Credit Agreement, dated May 12, 2021, by and among the Company, Universal Technical Institute of Arizona, LLC and Fifth Third Bank, National Association
This CREDIT AGREEMENT (the Agreement) is entered into as of May 12, 2021 (the Effective Date), by and among UNIVERSAL TECHNICAL INSTITUTE, INC., a Delaware corporation (UTI), UNIVERSAL TECHNICAL INSTITUTE OF ARIZONA LLC, a Delaware limited liability company (UTI AZ, and, individually and collectively with UTI, hereinafter, the Borrower), and FIFTH THIRD BANK, NATIONAL ASSOCIATION, a federally chartered institution (Lender).
Section 1 Definitions. Certain capitalized terms have the meanings set forth on Exhibit A attached hereto.
Section 2 Term Loan.
2.1 Term Loan.
(a) Subject to the terms and conditions hereof and in reliance upon the representations and warranties contained herein, Lender agrees to make a Loan Advance to Borrower on the Effective Date in a maximum principal amount not to exceed $31,150,000.00 (the Term Loan). Lenders commitment to make the Term Loan shall expire at 2:00 p.m. U.S. Eastern Standard Time on the Effective Date.
(b) Borrower shall execute and deliver to Lender a promissory note in the principal amount of the Term Loan (the Term Note) and bearing interest at such rate, and payable upon such terms, as specified in Sections 2.1, 2.2 and 2.3 of this Agreement, and in the Term Note.
(c) Amounts borrowed under the Term Loan and repaid or prepaid may not be reborrowed.
(d) The proceeds of the Term Loan will be used by Borrower for general working capital of Borrower and for such other business or commercial purposes.
(e) Notwithstanding any provision to the contrary, whether herein or in the other Loan Documents, the entire unpaid balance of the Term Loan, plus all accrued and unpaid interest, and any other charges, advances and fees, if any, outstanding shall be due and payable in full on the Termination Date.
(a) The Loans and the Notes will automatically bear interest at a floating rate per annum equal to the One Month LIBOR Rate plus the Applicable Margin. As used herein, One Month LIBOR Rate means, as of any date of determination, the rate of interest fixed by the ICE Benchmark Administration at 11:00 a.m., London, England time, relating to quotations for the one month London InterBank Offered Rate on U.S. Dollar deposits as published on Bloomberg LP. The One Month LIBOR Rate shall be reset on the first Business Day of each calendar month by Lender based on the One Month LIBOR Rate then in effect.
(b) Any adjustment in the applied interest rate resulting from a change in the One Month LIBOR Rate, or any successor or alternative index rate utilized by Lender to fund or maintain its funding of all or any portion of the Loans hereunder, including without limitation, the Prime Rate (an Alternate Rate), as applicable, shall become effective as of the opening of business on the date of each change (or if not a Business Day, the beginning of the next Business Day). Lender shall not be required to notify Borrower of any adjustment in the One Month LIBOR Rate; however, Borrower may request a quote of the prevailing One Month LIBOR Rate on any Business Day. Interest accruing based on the One Month LIBOR Rate or Alternate Rate shall be: (i) calculated based on a 360-day year and charged for the actual number of days elapsed and (ii) payable in arrears on the first day of each calendar month, commencing on June 1, 2021. Notwithstanding anything to the contrary contained herein, if the One Month LIBOR Rate or an applied Alternate Rate, as applicable, shall be less than zero percent (0.00%), such rate shall be deemed to be zero percent (0.00%) for the purposes of this Agreement.
2.3 Benchmark Replacement Setting.
(a) Benchmark Replacement. Notwithstanding anything to the contrary herein or in any other Loan Document (and any Rate Management Agreement shall be deemed not to be a Loan Document for purposes of this Section titled Benchmark Replacement Setting), if a Benchmark Transition Event or an Early Opt-in Election, as applicable, and its related Benchmark Replacement Date have occurred prior to the Reference Time in respect of any setting of the then-current Benchmark, then (x) if a Benchmark Replacement is determined in accordance with clause (1) or (2) of the definition of Benchmark Replacement for such Benchmark Replacement Date, such Benchmark Replacement will replace such Benchmark for all purposes hereunder and under any Loan Document in respect of such Benchmark setting and subsequent Benchmark settings without any amendment to, or further action
or consent of any other party to, this Agreement or any other Loan Document and (y) if a Benchmark Replacement is determined in accordance with clause (3) of the definition of Benchmark Replacement for such Benchmark Replacement Date, or in connection with an Early Opt-in Election, or if the Lender selects Daily Compounded SOFR as provided in the definition of Benchmark Replacement, such Benchmark Replacement will replace such Benchmark for all purposes hereunder and under any Loan Document in respect of any Benchmark setting at or after 5:00 p.m. (New York City time) on the fifth (5th) Business Day after the date notice of such Benchmark Replacement is provided to the Borrower without any amendment to this Agreement or any other Loan Document, or further action or consent of the Borrower.
(b) Benchmark Replacement Conforming Changes. In connection with the implementation of a Benchmark Replacement, the Lender will have the right to make Benchmark Replacement Conforming Changes from time to time and, notwithstanding anything to the contrary herein or in any other Loan Document, any amendments implementing such Benchmark Replacement Conforming Changes will become effective without any further action or consent of any other party to this Agreement or any other Loan Document.
(c) Notices; Standards for Decisions and Determinations. The Lender will promptly notify the Borrower of (i) any occurrence of a Benchmark Transition Event or an Early Opt-in Election, as applicable, and its related Benchmark Replacement Date, (ii) the implementation of any Benchmark Replacement, (iii) the effectiveness of any Benchmark Replacement Conforming Changes, (iv) the removal or reinstatement of any tenor of a Benchmark pursuant to clause (d) below and (v) the commencement or conclusion of any Benchmark Unavailability Period. Any determination, decision or election that may be made by the Lender pursuant to this Section titled Benchmark Replacement Setting, including any determination with respect to a tenor, rate or adjustment or of the occurrence or non-occurrence of an event, circumstance or date and any decision to take or refrain from taking any action or any selection, will be conclusive and binding absent manifest error and may be made in its sole discretion and without consent from any other party to this Agreement or any other Loan Document, except, in each case, as expressly required pursuant to this Section titled Benchmark Replacement Setting.
(d) Unavailability of Tenor of Benchmark. Notwithstanding anything to the contrary herein or in any other Loan Document, at any time (including in connection with the implementation of a Benchmark Replacement), (i) if the then-current Benchmark is a term rate (including Term SOFR or USD LIBOR) and either (A) any tenor for such Benchmark is not displayed on a screen or other information service that publishes such rate from time to time as selected by the Lender in its reasonable discretion or (B) the regulatory supervisor for the administrator of such Benchmark has provided a public statement or publication of information announcing that any tenor for such Benchmark is or will be no longer representative, then the Lender may modify the definition of Interest Period for any Benchmark settings at or after such time to remove such unavailable or non-representative tenor and (ii) if a tenor that was removed pursuant to clause (i) above either (A) is subsequently displayed on a screen or information service for a Benchmark (including a Benchmark Replacement) or (B) is not, or is no longer, subject to an announcement that it is or will no longer be representative for a Benchmark (including a Benchmark Replacement), then the Lender may modify the definition of Interest Period for all Benchmark settings at or after such time to reinstate such previously removed tenor.
(e) Benchmark Unavailability Period. Upon the Borrowers receipt of notice of the commencement of a Benchmark Unavailability Period, the Borrower may revoke any request for a One Month LIBOR Rate Loan, a conversion to or continuation of One Month LIBOR Rate Loan to be made, converted or continued during any Benchmark Unavailability Period and, failing that, the Borrower will be deemed to have converted any such request into a request for a Borrowing of or conversion to Loans at the Alternate Rate. During any Benchmark Unavailability Period or at any time that a tenor for the then-current Benchmark is not an Available Tenor, the component of the Alternate Rate based upon the then-current Benchmark or such tenor for such Benchmark, as applicable, will not be used in any determination of the Alternate Rate.
(f) Certain Defined Terms. As used in this Section titled Benchmark Replacement Setting:
Available Tenor means, as of any date of determination and with respect to the then-current Benchmark, as applicable, any tenor for such Benchmark or payment period for interest calculated with reference to such Benchmark, as applicable, that is or may be used for determining the length of an Interest Period pursuant to this Agreement as of such date and not including, for the avoidance of doubt, any tenor for such Benchmark that is then-removed from the definition of Interest Period pursuant to clause (d) of this Section titled Benchmark Replacement Setting.
Benchmark means, initially, USD LIBOR; provided that if a Benchmark Transition Event or an Early Opt-in Election, as applicable, and its related Benchmark Replacement Date have occurred with respect to USD LIBOR or the then-current Benchmark, then Benchmark means the applicable Benchmark Replacement to the extent that such Benchmark Replacement has replaced such prior benchmark rate pursuant to clause (a) of this Section titled Benchmark Replacement Setting.
Benchmark Replacement means, for any Available Tenor, the first alternative set forth in the order below that can be determined by the Lender for the applicable Benchmark Replacement Date:
(1) the sum of: (a) Term SOFR and (b) the related Benchmark Replacement Adjustment;
(2) the sum of: (a) Daily Simple SOFR and (b) the related Benchmark Replacement Adjustment;
(3) the sum of: (a) the alternate benchmark rate that has been selected by the Lender as the replacement for the then-current Benchmark for the applicable Corresponding Tenor giving due consideration to (i) any selection or recommendation of a replacement benchmark rate or the mechanism for determining such a rate by the Relevant Governmental Body or (ii) any evolving or then-prevailing market convention for determining a benchmark rate as a replacement for the then-current Benchmark for U.S. dollar-denominated syndicated or bilateral credit facilities at such time and (b) the related Benchmark Replacement Adjustment;
provided that, in the case of clause (1), such Unadjusted Benchmark Replacement is displayed on a screen or other information service that publishes such rate from time to time as selected by the Lender in its reasonable discretion. Notwithstanding anything to the contrary in this Agreement or any other Loan Document, if at the time of a Benchmark Replacement Date applicable to a Benchmark Transition Event or Early Opt-In Election, the Borrower has a Rate Management Agreement in effect with respect to all or part of the Loan, in order to more closely align the floating interest rate under the Loan with the floating rate option under the Rate Management Agreement, and giving due consideration to evolving standards and market practice, the Lender may, in its discretion, replace the Benchmark Replacement that would otherwise be selected pursuant to this definition of Benchmark Replacement with the sum of: (a) Daily Compounded SOFR and (b) the related Benchmark Replacement Adjustment. If Daily Compounded SOFR is selected for the Benchmark Replacement, Lender shall provide written notice of this election to the Borrower.
