Exhibit 10.23
EXECUTION COPY
AMENDED AND RESTATED CREDIT AGREEMENT
dated as of
August 19, 1996
among
SC REALTY INCORPORATED,
as Borrower
THE FINANCIAL INSTITUTIONS PARTY HERETO AND THEIR ASSIGNEES
UNDER SECTION 9.8. HEREOF,
as Lenders
and
XXXXX FARGO REALTY ADVISORS FUNDING, INCORPORATED,
as Agent
TABLE OF CONTENTS
ARTICLE I. DEFINITIONS..................................................... 1
SECTION 1.1. Definitions.............................................. 1
SECTION 1.2. Accounting Terms and Determinations; Time References..... 17
SECTION 1.3. Subsidiaries............................................. 17
SECTION 1.4. Interpretation Generally................................. 17
ARTICLE II. CREDIT FACILITY................................................ 18
SECTION 2.1. Making of Revolving Loans................................ 18
SECTION 2.2. Requests for Revolving Loans............................. 18
SECTION 2.3. Funding.................................................. 19
SECTION 2.4. Continuation............................................. 19
SECTION 2.5. Conversion............................................... 20
SECTION 2.6. Interest Rate............................................ 20
SECTION 2.7. Special Provisions for LIBOR Loans....................... 20
SECTION 2.8. Capital Adequacy......................................... 23
SECTION 2.9. Repayment of Loans....................................... 23
SECTION 2.10. Voluntary Reductions of the Revolving Commitment........ 25
SECTION 2.11. Extension of Revolving Credit Termination Date.......... 25
SECTION 2.12. Term Loan Conversion.................................... 27
SECTION 2.13. Notes................................................... 27
ARTICLE III. GENERAL LOAN PROVISIONS....................................... 27
SECTION 3.1. Fees..................................................... 27
SECTION 3.2. Computation of Interest and Fees......................... 28
SECTION 3.3. Pro Rata Treatment....................................... 28
SECTION 3.4. Sharing of Payments, Etc................................. 28
SECTION 3.5. Defaulting Lenders....................................... 29
SECTION 3.6. Purchase of Defaulting Lender's Pro Rata Share........... 30
SECTION 3.7. Usury.................................................... 30
SECTION 3.8. Agreement Regarding Interest and Charges................. 31
SECTION 3.9. Statements of Account.................................... 31
SECTION 3.10. Agent's Reliance........................................ 31
SECTION 3.11. Liens on Collateral..................................... 31
SECTION 3.12. Option to Replace Lenders............................... 32
SECTION 3.13. Foreign Lenders......................................... 32
ARTICLE IV. CONDITIONS..................................................... 33
SECTION 4.1. Effectiveness............................................ 33
SECTION 4.2. Revolving Loans.......................................... 34
SECTION 4.3. Conditions to Conversion to Term Loan.................... 35
SECTION 4.4. Conditions as Covenants.................................. 35
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ARTICLE V. REPRESENTATIONS AND WARRANTIES................................. 36
SECTION 5.1. Existence and Power..................................... 36
SECTION 5.2. Ownership Structure..................................... 36
SECTION 5.3. Authorization of Agreement, Notes, Loan
Documents and Borrowings......................................... 36
SECTION 5.4. Compliance of Agreement, Notes, Loan
Documents and Borrowing with Laws, etc........................... 36
SECTION 5.5. Compliance with Law; Governmental Approvals............. 37
SECTION 5.6. Indebtedness and Guarantees............................. 37
SECTION 5.7. Transactions with Affiliates............................ 37
SECTION 5.8. Absence of Defaults..................................... 37
SECTION 5.9. Financial Information................................... 37
SECTION 5.10. Litigation............................................. 38
SECTION 5.11. ERISA.................................................. 38
SECTION 5.12. Environmental Matters.................................. 38
SECTION 5.13. Taxes.................................................. 38
SECTION 5.14. Other Related Companies................................ 39
SECTION 5.15. Not an Investment Company.............................. 39
SECTION 5.16. Full Disclosure........................................ 39
SECTION 5.17. Insurance.............................................. 39
SECTION 5.18. Not Plan Assets........................................ 39
SECTION 5.19. Sole Shareholder....................................... 39
SECTION 5.20. Liens.................................................. 40
SECTION 5.21. Pledged Shares......................................... 40
SECTION 5.22. Assets................................................. 40
SECTION 5.23. Business Purposes and Objects.......................... 40
SECTION 5.24. Separateness Representations........................... 41
SECTION 5.25. Solvency............................................... 41
ARTICLE VI. COVENANTS..................................................... 41
SECTION 6.1. Information............................................. 41
SECTION 6.2. Payment of Obligations.................................. 44
SECTION 6.3. Maintenance of Property; Insurance...................... 44
SECTION 6.4. Conduct of Business and Maintenance of Existence........ 45
SECTION 6.5. Compliance with Laws.................................... 45
SECTION 6.6. Inspection of Property, Books and Records............... 45
SECTION 6.7. Accounts Payable; Indebtedness.......................... 45
SECTION 6.8. Consolidations, Mergers and Sales of Assets............. 46
SECTION 6.9. Use of Proceeds......................................... 46
SECTION 6.10. ERISA.................................................. 46
SECTION 6.11. Negative Pledge........................................ 46
SECTION 6.12. Restricted Payments; and Agreements with Affiliates.... 46
SECTION 6.13. ERISA Exemptions....................................... 47
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SECTION 6.14. Separateness Covenant................................... 47
SECTION 6.15. Independent Director.................................... 48
SECTION 6.16. Guarantor Note.......................................... 48
SECTION 6.17. Compliance with and Amendment of Charter or Bylaws...... 48
SECTION 6.18. Additional Assets....................................... 48
ARTICLE VII. DEFAULTS...................................................... 49
SECTION 7.1. Events of Default........................................ 49
SECTION 7.2. Remedies................................................. 51
ARTICLE VIII. THE AGENT.................................................... 51
SECTION 8.1. Appointment and Authorization............................ 51
SECTION 8.2. Agent and Affiliates..................................... 52
SECTION 8.3. Collateral Matters....................................... 52
SECTION 8.4. Approvals of Lenders..................................... 53
SECTION 8.5. Consultation with Experts................................ 54
SECTION 8.6. Liability of Agent....................................... 54
SECTION 8.7. Indemnification of Agent................................. 54
SECTION 8.8. Credit Decision.......................................... 55
SECTION 8.9. Successor Agent.......................................... 56
SECTION 8.10. Approvals and Other Actions by Majority Lenders......... 56
ARTICLE IX. MISCELLANEOUS.................................................. 57
SECTION 9.1. Notices.................................................. 57
SECTION 9.2. No Waivers............................................... 58
SECTION 9.3. Expenses................................................. 58
SECTION 9.4. Stamp, Intangible and Recording Taxes.................... 59
SECTION 9.5. Indemnification.......................................... 59
SECTION 9.6. Setoff................................................... 60
SECTION 9.7. Amendments............................................... 60
SECTION 9.8. Successors and Assigns................................... 62
SECTION 9.9. Governing Law............................................ 63
SECTION 9.10. Litigation.............................................. 63
SECTION 9.11. Counterparts; Integration............................... 64
SECTION 9.12. Notice of Final Agreement............................... 65
SECTION 9.13. Invalid Provisions...................................... 65
SECTION 9.14. NO NOVATION; EFFECT OF AMENDMENT AND RESTATEMENT........ 65
Annex I List of Lenders, Credit Percentages and Lending Offices
Exhibit A Form of Assignment and Acceptance Agreement
Exhibit B Form of Borrower Pledge Agreement
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Exhibit C Form of Guaranty
Exhibit D Form of Note
Exhibit E Form of Notice of Borrowing
Exhibit F Form of Notice of Continuation
Exhibit G Form of Notice of Conversion
Exhibit H Form of Subscription Agreement
Exhibit I Form of Extension Request
Exhibit J Form of Opinion of Borrower and Guarantor Counsel
Exhibit K Form of Opinion of Georgia Local Counsel
Schedule 5.2. Ownership Structure
Schedule 5.17. Insurance
Schedule 5.21.(A) Acquisitions of Security Capital Industrial Trust Shares
Schedule 5.21.(B) Acquisitions of Security Capital Atlantic Incorporated Shares
Schedule 5.21.(C) Acquisitions of Security Capital Pacific Trust Shares
Schedule 5.21.(D) Acquisitions of Security Capital U.S. Realty Shares
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AMENDED AND RESTATED CREDIT AGREEMENT
THIS AMENDED AND RESTATED CREDIT AGREEMENT (this "Agreement") dated as of
August 19, 1996 by and among SC REALTY INCORPORATED, a Nevada corporation
("Borrower"), each of the financial institutions initially a signatory hereto
together with those assignees pursuant to Section 9.8. ("Lenders"), and XXXXX
FARGO REALTY ADVISORS FUNDING, INCORPORATED, as agent for Lenders to the extent
and in the manner provided in Article VIII. below (in such capacity "Agent").
WHEREAS, the Lenders have made available to Borrower certain financial
accommodations on the terms and conditions contained in that certain Amended and
Restated Credit Agreement dated as of February 17, 1995, as amended prior to the
date hereof (the "Existing Credit Agreement") by and among Borrower, Lenders and
Agent; and
WHEREAS, Borrower, Lenders and Agent desire to amend and restate the terms
of the Existing Credit Agreement pursuant to the terms hereof.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged by the parties hereto, the parties
hereto agree that the Existing Credit Agreement is amended and restated as
follows:
ARTICLE I. DEFINITIONS
SECTION 1.1 Definitions.
The following terms, as used herein, have the following meanings:
"Affiliate" means any Person which controls, is controlled by or is under
common control with Borrower. As used herein, the term "control" means
possession, directly or indirectly, of the power to vote twenty percent (20%) or
more of any class of voting securities of a Person or to direct or otherwise
cause the direction of the management or policies of a Person, whether through
the ownership of voting securities, by contract or otherwise.
"Applicable Law" means all applicable provisions of local, state, federal
and foreign constitutions, statutes, rules, regulations, ordinances, decrees,
permits, concessions and orders of all governmental bodies and all orders and
decrees of all courts, tribunals and arbitrators.
"Applicable Margin" means the percentage set forth below corresponding to
the ratio (expressed as a percentage) of (a) the aggregate amount of the
Commitments at the time of determination in effect to (b) the Market Value of
all Traded Securities at such time:
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Ratio of Commitments to Market Value of all Applicable Margin
Traded Securities
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Greater than 35% but less than or equal to 50% 1.75%
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Greater than 25% but less than or equal to 35% 1.625%
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Less than or equal to 25% 1.5%
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The Applicable Margin shall be determined by Agent on a quarterly basis on the
first Business Day of the first full calendar month following receipt by Agent
of the financial statements required to be delivered by Borrower under Section
6.1.(a) or (b), as applicable, accompanied by the certificates required under
Sections 6.1.(c) and (d). Any adjustment to the Applicable Margin shall be
effective upon determination thereof by Agent. Initially, the Applicable Margin
shall be 1.5% until redetermined by Agent as provided above.
"Assignee" has the meaning given that term in Section 9.8.(c).
"Assignment and Acceptance Agreement" means an Assignment and Acceptance
Agreement between a Lender and an Assignee, substantially in the form of Exhibit
A.
"Assignment and Assumption Agreement" means the Assignment and Assumption
Agreement dated as of February 17, 1995 among Guarantor, Borrower, certain of
the Lenders and Agent.
"Assignment of Registration Rights" means that certain Assignment of
Registration Rights dated as of February 17, 1995 executed by Guarantor in favor
of Borrower.
"Base Rate" means the greater of (a) the rate of interest per annum
established from time to time by Xxxxx Fargo Bank, N.A., San Francisco,
California and designated as its prime rate (which rate of interest may not be
the lowest rate charged by such bank, Agent or any of Lenders on similar loans)
and (b) the Federal Funds Rate plus one-half of one percent (0.5%). Each change
in the Base Rate shall become effective without prior notice to Borrower or
Lenders automatically as of the opening of business on the date of such change
in the Base Rate.
"Base Rate Loan" means any Loan hereunder with respect to which the
interest rate is calculated by reference to the Base Rate.
"Borrower Pledge Agreement" means the Borrower Amended and Restated Pledge
Agreement dated as of the date hereof executed by Borrower in favor of Agent,
substantially in the form of Exhibit B.
"Borrowing Base" means an amount equal to the lesser of (a) 30% of the
Market Value of all Qualifying Securities and (b) 50% of the Market Value of all
Traded Securities.
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"Business Day" means (a) any day except a Saturday, Sunday or other day on
which commercial banks in Atlanta, Georgia or San Francisco, California are
authorized or required to close and (b) with reference to LIBOR Loans, any such
day on which dealings in Dollar deposits are carried out in the London interbank
market.
"Capitalized Lease Obligation" means Indebtedness represented by
obligations under a lease that is required to be capitalized for financial
reporting purposes in accordance with generally accepted accounting principles,
and the amount of such Indebtedness shall be the capitalized amount of such
obligations determined in accordance with such principles.
"Cash Flow" means, with respect to a Person for the four fiscal quarter
period ending as of the date of determination, the sum of (a) such Person's net
income for such period (exclusive of extraordinary gains and losses and any
income or loss from nonrecurring activities of such Person), (b) taxes paid or
accrued during such period, (c) interest expense paid or accrued during such
period, (d) depreciation and amortization deductions for such period (but only
to the extent, in each case, that such taxes, expenses and deductions are
reflected in the calculation of such Person's net income for such period) and
(e) the return of capital component of dividends received for such period (but
only to the extent that such component is not reflected in the calculation of
such Person's net income for such period).
"Cash Flow Available for Distribution" means, with respect to a Person for
the four fiscal quarter period ending as of the date of determination, the sum
of (a) such Person's net income for such period (exclusive of extraordinary
gains and losses and any income or loss from nonrecurring activities of such
Person), (b) depreciation and amortization deductions for such period (but only
to the extent, in each case, that such taxes, expenses and deductions are
reflected in the calculation of such Person's net income for such period), (c)
interest expense accrued but not paid during such period and (d) the return of
capital component of dividends received for such period (but only to the extent
that such component is not reflected in the calculation of such Person's net
income for such period).
"Cash Flow to Interest Ratio" means, for any Person and for any given
period, the ratio of (a) the sum of each of the following of such Person during
such period: (i) net income, (ii) taxes paid or accrued, (iii) interest expense
paid or accrued and (iv) depreciation and amortization deductions (but only to
the extent, in each case, that such taxes, expenses and deductions are reflected
in the calculation of such Person's net income for such period) to (b) interest
expense on such Person's Indebtedness during such period, including interest on
any Indebtedness of such Person convertible into capital stock of such Person.
"Change in Control" means the transfer of beneficial ownership of the
outstanding capital stock of Guarantor such that any Person owns, directly or
indirectly, more than twenty-five percent (25%) of the capital stock of
Guarantor.
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"Collateral" means any real or personal property securing any of the
Obligations and includes all "Collateral" and "Pledged Collateral", as defined
in each Collateral Document.
"Collateral Assignment of Registration Rights" means the Amended and
Restated Collateral Assignment of Registration Rights Agreement Documents dated
as of February 17, 1995 executed by Borrower in favor of Agent.
"Collateral Documents" means the Guarantor Security Agreement, the
Borrower Pledge Agreement, the Guarantor Pledge Agreement, the Collateral
Assignment of Registration Rights and all other security agreements, financing
statements, and other loan and collateral documents creating, evidencing and
perfecting Agent's Liens in any of the Collateral.
"Commitment" means, as to a Lender, such Lender's obligation to make
Revolving Loans in an amount up to but not exceeding the amount set forth for
such Lender on Annex I as such Lender's "Initial Commitment Amount", as the same
may be reduced from time to time pursuant to Section 2.10.
"Compliance Certificate" means the certificate described in Section
6.1.(c).
"Consequential Loss" means, for any Lender with respect to (a) Borrower's
payment of all or any portion of the then-outstanding principal amount of a
LIBOR Loan on a day other than the last day of the Interest Period related
thereto or (b) any of the circumstances specified in Section 2.7.(d) upon which
a Consequential Loss may be incurred, any loss (excluding loss of anticipated
profits), cost or expense incurred by such Lender as a result of the timing of
such payment or Loan or in the redepositing, redeploying or reinvesting the
principal amount so paid or affected by the timing of such Loan or the
circumstances described in such Section, including without limitation, the sum
of (i) the interest which, but for the payment or timing of the Loan, such
Lender would have earned in respect of such principal amount, reduced, if such
Lender is able to redeposit, redeploy, or reinvest such principal amount by the
interest earned by such Lender as a result of so redepositing, redeploying or
reinvesting such principal amount and (ii) any expense or penalty incurred by
such Lender on redepositing, redeploying or reinvesting such principal amount.
"Consolidated Subsidiary" means, with respect to a Person at any date, any
Subsidiary or other entity the accounts of which would be consolidated with
those of such Person in its consolidated financial statements in accordance with
generally accepted accounting principles, if such statements were prepared as of
such date.
"Contingent Obligation" means, for any Person, any commitment, undertaking,
Guarantee or other obligation constituting a contingent liability that must be
accrued under generally accepted accounting principles.
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"Continue", "Continuation" and "Continued" each refers to the continuation
of a LIBOR Loan from one Interest Period to the next Interest Period pursuant to
Section 2.4.
"Contribution" means the capital contribution by Guarantor to Borrower
effected on February 17, 1995 of certain of Guarantor's assets, consisting of
all of Guarantor's Securities issued by Security Capital Industrial Trust,
Security Capital Atlantic Incorporated and Security Capital Pacific Trust (or
their respective predecessors) and certain registration rights associated with
such Securities.
"Convert", "Conversion" and "Converted" each refers to the conversion of a
Loan of one Type into a Loan of another Type pursuant to Section 2.5.
"Default" means any condition or event which constitutes an Event of
Default or which with the giving of notice or lapse of time or both would,
unless cured or waived, become an Event of Default.
"Defaulting Lender" has the meaning given that term in Section 3.5.
"Dollars" or "$" means the lawful currency of the United States of
America.
"Effective Date" means the date this Agreement becomes effective in
accordance with Section 4.1.
"Environmental Laws" means any and all Applicable Laws relating to the
environment and that are applicable to Borrower and its assets or properties,
the effect of the environment on human health or to emissions, discharges or
releases of pollutants, contaminants, Hazardous Substances or wastes into the
environment including, without limitation, ambient air, surface water, ground
water, or land, or otherwise relating to the manufacture, processing,
distribution, use, treatment, storage, disposal, transport or handling of
pollutants, contaminants, Hazardous Substances or wastes or the clean-up or
other remediation thereof.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended, or any successor statute.
"ERISA Group" means all members of a controlled group of corporations and
all trades or businesses (whether or not incorporated) under common control that
are treated as a single employer under Section 414 of the Internal Revenue Code.
"ERISA Plan" means any employee benefit plan subject to Title I of ERISA.
"Event of Default" means the occurrence of any of the events specified in
Section 7.1., whatever the reason for such event and whether it shall be
voluntary or involuntary or be effected by operation of law or pursuant to any
judgment or order of any court or any order, rule or regulation of any
governmental or nongovernmental body; provided that any requirement for notice
or lapse of time or any other condition has been satisfied.
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"Existing Credit Agreement" has the meaning given that term in the first
WHEREAS clause hereof.
"Extension Request" has the meaning given that term in Section 2.11.
"Federal Funds Rate" means, on any day, the rate per annum (rounded upward,
if necessary, to the nearest 1/100th of 1%) equal to the weighted average of the
rates on overnight Federal funds transactions with members of the Federal
Reserve System arranged by Federal funds brokers on such day, as published by
the Federal Reserve Bank of New York on the Business Day next succeeding such
day, provided that (a) if such day is not a Business Day, the Federal Funds Rate
for such day shall be such rate on such transactions on the next preceding
Business Day as so published on the next succeeding Business Day, and (b) if no
such rate is published on such next succeeding Business Day, the Federal Funds
Rate for such day shall be the average rate quoted to Agent on such day on such
transactions as reasonably determined by Agent.
"Foreign Lender" means any Lender organized under the laws of any
jurisdiction other than the United States of America, any State thereof or the
District of Columbia.
"Governmental Approvals" means all authorizations, consents, approvals,
licenses and exemptions of, registrations and filings with, and reports to, all
Governmental Authorities.
"Governmental Authority" means any government (or any political subdivision
or jurisdiction thereof), court, bureau, agency or other governmental authority
having jurisdiction over Guarantor, Borrower or any Subsidiary, or any of its or
their business, operations or properties.
"Guarantee" by any Person means any obligation, contingent or otherwise, of
such Person directly or indirectly guaranteeing any Indebtedness or other
obligation of any other Person and, without limiting the generality of the
foregoing, any obligation, direct or indirect, contingent or otherwise, of such
Person (a) to purchase or pay (or advance or supply funds for the purchase or
payment of) such Indebtedness or other obligation (whether arising by virtue of
partnership arrangements, by agreement to keep-well, to purchase assets, goods,
securities or services, to take-or-pay, or to maintain financial statement
conditions or otherwise) or (b) entered into for the purpose of assuring in any
other manner the obligee of such Indebtedness or other obligation of the payment
thereof or to protect such obligee against loss in respect thereof (in whole or
in part), provided that the term Guarantee shall not include endorsements for
collection or deposit in the ordinary course of business. The term "Guarantee"
used as a verb has a corresponding meaning.
"Guarantor" means Security Capital Group Incorporated, a Maryland
corporation, formerly known as Security Capital Realty Incorporated.
