EXHIBIT 10.1
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CREDIT AGREEMENT
by and among
FOREST CITY RENTAL PROPERTIES CORPORATION
as Borrower
and
VARIOUS LENDING INSTITUTIONS
as Banks
and
KEYBANK NATIONAL ASSOCIATION
as Administrative Agent for the Banks
and
NATIONAL CITY BANK
as Syndication Agent for the Banks
Dated as of March 5, 2002
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TABLE OF CONTENTS
Article Page
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ARTICLE I DEFINITIONS.............................................................................................1
ARTICLE II TERM LOANS............................................................................................11
SECTION 2.01(a). TERM LOANS............................................................................11
SECTION 2.01(b). REPAYMENT OF TERM LOANS...............................................................11
SECTION 2.02(a). [Reserved]............................................................................11
SECTION 2.03. TERM NOTES...............................................................................11
ARTICLE III REVOLVING LOANS......................................................................................11
SECTION 3.01. AMOUNT OF THE REVOLVING LOAN FACILITY....................................................11
SECTION 3.02. REVOLVING LOAN COMMITMENTS...............................................................12
SECTION 3.03. REVOLVING LOANS..........................................................................12
SECTION 3.04. PURPOSE OF THE REVOLVING LOANS...........................................................12
SECTION 3.05. REVOLVING LOAN NOTES.....................................................................12
SECTION 3.06. LETTERS OF CREDIT........................................................................13
SECTION 3.07. REPAYMENT OF THE REVOLVING LOAN NOTES....................................................14
SECTION 3.08. EXTENSIONS OF THE REVOLVING LOANS........................................................15
ARTICLE IV INTEREST ON THE TERM LOANS AND THE REVOLVING LOANS....................................................15
SECTION 4.01(a). INTEREST OPTIONS......................................................................15
SECTION 4.01(b). LIBOR RATE OPTION.....................................................................15
SECTION 4.01(c). PRIME RATE OPTION.....................................................................15
SECTION 4.01(d). INDICATED SPREAD......................................................................16
SECTION 4.02. INTEREST PERIODS.........................................................................16
SECTION 4.03. INTEREST PAYMENT DATES...................................................................17
SECTION 4.04. INTEREST CALCULATIONS....................................................................17
SECTION 4.05. POST-DEFAULT RATE........................................................................17
SECTION 4.06. RESERVES OR DEPOSIT REQUIREMENTS, ETC....................................................17
SECTION 4.07. TAX LAW, ETC.............................................................................18
SECTION 4.08. INDEMNITY................................................................................19
SECTION 4.09. EURODOLLAR DEPOSITS UNAVAILABLE OR INTEREST RATE UNASCERTAINABLE.........................19
SECTION 4.10. CHANGES IN LAW RENDERING LIBOR LOANS UNLAWFUL............................................19
SECTION 4.11. FUNDING..................................................................................20
ARTICLE V AGREEMENTS AND CONDITIONS APPLICABLE TO ALL LOANS......................................................20
SECTION 5.01. NOTICE OF BORROWING......................................................................20
SECTION 5.02. DISBURSEMENT OF FUNDS....................................................................20
SECTION 5.03. CONDITIONS TO LOANS......................................................................21
SECTION 5.04. PAYMENT ON NOTES, ETC....................................................................21
(i)
SECTION 5.05. PREPAYMENT...............................................................................22
SECTION 5.06. UNUSED COMMITMENT FEES...................................................................23
ARTICLE VI CONDITIONS PRECEDENT..................................................................................23
SECTION 6.01. CORPORATE AND LOAN DOCUMENTS.............................................................23
SECTION 6.02. OPINION OF COUNSEL FOR PARENT............................................................24
SECTION 6.03. JUDGMENT, ORDERS.........................................................................24
SECTION 6.04. LITIGATION...............................................................................24
SECTION 6.05. NOTICE OF BORROWING......................................................................25
SECTION 6.06. OPINION OF COUNSEL FOR BORROWER..........................................................25
SECTION 6.07. PAYMENT OF FEES..........................................................................25
SECTION 6.08. ADVERSE CHANGE, ETC......................................................................25
SECTION 6.09. TERMINATION OF CREDIT AGREEMENT..........................................................25
SECTION 6.10. AMENDMENTS TO INDEMNITY AGREEMENT AND SUBORDINATION AGREEMENT............................25
ARTICLE VII AFFIRMATIVE COVENANTS................................................................................25
SECTION 7.01. PAYMENT OF AMOUNTS DUE...................................................................25
SECTION 7.02. EXISTENCE, BUSINESS, ETC.................................................................25
SECTION 7.03. MAINTENANCE OF PROPERTIES................................................................26
SECTION 7.04. PAYMENT OF TAXES, ETC....................................................................26
