Draft TIFIA Loan Term Sheet Template as of 9/11/08
UNITED STATES DEPARTMENT OF TRANSPORTATION
Re: TIFIA Loan Term Sheet Template – [Project Name]
(TIFIA Application for Credit Assistance No. [_________])
Ladies and Gentlemen:
This TIFIA Loan Term Sheet, including Attachment 1 (collectively, the “Term Sheet”)
constitutes the commitment of the United States Department of Transportation (hereinafter the
“Department”) to proceed on an expedited basis to provide a secured loan (the “TIFIA Loan”) for the
[Insert Project Name] (hereinafter the “Project”, as described below), pursuant to the Transportation
Infrastructure Finance and Innovation Act of 1998 (“TIFIA”), §1501 et. seq. of Public Law 105-178
(as amended by Public Law 105-206 and Public Law 109-59) (the “Act”), as codified as 23 U.S.C.
§601 et seq.
The Project consists of [Insert Project Description], to be developed, designed and constructed
pursuant to a Concession Agreement, [dated as of ______________ ] (the “Concession Agreement”)
between ___________________________ (the “Borrower”) and
__________________________________ (“_______”). Your current estimated total Project cost is
$_________.
While the Department’s commitment to provide the TIFIA Loan to the Project is based on
your application received in _______________, your presentation of _______________, and the
supplemental information you have submitted, the final terms of the TIFIA Loan will be specified in
the TIFIA Loan Agreement (the “TIFIA Loan Agreement”). This Term Sheet establishes the parties,
the maximum original principal amount of the TIFIA Loan, the dedicated repayment sources, the term,
the method of determining the interest rate, and credit terms set forth in Attachment 1. The Term
Sheet is a commitment of the Department to proceed on an expedited basis to provide the TIFIA Loan,
subject only to the terms specified herein, and is subject to the completion of a due diligence review
by [the TIFIA JPO] of the relevant traffic and revenue studies, senior loan documents, the Concession
Agreement, a Subordination and Intercreditor Agreement, rating letters[, a Collateral Agency
Agreement and such other documentation as the Department may require,] all on terms and conditions
acceptable to the Department. This commitment is conditioned on your acceptance of the terms set
forth herein [and insert additional conditions, if any]. This commitment expires on [45 days from date
of execution].
Capitalized terms used in this Term Sheet and not otherwise defined shall have the respective
meanings ascribed thereto in the TIFIA Template Loan Agreement, the form of which is attached
hereto as Attachment 2.
If the terms and the provisions of this Term Sheet are acceptable, please countersign this Term
Sheet in the space indicated below.
Draft TIFIA Loan Term Sheet Template as of 9/11/08
Sincerely,
UNITED STATES DEPARTMENT
OF TRANSPORTATION
By:
[______________]
Administrator
Federal Highway Administration
Date:
ACKNOWLEDGED AND AGREED TO:
[BORROWER]
By:
Title: __________________________
Date:
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Draft TIFIA Loan Term Sheet Template as of 9/11/08
ATTACHMENT 1: TERMS FOR TIFIA LOAN AGREEMENT
THE TERMS SET FORTH HEREIN REPRESENT THE STANDARD TERMS FOR A TIFIA
LOAN AGREEMENT THAT MUST BE ACCEPTED BY THE BORROWER IN ORDER TO
PROCEED TO EXECUTION OF A TIFIA LOAN AGREEMENT ON AN EXPEDITED BASIS. .
TIFIA LENDER United States Department of Transportation (the “TIFIA
“Lender”)
BORROWER The Borrower shall be ________________ (the “Borrower”),
[describe corporate entity].
PRINCIPAL AMOUNT OF
TIFIA LOAN The TIFIA Loan shall be in an amount no to exceed
$________________ , provided that the maximum original
principal amount of the TIFIA Loan shall not exceed the
lesser of 33 percent of reasonably anticipated Eligible Project
Costs, as defined in the Act or, if the TIFIA Loan does not
receive an Investment Grade Rating, the amount of the Initial
Senior Obligations.
