Document:

a6488986ex10_67.htm

 

Exhibit 10.67

 

 

ACQUISITION AND PROJECT LOAN

AGREEMENT

 

among

 

ACADIA-PA EAST FORDHAM ACQUISITIONS, LLC,

a Delaware limited liability company

as Lead Borrower

 

and

 

ACADIA-PA EAST FORDHAM ACQUISITIONS, LLC,

a Delaware limited liability company

FORDHAM PLACE OFFICE, LLC

a Delaware limited liability company

as Borrower,

 

and

 

The LENDERS Party Hereto,

as Lenders

 

and

 

EUROHYPO AG, NEW YORK BRANCH

as Administrative Agent

 

Date:  As of October 5, 2007

 

 

  

  

  

TABLE OF CONTENTS

 

 

	 	Page
	 	 
	
ARTICLE 1 CERTAIN DEFINITIONS

	
2

	 	 
	
Section 1.1

	
Certain Definitions

	
2

	 	 	 
	
ARTICLE 2 LOAN TERMS

	
29

	 	 
	
Section 2.1

	
The Commitments, Loans and Notes.

	
29

	
Section 2.2

	
Conversions or Continuations of Loans

	
30

	
Section 2.3

	
Interest Rate; Late Charge.

	
31

	
Section 2.4

	
Terms of Payment

	
32

	
Section 2.5

	
Extension of Maturity Date.

	
34

	
Section 2.6

	
Pro Rata Treatment of Payments; Etc.

	
38

	
Section 2.7

	
Yield Protection; Etc.

	
41

	
Section 2.8

	
Agency Fee

	
46

	
Section 2.9

	
Exit Fee

	
46

	 	 	 
	
ARTICLE 3 INSURANCE, CONDEMNATION, AND IMPOUNDS

	
46

	 	 
	
Section 3.1

	
Insurance.

	
46

	
Section 3.2

	
Condemnation Awards

	
51

	
Section 3.3

	
Use and Application of Insurance Proceeds

	
52

	
Section 3.4

	
Disbursement of Proceeds.

	
52

	 	 	 
	
ARTICLE 4 DISBURSEMENTS OF THE LOANS

	
54

	 	 
	
Section 4.1

	
General Conditions.

	
54

	
Section 4.2

	
Procedure for Making Disbursements of Loan Proceeds.

	
55

	
Section 4.3

	
Loan Balancing.

	
55

	
Section 4.4

	
Budget Contingencies

	
57

	
Section 4.5

	
Budget Line Items

	
58

	
Section 4.6

	
Interest; Fees; and Expenses.

	
58

	
Section 4.7

	
Reserved.

	
59

	
Section 4.8

	
Tenant Improvement Allowances.

	
59

	
Section 4.9

	
Direct Loan Advances by Administrative Agent

	
61

	
Section 4.10

	
No Waiver or Approval by Reason of Loan Advances

	
61

	
Section 4.11

	
Authorization to Make Loan Advances to Cure Borrower’s Defaults

	
61

	
Section 4.12

	
Designation of Lead Borrower as Agent for Borrower.

	
61

	
Section 4.13

	
Administrative Agent’s Right to Make Loan Advances in Compliance with the Guaranty of Completion

	
62

	
Section 4.14

	
No Third-Party Benefit

	
62

	 	 	 
	
ARTICLE 5 ENVIRONMENTAL MATTERS

	
63

	 	 
	
Section 5.1

	
Certain Definitions

	
63

	
Section 5.2

	
Representations and Warranties on Environmental Matters

	
64

	
Section 5.3

	
Covenants on Environmental Matters.

	
64

	
Section 5.4

	
Allocation of Risks and Indemnity

	
65

	
Section 5.5

	
No Waiver

	
66

 

  

i

  

 

	
ARTICLE 6 LEASING MATTERS

	
66

	 	 
	
Section 6.1

	
Representations and Warranties on Leases

	
66

	
Section 6.2

	
Standard Lease Form; Approval Rights

	
67

	
Section 6.3

	
Covenants

	
67

	
Section 6.4

	
Tenant Estoppels

	
68

	 	 	 
	
ARTICLE 7 REPRESENTATIONS AND WARRANTIES

	
68

	 	 
	
Section 7.1

	
Organization and Power

	
68

	
Section 7.2

	
Validity of Loan Documents

	
68

	
Section 7.3

	
Liabilities; Litigation.

	
68

	
Section 7.4

	
Taxes and Assessments

	
69

	
Section 7.5

	
Other Agreements; Defaults

	
69

	
Section 7.6

	
Compliance with Law; Government Approvals.

	
69

	
Section 7.7

	
Location of Borrower

	
70

	
Section 7.8

	
ERISA

	
70

	
Section 7.9

	
Margin Stock

	
70

	
Section 7.10

	
Tax Filings

	
70

	
Section 7.11

	
Solvency

	
70

	
Section 7.12

	
Full and Accurate Disclosure

	
71

	
Section 7.13

	
Single Purpose Entity

	
71

	
Section 7.14

	
Property Management Agreement; Construction Management Agreement; Development Agreement.

	
71

	
Section 7.15

	
No Conflicts.

	
71

	
Section 7.16

	
Title

	
72

	
Section 7.17

	
Use of Project

	
72

	
Section 7.18

	
Flood Zone

	
72

	
Section 7.19

	
Insurance

	
72

	
Section 7.20

	
Condemnation

	
72

	
Section 7.21

	
Utilities; Access

	
72

	
Section 7.22

	
Boundaries

	
73

	
Section 7.23

	
Separate Lots

	
73

	
Section 7.24

	
Filing and Recording Taxes

	
73

	
Section 7.25

	
Investment Company Act

	
73

	
Section 7.26

	
Foreign Assets Control Regulations, Etc.

	
73

	
Section 7.27

	
Organizational Structure.

	
73

	
Section 7.28

	
Project Documents

	
74

	
Section 7.29

	
Budget

	
74

	
Section 7.30

	
Interim Disbursements

	
74

	
Section 7.31

	
Reserved.

	
74

	
Section 7.32

	
Tenant Improvement Allowances

	
74

	
Section 7.33

	
Reserved.

	
74

	 	 	 
	
ARTICLE 8 FINANCIAL REPORTING

	
74

	 	 
	
Section 8.1

	
Financial Statements.

	
74

	
Section 8.2

	
Accounting Principles

	
76

	
Section 8.3

	
Other Information

	
76

	
Section 8.4

	
Audits

	
76

 

  

ii

  

 

	
ARTICLE 9 COVENANTS

	
76

	 	 
	
Section 9.1

	
Due on Sale and Encumbrance; Transfers of Interests

	
76

	
Section 9.2

	
Maintenance of the Project; Alterations.

	
77

	
Section 9.3

	
Real Estate Taxes; Charges

	
77

	
Section 9.4

	
Development; Management.

	
78

	
Section 9.5

	
Compliance with Laws; Inspection.

	
79

	
Section 9.6

	
Legal Existence; Name, Etc.

	
81

	
Section 9.7

	
Affiliate Transactions

	
81

	
Section 9.8

	
Limitation on Other Debt.

	
81

	
Section 9.9

	
Further Assurances

	
82

	
Section 9.10

	
Loan Certificates

	
82

	
Section 9.11

	
Notice of Certain Events

	
82

	
Section 9.12

	
Indemnification

	
82

	
Section 9.13

	
Covenants Regarding the Condominium Declaration

	
83

	
Section 9.14

	
Collateral Letters of Credit

	
84

	
Section 9.15

	
Hedge Agreements.

	
86

	
Section 9.16

	
Reserves

	
87

	
Section 9.17

	
Handicapped Access.

	
88

	
Section 9.18

	
Zoning

	
89

	
Section 9.19

	
ERISA

	
89

	
Section 9.20

	
Books and Records

	
89

	
Section 9.21

	
Foreign Assets Control Regulations.

	
90

	
Section 9.22

	
Performance of Project Documents and Easements.

	
90

	
Section 9.23

	
Operating Plan and Budget.

	
91

	
Section 9.24

	
Proceedings to Enjoin or Prevent Construction

	
91

	
Section 9.25

	
Industrial and Commercial Incentive Program

	
92

	
Section 9.26

	
Reserved.

	
92

	
Section 9.27

	
Reserved.

	
92

	
Section 9.28

	
Reimbursement of Expenses

	
92

	 	 	 
	
ARTICLE 10 EVENTS OF DEFAULT

	
93

	 	 
	
Section 10.1

	
Payments

	
93

	
Section 10.2

	
Insurance

	
93

	
Section 10.3

	
Single Purpose Entity

	
93

	
Section 10.4

	
Real Estate Taxes

	
93

	
Section 10.5

	
Sale, Encumbrance, Etc.

	
93

	
Section 10.6

	
Representations and Warranties

	
94

	
Section 10.7

	
Other Encumbrances

	
94

	
Section 10.8

	
Various Covenants

	
94

	
Section 10.9

	
Reserved.

	
94

	
Section 10.10

	
Financial Covenants

	
94

	
Section 10.11

	
Involuntary Bankruptcy or Other Proceeding

	
94

	
Section 10.12

	
Voluntary Petitions, Etc.

	
94

	
Section 10.13

	
Debt

	
94

 

  

iii

  

 

	
Section 10.14

	
Dissolution

	
95

	
Section 10.15

	
Judgments

	
95

	
Section 10.16

	
Security

	
95

	
Section 10.17

	
Guarantor Documents

	
95

	
Section 10.18

	
Reserves

	
95

	
Section 10.19

	
Co-Borrower Documents

	
95

	
Section 10.20

	
Covenants

	
95

	
Section 10.21

	
Deficiency Deposits

	
96

	
Section 10.22

	
Reserved.

	
96

	
Section 10.23

	
Reserved.

	
96

	
Section 10.24

	
Building Loan Agreement Default

	
96

	 	 	 
	
ARTICLE 11 REMEDIES

	
96

	 	 
	
Section 11.1

	
Remedies – Insolvency Events

	
96

	
Section 11.2

	
Remedies – Other Events

	
96

	
Section 11.3

	
Administrative Agent’s Right to Perform the Obligations

	
96

	
Section 11.4

	
Administrative Agent’s Right to Complete Construction

	
97

	
Section 11.5

	
Administrative Agent’s Rights under the Guaranty of Completion

	
98

	
Section 11.6

	
NO OBLIGATION WITH RESPECT TO COMPLETION OF THE IMPROVEMENTS

	
98

	 	 	 
	
ARTICLE 12 MISCELLANEOUS

	
98

	 	 
	
Section 12.1

	
Notices

	
98

	
Section 12.2

	
Amendments, Waivers, Etc.

	
99

	
Section 12.3

	
Compliance with Usury Laws

	
99

	
Section 12.4

	
Invalid Provisions

	
99

	
Section 12.5

	
Approvals; Third Parties; Conditions

	
100

	
Section 12.6

	
Lenders and Administrative Agent Not in Control; No Partnership

	
100

	
Section 12.7

	
Time of the Essence

	
100

	
Section 12.8

	
Successors and Assigns

	
101

	
Section 12.9

	
Renewal, Extension or Rearrangement

	
101

	
Section 12.10

	
Waivers

	
101

	
Section 12.11

	
Cumulative Rights

	
101

	
Section 12.12

	
Singular and Plural

	
101

	
Section 12.13

	
Phrases

	
101

	
Section 12.14

	
Exhibits and Schedules

	
101

	
Section 12.15

	
Titles of Articles, Sections and Subsections

	
101

	
Section 12.16

	
Promotional Material

	
101

	
Section 12.17

	
Survival

	
102

	
Section 12.18

	
WAIVER OF JURY TRIAL

	
102

	
Section 12.19

	
Remedies of Borrower

	
102

	
Section 12.20

	
Governing Law

	
103

	
Section 12.21

	
Entire Agreement

	
104

	
Section 12.22

	
Counterparts

	
104

	
Section 12.23

	
Assignments and Participations.

	
104

	
Section 12.24

	
Brokers

	
106

	
Section 12.25

	
Right of Set-off.

	
106

 

  

iv

  

 

	
Section 12.26

	
Limitation on Liability of Administrative Agent’s and the Lenders’ Officers, Employees, etc.

	
107

	
Section 12.27

	
Cooperation with Syndication

	
107

	
Section 12.28

	
Severance of Loan.

	
108

	
Section 12.29

	
Confidentiality

	
110

	 	 	 
	
ARTICLE 13 RECOURSE LIABILITY

	
110

	 	 
	
Section 13.1

	
Recourse Liability

	
110

	
Section 13.2

	
No Waiver of Certain Rights

	
112

	 	 	 
	
ARTICLE 14 ADMINISTRATIVE AGENT

	
112

	 	 
	
Section 14.1

	
Appointment, Powers and Immunities

	
112

	
Section 14.2

	
Reliance by Administrative Agent

	
113

	
Section 14.3

	
Defaults.

	
113

	
Section 14.4

	
Rights as a Lender

	
116

	
Section 14.5

	
Standard of Care; Indemnification

	
116

	
Section 14.6

	
Non Reliance on Administrative Agent and Other Lenders

	
117

	
Section 14.7

	
Failure to Act

	
117

	
Section 14.8

	
Resignation of Administrative Agent

	
117

	
Section 14.9

	
Consents under Loan Documents

	
118

	
Section 14.10

	
Authorization

	
119

	
Section 14.11

	
Agency Fee

	
119

	
Section 14.12

	
Defaulting Lenders.

	
119

	
Section 14.13

	
Liability of Administrative Agent

	
122

	
Section 14.14

	
Transfer of Agency Function

	
122

	 	 	 
	
ARTICLE 15 CASH MANAGEMENT

	
122

	 	 
	
Section 15.1

	
Cash Management.

	
122

	
Section 15.2

	
Security Accounts Generally.

	
122

	 	 	 
	
ARTICLE 16 CONTROLLED ACCOUNTS

	
124

	 	 
	
Section 16.1

	
Controlled Accounts

	
124

	 	 	 
	
ARTICLE 17 CONDOMINIUM PROVISIONS

	
125

	 	 
	
Section 17.1

	
Establishment; Covenants

	
125

	
Section 17.2

	
Subordination of Lien to Project Condominium Declarations

	
126

	
Section 17.3

	
Transfer of Collateral

	
127

 

LIST OF EXHIBITS AND SCHEDULES

 

	
Exhibit A

	
Legal Description

	
Exhibit B

	
Budget

	
Exhibit C-1

	
Form of Project Loan Note

	
Exhibit C-2

	
Form of Building Loan Note

	
Exhibit C-3

	
Form of Acquisition Loan Note

	
Exhibit D

	
Form of Assignment and Assumption

	
Exhibit E

	
Notices for Conversion and Continuations

 

  

v

  

 

	
Exhibit F-1

	
Form of Request for Loan Advance (Project Loans)

	
Exhibit F-2

	
Form of Request for Loan Advance (Building Loans)

	
Exhibit F-3

	
Intentionally Omitted

	
Exhibit G

	
Controlled Account Agreement

	
Schedule 1

	
Commitments

	
Schedule 1.1(130)

	
Leasing Guidelines

	
Schedule 1.1(193)

	
Proportionate Share

	
Schedule 2.4(1)

	
Wire Instructions

	
Schedule 3.1(1)(J)

	
Insurance Requirements for Construction Managers, Major Contractors, Architects and Design Professionals

	
Schedule 4

	
Advance Conditions

	
Schedule 7.6

	
Permitting Schedules

	
Schedule 7.27

	
Organizational Chart

	
Schedule 7.32

	
Tenant Improvement Allowances

 

  

vi

  

ACQUISITION AND PROJECT LOAN AGREEMENT

 

ACQUISITION AND PROJECT LOAN AGREEMENT is entered into as of October 5, 2007 among ACADIA-PA EAST FORDHAM ACQUISITIONS, LLC, a limited liability company duly organized and validly existing under the laws of the State of Delaware (“Lead Borrower”), FORDHAM PLACE OFFICE, LLC, a limited liability company duly organized and validly existing under the laws of the State of Delaware (“Fordham Office“, hereinafter, jointly and severally with Lead Borrower, and singly and collectively, “Borrower”); each of the lenders that is a signatory hereto identified under the caption “LENDERS” on the signature pages hereof and each lender that becomes a “Lender” after the date hereof pursuant to Section 12.23(1) (individually, a “Lender” and, collectively, the “Lenders”); and EUROHYPO AG, NEW YORK BRANCH, as administrative agent for the Lenders (in such capacity, together with its successors in such capacity, the “Administrative Agent”).

 

R E C I T A L S

 

A.           Lead Borrower is the fee owner of that certain tract of land located in the County of Bronx, State of New York and being more fully described in Exhibit A attached hereto (the “Land”) and the improvements currently located thereon.

 

B.           Borrower proposes to renovate, alter, improve, install and construct the Improvements (as hereinafter defined) on the Land and, in connection therewith has requested and applied to the Lenders for a loan in the amount of $75,339,243.00 (the “Total Building Loan Commitment”) for the purposes of paying certain of the Cost of Improvement pertaining to the Project (as hereinafter defined) including certain costs with respect to the construction and equipping of the Improvements.  The Lenders have agreed to make such loan pursuant to the Building Loan Agreement, of even date herewith, entered into by Borrower, the Lenders and Administrative Agent (as the same may be modified, amended and/or supplemented and in effect from time to time, the “Building Loan Agreement”)

 

C.           Borrower has also requested and applied to the Lenders for a loan in the amount of $1,930,757.00 (the “Total Project Loan Commitment”) for the purpose of paying certain costs pertaining to the Project, which costs do not constitute a Cost of Improvement.  The Lenders are willing to make such loan on and subject to the terms and conditions hereinafter set forth.

 

D.           Borrower has also requested and applied to the Lenders for a loan in the amount of $18,000,000.00 (the “Total Acquisition Loan Commitment”) for the purpose of re-financing Borrower’s acquisition of the Land and the improvements located thereon.  The Lenders are willing to make such loan on and subject to the terms and conditions hereinafter set forth.

 

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto agree as follows:

 

  

1

  

ARTICLE 1

 

CERTAIN DEFINITIONS

 

Section 1.1Certain Definitions»

 

.  As used herein, the following terms have the meanings indicated:

 

(1)           “Access Laws” has the meaning assigned to such term in Section 9.17(1).

 

(2)           “Acquisition Loan” and “Acquisition Loans” have the respective meanings assigned in Section 2.1(1)(b).

 

(3)           “Acquisition Loan Commitment” means, as to each Lender, the obligation of such Lender to make Acquisition Loans in a principal amount up to but not exceeding the amount set opposite the name of such Lender on Schedule 1 under the caption “Acquisition Loan Commitment” or, in the case of a Person that becomes a Lender pursuant to an assignment permitted under Section 12.23(1), as specified in the respective instrument of assignment pursuant to which such assignment is effected.

 

(4)           “Acquisition Loan Mortgage” shall mean the Acquisition Loan Mortgage, Assignment of Leases and Rents, Security Agreement and Fixture Filing in the amount of the Total Acquisition Loan Commitment and executed, dated and delivered by Borrower to Administrative Agent (on behalf of the Lenders) on the Closing Date, securing the Acquisition Loan Notes, as the same may be modified, amended and/or supplemented and in effect from time to time.

 

(5)           “Acquisition Loan Notes” shall mean, collectively, the promissory note given to each of the Lenders, each note in principal amount equal to such Lender’s Acquisition Loan Commitment and substantially in the form of Exhibit C-3 attached hereto, to be executed, dated and delivered by Borrower to each of the Lenders as of the Closing Date, secured by the Acquisition Loan Mortgage, as the same may be modified, amended and/or supplemented and in effect from time to time.

 

(6)           “Additional Interest” means any and all amounts which may become due and payable by Borrower in accordance with the terms and provisions of any Hedge Agreement provided by a Eurohypo Counterparty which is secured by the Mortgages in accordance with Section 9.15, which amounts shall be evidenced by and payable pursuant to the Notes in favor of Eurohypo and/or such Affiliate; provided, however, that Additional Interest shall not include any amounts which may become due and payable pursuant to any Hedge Agreement which is not secured by the Mortgages.

 

(7)           “Adjusted Libor Rate” means, for any Interest Period for any LIBOR-based Loan, a rate per annum (rounded upwards, if necessary, to the nearest 1/32 of 1%) determined by Administrative Agent to be equal to (a) the Libor Rate for such Interest Period multiplied by (b) the Statutory Reserve Rate.

 

(8)           “Administrative Agent” has the meaning assigned to such term in the Preamble.

 

  

2

  

(9)           “Advance Date” has the meaning assigned to such term in Section 2.6(5).

 

(10)         “Advanced Amount” has the meaning assigned to such term in Section 14.12(2).

 

(11)         “Affiliate” means with respect to any Person, another Person that directly or indirectly controls, or is under common control with, or is controlled by, such Person and, if such Person is an individual, any member of the immediate family (including parents, spouse, children and siblings) of such individual and any trust whose principal beneficiary is such individual or one or more members of such immediate family and any Person who is controlled by any such member or trust.  As used in this definition, “control” (including, with its correlative meanings, “controlled by” and “under common control with”) shall mean possession, directly or indirectly, of power to direct or cause the direction of management or policies (whether through ownership of securities or partnership or other ownership interests, by contract or otherwise), provided that, in any event, any Person that owns directly or indirectly securities having 10% or more of the voting power for the election of directors or other governing body of a corporation or 10% or more of the partnership, membership or other ownership interests of any other Person (other than as a limited partner of such other Person) will be deemed to control such corporation or other Person.  Notwithstanding the foregoing, no individual shall be an Affiliate of a Person solely by reason of his or her being a director, officer, trustee or employee of such Person or one of its Affiliates.

 

(12)          “Agency Fee” means the agency fee agreed to by Borrower and Administrative Agent pursuant to the Fee Letter.

 

(13)          “Agreement” means this Acquisition and Project Loan Agreement, as the same may be modified, amended and/or supplemented and in effect from time to time.

 

(14)          “Annual Budget” has the meaning assigned to such term in Section 9.23(1).

 

(15)          “Applicable Law” means any statute, law (including Environmental Laws), regulation, ordinance, rule, judgment, rule of common law, order, decree, Government Approval, 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).

 

(16)          “Applicable Lending Office” means, for each Lender and for each Type of Loan, the “Lending Office” of such Lender (or of an Affiliate of such Lender) designated for such Type of Loan on the respective signature pages hereof or such other office of such Lender (or of an Affiliate of such Lender) as such Lender may from time to time specify to Administrative Agent and Borrower as the office by which its Loans of such Type are to be made and maintained.

 

(17)          “Applicable Margin” shall mean, for LIBOR-based Loans, 1.75% per annum.

 

  

3

  

(18)          “Appraisal” means an appraisal of the Project prepared by an MAI appraiser satisfactory to Administrative Agent, which appraisal must also (a) satisfy the requirements of Title XI of the Federal Institution Reform, Recovery and Enforcement Act of 1989 and the regulations promulgated thereunder (including the appraiser with respect thereto) and (b) be otherwise in form and substance satisfactory to Administrative Agent.

 

(19)          “Appraised Value” means that certain appraised value of the Project as determined by the Appraisal.

 

(20)          “Approved Annual Budget” shall have the meaning assigned in Section 9.23(1).

 

(21)          “Approved Fund” shall mean any Person (other than a natural person), including, without limitation, any collateralized debt obligation, that is engaged in making, purchasing, holding or investing in bank loans and similar extensions of credit in the ordinary course of its business and that is administered or managed by (a) a Lender, (b) an Affiliate of a Lender, (c) an entity or an Affiliate of an entity that administers or manages a Lender, or (d) an Eligible Assignee.

 

(22)          “Approved Lease” means (a) each lease with each Existing Tenant and (b) each lease entered into after the Closing Date in accordance with the terms and conditions contained in Section 6.2 as such leases and related documents may be modified or amended pursuant to the terms of this Agreement.

 

(23)          “Approved Mezzanine Lender” means Eurohypo or its subsidiary.

 

(24)          “Approved Mezzanine Loan” means a loan (i) from the Approved Mezzanine Lender to the Mezzanine Borrower and secured solely by a pledge of the direct or indirect ownership interests in the Borrower, (ii) which is evidenced and secured by the Approved Mezzanine Loan Documents, (iii) which has a term expiring on or after the Maturity Date, and (iv) which is the subject of an intercreditor agreement between Administrative Agent and Approved Mezzanine Lender, which shall be in form and content acceptable to Administrative Agent.

 

(25)          “Approved Mezzanine Loan Documents” means the documents which will evidence or secure the Approved Mezzanine Loan which shall be subject to the approval of Administrative Agent.

 

(26)          “Approved Mezzanine Loan Liens” means liens in favor of Approved Mezzanine Lender created pursuant to the Approved Mezzanine Loan Documents as security for the Approved Mezzanine Loan and approved by Administrative Agent pursuant to the terms of the subordination and intercreditor agreement to be entered into between Administrative Agent and Approved Mezzanine Lender.

 

(27)          “Assignment and Assumption” means an Assignment and Assumption duly executed by the parties thereto, in substantially the form of Exhibit D hereto and consented to by Administrative Agent in accordance with Section 12.23(1).

 

  

4

  

(28)          “Authorized Officer” means with respect to Borrower, the President or Senior Vice President of Borrower whose names appear on a certificate of incumbency executed by the Secretary of the Borrower and delivered concurrently with the execution of this Agreement, as such certificate of incumbency may be amended from time to time to identify the names of the individuals then holding such offices and certified by the Secretary of the Borrower.

 

(29)          “Base Rate” means, for any day, a rate per annum equal to the higher of (a) the Federal Funds Rate for such day plus 1/2 of 1% or (b) the Prime Rate for such day.  Each change in any interest rate provided for herein based upon the Base Rate resulting from a change in the Base Rate shall take effect at the time of such change in the Base Rate.

 

(30)         “Base Rate Loans” means Loans that bear interest at rates based upon the Base Rate.

 

(31)          “Best Buy Lease” means that certain Lease, dated June 29, 2007, between Borrower and Best Buy Stores, L.P., a Viriginia limited partnership.

 

(32)          “Bifurcation” has the meaning assigned to such term in Section 12.28.

 

(33)          “Bond” has the meaning assigned to such term in Section 1.1 of the Building Loan Agreement.

 

(34)          “Borrower” has the meaning assigned to such term in the Preamble.  With respect to the definition of “Borrower”, except where the context otherwise provides, (i) any representations contained herein of Borrower shall be applicable to each Borrower, (ii) any affirmative covenants contained herein shall be deemed to be covenants of each Borrower and shall require performance by all Borrowers, (iii) any negative covenants contained herein shall be deemed to be covenants of each Borrower, and shall be breached if any Borrower fails to comply therewith, (iv) the occurrence of any Event of Default with respect to any Borrower shall be deemed to be an Event of Default hereunder, and (v) any Indebtedness and/or obligations of Borrower shall be deemed to include any Indebtedness and/or obligations of the Borrowers, or any Indebtedness and/or obligations of any one of them.

 

(35)          “Borrower Party” means Borrower, any Guarantor or Managing Member.

 

(36)          “Borrower’s Architect” has the meaning assigned to such term in Section 1.1 of the Building Loan Agreement.

 

(37)          “Borrower’s Architect’s Agreement” has the meaning assigned to such term in Section 1.1 of the Building Loan Agreement.

 

(38)          “Borrower’s Project Interest” means, from and after the establishment of the Condominium, collectively, Borrower’s right, title and interest in and to: (a) all Units; (b) the Improvements; (c) the Project Amenities; (d) Borrower’s rights, powers, privileges and obligations (including, without limitation, maintenance obligations and rights to reimbursement with respect to the Units and Project Amenities), whether as the Declarant or otherwise, under the Condominium Declaration; and (e) all other right, title and interest of Borrower in and to the Project, together with rights and appurtenances to the interests described in clause (a) through (d) above.

 

  

5

  

(39)           “Budget” means the budget attached as Exhibit B hereto as the same may be modified from time to time in accordance with the provisions of this Agreement.

 

(40)           “Budget Line Items” has the meaning assigned to such term in Section 4.5.

 

(41)           “Building Loan” and “Building Loans” has the meaning assigned to such term in Section 1.1 of the Building Loan Agreement.

 

(42)           “Building Loan Agreement” has the meaning assigned to such term in the Recitals.

 

(43)           “Building Loan Commitment” has the meaning assigned to such term in Section 1.1 of the Building Loan Agreement.

 

(44)           “Building Loan Mortgage” has the meaning assigned to such term in Section 1.1 of the Building Loan Agreement.

 

(45)           “Building Loan Notes” shall mean, collectively, the promissory note given to each of the Lenders, each note in principal amount equal to such Lender’s Building Loan Commitment and substantially in the form of Exhibit C-2 attached hereto, to be executed, dated and delivered by Borrower to each of the Lenders as of the Closing Date, secured by the Building Loan Mortgage, as the same may be modified, amended and/or supplemented and in effect from time to time.

 

(46)           “Business Day” means (a) any day other than a Saturday, a Sunday, or other day on which commercial banks located in New York City are authorized or required by law to remain closed and (b) in connection with a borrowing of, a payment or prepayment of principal of or interest on, a Conversion of or into, or an Interest Period for, a LIBOR-based Loan or a notice by Lead Borrower with respect to any such borrowing, payment, prepayment or Conversion, the term “Business Day” shall also exclude a day on which banks are not open for dealings in Dollar deposits in the London interbank market.

 

(47)           “Cash Management Agreement” means that certain Cash Management and Security Agreement which may be executed and delivered by Borrower, Administrative Agent (on behalf of the Lenders) and the Depository Bank in accordance with the terms and provisions of Section 15.1, as the same may be modified, amended and/or supplemented and in effect from time to time.

 

(48)           “Change in Law” means, to the extent that the Administrative Agent, the Lenders, the Borrower or the Project is subject thereto or required to comply therewith, the occurrence, after the date of this Agreement, of any of the following: (a) the adoption or taking effect of any law, rule, regulation or treaty, (b) any change in any law, rule, regulation or treaty or in the administration, interpretation or application thereof by any Governmental Authority or (c) the making or issuance of any request, guideline or directive (whether or not having the force of law) by any Governmental Authority.

 

  

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(49)           “Change of Control” shall mean any transaction, transfer, admission, redemption, withdrawal, change in organizational documents or structure, or otherwise, whether directly or indirectly, as a result of which (a)(i) Sponsor, whether directly or indirectly, owns less than 18% of the membership interests in and rights to distributions from Borrower, or (ii) any Person other than Managing Member has the responsibility for managing and administering the day-to day business and affairs of Borrower or (iii) in any other respects, any Person other than Sponsor directly or indirectly Control Borrower, (b) (i) Sponsor no longer directly or indirectly owns at least 18% of the membership interests in and rights to distributions from the Managing Member, or (ii) Sponsor no longer directly or indirectly has responsibility for managing and administering the day-to day business and affairs of the Managing Member or (iii) in any other respects, any Person other than Sponsor directly or indirectly Controls the Managing Member,  (c)(i) anyone other than Acadia Realty Trust, whether directly or indirectly, owns less than 75% of the partnership interests in Sponsor, or (ii) any Person other than Acadia Realty Trust has the responsibility for managing and administering the day-to day business and affairs of Sponsor or (iii) in any other respects, any Person other than Acadia Realty Trust directly or indirectly Controls Sponsor, or (d) a change in the management control of Acadia Realty Trust such that Kenneth F. Bernstein is no longer the Chief Executive Officer of Acadia Realty Trust or Kenneth F. Bernstein fails to devote a substantial amount of his business time and attention in any consecutive six (6) month period to the affairs of Acadia Realty Trust; provided, however, such occurrence shall not be an Event of Default if within sixty (60) days of the occurrence thereof the Administrative Agent approves, in the exercise of its reasonable judgment, the replacement or successor management of Acadia Realty Trust.  As used in this definition, “Control” of one Person (the “controlled Person”) by another Person (the “controlling Person”) shall mean the possession, directly or indirectly, by the controlling Person of the power or ability to direct or cause the direction of the management or policies of the controlled Person, whether through the ability to exercise voting power, by contract or otherwise (“Controlled” and “Controlling” each have the meanings correlative thereto).

 

(50)           “Change Order” has the meaning assigned to such term in Section 1.1 of the Building Loan Agreement.

 

(51)           “Closing Date” means the date of this Agreement.

 

(52)           “Co-Borrower Documents” means collectively, the Contribution Agreement, the Co-Borrower Guaranty (Acquisitions) and the Co-Borrower Guaranty (Office).

 

(53)           “Co-Borrower Guaranty (Acquisitions)” means the Co-Borrower Guaranty by Lead Borrower in favor of Administrative Agent on the Closing Date, as the same may be modified, supplemented or amended from time to time.

 

(54)           “Co-Borrower Guaranty (Office)” means the Co-Borrower Guaranty by Fordham Office in favor of Administrative Agent on the Closing Date, as the same may be modified, supplemented or amended from time to time.

 

  

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(55)           “Collateral Letter of Credit” means a clean, irrevocable and unconditional standby letter of credit that is (a) issued for the account of an applicant other than Borrower, (b) issued in favor of Administrative Agent (on behalf of the Lenders), (c) issued by an issuer having a paying office in the City of New York and having a rating with respect thereto of “A” or better by S&P and an equivalent rating from Moody’s, or such other issuer as shall be approved by the Administrative Agent in its sole and absolute discretion, (d) drawable, in whole or in part, from time to time, by Administrative Agent upon the presentment to the issuer of a clean sight-draft demanding such payment, (e) an “evergreen” letter of credit that initially has an expiration date of at least one (1) year from the date of deposit and is automatically renewed from year to year or one which does not expire until at least thirty (30) Business Days after the Maturity Date, and (f) freely assignable upon presentation of customary documents by Administrative Agent at no cost and expense to Administrative Agent.

 

(56)           “Commitment” means, as to each Lender, the aggregate Acquisition Loan Commitment, Project Loan Commitment and Building Loan Commitment.

 

(57)           “Completion Date” means the earlier of (a) twenty (20) months after the Closing Date, as such date may be extended due to Unavoidable Delays; provided, however, that in no event shall the Completion Date extend beyond the date which is twenty-four (24) months after the Closing Date, or (b) the effective date of any cancellation or termination right under any Major Lease due to the failure to complete any portion of the Project Completion Work, unless such cancellation or termination date is extended or waived by Tenant.

 

(58)           “Condominium” means that certain condominium established pursuant to the Condominium Declaration.

 

(59)           “Condominium Act” means Article 9-B of the Real Property Law of the State of New York (§ 339-d et seq.), and all amendments, modifications or replacements thereof or regulations with respect thereto, now or hereafter enacted or promulgated.

 

(60)           “Condominium Declaration” means that certain Condominium Declaration filed with the Attorney General’s Office of the State of New York and approved by Administrative Agent after the Closing Date for the purpose of creating the Condominium.

 

(61)           “Condominium Documents” means the Condominium Declaration, the by-laws of any owner’s association to be established pursuant to the Condominium Declaration to govern the affairs of the Condominium, and any other document, instrument or agreement creating, governing or affecting the Condominium.

 

(62)           “Consent and Agreement” has the meaning assigned to such term in Section 1.1 of the Building Loan Agreement.

 

(63)           “Construction Consultant” has the meaning assigned to such term in Section 1.1 of the Building Loan Agreement.

 

(64)           “Construction, Cost and Plan Review” means a report of the Construction Consultant, dated October 3, 2007 and in form and substance reasonably satisfactory to Administrative Agent, as to the Budget, the Plans and Specifications, the construction plan, the Construction Schedule, and as to such other matters as Administrative Agent may reasonably request, including, without limitation, a detailed plan and cost review.

 

  

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(65)           “Construction Management Agreement” has the meaning assigned to such term in Section 1.1 of the Building Loan Agreement.

 

(66)           “Construction Manager” has the meaning assigned to such term in Section 1.1 of the Building Loan Agreement.

 

(67)           “Construction Schedule” has the meaning assigned to such term in Section 1.1 of the Building Loan Agreement.

 

(68)           “Construction Work” has the meaning assigned to such term in Section 1.1 of the Building Loan Agreement.

 

(69)           “Consumer Price Index” means the consumer price index for the New York City area for all Urban Consumers-All Items, published monthly by the Bureau of Labor Statistics of the United States Department of Labor.

 

(70)           “Contingency Fund” has the meaning assigned to such term in Section 4.4.

 

(71)           “Continue” “Continuation” and “Continued” refer to the continuation pursuant to Section 2.2 of (a) a LIBOR-based Loan from one Interest Period to the next Interest Period or (b) a Base Rate Loan at the Base Rate.

 

(72)           “Contribution Agreement” means the Indemnity, Subrogation and Contribution Agreement among Lead Borrower, Fordham Office and Administrative Agent on the Closing Date, as the same may be modified, supplemented or amended from time to time.

 

(73)           “Controlled Account” means one or more deposit accounts established by Administrative Agent (for the benefit of the Lenders) at a Depository Bank that is acceptable to Administrative Agent, and which is established and maintained in accordance with the terms and provisions hereof.

 

(74)           “Controlled Account Agreement” shall have the meaning assigned to such term in Section 16.1(1)(a).

 

(75)           “Controlled Account Collateral” shall have the meaning assigned to such term in Section 16.1(3)(a).

 

(76)           “Convert” “Conversion” and “Converted” refer to a conversion pursuant to the terms of this Agreement of one Type of Loans into another Type of Loans, which may be accompanied by the transfer by a Lender (at its sole discretion) of a Loan from one Applicable Lending Office to another.

 

(77)           “Cost of Improvement” has the meaning assigned to such term in Section 1.1 of the Building Loan Agreement.

 

  

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(78)           “Date Down Endorsement” means any date down endorsement to the Title Policies or other evidence of date down of title acceptable to Administrative Agent in its reasonable discretion covering (a) disbursements of loan proceeds made or to be made subsequent to the date of the Title Policies and (b) the period subsequent to the date of the Title Policies.

 

(79)           “Debt” means, for any Person, without duplication:  (a) all indebtedness of such Person for borrowed money, for amounts drawn under a letter of credit, or for the deferred purchase price of property for which such Person or its assets is liable, (b) all unfunded amounts under a loan agreement, letter of credit, or other credit facility for which such Person would be liable, if such amounts were advanced under the credit facility, (c) all amounts required to be paid by such Person as a guaranteed payment to partners, members (or other equity holders) or a preferred or special dividend, including any mandatory redemption of shares or interests, (d) all indebtedness guaranteed by such Person, directly or indirectly, (e) all obligations under leases that constitute capital leases for which such Person is liable, and (f) all obligations of such Person under interest rate swaps, caps, floors, collars and other interest hedge agreements, in each case whether such Person is liable contingently or otherwise, as obligor, guarantor or otherwise, or in respect of which obligations such Person otherwise assures a creditor against loss.

 

(80)           “Declarant” means Acadia-PA East Fordham Acquisitions, LLC in its capacity as the declarant named in the Condominium Declaration.

 

(81)           “Default Rate” means the rate per annum from time to time applicable to Base Rate Loans plus 5%; provided, however, that in no event shall the Default Rate exceed the maximum rate allowed by Applicable Law.

 

(82)           “Defaulting Lender” has the meaning assigned in Section 14.12(1).

 

(83)           “Deficiency Deposit Account” has the meaning assigned to such term in Section 4.3(1)(b).

 

(84)           “Deficiency Deposit” has the meaning assigned in Section 4.3(1)(b).

 

(85)           “Depository Bank” means at any time any depository bank which is party to a Controlled Account Agreement.

 

(86)           “Design Professional” has the meaning assigned to such term in Section 1.1 of the Building Loan Agreement.

 

(87)           “Dollars” and “$” means lawful money of the United States of America.

 

(88)           “Eligible Assignee” means any of (i) a commercial bank organized under the Laws of the United States, or any State thereof, and having (x) total assets in excess of $1,000,000,000 and (y) a combined capital and surplus of at least $250,000,000; (ii) a commercial bank organized under the laws of any other country which is a member of the Organization of Economic Cooperation and Development (“OECD”), or a political subdivision of any such country, and having (x) total assets in excess of $1,000,000,000 and (y) a combined capital and surplus of at least $250,000,000, provided that such bank is acting through a branch or agency located in the country in which it is organized or another country which is also a member of OECD; (iii) a life insurance company organized under the Laws of any State of the United States, or organized under the Laws of any country and licensed as a life insurer by any State within the United States and having admitted assets of at least $1,000,000,000; (iv) a nationally recognized investment banking company or other financial institution in the business of making loans, or an Affiliate thereof (other than any Person which is directly or indirectly a Borrower Party or directly or indirectly an Affiliate of any Borrower Party) organized under the Laws of any State of the United States, and licensed or qualified to conduct such business under the Laws of any such State and having (1) total assets of at least $1,000,000,000 and (2) a net worth of at least $250,000,000; (v) an Approved Fund; (vi) any Affiliate of Eurohypo, any other Person into which, or with which, Eurohypo is merged, consolidated or reorganized, or which is otherwise a successor to Eurohypo by operation of law, or which acquires all or substantially all of the assets of Eurohypo, any other Person which is a successor to the business operations of Eurohypo and engages in substantially the same activities, or any Affiliate of any of the foregoing; or (vii) any other Person reasonably acceptable to Borrower (to the extent Borrower’s consent to an assignment is required for an assignment to a Person other than those identified in clauses (i) through (vi) above, pursuant to Section 12.23(1), and provided that all other applicable conditions to such assignment set forth in Section 12.23(1) have been satisfied, including any applicable consent thereto to be delivered by Administrative Agent.

 

  

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(89)           “Environmental Indemnity” means that certain Environmental Indemnity Agreement by Borrower and Guarantor in favor of Administrative Agent and each of the Lenders, to be executed, dated and delivered to Administrative Agent (on behalf of the Lenders) on the Closing Date, as the same may be modified, amended and/or supplemented and in effect from time to time.

 

(90)           “Equity Balancing Contribution” has the meaning assigned in Section 4.3.

 

(91)           “Eurohypo” means Eurohypo AG, New York Branch.

 

(92)           “Eurohypo Counterparty” means Eurohypo and or (a) any Affiliate of Eurohypo, (b) any other Person into which, or with which, Eurohypo is merged, consolidated or reorganized, or which is otherwise a successor to Eurohypo by operation of law, or which acquires all or substantially all of the assets of Eurohypo, (c) any other Person which is a successor to the business operations of Eurohypo and engages in substantially the same activities, or (d) any Affiliate of any of the Persons described in clauses (b) and (c) of this definition.

 

(93)           “Event of Default” has the meaning assigned in Article 10.

 

(94)           “Excluded Taxes” means, with respect to the Administrative Agent, any Lender or any other recipient of any payment to be made by or on account of any obligation of Borrower hereunder, (a) taxes imposed on or measured by its overall net income (however denominated), and franchise taxes imposed on it (in lieu of net income taxes), by the jurisdiction (or any political subdivision thereof) under the laws of which such recipient is organized or in which its principal office is located or, in the case of any Lender, in which its Applicable Lending Office is located, (b) any branch profits taxes imposed by the United States or any similar tax imposed by any other jurisdiction in which Borrower is located and (c) in the case of a Foreign Lender (other than an assignee pursuant to a request by Borrower under Section 2.7(7),any withholding tax that is imposed on amounts payable to such Foreign Lender at the time such Foreign Lender becomes a party hereto (or designates a new Applicable Lending Office) or is attributable to such Foreign Lender’s failure or inability (other than as a result of a Change in Law) to comply with Section 2.7(6)(e) except to the extent that such Foreign Lender (or its assignor, if any) was entitled, at the time of designation of a new Applicable Lending Office (or assignment), to receive additional amounts from Borrower with respect to such withholding tax pursuant to Section 2.7(6)(a).

 

  

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(95)           “Exculpated Party” has the meaning assigned to such term in Section 13.1.

 

(96)           “Existing Tenant” means (i) Sears, Roebuck and Co., a New York corporation (ii) Best Buy Stores, L.P., a Virginia limited partnership, (iii) Walgreen Eastern Co., Inc., a New York corporation and (iv) 24 Hour Fitness USA, Inc., a California corporation.

 

(97)           “Exit Fee” has the meaning assigned to such term in Section 2.9.

 

(98)           “Extension Period” means the First Extension Period, the Second Extension Period and/or the Third Extension Period, as applicable.

 

(99)           “Federal Bankruptcy Code” shall mean Title 11 of the United States Code entitled “Bankruptcy” as amended from time to time, and any successor statutes and rules and regulations from time to time promulgated thereunder, and any comparable foreign laws relating to bankruptcy, insolvency or creditor’s rights.

 

(100)         “Federal Funds Rate” means, for any day, the rate per annum (rounded upwards, if necessary, to the nearest 1/100 of 1%) equal to the weighted average of the rates on overnight Federal funds transactions with members of the Federal Reserve System arranged by Federal funds brokers on such day, provided that (a) if such day is not a Business Day, the Federal Funds Rate for the immediately preceding Business Day shall be applicable, as determined by Administrative Agent, or such other commercial bank as selected by Administrative Agent.

 

(101)         “Fee Letter” means the letter agreement, dated the date hereof, between Borrower and Administrative Agent with respect to certain fees payable by Borrower in connection with the Loans, as the same may be modified or amended from time to time.

 

(102)         “First Extension Period” has the meaning assigned to such term in Section 2.5(1).

 

(103)         “First Extension Notice” has the meaning assigned to such term in Section 2.5(1)(a).

 

  

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(104)           “Flood Insurance Acts” has the meaning assigned to such term in Section 3.1(1)(g).

 

(105)           “Foreign Lender” means any Lender that is organized under the laws of a jurisdiction other than that in which Borrower is resident for tax purposes.  For purposes of this definition, the United States, each State thereof and the District of Columbia shall be deemed to constitute a single jurisdiction.

 

(106)           “GAAP” means accounting principles generally accepted in the United States of America.

 

(107)           “General Assignment” means the Assignment of Contracts, Government Approvals and Other Project Documents, executed by Borrower in favor of Administrative Agent (on behalf of the Lenders), as the same may be modified, supplemented and/or amended from time to time.

 

(108)           “Government Approval” means any action, authorization, consent, approval, license, lease, ruling, permit, tariff, 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 Project, including building permits, zoning and planning approvals, business licenses, licenses to conduct business, certificates of occupancy and all such other permits, licenses and rights.

 

(109)           “Governmental Authority” means any governmental department, commission, board, bureau, agency, regulatory authority, instrumentality, judicial or administrative body, federal, state, local, or foreign having jurisdiction over the matter or matters in question.

 

(110)           “Guaranty of Completion” means the Completion Guaranty executed by Guarantor to Administrative Agent (on behalf of the Lenders) on the Closing Date, as the same may be modified, supplemented or amended from time to time.

 

(111)           “Guarantor” means Acadia Strategic Opportunity Fund II, LLC.

 

(112)           “Guarantor Documents” means collectively, the Guaranty of Completion, the Recourse Guaranty, and the Environmental Indemnity.

 

(113)           “Hard Costs” has the meaning assigned to such term in Section 1.1 of the Building Loan Agreement.

 

(114)           “Hazardous Materials” has the meaning assigned in Section 5.1(5).

 

(115)           “Hedge Agreement” means any interest rate hedge agreement between Borrower and Eurohypo or one or more financial institutions providing for the transfer or mitigation of interest risks either generally or under specific contingencies, as the same may be modified, amended and/or supplemented and in effect from time to time.

 

  

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(116)           “Hedge Pledge” means that certain Pledge and Security Agreement, to be executed, dated and delivered by Borrower to Administrative Agent at any time Borrower elects to enter into a Hedge Agreement, as the same may be modified, amended and/or supplemented and in effect from time to time.

 

(117)           “Improvements” means, an approximately 285,000 square foot mixed-use retail/office building to be comprised, following completion of the Construction Work, of (a) approximately 125,000 square feet of retail space (the “Retail Component”), (b) an approximately 160,000 square foot, 14-story, Class A office tower (the “Office Component”),  (c) all storage space contained therein, all signage improvements and all of the other improvements to be constructed on the Land, as more particularly described in the Plans and Specifications, and (d) the Tenant Improvement Work, to the extent required pursuant to Approved Leases.

 

(118)           “In Balance” has the meaning assigned to such term in Section 4.3.

 

(119)           “Indebtedness” has the meaning assigned to such term in the Mortgages.

 

(120)           “Indemnified Taxes” means all Taxes other than Excluded Taxes.

 

(121)           “Independent Manager” means, in the case of a corporation, limited liability company or limited partnership, a director, member or manager that is a natural person who has no affiliation with any Borrower Party and who is approved by Administrative Agent.

 

(122)           “Initial Equity Contribution” means the amount of unreimbursed equity contributed by Borrower as a cash contribution to the Project including, without limitation, acquisition cost and development costs, prior to the initial funding of the Loans and as a condition thereto, which amount (subject to Schedule 4 – Part A, paragraph 30) shall be not less than $24,479,400.00 as verified by Administrative Agent pursuant to Schedule 4 – Part A.

 

(123)           “Insurance Premiums” has the meaning assigned in Section 4.4.

 

(124)           “Insurance Proceeds Deficiency” has the meaning assigned to such term in Section 3.4(5).

 

(125)           “Interest Period” means, with respect to any LIBOR-based Loan, each period commencing on the date such LIBOR-based Loan is made or Converted from a Base Rate Loan or (in the event of a Continuation) the last day of the immediately preceding Interest Period for such Loan and ending on the numerically corresponding day in the first, second, third, sixth or twelfth (if available from all Lenders) calendar month thereafter, as Lead Borrower may select as provided in Section 2.6(4); provided that (i) each Interest Period that commences on the last Business Day of a calendar month (or on any day for which there is no numerically corresponding day in the appropriate subsequent calendar month) shall end on the last Business Day of the appropriate subsequent calendar month; (ii) each Interest Period that would otherwise end on a day that is not a Business Day shall end on the next succeeding Business Day (or, if such next succeeding Business Day falls in the next succeeding calendar month, on the immediately preceding Business Day); (iii) no Interest Period shall have a duration of less than one month and, if the Interest Period for any LIBOR-based Loan would otherwise be a shorter period, such Loan shall bear interest at the Base Rate for Base Rate Loans; (iv) in no event shall any Interest Period extend beyond the Maturity Date; and (v) there may be no more than four (4) separate Interest Periods in respect of LIBOR-based Loans outstanding at any one time

 

  

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(126)           “Interest Rate Hedge Period” has the meaning assigned to such term in Section 9.15(1)

 

(127)           “Interest Reserve” has the meaning assigned to such term in Section 4.3.

 

(128)           “Internal Revenue Code” means the Internal Revenue Code of 1986, as amended.

 

(129)           “Land” has the meaning assigned in the Recitals.

 

(130)           “Leasing Guidelines” means the Leasing Guidelines described in Schedule 1.1(130) attached hereto.

 

(131)           “Lender” and “Lenders” have the respective meanings assigned to such terms in the Preamble.

 

(132)           “Libor Rate” means, for any Interest Period for any LIBOR-based Loan, the rate per annum appearing on Page 3750 of the Dow Jones (Telerate) Service (or on any successor or substitute page, or any successor to or substitute for such Service, as determined by Administrative Agent from time to time for purposes of providing quotations of interest rates applicable to Dollar deposits in the London interbank market) at approximately 11:00 a.m. London time on the date two (2) Business Days prior to the first day of such Interest Period as the rate for the offering of Dollar deposits having a term comparable to such Interest Period, provided that if such rate does not appear on such page, or if such page shall cease to be publicly available, or if the information contained on such page, in the reasonable judgment of Administrative Agent shall cease accurately to reflect the rate offered by leading banks in the London interbank market as reported by any publicly available source of similar market data selected by Administrative Agent, the Libor Rate for such Interest Period shall be determined from such substitute financial reporting service as Administrative Agent in its reasonable discretion shall determine.

 

(133)           “LIBOR-based Loans” means Loans that bear interest at rates based on rates referred to in the definition of “Libor Rate.”

 

(134)           “Lien” means any interest, or claim thereof, in the Project securing an obligation owed to, or a claim by, any Person other than the owner of the Project, whether such interest is based on common law, statute or contract, including the lien or security interest arising from a deed of trust, mortgage, assignment, encumbrance, pledge, security agreement, conditional sale or trust receipt or a lease, consignment or bailment for security purposes.  The term “Lien” shall include reservations, exceptions, encroachments, easements, rights of way, covenants, conditions, restrictions, leases and other title exceptions and encumbrances affecting the Project.

 

  

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(135)           “Lien Law” means the Lien Law of the State of New York, as amended from time to time.

 

(136)           “Loans” means the loans to be made by the Lenders to Borrower under this Agreement and all other amounts evidenced or secured by the Loan Documents.

 

(137)           “Loan Documents” means:  (a) this Agreement, (b) the Building Loan Agreement, (c) the Notes, (d) the Guarantor Documents, (e) the Security Documents, (f) the Co-Borrower Documents, (g) each Consent and Agreement, (h) any letter of credit provided to Administrative Agent in connection with the Loan (i) the Environmental Indemnity, (j) the Fee Letter, (k) the Subordination of Property Management Agreement, (l) such assignments of management agreements, contracts and other rights as may be required by Administrative Agent, (m) all other documents evidencing, securing, governing or otherwise pertaining to the Loans, and (n) all modifications, amendments,  supplements or replacements of any of the foregoing.

 

(138)           “Loan Transactions” has the meaning assigned to such term in Section 2.6(3).

 

(139)           “Major Contract” has the meaning assigned to such term in Section 1.1 of the Building Loan Agreement.

 

(140)           “Major Contractor” has the meaning assigned to such term in Section 1.1 of the Building Loan Agreement.

 

(141)           “Major Lease” means any lease with an Existing Tenant and any other lease that (a) accounts for five percent (5%) or more of the total gross rental revenue of the Project and/or (b) is for 10,000 rentable square feet or more.

 

(142)           “Majority Lenders” means Lenders holding at least 662⁄3% of the aggregate outstanding principal amount of the Loans or, if the Loans shall not have been made, at least 662⁄3% of the Commitments.

 

(143)           “Managing Member” means Acadia-P/A Holding Company, LLC, a Delaware limited liability company, as sole member under the organizational documents of Borrower and its successors as permitted under the Loan Documents.

 

(144)           “Material Adverse Effect” means a material adverse effect, as determined by Administrative Agent, in its reasonable judgment and discretion, on (a) the Project or the business, operations, financial condition, liabilities or capitalization of Borrower, (b) the ability of Borrower to perform its obligations under any of the Loan Documents to which it is a party, including the timely payment of the principal or interest on the Loans or other amounts payable in connection therewith, (c) the ability of any Borrower Party to perform its obligations under any of the Loan Documents to which it is a party, (d) the validity or enforceability of any of the Loan Documents or (e) the rights and remedies of the Lenders and Administrative Agent under any of the Loan Documents.

 

  

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(145)           “Maturity Date” means the earlier of (a) October 5, 2009, as such date may extended pursuant to Section 2.5, or (b) any earlier date on which all of the Loans are required to be paid in full, by acceleration or otherwise, under this Agreement or any of the other Loan Documents.

 

(146)           “Mezzanine Borrower(s)” has the meaning assigned in Section 12.28.

 

(147)           “Mezzanine Option” has the meaning assigned in Section 12.28.

 

(148)           “Minor Contract” has the meaning assigned to such term in Section 1.1 of the Building Loan Agreement.

 

(149)           “Minor Contractor” has the meaning assigned to such term in Section 1.1 of the Building Loan Agreement.

 

(150)           “Mold” has the meaning assigned to such term in Section 5.1(6).

 

(151)           “Moody’s” means Moody’s Investor Services, Inc.

 

(152)           “Mortgages” means, collectively, the (a) Project Loan Mortgage, Assignment of Leases and Rents, Security Agreement and Fixture Filing, (b) the Building Loan Mortgage, Assignment of Leases and Rents, Security Agreement and Fixture Filing and (c) the Acquisition Loan Mortgage, Assignment of Leases and Rents, Security Agreement and Fixture Filing, each executed by Borrower in favor of Administrative Agent (on behalf of the Lenders), covering the Project, as the same may be modified, amended and/or supplemented and in effect from time to time.

 

(153)           “Mortgage Borrower” has the meaning assigned in Section 12.28(2).

 

(154)           “Mortgage Loan” has the meaning assigned in Section 12.28(2).

 

(155)           “Net Operating Income” means the amount by which Operating Revenues exceed Operating Expenses.

 

(156)           “Notes” means, collectively, the Acquisition Loan Notes, the Project Loan Notes and the Building Loan Notes.

 

(157)           “Notice of Default” has the meaning assigned in Section 14.3(1).

 

(158)           “Occupancy” or “Occupy” means (a) with respect to any tenant (other than tenants and licensees covered by clause (b) below), such tenant shall have (i) accepted (or been deemed to have accepted in accordance with the terms of its lease) the delivery of all or substantially all of the space to be demised under the terms of its respective lease, including any Tenant Improvement Work to be performed by Borrower, subject in each case to Punch List Items, and (ii) commenced paying rent in accordance with the terms and conditions of its lease, and (b) with respect to any licensee of the signage or antenna tenants or licensees at the Project, such licensee or tenant, as applicable, shall have accepted the delivery of all of its respective premises, including any Tenant Improvement Work to be performed by Borrower.

 

  

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(159)           “OECD” has the meaning assigned to such term in the definition of “Eligible Assignee” herein.

 

(160)           “Office Component” has the meaning assigned to such term in the definition of “Improvements” herein.

 

(161)           “Operating Expenses” means all reasonable and necessary expenses of operating the Project in the ordinary course of business which are paid in cash by Borrower and which are directly associated with and fairly allocable to the Project for the applicable period, including ad valorem real estate taxes and assessments, insurance premiums, regularly scheduled tax impounds paid to Administrative Agent, maintenance costs (including, without limitation, costs required to be incurred pursuant to the Condominium Declaration), property management fees and costs not to exceed four percent (4%) of Operating Revenues, accounting, legal, and other professional fees, and other expenses incurred by Administrative Agent and reimbursed by Borrower under this Agreement and the other Loan Documents, deposits to any capital reserves required by Administrative Agent, wages, salaries, personnel expenses, but excluding debt service, capital expenditures, any of the foregoing expenses which are paid from deposits to cash reserves previously included as Operating Expenses, any payment or expense for which Borrower was or is to be reimbursed from proceeds of the Loans or insurance or by any third party, and any non-cash charges such as depreciation and amortization.  Any management fee or other expense payable to Borrower or to an Affiliate of Borrower shall be included as an Operating Expense only with Administrative Agent’s prior approval.  Operating Expenses shall not include federal, state or local income taxes or legal and other professional fees unrelated to the operation of the Project.

 

(162)           “Operating Revenues” means all cash receipts of Borrower from operation of the Project or otherwise arising in respect of the Project after the date hereof which are properly allocable to the Project for the applicable period, including receipts from leases and parking agreements, concession fees and charges and other miscellaneous operating revenues, proceeds from rental or business interruption insurance, proceeds of any loans (other than the Loans and any refinancing of the Loans) obtained by Borrower after the date hereof which are secured by the Project (less reasonable and customary expenses incurred in procuring and closing such loan and actually paid in cash to individuals or entities other than Borrower or any Affiliate of Borrower and without implying any consent of Administrative Agent or any Lender to the granting of any security for any such loans), withdrawals from cash reserves (except to the extent any operating expenses paid therewith are excluded from Operating Expenses), in all cases, determined in accordance with GAAP, but excluding (a) security deposits and earnest money deposits until they are forfeited by the depositor, (b) advance rentals (i.e. more than thirty (30) days in advance) until they are earned, (c) lump sum lease buy-out payments made by tenants in connection with any surrender, cancellation or termination of their lease, except to the extent equitably spread over the remaining months of the term of such lease, and (d) proceeds from a sale or other disposition.

 

(163)           “Other Taxes” means any and all present or future stamp or documentary taxes or any other excise or property taxes, charges or similar levies arising from any payment made under any Loan Document or from the execution, delivery or enforcement of, or otherwise with respect to, any Loan Document.

 

  

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(164)           “Participant” has the meaning assigned to such term in Section 12.23(3).

 

(165)           “Payment Date” means the first Business Day of each calendar month.

 

(166)           “Patriot Act” means the USA PATRIOT Act of 2001, Pub. L. No. 107 56.

 

(167)           “Payor” has the meaning assigned to such term in Section 2.6(5).

 

(168)           “Permitted Encumbrances” means with respect to the Project, those exceptions to title set forth in the Title Policies issued to Administrative Agent pursuant to Schedule 4.

 

(169)           “Permitted Transfer” shall mean any of the following transfers, provided there is no Change of Control as a result of such transfer:

 

(a)           a transfer by devise or descent or by operation of law upon the death of a member, partner or shareholder of Borrower or any Affiliate of Borrower, so long as Lead Borrower delivers notice to Administrative Agent as soon as practicable thereafter and that Borrower or such Affiliate is promptly reconstituted, if applicable, following the death of such member partner or shareholder;

 

(b)           transfers for estate planning purposes of an individual’s interest in Borrower or any Affiliate of Borrower to the spouse or any lineal descendant of such individual, or to a trust for the benefit of any one or more of such individual, spouse or lineal descendant, so long as Borrower or such Affiliate is reconstituted, if required, following such transfer;

 

(c)           the sale or pledge, in one or a series of transactions, of the stock, limited partnership interests or non-managing membership interests (as the case may be) in Borrower or an Affiliate of Borrower; provided, however, that no such transfers shall result in any sale, transfer, conveyance, mortgage, pledge, or assignment of the legal or beneficial ownership of the Project, and as a condition to each such transfer, Administrative Agent shall receive no less than thirty (30) days prior written notice of such proposed transfer;

 

(d)           a transfer by P/A Associates, LLC (“P/A Associates”) of 100% of its member interest in Managing Member to Acadia Strategic Opportunity Fund II, LLC (“Fund II”) or an Affiliate of Fund II;

 

(e)           the sale, transfer, or issuance of stock in Acadia Realty Trust (the “Trust”), in the ordinary course of business, provided such stock is listed on the NYSE or other nationally recognized stock exchange; and

 

(f)           a transfer made pursuant to Section 17.3.

 

(170)           “Permitting Schedule” has the meaning assigned to such term in Section 7.6.

 

  

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(171)           “Person” means any individual, corporation, partnership, joint venture, association, joint stock company, trust, trustee, estate, limited liability company, unincorporated organization, real estate investment trust, government or any agency or political subdivision thereof, or any other form of entity.

 

(172)           “Plans and Specifications” has the meaning assigned to such term in Section 1.1 of the Building Loan Agreement.

 

(173)           “Policy” and “Policies” have the respective meanings assigned to such terms in Section 3.1(2).

 

(174)           “Potential Default” means the occurrence of any event or condition which, with the giving of notice, the passage of time, or both, would constitute an Event of Default.

 

(175)           “Prime Rate” means the rate of interest from time to time announced by Eurohypo at its principal U.S. office as its prime commercial lending rate, it being understood that such prime commercial rate is a reference rate and does not necessarily represent the lowest or best rate being charged by Eurohypo to any customer.

 

(176)            “Prohibited Person” shall mean any Person:

 

(a)           listed in the Annex to, or otherwise subject to the provisions of, the Executive Order No. 13224 on Terrorist Financing, effective September 24, 2001, and relating to Blocking Property and Prohibiting Transactions With Persons Who Commit, Threaten to Commit, or Support Terrorism (the “Executive Order”);

 

(b)           that is owned or controlled by, or acting for or on behalf of, any person or entity that is listed to the Annex to, or is otherwise subject to the provisions of, the Executive Order;

 

(c)           with whom any Lender is prohibited from dealing or otherwise engaging in any transaction by any terrorism or money laundering law, including the Executive Order;

 

(d)           who is known to Borrower to commit, threaten or conspire to commit or support “terrorism”, as defined in the Executive Order;

 

(e)           that is named as a “specially designated national and blocked person” on the most current list published by the U.S. Treasury Department Office of Foreign Assets Control at its official website, http://www.treas.gov.ofac/t11sdn.pdf or at any replacement website or other replacement official publication of such list; or

 

(f)           who is known to Borrower to be an Affiliate of or affiliated with a Person listed above.

 

(177)           “Project” has the meaning assigned to such term in Section 1.1 of the Building Loan Agreement.

 

  

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(178)           “Project Amenities” means those areas or elements of, easements over, interests in or licenses or rights to use, those portions of the Project that are granted to Units in the Condominium Declaration.

 

(179)           “Project Completion Work” has the meaning assigned to such term in Section 1.1 of the Building Loan Agreement.

 

(180)           “Project Costs” means, collectively, the Project Loan Costs, the Hard Costs and the Soft Costs.

 

(181)           “Project Documents” has the meaning assigned to such term in Section 1.1 of the Building Loan Agreement.

 

(182)           “Project Loan” and “Project Loans” have the respective meaning assigned to such terms in Section 2.1(1)(a).

 

(183)           “Project Loan Budget” shall mean the portion of the Budget designated as the Project Loan Budget, as the same may be modified from time to time in accordance with the provisions of this Agreement.

 

(184)           “Project Loan Commitment” means, as to each Lender, the obligation of such Lender to make Project Loans in a principal amount up to but not exceeding the amount set opposite the name of such Lender on Schedule 1 under the captions “Project Loan Commitment” or, in the case of a Person that becomes a Lender pursuant to an assignment permitted under Section 12.23(1), as specified in the respective instrument of assignment pursuant to which such assignment is effected.

 

(185)           “Project Loan Costs” shall mean any costs relating to the construction of the Project, including Tenant Improvement Allowances, which do not constitute a Cost of Improvement.

 

(186)           “Project Loan Mortgage” shall mean the Project Loan Mortgage, Assignment of Leases and Rents and Security Agreement in the amount of the Total Project Loan Commitment and executed, dated and delivered by Borrower, to Administrative Agent (on behalf of the Lenders) on the Closing Date, securing the Project Loan Notes, as the same may be modified, amended and/or supplemented and in effect from time to time.

 

(187)           “Project Loan Notes” shall mean, collectively, the promissory note given to each of the Lenders, each note in principal amount equal to such Lender’s Project Loan Commitment and substantially in the form of Exhibit C-1 attached hereto, to be executed, dated and delivered by Borrower to each of the Lenders as of the Closing Date, secured by the Project Loan Mortgage, as the same may be modified, amended and/or supplemented and in effect from time to time.

 

(188)           “Project Work Substantial Completion Conditions” has the meaning assigned to such term in Section 1.1 of the Building Loan Agreement.

 

  

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(189)           “Property Management Agreement” means that certain Property Management Agreement dated as of August 15, 2007 between Property Manager and Borrower with respect to the management of the Project by the Property Manager, together with any property management agreements entered into with future Property Managers in accordance with the terms of this Agreement.

 

(190)           “Property Manager” means Acadia-P/A Management Services, LLC, a Delaware limited liability company, which is initially the manager of the Project under the Property Management Agreement, together with any successor property managers appointed for the Project in accordance with the terms of this Agreement.

 

(191)           “Property Transfer” has the meaning assigned to such term in Section 17.3.

 

(192)           “Property Transfer Conditions” has the meaning assigned to such term in Section 17.3

 

(193)           “Proportionate Share” means, with respect to each Lender, initially the percentage set forth opposite such Lender’s name on Schedule 1.1(193) attached hereto, as such percentage may be modified from time to time pursuant to Assignment and Acceptances and as recorded in Administrative Agent’s register of Lenders for the Loan.

 

(194)           “Proposed Lender” has the meaning assigned to such term in Section 2.7(7).

 

(195)           “Punch List Items” has the meaning assigned to term in Section 1.1 of the Building Loan Agreement.

 

(196)           “Qualified Manager” shall mean either (x) Acadia-P/A Management Services LLC or (y) a reputable and experienced management organization possessing experience (or having principals possessing experience) of not less than ten (10) years managing projects which are similar in size, scope, class, use and value to the Project and is (or has principals currently) managing at least ten (10) properties similar in size, scope, class, use and value as the Project.

 

(197)           “Real Estate Taxes” has the meaning assigned to such term in Section 9.3.

 

(198)           “Recourse Guaranty” means the Recourse Guaranty executed by Guarantor to Administrative Agent (on behalf of the Lenders) on the Closing Date, as the same may be modified, supplemented or amended from time to time.

 

(199)           “Regulation D” means Regulation D of the Board of Governors of the Federal Reserve System of the United States of America (or any successor), as the same may be modified and in effect from time to time.

 

(200)           “Replacement Lender” has the meaning assigned to such term in Section 14.12(6).

 

  

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(201)           “Request for Loan Advance” has the meaning assigned to such term in Section 4.2.

 

(202)           “Requesting Lender” has the meaning assigned to such term in Section 2.7(7).

 

(203)           “Required Payment” has the meaning assigned to such term in Section 2.6(5).

 

(204)           “Restoration Consultant” has the meaning assigned to such term in Section 3.4(2).

 

(205)           “Retail Component” has the meaning assigned to such term in the definition of “Improvements” herein.

 

(206)           “Retainage” has the meaning assigned to such term in Section 1.1 of the Building Loan Agreement.

 

(207)           “S&P” means Standard & Poor’s Ratings Service, a division of The McGraw Hill Companies, Inc.

 

(208)           “Second Extension Period” has the meaning assigned to such term in Section 2.5(2).

 

(209)           “Second Extension Notice” has the meaning assigned to such term in Section 2.5(2)(a)

 

(210)           “Security Accounts” means, collectively, the Sweep Account and the Deficiency Deposit Account.

 

(211)           “Security Account Collateral” has the meaning assigned to such term in Section 15.2(1).

 

(212)           “Security Documents” means collectively, the Mortgages, the Construction Manager’s Consent, the Subordination of Property Management Agreement, any Controlled Account Agreement and all Uniform Commercial Code financing statements filed or to be filed to perfect any security interests arising under any of the Loan Documents.

 

(213)           “Single Purpose Entity” shall mean a corporation, limited partnership or limited liability company which at all times on and after the date hereof, unless otherwise approved in writing by Administrative Agent:

 

(a)           is organized solely for the purpose of one of the following:  (a) acquiring, developing, owning, holding, selling, leasing, transferring, exchanging, managing and operating the Project, entering into this Agreement, refinancing the Project in connection with a permitted repayment of the Loans, and transacting any and all lawful business that is incident, necessary and appropriate to accomplish the foregoing or (b) acting as the sole managing member of Borrower;

 

  

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(b)           is not engaged and will not engage in any business unrelated to (a) the acquisition, development, ownership, management or operation of the Project or (b) acting as the sole managing member of Borrower;

 

(c)           does not have and will not have any assets other than those related to (a) the Project or (b) its membership interest in Borrower;

 

(d)           has not engaged, sought or consented to and will not engage in, seek or consent to any dissolution, winding up, liquidation, consolidation, merger, sale of all or substantially all of its assets, transfer of partnership or membership interests in violation of this Agreement (if such entity is a general partner in a limited partnership or a member in a limited liability company), or any amendment of its articles of incorporation, by-laws, limited partnership certificate, limited partnership agreement, articles of organization, certificate of formation or operating agreement (as applicable) with respect to the matters set forth in this definition without the prior written consent of Administrative Agent;

 

(e)           in the case of Borrower, has and will have, as its only managing member, the Managing Member, which shall be a limited liability company that is a Single Purpose Entity and has at least one (1) Independent Manager;

 

(f)           if such entity is (i) a limited liability company, has articles of organization, a certificate of formation and/or an operating agreement, as applicable, (ii) a limited partnership, has a certificate of limited partnership and limited partnership agreement, or (ii) a corporation, has a certificate of incorporation or articles of incorporation, that in each case provide that such entity shall not, without the consent without the unanimous written consent of all of its partners or members (and, in the case of the managing member of the Managing Member, its Independent Manager(s)):  (a) dissolve, merge, liquidate or consolidate itself or any Person in which it has a direct or indirect legal or beneficial ownership interest; (b) sell all or substantially all of its assets or the assets of any other Person in which it has a direct or indirect legal or beneficial ownership interest; (c) engage in any other business activity or permit any Person in which it has a direct or indirect legal or beneficial ownership interest to engage in any other business activity, in each case except as permitted pursuant to the Loan Documents, (iv) file a bankruptcy or insolvency petition or otherwise institute insolvency proceedings with respect to itself or to any other Person in which it has a direct or indirect legal or beneficial ownership interest, or (v) amend its organizational documents with respect to the matters set forth in this definition without the consent of Administrative Agent;

 

(g)           if such entity is a limited partnership, has as its only general partner a Single Purpose Entity;

 

(h)           is and will pay its debts and liabilities (including, as applicable, shared personnel and overhead expenses) from its assets as the same shall become due, and is maintaining and will maintain adequate capital for the normal obligations reasonably foreseeable in a business of its size and character and in light of its contemplated business operations;

 

(i)           has not failed and will not fail to correct any known misunderstanding regarding the separate identity of such entity;

 

  

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(j)           has maintained and will maintain its accounts, books and records separate from any other Person and will file its own tax returns, except to the extent that it is required or permitted to file consolidated tax returns by law;

 

(k)           has not commingled and will not commingle its funds or assets with those of any other Person;

 

(l)           has held and will hold its assets in its own name;

 

(m)           has maintained and will maintain financial statements that properly and accurately show its separate assets and liabilities and do not show the assets or liabilities of 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 other than an Affiliate (but in such case noting that such entity and the Affiliate are separate entities);

 

(n)           has maintained and will maintain a sufficient number of employees or has entered into appropriate alternative arrangements for workforce services in light of its contemplated business operations;

 

(o)           has observed and will observe all corporate, partnership or limited liability company formalities, as applicable;

 

(p)           has not incurred and will not incur any Debt other than (a) with respect to Borrower, the Loans and (b) trade and operational debt which is (i) incurred in the ordinary course of business, (ii) not more than sixty (60) days past due, (iii) with trade creditors, (iv) with respect to Borrower, in the aggregate, in an amount less than $1,000,000, and (v) not evidenced by a note;

 

(q)           has not and will not assume or guarantee or become obligated for the debts of any other Person or hold out its credit as being available to satisfy the obligations of any other Person except as permitted pursuant to this Agreement;

 

(r)           has not and will not acquire obligations or securities of its members or shareholders or any other Affiliate;

 

(s)           has allocated and will allocate fairly and reasonably any overhead expenses that are shared with an Affiliate, including, but not limited to, paying for shared office space and services performed by any officer or employee of an Affiliate;

 

(t)           maintains and uses and will maintain and use separate invoices and checks bearing its name.  The stationary, invoices, and checks utilized by the Single Purpose Entity or utilized to collect its funds or pay its expenses shall bear its own name and shall not bear the name of any other entity unless such entity is clearly designated as being the Single Purpose Entity’s agent;

 

(u)           except in connection with the Loans, has not pledged and will not pledge its assets for the benefit of any other Person;

 

  

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(v)           has conducted business, held itself out and identified itself and will conduct business, 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 a Person other than an Affiliate of Borrower and not as a division or part of any other Person;

 

(w)           has not made and will not make loans to any Person or hold evidence of indebtedness issued by any other Person (other than cash and securities issued by an entity that is not an Affiliate or subject to common ownership with such entity);

 

(x)           has not identified and will not identify its partners, members or shareholders, 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;

 

(y)           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 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;

 

(z)           has not and will not have any obligation to indemnify its partners, officers, directors or members, as the case may be, unless such obligation is fully subordinated to the Indebtedness and will not constitute a claim against it in the event that, after payment of the Indebtedness, cash flow is insufficient to pay such obligation; and

 

(aa)           if such entity is a corporation, it is required to consider the interests of its creditors in connection with all corporate actions.

 

(214)           “Site Assessment” means an environmental engineering report for the Project prepared by an engineer engaged by Administrative Agent at Borrower’s expense, and in a manner and scope satisfactory to Administrative Agent.

 

(215)           “Soft Costs” has the meaning assigned to such term in Section 1.1 of the Building Loan Agreement.

 

(216)           “Special Advance Lender” has the meaning assigned to such term in Section 14.12(1).

 

(217)           “Sponsor” means Acadia Realty Limited Partnership.

 

(218)           “State” means the State of New York.

 

(219)           “Statutory Reserve Rate” means a fraction (expressed as a decimal), the numerator of which is the number one and the denominator of which is the number one minus the aggregate of the maximum reserve percentages (including any marginal, special, emergency or supplemental reserves) expressed as a decimal established by the Board to which Administrative Agent is subject with respect to the Adjusted LIBO Rate, for eurocurrency funding (currently referred to as “Eurocurrency Liabilities” in Regulation D of the Board).  Such reserve percentages shall include those imposed pursuant to such Regulation D.  Eurodollar Loans shall be deemed to constitute eurocurrency funding and to be subject to such reserve requirements without benefit of or credit for proration, exemptions or offsets that may be available from time to time to any Lender under such Regulation D or any comparable regulation.  The Statutory Reserve Rate shall be adjusted automatically on and as of the effective date of any change in any reserve percentage.

 

  

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(220)           “Subguard Policy” has the meaning assigned to such term in Section 1.1 of the Building Loan Agreement.

 

(221)           “Subordination of Property Management Agreement” means that certain Subordination of Property Management Agreement, dated the date hereof, by the Property Manager in favor of Administrative Agent (on behalf of the Lenders), as the same may be modified, amended and/or supplemented and in effect from time to time.

 

(222)           “Survey” means that certain survey delivered to Administrative Agent pursuant to Schedule 4 – Part A, paragraph 11 as the same may be modified from time to time.

 

(223)           “Sweep Account” has the meaning assigned to such term in Section 15.1.

 

(224)           “Syndication” has the meaning assigned to such term in Section 12.27.

 

(225)           “Taxes” means all present or future taxes, levies, imposts, duties, deductions, withholdings, assessments, fees or other charges imposed by any Governmental Authority, including any interest, additions to tax or penalties applicable thereto.

 

(226)           “Tenant Allowance Plans” means, as to each tenant under an Approved Lease which is receiving any Tenant Improvement Allowance, the plans received by Borrower pursuant to the applicable Approved Lease and approved by Borrower and Borrower’s Architect covering tenant work under Tenant Improvement Allowances, to be certified by Borrower to Administrative Agent and the Lenders and approved by the applicable tenant, Borrower, all required Governmental Authorities, and either (x) within the Budget or (y) approved reasonably by Administrative Agent.

 

(227)           “Tenant Estoppel” means an estoppel in form and substance reasonably acceptable to Administrative Agent, to be completed, executed, dated and delivered by the applicable tenant to Administrative Agent (on behalf of the Lenders) and Borrower pursuant to the terms of this Agreement.

 

(228)           “Tenant Improvement Allowances” means allowances for Tenant Improvement Work.

 

(229)           “Tenant Improvement Plans” has the meaning assigned to such term in Section 1.1 of the Building Loan Agreement.

 

(230)           “Tenant Improvement Work” has the meaning assigned to such term in Section 1.1 of the Building Loan Agreement.

 

  

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(231)           “Third Extension Period” has the meaning assigned to such term in Section 2.5(3).

 

(232)           “Third Extension Notice” has the meaning assigned to such term in Section 2.5(3)(a).

 

(233)           “Third-Party Counterparty” has the meaning assigned to such term in Section 9.15(3).

 

(234)           “Third-Party Hedge Agreement” has the meaning assigned to such term in Section 9.15(3).

 

(235)           “Threshold Amount” means $2,000,000.

 

(236)           “Title Insurer” means, collectively, Royal Abstract of New York, LLC and NY Land Services, as co-insurers in amounts approved by Administrative Agent, through title insurance placed by Commonwealth Land Title Insurance Company, Stewart Title Insurance Company, and LandAmerica, respectively.

 

(237)           “Title Policies” has the meaning assigned in Schedule 4 – Part A, paragraph 10.

 

(238)           “Total Acquisition Loan Commitment” has the meaning assigned to such term in the Recitals.

 

(239)           “Total Building Loan Commitment” has the meaning assigned to such term in the Recitals.

 

(240)           “Total Project Loan Commitment” has the meaning assigned to such term in the Recitals.

 

(241)           “Type” means the type of Loan made hereunder, i.e. whether such Loan is a Base Rate Loan or  LIBOR-based Loan.

 

(242)           “Unavoidable Delay” has the meaning assigned to such term in Section 1.1 of the Building Loan Agreement.

 

(243)           “Unit” means each unit of the Condominium, together with all rights, interests and easements in and to the Project Amenities that are held by the owner of such unit as a result of the operation of the terms of the Condominium Declaration.

 

(244)           “Unit Annual Assessments” means the assessments allocated to each Unit and collected by Declarant as set forth in the Condominium Declaration.

 

(245)           “Unpaid Amount” has the meaning assigned to such term in Section 14.12(2).

 

(246)           “Unsatisfactory Work” has the meaning assigned to such term in Section 1.1 of the Building Loan Agreement.

 

  

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ARTICLE 2

 

 

LOAN TERMS

 

Section 2.1The Commitments, Loans and Notes.

 

(1)           Loans.

 

(a)           Each Lender severally agrees, on the terms and conditions of this Agreement, to make loans (each advance of such a loan being a “Project Loan” and collectively, the “Project Loans”) on a non-revolving basis to Borrower in Dollars from time to time in amounts equal to its Proportionate Share of the aggregate amount of Project Loans to be made of such time; provided, however, that in no event shall the aggregate principal amount advanced by each Lender exceed the amount of the Project Loan Commitment of such Lender.  The Project Loans shall be advanced for the payment of Project Loan Costs in accordance with the Project Loan Budget.

 

(b)           Each Lender severally agrees, on the terms and conditions of this Agreement, to make loans (each advance of such a loan being an “Acquisition Loan” and collectively, the “Acquisition Loans”) on a non-revolving basis to Borrower in Dollars on the Closing Date in an amount equal to its Proportionate Share of the Total Acquisition Loan Commitment.  The Acquisition Loans shall be advanced for purposes of re-financing Borrower’s cost of acquiring its interest in the Land.

 

(2)           Requests for Loan Advances.  Advances with respect to the Acquisition Loans shall be made on the Closing Date.  With respect to the other Loans, Lead Borrower shall give Administrative Agent (and the Construction Consultant) a Request for Loan Advance as provided in Section 4.2.  Administrative Agent shall give each Lender notice of any such Request for Loan Advance in accordance with Section 2.6(4).  Not later than 12:00 noon New York time on the date specified for each Loan, each Lender shall make available for the account of its Applicable Lending Office to Administrative Agent as specified by Administrative Agent, in immediately available funds, such Lender’s Proportionate Share of each Loan to be made pursuant hereto.  After Administrative Agent’s receipt of such funds and upon fulfillment of the applicable conditions set forth in Article 4 and Schedule 4, Administrative Agent shall make such funds available to Lead Borrower by depositing the same in an account designated by Lead Borrower by the end of business on the applicable advance date.

 

(3)           Changes of Commitments.

 

(a)           The respective Commitments shall reduce pro rata automatically by reason of any prepayment of the Loans applicable thereto in the amount of any such prepayment.

 

(b)           If the Maturity Date is extended in accordance with Section 2.5, all of the unfunded Commitments (other than for Tenant Improvement Allowances with respect to the Office Component and any remaining Retainage, which will terminate on the First Extension Maturity Date) then remaining at the commencement of the extended loan period shall be automatically terminated.

 

  

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(4)           Lending Offices.  The Loans of each Lender shall be made and maintained at such Lender’s Applicable Lending Office for Loans of such Type.

 

(5)           Several Obligations.  The failure of any Lender to make any Loan to be made by it on the date specified therefor shall not relieve any other Lender of its obligation to make its Loan, but neither any Lender nor Administrative Agent shall be responsible for the failure of any other Lender to make a Loan to be made by such other Lender.

 

(6)           Notes.

 

(a)           Project Loan Notes.  The Project Loans made by each Lender shall be evidenced by a Project Loan Note of Borrower, payable to such Lender in a principal amount equal to the amount of its Project Loan Commitment as originally in effect and otherwise duly completed.

 

(b)           Building Loan Notes.  The Building Loans made by each Lender shall be evidenced by a Building Loan Note of Borrower, payable to such Lender in a principal amount equal to the amount of its Building Loan Commitment as originally in effect and otherwise duly completed.

 

(c)           Acquisition Loan Notes.  The Acquisition Loans made by each Lender shall be evidenced by an Acquisition Loan Note of Borrower, payable to such Lender in a principal amount equal to the amount of its Acquisition Loan Commitment as originally in effect and otherwise duly completed.

 

(d)           Substitution, Exchange and Subdivision of Notes.  No Lender shall be entitled to have its Notes substituted or exchanged for any reason, or subdivided for promissory notes of lesser denominations, except in connection with a permitted assignment of all or any portion of such Lender’s Commitment, Loans and Notes pursuant to Section 12.9 and Section 12.23 (and, if requested by any Lender, Borrower agrees to so substitute or exchange any Notes and enter into note splitter agreements in connection therewith).

 

(e)           Loss, Theft, Destruction or Mutilation of Notes.  In the event of the loss, theft or destruction of any Note, upon Borrower’s receipt of a reasonably satisfactory indemnification agreement executed in favor of Borrower by the holder of such Note, or in the event of the mutilation of any Note, upon the surrender of such mutilated Note by the holder thereof to Borrower, Borrower shall execute and deliver to such holder a new replacement Note in lieu of the lost, stolen, destroyed or mutilated Note.

 

  

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Section 2.2Conversions or Continuations of Loans

 

(1)           Subject to Section 2.6(3), Section 2.7(2) and Section 2.7(3), Lead Borrower shall have the right to Convert Loans of one Type into Loans of another Type or Continue Loans of one Type as Loans of the same Type, at any time or from time to time; provided that:  (a) Lead Borrower shall give Administrative Agent notice of each such Conversion or Continuation as provided in Section 2.6(4); (b) LIBOR-based Loans may be Converted only on the last day of an Interest Period for such Loans unless Borrower complies with the terms of Section 2.7(5) and (c) subject to Section 2.7(1) and Section 2.7(3), any Conversion or Continuation of Loans shall be pro rata among the Lenders.  Notwithstanding the foregoing, and without limiting the rights and remedies of Administrative Agent and the Lenders under Article 11, in the event that any Event of Default exists, Administrative Agent may (and at the request of the Majority Lenders shall) suspend the right of Lead Borrower to Convert any Loan into a LIBOR-based Loan, or to Continue any Loan as a LIBOR-based Loan for so long as such Event of Default exists, in which event all Loans shall be Converted (on the last day(s) of the respective Interest Periods therefor) or Continued, as the case may be, as Base Rate Loans.  In connection with any such Conversion, a Lender may (at its sole discretion) transfer a Loan from one Applicable Lending Office to another.

 

(2)           Notwithstanding anything to the contrary contained in this Agreement, at any time that a Hedge Agreement is in effect, Lead Borrower shall have the right to choose only an Interest Period with respect to the principal amount equal to the notional amount under such Hedge Agreement which is the same as the Interest Rate Hedge Period which is the same as the Interest Rate Hedge Period.

 

Section 2.3Interest Rate; Late Charge.

 

(1)           Borrower hereby promises to pay to Administrative Agent for account of each Lender interest on the unpaid principal amount of each Loan made by such Lender for the period from and including the date of such Loan to but excluding the date such Loan shall be paid in full, at the following rates per annum:

 

(a)           during such periods as such Loan is a Base Rate Loan, the Base Rate; and

 

(b)           during such periods as such Loan is a LIBOR-based Loan, for each Interest Period relating thereto, the Adjusted Libor Rate for such Loan for such Interest Period plus the Applicable Margin.

 

(2)           Accrued interest on each Loan shall be payable (i) monthly in arrears on each Payment Date and (ii) in the case of any Loan, upon the payment or prepayment thereof or the Conversion of such Loan to a Loan of another Type (but only on the principal amount so paid, prepaid or Converted), except that interest payable at the Default Rate shall be payable from time to time on demand.

 

(3)           Notwithstanding anything to the contrary contained herein, after the Maturity Date and during any period when an Event of Default exists, Borrower shall pay to Administrative Agent for the account of each Lender (i) interest at the applicable Default Rate on the outstanding principal amount of any Loan made by such Lender, (ii) any interest payments thereon not paid when due and (iii) interest on any other amount payable by Borrower hereunder, under the Notes and any other Loan Documents.

 

  

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(4)           Promptly after the determination of any interest rate provided for herein or any change therein, Administrative Agent shall give notice thereof to the Lenders to which such interest is payable and to Lead Borrower, but the failure of Administrative Agent to provide such notice shall not affect Borrower’s obligation for the payment of interest on the Loans.

 

(5)           In addition to any sums due under this Section 2.3, Borrower shall pay to Administrative Agent for the account of the Lenders a late payment premium in the amount of five percent (5)% of any payments of interest or other sums under the Loans made more than five (5) days after the due date thereof (other than the principal balance due on the Maturity Date), which late payment premium shall be due with any such late payment or upon demand by Administrative Agent.  Such late payment charge represents the reasonable estimate of Borrower and the Lenders of a fair average compensation for the loss that may be sustained by the Lenders due to the failure of Borrower to make timely payments.  Such late charge shall be paid without prejudice to the right of Administrative Agent and the Lenders to collect any other amounts provided herein or in the other Loan Documents to be paid or to exercise any other rights or remedies under the Loan Documents.

 

(6)           Borrower shall pay Additional Interest under the Notes in accordance with the terms of any Hedge Agreement provided by a Eurohypo Counterparty.

 

Section 2.4Terms of Payment»

 

.  The Loans shall be payable as follows:

 

(1)           Interest.  Borrower shall pay interest in arrears on each Payment Date in accordance with the wire transfer instructions set forth in Schedule 2.4(1) hereto (or such other instructions as Administrative Agent may from time to time provide) until all amounts due under the Loan Documents are paid in full.  Subject to the provisions of Article 4 and Section 2.1, such accrued interest shall be payable from the interest reserves established pursuant to the Budget; provided, however, that such reserves shall not limit Borrower’s obligation to pay such accrued interest.

 

(2)           Amounts Prepaid.   No amounts paid or prepaid by the Borrower under the Loans shall be available to be reborrowed by the Borrower.

 

(3)           Maturity.  On the Maturity Date, Borrower shall pay to Administrative Agent (on behalf of the Lenders) all outstanding principal, accrued and unpaid interest, and any other amounts due under the Loan Documents.

 

(4)           Optional Prepayments.  Subject to the provisions of Section 2.4(6) and Section 2.7(5), Borrower shall have the right to prepay Loans in whole or in part, without premium or penalty; provided that:  (a) Lead Borrower shall give Administrative Agent notice of each such prepayment as provided in Section 2.6(4) (and, upon the date specified in any such notice of prepayment, the amount to be prepaid shall become due and payable hereunder) and (b) partial prepayments shall be in the minimum aggregate principal amounts specified in Section 2.6(3).

 

(5)           Mandatory Prepayments.  If a casualty or condemnation shall occur with respect to the Project, Borrower, upon Borrower’s or Administrative Agent’s receipt of the applicable insurance proceeds or condemnation award, shall prepay the Loan, if required by the provisions of Article 3, on the dates and in the amounts specified therein without premium or penalty (but subject to the provisions of Section 2.4(6) and Section 2.7(5)).  Nothing in this Section 2.4(5) shall be deemed to limit any obligation of Borrower under the Mortgages or any other Security Document, including any obligation to remit to a collateral or similar account maintained by Administrative Agent pursuant to the Mortgages or any of the other Security Documents the proceeds of insurance, condemnation award or other compensation received in respect of any casualty or condemnation.  Prepayments pursuant to this Section 2.4(5) shall be applied to the Loans then outstanding pro rata in the order set forth in Section 2.4(6).

 

  

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(6)           Interest and Other Charges on Prepayment.  If the Loans are prepaid, in whole or in part, pursuant to Section 2.4(4) or Section 2.4(5), each such prepayment shall be made on the prepayment date specified in the notice to Administrative Agent pursuant to Section 2.6(4), together with (a) the accrued and unpaid interest (including accrued and unpaid Additional Interest, if applicable(which may include certain early termination payments, in accordance with the terms of any applicable Hedge Agreement provided by a Eurohypo Counterparty)) on the principal amount prepaid, (b) any amounts payable to a Lender pursuant to Section 2.7(5) as a result of such prepayment while an Adjusted Libor Rate is in effect and (c) the Exit Fee, if any, payable pursuant to Section 2.9.

 

(7)           Application of Payments.  Lead Borrower shall, at the time of Borrower’s making of each payment under this Agreement or any Note for the account of any Lender, specify to Administrative Agent (which shall so notify the intended recipient(s) thereof) the Loans or other amounts payable by Borrower hereunder to which such payment is to be applied (and in the event that Lead Borrower fails to so specify, or if an Event of Default has occurred and is continuing, Administrative Agent may distribute such payment to the Lenders for application in such manner as it may determine to be appropriate, subject to Section 2.6(1) and any other agreement among Administrative Agent and the Lenders with respect to such application).

 

(8)           Payments by Borrower.  Except to the extent otherwise provided therein, all payments to be made by Borrower under the Loan Documents shall be made in Dollars, in immediately available funds, without deduction, set-off or counterclaim, to Administrative Agent at an account designated by Administrative Agent by notice to Lead Borrower, not later than 2:00 p.m., New York City time, on the date on which such payment shall become due (each such payment made after such time on such due date to be deemed to have been made on the next succeeding Business Day).

 

(9)           Forwarding of Payments by Administrative Agent.  Except as otherwise agreed by Administrative Agent and the Lenders, each payment received by Administrative Agent under this Agreement or any Note for account of any Lender shall be paid by Administrative Agent promptly to such Lender, in immediately available funds, for account of such Lender’s Applicable Lending Office for the Loan or the other obligation in respect of which payment is made.

 

(10)           Extension to Next Business Day.  If the due date of any payment under this Agreement or any Note would otherwise fall on a day that is not a Business Day, such date shall be extended to the next succeeding Business Day, and interest shall be payable for any principal so extended for the period of such extension.

 

  

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Section 2.5Extension of Maturity Date. 

 

(1)           Borrower may, at its option, extend the term for a period of six (6) months to the six month anniversary of the original Maturity Date (the “First Extension Maturity Date” and the applicable period being, the “First Extension Period”), subject to the satisfaction of the following conditions:

 

(a)           Lead Borrower shall notify (the “First Extension Notice”) Administrative Agent of Borrower’s exercise of such option between forty-five (45) and ninety (90) days prior to the original Maturity Date;

 

(b)           No Event of Default exists and is continuing as of the date of the First Extension Notice, as of the original Maturity Date or would result from the extension of the maturity of the Loans for the First Extension Period;

 

(c)           With respect to the Retail Component, one-hundred percent 100% of the Approved Leases shall be in full force and effect with tenants in Occupancy pursuant to Approved Leases who are not in material default under their respective Approved Lease, and such Approved Leases shall provide for an aggregate fixed minimum rent (as determined in a manner reasonably acceptable to Administrative Agent) of no less than $5,860,000;

 

(d)           With respect to the Office Component, the Office Component shall be fifty percent (50%) leased with tenants pursuant to Approved Leases who are not in material default under their lease;

 

(e)           At Administrative Agent’s request, Borrower shall use commercially reasonable efforts to provide to Administrative Agent, written estoppels in form and substance reasonably satisfactory to Administrative Agent, executed by tenants under any Approved Lease confirming the term, rent, and other provisions and matters relating to such Approved Leases;

 

(f)           The ratio of (a) the total outstanding principal balance of the Loans to (b) the value of the Project does not exceed 70% based on a new Appraisal obtained by Administrative Agent with a value date as of not more than sixty (60) days prior to the original Maturity Date, such Appraisal to be at Borrower’s expense;

 

(g)           Borrower shall have satisfied all of the Project Work Substantial Completion Conditions prior to the Completion Date;

 

(h)           All Government Approvals for the Improvements shall have been received to the extent then applicable, with copies (if applicable) having been delivered to Administrative Agent;

 

(i)           Current financial statements regarding Borrower (dated not earlier than ninety (90) days prior to the First Extension Notice) and all other financial statements and other information as may be required under this Agreement and the Loan Documents regarding Borrower and the Project shall have been submitted promptly to Administrative Agent;

 

  

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(j)           In the opinion of Administrative Agent, there shall not have occurred any Material Adverse Effect;

 

(k)           Whether or not the extension becomes effective, Borrower shall pay all out-of-pocket costs and expenses incurred by Administrative Agent and the Lenders in connection with the proposed extension (pre- and post-closing), including appraisal fees and reasonable legal fees; all such costs and expenses shall be due and payable upon demand, and any failure to pay such amounts shall constitute a default under this Agreement and the Loan Documents;

 

(l)           Not later than the original Maturity Date, (i) the extension shall have been documented to the Lenders’ reasonable satisfaction and consented to by Borrower, Administrative Agent and all the Lenders, including the execution and delivery by Guarantor of reaffirmations of their respective obligations under the Guarantor Documents and (ii) Administrative Agent shall have been provided with an updated title report and judgment and lien searches, and appropriate title insurance endorsements shall have been issued as required by Administrative Agent; and

 

(m)           Borrower shall pay to Administrative Agent (for the benefit of the Lenders in accordance with their Proportionate Shares) on the original Maturity Date a non-refundable extension fee equal to 0.125% of an amount equal to the outstanding principal amount at such time.

 

(2)           Borrower may, at its option, extend the term for a period of six (6) months to the first anniversary of the original Maturity Date (the “Second Extension Maturity Date” and the applicable period being, the “Second Extension Period”), subject to the satisfaction of the following conditions:

 

(a)           Lead Borrower shall notify (the “Second Extension Notice”) Administrative Agent of Borrower’s exercise of such option between forty-five (45) and ninety (90) days prior to the First Extension Maturity Date;

 

(b)           No Event of Default exists and is continuing as of the date of the Second Extension Notice, as of the First Extension Maturity Date or would result from the extension of the maturity of the Loans for the Second Extension Period;

 

(c)           With respect to the Retail Component, one-hundred percent 100% of the Approved Leases shall be in full force and effect with tenants in Occupancy pursuant to Approved Leases who are not in material default under their respective Approved Lease, and such Approved Leases shall provide for an aggregate fixed minimum rent (as determined in a manner reasonably acceptable to Administrative Agent) of no less than $5,860,000;

 

(d)           With respect to the Office Component, the Office Component shall be eighty-three percent (83%) leased with tenants pursuant to Approved Leases who are not in material default under their lease;

 

  

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(e)           At Administrative Agent’s request, Borrower shall use reasonable commercially reasonable efforts to provide to Administrative Agent, written estoppels in form and substance reasonably satisfactory to Administrative Agent, executed by tenants under any Approved Lease confirming the term, rent, and other provisions and matters relating to such Approved Leases;

 

(f)           All Government Approvals for the Improvements shall have been received to the extent then applicable, with copies (if applicable) having been delivered to Administrative Agent;

 

(g)           Current financial statements regarding Borrower (dated not earlier than ninety (90) days prior to the Second Extension Notice) and all other financial statements and other information as may be required under this Agreement and the Loan Documents regarding Borrower and the Project shall have been submitted promptly to Administrative Agent;

 

(h)           In the opinion of Administrative Agent, there shall not have occurred any Material Adverse Effect;

 

(i)           Whether or not the extension becomes effective, Borrower shall pay all out-of-pocket costs and expenses incurred by Administrative Agent and the Lenders in connection with the proposed extension (pre- and post-closing), including appraisal fees and reasonable legal fees; all such costs and expenses shall be due and payable upon demand, and any failure to pay such amounts shall constitute a default under this Agreement and the Loan Documents;

 

(j)           Not later than the First Extension Maturity Date, (i) the extension shall have been documented to the Lenders’ reasonable satisfaction and consented to by Borrower, Administrative Agent and all the Lenders, including the execution and delivery by Guarantor of reaffirmations of their respective obligations under the Guarantor Documents and (ii) Administrative Agent shall have been provided with an updated title report and judgment and lien searches, and appropriate title insurance endorsements shall have been issued as required by Administrative Agent; and

 

(k)           Borrower shall pay to Administrative Agent (for the benefit of the Lenders in accordance with their Proportionate Shares) on the First Extension Maturity Date a non-refundable extension fee equal to 0.125% of an amount equal to the outstanding principal amount at such time.

 

(3)           Borrower may, at its option, extend the term for a period of six (6) months to the first anniversary of the First Extension Maturity Date (the “Third Extension Maturity Date” and the applicable period being, the (“Third Extension Period”), subject to the satisfaction of the following conditions:

 

(a)           Lead Borrower shall notify (the “Third Extension Notice”) Administrative Agent of Borrower’s exercise of such option between forty-five (45) and ninety (90) days prior to the Second Extension Maturity Date;

 

  

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(b)           No Event of Default exists and is continuing as of the date of the Third Extension Notice, as of the Second Extension Maturity Date or would result from the extension of the maturity of the Loans for the Third Extension Period;

 

(c)           With respect to the Retail Component, one-hundred percent 100% of the Approved Leases shall be in full force and effect with tenants in Occupancy pursuant to Approved Leases who are not in material default under their respective Approved Lease, and such Approved Leases shall provide for an aggregate fixed minimum rent (as determined in a manner reasonably acceptable to Administrative Agent) of no less than $5,860,000;

 

(d)           With respect to the Office Component, the Office Component shall be ninety percent (90%) leased with tenants pursuant to Approved Leases who are not in material default under their lease;

 

(e)           At Administrative Agent’s request, Borrower shall use commercially reasonable efforts to provide to Administrative Agent, written estoppels in form and substance reasonably satisfactory to Administrative Agent, executed by tenants under any Approved Lease confirming the term, rent, and other provisions and matters relating to such Approved Leases;

 

(f)           The ratio of (a) the total outstanding principal balance of the Loans to (b) the value of the Project does not exceed 70% based on a new Appraisal obtained by Administrative Agent with a value date as of not more than sixty (60) days prior to the Second Extension Maturity Date, such Appraisal to be at Borrower’s expense;

 

(g)           All Government Approvals for the Improvements shall have been received to the extent then applicable, with copies (if applicable) having been delivered to Administrative Agent;

 

(h)           Current financial statements regarding Borrower (dated not earlier than ninety (90) days prior to the Third Extension Notice) and all other financial statements and other information as may be required under this Agreement and the Loan Documents regarding Borrower and the Project shall have been submitted promptly to Administrative Agent;

 

(i)           In the opinion of Administrative Agent, there shall not have occurred any Material Adverse Effect;

 

(j)           Whether or not the extension becomes effective, Borrower shall pay all out-of-pocket costs and expenses incurred by Administrative Agent and the Lenders in connection with the proposed extension (pre- and post-closing), including appraisal fees and reasonable legal fees; all such costs and expenses shall be due and payable upon demand, and any failure to pay such amounts shall constitute a default under this Agreement and the Loan Documents;

 

(k)           Not later than the Second Extension Maturity Date, (i) the extension shall have been documented to the Lenders’ reasonable satisfaction and consented to by Borrower, Administrative Agent and all the Lenders, including the execution and delivery by Guarantor of reaffirmations of their respective obligations under the Guarantor Documents and (ii) Administrative Agent shall have been provided with an updated title report and judgment and lien searches, and appropriate title insurance endorsements shall have been issued as required by Administrative Agent; and

 

  

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(l)           Borrower shall pay to Administrative Agent (for the benefit of the Lenders in accordance with their Proportionate Shares) on the First Extension Maturity Date a non-refundable extension fee equal to 0.125% of an amount equal to the outstanding principal amount at such time.

 

Any extension pursuant to this Section 2.5 shall be otherwise subject to all of the other terms and provisions of this Agreement, the Building Loan Agreement and the other Loan Documents.

 

Section 2.6Pro Rata Treatment of Payments; Etc.

 

(1)           Pro Rata Treatment.  Except as otherwise provided in Section 2.7(4), Loans shall be allocated pro rata among the Lenders according to the amounts of their respective Commitments (in the case of the making of Loans) or their respective Loans (in the case of Conversions or Continuations of Loans); (c) each payment or prepayment of principal of Loans by Borrower shall be made for account of the Lenders pro rata in accordance with the respective unpaid principal amounts of the Loans held by them (subject, while any Event of Default exists, to the terms of any separate agreement among Administrative Agent and the Lenders); and (d) each payment of interest on Loans by Borrower shall be made for account of the Lenders pro rata in accordance with the amounts of interest on such Loans then due and payable to the respective Lenders (subject, while any Event of Default exists, to the terms of any separate agreement among Administrative Agent and the Lenders).

 

(2)           Computations.  Interest on all Loans shall be computed on the basis of a year of 360 days and actual days elapsed (including the first day but excluding the last day) occurring in the applicable period.

 

(3)           Minimum Amounts.  Except for (a) mandatory prepayments made pursuant to Section 2.4(5) and (b) Conversions or prepayments made pursuant to Section 2.7(4), and (c) advances pursuant to Section 4.4, Section 4.5, Section 4.6, and Section 4.11, each borrowing, Conversion, Continuation and partial prepayment of principal (collectively, “Loan Transactions”) of Loans shall be in an aggregate amount of at least $1,000,000 and in additional increments of $100,000 (Loan Transactions of or into Loans of different Types or Interest Periods at the same time hereunder shall each be deemed separate Loan Transactions for purposes of the foregoing).  Any Loans or borrowings of less than $1,000,000 shall be made as Base Rate Loans.  Notwithstanding the foregoing, the minimum amount of $1,000,000 shall not apply to Conversions of lesser amounts into a tranche of Loans that has (or will have upon such Conversion) an aggregate principal amount exceeding $1,000,000.

 

  

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(4)           Certain Notices.  Notices by Lead Borrower to Administrative Agent regarding Loan Transactions and the selection of Types of Loans and/or of the duration of Interest Periods shall be irrevocable and shall be effective only if received by Administrative Agent (and, in the case of a Request for Loan Advance, the Construction Consultant) not later than 3:00 p.m., New York City time, on the number of Business Days prior to the date of the proposed Loan Transaction or the first day of such Interest Period specified below:

 

	
Notice

	
Number of Business Days Prior

	
Request for Loan Advance

	
10

	
Optional Prepayment

	
3

	
Conversions into, Continuations as, or borrowings in Base Rate Loans

	
3

	
Conversions into, Continuations as, borrowings in or changes in

duration of Interest Period for, LIBOR-based Loans (subject to Section 2.4(6))

	
3

 

Each Loan Transaction notice shall specify the amount, Type, Interest Period and date of such proposed Loan Transaction, and in the case of a Request for Loan Advance, shall be accompanied by all documentation required by this Agreement as a condition precedent to the applicable Loans.  Notices for Conversions and Continuations shall be in the form of Exhibit E.  Each such notice specifying the duration of an Interest Period shall specify the portion of the Loans to which such Interest Period is to relate.  In the case of a Request for Loan Advance, Administrative Agent shall notify the Lenders of their respective Proportionate Shares of the amount approved by Administrative Agent and the Construction Consultant.  If Lead Borrower fails to select (i) the Type of Loan or (ii) the duration of any Interest Period for any LIBOR-based Loan within the required time period and otherwise as provided in this Section 2.6(4), such Loan (if outstanding as a LIBOR-based Loan) will be automatically Continued as an LIBOR-based Loan with an Interest Period of one (1) month (based on a LIBOR-based Rate determined two (2) Business Days prior to the first day of the next Interest Period) or, if outstanding as a Base Rate Loan, will remain as a Base Rate Loan.

 

(5)           Non Receipt of Funds by Administrative Agent.  Unless Administrative Agent shall have been notified by a Lender or Lead Borrower (in either case, and along with Borrower, the “Payor”) prior to the date on which the Payor is to make payment to Administrative Agent of (in the case of a Lender) the proceeds of a Loan to be made by such Lender hereunder or (in the case of Borrower) a payment to Administrative Agent for account of any Lender hereunder (in either case, such payment being herein called the “Required Payment”), which notice shall be effective upon receipt, that the Payor does not intend to make the Required Payment to Administrative Agent, Administrative Agent may assume that the Required Payment has been made and may, in reliance upon such assumption (but shall not be required to), make the amount thereof available to the intended recipient(s) on such date; and, if the Payor has not in fact made the Required Payment to Administrative Agent, the recipient(s) of such payment shall, on demand, repay to Administrative Agent the amount so made available together with interest thereon in respect of each day during the period commencing on the date (the “Advance Date”) such amount was so made available by Administrative Agent until the date Administrative Agent recovers such amount at a rate per annum equal to (a) the Federal Funds Rate for such day in the case of payments returned to Administrative Agent by any of the Lenders or (b) the applicable interest rate due hereunder with respect to payments returned by Borrower to Administrative Agent and, if such recipient(s) shall fail promptly to make such payment, Administrative Agent shall be entitled to recover such amount, on demand, from the Payor, together with interest as aforesaid; provided that if neither the recipient(s) nor the Payor shall return the Required Payment to Administrative Agent within three (3) Business Days of the Advance Date, then, retroactively to the Advance Date, the Payor and the recipient(s) shall each be obligated to pay interest on the Required Payment as follows:

 

  

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(a)           if the Required Payment shall represent a payment to be made by Borrower to the Lenders, Borrower and the recipient(s) shall each be obligated retroactively to the Advance Date to pay interest in respect of the Required Payment at the Default Rate (without duplication of the obligation of Borrower under Section 2.3 to pay interest on the Required Payment at the Default Rate), it being understood that the return by the recipient(s) of the Required Payment to Administrative Agent shall not limit such obligation of Borrower under Section 2.3 to pay interest at the Default Rate in respect of the Required Payment, and

 

(b)           if the Required Payment shall represent proceeds of a Loan to be made by the Lenders to Borrower, the Payor and Borrower shall each be obligated retroactively to the Advance Date to pay interest in respect of the Required Payment pursuant to whichever of the rates specified in Section 2.3 is applicable to the Type of such Loan, it being understood that the return by Borrower of the Required Payment to Administrative Agent shall not limit any claim Borrower may have against the Payor in respect of such Required Payment.

 

(6)           Sharing of Payments, Etc.

 

(a)           Sharing.  If any Lender shall obtain from Borrower payment of any principal of or interest on any Loan owing to it or payment of any other amount under this Agreement or any other Loan Document through the exercise (subject, as among the Lenders, to Section 12.25) of any right of set off, banker’s lien or counterclaim or similar right or otherwise (other than from Administrative Agent as provided herein), and, as a result of such payment, such Lender shall have received a greater percentage of the principal of or interest on the Loans or such other amounts then due hereunder or thereunder by Borrower to such Lender than the percentage received by any other Lender, it shall promptly purchase from such other Lenders participations in (or, if and to the extent specified by such Lender, direct interests in) the Loans or such other amounts, respectively, owing to such other Lenders (or in interest due thereon, as the case may be) in such amounts, and make such other adjustments from time to time as shall be equitable, to the end that all the Lenders shall share the benefit of such excess payment (net of any expenses that may be incurred by such Lender in obtaining or preserving such excess payment) pro rata in accordance with the unpaid principal of and/or interest on the Loans or such other amounts, respectively, owing to each of the Lenders.  To such end all the Lenders shall make appropriate adjustments among themselves (by the resale of participations sold or otherwise) if such payment is rescinded or must otherwise be restored.