If the Benchmark Replacement as determined pursuant to this definition would be less than the Floor, the Benchmark Replacement will be deemed to be the Floor for the purposes of this Agreement and the other Loan Documents.
Benchmark Replacement Adjustment means, with respect to any replacement of the then-current Benchmark with an Unadjusted Benchmark Replacement for any applicable Interest Period and Available Tenor for any setting of such Unadjusted Benchmark Replacement:
(1) for purposes of clauses (1) and (2) of the definition of Benchmark Replacement, the first alternative set forth in the order below that can be determined by the Lender: (a) the spread adjustment, or method for calculating or determining such spread adjustment, (which may be a positive or negative value or zero) as of the Reference Time such Benchmark Replacement is first set for such Interest Period that has been selected or recommended by the Relevant Governmental Body for the replacement of such Benchmark with the applicable Unadjusted Benchmark Replacement for the applicable Corresponding Tenor; (b) the spread adjustment (which may be a positive or negative value or zero) as of the Reference Time such Benchmark Replacement is first set for such Interest Period that would apply to the fallback rate for a derivative transaction referencing the ISDA Definitions to be effective upon an index cessation event with respect to such Benchmark for the applicable Corresponding Tenor;
(2) for purposes of clause (3) of the definition of Benchmark Replacement, the spread adjustment, or method for calculating or determining such spread adjustment, (which may be a positive or negative value or zero) that has been selected by the Lender for the applicable Corresponding Tenor giving due consideration to (i) any selection or recommendation of a spread adjustment, or method for calculating or determining such spread adjustment, for the replacement of such Benchmark with the applicable Unadjusted Benchmark Replacement by the Relevant Governmental Body on the applicable Benchmark Replacement Date or (ii) any evolving or then-prevailing market convention for determining a spread adjustment, or method for calculating or determining such spread adjustment, for the replacement of such Benchmark with the applicable Unadjusted Benchmark Replacement for U.S. dollar-denominated syndicated or bilateral credit facilities; and
(3) if Daily Compounded SOFR is selected (as provided in the definition of Benchmark Replacement), the Lender may also select the Benchmark Replacement Adjustment in clause 1(b) above in lieu of the Benchmark Replacement Adjustment in clause 1(a) above.
provided that, in the case of clause (1) above, such adjustment is displayed on a screen or other information service that publishes such Benchmark Replacement Adjustment from time to time as selected by the Lender in its reasonable discretion.
Benchmark Replacement Conforming Changes means, with respect to any Benchmark Replacement, any technical, administrative or operational changes (including changes to the definition of ABR, the definition of Business Day, the definition of Interest Period, timing and frequency of determining rates and making payments of interest, timing of borrowing requests or prepayment, conversion or continuation notices, length of lookback periods, the applicability of
breakage provisions, and other technical, administrative or operational matters) that the Lender decides may be appropriate to reflect the adoption and implementation of such Benchmark Replacement and to permit the administration thereof by the Lender in a manner substantially consistent with market practice (or, if the Lender decides that adoption of any portion of such market practice is not administratively feasible or if the Lender determines that no market practice for the administration of such Benchmark Replacement exists, in such other manner of administration as the Lender decides is reasonably necessary in connection with the administration of this Agreement and the other Loan Documents).
Benchmark Replacement Date means the earliest to occur of the following events with respect to the then-current Benchmark:
(1) in the case of clause (1) or (2) of the definition of Benchmark Transition Event, the later of (a) the date of the public statement or publication of information referenced therein and (b) the date on which the administrator of such Benchmark (or the published component used in the calculation thereof) permanently or indefinitely ceases to provide all Available Tenors of such Benchmark (or such component thereof);
(2) in the case of clause (3) of the definition of Benchmark Transition Event, the date of the public statement or publication of information referenced therein; or
(3) in the case of an Early Opt-in Election, the sixth (6th) Business Day after the date notice of such Early Opt-in Election is provided to the Borrower, so long as the Lender has not received, by 5:00 p.m. (New York City time) on the fifth (5th) Business Day after the date notice of such Early Opt-in Election or is provided to the Borrower, written notice of objection to such Early Opt-in Election or from Borrower.
For the avoidance of doubt, (i) if the event giving rise to the Benchmark Replacement Date occurs on the same day as, but earlier than, the Reference Time in respect of any determination, the Benchmark Replacement Date will be deemed to have occurred prior to the Reference Time for such determination and (ii) the Benchmark Replacement Date will be deemed to have occurred in the case of clause (1) or (2) with respect to any Benchmark upon the occurrence of the applicable event or events set forth therein with respect to all then-current Available Tenors of such Benchmark (or the published component used in the calculation thereof).
Benchmark Transition Event means the occurrence of one or more of the following events with respect to the then-current Benchmark:
(1) a public statement or publication of information by or on behalf of the administrator of such Benchmark (or the published component used in the calculation thereof) announcing that such administrator has ceased or will cease to provide all Available Tenors of such Benchmark (or such component thereof), permanently or indefinitely, provided that, at the time of such statement or publication, there is no successor administrator that will continue to provide any Available Tenor of such Benchmark (or such component thereof);
(2) a public statement or publication of information by the regulatory supervisor for the administrator of such Benchmark (or the published component used in the calculation thereof), the Board of Governors of the Federal Reserve System, the Federal Reserve Bank of New York, an insolvency official with jurisdiction over the administrator for such Benchmark (or such component), a resolution authority with jurisdiction over the administrator for such Benchmark (or such component) or a court or an entity with similar insolvency or resolution authority over the administrator for such Benchmark (or such component), which states that the administrator of such Benchmark (or such component) has ceased or will cease to provide all Available Tenors of such Benchmark (or such component thereof) permanently or indefinitely, provided that, at the time of such statement or publication, there is no successor administrator that will continue to provide any Available Tenor of such Benchmark (or such component thereof); or
(3) a public statement or publication of information by the regulatory supervisor for the administrator of such Benchmark (or the published component used in the calculation thereof) announcing that all Available Tenors of such Benchmark (or such component thereof) are no longer representative.
For the avoidance of doubt, a Benchmark Transition Event will be deemed to have occurred with respect to any Benchmark if a public statement or publication of information set forth above has occurred with respect to each then-current Available Tenor of such Benchmark (or the published component used in the calculation thereof).
Benchmark Unavailability Period means the period (if any) (x) beginning at the time that a Benchmark Replacement Date pursuant to clauses (1) or (2) of that definition has occurred if, at such time, no Benchmark Replacement has replaced the then-current Benchmark for all purposes hereunder and under any Loan Document in accordance with this Section titled Benchmark Replacement Setting and (y) ending at the time that a Benchmark Replacement has replaced the then-current Benchmark for all purposes hereunder and under any Loan Document in accordance with this Section titled Benchmark Replacement Setting.
Corresponding Tenor with respect to any Available Tenor means, as applicable, either a tenor (including overnight) or an interest payment period having approximately the same length (disregarding business day adjustment) as such Available Tenor.
Daily Compounded SOFR means, for any day, SOFR, with interest accruing on a compounded daily basis, with the methodology and conventions for this rate (which may include compounding in arrears with a lookback or observation shift) being established by the Lender in accordance with a methodology and the conventions for this rate selected or recommended (x) by the Relevant Governmental Body for determining Daily Compounded SOFR for business loans or (y) by reference to the ISDA Definitions for derivatives comparable to any applicable Rate Management Agreement; provided, that if the Lender decides that any such convention is not administratively feasible for the Lender, then the Lender may establish another convention in its reasonable discretion.
Daily Simple SOFR means, for any day, SOFR, with the conventions for this rate (which will include a lookback) being established by the Lender in accordance with the conventions for this rate selected or recommended by the Relevant Governmental Body for determining Daily Simple SOFR for business loans; provided, that if the Lender decides that any such convention is not administratively feasible for the Lender, then the Lender may establish another convention in its reasonable discretion.
Early Opt-in Election means, if the then-current Benchmark is USD LIBOR, the occurrence of:
(1) a determination by the Lender that at least five currently outstanding U.S. dollar-denominated syndicated or bilateral credit facilities at such time contain (as a result of amendment or as originally executed) a SOFR-based rate (including SOFR, a term SOFR or any other rate based upon SOFR) as a benchmark rate (and such credit facilities are identified in such notice and are publicly available for review), and
(2) the election by the Lender to trigger a fallback from USD LIBOR and the provision by the Lender of written notice of such election to the Borrower.
Floor means the benchmark rate floor, if any, provided in this Agreement initially (as of the execution of this Agreement, the modification, amendment or renewal of this Agreement or otherwise) with respect to USD LIBOR.
ISDA Definitions means the 2006 ISDA Definitions published by the International Swaps and Derivatives Association, Inc. or any successor thereto, as amended or supplemented from time to time, or any successor definitional booklet for interest rate derivatives published from time to time by the International Swaps and Derivatives Association, Inc. or such successor thereto.
Reference Time with respect to any setting of the then-current Benchmark means (1) if such Benchmark is USD LIBOR, 11:00 a.m. (London time) on the day that is two London banking days preceding the date of such setting, and (2) if such Benchmark is not USD LIBOR, the time determined by the Lender in its reasonable discretion.
Relevant Governmental Body means the Board of Governors of the Federal Reserve System or the Federal Reserve Bank of New York, or a committee officially endorsed or convened by the Board of Governors of the Federal Reserve System or the Federal Reserve Bank of New York, or any successor thereto.
SOFR means, with respect to any Business Day, a rate per annum equal to the secured overnight financing rate for such Business Day published by the SOFR Administrator on the SOFR Administrators Website on the immediately succeeding Business Day.
SOFR Administrator means the Federal Reserve Bank of New York (or a successor administrator of the secured overnight financing rate).
SOFR Administrators Website means the website of the Federal Reserve Bank of New York, currently at http://www.newyorkfed.org, or any successor source for the secured overnight financing rate identified as such by the SOFR Administrator from time to time.
Term SOFR means, for the applicable Corresponding Tenor as of the applicable Reference Time, the forward-looking term rate based on SOFR that has been selected or recommended by the Relevant Governmental Body.
Unadjusted Benchmark Replacement means the applicable Benchmark Replacement excluding the related Benchmark Replacement Adjustment.
USD LIBOR means the London interbank offered rate for U.S. dollars.
