SAMPLE FINANCING COMMITMENT LETTER
Our proposed structure will be an off-balance sheet operating lease with a 10, 15, or a 20-year term. The term "Corvus" shall refer to Corvus International or Corvus International's Designee. The transaction will proceed as follows:
1. The Purchase Price. The total purchase price (the Purchase Price) for the Property will be approximately $_____________________ (U.S. dollars) including our carrying costs during the Construction Period (if applicable). The Purchase Price will not exceed the projected fair market value of the property, as determined by appraisal.
2. Funding of the Purchase Price. On the Closing Date, as defined in paragraph 10, Corvus or our Designee will pay to the Lessee an amount equal to (a) the land acquisition cost and (b) construction costs (inclusive of "soft" costs) that have been incurred by the Lessee prior to the Closing Date. The balance of the Purchase Price will be deposited in escrow and disbursed as needed to pay the cost of construction as it progresses, including the Corvus' carrying costs during the Construction Period. The Lessee will be entitled to all interest earned on the funds while in escrow. To the extent that the Purchase Price exceeds the total project costs, the Lessee will retain the construction savings.
The Rent set forth above is based upon an initial review of the Property and the financial condition of the Lessee and upon Corvus' estimate of capital market conditions as of the date of this Commitment Letter. The final Rent terms will be determined based upon (i) the final Purchase Price; (ii) the results of Corvus' due diligence investigations; and (iii) actual capital market conditions as of the Closing Date.
3. The Lessee's Financial Condition. It is a condition of this transaction and the Establishment of the final Rent terms and the Purchase Price that the rating on the Lessee's senior debt on the Closing Date is not less than Standard and Poor's ________ rating (or equivalent), and there has been no material, adverse changes in the financial condition of the Lessee from the date hereof to the Closing Date.
4. The Lease and Other Documentation. The Purchase of the Property by the Corvus will be subject to agreement between Corvus, and Tenant on the Lease and other appropriate legal documentation required in order to consummate this transaction.
The Lease will be in the form of a bondable net lease meeting the requirements of:
(a) the NAIC for a bond lease and
(b) FASB Nos.13 and 98 for accounting treatment as an operating lease.
5. Due Diligence. The purchase of the Property will be subject to Corvus' approval, in its sole discretion, of the due diligence review of the Lessee and the Property. Corvus will commence the due diligence review promptly after the acceptance of this Commitment Letter by the Tenant. In order to complete the due diligence review in a timely fashion, Corvus will require prompt delivery from the Lessee of the items set forth in Schedule A attached hereto. The due diligence is expected to be completed no later than 45 days after receipt by Corvus of all of the items in the attached Schedule A.
6. Expenses. The Lessee agrees to pay all reasonable out-of-pocket expenses incurred in connection with this transaction. These expenses will include, without limitation, and whether or not this transaction is consummated, legal fees and expenses incurred by Corvus, appraisal and engineering fees, title insurance premiums, filing and recording costs, costs of surveys and fees and costs of environmental consultants. The Lessee may elect to have such costs, fees, and premiums capitalized and added to the Purchase Price, provided the appraised value of the Property supports such capitalization. We have included an allowance in our budget of $______________ to cover most of the above costs.
7. Closing Date. The Closing Date of this transaction will be within 15 days after completion of the Due Diligence period.
8. Other Offers. So long as this Commitment Letter is in effect, the Lessee will not solicit or accept any other offers for the sale or financing of the Property.
9. Termination Right. If this transaction is not closed within 15 days after completion of the Due Diligence period for reasons other than Lessee's nonperformance, the Lessee may terminate this Commitment Letter within 5 days written notice to Corvus. Upon such Termination, the obligations of the Lessee to Corvus hereunder will expire, except as set forth in Paragraph 9. |