 

(b)           Consent by Borrower.  Borrower agrees that any Lender so purchasing such a participation (or direct interest) may exercise (subject, as among the Lenders, to Section 12.25) all rights of set off, banker’s lien, counterclaim or similar rights with respect to such participation as fully as if such Lender were a direct holder of Loans or other amounts (as the case may be) owing to such Lender in the amount of such participation.

 

  

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(c)           Rights of Lenders; Bankruptcy.  Nothing contained herein shall require any Lender to exercise any such right or shall affect the right of any Lender to exercise, and retain the benefits of exercising, any such right with respect to any other indebtedness or obligation of Borrower.  If, under any applicable bankruptcy, insolvency or other similar law, any Lender receives a secured claim in lieu of a set off to which this Section 2.6(6) applies, such Lender shall, to the extent practicable, exercise its rights in respect of such secured claim in a manner consistent with the rights of the Lenders entitled under this Section 2.6(6) to share in the benefits of any recovery on such secured claim.

 

Section 2.7Yield Protection; Etc.

 

(1)           Increased Costs.

 

(a)           Increased Costs Generally with Respect to Making or Maintaining LIBOR-based Loans.  If any Change in Law shall:

 

(A)           impose, modify or deem applicable any reserve, special deposit, compulsory loan, insurance charge or similar requirement against assets of, deposits with or for the account of, or credit extended or participated in by, any Lender (except any reserve requirement reflected in the Adjusted Libor Rate);

 

(B)           subject any Lender to any tax of any kind whatsoever with respect to this Agreement or any LIBOR-based Loan made by it, or change the basis of taxation of payments to such Lender in respect thereof (except for Indemnified Taxes or Other Taxes covered by Section 2.7(6) and the imposition of, or any change in the rate of, any Excluded Tax payable by such Lender); or

 

(C)           impose on any Lender or the London interbank market any other condition affecting this Agreement or Eurodollar Loans made by such Lender.

 

and the result of any of the foregoing shall be to increase the cost to such Lenders of making or maintaining any LIBOR-based Loan (or of maintaining its obligation to make any such Loan) or to reduce the amount of any sum received or receivable by such Lender hereunder (whether of principal, interest or otherwise), then Borrower will promptly upon demand pay to such Lender such additional amount or amounts as will compensate such Lender for such additional costs incurred or reduction suffered.

 

(b)           Capital Requirements.  If any Lender reasonably determines that any Change in Law regarding capital requirements has or would have the effect of reducing the rate of return on such Lender’s capital or on the capital of such Lender’s holding company, if any, as a consequence of this Agreement or the Loans made by such Lender to a level below that which such Lender or such Lender’s holding company could have achieved but for such Change in Law (taking into consideration such Lender’s policies and the policies of such Lender’s holding company with respect to capital adequacy), then from time to time Borrower will promptly upon demand pay to such Lender, as the case may be, such additional amount or amounts as will compensate such Lender or such Lender’s holding company for any such reduction suffered; provided that such Lender would cause similarly situated Borrowers to compensate them for such an event.

 

  

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(c)           Certificates for Reimbursement.  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) or (b) of this Section 2.7(1) shall be delivered to Lead Borrower and shall be conclusive absent manifest error.  Borrower shall pay such Lender the amount shown as due on any such certificate within ten (10) days after receipt thereof by Lead Borrower.

 

(d)           Delays in Requests.  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 Borrower shall not be required to compensate a Lender pursuant to this Section for any increased costs or reductions incurred more than 270 days prior to the date that such Lender notifies Lead Borrower of the Change in Law giving rise to such increased costs or reductions and of such Lender’s intention to claim compensation therefor; provided further that, if the Change in Law giving rise to such increased costs or reductions is retroactive, then the 270-day period referred to above shall be extended to include the period of retroactive effect thereof.

 

(2)           Limitation on Types of Loans.  Anything herein to the contrary notwithstanding, if, on or prior to the determination of the Libor Rate for any Interest Period:

 

(a)           Administrative Agent reasonably determines that quotations of interest rates for the relevant deposits referred to in the definition of Libor Rate are not being provided in the relevant amounts or for the relevant maturities for purposes of determining rates of interest for LIBOR-based Loans; or

 

(b)           the Majority Lenders reasonably determine, and notify Administrative Agent that the relevant rates of interest referred to in the definition of Libor Rate are not likely adequate to cover the cost to such Lenders of making or maintaining LIBOR-based Loans for such Interest Period;

 

then Administrative Agent shall give Lead Borrower and each Lender prompt notice thereof and, so long as such condition remains in effect, the Lenders shall be under no obligation to make additional LIBOR-based Loans, to Continue LIBOR-based Loans or to Convert Loans of any other Type into LIBOR-based Loans, and Borrower shall, on the last day(s) of the then current Interest Period(s) for the outstanding LIBOR-based Loans, either prepay such Loans or such Loans shall be automatically Converted into Base Rate Loans.

 

(3)           Illegality.  Notwithstanding any other provision of this Agreement, in the event that it becomes unlawful for any Lender or its Applicable Lending Office to honor its obligation to make or maintain LIBOR-based Loans hereunder (and, in the sole opinion of such Lender, the designation of a different Applicable Lending Office would either not avoid such unlawfulness or would be disadvantageous to such Lender), then such Lender shall promptly notify Lead Borrower thereof (with a copy to Administrative Agent) and such Lender’s obligation to make or Continue, or to Convert Loans of any other Type into, LIBOR-based Loans shall be suspended until such time as such Lender may again make and maintain LIBOR-based Loans.

 

  

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(4)           Treatment of Affected Loans.  If the obligation of any Lender to make LIBOR-based Loans or to Continue, or to Convert Base Rate Loans into, LIBOR-based Loans shall be suspended pursuant to Section 2.7(1)or Section 2.7(3), such Lender’s Loans shall be automatically Converted into Base Rate Loans on the last day(s) of the then current Interest Period(s) for Loans (or, in the case of a Conversion resulting from a circumstance described in Section 2.7(3), on such earlier date as such Lender may specify to Lead Borrower with a copy to Administrative Agent) and, unless and until such Lender gives notice as provided below that the circumstances specified in Section 2.7(1) or Section 2.7(3) that gave rise to such Conversion no longer exist:

 

(a)           to the extent that such Lender’s Loans have been so Converted, all payments and prepayments of principal that would otherwise be applied to such Lender’s Loans shall be applied instead to its Base Rate Loans; and

 

(b)           all Loans that would otherwise be made or Continued by such Lender as LIBOR-based Loans shall be made or Continued instead as Base Rate Loans, and all Loans of such Lender that would otherwise be Converted into LIBOR-based Loans shall remain as Base Rate Loans.

 

If such Lender gives notice to Lead Borrower with a copy to Administrative Agent that the circumstances specified in Section 2.7(1) or Section 2.7(3) that gave rise to the Conversion of such Lender’s Loans pursuant to this Section 2.7(4) no longer exist (which such Lender agrees to do promptly upon such circumstances ceasing to exist) at a time when LIBOR-based Loans made by other Lenders are outstanding, such Lender’s Base Rate Loans shall be automatically Converted, on the first day(s) of the next succeeding Interest Period(s) for such outstanding LIBOR-based Loans, to the extent necessary so that, after giving effect thereto, all Base Rate Loans and LIBOR-based Loans are allocated among the Lenders ratably (as to principal amounts, Types and Interest Periods) in accordance with their respective Commitments.

 

(5)           LIBOR Breakage Costs.  Borrower shall upon request pay to Administrative Agent for account of each Lender, such amount or amounts as shall be sufficient (in the reasonable opinion of each Lender) to compensate it for any loss, cost or expense that such Lender determines is attributable to:

 

(a)           any payment, prepayment or Conversion of a LIBOR-based Loan made by such Lender for any reason (including, without limitation, the acceleration of the Loans pursuant to Administrative Agent’s or the Lenders’ rights referred to in Article 11) on a date other than the last day of the Interest Period for such Loan; or

 

(b)           any failure by Borrower for any reason to borrow a LIBOR-based Loan from such Lender on the date for such borrowing specified in any Request for Loan Advance.

 

  

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Without limiting the effect of the preceding sentence, such compensation shall include an amount equal to the excess, if any, of (i) the amount of interest that otherwise would have accrued on the principal amount so paid, prepaid, Converted or not borrowed for the period from the date of such payment, prepayment, Conversion or failure to borrow to the last day of the then current Interest Period for such Loan (or, in the case of a failure to borrow, the Interest Period for such Loan that would have commenced on the date specified for such borrowing) at the applicable rate of interest for such Loan provided for herein over (ii) the amount of interest that otherwise would have accrued on such principal amount at a rate per annum equal to the interest component of the amount such Lender would have bid in the London interbank market for Dollar deposits of leading banks in amounts comparable to such principal amount and with maturities comparable to such period (as reasonably determined by such Lender), or if such Lender shall cease to make such bids, the equivalent rate, as reasonably determined by such Lender, derived from Page 3750 of the Telerate Service or other publicly available source as described in the definition of Libor Rate.  A certificate of any Lender setting forth any amount or amounts that such Lender is entitled to receive pursuant to this section shall be delivered to Lead Borrower and shall be conclusive absent manifest error.  Borrower shall pay such Lender the amount shown as due on any such certificate within ten (10) days after receipt thereof.

 

(6)           Taxes.

 

(a)           Payments Free of Taxes.  Any and all payments by or on account of any obligation of Borrower hereunder or under any other Loan Document shall be made free and clear of and without deduction for any Indemnified Taxes or Other Taxes; provided that if Borrower shall be required to deduct any Indemnified Taxes or Other Taxes from such payments, then (i) the sum payable shall be increased as necessary so that after making all required deductions (including deductions applicable to additional sums payable under this Section), Administrative Agent or Lender (as the case may be) receives an amount equal to the sum it would have received had no such deductions been made, (ii) Borrower shall make such deductions and (iii) Borrower shall pay the full amount deducted to the relevant Governmental Authority in accordance with applicable law.

 

(b)           Payment of Other Taxes by Borrowers.  Without limiting the provisions of paragraph (a) above, Borrower shall pay any Other Taxes but not Excluded Taxes to the relevant Governmental Authority in accordance with applicable law.

 

(c)           Indemnification by Borrower.  Borrower shall indemnify Administrative Agent and each Lender, within ten (10) days after written demand therefor, for the full amount of any Indemnified Taxes or Other Taxes paid by Administrative Agent or such Lender, as the case may be, on or with respect to any payment by or on account of any obligation of Borrower hereunder (including Indemnified Taxes or Other Taxes imposed or asserted on or attributable to amounts payable under this Section) and any penalties, interest and reasonable expenses arising therefrom or with respect thereto, whether or not such Indemnified Taxes or Other 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 Lead Borrower by a Lender, or by Administrative Agent on its own behalf or on behalf of a Lender, shall be conclusive absent manifest error.

 

(d)           Evidence of Payments.  As soon as practicable after any payment of Indemnified Taxes or Other Taxes by Borrower to a Governmental Authority, Lead Borrower shall deliver to Administrative Agent 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 Administrative Agent.

 

  

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(e)           Foreign Lenders.  Any Foreign Lender that is entitled to an exemption from or reduction of withholding tax under the law of the jurisdiction in which a Borrower is located, or any treaty to which such jurisdiction is a party, with respect to payments under this Agreement shall deliver to the applicable Borrower (with a copy to Administrative Agent), prior to the Initial Advance, Form W-8BEN or Form W-8ECI of the Internal Revenue Service, or such other properly completed and executed forms, certifications, statements or documentation prescribed by applicable law or reasonably requested by such Borrower as will permit such payments to be made without withholding or at a reduced rate.  Administrative Agent shall not be obligated to make any payments hereunder to Lenders in respect of the Loan until such Lenders shall have furnished to Administrative Agent the requested form, certification, statement or documentation.

 

(f)           Refunds.  If Administrative Agent or a Lender determines, in its sole discretion, that it has received a refund of any Taxes or Other Taxes as to which it has been indemnified by Borrower or with respect to which Borrower has paid additional amounts pursuant to this Section 2.7(6), it shall pay over such refund to Borrower (but only to the extent of indemnity payments made, or additional amounts paid, by such Borrower under this Section 2.7(6) with respect to the Taxes or Other Taxes giving rise to such refund), net of all out-of-pocket expenses of Administrative Agent or such Lender, as the case may be, and without interest (other than any interest paid by the relevant Governmental Authority with respect to such refund); provided, that Borrower, upon the request of Administrative Agent or such Lender, agrees to repay the amount paid over to such Borrower (plus any penalties, interest or other charges imposed by the relevant Governmental Authority) to Administrative Agent or such Lender in the event Administrative Agent or such Lender is required to repay such refund to such Governmental Authority.  This section shall not be construed to require Administrative Agent or any Lender to make available its tax returns (or any other information relating to its taxes which it deems confidential) to Borrower or any other Person..

 

(7)           Replacement of Lenders.  If any Lender requests compensation pursuant to Section 2.7(1) or Section 2.7(6), or any Lender’s obligation to Continue Loans of any Type, or to Convert Loans of any Type into the other Type of Loan, shall be suspended pursuant to Section 2.7(2) or Section 2.7(3) (any such Lender requesting such compensation, or whose obligations are so suspended, being herein called a “Requesting Lender”), Lead Borrower, upon three (3) Business Days’ notice, may require that such Requesting Lender transfer all of its right, title and interest under this Agreement and such Requesting Lender’s Note to any bank or other financial institution (a “Proposed Lender”) identified by Lead Borrower that is satisfactory to Administrative Agent (i) if such Proposed Lender agrees to assume all of the obligations of such Requesting Lender hereunder, and to purchase all of such Requesting Lender’s Loans hereunder for consideration equal to the aggregate outstanding principal amount of such Requesting Lender’s Loans, together with accrued interest thereon to the date of such purchase and pay all other amounts accrued and payable hereunder to such Requesting Lender as of the date of such transfer (including any fees accrued hereunder and any amounts that would be payable under Section 2.7(1), Section 2.7(5) or Section 2.7(6).  Subject to the provisions of Section 12.23(1), such Proposed Lender shall be a “Lender” for all purposes hereunder.  Without prejudice to the survival of any other agreement of Borrower hereunder, the agreements of Borrower contained in Section 2.7(1) and Section 2.7(6) (without duplication of any payments made to such Requesting Lender by Borrower or the Proposed Lender) shall survive for the benefit of such Requesting Lender under this Section 2.7(7) with respect to the time prior to such replacement.

 

  

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Section 2.8Agency Fee.   Until payment in full of all obligations under this Agreement and the other Loan Documents, Borrower shall pay to Administrative Agent, for its sole account, the Agency Fee in accordance with the Fee Letter.

 

Section 2.9Exit Fee.     With respect to any repayment or prepayment of principal under the Loans for any reason whatsoever (whether such repayment or prepayment of the Loans is made voluntarily or involuntarily or as a result of the occurrence of an Event of Default pursuant to which the Administrative Agent has accelerated the obligations of the Borrower under the Loan Documents or otherwise), Borrower shall pay to Administrative Agent, in addition to all other amounts that may be due hereunder, an amount equal to one quarter of one percent (0.25%) of the amount so repaid or prepaid under the Loans (the “Exit Fee”).  The Exit Fee will be automatically waived in the event that (1) the Loans are prepaid in connection with a bona-fide arms length sale of the Project to a third party which is not an Affiliate of Borrower, or (2) the Loans are paid in full pursuant to a refinancing arrangement with Administrative Agent.

 

ARTICLE 3

 

INSURANCE, CONDEMNATION, AND IMPOUNDS

 

Section 3.1Insurance.

 

(1)           Borrower shall obtain and maintain, or cause to be maintained, Policies providing at least the following coverages for Borrower and the Project (at all times through the repayment of the Loans in full):

 

(a)           comprehensive all-risk insurance on the Improvements and the personal property, in each case (i) in an amount equal to 100% of the “Full Replacement Cost,” which for purposes of this Agreement shall mean actual replacement value (exclusive of costs of excavations, foundations, underground utilities and footings) with a waiver of depreciation, (ii) containing an agreed amount endorsement with respect to the improvements and personal property waiving all co insurance provisions; (iii) providing for no deductible in excess of $50,000; (iv) providing for repairs and alteration coverage; and (v) providing coverage for contingent liability from Operation of Building Laws, Demolition Costs and Increased Cost of Construction Endorsements together with an “Ordinance or Law Coverage” or “Enforcement” endorsement if any of the Improvements or the use of the Project shall at any time constitute legal non-conforming structures or uses.  The Full Replacement Cost shall be redetermined from time to time (but not more frequently than once in any twenty-four (24) calendar months) at the request of Administrative Agent by an appraiser or contractor designated by Borrower and reasonably approved by Administrative Agent, or by an engineer or appraiser in the regular employ of the insurer.  The cost of such appraisal shall be paid by Administrative Agent unless an Event of Default shall have occurred and be continuing, in which case such cost shall be paid by Borrower.  After the first appraisal, additional appraisals may be based on construction cost indices customarily employed in the trade.  No omission on the part of Administrative Agent to request any such ascertainment shall relieve Borrower of any of its obligations under this Section 3.1(1)(a);

 

  

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(b)           commercial general liability insurance against claims for personal injury, bodily injury, death or property damage (including liabilities as a result of repairs and alterations) occurring upon, in or about the Project, such insurance (i) to be on the so called “occurrence” form with a combined single limit of not less than $1,000,000 per occurrence and $2,000,000 general aggregate; (ii) to continue at not less than the aforesaid limit until required to be changed by Lender in writing by reason of changed economic conditions making such protection inadequate; and (iii) to cover at least the following hazards:  (A) premises and operations; (B) products and completed operations on an “if any” basis and for a period of not less than five (5) years after the completion of construction of the applicable Improvements; (C) independent contractors; (D) blanket contractual liability for all “insured contracts” as defined in the standard general liability policy; and (E) contractual liability covering the indemnities contained in Sections 5.4, 11.3 and 14.5 hereof, to the extent the same is available and falls within the definition of “insured contracts”;

 

(c)           business income/loss of rents insurance (i) with loss payable to Administrative Agent (for the benefit of the Lenders); (ii) covering all risks required to be covered by the insurance provided for in Section 3.1(1)(a) hereof; (iii) in an amount equal to 100% of the projected gross income from the Project (on an actual loss sustained basis) for a period continuing until the Restoration of the Project is completed; the amount of such business income/loss of rents insurance shall be determined prior to the date hereof and at least once each year thereafter based on the greater of (x) Borrower’s reasonable estimate of the gross income from the Project, and (y) the highest gross income received during the term of the Notes for any full calendar year prior to the date the amount of such insurance is being determined (or such lesser period as may have expired from the date of substantial completion of the applicable Improvements to the date the amount of such insurance is being determined), in each case for the succeeding eighteen (18) month period and (D) containing an extended period of indemnity endorsement which provides that after the physical loss to the improvements and the personal property has been repaired, the continued loss of income will be insured until such income either returns to the same level it was at prior to the loss, or the expiration of twenty-four (24) months from the date that the Project, is repaired or replaced and operations are resumed, whichever first occurs, and notwithstanding that the policy may expire prior to the end of such period.  All insurance proceeds payable to Administrative Agent (for the benefit of the Lenders) pursuant to this Section 3.1(1)(c) shall be held by Administrative Agent and shall be applied to the obligations secured hereunder from time to time due and payable hereunder and under the Notes and this Agreement; provided, however, that nothing herein contained shall be deemed to relieve Borrower of its obligations to pay the obligations secured hereunder on the respective dates of payment provided for in the Notes and this Agreement except to the extent such amounts are actually paid out of the proceeds of such business income/loss of rents insurance;

 

(d)           when required by Administrative Agent or at the discretion of Borrower, at all times prior to the completion of construction of the Improvements, the insurance provided for in Section 3.1(1)(a) shall be written in a so called builder’s risk completed value form (i) on a non reporting basis, (ii) against all risks insured against pursuant to Section 3.1(1)(a), (iii) shall include permission to occupy the Project, and (4) shall contain an agreed amount endorsement waiving co-insurance provisions, and shall also include coverage for:

 

  

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(A)           loss suffered with respect to materials, equipment, machinery, and supplies whether on-site, in transit, or stored off-site and with respect to temporary structures, hoists, sidewalks, retaining walls, and underground property;

 

(B)           Soft Costs, plans, specifications, blueprints and models in connection with any restoration following a casualty;

 

(C)           demolition and increased cost of construction, including, without limitation, increased costs arising out of changes in Applicable Law and codes;

 

(D)           operation of building laws;

 

(E)           collapse, transit and testing; and

 

(F)           delayed opening coverage on an actual loss sustained basis with extended period of indemnity endorsement consistent with Section 3.1(1)(c).

 

(e)           workers’ compensation insurance, as required by any Governmental Authority or legal requirement, subject to the statutory limits of the state of New York;

 

(f)           comprehensive boiler and machinery insurance, if applicable, in amounts as shall be reasonably required by Administrative Agent on terms consistent with the commercial property insurance policy required under Section 3.1(1)(a);

 

(g)           if any portion of the Improvements is at any time located in an area identified by the Secretary of Housing and Urban Development or any successor thereto as an area having special flood hazards pursuant to the National Flood Insurance Act of 1968, the Flood Disaster Protection Act of 1973 or the National Flood Insurance Reform Act of 1994, as each may be amended, or any successor law (the “Flood Insurance Acts”), flood hazard insurance in an amount not less than the greater of (A) the maximum limit of coverage available with respect to the Project, under Policies issued pursuant to the Flood Insurance Acts, subject only to customary deductibles under such Policies, and (B) the maximum limit of coverage available with respect to the Project, under Policies issued by private insurance carriers;

 

(h)           earthquake insurance (based on probable maximum loss) in amounts and in form and substance satisfactory to Administrative Agent, provided that the insurance pursuant to this Section 3.1(1)(h) hereof shall be on terms consistent with the all risk insurance policy required under Section 3.1(1)(a) hereof;

 

(i)           umbrella liability insurance in an amount not less than $100,000,000 per occurrence on terms consistent with the commercial general liability insurance policy required under Section 3.1(1)(b) hereof;

 

  

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(j)           insurance with respect to the Construction Manager, the Major Contractors, Borrower’s Architect and other Design Professionals as specified in Schedule 3.1(1)(j) attached hereto;

 

(k)           secured creditor’s environmental insurance, insuring against unknown environmental hazards and conditions in amounts and in form and substance satisfactory to Administrative Agent, which shall name the Administrative Agent as a loss payee or additional insured, as applicable; and

 

(l)           such other insurance and in such amounts as Administrative Agent from time to time may request against such other insurable hazards which at the time are available on commercially reasonably terms for properties located in or around the region where the Project is located and are customarily required by institutional lenders with respect to projects similar to the Project.

 

(2)           All insurance provided in compliance with Section 3.1(1)(a) hereof shall be obtained under valid and enforceable policies (the “Policies” or in the singular, the “Policy”), in such forms and, from time to time after the date hereof, in such amounts as may be satisfactory to Administrative Agent, issued by financially sound and responsible insurance companies permitted to do business in the state of New York and reasonably approved by Administrative Agent.  The insurance companies must have a claims paying ability/financial strength rating of “AX” (or its equivalent) or better by A.M. Best.  No Policy shall contain an exclusion from coverage under such Policy for loss or damage incurred as a result of an act of terrorism or similar acts of sabotage, provided that Borrower may obtain separate Terrorism Insurance coverage subject to and in accordance with the terms of this Section 3.1(2).  Borrower will be required to maintain insurance against terrorism, terrorist acts or similar acts of sabotage (“Terrorism Insurance”) with coverage amounts of not less than an amount equal to the full replacement cost of the improvements and the personal property (the “Terrorism Insurance Required Amount”).  Notwithstanding the foregoing sentence, Borrower shall not be obligated to expend in any fiscal year on Insurance Premiums for Terrorism Insurance more than two (2.0) times the then-current annual premium paid by Borrower for the comprehensive all-risk insurance required under subsection 3.1(1)(a) hereof (the “Terrorism Insurance Cap”) and if the cost of the Terrorism Insurance Required Amount exceeds the Terrorism Insurance Cap, Borrower shall purchase the maximum amount of Terrorism Insurance available with funds equal to the Terrorism Insurance Cap; provided, however, the Terrorism Insurance Cap shall not apply or restrict the amount of terrorism coverage required to be obtained and maintained by this subsection (x) with respect to the Project if (a) owners and/or operators of mixed-use retail/office buildings in the same class as the Project in Bronx, New York are generally obtaining terrorism insurance, (b) lenders financing such mixed-use retail/office properties in the same class as the Project in Bronx, New York are generally requiring terrorism insurance as a condition of financing, or (c) Borrower or Sponsor or any Affiliate of Borrower or Sponsor, is obtaining terrorism insurance on any other properties in Bronx, New York of which any of the foregoing Persons own or operate.  Not less than fifteen (15) days prior to the expiration dates of the Policies theretofore furnished to Lender pursuant to Section 3.1(1) hereof, Lead Borrower shall deliver to Administrative Agent insurance certificates showing payment of all premiums (the “Insurance Premiums”) for such Policies, which certificates shall be in form and substance reasonably satisfactory to Administrative Agent.  Within sixty (60) days following the expiration dates of the Policies, Lead Borrower shall deliver to Administrative Agent certified copies of such Policies marked “premium paid” or accompanied by evidence satisfactory to Administrative Agent of payment of the Insurance Premiums.

 

  

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(3)           Borrower shall not obtain (a) any umbrella or blanket liability or casualty Policy unless, in each case, such Policy is approved in advance in writing by Administrative Agent and Lenders’ interest is included therein as provided in this Agreement, or (b) separate insurance concurrent in form or contributing in the event of loss with that required in Section 3.1(1) to be furnished by, or which may be required to be furnished by, Borrower.  In the event Borrower obtains separate insurance or an umbrella or a blanket policy, Lead Borrower shall notify Administrative Agent of the same and shall cause certified copies of each Policy to be delivered as required in Section 3.1(1).

 

(4)           All Policies provided for or contemplated by Section 3.1(1) hereof, except for the Policy referenced in Section 3.1(1)(e), shall name Administrative Agent (for the benefit of the Lenders) as additional insured under liability policies and as mortgagee/loss payee under property policies, as their respective interests may appear, and in the case of property, boiler and machinery, and flood insurance, shall contain a so called New York standard non-contributing mortgagee clause in favor of Administrative Agent providing that the loss thereunder shall be payable to Administrative Agent in accordance with the terms of this Agreement.

 

(5)           All Policies provided for in Section 3.1(1)(a) hereof shall contain clauses or endorsements to the effect that:

 

(a)           no willful act or negligence of Borrower, or anyone acting for Borrower, or failure to comply with the provisions of any Policy which might otherwise result in a forfeiture of the insurance or any part thereof, shall in any way affect the validity or enforceability of the insurance insofar as Administrative Agent is concerned;

 

(b)           the Policy shall not be materially changed (other than to increase the coverage provided thereby) or cancelled without at least thirty (30) days’ written notice (or ten (10) days’ written notice, in the case of non payment of premium) to Administrative Agent and any other party named therein as an insured;

 

(c)           each Policy shall provide that the issuers thereof shall give written notice to Administrative Agent if the Policy has not been renewed fifteen (15) days prior to its expiration; and

 

(d)           Administrative Agent shall not be liable for any insurance premiums thereon or subject to any assessments thereunder.

 

(6)           If at any time Administrative Agent is not in receipt of written evidence that all insurance required hereunder is in full force and effect, Administrative Agent shall have the right, on five (5) Business Days’ notice to Lead Borrower to take such action as Administrative Agent deems necessary to protect its interest in the Project, including, without limitation, the obtaining of such insurance coverage as Administrative Agent in its sole and absolute discretion deems appropriate, and all expenses incurred by Administrative Agent in connection with such action or in obtaining such insurance and keeping it in effect shall be paid by Borrower to Administrative Agent upon demand and until paid shall be secured by the Security Documents and shall bear interest at the Default Rate.

 

  

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(7)           In the event of a foreclosure of the Mortgages, or other transfer of title to Project in extinguishment in whole or in part of the Loans, all right, title and interest of Borrower in and to the Policies then in force and all proceeds payable thereunder shall thereupon vest in the purchaser at such foreclosure or Lenders or other transferee in the event of such other transfer of title.

 

(8)           Lead Borrower shall give immediate written notice of any loss in excess of $100,000 to the insurance carrier and to Administrative Agent.  In connection with losses in excess of $100,000, but less than or equal to $2,000,000, Borrower and Administrative Agent shall cooperate in all matters related to the loss including, without limitation, making proof of loss, adjusting and compromising any claim under the insurance policies, appearing in and prosecuting any action arising from such insurance policies, and collecting and receiving insurance proceeds.  In connection with losses in excess of $2,000,000, Borrower hereby irrevocably authorizes and empowers Administrative Agent, as attorney in fact for Borrower coupled with an interest, to make proof of loss, to adjust and compromise any claim under insurance policies, to appear in and prosecute any action arising from such insurance policies, to collect and receive insurance proceeds, and to deduct therefrom Administrative Agent’s expenses incurred in the collection of such proceeds.  Nothing contained in this Section 3.1(8), however, shall require Administrative Agent or any Lender to incur any expense or take any action hereunder.

 

Section 3.2Condemnation Awards.  Lead Borrower shall immediately notify Administrative Agent of the institution of any proceeding for the condemnation or other taking of the Project or any portion thereof.  Administrative Agent may participate in any such proceeding and Lead Borrower will deliver to Administrative Agent all instruments necessary or required by Administrative Agent to permit such participation.  Without Administrative Agent’s prior consent (subject to the approval of the Majority Lenders), Borrower (1) shall not agree to any compensation or award, and (2) shall not take any action or fail to take any action which would cause the compensation to be determined.  All awards and compensation for the taking or purchase in lieu of condemnation of the Project or any part thereof are hereby assigned to and shall be paid to Administrative Agent.  Borrower authorizes Administrative Agent to collect and receive such awards and compensation, to give proper receipts and acquittances therefor, and in Administrative Agent’s sole discretion (which Administrative Agent shall exercise at the direction of the Majority Lenders) to apply the same toward the payment of the Loans, notwithstanding that the Loans may not then be due and payable, or to the restoration of the Project; provided, however, if the award is less than or equal to the Threshold Amount and Borrower requests that such proceeds be used for non structural site improvements (such as landscape, driveway, walkway and parking area repairs) required to be made as a result of such condemnation, Administrative Agent will apply the award to such restoration in accordance with the terms applicable to insurance proceeds set forth in Section 3.3.  Borrower, upon request by Administrative Agent, shall execute all instruments requested to confirm the assignment of the awards and compensation to Administrative Agent, free and clear of all liens, charges or encumbrances.

 

  

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Section 3.3Use and Application of Insurance Proceeds.  Administrative Agent shall apply insurance proceeds to costs of restoring the Project or the Loans as follows:

 

(1)           if the loss is less than or equal to the Threshold Amount, Administrative Agent shall promptly apply the insurance proceeds to restoration provided (a) no Event of Default exists, and (b) Borrower promptly commences and is diligently pursuing restoration of the Project;

 

(2)           if the loss exceeds the Threshold Amount but is not more than ten percent (10%) of the replacement value of the Improvements (for projects containing multiple phases or stand alone structures, such calculation to be based on the damaged phase or structure, not the project as a whole), Administrative Agent shall apply the insurance proceeds to restoration provided that at all times during such restoration (a) no Event of Default exists; (b) Administrative Agent determines that there are sufficient funds including Borrower’s equity available to restore and repair the Project to a condition reasonably approved by Administrative Agent; (c) Administrative Agent reasonably determines that any operating deficits, including all debt service, which will be incurred with respect to the Project following any such loss and until the restoration has been completed, will be covered out of (A) the insurance proceeds, (B) the proceeds of business interruption insurance, if applicable, (C) Net Operating Income of the Project or (D) by other funds of Borrower; (d) Administrative Agent reasonably determines that all Major Leases will remain in effect after restoration is complete; (e) Administrative Agent determines that restoration and repair of the Project to a condition reasonably approved by Administrative Agent will be completed prior to the Completion Date; (f) Borrower promptly commences and is diligently pursuing restoration of the Project; and (g) if still applicable, Administrative Agent shall have unilaterally determined that the Guaranty of Completion shall remain in full force and effect during the period of restoration, or Guarantor shall have executed and delivered to Administrative Agent a guaranty of completion with respect to all restoration in substantially the same form as the Guaranty of Completion and otherwise reasonably satisfactory to Administrative Agent;

 

(3)           if the conditions set forth above are not satisfied or the loss exceeds the maximum amount specified in Section 3.3(2) above, Administrative Agent may in its sole discretion (subject to the approval of the Majority Lenders) apply any insurance proceeds it may receive to the payment of the Loans or allow all or a portion of such proceeds to be used for the restoration of the Project.

 

Section 3.4Disbursement of Proceeds.

 

(1)           The insurance proceeds shall be held by Administrative Agent in a Controlled Account and shall constitute additional security for the Loans.  Upon receipt of evidence reasonably satisfactory to Administrative Agent that all the conditions precedent, including those set forth in Section 3.3(2) above, have been satisfied, the insurance proceeds shall be disbursed by Administrative Agent to, or as directed by, Lead Borrower from time to time during the course of the restoration in accordance with the applicable provisions of Article 4 and Schedule 4 of this Agreement and (to the extent such disbursements are related to construction costs) the Building Loan Agreement.

 

  

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(2)           All plans and specifications required in connection with the restoration shall be subject to prior review and reasonable approval by Administrative Agent and by an independent consulting engineer selected by Administrative Agent (the “Restoration Consultant”); provided, however, that if the plans and specifications are consistent with those attached to the Building Loan Agreement, Administrative Agent shall be deemed to have approved such plans and specifications.  Administrative Agent shall have the non-exclusive use of the plans and specifications and all permits, licenses and approvals required or obtained in connection with the restoration.  The identity of the contractors, subcontractors and materialmen engaged in the restoration, as well as all Major Contracts, shall be subject to prior review and reasonable approval by Administrative Agent and the Restoration Consultant.  All reasonable costs and expenses incurred by Administrative Agent in connection with making the insurance proceeds available for the restoration including reasonable counsel fees and disbursements and the Restoration Consultant’s fees, shall be paid by Borrower.  Borrower shall also obtain, at its sole cost and expense, all necessary government approvals as and when required in connection with such restoration and provide copies thereof to Administrative Agent and Restoration Consultant.

 

(3)           In no event shall Administrative Agent be obligated to make disbursements of the insurance 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 certified by the Restoration Consultant, minus the Retainage.  Administrative Agent shall establish, maintain and release any Retainage in accordance with the terms of the Building Loan Agreement.

 

(4)           Administrative Agent shall not be obligated to make disbursements of the insurance proceeds more frequently than once per month.

 

(5)           If at any time the insurance proceeds or the undisbursed balance thereof shall not, in the reasonable opinion of Administrative Agent in consultation with the Restoration Consultant, be sufficient to pay in full the balance of the costs which are estimated by the Restoration Consultant to be incurred in connection with the completion of the restoration, Borrower shall deposit the deficiency (the “Insurance Proceeds Deficiency”) with, or deliver a Collateral Letter of Credit in the amount of such deficiency to, Administrative Agent within ten (10) Business Days of Administrative Agent’s request and before any further disbursement of the insurance proceeds shall be made.  The Insurance Proceeds Deficiency shall be held in a Controlled Account and shall be disbursed for costs actually incurred in connection with the restoration on the same conditions applicable to the disbursement of the insurance proceeds, and, until so disbursed, shall constitute additional security for the Loans.

 

(6)           After the Restoration Consultant certifies to Administrative Agent that a restoration has been substantially completed in accordance with the provisions of this Section 3.4, and the receipt by Administrative Agent of evidence satisfactory to Administrative Agent that all costs incurred in connection with the restoration have been paid in full, the excess, if any, of the insurance proceeds and the remaining balance, if any, of the Insurance Proceeds Deficiency deposited with Administrative Agent shall, so long as no Potential Default or Event of Default has occurred, be paid to Lead Borrower.  If a Potential Default or Event of Default has occurred, the remaining balance of the Insurance Proceeds Deficiency shall be applied to repayment of the Loans.

 

  

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(7)           All insurance proceeds not required (i) to be made available for the restoration or (ii) to be returned to Lead Borrower as excess insurance proceeds pursuant to subsection (6) above may (A) be retained and applied by Administrative Agent toward the payment of the Loans, whether or not then due and payable, in such order, priority and proportions as Administrative Agent in its sole discretion shall deem proper, or, (B) at the sole discretion of Administrative Agent, the same may be paid, either in whole or in part, to Lead Borrower for such purposes and upon such conditions as Administrative Agent shall designate.

 

(8)           Notwithstanding any casualty, Borrower shall continue to make payments with respect to the outstanding principal amount in the manner provided in the Notes, this Agreement and the other Loan Documents and the outstanding principal amount shall not be reduced unless and until (i) any insurance proceeds or condemnation award shall have been actually received by Administrative Agent, (ii) Administrative Agent shall have deducted its reasonable expenses of collecting such proceeds and (iii) Administrative Agent shall have applied any portion of the balance thereof to the repayment of the outstanding principal amount in accordance with Section 4.3.  The Lenders shall not be limited to the interest paid on any condemnation award but shall continue to be entitled to receive interest as provided in Article 2.

 

ARTICLE 4

 

DISBURSEMENTS OF THE LOANS

 

Section 4.1General Conditions.

 

(1)           Subject to (a) Borrower’s satisfaction of the applicable conditions precedent set forth in Schedule 4 and (b) Borrower’s compliance with the applicable provisions of this Article 4, the Lenders shall disburse the proceeds of the Acquisition Loan on the Closing Date and the proceeds of each other Loan within ten (10) Business Days after Administrative Agent’s receipt of all of the documents and items to be delivered or received pursuant to Schedule 4 and this Article 4; provided, however, that at no time shall the Lenders be obligated to:

 

(i)           advance to Lead Borrower more than the amount that Borrower has funded from its own monies or an existing loan or is then required to fund to the party seeking payment or, in the case of reimbursement, to the party seeking reimbursement (subject to Retainage, if applicable),

 

(ii)           make an advance if the Loans are not In Balance in accordance with Section 4.3,

 

(iii)           subject to possible reallocation in accordance with Section 4.5, advance proceeds of a Loan in an amount in excess of the Budget Line Items set forth in the Budget, as the same may be adjusted in accordance with the terms of this Agreement, or

 

(iv)           make any Loans to the extent any Operating Revenues have not been applied in accordance with Section 4.6(1).

 

  

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(2)           Notwithstanding anything to the contrary contained in this Agreement, the Lenders shall have no obligation to advance any Loan unless Administrative Agent is, at all times, satisfied that the Improvements can be constructed Lien free, substantially in accordance with the Plans and Specifications (or the Tenant Improvement Plans in the case of Tenant Improvement Work) for the sums set forth in the Budget (or, if more, Borrower has furnished the difference in cash or cash equivalents, subject to the provisions of Section 4.3, Section 4.4 and Section 4.5), by the Completion Date or, with respect to Tenant Improvement Work, such date as shall be required for the completion of the applicable Tenant Improvement Work under an Approved Lease.  Administrative Agent will endeavor to give notice to Lead Borrower of its intention not to authorize disbursement of any Loan proceeds based on the foregoing, but neither the Lenders nor Administrative Agent shall have any liability hereunder should Administrative Agent fail to do so, and no failure by Administrative Agent to give such notice shall affect Administrative Agent’s or any Lender’s rights under this subsection (2).  Notwithstanding anything herein to the contrary, if such applicable conditions precedent are not satisfied for the full required disbursement, then, to the extent that the amounts in any Request for Loan Advance are broken down such that Administrative Agent is satisfied that all of the above conditions are met with respect to a portion of any Loan advance, the Lenders shall advance such portion of the requested Loan advance.

 

Section 4.2Procedure for Making Disbursements of Loan Proceeds.

 

(1)           After the Closing Date, disbursements shall be made from time to time as construction progresses pursuant to a request for advance in the applicable form attached hereto as Exhibit F (each, a “Request for Loan Advance”), but no more frequently than once in each calendar month.

 

(2)           Each Request for Loan Advance with respect to Loans shall (a) be duly executed by an Authorized Officer on behalf of Lead Borrower, (b) be submitted to Administrative Agent and the Construction Consultant not less than ten (10) Business Days prior to the proposed disbursement date for such Loans, (c) specify the items to be paid or reimbursed with the proceeds of the requested Loans, (d) include the documentation required to be included therewith under Schedule 4 and (e) be in the minimum amounts required under Section 2.6(3).

 

(3)           All advances of the Loans shall be made for the payment of Project Costs in accordance with the Budget upon Borrower’s satisfaction of the applicable conditions set forth in this Article 4 and Schedule 4 – Parts A and B, as applicable.

 

(4)           In the event Lead Borrower does not request a disbursement within thirty (30) days after the previous disbursement of a Loan, Borrower shall nonetheless within such thirty (30) day period and during each subsequent thirty (30) day period in which Lead Borrower does not request a disbursement of the Loan, satisfy the conditions precedent to disbursements set forth in this Agreement.

 

Section 4.3Loan Balancing.  

 

(1)           Borrower represents that the Budget sets forth all anticipated costs to be incurred by Borrower in connection with the ownership, development, construction, financing, marketing, maintenance and leasing of the Improvements, from time to time through the Maturity Date as extended pursuant to Section 2.5 hereof.  Borrower further agrees as follows:

 

  

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(a)           Subject to reallocations pursuant to Section 4.4 and Section 4.5, if at any time, the projected costs anticipated to be incurred for any item of Construction Work or for the ownership, development, financing, marketing, maintenance or leasing of the Improvements through the Maturity Date exceed the amount set forth in the Budget for such item (as the same may be adjusted in accordance with the terms of this Agreement), as determined by Administrative Agent and the Construction Consultant in their reasonable discretion (including any such determination that the undisbursed Loan proceeds allocated for the payment of future interest (the “Interest Reserve”) is insufficient) based on factors, including, but not limited to, (1) Administrative Agent’s projections of interest rates for period(s) up to and including the full remaining term of the Loan (and permitted extensions); (2) the effect of any Hedge Agreement; (3) cost overruns or Change Orders; or (4) failure of the Improvements to lease at the rate of absorption or otherwise at rates and terms projected by Borrower, then the Loans shall be deemed not “In Balance.”

 

(b)           If the Loans are deemed not “In Balance,” then Borrower shall, at Administrative Agent’s option, within ten (10) Business Days after written notice from Administrative Agent either (a) deposit with Administrative Agent an amount sufficient to cover such deficiency (a “Deficiency Deposit”), which Deficiency Deposit shall be deposited with Administrative Agent in the Controlled Account (the “Deficiency Deposit Account”), (b) make one or more equity contributions to be used by Borrower to pay costs that will bring the Loans In Balance (an “Equity Balancing Contribution”), or (c) deliver a Collateral Letter of Credit in an amount such that the available proceeds thereunder would be sufficient to bring the Loans In Balance and upon which Administrative Agent shall be entitled to draw in compliance with the provisions set forth below in this Section 4.3.  Administrative Agent shall not be required to authorize any disbursement of any Loans before receiving (i) payment of any such Deficiency Deposit into the Deficiency Deposit Account and the prior application of such Deficiency Deposit to the payment of Project Costs so as to bring the Loans In Balance, (ii) verification that an Equity Balancing Contribution has been made and the proceeds thereof used for the payment of Project Costs on account of the Improvements, so as to bring the Loans In Balance or (iii) a Collateral Letter of Credit as set forth above.  Failure of Borrower to provide satisfactory verification of an Equity Balancing Contribution or deliver a Deficiency Letter of Credit as required above shall be deemed Borrower’s election to make a Deficiency Deposit.  The Deficiency Deposit shall be allocated to the Project Loan Budget and the Budget, as applicable, and shall be applied to the payment of Project Costs on account of the Improvements prior to any further disbursement of the Loans.

 

(c)           The balances of the applicable Contingency Fund from time to time shall not be considered for purposes of determining whether the Loans are In Balance.

 

(2)           If an Event of Default shall occur and be continuing, Administrative Agent (subject to the provisions of Section 14.3) may, at its option, in addition to exercising any other rights or remedies available under the Loan Documents, (A) apply any unexpended Deficiency Deposit to (or draw on any Collateral Letter of Credit to pay) the costs of completion of the Improvements and/or (B) apply any unexpended Deficiency Deposit to (or draw on any Collateral Letter of Credit for application of the sums drawn thereunder to) the immediate reduction of any amounts due under the Notes and the other Loan Documents.  With respect to any Collateral Letter of Credit that Borrower may furnish or cause to be furnished to Administrative Agent in accordance with the terms of this Section 4.3:

 

  

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(a)           Administrative Agent will be entitled, among other things, to make one or more draws pursuant to and in accordance with this Agreement or the Building Loan Agreement, as applicable, by presentment thereof to the issuing bank accompanied only by Administrative Agent’s clean sight-draft, it being intended that the issuing bank shall have no right to inquire as to Administrative Agent’s right to draw upon such Collateral Letter of Credit;

 

(b)           Administrative Agent shall be entitled, among other things, to draw upon each Collateral Letter of Credit pursuant to this Agreement or the Building Loan Agreement, as applicable, in whole, or in part from time to time, to the extent (without taking into account the Collateral Letter of Credit) the Loan is not In Balance, (i) in order to pay any costs not covered by Loan proceeds, Equity Balancing Contributions or Deficiency Deposits or (ii) upon any Event of Default; and

 

(c)           Administrative Agent shall have the right to draw upon any Collateral Letter of Credit within ten (10) Business Days prior to the expiration date of such Collateral Letter of Credit and each renewal and extension thereof unless, prior to such expiration date of such Collateral Letter of Credit and each renewal and extension thereof, Borrower shall have furnished a replacement, extension or renewal Collateral Letter of Credit, acceptable to Administrative Agent, it being the intent hereof that at no time shall the unexpired term of any Collateral Letter of Credit be less than ten (10) Business Days.  If Administrative Agent draws upon a Collateral Letter of Credit pursuant to the terms hereof, then Administrative Agent shall hold the proceeds thereof in a Controlled Account as a Deficiency Deposit.  Administrative Agent shall also be entitled to draw upon a Collateral Letter of Credit if the credit rating of the issuing bank no longer meets the standard required of a Collateral Letter of Credit and Borrower does not deliver to Administrative Agent a replacement letter of credit that otherwise conforms to the requirements for Deficiency Letters of Credit within ten (10) days following notice of the same from Administrative Agent, or if Administrative Agent reasonably believes that its rights to draw on such Collateral Letter of Credit are in imminent jeopardy of not being honored.

 

Section 4.4Budget Contingencies.  The Budget contains line items designated for contingency for Hard Costs and Soft Costs (collectively, the “Contingency Fund”) which represent amounts necessary to provide reasonable assurances to Administrative Agent and the Lenders that funds are available within the Budget if additional costs, expenses and/or delays are incurred or additional interest accrues on the Loans, or other unanticipated events or problems occur.  Upon request of Lead Borrower, Administrative Agent may, in its reasonable discretion, re-allocate a portion of the Contingency Fund to cover cost overruns, cost of change orders, additional interests and other anticipated costs based upon the percentage of completion of the Construction Work (e.g. (and as an example only) fifty percent (50%) of the Contingency Fund may be allocated when the project is fifty percent (50%) complete).  Any such re-allocation shall reduce, by the amount of such re-allocation, the amount of the Contingency Fund available to be allocated thereafter.  Subject to the foregoing, Borrower agrees that the decisions with respect to utilizing any portion of the Contingency Fund shall be made by Administrative Agent in its reasonable discretion and that the Loans may not be In Balance, and Borrower may be required to make a Deficiency Deposit or Equity Balancing Contribution, even if funds remain in the Contingency Fund.

 

  

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Section 4.5Budget Line Items.   The Budget includes as line items (collectively, “Budget Line Items”) the cost of all labor, materials, equipment, fixtures and furnishings needed for the completion of all Construction Work, and all other costs, fees and expenses relating in any way whatsoever to the Construction Work and the operation of the Project.  Borrower agrees that all Loans shall be used only for the Budget Line Items for which such Loans are made (as re-allocated from time to time in accordance with the terms of this Agreement).  Borrower agrees that, while an Event of Default exists, Administrative Agent may, at any time and from time to time without prior written notice to Lead Borrower or Borrower, authorize the disbursement of the Budget Line Items for the purposes for which they have been set aside, or for any other purposes related to the Construction Work or otherwise provided for in the Budget as Administrative Agent may determine, either by payment of such items or by reimbursement to Borrower for payments actually made by Borrower for such items.  Administrative Agent shall not be obligated to authorize the disbursement of any amount for any category of costs set forth as a Budget Line Item which is greater than the amount set forth for such category in the applicable Budget Line Item; provided, however, that subject to Administrative Agent’s prior reasonable consent, Borrower may apply savings from one Budget Line Item to cost overruns in another Budget Line Item or to the Contingency Fund, or to any other unbudgeted Project Cost provided (a) there are no Potential Defaults or Events of Defaults existing, (b) all costs to be paid out of the Budget Line Item from which funds are being re-allocated have been paid or sufficient sums remain in said line item to pay such costs when the same become due, (c) said savings are actual savings and are documented or otherwise established to the satisfaction of Administrative Agent and the Construction Consultant in their reasonable discretion, (d) such reallocation will not violate the provisions of the Lien Law or affect the priority of the Mortgages on the Project and (e) Administrative Agent, at Borrower’s sole cost and expense, obtains endorsements to the Title Policies insuring against “any statutory lien for services, labor or materials furnished or contracted for prior to the date hereof i.e., the date of such endorsement (or any statutory lien for services, labor or materials furnished after the date hereof, the priority of which lien relates back to services, labor or materials furnished or contracted for prior to the date hereof), and which has now gained or which may hereafter gain priority over the estate or interest of the insured as shown in Schedule A of this policy,” as a result of the reallocation of such Budget Line Item; provided, however, the Borrower shall not reallocate any portion of the Soft Costs Budget Line Items which have been allocated to the payment of real estate taxes and the interest reserve.

 

Section 4.6Interest; Fees; and Expenses.

 

(1)           Included in the Budget are projected amounts for (a) interest on the Loans, (b) the Agency Fee, (c) the fees and expenses of the Construction Consultant, Administrative Agent’s counsel and the Title Company and (d) the fees and expenses related to the recording of the Mortgages.  Subject to Borrower’s compliance with all of the conditions set forth in Schedule 4 and this Article 4, Lead Borrower may in any Request for Loan Advance request advances for the purpose of paying the aforesaid items due at such time, in which event Administrative Agent shall be authorized and is hereby directed to disburse the amount thereof to the Persons entitled to such payments.  Notwithstanding anything to the contrary contained in this Agreement or the other Loan Documents, Lead Borrower shall not have the right to request the advance of any Loans for any items covered by clauses (a) through (d) above to the extent Operating Revenues are available to pay such items.

 

  

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(2)           Borrower hereby authorizes Administrative Agent to disburse the proceeds of any Loan to pay (a) interest accrued on the Notes, (b) the Agency Fees, (c) the fees and expenses of the Construction Consultant, Administrative Agent’s counsel and the Title Company, (d) any expenses payable in accordance with Section 9.28, and (e) any Date Down Endorsements, notwithstanding that Lead Borrower may not have requested a disbursement of such amounts.

 

(3)           Subject to the provisions of Section 14.3, Administrative Agent in its sole and absolute discretion may (but shall not be obligated to do so) direct the Lenders to make such Loans for disbursements authorized under this Section 4.6 notwithstanding that the Loans are not In Balance or that a Potential Default or Event of Default exists under the terms of this Agreement or any other Loan Document.  Such disbursements shall constitute a Loan and be added to the principal balance of the Notes, and the Lenders shall make the applicable Loans to fund any such disbursements.  The authorization hereby granted is irrevocable, and no further direction, authorization or Request for Loan Advance from Lead Borrower is necessary for the Lenders to make such disbursements.  Nothing contained in this Section 4.6 shall require Administrative Agent to direct the Lenders to make Loans for payment of any of the items set forth in subsection (2) above if the other conditions set forth in this Agreement for Loans are not satisfied.

 

Section 4.7Reserved.

 

Section 4.8   Tenant Improvement Allowances.

 

(1)           Loans shall be made to Borrower in connection with Tenant Improvement Allowances as the same shall be payable pursuant to Approved Leases.

 

(2)           The first request for disbursement for any Tenant Improvement Allowance shall be accompanied by the following, all of which shall be subject to the reasonable approval of the Administrative Agent to the extent Borrower has any outstanding (i.e. unexpired) approval rights with respect thereto pursuant to the terms of the applicable Approved Lease (any such approval or disapproval to be made by the Administrative Agent within a reasonably sufficient time for Borrower to comply with any time limits set forth in the applicable Approved Lease for Borrower’s response):

 

(a)           documentation required to be delivered by the applicable tenant pursuant to its respective Approved Lease;

 

(b)           if not already delivered to the Administrative Agent, a fully executed lease (already approved by the Administrative Agent) covering such leased space; and

 

(c)           all matters set forth in subsection (3) below.

 

  

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(3)           The Administrative Agent’s obligation to make disbursements of any Loans for Tenant Improvement Allowances shall be subject to the further condition precedent that all of the following requirements shall have been completed to the reasonable satisfaction of the Administrative Agent to the extent Borrower has any outstanding (i.e. unexpired) approval rights with respect thereto pursuant to the terms of the applicable Approved Lease (any such approval or disapproval to be made by the Administrative Agent within a reasonably sufficient time for Borrower to comply with any time limits set forth in the applicable Approved Lease for Borrower’s response):

 

(a)           Borrower shall have promptly furnished to the Administrative Agent and the Construction Consultant all documents and other information relating to such Tenant Improvement Allowance which Borrower is entitled to receive pursuant to and in accordance with the applicable Approved Lease;

 

(b)           Loans shall be made for Tenant Improvement Allowances only to the extent the applicable tenant is then entitled to receive payments related to such Tenant Improvement Allowance pursuant to the terms of its applicable Approved Lease;

 

(c)           no mechanic’s liens shall have been filed against the Project in connection with the work being performed under the applicable Approved Lease; and

 

(d)           Borrower shall have complied with all the other applicable conditions precedent to a disbursement of a Loan contained in Section 2.1.

 

(4)           The obligation of the Lenders to make the final Loan to Borrower for a Tenant Improvement Allowance for any Approved Lease is subject to the further condition precedent that all of the following requirements shall have been completed to the reasonable satisfaction of the Administrative Agent (in the case of clause (b) below, to the extent Borrower has any approval rights with respect thereto pursuant to the terms of the applicable Approved Lease, any such approval or disapproval to be made by the Administrative Agent within a reasonably sufficient time (but in no event less than ten (10) Business Days) to enable Borrower to comply with applicable time limits set forth in the applicable Approved Lease for Borrower’s response):

 

(a)           The applicable work covered by a Tenant Improvement Allowance has been substantially completed, subject to Punch List Items, free of mechanics’ liens unless such liens shall be bonded or otherwise removed of record or the Title Company shall have provided affirmative coverage in accordance with Schedule 4 – Part A, paragraph 10;

 

(b)           Borrower shall have promptly furnished to the Administrative Agent and the Construction Consultant all documents and other information relating to the final advance of the applicable Tenant Improvement Allowance which Borrower is entitled to receive in accordance with the applicable Lease; and

 

(c)           All of the applicable conditions precedent to any Loan contained in Section 2.1 shall have been satisfied.

 

  

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Section 4.9Direct Loan Advances by Administrative Agent.   The Lenders shall, at the option of Administrative Agent, advance all or any part of any particular Loan either (1) to Lead Borrower for disbursement in accordance with a Request for Loan Advance, (2) while any Event of Default exists, directly to the Construction Manager, a Major Contractor, other contractor, subcontractor, material supplier or other party any costs payable to such party, (3) after an Event of Default, at Borrower’s expense, to the Title Company which shall pay said monies to the parties as so instructed by Administrative Agent or (4) as contemplated by Section 1.01(d) of the Completion Guaranty (whether the applicable work is being performed by Guarantor or Administrative Agent).  The execution of this Agreement by Borrower shall, and hereby does, constitute an irrevocable authorization to the Lenders to make such direct advances provided for in clauses (2), (3) and (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 Documents as fully as if made directly to Borrower, regardless of the disposition thereof by any party so paid.  After an Event of Default, at Administrative Agent’s request, any advance of Loan proceeds made by and through the Title Company may be made pursuant to a construction escrow agreement reasonably approved by Administrative Agent.  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.

 

Section 4.10No Waiver or Approval by Reason of Loan Advances.   The making of any Loans by the Lenders shall not be deemed an acceptance or approval by Administrative Agent or the Lenders (for the benefit of Borrower or any third party) of the Construction Work or other work theretofore done or constructed or to the Lenders’ obligations to make further Loans, nor, in the event Borrower is unable to satisfy any condition, shall any such failure to insist upon strict compliance have the effect of precluding Administrative Agent or the Lenders from thereafter declaring such inability to be an Event of Default as herein provided.  Administrative Agent’s and/or the Lenders’ waiver of, or failure to enforce, any conditions to or requirements associated with any Loans in any one or more circumstances shall not constitute or imply a waiver of such conditions or requirements in any other circumstances.

 

Section 4.11Authorization to Make Loan Advances to Cure Borrower’s Defaults.  If an Event of Default shall occur, Administrative Agent (subject to the provisions of Section 14.3) may (but shall not be required to) perform any of such covenants and agreements with respect to which Borrower is in Event of Default.  Any amounts expended by Administrative Agent in so doing and any amounts expended by Administrative Agent in connection therewith shall constitute a Loan and be added to the outstanding principal balance of the Loans, and the Lenders shall make the applicable Loans to fund any such disbursements.  The authorization hereby granted is irrevocable, and no prior notice to or further direction or authorization from Borrower is necessary for Administrative Agent to make such disbursements.

 

Section 4.12Designation of Lead Borrower as Agent for Borrower.

 

(1)           Each Borrower hereby irrevocably designates and appoints the Lead Borrower as that Borrower’s agent to obtain loans and advances under the Loan, the proceeds of which shall be available to each Borrower as set forth herein.  As the disclosed principal for its agent, each Borrower shall be obligated to the Agent and the Lenders on account of loans and advances so made under the Loan as if made directly by the Lenders to that Borrower, notwithstanding the manner by which such loans and advances are recorded on the books and records of the Lead Borrower and/or of any Borrower (including, without limitation, on account of any such treatment of said loan or advance as an equity investment in a Borrower by Lead Borrower).

 

  

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(2)           Each Borrower recognizes that credit available to it under the Loan is in excess of and on better terms than it otherwise could obtain on and for its own account and that one of the reasons therefor is its joining in the credit facility contemplated herein with all other Borrowers.  Consequently, each Borrower, jointly and severally, hereby assumes and agrees fully, faithfully, and punctually to discharge all obligations of all of the Borrowers under the Loan Documents.

 

(3)           The Lead Borrower shall act as a conduit for each Borrower (including itself, as a “Borrower”) on whose behalf the Lead Borrower has requested a loan or other advance under the Loan.

 

(4)           The proceeds of each loan and advance provided under the Loan which is requested by the Lead Borrower shall be deposited into an account in the name of the Lead Borrower or as otherwise indicated by the Lead Borrower.  The Lead Borrower shall cause the transfer of the proceeds thereof to the Borrower(s) on whose behalf such loan and advance was obtained.  Neither the Agent nor any Lender shall have any obligation to see to the application of such proceeds.

 

(5)           Each Borrower hereby irrevocably designates and appoints the Lead Borrower as that Borrower’s attorney-in-fact to act in the Borrower’s name and stead and to do and perform all matters, to grant to the Agent for the benefit of the Lenders a security interest in the Collateral, transact all business, and make, execute and acknowledge all Loan Documents and other instruments relating to this Agreement including but not limited to, this Agreement, the Note, and the Security Documents.  The Borrowers hereby acknowledge and agree that the power of attorney created hereby is coupled with an interest.

 

Section 4.13Administrative Agent’s Right to Make Loan Advances in Compliance with the Guaranty of Completion.  Any Loan proceeds disbursed by Administrative Agent as contemplated by Section 1.01(b) of the Guaranty of Completion (whether the applicable work is being performed by Guarantor or Administrative Agent) shall constitute a Loan and be added to the outstanding principal balance of the Loans, and the Lenders shall make the applicable Loans to fund any such disbursements.  The authorization hereby granted is irrevocable and no prior notice to or further direction or authorization from Borrower is necessary for Administrative Agent to make such disbursements.

 

Section 4.14No Third-Party Benefit.  This Agreement is solely for the benefit of the Lenders, Administrative Agent, Lead Borrower and Borrower.  All conditions of the obligations of the Lenders to make advances hereunder are imposed solely and exclusively for the benefit of the Lenders and may be freely waived or modified in whole or in part by the Lenders at any time if in their sole discretion they deem it advisable to do so, and no Person other than Lead Borrower or Borrower (provided, however, that all conditions have been satisfied) shall have standing to require the Lenders to make any Loan advances or shall be a beneficiary of this Agreement or any advances to be made hereunder.

 

  

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ARTICLE 5

 

ENVIRONMENTAL MATTERS

 

Section 5.1Certain Definitions.  As used herein, the following terms have the meanings indicated:

 

(1)           “Environmental Claim” means, with respect to any Person, any written request for information by a governmental authority, or any written notice, notification, claim, administrative, regulatory or judicial action, suit, judgment, demand or other written communication by any Person or governmental authority alleging or asserting liability with respect to Borrower or the Project, whether for damages, contribution, indemnification, cost recovery, compensation, injunctive relief, investigatory, response, remediation, damages to natural resources, personal injuries, fines or penalties arising out of, based on or resulting from (i) the presence, use or release into the environment of any Hazardous Materials originating at or from, or otherwise affecting, the Project, (ii) any fact, circumstance, condition or occurrence forming the basis of any violation, or alleged violation, of any Environmental Law by Borrower or otherwise affecting the health, safety or environmental condition of the Project or (iii) any alleged injury or threat of injury to the environment by Borrower or otherwise affecting the Project.

 

(2)           “Environmental Laws” means any federal, state or local law (whether imposed by statute, or administrative or judicial order, or common law), now or hereafter enacted and applicable to the Project, governing health, safety, industrial hygiene, the environment or natural resources, or Hazardous Materials, including, such laws governing or regulating the use, generation, storage, removal, recovery, treatment, handling, transport, disposal, control, discharge of, or exposure to, Hazardous Materials.

 

(3)           “Environmental Liens” has the meaning assigned to such term in Section 5.3(4).

 

(4)           “Environmental Losses” means any losses, damages, costs, fees, expenses, claims, suits, judgments, awards, liabilities (including, but not limited to, 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 and expenses, engineers’ fees, environmental consultants’ fees, and investigation costs (including, but not limited to, 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 relating to Hazardous Materials, Environmental Claims, Environmental Liens and violation of Environmental Laws.

 

  

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(5)           “Hazardous Materials” means (a) petroleum or chemical products, whether in liquid, solid, or gaseous form, or any fraction or by product thereof, (b) asbestos or asbestos containing materials, (c) polychlorinated biphenyls (PCBs), (d) radon gas, (e) underground storage tanks, (f) any explosive or radioactive substances, (g) lead or lead-based paint, (h) Mold, or (i) any other substance, material, waste or mixture which is or shall be listed, defined, or otherwise determined by any governmental authority to be hazardous, toxic, dangerous or otherwise regulated, controlled or giving rise to liability under any Environmental Laws.

 

(6)           “Mold” means any microbial or fungus contamination or infestation in any Project of a type that could reasonably be anticipated (after due inquiry and investigation) to pose a risk to human health or the environment or could reasonably be anticipated (after due inquiry and investigation) to negatively impact the value of the affected Property in any material respect.

 

Section 5.2Representations and Warranties on Environmental Matters.  Borrower represents and warrants to Administrative Agent and the Lenders that, to Borrower’s knowledge, except as set forth in the Site Assessment, (1) no Hazardous Material is now or was formerly used, stored, generated, manufactured, installed, treated, discharged, disposed of or otherwise present at or about the Project or any property adjacent to the Project (except for cleaning and other products currently used in connection with the routine maintenance or repair of the Project and de minimus quantities used by tenants in the normal course of business in full compliance with Environmental Laws), (2) all permits, licenses, approvals and filings required by Environmental Laws have been obtained, and the use, operation and condition of the Project do not, and did not previously, violate any Environmental Laws, (3) no civil, criminal or administrative action, suit, claim, hearing, investigation or proceeding has been brought or been threatened, nor have any settlements been reached by or with any parties or any Liens imposed in connection with the Project concerning Hazardous Materials or Environmental Laws and (4) no underground storage tanks exist at the Project.

 

Section 5.3Covenants on Environmental Matters.

 

(1)           Borrower shall (a) comply strictly and in all respects with applicable Environmental Laws; (b) notify Administrative Agent immediately upon Borrower’s discovery of any spill, discharge, release or presence of any Hazardous Material at, upon, under, within, contiguous to or otherwise affecting the Project; (c) promptly remove such Hazardous Materials and remediate the Project in full compliance with Environmental Laws and as reasonably recommended to preserve the value and/or use of the Project, in accordance with the reasonable recommendations and specifications of an independent environmental consultant approved by Administrative Agent; and (d) promptly forward to Administrative Agent copies of all orders, notices, permits, applications or other communications and reports in connection with any spill, discharge, release or the presence of any Hazardous Material or any other matters relating to the Environmental Laws or any similar laws or regulations, as they may affect the Project or Borrower.

 

  

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(2)           Borrower shall not cause, shall prohibit any other Person within the control of Borrower from causing, and shall use prudent, commercially reasonable efforts to prohibit other Persons (including tenants) from causing (a) any spill, discharge or release, or the use, storage, generation, manufacture, installation, or disposal, of any Hazardous Materials at, upon, under, within or about the Project or the transportation of any Hazardous Materials to or from the Project (except for cleaning and other products used in connection with the routine maintenance or repair of the Project in full compliance with Environmental Laws), (b) any underground storage tanks to be installed at the Project, or (c) any activity that requires a permit or other authorization under Environmental Laws to be conducted at the Project.

 

(3)           Lead Borrower shall provide to Administrative Agent, at Borrower’s expense promptly upon the written request of Administrative Agent from time to time, a Site Assessment or, if required by Administrative Agent, an update to any existing Site Assessment, to assess the presence or absence of any Hazardous Materials and the potential costs in connection with abatement, cleanup or removal of any Hazardous Materials found on, under, at or within the Project.  Borrower shall pay the cost of no more than one such Site Assessment or update in any twelve (12) month period, unless Administrative Agent’s request for a Site Assessment is based on a reasonable suspicion of Hazardous Materials at or near the Project, a breach of representations under Section 5.2, or an Event of Default, in which case any such Site Assessment or update shall be at Borrower’s expense.

 

(4)           Environmental Notices.  Lead Borrower shall promptly provide notice to Administrative Agent of:

 

(a)           all Environmental Claims asserted or threatened against Borrower or any other party occupying the Project or any portion thereof or against the Project which become known to Borrower;

 

(b)           the discovery by Borrower of any occurrence or condition on the Project or on any real property adjoining or in the vicinity of the Project which could reasonably be expected to lead to an Environmental Claim against Borrower, Administrative Agent or any of the Lenders;

 

(c)           the commencement or completion of any environmental remediation at the Project; and

 

(d)           any Lien or other encumbrance imposed pursuant to any Environmental Law (“Environmental Liens”).

 

In connection therewith, Lead Borrower shall transmit to Administrative Agent copies of any citations, orders, notices or other written communications received from any Person and any notices, reports or other written communications submitted to any governmental authority with respect to the matters described above.

 

  

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Section 5.4Allocation of Risks and Indemnity.  As between Borrower, Administrative Agent and the Lenders, all risk of loss associated with non-compliance with Environmental Laws, or with the presence of any Hazardous Material at, upon, within, contiguous to or otherwise affecting the Project, shall lie solely with Borrower.  Accordingly, Borrower shall bear all risks and costs associated with any Environmental Loss, damage or liability therefrom, including all costs of removal of Hazardous Materials or other remediation required hereunder or by law.  Borrower shall indemnify, defend and hold Administrative Agent and the Lenders harmless from and against all loss, liabilities, damages, claims, costs and expenses (including reasonable costs of defense) arising out of or associated, in any way, with the non-compliance with Environmental Laws, or the existence of Hazardous Materials in, on, or about the Project, or a breach of any representation, warranty or covenant contained in this Article 5, whether based in contract, tort, implied or express warranty, strict liability, criminal or civil statute or common law, including those arising from the joint, concurrent, or comparative negligence of Administrative Agent and the Lenders; provided, however, Borrower shall not be liable under such indemnification to the extent such loss, liability, damage, claim, cost or expense results solely from Administrative Agent’s or any Lender’s gross negligence or willful misconduct.  Borrower’s obligations under this Section 5.4 shall arise upon the discovery of the presence of any Hazardous Material, whether or not any governmental authority has taken or threatened any action in connection with the presence of any Hazardous Material, and whether or not the existence of any such Hazardous Material or potential liability on account thereof is disclosed in the Site Assessment and shall continue notwithstanding the repayment of the Loans or any transfer or sale of any right, title and interest in the Project (by foreclosure, deed in lieu of foreclosure or otherwise).

 

Section 5.5No Waiver.  Notwithstanding any provision in this Article 5 or elsewhere in the Loan Documents, or any rights or remedies granted by the Loan Documents, Administrative Agent and the Lenders do not waive and expressly reserve all rights and benefits now or hereafter accruing to Administrative Agent and/or any Lenders under the “security interest” or “secured creditor” exception under applicable Environmental Laws, as the same may be amended.  No action taken by Administrative Agent and/or any Lender pursuant to the Loan Documents shall be deemed or construed to be a waiver or relinquishment of any such rights or benefits under the “security interest exception.”

 

ARTICLE 6

 

LEASING MATTERS

 

Section 6.1Representations and Warranties on Leases.  Borrower represents and warrants to Administrative Agent and the Lenders with respect to leases of the Project that:  (1) to Borrower’s knowledge, the rent roll delivered to Administrative Agent is true and correct, and the leases are valid and in and full force and effect; (2) the leases (including amendments) are in writing, and there are no oral agreements with respect thereto; (3) the copies of the leases delivered to Administrative Agent are true and complete; (4) to Borrower’s knowledge, neither the landlord nor any tenant is in default under any of the leases; (5) Borrower has no knowledge of any notice of termination or default with respect to any lease; (6) Borrower has not assigned or pledged any of the leases, the rents or any interests therein except to Administrative Agent (on behalf of the Lenders); (7) no tenant or other party has an option to purchase all or any portion of the Project; (8) no tenant has the right to terminate its lease prior to expiration of the stated term of such lease except in the case of a casualty or condemnation of the Project to the extent permitted pursuant to the terms and conditions of such lease; and (9) no tenant has prepaid more than one month’s rent in advance (except for bona fide security deposits not in excess of an amount equal to two month’s rent).  To the extent that any part of the Land is located in the State of New York, reference is hereby made to Section 291-f of the Real Property Law of the State of New York for purposes of obtaining for Administrative Agent and the Lender the benefits of said Section in connection herewith.

 

  

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Section 6.2Standard Lease Form; Approval Rights.  All leases and other rental arrangements shall in all respects be approved by Administrative Agent and shall be on a standard lease form for the Office Component, approved by Administrative Agent with no material modifications (except as approved by Administrative Agent in writing).  Such lease form shall provide (a) that the lease is subordinate to the Mortgages, (b) that the tenant shall attorn to Administrative Agent (on behalf of the Lenders) following an Event of Default and (c) that any cancellation, surrender, or amendment of such lease without the prior written consent of Administrative Agent shall be voidable by Administrative Agent.  Borrower shall hold, in trust, all tenant security deposits in a segregated account, and, to the extent required by Applicable Law, shall not commingle any such funds with any other funds of Borrower.  Within ten (10) days after Administrative Agent’s request, Borrower shall furnish to Administrative Agent a statement of all tenant security deposits, and copies of all leases not previously delivered to Administrative Agent, certified by Borrower as being true and correct.  Notwithstanding anything contained in the Loan Documents, Administrative Agent’s approval shall not be required for future leases or lease extensions if the following conditions are satisfied:  (1) there exists no Potential Default or Event of Default; (2) the lease is on the standard lease form approved by Administrative Agent with no modifications except for commercially reasonable changes agreed to in the ordinary course of Borrower’s business, but in any event there shall be no modifications to the subordination, attornement, estoppel and landlord liability clause without the prior written consent of Administrative Agent; (3) the lease does not conflict with any restrictive covenant affecting the Project or any other lease for space in the Project; (4) the lease is not a Major Lease; (5) the lease shall provide for rental rates and landlord concessions comparable to existing local market rates as shall be established pursuant to the Leasing Guidelines; (6) the lease is with a third party not an Affiliate of Borrower, Sponsor or Guarantor; (7) the lease shall not contain any options for renewal or expansion by the tenant at rental rates which are below reasonable comparable market levels at the time the lease is executed; (8) the lease shall be to a tenant which Borrower, in its professional and commercially reasonable judgment, has determined is creditworthy and (9) the lease is for a term of not more than ten (10) years (exclusive of renewal options which, together with the initial lease term shall not exceed fifteen (15) years).

 

Section 6.3Covenants.  Borrower (1) shall perform the obligations which Borrower is required to perform under the leases, including the performance of any Tenant Improvement Work with respect thereto; (2) shall enforce the obligations to be performed by the tenants; (3) shall promptly furnish to Administrative Agent any notice of default or termination received by Borrower from any tenant, and any notice of default or termination given by Borrower to any tenant; (4) shall not collect any rents for more than thirty (30) days in advance of the time when the same shall become due, except for bona fide security deposits not in excess of an amount equal to two month’s rent; (5) shall not enter into any ground lease or master lease of any part of the Project; (6) shall not further assign or encumber any lease; (7) shall not, except with Administrative Agent’s prior written consent, cancel or accept surrender or termination of any Major Lease; (8) shall not, except with Administrative Agent’s prior written consent, modify or amend any Major Lease (except for minor modifications and amendments entered into in the ordinary course of business, consistent with prudent property management practices, not affecting the economic terms of the lease); (9) shall use its best efforts to lease the Improvements; and (10) shall not, with respect to the Best Buy Lease, select or change the “Outside Delivery Date” (as defined in such lease) without the prior written consent of Administrative Agent, and any action in violation of clauses (5), (6), (7), and (8) of this Section 6.3 shall be void at the election of Administrative Agent.

 

  

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Section 6.4Tenant Estoppels.  At Administrative Agent’s request, Borrower shall, within thirty (30) days, obtain and furnish to Administrative Agent, (1) written estoppels in form and substance reasonably satisfactory to Administrative Agent, executed by tenants under leases in the Project and confirming the term, rent, and other provisions and matters relating to the leases and (2) written subordination and attornment agreements, in form and substance satisfactory to Administrative Agent, executed by tenants under leases in the Project, whereby, among other things, such tenants subordinate their interest in the Project to the Loan Documents and agree to attorn to Administrative Agent (on behalf of the Lenders) and its successors and assigns upon foreclosure or other transfer of the Project after an Event of Default.

 

ARTICLE 7

 

REPRESENTATIONS AND WARRANTIES

 

Borrower represents and warrants to Administrative Agent and the Lenders that:

 

Section 7.1Organization and Power.  Borrower and each Borrower Party is duly organized, validly existing and in good standing under the laws of the state of its formation or existence, and is in compliance with legal requirements applicable to doing business in the State.  Borrower is not a “foreign person” within the meaning of § 1445(f)(3) of the Internal Revenue Code.  Lead Borrower’s U.S. taxpayer identification number is 20-1577239 and Fordham Office’s U.S. taxpayer identification number is 26-1094416.

 

Section 7.2Validity of Loan Documents.  The execution, delivery and performance by Borrower and each Borrower Party of the Loan Documents:  (1) are duly authorized and do not require the consent or approval of any other party or governmental authority which has not been obtained; and (2) will not violate any law or result in the imposition of any Lien upon the assets of any such party, except as contemplated by the Loan Documents.  The Loan Documents constitute the legal, valid and binding obligations of Borrower and each Borrower Party, enforceable in accordance with their respective terms, subject to applicable bankruptcy, insolvency, or similar laws generally affecting the enforcement of creditors’ rights.

 

Section 7.3Liabilities; Litigation.

 

(1)           The financial statements delivered by Borrower and each Borrower Party are true and correct with no material change since the date of preparation.  Except as disclosed in such financial statements, there are no liabilities (fixed or contingent) affecting the Project, Borrower or any Borrower Party.  Except as disclosed in such financial statements, there is no litigation, administrative proceeding, investigation or other legal action (including any proceeding under any state or federal bankruptcy or insolvency law) pending or, to the knowledge of Borrower, threatened, against the Project, Borrower or any Borrower Party which if adversely determined could have a Material Adverse Effect.

 

  

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(2)           Neither Borrower nor any Borrower Party is contemplating either the filing of a petition by it under state or federal bankruptcy or insolvency laws or the liquidation of all or a major portion of its assets or property, and neither Borrower nor any Borrower Party has knowledge of any Person contemplating the filing of any such petition against it.

 

Section 7.4Taxes and Assessments.  The Project is comprised of one or more parcels, each of which constitutes a separate tax lot and none of which constitutes a portion of any other tax lot.  There are no pending or, to Borrower’s best knowledge, proposed, special or other assessments for public improvements or otherwise affecting the Project, nor are there any contemplated improvements to the Project (other than the Construction Work) that may result in such special or other assessments.

 

Section 7.5Other Agreements; Defaults.  Neither Borrower nor any Borrower Party is a party to or in violation of any agreement or instrument or subject to any court order, injunction, permit, or restriction which might have a Material Adverse Effect.

 

Section 7.6Compliance with Law; Government Approvals.

 

(1)           Borrower and the Project, as applicable, and the contemplated use thereof and operations thereat, comply, and upon completion of construction of the Construction Work shall comply, with all Applicable Law, except where the failure so to comply could not reasonably be expected to have a Material Adverse Effect.

 

(2)           All Government Approvals necessary in connection with the construction and operation of the Project as contemplated by the Loan Documents and the Project Documents, are set forth in Schedule 7.6 attached hereto (the “Permitting Schedule”) and, other than those Government Approvals to be obtained after the date hereof as expressly identified in the Permitting Schedule, 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 Project, are held in the name of Borrower (in the case of the Project), are free from conditions or requirements, the compliance with which could reasonably be expected to have a Material Adverse Effect or which Borrower does not reasonably expect will be able to be satisfied in the ordinary course of business, and are assignable to and assumable by the successors in interest and transferees of Borrower and run with the land.

 

(3)           There is no proceeding pending or, to Borrower’s Knowledge, threatened that seeks, or may reasonably be expected, to rescind, terminate, modify or suspend any such Government Approval.

 

(4)           The information set forth in each application and other written material submitted by Borrower and, to Borrower’s Knowledge, to the applicable Governmental Authority in connection with each such Government Approval is accurate and complete in all material respects.

 

  

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(5)           The Government Approvals expressly described on the Permitting Schedule as those to be obtained after the date hereof are required solely in connection with later stages of development, construction or operation of the Improvements.  Borrower has no reason to believe that any Government Approval that has not yet been obtained by Borrower, but which will be required 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 which Borrower does not reasonably expect will be able to be satisfied in the ordinary course of business.

 

(6)           The Project (if constructed in accordance with the Plans and Specifications and the Project Documents) will conform to and comply with all covenants, conditions, restrictions and reservations in the Government Approvals and all Applicable Law, except where the failure so to comply could not reasonably be expected to have a Material Adverse Effect.

 

(7)           Borrower has no reason to believe that Administrative Agent, acting for the benefit of the Lenders, will not be entitled, to the benefit of each Government Approval set forth on the Permitting Schedule hereto with respect to the Project upon the exercise of remedies under the Security Documents.

 

(8)           Borrower has delivered to Administrative Agent a true and complete copy of each Government Approval heretofore obtained with respect to the Project as indicated on the Permitting Schedule, as the same shall be supplemented during the course of obtaining additional Government Approvals as the Construction Work proceeds.

 

Section 7.7Location of Borrower.  Borrower’s principal place of business and chief executive offices are located at the address stated in Section 12.1.

 

Section 7.8ERISA.  Borrower has no employees and has not established any pension plan for employees which would cause Borrower to be subject to the Employee Retirement Income Security Act of 1974, as amended.

 

Section 7.9Margin Stock.  No part of proceeds of the Loans will be used for purchasing or acquiring any “margin stock” within the meaning of Regulations T, U or X of the Board of Governors of the Federal Reserve System.

 

Section 7.10Tax Filings.  Borrower and each Borrower Party have filed (or have obtained effective extensions for filing) all federal, state and local tax returns required to be filed and have paid or made adequate provision for the payment of all federal, state and local taxes, charges and assessments payable by Borrower and each Borrower Party, respectively.

 

Section 7.11Solvency.  Giving effect to the Loans, the fair saleable value of Borrower’s assets exceeds and will, immediately following the making of the Loans, exceed Borrower’s total liabilities, including, without limitation, subordinated, unliquidated, disputed and contingent liabilities.  The fair saleable value of Borrower’s assets is and will, immediately following the making of the Loans, be greater than Borrower’s probable liabilities, including the maximum amount of its contingent liabilities on its Debts as such Debts become absolute and matured.  Borrower’s assets do not and, immediately following the making of the Loans will not, constitute unreasonably small capital to carry out its business as conducted or as proposed to be conducted.  Borrower does not intend to, and does not believe that it will, incur Debts and liabilities (including contingent liabilities and other commitments) beyond its ability to pay such Debts as they mature (taking into account the timing and amounts of cash to be received by Borrower and the amounts to be payable on or in respect of obligations of Borrower).

 

  

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Section 7.12Full and Accurate Disclosure.  No statement of fact made by or on behalf of Borrower or any Borrower Party in this Agreement or in any of the other Loan Documents or in any certificate, statement or questionnaire delivered by Borrower or any Borrower Party in connection with the Loans contains any untrue statement of a material fact or omits to state any material fact necessary to make statements contained herein or therein not misleading.  There is no fact presently known to Borrower or any Borrower Party which has not been disclosed to Administrative Agent which might have a Material Adverse Effect.

 

Section 7.13Single Purpose Entity.  Borrower is and has at all times since its formation been a Single Purpose Entity.

 

Section 7.14Property Management Agreement; Construction Management Agreement; Development Agreement.

 

(1)           The Property Management Agreement is the only property management agreement in existence with respect to the operation or management of the Project.  The copy of the Property Management Agreement delivered to Administrative Agent is a true and correct copy, and such agreement has not been modified.  Neither party to such agreement is in default under such agreement and the Property Manager has no defense, offset right or other right to withhold performance under or terminate such agreement.

 

(2)           The Construction Management Agreement is the only Construction Management Agreement in existence with respect to the construction management of the Project.  The copy of the Construction Management Agreement delivered to Administrative Agent is a true and correct copy, and such agreement has not been modified.  Neither party to such agreement is in default under such agreement and the Construction Manager has no defense, offset right or other right to withhold performance under or terminate such agreement.

 

(3)           There is no development agreement with respect to the Project.

 

Section 7.15No Conflicts.

 

(1)           The execution, delivery and performance of the Loan Documents, and the Project Documents by Borrower do not and will not conflict with or result in a breach of any of the terms or provisions of, or constitute a default under, or result in the creation or imposition of any Lien (other than pursuant to the Loan Documents) upon any of the property or assets of Borrower pursuant to the terms of any indenture, mortgage, deed of trust, loan agreement, operating agreement or other agreement or instrument to which Borrower is a party or by which any of Borrower’s property or assets is subject, nor will such action result in any violation of the provisions of any Applicable Law or Government Approval applicable to Borrower or the Project.

 

(2)           Each Government Approval required for and each consent or approval required to be obtained from, and notice required to be delivered to, any other Person in connection with the execution, delivery and performance by Borrower of this Agreement, the other Loan Documents, and the Project Documents has been obtained or delivered and is in full force and effect.

 

  

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Section 7.16Title.  Borrower has good, marketable and insurable fee simple title to the Project, free and clear of all Liens, except for the Permitted Encumbrances and such other Liens as are permitted pursuant to the Loan Documents.  The Mortgages create (and upon the recordation thereof and of any related financing statements there will be perfected) (1) a valid Lien on the Project, subject only to Permitted Encumbrances and (2) security interests in and to, and collateral assignments of, all personalty (including the leases), all in accordance with the terms thereof, in each case subject only to any applicable Permitted Encumbrances and such other Liens as are permitted pursuant to the Loan Documents.  There are no claims for payment for work, labor or materials affecting the Project which are or may become a Lien prior to, or of equal priority with, the Liens created by the Loan Documents.

 

Section 7.17Use of Project.  The Project, upon completion of the construction of the Improvements, will be used exclusively for retail, office and other ancillary uses permitted by applicable zoning law, and for no other purpose or purposes.

 

Section 7.18Flood Zone.  No portion of the Project or the Improvements is located in an area identified by the Secretary of Housing and Urban Development or any successor thereto as an area having special flood hazards pursuant to the National Flood Insurance Act of 1968, the Flood Disaster Protection Act of 1973 or the National Flood Insurance Act of 1994, as amended, or any successor law.

 

Section 7.19Insurance.  Borrower has obtained and has delivered to Administrative Agent certified copies of all of the insurance policies for the Project reflecting the insurance coverages, amounts and other insurance requirements set forth in this Agreement.  No claims have been made under any such policy, and no Person, including Borrower, has done, by act or omission, anything which would impair the coverage of any such policy.

 

Section 7.20Condemnation.  No condemnation has been commenced or, to Borrower’s knowledge, is contemplated with respect to all or any portion of the Project or for the relocation of roadways providing access to the Project.

 

Section 7.21Utilities; Access.  The Project has adequate rights of access to public ways and is or will, following completion of the Improvements, be served by adequate electric, gas, water, sewer, sanitary sewer and storm drain facilities.  All public utilities necessary to the full use and enjoyment of the Project are or will be located in the public right-of-way abutting such project, there exists sufficient capacity to support the Project and all such utilities are or will, following the completion of the Improvements, be connected so as to serve such project without passing over other property, except to the extent such other property is subject to a perpetual easement for such utility benefiting such project.  All roads necessary for the full utilization of the Project for its current purpose have been or will be completed and dedicated to public use and accepted by all Governmental Authorities.  Except for on-site and off-site infrastructure improvements to be developed pursuant to the Government Approvals by Borrower for the Project, there are no amenities, services or facilities (including those for access, parking, recreational activities and otherwise) not located or to be constructed upon the Project, pursuant to the applicable Project Documents, which are necessary to the use or enjoyment, or intended to benefit the owner or occupants, thereof.

 

  

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Section 7.22Boundaries.  Except as shown on the Survey all of the improvements to be developed in connection with the Project lie wholly within the boundaries and building restriction lines of such project, and no improvements on adjoining properties encroach upon the Project.

 

Section 7.23Separate Lots.  The Project is comprised of one (1) or more parcels which constitutes one (1) or more separate tax lots and does not constitute a portion of any other tax lot not a part of the Project.

 

Section 7.24Filing and Recording Taxes.  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 currently in effect in connection with the transfer of the Project to Borrower or any transfer of a controlling interest in Borrower have been paid.  All mortgage, mortgage recording, stamp, intangible or other similar tax required to be paid by any Person in connection with the execution, delivery, recordation, filing, registration, perfection or enforcement of any of the Loan Documents, including, without limitation, the Mortgages, have been paid and, the Mortgages are enforceable in accordance with its terms by Administrative Agent or any subsequent holder thereof (on behalf of the Lenders), subject to applicable bankruptcy, insolvency, or similar laws generally affecting the enforcement of creditors’ rights.

 

Section 7.25Investment Company Act.  Borrower is not (1) an “investment company” or a company “controlled” by an “investment company,” within the meaning of the Investment Company Act of 1940, as amended; or (2) subject to any other federal or state law or regulation which purports to restrict or regulate its ability to borrow money.

 

Section 7.26Foreign Assets Control Regulations, Etc.  Neither the execution and delivery of the Notes and the other Loan Documents by Borrower Parties nor the use of the proceeds of the Loans, will violate the Trading with the Enemy Act, as amended, or any of the foreign assets control regulations of the United States Treasury Department (31 CFR, Subtitle B, Chapter V, as amended), Executive Order No. 13,224,66 Fed. Reg. 49,079 (2001), issued by the President of the United States of America (Executive Order Blocking Property and Prohibiting Transactions With Persons Who Commit, Threaten to Commit, or Support Terrorism) or any enabling legislation or executive order relating to any of the same.  No Borrower Party nor any of their respective subsidiaries or Affiliates is a Prohibited Person.

 

Section 7.27Organizational Structure.

 

(1)           Borrower has heretofore delivered to Administrative Agent a true and complete copy of the Organizational Documents of each Borrower Party.

 

(2)           Schedule 7.27 contains a true and accurate chart reflecting the ownership of all of the direct and indirect equity interests in Borrower and each Borrower Party, including the percentage of ownership interest of the Persons shown thereon.

 

  

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Section 7.28Project Documents.  Borrower has heretofore delivered to Administrative Agent a true and complete copy of each Project Document and, subject to the terms of Section 9.7 of the Building Loan Agreement, none of the Project Documents has been further modified.  The Project Documents are in full force and effect and Borrower is not in default under or with respect to any Project Document.  To the best of Borrower’s knowledge, no other party to a Project Document is in default under any material covenant or obligation set forth therein.

 

Section 7.29Budget.  The amounts and allocations set forth in the Budget (including the Project Costs), 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 anticipated to be required to acquire and develop the Project, complete the Construction Work, and pay interest on the Loans, the carrying and operating costs for the Project, costs in connection with the leasing of premises within the Project.

 

Section 7.30Interim Disbursements.  All Loans, if any, disbursed prior to the date hereof by Administrative Agent to Lead Borrower have been applied to the respective items listed in the respective Request for Loan Advance, except that in the case of any disputed items, such Loans have been applied to other Budget Line Items with Administrative Agent’s prior approval or repaid to Administrative Agent (on behalf of the Lenders).

 

Section 7.31Reserved.

 

Section 7.32Tenant Improvement Allowances.  Schedule 7.32 attached hereto sets forth a true and complete summary of all Tenant Improvement Allowances currently provided for in the Leases; provided that Schedule 7.32 shall be subject to update as Approved Leases are executed and/or amended in accordance with the terms hereof and as plans for Tenant Improvement Allowances are further developed pursuant to Approved Leases.

 

Section 7.33Reserved.  

 

ARTICLE 8

 

FINANCIAL REPORTING

 

Section 8.1Financial Statements.

 

(1)           Monthly Reports.  During the period commencing on the Closing Date and ending upon the satisfaction of the Project Work Substantial Completion Conditions, as soon as available and in any event within fifteen (15) Business Days after the end of each calendar month occurring during such period, a certificate of an authorized officer of Lead Borrower, in form and substance reasonably satisfactory to Administrative Agent, 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 Administrative Agent), (b) the aggregate amounts paid during such month to the Construction Manager and/or subcontractors and any unpaid amounts owing to the Construction Manager and/or subcontractors which are sixty (60) days past their due date, (c) variations from the Construction Schedule, including, without limitation, the estimated Completion Date, and the reasons therefor, (d) if the amounts paid to the Construction Manager and/or subcontractors during such month are at variance from the amounts scheduled to be paid pursuant to the applicable Request for Loan Advance, the reasons for such variance, (e) any Liens placed on the Project and their payment status, (f) the status of construction generally and of the Government Approvals necessary for the construction and operation of the Project; and (g) copies of Lien Waivers and any other reports as may reasonably be requested by Administrative Agent.

 

  

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(2)           Quarterly Reports.  Within sixty (60) days after the end of each calendar quarter (except for the fourth quarter ending on December 31), Lead Borrower shall furnish to Administrative Agent (a) on and after the satisfaction the Project Work Substantial Completion Conditions, quarterly operating statements for the Project for the most recent fiscal quarter, (b) a current rent roll for the Project, (c) on and after the Occupancy of the first tenant in the Project for operation of its business, a statement of all rent arrearages as of the last day of such fiscal quarter, (d) a leasing status report, (e) quarterly financial statements (including a balance sheet, income statement and cash flow statement) for Borrower, Guarantor and the Managing Member prepared in accordance with GAAP (and including all appropriate and customary notes), and (f) a certificate executed by the chief financial officer of Borrower or the Managing Member of Borrower stating that each such quarterly statement presents fairly the financial condition and the results of operations of Borrower and the Project and has been prepared in accordance with general accepted accounting principles.

 

(3)           Annual Reports.  Within one hundred twenty (120) days after the end of each calendar year, Lead Borrower will furnish to Administrative Agent a complete copy of Borrower’s annual financial statements prepared in accordance with GAAP and otherwise in form and detail reasonably acceptable to Administrative Agent, for such calendar year which financial statements shall contain (x) a balance sheet and (y) on and after the Occupancy of the first tenant in the Project, a detailed operating statement for each of Borrower and the Project.  Borrower’s annual financial statements shall be accompanied by (i) a comparison of the budgeted income and expenses and the actual income and expenses for the prior calendar year, and (ii) a certificate executed by the chief financial officer of Borrower or the Managing Member of Borrower (in the case of the Borrower financial statements) stating that each such annual financial statement presents fairly the financial condition and the results of operations of Borrower and the Project and has been prepared in accordance with general accepted accounting principles.  Together with Borrower’s annual financial information to be delivered pursuant to this Section 8.1(3), copies, certified by an Authorized Officer of Borrower to be true and correct, for each annual period prior to the Completion Date, the annual audited financial statement of the Construction Manager, in each case prepared in accordance with GAAP, and together with the opinion of the independent certified public accountant of the Construction Manager, which opinion is not qualified as to the scope of the audit or as to the status of the Construction Manager.

 

(4)           Additional Reports.  Upon completion of the Improvements and if the Maturity Date is extended pursuant to Section 2.5, Lead Borrower shall deliver to Administrative Agent as soon as reasonably available, but in no event later than thirty (30) days after such items become available to Borrower in final form a summary report containing each of the following with respect to the Project for the most recently completed calendar year:  (A) aggregate sales by tenants under leases or other occupants of the Project, both on an actual (or to the extent such information is not provided by tenants, Property Manager’s or Borrower’s best estimate) and on a comparable store basis, (B) rent per square foot payable by each tenant and (C) aggregate Occupancy of the Project by anchor space and in-line store space as of December 31.

 

  

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Section 8.2Accounting Principles.  All financial statements shall be prepared in accordance with sound accounting principles applicable to commercial real estate, consistently applied from year to year.  If the financial statements are prepared on an accrual basis, such statements shall be accompanied by a reconciliation to cash basis accounting principles.

 

Section 8.3Other Information.  Lead Borrower shall deliver to Administrative Agent such additional information regarding Borrower, its subsidiaries, its business, any Borrower Party, and the Project within thirty (30) days after Administrative Agent’s request therefor.

 

Section 8.4Audits.  Administrative Agent shall have the right to choose and appoint a certified public accountant to perform financial audits as it deems necessary, at Borrower’s expense.  Borrower shall permit Administrative Agent to examine such records, books and papers of Borrower which reflect upon its financial condition and the income and expense relative to the Project.

 

ARTICLE 9

 

COVENANTS

 

Borrower covenants and agrees with Administrative Agent and the Lenders as follows:

 

Section 9.1Due on Sale and Encumbrance; Transfers of Interests.  Without the prior written consent of Administrative Agent and the Lenders (to the extent required under Section 12.2),

 

(1)           Borrower shall not allow any Change of Control to occur;

 

(2)           neither Borrower nor any other Person having an ownership or beneficial interest in Borrower shall (a) allow, directly or indirectly, any Transfer (other than a Permitted Transfer), to occur; or (b) further encumber, alienate, grant a Lien or grant any other interest in the Project or any part thereof (including any partnership, membership or other ownership interest in Borrower), whether voluntarily or involuntarily; and

 

(3)           Borrower shall not assign any of its rights or obligations hereunder or under the Loan Documents.

 

As used in this Section 9.1, “Transfer” shall include the sale, transfer, conveyance, mortgage, pledge, or assignment of the legal or beneficial ownership of (a) the Project (including, following the establishment of a condominium regime with respect to the Project, any Unit), (b) any partnership interest in any general partner in Borrower that is a partnership, (c) any membership interest in any member in Borrower that is a limited liability company and (d) any voting stock in any managing member in Borrower that is a corporation; “Transfer” shall not include (i) the leasing of any space within the Project so long as Borrower complies with the provisions of the Loan Documents relating to such leasing activity; or (ii) the transfers of non-managing membership interests in Borrower so long as no Change of Control results therefrom.

 

  

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Section 9.2Maintenance of the Project; Alterations.  

 

(1)           Upon the completion of construction of the Project, Borrower shall:

 

(a)           maintain or cause to be maintained the Improvements with the facilities and amenities as described in the definition of “Improvements,” in good condition and repair, in a manner consistent with a class “A” mixed-use commercial property located in Bronx, New York, and make or cause to be made all reasonably necessary repairs or replacements thereto;

 

(b)           not remove, demolish or structurally alter, or permit or suffer the removal, demolition or structural alteration of, any of the Improvements without the prior written consent of Administrative Agent except to the extent required pursuant to the development of the Project and in connection with the Construction Work or as permitted by this Agreement or required by Applicable Law;

 

(c)           subject to the terms of the Loan Documents (and the Condominium Declaration, if applicable), promptly restore or cause to be restored in like manner any portion of the Improvements which may be damaged or destroyed from any cause whatsoever;

 

(d)           not commit, or permit, any waste of the Project; and

 

(e)           subject to the terms of the Loan Documents (and the Condominium Declaration, if applicable), not remove or permit the removal of any item constituting part of the Project without replacing it with a comparable item of equal quality, value and usefulness; except that the foregoing provisions shall not prohibit the sale or disposition, in the ordinary course of business, of any property which is obsolete or such replacement is impracticable and not within the sound business judgment of Borrower, all as subject to the consent of Administrative Agent, which consent shall not be unreasonably withheld, delayed or conditioned.

 

(2)           Upon the completion of construction of the Project, Borrower shall obtain Administrative Agent’s prior written consent, which consent shall not be unreasonably withheld, conditioned or delayed, to any alterations to the Improvements, other than alterations performed in connection with the restoration of the Project after the occurrence of a casualty in accordance with the terms and provisions of this Agreement (and the Condominium Declaration, if applicable).

 

Section 9.3Real Estate Taxes; Charges.  Borrower shall pay before any fine, penalty, interest or cost may be added thereto, and shall not enter into any agreement to defer, any real estate taxes and assessments, franchise taxes and charges, and other governmental charges that may become a Lien upon the Project or become payable during the term of the Loans (collectively, the “Real Estate Taxes”), and will promptly furnish Administrative Agent with evidence of such payment; however, Borrower’s compliance with Section 9.16 of this Agreement relating to impounds for taxes and assessments shall, with respect to payment of such taxes and assessments, be deemed compliance with this Section 9.3.  Borrower shall not suffer or permit the joint assessment of the Project with any other real property constituting a separate tax lot or with any other real or personal property.  Borrower shall pay when due all claims and demands of mechanics, materialmen, laborers and others which, if unpaid, might result in a Lien on the Project; however, Borrower may contest the validity of such claims and demands or taxes so long as (1) Lead Borrower notifies Administrative Agent that Borrower intends to contest such claim or demand, (2) Borrower provides Administrative Agent with an indemnity, bond or other security satisfactory to Administrative Agent (including an endorsement to Administrative Agent’s title insurance policy insuring against such claim or demand) assuring the discharge of Borrower’s obligations for such claims and demands, including interest and penalties, (3) Borrower is diligently contesting the same by appropriate legal proceedings in good faith and at its own expense and concludes such contest prior to the tenth (10th) day preceding the earlier to occur of the Maturity Date or the date on which the Project is scheduled to be sold, forfeited, terminated, cancelled or lost for non payment, (4) such proceedings shall not subject Borrower, the Administrative Agent or any Lender to criminal or civil liability (other than civil liability as to which adequate security has been provided pursuant to clause (2) above), and (5) Borrower shall promptly upon final determination thereof pay the amount of such items, together with all costs, interests and penalties.

 

  

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(2)           Borrower shall pay all taxes, charges, filing, registration and recording fees, excises and levies payable with respect to the Notes or the Liens created or secured by the Loan Documents, other than income, franchise and doing business taxes imposed on Administrative Agent or any Lender.  If there shall be enacted any law (1) deducting the Loans from the value of the Project for the purpose of taxation, (2) affecting any Lien on the Project, or (3) changing existing laws of taxation of mortgages, deeds of trust, security deeds, or debts secured by real property, or changing the manner of collecting any such taxes, Borrower shall promptly pay to Administrative Agent, on demand, all taxes, costs and charges for which Administrative Agent or any Lender is or may be liable as a result thereof; however, if such payment would be prohibited by law or would render the Loans usurious, then instead of collecting such payment, Administrative Agent may (and on the request of the Majority Lenders shall) declare all amounts owing under the Loan Documents to be immediately due and payable.

 

Section 9.4Development; Management.

 

(1)           Borrower shall not terminate, replace or appoint any property manager or terminate or amend the Property Management Agreement for the Project without Administrative Agent’s prior written approval.  Any change in majority ownership or control of the Property Manager shall be cause for Administrative Agent to reasonably re-approve such Property Manager and Property Management Agreement.  Borrower shall replace the Property Manager as the request of the Administrative Agent (i) upon the occurrence of an Event of Default, (ii) if the Property Manager is in default of its obligations under the Property Management Agreement, or (iii) if the Property Manager is insolvent or is the subject of an involuntary or voluntary case or other proceeding seeking liquidation, reorganization or other relief with respect to itself or its Debts or other liabilities under any bankruptcy, insolvency or other similar law.

 

(2)           If at any time Administrative Agent consents to the appointment of a new property manager, such new property manager and Borrower shall, as a condition of Administrative Agent’s consent, execute a Property Manager’s Consent and Subordination of Property Management Agreement in the form then used by Administrative Agent.  Each property manager shall hold and maintain all necessary licenses, certifications and permits required by law.  Borrower shall fully perform all of its covenants, agreements and obligations under the Property Management Agreement.

 

  

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(3)           Borrower shall cause the Project to be managed by a Qualified Manager engaged by Borrower and approved by Administrative Agent in its reasonable discretion.  Acadia-P/A Management Services, LLC is hereby approved as the initial Property Manager, pursuant to the terms set forth in the Property Management Agreement.

 

(4)           Subject to the terms of the Subordination of Property Management Agreement, the Property Manager shall be entitled to receive a management fee of not more than four percent (4%) of total operating revenues as defined in the applicable Property Management Agreement approved by the Administrative Agent.

 

(5)           The Property Manager shall, prior to the Closing Date, deliver an executed Subordination of Property Management Agreement.

 

(6)           Lead Borrower shall deliver to Administrative Agent, as and when executed, certified copies of all maintenance, management, service, leasing and sales contracts entered into with respect to the Project, each of which shall provide that Administrative Agent shall have the right, upon foreclosure, to terminate such contract on thirty (30) days notice, or, if such right is not provided in such contract, such contract shall be entered into with a party, and on terms and conditions reasonably acceptable to Administrative Agent , and contemporaneously with entering into each such contract, at Administrative Agent’s option, cause the service provider under each such contract to deliver to Administrative Agent a Consent and Agreement, pursuant to which such service provider shall undertake, inter alia, to continue performance on behalf of the Lenders following any Event of Default without additional cost (other than sums owed pursuant to such contract for services thereafter rendered to or for Administrative Agent).

 

(7)           Borrower will not enter into a development agreement with respect to the Project unless: (a) Administrative Agent has approved the developer in writing; (b) the form and substance of the development agreement is acceptable to Administrative Agent and (c) the development agreement has been collaterally assigned to the Administrative Agent, in accordance with a form reasonably acceptable to the Administrative Agent, and consented to by the developer.

 

Section 9.5Compliance with Laws; Inspection.

 

(1)           Borrower shall:

 

(a)           comply in all material respects (subject to such more stringent requirements as may be set forth elsewhere herein) with all Applicable Laws;

 

(b)           obtain, comply with and maintain in full force and effect all Government Approvals and shall from time to time obtain all Government Approvals as shall now or hereafter be necessary under Applicable Law in connection with the ownership, construction, operation or maintenance of the Project or the execution, delivery and performance by Borrower of any of the Project Documents to which it is a party and shall comply with all such Government Approvals and keep them in full force and effect;

 

  

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(c)           promptly furnish a true and complete copy of each such Government Approval to Administrative Agent;

 

(d)           unless otherwise approved by the Administrative Agent, use its reasonable efforts to contest any proceedings before any Governmental Authority and to resist any proposed adverse changes in Applicable Law to the extent that such proceedings or changes are directed specifically toward the Project or could reasonably be expected to have a Material Adverse Effect; and

 

(e)           permit Administrative Agent and the Lenders and their agents, representatives and employees, upon reasonable prior notice to Borrower, to inspect the Project and conduct such environmental and engineering studies and inspections of the Project as Administrative Agent may require, provided such inspections and studies are conducted during normal business hours and do not materially interfere with the use and operation of the Project.

 

(2)           After prior notice by Lead Borrower to Administrative Agent, Borrower, at its own expense, may contest by appropriate legal proceedings promptly initiated and conducted in good faith and with due diligence, the validity or application of any Applicable Law; provided that:

 

(a)           no Event of Default exists;

 

(b)           Borrower shall pay any outstanding fines, penalties or other payments under protest unless such proceeding shall suspend the collection of such items;

 

(c)           such proceeding shall be permitted under and be conducted in accordance with the provisions of any other instrument to which Borrower or the Project is subject and shall not constitute a default thereunder;

 

(d)           no part of or interest in the Project will be in danger of being sold, forfeited, terminated, canceled or lost during the pendency of the proceeding;

 

(e)           such proceeding shall not subject Borrower, Administrative Agent or any Lender to criminal or civil liability (other than civil liability as to which adequate security has been provided pursuant to clause (f) below);

 

(f)           unless paid under protest, Borrower shall have furnished such security as may be required in the proceeding, or as may be reasonably requested by Administrative Agent, to insure the payment of any such items, together with all interest and penalties thereon, which shall not be less than 110% of the maximum liability of Borrower as reasonably determined by Administrative Agent; and

 

(g)           Borrower shall promptly upon final determination thereof pay the amount of such items, together with all costs, interest and penalties.

 

(3)           Administrative Agent will engage an inspecting architect at Borrower’s reasonable expense, in accordance with Administrative Agent’s standard engagement procedures, to review plans, specifications and budgets of the Project on a monthly basis, inspect the Project and provide reports on such inspections to the Administrative Agent for the benefit of the Lenders.

 

  

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Section 9.6Legal Existence; Name, Etc.

 

(1)           Borrower and each Managing Member in Borrower shall preserve and keep in full force and effect their respective existence as a Single Purpose Entity, entity status, franchises, rights and privileges under the laws of the state of its formation, and all qualifications, licenses and permits applicable to the ownership, use and operation of the Project.  Neither Borrower nor any Managing Member of Borrower shall wind up, liquidate, dissolve, reorganize, merge, or consolidate with or into, or convey, sell, assign, transfer, lease, or otherwise dispose of all or substantially all of their respective assets, or acquire all or substantially all of the assets of the business of any Person, or permit any subsidiary or Affiliate of Borrower to do so.  Borrower and each Managing Member in Borrower shall conduct business only in its own respective name and shall not change its respective name, identity, or organizational structure, or the location of its chief executive office or principal place of business unless Borrower or such Managing Member (a) shall have obtained the prior written consent of Administrative Agent to such change, and (b) shall have taken all actions necessary or requested by Administrative Agent to file or amend any financing statement or continuation statement to assure perfection and continuation of perfection of security interests under the Loan Documents.

 

(2)           Borrower shall at all times cause there to be at least one (1) duly appointed member of the board of managers or other governing board or body of the managing member of the Managing Member, who is an Independent Manager.  Borrower shall not take any action or permit any action to be taken which, under the terms of this Agreement, or the limited partnership agreement or limited liability company operating agreement of Borrower, the Managing Member, or the managing member of the Managing Member, requires the consent of such Independent Manager(s), unless such Independent Manager(s) shall have consented in writing to such action.

 

(3)           Neither Borrower nor Borrower’s Managing Member shall cause or permit any modification to be made in its organizational documents that would be inconsistent with the provisions of Section 7.27 or this Section 9.6, that would interfere with its ability to comply with its status as a Single Purpose Entity, as applicable, or that otherwise in any other respect would violate this Agreement or could reasonably be expected to have a Material Adverse Effect.

 

Section 9.7Affiliate Transactions

 

(1)             Without the prior written consent of Administrative Agent, Borrower shall not engage in any transaction affecting the Project with an Affiliate of Borrower.

 

Section 9.8Limitation on Other Debt.  

 

(1)           Borrower and Managing Member shall not, without the prior written consent of Administrative Agent and the Majority Lenders, incur any Debt other than, in the case of Borrower, the Debt permitted by the definition of Single Purpose Entity.

 

(2)           Borrower shall not make any loans, and no direct or indirect interest in Borrower may be pledged as collateral for any financing or otherwise, except for the Approved Mezzanine Loan and as otherwise may be permitted under this Agreement or expressly approved by Administrative Agent and Majority Lenders in their discretion.

 

  

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Section 9.9Further Assurances.  Borrower shall promptly (1) cure any defects in the execution and delivery of the Loan Documents, and (2) execute and deliver, or cause to be executed and delivered, all such other documents, agreements and instruments as Administrative Agent may reasonably request to further evidence and more fully describe the collateral for the Loans, to correct any omissions in the Loan Documents, to perfect, protect or preserve any Liens created under any of the Loan Documents, or to make any recordings, file any notices, or obtain any consents, as may be necessary or appropriate in connection therewith.