DEDICATED REPAYMENT
SOURCES The dedicated source of repayment of the TIFIA Loan shall
be a lien on Project Revenues (as defined below).
SECURITY The security for the TIFIA Loan shall be a security interest in
the Project Revenues [and liens and security interests in other
assets as specified in this Term Sheet].
INTEREST RATE The TIFIA Loan shall bear interest at a fixed rate calculated
by adding one basis point (.01%) to the rate of securities of a
similar maturity as published on the execution date of the
TIFIA Loan Agreement in the United States Treasury Bureau
of Public Debt’s daily rate table for State and Local
Government Series (SLGS) securities, currently located on
the internet at www.treasurydirect.gov/govt/rates/slgs/slgs.htm.
Interest will be computed on the Outstanding TIFIA Loan
Balance (as well as on any past due interest) from time-to-
time on the basis of a 365-day or 366-day year, as
appropriate, for the actual number of days elapsed and will be
compounded semi- annually; provided, however, in the event
of a Payment Default, the Borrower shall pay interest on any
overdue amount from its due date to the date of actual
payment at the Default Rate.
DEFAULT RATE If the Borrower fails to pay when due interest on or principal
of the TIFIA Loan, the Borrower shall pay interest on such
overdue amount from its due date to the date of actual
payment at an interest rate of 200 basis points (2.00%) above
the TIFIA interest rate.
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Draft TIFIA Loan Term Sheet Template as of 9/11/08
TERM The final maturity of the TIFIA Loan shall be
[_______________], but in any event not later than 35 years
after the date of substantial completion of the Project.
ELIGIBLE PROJECT COSTS Eligible Project Costs shall include those costs defined in the
Act, including costs associated with concession payments
made to [agency], if any, by the Borrower, and prior Project
expenditures for the three-year period preceding the
application date of [_______________].
Eligible Project Costs incurred prior to execution of the
TIFIA Loan Agreement shall be verified by the TIFIA Lender
and must be consistent with title 23 U.S.C. and 48 C.F.R.
§31.105 relating to construction and architect-engineer
contracts and the cost principles in subpart §31.2 of 48 C.F.R.
PROJECT REVENUES Project Revenues shall include (i) all income, tolls, revenues,
rates, fees, charges, rentals, or other receipts derived by or
related to the operation or ownership of the Project, including
all amounts from joint development or leasing of air space
lease rights, (ii) any revenues assigned to the Borrower and
proceeds of the sale or other disposition of all or any part of
the Project, and (iii) all income derived from Permitted
Investments.
SECURITY AND PRIORITY The TIFIA Loan shall be secured by a second priority
security interest in Project Revenues and liens and security
interests in other project assets subordinate only to the lien of
the Senior Obligations. The TIFIA Loan Agreement shall be
secured by a first priority security interest in Project
Revenues on parity with the lien of the Senior Debt
Obligations upon the occurrence of a Bankruptcy Related
Event.
The flow of funds will be as follows: ∗
1. Operating and Maintenance Expenses [may include
revenue sharing amount payable to [State Agency];
2. Required Capital Expenditures;
3. Fees, costs and expenses due under Senior Loan
Agreement and TIFIA Loan Agreement;
4. Interest portion of Senior Debt Service and Hedging
Obligations;
5. Principal portion of Senior Debt Service and Hedging
Termination Obligations, if any, from repayment of Senior
Debt Service, Hedging Termination Obligations (other than
Partially Subordinated Hedges) and Hedging Termination
Obligations for tax, illegality or failure of Borrower to pay
Hedging Obligations when due;
6. Interest portion of TIFIA Debt Service;
7. Principal portion of TIFIA Debt Service;
∗
May be modified depending on structure of TIFIA Loan and Project cash flows.