(g) Necessity for Benchmark Replacement and Limitation of Liability. The interest rate on the Loans is determined by reference to the One Month LIBOR Rate from time to time, which is derived from the London interbank offered rate. The One Month LIBOR Rate is intended to represent the rate at which contributing banks may obtain short-term borrowings from each other in the London interbank market. In July 2017, the U.K. Financial Conduct Authority announced that, after the end of 2021, it would no longer compel contributing banks to make rate submissions for purposes of setting the One Month LIBOR Rate. As a result, it is possible that commencing in 2022 (or earlier), the One Month LIBOR Rate may no longer be available or may no longer be deemed a reliable rate. Upon the occurrence of a Benchmark Transition Event or a Term SOFR Transition Event, the Lender will notify the Borrower of any change to the reference rate upon which the interest rate is based. However, the Lender does not warrant or accept any responsibility for, and shall not have any liability with respect to, the administration, submission, or any other matter related to the One Month LIBOR Rate or any alternative, successor, or replacement rate, including, without limitation, the implementation of any Benchmark Replacement or any Benchmark Replacement Conforming Changes or whether the composition or characteristics of any alternative, successor or replacement reference rate will be similar to, or produce the same value or economic equivalence of, the One Month LIBOR Rate or have the same volume or liquidity as did the One Month LIBOR Rate prior to its discontinuance or unavailability.
(g) Borrower hereby agrees to reimburse and indemnify Lender from all reasonable and documented increased costs or fees incurred by Lender subsequent to the date hereof relating to the offering of rates of interest based upon the One Month LIBOR Rate, any Alternate Rate, or the Benchmark Replacement utilized by Lender, but only for so long as Lender continues to regularly charge commercial borrowers for the same.
2.4 Payments; Late Payments.
(a) The principal amount of the Term Note will be payable in eighty-four (84) monthly installments of principal, plus accrued interest, which will be due beginning on June 1, 2021 and continuing on the first day of each calendar month thereafter. The eighty-four (84) monthly installments of principal will be in such amounts as set forth on Schedule I attached hereto, plus accrued interest, and the eighty-fifth (85th) and final installment will be in the amount of the entire unpaid balance of the Term Loan, plus all accrued and unpaid interest, and any other charges, advances and fees, if any, outstanding under the Term Loan. Notwithstanding anything herein to the contrary, the outstanding principal plus accrued and unpaid interest will be due and payable on the Termination Date.
(b) All payments by Borrower under this Agreement and the Notes will be in lawful money of the United States of America, and, unless otherwise provided in this Agreement or instructed by Lender in writing from time to time, Borrower will make all payments required under this Agreement, the Notes and under any of the other Loan Documents in immediately available funds to an account designated by Lender from time to time.
(c) Borrower shall make all payments of principal, interest and all other Obligations no later than 3:00 p.m. U.S. Eastern Standard Time, on the day such payments are due. For purposes of computing interest and fees as of any date, all payments shall be deemed received on the Business Day on which immediately available funds therefor are received by Lender prior to 3:00 p.m. Cincinnati, Ohio time. Payments received by Lender after 2:00 p.m. Cincinnati, Ohio time on any Business Day or on a day that is not a Business Day shall be deemed to have been received on the following Business Day. In the event any payment becomes due and payable on a date which is not a good Business Day, such payment shall become due and payable on the next successive Business Day.
(d) Borrower agrees that, with regard to late payments: (i) Borrower shall pay to Lender a late payment fee equal to three percent (3%) of any payment of principal not paid when due (whether by maturity, acceleration or otherwise), and (ii) any portion of the Obligation not paid when due (whether by maturity, acceleration or otherwise) shall bear interest thereafter until paid at the Default Rate; provided that this Section 2.3(d) shall not be deemed to constitute a waiver of any Event of Default or an agreement by Lender to permit any late payments whatsoever. Borrower acknowledges that late payment to Lender of any sums due hereunder or the Notes will cause Lender to incur costs not contemplated hereunder or the other Loan Documents, the exact amount of which will be impracticable or extremely difficult to ascertain. Such costs include, but are not limited to, processing and accounting charges. Borrower and Lender agree that the late payment fee represents a fair and reasonable estimate of the costs Lender will incur by reason of late payment.
(e) Default Rate means three percent (3%) in excess of the interest rate otherwise in effect under amounts outstanding under such Note. In no event shall the interest rate accruing under such Note be increased to be in excess of the maximum interest rate permitted by applicable state or federal usury laws then in effect.
(a) Optional. Borrower may prepay any portion of the Loans in whole or in part at any time without premium or penalty; provided that if Borrower makes any such prepayment in respect of the Term Loan other than on a regularly scheduled payment date, Borrower (a) with such prepayment, shall pay all accrued interest on the principal amount prepaid (unless less than all of the principal amount of the Term Note is being prepaid, in which case such interest shall be due and payable on the next scheduled interest payment date), and (b) shall promptly reimburse Lender and hold Lender harmless solely as may be required under the Rate Management Agreement and subject to the terms therein. Lenders reasonable determination of the amount of such reimbursement shall be conclusive in the absence of manifest error.
(b) Required. If, pursuant to Sections 4.22, 4.23 or 4.24, Borrower is not in compliance with the requisite Funded Indebtedness to Consolidated EBITDA, Loan to Value, or Debt Service Coverage Ratio requirements on the dates of determination as further set forth in this Agreement and borrower elects to cure, Borrower shall promptly, within the timeframes set forth below in Section 5.1(m), (i) pay down the Term Loan to Lender in immediately available funds in an amount as may be necessary to cure any such breach, or (ii) provide the Resizing Amount in accordance with the terms of this Agreement. If Borrower has delivered to Lender a Resizing Amount pursuant to Section 5.1(m) hereof, and subsequently provides written confirmation to Lender of compliance with the Funded Indebtedness to Consolidated EBITDA, Debt Service Coverage Ratio or Loan to Value covenant set forth below in Sections 4.22, 4.23 or 4.24, then so long as no Event of Default then exists as of the date Borrower demonstrates such compliance, Lender will return the Resizing Amount (whether cash or a letter of credit)(along with any interest actually earned on such Resizing Amount collateral) to Borrower.
2.6 One General Obligation. All advances of credit to, or for the benefit of, Borrower under this Agreement and under any other Loan Document constitute one loan, and all of the Obligations constitute one obligation. The Loans and all other advances or extensions of credit to, or for the benefit of, Borrower under this Agreement or the other Loan Documents and all other Obligations are made on the security of the Mortgage.
Section 3 Representations and Warranties.
Borrower hereby warrants and represents to Lender the following as of the date hereof:
3.1 Organization and Qualification. Borrower is a limited liability company or corporation duly organized, validly existing and in good standing under the laws of the State of Delaware, has the power and authority to carry on its business and to enter into and perform this Agreement and the other Loan Documents, and is qualified and licensed to do business in each jurisdiction in which the failure to be so qualified and in good standing could reasonably be expected to have a Material Adverse Effect.
3.2 Due Authorization. The execution, delivery and performance by Borrower of this Agreement and the other Loan Documents has been duly authorized by all necessary action, and shall not contravene any law or any governmental rule or order binding on Borrower, or the articles of organization, articles of incorporation, operating agreement, bylaws, or other governing instruments of Borrower, nor, to Borrowers knowledge, violate any agreement or instrument by which Borrower is bound nor result in the creation of a lien on any assets of Borrower except the lien granted to Lender. Borrower has duly executed and delivered to Lender this Agreement and the other Loan Documents and they are valid and binding obligations of Borrower enforceable against it according to their respective terms, except as limited by equitable principles and by bankruptcy, insolvency or similar laws affecting the rights of creditors generally.
3.3 Litigation. There are no suits or proceedings pending or, to Borrowers knowledge without investigation, threatened against or affecting Borrower or the Property which would reasonably be expected to result in a Material Adverse Effect, and no proceedings before any governmental body are pending or, to the knowledge of Borrower without investigation, threatened against Borrower or the Property which would reasonably be expected to result in a Material Adverse Effect.
3.4 Utilities; Authorities. All utilities necessary for the use, operation and occupancy of the Property (including, without limitation, water, storm sewer, sanitary sewer and drainage, electric, gas and telephone facilities) are available at the boundaries of the Real Property (or in the streets adjoining the Real Property), and all requirements for the use of such utilities have been fulfilled. To Borrowers knowledge, all building, zoning, safety, disabled persons, health, fire, water district, sewerage and environmental protection agency permits and other licenses and permits which are required by any governmental authority for the use, occupancy and operation of the Property have been obtained by or furnished to Borrower and are in full force and effect.
3.5 Laws and Taxes. To Borrowers knowledge without investigation, Borrower is in material compliance with all laws, regulations, rulings, orders, injunctions, decrees, conditions or other requirements applicable to or imposed upon Borrower by any law or by any governmental authority, court or agency, the failure of which would reasonably be expected to result in a Material Adverse Effect. Borrower has filed all required tax returns and reports (or filed appropriate extensions therefore) that are now required to be filed by it in connection with any federal, state and local tax, duty or charge levied, assessed or imposed upon Borrower or its assets, including unemployment, social security, and real estate taxes, the failure of which would reasonably be expected to result in a Material Adverse Effect. Borrower has paid all taxes which are now due and payable on the Property. To Borrowers actual knowledge, no taxing authority has asserted or assessed any additional tax liabilities against Borrower which are outstanding on this date which would reasonably be expected to result in a Material Adverse Effect..
3.6 Financial Condition. All financial statements relating to Borrower or the Property which have been delivered to Lender are, to Borrowers knowledge, true and correct in all material respects as of the date of such reports and have been prepared in accordance with generally accepted accounting principles consistently applied, or such other form as requested in accordance with Section 4.4 hereof. Borrower has no material obligations or liabilities of any kind that are known to Borrower and which are reasonably likely to have a Material Adverse Effect that are not disclosed in those financial statements, and, to Borrowers knowledge, there has been no change resulting in a Material Adverse Effect in the financial condition of Borrower nor has Borrower suffered any damage, destruction or loss which has had a Material Adverse Effect since the submission of the most recent financial information to Lender.
3.7 No Defects. To Borrowers knowledge, there are no defects in the design or construction of the Property which would have a Material Adverse Effect.
3.8 Defaults. To Borrowers actual knowledge, Borrower is not in breach of any material agreement applicable to it or the Property which would reasonably be expected to result in a Material Adverse Effect, and there does not now exist any material default or violation by Borrower of or under any of the terms, conditions or obligations of its articles of organization, articles of incorporation, operating agreement, bylaws, or other governing instruments.
3.9 Environmental Laws. Except as previously disclosed in the Environmental Report and except as disclosed and agreed to in the Indemnity, Borrower has no actual knowledge of the presence on, under or about the Property, now or in the past, of any Hazardous Substances, or of the transportation to or from the Property of any Hazardous Substances.
3.10 Margin Stock. No part of the Loans shall be used to purchase or carry, or to reduce or retire or refinance any credit incurred to purchase or carry, any margin stock (within the meaning of Regulations U and X of the Board of Governors of the Federal Reserve System) or to extend credit to others for the purpose of purchasing or carrying any margin stock. If requested by Lender, Borrower shall furnish to Lender statements in conformity with the requirements of Federal Reserve Form U-1.