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"Guarantor Note" means that certain Promissory Note dated as of February
17, 1995 executed by Guarantor in favor of Borrower and in the original
principal amount of $50,000,000.
"Guarantor Pledge Agreement" means the Guarantor Pledge Agreement dated as
of February 17, 1995 executed by Guarantor in favor of Agent.
"Guarantor Security Agreement" means the Guarantor Amended and Restated
Security Agreement dated as of February 17, 1995 executed by Guarantor in favor
of Agent.
"Guaranty" means the Amended and Restated Guaranty dated as of the date
hereof executed by Guarantor in favor of Agent and Lenders, substantially in the
form of Exhibit C.
"Hazardous Substances" means any toxic, radioactive, caustic or otherwise
hazardous substance, including petroleum, its derivatives, by-products and other
hydrocarbons, or any substance having any constituent elements displaying any of
the foregoing characteristics, which if managed, disposed of, released or
discharged would require reporting, clean-up or remediation under Environmental
Laws.
"Indebtedness" of any Person means at any date, without duplication, (a)
all obligations of such Person for borrowed money, (b) all obligations of such
Person evidenced by bonds, debentures, notes or other similar debt instruments,
(c) all obligations of such Person to pay the purchase price of property or
services if such obligations are payable after the receipt of such property or
rendition of such services, except (i) accounts payable arising in the ordinary
course of business and (ii) obligations incurred in the ordinary course to pay
the purchase price of Securities so long as such obligations are paid within
customary settlement periods, (d) all Capitalized Lease Obligations of such
Person, (e) all Indebtedness secured by a Lien on any asset of such Person,
whether or not such Indebtedness is otherwise an obligation of such Person, and
(f) all Indebtedness of others Guaranteed by such Person. Notwithstanding the
foregoing, for purposes of calculating Guarantor's compliance with Sections
6.(n) through (p) of the Guaranty, accounts payable of Guarantor in excess of
$20,000,000 at any time outstanding shall be treated as Indebtedness to the
extent of such excess.
"Intangible Assets" means, with respect to any Person, the amount (to the
extent reflected in determining stockholders' equity of such Person) of (a) all
write-ups (other than write-ups resulting from foreign currency translations and
write-ups of assets of a going concern business made within twelve months after
the acquisition of such business) subsequent to December 31, 1992 in the book
value of any asset owned by such Person, and (b) all unamortized debt discount
and expense, unamortized deferred charges, goodwill, patents, trademarks,
service marks, trade names, anticipated future benefit of tax loss carry-
forwards, copyrights, organization or developmental expenses and other
intangible assets.
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"Interest Period" means with respect to any LIBOR Loan, the period
commencing on the date of the borrowing, Conversion or Continuation of such Loan
and ending on the last day of the period selected by Borrower pursuant to the
provisions below. The duration of each Interest Period shall be one, two, three
or six months, in each case Borrower may, in an appropriate Notice of Borrowing,
Notice of Continuation or Notice of Conversion, select. In no event shall an
Interest Period of a Revolving Loan extend beyond the Revolving Credit
Termination Date and in no event shall an Interest Period of any Loan extend
beyond the Termination Date. Whenever the last day of any Interest Period would
otherwise occur on a day other than a Business Day, the last day of such
Interest Period shall be extended to occur on the next succeeding Business Day;
provided, however, that if such extension would cause the last day of such
Interest Period to occur in the next following calendar month, the last day of
such Interest Period shall occur on the next preceding Business Day.
"Internal Revenue Code" means the Internal Revenue Code of 1986, as
amended, or any successor statute.
"Investment" means, with respect to a Person, the legal or beneficial
ownership by such Person of any capital stock or other equity interest in
another Person, whether or not such ownership constitutes a controlling interest
in such other Person, and shall include all Consolidated Subsidiaries of such
Person.
"Issuer" means with respect to a Security, the Person issuing such
Security.
"Lending Office" means, for each Lender and for each Type of Loan, the
office of each Lender specified for such Lender on Annex I or in its applicable
Assignment and Acceptance Agreement, and for Agent, the Lending Office of Agent
in its capacity as a Lender.
"LIBO Rate" means, with respect to each Interest Period, the average rate
of interest per annum (rounded upwards, if necessary, to the next highest 1/16th
of 1%) at which deposits in immediately available funds in Dollars are offered
to Xxxxx Fargo Bank, N.A. (at approximately 9:00 a.m., two Business Days prior
to the first day of such Interest Period) by first class banks in the interbank
Eurodollar market where the Eurodollar operations of Xxxxx Fargo Bank, N.A. are
customarily conducted, for delivery on the first day of such Interest Period,
such deposits being for a period of time equal or comparable to such Interest
Period and in an amount equal to or comparable to the principal amount of the
LIBOR Loan to which such Interest Period relates. Each determination of the
LIBO Rate by Agent shall, in absence of demonstrable error, be conclusive and
binding.
"LIBOR Loan" means any Loan hereunder with respect to which the interest
rate is calculated by reference to the LIBO Rate for a particular Interest
Period.
"Lien" as applied to the property of any Person means: (a) any mortgage,
deed to secure debt, deed of trust, pledge, lien, charge or lease constituting a
Capitalized Lease Obligation, conditional sale or other title retention
agreement, or other security interest,
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security title or encumbrance of any kind in respect of any property of such
Person, or upon the income or profits therefrom; (b) any arrangement, express or
implied, under which any property of such Person is transferred, sequestered or
otherwise identified for the purpose of subjecting the same to the payment of
Indebtedness or performance of any other obligation in priority to the payment
of the general, unsecured creditors of such Person; and (c) the filing of, or
any agreement to give, any financing statement under the Uniform Commercial Code
or its equivalent in any jurisdiction.
"Loan" means a Revolving Loan or the Term Loan.
"Loan Document" means this Agreement, each of the Notes, each of the
Collateral Documents, the Guaranty, the Guarantor Note, any agreement evidencing
the fees referred to in Section 3.1.(d) and each other document or instrument
executed and delivered by Borrower or Guarantor in connection with this
Agreement or any of the other foregoing documents.
"Majority Lenders" means, as of any date, Lenders whose combined Pro Rata
Shares equal or exceed 66-2/3%.
"Mandatory Interest" means, with respect to a Person, interest which, in
accordance with the terms of the document, instrument or agreement evidencing
the Indebtedness on which such interest accrued, cannot be accrued rather than
paid at the option of such Person without resulting in a default or event of
default in respect of such Indebtedness.
"Mandatory Interest Expense" means, with respect to a Person for the four
complete fiscal quarter period ending as of the date of determination, all
interest expense of such Person in respect of Mandatory Interest for such
period.
"Market Value" means with respect to a Qualifying Security and on the date
of determination thereof (a) if such Security is listed on the New York Stock
Exchange, the American Stock Exchange, or some other principal national
securities exchange in the United States of America, the reported last sale
price of a unit of such security regular way on a given day, or, in case no such
sale takes place on such day, the average of the reported closing bid and asked
prices regular way, in each case on the New York Stock Exchange Composite Tape,
the American Stock Exchange Composite Tape or the principal national securities
exchange in the United States of America on which the security is listed or
admitted to trading, as applicable, or, if such Security is not listed or
admitted to trading on any national securities exchange in the United States of
America, the closing sales price, or if there is no closing sales price, the
average of the closing bid and asked prices, in the over-the-counter market as
reported by the National Association of Securities Dealers Automated Quotation
System, (b) with respect to a Security listed on a principal national securities
exchange in Luxembourg, Amsterdam or other European country, the price of such
Security as reported on such exchange by the most widely recognized reporting
method customarily relied upon by financial institutions in such country and
which method is reasonably acceptable to Agent, or (c) if such Security is not
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listed on any principal national securities exchange or not so reported, the
original cost of such Security (less any write-down as a result of any
revaluation). Any determination of the "Market Value" of a Security pursuant to
this definition shall be based on the assumption that offers of such Security
are exempt from registration under the Securities Act.
"Market Value Net Worth" means, with respect to a Person on a given date,
(a) the sum of (i) the Market Value on and as of such date of all Qualifying
Securities owned by such Person, (ii) the book value of all other assets of such
Person (excluding all Intangible Assets) on and as of such date and (iii) all
cash and cash equivalents of such Person on and as of such date, minus (b) the
Total Liabilities of such Person as of such date.
"Materially Adverse Effect" means a materially adverse effect on (a) the
business, assets, liabilities, financial condition, results of operations or
business prospects of Borrower and its Consolidated Subsidiaries, or Guarantor
and its Consolidated Subsidiaries, in each case taken as a whole, (b) the
ability of Borrower or Guarantor to perform its obligations under any Loan
Document to which it is a party, (c) the validity or enforceability of any of
such Loan Documents, (d) the rights and remedies of Lenders and Agent under any
of such Loan Documents or (e) the timely payment of the principal of or interest
on the Loans or other amounts payable in connection therewith. Except with
respect to representations made or deemed made by Borrower under Article V. or
in any of the other Loan Documents to which it is a party, or by Guarantor in
the Guaranty or in any of the other Loan Documents to which it is a party, all
determinations of materiality shall be made by Agent in its reasonable judgment
unless expressly provided otherwise.
"Net Worth" means, for any Person, all amounts which would, in accordance
with generally accepted accounting principles (using a historical cost basis),
be included under stockholder's equity on the balance sheet of such Person.
"New Investment" shall mean any Person (other than an individual and other
than Security Capital Industrial Trust, Security Capital Atlantic Incorporated,
Security Capital Pacific Trust and Security Capital U.S. Realty) from or in whom
Borrower acquires any Securities after the date hereof consistent with
Borrower's business purposes and objects as stated in Section 5.23.
"Non-ERISA Plan" means any Plan subject to Section 4975 of the Internal
Revenue Code.
"Note" means a promissory note executed by Borrower, payable to the order
of a Lender, in an amount equal to such Lender's Pro Rata Share of the Revolving
Commitment and substantially in the form of Exhibit D.
"Notice of Borrowing" means a notice in the form of Exhibit E to be
delivered to Agent pursuant to Section 2.2. evidencing Borrower's request for a
Borrowing of Revolving Loans.
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"Notice of Continuation" means a notice in the form of Exhibit F to be
delivered to Agent pursuant to Section 2.4. evidencing Borrower's request for
the Continuation of a Borrowing of Revolving Loans.
"Notice of Conversion" means a notice in the form of Exhibit G to be
delivered to Agent pursuant to Section 2.5. evidencing Borrower's request for
the Conversion of a Borrowing of Revolving Loans.
"Obligations" means, individually and collectively: (a) all Loans; (b) any
and all renewals and extensions of any of the foregoing and (c) all other
indebtedness, liabilities, obligations, covenants and duties of Borrower owing
to Agent and/or Lenders of every kind, nature and description, under or in
respect of this Agreement or any of the other Loan Documents, whether direct or
indirect, absolute or contingent, due or not due, contractual or tortious,
liquidated or unliquidated, and whether or not evidenced by any promissory note.
"PBGC" means the Pension Benefit Guaranty Corporation or any entity
succeeding to any or all of its functions under ERISA.
"Permitted Liens" means (a) Liens granted to Agent to secure the
Obligations, (b) pledges or deposits made to secure payment of worker's
compensation (or to participate in any fund in connection with worker's
compensation insurance), unemployment insurance, pensions or social security
programs, (c) encumbrances consisting of zoning restrictions, easements, or
other restrictions on the use of real property, provided that such items do not
materially impair the use of such property for the purposes intended and none of
which is violated in any material respect by existing or proposed structures or
land use, (d) the following to the extent no Lien has been filed in any
jurisdiction or agreed to: (i) Liens for taxes not yet due and payable; or (ii)
Liens imposed by mandatory provisions of Applicable Law such as for
materialmen's, mechanic's, warehousemen's and other like Liens arising in the
ordinary course of business, securing payment of Indebtedness the payment of
which is not yet due, (e) Liens for taxes, assessments and governmental charges
or assessments that are being contested in good faith by appropriate proceedings
diligently conducted, and in which reserves acceptable to Agent have been
provided, (f) Liens expressly permitted under the terms of the Loan Documents,
(g) with respect to only Guarantor, Purchase Money Liens securing Indebtedness
(including Capitalized Lease Obligations) of Guarantor permitted under the terms
of Section 6.(g)(v) of the Guaranty, and (h) any extension, renewal or
replacement of the foregoing to the extent such Lien as so extended, renewed or
replaced would otherwise be permitted hereunder.
"Person" means an individual, a corporation, a partnership, a limited
liability company, an association, a trust or any other entity or organization,
including a government or political subdivision or an agency or instrumentality
thereof.
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"Plan" means at any time an employee pension benefit plan which is covered
by Title IV of ERISA or subject to the minimum funding standards under Section
412 of the Internal Revenue Code.
"Pro Rata Share" means, with respect to any Lender, the percentage
obtained by dividing (a) the amount of such Lender's Commitment by (b) the
aggregate amount of Commitments of all Lenders, or, if the Commitments shall
have been terminated, the percentage obtained by dividing (i) the aggregate
unpaid principal amount of Loans owing to such Lender by (ii) the aggregate
unpaid principal amount of all Loans.
"Public Subsidiary" means any Subsidiary whose Securities having ordinary
voting power to elect members of the board of directors or other persons
performing similar functions are listed on the New York Stock Exchange, American
Stock Exchange or some other principal national securities exchange or have
price quotations in the over-the-counter market reported by the National
Association of Securities Dealers Automated Quotation System.
"Purchase Money Lien" means, with respect to a Person, a Lien (a) granted
by such Person in assets acquired by such Person and (b) securing only the
Indebtedness (including Capitalized Lease Obligations) incurred by such Person
to acquire such assets.
"Qualifying Security" means any Security (1) the Issuer of which is
Security Capital Pacific Trust, Security Capital Atlantic Incorporated, Security
Capital Industrial Trust or Security Capital U.S. Realty and (2) which Agent
determines in its sole discretion meets all of the following conditions at the
time of determination thereof:
(a) such Security is subject to the Lien of the Borrower Pledge
Agreement, which Lien is valid, enforceable, perfected and of first priority,
subject only to Liens permitted under the Loan Documents or Liens acceptable to
Agent;
(b) all representations and warranties of Borrower in this Agreement, the
Borrower Pledge Agreement and the other Loan Documents relating in any way to
such Security are true in all material respects except to the extent such
representations or warranties specifically relate to an earlier date or such
representations or warranties become untrue by reason of events or conditions
otherwise permitted hereunder and the other Loan Documents;
(c) such Issuer (i) is a REIT; (ii) has filed with its most recently
filed (or has announced its intention to file with its initial) federal income
tax return an election to be a REIT or has made such election for a previous
taxable year, and such election has not been terminated or revoked or (iii) is a
real estate operating company or a real estate investment company;
(d) the ratio of (i) such Issuer's Indebtedness to (ii) its Net Worth
plus the amount of accumulated depreciation of such Issuer, does not exceed 1.0
to 1.0;
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(e) such Issuer's Cash Flow to Interest Ratio for its immediately
preceding four complete fiscal quarters is not less than 2.0 to 1.0;
(f) no event or condition exists which permits any holder or holders of
Indebtedness of such Issuer, any trustee or agent acting on behalf of such
holder or holders or any other Person, to accelerate the maturity of any such
Indebtedness and such Person shall not have waived its right to so accelerate
with respect to such event; and
(g) the ratio of the Indebtedness of the Real Estate Manager of such
Issuer to the Net Worth of such Real Estate Manager does not exceed 0.7 to 1.0
(for purposes of this clause (g): (i) all convertible subordinated debentures of
a Real Estate Manager shall be included in determining its Net Worth and
excluded in determining its Indebtedness, (ii) all Indebtedness owed by such
Real Estate Manager to any of its Affiliates shall be excluded in determining
its Indebtedness and (iii) with respect to Real Estate Managers that are
Affiliates of Borrower, such ratio shall be calculated on a consolidated basis
for the ultimate corporate parent of such Real Estate Managers).
"Real Estate Manager" means with respect to an Issuer of a Qualifying
Security, the Person engaged by such Issuer to advise it with respect to the
acquisition, sale, development, management and operation of real property or
interests therein owned, directly or indirectly, by such Issuer.
"Reduced Rate" has the meaning given that term in Section 3.13.
"Registration Rights Agreements" means (a)(i) that certain Second Amended
and Restated Investor Agreement dated as of July 11, 1994 by and between
Guarantor and Security Capital Pacific Trust, (ii) that certain Second
Supplemental Investment Agreement dated as of December 7, 1993 by and between
Guarantor and Security Capital Pacific Trust, (iii) that certain Third
Supplemental Investment Agreement dated as of December 6, 1994 by and between
Guarantor and Security Capital Pacific Trust, (iv) that certain Second Amended
and Restated Investor Agreement dated as of November 18, 1993 by and between
Guarantor and Security Capital Industrial Trust, (v) that certain Investor
Agreement dated as of October 28, 1993 by and between Guarantor and Security
Capital Atlantic Incorporated and (vi) that certain Investor Agreement dated as
of October 22, 1993 by and between Guarantor and Security Capital Pacific Trust,
successor by merger to Security Capital Pacific Incorporated, a Maryland
corporation and (b) any other agreement pursuant to which Borrower has the right
to demand an Issuer to register under the Securities Act the offering of any
Securities of such Issuer owned by Borrower or has any other rights relating to
any such registration.
"Regulations G, U and X" means Regulations G, U and X of the Board of
Governors of the Federal Reserve System, as in effect from time to time.
"REIT" means a Person qualifying for treatment as a "real estate
investment trust" under the Internal Revenue Code.
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"Related Company" means any of Guarantor, Borrower or any of their
respective Subsidiaries.
"Restricted Payment" means cash payment or other distributions on, or in
respect of, any class of stock of, or other equity interest in, a Person, or
other payments or transfers made in respect of the redemption, repurchase or
acquisition of such stock or equity interest, other than any distribution or
other payment payable solely in capital stock of such Person.
"Revolving Commitment" means an amount equal to $300,000,000, as such
amount may be reduced from time to time in accordance with the terms hereof.
"Revolving Credit Termination Date" means the earlier to occur of (a)
November 15, 1998, or such later date to which such date may be extended in
accordance with Section 2.11. or (b) the date on which the Revolving Loans are
converted into the Term Loan pursuant to Section 2.12.
"Revolving Loan" means a loan made by Lenders to Borrower under Section
2.1.
"Revolving Period" means the period commencing on the Effective Date and
ending on the earlier of (a) the Revolving Credit Termination Date and (b) the
date on which the Revolving Loans are converted into the Term Loan pursuant to
Section 2.12.
"Securities Act" means the Securities Act of 1933, as amended, and all
rules and regulations issued pursuant thereto.
"Security" has the meaning given that term in Article 8 of the UCC and
shall include "Securities" as defined in the Borrower Pledge Agreement and the
Guarantor Pledge Agreement, as the case may be.
"Security Capital Atlantic Incorporated" means Security Capital Atlantic
Incorporated, a Maryland corporation.
"Security Capital Group" means Security Capital Group Incorporated, a
Delaware corporation (successor to Southwest Capital Group Incorporated), which
was merged into Guarantor on January 1, 1995.
"Security Capital Industrial Trust" means Security Capital Industrial
Trust, a Maryland real estate investment trust.
"Security Capital Pacific Trust" means Security Capital Pacific Trust, a
Maryland real estate investment trust, formerly known as Property Trust of
America and into which Security Capital Pacific Incorporated, a Maryland
corporation, was merged in March, 1995.
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"Security Capital U.S. Realty" means Security Capital U.S. Realty, a
societe d'investissement a capital variable formed under the laws of the Grand
Duchy of Luxembourg.
"Shareholder's Equity" means, at any date with respect to a Person, the
Tangible Net Worth of such Person less, to the extent not otherwise deducted in
the determination thereof, the aggregate amount of Contingent Obligations of
such Person, all determined as of such date.
"Subordinated Debenture" means any of Guarantor's 12% Convertible
Subordinated Debentures due June 30, 2014.
"Subordinated Indebtedness" means Indebtedness of Guarantor incurred after
the date hereof of the types described in clauses (a) and (b) of the definition
of the term "Indebtedness" herein, which Indebtedness is evidenced by documents,
instruments or agreements containing (i) subordination terms identical to those
contained in the Subordinated Debentures or other subordination terms acceptable
to the Majority Lenders in their sole discretion and (ii), except as provided in
the next sentence, other terms and conditions which, in the Majority Lenders'
judgment, are not materially different from those of the Subordinated
Debentures. Notwithstanding the immediately preceding clause (ii), Subordinated
Indebtedness may have such interest rate terms as Guarantor may determine in its
sole discretion, so long as any such provisions providing for the mandatory
payment of interest would not require the payment of interest in respect of such
Subordinated Indebtedness and all other Indebtedness of Guarantor permitted
under Section 6.(g)(ii) and (iii) of the Guaranty (assuming Guarantor is not in
default thereof), at a weighted average fixed rate in excess of 6.0%.
"Subscriber" means a Person subscribing for shares of Guarantor's capital
stock or Subordinated Indebtedness of Guarantor issued as permitted under
Section 6.(g)(ii) or (iii) of the Guaranty, in each case pursuant to a
Subscription Agreement.
"Subscription Agreement" means a Subscription Agreement entered into by
Guarantor and a Subscriber similar to the agreement attached as Exhibit H, and
in any event in form and substance reasonably satisfactory to Agent, pursuant to
which a Subscriber agrees to purchase (a) capital stock of Guarantor or (b)
Subordinated Indebtedness of Guarantor issued as permitted under Section
6.(g)(ii) or (iii) of the Guaranty.