 

Section 9.10Loan Certificates.  Borrower or Administrative Agent, within ten (10) days after request from the other party, shall furnish to the requesting party a written statement, duly acknowledged, setting forth the amount due on the Loans, the terms of payment of the Loans, the date to which interest has been paid, whether any offsets or defenses exist against the Loans and, if any are alleged to exist, the nature thereof in detail, and such other matters as the requesting party reasonably may request.

 

Section 9.11Notice of Certain Events.  Lead Borrower shall promptly notify Administrative Agent of (1) any Potential Default or Event of Default, together with a detailed statement of the steps being taken to cure such Potential Default or Event of Default; (2) any notice of default received by Borrower or any Borrower Party under other obligations relating to the Project or otherwise material to Borrower’s business; and (3) any threatened or pending legal, judicial or regulatory proceedings, including any dispute between Borrower and any governmental authority, affecting Borrower or the Project.

 

Section 9.12Indemnification.  Borrower shall indemnify, defend and hold Administrative Agent and each Lender harmless from and against any and all losses, liabilities, claims, damages, expenses, obligations, penalties, actions, judgments, suits, costs or disbursements of any kind or nature whatsoever, including the reasonable fees and actual expenses of their counsel, which may be imposed upon, asserted against or incurred by any of them relating to or arising out of (1) the Project or (2) any of the Loan Documents or the transactions contemplated thereby, including, without limitation, (a) any accident, injury to or death of persons or loss of or damage to property occurring in, on or about any of the Project or any part thereof or on the adjoining sidewalks, curbs, adjacent property or adjacent parking areas, streets or ways, (b) any inspection, review or testing of or with respect to the Project, (c) any investigative, administrative, mediation, arbitration, or judicial proceeding, whether or not Administrative Agent or any Lender is designated a party thereto, commenced or threatened at any time (including after the repayment of the Loans) in any way related to the execution, delivery or performance of any Loan Document or to the Project, (d) any proceeding instituted by any Person claiming a Lien, and (e) any brokerage commissions or finder’s fees claimed by any broker or other party claiming to have dealt with the Borrower in connection with the Loans, the Project, or any of the transactions contemplated in the Loan Documents, including those arising from the joint, concurrent, or comparative negligence of Administrative Agent or any Lender, except to the extent any of the foregoing is caused by Administrative Agent’s or any Lender’s gross negligence or willful misconduct, in which case the party to whom the gross negligence or willful misconduct is attributable (but not any other party) shall not be entitled to the indemnification provided for hereunder to the extent of such gross negligence or willful misconduct, to the extent determined by a court of competent jurisdiction.

 

  

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Section 9.13Covenants Regarding the Condominium Declaration.  Borrower covenants and agrees that, from and after the establishment of any condominium regime with respect to the Project:

 

(1)           Borrower shall pay when due and before any fine, penalty, interest or cost may be added thereto for the late payment or non-payment thereof, all Unit Annual Assessments imposed on Borrower’s Project Interest and all other charges mentioned in and payable by Borrower under the Condominium Declaration (including, without limitation, all insurance and taxes applicable to Borrower’s Project Interest), and shall comply with all of its other obligations under the Condominium Declaration, and shall do all things necessary to preserve and to keep unimpaired Borrower’s rights, powers and privileges (whether as the owner of the Units, as the Declarant, as the holder of any special class of voting rights, or otherwise) thereunder.  If Borrower shall fail to do so, the Lenders shall, if required by Administrative Agent, pay such Unit Annual Assessments or other charges.  Lead Borrower shall deliver to Administrative Agent, upon request, copies of receipts or other proof satisfactory to Administrative Agent evidencing the timely payment of such Unit Annual Assessments and other charges.

 

(2)           Borrower shall comply with the covenants, agreements and provisions of the Condominium Documents, and Lead Borrower shall promptly notify Administrative Agent of (a) any failure by Borrower to comply with the Condominium Declaration and (b) the receipt by Borrower of any notice asserting or claiming a default by Borrower under the Condominium Declaration, and shall promptly cause a copy of such notice to be delivered to Administrative Agent.

 

(3)           Borrower shall not vote in favor of or otherwise approve any amendment of the Condominium Declaration without the prior written consent of Administrative Agent, which consent shall not be unreasonably withheld.

 

(4)           Borrower shall not waive any material right of the Borrower (whether as the owner of the Units, as the Declarant, as the holder of any special class of voting rights, or otherwise) under the Condominium Declaration without the prior written consent of Administrative Agent which shall not be unreasonably withheld.

 

(5)           The Lien of the Mortgages shall encumber all of Borrower’s Project Interest, including all of Borrower’s rights to vote on or approve any matter with respect to Borrower’s Project Interest.  Without the prior written consent of Administrative Agent, Borrower shall not exercise such voting or approval rights with respect to any of the following:

 

(a)           any partition of all or a part of the Project subject to the Condominium Declaration;

 

(b)           the nature and amount of any insurance covering all or a part of the Project and the disposition of any proceeds thereof;

 

  

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(c)           the manner in which any condemnation or threat of condemnation of all or a part of the Project shall be defended or settled and the disposition of any award or settlement in connection therewith;

 

(d)           the construction of any additions or improvements to, or any repair, rebuilding or restoration of all or a portion of any Improvements to, the Project (to the extent that the same would require the approval of Administrative Agent under this Agreement);

 

(e)           the distribution of any insurance or condemnation proceeds (other than in compliance with this Agreement); and

 

(f)           any other material action or decision provided for in the Condominium Declaration.

 

(6)           If required by the Administrative Agent, Lead Borrower will take all action to obtain as promptly as possible, and forthwith upon receipt furnish to the Administrative Agent, a true and correct copy of: (a) any statement showing the allocation of expenses and other assessments against the Units and (b) any statements issued to Borrower calling for payment of expenses.

 

(7)           Lead Borrower shall be, and remain through the repayment of the Loans in full, the Declarant under the Condominium Declaration.

 

(8)           Borrower shall at all times comply with the provisions of Section 17.2(5), hereof.

 

(9)           Borrower shall at all times comply with the covenants contained in Section 17.1(2).

 

(10)           Borrower acknowledges and agrees that nothing set forth in this Section or in any of the other provisions of the Loan Documents shall impose upon Administrative Agent or any Lender any obligation or responsibility to Borrower under the Condominium Declaration.

 

Section 9.14Collateral Letters of Credit.  With respect to any Collateral Letter of Credit that Borrower may furnish or cause to be furnished to Administrative Agent in accordance with the terms of this Agreement or any of the other Loan Documents:

 

(1)           Administrative Agent will be entitled, among other things, to make one or more draws by presentment thereof to the issuing bank accompanied only by Administrative Agent’s clean sight-draft, it being intended that the issuing bank shall have no right to inquire as to Administrative Agent’s right to draw upon such Collateral Letter of Credit;

 

(2)           Administrative Agent shall be entitled, among other things, to draw upon each Collateral Letter of Credit, in whole, or in part from time to time, upon the occurrence and during the continuance of any Event of Default or under the other circumstances under which a draw shall be permitted under the Loan Documents or the Collateral Letter of Credit;

 

  

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(3)           Administrative Agent shall have the right to draw upon any Collateral Letter of Credit within thirty (30) days prior to the expiration date of such Collateral Letter of Credit and each renewal and extension thereof unless, prior to such expiration date of such Collateral Letter of Credit and each renewal and extension thereof, the Borrower shall have furnished a replacement, extension or renewal Collateral Letter of Credit, acceptable to Administrative Agent, it being the intent hereof that at no time shall the unexpired term of any Collateral Letter of Credit be less than thirty (30) days.  If Administrative Agent draws upon a Collateral Letter of Credit pursuant to the terms of this subsection (3), then Administrative Agent shall hold the proceeds thereof in a Controlled Account as additional collateral for the Obligations, to be applied in accordance with subsection (5) below;

 

(4)           Administrative Agent shall also be entitled to draw upon a Collateral Letter of Credit if Administrative Agent believes that its rights to draw on such Collateral Letter of Credit could be in jeopardy.  Without limiting the foregoing, Administrative Agent shall also be entitled to draw on a Collateral Letter of Credit if the credit rating or financial condition of the issuing bank is no longer meets the minimum rating contained in the definition of Collateral Letter of Credit.  Following a draw by Administrative Agent on a Collateral Letter of Credit solely because of the deterioration of the creditworthiness of the issuing bank, Administrative Agent will deposit such proceeds in a Controlled Account as security for the purposes for which such Letter of Credit was delivered and Administrative Agent shall be entitled to draw upon such proceeds to the same extent it would have been entitled to make a draw under the applicable Letter of Credit.  Administrative Agent shall disburse such proceeds to Lead Borrower provided (i) Borrower delivers to Administrative Agent a replacement Collateral Letter of Credit within ten (10) days of Administrative Agent’s draw, (ii) there exists no Event of Default or Potential Default and (iii) Borrower pays all of Administrative Agent’s fees and expenses in connection with such draw and disbursement;

 

(5)           No draw by Administrative Agent on any Collateral Letter of Credit shall cure or be deemed to cure any Event of Default or limit in any respect any of Administrative Agent’s or the Lenders’ remedies under the Loan Documents, it being understood that Administrative Agent’s and the Lenders’ rights and remedies hereunder shall be cumulative and Administrative Agent and the Lenders shall have no obligations to apply the proceeds of any draw to missed installments or other amounts then due and unpaid under the Loans.  Proceeds of any draw upon a Collateral Letter of Credit (after reimbursement of any costs and expenses, including attorneys’ fees and reimbursements, incurred by Administrative Agent in connection with such draw), other than a draw made in accordance with Section 9.14(4), may be applied by Administrative Agent to the payment of the Obligations in such manner as Administrative Agent may determine.  No delay or omission of Administrative Agent or the Lenders in exercising any right to draw on a Collateral Letter of Credit shall impair any such right, or shall be construed as a waiver of, or acquiescence in, any Event of Default; and

 

(6)           Administrative Agent shall, upon request, release its rights in any Collateral Letters of Credit and surrender such Collateral Letters of Credit to the issuing bank upon the payment in full of all obligations under the Loan Documents.

 

  

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Section 9.15Hedge Agreements.

 

(1)           At Borrower’s option, the Borrower may enter into one or more Hedge Agreements. Each Hedge Agreement shall, at Borrower’s option, be based on Interest Periods (each, an “Interest Rate Hedge Period”) of one, two, three months or such other Interest Periods satisfactory to Administrative Agent in its sole discretion. The economic and other benefits of the Hedge Agreements and all of the other rights thereunder shall be collaterally assigned to Administrative Agent as additional security for the Loans, pursuant to a Hedge Pledge.  All Hedge Pledges shall be accompanied by (i) Uniform Commercial Code financing statements, in duplicate, with respect to such pledges and (ii) the consent and agreement of the counterparty thereunder that it will pay all amounts due thereunder to an account designated by Administrative Agent and will continue to perform its obligations under such Hedge Agreement for the benefit of Administrative Agent and the Lenders after enforcement of and/or realization on such Hedge Pledge and an acknowledgement that Administrative Agent shall not be deemed to have assumed any of the obligations or duties of Borrower under any such Hedge Agreement.

 

(2)           All of Borrower’s obligations under any Hedge Agreement provided by a Eurohypo Counterparty shall be secured by the lien of the Mortgages on a pari passu basis with the Loans and other sums evidenced or secured by the Loan Documents.

 

(3)           Any Hedge Agreement entered into with one or more banks or insurance companies (each a “Third-Party Counterparty”) other than a Eurohypo Counterparty (a “Third-Party Hedge Agreement”) shall not be secured by the Mortgage or a Lien on any portion of the collateral under the Security Documents or on or in any direct or indirect interest in Borrower.

 

(4)           Borrower shall cause all payments payable by a Third-Party Counterparty under the Hedge Agreement to be deposited into an account designated by Administrative Agent.  On the due date for interest on the Loans each month, the amounts so deposited in such account shall be debited, and applied to pay the accrued but unpaid interest on the Loans due on such date, before applying any portion of the Loan proceeds which is allocated to the Interest Reserve for such purpose, and before applying any Operating Revenues for such purpose.

 

(5)           Any payment due from the counterparty under any Hedge Agreement upon a termination thereof, shall be delivered to Administrative Agent and applied by Administrative Agent to any amounts due under the Loan Documents.

 

(6)           In connection with a Third-Party Hedge Agreement, Lead Borrower shall obtain and deliver to Administrative Agent an opinion from counsel (which counsel may be in-house counsel for the Third-Party Counterparty) for the Third-Party Counterparty (in form reasonably satisfactory to Administrative Agent and upon which Administrative Agent, the Lenders and their respective successors and assigns may rely) which shall provide, in relevant part, that:

 

(a)           the Third-Party Counterparty is duly organized, validly existing, and in good standing under the laws of its jurisdiction of incorporation or organization and has the organizational power and authority to execute and deliver, and to perform its obligations under, the Third-Party Hedge Agreement;

 

  

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(b)           the execution and delivery of the Third-Party Hedge Agreement by the Third-Party Counterparty, and any other agreement which the Third-Party Counterparty has executed and delivered pursuant thereto, and the performance of its obligations thereunder have been and remain duly authorized by all necessary action and do not contravene any provision of its certificate of incorporation or by-laws (or equivalent organizational documents) or any law, regulation or contractual restriction binding on or affecting it or its property;

 

(c)           all consents, authorizations and approvals required for the execution and delivery by the Third-Party Counterparty of the Third-Party Hedge Agreement, and any other agreement which the Third-Party Counterparty has executed and delivered pursuant thereto, and the performance of its obligations thereunder have been obtained and remain in full force and effect, all conditions thereof have been duly complied with, and no other action by, and no notice to or filing with any governmental authority or regulatory body is required for such execution, delivery or performance; and

 

(d)           the Third-Party Hedge Agreement, and any other agreement which the Third-Party Counterparty has executed and delivered pursuant thereto, has been duly executed and delivered by the Third-Party Counterparty and constitutes the legal, valid and binding obligation of the Third-Party Counterparty, enforceable against the Third-Party Counterparty in accordance with its terms, subject to applicable bankruptcy, insolvency and similar laws affecting creditors’ rights generally, and subject, as to enforceability, to general principles of equity (regardless of whether enforcement is sought in a proceeding in equity or at law).

 

(7)           For so long as a Hedge Agreement is in effect, Administrative Agent may elect to cause advances of the Loan proceeds available for interest payments to be used to make “regular” payments due under the Hedge Agreement (i.e., other than those payments which are due upon the termination of such Hedge Agreement), in addition to interest payments on the Loans.

 

Section 9.16Reserves.  Administrative Agent may at any time after the occurrence of an Event of Default, at its option (or at the direction of the Majority Lenders), to be exercised by written notice to Lead Borrower, require the deposit by Borrower, on each Payment Date, of additional amounts sufficient to discharge when due the obligations of Borrower under Section 9.3 and Section 3.1 (if applicable, and excluding all income, franchise, single business or other taxes imposed on Borrower unless the same is in lieu of real estate taxes) when they become due.  Simultaneously with the initial deposit under this Section 9.16, Borrower shall deposit with Administrative Agent an amount determined by Administrative Agent to be necessary to ensure that there will be on deposit with Administrative Agent an amount which, when added to the monthly payments subsequently required to be deposited with Administrative Agent hereunder on account of Real Estate Taxes, insurance premiums, will result in there being on deposit with Administrative Agent an amount sufficient to pay the next due periodic installment of Real Estate Taxes, insurance premiums one (1) month prior to the delinquency date thereof and the next periodic payments of insurance premiums one (1) month prior to the due date thereof.  Commencing on the first Business Day of the first calendar month after the occurrence of an Event of Default and continuing thereafter on the first Business Day of each month thereafter, Borrower shall pay to Administrative Agent deposits in an amount equal to one-twelfth (1/12) of the yearly amount of Real Estate Taxes, insurance premiums that will next become due and payable on the Project.  The determination of the amount to be deposited with Administrative Agent with each installment shall be made by Administrative Agent in its reasonable discretion.  Such amounts shall be held by Administrative Agent in an account under the sole dominion and control of Administrative Agent and applied (together with any interest earned thereon) to the payment of the obligations in respect to which such amounts were deposited or, at the option of the Administrative Agent, to the payment of said obligations in such order of priority as Administrative Agent shall determine, on or before the respective dates on which the same or any of them would become delinquent.  If one (1) month prior to the due date of any of the aforementioned obligations the amounts then on deposit therefor shall be insufficient for the payment of such obligations in full, Borrower, within five (5) days after demand, shall deposit the amount of the deficiency with Administrative Agent.  Nothing herein contained shall be deemed to affect any right or remedy of Administrative Agent and/or the Lenders under the provisions of this Agreement or the other Loans Documents or of any statute or rule of law to pay any such amount and to add the amount so paid together with interest at the Default Rate to the indebtedness secured by the Mortgages.  Borrower hereby pledges to Administrative Agent (on behalf of the Lenders) and grants to Administrative Agent (on behalf of the Lenders) a security interest in any and all monies now or hereafter deposited in such reserves and the account established by Administrative Agent as additional security for the payment of the Loans and agrees to enter into an agreement with Administrative Agent and the bank where such account is established in order to perfect Administrative Agent’s security interest therein.  In making any payment from such reserves, Administrative Agent may do so according to any bill, statement or estimate or procured from the appropriate public office (with respect to Real Estate Taxes), insurer or agent (with respect to insurance premiums), without inquiry into the accuracy of such bill, statement or estimate or into the validity of any such charge.

 

  

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Section 9.17Handicapped Access.

 

(1)           Borrower (a) agrees that it shall use commercially reasonable efforts to ensure that the Project shall at all times comply with the applicable requirements of the Americans with Disabilities Act of 1990, the Fair Housing Amendments Act of 1988, all state and local laws and ordinances related to handicapped access and all rules, regulations, and orders issued pursuant thereto including, without limitation, the Americans with Disabilities Act Accessibility Guidelines for Buildings and Facilities (collectively, “Access Laws”) and (b) has no actual knowledge as to the Project’s non-compliance with any Access Laws where the failure to so comply could have a material adverse effect on the Project or on Borrower’s ability to repay the Loans in accordance with the terms hereof.

 

(2)           Notwithstanding any provisions set forth herein or in any other document regarding Administrative Agent’s approval of alterations of the Project, Borrower shall not alter the Project in any manner which would materially increase Borrower’s responsibilities for compliance with the applicable Access Laws without the prior written approval of Administrative Agent.  The foregoing shall apply to tenant improvements constructed by Borrower or by any of its tenants.  Administrative Agent may condition any such approval upon receipt of a certificate of Access Law compliance from an architect, engineer, or other person reasonably acceptable to Administrative Agent.

 

(3)           Lead Borrower agrees to give prompt notice to Administrative Agent of the receipt by Borrower of any written complaints related to violation of any Access Laws with respect to the Project and of the commencement of any proceedings or investigations which relate to compliance with applicable Access Laws.

 

  

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Section 9.18Zoning.  Borrower shall not, without Administrative Agent’s prior consent, such consent not to be unreasonably withheld, seek, make, suffer, consent to or acquiesce in any change or variance in any zoning or land use laws or other conditions of use of the Project or any portion thereof.  Borrower shall not use or permit the use of any portion of the Project in any manner that could result in such use becoming a non-conforming use under any zoning or land use law or any other applicable law or modify any agreements relating to zoning or land use matters or with the joinder or merger of lots for zoning, land use or other purposes, without the prior written consent of Administrative Agent.  Without limiting the foregoing, in no event shall Borrower take any action that would reduce or impair either (a) the number of parking spaces at the Improvements or (b) access to the Project from adjacent public roads.  Further, without Administrative Agent’s prior written consent, such consent not to be unreasonably withheld, Borrower shall not file or subject any part of the Project to any declaration of condominium or co-operative or convert any part of the Project to a condominium, co-operative or other direct or indirect form of multiple ownership and governance.

 

Section 9.19ERISA.  Borrower shall not hire any employees, and shall obtain all workforce services required for the ownership, operation, construction or development of the Project by contracting therefor pursuant to the Construction Management Agreement and the Project Documents.  Borrower shall not take any action, or omit to take any action, which would (a) cause Borrower’s assets to constitute “plan assets” for purposes of ERISA or the Internal Revenue Code or (b) cause the transactions contemplated by this Agreement and the other Loan Documents to be nonexempt prohibited transactions (as such term is defined in Section 4975 of the Internal Revenue Code or Section 406 of ERISA) that could subject Administrative Agent and/or the Lenders, on account of any Loan or execution of the Loan Documents hereunder, to any tax or penalty on prohibited transactions imposed under Section 4975 of the Internal Revenue Code or Section 502(i) of ERISA.

 

Section 9.20Books and Records.  Borrower will, and will cause each of the other Borrower Parties to, keep proper books of record and account in which full, true and correct entries are made of all dealings and transactions in relation to its business and activities.  Borrower will, and will cause each of the other Borrower Parties to, permit any representatives designated by Administrative Agent or any Lender, upon reasonable prior notice, to visit and inspect its properties, to examine and make extracts from its books and records, and to discuss its affairs, finances and condition with its officers and independent accountants, all at such reasonable times and as often as reasonably requested.

 

  

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Section 9.21Foreign Assets Control Regulations.

 

(1)           Neither Borrower nor any Borrower Party shall use the proceeds of the Loan in any manner that will violate the Trading with the Enemy Act, as amended, or any of the foreign assets control regulations of the United States Treasury Department (31 CFR, Subtitle B, Chapter V, as amended) , Executive Order No. 13,224,66 Fed. Reg. 49,079 (2001), issued by the President of the United States of America (Executive Order Blocking Property and Prohibiting Transactions with Persons Who Commit, Threaten to Commit, or Support Terrorism), or any enabling legislation or executive order relating to any of the same.  Without limiting the foregoing, neither Borrower, nor any Borrower Party, nor any partner or member (or other direct or indirect principal) in a Borrower Party will permit itself nor any of its Subsidiaries to (a) become a blocked person described in Section 1 of the above referenced Executive Order or (b) knowingly engage in any dealings or transactions or be otherwise associated with any person who is known by such Borrower Party or who (after such inquiry as may be required by Applicable Law) should be known by such Borrower Party to be a blocked person.

 

(2)           Each partner or member (or other direct or indirect principal) in Borrower shall be at all times during the term of the Loans an entity or person which is (and whose principals shall be) a reputable entity or person of good character and in good standing as reasonably determined by the Lenders, and is not adverse to any of the Lenders in any pending material litigation or arbitration in which any Lender is also a party.

 

Section 9.22Performance of Project Documents and Easements.

 

(1)           Borrower shall (a) perform and observe in all material respects all of its covenants and agreements contained in each of the Project Documents to which it is a party, (b) take all reasonable and necessary action to prevent the termination of any such Project Document in accordance with the terms thereof or otherwise, (c) enforce each material covenant or obligation of each such Project Document in accordance with its terms, (d) cause Lead Borrower to promptly give Administrative Agent copies of any material default or other material notices given by or on behalf of Borrower received by or on behalf of Borrower from any other Person under the Project Documents and (e) take all such action to achieve the purposes described in clauses (a), (b) and (c) of this Section 9.22 as may from time to time be reasonably requested by Administrative Agent; provided, however, that Borrower shall be permitted, upon Administrative Agent’s reasonable approval, to contest the validity or applicability of any requirement under the Project Documents.

 

(2)           Borrower will comply in all material respects with all restrictive covenants and easements affecting the Project (unless the Title Company has insured against the enforcement of same in the Title Policy).  All covenants, easements, cross easements or operating agreements which may hereafter be acquired, entered into or amended by Borrower affecting the Project shall be submitted to Administrative Agent for reasonable approval prior to the execution thereof by Borrower, accompanied by a drawing or survey showing the location thereof.

 

  

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Section 9.23Operating Plan and Budget.

 

(1)           Lead Borrower shall, no less than sixty (60) days after the satisfaction of the Project Work Substantial Completion Conditions, and then annually thereafter not later than November 15th of the previous calendar year, submit to Administrative Agent for Administrative Agent’s written approval an annual operating and capital budget (each an “Annual Budget”), in form reasonably satisfactory to Administrative Agent setting forth in detail budgeted monthly Operating Revenues and monthly Operating Expenses and projected capital expenditures for the Project.  Administrative Agent shall have the right to reasonably approve such Annual Budget (such approval to be in the Administration Agent’s sole discretion during an Event of Default and any period where Administrative Agent is taking action to remove the Property Manager).  If Administrative Agent objects to the proposed Annual Budget, Administrative Agent shall advise Lead Borrower of such objections within fifteen (15) days after receipt thereof (and deliver to Lead Borrower a reasonably detailed description of such objections) and Lead Borrower shall within five (5) days after receipt of notice of any such objections revise such Annual Budget and resubmit the same to Administrative Agent such procedure to be repeated until such time as Administrative Agent shall approve such Annual Budget.  Each such Annual Budget approved by Administrative Agent in accordance with terms hereof is referred to herein as an “Approved Annual Budget.”  Until such time that Administrative Agent has approved a proposed Annual Budget, the most recently Approved Annual Budget shall apply, provided that such Approved Annual Budget shall be adjusted to reflect actual increases in real estate taxes, insurance premiums and utilities expenses and shall otherwise be adjusted to reflect any change during the preceding year in the Consumer Price Index.

 

(2)           Lead Borrower may at any time propose an amendment to an Approved Annual Budget for the remainder of the then current calendar year, and, when approved as provided below, such amended Approved Annual Budget shall be deemed to be and shall be effective as the Approved Annual Budget for such calendar year.  Prior to making any expenditures not reflected in the then current Approved Annual Budget in excess of an aggregate amount of $150,000 per annum, Lead Borrower shall propose an amendment to the Approved Annual Budget to Administrative Agent for its reasonable approval; provided, however, that Administrative Agent shall have no approval rights with respect to increases in non-discretionary items (e.g. real estate taxes and insurance premiums).  Copies of any such proposed amended Approved Annual Budget shall be furnished at least fifteen (15) days before final adoption thereof to Administrative Agent for its approval.  Administrative Agent shall have fifteen (15) days after receipt of any proposed amendment to the Approved Annual Budget to approve or disapprove such proposed amendment.

 

Section 9.24Proceedings to Enjoin or Prevent Construction.  If any proceedings are filed seeking to enjoin or otherwise prevent or declare invalid or unlawful all or any part of the Construction Work, Borrower, at its sole cost and expense, will cause such proceedings to be contested in a commercially reasonable manner, and in the event of an adverse ruling or decision, if commercially reasonable, 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.

 

  

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Section 9.25Industrial and Commercial Incentive Program    

 

(1)           On or before the Closing Date, Borrower shall deliver to Administrative Agent the preliminary application submitted to the New York City Department of Finance (“Department of Finance”) evidencing the Project’s eligibility for the partial tax exemption in accordance with paragraph 24 of Schedule 4-Part A.

 

(2)           Pursuant to Title 11, Chapter 2, Part 4 of the Administrative Code of the City of New York City and the regulations promulgated thereunder, as amended from time to time (“Code”), Borrower shall make a thorough and complete final application to the Department of Finance for a certificate of eligibility for a partial exemption of real property taxes for the Improvements for a twenty-five (25) year period (“ICIP Tax Exemption”) subsequent to commencing construction on the Project.  Borrower shall provide a copy of the said application to Administrative Agent evidencing that same was received by the Department of Finance.

 

(3)           Pursuant to the Code, Borrower shall submit a thorough and complete final construction report within sixty (60) days of completing construction on the Project to the Department of Finance for a certificate of eligibility for the ICIP Tax Exemption.  Borrower shall provide a copy of the certificate of eligibility, or if unavailable, a letter from the Department of Finance evidencing same, to Administrative Agent promptly upon Borrower’s receipt thereof and in any event no later than sixty (60) days after the submission of such application, or such later date to the extent that the Borrower’s failure to receive such certificate is due to Unavoidable Delay.

 

(4)           Before, during and after the construction of the Improvements, Borrower shall do all things necessary and required by statute, rule and regulation to maintain the availability of the ICIP Tax Exemption, including, but not limited to the following: (i) notify the ICIP unit of the Department of Finance (“ICIP Unit”) and the New York City  Department of Small Business Services/Division of Labor Services (“Division of Labor Services”) in writing fifteen (15) business days prior to commencing construction on the Project; (ii) submit construction employment reports for the Project to the Division of Labor Services; and, if requested by the Department of Finance, file a certificate of continuing use with the ICIP Unit annually in each year of benefit period.

 

(5)           Notwithstanding anything to the contrary in this Agreement, Borrower’s failure to obtain a certificate of eligibility for a ICIP Tax Exemption pursuant to clauses (2) and (3) above shall not constitute a default provided that (a) Borrower has otherwise complied with the provisions of this Section 9.25, (b) is diligently proceeding to obtain such certificate and (iii) the only cause for Borrower’s inability to obtain the applicable certificate is the Department of Finance’s bureaucratic delay in issuing the applicable certificate and not for reasons related to Borrower’s actions or eligibility.

 

Section 9.26Reserved.

 

Section 9.27Reserved.

 

  

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Section 9.28Reimbursement of Expenses.  Borrower shall pay or reimburse Administrative Agent and/or the Lenders on demand of the applicable party for:  (1) all reasonable expenses incurred by Administrative Agent in connection with the Loans, including reasonable fees and expenses of Administrative Agent’s attorneys, environmental, engineering and other consultants, and fees, charges or taxes for the negotiation, recording or filing of Loan Documents, (2) all reasonable out-of-pocket expenses of Administrative Agent in connection with the administration of the Loans, including audit costs, inspection fees, reasonable attorneys’ fees and disbursement, settlement of condemnation and casualty awards, and premiums for title insurance and endorsements thereto, (3) all of Administrative Agent’s reasonable costs and expenses (including reasonable fees and disbursements of Administrative Agent’s external counsel) incurred in connection with the syndication of the Loans to the Lenders, not to exceed $25,000 (excluding attorney’s fees and internal expenses incurred by the Borrower), and (4) Administrative Agent and the Lenders for all amounts expended, advanced or incurred by Administrative Agent and the Lenders to collect the Notes, or to enforce the rights of Administrative Agent and the Lenders under this Agreement or any other Loan Document, or to defend or assert the rights and claims of Administrative Agent and the Lenders under the Loan Documents or with respect to the Project (by litigation or other proceedings), which amounts will include all court costs, attorneys’ fees and expenses, fees of auditors and accountants, and investigation expenses as may be incurred by Administrative Agent and the Lenders in connection with any such matters (whether or not litigation is instituted), together with interest at the Default Rate on each such amount from the date of disbursement until the date of reimbursement to Administrative Agent and the Lenders, all of which shall constitute part of the Loans and shall be secured by the Loan Documents.

 

ARTICLE 10

 

EVENTS OF DEFAULT

 

Each of the following shall constitute an Event of Default under the Loans:

 

Section 10.1Payments.  Borrower’s failure to (i) pay any regularly scheduled installment of principal, interest, the Agency Fee or other amount due under the Loan Documents or (ii) make a deposit of cash, and/or deliver a Collateral Letter of Credit required under the Loan Documents, within five (5) days of (and including) the date when due, or Borrower’s failure to pay the Loans at the Maturity Date, whether by acceleration or otherwise.

 

Section 10.2Insurance.  Borrower’s failure to maintain insurance as required under Section 3.1 of this Agreement.

 

Section 10.3Single Purpose Entity.  If Borrower or any Borrower Party materially breaches its covenant under Section 9.6 with respect to its status as a Single Purpose Entity.

 

Section 10.4Real Estate Taxes.  If any of the Real Estate Taxes are not paid when the same are due and payable and such failure continues for ten (10) Business days after Borrower has actual knowledge of such failure.

 

Section 10.5Sale, Encumbrance, Etc.  The sale, transfer, conveyance, pledge, mortgage or assignment of any part or all of the Project, or any interest therein, or of any interest in Borrower, in violation of Section 9.1 of this Agreement.

 

  

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Section 10.6Representations and Warranties.  Any representation or warranty made in any Loan Document proves to be untrue in any material respect when made or deemed made.

 

Section 10.7Other Encumbrances.  Any material default under any document or instrument, other than the Loan Documents, evidencing or creating a Lien on the Project or any part thereof that is not cured within any applicable notice or cure period.

 

Section 10.8Various Covenants.  Borrower defaults under any of its obligations under Section 6.2 (pertaining to lease approvals), 9.7 (transactions with Affiliates), 9.8 (limitations on debt), 9.18 (zoning and use changes) or 9.19 (ERISA), of this Agreement.

 

Section 10.9Reserved.

 

Section 10.10Financial Covenants.  Borrower defaults under any of its obligations under Section 9.12 and Section 9.28 of this Agreement.

 

Section 10.11Involuntary Bankruptcy or Other Proceeding.  Commencement of an involuntary case or other proceeding against any Borrower Party which seeks liquidation, reorganization or other relief with respect to it or its debts or other liabilities under any bankruptcy, insolvency or other similar law now or hereafter in effect or seeks the appointment of a trustee, receiver, liquidator, custodian or other similar official of it or any of its property, and such involuntary case or other proceeding shall remain undismissed or unstayed for a period of sixty (60) days; or an order for relief against a Borrower Party shall be entered in any such case under the Federal Bankruptcy Code.

 

Section 10.12Voluntary Petitions, Etc.  Commencement by a Borrower Party of a voluntary case or other proceeding seeking liquidation, reorganization or other relief with respect to itself or its Debts or other liabilities under any bankruptcy, insolvency or other similar law or seeking the appointment of a trustee, receiver, liquidator, custodian or other similar official for it or any of its property, or consent by a Borrower Party to any such relief or to the appointment of or taking possession by any such official in an involuntary case or other proceeding commenced against it, or the making by a Borrower Party of a general assignment for the benefit of creditors, or the failure by a Borrower Party, or the admission by a Borrower Party in writing of its inability, to pay its debts generally as they become due, or any action by a Borrower Party to authorize or effect any of the foregoing.

 

Section 10.13Debt.  The occurrence, at any time prior to Substantial Completion, of any “Event of Default” under (and as such term is defined in) the loan agreement included within the Approved Mezzanine Loan Documents; or Borrower or Managing Member shall default in the payment when due of any principal of or interest on any of its other Debt aggregating $1,000,000 or more and such default shall not be cured within any applicable notice or cure period provided with respect to such Debt; or any event specified in any note, agreement, indenture or other document evidencing or relating to any such Debt shall occur if the effect of such event is to cause, or (with the giving of any notice or the lapse of time or both) to permit the holder or holders of such Debt to cause, such Debt to become due, or to be prepaid in full (whether by redemption, purchase, offer to purchase or otherwise); prior to its stated maturity.

 

  

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Section 10.14Dissolution.  Any of Borrower Parties shall be terminated, dissolved or liquidated (as a matter of law or otherwise) or proceedings shall be commenced by any Person (including any Borrower Party) seeking the termination, dissolution or liquidation of any Borrower Party, which, in the case of actions by Persons other than a Borrower Party or any of their Affiliates, shall continue unstayed and in effect for a period of sixty (60) or more days.

 

Section 10.15Judgments.  One or more (i) judgments for the payment of money (exclusive of judgment amounts fully covered by insurance where the insurer has admitted liability in respect of such judgment) aggregating with respect to any Borrower Party (other than Guarantor) in excess of $1,000,000 shall be rendered against such party or (ii) non-monetary judgments, orders or decrees shall be entered against any of the Borrower Parties which have or would reasonably be expected to have a Material Adverse Effect, and, in either case, the same shall remain undischarged for a period of thirty (30) consecutive days during which execution shall not be effectively stayed, or any action shall be legally taken by a judgment creditor to attach or levy upon any assets of such Borrower Party to enforce any such judgment.

 

Section 10.16Security.  The Liens created by the Security Documents shall at any time not constitute a valid and perfected first priority Lien (subject to the Permitted Encumbrances) on the collateral intended to be covered thereby in favor of Administrative Agent, free and clear of all other Liens (other than the Permitted Encumbrances), or, except for expiration in accordance with its terms, any of the Security Documents shall for whatever reason be terminated or cease to be in full force and effect, or the enforceability thereof shall be contested by any Borrower Party or any of their Affiliates, provided that, as long as the security provided by the Security Documents shall not be impaired, with respect to a Lien (other than a Permitted Encumbrance) on the collateral, Borrower shall have ten (10) days for monetary Liens and thirty (30) days for all non-monetary Liens within which provide Administrative Agent with evidence that such Lien has been bonded or otherwise removed of record.

 

Section 10.17Guarantor Documents.  Guarantor shall (i) default under any Guarantor Document beyond any applicable notice and grace period; or (ii) revoke or attempt to revoke, contest or commence any action against its obligations under any Guarantor Document.

 

Section 10.18Reserves.  Borrower uses, or permits the use of, funds from any reserves or from any Controlled Account required under this Agreement for any purpose other than the purpose for which such funds were disbursed from such reserves or such Controlled Account and such default is not cured within ten (10) days of Borrower’s knowledge of such default.

 

Section 10.19Co-Borrower Documents.  Either Borrower shall (i) default under any Co-Borrower Document beyond any applicable notice and grace period; or (ii) revoke or attempt to revoke, contest or commence any action against its obligations under any Co-Borrower Document.

 

  

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Section 10.20Covenants.  Borrower’s failure to perform or observe any of the agreements and covenants contained in this Agreement or in any of the other Loan Documents and not specified above, and, if such failure is susceptible to being cured, the continuance of such failure for thirty (30) days after notice by Administrative Agent to Lead Borrower; provided, however, subject to any shorter period for curing any failure by Borrower as specified in any of the other Loan Documents, Borrower shall have an additional ninety (90) days to cure such failure if (1) such failure does not involve the failure to make payments on a monetary obligation; (2) such failure cannot reasonably be cured within thirty (30) days; (3) Borrower is diligently undertaking to cure such default, and (4) Borrower has provided Administrative Agent with security reasonably satisfactory to Administrative Agent against any reasonably anticipated interruption of payment or impairment of collateral as a result of such continuing failure.

 

Section 10.21Deficiency Deposits.  Borrower shall fail to make a Deficiency Deposit or Equity Balancing Contribution within the time and in the manner provided in Section 4.3.

 

Section 10.22Reserved.

 

Section 10.23Reserved.

 

Section 10.24Building Loan Agreement Default.  An Event of Default shall occur under the Building Loan Agreement.

 

 

ARTICLE 11

 

REMEDIES

 

Section 11.1Remedies – Insolvency Events.  Upon the occurrence of any Event of Default described in Section 10.11 or Section 10.12, the obligations of the Lenders to advance amounts hereunder shall immediately terminate, and all amounts due under the Loan Documents immediately shall become due and payable, all without written notice and without presentment, demand, protest, notice of protest or dishonor, notice of intent to accelerate the maturity thereof, notice of acceleration of the maturity thereof, or any other notice of default of any kind, all of which are hereby expressly waived by Borrower; provided, however, if Borrower Party under Section 10.11 or Section 10.12 is other than Borrower, then all amounts due under the Loan Documents shall become immediately due and payable at Administrative Agent’s election.

 

Section 11.2Remedies – Other Events.  Except as set forth in Section 11.1 above, while any Event of Default exists, Administrative Agent may (1) by written notice to Lead Borrower, declare the entire amount of the Loans to be immediately due and payable without presentment, demand, protest, notice of protest or dishonor, notice of intent to accelerate the maturity thereof, notice of acceleration of the maturity thereof, or other notice of default of any kind, all of which are hereby expressly waived by Borrower, (2) terminate the obligation, if any, of the Lenders to advance amounts hereunder, and (3) exercise all rights and remedies therefor under the Loan Documents and at law or in equity.

 

  

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Section 11.3Administrative Agent’s Right to Perform the Obligations.  Without limiting the provisions of Section 11.4 below, if Borrower shall fail, refuse or neglect to make any payment or perform any act required by the Loan Documents, then while any Event of Default exists, and without notice to or demand upon Borrower and without waiving or releasing any other right, remedy or recourse Administrative Agent or any Lender may have because of such Event of Default, Administrative Agent may (but shall not be obligated to) make such payment or perform such act for the account of and at the expense of Borrower, and shall have the right to enter upon the Project for such purpose and to take all such action thereon and with respect to the Project and the other collateral for the Loans as it may deem necessary or appropriate.  If Administrative Agent shall elect to pay any sum due with reference to the Project, Administrative Agent may do so in reliance on any bill, statement or assessment procured from the appropriate Governmental Authority or other issuer thereof without inquiring into the accuracy or validity thereof.  Similarly, in making any payments to protect the security intended to be created by the Loan Documents, Administrative Agent shall not be bound to inquire into the validity of any apparent or threatened adverse title, Lien, encumbrance, claim or charge before making an advance for the purpose of preventing or removing the same.  Additionally, if any Hazardous Materials affect or threaten to affect the Project, Administrative Agent may (but shall not be obligated to) give such notices and take such actions as it deems necessary or advisable in order to abate the discharge of any Hazardous Materials or remove the Hazardous Materials.  Borrower shall indemnify, defend and hold Administrative Agent and the Lenders harmless from and against any and all losses, liabilities, claims, damages, expenses, obligations, penalties, actions, judgments, suits, costs or disbursements of any kind or nature whatsoever, including reasonable attorneys’ fees and disbursements, incurred or accruing by reason of any acts performed by Administrative Agent or any Lender pursuant to the provisions of this Section 11.3, including those arising from the joint, concurrent, or comparative negligence of Administrative Agent and any Lender, except as a result of Administrative Agent’s or any Lender’s gross negligence or willful misconduct.  All sums paid by Administrative Agent pursuant to this Section 11.3, and all other sums expended by Administrative Agent or any Lender to which it shall be entitled to be indemnified, together with interest thereon at the Default Rate from the date of such payment or expenditure until paid, shall constitute additions to the Loans, shall be secured by the Loan Documents and shall be paid by Borrower to Administrative Agent upon demand.

 

Section 11.4Administrative Agent’s Right to Complete Construction.  Administrative Agent may take possession of the Project and complete the construction and equipping of the Improvements and do anything in its sole judgment to fulfill the obligations of Borrower hereunder, including either the right to avail itself of and procure performance of existing contracts or enter into any contracts with the same contractors or others and to employ watchmen to protect the Project from injury.  Without restricting the generality of the foregoing and for the purposes aforesaid, Borrower hereby appoints and constitutes Administrative Agent its lawful attorney-in-fact with full power of substitution in the Project to complete construction of the Improvements in the name of Borrower; to use unadvanced funds remaining under the Commitments 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 Notes (and all such amounts shall be payable by Borrower together with interest at the Default Rate), to complete the Improvements; to make changes in the Plans and Specifications which shall be necessary or desirable to complete the Improvements in substantially the manner contemplated by the Plans and Specifications; to retain or employ new construction managers, 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 Project and take any other steps relating to clearing title to the Project from any Liens that are not Permitted Encumbrances, or to avoid such bills and claims becoming Liens against the Project 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 Project 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 Improvements 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.

 

  

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Section 11.5Administrative Agent’s Rights under the Guaranty of Completion.  Exercise the Lenders’ rights under the Guaranty of Completion to require Guarantor to perform thereunder, in which case Borrower hereby (1) authorizes Administrative Agent and the Lenders to make advances of the Loans directly to Guarantor in accordance with the terms of the Guaranty of Completion and this Agreement and (2) agrees that Borrower shall be liable to the Lenders for all such advances to Guarantor and such advances shall be deemed Loans under this Agreement and be evidenced by the Notes and secured by the Mortgages and the other Security Documents.

 

Section 11.6NO OBLIGATION WITH RESPECT TO COMPLETION OF THE IMPROVEMENTS.  WHETHER OR NOT ADMINISTRATIVE AGENT OR THE LENDERS ELECT TO EMPLOY ANY OR ALL OF THE REMEDIES AVAILABLE UPON THE OCCURRENCE OF AN EVENT OF DEFAULT, NEITHER ADMINISTRATIVE AGENT NOR ANY OF THE LENDERS SHALL 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 ADMINISTRATIVE AGENT OR THE LENDERS OR FOR THE PERFORMANCE OR NON-PERFORMANCE OF ANY OTHER OBLIGATION OF BORROWER.

 

ARTICLE 12

 

MISCELLANEOUS

 

Section 12.1Notices.  Any notice required or permitted to be given under this Agreement shall be in writing and either shall be (a) mailed by certified mail, postage prepaid, return receipt requested, (b) sent by overnight air courier service, (c) personally delivered to a representative of the receiving party, or (d) sent by telecopy (provided an identical notice is also sent simultaneously by mail, overnight courier, or personal delivery as otherwise provided in this Section 12.1) to the intended recipient at the “Address for Notices” specified below its name on the signature pages hereof.  Any communication so addressed and mailed shall be deemed to be given on the earliest of (1) when actually delivered, (2) on the first Business Day after deposit with an overnight air courier service, or (3) on the third Business Day after deposit in the United States mail, postage prepaid, in each case to the address of the intended addressee, and any communication so delivered in person shall be deemed to be given when receipted for by, or actually received by Administrative Agent, a Lender, Lead Borrower or Borrower, as the case may be.  If given by telecopy, a notice shall be deemed given and received when the telecopy is transmitted to the party’s telecopy number specified above, and confirmation of complete receipt is received by the transmitting party during normal business hours or on the next Business Day if not confirmed during normal business hours, and an identical notice is also sent simultaneously by mail, overnight courier, or personal delivery as otherwise provided in this Section 12.1.  Any party may designate a change of address by written notice to each other party by giving at least ten (10) days’ prior written notice of such change of address.

 

  

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Section 12.2Amendments, Waivers, Etc..  This Agreement and any other Loan Document may be modified only by an instrument in writing signed by Borrower and Administrative Agent, subject to Section 14.9.

 

Section 12.3Compliance with Usury Laws.  It is the intention of the parties hereto to conform strictly to applicable usury laws.  Accordingly, all agreements between Borrower, Administrative Agent and the Lenders with respect to the Loans are hereby expressly limited so that in no event, whether by reason of acceleration of maturity or otherwise, shall the amount paid or agreed to be paid to Administrative Agent or any Lender or charged by any Lender for the use, forbearance or detention of the money to be lent hereunder or otherwise, exceed the maximum amount allowed by law.  If the Loans would be usurious under Applicable Law (including the laws of the State and the laws of the United States of America), then, notwithstanding anything to the contrary in the Loan Documents:  (1) the aggregate of all consideration which constitutes interest under Applicable Law that is contracted for, taken, reserved, charged or received under the Loan Documents shall under no circumstances exceed the maximum amount of interest allowed by Applicable Law, and any excess shall be credited on the Notes by the holders thereof (or, if the Notes have been paid in full, refunded to Borrower); and (2) if maturity is accelerated by reason of an election by Administrative Agent in accordance with the terms hereof, or in the event of any prepayment, then any consideration which constitutes interest may never include more than the maximum amount allowed by Applicable Law.  In such case, excess interest, if any, provided for in the Loan Documents or otherwise, to the extent permitted by Applicable Law, shall be amortized, prorated, allocated and spread from the date of advance until payment in full so that the actual rate of interest is uniform through the term hereof.  If such amortization, proration, allocation and spreading is not permitted under Applicable Law, then such excess interest shall be cancelled automatically as of the date of such acceleration or prepayment and, if theretofore paid, shall be credited on the Notes (or, if the Notes have been paid in full, refunded to Borrower).  The terms and provisions of this Section 12.3 shall control and supersede every other provision of the Loan Documents.  Except as otherwise expressly provided therein, the Loan Documents are contracts made under and shall be construed in accordance with and governed by the laws of the State of New York, except that if at any time the laws of the United States of America permit the Lenders to contract for, take, reserve, charge or receive a higher rate of interest than is allowed by the laws of the State of New York (whether such federal laws directly so provide or refer to the law of any state), then such federal laws shall to such extent govern as to the rate of interest which the Lenders may contract for, take, reserve, charge or receive under the Loan Documents.

 

Section 12.4Invalid Provisions.  If any provision of any Loan Document is held to be illegal, invalid or unenforceable, such provision shall be fully severable; the Loan Documents shall be construed and enforced as if such illegal, invalid or unenforceable provision had never comprised a part thereof; the remaining provisions thereof shall remain in full effect and shall not be affected by the illegal, invalid, or unenforceable provision or by its severance therefrom; and in lieu of such illegal, invalid or unenforceable provision there shall be added automatically as a part of such Loan Document a provision as similar in terms to such illegal, invalid or unenforceable provision as may be possible to be legal, valid and enforceable.

 

  

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Section 12.5Approvals; Third Parties; Conditions.  All approval rights retained or exercised by Administrative Agent and the Lenders with respect to leases, contracts, plans, studies and other matters are solely to facilitate the Lenders’ credit underwriting, and shall not be deemed or construed as a determination that the Lenders have passed on the adequacy thereof for any other purpose and may not be relied upon by Borrower or any other Person.  This Agreement is for the sole and exclusive use of Administrative Agent, the Lenders, the Lead Borrower and Borrower and may not be enforced, nor relied upon, by any Person other than Administrative Agent, the Lenders, the Lead Borrower and Borrower.  All conditions of the obligations of Administrative Agent and the Lenders hereunder, including the obligation to make advances, are imposed solely and exclusively for the benefit of Administrative Agent and the Lenders, their successors and assigns, and no other Person shall have standing to require satisfaction of such conditions or be entitled to assume that the Lenders will refuse to make advances in the absence of strict compliance with any or all of such conditions, and no other Person shall, under any circumstances, be deemed to be a beneficiary of such conditions, any and all of which may be freely waived in whole or in part by Administrative Agent and the Lenders at any time in their sole discretion.

 

Section 12.6Lenders and Administrative Agent Not in Control; No Partnership.  None of the covenants or other provisions contained in this Agreement shall, or shall be deemed to, give Administrative Agent or any Lender the right or power to exercise control over the affairs or management of Borrower, the powers of Administrative Agent and the Lenders being limited to the rights to exercise the remedies referred to in the Loan Documents.  The relationship between Borrower and the Lenders is, and at all times shall remain, solely that of debtor and creditor.  No covenant or provision of the Loan Documents is intended, nor shall it be deemed or construed, to create a partnership, joint venture, agency or common interest in profits or income between Administrative Agent, the Lenders, Lead Borrower and Borrower.  Administrative Agent and the Lenders neither undertake nor assume any responsibility or duty to Borrower or to any other person with respect to the Loans, the Project or the other collateral for the Loans, except as expressly provided in the Loan Documents.  Notwithstanding any other provision of the Loan Documents:  (1) neither Administrative Agent nor any Lender is, nor shall 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 Borrower Party or any of their respective stockholders, members, or partners, and neither Administrative Agent nor any Lender intends to ever assume such status; (2) no Lender or Administrative Agent shall in any event be liable for any Debts, expenses or losses incurred or sustained by Borrower or any Borrower Party; and (3) no Lender or Administrative Agent shall be deemed responsible for or a participant in any acts, omissions or decisions of Borrower or any Borrower Party or any of their respective stockholders, members, or partners.  Administrative Agent, the Lenders and Borrower disclaim any intention to create any partnership, joint venture, agency or common interest in profits or income between Administrative Agent, the Lenders and Borrower, or to create an equity in the Project or any other collateral for the Loan in Administrative Agent or any Lender, or any sharing of liabilities, losses, costs or expenses.

 

Section 12.7Time of the Essence.  Time is of the essence with respect to this Agreement.

 

  

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Section 12.8Successors and Assigns.  Subject to the provisions of Section 12.23, this Agreement shall be binding upon and inure to the benefit of Administrative Agent, the Lenders and Borrower and the respective successors and permitted assigns.

 

Section 12.9Renewal, Extension or Rearrangement.  All provisions of the Loan Documents shall apply with equal effect to each and all promissory notes and amendments thereof hereinafter executed which in whole or in part represent a renewal, extension, increase or rearrangement of the Loans.

 

Section 12.10Waivers.  No course of dealing on the part of Administrative Agent or any Lender, their officers, employees, consultants or agents, nor any failure or delay by Administrative Agent or any Lender with respect to exercising any right, power or privilege of Administrative Agent or any Lender under any of the Loan Documents, shall operate as a waiver thereof.

 

Section 12.11Cumulative Rights.  Rights and remedies of Administrative Agent and the Lenders under the Loan Documents shall be cumulative, and the exercise or partial exercise of any such right or remedy shall not preclude the exercise of any other right or remedy.

 

Section 12.12Singular and Plural.  Words used in this Agreement and the other Loan Documents in the singular, where the context so permits, shall be deemed to include the plural and vice versa.  The definitions of words in the singular in this Agreement and the other Loan Documents shall apply to such words when used in the plural where the context so permits and vice versa.

 

Section 12.13Phrases.  When used in this Agreement and the other Loan Documents, the phrase “including” shall mean “including, but not limited to,” the phrases “satisfactory to any Lender” or “satisfactory to Administrative Agent” shall mean in form and substance satisfactory to such Lender or Administrative Agent, as the case may be, in all respects, the phrases “with Lender’s consent,” “with Lender’s approval,” “with Administrative Agent’s consent” or “with Administrative Agent’s approval” shall mean such consent or approval at Lender’s or Administrative Agent’s, as the case may be, discretion, and the phrases “acceptable to Lender” or “acceptable to Administrative Agent” shall mean acceptable to Lender or Administrative Agent, as the case may be, at such party’s sole discretion.”

 

Section 12.14Exhibits and Schedules.  The exhibits and schedules attached to this Agreement are incorporated herein and shall be considered a part of this Agreement for the purposes stated herein.

 

Section 12.15Titles of Articles, Sections and Subsections.  All titles or headings to articles, sections, subsections or other divisions of this Agreement and the other Loan Documents or the exhibits hereto and thereto are only for the convenience of the parties and shall not be construed to have any effect or meaning with respect to the other content of such articles, sections, subsections or other divisions, such other content being controlling as to the agreement between the parties hereto.

 

Section 12.16Promotional Material.  Borrower authorizes Administrative Agent and each of the Lenders to issue press releases, advertisements and other promotional materials in connection with Administrative Agent’s or such Lender’s own promotional and marketing activities, and describing the Loans in general terms or in detail and Administrative Agent’s or such Lender’s participation in the Loans.  All references to Administrative Agent or any Lender contained in any press release, advertisement or promotional material issued by Borrower shall be approved in writing by Administrative Agent and such Lender in advance of issuance.

 

  

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Section 12.17Survival.  All of the representations, warranties, covenants, and indemnities of Borrower hereunder (including environmental matters under Article 5, the obligations under Sections 2.7(1), 2.7(5) 2.7(6)), and under the indemnification provisions of the other Loan Documents shall survive (a) the repayment in full of the Loans and the release of the Liens evidencing or securing the Loans, (b) the transfer (by sale, foreclosure, conveyance in lieu of foreclosure or otherwise) of any or all right, title and interest in and to the Project to any party, whether or not an Affiliate of Borrower and (c) in the case of any Lender that may assign any interest in its Commitment or Loans hereunder in accordance with the terms of this Agreement, the making of such assignment, notwithstanding that such assigning Lender may cease to be a “Lender” hereunder.

 

Section 12.18WAIVER OF JURY TRIAL.  BORROWER, ADMINISTRATIVE AGENT AND EACH LENDER HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE THE RIGHT TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED HEREON, ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENT (WHETHER VERBAL OR WRITTEN) OR ACTION OF EITHER PARTY OR ANY EXERCISE BY ANY PARTY OF THEIR RESPECTIVE RIGHTS UNDER THE LOAN DOCUMENTS OR IN ANY WAY RELATING TO THE LOANS OR THE PROJECT (INCLUDING, WITHOUT LIMITATION, ANY ACTION TO RESCIND OR CANCEL THIS AGREEMENT, AND ANY CLAIM OR DEFENSE ASSERTING THAT THIS AGREEMENT WAS FRAUDULENTLY INDUCED OR IS OTHERWISE VOID OR VOIDABLE).  THIS WAIVER IS A MATERIAL INDUCEMENT FOR ADMINISTRATIVE AGENT AND EACH LENDER TO ENTER THIS AGREEMENT.

 

Section 12.19Remedies of Borrower.  It is expressly understood and agreed that, notwithstanding any Applicable Law or any provision of this Agreement or the other Loan Documents to the contrary, the liability of Administrative Agent and each Lender (including their respective successors and assigns) and any recourse of Borrower against Administrative Agent and each Lender shall be limited solely and exclusively to their respective interests in the Loans and/or Commitments or the Project.  Without limiting the foregoing, in the event that a claim or adjudication is made that Administrative Agent, any of the Lenders, or their agents, acted unreasonably or unreasonably delayed acting in any case where by Applicable Law or under this Agreement or the other Loan Documents, Administrative Agent, any Lender or any such agent, as the case may be, has an obligation to act reasonably or promptly, or otherwise violated this Agreement or the Loan Documents, Borrower agrees that none of Administrative Agent, the Lenders or their agents shall be liable for any incidental, indirect, special, punitive, consequential or speculative damages or losses resulting from such failure to act reasonably or promptly in accordance with this Agreement or the other Loan Documents.

 

  

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Section 12.20Governing Law.  This Agreement, the notes and the other Loan Documents shall be governed by, and construed in accordance with the law of the State of New York, except to the extent otherwise specified in any of the Loan Documents.

 

THIS AGREEMENT WAS NEGOTIATED IN THE STATE OF NEW YORK, AND MADE BY ADMINISTRATIVE AGENT AND LENDERS AND ACCEPTED BY BORROWER IN THE STATE OF NEW YORK, AND THE PROCEEDS OF THE NOTES DELIVERED PURSUANT HERETO SHALL BE 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, WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, 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 AND ANY APPLICABLE LAW OF THE UNITED STATES OF AMERICA, EXCEPT THAT AT ALL TIMES THE PROVISIONS FOR THE CREATION, PERFECTION, AND ENFORCEMENT OF THE LIENS AND SECURITY INTERESTS CREATED PURSUANT HERETO AND PURSUANT TO THE OTHER LOAN DOCUMENTS SHALL BE GOVERNED BY AND CONSTRUED ACCORDING TO THE LAW OF THE STATE IN WHICH THE PROJECT IS LOCATED, IT BEING UNDERSTOOD THAT, TO THE FULLEST EXTENT PERMITTED BY THE LAW OF SUCH STATE, THE LAW OF THE STATE OF NEW YORK SHALL GOVERN THE CONSTRUCTION, VALIDITY AND ENFORCEABILITY OF ALL LOAN DOCUMENTS AND ALL OF THE OBLIGATIONS ARISING HEREUNDER OR THEREUNDER.  TO THE FULLEST EXTENT PERMITTED BY LAW, EACH OF BORROWER, ADMINISTRATIVE AGENT AND EACH LENDER HEREBY UNCONDITIONALLY AND IRREVOCABLY WAIVES ANY CLAIM TO ASSERT THAT THE LAW OF ANY OTHER JURISDICTION GOVERNS THIS AGREEMENT AND THE NOTES, AND THIS AGREEMENT AND THE NOTES SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK PURSUANT TO SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW.

 

ANY LEGAL SUIT, ACTION OR PROCEEDING AGAINST ADMINISTRATIVE AGENT, ANY LENDER OR BORROWER ARISING OUT OF OR RELATING TO THE LOAN DOCUMENTS MAY AT ADMINISTRATIVE AGENT’S OPTION (WHICH DECISION SHALL BE MADE BY THE MAJORITY LENDERS) BE INSTITUTED IN ANY FEDERAL OR STATE COURT IN THE CITY OF NEW YORK, COUNTY OF NEW YORK, PURSUANT TO SECTION 5-1401 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 JURISDICTION OF ANY SUCH COURT IN ANY SUIT, ACTION OR PROCEEDING.  BORROWER DOES HEREBY DESIGNATE AND APPOINT NATIONAL REGISTERED AGENTS, INC., 875 AVENUE OF THE AMERICAS, SUITE 501, NEW YORK, NY 10001 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 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.  BORROWER (A) SHALL GIVE PROMPT NOTICE TO ADMINISTRATIVE AGENT OF ANY CHANGED ADDRESS OF ITS AUTHORIZED AGENT HEREUNDER, (B) 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 SERVICE OF PROCESS), AND (C) 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.]

 

  

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Section 12.21Entire Agreement.  This Agreement and the other Loan Documents embody the entire agreement and understanding between Administrative Agent, the Lenders and Borrower and supersede all prior agreements and understandings between such parties relating to the subject matter hereof and thereof.  Accordingly, the Loan Documents may not be contradicted by evidence of prior, contemporaneous, or subsequent oral agreements of the parties.  There are no unwritten oral agreements between the parties.  If any conflict or inconsistency exists between any term sheet, application or commitment letter and this Agreement or any of the other Loan Documents, the terms of this Agreement shall control.

 

Section 12.22Counterparts.  This Agreement may be executed in multiple counterparts, each of which shall constitute an original, but all of which shall constitute one document.

 

Section 12.23Assignments and Participations.

 

(1)           Assignments by the Lenders.  Each Lender may assign any of its Loans, its Note and its Commitment (but only with the consent of Administrative Agent); provided that:

 

(a)           no such consent by Administrative Agent shall be required in the case of any assignment by any Lender to another Lender or an Affiliate of such Lender or such other Lender(provided that in the case of an assignment to any such Affiliate, the assigning Lender will not be released from its obligations under the Loan Documents and the Administrative Agent may continue to deal only with such assigning Lender);

 

(b)           except to the extent Administrative Agent shall otherwise consent, any such partial assignment (other than to another Lender or an Affiliate of a Lender) shall be in an amount at least equal to $10,000,000;

 

(c)           each such assignment (including an assignment to another Lender or an Affiliate of a Lender) by a Lender of its Loans or Commitment shall be made in such manner so that the same portion of its Loans and Commitment is assigned to the respective assignee;

 

  

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(d)           subject to the applicable Lender’s compliance with the provisions of clauses (b) and (c) above, no consent by Borrower shall be required and Administrative Agent’s consent shall not be unreasonably withheld, delayed or conditioned if such assignment is made to an Eligible Assignee, and the provisions of clause (e) have been satisfied; and

 

(e)           upon execution and delivery by the assignee (even if already a Lender) to Borrower and Administrative Agent of an Assignment and Assumption pursuant to which such assignee agrees to become a “Lender” hereunder (if not already a Lender) having the Commitment and Loans specified in such instrument, and upon consent thereto by Administrative Agent to the extent required above, the assignee shall have, to the extent of such assignment (unless otherwise consented to by Administrative Agent), the obligations, rights and benefits of a Lender hereunder holding the Commitment and Loans (or portions thereof) assigned to it (in addition to the Commitment and Loans, if any, theretofore held by such assignee) and the assigning Lender shall, to the extent of such assignment, be released from the Commitment (or portion thereof) so assigned.  Upon each such assignment the assigning Lender shall pay Administrative Agent a processing and recording fee of $3,500 and the reasonable fees and disbursements of Administrative Agent’s counsel incurred in connection therewith.

 

(2)           Approval by Borrower.  In the event Borrower’s consent to an assignment is required under Section 12.23(1), such consent shall not be unreasonably withheld, and shall be granted or denied in writing delivered to Administrative Agent within five (5) Business Days from the date of Administrative Agent’s or a Lender’s request therefor.  If Administrative Agent does not receive such consent or a denial of such consent in writing within said five (5) Business Days following delivery of a request for such consent, Borrower’s consent shall be deemed to have been granted.  In the event Borrower withholds its consent, Lead Borrower shall, concurrently with Borrower’s written disapproval, provide written notice to Administrative Agent and such Lender of the reasons for Borrower’s disapproval.

 

(3)           Participations.

 

(a)           A Lender may sell to one or more other Persons (each a “Participant”) a participation in all or any part of any Loans held by it, or in its Commitment, provided (A) such Lender’s obligations under this Agreement and the other Loan Documents shall remain unchanged, (B) such Lender shall remain solely responsible to the other parties hereto for the performance of such obligations and (C) Borrower, Administrative Agent and the other Lenders shall continue to deal solely and directly with such Lender in connection with such Lender’s rights and obligations under this Agreement and the other Loan Documents.  In no event shall a Lender that sells a participation agree with the Participant to take or refrain from taking any action hereunder or under any other Loan Document except that such Lender may agree with the Participant that it will not, without the consent of the Participant, agree to (i) increase or extend the term of such Lender’s Commitment, (ii) extend the date fixed for the payment of principal of or interest on the related Loan or Loans or any portion of any fee hereunder payable to the Participant, (iii) reduce the amount of any such payment of principal, (iv) reduce the rate at which interest is payable thereon, or any fee hereunder payable to the Participant, to a level below the rate at which the Participant is entitled to receive such interest or fee or (v) consent to any modification, amendment or waiver hereof or of any of the other Loan Documents to the extent that the same, under Section 12.2, requires the consent of each Lender.  Borrower agrees that each Participant shall be entitled to the benefits of Section 2.7(1), Section 2.7(5), and Section 2.7(6) to the same extent as if it were a Lender and had acquired its interest by assignment pursuant to Section 12.23; provided, however, that a Participant that is a non-U.S. Person that would become a Lender shall not be entitled to the benefits of Section 2.7(6) unless Lead Borrower is notified of the participation sold to such Participant and such Participant agrees, for the benefit of Borrower, to comply with Section 2.7(6) as though it were a Lender.  To the extent permitted by law, each Participant also shall be entitled to the benefits of Section 12.23 as though it were a Lender; provided that such Participant agrees to be subject to Section 12.23 as though it were a Lender.

 

  

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(4)           Certain Pledges.  In addition to the assignments and participations permitted under the foregoing provisions of this Section 12.23 (but without being subject thereto), any Lender may (without notice to Borrower, Administrative Agent or any other Lender and without payment of any fee) assign and pledge all or any portion of its Loans and its Note to any Federal Reserve Bank as collateral security pursuant to Regulation A and any operating circular issued by such Federal Reserve Bank, and such Loans and Note shall be fully transferable as provided therein.  No such assignment shall release the assigning Lender from its obligations hereunder.

 

(5)           Provision of Information to Assignees and Participants.  A Lender may furnish any information concerning Borrower, any Borrower Party or any of their respective Affiliates or the Project in the possession of such Lender from time to time to assignees and participants (including prospective assignees and participants); provided that such assignee and participant agree to be bound by the terms of Section 12.29.

 

(6)           No Assignments to Borrower or Affiliates.  Anything in this Section 12.23 to the contrary notwithstanding, no Lender may assign or participate any interest in any Loan held by it hereunder to Borrower or any of its Affiliates without the prior consent of each Lender.

 

Section 12.24Brokers.  Borrower hereby represents to Administrative Agent and each Lender that Borrower has not dealt with any broker, underwriters, placement agent, or finder in connection with the transactions contemplated by this Agreement and the other Loan Documents.  Borrower hereby agrees to indemnify and hold Administrative Agent and each Lender harmless from and against any and all claims, liabilities, costs and expenses of any kind in any way relating to or arising from a claim by any Person that such Person acted on behalf of Borrower in connection with the transactions contemplated herein.

 

Section 12.25Right of Set-off.

 

(1)           Upon the occurrence and during the continuance of any Event of Default, each of the Lenders is, subject (as between the Lenders) to the provisions of subsection (3) of this Section 12.25, hereby authorized at any time and from time to time, without notice to Borrower (any such notice being expressly waived by Borrower) and to the fullest extent permitted by law, to set-off and apply any and all deposits (general or special, time or demand, provisional or final) at any time held, and other indebtedness at any time owing, by such Lender in any of its offices, in Dollars or in any other currency, to or for the credit or the account of Borrower against any and all of the respective obligations of Borrower now or hereafter existing under the Loan Documents, irrespective of whether or not such Lender or any other Lender shall have made any demand hereunder and although such obligations may be contingent or unmatured and such deposits or indebtedness may be unmatured.  Each Lender hereby acknowledges that the exercise by any Lender of offset, set-off, banker’s lien, or similar rights against any deposit or other indebtedness of Borrower whether or not located in New York or any other state with certain laws restricting lenders from pursuing multiple collection methods, could result under such laws in significant impairment of the ability of all the Lenders to recover any further amounts in respect of the Loan.  Therefore, each Lender agrees that no Lender shall exercise any such right of set-off, banker’s lien, or otherwise, against any assets of Borrower (including all general or special, time or demand, provisional or other deposits and other indebtedness owing by such Lender to or for the credit or the account of Borrower) without the prior written consent of Administrative Agent.

 

  

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(2)           Each Lender shall promptly notify Lead Borrower and Administrative Agent after any such set-off and application, provided that the failure to give such notice shall not affect the validity of such set-off and application.  The rights of the Lenders under this Section 12.25 are in addition to other rights and remedies (including other rights of set-off) which the Lenders may have.

 

(3)           Each Lender agrees that it shall turn over to Administrative Agent any payment (whether voluntary or involuntary, through the exercise of any right of setoff or otherwise) on account of the Loans held by it in excess of its ratable portion (in accordance with this agreement and any separate agreement among Administrative Agent and the Lenders) of payments on account of the Loans obtained by all the Lenders.

 

Section 12.26Limitation on Liability of Administrative Agent’s and the Lenders’ Officers, Employees, etc.  Any obligation or liability whatsoever of Administrative Agent or any Lender which may arise at any time under this Agreement or any other Loan Document shall be satisfied, if at all, out of Administrative Agent’s or such Lender’s respective assets only.  No such obligation or liability shall be personally binding upon, nor shall resort for the enforcement thereof be had to, the property of any of Administrative Agent’s or any Lender’s shareholders, directors, officers, employees or agents, regardless of whether such obligation or liability is in the nature of contract, tort or otherwise.

 

Section 12.27Cooperation with Syndication.  Borrower acknowledges that Administrative Agent intends to syndicate a portion of the Commitments to one or more Lenders (the “Syndication”) and in connection therewith, Borrower shall take all actions as Administrative Agent may reasonably request to assist Administrative Agent in its Syndication effort.  Without limiting the generality of the foregoing, Borrower shall, at the request of Administrative Agent (i) facilitate the review of the Loans, the Project and the other collateral for the Loans by any prospective Lender; (ii) assist Administrative Agent and otherwise cooperate with Administrative Agent in the preparation of information offering materials (which assistance may include reviewing and commenting on drafts of such information materials and drafting portions thereof); (iii) deliver updated information on Borrower Parties, the Project and the other collateral for the Loans; (iv) make representatives of Borrower available to meet with prospective Lenders at tours of the Project and bank meetings; (v) facilitate direct contact between the senior management and advisors of Borrower and any prospective Lender; and (vi) provide Administrative Agent with all information reasonably deemed necessary by it to complete the Syndication successfully.  Subject to the provisions of Section 9.28, Borrower agrees to take such further reasonable action, in connection with documents and amendments to the Loan Documents, as may reasonably be required to effect such Syndication; provided, however, that notwithstanding any other provision of this Section 12.27 or Section 12.28 to the contrary, Borrower shall not be required to enter into any such documents and amendments which would alter any of the material economic terms of the Loan Documents or which would create new or greater obligations or liabilities on Borrower Parties under the Loan Documents.

 

  

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Section 12.28Severance of Loan.

 

(1)           Loan Components.  The Administrative Agent shall have the right, at any time, with respect to all or any portion of the Loan, to (a) cause the Notes, the Mortgages and the other Security Documents to be severed and/or split into two or more separate notes, mortgages and other security agreements, so as to evidence and secure one or more senior and subordinate mortgage loans, (b) create one more senior and subordinate notes (i.e., an A/B or A/B/C structure) secured by the Mortgages and the other Security Documents, (c) create multiple components of the Notes (and allocate or re-allocate the outstanding principal amount of the Loan among such components) or (d) otherwise sever the Loan into two or more loans secured by the Mortgages and the other Security Documents (each of clauses (a) through (d), together with the Mezzanine Option described below, a “Bifurcation”); in each such case, in whatever proportions and priorities as Administrative Agent may so direct in its discretion to Administrative Agent; provided, however, that in each such instance (i) the outstanding principal amount of all the Notes evidencing the Loan (or components of such Notes) immediately following such Bifurcation shall be equal to the outstanding principal amount of the Loan immediately prior to such Bifurcation, and (ii) the weighted average Applicable Margin and/or Base Rate, as applicable, with respect to the new notes immediately after such Bifurcation and at all times prior to the occurrence of any Event of Default shall not exceed the weighted average Applicable Margin and/or Base Rate, as applicable, with respect to the initial Notes delivered hereunder (as such interest rates are subject to being adjusted from time to time in accordance herewith, including as a result of the accrual of interest at the Default Rate).  If requested by Administrative Agent in writing, Borrower shall execute within ten (10) days after such request, a severance agreement, amendments to or amendments and restatements of any one or more Loan Documents, and such documentation as Administrative Agent may reasonably request to evidence and/or effectuate any such Bifurcation, all in form and substance reasonably satisfactory to Administrative Agent.

 

(2)           Mezzanine Financing.  Administrative Agent shall have the right, at any time, to divide the Loan into two or more parts (the “Mezzanine Option”): a mortgage loan (the “Mortgage Loan”) and one or more Approved Mezzanine Loans.  The principal amount of the Mortgage Loan plus the principal amount of the Approved Mezzanine Loan(s) shall equal the outstanding principal balance of the Loan immediately prior to the creation of the Mortgage Loan and the Approved Mezzanine Loan(s).  In effectuating the foregoing, the Approved Mezzanine Lender will make a loan to a borrower (the “Mezzanine Borrower(s)”); Mezzanine Borrower(s) will contribute the amount of the Approved Mezzanine Loan(s) to Borrower (in its capacity as Borrower under the Mortgage Loan, “Mortgage Borrower”) and Mortgage Borrower will apply the contribution to pay down the Loan to its Mortgage Loan amount (without prepayment premium).  The Mortgage Loan and the Approved Mezzanine Loan(s) shall be on the same terms and subject to the same conditions set forth in this Agreement, the Notes, the Mortgages and the other Loan Documents except as follows:

 

  

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(a)           The Administrative Agent shall have the right, at any time, to establish different interest rates and debt service payments for the Mortgage Loan(s) and the Approved Mezzanine Loan and to require the payment of the Mortgage Loan and the Approved Mezzanine Loan(s) in such order of priority as may be designated by Administrative Agent; provided that (i) the total of the loan amounts for the Mortgage Loan and the Approved Mezzanine Loan(s) immediately following the creation of such Approved Mezzanine Loan(s) shall equal the amount of the Loan immediately prior to the creation of the Mortgage Loan and the Approved Mezzanine Loan(s), (ii) the weighted average Applicable Margin and/or Base Rate, as applicable, with respect to the Mortgage Loans and the Approved Mezzanine Loan immediately after such Bifurcation and at all times prior to the occurrence of any Event of Default shall not exceed the weighted average prior to such bifurcation, and (iii) there shall be no acceleration of amortization and the initial debt service payments on the Mortgage Loan note and the Approved Mezzanine Loan note(s) shall initially on the date created equal the debt service payment which was due under the Loan immediately prior to such bifurcation.  The Approved Mezzanine Loan(s) shall be subordinate to the Mortgage Loan and shall be governed by the terms of an intercreditor agreement between the holders of the Mortgage Loan and the Approved Mezzanine Loan(s).

 

(b)           Mezzanine Borrower(s) shall be a newly-formed special purpose, bankruptcy remote entity satisfactory to Administrative Agent, and shall own directly or indirectly one hundred percent (100%) of Mortgage Borrower.  The security for the Approved Mezzanine Loan shall be a pledge of one hundred percent (100%) of the direct and indirect ownership interests in Mortgage Borrower.

 

(c)           Mezzanine Borrower and Mortgage Borrower shall cooperate with all reasonable requests of Administrative Agent in order to convert the Loan into a Mortgage Loan and one or more Approved Mezzanine Loan(s) and shall execute and deliver such documents as shall reasonably be required by Administrative Agent in connection therewith, including, without limitation, (i) the modification of organizational documents and loan documents, (ii) documents authorizing Administrative Agent to file any UCC 1 Financing Statements reasonably required by Administrative Agent to perfect the security interest in the collateral for the Approved Mezzanine Loan(s), (iii) execution of such other documents reasonably required by Administrative Agent in connection with the creation of the Approved Mezzanine Loan(s), including, without limitation, an environmental indemnity substantially similar in form and substance to the Environmental Indemnity Agreement delivered on the date hereof in connection with the Loan, (iv) delivery of appropriate authorization and enforceability opinions with respect to the Approved Mezzanine Loan(s), and (v) delivery of an “Eagle 9” or equivalent UCC title insurance policy, satisfactory to Administrative Agent, insuring the perfection and priority of the lien on the Approved Mezzanine Loan collateral; provided, however, that notwithstanding any other provision of Section 12.27 or this Section 12.28(2) to the contrary, Borrower shall not be required to enter into any such documents and amendments which would alter any of the material economic terms of the Loan Documents or which would create new or greater obligations or liabilities Borrower or Borrower Parties under the Loan Documents

 

  

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Section 12.29Confidentiality.  Each of Administrative Agent and the Lenders and Borrower Parties and Sponsor agrees to maintain the confidentiality of the Confidential Information, except that Confidential Information may be disclosed (a) to it and its Affiliates’ directors, officers, employees and agents, including accountants, legal counsel and other advisors (it being understood that the Persons to whom such disclosure is made shall be informed of the confidential nature of such Information and instructed to keep such Information confidential), (b) to the extent requested by any Governmental Authority, (c) to the extent required by Applicable Law or by any subpoena or similar legal process, (d) to any other party to this Agreement, (e) in connection with the exercise of any remedies hereunder or under any other Loan Document or any suit, action or proceeding relating to this Agreement or any other Loan Document or the enforcement of rights hereunder or thereunder, (f) to any assignee or pledgee of or Participant in, or any prospective assignee or pledgee of or Participant in, any of its rights or obligations under this Agreement or any actual or prospective counterparty (or its advisors) to any swap or derivative transaction relating to Borrower and its obligations, (g) with the consent of Borrower or Administrative Agent, as applicable, or (h) to the extent such Confidential Information (i) becomes publicly available other than as a result of a breach of this Section 12.29 or of arrangements entered into pursuant hereto or (ii) becomes available to such party from a source other than Borrower or its Affiliates or the Administrative Agent or the Lender or their Affiliates, as applicable; provided, however, the obligation to maintain the confidentiality of the Confidential Information provided hereunder shall expire twelve (12) months after the date upon which the Loans hereunder are indefeasibly paid in full.  Administrative Agent and each Lender, to the extent required to maintain the confidentiality of Information as provided in this Section 12.29, shall be considered to have complied with its obligation to do so if such Person has exercised the same degree of care to maintain the confidentiality of such Confidential Information as a commercial banker exercising reasonable and customary business practices would accord to its own confidential information.  Notwithstanding anything herein to the contrary, the information subject to this Section 12.29 shall not include, and Administrative Agent and each Lender may disclose without limitation of any kind, any information with respect to the “tax treatment” and “tax structure” (in each case, within the meaning of Treasury Regulation Section 1.6011 4) of the transactions contemplated hereby and all materials of any kind (including opinions or other tax analyses) that are provided to Administrative Agent or such Lender relating to such tax treatment and tax structure. For purposes of this Section 12.29, the information that shall be treated as Confidential Information shall mean, in the case of Administrative Agent and the Lenders, written non-public information concerning the Project and, in the case of Borrower, information concerning the terms and conditions set forth in the Loan Documents.

 

  

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ARTICLE 13

 

RECOURSE LIABILITY

 

Section 13.1Recourse Liability.  No past, present or future member, or any past, present or future shareholder, partner, member, officer, employee, servant, executive, director, agent, authorized representative or Affiliate of Borrower or any member of Borrower, (each such Person, an “Exculpated Party”) shall be personally liable for payments due hereunder or under any other Loan Document or for the performance of any obligation, or breach of any representation or warranty made by Borrower hereunder or thereunder.  The sole recourse of the Lenders and Administrative Agent for satisfaction of the obligations of Borrower hereunder and under any other Loan Document shall be against Borrower and its assets and not against any assets or property of any such Exculpated Party other than the direct or indirect ownership interest of such Exculpated Party in Borrower.  In the event that a Potential Default or Event of Default occurs in connection with such obligations, no action shall be brought against any such Exculpated Party by virtue of its direct or indirect ownership interest in Borrower.  In the event of foreclosure or other sale or disposition of the Project, no judgment for any deficiency upon the obligations hereunder or under any other Loan Document shall be obtainable by the Lenders or Administrative Agent against any such Exculpated Party.  Notwithstanding the foregoing, nothing in this Section 13.1 shall affect or diminish the obligations of Borrower or Guarantors under or in respect of each Loan Document to which it is a party, including Guarantor Documents (including the right to name any Guarantor in any foreclosure action in connection with its obligations under the Guarantor Documents) and the Co-Borrower Documents.  Notwithstanding the foregoing provisions of this Section 13.1, each Exculpated Party shall be personally (and on a full recourse basis) liable for and shall indemnify and defend Administrative Agent and the Lenders from and against, and shall hold Administrative Agent and the Lenders harmless of, from and against any deficiency, liability, loss, damage, costs, and expenses (including legal fees and disbursements) suffered by Administrative Agent and/or the Lenders and caused by, or arising out of or as a result of any of the following:  (i) such Person’s commission of a criminal act, (ii) such Person’s failure to comply with the provisions of the Loan Documents prohibiting a transfer or Change of Control; (iii) such Person’s misappropriation of any cash flow or other revenue derived from or in respect of the Project, including security deposits, insurance proceeds, condemnation awards, or any rental, sales or other income derived directly or indirectly from the Project, or the misapplication of any of the foregoing sums, in either event, in contravention of any provision of this Agreement or the other Loan Documents; (iv) such Person’s fraud or misrepresentation or inaccurate certification made at any time in connection with the Loan Documents or the Loans; (v) such Person’s intentional interference with Administrative Agent’s (or the Lenders’) exercise of its rights under any of the Loan Documents; (vi) such Person’s intentional destruction or removal of fixtures or personal property securing the Loans unless replaced by items of equal value and utility; (vii) such Person’s misapplication or misappropriation of funds disbursed from the Security Accounts or the Controlled Accounts; (viii) such Person’s commissions of intentional waste to or of the Project or any portion thereof or failure to maintain the Project in the manner required by the Loan Documents; (ix) failure to maintain the insurance coverage required by the Loan Documents; (x) failure to pay taxes, assessments and any other charges, including, without limitation, charges for labor or materials, which could result in prior liens against any portion of the Project; (xi) willful misconduct; (xii) Borrower files a voluntary petition under the Federal Bankruptcy Code or any other Federal or state bankruptcy or insolvency law; (xiii) such Person files or joins in the filing of, or solicits or acts in concert with, or colludes or conspires with petitioning creditors with respect to, an involuntary petition against Borrower under the Federal Bankruptcy Code or any other Federal or state bankruptcy or insolvency law; (xiv) Borrower files an answer consenting to or otherwise acquiescing in or joining in any involuntary petition filed against it, by any other Person under the Federal Bankruptcy Code or any other Federal or state bankruptcy or insolvency law; (xv) such Person consents to or acquiesces in or joins in an application for the appointment of a custodian, receiver, trustee, or examiner for Borrower or any portion of the Project; (xvi) Borrower makes an assignment for the benefit of creditors, or admits, in writing or in any legal proceeding, its insolvency or inability to pay its debts as the become due; or (xvii) Borrower violates any of provisions set forth in the definition of Single Purpose Entity and such violation results in a substantive consolidation of the Borrower or its assets in the bankruptcy of an Affiliate.

 

  

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Section 13.2No Waiver of Certain Rights.  Notwithstanding anything to the contrary contained in this Agreement or the other Loan Documents, (A) neither of Administrative Agent nor the Lenders shall be deemed to have waived any right which Administrative Agent or any Lender may have under Sections 506(a), 506(b), 1111(b) or any other provision of the Federal Bankruptcy Code, as such sections may be amended, to file a claim for the full amount due to Administrative Agent or such Lender under the Loan Documents or to require that all collateral shall continue to secure the amounts due under the Loan Documents and (B) Administrative Agent may pursue any power of sale, bring any foreclosure action, any action for specific performance, or any other appropriate action or proceedings against Borrower or any other Person for the purpose of enabling the Administrative Agent and the Lenders to realize upon the collateral for the Loans (including, without limitation, any Net Operating Income to the extent provided for in the Loan Documents) or to obtain the appointment of a receiver.

 

ARTICLE 14

 

ADMINISTRATIVE AGENT

 

Section 14.1Appointment, Powers and Immunities.  Each Lender hereby appoints and authorizes Administrative Agent to act as its agent hereunder and under the other Loan Documents with such powers as are specifically delegated to Administrative Agent by the terms of this Agreement and of the other Loan Documents, together with such other powers as are reasonably incidental thereto.  Administrative Agent (which term as used in this sentence and in Section 14.5 and the first sentence of Section 14.6 shall include reference to its Affiliates and its own and its Affiliates’ officers, directors, employees and agents):

 

(a)           shall have no duties or responsibilities except those expressly set forth in this Agreement and in the other Loan Documents, and shall not by reason of this Agreement or any other Loan Document be a trustee for any Lender except to the extent that Administrative Agent acts as an agent with respect to the receipt or payment of funds, nor shall Administrative Agent have any fiduciary duty to Borrower nor shall any Lender have any fiduciary duty to Borrower or any other Lender;

 

(b)           shall not be responsible to the Lenders for any recitals, statements, representations or warranties contained in this Agreement or in any other Loan Document, or in any certificate or other document referred to or provided for in, or received by any of them under, this Agreement or any other Loan Document, or for the value, validity, effectiveness, genuineness, enforceability or sufficiency of the Loan Documents or any other document referred to or provided for therein or for any failure by Borrower or any other Person to perform any of its obligations thereunder; and

 

  

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(c)           shall not be responsible for any action taken or omitted to be taken by it under any Loan Document or under any other document or instrument referred to or provided for therein or in connection therewith, except to the extent any such action taken or omitted violates Administrative Agent’s standard of care set forth in the first sentence of Section 14.5.

 

(d)           shall not, except to the extent expressly instructed by the Majority Lenders with respect to collateral security under the Security Documents, be required to initiate or conduct any litigation or collection proceedings hereunder or under any other Loan Document; and

 

(e)           shall not be required to take any action which is contrary to the Loan Documents or Applicable Law.

 

The relationship between Administrative Agent and each Lender is a contractual relationship only, and nothing herein shall be deemed to impose on Administrative Agent any obligations other than those for which express provision is made herein or in the other Loan Documents.  Administrative Agent may employ agents and attorneys, and may delegate all or any part of its obligations hereunder, to third parties and shall not be responsible for the negligence or misconduct of any such agents, attorneys in fact or third parties selected by it in good faith.  Administrative Agent may deem and treat the payee of a Note as the holder thereof for all purposes hereof unless and until a notice of the assignment or transfer thereof shall have been filed with Administrative Agent, any such assignment or transfer to be subject to the provisions of Section 12.23.  Except to the extent expressly provided in Section 14.8, the provisions of this Article 14 are solely for the benefit of Administrative Agent and the Lenders, and Borrower shall not have any rights as a third-party beneficiary of any of the provisions hereof and the Lenders may modify or waive such provisions of this Article 14 in their sole and absolute discretion.

 

Section 14.2Reliance by Administrative Agent.  Administrative Agent shall be entitled to rely upon any certification, notice or other communication (including, without limitation, any thereof by telephone, telecopy, telegram or cable) reasonably believed by it to be genuine and correct and to have been signed or sent by or on behalf of the proper Person or Persons, and upon advice and statements of legal counsel, independent accountants and other experts selected by Administrative Agent.  As to any matters not expressly provided for by this Agreement or any other Loan Document, Administrative Agent shall in all cases be fully protected in acting, or in refraining from acting, hereunder or thereunder in accordance with instructions given by the Majority Lenders, and such instructions of the Majority Lenders and any action taken or failure to act pursuant thereto shall be binding on all of the Lenders.

 

  

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Section 14.3Defaults.

 

(1)           Administrative Agent shall not be deemed to have knowledge or notice of the occurrence of a Potential Default or Event of Default unless Administrative Agent has received notice from a Lender or Lead Borrower specifying such Potential Default or Event of Default and stating that such notice is a “Notice of Default.”  In the event that Administrative Agent receives such a notice of the occurrence of a Potential Default or Event of Default, Administrative Agent shall give prompt notice thereof to the Lenders.  Within ten (10) days of delivery of such notice of Potential Default or Event of Default from Administrative Agent to the Lenders (or such shorter period of time as Administrative Agent determines is necessary), Administrative Agent and the Lenders shall consult with each other to determine a proposed course of action.  Administrative Agent shall (subject to Section 14.7) take such action with respect to such Potential Default or Event of Default as shall be directed by the Majority Lenders, provided that, (A) unless and until Administrative Agent shall have received such directions, Administrative Agent may (but shall not be obligated to) take such action, or refrain from taking such action, including decisions (1) to make protective advances that Administrative Agent determines are necessary to protect or maintain the Project and (2) to foreclose on any of the Project or exercise any other remedy, with respect to such Potential Default or Event of Default as it shall deem advisable in the interest of the Lenders except to the extent that this Agreement expressly requires that such action be taken, or not be taken, only with the consent or upon the authorization of all of the Lenders and (B) no actions approved by the Majority Lenders shall violate the Loan Documents or Applicable Law.  Each of the Lenders acknowledges and agrees that no individual Lender may separately enforce or exercise any of the provisions of any of the Loan Documents (including the Notes) other than through Administrative Agent.  Administrative Agent shall advise the Lenders of all material actions which Administrative Agent takes in accordance with the provisions of this Section 14.3(1) and shall continue to consult with the Lenders with respect to all of such actions.  Notwithstanding the foregoing, if the Majority Lenders shall at any time direct that a different or additional remedial action be taken from that already undertaken by Administrative Agent, including the commencement of foreclosure proceedings, such different or additional remedial action shall be taken in lieu of or in addition to, the prosecution of such action taken by Administrative Agent; provided that all actions already taken by Administrative Agent pursuant to this Section 14.3(1) shall be valid and binding on each Lender.  All money (other than money subject to the provisions of Section 14.7) received from any enforcement actions, including the proceeds of a foreclosure sale of the Project, shall be applied, first, to the payment or reimbursement of Administrative Agent for expenses incurred in accordance with the provisions of Sections 14.3(2), (3) and (4) and 14.5 and to the payment of the Agency Fee to the extent not paid by Borrower pursuant to Section 14.11, second, to the payment or reimbursement of the Lenders for expenses incurred in accordance with the provisions of Section 14.3(2), (3) and (4) and 14.5; third, to the payment or reimbursement of the Lenders for any advances made pursuant to Section 14.3(2); and fourth, to the Lenders in accordance with their respective Proportionate Shares (and, if applicable, to Eurohypo Counterparty under any Hedge Agreement for its Additional Interest in accordance with Section 9.15), unless an Unpaid Amount is owed pursuant to Section 14.12, in which event such Unpaid Amount shall be deducted from the portion of such proceeds of the Defaulting Lender and be applied to payment of such Unpaid Amount to the Special Advance Lender.

 

(2)           All losses with respect to interest (including interest at the Default Rate) and other sums payable pursuant to the Notes or incurred in connection with the Loans shall be borne by the Lenders in accordance with their respective proportionate shares of the Loans.  All losses incurred in connection with the Loans, the enforcement thereof or the realization of the security therefor, shall be borne by the Lenders in accordance with their respective proportionate shares of the Loan, and the Lenders shall promptly, upon request, remit to Administrative Agent their respective proportionate shares of (i) any expenses incurred by Administrative Agent in connection with any Default to the extent any expenses have not been paid by Borrower, (ii) any advances made to pay taxes or insurance or otherwise to preserve the Lien of the Security Documents or to preserve and protect the Project, whether or not the amount necessary to be advanced for such purposes exceeds the amount of the Mortgages, (iii) any other expenses incurred in connection with the enforcement of the Mortgages or other Loan Documents, and (iv) any expenses incurred in connection with the consummation of the Loans not paid or provided for by Borrower.  To the extent any such advances are recovered in connection with the enforcement of the Mortgages or the other Loan Documents, each Lender shall be paid its proportionate share of such recovery after deduction of the expenses of Administrative Agent and the Lenders.

 

  

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(3)           If, at the direction of the Majority Lenders or otherwise as provided in Section 14.3(1), any action(s) is brought to collect on the Notes or enforce the Security Documents or any other Loan Document, such action shall (to the extent permitted under Applicable Law and the decisions of the court in which such action is brought) be an action brought by Administrative Agent and the Lenders, collectively, to collect on all or a portion of the Notes or enforce the Security Documents or any other Loan Document and counsel selected by Administrative Agent shall prosecute any such action on behalf of Administrative Agent and the Lenders, and Administrative Agent and the Lenders shall consult and cooperate with each other in the prosecution thereof.  All decisions concerning the appointment of a receiver while such action is pending, the conduct of such receivership, the conduct of such action, the collection of any judgment entered in such action and the settlement of such action shall be made by Administrative Agent.  The costs and expenses of any such action shall be borne by the Lenders in accordance with each of their respective proportionate shares.

 

(4)           If, at the direction of the Majority Lenders or otherwise as provided in Section 14.3(1), any action(s) is brought to foreclose the Mortgages, such action shall (to the extent permitted under Applicable Law and the decisions of the court in which such action is brought) be an action brought by Administrative Agent and the Lenders, collectively, to foreclose all or a portion of the Mortgages and collect on the Notes.  Counsel selected by Administrative Agent shall prosecute any such foreclosure on behalf of Administrative Agent and the Lenders and Administrative Agent and the Lenders shall consult and cooperate with each other in the prosecution thereof.  All decisions concerning the appointment of a receiver, the conduct of such foreclosure, the acceptance of a deed in lieu of foreclosure, the bid on behalf of Administrative Agent and the Lenders at the foreclosure sale of the Project, the manner of taking and holding title to the Project (other than as set forth in subsection (5) below), the sale of the Project after foreclosure, and the commencement and conduct of any deficiency judgment proceeding shall be made by Administrative Agent.  The costs and expenses of foreclosure will be borne by the Lenders in accordance with their respective proportionate shares.

 

(5)           If title is acquired to the Project after a foreclosure sale or by a deed in lieu of foreclosure, title shall be held by Administrative Agent in its own name in trust for the Lenders or, at Administrative Agent’s election, in the name of a wholly owned subsidiary of Administrative Agent, on behalf of the Lenders, or a subsidiary wholly owned by the Lenders and managed by the Administrative Agent.

 

  

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(6)           If Administrative Agent (or its subsidiary) acquires title to the Project or is entitled to possession of the Project during or after the foreclosure, all material decisions with respect to the possession, ownership, development, construction, control, operation, leasing, management and sale of the Project shall be made by Administrative Agent.  All income or other money received after so acquiring title to or taking possession of the Project with respect to the Project, including income from the operation and management of the Project and the proceeds of a sale of the Project, shall be applied (subject to the terms of any separate agreement among Administrative Agent and the Lenders), first, to the payment or reimbursement of Administrative Agent and the expenses incurred in accordance with the provisions of this Article 14 and to the payment of the Agency Fee to the extent not paid by Borrower pursuant to Section 14.11, second, to the payment of operating expenses with respect to the Project; third, to the establishment of reasonable reserves for the operation of the Project; fourth, to the payment or reimbursement of the Lenders for any advances made pursuant to Section 14.3(2); fifth, to fund any capital improvement, leasing and other reserves; and sixth, to the Lenders in accordance with their respective Proportionate Shares (and, if applicable, to Eurohypo Counterparty under any Hedge Agreement for its Additional Interest in accordance with Section 9.15), unless an Unpaid Amount is owed pursuant to Section 14.12, in which event such Unpaid Amount shall be deducted from the portion of such proceeds of the Defaulting Lender and be applied to payment of such Unpaid Amount to the Special Advance Lender.

 

Section 14.4Rights as a Lender.  With respect to its Commitment and the Loans made by it Eurohypo (and any successor acting as Administrative Agent) in its capacity as a Lender hereunder shall have the same rights and powers hereunder as any other Lender and may exercise the same as though it were not acting as Administrative Agent, and the term “Lender” or “Lenders” shall, unless the context otherwise indicates, include Administrative Agent in its individual capacity.  Eurohypo (and any successor acting as Administrative Agent) and its Affiliates may (without having to account therefor to any Lender) lend money to, make investments in and generally engage in any kind of lending, trust or other business with Borrower (and any of its Affiliates) as if it were not acting as Administrative Agent, and Eurohypo and its Affiliates may accept fees and other consideration from Borrower for services in connection with this Agreement or otherwise without having to account for the same to the Lenders.

 

Section 14.5Standard of Care; Indemnification.  In performing its duties under the Loan Documents, Administrative Agent will exercise the same degree of care as it normally exercises in connection with real estate loans that it syndicates and administers, but Administrative Agent shall have no further responsibility to any Lender except as expressly provided herein and except for its own gross negligence or willful misconduct which resulted in actual loss to such Lender, and, except to such extent, Administrative Agent shall have no responsibility to any Lender for the failure by Administrative Agent to comply with any of Administrative Agent’s obligations to Borrower under the Loan Documents or otherwise.  Subject to the terms of any separate agreement among Administrative Agent and the Lenders, the Lenders agree to indemnify Administrative Agent (to the extent not reimbursed under Section 9.28, but without limiting the obligations of Borrower under Section 9.28) ratably in accordance with the aggregate principal amount of the Loans held by the Lenders (or, if no Loans are at the time outstanding, ratably in accordance with their respective Commitments), for any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind and nature whatsoever that may be imposed on, incurred by or asserted against Administrative Agent (including by any Lender) arising out of or by reason of any investigation in or in any way relating to or arising out of this Agreement or any other Loan Document or any other documents contemplated by or referred to herein or therein or the transactions contemplated hereby or thereby (including, without limitation, the costs and expenses that Borrower is obligated to pay under Section 9.28, but excluding, unless an Event of Default has occurred and is continuing, normal administrative costs and expenses incident to the performance of its agency duties hereunder) or the enforcement of any of the terms hereof or thereof or of any such other documents, provided that no Lender shall be liable for any of the foregoing to the extent they arise from Administrative Agent’s breach of its standard of care set forth in the first sentence of this Section.

 

  

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Section 14.6Non Reliance on Administrative Agent and Other Lenders.  Each Lender agrees that it has, independently and without reliance on Administrative Agent or any other Lender, and based on such documents and information as it has deemed appropriate, made its own credit analysis of Borrower and its Affiliates and decision to enter into this Agreement and that it will, independently and without reliance upon Administrative Agent or any other Lender, and based on such documents and information as it shall deem appropriate at the time, continue to make its own analysis and decisions in taking or not taking action under this Agreement or under any other Loan Document.  Subject to the provisions of the first sentence of Section 14.5, Administrative Agent shall not be required to keep itself informed as to the performance or observance by Borrower of this Agreement or any of the other Loan Documents or any other document referred to or provided for herein or therein or to inspect the Project or the books of Borrower or any of its Affiliates.  Except for notices, reports and other documents and information expressly required to be furnished to the Lenders by Administrative Agent hereunder or as otherwise agreed by Administrative Agent and the Lenders, Administrative Agent shall not have any duty or responsibility to provide any Lender with any credit or other information concerning the affairs, financial condition or business of Borrower or any of its Affiliates that may come into the possession of Administrative Agent or any of its Affiliates.

 

Section 14.7Failure to Act.  Except for action expressly required of Administrative Agent hereunder, and under the other Loan Documents, Administrative Agent shall in all cases be fully justified in failing or refusing to act hereunder and thereunder unless it shall receive further assurances to its satisfaction from the Lenders of their indemnification obligations under Section 14.5 against any and all liability and expense that may be incurred by it by reason of taking or continuing to take any such action.

 

Section 14.8Resignation of Administrative Agent.  Administrative Agent may resign at any time by giving notice thereof to the Lenders and Lead Borrower.  Upon any such resignation, the Majority Lenders shall have the right to appoint a successor Administrative Agent that shall be a Person that meets the qualifications of an Eligible Assignee.  If no successor Administrative Agent shall have been so appointed by the Majority Lenders and shall have accepted such appointment within thirty (30) days after the retiring Administrative Agent’s giving of notice of resignation, then the retiring Administrative Agent may, on behalf of the Lenders, appoint a successor Administrative Agent, that shall be an institutional lender that meets the requirements of the immediately preceding sentence.  Upon the acceptance of any appointment as Administrative Agent hereunder by a successor Administrative Agent, such successor Administrative Agent shall thereupon succeed to and become vested with all the rights, powers, privileges and duties of the retiring (or retired) Administrative Agent, and the retiring Administrative Agent shall be discharged from its duties and obligations hereunder (if not already discharged therefrom as provided above in this Section 14.8).  The fees payable by Borrower to a successor Administrative Agent shall be the same as those payable to its predecessor unless otherwise agreed between Borrower and such successor.  After any retiring Administrative Agent’s resignation hereunder as Administrative Agent, the provision of this Article 14 and Section 9.28 shall continue in effect for its benefit in respect of any actions taken or omitted to be taken by it while it was acting as Administrative Agent.

 

  

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Section 14.9Consents under Loan Documents.  Administrative Agent may (without any Lender’s consent) give or withhold its agreement to any amendments of the Loan Documents or any waivers or consents in respect thereof or exercise or refrain from exercising any other rights or remedies which Administrative Agent may have under the Loan Documents or otherwise provided that such actions do not, in Administrative Agent’s reasonable judgment, materially adversely affect the value of any collateral, taken as a whole, or represent a departure from Administrative Agent’s standard of care described in Section 14.5, except that, except as otherwise provided in any separate agreement entered into among Administrative Agent and the Lenders, Administrative Agent shall not agree to the following (provided that no Lender’s consent shall be required for any of the following which are otherwise required or contemplated under the Loan Documents):

 

(a)           increase the Commitment of any Lender without the consent of such Lender;

 

(b)           reduce the principal amount of the Loans or reduce the interest rate thereon without the consent of each Lender affected thereby;

 

(c)           extend any stated payment date for principal of or interest on the Loans payable to any Lender without the consent of each Lender affected thereby;

 

(d)           release Borrower, any Guarantor or any other party from liability under the Loan Documents (except for any assigning Lender pursuant to Section 12.23 and any resigning Administrative Agent pursuant to Section 14.8) without the consent of each Lender (except that no such consent shall be required, and Administrative Agent is hereby authorized, to release Borrower and Guarantors (A) as expressly provided in the Loan Documents and (B) upon payment of the Obligations in full in accordance with the terms of the Loan Documents);

 

(e)           release or subordinate in whole or in part any material portion of the collateral given as security for the Loans without the consent of each Lender (except that no such consent shall be required, and Administrative Agent is hereby authorized, to release any Lien covering the collateral under the Security Documents (A) as expressly provided in the Loan Documents and (B) upon payment of the Obligations in full in accordance with the terms of the Loan Documents);

 

(f)           modify any of the provisions of this Section 14.9, the definition of “Majority Lenders” or any other provision in the Loan Documents specifying the number or percentage of Lenders required to waive, amend or modify any rights thereunder or make any determination or grant any consent thereunder without the consent of each Lender;

 

  

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(g)           modify the terms of any Event of Default without the consent of each Lender; or

 

(h)           consent to (i) the sale, transfer or encumbrance of any portion of the Project (or any interest therein) or any direct or indirect ownership interest therein and (ii) the incurrence by Borrower of any additional indebtedness secured by the Project, in each case to the extent such consent is required under the Loan Documents (and subject to any standard of reasonability set forth therein) without the consent of each Lender.

 

Notwithstanding anything to the contrary contained in this Agreement, (a) any modification or supplement of Article 14, or of any of the rights or duties of Administrative Agent hereunder, shall require the consent of Administrative Agent and (b) in the case of Change Orders, the Lenders hereby authorize Administrative Agent (on behalf of the Lenders) to modify the Loan Documents to the extent reasonably necessary to comply with the requirements of the Lien Law in connection therewith and (y) Administrative Agent is hereby authorized to enter into modifications or amendments to the Loan Documents which are ministerial in nature, including the preparation and execution of Uniform Commercial Code forms, Assignments and Assumptions and subordination and non-disturbance agreements with tenants at the Project.  If Administrative Agent solicits any consents or approvals from the Lenders under any of the Loan Documents, each Lender shall within ten (10) Business Days of receiving such request, give Administrative Agent written notice of its consent or approval or denial thereof; provided that, if any Lender does not respond within such ten (10) Business Days, such Lender shall be deemed to have authorized Administrative Agent to vote such Lender’s interest with respect to the matter which was the subject of Administrative Agent’s solicitation as Administrative Agent elects.  Any such solicitation by Administrative Agent for a consent or approval shall be in writing and shall include a description of the matter or thing as to which such consent or approval is requested and shall include Administrative Agent’s recommended course of action or determination in respect thereof.

 

Section 14.10Authorization.  Administrative Agent is hereby authorized by the Lenders to execute, deliver and perform in accordance with the terms of each of the Loan Documents to which Administrative Agent is or is intended to be a party and each Lender agrees to be bound by all of the agreements of Administrative Agent contained in such Loan Documents.  Borrower shall be entitled to rely on all written agreements, approvals and consents received from Administrative Agent as being that also of the Lenders, without obtaining separate acknowledgment or proof of authorization of same.

 

Section 14.11Agency Fee.  So long as the Commitments are in effect and until payment in full of all obligations under this Agreement, the Notes and the other Loan Documents, Borrower shall pay to Administrative Agent, for its sole account, the Agency Fee.  The Agency Fee shall be payable annually in advance commencing on the Closing Date pursuant to the Fee Letter.

 

Section 14.12Defaulting Lenders.

 

(1)           If any Lender (a “Defaulting Lender”) shall for any reason fail to (i) make any respective Loan required pursuant to the terms of this Agreement or (ii) pay its proportionate share of an advance or disbursement to protect the Project or the Lien of the Security Documents, any of the other Lenders may, but shall not be obligated to, make all or a portion of the Defaulting Lender’s Loan or proportionate share of such advance, provided that such Lender gives the Defaulting Lender and Administrative Agent prior notice of its intention to do so.  The right to make such advances in respect of the Defaulting Lender shall be exercisable first by the Lender holding the greatest proportionate share and thereafter to each of the Lenders in descending order of their respective proportionate shares of the Loans or in such other manner as the Majority Lenders (excluding the Defaulting Lender) may agree on.  Any Lender making all or any portion of the Defaulting Lender’s proportionate share of the applicable Loan or advance in accordance with the foregoing terms and conditions shall be referred to as a “Special Advance Lender.”

 

  

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(2)           In any case where a Lender becomes a Special Advance Lender (i) the Special Advance Lender shall be deemed to have purchased, and the Defaulting Lender shall be deemed to have sold, a senior participation in the Defaulting Lender’s respective Loan to the extent of the amount so advanced or disbursed (the “Advanced Amount”) bearing interest (including interest at the Default Rate, if applicable) and (ii) the Defaulting Lender shall have no voting rights under this Agreement or any other Loan Documents so long as it is a Defaulting Lender.  It is expressly understood and agreed that each of the respective obligations under this Agreement and the other Loan Documents, including advancing Loans, losses incurred in connection with the Loan, costs and expenses of enforcement, advancing to preserve the Lien of the Mortgages or to preserve and protect the Project, shall be without regard to any adjustment in the proportionate shares occasioned by the acts of a Defaulting Lender.  The Special Advance Lender shall be entitled to an amount (the “Unpaid Amount”) equal to the applicable Advanced Amount, plus any unpaid interest due and owing with respect thereto, less any repayments thereof made by the Defaulting Lender immediately upon demand.  The Defaulting Lender shall have the right to repurchase the senior participation in its Loan from the Special Advance Lender at any time by the payment of the Unpaid Amount.

 

(3)           A Special Advance Lender shall (i) give notice to the Defaulting Lender, Administrative Agent and each of the other Lenders (provided that failure to deliver said notice to any party other than the Defaulting Lender shall not constitute a default under this Agreement) of the Advance Amount and the percentage of the Special Advance Lender’s senior participation in the Defaulting Lender’s Loan and (ii) in the event of the repayment of any of the Unpaid Amount by the Defaulting Lender, give notice to the Defaulting Lender and Administrative Agent of the fact that the Unpaid Amount has been repaid (in whole or in part), the amount of such repayment and, if applicable, the revised percentage of the Special Advance Lender’s senior participation.  Provided that Administrative Agent has received notice of such participation, Administrative Agent shall have the same obligations to distribute interest, principal and other sums received by Administrative Agent with respect to a Special Advance Lender’s senior participation as Administrative Agent has with respect to the distribution of interest, principal and other sums under this Agreement; and at the time of making any distributions to the Lenders, shall make payments to the Special Advance Lender with respect to a Special Advance Lender’s senior participation in the Defaulting Lender’s Loan out of the Defaulting Lender’s share of any such distributions.

 

  

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(4)           A Defaulting Lender shall immediately pay to a Special Advance Lender all sums of any kind paid to or received by the Defaulting Lender from Borrower, whether pursuant to the terms of this Agreement or the other Loan Documents or in connection with the realization of the security therefor until the Unpaid Amount is fully repaid.  Notwithstanding the fact that the Defaulting Lender may temporarily hold such sums, the Defaulting Lender shall be deemed to hold same as a trustee for the benefit of the Special Advance Lender, it being the express intention of the Lenders that the Special Advance Lender shall have an ownership interest in such sums to the extent of the Unpaid Amount.

 

(5)           Each Defaulting Lender shall indemnify, defend and hold Administrative Agent and each of the other Lenders harmless from and against any and all losses, damages, liabilities or expenses (including reasonable attorneys’ fees and expenses and interest at the Default Rate) which they may sustain or incur by reason of the Defaulting Lender’s failure or refusal to abide by its obligations under this Agreement or the other Loan Documents, except to the extent a Defaulting Lender became a Defaulting Lender due to the gross negligence or willful misconduct of Administrative Agent and/or any Lender.  Administrative Agent shall, after payment of any amounts due to any Special Advance Lender pursuant to the terms of subsection (3) above, set-off against any payments due to such Defaulting Lender for the claims of Administrative Agent and the other Lenders pursuant to this indemnity.