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8. Deposits to Debt Service Reserve Account, if any and
repayment of obligations to any provider of a liquidity facility
held for the benefit of any Debt Service Reserve Account;
9. Deposits to Major Maintenance Reserve Account, if any;
10. Deposits to Hedging Acquisition Account, if any;
11. Discretionary Capital Expenditures;
12. Voluntary prepayments of Senior Loans and related
Hedging Termination Obligations; and
13. Deposits to Distribution Account.
In the event [applicable state agency] revenue sharing
payments are subordinate to any debt service obligation in the
flow of funds, the TIFIA Lender will require that such
payments also be subordinate to TIFIA debt service.
The TIFIA Lender shall approve the priority status of the
Borrower’s obligations under any hedging contracts entered
into in connection with the Senior Obligations.
BANKRUPTCY RELATED EVENT Bankruptcy Related Event means (a) an involuntary
proceeding shall be commenced or an involuntary petition
shall be filed seeking (i) liquidation, reorganization or other
relief in respect of the Borrower or any of its debts, or of a
substantial part of the assets of the Borrower, under any
Insolvency Law, or (ii) the appointment of a receiver, trustee,
liquidator, custodian, sequestrator, conservator or similar
official for the Borrower for a substantial part of the assets of
the Borrower, and, in any case referred to in the foregoing
subclauses (i) and (ii), such proceeding or petition shall
continue undismissed for 60 days or an order or decree
approving or ordering any of the foregoing shall be entered;
or (b) the Borrower shall (i) apply for or consent to the
appointment of a receiver, trustee, liquidator, custodian,
sequestrator, conservator or similar official for the Borrower
or for a substantial part of the assets of the Borrower, or (ii)
generally not be paying its debts as they become due unless
such debts are the subject of a bona fide dispute, or become
unable to pay its debts generally as they become due, or (iii)
make a general assignment for the benefit of creditors, or (iv)
consent to the institution of, or fail to contest in a timely and
appropriate manner, any proceeding or petition with respect
to it described in clause (a) of this definition, or (v)
commence a voluntary proceeding under any Insolvency
Law, or file a voluntary petition seeking liquidation,
reorganization, an arrangement with creditors or an order for
relief under any Insolvency Law, or (vi) file an answer
admitting the material allegations of a petition filed against it
in any proceeding referred to in the foregoing subclauses (i)
through (v), inclusive, of this clause (b), or (vii) take any
action for the purpose of effecting any of the foregoing; or (c)
(i) all or a substantial part of the Collateral (other than the
Equity Interests) shall be sold or otherwise disposed of in a
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Draft TIFIA Loan Term Sheet Template as of 9/11/08
public or private sale or disposition pursuant to a foreclosure
of the Liens thereon securing the Senior Obligations, or (ii)
all or a substantial part of the Collateral (other than the Equity
Interests) shall be transferred pursuant to a sale or disposition
of such Collateral in lieu of foreclosure; or (d) (i) all or a
substantial part of the Equity Interests shall be sold or
otherwise disposed of in a public or private sale or disposition
pursuant to a foreclosure of the Liens thereon securing the
Senior Obligations, or (ii) all or a substantial part of the
Equity Interests shall be transferred pursuant to a sale or
disposition of such Collateral in lieu of foreclosure, if in
either such case such action or exercise of rights or remedies
results in any release or impairment of the Liens of the
Collateral Agent in the Collateral (other than the Equity
Interests) granted for the benefit of the TIFIA Lender or (e)
the Collateral Agent shall transfer, pursuant to directions
issued by the Administrative Agent, funds or deposit in any
of the Project Accounts upon the occurrence and during the
continuation of an Event of Default under the Senior Loan
Documents for application to the prepayment or repayment of
any principal amount of the Senior Obligations pursuant to
the Collateral Agency Agreement or otherwise (other than
any transfer from any Project Account to another Project
Account and any disposition of funds pursuant to and in
accordance with the Collateral Agency Agreement).