"Subsidiary" means any Person of which securities or other ownership
interests having ordinary voting power to elect a majority of the board of
directors or other persons performing similar functions, are at the time
directly or indirectly owned by another Person, or by one or more Subsidiaries
of such other Person or by such other Person and one or more Subsidiaries of
such other Person.
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"Tangible Net Worth" means, with respect to a Person, at any date the Net
Worth of such Person less its Intangible Assets, all determined as of such date
in accordance with generally accepted accounting principles.
"Term Loan" has the meaning given that term in Section 2.12.
"Termination Date" means the date four years after the Revolving Credit
Termination Date.
"Total Liabilities" means, as to any Person, at a particular date, all
liabilities which would, in conformity with generally accepted accounting
principles, be properly classified as a liability on the balance sheet of such
Person as at such date, and in any event shall (a) include (without duplication)
(i) all Contingent Obligations of such Person and (ii) liabilities of any
Affiliate of such Person that is not a Consolidated Subsidiary of such Person,
which liabilities such Person has Guaranteed or is otherwise obligated on a
recourse basis and (b) not include (i) any accounts payable owing to a trade
creditor and which is not evidenced by any instrument, (ii) accrued expenses,
(iii) deferred taxes on unrealized gains and (iv) declared but unpaid dividends.
"Traded Security" means a Qualifying Security which Agent determines in
its sole discretion meets all of the following conditions at the time of
determination thereof:
(a) such Qualifying Security (i) is listed on the New York Stock
Exchange, American Stock Exchange or some other principal national securities
exchange in the United States of America; (ii) has price quotations in the over-
the-counter market reported by the National Association of Securities Dealers
Automated Quotation System or (iii) or is listed on the principal national
securities exchange in Luxembourg, Amsterdam or other European country
acceptable to Agent;
(b) such Qualifying Security is not subject to any instrument, document
or agreement which in any way prohibits the sale of such Qualifying Security for
any specified period of time or otherwise (other than any agreement between
Borrower and an underwriter entered into in connection with an offering by such
underwriter of Securities of the Issuer of such Qualifying Security, in which
agreement Borrower agrees not to sell such Qualifying Security for a period
ending no later than 90 days after such offering); and
(c) the offer and sale of such Qualifying Security by Agent when
exercising any of its rights and remedies under the Borrower Pledge Agreement or
otherwise would not be subject to any registration requirements or other
restrictions under the Securities Act or other Applicable Law other than (i)
volume limitations imposed under Rule 144(e) of the Securities Act and (ii)
other restrictions related to the timing of offers and sales consented to by the
Majority Lenders in writing.
"Type" with respect to any Loan, refers to whether such Loan is a LIBOR
Loan or a Base Rate Loan.
"UCC" means the Uniform Commercial Code as in effect in the State of
Georgia.
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"Unfunded Subscription Amount" means, with respect to a Subscription
Agreement and at the time of determination thereof, the aggregate amount of
funds which Guarantor can receive from the Subscriber a party thereto upon
issuance of Guarantor's capital stock or Subordinated Indebtedness to such
Subscriber in accordance with the terms of such Subscription Agreement.
SECTION 1.2. Accounting Terms and Determinations; Time References.
Unless otherwise specified herein, all accounting terms used herein shall
be interpreted, all accounting determinations hereunder shall be made, and all
financial statements required to be delivered hereunder shall be prepared in
accordance with generally accepted accounting principles as in effect from time
to time, applied on a basis consistent (except for changes concurred in by
Borrower's independent public accountants) with the most recent audited
financial statements of Borrower delivered to Lenders; provided that, if
Borrower notifies Agent that Borrower wishes to amend any covenant in Section
6.7. or 6.12.(a) hereof, or Guarantor wishes to amend any covenant in Section
6.(g), 6.(k)(i) or 6.(n) through (p) of the Guaranty, to eliminate the effect of
any change in generally accepted accounting principles on the operation of such
covenant (or if Agent notifies Borrower or Guarantor that the Majority Lenders
wish to amend any such Section for such purpose), then the compliance by
Borrower or Guarantor, as the case may be, with such covenant shall be
determined on the basis of generally accepted accounting principles in effect
immediately before the relevant change in generally accepted accounting
principles became effective, until either such notice is withdrawn or such
covenant is amended in a manner satisfactory to Borrower or the Guarantor, as
the case may be, and the Majority Lenders. Unless otherwise indicated, all
references to time are references to San Francisco, California time.
SECTION 1.3. Subsidiaries.
Unless explicitly set forth to the contrary, a reference to "Subsidiary"
shall mean a Subsidiary of Borrower and a reference to an "Affiliate" shall mean
a reference to an Affiliate of Borrower.
SECTION 1.4. Interpretation Generally.
References in this Agreement to "Sections", "Articles", "Exhibits" and
"Schedules" are to sections, articles, exhibits and schedules herein and hereto
unless otherwise indicated. References in this Agreement or any other Loan
Document to any document, instrument or agreement (a) shall include all
exhibits, schedules and other attachments thereto, as updated from time to time,
(b) shall include all documents, instruments or agreements issued or executed in
replacement thereof, and (c) shall mean such document, instrument or agreement,
or replacement or predecessor thereto, as amended, modified or supplemented from
time to time in accordance with its terms and in effect at any given time.
Terms not otherwise defined herein and which are defined in the UCC are used
herein with the respective meanings given them in the UCC. Wherever from the
context it appears appropriate, each term stated in either the singular or
plural shall include the
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singular and plural, and pronouns stated in the masculine, feminine or neuter
gender shall include the masculine, the feminine and the neuter.
ARTICLE II. CREDIT FACILITY
SECTION 2.1. Making of Revolving Loans.
Subject to the terms and conditions set forth in this Agreement, each
Lender severally agrees to make Revolving Loans to Borrower during the period
from and including the Effective Date to but excluding the Revolving Credit
Termination Date, in an aggregate principal amount not to exceed such Lender's
Pro Rata Share of the lesser of (a) the Revolving Commitment and (b) the
Borrowing Base. Each borrowing of Revolving Loans hereunder shall be in an
aggregate principal amount of $1,000,000 and integral multiples of $500,000 in
excess of that amount (except that any such Revolving Loan may be in the
aggregate amount of the unused Commitments). Notwithstanding any other
provision of this Agreement or any other Loan Document, no Revolving Loan shall
be made to Borrower if Agent determines that the making of such Revolving Loan
would result in a violation of the margin requirements of Regulation U as
specified in 12 C.F.R. (S) 221.3(a)(1) or Regulation G as specified in 12 C.F.R.
(S) 207.3(b). Within the foregoing limits and subject to the other terms of
this Agreement, Borrower may borrow, repay and reborrow Revolving Loans. Upon
the Effective Date, all Revolving Loans under the Existing Credit Agreement
outstanding on the Effective Date shall be deemed to be Revolving Loans to
Borrower outstanding hereunder being of the same Types and Interest Periods. As
of the Effective Date, such Revolving Loans shall be allocated among the Lenders
in accordance with their Pro Rata Shares based on the amount of the Lenders'
Commitments as set forth on Annex I hereto. Each Lender agrees to make such
payments to the other Lenders and any Person who ceased to be a Lender upon the
Effective Date in such amounts as are necessary to effect such allocation. All
such payments shall be made to Agent for the account of the Person to be paid.
SECTION 2.2. Requests for Revolving Loans.
Not later than 9:00 a.m. at least one Business Day prior to a borrowing of
Base Rate Loans and not later than 10:00 a.m. at least three Business Days prior
to a borrowing of LIBOR Loans, Borrower shall deliver to Agent a Notice of
Borrowing. Each Notice of Borrowing shall specify the principal amount of the
Revolving Loan to be borrowed, the date such Revolving Loan is to be borrowed
(which must be a Business Day), the use of the proceeds of such Revolving Loan,
the Type of the requested Revolving Loan and if such Revolving Loan is to be a
LIBOR Loan, the initial Interest Period for such Revolving Loan. Each Notice of
Borrowing shall be irrevocable once given and binding on Borrower. Prior to
delivering a Notice of Borrowing, Borrower may (without specifying whether a
Revolving Loan will be a Base Rate Loan or a LIBOR Loan) request that Agent
provide Borrower with the most recent LIBO Rate available to Agent. Agent shall
provide such quoted rate to Borrower and to Lenders on the date of such request
or as soon as possible thereafter.
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SECTION 2.3. Funding.
(a) Promptly after receipt of a Notice of Borrowing under Section 2.2.,
Agent shall notify each Lender by telex or telecopy, or other similar form of
transmission of the proposed borrowing. Each Lender shall deposit an amount
equal to its Pro Rata Share of the Revolving Loan requested by Borrower with
Agent at Agent's Lending Office, in immediately available funds not later than
9:00 a.m. on the date of such proposed Revolving Loan. Upon fulfillment of all
applicable conditions set forth herein, Agent shall make available to Borrower
at Agent's Lending Office, not later than 11:00 a.m. on the date of the
requested Revolving Loan, the proceeds of such amounts received by Agent. The
failure of any Lender to deposit the amount described above with Agent shall not
relieve any other Lender of its obligations hereunder to make its Pro Rata Share
of a Revolving Loan.
(b) Unless Agent shall have been notified by any Lender that such Lender
will not make available to Agent such Lender's Pro Rata Share of a proposed
Revolving Loan, Agent may in its discretion assume that such Lender has made
such Pro Rata Share of such Revolving Loan available to Agent in accordance with
this Section and Agent may, if it chooses, in reliance upon such assumption,
make such Pro Rata Share of such Revolving Loan available to Borrower.
SECTION 2.4. Continuation.
So long as no Event of Default shall have occurred and be continuing,
Borrower may on any Business Day, with respect to any LIBOR Loan, elect to
maintain such LIBOR Loan or any portion thereof as a LIBOR Loan by selecting a
new Interest Period for such LIBOR Loan. Each new Interest Period selected
under this Section shall commence on the last day of the immediately preceding
Interest Period. Each selection of a new Interest Period shall be made by
Borrower's giving of a Notice of Continuation not later than 12:00 noon on the
third Business Day prior to the date of any such Continuation by Borrower to
Agent. Promptly after receipt of a Notice of Continuation, Agent shall notify
each Lender by telex or telecopy, or other similar form of transmission of the
proposed Continuation. Such notice by Borrower of a Continuation shall be by
telephone or telecopy, confirmed immediately in writing if by telephone, in the
form of a Notice of Continuation, specifying (a) the date of such Continuation,
(b) the LIBOR Loan and portion thereof subject to such Continuation and (c) the
duration of the selected Interest Period, all of which shall be specified in
such manner as is necessary to comply with all limitations on Loans outstanding
hereunder. Each Notice of Continuation shall be irrevocable by and binding on
Borrower once given. If Borrower shall fail to select in a timely manner a new
Interest Period for any LIBOR Loan in accordance with this Section, such Loan
will automatically, on the last day of the current Interest Period therefore,
Convert into a Base Rate Loan notwithstanding failure of Borrower to comply with
Section 2.5.
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SECTION 2.5. Conversion.
So long as no Event of Default shall have occurred and be continuing,
Borrower may on any Business Day, upon Borrower's giving of a Notice of
Conversion to Agent, Convert the entire amount of all or a portion of a Loan of
one Type into a Loan of another Type. Promptly after receipt of a Notice of
Conversion, Agent shall notify each Lender by telex or telecopy, or other
similar form of transmission of the proposed Conversion. Any Conversion of a
LIBOR Loan into a Base Rate Loan shall be made on, and only on, the last day of
an Interest Period for such LIBOR Loan. Each such Notice of Conversion shall be
given not later than 12:00 noon on the Business Day prior to the date of any
proposed Conversion into Base Rate Loans and on the third Business Day prior to
the date of any proposed Conversion into LIBOR Loans. Subject to the
restrictions specified above, each Notice of Conversion shall be by telephone or
telecopy confirmed immediately in writing if by telephone in the form of a
Notice of Conversion specifying (a) the requested date of such Conversion, (b)
the Type of Loan to be Converted, (c) the portion of such Type of Loan to be
Converted, (d) the Type of Loan such Loan is to be Converted into and (e) if
such Conversion is into a LIBOR Loan, the requested duration of the Interest
Period of such Loan. Each Notice of Conversion shall be irrevocable by and
binding on Borrower once given. Each Conversion from a Base Rate Loan to a
LIBOR Loan shall be in an aggregate amount for the Loans of all Lenders of not
less than $1,000,000 or integral multiples of $500,000 in excess of that amount.
SECTION 2.6. Interest Rate.
(a) All Loans. The unpaid principal of each Base Rate Loan shall bear
interest from the date of the making of such Loan to but not including the date
of repayment thereof at a rate per annum equal to the Base Rate in effect from
day to day. The unpaid principal of each LIBOR Loan shall bear interest from
the date of the making of such Loan to but not including the date of repayment
thereof at a rate per annum equal to the LIBO Rate plus the Applicable Margin.
(b) Default Rate. All past-due principal of, and to the extent permitted
by Applicable Law, interest on, the Loans shall bear interest until paid at the
Base Rate from time to time in effect plus four percent (4%).
SECTION 2.7. Special Provisions for LIBOR Loans.
(a) Inadequacy of LIBOR Pricing. Anything herein to the contrary
notwithstanding, if, on or prior to the determination of any LIBO Rate for any
Interest Period:
(i) Agent reasonably determines, which determination shall be
conclusive, that quotations of interest rates for the relevant deposits
referred to in the definition of LIBO Rate are not being provided in the
relevant amounts or for the relevant maturities for purposes of
determining rates of interest for LIBOR Loans as provided herein; or
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(ii) any Lender reasonably determines, which determination shall be
conclusive, and notifies Agent that the relevant rates of interest referred
to in the definition of LIBO Rate upon the basis of which the rate of
interest for LIBOR Loans for such Interest Period is to be determined are
not likely adequately to cover the cost to such Lender of making or
maintaining LIBOR Loans for such Interest Period;
then Agent shall give Borrower and each Lender prompt notice thereof and, so
long as such condition remains in effect, Lenders shall be under no obligation
to, and shall not, make additional LIBOR Loans, Continue LIBOR Loans or Convert
Base Rate Loans into LIBOR Loans and Borrower shall, on the last day of each
current Interest Period for each outstanding LIBOR Loan, either prepay such Loan
or Convert such Loan into a Base Rate Loan in accordance with Section 2.5.
(b) Number of Interest Periods. Anything herein to the contrary
notwithstanding, there shall not be outstanding at any one time more than ten
LIBOR Loans.
(c) Illegality of LIBOR Loans. If, after the date of this Agreement, the
adoption of any Applicable Law, rule or regulation, or any change therein, or
any change in the interpretation or administration thereof by any Governmental
Authority, central bank or comparable agency charged with the interpretation or
administration thereof, or compliance by any Lender with any request or
directive (whether or not having the force of law) of any such authority,
central bank or comparable agency shall make it unlawful or impossible for any
Lender to make, maintain or fund LIBOR Loans, such Lender shall forthwith give
notice thereof to Agent and Borrower. Before giving any notice pursuant to this
subsection, such Lender shall designate a different LIBOR lending office if such
designation will avoid the need for giving such notice and will not be otherwise
materially disadvantageous to any such Lender (as determined in the reasonable
judgment of such Lender). Upon receipt of such notice, Borrower shall either
(i) repay in full the then outstanding principal amount of any of such Lender's
LIBOR Loans, together with accrued interest thereon, or (ii) Convert such
Lender's LIBOR Loans to Base Rate Loans, on either (A) the last day of the then-
current Interest Period applicable to such LIBOR Loan if such Lender may
lawfully continue to maintain and fund such LIBOR Loan to such day or (B)
immediately if such Lender may not lawfully continue to fund and maintain such
LIBOR Loan to such day.
(d) Consequential Losses. Borrower shall indemnify Agent and each Lender
against any Consequential Loss incurred by Agent and each Lender as a result of
(i) any failure to fulfill, on or before the date specified for such Loan in the
applicable Notice of Borrowing, the conditions to such Loan set forth herein, or
(ii) Borrower's requesting that a Base Rate Loan not be Converted into a LIBOR
Loan on the date specified for such Conversion in a Notice of Conversion, (iii)
Borrower's requesting that a LIBOR Loan not be Continued on the date specified
for such Continuation in a Notice of Continuation or (iv) Borrower's requesting
that a LIBOR Loan not be made on the date specified for such LIBOR Loan in the
Notice of Borrowing. A certificate of Agent and each Lender
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establishing the amount due from Borrower according to the preceding sentence,
together with a description in reasonable detail of the manner in which such
amount has been calculated, shall be conclusive in the absence of demonstrable
error.
(e) Increased Costs for LIBOR Loans. If, after the date hereof, any
Governmental Authority, central bank or other comparable authority, shall at any
time impose, modify or deem applicable any reserve (including, without
limitation, any imposed by the Board of Governors of the Federal Reserve
System), special deposit or similar requirement against assets of, deposits with
or for the account of, or credit extended by, any Lender, or shall impose on any
Lender (or its eurodollar lending office) or the interbank eurodollar market any
other condition affecting its LIBOR Loans, such Lender's Note or its obligation
to make LIBOR Loans; and the result of any of the foregoing is to increase the
cost to such Lender of making or maintaining its LIBOR Loans, or to reduce the
amount of any sum received or receivable by such Lender under this Agreement, or
under such Lender's Note, by an amount reasonably deemed by such Lender to be
material, then, within five days after demand by such Lender, Borrower shall pay
to such Lender such additional amount or amounts as will compensate such Lender
for such increased cost or reduction. Such Lender will (i) notify Agent and
Borrower of any event occurring after the date of this Agreement which will
entitle such Lender to compensation pursuant to this subsection as promptly as
practicable (but in any event within 120 days) after such Lender obtains actual
knowledge of such event, and Borrower shall not be liable for any such increased
costs that accrue between the date such notification is required to be given and
the date it was actually given and (ii) use good faith and reasonable efforts to
designate a different lending office for such Lender's LIBOR Loans if such
designation will avoid the need for, or reduce the amount of, such compensation
and will not, in the reasonable opinion of such Lender, be materially
disadvantageous to such Lender (provided that any such foreign Lender shall have
no obligation to so designate a lending office located in the United States of
America). A certificate of such Lender claiming compensation under this Section
and setting forth in reasonable detail the calculation of the additional amount
or amounts to be paid to it hereunder shall be conclusive in the absence of
demonstrable error. If such Lender demands compensation under this Section,
then Borrower may at any time, upon at least three Business Days' prior notice
to such Lender, either (i) repay in full such Lender's then outstanding LIBOR
Loans, together with accrued interest thereon to the date of prepayment or (ii)
Convert such Lender's LIBOR Loans to Base Rate Loans in accordance with the
provisions of this Agreement; provided, however, that Borrower shall be liable
for any Consequential Loss arising pursuant to such actions.
(f) Effect on Base Rate Loans. If notice has been given pursuant to
Section 2.7.(a) or (c) requiring LIBOR Loans of a Lender to be repaid or
Converted, then unless and until Agent notifies Borrower that the circumstances
giving rise to such repayment no longer apply, all Loans shall be Base Rate
Loans. If Agent notifies Borrower that the circumstances giving rise to such
repayment no longer apply, Borrower may thereafter select Loans from such Lender
to be LIBOR Loans.
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(g) Payments Not at End of Interest Period. If Borrower makes any payment
of principal with respect to any LIBOR Loan of a Lender on any day other than
the last day of an Interest Period applicable to such LIBOR Loan, then Borrower
shall reimburse such Lender on demand the Consequential Loss incurred by such
Lender as a result of the timing of such payment. A certificate of such Lender
setting forth in reasonable detail the basis for the determination of the amount
of Consequential Loss shall be delivered to Borrower by Agent and shall, in the
absence of demonstrable error, be conclusive and binding. Any Conversion of a
LIBOR Loan to a Base Rate Loan on any day other than the last day of the
Interest Period for such LIBOR Loan shall be deemed a payment for purposes of
this subsection.
SECTION 2.8. Capital Adequacy.
If, after the date hereof, any Lender shall have determined that either (a)
the adoption of any law, rule, regulation or guideline of general applicability
regarding capital adequacy, or any change therein, or any change in the
interpretation or administration thereof by any Governmental Authority, central
bank or comparable agency charged with the interpretation or administration
thereof, or (b) compliance by such Lender (or any lending office of such Lender)
with any request or directive of general applicability regarding capital
adequacy (whether or not having the force of law) of any such authority, central
bank or comparable agency, has or would have the effect of reducing the rate of
return on such Lender's capital as a consequence of its or Borrower's
obligations hereunder to a level below that which such Lender could have
achieved but for such adoption, change or compliance (taking into consideration
such Lender's policies with respect to capital adequacy) by an amount reasonably
deemed by such Lender to be material, then from time to time, within ten days
after demand by such Lender, which demand shall include a calculation and a
reference to the law, rule or regulation, Borrower shall pay to such Lender such
additional amount or amounts as will adequately compensate such Lender for such
reduction. Such Lender will notify Agent and Borrower of any such determination
which will entitle such Lender to compensation pursuant to this subsection as
promptly as practicable (but in any event within 120 days) after such Lender
obtains actual knowledge of the event or condition prompting such Lender to make
such determination, and Borrower shall not be liable for any such amount or
amounts that accrue between the date such notification is required to be given
and the date it was actually given. A certificate of such Lender claiming
compensation under this Section and setting forth the additional amount of
amounts to be paid to it hereunder, together with the description of the manner
in which such amounts have been calculated, shall be conclusive in the absence
of demonstrable error. In determining such amount, such Lender may use any
reasonable averaging and attribution methods.