 

(6)           In the event any Lender becomes a Defaulting Lender and none of the other Lenders elects to be a Special Advance Lender pursuant to subsection (1) above, Borrower shall have the right, at any time prior to the Completion Date, provided that no Potential Default or Event of Default exists, to cause another financial institution, reasonably acceptable to (x) the Majority Lenders if such institution is not an Eligible Assignee or (y) Administrative Agent if such institution is an Eligible Assignee, to assume Defaulting Lender’s obligations with respect to the Advance Amount on the then-existing terms and conditions of the Loan Documents (such replacement institution, a “Replacement Lender”).  Such assumption shall be pursuant to a written instrument reasonably satisfactory to administrative Agent.  Upon such assumption, the Replacement Lender shall become a “Lender” for all purposes hereunder, with a Commitment in an amount equal to the Advance Amount, and the Defaulting Lender’s Commitment shall automatically be reduced by the Advance Amount.  In connection with the foregoing, Borrower shall execute and deliver to the Replacement Lender and the Defaulting Lender substitute notes substantially in the form of Exhibit C and stating: “This Note is a substitute note as contemplated by Section 14.12 of the Agreement; it replaces and is in lieu of that certain note made by Maker dated [date of Note] to the order of [Defaulting Lender] in the principal sum of [Defaulting Lender’s original Commitment].”  Such substitute notes shall be in amounts equal to, in the case of the Replacement Lender’s note, the Advance Amount and, in the case of the Defaulting Lender’s note, its Commitment as reduced aforesaid.  Such substitute notes shall constitute “Notes” and the obligations evidenced by such substitute notes shall be secured by the Mortgages.  In connection with Borrower’s execution of substitute notes as aforesaid, Borrower shall deliver to Administrative Agent evidence, satisfactory to Administrative Agent, of all requisite partnership/limited liability company/corporate action to authorize Borrower’s execution and delivery of the substitute notes and any related documents.  Upon delivery of the foregoing substitute notes, each Defaulting Lender shall return to Borrower its note which was replaced, provided that the delivery of a substitute note to the Defaulting Lender pursuant to this Section 14.12 shall operate to void and replace the note previously held by the Defaulting Lender regardless of whether Defaulting Lender returns the same as required hereby.  Borrower, Administrative Agent and Lenders shall execute such modifications to the Loan Documents as shall, in the reasonable judgment of Administrative Agent, be necessary or desirable in connection with the substitution of Lenders in accordance with the foregoing provisions of this Section.  Lenders shall reasonably cooperate with Borrower’s attempts to obtain a Replacement Lender, but they shall not be obligated to modify the Loan Documents in connection therewith, other than modifications pursuant to the immediately preceding sentence.

 

  

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Section 14.13Liability of Administrative Agent.  Administrative Agent shall not have any liabilities or responsibilities to Borrower on account of the failure of any Lender (other than Administrative Agent in its capacity as a Lender) to perform its obligations hereunder or to any Lender on account of the failure of Borrower to perform its obligations hereunder or under any other Loan Document.

 

Section 14.14Transfer of Agency Function.  Without the consent of Borrower or any Lender, Administrative Agent may at any time or from time to time transfer its functions as Administrative Agent hereunder to any of its offices wherever located in the United States; provided that Administrative Agent shall promptly notify Lead Borrower and the Lenders thereof.

 

ARTICLE 15

 

CASH MANAGEMENT

 

Section 15.1Cash Management.  

 

(1)           Upon the occurrence of an Event of Default and continuing until the Maturity Date, Borrower and Borrower’s Managing Member shall (a) enter into and thereafter comply with the Cash Management Agreement and (b) continuing until ninety (90) days after the date that such Event of Default has been cured, cause all tenants in the Improvements to remit all rental and other payments due under their respective leases into a sweep account established in accordance with the Cash Management Agreement (the “Sweep Account”).  The insufficiency of funds on deposit in any account established pursuant to the Cash Management Agreement shall not absolve Borrower of the obligation to make any payments as and when due pursuant to this Agreement or the other Loan Documents, and such obligations shall be separate and independent, and not conditioned on any event or circumstance whatsoever.

 

(2)           Administrative Agent, in its sole discretion, may, on a monthly basis, release from the Sweep Account an amount equal to the monthly Operating Expenses pursuant to an Approved Annual Budget.  After such release of funds described in the preceding sentence, Administrative Agent, may, in its sole discretion, release any remaining funds to pay for interest on the Loans and for Project Costs.

 

Section 15.2Security Accounts Generally.

 

(1)           Grant of Security Interest.  Borrower hereby grants a perfected first priority security interest in favor of Administrative Agent for the ratable benefit of the Lenders in each Security Account established by or for it hereunder and all financial assets and other property and sums at any time held, deposited or invested therein, and all security entitlements and investment property relating thereto, together with any interest or other earnings thereon, and all proceeds thereof, whether accounts, general intangibles, chattel paper, deposit accounts, instruments, documents or securities (collectively, “Security Account Collateral”), together with all rights of a secured party with respect thereto (even if no further documentation is requested by Administrative Agent or the Lenders or executed by Borrower).

 

  

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(2)           Borrower Covenants.  Borrower covenants and agrees:

 

(a)           to do all acts that may be reasonably necessary to maintain, preserve and protect Security Account Collateral;

 

(b)           to pay promptly when due all material taxes, assessments, charges, encumbrances and liens now or hereafter imposed upon or affecting any Security Account Collateral;

 

(c)           to appear in and defend any action or proceeding which may materially and adversely affect Borrower’s title to or Administrative Agent’s interest in the Security Account Collateral;

 

(d)           following the creation of each Security Account established by or for Borrower and the initial funding thereof, other than to Administrative Agent pursuant to the Cash Management Agreement or this Agreement, not to transfer, assign, sell, surrender, encumber, mortgage, hypothecate, or otherwise dispose of any of the Security Account Collateral or rights or interests therein, and to keep the Security Account Collateral free of all levies and security interests or other liens or charges except the security interest in favor of Administrative Agent granted hereunder;

 

(e)           to account fully for and promptly deliver to Administrative Agent, in the form received, all documents, chattel paper, instruments and agreements constituting the Security Account Collateral hereunder, endorsed to Administrative Agent or in blank, as requested by Administrative Agent, and accompanied by such powers as appropriate and until so delivered all such documents, instruments, agreements and proceeds shall be held by Borrower in trust for Administrative Agent, separate from all other property of Borrower; and

 

(f)           from time to time upon request by Administrative Agent, to furnish such further assurances of Borrower’s title with respect to the Security Account Collateral, execute such written agreements, or do such other acts, all as may be reasonably necessary to effectuate the purposes of this agreement or as may be required by law, or in order to perfect or continue the first-priority lien and security interest of Administrative Agent in the Security Account Collateral.

 

(3)           Rights on Event of Default.  Upon the occurrence and during the continuance of an Event of Default, Administrative Agent, at its option, may withdraw the funds in any Security Account and apply such funds to the items for which the Security Accounts were established or to payment of the Loans in such order, proportion and priority as Administrative Agent may determine in its discretion.  Administrative Agent’s right to withdraw and apply such funds shall be in addition to all other rights and remedies provided to Administrative Agent on behalf of the Lenders under the Cash Management Agreement and the other Loan Documents.

 

  

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(4)           Prohibition Against Further Encumbrance.  Borrower shall not, without the prior written consent of Administrative Agent, further pledge, assign or grant any security interest in the Security Account Collateral or permit any Lien to attach thereto, or any levy to be made thereon, or any Uniform Commercial Code financing statements, except those naming Administrative Agent on behalf of the Lenders as the secured party, to be filed with respect thereto.

 

(5)           Release of Funds in Security Accounts.  Any amount remaining in the Security Accounts after the Loans have been paid in full shall promptly be returned to the Lead Borrower.

 

ARTICLE 16

 

CONTROLLED ACCOUNTS

 

Section 16.1Controlled Accounts.  Borrower hereby agrees with Administrative Agent, as to any Controlled Account into which this Agreement requires Borrower to deposit funds, as follows:

 

(1)           Establishment and Maintenance of the Controlled Account.

 

(a)           Each Controlled Account (i) shall be established at, and a separate and identifiable account from all other funds held by, a Depository Bank and (ii) shall contain only funds required to be deposited pursuant to this Agreement or any other Loan Document.  Any interest which may accrue on the amounts on deposit in a Controlled Account shall be added to and shall become part of the balance of such Controlled Account.  Borrower, Administrative Agent and the applicable Depository Bank shall enter into an agreement (a “Controlled Account Agreement”), substantially in the form of Exhibit G attached hereto (with such changes thereto as may be required by such Depository Bank and satisfactory to Administrative Agent) which shall govern such Controlled Account and the rights, duties and obligations of each party to such Controlled Account Agreement.

 

(b)           Each Controlled Account shall be established in the name of Administrative Agent, as agent for the Lenders and shall be subject to the sole dominion, control and discretion of Administrative Agent, provided, however that Administrative Agent shall act in accordance with the provisions of this Agreement.  Neither Borrower nor any other Person, including, without limitation, any Person claiming on behalf of or through Borrower, shall have any right or authority, whether express or implied, to make use of or withdraw, or cause the use or withdrawal of, any proceeds from any Controlled Account or any of the other proceeds deposited therein, except as expressly provided in this Agreement or in the applicable Controlled Account Agreement.

 

(2)           Deposits to and Disbursements from the Controlled Account.  All deposits to and disbursements of all or any portion of the deposits to any Controlled Account shall be in accordance with this Agreement and the applicable Controlled Account Agreement.  Borrower shall pay any and all fees charged by Depository Bank in connection with the maintenance of each Controlled Account required to be established by or for it hereunder, and the performance of the Depository Bank’s duties.

 

  

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(3)           Security Interest.

 

(a)           Borrower hereby grants a perfected first priority security interest in favor of Administrative Agent for the ratable benefit of the Lenders in each Controlled Account established by or for it hereunder and all financial assets and other property and sums at any time held, deposited or invested therein, and all security entitlements and investment property relating thereto, together with any interest or other earnings thereon, and all proceeds thereof, whether accounts, general intangibles, chattel paper, deposit accounts, instruments, documents or securities (collectively, “Controlled Account Collateral”), together with all rights of a secured party with respect thereto under the Uniform Commercial Code, as security for the obligations of Borrower under the Loan Documents.

 

(b)           All interest earned on any Controlled Account shall be retained in such Controlled Account.  Borrower shall treat all interest earned on its Controlled Account as its income for federal income tax purposes.

 

(c)           While any Event of Default exists, Administrative Agent shall be entitled to exercise all rights of a secured party under the Uniform Commercial Code with respect to each Controlled Account, and (without limiting the foregoing) may apply the Controlled Account Collateral to the unpaid obligations of Borrower under the Loan Documents in such order as Administrative Agent may elect in its sole discretion, without liability for any loss, and Borrower hereby consents to any such withdrawal and application as a commercially reasonable disposition of such funds and agrees that such withdrawal shall not result in satisfaction of such obligations except to the extent the proceeds are applied to such sums.

 

ARTICLE 17

 

CONDOMINIUM PROVISIONS

 

Section 17.1Establishment; Covenants

 

(1)           Subject to the terms and conditions hereof, including without limitation, Section 17.2, Lead Borrower shall have the right, with the prior written approval of the Administrative Agent, to establish a condominium regime with respect to its ownership of the Project.

 

  

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(2)           Lead Borrower covenants and agrees with the Lenders and Administrative Agent that, in the event that it establishes a condominium regime pursuant to Section 17.1, Lead Borrower shall:

 

(a)           Submit the Project, together with all of the Improvements constructed or to be constructed thereon, to the provisions of the Condominium Act and satisfy all of the requirements thereof and of any other Applicable Law necessary to create a valid condominium regime inclusive of all of the Units; and obtain any required approval of the Condominium Documents from the Attorney General of the State of New York.  Any Condominium Documents and any modifications or amendments thereto shall be reasonably approved by Administrative Agent prior to the recording, filing or effectiveness thereof, provided that in the case of any such amendment which shall increase the number of condominium units, in the event that a casualty or condemnation has occurred and the provisions of Article 3 prevent restoration in connection with such casualty or condemnation, then prior to the recording, filing or effectiveness, as applicable, of such amendment, Lead Borrower, at Administrative Agent's option, shall be prohibited from recording, filing or otherwise causing the amendment to become effective and Administrative Agent, at the Majority Lenders' election, shall be permitted to vote, on Lead Borrower's behalf in accordance with the Voting Proxy delivered to Administrative Agent, or require Lead Borrower to vote, to terminate and dissolve the Condominium.  In connection with such amendment, Lead Borrower shall provide updates of the documents and opinion provided herein in the event that the Condominium Declaration has been modified or amended or any of the officers, managers or directors have changed as a result of such amendment;

 

(b)           Duly perform or cause to be duly performed, in all material respects, all obligations of the developers or sponsors under the Condominium Documents, and do or cause to be done all things necessary to operate and maintain the Project and the Condominium as a retail condominium project, that are required to be done by the developers or sponsors and comply with all Applicable Laws applicable to the Condominium, and furnish such evidence of compliance therewith as Administrative Agent may reasonably request;

 

(c)           Subject to Administrative Agent’s approval in its reasonable discretion, not cancel, terminate or revoke, or modify, or in any way alter or permit the alteration of, any of the material provisions of the Condominium Documents or grant any consents or waivers thereunder, and not to exercise any right it may have under the Condominium Documents to cancel, terminate or revoke the same.  Any request for approval by Administrative Agent pursuant to this paragraph shall be made to, and approved by, Administrative Agent prior to, if necessary, submitting such request to the Attorney General of the State of New York; and

 

Section 17.2Subordination of Lien to Project Condominium Declarations.  Provided there exists no Potential Default or Event of Default, Administrative Agent shall, on Lead Borrower’s written request, subordinate the liens of the Mortgages to the Condominium Declaration and shall execute the appropriate instruments (reasonably satisfactory to the Administrative Agent in all respects) in recordable form to effect such subordination, upon the satisfaction of the following conditions:

 

(1)           The Administrative Agent shall have received and approved the Condominium Documents, which shall be in proper form for recording or filing, as necessary, in the appropriate offices, and certified by an officer of Lead Borrower as true, correct and complete copies of the Condominium Documents;

 

(2)           The Title Policies insuring the Mortgages shall have been endorsed to provide a condominium endorsement and non-impairment of lien endorsement (or equivalent affirmative coverage) (which endorsements and affirmative coverage, if applicable, shall not extend the effective date of the Title Policies);

 

  

126

  

(3)           The Lead Borrower shall have caused to be duly executed and delivered to Administrative Agent (i) an Assignment of Declarant’s Rights in the form of Exhibit H, (ii) conditional resignations of the officers and managers of the Board of Directors of the applicable condominium association in the form of Exhibits I and J, respectively, to the extent designated by the Lead Borrower, (iii) a proxy from the Lead Borrower and each representative of the Lead Borrower on such Board of Directors in the form of Exhibit K and (iv) a letter from all the members of such Board of Directors with respect to common charges substantially in the form of Exhibit L;

 

(4)           Administrative Agent shall have received an opinion from the Condominium’s counsel to the effect that (i) the Condominium Documents satisfy all applicable requirements of Governmental Authorities, (ii) all requirements of any Applicable Law have been duly satisfied with respect to the creation of the Condominium by the Lead Borrower in New York State and (iii) the documents referred to in this Section 17.2(4) have each been duly authorized, executed and delivered by the respective parties thereto and are enforceable against said parties in accordance with their respective terms subject to customary limitations; and

 

(5)           The condominium association which shall be created by the Condominium Documents shall have furnished to Administrative Agent at no cost or expense to Administrative Agent, insurance policies for the insurance required hereunder and under the Condominium Documents, with extended coverage naming Administrative Agent, said condominium association, and Borrower (as owner of the Units), as their respective interests may appear, as the insureds, covering all of the Improvements; said insurance shall at all times be an amount equal to 100% of the insurable value of the Improvements and shall otherwise comply with the applicable conditions contained in the Mortgages and elsewhere in this Agreement.

 

Section 17.3Transfer of Collateral.  The Lead Borrower will, upon the creation of the condominium regime, transfer its ownership interest in the Unit containing the Office Component (a “Property Transfer”) to Fordham Office.  Lead Borrower shall only affect such a transfer after Lead Borrower has provided written notice to Administrative Agent that each of the following conditions precedent has been satisfied with respect to such Property Transfer (hereinafter, singly and collectively, the “Property Transfer Conditions”):

 

(1)           The Lead Borrower shall have provided Administrative Agent with at least ten (10) Business Days’ notice of the intended Property Transfer;

 

(2)           The construction of the Improvements shall have commenced and shall have proceeded in accordance with the terms and conditions hereof to a sufficient stage of completion acceptable to Administrative Agent, in its reasonable discretion;

 

(3)           The Borrower shall have executed and delivered, or caused the execution and delivery of, any and all easements and any other matters as to which the Unit is either the servient or the dominant estate, that are necessary for the ownership, construction, use or operation of the Improvements;

 

(4)           The Borrower and Guarantor shall have executed and delivered to Administrative Agent such instruments, documents, agreements, and certifications as Administrative Agent shall have reasonably requested to effectuate, evidence or confirm the Property Transfer and the Administrative Agent’s rights or remedies under the Loan Documents, including without limitation an amendment to each of the Mortgages, but in no way expanding or modifying the obligations of such Borrower or Guarantor hereunder or under the Loan Documents;

 

  

127

  

(5)           Borrower shall have delivered to the Administrative Agent such documents, instruments, materials and further estoppels and certifications as Administrative Agent shall have determined are reasonably required to approve or consent to, to the extent required, the applicable Property Transfer and any requested endorsement(s) to the Title Policies delivered to Administrative Agent pursuant to Schedule 4 – Part A, Paragraph 10; and

 

(6)           Borrower shall have paid all costs and expenses incurred by Administrative Agent in connection with any Property Transfer, including, without limitation, Administrative Agent’s reasonable attorneys’ fees and costs.

 

 

[Signature Pages Follow]

 

 

 

  

128

  

EXECUTED as of the date first written above.

 

	
LENDER:

	
EUROHYPO AG, NEW YORK BRANCH

	 	 
	  	
By:

	
/s/ Mark A. Fisher

	  	  	
Name: Mark A. Fisher

	  	  	
Title: Executive Director

	  	  	  
	  	
By:

	
/s/ John Hayes

	  	  	
Name: John Hayes

	  	  	
Title: Vice President

	  	  	  
	  	Address for Notices to Eurohypo AG, New York Branch:
	  	  	  
	  	Eurohypo AG, New York Branch
	  	1114 Avenue of the Americas, 29th Floor
	  	New York, New York 10036
	  	Attention: Legal Director
	  	Telecopier No.:  866 267 7680
	  	  	  
	  	With copies to:
	  	  	  
	  	Eurohypo AG, New York Branch
	  	1114 Avenue of the Americas, 29th Floor
	  	New York, New York 10036
	  	Attention: Head of Portfolio Operations
	  	Telecopier No.:  866 267 7680
	  	  	  
	  	  	
– and –

	  	  	  
	  	Riemer & Braunstein LLP
	  	Times Square Tower, Suite 2506
	  	Seven Times Square
	  	New York, New York 10036
	  	Attention:  Steven J. Weinstein, Esq.
	  	Telecopier No.: (617) 692-3503

 

 

  

129

  

 

	
BORROWER:

	
ACADIA-PA EAST FORDHAM ACQUISITIONS, LLC,

	  	a Delaware limited liability company
	 	 	 
	  	
By:

	
/s/ Robert Masters

	  	  	
Name: Robert Masters

	  	  	
Title:   Senior Vice President

	 	 	 
	  	
Address for Notices:

	  	  
	  	
c/o Acadia Realty Trust

	  	
1311 Mamaroneck Avenue, Suite 260

	  	
White Plains, NY  10605

	  	
Attention: Robert Masters

	  	
Telecopier No.:  914-428-3646

	  	  
	  	
FORDHAM PLACE OFFICE, LLC,

	  	
a Delaware limited liability company

	 	 
	  	
By:

	
/s/ Robert Masters

	  	  	
Name: Robert Masters

	  	  	
Title:   Senior Vice President

	  	  	  
	  	
Address for Notices:

	  	  
	  	
c/o Acadia Realty Trust

	  	
1311 Mamaroneck Avenue, Suite 260

	  	
White Plains, NY  10605

	  	
Attention: Robert Masters

	  	
Telecopier No.:  914-428-3646

 

  

130

  

 

	
ADMINISTRATIVE AGENT:

	
EUROHYPO AG, NEW YORK BRANCH,

	  	
as Administrative Agent

	 	 
	  	
By:

	
/s/ Mark A. Fisher

	  	  	
Name: Mark A. Fisher

	  	  	
Title: Executive Director

	  	  	  
	  	
By:

	
/s/ John Hayes

	  	  	
Name: John Hayes

	  	  	
Title: Vice President

	  	  	  
	  	
Address for Notices to Eurohypo AG, New York Branch:

	  	  
	  	
Eurohypo AG, New York Branch

	  	
1114 Avenue of the Americas, 29th Floor

	  	
New York, New York 10036

	  	
Attention: Legal Director

	  	
Telecopier No.:  866 267 7680

	  	  
	  	
With copies to:

	  	  
	  	
Eurohypo AG, New York Branch

	  	
1114 Avenue of the Americas, 29th Floor

	  	
New York, New York 10036

	  	
Attention: Head of Portfolio Operations

	 	
Telecopier No.:  866 267 7680

	  	– and –
	  	  	  
	  	
Riemer & Braunstein LLP

	  	
Times Square Tower, Suite 2506

	  	
Seven Times Square

	  	
New York, New York 10036

	  	
Attention:  Steven J. Weinstein, Esq.

	  	
Telecopier No.: (617) 692-3503

 

  

131

  

LEGAL DESCRIPTION OF PROJECT

PARCEL I - (f/k/a LOT 8, Now Part of LOT 9)

ALL THAT CERTAIN piece or parcel of land, together with any improvements thereon situate, lying and being in the Borough of the Bronx, City and State of New York, bounded and described as follows:

BEGINNING at a point on the easterly side of Webster Avenue (100 feet in width), said point being distant south 08 degrees 26 minutes 11 seconds west, a distance of 254.35 feet from a point formed by the intersection of said easterly side of Webster Avenue with the southerly side of East Fordham Road (a/k/a Pelham Avenue variable in width) and from said point of beginning

RUNNING THENCE along the common dividing line between said Lot 8 and Lot 9 south 85 degrees 39 minutes 56 seconds east, a distance of 108.97 feet to a point;

THENCE along the common dividing line between said Lot 8 and Lot 12 south 04 degrees 33 minutes 31 seconds west, a distance of 24.68 feet to a point;

THENCE along the common dividing line between said Lots 8 and Lot 4 (lands now or formerly of Automotive Realty Corporation) north 85 degrees 39 minutes 56 seconds west, a distance of 110.65 feet to a point; on the aforementioned easterly side of Webster Avenue;

THENCE along the easterly side of said Webster Avenue, north 08 degrees 26 minutes 11 seconds east, a distance of 24.74 feet to the point or place of BEGINNING.

 

 

PARCEL II - LOT 9:

ALL THAT CERTAIN piece or parcel of land, together with any improvements thereon situate, lying and being in the Borough of the Bronx, City and State of New York, and as further bounded and described as follows:

BEGINNING at a point on the easterly side of Webster Avenue (100 feet wide), said point being distant south 08 degrees 26 minutes 11 seconds west, a distance of 228.81 feet from a point formed by the intersection of said easterly side of Webster Avenue with the southerly side of East Fordham Road (a/k/a Pelham Avenue, variable width) and from said point of beginning;

RUNNING THENCE the following two (2) courses along the dividing line between Lot 9 (n/f reputed owner Acadia-PA East Fordham Acquisitions, LLC and Lot 12 (n/f reputed owner Acadia-PA East Fordham Acquisitions, LLC), Block 3033;

1.   South 85 degrees 39 minutes 56 seconds east, a distance of 115.24 feet to a point; thence

2.   South 03 degrees 58 minutes 56 seconds west, a distance of 25.48 feet to a point; thence

  

  

  

3.   Along the common dividing line between the aforementioned Lot 9 and Lots 12 & 8 (n/f Acadia-PA East Fordham Acquisitions LLC), Block 3033 north 85 degrees 39 minutes 56 seconds west, a distance of 117.22 feet to a point on the aforementioned easterly side of Webster Avenue; thence

4.   Along said easterly side of Webster Avenue, north 08 degrees 26 minutes 11 seconds east, a distance of 25.54 feet to the point or place of BEGINNING.

This description is prepared in accordance with a Survey made by Control Point Associates Inc. dated 8/30/07 and last revised 9/18/07 by Gregory A. Gallas NY P.L.S. (Control Point Associates Inc.)

PARCEL III - LOT 12:

ALL THAT CERTAIN plot, piece or parcel of land, together with any improvements thereon situate, situate, lying and being in the Borough and County of Bronx, City and State of New York, bounded and described as follows:

BEGINNING at a point formed by the intersection of the easterly side of Webster Avenue (100 feet wide) with the southerly side of East Fordham Road (A.K.A. Pelham Avenue, Variable Width) and from said point of beginning.

RUNNING THENCE the following three (3) courses along said southerly side of East Fordham Road;

1.   South 84 degrees 34 minutes 46 seconds east, a distance of 43.27 feet to a point, THENCE

2.   South 54 degrees 01 minute 22 seconds east, a distance of 29.77 feet to   a point; THENCE;

3.   South 40 degrees 09 minutes 32 seconds east, a distance of 85.32 feet to a point on the westerly side of Park Avenue (Variable Width) THENCE

4.   Along said westerly side of Park Avenue, south 00 degrees 10 minutes 48 seconds east, a distance of 201.71 feet to a point THENCE

5.   Along the dividing line between Lot 12 (Lands now or formerly of Acadia-PA East Fordham Acquisitions LLC) and Lot 4 (Lands now or formerly of Automotive Realty Corporation), Block 3033, North 85 degrees 39 minutes 56 seconds west, a distance of 53.59 feet to a point, THENCE

6.   Along the common dividing line between the aforementioned Lot 12, Lot 8 (Land now or formerly of Acadia-PA East Fordham Acquisitions LLC) and Lot 9 (lands now or formerly of Acadia-PA East Fordham Acquisitions LLC) Block 3033, North 04 degrees 33 minutes 31 seconds east, a distance of 24.68 feet to a point, THENCE, The following three (3) courses along the dividing line between the aforementioned Lots 12 and 9;

  

  

  

7.   South 85 degrees 39 minutes 56 seconds east, a distance of 8.25 feet to a point, THENCE

8.   North 03 degrees 58 minutes 56 seconds east, a distance of 25.48 feet to a point, THENCE

9.   North 85 degrees 39 minutes 56 seconds west, a distance of 115.24 feet to a point on the aforementioned easterly side of Webster Avenue, THENCE

10.  Along said easterly side of Webster Avenue, north 08 degrees 26 minutes 11 seconds east, a distance of 228.81 feet to the point and place of BEGINNING.

  

  

  

EXHIBIT B

 

BUDGET

 

 

 

  

  

  

 

 

  

  

  

 

 

 

 

 

  

  

  

EXHIBIT C-1

 

FORM OF PROJECT LOAN NOTE

 

PROJECT LOAN NOTE

 

 

	$___________  	
___________, 200_

New York, New York

 

FOR VALUE RECEIVED, ACADIA-PA EAST FORDHAM ACQUISITIONS, LLC, a Delaware limited liability company and FORDHAM PLACE OFFICE LLC (individually and collectively, jointly and severally, the “Borrower”), hereby promises to pay to ________________________(the “Lender”), for account of its respective Applicable Lending Offices provided for by the Agreement referred to below, at the principal office of EUROHYPO AG, NEW YORK BRANCH, at 1114 Avenue of the Americas, 29th Floor, New York, New York 10036, the principal sum of ______________ and ________ Dollars ($___________) (or such lesser amount as shall equal the aggregate unpaid principal amount of the Loans made by the Lender to Borrower under the Agreement), in lawful money of the United States of America and in immediately available funds, on the dates and in the principal amounts provided in the Agreement, and to pay interest on the unpaid principal amount of each such Loan, at such office, in like money and funds, for the period commencing on the date of such Loan until such Loan shall be paid in full, at the rates per annum and on the dates provided in the Agreement.

 

With respect to the definition of “Borrower”, except where the context otherwise provides, (i) any representations contained herein of Borrower shall be applicable to each Borrower, (ii) any affirmative covenants contained herein shall be deemed to be covenants of each Borrower and shall require performance by all Borrowers, (iii) any negative covenants contained herein shall be deemed to be covenants of each Borrower, and shall be breached if any Borrower fails to comply therewith, (iv) the occurrence of any Event of Default with respect to any Borrower shall be deemed to be an Event of Default hereunder, and (v) any Indebtedness and/or obligations of Borrower shall be deemed to include any Indebtedness and/or obligations of the Borrowers, or any Indebtedness and/or obligations of any one of them.

 

The date, amount, Type, interest rate and duration of Interest Period (if applicable) of each Loan made by the Lender to Borrower, and each payment made on account of the principal thereof, shall be recorded by the Lender on its books and, prior to any transfer of this Note, endorsed by the Lender on the schedule attached hereto or any continuation thereof, provided that the failure of the Lender to make any such recordation or endorsement shall not affect the obligations of Borrower to make a payment when due of any amount owing under the Agreement or hereunder in respect of the Loans made by the Lender.

 

This Project Loan Note is one of the Notes referred to in the Acquisition and Project Loan Agreement dated as of the date hereof (as modified, supplemented, extended and in effect from time to time, the “Agreement”) among Borrower, the lenders party thereto (including the Lender) and Eurohypo AG, New York Branch, as Administrative Agent, and evidences Loans made by the Lender thereunder.  Terms used but not defined in this Note have the respective meanings assigned to them in the Agreement.

 

  

  

  

The Agreement provides for the acceleration of the maturity of this Note upon the occurrence of certain events and for prepayments of Loans upon the terms and conditions specified therein.

 

Except as permitted by Sections 12.8 and 12.23 of the Agreement, this Note may not be assigned by the Lender to any other Person.

 

This Note shall be governed by, and construed in accordance with, the law of the State of New York without regard to conflicts of laws principles other than Section 5-1401 of the General Obligations Law of the State of New York.

 

As long as a Hedge Agreement with the Eurohypo Counterparty is in effect, the interest payable under this Note shall be increased or decreased from time to time in accordance with such Hedge Agreement.  Therefore, this Note also evidences such amounts as may become due and payable by Borrower under the Hedge Agreement with the Eurohypo Counterparty, including, without limitation, any amount payable upon or in connection with termination of such Hedge Agreement, all of which sums shall be deemed to constitute “Additional Interest” evidenced hereby and payable pursuant to this Note and in accordance with the terms and provisions of the Hedge Agreement with a Eurohypo Counterparty.

 

 

[No further text on this page]

 

 

 

 

 

  

  

  

 

IN WITNESS WHEREOF, Borrower has executed and delivered this Note as of the date first above written.

 

 

ACADIA-PA EAST FORDHAM ACQUISITIONS, LLC, a Delaware limited liability company

 

By:__________________________

      Name:  Robert Masters

      Title:    Senior Vice President

FORDHAM PLACE OFFICE LLC, a Delaware limited liability company

 

By:__________________________

  Name:  Robert Masters

  Title:    Senior Vice President

 

 

  

  

  

EXHIBIT C-2

 

FORM OF BUILDING LOAN NOTE

 

BUILDING LOAN NOTE

 

 

	$___________  	
  ____________, 2007

New York, New York

 

FOR VALUE RECEIVED, ACADIA-PA EAST FORDHAM ACQUISITIONS, LLC, a Delaware limited liability company and FORDHAM PLACE OFFICE LLC (individually and collectively, jointly and severally, the “Borrower”), hereby promises to pay to ______________________ (the “Lender”), for account of its respective Applicable Lending Offices provided for by the Agreement referred to below, at the principal office of EUROHYPO AG, NEW YORK BRANCH, at 1114 Avenue of the Americas, 29th Floor, New York, New York 10036, the principal sum of ______________ and _______ Dollars ($___________) (or such lesser amount as shall equal the aggregate unpaid principal amount of the Loans made by the Lender to Borrower under the Agreement), in lawful money of the United States of America and in immediately available funds, on the dates and in the principal amounts provided in the Agreement, and to pay interest on the unpaid principal amount of each such Loan, at such office, in like money and funds, for the period commencing on the date of such Loan until such Loan shall be paid in full, at the rates per annum and on the dates provided in the Agreement.

 

With respect to the definition of “Borrower”, except where the context otherwise provides, (i) any representations contained herein of Borrower shall be applicable to each Borrower, (ii) any affirmative covenants contained herein shall be deemed to be covenants of each Borrower and shall require performance by all Borrowers, (iii) any negative covenants contained herein shall be deemed to be covenants of each Borrower, and shall be breached if any Borrower fails to comply therewith, (iv) the occurrence of any Event of Default with respect to any Borrower shall be deemed to be an Event of Default hereunder, and (v) any Indebtedness and/or obligations of Borrower shall be deemed to include any Indebtedness and/or obligations of the Borrowers, or any Indebtedness and/or obligations of any one of them.

 

The date, amount, Type, interest rate and duration of Interest Period (if applicable) of each Loan made by the Lender to Borrower, and each payment made on account of the principal thereof, shall be recorded by the Lender on its books and, prior to any transfer of this Note, endorsed by the Lender on the schedule attached hereto or any continuation thereof, provided that the failure of the Lender to make any such recordation or endorsement shall not affect the obligations of Borrower to make a payment when due of any amount owing under the Agreement or hereunder in respect of the Loans made by the Lender.

 

This Building Loan Note is one of the Notes referred to in the Acquisition and Project Loan Agreement dated as of the date hereof (as modified, supplemented, extended and in effect from time to time, the “Agreement”) and the Building Loan Agreement, each among Borrower, the lenders party thereto (including the Lender) and Eurohypo AG, New York Branch, as Administrative Agent, and evidences Loans made by the Lender thereunder.  Terms used but not defined in this Note have the respective meanings assigned to them in the Agreement.

 

  

  

  

The Agreement provides for the acceleration of the maturity of this Note upon the occurrence of certain events and for prepayments of Loans upon the terms and conditions specified therein.

 

Except as permitted by Sections 12.8 and 12.23 of the Agreement, this Note may not be assigned by the Lender to any other Person.

 

This Note shall be governed by, and construed in accordance with, the law of the State of New York without regard to conflicts of laws principles other than Section 5-1401 of the General Obligations Law of the State of New York.

 

As long as a Hedge Agreement with the Eurohypo Counterparty is in effect, the interest payable under this Note shall be increased or decreased from time to time in accordance with such Hedge Agreement.  Therefore, this Note also evidences such amounts as may become due and payable by Borrower under the Hedge Agreement with the Eurohypo Counterparty, including, without limitation, any amount payable upon or in connection with termination of such Hedge Agreement, all of which sums shall be deemed to constitute “Additional Interest” evidenced hereby and payable pursuant to this Note and in accordance with the terms and provisions of the Hedge Agreement with a Eurohypo Counterparty.

 

 

[No further text on this page]

  

  

  

 

IN WITNESS WHEREOF, Borrower has executed and delivered this Note as of the date first above written.

 

 

ACADIA-PA EAST FORDHAM

ACQUISITIONS, LLC, a Delaware limited

liability company

 

By:__________________________

      Name:  Robert Masters

      Title:    Senior Vice President

FORDHAM PLACE OFFICE LLC, a

Delaware limited liability company

 

By:__________________________

      Name:  Robert Masters

      Title:    Senior Vice President

 

  

  

  

EXHIBIT C-3

 

FORM OF ACQUISITION LOAN NOTE

 

ACQUISITION LOAN NOTE

 

 

 

 

	$___________  	
  ____________, 2007

New York, New York

 

FOR VALUE RECEIVED, ACADIA-PA EAST FORDHAM ACQUISITIONS, LLC, a Delaware limited liability company and FORDHAM PLACE OFFICE LLC (individually and collectively, jointly and severally, the “Borrower”), hereby promises to pay to _________________ (the “Lender”), for account of its respective Applicable Lending Offices provided for by the Agreement referred to below, at the principal office of EUROHYPO AG, NEW YORK BRANCH, at 1114 Avenue of the Americas, 29th Floor, New York, New York 10036, the principal sum of ______________ and __________ Dollars ($_________) (or such lesser amount as shall equal the aggregate unpaid principal amount of the Loans made by the Lender to Borrower under the Agreement), in lawful money of the United States of America and in immediately available funds, on the dates and in the principal amounts provided in the Agreement, and to pay interest on the unpaid principal amount of each such Loan, at such office, in like money and funds, for the period commencing on the date of such Loan until such Loan shall be paid in full, at the rates per annum and on the dates provided in the Agreement.

 

With respect to the definition of “Borrower”, except where the context otherwise provides, (i) any representations contained herein of Borrower shall be applicable to each Borrower, (ii) any affirmative covenants contained herein shall be deemed to be covenants of each Borrower and shall require performance by all Borrowers, (iii) any negative covenants contained herein shall be deemed to be covenants of each Borrower, and shall be breached if any Borrower fails to comply therewith, (iv) the occurrence of any Event of Default with respect to any Borrower shall be deemed to be an Event of Default hereunder, and (v) any Indebtedness and/or obligations of Borrower shall be deemed to include any Indebtedness and/or obligations of the Borrowers, or any Indebtedness and/or obligations of any one of them.

 

The date, amount, Type, interest rate and duration of Interest Period (if applicable) of each Loan made by the Lender to Borrower, and each payment made on account of the principal thereof, shall be recorded by the Lender on its books and, prior to any transfer of this Note, endorsed by the Lender on the schedule attached hereto or any continuation thereof, provided that the failure of the Lender to make any such recordation or endorsement shall not affect the obligations of Borrower to make a payment when due of any amount owing under the Agreement or hereunder in respect of the Loans made by the Lender.

 

This Acquisition Loan Note is one of the Notes referred to in the Acquisition and Project Loan Agreement dated as of the date hereof (as modified, supplemented, extended and in effect from time to time, the “Agreement”) among Borrower, the lenders party thereto (including the Lender) and Eurohypo AG, New York Branch, as Administrative Agent, and evidences Loans made by the Lender thereunder.  Terms used but not defined in this Note have the respective meanings assigned to them in the Agreement.

  

  

  

 

The Agreement provides for the acceleration of the maturity of this Note upon the occurrence of certain events and for prepayments of Loans upon the terms and conditions specified therein.

 

Except as permitted by Sections 12.8 and 12.23 of the Agreement, this Note may not be assigned by the Lender to any other Person.

 

This Note shall be governed by, and construed in accordance with, the law of the State of New York without regard to conflicts of laws principles other than Section 5-1401 of the General Obligations Law of the State of New York.

 

As long as a Hedge Agreement with the Eurohypo Counterparty is in effect, the interest payable under this Note shall be increased or decreased from time to time in accordance with such Hedge Agreement.  Therefore, this Note also evidences such amounts as may become due and payable by Borrower under the Hedge Agreement with the Eurohypo Counterparty, including, without limitation, any amount payable upon or in connection with termination of such Hedge Agreement, all of which sums shall be deemed to constitute “Additional Interest” evidenced hereby and payable pursuant to this Note and in accordance with the terms and provisions of the Hedge Agreement with a Eurohypo Counterparty.

 

 

[No further text on this page]

 

 

 

 

  

  

  

 

IN WITNESS WHEREOF, Borrower has executed and delivered this Note as of the date first above written.

 

 

ACADIA-PA EAST FORDHAM

ACQUISITIONS, LLC, a Delaware limited

liability company

 

By:__________________________

      Name:  Robert Masters

      Title:    Senior Vice President

FORDHAM PLACE OFFICE LLC, a

Delaware limited liability company

 

By:__________________________

      Name:  Robert Masters

      Title:    Senior Vice President

 

  

  

  

EXHIBIT D

 

FORM OF ASSIGNMENT AND ASSUMPTION

 

ASSIGNMENT AND ASSUMPTION

 

This Assignment and Assumption (the “Assignment and Assumption”) is dated as of the Effective Date set forth below and is entered into by and between [Insert name of Assignor] (the “Assignor”) and [Insert name of Assignee] (the “Assignee”).  Capitalized terms used but not defined herein shall have the meanings given to them in the Loan Agreements identified below (as amended, the “Loan Agreements”), receipt of a copy of which is hereby acknowledged by the Assignee.  The Standard Terms and Conditions set forth in Annex 1 attached hereto are hereby agreed to and incorporated herein by reference and made a part of this Assignment and Assumption as if set forth herein in full.

 

For an agreed consideration, the Assignor hereby irrevocably sells and assigns to the Assignee, and the Assignee hereby irrevocably purchases and assumes from the Assignor, subject to and in accordance with the Standard Terms and Conditions and the Loan Agreements, as of the Effective Date inserted by Administrative Agent as contemplated below (i) all of the Assignor’s rights and obligations in its capacity as a Lender under the Loan Agreements and any other documents or instruments delivered pursuant thereto to the extent related to the amount and percentage interest identified below of all of such outstanding rights and obligations of the Assignor under the respective facilities identified below (including any letters of credit included in such facilities) and (ii) to the extent permitted to be assigned under applicable law, all claims, suits, causes of action and any other right of the Assignor (in its capacity as a Lender) against any Person, whether known or unknown, arising under or in connection with the Loan Agreements, any other documents or instruments delivered pursuant thereto or the loan transactions governed thereby or in any way based on or related to any of the foregoing, including contract claims, tort claims, malpractice claims, statutory claims and all other claims at law or in equity related to the rights and obligations sold and assigned pursuant to clause (i) above (the rights and obligations sold and assigned pursuant to clauses (i) and (ii) above being referred to herein collectively as the “Assigned Interest”).  Such sale and assignment is without recourse to the Assignor and, except as expressly provided in this Assignment and Assumption, without representation or warranty by the Assignor.

 

	
1.

	
Assignor:

	
______________________________

	 	 	 
	
2.

	
Assignee:

	
______________________________

	  	  	
[and is an Approved Fund or an Affiliate of [identify Lender]1]

	
3.

	
Borrower:

	  
	 	 	 
	
4.

	
Administrative Agent:

	
Eurohypo, AG, New York Branch, as administrative agent under the Loan Agreements

	 	 	 
	
5.

	
Construction Loan Agreement:

	
The (i) $__________ Acquisition and Project Loan Agreement and (ii) $__________ Building Loan Agreement, each dated as of ______ __, 200__, among Borrower, the Lenders parties thereto, and Eurohypo, AG, New York Branch, as Administrative Agent

1 Select as applicable.

 

	
6.

	
Assigned Interest:

 

	
Commitment/

Loans Assigned

	
Aggregate Amount

of

Commitment/Loans

for all Lenders

	
Amount of

Loans

Assigned

	
Amount of

Unused

Commitment

Assigned

	
Percentage

Assigned of

Commitment

and Loans2

	
Acquisition Loan

	
$

	
$

	
$

	
%

	
Project Loan

	
$

	
$

	
$

	
%

	
Building Loan

	
$

	
$

	
$

	
%

 

Effective Date:   _____________ ___, 20___ [TO BE INSERTED BY ADMINISTRATIVE AGENT AND WHICH SHALL BE THE EFFECTIVE DATE OF RECORDATION OF TRANSFER IN THE REGISTER THEREFOR.]

 

The terms set forth in this Assignment and Assumption are hereby agreed to:

 

 

	 	 	
ASSIGNOR

	 	 	 
	 	 	
[NAME OF ASSIGNOR]

	 	 	 
	 	 By: 	
___________________________________

	 	 	
Name:

	 	 	
Title:

	 	 	 
	 	 	
ASSIGNEE

	 	 	 
	 	 	
[NAME OF ASSIGNEE]

	 	 	 
	 	 By: 	
___________________________________

	 	 	
Name:

	 	 	
Title:

	 	 	 
	 	 	
Applicable Lending Office

	 	 	 
	 	 	
Address for Notices:

	 	 	
Telephone No.: (   )

	 	 	
Telecopier No.: (   )

 

2 Set forth, to at least 9 decimals, as a percentage of the Commitment/Loans of all Lenders thereunder.

 

  

  

  

 

	
[Consented to and]3 Accepted:

	 
	
EUROHYPO AG, NEW YORK BRANCH, as

	
  Administrative Agent

	
By:____________________________________

	
     Name:

	
    Title:

	
By____________________________________

	
    Name:

	
    Title:

3 To be added only if the consent of Administrative Agent is required by the terms of the Loan Agreements.

 

 

 

  

  

  

ANNEX 1

 

STANDARD TERMS AND CONDITIONS FOR

 

ASSIGNMENT AND ASSUMPTION

 

1.           Representations and Warranties.

 

1.1           Assignor.  The Assignor (a) represents and warrants that (i) it is the legal and beneficial owner of the Assigned Interest, (ii) the Assigned Interest is free and clear of any lien, encumbrance or other adverse claim and (iii) it has full power and authority, and has taken all action necessary, to execute and deliver this Assignment and Assumption and to consummate the transactions contemplated hereby; and (b) assumes no responsibility with respect to (i) any statements, warranties or representations made in or in connection with the Loan Agreements or any other Loan Document, (ii) the execution, legality, validity, enforceability, genuineness, sufficiency or value of the Loan Documents or any collateral thereunder, (iii) the financial condition of Borrower, any of its Subsidiaries or Affiliates or any other Person obligated in respect of any Loan Document or (iv) the performance or observance by Borrower, any of its Subsidiaries or Affiliates or any other Person of any of their respective obligations under any Loan Document.

 

1.2.           Assignee.  The Assignee (a) represents and warrants that (i) it has full power and authority, and has taken all action necessary, to execute and deliver this Assignment and Assumption and to consummate the transactions contemplated hereby and to become a Lender under the Loan Agreements, (ii) it satisfies the requirements, if any, specified in the Loan Agreements that are required to be satisfied by it in order to acquire the Assigned Interest and become a Lender, (iii) from and after the Effective Date, it shall be bound by the provisions of the Loan Agreements as a Lender thereunder and, to the extent of the Assigned Interest, shall have the obligations of a Lender thereunder, (iv) it has received a copy of the Loan Agreements, together with copies of the most recent financial statements delivered pursuant to Section 5.01 thereof, as applicable, and such other documents and information as it has deemed appropriate to make its own credit analysis and decision to enter into this Assignment and Assumption and to purchase the Assigned Interest on the basis of which it has made such analysis and decision independently and without reliance on Administrative Agent or any other Lender, and (v) if it is a Foreign Lender, attached to the Assignment and Assumption is any documentation required to be delivered by it pursuant to the terms of the Loan Agreements, duly completed and executed by the Assignee; and (b) agrees that (i) it will, independently and without reliance on Administrative Agent, the Assignor or any other Lender, and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under the Loan Documents, and (ii) it will perform in accordance with their terms all of the obligations which by the terms of the Loan Documents are required to be performed by it as a Lender.

 

2.           Payments.    From and after the Effective Date, Administrative Agent shall make all payments in respect of the Assigned Interest (including payments of principal, interest, fees and other amounts) to the Assignor for amounts which have accrued to but excluding the Effective Date and to the Assignee for amounts which have accrued from and after the Effective Date.

 

3.           General Provisions. This Assignment and Assumption shall be binding upon, and inure to the benefit of, the parties hereto and their respective successors and assigns.  This Assignment and Assumption may be executed in any number of counterparts, which together shall constitute one instrument.  Delivery of an executed counterpart of a signature page of this Assignment and Assumption by telecopy shall be effective as delivery of a manually executed counterpart of this Assignment and Assumption.  This Assignment and Assumption shall be governed by, and construed in accordance with, the law of the State of New York.

  

  

  

 

EXHIBIT E

 

FORM OF NOTICE OF CONVERSION/CONTINUATION

 

_______________, 200_

 

Eurohypo AG, New York Branch, as Administrative Agent

1114 Avenue of the Americas, 29th Floor

New York, New York 10036

Attn: ___________________________

 

	
Re:

	
(i) Acquisition and Project Loan Agreement dated as of October __, 2007 (as the same may be amended, modified or supplemented from time to time, the “Agreement”) and (ii) Building Loan Agreement, dated as of October __, 2007, each by and among ACADIA-PA EAST FORDHAM ACQUISITIONS, LLC, a Delaware limited liability company and FORDHAM PLACE OFFICE LLC, a Delaware limited liability company (jointly and severally, individually and collectively the “Borrower”), the lenders from time to time party to the Agreement (the “Lenders”), and EUROHYPO AG, NEW YORK BRANCH, as Administrative Agent on behalf of the Lenders (the “Administrative Agent”)

 

	
  

	
Ladies and Gentlemen:

 

Reference is made to the Agreement.  Capitalized terms used in this Notice of Conversion/Continuation without definition have the meanings specified in the Agreement.

 

Pursuant to Section 2.2 of the Agreement, Borrower hereby elects to convert or continue the loans described in attached Schedule 1 (the “Loans”).  In connection therewith, Borrower and the undersigned authorized officer of Borrower hereby certify that:

 

(1)           Representations and Warranties.  All representations and warranties of Borrower contained in the Loan Documents, including those contained in Article 7 of the Agreement, are true and correct as of the date hereof and shall be true and correct on the date of the continuation/conversion of the Loans, both before and after giving effect to such continuation/conversion; and

 

(2)           No Event of Default.  No Event of Default exists as of the date hereof or will result from the continuation/conversion of the Loans.

 

	 	
ACADIA-PA EAST FORDHAM ACQUISITIONS,

LLC, a Delaware limited liability company

	 	
By: ________________________________

	 	
Name:

	 	
Title:

 

  

  

  

Schedule 1

 

to Notice of Conversion/Continuation

 

LOAN(S) TO BE CONVERTED OR CONTINUED

 

	
A.

	
All conversions and continuations must be of a Loan, or portion thereof, in a principal amount of $1,000,000 or a multiple of $100,000 in excess thereof.

 

	
B.

	
Conversions/continuations to a Eurodollar Loan under paragraphs C(1) and (2) below are not permitted if, after giving effect to thereto, (a) there would be more than four (4) different Eurodollar Loans in effect, or (b) the aggregate outstanding principal amount of all Eurodollar Loans would be reduced to be less than $1,000,000.

 

	
C.

	
Pursuant to Section 2.2 of the Agreement, Borrower elects to Continue or Convert Loans as follows:

 

	
  

	
(1)

	
Effective Date of Election:

	
_________ __, 200_

 

	
  

	
(2)

	
Amount, Type and Interest Period of Eurodollar Loans to be Continued as Eurodollar Loans:

 

	
  

	
(i)

	
Eurodollar Loans in the aggregate amount of $____________ to be Continued as Eurodollar Loans with an Interest Period of ___ months, such Eurodollar Loans consisting of the following Loans:

 

Project Loans:                                   $___________

Building Loans:                                $___________

Acquisition Loans:                          $___________

 

	
  

	
(3)

	
Amount, Type and Interest Period of Alternate Base Rate Loans to be Converted to Eurodollar Loans:

 

	
  

	
(i)

	
Alternate Base Rate Loans in the aggregate amount of $____________ to be Converted to Eurodollar Loans with an Interest period of ___ months, such Alternate Base Rate Loans consisting of the following Loans:

 

Project Loans:                                   $___________

Building Loans:                                $___________

Acquisition Loans:                          $___________

 

	
  

	
(4)

	
Amount and Type of Eurodollar Loans to be Converted to Alternate Base Rate Loans:

 

	
  

	
(i)

	
Eurodollar Loans in the aggregate amount of $____________ to be Converted to Alternate Base Rate Loans, such Eurodollar Loans consisting of the following Loans:

 

Project Loans:                                   $___________

Building Loans:                                $___________

Acquisition Loans:                          $___________

 

 

  

  

  

EXHIBIT F-1

 

FORM OF REQUEST FOR LOAN ADVANCE (PROJECT LOANS)

 

REQUEST FOR LOAN ADVANCE (PROJECT LOANS)

 

_______________, 200_

 

Eurohypo AG, New York Branch, as Administrative Agent

1114 Avenue of the Americas, 29th Floor

New York, New York 10036

Attn: __________________________

 

	
Re:

	
Eurohypo AG, New York Branch, as Administrative Agent, Loans in the aggregate amount of $__________ to _______________

 

Project:

 

Ladies and Gentlemen:

 

Reference is made to that certain (i) Acquisition and Project Loan Agreement dated October ____, 2007 among Eurohypo AG, New York Branch, as Administrative Agent, certain lenders thereto, Fordham Place Office LLC and the undersigned (the “Loan Agreement”) and (ii) Building Loan Agreement, dated October _____, 2007 among Eurohypo AG, New York Branch, as Administrative Agent, certain lenders thereto, Fordham Place Office LLC and the undersigned (the “Building Loan Agreement”).  Terms not defined in this Request for Loan Advance shall have the same meaning as in the Loan Agreement.

 

This Request for Loan Advance (Project Loans) (i) is request No. __________ under the Loan Agreement with respect to Project Loans, (ii) constitutes Borrower’s request to borrow Project Loans in the amounts and in the manner set forth below and (iii) is otherwise subject to the terms of the Loan Agreement.  The information relating to the proposed Project Loans is as follows:

 

	
  

	
1.

	
The date of the proposed Project Loans is __________, _____.

 

	
  

	
2.

	
The aggregate amount of the proposed Project Loans (after deducting an aggregate Retainage of $__________) is 

	
$__________.

 

	
  

	
3.

	
The aggregate amount of the proposed Project Loans which are to bear interest as Base Rate Loans is 

	
$__________.

 

	
  

	
4.

	
The aggregate amount of the proposed Project Loans which are to bear interest as Eurodollar Loans is 

	
$__________.

 

	
  

	
5.

	
The Interest Periods and the aggregate amount of the proposed Eurodollar Loans with respect to each such Interest Period are as follows:

 

  

  

  

 

– 1 month                      $__________.

– 2 month                      $__________.

– 3 month                      $__________.

– 6 month                      $__________.

– 9 month                      $__________.

– 12 month                    $__________.

 

6.           The aggregate amount of Project Loans requested hereunder, when added to prior (if any) Project Loans funded under the Loan Agreement, will result in total Project Loans outstanding under the Loan Agreement of $__________.  Funds undrawn under the aggregate Project Loan Commitments after giving effect to the Project Loans requested hereunder will then be $__________.

 

Attached to this Request for Loan Advance are the following items:

 

	
  

	
A.

	
To the extent not previously delivered to Administrative Agent, for funds due under the Construction Management Agreement, copies of the Construction Manager’s invoices relating to payments requested under this Request for Loan Advance, together with paid invoices evidencing payment of funds previously advanced to the Construction Manager pursuant to Project Loans;

 

	
  

	
B.

	
To the extent not previously delivered to Administrative Agent, for funds paid directly by Borrower, copies of all invoices relating to payments requested under this Request for Loan Advance, together with paid invoices evidencing payment of funds previously advanced to Borrower pursuant to Project Loans;

 

	
  

	
C.

	
Copy of the Budget attached as Schedule 1 hereto, showing the portion of each budget line item comprising the aggregate Project Loans subject to this request and any Retainage with respect thereto, and the total of all Project Loans to date, inclusive of the Project Loans subject to this request;

 

	
  

	
D.

	
If this Request for Loan Advance covers any stored materials under Section 4.8 of the Building Loan Agreement, a Stored Materials Statement in the form of Schedule 2 attached thereto.

 

	
  

	
E.

	
Copies of sworn unconditional lien wavers from each trade contractor, subcontractor, materialman, supplier and vendor who is to be paid from the proceeds of this Advance, to the extent not previously delivered to Administrative Agent;

 

	
  

	
F.

	
Borrower’s Architect’s Certificate for Payment in accordance with AIA Document G 702;

 

	
  

	
G.

	
Requisition form duly executed by the Construction Manager; and

 

	
  

	
H.

	
Copies of all other documents required pursuant to Article IV and Schedule 4 of the Loan Agreement.

 

  

  

  

In connection with this advance, Borrower hereby certifies that the following are true and correct:

 

	
  

	
I.

	
To the best of its knowledge, the facts set forth in the Construction Manager’s invoices and in Schedule 1 and Schedule 2;

 

	
  

	
II.

	
Except for contractors, subcontractors, materialmen, suppliers or vendors who are to be paid from proceeds of the Project Loans requested hereunder, there is no outstanding Indebtedness of the undersigned for labor, wages or materials in connection with the construction of the Improvements which is currently due, excluding work that is being contested in good faith, and which could become the basis of a Lien on the Project;

 

	
  

	
III.

	
All sums previously requisitioned have been applied to the payment of the Hard Costs and the Soft Costs, excluding work that is being contested in good faith, heretofore incurred;

 

	
  

	
IV.

	
All Change Orders have been submitted to Administrative Agent and the Construction Consultant and all Change Orders for which a Project Loan is requested hereby have been approved by Administrative Agent and the Construction Consultant to the extent required by the Loan Agreement;

 

	
  

	
V.

	
In the judgment of Borrower, the Improvements are _____% complete; and

 

	
  

	
VI.

	
To the best of its knowledge, Borrower is not in Potential Default or Event of Default under any of the terms and conditions of the Loan Documents;

 

	
  

	
VII.

	
After giving effect to this advance, the Loans will remain In Balance, in accordance with Section 4.3 of the Loan Agreement, and all conditions to this advance have been satisfied in accordance with Section 4.1 of the Loan Agreement;

 

	
  

	
VIII.

	
Each representation and warranty of Borrower set forth in the Loan Agreement remains true and correct in all material respects as of the date of this Request for Loan Advance and will be so on the date of disbursement of the requested Loan, except with respect to (a) matters which have been disclosed in writing to and approved by Administrative Agent (subject, however, to the terms of the Loan Agreement) or (b) liens of mechanics and materialmen (subject to Schedule 4 – Part A, [paragraph 3]) and matters addressed in Section 3.1 of the Loan Agreement, which would not, if adversely decided, have a Material Adverse Effect;

 

	
  

	
IX.

	
No litigation or arbitral proceedings are pending or, to the best of Borrower’s knowledge, threatened against Borrower, Guarantor or the Property Manager, which is likely to (1) affect the validity or priority of the liens of the Mortgages or (2) or, if adversely decided, have a Material Adverse Effect; and

 

	
  

	
X.

	
All Government Approvals, to the extent then required for the construction of the Construction Work, have been obtained and that all Applicable Laws relating to the construction and operation of the Project have been and will continue to be complied with.

 

The undersigned requests that the requested Project Loans be advanced by depositing the same into Borrower’s account to be designated by Borrower (Account No. __________).  The person signing this Request for Loan Advance (Project Loans) on behalf of Borrower represents and warrants to you that such person is authorized to execute this letter on behalf of Borrower.

 

[Signature Page Follows]

  

  

  

 

	 	
ACADIA-PA EAST FORDHAM ACQUISITIONS, LLC,

a Delaware limited liability company

	 	
By: _____________________________                                                               

Name:

Title:

	 	
 

 

RECEIVED:

 

EUROHYPO AG, NEW YORK BRANCH,

as Administrative Agent

 

By: _______________________________________

       Name:

       Title:

 

By: _______________________________________

       Name:

       Title:

 

cc:           [CONSTRUCTION CONSULTANT] (with attachments)

  

  

  

 

SCHEDULE 1 – to Request for Loan Advance

 

[Attach form of Budget Outline to be Used]

 

 

 

 

 

 

 

  

  

  

Page _____ of _____ Pages

 

SCHEDULE 2 – to Request for Loan Advance

 

STORED MATERIALS STATEMENT NO.

 

Borrower:  _______________                                                                                                                                          Period Covered (PC):  From _______ To ________

 

Project: _______________                                                     Date:  ______________

 

Address:  _______________

 

	
ITEM NO.

	
DESCRIPTION OF MATERIALS STORED (ATTACH INVOICES, LISTINGS AND/OR OTHER PRICE SUPPORTING DOCUMENTATION

	
LOCATION WHERE STORED

	
NAME OF SUB-CONTRACTOR/SUPPLIER

	
OPENING INVENTORY

	
ADDITIONS TO INVENTORY

	
USAGE OF INVENTORY

	
CLOSING INVENTORY

	
RETAINED AMOUNT NOT YET DUE

	  	  	  	  	  	  	  	  	  
	  	  	  	  	  	  	  	  	  

 

   TOTALS OR SUBTOTALS

 

 

  

  

  

EXHIBIT F-2

 

FORM OF REQUEST FOR LOAN ADVANCE (BUILDING LOANS)

 

REQUEST FOR LOAN ADVANCE (BUILDING LOANS)

 

_______________, 200_

 

Eurohypo AG, New York Branch, as Administrative Agent

1114 Avenue of the Americas, 29th Floor

New York, New York 10036

Attn: __________________________

 

	
  

	
Re:

	
Eurohypo AG, New York Branch, as Administrative Agent, Loans in the aggregate amount of $__________ to Acadia-PA East Fordham Acquisitions, LLC and Fordham Place Office LLC

 

Project:

 

Ladies and Gentlemen:

 

Reference is made to that certain (i) Acquisition and Project Loan Agreement dated October ____, 2007 among Eurohypo AG, New York Branch, as Administrative Agent, certain lenders thereto, Fordham Place Office LLC and the undersigned (the “Loan Agreement”) and (ii) Building Loan Agreement, dated October _____, 2007 among Eurohypo AG, New York Branch, as Administrative Agent, certain lenders thereto, Fordham Place Office LLC and the undersigned (the “Building Loan Agreement”).  Terms not defined in this Request for Loan Advance shall have the same meaning as in the Loan Agreement.

 

This Request for Loan Advance (Building Loans) (i) is request No. __________ under the Loan Agreement with respect to Building Loans, (ii) constitutes Borrower’s request to borrow Building Loans in the amounts and in the manner set forth below and (iii) is otherwise subject to the terms of the Loan Agreement and the Building Loan Agreement.  The information relating to the proposed Building Loans is as follows:

 

	
  

	
1.

	
The date of the proposed Building Loans is _________, ____.

 

	
  

	
2.

	
The aggregate amount of the proposed Building Loans (after deducting an aggregate Retainage of $__________) is 

	
$__________.

 

	
  

	
3.

	
The aggregate amount of the proposed Building Loans which are to bear interest as Base Rate Loans is 

	
$__________.

 

	
  

	
4.

	
The aggregate amount of the proposed Building Loans which are to bear interest as Eurodollar Loans is 

	
$__________.

 

  

  

  

	
  

	
5.

	
The Interest Periods and the aggregate amount of the proposed Eurodollar Loans with respect to each such Interest Period are as follows:

 

– 1 month                      $__________.

– 2 month                      $__________.

– 3 month                      $__________.

– 6 month                      $__________.

– 9 month                      $__________.

– 12 month                    $__________.

 

	
  

	
6.

	
The aggregate amount of Building Loans requested hereunder, when added to prior (if any) Building Loans funded under the Building Loan Agreement, will result in total Building Loans outstanding under the Building Loan Agreement of $__________.  Funds undrawn under the aggregate Building Loan Commitments after giving effect to the Building Loans requested hereunder will then be $__________.

 

Attached to this Request for Loan Advance (Building Loans) are the following items:

 

	
  

	
A.

	
To the extent not previously delivered to Administrative Agent, for funds due under the Construction Management Agreement, copies of the Construction Manager’s invoices relating to payments requested under this Request for Loan Advance (Building Loans), together with paid invoices evidencing payment of funds previously advanced to the Construction Manager pursuant to Building Loans;

 

	
  

	
B.

	
To the extent not previously delivered to Administrative Agent, for funds paid directly by Borrower, copies of all invoices relating to payments requested under this Request for Loan Advance (Building Loans), together with paid invoices evidencing payment of funds previously advanced to Borrower pursuant to Building Loans;

 

	
  

	
C.

	
Copy of the Budget attached as Schedule 1 hereto, showing the portion of each budget line item comprising the aggregate Building Loans subject to this request and any Retainage with respect thereto, and the total of all Building Loans to date, inclusive of the Building Loans subject to this request;

 

	
  

	
D.

	
If this Request for Loan Advance (Building Loans) covers any stored materials under Section 4.8 of the Building Loan Agreement, a Stored Materials Statement in the form of Schedule 2 attached thereto.

 

	
  

	
E.

	
Copies of sworn unconditional lien wavers from each trade contractor, subcontractor, materialman, supplier and vendor who is to be paid from the proceeds of this Advance, to the extent not previously delivered to Administrative Agent;

 

  

  

  

 

	
  

	
F.

	
Borrower’s Architect’s Certificate for Payment in accordance with AIA Document G 702;

 

	
  

	
G.

	
Requisition form duly executed by the Construction Manager; and

 

	
  

	
H.

	
Copies of all other documents required pursuant to Article IV and Schedule 4 of the Loan Agreement.

 

In connection with this advance, Borrower hereby certifies that the following are true and correct:

 

	
  

	
I.

	
To the best of its knowledge, the facts set forth in the Construction Manager’s invoices and in Schedule 1 and Schedule 2;

 

	
  

	
II.

	
Except for contractors, subcontractors, materialmen, suppliers or vendors who are to be paid from proceeds of the Building Loans requested hereunder, there is no outstanding Indebtedness of the undersigned for labor, wages or materials in connection with the construction of the Improvements which is currently due, excluding work that is being contested in good faith, and which could become the basis of a Lien on the Project;

 

	
  

	
III.

	
All sums previously requisitioned have been applied to the payment of the Hard Costs and the Soft Costs, excluding work that is being contested in good faith, heretofore incurred;

 

	
  

	
IV.

	
All Change Orders have been submitted to Administrative Agent and the Construction Consultant and all Change Orders for which a Building Loan is requested hereby have been approved by Administrative Agent and the Construction Consultant to the extent required by the Loan Agreement;

 

	
  

	
V.

	
In the judgment of Borrower, the Improvements are _____% complete; and

 

	
  

	
VI.

	
To the best of its knowledge, Borrower is not in Potential Default or Event of Default under any of the terms and conditions of the Loan Documents;

 

	
  

	
VII.

	
After giving effect to this advance, the Loans will remain In Balance, in accordance with Section 4.3 of the Loan Agreement, and all conditions to this advance have been satisfied in accordance with Section 4.1 of the Loan Agreement;

 

	
  

	
VIII.

	
Each representation and warranty of Borrower set forth in the Loan Agreement remains true and correct in all material respects as of the date of this Request for Loan Advance and will be so on the date of disbursement of the requested Loan, except with respect to (a) matters which have been disclosed in writing to and approved by Administrative Agent (subject, however, to the terms of the Loan Agreement) or (b) liens of mechanics and materialmen (subject to Schedule 4 – Part A, [paragraph 3]) and matters addressed in Section 3.1 of the Loan Agreement, which would not, if adversely decided, have a Material Adverse Effect;

 

	
  

	
IX.

	
No litigation or arbitral proceedings are pending or, to the best of Borrower’s knowledge, threatened against Borrower, Guarantor or the Property Manager, which is likely to (1) affect the validity or priority of the liens of the Mortgages or (2) or, if adversely decided, have a Material Adverse Effect; and

 

	
  

	
X.

	
All Government Approvals, to the extent then required for the construction of the Construction Work, have been obtained and that all Applicable Laws relating to the construction and operation of the Project have been and will continue to be complied with.

 

The undersigned requests that the requested Building Loans be advanced by depositing the same into Borrower’s account to be designated by Borrower (Account No. __________).  The person signing this Request for Loan Advance (Building Loans) on behalf of Borrower represents and warrants to you that such person is authorized to execute this letter on behalf of Borrower.

 

[Signature Page Follows]

 

 

  

  

  

 

	 	
ACADIA-PA EAST FORDHAM ACQUISITIONS, LLC,

a Delaware limited liability company

	 	
By: _____________________________                                                               

Name:

Title:

	 	
 

 

RECEIVED:

 

EUROHYPO AG, NEW YORK BRANCH,

as Administrative Agent

 

By: _______________________________________

       Name:

       Title:

 

By: _______________________________________

       Name:

       Title:

 

cc:           [CONSTRUCTION CONSULTANT] (with attachments)

 

  

  

  

 

SCHEDULE 1 – to Request for Loan Advance

 

[Attach form of Budget Outline to be Used]

 

 

 

 

 

  

  

  

Page _____ of _____ Pages

 

SCHEDULE 2 – to Request for Loan Advance

 

STORED MATERIALS STATEMENT NO.

 

Borrower:  _______________                                                                                                                                          Period Covered (PC):  From ________ To ________

 

Project: _______________                                                            Date:  _______________

 

Address:  _______________

 

	
ITEM NO.

	
DESCRIPTION OF MATERIALS STORED (ATTACH INVOICES, LISTINGS AND/OR OTHER PRICE SUPPORTING DOCUMENTATION

	
LOCATION WHERE STORED

	
NAME OF SUB-CONTRACTOR/SUPPLIER

	
OPENING INVENTORY

	
ADDITIONS TO INVENTORY

	
USAGE OF INVENTORY

	
CLOSING INVENTORY

	
RETAINED AMOUNT NOT YET DUE

	  	  	  	  	  	  	  	  	  
	  	  	  	  	  	  	  	  	  

 

   TOTALS OR SUBTOTALS

 

 

  

  

  

EXHIBIT G

 

CONTROLLED ACCOUNT AGREEMENT

 

See Attached

 

 

 

 

  

  

  

EXHIBIT H

 

ASSIGNMENT OF DECLARANT’S RIGHTS

 

Acadia PA East Fordham Acquisitions, LLC, a Delaware limited liability company, and Fordham Place Office, LLC, a Delaware limited liability company, each having an address c/o Acadia Realty Trust, 1311 Mamoroneck Avenue, Suite 260, White Plains, New York (collectively the “Assignor”), for Ten Dollars ($10.00) and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, does hereby grant, assign, transfer and set over unto EUROHYPO AG, NEW YORK BRANCH (“Administrative Agent”), all of Assignor’s right and privileges (the “Declarant’s Rights”) arising under (i) the Declaration (as defined below), and (ii) the by-laws and articles of incorporation relating to the condominium (the “Condominium”) created by the Declaration (said by-laws and articles of incorporation, together with the Declaration, collectively called the “Condominium Documents”).

 

So long as no Default or Event of Default shall exist under the Mortgages (as defined below), Assignor may exercise the Declarant’s Rights and Administrative Agent may not exercise the Declarant’s Rights, except that Assignor may not (i) transfer or encumber any of the Declarant’s Rights, except as permitted in the Mortgages, (ii) except as permitted under the Loan Agreement (as defined below) cause or allow any of the Condominium Documents that require the consent or approval of declarant to amend or which Assignor has the right to amend independently to be modified without Administrative Agent’s prior written consent or (iii) allow any of the officers or managers of the association of the Condominium which Assignor has appointed to resign or be removed from office, unless Assignor shall have caused to be delivered to Administrative Agent (A) duly executed letter of resignation from each such officer or director being added to said association in the form attached as Exhibits I and J, respectively, to the Acquisition and Project Loan Agreement, dated as of October ___, 2007, among Administrative Agent, certain lenders and Assignor, as borrower (the “Loan Agreement”) and (B) a proxy from each director in the form attached as Exhibit K to the Loan Agreement.

 

Upon the full payment and performance of all obligations secured by the Mortgage, the Declarant’s Rights shall automatically be reassigned to Assignor by Administrative Agent and this Assignment shall terminate.

 

For the purposes of this Assignment, “Declaration” shall mean the Declaration of Condominium for _______________, a condominium, dated __________, 200__, and recorded on __________, 200__, in the Public Records of __________ County, __________ in Book _____, page _____, together with all amendments thereto, if any; “Mortgages” shall mean, collectively, the mortgages dated October ____, 2007 from Assignor to Administrative Agent which secure a $__________ acquisition loan, a $__________ project loan and a $__________ building loan and which were recorded on __________, 2007 in the aforesaid Public Records in Book _____, page _____.

 

This Assignment shall be construed and enforced in accordance with the laws of the State of New York.

  

  

  

 

The rights and privileges of Administrative Agent hereunder shall inure to the benefit of its successors and assigns.

 

IN WITNESS WHEREOF, Assignor and Administrative Agent have each duly executed and delivered this Assignment this _____ day of __________, 200__.

 

	  	  	
ACADIA PA EAST FORDHAM ACQUISITIONS, LLC,

	  	  	
a Delaware limited liability company

	 	 	 
	  	
By:

	
___________________________________

	  	  	
Name:

	  	  	
Title:

	 	 	 
	  	  	
FORDHAM PLACE OFFICE LLC, a Delaware limited liability company

	 	 	 
	  	
By:

	
___________________________________

	  	  	
Name:

	  	  	
Title:

	 	 	 
	  	  	
EUROHYPO AG, NEW YORK BRANCH,

	  	  	
as Administrative Agent

	 	 	 
	  	
By:

	
___________________________________

	  	  	
Name:

	  	  	
Title:

	  	
By:

	
___________________________________

	  	  	
Name:

	  	  	
Title:

 

[add acknowledgements]

 

  

  

  

EXHIBIT I

 

CONDITIONAL RESIGNATION OF OFFICERS

 

_____________ CONDOMINIUM

 

(Resignation of Officers)

 

____________, 200__

 

Eurohypo AG, New York Branch

 as administrative agent

1114 Avenue of the Americas, 29th Floor

New York, New York  10036

Attention:

 

Re:           _____________ Condominium

 

Ladies and Gentlemen:

 

The undersigned _______________, _______________, _______________, ________________ and _______________, being all of the officers of the Owner’s Association of the referenced Condominium which were appointed by _____________________________________________________, hereby tender their respective resignations as officers hereof.  Said resignations may not be rescinded or revoked by any of the undersigned so long as you are the holder of any mortgage or deed of trust encumbering any of the unsold condominium units of said Condominium.  Said resignations shall be effective upon your acceptance thereof, without notice to the undersigned, at any time during the existence of an Event of Default under any such mortgage or deed of trust.

 

	  	
Very truly yours,

	  	
____________________________________

	  	
____________________________________

	  	
____________________________________

 

  

  

  

 

EXHIBIT J

 

CONDITIONAL RESIGNATION OF MANAGERS

 

______________ CONDOMINIUM

 

(Resignation of Managers)

 

_____________, 200__

 

Eurohypo AG, New York Branch

 as administrative agent

1114 Avenue of the Americas, 29th Floor

New York, New York  10036

Attention:

 

Re:           Condominium

 

Ladies and Gentlemen:

 

The undersigned _______________, _______________, _______________, ________________ and _______________, being all of the managers of the Board of Managers of the Owner’s Association of the referenced Condominium which were appointed by ____________________________________________________, hereby tender their respective resignations as managers thereof.  Said resignations may not be rescinded or revoked by any of the undersigned so long as you are the holder of any mortgage or deed of trust encumbering any of the unsold condominium units of said Condominium.  Said resignations shall be effective upon your acceptance thereof, without notice to the undersigned, at any time during the existence of an Event of Default under any such mortgage or deed of trust.

 

 

	  	
Very truly yours,

	  	
____________________________________

	  	
____________________________________

	  	
____________________________________

 

  

  

  

EXHIBIT K

 

VOTING PROXY

 

_____________ CONDOMINIUM

 

(Proxy)

 

____________, 200__

 

Eurohypo AG, New York Branch

 as administrative agent

1114 Avenue of the Americas, 29th Floor

New York, New York  10036

Attention:

 

Re:           ___________Condominium

 

Ladies and Gentlemen:

 

Reference is made to that certain (i) Acquisition and Project Loan Agreement, dated as of October ___, 2007 (as same may hereafter be amended, modified or supplemented, the “Agreement”) and (ii) Building Loan Agreement, dated as of October ___, 2007, each among Acadia-PA East Fordham Acquisitions, LLC, and Fordham Place Office LLC, both as borrowers (collectively the “Borrower”), the lenders party thereto (collectively, together with their successors and assigns, “Lenders”) and Eurohypo AG, New York Branch, as administrative agent (in such capacity, together with its successors and assigns, “Administrative Agent”) relating to the development of the above referenced Condominium.  All capitalized terms used herein and not defined herein shall have the meanings ascribed thereto in the Agreement.

 

Each of (a) Borrower, being the owner of the Units under the Condominium Documents, and (b) the undersigned representatives of Borrower on the board of managers of the Condominium (collectively, the “Board Members”), hereby grants to Administrative Agent (on behalf of the Lenders) this proxy to take all actions and to exercise all rights and privileges of Borrower and the Board Members pursuant to the Condominium Documents, or any of them, but only if and for so long as an Event of Default shall occur and be continuing.  Borrower and each Board Member hereby irrevocably appoints Administrative Agent as its true and lawful attorney-in-fact, which appointment is together with an interest, to execute all documents and take all actions necessary to effectuate such proxy, provided that such appointment is being made on the understanding that Administrative Agent shall only exercise the rights and powers provided in this proxy following the occurrence and during the continuance of an Event of Default.

 

This proxy may be executed in one or more counterparts, each of which shall be an original and all of which when taken together shall constitute one and the same proxy.  Nothing contained in this proxy shall impose or subject Lender to any liability or obligations or shall obligate Administrative Agent to take any actions with the powers conveyed by this proxy.  This proxy shall, notwithstanding anything to the contrary in the Condominium Documents, be irrevocable prior to the repayment in full of all of the Indebtedness.

 

  

  

  

 

	  	  	
ACADIA PA EAST FORDHAM ACQUISITIONS, LLC,

	  	  	
a Delaware limited liability company

	 	 	 
	  	
By:

	
___________________________________

	  	  	
Name:

	  	  	
Title:

	 	 	 
	  	  	
FORDHAM PLACE OFFICE LLC, a Delaware limited liability company

	 	 	 
	  	
By:

	
___________________________________

	  	  	
Name:

	  	  	Title:
	 	 	 
	  	 	
___________________________________

	  	  	
Name:

	  	 	 
	 	 	
___________________________________

	  	  	
Name:

	  	  	 
	 	 	
___________________________________

	 	 	
Name:

 

This Proxy and the powers granted and designation made hereby are acknowledged by the undersigned.

 

	 	  	 
	 	 	
_____________  CONDOMINIUM

	 	 	 
	 	 	 
	 	
By:

	
___________________________________

	 	 	
Name:

	 	 	
Title:

 

[add acknowledgements]

 

  

  

  

EXHIBIT L

 

COMMON CHARGES LETTER

 

_____________ CONDOMINIUM

(Condominium Charges)

 

____________, 200__

 

Eurohypo AG, New York Branch

as administrative agent

1114 Avenue of the Americas, 29th Floor

New York, New York  10036

Attention:

 

Re:           _____________ Condominium

 

Ladies and Gentlemen:

 

Reference is made to that certain (i) Acquisition and Project Loan Agreement, dated as of October ___, 2007 (as same may hereafter be amended, modified or supplemented, the “Agreement”) and (ii) Building Loan Agreement, dated as of October ___, 2007, each among Acadia PA East Fordham Acquisitions, LLC, and Fordham Place Office LLC, both as borrowers (collectively, the “Borrower”), the lenders party thereto (collectively, together with their successors and assigns, “Lenders”) and Eurohypo AG, New York Branch, as administrative agent (in such capacity, together with its successors and assigns, “Administrative Agent”) relating to the development of the above referenced Condominium.  All capitalized terms used herein and not defined herein shall have the meanings ascribed thereto in the Agreement.

 

In connection with the Loans, recognizing that Lenders and Administrative Agent will rely on the matters set forth herein in making the Loans to Borrowers, __________ hereby represent, warrant, certify and agree as follows:

 

1.           All initially capitalized terms used herein without definition and which are defined in that certain [DESCRIBE DECLARATION] (the “Declaration”), or in the By-Laws referred to therein, shall have the meanings set forth for such terms in the Declaration, or in such By-Laws (as applicable)1.  A true, correct and complete copy of the Declaration (including the By-Laws attached thereto) and all rules and regulations adopted by the Board pursuant to Section _____ of the By-Laws or otherwise (all such items being collectively referred to herein as the “Condominium Documents”) are attached hereto as Exhibit A.  Except as indicated in Exhibit A, the Condominium Documents have not been modified, altered or amended and are in full force and effect.

 

2.           The Board hereby recognizes Administrative Agent (on behalf of the Lenders) as, and Administrative Agent shall be deemed to be, a [Recognized Mortgagee] of Unit Nos. ___, ____ and ____ (collectively, the “Units”) and that the lien of Administrative Agent’s [Registered Mortgage(s)] are first priority liens for purposes of the Condominium Documents.  Administrative Agent’s current address is as set forth above.

 

  

1 Definitions must be amended accordingly.

  

  

  

3.           All [Common Charges] and all other charges and assessments, if any, assessed against any of the Units or otherwise payable under any of the Condominium Documents by the Unit Owners have been paid in full through the date hereof.  No special assessments have been levied or assessed by the Board which are payable.

 

4.           No Unit, Unit Owner or Occupant is in violation or breach of, or in default under, any of the Condominium Documents, and the Board knows of no (a) event or condition which, with the passage of time or the giving of notice or both, would constitute such a violation, breach or default by any Unit, Unit Owner or Occupant or (b) claims, demands, causes of action or proceedings, pending or threatened, against the Board or any Unit Owner or Occupant which would entitle the Board or any Unit Owner or Occupant to indemnification by any other Unit Owner or Occupant pursuant to any of the Condominium Documents (including, without limitation, pursuant to Section ___ of the Declaration).

 

5.           There are no mortgages, deed of trust, liens or other security interests encumbering any Unit (including liens for unpaid Common Charges), except those in favor of Administrative Agent.

 

6.           The Board has not engaged or employed any managing agent or employees pursuant to Section ___ of the By-Laws.

 

7.           A budget has not yet been adopted by the Board.  The Board will deliver a true, correct and complete copy of each budget (and any amendments thereto) to Administrative Agent promptly following the date on which each of such items is adopted pursuant to Section ______ of the By-Laws.

 

8.           The officers of the Condominium are as follows:

 

President:                                           _____________

 

Vice President/Treasurer:                _____________

 

Vice President/Secretary:                _____________

 

9.           In addition to the Board’s obligations under Section ___ of the By-Laws, the Board agrees to execute and deliver to Administrative Agent, as soon as is reasonably practical, and in any event within ten (10) days after Administrative Agent’s written request, a letter dated as of the then current date, in the form of this letter (with such changes as may be necessary due to changes in the applicable facts and circumstances) and addressing any other facts and circumstances pertaining to the Condominium Documents and the operation of the Project as may reasonably be requested by Administrative Agent at such time.

 

10.           The Board hereby acknowledges and consents to the powers granted and the designation made by [__________] and the officers of the Condominium to Administrative Agent pursuant to that certain Proxy given by [__________] and the officers of the Condominium to the Lenders in connection with the Loans.

 

  

  

  

This letter may be executed in one or more counterparts, each of which shall be an original and all of which when taken together shall constitute one and the same letter.

 

	 	 	
___________________________________

	  	  	
Name:

	  	 	 
	 	 	
___________________________________

	  	  	
Name:

	  	  	 
	 	 	
___________________________________

	 	 	Name: 

 

The undersigned, being the Unit Owner of the Units hereby consents to, acknowledges and agrees with the foregoing with the same force and effect as if it were the Board.

 

	 	  	
ACADIA PA EAST FORDHAM ACQUISITIONS, LLC,

	  	  	
a Delaware limited liability company

	 	 	 
	  	
By:

	
___________________________________

	  	  	
Name:

	  	  	
Title:

	 	 	 
	  	  	
FORDHAM PLACE OFFICE LLC, a Delaware limited liability company

	 	 	 
	  	
By:

	
___________________________________

	  	  	
Name:

	  	  	Title:
	 	 	 

 

  

  

  

 

Exhibit A

 

Condominium Documents

 

 

 

 

  

  

  

SCHEDULE 1

 

 

Project Loan Commitments:

 

	
Lender

	
Commitment

	
Eurohypo AG, New York Branch

	
$1,930,757.00

	  	
$

	  	
$

	  	
$

	
Total

	
$1,930,757.00

 

Building Loan Commitments:

 

	
Lender

	
Commitment

	
Eurohypo AG, New York Branch

	
$75,339,243.00

	  	
$

	  	
$

	  	
$

	
Total

	
$75,339,243.00

 

Acquisition Loan Commitments:

 

	
Lender

	
Commitment

	
Eurohypo AG, New York Branch

	
$18,000,000.00

	  	
$

	  	
$

	  	
$

	
Total

	
$18,000,000.00

 

  

  

  

 

SCHEDULE 1.1(130)

LEASING GUIDELINES

 

 

 

 

  

  

  

SCHEDULE 1.1(193)

PROPORTIONATE SHARE

	
Lender

	
Percentage

	
Eurohypo AG, New York Branch

	
100%

	
Total

	
100%

 

 

 

 

  

  

  

 

SCHEDULE 2.4(1)

WIRE INSTRUCTIONS

 

 

 

Bank of New York, NY

 

 

ABA 021 000 018

 

 

Account No.: 8900513497

 

 

Account Name:  Eurohypo AG, NY

 

 

Ref:  400 E. Fordham Road

 

  

  

  

SCHEDULE 3.1(1)(J)

 

INSURANCE REQUIREMENTS FOR CONSTRUCTION MANAGERS,

 

MAJOR CONTRACTORS, ARCHITECTS AND DESIGN PROFESSIONALS

 

A.           Minimum Insurance Requirements For Contractors

 

1.           Workers Compensation and Employers Liability Coverage.

 

•           Statutory Workers Compensation coverage

•           Employers Liability – $1 million policy limit

•           Thirty (30) days notice of cancellation

 

2.           General Liability Coverage

 

Limits of Liability:  $1 million combined single limit for bodily injury, personal injury or property damage per occurrence/$2 million aggregate per project or location.  General Liability Insurance shall also include an endorsement providing that the insurance afforded under the contractor’s policy is primary insurance and without contribution from any other insurance maintained by Borrower.

 

“Occurrence” form, including:

 

•           Premises/Operations Liability

 

	
  

	
•

	
Blanket Contractual Liability, including coverage for all liability assumed under this contract

 

•           Products & Completed Operations

 

•           Pollution coverage for losses arising out of a hostile fire

 

•           “XCU” Hazards must be covered

 

	
  

	
•

	
Thirty (30) days notice of cancellation to Borrower as a condition of cancellation

 

3.           Business Automobile Coverage

 

	
  

	
•

	
Limit of Liability: $1 million combined single limit per accident for bodily injury or property damage

 

	
  

	
•

	
Business Auto policy form, including:

 

	
  

	
– coverage for “any auto” which includes autos owned, hired, and non-owned autos

 

	
  

	
– Thirty (30) days notice of cancellation

 

  

  

  

4.           Umbrella Liability Coverage

 

	
  

	
•

	
Limit of Liability: Not less than $100 million.

 

5.           Property Insurance

 

All contractors and subcontractors shall be responsible for all loss or damage to contractors’ tools, equipment sheds, and any other materials or supplies which do not become part of the finished project.  Borrower and its agents take no responsibility for said equipment.

 

Additional Requirements

 

	
  

	
•

	
Insurances specified in items 2, 3, and 4 shall name Borrower and Administrative Agent (on behalf of the Lenders) as additional insureds, binders or endorsements to insurance policies may be required.

 

	
  

	
•

	
All insurances shall contain a provision allowing insured to waive subrogation rights against other parties prior to loss except workers’ compensation.

 

	
  

	
•

	
All insurances shall be secured from financially responsible insurance carriers qualified to do business in the state in which this operation is located.

 

	
  

	
•

	
Certificates of insurance in form and substance acceptable to Borrower and Administrative Agent and evidencing all insurances must be presented to Borrower prior to the commencement of any work of operations at the project and upon request. Such certificates shall provide that the insurer shall not cancel or terminate coverage without thirty (30) days’ prior written notice to Borrower and Administrative Agent.

 

	
  

	
•

	
All notices will be received by the following:

 

For Administrative Agent:

 

Eurohypo AG, New York Branch

1114 Avenue of the Americas, 29th Floor

New York, New York  10036

Attention:  Legal Director

Facsimile No.:  866 267 7680

 

With copies to:

 

Eurohypo AG, New York Branch

1114 Avenue of the Americas, 29th Floor

New York, New York  10036

Attention:  Head of Portfolio Operations

Facsimile No.:  866 267 7680

  

  

  

 

– and –

 

Riemer & Braunstein LLP

Times Square Tower, Suite 2506

Seven Times Square

New York, New York 10036

Attention:  Steven J. Weinstein, Esq.

Telecopier No.: (617) 692-3503

 

B.           Minimum Insurance Requirements For Major Contractors

 

1.           Workers Compensation and Employer-Liability Coverage

 

	
  

	
•

	
Statutory Workers Compensation coverage

 

	
  

	
•

	
Employers Liability – $1 million policy limit

 

	
  

	
•

	
Thirty (30) days notice of cancellation

 

2.           General Liability Coverage

 

Limits of Liability: $1 million combined single limit for bodily injury, personal injury or property damage per occurrence, $2 million aggregate per project or location, $2 million Products & Completed Operations

 

“Occurrence” form, including:

 

	
  

	
•

	
Premises/Operations Liability

 

	
  

	
•

	
Blanket Contractual Liability, including coverage for all liability assumed under this contract

 

	
  

	
•

	
Products & Completed Operations

 

	
  

	
•

	
Pollution coverage for losses arising out of a hostile fire

 

	
  

	
•

	
“XCU” Hazards must be covered

 

	
  

	
•

	
Thirty (30) days notice of cancellation to Borrower and Administrative Agent as a condition of cancellation

 

3.           Business Automobile Coverage

 

	
  

	
•

	
Limit of Liability-. $1 million combined single limit per accident for bodily injury or property damage

 

	
  

	
•

	
Business Auto policy form, including:

 

	
  

	
– coverage for “any auto” which includes autos owned, hired, and non-owned autos

 

	
  

	
– Thirty (30) days notice of cancellation

 

  

  

  

 

4.           Umbrella Liability Coverage

 

	
  

	
•

	
Limit of Liability: Not less than $5 million, except steel erectors, crane operators, and other high hazard operations, not less than $20 million.

 

5.           Property Insurance

 

All contractors and subcontractors shall be responsible for all loss or damage to contractors’ tools, equipment sheds, and any other materials or supplies which do not become part of the finished project.

 

Additional Requirements

 

	
  

	
•

	
Insurances specified in items 2, 3, and 4 shall name Borrower and Administrative Agent (on behalf of the Lenders) as additional insureds.

 

	
  

	
•

	
All insurances shall contain a provision allowing insured to waive subrogation rights against other parties prior to loss.

 

	
  

	
•

	
All insurances shall be secured from financially responsible insurance carriers qualified to do business in the state in which this operation is located.

 

	
  

	
•

	
Certificates of insurance in form and substance acceptable to Borrower and Administrative Agent and evidencing all insurances must be presented to the owner prior to the commencement of any work of operations at the project and upon request.  Such certificates shall provide that the insurer shall not cancel or terminate coverage without thirty (30) days’ prior written notice to the owner and lender.

 

All notices will be received by the following:

 

For Administrative Agent:

 

Address for Notices to

 

Eurohypo AG, New York Branch

1114 Avenue of the Americas, 29th Floor

New York, New York  10036

Attention:  Legal Director

Facsimile No.:  866 267 7680

 

  

  

  

With copies to:

 

Eurohypo AG, New York Branch

1114 Avenue of the Americas, 29th Floor

New York, New York  10036

Attention:

Facsimile No.:  866 267 7680

 

– and –

 

Riemer & Braunstein LLP

Times Square Tower, Suite 2506

Seven Times Square

New York, New York 10036

Attention:  Steven J. Weinstein, Esq.

Telecopier No.: (617) 692-3503

 

C.           Owner Controlled Insurance Program (“OCIP”) or Wrap-Up Program

 

 

Borrower may satisfy the on site Commercial General Liability Workers Compensation and Umbrella Liability insurance requirements of Section 3.1(1) and this Schedule for Borrower, Construction Manager and Major Contractors by and through placement of a Wrap Up or OCIP Insurance Program.

 

If this type of Liability insurance program is selected by Borrower, it shall meet all of the requirements of coverage as set forth elsewhere in Section 3.1(1) and this Schedule.

 

The overall limits of insurance required under this form of insurance program shall include Umbrella Liability insurance with a $100 million per occurrence and Annual Aggregate Minimum Limit, and shall contain Products and Completed Operations liability discovery period of not less than 24 months.

 

This Wrap-Up Program shall contain Cross Suits coverage and allow for separation of insured.

 

All other coverage required of contractors shall continue to be required.

 

D.           Minimum Insurance Requirements For Architects & Engineers

 

1.           Workers Compensation and Employers Liability Coverage

 

* Statutory Workers Compensation coverage

 

* Employers Liability – $1 million policy limit

 

* Thirty (30) days notice of cancellation

 

  

  

  

2.           General Liability Coverage

 

Limits of Liability: $1 million combined single limit for bodily injury, personal injury or property damage per occurrence, $2 million aggregate per project or location, $2 million Products & Completed Operations

 

“Occurrence” form, including:

 

	
  

	
•

	
Premises/Operations Liability

 

	
  

	
•

	
Blanket Contractual Liability, including coverage for all liability assumed under this contract

 

	
  

	
•

	
Products & Completed Operations

 

	
  

	
•

	
Pollution coverage for losses arising out of a hostile fire

 

	
  

	
•

	
“XCU” Hazards must be covered

 

	
  

	
•

	
Thirty (30) days notice of cancellation to owner and lender as a condition of cancellation

 

3.           Business Automobile Coverage

 

	
  

	
•

	
Limit of Liability:  $1 million combined single limit per accident for bodily injury or property damage

 

	
  

	
•

	
Business Auto policy form, including:

 

	
  

	
–

	
coverage for “any auto” which includes autos owned, hired, and non-owned autos

 

	
  

	
–

	
Thirty (30) days notice of cancellation

 

4.           Professional Liability

 

	
  

	
•

	
Architects & Engineers Professional Liability covering errors and/or omissions in the performance of professional services in conjunction with this project.

 

	
  

	
•

	
Limits of $20 million each claim and annual aggregate are required.  Coverage must continue throughout the term of the job and continue until the project is accepted by the owner.  The coverage shall provide for a five (5)-year discovery period after acceptance in which claims can be made. coverage may be provided through an Owner Protective Policy.

 

  

  

  

SCHEDULE 4

 

ADVANCE CONDITIONS

 

Part A – Initial Advance

 

Part B – General Conditions

 

 

 

 

  

  

  

	
PART A.

	
CONDITIONS PRECEDENT TO EFFECTIVENESS OF ACQUISITION LOAN COMMITMENTS AND PROJECT LOAN COMMITMENTS AND TO INITIAL ACQUISITION LOANS AND PROJECT LOANS.

 

The effectiveness of the Commitments and the obligation of the Lenders to make the initial Loans are subject the Administrative Agent’s receipt, review, approval and/or confirmation of the following, at Borrower’s cost and expense, each in form and content satisfactory to the Administrative Agent in its sole discretion (such conditions not to be duplicative to the extent they are the same matters required as conditions precedent to the effectiveness of the Building Loans that are being advanced concurrently therewith under the Building Loan Agreement):

 

ORGANIZATIONAL AND AUTHORIZATION DOCUMENTS; OPINIONS; OTHER DOCUMENTATION RELATING TO BORROWER, BORROWER PARTIES AND OTHER PERSONS

 

1.           All documents evidencing the formation, organization, valid existence, good standing of and for Borrower and each Borrower Party, and the authorization, execution, delivery and performance of the Loan Documents and Project Documents by Borrower and each Borrower Party, including a certified organizational chart for Borrower and Borrower Parties.

 

2.           Legal opinions issued by counsel for Borrower and each Borrower Party, opining as to the due organization, valid existence and good standing of Borrower and each Borrower Party; as to the due authorization, execution, delivery, enforceability and validity of the Loan Documents with respect to Borrower and each Borrower Party (and including opinions with respect to non-contravention, perfection, choice of law and usury); and as to such matters concerning the zoning and entitlements for the Project, compliance with Applicable Law (including the Affordable Housing Requirements) and such other matters as Administrative Agent and Administrative Agent’s counsel reasonably may specify.

 

3.           Current Uniform Commercial Code searches, and litigation, bankruptcy and judgment reports, as requested by Administrative Agent, with respect to Borrower and Borrower Parties.

 

4.           Copies of the most recent financial statements of Borrower certified by an officer of the Borrower and each Borrower Party, if applicable, and copies of the most recent audited annual financial statement of Guarantor, and certificates dated the Closing Date and signed by an Authorized Officer of Borrower and each Borrower Party stating that (i) such financial statements are true, complete and correct and (ii) no change shall have occurred in the financial condition of Borrower or any Borrower Party which would have a Material Adverse Effect on the Project, or on Borrower’s or any Borrower Party’s ability to repay the Loans or otherwise perform its obligations under the Loan Documents.  Further, there shall not exist any material default by Borrower or any Borrower Party under any loan, financing or similar arrangement with any lender.

 

  

  

  

5.           Satisfactory financial review and background checks (including such background checks as deemed necessary by Administrative Agent and Lenders to comply with the Patriot Act) of Borrower and Borrower Parties.

 

6.           Opening balance sheet for Borrower.

 

LOAN DOCUMENTS; CLOSING CERTIFICATES; APPRAISAL

 

7.           The Loan Documents, executed by Borrower and, as applicable, each Borrower Party.

 

8.           A certificate of an Authorized Officer of Borrower, dated as of the Closing Date, certifying that:  (i) the representations and warranties of Borrower and each Borrower Party contained in the Loan Documents are true and correct in all material respects on and as of such date as if made on and as of such date (or, if stated to have been made solely as of an earlier date, were true and correct in all material respects as of such date), and (ii) no Potential Default or Event of Default has occurred and is continuing on such date.

 

9.           An Appraisal, such that the aggregate amount of the Commitments shall not exceed seventy percent (70%) of the aggregate value of the Project.  The Appraisal shall run in favor of “Eurohypo AG, New York Branch or its designee, as Administrative Agent on behalf of the lenders in its lending syndicate from time to time, and the successors and assigns of each of the foregoing, all of whom may rely thereon.”

 

TITLE; SURVEY

 

10.           An ALTA policy or policies of title insurance satisfactory to Administrative Agent with respect to the Acquisition Loans, the Project Loans and the Building Loans (collectively, the “Title Policies”), issued by the Title Insurer together with evidence of the payment of all premiums due thereon, (a) insuring Administrative Agent for the benefit of the Lenders, in an amount equal to the aggregate amount of the Commitments, that Borrower is lawfully seized and possessed of a valid and subsisting fee simple interest in the Land and Improvements and that the Mortgages constitute valid fee simple mortgages or deeds of trust liens on the Land and Improvements subject to no Liens other than the Permitted Encumbrances applicable thereto and (b) providing (i) affirmative insurance or endorsements for coverage against all mechanics’ and materialmen’s liens, (ii) a pending disbursements clause, (iii) such other affirmative insurance, endorsements and reinsurance as Administrative Agent may require, and (iv) evidence of payment of real estate and other municipal charges through the Closing Date.  The form of the Title Policies and all endorsements thereto shall be approved by Administrative Agent in its sole discretion.  The Title Policies shall name as the insured “Eurohypo AG, New York Branch or its designee, as Administrative Agent on behalf of the lenders in its lending syndicate from time to time, and the successors and assigns of each of the foregoing, all of whom may rely thereon”

 

11.           A survey of the Project (the “Survey”) in form and content, and prepared by a registered land surveyor, satisfactory to Administrative Agent.  The Survey shall be certified to “Eurohypo AG, New York Branch or its designee, as Administrative Agent on behalf of the lenders in its lending syndicate from time to time, and the successors and assigns of each of the foregoing, all of whom may rely thereon” in accordance with a surveyor’s certificate in form and substance satisfactory to Administrative Agent.

 

  

  

  

12.           Evidence that all of the land parcels required to develop the Project per the final Plans and Specifications are owned by Borrower and are encumbered by the Mortgages and insured by the Title Policies.

 

INSURANCE

 

13.           A certified copy of, or certificates of insurance with respect to, the insurance policies required under Section 3.1(1) of this Agreement (inclusive of the insurance policies required under Schedule 3.1(1)(J)), together with evidence of the payment of all premiums therefor.

 

GOVERNMENT APPROVALS; COMPLIANCE WITH LAW

 

14.           Originals (or copies certified by an Authorized Officer of Borrower to be true copies) of all Government Approvals referred to in the Permitting Schedule, other than those expressly provided for in said Schedule to be obtained at a later time (together with, if requested by Administrative Agent, an opportunity to review (or certified copies of) all correspondence referred to in such Government Approvals and all applications for such Government Approvals).

 

15.           Evidence satisfactory to Administrative Agent of final approval from Borrower’s Architect and the New York City Department of Buildings of Project design and specifications.

 

16.           Evidence satisfactory to Administrative Agent that the Land is and, upon completion thereof, the Improvements will be in compliance with all Applicable Law (including zoning laws) and any applicable covenants, conditions and restrictions affecting the Land.

 

17.           Receipt, review and acceptance by Administrative Agent of a Phase I environmental report and, if applicable, a Phase II environmental report for the Project.

 

PROJECT DOCUMENTS; CONSENTS AND AGREEMENTS; GOVERNMENT APPROVALS

 

18.           Copies of the Construction Management Agreement, certified by Borrower as being true, correct and complete, and in each case in form and substance satisfactory to Administrative Agent.

 

19.           True and correct copies of each of the Project Documents (including all amendments thereto), certified as such by an Authorized Officer of Borrower, together with evidence that (a) each of the Project Documents has been duly executed and delivered by each Person that is a party thereto and is in full force and effect; (b) neither Borrower nor, to the best of Borrower’s knowledge, any other Person which is party to any of the Project Documents, is in default thereunder beyond any applicable cure and notice periods; (c) no term or condition thereof shall have been amended, modified or waived without the prior consent of Administrative Agent.  The form and substance of each of the Project Documents shall be satisfactory to Administrative Agent.

 

  

  

  

20.           A true and correct copy of the Construction Management Agreement certified as such by an Authorized Officer of Borrower and evidence that no term or condition of such contract shall have been modified, amended, supplemented and/or waived without the prior consent of Administrative Agent, together with financial statements for the Construction Manager.  The form and substance of the Construction Management Agreement, and the financial statements of the Construction Manager, shall be satisfactory to Administrative Agent.

 

21.           A certificate of the Construction Manager in favor of Administrative Agent (on behalf of the Lenders) certifying that the Construction Schedule and the Budget (as its relates to Hard Costs) are realistic and can be adhered to in completing the Construction Work for the Improvements in accordance with the Plans and Specifications.

 

22.           A true and correct copy of Borrower’s Architect’s Agreement certified as such by an Authorized Officer of Borrower and evidence that no term or condition of Borrower’s Architect’s Agreement shall have been modified, amended, supplemented and/or waived without the prior consent of Administrative Agent.  The form and substance of Borrower’s Architect’s Agreement shall be satisfactory to Administrative Agent.

 

23.           A schedule of the identity of the Major Contractors for the Improvements representing at least eighty percent (80%) of the cost of the completion of the Project Completion Work for the Improvements (including the Major Contracts for the mechanical, electrical and plumbing work and any other Major Contractors deemed reasonably appropriate by Administrative Agent), and copies of the executed Major Contracts entered into with such Major Contractors and all modifications, amendments and/or supplements thereto with respect thereto, together with a certificate of an Authorized Officer of Borrower certifying that (A) the copies of the Major Contracts attached to such certificate are true, correct and complete in all respects; (B) such Major Contracts attached to such certificate are in full force and effect; and (C) neither Borrower, nor the Construction Manager nor the applicable Major Contractor is in default thereunder. The form and substance of the Major Contracts shall be satisfactory to Administrative Agent.

 

24.           Evidence satisfactory to the Administrative Agent that the Project is eligible to obtain and receive a partial exemption of real property taxes for the Improvements for a twenty-five (25) year period under the Industrial and Commercial Incentive Program, as of right.

 

PLANS AND SPECIFICATIONS; BUDGET; CONSTRUCTION SCHEDULE; REPORTS AND STUDIES

 

25.           Receipt, review, and approval by Administrative Agent and the Construction Consultant of the final Plans and Specifications for the Improvements, including any construction, architectural and engineering drawings, sealed by the applicable Design Professionals.

 

26.           The delivery by the Construction Consultant to Administrative Agent of the Construction, Cost and Plan Review in form and substance satisfactory to Administrative Agent.

 

  

  

  

27.           The Budget as approved by Administrative Agent, which shall include all Project Costs for the Improvements and shall be sufficient to complete the Improvements and carry the Project through the Maturity Date based on the final Plans and Specifications.  The Budget shall be such that the aggregate amount of the Commitments shall not exceed eighty percent (80%) of the aggregate Project Costs for the entire Project reflected on the Budget.  To the extent that the Commitments would exceed any of the limits described in this section, they shall be automatically reduced to an amount not in excess of the limits described in this section.

 

28.           The Construction Schedule, together with (if any Construction Work has been commenced prior to the Closing Date) evidence satisfactory to Administrative Agent that the development of the Construction Work is proceeding in accordance with the Construction Schedule and the Budget.

 

29.           Receipt, review, and acceptance by Administrative Agent of (i) Site Assessments relating Project; (ii) seismic studies showing a probable maximum loss of less than 20% for the Project; and (iii) soils reports, engineering reports, geotechnical reports and other reports and studies in each case as required by Administrative Agent and prepared in accordance with Administrative Agent’s scope and by consultants engaged by Administrative Agent or, if consented to by Administrative Agent, engaged by Borrower with reliance rights with respect to such reports and studies expressly granted in writing to Administrative Agent and its on behalf of the Lenders and the respective successors and assigns of each of the foregoing.  All such reports and studies shall be in a form approved by Administrative Agent, and shall be certified to Administrative Agent (on behalf of the Lenders and their successors and assigns) in a form reasonably requested by Administrative Agent which may include certification to additional participants, co-lenders and/or investors.  Such reports and studies shall run in favor of “Eurohypo AG, New York Branch or its designee, as Administrative Agent on behalf of the lenders in its lending syndicate from time to time, and the successors and assigns of each of the foregoing, all of whom may rely thereon”.

 

PAYMENT OF INITIAL EQUITY CONTRIBUTION, FEES, EXPENSES AND COSTS

 

30.           There shall have been made by Borrower unreimbursed equity contributions to the Project in an aggregate amount equal to the Initial Equity Contribution, and Borrower shall have delivered to Administrative Agent evidence satisfactory to it that Borrower has made such contribution, including, without limitation, a certificate of an Authorized Officer of Borrower certifying thereto and itemizing the uses of such contributions, such certificate to be accompanied by backup materials documenting the amount of such contributions and the use of same; provided, however, the Administrative may, in its sole discretion, waive this requirement for the closing of the Loan, as long as such requirement is satisfied prior to or contemporaneously with the initial advance of proceeds of the Loan.

 

31.           Payment to Administrative Agent in accordance with the Fee Letters of the upfront fee and arrangement fee described therein.

 

32.           Payment of all fees and commissions payable to real estate brokers, mortgage brokers, or any other brokers or agents in connection with the Loans, such evidence to be accompanied by any waivers or indemnifications deemed necessary by Administrative Agent.

 

  

  

  

33.           Payment of Administrative Agent’s costs and expenses in underwriting, documenting, and closing the transaction, including fees and expenses of Administrative Agent’s inspecting engineers, consultants, and outside counsel.

 

34.           Payment of all expenses and premiums in connection with the issuance of the Title Policy and all recording charges, mortgage taxes and filing fees payable in connection with recording the Mortgages and the filing of the Uniform Commercial Code financing statements related thereto in the appropriate offices.

 

35.           Payment of any due and payable real estate taxes and assessments with respect to the Project remaining unpaid on the Closing Date.

 

LEASES:

 

36.           Receipt, review, and acceptance by Administrative Agent of (i) the leases with the Existing Tenants, and (ii) for each of the leases with the Existing Tenants, (1) written estoppels in form and substance reasonably satisfactory to Administrative Agent, executed by the Existing Tenants and confirming the term, rent, and other provisions and matters relating to the leases and (2) written subordination and attornment agreements, in form and substance satisfactory to Administrative Agent, executed by the Existing Tenants, whereby, among other things, such tenants subordinate their interest in the Project to the Loan Documents and agree to attorn to Administrative Agent (on behalf of the Lenders) and its successors and assigns upon foreclosure or other transfer of the Project after an Event of Default.

 

37.           Evidence satisfactory to Administrative Agent that, as of the Closing Date, the aggregate fixed minimum rent of the retail leases shall be no less than $5,150,000.

 

OTHER

 

38.           Such other documents or items as Administrative Agent or its counsel reasonably may require, including, without limitation the delivery of such documents or items as may be indicated on a closing checklist distributed to Borrower by Administrative Agent or its counsel.

 

39.           No material change shall have occurred in the financial markets which would have, in Administrative Agent’s judgment, a material adverse affect on the Project or any obligor’s ability to repay the Loans or otherwise perform its obligations under the Loan Documents. No condemnation or adverse zoning or usage change shall have occurred or shall have been proposed with respect to the Project; no law, regulation, ordinance, moratorium, injunctive proceeding, restriction, litigation, action, citation or similar proceeding or matter shall have been enacted, adopted, or threatened by any third Person or Governmental Authority, which would have, in the Administrative Agent’s judgment, a Material Adverse Effect on the Borrower and/or the Project.

 

40.           Evidence that the other conditions set forth in Article 4 have been satisfied.

 

41.           Evidence that all of the conditions precedent to the effectiveness of the initial Building Loans under the Building Loan Agreement shall have been satisfied.

 

  

  

  

PART B.                      GENERAL CONDITIONS TO ALL LOANS

 

The obligation of the Lenders to make any Loans shall be subject to Administrative Agent’s receipt, review, approval and/or confirmation of the following, each in form and content satisfactory to Administrative Agent in its sole discretion:

 

1.           There shall exist no Potential Default or Event of Default (both before and after giving effect to the requested advance).

 

2.           The representations and warranties contained in this Agreement and in all other Loan Documents shall be true and correct in all material respects on and as of the date of the making of such Loan with the same force and effect as if made on and as of such date.

 

3.           Such advance shall be secured by the Mortgages and the other Security Documents, subject only to the Permitted Encumbrances, as evidenced by a Date Down Endorsement satisfactory to Administrative Agent.

 

4.           Borrower shall have paid Administrative Agent’s costs and expenses in connection with such advance (including title charges and attorneys’ fees and expenses).

 

5.           No change shall have occurred in the financial condition of Borrower or any Borrower Party or in the Project which would have a Material Adverse Effect.