SECTION 7.05. FINANCIAL STATEMENTS.....................................................................26
SECTION 7.06. INSPECTION...............................................................................27
SECTION 7.07. ENVIRONMENTAL COMPLIANCE.................................................................27
SECTION 7.08. ERISA....................................................................................28
SECTION 7.09. INSURANCE................................................................................29
SECTION 7.10. MONEY OBLIGATIONS........................................................................29
SECTION 7.11. RECORDS..................................................................................29
SECTION 7.12. FRANCHISES...............................................................................29
SECTION 7.13. NOTICE...................................................................................30
SECTION 7.14. POST CLOSING ITEMS.......................................................................30
SECTION 7.15. FURTHER ASSURANCES; REPLACEMENT NOTES....................................................30
SECTION 7.16. NOTICE OF DEFAULT OR LITIGATION..........................................................30
SECTION 7.17. USE OF PROCEEDS..........................................................................31
ARTICLE VIII NEGATIVE COVENANTS..................................................................................31
SECTION 8.01. PLAN.....................................................................................31
SECTION 8.02. COMBINATIONS.............................................................................31
SECTION 8.03. BULK TRANSFERS...........................................................................31
SECTION 8.04. BORROWINGS...............................................................................31
SECTION 8.05. LIENS....................................................................................32
SECTION 8.06. LOANS RECEIVABLE.........................................................................33
SECTION 8.07. GUARANTEES...............................................................................33
SECTION 8.08. AMENDMENT OF ARTICLES OF INCORPORATION AND/OR REGULATIONS................................34
SECTION 8.09. FISCAL YEAR..............................................................................34
SECTION 8.10. REGULATION U.............................................................................34
(ii)
SECTION 8.11. NO PLEDGE................................................................................34
SECTION 8.12. TRANSACTIONS WITH AFFILIATES.............................................................35
SECTION 8.13. DEBT SERVICE COVERAGE RATIO..............................................................35
SECTION 8.14(a). RESTRICTIONS ON DISTRIBUTIONS DURING AN EVENT OF DEFAULT OTHER THAN
A PAYMENT DEFAULT..............................................................................35
SECTION 8.14(b). RESTRICTIONS ON DISTRIBUTIONS DURING A PAYMENT DEFAULT................................36
SECTION 8.15. CROSS COLLATERALIZATION AND CROSS DEFAULTS...............................................36
SECTION 8.16. SENIOR NOTES.............................................................................36
ARTICLE IX REPRESENTATIONS AND WARRANTIES........................................................................37
SECTION 9.01. EXISTENCE................................................................................37
SECTION 9.02. RIGHT TO ACT.............................................................................37
SECTION 9.03. BINDING EFFECT...........................................................................37
SECTION 9.04. LITIGATION...............................................................................37
SECTION 9.05. EMPLOYEE RETIREMENT INCOME SECURITY ACT..................................................38
SECTION 9.06. ENVIRONMENTAL COMPLIANCE.................................................................38
SECTION 9.07. SOLVENCY.................................................................................38
SECTION 9.08. FINANCIAL STATEMENTS.....................................................................38
SECTION 9.09. DEFAULTS.................................................................................39
SECTION 9.10. OPERATIONS...............................................................................39
SECTION 9.11. TITLE TO PROPERTIES; PATENTS, TRADE MARKS, ETC...........................................39
SECTION 9.12. COMPLIANCE WITH OTHER INSTRUMENTS........................................................39
SECTION 9.13. MATERIAL RESTRICTIONS....................................................................39
SECTION 9.14. CORRECTNESS OF DATA FURNISHED............................................................40
SECTION 9.15. TAXES....................................................................................40
SECTION 9.16. COMPLIANCE WITH LAWS.....................................................................40
SECTION 9.17. REGULATION U, ETC........................................................................40
SECTION 9.18. HOLDING COMPANY ACT......................................................................41
SECTION 9.19. SECURITIES ACT, ETC......................................................................41
SECTION 9.20. INVESTMENT COMPANY ACT...................................................................41
SECTION 9.21. INDEBTEDNESS OF SUBSIDIARIES.............................................................41
SECTION 9.22. GUARANTIES...............................................................................41
SECTION 9.23. INDEBTEDNESS.............................................................................41
ARTICLE X EVENTS OF DEFAULT......................................................................................42
SECTION 10.01. PAYMENTS................................................................................42