3.11 Purchase Options. As of the Effective Date, no Person has any outstanding exercisable rights with respect to the purchase or sale of any portion of the Property, including, without limitation, any right of first offer or refusal, or purchase option.
3.12 Full Disclosure. No representation or warranty made by Borrower in this Agreement or any other Loan Document to which it is a party, or in any other document furnished from time to time in connection herewith or therewith knowingly contains or will knowingly contain at the time such representation is made or such document furnished, any untrue statement of a material fact or knowingly omits or will knowingly omit to state any material fact necessary to make the statements herein or therein not misleading.
Section 4 Covenants. Borrower covenants with Lender that, from and after the date of this Agreement until the Obligations are paid and satisfied in full:
4.1 Compliance with Laws. Borrower shall comply or use commercially reasonable efforts to cause compliance in all material respects with all laws, regulations, rulings, orders, injunctions, decrees, conditions or other requirements applicable to or imposed upon Borrower by any law or by any governmental authority, court or agency governing the use and operation of the Property. Reasonable evidence of such compliance shall be submitted to Lender on written request.
4.2 Inspection. Upon reasonable prior written notice, Borrower shall permit inspection of the Property by Lender and any agent or designee of Lender. In addition, upon reasonable prior written or oral notice, Borrower shall permit Lender and/or its agents and designees access to and the right to inspect, audit and copy all books, records, contracts and other documents and information relating to the Property. All such books, records and accounts of operations relating to the Property shall be kept in accordance with sound accounting practices consistently applied. Borrower shall promptly respond to any inquiry from Lender for information with respect to the Property, provided that Borrower shall only be required to provide such requested information that is prepared by Borrower in the ordinary course of Borrowers business; and provided, however, that Lender shall at all times be entitled to rely upon any statements or representations made by Borrower or any agent thereof.
4.3 Mechanics and Similar Liens and Claims Borrower shall not permit any mechanics, labor, materialmans and/or similar lien or stop notice claims to be filed or otherwise asserted against the Property or Lender in respect of the Property, or against any funds due any contractor or subcontractor, and Borrower shall promptly (and in any event within 30 days after Borrower has received notice of such filing) discharge or cause to be discharged (or bond over in accordance with applicable law) the same in case of the filing of any claims for lien or proceedings for the enforcement thereof; provided that in connection with any such lien or claim which Borrower may in good faith desire to contest, Borrower may contest the same by appropriate legal proceedings diligently prosecuted, but only if Borrower shall furnish to and Lender such security or indemnity as Lender requests (and bonding over shall suffice as acceptable security
for Lender). With respect to the matters set forth in this Section 4.3, if Borrower shall (a) fail promptly to discharge or bond over any asserted liens or claims in accordance with the above terms and conditions, or (b) fail promptly to contest asserted liens or claims or to give security or indemnity in the manner provided in this Section 4.3, or (c) having commenced to contest the same, and having given such security or indemnity, fail to prosecute such contest with diligence, or to maintain such indemnity or security so required by Lender for its full amount, or (d) upon adverse conclusion of any such contest, fail promptly to cause any judgment or decree to be satisfied and lien to be released, then Lender may, but shall not be required to, following written notice to Borrower and a reasonable opportunity to cure (which shall be not less than thirty (30) days), procure the release and discharge of any such claim and any judgment or decree thereon and, further, may, in its sole discretion, effect any settlement or compromise of the same if, in the reasonable judgment of Lender, the validity, applicability, or non-payment of such shall place the Property in imminent danger of being sold, forfeited, terminated, canceled or lost, and any amounts so expended by Lender, including premiums paid or security furnished in connection with the issuance of any surety company bonds, shall be deemed to constitute disbursements of the proceeds of the Loans hereunder, shall be payable upon demand and shall bear interest from the date so disbursed until paid at the Default Rate. In settling, compromising or discharging any claims for lien or otherwise as permitted under this Section 4.3, Lender shall not be required to inquire into the validity or amount of any such claim.
4.4 Financial Statements; Compliance Certificates. In addition to any other financial statements required to be delivered to Lender pursuant to the provisions of any of the other Loan Documents, Borrower will or will cause from time to time to be furnished to Lender the following information and reports concerning Borrower and/or the Property:
(a) Within thirty (30) days after filing, a copy of Borrowers 10-K;
(b) Within thirty (30) days after filing, a copy of Borrower 10-Q;
(c) Within sixty (60) days after the end of each fiscal year of Borrower, a projected income statement substantially in the form attached as Exhibit B for the subsequent fiscal year prepared in accordance with generally accepted accounting principles consistently applied.
(d) Within one hundred twenty (120) days of the close of each fiscal year, a compliance certificate in form and substance satisfactory to the Lender demonstrating compliance with Section 4.22 and 4.23 hereof, certified by the Chief Executive Officer, Chief Financial Officer, or General Counsel, or such other responsible officer as may be authorized from time to time by Borrower to deliver or enter into such documentation with Lender.
4.5 Affirmation of Representations and Warranties. Borrower agrees that all representations and warranties of Borrower contained in Section 3 of this Agreement shall remain true in all material respects as of the date they were made until the Loans and all Obligations are repaid and satisfied in full.
4.6 Title. Except for (a) the Mortgage and other security for the Obligations, (b) the lien of general real estate taxes payment of which is not yet due, (c) mechanics, labor, materialmans or other similar liens which are contested in the manner permitted in Section 4.3 above, and (d) any other Permitted Exceptions, Borrower shall keep its fee simple title to the Property free and clear of all liens (other than Permitted Encumbrances), claims and encumbrances, whether senior or junior to or at parity with the Mortgage. Notwithstanding the foregoing, and provided that no Event of Default has occurred and is continuing, Borrower may, without the consent of Lender, grant easements, restrictions, covenants, reservations and rights of way, in the ordinary course of business for one-way or reciprocal access, parking, water and sewer lines, telephone and telegraph lines, electric lines, cellular towers and other utilities, parking and access or for other similar purposes (Permitted Easements), provided that Borrower uses commercially reasonable efforts to provide Lender not less than ten (10) Business Days prior written notice thereof accompanied by the applicable documentation pertaining to such transfer, conveyance or encumbrance, and no such transfer, conveyance or encumbrance shall impose liabilities or obligations on Borrower that would be reasonably likely to have a Material Adverse Effect. In connection with any Permitted Easement, if Borrower requests Lenders consent thereto and provides Lender with a form of the instrument reasonably necessary or appropriate to subordinate the lien of the Security Instrument to such easements, restrictions, covenants, reservations and rights of way or other similar grants, Lender shall not unreasonably withhold its consent and shall execute and deliver such instrument upon receipt by Lender of (a) a copy of the instrument of transfer, (b) an certificate from Borrower certifying that the conditions set forth in subsection (ii) hereof have been satisfied and (c) reimbursement of all Lenders reasonable actual out-of-pocket costs and expenses (including reasonable attorneys fees and expenses) incurred in connection with Lenders review of such action and the documentation related thereto, and the execution and delivery by Lender of the instruments to be delivered by Lender pursuant to this Section 4.6 provided that such instrument does not impose any liability upon Lender.
4.7 Proceedings Affecting Property. If any proceedings are filed seeking to enjoin or otherwise prevent or declare invalid or unlawful the occupancy, use, maintenance or operation of the Property, or any portion thereof, Borrower shall use commercially reasonable efforts to cause such proceedings to be vigorously contested in good faith, and in the event of an adverse ruling or decision, prosecute all commercially reasonable allowable appeals therefrom, and shall, 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 commercially reasonable efforts to bring about a favorable and speedy disposition of all such proceedings. All such proceedings, including without limitation, all of Lenders costs, and fees and disbursements of Lenders counsel in connection with any such proceedings, whether or
not Lender is a party thereto, shall be at Borrowers expense. To the extent that Lender incurs any such expenses, including attorneys fees and fees and charges for court costs, bonds and the like, Borrower shall reimburse Lender for such expenses and the amount due Lender shall bear interest at the rate under the Term Loan from the date so incurred by Lender until repaid to Lender and shall be payable to Lender on demand.
4.8 Disposal and Encumbrance of Property. Except as otherwise expressly provided in the Loan Documents, Borrower shall not suffer, permit or enter into any agreement for any sale, lease, transfer, or in any way encumber or dispose of or grant or suffer any security or other assignment (collateral or otherwise) of or in all or any portion of the Property, except for Permitted Leases (as defined below), Permitted Encumbrances, and any modification or amendment of the same. Any consent given by Lender or any waiver of default under this Section, shall not constitute a consent to, or waiver of any right, remedy or power of Lender under any subsequent default hereunder.
4.8 Notice of Material Adverse Effect. Borrower shall promptly give to Lender notice of the occurrence of any Material Adverse Effect.
4.9 Limitation on Distributions. Provided that Borrower is not in breach of the covenant set forth in Section 4.22 (Debt Service Coverage Ratio) of the Credit Agreement (or Borrower has provided the Resizing Amount in accordance with this Agreement), and provided further that no Event of Default then exists, Borrower may, without the consent of Lender declare or pay any dividend or distributions, including, but not limited to, Preferred Dividends.
4.10 Additional Documents. Except with regard to any subordinate financing, Borrower shall not execute or record any document pertaining to, affecting or running with all or any portion of the Property, including, without limitation, any plat or subdivision map, without the prior written approval of Lender of the form and substance of such documents, which approval shall not be unreasonably withheld. Upon granting such approval, Lender agrees to execute such consents and subordination agreements with respect to such documents as are acceptable to Lender in its reasonable discretion.
4.11 Costs. Borrower shall reimburse Lender for any and all fees, costs and expenses including, without limitation, reasonable attorneys fees, other professionals fees, appraisal fees, title fees, environmental assessment fees (including Phase I and Phase II assessments), expert fees, court costs, litigation and other expenses (collectively, the Costs) incurred or paid by Lender or any of its officers, employees or agents in connection with: (a) the preparation, negotiation, procurement, review, administration or enforcement of this Agreement, the Notes, any other Loan Documents or any instrument, agreement, document, policy, consent, waiver, subordination, release of lien, termination statement, satisfaction of mortgage, financing statement or other lien search, recording or filing related thereto (or any amendment, modification or extension to, or any replacement or substitution for, any of the foregoing), whether or not any particular portion of the transactions contemplated during such negotiations is ultimately consummated, (b) any out-of-pocket fees and expenses related to this Agreement, and (c) the defense, preservation and protection of Lenders rights and remedies thereunder, including without limitation, its security interest in the Property or any other property pledged to secure the Loans, whether incurred in bankruptcy, insolvency, foreclosure or other litigation or proceedings or otherwise. The Costs shall be due and payable upon demand by Lender and such Costs incurred by Lender up to and including the Effective Date shall be included in the closing statement with the Title Company. If thereafter Borrower fails to pay the Costs when upon such demand, Lender is entitled to disburse such sums as an additional advance under the terms of this Agreement. Thereafter, the Costs shall bear interest from the date incurred or disbursed at the highest rate set forth herein. This provision shall survive the termination of this Agreement and/or the repayment of any amounts due or the performance of any Obligation.
