inc., as tenant for the lease of
the Building.
“Policy” and “Policies” are defined in the introductory paragraph to Article V.
“Potential Default” means a condition or event which has occurred and which,
after notice or lapse of time, or both, would constitute an Event of Default if that condition or
event were not cured within any applicable cure period.
“Prime Rate” means the rate of interest published in The Wall Street Journal
from time to time as the “Prime Rate”. If more than one “Prime Rate” is published in The Wall
Street Journal for a day, the average of such “Prime Rates” shall be used, and such average shall
be rounded up to the nearest one thousandth of one percent (0.001%). If The Wall Street Journal
ceases to publish the “Prime Rate”, then Lender shall select an equivalent publication that
publishes such “Prime Rate”, and if such “Prime Rates” are no longer generally published or are
limited, regulated or administered by a governmental or quasigovernmental body, then Lender
shall select a comparable interest rate index.
“Property” means, collectively, the Real Property, the Personal Property and the
Improvements.
“Property Management Agreement” means any property management
agreement entered into by Borrower with a Property Manager, in any case as expressly permitted
hereunder.
“Property Manager” means (i) Capital Development Management, Inc., a
Delaware corporation, or (ii) any other property manager for the Property as approved by Lender
pursuant to this Agreement.
“Property Requirements” means (a) all covenants, agreements, restrictions and
encumbrances contained in any instruments, either of record or known to Borrower, at any time
in force affecting the Property or any part thereof, and (b) terms of any insurance policy
maintained by or on behalf of Borrower.
“Property Tax Account” is defined in Section 10.3(a) of this Agreement.
“Property Tax Funds” has the meaning set forth in Section 10.3(a) of this
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CONSTRUCTION LOAN AGREEMENT
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Agreement.
“Property Taxes” means all real estate and personal property taxes, assessments,
water rates or sewer rents or user fees, now or hereafter levied or assessed or imposed against the
Property or part thereof.
“Punchlist Items” means, collectively, items of construction, decoration,
mechanical adjustment or installation that remain to be completed after Substantial Completion,
the non-completion of which does not prevent the use and occupancy of the Improvements for
their intended purposes, as set forth in the temporary certificate of occupancy for the
Improvements or which otherwise remain incomplete under the Contract Documents, and which
do not exceed One Million and No/100 Dollars ($1,000,000.00) in the aggregate to complete.
“Purchase Agreement” means that certain Purchase and Sale Agreement, dated
as of January 14, 2021, between Seller and Sponsor (“Original Buyer”), as amended by that
certain First Amendment to the Purchase and Sale Agreement dated as of April 19, 2021, by and
between Seller and Original Buyer. All right, title and interest as “Buyer” under the Purchase
Agreement has been assigned by Original Buyer to Borrower pursuant to that certain Partial
Assignment and Assumption of Real Estate Purchase Agreement dated as of April 16, 2021, by
and between Original Buyer, as assignee, and Borrower, as assignor, and consented to by Seller.
“Qualified Transferee” shall mean a Person who has been approved by Lender
in its reasonable discretion, which approval shall be based upon Lender’s satisfactory
determination as to the reputable character and creditworthiness of such Person, as evidenced by
credit and background checks performed by Lender and such other financial statements and other
information reasonably requested by Lender, and (A) for whom, prior to the subject Transfer,
Lender shall have received evidence that such Person (1) has never been indicted or convicted of,
or pled guilty or no contest to, a felony and/or a Patriot Act Offense, (2) is not on any
Government List, (3) has never been the subject of a voluntary or involuntary (to the extent the
same has not been discharged) bankruptcy proceeding, and (4) has no material outstanding legal
judgments, litigations or regulatory actions continuing or threatened against itself, its assets
and/or its interests, and (B) for whom Lender shall have first received, if, as a result of such
Transfer, such Person (i) will obtain Control of Borrower or Guarantor, or (ii) is a Person who
(individually or together with its Affiliates) will obtain twenty-five percent (25%) or more of the
direct or indirect Equity Interests in and/or rights to distributions from Borrower or Guarantor,
Satisfactory Search Results.
“Rating Agencies” means Fitch, Moody’s, or S&P or any successor thereto, and
any other nationally recognized statistical rating organization to the extent that any of the
foregoing have been or will be engaged by Lender or its designees in connection with or in
anticipation of a Secondary Market Transaction (each, individually, a “Rating Agency”).
“Real Property” means that certain parcel of real property located in the City of
Baytown, County of Chambers, State of Texas and more particularly described in Exhibit A
attached hereto and all appurtenances thereto.
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“Register” is defined in Section 12.1(b) of this Agreement.
“Regulatory Change” means any change after the date of this Agreement in
United States federal, state or foreign laws or regulations or the adoption or making after such
date of any interpretations, directives or requests applying to a class of lenders, including Lender,
under any United States federal, state or foreign laws or regulations (whether or not having the
force of law) or any governmental or monetary authority charged with the interpretation or
administration thereof.
“Release” means, with respect to Hazardous Materials, but is not limited to, any
presence, release, deposit, discharge, emission, leaking, leaching, spilling, seeping, migrating,
injecting, pumping, pouring, emptying, escaping, dumping, disposing or other movement of
Hazardous Materials.
“Relevant Governmental Body” means the Federal Reserve Board and/or the
Federal Reserve Bank of New York, or a committee officially endorsed or convened by the
Federal Reserve Board and/or the Federal Reserve Bank of New York or any successor thereto.
“Remediation” means, but is not limited to, any activity to (a) clean up, detoxify,
decontaminate, disinfect, contain, treat, remove, respond to, correct, dispose of, transport, or
otherwise remediate, prevent, cure or mitigate any Release of any Hazardous Materials,
including any action to comply with any Hazardous Materials Laws or with any permits issued
pursuant thereto; or (b) inspect, investigate, study, monitor, assess, audit, sample, test, or
evaluate any actual, potential or threatened Release of Hazardous Materials.
“Rents” means, with respect to the Property, all rents (whether denoted as
advance rent, minimum rent, percentage rent, additional rent or otherwise), receipts, issues,
income, royalties, profits, revenues, proceeds, bonuses, deposits (whether denoted as security
deposits or otherwise), lease termination fees or payments, rejection damages, buy-out fees and
any other fees made or to be made in lieu of rent, any award made hereafter to Borrower in any
court proceeding involving any tenant, lessee, licensee or concessionaire under any of the Leases
in any Bankruptcy Action in any state or federal court, and all other payments, rights and
benefits of whatever nature from time to time due under the Leases.
“Required Title Endorsements” is defined in Section 3.3(h)(ii) of this
Agreement.
“Reserve Accounts” means, collectively, the Property Tax Account, the
Insurance Account, the Balancing Account and any other reserve accounts as may be established
pursuant to the Loan Documents.
“Restoration” is defined in Section 5.8 of this Agreement.
“Restoration Proceeds” is defined in Section 5.7(a) of this Agreement.
“Restoration Proceeds Threshold” is defined in Section 5.7(a) of this
Agreement.
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CONSTRUCTION LOAN AGREEMENT
CEDAR PORT LOGISTICS CENTER
DEAL ID 21-0070
265741215
“Reuters LIBOR01” means Reuters Screen LIBOR01 Page (or such other page
as may replace Reuters Screen LIBOR01 Page for the purpose of displaying London interbank
offered rates of major banks for United States dollar deposits).
“Risk-Based Capital Guidelines” means (a) the risk-based capital guidelines in
effect in the United States regardless of the date enacted, adopted or issued, including transition
rules, and (b) the corresponding capital regulations promulgated by regulatory authorities outside
the United States, including transition rules, and, in each case, any amendments to such
regulations, and, without limiting the foregoing, including all requests, rules, guidelines, or
directives promulgated by the Bank for International Settlements, the Basel Committee on
Banking Supervision (or any successor or similar authority), or the United States or foreign
regulatory authorities, in each case pursuant to the Basel Accord.
“S&P” means Standard & Poor’s Ratings Services, a division of The McGraw
Hill Companies, Inc.
“Sale Agreement” means that certain Purchase and Sale Agreement, dated as of
even date herewith, between Borrower, as seller, and Buyer, as buyer.
“Sale Agreement Escrow Agent” shall have the same meaning as “Escrow
Agent” as such term is defined in the Sale Agreement.
“Satisfactory Search Results” shall mean, with respect to any Person, review
and approval of Lender’s customary anti-financial crime, “know your customer” and other
internal searches and procedures and satisfactory credit history check, litigation, judgment, and
other related searches that indicate that there are no pending litigation, pending proceedings,
outstanding judgments (in each case that would disqualify such Person in the ordinary course of
Lender’s business) or violation of any Anti-Money Laundering Laws against such Person and
provide confirmation that such Person is not on any Government Lists.
“Secondary Market Transaction” is defined in Section 12.1(a) of this
Agreement.
“Security Deposit Account” is defined in Section 8.9(d) of this Agreement.
“Security Instrument” means that certain Construction Deed of Trust,
Assignment of Leases and Rents, Security Agreement, and Fixture Filing executed and delivered
by Borrower in favor of Lender pursuant to this Agreement which encumbers all of Borrower’s
right, title and interest in and to the Property.
“Seller” means TGS Cedar Port Partners, L.P., a Texas limited partnership.
“Servicer” is defined in Section 2.23 of this Agreement.
“SOFR” means, with respect to any day means the secured overnight financing
rate published for such day by the Federal Reserve Bank of New York, as the administrator
thereof, (or a successor administrator) on its website.
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CONSTRUCTION LOAN AGREEMENT
CEDAR PORT LOGISTICS CENTER
DEAL ID 21-0070
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“Soft Costs Holdback” means the portion of the Loan initially designated to fund
Approved Soft Costs. The initial amount of the Soft Costs Holdback is set forth on Exhibit C.
“Special Purpose Entity” is defined in Exhibit L of this Agreement.
“Sponsor” means Capital Development Partners, Inc., a Texas corporation.
“Spread” has the meaning given to such term in the definition of “Applicable
Interest Rate” above.
“State” means the State of Texas.
“Subdivision Map” is defined in Section 8.11 of this Agreement.
“Subordination Agreement” means a subordination, nondisturbance and
attornment agreement executed by a tenant of the Property in form and substance acceptable to
Lender.
“Substantial Completion” or “Substantially Complete” means that Borrower
shall have caused each of the matters described in Section 4.1(f) of this Agreement to have been
completed.
“Substantial Completion Date” means the date upon which Substantial
Completion is achieved.
“Substantial Completion Outside Date” means the Milestone Date for
Substantial Completion.
“Taking” is defined in Section 5.7(a) of this Agreement.
“Tax” means all present or future taxes, levies, imposts, duties, deductions,
withholdings (including backup withholding), assessments, fees or other charges imposed by any
Governmental Authority, including any interest, additions to tax or penalties applicable thereto.
“Tenant Estoppel Certificate” means a tenant estoppel certificate executed by a
tenant of the Property in form and substance acceptable to Lender.
“Tenant Notice” is defined in Section 10.2(a) of this Agreement.
“Term SOFR” means the forward-looking term rate for the Corresponding Tenor
based on SOFR that has been selected or recommended by the Relevant Governmental Body.
“Title Company” means Fidelity National Title Insurance Company.
“Title Policy” means the most current version of TLTA loan title policy issued by
Title Company insuring the first priority Lien of the Security Instrument in the full maximum
possible amount of the Loan subject only to such exceptions approved by Lender and including
such endorsements as are required by Lender.
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CEDAR PORT LOGISTICS CENTER
DEAL ID 21-0070
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“Transfer” means the sale, transfer, hypothecation, encumbrance, mortgage,
conveyance, lease (excluding residential leases of portions of the Improvements done in the
ordinary course of business), alienation, assignment, disposition, divestment, or leasing with
option to purchase, or assignment of the Property, or any portion thereof or interest therein
(whether direct or indirect, legal or equitable, including the issuance, sale, assignment,
alienation, conveyance, divestment, transfer, disposition, hypothecation, mortgage or
encumbrance of any ownership interest in Borrower or in any entity having an ownership interest
in Borrower, whether direct or indirect) (or entering into any agreement or contract to do any of
the foregoing), or undertaking, suffering or causing any of the foregoing to occur voluntarily,
involuntarily or by operation of law.
“Unsatisfactory Work” means any Construction Work which Lender reasonably
determines is defective or has not been completed (i) in a good and workmanlike manner or in
substantial conformity with the Plans and Specifications (or, to the extent any Construction Work
is not specifically addressed in the Plans and Specifications, in a manner consistent with sound
design principles and/or sound construction practices) or (ii) in accordance with all Legal
Requirements.
“U.S. Borrower” means any Person that is a “United States Person” as defined in
Section 7701(a)(30) of the Code.
“U.S. Person” means any Person that is a “United States Person” as defined in
Section 7701(a)(30) of the Code.
“U.S. Tax Compliance Certificate” is defined in Section 2.19(e)(ii)(B)(3) of this
Agreement.
“Write-Down and Conversion Powers” shall mean, with respect to any EEA
Resolution Authority, the Write-Down and Conversion Powers of such EEA Resolution
Authority from time to time under the Bail-In Legislation for the applicable EEA Member
Country, which Write-Down and Conversion Powers are described in the EU Bail-In Legislation
Schedule.
“Yield Maintenance Premium” is defined in Section 2.17 of this Agreement.
1.2
Exhibits and Schedules. Exhibits A, B, C, D, E, F, G, H, I, J, K, L, M, and N,
and Schedules I, II, III, IV, and V, all as attached to this Agreement, are hereby incorporated into
this Agreement.
1.3
Principles of Construction. All references to sections, exhibits, and schedules
are to sections, exhibits, and schedules in or to this Agreement unless otherwise specified. All
uses of the word “including” shall mean “including, without limitation” unless the context shall
indicate otherwise. Unless otherwise specified, the words “hereof”, “herein” and “hereunder”
and words of similar import when used in this Agreement shall refer to this Agreement as a
whole and not to any particular provision of this Agreement. Unless otherwise specified, all
meanings attributed to defined terms herein shall be equally applicable to both the singular and
plural forms of the terms so defined.
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CEDAR PORT LOGISTICS CENTER
DEAL ID 21-0070
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ARTICLE II
THE LOAN
2.1
Loan. Subject to the terms and conditions contained in this Agreement, and in
reliance upon the representations and warranties of Borrower set forth hereunder and in the other
Loan Documents, Lender hereby agrees to lend to Borrower, and Borrower hereby agrees to
borrow from Lender, the maximum principal sum of up to Fifty Million and No/100 Dollars
($50,000,000.00). The Loan is evidenced by the Note. The Note is secured by the Security
Instrument encumbering the Property. No portion of the Loan, once repaid, may be reborrowed
by Borrower. Borrower agrees to repay the Indebtedness in accordance with the terms of the
Note and the terms hereof.
2.2
Use of Funds. Borrower shall use the proceeds of the Loan for the purposes of
acquiring, refinancing, and or developing the Property, for Borrower’s actual documented costs
of Construction Work or other improvements to the Property as permitted hereunder, and for
such other purposes and uses as are permitted or required under this Agreement and the other
Loan Documents.
2.3
Loan Fee. Borrower shall pay to Lender, at Loan closing, a loan fee in the
amount of Five Hundred Thousand and No/100 Dollars ($500,000.00) (the “Loan Fee”).
Borrower shall pay the Loan Fee to Lender from Borrower Equity, which Borrower Equity shall
not come from Loan proceeds or otherwise be borrowed by Borrower (or any Member) at any
tier or level. The Loan Fee shall be deemed earned when due and shall not be subject to
reduction or be refundable under any circumstances.
2.4
Funding of Loan.
(a)
Initial Funding Amount. Subject to the terms, provisions and conditions
of this Agreement and the other Loan Documents, on the Effective Date, Borrower agrees to
borrow from Lender, and Lender shall disburse to Borrower from the proceeds of the Loan, the
sum of Four Million and No/100 Dollars (4,000,000.00) (the “Initial Funding Amount”).
(b)
Disbursement Requests Subsequent to Effective Date. Any disbursement
of any Loan proceeds to be made by Lender from Holdbacks and/or Reserve Accounts
subsequent to the funding of the Initial Funding Amount as expressly permitted hereunder shall
be made not more frequently than one (1) occasion in any one (1) calendar month (each, a
“Disbursement” and the first Disbursement from the Construction Holdback being defined
herein as the “Initial Construction Advance”). Such funds shall be disbursed by Lender on any
Business Day of the month as Borrower may request, provided that (x) all conditions precedent
to funding set forth hereunder have been satisfied as determined by Lender, and (y) Borrower
shall have given to Lender either (i) an original written request for disbursement at 10100 Santa
Monica Blvd., Suite 1000, Los Angeles, CA 90067, Attention: Servicing (or such other address
as Lender shall designate in writing) or (ii) an electronic request for disbursement to an email or
web hosting address specified by Lender, in each case, in the form required pursuant hereto not
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CEDAR PORT LOGISTICS CENTER
DEAL ID 21-0070
265741215
less than ten (10) Business Days prior to the date that Borrower desires such Disbursement to be
made by Lender.
(c)
Funding of Loan Proceeds Subsequent to Effective Date. Subject to
Lender’s approval of the request for disbursement and in accordance with the terms and
conditions contained in this Agreement, including, without limitation, the conditions to
disbursement set forth in Article III of this Agreement, Lender shall use commercially reasonable
efforts to make available to Borrower the proceeds of each disbursement requested by Borrower
on the funding date specified in Borrower’s request for disbursement (or such other date as
Lender shall deem appropriate) and shall disburse such funds into such account of Borrower as
Borrower shall specify and Lender shall approve.
2.5
Loan Documents; Guaranty Documents. Borrower shall deliver, or cause to be
delivered to Lender concurrently with this Agreement, each of the documents, properly executed
and in recordable form, as applicable, described in Exhibit B hereto as the “Loan Documents”,
together with the other documents described in Exhibit B hereto which are listed as “Other
Documents” and not Loan Documents (collectively, the “Guaranty Documents”). Borrower
and Lender acknowledge and agree that none of the Guaranty Documents are or shall be secured
by the Security Instrument.
2.6
Effective Date. The dates of this Agreement and the other Loan Documents are
for reference purposes only. The effective date of Borrower and Lender’s obligations under the
Loan Documents (the “Effective Date”) shall be the date upon which the Loan is deemed
“closed” by Lender and Borrower.
2.7
Interest on Loan.
(a)
Generally. Interest shall accrue on the Loan at the Applicable Interest
Rate, and shall be paid by Borrower in the amounts and at the times hereinafter provided.
Lender shall provide Borrower with a monthly interest statement indicating the amount of
interest payable for such month. On each Payment Date, Borrower shall pay interest only on the
outstanding unpaid principal balance of the Loan accrued and accruing through the last day of
the Interest Period, provided that if the Loan is funded on a date which is within the last five (5)
days of a calendar month, Borrower’s first monthly interest payment shall be on the first day of
the first (1st) calendar month following the date of this Agreement. For purposes of making
payments hereunder, but not for purposes of calculating interest accrual periods, if the day on
which such payment is due is not a Business Day, then amounts due on such date shall be due on
the immediately preceding Business Day. Neither the depletion of the Interest Holdback nor the
non-satisfaction of any condition to disbursement contained in Article III of this Agreement shall
release Borrower from any of Borrower’s Obligations under this Agreement or the other Loan
Documents, including the obligation to pay interest and other charges and payment under or with
respect to the Loan when due from other funding sources of Borrower.
(b)
Computations. Interest shall be computed hereunder based on a 360-day
year, and shall accrue for each and every day (365 days per year, 366 days per leap year) on
which any indebtedness remains outstanding hereunder. In computing the number of days
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CONSTRUCTION LOAN AGREEMENT
CEDAR PORT LOGISTICS CENTER
DEAL ID 21-0070
265741215
during which interest accrues, the day on which funds are initially advanced shall be included
regardless of the time of day such advance is made, and the day on which funds are repaid shall
be included unless repayment is credited prior to close of business. Payments in federal funds
immediately available in the place designated for payment made by Borrower prior to 11:00 a.m.
Pacific Time, shall be credited prior to close of business, while other payments may, at the
option of Lender, not be credited until immediately available to Lender in federal funds in the
place designated for payment prior to 11:00 a.m., Pacific Time, at such place of payment on a
day on which Lender is open for business.
(c)
Late Payment Charge. If any principal, interest or other sum due under
any Loan Document is not paid by Borrower within five (5) calendar days after delinquency
(other than the remaining principal due on the Maturity Date or an acceleration thereof), and is
not a result of (i) a delay in Lender’s funding an advance due pursuant to the terms and
conditions of this Agreement, or (ii) failure to make such payment from an applicable Reserve
Account in violation of this Agreement if adequate funds are available in the applicable Reserve
Account for such payments, Borrower shall pay to Lender upon demand an amount equal to the
lesser of five percent (5.0%) of such unpaid sum or the maximum amount permitted by
applicable law (the “Late Payment Charge”), to defray the expense incurred by Lender in
handling and processing such delinquent payment and to compensate Lender for the loss of the
use of such delinquent payment. Such Late Payment Charge shall be secured by the Loan
Documents.
(d)
Applicable Interest Rate. The “Applicable Interest Rate” upon which
interest shall be calculated for the Debt shall, from and after the Effective Date, be one or more
of the following:
(i)
Provided no Event of Default exists:
(A)
The Applicable Interest Rate for the Interest Period thereof
shall be the Benchmark plus four percent (4.0%) (the “Spread”),
provided, however, under no circumstance will the Applicable Interest
Rate be less than 4.25%. Lender’s internal records of Applicable Interest
Rates shall be determinative in the absence of manifest error.
(B)
Notwithstanding anything to the contrary herein or in any
other Loan Document, upon the occurrence of a Benchmark Transition
Event or an Early Opt-in Election, as applicable, the Benchmark will
convert to the Benchmark Replacement. Such conversion will be effective
on the first day of the Interest Period following the date when Lender
provides notice to Borrower of the occurrence of such event. Lender will
promptly notify Borrower of any occurrence of a Benchmark Transition
Event or of an Early Opt-in Election, as applicable.
(C)
In connection with the implementation of a Benchmark
Replacement, Lender will have the right to make Benchmark Replacement
Conforming Changes from time to time and, notwithstanding anything to
the contrary herein or in any other Loan Document, any amendments
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CEDAR PORT LOGISTICS CENTER
DEAL ID 21-0070
265741215
implementing such Benchmark Replacement Conforming Changes will
become effective without any further action or consent of any other party
to this Agreement. Any determination, decision or election that may be
made by Lender pursuant to the provisions of this Section 2.7, including
any determination with respect to a tenor, rate or adjustment or of the
occurrence or non-occurrence of an event, circumstance or date, and any
decision to take or refrain from taking any action or any election, will be
conclusive and binding absent manifest error and will be made in Lender’s
sole discretion and without Borrower consent.
(ii)
After the occurrence and during the continuance of an Event of
Default, the entire unpaid Debt shall bear interest at the Default Interest Rate, and shall be
payable upon demand from time to time, to the extent permitted by applicable law.
(e)
Unavailability of Benchmark. Unless and until a Benchmark Replacement
is implemented with respect to the current Benchmark: If Lender determines (which
determination shall be conclusive and binding upon Borrower absent manifest error) that other
than as a result of a Benchmark Transition Event or an Early Opt-in Election (a) United States
dollar deposits are not being offered to banks in the applicable market or at the applicable rate of
the then Benchmark for the applicable amount and Interest Period; or (b) reasonable and
adequate means do not exist for ascertaining the Benchmark for an applicable Interest Period; or
(c) the Benchmark does not adequately and fairly reflect the cost to Lender of making or
maintaining the Loan during an applicable Interest Period (any such determination being
hereinafter referred to as a “Benchmark Unavailable Determination”), then Lender shall
forthwith give notice by telephone of such determination, confirmed in writing, to Borrower at
least one (1) day prior to the last day of the related Interest Period. If such notice is given, then
the Applicable Interest Rate shall be converted, on the last day of the then current Interest Period,
to Base Rate plus the Spread.
(f)
In the event of (a) the payment of any principal of the Debt other than on a
Payment Date therefor (including as a result of an Event of Default), or (b) the failure to borrow,
convert, continue or prepay any portion of the Debt on the date specified in any notice delivered
pursuant hereto, then, in any such event, the Borrower shall compensate each Lender for any
loss, cost and expense attributable to such event, including any loss, cost or expense arising from
the liquidation or redeployment of funds. A certificate of Lender setting forth any amount or
amounts that such Lender is entitled to receive pursuant to this Section shall be delivered to the
Borrower and shall be conclusive absent manifest error. The Borrower shall pay such Lender the
amount shown as due on any such certificate within 10 days after receipt thereof. This Section
will survive repayment of the Debt.
2.8
Loan Payments. Payments on the outstanding amount of the Loan shall be paid
by Borrower in accordance with the terms of this Agreement.
2.9
Maturity Date. Unless extended pursuant to Borrower’s valid and timely
exercise of the Extension Option (in which event, the Maturity Date of the Loan shall be upon
the valid and timely exercise of the Extension Option, the date set forth in the definition of
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CEDAR PORT LOGISTICS CENTER
DEAL ID 21-0070
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“Extended Maturity Date” in Section 1.1 above), the Maturity Date of the Loan shall be the
date set forth in the definition of “Original Maturity Date” in Section 1.1 above, at which time
(unless earlier accelerated upon an Event of Default) all sums due and owing under this
Agreement and the other Loan Documents shall be repaid in full. All payments due to Lender
under this Agreement, whether upon the Maturity Date or otherwise, shall be paid in
immediately available funds.
2.10 Credit for Payments. Any payment made upon the outstanding principal
balance of the Loan, or the accrued interest thereon, shall be credited as of the Business Day
received, provided that such payment is made by Borrower no later than 11:00 a.m. (Pacific
Standard Time or Pacific Daylight Time, as applicable) and constitutes immediately available
funds. Any payment made after such time or which does not constitute immediately available
funds shall be credited upon such funds having become unconditionally and immediately
available to Lender.
2.11 Full Repayment and Reconveyance. Upon receipt of all amounts owing and
outstanding under the Loan Documents, Lender shall issue a full reconveyance of the Property
from the Lien of the Security Instrument, provided that all of the following conditions shall be
satisfied at the time of, and with respect to, such reconveyance: (a) Lender shall have received all
escrow, closing and recording costs, the costs of preparing and delivering such reconveyance and
any sums then due and payable under the Loan Documents; (b) Lender shall have received any
Yield Maintenance Premium payable hereunder; and (c) Lender shall have received a written
release satisfactory to Lender of any set aside letter, letter of credit or other form of undertaking
which Lender has issued to any surety, Governmental Authority or other Person in connection
with the Loan and/or the Property. Lender’s obligation to make further disbursements under the
Loan shall terminate as to any portion of the Loan undisbursed as of the date of issuance of such
full reconveyance, and any commitment of Lender to lend any undisbursed portion of the Loan
shall be cancelled.
2.12 Authorization. Borrower shall act under this Agreement and the other Loan
Documents only through such authorized representatives as Borrower shall designate to Lender
in writing from time to time. Borrower hereby designates each of John Knox Porter, Jr. and Bill
Feldmann, acting alone, as Borrower’s authorized representative(s) for purposes of this
Agreement and the other Loan Documents, and any such Person, acting alone, shall continue as
Borrower’s authorized representatives until such time as Borrower shall duly authorize other or
additional Persons so to act on behalf of Borrower. A specimen signature of such authorized
representative of Borrower is attached hereto as Exhibit N. Upon Borrower’s designation of any
other individual(s) to act on behalf of Borrower as Borrower’s authorized representative,
Borrower shall deliver to Lender a replacement specimen signature to attach to this Agreement
as Exhibit N. Lender shall be entitled to act on the instructions of any Person identifying himself
or herself as one of the Persons authorized by Borrower, and Borrower shall be bound thereby in
the same manner as if any such Person were actually so authorized. Borrower shall indemnify,
defend and hold Lender harmless from and against any and all Liabilities and Costs arising out of
or in any way connected with Lender’s acceptance of or acting upon any instructions or
directions from the Person or Persons so authorized.
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CONSTRUCTION LOAN AGREEMENT
CEDAR PORT LOGISTICS CENTER
DEAL ID 21-0070
265741215
2.13
Extension Option.
(a)
Borrower shall have the option to extend the term of the Loan (“Extension
Option”) from the Original Maturity Date to the Extended Maturity Date (the “Extended
Term”), strictly upon satisfaction of all of the terms and conditions set forth below:
(i)
Notice. Borrower shall provide Lender with written notice of
Borrower’s request to exercise the Extension Option (“Extension Notice”) not more than
one hundred twenty (120) days, but not less than thirty (30) days, prior to the Original
Maturity Date.
(ii)
No Event of Default; No Potential Default. On the date of
Lender’s receipt of the Extension Notice and on the Original Maturity Date, no Event of
Default shall exist and no Potential Default shall exist, and Borrower shall so certify to
Lender in writing.
(iii) Extension Fee. On or before the Original Maturity Date, Borrower
shall pay to Lender an extension fee in immediately available funds in an amount equal to
one quarter of one percent (0.25%) of the outstanding principal balance of the Note as of
the Original Maturity Date (collectively, the “Extension Fee”). The Extension Fee shall
be deemed earned upon payment and shall not be subject to reduction or be refundable
under any circumstances. If Borrower delivers the Extension Notice, Borrower shall
reimburse Lender for all reasonable out-of-pocket costs and expenses actually incurred
by Lender, whether paid to third-parties or otherwise (including outside legal counsel), in
connection with its approval or disapproval and documentation of the extension of the
Original Maturity Date, within ten (10) days after Borrower’s receipt of a notice from
Lender setting forth the amount of such costs and expenses and a demand for
reimbursement. Such costs and expenses may include, but shall not be limited to, legal
fees, title insurance endorsement charges, environmental review costs, appraisal fees,
audit fees and inspection fees.
(iv)
Documents. Borrower shall execute, or cause the execution of, all
documents reasonably required by Lender to exercise the Extension Option, including,
without limitation, consents of Guarantor, and shall deliver to Lender, at Borrower’s sole
cost and expense, such title insurance endorsements to the Title Policy as Lender shall
reasonably require. Without limitation thereon, Borrower shall certify to Lender, in a
form of writing acceptable to Lender, that each and every representation and warranty
made by Borrower hereunder or under the other Loan Documents, remains true, correct
and complete in all material respects.
(v)
Debt Service Coverage Ratio. The Debt Service Coverage Ratio,
as of the date of the Extension Notice, shall be not less than 1.00:1.00.
(vi)
Loan-to-Value Threshold. The Loan-to-Value Ratio of the
Property, as of the Original Maturity Date, is equal to or less than seventy-five percent
(75%), as determined by an “as-is” Appraisal engaged by Lender (at Borrower’s sole cost
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CONSTRUCTION LOAN AGREEMENT
CEDAR PORT LOGISTICS CENTER
DEAL ID 21-0070
265741215
and expense) at the time of Lender’s receipt of the Extension Notice, and otherwise
complying with the requirements set forth herein.
(vii) Interest Rate Protection Agreement. Borrower shall (i) purchase a
new Interest Rate Protection Agreement and (ii) assign such new Interest Rate Protection
Agreement in writing pursuant to an Assignment of Interest Rate Protection Agreement
acceptable to Lender. If the Applicable Interest Rate is no longer based on LIBOR, then
the Interest Rate Protection Agreement that must be procured will be the Benchmark
Index Rate Cap Agreement (with the strike price being established as provided in the
definition thereof).
(viii) Plastic Express Lease. On or before the Original Maturity Date,
Plastic Express shall take occupancy of the Property and has commenced payment of full
unabated base rent and recoveries due under the Plastic Express Lease.
(b)
Intentionally Deleted.
(c)
Intentionally Deleted.
2.14
Intentionally Deleted.
2.15
Intentionally Deleted.
2.16 Recourse to Borrower. The Loan shall be full recourse to Borrower. Further,
Lender shall have the right to (a) proceed against Borrower and/or Guarantor under the
Environmental Indemnity Agreement, and/or to proceed against Guarantor under the Carveout
Guaranty, the Completion Guaranty and/or the Interest and Carry Guaranty; (b) name Borrower
or Guarantor in any foreclosure or similar legal action to the extent necessary to enforce
Lender’s rights under the Loan Documents (it being acknowledged, however, that any such legal
action shall be subject to the limitations on collection set forth in this Section); and/or (c) obtain
injunctive relief against any Borrower Party or other Person, or maintain any suit or action in
connection with the preservation, enforcement or foreclosure of any Lien now or hereafter
securing any Indebtedness or Obligations of Borrower under this Agreement or the other Loan
Documents.
2.17
Prepayment.
(a)
For the period commencing on the Effective Date and through the
Maturity Date of the Loan, Borrower may prepay the Loan in whole, but not in part, on a
regularly scheduled Payment Date, upon not less than thirty (30) days’ (but no more than one
hundred twenty (120) days’) prior written notice to Lender and the payment to Lender of (a) all
outstanding principal and accrued but unpaid interest due under the Loan and all other amounts
due under the Note, this Agreement and the other Loan Documents (including, without
limitation, any breakage costs due under Section 2.7(f) above) plus (b) a prepayment premium
(the “Yield Maintenance Premium”) equal to (i) Two Million Nine Hundred Fifty Thousand
and No/100 Dollars ($2,950,000.00), minus (ii) the aggregate sum of all interest payments
(excluding any default interest) actually received by Lender as of the date of prepayment
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CONSTRUCTION LOAN AGREEMENT
CEDAR PORT LOGISTICS CENTER
DEAL ID 21-0070
265741215
(including, without limitation, interest paid at the time of such prepayment), including amounts
paid to Lender from disbursements from the Interest Holdback.
(b)
Notwithstanding the foregoing, upon Lender’s receipt of the Earnest
Money Deposit pursuant to Section 8.25, such funds shall be applied as a partial prepayment of
the outstanding principal balance of the Loan without payment of any Yield Maintenance
Premium.
2.18
Increased Costs Generally.
(a)
If any Regulatory Change: (a) shall subject Lender to any Taxes (other
than (A) Indemnified Taxes, (B) Taxes described in clauses (b) through (d) of the definition of
Excluded Taxes and (C) Connection Income Taxes) with respect to its loans, commitments or
other obligations or its deposits, reserves other liabilities or capital attributable thereto ; or (b)
shall impose, modify or deem applicable any reserve, special deposit, capital, insurance charge
or similar requirement against assets of, deposits with or for the account of, or credit extended
by, Lender or shall impose on Lender any other condition affecting its loans or its obligation to
make such loans, and the result of any of the foregoing shall be to increase the cost to such
Lender of making, converting to, continuing or maintaining any Loan or of maintaining its
obligation to make the Loan, or to increase the cost to such Lender, or to reduce the amount of
any sum received or receivable by such Lender hereunder (whether of principal, interest or any
other amount) then, upon request of Lender, the Borrower will pay to such Lender such
additional amount or amounts as will compensate such Lender, as the case may be, for such
additional costs incurred or reduction suffered.
(b)
A certificate of a Lender setting forth the amount or amounts necessary to
compensate such Lender or its holding company, as the case may be, as specified in
paragraph (a) of this Section and delivered to the Borrower, shall be conclusive absent manifest
error. The Borrower shall pay such Lender the amount shown as due on any such certificate
within 10 days after receipt thereof.
(c)
Failure or delay on the part of any Lender to demand compensation
pursuant to this Section shall not constitute a waiver of such Lender’s right to demand such
compensation; provided that the Borrower shall not be required to compensate a Lender pursuant
to this Section for any increased costs incurred or reductions suffered more than nine months
prior to the date that such Lender notifies the Borrower of the Regulatory Change giving rise to
such increased costs or reductions, and of such Lender’s intention to claim compensation
therefor (except that, if the Regulatory Change giving rise to such increased costs or reductions is
retroactive, then the nine-month period referred to above shall be extended to include the period
of retroactive effect thereof).
2.19
Taxes.
(a)
Payments Free of Taxes. Any and all payments by or on account of any
obligation of Borrower under any Loan Document shall be made without deduction or
withholding for any Taxes, except as required by applicable law. If any applicable law (as
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CONSTRUCTION LOAN AGREEMENT
CEDAR PORT LOGISTICS CENTER
DEAL ID 21-0070
265741215
determined in the good faith discretion of Borrower) requires the deduction or withholding of
any Tax from any such payment by Borrower, then Borrower shall be entitled to make such
deduction or withholding and shall timely pay the full amount deducted or withheld to the
relevant Governmental Authority in accordance with applicable law and, if such Tax is an
Indemnified Tax, then the sum payable by Borrower shall be increased as necessary so that, after
such deduction or withholding has been made (including such deductions and withholdings
applicable to additional sums payable under this Section), Lender receives an amount equal to
the sum it would have received had no such deduction or withholding been made.
(b)
Payment of Other Taxes by Borrower. Borrower shall timely pay to the
relevant Governmental Authority in accordance with applicable law any Other Taxes.
(c)
Indemnification by Borrower. Borrower shall indemnify Lender, within
ten (10) days after demand therefor, for the full amount of any Indemnified Taxes (including
Indemnified Taxes imposed or asserted on or attributable to amounts payable under this Section)
payable or paid by Lender or required to be withheld or deducted from a payment to Lender and
any reasonable expenses arising therefrom or with respect thereto, whether or not such
Indemnified Taxes were correctly or legally imposed or asserted by the relevant Governmental
Authority. A certificate as to the amount of such payment or liability delivered to Borrower by a
Lender shall be conclusive absent manifest error.
(d)
Evidence of Payments. As soon as practicable after any payment of Taxes
by Borrower to a Governmental Authority pursuant to this Section 2.19, Borrower shall deliver
to Lender the original or a certified copy of a receipt issued by such Governmental Authority
evidencing such payment, a copy of the return reporting such payment or other evidence of such
payment reasonably satisfactory to Lender.
(e)
Status of Lenders.
(i)
Any Lender that is entitled to an exemption from or reduction of
withholding Tax with respect to payments made under any Loan Document shall deliver to
Borrower, at the time or times reasonably requested by Borrower, such properly completed and
executed documentation reasonably requested by Borrower as will permit such payments to be
made without withholding or at a reduced rate of withholding. In addition, any Lender, if
reasonably requested by Borrower, shall deliver such other documentation prescribed by
applicable law or reasonably requested by Borrower as will enable Borrower to determine
whether or not such Lender is subject to backup withholding or information reporting
requirements. Notwithstanding anything to the contrary in the preceding two (2) sentences, the
completion, execution and submission of such documentation (other than such documentation set
forth in Section 2.19(e)(ii)(A), Section 2.19(e)(ii)(B) and Section 2.19(e)(ii)(D) below) shall not
be required if in Lender’s reasonable judgment such completion, execution or submission would
subject such Lender to any material unreimbursed cost or expense or would materially prejudice
the legal or commercial position of such Lender.