SECTION 2.9. Repayment of Loans.
(a) Payment of Interest. All accrued and unpaid interest on the unpaid
principal amount of each Loan shall be payable (i) monthly in arrears on the
first day of each month, commencing with the first full calendar month occurring
after the Effective
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Date, (ii) on the Revolving Credit Termination Date, (iii) on the Termination
Date and (iv) on any date on which the principal balance of such Loan is due and
payable in full.
(b) Payment of Principal of Revolving Loans. Subject to Section 2.12., the
aggregate outstanding principal balance of all Revolving Loans shall be due and
payable in full on the Revolving Credit Termination Date.
(c) Payment of Principal of Term Loan. Borrower shall repay the principal
balance of the Term Loan in consecutive quarterly installments due on the last
day of each February, May, August and November following the Revolving Credit
Termination Date until the Term Loan is paid in full. The amount of such
installments shall be as follows: (i) the first four installments shall each be
in the amount of 5.0% of the initial principal balance of the Term Loan (or if
the outstanding principal balance of the Term Loan is less than such amount on
the due date of any such installment, then in the amount of such outstanding
balance) and (ii) if after the payment of such four installments any principal
balance shall remain owing on the Term Loan, each remaining installment shall be
in the amount of 6.6675% of the initial principal balance of the Term Loan (or
if the outstanding principal balance of the Term Loan is less than such amount
on the due date of any such installment, then in the amount of such outstanding
balance). Notwithstanding the foregoing, the entire outstanding principal
balance of the Term Loan shall be due and payable in full on the Termination
Date.
(d) Optional Prepayments. Borrower may, upon at least one Business Day's
prior notice to Agent, prepay any Loan in whole at any time, or from time to
time in part in an amount equal to $500,000 or integral multiples of $100,000 in
excess of that amount. If Borrower shall prepay the principal of any LIBOR Loan
on any date other than the last day of the Interest Period applicable thereto,
Borrower shall pay the amounts, if any, due under Section 2.7.(d).
(e) Mandatory Prepayments. If at any time the aggregate outstanding
principal balance of Loans exceeds the Borrowing Base, then Borrower shall,
within fifteen days of Borrower obtaining actual knowledge of the occurrence of
such excess, notify Agent of what action Borrower intends to take to eliminate
such excess. If such excess is not eliminated within thirty days of Borrower
obtaining actual knowledge of the occurrence thereof (whether by Borrower
delivering to Agent additional Qualifying Securities under the Borrower Pledge
Agreement, by an increase in the market value of the Qualifying Securities, by
Borrower repaying an appropriate amount of Loans, or otherwise), then the entire
outstanding principal balance of all Loans shall be immediately due and payable
in full.
(f) General Provisions as to Payments. Except to the extent otherwise
provided herein, all payments of principal, interest and other amounts to be
made by Borrower under this Agreement, the Notes or any other Loan Document
shall be made in Dollars, in immediately available funds, without setoff,
deduction or counterclaim, to Agent at its Lending Office, not later than 11:00
a.m. on the date on which such payment shall become due (each such payment made
after such time on such due date to be deemed
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to have been made on the next succeeding Business Day) and shall be made in
accordance with the wiring instructions set forth for Agent on Annex I. The
parties agree that if Borrower makes any payment due hereunder after 11:00 a.m.
but before 5:00 p.m. on the date such payment is due, such late payment shall
not constitute a Default under Section 7.1.(a) but shall nevertheless for all
other purposes, including but not limited to, the calculation of interest, be
deemed to have been paid as of the next succeeding Business Day as provided in
the parenthetical phrase of the preceding sentence. Each payment received by
Agent for the account of a Lender under this Agreement or any Note shall be paid
to such Lender, by wire transfer of immediately available funds in accordance
with the wiring instructions set forth for such Lender on the Annex I attached
hereto, for the account of such Lender at the applicable Lending Office of such
Lender. In the event Agent fails to pay such amounts to such Lender within one
Business Day of receipt by Agent, Agent shall pay interest on such amount at a
rate per annum equal to the Federal Funds rate from time to time in effect. If
the due date of any payment under this Agreement or any other Loan Document
would otherwise fall on a day which is not a Business Day such date shall be
extended to the next succeeding Business Day and interest shall be payable for
the period of such extension.
SECTION 2.10. Voluntary Reductions of the Revolving Commitment.
Borrower may terminate or reduce the amount of the Revolving Commitment at
any time and from time to time without penalty or premium upon not less than
three Business Days prior notice to Agent of each such termination or reduction,
which notice shall specify the effective date thereof and the amount of any such
reduction (which in the case of any partial reduction of the Revolving
Commitment shall not be less than $1,000,000 and integral multiples of
$1,000,000 in excess of that amount) and shall be irrevocable once given and
effective only upon receipt by Agent; provided, however, that if Borrower seeks
to reduce the Revolving Commitment below $15,000,000, then the Revolving
Commitment shall be reduced to zero and except as otherwise provided herein, the
provisions of this Agreement shall terminate. The Revolving Commitment, once
reduced pursuant to this Section, may not be increased. Borrower shall pay all
interest and fees on the Revolving Loans accrued to the date of such reduction
or termination of the Revolving Commitment to Agent for the account of Lenders.
SECTION 2.11. Extension of Revolving Credit Termination Date.
(a) Borrower may request Agent and Lenders to extend the current Revolving
Credit Termination Date by successive one-year intervals by executing and
delivering to Agent at least 75 days but no more than 90 days prior to the date
one year prior to the current Revolving Credit Termination Date, a written
request in the form of Exhibit I (an "Extension Request"). Agent shall forward
to each Lender a copy of each Extension Request delivered to Agent promptly upon
receipt thereof. Borrower understands that this Section has been included in
this Agreement for Borrower's convenience in requesting an extension and
acknowledges that none of Lenders nor Agent has promised (either expressly or
impliedly), nor has any obligation or commitment whatsoever, to extend the
Revolving Credit Termination Date at any time. If all Lenders shall have
notified Agent
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on or prior to the date which is 45 days prior to the date one year prior to the
Revolving Credit Termination Date that they accept such Extension Request, the
Revolving Credit Termination Date shall be extended for one year. If any Lender
shall not have notified Agent on or prior to the date which is 45 days prior to
the date one year prior to the Revolving Credit Termination Date that it accepts
such Extension Request, the Revolving Credit Termination Date shall not be
extended. Agent shall promptly notify Borrower whether the Extension Request has
been accepted or rejected as well as which Lender or Lenders rejected Borrower's
Extension Request (each such Lender a "Rejecting Lender").
(b) Notwithstanding the preceding subsection (a), if Borrower receives
notification from Agent that an Extension Request has been rejected (a "Notice
of Rejection"), and provided that the aggregate amount of Commitments of the
Rejecting Lenders does not exceed 20% of the aggregate amount of Commitments
then outstanding, Borrower may elect, with respect to each such Rejecting
Lender, by giving written notice to Agent of any such election within 30 days
after receipt by Borrower of a Notice of Rejection, to either require such
Rejecting Lender to assign its respective Commitment to another financial
institution as contemplated in the immediately following clause (i) or to pay in
full the amount of Revolving Loans, interest and fees owing to such Rejecting
Lender and terminate such Rejecting Lender's Commitment as contemplated in the
immediately following clause (ii). If Borrower has made a timely election as
permitted by the preceding sentence, then Borrower shall take either of the
following actions as specified in such election: (i) demand that such Rejecting
Lender, and upon such demand such Rejecting Lender shall promptly, assign its
respective Commitment to another financial institution subject to and in
accordance with the provisions of Section 9.8.(c) for a purchase price equal to
such Rejecting Lender's Pro Rata Share of the aggregate principal balance of
Revolving Loans then outstanding plus any accrued but unpaid interest thereon
and accrued but unpaid fees owing to such Rejecting Lender, any such assignment
to be completed within 45 days after receipt by Borrower of a Notice of
Rejection or (ii) within 45 days after receipt by Borrower of a Notice of
Rejection, pay to such Rejecting Lender such Rejecting Lender's Pro Rata Share
of the aggregate principal balance of Revolving Loans then outstanding plus any
accrued but unpaid interest thereon and accrued but unpaid fees owing to such
Rejecting Lender, whereupon such Rejecting Lender's Commitment shall terminate,
such Rejecting Lender shall no longer be a party hereto or have any rights or
obligations hereunder or under any of the other Loan Documents and the Revolving
Commitment shall immediately and permanently be reduced by an amount equal to
the amount of such Rejecting Lender's respective Commitment. If all Rejecting
Lenders have either assigned their Commitments to other financial institutions
as contemplated by the preceding clause (i) or have been paid the amounts
specified in the preceding clause (ii), then the Borrower's Extension Request
which was initially rejected shall be deemed to have been granted and
accordingly the Revolving Credit Termination Date shall be extended by one year,
otherwise the Revolving Credit Termination Date shall not be extended. If the
aggregate amount of Commitments of the Rejecting Lenders exceeds 20% of the
aggregate amount of Commitments then outstanding, the Revolving Credit
Termination Date shall not be extended.
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SECTION 2.12. Term Loan Conversion.
Subject to the terms and conditions of this Agreement, if any Extension
Request of Borrower shall be denied, Borrower may then elect to convert on the
date one year prior to the current Revolving Credit Termination Date the
aggregate principal amount of Revolving Loans then outstanding into a term loan
owing to Lenders (the "Term Loan") provided (a) Borrower has given Agent not
less than fifteen-days' prior notice of Borrower's intention to so convert the
Revolving Loans and (b) the conditions set forth in Section 4.3. have been
satisfied as of the date one year prior to the current Revolving Credit
Termination Date. Upon the effectiveness of the conversion of the outstanding
principal balance of Revolving Loans into the Term Loan as contemplated by this
Section, Borrower shall have no right to borrow, and no Lender shall have any
obligation to make, any Revolving Loans.
SECTION 2.13. Notes.
The obligation of Borrower to repay the Loans shall, in addition to this
Agreement, be evidenced by the Notes.
ARTICLE III. GENERAL LOAN PROVISIONS
SECTION 3.1. Fees.
(a) During the period commencing January 1, 1995 to but excluding
September 30, 1996, Borrower agrees to pay Agent for the account of Lenders an
unused facility fee equal to one-eighth of one percent (0.125%) per annum of the
average daily amount by which the Revolving Commitment exceeds the aggregate
outstanding principal balance of Revolving Loans. During the period commencing
October 1, 1996 to but excluding the Revolving Credit Termination Date, Borrower
agrees to pay Agent for the account of Lenders an unused facility fee equal to
the portion of the average daily amount by which the Revolving Commitment
exceeds the aggregate outstanding principal balance of Revolving Loans set forth
below multiplied by the corresponding per annum rate applicable to that portion.
Portion of Amount by Which Revolving
Commitment Exceeds Revolving Loans Unused Fee
----------------------------------------------------------
$0 to and including $100,000,000 0.125%
----------------------------------------------------------
Greater than $100,000,000 and less 0.1875
than or equal to $200,000,000
----------------------------------------------------------
Greater than $200,000,000 0.25%
----------------------------------------------------------
Such fee shall be payable quarterly in arrears on the first day of each January,
April, July and October during the term of this Agreement and on the Revolving
Credit Termination
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Date. Borrower acknowledges that the commitment fees payable hereunder are bona
fide commitment fees and are intended as reasonable compensation to Lenders for
committing to make funds available to Borrower as described herein and for no
other purposes.
(b) If, pursuant to Section 2.11., Lenders grant an extension of the
Revolving Credit Termination Date, Borrower agrees to pay to Agent for the
account of Lenders an extension fee equal to the following percentage of the
Revolving Commitment at such time: (i) three-sixteenths of one percent (0.1875%)
for an extension of the Revolving Credit Termination Date of August 19, 1997 to
November 15, 1998 as effected by the amendment and restatement of the Existing
Credit Agreement and (ii) three-twentieths of one percent (0.15%) for extensions
of any later Revolving Credit Termination Date. Such fee shall be payable on
the date on which Lenders grant such extension.
(c) If, pursuant to Section 2.12., the outstanding balance of Revolving
Loans is converted into the Term Loan, Borrower agrees to pay to Agent for the
account of Lenders a conversion fee equal to one-quarter of one percent (0.25%)
per annum of the principal balance of the Term Loan outstanding on each date
such fee is payable. Such fee shall be payable on the first, second and third
anniversary dates of such conversion and shall be paid within 5 Business Days of
such anniversary date.
(d) Borrower agrees to pay to Agent such fees for services rendered by
Agent as shall be separately agreed upon between Borrower and Agent.
SECTION 3.2. Computation of Interest and Fees.
Interests on the Loans and all fees shall be computed on the basis of a
year of 360 days and paid for the actual number of days elapsed (including the
first day but excluding the last day of a period).
SECTION 3.3. Pro Rata Treatment.
Unless set forth to the contrary herein, (a) each borrowing of a Revolving
Loan, (b) each payment by Borrower with respect to any Loan, (c) each other
payment to be made by Borrower hereunder or under any Loan Document and (d) any
amounts received with respect to the sale, disposition, foreclosure or other
transfer of any Collateral, shall be made by, or credited to the account of,
Lenders in accordance with their respective Pro Rata Shares. Each payment of
interest on the Loans made by Borrower shall be made for the account of Lenders
pro rata in accordance with the amounts of interest due and payable to the
respective Lenders. The fees referred to in Section 3.1.(d) shall be for the
account of only Agent.
SECTION 3.4. Sharing of Payments, Etc.
Borrower agrees that, in addition to (and without limitation of) any right
of set-off, bankers' lien or counterclaim a Lender may otherwise have, each
Lender shall be entitled, at its option, to offset balances held by it for the
account of Borrower at any of such Lender's offices, in Dollars or in any other
currency, against any principal of, or interest
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on, any of such Lender's Loans hereunder (or other Obligations owing to such
Lender hereunder) which is not paid when due after the expiration of any
applicable grace periods (regardless of whether such balances are then due to
Borrower), in which case such Lender shall promptly notify Borrower, all other
Lenders and Agent thereof; provided, however, such Lender's failure to give such
notice shall not affect the validity of such offset. If a Lender shall obtain
payment of any principal of, or interest on, any Loan under this Agreement, or
shall obtain payment on any other Obligation owing by Borrower through the
exercise of any right of set-off, banker's lien or counterclaim or similar right
or otherwise or through voluntary prepayments directly to a Lender or other
payments made by Borrower to a Lender not in accordance with the terms of this
Agreement and such payment, pursuant to the immediately preceding Section,
should be distributed to Lenders in accordance with their Pro Rata Shares, such
Lender shall promptly purchase from the other Lenders participations in (or, if
and to the extent specified by such Lender, direct interests in) the Loans made
by the other Lenders or other Obligations owed to such other Lenders in such
amounts, and make such other adjustments from time to time as shall be
equitable, to the end that all Lenders shall share the benefit of such payment
(net of any expenses which may be incurred by such Lender in obtaining or
preserving such benefit) in accordance with their respective Pro Rata Shares. To
such end, all Lenders shall make appropriate adjustments among themselves (by
the resale of participations sold or otherwise) if such payment is rescinded or
must otherwise be restored. Borrower agrees that any Lender so purchasing a
participation (or direct interest) in the Loans or other Obligations owed to
such other Lenders made by other Lenders may exercise all rights of set-off,
bankers' lien, counterclaim or similar rights with respect to such participation
as fully as if such Lender were a direct holder of Loans in the amount of such
participation. Nothing contained herein shall require any Lender to exercise any
such right or shall affect the right of any Lender to exercise, and retain the
benefits of exercising, any such right with respect to any other indebtedness or
obligation of Borrower.
SECTION 3.5. Defaulting Lenders.
If for any reason any Lender (a "Defaulting Lender") shall fail or refuse
to perform its obligations under this Agreement or any other Loan Document to
which it is a party within the time period specified for performance of such
obligation or, if no time period is specified, if such failure or refusal
continues for a period of ten Business Days after notice from Agent, then, in
addition to the rights and remedies that may be available to Agent or Borrower
under this Agreement or Applicable Law, such Defaulting Lender's right to
participate in the administration of the Loans, this Agreement and the other
Loan Documents, including without limitation, any right to vote in respect of,
to consent to or to direct any action or inaction of Agent or to be taken into
account in the calculation of Majority Lenders, shall be suspended during the
pendency of such failure or refusal. If for any reason a Lender fails to make
timely payment to Agent of any amount required to be paid to Agent hereunder
(without giving effect to any notice or cure periods), in addition to other
rights and remedies which Agent or Borrower may have under the immediately
preceding provisions or otherwise, Agent shall be entitled (i) to collect
interest from such Defaulting Lender on such delinquent payment for the period
from the date on which the payment was due until the date on which the payment
is made at the Federal Funds Rate,
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(ii) to withhold or setoff and to apply in satisfaction of the defaulted payment
and any related interest, any amounts otherwise payable to such Lender under
this Agreement or any other Loan Document and (iii) to bring an action or suit
against such Lender in a court of competent jurisdiction to recover the
defaulted amount and any related interest. Any amounts received by Agent in
respect of a Defaulting Lender's Pro Rata Share of the Loans shall not be paid
to such Defaulting Lender and shall be held by Agent and either applied against
the purchase price of such Pro Rata Share of the Loans under Section 3.6. or
paid to such Defaulting Lender upon the Defaulting Lender's curing of its
default.
SECTION 3.6. Purchase of Defaulting Lender's Pro Rata Share.
(a) Any Lender who is not a Defaulting Lender shall have the right, but
not the obligation, in its sole discretion, to acquire all of a Defaulting
Lender's Pro Rata Share of the Loans. If more than one Lender exercises such
right, each such Lender shall have the right to acquire such proportion of such
Defaulting Lender's Pro Rata Share of the Loans as they may mutually agree. Upon
any such purchase of the Pro Rata Share of the Loans of a Defaulting Lender, the
Defaulting Lender's interest in the Loans and its rights hereunder (but not its
liability in respect thereof or under the Loan Documents or this Agreement to
the extent the same relate to the period prior to the effective date of the
purchase) shall terminate on the date of purchase, and the Defaulting Lender
shall promptly execute all documents reasonably requested to surrender and
transfer such interest to the purchaser thereof, including an appropriate
Assignment and Acceptance Agreement and, notwithstanding Section 9.8.(c), shall
pay to Agent an assignment fee in the amount of $6,000.
(b) The purchase price for the Pro Rata Share of the Loans of a Defaulting
Lender shall be equal to the amount of the principal balance of the Loans
outstanding and owed by Borrower to the Defaulting Lender. Prior to payment of
such purchase price to Defaulting Lender, Agent shall apply against such
purchase price any amounts payable in respect of such Pro Rata Share of the
Loans as contemplated by the last sentence of Section 3.5. The Defaulting
Lender shall be entitled to receive amounts owed to it by Borrower under the
Loan Documents which accrued prior to the date of the default by the Defaulting
Lender, to the extent the same are received by Agent from or on behalf of
Borrower. There shall be no recourse against any Lender or Agent for the
payment of such sums except to the extent of the receipt of payments from any
other party or in respect of the Loans.
SECTION 3.7. Usury.
In no event shall the amount of interest due or payable on the Loans exceed
the maximum rate of interest allowed by Applicable Law and, in the event any
such payment is paid by Borrower or received by any Lender, then such excess sum
shall be credited as a payment of principal. It is the express intent of the
parties hereto that Borrower not pay and Lenders not receive, directly or
indirectly, in any manner whatsoever, interest in excess of that which may be
lawfully paid by Borrower under Applicable Law.
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SECTION 3.8. Agreement Regarding Interest and Charges.
THE PARTIES HERETO HEREBY AGREE AND STIPULATE THAT THE ONLY CHARGE IMPOSED
UPON BORROWER FOR THE USE OF MONEY IN CONNECTION WITH THIS AGREEMENT IS AND
SHALL BE THE INTEREST DESCRIBED IN SECTION 2.6. THE PARTIES HERETO FURTHER
AGREE AND STIPULATE THAT ALL OTHER CHARGES IMPOSED BY LENDERS AND AGENT ON
BORROWER IN CONNECTION WITH THIS AGREEMENT, INCLUDING ALL AGENCY FEES, FACILITY
FEES, UNUSED FACILITY FEES, EXTENSION FEES, UNDERWRITING FEES, DEFAULT CHARGES,
LATE CHARGES, ATTORNEYS' FEES AND REIMBURSEMENT FOR COSTS AND EXPENSES PAID BY
AGENT OR ANY LENDER TO THIRD PARTIES OR FOR DAMAGES INCURRED BY AGENT OR ANY
LENDER, ARE CHARGES MADE TO COMPENSATE AGENT OR ANY SUCH LENDER FOR UNDERWRITING
OR ADMINISTRATIVE SERVICES AND COSTS OR LOSSES PERFORMED OR INCURRED, AND TO BE
PERFORMED OR INCURRED, BY AGENT AND LENDERS IN CONNECTION WITH THIS AGREEMENT
AND THE OTHER LOAN DOCUMENTS AND SHALL UNDER NO CIRCUMSTANCES BE DEEMED TO BE
CHARGES FOR THE USE OF MONEY PURSUANT TO OFFICIAL CODE OF GEORGIA ANNOTATED
SECTION 7-4-2 OR 7-4-18. ALL CHARGES OTHER THAN CHARGES FOR THE USE OF MONEY
SHALL BE FULLY EARNED AND NONREFUNDABLE WHEN DUE.