4.12 Changes in Property Restrictions. Borrower shall not initiate, join in or consent to any change in any applicable zoning ordinance, general plan or similar law, or to any private restrictive covenant or any similar public or private restriction on the use of the Property, except with the prior written consent of Lender (not to be unreasonably withheld, conditioned or delayed).
4.13 Existence. Borrower shall maintain its existence and/or qualified to do business as a limited liability company or corporation, as applicable, in good standing under the laws of the State of Delaware and each other jurisdiction in which it is required to be so qualified.
4.14 Notice of Certain Matters. Borrower shall give notice to Lender, within fifteen (15) days after Borrower obtains actual knowledge thereof, of each of the following:
(a) any litigation or claim affecting or relating to the Property and involving an amount in excess of $1,000,000.00, whether covered by insurance or not, that could reasonably be expected to have a Material Adverse Effect;
(b) any dispute between Borrower and any governmental agency relating to the Property, the adverse determination of which would reasonably be expected to have a Material Adverse Effect;
(c) the creation or imposition of any mechanics, labor, materialmans or other similar lien or other lien against the Property that is not discharged or bonded over within 15 days from the date of Borrowers actual knowledge thereof;
(d) except as disclosed in the Environmental Report, the presence of any Hazardous Substances on, under or about the Property (other than as used in the normal course of Borrowers operations at the Property); any enforcement, clean-up, removal or other action or requirement of any governmental agency relating to any such Hazardous Substances; and the existence of any occurrence or condition on any property or in the vicinity of the Property that could cause the Property to be otherwise subject to any restrictions relating to Hazardous Substances and result in a Material Adverse Effect; and/or
(e) any occurrence of a Material Adverse Effect.
4.15 Further Assurances. Borrower shall execute and acknowledge (or cause to be executed and acknowledged) and deliver to Lender all documents, and take all actions, reasonably required by Lender from time to time to confirm the rights created or now or hereafter intended to be created under the Loan Documents, to protect and further the validity, priority and enforceability of the Loan Documents, to subject to the Loan Documents and any property intended by the terms of any Loan Document to be covered by the Loan Documents, or otherwise to carry out the purposes of the Loan Documents.
4.16 Amendment of Organizational Documents. Borrower shall deliver to Lender a copy of any amendment to the such articles or organizational document of Borrower reasonably promptly after the execution of any such amendment.
4.17 Merger; Disposition of Assets. UTI AZ shall not (a) merge or consolidate with any entity unless UTI AZ shall be the continuing or surviving Person, (b) [intentionally deleted], or (c) consummate, or take or permit any action to effectuate, a statutory division under applicable law (including any transfer or allocation of assets effected by any such statutory division) of UTI AZ.
4.18 Intentionally Deleted.
4.19 Insurance. Borrower shall maintain insurance in accordance with the Mortgage and comply with all covenants related thereto.
4.20 Casualty Loss; Proceeds of Insurance. Borrower will give the Lender prompt written notice of any loss or damage to the Property, or any part thereof, by fire or other casualty. In case of loss or damage covered by any one of the insurance policies maintained with respect to the Property, all proceeds of such insurance policies will be applied in accordance with the Mortgage.
4.21 Condemnation and Eminent Domain. Any and all awards heretofore or hereafter made or to be made to Borrower (or any subsequent owner of the Property, or any part thereof) by any governmental or other lawful authority for the taking, by condemnation or eminent domain, of all or any part of the Property (including any award from the United States government at any time after the allowance of a claim therefor, the ascertainment of the amount thereto, and the issuance of a warrant for payment thereof), are hereby assigned by the Borrower to the Lender, which awards will be prosecuted and applied in accordance with the Mortgage.
4.22 Funded Indebtedness to EBITDA Ratio. Borrower shall not permit its Funded Indebtedness to Consolidated EBITDA, on a consolidated basis, to be greater than 3.50 to 1.00 at the end of any fiscal quarter in respect of any trailing twelve (12) month period, as of each determination date, which determination dates shall commence on June 30, 2021, and occur on the last day of each fiscal quarter thereafter.
4.23 Debt Service Coverage Ratio. Borrower shall not permit its Debt Service Coverage Ratio, on a consolidated basis, to be less than 1.25 to 1.00 in respect of any trailing twelve (12) month period as of each determination date, which determination dates shall commence on September 30, 2021, and occur on each September 30th thereafter,
4.24 Loan to Value. Commencing on the third year anniversary of the making of the Effective Date, and upon any date thereafter (but not more than once prior to the Termination Date) , Lender may require a maximum loan to value of 70% based on a new appraisal on each determination date thereafter, at Borrowers cost (Loan to Value).
Section 4 Events of Default and Remedies.
5.1 Events of Default. The occurrence of any of the following events shall be an event of default (each, an Event of Default):
(a) Any representation or warranty made by or on behalf of Borrower herein, in any of the Loan Documents or in any other statement, certificate or document delivered to Lender pursuant to any such Loan Document, is incorrect or misleading when made, deemed made or reaffirmed; or
(b) Borrower defaults in the payment of any principal or interest on the Term Note when due and payable (whether by acceleration or otherwise) and such amount is not received by Lender within five (5) days thereafter, or Borrower defaults in the payment of any other sum required to be paid to Lender under any Loan Document within seven (7) days following written notice to Borrower that the same is due and payable; or
(c) Other than with respect to Sections 4.22, 4.23, and 4.24, Borrower fails to observe, comply with or perform any other covenant, condition or agreement herein or in any of the other Loan Documents and fails to cure such default within thirty (30) days after receipt of notice from Lender of the occurrence thereof (provided that, with respect to any default or breach specified in this subsection (c) that cannot be cured by within such 30 day period and Borrower shall have commenced the cure within such 30 day period, and thereafter diligently and expeditiously proceeds to cure the same, such 30 day period shall be extended for so long as it shall require Borrower in the exercise of due diligence to cure the same (up to a maximum of 90 days), provided that such grace period shall not apply to (i) a breach of any covenant that, in Lenders good faith judgment, cannot be cured, or (ii) any failure to maintain insurance in accordance with the Mortgage not cured within five (5) days, or (iii) any additional breach of a covenant for which an Event of Default exists but has not been cured within the permitted time therefor, provided however, that nothing in this subsection (iii) shall in any way limit Borrowers ability to cure such breach(es) which may have been undertaken, but not yet complete.
(d) A court enters a decree or order for relief with respect to Borrower in an involuntary case under any applicable bankruptcy, insolvency or other similar law then in effect, or appoints a receiver, liquidator, assignee, custodian, trustee, sequestrator (or other similar official) for Borrower or any substantial part of its Property, or orders the wind-up or liquidation of Borrowers affairs; or a petition initiating an involuntary case under any such bankruptcy, insolvency or similar law is filed, and in each case, is pending for sixty (60) days without dismissal; or
(e) Borrower commences a voluntary case under any applicable bankruptcy, insolvency or other similar law in effect, or makes any general assignment for the benefit of creditors, or fails generally to pay its debts as such debts become due, or takes company or other action in furtherance of any of the foregoing; or
(f) Any event occurs which may, in Lenders reasonable determination, have a Material Adverse Effect upon the Property or any portion thereof or upon Borrowers financial condition, operations, assets or prospects; or
(g) An Event of Default under any Loan Document; or
(h) The dissolution of Borrower; or
(i) The commencement of any foreclosure proceedings, proceedings in aid of execution, attachment actions, levies against, or the filing by any taxing authority of a lien against any of the Property or any property securing the repayment of any of the Obligations which lien is not removed (or bonded over which stays such actions) within thirty (30) days thereafter; or
(j) (i) The validity or effectiveness of any of the Loan Documents or its transfer, grant, pledge, mortgage, or assignment by the party executing such Loan Document is impaired or challenged; (ii) any party executing any of the Loan Documents asserts that any of such Loan Documents is not a legal, valid and binding obligation of the party thereto enforceable in accordance with its terms; (iii) the security interest or lien purporting to be created by any of the Loan Documents shall for any reason cease to be a valid, perfected lien subject to no other liens other than liens permitted by the terms of this Agreement; or (iv) any Loan Document is amended, hypothecated, subordinated, terminated or discharged, or any Person is released from any of its covenants or obligations under any of the Loan Documents except as permitted by Lender in writing; or
(k) the filing of any lien, charge or encumbrance against the Property or any part thereof, other than a Permitted Encumbrance, Permitted Lease, or as may otherwise be expressly set forth in the Loan Documents, which is not removed to the satisfaction of Lender within a period of ten (10) days thereafter; or
(l) an event of default (after notice and opportunity to cure available therein) under any Rate Management Agreement, including without limitation, nonpayment by Borrower of any Rate Management Obligation or the breach by Borrower of any term, provision or condition contained in therein; or
(m) Borrower fails to maintain the required Funded Indebtedness to Consolidated EBIDTA, Debt Service Coverage or Loan to Value Ratio pursuant to Sections 4.22, 4.23 or 4.24 and, within ten (10) days after the earlier of (i) the date Borrower is required to deliver the compliance certificate required under Section 4.4 hereof or (ii) delivery of written notice from Lender of such failure, Borrower fails to do one of the following: (a) pay down the outstanding principal balance of the Loan by an amount necessary to cause the Debt Service Coverage or Loan to Value Ratio to be restored to the required ratio (the Resizing Amount) and agrees to permanently reduce the availability of the Loans by such amount, or (b) deposit the Resizing Amount in an interest-bearing demand deposit account in Borrowers name with and pledged to Lender as collateral for the Loan, or (c) deliver to Lender an irrevocable letter of credit in the face amount of the Resizing Amount in form and substance, and issued by a financial institution, satisfactory to Lender in its sole discretion, and having an evergreen provision and expiring not earlier than thirty (30) days after the Termination Date, to be held as collateral for the Loans (subject to the terms of Section 2.5 hereof).