 

6.           No proceeding with respect to condemnation, adverse possession, zoning change or usage change proceeding shall have occurred or shall have been threatened against the Project the Project shall not have suffered any damage by fire or other casualty which has not been repaired or is not being restored in accordance with this Agreement; no Applicable Law or  injunctive proceeding, restriction, litigation, action, citation or similar proceeding or matter shall have been enacted, adopted, or threatened by any Governmental Authority, which would have, in Administrative Agent’s judgment, a material adverse effect on the Project or Borrower’s or any Borrower Party’s ability to perform its obligations under the Loan Documents.

 

7.           The Construction Work (or such part thereof as may have been constructed at the time of any borrowing) shall have been constructed substantially in accordance with the Plans and Specifications and the Construction Schedule (as each may have been modified in accordance with this Agreement) and all applicable Government Approvals; and there shall exist no Unsatisfactory Work.

 

8.           The Construction Consultant shall have reviewed and approved the disbursement requested in the Request for Loan Advance delivered by Lead Borrower with respect to such Loan.  Such Request for Loan Advance shall include copies of all documents, contracts, invoices, bills, construction records, lien waivers, Change Orders, and drawings, plans and specifications as the Construction Consultant shall reasonably require, to enable the Construction Consultant to timely review each Request for Loan Advance.

 

9.           Borrower shall have provided the Construction Consultant, Administrative Agent and the Lenders, or their representatives, prompt and reasonable access to the Project, in order to inspect the Construction Work then completed.

 

  

  

  

10.           Administrative Agent shall have received the following items in connection with each Loan:

 

(a)           A Request for Loan Advance as provided in Section 2.6(4) and 4.24.2 duly executed by an Authorized Officer of Borrower, together with the required attachments thereto;

 

(b)           Such invoices, contracts and other supporting data as Administrative Agent may reasonably require to evidence that all Project Costs for which disbursement is sought have been incurred and are then due and payable;

 

(c)           Except for Liens insured against pursuant to the Title Policies, (i) sworn unconditional waivers of lien from contractors, subcontractors, materialmen, suppliers and vendors, covering all work for which funds have been advanced pursuant to a prior disbursement and (ii) at Administrative Agent’s election, sworn conditional waivers of lien from contractors, subcontractors, materialmen, suppliers and vendors, covering all work of such Persons for which funds are being advanced pursuant to the then current Request for Loan Advance, all in compliance with the Lien Law;

 

(d)           Copies of any Change Orders which have not been previously furnished to Administrative Agent and the Construction Consultant, all of which shall be subject to Administrative Agent’s review and approval in accordance with this Agreement;

 

(e)           Copies of all subcontracts and purchase orders which have been executed or modified, amended and/or supplemented since the last Loan, together with (i) any Bonds or Subguard Polices relating to such subcontracts (to the extent required under this Agreement), (ii) a certificate by an Authorized Officer of Borrower certifying that the delivered items are true, accurate and complete copies of the originals thereof, and (iii) Consents and Agreements in the applicable form attached to the General Assignment from each Major Contractors who has entered into a Major Contract but has not previously delivered a Consent and Agreement;

 

(f)           Inventory of materials and equipment stored on the Project and evidence that Borrower has complied with all of the requirements of Section 4.8 relating to such stored materials;

 

(g)           Copies of all Government Approvals (to the extent required as of such date) not previously delivered to Administrative Agent, certified by an Authorized Officer of Borrower;

 

(h)           If any material dispute arises between or among Borrower, the Construction Manager or any Major Contractor, a written summary of the nature of such dispute;

 

(i)           If the Budget shall have been modified, copies of all such modifications, all of which shall be subject to Administrative Agent’s review and approval in accordance with this Agreement;

 

  

  

  

(j)           Copies of all amendments to the Construction Schedule not previously delivered to Administrative Agent, all of which shall be subject to Administrative Agent’s review and approval in accordance with this Agreement;

 

(k)           Promptly after the completion of the construction of the foundation or other support elements for the Construction Work, Borrower shall provide to Administrative Agent a current survey of the Land showing all improvements located thereon and complying with the requirements set forth in Part A, paragraph 11 and shall obtain a foundation endorsement to the Title Policies in form satisfactory to Administrative Agent insuring that all foundations and other support elements are located within applicable property and setback lines and do not encroach upon any easements or rights of way; and

 

(l)           To the extent not previously delivered to Administrative Agent, evidence showing compliance with the insurance provisions of Section 3.1.

 

 

11.           All of the conditions set forth in Part A above shall remain satisfied and all applicable conditions in Article 4 shall have been satisfied, including the application of all Operating Revenues in accordance with Section 4.6.

 

12.           The Loans shall be In Balance, and all material actions required to have been undertaken or obtained prior to the date of such disbursement pursuant to the Permitting Schedule and the Marketing Plan and Schedule shall have been undertaken or obtained as applicable.

 

13.           Operating Revenues shall have been applied in accordance with Sections 4.1(1) and 4.6(1).

 

14.           To the extent not previously delivered to Administrative Agent, Borrower shall provide evidence of the payment of all costs, expenses and other charges covered by previous Requests for Loan Advances for which advances of Loans have previously been made.

 

15.           Administrative Agent has reasonably determined withholding such disbursement in whole or in part is not required by the Lien Law.

 

16.           Such other documents and items as Administrative Agent may reasonably request.

 

  

  

  

SCHEDULE 7.6

 

PERMITTING SCHEDULES

(See Attached)

  

  

  

 

 

  

  

  

 

SCHEDULE 7.27

 

ORGANIZATIONAL CHART

 

 

 

  

  

  

 

 

  

  

  

 

 

  

  

  

SCHEDULE 7.32

 

TENANT IMPROVEMENT ALLOWANCES

(See Attached)a6488986ex10_69.htm

Exhibit 10.69

 

Acadia Strategic Opportunity Fund III LLC,

a Delaware limited liability company

As Borrower

Acadia Realty Acquisition III LLC,

a Delaware limited liability company

As Managing Member

Acadia Realty Limited Partnership,

a Delaware limited partnership

As Guarantor

Acadia Investors III, Inc.,

a Maryland corporation

As Pledgor

Revolving Credit Agreement

 

 

Bank of America, N.A.

As Administrative Agent

 

Banc of America Securities LLC

As Sole Lead Arranger and Sole Book Manager

 

YC Susi Trust,

As Conduit Lender

 

Bank of America, N.A.

As an Administrator, Alternate Lender and Managing Agent

and

The Other Conduit Lenders, Administrators,

Alternate Lenders and Managing Agents

From Time to Time Party Hereto

 

 

October 10, 2007

 

 

 

  

  

  

 

TABLE OF CONTENTS

 

	  	  	  	
Page

	  	  	  	  
	
1.

	
DEFINITIONS

	
1

	  	
1.1.

	
Defined Terms

	
1

	  	
1.2.

	
Other Definitional Provisions

	
28

	  	
1.3.

	
Letter of Credit Amounts

	
29

	
2.

	
LOANS AND LETTERS OF CREDIT

	
29

	  	
2.1.

	
The Commitment

	
29

	  	
2.2.

	
Revolving Credit Commitment

	
32

	  	
2.3.

	
Borrowing Procedures

	
32

	  	
2.4.

	
Determination of Yield and Interest Periods

	
36

	  	
2.5.

	
Letters of Credit

	
36

	  	
2.6.

	
Payment of Borrower Guaranty

	
45

	  	
2.7.

	
Use of Proceeds and Letters of Credit

	
46

	  	
2.8.

	
Administrative Agent and Arranger Fees

	
46

	  	
2.9.

	
Unused Facility Fee

	
46

	  	
2.10.

	
Letter of Credit Fees

	
46

	  	
2.11.

	
Computation of Interest and Fees

	
46

	  	
2.12.

	
Increase in the Facility Amount

	
47

	
3.

	
PAYMENT OF OBLIGATIONS

	
47

	  	
3.1.

	
Notes

	
47

	  	
3.2.

	
Payment of Obligations

	
48

	  	
3.3.

	
Payment of Interest

	
48

	  	
3.4.

	
Payments Generally

	
49

	  	
3.5.

	
Voluntary Prepayments

	
50

	  	
3.6.

	
Reduction or Early Termination of Commitments

	
51

	  	
3.7.

	
Lending Office

	
51

	
4.

	
CHANGE IN CIRCUMSTANCES

	
52

	  	
4.1.

	
Taxes

	
52

	  	
4.2.

	
Illegality

	
53

	  	
4.3.

	
Inability to Determine Rates

	
53

	  	
4.4.

	
Increased Cost and Capital Adequacy

	
54

 

  

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TABLE OF CONTENTS

(continued)

 

	 	 	 	 Page
	 	 	 	 
	  	
4.5.

	
Funding Losses

	
55

	  	
4.6.

	
Matters Applicable to all Requests for Compensation

	
55

	  	
4.7.

	
Prohibited Event

	
56

	
5.

	
SECURITY

	
56

	  	
5.1.

	
Liens and Security Interest

	
56

	  	
5.2.

	
Collateral Account; Capital Calls

	
57

	  	
5.3.

	
Agreement to Deliver Additional Collateral Documents

	
59

	  	
5.4.

	
Subordination of All Credit Party Claims

	
60

	
6.

	
[RESERVED]

	
61

	
7.

	
ADDITIONAL ALTERNATE LENDER PROVISIONS

	
61

	  	
7.1.

	
Assignment to Alternate Lenders

	
61

	  	
7.2.

	
Downgrade of Alternate Lender

	
62

	
8.

	
CONDITIONS PRECEDENT TO LENDING

	
65

	  	
8.1.

	
Obligation of Lenders

	
65

	  	
8.2.

	
Qualified Borrower Loans and Letters of Credit

	
68

	  	
8.3.

	
All Loans and Letters of Credit

	
69

	
9.

	
REPRESENTATIONS AND WARRANTIES

	
69

	  	
9.1.

	
Organization and Good Standing of Borrower

	
69

	  	
9.2.

	
Organization and Good Standing of Managing Member

	
69

	  	
9.3.

	
Organization and Good Standing of Guarantor

	
70

	  	
9.4.

	
Organization and Good Standing of Pledgor

	
70

	  	
9.5.

	
Authorization and Power

	
70

	  	
9.6.

	
No Conflicts or Consents

	
70

	  	
9.7.

	
Enforceable Obligations

	
70

	  	
9.8.

	
Priority of Liens

	
70

	  	
9.9.

	
Financial Condition

	
71

	  	
9.10.

	
Full Disclosure

	
71

	  	
9.11.

	
No Default

	
71

	  	
9.12.

	
No Litigation

	
71

	  	
9.13.

	
Material Adverse Change

	
71

 

  

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TABLE OF CONTENTS

(continued)

 

	 	 	 	 Page
	 	 	 	 
	  	
9.14.

	
Taxes

	
71

	  	
9.15.

	
Jurisdiction of Formation; Principal Office

	
71

	  	
9.16.

	
ERISA Compliance

	
72

	  	
9.17.

	
Compliance with Law

	
72

	  	
9.18.

	
Hazardous Substances

	
72

	  	
9.19.

	
Insider

	
72

	  	
9.20.

	
Properties

	
72

	  	
9.21.

	
Operating Structure

	
72

	  	
9.22.

	
Capital Commitments and Contributions

	
73

	  	
9.23.

	
Fiscal Year

	
73

	  	
9.24.

	
Investment Company Act

	
73

	  	
9.25.

	
Margin Stock

	
73

	  	
9.26.

	
Foreign Asset Control Laws

	
73

	  	
9.27.

	
Brokers’ Fees

	
73

	  	
9.28.

	
Solvency

	
73

	  	
9.29.

	
Managing Member Representation

	
73

	  	
9.30.

	
Guarantor Representation

	
73

	  	
9.31.

	
Pledgor Representation

	
74

	  	
9.32.

	
Investments

	
74

	  	
9.33.

	
Investor Documents

	
74

	  	
9.34.

	
Advisory Committee

	
74

	
10.

	
AFFIRMATIVE COVENANTS

	
74

	  	
10.1.

	
Financial Statements, Reports and Notices

	
74

	  	
10.2.

	
Payment of Taxes

	
76

	  	
10.3.

	
Maintenance of Existence and Rights

	
76

	  	
10.4.

	
Notice of Default

	
76

	  	
10.5.

	
Other Notices

	
76

	  	
10.6.

	
Compliance with Loan Documents, Operating Agreement, Partnership Agreement and Stockholders Agreement

	
77

	  	
10.7.

	
Books and Records; Access

	
77

 

  

-iii-

  

 

TABLE OF CONTENTS

(continued)

 

	 	 	 	 Page
	 	 	 	 
	  	
10.8.

	
Compliance with Law

	
77

	  	
10.9.

	
Insurance

	
77

	  	
10.10.

	
Authorizations and Approvals

	
77

	  	
10.11.

	
Maintenance of Liens

	
77

	  	
10.12.

	
Further Assurances

	
78

	  	
10.13.

	
Investor Financial and Rating Information

	
78

	  	
10.14.

	
Certain Included Investor Requirements

	
78

	  	
10.15.

	
Covenants of Qualified Borrowers

	
78

	
11.

	
NEGATIVE COVENANTS

	
78

	  	
11.1.

	
Mergers

	
79

	  	
11.2.

	
Negative Pledge

	
79

	  	
11.3.

	
Fiscal Year and Accounting Method

	
79

	  	
11.4.

	
Constituent Documents

	
79

	  	
11.5.

	
Transfer by, or Admission of, Investors

	
80

	  	
11.6.

	
Capital Commitments

	
80

	  	
11.7.

	
ERISA Compliance

	
81

	  	
11.8.

	
Environmental Matters

	
81

	  	
11.9.

	
Dissolution

	
81

	  	
11.10.

	
Limitations on Dividends and Distributions

	
81

	  	
11.11.

	
Limitation on Debt

	
81

	  	
11.12.

	
Limitation on Managing Member’s Activities

	
81

	  	
11.13.

	
Limitation on Pledgor’s Activities

	
81

	  	
11.14.

	
Limitation on Guarantor’s Activities

	
82

	  	
11.15.

	
Investor Withdrawal

	
82

	
12.

	
EVENTS OF DEFAULT

	
82

	  	
12.1.

	
Events of Default

	
82

	  	
12.2.

	
Remedies Upon Event of Default

	
84

	  	
12.3.

	
Performance by Administrative Agent

	
85

	
13.

	
AGENCY PROVISIONS

	
85

	  	
13.1.

	
Appointment and Authorization of Agents

	
85

 

  

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TABLE OF CONTENTS

(continued)

 

	 	 	 	 Page
	 	 	 	 
	  	
13.2.

	
Delegation of Duties

	
86

	  	
13.3.

	
Exculpatory Provisions

	
86

	  	
13.4.

	
Reliance on Communications

	
87

	  	
13.5.

	
Notice of Default

	
87

	  	
13.6.

	
Non-Reliance on Agents and Other Lenders

	
87

	  	
13.7.

	
Indemnification

	
88

	  	
13.8.

	
Agents in Their Individual Capacity

	
88

	  	
13.9.

	
Successor Agent

	
89

	  	
13.10.

	
No Other Duties, Etc

	
89

	  	
13.11.

	
Administrative Agent May File Proofs of Claim

	
89

	
14.

	
MISCELLANEOUS

	
90

	  	
14.1.

	
Amendments

	
90

	  	
14.2.

	
Setoff

	
92

	  	
14.3.

	
Sharing of Payments

	
92

	  	
14.4.

	
Payments Set Aside

	
93

	  	
14.5.

	
Waiver

	
93

	  	
14.6.

	
Payment of Expenses

	
94

	  	
14.7.

	
Notice

	
96

	  	
14.8.

	
GOVERNING LAW

	
97

	  	
14.9.

	
Choice of Forum; Consent to Service of Process and Jurisdiction; Waiver of Trial by Jury

	
97

	  	
14.10.

	
Invalid Provisions

	
98

	  	
14.11.

	
Entirety and Amendments

	
98

	  	
14.12.

	
Successors and Assigns

	
98

	  	
14.13.

	
Lender Default

	
103

	  	
14.14.

	
Replacement of Lender

	
103

	  	
14.15.

	
Maximum Interest

	
103

	  	
14.16.

	
Headings

	
104

	  	
14.17.

	
Survival

	
104

	  	
14.18.

	
Integration

	
104

 

  

-v-

  

 

TABLE OF CONTENTS

(continued)

 

	 	 	 	 Page
	 	 	 	 
	  	
14.19.

	
Limited Liability of Investors

	
104

	  	
14.20.

	
Confidentiality

	
104

	  	
14.21.

	
USA PATRIOT Act Notice

	
105

	  	
14.22.

	
Multiple Counterparts

	
106

	  	
14.23.

	
No Bankruptcy Petition Against any Conduit Lender

	
106

	  	
14.24.

	
No Recourse Against any Conduit Lender

	
106

	
SCHEDULES

	  
	  	  
	
SCHEDULE 1.1

	
Commitments

	
SCHEDULE 14.7

	
Address and Account Information

	
SCHEDULE 14.12(b)

	
Processing & Recording Fees

	  	  
	
EXHIBITS

	  
	  	  
	
EXHIBIT A:

	
Schedule of Investors and Commitments

	
EXHIBIT B-1:

	
Form of Note

	
EXHIBIT B-2:

	
Form of Qualified Borrower Note

	
EXHIBIT B-3:

	
Form of Qualified Borrower Letter of Credit Note

	
EXHIBIT C:

	
Form of Loan Notice

	
EXHIBIT D-1:

	
Form of Request for Letter of Credit

	
EXHIBIT D-2:

	
Form of Letter of Credit

	
EXHIBIT E:

	
Form of Borrower and Managing Member Security Agreement

	
EXHIBIT F:

	
Form of Account Assignment

	
EXHIBIT G:

	
Form of Facility Increase Request

	
EXHIBIT H:

	
Form of Borrowing Base Certificate

	
EXHIBIT I:

	
Form of Investor Letter

	
EXHIBIT J:

	
[Reserved]

	
EXHIBIT K:

	
[Reserved]

	
EXHIBIT L:

	
Form of Capital Contributions Pledge Agreement

	
EXHIBIT M:

	
Form of Assignment and Assumption Agreement

	
EXHIBIT N:

	
Form of Borrower Guaranty

	
EXHIBIT O:

	
Form of Compliance Certificate

	
EXHIBIT P:

	
Form of Guaranty of Capital

 

 

  

-vi-

  

 

REVOLVING CREDIT AGREEMENT

 

THIS REVOLVING CREDIT AGREEMENT (together with all amendments and modifications hereof and supplements and attachments hereto, this “Credit Agreement”) is dated as of October 10, 2007 by and among ACADIA STRATEGIC OPPORTUNITY FUND III LLC, a Delaware limited liability company (the “Borrower”), ACADIA REALTY ACQUISITION III LLC, a Delaware limited liability company (the “Managing Member”), ACADIA REALTY LIMITED PARTNERSHIP, a Delaware limited partnership (the “Guarantor”) ACADIA INVESTORS III, INC., a Maryland corporation (the “Pledgor”), YC SUSI Trust, as Conduit Lender, BANK OF AMERICA, N.A., a national banking association (in its individual capacity, “Bank of America”), as administrative agent (together with any successor appointed pursuant to Section 13.9 below, the “Administrative Agent”) for the Lenders, as an Alternate Lender, as an Administrator and as a Managing Agent, and each of the other Persons from time to time party hereto as Lenders, Managing Agents and Administrators (all such terms, as hereinafter defined).

 

A.           Borrower, Managing Member, Guarantor and Pledgor have requested that Lenders make loans and cause the issuance of letters of credit to Borrower and Qualified Borrowers (as hereinafter defined) for the principal purposes of providing working capital to the Borrower; financing the costs and other expenses to be incurred by Borrower in connection with making investments permitted under the Operating Agreement (as hereinafter defined); and financing the costs of other undertakings by Borrower permitted under the Operating Agreement; and

 

B.           Lenders are willing to lend funds and to cause the issuance of letters of credit upon the terms and subject to the conditions set forth in this Credit Agreement.

 

NOW, THEREFORE, in consideration of the mutual promises herein contained and for other valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto do hereby agree as follows:

 

1. DEFINITIONS

 

1.1. Defined Terms.  For the purposes of this Credit Agreement, unless otherwise expressly defined, the following terms shall have the respective meanings assigned to them in this Section 1 or in the Section or recital referred to:

 

“Account Assignment” means that certain assignment of the Collateral Account substantially in the form of Exhibit F, dated the date hereof, executed by Borrower in favor of Administrative Agent for the benefit of the Secured Parties.

 

“Adequately Capitalized” means in compliance with the capital standards for bank holding companies as described in the Bank Holding Company Act of 1956, as amended, and regulations promulgated thereunder.

 

“Administrative Agent” is defined in the first paragraph hereof.

 

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“Administrative Agent’s Account” means the account designated from time to time by the Administrative Agent for payments by the Borrower Parties pursuant to this Credit Agreement.

 

“Administrative Agent’s Office” means Administrative Agent’s address set forth on Schedule 14.7 or such other address as Administrative Agent may from time to time notify the Borrower and the Lenders in writing.

 

“Administrator” means: (a) with respect to YC SUSI, Bank of America or an Affiliate thereof; and (b) with respect to any other Conduit Lender, the Person designated by such Conduit Lender as its “Administrator”, which Person becomes a party to this Credit Agreement in such capacity.

 

“Affiliate” of any Person means any other Person that, directly or indirectly, controls or is controlled by, or is under common control with, such Person.  For the purpose of this definition, “control” and the correlative meanings of the terms “controlled by” and “under common control with” means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such Person, whether through the ownership of voting shares or partnership interests or by contract or otherwise.

 

“Agent-Related Persons” means each Agent, together with its Affiliates (including, in the case of Bank of America in its capacity as the Administrative Agent, the Arranger), and the officers, directors, employees, agents and attorneys-in-fact of such Persons and their respective Affiliates.

 

“Agents” means, collectively, Administrative Agent, Letter of Credit Issuer, Administrators, Managing Agents, the Arranger and any successors and assigns in such capacities.

 

“Alternate Lender Percentage” means, with respect to any Lender Group, at any time, a fraction, expressed as a percentage, the numerator of which is the portion of the Loans funded by the Alternate Lenders of such Lender Group and the denominator of which is the aggregate Loans at such time of such Lender Group; provided that at all times on and after the first Assignment Date occurring on or after the Conduit Investment Termination Date for the Conduit Lender related to such Lender Group, the Alternate Lender Percentage for such Lender Group means 100%.

 

“Alternate Lender Pro Rata Share” means, with respect to each Alternate Lender and any Lender Group, the percentage obtained from the fraction: (a) the numerator of which is the Commitment of such Alternate Lender; and (b) the denominator of which is the aggregate Commitments of all Alternate Lenders in the related Lender Group.

 

“Alternate Lenders” means:  (a) for the YC SUSI Lender Group, Bank of America and any assignees thereof that shall become party hereto pursuant to Section 7 or Section 14.12; and (b) for any other Lender Group, the “Alternate Lenders” specified therefore who become parties hereto and any assignees thereof that shall become party hereto pursuant to Section 7 or Section 14.12.

 

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“Alternate Rate” means, for any Interest Period for any Portion of Loans for any Lender Group, an interest rate per annum as provided in the Fee Letter above the LIBOR Rate for such Interest Period; provided, however, that in the case of:

 

(a)           any Interest Period of one to (and including) 14 days;

 

(b)           any Interest Period which commences prior to the related Managing Agent receiving at least three (3) Business Days notice thereof; or

 

(c)           any Interest Period relating to a Portion of Loans which is less than $5,000,000;

 

the “Alternate Rate” for each such Interest Period shall be an interest rate per annum equal to the Base Rate in effect on each day of such Interest Period.  The “Alternate Rate” for any date on or after the occurrence of an Event of Default or the Maturity Date shall be the Default Rate.

 

“Applicable Margin” has the meaning provided in the Fee Letter.

 

“Applicable Requirement” means, for any Included Investor that is (or whose Credit Provider, if applicable, is):  (a) a Bank Holding Company, Adequately Capitalized status or better and a Rating of BBB/Baa2 or higher; (b) an insurance company, a Best’s Rating of A- or higher and a Rating of BBB/Baa2 or higher; (c) an ERISA Investor, or the trustee or nominee of an ERISA Investor, in addition to the Sponsor’s Rating of BBB/Baa2 or higher, a minimum Funding Ratio for the related pension fund based on the Rating of the Sponsor of the related pension fund as follows:

 

	
Sponsor Rating

	
Minimum Funding Ratio

	
A-/A3 or higher

	
No minimum

	
BBB+/Baa1

	
90%

	
BBB/Baa2

	
95%

(d) a Governmental Plan Investor, or the Responsible Party with respect to such Governmental Plan Investor, in addition to the Responsible Party’s Rating of BBB/Baa2 or higher, a minimum Funding Ratio for the pension fund based on the Rating of the Responsible Party as follows:

 

	
Responsible Party Rating

	
Minimum Funding Ratio

	
A-/A3 or higher

	
No minimum

	
BBB+/Baa1

	
90%

	
BBB/Baa2

	
95%;

 

and (e) otherwise a Rated Investor, a Rating of BBB/Baa2 or higher.

 

The first Rating indicated in each case above is the S&P Rating and the second Rating indicated in each case above is the Moody’s Rating.  In the event that the S&P and Moody’s Ratings are not equivalent, then the Applicable Requirement shall be based on the lower of the two. If any such Person has only one Rating, from either S&P or Moody’s, then that Rating shall apply.

 

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“Application and Agreement for Letter of Credit” means an application and agreement for standby letter of credit by, between and among Borrower and a Qualified Borrower, on the one hand, and the Letter of Credit Issuer, on the other hand, in a form acceptable to the Letter of Credit Issuer (and customarily used by it in similar circumstances) and conformed to the terms of this Credit Agreement, either as originally executed or as it may from time to time be supplemented, modified, amended, renewed, or extended, provided, however, to the extent that the terms of such Application and Agreement are inconsistent with the terms of this Credit Agreement, the terms of this Credit Agreement shall control.

 

“Approved Fund” means any Person (other than a natural person) that is (or will be) engaged in making, purchasing, holding or otherwise investing in commercial loans and similar extensions of credit in the ordinary course of its business, that is administered or managed by: (a) a Lender; (b) an Affiliate of a Lender; or (c) an entity or an Affiliate of an entity that administers or manages a Lender.

 

“Arranger” is defined in the preamble to this Credit Agreement.

 

“Assignee” is defined in Section 14.12(b) hereof.

 

“Assignee Group” means two or more Eligible Assignees that are Affiliates of one another or two or more Approved Funds managed by the same investment advisor.

 

“Assignment Amount” means, with respect to an Alternate Lender at the time of any assignment pursuant to Section 7.1 by any Conduit Lender in such Alternate Lender’s Lender Group, an amount equal to the least of:  (a) such Alternate Lender’s Alternate Lender Pro Rata Share of the Obligations requested by such Conduit Lender to be assigned at such time; (b) such Alternate Lender’s unused Commitment (minus the sum of (i) the unrecovered principal amount of such Alternate Lender’s investments in such Obligations pursuant to the Program Support Agreement to which it is a party and (ii) such Alternate Lender’s Alternate Lender Pro Rata Share of the applicable Lender Group Percentage of the Letter of Credit Liability); and (c) in the case of an assignment on or after the Conduit Investment Termination Date for the Conduit Lender related to such Lender Group, (i) such Alternate Lender’s Alternate Lender Pro Rata Share of the applicable Conduit Lender Percentage of the Lender Group Percentage of the Borrowing Base minus (ii) such Alternate Lender’s Alternate Lender Pro Rata Share of the applicable Lender Group Percentage of the Letter of Credit Liability.

 

“Assignment and Assumption Agreement” means the agreement contemplated by Section 14.12(b)  hereof, pursuant to which any Lender assigns all or any portion of its rights and obligations hereunder, which agreement shall be substantially in the form of Exhibit M attached hereto.

 

“Assignment Date” is defined in Section 7.1(a) hereof.

 

“Assignment Fee” is defined in Schedule 14.12(b) hereto.

 

“Attorney Costs” means and includes all reasonable fees and disbursements of any law firm or other external counsel and the allocated cost of internal legal services and all disbursements of internal counsel.

 

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“Auto-Extension Letter of Credit” is defined in Section 2.5(b)(iii).

 

“Availability Period” means the period commencing on the Closing Date and ending on the Maturity Date.

 

“Available Loan Amount” means, at any time, the lesser of (a) the Facility Amount at such time; or (b) the Borrowing Base at such time.

 

“Bank Holding Company” means a “bank holding company” as defined in Section 2(a) of the Bank Holding Company Act of 1956, as amended, or a non-bank subsidiary of such bank holding company.

 

“Bank of America” is defined in the preamble to this Credit Agreement.

 

“Base Rate” means, for any day for any Portion of Loans for any Lender Group, a fluctuating rate per annum equal to the higher of: (a) the Federal Funds Rate for such day, plus the Applicable Margin; and (b) the rate of interest in effect for such day as publicly announced from time to time by Bank of America as its “prime rate”, plus the Applicable Margin.  The “prime rate” is a rate set by Bank of America based upon various factors including Bank of America’s costs and desired return, general economic conditions and other factors, and is used as a reference point for pricing some loans, which may be priced at, above, or below such announced rate.  Any change in such rate announced by Bank of America shall take effect at the opening of business on the day specified in the public announcement of such change.

 

“Best’s Rating” means a “Best’s Rating” by A.M. Best Company.

 

“Borrower” is defined in the preamble to this Credit Agreement.

 

“Borrower and Managing Member Security Agreement” means that certain Security Agreement, substantially in the form of Exhibit E, executed and delivered by Borrower and Managing Member in favor of Administrative Agent for the benefit of Secured Parties.

 

“Borrower Guaranty” means an unconditional guaranty of payments in the form of Exhibit N attached hereto, enforceable against Borrower for the payment of a Qualified Borrower’s debt or obligation to Secured Parties; and “Borrower Guaranties” means such guaranties, collectively.

 

“Borrower Parties” means Borrower and each Qualified Borrower; and “Borrower Party” means any of them.

 

“Borrowing” means a disbursement made by Lenders with respect to Loans hereunder (including any reimbursement of the Letter of Credit Issuer following a draw on a Letter of Credit) and “Borrowings” means the plural thereof.

 

“Borrowing Base” means the sum of (a) ninety percent (90%) of the Eligible Available Contributions of the Included Investors at such time; and (b) sixty-five percent (65%) of the Eligible Available Contributions of the Designated Investors at such time.

 

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“Borrowing Base Certificate” means the certificate setting forth the calculation of the Borrowing Base in the form of Exhibit H.

 

“Borrowing Base Deficit” means, on any date of determination, the amount (if any) by which: (a) the Principal Obligation is in excess of (b) the Borrowing Base.

 

“Business Day” means any day of the year except a Saturday, Sunday or other day on which commercial banks are authorized to close under the Laws of, or are in fact closed in, the State of New York or the city of Charlotte, North Carolina.

 

“Capital Call” means a call upon all or any of the Investors for payment of all or any portion of their Unfunded Capital Commitments pursuant to and in accordance with the terms of the Stockholders Agreement, the Partnership Agreement and/or the Operating Agreement, as applicable.

 

“Capital Call Notice” means any notice sent to an Investor for the purpose of making a Capital Call.

 

“Capital Call Notice Date” is defined in Section 5.2(c) hereof.

 

“Capital Commitment” means the commitment of each Investor to fund Capital Contributions, directly or indirectly, to a Credit Party in the amount set forth in, and pursuant to the terms of, the Stockholders Agreement, the Partnership Agreement and/or the Operating Agreement, as applicable.

 

“Capital Contribution” means for any Investor, any contribution of capital made to Borrower or the Pledgor, as applicable, in response to a Capital Call Notice.

 

“Capital Contributions Pledge Agreement” means that certain Capital Contributions Pledge Agreement, dated as of the date hereof executed and delivered by Pledgor in favor of Administrative Agent on behalf of the Secured Parties, as the same may be amended, supplemented or otherwise modified from time to time with the consent of Administrative Agent, the Letter of Credit Issuer, and the Lenders to the extent expressly required hereby, which agreement shall be substantially in the form of Exhibit L attached hereto.

 

“Capital Lease” means, as applied to any Person, any lease of any property (whether real, personal or mixed) by that Person as lessee which, in accordance with GAAP, is or should be accounted for as a capital lease on the balance sheet of that Person and the amount of such obligation shall be the capitalized amount thereof determined in accordance with GAAP.

 

“Cash Collateralize” is defined in Section 2.5(g)(ii) hereof.

 

“CERCLIS” means the Comprehensive Environmental Response, Compensation and Liability Information System.

 

“Change in Law” means the occurrence, after the date of this Credit Agreement, of any of the following: (a) the adoption or taking effect of any law, rule, regulation or treaty; (b) any change in any law, rule, regulation or treaty or in the administration, interpretation or application thereof by any Governmental Authority; or (c) the making or issuance of any request, guideline or directive (whether or not having the force of law) by any Governmental Authority.

 

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“Closing Date” means the date on which all of the conditions precedent set forth in Section 8.1 hereof are satisfied or waived.

 

“Code” means the Uniform Commercial Code as adopted in the State of New York and any other state, which governs creation or perfection (and the effect thereof) of security interests in any collateral for the Obligations.

 

“Collateral” is defined in Section 5.1(a) hereof.

 

“Collateral Account” is defined in Section 5.2(a).

 

“Collateral Documents” means the security agreements, financing statements, assignments and other documents and instruments from time to time executed and delivered pursuant to this Credit Agreement and any documents or instruments amending or supplementing the same, including, without limitation, the Borrower and Managing Member Security Agreement, the Capital Contributions Pledge Agreement and the Account Assignment.

 

“Commercial Paper” means, with respect to a Conduit Lender, the promissory notes issued or to be issued by such Conduit Lender (or its related commercial paper issuer if such Conduit Lender does not itself issue commercial paper) in the commercial paper market.

 

“Commitment” means, with respect to each Alternate Lender, as the context requires, the commitment of such Alternate Lender to make Loans (including Loans funding draws under Letters of Credit) and to pay Assignment Amounts in accordance herewith in an amount not to exceed the amount set forth opposite such Alternate Lender’s name on Schedule 1.1 hereof and the heading “Commitment” (or, in the case of an Alternate Lender which becomes a party hereto pursuant to an Assignment and Assumption Agreement entered into pursuant to the terms hereof, as set forth in such Assignment and Assumption Agreement); minus the amount of any Commitment or portion thereof assigned by such Alternate Lender pursuant to an Assignment and Assumption Agreement entered into pursuant to the terms hereof; plus the amount of any increase to such Alternate Lender’s Commitment consented to by such Alternate Lender prior to the time of determination; provided, however, that, to the extent that the Facility Amount is reduced or otherwise declines, the aggregate of the Commitments of all the Alternate Lenders shall decline by a like amount and the Commitment of each Alternate Lender shall decline in proportion thereto.

 

“Compliance Certificate” is defined in Section 10.1(d).

 

“Concentration Limit” has the meaning provided in the definition of “Inclusion Percentage”.

 

“Conduit Assignee” means any special purpose entity that finances its activities directly or indirectly through asset backed commercial paper and is administered by an Administrator or any of its Affiliates and designated by such Administrator from time to time to accept an assignment from the applicable Conduit Lender of all or a portion of its Loans and other interests hereunder.

 

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“Conduit Collateral Agent” means, with respect to any Conduit Lender, the “Collateral Agent” (if any) with respect to such Conduit Lender’s commercial paper program.

 

“Conduit Investment Termination Date” means, with respect to any Conduit Lender, the date of the delivery by such Conduit Lender to the Borrower of written notice that such Conduit Lender elects, in its sole discretion, not to make any further Loans or participate in any further Letters of Credit hereunder.

 

“Conduit Lender” means:  (a) YC SUSI and any permitted Conduit Assignee thereof; and (b) any other Person that shall become a party to this Credit Agreement as a “Conduit Lender” pursuant to the terms hereof; and, subject to the terms and conditions of this Credit Agreement, their respective successors and assigns (but not any Participant who is not otherwise a party to this Credit Agreement).

 

“Conduit Lender Percentage” means, with respect to any Conduit Lender, at any time, 100%, less the Alternate Lender Percentage of such Conduit Lender’s Lender Group at such time.

 

“Constituent Documents” means, for any entity, its constituent or organizational documents, including: (a) in the case of a limited partnership, its certificate of registration as a limited partnership and its limited partnership agreement; (b) in the case of a limited liability company, its certificate of formation or organization and its operating agreement or limited liability company agreement; (c) in the case of a corporation, its articles or certificate of incorporation and its bylaws; and (d) in the case of a joint venture, trust or other form of business entity, the partnership, joint venture or other applicable agreement of formation and any agreement, instrument, filing or notice with respect thereto filed in connection with its formation with the secretary of state or other department in the state or jurisdiction of its formation, in each case as amended from time to time.

 

“Controlled Group” means:  (a) the controlled group of corporations as defined in Section 1563 of the Internal Revenue Code; or (b) the group of trades or businesses under common control as defined in Section 414(c) of the Internal Revenue Code, in each case of which any Borrower Party is a part or may become a part.

 

“CP Rate” means, for any Interest Period for any Portion of Loans funded by a Conduit Lender (or its related commercial paper issuer if such Conduit Lender does not itself issue commercial paper) of a Lender Group by issuing Commercial Paper, the per annum rate equivalent to the sum of (a) the Used Fee, (b) the Dealer Fee, and (c) the weighted average cost (as determined by the applicable Administrator and including incremental carrying costs incurred with respect to Commercial Paper maturing on dates other than those on which corresponding funds are received by such Conduit Lender, other borrowings by such Conduit Lender (other than under any Program Support Agreement) and any other costs associated with the issuance of Commercial Paper) of or related to the issuance of Commercial Paper that are allocated, in whole or in part, by such Conduit Lender or the applicable Administrator to fund or maintain such Portion of Loans (and which may be also allocated in part to the funding of other assets of such Conduit Lender); provided, however, that if any component of such rate is a discount rate, in calculating the “CP Rate” for such Portion of Loans for such Interest Period, such Conduit Lender shall for such component use the rate resulting from converting such discount rate to an interest bearing equivalent rate per annum.

 

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“Credit Agreement” is defined in the preamble hereto.

 

“Credit Parties” means Borrower, each Qualified Borrower, Managing Member, Guarantor and Pledgor; “Credit Party” means any one of them.

 

“Credit Party Claims” is defined in Section 5.4 hereof.

 

“Credit Provider” means a Person providing a guaranty, in form and substance reasonably acceptable to Administrative Agent, of the obligations of an Included Investor to make Capital Contributions to a Credit Party, or, under the applicable Investor Letter, to Administrative Agent for the benefit of the Secured Parties.

 

“Current Party” is defined in Section 14.13.

 

“Dealer Fee” has the meaning provided in the Fee Letter.

 

“Debtor Relief Laws” means any applicable liquidation, conservatorship, bankruptcy, moratorium, rearrangement, insolvency, fraudulent conveyance, reorganization, or similar laws affecting the rights, remedies, or recourse of creditors generally, including without limitation the United States Bankruptcy Code and all amendments thereto, as are in effect from time to time during the term of the Loans.

 

“Default Rate” has the meaning provided in the Fee Letter.

 

“Defaulting Alternate Lender” means any Alternate Lender that: (a) has failed to make its Pro Rata Share of any advance required to be made in respect of Loans or any disbursement by the Letter of Credit Issuer in respect of Loans or Letters of Credit, respectively; (b) has otherwise failed to pay over to the Administrative Agent or any other Lender any other amount required to be paid by it hereunder within one (1) Business Day of the date when due, unless the subject of a good faith dispute; or (c) has been deemed insolvent or become the subject of a bankruptcy or insolvency proceeding.

 

“Defaulting Investor” is defined in Section 2.1(c) hereof.

 

“Designated Exclusion Event” means that, at any time, either: (a) five (5) Designated Investors are Defaulting Investors, or (b) Designated Investors with an aggregate Unfunded Capital Commitment greater than 10% of the total aggregate Unfunded Capital Commitment of all Investors are Defaulting Investors, provided, that for purposes of determining a Designated Exclusion Event, any (i) Designated Investor that becomes a Defaulting Investor but that is replaced by the Credit Parties with a new Designated Investor, or (ii) whose obligations are transferred to any existing Designated Investor or Included Investor in accordance with the terms of this Credit Agreement and the Operating Agreement or Stockholders Agreement, as applicable, shall not be counted.

 

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“Designated Investor” means any Investor (other than an Included Investor):  (a) that has been so designated by 100% of the Lenders (in their sole discretion) as a Designated Investor, as evidenced in writing executed by Administrative Agent; and (b) that has delivered to Administrative Agent the information and documents required under Section 8.1(p); provided that, from and after the occurrence of an Investor’s Effective Removal Date, the Investor shall no longer be a Designated Investor until such time as all Exclusion Events affecting such Investor have been cured and such Investor shall have been approved again as a Designated Investor in the sole and absolute discretion of the Required Lenders.  Designated Investors approved as such as of the Closing Date are as set forth on Exhibit A.

 

“Dollars” and the sign “$” means lawful currency of the United States of America.

 

“Downgrade Collateral Account” is defined in Section 7.2(a) hereof.

 

“Downgrade Draw” is defined in Section 7.2(a) hereof.

 

“Effective Removal Date” means, with respect to any Investor, fifteen (15) Business  Days following the occurrence of an Exclusion Event with respect to such Investor.

 

“Eligible Assignee” means: (a) a Lender or Program Support Provider; (b) an Affiliate of a Lender or an Approved Fund with respect to a Lender; and (c) any other Person approved by: (i) Administrative Agent and, (ii) unless an Event of Default exists and is continuing at the time any assignment is effected in accordance with Section 14.12(b) hereof, Borrower, each such approval not to be unreasonably withheld or delayed by Borrower or Administrative Agent, as applicable, and such approval to be deemed given by Borrower if no objection is received by the assigning Lender and Administrative Agent from Borrower within five (5) Business Days after notice of such proposed assignment has been provided by the assigning Lender to Borrower; provided, however, that no Credit Party or Affiliate of any Credit Party shall qualify as an “Eligible Assignee.”

 

“Eligible Available Contributions of the Designated Investors” means, as of any date, an amount equal to the sum of the products of (a) the Inclusion Percentage for each Designated Investor multiplied by (b) the Unfunded Capital Commitment of such Designated Investor, provided, that at any time a Designated Exclusion Event has occurred and is continuing, the Eligible Available Contributions of all Designated Investors shall be zero.

 

“Eligible Available Contributions of the Included Investors” means, as of any date, an amount equal to the sum of the products of (a) the Inclusion Percentage for each Included Investor multiplied by (b) the Unfunded Capital Commitment of such Included Investor.

 

“Environmental Complaint” means any complaint, order, demand, citation or notice threatened or issued in writing to any Credit Party by any Person with regard to air emissions, water discharges, Releases, or disposal of any Hazardous Material, noise emissions or any other environmental, health or safety matter affecting any Credit Party or any of their Properties.

 

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“Environmental Laws” means:  (a) the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended by the Superfund Amendments and Re-authorization Act of 1986, 42 U.S.C. §9601 et seq.; (b) the Resource Conservation and Recovery Act of 1976, as amended by the Hazardous and Solid Waste Amendments of 1984, 42 U.S.C. §6901 et seq.; (c) the Clean Air Act, 42 U.S.C. §7401 et seq., as amended by the Clean Air Act Amendments of 1990; (d) the Clean Water Act of 1977, 33 U.S.C. §1251 et seq.; (e) the Toxic Substances Control Act, 15 U.S.C.A. §2601 et seq.; (f) all other federal, state and local laws, or ordinances, regulations or policies relating to pollution or protection of human health or the environment including without limitation, air pollution, water pollution, noise control, or the use, handling, discharge, disposal or Release or recovery of on-site or off-site Hazardous Materials, as each of the foregoing may be amended from time to time, applicable to any Credit Party, and (g) any and all regulations promulgated under or pursuant to any of the foregoing statutes.

 

“Environmental Liability” means any written claim, demand, obligation, cause of action, accusation or allegation, or any order, violation, damage (including, without limitation, to any Person, property or natural resources), injury, judgment, penalty or fine, cost of enforcement, cost of remedial action, cleanup, restoration or any other cost or expense whatsoever, including Attorney Costs and disbursements resulting from the violation or alleged violation of any Environmental Law or the imposition of any Environmental Lien or otherwise arising under any Environmental Law or resulting from any common law cause of action asserted by any Person.

 

“Environmental Lien” means a Lien in favor of any Governmental Authority:  (a) under any Environmental Law; or (b) for any liability or damages arising from, or costs incurred by, any Governmental Authority in response to the Release or threatened Release of any Hazardous Material.

 

“Environmental Requirement” means any Environmental Law, agreement, or restriction, as the same now exists or may be changed, amended, or come into effect in the future, which pertains to health, safety, or the environment, including, but not limited to ground, air, water, or noise pollution, or underground or aboveground tanks.

 

“Equity Interest” means, (a) with respect to any member of Borrower, its Membership Interest, and (b) with respect to any Stockholder, its Stockholder Interest.

 

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended, and the rules and regulations promulgated thereunder by any Governmental Authority, as from time to time in effect.

 

“ERISA Investor” means an Investor that is (a) an “employee benefit plan” (as such term is defined in Section 3(3) of ERISA) subject to Title I of ERISA, (b) any “plan” defined in Section 4975(e) of the Code other than a governmental plan, (c) a group trust, as described in Revenue Ruling 81-100, or (d) a partnership or commingled account of a fund, or any other entity, whose assets include or are deemed to include the assets of one or more such employee benefit plans subject to Title I of ERISA, as determined under Section 2510.3-101 or Section 2550.401c-1 of the regulations of the United States Department of Labor or under any other relevant legal authority.

 

Revolving Credit Agreement

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“Event of Default” is defined in Section 12.1 hereof.

 

“Excluded Taxes” means, with respect to any Tax Indemnified Party or any other recipient of any payment to be made by or on account of any obligation of any Credit Party hereunder: (a) taxes imposed on or measured by its net income (however denominated), and franchise taxes imposed on it (in lieu of net income taxes), by the jurisdiction (or any political subdivision thereof) under the laws of which such Tax Indemnified Party or recipient is organized or in which its principal office is located or, in the case of any Lender, in which its applicable Lending Office is located; (b) any branch profits taxes imposed by the United States or any similar tax imposed by any other jurisdiction in which such Credit Party is located; and (c) in the case of a Foreign Person (other than an assignee pursuant to a request by the Borrower under Section 14.14), any withholding tax that (i) is attributable to such Foreign Person’s failure or inability (other than as a result of a Change in Law) to comply with Section 4.1(e), or (ii) is imposed on amounts payable to such Foreign Person at the time such Foreign Person becomes a party hereto (or designates a new Lending Office) except to the extent of the additional amounts, if any, that such Foreign Person (or its assignor, if any) was entitled, at the time of designation of a new Lending Office (or assignment), to receive from the Borrower with respect to such withholding tax pursuant to Section 4.1(a).

 

“Exclusion Event” is defined in Section 2.1(c) hereof.

 

“Facility Amount” means an amount equal to $75,000,000 as it may be reduced by Borrower pursuant to Section 3.6, or increased pursuant to Section 2.12 (not to exceed the Maximum Commitment).

 

“Facility Increase Request” means the notice in the form of Exhibit G pursuant to which Borrower requests an increase of the Commitments in accordance with Section 2.12.

 

“Federal Funds Rate” means, for any day, the rate per annum (rounded upwards, if necessary, to the nearest 1/100 of 1%) equal to the weighted average of the rates on overnight Federal funds transactions with members of the Federal Reserve System arranged by Federal funds brokers on such day, as published by the Federal Reserve Bank of New York on the Business Day next succeeding such day; provided that (a) if such day is not a Business Day, the Federal Funds Rate for such day shall be such rate on such transactions on the next preceding Business Day as so published on the next succeeding Business Day, and (b) if no such rate is so published on such next succeeding Business Day, the Federal Funds Rate for such day shall be the average rate charged to the Administrative Agent on such day on such transactions as determined by it.

 

“Fee Letter” shall mean, collectively, each separate letter agreement by and among Borrower and each Managing Agent and/or Administrative Agent, together with all amendments and modifications thereof.

 

“Foreign Person” means, with respect to any Credit Party, any Tax Indemnified Party that is a resident of or organized under the laws of a jurisdiction other than that in which such Credit Party is resident for tax purposes.  For purposes of this definition, the United States, each State thereof and the District of Columbian shall be deemed to constitute a single jurisdiction.

 

Revolving Credit Agreement

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“Funding Ratio” means:  (a) for a Governmental Plan Investor, the actuarial present value of the assets of the plan over the actuarial present value of the plan’s total benefit liabilities, as reported in such plan’s audited financial statements; and (b) for an ERISA Investor, the funded current liability percentage reported on Schedule B to the most recent Form 5500 filed by such plan with the United States Department of Labor.

 

“Generally Accepted Accounting Principles” or “GAAP” means those generally accepted accounting principles and practices that are recognized as such by the American Institute of Certified Public Accountants or by the Financial Accounting Standards Board or through other appropriate boards or committees thereof, and that are consistently applied for all periods, after the date hereof, so as to properly reflect the financial position of such Person, except that any accounting principle or practice required to be changed by the Financial Accounting Standards Board (or other appropriate board or committee of the said Board) in order to continue as a generally accepted accounting principle or practice may be so changed.

 

“Governmental Authority” means any foreign governmental authority, the United States of America, any State of the United States of America, and any subdivision of any of the foregoing, and any agency, department, commission, board, authority or instrumentality, bureau or court having jurisdiction over any Credit Party, any Agent, any Lender or the Letter of Credit Issuer, or any of their respective businesses, operations, assets, or properties.

 

“Governmental Plan Investor” means an Investor that is a pension plan and that is a governmental plan as defined in Section 3(32) of ERISA.

 

“Guaranteed Obligations” means those obligations guaranteed by the Guarantor pursuant to the Guaranty of Capital.

 

“Guarantor” is defined in the preamble to this Credit Agreement.

 

“Guaranty” means the guaranty of the Guarantor made pursuant to the Guaranty of Capital.

 

“Guaranty Obligations” means, with respect to any Person, without duplication, any obligations (other than endorsements in the ordinary course of business of negotiable instruments for deposit or collection) guaranteeing any Indebtedness of any other Person in any manner, whether direct or indirect, and including without limitation any obligation, whether or not contingent:  (a) to purchase any such Indebtedness or other obligation or any property constituting security therefor; (b) to advance or provide funds or other support for the payment or purchase of such Indebtedness or obligation or to maintain working capital, solvency or other balance sheet condition of such other Person (including, without limitation, maintenance agreements, comfort letters, take or pay arrangements, put agreements or similar agreements or arrangements) for the benefit of the holder of Indebtedness of such other Person; (c) to lease or purchase property, securities or services primarily for the purpose of assuring the owner of such Indebtedness; or (d) to otherwise assure or hold harmless the owner of such Indebtedness or obligation against loss in respect thereof.

 

Revolving Credit Agreement

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“Guaranty of Capital” means that certain Guaranty of Capital, substantially in the form of Exhibit P, dated as of the date hereof, executed by Guarantor in favor of Administrative Agent on behalf of the Secured Parties.

 

“Hazardous Material” means any substance, material, or waste which is or becomes regulated, under any Environmental Law, as hazardous to public health or safety or to the environment, including, but not limited to:  (a) any substance or material designated as a “hazardous substance” pursuant to Section 311 of the Clean Water Act, as amended, 33 U.S.C. §1251 et seq., or listed pursuant to Section 307 of the Clean Water Act, as amended; (b) any substance or material defined as “hazardous waste” pursuant to Section 1004 of the Resource Conservation and Recovery Act, as amended, 42 U.S.C. §6901 et seq.; (c) any substance or material defined as a “hazardous substance” pursuant to Section 101 of the Comprehensive Environmental Response, Compensation and Liability Act, as amended, 42 U.S.C. §9601 et seq.; or (d) petroleum, petroleum products and petroleum waste materials.

 

“Hedging Agreements” means, collectively, interest rate protection agreements, foreign currency exchange agreements, commodity purchase or option agreements or other interest or exchange rate or commodity price hedging agreements, in each case, entered into or purchased by Borrower.

 

“Honor Date” is defined in Section 2.5(c)(i) hereof.

 

“Implicit Borrowing Base Deficit” means, on any date of determination, the amount (if any) by which:  (a) the aggregate Principal Obligation is in excess of (b) the Borrowing Base (provided that, for purposes of this definition, the Borrowing Base shall be calculated as if each Effective Removal Date related to each Exclusion Event shall have occurred).

 

“Included Investor” means an Investor: (a) that has, or that has a Credit Provider that has, met the Applicable Requirement for such Investor and that has been designated on the Closing Date by Administrative Agent as an “Included Investor”; (b) that has delivered to Administrative Agent the information and documents required under Section 8.1(p); and (c) for Investors being added to the Borrowing Base as an “Included Investor” after the Closing Date, satisfaction of the requirements in clauses (a) and (b) above and (i) in the case of a Rated Investor, with the consent of the Administrative Agent, acting alone (which shall not be unreasonably withheld) as evidenced in a writing executed by Administrative Agent, and (ii) in the cased of a Non-Rated Investor, with the consent of 100% of the Lenders, as evidenced in a writing executed by Administrative Agent; provided that a Defaulting Investor shall no longer be an Included Investor until such time as all Exclusion Events affecting such Investor have been cured and such Investor shall have been approved in writing as an Included Investor in the sole and absolute discretion of Administrative Agent, the Letter of Credit Issuer, and all of the Lenders.  Included Investors approved as such on the Closing Date are as set forth on Exhibit A.

 

“Inclusion Percentage” means, (a) with respect to each Included Investor and each Designated Investor, the highest percentage (up to 100%) which results in an aggregate amount of Unfunded Capital Commitment of such Investor at such time not exceeding the applicable Concentration Limit (as set forth below) for such Investor as a percentage of the total aggregate Unfunded Capital Commitment of all Investors at such time:

 

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Rating (1)

	
Concentration Limit (as a percentage of the 

total aggregate Unfunded Capital Commitment

 of all Investors)

	
AAA/Aaa

	
15.0%

	
AA-/Aa3

	
15.0%

	
A-/A3 or higher

	
10.0%

	
BBB/Baa2 or higher

	
5.0%

	
Non-Rated Included Investors(2)

	
15.0%

	
Designated Investors(3)

	
2.0%

 

(1)           Is the lower of the Rating of the Investor (or its Credit Provider, if applicable) as issued by either Standard & Poor’s or Moody’s.  If any Investor has only one Rating from either Standard & Poor’s or Moody’s, then that Rating shall apply.  For any Investor that is an unrated subsidiary of a parent with a Rating, a guaranty from the rated parent entity is required in order to apply the Concentration Limit applicable to the rated parent.

 

(2)           In the aggregate may not exceed 50% of the total aggregate Unfunded Capital Commitment of all Investors at any time.

 

(3)           In the aggregate may not exceed 45% of the total aggregate Unfunded Capital Commitment of all Investors at any time.

 

(b)           notwithstanding anything in clause (a) of this definition to the contrary, so long as Yale University and/or any of its affiliates qualifies as an Included Investor and has a Rating of AAA/Aaa, its Concentration Limit (collectively with any affiliates) will be 17%.

 

“Indebtedness” means, as to any Person at a particular time, without duplication, all of the following, whether or not included as indebtedness or liabilities in accordance with GAAP:

 

(a) all obligations of such Person for borrowed money and all obligations of such Person evidenced by bonds, debentures, notes, loan agreements or other similar instruments;

 

(b) all direct or contingent obligations of such Person arising under letters of credit (including standby and commercial), bankers’ acceptances, bank guaranties and similar instruments;

 

(c) all net obligations of such Person under any Swap Contract;

 

(d) all obligations of such Person to pay the deferred purchase price of property or services (other than trade accounts payable in the ordinary course of business);

 

(e) all indebtedness (excluding prepaid interest thereon) secured by a Lien on property owned or being acquired by such Person (including indebtedness arising under conditional sales or other title retention agreements), whether or not such indebtedness shall have been assumed by such Person or is limited in recourse;

 

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(f) all Capital Leases and Synthetic Lease Obligations; and

 

(g) all Guaranty Obligations of such Person in respect of any of the foregoing.

 

For all purposes hereof, the Indebtedness of any Person shall include the Indebtedness of any partnership or joint venture (other than a joint venture that is itself a corporation or limited liability company) in which such Person is a general partner or a joint venturer, unless such Indebtedness is expressly made non-recourse to such Person.  The amount of any net obligation under any Swap Contract on any date shall be deemed to be the Swap Termination Value thereof as of such date.  The amount of any Capital Lease or Synthetic Lease Obligation as of any date shall be deemed to be the amount of Attributable Indebtedness in respect thereof as of such date.

 

“Indemnified Taxes” means Taxes other than Excluded Taxes.

 

“Indemnitee” is defined in Section 14.6(b) hereof.

 

“Interest Component” means, with respect to a Conduit Lender, at any time of determination, the aggregate for all Related Commercial Paper of such Conduit Lender at such time of:  (a) with respect to any Commercial Paper issued on an interest bearing basis, the interest payable on such Commercial Paper at its maturity (including any dealer commissions); and (b) with respect to any Commercial Paper issued on a discount basis, the portion of the face amount of such Commercial Paper representing the discount incurred in respect thereof (including any dealer commissions).

 

“Interest Period” means, (a) with respect to any Portion of Loans funded by the issuance of Commercial Paper, (i) initially the period commencing on (and including) the date of the initial purchase or funding of such Portion of Loans and ending on (and including) the last day of the current calendar month, and (ii) thereafter, each period commencing on (and including) the first day after the last day of the immediately preceding Interest Period for such Portion of Loans and ending on (and including) the last day of the current calendar month; and (b) with respect to any Portion of Loans not funded by the issuance of Commercial Paper, (i) initially the period commencing on (and including) the date of the initial purchase or funding of such Portion of Loans and ending on (but excluding) the next following Settlement Date, and (ii) thereafter, each period commencing on (and including) a Settlement Date and ending on (but excluding) the next following Settlement Date; provided, that

 

(A)           any Interest Period with respect to any Portion of Loans which would otherwise end on a day which is not a Business Day shall be extended to the next succeeding Business Day; provided, however, if Yield in respect of such Interest Period is computed by reference to the LIBOR Rate, and such Interest Period would otherwise end on a day which is not a Business Day, and there is no subsequent Business Day in the same calendar month as such day, such Interest Period shall end on the next preceding Business Day;

 

(B)           in the case of any Interest Period for any Portion of Loans which commences before the Maturity Date and would otherwise end on a date occurring after the Maturity Date, such Interest Period shall end on (but exclude) such Maturity Date and the duration of each Interest Period which commences on or after the Maturity Date shall be of such duration as shall be selected by the applicable Managing Agent; and

 

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(C)           any Interest Period in respect of which Yield is computed by reference to the CP Rate may be terminated at the election of applicable Managing Agent, in which case the Portion of Loans allocated to such terminated Interest Period shall be allocated to a new Interest Period commencing on (and including) the date of such termination and ending on (but excluding) the next following Settlement Date, and shall accrue Yield at the Alternate Rate.

 

“Internal Revenue Code” means the United States Internal Revenue Code of 1986, as amended.

 

“Investment Period” has the meaning provided in the Operating Agreement.

 

“Investor” means each of Managing Member, Pledgor, any other member of Borrower or Stockholder of Pledgor, as applicable.

 

“Investor Letter” is defined in Section 5.1(b) hereof.

 

“Investor Documents” means the Operating Agreement, the Stockholders Agreement, each Investor Letter, and any amendments or supplements thereto or modifications thereof, executed or delivered pursuant to the terms thereof and this Credit Agreement, and any additional documents delivered in connection with any such amendment, supplement or modification.

 

“ISP” means, with respect to any Letter of Credit, the “International Standby Practices 1998” published by the Institute of International Banking Law & Practice (or such later version thereof as may be in effect at the time of issuance).

 

“Issuer Documents” means with respect to any Letter of Credit, the Request for Letter of Credit, the Application and Agreement for Letter of Credit, and any other document, agreement and instrument entered into by the Letter of Credit Issuer and a Borrower Party or in favor of the Letter of Credit Issuer and relating to any such Letter of Credit.

 

“L/C Advance” means, with respect to each Lender, such Lender’s funding of its participation in any L/C Borrowing.  All L/C Advances shall be denominated in Dollars.

 

“L/C Borrowing” means an extension of credit resulting from a drawing under any Letter of Credit which has not been reimbursed on the date when made or refinanced as a Borrowing.  All L/C Borrowings shall be denominated in Dollars.

 

“Laws” means, collectively, all international, foreign, Federal, state and local statutes, treaties, rules, guidelines, regulations, ordinances, codes and administrative or judicial precedents or authorities, including the interpretation or administration thereof by any Governmental Authority charged with the enforcement, interpretation or administration thereof, and all applicable administrative orders, directed duties, requests, licenses, authorizations and permits of, and agreements with, any Governmental Authority, in each case whether or not having the force of law.

 

Revolving Credit Agreement

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“Lender” means each Conduit Lender and each Alternate Lender, as the context may require, and collectively, the “Lenders”.

 

“Lender Group” means each of:  (a) the YC SUSI Lender Group; and (b) any other “Lender Group” from time to time party hereto in accordance with the terms hereof as designated by the Managing Agent of such group.

 

“Lender Group Percentage” means, for any Lender Group, the percentage equivalent (carried out to five decimal places) of a fraction the numerator of which is the aggregate Commitments or Principal Obligation, as applicable, of all Lenders in such Lender Group and the denominator of which is the aggregate Commitments or Principal Obligation, as applicable, of all Lenders in all Lender Groups.

 

“Lender Party” is defined in Section 13.1(a) hereof.

 

“Lending Office” means, as to any Lender, the office or offices of such Lender (or an affiliate of such Lender) identified on Schedule 14.7, or such other office or offices as a Lender may from time to time notify Borrower and Administrative Agent.

 

“Letter of Credit” means a standby letter of credit issued by the Letter of Credit Issuer pursuant to Section 2.5 hereof in the form of Exhibit D-2 hereto (or such other form as approved by the Letter of Credit Issuer) in Dollars either as originally issued or as the same may, from time to time, be amended or otherwise modified or extended.

 

“Letter of Credit Expiration Date” means the day that is the earlier of: (a) fifteen (15) days prior to the Stated Maturity Date then in effect (or, if such day is not a Business Day, the next preceding Business Day); or (b) the date upon which Administrative Agent declares the Obligations due and payable after the occurrence of an Event of Default.

 

“Letter of Credit Fees” is defined in Section 2.10 hereof.

 

“Letter of Credit Issuer” means Bank of America, or any Lender or Affiliate of such Lender so designated, and which accepts such designation, by Administrative Agent and approved by Borrower.

 

“Letter of Credit Liability” means the aggregate amount of the undrawn face amount of all outstanding Letters of Credit plus the amount drawn under Letters of Credit for which the Letter of Credit Issuer and Lenders, or any one or more of them, have not yet received payment or reimbursement (in the form of a conversion of such liability to Loans, or otherwise) as required pursuant to Section 2.5.  For all purposes of this Credit Agreement, if on any date of determination a Letter of Credit has expired by its terms but any amount may still be drawn thereunder by reason of the operation of Rule 3.14 of the ISP, such Letter of Credit shall be deemed to be “outstanding” in the amount so remaining available to be drawn.

 

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“Letter of Credit Sublimit” means, at any time, seventy-five percent (75%) of the Facility Amount at such time.

 

“LIBOR Rate” means, for any Interest Period for any Portion of Loans for any Lender Group, a rate per annum determined by Administrative Agent pursuant to the following formula:

 

	
LIBOR Rate =

	
London Interbank Offered Rate

	  	
1.00 – Eurocurrency Reserve Percentage

	
where,

	  

 

“London Interbank Offered Rate” means, for such Interest Period:

 

(a)           the rate per annum (carried out to the fifth decimal place) equal to the rate that appears on the page of the Telerate Screen that displays an average British Bankers Association Interest Settlement Rate (such page currently being page number 3750) for deposits in Dollars (for delivery on the first day of such Interest Period) with a term equivalent to such Interest Period, determined as of approximately 11:00 a.m. (London time) two Business Days prior to the first day of such Interest Period, or

 

(b)           in the event that the rate referenced in the preceding subsection (a) does not appear on such page or service or such page or service shall cease to be available, the rate per annum (carried to the fifth decimal place) equal to the rate determined by Administrative Agent to be the offered rate on such other page or other service that displays an average British Bankers Association Interest Settlement Rate for deposits in Dollars (for delivery on the first day of such Interest Period) with a term equivalent to such Interest Period, determined as of approximately 11:00 a.m. (London time) two Business Days prior to the first day of such Interest Period for a term comparable to such Interest Period, or

 

(c)           in the event the rates referenced in the preceding subsections (a) or (b) are not available, the rate per annum determined by Administrative Agent as the rate of interest at which deposits in Dollars (for delivery on the first day of such Interest Period) in same day funds in the approximate amount of the applicable Portion of Loans to be funded by reference to the LIBOR Rate and with a term equivalent to such Interest Period would be offered by its London Branch to major banks in the offshore interbank market at their request at approximately 11:00 a.m. (London time) two Business Days prior to the first day of such Interest Period; and

 

“Eurocurrency Reserve Percentage” means, for any day during any Interest Period, the maximum effective reserve percentage (expressed as a decimal, carried out to the fifth decimal place) in effect on such date, whether or not applicable to any Lender, under regulations issued from time to time by the Board of Governors of the Federal Reserve System (or any successor), as such regulation may be amended from time to time or any successor regulation, for determining the maximum reserve requirement (including any supplemental, emergency, or marginal reserve requirement) with respect to eurocurrency funding (currently referred to as “eurocurrency liabilities”).  The LIBOR Rate shall be adjusted automatically on and as of the effective date of any change in the Eurocurrency Reserve Percentage.

 

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“Lien” means any lien, mortgage, security interest, tax lien, pledge, encumbrance, or conditional sale or title retention arrangement, or any other interest in property designed to secure the repayment of indebtedness, whether arising by agreement or under any statute or law, or otherwise.

 

“Liquidity Commitment” means an amount equal to 102% of the Facility Amount in effect from time to time.

 

“Loan” means an extension of credit by a Lender to a Borrower Party pursuant to the terms and conditions of this Credit Agreement, and “Loans” means the plural thereof.  All Loans shall be denominated in Dollars.

 

“Loan Amount” is defined in Section 2.3(g) hereof.

 

“Loan Date” is defined in Section 2.3(a) hereof.

 

“Loan Deficit” is defined in Section 2.3(h) hereof.

 

“Loan Documents” means this Credit Agreement, the Notes (including any renewals, extensions, re-issuances and refundings thereof), each Application and Agreement for Letter of Credit, each of the Collateral Documents, the Guaranty of Capital, each Assignment and Assumption Agreement and such other agreements and documents, and any amendments or supplements thereto or modifications thereof, executed or delivered pursuant to the terms of this Credit Agreement or any of the other Loan Documents and any additional documents delivered in connection with any such amendment, supplement or modification.

 

“Loan Notice” means any notice substantially in the form of Exhibit C, containing the information specified therein, executed and delivered by a Borrower Party.

 

“Managing Agent” means, with respect to any Lender Group, the Person acting as Managing Agent therefor and designated as such on the signature pages hereto or in the assignment pursuant to which such Lender Group becomes a party hereto, and its successors and assigns.

 

“Managing Member” is defined in the preamble to this Credit Agreement.

 

“Margin Stock” shall have the meaning assigned to such term in Regulation U.

 

“Material Adverse Effect” means any circumstances or events which could reasonably be expected to:  (a) have any material adverse effect upon the validity, performance, or enforceability of any of the Loan Documents executed by Borrower, any Qualified Borrower, Managing Member, Guarantor or Pledgor; (b) materially impair the ability of Borrower, Managing Member, Guarantor or Pledgor, or any one of them, to fulfill their respective obligations under the Loan Documents; (c) cause an Event of Default; or (d) impair, impede, or jeopardize, in any material respect, the obligation or the liability of Borrower, Managing Member, Guarantor or Pledgor to fulfill its obligations under the Operating Agreement, Stockholders Agreement or Partnership Agreement, as applicable.

 

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“Maturity Date” means the earliest of: (a) the Stated Maturity Date; (b) the date upon which Administrative Agent declares the Obligations due and payable after the occurrence of an Event of Default; (c) the date upon which Borrower terminates the Commitments pursuant to Section 3.6 hereof or otherwise and (d) fifteen (15) Business Days prior to the end of the Investment Period.

 

“Maximum Commitment” means an amount equal to $300,000,000, as it may be reduced by Borrower pursuant to Section 3.6.

 

“Maximum Rate” means, on any day, the highest rate of interest (if any) permitted by applicable law on such day.

 

“Membership Interest” means, with respect to any member of Borrower, the equity interest of such member in Borrower.

 

“Moody’s” means Moody’s Investors Service, Inc. and any successor thereto.

 

“Non-Defaulting Alternate Lender” is defined in Section 2.3(h) hereof.

 

“Non-Extension Notice Date” is defined in Section 2.5(b)(iii) hereof.

 

“Non-Rated Investor” means an Investor that is not a Rated Investor.

 

“Non-Rated Included Investor” means an Included Investor that is not a Rated Investor.

 

“Notes” means the promissory notes provided for in Section 3.1 hereof, and all promissory notes delivered in substitution or exchange therefor, as such notes may be amended, restated, reissued, extended or modified, and the Qualified Borrower Notes; and “Note” means any one of the Notes.

 

“Obligations” means all present and future Indebtedness, obligations, and liabilities of any Credit Party to any of the Secured Parties, and all renewals and extensions thereof (including, without limitation, Loans, Letters of Credit Liability, or both), or any part thereof, arising pursuant to this Credit Agreement (including, without limitation, the indemnity provisions hereof) or represented by the Notes and each Application and Agreement for Letter of Credit, and all interest accruing thereon, and Attorney Costs incurred in the enforcement or collection thereof, regardless of whether such indebtedness, obligations, and liabilities are direct, indirect, fixed, contingent, joint, several, or joint and several; together with all indebtedness, obligations, and liabilities of any Credit Party to any of the Secured Parties evidenced or arising pursuant to any of the other Loan Documents, and all renewals and extensions thereof, or any part thereof.

 

“Operating Agreement” means that certain Operating Agreement of Borrower, by and among Managing Member and Pledgor dated as of May 15, 2007, as supplemented by that certain pledge agreement, dated as of May 15, 2007, from Pledgor to Borrower, as each may be restated, modified, amended or supplemented from time to time, with the consent of Administrative Agent, the Letter of Credit Issuer, and the Lenders to the extent expressly required hereby.

 

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“Operating Company” means an “operating company” within the meaning of 29 C.F.R. §2510.3-101(c) of the regulations of the United States Department of Labor.

 

“Other Taxes” means all present or future stamp or documentary taxes or any other excise or property taxes, charges or similar levies arising from any payment made hereunder or under any other Loan Document or from the execution, delivery or enforcement of, or otherwise with respect to, this Credit Agreement or any other Loan Document.

 

“Participant” is defined in Section 14.12(f).

 

“Partnership Agreement” means that certain Agreement of Limited Partnership of Guarantor, dated as of May 13, 2003, as previously restated, modified, amended or supplemented from time to time, with the consent of the Administrative Agent, the Letter of Credit Issuer and the Lenders to the extent expressly required hereby.

 

“Pending Capital Call” means any Capital Call that has been made upon the Investors and that has not yet been funded by the applicable Investor, but with respect to which such Investor is not in default.

 

“Person” means an individual, sole proprietorship, joint venture, association, trust, estate, business trust, corporation, limited liability company, nonprofit corporation, partnership, sovereign government or agency, instrumentality, or political subdivision thereof, or any similar entity or organization.

 

“Plan” means any plan, including single employer and multi-employer plans to which Section 4021(a) of ERISA applies, or any retirement medical plan, each as established or maintained for employees of Borrower or any member of the Controlled Group to which Section 4021(a) of ERISA applies.

 

“Plan Asset Regulations” means 29 C.F.R §2510.3-101, et seq.

 

“Plan Assets” means “plan assets” within the meaning of the Plan Asset Regulations.

 

“Pledgor” is defined in the first paragraph hereof.

 

“Portion of Loan” is defined in Section 2.4 hereof.

 

“Potential Default” means any condition, act, or event which, with the giving of notice or lapse of time or both, would become an Event of Default.

 

“Principal Obligation” means the sum of: (a) the aggregate outstanding principal amount of the Loans; plus (b) the Letter of Credit Liability.

 

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“Pro Rata Share” means, with respect to each Lender, the percentage obtained from the fraction:  (a) (i) the numerator of which is the Commitment of such Lender; and (ii) the denominator of which is the aggregate Commitments of all Lenders; or (b) in the event the Commitments are zero (0):  (i) the numerator of which is the Principal Obligation outstanding with respect to such Lender; and (ii) the denominator of which is the total Principal Obligation outstanding.

 

“Program Support Agreement” means and includes, with respect to any Conduit Lender, any agreement entered into by any Program Support Provider providing for the issuance of one or more letters of credit for the account of such Conduit Lender (or any related commercial paper issuer that finances such Conduit Lender), the issuance of one or more surety bonds for which such Conduit Lender (or such related issuer) is obligated to reimburse the applicable Program Support Provider for any drawings thereunder, the sale by such Conduit Lender (or such related issuer) to any Program Support Provider of its interests hereunder (or portions thereof or participations therein) or the making of loans or other extensions of credit to such Conduit Lender (or such related issuer) in connection with such Conduit Lender’s (or such related issuer’s) commercial paper program, together with any letter of credit, surety bond or other instrument issued thereunder.

 

“Program Support Provider” means and includes, with respect to any Conduit Lender, any Person now or hereafter extending credit or having a commitment to extend credit to or for the account of, or to make purchases from, such Conduit Lender (or any related commercial paper issuer that finances such Conduit Lender) or issuing a letter of credit, surety bond or other instrument to  support  any obligations arising under or in connection with such Conduit Lender’s (or such related issuer’s) commercial paper program.

 

“Prohibited Event” is defined in Section 4.7.

 

“Property” means any real property, improvements thereon and any leasehold or similar interest in real property which is owned, directly or indirectly, by any Borrower Party, or secures any investment of any Borrower Party.

 

“Qualified Borrower” means any entity, which entity may be organized in the United States or outside of the United States, in which Borrower owns a direct or indirect ownership interest or through which Borrower will acquire an investment, the indebtedness of which entity can be guaranteed by Borrower pursuant to the terms of the Operating Agreement, and which entity has executed a Qualified Borrower Note and in respect of which entity Borrower has executed a Borrower Guaranty.

 

“Qualified Borrower Letter of Credit Note” means a letter of credit note executed and delivered by a Qualified Borrower, in the form of Exhibit B-3 attached hereto, the payment of which is guaranteed by Borrower pursuant to a Borrower Guaranty, as such note may be amended, restated, reissued, extended or modified.

 

“Qualified Borrower Notes” means the Qualified Borrower Promissory Notes and the Qualified Borrower Letter of Credit Notes, and “Qualified Borrower Note” means any one of them, as such note may be amended, restated, reissued, extended or modified.

 

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“Qualified Borrower Promissory Note” means a promissory note executed and delivered by a Qualified Borrower, in the form of Exhibit B-2 attached hereto, the payment of which is guaranteed by Borrower pursuant to a Borrower Guaranty.

 

“Rate Type” means the LIBOR Rate, the Base Rate or the CP Rate.

 

“Rated Investor” means any Investor that has a Rating (or that has a Credit Provider, Sponsor, or Responsible Party that has a Rating).

 

“Rating” means, for any Person, its senior unsecured debt rating (or equivalent thereof, such as, but not limited to, a corporate credit rating, issuer rating/insurance financial strength rating (for an insurance company), general obligation rating (for a governmental entity), or revenue bond rating (for an educational institution)) from either of S&P or Moody’s.

 

“Register” is defined in Section 14.12(e) hereof.

 

“Regulation T,” “Regulation U,” and “Regulation X” means Regulation T, U, or X, as the case may be, of the Board of Governors of the Federal Reserve System, from time to time in effect, and shall include any successor or other regulation relating to reserve requirements or margin requirements, as the case may be, applicable to member banks of the Federal Reserve System.

 

“Related Commercial Paper” means, with respect to any Conduit Lender, at any time of determination, Commercial Paper of such Conduit Lender (or its related commercial paper issuer) the proceeds of which are then allocated by the Administrator of such Conduit Lender (or its related commercial paper issuer) as the source of funding the acquisition or maintenance of its Principal Obligation hereunder.

 

“Release” means any release, spill, emission, leaking, pumping, injection, deposit, disposal, discharge, dispersal, leaching, or migration of Hazardous Materials into the environment, or into or out of any Property, including the movement of any Hazardous Material through or in the air, soil, surface water, groundwater, of any Property.

 

“Request for Letter of Credit” means a request for the issuance of a Letter of Credit substantially in the form of Exhibit D-1 hereto.

 

“Required Lenders” means:  (a) Alternate Lenders (other than Defaulting Alternate Lenders) holding an aggregate of more than fifty (50%) of the aggregate Commitments of all Alternate Lenders (other than Defaulting Alternate Lenders); or (b) at any time that the Available Loan Amount is zero (0), Alternate Lenders (other than Defaulting Alternate Lenders) owed an aggregate of more than fifty (50%) of the Principal Obligation outstanding and payable to all Lenders (other than Defaulting Alternate Lenders) at such time (including, for purposes of such calculation, each Alternate Lender’s Alternate Lender Pro Rata Share of that portion of the Principal Obligations outstanding and payable to the Conduit Lender in its Lender Group).

 

“Responsible Officer” means: (a) in the case of a corporation, its president, senior vice president, any vice president or treasurer, and, in any case where two Responsible Officers are acting on behalf of such corporation, the second such Responsible Officer may be a secretary or assistant secretary; (b) in the case of a limited partnership, the Responsible Officer of the general partner, acting on behalf of such general partner in its capacity as general partner; and (c) in the case of a limited liability company, the chief executive officer, president, general counsel, chief financial officer, or senior vice president of the managing member, acting on behalf of such managing member in its capacity as managing member.

 

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“Responsible Party” means, for any Governmental Plan Investor:  (a) if the state under which the Governmental Plan Investor operates is obligated to fund the Governmental Plan Investor and is liable to fund any shortfalls, the state; and (b) otherwise, the Governmental Plan Investor itself.

 

“S&P” means Standard & Poor’s Rating Services, a division of the McGraw & Hill Companies, Inc. and any successor thereto.

 

“Secured Parties” means, collectively, the Lenders, Agents, Arranger, Letter of Credit Issuer, Program Support Providers, Conduit Collateral Agents and Indemnitees, and “Secured Party” means any of the foregoing.

 

“Settlement Date” means the 12th day of each month (or, if such day is not a Business Day, on the next succeeding Business Day); provided that after the Maturity Date, any Business Day selected from time to time by Administrative Agent shall be a Settlement Date.

 

“Solvent” means, with respect to any Person as of a particular date, that on such date:  (a) such Person is able to pay its debts and other liabilities, contingent obligations and other commitments as they mature in the normal course of business; (b) such Person does not intend to, and does not believe that it will, incur debts or liabilities beyond such Person’s ability to pay as such debts and liabilities mature in their ordinary course; (c) such Person is not engaged in a business or a transaction, and is not about to engage in a business or a transaction, for which such Person’s assets would constitute unreasonably small capital after giving due consideration to the prevailing practice in the industry in which such Person is engaged or is to engage; (d) the fair value of the assets of such Person is greater than the total amount of liabilities, including, without limitation, contingent liabilities, of such Person; and (e) the present fair saleable value of the assets of such Person is not less than the amount that will be required to pay the probable liability of such Person on its debts as they become absolute and matured.

 

“Sponsor” of an ERISA Investor means a sponsor as that term is understood under ERISA, specifically, the entity that established the plan and is responsible for the maintenance of the plan and, in the case of a plan that has a sponsor and participating employers, the entity that has the ability to amend or terminate the plan.

 

“Stockholder” means a holder of shares of the equity interests of Pledgor.

 

“Stockholders Agreement” means the Stockholders Agreement of Pledgor, dated as of May 15, 2007, as the same may be amended, restated, supplemented or otherwise modified from time to time with the consent of Administrative Agent, the Letter of Credit Issuer, and the Lenders to the extent expressly required hereby.

 

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“Stockholders Interest” means, with respect to any Stockholder, its equity interest in Pledgor.

 

“Stated Maturity Date” means October 10, 2011.

 

“Subsequent Investor” is defined in Section 11.5(c) hereof.

 

“Swap Contract” means: (a) any and all rate swap transactions, basis swaps, credit derivative transactions, forward rate transactions, commodity swaps, commodity options, forward commodity contracts, equity or equity index swaps or options, bond or bond price or bond index swaps or options or forward bond or forward bond price or forward bond index transactions, interest rate options, forward foreign exchange transactions, cap transactions, floor transactions, collar transactions, currency swap transactions, cross-currency rate swap transactions, currency options, spot contracts, or any other similar transactions or any combination of any of the foregoing (including any options to enter into any of the foregoing), whether or not any such transaction is governed by or subject to any master agreement; and (b) any and all transactions of any kind, and the related confirmations, which are subject to the terms and conditions of, or governed by, any form of master agreement published by the International Swaps and Derivatives Association, Inc., any International Foreign Exchange Master Agreement, or any other master agreement, including any such obligations or liabilities under any such master agreement.

 

“Swap Termination Value” means, in respect of any one or more Swap Contracts, after taking into account the effect of any legally enforceable netting agreement relating to such Swap Contracts: (a) for any date on or after the date such Swap Contracts have been closed out and termination value(s) determined in accordance therewith, such termination value(s); and (b) for any date prior to the date referenced in clause (a), the amount(s) determined as the mark-to-market value(s) for such Swap Contracts, as determined based upon one or more mid-market or other readily available quotations provided by any recognized dealer in such Swap Contracts (which may include a Lender or any Affiliate of a Lender).

 

“Synthetic Lease Obligation” means the monetary obligation of a Person under: (a) a so-called synthetic, off-balance sheet or tax retention lease; or (b) an agreement for the use or possession of property creating obligations that do not appear on the balance sheet of such Person but which, upon the insolvency or bankruptcy of such Person, would be characterized as the indebtedness of such Person (without regard to accounting treatment).

 

“Tax Indemnified Parties” means, collectively, the Letter of Credit Issuer, the Lenders, Agents, the Program Support Providers and Conduit Collateral Agents, and “Tax Indemnified Party” means any of the foregoing.

 

“Taxes” means all present or future taxes, levies, imposts, duties, deductions, withholdings, assessments, fees or other charges imposed by any Governmental Authority, including any interest, additions to tax or penalties applicable thereto.

 

“UCC” is defined in Section 8.1.

 

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“Unfunded Capital Commitment” means, with respect to any Investor at any time:  (a) such Investor’s Capital Commitment at such time, excluding (1) any Capital Commitment subject to a Pending Capital Call and (2) returns of Capital Contributions, unless a confirmation certificate in form and substance satisfactory to the Administrative Agent has been received by the Administrative Agent from a Credit Party, reporting the returned Capital Contributions and providing the amounts of the remaining unfunded Capital Commitments of the Investors; minus (b) such Investor’s aggregate Capital Contributions made prior to such time.

 

“Unreimbursed Amount” is defined in Section 2.5(c)(i) hereof.

 

“Used Fee” has the meaning provided in the Fee Letter.

 

“YC SUSI” means YC SUSI Trust, a Delaware Statutory Trust.

 

“YC SUSI Alternate Lenders” means the Alternate Lenders in the YC SUSI Lender Group, as set forth on the signature pages hereto or the applicable Assignment and Assumption Agreement.

 

“YC SUSI Lender Group” means YC SUSI, any permitted Conduit Assignee thereof, the YC SUSI Alternate Lenders from time to time party hereto and Bank of America, as Managing Agent.

 

“Yield” means, the sum of:

 

(a)           for any Portion of Loans for any Lender Group during any Interest Period to the extent a Conduit Lender funds such Portion of Loans through the issuance of Commercial Paper (directly or indirectly through a related commercial paper issuer);

 

	
CPR x L x

	 	
D

	  	 	
360

(b)           for any Portion of Loans funded by the Alternate Lenders and for any Portion of Loans for any Lender Group to the extent the related Conduit Lender does not fund such Portion of Loans through the issuance of Commercial Paper (directly or indirectly through a related commercial paper issuer);

 

	
AR/BR x L x

	 	
D

	  	 	
360

where:

 

AR/BR = the Alternate Rate or Base Rate, as applicable, for such Portion of Loans for such Interest Period;

 

CPR = the CP Rate for such Portion of Loans for such Interest Period (as determined by each applicable Administrator on or prior to the fifth Business Day of the calendar month next following such Interest Period);

 

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D = the actual number of days during such Interest Period, and

 

L = the amount of such Portion of Loans during such Interest Period;

 

provided that no provision of this Credit Agreement shall require the payment or permit the collection of Yield in excess of the Maximum Rate; and provided, further, that at all times during the existence of an Event of Default or after the Maturity Date, Yield for all Portions of Loans shall accrue at the Default Rate. Without limiting the obligation of any Borrower Party to pay interest pursuant to Section 3.3, Yield shall include interest pursuant to Section 3.3 on the Principal Obligation and all other Obligations not paid or deposited when due under this Credit Agreement or under the Notes.

 

1.2. Other Definitional Provisions.

 

(a) All terms defined in this Credit Agreement shall have the above-defined meanings when used in the Notes or any other Loan Documents or any certificate, report or other document made or delivered pursuant to this Credit Agreement, unless otherwise defined in such other document.

 

(b) Defined terms used in the singular shall import the plural and vice versa.

 

(c) The words “hereof,” “herein,” “hereunder,” and similar terms when used in this Credit Agreement shall refer to this Credit Agreement as a whole and not to any particular provisions of this Credit Agreement.

 

(d) The term “including” is by way of example and not limitation. The term “documents” includes any and all instruments, documents, agreements, certificates, notices, reports, financial statements and other writings, however evidenced, whether in physical or electronic form.

 

(e) In the computation of periods of time from a specified date to a later specified date, the word “from” means “from and including;” the words “to” and “until” each mean “to but excluding;” and the word “through” means “to and including.”

 

(f) Section headings herein and in the other Loan Documents are included for convenience of reference only and shall not affect the interpretation of this Credit Agreement or any other Loan Document.

 

(g) Unless otherwise specified in the Loan Documents, time references are to time in New York, New York.

 

1.3. Letter of Credit Amounts.  Unless otherwise specified, all references herein to the amount of a Letter of Credit at any time shall be deemed to mean the maximum face amount of such Letter of Credit after giving effect to all increases thereof contemplated by such Letter of Credit or the documents issued in connection therewith, but only to the extent such maximum face amount is in effect at such time.

 

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2. LOANS AND LETTERS OF CREDIT

 

2.1. The Commitment.

 

(a) Committed Amount.  Subject to the terms and conditions herein set forth, including Sections 8.1, 8.2 (if applicable) and 8.3, Lenders having Commitments agree severally, during the Availability Period:  (i) to extend to Borrower or any Qualified Borrower a revolving line of credit; and (ii) to participate in Letters of Credit issued by the Letter of Credit Issuer for the account of Borrower or any Qualified Borrower.

 

(b) Limitation on Borrowings.  Notwithstanding anything to the contrary herein contained, Lenders shall not be required to advance any Borrowing or cause the issuance of any Letter of Credit hereunder if:

 

(i) after giving effect to such Borrowing or issuance of such Letter of Credit:  (A) the Principal Obligation would exceed the Available Loan Amount; (B) the Letter of Credit Liability would exceed the Letter of Credit Sublimit; or (C) any Implicit Borrowing Base Deficit would exist; or

 

(ii) an Event of Default or a Potential Default exists.

 

(c) Exclusion Events.  If any of the following events (each, an “Exclusion Event”) shall occur with respect to any Designated Investor or any Included Investor or, if applicable, the Sponsor, Responsible Party, or Credit Provider of such Investor (such Investor hereinafter referred to as a “Defaulting Investor”):

 

(i) it shall:  (A) apply for or consent to the appointment of a receiver, trustee, custodian, intervenor, or liquidator of itself or of all or a substantial part of its assets; (B) file a voluntary petition as debtor in bankruptcy or admit in writing that it is unable to pay its debts as they become due; (C) make a general assignment for the benefit of creditors; (D) file a petition or answer seeking reorganization or an arrangement with creditors or take advantage of any Debtor Relief Laws; (E) file an answer admitting the material allegations of, or consent to, or default in answering, a petition filed against it in any bankruptcy, reorganization, or insolvency proceeding; or (F) take any personal, partnership, limited liability company, corporate or trust action, as applicable, for the purpose of effecting any of the foregoing;

 

(ii) an order, order for relief, judgment, or decree shall be entered by any court of competent jurisdiction or other competent authority approving a petition seeking such Person’s reorganization or appointing a receiver, custodian, trustee, intervenor, or liquidator of such Person or of all or substantially all of its assets, and such order, judgment, or decree shall continue unstayed and in effect for a period of sixty (60) days;

 

(iii) any final judgment(s) for the payment of money which in the aggregate exceed fifteen percent (15%) of its net worth shall be rendered against such Person, and such judgment or judgments shall not be satisfied or discharged at least ten (10) days prior to the date on which any of its assets could be lawfully sold to satisfy such judgment;

 

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(iv) such Investor shall repudiate, challenge, or declare unenforceable its obligation to make contributions to the capital of the applicable Credit Party pursuant to its Capital Commitment or a Call Notice; shall otherwise disaffirm any material provision of the Operating Agreement, the Stockholders Agreement or the Partnership Agreement, as applicable; or shall otherwise disaffirm any material provision of its Investor Letter; or a court of competent jurisdiction finds such Capital Commitment or the obligations under its Investor Letter unenforceable;

 

(v) such Investor shall fail to make a contribution to the capital of the applicable Credit Party when required pursuant to a Call Notice, subject to any applicable notice or cure periods, or shall otherwise be in material default under the Operating Agreement, the Stockholders Agreement, its Investor Letter or any Loan Document, following any applicable notice requirements or cure periods;

 

(vi) any representation or warranty made under its Investor Letter or any Loan Documents executed by such Person shall prove to be untrue or inaccurate in any material respect, as of the date on which such representation or warranty is made, and such Person shall fail to cure the adverse effect of the failure of such representation or warranty within thirty (30) days after written notice thereof is delivered by Administrative Agent to Borrower and to such Person;

 

(vii) such Investor shall transfer its Equity Interest in Borrower or Pledgor, as applicable, in violation of this Credit Agreement;

 

(viii) default shall occur in the performance by it of any of the covenants or agreements contained in its Investor Letter, the Operating Agreement, the Stockholders Agreement or the Partnership Agreement (except, in each case, as otherwise specifically addressed in this Section 2.1(c), in which case no grace period beyond any provided for herein shall apply) and such default shall continue uncured to the satisfaction of Administrative Agent for a period of thirty (30) days after written notice thereof has been given by Administrative Agent to Borrower and to such Investor;

 

(ix) in the case of each Included Investor that is a Rated Investor, it shall fail to maintain the Applicable Requirement for such Investor required in the definition of Applicable Requirement in Section 1 hereof;

 

(x) in the case of any Non-Rated Included Investor, such Investor shall fail to maintain a net worth (determined in accordance with Generally Accepted Accounting Principles), measured at the end of each fiscal year of such Person, of at least seventy-five percent (75%) of the initial net worth of such Investor, Sponsor, Responsible Party, or Credit Provider measured at the end of the fiscal year preceding the designation of such Investor as an Included Investor hereunder; or

 

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(xi) in the case of each Designated Investor and Non-Rated Included Investor, following the occurrence of an event which materially adversely affects the ability of such Investor to fulfill its obligations under the Operating Agreement or the Stockholders Agreement, as applicable, and the Required Lenders elect to declare the occurrence of an Exclusion Event with respect to such Investor,

 

then as of the Effective Removal Date for such Exclusion Event, such Investor shall no longer be a Designated Investor or an Included Investor, as applicable, and Administrative Agent and the Borrower Parties shall treat such Defaulting Investor’s Capital Commitment and Unfunded Capital Commitment as zero (0) for purposes of: (A) calculating the aggregate Unfunded Capital Commitment of the Designated Investors or Included Investors, as applicable, with respect to this Credit Agreement; (B) calculating the Available Loan Amount and Borrowing Base; and (C) calculating whether a mandatory prepayment is required to be made by Borrower pursuant to Section 2.1(d).

 

(d) Mandatory Prepayment.

 

(i) Excess Loans Outstanding.  If, on any day, the Principal Obligation exceeds the Available Loan Amount or if an Implicit Borrowing Base Deficit exists (including, without limitation, as a result of an Exclusion Event), then the Credit Parties shall pay on demand such excess or amount of Implicit Borrowing Base Deficit, as applicable, to Administrative Agent, for the benefit of Lenders, in immediately available funds (except to the extent any such excess is otherwise addressed by Section 2.1(d)(ii): (A) promptly on demand (but in no event later than one (1) Business Day), to the extent such funds are available in the Collateral Account or another account maintained by Borrower; and (B) within fifteen (15) Business Days of demand to the extent that it is necessary for a Credit Party to issue Call Notices to fund such required payment (and the Credit Parties shall issue such Call Notices during such time, and shall pay such excess or amount of Implicit Borrowing Base Deficit, as applicable, immediately after the Capital Contributions relating to such Call Notice are received); provided that the amount of such excess shall be paid to Administrative Agent concurrently with the creation of such excess or deficit if it results from any willful act of any Credit Party.  The Credit Parties hereby agree that Administrative Agent may withdraw from the Collateral Account any Capital Contributions deposited therein in respect of such Call Notices until the payment obligations required by this Section 2.1(d)(i) have been satisfied in full.

 

(ii) Excess Letters of Credit Outstanding.  If any excess or amount of Implicit Borrowing Base Deficit, as applicable, calculated pursuant to Section 2.1(d)(i) is attributable to undrawn Letters of Credit, the Credit Parties shall Cash Collateralize the Letter of Credit Liability in the amount of such excess or Implicit Borrowing Base Deficit, as applicable, when required pursuant to the terms of Section 2.1(d)(i), as security for such portion of the Obligations.  Unless otherwise required by law, upon:  (i) a change in circumstances such that the Principal Obligation no longer exceeds the Available Loan Amount; or (ii) the full and final payment of the Obligations, Administrative Agent shall return to the Credit Parties (or the applicable Qualified Borrower) any amounts remaining in said cash collateral account.

 

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(e) Loans in Dollars.  Each Loan made pursuant to this Credit Agreement shall be both funded and payable in Dollars.

 

2.2. Revolving Credit Commitment.  Subject to the terms and conditions herein set forth, each Alternate Lender severally agrees, on any Business Day during the Availability Period, to make Loans to Borrower or any Qualified Borrower at any time and from time to time in an aggregate principal amount up to such Lender’s Commitment at any such time; provided, however, that, after making such Loans:  (a) such Lender’s Pro Rata Share of the Principal Obligation would not exceed such Lender’s Commitment as of such date; and (b) the Principal Obligation of such Lender’s Lender Group would not exceed the aggregate Commitment of the Alternate Lenders in such Lender Group.  Subject to the foregoing limitation, the conditions set forth in Section 8 and the other terms and conditions hereof, Borrower or any Qualified Borrower may borrow, repay without penalty or premium, and re-borrow hereunder, during the Availability Period.  Each Borrowing pursuant to this Section 2.2 shall be funded ratably by each Lender Group in accordance with its Lender Group Percentage.  No Lender shall be obligated to fund any Loan if the interest rate applicable thereto under Section 2.11 hereof would exceed the Maximum Rate in effect with respect to such Loan.

 

2.3. Borrowing Procedures.

 

(a) Loan Notice.  The applicable Borrower Party may request a Loan hereunder by delivering to Administrative Agent, by electronic mail, facsimile or by telephone notice followed by the written confirmation via electronic mail or other evidence of writing, a Loan Notice, appropriately completed and signed by a Responsible Officer of such Borrower Party (and each Loan Notice submitted by a Qualified Borrower must be countersigned by a Responsible Officer of Borrower), no later than 11:00 a.m. at least two (2) Business Days prior to the proposed date of any Loan (including the initial Loan).  Each such Loan Notice shall specify:  (i) the desired amount of such Loan, which shall be (a) at least $500,000 at all times when there is only one Alternate Lender party hereto, and (b) at least $1,000,000 at all times when there are two or more Alternate Lenders party hereto; (ii) the desired date of such Loan (the “Loan Date”), which shall be a Business Day; and (iii) such other information as is required by the form of such Loan Notice. Each Loan Notice submitted by such Borrower Party shall be deemed to constitute a representation and warranty by the applicable Borrower Party that: (i) the representations and warranties set forth in Section 9 hereof are true and correct in all material respects on and as of the date of such Loan Notice, with the same force and effect as if made on and as of such date (except to the extent of changes in facts or circumstances that have been disclosed to the Administrative Agent and do not constitute an Event of Default or a Potential Default under this Credit Agreement or any other Loan Document); (ii) no Event of Default or, to its knowledge, Potential Default exists and is continuing at such date; (iii) the conditions specified in Sections 8.1, 8.2 (if applicable) and 8.3, have been or will be satisfied as of the Loan Date; and (iv) after giving effect to such Borrowing, the Principal Obligation will not exceed the Available Loan Amount as of such date. No Loan Notice shall be valid hereunder for any purpose unless it shall have been accompanied or preceded by the information and other documents required to be delivered in accordance with this Section 2.3.  All Loans hereunder shall be made by each Lender Group on a pro rata basis based on the Lender Group Percentage of each Lender Group.

 

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(b) Further Information.  Each Loan Notice shall be accompanied or preceded by: (A) a Borrowing Base Certificate dated the date of such Loan Notice; and (B) such documents as are required to satisfy any applicable conditions precedent as provided in Section 8.2.

 

(c) Notification of Conduit Lender.  Administrative Agent will promptly notify each Managing Agent of Administrative Agent’s receipt of any Loan Notice, and each Managing Agent will promptly notify each of the Lenders in its Lender Group.  If the Loan Notice is received prior to the Conduit Investment Termination Date for a Conduit Lender, such Conduit Lender (or its Administrator on its behalf) shall instruct Administrative Agent to accept or reject such Loan Notice by notice given to Administrative Agent and the applicable Borrower Party by telephone or facsimile by no later than the close of its business on the later of the Business Day of its receipt of any such Loan Notice or the Business Day prior to the applicable Loan Date.

 

(d) Loan Notice Irrevocable. Each Loan Notice shall be irrevocable and binding on such Borrower and any applicable Qualified Borrower, and Borrower (and, if applicable, the Qualified Borrower) shall indemnify Lenders against any cost, loss, or expense incurred by Lenders, or any of them, as a result of any failure to fulfill, on or before the date specified in the Loan Notice, the conditions to such Borrowing set forth herein, including, without limitation, any cost, loss, or expense incurred by reason of the liquidation or redeployment of the deposits or other funds acquired by Lenders, or any of them, to fund the Borrowing to be made by Lenders as a part of such Borrowing when such Borrowing, as a result of such failure, is not made on such date (including, in the case of a Conduit Lender, pursuant to a Program Support Agreement), except with respect to a Borrowing for a Loan at the Base Rate, as to which Borrower shall not be required to indemnify Lenders against such costs, losses or expenses incurred by Lenders as a result of such liquidation or redeployment of funds.  A certificate of Administrative Agent setting forth the amount of any such cost, loss or expense, and the basis for the determination thereof and the calculation thereof, shall be delivered to Borrower and the applicable Qualified Borrower and shall, in the absence of a manifest error, be conclusive and binding

 

(e) Alternate Lender’s Commitment.  At no time will any Conduit Lender have any obligation to fund a Loan or participate in any Letter of Credit.  At all times on and after the Conduit Investment Termination Date for a Conduit Lender or if a Conduit Lender has failed for whatever reason to fund its portion of a Borrowing in full, all Loans and participations in Letters of Credit shall be made by the Alternate Lenders of the related Lender Group.  At any time when a Conduit Lender has rejected a request for Loan (it being understood that if a Conduit Lender does not fund any Loan in relation to which all of the conditions precedent set forth in Section 8.2 (if applicable) and Section 8.3 have been satisfied on the date set forth in the applicable Loan Notice, such Conduit Lender shall be deemed to have rejected the request for Loan), the related Managing Agent shall so notify the related Alternate Lenders and such Alternate Lenders shall make such Loan, on a pro rata basis, in accordance with their respective Alternate Lender Pro Rata Shares.  Notwithstanding anything contained in this Section 2.3(e) or elsewhere in this Credit Agreement to the contrary, no Alternate Lender shall be obligated to provide Administrative Agent or any Borrower Party with funds in connection with a Loan in an amount that would result in the sum of the portion of the Loans then funded by it plus such Alternate Lender’s Alternate Lender Pro Rata Share of the applicable Lender Group Percentage of the Letter of Credit Liability exceeding its Commitment then in effect (minus the unrecovered principal amount of such Alternate Lender’s investments in the Principal Obligation pursuant to the Program Support Agreement to which it is a party).  The obligation of each Alternate Lender to remit its Alternate Lender Pro Rata Share of any such Loan requested of its Lender Group shall be several from that of each other Alternate Lender, and the failure of any Alternate Lender to so make such amount available to Administrative Agent shall not relieve any other Alternate Lender of its obligation hereunder.

 

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(f) Payment of Loan. On any Loan Date, each Conduit Lender or each Alternate Lender, as the case may be, shall remit its share of the aggregate amount of such Loan to Administrative Agent, by wire transfer of immediately available funds to Administrative Agent for the account of the appropriate Borrower Party no later than 12:00 noon.  Administrative Agent shall in turn forward the same in immediately available funds to the appropriate Borrower Party’s account at Administrative Agent specified in the Loan Notice, or, if requested by the applicable Borrower Party in the Loan Notice, wire transfer such funds as requested.

 

(g) Managing Agents May Advance Funds.  Unless a Managing Agent shall have received notice from any Lender in its Lender Group that such Person will not make its share of any Loan available on the applicable Loan Date therefor (for purposes of this paragraph only, the “Loan Amount”), such Managing Agent may (but shall have no obligation to) make any such Lender’s share of any such Loan available to the applicable Borrower Party in anticipation of the receipt by such Managing Agent of such Loan Amount from the applicable Lender.  To the extent any such Lender fails to remit such Loan Amount to such Managing Agent after any such advance by such Managing Agent on such Loan Date, such Lender shall be required to pay such Loan Amount for its own account, together with interest thereon at a per annum rate equal to the Federal Funds Rate to such Managing Agent upon its demand therefor.  If such Lender does not pay such Loan Amount together with such interest, such Managing Agent will promptly notify the Borrower, and Borrower shall immediately pay such Loan Amount to Administrative Agent (for distribution to the applicable Managing Agent), together with interest thereon from the applicable Loan Date through the date such Loan Amount is repaid to Administrative Agent promptly on demand, to the extent such funds are available in the Collateral Account; and otherwise, to the extent that it is necessary for Borrower to issue Call Notices to fund such required payment, within fifteen (15) Business Days after Administrative Agent’s demand (but, in any event, the Credit Parties shall issue such Call Notices and shall make such payment promptly after the related Capital Contributions are received); or (ii) from any Qualified Borrower (as applicable), promptly on demand; in each case, together with interest at a rate per annum equal to the rate applicable to the requested Borrowing for the period commencing on the borrowing date and ending on (but excluding) the date Administrative Agent recovers the amount from Borrower.  Until such amount shall be repaid, such amount shall be deemed to be a Loan funded by the applicable Managing Agent and such Managing Agent shall be deemed to be the owner of such Loan.  Upon the payment of such amount to Administrative Agent by such Lender, such payment shall constitute such Person’s payment of its share of the applicable Loan.

 

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(h) Defaulting Alternate Lender.  If, by 2:00 p.m. on any Loan Date or Assignment Date, as applicable, whether or not any Managing Agent has advanced the amount of the applicable Loan or paid the applicable Assignment Amount, one or more Alternate Lenders in a Lender Group (each, a “Defaulting Alternate Lender”, and each Alternate Lender other than any Defaulting Alternate Lender being referred to as a “Non-Defaulting Alternate Lender”) fails to make its share of any Loan available to Administrative Agent pursuant to Section 2.3(f) or any Assignment Amount payable by it pursuant to Section 7.1 (the aggregate amount not so made available to Administrative Agent being herein called in either case the “Loan Deficit”), then such Alternate Lender’s Managing Agent shall, by no later than 2:30 p.m. on the applicable Loan Date or the applicable Assignment Date, as the case may be, instruct each Non-Defaulting Alternate Lender in such Lender Group to pay, by no later than 3:00 p.m. on such date, in immediately available funds, to the account designated by Administrative Agent, an amount equal to the lesser of: (i) such Non-Defaulting Alternate Lender’s proportionate share (based upon the relative Commitments of the Non-Defaulting Alternate Lenders) of the Loan Deficit with respect to such Lender Group; and (ii) its unused Commitment.  A Defaulting Alternate Lender shall forthwith, upon demand, pay to its related Managing Agent for the ratable benefit of the Non-Defaulting Alternate Lenders all amounts paid by each Non-Defaulting Alternate Lender on behalf of such Defaulting Alternate Lender, together with interest thereon, for each day from the date a payment was made by a Non-Defaulting Alternate Lender until the date such Non Defaulting Alternate Lender has been paid such amounts in full, at a rate per annum equal to the Default Rate.  In addition, if, after giving effect to the provisions of the immediately preceding sentence, any Loan Deficit with respect to any Assignment Amount continues to exist, each such Defaulting Alternate Lender shall pay interest to the related Managing Agent, for the account of the related Conduit Lender, on such Defaulting Alternate Lender’s portion of such remaining Loan Deficit, at a rate per annum, equal to the Default Rate, for each day from the applicable Assignment Date until the date such Defaulting Alternate Lender shall pay its portion of such remaining Loan Deficit in full to such Conduit Lender.

 

(i) Intent to Fund.  Subject to Section 2.4, each Conduit Lender confirms with Borrower that it intends to fund all Loans hereunder through the issuance of its Commercial Paper to the extent reasonably available prior to the occurrence of an Event of Default or Potential Default.

 

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2.4. Determination of Yield and Interest Periods.  For purposes of determining the Interest Period applicable to each Loan and of calculating Yield with respect thereto, each applicable Managing Agent shall allocate the Loans of the Lenders in its Lender Group to tranches (each a “Portion of Loan”).  Any Portion of Loan funded by a Conduit Lender may from time to time be funded through the issuance of Commercial Paper or pursuant to a Program Support Agreement, in the sole discretion of such Conduit Lender.  Any Portion of Loan funded by the Alternate Lenders or the applicable Program Support Providers shall accrue Yield at the Alternate Rate or Base Rate, as selected by the Borrower.  Any Portion of Loan funded by the Conduit Lenders through the issuance of Commercial Paper shall accrue Yield at the applicable CP Rate.  At any time, each Portion of Loan shall have only one Interest Period and one Rate Type.  The aggregate Portions of Loans of each Lender Group at all times shall be equal to the Loans of such Lender Group, and at any time when the Loans are not divided into two or more portions, the term “Portion of Loans” shall mean 100% of the Loans of such Lender Group.

 

2.5. Letters of Credit.

 

(a) Letter of Credit Commitment.

 

(i) Subject to the terms and conditions hereof, on any Business Day during the Availability Period: (A) the Letter of Credit Issuer agrees, in reliance upon the agreements of the Lenders set forth in this Section 2.5: (1) from time to time on any Business Day during the period from the Closing Date until the Letter of Credit Expiration Date, to issue Letters of Credit denominated in Dollars for the account of a Borrower Party, in aggregate face amounts that shall be not less than $500,000 (provided, however, three (3) Letters of Credit for amounts less than $500,000 may be issued each calendar year), as a Borrower Party may request, and to amend or extend Letters of Credit previously issued by it; and (2) to honor drawings under the Letters of Credit; and (B) the Alternate Lenders severally agree to participate in Letters of Credit issued for the account of a Borrower Party and any drawings thereunder; provided that after giving effect to an issuance of a Letter of Credit; (1) the Principal Obligation will not exceed the Available Loan Amount on such date; (2) no Implicit Borrowing Base Deficit shall exist and (3) the Letter of Credit Liability will not exceed the Letter of Credit Sublimit.  Within the foregoing limits, and subject to the terms and conditions hereof, a Borrower Party’s ability to obtain Letters of Credit shall be fully revolving, and accordingly a Borrower Party may, during the foregoing period, obtain Letters of Credit to replace Letters of Credit that have expired or that have been drawn upon and reimbursed.  The Letter of Credit Issuer shall have the right to approve the form of Letter of Credit requested.

 

(ii) The Letter of Credit Issuer shall not issue or extend any Letter of Credit, if: (A) subject to Section 2.5(b)(iii), the expiration date of such Letter of Credit would occur more than twelve (12) months after the date of issuance or last extension, unless the Letter of Credit Issuer has approved such expiry date in its sole discretion; or (B) the expiration date of such Letter of Credit would occur after the date fifteen (15) Business Days prior to the Stated Maturity Date, unless the Borrower or applicable Qualified Borrower shall Cash Collateralize the then-outstanding Letter of Credit Liability in respect of such Letter of Credit fifteen (15) Business Days prior to the then-applicable Stated Maturity Date, and such Letter of Credit has an expiration date that is not later than twelve (12) months following the Stated Maturity Date.

 

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(iii) The Letter of Credit Issuer shall be under no obligation to issue any Letter of Credit if: (A) any order, judgment or decree of any Governmental Authority or arbitrator shall by its terms purport to enjoin or restrain the Letter of Credit Issuer from issuing such Letter of Credit, or any Law applicable to the Letter of Credit Issuer or any request or directive (whether or not having the force of law) from any Governmental Authority with jurisdiction over the Letter of Credit Issuer shall prohibit, or request that the Letter of Credit Issuer refrain from, the issuance of letters of credit generally or such Letter of Credit in particular or shall impose upon the Letter of Credit Issuer with respect to such Letter of Credit any restriction, reserve or capital requirement (for which the Letter of Credit Issuer is not otherwise compensated hereunder) not in effect on the Closing Date, or shall impose upon the Letter of Credit Issuer any unreimbursed loss, cost or expense which was not applicable on the Closing Date and which the Letter of Credit Issuer in good faith deems material to it; (B) the issuance of such Letter of Credit would violate any Laws or one or more policies of the Letter of Credit Issuer; (C) such Letter of Credit is to be denominated in a currency other than Dollars; (D) such Letter of Credit contains any provisions for automatic reinstatement of the stated amount after any drawing thereunder; or (E) a default of any Lender’s obligations to fund hereunder exists or any Lender is at such time a Defaulting Alternate Lender hereunder, unless the Letter of Credit Issuer has entered into satisfactory arrangements with the Borrower Parties or such Lender to eliminate the Letter of Credit Issuer’s risk with respect to such Lender.