REQUIRED RESERVE FUNDS The TIFIA Lender may require a Debt Service Reserve
Account, a Major Maintenance Reserve Account, a rate
stabilization fund and other reserves depending on the
specific requirements of the Project.
SUBSTANTIAL The Substantial Completion Date for the Project is the date
COMPLETION DATE on which [applicable project segment] is open to tolled
vehicular or passenger traffic.
TIFIA DEBT SERVICE Repayment of the TIFIA Loan shall be structured as follows: ∗
1. Capitalized Interest Period - deferred interest and
principal payments from the Effective Date to the fifth
anniversary of the Substantial Completion Date.
2. Interest Only Period – mandatory interest payments from
end of Capitalized Interest Period to the end of the 10th
consecutive Payment Period. Principal of the TIFIA
Loan may be deferred during this period.
3. Fixed Level Payment Period – mandatory fixed level
payments of principal of and interest on the outstanding
∗
May be modified depending on structure of TIFIA Loan and Project cash flows.
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Draft TIFIA Loan Term Sheet Template as of 9/11/08
balance of the TIFIA Loan from the end of the interest
only period to Final Maturity.
CONDITIONS PRECEDENT In addition to the Conditions Precedent set forth in Section 13
of the Template Loan Agreement attached hereto as
Attachment 2, the TIFIA Loan Agreement shall not become
effective and the TIFIA Lender shall have no obligation to
disburse any loan proceeds to the Borrower until each of the
following additional conditions precedent shall have been
satisfied:
[To be determined after completion of due diligence review.]
REPRESENTATIONS AND
WARRANTIES OF BORROWER In addition to the Representations and Warranties of the
Borrower set forth in Section 14 of the Template Loan
Agreement attached hereto as Attachment 2, the TIFIA Loan
Agreement shall not become effective and the TIFIA Lender
shall have no obligation to disburse any loan proceeds to the
Borrower unless the Borrower shall agree to represent and
warrant that as of the date of execution of the TIFIA Loan
Agreement and as of each date on which any disbursement of
the TIFIA Loan is made:
[To be determined after completion of due diligence review.]
RESTRICTED PAYMENTS
(I.E. PAYMENTS TO EQUITY
FROM SURPLUS FUNDS) There shall be no distribution of any kind of surplus funds to
the Borrower or any Equity Sponsor prior to Substantial
Completion of the Project.
After Substantial Completion, there shall be no distribution of
any kind of surplus funds to the Borrower or any Equity
Sponsor unless and until (i) payment of TIFIA Debt Service
is current and (ii) the Total Debt Service Coverage Ratio is
equal to at least 1.20 for the preceding Calculation Period and
is projected to be at least 1.20 in the next Calculation Period.
PROJECT EQUITY The Equity Sponsors that are funding equity commitments
shall provide binding obligations for the Equity Contribution
on the Effective Date.
A standby letter of credit or equivalent support acceptable to
the TIFIA Lender shall be required for equity commitments
to be made subsequent to the Effective Date.
NEGATIVE AMORTIZATION
OF TIFIA LOAN On the Effective Date, the Base Case Financial Plan shall not
reflect amortization of Senior Indebtedness until all currently
accruing TIFIA interest is paid.
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NET CASH FLOW Net Cash Flow, for any period, shall mean an amount equal to
(i) aggregate Project Revenues for such period less the sum of
(ii) the Operations and Maintenance Expenses, Major
Maintenance Costs, all Capital Expenditures and deposits to
the Major Maintenance Reserve Account for such period.
RATE COVENANT Rates and charges shall be set such that Net Cash Flow in any
year will produce (i) a Senior Debt Service Coverage Ratio at
least equal to 1.25 in such year and (ii) a Total Debt Service
Coverage Ratio at least equal to 1.10 in such year.
The TIFIA Lender shall require a remedial plan if Net Cash
Flow is inadequate to comply with the Rate Coverage Test.