5.2 Remedies. If any Event of Default occurs and is then continuing, Lender may elect to exercise any one or more of the following remedies all of which are cumulative, and all without presentment, demand, protest or notice of any kind, as the same are hereby expressly waived by Borrower, unless otherwise required by applicable law:
(a) declare all Obligations to be immediately due and payable, whereupon such Obligations shall immediately become due and payable, or
(b) proceed to realize upon the Property or any portion thereof or any property securing the Obligations, including, without limitation, causing all or any part of the Property to be transferred or registered in its name or in the name of any other Person in accordance with applicable law regarding enforcing the security interest on the Property, with or without designation of the capacity of such nominee, and Borrower shall be liable for any deficiency remaining after disposition of any Property and waives all valuation and appraisement laws, or
(c) offset and apply to all or any part of the Obligations all moneys, credits and other property of any nature whatsoever of Borrower now or at any time hereafter in the possession of, in transit to or from, under the control or custody of, or on deposit with (whether held by Borrower individually or jointly with another party), Lender, including but not limited to certificates of deposit, or
(d) make any advances without thereby waiving its right to demand payment of the Note, its right not to make any further advances, or any of its other rights or remedies, or
(e) perform obligations of Borrower under the Loan Documents in such manner as Lender may determine, or
(f) exercise any and all rights and remedies provided by applicable law and/or the Loan Documents.
5.3 Default Rate. During the continuance of an Event of Default, all amounts of principal outstanding as of the date of the occurrence of such Event of Default shall accrue interest at the Default Rate, in Lenders sole discretion, without notice to Borrower. This provision does not constitute a waiver of any Event of Default or an agreement by Lender to permit any late payments whatsoever.
5.4 No Remedy Exclusive. No remedy set forth herein is exclusive of any other available remedy or remedies, but each is cumulative and in addition to every other remedy available under this Agreement, the Loan Documents or as may be now or hereafter existing at law, in equity or by statute, and each may be exercised together, separately and in any order. Borrower waives any requirement of marshalling of assets that may be secured by any of the Loan Documents.
5.5 Effect of Termination; Voluntary Termination.
(a) The termination of this Agreement shall not affect any rights of either party or any obligation of either party to the other, arising prior to the effective date of such termination, and the provisions hereof shall continue to be fully operative until all transactions entered into, rights created or Obligations incurred prior to such termination have been fully disposed of, concluded or liquidated. The security interest, lien and rights granted to Lender hereunder and under the Loan Documents shall continue in full force and effect, notwithstanding the termination of this Agreement or the fact that no portion of the Loans is outstanding to Borrower, until all of the Obligations have been indefeasibly paid and satisfied in full.
(b) Borrower may terminate this Agreement (i) by giving Lender written notice (Termination Notice) of the date on which this Agreement is to terminate (Voluntary Termination Date) at least ten (10) days before the Voluntary Termination Date, unless such election is revoked by Borrower in writing delivered to Lender, and (ii) by paying on any such Voluntary Termination Date all of the Obligations. Upon the Voluntary Termination Date (unless such termination is revoked as set forth above), (1) the Term Loan and all other Obligations will automatically and immediately become due and payable, and (2) Lenders obligations under this Agreement and the other Loan Documents arising on and after that effective date of termination will automatically terminate immediately, without notice or demand, which Borrower hereby expressly waives.
5.6 No Adequate Remedy at Law. Borrower recognizes that no remedy at law shall provide adequate relief to Lender in the event that Borrower shall fail to pay, perform, observe or discharge any of its Obligations under this Agreement, the Note or the other Loan Documents, and, accordingly, Lender and Borrower agree that Lender shall be entitled to temporary and permanent injunctive relief in any such case without the necessity of proving that it has incurred actual damages.
Section 6 Conditions Precedent.
6.1 Conditions to Loan Advance. Prior to the making of any Loan Advance, Borrower shall execute and/or deliver to Lender those of the following documents and other items required to be executed and/or delivered by Borrower, and shall cause to be executed and/or delivered to Lender those of the following documents and other items required to be executed and/or delivered by others, all of which documents and other items shall contain such provisions as shall be required to conform to this Agreement and otherwise shall be satisfactory in form and substance to Lender:
(a) Loan Documents. The Loan Documents.
(b) Insurance. The policies of insurance as provided herein.
(c) Title Insurance Policy. An ALTA 2006 Loan Policy of Title Insurance (the Title Policy) issued by the Title Company in the full amount of the Notes insuring that the Mortgage will be a first priority lien upon the fee simple title to the Real Property to the extent of advances of the Loans made by Lender from time to time under this Agreement, subject to no liens, claims, exceptions or encumbrances except the Permitted Exceptions and containing the following endorsements and such other endorsements as the Lender may require:
(i) Comprehensive Endorsement (ALTA Endorsement 9.1-06);
(ii) Access Endorsement (ALTA Endorsement 17-06 or 17.1-06, as applicable);
(iii) Tax Parcel Endorsement (ALTA Endorsement 18-06 or 18.1-06 as applicable);
(iv) Waiver of Arbitration Endorsement;
(v) Usury Endorsement;
(vi) Variable Rate Endorsement;
(viii) Environmental Protection Lien; and
(ix) Such additional endorsements as may be reasonably required by Lender based upon its review of the Title Policy and Survey.
(d) Title Clearance Documents. Copies of such documents, if any, as Borrower has provided the Title Company in connection with the issuance and underwriting of the Title Policy.
(e) Recorded Documents. Copies of all recorded documents described in the Title Policy.
(f) Searches. Current Uniform Commercial Code, federal and state tax lien and judgment searches, pending suit and litigation searches and bankruptcy court filings searches covering Borrower and disclosing no matters objectionable to Lender.
(g) Opinion of Counsel. Opinion letter from legal counsel for Borrower (which counsel must be approved by Lender with respect to the issuance of such opinion) opining to the authority of said parties to execute, deliver and perform their respective obligations under the Loan Documents, to the validity and binding effect and enforceability of the Loan Documents and to such other matters as Lender and its counsel shall require.
(h) Flood Plain. Evidence that (a) no portion of the Real Property is located in an area designated by the U.S. Secretary of Housing and Urban Development as having special flood hazards, or if any portion of the Real Property is so located, evidence that flood insurance is in effect; and (b) no portion of the Real Property is located in a federally, state or locally designated wetland or other type of government protected area.
(i) Environmental Report. Evidence that the environmental condition of the Property is satisfactory to Lender. Such evidence shall include, but shall not be limited to, a Phase I environmental audit certified to Borrower and Lender and setting forth an asbestos evaluation and other environmental investigations of the Property and the areas surrounding the Property (the Environmental Report). Such testing and investigation shall be performed by an environmental professional acceptable to Lender in a manner satisfactory to Lender.
(j) Financial Conditions. Evidence that, as of the date of the Loan Advance, there has been no Material Adverse Effect since the date of the most recent financial statements or projections delivered to Lender or the most recent inspections of the condition of the Property made by the Lender, as the case may be.
(k) Appraisal. An Appraisal acceptable to Lender indicating that the amount of the Term Loan is not more than seventy percent (70%) of the aggregate fair market as is value of the Property.
(l) Organizational Documents. A certified copy (certified, where applicable, by the state office in which such documents were filed, and in all other cases by the secretary or other appropriate representative of the entity) of: (i) the articles of organization or incorporation, and operating agreement or bylaws of Borrower, as applicable; (ii) resolutions by the Borrower authorizing the execution and delivery of the documents evidencing and securing the Loans; (iii) an incumbency certificate, including specimen signatures for all individuals executing any of the Loan Documents for the Borrower executing any of the Loan Documents; (iv) certificates of good standing for the Borrower that is an entity from the Secretary of State of the State of Delaware; and (v) all other instruments and documents concerning the formation and existence for the Borrower that is an entity, and the execution and delivery of the Loan Documents by the Borrower, required by the Lender.
(n) Additional Documents. Such other papers and documents regarding Borrower or the Property as Lender may require.
6.2 Conditions Precedent in General. In addition to the other conditions set forth herein, the obligation of Lender to make any Loan Advance shall be conditioned upon and subject to the payment to Lender of all loan fees then owing from Borrower to Lender and to satisfaction of all of the following conditions:
(a) The Lender shall have received all documents, instruments and reports referred to in Article 4, in form and substance reasonably acceptable to the Lender, as of the date of such disbursement.
(b) All representations and warranties contained in this Agreement and in the other Loan Documents shall be true in all material respects on and as of the date of such disbursement.
(c) Borrower shall have performed all of its obligations under all Loan Documents which are required to be performed on or prior to the date of such disbursement.
(d) There shall be no Material Adverse Effect in the financial condition of Borrower as reasonably determined by Lender as of the date of such disbursement.
(e) No Event of Default shall have occurred that has not been waived in writing by Lender, and no event or circumstance that with the giving of notice, the passage of time, or both, would constitute an Event of Default shall then exist.
(f) No litigation or proceedings are pending (including proceedings under Title 11 of the United States Code) against Borrower or the Property, which litigation or proceedings, in the reasonable judgment of Lender, would adversely affect Borrowers ability to perform its respective obligations under the Loan Documents or adversely affect the Property or any portion thereof.
Section 7 Miscellaneous Provisions.
7.1 Miscellaneous. This Agreement, the exhibits and the other Loan Documents are the complete agreement of the parties hereto and supersede all previous understandings relating to the subject matter hereof. Subject to Lenders rights set forth in Section 2.2 hereof, this Agreement may be amended only in writing signed by the party against whom enforcement of the amendment is sought. This Agreement may be executed in counterparts. If any part of this Agreement is held invalid, illegal or unenforceable, the remainder of this Agreement shall not in any way be affected. This Agreement is and is intended to be a continuing agreement and shall remain in full force and effect until the Loans and Obligations are finally and irrevocably paid and satisfied in full and this Agreement is terminated.
7.2 Waiver by Borrower. Borrower waives notice of non-payment, diligence, demand, presentment, notice or non-payment or dishonor, protest or notice of protest of any collateral or otherwise, and all other notices (except those notices specifically provided for in this Agreement and the other Loan Documents); consents to any renewals or extensions of time of payment of any Obligations; consent to the release without notice of any party liable on any of the Obligations; consents to the addition without notice of parties liable on any of the Obligations; and consents to the acceptance or release without notice of collateral, all without in any way affecting its liability. Borrower hereby waives all suretyship defenses, or impairment of collateral, including but not limited to, all defenses set forth in the Uniform Commercial Code.
7.3 Binding Effect. This Agreement shall be binding upon and inure to the benefit of the respective legal representatives, successors and assigns of the parties hereto; however, without Lenders prior written consent, Borrower may not assign or transfer any of its rights or delegate any of its Obligations under this Agreement or any of the Loan Documents. Lender (and any subsequent assignee) may transfer and assign any of its rights or delegate any of its duties under this Agreement or may transfer or assign partial interests or participations in the Loans or Notes to other Persons provided that, at all times on and after the Effective Date, the Lender (as defined in this Agreement and the other Loan Documents) is also Party A under the Rate Management Agreement, it being the intention of the parties that the Rate Management Agreement, this Agreement, and the Loan Documents all be between Lender and Borrower. Lender may disclose to all prospective and actual assignees and participants all financial, business and other information about Borrower which Lender may possess at any time.