(ii)
Without limiting the generality of the foregoing, in the event that
Borrower is a U.S. Borrower,
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CONSTRUCTION LOAN AGREEMENT
CEDAR PORT LOGISTICS CENTER
DEAL ID 21-0070
265741215
(A)
any Lender that is a U.S. Person shall deliver to Borrower
on or about the date on which such Lender becomes a Lender under this Agreement (and from
time to time thereafter upon the reasonable request of Borrower), executed copies of IRS Form
W-9 certifying that such Lender is exempt from U.S. federal backup withholding tax;
(B)
any Foreign Lender shall, to the extent it is legally entitled
to do so, deliver to Borrower (in such number of copies as shall be requested by Borrower) on or
about the date on which such Foreign Lender becomes a Lender under this Agreement (and from
time to time thereafter upon the reasonable request of Borrower), whichever of the following is
applicable:
(1)
in the case of a Foreign Lender claiming the
benefits of an income tax treaty to which the United States is a party (x) with respect to payments
of interest under any Loan Document, executed copies of IRS Form W-8BEN or IRS Form W8BEN-E establishing an exemption from, or reduction of, U.S. federal withholding Tax pursuant
to the “interest” article of such tax treaty and (y) with respect to any other applicable payments
under any Loan Document, IRS Form W-8BEN or IRS Form W-8BEN-E establishing an
exemption from, or reduction of, U.S. federal withholding Tax pursuant to the “business profits”
or “other income” article of such tax treaty;
(2)
executed copies of IRS Form W-8ECI;
(3)
in the case of a Foreign Lender claiming the
benefits of the exemption for portfolio interest under Section 881(c) of the Code, (x) a certificate
to the effect that such Foreign Lender is not a “bank” within the meaning of Section 881(c)(3)(A)
of the Code, a “10 percent shareholder” of Borrower within the meaning of Section 881(c)(3)(B)
of the Code, or a “controlled foreign corporation” related to Borrower as described in
Section 881(c)(3)(C) of the Code, which shall be substantially in the form attached hereto as
Exhibit M-1 (a “U.S. Tax Compliance Certificate”) and (y) executed copies of IRS Form W8BEN or IRS Form W-8BEN-E; or
(4)
to the extent a Foreign Lender is not the beneficial
owner, executed copies of IRS Form W-8IMY, accompanied by IRS Form W-8ECI, IRS Form
W-8BEN or IRS Form W-8BEN-E, a U.S. Tax Compliance Certificate in substantially the form
of Exhibit M-2 or Exhibit M-3, IRS Form W-9, and/or other certification documents from each
beneficial owner, as applicable; provided that if the Foreign Lender is a partnership and one or
more direct or indirect partners of such Foreign Lender are claiming the portfolio interest
exemption, such Foreign Lender may provide a U.S. Tax Compliance Certificate in substantially
the form of Exhibit M-4 on behalf of each such direct and indirect partner;
(C)
any Foreign Lender shall, to the extent it is legally entitled
to do so, deliver to Borrower (in such number of copies as shall be requested by Borrower) on or
about the date on which such Foreign Lender becomes a Lender under this Agreement (and from
time to time thereafter upon the reasonable request of Borrower), executed copies of any other
form prescribed by applicable law as a basis for claiming exemption from or a reduction in U.S.
federal withholding Tax, duly completed, together with such supplementary documentation as
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CONSTRUCTION LOAN AGREEMENT
CEDAR PORT LOGISTICS CENTER
DEAL ID 21-0070
265741215
may be prescribed by applicable law to permit Borrower to determine the withholding or
deduction required to be made; and
(D)
if a payment made to a Lender under any Loan Document
would be subject to U.S. federal withholding Tax imposed by FATCA if such Lender were to fail
to comply with the applicable reporting requirements of FATCA (including those contained in
Section 1471(b) or 1472(b) of the Code, as applicable), such Lender shall deliver to Borrower at
the time or times prescribed by law and at such time or times reasonably requested by Borrower
such documentation prescribed by applicable law (including as prescribed by
Section 1471(b)(3)(C)(i) of the Code) and such additional documentation reasonably requested
by Borrower as may be necessary for Borrower to comply with their obligations under FATCA
and to determine that such Lender has complied with such Lender’s obligations under FATCA or
to determine the amount, if any, to deduct and withhold from such payment. Solely for purposes
of this clause (D), “FATCA” shall include any amendments made to FATCA after the date of
this Agreement.
(iii) Each Lender agrees that if any form or certification it previously
delivered expires or becomes obsolete or inaccurate in any respect, it shall update such form or
certification or promptly notify Borrower in writing of its legal inability to do so.
(f)
Treatment of Certain Refunds. If any party determines, in its sole
discretion exercised in good faith, that it has received a refund of any Taxes as to which it has
been indemnified pursuant to this Section 2.19 (including by the payment of additional amounts
pursuant to this Section 2.19), it shall pay to the indemnifying party an amount equal to such
refund (but only to the extent of indemnity payments made under this Section with respect to the
Taxes giving rise to such refund), net of all out-of-pocket expenses (including Taxes) of such
indemnified party and without interest (other than any interest paid by the relevant Governmental
Authority with respect to such refund). Such indemnifying party, upon the request of such
indemnified party, shall repay to such indemnified party the amount paid over pursuant to this
paragraph (f) (plus any penalties, interest or other charges imposed by the relevant Governmental
Authority) in the event that such indemnified party is required to repay such refund to such
Governmental Authority. Notwithstanding anything to the contrary in this paragraph (f), in no
event will the indemnified party be required to pay any amount to an indemnifying party
pursuant to this paragraph (f) the payment of which would place the indemnified party in a less
favorable net after-Tax position than the indemnified party would have been in if the Tax subject
to indemnification and giving rise to such refund had not been deducted, withheld or otherwise
imposed and the indemnification payments or additional amounts with respect to such Tax had
never been paid. This paragraph shall not be construed to require any indemnified party to make
available its Tax returns (or any other information relating to its Taxes that it deems confidential)
to the indemnifying party or any other Person.
(g)
Survival. Each party’s obligations under this Section 2.19 shall survive
any assignment of rights by, or the replacement of, a Lender, the termination of the commitment
of Lender to lend any undisbursed portion of the Loan, and the repayment, satisfaction or
discharge of all obligations under any Loan Document.
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CONSTRUCTION LOAN AGREEMENT
CEDAR PORT LOGISTICS CENTER
DEAL ID 21-0070
265741215
2.20
Mitigation Obligations; Replacement of Lenders.
(a)
Designation of a Different Lending Office.
If Lender requests
compensation under Section 2.18, or requires Borrower to pay any Indemnified Taxes or
additional amounts to Lender or any Governmental Authority for the account of Lender pursuant
to Section 2.19, then Lender shall (at the request of Borrower) use reasonable efforts to designate
a different lending office for funding or booking its Loans hereunder or to assign its rights and
obligations hereunder to another of its offices, branches or affiliates, if, in the good faith
judgment of Lender, such designation or assignment (i) would eliminate or reduce amounts
payable pursuant to Section 2.18 or Section 2.19, as the case may be, in the future, and (ii) would
not subject Lender to any unreimbursed cost or expense and would not otherwise be
disadvantageous to Lender. Borrower hereby agrees to pay all reasonable out-of-pocket costs
and expenses actually incurred by Lender in connection with any such designation or
assignment.
(b)
Replacement of Lenders. If Lender requests compensation under
Section 2.18, or if Borrower is required to pay any Indemnified Taxes or additional amounts to
Lender or any Governmental Authority for the account of Lender pursuant to Section 2.19 and,
in each case, Lender has declined or is unable to designate a different lending office in
accordance with paragraph (a) of this Section 2.20, then Borrower may, at its sole expense and
effort, upon notice to Lender, require Lender to assign and delegate, without recourse, all of its
interests, rights (other than its existing rights to payments pursuant to Section 2.18 or
Section 2.19) and obligations under this Agreement and the related Loan Documents to a Person
that shall assume such obligations; provided that:
(i)
Lender shall have received payment of any amount equal to the
outstanding principal of its Loans, accrued interest thereon, accrued fees and all other amounts
payable to it hereunder and under the other Loan Documents from the assignee (to the extent of
such outstanding principal and accrued interest and fees) or Borrower (in the case of all other
amounts);
(ii)
in the case of any such assignment resulting from a claim for
compensation under Section 2.18 or payments required to be made pursuant to Section 2.19,
such assignment will result in a reduction in such compensation or payments thereafter; and
(iii)
such assignment does not conflict with applicable law.
(c)
Change in Circumstances. A Lender shall not be required to make any
such assignment or delegation if, prior thereto, as a result of a waiver by such Lender or
otherwise, the circumstances entitled Borrower to require such assignment and delegation cease
to apply.
2.21 Funding Losses. Borrower shall compensate Lender, upon its written request, for
all actual losses, expenses and liabilities (including any interest paid by Lender to lenders of
funds borrowed by it to make or carry the Loan to the extent not recovered by Lender in
connection with the reemployment of such funds) which Lender may sustain if a funding under
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CONSTRUCTION LOAN AGREEMENT
CEDAR PORT LOGISTICS CENTER
DEAL ID 21-0070
265741215
this Agreement does not occur on the date specified therefor herein as a result of any failure by
Borrower to comply with any provision of this Agreement in connection with such funding.
2.22 Discretion of Lender as to Manner of Funding. Lender shall be entitled to fund
and maintain its funding under this Agreement in any manner it may elect, it being understood,
however, that for the purposes of this Agreement, all such determinations hereunder (excluding
determinations that Lender may elect to make from the Reuters screen and determinations of
Lender’s damages) shall be made as if Lender had actually funded and maintained amounts
disbursed under this Agreement during each calendar month through the purchase of deposits
having a maturity corresponding to a period of one month and bearing an interest rate equal to
the then-applicable Benchmark for such calendar month.
2.23 Appointment of Servicer and Delegation of Lender Rights. Borrower
acknowledges and agrees that, at the option of Lender, the Loan may be serviced by a
servicer/trustee (the “Servicer”) selected by Lender, and Lender may delegate all or any portion
of its responsibilities under this Agreement and the other Loan Documents to the Servicer
pursuant to a servicing agreement between Lender and Servicer, provided that such delegation
will not release Lender from any of its obligations under the Loan Documents. Until Final
Completion, Borrower shall be responsible for paying to Servicer (on each Payment Date)
Servicer’s monthly servicing fee in an amount equal to the actual fees charged by the Servicer.
Borrower shall also be responsible, but without duplication of those costs included in the
monthly servicing fee paid in accordance with the immediately foregoing sentence, for the
payment of all reasonable, market-rate out-of-pocket costs and expenses actually incurred by
Servicer in connection with the Loan (including the review and approval of or consent to Leases
and the negotiation of subordination, non-disturbance and attornment agreements, property
inspections, casualty or condemnation matters or in connection with any Event of Default). At
Lender’s direction, Borrower shall pay amounts due hereunder to any third party servicer
directly.
ARTICLE III
CONDITIONS TO DISBURSEMENT
3.1
General Conditions; Conditions to Effective Date. Borrower agrees that it
shall satisfy each of the following conditions precedent on or before the Effective Date:
(a)
Borrower Loan Documents. Borrower (and any other party thereto) shall
have executed, acknowledged (if appropriate) and delivered to Lender each of the Loan
Documents set forth on Exhibit B, each in form and substance acceptable to Lender, together
with each of the other Loan Documents and all other documents to be executed and/or delivered
by or on behalf of Borrower pursuant to this Agreement or as Lender shall otherwise reasonably
require.
(b)
Guaranty Loan Documents. Borrower and Guarantor, as applicable, shall
have executed and delivered to Lender each of the Other Documents set forth on Exhibit B, each
in form and substance acceptable to Lender, together with all other documents to be executed
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CONSTRUCTION LOAN AGREEMENT
CEDAR PORT LOGISTICS CENTER
DEAL ID 21-0070
265741215
and/or delivered by or on behalf of Guarantor pursuant to this Agreement or as Lender shall
otherwise reasonably require.
(c)
Property Documents. Lender shall have received each of the following
additional documents with respect to the Property, in form and substance acceptable to Lender:
(i)
Appraisal. An Appraisal of the Property, showing an “as-is”
aggregate value for the Property of not less than Ten Million Three Hundred Thousand and
No/100 Dollars ($10,300,000.00), and an “as-stabilized” aggregate value for the Property of not
less than Sixty-Six Million Five Hundred Thousand and No/100 Dollars ($66,500,000.00), and
otherwise acceptable to Lender in its sole discretion.
(ii)
Title Policy. Lender shall have received the Title Policy, together
with any endorsements, reinsurance and co-insurance agreements which Lender may require,
insuring Lender in the maximum amount of the Loan, that the Security Instrument constitutes a
valid first priority Lien upon the Property, subject only to the Permitted Encumbrances, with
such endorsements and otherwise in such form and substance as shall be acceptable to Lender.
Such Title Policy shall at all times expressly insure against all mechanics’ liens.
(iii) Property Reports. Such environmental assessments, studies,
reports and investigations on the Property, and/or the soils or groundwaters thereof, prepared by
environmental consultants satisfactory to Lender and in form and substance acceptable to Lender
and Lender’s counsel in the sole discretion of such Persons.
(iv)
Survey. A current ALTA survey of the Property certified in favor
of Lender and otherwise in a form acceptable to Lender and Lender’s counsel in the sole
discretion of such Persons.
(v)
Intentionally Deleted.
(vi)
Other Required Documents. Such other documents with respect to
the Property as are required pursuant to this Agreement or as Lender shall otherwise require.
(d)
Organizational Documents. Lender shall have received such corporate,
partnership and limited liability company documents with respect to Borrower and its constituent
entities and Guarantor as Lender shall require, including evidence of authorization and
incumbency of all Persons executing the Loan Documents and Guaranty Documents on behalf of
Borrower and Guarantor, as applicable.
(e)
Performance. Borrower shall have performed, in all material respects, all
agreements and covenants to be performed by Borrower under this Agreement or the other Loan
Documents on or before the Effective Date.
(f)
No Material Adverse Effect.
No Material Adverse Effect shall have
occurred.
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CONSTRUCTION LOAN AGREEMENT
CEDAR PORT LOGISTICS CENTER
DEAL ID 21-0070
265741215
(g)
Litigation, Other Proceedings. There shall not have been instituted or
threatened any litigation or proceeding in any court or by or before any Governmental Authority
affecting or threatening to affect Borrower, Guarantor, the Property, or any other Collateral, as
determined by Lender in its sole discretion, which has a Material Adverse Effect.
(h)
Perfection of Liens. The Security Instrument, the Financing Statement
and any other recordable Loan Documents shall have been recorded or filed, as applicable, and
Lender shall have a valid, perfected first priority Lien on Borrower’s interest in the Property and
on all of the Collateral subject to the Loan Documents, subject to the Permitted Encumbrances.
(i)
No Default. On the Effective Date, no Event of Default or Potential
Default shall exist (including, without limitation, no Lien shall exist against the Property (or any
portion thereof) in violation of Section 4.2 below).
(j)
Loan Fees. On the Effective Date, Lender shall have received the Loan
Fee and any other fees or other amounts then due to Lender under this Agreement and the other
Loan Documents, and all expenses of Lender incurred prior to the Effective Date (including,
without limitation, all attorneys’ and appraisers’ fees, environmental review costs, cost
engineering expenses, title insurance premiums and endorsement charges), shall have been paid
by Borrower.
(k)
Consents and Approvals. Any Government Approvals, licenses, permits,
consents and approvals of Governmental Authorities, and all corporate, partnership and limited
liability company action necessary to enable Borrower to enter into the financing transactions
contemplated by this Agreement shall have been obtained and/or taken by Borrower (including,
without limitation, any required consents of any Members).
(l)
Insurance. Lender shall have received evidence that Borrower has
obtained all insurance policies and associated coverage amounts required under Article V of this
Agreement, in each case satisfactory to Lender and issued by insurance companies acceptable to
Lender, and loss payable endorsements in form and substance satisfactory to Lender naming
Lender as loss payee (as its interests may appear) shall have been delivered to Lender, together
with such certificates of insurance and binders as Lender shall require.
(m)
Representations and Warranties. All representations and warranties of
Borrower contained in this Agreement or the other Loan Documents shall be true and correct.
(n)
Opinions of Counsel. Lender shall have received opinions of counsel for
Borrower dated as of the Effective Date as to such matters as Lender shall require, in form and
substance satisfactory to Lender.
(o)
Due Diligence. Lender shall have completed its review of the Property
and the other Collateral, including, without limitation, any contracts and agreements relating to
the Property, and Lender shall have completed such other real estate and legal due diligence
investigations as Lender deems necessary, and such review and investigations shall provide
Lender with resulting information which, in Lender’s sole discretion, is satisfactory to permit
Lender to enter into this Agreement and to make the Loan.
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CONSTRUCTION LOAN AGREEMENT
CEDAR PORT LOGISTICS CENTER
DEAL ID 21-0070
265741215
(p)
Budgets. Lender shall have reviewed and approved any and all
improvement and operating budgets for the Property (including, without limitation, the
construction budgets for the Construction Work), and Borrower’s proposed sources and uses of
funds for the Loan proceeds and Borrower Equity.
(q)
Financial Statements.
Lender shall have received such financial
statements and other financial information on Borrower and Guarantor as Lender shall require,
and such financial statements and other financial information shall be in form and substance
acceptable to Lender.
(r)
Borrower Minimum Equity. Borrower shall have caused the entire
Borrower Minimum Equity to be invested in the Property on or prior to the Effective Date, and
shall have delivered to Lender a certificate of an authorized officer of Borrower evidencing the
same and accompanied by backup materials as reasonably required by Lender.
(s)
Interest Rate Protection Agreement. If required under Section 8.20,
Borrower shall have purchased and maintained in effect an Interest Rate Protection Agreement
acceptable to Lender in its sole and absolute discretion, which Interest Rate Protection
Agreement shall have been assigned to Lender in writing pursuant to an Assignment of Interest
Rate Protection Agreement, which shall name Lender as payee thereunder and otherwise be in a
form acceptable to Lender.
(t)
Affiliate Fees and Agreements. Borrower shall have disclosed to Lender,
and Lender shall have approved, all Affiliate Fees and all Affiliate Agreements. All Affiliate
Fees shall be deducted from the calculation of the capitalization costs of the financing transaction
contemplated by this Agreement for determining the maximum principal amount of the Loan and
the required Borrower Equity contribution. All Affiliate Agreements and all Affiliate Fees shall
at all times be subordinate to the Loan and shall be terminable by Lender during the existence of
an Event of Default.
(u)
Intentionally Omitted.
(v)
Construction Related Documents.
(i)
Construction Schedule. Lender shall have reviewed and approved
the Construction Schedule.
(ii)
Plans and Specifications. Lender shall have reviewed and
approved the Plans and Specifications, together with any required Governmental
Approvals related thereto and sealed by the Design-Builder’s Architect and consultants or
other applicable Design Professionals (to the extent any tenant has any rights of consent
or approval with respect to any Plans and Specifications, Borrower shall obtain all such
consents and approvals prior to submitting such Plans and Specifications to Lender and
shall deliver to Lender, together with the Plans and Specifications, a certification that all
such consents and approvals have been obtained).
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CONSTRUCTION LOAN AGREEMENT
CEDAR PORT LOGISTICS CENTER
DEAL ID 21-0070
265741215
(iii) Plan and Cost Review. Lender shall have reviewed and approved
its construction consultant’s plan and cost review. Lender shall have received evidence
of Design-Builder’s buyout of subcontracts representing eighty percent (80%) of the cost
to construct the Construction Work set forth in the Approved Construction Budget.
(iv)
Third-Party Certificates.
Lender shall have received:
(A) certificates of the Design-Builder’s Architect and consultants and Borrower’s
applicable Design Professionals (such certificates to be limited to the portion of the
Construction Work for which the respective Design Professional was responsible) in
favor of Lender in form satisfactory to Lender, and (B) a certificate of the Design-Builder
in favor of Lender certifying that the Construction Schedule and the Approved Budget
are realistic and can be adhered to in completing the Improvements in accordance with
the Contract Documents.
(v)
Major Contracts. Lender shall have received a schedule of the
identity of the Major Contractors to Lender’s satisfaction and copies of the executed
Major Contracts (and all modifications thereto with respect thereto), together with a
certificate of an authorized officer of Borrower certifying that (A) copies of the Major
Contracts attached to such certificate are in full force and effect without any default by
any party thereto, and (B) copies of the Major Contracts attached to such certificate are
true, correct and complete in all respects.
(vi)
Lien Waivers. Lender shall have received sworn partial waivers of
liens covering all work and materials performed or supplied prior to the date hereof from
(A) Contractors, and (B) materialmen, suppliers and other vendors.
(vii) Design-Build Contract. Lender shall have received and approved
the Design-Build Contract, executed by Borrower and Design-Builder.
(w)
Plastic Express Lease. Lender shall have received and approved: (i) the
Plastic Express Lease, executed by Borrower and Plastic Express, and (ii) a Subordination, NonDisturbance and Attornment Agreement executed by Plastic Express in connection with the
Plastic Express Lease.
(x)
Sale Agreement. Lender shall have received and approved the Sale
Agreement executed by Borrower and Buyer.
(y)
Other Documents. Lender shall have received and approved such other
documents, materials or information as Lender or its counsel shall require.
3.2
Disbursements after the Effective Date.
(a)
Future Funding Allocation. The amount of Forty Six Million Four
Hundred Thousand and No/100 Dollars ($46,000,000.00) (the “Future Funding Allocation”)
shall not be released to Borrower upon the Effective Date. The Future Funding Allocation is
divided into: four (4) categories, as follows: (i) Interest Holdback; (ii) Construction Holdback
(Hard Costs); (iii) Soft Costs Holdback; and (iv) Carry Cost Holdback. The “Approved Uses”
44
CONSTRUCTION LOAN AGREEMENT
CEDAR PORT LOGISTICS CENTER
DEAL ID 21-0070
265741215
shall include: Debt Service, Approved Hard Costs, Approved Soft Costs and Approved Carry
Costs. The Future Funding Allocation shall, subject to the satisfaction of all conditions precedent
as provided in this Section 3.2, be disbursed to Borrower only to pay Approved Uses.
Disbursements from the Future Funding Allocation shall be disbursed no more than once per
calendar month, unless otherwise approved by Lender in its reasonable discretion.
(b)
Additional Matters. As of the date of any disbursement of any portion of
the Future Funding Allocation, each of the following conditions must be satisfied as a condition
to Lender’s obligation to disburse any portion of the Future Funding Allocation:
(i)
Representations and Warranties. All of the representations and
warranties of Borrower contained in this Agreement and in any other Loan Document shall be
true, correct and complete in all material respects as though made on and as of such date.
(ii)
No Default. No Event of Default or Potential Default shall have
occurred and be continuing or would result from the making of such disbursement.
(iii) Application of Loan Disbursements, Disbursements from Reserve
Accounts, and Borrower Equity. Borrower shall have applied all prior disbursements of Loan
proceeds, proceeds disbursed to Borrower from any Reserve Account, and all Borrower Equity
in accordance with the Loan Documents and shall provide evidence reasonably satisfactory to
Lender evidencing such application.
(iv)
No Material Adverse Effect. No Material Adverse Effect shall
have occurred.
(v)
In-Balance. The sum of all undisbursed Loan funds plus all
Borrower Equity shall be at all times equal to or greater than the amount that Lender from time
to time determines necessary, in Lender’s reasonable discretion, to: (A) pay, through Final
Completion, all costs of development, construction, marketing and sale or leasing of the Property
and Improvements in accordance with the Loan Documents; (B) pay, through Final Completion,
all sums which may accrue under the Loan Documents; and (C) enable Borrower to perform and
satisfy, through Final Completion, all of the covenants of Borrower contained in the Loan
Documents (the satisfaction of each of the foregoing conditions being collectively referred to
herein as “In-Balance”). If Lender determines at any time, after taking into consideration any
reallocation of Cost Savings expressly permitted pursuant to Section 4.12 of this Agreement, that
the sum of undisbursed Loan funds plus Borrower Equity are insufficient for the purposes
described in the immediately preceding sentence (“Out-of-Balance”), then Borrower shall,
within ten (10) Business Days following Lender’s written demand therefor, deliver the amount of
such deficiency to Lender to be held in the Balancing Account.
(vi)
Leasing. The Plastic Express Lease shall be in full force and effect
with no defaults existing thereunder, and Plastic Express shall not have provided notice of
termination under the Lease.
(vii) Sale Agreement. The earlier of the following to occur: (i) the
expiration of the Study Period under the Sale Agreement with no termination of the Sale
45
CONSTRUCTION LOAN AGREEMENT
CEDAR PORT LOGISTICS CENTER
DEAL ID 21-0070
265741215
Agreement, and (ii) Buyer’s waiver of its right to terminate the Sale Agreement prior to the
Approval Date under the Sale Agreement.
(viii) Borrower Additional Equity. Borrower shall have caused the
entire Borrower Additional Equity to be invested in the Property and shall have delivered to
Lender a certificate of an authorized officer of Borrower evidencing the same and accompanied
by backup materials as reasonably required by Lender.
(c)
Request for Disbursement. Each request for disbursement shall be in the
form attached hereto as Exhibit E and shall, among other things: (i) specify Borrower’s desired
funding date (which shall be a Business Day) for the disbursement of Loan proceeds; (ii) specify
the amount of the proposed disbursement (with allocation to each Holdback); (iii) specify the
proposed use of such disbursement of Loan proceeds; (iv) contain a written certification by
Borrower that each of the conditions to Lender’s obligation to fund the Loan as set forth herein
have been satisfied; and (v) contain a written certification by Borrower that each and every
representation and warranty made by Borrower hereunder and under the other Loan Documents
is deemed remade (and accordingly, remains true, correct and complete) as of the date the
applicable request for disbursement is so delivered to Lender. Each such request for
disbursement shall also be accompanied by such additional documents and information relating
to the proposed disbursement as Lender shall reasonably require.
3.3
Conditions to Disbursements From Construction Holdback (Hard Costs). In
addition to the conditions set forth in Section 3.2(b), each of the following must be satisfied (or
waived by Lender in its sole discretion) as a condition to Lender’s obligation to make any
disbursement from the Construction Holdback (Hard Costs).
(a)
Disbursement Request. Lender shall have received a written request for
disbursement submitted in accordance with Section 3.2(c) of this Agreement.
(b)
Approved Hard Costs. The requested disbursement must be for Approved
Hard Costs, as verified by Lender.
(c)
Borrower Certification. Lender shall have received a true and accurate
certification from Borrower stating as follows:
(i)
That the Construction Work to be funded by the requested
disbursement, to the extent the same have been completed, have been completed without
defects in a good and workmanlike manner and in accordance with all applicable Legal
Requirements, Contract Documents and the Plans and Specifications.;
(ii)
Identifying each Person engaged to supply materials or labor in
connection with the Construction Work to be funded by the requested disbursement,
which identification may be provided by submission of contractors’ invoices so long as
such invoice identifies all Persons entitled to payment by or on behalf of Borrower for
such materials and/or labor;
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CONSTRUCTION LOAN AGREEMENT
CEDAR PORT LOGISTICS CENTER
DEAL ID 21-0070
265741215
(iii) That each such Person has been paid in full or will be paid in full
for the improvements, materials or services, to be funded by the requested disbursement
upon or promptly after such disbursement; and
(iv)
That the costs incurred are consistent with the Approved
Construction Budget.
(d)
Plans and Specifications.
updated Plans and Specifications.
Lender shall have received and approved
(e)
Execution of Contracts. Borrower shall deliver evidence satisfactory to
Lender (A) that the Contracts for the Construction Work have been executed on terms
satisfactory to Lender and its construction consultant and based on construction drawings for the
Construction Work, and (B) that Contracts for the following major trades have been executed on
terms satisfactory to Lender and its construction consultant.
(f)
Contracts. As to any disbursement requesting funds to pay a third party,
(i) Borrower or Design-Builder shall have entered into a Contract governing such payment, (ii) if
such Contract is a Major Contract, Lender shall have approved such Major Contract and (iii) if
such Contract is not a Major Contract, Lender shall have, if requested by Lender, received a copy
of such Contract and shall have confirmed that it in reasonable, arms-length form. If any
payment is to be made to a Design Professional, then Lender shall have received a copy of the
contract with the Design Professional and shall have received, if required by Lender, a consent
and attornment agreement in form and substance acceptable to Lender.
(g)
Intentionally Deleted.
(h)
Title Policy Endorsements.
(i)
The Lien of the Security Instrument shall continue to be insured by
the Title Policy as a senior priority Lien against the Property.
(ii)
Lender shall have received title insurance endorsements to the
Title Policy in form and substance acceptable to Lender, necessary for insuring the
Security Instrument and each and every disbursement of Loan proceeds made on and/or
prior to the date of such endorsement as a first priority lien subject only to the Permitted
Encumbrances (“Required Title Endorsements”). Without limiting the generality of
the foregoing, to the extent available in the jurisdiction in which the Property is located,
such endorsements shall: (1) insure Lender against unfiled mechanic’s liens and/or stop
notice claims; (2) increase the coverage under the Title Policy to the full principal amount
then advanced under the Loan; (3) insure that, since the date of the Title Policy or the
most recent endorsement thereto, there has been no change in the status of title to the
Property (except for Permitted Encumbrances); and (4) change the effective date of the
Title Policy to the date of the Disbursement being made by Lender (or such other recent
date as may be approved by Lender).
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CONSTRUCTION LOAN AGREEMENT
CEDAR PORT LOGISTICS CENTER
DEAL ID 21-0070
265741215
(i)
Invoices. In connection with any Construction Work, Lender shall have
received an application for payment from the Design-Builder in the form of AIA G702 (with
G703 attached) (or substantial equivalent) in detail reasonably acceptable to Lender, together
with copies of bills and invoices for the total amount expended, incurred or due for any requested
disbursement items. In addition, as to any disbursement to fund payment to a Major Contractor,
Lender may require an AIA G702 and G703 (or substantial equivalent) from such Major
Contractor.
(j)
Lien Waivers. Lender shall have received lien waivers from each Person
to be paid with the requested disbursement, which lien waivers may be conditioned only on
payment from the requested disbursement. Lender acknowledges Borrower’s contest rights
described in Section 4.2 and that lien waivers shall not be required with respect to any claims
being contested in accordance with Section 4.2; provided, however, Borrower acknowledges that
Lender shall not be obligated to disburse funds with respect to any such contested claims until
Lender has received liens waivers with respect to the same.
(k)
Inspection. Lender shall have received a report from its Construction
Consultant verifying the progress of the construction and conformance of the Construction Work
with the Contract Documents, in form and substance reasonably acceptable to Lender. If
required by Lender, Borrower shall have furnished to Lender evidence that all required
inspections by Governmental Authorities have been satisfactorily completed.
(l)
Budget Reconciliation. Lender shall have received a statement detailing
the costs incurred in connection with the subject work and materials through the date of the
disbursement request compared to the Approved Construction Budget. Lender and Borrower
may agree that, as to hard costs, a sufficiently detailed AIA G703 (or substantial equivalent) will
satisfy this requirement.
(m)
Offsite Materials. If any request for disbursement includes the cost of
materials stored at a location other than the Property (“Offsite Materials”), then such request for
disbursement shall include each of the following: (i) evidence that the Offsite Materials have
been purchased by Borrower, have been segregated from other materials in the facility and have
been appropriately marked to indicate Borrower’s ownership thereof and Lender’s security
interest therein; (ii) evidence that the Offsite Materials are insured as required by Lender under
insurance also naming Lender as additional insured; and (iii) at Lender’s request, a security
agreement, financing statement and/or subordination agreement in form and substance
reasonably satisfactory to Lender executed by the supplier of the Offsite Materials, and/or such
other persons as Lender determines may have an interest in or claim to the Offsite Materials,
together with such other additional documentation and evidence as Lender may reasonably
require to assure itself that it has a perfected first priority lien on the Offsite Materials.
(n)
Onsite Materials. If any request for disbursement includes the cost of
materials stored on the Property (“Onsite Materials”), then such request for disbursement shall
include each of the following: (i) evidence that the Onsite Materials have been purchased by
Borrower; (ii) evidence that the Onsite Materials are insured as required by Lender under
insurance also naming Lender as additional insured; and (iii) evidence that the Onsite Materials
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CONSTRUCTION LOAN AGREEMENT
CEDAR PORT LOGISTICS CENTER
DEAL ID 21-0070
265741215
are stored in an area on the Property for which adequate security is provided against theft,
vandalism, and the elements/weather.
(o)
Deposits. With respect to any disbursement to be made for an advance
deposit for materials, machinery, and/or fixtures, (i) the deposit must not represent more than
twenty percent (20%) of the total contract cost of the subject materials, machinery and/or
fixtures, (ii) the deposit is paid to a Person who is based in the United States, (iii) the total
amount of outstanding deposits does not exceed Two Million and No/100 Dollars
($2,000,000.00) at any time, and (iv) Borrower shall have delivered to Lender a copy of the
applicable contract pursuant to which such deposit is to be delivered, and Lender shall have
approved such deposit.
(p)
Other Information. Lender shall have received any other document,
material or information as Lender shall reasonably request.
(q)
Final Disbursement For Hard Costs. Lender’s obligation to disburse the
final advance from the Construction Holdback (Hard Costs) shall be subject to receipt by Lender
of the following:
(i)
Evidence satisfactory to Lender that final completion of the
Planned Improvements has been achieved (including completion of any and all Punchlist Items).
(ii)
Lender shall have received a certificate of substantial completion
from the Design-Builder and its Architect in the form of AIA G704 (or substantial equivalent)
indicating no remaining Punchlist Items.
(iii) To the extent in the possession of Borrower or Design-Builder,
copies of all operating manuals, warranties and other material documentation relating to the
Property, the Improvements and any fixtures, furniture and equipment used in accordance
therewith.
(iv)
Final lien waivers from all Contractors who supplied materials or
worked on the Planned Improvements.
(v)
Final as of record plans for the Planned Improvements certified by
the Design-Builder and its Architect.
3.4
Conditions to Disbursements From Soft Costs Holdback. In addition to the
conditions set forth in Section 3.2(b), each of the following must be satisfied (or waived by
Lender in its sole discretion) as a condition to Lender’s obligation to make any disbursement
from the Soft Costs Holdback.
(a)
Disbursement Request. Lender shall have received a written request for
disbursement submitted in accordance with Section 3.2(c) of this Agreement.
(b)
Approved Soft Costs. The requested disbursement must be for Approved
Soft Costs, as verified by Lender.
49
CONSTRUCTION LOAN AGREEMENT
CEDAR PORT LOGISTICS CENTER
DEAL ID 21-0070
265741215
(c)
Borrower Certification. Lender shall have received a true and accurate
certification from Borrower stating as follows:
(i)
Identifying each Person to be paid from the requested
disbursement, which identification may be provided by submission of invoices so long as
such invoice identifies all Persons entitled to payment by or on behalf of Borrower for
such materials and/or labor.
(ii)
That each such Person has been paid in full or will be paid in full
for the materials or services, to be funded by the requested disbursement upon or
promptly after such disbursement.
(iii) That the costs incurred are consistent with the Approved
Construction Budget.
(d)
Lien Waivers. Lender shall have received lien waivers from each Person
to be paid with the requested disbursement (but only if such Person has a right to lien the
Property if not paid), which lien waivers may be conditioned only on payment from the
requested disbursement.
Lender acknowledges Borrower’s contest rights described in
Section 4.2 and that lien waivers shall not be required with respect to any claims being contested
in accordance with Section 4.2; provided, however, Borrower acknowledges that Lender shall
not be obligated to disburse funds with respect to any such contested claims until Lender has
received liens waivers with respect to the same.
(e)
Required Title Endorsements. Lender shall have received Required Title
Endorsements with respect to the requested disbursement.
(f)
Invoices. Lender shall have received invoices evidencing the sums to be
paid with the proceeds of the requested disbursement.
(g)
Design Professionals. If any payment is to be made to a Design
Professional, then Lender shall have received a copy of the contract with the Design Professional
and shall have received, if required by Lender, a consent and attornment agreement in form and
substance acceptable to Lender.
(h)
Other Information. Lender shall have received any other document,
material or information as Lender shall reasonably request.
3.5
Intentionally Deleted.
3.6
Intentionally Deleted.
3.7
Conditions to Disbursements From the Carry Cost Holdback. Disbursements
from the Carry Cost Holdback will be tied to the Approved Budget. The Approved Budget will
include an amount of working capital to be maintained each month so that variances from
budgeted amounts may be addressed. In addition to the conditions set forth in Section 3.2(b),
50
CONSTRUCTION LOAN AGREEMENT
CEDAR PORT LOGISTICS CENTER
DEAL ID 21-0070
265741215
each of the following must be satisfied (or waived by Lender in its sole discretion) as a condition
to Lender’s obligation to make any disbursement from the Carry Cost Holdback.
(a)
Request for Disbursement. Lender shall have received a written request
for disbursement submitted in accordance with Section 3.2(c) of this Agreement.
(b)
Approved Carry Costs.
Approved Carry Costs, as verified by Lender.
The requested disbursement must be for
(c)
Budgeted Amount. The amount to be disbursed by Lender must be the
anticipated Carry Cost shortfall for such month in the Approved Annual Budget; however, such
amount may be increased (in the case that the actual shortfall over prior periods is higher) or
decreased (in the case that the actual shortfall over prior periods is lower) in the good faith
discretion of Lender based on the monthly operating statements delivered to Lender pursuant to
Section 7.1(b) of this Agreement. For example, and not by way of limitation, if the budgeted
shortfall in Carry Costs for January is $100 and the actual shortfall in January was $90, then
Lender would, at its option, subsequently reduce the advance from the Carry Cost Holdback in a
later month by $10 (to account for the over-distribution in January).
3.8
Conditions to Disbursements From the Interest Holdback. Disbursements
from the Interest Holdback will be tied to the Approved Budget. The Approved Budget will
include an amount of working capital to be maintained each month so that variances from
budgeted amounts may be addressed. In addition to the conditions set forth in Section 3.2(b) of
this Agreement, each of the following must be satisfied (or waived by Lender in its sole
discretion) as a condition to Lender’s obligation to make any disbursement from the Interest
Holdback.
(a)
Request for Disbursement. If Borrower has not requested a disbursement
from the Carry Cost Holdback, Lender shall have received a written request for disbursement
submitted in accordance with Section 3.2(c) of this Agreement. If Borrower has submitted a
request for disbursement from the Carry Cost Holdback, then such disbursement request must
show any anticipated Debt Service shortfall.
