SINGLE currency Term FACILITY Agreement FOR REAL ESTATE FINANCE SINGLE PROPERTY DEVELOPMENT TRANSACTIONS
[currency and amount in numbers]
FACILITY AGREEMENT
dated []
for
[NAME OF PRINCIPAL COMPANY]
arranged by
[NAME OF ARRANGERS]
with
[NAME OF AGENT]
acting as Agent
and
[NAME OF SECURITY AGENT]
acting as Security Agent
[NAME OF LAW FIRM]
The Loan Market Association ("LMA") consents to the use and reproduction of this document by members of the Loan Market Association for the preparation and documentation of agreements relating to transactions or potential transactions in the loan markets. This document may be reproduced and transmitted to non-members of the Loan Market Association in hard copy only. The LMA does not consent to the use, reproduction, distribution or communication to the public of this document for any other purpose, in any other manner or by any other person and expressly reserves all other rights.
Loan Market Association. All rights reserved.
LMA.REF.DP.02 (development property) 14 June 2016
CONTENTSClause / Page
1.Definitions And Interpretation......
2.The Facility......
3.Purpose......
4.Conditions Of Utilisation......
5.Utilisation......
6.Repayment......
7.Prepayment And Cancellation......
8.Interest......
9.Interest Periods......
10.Changes To The Calculation Of Interest......
11.Fees......
12.Tax Gross Up And Indemnities......
13.Increased Costs......
14.Other Indemnities......
15.Mitigation By The Lenders......
16.Costs And Expenses......
17.Bank Accounts......
18.Guarantee And Indemnity......
19.Representations......
20.Information Undertakings......
21.Financial Covenants......
22.General Undertakings......
23.Development Undertakings......
24.Property Undertakings......
25.Events Of Default......
26.Changes To The Lenders[ And Hedge Counterparties]
27.Changes To The Transaction Obligors......
28.Role Of The Agent, The Security Agent [And] The Arranger [And The Reference Banks]
29.[Application Of Proceeds......
30.Conduct Of Business By The Finance Parties......
31.Sharing Among The Finance Parties......
32.Payment Mechanics......
33.Set-Off......
34.Notices......
35.Calculations And Certificates......
36.Partial Invalidity......
37.Remedies And Waivers......
38.Amendments And Waivers......
39.Confidential Information......
40.Confidentiality Of Funding Rates [And Reference Bank Quotations]
41.Counterparts......
42.Governing Law......
43.Enforcement......
Schedule 1 The Original Parties......
Part I The Guarantors......
Part II The Original Lenders [- Other Than UK Non-Bank Lenders]......
Part III [The Original Lenders - UK Non-Bank Lenders]
Part IV [The Original Hedge Counterparties]......
Schedule 2 Conditions Precedent......
Schedule 3 Utilisation Request......
Schedule 4 [Amortisation Schedule]......
Schedule 5 Mandatory Cost Formula......
Schedule 6 Form Of Transfer Certificate......
Schedule 7 Form Of Assignment Agreement......
Schedule 8 Form Of Hedge Counterparty Accession Letter......
Schedule 9 Form Of Compliance Certificate......
Schedule 10 [LMA Form Of Confidentiality Undertaking]......
Schedule 11 Budgeted Costs......
Schedule 12 Milestones......
Schedule 13 Timetables......
Schedule 14 [Benchmark]
LMA.REF.DP.02 (development property) 14 June 2016
THIS AGREEMENT is dated [] and made between:
(1)[] registered in [] (registered number []) (the "Borrower");
(2)THE COMPANIES listed in Part I of Schedule 1 (The Original Parties) as guarantors (the "Guarantors");[1]
(3)[] [and []] as mandated lead arranger[s] ([whether acting individually or together] the "Arranger");
(4)THE FINANCIAL INSTITUTIONS listed in Part II and Part III of Schedule 1 (The Original Parties) as lenders (the "Original Lenders");
(5)[THE FINANCIAL INSTITUTIONS listed in Part IV of Schedule 1 (The Original Parties) as hedge counterparties (the "[Original] Hedge Counterparties")][2];
(6)[] as agent of the other Finance Parties (the "Agent"); and
(7)[] as security trustee for the Secured Parties (the "Security Agent").