TOTAL DEBT SERVICE
COVERAGE RATIO Total Debt Service Coverage Ratio shall mean, for the period
specified, the ratio of Net Cash Flow to Senior Debt Service
and TIFIA Debt Service.
PREPAYMENT TIFIA Loan may be prepaid in whole or in part (and, if in
part, the principal installments and amounts thereof to be
prepaid shall be determined by the Borrower; provided,
however, that such prepayments shall be in the principal
amounts of $1,000,000 or any integral multiple thereof), at
any time or from time to time, without penalty or premium,
by paying to the TIFIA Lender such principal amount of the
TIFIA Loan to be prepaid, together with the unpaid interest
accrued on the amount of principal so prepaid to the date of
such prepayment.
Accelerated prepayment from excess revenues may be
required by the TIFIA Lender in the event the TIFIA Loan is
not repaid on a fixed level basis.
ADDITIONAL SENIOR DEBT Additional indebtedness on a parity with the Initial Senior
Obligations may be incurred as described below, provided no
Event of Default under the Senior Loan Agreement or the
TIFIA Loan Agreement has occurred or is occurring. Except
for additional indebtedness for the purpose of Project
completion, an investment grade rating is required and certain
coverage tests must be met.
1. To complete the Project, provided the Borrower certifies
to the TIFIA Lender and the Independent Engineer
certifies that the additional investment is necessary for
project completion and the requested amount is sufficient
for project completion. However, the aggregate amount
may not, without the prior written consent of the TIFIA
Lender, exceed 5% of the maximum principal amount of
the Initial Senior Obligations.
2. To refurbish, upgrade, modify, expand or add to the
Project is allowed, provided such debt has an investment
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Draft TIFIA Loan Term Sheet Template as of 9/11/08
grade rating and the borrower certifies to the TIFIA
Lender, and the Independent Engineer confirms, that (i)
there will be no fundamental change in the use of the
Project; (ii) the proceeds of such Additional Senior
Obligations, together with other funds available, shall be
sufficient for the proposed purpose; and (iii) either (a) the
additional investment is not expected to have a Material
Adverse Effect, or (b) the Total Debt Service Coverage
Ratio for each Calculation Period during the term of the
Additional Senior Obligations and the TIFIA Loan is not
less than 1.15 (based on a certified revenue forecast
prepared by the Traffic Consultant).
3. To refinance the Senior Obligations for savings so long
as (i) the Additional Senior Obligations have an
Investment Grade Rating, (ii) the net proceeds (after
deducting any deposits required to satisfy the Debt
Service Reserve Required Balance and costs of issuance
not to exceed 2% of the principal amount of such
Additional Senior Obligations) do not exceed the
principal amount outstanding and being refinanced of the
Senior Loan and (iii) Senior Debt Service, after the
incurrence of such Additional Senior Obligations, in each
year for the remaining term of the TIFIA Loan is less
than Senior Debt Service forecast for each year in the
Base Case Projection on the Effective Date.
4. Other Additional Senior Obligations to add to, refinance
or replace the existing Senior Obligations for purposes
not covered in 1-3 above, so long as (i) at least fifty
percent of the net proceeds (after repayment of any
outstanding Senior Obligations refinanced with such
Additional Senior Obligations and after any deposits
required to satisfy the Debt Service Reserve Required
Balance and costs of issuance not to exceed 2% of the
principal amount of such Additional Senior Obligations)
of each such Additional Senior Obligations is used to
prepay the TIFIA Loan; (ii) the Additional Senior
Obligations have an Investment Grade Rating; and (iii)
the Total Debt Service Coverage Ratio, after giving effect
to such Additional Senior Obligations, is 1.25 or more for
each year of the remaining term of the TIFIA Loan
(based on actual revenues for the prior 12 month period
and a revenue forecast certified by the Traffic
Consultant).