SECTION 3.9. Statements of Account.
Agent will account to Borrower monthly with a statement of Loans, charges
and payments made pursuant to this Agreement and the other Loan Documents, and
such account rendered by Agent shall be deemed final, binding and conclusive
upon Borrower absent demonstrable error. The failure of Agent or any Lender to
maintain or deliver such a statement of accounts shall not relieve or discharge
Borrower from its obligations hereunder.
SECTION 3.10. Agent's Reliance.
Neither Agent nor any Lender shall incur any liability to Borrower for
acting upon any telephonic notice permitted under this Agreement which Agent or
such Lender believes reasonably and in good faith to have been given by an
individual authorized to deliver a Notice of Borrowing, Notice of Conversion,
Notice of Continuation or Extension Request on behalf of Borrower.
SECTION 3.11. Liens on Collateral.
Pursuant to the terms of the Collateral Documents to which it is a party,
Borrower has granted to Agent, for the benefit of Lenders a valid, enforceable,
perfected, first-priority and (except for Permitted Liens) only security
interest and Lien in and to the Collateral in which Borrower has rights as
security for the Obligations. Pursuant to the
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terms of the Collateral Documents to which it is a party, Guarantor has granted
to Agent, for the benefit of Lenders a valid, enforceable, perfected, first-
priority and (except for Permitted Liens) only security interest and Lien in and
to the Collateral in which it has rights as security for the Obligations (as
defined in the Guaranty).
SECTION 3.12. Option to Replace Lenders.
If pursuant to Section 2.1., Agent shall determine that the making of a
Revolving Loan requested by Borrower will result in a violation by a Lender (the
"Affected Lender") subject to Regulation G of the margin requirements of
Regulation G but not those of Regulation U, then, so long as there does not then
exist any Default or Event of Default, Borrower may either (a) demand that the
Affected Lender, and upon such demand the Affected Lender shall promptly, assign
its Commitment to another financial institution subject to and in accordance
with the provisions of Section 9.8.(c) for a purchase price equal to the
Affected Lender's Pro Rata Share of the aggregate principal balance of Revolving
Loans then outstanding plus any accrued but unpaid interest thereon and accrued
but unpaid fees owing to the Affected Lender, or (b) pay to the Affected Lender
the Affected Lender's Pro Rata Share of the aggregate principal balance of
Revolving Loans then outstanding plus any accrued but unpaid interest thereon
and accrued but unpaid fees owing to the Affected Lender, whereupon the Affected
Lender shall no longer be a party hereto or have any rights or obligations
hereunder or under any of the other Loan Documents and the Revolving Commitment
shall immediately and permanently be reduced by an amount equal to the amount of
the Affected Lender's Commitment.
SECTION 3.13. Foreign Lenders.
On or before the Effective Date, each Foreign Lender shall deliver to Agent
and Borrower (i) two valid, duly completed copies of IRS Form 1001 or 4224 or
successor applicable form, as the case may be, and any other required form,
certifying in each case that such Foreign Lender is entitled to receive payments
under this Agreement and the Note payable to it without deduction or withholding
of any United States federal income taxes or with such withholding imposed at a
reduced rate (the "Reduced Rate"), and (ii) if requested by Agent or Borrower, a
valid, duly completed IRS Form W-8 or W-9 or successor applicable form, as the
case may be, to establish an exemption from United States backup withholding
tax. Each such Foreign Lender shall also deliver to Agent and Borrower two
further copies of such Form 1001 or 4224 and W-8 or W-9, or successor applicable
forms, or other manner of required certification, as the case may be, on or
before the date that any such form previously delivered expires or becomes
obsolete or otherwise is required to be resubmitted as a condition to obtaining
an exemption from a required withholding of United States federal income tax or
entitlement to having such withholding imposed at the Reduced Rate or after the
occurrence of any event requiring a change in the most recent form previously
delivered by such Foreign Lender to Borrower and Agent, and such extensions or
renewals thereof as may reasonably be requested by Borrower and Agent, (i) in
the case of a Form 1001 or 4224, certifying that such Foreign Lender is entitled
to receive payments under this Agreement and the Note payable to it without
deduction or withholding of any United States federal income taxes, unless in
any
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such case any change in a tax treaty to which the United States is a party,
or any change in any Applicable Law of the United States of America or official
interpretation thereof has occurred after the Effective Date and prior to the
date on which any such delivery would otherwise be required that renders all
such forms inapplicable or that would prevent such Foreign Lender from duly
completing and delivering any such form with respect to it, and such Foreign
Lender advises Borrower and Agent that it is not capable of receiving payments
without any deduction or withholding at the Reduced Rate, or (ii) in the case of
a Form W-8 or W-9, establishing an exemption from United States backup
withholding tax.
ARTICLE IV. CONDITIONS
SECTION 4.1. Effectiveness.
The effectiveness of this Agreement and the obligation of Lenders to make
any Loans to Borrower in accordance with the terms hereof are subject to the
condition precedent that Borrower deliver to Agent each of the following, each
of which shall be in form and substance satisfactory to Agent:
(a) counterparts of this Agreement executed by each of the parties hereto;
(b) Notes executed by Borrower, payable to each Lender and complying with
the terms of Section 2.13.;
(c) the Borrower Pledge Agreement executed by Borrower;
(d) the Guaranty executed by Guarantor;
(e) UCC amendment statements executed by Guarantor and Borrower with
respect to existing financing statements to reflect the amendment and
restatement of the Existing Credit Agreement;
(f) the opinion of Xxxxx, Xxxxx and Xxxxx, counsel to Borrower and
Guarantor, and addressed to Agent and Lenders in substantially the form of
Exhibit J;
(g) an opinion of King & Spalding, local Georgia counsel to Borrower and
Guarantor, and addressed to Agent and Lenders in substantially the form of
Exhibit K;
(h) the articles of incorporation of Borrower certified as of a recent
date by the Secretary of State of the State of Nevada;
(i) a Certificate of Good Standing issued as of a recent date by the
Secretary of State of the State of Nevada and certificates of qualification to
transact business or other comparable certificates issued by each Secretary of
State (and any state department of taxation, as applicable) of each state in
which Borrower is required to be so qualified;
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(j) a certificate of incumbency signed by the Secretary or Assistant
Secretary of Borrower with respect to each of the officers of Borrower
authorized to execute and deliver the Loan Documents to which Borrower is a
party;
(k) certified copies (certified by the Secretary or Assistant Secretary of
Borrower) of the by-laws of Borrower and of all corporate or other necessary
action taken by Borrower to authorize the execution, delivery and performance of
the Loan Documents to which it is a party;
(l) the articles of incorporation of Guarantor certified as of a recent
date by the Secretary of State of the State of Maryland;
(m) a Certificate of Good Standing issued as of a recent date by the
Secretary of State of the State of Maryland and certificates of qualification to
transact business or other comparable certificates issued by each Secretary of
State (and any state department of taxation, as applicable) of each state in
which Guarantor is required to be so qualified;
(n) a certificate of incumbency signed by the Secretary or Assistant
Secretary of Guarantor with respect to each of the officers of Guarantor
authorized to execute and deliver the Loan Documents to which Guarantor is a
party;
(o) certified copies (certified by the Secretary or Assistant Secretary of
Guarantor) of the by-laws of Guarantor and of all corporate or other necessary
action taken by Guarantor to authorize the execution, delivery and performance
of the Loan Documents to which it is a party;
(p) a Form FR U-1 and a Form FR G-3 executed by Borrower with respect to
the Collateral in which it has rights;
(q) such other documents and instruments as Agent or any Lender may
reasonably request.
SECTION 4.2. Revolving Loans.
The obligation of Lenders to make a Revolving Loan is subject to the
condition precedent that the following conditions be satisfied in the judgment
of Agent:
(a) timely receipt by Agent of a Notice of Borrowing;
(b) the proposed use of proceeds of such Revolving Loan set forth in the
Notice of Borrowing is consistent with the provisions of Section 6.9.;
(c) immediately before and after the making of such Revolving Loan, no
Default (including without limitation the existence of the condition described
in Section 2.9.(e)) or Event of Default shall have occurred and be continuing;
and
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(d) the representations and warranties of Borrower and Guarantor contained
in the Loan Documents to which either is a party shall be true in all material
respects on and as of the date of such Revolving Loan except to the extent such
representations or warranties specifically relate to an earlier date or such
representations or warranties become untrue by reason of events or conditions
otherwise permitted hereunder and the other Loan Documents.
The delivery of each Notice of Borrowing and the making of each Loan shall
constitute a certification by Borrower to Agent and Lenders that the statements
in the immediately preceding clauses (b) through (d) are true.
SECTION 4.3. Conditions to Conversion to Term Loan.
The right of Borrower to convert Revolving Loans into the Term Loan under
Section 2.12. is subject to the condition precedent that the following
conditions be satisfied in the judgment of Agent:
(a) timely receipt by Agent of the notice required under such Section;
(b) immediately before and after such conversion, no Event of Default
shall have occurred and be continuing; and
(c) the representations and warranties of Borrower and Guarantor contained
in the Loan Documents to which either is a party shall be true in all material
respects on and as of the date of such conversion except to the extent such
representations or warranties specifically relate to an earlier date or such
representations or warranties become untrue by reason of events or conditions
otherwise permitted hereunder and the other Loan Documents.
The delivery of the notice required under such Section shall constitute a
certification by Borrower to Agent and Lenders that the statements in the
immediately preceding clauses (b) and (c) are true.
SECTION 4.4. Conditions as Covenants.
If Lenders make the initial Revolving Loan prior to the satisfaction of all
conditions precedent set forth in Section 4.1., Borrower shall nevertheless
cause such condition or conditions to be satisfied within five Business Days
after the date of the making of such initial Revolving Loan.
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ARTICLE V. REPRESENTATIONS AND WARRANTIES
Borrower represents and warrants to Agent and each Lender as follows:
SECTION 5.1. Existence and Power.
Borrower is a corporation, duly organized, validly existing and in good
standing under the laws of the State of Nevada, and has all requisite power and
authority and all governmental licenses, authorizations, consents and approvals
required to carry on its business as now conducted and is duly qualified and is
in good standing as a foreign corporation, and authorized to do business, in
each jurisdiction in which the character of its properties or the nature of its
business requires such qualification or authorization except where the failure
to be so qualified or authorized would not have a Materially Adverse Effect on
Borrower.
SECTION 5.2. Ownership Structure.
Schedule 5.2. correctly sets forth the corporate structure and ownership
interests of Borrower and all of its Consolidated Subsidiaries including the
correct legal name of Borrower and each such Subsidiary, and Borrower's relative
equity interest in each such Subsidiary.
SECTION 5.3. Authorization of Agreement, Notes, Loan Documents and
Borrowings.
Borrower has the right and power, and has taken all necessary action to
authorize it, to borrow hereunder and to execute, deliver and perform this
Agreement, the Notes and the other Loan Documents to which it is a party in
accordance with their respective terms and to consummate the transactions
contemplated hereby. This Agreement, the Notes and each of the other Loan
Documents to which Borrower is a party have been duly executed and delivered by
the duly authorized officers of Borrower and each is a legal, valid and binding
obligation of Borrower enforceable against Borrower in accordance with its
respective terms, except as the same may be limited by bankruptcy, insolvency,
and other similar laws affecting the rights of creditors generally and the
availability of equitable remedies for the enforcement of certain obligations
(other than the payment of principal) contained herein or therein may be limited
by equitable principles generally.
SECTION 5.4. Compliance of Agreement, Notes, Loan Documents and Borrowing
with Laws, etc.
The execution, delivery and performance of this Agreement, the Notes and
the other Loan Documents to which Borrower is a party in accordance with their
respective terms and the borrowing of Loans hereunder do not and will not, by
the passage of time, the giving of notice or otherwise (a) require any
Governmental Approval or violate any Applicable Law relating to Borrower the
failure to possess or to comply with which would have a Materially Adverse
Effect on Borrower; (b) conflict with, result in a breach of or constitute a
default under the articles of incorporation or the bylaws of Borrower, or any
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indenture, agreement or other instrument to which Borrower is a party or by
which it or any of its properties may be bound and the violation of which would
have a Materially Adverse Effect on Borrower; or (c) result in or require the
creation or imposition of any Lien upon or with respect to any property now
owned or hereafter acquired by Borrower other than Permitted Liens.
SECTION 5.5. Compliance with Law; Governmental Approvals.
Borrower is in compliance with each Governmental Approval applicable to it
and in compliance with all other Applicable Law relating to Borrower, except for
noncompliances which, and Governmental Approvals the failure to possess which,
would not, singly or in the aggregate, cause a Default or Event of Default or
have a Materially Adverse Effect on Borrower and in respect of which (if
Borrower has actual knowledge of such Applicable Law or Governmental Approval)
adequate reserves have been established on the books of Borrower.
SECTION 5.6. Indebtedness and Guarantees.
The Borrower has no Indebtedness or Guarantees other than the Indebtedness
hereunder and under the other Loan Documents to which the Borrower is a party.
SECTION 5.7. Transactions with Affiliates.
Borrower is not a party to any transaction with any Affiliate which is in
violation of Section 6.12.(b).
SECTION 5.8. Absence of Defaults.
Borrower is not in default under its articles of incorporation or its
bylaws, and no event has occurred, which has not been remedied, cured or waived
(a) which constitutes a Default or an Event of Default; or (b) which
constitutes, or which with the passage of time, the giving of notice or
otherwise, would constitute, a default or event of default by Borrower under any
material agreement (other than this Agreement) or judgment, decree or order to
which Borrower is a party or by which Borrower or any of its properties may be
bound.
SECTION 5.9. Financial Information.
The consolidated balance sheet of Borrower as at December 31, 1995 and the
related consolidated statements of earnings, stockholders' equity and cash flows
for the fiscal year then ending, reported on by Xxxxxx Xxxxxxxx & Co., and the
unaudited consolidated balance sheet of Borrower as at March 31, 1996 and the
related unaudited consolidated statements of earnings, stockholders' equity and
cash flows for the fiscal quarter then ending, copies of all of which have been
delivered to Agent and Lenders, fairly present, in conformity with generally
accepted accounting principles, the financial position of Borrower as of such
date and its results of operations and cash flows for such fiscal year and
period. Since December 31, 1995 and with reference to such date, there
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has been no material adverse change in the financial position or results of
operations of Borrower and its Consolidated Subsidiaries taken as a whole.
SECTION 5.10. Litigation.
There is no action, suit or proceeding pending against, or to the knowledge
of Borrower threatened against or affecting, any Related Company before any
court or arbitrator or any governmental body, agency or official (a) which would
reasonably be expected to materially adversely affect the business, properties,
financial position, results of operations or prospects of Borrower or (b) which
in any manner draws into question the validity of any Loan Document.
SECTION 5.11. ERISA.
Borrower does not maintain, and has not at any time maintained, any Plan
subject to the provisions of ERISA and is not, and has not at any time been, a
member of any ERISA Group with any Person that has at any time maintained any
such Plan.
SECTION 5.12. Environmental Matters.
In the ordinary course of their business, the Related Companies conduct an
ongoing review of the effect of Environmental Laws on their business, operations
and properties, in the course of which they identify and evaluate associated
liabilities and costs (including, without limitation, any capital or operating
expenditures required for clean-up or closure of properties presently or
previously owned, any capital or operating expenditures required to achieve or
maintain compliance with environmental protection standards imposed by law or as
a condition of any license, permit or contract, any related constraints on
operating activities, including any periodic or permanent shutdown of any
facility or reduction in the level of or change in the nature of operations
conducted thereat, any costs or liabilities in connection with off-site disposal
of wastes or Hazardous Substances, and any actual or potential liabilities to
third parties, including employees, and any related costs and expenses). On the
basis of this review, Borrower has reasonably concluded that such associated
liabilities and costs, including the costs of compliance with Environmental
Laws, are unlikely to have a material adverse effect on the business, financial
condition, results of operations or prospects of Borrower and its Consolidated
Subsidiaries, considered as a whole.
SECTION 5.13. Taxes.
As of the date hereof, no United States Federal income tax returns of the
"affiliated group" (as defined in the Internal Revenue Code) of which Borrower
is a member have been examined and closed. The members of such affiliated group
have filed all United States Federal income tax returns and all other material
tax returns which are required to be filed by them and have paid all taxes due
pursuant to such returns or pursuant to any assessment received by or any of
them except for taxes being contested in good faith by appropriate proceedings
and for which appropriate reserves have been established. The
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charges, accruals and reserves on the books of Borrower in respect of taxes or
other governmental charges are, in the opinion of Borrower, adequate.
SECTION 5.14. Other Related Companies.
Each of the corporate Related Companies other than Borrower is a
corporation duly incorporated, validly existing and in good standing under the
laws of its jurisdiction of incorporation, and has all corporate powers and all
material Governmental Approvals required to carry on its business as now
conducted.
SECTION 5.15. Not an Investment Company.
Borrower is not an "investment company" within the meaning of the
Investment Company Act of 1940, as amended.
SECTION 5.16. Full Disclosure.
All written information furnished by or on behalf of Borrower or Guarantor
to Agent and Lenders for purposes of or in connection with this Agreement and
the other Loan Documents or any transaction contemplated hereby is, and all such
information hereafter furnished by or on behalf of Borrower or Guarantor to
Agent and Lenders will be true and accurate in all material respects on the date
as of which such information is stated or certified and does not, and will not,
fail to state any material facts necessary to make the statements contained
therein not misleading. Borrower has disclosed to Agent in writing any and all
facts known to Borrower which materially and adversely affect or may affect (to
the extent Borrower can now reasonably foresee), the business, operations or
financial condition of Borrower and its Consolidated Subsidiaries, taken as a
whole, or the ability of Borrower to perform its obligations under the Loan
Documents.
SECTION 5.17. Insurance.
Schedule 5.17. sets forth a true and correct description of the insurance
coverage maintained by or on behalf of Borrower currently in effect.
SECTION 5.18. Not Plan Assets.
The assets of Borrower do not and will not constitute plan assets, within
the meaning of ERISA, the Internal Revenue Code and the respective regulations
promulgated thereunder, of any ERISA Plan or Non-ERISA Plan. The execution,
delivery and performance of this Agreement, and the borrowing and repayment of
amounts thereunder, do not and will not constitute "prohibited transactions"
under ERISA or the Internal Revenue Code.
SECTION 5.19. Sole Shareholder.
Guarantor owns all of the issued and outstanding capital stock of Borrower.
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SECTION 5.20. Liens.
The liens and security interests granted to Agent pursuant to the
Collateral Documents are valid and enforceable first-priority Liens subject only
to Permitted Liens.
SECTION 5.21. Pledged Shares.
Schedules 5.21.(A), (B), (C) and (D) are true, correct and complete
descriptions of the transactions pursuant to which Borrower (or Guarantor prior
to the Contribution) acquired the Pledged Shares of Security Capital Industrial
Trust, Security Capital Atlantic Incorporated, Security Capital Pacific Trust
and Security Capital U.S. Realty, respectively, including the date of
acquisition, the number of Pledged Shares so acquired, the identity of the
Person from whom acquired, the per share acquisition price (if applicable) and
when the full acquisition price was paid or given (if applicable). As of the
date hereof, none of the Pledged Shares issued by Security Capital Pacific Trust
are "restricted securities" as such term is defined in Rule 144 of the
Securities Act. As of the date hereof, 19,012,884 of the Pledged Shares issued
by Security Capital Industrial Trust are such "restricted securities", all of
which (other than 10,004 shares acquired from certain employees) have been held
by Borrower for more than two years for purposes of Rule 144 of the Securities
Act, and the remaining 20,339,601 of such Pledged Shares are not such
"restricted securities". For the purposes of this Section, the term Pledged
Shares shall have the meaning given to such term in the Pledge Agreement.
SECTION 5.22. Assets.
As of the date hereof, Borrower has no assets other than (a) the Pledged
Collateral (as defined in the Borrower Pledge Agreement) and the registration
rights associated with such Pledged Collateral, (b) New Investments, (c) cash,
cash equivalents, bank accounts, office furniture, equipment and supplies,
leases for office space and other assets used by Borrower in the operation of
its business and (d) the Guarantor Note. As of the date hereof, the aggregate
value of the assets described in the immediately preceding clause (c) (excluding
bank accounts) does not exceed $1,000,000.
SECTION 5.23. Business Purposes and Objects.
The purposes and objects for which Borrower is organized are (a) to hold,
buy and sell interests in and organize, capitalize, promote and control publicly
and privately held real estate investment trusts and corporations electing to be
taxed as real estate investment trusts and other entities engaged in the
ownership, acquisition, development, sale, leasing and operation of real
property and related assets (or companies or other entities which directly or
indirectly own such entities); (b) to hold, buy and sell interests in and
organize, capitalize and control corporations or other entities providing
services to real estate investment trusts, corporations or other entities,
including, without limitation, general management, property management,
development, acquisitions, due diligence, research, capital markets, accounting
and legal services and such other services as such real estate investment
trusts, corporations or other entities may require from time to time (or
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companies or other entities which directly or indirectly own such entities); and
(c) all other purposes and objects necessary, appropriate, convenient, conducive
or advisable to the purposes and objects listed in clauses (a) and (b).
SECTION 5.24. Separateness Representations.
(a) Consolidation of the business operations of Borrower and Guarantor,
when taken together with the elimination of the financial benefits of the
transactions, would not result in any significant cost savings or in
significantly greater efficiency of such combined business operations.
(b) Borrower has not concealed and will not conceal from any interested
party any transfers made in connection with the Contribution. Borrower did not
enter into the transactions contemplated by the Existing Credit Agreement and
the Assignment and Assumption Agreement with the intent of hindering, delaying
or defrauding its creditors.