SECTION 10.02. COVENANTS...............................................................................42
SECTION 10.03. REPRESENTATIONS AND WARRANTIES..........................................................42
SECTION 10.04. CROSS DEFAULT...........................................................................42
SECTION 10.05. TERMINATION OF PLAN.....................................................................42
SECTION 10.06. DOMESTIC SUBSIDIARY SOLVENCY............................................................43
SECTION 10.07. BORROWER'S SOLVENCY.....................................................................43
(iii)
SECTION 10.08. CHANGE OF OWNERSHIP; CHANGE OF MANAGEMENT EVENT.........................................44
SECTION 10.09. JUDGMENTS...............................................................................44
SECTION 10.10. DEFAULT UNDER GUARANTY OR SENIOR NOTES..................................................44
SECTION 10.11. DEFAULT UNDER SUBORDINATION AGREEMENT...................................................44
ARTICLE XI REMEDIES UPON DEFAULT.................................................................................44
SECTION 11.01. OPTIONAL DEFAULTS.......................................................................44
SECTION 11.02. AUTOMATIC DEFAULTS......................................................................45
SECTION 11.03. REMEDIES RELATING TO LETTERS OF CREDIT..................................................45
SECTION 11.04. OFFSETS.................................................................................45
SECTION 11.05. APPLICATION OF PAYMENTS.................................................................45
ARTICLE XII THE AGENT............................................................................................45
SECTION 12.01. APPOINTMENT AND AUTHORIZATION...........................................................45
SECTION 12.02. DELEGATION OF DUTIES....................................................................46
SECTION 12.03. EXCULPATORY PROVISIONS..................................................................46
SECTION 12.04. RELIANCE BY AGENT.......................................................................46
SECTION 12.05. RESIGNATION OR REMOVAL OF THE AGENT; SUCCESSOR AGENT....................................47
SECTION 12.06. NOTE HOLDERS............................................................................47
SECTION 12.07. CONSULTATION WITH COUNSEL...............................................................47
SECTION 12.08. DOCUMENTS...............................................................................48
SECTION 12.09. AGENT AND AFFILIATES....................................................................48
SECTION 12.10. KNOWLEDGE OF DEFAULT....................................................................48
SECTION 12.11. INDEMNIFICATION.........................................................................48
SECTION 12.12. EQUALIZATION PROVISION..................................................................49
ARTICLE XIII MISCELLANEOUS.......................................................................................49
SECTION 13.01. NO WAIVER; CUMULATIVE REMEDIES..........................................................49
SECTION 13.02. AMENDMENTS, CONSENTS....................................................................49
SECTION 13.03. NOTICES.................................................................................50
SECTION 13.04. COSTS, EXPENSES AND TAXES...............................................................50
SECTION 13.05. SURVIVAL OF REPRESENTATIONS AND WARRANTIES..............................................51
SECTION 13.06. OBLIGATIONS SEVERAL; NO FIDUCIARY OBLIGATIONS...........................................51
SECTION 13.07. EXECUTION IN COUNTERPARTS...............................................................51
SECTION 13.08. BINDING EFFECT; ASSIGNMENT..............................................................51
SECTION 13.09. GOVERNING LAW...........................................................................53
SECTION 13.10. SEVERABILITY OF PROVISIONS; CAPTIONS....................................................53
SECTION 13.11. PURPOSE.................................................................................53
SECTION 13.12. CONSENT TO JURISDICTION.................................................................53
SECTION 13.13. ENTIRE AGREEMENT........................................................................53
SECTION 13.14. JURY TRIAL WAIVER.......................................................................53
(iv)
SECTION 13.15. SURVIVAL................................................................................54
SECTION 13.16. INDEPENDENCE OF COVENANTS...............................................................54
SECTION 13.17. INTERPRETATION..........................................................................54
EXHIBITS
A BANKS AND COMMITMENT
B FORM OF GUARANTY
C FORM OF TERM NOTE
D FORM OF REVOLVING LOAN NOTE
E FORM OF LETTER OF CREDIT REQUEST
F FORM OF NOTICE OF BORROWING
SCHEDULES
3.03 AUTHORIZED FISCAL OFFICERS
3.06 OUTSTANDING LETTERS OF CREDIT
7.05 FORM COVENANT COMPLIANCE WORKSHEET
7.14 POST-CLOSING ITEM
8.04 PERMITTED SWAP AGREEMENT
8.15 PERMITTED INDEBTEDNESS
9.00 EXCEPTIONS TO REPRESENTATIONS AND WARRANTIES
9.16 COMPLIANCE WITH LAWS
9.22 OUTSTANDING GUARANTEES
9.23 OUTSTANDING INDEBTEDNESS
(v)
CREDIT AGREEMENT
Credit Agreement, effective as of March 5, 2002, between FOREST CITY
RENTAL PROPERTIES CORPORATION, an Ohio corporation (hereinafter sometimes called
the "Borrower"), the banking institutions named in Exhibit A attached hereto and
made a part hereof (hereinafter sometimes collectively called the "Banks" and
individually "Bank"), KEYBANK NATIONAL ASSOCIATION, Cleveland, Ohio, as
Administrative Agent for the Banks under this Agreement (the "Agent") and
NATIONAL CITY BANK, Cleveland, Ohio as Syndication Agent for the Banks under
this Agreement (the "Syndication Agent").