 

(iv) The Letter of Credit Issuer shall be under no obligation to amend any Letter of Credit if: (A) the Letter of Credit Issuer would have no obligation at such time to issue such Letter of Credit in its amended form under the terms hereof; or (B) the beneficiary of such Letter of Credit does not accept the proposed amendment to such Letter of Credit.

 

(b) Procedures for Issuance and Amendment of Letters of Credit; Auto-Extension Letters of Credit.

 

(i) Each Letter of Credit shall be issued or amended, as the case may be, upon the request of a Borrower Party delivered to the Letter of Credit Issuer (with a copy to Administrative Agent) in the form of a Request for Letter of Credit and an Application and Agreement for Letter of Credit, together with a Borrowing Base Certificate, each appropriately completed and signed by a Responsible Officer of such Borrower Party.  Such Request for Letter of Credit must be received by the Letter of Credit Issuer and Administrative Agent not later than 11:00 a.m. at least two (2) Business Days prior to the proposed issuance date or date of amendment, as the case may be, of any Letter of Credit (or such later date and time as Administrative Agent and the Letter of Credit Issuer may agree in a particular instance in their sole discretion).  In the case of a request for an initial issuance of a Letter of Credit, such Request for Letter of Credit shall specify in form and detail satisfactory to the Letter of Credit Issuer: (A) the proposed issuance date of the requested Letter of Credit (which shall be a Business Day); (B) the amount thereof; (C) the expiry date thereof; (D) the name and address of the beneficiary thereof; (E) the documents to be presented by such beneficiary in case of any drawing thereunder; (F) the full text of any certificate to be presented by such beneficiary in case of any drawing thereunder; and (G) such other matters as the Letter of Credit Issuer may reasonably require.  In the case of a request for an amendment of any outstanding Letter of Credit, the related Request for Letter of Credit shall specify in form and detail satisfactory to the Letter of Credit Issuer: (1) the Letter of Credit to be amended; (2) the proposed date of amendment thereof (which shall be a Business Day); (3) the nature of the proposed amendment; and (4) such other matters as the Letter of Credit Issuer may reasonably require.  Additionally, the applicable Borrower Party shall furnish to the Letter of Credit Issuer and Administrative Agent such other documents and information pertaining to such requested Letter of Credit issuance or amendment, including any Issuer Documents, as the Letter of Credit Issuer or Administrative Agent may reasonably require.

 

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(ii) Promptly after receipt of any Request for Letter of Credit, the Letter of Credit Issuer will confirm with Administrative Agent (by telephone or in writing) that Administrative Agent has received a copy of such Request for Letter of Credit from a Borrower Party and, if not, the Letter of Credit Issuer will provide Administrative Agent with a copy thereof.  The Letter of Credit Issuer shall also promptly notify each Managing Agent (which in turn shall promptly notify each Lender in its Lender Group) of the Request for Letter of Credit and the terms thereof.  Unless the Letter of Credit Issuer has received written notice from any Lender, Administrative Agent or any Borrower Party, at least one (1) Business Day prior to the requested date of issuance or amendment of the applicable Letter of Credit, that one or more applicable conditions contained in Section 8 shall not then be satisfied, then, subject to the terms and conditions hereof, the Letter of Credit Issuer shall, on the requested date, issue a Letter of Credit for the account of such Borrower Party or enter into the applicable amendment, as the case may be, in each case in accordance with the Letter of Credit Issuer’s usual and customary business practices.

 

(iii) If a Borrower Party so requests in any applicable Request for Letter of Credit, the Letter of Credit Issuer may, in its sole and absolute discretion, agree to issue a Letter of Credit that has automatic extension provisions (each, an “Auto-Extension Letter of Credit”); provided that any such Auto-Extension Letter of Credit must permit the Letter of Credit Issuer to prevent any such extension at least once in each twelve-month period (commencing with the date of issuance of such Letter of Credit) by giving prior notice to the beneficiary thereof not later than a Business Day (the “Non-Extension Notice Date”) in each such twelve-month period to be agreed upon at the time such Letter of Credit is issued.  Unless otherwise directed by the Letter of Credit Issuer, a Borrower Party shall not be required to make a specific request to the Letter of Credit Issuer for any such extension.  Once an Auto-Extension Letter of Credit has been issued, the Lenders shall be deemed to have authorized (but may not require) the Letter of Credit Issuer to permit the extension of such Letter of Credit at any time to an expiry date not later than the Letter of Credit Expiration Date; provided, however, that the Letter of Credit Issuer shall not permit any such extension if: (A) the Letter of Credit Issuer has determined that it would not be permitted, or would have no obligation, at such time to issue such Letter of Credit in its revised form (as extended) under the terms hereof (by reason of the provisions of clause (ii) or (iii) of Section 2.5(a) or otherwise); or (B) it has received notice (which may be by telephone or in writing) on or before the day that is five Business Days before the Non-Extension Notice Date: (1) from Administrative Agent that the Required Lenders have elected not to permit such extension; or (2) from Administrative Agent, any Lender or any Borrower Party that one or more of the applicable conditions specified in Section 8.2 and, if applicable, Section 8.3, is not then satisfied, and in each such case directing the Letter of Credit Issuer not to permit such extension.

 

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(iv) Promptly after its delivery of any Letter of Credit or any amendment to a Letter of Credit to an advising bank with respect thereto or to the beneficiary thereof, the Letter of Credit Issuer will also deliver to the applicable Borrower Party and Administrative Agent and each Managing Agent a true and complete copy of such Letter of Credit or amendment.

 

(v) Whenever the Letter of Credit Issuer issues a Letter of Credit, each Alternate Lender shall, automatically and without further action of any kind upon the effective date of issuance of such Letter of Credit, have irrevocably (i) agreed to acquire a participation interest therein in an amount equal to its Alternate Lender Pro Rata Share of its Lender Group Percentage of the Letter of Credit Liability attributable to such Letter of Credit and (ii) committed to make a Loan hereunder equal to its Alternate Lender Pro Rata Share of its Lender Group Percentage of the applicable reimbursement amount in the event that such Letter of Credit is subsequently drawn and such drawn amount shall not have been reimbursed by a Borrower Party upon such draw or a Loan with respect to such unreimbursed draw is not made by such Alternate Lender’s related Conduit Lender.  In the event that any Letter of Credit expires or is surrendered to the Letter of Credit Issuer without being drawn (in whole or in part) then, in such event, the foregoing commitment to make Loans with respect to draws under such Letter of Credit shall expire with respect to such Letter of Credit and the Letter of Credit Liability shall automatically reduce by the amount of the Letter of Credit which is no longer outstanding.  Each Lender shall share in all rights and obligations resulting therefrom, in accordance with such participation interest, including, without limitation: (i) the right to receive from Administrative Agent its share of any reimbursement of the amount of each draft drawn under each Letter of Credit, including any interest payable with respect thereto; (ii) the right to receive from the Letter of Credit Issuer its share of the Letter of Credit Fees pursuant to Section 2.10 hereof; (iii) the right to receive from the Letter of Credit Issuer its additional costs pursuant to Section 4 hereof; and (iv) the obligation to reimburse Administrative Agent in the form of a Loan to the applicable Borrower Party hereunder upon receipt of notice of any payment by the Letter of Credit Issuer.

 

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(c) Drawings and Reimbursements; Funding of Participation.

 

(i) Upon receipt from the beneficiary of any Letter of Credit of any notice of a drawing under such Letter of Credit, the Letter of Credit Issuer shall notify the applicable Borrower Party and Administrative Agent thereof.  Not later than 11:00 a.m. on the date of any payment by the Letter of Credit Issuer under a Letter of Credit (each such date, an “Honor Date”), the applicable Borrower Party shall reimburse the Letter of Credit Issuer through the Administrative Agent in an amount equal to the amount of such drawing.  If a Borrower Party fails to so reimburse the Letter of Credit Issuer by such time, the Administrative Agent shall promptly notify each Managing Agent of the Honor Date, the amount of the unreimbursed drawing (the “Unreimbursed Amount”), and the amount of such Lender Group’s Lender Group Percentage thereof.  Each such notice by the Letter of Credit Issuer shall be treated as a Loan Notice by the applicable Borrower Party.  In such event, the applicable Borrower Party shall be deemed to have requested a Borrowing to be disbursed on the Honor Date in an amount equal to the Unreimbursed Amount, without regard to the minimum and multiples specified in Section 2.3, but subject to the amount of the unutilized portion of the Available Loan Amount and the conditions set forth in Section 8.2, if applicable, and Section 8.3 (other than the delivery of a Loan Notice).  Any notice given by the Letter of Credit Issuer or Administrative Agent pursuant to this Section 2.5(c)(i) may be given by telephone if immediately confirmed in writing; provided that the lack of such an immediate confirmation shall not affect the conclusiveness or binding effect of such notice.

 

(ii) If the Letter of Credit Issuer so notifies a Managing Agent prior to 11:00 a.m. on any Business Day, such Managing Agent’s related Lender Group shall make available to Administrative Agent, for the account of the Letter of Credit Issuer, its Lender Group Percentage of the Unreimbursed Amount by 4:30 p.m. on such Business Day (or a subsequent day specified by Administrative Agent) in immediately available funds.  If the Letter of Credit Issuer so notifies a Managing Agent after 11:00 a.m. on any Business Day, such Managing Agent’s related Lender Group shall make available to Administrative Agent for the account of the Letter of Credit Issuer its Lender Group Percentage of the Unreimbursed Amount by 12:00 noon on the next Business Day (or a subsequent day specified by Administrative Agent) in immediately available funds.  If any amounts have been deposited into a segregated interest-bearing cash collateral account for the purpose of Cash Collateralizing the Letter of Credit Liability, the Letter of Credit Issuer shall use such funds to satisfy any drawings under the Letters of Credit prior to notifying the Managing Agents of the need for a Loan with respect thereto.  Lenders may conclusively rely on the Letter of Credit Issuer as to the amount due Administrative Agent by reason of any draft of a Letter of Credit or due the Letter of Credit Issuer under any Application and Agreement for Letter of Credit.  If any payment received by Administrative Agent pursuant to this Section 2.5(c) is required to be returned under any of the circumstances described in Section 14.4, each Alternate Lender shall pay to Administrative Agent for the account of the Letter of Credit Issuer its Alternate Lender Pro Rata Share of the related Lender Group Percentage thereof on demand of Administrative Agent, plus interest thereon from the date of such demand to the date such amount is returned by such Lender, at a rate per annum equal to the Federal Funds Rate from time to time in effect.

 

Revolving Credit Agreement

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(iii) With respect to any Unreimbursed Amount that is not fully refinanced by a Borrowing because the conditions set forth in Section 8.2, if applicable, and Section 8.3, cannot be satisfied or for any other reason, the applicable Borrower Party shall be deemed to have incurred from the Letter of Credit Issuer an L/C Borrowing in the amount of the Unreimbursed Amount that is not so refinanced, which L/C Borrowing shall be due and payable on demand (together with interest) and shall bear interest at the Default Rate.  In such event, each Lender Group’s payment to Administrative Agent for the account of the Letter of Credit Issuer pursuant to Section 2.5(c)(i) shall be deemed payment in respect of its participation in such L/C Borrowing and shall constitute an L/C Advance from the applicable Lenders in such Lender Group in satisfaction of its participation obligation under this Section 2.5.

 

(iv) Until each applicable Lender in each Lender Group funds its Loan or L/C Advance pursuant to this Section 2.5(c) to reimburse the Letter of Credit Issuer for any amount drawn under any Letter of Credit, interest in respect of such Lender Group’s Lender Group Percentage of such amount shall be solely for the account of the Letter of Credit Issuer.

 

(v) Each Alternate Lender’s obligation to make Loans or L/C Advances to reimburse the Letter of Credit Issuer for amounts drawn under Letters of Credit, as contemplated by this Section 2.5(c), shall be absolute and unconditional and shall not be affected by any circumstance, including: (A) any set-off, counterclaim, recoupment, defense or other right which such Lender may have against the Letter of Credit Issuer, any Credit Party, or any other Person for any reason whatsoever; (B) the occurrence or continuance of a Potential Default or Event of Default; or (C) any other occurrence, event or condition, whether or not similar to any of the foregoing; provided, however, that each Alternate Lender’s obligation to make Loans pursuant to this Section 2.5(c) is subject to the conditions set forth in Section 8.2, if applicable, and Section 8.3 (other than delivery of a Loan Notice).  No such making of an L/C Advance shall relieve or otherwise impair the obligations of any Credit Party to reimburse the Letter of Credit Issuer for the amount of any payment made by the Letter of Credit Issuer under any Letter of Credit, together with interest as provided herein.

 

(vi) If any Alternate Lender fails to make available to Administrative Agent for the account of the Letter of Credit Issuer any amount required to be paid by such Lender pursuant to the foregoing provisions of this Section 2.5(c) by the time specified in Section 2.5(c)(ii), the Letter of Credit Issuer shall be entitled to recover from such Alternate Lender (acting through Administrative Agent), on demand, such amount with interest thereon for the period from the date such payment is required to the date on which such payment is immediately available to the Letter of Credit Issuer at a rate per annum equal to the Federal Funds Rate from time to time in effect.  A certificate of the Letter of Credit Issuer submitted to any Alternate Lender (through Administrative Agent) with respect to any amounts owing under this clause (vi) shall be conclusive absent manifest error.

 

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(d) Repayment of Participations.

 

(i) At any time after the Letter of Credit Issuer has made a payment under any Letter of Credit and has received from any Lender such Lender’s L/C Advance in respect of such payment in accordance with Section 2.5(c), if Administrative Agent receives for the account of the Letter of Credit Issuer any payment in respect of the related Unreimbursed Amount or interest thereon (whether directly from Borrower or otherwise, including proceeds of cash collateral applied thereto by Administrative Agent), Administrative Agent will distribute to such Lender its Pro Rata Share thereof (appropriately adjusted, in the case of interest payments, to reflect the period of time during which such Lender’s L/C Advance was outstanding) in the same funds as those received by Administrative Agent.

 

(ii) If any payment received by Administrative Agent for the account of the Letter of Credit Issuer pursuant to Section 2.5(c)(i) is required to be returned under any of the circumstances described in Section 14.4 (including pursuant to any settlement entered into by the Letter of Credit Issuer in its discretion), each Alternate Lender shall, and each Conduit Lender may (and if a Conduit Lender does not, the Alternate Lenders in its Lender Group shall), pay to Administrative Agent for the account of the Letter of Credit Issuer its Pro Rata Share thereof on demand of Administrative Agent, plus interest thereon from the date of such demand to the date such amount is returned by such Lender, at a rate per annum equal to the Federal Funds Rate from time to time in effect.

 

(e) Obligations Absolute.  The obligations of the applicable Borrower Party to reimburse the Letter of Credit Issuer for each drawing under each Letter of Credit and to repay each L/C Borrowing shall be absolute, unconditional and irrevocable, and shall be paid strictly in accordance with the terms of this Credit Agreement under all circumstances, including the following:

 

(i) any lack of validity or enforceability of such Letter of Credit, this Credit Agreement, or any other Loan Document;

 

(ii) the existence of any claim, counterclaim, set-off, defense or other right that any Borrower Party may have at any time against any beneficiary or any transferee of such Letter of Credit (or any Person for whom any such beneficiary or any such transferee may be acting), the Letter of Credit Issuer or any other Person, whether in connection with this Credit Agreement, the transactions contemplated hereby or by such Letter of Credit or any agreement or instrument relating thereto, or any unrelated transaction;

 

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(iii) any draft, demand, certificate or other document presented under such Letter of Credit proving to be forged, fraudulent, invalid or insufficient in any respect or any statement therein being untrue or inaccurate in any respect; or any loss or delay in the transmission or otherwise of any document required in order to make a drawing under such Letter of Credit;

 

(iv) any payment by the Letter of Credit Issuer under such Letter of Credit against presentation of a draft or certificate that does not strictly comply with the terms of such Letter of Credit; or any payment made by the Letter of Credit Issuer under such Letter of Credit to any Person purporting to be a trustee in bankruptcy, debtor-in-possession, assignee for the benefit of creditors, liquidator, receiver or other representative of or successor to any beneficiary or any transferee of such Letter of Credit, including any arising in connection with any proceeding under any Debtor Relief Law; or

 

(v) any other circumstance or happening whatsoever, whether or not similar to any of the foregoing, including any other circumstance that might otherwise constitute a defense available to, or a discharge of, any Borrower Party.

 

The applicable Borrower Party shall promptly examine a copy of each Letter of Credit and each amendment thereto that is delivered to it and, in the event of any claim of noncompliance with such Borrower Party’s instructions or other irregularity, such Borrower Party will immediately notify the Letter of Credit Issuer.  The applicable Borrower Party shall be conclusively deemed to have waived any such claim against the Letter of Credit Issuer and its correspondents unless such notice is given as aforesaid.

 

(f) Role of Letter of Credit Issuer.  Each Lender and each Borrower Party agree that, in paying any drawing under a Letter of Credit, the Letter of Credit Issuer shall not have any responsibility to obtain any document (other than any sight draft, certificates and documents expressly required by the Letter of Credit) or to ascertain or inquire as to the validity or accuracy of any such document or the authority of the Person executing or delivering any such document.  None of the Letter of Credit Issuer, any Agent-Related Person nor any of the respective correspondents, participants or assignees of the Letter of Credit Issuer shall be liable to any Lender for: (i) any action taken or omitted in connection herewith at the request or with the approval of the Lenders or the Required Lenders, as applicable; (ii) any action taken or omitted in the absence of gross negligence or willful misconduct; or (iii) the due execution, effectiveness, validity or enforceability of any document or instrument related to any Letter of Credit or related Request for Letter of Credit.  Each Borrower Party hereby assumes all risks of the acts or omissions of any beneficiary or transferee with respect to its use of any Letter of Credit; provided, however, that this assumption is not intended to, and shall not, preclude any Borrower Party’s pursuing such rights and remedies as it may have against the beneficiary or transferee at law or under any other agreement.  None of the Letter of Credit Issuer, any Agent-Related Person, nor any of the respective correspondents, participants or assignees of the Letter of Credit Issuer, shall be liable or responsible for any of the matters described in clauses (i) through (v) of Section 2.5(e); provided, however, that anything in such clauses to the contrary notwithstanding, a Borrower Party may have a claim against the Letter of Credit Issuer, and the Letter of Credit Issuer may be liable to such Borrower Party, to the extent, but only to the extent, of any direct, as opposed to consequential or exemplary, damages suffered by such Borrower Party which such Borrower Party proves were caused by the Letter of Credit Issuer’s willful misconduct or gross negligence or the Letter of Credit Issuer’s willful failure to pay under any Letter of Credit after the presentation to it by the beneficiary of a sight draft and certificate(s) strictly complying with the terms and conditions of a Letter of Credit.  In furtherance and not in limitation of the foregoing, the Letter of Credit Issuer may accept documents that appear on their face to be in order, without responsibility for further investigation, regardless of any notice or information to the contrary, and the Letter of Credit Issuer shall not be responsible for the validity or sufficiency of any instrument transferring or assigning or purporting to transfer or assign a Letter of Credit or the rights or benefits thereunder or proceeds thereof, in whole or in part, which may prove to be invalid or ineffective for any reason.

 

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(g) Cash Collateral.  Upon the request of Administrative Agent if: (A) the Letter of Credit Issuer has honored any full or partial drawing request under any Letter of Credit and such drawing has resulted in an L/C Borrowing; or (B) an Event of Default has occurred and is continuing; or (C) as of the Letter of Credit Expiration Date, any Letter of Credit for any reason remains outstanding and partially or wholly undrawn, then the Borrower Parties shall immediately Cash Collateralize the then-outstanding amount of the Letter of Credit Liability (determined as of the date of the such Event of Default or Letter of Credit Expiration Date, as the case may be).

 

(i) In addition, if Administrative Agent notifies the Borrower Parties at any time that the outstanding amount of the Letter of Credit Liability at such time exceeds 100% of the Letter of Credit Sublimit then in effect, then the Credit Parties shall Cash Collateralize the Letter of Credit Liability in an amount equal to the amount by which the outstanding amount of the Letter of Credit Liability exceeds the Letter of Credit Sublimit: (A) promptly upon receipt of such notice (but in no event later than two (2) Business Days thereafter), with proceeds from a Borrowing hereunder, up to the Available Loan Amount at such time; and (B) within fifteen (15) Business Days of receipt of such notice to the extent that it is necessary for the Credit Parties to issue Call Notices to fund such required payment (after giving effect to the preceding clause (A)) (and the Credit Parties shall issue such Call Notices during such time, and shall prepay such Loans or Cash Collateralize the Letter of Credit Liability, or both, immediately after the Capital Contributions relating to such Call Notices are received).

 

(ii) Sections 2.1(d)(ii) and 3.6 set forth certain additional requirements to deliver cash collateral hereunder.  For purposes of this Section 2.5, and such other Sections, “Cash Collateralize” means to pledge and deposit with or deliver to Administrative Agent, for the benefit of the Letter of Credit Issuer and the Lenders, as collateral for the Letter of Credit Liability, cash or deposit account balances in Dollars pursuant to documentation in form and substance satisfactory to Administrative Agent and the Letter of Credit Issuer (which documents are hereby consented to by the Lenders).  Derivatives of such term have corresponding meanings.  Each Borrower Party hereby grants to Administrative Agent, for the benefit of the Letter of Credit Issuer and the Lenders, a security interest in all such cash, deposit accounts and all balances therein and all proceeds of the foregoing.  Cash Collateral shall be maintained in blocked, interest bearing deposit accounts at Bank of America (provided that: (x)  any interest accrued on any such deposit account shall be payable to Borrower only upon the full and final payment of the Obligations; and (y) upon the occurrence of an Event of Default, any such interest accrued to the date thereof shall be applied as additional compensation to Lenders).

 

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(h) Conflict with Issuer Documents.  In the event of any conflict between the terms hereof and the terms of any Issuer Documents, the terms hereof shall control.

 

(i) Applicability of ISP98.  Unless otherwise expressly agreed by the Letter of Credit Issuer and a Borrower Party when a Letter of Credit is issued, the rules of the ISP shall apply to each Letter of Credit.

 

2.6. Payment of Borrower Guaranty.  In consideration of Lenders’ agreement to advance funds to a Qualified Borrower, to cause Letters of Credit to be issued for the account of a Qualified Borrower, and to accept Borrower Guaranties in support thereof, Borrower hereby authorizes, empowers, and directs the Administrative Agent, for the benefit of itself and the other Secured Parties, within the limits of the Available Loan Amount, to disburse directly to Lenders, with notice to Borrower, in immediately available funds, an amount equal to the amount due and owing under any Qualified Borrower Note or any Borrower Guaranty, together with all interest, reasonable costs and expenses and fees due to Lenders pursuant thereto, as a Borrowing hereunder, in the event Administrative Agent shall have not received payment of such Obligation when due.  Administrative Agent will promptly notify Borrower of any disbursement made to Lenders pursuant to the terms hereof, provided that the failure to give such notice shall not affect the validity of the disbursement. Any such disbursement made by Administrative Agent to Lenders shall be deemed to be a Loan, and Borrower shall be deemed to have given to Administrative Agent, in accordance with the terms and conditions of Section 2.3(a), a Loan Notice with respect thereto. Administrative Agent may conclusively rely on Lenders as to the amount of any such Obligation due to Lenders, absent manifest error.

 

2.7. Use of Proceeds and Letters of Credit.  The proceeds of the Loans and the Letters of Credit shall be used solely for the purposes permitted under the Operating Agreement, the Stockholders Agreement and the Constituent Documents of the Qualified Borrowers.  None of the Lenders, Agents or Administrative Agent shall have any liability, obligation, or responsibility whatsoever with respect to any Borrower Party’s use of the proceeds of the Loans or the Letters of Credit, and none of the Lenders, Agents or Administrative Agent shall be obligated to determine whether or not any Borrower Party’s use of the proceeds of the Loans or the Letters of Credit are for purposes permitted under the Operating Agreement, the Stockholders Agreement or such Constituent Documents.  Nothing, including, without limitation, any Borrowing, or any issuance of any Letter of Credit, or acceptance of any other document or instrument, shall be construed as a representation or warranty, express or implied, to any party by any Agent, Lender or the Administrative Agent as to whether any investment by Borrower or any Qualified Borrower is permitted by the terms of the Operating Agreement, the Stockholders Agreement or the Constituent Documents of any Qualified Borrower.

 

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2.8. Administrative Agent and Arranger Fees.  Borrower shall pay to Administrative Agent and Arranger fees in consideration of the arrangement of the Commitments and administration of this Credit Agreement, which fees shall be payable in amounts and on the dates agreed to between Borrower and Administrative Agent in the Fee Letter.

 

2.9. Unused Facility Fee.  In addition to the payments provided for in Section 3 hereof, Borrower shall pay to Administrative Agent, for the account of each Lender Group, in accordance with its Lender Group Percentage, an unused facility fee on the daily amount of the Liquidity Commitment minus the daily amount of the Principal Obligation at a rate per annum provided in the Fee Letter, payable in arrears on each Settlement Date.  Borrower and Lenders acknowledge and agree that unused fees payable hereunder are bona fide unused fees and are intended as reasonable compensation to Lenders for committing to make funds available to Borrower as described herein and for no other purposes.

 

2.10. Letter of Credit Fees.  The Borrower Parties shall pay letter of credit fees (the “Letter of Credit Fees”) to the Letter of Credit Issuer and Administrative Agent in the amounts and on the dates as set forth in the Fee Letter.

 

2.11. Computation of Interest and Fees.  All computations of interest for Loans calculated by reference to the Base Rate, when the Base Rate is determined by Bank of America’s “prime rate” shall be made on the basis of a year of 365 or 366 days, as the case may be, and actual days elapsed.  All other computations of fees and interest shall be made on the basis of a 360-day year and actual days elapsed (which results in more fees or interest, as applicable, being paid than if computed on the basis of a 365-day year).  Interest shall accrue on each Loan from and including the day on which the Loan is made, and shall not accrue on a Loan, or any portion thereof, for the day on which the Loan or such portion is paid, provided that any Loan that is repaid on the same day on which it is made shall, subject to Section 3.4, bear interest for one day.

 

2.12. Increase in the Facility Amount.

 

(a) Additional Increase.  Administrative Agent shall, at the request of Borrower (not more than three (3) times), increase the Facility Amount to the amount requested by Borrower by increasing the Commitment of the Alternate Lenders (each, an “Increasing Lender”), subject to the following conditions:

 

(i) Borrower shall have delivered to Administrative Agent the Facility Increase Request at least three (3) Business Days prior to the date of increase;

 

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(ii) After giving effect to the increase in the Commitment of each Increasing Lender, the aggregate amount of Alternate Lenders’ Commitments will not exceed the Maximum Commitment;

 

(iii) Each increase in the aggregate amount of Alternate Lenders’ Commitments shall be in a minimum amount of $50,000,000;

 

(iv) No Event of Default or Potential Default has occurred and is continuing or would result from such increase in the Alternate Lenders’ Commitments; and

 

(v) Borrower shall have paid the applicable fees in accordance with the applicable Fee Letter on or prior to the date of increase.

 

(b) Consent of Alternate Lenders.  Subject to the satisfaction of the conditions for such an increase in this Section 2.12, each Alternate Lender agrees to increase its Commitments pro rata in the event of an increase of the Facility Amount pursuant to this Section 2.12.

 

(c) Amendments.  If Administrative Agent deems it advisable in its sole discretion, Borrowers and each Lender agree to execute an amendment to this Credit Agreement, in form and substance reasonably acceptable to Administrative Agent and Borrower, to document an increase in the Facility Amount pursuant to this Section 2.12.

 

3. PAYMENT OF OBLIGATIONS

 

3.1. Notes.  The Loans to be made by Lenders to Borrower hereunder shall be evidenced by promissory notes of Borrower.  Each Note shall: (a) be in the amount of the applicable aggregate Commitments of the applicable Lender Group; (b) be payable to the order of the Managing Agent for such Lender Group; (c) bear interest in accordance with the provisions hereof; (d) be in the form of Exhibit B-1 attached hereto (with blanks appropriately completed in conformity herewith); and (e) be made by the Borrower.  The Loans to be made by Lenders to Qualified Borrowers hereunder shall be evidenced by a Qualified Borrower Promissory Note of each such Qualified Borrower.  Each Qualified Borrower Promissory Note shall: (a) be in the amount of the applicable aggregate Loans of the applicable Lender Group to be advanced to such Qualified Borrower; (b) be payable to the order of the Managing Agent for such Lender Group; (c) bear interest in accordance with the provisions hereof; (d) be in the form of Exhibit B-2 attached hereto (with blanks appropriately completed in conformity herewith); and (e) be duly executed by such Qualified Borrower.  Each Borrower Party agrees, from time to time, upon the request of Administrative Agent or any applicable Managing Agent, to reissue new Notes, in accordance with the terms and in the form heretofore provided, to any Lender and any Assignee of such Lender in accordance with Section 14.12(b) hereof, in renewal of and substitution for the Note previously issued by such Borrower Party to the Managing Agent for the affected Lender Group, and such previously issued Notes shall be returned to the applicable Borrower Party marked “cancelled”.  Each Managing Agent shall, and is hereby authorized to, make a notation on the schedule attached to the Note of the date and the amount of each Loan and the date and amount of each payment of principal thereon, and prior to any transfer of the Note, such Managing Agent shall endorse the outstanding principal amount of the Note on the schedule attached thereto; provided, however, that failure to make such notation shall not limit or otherwise affect the obligations of any Borrower Party hereunder or under such Note to pay when due the aggregate unpaid principal amount of Obligations owing to the applicable Lender Group by such Borrower Party under this Credit Agreement, and to pay interest on the aggregate unpaid principal amount of Obligations (as so adjusted) and to pay any other amount owing hereunder or thereunder, in each case as provided herein.

 

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3.2. Payment of Obligations.  The principal amount of the Obligations outstanding on the Maturity Date, together with all accrued but unpaid interest thereon, shall be due and payable on the Maturity Date.

 

3.3. Payment of Interest.

 

(a) Interest.  Interest on each Borrowing and any portion thereof shall commence to accrue in accordance with the terms of this Credit Agreement and the other Loan Documents as of the date of the disbursal or wire transfer of such Borrowing by Administrative Agent, consistent with the provisions of Section 2.4 and 2.11, notwithstanding whether any Borrower Party received the benefit of such Borrowing as of such date and even if such Borrowing is held in escrow pursuant to the terms of any escrow arrangement or agreement.  When a Borrowing is disbursed by wire transfer pursuant to instructions received from a Borrower Party, then such Borrowing shall be considered made at the time of the transmission of the wire, in accordance with the Loan Notice, rather than the time of receipt thereof by the receiving bank.  With regard to the repayment of the Loans, interest shall continue to accrue on any amount repaid until such time as the repayment has been received in federal or other immediately available funds by Administrative Agent.

 

(b) Interest Payment Dates.  Accrued and unpaid interest (i) on the Obligations shall be due and payable in arrears in Dollars on each Settlement Date and on the Maturity Date, (ii) on each other date of any reduction of the Principal Obligation hereunder, and (iii) with respect to any Obligation on which such Borrower Party is in default shall be due and payable at any time and from time to time following such default upon demand by Administrative Agent.  Interest hereunder shall be due and payable in accordance with the terms hereof before and after judgment, and before and after the commencement of any proceeding under any Debtor Relief Law.

 

(c) Direct Disbursement.  If, at any time, Administrative Agent or Letter of Credit Issuer shall not have received on the date due, any payment of interest upon the Loans or any fee described herein, Administrative Agent may direct the disbursement of funds from the Collateral Account to Lenders or Letter of Credit Issuer, in accordance with the terms hereof, to the extent available therein for payment of any such amount.  If, at any such time, the amount available in the Collateral Account is not sufficient for the full payment of such amounts due, Administrative Agent may, without prior notice to or the consent of any Borrower Party, within the limits of the Available Loan Amount, disburse to Lenders, in accordance with the terms hereof, in immediately available funds an amount equal to the interest or fee due to Lenders, which disbursement shall be deemed to be a Loan pursuant to Section 2.3 hereof, and Borrower shall be deemed to have given to Lenders in accordance with the terms and conditions of Section 2.3 a Loan Notice with respect thereto.

 

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3.4. Payments Generally.  (a) All payments of principal of, and interest on, the Obligations under this Credit Agreement by any Borrower Party to or for the account of Lenders, or any of them, shall be made without condition or deduction for any counterclaim, defense, recoupment or setoff by such Borrower Party.  Except as otherwise expressly provided herein, all payments by the Borrower Parties hereunder shall be made to Administrative Agent, for the account of the respective Lenders to which such payment is owed, to the Administrative Agent’s Account in Dollars and in immediately available funds not later than 2:00 p.m. on the date specified herein.  Funds received after 2:00 p.m. shall be treated for all purposes as having been received by Administrative Agent on the first Business Day next following receipt of such funds and any applicable interest or fees shall continue to accrue.  Each Lender Group shall be entitled to receive its Lender Group Percentage (or other applicable share as provided herein) of each payment received by Administrative Agent hereunder for the account of Lenders on the Obligations.  Each payment received by Administrative Agent hereunder for the account of a Lender Group shall be promptly distributed by Administrative Agent in accordance with the instructions provided by the Managing Agent for such Lender Group.  If any payment to be made by any Borrower Party shall come due on a day other than a Business Day, payment shall be made on the next following Business Day, and such extension of time shall be reflected in computing interest or fees, as the case may be.

 

(b) Borrower Deposits.  The Borrower Parties shall deposit or cause to be deposited into the Administrative Agent’s Account:

 

(i) On each Settlement Date, accrued and unpaid Yield for the applicable Interest Period;

 

(ii) On the specified Business Day with respect to a reduction of the Principal Obligation under Section 3.5 or Section 3.6, the amount of the reduction, accrued and unpaid Yield thereon to such Business Day and any other Obligations (other than Yield) with respect to such amount;

 

(iii) On each applicable Business Day determined in accordance with Section 2.1(d), an amount equal to the mandatory principal payment specified therein, accrued and unpaid Yield thereon to such Business Day and any other Obligation (other than Yield) with respect to such amount;

 

(iv) On each Settlement Date, any Obligations then due and payable other than Yield (without duplication); and

 

(v) On the Maturity Date, all accrued and unpaid Obligations (including Cash Collateralization of the Letter of Credit Liability that will remain outstanding after the Maturity Date).

 

(c) Order of Application.  Upon the receipt by Administrative Agent of any payment with respect to the Obligations, Administrative Agent shall distribute the amount of such payment or deposit to the Persons, for the purposes and in the order of priority, set forth below:

 

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(i) to Administrative Agent, the Managing Agents, the Administrator, the applicable Lenders and such other Persons as may be entitled to the distribution required by this clause (i), in payment of all costs, expenses, other fees (including Attorney Costs) and  Obligations owed to such Persons other than Loans and Yield and other than the Cash Collateralization of the Letter of Credit Liability, pro rata based on entitlement;

 

(ii) to the applicable Managing Agents (on behalf of their related Lenders), pro rata based on the Lender Group Percentages of their respective Lender Groups in the Loans, accrued and unpaid Yield on all Portions of Loans for the related Interest Periods; and

 

(iii) first, to the applicable Managing Agents (on behalf of their related Lenders), pro rata based on the Lender Group Percentages of their respective Lender Groups in the Loans, in reduction of the aggregate outstanding Loans, and second, for deposit in the Administrative Agent’s Account an amount necessary to Cash Collateralize the Letter of Credit Liability as required pursuant to Section 2.5.

 

3.5. Voluntary Prepayments.  Any Borrower Party may, upon notice to Administrative Agent, at any time or from time to time voluntarily prepay Loans in whole or in part without premium or penalty; provided that: (a) such notice must be received by Administrative Agent not later than 11:00 a.m. three (3) Business Days prior to any date of prepayment of Loans; and (b) any prepayment of Loans shall be in a principal amount of $500,000 or a whole multiple of $100,000 in excess thereof or, if less, the entire principal amount thereof then outstanding.  Each such notice shall specify the date (which shall be a Business Day) and amount of such prepayment.  Administrative Agent will promptly notify each Managing Agent of its receipt of each such notice, and of the amount of such Managing Agent’s Lender Group Percentage of such prepayment.  If such notice is given by a Borrower Party, such Borrower Party shall make such prepayment and the payment amount specified in such notice shall be due and payable on the date specified therein.  Any prepayment of a Loan shall be accompanied by all accrued interest thereon, together with any additional amounts required pursuant to Section 4 hereof.  Each such prepayment shall be applied to the Obligations held by each Lender in accordance with its respective Pro Rata Share.

 

3.6. Reduction or Early Termination of Commitments.  So long as no Loan Notice or Request for Letter of Credit is outstanding, Borrower may terminate the Commitments, or reduce the Facility Amount, by giving prior irrevocable written notice to Administrative Agent of such termination or reduction ten (10) Business Days prior to the effective date of such termination or reduction (which date shall be specified by Borrower in such notice):  (a) (i) in the case of complete termination of the Commitments, upon prepayment of all of the outstanding Obligation, including, without limitation, all interest accrued thereon, in accordance with the terms of Section 3.5; or (ii) in the case of a reduction of the Facility Amount, upon prepayment of the amount by which the Principal Obligation exceeds the reduced Available Loan Amount resulting from such reduction, including, without limitation, payment of all interest accrued thereon, in accordance with the terms of Section 3.5, provided, however, that, except in connection with a termination of the Commitments, the Facility Amount may not be reduced such that, upon such reduction, the Available Loan Amount is less than the aggregate face amount of outstanding Letters of Credit; and (b) in the case of the complete termination of the Commitments, if any Letter of Credit Liability exists, Borrower shall immediately Cash Collateralize the then-outstanding amount of the Letter of Credit Liability, without presentment, demand, protest or any other notice of any kind, all of which are hereby waived.  Unless otherwise required by law, upon the full and final payment of the Letter of Credit Liability, or the termination of all outstanding Letter of Credit Liability due to the expiration of all outstanding Letters of Credit prior to draws thereon, Administrative Agent shall return to Borrower or the applicable Qualified Borrower any amounts remaining in such cash collateral account, provided, however, that, so long as no Event of Default exists, to the extent individual Letters of Credit expire, Administrative Agent will return to Borrower or the applicable Qualified Borrower the corresponding amount of the expired Letter of Credit Liability.  Notwithstanding the foregoing:  (1) after any reduction of the Facility Amount by Borrower, the next subsequent reduction shall not occur until at least one month thereafter; (2) any reduction of the Facility Amount shall be in an amount equal to or greater than $5,000,000; and (3) in no event shall a reduction by Borrower reduce the Facility Amount to $10,000,000 or less (except for a termination of all the Commitments).  Promptly after receipt of any notice of reduction or termination, Administrative Agent shall notify each Lender of the same.  Any reduction of the Facility Amount shall reduce the Commitments of the Alternate Lenders on a pro rata basis.

 

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3.7. Lending Office.  Each Lender may (a) designate its principal office or a branch, subsidiary or Affiliate of such Lender as its Lending Office (and the office to whose accounts payments are to be credited) for any Loan and (b) change its Lending Office from time to time by notice to Administrative Agent and Borrower.  In such event, the Managing Agent for such Lender shall continue to hold the Note, if any, evidencing its loans for the benefit and account of such branch, subsidiary or Affiliate.  Each Lender shall be entitled to fund all or any portion of its Commitment in any manner it deems appropriate, consistent with the provisions of Section 2.4.

 

 

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4. CHANGE IN CIRCUMSTANCES.

 

4.1. Taxes.

 

(a) Payments Free of Taxes.  Any and all payments by or on account of any obligation of any Borrower Party hereunder or under any other Loan Document shall be made free and clear of and without reduction or withholding for any Indemnified Taxes or Other Taxes, provided that if any Borrower Party shall be required by applicable law to deduct any Indemnified Taxes (including any Other Taxes) from such payments, then: (i) the sum payable shall be increased as necessary so that after making all required deductions (including deductions applicable to additional sums payable under this Section 4.1) each Tax Indemnified Party receives an amount equal to the sum it would have received had no such deductions been made; (ii) the applicable Borrower Party shall make such deductions; and (iii) such Borrower Party shall timely pay the full amount deducted to the relevant Governmental Authority in accordance with applicable law.

 

(b) Payment of Other Taxes by Borrower.  Without limiting the provisions of subsection (a) above, each Borrower Party shall timely pay any Other Taxes to the relevant Governmental Authority in accordance with applicable law.

 

(c) Indemnification by Borrower Parties.  Each Borrower Party shall indemnify each Tax Indemnified Party, within ten (10) days after demand therefor, for the full amount of any Indemnified Taxes or Other Taxes (including Indemnified Taxes or Other Taxes imposed or asserted on or attributable to amounts payable under this Section 4.1) paid by such Tax Indemnified Party and penalties, interest and reasonable expenses arising therefrom or with respect thereto, whether or not such Indemnified Taxes or Other 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 the applicable Borrower Party by a Tax Indemnified Party (with a copy to Administrative Agent), on its own behalf or on behalf of a Tax Indemnified Party, shall be conclusive absent manifest error.

 

(d) Evidence of Payments.  As soon as practicable after any payment of Indemnified Taxes or Other Taxes by a Borrower Party to a Governmental Authority, such Borrower Party shall deliver to Administrative Agent 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 Administrative Agent.

 

(e) Gross Up.  If any Borrower Party shall be required to deduct or pay any Taxes or Other Taxes from or in respect of any sum payable under any Loan Document to Administrative Agent or any Secured Party, such Borrower Party shall also pay to Administrative Agent or to such Secured Party, as the case may be, at the time interest is paid, such additional amount that Administrative Agent or such Secured Party specifies is necessary to preserve the after-tax yield (after factoring in all taxes, including taxes imposed on or measured by net income) that Administrative Agent or such Secured Party would have received if such Taxes or Other Taxes had not been imposed.

 

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(f) Selection of Lending Office.  If a Borrower Party is or is likely to be required to pay additional amounts to or for the account of any Lender pursuant to this Section 4.1, then such Lender will agree to use reasonable efforts to change the jurisdiction of its Lending Office so as to eliminate or reduce any such additional payment which may thereafter accrue if such change, in the good faith  judgment of such Lender, is not otherwise materially disadvantageous to such Lender.

 

(g) Treatment of Certain Refunds.  If any Tax Indemnified Party determines, in its reasonable discretion, that it has received a refund of any Taxes or Other Taxes as to which it has been indemnified by the Borrower Parties or with respect to which any Borrower Party has paid additional amounts pursuant to this Section 4.1, it shall pay to such Borrower Party an amount equal to such refund (but only to the extent of indemnity payments made, or additional amounts paid, by such Borrower Party under this Section 4.1 with respect to the Taxes or Other Taxes giving rise to such refund), net of all out-of-pocket expenses of such Tax Indemnified Party, as the case may be, and without interest (other than any interest paid by the relevant Governmental Authority with respect to such refund); provided that each Borrower Party, upon the request of such Tax Indemnified Party, agrees to repay the amount paid over to such Borrower Party (plus any penalties, interest or other charges imposed by the relevant Governmental Authority) to such Tax Indemnified Party in the event such Tax Indemnified Party is required to repay such refund to such Governmental Authority.  This subsection shall not be construed to require any Tax Indemnified Party to make available its tax returns (or any other information relating to its taxes that it deems confidential) to the Borrower Parties or any other Person.

 

4.2. Illegality.  If any Lender determines that any Law has made it unlawful, or that any Governmental Authority has asserted that it is unlawful, for such Lender or its Lending Office to make, maintain, finance or fund Loans or other Obligations, or to determine or charge interest rates based upon the LIBOR Rate, or any Governmental Authority has imposed material restrictions on the authority of such Lender to purchase or sell, or to take deposits of, Dollars or to determine or charge interest rates based upon the LIBOR Rate, then, on notice thereof by such Lender to Borrower Parties through Administrative Agent, any obligation of such Lender to make or continue Loans or to convert Portions of Loans accruing Yield calculated by reference to the LIBOR Rate to Portions of Loans calculated by return to the Base Rate shall be suspended until such Lender notifies Administrative Agent and Borrower Parties that the circumstances giving rise to such determination no longer exist.  Upon the prepayment of any such Loans, each Borrower Party shall also pay accrued interest on the amount so prepaid.  Each Lender agrees to designate a different Lending Office if such designation will avoid the need for such notice and will not, in the good faith judgment of such Lender, otherwise be materially disadvantageous to such Lender.

 

4.3. Inability to Determine Rates.  If the LIBOR Rate is at any time applicable and if Administrative Agent is unable to obtain on a timely basis the information necessary to determine the LIBOR Rate for any proposed Interest Period, then:  (a)  Administrative Agent shall forthwith notify the Lenders and each Borrower Party that the LIBOR Rate cannot be determined for such Interest Period; and (b) while such circumstances exist, none of the Managing Agents shall allocate any Portion of Loans with respect to Loans made during such period, or reallocate any Portion of Loans allocated to any then-existing Interest Period ending during such period, to a Interest Period with respect to which Yield is calculated by reference to the LIBOR Rate.  If, with respect to any outstanding Interest Period, a Lender notifies the Administrative Agent that it is unable to obtain matching deposits based upon the London interbank market to fund its purchase or maintenance of such Portion of Loans or that the LIBOR Rate applicable to such Portion of Loans will not adequately reflect the cost to the Person of funding or maintaining such Portion of Loans for such Interest Period, then:  (i) Administrative Agent shall forthwith so notify Borrower and the Lenders; and (ii) upon such notice and thereafter while such circumstances exist, the applicable Managing Agent shall not allocate any other Portion of Loans with respect to Loans made by such Lender during such period, or reallocate any Portion of Loans allocated to any Interest Period ending during such period, to an Interest Period with respect to which Yield is calculated by reference to the LIBOR Rate.

 

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4.4. Increased Cost and Capital Adequacy.

 

(a) Change in Law: Increased Cost.  If any Secured Party determines that as a result of the introduction of or any change in or in the interpretation of any Law, or such Secured Party’s compliance therewith, there shall be any increase in the cost to such Secured Party of agreeing to make or making, funding or maintaining Loans or (as the case may be) issuing or participating in Letters of Credit (collectively, the “Covered Matters”), or its obligation to advance funds under a Program Support Agreement or otherwise in respect of Covered Matters, or a reduction in the amount received or receivable by such Secured Party in connection with any of the foregoing (excluding for purposes of this clause (a) any such increased costs or reduction in amount resulting from: (i) Taxes or Other Taxes (as to which Section 4.1 shall govern); (ii) changes in the basis of taxation of overall net income or overall gross income by the United States or any foreign jurisdiction or any political subdivision of either thereof under the Laws of which such Secured Party is organized or has its Lending Office; and (iii) reserve requirements utilized in the determination of the LIBOR Rate), then from time to time upon demand of such Secured Party (with a copy of such demand to the Administrative Agent), the Borrower Parties shall pay to such Secured Party such additional amounts as will compensate such Secured Party for such increased cost or reduction:  (A) promptly on demand, to the extent that funds are available in the Collateral Account or any other account maintained by Borrower; and (B) otherwise, to the extent that it is necessary for Call Notices to be issued to fund such required payment, within fifteen (15) Business Days after demand (but in any event, the Credit Parties shall issue such Call Notices and shall make such payment immediately after the related Capital Contributions are received).

 

(b) Change in Law: Capital Adequacy.  If any Secured Party determines that the introduction of any Law regarding capital adequacy or any change therein or in the interpretation thereof, or compliance by such Secured Party (or its Lending Office) therewith, has the effect of reducing the rate of return on the capital of such Secured Party or any corporation controlling such Secured Party as a consequence of Covered Matters or its obligation to advance funds under a Program Support Agreement or otherwise in respect of Covered Matters (taking into consideration its policies with respect to capital adequacy and such Secured Party’s desired return on capital), then from time to time upon demand of such Secured Party (with a copy of such demand to Administrative Agent), the applicable Borrower Parties shall pay to such Secured Party such additional amounts as will compensate such Secured Party for such reduction; provided, however, that such amounts shall not be duplicative of any amounts paid by such Borrower Party in the preceding clause (a): (A) promptly on demand, to the extent that funds are available in the Collateral Account or any other account maintained by such Borrower Party; and (B) otherwise, to the extent that it is necessary for Call Notices to be issued to fund such required payment, within fifteen (15) Business Days after demand (but in any event, the Credit Parties shall issue such Call Notices and shall make such payment after the related Capital Contributions are received).

 

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4.5. Funding Losses.  Upon demand of any Lender (with a copy to Administrative Agent) from time to time, the Borrower Parties shall promptly pay Administrative Agent for the account of such Lender, such amount or amounts as shall compensate such Lender for and hold such Lender harmless from any loss, cost or expense incurred by such Lender (as determined by the applicable Managing Agent) as a result of (i) any reduction of any Portion of Loans other than on a date for which timely notice thereof was provided in accordance with Section 3.5 or (ii) any failure by a Borrower Party (for a reason other than the failure of such Lender to make a Loan) to pay, prepay or borrow any Loan on the date or in the amount notified by such Borrower Party, or (iii) any failure by any Borrower Party to make payment on any drawing under any Letter of Credit (or interest due thereon) on its scheduled due date, and, in the case of an event described in clause (i) or (ii) to include: (a) an amount equal to any loss or expense suffered by the applicable Lender during the period from the date of receipt of such repayment to the applicable Settlement Date (or if in respect of a reduction on a Settlement Date but without the requisite notice required by Section 3.5, to the maturity date of such Commercial Paper (or other financing source)); and (b) net of the income, if any, actually received by the recipient of such reduction from investing the proceeds of such reduction of such Portion of Loans.

 

4.6. Matters Applicable to all Requests for Compensation.

 

(a) Determination of Amount.  A certificate of Administrative Agent or any Secured Party provided to Borrower claiming compensation under this Section 4 and setting forth the additional amount or amounts to be paid to it hereunder shall be conclusive in the absence of manifest error.  In determining such amount, Administrative Agent or such Secured Party may use any reasonable averaging and attribution methods.

 

(b) No Duplication.  Any amount payable by the Borrower on account of Section 4.1, 4.4, or 4.5 shall not be duplicative of: (i) any amount paid under any other such sections, or (ii) any amounts included in the calculation of the LIBOR Rate.  Notwithstanding anything to the contrary set forth in this Section 4, Borrower Parties shall be required to compensate the Lenders for amounts payable pursuant to Sections 4.1, 4.4 and 4.5 only to the extent Lenders are holding comparable borrowers liable for such amounts.

 

(c) Replacement of Lenders.  If any Lender requests compensation under Section 4.4, or if any Borrower Party is required to pay any additional amount to any Lender or any Governmental Authority for the account of any Lender pursuant to Section 4.1, Borrower may replace such Lender in accordance with Section 14.14.

 

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(d) Refund.  Any amount determined to be paid by the Borrower in error pursuant to this Section 4 shall be, if no Event of Default has occurred and is continuing, promptly refunded to the Borrower, or applied to amounts owing hereunder, as the Borrower may elect.

 

(e) Survival.  All of the Borrower Parties’ obligations under this Section 4 shall survive the termination of the Commitments and payment in full of all other Obligations hereunder.

 

4.7. Prohibited Event.  In the event a Lender notifies the Administrative Agent that, subsequent to the Closing Date, such Lender or any of its Affiliates: (i) has become a fiduciary with respect to any ERISA Investor in connection with its investment in the Borrower, the Guarantor, the Pledgor or this transaction; or (ii) has acquired any discretionary authority or control with respect to any ERISA Investor’s investment in any Credit Party, or renders any investment advice (within the meaning of 29 C.F.R. §2510.3-21(c)) with respect to such investment, the parties hereby agree that the event described in clause (i) or (ii) above (the “Prohibited Event”) shall be deemed to have caused a prohibited transaction under Section 406(a) of ERISA or Section 4975(c)(1)(A), (B), (C) or (D) of the Code with respect to the transactions described in this Credit Agreement, and the parties to this Credit Agreement shall cooperate with each other to correct such prohibited transaction in accordance with Section 4975(f)(5) of the Code.  NOTWITHSTANDING ANYTHING IN THIS CREDIT AGREEMENT TO THE CONTRARY, any such correction shall prevent the Lender from receiving any direct or indirect fees, loan repayments, or any other benefits from such ERISA Investor.  If the Administrative Agent determines at any time in its reasonable discretion that any of the corrections described herein are insufficient to correct the prohibited transaction in accordance with Section 4975(f)(5) of the Internal Revenue Code, then the parties shall also cooperate to replace such affected Lender.

 

5. SECURITY

 

5.1. Liens and Security Interest.

 

(a) Capital Commitments and Capital Calls.  To secure performance by the Borrower Parties of the payment of each Note and the Obligations:  (i) each of Borrower and Managing Member shall grant to Administrative Agent, for the benefit of each of the Secured Parties, an exclusive, perfected, first priority security interest and Lien in and to the Collateral Account pursuant to the Account Assignment; (ii) Borrower and Managing Member, to the extent of their respective interests therein, shall grant to Administrative Agent, for the benefit of Secured Parties, an exclusive, perfected, first priority security interest and Lien in and to the Capital Calls, Capital Commitments, Capital Contributions and their rights under the Operating Agreement, including, without limitation, any rights to make Capital Calls, receive payment of Capital Contributions and enforce the payment thereof pursuant to the Borrower and Managing Member Security Agreement and (iii) pursuant to the Capital Contributions Pledge Agreement, the Pledgor shall grant to Administrative Agent, for the benefit of each Secured Party, an exclusive, perfected, first priority security interest and Lien in all of the collateral described therein, including the Capital Calls, Capital Commitments, Capital Contributions and, without limitation, any rights to make Capital Calls, receive payment of Capital Contributions and enforce the payment thereof with respect to the Stockholders pursuant to the Stockholders Agreement (the collateral in clauses (i) through (iii) of this Section 5.1(a) being, collectively, the “Collateral”); and (v) Borrower, Managing Member and Pledgor shall deliver to Administrative Agent, or shall otherwise consent to the filing of, financing statements and other documents satisfactory to Administrative Agent.  Administrative Agent acknowledges that the collateral for the Obligations does not include a security interest in any Equity Interest.

 

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(b) Investor Letters.  Each Investor  shall execute, in favor of Administrative Agent for the benefit of Secured Parties, an agreement in substantially the form attached hereto as Exhibit I (an “Investor Letter”).

 

5.2. Collateral Account; Capital Calls.

 

(a) Collateral Account.  In order to secure further the payment and performance of the Obligations and to effect and facilitate Secured Parties’ right of offset:  (i) the Credit Parties hereby irrevocably appoints Administrative Agent as subscription agent and the sole party entitled in the name of the applicable Credit Party upon the occurrence and during the continuance of an Event of Default, to make any Capital Calls upon the Investors pursuant to the terms of the Operating Agreement and/or the Stockholders Agreement, as applicable, and shall require that all Investors wire-transfer to Bank of America, N.A., ABA #026-009-593, for further credit to Account No. 1233060441, reference “Acadia Strategic Opportunity Fund III LLC Collateral Account” (the “Collateral Account”), all monies or sums paid or to be paid by any Investor to the capital of any Credit Party as Capital Contributions as and when Capital Contributions are called pursuant to the Call Notices.  In addition, each Credit Party shall, upon receipt, deposit in the applicable Collateral Account described above, any payments and monies that such Credit Party receives directly from its Investors as Capital Contributions.

 

(b) No Duty.  Notwithstanding anything to the contrary herein contained, it is expressly understood and agreed that neither Administrative Agent, Letter of Credit Issuer, nor any other Secured Party undertakes any duties, responsibilities, or liabilities with respect to Capital Calls.  None of them shall be required to refer to the Constituent Documents of any Credit Party or take any other action with respect to any other matter which might arise in connection with such Constituent Documents, the Operating Agreement, the Stockholders Agreement or any Capital Call.  None of them shall have any duty to determine or inquire into any happening or occurrence or any performance or failure of performance of any Credit Party or of any Investor.  None of them has any duty to inquire into the use, purpose, or reasons for the making of any Capital Call or with respect to the investment or the use of the proceeds thereof.

 

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(c) Capital Calls.  In order that Secured Parties may monitor the Collateral and the Capital Commitments, no Credit Party shall issue any Call Notice or otherwise request, notify, or demand that any Investor make any Capital Contribution, without delivering to Administrative Agent (which delivery may be via facsimile) simultaneously with delivery of the Call Notices to any Investors (“Call Notice Date”), copies of the Call Notice for each Investor from whom a Capital Contribution is being sought.  Concurrently with the delivery of any Call Notice, the Borrower shall deliver to Administrative Agent a Borrowing Base Certificate showing no Implicit Borrowing Base Deficit would exist at such time after application of the subject Capital Contributions in accordance with the terms of the Call Notice.

 

(d) Use of Account; Capital Calls by Administrative Agent.  Borrower may request that Administrative Agent withdraw funds from the Collateral Account at any time or from time to time and disburse such funds as Borrower may direct, so long as at the time of such withdrawal or disbursement and after giving effect thereto:  (i) there does not exist an Event of Default or Potential Default; and (ii) the Principal Obligation does not exceed the Available Loan Amount (unless, in the latter case), Borrower has directed that such disbursement be paid to Administrative Agent to repay such excess) and any request by Borrower for withdrawal from the Collateral Account shall be deemed a representation and warranty that the conditions set forth in the foregoing clauses (i), (ii) and (iii) have been satisfied.  The Credit Parties hereby irrevocably authorize and direct the Secured Parties, acting through Administrative Agent, to withdraw from time to time funds from the Collateral Account for application to amounts not paid when due (after the passage of any applicable grace period) to the Secured Parties or any of them hereunder, under any Application and Agreement for Letter of Credit, under any Letter of Credit or under the Notes to the extent provided herein.  Administrative Agent, on behalf of the Secured Parties, is hereby authorized, in the name of the Secured Parties or the name of any Credit Party, at any time or from time to time upon the occurrence and while an Event of Default exists, to notify any or all parties obligated to any Credit Party with respect to the Capital Commitments to make all payments due or to become due thereon directly to Administrative Agent on behalf of the Secured Parties, at a different account number, or to initiate one or more Capital Call Notices in order to pay the Obligations.  With or without such general notification, when an Event of Default exists, Administrative Agent, on behalf of Secured Parties:  (i) may make Capital Calls in the name of any Credit Party; (ii) may take or bring in any Credit Party’s name or (or that of the Secured Parties) all steps, actions, suits, or proceedings deemed by Administrative Agent necessary or desirable to effect possession or collection of Capital Commitments; (iii) may complete any contract or agreement of any Credit Party in any way related to any of the Capital Commitments; (iv) may make allowances or adjustments related to the Capital Commitments; (v) may compromise any claims related to the Capital Commitments; (vi) may issue credit in its own name or the name of any Credit Party; or (vii) may exercise any right, privilege, power, or remedy provided to any Credit Party under the Constituent Documents of any Credit Party, the Operating Agreement, or the Stockholders Agreement relating to the right to call for Capital Contributions and to receive Capital Contributions.  Regardless of any provision hereof, in the absence of gross negligence or willful misconduct by Administrative Agent or Secured Parties, none of Administrative Agent or Secured Parties shall ever be liable for failure to collect or for failure to exercise diligence in the collection, possession, or any transaction concerning, all or part of the Capital Call Notices, Capital Commitments, or any Capital Contributions, or sums due or paid thereon, nor shall they be under any obligation whatsoever to anyone by virtue of the security interests and Liens relating to the Capital Call Notices, Capital Commitments or any Capital Contributions.  Administrative Agent shall give Borrower prompt notice of any action taken pursuant to this Section 5.2(d), but failure to give such notice shall not affect the validity of such action or give rise to any defense in favor of any Credit Party with respect to such action.

 

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(e) Event of Default.  During the existence and continuance of an Event of Default, issuance by Administrative Agent on behalf of Secured Parties of a receipt to any Person obligated to pay any Capital Contribution to any Credit Party shall be a full and complete release, discharge, and acquittance to such Person to the extent of any amount so paid to Administrative Agent for the benefit of Secured Parties, so long as such amount shall not be invalidated, declared to be fraudulent or preferential, set aside or required to be repaid to a trustee, receiver or any other Person under any bankruptcy act or code, state or federal law, common law or equitable doctrine.  Administrative Agent, on behalf of the Secured Parties, is hereby authorized and empowered, during the existence of and continuance of an Event of Default, on behalf of any Credit Party, to endorse the name of any Credit Party upon any check, draft, instrument, receipt, instruction, or other document, agreement or item, including, but not limited to, all items evidencing payment of a Capital Contribution of any Person to any Credit Party coming into Administrative Agent’s or any Lender’s possession, and to receive and apply the proceeds therefrom in accordance with the terms hereof.  Administrative Agent on behalf of Secured Parties is hereby granted an irrevocable power of attorney, which is coupled with an interest, to execute all checks, drafts, receipts, instruments, instructions, or other documents, agreements, or items on behalf of any Credit Party, either before or after demand of payment on the Obligations but only during the existence and continuance  of an Event of Default, as shall be deemed by Administrative Agent to be necessary or advisable, in the sole discretion, reasonably exercised, of Administrative Agent, to preserve the security interests and Liens in the Capital Commitments or to secure the repayment of the Obligations, and neither Administrative Agent nor Secured Parties shall incur any liability, in the absence of gross negligence or willful misconduct, in connection with or arising from its exercise of such power of attorney.  The application by Secured Parties of such funds shall, unless Administrative Agent shall agree otherwise in writing, be the same as set forth in Section 3.4.

 

(f) No Representations.  Neither Administrative Agent nor Secured Parties shall be deemed to make at any time any representation or warranty as to the validity of any Call Notice nor shall Administrative Agent or the Secured Parties be accountable for any Credit Party’s use of the proceeds of any Capital Call Notice.

 

5.3. Agreement to Deliver Additional Collateral Documents.  Each Credit Party shall deliver such security agreements, financing statements, assignments, and other collateral documents (all of which shall be deemed part of the “Collateral Documents”), in form and substance reasonably satisfactory to Administrative Agent, as Administrative Agent acting on behalf of the Secured Parties may reasonably request from time to time for the purpose of granting to, or maintaining or perfecting in favor of the Secured Parties, first and exclusive security interests in any of the Capital Call Notices and Capital Commitments, together with other assurances of the enforceability and priority of the Secured Parties’ Liens and assurances of due recording and documentation of the Collateral Documents or copies thereof, as Administrative Agent may reasonably require to avoid material impairment of the liens and security interests granted or purported to be granted pursuant to this Section 5.

 

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5.4. Subordination of All Credit Party Claims.  As used herein, the term “Credit Party Claims” means all debts and liabilities of any Investor to any Credit Party, whether such debts and liabilities now exist or are hereafter incurred or arise, or whether the obligations of such Person thereon be direct, contingent, primary, secondary, several, joint and several, or otherwise, and irrespective of whether such debts or liabilities be evidenced by note, contract, open account, or otherwise, and irrespective of the Person or Persons in whose favor such debts or liabilities may, at their inception, have been, or may hereafter be created, or the manner in which they have been or may hereafter be acquired by any Credit Party (including, without limitation, by setoff pursuant to the terms of any applicable agreement).  Credit Party Claims shall include without limitation all rights and claims of any Credit Party against an Investor under the Constituent Documents of such Person.  At any time stays that the Principal Obligation exceeds the Available Loan Amount, and until the mandatory prepayment pursuant to Section 2.1(d) hereof in connection therewith, if any, shall be paid and satisfied in full, or, during the existence and continuation of an Event of Default, no Credit Party shall receive or collect, directly or indirectly any amount upon the Credit Party Claims, other than to obtain funds required to make any mandatory prepayment pursuant to Section 2.1(d).

 

Any Liens, security interests, judgment liens, charges, or other encumbrances upon an Investor’s assets securing payment of Credit Party Claims, including, but not limited to, any liens or security interests on an Investor’s Equity Interest, shall be and remain inferior and subordinate in right of payment and of security to any liens, security interests, judgment liens, charges, or other encumbrances upon an Investor’s assets securing such Investor’s obligations and liabilities to the Secured Parties pursuant to any of the Collateral Documents executed by such Investor, regardless of whether such encumbrances in favor of Borrower or a Qualified Borrower, Managing Member, the Pledgor or the Secured Parties presently exist or are hereafter created or attach.  Without the prior written consent of Administrative Agent, no Credit Party shall:  (a) exercise or enforce any creditor’s, shareholder or partnership right it may have against an Investor; (b) foreclose, repossess, sequester, or otherwise take steps or institute any action or proceedings (judicial or otherwise, including without limitation, the commencement of, or joinder in, any liquidation, bankruptcy, rearrangement, debtor’s relief, or insolvency proceeding) to enforce any liens, mortgages, deeds of trust, security interest, collateral rights, judgments or other encumbrances on assets of such Investor held by such Person; or (c) exercise any rights or remedies against an Investor under the Constituent Documents of such Person; provided that any action taken by Administrative Agent or the Secured Parties in Borrower’s name, or any action taken by Borrower that is required under any Loan Document or to comply with any Loan Document, shall not be a violation of this Section 5.4.

 

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6. [RESERVED]

 

7. ADDITIONAL ALTERNATE LENDER PROVISIONS

 

7.1. Assignment to Alternate Lenders.

 

(a) Assignment Amounts.  At any time on or prior to the Stated Maturity Date, if the related Administrator on behalf of the applicable Conduit Lender so elects, by written notice to Administrative Agent, Borrower and its related Managing Agent, such Conduit Lender hereby assigns effective on the Assignment Date referred to below all or such portions as may be elected by such Conduit Lender of its interest in the Principal Obligation at such time to its Alternate Lenders pursuant to this Section 7.1; provided, however, that unless such assignment is an assignment of all such Conduit Lender’s interest in the Principal Obligation in whole on or after its Conduit Investment Termination Date, no such assignment shall take place pursuant to this Section 7.1 if an Event of Default described in Section 12.1(n) shall then exist; and provided, further, that no such assignment shall take place pursuant to this Section 7.1 at a time when such Conduit Lender is subject to any proceedings under any Debtor Relief Laws.  No further documentation or action on the part of such Conduit Lender, the Borrower, or the applicable Alternate Lenders shall be required to exercise the rights set forth in the immediately preceding sentence, other than the giving of the notice by the related Administrator on behalf of such Conduit Lender referred to in such sentence and the delivery by the related Managing Agent of a copy of such notice to each Alternate Lender in the Lender Group (the date of the receipt by Administrative Agent of any such notice being the “Assignment Date”).  Each Alternate Lender hereby agrees, unconditionally and irrevocably and under all circumstances, without set-off, counterclaim or defense of any kind, to pay the full amount of its Assignment Amount on such Assignment Date to such Conduit Lender in immediately available funds in Dollars based on the assigning Conduit Lender’s interest in the Principal Obligation, to an account designated by the related Managing Agent.  Upon payment of its Assignment Amount, each such Alternate Lender shall acquire an interest in the Principal Obligation equal to its Alternate Lender Pro Rata Share thereof.  Upon any assignment in whole by a Conduit Lender to its Alternate Lenders on or after its Conduit Investment Termination Date as contemplated hereunder, such Conduit Lender shall cease to make any additional Loans hereunder.  At all times prior to its Conduit Investment Termination Date, nothing herein shall prevent a Conduit Lender from making a subsequent Loan hereunder, in its sole discretion, following any assignment pursuant to this Section 7.1 or from making more than one assignment pursuant to this Section 7.1.

 

(b) Additional Assignment Amounts.  The applicable Borrower Party may pay to Administrative Agent in Dollars, for the account of the related Managing Agent for the benefit of its Conduit Lender, in connection with any assignment by a Conduit Lender to its Alternate Lenders pursuant to this Section 7.1, an aggregate amount equal to all Yield to accrue through the end of the current Interest Period to the extent attributable to the portion of the Loans so assigned to the Alternate Lenders (as determined immediately prior to giving effect to such assignment), plus all Obligations then due, other than the Loans and other than any Yield described above, attributable to such portion of the Loans so assigned.  If the applicable Borrower Party does not make payment of such amounts at or prior to the time of assignment by a Conduit Lender to its Alternate Lenders, such amount shall be paid by such Alternate Lenders to the Conduit Lender as additional consideration for the interests assigned to the Alternate Lenders and the amount of the “Loans” hereunder held by such Alternate Lenders shall be increased by an amount equal to the additional amount so paid by such Alternate Lenders.

 

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(c) Administration of Agreement after Assignment from Conduit Lender to Alternate Lenders following the Conduit Investment Termination Date.  After any assignment in whole by a Conduit Lender to its Alternate Lenders pursuant to this Section 7.1 at any time on or after its Conduit Investment Termination Date (and the payment of all amounts owing to such Conduit Lender in connection therewith), all rights of the related Administrator and the related Conduit Collateral Agent set forth herein shall be given to the applicable Managing Agent on behalf of its Alternate Lenders instead of such Administrator and Conduit Collateral Agent.

 

(d) Payments to Administrative Agent.  After any assignment in whole by a Conduit Lender to its Alternate Lenders pursuant to this Section 7.1 at any time on or after its Conduit Investment Termination Date, all payments to be made hereunder by a Borrower Party to Administrative Agent for the benefit of such Conduit Lender shall be made to the account specified by the applicable Managing Agent in writing to the Administrative Agent and the applicable Borrower Party.

 

(e) Recovery of Loans.  In the event that the aggregate of the Assignment Amounts paid by the Alternate Lenders with respect to any Lender Group pursuant to this Section 7.1 on any Assignment Date occurring on or after the Conduit Investment Termination Date for the related Conduit Lender is less than the Loans of such Conduit Lender on such Assignment Date, then to the extent that payments or deposits thereafter received and applied by Administrative Agent with respect to such Lender Group under Section 3.4 in respect of Loans exceed the aggregate of the unrecovered Assignment Amounts and Loans funded by such Alternate Lenders, such excess shall be remitted by Administrative Agent to the related Managing Agent.

 

7.2. Downgrade of Alternate Lender.

 

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(a) Downgrades Generally. If at any time on or prior to the Stated Maturity Date, the short-term debt rating of any Alternate Lender shall be “A-2” or “P-2” from S&P or Moody’s, respectively, with negative credit implications, such Alternate Lender, upon request of the related Managing Agent, shall, within thirty (30) days of such request, assign its rights and obligations hereunder to another financial institution (which institution’s short term debt shall be rated at least “A-2” or “P-2” from S&P or Moody’s, respectively, and which shall not be so rated with negative credit implications and which is acceptable to such Conduit Lender and such Managing Agent).  If the short-term debt rating of such Alternate Lender shall be “A-3” or “P-3”, or lower, from S&P or Moody’s, respectively (or such rating shall have been withdrawn by S&P or Moody’s), such Alternate Lender, upon request of the related Managing Agent, shall, within five (5) Business Days of such request, assign its rights and obligations hereunder to another financial institution (which institution’s short-term debt shall be rated at least “A-2” or “P-2”, from S&P or Moody’s, respectively, and which shall not be so rated with negative credit implications and which is acceptable to such Conduit Lender and such Managing Agent).  In either such case, if any such Alternate Lender shall not have assigned its rights and obligations under this Credit Agreement within the applicable time period described above (in either such case, the “Required Downgrade Assignment Period”), the Administrator on behalf of such Conduit Lender shall have the right to require such Alternate Lender to pay, in Dollars upon one (1) Business Day’s notice at any time after the Required Downgrade Assignment Period (and each such Alternate Lender hereby agrees in such event to pay within such time) to the applicable Managing Agent an amount equal to such Alternate Lender’s unused Commitment (without any deduction therefrom for such Alternate Lender’s share of the Letter of Credit Liability) (a “Downgrade Draw”) for deposit by such Managing Agent into an account, in the name of such Managing Agent (a “Downgrade Collateral Account”), which shall be in satisfaction of such Alternate Lender’s obligations to make Loans and to pay its Assignment Amount upon an assignment from such Conduit Lender in accordance with Section 7.1; provided, however, that if, during the Required Downgrade Assignment Period, such Alternate Lender delivers a written notice to such Managing Agent of its intent to deliver a direct pay irrevocable letter of credit pursuant to this proviso in lieu of the payment required to fund the Downgrade Draw, then such Alternate Lender will not be required to fund such Downgrade Draw.  If any Alternate Lender gives the applicable Managing Agent such notice, then such Alternate Lender shall, within one (1) Business Day after the Required Downgrade Assignment Period, deliver to such Managing Agent a direct pay irrevocable letter of credit in favor of such Managing Agent issued in Dollars, in an amount equal to the unused portion of such Alternate Lender’s Commitment (without any deduction therefrom for such Alternate Lender’s share of the Letter of Credit Liability), which letter of credit shall be issued through a United States office of a bank or other financial institution:  (i) whose short-term debt ratings by S&P and Moody’s are at least equal to the ratings assigned by such statistical rating organization to the Commercial Paper; and (ii) that is acceptable to such Conduit Lender and such Managing Agent.  Such letter of credit shall provide that such Managing Agent may draw thereon for payment of any Loan or Assignment Amount payable by such Alternate Lender which is not paid hereunder when required, shall expire no earlier than the Stated Maturity Date and shall otherwise be in form and substance acceptable to such Managing Agent.  If on any date the amount on deposit in the Downgrade Collateral Account or the maximum stated amount under any letter of credit so provided is less than the applicable Alternate Lender’s share of the unused Commitment, upon one (1) Business Day’s notice, such Alternate Lender will pay the amount of such shortfall to the applicable Managing Agent for deposit into the Downgrade Collateral Account or provide a substitute or additional direct pay irrevocable letter of credit to cover such shortfall.

 

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(b) Application of Funds in Downgrade Collateral Account.  If any Alternate Lender in any Lender Group shall be required pursuant to subsection (a) to fund a Downgrade Draw, then the related Managing Agent shall apply the monies in the Downgrade Collateral Account applicable to such Alternate Lender’s share of Loans required to be made by the related Alternate Lenders, to any Assignment Amount payable by such Alternate Lender pursuant to Section 7.1 at the times, in the manner and subject to the conditions precedent set forth in this Credit Agreement.  The deposit of monies in such Downgrade Collateral Account by any Alternate Lender shall not constitute a Loan or the payment of any Assignment Amount (and such Alternate Lender shall not be entitled to interest on such monies except as provided below in this Section 7.2(b)), unless and until (and then only to the extent that) such monies are used to fund Loans or to pay any Assignment Amount pursuant to this Section 7.2(b).  The amount on deposit in such Downgrade Collateral Account shall be invested by the related Managing Agent in investments selected by such Managing Agent in its sole discretion and eligible in accordance with the applicable conduit program documents.  Such Managing Agent shall remit to such Alternate Lender, on the last Business Day of each month, the interest income actually received thereon.  Unless required to be released as provided below in this subsection, payments or deposits received by such Managing Agent in respect of such Alternate Lender’s portion of the Loans shall be deposited in the Downgrade Collateral Account for such Alternate Lender.  Amounts on deposit in such Downgrade Collateral Account shall be released to such Alternate Lender (or the stated amount of the letter of credit delivered by such Alternate Lender pursuant to subsection (a) above may be reduced) within one (1) Business Day after each Settlement Date following the Maturity Date to the extent that, after giving effect to the distributions made and received by the Lenders on such Settlement Date, the amount on deposit in such Downgrade Collateral Account would exceed the Alternate Lender’s Alternate Lender Pro Rata Share (determined as of the day prior to the Maturity Date) of the sum of all Portions of Loans then funded by the related Conduit Lender, plus the related Interest Component, plus such Alternate Lender’s Pro Rata Share of the Letter of Credit Liability.  All amounts remaining in such Downgrade Collateral Account shall be released to such Alternate Lender no later than the Business Day immediately following the earliest of:  (i) the effective date of any replacement of such Alternate Lender or removal of such Alternate Lender as a party to this Credit Agreement; (ii) the date on which such Alternate Lender shall furnish the related Managing Agent with confirmation that such Alternate Lender shall have short term debt ratings of at least “A-2” or “P-2” from S&P and Moody’s, respectively, without negative credit implications; and (iii) the Stated Maturity Date.  Nothing in this Section 7.2 shall affect or diminish in any way any such downgraded Alternate Lender’s Commitment to Borrower or its related Conduit Lender or such downgraded Alternate Lender’s other obligations and liabilities hereunder and under the other Loan Documents.

 

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(c) Program Support Agreement Downgrade Provisions.  Notwithstanding the other provisions of this Section 7.2, an Alternate Lender shall not be required to make a Downgrade Draw (or provide for the issuance of a letter of credit in lieu thereof) pursuant to Section 7.2(a) at a time when such Alternate Lender has a downgrade collateral account (or letter of credit in lieu thereof) established pursuant to the Program Support Agreement to which it is a party in an amount at least equal to its Commitment, and the related Managing Agent may apply monies in such downgrade collateral account in the manner described in Section 7.2(b) as if such downgrade collateral account were a Downgrade Collateral Account.

 

8. CONDITIONS PRECEDENT TO LENDING

 

8.1. Obligation of Lenders.  The obligation of each Lender and the Letter of Credit Issuer to make the initial Loan and issue the first Letter of Credit hereunder is subject to Administrative Agent’s receipt of the following:

 

(a) Credit Agreement.  This Credit Agreement, duly executed and delivered by Borrower, Managing Member, Guarantor and Pledgor;

 

(b) Notes.  Notes drawn to the order of each Managing Agent, duly executed and delivered by Borrower and Managing Member;

 

(c) Security Agreements.  (i) The Borrower and Managing Member Security Agreement, duly executed and delivered by Borrower and Managing Member and (ii) any other security agreement or related document reasonably requested by Administrative Agent.

 

(d) Capital Contributions Pledge Agreement. (i) The Capital Contributions Pledge Agreement, duly executed and delivered by Pledgor; and (ii) any other similar agreement or related document reasonably requested by Administrative Agent.

 

(e) Guaranty of Capital.  The Guaranty of Capital, duly executed and delivered by Guarantor.

 

(f) Account Documents.  The Account Assignment, duly executed and delivered by Borrower;

 

(g) Financing Statements.

 

(i) searches of Uniform Commercial Code (“UCC”) filings in each jurisdiction where a filing has been or would need to be made in order to perfect the Administrative Agent’s security interest on behalf of the Secured Parties in the Collateral, copies of the financing statements on file in such jurisdictions and evidence that no Liens exist, or, if necessary, copies of proper financing statements, if any, filed on or before the date hereof necessary to terminate all security interests and other rights of any Person in any Collateral previously granted; and

 

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(ii) duly authorized UCC financing statements and any amendments thereto, for each appropriate jurisdiction as is necessary, in the Administrative Agent’s sole discretion, to perfect the Administrative Agent’s security interest on behalf of the Secured Parties in the Collateral;

 

(h) Responsible Officer Certificates.  A certificate from a Responsible Officer of each Credit Party, stating that:  (i) all of the representations and warranties contained in Section 9 hereof and the other Loan Documents made by such Credit Party are true and correct in all material respects as of such date (except to the extent of changes in facts or circumstances that have been disclosed to Lenders and do not constitute an Event of Default or, to its knowledge, a Potential Default under this Credit Agreement or any other Loan Document); and (ii) no event has occurred and is continuing, or would result from the Borrowing or issuance of the Letters of Credit, as applicable, which constitutes an Event of Default or, to its knowledge, a Potential Default;

 

(i) Borrower’s Operating Agreement.  A signed certificate of a Responsible Officer of Borrower who shall certify that attached thereto is a true and complete copy of the Operating Agreement of Borrower as in effect on the date hereof, together with certificates of existence and good standing (or other similar instruments) of Borrower as in effect on the date hereof;

 

(j) Managing Member’s Formation Documents.  A signed certificate of a Responsible Officer of Managing Member who shall certify that attached thereto are true and complete copies of the Constituent Documents of Managing Member, together with certificates of existence and good standing (or other similar instruments) of Managing Member as in effect on the date hereof;

 

(k) Guarantor’s Formation Documents.  A signed certificate of a Responsible Officer of Guarantor who shall certify that attached thereto are true and complete copies of the Constituent Documents of Guarantor together with certificates of existence and good standing (or other similar instruments) of Guarantor as in effect on the date hereof;

 

(l) Pledgor’s Formation Documents.  A signed certificate of a Responsible Officer of Pledgor who shall certify that attached thereto are true and complete copies of the Constituent Documents of Pledgor together with certificates of existence and good standing (or other similar instruments) of Pledgor as in effect on the date hereof;

 

(m) Incumbency Certificate. From each Credit Party, a signed certificate of a Responsible Officer, who shall certify the names of the Persons authorized, on the date hereof, to sign each of the Loan Documents and the other documents or certificates to be delivered pursuant to the Loan Documents on behalf of such Credit Party, together with the true signatures of each such Person.  Administrative Agent may conclusively rely on such certificate until it shall receive a further certificate canceling or amending the prior certificate and submitting the signatures of the Persons named in such further certificate;

 

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(n) Opinions of Counsel.  (i) A favorable opinion of Robert Masters, Senior Vice President and General Counsel of each Credit Party, as counsel to each Credit Party; (ii) a favorable opinion of Berliner, Corcoran & Rowe, L.L.P., Maryland counsel to the Pledgor; and (iii) an opinion of Mayer Brown LLP, special counsel to the Administrative Agent; each covering such matters relating to the transactions contemplated hereby as reasonably requested by Administrative Agent, and substantially in a form acceptable to Administrative Agent;

 

(o) ERISA Certificate.  A certificate from a Responsible Officer of the Credit Parties confirming that the assets of the Credit Parties do not constitute plan assets by reason of the fact that participation in the Credit Parties by “benefit plan investors” is not “significant”, as such terms are defined in the Plan Asset Regulations;

 

(p) Investor Documents.  Administrative Agent shall have received from each Included Investor and Designated Investor: (i) a duly executed Investor Letter; (ii) a copy of such Investor’s duly executed signature page to the Operating Agreement or Stockholders Agreement, as applicable; and (iii) to the extent requested by Administrative Agent, true and complete copies of the organizational documents of each Investor, or other documentation in lieu thereof that is acceptable to Administrative Agent in its sole discretion.  Administrative Agent may waive one or more of the foregoing requirements with respect to Designated Investors so long as Borrowers have made good faith efforts to obtain the same without success;

 

(q) Fees; Costs and Expenses.  Payment of all fees and other amounts due and payable on or prior to the date hereof, including pursuant to the Fee Letter, and, to the extent invoiced, reimbursement or payment of all reasonable expenses required to be reimbursed or paid by Borrower hereunder, including the fees and disbursements invoiced through the date hereof of Administrative Agent’s special counsel, Mayer Brown LLP;

 

(r) Advisory Committee Required Vote.  Written evidence in form reasonably satisfactory to the Administrative Agent that the Advisory Committee (as defined in the Operating Agreement) has approved the Loans and Letters of Credit contemplated by this Credit Agreement and the other Loan Documents as contemplated in Section 4.1(b) of the Operating Agreement; and

 

(s) Additional Information.  Such other information and documents as may reasonably be required by Administrative Agent and its counsel, including any “Know Your Customer” procedures as reasonably requested by the Lenders.

 

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8.2. Qualified Borrower Loans and Letters of Credit.  The obligation of Lenders to advance a Loan to a Qualified Borrower or to cause the issuance of a Letter of Credit for a Qualified Borrower is subject to the conditions that:

 

(a) Qualified Borrower Promissory Note.  Administrative Agent shall have received a duly executed Qualified Borrower Promissory Note or Qualified Borrower Letter of Credit Note, as applicable, complying with the terms and provisions hereof;

 

(b) Authorizations of Qualified Borrower.  Administrative Agent shall have received from the Qualified Borrower appropriate evidence of the authorization of the Qualified Borrower approving the execution, delivery and performance of the Qualified Borrower Promissory Note or the Qualified Borrower Letter of Credit Note, duly adopted by Qualified Borrower, as required by law or agreement, and accompanied by a certificate of an authorized Person of such Qualified Borrower stating that such authorizations are true and correct, have not been altered or repealed and are in full force and effect;

 

(c) Incumbency Certificate.  Administrative Agent shall have received from the Qualified Borrower a signed certificate of the appropriate Responsible Officer of the Qualified Borrower which shall certify the names of the Persons authorized to sign the Qualified Borrower Promissory Note and the other documents or certificates to be delivered pursuant to the terms hereof by such Qualified Borrower, together with the true signatures of each such Person;

 

(d) Borrower Guaranty.  Administrative Agent shall have received from Borrower a duly executed Borrower Guaranty complying with the terms and provisions hereof;

 

(e) Opinion of Counsel to Qualified Borrower.  Administrative Agent shall have received a favorable opinion of counsel for the Qualified Borrower, in form and substance satisfactory to Administrative Agent and addressed to Administrative Agent, that:  (i) the Qualified Borrower is duly organized and validly existing under the laws of the jurisdiction of its formation; (ii) the subject Qualified Borrower Note has been duly authorized, executed and delivered by the Qualified Borrower; (iii) the subject Qualified Borrower Note is a valid and binding obligation and agreement of such Qualified Borrower, enforceable in accordance with its terms, except to the extent that it may be limited by bankruptcy, insolvency, moratorium and other laws affecting creditors’ rights generally, by general equitable principles; and (iv) neither the execution nor delivery by Qualified Borrower of the subject Qualified Borrower Note, and, if applicable, the Application and Agreement for Letter of Credit, the performance by such Qualified Borrower of its obligations thereunder, nor the compliance by Qualified Borrower with the terms and provisions thereof, will:  (A) contravene any provision of the general corporate law, or, if Qualified Borrower is a partnership or another type of entity, the Managing Membership law or applicable law governing such entity, of the jurisdiction of formation of such Qualified Borrower, or the laws, statutes, rules or regulations of the State of New York or the United States of America to which Qualified Borrower is subject, or conflict with, or result in any breach of, any material agreement, mortgage, indenture, deed of trust or other instrument known to counsel to which Qualified Borrower or its properties may be subject, or result in the creation of any mortgage, lien, pledge or encumbrance in respect of any properties of Qualified Borrower; (B) contravene any judgment, decree, license, order or permit applicable to Qualified Borrower; or (C) violate any provision of the organizational documents of Qualified Borrower.  Each Qualified Borrower hereby directs its counsel to prepare and deliver such legal opinion to Administrative Agent for the benefit of Lenders.

 

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8.3. All Loans and Letters of Credit.  The obligation of Lenders to advance each Borrowing or the Letter of Credit Issuer to issue Letters of Credit hereunder is subject to the conditions that:

 

(a) Representations and Warranties.  The representations and warranties set forth in Section 9 hereof are true and correct in all material respects on and as of the date of the advance of such Borrowing or issuance of such Letter of Credit, with the same force and effect as if made on and as of such date (except to the extent of changes in facts or circumstances that have been disclosed to Lenders and do not constitute an Event of Default or a Potential Default under this Credit Agreement or any other Loan Document);

 

(b) No Default.  No event shall have occurred and be continuing, or would result from the Borrowing or the issuance of the Letter of Credit, which constitutes an Event of Default or a Potential Default;

 

(c) Loan Notice.  Administrative Agent shall have received a Loan Notice or Request for Letter of Credit;

 

(d) Application.  In the case of a Letter of Credit, the Letter of Credit Issuer shall have received an Application and Agreement for Letter of Credit executed by Borrower or the applicable Qualified Borrower and shall have countersigned the same; and

 

(e) Material Adverse Effect.  No Material Adverse Effect has occurred and is continuing.

 

9. REPRESENTATIONS AND WARRANTIES.  To induce Lenders to make the Loans and cause the issuance of Letters of Credit hereunder, each Credit Party represents and warrants to Lenders as to itself that:

 

9.1. Organization and Good Standing of Borrower.  Borrower is a limited liability company duly organized and validly existing under the laws of the State of Delaware, has the requisite limited liability company power and authority to own its properties and assets and to carry on its business as now conducted, and is qualified to do business in each jurisdiction where the nature of the business conducted or the property owned or leased requires such qualification or where the failure to be so qualified to do business would have a Material Adverse Effect.

 

9.2. Organization and Good Standing of Managing Member.  Managing Member is a limited liability company duly organized and validly existing under the laws of the State of Delaware, has the requisite limited liability company power and authority to own its properties and assets and to carry on its business as now conducted, and is qualified to do business in each jurisdiction where the nature of the business conducted or the property owned or leased requires such qualification or where the failure to be so qualified to do business would have a Material Adverse Effect.

 

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9.3. Organization and Good Standing of Guarantor.  Guarantor is a limited partnership duly organized and validly existing under the laws of the State of Delaware, has the requisite limited partnership power and authority to own its properties and assets and to carry on its business as now conducted, and is qualified to do business in each jurisdiction where the nature of the business conducted or the property owned or leased requires such qualification or where the failure to be so qualified to do business would have a Material Adverse Effect.

 

9.4. Organization and Good Standing of Pledgor.  Pledgor is a corporation incorporated and validly existing under the laws of the State of Maryland, has the requisite corporate power and authority to own its properties and assets and to carry on its business as now conducted, and is qualified to do business in each jurisdiction where the nature of the business conducted or the property owned or leased requires such qualification or where the failure to be so qualified to do business would have a Material Adverse Effect.

 

9.5. Authorization and Power.  It has the partnership, limited liability company or corporate power, as applicable, and requisite authority to execute, deliver, and perform its respective obligations under this Credit Agreement, the Notes, and the other Loan Documents to be executed by it.  It is duly authorized to, and has taken all partnership, limited liability company and corporate action, as applicable, necessary to authorize it to execute, deliver, and perform its respective obligations under this Credit Agreement, the Notes, and such other Loan Documents and is and will continue to be duly authorized to perform its respective obligations under this Credit Agreement, the Notes, and such other Loan Documents.

 

9.6. No Conflicts or Consents.  None of the execution and delivery of this Credit Agreement, the Notes, or the other Loan Documents, the consummation of any of the transactions herein or therein contemplated, or the compliance with the terms and provisions hereof or with the terms and provisions thereof, will contravene or conflict, in any material respect, with any provision of law, statute, or regulation to which it is subject or any judgment, license, order, or permit applicable to it or any indenture, mortgage, deed of trust, or other agreement or instrument to which it is a party or by which it may be bound, or to which it may be subject.  No consent, approval, authorization, or order of any court or Governmental Authority or third party is required in connection with the execution and delivery by it of the Loan Documents to which it is a party or to consummate the transactions contemplated hereby or thereby except for those that have been obtained.

 

9.7. Enforceable Obligations.  This Credit Agreement, the Notes and the other Loan Documents to which it is a party are the legal and binding obligations of it, enforceable in accordance with their respective terms, subject to Debtor Relief Laws and equitable principles.

 

9.8. Priority of Liens.  The Collateral Documents create, as security for the Obligations, valid and enforceable, exclusive, first priority security interests in and Liens on all of the Collateral in which it has any right, title or interest, in favor of Administrative Agent for the benefit of the Secured Parties, subject to no other Liens, except as enforceability may be limited by Debtor Relief Laws and equitable principles.  Such security interests in and Liens on the Collateral in which it has any right, title, or interest shall be superior to and prior to the rights of all third parties in such Collateral, and, other than in connection with any future change in its name, identity or structure, or the location of its chief executive office, no further recordings or filings are or will be required in connection with the creation, perfection or enforcement of such security interests and Liens, other than the filing of continuation statements in accordance with applicable law.  Each Lien referred to in this Section 9.7 is and shall be the sole and exclusive Lien on the Collateral in which it has any right, title or interest.

 

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9.9. Financial Condition.  Each Borrower Party has delivered to Administrative Agent: (a) the most-recently available copies of the financial statements and reports described in Section 10.1; or, with respect to such requirement on the Closing Date, if such statements and reports are not then available (b) a pro forma balance sheet as of the Closing Date; in each case certified as true and correct in all material respects by a Responsible Officer of such Borrower Party.  Such statements fairly present, in all material respects, the financial condition of such Borrower Party as of the applicable date of delivery, and have been prepared in accordance with GAAP, except as provided therein.

 

9.10. Full Disclosure.  There is no material fact that any Credit Party has not disclosed to Administrative Agent in writing which would reasonably be expected to result in a Material Adverse Effect.  No information heretofore furnished by any Credit Party in connection with this Credit Agreement, the other Loan Documents or any transaction contemplated hereby or thereby contains any untrue statement of a material fact that would reasonably be expected to result in a Material Adverse Effect.

 

9.11. No Default.  No event has occurred and is continuing which constitutes an Event of Default or a Potential Default.

 

9.12. No Litigation.  There are no actions, suits, investigations or legal, equitable, arbitration or administrative proceedings pending, or to the knowledge of a Responsible Officer of it, threatened, against such Credit Party that would reasonably be expected to result in a Material Adverse Effect.

 

9.13. Material Adverse Change.  No changes to it have occurred since the date of its most recent financial statements delivered to Lenders which would reasonably be expected to result in a Material Adverse Effect.

 

9.14. Taxes.  To the extent that failure to do so would have a Material Adverse Effect, all tax returns required to be filed by it in any jurisdiction have been filed and all taxes, assessments, fees, and other governmental charges upon it or upon any of its respective properties, income or franchises have been paid prior to the time that such taxes could give rise to a lien thereon.  There is no proposed tax assessment against it or any basis for such assessment which is material and is not being contested in good faith.

 

9.15. Jurisdiction of Formation; Principal Office.  (a) The jurisdiction of formation of Borrower is Delaware; (b) the jurisdiction of formation of Managing Member is Delaware; (c) the jurisdiction of formation of Guarantor is Delaware; and (d) the jurisdiction of formation of Pledgor is Maryland.

 

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9.16. ERISA Compliance.  It has not established nor does it maintain any Plan.  (a) Each of Credit Party and Guarantor is an Operating Company; or (b) the underlying assets of each Credit Party do not otherwise constitute Plan Assets.

 

9.17. Compliance with Law.  It is, to the best of its knowledge, in compliance in all material respects with all material laws, rules, regulations, orders, and decrees which are applicable to it or its properties, including, without limitation, Environmental Laws.

 

9.18. Hazardous Substances.  To the knowledge of its Responsible Officers, it: (a) has not received any notice or other communication or otherwise learned of any Environmental Liability which would individually or in the aggregate reasonably be expected to have a Material Adverse Effect arising in connection with: (i) any non-compliance with or violation of the requirements of any Environmental Law by any Credit Party, or any permit issued under any Environmental Law to such Credit Party; or (ii) the Release or threatened Release of any Hazardous Material into the environment; and (b) to its knowledge, has threatened or actual liability in connection with the Release or threatened Release of any Hazardous Material into the environment which would individually or in the aggregate reasonably be expected to have a Material Adverse Effect.

 

9.19. Insider.  It is not an “executive officer,” “director,” or “person who directly or indirectly or acting through or in concert with one or more persons owns, controls, or has the power to vote more than 10% of any class of voting securities” (as those terms are defined in 12 U.S.C. §375b or in regulations promulgated pursuant thereto) of any Lender, of a bank holding company of which any Lender is a subsidiary, or of any subsidiary, of a bank holding company of which any Lender is a subsidiary, of any bank at which any Lender maintains a correspondent account, or of any bank which maintains a correspondent account with any Lender.

 

9.20. Properties.  Each Credit Party has good title to, or valid leasehold interests in, all its real and personal property material to its business, except for any defects that, individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect.  Each Credit Party owns, or is licensed to use, all trademarks, tradenames, copyrights, patents and other intellectual property material to its business, and the use thereof by such Credit Party and its subsidiaries does not infringe upon the rights of any other Person, except for any such infringements that, individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect.

 

9.21. Operating Structure.  As of the date hereof, the sole Managing Member of Borrower is Managing Member.  The only members of Borrower and the only Stockholders of Pledgor are set forth on Exhibit A attached hereto and incorporated herein by reference (or on a revised Exhibit A delivered to Administrative Agent in accordance with Section 11.5 hereof), and the Capital Commitment of each Investor is set forth on Exhibit A (or on such revised Exhibit A).

 

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9.22. Capital Commitments and Contributions.  The aggregate amount of the Unfunded Capital Commitments of all Investors as of the date hereof is as set forth on Exhibit A.  The aggregate amount of the Unfunded Capital Commitments of all Included Investors and Designed Investors (separately) as of the date hereof is as set forth on Exhibit A.  There are no Capital Call Notices outstanding except as otherwise disclosed in writing to Administrative Agent.  To its knowledge, no Investor is in default under the Operating Agreement, Partnership Agreement or Stockholders Agreement, as applicable.  Prior to the date hereof, each Credit Party has satisfied all conditions to its rights to make a Capital Call, including any and all conditions contained in its Constituent Documents.

 

9.23. Fiscal Year.  Its fiscal year is the calendar year.

 

9.24. Investment Company Act.  It is not required to register as an “investment company” within the meaning of the Investment Company Act of 1940, as amended.

 

9.25. Margin Stock.  It is not engaged in the business of extending credit for the purpose of purchasing or carrying Margin Stock, and no proceeds of any Loan or Letter of Credit will be used: (a) to purchase or carry any Margin Stock or to extend credit to others for the purpose of purchasing or carrying any Margin Stock; (b) to reduce or retire any indebtedness which was originally incurred to purchase or carry any such Margin Stock; or (c) for any other purpose which might constitute this transaction a “purpose credit” within the meaning of Regulation T, U, or X.  Neither it nor any Person acting on its behalf has taken or will take any action which might cause any Loan Document to violate Regulation T, U or X or any other regulation of the Board of Governors of the Federal Reserve System or to violate Section 7 of the Securities Exchange Act, in each case as now in effect or as the same may hereafter be in effect.

 

9.26. Foreign Asset Control Laws.  Neither it nor any Affiliate thereof, and no Investor or, to its knowledge, Affiliate thereof, is a Person named on a list published by the Office of Foreign Assets Control (“OFAC”) of the United States Treasury Department or is a Person with whom dealings are prohibited under any OFAC regulations.  To its knowledge, no Investor’s funds used in connection with this transaction are derived from illegal or suspicious activities.

 

9.27. Brokers’ Fees.  No Credit Party has dealt with any broker or finder with respect to the transactions contemplated by the Loan Documents or otherwise in connection with the Loan Documents.

 

9.28. Solvency.  Each Credit Party is, and after consummation of the transactions contemplated by the Loan Documents will be, Solvent.

 

9.29. Managing Member Representation.  Managing Member has received direct or indirect benefit from the Loans and Letters of Credit evidenced by the Obligations and the grant of the security interest in the collateral was a condition to granting such Loans and issuance of such Letters of Credit.

 

9.30. Guarantor Representation.  Guarantor has received direct or indirect benefit from the Loans and Letters of Credit evidenced by the Obligations and the grant of the security interest in the collateral was a condition to granting such Loans and issuance of such Letters of Credit.

 

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9.31. Pledgor Representation.  Pledgor has received direct or indirect benefit from the Loans and Letters of Credit evidenced by the Obligations and the grant of the security interest in the Collateral was a condition to granting such Loans and issuance of such Letters of Credit.

 

9.32. Investments.  No investments made by any Credit Party or their subsidiaries, directly or indirectly, are in violation of, or would cause a default under, the terms of the Operating Agreement, the Partnership Agreement or the Stockholders Agreement.

 

9.33. Investor Documents.  To the knowledge of each Credit Party after commercially reasonable inquiry, each Investor Letter and Stockholders Agreement, as applicable, have been duly authorized and executed by each Investor and constitute the legal, valid and binding obligations of each Investor, enforceable against each Investor in accordance with their terms.

 

9.34. Advisory Committee.  The Credit Parties confirm that the members of the Advisory Committee (as defined in the Operating Agreement) as of the date hereof are Alan Forman, Verna Kuo, Susan Meaney, Denise Strack and Laudan Nabizadeh.

 

10. AFFIRMATIVE COVENANTS.  So long as Lenders have any commitment to lend hereunder or the Letter of Credit Issuer has any obligation to cause the issuance of any Letters of Credit hereunder, and until payment in full of the Notes and the performance in full of the Obligations under this Credit Agreement and the other Loan Documents, Borrower and each other Credit Party, as applicable, each agrees that, unless Administrative Agent shall otherwise consent in writing based upon the approval of the Required Lenders (unless the approval of Administrative Agent alone or a different number of Lenders is expressly permitted below):

 

10.1. Financial Statements, Reports and Notices.  Borrower shall deliver to Administrative Agent sufficient copies for each Lender of the following:

 

(a) Annual Statements.  As soon as reasonably available and in any event within one hundred twenty (120) days after the end of each fiscal year of Borrower, audited, unqualified financial statements of Borrower, including a consolidated balance sheet of Borrower and its consolidated subsidiaries as of the end of such fiscal year and the related consolidated statements of operations for such fiscal year prepared by independent public accountants of nationally recognized standing;

 

(b) Quarterly Statements.  As soon as available and in any event within sixty (60) days after the end of each quarter of each fiscal year of Borrower, an unaudited consolidated balance sheet of Borrower and its consolidated subsidiaries as of the end of such quarter and the related unaudited consolidated statements of operations for such quarter;

 

(c) Borrowing Base Certificate.  Concurrently with the delivery of each Loan Notice or Request for Letter of Credit and each annual and quarterly report referenced in Sections 10.1(a) and 10.1(b) hereof, and as of the last calendar day of any calendar month when no Borrowing has been made during such calendar month, a Borrowing Base Certificate signed by a Responsible Officer of Borrower and Managing Member: (i) setting forth the Capital Contributions and Unfunded Capital Commitments of all of the Investors and a calculation of the Available Loan Amount (all as of the end of the relevant period); (ii) specifying changes, if any, in the names of Investors; and (iii) listing Investors who have not delivered Investor Letters or with respect to Subsequent Investors, who have not satisfied the conditions of Section 11.5(c) hereof;

 

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(d) Compliance Certificate.  Simultaneously with the delivery of the reports described in clauses (a) and (b) above, a compliance certificate (a “Compliance Certificate”), certified by a Responsible Officer of Borrower to be true and correct, substantially in the form of Exhibit O attached hereto (with blanks appropriately completed in conformity herewith): (i) stating that such officer is familiar with the terms and provisions of the Loan Documents; (ii) certifying that such financial statements fairly present the financial condition and the results of operations of the Borrower on the dates and for the periods indicated, on the basis of GAAP, subject, in the case of interim financial statements, to normally recurring year-end adjustments; (iii) stating that the Borrowers are in compliance with all covenants in Section 10 hereof, including the covenants set forth in Section 10.11, and containing the calculations evidencing such compliance; (iv) stating whether any Event of Default or Potential Default exists on the date of such certificate and, if any Event of Default or Potential Default then exists, setting forth the details thereof and the action which the Credit Parties are taking or propose to take with respect thereto; (v) setting forth the Unfunded Capital Commitments of all Investors (breaking out Included Investors and Designated Investors) and a calculation of the Available Loan Amount (all as of the end of the relevant period); (vi) specifying changes, if any, in the name of any Investor or in the identity of any Investor, by merger or otherwise; and (vii) listing Investors which have been subject to an Exclusion Event.

 

(e) ERISA Notices.  Promptly upon any Credit Party obtaining knowledge or a reasonable belief that its assets are, or are about to become, Plan Assets, such Credit Party shall deliver written notice thereof to Administrative Agent (an “ERISA Event Notice”), and shall, in such notice, or in subsequent written notices as events develop, notify Administrative Agent of any actions contemplated by in connection therewith.  Each Credit Party shall, simultaneously with the delivery of any ERISA Notice to any Investors, deliver a copy of the same to Administrative Agent;

 

(f) ERISA Certification.  Annually (to be delivered within forty-five (45) days following each annual valuation period of the Credit Parties and with the Compliance Certificate of Borrower pursuant to Section 10.1(d)), a certification from a Responsible Officer of the Credit Parties prepared in consultation with counsel that the assets of the Credit Parties do not constitute Plan Assets;

 

(g) Reporting Relating to Investors.  Promptly upon the receipt thereof, copies of all financial statements, notices of default, notices relating in any way to an Investor’s funding obligation and notices containing any reference to misconduct of any Credit Party, sent to or received by a Borrower and/or any Credit Party from an Investor; and

 

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(h) Other Reporting.  Simultaneously with delivery to the Investors, copies of all other material financial statements, appraisal reports, notices, and other matters at any time or from time to time prepared by a Credit Party and furnished to the Investors, including, without limitation, any notice of default, notice of election or exercise of any rights or remedies under the Operating Agreement, the Partnership Agreement, the Stockholders Agreement, the Investor Letters or the Constituent Documents of any Credit Party, or any notices relating in any way to any Investor’s Capital Commitment, and any notice relating in any way to the misconduct of any Credit Party.

 

10.2. Payment of Taxes.  Each Credit Party will pay and discharge all taxes, assessments, and governmental charges or levies imposed upon it, upon its income or profits, or upon any property belonging to it before delinquent, if such failure would have a Material Adverse Effect; provided, however, that no Credit Party shall be required to pay any such tax, assessment, charge, or levy if and so long as the amount, applicability, or validity thereof shall currently be contested in good faith by appropriate proceedings and appropriate reserves therefor have been established.

 

10.3. Maintenance of Existence and Rights.  Each Credit Party will preserve and maintain its existence.  Each Credit Party shall further preserve and maintain all of its rights, privileges, and franchises necessary in the normal conduct of its business and in accordance with all valid regulations and orders of any Governmental Authority the failure of which would have a Material Adverse Effect.

 

10.4. Notice of Default.  Each Credit Party will furnish to Administrative Agent, promptly upon becoming aware of the existence of any condition or event which constitutes an Event of Default or a Potential Default (including, without limitation, notice from the Investors of any Credit Party that the Investors intend to seek a “Cause Event” as defined in the Operating Agreement, Partnership Agreement and Stockholders Agreement, a written notice specifying the nature and period of existence thereof and the action which the Credit Parties are taking or propose to take with respect thereto.  Each Credit Party shall promptly notify Administrative Agent in writing upon becoming aware: (a) that any Investor has violated or breached any material term of the Operating Agreement, Partnership Agreement or Stockholders Agreement, as applicable, or has become a Defaulting Investor; or (b) of the existence of any condition or event which, with the lapse of time or giving of notice or both, would cause an Investor to become a Defaulting Investor.

 

10.5. Other Notices.  Each Credit Party will, promptly upon receipt of actual knowledge thereof by a Responsible Officer, notify Administrative Agent of any of the following events that would reasonably be expected to result in a Material Adverse Effect: (a) any change in the financial condition or business of such Credit Party; (b) any default by such Credit Party under any material agreement, contract, or other instrument to which such Credit Party is a party or by which any of its properties are bound, or any acceleration of the maturity of any material indebtedness owing by such Credit Party; (c) any uninsured claim against or affecting such Credit Party or any of its properties; (d) the commencement of, and any material determination in, any litigation with any third party or any proceeding before any Governmental Authority affecting such Credit Party; (e) any Environmental Complaint or any claim, demand, action, event, condition, report or investigation indicating any potential or actual liability of such Credit Party arising in connection with: (i) the non-compliance with or violation of the requirements of any Environmental Law or any permit issued under any Environmental Law; or (ii) the Release or threatened Release of any Hazardous Material into the environment; (f) the existence of any Environmental Lien on any Properties or assets of such Credit Party; (g) any material remedial action taken by any Credit Party in response to any order, consent decree or judgment of any Governmental Authority or any Environmental Liability; or (h) the listing of any of such Credit Party’s Properties on CERCLIS to the extent that such Credit Party obtains knowledge of such listing, whether or not such listing would reasonably be expected to result in a Material Adverse Effect.

 

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10.6. Compliance with Loan Documents, Operating Agreement, Partnership Agreement and Stockholders Agreement.  Unless otherwise approved in accordance with the terms of this Credit Agreement (which approval, by such terms, may require more or fewer Lenders than the Required Lenders), each Credit Party will promptly comply with any and all covenants and provisions of this Credit Agreement, the Notes, and all of the other Loan Documents executed by it.  Each Borrower Party will use the proceeds of any Capital Call Notices only for such purposes as are permitted by its Constituent Documents.

 

10.7. Books and Records; Access.  Each Credit Party will give any representative of Administrative Agent, Managing Agent or Lenders, or any of them, reasonable access during all business hours to, and permit representatives to examine, copy, or make excerpts from, any and all books, records, and documents in the possession of such Credit Party and relating to its affairs, and to inspect any of the properties of such Credit Party.

 

10.8. Compliance with Law.  Each Credit Party will comply in all material respects with all material laws, rules, regulations, and all orders of any Governmental Authority, including, Environmental Laws and ERISA.

 

10.9. Insurance.  Each Credit Party will maintain workmen’s compensation insurance, liability insurance, and insurance on its present and future properties, assets, and business against such casualties, risks, and contingencies, and in such types and amounts, as are consistent with customary practices and standards of their industry and the failure of which to maintain could have a Material Adverse Effect.

 

10.10. Authorizations and Approvals.  Each Credit Party will promptly obtain, from time to time at its own expense, all such governmental licenses, authorizations, consents, permits and approvals as may be required to enable such Credit Party to comply with its respective obligations hereunder, under the other Loan Documents, the Operating Agreement, the Partnership Agreement, the Stockholders Agreement and its respective Constituent Documents.

 

10.11. Maintenance of Liens.  Each Credit Party shall perform all such acts and execute all such documents as Administrative Agent may reasonably request in order to enable the Secured Parties to report, file, and record every instrument that Administrative Agent may deem necessary in order to perfect and maintain the Secured Parties’ Liens and security interests in the Collateral and otherwise to preserve and protect the rights of Secured Parties under the Collateral Documents.

 

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10.12. Further Assurances.  Each Credit Party will make, execute or endorse, and acknowledge and deliver or file or cause the same to be done, all such vouchers, invoices, notices, certifications, and additional agreements, undertakings, conveyances, transfers, assignments, financing statements, or other assurances, and take any and all such other action, as Administrative Agent may, from time to time, reasonably deem necessary in connection with this Credit Agreement or any of the other Loan Documents, the obligations of the Credit Parties hereunder or thereunder, or for better assuring and confirming unto Secured Parties all or any part of the security for any of such obligations anticipated herein.