IT IS AGREED as follows:
SECTION 1
INTERPRETATION
1.Definitions and Interpretation
1.1Definitions
In this Agreement:
["1992 ISDA Master Agreement" means the Master Agreement (Multicurrency – Cross Border) as published by the International Swaps and Derivatives Association, Inc.
"2002 ISDA Master Agreement" means the 2002 Master Agreement as published by the International Swaps and Derivatives Association, Inc.][3]
"Account" means the General Account, the Deposit Account,[ the Disposals Account,] the Rent Account, [the Retention Account] or the [VAT Account].
["Additional Hedge Counterparty" means a bank or financial institution which becomes a Hedge Counterparty in accordance with Clause 26.8 ([Additional Hedge Counterparties).][4]
"Affiliate" means, in relation to any person, a Subsidiary of that person or a Holding Company of that person or any other Subsidiary of that Holding Company.
"Agreement for Lease" means an agreement to grant an Occupational Lease for all or part of the Property [and includes the Principal Agreement for Lease].
["Allocated Loan Amount" means with respect to a Unit[[5]].
["Architect" means [] or any other architects appointed by the Borrower [or the Contractor] in respect of the Development in accordance with this Agreement.]
["Assignation of Rent" means an assignation of rent derived from the Property entered into or to be entered into by the Borrower in favour of the Security Agent in an agreed form.[6]]
["Assignation of []" means an assignation of [] entered into or to be entered into by the Borrower in favour of the Security Agent in an agreed form.[7]]
"Assignment Agreement" means an agreement substantially in the form set out in Schedule 7 (Form of Assignment Agreement) or any other form agreed between the relevant assignor and assignee.
"Authorisation" means an authorisation, consent, approval, resolution, licence, exemption, filing, notarisation or registration.
"Availability Period" means[ the period from and including the date of this Agreement to and including []]/[, at any time, the period from and including the date of this Agreement to and including the date falling [ ] month[s] before the date on which at that time the Project Monitor estimates that Practical Completion will occur]/[the period from and including the date of this Agreement to and including the date falling [ ] month[s] after the date on which Practical Completion occurs].[8]
"Available Commitment" means a Lender's Commitment minus:
(a)the amount of its participation in any outstanding Loans; and
(b)in relation to any proposed Utilisation, the amount of its participation in any Loans that are due to be made on or before the proposed Utilisation Date.
"Available Facility" means the aggregate for the time being of each Lender's Available Commitment.
["Benchmark Rate" means, in relation to any Loan:
(a)the applicable Screen Rate as of the Specified Time for [sterling][9] /[euro][10]/[other][11] and for a period equal in length to the Interest Period of that Loan; or
(b)as otherwise determined pursuant to Clause10.1 ([Unavailability of Screen Rate)[,
and if, in either case, that rate is less than zero, the Benchmark Rate shall be deemed to be zero].][12]
["Break Costs" means the amount (if any) by which:
(a)the interest which a Lender should have received for the period from the date of receipt of all or any part of its participation in a Loan or Unpaid Sum to the last day of the current Interest Period in respect of that Loan or Unpaid Sum, had the principal amount or Unpaid Sum received been paid on the last day of that Interest Period;
exceeds:
(b)the amount which that Lender would be able to obtain by placing an amount equal to the principal amount or Unpaid Sum received by it on deposit with a leading bank for a period starting on the Business Day following receipt or recovery and ending on the last day of the current Interest Period.][13]
["Break Costs" means [].][14]
"Budgeted Costs" means the itemised budgeted costs and expenses [and funding][15] relating to the [acquisition/refinancing and development] of the Property, substantially in the form set out in Schedule 11 (Budgeted Costs) supplied to the Agent as a condition precedent under this Agreement on or before the first Utilisation Date.
"Building Contract" means [the building contract dated [ ] between the Borrower and the Contractor]/[a trade or building contract entered into or to be entered into between the Borrower and a Contractor].
"Business Day" means a day (other than a Saturday or Sunday) on which banks are open for general business in London[16] /[and which is a TARGET Day][17]/ [and any day specified as such in Schedule 14 ([Benchmark])][18].
"Code" means the US Internal Revenue Code of 1986.
"Collateral Warranty" means a collateral warranty given by [the/a] Contractor or a Consultant in favour of the Security Agent in relation to the Development.