W I T N E S S E T H:
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WHEREAS, the Borrower has requested the Banks to make available to it a
revolving loan facility in the original principal amount of $250,000,000 and a
term loan facility in the original principal amount of $100,000,000; and
WHEREAS, the Banks are willing to make such revolving loan and term
loan facilities available to the Borrower upon the terms and subject to the
conditions set forth herein.
NOW, THEREFORE, it is mutually agreed as follows:
ARTICLE I
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DEFINITIONS
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As used in this Agreement, the following terms shall have the following
meanings:
"ADVANTAGE" shall mean any payment (whether made voluntarily or
involuntarily, by offset of any deposit or other Indebtedness or otherwise)
received by any Bank in respect of Borrower's Debt to the Banks if such payment
results in that Bank having a lesser share of Borrower's Debt to the Banks, than
was the case immediately before such payment.
"AFFILIATE" of any Person means any other Person directly or indirectly
controlling or controlled by or under direct or indirect common control with
such Person. For purposes of this definition, "control" when used with respect
to any Person means the power to direct the management and policies of such
Person, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise; and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.
"AGENT" means KeyBank National Association, in its capacity as
administrative agent for the Banks hereunder, and its successors in such
capacity.
"AGENTS" means collectively, the Agent and the Syndication Agent.
"AGREEMENT" means this Credit Agreement as the same may be from time to
time amended, supplemented, modified, extended and/or restated.
"AUTHORIZED FISCAL OFFICER" shall have the meaning set forth in Section
3.03(b) hereof.
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"BANK" means each bank listed on Exhibit A attached hereto and its
successors and assigns.
"BOARD OF DIRECTORS" shall mean either the board of directors of the
Parent or any duly constituted committee thereof.
"BORROWER" means Forest City Rental Properties Corporation, an Ohio
corporation.
"CAPITAL STOCK" of any Person shall mean any and all shares, interests,
participations, or other equivalents (however designated) of corporate stock or
other equity participations or interests including, without limitation,
partnership interests, whether general or limited, and membership interests,
whether of managing or non-managing members, of such Person.
"CHANGE OF MANAGEMENT EVENT" shall be deemed to have occurred at such
time as any two (2) of Xxxxx X. Xxxxxx, Xxxxxxx X. Xxxxxx, Xxxxxx X. Xxxxxx and
Xxxxxx X. Xxxxxx become unable or cease to hold the respective positions held by
such persons on the date of this Agreement, with all the responsibilities
normally associated with such positions, PROVIDED, that, no Change of Management
Event shall be deemed to have occurred if within one hundred twenty (120) days
the Borrower shall have obtained the reasonable approval of the Required Banks,
in their sole discretion, of one or more additional executives, such that the
remaining and new management executives as a group, have substantial and
sufficient knowledge, experience and capabilities in the management of a company
engaged in the operation of a multi-asset real estate business of the type
engaged in by the Borrower.