Subject to the above provisions, the remaining balance of
such net proceeds of any such Additional Senior
Obligations may, at the option of the Borrower, be
distributed to the Equity Sponsors.
PERMITTED INVESTMENTS Permitted Investments shall include those listed in the
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Draft TIFIA Loan Term Sheet Template as of 9/11/08
Template Loan Agreement and such additional investments
as shall conform with Nationally Recognized Rating Agency
guidelines.
Amounts on deposit in any Project Account during the period
on or before one year after the Substantial Completion Date
and amounts on deposit in the Debt Service Reserve Account
and other reserves shall be held uninvested or invested in
Permitted Investments; provided, however, that in no event
shall this restriction apply to amounts on deposit in any
operating reserve account.
HEDGING Qualified Hedge must be in place at all times while Senior
Loan bears interest at Variable Interest Rate.
Initial Qualified Hedge must terminate not less than stated
maturity date of Initial Senior Obligations and must have
notional amount not less than 98% of the principal amount of
Senior Obligations projected to be Outstanding.
Must always have a Qualified Hedge with notional amount
not less than 98% of principal amount of Senior Obligations
projected to be Outstanding and (x) at least 75% of notional
amount must have termination date not earlier than final
maturity of TIFIA Loan and (y) the balance must be for at
least one year.
Must be, together with Bank Lending Margin, less than or
equal to the Loan Underwriting Rate.
TIFIA consent required for process for selecting Subsequent
Qualified Hedges and third party fair price certificate
required.
Hedge Acquisition Account required for Subsequent
Qualified Hedges.
TIFIA DISBURSEMENTS Disbursements shall be made monthly to the Borrower to
reimburse Eligible Project Costs incurred in connection with
the Project pursuant to requisition procedures set forth in the
TIFIA Loan Agreement and the Borrower’s compliance with
disbursement conditions. All disbursement requests must be
received by the TIFIA Lender on or before the first Business
Day of a calendar month in order to obtain a disbursement by
the fifteenth day of such calendar month or if either such day
is not a Business Day, the next succeeding Business Day. In
no event shall disbursements be made more than once each
month.
The Borrower shall provide an annual, cumulative schedule
of projected disbursements prior to the Effective Date, such
schedule to be included in the TIFIA Loan Agreement. The
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Draft TIFIA Loan Term Sheet Template as of 9/11/08
Borrower may modify such schedule upon written notice to
the TIFIA Lender.
Monthly disbursements shall be on a pro rata basis with
disbursements of the proceeds of the Senior Obligations,
unless otherwise agreed to by the TIFIA Lender and
Borrower.
EVENTS OF DEFAULT AND Events of Default under the TIFIA Loan Agreement
REMEDIES shall include, but not be limited to, the following:
1. The Borrower shall fail to pay any principal amount of or
interest on the TIFIA Loan when and as the payment
thereof shall be required under the TIFIA Loan
Agreement or the Note or on the Final Maturity Date
(each a “Payment Default”).
2. Any of the Borrower’s representations, warranties or
certifications under the TIFIA Loan Agreement, the
Senior Loan Agreement, or other related Agreement(s) is
materially false or misleading, or the Borrower fails to
comply with any covenants or agreements under the
TIFIA Loan Agreement or the Senior Loan Agreement,
in each case after a permitted 30 day cure period
provided, however, that if it is not possible to correct
such breach within such 30-day period, it shall not
constitute an Event of Default if corrective action is
instituted by the Borrower within such period and
diligently pursued until such breach is corrected.
3. The occurrence of a “Development Default” under the
Concession Agreement.
4. An acceleration occurs with respect to the Senior
Obligations or any other indebtedness of the Borrower
that is senior to or on a parity with the TIFIA Loan.
5. The occurrence of a material default by the Borrower
under any other documents executed in connection with
the Project and the occurrence thereof shall cause a
material adverse effect on the Borrower’s ability to
comply with its obligations under the TIFIA Loan
Agreement subject to an appropriate cure period to be
determined in the TIFIA Loan Agreement.