"Commitment" means:
(a)in relation to an Original Lender, the amount set opposite its name under the heading "Commitment" in Part II or Part III of Schedule 1 (The Original Parties) and the amount of any other Commitment transferred to it under this Agreement; and
(b)in relation to any other Lender, the amount of any Commitment transferred to it under this Agreement,
to the extent not cancelled, reduced or transferred by it under this Agreement.
"Compensation Prepayment Proceeds" means the proceeds of all compensation and damages for the compulsory purchase of, or any blight or disturbance affecting, the Property.
["Compliance Certificate" means a certificate [substantially in the form set out in Schedule 9 (Form of Compliance Certificate)]/[in form and substance satisfactory to the Agent].]
"Confidential Information" means all information relating to any Obligor, the Group, the Finance Documents or the Facility of which a Finance Party becomes aware in its capacity as, or for the purpose of becoming, a Finance Party or which is received by a Finance Party in relation to, or for the purpose of becoming a Finance Party under, the Finance Documents or the Facility from either:
(a)any member of the Group or any of its advisers; or
(b)another Finance Party, if the information was obtained by that Finance Party directly or indirectly from any member of the Group or any of its advisers,
in whatever form, and includes information given orally and any document, electronic file or any other way of representing or recording information which contains or is derived or copied from such information but excludes:
(i)information that:
(A)is or becomes public information other than as a direct or indirect result of any breach by that Finance Party of Clause 39.1 (Confidentiality); or
(B)is identified in writing at the time of delivery as non-confidential by any member of the Group or any of its advisers; or
(C)is known by that Finance Party before the date the information is disclosed to it in accordance with paragraphs (a) or (b) above or is lawfully obtained by that Finance Party after that date, from a source which is, as far as that Finance Party is aware, unconnected with the Group and which, in either case, as far as that Finance Party is aware, has not been obtained in breach of, and is not otherwise subject to, any obligation of confidentiality; and
(ii)any Funding Rate [or Reference Bank Quotation].
"Confidentiality Undertaking" means a confidentiality undertaking substantially in a recommended form of the LMA as set out in Schedule 10 ([LMA Form of Confidentiality Undertaking]) or in any other form agreed between the Borrower and the Agent.
"Consultant" means:
(a)[the Architect;
(b)the Employer's Agent;
(c)the Mechanical and Electrical Engineer;
(d)the Quantity Surveyor;
(e)the Structural Engineer;][19]
(f)[ ]; or
(g)any other consultant [with a design responsibility][20] in respect of the Development appointed by the Borrower [or the Contractor][21] in accordance with this Agreement.
"Consultant Appointment" means an agreement for the appointment of a Consultant by the Borrower [or the Contractor][22].
"Contingency" means the amount provided for Contingency in the Budgeted Costs to the extent not allocated to any item of costs and expenses in accordance with Clause 23.6 (Development costs).
"Contractor" means [ ] or any other [building contractor/trade or building contractor] appointed by the Borrower in respect of the Development in accordance with this Agreement.
"Cost Overrun" means, at any time, the [aggregate of:
(a)the] amount by which [any item of/the aggregate][23] costs and expenses (other than Contingency) comprised within the Projected Costs exceeds the Budgeted Costs [for that item] at that time[; and
(b)the amount by which [any items of] funding comprised within the Budgeted Costs exceeds the latest estimate by the Agent of the amount of that funding that will be received by the Borrower during the relevant period referred to in the Budgeted Costs].[24]
["Cost Saving" means, at any time, the amount by which the Majority Lenders are satisfied that any item of costs and expenses comprised within the Projected Costs is less than the Budgeted Costs for that item at that time.][25]
"CTA" means the Corporation Tax Act 2009.
"Default" means an Event of Default or any event or circumstance specified in Clause25 (Events of Default) which would (with the expiry of a grace period, the giving of notice, the making of any determination under the Finance Documents or any combination of any of the foregoing) be an Event of Default.
"Delegate" means any delegate, agent, attorney or co-trustee appointed by the Security Agent.
"Deposit Account" means the account designated as such under Clause 17.1 (Designation of Accounts) and includes any replacement of that account.
"Development" means the [demolition of the existing buildings on the Property, the clearance of the Property site and the construction on the Property of [ ], as described in the Specifications.]
"Development Consent" means any Authorisation (including any planning permission, approval of all reserved matters and confirmation of satisfaction of all conditions precedent to the commencement of development) required under any law or regulation in connection with the Development.