(b)
Amount. The amount to be disbursed by Lender will be the anticipated
Debt Service shortfall in Borrower’s disbursement request; however, such amount may be
increased (in the case that the actual shortfall over prior periods is higher) or decreased (in the
case that the actual shortfall over prior periods is lower) in the good faith discretion of Lender
based on the monthly operating statements delivered to Lender pursuant to Section 7.1(b) of this
Agreement. For example, and not by way of limitation, if the budgeted shortfall in Debt Service
for January is $100 and the actual shortfall in January was $90, then Lender would, at its option,
subsequently reduce the advance from the Interest Holdback in a later month by $10 (to account
for the over-distribution in January). In addition, provided that sufficient funds therefor remain
in the Interest Holdback, Lender may, and is authorized by Borrower, to disburse to itself each
month from the Interest Holdback the amount necessary to pay such accrued and unpaid interest
on the Loan, regardless of receipt of any disbursement request.
51
CONSTRUCTION LOAN AGREEMENT
CEDAR PORT LOGISTICS CENTER
DEAL ID 21-0070
265741215
3.9
Override. Notwithstanding anything in this Agreement to the contrary, at no
time shall Lender be obligated to:
(a)
Bona Fide Costs. Advance to Borrower more than what Borrower has
previously funded for budget line items from its own monies or is then required to fund to the
party seeking payment or, in the case of reimbursement, to the party seeking reimbursement
(subject to any required retainage, if applicable).
(b)
Budget. As to the Construction Holdback (Hard Costs) or Soft Costs
Holdback, advance proceeds of the Loan in an amount in excess of the budget line items set forth
in the Approved Construction Budget, as the same may be adjusted in accordance with the terms
of this Agreement.
(c)
Retainage. Except as otherwise set forth in this Agreement, advance any
portion of any required retainage before such retainage is due and payable and, in any event,
assuming compliance by Borrower with the retainage requirements in this Agreement.
(d)
Change Order. Make an advance in connection with any Change Order
for which Lender’s approval is required under this Agreement and which has not been approved
by Lender.
(e)
Unsatisfactory Work. If any Unsatisfactory Work exists, then Lender
shall have verified that Borrower is working to cure such Unsatisfactory Work and that the
continuation of work will not make cure of such Unsatisfactory Work more costly or difficult.
Furthermore, Lender may withhold from any disbursement sums owed to any contractor who is
responsible for cure of such Unsatisfactory Work.
3.10 Costs and Fees – Construction Related. Borrower shall pay on demand (or out
of the requested disbursement) all of the reasonable out-of-pocket costs and expenses actually
incurred by Lender, including reasonable attorneys’ fees and expenses, title charges, and costs
and expenses of its construction consultant(s) in connection with the proposed disbursement.
Further, each such request for disbursement from any Holdback (other than the Interest
Holdback) shall be accompanied by an administrative fee payable to Lender in the amount of
One Thousand Two Hundred Fifty and No/100 Dollars ($1,250.00) per draw, which
administrative fee may be deducted by Lender from the applicable Holdback concurrently with
the funding of such disbursement. Borrower hereby authorizes Lender to disburse the proceeds
of the Loan to pay (i) the fees and expenses of Lender’s construction consultant, the
administrative fee, the fees of Lender’s counsel and the fees of the Title Company; (ii) any
expenses payable in accordance with Section 13.9; and (iii) any endorsements to the Title Policy
required by Lender, notwithstanding that Borrower may not have requested a disbursement of
such amounts. Any disbursement made by Lender pursuant to the authorization in this Section
shall constitute disbursed proceeds of the Loan.
3.11 Authorization to Make Loan Advances to Cure Borrower’s Defaults. If an
Event of Default or Potential Default shall exist, Lender may (but shall not be required to)
perform any of such covenants and agreements with respect to which Borrower is in default.
52
CONSTRUCTION LOAN AGREEMENT
CEDAR PORT LOGISTICS CENTER
DEAL ID 21-0070
265741215
Any amounts expended by Lender in so doing and any amounts expended by Lender in
connection therewith shall be added to the principal balance of the Note. The authorization
hereby granted is irrevocable, and no further direction or authorization from Borrower is
necessary for Lender to make such disbursements.
3.12 No Waiver or Approval by Reason of Loan Advances. The making of any
Loan advance by Lender shall not be deemed an acceptance or approval by Lender (for the
benefit of Borrower or any third party) of the Construction Work or other work theretofore done
or constructed or to Lender’s obligations to make further disbursements of the Loan, nor, if
Borrower is unable to satisfy any condition, shall any such failure to insist upon strict
compliance have the effect of precluding Lender from thereafter declaring such inability to be an
Event of Default as herein provided. Lender’s waiver of, or failure to enforce, any conditions to
or requirements associated with any Loan advance in any one or more circumstances shall not
constitute or imply a waiver of such conditions or requirements in any other circumstances.
3.13
Guaranty.
Lender’s Right to Make Loan Advances in Compliance with the Completion
(a)
Borrower hereby authorizes Lender to disburse Loan proceeds as
contemplated by the Completion Guaranty (whether the applicable work is being performed by
the Guarantor or Lender), and any such disbursement shall constitute an advance of the Loan and
be added to the principal balance of the Note. The authorization hereby granted is irrevocable,
and no prior notice to or further direction or authorization from Borrower is necessary for Lender
to make such disbursements.
(b)
WHETHER OR NOT LENDER ELECTS TO EMPLOY ANY OR ALL
OF THE REMEDIES AVAILABLE UPON THE OCCURRENCE OF AN EVENT OF
DEFAULT, LENDER SHALL NOT BE LIABLE FOR THE CONSTRUCTION OF OR
FAILURE TO CONSTRUCT, COMPLETE OR PROTECT THE IMPROVEMENTS OR FOR
PAYMENT OF ANY EXPENSES INCURRED IN CONNECTION WITH THE EXERCISE OF
ANY REMEDY AVAILABLE TO LENDER OR FOR THE PERFORMANCE OR NONPERFORMANCE OF ANY OTHER OBLIGATION OF BORROWER.
3.14 No Third-Party Benefit. This Agreement is solely for the benefit of Lender and
Borrower. All conditions of the obligations of Lender to make advances hereunder are imposed
solely and exclusively for the benefit of Lender and may be freely waived or modified in whole
or in part by Lender at any time if in Lender’s sole discretion it deems it advisable to do so, and
no Person other than Borrower (provided that all conditions have been satisfied) shall have
standing to require Lender to make any Loan advances or shall be a beneficiary of this
Agreement or any advances to be made hereunder.
3.15 Direct Disbursement. Lender may, at its option, advance all or any part of the
Loan as follows: (1) to Borrower for disbursement in accordance with the applicable request for
disbursement, (2) directly to a Contractor or other party any costs payable to such party, (3) at
the Borrower’s expense, to the Title Company which shall pay said monies to the parties as so
instructed by Lender and/or (4) as contemplated by the Completion Guaranty (whether the
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CEDAR PORT LOGISTICS CENTER
DEAL ID 21-0070
265741215
applicable work is being performed by the Guarantor or Lender); provided, however, unless a
Potential Default or Event of Default exists or Borrower requests otherwise, Lender will make
advances pursuant to clause (1) above. The execution of this Agreement by Borrower shall, and
hereby does, constitute an irrevocable authorization to Lender to make such direct advances
provided for in clauses (2) through (4) above and no further authorization from Borrower shall
be necessary to warrant such direct advances, and all such direct advances shall be secured by
the Security Instrument as fully as if made directly to Borrower, regardless of the disposition
thereof by any party so paid. At Lender’s request, any advance of Loan proceeds made by and
through the Title Company may be made pursuant to the provisions of a construction escrow
agreement in the form then in use by such company with such modifications thereto as are
reasonably required by Lender. Borrower agrees to join as a party to such escrow agreement and
to comply with the requirements set forth therein (which shall be in addition to and not in
substitution for the requirements contained in this Agreement) and to pay the fees and expenses
of the Title Company charged in connection with the performance of its duties under such
construction escrow agreement.
3.16 Loan Disbursements. All disbursements of the Loan made to Borrower shall be
held by Borrower in trust and applied by Borrower solely for the purpose for which the funds
have been disbursed. Lender has no obligation to monitor or determine Borrower’s use or
application of the disbursements.
3.17 One Disbursement Per Month. Lender shall have no obligation to make
Disbursements more often than once in each calendar month, except that Lender, in its sole
discretion, shall have the right but not the obligation, to make Disbursements during any month
for interest, fees, expenses, or any other amounts due under the Loan Documents. In addition,
Lender may at any time, in Lender’s sole discretion and without request therefore from
Borrower, make Disbursements to pay amounts that are due to Lender under the Loan
Documents.
ARTICLE IV
CONSTRUCTION
4.1
Construction Responsibilities.
(a)
General.
Borrower shall cause the Construction of the Planned
Improvements to be performed and completed in accordance with the Contract Documents, the
Approved Construction Budget and in compliance with all applicable Legal Requirements and
the terms and conditions of the Loan Documents, the Plastic Express Lease (including but not
limited to Addendum 4 attached thereto), and the Sale Agreement (including but not limited to
Exhibit K attached thereto), and free and clear of all liens, encumbrances and security
instruments (other than the Permitted Encumbrances). Borrower shall timely pay all costs
incurred in connection with the Construction of the Planned Improvements, subject to
Borrower’s contest rights described in Section 4.2 below.
(b)
Delay. Borrower shall promptly notify Lender in writing of any event
causing delay or interruption of Construction, or the timely completion of the construction of the
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DEAL ID 21-0070
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Planned Improvements and any other improvements to the Real Property commenced by
Borrower. The notice shall specify the particular work delayed, and the cause and period of each
delay.
(c)
Proceedings to Enjoin. If any proceedings are filed seeking to enjoin or
otherwise prevent or declare invalid or unlawful all or any part of the Construction Work, then
Borrower, at its sole cost and expense, will cause such proceedings to be vigorously contested in
good faith, and upon the occurrence of an adverse ruling or decision, prosecute all allowable
appeals therefrom, and will, without limiting the generality of the foregoing, resist the entry or
seek the stay of any temporary or permanent injunction that may be entered, and use its best
efforts to bring about a favorable and speedy disposition of all such proceedings.
(d)
No Obligation for Lender to Supervise. Borrower shall be solely
responsible for all aspects of Borrower’s business and conduct in connection with the Property
and improvements to the Real Property, including, without limitation, for the quality and
suitability of the Plans and Specifications, and their compliance with all Legal Requirements, the
supervision of the work of construction, the qualifications, financial condition and performance
of all architects, engineers, contractors, material suppliers, consultants and property managers,
and the accuracy of all applications for payment and the proper application of all disbursements.
Lender is not obligated to supervise, inspect or inform Borrower or any third party of any aspect
of the construction of the Construction Work, any other improvements to the Real Property, or
any other matter.
(e)
Milestones. Subject to Force Majeure Events, Borrower shall achieve,
complete, and perform each Milestone by the applicable Milestone Date.
(f)
Substantial Completion. By the Substantial Completion Outside Date
(subject to Force Majeure Events), Borrower shall cause each of the following to occur:
(i)
Borrower shall deliver to Lender all information, reports,
Government Approvals, documents and other items required to be delivered to Borrower by the
Design-Builder under the Design-Build Contract to evidence Substantial Completion under the
Design-Build Contract and all conditions to substantial completion under the Design-Build
Contract shall have been satisfied.
(ii)
Borrower shall furnish to Lender such other Government
Approvals which are required under applicable law concerning the development, construction,
use, occupancy and operation of the Planned Improvements (other than a final certificate of
occupancy).
(iii) Borrower shall deliver to Lender a temporary certificate of
occupancy (or equivalent thereof) issued by the applicable Governmental Authorities with
respect to the Planned Improvements.
(iv)
Borrower shall substantially complete the Planned Improvements
in accordance with the Contract Documents and Plans and Specifications, excluding only the
Punchlist Items.
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(v)
Except with respect to the Punchlist Items, Borrower shall furnish
Lender with progress and final lien waivers and releases in accordance with applicable state law
or as otherwise acceptable to Lender from (1) the Design-Builder, its Architect and consultants
and all subcontractors and material suppliers that have provided materials, labor, or both with
respect to the Construction and (2) from the Design Professionals.
(vi)
Lender shall receive a date down endorsement to its Title Policy
satisfactory to Lender with an effective date not earlier than the Substantial Completion Date.
(g)
Final Completion. By the Final Completion Outside Date (subject to
Force Majeure Events), Borrower shall cause each of the following to occur:
(i)
Borrower shall satisfy the requirements described in clauses (i)
through (v) of Section 3.3(q) above.
(ii)
Borrower shall cause all Punchlist Items to be one hundred percent
(100%) completed.
(iii) Borrower shall deliver to Lender a final certificate of occupancy
(or its equivalent) issued by the applicable Governmental Authority with respect to all of the
Planned Improvements.
(iv)
Lender shall receive a date down endorsement to its Title Policy
satisfactory to Lender with an effective date not earlier than the Final Completion Date.
4.2
Liens and Stop Notices. Borrower shall not create, incur, assume or permit to
exist any mechanic’s lien on any portion of the Property or any stop notice in respect of the
Property or the Loan, except for the Permitted Encumbrances. After prior written notice to
Lender, Borrower, at its own expense, may contest by appropriate legal proceeding, promptly
initiated and conducted in good faith and with due diligence, the amount or validity of any
mechanic’s lien, provided that: (i) no Event of Default exists; (ii) such proceeding shall be
conducted in accordance with all applicable Legal Requirements; (iii) neither the Property nor
any part thereof or interest therein will be in danger of being sold, forfeited, terminated,
cancelled or lost and such contest shall not affect or delay the construction of the Planned
Improvements as required under this Agreement; (iv) Borrower shall promptly upon final
determination thereof pay the amount of any such Liens, together with all costs, interest and
penalties which may be payable in connection therewith; (v) to insure the payment of such Liens,
if not already fully covered by a payment bond in accordance with the requirements of this
Agreement, Borrower shall deliver to Lender either (A) cash, or other security as may be
approved by Lender, in an amount equal to one hundred twenty-five percent (125%) of the
contested amount or (B) a payment bond in an amount equal to one hundred percent (100%) of
the contested amount from a surety acceptable to Lender in its reasonable discretion; (vi) failure
to pay such Liens will not subject Lender to any civil or criminal liability; (vii) such contest shall
not affect the ownership, use or occupancy of such Property; (viii) the aggregate amount of all
such Liens that have not been discharged by bonding and are being contested at any given time
does not exceed One Hundred Thousand and No/100 Dollars ($100,000.00); and (ix) Borrower
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shall, upon request by Lender, give Lender prompt notice of the status of such proceedings
and/or confirmation of the continuing satisfaction of the conditions set forth in clauses (i)
through (viii) of this Section 4.2. Lender may pay over any such cash or other security held by
Lender to the claimant entitled thereto at any time when, in the reasonable judgment of Lender,
the entitlement of such claimant is established by a court of competent jurisdiction or the
Property (or any part thereof or interest therein) shall be in imminent danger of being sold,
forfeited, terminated, cancelled or lost or there shall be any danger of the Lien of the Security
Instrument being primed by any related Lien.
4.3
Inspections.
(a)
Lender shall have the right to enter upon the Property at all reasonable
times to inspect the Property (including the Planned Improvements), the Construction, and all
materials to be used in connection with the Construction to verify information disclosed or
required pursuant to this Agreement, including, without limitation, (i) to examine all detailed
plans and shop drawings in connection with the construction of the Planned Improvements, and
(ii) meet with the representatives of the Design Professionals, Design-Builder, and Major
Contractors to discuss the status and issues relating to the construction of the Planned
Improvements (and by this provision Borrower authorizes the Design Professionals, DesignBuilder, and Major Contractors to cooperate and discuss with such Persons such construction
matters, but after reasonable prior notice to Borrower of such discussions); provided, that,
Borrower shall have the opportunity to have a representative of Borrower present at all such
meetings. Borrower shall, upon reasonable prior notice, cause a complete set of the original
plans (and all supplements thereto) relating to the construction of the Improvements (including
the Planned Improvements) to be made available for inspection by such representatives.
(b)
Any inspection or review of the Property (including the Planned
Improvements) by Lender is solely to determine whether Borrower is properly discharging its
obligations to Lender and may not be relied upon by Borrower or by any third party as a
representation or warranty of compliance with this Agreement or any other agreement. Lender
owes no duty of care to Borrower or any third party to protect against, or to inform Borrower or
any third party of, any negligent, faulty, inadequate or defective design or construction of the
Property (including the Planned Improvements) as determined by Lender.
4.4
Unsatisfactory Work. Borrower will, upon demand of Lender (based upon the
advice of the construction consultant, if applicable), correct any Unsatisfactory Work; and the
advance of any proceeds of the Loan shall not constitute a waiver of Lender’s right to require
compliance with this covenant with respect to any such defects or departures from the Contract
Documents and Plans and Specifications not theretofore discovered by or called to the attention
of Lender or its construction consultant.
4.5
Plans and Specifications; Change Orders.
(a)
Except as otherwise provided in this Agreement, Borrower shall not make
any Change Order with respect to the Contract Documents or the Plans and Specifications
without Lender’s prior written consent unless such Change Order (each such Change Order
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CONSTRUCTION LOAN AGREEMENT
CEDAR PORT LOGISTICS CENTER
DEAL ID 21-0070
265741215
satisfying clauses (i) through (iii) of this sentence being a “Permitted Change Order”): (i) does
not constitute a material change in the building material or equipment specifications, or in the
architectural or structural design, value or quality of any of the Planned Improvements; (ii)
would not result in a decrease or increase of construction costs in excess of One Hundred
Thousand and No/100 Dollars ($100,000.00) for any single change or in excess of Two Hundred
Fifty Thousand and No/100 Dollars ($250,000.00) for all such changes; and (iii) would not
materially and adversely affect the structural integrity, quality of building materials, or overall
efficiency of operating systems of the Planned Improvements.
(b)
Borrower shall submit any proposed Change Order with respect to the
Contract Documents or the Plans and Specifications that is not a Permitted Change Order to
Lender at least ten (10) Business Days prior to the commencement of construction relating to
such proposed change. Requests for any change which requires consent shall be accompanied by
working drawings (if applicable) and a written description of the proposed change, submitted on
a change order form reasonably acceptable to Lender, signed by Borrower and, if required by
Lender, also by the Design Professionals, Design-Builder, and Major Contractors for the same.
At its option, as a condition to Lender’s approval of a proposed change in construction, Lender
may require Borrower to: (i) provide evidence reasonably satisfactory to Lender of the cost and
time necessary to complete the proposed change; and (ii) comply with the balancing provisions
set forth in Section 3.2(b)(v) above. Borrower acknowledges that Lender’s review of any
changes and required consent may result in delays in construction.
(c)
Borrower acknowledges that, even if a Change Order is a Permitted
Change Order, Lender may require a deposit to render the Loan to be In-Balance as a result of
such Change Order if such balancing deposit is otherwise required pursuant to the terms of this
Agreement.
(d)
If requested by Lender, Borrower shall make available to Lender and its
construction consultant a change order log showing all changes to the Contract Documents or
Plans and Specifications since inception. If requested by Lender, Borrower shall provide an
explanation of any Change Order and the need therefor.
4.6
Contractor Construction Information; Executed Contracts. Within ten (10)
days of Lender’s written request, Borrower shall deliver to Lender from time to time in a form
acceptable to Lender: (a) a list detailing the name, address and phone number of each Contractor
previously employed or to be employed or used for construction of the Construction Work
together with the dollar amount, including changes, if any, of each contract and subcontract, and
the portion thereof, if any, paid through the date of such list; (b) copies of each Contract,
including any changes thereto; (c) a cost breakdown of the projected total cost of constructing
the Construction Work, and that portion, if any, of each cost item which has been incurred; and
(d) a construction progress schedule detailing the progress of construction and the projected
sequencing and completion time for uncompleted work, all as of the date of such schedule.
Lender may contact any such contractor, subcontractor or material supplier to discuss the course
of construction.
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4.7
Major Contracts. Borrower shall not (a) enter into, or authorize any other
Person to enter into, any Major Contract with any Contractor, (b) enter into, or authorize any
other Person to enter into, any material amendment or modification of any Major Contract or
(c) waive any material default or right under any Major Contract, in each case, without the prior
written approval of Lender, not to be unreasonably withheld, conditioned or delayed. Borrower
shall cause each Major Contract to provide that the contract counterparty will attorn to and
perform for Lender (or Lender’s designee) subject only to receiving payment within sixty (60)
days of sums past due. Borrower shall not terminate, or authorize any other Person to terminate,
any Major Contract other than as a result of a material default by the contract counterparty.
Borrower shall provide prompt notice to Lender of any termination of any Major Contract.
Borrower shall use commercially reasonable efforts to enforce all Major Contracts.
4.8
Prohibited Contracts. Without Lender’s prior written consent, which may be
granted or withheld in Lender’s sole and absolute discretion, Borrower shall not contract for any
materials, furnishings, equipment, fixtures or other parts or components of the Construction
Work or any other improvements to the Real Property, if any third party shall retain any
ownership interest in such items after their delivery to the Property.
4.9
Retention. Each Contract must include a provision for Retainage. The term
“Retainage” means the right to retain from each payment of sums due under the relevant
Contract an amount equal to ten percent (10%) of such sums; however, a Contract (excluding the
Design-Build Contract) may include provision for payment of the retainage due to such
Contractor if the following conditions are satisfied: (a) such Contractor has completed its work,
as verified by Lender’s construction consultant, with no punch-list items remaining; (b) the
Architect has certified that such work is complete in accordance with the Plans and
Specifications; (c) such Contractor has no sub-contractors; (d) such work has been complete for
at least thirty (30) days; and (e) such Contractor has delivered a final lien waiver for all work
performed and materials supplied by it conditioned only on payment of the required retention.
Lender will not withhold its consent to a disbursement for payment of Retainage if all conditions
to disbursement in this Agreement are satisfied and the foregoing conditions are also satisfied.
4.10 Construction Consultant. Lender reserves the right to employ a construction
consultant and any other consultants necessary, in Lender’s reasonable judgment, to review
requests for disbursements, inspect all construction and the periodic progress of the same.
Borrower shall make available to Lender and any such construction consultant on reasonable
notice during business hours, all documents and other information (including, without limitation,
receipts, invoices, lien waivers and other supporting documentation to substantiate the costs to be
paid with the proceeds of any request for disbursement) which any contractor or other Person
entitled to payment for work in connection with the Improvements is required to deliver to
Borrower and shall use its commercially reasonable efforts to obtain any further documents or
information reasonably requested by Lender or such construction consultant in connection with
any Loan advance or the administration of this Agreement. Borrower acknowledges and agrees
that the construction consultant shall have no responsibilities or duties to Borrower, and shall be
employed solely for the benefit of Lender. No default of Borrower will be waived by an
inspection by Lender or its construction consultant. Any and all reports, advice or other
information provided by any such construction consultant to Lender or otherwise produced by or
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in the possession of the construction consultant shall be confidential and Borrower shall have no
right to obtain or review same.
4.11 Information. During the period commencing on the date hereof and ending on
the day immediately preceding the Final Completion Date, as soon as available and in any event
within ten (10) Business Days after the end of each calendar month occurring during such period,
Borrower shall deliver to Lender a certificate of an authorized officer of Borrower, in form and
substance reasonably satisfactory to Lender, setting forth in reasonable detail: (a) Borrower’s
total sources of funds and uses thereof during such month (specifically identifying any uses of
contingency funds permitted to be advanced by Lender); (b) the aggregate amounts paid during
such month to the Design-Builder and/or Contractors; (c) variations from the Construction
Schedule, including, without limitation, the estimated Substantial Completion Date and the
estimated Final Completion Date, and the reasons therefor; (d) if the amounts paid to the DesignBuilder and/or Contractors during such month are at variance from the amounts scheduled to be
paid pursuant to the applicable request for disbursement, the reasons for such variance; and (e)
the status of construction generally and of the Government Approvals necessary for the
construction and operation of the Property.
4.12 Construction Budget. The initial Approved Construction Budget is attached
hereto as Exhibit G. So long as no Event of Default exists, Borrower may revise the Approved
Construction Budget from time to time to (i) reallocate Cost Savings from one line item to
another line item in the Approved Budget as follows: (A) Cost Savings from any “Soft Costs” (as
shown in the Approved Construction Budget) may be reallocated to any line item for other “Soft
Costs” (as shown in the Approved Construction Budget), except, however, that no allocation
from line items for interest expense, taxes or insurance premiums may be made without Lender’s
consent; and (B) Cost Savings from any “Hard Costs” may be reallocated to any line item for
other “Hard Costs” and (ii) make Permitted Contingency Allocations. All other revisions and
amendments to the Approved Construction Budget require the prior written approval of Lender
in its reasonable discretion, which approval may be conditioned on a balancing payment.
Borrower may allocate funds from the “contingency” line item to any other line item subject to
the following restrictions: (x) Borrower may freely use fifty percent (50%) of the contingency
line item and (y) after Borrower has allocated fifty percent (50%) of the initial amount of the
contingency line item, the remaining amount of contingency (expressed as a percentage of the
original contingency line item) must be at least one-half (1/2) of the remaining work to be
completed (expressed as a percentage of the total work), except that, when the remaining work to
be completed is twenty percent (20%) or less than the total work, then Borrower may freely
allocate contingency without restriction. Any allocation of contingency in compliance with this
Section 4.12 is a “Permitted Contingency Allocation”. If Borrower has the unilateral right to
amend the Approved Construction Budget and desires to do so, then Borrower shall give a
written notice to Lender attaching the proposed revised Approved Construction Budget and
indicating in reasonable detail the specific changes. Such revision to the Approved Construction
Budget shall, for purposes of determining whether a requested Disbursement is in compliance
with the Approved Construction Budget, be effective ten (10) days after received by Lender or at
such sooner time as Lender may elect.
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4.13 Appraisals. Lender may commission an Appraisal: (a) upon Substantial
Completion; (b) upon Final Completion; and (c) at any other time if required by applicable law
or accounting policy. Such Appraisals shall be completed at Borrower’s expense and shall be
prepared by an appraiser satisfactory to Lender.
4.14 Lender’s and Construction Consultant’s Actions for their Own Protection
Only. The authority herein conferred upon Lender and/or its construction consultant and any
action taken by Lender and/or its construction consultant in making inspections, procuring sworn
statements and waivers of lien, approving contracts and subcontracts and approving Plans and
Specifications will be taken by Lender and its construction consultant for their own protection
only, and neither Lender nor its construction consultant shall be deemed to have assumed any
responsibility to Borrower or any other Person with respect to any such action herein authorized
or taken by Lender and/or its construction consultant or with respect to the Construction Work,
performance of contracts or subcontracts by any contractors or subcontractors, or prevention of
claims for mechanics’ liens. Any review, investigation or inspection conducted by Lender
and/or its construction consultant or any other architectural or engineering consultants retained
by Lender in order to independently verify Borrower’s satisfaction of any conditions precedent
to advances under this Agreement, Borrower’s performance of any of the covenants, agreements
and obligations of Borrower under this Agreement, or the validity of any representations and
warranties made by Borrower hereunder (regardless of whether or not the party conducting such
review, investigation or inspection should have discovered that any of such conditions precedent
were not satisfied or that any such covenants, agreements or obligations were not performed or
that any such representations or warranties were not true), shall not affect (or constitute a waiver
by Lender of) (a) any of Borrower’s representations, warranties or obligations under this
Agreement or Lender’s reliance thereon or right to require the performance thereof, or (b)
Lender’s reliance upon any certifications of Borrower. Design-Builder or the Design
Professionals required under this Agreement or any other facts, information or reports furnished
to Lender by Borrower hereunder.
4.15 Sign and Publicity. If Lender requests, Borrower shall permit Lender, at
Lender’s cost and expense, to have a customary sign or signs erected on the Property in a
conspicuous location indicating that the financing for the Property has been provided by Lender,
provided that (a) such sign or signs comply with applicable law, and (b) the location of the sign
or signs does not interfere with the construction of the Improvements. Borrower shall include in
any public announcement or media release concerning the general development of the Property a
statement that Lender has provided the financing for the Property. In addition, Lender shall have
the right to publicize the making of the Loan.
4.16
follows:
Construction Representations. Borrower represents and warrants to Lender as
(a)
The documents listed on Schedule V attached hereto include all
documents constituting the Government Approvals for the Construction Work as of the Effective
Date. Borrower shall not authorize or approve or permit any change to such Government
Approvals unless such change is administrative in nature only and will have no adverse effect on
the Construction Work or the cost or timing of the Construction Work.
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(b)
Other than those Government Approvals to be obtained after the date this
representation is given, all Government Approvals necessary in connection with the construction
of the Construction Work as contemplated by the Loan Documents, have been duly obtained,
were validly issued, are in full force and effect, are not subject to appeal, are held in the name of
Borrower (in the case of the Property), are free from conditions or requirements, and are
assignable to and assumable by the successors in interest and transferees of Borrower and run
with the land.
(c)
The Government Approvals to be obtained after the date this
representation is given are required solely in connection with later stages of the Construction
Work and are not customarily obtained until such later stages, and shall be obtained on or prior
to the date when so required. Borrower has no reason to believe that any Government Approvals
not yet been obtained by Borrower, but which are required to be obtained in the future, will not
be granted in due course, on or prior to the date when required and free from any condition or
requirement.
(d)
The Planned Improvements, if constructed in accordance with the Contract
Documents and Plans and Specifications, will conform to and comply with all covenants,
conditions, restrictions and reservations in the Government Approvals and all applicable Legal
Requirements.
(e)
Borrower has no reason to believe that Lender will not be entitled, without
undue expense or delay, to the benefit the Government Approvals with respect to the Property
upon the exercise of remedies under the Loan Documents.
(f)
Borrower has delivered to Lender a true and complete copy of each of the
Government Approvals heretofore obtained with respect to the Property, as the same shall be
supplemented during the course of obtaining additional Government Approvals as construction
of the Construction Work proceeds.
(g)
There is no proceeding pending or threatened that seeks, or may be
expected, to rescind, terminate, modify, amend or suspend any Government Approvals required
for the completion of the Construction Work.
(h)
The information set forth in each application and other written material
submitted by Borrower and to the applicable Governmental Authority in connection with each of
the Government Approvals is accurate and complete in all respects.
4.17
Design-Builder; Major Contractors; Design Professionals.
(a)
Design-Builder.
(i)
Borrower shall (1) use commercially reasonable efforts to cause
Design-Builder to diligently perform and observe all of the terms, covenants and conditions of
the Design-Build Contract to be performed and observed by Design-Builder, (2) promptly
enforce the performance and observance of all of the terms, covenants and conditions of the
Design-Build Contract to be performed and observed on the part of Design-Builder,
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(3) diligently perform and observe all of the terms, covenants and conditions of the Design-Build
Contract to be performed and observed on the part of Borrower, (4) promptly notify Lender of
any material default under the Design-Build Contract of which Borrower is aware, and (5) ensure
that the work done by Design-Builder is performed and completed in accordance with the
requirements of this Agreement. Borrower shall, upon request by Lender, provide, or cause
Design-Builder to provide, Lender with reports in regard to the status of construction of the
Planned Improvements, in such form and detail as is reasonably requested by Lender. If
Borrower shall default in the performance or observance of any term, covenant or condition of
the Design-Build Contract on the part of Borrower to be performed or observed, then, without
limiting Lender’s other rights or remedies under this Agreement or the other Loan Documents,
and without waiving or releasing Borrower from any of its obligations hereunder or under the
Design-Build Contract, as applicable, Lender shall have the right, but shall be under no
obligation, to pay any sums and to perform any act as may be appropriate to cause all the terms,
covenants and conditions of the Design-Build Contract, on the part of Borrower to be performed
or observed. All such sums shall be due and payable by Borrower within ten (10) days after
Lender’s written demand and, if not paid within such ten (10) day period, shall bear interest at
the Default Interest Rate from the date of expenditure until paid. All sums so paid and expended
by Lender and the interest thereon shall be secured by the Security Instrument.
(ii)
Borrower shall not (1) surrender, terminate, cancel, amend,
supplement, alter or otherwise modify the Design-Build Contract except as otherwise permitted
under this Agreement, (2) enter into any other agreement relating to the construction of the
Planned Improvements or any part thereof with Design-Builder or any other Person, (3) consent
to the assignment by Design-Builder of its interest under the Design-Build Contract, (4) waive or
release any of its rights and remedies under the Design-Build Contract, or (5) do any act which
would relieve Design-Builder of any of its material obligations under the Design-Build Contract,
in each case, without the prior written consent of Lender. Borrower, however, may consent to
amendment of the Design-Build Contract to the extent necessary to implement Change Orders
permitted under this Agreement or to implement any adjustments necessary as a result of a
change to the Approved Construction Budget.
(b)
Intentionally omitted.
(c)
Major Contractors.
(i)
Borrower shall (1) use commercially reasonable efforts to cause
each Major Contractor to diligently perform and observe all of the terms, covenants and
conditions to be performed and observed by such Major Contractor under any Major Contract
applicable to such Major Contractor, (2) promptly enforce the performance and observance of all
of the terms, covenants and conditions of each Major Contract to be performed and observed on
the part of each such Major Contractor, (3) diligently perform and observe all of the terms,
covenants and conditions of each Major Contract to be performed and observed on the part of
Borrower, (4) promptly notify Lender of any material default under any Major Contract of which
Borrower is aware, and (5) ensure that the work done by each Major Contractor is performed and
completed in accordance with the requirements of this Agreement. If Borrower shall default in
the performance or observance of any term, covenant or condition of any Major Contract on the
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part of Borrower to be performed or observed, then, without limiting Lender’s other rights or
remedies under this Agreement or the other Loan Documents, and without waiving or releasing
Borrower from any of its obligations hereunder or under any Major Contract, as applicable,
Lender shall have the right, but shall be under no obligation, to pay any sums and to perform any
act as may be appropriate to cause all the terms, covenants and conditions of such Major
Contract, on the part of Borrower to be performed or observed. All such sums shall be due and
payable by Borrower within ten (10) days after Lender’s written demand and, if not paid within
such ten (10) day period, shall bear interest at the Default Interest Rate from the date of
expenditure until paid. All sums so paid and expended by Lender and the interest thereon shall
be secured by the Security Instrument.
(ii)
Borrower shall not (1) surrender, terminate, cancel, amend,
supplement, alter, or otherwise modify any Major Contract, (2) consent to the assignment
by any Major Contractor of its interest under any Major Contract, (3) waive or release
any of its rights and remedies under any Major Contract, or (4) do any act which would
relieve any Major Contractor of any of its material obligations under any Major Contract
applicable to any such Major Contractor, in each case, without the prior written consent
of Lender.
ARTICLE V
INSURANCE; CASUALTY, CONDEMNATION AND RESTORATION
Borrower covenants and agrees that, on or after the date hereof, until payment in full of
the Loan and the other amounts payable under the Loan Documents, Borrower shall obtain and
maintain in effect, at Borrower’s sole expense, the following policies of insurance in form and
substance satisfactory to Lender, each of which, except for the insurance required in Section 5.1
below, shall have claims paying ability ratings of at least “A-VII” by A.M. Best Company, and
shall otherwise be approved by Lender (individually, a “Policy” and collectively, the “Policies”).
5.1
Title Insurance. The Title Policy, together with any endorsements, reinsurance
and co-insurance agreements which Lender may require, insuring Lender, in the principal
amount of the Loan, that the Security Instrument constitutes a valid first priority Lien on the Real
Property, subject only to matters approved by Lender in writing. During the term of the Loan,
Borrower shall deliver to Lender, within five (5) days of Lender’s written request, such
endorsements to the Title Policy as Lender may reasonably require.
5.2
Property Insurance. Following Substantial Completion of the Construction
Work, a “special form” property insurance policy, including, but not limited to, coverage for
wind, hail, earthquake, collapse, sinkhole and terrorism (full coverage) for an amount not less
than one hundred percent (100%) of the replacement cost of the Property (exclusive of costs for
foundations, underground utilities and footings) without deduction for physical depreciation.
Such All Risk property insurance policy shall contain a Lenders Loss Payable Endorsement, and
not less than the following: (a) an agreed amount endorsement waiving any coinsurance
provisions; (b) a deductible not to exceed Fifty Thousand and No/100 Dollars ($50,000.00); (c)
ordinance or law coverage including (i) loss in value to the undamaged portion of the building(s)
to full replacement value, (ii) demolition costs with a limit per loss of $1,000,000 and (iii)
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increased costs of construction with a limit per loss of $1,000,000; (d) machinery and equipment
breakdown with coverage including, but not limited to, loss or damage from electrical injury,
machinery and equipment breakdown, and explosion of steam boilers, air conditioning
equipment, high pressure piping, pressure vessels or similar apparatus; and (e) business income
and loss rents coverage in amount equal to the estimated Actual Net Operating Income for the
property for a period of twelve (12) months, which may be increased from time to time by
Lender, with a 365 Day Extended Period of Indemnity.
5.3
Liability Insurance. A Commercial General Liability policy insuring against
claims for personal injury, bodily injury, death or property damage occurring upon, in or about
the property, to be on “occurrence” form with limits not less than One Million and No/100
Dollars ($1,000,000.00) per occurrence and Two Million and No/100 Dollars ($2,000,000.00)
general aggregate. If applicable, a Non-Owned and Hired Auto Liability policy with a
Combined Single Limit of than One Million and No/100 Dollars ($1,000,000.00) per occurrence.
If applicable, a Workers Compensation and Employer’s Liability policy with limits not less than
Statutory Limits for Workers Compensation with Employer’s Liability limits of $1,000,000 each
accident, each disease and each employee. Each such policy shall contain a per location general
aggregate if covering multiple locations.
5.4
Umbrella or Excess Liability Insurance. A commercial umbrella or excess
liability policy with limits not less than Twenty Million and No/100 Dollars ($20,000,000.00).
This policy shall schedule the following policies as “underlying”: Commercial General
Liability, Automobile Liability and Employer’s Liability.
5.5
Builder’s Risk Insurance.
During the period of construction of the
Improvements, a policy of builder’s risk insurance on an “all risks” basis as described in Section
5.2 above for one hundred percent (100%) of the insurable completed value of all construction
work, including hard costs, recurring soft costs and delay in use losses, in place or in progress
from time to time, insuring the Improvements, including materials in storage and while in transit.
To the extent there are any construction activities at the Property, the general commercial
liability insurance required under Section 5.2 above shall include “X”, “C” and “U” coverage.
The policy shall also contain a permission of occupancy endorsement.