"CHANGE OF OWNERSHIP EVENT" shall be deemed to have occurred at such
time as either (a) any Person (other than a Permitted Holder) or any Persons
acting together that would constitute a "group" (a "Group") for purposes of
Section 13(d) of the Exchange Act or any successor provision thereto (other than
Permitted Holders), together with any Affiliates or Related Persons thereof,
shall beneficially own (within the meaning of Rule 13d-3 under the Exchange Act,
or any successor provision thereto) at least 30% of the aggregate voting power
of all classes of Voting Stock of the Parent; or (b) any Person or Group (other
than Permitted Holders), together with any Affiliates or Related Persons
thereof, shall succeed in having a sufficient number of its nominees elected to
the Board of Directors of the Parent such that such nominees, when added to any
existing director remaining on the Board of Directors of the Parent after such
election who was a nominee of or is an Affiliate or Related Person of such
Person or Group, will constitute a majority of the Board of Directors of the
Parent; or (c) the Permitted Holders referenced in clause (i) of the definition
of "Permitted Holder" shall cease to own at least 51% of the aggregate issued
and outstanding shares of the Voting Stock of the Parent; or (d) the Parent
shall cease to own at least one hundred percent (100%) on a fully diluted basis,
of the economic and voting interests of the Borrower.
"CLEVELAND BANKING DAY" shall mean a day on which the main office of
the Agent is open for the transaction of business.
"CLOSING DATE" shall have the meaning set forth in Section 13.08
hereof.
"CODE" means the Internal Revenue Code of 1986, as amended, or any
successor statute.
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"COMMITMENT" shall mean the obligation hereunder of each Bank to make
Term Loans and, until the Termination Date, Revolving Loans up to the amount set
forth opposite such Bank's name under the column headed "Maximum Amount" on
Exhibit A hereof (or such lesser amount as shall be determined pursuant to
Section 3.02(b) hereof).
"COMMON STOCK" of any Person shall mean Capital Stock of such Person
that does not rank prior, as to the payment of dividends or as to other amounts
upon any voluntary or involuntary liquidation, dissolution, or winding up of
such Person, to shares of Capital Stock or any other class of stock of such
Person.
"COMPLETION GUARANTY" shall mean any guarantee of performance by the
Borrower that construction of a real estate project will be completed in
accordance with applicable plans and specifications and that all costs
associated with such completion will be paid, provided, that such costs may
include an interest reserve only through completion of the project and not
through stabilization of such project.
"CONTINGENT OBLIGATION" shall mean, with respect to any Person at the
time of any determination, without duplication, any obligation, contingent or
otherwise, of such Person guaranteeing or having the economic effect of
guaranteeing any Indebtedness of any other Person in any manner, whether
directly or otherwise; PROVIDED, that the term "Contingent Obligation" shall not
include endorsements for collection or deposit, in each case in the ordinary
course of business. The amount of any Contingent Obligation shall be deemed to
be an amount equal to the stated or determinable amount of the Indebtedness in
respect of which such Contingent Obligation is made or, if not stated or
determinable, the maximum reasonable anticipated liability in respect thereof
(assuming such Person is required to perform thereunder).
"CONTROLLED GROUP" shall mean a controlled group of corporations as
defined in Section 1563 of the Code, of which the Borrower or any Subsidiary is
a part.
"CREDIT AGREEMENT" shall mean that certain Amended and Restated Credit
Agreement dated as of June 25, 1999, as amended by that certain First Amendment
to Amended and Restated Credit Agreement dated as of August 9, 2000 by and among
the Borrower, KeyBank National Association, National City Bank, The Huntington
National Bank, Comerica Bank, First Merit Bank, Credit Lyonnais, Firstar Bank
National Association, Manufacturers and Traders Trust Company, U.S. Bank
National Association and LaSalle Bank, N.A.
"DEBT" shall mean, collectively, all Indebtedness incurred by the
Borrower to the Banks pursuant to this Agreement, including, but not limited to,
the principal of and interest on all Notes and each extension, renewal or
refinancing thereof in whole or in part, the stated amounts of all letters of
credit issued by the Agent or the Banks hereunder, and the fees and any
prepayment premium payable hereunder.
"DEBT SERVICE COVERAGE RATIO" shall mean the ratio of (i) Net Operating
Income to (ii) the sum of (W) all scheduled principal payments (excluding
balloon payments) on non-recourse mortgage Indebtedness, plus (X) all interest
payments on such non-recourse mortgage Indebtedness, minus (Y) non-cash interest
expense accrued but not currently payable, up to a maximum of Five Million
Dollars ($5,000,000), excluding non-cash interest expense
-3-
accrued with respect to Indebtedness owing to the government of the United
States or any state or municipality thereof or any agencies of any of the
foregoing, minus (Z) non-cash interest expense accrued but not currently payable
solely with respect to Indebtedness owing to the government of the United States
or any state or municipality thereof or any agencies of any of the foregoing.