 

10.13. Investor Financial and Rating Information.  Each Credit Party shall request, from each Investor (without duplication), financial information required under the applicable Investor Letter, as agreed from time to time with Administrative Agent, and shall, upon receipt of such information, promptly deliver same to Administrative Agent, or shall promptly notify Administrative Agent of its failure to timely obtain such information.  The Credit Parties will promptly notify Administrative Agent in writing (but in no event later than five (5) Business Days) after: (a) becoming aware of: (i) any decline in the Rating of any Included Investor, or decline in the capital status of any Included Investor that is a bank holding company, whether or not such change results in an Exclusion Event and (ii) any other Exclusion Event; and (b) becoming aware of the existence of any condition or event which, with the lapse of time or giving of notice or both, would cause an Exclusion Event.

 

10.14. Certain Included Investor Requirements.  In addition to the other requirements of this Credit Agreement, each Included Investor that is: (i) organized under the laws of any jurisdiction other than the United States of America or any state thereof shall deliver to Administrative Agent a written submission to the jurisdiction of a United States Federal District Court and a United States state court with respect to any litigation arising out of or in connection with its Investor Letter or any Constituent Document of any Credit Party (each submission to be in form and substance reasonably satisfactory to Administrative Agent, including provisions relating to waiver of venue, waiver of defense of inconvenient forum, and consent to service of process; or (ii) a Governmental Authority or an instrumentality of a Governmental Authority or majority-owned by a Governmental Authority or otherwise entitled to any immunity in respect of any litigation in any jurisdiction, court or venue, shall deliver to Administrative Agent a written waiver (in form and substance reasonably satisfactory to Administrative Agent) of any such claim of immunity.

 

10.15. Covenants of Qualified Borrowers.  The covenants and agreements of Qualified Borrowers hereunder shall be binding and effective only upon and after the execution and delivery of a Qualified Borrower Note by such Qualified Borrower.

 

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11. NEGATIVE COVENANTS. So long as Lenders have any commitment to lend hereunder or the Letter of Credit Issuer has any obligation to cause the issuance of any Letter of Credit hereunder, and until payment and performance in full of the Obligations under this Credit Agreement and the other Loan Documents, each Credit Party agrees that, without the written consent of Administrative Agent, based upon the approval of Required Lenders (unless the approval of Administrative Agent alone or a different number of Lenders is expressly permitted below):

 

11.1. Mergers.  No Credit Party will merge or consolidate with or into any Person, unless such Credit Party is the surviving entity; provided, however, that any such merger (a) must be duly authorized under the Constituent Documents of the applicable Credit Party or the applicable managing member or general partner, as applicable, and (b) must not adversely affect the enforceability of the Capital Commitments and the Investor Letters of the Investors in the applicable Credit Party.  No Credit Party will take any action to dissolve, terminate, or liquidate, including, without limitation, any action to sell or dispose of all or substantially all of its property..

 

11.2. Negative Pledge.  Without the approval of all Lenders, no Credit Party will create or suffer to exist any Lien upon the Collateral, other than the first priority security interest in and upon the Collateral (or any portion thereof) to Administrative Agent for the benefit of the Secured Parties.

 

11.3. Fiscal Year and Accounting Method.  Without the prior written consent of Administrative Agent alone (such approval not to be unreasonably withheld or delayed), no Credit Party will change its fiscal year or method of accounting.

 

11.4. Constituent Documents.  Without the prior written consent of Administrative Agent consistent with this Section 11.4, no Credit Party shall alter, amend, modify, terminate, or change any provision of its Constituent Documents affecting such Credit Party’s or the Investors’ debts, duties, obligations, and liabilities, and the rights, titles, security interests, liens, powers and privileges of any Credit Party, Administrative Agent or Secured Parties, in each case relating to this Agreement, the Obligations, Capital Call Notices, Capital Commitments, Capital Contributions or Unfunded Capital Commitments; or amend the terms of Articles V or XI  of the Operating Agreement or Section 6 of the Stockholders Agreement (or comparable provisions regarding leverage) (each an “adverse amendment”); or suspend, reduce, excuse or terminate any Investor’s Unfunded Commitments.  With respect to any proposed amendment, modification or change to any Constituent Document, the applicable Credit Party shall notify Administrative Agent of such proposal.  Administrative Agent shall determine, in its sole discretion (that is, the determination of the Lenders shall not be required) on Administrative Agent’s good faith belief, whether such proposed amendment, modification or change to such Constituent Document is an adverse amendment, and shall use reasonable efforts to notify such Credit Party of its determination within five (5) Business Days of the date on which it received such notification pursuant to Section 14.7.  If Administrative Agent determines that the proposed amendment is an adverse amendment, the approval of the Required Lenders and Administrative Agent will be required (unless the approval of all Lenders is required consistent with the terms of Section 11.6), and Administrative Agent shall promptly notify the Lenders of such request for such approval, distributing, as appropriate, the proposed amendment and any other relevant information provided by such Credit Party, to which the Lenders will respond to within ten (10) Business Days.  If Administrative Agent determines that the proposed amendment is not an adverse amendment, such Credit Party may make such amendment without the consent of Lenders.  Notwithstanding the foregoing, without the consent of Administrative Agent or the Lenders, such Credit Party may amend its Constituent Documents: (i) to admit new Investors to the extent permitted by this Credit Agreement; and (ii) to reflect transfers of interests permitted by this Credit Agreement.

 

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11.5. Transfer by, or Admission of, Investors.

 

(a) Transfer of Equity Interest.  Any transfer of an Equity Interest: (i) by any Investor to any of its affiliates shall be made with prior written notice to Administrative Agent promptly upon any Credit Party being aware of such proposed transfer; and (ii) by any Investor to any other Person, with prior written notice to Administrative Agent at least twenty (20) Business Days prior to the proposed date of transfer, in each case provided that the transferee is not named on a list published by OFAC.  In the event that the applicable transferee does not itself qualify as an Included Investor or Designated Investor or if the consummation of such transfer would require a mandatory prepayment pursuant to Section 2.1(d) for any reason, the Credit Parties will issue Capital Call Notices in an amount sufficient to cure such Implicit Borrowing Base Deficit and will pay the mandatory prepayment prior to permitting the consummation of any such transfer.

 

(b) Admission of Investors.  No Credit Party shall admit any Person as an additional Investor without the prior written consent of Administrative Agent acting alone, such consent not to be unreasonably withheld.

 

(c) Documentation Requirements.  Each Borrower shall require that: (i) any Person admitted as a substitute or new Included Investor or Designated Investor (whether due to a transfer by an existing Investor or otherwise) (a “Subsequent Investor”) shall, as a condition to such admission, deliver an Investor Letter and provide other documentation similar to that described in Section 8.1(p) satisfactory to Administrative Agent in its reasonable discretion; (ii) comply with all requirements herein for an Included Investor or Designated Investor, as applicable, and (iii) any existing Included Investor or Designated Investor that is a transferee from another Investor shall provide confirmation of its obligations under its Investor Letter with respect to any increase in its Capital Commitment relating to such transfer, and, to the extent not addressed in the documentation previously delivered by such Investor, evidence of its authority to assume such increased Capital Commitment, all as satisfactory to Administrative Agent in its reasonable discretion.  Any substitute or new Investor that is unable to comply with the requirements of this Section 11.5(c) shall be a Non-Included Investor and be excluded from the Borrowing Base.  In the event any Person is admitted as a Subsequent Investor, Borrowers will promptly deliver to Administrative Agent a revised Exhibit A to this Credit Agreement, containing the names and addresses of each Investor and the Capital Commitments of each.

 

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11.6. Capital Commitments.  No Credit Party shall: (a) without the prior written consent of Administrative Agent, which may be withheld in its sole discretion, cancel, reduce, excuse, suspend or defer the Capital Commitment of any non-Included Investor; and (b) without the prior written approval of Administrative Agent and all Lenders: (i) issue any Capital Call Notices other than as contemplated by Section 5.2(c); (ii) cancel, reduce, excuse, suspend or defer the Capital Commitment of any Included Investor or Designated Investor; or (iii) excuse any Investor from or permit any Investor to defer any Capital Contribution, if the proceeds from the related Capital Call Notice are to be applied to the Obligations hereunder.

 

11.7. ERISA Compliance.  No Credit Party shall establish or maintain any Plan.  Without the approval of all Lenders, no Credit Party will take any action that would cause its underlying assets to constitute Plan Assets.

 

11.8. Environmental Matters.  Except for such conditions as are in or will promptly be brought into compliance with relevant Environmental Laws or otherwise would not reasonably be expected to result in a Material Adverse Effect, no Credit Party: (a) shall cause any Hazardous Material to be generated, placed, held, located or disposed of on, under or at, or transported to or from, any Property of any Credit Party in material violation of Environmental Law; or (b) shall permit any such Property to ever be used as a dump site or storage site (whether permanent or temporary) for any Hazardous Material in material violation of Environmental Law.

 

11.9. Dissolution.  Without the prior written consent of the Administrative Agent and all Lenders, no Credit Party will take any action to dissolve or terminate any Credit Party.

 

11.10. Limitations on Dividends and Distributions.

 

(a) No Credit Party shall declare or pay any dividends or distributions except as permitted under its Constituent Documents.

 

(b) No Credit Party shall declare or pay any dividends or distributions if: (i) any Event of Default exists; or (ii) a Potential Default exists.

 

11.11. Limitation on Debt.  (a) Borrower shall not, without the prior written consent of the Administrative Agent and the Required Lenders, incur, together with its Affiliates on a consolidated basis in accordance with GAAP, (i) aggregate Indebtedness (including the Obligations) in an amount in excess of that permitted under the Operating Agreement; or (ii) any recourse debt (other than its obligations under this Credit Agreement) in excess of twenty-five (25%) percent of amounts under Section 11.11(a)(i); and (b) Pledgor shall not incur any Indebtedness (other than its obligations under this Credit Agreement).

 

11.12. Limitation on Managing Member’s Activities.  The Managing Member shall not: (a) without the prior written consent of the Administrative Agent and the Required Lenders: (i) take any actions that will cause the Managing Member or the Borrower to dissolve, terminate, merge or consolidate; or (ii) create or suffer to exist any mortgage, pledge, lien, or other security interest upon its Membership Interest in Borrower; or (b) transfer its Membership Interest in Borrower without the prior written consent of Administrative Agent and the Required Lenders.

 

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11.13. Limitation on Pledgor’s Activities.  Pledgor shall not: (a) without the prior written consent of the Administrative Agent and the Required Lenders: (i) take any actions that will cause the Pledgor to dissolve, terminate, merge or consolidate; or (ii) create or suffer to exist any mortgage, pledge, lien, or other security interest upon its Membership Interest in Borrower; or (b) transfer its Membership Interest in Borrower without the prior written consent of Administrative Agent and the Required Lenders.

 

11.14. Limitation on Guarantor’s Activities.  Guarantor shall not: (a) without the prior written consent of the Administrative Agent and the Required Lenders: (i) take any actions that will cause the Guarantor or Acadia Realty Acquisition III LLC to dissolve, terminate, merge or consolidate; or (ii) create or suffer to exist any mortgage, pledge, lien, or other security interest upon its equity interest in Acadia Realty Acquisition III LLC or permit Acadia Realty Acquisition III LLC to create or suffer to exist any mortgage, pledge, lien, or other security interest upon its Membership Interest in Borrower; or (b) transfer its equity interest in Acadia Realty Acquisition III LLC or permit Acadia Realty Acquisition III LLC to transfer its Membership Interest in Borrower, in each case without the prior written consent of Administrative Agent and the Required Lenders.

 

11.15. Investor Withdrawal.  No Credit Party shall take any action which would permit any Investor to withdraw (unless a prepayment is made such that no Implicit Borrowing Base Deficit would occur as a result of such withdrawal) from any Credit Party in accordance with the Operating Agreement, Partnership Agreement, or the Stockholders Agreement, as applicable.

 

12. EVENTS OF DEFAULT

 

12.1. Events of Default.  An “Event of Default” shall exist if any one or more of the following events (herein collectively called “Events of Default”) shall occur and be continuing:

 

(a) (i) Borrower or any Qualified Borrower shall fail to pay when due any principal of the Obligations; or (ii) any Credit Party or any Qualified Borrower shall fail to pay when due any interest on the Obligations or any fee, expense, or other payment required hereunder, including, without limitation, payment of cash for deposit as cash collateral as required hereunder, and such failure under this clause (ii) shall continue for one (1) Business Day thereafter (except for the failure to pay the Obligations in full on the Maturity Date for which no notice shall be required and except for the failure to prepay any amount required under Section 2.1(d) hereof for which no additional notice shall be required);

 

(b) any representation or warranty made by any Credit Party or any Qualified Borrower under this Credit Agreement, or any of the other Loan Documents executed by either of them, or in any certificate or statement furnished or made to Lenders or any of them by any Credit Party or any Qualified Borrower pursuant hereto or in connection herewith or with the Loans, shall prove to be untrue or inaccurate in any material respect as of the date on which such representation or warranty is made;

 

(c) default shall occur in the performance of any of the covenants or agreements contained herein (other than the covenants contained in Section 2.1(d) or Section 11), or of the covenants or agreements of any Credit Party or any Qualified Borrower contained in any other Loan Documents executed by such Person, and such default shall continue uncured to the satisfaction of Administrative Agent for a period of thirty (30) days after written notice thereof has been given by Administrative Agent to Borrower, unless it cannot be cured within thirty (30) days and provided the party is diligently proceeding to cure (provided that such thirty (30)-day cure period shall not apply respecting covenants of a Credit Party relating to notices to be given by a Credit Party, but a three (3)-day grace period shall apply);

 

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(d) default shall occur in the performance of the covenants or agreements of Borrower or any Qualified Borrower contained in Section 2.1(d) or Section 11;

 

(e) any of the Loan Documents executed by a Credit Party or any Qualified Borrower shall cease, in whole or in material part, to be legal, valid, binding agreements enforceable against the Credit Parties or such Qualified Borrower in accordance with the terms thereof or shall in any way be terminated or become or be declared ineffective or inoperative or shall in any way whatsoever cease to give or provide the respective liens, security interest, rights, titles, interest, remedies, powers, or privileges intended to be created thereby;

 

(f) default shall occur in the payment of any recourse indebtedness or Guaranty Obligation of Borrower or Guarantor (other than the Obligations), in an aggregate amount greater than or equal to $10,000,000, and such default shall continue for more than the applicable period of grace, if any;

 

(g) any Credit Party shall: (i) apply for or consent to the appointment of a receiver, trustee, custodian, intervenor, or liquidator of itself or of all or a substantial part of its assets; (ii) file a voluntary petition in bankruptcy or admit in writing that it is unable to pay its debts as they become due; (iii) make a general assignment for the benefit of creditors; (iv) file a petition or answer seeking reorganization or an arrangement with creditors or to take advantage of any Debtor Relief Laws; (v) file an answer admitting the material allegations of, or consent to, or default in answering, a petition filed against it in any bankruptcy, reorganization or insolvency proceeding; or (vi) take partnership or corporate action for the purpose of effecting any of the foregoing;

 

(h) a case or proceeding shall be commenced, without application or consent of any Credit Party, in any court, seeking an order for relief under the Bankruptcy Code, to adjudicate if bankrupt or insolvent or seeking the liquidation, reorganization, debt arrangement, dissolution, winding up or composition or readjustment of debts of any Credit Party, the appointment of a trustee, receiver, custodian, liquidator, assignee or sequestor (or similar official) for such Person or all or substantially all of the assets of such Person, or any similar action with respect to such Person under any existing or future law of any jurisdiction, domestic or foreign, relating to bankruptcy, insolvency, reorganization, winding up or composition or adjustment of debts, and such case or proceeding shall continue undismissed, or unstayed or in effect, for a period of sixty (60) consecutive days or results in the entering of an order for relief or any such adjudication or appointment

 

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(i) any final judgment(s) for the payment of money in excess of the sum of $5,000,000 in the aggregate shall be rendered against any Credit Party and such judgment or judgments remain unsatisfied for a period of sixty (60) days or would reasonably be expected to have a Material Adverse Effect, unless covered by insurance or unless being appealed and the applicable Credit Party or such Qualified Borrower has posted a bond or cash collateral;

 

(j) Managing Member shall cease to be the sole Managing Member of Borrower or Managing Member shall be removed as the Managing Member of Borrower;

 

(k) Managing Member shall repudiate, challenge, or declare unenforceable its obligation to make contributions to the capital of Borrower pursuant to its Capital Commitments or shall otherwise disaffirm the provisions of the Operating Agreement;

 

(l) there shall occur any change in the condition (financial or otherwise) of any Credit Party which, in the reasonable judgment of Administrative Agent, has a Material Adverse Effect (it being understood that the occurrence of Exclusion Events in respect of one or more Investors is not, in and of itself, an event constituting a Material Adverse Effect);

 

(m) Pledgor shall repudiate, challenge, or declare unenforceable its obligation to make contributions to the capital of Borrower pursuant to its Capital Commitments or shall otherwise disaffirm the provisions of the Operating Agreement or shall repudiate, challenge, declare unenforceable or default under its obligations under the Capital Contributions Pledge Agreement;

 

(n) the removal of the Managing Member pursuant to Section 10.2(a) of the Operating Agreement or the removal of the Acadia D.R. Management Inc. pursuant to Section 5.2 of the Stockholders Agreement;

 

(o) Guarantor shall repudiate, challenge declare unenforceable or default under its obligations under the Guaranty of Capital; or

 

(p) the Borrowing Base Deficit is greater than zero (0) and is not eliminated within one (1) Business Day.

 

12.2. Remedies Upon Event of Default.  If an Event of Default shall have occurred and be continuing, then Administrative Agent may, and, upon the direction of the Required Lenders, shall:  (a) suspend the Commitments of Lenders until such Event of Default is cured; (b) terminate the Commitment of Lenders hereunder; (c) declare the principal of, and all interest then accrued on, the Obligations to be forthwith due and payable (including the liability to fund the Letter of Credit Liability pursuant to Section 2.5(g) hereof), whereupon the same shall forthwith become due and payable without presentment, demand, protest, notice of default, notice of acceleration, or of intention to accelerate or other notice of any kind all of which each of Borrower, each Qualified Borrower and each other Credit Party hereby expressly waives, anything contained herein or in any other Loan Document to the contrary notwithstanding; (d) require that the Borrower Parties Cash Collateralize the Letter of Credit Liability; (e) exercise any right, privilege, or power set forth in Section 5.2 hereof, including, but not limited to, the initiation of Capital Call Notices of the Capital Commitments; or (f) without notice of default or demand, pursue and enforce any of Administrative Agent’s or Lenders’ rights and remedies under the Loan Documents, or otherwise provided under or pursuant to any applicable law or agreement; provided, however, that if any Event of Default specified in Section 12.1(g) or 12.1(h) hereof shall occur, the principal of, and all interest on, the Obligations shall thereupon become due and payable concurrently therewith, without any further action by Administrative Agent or Lenders, or any of them, and without presentment, demand, protest, notice of default, notice of acceleration, or of intention to accelerate or other notice of any kind, all of which each of Borrower, each Qualified Borrower and Guarantor hereby expressly waives.

 

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12.3. Performance by Administrative Agent.  Should any Credit Party or any fail to perform any covenant, duty, or agreement contained herein or in any of the Loan Documents, and such failure continues beyond any applicable cure period, Administrative Agent may, but shall not be obligated to, perform or attempt to perform such covenant, duty, or agreement on behalf of such Person.  In such event, each Credit Party shall, at the request of Administrative Agent promptly pay any amount expended by Administrative Agent in such performance or attempted performance to Administrative Agent, together with interest thereon at the Default Rate from the date of such expenditure until paid.  Notwithstanding the foregoing, it is expressly understood that neither any of the Agents nor any of the other Secured Parties assume any liability or responsibility for the performance of any duties any Credit Party, or any related Person hereunder or under any of the Loan Documents or other control over the management and affairs of any Credit Party, or any related Person, nor by any such action shall any of the Agents or any of the other Secured Parties be deemed to create a partnership arrangement with any Credit Party or any related Person.

 

13. AGENCY PROVISIONS

 

13.1. Appointment and Authorization of Agents.

 

(a) Authority.  Each Lender (including any Person that is an assignee, participant, secured party or other transferee with respect to the interest of such Lender in any Principal Obligation or otherwise under this Credit Agreement) (collectively with such Lender, a “Lender Party”) hereby irrevocably appoints, designates and authorizes each Agent (other than a Managing Agent for a different Lender Group) to take such action on its behalf under the provisions of this Credit Agreement and the other Loan Documents and to exercise such powers and perform such duties as are expressly delegated to such Agent by the terms hereof and of the other Loan Documents, together with such other powers as are reasonably incidental thereto.  Notwithstanding any provision to the contrary elsewhere herein and in any other Loan Documents, no Agent shall have any duties or responsibilities, except those expressly set forth herein and therein, nor shall any Agent have or be deemed to have any fiduciary relationship with any Lender Party, and no implied covenants, functions, responsibilities, duties, obligations or liabilities shall be read into this Credit Agreement or any of the other Loan Documents or otherwise exist against any Agent.  Without limiting the generality of the foregoing sentence, the use of the term “agent” herein and in the other Loan Documents with reference to any Agent is not intended to connote any fiduciary or other implied (or express) obligations arising under agency doctrine of any applicable Law.  Instead, such term is used merely as a matter of market custom, and is intended to create or reflect only an administrative relationship between independent contracting parties.

 

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(b) Release of Collateral.  The Secured Parties irrevocably authorize Administrative Agent, at Administrative Agent’s option and in its discretion, to release any security interest in or Lien on any Collateral granted to or held by Administrative Agent: (i) upon termination of this Credit Agreement and the other Loan Documents, termination of the Commitments and all Letters of Credit (or the Cash Collateralization in full of all Letters of Credit), and payment in full of all Obligations, including all fees and indemnified costs and expenses that are then due and payable pursuant to the terms of the Loan Documents; and (ii) if approved by the requisite Lenders pursuant to the terms of Section 14.1.  Upon the request of Administrative Agent, the Lenders will confirm in writing Administrative Agent’s authority to release particular types or items of Collateral pursuant to this Section 13.1(b).

 

(c) Limitation on Beneficiaries.  The provisions of Sections 13.1 through 13.8 and Section 13.10 are solely for the benefit of the Administrative Agent, the Lenders, the Letter of Credit Issuer and the other Secured Parties, and no Credit Party shall have rights as a third party beneficiary of any of such provisions.

 

13.2. Delegation of Duties.  Each Agent may execute any of its duties under this Credit Agreement or under the other Loan Documents by or through agents or attorneys-in-fact and shall be entitled to advice of legal counsel, accountants, and other professionals concerning all matters pertaining to such duties.  No Agent shall be responsible for the negligence or misconduct of any agent or attorney-in-fact that it selects in the absence of gross negligence or willful misconduct.

 

13.3. Exculpatory Provisions.  No Agent-Related Person shall be liable for any action taken or omitted to be taken by it under or in connection herewith or in connection with any of the other Loan Documents or the transactions contemplated hereby (except for its own gross negligence or willful misconduct) or be responsible in any manner to any of the Lenders for any recitals, statements, representations or warranties made by any of the Credit Parties contained herein or in any of the other Loan Documents or in any certificate, report, document, financial statement or other written or oral statement referred to or provided for therein, or received by such Agent under or in connection herewith or in connection with the other Loan Documents, or enforceability or sufficiency of this Credit Agreement of any of the other Loan Documents, or for any failure of any Credit Party to perform its obligations hereunder or thereunder.  No Agent-Related Person shall be responsible to any Lender to ascertain or inquire as to the performance or observance of any of the terms, conditions, provisions, covenants or agreements contained herein or in the other Loan Documents or as to the use of the proceeds of the Loans or the use of the Letters of Credit or of the existence or possible existence of any Potential Default or Event of Default or to inspect the properties, books or records of the Credit Parties.  The Agents are not trustees for the Lenders and owe no fiduciary duty to the Lender Groups.  Each Lender recognizes and agrees that Administrative Agent shall not be required to determine independently whether the conditions described in Sections 8.2(a) or 8.2(b) have been satisfied and, when Administrative Agent disburses funds to Borrower or a Qualified Borrower or the Letter of Credit Issuer causes Letters of Credit to be issued, it may rely fully upon statements contained in the relevant requests by a Borrower Party.

 

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13.4. Reliance on Communications.  The Agents shall be entitled to rely, and shall be fully protected in relying, upon any note, writing, resolution, notice, consent, certificate, affidavit, letter, cablegram, telegram, facsimile, telex or telephone message, statement, order or other document or conversation believed by it to be genuine and correct and to have been signed, sent or made by the proper Person or Persons and upon advice and statements of legal counsel (including, without  limitation, counsel to any of the Credit Parties, independent accountants and other experts selected by the Agents with reasonable care).  Each Agent may deem and treat each Lender as the owner of its interests hereunder for all purposes unless a written notice of assignment, negotiation or transfer thereof shall have been filed with Administrative Agent in accordance with Section 14.12(b).  Each Agent shall be fully justified in failing or refusing to take any action under this Credit Agreement or under any of the other Loan Documents unless it shall first receive such advice or concurrence of the Lenders as it deems appropriate or it shall first be indemnified to its satisfaction by the Lenders against any and all liability and expense which may be incurred by it by reason of taking or continuing to take any such action.  Each Agent shall in all cases be fully protected in acting, or in refraining from acting, hereunder or under any of the other Loan Documents in accordance with a request of the Required Lenders (or to the extent specifically required, all of the Lenders) and such request and any action taken or failure to act pursuant thereto shall be binding upon all the Lenders (including their successors and assigns).

 

13.5. Notice of Default.  No Agent shall be deemed to have knowledge or notice of the occurrence of any Potential Default or Event of Default hereunder unless such Agent has received notice from a Lender or a Borrower Party referring to the Loan Document, describing such Potential Default or Event of Default and stating that such notice is a “notice of potential default or event of default.”  Each Agent will notify the Lenders of its receipt of any such notice, and Administrative Agent shall take such action with respect to such Potential Default or Event of Default as shall be reasonably directed by the requisite Lenders and as is permitted by the Loan Documents; provided, however, that unless and until the Administrative Agent shall have received any such request, Administrative Agent may (but shall not be obligated to) take such action, or refrain from taking such action, with respect to such Potential Default or Event of Default as it shall deem advisable or in the best interest of the Lenders.

 

13.6. Non-Reliance on Agents and Other Lenders.  Each Lender expressly acknowledges that no Agent-Related Person or Arranger nor any of their officers, directors, employees, agents, attorneys-in-fact or affiliates has made any representations or warranties to it and that no act by any Agent-Related Person or Arranger hereafter taken, including any consent to any acceptance of any assignment or review of the affairs of any Borrower Party or any of its Affiliates, shall be deemed to constitute any representation or warranty by the Agent-Related Person or Arranger to any Lender.  Each Lender, including any Lender by assignment, represents to each Agent and Arranger that it has, independently and without reliance upon any Agent-Related Person, any Arranger or any other Lender, and based on such documents and information as it has deemed appropriate, made its own appraisal of and investigation into the business, assets, operations, property, financial and other conditions, prospects and creditworthiness of each Credit Party (or its Affiliates) and all applicable bank regulatory laws related to the transactions contemplated hereby and made its own decision to make its Loans hereunder and enter into this Credit Agreement.  Each Lender also represents that it shall, independently and without reliance upon any Agent-Related Person, any Arranger or any other Lender, and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit analysis, appraisals and decisions in taking or not taking action under this Credit Agreement and the other Loan Documents, and to make such investigation as it deems necessary to inform itself as to the business, assets, operations, property, financial and other conditions, prospects and creditworthiness of any Borrower Party (or its Affiliates).  Except for notices, reports and other documents expressly required to be furnished to the Lenders by Administrative Agent hereunder, neither any Agent nor any Arranger shall have any duty or responsibility to provide any Lender with any credit or other information concerning the business, operations, assets, property, financial or other conditions, prospects or creditworthiness of the Borrower Parties which may come into the possession of any Agent-Related Person or Arranger or any of their officers, directors, employees, agents, attorneys-in-fact or affiliates.

 

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13.7. Indemnification.  Whether or not the transactions contemplated hereby are consummated, the Alternate Lenders shall indemnify, upon demand, each Agent-Related Person (to the extent not reimbursed by a Borrower Party and without limiting the obligation of the Borrower Parties to do so), ratably in accordance with the applicable Alternate Lender’s respective Alternate Lender Pro Rata Share of its Lender Group’s Lender Group Percentage, and hold harmless each Agent-Related Person from and against any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind whatsoever which may at any time (including without limitation at any time following payment in full of the Obligations) be imposed on, incurred by or asserted against it in its capacity as such in any way relating to or arising out of this Credit Agreement or the other Loan Documents or any documents contemplated by or referred to herein or therein or the transactions contemplated hereby or thereby or any action taken or omitted by it under or in connection with any of the foregoing; provided that no Lender shall be liable for the payment of any portion of such liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements resulting from such Person’s gross negligence or willful misconduct, as finally determined by a court of competent jurisdiction or related to another Lender Group’s Managing Agent; provided, further, that no action taken in accordance with the directions of the Required Lenders or all Lenders, as applicable, shall be deemed to constitute gross negligence or willful misconduct for purposes of this Section 13.7.  Without limitation of the foregoing, each Alternate Lender shall reimburse Administrative Agent, the Letter of Credit Issuer and its Managing Agent upon demand for its ratable share of any costs or out-of-pocket expenses (including Attorney Costs) incurred by such Agent in connection with the preparation, execution, delivery, administration, modification, amendment or enforcement (whether through negotiations, legal proceedings or otherwise) of, or legal advice in respect of rights or responsibilities under, this Credit Agreement, any other Loan Document, or any document contemplated by or referred to herein, to the extent that such Agent is not reimbursed for such expenses by or on behalf of the Borrower Parties.  The agreements in this Section 13.7 shall survive the termination of the Commitments, payment of all of the Obligations hereunder and under the other Loan Documents or any documents contemplated by or referred to herein or therein, as well as the resignation or replacement of any Agent.

 

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13.8. Agents in Their Individual Capacity.  Each Agent (and any successor acting as an Agent) and its Affiliates may make loans to, issue letters of credit for the account of, accept deposits from, acquire equity interests in, and generally engage in any kind of banking, trust, financial advisory, underwriting or other business with any Credit Party (or any of its subsidiaries or Affiliates) as though such Agent were not an Agent or a Lender hereunder and without notice to or consent of the Lenders.  The Lenders acknowledge that, pursuant to such activities, any Agent or its Affiliates may receive information regarding the Credit Parties or their Affiliates (including information that may be subject to confidentiality obligations in favor of such Person) and acknowledge that such Agent shall be under no obligation to provide such information to them.  With respect to the Loans made and Letters of Credit issued and all obligations owing to it, an Agent acting in its individual capacity shall have the same rights and powers under this Credit Agreement as any Lender and may exercise the same as though it were not an Agent, and the terms “Lender” and “Lenders” shall include each Agent in its individual capacity.

 

13.9. Successor Agent.  Any Agent may, at any time, resign upon twenty (20) days written notice to the Lenders and the Credit Parties.  Upon any such resignation of the Administrative Agent, the Required Lenders shall appoint a successor Administrative Agent from any of the Alternate Lenders, in consultation with the Borrower.  If no successor agent is appointed prior to the effective date of the resignation of the applicable Agent, then the retiring Agent may appoint, after consulting with the Lenders and the Borrower, a successor Agent from any of the Alternate Lenders.  Upon the acceptance of its appointment as successor agent hereunder, such successor agent shall thereupon succeed to all the rights, powers and duties of the retiring Agent, and shall assume the duties and obligations of such retiring Agent, and the retiring Agent shall be discharged from its duties and obligations as Agent under this Credit Agreement and the other Loan Documents.  After any retiring Agent’s resignation hereunder as Agent, the provisions of this Section 13.9 and Sections 14.3 and 13.8 shall inure to its benefit as to any actions taken or omitted to be taken by it while it was an Agent under this Credit Agreement.  If no successor agent has accepted appointment as Agent by the date which is thirty (30) days following a retiring Agent’s notice of resignation, the retiring Agent’s resignation shall nevertheless thereupon become effective and the applicable Alternate Lenders shall perform all of the duties of the Agent hereunder until such time, if any, as the Required Lenders appoint a successor agent as provided for above.

 

13.10. No Other Duties, Etc.  Anything herein to the contrary notwithstanding, no Agent shall have any powers, duties or responsibilities under this Credit Agreement or any of the other Loan Documents, except in its capacity, as applicable, as Administrative Agent, a Lender or the Letter of Credit Issuer hereunder.

 

13.11. Administrative Agent May File Proofs of Claim.  In case of the pendency of any receivership, insolvency, liquidation, bankruptcy, reorganization, arrangement, adjustment, composition or other judicial proceeding relative to any Credit Party, Administrative Agent (irrespective of whether the principal of any Loan or Letter of Credit Liability shall then be due and payable as herein expressed or by declaration or otherwise and irrespective of whether Administrative Agent shall have made any demand on Credit Parties) shall be entitled and empowered, by intervention in such proceeding or otherwise:

 

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(a) to file and prove a claim for the whole amount of the principal and interest owing and unpaid in respect of the Loans, Letter of Credit Liability and all other Obligations that are owing and unpaid and to file such other documents as may be necessary or advisable in order to have the claims of the Secured Parties (including any claim for the reasonable compensation, expenses, disbursements and advances of the Secured Parties and their respective agents and counsel and all other amounts due the Secured Parties hereunder) allowed in such judicial proceeding; and

 

(b) to collect and receive any monies or other property payable or deliverable on any such claims and to distribute the same;

 

and any custodian, receiver, assignee, trustee, liquidator, sequestrator or other similar official in any such judicial proceeding is hereby authorized by each Secured Party to make such payments to Administrative Agent and, in the event that Administrative Agent shall consent to the making of such payments directly to the Secured Party, to pay to Administrative Agent any amount due for the reasonable compensation, expenses, disbursements and advances of Administrative Agent and its agents and counsel, and any other amounts due the Administrative Agent hereunder.

 

Nothing contained herein shall be deemed to authorize Administrative Agent to authorize or consent to or accept or adopt on behalf of any Secured Party any plan of reorganization, arrangement, adjustment or composition affecting the Obligations or the rights of any Secured Party or to authorize Administrative Agent to vote in respect of the claim of any Secured Party in any such proceeding.

 

14. MISCELLANEOUS

 

14.1. Amendments.  Neither this Credit Agreement nor any other Loan Document, nor any of the terms hereof or thereof, may be amended, waived, discharged or terminated, unless such amendment, waiver, discharge, or termination is in writing and signed by Administrative Agent, based upon the approval of the appropriate number of Lenders required hereunder, or such Lenders, on the one hand, and the Credit Parties, on the other hand; and, if the rights or duties of an Agent are affected thereby, by such Agent, provided that no such amendment, waiver, discharge, or termination shall, without the consent of:

 

(a) each Lender affected thereby:

 

(i) reduce or increase the amount or alter the term of the Commitment of such Lender, or alter the provisions relating to any fees (or any other payments) payable to such Lender;

 

(ii) extend the time for payment for the principal of or interest on the Obligations, or fees or costs, or reduce the principal amount of the Obligations (except as a result of the application of payments or prepayments), or reduce the rate of interest borne by the Obligations (other than as a result of waiving the applicability of the Default Rate), or otherwise affect the terms of payment of the principal of or any interest on the Obligations or fees or costs hereunder;

 

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(iii) release any Liens granted under the Collateral Documents, except as otherwise contemplated herein or therein, and except in connection with the transfer of interests in a Credit Party permitted hereunder or in any other Loan Documents;

 

(iv) release the Guaranty granted pursuant to the Guaranty of Capital or limit or otherwise modify the liability of Guarantor under any of the Loan Documents; and

 

(v) extend the Stated Maturity Date or Maturity Date;

 

(b) all Lenders:

 

(i) permit the cancellation, excuse or reduction of the Capital Commitment of any Included Investor or Designated Investor;

 

(ii) amend the definitions of (A) “Applicable Requirement”; (B) “Available Loan Amount”; (C) “Eligible Available Contributions of the Designated Investors”; (D) “Eligible Available Contributions of the Included Investors”; (E) “Included Investor”; (F) “Inclusion Percentage”; (G) “Designated Investor”; (H) “Unfunded Capital Commitment”; (I) “Borrowing Base”; or (J) “Exclusion Event”;

 

(iii) change the percentages specified in the definition of Required Lenders or any other provision hereof specifying the number or percentage of Lenders which are required to amend, waive or modify any rights hereunder or otherwise make any determination or grant any consent hereunder;

 

(iv) consent to the assignment or transfer by a Credit Party of any of their respective rights and obligations under (or in respect of) the Loan Documents; or

 

(v) amend, waive or in any way modify or suspend any provision requiring the pro rata application of payments of the Obligations to Lenders; or

 

(vi) amend the terms of this Section 14.1.

 

Administrative Agent agrees that it will promptly notify the Managing Agents (who will in turn promptly notify the Lenders in its Lender Group) of any proposed modification or amendment to any Loan Document, and deliver drafts of any such proposed modification or amendment to the Managing Agents (who will in turn promptly deliver to the Lenders in its Lender Group), prior to the effectiveness of such proposed modification or amendment.  Notwithstanding the above:  (A) no provisions of Section 13 may be amended or modified without the consent of Administrative Agent; (B) no provisions of Section 2.5 may be amended or modified without the consent of the Letter of Credit Issuer; and (C) Sections 10 and 11 specify the requirements for waivers of the affirmative covenants and negative covenants listed therein, and any amendment to any provision of Section 10 or Section 11 shall require the consent of the Lenders that are specified therein as required for a waiver thereof.  Any amendment, waiver or consent not specifically addressed in this Section 14.1 or otherwise shall be subject to the approval of Required Lenders.

 

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Notwithstanding the fact that the consent of all the Lenders is required in certain circumstances as set forth above and in Section 11: (1) each Lender is entitled to vote as such Lender sees fit on any reorganization plan that affects the Loans or the Letters of Credit, and each Lender acknowledges that the provisions of Section 1126(c) of the Bankruptcy Code supersede the unanimous consent provisions set forth herein; (2) the Required Lenders may consent to allow a Borrower Party to use cash collateral in the context of a bankruptcy or insolvency proceeding; and (3) Administrative Agent may, in its sole discretion, agree to the modification or waiver of any of the other terms of this Credit Agreement or any other Loan Document or consent to any action or failure to act by any Credit Party, if such modification, waiver, or consent is of an administrative nature.

 

If Administrative Agent shall request the consent of any Lender to any amendment, change, waiver, discharge, termination, consent or exercise of rights covered by this Credit Agreement, and not receive such consent or denial thereof in writing within ten (10) Business Days of the making of such request by Administrative Agent, as the case may be, such Lender shall be deemed to have given its consent to the request.

 

14.2. Setoff.  In addition to any rights and remedies of the Lenders provided by law, upon the occurrence and during the continuance of any Event of Default, each Lender is authorized at any time and from time to time, without prior notice to any Credit Party or any other obligor, any such notice being waived by each Credit Party (on its own behalf and on behalf of each obligor) to the fullest extent permitted by law, to set off and apply any and all deposits (general or special, time or demand, provisional or final) at any time held by, and other indebtedness at any time owing by, such Lender to or for the credit or the account of any Credit Party against any and all of the Obligations owing to such Lender, now or hereafter existing, irrespective of whether or not Administrative Agent or such Lender shall have made demand under this Credit Agreement or any other Loan Document and although such Obligations may be contingent or unmatured.  Each Lender agrees promptly to notify the applicable Credit Party and Administrative Agent after any such setoff and application made by such Lender; provided, however, that the failure to give such notice shall not affect the validity of such set-off and application.

 

14.3. Sharing of Payments.  If, other than as expressly provided elsewhere herein, any Lender shall obtain on account of the Loans made by it or the participations in Letters of Credit held by it, any payment (whether voluntary, involuntary, through the exercise of any right of setoff, the receipt of any proceeds from a Capital Call or the exercise of any remedies under any Collateral Documents, or otherwise) in excess of its ratable share (or other share contemplated hereunder) thereof, such Lender shall immediately: (a) notify Administrative Agent of such fact; and (b) purchase from the other Lenders such participations in the Loans made by them and/or such subparticipations in the participations in Letters of Credit held by them, as the case may be, as shall be necessary to cause such purchasing Lender to share the excess payment in respect of such of Loans or such participations, as the case may be, pro rata with each of them; provided, however, that if all or any portion of such excess payment is thereafter recovered from the purchasing Lender, such purchase shall to that extent be rescinded and each other Lender shall repay to the purchasing Lender the purchase price paid therefor, together with an amount equal to such paying Lender’s ratable share (according to the proportion of: (i) the amount that such paying Lender’s required repayment bears to; (ii) the total amount so recovered from the purchasing Lender) of any interest or other amount paid or payable by the purchasing Lender in respect of the total amount so recovered.  Each Credit Party agrees that any Lender so purchasing a participation from another Lender may, to the fullest extent permitted by law, exercise all its rights of payment (including the right of setoff, but subject to Section 14.2) with respect to such participation as fully as if such Lender were the direct creditor of the Credit Parties in the amount of such participation.  Administrative Agent will keep records (which shall be conclusive and binding in the absence of manifest error) of participations purchased under this Section 14.3 and will in each case notify the Lenders following any such purchases or repayments.  Each Lender that purchases a participation pursuant to this Section shall from and after such purchase have the right to give all notices, requests, demands, directions and other communications under this Credit Agreement with respect to the portion of the Obligations purchased to the same extent as though the purchasing Lender were the original owner of the Obligations purchased.  To the extent required to implement the sharing of payments under this Section 14.3, each Lender hereby authorizes and directs Administrative Agent to distribute any proceeds from Capital Calls or proceeds from the exercise of remedies under the Collateral Documents held by Administrative Agent to Lenders consistent with the terms of this Section 14.3.

 

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14.4. Payments Set Aside.  To the extent that any Credit Party makes a payment to Administrative Agent or any Lender, or Administrative Agent or any Lender exercises its right of setoff, and such payment or the proceeds of such setoff or any part thereof is subsequently invalidated, declared to be fraudulent or preferential, set aside or required (including pursuant to any settlement entered into by Administrative Agent or such Lender in its discretion) to be repaid to a trustee, receiver or any other party, in connection with any proceeding under any Debtor Relief Law or otherwise, then: (a) to the extent of such recovery, the obligation or part thereof originally intended to be satisfied shall be revived and continued in full force and effect as if such payment had not been made or such setoff had not occurred, and (b) each Alternate Lender severally agrees to pay to Administrative Agent upon demand its applicable share of any amount so recovered from or repaid by Administrative Agent, plus interest thereon from the date of such demand to the date such payment is made at a rate per annum equal to the Federal Funds Rate from time to time in effect.

 

14.5. Waiver.  No failure to exercise, and no delay in exercising, on the part of Administrative Agent or Lenders, any right hereunder shall operate as a waiver thereof, nor shall any single or partial exercise thereof preclude any other further exercise thereof or the exercise of any other right.  The rights and remedies of the Agents and Lenders hereunder and under the Loan Documents shall be in addition to all other rights provided by law.  No modification or waiver of any provision of this Credit Agreement, the Notes or any of the other Loan Documents, nor consent to departure therefrom, shall be effective unless in writing and no such consent or waiver shall extend beyond the particular case and purpose involved.  No notice or demand given in any case shall constitute a waiver of the right to take other action in the same, similar or other instances without such notice or demand.  Subject to the terms of this Credit Agreement, including Section 14.1, Administrative Agent acting on behalf of all Lenders (pursuant to the terms hereof), and the Credit Parties may from time to time enter into agreements amending or changing any provision of this Credit Agreement or the rights of Lenders or the Credit Parties hereunder, or may grant waivers or consents to a departure from the due performance of the obligations of the Credit Parties hereunder, any such agreement, waiver or consent made with such written consent of Administrative Agent being effective to bind all Lenders.

 

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14.6. Payment of Expenses.

 

(a) Borrower agrees to pay (within ten (10) days after the receipt of written notice from Administrative Agent) all out-of-pocket costs and expenses of Administrative Agent (including without limitation Attorney Costs) reasonably incurred by it in connection with the negotiation, preparation, execution and delivery of this Credit Agreement, the Notes, and the other Loan Documents and any and all amendments, modifications and supplements thereof or thereto, and, subject to no gross negligence or willful misconduct on the part of the Lenders, all out-of-pocket costs and expenses of Administrative Agent and the Secured Parties (including, without limitation, the Attorney Costs of Administrative Agent’s and the Secured Parties’ legal counsel) reasonably incurred by them in connection with the preservation, enforcement and modification of, and Administrative Agent’s and the Secured Parties’ rights under, this Credit Agreement, the Notes, and the other Loan Documents.

 

(b) Borrower agrees to indemnify Administrative Agent and each of Lenders and their respective directors, officers, employees, attorneys and agents (each such Person, including without limitation Administrative Agent and each of the Secured Parties, being called an “Indemnitee”) against, and to hold each Indemnitee harmless from, any and all losses, claims, actions, judgments, suits, disbursements, penalties, damages (other than consequential damages), liabilities and related expenses, including reasonable counsel fees and expenses, incurred by or asserted against any Indemnitee arising out of, in any way connected with, or as a result of:

 

(i) the execution and delivery of this Credit Agreement or any other Loan Document or any agreement or instrument contemplated thereby,

 

(ii) the use or misuse of the proceeds of the Loans,

 

(iii) the fraudulent actions or misrepresentations of any Credit Party or its Affiliates in connection with the transactions contemplated by this Credit Agreement and the other Loan Documents,

 

(iv) any claim, litigation, investigation or proceeding relating to any of the foregoing, whether or not any Indemnitee is a party thereto, or

 

(v) any claim, litigation, investigation or proceeding relating to the Investor Documents, whether or not any Indemnitee is a party thereto;

 

provided, however, that such indemnity shall not, with respect to a particular Indemnitee, apply to any such losses, claims, actions, judgments, suits, disbursements, penalties, damages, liabilities or related expenses to the extent arising from gross negligence or willful misconduct of such Indemnitee.

 

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(c) Borrower will indemnify Administrative Agent and each of the Lenders against any costs or losses actually incurred as a result of any voluntary or involuntary prepayments of any Loans on any date which is not a Settlement Date under the Credit Agreement and against any increased costs or reduced return due to changes in applicable regulations regarding withholding taxes, reserves, capital adequacy, or other similar regulations.

 

(d) In addition to and without limiting the foregoing, the Credit Parties hereby indemnify and hold the Indemnitees harmless from and against, and agree to reimburse any Indemnitee on demand for, and agree to defend the Indemnitees against, any and all Environmental Damages (as hereinafter defined), incurred by Administrative Agent or a Lender. Without Limitation, the Foregoing Indemnity Shall Apply to Each Indemnitee with Respect to Environmental Damages Which in Whole or in Part Are Caused by or Arise out of the Negligence of Such (Or Any Other) Indemnitee.  However, Such Indemnity Shall Not Apply to a Particular Indemnitee to the Extent That the Subject of the Indemnification Is Caused by or Arises out of the Gross Negligence or Willful Misconduct of That Particular Indemnitee.

 

The term “Environmental Damages” means all claims, demands, liabilities (including strict liability), losses, damages (including consequential damages), causes of action, judgments, penalties, fines, costs and expenses (including reasonable fees, costs and expenses of attorneys, consultants, contractors, experts and laboratories), of any and every kind or character, contingent or otherwise, matured or unmatured, known or unknown, direct or indirect, foreseeable or unforeseeable, made, incurred, suffered or brought at any time and from time to time and arising in whole or in part from:

 

(i) The presence of any Hazardous Material on any Property, or any escape, seepage, leakage, spillage, emission, release, discharge or disposal of any Hazardous Material on or from any Property, or the migration or release or threatened migration or release of any Hazardous Material to, from or through any Property; or

 

(ii) Any act, omission, event or circumstance existing or occurring in connection with the handling, treatment, containment, removal, storage, decontamination, clean-up, transport or disposal of any Hazardous Material by Borrower, or any party for whose actions Borrower is liable or in connection with any Property; or

 

(iii) The breach of any representation, warranty, covenant or agreement contained in Section 9.16 (to the extent such breach relates to Environmental Requirements), Section 9.18 or Section 10.8 (to the extent such breach relates to Environmental Requirements), or Section 11.8 of this Credit Agreement; or

 

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(iv) Any violation of any Environmental Requirement, regardless of whether any act, omission, event or circumstance giving rise to the violation constituted a violation at the time of the occurrence or inception of such act, omission, event or circumstance; or

 

(v) Any Environmental Liability with respect to any Property, or the filing or imposition of any Environmental Lien against any Property, because of, resulting from, in connection with, or arising out of any of the matters referred to in subsections (i) through (iv) preceding.

 

(d)           The provisions of this Section 14.6 shall remain operative and in full force and effect regardless of the termination or expiration of the Availability Period, this Credit Agreement, or any other Loan Document, the consummation of the transactions contemplated hereby, the repayment of the Loans, the occurrence of the Maturity Date, the invalidity, illegality, or unenforceability of any term or provision of this Credit Agreement or any other Loan Document, or any investigation made by or on behalf of Lenders.  All amounts due under this Section 14.6 shall be payable promptly on written demand therefor.

 

14.7. Notice.  Any notice, demand, request or other communication which any party hereto may be required or may desire to give hereunder shall be in writing (except where telephonic instructions or notices are expressly authorized herein to be given) and shall be deemed to be effective:  (a) if by hand delivery, telecopy or other facsimile transmission, on the day and at the time on which delivered to such party at the address or fax numbers specified below; (b) if by mail, on the day which it is received after being deposited, postage prepaid, in the United States registered or certified mail, return receipt requested, addressed to such party at the address specified below; or (c) if by FedEx or other reputable express mail service, on the next Business Day following the delivery to such express mail service, addressed to such party at the address set forth below; or (d) if by telephone, on the day and at the time reciprocal communication (i.e., direct communication between two or more persons, which shall not include voice mail messages) with one of the individuals named below occurs during a call to the telephone number or numbers indicated for such party below:

 

If to Borrower, Managing Member, Guarantor or Pledgor:

 

c/o Acadia Realty Trust

1311 Mamaroneck Avenue, Suite 260

White Plains, New York 10605

Attention:  Robert Masters, Esq.

 

If to Administrative Agent:

 

Bank of America, N.A., as Administrative Agent

NC1-027-19-01

214 North Tryon Street

Charlotte, North Carolina 28255

Attention:    Dan Hattendorf

Telephone:  (704) 388-3113

Facsimile:   (704) 388-9211

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With a copy to:

 

Bank of America, N.A., as Administrative Agent

NC1-027-19-01

214 North Tryon Street

Charlotte, NC 28255

Attention:   Brian Williams

Telephone:  (704) 683-4747

Telecopy:   (704) 968-1215

 

If to Lenders:

 

At the address and numbers set forth on Schedule 14.7.

 

Any party may change its address for purposes of this Credit Agreement by giving notice of such change to the other parties pursuant to this Section 14.7.  With respect to any notice received by Administrative Agent from any Credit Party or any Investor not otherwise addressed herein, Administrative Agent shall notify Lenders promptly of the receipt of such notice, and shall provide copies thereof to Lenders.  When determining the prior days notice required for any Loan Notice, Request for Letter of Credit, or other notice to be provided by a Credit Party, any Qualified Borrower or an Investor hereunder, the day the notice is delivered to Administrative Agent (or such other applicable Person) shall not be counted, but the day of the related Borrowing, issuance of Letter of Credit, or other relevant action shall be counted.

 

14.8. GOVERNING LAW.  PURSUANT TO SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW,  THE SUBSTANTIVE LAWS OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED ENTIRELY WITHIN SUCH STATE, WITHOUT REGARD TO THE CHOICE OF LAW PRINCIPLES THAT MIGHT OTHERWISE APPLY, EXCEPT TO THE EXTENT THE LAWS OF ANOTHER JURISDICTION GOVERN THE CREATION, PERFECTION, VALIDITY, OR ENFORCEMENT OF LIENS UNDER THE COLLATERAL DOCUMENTS, AND THE APPLICABLE FEDERAL LAWS OF THE UNITED STATES OF AMERICA, SHALL GOVERN THE VALIDITY, CONSTRUCTION, ENFORCEMENT AND INTERPRETATION OF THIS CREDIT AGREEMENT AND ALL OF THE OTHER LOAN DOCUMENTS.

 

14.9. Choice of Forum; Consent to Service of Process and Jurisdiction; Waiver of Trial by Jury.  Any suit, action or proceeding against any Credit Party with respect to this Credit Agreement, the Notes or the other Loan Documents or any judgment entered by any court in respect thereof, may be brought in the courts of the State of New York, or in the United States Courts located in the Borough of Manhattan in New York City, pursuant to Section 5-1402 of the New York General Obligations Law, as Lenders in their sole discretion may elect and each Credit Party hereby irrevocably submits to the non-exclusive jurisdiction of such courts for the purpose of any such suit, action or proceeding.  Each Credit Party hereby irrevocably consents to the service of process in any suit, action or proceeding in said court by the mailing thereof by Administrative Agent by registered or certified mail, postage prepaid, to the applicable address set forth in Section 14.7.  Each Credit Party hereby irrevocably waives any objections which it may now or hereafter have to the laying of venue of any suit, action or proceeding arising out of or relating to this Credit Agreement or the Notes brought in the courts located in the State of New York, Borough of Manhattan in New York City, and hereby further irrevocably waives any claim that any such suit, action or proceeding brought in any such court has been brought in an inconvenient forum. EACH PARTY HERETO HEREBY EXPRESSLY WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION OR CAUSE OF ACTION ARISING UNDER ANY LOAN DOCUMENT OR IN ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO OR ANY OF THEM WITH RESPECT TO ANY LOAN DOCUMENT, OR THE TRANSACTIONS RELATED THERETO, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER FOUNDED IN CONTRACT OR TORT OR OTHERWISE; AND EACH PARTY HERETO HEREBY AGREES AND CONSENTS THAT ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT A JURY, AND THAT ANY PARTY TO THIS CREDIT AGREEMENT MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS SECTION WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE SIGNATORIES HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY

 

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14.10. Invalid Provisions.  If any provision of this Credit Agreement is held to be illegal, invalid, or unenforceable under present or future laws effective during the term of this Credit Agreement, such provision shall be fully severable and this Credit Agreement shall be construed and enforced as if such illegal, invalid or unenforceable provision had never comprised a part of this Credit Agreement, and the remaining provisions of this Credit Agreement shall remain in full force and effect and shall not be affected by the illegal, invalid or unenforceable provision or by its severance from this Credit Agreement, unless such continued effectiveness of this Credit Agreement, as modified, would be contrary to the basic understandings and intentions of the parties as expressed herein.  If any provision of this Credit Agreement shall conflict with or be inconsistent with any provision of any of the other Loan Documents, then the terms, conditions and provisions of this Credit Agreement shall prevail.

 

14.11. Entirety and Amendments.  The Loan Documents embody the entire agreement between the parties and supersede all prior agreements and understandings, if any, relating to the subject matter hereof and thereof, and this Credit Agreement and the other Loan Documents may be amended only by an instrument in writing executed by the parties hereto in accordance with the terms hereof.

 

14.12. Successors and Assigns.

 

(a) The provisions of this Credit Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns permitted hereby, except that neither the Credit Parties nor any Qualified Borrower may assign or otherwise transfer any of their respective rights or obligations hereunder without the prior written consent of each Lender and no Lender may assign or otherwise transfer any of its rights or obligations hereunder except: (i) to an Eligible Assignee in accordance with the provisions of clause (b) of this Section 14.12; (ii) by way of participation in accordance with the provisions of clause (f) of this Section 14.12; or (iii) by way of pledge or assignment of a security interest subject to the restrictions of clause (h) of this Section 14.12 (and any other attempted assignment or transfer by any party hereto shall be null and void).  Nothing in this Credit Agreement, expressed or implied, shall be construed to confer upon any Person (other than the parties hereto, their respective successors and assigns permitted hereby, Participants to the extent provided in clause (f) of this Section 14.12, and, to the extent expressly contemplated hereby, the Indemnitees) any legal or equitable right, remedy or claim under or by reason of this Credit Agreement.

 

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(b) Any Lender may at any time assign to one or more Eligible Assignees (each, an “Assignee”) all or a portion of its rights and obligations under this Credit Agreement (including all or a portion of its Commitment and the Loans (including for purposes of this clause (b), participations in Letter of Credit Liability) at the time owing to it); provided that: (i) except in the case of an assignment of the entire remaining amount of the assigning Lender’s Commitment and the Loans at the time owing to it or in the case of an assignment to a Lender or an Affiliate of a Lender or an Approved Fund with respect to a Lender, the aggregate amount of the Commitment (which for this purpose includes Loans outstanding thereunder) subject to each such assignment, determined as of the date the Assignment and Assumption Agreement with respect to such assignment is delivered to Administrative Agent or, if “Trade Date” is specified in the Assignment and Assumption Agreement, as of the Trade Date, shall not be less than $2,500,000, and, after such assignment, no Lender shall hold a Commitment of less than $5,000,000; (ii) each partial assignment shall be made as an assignment of a proportionate part of all the assigning Lender’s rights and obligations under this Credit Agreement with respect to the Loans or the Commitment assigned; (iii) any assignment of a Commitment must be approved by Administrative Agent, the Letter of Credit Issuer, and, unless an Event of Default exists and is continuing, Borrower (such approval, in each case, not to be unreasonably withheld or delayed), unless the Person that is the proposed assignee is itself a Program Support Provider or a Lender (whether or not the proposed assignee would otherwise qualify as an Eligible Assignee); (iv) the parties to each assignment shall execute and deliver to Administrative Agent an Assignment and Assumption Agreement, together with a processing and recordation fee as set forth on Schedule 14.12(b) (except in the case of a transfer at the demand of Borrower under Section 14.12 hereof, in which case either Borrower or the transferee Lender shall pay such fee); and (v) each assignment made as a result of a demand by Borrower under Section 14.12 hereof shall be arranged by Borrower after consultation with Administrative Agent and shall be either an assignment of all of the rights and obligations of the assigning Lender under this Credit Agreement or an assignment of a portion of such rights and obligations made concurrently with another assignment or assignments that together constitute an assignment of all of the rights and obligations of the assigning Lender.  Subject to acceptance and recording thereof by Administrative Agent pursuant to clause (e) of this Section 14.12, from and after the effective date specified in each Assignment and Assumption Agreement, the Eligible Assignee thereunder shall be a party to this Credit Agreement and, to the extent of the interest assigned by such Assignment and Assumption Agreement, have the rights and obligations of a Lender under this Credit Agreement, and the assigning Lender thereunder shall, to the extent of the interest assigned by such Assignment and Assumption Agreement, be released from its obligations under this Credit Agreement (and, in the case of an Assignment and Assumption Agreement covering all of the assigning Lender's rights and obligations under this Credit Agreement, such Lender shall cease to be a party hereto but shall continue to be entitled to the benefits of Sections 4.1, 4.4, 4.5 and 14.6 with respect to facts and circumstances occurring prior to the effective date of such assignment).  Upon request, each applicable Borrower Party (at its expense) shall execute and deliver a Note to the Managing Agent of the assignee, and the applicable existing Note or Notes shall be returned to the applicable Borrower Party.  Any assignment or transfer by a Lender of rights or obligations under this Credit Agreement that does not comply with this subsection shall be treated for purposes of this Credit Agreement as a sale by such Lender of a participation in such rights and obligations in accordance with clause (f) of this Section 14.12.

 

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(c) Without limiting the foregoing, a Conduit Lender may, from time to time, with prior or concurrent notice to Borrower and the Administrative Agent, in one transaction or a series of transactions, assign all or a portion of its interest in the Principal Obligation and its rights and obligations under this Agreement and any other Loan Documents to which it is a party to a Conduit Assignee.  Upon and to the extent of such assignment by the Conduit Lender to a Conduit Assignee, (i) such Conduit Assignee shall be the owner of the assigned portion of the Principal Obligation, (ii) the related administrator for such Conduit Assignee will act as the Administrator for such Conduit Assignee, with all corresponding rights and powers, express or implied, granted to the Administrator hereunder or under the other Loan Documents, (iii) such Conduit Assignee (and any related commercial paper issuer, if such Conduit Assignee does not itself issue commercial paper) and their respective Program Support Provider(s) and other related parties shall have the benefit of all the rights and protections provided to the Conduit Lender and its Program Support Provider(s) herein and in the other Loan Documents (including any limitation on recourse against such Conduit Assignee or related parties, any agreement not to file or join in the filing of a petition to commence an insolvency proceeding against such Conduit Assignee, and the right to assign to another Conduit Assignee as provided in this paragraph), (iv) such Conduit Assignee shall assume all (or the assigned or assumed portion) of the Conduit Lender’s obligations, if any, hereunder or any other Loan Document, and the Conduit Lender shall be released from such obligations, in each case to the extent of such assignment, and the obligations of the Conduit Lender and such Conduit Assignee shall be several and not joint, (v) all distributions in respect of the Principal Obligation assigned shall be made to the applicable Managing Agent, on behalf of the Conduit Lender and such Conduit Assignee on a pro rata basis according to their respective interests, (vi) the definition of the term “CP Rate” with respect to the portion of the Principal Obligation funded with commercial paper issued by the Conduit Lender from time to time shall be determined in the manner set forth in the definition of “CP Rate” applicable to the Conduit Lender on the basis of the interest rate or discount applicable to commercial paper issued by such Conduit Assignee (or the related commercial paper issuer, if such Conduit Assignee does not itself issue commercial paper) rather than the Conduit Lender, (vii) the defined terms and other terms and provisions of this Credit Agreement and the other Loan Documents shall be interpreted in accordance with the foregoing, and (viii) if requested by the Managing Agent or Administrator with respect to the Conduit Assignee, the parties will execute and deliver such further agreements and documents and take such other actions as the Managing Agent or such Administrator may reasonably request to evidence and give effect to the foregoing.  No assignment by the Conduit Lender to a Conduit Assignee of all or any portion of its interest in the Principal Obligation shall in any way diminish the related Alternate Lenders’ obligation under Section 2.3 to fund any Loan not funded by the Conduit Lender or such Conduit Assignee or to acquire from the Conduit Lender or such Conduit Assignee all or any portion of its interest in the Principal Obligation pursuant to Section 7.1.

 

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(d) In the event that a Conduit Lender makes an assignment to a Conduit Assignee in accordance with clause (c) above, the related Alternate Lenders: (i) if requested by the related Administrator, shall terminate their participation in the applicable Program Support Agreement to the extent of such assignment, (ii) if requested by the related Administrator, shall execute (either directly or through a participation agreement, as determined by such Administrator) the program support agreement related to such Conduit Assignee, to the extent of such assignment, the terms of which shall be substantially similar to those of the participation or other agreement entered into by such Alternate Lender with respect to the applicable Program Support Agreement (or which shall be otherwise reasonably satisfactory to the related Administrator), (iii) if requested by such Conduit Lender, shall enter into such agreements as requested by the Conduit Lender pursuant to which they shall be obligated to provide funding to such Conduit Assignee on the same terms and conditions as is provided for in this Agreement in respect of such Conduit Lender (or which agreements shall be otherwise reasonably satisfactory to Borrower and such Conduit Lender), and (iv) shall take such actions as the Administrator shall reasonably request in connection therewith.

 

(e) Administrative Agent, acting solely for this purpose as an agent of the Credit Parties, shall maintain at Administrative Agent’s Office a copy of each Assignment and Assumption Agreement delivered to and accepted by it and a register for the recordation of the names and addresses of the Lenders, and the Commitments of, and principal amounts of the Loans and Letter of Credit Liability owing to, each Lender pursuant to the terms hereof from time to time (the “Register”).  The entries in the Register shall be conclusive, and each Credit Party, Administrative Agent, Agents and the Lenders may treat each Person whose name is recorded in the Register pursuant to the terms hereof as a Lender hereunder for all purposes of this Credit Agreement.  The Register shall be available for inspection and copying by the Credit Parties, any Agent and any Lender, at any reasonable time and from time to time upon reasonable prior notice. Upon the consummation of any assignment in accordance with this Section 14.12, Schedule 14.12(b) shall automatically be deemed amended (to the extent required) by Administrative Agent to reflect the name and address of the applicable Assignee.

 

(f) Any Lender may at any time, without the consent of, or notice to, any Credit Party or Administrative Agent, sell participations to any Person (other than a natural person or any Credit Party or any Affiliate thereof) (each, a “Participant”) in all or a portion of such Lender’s rights and/or obligations under this Credit Agreement (including all or a portion of its Commitment and/or the Loans (including such Lender’s participations in Letter of Credit Liability) owing to it); provided that: (i) such Lender’s obligations under this Credit Agreement shall remain unchanged; (ii) such Lender shall remain solely responsible to the other parties hereto for the performance of such obligations; and (iii) each Credit Party, Administrative Agent and the other Lenders shall continue to deal solely and directly with such Lender in connection with such Lender’s rights and obligations under this Credit Agreement.  Any agreement or instrument pursuant to which a Lender sells such a participation shall provide that such Lender shall retain the sole right to enforce this Credit Agreement and to approve any amendment, modification or waiver of any provision of this Credit Agreement; provided that such agreement or instrument may provide that such Lender will not, without the consent of the Participant, agree to any amendment, waiver or other modification described in Section 14.1(a), 14.1(b)(ii) or 14.1(b)(v) that directly affects such Participant.  Subject to clause (g) of this Section 14.12, each Borrower Party agrees that each Participant shall be entitled to the benefits of Sections 4.1, 4.4 and 4.5 to the same extent as if it were a Lender and had acquired its interest by assignment pursuant to clause (b) of this Section 14.12.  To the extent permitted by law, each Participant also shall be entitled to the benefits of the right of setoff under application law as though it were a Lender, provided such Participant agrees to be subject to Sections 14.2 and 14.3 as though it were a Lender.

 

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(g) A Participant shall not be entitled to receive any greater payment under Sections 4.1 or 4.4 than the applicable Lender would have been entitled to receive with respect to the participation sold to such Participant, unless the sale of the participation to such Participant is made with Borrower’s prior written consent.

 

(h) Any Lender may at any time pledge or assign a security interest in all or any portion of its rights under this Credit Agreement (including under its Note, if any) to secure obligations of such Lender, including any pledge or assignment to secure obligations to a Federal Reserve Bank; provided that no such pledge or assignment shall release such Lender from any of its obligations hereunder or substitute any such pledgee or assignee for such Lender as a party hereto.

 

(i) Notwithstanding anything to the contrary contained herein, if at any time Bank of America assigns all of its Commitment and Loans pursuant to clause (b) above, Bank of America may, upon thirty (30) days’ notice to the Borrower Parties and the Lenders, resign as Administrative Agent and Letter of Credit Issuer.  In the event of any such resignation, Lenders shall appoint from among the Lenders a successor Administrative Agent and Letter of Credit Issuer hereunder (subject, except when an Event of Default exists, to the consent of Borrower, not to be unreasonably withheld); provided, however, that no failure by Lenders to appoint any such successor shall affect the resignation of Bank of America as Letter of Credit Issuer and Administrative Agent.  If Bank of America resigns as Letter of Credit Issuer and Administrative Agent, it shall retain all the rights and obligations of the Letter of Credit Issuer hereunder with respect to all Letters of Credit outstanding as of the effective date of its resignation as Letter of Credit Issuer and all Letter of Credit Liability with respect thereto (including the right to require the Lenders to fund payment of any amount drawn under a Letter of Credit issued by Bank of America as Letter of Credit Issuer hereunder.

 

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14.13. Lender Default.  If for any reason any Lender shall fail or refuse to abide by its obligations hereunder, and such Lender shall not have cured such failure or refusal within five (5) Business Days of its occurrence (a “Lender Default”), then, in addition to the rights and remedies that may be available to Administrative Agent, Lenders, or any Borrower Party at law or in equity, such Lender’s right to vote on matters related to this Credit Agreement, and to participate in the administration of the Loans, the Letters of Credit, and this Credit Agreement, shall be suspended.  Administrative Agent shall have the right, but not the obligation, in its sole discretion, to acquire at par all of such Lender’s Commitment, including its Pro Rata Share in the Obligations under this Credit Agreement.  In the event that Administrative Agent does not exercise its right to so acquire all of such Lender’s interests, then each Lender that is not a Defaulting Alternate Lender (each, a “Current Party”) shall then, thereupon, have the right, but not the obligation, in its sole discretion to acquire at par (or if more than one Current Party exercises such right, each Current Party shall have the right to acquire, pro rata) such Lender’s Commitment, including its Pro Rata Share in the outstanding Obligations under this Credit Agreement.

 

14.14. Replacement of Lender.  Following a demand by an Alternate Lender for payment of any amounts under Section 4.1 or 4.3, or if any Alternate Lender is a Defaulting Alternate Lender (in either case, an “Affected Lender”), Borrower may elect to replace such Affected Lender as an Alternate Lender party to this Credit Agreement with an Eligible Assignee procured by Borrower, provided that no Potential Default nor Event of Default shall have occurred and be continuing at the time of such replacement, and provided further that, concurrently with such replacement such Eligible Assignee shall agree to purchase for cash the Loans and other Obligations due to the Affected Lender pursuant to an Assignment and Assumption Agreement and to become an Alternate Lender for all purposes under this Credit Agreement and to assume all obligations of the Affected Lender to be terminated as of such date.  Any such Affected Lender shall assign its rights and interests hereunder, such assignment to be effected in compliance with the requirements of Section 14.12(b) hereof.  In the event that such an assignment occurs, the Eligible Assignee (i) if requested by the applicable Administrator, shall execute (either directly or through a participation agreement, as determined by the Administrator) a Program Support Agreement related to the applicable Conduit Lender, to the extent of such assignment, the terms of which shall be substantially similar to those of the participation or other agreement by the assigning Alternate Lender with respect to the applicable Program Support Agreement (or which shall be otherwise reasonably satisfactory to the applicable Administrator), and (ii) shall take such actions as the Agents shall reasonably request in connection therewith.

 

14.15. Maximum Interest.  Regardless of any provision contained in any of the Loan Documents, Lenders shall never be entitled to receive, collect or apply as interest on the Obligations any amount in excess of the Maximum Rate, and, in the event that Lenders ever receive, collect or apply as interest any such excess, the amount which would be excessive interest shall be deemed to be a partial prepayment of principal and treated hereunder as such; and, if the principal amount of the Obligations is paid in full, any remaining excess shall forthwith be paid to the applicable Borrower Party.  In determining whether or not the interest paid or payable under any specific contingency exceeds the Maximum Rate, each Borrower Party and Lenders shall, to the maximum extent permitted under applicable law: (a) characterize any nonprincipal payment as an expense, fee or premium rather than as interest; (b) exclude voluntary prepayments and the effects thereof; and (c) amortize, prorate, allocate and spread, in equal parts, the total amount of interest throughout the entire contemplated term of the Obligations so that the interest rate does not exceed the Maximum Rate; provided that, if the Obligations are paid and performed in full prior to the end of the full contemplated term thereof, and if the interest received for the actual period of existence thereof exceeds the Maximum Rate, Lenders shall refund to the applicable Borrower Party the amount of such excess or credit the amount of such excess against the principal amount of the Obligations and, in such event, Lenders shall not be subject to any penalties provided by any laws for contracting for, charging, taking, reserving or receiving interest in excess of the Maximum Rate.  As used herein, the term “applicable law” shall mean the law in effect as of the date hereof; provided, however, that in the event there is a change in the law which results in a higher permissible rate of interest, then the Loan Documents shall be governed by such new law as of its effective date.

 

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14.16. Headings.  Section headings are for convenience of reference only and shall in no way affect the interpretation of this Credit Agreement.

 

14.17. Survival.  All representations and warranties made by the Credit Parties and the Qualified Borrowers herein shall survive delivery of the Notes, the making of the Loans and the issuance of the Letters of Credit.

 

14.18. Integration.  This Credit Agreement is intended by the parties as the final, complete and exclusive statement of the transactions evidenced by this Credit Agreement. All prior or contemporaneous promises, agreements and understandings, whether oral or written, are deemed to be superseded by this Credit Agreement, and no party is relying on any promise, agreement or understanding not set forth in this Credit Agreement.

 

14.19. Limited Liability of Investors.  Except with respect to any expenses and losses arising from any Credit Party’s intentional misrepresentation hereunder, fraud or willful misapplication of proceeds in contravention of this Credit Agreement, for which there shall be full recourse to such Credit Party, none of the Investors, including the Managing Member, shall have any personal, partnership, corporate or trust liability for the payment or performance of the Obligations.  Nothing contained in this Section 14.19 or in any of the other provisions of the Loan Documents shall be construed to limit, restrict, or impede the obligations, the liabilities, and indebtedness of Borrower, or of any Investor to make its Capital Contributions to Borrower, Managing Member, Guarantor or Pledgor, in accordance with the terms of the Operating Agreement, Partnership Agreement or the Stockholders Agreement, as applicable, or pursuant to the terms of such Investor’s Investor Letter.  Nothing contained in this Section 14.19 shall be deemed to expressly or implicitly limit or modify the liability of each Qualified Borrower to Lenders under the Qualified Borrower Notes; provided, however, that such liability shall not extend beyond such Qualified Borrower and its properties and assets.  Notwithstanding anything contained in this Section 14.19, the payment and performance of the Obligations shall be fully recourse to each Borrower Party and the payment and performance of the Guaranteed Obligations shall be fully recourse to the Guarantor and, in each case, their properties and assets.

 

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Acadia Strategic Opportunity Fund III LLC

  

104

  

 

14.20. Confidentiality.  Administrative Agent, each Managing Agent, each Administrator and each Lender agrees to maintain the confidentiality of the Information (as defined below), except that Information may be disclosed: (a) to its and its Affiliates’ respective partners, directors, officers, employees, representatives, advisors and agents, including accountants, legal counsel and other advisors (it being understood that the Persons to whom such disclosure is made will be informed of the confidential nature of such Information and instructed to keep such Information confidential and to use such Information only in connection with this facility); (b) to the extent requested by any regulatory authority; (c) to the extent  required by applicable laws or regulations or by any subpoena or similar legal process; (d) to any other party to this Credit Agreement; (e) in connection with the exercise of any remedies hereunder or any suit, action or proceeding relating to this Credit Agreement or the enforcement of rights hereunder; (f) subject to an agreement containing provisions substantially the same as those of this Section 13.21, to: (i) any Eligible Assignee of or Participant in, or any prospective Eligible Assignee of or Participant in, any of its rights or obligations under this Credit Agreement; or (ii) any direct or indirect contractual counterparty or prospective counterparty (or such contractual counterparty’s or prospective counterparty’s professional advisor) to any credit derivative transaction relating to obligations of the Borrower Parties; (g) with the consent of the applicable Borrower; (h) to the extent such Information: (x) becomes publicly available other than as a result of a breach of this Section 14.20 or (y) becomes available to Administrative Agent, any Managing Agent, any Administrator or any Lender on a nonconfidential basis from a source other than a Credit Party; or (i) to the National Association of Insurance Commissioners or any other similar organization or any rating agency, Commercial Paper dealer, provider of credit enhancement or liquidity to such Conduit Lender or any Person providing financing to, or holding equity interest in, such Conduit Lender, any Program Support Provider, any Conduit Collateral Agent and to any officers, directors, employees, outside accountants and attorneys of any of the foregoing, provided that such recipient has been advised of the confidential nature of such information and agrees to be bound by the provisions of this Section 14.20.  For the purposes of this Section 14.20, “Information” means all information received from any Credit Party, other than any such information that is available to Administrative Agent, any Managing Agent, any Administrator or any Lender on a nonconfidential basis prior to disclosure by such Person; provided that, in the case of information received from any Credit Party after the date hereof, such information is clearly identified in writing at the time of delivery as confidential.  Any Person required to maintain the confidentiality of Information as provided in this Section 14.20 shall be considered to have complied with its obligation to do so if such Person has exercised the same degree of care to maintain the confidentiality of such Information as such Person would accord to its own confidential information.  Administrative Agent, Arranger, each Lender and Agent agrees not to disclose the identity of the Investors in connection with any public disclosure of the transaction contemplated hereby, such as in tombstones or marketing materials.

 

14.21. USA PATRIOT Act Notice.  Each Lender and each Agent (for itself and not on behalf of any Lender) hereby notifies the Credit Parties that pursuant to the requirements of the USA Patriot Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001)) (the “Act”), it is required to obtain, verify and record information that identifies the Credit Parties, which information includes the name and address of the Credit Parties and other information that will allow such Lender or Agent, as applicable, to identify the Credit Parties in accordance with the Patriot Act.

 

Revolving Credit Agreement

Acadia Strategic Opportunity Fund III LLC

  

105

  

 

14.22. Multiple Counterparts.  This Credit Agreement may be executed in any number of counterparts, all of which taken together shall constitute one and the same agreement, and any of the parties hereto may execute this Credit Agreement by signing any such counterpart.

 

14.23. No Bankruptcy Petition Against any Conduit Lender.  Each Credit Party hereby covenants and agrees that, prior to the date which is one year and one day after the payment in full of all outstanding Commercial Paper or other rated indebtedness of a Conduit Lender, it will not institute against, or encourage, cooperate with or join any other Person in instituting against, such Conduit Lender any bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings under the law of the United States or any state of the United States.  The provisions of this Section 14.23 shall survive the termination of this Credit Agreement.

 

14.24. No Recourse Against any Conduit Lender.  Notwithstanding anything to the contrary contained in this Credit Agreement, the obligations of each Conduit Lender under this Credit Agreement and all other Loan Documents are solely the corporate obligations of such Conduit Lender and shall be payable solely to the extent of funds received by such Conduit Lender from the Credit Parties in accordance herewith or from any party to any Loan Document in accordance with the terms thereof in excess of funds necessary to pay such Conduit Lender’s matured and maturing Commercial Paper or other rated indebtedness and, to the extent funds are not available to pay such obligations, the claims relating thereto shall not constitute a claim against such Conduit Lender but shall continue to accrue.  The payment of any claim (as defined in Section 101 of Title 11 of the Bankruptcy Code) of any party to this Credit Agreement or any other Loan Document against a Conduit Lender shall be subordinated to the payment in full of all of such Conduit Lender’s Commercial Paper and other rated indebtedness.  No recourse under or with respect to any obligation, covenant or agreement of any Conduit Lender as contained in this Credit Agreement or any other agreement, instrument or document entered into by it pursuant hereto or in connection herewith shall be had against any manager or administrator of such Person or any incorporator, stockholder, member, officer, employee or director of such Person or of any such manager or administrator, as such, by the enforcement of any assessment or by any legal or equitable proceeding, by virtue of any statute or otherwise.

 

Remainder of Page Intentionally Left Blank

Signature Pages Follow.

 

 

 

 

 

 

 

Revolving Credit Agreement

Acadia Strategic Opportunity Fund III LLC

  

106

  

 

IN WITNESS WHEREOF, the parties hereto have caused this Credit Agreement to be duly executed as of the day and year first above written.

  

	 	
BORROWER:

	 	  	  
	 	
ACADIA STRATEGIC OPPORTUNITY FUND III LLC,

	 	
a Delaware limited liability company

	 	  	  
	 	
By:

	
/s/ Robert Masters

	 	  	
Name: Robert Masters

	 	  	
Title: Senior Vice President

	 	  	  
	 	  	  
	 	
MANAGING MEMBER:

	 	  	  
	 	
ACADIA REALTY ACQUISITION III LLC,

	 	
a Delaware limited liability company

	 	  	  
	 	
By:

	
/s/ Robert Masters

	 	  	
Name: Robert Masters

	 	  	
Title: Senior Vice President

	 	  	  
	 	  	  
	 	
PLEDGOR:

	 	  	  
	 	
ACADIA INVESTORS III, INC.,

	 	
a Maryland corporation

	 	  	  
	 	
By:

	
/s/ Robert Masters

	 	  	
Name: Robert Masters

	 	  	
Title: Senior Vice President

	 	  	  
	 	  	  
	 	
GUARANTOR:

	 	  	  
	 	
 ACADIA REALTY LIMITED PARTNERSHIP,

	 	
 a Delaware limited partnership

	 	  	  
	 	
  By:

	
ACADIA REALTY TRUST,

	 	  	
its General Partner

	 	  	  
	 	  	
By: /s/ Robert Masters

	 	  	
       Name: Robert Masters

	 	
 

	
       Title: Senior Vice President

Signature Page to Revolving Credit Agreement

  

  

  

 

	 	ADMINISTRATIVE AGENT:
	  	  
	  	
BANK OF AMERICA, N.A., as

	  	
Administrative Agent

	  	  
	  	  
	  	
By: /s/ Jeremy Grubb

	  	
Name: Jeremy Grubb

	  	
Title: Vice President

Signature Page to Revolving Credit Agreement

  

  

  

 

	  	
MANAGING AGENT AND ADMINISTRATOR:

	  	  
	  	
BANK OF AMERICA, N.A., as Managing Agent 

for the YC SUSI Lender Group and as 

Administrator for YC SUSI Trust

	  	  
	  	
By: /s/ Jeremy Grubb

	  	
Name: Jeremy Grubb

	  	
Title: Vice President

Signature Page to Revolving Credit Agreement

  

  

  

 

	  	
LENDERS:

	  	  
	  	
BANK OF AMERICA, N.A.,

	  	
as an Alternate Lender for the YC SUSI Lender Group

	  	  
	  	
By: /s/ Jeremy Grubb

	  	
Name: Jeremy Grubb

	  	
Title: Vice President

 

Signature Page to Revolving Credit Agreement

  

  

  

 

	  	
YC SUSI TRUST, as Conduit Lender

	  	  
	  	
By: /s/ Jeremy Grubb

	  	
Name: Jeremy Grubb

	  	
Title: Vice President

Signature Page to Revolving Credit Agreement

  

  

  

 

Schedule 1.1

 

Commitments

 

	
Alternate Lender

	
Commitment

	
Bank of America, N.A.

	
$75,000,000

 

 

 

 

 

 

 

Schedule to Revolving Credit Agreement

 

 

 

 

Schedule 14.7

 

Addresses

 

 

 

Bank of America

 

Bank of America, N.A., as Administrative Agent

NC1-027-19-01

214 North Tryon Street

Charlotte, North Carolina 28255

Attention:    Dan Hattendorf

Telephone:  (704) 388-3113

Facsimile:   (704) 388-9211

 

With copy to:

 

Bank of America, N.A., as Administrative Agent

NC1-027-19-01

214 North Tryon Street

Charlotte, NC 28255

Attention:                      Brian Williams

Telephone:                    (704) 683-4747

Telecopy:                      (704) 968-1215

 

YC SUSI Trust

 

YC SUSI Trust

c/o Bank of America, N.A.

NC1-027-19-01

214 North Tryon Street

Charlotte, North Carolina 28255

Attention:    Dan Hattendorf

Telephone:  (704) 388-3113

Facsimile:   (704) 388-9211

 

With copy to:

 

YC SUSI Trust

c/o Bank of America, N.A.

NC1-027-19-01

214 North Tryon Street

Charlotte, NC 28255

Attention:                      Brian Williams

Telephone:                     (704) 683-4747

Telecopy:                       (704) 968-1215

 

Schedule to Revolving Credit Agreement

 

 

 

 

Schedule 14.12(b)

 

Processing and Recordation Fees

 

The Administrative Agent will charge the applicable Lenders a processing and recordation fee (an “Assignment Fee”) in the amount of $2,500 for each assignment; provided, however, that in the event of two or more concurrent assignments to members of the same Assignee Group (which may be effected by a suballocation of an assigned amount among members of such Assignee Group) or two or more concurrent assignments by members of the same Assignee Group to a single Eligible Assignee (or to an Eligible Assignee and members of its Assignee Group), the Assignment Fee will be $2,500 plus the amount set forth below:

 

	
Transaction

	
Assignment Fee

	 	 
	
First four concurrent assignments or suballocations to members of an Assignee Group (or from members of an Assignee Group, as applicable)

	
-0-

	
Each additional concurrent assignment or suballocation to a member of such Assignee Group (or from a member of such Assignee Group, as applicable)

	
$500

 

 

 

 

 

 

 

 

 

Schedule to Revolving Credit Agreement

 

 

 

 

EXHIBIT A

to Revolving Credit Agreement

by and among

Acadia Strategic Opportunity Fund III LLC, as Borrower,

Acadia Realty Acquisition III LLC, as Managing Member,

Acadia Realty Limited Partnership, as Guarantor,

Acadia Investors III, Inc., as Pledgor,

Bank of America, N.A., as Administrative Agent,

Banc of America Securities LLC, as Sole Lead Arranger and Sole Book Manager,

YC SUSI Trust, as Conduit Lender,

Bank of America, N.A., as an Administrator, Alternate Lender and Managing Agent,

and

the other Conduit Lenders, Administrators, Alternate Lenders and Managing Agents from

time to time party thereto

SCHEDULE OF INVESTORS AND COMMITMENTS

(as of October 10, 2007)

 

[See Attached Spreadsheet]

 

Exhibit A

 

 

 

 

 

 

 

 

 

 

 

  

  

  

 

EXHIBIT B-1

to Revolving Credit Agreement

by and among

Acadia Strategic Opportunity Fund III LLC, as Borrower,

Acadia Realty Acquisition III LLC, as Managing Member,

Acadia Realty Limited Partnership, as Guarantor,

Acadia Investors III, Inc., as Pledgor,

Bank of America, N.A., as Administrative Agent,

Banc of America Securities LLC, as Sole Lead Arranger and Sole Book Manager,

YC SUSI Trust, as Conduit Lender,

Bank of America, N.A., as an Administrator, Alternate Lender and Managing Agent,

and

the other Conduit Lenders, Administrators, Alternate Lenders and Managing Agents from

time to time party thereto

 

NOTE

 

 

	$300,000,000	 	New York, New York	 	 	, 2007

 

                                                 

1.           FOR VALUE RECEIVED, ACADIA STRATEGIC OPPORTUNITY FUND III LLC, a Delaware limited liability company ("Maker"), hereby unconditionally promises to pay to the order of BANK OF AMERICA, N.A. ("Payee"), as Managing Agent for each of the Lenders in the YC SUSI Lender Group under the Credit Agreement referred to below, the principal sum of THREE HUNDRED MILLION DOLLARS ($300,000,000), or, if less, the unpaid principal amount of the Loans of Payee, together with interest thereon, in lawful money of the United States. Capitalized terms not defined herein shall have the meanings assigned to such terms in the Credit Agreement referred to below.

 

2.            The unpaid principal amount of this Note (this "Note") shall be payable in accordance with the terms of Sections 3.2, 3.4 and 14.15 of the Credit Agreement.

 

3.            The unpaid principal amount of this Note shall bear interest from the date of each Borrowing until maturity in accordance with Sections 2.4 and 14.15 of the Credit Agreement. Interest on this Note shall be payable in accordance with Sections 3.3, 3.4 and 14.15 of the Credit Agreement.

 

4.            All Borrowings of Loans hereunder, and all payments made with respect thereto, may be recorded by Payee from time to time on the grid which may be attached hereto or Payee may record such information by such other method as Payee may generally employ in the course of its lending activities; provided, however, that failure to make any such entry shall in no way reduce or diminish Maker's obligations hereunder. The aggregate unpaid amount of all Borrowings of Loans set forth on the grid which may be attached hereto shall be rebuttably presumptive evidence of the unpaid principal amount of this Note.

 

5.           This Note has been executed and delivered pursuant to that certain Revolving Credit Agreement (as amended, modified, supplemented, or restated from time to time, the ("Credit Agreement"), dated as of October 10, 2007, by and among Maker, Acadia Realty Acquisition III LLC, a Delaware limited liability company, as Managing Member, Acadia Realty Limited Partnership, a Delaware limited partnership, as Guarantor, Acadia Investors III, Inc., a Maryland corporation, as Pledgor, Bank of America, N.A., as Administrative Agent, Banc of America Securities LLC, as Sole Lead Arranger and Sole Book Manager, YC SUSI Trust, as Conduit Lender, Bank of America, N.A., as an Administrator, Alternate Lender and Managing Agent and the other Conduit Lenders, Administrators, Alternate Lenders and Managing Agents from time to time party thereto, and is one of the "Notes" referred to therein. This Note evidences Loans made under the Credit Agreement and the holder of this Note shall be entitled to the benefits provided in the Credit Agreement. Reference is hereby made to the Credit Agreement for a statement of: (a) the obligation of Payee to make advances hereunder; (b) the prepayment rights and obligations of Maker; (c) the collateral for the repayment of this Note; and (d) the events upon which the maturity of this Note may be accelerated. Maker may borrow, repay and reborrow hereunder upon the terms and conditions specified in the Credit Agreement.

 

  

Note

  

 

6.            If this Note, or any installment or payment due hereunder, is not paid when due, whether at maturity or by acceleration, or if it is collected through a bankruptcy, probate or other court, whether before or after maturity, Maker agrees to pay all out-of-pocket costs of collection, including, but not limited to, reasonable attorneys' fees incurred by the holder hereof and costs of appeal as provided for in the Credit Agreement. All past-due principal of, and, to the extent permitted by applicable law, past-due interest on this Note, shall bear interest until paid at the Default Rate as provided for in the Credit Agreement.

 

7.            Maker and all sureties, endorsers, guarantors and other parties ever liable for payment of any sums payable pursuant to the terms of this Note, jointly and severally waive demand, presentment for payment, protest, notice of protest, notice of acceleration and notice of intent to accelerate, diligence in collection, the bringing of any suit against any party, and any notice of or defense on account of any extensions, renewals, partial payment, or any releases or substitutions of any security, or any delay, indulgence, or other act of any trustee or any holder hereof, whether before or after maturity.

 

8.            Pursuant to Section 5-1401 of the New York General Obligations Law, the substantive laws of the State of New York, without regard to the choice of law principles that might otherwise apply, and the applicable federal laws of the United States of America, shall govern the validity, construction, enforcement and interpretation of this Note.

 

9.            Reference is hereby made to Section 14.19 of the Credit Agreement regarding the non-personal liability of Managing Member or any other Investor, the provisions of which are hereby incorporated by reference in this Note as if fully set forth herein, for the payment and performance of Borrower's obligations hereunder.

 

REMAINDER OF PAGE INTENTIONALLY LEFT BLANK.

SIGNATURE PAGE FOLLOWS.

 

  

Note

  

 

	  	
BORROWER:

	  	  
	  	
ACADIA STRATEGIC OPPORTUNITY FUND III LLC,

	  	
a Delaware limited liability company

	  	  
	  	  
	  	
By: /s/ Robert Masters

	  	
Name: Robert Masters

	  	
Title: Senior Vice President

 

  

Exhibit B-1

  

 

	
Date

	
Borrowing Amount

	
Payment

	
Aggregate

Unpaid Amount

	  	  	  	  
	  	  	  	  
	  	  	  	  
	  	  	  	  
	  	  	  	  
	  	  	  	  
	  	  	  	  
	  	  	  	  
	  	  	  	  
	  	  	  	  
	  	  	  	  
	  	  	  	  
	  	  	  	  
	  	  	  	  
	  	  	  	  
	  	  	  	  
	  	  	  	  
	  	  	  	  

 

 

	2 

Exhibit B-1

  

  

 

EXHIBIT B-2

to Revolving Credit Agreement

by and among

Acadia Strategic Opportunity Fund III LLC, as Borrower,

Acadia Realty Acquisition III LLC, as Managing Member,

Acadia Realty Limited Partnership, as Guarantor,

Acadia Investors III, Inc., as Pledgor,

Bank of America, N.A., as Administrative Agent,

Banc of America Securities LLC, as Sole Lead Arranger and Sole Book Manager,

YC SUSI Trust, as Conduit Lender,

Bank of America, N.A., as an Administrator, Alternate Lender and Managing Agent,

and

the other Conduit Lenders, Administrators, Alternate Lenders and Managing Agents from

time to time party thereto

 

FORM OF QUALIFIED BORROWER NOTE

 

 

	$ 	 	 	New York, New York	 	,	 

 

1.            FOR VALUE RECEIVED, the undersigned _____________________a (the "Maker"), hereby unconditionally promises to pay to the order of BANK OF AMERICA, N.A. ("Payee"), as Managing Agent for each of the Lenders in the Ranger Lender Group under the Credit Agreement referred to below, the principal sum of _______________($_____ ), or, if less, the unpaid principal amount of the Loans of Payee, together with interest thereon, in lawful money of the United States. Capitalized terms not defined herein shall have the meanings assigned to such terms in the Credit Agreement referred to below.

 

2.            The unpaid principal amount of this Note (this "Note") shall be payable in accordance with the terms of Sections 3.2, 3.4 and 14.15 of the Credit Agreement.

 

3.            The unpaid principal amount of this Note shall bear interest from the date of each Borrowing until maturity in accordance with Sections 2.4 and 14.15 of the Credit Agreement. Interest on this Note shall be payable in accordance with Sections 3.3, 3.4 and 14.15 of the Credit Agreement.

 

4.            All Borrowings of Loans hereunder, and all payments made with respect thereto, may be recorded by Payee from time to time on the grid which may be attached hereto or Payee may record such information by such other method as Payee may generally employ in the course of its lending activities; provided, however, that failure to make any such entry shall in no way reduce or diminish Maker's obligations hereunder. The aggregate unpaid amount of all Borrowings of Loans set forth on the grid which may be attached hereto shall be rebuttably presumptive evidence of the unpaid principal amount of this Note.

 

5.            This Note has been executed and delivered pursuant to that certain Revolving Credit Agreement (as amended, modified, supplemented, or restated from time to time, the "Credit Agreement") dated as of October 10, 2007, by and among Acadia Strategic Opportunity Fund III LLC, a Delaware limited liability company ("Borrower"), Acadia Realty Acquisition III LLC, a Delaware limited liability company, as Managing Member, Acadia Realty Limited Partnership, a Delaware limited partnership, as Guarantor, Acadia Investors III, Inc., a Maryland corporation, as Pledgor, Bank of America, N.A., as Administrative Agent, Banc of America Securities LLC, as Sole Lead Arranger and Sole Book Manager, YC SUSI Trust, as Conduit Lender, Bank of America, N.A., as an Administrator, Alternate Lender and Managing Agent and the other Conduit Lenders, Administrators, Alternate Lenders and Managing Agents from time to time party thereto, and is one of the "Qualified Borrower Notes" referred to therein. This Note evidences Loans made under the Credit Agreement and the holder of this Note shall be entitled to the benefits provided in the Credit Agreement. Reference is hereby made to the Credit Agreement for a statement of: (a) the obligation of Payee to make advances hereunder; (b) the prepayment rights and obligations of Maker; (c) the collateral for the repayment of the Note; and (d) the events upon which the maturity of this Note may be accelerated. Maker may borrow, repay and reborrow hereunder upon the terms and conditions specified in the Credit Agreement. The repayment of this Note is secured by a guaranty of Borrower. Notwithstanding the foregoing, should any of the events described in Sections 12.1(g) or 12.1(2) of the Credit Agreement occur with respect to Maker, then the principal of or accrued interest on this Note shall become immediately due and payable without presentment, demand, protest or other notice of any kind, all of which are hereby waived by Maker.

 

  

Exhibit B-2

  

 

6.            If this Note, or any installment or payment due hereunder, is not paid when due, whether at maturity or by acceleration, or if it is collected through a bankruptcy, probate or other court, whether before or after maturity, Maker agrees to pay all out-of-pocket costs of collection, including, but not limited to, reasonable attorneys' fees incurred by the holder hereof and costs of appeal as provided for in the Credit Agreement. All past-due principal of, and, to the extent permitted by applicable law, past-due interest on this Note, shall bear interest until paid at the Default Rate as provided for in the Credit Agreement.

 

7.            Maker and all sureties, endorsers, guarantors and other parties ever liable for payment of any sums payable pursuant to the terms of this Note, jointly and severally waive demand, presentment for payment, protest, notice of protest, notice of acceleration, notice of intent to accelerate, diligence in collection, the bringing of any suit against any party, and any notice of or defense on account of any extensions, renewals, partial payment, or any releases or substitutions of any security, or any delay, indulgence, or other act of any trustee or any holder hereof, whether before or after maturity.

 

8.            Pursuant to Section 5-1401 of the New York General Obligations Law, the substantive laws of the State of New York, without regard to the choice of law principles that might otherwise apply, and the applicable federal laws of the United States of America, shall govern the validity, construction, enforcement and interpretation of this Note.

 

9.                      By its execution hereof, Maker hereby agrees to be bound by the terms and conditions of the Credit Agreement as if it were a signature party thereto.

 

10.                      Reference is hereby made to Section 14.19 of the Credit Agreement regarding the non-personal liability of Managing Member or any other Investor, the provisions of which are hereby incorporated by reference in this Note as if fully set forth herein, for the payment and performance of Maker's obligations hereunder.

 

REMAINDER OF PAGE INTENTIONALLY LEFT BLANK.

SIGNATURE PAGE FOLLOWS.

 

2

  

Exhibit B-2

  

 

	  	
BORROWER:

	  	  
	  	
[QUALIFIED BORROWER]

	  	  
	  	  
	  	
By: 

	  	
Name: 

	  	
Title:

 

3

  

Exhibit B-2

  

 

	
Date

	
Borrowing Amount

	
Payment

	
Aggregate

Unpaid Amount

	  	  	  	  
	  	  	  	  
	  	  	  	  
	  	  	  	  
	  	  	  	  
	  	  	  	  
	  	  	  	  
	  	  	  	  
	  	  	  	  
	  	  	  	  
	  	  	  	  
	  	  	  	  
	  	  	  	  
	  	  	  	  
	  	  	  	  
	  	  	  	  
	  	  	  	  

 

  

Exhibit B-2

  

 

EXHIBIT B-3

to Revolving Credit Agreement

by and among

Acadia Strategic Opportunity Fund III LLC, as Borrower,

Acadia Realty Acquisition III LLC, as Managing Member,

Acadia Realty Limited Partnership, as Guarantor,

Acadia Investors III, Inc., as Pledgor,

Bank of America, N.A., as Administrative Agent,

Banc of America Securities LLC, as Sole Lead Arranger and Sole Book Manager,

YC SUSI Trust, as Conduit Lender,

Bank of America, N.A., as an Administrator, Alternate Lender and Managing Agent,

and

the other Conduit Lenders, Administrators, Alternate Lenders and Managing Agents from

time to time party thereto

 

FORM OF QUALIFIED BORROWER LETTER OF CREDIT NOTE

 

 

	 	New York, New York	 	, 	 

 

 

1.           FOR VALUE RECEIVED, _____________, a_________________ ("Maker"), hereby unconditionally promises to pay to the order of BANK OF AMERICA, N.A. ("Payee"), as Managing Agent for each of the Lenders in the [_______]Lender Group under the Credit Agreement referred to below, the principal sum of_______________ ($_____), together with interest thereon, or, if less, so much thereof as may be drawn under the Letter of Credit (as hereinafter defined), together with interest on the unpaid principal amount from day to day remaining from the date of advance until maturity as set forth below, in lawful money of the United States. Capitalized terms not defined herein shall have the meanings assigned to such terms in the Credit Agreement referred to below.

 

2.            The unpaid principal amount of this Note (this "Note") shall be payable in accordance with the terms of Sections 3.2, 3.4 and 14.15 of the Credit Agreement.

 

3.            The unpaid principal amount of this Note shall bear interest from the date of each Borrowing until maturity in accordance with Sections 2.4 and 14.15 of the Credit Agreement. Interest on this Note shall be payable in accordance with Sections 3.3, 3.4 and 14.15 of the Credit Agreement.

 

4.            All Borrowings of Loans hereunder, and all payments made with respect thereto, may be recorded by Payee from time to time on the grid which may be attached hereto or Payee may record such information by such other method as Payee may generally employ in the course of its lending activities; provided, however, that failure to make any such entry shall in no way reduce or diminish Maker's obligations hereunder. The aggregate unpaid amount of all Borrowings of Loans set forth on the grid which may be attached hereto shall be rebuttably presumptive evidence of the unpaid principal amount of this Note.

 

  

Exhibit B-3

  

 

5.            This Note has been executed and delivered to evidence advances made to Maker pursuant to that certain Revolving Credit Agreement (as amended, modified, supplemented, or restated from time to time, the ("Credit Agreement") dated as of October 10, 2007, by and. among Acadia Strategic Opportunity Fund III LLC, a Delaware limited liability company ("Borrower"), Acadia Realty Acquisition III LLC, a Delaware limited liability company, as Managing Member, Acadia Realty Limited Partnership, a Delaware limited partnership, as Guarantor, Acadia Investors III, Inc., a Maryland corporation, as Pledgor, Bank of America, N.A., as Administrative Agent, Banc of America Securities LLC, as Sole Lead Arranger and Sole Book Manager, YC SUSI Trust, as Conduit Lender, Bank of America, N.A., as an Administrator, Alternate Lender and Managing Agent and the other Conduit Lenders, Administrators, Alternate Lenders and Managing Agents from time to time party thereto, after a drawing has been made under Letter of Credit No._______dated_____, 200___, issued by for the account of Maker and the benefit of __________(the "Letter of Credit"), and is one of the "Qualified Borrower Letter of Credit Notes" referred to in the Credit Agreement and the holder of this Note shall be entitled to the benefits provided in the Credit Agreement. This Note evidences Loans made during the Commitment Period under the Credit Agreement. Reference is hereby made to the Credit Agreement for a statement of: (a) the obligation of Payee to make advances hereunder; (b) the prepayment rights and obligations of Maker; (c) the collateral for the repayment of the Note; and (d) the events upon which the maturity of this Note may be accelerated. Maker may borrow, repay and reborrow hereunder upon the terms and conditions specified in the Credit Agreement. The repayment of this Note is secured by a guaranty of Borrower. Notwithstanding the foregoing, should any of the events described in Sections 12.1(g) or 12.1(h) of the Credit Agreement occur with respect to Maker, then the principal of or accrued interest on this Note shall become immediately due and payable without presentment, demand, protest or other notice of any kind, all of which are hereby waived by Maker.

 

6.            If this Note, or any installment or payment due hereunder, is not paid when due, whether at maturity or by acceleration, or if it is collected through a bankruptcy, probate or other court, whether before or after maturity, Maker agrees to pay all out-of-pocket costs of collection, including, but not limited to, reasonable attorneys' fees incurred by the holder hereof and costs of appeal. All past-due principal of, and, to the extent permitted by applicable law, past-due interest on this Note, shall bear interest until paid at the Default Rate as provided in the Credit Agreement.

 

7.            Maker and all sureties, endorsers, guarantors and other parties ever liable for payment of any sums payable pursuant to the terms of this Note, jointly and severally waive demand, presentment for payment, protest, notice of protest, notice of acceleration, notice of intent to accelerate, diligence in collection, the bringing of any suit against any party, and any notice of or defense on account of any extensions, renewals, partial payment, or any releases or substitutions of any security, or any delay, indulgence, or other act of any trustee or any holder hereof, whether before or after maturity.

 

8.            Pursuant to Section 5-1401 of the New York General Obligations Law, the substantive laws of the State of New York, without regard to the choice of law principles that might otherwise apply, and the applicable federal laws of the United States of America, shall govern the validity, construction, enforcement and interpretation of this Note.

 

2

  

Exhibit B-3

  

 

9.                      By its execution hereof, Maker hereby agrees to be bound by the terms and conditions of the Credit Agreement as if it were a signature party thereto.

 

10.            Reference is hereby made to Section 14.19 of the Credit Agreement regarding the non-personal liability of Managing Member or any other Investor, the provisions of which are hereby incorporated by reference in this Note as if fully set forth herein, for the payment and performance of Maker's obligations hereunder.

 

REMAINDER OF PAGE INTENTIONALLY LEFT BLANK.

SIGNATURE PAGE FOLLOWS.

 

3

  

Exhibit B-3

  

 

	  	
BORROWER:

	  	  
	  	
[QUALIFIED BORROWER]

	  	  
	  	  
	  	
By: 

	  	
Name: 

	  	
Title:

 

4

  

Exhibit B-3

  

 

	
Date

	
Borrowing Amount

	
Payment

	
Aggregate

Unpaid Amount

	  	  	  	  
	  	  	  	  
	  	  	  	  
	  	  	  	  
	  	  	  	  
	  	  	  	  
	  	  	  	  
	  	  	  	  
	  	  	  	  
	  	  	  	  
	  	  	  	  
	  	  	  	  
	  	  	  	  
	  	  	  	  
	  	  	  	  
	  	  	  	  
	  	  	  	  

 

5

  

Exhibit B-3

  

 

EXHIBIT C

to Revolving Credit Agreement

by and among

Acadia Strategic Opportunity Fund III LLC, as Borrower,

Acadia Realty Acquisition III LLC, as Managing Member,

Acadia Realty Limited Partnership, as Guarantor,

Acadia Investors III, Inc., as Pledgor,

Bank of America, N.A., as Administrative Agent,

Banc of America Securities LLC, as Sole Lead Arranger and Sole Book Manager,

YC SUSI Trust, as Conduit Lender,

Bank of America, N.A., as an Administrator, Alternate Lender and Managing Agent,

and

the other Conduit Lenders, Administrators, Alternate Lenders and Managing Agents from

time to time party thereto

 

FORM OF LOAN NOTICE

 

[DATEI]

Bank of America, N.A., as Administrative Agent

NC1-027-19-01

214 North Tryon Street

Charlotte, NC 28255

	
Attention:

	
Brian S. Williams

	
Telephone:

	
(704) 683-4747

	
Telecopy:

	
(704) 968-1215

Ladies and Gentlemen:

 

This Loan Notice is executed and delivered by Acadia Strategic Opportunity Fund III LLC, a Delaware limited liability company ("Borrower") [and NAME OF QUALIFIED BORROWER], to Bank of America, N.A. ("Administrative Agent"), pursuant to Section 2.3 of that certain Revolving Credit Agreement (as amended, modified, supplemented or restated from time to time, the "Credit Agreement") dated as of October 10, 2007, entered into by and among Borrower, Acadia Realty Acquisition III LLC, a Delaware limited liability company, as Managing Member, Acadia Realty Limited Partnership, a Delaware limited partnership, as Guarantor, Acadia Investors III, Inc., a Maryland corporation, as Pledgor, Administrative Agent, Banc of America Securities LLC, as Sole Lead Arranger and Sole Book Manager, YC SUSI Trust, as Conduit Lender, Bank of America, N.A., as an Administrator, Alternate Lender and Managing Agent and the other Conduit Lenders, Administrators, Alternate Lenders and Managing Agents from time to time party thereto. Capitalized terms not defined herein shall have the meanings assigned to such terms in the Credit Agreement.

 

	
1.

	
Pursuant to Section 2.3(a) of the Credit Agreement, the Borrower hereby requests a Borrowing:

 

  

Exhibit C

  

 

(a)            In the amount of $_________________1

(b)            On________________(a Business Day)

 

2.          In connection with the Borrowing requested herein, Borrower hereby represents, warrants, and certifies to Administrative Agent for the benefit of the Secured Parties that:

 

(a)            As of the date of the Borrowing requested herein, each representation and warranty made by Borrower in Section 9 of the Credit Agreement is true and correct in all material respects both immediately before and, after giving effect to such Borrowing, after, the date of such Borrowing, with the same force and effect as if made on and as of such date (except to the extent of changes in facts or circumstances that have been disclosed to Lenders);

 

(b)            The conditions specified in Sections 8.1, 8.2 (if applicable) and 8.3 have been satisfied as of the date hereof.,

 

(c)            No Event of Default or Potential Default exists and is continuing on and as of the date hereof; and

 

	
  

	
(d)

	
Following the requested Borrowing, the Principal Obligation (the aggregate outstanding principal amount of the Loans plus the Letter of Credit Liability) will be $_ plus accrued, unpaid interest;

 

(e)            After giving effect to such Borrowing the Principal Obligation on and as of such date will not exceed the Available Loan Amount on and as of such date; and

 

(f)            The Borrowing Base Certificate attached hereto as Schedule I is true and correct as of the date hereof.

 

3.             Following are Borrower's (or Qualified Borrower's) instructions for distribution of loan proceeds (appropriate wire instructions, etc.):

 

[Bank Name]

ABA No.: [ABA No.]

Account No.: [Account No.]

Reference No.: [Reference No.]

 

REMAINDER OF PAGE INTENTIONALLY LEFT BLANK.

SIGNATURE PAGE FOLLOWS.

 

 

2 At least $500,000 at all times when there is only one Alternate Lender party to the Credit Agreement and at least $1,000,000 at all times when there are two or more Alternate Lenders party to the Credit Agreement.

 

2

 

  

Exhibit C

  

 

This Loan Notice is executed on ________________________, 20_. The undersigned hereby certifies each and every matter contained herein to be true and correct.

 

	 	
BORROWER:

	  	  
	  	
ACADIA STRATEGIC OPPORTUNITY FUND III

	  	
LLC, a Delaware limited liability company

	  	  
	  	  
	  	
By: /s/ Robert Masters

	  	
Name: Robert Masters

	  	
Title: Senior Vice President

 

	  	
[QUALIFIED BORROWER]

	  	  
	  	  
	  	
By: 

	  	
Name: 

	  	
Title:

 

Signature Page to

Loan Notice

 

  

Exhibit C

  

 

Schedule I

 

(Calculation of Borrowing Base)

 

[See Attached]

 

  

Exhibit C

  

 

EXHIBIT D-1

to Revolving Credit Agreement

by and among

Acadia Strategic Opportunity Fund III LLC, as Borrower,

Acadia Realty Acquisition III LLC, as Managing Member,

Acadia Realty Limited Partnership, as Guarantor,

Acadia Investors III, Inc., as Pledgor,

Bank of America, N.A., as Administrative Agent,

Banc of America Securities LLC, as Sole Lead Arranger and Sole Book Manager,

YC SUSI Trust, as Conduit Lender,

Bank of America, N.A., as an Administrator, Alternate Lender and Managing Agent,

and

the other Conduit Lenders, Administrators, Alternate Lenders and Managing Agents from

time to time party thereto

 

FORM OF REQUEST FOR LETTER OF CREDIT

 

[DATE]

Bank of America, N.A., as Administrative Agent

NC 1-027-19-01

214 North Tryon Street

Charlotte, NC 28255

 

	
Attention:

	
Brian S. Williams

	
Telephone:

	
(704) 683-4747

	
Telecopy:

	
(704) 968-1215

Ladies and Gentlemen:

 

This Request for Letter of Credit (this "Request for Letter of Credit") is executed and delivered by Acadia Strategic Opportunity Fund III LLC, a Delaware limited liability company [and NAME OF QUALIFIED BORROWER] ([together, ] "Applicant"), to Bank of America, N.A. ("Administrative Agent"), pursuant to Section 2.5(b) of that certain Revolving Credit Agreement (as amended, modified, supplemented or restated from time to time, the "Credit Agreement") dated as of October 10, 2007, entered into by and among Applicant, Acadia Realty Acquisition III LLC, a Delaware limited liability company, as Managing Member, Acadia Realty Limited Partnership, a Delaware limited partnership, as Guarantor, Acadia Investors III, Inc., a Maryland corporation, as Pledgor, Administrative Agent, Banc of America Securities LLC, as Sole Lead Arranger and Sole Book Manager, YC SUSI Trust, as Conduit Lender, Bank of America, N.A., as an Administrator, Alternate Lender and Managing Agent and the other Conduit Lenders, Administrators, Alternate Lenders and Managing Agents from time to time party thereto. Capitalized terms not defined herein shall have the meanings assigned to such terms in the Credit Agreement. Applicant has contemporaneously executed and delivered to Administrative Agent for the Letter of Credit Issuer an Application and Agreement for Letter of Credit dated [DATE]. In the event of a conflict between the terms of the Credit Agreement and said Application and Agreement for Letter of Credit, the terms of the Credit Agreement will control.