5.6
General Insurance Requirements. The following additional requirements are
also applicable:
(a)
Insurance premiums on all policies must be paid annually in advance. All
outstanding premiums for the current policy term are to be paid prior to the Effective Date;
(b)
No insurance policy required hereunder shall be permitted to provide for
premium assessments to be made against Lender;
(c)
Borrower shall provide the following prior to the Effective Date: (i) an
Acord 25, Acord 25S or equivalent certificate of liability insurance and (ii) an Acord 28 or
equivalent certificate of property insurance;
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(d)
Each policy shall contain not less than a thirty (30) day notice to Lender of
written cancellation or material change and not less than ten (10) days prior notice to Lender of
cancellation for non-payment of premium;
(e)
Prior to the renewal date of each insurance policy required hereunder,
Borrower shall provide certificates of insurance providing evidence that the policies have been
renewed;
(f)
Lender may, at any time, request and be provided, complete copies of the
insurance policies providing the coverage required hereunder;
(g)
Lender to be named (i) the first mortgagee and lender loss payee with
respect to the property insurance coverage, and (ii) an additional insured with respect to general
liability and umbrella or excess liability insurances, as follows:
PacificCal Debt III, LLC
its successors and/or assigns
c/o PCCP, LLC
Attention: Servicing
10100 Santa Monica Blvd., Suite 1000
Los Angeles, CA 90067
(h)
A waiver of subrogation shall be provided on all policies of insurance
waiving rights of recovery against Lender.
(i)
The limits of insurance contained herein are minimum limits established
by Lender and shall not be construed to mean that Lender represents or warrants that the required
limits contained herein are adequate for protection to Borrower.
5.7
Restoration Proceeds.
(a)
Any and all awards, compensation, reimbursement, damages, proceeds,
settlements, and other payments or relief paid or to be paid, together with all rights and causes of
action relating to or arising from, (i) any insurance policy maintained by or on behalf of
Borrower following any damage, destruction, casualty or loss to all or any portion of the
Property (a “Casualty”, and such proceeds, “Insurance Proceeds”) or (ii) any temporary or
permanent taking or voluntary conveyance of all or part of the Property, or any interest therein or
right accruing thereto or use thereof, as the result of, or in settlement of, any condemnation or
other eminent domain proceeding by any Governmental Authority whether or not the same shall
have actually been commenced (a “Taking”, and such proceeds, “Condemnation Proceeds”,
and together with Insurance Proceeds, collectively, “Restoration Proceeds”) are hereby
assigned to Lender as additional collateral security hereunder subject to the Lien of the Security
Instrument, to be applied in accordance with this Article V. Lender shall be entitled to receive
and collect all Restoration Proceeds, and Borrower shall instruct and cause the issuer of each
policy of insurance described herein and any applicable Governmental Authority to deliver to
Lender all Restoration Proceeds. Borrower shall execute such further assignments of the
Restoration Proceeds as Lender may from time to time reasonably require. Notwithstanding the
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foregoing, if the Restoration Proceeds, less the amount of Lender’s reasonable out-of-pocket
costs and expenses (including reasonable attorneys’ fees and costs) actually incurred in
collecting the same (the “Net Restoration Proceeds”), are One Hundred Thousand and No/100
Dollars ($100,000.00) or less (the “Restoration Proceeds Threshold”), provided no Event of
Default then exists, Lender shall make such Net Restoration Proceeds available to Borrower. All
Insurance Proceeds received by Borrower or Lender in respect of business interruption coverage,
and all Condemnation Proceeds received with respect to a temporary Taking available to
Borrower, shall be deposited in a segregated escrow account with Lender or its servicer, as
applicable, and Lender shall estimate the number of months required for Borrower to restore the
damage caused such Casualty or replace cash flow interrupted by such temporary Taking, as
applicable, and shall divide the aggregate proceeds by such number of months, and, provided no
Event of Default then exists, shall disburse a monthly installment thereof to Borrower each such
month. Subject to Lender’s rights under Section 5.7, provided no Event of Default has occurred
and is continuing and the Restoration has been completed in accordance with this Agreement,
any Net Restoration Proceeds available to Borrower for Restoration, to the extent not used by
Borrower in connection with, or to the extent they exceed the cost of such Restoration and any
reasonable out-of-pocket costs actually incurred by Lender, shall be paid to Borrower.
(b)
Lender shall be entitled at its option to participate in any compromise,
adjustment or settlement in connection with (i) any insurance policy claims relating to any
Casualty, and (ii) any Taking in an amount in controversy, in either case, in excess of the
Restoration Proceeds Threshold, and Borrower shall within ten (10) Business Days after request
therefor reimburse Lender for all reasonable out-of-pocket expenses (including reasonable
attorneys’ fees and disbursements) actually incurred by Lender in connection with such
participation. Borrower shall not make any compromise, adjustment or settlement in connection
with any such claim in excess of the Restoration Proceeds Threshold or if an Event of Default
then exists without the prior written approval of Lender. Borrower shall not make any
compromise, adjustment or settlement in connection with any claim unless same is commercially
reasonable.
(c)
If and to the extent Restoration Proceeds are not required to be made
available to Borrower to be used for the Restoration of the Improvements affected by the
Casualty or Taking, as applicable, pursuant to this Agreement, Lender shall be entitled, without
Borrower’s consent, to apply such Restoration Proceeds or the balance thereof, at Lender’s
option either (i) to the full or partial payment or prepayment of the Indebtedness; provided that
such payment or prepayment shall not require any defeasance of the Loan and shall be without
the payment of the Yield Maintenance Premium, unless an Event of Default has occurred and is
then continuing, in which case, Borrower shall pay to Lender an amount equal to the Yield
Maintenance Premium, if any, that may be required with respect to the amount of Insurance
Proceeds or Condemnation Proceeds applied to the Indebtedness, or (ii) to the Restoration of all
or any part of such Improvements affected by the Casualty or Taking, as applicable.
5.8
Restoration. Borrower shall restore and repair the Improvements and equipment
or any part thereof now or hereafter damaged or destroyed by any Casualty or affected by any
Taking; provided, however, that if the Casualty is not insured against or insurable, Borrower
shall so restore and repair even though no Insurance Proceeds are received. Notwithstanding
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anything to the contrary set forth in Section 5.7, Lender agrees that Lender shall make the Net
Restoration Proceeds (other than business interruption insurance proceeds, which shall be held
and disbursed as provided in Section 5.7) available to Borrower for Borrower’s restoration and
repair of the Improvements affected by the Casualty or Taking (a “Restoration”), as applicable,
on the following terms and subject to Borrower’s satisfaction of the following conditions;
provided, that Lender shall have the right to waive any of the following conditions in its sole
discretion:
(a)
At the time of such Casualty or Taking, as applicable, and at all times
thereafter, there shall exist no Event of Default.
(b)
The Improvements affected by the Casualty or Taking, as applicable, shall
be capable of being restored (including replacements) to substantially the same condition, utility,
quality and character, as existed immediately prior to such Casualty or Taking, as applicable, in
all material respects with a fair market value and projected cash flow of the Property equal to or
greater than prior to such Casualty or Taking, as applicable.
(c)
Borrower shall demonstrate to Lender’s reasonable satisfaction
Borrower’s ability to pay the Indebtedness coming due during such repair or restoration period
(after taking into account proceeds from business interruption insurance carried by Borrower).
(d)
(i) upon the occurrence of a Casualty, the Casualty resulted in an actual or
constructive loss of less than thirty percent (30%) of the fair market value of the Property and
less than thirty percent (30%) of the rentable area of the Property, (ii) upon the occurrence of a
Taking, the Taking resulted in an actual or constructive loss of less than fifteen percent (15%) of
the fair market value of the Property and less than fifteen percent (15%) of the rentable area of
the Property, less than fifteen percent (15%) of the land constituting the Property is taken, such
land is located along the perimeter or periphery of the Property, and no portion of the
Improvements is the subject of such Taking, and (iii) in any event, Leases covering at least sixtyfive percent (65%) of the rentable square footage of the Property will remain in full force and
effect during and after the Restoration.
(e)
Borrower shall have provided to Lender all of the following, and
collaterally assigned the same to Lender pursuant to assignment documents acceptable to Lender:
(i) an architect agreement with an architect reasonably acceptable to Lender and complete plans
and specifications for the Restoration of the Improvements lost or damaged to the condition,
utility and value prior to the applicable Casualty; (ii) fixed-price or guaranteed maximum cost
construction contracts with contractors reasonably acceptable to Lender for completion of the
Restoration work in accordance with the aforementioned plans and specifications; (iii) such
additional funds (if any) as are necessary from time to time, in Lender’s reasonable opinion, to
complete the Restoration (which funds shall be held by Lender as additional collateral securing
the Indebtedness and shall be disbursed, if at all, pursuant to this Article V); and (iv) copies of all
permits and licenses necessary to complete the Restoration in accordance with the plans and
specifications and all Legal Requirements and Property Requirements in all material respects.
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(f)
Borrower shall commence such work within one hundred twenty (120)
days after such Casualty or Taking, as applicable, and shall diligently pursue such work to
completion.
(g)
Lender shall be satisfied that the Restoration will be completed on or
before the earliest to occur of (i) the date that is six (6) months prior to the Maturity Date, (ii)
such time as may be required under applicable Legal Requirements and Property Requirements
in order to repair and restore the Property to the condition it was in immediately prior to such
Casualty or such Taking, as applicable, (iii) the expiration of the business interruption insurance
coverage referred to above, and (iv) the earliest date required pursuant to the terms of any Lease.
(h)
The Property and the use thereof after the Restoration will be in
compliance with all applicable Legal Requirements and Property Requirements.
5.9
Disbursement. Each disbursement by Lender of such Restoration Proceeds shall
be funded subject to conditions and in accordance with disbursement procedures which a
commercial construction lender would typically establish in the exercise of sound banking
practices, including requiring lien waivers and any other documents, instruments or items which
may be reasonably required by Lender. In no event shall Lender be obligated to make
disbursements of Restoration Proceeds in excess of an amount equal to the costs actually
incurred from time to time for work in place as part of the Restoration, as determined by Lender,
less, as to each contractor, subcontractor or materialman engaged in a Restoration, an amount
equal to the greater of (a) ten percent (10%) of the costs actually incurred for work in place as
part of such Restoration, as reasonably determined by Lender, and (b) the amount actually
withheld by Borrower (the “Casualty Retainage”). The Casualty Retainage shall not be
released until Lender reasonably determines that the Restoration has been completed in
accordance with the provisions of this Agreement and that all approvals necessary for the reoccupancy and use of the Property have been obtained from all appropriate Governmental
Authorities, and Lender receives evidence satisfactory to Lender that the costs of the Restoration
have been paid in full or will be paid in full out of the Casualty Retainage.
5.10 Change in Insurance Requirements. Lender may, in connection with any
renewal of insurance, amend these insurance requirements due to (a) new information not known by
Lender on the Effective Date which poses a material risk to the Property, or (b) changed
circumstances after the Effective Date which in the reasonable judgment of Lender makes such
change necessary. Promptly following the receipt of a notice from Lender, Borrower will make
such modifications to the terms of any insurance policy as Lender specifies.
5.11 Notification of Loss. Borrower shall promptly notify Lender of any single loss or
event likely to give rise to any claim against an insurer for an amount in excess of Fifty
Thousand and No/100 Dollars ($50,000.00) covered by any insurance policies required
hereunder.
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ARTICLE VI
REPRESENTATIONS AND WARRANTIES
To induce Lender to execute this Agreement and make the Loan, Borrower hereby
represents, warrants and covenants to Lender as of the date hereof and continuing hereafter as
follows:
6.1
Organization; Power; Special Purpose Entity. Borrower: (a) is duly organized
and validly existing in good standing under the laws of the State of its formation; (b) is duly
qualified to do business in each jurisdiction in which the nature of its business or any of the
Property makes such qualification necessary; (c) has the requisite power and authority to carry
on its business as now being conducted; and (d) has the requisite power to execute and deliver,
and perform its obligations under, the Loan Documents. Borrower is a “registered organization”
within the meaning of the Uniform Commercial Code in effect in the State where Borrower is
organized, and Borrower’s organizational identification number issued by such State is
803981597. Borrower is now, has been at all times since its formation, and shall at all times
remain, a Special Purpose Entity.
6.2
Authority; Enforceability. Borrower has the requisite legal power and authority
to execute, deliver and perform each of the Loan Documents to which it is a party. The
execution, delivery and performance thereof, and the consummation of the transactions
contemplated thereby, have been duly authorized by all requisite action of Borrower, and no
other proceedings or authorizations on the part of Borrower are necessary to consummate such
transactions. The Loan Documents executed by Borrower in connection with the Loan are the
legal, valid and binding obligations of Borrower, enforceable against Borrower in accordance
with their terms, subject only to bankruptcy, insolvency and other limitations on creditors’ rights
generally and to equitable principles. Such Loan Documents are, as of the Effective Date, not
subject to any right of rescission, set-off, counterclaim or defense by Borrower, including the
defense of usury.
6.3
Ownership. The organizational chart attached hereto as Schedule II is complete
and accurate, and illustrates (i) each Person who (individually and/or together with the Affiliates
of such Person) has twenty-five percent (25%) of more of the direct or indirect Equity Interests
in and/or rights to distributions from Borrower and/or Guarantor, and (ii) the respective
ownership percentages of each such Person.
6.4
No Conflict. The execution, delivery and performance by Borrower of the Loan
Documents to which it is a party, and each of the transactions contemplated thereby, do not and
will not: (a) conflict with or violate Borrower’s partnership agreement, articles of organization,
operating agreement or other organizational documents, as the case may be; (b) conflict with,
result in a breach of or constitute (with or without notice or lapse of time or both) a default under
any (i) contractual obligation to which Borrower, the Property or the other Collateral is subject,
(ii) statute, ordinance, rule or regulation of any Governmental Authority applicable to Borrower,
the Property or the other Collateral, or (iii) court or Governmental Authority order; or (c) result
in or require the creation or imposition of any Lien upon any of the properties or assets of
Borrower (other than Liens in favor of Lender arising pursuant to the Loan Documents).
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6.5
Consents and Authorizations. Borrower has obtained all consents and
authorizations required under its organizational documents or pursuant to its contractual
obligations with any other Person, and has obtained all consents and authorizations of, and
effected all notices to and filings with, any Governmental Authority as may be necessary to
allow Borrower to lawfully execute, deliver and perform its obligations under the Loan
Documents and the Environmental Indemnity Agreement. Guarantor has obtained all consents
and authorizations required under its organizational documents or pursuant to its contractual
obligations with any other Person, and has obtained all consents and authorizations of, and
effected all notices to and filings with, any Governmental Authority as may be necessary to
allow Guarantor to lawfully execute, deliver and perform its obligations under the Guaranty
Documents.
6.6
Financial Information. All financial statements and other financial information
delivered by Borrower to Lender, including, without limitation, information relating to the
financial condition of Borrower, Guarantor and/or the Property are true and correct in all
material respects, and, as to financial statements, fairly and accurately reflect the financial
condition of the subject thereof and have been prepared in accordance with an Approved
Accounting Method, consistently applied. Since the date of such financial statements or other
financial information, there has been no change that has had, or would be reasonably expected to
have, a Material Adverse Effect. There are no known material unrealized or anticipated losses of
Borrower or Guarantor. None of Borrower, any Member, or Guarantor has filed or been the
subject of any bankruptcy, insolvency, reorganization, dissolution, division, or similar
proceeding or any proceeding for the appointment of a receiver or trustee for all or any
substantial part of their respective property or assets. None of Borrower, any Member, or
Guarantor has admitted in writing its inability to pay its debts when due, made an assignment for
the benefit of creditors or taken other similar action.
6.7
Litigation; Adverse Effects; Condemnation.
(a)
There is no action, suit, proceeding, governmental investigation or
arbitration, at law or in equity, or before or by any Governmental Authority, pending against and
served upon or, to the best of Borrower’s knowledge, threatened against and not served upon
Borrower, Guarantor, the Property or any other Collateral which is reasonably likely to result in
a Material Adverse Effect.
(b)
Borrower is not (i) in violation of any applicable Legal Requirements,
which violation has, or would reasonably be expected to have, a Material Adverse Effect, or
(ii) subject to or in default with respect to any court or Governmental Authority order which has,
or would reasonably be expected to likely to have a Material Adverse Effect. There are no
governmental or administrative proceedings pending or, to the best of Borrower’s knowledge,
threatened against Borrower, the Property or any other Collateral, which, if adversely decided,
would have a Material Adverse Effect.
(c)
There are no known, pending, or, to the best of Borrower’s knowledge,
threatened eminent domain or condemnation proceedings affecting the Property (or any portion
thereof).
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(d)
There are no known, pending or, to the best of Borrower’s knowledge,
threatened claims outstanding against Borrower or the Property (or any portion thereof) in
respect of any work done on or prior to the date hereof at, on or around the Property by any
contractor or third-party claimant.
(e)
Borrower has no material financial obligations other than Permitted
Indebtedness.
6.8
Payment of Taxes. All tax returns and reports required to be filed by Borrower
with any Governmental Authorities have been timely filed, and all taxes, assessments, fees and
other governmental charges shown on such returns or otherwise payable by Borrower have been
paid when due and payable, except such taxes, if any, as are not yet delinquent or that are being
contested in good faith by appropriate proceedings and for which adequate reserves are
maintained and subject to such valid extensions of the filing and/or due date thereof as Borrower
shall have obtained. Borrower has no knowledge of any proposed tax assessment against
Borrower that will have, or could reasonably be expected to have, a Material Adverse Effect,
which is not being actively contested in good faith by Borrower.
6.9
Disclosure. The representations and warranties of Borrower and Guarantor, as
applicable, contained in this Agreement, the other Loan Documents and the Guaranty
Documents, and all certificates, financial statements and other documents delivered to Lender in
connection herewith and therewith, do not contain any untrue statement of a material fact or omit
to state a material fact known to Borrower and necessary in order to make the statements
contained herein or therein, in light of the circumstances under which they were made, not
materially misleading. All organizational documents, financial statements, Leases, agreements
and other documents and instruments delivered by or at the direction of Borrower to Lender
pursuant to this Agreement, the other Loan Documents and the Environmental Indemnity
Agreement are true, correct and complete copies of the originals. All organizational documents,
financial statements, Leases, agreements and other documents and instruments delivered by or at
the direction of Guarantor to Lender pursuant to this Agreement and the Guaranty Documents
are true, correct and complete copies of the originals. The foregoing representations and
warranties with respect to any documents, Leases or instruments relating to the Property and not
prepared by or on behalf of Borrower are made to the best of Borrower’s knowledge. Borrower
has not withheld any material fact from Lender in regard to any matter addressed in or material
to the Loan Documents.
6.10 Requirements of Law and Other Covenants. Borrower and the Property and
the use thereof comply in all material respects with (a) all statutes, ordinances, rules and
regulations of Governmental Authorities applicable to Borrower or the Property (including,
without limitation, the ADA and all Hazardous Materials Laws), and (b) any restrictive
covenants or other title matters affecting the Property or any portion thereof. The Property
consists of one or more legal and separate lot(s) for tax assessment purposes. All requisite
permits, easements and rights of way necessary for the occupancy, operation, ownership and use
of the Property have been or will be obtained by Borrower and those that have been obtained are
in full force and effect and not subject to default by any party thereto.
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6.11 Deliveries; Purchase Price for Property; Outstanding Balance of Existing
Loan. Borrower has heretofore delivered to Lender true, complete and correct copies of the
Purchase Agreement and all Leases at the Property, as well as the other documents, materials and
information delivered to Borrower or otherwise obtained by or prepared for Borrower with
respect to the acquisition, construction, development, ownership or operation of the Property by
Borrower. No such documents, materials or information disclose, and Borrower has not
otherwise discovered in the course of its due diligence investigations, any facts, matters or
circumstances that could have a Material Adverse Effect. Pursuant to the Purchase Agreement,
Borrower purchased the Property for a purchase price of Ten Million Three Hundred One
Thousand and No/100 Dollars ($10,301,000.00).
6.12 Title to Assets; No Liens. On the Effective Date, Borrower has good, marketable
and indefeasible fee title to the Property, free and clear of all Liens, except for any Permitted
Encumbrances. All transfer taxes, deed stamps, intangible taxes or other amounts in the nature
of transfer taxes required to be paid by any Person under applicable Legal Requirements in
connection with the transfer of the Property to Borrower have been paid. The Security
Instrument, when properly recorded in the appropriate records, together with any Financing
Statement required to be filed in connection therewith, will create (a) a valid, perfected first
priority lien on Borrower’s interest in the Property, and (b) valid and perfected first priority
security interests in and to, and perfected collateral assignments of, all personalty (including the
Leases), all in accordance with the terms thereof, in each case subject only to the Permitted
Encumbrances. All mortgage, recording, stamp, intangible or other similar taxes required to be
paid by any Person under applicable Legal Requirements in connection with the execution,
delivery, recordation, filing, registration, perfection or enforcement of any of the Loan
Documents have been paid. No Lien upon the Property materially adversely affects the value,
operation or use of the Property or Borrower’s ability to repay the Loan. There are no
outstanding options to purchase or rights of first refusal affecting all or any portion of the
Property. The land survey for the Property delivered to Lender does not fail to reflect any
material matter affecting the Property or the title thereto. Except as shown on the land survey
delivered by Borrower to Lender in connection with the closing of the Loan, all of the
Improvements included in determining the appraised value of the Property lie wholly within the
boundaries and building restriction lines of the Property, and no improvement on an adjoining
property encroaches upon the Property, and no easement or other encumbrance upon the
Property encroaches upon any of the Improvements, except those insured against by the Title
Policy insuring the Lien of the Security Instrument.
6.13 Utilities. All utility services, including, without limitation, gas, water, sewage,
electrical and telephone, necessary for the use and occupancy of the Property are available at or
within the boundaries of the Property and have been connected or are available for connection by
Borrower upon payment of all required connection or hook-up fees.
6.14 Leases. As of the Effective Date, the Property is not subject to any Leases or
occupancy agreements other than the Plastic Express Lease. The Plastic Express Lease is in full
force and effect and there are no defaults thereunder by any party thereto or any guarantor
thereof. No rent (including security deposits) under the Plastic Express Lease has been paid
more than one (1) month in advance of its due date. The Plastic Express Lease sets forth all
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payments, free rent, partial rent, rebate of rent or other payments, credits, allowances or
abatements required to be given by the landlord under the Plastic Express Lease to Plastic
Express.
6.15 Affiliate Fees and Agreements. In connection with the acquisition, financing,
development, construction, operation and/or management of the Property, no Borrower Party is
party to, or bound by, any contract, agreement, or other instrument with another Borrower Party
(any contract, agreement or other instrument between or among two or more Borrower Parties,
an “Affiliate Agreement” and collectively, “Affiliate Agreements”) and no Borrower Party is
obligated to pay or reimburse any fees, commissions, or other amounts to any other Borrower
Party (any fees, commissions or other amounts payable to a Borrower Party pursuant to an
Affiliate Agreement, an “Affiliate Fee” and collectively, “Affiliate Fees”), except for those
Affiliate Agreements listed on Schedule III (together with any Affiliate Agreements entered into
in accordance with Section 8.23 from time to time, collectively, “Approved Affiliate
Agreements”) and those Affiliate Fees listed on Schedule III (“Approved Affiliate Fees”).
6.16 Defects. There are no defects, facts or conditions affecting the Property or any
portion thereof that would make the Property unsuitable for the occupancy, use or sale thereof or
the construction of the Planned Improvements. There are no surface or subsurface soils
conditions adversely affecting the Property, including, without limitation, unstable soil or
landfills.
6.17
Patriot Act and Related Matters.
(a)
Borrower complies and will comply at all times with the Patriot Act and
all applicable requirements of Governmental Authorities having jurisdiction of Borrower and the
Property, including those relating to money laundering and terrorism.
(b)
None of Borrower, Guarantor, or any Member: (1) is listed on any
Government Lists; (2) is a Person who has been determined by competent authority to be subject
to the prohibitions contained in Presidential Executive Order No. 13224 (Sept. 23, 2001) or any
other similar prohibitions contained in the rules and regulations of OFAC or in any enabling
legislation or other Presidential Executive Orders in respect thereof; (3) has been previously
indicted for or convicted of any felony involving a crime or crimes of moral turpitude or for any
Patriot Act Offense; or (4) is currently under investigation by any Governmental Authority for
alleged criminal activity.
(c)
None of Borrower, Guarantor, or any Member is or has been charged or
are under investigation for, possible violations of the Racketeering, Influenced and Corrupt
Organizations Act, the Continuing Criminal Enterprises Act, the Controlled Substance Act of
1978, the Money Laundering Act of 1986, the AntiDrug Abuse Act of 1986, or similar Law
providing for the possible forfeiture of any of their respective assets or properties.
6.18 No Additional Liabilities of Borrower and/or Guarantors Not Previously
Disclosed in Writing to Lender. Notwithstanding anything to the contrary contained hereunder
or under any of the other Loan Documents, neither Borrower nor Guarantor, as applicable, has
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any obligation which was not previously disclosed to Lender in writing, which obligation would
have a Material Adverse Effect.
6.19 ERISA. Neither Borrower nor any ERISA Affiliate maintains, contributes to, has
any obligation to contribute to, or has any direct or indirect liability with respect to any
“employee benefit plan”, “multiemployer plan”, or any other “plan” (each as defined in ERISA).
Borrower is not an “employee benefit plan”, as defined in Section 3(3) of ERISA, subject to
Title I of ERISA, a “plan”, as defined in Section 4975(e)(1) of the Code, subject to Code
Section 4975, or a “governmental plan” within the meaning of Section 3(32) of ERISA. None of
the assets of Borrower constitutes “plan assets” of one or more of any such plans under 29 C.F.R.
Section 2510.3-101, as modified by Section 3(42) of the Code. The transactions contemplated
by the Loan Documents and the Environmental Indemnity Agreement by or with Borrower do
not violate state statutes regulating investment of, and fiduciary obligations with respect to,
governmental plans and such state statutes do not in any manner affect the ability of Borrower to
perform its obligations under the Loan Documents or the ability of Lender to enforce any and all
of its rights under this Agreement and the other Loan Documents. If an investor or direct or
indirect equity owner in Borrower is a plan that is not subject to Title I of ERISA or Section
4975 of the Code, but is subject to the provisions of any federal, state, local, non-U.S. or other
laws or regulations that are similar to those portions of ERISA or the Code, the assets of
Borrower do not constitute the assets of such plan under such other laws.
6.20 Investment Company Act; Public Utility Holding Company Act. Borrower is
not (a) an “investment company” or a company “controlled” by an “investment company”,
within the meaning of the Investment Company Act of 1940, as amended; (b) 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 (c) subject to any other federal or state law or regulation
which purports to restrict or regulate its ability to borrow money.
6.21 Property Management Agreement. The Property Management Agreement,
when entered into in accordance with this Agreement, will constitute the entire agreement
between Property Manager and Borrower with respect to the management of the Property, and
will not be assigned or encumbered (other than pursuant to the Security Instrument or the other
Loan Documents), or modified, amended, or supplemented without Lender’s prior written
consent.
6.22
Design-Build Contract.
(a)
Borrower has heretofore delivered to Lender a true, correct, and complete
copy of the Design-Build Contract (including any and all amendments, restatements,
assignments, changes, supplements, alterations, and other modifications thereof). Other than the
Design-Build Contract and other than those agreements as Borrower may enter into after the
Effective Date in accordance with the provisions of this Agreement, no Borrower Party has
entered into any agreement with, and/or for the benefit of, any Person for the construction of
Planned Improvements.
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(b)
The Design-Build Contract is in full force and effect, Borrower is not in
default in the performance of any of its obligations thereunder (and no event has occurred or
exists that would constitute a default thereunder by Borrower with the passage of time or with
notice), and, to Borrower’s knowledge, Design-Builder is not in default in the performance of
any of its obligations thereunder (and no event has occurred or exists that would constitute a
default thereunder by Design-Builder with the passage of time or with notice).
(c)
The work to be performed by Design-Builder under the Design-Build
Contract is the work called for by the Contract Documents.
6.23
Intentionally Omitted.
6.24 REOC Status. Borrower has, at all times since the date of its first investment,
satisfied all of the requirements set forth in 29 C.F.R. § 2510.3-101(e) to qualify as a “real estate
operating company”, as defined in such regulation.
6.25 Solvency. Borrower has (a) not entered into the transaction contemplated by this
Agreement or executed the Loan Documents with the actual intent to hinder, delay or defraud
any creditor and (b) received reasonably equivalent value in exchange for its obligations under
such Loan Documents. The fair saleable value of Borrower’s assets exceeds and will,
immediately following the making of the Loan, exceed Borrower’s total liabilities, including
subordinated, unliquidated, disputed and contingent liabilities. Borrower’s assets do not and,
immediately following the making of the Loan will not, constitute unreasonably small capital to
carry out its business as conducted or as proposed to be conducted. No petition in bankruptcy
has been filed against Borrower, and Borrower has never made an assignment for the benefit of
creditors or taken advantage of any insolvency act for the benefit of debtors. None of Borrower
or any Member is contemplating either the filing of a Bankruptcy Action by Borrower, and
Borrower has no knowledge of any Person contemplating the filing of any such petition against
Borrower. None of Borrower or Guarantor is contemplating the liquidation of all or a major
portion of its assets or properties.
6.26 Foreign Person. Borrower is not, a “foreign person” within the meaning of
Sections 1445(f)(3) or 7701 of the Code and the related Treasury Department regulations,
including temporary regulations. If Borrower is a “disregarded entity” for U.S. federal income
tax purposes, then the regarded owner, for U.S. federal income tax purposes, of Borrower is not a
“foreign person” within the meaning of Sections 1445(f)(3) or 7701 of the Code.
6.27 Compliance with Law. Borrower and the Property, as applicable, and the
contemplated use thereof and operations thereat, comply with all Legal Requirements and
Property Requirements.
6.28 Use of Property. Upon Final Completion, the Property may be used by Borrower
in compliance with Legal Requirements and Property Requirements for the Intended Use.
6.29 Parking. When the Construction is completed, the Property will contain
sufficient parking spaces as are needed for the Property to comply with all applicable Legal
Requirements, Property Requirements, and the Leases.
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6.30 Borrower Equity. On or prior to the Effective Date, Borrower has caused the
Borrower Minimum Equity to be contributed to or applied in payment of the costs and expenses
incurred by Borrower in connection with Borrower’s acquisition, construction, renovation, and
leasing of the Property (none of which Borrower Equity has been borrowed by Borrower (or any
Member) at any tier or level).
6.31 Use of Funds. All proceeds of the Loan disbursed hereunder shall be used for
business or commercial purposes and that no funds disbursed hereunder shall be used for
personal, family or household purposes.
6.32 No Change in Facts or Circumstances; Disclosure. To Borrower’s knowledge,
there has been no adverse change in any condition, fact, circumstance or event that would make
any information delivered to Lender pursuant to this Article VI inaccurate, incomplete or
otherwise misleading that would reasonably be expected to have a Material Adverse Effect.
6.33 Approved Construction Budget. The amounts and allocations set forth in the
Approved Construction Budget, as it may be amended in accordance with the terms of this
Agreement, present a full, complete and good faith representation of all costs, expenses and fees
required to acquire and develop the Property, complete the Construction Work, and pay interest
on the Loan, the Carry Costs, all other operating costs for the Property and costs in connection
with the leasing of the Property. Borrower has no knowledge of any other such costs, expenses
or fees which are not included within the Approved Construction Budget.
6.34 Feasibility. The Construction Schedule contains an accurate and complete
schedule of construction with respect to the Planned Improvements, subject to Force Majeure
Events, and, to Borrower’s knowledge, no impediments exist to the performance and/or timely
completion of the Planned Improvements in compliance with the Construction Schedule.
6.35 Major Contracts. Borrower has not entered into, and is not bound by, any Major
Contract which continues in existence, except those described on Exhibit D attached hereto and
those entered into after the Effective Date in accordance with the provisions of this Agreement.
Borrower has heretofore delivered to Lender a true, correct, and complete copy of each Major
Contract (including any and all amendments, restatements, assignments, changes, supplements,
alterations, and other modifications thereof). Each Major Contract is in full force and effect,
Borrower is not in default in the performance of any of its obligations thereunder (and no event
has occurred or exists that would constitute a default thereunder by Borrower with the passage of
time or with notice), and, to Borrower’s knowledge, no other party thereto is in default in the
performance of any of its obligations thereunder (and no event has occurred or exists that would
constitute a default thereunder by any other party thereto with the passage of time or with
notice). Neither the execution and delivery of the Loan Documents nor Borrower’s performance
thereunder will adversely affect Borrower’s rights under any Major Contract.
6.36 Sale Agreement. The Sale Agreement is in full force and effect, and constitutes
the entire agreement between Borrower and Buyer with respect to the sale of the Property to
Buyer, and has not be assigned or encumbered (other than pursuant to the Loan Documents), or
modified, amended, or supplemented. Neither Buyer nor Borrower is in default in the
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performance of the terms and provisions of the Sale Agreement. Borrower has heretofore
delivered to Lender true, complete and correct copies of the Sale Agreement, as well as the other
documents, materials and information delivered to Borrower or otherwise obtained by or
prepared for Buyer with respect to the acquisition, construction, development, ownership or
operation of the Property by Buyer. No such documents, materials or information disclose, and
to Borrower’s knowledge, Buyer has not otherwise discovered in the course of its due diligence
investigations, any facts, matters or circumstances that could have a Material Adverse Effect.
Pursuant to the Sale Agreement, Buyer has agreed to purchase the Property from Borrower for a
purchase price of Seventy-Three Million Five Hundred Thousand and No/100 Dollars
($73,500,000.00), subject to adjustment as set forth in the Sale Agreement.
ARTICLE VII
REPORTING COVENANTS
Borrower covenants and agrees that, on and after the date hereof, until payment in full of
the Loan and other amounts payable under the Loan Documents:
7.1
Financial Statements and Other Financial and Operating Information.
Borrower shall keep and maintain or shall cause to be kept and maintained, on a calendar year
basis, in accordance with an Approved Accounting Method, consistently applied, books, records
and accounts reflecting in reasonable detail all of the financial affairs of Borrower and all items
of income and expense in connection with the operation of the Property. Borrower shall deliver
or cause to be delivered to Lender:
(a)
Construction Costs Reports. Until Final Completion and final close-out of
the Approved Construction Budget, and solely to the extent not already delivered to Lender in
connection with a disbursement request within the preceding thirty (30)-day period, Borrower
shall, on or before the date that is twenty-one (21) days after the end of each calendar month,
provide a monthly cost report for the construction of the Construction Work on a cumulative
basis and broken down by line item, showing percentage of completion, the original budgeted
amount, the current budgeted amount pursuant to an updated Approved Construction Budget,
costs incurred to date, projected costs to achieve Final Completion, explanations of any
Approved Construction Budget variances, a summary of any reallocations, a summary of
permitted approved and pending Change Orders, an explanation of any variances from the
approved construction schedule and an updated construction schedule. Such report will be
accompanied by an officer’s certificate stating that the factual statements and summaries in such
report are true, correct and accurate in all material respects and sufficiently complete to provide
Lender a full understanding of their subject matter.
(b)
Monthly Operating Statements; Lease Status Reports. From and after
completion of the core and shell of the Construction Work, within thirty (30) days following the
end of each month during the Loan term, operating statements for the Property for such month in
such form as Lender shall require, together with rent rolls. In addition and not in limitation of
the foregoing, lease status and delinquency reports for the Property in such form as Lender shall
require, with year-to-date operating statements (including a Debt Service Coverage Ratio
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calculation), prior year comparison, and variance to budget reporting, dated as of the last day of
such month, in form and substance satisfactory to Lender, certified by Borrower.
(c)
Intentionally Deleted.
(d)
Annual Financial Statements. Within one hundred twenty (120) days after
the end of each Fiscal Year, annual unaudited financial statements of Borrower and annual
unaudited financial statements of Guarantor, in each case, consisting of a balance sheet, income
statement and cash flow statement, together with related schedules and supporting reports, when
applicable. Such financial statements shall be prepared on the basis of an Approved Accounting
Method, consistently applied, and shall be accompanied by a certificate executed by Borrower or
Guarantor, as applicable, certifying the completeness, fairness and consistency thereof.
(e)
Quarterly Financial Statements. Within forty-five (45) days after the end
of each fiscal quarter (excluding the fourth (4th) fiscal quarter), all the financial information and
certifications required under Section 7.1(d) above as to such fiscal quarter.
(f)
Annual Budget. From and after completion of the core and shell of the
Construction Work, Borrower shall submit to Lender by November 30 of each year the proposed
operating budget for the Property for the succeeding Fiscal Year (“Annual Budget”). Lender
shall have the right to approve each Annual Budget. Each Annual Budget delivered to Lender
and approved by Lender shall hereinafter be referred to as an “Approved Annual Budget”.
Until such time when any Annual Budget has been approved by Lender, the prior Approved
Annual Budget shall apply for all purposes hereunder (with such adjustments as reasonably
determined by Lender to reflect actual increases in Property Taxes, Insurance Premiums and
utility expenses). Neither Borrower nor Property Manager shall change or modify the Approved
Annual Budget without the prior written consent of Lender.
(g)
Intentionally Omitted.
(h)
Quarterly and Annual Net Worth/Liquidity Covenant Compliance
Certificates. Within forty-five (45) days after the end of each fiscal quarter (excluding the fourth
(4th) fiscal quarter), Borrower shall cause Guarantor to provide Lender with an executed
Compliance Certificate evidencing Guarantor’s compliance with the Net Worth/Liquidity
Covenant for the fiscal quarter just ended. Further, within one hundred twenty (120) days after
the end of each Fiscal Year, Borrower shall cause Guarantor to provide Lender with an executed
Compliance Certificate evidencing Guarantor’s compliance with the Net Worth/Liquidity
Covenant for the Fiscal Year just ended.
(i)
Annual Verification. Within thirty (30) days after the end of each Fiscal
Year, Borrower shall certify to Lender that (i) all insurance coverage required by this Agreement
has been purchased by Borrower and is in full force and effect and (ii) all Property Taxes have
been paid in full.
(j)
Knowledge of Event of Default. Promptly upon Borrower obtaining
knowledge of (i) any condition or event which constitutes an Event of Default or Potential
Default, or (ii) any condition or event which has or will have a Material Adverse Effect, written
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notice specifying the nature and period of existence of any such condition or event, or specifying
the notice given or action taken by Borrower and the nature of such claimed Event of Default,
Potential Default or other event or condition, and what action Borrower has taken, is taking and
proposes to take with respect thereto.
(k)
Litigation, Arbitration or Government Investigation. Promptly upon
Borrower obtaining knowledge of (i) the institution of, or threat of, any action, suit, proceeding,
governmental investigation or arbitration against or affecting Borrower, the Property or any other
Collateral not previously disclosed in writing by Borrower to Lender pursuant to this section,
including any eminent domain or other condemnation proceedings affecting the Property; or
(ii) any material development in any action, suit, proceeding, governmental investigation or
arbitration already disclosed, which, in either case, has a Material Adverse Effect, written notice
thereof to Lender and such other information as may be available to it to enable Lender and its
counsel to evaluate such matters.