(c) Borrower's management has made a diligent analysis of the business and
operations of Borrower, and is reasonably confident that Borrower is and will
be: (i) adequately capitalized to conduct its business and affairs as a going
concern, considering the size and nature of its business and intended purposes;
(ii) solvent; and (iii) able to pay its debts as they come due. As a result of
the foregoing, Borrower's management believes that Borrower will be able to
conduct its business as a stand alone entity, independent of financial
assistance of any Person. Borrower's management does not anticipate any need
for Guarantor to loan money or contribute capital to Borrower, although it is
possible that Guarantor may take either of these actions in the future.
SECTION 5.25. Solvency.
(a) The fair value and the fair salable value of Borrower's assets
(excluding any Indebtedness due from any Affiliate of Borrower) are each in
excess of the fair valuation of Borrower's total liabilities (including all
contingent liabilities); and (b) Borrower is able to pay its debts or other
obligations in the ordinary course as they mature and (c) Borrower has capital
not unreasonably small to carry on its business and all business in which it
proposes to be engaged.
ARTICLE VI. COVENANTS
Borrower agrees that, so long as Lenders have any Commitments hereunder or
any Obligation remains unpaid:
SECTION 6.1. Information.
Borrower will deliver to Agent:
(a) as soon as available and in any event within ninety days after the end
of each respective fiscal year of Borrower and any of its Subsidiaries the
financial statements of which are audited, a balance sheet of such Person as of
the end of such fiscal year and
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the related statements of funds from operations or earnings, stockholders'
equity and cash flows for such fiscal year, setting forth in each case in
comparative form the figures for the previous fiscal year, and in the case of
each such Subsidiary, reported on (other than the statement of funds from
operations) in a manner acceptable to Agent by independent public accountants of
nationally recognized standing;
(b) as soon as available and in any event within forty-five days after the
end of each of the first three fiscal quarters of each respective fiscal year of
Borrower and any of its Subsidiaries the financial statements of which are
audited, a balance sheet of such Person as of the end of such quarter and the
related statements of funds from operations or earnings, stockholders' equity
and cash flows for such quarter and for the portion of such Person's fiscal year
ended at the end of such quarter, setting forth in comparative form the figures
for the corresponding quarter and the corresponding portion of such Person's
previous fiscal year, all certified (subject to normal year-end adjustments) as
to fairness of presentation, generally accepted accounting principles (subject
to absence of full footnote disclosures and other than the statement of funds
from operations) and consistency by the President, Managing Director, Treasurer
or controller of such Person (which officer shall be authorized to so certify
such statements);
(c) simultaneously with the delivery of each set of financial statements
referred to in the immediately preceding clauses (a) and (b), a certificate of
the President, Managing Director, Treasurer or controller of Borrower (which
officer shall be authorized to execute such certificate) (i) setting forth in
reasonable detail the calculations required to establish whether Borrower was in
compliance with the requirements of Sections 6.7. and 6.12. on the date of such
financial statements, (ii) stating whether any Default or Event of Default
exists on the date of such certificate and, if any Default or Event of Default
then exists, setting forth the details thereof and the action which Borrower is
taking or proposes to take with respect thereto, (iii) setting forth a schedule
of all Contingent Obligations of Borrower as of the date of such financial
statements, and (iv) setting forth a schedule, in such form as may be reasonably
satisfactory to Agent, of information with respect to assets and liabilities of
Consolidated Subsidiaries of Borrower;
(d) as soon as available and in any event within forty-five days after the
end of each fiscal quarter, or promptly upon the request of Agent, a report
certified by the President, Managing Director, Treasurer or controller of
Borrower (which officer shall be authorized to certify such report), setting
forth in reasonable detail (i) all Qualifying Securities and the current Market
Value thereof, (ii) all Traded Securities and the current Market Value thereof,
and (iii) a calculation of the Borrowing Base;
(e) simultaneously with the delivery of each set of financial statements
referred to in the immediately preceding clause (a), a statement of the firm of
independent public accountants which reported on such statements (i) whether
anything has come to their attention to cause them to believe that any Default
or Event of Default existed on the date of such statements and (ii) confirming
the calculations set forth in the Compliance Certificate delivered
simultaneously therewith pursuant to the immediately preceding clause (c);
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(f) promptly upon receipt thereof, copies of all reports submitted to
Borrower or its Board of Directors by Borrower's independent public accountants,
including without limitation, any management report;
(g) within five days after any executive officer of Borrower obtains
knowledge of any Default or Event of Default, a certificate of the President,
Managing Director, Treasurer, controller or Secretary of Borrower setting forth
the details thereof and the action which Borrower is taking or proposes to take
with respect thereto;
(h) promptly upon the mailing thereof to the shareholders of Borrower
generally, copies of all financial statements, reports, offering memoranda and
proxy statements so mailed;
(i) promptly upon the filing thereof, copies of all registration statements
(other than the exhibits thereto and any registration statements on Form S-8 or
its equivalent), reports on Forms 10-K, 10-Q and 8-K (or their equivalents) and
all other periodic reports which Borrower or any of its Affiliates which it
directly or indirectly controls shall file with the Securities and Exchange
Commission (or any governmental agency substituted therefor) or any national
securities exchange;
(j) promptly upon the release thereof, copies of all press releases of
Borrower and any of its Affiliates which it directly or indirectly controls;
(k) promptly upon obtaining knowledge thereof, a description in reasonable
detail of any action, suit or proceeding commenced or threatened against any of
the Related Companies which is reasonably likely to have a Materially Adversely
Effect on Borrower;
(l) promptly upon the occurrence thereof, any material change in the senior
management of Borrower;
(m) promptly upon the occurrence thereof, any amendment to the bylaws of
Borrower;
(n) promptly upon the filing thereof, the annual report of Borrower filed
with the Secretary of State of the State of Nevada;
(o) promptly upon Agent's request, (i) amendments or other supplements to
any Form FR U-1 or Form FR G-3 delivered under this Agreement, (ii) new Forms FR
U-1 or Forms FR G-3, and (iii) such information regarding the Pledged Shares (as
defined in the Borrower Pledge Agreement) as Agent may request; and
(p) from time to time such additional information regarding the financial
position or business of Borrower and its Subsidiaries as Agent or any Lender may
reasonably request.
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SECTION 6.2. Payment of Obligations.
Borrower will pay and discharge, and will cause each Subsidiary (other than
any Public Subsidiary) to pay and discharge, at or before maturity, all their
respective material obligations and liabilities, including, without limitation,
tax liabilities, except where the same may be contested in good faith by
appropriate proceedings unless the contest thereof would have a Materially
Adverse Effect on Borrower, and will maintain, and will cause each Subsidiary
(other than any Public Subsidiary) to maintain, in accordance with generally
accepted accounting principles, appropriate reserves for the accrual of any of
the same.
SECTION 6.3. Maintenance of Property; Insurance.
(a) Borrower will keep, and will cause each Subsidiary (other than any
Public Subsidiary) to keep, all property useful and necessary in its business in
good working order and condition, ordinary wear and tear and insured casualty
losses excepted.
(b) Borrower will maintain, and will cause each Subsidiary (other than any
Public Subsidiary) to maintain, (i) physical damage insurance on all real and
personal property on an all risks basis (including the perils of flood and
earthquake if located in designated flood and earthquake zones), covering the
repair and replacement cost of all such property and consequential loss coverage
for business interruption and extra expense (provided that the amount of such
insurance with respect to earthquakes need not exceed $15,000,000 for property
located in California), (ii) public liability insurance (including
products/completed operations liability coverage) in an amount not less than
$5,000,000.00 in primary coverage and $25,000,000.00 in umbrella coverage and
(iii) such other insurance coverage in such amounts and with respect to such
risks as is consistent with insurance maintained by businesses of comparable
type and size in the industry. All such insurance shall be provided by insurers
having an A.M. Best policyholders rating of not less than A-IX (with respect to
liability) and A-XI (with respect to property damage) or such other insurers as
Agent may approve in writing. Borrower will deliver to Agent (i) upon request
of Agent from time to time full information as to the insurance carried, (ii)
within five (5) days of receipt of notice from any insurer a copy of any notice
of cancellation or material change in coverage from that existing on the date of
this Agreement and (iii) forthwith, notice of any cancellation or nonrenewal of
coverage by Borrower.
(c) Except as otherwise permitted under Section 6.8., Borrower will, and
will cause each Subsidiary to, qualify and remain qualified and authorized to do
business in each jurisdiction in which the character of its properties or the
nature of its business requires such qualification or authorization and where
the failure to be so qualified or authorized would have a Materially Adverse
Effect on Borrower.
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SECTION 6.4. Conduct of Business and Maintenance of Existence.
Except as otherwise permitted under Section 6.8., Borrower will continue,
and will cause each Subsidiary to continue, to engage in business of the same
general type as now conducted by Borrower and its Subsidiaries, and will
preserve, renew and keep in full force and effect, and will cause each
Subsidiary to preserve, renew and keep in full force and effect their respective
existence and their respective rights, privileges and franchises necessary or
desirable in the normal conduct of business; provided that nothing in this
Section shall prohibit the dissolution of a Subsidiary if (a) the Borrower's
Board of Directors has determined that such dissolution is in the best interest
of Borrower, (b) such dissolution will not be materially disadvantageous to
Lenders and (c) such dissolution will not have a Materially Adverse Effect.
SECTION 6.5. Compliance with Laws.
Borrower will comply, and cause each Subsidiary to comply, with all
Applicable Laws, including without limitation, all Environmental Laws and ERISA
and the rules and regulations thereunder, except where compliance therewith is
contested in good faith by appropriate proceedings or the failure to so comply
would not have a Materially Adverse Effect.
SECTION 6.6. Inspection of Property, Books and Records.
Borrower will keep, and will cause each Subsidiary to keep, proper books of
record and account in which full, true and correct entries shall be made of all
dealings and transactions in relation to its business and activities; and will
permit, and will cause each Subsidiary to permit, representatives of Agent to
visit and inspect any of their respective properties, to examine and make
abstracts from any of their respective books and records and to discuss their
respective affairs, finances and accounts with their respective officers,
employees and independent public accountants in Borrower's presence prior to an
Event of Default, all at such reasonable times during business hours and as
often as may reasonably be desired and with reasonable notice so long as no
Event of Default shall have occurred and be continuing.
SECTION 6.7. Accounts Payable; Indebtedness.
Borrower will not incur, assume or suffer to exist (a) any accounts payable
in excess of $10,000,000 in the aggregate at any time outstanding and (b) any
Indebtedness other than:
(i) Indebtedness under this Agreement; and
(ii) Indebtedness represented by declared but unpaid dividends.
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SECTION 6.8. Consolidations, Mergers and Sales of Assets.
Neither Borrower nor any of its Subsidiaries (other than any Public
Subsidiary) may (a) consolidate or merge with or into any other Person or (b)
sell, lease or otherwise transfer, directly or indirectly, and whether by one or
a series of related transactions, a substantial portion of any of its assets to
any other Person, except that a Subsidiary may merge or consolidate with another
Person or sell, lease or otherwise transfer a substantial portion of its assets
to another Person so long as (i) Borrower shall have given Agent at least thirty
days prior notice thereof, (ii) after giving effect thereto, no Default or Event
of Default shall have occurred and be continuing, and (iii) in the case of a
consolidation or merger, the Person surviving such consolidation or merger will
be a Subsidiary after giving effect thereto.
SECTION 6.9. Use of Proceeds.
Borrower will only use the proceeds of the Loans made under this Agreement
(a) to finance (i) the purchase by Borrower of Securities issued by Security
Capital Pacific Trust, Security Capital Industrial Trust, Security Capital
Atlantic Incorporated, Security Capital U.S. Realty and New Investments; (ii)
the acquisition of real property by Borrower and (iii) loans from Borrower to
such affiliates, none of the Securities of which are traded on any national
securities exchange, and (b) for general corporate purposes, including without
limitation, the payment of dividends to Guarantor and the making of loans to
Guarantor evidenced by the Guarantor Note, in each case to the extent otherwise
permitted hereunder, and for no other purposes. Borrower will not use any
proceeds of the Loans for the purpose of purchasing or carrying any "margin
stock" within the meaning of Regulations G, U and X if such use would result in
a violation of any of Regulations G, U and X.
SECTION 6.10. ERISA.
Borrower will not at any time maintain any Plan subject to the provisions
of ERISA and will not at any time be a member of any ERISA Group with any Person
that has at any time maintained any such Plan.
SECTION 6.11. Negative Pledge.
Borrower will not create, assume or suffer to exist any Lien on any of the
Collateral in which it has rights or any of its other assets, now owned or
hereafter acquired, except for Permitted Liens.
SECTION 6.12. Restricted Payments; and Agreements with Affiliates.
(a) (i) If no Event of Default shall have occurred and be continuing,
Borrower shall not directly or indirectly declare or make, or incur any
liability to make, any Restricted Payments during any four fiscal quarter period
(or if Borrower has only existed for a shorter period, then such shorter period)
in an aggregate amount in excess of 100% of Borrower's Cash Flow Available for
Distribution for such four fiscal quarters (or such
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shorter period), and (ii) if any Event of Default shall have occurred and be
continuing, Borrower shall not directly or indirectly declare or make, or incur
any liability to make, any Restricted Payments.
(b) Borrower shall not, and shall not permit any of its Subsidiaries that
are not Public Subsidiaries to, enter into any transaction requiring such Person
to pay any amounts to or otherwise transfer property to, or pay any management
or other fees to, any Affiliate other than on terms and conditions substantially
as favorable to Borrower or such Subsidiary as would be obtainable at the time
in a comparable arm's-length transaction with a Person not an Affiliate.
SECTION 6.13. ERISA Exemptions.
Borrower shall not permit any of its assets to become or be deemed to be
"plan assets" within the meaning of ERISA, the Internal Revenue Code and the
respective regulations promulgated thereunder, of any ERISA Plan or any Non-
ERISA Plan.
SECTION 6.14. Separateness Covenant.
(a) Borrower will maintain Borrower's separate existence and identity and
will take reasonable steps to make it apparent to third parties that Borrower is
an entity with assets (in particular the Pledged Shares (as defined in the
Borrower Pledge Agreement)) and liabilities distinct from those of Guarantor.
(b) Not in limitation of the generality of the foregoing, Borrower agrees
as follows:
(i) Borrower will not inadvertently commingle its assets in any
material respects with those of any other Person and shall take all
reasonable steps to maintain its assets in a manner that facilitates their
identification and segregation from those of Guarantor;
(ii) Borrower shall take all reasonable steps to prevent any of
Borrower's funds from at any time being pooled with any funds of Guarantor;
(iii) Borrower will conduct its business in its own name and from an
office separate from that of Guarantor or any other Affiliate of Borrower;
(iv) Borrower will maintain separate corporate records and books of
account from those of any other Person;
(v) Borrower will maintain separate financial statements from those
of any other Person; provided, however, financial information about
Borrower may be contained in consolidated financial statements issued by
Guarantor;
(vi) Borrower will pay its own liabilities, including the salaries
of its own employees, consultants and agents, from its own funds and bank
accounts;
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(vii) Borrower will compensate Guarantor at market rates for any
services that Guarantor actually renders to Borrower; and
(viii) Borrower will observe the formalities of a corporation in all
material respects.
(c) Not in limitation of the generality of the foregoing, Borrower further
agrees as follows:
(i) Borrower will not intentionally commingle its assets in any
material respects with those of any other Person; and
(ii) Borrower shall not maintain joint bank accounts or other
depository accounts to which Guarantor has access.
SECTION 6.15. Independent Director.
As of the date hereof, Borrower's Independent Director (as defined in
Borrower's articles of incorporation) is Xxxxx X. Xxxxxx. Borrower shall pay
such Independent Director a director's fee not greater than comparable fees
received by independent directors of entities similar to Borrower engaging in
comparable activities with similar risks. Borrower will not permit such
Independent Director to be a trustee in bankruptcy for Guarantor.
SECTION 6.16. Guarantor Note.
Borrower will not amend, supplement, restate or otherwise modify any of the
terms of the Guarantor Note without the prior written consent of the Majority
Lenders.
SECTION 6.17. Compliance with and Amendment of Charter or Bylaws.
Borrower will (a) comply with the terms of its articles of incorporation
and bylaws and (b) not amend, supplement, restate or otherwise modify any of the
terms of its articles of incorporation.
SECTION 6.18. Additional Assets.
If after the date hereof, the aggregate value of the assets (excluding
cash, cash equivalents and bank accounts) described in clause (c) of Section
5.22. shall exceed the amount set forth in such clause, (x) Borrower shall give
Agent prompt notice thereof and (y) within ten days of Agent's request, Borrower
shall execute and deliver to Agent a security agreement generally in the form of
the Guarantor Security Agreement pursuant to which Borrower grants to Agent for
the benefit of Lenders, a security interest in substantially all of Borrower's
assets (excluding New Investments) that are not already Collateral, together
with such other documents, instruments and agreements as Agent may reasonably
request to perfect such security interest.
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ARTICLE VII. DEFAULTS
SECTION 7.1. Events of Default.
If one or more of the following events shall have occurred and be
continuing:
(a) Borrower shall fail to pay within one Business Day of the due date
thereof any principal of any Obligation, or shall fail to pay within three
Business Days of the due date thereof any interest, fees or other Obligation;
(b) Borrower shall fail to observe or perform any covenant or agreement
contained in Section 6.1.(g), Section 6.7., Section 6.8., Sections 6.10. through
6.13. inclusive, Section 6.14.(c), or Sections 6.15. through 6.17., inclusive;
(c) Borrower shall fail to observe or perform any covenant or agreement
contained in this Agreement (other than those covered by the immediately
preceding clause (a) or (b)) for a period of thirty days after written notice
thereof has been given to Borrower by Agent;
(d) An Event of Default under and as defined in any Loan Document shall
occur and be continuing or Borrower or Guarantor shall fail to observe or
perform any covenant or agreement contained in any of the Loan Documents to
which it is a party (other than those expressly covered by any other clause of
this Section 7.1.) and such failure shall continue beyond any applicable period
of grace;
(e) any representation, warranty, certification or statement made or
deemed made (i) by or on behalf of Borrower in this Agreement or in any
certificate, financial statement or other Loan Document to which it is a party
delivered pursuant to this Agreement or any other Loan Document, or (ii) by or
on behalf of Guarantor in the Guaranty, the Guarantor Pledge Agreement or in any
certificate, financial statement or other Loan Document to which it is a party
delivered pursuant to this Agreement or any other Loan Document, shall prove to
have been incorrect or misleading in any material respect when made or deemed
made;
(f) Borrower or Guarantor shall fail to make any payment in respect of any
of its Indebtedness (other than the Obligations) in an aggregate principal
amount in excess of $10,000,000 when due and such failure shall continue beyond
any applicable grace period;
(g) the maturity of any Indebtedness of Borrower or Guarantor in an
aggregate principal amount in excess of $10,000,000 in the case of each such
Person, shall have been (i) accelerated in accordance with the provisions of any
indenture, contract or instrument providing for the creation of or concerning
such Indebtedness or (ii) required to be prepaid in full prior to the stated
maturity thereof;
(h) Borrower, Guarantor or any Issuer of a Qualifying Security shall
commence a voluntary case or other proceeding seeking liquidation,
reorganization or other relief with respect to itself or its debts under any
bankruptcy, insolvency or other
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similar law now or hereafter in effect or seeking the appointment of a trustee,
receiver, liquidator, custodian or other similar official of it or any
substantial part of its property, or shall consent to any such relief or to the
appointment of or taking possession by any such official in an involuntary case
or other proceeding commenced against it, or shall make a general assignment for
the benefit of creditors, or shall fail generally to pay its debts as they
become due, or shall take any corporate action to authorize any of the
foregoing;
(i) an involuntary case or other proceeding shall be commenced against
Borrower, Guarantor or any Issuer of a Qualifying Security seeking liquidation,
reorganization or other relief with respect to it or its debts under any
bankruptcy, insolvency or other similar law now or hereafter in effect or
seeking the appointment of a trustee, receiver, liquidator, custodian or other
similar official of it or any substantial part of its property and such
involuntary case or other proceeding shall remain undismissed and unstayed for a
period of sixty days; or an order for relief shall be entered against any such
Person under the federal bankruptcy laws as now or hereafter in effect;
(j) a judgment or order for the payment of money in excess of $10,000,000
shall be rendered against Borrower or Guarantor and such judgment or order shall
continue unsatisfied and unstayed for a period of thirty days;
(k) during any period of twelve consecutive calendar months, individuals
who were directors of Borrower or Guarantor on the first day of such period
shall cease to constitute a majority of the board of directors of Borrower or
Guarantor, as applicable, provided, however, that the directors of Borrower or
Guarantor, as applicable; may include new directors that (i) are an officer,
director or employee of a Related Company or (ii) are required in order (as a
practical matter) for the composition of the board of directors of Borrower or
Guarantor, as applicable, to comply with any provision of the articles of
incorporation or bylaws of Borrower or Guarantor, as applicable, regarding
independent directors;
(l) if a change in the management of Borrower or Guarantor has occurred
there shall have occurred without the consent of Agent within 10 days of such
change any adverse change deemed material by Agent in the identity of persons
constituting management of Borrower or Guarantor, as applicable;
(m) the assets of Borrower at any time constitute assets, within the
meaning of ERISA, the Internal Revenue Code and the respective regulations
promulgated thereunder, of any ERISA Plan or Non-ERISA Plan;
(n) the Lien of Agent in any of the Collateral shall, for any reason not
otherwise permitted under the Loan Documents, cease to be a valid, enforceable,
perfected and first-priority Lien (subject to Permitted Liens);
(o) Guarantor shall, or shall attempt to, disavow, revoke or terminate the
Guaranty;
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(p) Guarantor shall fail to observe or perform any covenant or agreement
contained in Section 6.(a)(vii), Section 6.(h) through Section 6.(j), Section
6.(l), Section 6.(q) or Section 6.(r)(iii) of the Guaranty;
(q) Guarantor shall fail to observe or perform any covenant or agreement
contained in Section 6.(g), Section 6.(k), or Section 6.(m) through Section
6.(p) of the Guaranty for a period of fifteen days after written notice thereof
has been given to Guarantor by Agent;
(r) Guarantor shall fail to observe or perform any covenant or agreement
contained in the Guaranty (other than those covered by the immediately preceding
clauses (p) and (q)) for a period of thirty days after written notice thereof
has been given to Guarantor by Agent; or
(s) Guarantor shall cease to own all of the issued and outstanding capital
stock of Borrower.