"Development Document"[26] means:
(a)[the/a] Building Contract;
(b)a Consultant Appointment;
(c)a Collateral Warranty; or
(d)any other document designated as such by the Agent and the Borrower.
"Development Party"[27] means:
(a)[the/a] Contractor;
(b)a Consultant; or
(c)any other person designated as such by the Agent and the Borrower.
["Disposal Proceeds" means the net disposal proceeds derived from the disposal or proposed disposal of a Unit in accordance with paragraph (c) of Clause 22.4 (Disposals).[28]]
["Disposals Account" means the account designated as such under Clause 17.1 (Designation of Accounts) and includes any replacement of that account.]
"Disruption Event" means either or both of:
(a)a material disruption to those payment or communications systems or to those financial markets which are, in each case, required to operate in order for payments to be made in connection with the Facility (or otherwise in order for the transactions contemplated by the Finance Documents to be carried out) which disruption is not caused by, and is beyond the control of, any of the Parties; or
(b)the occurrence of any other event which results in a disruption (of a technical or systems-related nature) to the treasury or payments operations of a Party preventing that, or any other Party:
(i)from performing its payment obligations under the Finance Documents; or
(ii)from communicating with other Parties in accordance with the terms of the Finance Documents,
and which (in either such case) is not caused by, and is beyond the control of, the Party whose operations are disrupted.
"Duty of Care Agreement" means a duty of care agreement entered into or to be entered into by a Managing Agent, one or more Obligors and the Security Agent in an agreed form.
["Employer's Agent" means [] or any other employer's agent appointed by the Borrower in accordance with this Agreement.]
"Environment" means humans, animals, plants and all other living organisms including the ecological systems of which they form part and the following media:
(a)air (including, without limitation, air within natural or man-made structures, whether above or below ground);
(b)water (including, without limitation, territorial, coastal and inland waters, water under or within land and water in drains and sewers); and
(c)land (including, without limitation, land under water).
"Environmental Claim" means any claim, proceeding, formal notice or investigation by any person in respect of any Environmental Law.
"Environmental Law" means any applicable law or regulation which relates to:
(a)the pollution or protection of the Environment;
(b)the conditions of the workplace; or
(c)the generation, handling, storage, use, release or spillage of any substance which, alone or in combination with any other, is capable of causing harm to the Environment, including, without limitation, any waste.
"Environmental Permits" means any permit and other Authorisation and the filing of any notification, report or assessment required under any Environmental Law for the operation of the business of any Obligor conducted on or from the properties owned or used by any Obligor.
["EURIBOR" means, in relation to any Loan:
(a)the applicable Screen Rate as of the Specified Time for euro and for a period equal in length to the Interest Period of that Loan; or
(b)as otherwise determined pursuant to Clause10.1 ([Unavailability of Screen Rate)[,
and if, in either case, that rate is less than zero, EURIBOR shall be deemed to be zero].][29]
"Event of Default" means any event or circumstance specified as such in Clause25 (Events of Default).
"Excluded Recovery Proceeds" means any proceeds of a Recovery Claim which the Borrower notifies the Agent are, or are to be, applied:
(a)to satisfy (or reimburse an Obligor which has discharged) any liability, charge or claim upon an Obligor by a person which is not an Obligor or an Affiliate of an Obligor; or
(b)in the replacement, reinstatement and/or repair of assets of an Obligor which have been lost, destroyed or damaged,
in each case as a result of the events or circumstances giving rise to that Recovery Claim, if those proceeds are so applied as soon as possible (but in any event within [] days, or such longer period as the Majority Lenders may agree) after receipt.
"Facility" means the term loan facility made available under this Agreement as described in Clause 2 (The Facility).
"Facility Office" means the office or offices notified by a Lender to the Agent in writing on or before the date it becomes a Lender (or, following that date, by not less than five Business Days' written notice) as the office or offices through which it will perform its obligations under this Agreement.
["Fallback Interest Period" means [][30]/[the period specified as such in Schedule 14 ([Benchmark])][31].]
"FATCA" means:
(a)sections 1471 to 1474 of the Code or any associated regulations;
(b)any treaty, law or regulation of any other jurisdiction, or relating to an intergovernmental agreement between the US and any other jurisdiction, which (in either case) facilitates the implementation of any law or regulation referred to in paragraph (a) above; or