(l)
Organizational Documents. Pursuant to Section 6.1 above, a true, correct
and complete copy of Borrower’s limited partnership or limited liability company operating
agreement; and promptly following the date thereof, any amendments or modifications thereof
entered into in accordance with and as may be expressly permitted under, this Agreement and the
other Loan Documents.
(m)
Other Information. Such other information, reports, contracts, schedules,
lists, documents, agreements and instruments in the possession or control of Borrower (or which
Borrower has the express right to request) as Lender may from time to time reasonably request
with respect to (i) the Collateral, or (ii) the business, assets, condition (financial or otherwise),
income or prospects of Borrower, including, without limitation, annual information with respect
to cash flow projections, budgets, operating statements (current year and immediately preceding
year), rent rolls, lease expiration reports, leasing status reports, equity funding requirements,
contingent liability summaries, projections of leasing fees and overhead budgets.
7.2
Environmental Notices. Borrower shall immediately notify Lender in writing
after Borrower’s learning thereof of any of the following: (a) a discovery of any Hazardous
Materials on, under or about the Property, other than Hazardous Materials temporarily in transit
through the Property; (b) any knowledge by Borrower that the Property does not comply with
any Hazardous Materials Laws; and/or (c) any claims alleging that Borrower or the Property is
not in compliance with or has violated Hazardous Materials Laws.
ARTICLE VIII
OTHER COVENANTS
Borrower covenants and agrees that, on and after the date hereof, until indefeasible
payment in full of the Loan and other amounts payable under the Loan Documents:
8.1
Existence. Borrower shall at all times maintain its partnership or limited liability
company existence, and shall do or cause to be done all things necessary to preserve and keep in
full force and effect its rights to do business in, and shall remain in good standing in, each
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jurisdiction in which the character of the properties owned or leased by it therein or in which the
transaction of its business makes such qualification necessary.
8.2
Compliance. Borrower shall comply with all covenants, conditions, restrictions,
Leases, easements, reservations, rights and rights-of-way and all applicable Legal Requirements
relating to the Property (including, without limitation, all Hazardous Materials Laws and the
ADA), and Borrower shall obtain and maintain in full force and effect all necessary approvals,
consents, licenses and permits of any Governmental Authority. Borrower shall notify Lender
promptly of any written notice or order that Borrower receives from any Governmental
Authority relating to Borrower’s failure to comply with any such applicable Property
Requirements and/or Legal Requirements. There shall never be committed by Borrower, and
Borrower shall never permit any other Person in occupancy of or involved with the operation or
use of the Property to commit any act or omission affording any Governmental Authority the
right of forfeiture against the Property or any part thereof or any monies paid in performance of
Borrower’s obligations under any of the Loan Documents. Borrower hereby covenants and
agrees not to commit, permit or suffer to exist any act or omission affording such right of
forfeiture.
8.3
Payment of Property Taxes, Assessments and Charges. Except to the extent
that Lender is obligated to pay Property Taxes and insurance premiums from the Property Tax
Account and Insurance Account pursuant to the terms of Article X, Borrower shall pay all
Property Taxes and insurance premiums with respect to itself and the Property prior to
delinquency thereof. Borrower may, at its expense, after prior notice to Lender, contest by
appropriate proceedings conducted in good faith and with due diligence, the validity or
application of any Legal Requirements or Property Taxes and may withhold payment of the same
pending such proceedings if permitted by law, as long as: (a) in the case of any Property Taxes,
such proceedings shall suspend the collection thereof from the Property; (b) neither the Property
nor any part thereof or interest therein will be sold, forfeited or lost if Borrower pays the amount
or satisfies the condition being contested, and Borrower would have the opportunity to do so, if
Borrower fails to prevail in such contest; (c) Lender would not, by virtue of such permitted
contest, be reasonably be expected to be exposed to any risk of civil or criminal liability, and
neither the Property nor any part thereof or any interest therein would be subject to the
imposition of any Lien for which Borrower has not furnished additional security as provided in
clause (d) below, as a result of the failure to comply with any Legal Requirement of such
proceeding which would not be released if Borrower pays the amount or satisfies the condition
being contested, and Borrower would have the opportunity to do so if Borrower fails to prevail in
the contest; and (d) Borrower shall have furnished to Lender additional security in respect of the
claim being contested or the loss or damage that may result from Borrower’s failure to prevail in
such contest in such amount as may be requested by Lender, but in no event less than one
hundred twenty-five percent (125%) of the amount of such claim.
8.4
Books and Records. Borrower shall: (a) maintain full and complete books of
account and other records reflecting the results of its operations in accordance with an Approved
Accounting Method, consistently applied; and (b) permit Lender and its agents, at any time and
from time to time, upon notice reasonable under the circumstances, which may be written or oral,
to inspect and copy all of such books and records. Lender shall have the right, at Borrower’s
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sole cost and expense, to audit Borrower’s books and records from time to time; provided, that, if
no Event of Default exists, Lender shall not perform such audit more than once in each twelve
(12) consecutive calendar month period.
8.5
Entry and Inspection. Lender and its authorized representatives shall, at all
times, upon notice reasonable under the circumstances, which may be written or oral (except in
the case of exigent circumstances or during the existence of a Potential Default or Event of
Default, in which case no prior notice need be given), have the right of entry and free access to
the Property to inspect the Property for any purpose including, without limitation, the evaluation
of the existence, location, nature and magnitude of any Hazardous Materials, and Borrower’s
compliance with Hazardous Materials Laws. Such entry shall be undertaken so as to minimize
any unreasonable interference with Borrower’s construction of any Planned Improvements and
tenants’ use of the Property to the extent reasonably possible and shall be subject to the rights of
the tenants under the Leases.
8.6
Management of the Property; Leasing of the Property.
(a)
Management of the Property. Not later than Substantial Completion, the
Property shall be managed at all times by a Lender-approved Property Manager pursuant to a
Lender-approved Property Management Agreement unless terminated as provided in the Loan
Documents. In no event shall the property management fees payable to Property Manager under
the Property Management Agreement exceed three percent (3.0%) of the Gross Operating
Income. Borrower shall diligently perform all terms and covenants of the Property Management
Agreement. Borrower shall not: (i) surrender, terminate, cancel, amend, supplement, alter, or
otherwise modify the Property Management Agreement; (ii) enter into any other agreement
relating to the management or operation of the Property with Property Manager or any other
Person; (iii) consent to the assignment by Property Manager of its interest under the Property
Management Agreement; or (iv) waive or release any of its rights and remedies under the
Property Management Agreement, in each case, without the prior written consent of Lender. If
(A) an Event of Default exists, (B) the Property Manager shall become the subject of a
Bankruptcy Action, (C) a default occurs under the Management Agreement on the part of either
Borrower or Property Manager, beyond any applicable grace and cure periods, or (D) Property
Manager shall commit gross negligence, fraud, illegal acts, or willful misconduct, Borrower
shall, at the request of Lender, terminate the Property Management Agreement and replace
Property Manager with a replacement property manager approved by Lender. If at any time
Lender consents to the appointment of a new property manager, such new property manager and
Borrower shall, as a condition to Lender’s consent, execute an Assignment of Management
Agreement.
(b)
Intentionally Deleted.
8.7
Use of Proceeds. Borrower shall use the proceeds of the Loan solely for the
payment of expenses set forth in the Approved Budget (or as otherwise approved by Lender in its
sole discretion).
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8.8
Additional Liabilities. Without the prior written consent of Lender, which may
be granted or withheld in Lender’s sole and absolute discretion: (a) Borrower shall not (directly
or indirectly) incur any indebtedness with respect to Borrower other than indebtedness that is
Permitted Indebtedness; (b) Borrower shall not cause or permit any additional Liens to encumber
or otherwise affect title to the Property or the other Collateral other than Permitted
Encumbrances; (c) Borrower shall not enter into any PACE Loan; and (d) Borrower shall not
cause or permit any partner, member or other equity interest holder in Borrower to mortgage,
pledge, hypothecate or encumber such Person’s partnership, membership or other equity interest
in Borrower.
8.9
Leases.
(a)
Borrower shall: (i) observe and perform all of the material obligations
imposed upon the lessor under the Leases; (ii) promptly send copies to Lender of all notices of
default that Borrower shall send or receive under any Lease; (iii) promptly notify Lender of any
tenant under a Lease at the Property which has vacated, or has given Borrower written notice of
its intention to vacate, the premises (or any portion thereof) leased to such tenant pursuant to the
applicable Lease; and (iv) enforce the terms, covenants and conditions in the Leases to be
observed by tenants in accordance with commercially reasonable practices for properties similar
to the Property. Borrower shall obtain the prior written approval of Lender, which approval may
be granted or withheld by Lender in Lender’s sole and absolute discretion, for any Lease,
amendment thereto, assignment thereof, or subletting thereunder. Without limiting Lender’s
right to approve all Leases, all Leases shall be with creditworthy tenants as determined by
Lender.
(b)
All Leases require Lender’s prior written approval at Borrower’s expense
(including reasonable legal fees and expenses). Borrower shall promptly deliver to Lender a
copy of each Lease entered into after the Effective Date, together with written certification from
Borrower confirming that (A) the copy delivered is a true, complete and correct copy of such
Lease, and (B) Borrower has satisfied all conditions of this Section 8.9.
(c)
Borrower shall not (i) make any assignment or pledge of any Lease or
Rents to anyone other than Lender until the Indebtedness is paid in full; (ii) collect any Rents
under the Leases more than one (1) month in advance (except that Borrower may collect in
advance such security deposits as are permitted pursuant to applicable Legal Requirements and
are commercially reasonable in the prevailing market); or (iii) enter into, amend or terminate any
Lease, other than pursuant to the commercially reasonable enforcement of Borrower’s rights
under any such Lease if the lessee thereunder is in material monetary default of such Lease.
(d)
Borrower shall establish and maintain with a national financial institution
acceptable to Lender an additional demand deposit account in the name of Borrower (together
with any successor account, the “Security Deposit Account”). Borrower shall promptly deliver
to such Security Deposit Account a sum representing the aggregate liability of Borrower as of
such date for security deposits made by tenants at the Property. From and after the Effective
Date, Borrower shall promptly deliver to the Security Deposit Account (i) any cash security
deposits thereafter received from tenants at the Property, and (ii) the proceeds of any letter of
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credit posted by any tenant in lieu of a cash security deposit arising at such time, if any, as draws
are made against such letter of credit. Interest on each tenant security deposit shall be accounted
for by Lender in cases where interest is required to be paid to tenants. So long as no Event of
Default or Potential Default under the Loan Documents exists, all sums in the Security Deposit
Account shall be utilized by Borrower in such Security Deposit Account to be used for the
refund of the tenant security deposits which have been deposited in the Security Deposit Account
or to pay Borrower to the extent Borrower is then entitled to retain any portion of such tenant
security deposits pursuant to the terms of the tenant leases. Any letter of credit or other
instrument that Borrower receives in lieu of a cash security deposit under any Lease shall, if
permitted pursuant to applicable Legal Requirements, name Lender as payee or mortgagee
thereunder (or, at Lender’s option, be fully assignable to and held by Lender).
(e)
Upon request by Lender, Borrower shall obtain from each tenant at the
Property (whether under a new or existing Lease) a Tenant Estoppel Certificate and/or a
Subordination Agreement.
(f)
Within ten (10) months after the Effective Date (subject to Force Majeure
Events), Plastic Express shall have accepted the Building and taken occupancy of the Building
pursuant to the Plastic Express Lease.
8.10 Limitations on Distributions. During the existence of an Event of Default,
(a) Borrower shall not distribute any money or other property to any Member or other Equity
Interest holder in Borrower, whether in the form of earnings, income or other proceeds from the
Property; (b) Borrower shall not repay any principal or interest on any loan or other advance
made to Borrower by any Member in Borrower; and (c) Borrower shall not loan or advance any
funds to any such Member in Borrower.
8.11 Subdivision Maps; Zoning; Joint Assessment. Borrower shall not record any
final map, parcel map, lot line adjustment or other subdivision map of any kind covering any
portion of the Property (each, a “Subdivision Map”), or otherwise subdivide the Property in any
way, in each and every case, only with Lender’s prior written consent, which consent may be
granted or withheld in Lender’s sole and absolute discretion. Without Lender’s prior written
consent, Borrower shall not materially change the Property’s use or initiate, join in or consent to
any (a) change in any private restrictive covenant, zoning ordinance or other public or private
restrictions limiting or defining the Property’s uses or any part thereof (including filing a
declaration of condominium, map or any other document having the effect of subjecting the
Property to the condominium or cooperative form of ownership), except those necessary in
connection with the uses permitted pursuant to this Agreement; or (b) joint assessment of the
Property with any other real or personal property.
8.12 ERISA Compliance. Borrower shall take or refrain from taking, as the case may
be, such actions as may be necessary to cause the representations and warranties in Section 6.19
to remain true and correct at all times throughout the term of the Loan.
8.13 HVCRE. If following the closing of the Loan, Borrower’s equity in the Property
satisfies the 15% Capital Requirement (as defined below), then thereafter, Borrower shall
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maintain (and shall be contractually obligated to maintain during the entire term of the Loan) the
15% Capital Requirement at all times prior to the Loan being indefeasibly paid in full. The
“15% Capital Requirement” means capital equal to at least fifteen percent (15%) of the “as
complete” appraised value of the Property and Improvements as determined by the Appraisal
obtained by Lender in connection with the closing of the Loan. Borrower expressly covenants
and agrees that, notwithstanding any provision herein to the contrary, no distributions of any
kind or nature (including, without limitation, with respect to (a) contributed capital, (b) internally
generated capital, and/or (c) any other proceeds or amounts received on account of any sale or
refinancing of the Property or any portion thereof) shall be made or otherwise paid by Borrower
to any Person, including, without limitation, the respective members or direct or indirect owners
thereof, either (i) at any time prior to the satisfaction of the 15% Capital Requirement or (ii) after
the satisfaction of the 15% Capital Requirement (if at all) if, after giving effect to any such
distribution, such distribution would cause the 15% Capital Requirement to no longer be
satisfied, as reasonably determined by Lender.
8.14
Transfers.
(a)
Except as may be expressly permitted pursuant to this Section 8.14,
Borrower shall not Transfer the Property, any portion thereof or any interest therein, or allow a
Transfer of any direct or indirect Equity Interests in Borrower or Guarantor, in each case,
without the prior written consent of Lender. With respect to any limited liability company, the
division of any assets and liabilities of such entity among one or more new or existing entities
shall be deemed a Transfer subject to this Section. Except as may be expressly permitted
pursuant to this Section 8.14, Borrower shall not cause or permit any direct or indirect Member
or other Equity Interest holder in Borrower or any Guarantor to, directly or indirectly, Transfer,
convey, assign, mortgage, pledge, hypothecate, encumber, alienate or grant a security interest in
the partnership interest, membership interest or other equity interest of such partner, Member,
other Equity Interest holder in Borrower or Guarantor without Lender’s prior written consent.
(b)
Subject to Section 8.14(c), the following Transfers shall be permitted
without Lender’s consent (each, a “Permitted Transfer”):
(i)
provided that no Event of Default shall then exist, a Transfer (other
than a pledge, hypothecation, assignment or other encumbrance) of a direct or indirect
Equity Interest in Borrower or Guarantor, provided that:
(A)
Borrower shall give Lender notice of such Transfer
together with copies of all instruments effecting such Transfer not less than thirty
(30) days prior to the date of such Transfer;
(B)
Immediately following such Transfer, the Key Individual
shall continue to Control Borrower and Guarantor and own, directly or indirectly,
not less than fifty-one percent (51%) of the Equity Interest of Borrower and
Guarantor;
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(C)
Borrower shall continue to comply with all the special
purpose entity provisions set forth in Section 8.16 below, and Borrower shall
continue to be a Delaware single member limited liability company; and
(D)
The Property shall continue to be managed by a Property
Manager reasonably acceptable to Lender in accordance with this Agreement.
(ii)
a Transfer (other than a pledge, hypothecation, assignment or other
encumbrance) of any indirect interest in Borrower or Guarantor that occurs by devise or
bequest or by operation of law upon the death of a natural person that was the holder of
such interest, provided that no Event of Default as set forth in Section 11.1(k) occurs as a
result of such Transfer.
(c)
Irrespective of whether any Transfer would result in a change in Control
of Borrower or Guarantor, any Transfer pursuant to which a Person (individually or together
with its Affiliates) acquires twenty-five percent (25%) or more of the direct or indirect Equity
Interests in and/or rights to distributions from Borrower or Guarantor (unless such Person owned
twenty-five percent (25%) or more of the direct or indirect Equity Interests in Borrower or
Guarantor, as applicable, as of the Effective Date) shall be subject to the following conditions:
(1) Borrower shall give Lender not less than thirty (30) days’ prior written notice of such
Transfer (except if such Transfer is the result of the death of a natural person, in which case
Borrower shall give Lender written notice within ten (10) Business Days thereafter); (2) Lender
shall have determined that the Person to whom such interest is transferred is a Qualified
Transferee; and (3) Borrower shall reimburse Lender for all reasonable out-of-pocket expenses
actually incurred by Lender in connection with such Transfer.
8.15 Liens. Borrower shall not create, incur, assume or permit to exist any Lien on
any direct or indirect interest in Borrower or any portion of the Property or the Collateral, except
for the Permitted Encumbrances. After prior notice to Lender, Borrower, at its own expense,
may contest by appropriate legal proceeding, promptly initiated and conducted in good faith and
with due diligence, the amount or validity of any Liens, provided that (a) no Event of Default has
occurred and remains uncured; (b) such proceeding shall be permitted under and be conducted in
accordance with all applicable Legal Requirements; (c) none of the Collateral, the Property nor
any part thereof or interest therein will be in danger of being sold, forfeited, terminated,
cancelled or lost; (d) Borrower shall promptly upon final determination thereof pay the amount
of any such Liens, together with all costs, interest and penalties which may be payable in
connection therewith; (e) to insure the payment of such Liens, if not already fully covered by a
payment bond in accordance with the requirements of this Agreement, Borrower shall deliver to
Lender either (i) cash, or other security as may be approved by Lender, in an amount equal to
one hundred twenty-five percent (125%) of the contested amount, or (ii) a payment bond in an
amount equal to one hundred percent (100%) of the contested amount from a surety acceptable
to Lender in its reasonable discretion; (f) failure to pay such Liens will not subject Lender to any
civil or criminal liability; (g) such contest shall not affect the ownership, use or occupancy of the
Property; and (h) Borrower shall, upon request by Lender, give Lender prompt notice of the
status of such proceedings and/or confirmation of the continuing satisfaction of the conditions set
forth in the foregoing clauses (a) through (h). Lender may pay over any such cash or other
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security held by Lender to the claimant entitled thereto at any time when, in the reasonable
judgment of Lender, the entitlement of such claimant is established by a court of competent
jurisdiction or the Collateral, the Property (or any part thereof or interest therein) shall be in
imminent danger of being sold, forfeited, terminated, cancelled or lost or there shall be any
danger of the Lien of the Security Instrument being primed by any related Lien. This Section
8.15 is inapplicable to Liens that are mechanic’s liens or stop notices, which Liens are governed
by Section 4.2.
8.16 Special Purpose Entity. Borrower shall not (a) fail to be a Special Purpose
Entity; (b) remove or replace any Independent Director or Independent Manager except for
Cause, and in any event not without providing at least five (5) Business Days’ advance written
notice thereof to Lender; (c) to the fullest extent permitted by applicable Legal Requirements,
engage in any dissolution, liquidation, or consolidation or merger with or into any other business
entity; or (d) modify, amend, waive or terminate its organizational documents.
8.17 Borrower Equity. Borrower shall cause the Borrower Minimum Equity to be
contributed to or applied in payment of the costs and expenses incurred by Borrower in
connection with Borrower’s acquisition, construction, and leasing of the Property (none of which
shall be removed as Borrower’s equity from the Property), including the payment to Seller of a
portion of the purchase price payable for the Property, prior to the disbursement by Lender of
any proceeds of the Loan.
8.18 Maintenance; Waste; Alterations. Borrower shall at all times keep the Property
in good repair, working order and condition, except for reasonable wear and use. Except for the
Construction Work, Borrower shall obtain Lender’s prior written consent to any alterations to
any Improvements, which consent shall not be unreasonably withheld, except with respect to any
alterations to any Improvements which may have a material adverse effect on Borrower’s
financial condition, the value of the Property or any portion thereof or the net operating income.
Notwithstanding the foregoing, Lender’s consent shall not be required in connection with any
alterations that (a) will not have a material adverse effect on Borrower’s financial condition, the
value of the Property or any portion thereof or the Net Operating Income; provided that such
alterations (b)(i) are either work performed pursuant to the terms of any Lease approved in
accordance with the terms hereof, or the costs for such alterations are adequately covered in the
current Approved Budget, (ii) do not adversely affect any structural component of any
Improvements, any utility or HVAC system contained in any Improvements or the exterior of
any building constituting a part of any Improvements and (iii) the aggregate cost thereof does not
exceed Two Hundred Thousand and No/100 Dollars ($200,000.00) (the “Threshold Amount”),
or (c) are performed in connection with Restoration after the occurrence of a Casualty in
accordance with the terms and provisions of this Agreement.
8.19 Assessments and Community Facilities Districts. Without Lender’s prior
written consent, Borrower shall not cause or suffer to become effective or otherwise consent to
the formation of any assessment district or community facilities district which includes all or any
part of the Property and Improvements pursuant to: (a) the Mello-Roos Community Facilities
Act of 1982; (b) the Municipal Improvement Act of 1913; or (c) any other comparable or similar
statute or regulation. Nor shall Borrower cause or otherwise consent to the levying of special
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taxes or assessments against the Property by any such assessment district or community facilities
district.
8.20
Interest Rate Protection Agreement.
(a)
At all times during the term of the Loan, if LIBOR (or if LIBOR is no
longer in effect, the then-equivalent Benchmark) reaches or exceeds 75 basis points, Borrower
shall, within ten (10) Business Days thereof, (i) purchase and maintain in effect an Interest Rate
Protection Agreement acceptable to Lender in its sole and absolute discretion, with a
counterparty (“Counterparty”) reasonably acceptable to Lender, which shall have been assigned
to Lender in writing pursuant to an Assignment of Interest Rate Protection Agreement, which
shall name Lender as payee thereunder and otherwise be in a form acceptable to Lender, and (ii)
deliver required legal opinions from the Counterparty and any guaranties required from any
credit support party in order to satisfy the required ratings for the Counterparty. Such
Counterparty shall have a Minimum Counterparty Rating at the inception of the Interest Rate
Protection Agreement. Upon the occurrence of a downgrade or withdrawal of the rating of such
Counterparty below “A-” by S&P or “A3” by Moody’s, Borrower shall either (i) cause
Counterparty to post collateral equal to the mark-to-mark value of the Interest Rate Protection
Agreement, (ii) cause Counterparty to deliver a guaranty of its obligations from an entity with a
Minimum Counterparty Rating, or (iii) replace (or cause Counterparty to replace) the Interest
Rate Protection Agreement with an Interest Rate Protection Agreement in form and substance
substantially the same as the Interest Rate Protection Agreement then in effect or in such other
form as may be satisfactory to Lender (and, in all events, meeting the requirements set forth in
this Section 8.20) from a Counterparty having a Minimum Counterparty Rating, in either case
not later than ten (10) Business Days following receipt of notice from Lender of such downgrade
or withdrawal.
(b)
If a Benchmark Replacement occurs:
(i)
within thirty (30) Business Days of such Benchmark Replacement,
either (A) Borrower shall deliver to Lender an Benchmark Index Rate Cap Agreement, or (B) if
Lender determines (which determination will be based on market customs and/or proposals of
industry associations) that an Benchmark Index Rate Cap Agreement is not an appropriate
instrument to properly hedge the variable rate risk attributable to the Benchmark or if a
Benchmark Index Rate Cap Agreement is not generally commercially available from
Counterparties, then Borrower shall purchase such other hedging product as is reasonably
determined by Lender and is available at commercially reasonable rates;
(ii)
immediately and automatically upon such election, the references
to “Interest Rate Protection Agreement” and related provisions in this Agreement (including,
without limitation, requirements to purchase the same pursuant to the provisions set forth in
Section 2.13) and the other Loan Documents shall be deemed modified by terms specified by
Lender to account for the new Benchmark and the Benchmark Index Rate Cap Agreement or the
alternative hedging product reasonably determined by Lender pursuant to the preceding clause
(i), as applicable.
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8.21 Patriot Act. Borrower shall comply at all times with the Patriot Act and all
applicable requirements of Governmental Authorities having jurisdiction of Borrower and the
Property, including those relating to money laundering and terrorism. Lender shall have the right
to audit Borrower’s compliance with the Patriot Act and all applicable requirements of
Governmental Authorities having jurisdiction of Borrower and the Property, including, without
limitation, those relating to money laundering and terrorism. If Borrower fails to comply with
the Patriot Act or any such requirements of Governmental Authorities, then Lender may, at its
option, cause Borrower to comply therewith and any and all reasonable out-of-pocket costs and
expenses actually incurred by Lender in connection therewith shall be secured by the Security
Instrument and the other Loan Documents and shall be immediately due and payable.
8.22 Use of Property.
Intended Use.
The Property shall be used by Borrower exclusively for
8.23 Affiliate Agreements. Other than the Approved Affiliate Agreements existing as
of the date hereof, Borrower shall not enter into any other Affiliate Agreement without Lender’s
prior written consent. Borrower shall not modify or amend any Approved Affiliate Agreement
(whether existing on the date hereof or hereafter approved by Lender) without Lender’s prior
written consent.
8.24
Intentionally Deleted.
8.25 Sale Agreement. Borrower shall: (i) observe and perform all of the material
obligations imposed upon Borrower under the Sale Agreement; and (ii) promptly send copies to
Lender of all notices that Borrower shall send or receive under the Sale Agreement. Borrower
shall not: (i) surrender, terminate, cancel, amend, supplement, alter, or otherwise modify the Sale
Agreement; (ii) enter into any other agreement relating to the sale of the Property with Buyer or
any other Person; (iii) consent to the assignment by Buyer of its interest under the Sale
Agreement; or (iv) waive or release any of its rights and remedies under the Sale Agreement, in
each case, without the prior written consent of Lender. If at any time, Borrower is entitled to the
Earnest Money Deposit pursuant to the Sale Agreement, Borrower shall, within three (3)
Business Days thereafter, provide written notice to Lender of the same and shall direct Sale
Agreement Escrow Agent to immediately deliver the Earnest Money Deposit to Lender, which
Lender shall apply (and Borrower hereby authorizes Lender to apply) as a prepayment of the
Loan in accordance with Section 2.17(b).
ARTICLE IX
INTENTIONALLY DELETED
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ARTICLE X
CASH MANAGEMENT
10.1
Property Cash Flow Allocation.
(a)
Provided no Cash Management Period exists, Borrower shall cause all
Gross Operating Income to be applied on a monthly basis for the following purposes and in the
following order of priority:
(i)
First, to the Property Tax Account, funds sufficient to make the
required payments of Property Tax Funds if and as required under Section 10.3.
(ii)
Second, to the Insurance Account, funds sufficient to make any
required payments of Insurance Funds if and as required under Section 10.4.
(iii)
Third, to Lender, funds sufficient to pay Debt Service due on such
Payment Date.
(iv)
Fourth, to Lender, funds sufficient to pay any other amounts then
due and payable by Borrower under the Loan Documents.
(v)
Lastly, all amounts remaining after payment of the amounts set
forth in the foregoing clauses (i) through (iv) above (the “Available Cash”) disbursed to
Borrower.
(b)
[Reserved]
(c)
Subject to applicable notice and/or cure periods hereunder, if any, the
failure of Borrower to make all of the payments required to be made to Lender under the Loan
Documents in full on each Payment Date shall constitute an Event of Default, provided that, if
adequate funds are available in the applicable Reserve Account for such payments, the failure to
make such payment from such applicable Reserve Account shall not constitute an Event of
Default notwithstanding any contrary provision of the Loan Documents, and provided further
that Borrower’s obligation to fund any increased monthly amounts into any Account shall be
subject to Borrower’s receipt of written notice from Lender regarding such increased monthly
amounts as described in this Article X.
(d)
Notwithstanding anything to the contrary contained in this Article X,
during the existence of an Event of Default, Lender, at its option, may apply any Gross
Operating Income then in the possession of Lender or Collection Bank (including any funds on
deposit in any Cash Management Account) to the payment of the Loan in such order, proportion
and priority as Lender may determine in its sole and absolute discretion. Lender’s right to
withdraw and apply any of the foregoing funds shall be in addition to all other rights and
remedies provided to Lender under the Loan Documents.
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10.2
Collection Account; Operating Account.
(a)
On or before the date that is thirty (30) days after the Substantial
Completion Date, Borrower shall establish and thereafter maintain a lockbox account into which
all Gross Operating Income from the Property will be deposited (the “Collection Account”) with
a bank approved by Lender in writing (“Collection Bank”). In connection with establishing
such Collection Account, Borrower shall cause the Collection Bank to execute and deliver an
agreement (as modified or replaced in accordance herewith, a “Collection Account
Agreement”) which provides, among other things, that Borrower shall have access to funds in
the Collection Account until Lender provides written notice to the Collection Bank that an Event
of Default exists, from and after which Borrower’s access to the Collection Account shall cease
and the Collection Bank will remit all amounts contained therein directly into an account
specified from time to time by Lender (the “Cash Management Account”). Within five (5)
Business Days following the establishing of such Collection Account, and concurrently with the
execution of each Lease thereafter, Borrower shall deliver to each tenant at the Property a written
notice (a “Tenant Notice”) instructing that (i) all payments under the Leases shall thereafter be
remitted by them directly to, and deposited directly into, the Collection Account, and (ii) such
instruction may not be rescinded unless and until such tenant receives from Borrower or Lender
a copy of Lender’s written consent to such rescission. Borrower shall send a copy of each such
written notice to Lender and shall redeliver such notices to each tenant until such time as such
tenant complies therewith. Borrower shall cause all cash Gross Operating Income relating to the
Property and all other money received by Borrower or the Property Manager with respect to the
Property to be deposited in the Collection Account by the end of the first Business Day following
Borrower’s or the Property Manager’s receipt thereof.
(b)
Borrower shall maintain at all times an operating account (“Operating
Account”) into which Loan disbursements may be deposited. Borrower shall not permit any
amounts unrelated to the Property to be commingled with amounts on deposit in the Operating
Account and shall cause all amounts payable with respect to Operating Expenses for the Property
to be paid from the Operating Account or the Cash Management Account (to the extent required
or permitted hereunder) and no other account. Borrower shall deliver to Lender each month a
copy of the monthly bank statement related to such Operating Account. So long as no Event of
Default exists, Borrower shall be permitted to withdraw amounts from the Operating Account for
any purpose not prohibited by this Agreement. During the existence of an Event of Default, all
amounts contained in the Operating Account shall be remitted to the Cash Management Account.
10.3
Property Tax Funds.
(a)
From and after the achievement of Substantial Completion, Borrower shall
deposit with Lender on each Payment Date, an amount equal to one-twelfth (1/12th) of the
Property Taxes that Lender estimates will be payable during the next ensuing twelve (12)
months, to accumulate sufficient funds to pay all such Property Taxes at least thirty (30) days
prior to their respective due dates, which amounts shall be transferred into an account established
to hold such funds (the “Property Tax Account”). Amounts deposited from time to time into
the Property Tax Account pursuant to this Section 10.3(a) are referred to herein as the “Property
Tax Funds”. If at any time Lender determines that the Property Tax Funds will not be sufficient
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to pay the Property Taxes, Lender shall notify Borrower of such determination and the monthly
deposits for Property Taxes shall be increased by the amount that Lender estimates is sufficient
to make up the deficiency at least ten (10) days prior to the respective due dates for the Property
Taxes, provided that, if Borrower receives notice of any deficiency after the date that is ten (10)
days prior to the date that Property Taxes are due, then Borrower will deposit with or on behalf
of Lender such amount within one (1) Business Day after its receipt of such notice.
(b)
Lender shall release Property Tax Funds in the Property Tax Account for
payment of Property Taxes. In making any payment relating to Property Taxes, Lender may do
so according to any bill, statement or estimate procured from the appropriate public office (with
respect to Property Taxes) without inquiry into the accuracy of such bill, statement or estimate or
into the validity of any tax, assessment, sale, forfeiture, tax lien or title or claim thereof. If the
amount of the Property Tax Funds shall exceed the amounts due for Property Taxes and provided
that no Cash Management Period exists, Lender shall, in its sole discretion, return any excess to
Borrower or credit such excess against future payments to be made to the Property Tax Funds.
Any Property Tax Funds remaining in the Property Tax Account after the Loan has been
indefeasibly paid in full shall be returned to Borrower.
10.4
Insurance Funds.
(a)
From and after the achievement of Substantial Completion, Borrower shall
deposit with Lender, on each Payment Date, an amount equal to one-twelfth (1/12th) of the
insurance premiums that Lender estimates will be payable for the renewal of the coverage
afforded by the Policies upon the expiration thereof, to accumulate sufficient funds to pay all
such insurance premiums at least thirty (30) days prior to the expiration of the Policies, which
amounts shall be transferred into an account established to hold such funds (the “Insurance
Account”). Amounts deposited from time to time into the Insurance Account pursuant to this
Section 10.4(a) are referred to herein as the “Insurance Funds”. If at any time Lender
determines that the Insurance Funds will not be sufficient to pay the insurance premiums, Lender
shall notify Borrower of such determination and the monthly deposits for insurance premiums
shall be increased by the amount that Lender estimates is sufficient to make up the deficiency at
least thirty (30) days prior to expiration of the Policies.
(b)
Lender shall release Insurance Funds in the Insurance Account for the
purpose of timely payment of insurance premiums, provided that Borrower shall furnish Lender
with all bills, invoices and statements for the insurance premiums for which such funds are
required at least thirty (30) days prior to the date on which such charges first become payable. In
making any payment relating to insurance premiums, Lender may do so according to any bill,
statement or estimate procured from the insurer or its agent, without inquiry into the accuracy of
such bill, statement or estimate. If the amount of the Insurance Funds shall exceed the amounts
due for insurance premiums and provided that no Cash Management Period exists, Lender shall,
in its sole discretion, return any excess to Borrower or credit such excess against future payments
to be made to the Insurance Funds. Any Insurance Funds remaining in the Insurance Account
after the Loan has been indefeasibly paid in full shall be returned to Borrower.
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(c)
Notwithstanding anything to the contrary contained in this Section 10.4, if
an Acceptable Blanket Policy is in effect with respect to the Policies required pursuant to
Article V, and no Event of Default has occurred and is continuing, deposits into the Insurance
Account required for insurance premiums pursuant to Section 10.3(a) above shall be suspended
to the extent that insurance premiums relate to such Acceptable Blanket Policy.
10.5
Intentionally Deleted.
10.6
Intentionally Deleted.
10.7
Intentionally Deleted.
10.8
Intentionally Deleted.
10.9 Balancing Funds. Any payment made by Borrower to render the Loan InBalance shall be deposited into an account established to hold such funds (the “Balancing
Account”). Amounts deposited from time to time in the Balancing Account are referred to
herein as the “Balancing Funds”. Borrower may, from time to time, request a disbursement
from the Balancing Account to pay for Approved Uses. Such funds will be disbursed subject to
the satisfaction of the conditions to disbursement applicable to Loan disbursements for the same
Approved Uses (modified, as necessary, to reflect a requested disbursement from a reserve
account as contrasted with a disbursement of Loan funds).
10.10 Security Interest. As security for payment of the Loan and the performance by
Borrower of all other terms, conditions and provisions of the Loan Documents, Borrower hereby
pledges and assigns to Lender, and grants to Lender a security interest in, all Borrower’s right,
title and interest in and to all Gross Operating Income and in and to all payments to or monies
held in the Accounts. Borrower hereby grants to Lender a continuing security interest in, and
agrees to hold in trust for the benefit of Lender, all Rents in its possession prior to the
(a) payment of such Gross Operating Income to Lender, or (b) deposit of such Gross Operating
Income into the Collection Account. Borrower shall not, without obtaining the prior written
consent of Lender, further pledge, assign or grant any security interest in any Account, or permit
any Lien to attach thereto (other than any Lien held by the depository holding such Account), or
permit any levy to be made thereon, or consent to any UCC financing statements with respect
thereto, except those naming Lender as the secured party, to be filed with respect thereto. This
Agreement is, among other things, intended by the parties to be a security agreement for
purposes of the Uniform Commercial Code. Upon the occurrence and during the continuance of
an Event of Default, Lender may apply any sums in any Account in any order and in any manner
as Lender shall elect in Lender’s discretion without seeking the appointment of a receiver and
without adversely affecting the rights of Lender to foreclose the Lien of the Security Instrument
or exercise its other rights under the Loan Documents. Accounts shall not constitute trust funds
and may be commingled with other monies held by Lender. Upon indefeasible repayment in full
of the Loan, all remaining funds in the Accounts, if any, shall be promptly disbursed to
Borrower.
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ARTICLE XI
EVENTS OF DEFAULT AND REMEDIES
11.1 Events of Default. The occurrence of any one or more of the following,
whatever the reason therefor, shall constitute an Event of Default hereunder:
(a)
Payment. Subject to Section 10.1(c), Borrower shall fail to pay any
accrued interest on the Loan, any portion of the principal amount of the Loan, or any other
amount payable by Borrower under this Agreement or the other Loan Documents within five (5)
days following the date when and as the same shall become due and payable, provided that the
foregoing grace period shall not apply to amounts payable by Borrower on the Maturity Date.
(b)
Other Covenants. Borrower shall fail to perform any other covenant or
agreement to be performed by Borrower under this Agreement or the other Loan Documents, and
such failure shall continue for more than fifteen (15) days after written notice thereof is given to
Borrower by Lender (provided that such fifteen (15)-day cure period shall not apply to any of the
occurrences set forth in clauses (a), or (c) through (cc), inclusive, of this Section 11.1).
(c)
Liens, Attachments, Condemnation. (i) The recording of any mechanic’s
lien or claim of lien against the Property if such lien or claim of lien is not removed or bonded
and contested in accordance with Section 4.2 (entitled Liens and Stop Notices) or Section 8.15
(entitled Liens) hereof; (ii) the condemnation, seizure or appropriation of, or the occurrence of a
material uninsured casualty with respect to, any material portion of the Property; or (iii) the
sequestration or attachment of, or any levy or execution upon, any of the Property, any other
Collateral, or any substantial portion of the other assets of Borrower, which sequestration,
attachment, levy or execution is not released, expunged or dismissed prior to the earlier of sixty
(60) days or the sale of the assets affected thereby.