 

  

Exhibit D-1

  

 

	
1.

	
Applicant hereby requests that the Letter of Credit Issuer [issue] [amend] a Letter of Credit, as follows:

 

For issuances:

 

Proposed Issuance Date (a Business Day): Stated Amount:

Expiration Date:

 

Beneficiary Name and Address:

 

Documents to be Presented

in case of Drawing: [please attach as a schedule hereto]

 

Full Text of Certificate be Presented

in case of Drawing: [please attach as a schedule hereto]

 

For amendments:

 

Letter of Credit to be amended:

 

Proposed Date of Amendment (a Business Day):

 

Nature of the proposed amendment:

 

	
2.

	
In connection with the [issuance] [amendment] of the Letter of Credit requested herein, Applicant hereby represents, warrants, and certifies, as applicable, to Administrative Agent for the benefit of the Secured Parties and the Letter of Credit Issuer that:

 

(a)           As of the date of the [issuance] [amendment] of the Letter of Credit requested herein, each representation and warranty made by Applicant in Section 9 of the Credit Agreement is and will be true and correct in all material respects both immediately before and, after giving effect to such [issuance] [amendment] of the Letter of Credit, after, the date of such issuance of the Letter of Credit, with the same force and effect as if made on and as of such date (except to the extent of changes in facts or circumstances that have been disclosed to Lenders);

 

(b)           No Event of Default, Potential Default or Implicit Borrowing Base Deficit exists and is continuing on and as of the date of the [issuance] [amendment] of the Letter of Credit requested herein, or will result therefrom;

 

2

  

Exhibit D-1

  

 

(c)           As of the date of the [issuance] [amendment] of the Letter of Credit requested herein, the Unfunded Capital Commitment of the Included Investors and the Designated Investors will be $_______________; 

 

(e)           Following the [issuance] [amendment] of a requested Letter of Credit, the Letter of Credit Liability will be $____________________;

 

(f)           After giving effect to the [issuance] [amendment] of the requested Letter of Credit, the Principal Obligation (the aggregate outstanding principal amount of the Loans plus the Letter of Credit Liability) on and as of such date will not exceed the Available Loan Amount on and as of such date;

 

(g)           After giving effect to such issuance of the Letter of Credit, the Letter of Credit Liability will not exceed 75% of the Facility Amount as of the date hereof; and

 

(h)           The calculation of the Borrowing Base attached hereto as Schedule I is true and correct as of the date hereof.

 

REMAINDER OF PAGE INTENTIONALLY LEFT BLANK.

SIGNATURE PAGES FOLLOW.

 

3

  

Exhibit D-1

  

 

This Request for Letter of Credit is executed as of the date first written above. The undersigned hereby certifies each and every matter contained herein to be true and correct.

 

	 	
BORROWER:

	  	  
	  	
ACADIA STRATEGIC OPPORTUNITY FUND III

	  	
LLC, a Delaware limited liability company

	  	  
	  	  
	  	
By: /s/ Robert Masters

	  	
Name: Robert Masters

	  	
Title: Senior Vice President

 

	  	
[QUALIFIED BORROWER]

	  	  
	  	  
	  	
By: 

	  	
Name: 

	  	
Title:

 

Signature Page to

Request for Letter of Credit

 

  

Exhibit D-1

  

 

Applicant and Bank of America hereby agree that the terms and conditions of this Application and Agreement for Letter of Credit shall be controlled by Section 2.5 of the Revolving Credit Agreement, dated October 10, 2007, by and among Acadia Strategic Opportunity Fund III LLC, as Borrower, Acadia Realty Acquisition III LLC, as Managing Member, Acadia Realty Limited Partnership, as Guarantor, Acadia Investors III, Inc., as Pledgor, Bank of America, N.A., as Administrative Agent, the Lenders named therein and the other Persons from time to time party thereto.

 

	 	
APPLICANT:

	  	  
	  	
ACADIA STRATEGIC OPPORTUNITY FUND III

	  	
LLC, a Delaware limited liability company

	  	  
	  	  
	  	
By: /s/ Robert Masters

	  	
Name: Robert Masters

	  	
Title: Senior Vice President

 

	  	
[QUALIFIED BORROWER]

	  	  
	  	  
	  	
By: 

	  	
Name: 

	  	
Title:

 

	  	
ISSUER:

	  	  
	  	BANK OF AMERICA, N.A.
	 	 
	  	
By: 

	  	
Name: 

	  	
Title:

 

  

Exhibit D-1

  

 

Schedule I

 

(Calculation of Borrowing Base)

 

[See Attached]

 

2

  

Exhibit D-1

  

 

EXHIBIT D-2

to Revolving Credit Agreement

by and among

Acadia Strategic Opportunity Fund III LLC, as Borrower,

Acadia Realty Acquisition III LLC, as Managing Member,

Acadia Realty Limited Partnership, as Guarantor,

Acadia Investors III, Inc., as Pledgor,

Bank of America, N.A., as Administrative Agent,

Banc of America Securities LLC, as Sole Lead Arranger and Sole Book Manager,

YC SUSI Trust, as Conduit Lender,

Bank of America, N.A., as an Administrator, Alternate Lender and Managing Agent,

and

the other Conduit Lenders, Administrators, Alternate Lenders and Managing Agents from

time to time party thereto

 

FORM OF LETTER OF CREDIT

 

IRREVOCABLE LETTER OF CREDIT NO. [__]

[Date of Issuance]

 

	
To:

	
[Name of Beneficiary]

[Address of Beneficiary]

 

Ladies and Gentlemen:

 

At the request and for the account of Acadia Strategic Opportunity Fund III LLC (the "Account Party") which we have been advised by the applicant is pursuant to the Credit Agreement between us and the Account Party, dated October 10, 2007, (as amended, modified, supplemented or restated from time to time, the "Credit Agreement"), we hereby establish this Irrevocable Letter of Credit (the "Letter of Credit") in your favor to secure the obligations of the Account Party under [______] in accordance with the following terms and conditions:

 

	
  

	
3.

	
Expiration. This Letter of Credit shall automatically expire at the close of business on the earliest of:

 

	
  

	
1.

	
[Date], but such expiration date shall be automatically extended without amendment for a period of one (1) year from the present or any future expiration date, but in no event later than

	
, unless, at least 30 days before any expiration date, we notify you by registered mail or overnight courier service at the above address, that this Letter of Credit is not extended beyond the current expiration date; and

 

	
  

	
2.

	
our receipt of your certificate in the form of Annex A-1 hereto appropriately completed, together with this Letter of Credit.

 

  

Exhibit D-2

  

 

In the event such expiration date shall not be a Business Day (as hereinafter defined) then this Letter of Credit shall expire on the next succeeding Business Day.

 

	
4.

	
Stated Amount. The aggregate amount available under this Letter of Credit shall be [______] in U.S. Dollars, which amount as from time to time reduced as provided in paragraph 3 is hereinafter referred to as the "Stated Amount."

 

	
5.

	
Reductions in the Stated Amount. The Stated Amount shall be reduced automatically from time to time upon our honoring of a demand for payment hereunder by an amount equal to the amount of such payment. The Stated Amount may also be reduced from time to time at your written directions in the form of Annex A-2 hereto.

 

	
6.

	
Documents To Be Presented. Funds under this Letter of Credit are available to you against a certificate signed by you in the form of Annex A-3 hereto appropriately completed (a "Drawing").

 

	
7.

	
Method and Notice of Presentment. The certificate referenced in paragraph 4 (a "demand for payment") may be delivered to us in person, by mail, by an express delivery service, or by telecopy to our fax number [_______] A demand for payment shall be presented during our business hours on a Business Day prior to the expiration hereof at our office at [____]. As used herein, "Business Day" means any day other than (i) a Saturday or Sunday or (ii) a day on which the New York Stock Exchange is closed or Banks in New York or Charlotte, North Carolina are authorized to close.

	 

 

8.                      Time and Method for Payment.

 

	
  

	
1.

	
If a demand for payment is made on a Business Day to us prior to 11:00 a.m. in strict conformity with the terms and conditions hereof, payment shall be made to you, not later than 3:30 p.m. on the second succeeding Business Day (or third succeeding Business Day if the account is outside the United States) or such later date as you may specify in such demand for payment. All times referenced herein are as of New York, New York time.

 

	
  

	
2.

	
Unless otherwise agreed, payment under this Letter of Credit shall be made in immediately available funds to such bank accounts specified by you in the demand for payment.

 

	
9.

	
Transferability. This Letter of Credit is transferable. Transfer of this Letter of Credit is subject to our receipt of your instructions in the form attached hereto as Annex A-4 accompanied by the original Letter of Credit and all amendment(s), if any. Costs or expenses of such transfer shall be for your account.

 

	
10.

	
GOVERNING LAW AND CUSTOMS. TO THE EXTENT CONSISTENT WITH THE EXPRESS PROVISIONS HEREOF, THIS LETTER OF CREDIT SHALL BE GOVERNED BY THE INTERNATIONAL STANDBY PRACTICES - ISP98 ("ISP98"), AND TO THE EXTENT CONSISTENT WITH THE EXPRESS  PROVISIONS HEREOF AND NOT GOVERNED BY THE ISP98, THIS LETTER OF CREDIT SHALL BE GOVERNED BY THE LAWS OF THE STATE OF NEW YORK.

 

2

  

Exhibit D-2

  

11.           Irrevocability. This Letter of Credit shall be irrevocable.

 

	
12.

	
No Negotiation. A demand for payment under this Letter of Credit shall be presented directly to us and shall not be negotiated to or by any third party.

 

	
13.

	
Address for Communications. Communications with respect to this Letter of Credit shall be in writing and shall be addressed to us at the addresses referenced in paragraph 5, specifically referred thereon to our Irrevocable Letter of Credit No. [_____________].

	
 

 

	
14.

	
Complete Agreement. This Letter of Credit, including Annex A-1 through A-4 hereto, sets forth in full the terms of our undertaking. Reference in this Letter of Credit to other documents or instruments is for identification purposes only and such reference shall not modify or affect the terms hereof or cause such documents or instruments to be deemed incorporated herein.

 

3

  

Exhibit D-2

  

 

We hereby agree with you to honor your demand for payment presented in strict compliance with the terms and conditions of this Letter of Credit.

 

	 	
Very truly yours,

	  	  
	  	BANK OF AMERICA, N.A.
	 	 
	  	
By: 

	  	
Name: 

	  	
Title:

 

4

  

Exhibit D-2

  

 

ANNEX A-1

 

TERMINATION CERTIFICATE REPAYMENT

 

Re:           Irrevocable Letter of Credit No. [__________]

 

The undersigned, a duly authorized officer of [______] (the "Beneficiary"), hereby certifies to Bank of America, N.A. (the "Bank"), with reference to Irrevocable Letter of Credit No. [_______] (the "Letter of Credit", any capitalized term used herein and not defined shall have its respective meaning as set forth in the Letter of Credit) issued by the Bank in favor of the Beneficiary, that the Account Party is not required to maintain the Letter of Credit at this time. 

 

The Letter of Credit is attached hereto and being surrendered to you herewith.

 

IN WITNESS WHEREOF, the Beneficiary has executed and delivered this Certificate as of theday of, 20__.

 

	  	[BENEFICIARY]
	 	 
	  	
By: 

	  	
Name: 

	  	
Title:

 

5

  

Exhibit D-2

  

 

ANNEX A-2

 

REDUCTION CERTIFICATE

 

Re:           Irrevocable Letter of Credit No. [__________]

 

The undersigned, a duly authorized officer of [_______] (the "Beneficiary"), hereby certifies to Bank of America, N.A. (the "Bank"), with reference to Irrevocable Letter of Credit No. [______] (the "Letter of Credit", any capitalized term used herein and not defined shall have its respective meaning as set forth in the Letter of Credit) issued by the Bank in favor of the Beneficiary, that the Stated Amount of the Letter of Credit shall permanently be reduced to U.S. $_____________.

 

 

IN WITNESS WHEREOF, the Beneficiary has executed and delivered this Certificate as of theday of, 20__

 

	  	[BENEFICIARY]
	 	 
	  	
By: 

	  	
Name: 

	  	
Title:

 

6

  

Exhibit D-2

  

 

ANNEX A-3 

 

CERTIFICATE FOR DRAWING

 

 

Re:  Irrevocable Letter of Credit No. [____________]

 

The undersigned, a duly authorized officer of [________] (the "Beneficiary"), hereby demands payment in the amount of U.S. $ [_________] (the "Drawing") from Bank of America, N.A. (the "Bank"), under Irrevocable Letter of Credit No. [_________] (the "Letter of Credit", any capitalized term used herein and not defined shall have its respective meaning as set forth in the Letter of Credit) issued by the Bank in favor of the Beneficiary.

 

The undersigned hereby certifies that:

 

(a)           The Beneficiary is making this Drawing by reason of: [check (i) or (ii) as applicable]

 

(i)            Pursuant to the terms of the  [______] dated [______], between the Beneficiary and [______] (the " [___________] Agreement"); or

 

(ii)            The Beneficiary has received a notice of Non-Renewal from Bank of America, N.A. and has not received a replacement Letter of Credit acceptable to the Beneficiary.

 

(b)           The Beneficiary has not issued a certificate in the form of Annex A-1 to the Letter of Credit.

 

(c)           The Drawing does not exceed the Stated Amount less any previous Drawing.

 

(d)           The proceeds of this Drawing shall be applied solely in accordance with the terms of the [_________] Agreement.

 

(e)           (i) Payment of this demand for payment is requested on or before 3:30 p.m., the second Business Day succeeding (or, if the account specified below is outside the United States, three Business Days after) the Business Day on which this Certificate is received or deemed to have been received by the Bank in accordance with paragraph 5 of the Letter of Credit.

 

(ii) Payment of this demand for payment shall be made to the Beneficiary by credit to the following account:

 

[Beneficiary]

[Account Information]

 

7

  

Exhibit D-2

  

 

IN WITNESS WHEREOF, the Beneficiary has executed and delivered this Certificate as of theday of, 20__

 

	  	[BENEFICIARY]
	 	 
	  	
By: 

	  	
Name: 

	  	
Title:

 

8

  

Exhibit D-2

  

 

ANNEX A-4 

 

TRANSFER FORM

 

___________,200_

 

Bank of America N.A. [applicable address]

 

Re:           Irrevocable Standby Letter of Credit No.                                                                        

 

We request you to transfer all of our rights as beneficiary under the Letter of Credit referenced above to the transferee, named below:

 

Name of Transferee

 

Address

 

By this transfer all our rights as the original beneficiary, including all rights to make drawings under the Letter of Credit, go to the transferee. The transferee shall have sole rights as beneficiary, whether existing now or in the future, including sole rights to agree to any amendments, including increases or extensions or other changes. All amendments will be sent directly to the transferee without the necessity of consent by or notice to us.

 

We enclose the original letter of credit and any amendments thereto. Please indicate your acceptance of our request for the transfer by endorsing the letter of credit and sending it to the transferee with your customary notice of transfer.

 

For your transfer fee of $250.00

 

*            Enclosed is our check for $_________________                                                                              

 

*            You may debit my/our Account No.___________                                                      

 

We also agree to pay you on demand any expenses which may be incurred by you in connection with this transfer.

 

9

  

Exhibit D-2

  

 

The signature and title at the right conform with those shown in our files as authorized to sign for the beneficiary. Policies governing signature authorization as required for withdrawals from customer accounts shall also be applied to the authorization of signatures on this form. The authorization of the Beneficiary's signature and title on this form also acts to certify that the authorizing financial institution (i) is regulated by a U.S. federal banking agency; (ii) has implemented anti-money laundering policies and procedures that comply with applicable requirements of law, including a Customer Identification Program (CIP) in accordance with Section 326 of the USA PATRIOT Act; (iii) has approved the Beneficiary under its anti-money laundering compliance program; and (iv) acknowledges that Bank of America, N.A. is relying on the foregoing certifications pursuant to 31 C.F.R. Section 103.121 (b)(6).

 

 

 

NAME OF BANK

 

 

AUTHORIZED SIGNATURE AND TITLE

 

 

PHONE NUMBER

 

 

NAME OF TRANSFEROR

 

 

NAME OF AUTHORIZED SIGNER AND TITLE

 

 

 

AUTHORIZED SIGNATURE

 

10

  

Exhibit D-2

  

EXHIBIT E

to Revolving Credit Agreement

by and among

Acadia Strategic Opportunity Fund III LLC, as Borrower,

Acadia Realty Acquisition III LLC, as Managing Member,

Acadia Realty Limited Partnership, as Guarantor

Acadia Investors III, Inc., as Pledgor,

Bank of America, N.A., as Administrative Agent,

Banc of America Securities LLC, as Sole Lead Arranger and Sole Book Manager,

YC SUSI Trust, as Conduit Lender,

Bank of America, N.A., as an Administrator, Alternate Lender and Managing Agent,

and

the other Conduit Lenders, Administrators, Alternate Lenders and Managing Agents from

time to time party thereto

 

BORROWER AND MANAGING MEMBER SECURITY AGREEMENT

 

THIS SECURITY AGREEMENT (as amended, modified, supplemented or restated from time to time, this "Security Agreement") is executed and delivered as of October 10, 2007 by Acadia Strategic Opportunity Fund III LLC, a Delaware limited liability company ("Borrower"), and Acadia Realty Acquisition III LLC, a Delaware limited liability company ("Managing Member"), in favor of BANK OF AMERICA, N.A., a national banking association, as Administrative Agent ("Administrative Agent"), for the benefit of Secured Parties (hereinafter defined). Capitalized terms not defined herein shall have the meanings assigned to such terms in the Credit Agreement referred to below.

 

A.            Formation. Borrower was formed pursuant to that certain Operating Agreement, dated as of May 15, 2007 (as the same may be restated, modified, amended or supplemented from time to time, the "Operating Agreement").

 

B.            Capital Calls. Pursuant to Section 5.2 of the Operating Agreement, Managing Member may make one or more Capital Calls upon the Investors to make Capital Contributions to the capital of Borrower subject to certain limitations specified in the Operating Agreement.

 

C.            Credit Agreement. Borrower, Managing Member, Acadia Realty Limited Partnership, a Delaware limited partnership, as Guarantor, Acadia Investors III, Inc., a Maryland corporation, as Pledgor, Administrative Agent, Banc of America Securities LLC, as Sole Lead Arranger and Sole Book Manager, YC SUSI Trust, as Conduit Lender, Bank of America, N.A., as an Administrator, Alternate Lender, and Managing Agent and the other Conduit Lenders, Administrators, Alternate Lenders and Managing Agents from time to time party thereto, have entered into a Revolving Credit Agreement, dated as of October 10, 2007, relating to a revolving credit loan (as amended, modified, supplemented, or restated from time to time, the "Credit Agreement"). Administrative Agent, the Lenders, Agents, Letter of Credit Issuer, Program Support Providers, Conduit Collateral Agents and Indemnitees are herein collectively referred to as "Secured Parties" and each individually referred to as a "Secured Party." To secure Borrower's obligations under the Credit Agreement, Borrower and Managing Member have agreed to pledge and assign to Administrative Agent, for the benefit of Secured Parties, Borrower's and Managing Member's rights to make Capital Calls under the Operating Agreement, Borrower's rights to receive payment of each Investor's Capital Contributions, and Managing Member's right to enforce Capital Calls and the payment of Capital Contributions by each Investor.

 

  

Borrower and Managing Member Security Agreement

  

 

1. Collateral and Obligations. In order to secure the Notes and the Obligations, Borrower and Managing Member hereby grant to Administrative Agent for the benefit of Secured Parties, to the extent permitted by law, and subject to the terms and conditions of this Security Agreement, a first priority security interest and Lien in and to all of their respective rights in the following (the "Collateral"):

 

a.            Borrower's and Managing Member's right to issue Capital Call Notices, to make Capital Calls of the Capital Commitments, and all other rights, titles, interests, powers and privileges related to, appurtenant to or arising out of Borrower's and Managing Member's right to require or demand that Investors make Capital Contributions to the capital of Borrower;

 

b.            Borrower's and Managing Members' rights, titles, interests and privileges in and to the Capital Commitments and the Capital Contributions, whether now owned or hereafter acquired; and

 

c.            Borrower's and Managing Member's rights, titles, interests, remedies, and privileges under the Operating Agreement related to the Capital Commitments and to receive the same, or the enforcement thereof, including, without limitation, those rights and remedies as contemplated in Article 5 of the Operating Agreement and those rights and remedies of the Borrower and Managing Member pursuant to that certain pledge agreement, dated as of May 15, 2007, between the Borrower and Acadia Investors III, Inc.

 

Administrative Agent acknowledges that, with respect to any member of Borrower, the Collateral does not include a security interest in any equity interest of such member in Borrower.

 

Administrative Agent, in its discretion, without in any manner impairing any rights and powers of Secured Parties hereunder, may, at any time and from time to time, without further consent of or notice to Borrower or Managing Member, with or without valuable consideration file this Security Agreement or a photocopy hereof, or any financing statement with respect hereto (and any amendment, modification, supplement or continuation in respect of any such financing statement).

 

Each of the Borrower and the Managing Member hereby authorizes the filing of any financing statement or any amendment related thereto, in any jurisdiction and with any filing offices as the Administrative Agent may determine, in its sole discretion, are necessary or advisable to perfect the security interest granted to the Administrative Agent in connection herewith. Such financing statement may describe the Collateral in the same manner as described in this Security Agreement or may contain an indication or description of the Collateral that describes such property more generally as all of Borrower's and Managing Member's rights, titles, interests and remedies in, to and under the Operating Agreement, as amended from time to time, including without limitation, all rights to make, receive and enforce all of each Borrower's and Managing Member's right, title and interest, whether now existing of hereafter created or arising, in and to the Collateral Account maintained with Bank of America, N.A., either generally or specifically by name, account number and/or ABA number, and all sums now or at any time hereafter on deposit therein, credited thereto or payable thereon, all proceeds and products thereof, and all instruments, documents, certificates, and other writings evidencing such collateral accounts, and all proceeds of all of the foregoing.

 

  

  

  

 

In order to secure further the payment and the performance of the Obligations, Borrower and Managing Member shall execute such forms, authorizations, documents and instruments, and do such other things, as Administrative Agent shall request, in order to require that all Investors deliver directly to Administrative Agent for the benefit of Secured Parties all monies or sums paid or to be paid by them as and when Capital Calls are made pursuant to the Operating Agreement. Administrative Agent, on behalf of Secured Parties, is hereby authorized, in its own name or the name of Borrower or Managing Member, at any time upon the occurrence and during the continuation of an Event of Default, to notify any or all parties obligated to Borrower with respect to the Capital Contributions to make all payments due or to become due thereon directly to Administrative Agent for the benefit of Secured Parties at a different account than that specified in the Credit Agreement, or to initiate one or more Capital Calls in order to pay the Obligations or for any other purpose contemplated by the Credit Agreement (which Capital Calls may be in excess of the amount owing under the Credit Agreement if required in order to comply with ERISA or otherwise result in payment in full of the Obligations). With or without such general notification, upon the occurrence and during the continuation of an Event of Default, Administrative Agent, on behalf of Secured Parties, may: (i) take or bring in Borrower's or Managing Member's name or that of Administrative Agent for the benefit of Secured Parties all steps, actions, suits or proceedings reasonably deemed by Administrative Agent necessary or desirable to effect possession or collection of payments; (ii) complete any contract or agreement of Borrower in any way related to any of the Capital Calls; (iii) make allowances or adjustments related to the Capital Calls; (iv) compromise any claims related to the Capital Calls; or (v) issue credit in its own name or the name of Borrower or Managing Member. Regardless of any provision hereof,  IN THE ABSENCE OF GROSS NEGLIGENCE OR WILLFUL MISCONDUCT by Administrative Agent or Secured Parties, or both, neither Administrative Agent nor Secured Parties shall be liable for the failure of Administrative Agent to collect or exercise diligence in the collection, possession or any transaction concerning, all or part of the Capital Calls or sums due or paid thereon, nor shall Administrative Agent or Secured Parties be under any obligation whatsoever to anyone by virtue of the security interests and liens granted herein.

 

Upon the occurrence and during the continuation of an Event of Default, issuance by Administrative Agent, on behalf of Secured Parties, of a receipt to any person obligated to pay any Capital Contributions to Borrower shall be a full and complete release, discharge and acquittance of such person to the extent of any amount so paid to Administrative Agent for the benefit of Secured Parties. Administrative Agent, on behalf of Secured Parties, is hereby authorized and empowered, upon the occurrence and during the continuation of an Event of Default, on behalf of Borrower and Managing Member to endorse the name of Borrower or Managing Member, or both, upon any check, draft, instrument, receipt, instruction or other document or item, including, but not limited to, all items evidencing payment upon a Capital Contribution of any person to Borrower coming into Administrative Agent's or any Secured Party's possession, and to receive and apply the proceeds therefrom in accordance with the terms of the Credit Agreement.

 

  

  

  

 

Administrative Agent, on behalf of Secured Parties, is hereby granted an irrevocable power of attorney, which is coupled with an interest, to execute all checks, drafts, receipts, instruments, instructions or other documents, agreements or items on behalf of Borrower or Managing Member, or both, upon the occurrence and during the continuation of an Event of Default, as shall be deemed by Administrative Agent to be necessary or advisable, in the sole discretion, reasonably exercised, of Administrative Agent, to protect the security interests and Liens herein granted or the repayment of the Obligations, and neither Administrative Agent nor any Secured Party shall incur any liability in connection with or arising from the exercise of such authority and power, except as a result of gross negligence or willful misconduct.

 

2. Warranties and Covenants. Borrower and Managing Member hereby warrant to Administrative Agent for the benefit of Secured Parties and covenant and agree with Administrative Agent for the benefit of the Secured Parties as follows:

 

a.            That Borrower is the sole legal and equitable owner of the Capital Commitments and the Capital Contributions (with respect to its members) and has the authority to execute this Security Agreement, and this Security Agreement constitutes the legal, valid and binding obligation of Borrower enforceable in accordance with the terms hereof, subject to Debtor Relief Laws and to general principles of equity; and that Managing Member is the sole, legal and equitable owner and holder of the right to issue Capital Call Notices and to make Capital Calls (with respect to its members) (other than the Administrative Agent) and has the authority to execute this Security Agreement, and this Security Agreement constitutes the legal, valid and binding obligation of Managing Member enforceable in accordance with the terms hereof, subject to Debtor Relief Laws and to general principles of equity;

 

b.            That neither Borrower nor Managing Member has heretofore transferred, assigned, pledged, hypothecated or granted any security interest in all or any portion of the Collateral; that they have full right and power to make the transfer, pledge and assignment and grant the security interests granted hereby; that, to the extent required by the Operating Agreement, all Investors have been notified of, and have approved and consented to, the transfer, pledge and assignment contained herein; and that this instrument is effective to accomplish the transfer, pledge and assignment and grant of the security interests granted hereby;

 

c.            That Borrower and Managing Member have received direct or indirect benefit from the Loans evidenced by the Notes; and that the grant of the security interest in the Collateral hereunder was a condition to the granting of such loans;

 

d.            That Borrower and Managing Member shall, at their respective sole cost and expense, execute and deliver any financing statements or other documents which Administrative Agent reasonably requests to protect or perfect the assignment, pledge, transfer and grant of the security interest made herein;

 

  

  

  

 

e.           That neither Administrative Agent nor Secured Parties shall be responsible in any way for any depreciation in the value of the Collateral nor have any duty or responsibility whatsoever to take any steps to preserve any rights of Borrower or Managing Member in the Collateral or under the Operating Agreement;

 

f.           That Borrower shall not sell, mortgage, hypothecate, assign or otherwise transfer its interest in the Capital Commitments, the Capital Contributions or the Collateral Account, or any portion of or interest in either, without the prior written consent of Administrative Agent, on behalf of Secured Parties; that Managing Member shall not sell, mortgage, hypothecate, assign or otherwise transfer its interests in its right to issue Capital Call Notices or to make Capital Calls or any portion of or interest therein without the prior written consent of Administrative Agent, on behalf of Secured Parties;

 

g.           That Administrative Agent, on behalf of Secured Parties, is authorized and empowered to make one or more Capital Calls upon the occurrence and continuance of an Event of Default in order to pay the Notes and Obligation, without the necessity of any further action by Managing Member or Borrower; and

 

h.           That neither Borrower nor the Managing Member shall: (i) issue any Capital Call Notice(s) other than as contemplated by Section 5.2 of the Credit Agreement; (ii) cancel or reduce the Capital Commitment of any of its equity holders or any Investor under the Operating Agreement other than with the consent of Secured Parties as required by the Credit Agreement; or (iii) excuse any of its equity holders or any Investor from making any Capital Contribution pursuant to the Operating Agreement if the proceeds from the related Capital Call are to be applied to the Obligations.

 

3.           Remedies Upon Event of Default.

 

a. When an Event of Default exists, Administrative Agent, on behalf of Secured

 

Parties, shall have the following rights with respect to the Collateral:

 

	
  

	
i.

	
To sell the Collateral or any part thereof, upon giving at least ten (10) days' prior notice to Borrower and Managing Member of the time and place of sale (which notice Borrower, Managing Member and Administrative Agent agree is commercially reasonable), for cash or upon credit or for future delivery, Borrower and Managing Member hereby waive all rights, if any, to require Administrative Agent to marshal the Collateral and any other security for the Obligation, and at the option and in the complete discretion of Administrative Agent, either:

 

A.           at public sale; or

 

B.           at private sale, in which event such notice shall also contain the terms of the proposed sale, and Borrower and Managing Member shall have until the time of such proposed sale in which to redeem the Collateral or to procure a purchaser willing, ready and able to purchase the Collateral on terms more favorable to Borrower, Managing Member, Secured Parties and the holders of the Notes, and if such a purchaser is so procured, then Administrative Agent shall sell the Collateral to the purchaser so procured; and

 

  

  

  

 

ii.            To bid for and to acquire, unless prohibited by applicable law, free from any redemption right, the Collateral, or any part thereof, and, if Secured Parties are then the holders of the Obligations or any participation or other interest therein, in lieu of paying cash therefor, Administrative Agent on behalf of Secured Parties may make settlement for the selling price by crediting the net selling price, if any, after deducting all costs and expenses of every kind, upon the outstanding principal amount of the Obligations, in such order and manner as Administrative Agent on behalf of Secured Parties, in its discretion, may deem advisable. Administrative Agent for the benefit of Secured Parties, upon so acquiring the Collateral, or any part thereof, shall be entitled to hold or otherwise deal with or dispose of the same in any manner not prohibited by applicable law; and

 

iii.            To enforce any other remedy available to Administrative Agent on behalf of Secured Parties at law or in equity.

 

From time to time Administrative Agent may, but shall not be obligated to, postpone the time and change the place of any proposed sale of any of the Collateral for which notice has been given as provided above if, in the judgment of Administrative Agent, such postponement or change is necessary or appropriate in order that the provisions of this Security Agreement applicable to such sale may be fulfilled or in order to obtain more favorable conditions under which such sale may take place. Administrative Agent shall give Borrower and Managing Member reasonable notice of such change.

 

b.           In case of any sale by Administrative Agent of any of the Collateral on credit, which may be elected at the option and in the complete discretion of Administrative Agent, on behalf of Secured Parties, the Collateral so sold may be retained by Administrative Agent for the benefit of Secured Parties until the selling price is paid by the purchaser, but neither Administrative Agent nor Secured Parties shall incur any liability in case of failure of the purchaser to take up and pay for the Collateral so sold. In case of any such failure, such Collateral so sold may be again similarly sold. After deducting all costs or expenses of every kind (including, without limitation, the reasonable attorneys' fees and legal expenses incurred by Administrative Agent or Secured Parties, or both), Administrative Agent shall apply the residue of the proceeds of any sale or sales, if any, to pay the principal of and interest upon the Obligations in such order and manner as Administrative Agent in its discretion may deem advisable. The excess, if any, shall be paid to Borrower. Neither Administrative Agent Secured Parties shall incur any liability as a result of the sale of the Collateral at any private sale or sales.

 

c.           Subject to Section 14.19 of the Credit Agreement, Administrative Agent and Secured Parties shall have all rights, remedies and recourse granted in the Credit Agreement, the Notes, the Loan Documents and any other instrument executed to provide security for or in connection with the payment and performance of the Obligations or existing at common law or equity (including specifically those granted by the Uniform Commercial Code, as adopted in New York and any other state which governs the creation or perfection (and the effect thereof) of any security interest in the Collateral), and such rights and remedies: (i) shall be cumulative and concurrent; (ii) may be pursued separately, successively or concurrently against Borrower and Managing Member and any other party obligated under the Obligations, or against the Collateral, or any of such Collateral, or any other security for the Obligations, or any of them, at the sole discretion of Administrative Agent, on behalf of the Secured Parties; (iii) may be exercised as often as occasion therefor shall arise, it being agreed by Borrower and Managing Member that the exercise or failure to exercise any of same shall in no event be construed as a waiver or release thereof or of any other right, remedy or recourse; and (iv) are intended to be and shall be, non-exclusive.

 

  

  

  

 

d.           Notwithstanding a foreclosure upon any of the Collateral or exercise of any other remedy by Administrative Agent on behalf of Secured Parties in connection with an Event of Default: (i) neither Borrower nor Managing Member shall be subrogated thereby to any rights of Administrative Agent for the benefit of Secured Parties against the Collateral or any other security for the Obligations, or Borrower or Managing Member or any property of Borrower or Managing Member; (ii) nor shall Borrower or Managing Member be deemed to be the owner of any interest in the Obligations; (iii) nor shall Borrower or Managing Member exercise any rights or remedies with respect to Borrower or Managing Member or the Collateral or any other security for the Obligations or any of them or the property of Borrower or Managing Member until the Obligations have been paid to Administrative Agent for the benefit of the Secured Parties and are fully and indefeasibly performed and discharged.

 

e.           All recitals in any instrument of assignment or any other instrument executed by Administrative Agent for the benefit of Secured Parties or by Secured Parties incident to the sale, transfer, assignment or other disposition or utilization of the Collateral or any part thereof hereunder shall be full proof of the matters stated therein and no other proof shall be required to establish full legal propriety of the sale or other action taken by Administrative Agent for the benefit of Secured Parties or by Secured Parties or of any fact, condition or thing incident thereto, and all prerequisites of such sale or other action shall be presumed conclusively to have been performed or to have occurred.

 

4. Notices. Any notice, demand, request or other communication which any party hereto may be required or may desire to give hereunder shall be in writing (except where telephonic instructions or notices are expressly authorized herein to be given) and shall be deemed to be effective (a) if by hand delivery, telex, telecopy or other facsimile transmission, on the day and at the time on which delivered to such party at the address, telex or telecopier numbers specified below; (b) if by mail, on the day which it is received after being deposited, postage prepaid, in the United States registered or certified mail, return receipt requested, addressed to such party at the address specified below; (c) if by Federal Express or other reputable express mail service, on the next Business Day following the delivery to such express mail service for next Business Day delivery, addressed to such party at the address set forth below; or (d) if by telephone on the day and at the time reciprocal communication (i.e., direct communication between two or more persons, which shall not include voice mail messages) with one of the individuals named below occurs during a call to the telephone numbers indicated for such party below:

 

  

  

  

 

If to Borrower or Managing Member:

c/o Acadia Realty Trust

1311 Mamaroneck Avenue, Suite 260 

White Plains, New York 10605

Attention: Robert Masters, Esq.

 

If to Administrative Agent:

 

Bank of America, N.A. 214 North Tryon Street NC 1-027-19-01

 

Attention:                       Dan Hattendorf

Telephone:                     (704) 388-3113

Telecopy:                       (704) 388-9211

 

With a copy to:

Bank of America, N.A.

214 North Tryon Street, 19th Floor 

NC 1-027-19-01

Charlotte, NC 28255

Attention:                       Brian S. Williams

Telecopy:                       (704) 968-1215

Telephone:                     (704) 683-4747

Email:                              Brian.S.Williams@bankofamerica.com

 

 

Any notice required hereunder shall be deemed commercially reasonable if given at least ten (10) days prior to the event giving rise to the requirement of such notice, including but not limited to, notices of a private or public sale.

 

5.                      Appointment of Successor Administrative Agent.

 

Reference is hereby made to Section 13.9 of the Credit Agreement for the terms and conditions upon which a successor Administrative Agent hereunder may be appointed. Wherever the words "Administrative Agent" are used herein, the same shall mean the Administrative Agent named in the first paragraph of this Security Agreement or the successor Administrative Agent at the time in question.

 

6.                      Binding Effect; Miscellaneous.

 

a.            This Security Agreement shall be binding upon and inure to the benefit of and be enforceable by the undersigned and their respective successors and assigns.

 

  

  

  

 

b.            The headings to the various paragraphs of this Security Agreement shall have been inserted for convenient reference only and shall not modify, define, limit or expand the expressed provisions of this Security Agreement. This Security Agreement may be executed in any number of counterparts, each of which shall be an original, and such counterparts shall together constitute but one and the same instrument.

 

c.            No delay or omission on the part of Administrative Agent or the Secured Parties in exercising any right hereunder shall operate as a waiver of any such right or any other right. A waiver on any one or more occasions shall not be construed as a bar to or waiver of any right or remedy on any future occasion.

 

d.            Pursuant to Section 5-1401 of the New York General Obligations Law, the substantive laws of the State of New York, without regard to the choice of law principals that might otherwise apply, and the applicable federal laws of the United States of America, shall govern the validity, construction, enforcement and interpretation of this Security Agreement.

 

e.            Any suit, action or proceeding against Borrower or Managing Member with respect to this Security Agreement or any judgment entered by any court in respect thereof, may be brought in the courts of the State of New York, or in the United States Courts located in the Borough of Manhattan in New York City, pursuant to Section 5-1402 of the New York General Obligations Law, as the Administrative Agent on behalf of the Secured Parties in its sole discretion may elect and Borrower and Managing Member each hereby submits to the non-exclusive jurisdiction of such courts for the purpose of any such suit, action or proceeding. Borrower and Managing Member each hereby irrevocably consents to the service of process in any suit, action or proceeding in said court by the mailing thereof by the Administrative Agent on behalf of the Secured Party by registered or certified mail, postage prepaid, to Borrower's address set forth in Section 4 hereof. Borrower and Managing Member each hereby irrevocably waives any objections which it may now or hereafter have to the laying of venue of any suit, action or proceeding arising out of or relating to this Security Agreement brought in the courts located in the State of New York, Borough of Manhattan in New York City, and each hereby further irrevocably waives any claim that any such suit, action or proceeding brought in any such court has been brought in an inconvenient forum. BORROWER AND MANAGING MEMBER EACH HEREBY WAIVES TRIAL BY JURY IN ANY SUIT, ACTION OR PROCEEDING BROUGHT IN CONNECTION WITH THIS SECURITY AGREEMENT, WHICH WAIVER IS INFORMED AND VOLUNTARY.

 

f.            The remedies given to Administrative Agent on behalf of the Secured Parties hereunder are cumulative and in addition to any and all other rights which Administrative Agent on behalf of a Secured Party or the Secured Parties may have against Borrower or Managing Member or any other person or firm, at law or in equity, including exoneration and subrogation, or by virtue of any other agreement.

 

g.            This Security Agreement and the provisions set forth herein shall continue until the full, final and complete satisfaction of the Obligations, and Administrative Agent's and Secured Parties' rights hereunder shall not be released, diminished, impaired, reduced or adversely affected by: (i) the renewal, extension, modification, amendment or alteration of the Credit Agreement or any other Loan Document or any related document or instrument; (ii) any adjustment, indulgence, forbearance or compromise that might be granted or given by Administrative Agent or the Secured Parties to any primary or secondary obligor or in connection with any security for the Obligations; (iii) any full or partial release of any of the foregoing; or (iv) notice of any of the foregoing.

 

  

  

  

 

h.           Neither Administrative Agent nor Secured Parties has assumed, and nothing contained herein shall be declared to have imposed upon Administrative Agent or the Secured Parties, any of Borrower's duties or obligations or Managing Member's duties or obligations as a member of Borrower, except that Administrative Agent and the Secured Parties shall be bound by the provisions of the Operating Agreement in exercising rights or remedies thereunder assigned to Administrative Agent hereunder.

 

i.           Notwithstanding anything to the contrary herein, the obligations of Managing Member hereunder are subject to the nonrecourse provisions of Section 14.19 of the Credit Agreement.

 

J. On the full, final, and complete satisfaction of the Obligations, this Security Agreement shall be of no further force or effect. Thereafter, upon request, Administrative Agent, on behalf of the Secured Parties, shall reasonably provide Borrower and Managing Member, at their sole expense, a written release of their respective obligations hereunder and of the Collateral.

 

Remainder of Page Intentionally Left Blank.

Signature Page Follows.

 

  

  

  

 

EXECUTED on the date first above written.

 

	 	
BORROWER:

	  	  
	  	
ACADIA STRATEGIC OPPORTUNITY FUND III

	  	
LLC, a Delaware limited liability company

	  	  
	  	  
	  	
By: /s/ Robert Masters

	  	
Name: Robert Masters

	  	
Title: Senior Vice President

 

	 	
MANAGING MEMBER:

	  	  
	  	
ACADIA REALTY ACQUISITION III LLC,

	  	
a Delaware limited liability company

	  	  
	  	  
	  	
By: /s/ Robert Masters

	  	
Name: Robert Masters

	  	
Title: Senior Vice President

 

  

Exhibit E

  

 

EXHIBIT F

to Revolving Credit Agreement

by and among

Acadia Strategic Opportunity Fund III LLC, as Borrower,

Acadia Realty Acquisition III LLC, as Managing Member,

Acadia Realty Limited Partnership, as Guarantor,

Acadia Investors III, Inc., as Pledgor,

Bank of America, N.A., as Administrative Agent,

Banc of America Securities LLC, as Sole Lead Arranger and Sole Book Manager,

YC SUSI Trust, as Conduit Lender,

Bank of America, N.A., as an Administrator, Alternate Lender and Managing Agent,

and

the other Conduit Lenders, Administrators, Alternate Lenders and Managing Agents from

time to time party thereto

 

ACCOUNT ASSIGNMENT

 

Dated as of October 10, 2007

 

 

For value received, ACADIA STRATEGIC OPPORTUNITY FUND III LLC, a Delaware limited liability company ("Assignor"), hereby transfers and pledges to BANK OF AMERICA, N.A., as Administrative Agent, on behalf of the Secured Parties, under that certain Revolving Credit Agreement (as amended, modified, supplemented, or restated from time to time, the "Credit Agreement"; capitalized terms used but not defined herein shall have the meanings assigned to such terms in the Credit Agreement), dated as of October 10, 2007, by and among Assignor, Acadia Realty Acquisition III LLC, a Delaware limited liability company, as Managing Member, Acadia Realty Limited Partnership, a Delaware limited partnership, as Guarantor, Acadia Investors III, Inc., a Maryland corporation, as Pledgor, Bank of America, N.A., as administrative agent (in such capacity, the "Administrative Agent"), Banc of America Securities LLC, as Sole Lead Arranger and Sole Book Manager, YC SUSI Trust, as Conduit Lender, Bank of America, N.A., as an Administrator, Alternate Lender and Managing Agent and the other Conduit Lenders, Administrators, Alternate Lenders and Managing Agents from time to time party thereto, and grants to Administrative Agent, for the benefit of each Secured Party, a common law lien, claim, encumbrance upon and security interest in deposit account no. 1233060441 at Bank of America, N.A. ("Depository"), with reference to "Acadia Strategic Opportunity Fund III LLC Collateral Account" and any extensions or renewals thereof, if the account is one which may be extended or renewed, and any successor or substitute accounts (such account or accounts and any extensions or renewals being hereinafter called the "Collateral Account", together with all of Assignor's right, title, and interest (whether now existing or hereafter created or arising) in and to the Collateral Account, all sums now or at any time hereafter on deposit therein, credited thereto, or payable thereon, all proceeds and products thereof, and all instruments, documents, certificates, and other writings evidencing the Collateral Account, on the following terms and conditions:

 

	
1.

	
This assignment of the Collateral Account shall secure the payment and the performance of the Obligations (as defined in the Credit Agreement).

 

  

Exhibit F

  

 

2.          Assignor represents and warrants that:

 

	
  

	
a.

	
subject to Administrative Agent's and the Secured Parties' rights with respect to the Collateral Account on the records of the Depository, Assignor is the sole owner of the Collateral Account and has authority to execute and deliver this assignment;

 

	
  

	
b.

	
except for any financing statement which may have been filed by the Administrative Agent for the benefit of the Secured Parties, no financing statement covering the Collateral Account, or any part thereof, has been filed with any filing officer;

 

	
  

	
c.

	
except for the security agreement entered into in favor of the Administrative Agent on behalf of the Secured Parties, no other assignment or security agreement has been executed with respect to the Collateral Account; and

 

	
  

	
d.

	
the Collateral Account is not subject to any Liens or offsets of any Person other than Administrative Agent, the Secured Parties and the Depository.

 

	

3.

	
 

	
So long as the Obligations or any part thereof remains unpaid, Assignor covenants and agrees:

 

	
  

	
a.

	
(i) from time to time promptly to execute and deliver to Administrative Agent all such other assignments, certificates, passbooks, and supplemental writings, and do all other acts or things as Administrative Agent may reasonably request in order to more fully evidence and perfect the security interest herein created; and (ii) Administrative Agent may file such financing statements, amendments thereto and continuations thereof as Administrative Agent may reasonably deem appropriate in order to more fully evidence and perfect the security interest herein created;

 

	
  

	
b.

	
promptly to furnish Administrative Agent with any information or writings which Administrative Agent may reasonably request concerning the Collateral Account;

 

	
  

	
c.

	
promptly to notify Administrative Agent of any change in any fact or circumstances warranted or represented by Assignor herein or in any other writing furnished by Assignor to Administrative Agent in connection with the Collateral Account or the Obligations;

 

	
  

	
d.

	
promptly to notify Administrative Agent of any claim, action, or proceeding affecting title to the Collateral Account, or any part thereof, or the security interest herein, and, at the request of Administrative Agent, appear in and defend any such action or proceeding; and

 

	
  

	
e.

	
to pay to Administrative Agent the amount of any court costs and reasonable attorney's fees assessed by a court and incurred by Administrative Agent following any Event of Default or Special Default hereunder.

 

  

2

  

 

	
  

	
4.

	
Assignor covenants and agrees that without the prior consent of Administrative Agent Assignor will not:

 

	
  

	
a.

	
create any Lien in or upon, or otherwise encumber, or assign the Collateral Account, or any part thereof, or permit the same to be or become subject to any Lien, attachment, execution, sequestration, other legal or equitable process, or any encumbrance of any kind or character, except the Lien herein created and any offset rights inuring to the benefit of Depository, but only to the extent same are subordinated to Secured Parties' Liens; or

 

	
  

	
b.

	
request, make or allow to be made any withdrawals from the Collateral Account except as provided hereunder or in Section 5.2 of the Credit Agreement.

 

Should any funds payable with respect to the Collateral Account be received by Assignor, they shall immediately upon such receipt become subject to the Lien hereof and while in the hands of Assignor be segregated from all other funds of Assignor and be held in trust for Secured Parties. Except as otherwise provided in the Credit Agreement, Assignor shall have absolutely no dominion or control over such funds except to immediately deposit them into the Collateral Account. Assignor acknowledges and agrees that Depository shall comply with instructions originated in writing by Administrative Agent in accordance with the terms hereof and of the Credit Agreement directing the disposition of funds in the Collateral Account without further consent of Assignor.

 

	
  

	
5.

	
Administrative Agent's or the Secured Parties' rights hereunder shall not be released, diminished, impaired, reduced or adversely affected by:

 

	
  

	
a.

	
any adjustment, indulgence, forbearance or compromise that might be granted or given by Administrative Agent, on behalf of the Secured Parties, or the Secured Parties to any primary or secondary obligor or in connection with any security for the Obligations;

 

b.           any full or partial release of any security for the Obligations;

 

	
  

	
c.

	
any other action taken or omitted to be taken by Administrative Agent, on behalf of the Secured Parties, or the Secured Parties in connection with the Obligations, whether or not such action or omission prejudices Assignor or increases the likelihood that the Collateral Account will be applied to the Obligations; or

 

d.           notice of any of the foregoing.

 

	
6.  

	
Administrative Agent, in its discretion, without in any manner impairing any rights and powers of Secured Parties hereunder, may, at any time and from time to time, without further consent of or notice to Assignor, and with or without valuable consideration:

 

	
  

	
a.

	
renew or extend the maturity of or accept partial payments upon the Obligations or any part thereof;

 

  

3

  

 

	
  

	
b.

	
release any person primarily or secondarily liable in respect of the Obligations or any security therefor;

 

	
  

	
c.

	
alter in any manner that the Secured Parties may elect the terms of any instrument evidencing the Obligations or any part thereof either as to the maturity thereof, rate of interest, method of payment, parties thereto or otherwise;

 

	
  

	
d.

	
renew, extend or accept partial payments upon, release or permit substitutions for or withdrawals of, any security (other than the Collateral Account) at any time directly or indirectly, immediately or remotely, securing the payment of the Obligations or any part thereof; and

 

	
  

	
e.

	
release or pay to Assignor, or any other person otherwise entitled thereto, any amount paid or payable in respect of any such other direct or indirect security for the Obligations, or any part thereof.

 

	
7.

	
Should any person other than Assignor have heretofore executed or hereafter execute, in favor of the Secured Parties, any deed of trust, mortgage, or security agreement, or have heretofore pledged or hereafter pledge any other property to secure the payment of the Obligations, or any part thereof, the exercise by the Secured Parties of any right or power conferred upon any of them in any such instrument, or by any such pledge, shall be wholly discretionary with each Secured Party, and the exercise or failure to exercise any such right or power shall not impair or diminish the Secured Parties' rights, titles, interest, Liens, and powers existing hereunder.

 

	
8.

	
The term "Event of Default," as used herein, means the existence of any "Event of Default" described in the Credit Agreement.

 

	
9.

	
The term "Special Default," as used herein, means (a) the existence of any Event of Default or (b) the failure by Assignor or any Qualified Borrower to pay when due any monetary Obligations under the Credit Agreement, the Notes or any other Loan Document, including, without limitation, any mandatory prepayment required under Section 2.1(d) of the Credit Agreement or (c) the existence of a Potential Default under Section 12.1(g) and Section 12.10) of the Credit Agreement.

 

	
  

	
10.

	
a. During the existence of an Event of Default, Administrative Agent, on behalf of the Secured Parties, in addition to any other remedies it may have, may do one or more of the following:

 

i.           declare the Obligations immediately due and payable;

 

	
  

	
ii.

	
demand payment and performance thereof from the funds in or credited to the Collateral Account; and

 

	
  

	
iii.

	
withdraw funds from the Collateral Account and apply all or any portion of the Collateral Account to the Obligations as described in paragraph 13 hereof.

 

  

4

  

 

	
  

	
b.Assignor hereby authorizes Administrative Agent during the existence of an

 

	
  

	
Event of Default and so long as any part of the Obligations remain outstanding:

 

	
  

	
i.

	
to withdraw, collect, and receipt for any and all funds on deposit in or payable on the Collateral Account, and apply such funds to payment of the Obligations;

 

	
  

	
ii.

	
on behalf of Assignor to receive, take, assign, deliver, accept, deposit, and endorse the name of Assignor upon any checks, drafts, or other instruments payable to Assignor evidencing payment on the Collateral Account;

 

	
  

	
iii.

	
to surrender or present for notation of withdrawal the passbook, certificate, or other documents issued to Assignor in connection with the Collateral Account; and

 

	
  

	
iv.

	
exercise any other rights or take any other actions specified herein or in the Credit Agreement.

 

	
11.

	
Upon the occurrence of a Special Default, Administrative Agent, on behalf of the Secured Parties, in addition to any other remedies it may have, may restrict or prohibit withdrawals from the Collateral Account.

 

	
12.

	
Neither Administrative Agent nor any other Secured Party shall be liable for any loss of interest on or any penalty or charge assessed against funds in, payable on, or credited to the Collateral Account as a result of Administrative Agent, or any Secured Party exercising any of its rights or remedies under, and in accordance with, this assignment, except to the extent resulting from gross negligence or willful misconduct.

 

	
13.

	
Administrative Agent shall be entitled to apply any and all funds received by it hereunder toward payment and performance of the Obligations in such order and manner as Administrative Agent, in its absolute discretion, may elect. If such funds are not sufficient to pay and perform the Obligations in full, Assignor shall remain liable for any deficiency, the liability of each person obligated on the Obligations to be determined by Administrative Agent following its receipt and crediting of such funds. Upon full and final payment of the Obligations, the rights of Administrative Agent in and to the Collateral Account hereunder will be deemed to be released and of no further force and effect.

 

	
14.

	
All rights, titles, interests, Liens, and remedies of Secured Parties hereunder are cumulative of each other and of every other right, title, interest, Lien, or remedy which the Secured Parties may otherwise have at law or in equity or under any other contract or other writing for the enforcement of the security interest herein or the collection of the Obligations, and the exercise of one or more rights or remedies shall not prejudice or impair the concurrent or subsequent exercise of other rights or remedies. Should Assignor have heretofore executed or hereafter execute any other security agreement in favor of the Secured Parties, the security interest therein created and all other rights,  powers, and privileges vested in the Secured Parties by the terms thereof shall exist concurrently with the security interest created herein.

 

  

5

  

 

	
15.

	
Should any part of the Obligations be payable in installments, the acceptance by Administrative Agent at any time and from time to time of part payment of the aggregate amount of all installments then matured shall not be deemed to be a waiver of the default then existing. No waiver by the Secured Parties of any default shall be deemed to be a waiver of any other subsequent default, nor shall any such waiver by the Secured Parties be deemed to be a continuing waiver. No delay or omission by the Secured Parties in exercising any right or power hereunder, or under any other writings executed by Assignor as security for or in connection with the Obligations, shall impair any such right or power or be construed as a waiver thereof or any acquiescence therein, nor shall any single or partial exercise of any such right or power preclude other or further exercise thereof, or the exercise of any other right or power of the Secured Parties hereunder or under such other writings.

 

	
16.

	
No provision herein or in any promissory note, instrument, or any other loan document evidencing the Obligations shall require the payment or permit the collection of interest in excess of the maximum permitted by law. If any excess of interest in such respect is provided for herein or in any such promissory note, instrument, or any other loan document, the provisions of this paragraph shall govern, and the Assignor shall not be obligated to pay the amount of such interest to the extent that it is in excess of the amount permitted by law. The intention of the parties being to conform strictly to the usury laws now in force, all promissory notes, instruments, and other loan documents evidencing the Obligations shall be held subject to reduction to the amount allowed under said usury laws as now or hereafter construed by the courts having jurisdiction.

 

	
17.

	
(a) PURSUANT TO SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW, THE SUBSTANTIVE LAWS OF THE STATE OF NEW YORK, EXCEPT TO THE EXTENT THE LAWS OF ANOTHER JURISDICTION GOVERN THE CREATION, PERFECTION, VALIDITY, OR ENFORCEMENT OF LIENS UNDER THIS ASSIGNMENT, AND THE APPLICABLE FEDERAL LAWS OF THE UNITED STATES OF AMERICA, SHALL GOVERN THE VALIDITY, CONSTRUCTION, ENFORCEMENT AND INTERPRETATION OF THIS ASSIGNMENT. (b) NOTWITHSTANDING THE FOREGOING, THE PARTIES HERETO AGREE THAT THE STATE OF NEW YORK SHALL BE DEEMED TO BE THE JURISDICTION OF THE DEPOSITORY FOR PURPOSES OF ANY MATTER IN RESPECT HEREOF RELATING TO OR ARISING UNDER SECTION 9-304 OF THE UNIFORM COMMERCIAL CODE AS IN EFFECT FROM TIME TO TIME IN THE STATE OF NEW YORK. (c) ASSIGNOR AND BANK OF AMERICA EXPRESSLY AGREE THAT THE TERMS AND CONDITIONS OF ANY AGREEMENT ESTABLISHING THE COLLATERAL ACCOUNT OR OTHERWISE GOVERNING THE COLLATERAL ACCOUNT SHALL, TO THE EXTENT INCONSISTENT HEREWITH (INCLUDING IN RESPECT OF THE FOREGOING CLAUSE (b)), BE SUBORDINATE TO AND CONTROLLED BY THIS ASSIGNMENT OF COLLATERAL ACCOUNT.

 

  

6

  

 

	
18.

	
Any suit, action or proceeding against Assignor with respect to this Assignment or any judgment entered by any court in respect thereof, may be brought in the courts of the State of New York, or in the United States Courts located in the Borough of Manhattan in New York City, pursuant to Section 5-1402 of the New York General Obligations Law, as Administrative Agent in its sole discretion may elect, and Assignor hereby submits to the non-exclusive jurisdiction of such courts for the purpose of any such suit, action or proceeding. Assignor hereby irrevocably consents to the service of process in any suit, action or proceeding in said court by the mailing thereof by Administrative Agent by registered or certified mail, postage prepaid, to Assignor's address set forth following its signature hereto. Assignor hereby irrevocably waives any objections which it may now or hereafter have to the laying of venue of any suit, action or proceeding arising out of or relating to this Assignment brought in the courts located in the State of New York, Borough of Manhattan in New York City, and hereby further irrevocably waives any claim that any such suit, action or proceeding brought in any such court has been brought in an inconvenient forum. ASSIGNOR HEREBY WAIVES TRIAL BY JURY IN ANY SUIT, ACTION OR PROCEEDING BROUGHT IN CONNECTION WITH THIS ASSIGNMENT, WHICH WAIVER IS INFORMED AND VOLUNTARY.

 

	
  

	
19.

	
This assignment shall be binding on and inure to the benefit of Assignor and Administrative Agent and their respective successors and permitted assigns.

 

	
20.

	
This Assignment and the provisions set forth herein shall continue until the full, final, and complete satisfaction of the Obligations, and the Administrative Agent's and the Secured Parties' rights hereunder shall not be released, diminished, impaired, reduced or adversely affected by: (i) the renewal, extension, modification, amendment or alteration of the Credit Agreement or any other Loan Document or any related document or instrument; (ii) any adjustment, indulgence, forbearance or compromise that might be granted or given by Administrative Agent or the Secured Parties to any primary or secondary obligor or in connection with any security for the Obligations; (iii) any fu11 or partial release of any of the foregoing; or (iv) notice of any of the foregoing.

 

	
21.

	
On the full, final, and complete satisfaction of the Obligations, this Assignment shall be of no further force or effect. Thereafter, upon request, Administrative Agent, on behalf of the Secured Parties, shall reasonably provide Assignor, at Assignor's sole expense, a written release of Assignor's obligations hereunder and an assignment of the Collateral Account to Assignor.

 

	
  

	
22.

	
In the event of a conflict or inconsistency between any provision of this agreement with any provision of the Credit Agreement, the Credit Agreement will control.

 

REMAINDER OF PAGE INTENTIONALLY LEFT BLANK.

SIGNATURE PAGES FOLLOW.

 

  

7

  

 

ASSIGNOR ACKNOWLEDGES RECEIPT OF A COPY OF THIS ASSIGNMENT. Executed by Assignor on the date first above written.

 

	 	
ACADIA STRATEGIC OPPORTUNITY FUND III

	  	
LLC, a Delaware limited liability company

	  	  
	  	  
	  	
By: /s/ Robert Masters

	  	
Name: Robert Masters

	  	
Title: Senior Vice President

 

	  	BANK OF AMERICA, N.A.
	 	 
	  	
By: 

	  	
Name: 

	  	
Title:

 

  

Account Assignment

  

 

DEPOSITORY ACKNOWLEDGMENT

AND AGREEMENT

 

The undersigned depository, Bank of America, N.A. (the "Depository"), acknowledges that Assignor has assigned the Collateral Account as described in the foregoing Assignment of Collateral Account (the "Assignment", with capitalized terms not defined herein being used herein as therein defined). The records of the Depository have been marked to show the Assignment. The Depository hereby acknowledges that the Collateral Account, as described in the Assignment, has been validly created by the Depository in favor of Assignor.

 

Notwithstanding any other provision to the contrary in any other agreement between the Depository and the Assignor and/or the Administrative Agent, the Depository agrees that if at any time it shall receive any instructions directing deposition of funds in the Account from the Administrative Agent, the Depository shall comply with such instructions without further consent by the Assignor. In the event the Assignor is permitted to give instructions with respect to the Account, notwithstanding anything to the contrary contained in any other agreement between the Depository and the Assignor and/or the Administrative Agent, if at the time the Depository shall receive conflicting instructions from the Assignor and the Administrative Agent, the Depository shall follow the instructions of the Administrative Agent and not the Assignor.

 

The Depository hereby subordinates any and all rights of set-off and all other rights and Liens of the Depository against the Collateral Account to the rights, security interests, and Liens under the Assignment, and agrees that, so long as the Obligation remains outstanding, Depository shall not, without the prior written consent of the Administrative Agent, which consent may be withheld by the Administrative Agent in its sole and absolute discretion, with or without cause, exercise or enforce any rights or remedies with respect to the Collateral Account except as required to preserve its rights in the case of bankruptcy, reorganization or insolvency proceedings with respect to the Assignor, and except that the Depository may charge the Collateral Account for any charges, fees and expenses for which Assignor is responsible and which relate to the transactions contemplated by the Assignment or the Credit Agreement referred to therein.

 

The Depository may rely upon and shall be fully protected, indemnified and held harmless in acting or refraining from acting upon any notice (including, without limitation, electronically confirmed facsimiles of such notice) received from the Assignee or the Assignor (including, without limitation, any notice of an Event of Default or Special Default as defined in the Assignment or the Credit Agreement referred to in the Assignment) and believed by it to be genuine and to have been signed or presented by the proper party or parties.

 

The Depository further agrees to provide Assignee with copies of all notices and records sent to Assignor relating to the Collateral Account, and will deliver to Assignee all monthly (or other periodic) statements of the Collateral Account and respond to inquiries by Assignee about any deposits, withdrawals or any other matters relating to the Collateral Account, to the same extent Depository makes such information available to the Collateral Account holder, and Assignor hereby acknowledges and consents to such agreement by Depository.

 

  

  

  

 

This Depository Acknowledgment shall be effective as of the date of the Assignment.

 

	  	BANK OF AMERICA, N.A.
	 	 
	  	
By: 

	  	
Name: 

	  	
Title:

 

  

Depository Acknowledgement and Agreement

  

 

Acknowledged and Agreed:

 

	 	
ACADIA STRATEGIC OPPORTUNITY FUND III

	  	
LLC, a Delaware limited liability company

	  	  
	  	  
	  	
By: /s/ Robert Masters

	  	
Name: Robert Masters

	  	
Title: Senior Vice President

 

1

  

Exhibit F

  

 

EXHIBIT G

to Revolving Credit Agreement

by and among

Acadia Strategic Opportunity Fund III LLC, as Borrower,

Acadia Realty Acquisition III LLC, as Managing Member,

Acadia Realty Limited Partnership, as Guarantor,

Acadia Investors III, Inc., as Pledgor,

Bank of America, N.A., as Administrative Agent,

Banc of America Securities LLC, as Sole Lead Arranger and Sole Book Manager,

YC SUSI Trust, as Conduit Lender,

Bank of America, N.A., as an Administrator, Alternate Lender and Managing Agent,

and

the other Conduit Lenders, Administrators, Alternate Lenders and Managing Agents from

time to time party thereto

 

FACILITY INCREASE REQUEST 

DATE]

 

Bank of America, N.A., as Administrative Agent

NC 1-027-19-01

214 North Tryon Street

Charlotte, North Carolina 28255

Attention: Dan Hattendorf

 

Telephone: (704) 388-3113

Facsimile: (704) 388-9211

 

with a copy to:

 

Bank of America, N.A.

NC1-027-19-01

214 North Tryon Street, 19th Floor 

Charlotte, NC 28255

Attention:                      Brian S. Williams

Telephone:                      (704) 683-4747

Telecopy:                      (704) 968-1215

Email:                             Brian.S.Williwns@bankofamerica.com

 

and:

 

Michael C. Mascia

Mayer Brown LLP

214 N. Tryon Street, Suite 3800

Charlotte, N.C. 28203 

Phone: (704) 444-3651 

Fax: (704) 377-2033

  

Exhibit G

  

 

Ladies and Gentlemen:

 

This Facility Increase Request (this "Facility Increase Request") is executed and delivered by Acadia Strategic Opportunity Fund III LLC (the `Borrower") to Bank of America, N.A., as administrative agent ("Administrative Agent"), pursuant to that certain Revolving Credit Agreement (as amended, modified, supplemented, or restated from time to time, the "Credit Agreement") dated as of October 10, 2007, entered into by and among Borrower, Acadia Realty Acquisition III LLC, a Delaware limited liability company, as Managing Member, Acadia Realty Limited Partnership, a Delaware limited partnership, as Guarantor, Acadia Investors III, Inc., a Maryland corporation, as Pledgor, Administrative Agent, Banc of America Securities LLC, as Sole Lead Arranger and Sole Book Manager, YC SUSI Trust, as Conduit Lender, Bank of America, N.A., as an Administrator, Alternate Lender and Managing Agent and the other Conduit Lenders, Administrators, Alternate Lenders and Managing Agents from time to time party thereto. Capitalized terms not defined herein shall have the meanings assigned to such terms in the Credit Agreement.

 

Borrower hereby requests an increase in the Facility Amount pursuant to Section 2.12(a) of the Credit Agreement to $_________ 2 (the "Facility Increase"), such Facility Increase to be effective on _______[DATE] (must be at least 3 Business Days after date of Request).

 

In connection with the Facility Increase requested hereby, Borrower hereby represents, warrants, and certifies to Administrative Agent for the benefit of Lenders that:

 

(a) No Event of Default or Potential Default under the Credit Agreement has

 

occurred and is continuing or would result from the Facility Increase;

 

(c)       After giving effect to the Facility Increase, the aggregate amount of the Alternate Lenders' Commitments will not exceed the Maximum Commitment; and

 

(d)       Attached hereto as Schedule I is a calculation of the Borrowing Base, true and correct as of the date hereof.

 

In the event that between the date hereof and the date of the Facility Increase, any event should occur which could reasonably be expected to have a Material Adverse Effect, Borrower shall promptly notify the Administrative Agent.

 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK.

SIGNATURE PAGE FOLLOWS.]

 

 

2           Amount of Facility Increase shall be in a minimum amount of $50,000,000.

 

  

Exhibit G

  

 

This Facility Increase Request is executed as of the date first written above. The undersigned hereby certifies each and every matter contained herein to be true and correct.

 

	 	
BORROWER:

	  	  
	  	
ACADIA STRATEGIC OPPORTUNITY FUND III

	  	
LLC, a Delaware limited liability company

	  	  
	  	  
	  	
By: /s/ Robert Masters

	  	
Name: Robert Masters

	  	
Title: Senior Vice President

 

 

Acknowledged and Agreed To: 

 

GUARANTOR:

 

ACADIA REALTY LIMITED PARTNERSHIP, a Delaware limited partnership

 

	 	
ACADIA REALTY TRUST,

	  	
its General Partner

	  	  
	  	  
	By:  	
/s/ Robert Masters

	  	
Name: Robert Masters

	  	
Title: Senior Vice President

 

4

  

Exhibit G

  

 

EXHIBIT H

to Revolving Credit Agreement

by and among

Acadia Strategic Opportunity Fund III LLC, as Borrower,

Acadia Realty Acquisition III LLC, as Managing Member,

Acadia Realty Limited Partnership, as Guarantor,

Acadia Investors III, Inc., as Pledgor,

Bank of America, N.A., as Administrative Agent,

Banc of America Securities LLC, as Sole Lead Arranger and Sole Book Manager,

YC SUSI Trust, as Conduit Lender,

Bank of America, N.A., as an Administrator, Alternate Lender and Managing Agent,

and

the other Conduit Lenders, Administrators, Alternate Lenders and Managing Agents from

time to time party thereto

 

FORM OF BORROWING BASE CERTIFICATE

 

Bank of America, N.A.

 

214 North Tryon Street, 19th Floor NC 1-027-19-01

Charlotte, NC 28255

Attention:                      Brian S. Williams

Telecopy:                      (704) 968-1215

Telephone:                      (704) 683-4747

 

ADMINISTRATIVE AGENT: Bank of America, N.A.

 

BORROWER:                                                     Acadia Strategic Opportunity Fund III LLC

 

The Borrower and Managing Member each hereby represent and warrant to the Administrative Agent that the Borrowing Base Certificate attached hereto as Schedule I is a true, correct and complete calculation of the Borrowing Base as of [DATE]. Capitalized terms used herein and not otherwise defined shall have the meaning assigned thereto in the Credit Agreement.

  

Exhibit H

  

 

	 	
BORROWER:

	  	  
	  	
ACADIA STRATEGIC OPPORTUNITY FUND III

	  	
LLC, a Delaware limited liability company

	  	  
	  	  
	  	
By: /s/ Robert Masters

	  	
Name: Robert Masters

	  	
Title: Senior Vice President

 

	 	
MANAGING MEMBER:

	  	  
	  	
ACADIA REALTY ACQUISITION III LLC,

	  	
a Delaware limited liability company

	  	  
	  	  
	  	
By: /s/ Robert Masters

	  	
Name: Robert Masters

	  	
Title: Senior Vice President

 

2

  

Exhibit H

  

 

Schedule I

 

(Calculation of the Borrowing Base)

 

[See Attached]

 

  

Exhibit H

  

 

EXHIBIT I

to Revolving Credit Agreement

by and among

Acadia Strategic Opportunity Fund III LLC, as Borrower,

Acadia Realty Acquisition III LLC, as Managing Member,

Acadia Realty Limited Partnership, as Guarantor,

Acadia Investors III, Inc., as Pledgor,

Bank of America, N.A., as Administrative Agent,

Banc of America Securities LLC, as Sole Lead Arranger and Sole Book Manager,

YC SUSI Trust, as Conduit Lender,

Bank of America, N.A., as an Administrator, Alternate Lender and Managing Agent,

and

the other Conduit Lenders, Administrators, Alternate Lenders and Managing Agents from

time to time party thereto

 

FORM OF INVESTOR LETTER

 

[See Attached.]

 

  

Exhibit I

  

 

INVESTOR LETTER

 

[Investor Letter - Investor to copy/print on letterhead]

 

[Leave date blank - Borrower's counsel should obtain 

authorization to complete date

 upon closing]

_________,2007

 

Bank of America, N.A., as 

Administrative Agent 

NC 1-027-19-01

214 North Tryon Street Charlotte, NC 28255

Attention: Brant Murdock

 

	
Re:  

	
Revolving Credit Facility (the "Credit Facility") established pursuant to that certain Revolving Credit Agreement (as the same may be modified, amended, or restated from time to time, the "Credit Agreement"), entered into or to be entered into by and among Acadia Strategic Opportunity Fund III, LLC ("Borrower"), Acadia Realty Acquisition III, LLC ("Managing Member"), Acadia Realty Limited Partnership, as Guarantor, Acadia Investors III, Inc. ("Investor"), Bank of America, N.A., as Administrative Agent, YC SUSI Trust, as Conduit Lender, Bank of America, N.A., as an Administrator, Alternate Lender and Managing Agent and the other Conduit Lenders, Administrators, Alternate Lenders and Managing Agents from time to time party thereto (each, a "Lender").

 

Ladies and Gentlemen:

 

In order to induce Lenders to provide the Credit Facility to Borrower, the undersigned hereby acknowledges and agrees as follows:

 

We have entered into that certain Stockholders Agreement by and among Investor, Yale University, The Vanderbilt University, Carnegie Corporation of New York, Gloster III, LLC, The Board of Trustees of the Leland Stanford Junior University, The William and Flora Hewlett Foundation, The Trustees of the University of Pennsylvania, The Regents of the University of Michigan, Gordon E. and Betty I. Moore Foundation, Morris Ventures, Makena Capital Holdings Prime, L.P, Clarendon Investment Partners II, LP and The Owen Family Trust, dated as of May 15, 2007 (as the same may be further modified, amended, or restated from time to time, the "Stockholders Agreement"; all capitalized terms used and not otherwise defined herein shall have the meanings ascribed thereto in the Stockholders Agreement) pursuant to which we have (i) purchased shares of stock in Investor, which is a member in Borrower and (ii) committed to make cash contributions of capital ("Capital Contributions") to Investor on the terms and subject to the conditions set forth in the Stockholders Agreement in the aggregate amount of $[ ] (our "Capital Commitment"), which Capital Contributions are to be contributed by Investor to Borrower pursuant to the terms of the Operating Agreement.

 

  

  

  

 

As of the date hereof, $[______________] of our Capital Commitment has been called, $____________, of our Capital Commitment remains to be drawn upon the delivery of one or more Drawdown Notices pursuant to and in accordance with the Stockholders Agreement.

 

We hereby agree that we shall deliver to Administrative Agent from time to time upon the request of Managing Member, Investor or Administrative Agent a certificate setting forth the remaining amount of our Capital Commitment which we are obligated to fund (the "Unfunded Capital Commitment").

 

We hereby acknowledge and agree that under the terms of and subject to the conditions set forth in the Stockholders Agreement, we are and shall remain unconditionally obligated to fund our Unfunded Capital Commitment required on account of calls for Capital Contributions duly made in accordance with the terms of the Stockholders Agreement (including, without limitation, subsequent calls for Capital Contributions made in connection with a shortfall in funds available to Borrower as a result of the failure of any other Stockholder or Managing Member to advance funds with respect to a call for Capital Contributions duly made). In addition, we hereby acknowledge and confirm to Administrative Agent, Lenders, Managing Member and Investor that we will make Capital Contributions to the extent of our Unfunded Capital Commitment, to be applied to the repayment of outstanding obligations under the Credit Agreement, whether such Capital Contributions are called by Managing Member, Investor or Administrative Agent for such purpose on behalf of Managing Member and Investor (whether or not any Person is then acting as Managing Member for Borrower or Manager for Investor) without, defense, counterclaim or offset of any kind, including without limitation any defense under Section 365 of the U.S. Bankruptcy Code, all of which we hereby waive. Notwithstanding anything to the contrary in the Stockholders Agreement or Operating Agreement, we hereby acknowledge and agree that (i) our obligation to fund our Unfunded Capital Commitment as and when requested by Administrative Agent is unconditional and (ii) Administrative Agent shall not be required to state any specific purpose or use of funds, deliver any supporting documentation whatsoever or comply with any formalities when making a Drawdown on our Unfunded Capital Commitment, except that such Drawdown must be made in writing.

 

We hereby (i) acknowledge that Borrower, Managing Member and Investor, pursuant to the terms of the Stockholders Agreement and the Credit Agreement are making a collateral assignment to Administrative Agent for the benefit of Lenders of (i) our Capital Contributions; and the right to issue Drawdown Notices and call and receive all payments of all or any portion of our Unfunded Capital Commitment under the Stockholders Agreement to secure all loans and other extensions of credit made under the Credit Facility and all other obligations of Borrower under the Credit Agreement and the other an Documents (as defined in the Credit Agreement), (ii) represent that as of the date hereof, (A) to the best of our knowledge there is no default or circumstance which with the passage of time and/or the giving of notice would constitute a default under the Operating Agreement or the Stockholders Agreement, (B) the Stockholders Agreement has not been modified or amended except for the amendment referred to above and is in full force and effect and enforceable against the undersigned in accordance with its terms and (C) we do not have any right of offset against, or reduction to, our obligation to fund our Unfunded Capital Commitment, (iii) acknowledge that for so long as the Credit Facility is in place we will not amend, modify, supplement, cancel, terminate, reduce or suspend any of the provisions of the Stockholders Agreement or the Operating Agreement relating to the Capital Commitments, the making of Capital Contributions or the incurrence of indebtedness or any other provisions that would adversely affect the rights of Administrative Agent or Lenders without your prior written consent and (iv) acknowledge that until otherwise instructed by Administrative Agent in writing, all future Capital Contributions made by us under the Stockholders Agreement will be made by wire transfer to the following account opened and maintained by Borrower with the Administrative Agent (the "Collateral Account") which Borrower has also pledged as security for the Obligations (as such term is defined in the Credit Agreement):

 

  

2

  

 

 

	

Bank:

	

Bank of America, N.A.

	Account Number: 	

1233060441

	ABA Number: 	026-009-593 
	

Reference:

	Acadia Strategic Opportunity Fund III LLC Collateral 
	 	

Account

	

Contact Person:

	

Mr. Brant Murdock

 

[Add to Yale and Gloster acknowledgments: The language/side letter/guarantees from the Acadia II transaction.]

 

We hereby acknowledge that for so long as the Credit Agreement is in effect, we are obligated, under the terms and subject to the limitations and conditions set forth in the Stockholders Agreement, to honor any Drawdown Notice delivered to us in the name of the Administrative Agent on behalf of Lenders, without setoff, counterclaim or defense by funding the applicable portion of our Capital Commitment into the Collateral Account, provided such Drawdown Notice is delivered for the purpose of paying due and payable obligations of the Borrower to Lenders under the Credit Facility and states on its face that it is delivered for such purpose.

 

We understand that Lenders and Administrative Agent will be relying upon the statements and agreements made herein in connection with making the Credit Facility available to Borrower and, accordingly hereby acknowledge that Capital Contributions we make under the Stockholders Agreement will not satisfy our obligation to fund our Capital Commitment unless such Capital Contributions are paid into the above account (unless we are otherwise instructed by Administrative Agent as described above). We hereby acknowledge that the terms of the Credit Agreement and of each other Loan Document (as defined therein) can be modified without further notice to us or our consent. In addition, we understand that the Credit Agreement and this Investor Letter shall be for the benefit of Administrative Agent, Lenders, and Lenders' successors and assigns, and that this Investor Letter will remain in effect until we are notified jointly by Administrative Agent and Managing Member that the Credit Facility has been terminated.

 

  

3

  

 

We also acknowledge and confirm that (a) we understand that Lenders have not been involved in the organization of Investor or offering of Investor's equity interests, or made any representation in connection therewith, (b) we are not relying on Lenders in any way in connection with our investment in Investor and (c) Lenders have no obligation to provide us with any financial, tax or other information pertaining to Investor or any other Person.

 

For governmental entity Investors:

 

[We represent and warrant that: (i) we are subject to commercial law with respect to our obligations under the Stockholders Agreement and this Investor Letter; (ii) the making and performance of the Stockholders Agreement and this Investor Letter constitute private and commercial acts rather than governmental or public acts, and that neither we nor any of our properties or revenues has any right of immunity from suit, court jurisdiction, execution of a judgment or from any other legal process with respect to our obligations under the Stockholders Agreement and this Investor Letter. To the extent that we may hereafter be entitled, in any jurisdiction in which judicial proceedings may at any time be commenced with respect to the Stockholders Agreement, or this Investor Letter to claim any such immunity, and to the extent that in any such jurisdiction there may be attributed to us such an immunity (whether or not claimed), we hereby irrevocably agree not to claim and hereby irrevocably waive such immunity to the fullest extent permitted by applicable law.]

 

For ERISA Investors:

 

[The undersigned signatory confirms that it is the fiduciary of the plans whose assets are invested in Investor and it confirms that: (i) it made its own determination that the Transaction (defined below) was made on terms that are no less favorable to such plans than those that could be obtained in arm's-length transactions with unrelated parties; (ii) the decision to invest in Investor and to execute and deliver this Investor Letter (the "Transaction") was made by the undersigned, and the undersigned is not included among, is independent of, and is unaffiliated with, Lenders (including the Administrative Agent) and Investor (as defined below); (iii) each plan on behalf of which we have invested in Investor (or commingled funds of related plans): (A) has no less than $100,000,000 of assets; and (B) not more than five percent (5%) of the assets of each such plan (or commingled fund) have been invested in Investor; and (iv) Lenders (including the Administrative Agent): (x) had no influence, authority, or control over the Transaction, and (y) rendered no investment advice with respect to the Transaction. For purposes of this paragraph, a fiduciary is "not included among, is independent of, and unaffiliated with" a Lender (including the Administrative Agent) and Investor, as applicable, if: (A) the fiduciary is not, directly or indirectly, through one or more intermediaries, controlling, controlled by, or under common control with such Lender or Investor; (B) the fiduciary is not an officer, director, employee or relative of, or partner in, such Lender or Investor; and (C) no officer, director, highly-compensated employee, or shareholder of Investor, or any officer, director or highly-compensated employee, or partner of a Lender, is also an officer, director, highly-compensated employee, or partner of the fiduciary. If such individual is a director of the Lender, he or she must abstain from participation in, and not otherwise be involved in, the decision made by the fiduciary to invest in Investor.]

 

  

4

  

 

{or - where this Investor Letter is being signed by a custodian or someone other than the fiduciary:}

 

[We confirm that [_______] is the fiduciary (the "Fiduciary") of the Investor

 

and that the Fiduciary has confirmed to the Investor that: (i) the Fiduciary made its own determination that the Transaction (defined below) was made on terms that are no less favorable to the Investor than those that could be obtained in arm's-length transactions with unrelated parties; (ii) the Fiduciary made the decision to invest in Investor and to execute and deliver this Investor Letter (the "Transaction"), and the Fiduciary is not included among, is independent of, and is unaffiliated with, Lenders (including the Administrative Agent) and Investor (as defined below); (iii) each plan on behalf of which the Investor has invested in Investor (or commingled funds of related plans): (A) has no less than $100,000,000 of assets; and (B) not more than five percent (5%) of the assets of each such plan (or commingled fund) have been invested in Investor; and (iv) Lenders (including the Administrative Agent): (x) had no influence, authority, or control over the Fiduciary's decision to invest in Investor, and (y) rendered no investment advice with respect to the Investor's investment in Investor. For purposes of this paragraph, a fiduciary is "not included among, is independent of, and unaffiliated with" a Lender (including the Administrative Agent) and Investor, as applicable, if: (A) the fiduciary is not, directly or indirectly, through one or more intermediaries, controlling, controlled by, or under common control with such Lender or Investor; (B) the fiduciary is not an officer, director, employee or relative of, or partner in, such Lender or Investor; and (C) no officer, director, highly-compensated employee, or shareholder of Investor, or any officer, director or highly-compensated employee, or partner of a Lender, is also an officer, director, highly-compensated employee, or partner of the fiduciary. If such individual is a director of the Lender, then he or she must abstain from participation in, and not otherwise be involved in, the decision made by the fiduciary to invest in Investor.]

 

For non-U.S. Investors:

 

[We acknowledge and agree that: (i) this Investor Letter shall be governed by the laws of the State of New York; (ii) (x) any suit, action or proceeding against us with respect to this Investor Letter may be brought in the courts of the State of New York, or in the United States Courts located in the Borough of Manhattan in New York City, in the Administrative Agent's sole discretion; and (y) we hereby submit to the non-exclusive jurisdiction of such courts for the purpose of any suit; (iii) service of all writs, process and summonses in any such suit, action or proceeding brought in the State of New York may be brought upon our process agent appointed below, and the Investor hereby irrevocably appoints [Name] ______, [Address]________, Attention:______ , as our process agent, as its true and lawful attorney-in-fact in the name, place and stead of it to accept such service of any and all such writs, process and summonses; and (iv) we hereby irrevocably waive: (x) any objection which we may have now or hereafter have to the laying of venue of any suit, action or proceeding arising out of or relating to this Investor Letter brought in the courts located in the State of New York, Borough of Manhattan in New York City; and (y) any claim that any such suit, action or proceeding brought in any such court has been brought in an inconvenient forum.]

 

REMAINDER OF PAGE INTENTIONALLY LEFT BLANK.

SIGNATURE PAGE FOLLOWS.

 

  

5

  

 

	 	
[NAME ON INVESTOR]

	  	  
	  	  
	  	
By: 

	  	
Name:

	  	
Title: 

	 	 
	 	Address: 
	 	 
	 	[____________________] 
	 	[____________________] 

 

  

[_______] Investor Letter

Signature Page

  

 

EXHIBIT J

 

[Reserved]

 

  

Exhibit J

  

 

EXHIBIT K

to Revolving Credit Agreement

by and among

Acadia Strategic Opportunity Fund III LLC, as Borrower,

Acadia Realty Acquisition III LLC, as Managing Member,

Acadia Realty Limited Partnership, as Guarantor,

Acadia Investors III, Inc., as Pledgor,

Bank of America, N.A., as Administrative Agent,

Banc of America Securities LLC, as Sole Lead Arranger and Sole Book Manager,

YC SUSI Trust, as Conduit Lender,

Bank of America, N.A., as an Administrator, Alternate Lender and Managing Agent,

and

the other Conduit Lenders, Administrators, Alternate Lenders and Managing Agents from

time to time party thereto

 

[RESERVED]

 

  

Exhibit K

  

 

EXHIBIT L

to Revolving Credit Agreement

by and among

Acadia Strategic Opportunity Fund III LLC, as Borrower,

Acadia Realty Acquisition III LLC, as Managing Member,

Acadia Realty Limited Partnership, as Guarantor,

Acadia Investors III, Inc., as Pledgor,

Bank of America, N.A., as Administrative Agent,

Banc of America Securities LLC, as Sole Lead Arranger and Sole Book Manager,

YC SUSI Trust, as Conduit Lender,

Bank of America, N.A., as an Administrator, Alternate Lender and Managing Agent,

and

the other Conduit Lenders, Administrators, Alternate Lenders and Managing Agents from

time to time party thereto

 

FORM OF CAPITAL CONTRIBUTIONS PLEDGE AGREEMENT

 

[See Attached]

 

  

Exhibit L

  

 

EXHIBIT M

to Revolving Credit Agreement

by and among

Acadia Strategic Opportunity Fund III LLC, as Borrower,

Acadia Realty Acquisition III LLC, as Managing Member,

Acadia Realty Limited Partnership, as Guarantor,

Acadia Investors III, Inc., as Pledgor,

Bank of America, N.A., as Administrative Agent,

Banc of America Securities LLC, as Sole Lead Arranger and Sole Book Manager,

YC SUSI Trust, as Conduit Lender,

Bank of America, N.A., as an Administrator, Alternate Lender and Managing Agent,

and

the other Conduit Lenders, Administrators, Alternate Lenders and Managing Agents from

time to time party thereto

 

FORM OF ASSIGNMENT AND ASSUMPTION AGREEMENT

 

This Assignment and Assumption (this "Assignment and Assumption") is dated as of the Effective Date set forth below and is entered into by and between [ASSIGNOR] (the "Assignor") and [ASSIGNEE] (the "Assignee"). Capitalized terms not defined herein shall have the meanings assigned to such terms in the Credit Agreement referred to below (as amended, modified, supplemented or restated from time to time, the "Credit Agreement"), receipt of a copy of which is hereby acknowledged by the Assignee. The Standard Terms and Conditions set forth in Annex 1 attached hereto (the "Standard Terms and Conditions") are hereby agreed to and incorporated herein by reference and made a part of this Assignment and Assumption as if set forth herein in full.

 

For an agreed consideration, the Assignor hereby irrevocably sells and assigns to the Assignee, and the Assignee hereby irrevocably purchases and assumes from the Assignor, subject to and in accordance with the Standard Terms and Conditions and the Credit Agreement, as of the Effective Date inserted by the Administrative Agent as contemplated below: (a) all of the Assignor's rights and obligations in its capacity as [Conduit Lender] [Alternate Lender] under the Credit Agreement and any other documents or instruments delivered pursuant thereto to the extent related to the amount and percentage interest identified below of all of such outstanding rights and obligations of the Assignor under the respective facilities identified below (including without limitation any letters of credit or guarantees included in such facilities); and (b) to the extent permitted to be assigned under applicable law, all claims, suits, causes of action and any other right of the Assignor (in its capacity as a [Conduit Lender] [Alternate Lender]) against any Person, whether known or unknown, arising under or in connection with the Credit Agreement, any other documents or instruments delivered pursuant thereto or the loan transactions governed thereby or in any way based on or related to any of the foregoing, including, but not limited to, contract claims, tort claims, malpractice claims, statutory claims and all other claims at law or in equity related to the rights and obligations sold and assigned pursuant to clause (a) above (the rights and obligations sold and assigned pursuant to clauses (a) and (b) above being referred to herein collectively as, the "Assigned Interest"). Such sale and assignment is without recourse to the Assignor and, except as expressly provided in this Assignment and Assumption, without representation or warranty by the Assignor.

 

  

Exhibit M

  

 

1.                      Assignor:

 

2.                      Assignee: 

                 [and Assignee is an Affiliate/Approved Fund of [identify Lender] l

 

3.                      Borrower:    Acadia Strategic Opportunity Fund III LLC

 

4.                      Administrative Agent: Bank of America, N.A., as Administrative Agent under the Credit Agreement

 

	
5.

	
Credit Agreement: The Revolving Credit Agreement dated as of October 10, 2007 among Acadia Strategic Opportunity Fund III LLC, Acadia Realty Acquisition III LLC, Acadia Realty Limited Partnership, Acadia Investors III, Inc., the Lenders and other Persons party thereto, and Bank of America, N.A., as Administrative Agent

 

6.                      Assigned Interest: 

	 	
ASSIGNOR

	  	[NAME OF ASSIGNOR]  
	 	 
	  	
 

	  	

By: 

	  	

Name: 

	  	Title:  

 

	
Facility Assigned

	 	
Aggregate

Amount of

Commitment for

all [Alternate

Lenders] [Conduit

Lenders]2

	 	
Amount of

Commitment

Assigned*

	
Amount of

Loans

Assigned*

	 	
Percentage Assigned

of Commitment/

Loans3

	 
	
Revolving   Credit

Commitment

	 	$	 	 	 	 	 	$	 	%

 

 

[9.           Trade Date: ]4

 

 

 

Effective Date:_______ ______,20____    [TO BE INSERTED BY ADMINISTRATIVE AGENT AND WHICH SHALL BE THE EFFECTIVE DATE OF RECORDATION OF TRANSFER N THE REGISTER THEREFOR]

 

REMAINDER OF PAGE INTENTIONALLY LEFT BLANK.

SIGNATURE PAGES FOLLOW.

 

 

 Select or delete as applicable.

2 Amount to be adjusted by the counterparties to take into account any payments made between the Trade Date and the Effective Date.

3 Set forth, to at least 9 decimals, as a percentage of the Commitment/Loans of all Lenders thereunder.

* Amounts to be adjusted by the counterparties to take into account payments and prepayments made between the Trade Date and the Effective Date.

4 To be completed if the Assignor and the Assignee intend that the minimum assignment amount is to be determined as of the Trade Date. If Trade Date is specified in the Assignment and Assumption Agreement, as of the Trade Date, shall not be less than $2,500,000, and, after such assignment, no Lender shall hold a Commitment of less than $5,000,000.

 

2

  

Exhibit M

  

 

The terms set forth in this Assignment and Assumption are hereby agreed to:

 

	 	
ASSIGNOR

	  	[NAME OF ASSIGNOR]  
	 	 
	  	
 

	  	

By: 

	  	

Name: 

	  	Title:  

 

	 	
ASSIGNEE

	  	[NAME OF ASSIGNEE]  
	 	 
	  	
 

	  	

By: 

	  	

Name: 

	  	Title:  

 

[Consented to and]5 Accepted:

 

 

BANK OF AMERICA, N.A., as Administrative Agent

 

By:

       Name:

       Title:

 

[Consented to]6 [and Acknowledged]7 by:

 

	 	
ACADIA STRATEGIC OPPORTUNITY FUND III

	  	
LLC, a Delaware limited liability company

	  	  
	  	  
	  	
By: /s/ Robert Masters

	  	
Name: Robert Masters

	  	
Title: Senior Vice President

 

 

5 To be used only if the consent of the Administrative Agent is required by the terms of the Credit Agreement. 

6 To be used only if the consent of the Borrower is required by the terms of the Credit Agreement. 

7 To be used only if assignment is made as a result of a demand by Borrower under the Credit Agreement.

 

3

  

Exhibit M

  

 

ANNEX 1 TO ASSIGNMENT AND ASSUMPTION AGREEMENT 

STANDARD TERMS AND CONDITIONS FOR 

ASSIGNMENT AND ASSUMPTION

 

1.                       Representations and Warranties.

 

1.1 Assignor. The Assignor: (a) represents and warrants that: (i) it is the legal and beneficial owner of the Assigned Interest; (ii) the Assigned Interest is free and clear of any lien, encumbrance or other adverse claim; and (iii) it has full power and authority, and has taken all action necessary, to execute and deliver this Assignment and Assumption and to consummate the transactions contemplated hereby; and (b) assumes no responsibility with respect to: (i) any statements, warranties or representations made in or in connection with the Credit Agreement or any other Loan Document; (ii) the execution, legality, validity, enforceability, genuineness, sufficiency or value of the Loan Documents or any collateral thereunder; (iii) the financial condition of the Borrower, any of its subsidiaries or Affiliates or any other Person obligated in respect of any Loan Document; or (iv) the performance or observance by the Borrower, any of its subsidiaries or Affiliates or any other Person of any of their respective obligations under any Loan Document.

 

1.2. Assignee. The Assignee: (a) represents and warrants that: (i) it has full power and authority, and has taken all action necessary, to execute and deliver this Assignment and Assumption and to consummate the transactions contemplated hereby and to become a [Conduit Lender] [Alternate Lender] under the Credit Agreement; (ii) it meets all requirements of an Eligible Assignee under the Credit Agreement (subject to receipt of such consents as may be required under the Credit Agreement); (iii) from and after the Effective Date, it shall be bound by the provisions of the Credit Agreement as a [Conduit Lender] [Alternate Lender] thereunder and, to the extent of the Assigned Interest, shall have the obligations of a [Conduit Lender] [Alternate Lender] thereunder; (iv) it has received a copy of the Credit Agreement, together with copies of the most recent financial statements delivered pursuant to Section 9.1 thereof, as applicable, and such other documents and information as it has deemed appropriate to make its own credit analysis and decision to enter into this Assignment and Assumption and to purchase the Assigned Interest on the basis of which it has made such analysis and decision independently and without reliance on the Administrative Agent or any other Lender; and (v) if it is a Foreign Lender, attached to the Assignment and Assumption is any documentation required to be delivered by it pursuant to the terms of the Credit Agreement, duly completed and executed by the Assignee; and (b) agrees that: (i) it will, independently and without reliance on the Administrative Agent, the Assignor or any other Lender, and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under the Loan Documents; and (ii) it will perform in accordance with their terms all of the obligations which by the terms of the Loan Documents are required to be performed by it as a [Conduit Lender] [Alternate Lender].

 

2.             Payments. From and after the Effective Date, the Administrative Agent shall make all payments in respect of the Assigned Interest (including payments of principal, interest, fees and other amounts) to the Assignor for amounts which have accrued to but excluding the Effective Date and to the Assignee for amounts which have accrued from and after the Effective Date.

 

4

  

Exhibit M

  

 

3. General Provisions. This Assignment and Assumption shall be binding upon. and inure to the benefit of, the parties hereto and their respective successors and assigns. This Assignment and Assumption may be executed in any number of counterparts, which together shall constitute one instrument. Delivery of an executed counterpart of a signature page of this Assignment and Assumption by telecopy shall be effective as delivery of a manually executed counterpart of this Assignment and Assumption. Pursuant to Section 5-1401 of the New York General Obligations Law, the substantive laws of the State of New York, without regard to the choice of law principles that might otherwise apply, and the applicable federal laws of the United States of America, shall govern the validity, construction, enforcement and interpretation of this Assignment and Assumption.

 

5

  

Exhibit M

  

 

EXHIBIT N

to Revolving Credit Agreement

by and among

Acadia Strategic Opportunity Fund III LLC, as Borrower,

Acadia Realty Acquisition III LLC, as Managing Member,

Acadia Realty Limited Partnership, as Guarantor,

Acadia Investors III, Inc., as Pledgor,

Bank of America, N.A., as Administrative Agent,

Banc of America Securities LLC, as Sole Lead Arranger and Sole Book Manager,

YC SUSI Trust, as Conduit Lender,

Bank of America, N.A., as an Administrator, Alternate Lender and Managing Agent,

and

the other Conduit Lenders, Administrators, Alternate Lenders and Managing Agents from

time to time party thereto

 

  FORM OF BORROWER GUARANTY

 

 Dated________________, 20__

 

1.             The undersigned, Acadia Strategic Opportunity Fund III LLC, a Delaware limited liability company ("Guarantor"), hereby irrevocably, unconditionally and absolutely guarantees in favor of BANK OF AMERICA, N.A., as Administrative Agent for each of the Secured Parties under that certain Credit Agreement referred to below ("Creditor"), the prompt payment when due of all interest, principal, fees, expenses and other amounts now or hereafter represented by, or arising in connection with: (a) that certain Qualified Borrower [Promissory] [Letter of Credit] Note (the "Qualified Borrower Note"), dated, 20 in the amount of $______, payable by __________("Qualified Borrower") to the order of Creditor, including without limitation all liabilities and indebtedness represented or evidenced by any promissory note given in renewal, extension, modification or substitution of or for the Qualified Borrower Note; and (b) all obligations of Qualified Borrower under the Credit Agreement (collectively, the "Guaranteed Debt"). This is an unconditional guaranty of payment, and not a guaranty of collection, and Creditor may enforce Guarantor's obligations hereunder pursuant to Section 2.6 of the Credit Agreement without first suing, or enforcing its rights or remedies against, Qualified Borrower or any other obligor, or enforcing or collecting any present or future collateral security for the Guaranteed Debt. Unless otherwise defined in this guaranty agreement (this "Borrower Guaranty"), capitalized terms not defined herein shall have the meanings assigned to such terms in the Credit Agreement (hereinafter defined).

 

2.             Guarantor hereby waives notice of: (a) acceptance of this Borrower Guaranty; (b) the extension of credit by Creditor to Qualified Borrower; (c) the occurrence of any breach or default by Qualified Borrower in respect of the Guaranteed Debt; (d) the sale or foreclosure on any collateral for the Guaranteed Debt; (e) the transfer of the Guaranteed Debt to any third party to the extent permitted under the Credit Agreement and to the extent that such notice is not required under the Credit Agreement; and (f) all other notices, except as otherwise required under the Credit Agreement.

 

  

Exhibit N

  

 

3.            Guarantor hereby consents and agrees to, and acknowledges that its obligations hereunder shall not be released or discharged by, the following: (a) the renewal, extension, modification or alteration of the Qualified Borrower Note, the Guaranteed Debt or any related document or instrument; (b) any forbearance or compromise granted to Qualified Borrower by Creditor; (c) the insolvency, bankruptcy, liquidation or dissolution of Qualified Borrower; (d) the invalidity, illegality or unenforceability of all or any part of the Guaranteed Debt; (e) the full or partial release of the Qualified Borrower or any other obligor; (f) the 'release, surrender, exchange, subordination, deterioration, waste, loss or impairment (including without limitation negligent, willful, unreasonable or unjustifiable impairment) of any collateral for the Guaranteed Debt; (g) the failure of Creditor properly to obtain, perfect or preserve any security interest or lien in any such collateral; (h) the failure of Creditor to exercise diligence, commercial reasonableness or reasonable care in the preservation, enforcement or sale of any such collateral; and (i) any other act or omission of Creditor or Qualified Borrower which would otherwise constitute or create a legal or equitable defense in favor of Guarantor.

 

4.            Notwithstanding anything to the contrary in this Borrower Guaranty, until the Guaranteed Debt has been paid in full, Guarantor hereby irrevocably waives all rights it may have at law or in equity (including, without limitation, any law subrogating Guarantor to the rights of Creditor) to seek contribution, indemnification, or any other form of reimbursement from Qualified Borrower, any other guarantor, or any other person now or hereafter primarily or secondarily liable for any obligations of Qualified Borrower to Creditor, for any disbursement made by Guarantor under or in connection with this Borrower Guaranty or otherwise.

 

5.            Guarantor represents and warrants that it has received or will receive direct or indirect benefit from the making of this Borrower Guaranty and the creation of the Guaranteed Debt, that Guarantor is familiar with the financial condition of Qualified Borrower and the value of any collateral security for the Guaranteed Debt and that Creditor has made no representations to Guarantor in order to induce Guarantor to execute this Borrower Guaranty.

 

6.            If Qualified Borrower is or shall hereafter be liable to Creditor for any obligation, indebtedness or liability other than the Guaranteed Debt, and Creditor should collect or receive any payments, funds or distributions which are not specifically required, by law or agreement, to be applied to the Guaranteed Debt, then Creditor may, in its sole discretion, apply such payments, funds or distributions to indebtedness of Qualified Borrower other than the Guaranteed Debt.

 

7.            This Borrower Guaranty shall continue to be effective or be reinstated, as the case may be, if at any time any payment of any of the Guaranteed Debt is rescinded or must otherwise be returned by the Creditor, upon the insolvency, bankruptcy, reorganization, or dissolution of the Qualified Borrower or otherwise, all as though such payment had not been made.

 

8.            This Borrower Guaranty has been executed and delivered pursuant to that certain Revolving Credit Agreement (as amended, modified, supplemented, or restated from time to time, the "Credit Agreement") dated as of October 10, 2007, by and among Guarantor, Acadia Realty Acquisition III LLC, as Managing Member, Acadia Realty Limited Partnership, as Guarantor, Acadia Investors III, Inc., as Pledgor, Creditor, Banc of America Securities LLC, as Sole Lead Arranger and Sole Book Manager, YC SUSI Trust, as Conduit Lender, Bank of America, N.A., as an Administrator, Alternate Lender and Managing Agent and the other Conduit Lenders, Administrators, Alternate Lenders and Managing Agents from time to time party thereto, and is one of the "Borrower Guaranties" referred to therein. This Borrower Guaranty may be amended only by a written instrument executed by Guarantor and Creditor.

 

2

  

Exhibit N

  

 

9.            Pursuant to Section 5-1401 of the New York General Obligations Law, the substantive laws of the State of New York, without regard to the choice of law principles that might otherwise apply, and the applicable federal laws of the United States of America, shall govern the validity, construction, enforcement and interpretation of this Borrower Guaranty.

 

10.            Any suit, action or proceeding against Guarantor with respect to this Borrower Guaranty or any judgment entered by any court in respect hereof, may be brought in the courts of the State of New York, or in the United States Courts located in the Borough of Manhattan in New York City as Creditor in its sole discretion may elect and Guarantor hereby submits to the non-exclusive jurisdiction of such courts for the purpose of any such suit, action or proceeding. Guarantor hereby irrevocably consents to the service of process in any suit, action or proceeding in said court by the mailing thereof by Creditor by registered or certified mail, postage prepaid, to Guarantor's address at c/o Acadia Realty Trust, 1311 Mamaroneck Avenue, Suite 260, White Plains, New York 10605, Attention: Robert Masters, Esq. Guarantor hereby irrevocably waives any objections which it may now or hereafter have to the laying of venue of any suit, action or proceeding arising out of or relating to this Borrower Guaranty brought in the courts located in the State of New York, Borough of Manhattan in New York City, and hereby further irrevocably waives any claim that any such suit, action or proceeding brought in any such court has been brought in an inconvenient forum. GUARANTOR, AND BY ITS ACCEPTANCE HEREOF CREDITOR, EACH HEREBY WAIVES TRIAL BY JURY IN ANY SUIT, ACTION OR PROCEEDING BROUGHT IN CONNECTION WITH THIS BORROWER GUARANTY, WHICH WAIVER IS INFORMED AND VOLUNTARY.

 

Reference is hereby made to Section 14.19 of the Credit Agreement regarding the non-personal liability of Managing Member, the provisions of which are hereby incorporated by reference in this Borrower Guaranty as if fully set forth herein, for the payment and performance of Guarantor's obligations hereunder.

 

On the full, final and complete satisfaction of the Guaranteed Debt, this Guaranty shall be of no further force or effect. Thereafter, upon request, Creditor shall reasonably provide Guarantor, at Guarantor's sole expense, a written release of its obligations hereunder.

 

REMAINDER OF PAGE INTENTIONALLY LEFT BLANK.

SIGNATURE PAGES FOLLOW.

 

3

  

Exhibit N

  

 

EXECUTED on the date first above written.

 

	 	
ACADIA STRATEGIC OPPORTUNITY FUND III

	  	
LLC, a Delaware limited liability company

	  	  
	  	  
	  	
By: /s/ Robert Masters

	  	
Name: Robert Masters

	  	
Title: Senior Vice President

 

	 	
Acknolwedged and Agreed:

	  	  
	  	
ACADIA REALTY LIMITED PARTNERSHIP,

	  	
a Delaware limited liability company

	  	  
	  	By: ACADIA REALTY TRUST,
	 	
its general partner

	 	 
	  	
By: /s/ Robert Masters

	  	
Name: Robert Masters

	  	
Title: Senior Vice President

 

 

Signature Page to

Guaranty of Payment

Exhibit N

  

 

	 	Accepted and Approved:
	 	 
	 	BANK OF AMERICA, N.A.
	 	as Administrative Agent 
	 	 
	  	
By: 

	  	
Name: 

	  	
Title:

 

  

Exhibit N

  

 

EXHIBIT 0

to Revolving Credit Agreement

by and among

Acadia Strategic Opportunity Fund III LLC, as Borrower,

Acadia Realty Acquisition III LLC, as Managing Member,

Acadia Realty Limited Partnership, as Guarantor,

Acadia Investors III, Inc., as Pledgor,

Bank of America, N.A., as Administrative Agent,

Banc of America Securities LLC, as Sole Lead Arranger and Sole Book Manager,

YC SUSI Trust, as Conduit Lender,

Bank of America, N.A., as an Administrator, Alternate Lender and Managing Agent,

and

the other Conduit Lenders, Administrators, Alternate Lenders and Managing Agents from

time to time party thereto

 

FORM OF COMPLIANCE CERTIFICATE FOR [              ] ENDED [              ]

DATE: [DATE]

 

ADMINISTRATIVE AGENT: Bank of America, N.A.

 

BORROWER:                                                     Acadia Strategic Opportunity Fund III LLC

 

	
 

This certificate is delivered under the Revolving Credit Agreement, dated as of October 10, 2007 (as amended, modified, supplemented, or restated from time to time, the "Credit Agreement"), among Borrower, Acadia Realty Acquisition III LLC, as Managing Member, Acadia Realty Limited Partnership, as Guarantor, Acadia Investors III, Inc., as Pledgor, Administrative Agent, Banc of America Securities LLC, as Sole Lead Arranger and Sole Book Manager, YC SUSI Trust, as Conduit Lender, Bank of America, N.A., as an Administrator, Alternate Lender and Managing Agent and the other Conduit Lenders, Administrators, Alternate Lenders and Managing Agents from time to time party thereto. Capitalized terms not defined herein shall have the meanings assigned to such terms in the Credit Agreement.

 

The undersigned Responsible Officer hereby certifies as of the date hereof that he/she is authorized to execute and deliver this certificate to the Administrative Agent on behalf of Borrower, and that as of [date at the end of the period indicated above] (the "Reporting Date"):

 

	
  

	
(a) The undersigned has reviewed and is familiar with the terms and provisions of the Loan Documents and has made, or caused to be made under his/her supervision, a detailed review of the transactions and condition (financial or otherwise) of Borrower during the account period covered by the attached financial statements, which fairly represent the financial condition and the results of the operations of the Borrower, and no Event of Default (nor any Potential Default) exists which has not been cured or waived (except the Events of Default or Potential Defaults, if any, together with the details of the actions that Borrower is taking or proposes to take with respect thereto, described on Annex A to this Certificate);

 

  

Exhibit O

  

 

 

	
(b)

	
The Borrowers are in compliance with all the covenants set forth in Section 10 of the Credit Agreement and Borrower and Pledgor are in compliance with Section 11.11 of the Credit Agreement, and calculations evidencing such status are as set forth on Annex B to this certificate; and

 

	
  

	
(c)

	
The calculation of the Borrowing Base attached hereto as Annex C is true and correct as of the date hereof, and any Investors which have been subject to an Exclusion Event are noted thereon.

 

	 	[Signature of Responsible Officer]
	 	 
	  	
By: 

	  	
Name: 

	  	
Title:

 

  

Exhibit O

  

 

ANNEX A

 

  

Annex A

  

 

ANNEX B

 

  

Annex B

  

 

ANNEX C

 

  

Annex C

  

 

EXHIBIT P

to Revolving Credit Agreement

by and among

Acadia Strategic Opportunity Fund III LLC, as Borrower,

Acadia Realty Acquisition III LLC, as Managing Member,

Acadia Realty Limited Partnership, as Guarantor,

Acadia Investors III, Inc., as Pledgor,

Bank of America, N.A., as Administrative Agent,

Banc of America Securities LLC, as Sole Lead Arranger and Sole Book Manager,

YC SUSI Trust, as Conduit Lender,

Bank of America, N.A., as an Administrator, Alternate Lender and Managing Agent,

and

the other Conduit Lenders, Administrators, Alternate Lenders and Managing Agents from

time to time party thereto

FORM OF GUARANTY OF CAPITAL

 

[See Tab 6]

 

Exhibit P

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