SECTION 7.2. Remedies.
Upon the occurrence of an Event of Default, and in every such event, Agent
shall, upon the direction of the Majority Lenders, (i) by notice to Borrower
terminate the Commitments, which shall thereupon terminate, and (ii) by notice
to Borrower declare the Loans and all other Obligations to be, and the Loans and
all other Obligations shall thereupon become, immediately due and payable
without presentment, demand, protest or notice of intention to accelerate, all
of which are hereby waived by Borrower; provided, however, that in the case of
any of the Events of Default specified in clause (h) or (i) above, without any
notice to Borrower or any other act by Agent, the Commitments shall thereupon
immediately and automatically terminate and the Loans and all other Obligations
shall become immediately due and payable without presentment, demand, protest,
notice of intention to accelerate or notice of acceleration, or other notice of
any kind, all of which are hereby waived by Borrower.
ARTICLE VIII. THE AGENT
SECTION 8.1. Appointment and Authorization.
Each Lender irrevocably appoints and authorizes Agent to take such action
as agent on its behalf and to exercise such powers under the Loan Documents as
are delegated to Agent by the terms thereof, together with all such powers as
are reasonably incidental thereto. Borrower shall be entitled to rely
conclusively upon a written notice or written response from Agent as being made
pursuant to the requisite concurrence or consent of Lenders necessary to take
such action without investigation or otherwise contacting Lenders hereunder.
The power of attorney set forth hereinabove shall be irrevocable and coupled
with an interest. The relationship between Agent and Lenders shall be that of
principal and agent only and nothing herein shall be construed to deem Agent a
trustee for any Lender nor to impose on Agent duties or obligations other than
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those expressly provided for herein. Not in limitation of the foregoing, each
Lender agrees Agent has no fiduciary obligations to such Lender under this
Agreement, any other Loan Document or otherwise. At the request of a Lender,
Agent will forward to each Lender copies or, where appropriate, originals of the
documents delivered to Agent pursuant to Section 4.1. The Agent will also
furnish to any Lender, upon the request of such Lender, a copy of any
certificate or notice furnished to Agent by Borrower pursuant to this Agreement
or any other Loan Document not already delivered to such Lender pursuant to the
terms of this Agreement or any such other Loan Document. As to any matters not
expressly provided for by the Loan Documents (including, without limitation,
enforcement or collection of the Notes), Agent shall not be required to exercise
any discretion or take any action, but shall be required to act or to refrain
from acting (and shall be fully protected in so acting or refraining from
acting) upon the instructions of the Majority Lenders, and such instructions
shall be binding upon all Lenders and all holders of Notes; provided, however,
that Agent shall not be required to take any action which exposes Agent to
personal liability or which is contrary to this Agreement or any other Loan
Document or Applicable Law. Not in limitation of the foregoing, Agent shall not
exercise any right or remedy it or Lenders may have under any Loan Document upon
the occurrence of a Default or an Event of Default unless the Majority Lenders
have so directed Agent to exercise such right or remedy. Agent shall not be
deemed to have knowledge or notice of the occurrence of a Default or Event of
Default unless Agent has actual knowledge of such Default or Event of Default.
In the event that Agent has actual knowledge of the occurrence of a Default or
Event of Default, Agent shall give prompt notice thereof to Lenders.
SECTION 8.2. Agent and Affiliates.
Xxxxx Fargo Realty Advisors Funding, Incorporated, as a Lender, shall have
the same rights and powers under this Agreement and any other Loan Document as
any other Lender and may exercise the same as though it were not Agent; and the
term "Lender" or "Lenders" shall, unless otherwise expressly indicated, include
Xxxxx Fargo Realty Advisors Funding, Incorporated in each case in its individual
capacity. Xxxxx Fargo Realty Advisors Funding, Incorporated and its affiliates
and the other Lenders and their respective affiliates may each accept deposits
from, maintain deposits or credit balances for, invest in, lend money to, act as
trustee under indentures of, and generally engage in any kind of business with
Borrower, any Related Company and any Affiliate of Borrower and any Related
Company as if Xxxxx Fargo Realty Advisors Funding, Incorporated or such Lender
were any other bank and without any duty to account therefor to the other
Lenders.
SECTION 8.3. Collateral Matters.
(a) Each Lender authorizes and directs Agent to enter into the Loan
Documents for the benefit of Lenders. Each Lender hereby agrees that, except as
otherwise set forth herein, any action taken by the Majority Lenders in
accordance with the provisions of this Agreement or the Loan Documents, and the
exercise by the Majority Lenders of the powers set forth herein or therein,
together with such other powers as are reasonably incidental thereto, shall be
authorized and binding upon all of Lenders. Agent
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is hereby authorized on behalf of all of Lenders, without the necessity of any
notice to or further consent from any Lender, from time to time prior to an
Event of Default, to take any action with respect to any Collateral or Loan
Documents which may be necessary to perfect and maintain perfected the security
interest in and liens upon the Collateral granted pursuant to the Loan
Documents.
(b) Lenders hereby authorize Agent, at its option and in its discretion,
to release any Lien granted to or held by Agent upon any Collateral upon
termination of the Commitments and payment and satisfaction of all of the
Obligations at any time arising under or in respect of this Agreement or the
Loan Documents or the transactions contemplated hereby or thereby.
(c) Upon any sale and transfer of Collateral which is permitted pursuant
to the terms of this Agreement, and upon at least five (5) Business Days' prior
written request by Borrower, Agent shall (and is hereby irrevocably authorized
by Lenders to) execute such documents as may be necessary to evidence the
release of the Liens granted to Agent for the benefit of Lenders herein or
pursuant hereto upon the Collateral that was sold or transferred; provided,
however, that (i) Agent shall not be required to execute any such document on
terms which, in Agent's opinion, would expose Agent to liability or create any
obligation or entail any consequence other than the release of such Liens
without recourse or warranty and (ii) such release shall not in any manner
discharge, affect or impair the Obligations or any Liens upon (or obligations of
Borrower or any Subsidiary in respect of) all interests retained by Borrower or
any Subsidiary, including (without limitation) the proceeds of the sale, all of
which shall continue to constitute part of the Collateral. In the event of any
sale or transfer of Collateral, or any foreclosure with respect to any of the
Collateral, Agent shall be authorized to deduct all of the expenses reasonably
incurred by Agent from the proceeds of any such sale, transfer or foreclosure.
(d) Except as expressly provided for herein, including without limitation,
in the ninth sentence of Section 8.1., or in any of the other Loan Documents,
Agent shall have no obligation whatsoever to Lenders or to any other Person to
assure that the Collateral exists or is owned by Borrower or any Subsidiary or
is cared for, protected or insured or that the Liens granted to Agent herein or
pursuant hereto have been properly or sufficiently or lawfully created,
perfected, protected or enforced or are entitled to any particular priority, or
to exercise or to continue exercising at all or in any manner or under any duty
of care, disclosure or fidelity any of the rights, authorities and powers
granted or available to Agent in this Section or in any of the Loan Documents,
it being understood and agreed that in respect of the Collateral, or any act,
omission or event related thereto, Agent may act in any manner it may deem
appropriate, in its sole discretion, given Agent's own interest in the
Collateral as one of Lenders and that Agent shall have no duty or liability
whatsoever to Lenders, except for its gross negligence or willful misconduct.
SECTION 8.4. Approvals of Lenders.
--------------------
All communications from Agent to any Lender requesting such Lender's
determination, consent, approval or disapproval (a) shall be given in the form
of a written
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notice to such Lender, (b) shall be accompanied by a description of
the matter or thing as to which such determination, approval, consent or
disapproval is requested, or shall advise such Lender where such matter or thing
may be inspected, or shall otherwise describe the matter or issue to be
resolved, (c) shall include, if reasonably requested by such Lender and to the
extent not previously provided to such Lender, written materials and a summary
of all oral information provided to Agent by Borrower or Guarantor in respect of
the matter or issue to be resolved, and (d) shall include Agent's recommended
course of action or determination in respect thereof. Each Lender shall reply
promptly, but in any event (x) within ten Business Days (or such lesser period
as may be required under the Loan Documents for Agent to respond) for those
matters relating to foreclosure on, disposition of or the exercise of any
similar remedy with respect to any Collateral and (y) within fifteen Business
Days (or such lesser period as may be required under the Loan Documents for
Agent to respond) for any other matter. Unless a Lender shall give written
notice to Agent that it objects to the recommendation or determination of Agent
(together with a written explanation of the reasons behind such objection)
within the applicable time period for reply, such Lender shall be deemed to have
conclusively approved of or consented to such recommendation or determination.
SECTION 8.5. Consultation with Experts.
-------------------------
Agent may consult with legal counsel (who may be counsel for Borrower or
Guarantor), independent public accountants and other experts selected by it and
shall not be liable for any action taken or omitted to be taken by it in good
faith in accordance with the advice of such counsel, accountants or experts.
SECTION 8.6. Liability of Agent.
------------------
Neither Agent nor any of its affiliates nor any of their respective
directors, officers, agents or employees shall be liable for any action taken or
not taken by Agent in connection with any of the Loan Documents in the absence
of its own gross negligence or willful misconduct. Neither Agent nor any of its
affiliates nor any of their respective directors, officers, agents or employees
shall be responsible for or have any duty to ascertain, inquire into or verify
(a) any statement, warranty or representation made in connection with any of the
Loan Documents, or any borrowing hereunder, (b) the performance or observance of
any of the covenants or agreements of Borrower or Guarantor, (c) the
satisfaction of any condition specified in Article IV., or (d) the validity,
effectiveness or genuineness of any of the Loan Documents or any other
instrument or writing furnished in connection herewith or therewith. Agent
shall not incur any liability by acting in reliance upon any notice, consent,
certificate, statement, or other writing (which may be a bank wire, telex or
similar writing) believed by it to be genuine or to be signed by the proper
party or parties.
SECTION 8.7. Indemnification of Agent.
------------------------
Lenders agree to indemnify Agent (to the extent not reimbursed by Borrower
and without limiting the obligation of Borrower to do so) in accordance with
Lenders'
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respective Pro Rata Shares, from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind or nature whatsoever which may at any time
be imposed on, incurred by, or asserted against Agent in any way relating to or
arising out of the Loan Documents or any action taken or omitted by Agent under
the Loan Documents; provided, however, that no Lender shall be liable for any
portion of such liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements (i) to the extent arising
from Agent's gross negligence or willful misconduct or (ii) if Agent fails to
follow the written direction of the Majority Lenders unless such failure is
pursuant to Agent's good faith reliance on the advice of counsel of which
Lenders have received notice. Without limiting the generality of the foregoing,
each Lender agrees to reimburse Agent promptly upon demand for its ratable share
of any out-of-pocket expenses (including counsel fees) incurred by Agent in
connection with the preparation, execution, administration, or enforcement of,
or legal advice with respect to the rights or responsibilities of the parties
under, the Loan Documents, to the extent that Agent is not reimbursed for such
expenses by Borrower. The agreements in this Section shall survive the payment
of the Loans and all other amounts payable hereunder or under the other Loan
Documents and the termination of this Agreement.
SECTION 8.8. Credit Decision.
---------------
Each Lender expressly acknowledges that neither Agent nor any of its
officers, directors, employees, agents, attorneys-in-fact or other affiliates
has made any representations or warranties to such Lender and that no act by
Agent hereinafter taken, including any review of the affairs of Borrower or
Guarantor, shall be deemed to constitute any representation or warranty by Agent
to any Lender. Each Lender acknowledges that it has, independently and without
reliance upon Agent, any other Lender or counsel to Agent, and based on the
financial statements of Borrower or Guarantor and its affiliates, its review of
the Loan Documents, the legal opinions required to be delivered to it hereunder,
the advice of its own counsel and such other documents and information as it has
deemed appropriate, made its own credit and legal analysis and decision to enter
into this Agreement and the transaction contemplated hereby. Each Lender also
acknowledges that it will, independently and without reliance upon Agent, any
other Lender or counsel to Agent, and based on such review, advice, documents
and information as it shall deem appropriate at the time, continue to make its
own decisions in taking or not taking action under the Loan Documents. Except
for notices, reports and other documents expressly required to be furnished to
Lenders by Agent hereunder, Agent shall have no duty or responsibility to
provide any Lender with any credit or other information concerning the business,
operations, property, financial and other condition or creditworthiness of
Borrower, Guarantor, any other Related Company or any other Affiliate thereof
which may come into possession of Agent or any of its officers, directors,
employees, agents, attorneys-in-fact or other affiliates.
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SECTION 8.9. Successor Agent.
---------------
Agent may resign at any time by giving 30 days' prior written notice
thereof, to Lenders and Borrower. Agent may be removed as Agent under the Loan
Documents for good cause upon 30 days' prior written notice to Agent by the
Majority Lenders. Upon any such resignation or removal, the Majority Lenders
shall have the right to appoint a successor Agent. If no successor Agent shall
have been so appointed by the Majority Lenders, and shall have accepted such
appointment, within 30 days after the current Agent's giving of notice of
resignation or the Majority Lenders' removal of the current Agent, then the
current Agent may, on behalf of Lenders, appoint a successor Agent, which shall
be a Lender, if any Lender shall be willing to serve. Any successor Agent must
be a bank whose debt obligations (or whose parent's debt obligations) are rated
not less than investment grade or its equivalent by Xxxxx'x Investors Service,
Inc. or not less than investment grade or its equivalent by Standard & Poor's
Corporation and which has total assets in excess of $10,000,000,000. Upon the
acceptance of its appointment as Agent hereunder by a successor Agent, such
successor Agent shall thereupon succeed to and become vested with all the rights
and duties of the current Agent, and the current Agent shall be discharged from
its duties and obligations hereunder. The current Agent shall at the expense of
Borrower transfer all Collateral then held by it to such successor Agent and
execute and deliver to such successor Agent such instruments of transfer as may
be reasonably necessary to accomplish such succession. After any current
Agent's resignation hereunder as Agent, the provisions of this Article shall
inure to its benefit as to any actions taken or omitted to be taken by it while
it was Agent.
SECTION 8.10. Approvals and Other Actions by Majority Lenders.
-----------------------------------------------
Each of the following shall require the approval of, or may be taken at the
request of, the Majority Lenders:
(a) Approval of the terms of Subordinated Indebtedness to be issued by
Guarantor under Section 6.(g)(iii) of the Guaranty, as provided in the
definition of the term "Subordinated Indebtedness";
(b) Approval of restrictions on the trading of Traded Securities, as
provided in the definition of the term "Traded Securities";
(c) Approval of certain payments by Guarantor under Section 6.(k)(i) of
the Guaranty after the occurrence of an Event of Default under Section 7.1.(a);
(d) Termination of the Commitments and acceleration of the Obligations
upon the occurrence of an Event of Default as provided in Section 7.2.;
(e) Removing Agent for good cause and approving of its replacement as
provided in Section 8.9.;
(f) Consenting to any amendment, supplement, restatement or other
modification to any of the terms of the Guarantor Note; and
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(g) Except as specifically provided otherwise in Section 9.7., any consent
or approval regarding, any waiver of the performance or observance by Borrower
of and the waiver of the continuance of any Default or Event of Default in
respect of, any term of this Agreement or any other Loan Document.
ARTICLE IX. MISCELLANEOUS
SECTION 9.1. Notices.
-------
All notices, requests and other communications to any party under the Loan
Documents shall be in writing (including bank wire, facsimile transmission or
similar writing) and shall be given to such party as follows:
If to Borrower:
SC Realty Incorporated
0000 Xxxxxx Xxxxxx Xxxxxxx, Xxxxx 000
Xxx Xxxxx, Xxxxxx 00000
Attention: Xxxxx Xxxx
Telecopier: (000) 000-0000
Telephone: (000) 000-0000
with a copy to:
Xxxxx, Xxxxx & Xxxxx
000 Xxxxx XxXxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: J. Xxxx Xxxxxxxxx
Telecopier: (000) 000-0000
Telephone: (000) 000-0000
If to a Lender or Agent:
To such Lender's or Agent's Lending Office
or as to each party at such other address as such party shall designate in a
written notice to the other parties. Each such notice, request or other
communication shall be effective (a) if given by mail, 72 hours after such
communication is deposited in the mails with first class postage prepaid,
addressed as aforesaid or (b) if given by any other means (including facsimile),
when delivered at the applicable address provided for in this Section; provided
that notices to Agent under Article II., and any notice of a change of address
for notices, shall not be effective until received. In addition to the Agent's
Lending Office, Borrower shall send copies of the information described in
Section 6.1. to the following address of Agent:
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Xxxxx Fargo Realty Advisors Funding, Incorporated
Real Estate Group
Xxxx Center
0000 Xxxx Xxxxxx, Xxxxx 000
Xxxxxx, Xxxxxxxxxx 00000
Attention: Xx. Xxxxx Xxxxx
SECTION 9.2. No Waivers.
----------
No failure or delay by Agent or any Lender in exercising any right, power
or privilege under any Loan Document shall operate as a waiver thereof nor shall
any single or partial exercise thereof preclude any other or further exercise
thereof or the exercise of any other right, power or privilege. The rights and
remedies provided in the Loan Documents shall be cumulative and not exclusive of
any rights or remedies provided by law.
SECTION 9.3. Expenses.
---------
Borrower will pay on demand all present and future reasonable expenses of:
(a) Agent in connection with the negotiation, preparation, execution,
delivery and administration (including reasonable out-of-pocket costs and
expenses incurred in connection with the assignment of Commitments pursuant to
Section 9.8.) of this Agreement, the Notes and each of the other Loan Documents,
whenever the same shall be executed and delivered, including appraisers' fees,
search fees, recording fees and the reasonable fees and disbursements of: (i)
Xxxxxx & Bird, counsel for Agent, and (ii) each local counsel retained by Agent;
(b) Agent in connection with the negotiation, preparation, execution and
delivery of any waiver, amendment or consent by Agent or any Lender relating to
this Agreement, the Notes or any of the other Loan Documents or sales of
participations in any Lender's Commitment, including the reasonable fees and
disbursements of counsel to Agent;
(c) Agent and each of Lenders in connection with any restructuring,
refinancing or "workout" of the transactions contemplated by this Agreement, the
Notes and the other Loan Documents, including the reasonable fees and
disbursements of counsel to Agent actually incurred;
(d) Agent and each of Lenders, after the occurrence of a Default or Event
of Default, in connection with the collection or enforcement of the obligations
of Borrower or Guarantor under this Agreement, the Notes or any other Loan
Document, including the reasonable fees and disbursements of counsel to Agent or
to any Lender actually incurred if such collection or enforcement is done by or
through an attorney;
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(e) Subject to any limitation contained in Section 9.5., Agent and each of
Lenders in connection with prosecuting or defending any claim in any way arising
out of, related to, or connected with this Agreement, the Notes or any of the
other Loan Documents, including the reasonable fees and disbursements of counsel
to Agent or any Lender actually incurred and of experts and other consultants
retained by Agent or any Lender in connection therewith;
(f) Agent and each of Lenders, after the occurrence of a Default or Event
of Default, in connection with the exercise by Agent or any Lender of any right
or remedy granted to it under this Agreement, the Notes or any of the other Loan
Documents including the reasonable fees and disbursements of counsel to Agent or
any Lender actually incurred;
(g) Agent in connection with costs and expenses incurred by Agent in
gaining possession of, maintaining, appraising, selling, preparing for sale and
advertising to sell the Collateral, whether or not a sale is consummated; and
(h) Agent and each of Lenders, to the extent not already covered by any of
the preceding subsections, in connection with any bankruptcy or other proceeding
of the type described in Sections 7.1.(h) or (i), and the reasonable fees and
disbursements of counsel to Agent and any Lender actually incurred in connection
with the representation of Agent or such Lender in any matter relating to or
arising out of any such proceeding, including without limitation (i) any motion
for relief from any stay or similar order, (ii) the negotiation, preparation,
execution and delivery of any document relating to Agent or such Lender and
(iii) the negotiation and preparation of any plan of reorganization of Borrower
or Guarantor, whether proposed by Borrower or Guarantor, Lenders or any other
Person, and whether such fees and expenses are incurred prior to, during or
after the commencement of such proceeding or the confirmation or conclusion of
any such proceeding.
SECTION 9.4. Stamp, Intangible and Recording Taxes.