(d)
Representations and Warranties. Any representation or warranty made by
Borrower in this Agreement or any of the other Loan Documents or in any certificate, agreement,
instrument or other document made or delivered pursuant to or in connection with any of the
Loan Documents shall have been false or misleading in any material respect when made.
(e)
Dissolution. Borrower or Guarantor is terminated, dissolved, divided, or
liquidated; or all or substantially all of the assets of Borrower or Guarantor are sold or otherwise
transferred or disposed of; or Borrower or Guarantor is converted to another form of
incorporated or unincorporated business or entity without Lender’s prior written consent.
(f)
Insolvency. (i) Borrower or Guarantor is the subject of an order for relief
by any bankruptcy court, or is unable or admits in writing its inability to pay its debts as they
mature, or makes an assignment for the benefit of creditors; (ii) Borrower or Guarantor applies
for or consents to the appointment of any receiver, trustee, custodian, conservator, liquidator,
rehabilitator or similar officer for it or for all or any part of its property; or any receiver, trustee,
custodian, conservator, liquidator, rehabilitator or similar officer is appointed without the
application or consent of Borrower or Guarantor, as applicable, and the appointment continues
undischarged or unstayed for thirty (30) days; (iii) Borrower or Guarantor institutes or consents
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to any bankruptcy, insolvency, reorganization, arrangement, readjustment of debt, dissolution,
custodianship, conservatorship, liquidation, rehabilitation or similar proceedings relating to it or
to all or any part of its property under the applicable Legal Requirements of any jurisdiction; or
any similar proceeding is instituted without the consent of Borrower or Guarantor, as applicable,
and continues undismissed or unstayed for ninety (90) days; or (iv) any judgment, writ,
attachment, execution or similar process is issued or levied against all or any part of the property
of Borrower or Guarantor and is not released, vacated or fully bonded within sixty (60) days
after its issue or levy.
(g)
Property Taxes. Any failure to pay Property Taxes prior to delinquency as
required by Section 8.3 (entitled Payment of Property Taxes, Assessments and Charges).
(h)
Insurance Policies. If the Policies are not kept in full force and effect, or if
copies of the certificates evidencing the Policies (or certified copies of the Policies if requested
by Lender) are not delivered to Lender within thirty (30) days after written request therefor.
(i)
Other Default. The occurrence of any other event, circumstance or
condition that constitutes an “Event of Default” under any of the other Loan Documents or a
breach or default under any of the Guaranty Documents, beyond the expiration of any applicable
grace or cure periods, if any, specified for such breach or default therein, as the case may be.
(j)
Prohibited Contracts. Borrower shall fail to cure any breach or default of
Section 4.7 (Major Contracts) that is not cured within five (5) Business Days after notice from
Lender.
(k)
Retirement, Incapacity, Withdrawal or Death. In Lender’s sole discretion,
the retirement, death or incapacity of the Key Individual (as hereinafter defined) or the
withdrawal of the Key Individual from active participation in Borrower’s business activities;
provided, that, the death or incapacity of the Key Individual (as hereafter defined) shall not be an
Event of Default hereunder if (i) within fifteen (15) days of such death or incapacity Borrower
identifies a replacement Key Individual, acceptable to Lender in its sole discretion, to replace
such deceased or incompetent Key Individual, and (ii) within five (5) days of Lender’s approval,
such replacement Key Individual is put in the same position of Control over Borrower and
Guarantor as the previous Key Individual, with active participation in Borrower’s business
activities. For purposes of this Agreement, “Key Individual” means John Knox Porter, Jr., or
any replacement approved by Lender pursuant to this Section 11.1(k).
(l)
Certain Covenants. Borrower shall fail to strictly comply with the
provisions of Section 3.2(b)(v) (entitled In-Balance), Section 4.5 (entitled Plans and
Specifications; Change Orders), Section 8.8 (entitled Additional Liabilities), Section 8.12
(entitled ERISA Compliance), Section 8.14 (entitled Transfers), or Section 8.16 (entitled Special
Purpose Entity).
(m)
Loss of Priority. The failure at any time of the Security Instrument to be a
valid first priority Lien upon the Property or any portion thereof, other than as a result of any
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release or reconveyance of the Security Instrument with respect to any portion of Borrower’s
interest in the Property pursuant to this Agreement.
(n)
Hazardous Materials. The discovery of any significant Hazardous
Materials in, on, under or about the Property subsequent to the Effective Date that either are in
amounts or concentrations which are in excess of the maximum levels permitted under
applicable Hazardous Materials Laws, or which would otherwise have a Material Adverse Effect
upon the use or value of the Property. Whether such Hazardous Materials are “significant” shall
be determined by Lender in accordance with its then current underwriting practices.
(o)
Net Worth/Liquidity Covenant.
Worth/Liquidity Covenant.
Guarantor shall breach the Net
(p)
Inspection. Any of Lender, its representatives, or its construction
consultant is not permitted by any Borrower Party, at all reasonable times, to enter upon the
Property and/or inspect the Improvements and articles used or to be used in connection
therewith, and such default remains uncured for a period of ten (10) days after written notice
thereof from Lender to Borrower.
(q)
Property Management Agreement. If (i) the Property Management
Agreement is terminated, modified, assigned, supplemented, or amended without the prior
written consent of Lender, (ii) Property Manager’s obligations or responsibilities under the
Property Management Agreement are assigned, delegated or otherwise transferred to any Person,
or (iii) Borrower breaches, or otherwise defaults under, the Property Management Agreement
beyond any applicable cure period.
(r)
Property Taxes. Any failure to pay Property Taxes prior to delinquency as
required by Section 8.3 (entitled Payment of Property Taxes, Assessments and Charges).
(s)
Prohibited Contracts. Any breach or default of Section 4.8 (entitled
Prohibited Contracts) that is not cured within five (5) Business Days after Borrower’s receipt of
written notice from Lender.
(t)
Construction Information. Borrower shall fail to furnish to Lender,
Lender’s construction consultant, or their respective authorized representatives, within ten (10)
days after receipt of Lender’s written request, copies of such plans, drawings and specifications,
or copies of any invoices, subcontracts, or bills of sale relating to the construction or equipping
of the Planned Improvements, and, in any of the foregoing cases, such default remains uncured
for a period of ten (10) days after notice thereof from Lender to Borrower, provided that, if such
default is caused as a result of any Contractor and Borrower notifies Lender of same in writing,
then such ten (10)-day period shall be extended by the number of days determined by Lender,
notice of which has been provided to Borrower, so long as Borrower is diligently pursuing its
rights and remedies to cause compliance by the applicable Contractor.
(u)
Intentionally Deleted.
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(v)
Unsatisfactory Work. Borrower shall fail to cause any Unsatisfactory
Work to be corrected to the reasonable satisfaction of Lender and its construction consultant
within ten (10) Business Days after written notice of such disapproval, provided that, if such
Unsatisfactory Work cannot reasonably be corrected within such ten (10) Business Day period,
then so long as Borrower shall have commenced to cause the correction of such Unsatisfactory
Work within such ten (10) Business Day period and thereafter diligently and expeditiously
proceeds to cause the correction of the same, such ten (10) Business Day period shall be
extended for such time as is reasonably necessary for Borrower in the exercise of due diligence
to cause the correction of such Unsatisfactory Work, but in no event beyond the date which is
sixty (60) days after the applicable notice of disapproval.
(w)
Milestones. Borrower fails to achieve any of the Milestones by the
applicable Milestone Date (subject to Force Majeure Events).
(x)
Discontinuance of Construction. Any discontinuance or abandonment of
the construction of the Planned Improvements, other than due to a Force Majeure Event, for
more than fifteen (15) consecutive days, or any delay in the construction of the Planned
Improvements shall occur so that the same cannot, in Lender’s sole judgment, be completed on
or before the Final Completion Outside Date.
(y)
Design-Build Contract. If (i) the Design-Build Contract is terminated and
not promptly replaced (but in no event replaced later than thirty (30) days after any such
termination) with a substitute Design-Build Contract with a new Design-Builder (who is not an
Affiliate of the prior Design-Builder or an Affiliate of any Borrower Party), in each case,
acceptable to Lender in its reasonable discretion, or (ii) Borrower breaches or otherwise defaults
under the Design-Build Contract beyond any applicable cure period.
(z)
Intentionally Omitted.
(aa) Major Contract. If (i) any Major Contract is terminated and not promptly
replaced (but in no event replaced later than thirty (30) days after any such termination) with a
substitute Major Contract with a new Major Contractor (who is not a Borrower Party or an
Affiliate of the prior Major Contractor), in each case, acceptable to Lender in its reasonable
discretion, or (ii) Borrower breaches or otherwise defaults under any Major Contract beyond any
applicable cure period.
(bb) Plastic Express Lease. If Borrower breaches or otherwise defaults under
the Plastic Express Lease beyond any applicable cure period.
(cc) Sale Agreement. If Borrower breaches or otherwise defaults under the
Sale Agreement beyond any applicable cure period.
11.2 Remedies upon Default. During the existence of an Event of Default, all or any
one or more of the rights, powers and other remedies available to Lender against Borrower under
any Loan Document, or at law or in equity may be exercised by Lender at any time and from
time to time (including the right to accelerate and declare the outstanding Indebtedness to be
immediately due and payable), without notice or demand (unless expressly required by law or
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the Loan Documents), whether or not all or any portion of the Indebtedness shall be declared due
and payable, and whether or not Lender shall have commenced any foreclosure proceeding or
other action for the enforcement of its rights and remedies under any of the Loan Documents
with respect to all or any portion of the Property. Notwithstanding anything contained to the
contrary herein, the outstanding Indebtedness shall be accelerated and immediately due and
payable, without any election by Lender upon the occurrence of an insolvency action described
in Section 11.1(f).
11.3 Remedies Cumulative. The rights, powers and remedies of Lender under this
Agreement shall be cumulative and not exclusive of any other right, power or remedy which
Lender may have against Borrower pursuant to this Agreement or the other Loan Documents
executed by or with respect to Borrower, or existing at law or in equity or otherwise. Lender’s
rights, powers and remedies may be pursued singly, concurrently or otherwise, at such time and
in such order as Lender may determine in Lender’s discretion. No delay or omission to exercise
any remedy, right or power accruing upon an Event of Default shall impair any such remedy,
right or power or shall be construed as a waiver thereof, but any such remedy, right or power
may be exercised from time to time and as often as may be deemed expedient. A waiver of any
Event of Default shall not be construed to be a waiver of any subsequent Event of Default or to
impair any remedy, right or power consequent thereon. Any and all of Lender’s rights with
respect to the Property shall continue unimpaired, and Borrower shall be and remain obligated in
accordance with the terms hereof, notwithstanding (a) the release or substitution of Property at
any time, or of any rights or interest therein, or (b) any delay, extension of time, renewal,
compromise or other indulgence granted by Lender upon the occurrence of any Event of Default
with respect to the Property or otherwise hereunder. Notwithstanding any other provision of this
Agreement, Lender reserves the right to seek a deficiency judgment or preserve a deficiency
claim, in connection with the foreclosure of the Security Instrument on the Property, to the extent
necessary to foreclose on other parts of the Property.
11.4 Lender Appointed Attorney-In-Fact.
Borrower hereby irrevocably and
unconditionally constitutes and appoints Lender as Borrower’s true and lawful attorney-in-fact,
with full power of substitution, at any time during the existence of an Event of Default to
execute, acknowledge and deliver any documents, agreements or instruments and to exercise and
enforce every right, power, remedy, option and privilege of Borrower under all Loan Documents,
and do in the name, place and stead of Borrower, all such acts, things and deeds for and on
behalf of and in the name of Borrower under any Loan Document, which Borrower could or
might do or which Lender may deem necessary or desirable to more fully vest in Lender the
rights and remedies provided for under the Loan Documents and to accomplish the purposes
thereof. The foregoing powers of attorney are irrevocable and coupled with an interest.
11.5 Lender’s Right to Perform. If Borrower fails to perform any covenant or
obligation contained herein for a period of five (5) Business Days after Borrower’s receipt of
notice thereof from Lender, Lender may, but shall have no obligation to, perform, or cause
performance of, such covenant or obligation, and the reasonable out-of-pocket expenses of
Lender actually incurred in connection therewith shall be payable by Borrower to Lender upon
demand, together with interest thereon at the Default Interest Rate. Notwithstanding the
foregoing, Lender shall have no obligation to send notice to Borrower of any such failure.
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11.6 Lender’s Right to Complete Construction. During the existence of an Event of
Default, Lender may take possession of the Property and complete the construction and
equipping of the Improvements pursuant to the Contract Documents and do anything in its sole
judgment to fulfill the obligations of Borrower hereunder, including, without limitation, either
the right to avail itself of and procure performance of existing contracts or let any contracts with
the same contractors or others and to employ watchmen to protect the Property from injury.
Without restricting the generality of the foregoing and for the purposes aforesaid, during the
continuance of an Event of Default, Borrower hereby appoints and constitutes Lender its lawful
attorney-in-fact with full power of substitution in the Property to complete construction of the
Construction Work in the name of Borrower; to use unadvanced funds remaining under the Loan
or which may be reserved, or escrowed or set aside for any purposes hereunder at any time, or to
advance funds in excess of the face amount of the Note (and all such amounts shall be payable
by Borrower together with interest at the Default Interest Rate), to complete the Construction
Work; to make changes in the Plans and Specifications which shall be necessary to complete the
Improvements in substantially the manner contemplated by the Plans and Specifications; to
retain or employ new general contractors, subcontractors, architects, engineers and inspectors as
shall be required for said purposes; to pay, settle or compromise all existing bills and claims and
Liens against the Property and take any other steps relating to clearing title to the Property from
any Liens that are not Permitted Encumbrances, or to avoid such bills and claims becoming
Liens against the Property or security interest against fixtures or equipment, or as may be
necessary or desirable for the completion of the construction and equipping of the Improvements
or for the clearance of title; to execute all applications and certificates in the name of Borrower
which may be required by any of the Contract Documents; to do any and every act which
Borrower might do in its own behalf; and to prosecute and defend all actions or proceedings in
connection with the Property or fixtures or equipment; to take action and require such
performance as it deems necessary under any bonds furnished in connection with the
construction of the Construction Work and to make settlements and compromises with surety or
sureties thereunder, and in connection therewith, to execute instruments of release and
satisfaction; it being understood and agreed that this power of attorney shall be a power coupled
with an interest and cannot be revoked.
ARTICLE XII
SECONDARY MARKET TRANSACTIONS
12.1
Secondary Market Transactions.
(a)
General. Borrower hereby acknowledges that Lender currently has, and
shall continue to have in the future, the absolute and unconditional right at any time after the date
hereof and at any time during the term of the Loan, without giving any notice to or requiring any
consent or approval from any Borrower Party, any party to any Loan Document or any other
Person, the right in one or more transactions to: (i) sell or securitize the Loan or portions thereof
in one or more transactions through the issuance of securities, which securities may be rated by
the Rating Agencies; (ii) sell, pledge or otherwise transfer the Loan or any portion thereof one or
more times (including selling or assigning its duties, rights or obligations hereunder or under any
Loan Document in whole, or in part, to a servicer and/or a trustee); (iii) sell participation
interests in the Loan one or more times; (iv) re-securitize the securities issued in connection with
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any securitization; (v) further divide the Loan (or any then-existing notes or components of the
Loan) into two or more separate senior, subordinate or pari passu notes and/or components
and/or reallocate a portion of the Loan between or among any such notes and/or components;
(vi) create one or more mezzanine loans to be secured by direct and/or indirect Equity Interests
in Borrower and/or reallocate a portion of the Loan (or any notes or components of the Loan)
between or among any existing mezzanine loan(s) and/or any such newly-created mezzanine
loan(s); and/or (vii) reduce the number of notes and/or components and/or mezzanine loans, or
eliminate the component structure and/or the multiple note structure and/or the
mortgage/mezzanine loan structure of the Loan (including the elimination of the related
allocations of principal and interest payments) (the transactions referred to in clauses (i) through
(vii) above, each a “Secondary Market Transaction” and collectively “Secondary Market
Transactions”). With respect to any Secondary Market Transaction, (1) such notes, note
components and mezzanine loans may be assigned different principal amounts, interest rates,
debt service payments and interest rate floors, so long as immediately after the effective date of
such modification, the aggregate amount of, and the weighted average of the interest rates
payable under, the Loan and such notes, component note(s) and/or mezzanine loan(s), equal the
maximum outstanding Loan amount and Applicable Interest Rate, respectively, immediately
prior to such modification, and (2) Borrower agrees to (A) modify its organizational structure to
create one or more new Special Purpose Entities to be the mezzanine borrower(s) (and to be
otherwise satisfactory to Lender) and cause the same and any other owners of direct or indirect
Equity Interests in Borrower to enter into such agreements deemed reasonably necessary by
Lender to evidence and secure such mezzanine loan, and (B) execute and deliver to Lender such
amendments to the Loan Documents, title insurance endorsements, legal opinions and other
customary loan documentation as Lender may reasonably require in connection therewith,
including, without limitation, delivery of a substantive non-consolidation legal opinion in form
and substance reasonably satisfactory to Lender. The indemnity obligations of Borrower under
the Loan Documents shall also apply with respect to any purchaser, transferee, assignee,
servicer, participant or investor.
(b)
Register. Lender or its designee (which may include the Servicer), acting
solely for this purpose as a non-fiduciary agent of Borrower or, in Lender’s sole discretion,
Borrower shall maintain a copy of each assignment delivered to it and a register for the
recordation of (i) the names and addresses of each Lender, and (ii) the commitments of, and
principal amounts (and stated interest) of the Loan owing to, each Lender pursuant to the terms
hereof from time to time (the “Register”). The entries in the Register shall be conclusive absent
manifest error, and Borrower and each Lender shall treat each Person whose name is recorded in
the Register pursuant to the terms hereof as a Lender hereunder for all purposes of this
Agreement. The Register shall be available for inspection by Borrower and any Lender, at any
reasonable time and from time to time upon reasonable prior notice.
(c)
Participations. Each Lender that sells a participation shall, acting solely
for this purpose as a non-fiduciary agent of Borrower, maintain a register on which it enters the
name and address of each participant and the principal amounts (and stated interest) of each
participant’s interest in the Loan or other obligations under the Loan Documents (the
“Participant Register”); provided that no Lender shall have any obligation to disclose all or any
portion of the Participant Register (including the identity of any participant or any information
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relating to a participant’s interest in any commitments, loans, letters of credit or its other
obligations under any Loan Document) to any Person except to the extent that such disclosure is
necessary to establish that such commitment, loan, letter of credit or other obligation is in
registered form under Section 5f.103-1(c) of the United States Treasury Regulations. The entries
in the Participant Register shall be conclusive absent manifest error, and such Lender shall treat
each Person whose name is recorded in the Participant Register as the owner of such
participation for all purposes of this Agreement notwithstanding any notice to the contrary.
Borrower agrees that each participant shall be entitled to the benefits of Section 2.18 and
Section 2.19 (subject to the requirements and limitations therein, including the requirements
under Section 2.19(e) (it being understood that the documentation required under Section 2.19(e)
shall be delivered to the participating Lender)) to the same extent as if it were a Lender; provided
that such participant shall not be entitled to receive any greater payment under Section 2.18 or
Section 2.19, with respect to any participation, than its participating Lender would have been
entitled to receive, except to the extent such entitlement to receive a greater payment results from
a Regulatory Change that occurs after the participant acquired the applicable participation.
(d)
Central Bank Pledge/Pfandbrief Pledge. Notwithstanding anything to the
contrary contained herein or in any of the other Loan Documents, without the need to comply
with any formal or procedural requirements of this Agreement or any of the other Loan
Documents, any Lender may at any time create a security interest in all or any portion of its
rights under this Agreement and any other Loan Document (including, without limitation, the
advances owing to it) in favor of (i) any Federal Reserve Bank, any Federal Home Loan Bank or
the central reserve bank or similar authority of any other country to secure any obligation of
Lender to such bank or similar authority (a “Central Bank Pledge”) or (ii) the trustee,
administrator or receiver (or their respective nominees, collateral agents or collateral trustees) of
a mortgage pool securing covered mortgage bonds issued by a German mortgage bank, or any
other Person permitted to issue covered mortgage bonds, under German Pfandbrief legislation, as
such legislation may be amended and in effect from time to time, on any substitute or successor
legislation (a “Pfandbrief Pledge”). In the event that the interest of Lender that is assigned in
connection with a Central Bank Pledge is foreclosed upon and transferred to the pledgee thereof,
Lender shall have no further liability hereunder with respect to the interest that was the subject of
such transfer and the assignee shall be Lender with respect to such interest. Lender shall not be
required to notify Borrower of any Central Bank Pledge or Pfandbrief Pledge.
12.2 Borrower Cooperation. Borrower shall cooperate, and shall use commercially
reasonable efforts to cause each other Borrower Party, any party to any Loan Document or any
other Person, associated or connected with the Loan or the Property to reasonably cooperate in
all material respects with Lender in connection with any Secondary Market Transaction.
Borrower shall execute and deliver, and shall cause each other Borrower Party, any party to any
Loan Document or any other Person (to the extent possible), associated or connected with the
Loan or the Property to execute and deliver, to Lender such documents, instruments, certificates,
financial statements, assignments and other writings (including, without limitation, delivery of a
substantive non-consolidation legal opinion in form and substance reasonably satisfactory to
Lender), do such other acts and provide such information, and participate in such meetings and
discussions, in each case that are necessary or desirable to facilitate the consummation of each
Secondary Market Transaction, including, without limitation, to (a) split the Loan into two or
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more loans evidenced by and pursuant to separate sets of Note and other related loan documents,
or (b) modify the terms and provisions of the Loan Documents, in each case to the full extent
required by Lender to facilitate any Secondary Market Transaction, provided that any such
splitting or modification of the Loan will not adversely affect or diminish the rights of any
Borrower Party, and will not increase, in any material respect, the obligations and liabilities of
any Borrower Party, under the Loan Documents (when aggregated with the rights of any
mezzanine borrower(s) and any other Affiliates of Borrower under any mezzanine loan
documents).
12.3 Dissemination of Information. If Lender determines at any time to participate in
a Secondary Market Transaction, then Lender shall have the absolute and unconditional right
without giving any notice to or obtaining the prior consent or approval of any Borrower Party,
any party to any Loan Document or any other Person to disclose, deliver and to share with any
potential purchaser, transferee, assignee, servicer, participant or investor in such securities
(individually, an “Investor” and collectively, the “Investors”), any Rating Agency rating such
securities, any organization maintaining databases on the underwriting and performance of
commercial loans, trustee, counsel, accountant, and each prospective Investor, all documents and
information which Lender now has or may hereafter acquire relating to the Loan, Borrower, any
direct or indirect equity owner of Borrower, any Guarantor and the Property, which shall have
been furnished by Borrower, any Affiliate of Borrower, any Guarantor or any party to any Loan
Document, or otherwise furnished in connection with the Loan, as Lender in its discretion
determines necessary or desirable.
12.4 Change of Payment Date. At any time prior to securitization of the Loan by
Lender, Lender shall have the right to change the Payment Date to a date other than as set forth
herein (such new date, the “New Payment Date”) on thirty (30) days’ written notice to
Borrower, provided, however, that any such change in the Payment Date: (a) shall not modify the
amount of regularly scheduled monthly principal and interest payments, except that the first
payment of principal and interest payable on the New Payment Date shall be accompanied by
interest at the Applicable Interest Rate for the period from the Payment Date in the month in
which the New Payment Date first occurs to the New Payment Date, and (b) shall extend the
Maturity Date to the New Payment Date occurring in the calendar month set forth in the
definition of Maturity Date.
ARTICLE XIII
MISCELLANEOUS
13.1 Performance by Lender. If Borrower defaults in or fails to perform any of its
obligations under the Loan Documents, then Lender shall have right, but not the obligation, and
without limitation upon any of Lender’s other rights pursuant thereto, to perform the same, and
Borrower agrees to pay to Lender, upon demand, all reasonable out-of-pocket costs and expenses
actually incurred by Lender in connection therewith, including reasonable attorneys’ fees,
together with interest thereon from the date of expenditure at the Default Interest Rate.
13.2 Actions. Lender shall have the right, but not the obligation, to commence, appear
in and defend any action or proceeding purporting to affect the rights or duties of the parties
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hereunder or the payment of any funds, and, in connection therewith, Lender may pay necessary
expenses, employ counsel and pay reasonable attorneys’ fees and fees of expert witnesses.
Borrower agrees to pay to Lender, upon demand, all reasonable out-of-pocket costs and expenses
actually incurred by Lender in connection therewith, including, without limitation, attorneys’
fees and fees of expert witnesses, together with interest from the date of expenditure at the
Default Interest Rate.
13.3
Nonliability of Lender. Borrower acknowledges and agrees that:
(a)
By accepting or approving anything required to be provided to Lender
pursuant to the Loan Documents, including, without limitation, any certificate, financial
statement, survey, appraisal or insurance policy, Lender shall not be deemed to have warranted
or represented the sufficiency, effectiveness or legal effect of any term or provision thereof, and
such acceptance or approval thereof shall not constitute a warranty or representation to anyone
with respect thereto by Lender.
(b)
Lender neither undertakes nor assumes any responsibility or duty to
Borrower to select, review, inspect, supervise, pass judgment upon or inform Borrower of any
matter in connection with the Property.
(c)
The relationship of Borrower and Lender under the Loan Documents is,
and shall at all times remain, solely that of borrower and lender, and Lender neither undertakes
nor assumes any responsibility or duty to Borrower or to any other Person with respect to the
Property or the Loan, except as expressly provided in the Loan Documents; and, notwithstanding
any other provision of the Loan Documents: (i) Lender is not, and shall not be construed as, a
partner, joint venturer, alter ego, manager, controlling person or other business associate or
participant of any kind of Borrower or any Affiliate of Borrower; (ii) Lender does not intend to
ever assume such status, and Lender does not intend to ever assume any responsibility to any
Person for the quality, suitability, safety or condition of the Property; and (iii) Lender shall not
be deemed responsible for or a participant in any acts, omissions or decisions of Borrower or any
Affiliate of Borrower.
(d)
Lender shall not be directly or indirectly liable or responsible for any loss,
claim, cause of action, liability, indebtedness, damage or injury of any kind or character to any
Person or property arising from any construction on, or occupancy or use of, the Property or any
portion thereof, whether caused by, or arising from: (i) any defect in any building, structure,
grading, fill, landscaping or other Improvements thereon or in any on-site or off-site
improvement or other facility therein or thereon; (ii) any act or omission of Borrower, any
Affiliate, agent, employee, independent contractor, licensee or invitee of Borrower; (iii) any
accident in, on or around the Property or any portion thereof, or any fire, flood or other casualty
or hazard thereon; (iv) the failure of Borrower, any of Borrower’s licensees, employees, invitees,
agents, independent contractors or other representatives to maintain any of the Property in a safe
condition; and (v) any nuisance made or suffered on any part of the Property, except to the extent
caused by Lender’s gross negligence or willful misconduct.
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(e)
Borrower shall be solely responsible for all aspects of Borrower’s business
and conduct in connection with the Property.
(f)
If a claim or adjudication is made that Lender or its agents, has acted
unreasonably or unreasonably delayed acting in any case where by law or under any Loan
Document, then Lender or such agent, as the case may be, has an obligation to act reasonably or
promptly, and Borrower agrees that neither Lender nor its agents, shall be liable for any
monetary damages, and Borrower’s sole remedies shall be limited to commencing an action
seeking injunctive relief or declaratory judgment. The parties hereto agree that any action or
proceeding to determine whether Lender has acted reasonably shall be determined by an action
seeking declaratory judgment. Furthermore, notwithstanding anything to the contrary in this
Agreement, all Lender actions may be in the sole and absolute discretion of Lender during the
continuation of an Event of Default.
(g)
Lender shall not be liable to Borrower or any other parties for: (i) errors,
acts or failures to act of others, including other entities, banks, communications carriers or
clearinghouses, through which Borrower’s transfers may be made or information received or
transmitted, and no such entity shall be deemed an agent of Lender; (ii) any loss, liability or
delay caused by a Force Majeure Event; or (iii) any special, consequential, indirect or punitive
damages, whether or not (A) any claim for these damages is based on tort or contract, or
(B) Lender or Borrower knew or should have known the likelihood of these damages in any
situation. Lender makes no representations or warranties other than those expressly made in this
Agreement, if any.
13.4 No Third Parties Benefited. This Agreement is made for the purpose of setting
forth certain rights and obligations of Borrower and Lender in connection with the Loan. It is
made for the sole protection of Borrower and Lender, and Lender’s successors and assigns. No
other Person shall have any rights of any nature hereunder or by reason hereof.
13.5 Indemnity. Borrower hereby agrees to indemnify, defend and hold Lender,
PCCP, LLC, a Delaware limited liability company, and each such entity’s respective directors,
officers, agents and employees harmless from, any and all Liabilities and Costs which Lender or
any such Person may suffer or incur as a direct or indirect consequence of: (a) Lender’s making
of the Loan, except for violations of banking laws or regulations by Lender; (b) Borrower’s
failure to perform any of Borrower’s obligations as and when required by this Agreement or any
of the other Loan Documents, including, without limitation, any failure, at any time, of any
representation or warranty of Borrower to be true and correct and any failure by Borrower to
satisfy any condition; (c) any claim or cause of action of any kind by any Person to the effect that
Lender is in any way responsible or liable for any act or omission by any Borrower Party,
whether on account of any theory of derivative liability, breach of fiduciary duty by any
Borrower Party, breach of contract by any Borrower Party or otherwise, including, without
limitation, any claim or cause of action for fraud, misrepresentation, tort or willful misconduct
by any Borrower Party or any cause of action brought by Borrower Party’s direct or indirect
investors; or (d) any claim or cause of action of any kind by any Person which would have the
effect of denying Lender the full benefit or protection of any provision of this Agreement or the
Loan Documents. Notwithstanding the foregoing, Borrower shall not be obligated to indemnify
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Lender with respect to any gross negligence or willful misconduct which Lender is personally
determined by the judgment of a court of competent jurisdiction (sustained on appeal, if any) to
have committed. Borrower shall pay any indebtedness arising under this indemnity to Lender
immediately upon demand by Lender together with interest thereon from the date such
indebtedness arises until paid at the Default Interest Rate. Borrower’s duty to defend and
indemnify Lender shall survive the release and cancellation of the Note and release and
reconveyance of the Security Instrument.
13.6 Binding Effect; Assignment. This Agreement shall be binding upon, and shall
inure to the benefit of, Borrower and Lender and their respective successors and assigns, except
that Borrower may not assign its rights or delegate any of its duties under this Agreement or any
of the other Loan Documents without the prior written consent of Lender, which may be granted
or withheld in Lender’s sole and absolute discretion. Borrower recognizes that this Agreement
does not provide for an ordinary loan and that Lender would not make the Loan except in
reliance upon Borrower’s expertise and reputation, Lender’s knowledge of Borrower, and
Lender’s understanding that this Agreement is more in the nature of an agreement involving
personal services than a standard loan where Lender would rely on security which already exists.
13.7 Execution in Counterparts. This Agreement and any other Loan Document, but
specifically excluding the Note, may be executed in any number of counterparts, each of which
when executed and delivered will be deemed to be an original and all of which, taken together,
will be deemed to be but one and the same instrument.
13.8 Amendments; Waiver in Writing. No modification, amendment, extension,
discharge, termination or waiver of any provision of this Agreement, the Note or any other Loan
Document, or consent to any departure by Borrower therefrom, shall in any event be effective
unless the same shall be in a writing signed by the party against whom enforcement is sought,
and then such waiver or consent shall be effective only in the specific instance, and for the
purpose, for which given. Except as otherwise expressly provided herein, no notice to or
demand on Borrower shall entitle Borrower to any other or future notice or demand in the same,
similar or other circumstances.
13.9
Costs and Expenses.
(a)
Borrower shall pay to Lender on demand the following:
(i)
The reasonable attorneys’ fees and expenses actually incurred by
Lender or its respective successors and assigns in connection with the negotiation,
preparation, execution, delivery, modification and administration of this Agreement and
any other Loan Document and any matter related thereto; Lender shall inform Borrower
of the attorneys’ fees and expenses incurred by Lender in connection with the
negotiation, preparation, execution and delivery of this Agreement and the other Loan
Documents on or before the Effective Date;
(ii)
The reasonable attorneys’ fees and expenses actually incurred by
any loan participant or its respective successors and assigns in connection with the
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modification and administration of this Agreement and any other Loan Document and
any matter related thereto;
(iii) The reasonable out-of-pocket costs and expenses actually incurred
by Lender, any loan participant or their respective successors and assigns in connection
with the enforcement of this Agreement and any other Loan Document and any matter
related thereto, including, without limitation, the fees and expenses of any legal counsel,
independent public accountants and other outside experts retained by Lender; and
(iv)
All costs, expenses, fees, premiums and other charges relating or
arising with respect to the Loan Documents or any transactions contemplated thereby or
in the compliance with any of the terms and conditions thereof, including, without
limitation, recording fees, filing fees, release or reconveyance fees, title insurance
premiums, external or in-house appraisal or cost engineering fees (including inspections),
auditor fees and environmental consultant fees. Borrower recognizes and agrees that
formal written Appraisals of the Property by a licensed independent appraiser may be
required by Lender’s internal procedures and/or federal regulatory reporting requirements
on an annual and/or specialized basis and that Lender may, at its option, require
inspection of the Property (or any portion thereof) by an independent supervising
architect and/or cost engineering specialist, and Borrower shall promptly pay the costs
and expenses of all such Appraisals and inspections; provided, however, unless (i) an
Event of Default exists, (ii) a Casualty or Taking has occurred, or (iii) an Appraisal is
required by regulatory authorities having jurisdiction over Lender, Borrower shall only be
responsible for the cost of one (1) Appraisal in any eighteen (18) month period. If any of
the services described in this Section are provided by an employee of Lender, Borrower
shall reimburse Lender its standard charge for such services.
(b)
All sums paid or expended by Lender, any loan participant or their
respective successors and assigns in accordance with this Agreement and the other Loan
Documents shall be considered to be a part of the Loan. All such sums, together with all
amounts to be paid by Borrower to Lender pursuant to this Agreement and the other Loan
Documents, shall bear interest from the date of expenditure at the Default Interest Rate, and shall
be immediately due and payable by Borrower upon demand.
13.10 Tax Service. Lender is authorized to secure, at Borrower’s expense, a tax service
contract which shall provide tax information on the Property to Lender for the term of the Loan.
13.11 Survival. This Agreement and all covenants, agreements, representations and
warranties made herein and in the certificates delivered pursuant hereto shall survive the
execution and delivery of this Agreement and the execution and delivery by Borrower to Lender
of the Note, and shall continue in full force and effect so long as any portion of the Indebtedness
is outstanding and unpaid. Whenever in this Agreement any of the parties hereto is referred to,
such reference shall be deemed to include the successors and assigns of such party. All
covenants, promises and agreements in this Agreement contained, by or on behalf of Borrower,
shall inure to the benefit of the respective successors and assigns of Lender. Nothing in this
Agreement or in any other Loan Document, express or implied, shall give to any Person other
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than the parties and the holder(s) of the Note, the Security Instrument and the other Loan
Documents, and their legal representatives, successors and assigns, any benefit or any legal or
equitable right, remedy or claim hereunder.
13.12 Notices. All notices and other communications required or permitted under this
Agreement or any other Loan Document must be in writing and must be personally delivered;
mailed by U.S. registered or certified mail, return receipt requested, postage prepaid; sent by
nationally recognized private courier service; or transmitted by electronic mail (provided that a
copy of such notice or other communication is also delivered by another permitted means of
delivery), delivered or addressed to the appropriate party at its respective address set forth below:
If to Borrower:
Cedar Port Navy Building I, LLC
3262 Westheimer Road, Suite 656
Houston, Texas 77098
Attn: John Knox Porter, Jr.
Email: knox@cap.partners
with a copy to:
Capital Development Partners, Inc.
6400 Powers Ferry Road NW, Suite 400
Atlanta, Georgia 30339
Attn: John Knox Porter, Jr., President
Email: knox@cap.partners
with further copy to: Hartman Simons & Wood LLP
6400 Powers Ferry Road NW, Suite 400
Atlanta, Georgia 30339
Attn: Robert D. Simons, Esq.
Email: bob.simons@hartmansimons.com
If to Lender:
PacificCal Debt III, LLC
c/o PCCP, LLC
10100 Santa Monica Blvd., Suite 1000
Los Angeles, CA 90067
Attn: Servicing
Email: servicing@pccpllc.com
with a copy to:
Sidley Austin LLP
555 West Fifth Street, Suite 4000
Los Angeles, CA 90013
Attn: Brian Flavell, Esq.
Email: bflavell@sidley.com
Any party may change its address by giving written notice to the other party in accordance with
this Section 13.12. If any notice or other communication is given by registered or certified mail
it will be deemed effective seventy-two (72) hours after it is deposited in the U.S. mail, postage
prepaid; or if given by any other permitted means, when received at the address listed above.
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13.13 Further Assurances. Borrower shall, at its sole cost and expense, do such
further acts and execute and deliver such further documents as Lender from time to time may
require for the purpose of assuring and confirming to Lender the rights hereby created, for
carrying out the intention or facilitating the performance of the terms of any Loan Document, or
for assuring the validity of any Lien under any Loan Document.
13.14 Governing Law. This Agreement and the other Loan Documents shall be
governed by, and construed and enforced in accordance with, the laws of the State of New York,
except to the extent otherwise expressly stated therein.
13.15 Severability of Provisions. Any provision in any Loan Document that is held by
a court of competent jurisdiction to be inoperative, unenforceable or invalid shall be inoperative,
unenforceable or invalid without affecting the remaining provisions, and to this end the
provisions of all Loan Documents are declared to be severable.
13.16 Headings. Article, section and subparagraph headings in this Agreement are
included for convenience of reference only and are not part of this Agreement for any other
purpose.
13.17 Time of the Essence; Delay Not a Waiver. Time is of the essence of this
Agreement and each and every provision hereof. Neither any failure nor any delay on the part of
Lender in insisting upon strict performance of any term, condition, covenant or agreement, or
exercising any right, power, remedy or privilege under any Loan Document, or any other
instrument given as security therefor, shall operate as or constitute a waiver thereof, nor shall a
single or partial exercise thereof preclude any other future exercise, or the exercise of any other
right, power, remedy or privilege. In particular, and not by way of limitation, by accepting
payment after the due date of any amount payable under any Loan Document, Lender shall not
be deemed to have waived any right either to require prompt payment when due of all other
amounts due under any Loan Document, or to declare a default for failure to effect prompt
payment of any such other amount.
13.18 Construction of Agreement. Both Borrower and Lender have cooperated in the
drafting and negotiation of this Agreement, and any ambiguities which may be contained herein
shall not be construed against either party.