6. A Bankruptcy Related Event occurs.
7. The Project shall be abandoned, or the operation of the
Project shall cease for an extended period (other than for
force majeure or other reasons covered by insurance).
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8. A judgment in excess of $1 million and not otherwise
covered by insurance is rendered against the Borrower
and remains undischarged for 30 days.
9. A Change of Control shall have occurred.
10. Borrower fails to maintain its existence as a
____________.
11. Any Equity Contribution shall fail to be made when due
as required by [Equity Contribution Agreement].
12. The Concession Agreement expires or terminates or for
any reason ceases to be in full force and effect.
Upon an Event of Default under the TIFIA Loan Agreement,
the TIFIA Lender may take any one or more of the following
actions, at its sole option and discretion:
1. For a Development Default, all obligations of the TIFIA
Lender to make disbursements are immediately deemed
terminated.
2. For failure to make an Equity Contribution, the TIFIA
Lender may direct the Collateral Agent to draw on any
line of credit securing such obligation.
3. For a Bankruptcy Related Event, all obligations of the
TIFIA Lender to make disbursements are immediately
deemed terminated and all amounts due under the TIFIA
Loan Agreement, the Note and other TIFIA loan
documents shall automatically become due and payable.
4. Whenever any Event of Default shall have occurred and
be continuing, the TIFIA Lender (a) may institute any
actions or proceedings at law or in equity for the
collection of any sums due and unpaid under the TIFIA
Loan Agreement, the Note or the other TIFIA Loan
documents, (b) may prosecute any judgment or final
decree against the Borrower, (c) shall have all the rights
and remedies of a secured creditor under the UCC and (d)
may take whatever action by law or in equity as may
appear necessary or desirable to collect the amounts
payable by the Borrower, then due and thereafter to
become due, or to enforce performance and observance
of any obligation, agreement or covenant of the
Borrower, including termination of the TIFIA Loan
Agreement.
5. Whenever any Event of Default shall have occurred and
be continuing, the TIFIA Lender may suspend or debar
the Borrower from further participation in any
Government program administered by the TIFIA Lender
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and to notify other departments and agencies of such
default.
6. No action pursuant to an Event of Default shall relieve
the Borrower from its obligations pursuant to the TIFIA
Loan Agreement, all of which shall survive any such
action.
INDEMNIFICATION The Borrower shall indemnify and hold the TIFIA Lender
harmless from and against any and all claims by reason of the
execution and delivery of the TIFIA Loan Agreement and
related documents, except as may result from Lender’s gross
negligence or willful misconduct or failure to honor the terms
of the TIFIA Loan Agreement.
ASSIGNABILITY AND SALE The Borrower may have the right to sell or assign its rights in
and to the Project, the Concession Agreement and any
subsequent lease of the Project as well as its rights and
obligations under this Term Sheet and the TIFIA Loan
Agreement provided such sale or assignment in and of itself
is not expected to result in any material change in the amount
of revenues projected to be received from the operation of the
Project and is upon terms and conditions which are
acceptable to the TIFIA Lender in its sole discretion and
subject to such additional terms and conditions as the TIFIA
Lender may require.
SALE OF TIFIA LOAN One year after the Substantial Completion Date, the TIFIA
Lender may sell the TIFIA Loan or any portion thereof to
another entity or offer the TIFIA Loan into the capital
markets. In making such sale or offering of the TIFIA Loan
the TIFIA Lender shall not change the original terms and
conditions of the TIFIA Loan or the Intercreditor Agreement
without the prior written consent of the Borrower. The TIFIA
Lender shall provide at least sixty (60) days notice to the
Borrower of any intention to sell or offer the TIFIA Loan.