7.4 Security. The Obligations are secured as provided in this Agreement, the Mortgage, in the other Loan Documents and in each other document or agreement that by its terms secures the repayment or performance of the Obligations (or any portion thereof).
7.5 Survival. All representations, warranties, covenants and agreements made by Borrower herein and in the Loan Documents shall survive the execution and delivery of this Agreement, the Loan Documents and the issuance of the Notes, and will continue until all Obligations are paid and satisfied in full.
7.6 Delay or Omission. No delay or omission on the part of Lender in exercising any right, remedy or power arising from any Event of Default or otherwise shall impair any such right, remedy or power or any other right remedy or power or be considered a waiver or any right, remedy or power or any Event of Default nor shall the action or omission to act by Lender upon the occurrence of any Event of Default impair any right, remedy or power arising as a result thereof or affect any subsequent Event of Default of the same or different nature.
7.7 Notices. Any notices under or pursuant to this Agreement shall be deemed duly sent when delivered in hand or when mailed by registered or certified mail, return receipt requested or by recognized overnight courier service addressed as follows:
|Universal Technical Institute, Inc.|
|4225 E. Windrose Drive, Suite 200|
|Phoenix, Arizona 85032|
|Troy Anderson, Chief Financial Officer|
With a copy to:
|DLA Piper LLP (US)|
|Attn: David Lewis, Esq.|
|2525 E Camelback Rd., Suite 1000|
|Phoenix, AZ 85016|
|Fifth Third Bank, National Association|
|38 Fountain Square Plaza|
|Cincinnati, Ohio 45263|
|Attention: Commercial Loan Department|
Either party may change such address by sending written notice of the change to the other party.
7.8 No Partnership. Nothing contained herein or in any of the Loan Documents is intended to create or shall be construed to create any partnership, joint venture or other relationship between Lender and Borrower other than as expressly set forth herein or therein and shall not create any joint venture, partnership or other relationship.
7.9 Indemnification. If after receipt of any payment of all or part of the Obligations, Lender is for any reason compelled to surrender such payment to any Person, because such payment is determined to be void or voidable as a preference, impermissible setoff, or diversion of trust funds, or for any other reason, this Agreement shall continue in full force and effect and Borrower shall be liable to, and shall indemnify, save and hold Lender, its officers, directors, attorneys, and employees harmless of and from the amount of such payment surrendered. The provisions of this Section 7.9 shall be and remain effective notwithstanding any contrary action which may have been taken by Lender in reliance on such payment, and any such contrary action so taken shall be without prejudice to Lenders rights under this Agreement and shall be deemed to have been conditioned upon such payment becoming final, indefeasible and irrevocable. In addition, to the extent permitted by applicable law, except to the extent of the gross negligence or willful misconduct of Lender, its agents, employees, contractors, and licensees, Borrower shall indemnify, defend, save and hold Lender, its officers, directors, attorneys, and employees harmless of, from and against all claims, demands, liabilities, judgments, losses, damages, costs and expenses, joint or several (including all accounting fees and attorneys fees reasonably incurred), that Lender or any such indemnified party may incur by third party claims arising out of this Agreement, any of the Loan Documents or any act taken by Lender hereunder . The provisions of this Section 7.9 shall survive the termination of this Agreement.
7.10 Governing Law; Jurisdiction. This Agreement, the Note and the other Loan Documents are delivered in, are intended to be performed in, will be controlled, interpreted, construed and enforceable in accordance with and governed by the internal laws of, the State Arizona (except to the extent expressly stated in the Mortgage, Assignment of Leases, or Indemnity Agreement), without regard to principles of conflicts of law. Borrower agrees that the state and federal courts in Hamilton County, Ohio or Maricopa County, Arizona, shall have non-exclusive jurisdiction over all matters arising out of the Loan Documents and consent to jurisdiction and venue of such courts and waives any argument that venue in such forum and venue is not convenient, and that service of process in any such proceeding shall be effective if mailed to Borrower at their address described in the Notices section of this Agreement. Nothing contained herein shall affect the right of Lender to serve process in any other manner permitted by law.
7.11 JURY TRIAL WAIVER. LENDER AND BORROWER HEREBY WAIVES THE RIGHT TO TRIAL BY JURY OF ANY MATTERS ARISING OUT OF OR IN ANY WAY RELATED TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY WHETHER IN CONTRACT, TORT OR OTHERWISE. THIS PROVISION AND THE WAIVER SET FORTH HEREIN ARE MATERIAL INDUCEMENTS TO LENDER TO PROVIDE THE FINANCING DESCRIBED HEREIN AND IN THE LOAN DOCUMENTS.
7.12 PATRIOT ACT NOTICE. Borrower hereby acknowledges that it seeks to comply with all applicable laws concerning money laundering and related activities. To help the government fight the funding of terrorism and money laundering activities, federal law requires all financial institutions to obtain, verify, and record information that identifies each party who opens an account. Lender will ask each party to a financial transaction their name, address and other information that will allow Lender to identify such party. Lender may also ask to see other documents that substantiate a partys identity.
7.13 Entire Agreement; No Oral Modifications. The Loan Documents to which Borrower is a party, collectively constitute the entire understanding between Lender and Borrower as to the matters contemplated therein and may not be modified, amended or terminated except by written agreement signed by both Lender and Borrower.
7.14 Approvals, Consents and Waiver. No approval, acceptance or consent of Lender required by any provision of the Loan Documents, nor any statement or waiver of any required approval, acceptance, acceptability, consent or condition, shall be deemed to have occurred until set forth in writing, signed by Lender, and delivered to Borrower. Any approval, acceptance, consent, waiver or statement of acceptability granted by Lender shall be applicable only to the particular occurrence, circumstance or instance identified in such writing, and shall not constitute a continuing approval, acceptance, consent, waiver or statement of acceptability or be otherwise applicable to any other occurrence, circumstance or instance, whether similar or dissimilar. When this Agreement, any other Loan Document refers to the consent or approval of Lender, or provides that any document, matter, act, event, occurrence or Person must be satisfactory or acceptable to Lender or words of similar import, such consent or approval may be given or withheld by Lender, and such document, matter, act, event, occurrence or Person must be satisfactory or acceptable to Lender, in its sole and absolute discretion, unless otherwise expressly provided herein or therein.
7.15 Time Is of the Essence. Time is of the essence of the Loan Documents and of every part hereof, and Borrower therefore acknowledges that Lender has no obligation to grant any extension of any provision thereof, and any extension which Lender may elect to grant may be conditioned upon such terms and conditions as Lender may impose in its sole discretion.
7.16 Severability. In the event of any invalidity or unenforceability of any Loan Document or any provision of any Loan Documents, the remainder of the Loan Documents shall remain in full force and effect.
7.17 Headings. Headings herein are used for convenience of reference only and do not define or limit the scope of provisions of this Agreement.
7.18 Interpretation. Each of the Loan Documents shall be construed without regard to whether it was prepared or drafted by one party or the other or either of their attorneys.
7.19 Electronic Signatures; Counterparts. This Agreement and the other Loan Documents may be signed by facsimile signatures or other electronic delivery of an image file reflecting the execution hereof, and, if so signed: (a) may be relied on by each party as if the document were a manually signed original and (b) will be binding on each party for all purposes. This Agreement may be executed in multiple counterparts, each of which shall be an original but all of which together shall constitute one and the same instrument.
7.20 Limitation Upon Interest. In the event that the interest and/or charges in the nature of interest, if any, provided for by this Agreement or by any other Loan Document, or the amount paid, or agreed to be paid, to Lender for the use, forbearance or detention of money to be loaned under this Agreement or the other Loan Documents, or for the performance or payment of any covenant or obligation contained herein or therein, contravenes a legal or statutory limitation applicable to the Term Loan, if any, Borrower will pay only such amounts as would legally be permitted; provided, however, that if the defense of usury and all similar defenses are unavailable to Borrower, Borrower will pay all amounts provided for herein. If, for any reason, amounts in excess of the amounts permitted in the foregoing sentence have been paid, received, collected or applied hereunder, whether by reason of acceleration or otherwise, then, and in that event, any such excess amounts will be applied to principal, unless principal has been fully paid, in which event such excess amount will be refunded to Borrower. Borrower agrees to pay an effective rate of interest equal to the rate stated in this Agreement and the Term Note, plus any additional rate, if any, resulting from any charge or fee in the nature of interest paid or to be paid by Borrower and/or any other obligor in connection with the indebtedness secured by the Loan Documents, or any benefit received or to be received by Lender in connection with the indebtedness or the Loan Documents.
7.21 Waiver of Offsets; Counterclaims. Borrower hereby waives the right to assert a counterclaim, other than a compulsory counterclaim, in any action or proceeding brought against it by Lender to offset any obligations to make the payments required by the Loan Documents. No failure by Lender to perform any of its material obligations hereunder will result in any offset against any payments which Borrower is obligated to make under any of the Loan Documents.
7.22 Document Imaging, Electronic Transactions and the UETA. Without notice to or consent of Borrower, Lender may create electronic images of this Agreement and the other Loan Documents and destroy paper originals of any such imaged documents. Provided that such images are maintained by or on behalf of Lender as part of Lenders normal business processes, Borrower agrees that such images have the same legal force and effect as the paper originals, and are enforceable against Borrower. Furthermore, Borrower agrees that Lender may convert any Loan Document into a transferrable record as such term is defined under, and to the extent permitted by, the Uniform Electronic Transactions Act as in effect in the State of Arizona, as amended from time to time, and any successor statute, and any regulations promulgated thereunder from time to time (the UETA), with the image of such instrument in Lenders possession constituting an authoritative copy under the UETA.
[Signature Pages to Immediately Follow]
IN WITNESS WHEREOF, Borrower and Lender have executed this Credit Agreement by their duly authorized officers as of the date first above written.
UNIVERSAL TECHNICAL INSTITUTE, INC.
|By:||/s/ Troy R. Anderson|
|Print Name: Troy R. Anderson|
|Title: Executive Vice President & Chief Financial Officer|
UNIVERSAL TECHNICAL INSTITUTE OF ARIZONA, LLC
|By:||/s/ Troy R. Anderson|
|Print Name: Troy R. Anderson|
|Title: Executive Vice President & Chief Financial Officer|
FIFTH THIRD BANK, NATIONAL ASSOCIATION
|By:||/s/ Jeff Thom|
|Print Name: Jeff Thom|
|Title: Senior Vice President|
Signature Page to Credit Agreement
Affiliate means, as to Borrower, (a) any person or entity which, directly or indirectly, is in control of, is controlled by or is under common control with, Borrower.