13.19 Brokers. Borrower hereby represents that except for Eastdil Secured, it has dealt
with no financial advisors, brokers, underwriters, placement agents, agents or finders in
connection with the transactions contemplated by this Agreement. Borrower shall indemnify,
defend and hold Lender harmless from and against any and all claims, liabilities, costs and
expenses of any kind (including Lender’s attorneys’ fees and expenses) in any way relating to or
arising from a claim by any Person that such Person acted on behalf of Borrower or Lender in
connection with the transactions contemplated herein. The provisions of this Section 13.19 shall
survive the expiration and termination of this Agreement and the payment of the Loan.
13.20 Lender’s Discretion. Whenever pursuant to this Agreement or any other Loan
Document that Lender exercises any right, option or election given to Lender to approve or
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disapprove, or consent or withhold consent, or any arrangement or term is to be satisfactory to
Lender or is to be in Lender’s discretion, the decision of Lender to approve or disapprove,
consent or withhold consent, or to decide whether arrangements or terms are satisfactory or not
satisfactory or acceptable or not acceptable to Lender in Lender’s discretion, shall (except as is
otherwise specifically herein provided) be in the sole and absolute discretion of Lender.
13.21 Preferences. Lender shall have the continuing and exclusive right to apply or
reverse and reapply any and all payments by Borrower to any portion of the obligations of
Borrower hereunder. To the extent Borrower makes a payment or payments to Lender for
Borrower’s benefit, which payment or proceeds or any part thereof are subsequently invalidated,
declared to be fraudulent or preferential, set aside or required to be repaid to a trustee, receiver or
any other party under any bankruptcy law, state or federal law, common law or equitable cause,
then, to the extent of such payment or proceeds received, the obligations hereunder or part
thereof intended to be satisfied shall be revived and continue in full force and effect, as if such
payment or proceeds had not been received by Lender.
13.22 Waiver of Notice. Borrower shall not be entitled to any notices of any nature
whatsoever from Lender except with respect to matters for which this Agreement or the other
Loan Documents specifically and expressly provide for the giving of notice by Lender to
Borrower and except with respect to matters for which Borrower is not, pursuant to applicable
Legal Requirements, permitted to waive the giving of notice. Borrower hereby expressly waives
the right to receive any notice from Lender with respect to any matter for which this Agreement
or the other Loan Documents does not specifically and expressly provide for the giving of notice
by Lender to Borrower, except with respect to matters for which Borrower is not, pursuant to
applicable Legal Requirements, permitted to waive the giving of notice.
13.23 Offsets, Counterclaims and Defenses. Any assignee of Lender’s interest in and
to the Loan Documents shall take the same free and clear of all offsets, counterclaims or
defenses which are unrelated to the Loan, and the Loan Documents which Borrower may
otherwise have against any assignor, and no such unrelated counterclaim or defense shall be
interposed or asserted by Borrower in any action or proceeding brought by any such assignee
upon, the Loan Documents and any such right to interpose or assert any such unrelated offset,
counterclaim or defense in any such action or proceeding is hereby expressly waived by
Borrower.
13.24 Waiver of Marshalling of Assets Defense. To the fullest extent that Borrower
may now or hereafter legally do so, Borrower waives all rights to a marshalling of the assets of
Borrower, and of the Property, or to a sale in inverse order of alienation upon foreclosure of the
interests hereby created, and irrevocably agrees not to assert any right under any laws pertaining
to the marshalling of assets, the sale in inverse order of alienation, homestead exemption, the
administration of estates of decedents, or any other matters whatsoever to defeat, reduce or affect
the right of Lender under the Loan Documents to a sale of the Property for the collection of the
Indebtedness without any prior or different resort for collection, or the right of Lender or any
trustee under the Security Instrument to the payment of the Indebtedness in preference to every
other claimant whatsoever.
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13.25 Submission to Jurisdiction; Waiver of Right to Trial by Jury; Service of
Process.
(a)
THE LOAN EVIDENCED BY THE NOTE WAS NEGOTIATED IN
WHOLE OR IN PART IN THE STATE OF NEW YORK, AND ACCEPTED BY LENDER IN
THE STATE OF NEW YORK, AND THE PROCEEDS OF THE NOTE DELIVERED
PURSUANT HERETO WERE DISBURSED FROM THE STATE OF NEW YORK, WHICH
STATE THE PARTIES AGREE HAS A SUBSTANTIAL RELATIONSHIP TO THE PARTIES
AND TO THE UNDERLYING TRANSACTION EMBODIED HEREBY, AND IN ALL
RESPECTS, INCLUDING MATTERS OF CONSTRUCTION, VALIDITY AND
PERFORMANCE, THIS AGREEMENT AND THE OBLIGATIONS ARISING HEREUNDER
SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS
OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE AND
PERFORMED IN SUCH STATE (WITHOUT REGARD TO PRINCIPLES OF CONFLICT OF
LAWS OTHER THAN SECTIONS 5-1401 AND 5-1402 OF THE GENERAL OBLIGATIONS
LAW OF THE STATE OF NEW YORK) AND ANY LEGAL REQUIREMENTS OF THE
UNITED STATES OF AMERICA, EXCEPT AS MAY BE OTHERWISE EXPRESSLY SET
FORTH IN THE OTHER LOAN DOCUMENTS. TO THE FULLEST EXTENT PERMITTED
BY LAW, EACH OF BORROWER AND LENDER HEREBY UNCONDITIONALLY AND
IRREVOCABLY WAIVES ANY CLAIM TO ASSERT THAT THE LAW OF ANY OTHER
JURISDICTION GOVERNS THIS AGREEMENT AND THE NOTE, AND THIS
AGREEMENT AND THE NOTE SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. THIS CHOICE OF
GOVERNING LAW IS MADE PURSUANT TO NEW YORK GENERAL OBLIGATIONS
LAW SECTION 5-1401.
(b)
EACH OF BORROWER AND LENDER, TO THE FULL EXTENT
PERMITTED BY LAW, HEREBY KNOWINGLY, INTENTIONALLY AND
VOLUNTARILY, WITH AND UPON THE ADVICE OF COMPETENT COUNSEL,
(A) SUBMITS TO PERSONAL JURISDICTION IN THE STATE OF NEW YORK OVER
ANY SUIT, ACTION OR PROCEEDING BY ANY PERSON ARISING FROM OR
RELATING TO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS,
(B) AGREES THAT ANY SUCH ACTION, SUIT OR PROCEEDING MAY BE BROUGHT
IN ANY STATE OR FEDERAL COURT OF COMPETENT JURISDICTION IN THE STATE
OF NEW YORK, (C) SUBMITS TO THE JURISDICTION OF SUCH COURTS, AND, (D) TO
THE FULLEST EXTENT PERMITTED BY LAW, AGREES THAT IT WILL NOT BRING
ANY ACTION, SUIT OR PROCEEDING IN ANY FORUM OTHER THAN SUCH COURTS
IN NEW YORK (BUT NOTHING HEREIN SHALL AFFECT THE RIGHT OF LENDER TO
BRING ANY ACTION, SUIT OR PROCEEDING IN ANY OTHER FORUM). EACH OF
BORROWER AND LENDER FURTHER CONSENTS AND AGREES TO SERVICE OF
ANY SUMMONS, COMPLAINT OR OTHER LEGAL PROCESS IN ANY SUCH SUIT,
ACTION OR PROCEEDING BY REGISTERED OR CERTIFIED U.S. MAIL, POSTAGE
PREPAID, TO BORROWER OR LENDER, AS APPLICABLE, AT THE ADDRESS FOR
NOTICES DESCRIBED IN SECTION 13.12 ABOVE, AND CONSENTS AND AGREES
THAT SUCH SERVICE SHALL CONSTITUTE IN EVERY RESPECT VALID AND
EFFECTIVE SERVICE (BUT NOTHING HEREIN SHALL AFFECT THE VALIDITY OR
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EFFECTIVENESS OF PROCESS SERVED IN ANY OTHER MANNER PERMITTED BY
LAW).
(c)
EACH OF BORROWER AND LENDER, HEREBY EXPRESSLY
WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION OR
CAUSE OF ACTION (i) ARISING UNDER THIS AGREEMENT OR THE NOTE,
INCLUDING, WITHOUT LIMITATION, ANY PRESENT OR FUTURE MODIFICATION
THEREOF, OR (ii) IN ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL
TO THE DEALINGS OF THE PARTIES HERETO OR ANY OF THEM WITH RESPECT TO
THIS AGREEMENT OR THE NOTE (EACH AS NOW OR HEREAFTER MODIFIED) OR
THE TRANSACTIONS RELATED HERETO OR THERETO, IN EACH CASE WHETHER
SUCH CLAIM, DEMAND, ACTION OR CAUSE OF ACTION IS NOW EXISTING OR
HEREAFTER ARISING, AND WHETHER SOUNDING IN CONTRACT OR TORT OR
OTHERWISE; AND EACH OF BORROWER AND LENDER HEREBY AGREES AND
CONSENTS THAT ANY PARTY TO THIS AGREEMENT MAY FILE AN ORIGINAL
COUNTERPART OR A COPY OF THIS SECTION WITH ANY COURT AS WRITTEN
EVIDENCE OF THE CONSENT OF THE PARTIES HERETO TO THE WAIVER OF ANY
RIGHT THEY MIGHT OTHERWISE HAVE TO TRIAL BY JURY.
(d)
ANY LEGAL SUIT, ACTION OR PROCEEDING AGAINST
BORROWER OR LENDER ARISING OUT OF OR RELATING TO THIS AGREEMENT OR
ANY OTHER LOAN DOCUMENT MAY, AT LENDER’S OPTION BE INSTITUTED IN
ANY FEDERAL OR STATE COURT IN THE CITY OF NEW YORK, COUNTY OF NEW
YORK PURSUANT TO SECTION 5-1402 OF THE NEW YORK GENERAL OBLIGATIONS
LAW, AND BORROWER WAIVES ANY OBJECTIONS WHICH IT MAY NOW OR
HEREAFTER HAVE BASED ON VENUE AND/OR FORUM NON CONVENIENS OF ANY
SUCH SUIT, ACTION OR PROCEEDING, AND BORROWER HEREBY IRREVOCABLY
SUBMITS TO THE EXCLUSIVE JURISDICTION OF ANY SUCH COURT IN ANY SUIT,
ACTION OR PROCEEDING. THIS CHOICE OF FORUM IS MADE PURSUANT TO NEW
YORK GENERAL OBLIGATIONS LAW SECTION 5-1402. BORROWER DOES HEREBY
DESIGNATE AND APPOINT C T CORPORATION SYSTEM, HAVING ITS ADDRESS 28
LIBERTY STREET, NEW YORK, NEW YORK 10005, AS ITS AUTHORIZED AGENT TO
ACCEPT AND ACKNOWLEDGE ON ITS BEHALF SERVICE OF ANY AND ALL
PROCESS WHICH MAY BE SERVED IN ANY SUCH SUIT, ACTION OR PROCEEDING
IN ANY FEDERAL OR STATE COURT IN NEW YORK, NEW YORK, AND BORROWER
AGREES THAT SERVICE OF PROCESS UPON SAID AGENT AT SAID ADDRESS AND
WRITTEN NOTICE OF SAID SERVICE MAILED OR DELIVERED TO BORROWER IN
THE MANNER PROVIDED HEREIN SHALL BE DEEMED IN EVERY RESPECT
EFFECTIVE SERVICE OF PROCESS UPON BORROWER, IN ANY SUCH SUIT, ACTION
OR PROCEEDING IN THE STATE OF NEW YORK. A COPY OF SUCH SERVICE OF
PROCESS SHALL BE DELIVERED TO BORROWER AT ITS ADDRESS SET FORTH IN
SECTION 13.12 HEREOF. BORROWER (i) SHALL GIVE PROMPT NOTICE TO LENDER
OF ANY CHANGED ADDRESS OF ITS AUTHORIZED AGENT HEREUNDER, (ii) MAY
AT ANY TIME AND FROM TIME TO TIME DESIGNATE A SUBSTITUTE AUTHORIZED
AGENT WITH AN OFFICE IN NEW YORK, NEW YORK (WHICH SUBSTITUTE AGENT
AND OFFICE SHALL BE DESIGNATED AS THE PERSON AND ADDRESS FOR
111
CONSTRUCTION LOAN AGREEMENT
CEDAR PORT LOGISTICS CENTER
DEAL ID 21-0070
265741215
SERVICE OF PROCESS), AND (iii) SHALL PROMPTLY DESIGNATE SUCH A
SUBSTITUTE IF ITS AUTHORIZED AGENT CEASES TO HAVE AN OFFICE IN NEW
YORK, NEW YORK OR IS DISSOLVED WITHOUT LEAVING A SUCCESSOR.
NOTHING CONTAINED HEREIN SHALL AFFECT THE RIGHT OF LENDER TO SERVE
PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO COMMENCE
LEGAL PROCEEDINGS OR OTHERWISE PROCEED AGAINST BORROWER IN ANY
OTHER JURISDICTION.
13.26 Intentionally Deleted.
13.27 Acknowledgment and Consent to Bail-In of EEA Financial Institutions.
Notwithstanding anything to the contrary set forth herein or in any other Loan Document or in
any other agreement, arrangement or understanding among the parties hereto, each party hereto
acknowledges that any liability of any EEA Financial Institution arising under any Loan
Document, to the extent such liability is unsecured, may be subject to the Write-Down and
Conversion Powers of an EEA Resolution Authority and agrees and consents to, and
acknowledges and agrees to be bound by:
(a)
the application of any Write-Down and Conversion Powers by an EEA
Resolution Authority to any such liabilities arising hereunder or under any other Loan
Documents which may be payable to it by any party hereto that is an EEA Financial Institution;
and
(b)
the effects of any Bail-In Action on any such liability, including, if
applicable:
(i)
a reduction in full or in part or cancellation of any such liability;
(ii)
a conversion of all, or a portion of, such liability into shares or
other instruments of ownership in such EEA Financial Institution, its parent undertaking, or a
bridge institution that may be issued to it or otherwise conferred on it, and that such shares or
other instruments of ownership will be accepted by it in lieu of any rights with respect to any
such liability under this Agreement or any other Loan Document; or
(iii) the variation of the terms of such liability in connection with the
exercise of the Write-Down and Conversion Powers of any EEA Resolution Authority.
[Signature Page Follows]
112
CONSTRUCTION LOAN AGREEMENT
CEDAR PORT LOGISTICS CENTER
DEAL ID 21-0070
265741215
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed as of the date first above written.
BORROWER:
CEDAR PORT NAVY BUILDING I, LLC,
a Texas limited liability company
By: Ceda:
a Texas,
sole member
Name
Title:
[Signatures Continue on Following Page]
[Signature Page]
CONSTRUCTION LOAN AGREEMENT
CEDAR PORT LOGISTICS CENTER
DEAL ID 21-0070
26574I2I5
EXHIBIT A
LEGAL DESCRIPTION OF REAL PROPERTY
BEING a 46.0434 acre tract of land located in the John Steele Survey, Abstract No. 227,
Chambers County, Texas, being a portion of that 6555 acre (by deed) tract of land described as
“Tract 7” conveyed unto TGS Cedar Port Partners, L.P. by deed recorded in Volume 1535, Page
85, of the Official Public Records of Chambers County, said 46.0434 acre tract being more
particularly described by metes and bounds as follows:
COMMENCING at a 5/8 inch iron rod with cap stamped “GORRONDONA” found at the
northeast corner of the 41.271 acre (by deed) tract of land conveyed unto BCIF Cedar Port
Logistics Center LLC by deed recorded under Clerk’s File No. 2019-147239, of the Official
Public Records of Chambers County, Texas and the northwest corner of Nita Way according to
the deed for 15.201 acres of land conveyed unto Chambers County Improvement District No. 1
recorded under Clerk’s File No. 2021-164127 of the Official Public Records of Chambers
County, said rod located in the south right-of-way line of the Grand Parkway (AKA State
Highway 99) (a public right-of-way of varying width) as recorded in Volume 650, Page 348, of
the Official Public Records of Chambers County, Texas, said rod having a grid coordinate value
of N= 13,835,077.59, and E= 3,272,854.31; THENCE, South 01 degrees 14 minutes 23 seconds
East, with the east line of said 41.271 acre tract common with west right-of-way line of said Nita
Way, for a distance of 626.06 feet, to a 5/8 inch iron rod with cap stamped "GORRONDONA"
found at the southwest corner of said Nita Way; THENCE, North 85 degrees 23 minutes 06
seconds East, with the south right-of-way line of said Nita Way, for a distance of 1,179.89 feet,
to the Point of Curvature of a curve to the left having a central angle of 03 degrees 26 minutes 17
seconds, a radius of 5,116.00 feet and a chord bearing of North 83 degrees 39 minutes 58
seconds East and a chord length of 306.93 feet; THENCE, continuing with said south right-ofway line of Nita Way and with said curve to the left, for an arc distance of 306.98 feet, to a point
for the northwest corner and the POINT OF BEGINNING of the herein described 46.0434 acre
tract, said point having a grid coordinate value of N= 13,834,580.47, E= 3,274,348.98, said point
being a point on a non-tangent curve to the left having a central angle of 09 degrees 21 minutes
31 seconds, a radius of 5,116.00 feet and a chord bearing of North 77 degrees 16 minutes 04
seconds East and a chord length of 834.71 feet;
THENCE, continuing with said south right-of-way line of Nita Way and with said curve to the
left, for an arc distance of 835.64 feet, to a 5/8 inch iron rod with cap stamped
"GORRONDONA" found for the northeast corner of the herein described 46.0434 acre tract;
THENCE, South 04 degrees 52 minutes 58 seconds East, for a distance of 2,395.04 feet, to a 5/8
inch iron rod with cap stamped "GORRONDONA" found for the Point of Curvature of a curve
to the right having a central angle of 90 degrees 00 minutes 00 seconds, a radius of 18.00 feet
and a chord bearing of South 40 degrees 07 minutes 02 seconds West and a chord length of
25.46 feet;
Exhibit A – Page 1
CONSTRUCTION LOAN AGREEMENT
CEDAR PORT LOGISTICS CENTER
DEAL ID 21-0070
265741215
THENCE, with said curve to the right for an arc distance of 28.27 feet, to a 5/8 inch iron rod
with cap stamped "GORRONDONA" found for the Point of Tangency;
THENCE, South 85 degrees 07 minutes 03 seconds West, for a distance of 569.74 feet, to a 5/8
inch iron rod with cap stamped "GORRONDONA" set for interior corner of the herein described
46.0434 acre tract, said 5/8 inch iron rod with cap stamped "GORRONDONA" being a point on
a non-tangent curve to the left having a central angle of 26 degrees 13 minutes 49 seconds, a
radius of 578.80 feet and a chord bearing of South 53 degrees 54 minutes 30 seconds East and a
chord length of 262.65 feet;
THENCE, with said curve to the left for an arc distance of 264.96 feet, to a 5/8 inch iron rod
with cap stamped "GORRONDONA" set for the end of the curve and being the southerly
southeast corner of the herein described 46.0434 acre tract in the north line of a proposed 200
foot wide railroad spur easement;
THENCE, South 85 degrees 07 minutes 03 seconds West, along said proposed 200 foot wide
railroad spur easement, for a distance of 94.95 feet, to a 5/8 inch iron rod with cap stamped
"GORRONDONA" set for the southerly southwest corner of the herein described 46.0434 acre
tract and being a point on a non-tangent curve to the right having a central angle of 21 degrees 47
minutes 32 seconds, a radius of 628.80 feet and a chord bearing of North 48 degrees 27 minutes
18 seconds West and a chord length of 237.72 feet;
THENCE, with said curve to the right for an arc distance of 239.16 feet, to a 5/8 inch iron rod
with cap stamped "GORRONDONA" set for the end of the curve and being an interior corner of
the herein described 46.0434 acre tract;
THENCE, South 85 degrees 07 minutes 03 seconds West, for a distance of 226.06 feet, to a 5/8
inch iron rod with cap stamped "GORRONDONA" found for the westerly southwest corner of
the herein described 46.0434 acre tract;
THENCE, North 03 degrees 42 minutes 05 seconds West, for a distance of 2,299.52 feet, to the
POINT OF BEGINNING and containing 46.0434 acres (2,005,650 square feet) of land, more or
less.
Together with the easements contained in that certain Easement Agreement dated, $SULO ,
2021, by and between TGS Cedar Port Partners, L.P. and Cedar Port Navy Building I, LLC
recorded on $SULO , 2021, recorded under County Clerk's File No.
Official Public
Records of Chambers County, Texas.
266127101
EXHIBIT B
LIST OF LOAN DOCUMENTS
1.
2.
3.
Loan Documents.
The documents listed in this Section 1, and amendments,
modifications and supplements thereto which have received the prior written consent of
Lender, together with any documents executed in the future that are approved by Lender
and that recite that they are “Loan Documents” for purposes of this Agreement are
collectively referred to herein as the Loan Documents.
1.1
This Agreement.
1.2
The Note.
1.3
The Security Instrument.
1.4
The Assignment of Management Agreement.
1.5
The Assignment of Interest Rate Protection Agreement.
1.6
The Assignment of Design-Build and Construction Documents.
1.7
The Assignment of Design and Consulting Agreements and Plans and
Specifications.
1.8
The Assignment of Sale Agreement.
1.9
The Post-Closing Obligations Agreement
1.10
The Financing Statement.
Other Documents (Which Are Not Loan Documents).
2.1
The Environmental Indemnity Agreement.
2.2
The Carveout Guaranty.
2.3
The Completion Guaranty.
2.4
The Interest and Carry Guaranty.
Additional Documents.
3.1
Opinion of Borrower’s legal counsel, Schwartz Sladkus Reich Greenberg Atlas
LLP, dated of even date herewith.
3.2
Opinion of Borrower’s legal counsel, Thompson Knight LLP, dated of even date
herewith.
Exhibit B – Page 1
CONSTRUCTION LOAN AGREEMENT
CEDAR PORT LOGISTICS CENTER
DEAL ID 21-0070
265741215
Exhibit B – Page 2
CONSTRUCTION LOAN AGREEMENT
CEDAR PORT LOGISTICS CENTER
DEAL ID 21-0070
265741215
EXHIBIT C
SUMMARY SOURCES AND USES
PROPERTY:
(A)
(B)
(C)
(D)
CEDAR PORT LOGISTICS
TOTAL COSTS
COSTS PAID
BY BORROWER
COSTS TO BE
PAID
BY BORROWER
DISBURSEMENT
BUDGET
BAYTOWN, TX
$9,426,555.00
Acquisition Costs
$2,885,821.00
$6,540,734.00
$397,882.00
$1,012,061.00
$500,000.00
$35,905,690.00
$3,467,139.00
$5,277,171.00
$149,940.00
$1,200,060.00
Closing Costs
Loan Fee
Hard Costs
Tenant Improvements
Soft Costs
Operating Reserve
Interest Reserve
TOTALS
$56,938,616.00
$6,540,734.00
$397,882.00
$614,179.00
$500,000.00
$35,905,690.00
$3,467,139.00
$5,277,171.00
$149,940.00
$1,200,060.00
$50,000,000.00
The foregoing Financial Requirement Analysis represents the total cost necessary in Borrower’s
estimation to perform Borrower’s obligations under the Loan Documents. Column A, “Total
Costs,” sets forth Borrower’s representation of the maximum cost for each item specified.
Column B, “Costs paid by Borrower,” sets forth Borrower’s representation of costs that
Borrower has paid or has caused to be paid from Borrower Equity for each item specified.
Column C, “Costs to be paid by Borrower,” sets forth Borrower’s representation of costs that
Borrower will pay or will cause to be paid from Borrower for each item specified. Column D,
“Disbursement Budget,” sets forth the portion of the Loan which has been allocated for each
item specified and will be disbursed pursuant to the terms, covenants, conditions and provisions,
if any, of this Agreement and the Loan Documents.
Exhibit C – Page 1
CONSTRUCTION LOAN AGREEMENT
CEDAR PORT LOGISTICS CENTER
DEAL ID 21-0070
265741215
EXHIBIT D
MAJOR CONTRACTS
x
x
x
x
x
x
x
Design-Build Contract
Purchase Agreement
Sale Agreement
Plastic Express Lease
Halff Civil Engineering Contract
RITD Rail Design Contract
Gorrondona Geotechnical Contract
Exhibit D – Page 1
CONSTRUCTION LOAN AGREEMENT
CEDAR PORT LOGISTICS CENTER
DEAL ID 21-0070
265741215
EXHIBIT E
FORM OF DISBURSEMENT REQUEST
PACIFICCAL DEBT III, LLC
10100 Santa Monica Blvd., Suite 1000
Los Angeles, CA 90067
Attention: Servicing
Re:
Cedar Port Navy Building I, LLC (“Borrower”)
Loan #21-0070 (“Loan”)
Ladies and Gentlemen:
Pursuant to the terms of that certain Construction Loan Agreement dated as of
_________________, 2021 (the “Loan Agreement”), and the representations, warranties and
covenants set forth therein and herein, Borrower hereby submits a disbursement request for the
amount of $__________. Initially capitalized terms used but not defined herein shall have the
same meanings as in the Loan Agreement.
This disbursement request (this “Request”) shall be deemed to be a representation by Borrower
that: (a) no Event of Default or Potential Default exists or will exist upon the making of this
requested disbursement; (b) the representations and warranties contained in the Loan Agreement
and in the other Loan Documents are, as of the date hereof, true, correct and complete in all
material respects; (c) all information set forth in this Request and on any exhibit attached hereto
is true, correct and complete in all material respects; and (d) all conditions precedent to the
disbursement to be made in connection with this Request as required under the Loan Agreement
and the other Loan Documents have been satisfied.
The following is an itemized statement of the costs incurred or due for which disbursement is
requested, together with:
(1) in the case of a disbursement from the Construction Holdback (Hard Costs) or the
Construction Holdback (Soft Costs), a reconciliation of costs incurred relative to the Approved
Construction Budget
(2) intentionally deleted
(3) intentionally deleted
(4) in the case of a disbursement from the Carry Cost Holdback, a statement of the
estimated Carry Cost shortfall to be funded, together with a reconciliation of the actual Carry
Cost shortfall for any prior month against the amount disbursed by Lender for Carry Cost
shortfalls for such prior month
(5) in the case of a disbursement of the Interest Holdback, a statement of the estimated
Debt Service shortfall to be funded, together with a reconciliation of the actual Debt Service
Exhibit E – Page 1
CONSTRUCTION LOAN AGREEMENT
CEDAR PORT LOGISTICS CENTER
DEAL ID 21-0070
265741215
shortfalls for any prior month against the amount disbursed by Lender for Debt Service shortfalls
for such prior month.
ITEM
TOTAL AMOUNT INCURRED LESS
PRIOR DISBURSEMENTS
1)
2)
TOTAL DISBURSEMENT REQUEST
[Signature Page Follows]
Exhibit E – Page 2
CONSTRUCTION LOAN AGREEMENT
CEDAR PORT LOGISTICS CENTER
DEAL ID 21-0070
265741215
This Request is submitted as of _______________, 20__.
CEDAR PORT NAVY BUILDING I, LLC,
a Texas limited liability company
By: Cedar Port Navy Partners I, LLC,
a Texas limited liability company, its sole member
By:
Name: John Knox Porter, Jr.
Title: Manager
Exhibit E – Page 3
CONSTRUCTION LOAN AGREEMENT
CEDAR PORT LOGISTICS CENTER
DEAL ID 21-0070
265741215
EXHIBIT F
INTENTIONALLY DELETED
Exhibit F – Page 1
CONSTRUCTION LOAN AGREEMENT
CEDAR PORT LOGISTICS CENTER
DEAL ID 21-0070
265741215
EXHIBIT G
APPROVED CONSTRUCTION BUDGET
Exhibit G – Page 1
CONSTRUCTION LOAN AGREEMENT
CEDAR PORT LOGISTICS CENTER
DEAL ID 21-0070
265741215
Description
Land Purchase Price
Civil Design and Rail Design
Material Testing
Site Signage
Site Work
Railyard
Building Shell
Building TI
Moving AllowancerFree Rent
JV Fee (Eastdil)
Marketing
Project and Leasing Legal
Administrative
Bank Closing Fees
Bank Loan Fee
Bank Lender InspectionsrTitle Search
Construction Loan Fee
Development Fees @ 4%
Interest / Op Cost
SiterBuilding Feesr Permits
Insurance (BR and GL)
Real Estate Taxes
Contingency @ 3%
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
Budget
10,301,000
200,000
210,000
75,000
9,040,926
4,355,371
21,709,393
3,467,139
1,436,474
750,000
20,000
75,000
75,000
150,000
200,000
25,000
500,000
1,572,313
1,350,000
250,000
276,000
100,000
800,000
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
800,405
12.87
0.25
0.26
0.09
11.30
5.44
27.12
4.33
1.79
0.94
0.02
0.09
0.10
0.10
0.18
0.03
0.62
1.96
1.69
0.31
0.34
0.12
1.00
TOTAL
$
56,938,616
$
71.14
EXHIBIT H
APPROVED CONSTRUCTION SCHEDULE
Exhibit H – Page 1
CONSTRUCTION LOAN AGREEMENT
CEDAR PORT LOGISTICS CENTER
DEAL ID 21-0070
265741215
(;+,%,7’352-(&76&+(’8/(
ID
Task Name
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
Start
Finish
Dec
Project Navy
Design/Permitting
NTP Design
HALFF Civil Grading and Site Plans
JACOBS Drainage (RPS) Review In Progress
Schematic Design
Design Development-SHELL
Construction Documents-SHELL
Joist and Deck Procurment Plans/Bid
Joist/Deck Lead Time
Tenant MEP Outline to EER
MEP Design-Core/Shell
Chambers County Core/Shell Review
Tenant Interior Plan/Design
Tenant Interior Permit Review
Core and Shell Permit
Tenant Improvement Permit
Site Work
Mobilize and SWPPP
Site Layout
Building Pad 1/4
Building Pad 1/4
Building Pad 1/4
Building Pad 1/4
Building Pad Complete
Cut and Grade Truck Court
Onsite Water to Building
Fire Loop
Site Sanitary
Site Storm
Paving Stabilization
Site Paving 1/8
Site Paving 1/8
Site Paving 1/8
Site Paving 1/8
Site Paving 1/8
Site Paving 1/8
Project: Project Navy
Date: Wed 3/24/21
Mon 1/11/21
Fri 2/5/21
Fri 2/5/21
Fri 2/5/21
Mon 1/25/21
Fri 1/21/22
Mon 2/8/21
Mon 2/8/21
Tue 3/2/21
Thu 3/18/21
Mon 2/8/21
Mon 2/22/21
Fri 3/19/21
Fri 2/19/21
Wed 3/3/21
Mon 2/15/21
Fri 3/19/21
Tue 4/20/21
Tue 4/20/21
Mon 5/24/21
Fri 5/28/21
Sun 6/20/21
Mon 1/11/21
Mon 4/5/21
Mon 4/12/21
Thu 4/15/21
Thu 4/29/21
Thu 5/13/21
Wed 5/26/21
Tue 6/8/21
Wed 6/9/21
Mon 7/19/21
Fri 8/6/21
Mon 7/19/21
Wed 6/9/21
Mon 7/19/21
Mon 8/16/21
Mon 8/23/21
Sun 8/29/21
Fri 9/3/21
Fri 9/10/21
Fri 9/17/21
Mon 2/22/21
Thu 3/18/21
Tue 4/20/21
Wed 3/3/21
Sun 7/25/21
Tue 2/23/21
Mon 4/12/21
Fri 5/28/21
Mon 5/24/21
Sun 7/4/21
Fri 5/28/21
Sun 6/20/21
Fri 12/24/21
Fri 4/9/21
Wed 4/14/21
Wed 4/28/21
Wed 5/12/21
Tue 5/25/21
Tue 6/8/21
Tue 6/8/21
Fri 7/16/21
Thu 8/5/21
Wed 9/8/21
Thu 7/29/21
Fri 7/16/21
Fri 8/13/21
Fri 8/20/21
Fri 8/27/21
Thu 9/2/21
Thu 9/9/21
Thu 9/16/21
Thu 9/23/21
Qtr 1, 2021
Jan
Feb
1/11
2/5
Qtr 2, 2021
Apr
Mar
May
Qtr 3, 2021
Jul
Jun
Aug
Qtr 4, 2021
Oct
Sep
Nov
Dec
NTP Design
2/5
HALFF Civil Grading and Site Plans
1/25
JACOBS Drainage (RPS) Review In Progress
2/8
Schematic Design
2/22
Design Development-SHELL
3/19
2/19
Construction Documents-SHELL
Joist and Deck Procurment Plans/Bid
3/3
2/15
Joist/Deck Lead Time
Tenant MEP Outline to EER
3/19
MEP Design-Core/Shell
4/20
Chambers County Core/Shell Review
4/20
Tenant Interior Plan/Design
5/24
Tenant Interior Permit Review
5/28
6/20
Site Work
4/5
4/12
Mobilize and SWPPP
Site Layout
4/15
Building Pad 1/4
4/29
Building Pad 1/4
5/13
Building Pad 1/4
5/26
Building Pad 1/4
6/8
Building Pad Complete
6/9
Cut and Grade Truck Court
7/19
Onsite Water to Building
8/6
7/19
6/9
Fire Loop
Site Sanitary
Site Storm
7/19
Paving Stabilization
8/16
Site Paving 1/8
8/23
Site Paving 1/8
8/29
Site Paving 1/8
9/3
Site Paving 1/8
9/10
9/17
Task
Project Summary
Manual Task
Start-only
Deadline
Split
Inactive Task
Duration-only
Finish-only
Progress
Milestone
Inactive Milestone
Manual Summary Rollup
External Tasks
Manual Progress
Summary
Inactive Summary
Manual Summary
External Milestone
Page 1
Site Paving 1/8
Site Paving 1/8
ID
Task Name
38
39
40
41
42
43
44
45
46
47
48
49
50
51
52
53
54
55
56
57
58
59
60
61
62
63
64
65
66
67
68
69
70
71
72
73
74
75
Start
Finish
Dec
Site Paving 1/8
Site Paving 1/8
Curb
Backfill at Landscape
Irrigation
Landscape
Striping
Building
Drill Foundations 1/4
Drill Foundations 1/4
Drill Foundations 1/4
Drill Foundations 1/4
Perimeter Foundations
Underground Plumbing
Slab on Grade 1
Slab on Grade 2
Slab on Grade 3
Slab on Grade 4
Slab on Grade 5
Slab on Grade 6
Slab on Grade 7
Slab on Grade 8
Slab on Grade 9
Slab on Grade 10
Slab on Grade 11
Slab on Grade 12
Slab on Grade 13
Slab on Grade 14
Slab on Grade 15
Slab on Grade 16
Slab on Grade 17
Slab on Grade 18
Slab on Grade 19
Slab on Grade 20
Back Fill LO Trench
Tilt Trench Concrete
Panels 1-25
Panels 26-50
Project: Project Navy
Date: Wed 3/24/21
Qtr 1, 2021
Jan
Feb
Fri 9/24/21 Thu 9/30/21
Fri 10/1/21 Thu 10/7/21
Fri 10/8/21 Mon 10/11/21
Tue 10/12/21 Mon 10/25/21
Tue 10/26/21 Thu 11/11/21
Fri 10/29/21 Tue 11/23/21
Wed 11/24/21Thu 12/2/21
Thu 5/13/21 Fri 1/21/22
Thu 5/13/21 Wed 5/26/21
Thu 5/27/21 Thu 6/10/21
Fri 6/11/21 Thu 6/24/21
Fri 6/25/21 Thu 7/8/21
Fri 6/11/21 Wed 6/23/21
Fri 7/9/21
Wed 8/11/21
Thu 5/27/21 Fri 5/28/21
Mon 5/31/21 Tue 6/1/21
Wed 6/2/21 Thu 6/3/21
Fri 6/4/21
Mon 6/7/21
Tue 6/8/21 Wed 6/9/21
Thu 6/10/21 Fri 6/11/21
Mon 6/14/21 Tue 6/15/21
Wed 6/16/21 Thu 6/17/21
Fri 6/18/21 Sun 6/20/21
Mon 6/21/21 Tue 6/22/21
Wed 6/23/21 Thu 6/24/21
Fri 6/25/21 Mon 6/28/21
Tue 6/29/21 Wed 6/30/21
Thu 7/1/21 Fri 7/2/21
Sun 7/4/21 Mon 7/5/21
Tue 7/6/21 Wed 7/7/21
Thu 7/8/21 Fri 7/9/21
Mon 7/12/21 Tue 7/13/21
Wed 7/14/21 Thu 7/15/21
Fri 7/16/21 Mon 7/19/21
Sun 7/4/21 Wed 8/25/21
Fri 7/23/21 Tue 9/14/21
Thu 6/10/21 Fri 6/18/21
Sun 6/20/21 Mon 6/28/21
Mar
Qtr 2, 2021
Apr
May
Qtr 3, 2021
Jul
Jun
Aug
Qtr 4, 2021
Oct
Sep
9/24
Nov
10/1
Site Paving 1/8
10/8
Curb
10/12
Backfill at Landscape
10/26
Irrigation
10/29
Landscape
11/24
5/13
Drill Foundations 1/4
5/27
Drill Foundations 1/4
6/11
Drill Foundations 1/4
6/25
Drill Foundations 1/4
6/11
Perimeter Foundations
7/9
5/27
Underground Plumbing
Slab on Grade 1
5/31
Slab on Grade 2
6/2
Slab on Grade 3
6/4
Slab on Grade 4
6/8
Slab on Grade 5
6/10
Slab on Grade 6
6/14
Slab on Grade 7
6/16
Slab on Grade 8
6/18
Slab on Grade 9
6/21
Slab on Grade 10
6/23
Slab on Grade 11
6/25
Slab on Grade 12
6/29
Slab on Grade 13
7/1
Slab on Grade 14
7/4
Slab on Grade 15
7/6
Slab on Grade 16
7/8
Slab on Grade 17
7/12
7/14
Slab on Grade 18
Slab on Grade 19
7/16
Slab on Grade 20
7/4
Back Fill LO Trench
7/23
6/10
6/20
Tilt Trench Concrete
Panels 1-25
Panels 26-50
Task
Project Summary
Manual Task
Start-only
Deadline
Split
Inactive Task
Duration-only
Finish-only
Progress
Milestone
Inactive Milestone
Manual Summary Rollup
External Tasks
Manual Progress
Summary
Inactive Summary
Manual Summary
External Milestone
Page 2
Dec
Site Paving 1/8
Striping
ID
Task Name
76
77
78
79
80
81
82
83
84
85
86
87
88
89
90
91
92
93
94
95
96
97
98
99
100
101
102
103
104
105
106
107
108
109
110
111
112
Start
Finish
Dec
Panels 51-100
Panels 101-150
Panels 151-200
Panels 201-225
Erect Panels
Steel 1/4
Steel 1/4
Steel 1/4
Steel 1/4
Roof 1/4
Roof 1/4
Roof 1/4
Roof 1/4
CLEAN/SEAL/CAULK 1/4 SLAB
CLEAN/SEAL/CAULK 1/4 SLAB
CLEAN/SEAL/CAULK 1/4 SLAB
CLEAN/SEAL/CAULK 1/4 SLAB
Electrical Rough/Underground
Lighting Overhead 1/4
Lighting Overhead 1/4
Lighting Overhead 1/4
Lighting Overhead 1/4
Sprinkler Systems Overhead 1/4
Sprinkler Systems Overhead 1/4
Sprinkler Systems Overhead 1/4
Sprinkler Systems Overhead 1/4
Mechanical Systems
Dock Equipment
Overhead Doors
Exterior Mandoors
Glass Glazing Entry 1
Glass Glazing Entry 2
Exterior Painting
Tenant Office Build Out-North
Tenant Office Build Out-South
Interior Panel Caulk
Substantial Completion
Project: Project Navy
Date: Wed 3/24/21
Qtr 1, 2021
Jan
Feb
Mar
Qtr 2, 2021
Apr
May
Thu 6/24/21 Fri 7/2/21
Wed 6/30/21 Wed 7/7/21
Mon 7/5/21 Tue 7/13/21
Fri 7/9/21
Mon 7/19/21
Thu 7/8/21 Fri 7/23/21
Sun 7/25/21 Tue 8/10/21
Tue 8/10/21 Thu 8/26/21
Fri 8/27/21 Mon 9/13/21
Mon 9/13/21 Wed 9/29/21
Fri 8/27/21 Fri 9/10/21
Fri 9/10/21 Mon 9/27/21
Thu 9/23/21 Fri 10/8/21
Fri 10/8/21 Mon 10/25/21
Tue 10/26/21 Mon 11/8/21
Tue 11/9/21 Mon 11/22/21
Tue 11/23/21 Mon 12/6/21
Tue 12/7/21 Mon 12/20/21
Thu 8/26/21 Tue 9/14/21
Fri 9/10/21 Wed 10/6/21
Thu 10/7/21 Tue 11/2/21
Tue 11/2/21 Mon 11/29/21
Mon 11/29/21Fri 12/24/21
Fri 9/10/21 Fri 10/1/21
Fri 10/1/21 Fri 10/22/21
Fri 10/22/21 Fri 11/12/21
Fri 11/12/21 Fri 12/3/21
Fri 11/12/21 Fri 12/3/21
Tue 10/26/21 Mon 12/27/21
Tue 11/30/21 Mon 1/10/22
Tue 10/26/21 Mon 11/29/21
Tue 10/12/21 Mon 10/18/21
Tue 10/19/21 Mon 10/25/21
Wed 8/18/21 Mon 10/4/21
Mon 9/27/21 Mon 1/10/22
Tue 10/26/21 Fri 1/21/22
Sun 7/25/21 Mon 8/30/21
Fri 1/21/22 Fri 1/21/22
Qtr 3, 2021
Jul
Jun
6/24
Panels 51-100
6/30
Aug
Qtr 4, 2021
Oct
Sep
Nov
Dec
Panels 101-150
7/5
Panels 151-200
7/9
Panels 201-225
7/8
Erect Panels
7/25
Steel 1/4
8/10
Steel 1/4
8/27
Steel 1/4
9/13
8/27
Steel 1/4
Roof 1/4
9/10
Roof 1/4
9/23
Roof 1/4
10/8
Roof 1/4
10/26
CLEAN/SEAL/CAULK 1/4 SLA
11/9
CLEAN/SEAL/CAULK 1
11/23
CLEAN/SEAL/CAU
12/7
8/26
CLEAN/SEA
Electrical Rough/Underground
9/10
Lighting Overhead 1/4
10/7
Lighting Overhead 1/4
11/2
Lighting Overhead 1
11/29
9/10
Lighting O
Sprinkler Systems Overhead 1/4
10/1
Sprinkler Systems Overhead 1/4
10/22
Sprinkler Systems Overhea
11/12
Sprinkler Systems
11/12
Mechanical System
10/26
Dock Equ
11/30
10/26
10/12
Glass Glazing Entry 1
10/19
8/18
10/26
Task
Project Summary
Manual Task
Start-only
Deadline
Split
Inactive Task
Duration-only
Finish-only
Progress
Milestone
Inactive Milestone
Manual Summary Rollup
External Tasks
Manual Progress
Summary
Inactive Summary
Manual Summary
External Milestone
Page 3
Glass Glazing Entry 2
Exterior Painting
9/27
7/25
Exterior Mandoors
Interior Panel Caulk
EXHIBIT I
MILESTONES/MILESTONE DATES
Description
Commencement of Construction
Phase I Tenant Acceptance
Phase II Tenant Acceptance/Substantial Completion Date
Milestone Date
June 5, 2021
December 15, 2021
February 1, 2022
Exhibit I – Page 1
CONSTRUCTION LOAN AGREEMENT
CEDAR PORT LOGISTICS CENTER
DEAL ID 21-0070
265741215
EXHIBIT J
INTENTIONALLY DELETED
Exhibit J – Page 1
CONSTRUCTION LOAN AGREEMENT
CEDAR PORT LOGISTICS CENTER
DEAL ID 21-0070
265741215
EXHIBIT K
FORM OF COMPLIANCE CERTIFICATE
Dated: ______________________________ (Month Day, Year)
To:
PACIFICCAL DEBT III, LLC, a Delaware limited liability company (together with its
successors and/or assigns, “Lender”)
This Compliance Certificate is made with reference to (a) that certain Construction Loan
Agreement dated as of April __, 2021 (the “Loan Agreement”), by and between Cedar Port
Navy Building I, LLC, a Texas limited liability company (“Borrower”), and Lender, and (b) the
Guaranty Documents. All initially capitalized terms used in this Compliance Certificate shall
have the meanings set forth for such terms in the Loan Agreement.