-------------------------------------
Borrower will pay any and all stamp, intangible, registration, recordation
and similar taxes, fees or charges and shall indemnify Agent and each Lender
against any and all liabilities with respect to or resulting from any delay in
the payment or omission to pay any such taxes, fees or charges, which may be
payable or determined to be payable in connection with the execution, delivery,
recording, performance or enforcement of this Agreement, the Notes and any of
the other Loan Documents or the perfection of any rights or Liens thereunder.
SECTION 9.5. Indemnification.
---------------
Borrower shall and hereby agrees to indemnify, defend and hold harmless
Agent and each of Lenders and their respective directors, officers, agents and
employees from and against (a) any and all losses, claims, damages, liabilities,
deficiencies, judgments or expenses incurred by any of them (except to the
extent that it results from their own gross
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negligence or willful misconduct) arising out of or by reason of any litigation,
investigations, claims or proceedings which arise out of or are in any way
related to: (i) this Agreement or the transactions contemplated thereby; (ii)
the making of Loans; (iii) any actual or proposed use by Borrower of the
proceeds of the Loans; (iv) the Contribution or (v) Agent's or Lenders' entering
into this Agreement, the other Loan Documents or any other agreements and
documents relating hereto, including, without limitation, amounts paid in
settlement, court costs and the reasonable fees and disbursements of counsel
incurred in connection with any such litigation, investigation, claim or
proceeding or any advice rendered in connection with any of the foregoing and
(b) any such losses, claims, damages, liabilities, deficiencies, judgments or
expenses incurred in connection with any remedial or other similar action taken
by Borrower, Agent or any of Lenders in connection with the required compliance
by Borrower or any of the Subsidiaries, or any of their respective properties,
with any federal, state or local Environmental Laws or other material
environmental rules, regulations, orders, directions, ordinances, criteria or
guidelines. If and to the extent that the obligations of Borrower hereunder are
unenforceable for any reason, Borrower hereby agrees to make the maximum
contribution to the payment and satisfaction of such obligations which is
permissible under Applicable Law. Borrower's obligations hereunder shall survive
any termination of this Agreement and the other Loan Documents and the payment
in full of the Obligations, and are in addition to, and not in substitution of,
any other of its other obligations set forth in this Agreement and the other
Loan Documents.
SECTION 9.6. Setoff.
------
In addition to any rights now or hereafter granted under Applicable Law and
not by way of limitation of any such rights, each Lender is hereby authorized by
Borrower, at any time or from time to time, without notice to Borrower or to any
other Person, any such notice being hereby expressly waived, to set-off and to
appropriate and to apply any and all deposits (general or special, including,
but not limited to, indebtedness evidenced by certificates of deposit, whether
matured or unmatured) and any other indebtedness at any time held or owing by
such Lender or any Affiliate of such Lender, to or for the credit or the account
of Borrower against and on account of any of the Obligations then due and owing
after the expiration of any applicable grace periods. Borrower agrees, to the
fullest extent it may effectively do so under Applicable Law, that any holder of
a participation in a Note, whether or not acquired pursuant to the foregoing
arrangements, may exercise rights of setoff or counterclaim and other rights
with respect to such participation as fully as if such holder of a participation
were a direct creditor of Borrower in the amount of such participation.
SECTION 9.7. Amendments.
----------
Any consent or approval required or permitted by this Agreement or in any
other Loan Document (other than any agreement evidencing the fees referred to in
Section 3.1.(d)) to be given by Lenders may be given, and the performance or
observance by Borrower or Guarantor of any terms of any such Loan Document or
the continuance of any Default or Event of Default may be waived (either
generally or in a particular instance
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and either retroactively or prospectively) with, but only with, the written
consent of the Majority Lenders. Any provision of this Agreement or of any other
Loan Document (other than any agreement evidencing the fees referred to in
Section 3.1.(d)) may be amended or otherwise modified with, but only with, the
written consent of Borrower or Guarantor, as applicable, and the Majority
Lenders. Any provision of any agreement evidencing the fees referred to in
Section 3.1.(d) may be amended or otherwise modified only in writing by Agent
and Borrower, and the performance or observance by Borrower of any terms of any
such agreement may be waived only with the written consent of Agent.
Notwithstanding the foregoing, none of the following may be amended or otherwise
modified, nor may compliance by Borrower or Guarantor, as applicable thereunder
or with respect thereto be waived, without the written consent of all Lenders
and Borrower or Guarantor, as applicable:
(a) the principal amount of any Loan (including forgiveness of any amount
of principal);
(b) the rates of interest on the Loans and the amount of any interest
payable on the Loans (including the forgiveness of any accrued but
unpaid interest);
(c) the dates on which any principal or interest payable by Borrower
under any Loan Document is due;
(d) the provisions of (i) the first sentence of Section 2.1., Section
6.7., Section 6.13., and this Section and (ii) Section 6.(l) of the
Guaranty;
(e) the Revolving Credit Termination Date;
(f) the Termination Date;
(g) the definition of Borrowing Base, Commitment, Majority Lenders (or
any minimum requirement necessary for Lenders or Majority Lenders to
take action hereunder), Market Value, Pro Rata Share, Qualifying
Securities, Revolving Commitment and Traded Securities; and
(h) the amount and payment date of any fees.
Further, no amendment, waiver or consent unless in writing and signed by Agent,
in addition to Lenders required hereinabove to take such action, shall affect
the rights or duties of Agent under this Agreement or any of the other Loan
Documents. Further, no Collateral shall be released or disposed of by the Agent
unless all of the Lenders so direct the Agent in writing or unless released or
disposed of as permitted by, and in accordance with, Section 8.3.(b) or (c).
Further, the Guarantor shall not be released from the Guaranty, nor shall the
Guaranty be terminated (except as expressly permitted by the terms thereof),
unless all of the Lenders consent thereto in writing. No waiver shall extend to
or affect any obligation not expressly waived or impair any right consequent
thereon. No course of dealing or delay or omission on the part of any Lender or
Agent in exercising any right shall operate as a waiver thereof or otherwise be
prejudicial thereto.
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No notice to or demand upon Borrower shall entitle Borrower to other or further
notice or demand in similar or other circumstances. Borrower and Lenders hereby
authorize Agent to modify this Agreement by unilaterally amending or
supplementing Annex I from time to time in the manner requested by Borrower,
Agent or any Lender in order to reflect any assignments or transfers of the
Commitments as provided for hereunder; provided, however, that Agent shall
promptly deliver a copy of any such modification to Borrower and each Lender.
SECTION 9.8. Successors and Assigns.
----------------------
(a) The provisions of this Agreement shall be binding upon and inure to
the benefit of the parties hereto and their respective successors and assigns,
except that Borrower may not assign or otherwise transfer any of its rights
under this Agreement without the prior written consent of all Lenders.
(b) Any Lender may at any time grant to one or more banks or other
financial institutions which are not affiliates of, or otherwise related in any
way to, Borrower or Guarantor (each a "Participant") participating interests in
its Commitment or the Obligations owing to such Lender; provided, however, (i)
no Lender may grant a participating interest in its Commitment, or if the
Commitments have been terminated, the aggregate outstanding principal balance of
Notes held by it, in an amount less than $10,000,000 and (ii) after giving
effect to any such participation by Agent in its capacity as a Lender, the
amount of its Commitment, or if the Commitments have been terminated, the
aggregate outstanding principal balance of Notes held by it, in which it has not
granted any participating interests must be at least $10,000,000. Except as
otherwise provided in Section 9.6., no Participant shall have any rights or
benefits under this Agreement or any other Loan Document. In the event of any
such grant by a Lender of a participating interest to a Participant, such Lender
shall remain responsible for the performance of its obligations hereunder, and
Borrower and Agent shall continue to deal solely and directly with such Lender
in connection with such Lender's rights and obligations under this Agreement.
Any agreement pursuant to which any Lender may grant such a participating
interest shall provide that such Lender shall retain the sole right and
responsibility to enforce the obligations of Borrower hereunder including,
without limitation, the right to approve any amendment, modification or waiver
of any provision of this Agreement; provided, however, such Lender may agree
with the Participant that it will not, without the consent of the Participant,
agree to (i) increase, or except as contemplated by Section 2.11., extend the
term or extend the time or waive any requirement for the reduction or
termination of, such Lender's Commitment, (ii) extend the date fixed for the
payment of principal of or interest on the Loans or portions thereof owing to
such Lender, (iii) reduce the amount of any such payment of principal, (iv)
reduce the rate at which interest is payable thereon or (v) any release of all
or substantially all of the Collateral. An assignment or other transfer which
is not permitted by subsection (c) or (d) below shall be given effect for
purposes of this Agreement only to the extent of a participating interest
granted in accordance with this subsection (b).
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(c) Any Lender may with the prior written consent of Agent and Borrower
(which consent, in each case, shall not be unreasonably withheld) at any time
assign to one or more banks or other financial institutions which are not
affiliates of, or otherwise related in any way to, Borrower or Guarantor (each
an "Assignee") all or a portion of its rights and obligations under this
Agreement and the Notes; provided, however, (i) no such consent by Borrower or
Agent shall be required in the case of any assignment to another Lender or any
affiliate of such Lender or another Lender; (ii) any partial assignment shall be
in an amount at least equal to $10,000,000 and after giving effect to such
assignment the assigning Lender retains a Commitment, or if the Commitments have
been terminated, holds Notes having an aggregate outstanding principal balance,
of at least $10,000,000; (iii) each such assignment shall be effected by means
of an Assignment and Acceptance Agreement. Upon execution and delivery of such
instrument and payment by such Assignee to such transferor Lender of an amount
equal to the purchase price agreed between such transferor Lender and such
Assignee, such Assignee shall be deemed to be a Lender party to this Agreement
and shall have all the rights and obligations of a Lender with a Commitment as
set forth in such Assignment and Acceptance Agreement, and the transferor Lender
shall be released from its obligations hereunder to a corresponding extent, and
no further consent or action by any party shall be required. Upon the
consummation of any assignment pursuant to this subsection (c), the transferor
Lender, Agent and Borrower shall make appropriate arrangements so that new Notes
are issued to the Assignee and such transferor Lender, as appropriate. In
connection with any such assignment, the transferor Lender shall pay to Agent an
administrative fee for processing such assignment in the amount of $3,000.
(d) In addition to the assignments and participations permitted under the
foregoing provisions of this Section, any Lender may assign and pledge all or
any portion of its Loans and its Notes to any Federal Reserve Bank as collateral
security pursuant to Regulation A and any Operating Circular issued by such
Federal Reserve Bank, and such Loans and Notes shall be fully transferable as
provided therein. No such assignment shall release the assigning Lender from
its obligations hereunder.
(e) A Lender may furnish any information concerning Guarantor, Borrower or
any of its Subsidiaries in the possession of such Lender from time to time to
Assignees and Participants (including prospective Assignees and Participants).
(f) Anything in this Section to the contrary notwithstanding, no Lender
may assign or participate any interest in any Loan held by it hereunder to
Guarantor, Borrower or any of their respective affiliates or Subsidiaries.
SECTION 9.9. Governing Law.
-------------
THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF GEORGIA.
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SECTION 9.10. Litigation.
----------
(a) EACH PARTY HERETO ACKNOWLEDGES THAT ANY DISPUTE OR CONTROVERSY BETWEEN
OR AMONG BORROWER, AGENT OR ANY OF LENDERS WOULD BE BASED ON DIFFICULT AND
COMPLEX ISSUES OF LAW AND FACT AND THAT A TRIAL BY JURY COULD RESULT IN
SIGNIFICANT DELAY AND EXPENSE. ACCORDINGLY, TO THE FULLEST EXTENT PERMITTED BY
APPLICABLE LAW, EACH OF LENDERS, AGENT AND BORROWER HEREBY WAIVES TRIAL BY JURY
IN ANY ACTION OR PROCEEDING OF ANY KIND OR NATURE IN ANY COURT OR TRIBUNAL IN
WHICH AN ACTION MAY BE COMMENCED BY OR AGAINST BORROWER ARISING OUT OF THIS
AGREEMENT, THE NOTES OR ANY OTHER LOAN DOCUMENT OR IN CONNECTION WITH THE
COLLATERAL OR ANY LIEN OR BY REASON OF ANY OTHER CAUSE OR DISPUTE WHATSOEVER
BETWEEN OR AMONG BORROWER, AGENT OR ANY OF LENDERS OF ANY KIND OR NATURE.
(b) BORROWER, AGENT AND EACH LENDER EACH HEREBY AGREES THAT THE FEDERAL
DISTRICT COURT OF THE NORTHERN DISTRICT OF GEORGIA OR, AT THE OPTION OF AGENT,
ANY STATE COURT LOCATED IN XXXXXX COUNTY, GEORGIA SHALL HAVE NON-EXCLUSIVE
JURISDICTION TO HEAR AND DETERMINE ANY CLAIMS OR DISPUTES BETWEEN OR AMONG
BORROWER, AGENT OR ANY OF LENDERS, PERTAINING DIRECTLY OR INDIRECTLY TO THIS
AGREEMENT, THE NOTES OR ANY OTHER LOAN DOCUMENT OR TO ANY MATTER ARISING
HEREFROM OR THEREFROM OR THE COLLATERAL. BORROWER EXPRESSLY SUBMITS AND
CONSENTS IN ADVANCE TO SUCH JURISDICTION IN ANY ACTION OR PROCEEDING COMMENCED
IN SUCH COURTS. THE CHOICE OF FORUM SET FORTH IN THIS SECTION SHALL NOT BE
DEEMED TO PRECLUDE THE BRINGING OF ANY ACTION BY AGENT OR ANY LENDER OR THE
ENFORCEMENT BY AGENT OR ANY LENDER OF ANY JUDGMENT OBTAINED IN SUCH FORUM IN ANY
OTHER APPROPRIATE JURISDICTION. FURTHER, BORROWER IRREVOCABLY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY OBJECTION WHICH IT MAY NOW OR
HEREAFTER HAVE TO THE LAYING OF THE VENUE OF ANY SUCH PROCEEDING BROUGHT IN SUCH
A COURT AND ANY CLAIM THAT ANY SUCH PROCEEDING BROUGHT IN SUCH A COURT HAS BEEN
BROUGHT IN AN INCONVENIENT FORUM.
(c) THE FOREGOING WAIVERS HAVE BEEN MADE WITH THE ADVICE OF COUNSEL AND
WITH A FULL UNDERSTANDING OF THE LEGAL CONSEQUENCES THEREOF, AND SHALL SURVIVE
THE PAYMENT OF THE LOANS AND ALL OTHER AMOUNTS PAYABLE HEREUNDER OR UNDER THE
OTHER LOAN DOCUMENTS AND THE TERMINATION OF THIS AGREEMENT.
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SECTION 9.11. Counterparts; Integration.
-------------------------
This Agreement may be signed in any number of counterparts, each of which
shall be an original, with the same effect as if the signatures thereto and
hereto were upon the same instrument. This Agreement, together with the other
Loan Documents, constitutes the entire agreement and understanding among the
parties hereto and supersedes any and all prior agreements and understandings,
oral or written, relating to the subject matter hereof.
SECTION 9.12. Notice of Final Agreement.
-------------------------
THIS AGREEMENT REPRESENTS THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY
NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL
AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE
PARTIES.
SECTION 9.13. Invalid Provisions.
------------------
Any provision of this Agreement or any other Loan Document held by a court
of competent jurisdiction to be illegal, invalid or unenforceable shall not
invalidate the remaining provisions of such Loan Document which shall remain in
full force and effect and the effect thereof shall be confined to the provision
held invalid or illegal.
SECTION 9.14. NO NOVATION; EFFECT OF AMENDMENT AND RESTATEMENT.
------------------------------------------------
THE PARTIES HERETO HAVE ENTERED INTO THIS AGREEMENT SOLELY TO AMEND AND
RESTATE THE TERMS OF THE EXISTING CREDIT AGREEMENT. THE PARTIES DO NOT INTEND
THIS AGREEMENT NOR THE TRANSACTIONS CONTEMPLATED HEREBY TO BE, AND THIS
AGREEMENT AND THE TRANSACTION CONTEMPLATED HEREBY SHALL NOT BE CONSTRUED TO BE,
A NOVATION OF ANY OF THE OBLIGATIONS OWING BY BORROWER UNDER OR IN CONNECTION
WITH ANY OF THE EXISTING CREDIT AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS (AS
DEFINED IN THE EXISTING CREDIT AGREEMENT). FURTHER, THE PARTIES DO NOT INTEND
THIS AGREEMENT NOR THE TRANSACTIONS CONTEMPLATED HEREBY TO AFFECT THE PERFECTION
OR PRIORITY OF ANY LIEN OF AGENT IN ANY OF THE COLLATERAL IN ANY WAY WHATSOEVER.
THE AMENDMENT AND RESTATEMENT OF THE EXISTING CREDIT AGREEMENT EFFECTED BY THIS
AGREEMENT SHALL BE DEEMED TO HAVE PROSPECTIVE APPLICATION ONLY UNLESS OTHERWISE
SPECIFICALLY STATED HEREIN. BORROWER CONFIRMS THAT (A) THE COLLATERAL
ASSIGNMENT OF REGISTRATION RIGHTS REMAINS IN FULL FORCE AND EFFECT AND (B)
REFERENCES THEREIN TO THE "CREDIT AGREEMENT" ARE REFERENCES TO THIS AGREEMENT.
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IN WITNESS WHEREOF, the parties hereto have caused this Amended and
Restated Credit Agreement to be duly executed by their respective authorized
officers as of the day and year first above written.
BORROWER:
SC REALTY INCORPORATED
By: /s/ Arial Amir
----------------------------------
Name: Arial Amir
-----------------------------
Title: Secretary
----------------------------
AGENT:
XXXXX FARGO REALTY ADVISORS
FUNDING, INCORPORATED, as Agent
By:
----------------------------------
Name:
-----------------------------
Title:
----------------------------
By: /s/ Xxxxxxxxx X. Xxxxxx
----------------------------------
Name: Xxxxxxxxx X. Xxxxxx
-----------------------------
Title: Assistant Secretary
----------------------------
LENDERS:
XXXXX FARGO REALTY ADVISORS
FUNDING, INCORPORATED, in its individual
capacity
By:
----------------------------------
Name:
-----------------------------
Title:
----------------------------
By: /s/ Xxxxxxxxx X. Xxxxxx
----------------------------------
Name: Xxxxxxxxx X. Xxxxxx
-----------------------------
Title: Assistant Secretary
----------------------------
[Signatures Continued on Next Page]
-66-
[Signature Page to Amended and Restated Credit Agreement dated as of
August 19, 1996 with SC Realty Incorporated]
TEXAS COMMERCE BANK NATIONAL ASSOCIATION
By: /s/ Xxxxx X. Xxxxx
--------------------------------
Name: Xxxxx X. Xxxxx
--------------------------
Title: Vice President
--------------------------
NATIONSBANK OF TEXAS, N.A.
By: /s/ Xxxxxxx Xxxxx
--------------------------------
Name: Xxxxxxx Xxxxx
--------------------------
Title: SVP
--------------------------
THE FIRST NATIONAL BANK OF BOSTON
By: /s/ Xxxxxx X. Xxxxxxxx
--------------------------------
Name: Xxxxxx X. Xxxxxxxx
--------------------------
Title: VP
--------------------------
BANK ONE, ARIZONA, NA
By: /s/ Xxxxxxx X. Xxxxx
--------------------------------
Name: Xxxxxxx X. Xxxxx
--------------------------
Title: Vice President
--------------------------
[Signatures Continued on Next Page]
-67-
[Signature Page to Amended and Restated Credit Agreement dated as of
August 19, 1996 with SC Realty Incorporated]
GUARANTY FEDERAL BANK, F.S.B.
By: /s/ Xxxxxxx Xxxxxxxx
--------------------------------
Name: Xxxxxxx Xxxxxxxx
--------------------------
Title: Vice President
--------------------------
FLEET NATIONAL BANK
By: /s/ Xxxxxxx X. Xxxxxxxx
--------------------------------
Name: Xxxxxxx X. Xxxxxxxx
--------------------------
Title: Asst. Vice President
--------------------------
DRESDNER BANK AG NEW YORK BRANCH
AND GRAND CAYMAN BRANCH
By: /s/ Xxxxxxxx Xxxxxxxxx
--------------------------------
Name: Xxxxxxxx Xxxxxxxxx
--------------------------
Title: Vice President
--------------------------
By: /s/ Xxxxxxxx Xxxxxxxxxxxxxx
--------------------------------
Name: Xxxxxxxx Xxxxxxxxxxxxxx
--------------------------
Title: Asst. Treasurer
--------------------------
[Signatures Continued on Next Page]
-68-
[Signature Page to Amended and Restated Credit Agreement dated as of
August 19, 1996 with SC Realty Incorporated]
BANK OF MONTREAL, CHICAGO BRANCH
By: /s/ ?????????????????????????
--------------------------------
Name: ??????????????????????
--------------------------
Title: Director
--------------------------
KREDIETBANK N.V., GRAND CAYMAN
BRANCH
By: /s/ Xxxxxx Xxxxxxxx
--------------------------------
Name: Xxxxxx Xxxxxxxx
--------------------------
Title: Vice President
--------------------------
By: /s/ X. X. Xxxxxxx
--------------------------------
Name: X. X. Xxxxxxx
--------------------------
Title: VP
--------------------------
COMMERZBANK AKTIENGESELLSCHAFT,
LOS ANGELES BRANCH
By: Christian Jagenberg
--------------------------------
Name: Christian Jagenberg
--------------------------
Title: SVP and Manager
--------------------------
By: /s/ Xxxxxx X. Xxxxxx
--------------------------------
Name: Xxxxxx X. Xxxxxx
--------------------------
Title: Vice President
--------------------------
-69-