Applicable Margin means: as to a One Month LIBOR Rate Loan, 2.00% per annum.
Assignment of Leases shall mean that certain Assignment of Rents and Leases of even date herewith encumbering the Property by Borrower for the benefit of Lender to secure the Term Loan, as the same may be amended, restated, modified, extended or supplemented and in effect from time to time.
Benchmark Replacement has the meaning set forth in Section 2.2(d) of this Agreement.
Business Day means any day other than a Saturday, Sunday or federal holiday and (i) with respect to all notices and determinations in connection with the One Month LIBOR Rate, any day (other than a Saturday or Sunday) on which commercial banks are open in London, England, New York, New York, and Cincinnati, Ohio for dealings in deposits in the London Interbank Market; and (ii) in all other cases, any day on which commercial banks in Cincinnati, Ohio are required by law to be open for business; provided that, notwithstanding anything to the contrary in this definition of Business Day, at any time during which a Rate Management Agreement with Lender is then in effect with respect to all or a portion of the Note, then the definitions of Business Day and Banking Day, as applicable, pursuant to such Rate Management Agreement shall govern with respect to all applicable notices and determinations in connection with such portion of the Note subject to such Rate Management Agreement.
Certificate of Designations means the Certificate of Designations of the Series A Convertible Preferred Stock, dated June 26, 2016, which fixes the voting powers, designations, preferences and relative, participating, optional or other special rights, qualifications, limitations or restrictions of the Series A Preferred Stock.
Closing Date shall mean the Business Day on which each of the conditions set forth in Section 6 hereof is satisfied.
Consolidated EBITDA means, for any period, the sum of the following determined on a consolidated basis, without duplication, for the Borrower and its subsidiaries in accordance with GAAP; (a) consolidated income of the Borrower and its subsidiaries , plus (b) the sum of the following, to the extent deducted in determining income for such period: (i) the provision for income taxes payable during such period, (ii) interest expense, (iii) amortization, depreciation and other non-cash charges including net stock-based compensation (except to the extent that such non-cash charges are reserved for cash charges to be taken in the future), (iv) fees, costs, and expenses (including legal, accounting and financing costs) expensed during such period in connection with any of potential acquisitions, new program, and campus start-up costs, and (v) the amount of any non-recurring restructuring charge, reserve, integration costs, or other business optimization expense or cost including those one-time charges related to severance and expenses relating to Borrowers stated growth and diversification strategy, less (c) the sum of the following, without duplication, to the extent included in determining consolidated income for such period: (i) any extraordinary gains or unusual and non-recurring gains for such period (ii) interest income and (iii) non-cash gains or non-cash items increasing consolidated income for such period.
Debt Service Coverage Ratio means the ratio of (a) the sum of Borrowers Consolidated EBITDA (less Preferred Dividends) and other extraordinary items, to (b) the current portion of Long Term Debt and interest paid, for the measurement period.
Effective Date has the meaning set forth in the first paragraph of this Agreement.
Environmental Report has the meaning set forth in Section 6.1(i) of this Agreement.
Excluded Swap Obligation means, with respect to any guarantor of a Swap Obligation, including the grant of a security interest to secure the guaranty of such Swap Obligation, any Swap Obligation if, and to the extent that, such Swap Obligation is or becomes illegal under the Commodity Exchange Act or any rule, regulation or order of the Commodity Futures Trading Commission (or the application or official interpretation of any thereof) by virtue of such guarantors failure for any reason to constitute an eligible contract participant as defined in the Commodity Exchange Act and the regulations thereunder at the time the guaranty or grant of such security interest becomes effective with respect to such Swap Obligation. If a Swap Obligation arises under a master agreement governing more than one swap, such exclusion shall apply only to the portion of such Swap Obligation that is attributable to swaps for which such Swap Obligation or security interest is or becomes illegal.
Funded Indebtedness means all Indebtedness (i) in respect of money borrowed or (ii) evidenced by a note or a debenture (senior or subordinated) , or (iii) in respect of rent or hire of property under leases or lease arrangements which under generally accepted accounting principles are required to be capitalized, or (iv) in respect of obligations under conditional sales or other title retention agreements.
Hazardous Substances shall have the meaning set forth in the Indemnity Agreement.
Improvements shall mean all buildings, structures, paving, lighting, landscaping, utility lines and equipment and all other site improvements and all other improvements on the Real Property.
Indebtedness means (i) all items (except items of capital stock, of capital surplus, of general contingency reserves or of retained earnings, deferred income taxes, and amount attributable to minority interest of any) which in accordance with generally accepted accounting principles would be included in determining total liabilities as shown on the liability side of a balance sheet as at the date as of which Indebtedness is determined, (ii) all indebtedness secured by any mortgage, pledge, lien or conditional sale or other title retention agreement to which any property or asset owned or held is subject, whether or not the indebtedness secured thereby shall have been assumed (excluding non-capitalized leases which may amount to title retention agreements but including capitalized leases), and (iii) all indebtedness of others which an entity has directly or indirectly discounted or sold with recourse or agreed (continently or otherwise) to purchase or repurchase or otherwise acquire, or in respect of which such entity or any subsidiary has agreed to apply or advance funds (whether by way of loan, stock purchase, capital contribution or otherwise) or otherwise to become directly or indirectly liable.
Indemnity Agreement shall mean that certain Environmental Release, Hold Harmless and Indemnity dated as of even date herewith by Borrower in favor of Lender.
Liquidation Preference means the liquidation preference of the Series A Preferred Stock, as adjusted from time to time, pursuant to the Certificate of Designations. The Liquidation Preference as of March 31, 2021 was $100 per share of Series A Preferred Stock.
Loan Advance shall mean a disbursement of all or any portion of the Loans.
Loan Documents means this Agreement, the Note, the Mortgage, the Assignment of Rents and Leases, the Indemnity Agreement, and each Rate Management Agreement between Borrower and Lender; and Loan Document means any one of the Loan Documents.
Long Term Debt means Indebtedness which either by its terms is not payable in full within one (1) year from the date incurred, or the repayment of which may, at the option of the obligor, be extended for a period of more than one (1) year from the date incurred.
Material Adverse Effect means a material adverse effect on (a) Borrowers (taken as whole): (i) business, operations, prospects or financial condition, or (ii) ability to perform any of its material obligations or the negative covenants in Section 5 of this Agreement, or other material obligations under any of the Loan Documents; (b) the recoverable value of the Property or Lenders rights or interests therein; (c) the enforceability or validity on any Loan Document, or the perfection or priority in the Collateral granter thereunder, or (d) the ability of Lender to exercise any of its material rights or remedies under the Loan Documents or under applicable law.
Mortgage shall mean that certain Deed of Trust, Assignment of Rents and Leases, Security Agreement and Fixture Filing and that certain Assignment of Rents and Leases each of even date herewith encumbering the Property by Borrower for the benefit of Lender to secure the Obligations, as each of the same may be amended, restated, modified, extended or supplemented and in effect from time to time.
Note(s) shall mean the Term Note.
Obligation(s) means all loans, advances, indebtedness, liabilities and obligations of Borrower owed to Lender whether now existing or hereafter arising under this Agreement, the Note, the Mortgage, the Indemnity, the Assignment of Rents, and the other Loan Documents, any and all Rate Management Obligations, all obligations to perform or forbear from performing acts under the Loan Documents, all amounts disbursed by Lender for the benefit of or at the request of Borrower under the Loan Documents, and all expenses and attorneys fees incurred by Lender under this Agreement; provided that the Obligations shall exclude any Excluded Swap Obligations.
One Month LIBOR Rate has the meaning set forth in Section 2.2 of this Agreement.
Permitted Encumbrances means any liens, obligations, agreements or items of record that are subordinate to the Deed of Trust.
Permitted Exceptions shall mean the exceptions to the title of the Real Property listed on Schedule B-1 to the Title Policy and all Permitted Leases.
Permitted Leases shall mean commercial leases of the Property executed by Borrower (i) with any affiliate of Borrower, and (ii) for any leases with any third party that is not an affiliate of Borrower, with the prior written consent of Lender (not to be unreasonably withheld, conditioned or delayed), which at the request of Lender, shall be subject to a subordination, non-disturbance, and attornment agreement on Lenders then current-form (with any commercially reasonable changes requested by such tenant).
Person means any natural person, corporation, limited liability company, trust, joint venture, association, company, partnership, governmental authority or other entity.
Preferred Dividends means the noncumulative cash dividend on each share of Series A Preferred Stock payable out of UTIs legally available funds semi-annually in arrears on September 30 and March 31 of each year which begin to accrue on the first day of the applicable dividend period at a rate of seven and one-half percent (7.5%) per annum on the Liquidation Preference then in effect, as such amount is adjusted from time to time pursuant to the Certificate of Designations, before any dividends are declared, set apart or paid upon any capital stock of UTI ranking junior to the Series A Preferred Stock; provided, however, if the foregoing cash dividend is not paid, the Liquidation Preference is increased to an amount equal to the Liquidation Preference then in effect plus an amount reflecting that Liquidation Preference multiplied by the cash dividend rate then in effect plus two percent (2.0%) per annum..
Property shall have the meaning set forth in the Mortgage.
Rate Management Agreement means the ISDA Master Agreement between UTI and the Lender executed as of the date hereof, and any schedules, confirmations and documents and other confirming evidence between the parties confirming transactions thereunder, all whether now existing or hereafter arising, and in each case as amended, modified or supplemented from time to time.
Rate Management Obligations means any and all obligations of Borrower to Lender or any affiliate of Fifth Third Bancorp, whether absolute, contingent or otherwise and howsoever and whensoever (whether now or hereafter) created, arising, evidenced or acquired (including all renewals, extensions and modifications thereof and substitutions therefore), under or in connection with (i) any and all Rate Management Agreements, and (ii) any and all cancellations, buy backs, reversals, terminations or assignments of any Rate Management Agreement.
Real Property shall have the meaning set forth in the Mortgage.
Series A Preferred Stock means UTIs Series A Preferred Stock, par value $0.0001 per share.
Swap Obligation means any Rate Management Obligation that constitutes a swap within the meaning of section 1a(47) of the Commodity Exchange Act, as amended from time to time.
Termination Date means the earliest of: (i) May 12, 2028, (ii) the date upon which the entire outstanding balance under the Notes shall become due pursuant to the provisions hereof (whether as a result of acceleration by Lender or otherwise), and (iii) the date upon which the Loans shall be repaid in full.
Title Company shall mean First American Title Insurance Company.
Title Policy shall have the meaning set forth in Section 6.1(c) of this Agreement.
Uniform Commercial Code shall have the meaning set forth in the Mortgage.
TERM LOAN PRINCIPAL PAYMENT SCHEDULE
Form of Projected Income Statement