The TIFIA Lender and the Borrower agree that for so long as
any Senior Loans remain outstanding, the provisions in the
TIFIA Loan Agreement which provide that the TIFIA Loan
will be deemed to be and will automatically be on parity with
the Senior Loans upon a Bankruptcy Related Event shall be
of no force or effect following the sale of the TIFIA Loan to
any third party other than for a sale made to a U.S. federal
government agency or instrumentality, in which event, the
U.S. federal government shall have the same benefits with
respect to a Bankruptcy Related Event as the TIFIA Lender.
INFORMATION AND
REPORTING OBLIGATIONS The TIFIA Loan Agreement shall set forth the Borrower’s
information and reporting obligations.
The TIFIA Lender shall also be provided with such
information as is required, from time to time, to be provided
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to the Senior Lender pursuant to the Senior Loan Agreement
or as is provided to the rating agencies.
DOLLARS All references to dollar amounts in this Term Sheet are
references to United States dollars.
FEES AND EXPENSES The Borrower shall be responsible for paying to the TIFIA
Lender the following fees and expenses:
1. Commencing in Federal Fiscal Year (FFY) [____] and
continuing thereafter each year throughout the term of the
TIFIA Loan Agreement, the Borrower shall pay to the
TIFIA Lender a loan servicing fee on or before the [insert
date]. The TIFIA Lender shall establish the amount of
this annual fee, and the Servicer shall notify the Borrower
of the amount, at least 30 days before payment is due.
In establishing the amount of the fee, the TIFIA Lender
will adjust the previous year’s base amount utilizing the
Consumer Price Index for All Urban Consumers (CPI-U)
for the U.S. City Average for All Items, 1982-84=100, or
its successor(s), published by the Bureau of Labor
Statistics, or its successor(s). For the FFY [____]
calculation, the TIFIA Lender will use the FFY [____]
base amount of $[______], which applies to other TIFIA
borrowers, as the previous year’s base amount. The
TIFIA Lender will calculate the percentage change in the
CPI-U, before seasonal adjustment, from [_________] of
the previous year to [_________] of the current year and
will then adjust the previous year’s base amount in
proportion to the CPI percentage change. To calculate
the amount of the fee, the TIFIA Lender shall round the
current year’s base amount using increments of $500.
Results with the ending integers between 250-499 or
between 750-999 shall be rounded upward, and results
with the ending integers between 001-249 or between
501-749 shall be rounded downward. The CPI
adjustments in the following years shall begin with the
base amount, not the rounded fee.
2. The Borrower agrees, whether or not the transactions
hereby contemplated shall be consummated, to reimburse
the TIFIA Lender on demand from time to time on and
after the date hereof for any and all reasonable fees, costs,
charges and expenses actually incurred by it (including
the reasonable fees, costs and expenses of counsel and
other advisors) in connection with the negotiation,
preparation, execution, delivery and performance of the
TIFIA Loan Agreement and the other Related Documents
and the transactions hereby and thereby contemplated,
including without limitation, reasonable attorney’s,
engineer’s, and planning fees and professional costs,
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Draft TIFIA Loan Term Sheet Template as of 9/11/08
including all such fees, costs and expenses actually
incurred as a result of or in connection with the
enforcement of or attempt to enforce any provision of the
TIFIA Loan Agreement or any of the other Related
Documents; any amendment or requested amendment of,
or waiver or consent or requested waiver or consent
under or with respect to, the TIFIA Loan Agreement or
any of the other Related Documents, or advice in
connection with the administration of the TIFIA Loan
Agreement or any of the other Related Documents or the
rights of the TIFIA Lender thereunder; and any work-out,
restructuring or similar arrangement of the obligations of
the Borrower under the TIFIA Loan Agreement or the
other Related Documents during the pendency of one or
more Events of Default.
3. The obligations of the Borrower under the TIFIA Loan
Agreement shall survive the payment or prepayment in
full or transfer of the Note, the enforcement of any
provision of the TIFIA Loan Agreement or the other
Related Documents, any such amendments, waivers or
consents, any Event of Default, and any such workout,
restructuring or similar arrangement.
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