The undersigned Guarantor hereby certifies to Lender as follows:
1.
As of the date first set forth above, Guarantor is in compliance with all covenants and
obligations under the Guaranty Documents applicable to Guarantor, and all of the representations
and warranties respectively set forth therein are true and correct.
2.
As of the calendar year [or quarter] ending ____________________ (Month Day, Year),
Guarantor is in compliance with the Net Worth/Liquidity Covenant.
[Signature Page Follows]
Exhibit K – Page 1
CONSTRUCTION LOAN AGREEMENT
CEDAR PORT LOGISTICS CENTER
DEAL ID 21-0070
265741215
IN WITNESS WHEREOF, Guarantor has executed this Compliance Certificate as of the day and
year set forth above.
GUARANTOR:
CAPITAL DEVELOPMENT PARTNERS, INC.
a Texas corporation
By: ______________________________
Name: John Knox Porter, Jr.
Its: President
Exhibit K – Page 2
CONSTRUCTION LOAN AGREEMENT
CEDAR PORT LOGISTICS CENTER
DEAL ID 21-0070
265741215
EXHIBIT L
DEFINITION OF “SPECIAL PURPOSE ENTITY” AND RELATED DEFINED TERMS
“Special Purpose Entity” means a Person, other than an individual, which, since the date
of its formation and at all times prior to, on and after the date thereof, has complied with and
shall at all times comply with the following requirements:
(a)
Was, is and will be formed solely for the purpose of acquiring, developing,
owning, holding, selling, leasing, transferring, exchanging, financing, managing and operating
the Property, and transacting lawful business that is incident, necessary and appropriate to
accomplish the foregoing;;
(b)
Has not been, is not, and will not be engaged in any business unrelated to
acquiring, developing, owning, holding, selling, leasing, transferring, exchanging, financing
managing and operating the Property, and transacting lawful business that is incident, necessary
and appropriate to accomplish the foregoing;
(c)
Has not had, does not have and will not have any assets other than those related to
the Property;
(d)
Has not engaged in, sought or consented to, and will, to the fullest extent
permitted by law, not engage in, seek or consent to, (i) any dissolution, winding up, liquidation,
consolidation, merger, or sale of all or substantially all of its assets, (ii) except as permitted under
the terms of this Agreement, any transfer of partnership or membership interests (if such entity is
a general partner in a limited partnership or a member in a limited liability company), or (iii) any
amendment of its limited partnership agreement, articles of incorporation, articles of
organization, certificate of formation or operating agreement (as applicable) with respect to the
matters set forth in this definition without the written consent of Lender;
(e)
Has been, is, and intends to remain solvent and has paid and intends to continue to
pay its debts and liabilities (including, as applicable, shared personnel and overhead expenses)
from its assets as the same have or shall become due, and has maintained, is currently
maintaining and will endeavor to maintain adequate capital for the normal obligations reasonably
foreseeable in a business of its size and character and in light of its contemplated business
operations, provided that the foregoing shall not require any owner of Borrower to make any
additional capital contribution;
(f)
Has not failed, and will not fail, to correct any known misunderstanding regarding
the separate identity of such entity;
(g)
Has maintained and will maintain its accounts, financial statements, books, and
records separate from any other Person and has not permitted, and will not permit, its assets to be
listed as assets on the financial statement of any other entity (provided that Borrower’s assets
may be included in a consolidated financial statement of its Affiliates provided that
(i) appropriate notation shall be made on such consolidated financial statements to indicate the
Exhibit L – Page 1
CONSTRUCTION LOAN AGREEMENT
CEDAR PORT LOGISTICS CENTER
DEAL ID 21-0070
265741215
separateness of Borrower and such Affiliates and to indicate that Borrower’s assets and credit are
not available to satisfy the debts and other obligations of such Affiliates or any other Person, and
(ii) such assets shall be listed on Borrower’s own separate balance sheet);
(h)
Has filed and will file its own tax returns, except to the extent that it (i) has been
or is required to file consolidated tax returns by law, or (ii) is treated as a disregarded entity for
federal or state tax purposes;
(i)
Other than as provided in this Agreement, (i) has not commingled, and will not
commingle, its funds or assets with those of any other Person and (ii) has not participated and
will not participate in any cash management system with any other Person;
(j)
Has held and will hold its assets in its own name;
(k)
Has maintained and will maintain an arm’s-length relationship with its Affiliates;
(l)
Has paid and will pay its own liabilities and expenses, including the salaries of its
own employees (if any), out of its own funds and assets, and has maintained and will maintain a
sufficient number of employees (if any) in light of its contemplated business operations,
provided that the foregoing shall not require any owner of Borrower to make any additional
capital contributions;
(m)
Has observed and will observe in all material respects all partnership, corporate or
limited liability company formalities, as applicable;
(n)
Has not had, and will not have, any indebtedness other than Permitted
Indebtedness;
(o)
Except in connection with the Loan Documents, has not assumed or guaranteed or
become obligated for, and will not assume or guarantee or become obligated for, the debts of any
other Person and has not held out and will not hold out its credit as being available to satisfy the
obligations of any other Person except as permitted pursuant to this Agreement;
(p)
Has not acquired and will not acquire obligations or securities of its partners,
members or shareholders or any other Affiliate;
(q)
Has allocated and will allocate, fairly and reasonably, any overhead expenses that
are shared with any Affiliate, including paying for shared office space and services performed by
any employee of an Affiliate;
(r)
Has maintained and used, now maintains and uses, and will maintain and use,
separate stationery, invoices and checks bearing its name, and all stationery, invoices, and checks
utilized by such Person or utilized to collect its funds or pay its expenses have borne and shall
bear its own name and have not borne and shall not bear the name of any other entity unless such
entity is clearly designated as being such Person’s agent;
Exhibit L – Page 2
CONSTRUCTION LOAN AGREEMENT
CEDAR PORT LOGISTICS CENTER
DEAL ID 21-0070
265741215
(s)
Has not pledged and will not pledge its assets for the benefit of any other Person
other than Lender in connection with the Loan;
(t)
Has conducted and will conduct its business in its name or in a name franchised
or licensed to it by an entity other than an Affiliate of Borrower, and has held itself out and
identified itself, and will hold itself out and identify itself, as a separate and distinct entity under
its own name or in a name franchised or licensed to it by an entity other than an Affiliate of
Borrower and not as a division or part of any other Person, except in each case for services
rendered under a business management services agreement with an Affiliate that complies with
the terms contained in clause (x) below, so long as the manager, or equivalent thereof, under
such business management services agreement holds itself out as an agent of Borrower;
(u)
Has maintained and will maintain its assets in such a manner that it will not be
costly or difficult to segregate, ascertain or identify its individual assets from those of any other
Person;
(v)
Has not made and will not make loans to any Person or hold evidence of
Indebtedness issued by any other Person or entity (other than cash and investment-grade
securities issued by an entity that is not an Affiliate of or subject to common ownership with
such entity) except that Borrower, from time to time in the ordinary course of business, may
agree with tenants under Leases of all or any portion of the Property to make certain tenant
improvement allowances available to such tenants;
(w)
Has not identified and will not identify its constituent partners, members or
shareholders (as applicable), or any Affiliate of any of them, as a division or part of it, and has
not identified itself, and shall not identify itself, as a division of any other Person;
(x)
Has not entered into or been a party to, and will not enter into or be a party to, any
transaction with its partners, members, shareholders or Affiliates except (i) in the ordinary course
of its business and on terms which are intrinsically fair, commercially reasonable and are no less
favorable to it than would be obtained in a comparable arm’s-length transaction with an
unrelated third party, and (ii) in connection with this Agreement;
(y)
Has not had and will not have any obligation to indemnify, and has not
indemnified and will not indemnify, its partners, officers, directors, managers or members, as the
case may be, unless such an obligation was and is fully subordinated to the Obligations and will
not constitute a claim against such Person in the event that cash flow in excess of the amount
required to pay the Obligations is insufficient to pay such obligation;
(z)
Except as provided in the Loan Documents, does not and will not have any of its
obligations guaranteed by any Affiliate;
(aa)
[intentionally omitted];
(bb) If such entity is a corporation, has had, now has and will have at least one (1)
Independent Director, and has not caused or allowed, and will not cause or allow, the board of
Exhibit L – Page 3
CONSTRUCTION LOAN AGREEMENT
CEDAR PORT LOGISTICS CENTER
DEAL ID 21-0070
265741215
directors of such entity to take any Bankruptcy Action (or to collude with, or otherwise assist,
solicit, or cause to be solicited an involuntary Bankruptcy Action) or any other action requiring
the unanimous affirmative vote of one hundred percent (100%) of the members of its board of
directors unless at least one (1) Independent Director shall have participated in such vote and all
of the directors have participated in such vote;
(cc) If such entity is a limited liability company, it will have an operating agreement
which provides that as long as any portion of the Debt remains outstanding: (i) the company shall
have at least one (1) Independent Manager that shall be a duly-appointed “manager” of the
limited liability company, and the limited liability company shall not take any Bankruptcy
Action (or to collude with, or otherwise assist, solicit, or cause to be solicited an involuntary
Bankruptcy Action) unless (A) such Bankruptcy Action is approved by the prior unanimous
written consent of all members and managers thereof (including any Independent Manager), and
(B) at the time of such action such limited liability company has at least one (1) manager who is
an Independent Manager (provided that the managers shall only have the rights and duties
expressly set forth in the limited liability company’s operating agreement); (ii) upon the
occurrence of any event that causes the last member of the limited liability company to cease to
be a member of such limited liability company (other than upon an assignment by such member
of all of its limited liability company interest in such limited liability company and the admission
of the transferee in accordance with the limited liability company’s operating agreement), (A) the
person acting as Independent Manager of such limited liability company shall, without any
action of any Person and simultaneously with such member ceasing to be a member of such
limited liability company, automatically be admitted as the “Special Member” (an Independent
Manager in such capacity, a “Special Member”) and shall preserve and continue the existence
of such limited liability company without dissolution, and (B) without limiting the provisions of
the foregoing clause (A), upon the occurrence of any event that causes the last remaining
member of the limited liability company to cease to be a member of the limited liability company
or that causes the sole member to cease to be a member of the limited liability company (other
than upon continuation of the limited liability company without dissolution upon an assignment
by the member of all of its limited liability company interest in the limited liability company and
the admission of the transferee in accordance with the limited liability company’s operating
agreement), to the fullest extent permitted by law, the personal representative of such member
shall be authorized to, and shall, within ninety (90) days after the occurrence of the event that
terminated the continued membership of such member in such limited liability company, agree in
writing to continue the limited liability company without dissolution and to the admission of the
personal representative or its nominee or designee, as the case may be, as a substitute member of
such limited liability company, effective as of the occurrence of the event that terminated the
continued membership of such member in such limited liability company; (iii) no Special
Member may resign or transfer its rights as Special Member unless (A) a successor Special
Member has been admitted to such limited liability company as a Special Member, and (B) such
successor Special Member has also accepted its appointment as an Independent Manager and
executed a counterpart to the limited liability company’s operating agreement; provided,
however, the Special Member shall automatically cease to be a member of the limited liability
company upon the admission to the limited liability company of a substitute member; (iv) the
Special Member shall be a member of the limited liability company that has no interest in the
Exhibit L – Page 4
CONSTRUCTION LOAN AGREEMENT
CEDAR PORT LOGISTICS CENTER
DEAL ID 21-0070
265741215
profits, losses and capital of the limited liability company and has no right to receive any
distributions of limited liability company assets; a Special Member shall not be required to make
any capital contributions to the limited liability company and shall not receive a limited liability
company interest in the limited liability company; (v) a Special Member, in its capacity as
Special Member, may not bind the limited liability company; (vi) except as required by any
mandatory provision of applicable law, a Special Member, in its capacity as Special Member,
shall have no right to vote on, approve or otherwise consent to any action by, or matter relating
to, the limited liability company, including the merger, consolidation or conversion of the limited
liability company; (vii) to implement the admission to the limited liability company of each
Special Member, each Person acting as an Independent Manager shall execute a counterpart to
the limited liability company’s operating agreement; (viii) prior to its admission to the limited
liability company as Special Member, each Person acting as an Independent Manager shall not
be a member of the limited liability company; (ix) such limited liability company shall be
dissolved, and its affairs shall be wound up only upon the first to occur of the following (but
subject to clause (ii) above): (A) the termination of the legal existence of the last remaining
member of such limited liability company or the occurrence of any other event which terminates
the continued membership of the last remaining member of such limited liability company in
such limited liability company unless the business of such limited liability company is continued
in a manner permitted by its operating agreement and applicable law, or (B) the entry of a decree
of judicial dissolution of the limited liability company under applicable law; (x) neither the
bankruptcy of any member of the limited liability company or the Special Member shall cause
such member or Special Member, respectively, to cease to be a member of such limited liability
company and upon the occurrence of such an event, the business of such limited liability
company shall continue without dissolution; (xi) in the event of dissolution of such limited
liability company, such limited liability company shall conduct only such activities as are
necessary to wind up its affairs (including the sale of the assets of such limited liability company
in an orderly manner), and the assets of such limited liability company shall be applied in the
manner, and in the order of priority, set forth in the limited liability company’s operating
agreement; and (xii) to the fullest extent permitted by law, except as otherwise expressly
provided in the limited liability company’s operating agreement, each member of the limited
liability company and the Special Members shall irrevocably waive any right or power that they
might have to cause such limited liability company or any of its assets to be partitioned, to cause
the appointment of a receiver for all or any portion of the assets of such limited liability
company, to compel any sale of all or any portion of the assets of such limited liability company
pursuant to any applicable Legal Requirements or to file a complaint or to institute any
proceeding at law or in equity to cause the dissolution, liquidation, winding up or termination of
such limited liability company;
(dd) The organizational documents of such entity shall further provide that: (i) such
entity shall not be permitted take any action which, under the terms of any organizational
documents of such entity, requires a unanimous written consent of the board of directors or
managers of such entity unless at the time of such action there shall be at least one (1)
Independent Director serving in such capacity as required by the terms hereof; (ii) no
Independent Director or Independent Manager may be removed or replaced except for Cause;
(iii) any resignation, removal or replacement of any Independent Director or Independent
Exhibit L – Page 5
CONSTRUCTION LOAN AGREEMENT
CEDAR PORT LOGISTICS CENTER
DEAL ID 21-0070
265741215
Manager shall not be effective without five (5) Business Days prior written notice to Lender
accompanied by a statement as to the reasons for such removal, the identity of the proposed
replacement Independent Director or Independent Manager, and a certificate that the replacement
Independent Director or Independent Manager satisfies the applicable terms and conditions of
the definition of “Independent Director/Independent Manager”; (iv) to the fullest extent
permitted by applicable Legal Requirements and notwithstanding any duty otherwise existing at
law or in equity, the Independent Director or Independent Manager shall consider only the
interests of the constituent owners of such entity and such entity (including such entity’s
creditors) in acting or otherwise voting on a Bankruptcy Action (which such fiduciary duties to
the owners of such entity and such entity’s creditors, in each case, shall be deemed to apply
solely to the extent of their respective economic interests in such entity exclusive of (A) all other
interests, (B) the interests of other affiliates of the owners of such entity and such entity, and
(C) the interests of any group of affiliates of which the owners of such entity or such entity is a
part); (v) other than as provided in clause (iv) above, to the fullest extent permitted by law the
Independent Director(s) or Independent Manager shall not have any fiduciary duties to any
owners of such entity, any directors of such entity, or any other Person; (vi) the foregoing shall
not eliminate the implied contractual covenant of good faith and fair dealing under applicable
Legal Requirements; and (vii) to the fullest extent permitted by applicable Legal Requirements,
an Independent Director or Independent Manager shall not be liable to such entity, any owners of
such entity, or any other Person bound by the limited liability company’s operating agreement
for breach of contract or breach of duties (including fiduciary duties), unless the Independent
Director or Independent Manager acted in bad faith or engaged in willful misconduct;
(ee) Has complied and will comply with all of the terms and provisions contained in
its organizational documents;
(ff)
The statement of facts contained in its organizational documents are true and
correct and will remain true and correct;
(gg) Has and will have an express acknowledgment in its organizational documents
that
Lender
is
an
intended
third-party
beneficiary
of
the
“special
purpose/separateness/bankruptcy remote” provisions (as applicable) of such organizational
documents;
(hh) Has not and will not consent to any other Person (i) operating its business in the
name of such Special Purpose Entity, (ii) acting in the name of such Special Purpose Entity,
(iii) using such Special Purpose Entity’s stationery or business forms, (iv) holding out its credit
as being available to satisfy the obligations of such Special Purpose Entity, (v) having
contractual liability for the payment of any of the liabilities of such Special Purpose Entity
(except pursuant to the limited extent provided under the Loan Documents), or (vi) failing to at
all times specify to all relevant third parties that it is acting in a capacity other than as the
applicable Special Purpose Entity; and
(ii)
With respect to Borrower, has a limited liability company operating agreement
that provides that (A) Guarantor acts as a “special manager” of Borrower that is a “manager”
Exhibit L – Page 6
CONSTRUCTION LOAN AGREEMENT
CEDAR PORT LOGISTICS CENTER
DEAL ID 21-0070
265741215
solely for the purpose of such manager’s approval being required for the commencement of a
Bankruptcy Action with respect to Borrower, and (B) the limited liability company shall not take
any Bankruptcy Action (or to collude with, or otherwise assist, solicit, or cause to be solicited an
involuntary Bankruptcy Action) unless such Bankruptcy Action is approved by the Guarantor in
such capacity as manager of the limited liability company.
“Cause” means, with respect to an Independent Director or Independent Manager,
(a) acts or omissions by such Person that constitute willful disregard of such Person’s duties
under the applicable agreements, (b) that such Person has engaged in or has been charged with,
or has been convicted of, fraud or other acts constituting a crime under any law applicable to
such Person, (c) that such Independent Director or Independent Manager is unable to perform his
or her duties as an Independent Director or Independent Manager due to death, disability, or
incapacity, (d) that such Independent Director or Independent Manager no longer meets the
definition of “Independent Director” or “Independent Manager” or (e) that the fees charged by
such Person are materially more than is otherwise customary in the market.
“Independent Director” or “Independent Manager” means, of any Special Purpose
Entity, or if such Special Purpose Entity is a limited partnership, the general partner of such
Special Purpose Entity, an individual who has prior experience as an independent director,
independent manager or independent member with at least three years of employment experience
and who is provided by CT Corporation, Corporation Service Company, National Registered
Agents, Inc. (or its affiliate, NRAI Entity Services, LLC), Wilmington Trust Company, Stewart
Management Company, Lord Securities Corporation, SPE Independent Director, LLC, or, if
none of those companies is then providing professional Independent Directors or Independent
Managers, another nationally-recognized company approved by Lender, in each case that is not
an Affiliate of the Borrower Parties and that provides professional Independent Directors and
Independent Managers and other corporate services in the ordinary course of its business, and
which individual is duly appointed as an Independent Manager or Independent Director, or as a
member of the board of directors or board of managers of such corporation or limited liability
company, as applicable, and for the five-year period prior to his or her appointment as an
Independent Director has not been and during the continuation of his or her serving as an
Independent Director will not be, any of the following:
(a)
a member (other than a Special Member), manager, director, trustee,
officer, employee, attorney, or counsel of any of the Borrower Parties or their Affiliates
(provided that such person may be an Independent Director or Independent Manager of
Borrower as long as they are not a member, manager, director, trustee, officer, employee,
attorney, or counsel of any other Borrower Party or Affiliate of a Borrower Party, except that a
Person who otherwise satisfies the definition of Independent Director or Independent Manager
other than this subparagraph (a) by reason of being the independent director or independent
manager of a “special purpose entity” that is an Affiliate of Borrower shall not be disqualified
from serving as an Independent Director or Independent Manager of Borrower if such Person is
either (i) a professional Independent Director or Independent Manager, or (ii) the fees that such
individual earns from serving as independent director or independent manager of Affiliates of
Borrower in any given year constitute in the aggregate less than five percent (5%) of such
Exhibit L – Page 7
CONSTRUCTION LOAN AGREEMENT
CEDAR PORT LOGISTICS CENTER
DEAL ID 21-0070
265741215
individual’s annual income for that year);
(b)
a creditor, customer, supplier, service provider (including provider of
professional services) or other Person who derives any of its purchases or revenues from its
activities with any Borrower Party or any Affiliate of a Borrower Party (other than an
Independent Manager or Independent Director provided by a nationally-recognized company that
routinely provides professional Independent Directors or Independent Managers and other
corporate services to any Borrower Party or any Affiliate of a Borrower Party in the ordinary
course of business);
(c)
a direct or indirect legal or beneficial owner in any Borrower Party or any
Affiliate of a Borrower Party;
(d)
a member of the immediate family of any member, manager, employee,
attorney, customer, supplier or other Person referred to above; and
(e)
a Person Controlling or under the common Control of anyone listed in
clauses (a) through (d) above.
Exhibit L – Page 8
CONSTRUCTION LOAN AGREEMENT
CEDAR PORT LOGISTICS CENTER
DEAL ID 21-0070
265741215
EXHIBIT M
FORM OF U.S. TAX COMPLIANCE CERTIFICATES
See Exhibit M-1 through Exhibit M-4 attached hereto and incorporated herein by this reference.
Exhibit M – Page 1
CONSTRUCTION LOAN AGREEMENT
CEDAR PORT LOGISTICS CENTER
DEAL ID 21-0070
265741215
EXHIBIT M-1
FORM OF U.S. TAX COMPLIANCE CERTIFICATE FOR FOREIGN LENDERS THAT
ARE NOT PARTNERSHIPS FOR U.S. FEDERAL INCOME TAX PURPOSES
U.S. TAX COMPLIANCE CERTIFICATE
(For Foreign Lenders That Are Not Partnerships For U.S. Federal Income Tax Purposes)
Reference is hereby made to the Construction Loan Agreement dated as of
______________, 20__ (as amended, restated, replaced, supplemented or otherwise modified
from time to time, the “Loan Agreement”), by and between ____________________________,
as Lender, and Cedar Port Navy Building I, LLC, as Borrower.
Pursuant to the provisions of Section 2.19(e) of the Loan Agreement, the undersigned
hereby certifies that (i) it is the sole record and beneficial owner of the Loan (as well as any Note
evidencing such Loan) in respect of which it is providing this certificate, (ii) it is not a bank
within the meaning of Section 881(c)(3)(A) of the Code, (iii) it is not a ten percent shareholder of
Borrower within the meaning of Section 871(h)(3)(B) of the Code and (iv) it is not a controlled
foreign corporation related to Borrower as described in Section 881(c)(3)(C) of the Code.
The undersigned has furnished Borrower with a certificate of its non-U.S. Person status
on IRS Form W-8BEN or IRS Form W-8BEN-E, as applicable. By executing this certificate, the
undersigned agrees that (1) if the information provided on this certificate changes, the
undersigned shall promptly so inform Borrower, and (2) the undersigned shall have at all times
furnished Borrower with a properly completed and currently effective certificate in either the
calendar year in which each payment is to be made to the undersigned, or in either of the two
calendar years preceding such payments.
Unless otherwise defined herein, terms defined in the Loan Agreement and used herein
shall have the meanings given to them in the Loan Agreement.
[SIGNATURE BLOCK OF LENDER]
Date: _______________________
Exhibit M-1 – Page 1
CONSTRUCTION LOAN AGREEMENT
CEDAR PORT LOGISTICS CENTER
DEAL ID 21-0070
265741215
EXHIBIT M-2
FORM OF U.S. TAX COMPLIANCE CERTIFICATE FOR FOREIGN PARTICIPANTS
THAT ARE NOT PARTNERSHIPS FOR U.S. FEDERAL INCOME TAX PURPOSES
U.S. TAX COMPLIANCE CERTIFICATE
(For Foreign Participants That Are Not Partnerships For U.S. Federal Income Tax
Purposes)
Reference is hereby made to the Construction Loan Agreement dated as of
______________, 20__ (as amended, restated, replaced, supplemented or otherwise modified
from time to time, the “Loan Agreement”), by and between ____________________________,
as Lender, and Cedar Port Navy Building I, LLC, as Borrower.
Pursuant to the provisions of Section 2.19(e) of the Loan Agreement, the undersigned
hereby certifies that (i) it is the sole record and beneficial owner of the participation in respect of
which it is providing this certificate, (ii) it is not a bank within the meaning of Section
881(c)(3)(A) of the Code, (iii) it is not a ten percent shareholder of the Borrower within the
meaning of Section 871(h)(3)(B) of the Code, and (iv) it is not a controlled foreign corporation
related to the Borrower as described in Section 881(c)(3)(C) of the Code.
The undersigned has furnished its participating Lender with a certificate of its non-U.S.
Person status on IRS Form W-8BEN or IRS Form W-8BEN-E, as applicable. By executing this
certificate, the undersigned agrees that (1) if the information provided on this certificate changes,
the undersigned shall promptly so inform such Lender in writing, and (2) the undersigned shall
have at all times furnished such Lender with a properly completed and currently effective
certificate in either the calendar year in which each payment is to be made to the undersigned, or
in either of the two calendar years preceding such payments.
Unless otherwise defined herein, terms defined in the Loan Agreement and used herein
shall have the meanings given to them in the Loan Agreement.
[SIGNATURE BLOCK OF PARTICIPANT]
Date: _______________________
Exhibit M-2 – Page 1
CONSTRUCTION LOAN AGREEMENT
CEDAR PORT LOGISTICS CENTER
DEAL ID 21-0070
265741215
EXHIBIT M-3
FORM OF U.S. TAX COMPLIANCE CERTIFICATE FOR FOREIGN PARTICIPANTS
THAT ARE PARTNERSHIPS FOR U.S. FEDERAL INCOME TAX PURPOSES
U.S. TAX COMPLIANCE CERTIFICATE
(For Foreign Participants That Are Partnerships For U.S. Federal Income Tax Purposes)
Reference is hereby made to the Construction Loan Agreement dated as of
______________, 20__ (as amended, restated, replaced, supplemented or otherwise modified
from time to time, the “Loan Agreement”), by and between ____________________________,
as Lender, and Cedar Port Navy Building I, LLC, as Borrower.
Pursuant to the provisions of Section 2.19(e) of the Loan Agreement, the undersigned
hereby certifies that (i) it is the sole record owner of the participation in respect of which it is
providing this certificate, (ii) its direct or indirect partners/members are the sole beneficial
owners of such participation, (iii) with respect such participation, neither the undersigned nor
any of its direct or indirect partners/members is a bank extending credit pursuant to a loan
agreement entered into in the ordinary course of its trade or business within the meaning of
Section 881(c)(3)(A) of the Code, (iv) none of its direct or indirect partners/members is a ten
percent shareholder of Borrower within the meaning of Section 871(h)(3)(B) of the Code and (v)
none of its direct or indirect partners/members is a controlled foreign corporation related to
Borrower as described in Section 881(c)(3)(C) of the Code.
The undersigned has furnished its participating Lender with IRS Form W-8IMY
accompanied by one of the following forms from each of its partners/members that is claiming
the portfolio interest exemption: (i) an IRS Form W-8BEN or IRS Form W-8BEN-E, as
applicable, or (ii) an IRS Form W-8IMY accompanied by an IRS Form W-8BEN or IRS Form
W-8BEN-E, as applicable, from each of such partner’s/member’s beneficial owners that is
claiming the portfolio interest exemption. By executing this certificate, the undersigned agrees
that (1) if the information provided on this certificate changes, the undersigned shall promptly so
inform such Lender and (2) the undersigned shall have at all times furnished such Lender with a
properly completed and currently effective certificate in either the calendar year in which each
payment is to be made to the undersigned, or in either of the two calendar years preceding such
payments.
Unless otherwise defined herein, terms defined in the Loan Agreement and used herein
shall have the meanings given to them in the Loan Agreement.
[SIGNATURE BLOCK OF PARTICIPANT]
Date: _______________________
Exhibit M-3 – Page 1
CONSTRUCTION LOAN AGREEMENT
CEDAR PORT LOGISTICS CENTER
DEAL ID 21-0070
265741215
EXHIBIT M-4
FORM OF U.S. TAX COMPLIANCE CERTIFICATE FOR FOREIGN LENDERS THAT
ARE PARTNERSHIPS FOR U.S. FEDERAL INCOME TAX PURPOSES
U.S. TAX COMPLIANCE CERTIFICATE
(For Foreign Lenders That Are Partnerships For U.S. Federal Income Tax Purposes)
Reference is hereby made to the Construction Loan Agreement dated as of
______________, 20__ (as amended, restated, replaced, supplemented or otherwise modified
from time to time, the “Loan Agreement”), by and between ____________________________,
as Lender, and Cedar Port Navy Building I, LLC, as Borrower.
Pursuant to the provisions of Section 2.19(e) of the Loan Agreement, the undersigned
hereby certifies that (i) it is the sole record owner of the Loan (as well as any Note evidencing
such Loan) in respect of which it is providing this certificate, (ii) its direct or indirect
partners/members are the sole beneficial owners of such Loan (as well as any Note evidencing
such Loan), (iii) with respect to the extension of credit pursuant to this Agreement or any other
Loan Document, neither the undersigned nor any of its direct or indirect partners/members is a
bank extending credit pursuant to a loan agreement entered into in the ordinary course of its trade
or business within the meaning of Section 881(c)(3)(A) of the Code, (iv) none of its direct or
indirect partners/members is a ten percent shareholder of Borrower within the meaning of
Section 871(h)(3)(B) of the Code and (v) none of its direct or indirect partners/members is a
controlled foreign corporation related to Borrower as described in Section 881(c)(3)(C) of the
Code.
The undersigned has furnished Borrower with IRS Form W-8IMY accompanied by one
of the following forms from each of its partners/members that is claiming the portfolio interest
exemption: (i) an IRS Form W-8BEN or IRS Form W-8BEN-E, as applicable, or (ii) an IRS
Form W-8IMY accompanied by an IRS Form W-8BEN or IRS Form W-8BEN-E, as applicable,
from each of such partner’s/member’s beneficial owners that is claiming the portfolio interest
exemption. By executing this certificate, the undersigned agrees that (1) if the information
provided on this certificate changes, the undersigned shall promptly so inform Borrower, and
(2) the undersigned shall have at all times furnished Borrower with a properly completed and
currently effective certificate in either the calendar year in which each payment is to be made to
the undersigned, or in either of the two calendar years preceding such payments.
Unless otherwise defined herein, terms defined in the Loan Agreement and used herein
shall have the meanings given to them in the Loan Agreement.
[SIGNATURE BLOCK OF LENDER]
Date: _______________________
Exhibit M-4 – Page 1
CONSTRUCTION LOAN AGREEMENT
CEDAR PORT LOGISTICS CENTER
DEAL ID 21-0070
265741215
EXHIBIT N
SPECIMEN SIGNATURE
Porter, Jr.
Bin Feldmann
Exhibit N -Page 1
CONSTRUCTION LOAN AGREEMENT
CEDAR PORT LOGISTICS CENTER
DEAL ID 21-0070
265741215
SCHEDULE I
LIST OF PROMISSORY NOTES
1.
That certain Promissory Note A of even date herewith, made by Borrower in favor of
Lender, in the maximum principal amount of Thirty Seven Million Five Hundred
Thousand and 00/100 Dollars ($37,500,000.00).
2.
That certain Promissory Note B of even date herewith, made by Borrower in favor of
Lender, in the maximum principal amount Twelve Million Five Hundred Thousand and
00/100 Dollars ($12,500,000.00).
Schedule I – Page 1
CONSTRUCTION LOAN AGREEMENT
CEDAR PORT LOGISTICS CENTER
DEAL ID 21-0070
265741215
SCHEDULE II
ORGANIZATIONAL CHART
Schedule II – Page 1
CONSTRUCTION LOAN AGREEMENT
CEDAR PORT LOGISTICS CENTER
DEAL ID 21-0070
265741215
SCHEDULE III
APPROVED AFFILIATE FEES & AGREEMENTS
x
x
Amounts reflected on the acquisition closing statement dated of even date herewith.
Agreements and amounts reflected in any Approved Budget.
Schedule III – Page 1
CONSTRUCTION LOAN AGREEMENT
CEDAR PORT LOGISTICS CENTER
DEAL ID 21-0070
265741215
SCHEDULE IV
LIST OF PLANS AND SPECIFICATIONS
x
x
x
x
Final Outline specs will be included in the Design-Build Contract.
Halff Civil Plans are completed in for permitting.
Architectural, structural, and MEP are all underway.
Civil Plans - 2021-03-30_Project Navy-Civil and Landscape.pdf
Schedule IV – Page 1
CONSTRUCTION LOAN AGREEMENT
CEDAR PORT LOGISTICS CENTER
DEAL ID 21-0070
265741215
SCHEDULE V
GOVERNMENT APPROVALS
None.
Schedule V – Page 1
CONSTRUCTION LOAN AGREEMENT
CEDAR PORT LOGISTICS CENTER
DEAL ID 21-0070
265741215