"DISTRIBUTIONS" shall have the meaning set forth in Section 8.14
hereof.
"DIVIDENDS" shall mean all dividends (in cash or otherwise) declared
and/or paid, capital returned, and other distributions of any kind made on any
share of Capital Stock outstanding at any time.
"DOMESTIC SUBSIDIARY" shall mean any Subsidiary organized under the
laws of any state of the United States of America which conducts the major
portion of its business within the United States.
"DRAW" shall have the meaning set forth in Section 3.06(b) hereof.
"ENVIRONMENTAL LAWS" shall mean all provisions of law, statutes,
ordinances, rules, regulations, permits, licenses, judgments, writs,
injunctions, decrees, orders, awards and standards promulgated by the government
of the United States of America or by any state or municipality thereof or by
any court, agency, instrumentality, regulatory authority or commission of any of
the foregoing, now or hereafter in effect, and in each case as amended,
concerning or relating to health, safety and protection of, or regulation of the
discharge of substances into, the environment.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974,
as amended from time to time, and the regulations and rulings issued thereunder.
"ERISA AFFILIATE" shall mean each person (as defined in Section 3(9) of
ERISA) which together with the Borrower, the Parent or any Subsidiary of the
Borrower or any subsidiary of the Parent would be deemed a "single employer"
within the meaning of Sections 414(b), (c), (m) or (o) of the Code.
"EVENT OF DEFAULT" shall have the meaning set forth in Article X
hereof.
"EXCHANGE ACT" shall mean the Securities Exchange Act of 1934, as
amended, or any successor provision thereto.
"GAAP" shall mean generally accepted accounting principles in the
United States of America in effect from time to time.
"GUARANTY" means the Guaranty of Payment of Debt issued by the Parent
to the Agent and the Banks, in substantially the form and substance of Exhibit B
attached hereto, as such Guaranty may be from time to time, amended, restated or
otherwise modified.
"GUARANTY DEFAULT" shall mean any one or more of the events
constituting defaults under Section 10 of the Guaranty.
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"HEDGE AGREEMENT" shall mean any interest rate swap, cap or collar
agreements or other similar agreements or arrangements designed to hedge the
position of a Person with respect to interest rates, excluding any such
agreements as to which all of the obligations of such Person are paid or payable
within twelve (12) months of the date such agreement is entered into by such
Person.
"INDEBTEDNESS" shall mean, with respect to any Person at the time of
any determination, without duplication, all obligations of such Person which in
accordance with GAAP should be classified upon the balance sheet of such Person
as liabilities, but in any event including: (a) all obligations of such Person
for borrowed money, (b) all obligations of such Person evidenced by bonds,
debentures, notes or other similar instruments, (c) all obligations of such
Person upon which interest charges are customarily paid or accrued, (d) all
written obligations of such Person to maintain working capital, equity capital
or other financial statement condition of another Person so as to enable such
other Person to pay its Indebtedness or otherwise to protect the holder of such
Indebtedness against loss in respect thereof, (e) all obligations of such Person
issued or assumed as the deferred purchase price of property or services, (f)
all obligations of others secured by any Lien on property owned or acquired by
such Person, whether or not the obligations secured thereby have been assumed,
(g) all capitalized lease obligations of such Person, (h) all obligations of
such Person in respect of a Hedge Agreement, (i) all obligations of such Person,
actual or contingent, as an account party in respect of letters of credit or
bankers' acceptances, and, without duplication, all drafts drawn thereunder, and
(j) all obligations of any partnership or joint venture as to which such Person
is or may become personally liable, PROVIDED, that, Indebtedness shall not
include (i) any obligations incurred as a result of fraud, misappropriation,
misapplication and environmental indemnities, as are usual and customary in
commercial mortgage loan transactions, and (ii) trade payables, deferred
revenue, taxes and accrued expenses, in each case arising in the ordinary course
of business and that is due and payable less than twelve (12) months after the
date such debt was incurred.
"INDENTURE" shall mean the indenture relating to the Senior Notes dated
as of March 16, 1998.
"INDEMNITY AGREEMENT" shall mean collectively, (i) that certain General
Indemnity Agreement dated as of November 6, 1998 by and between the Parent and
the Original Surety (other than Asset Guaranty Insurance Company), as amended by
the St. Xxxx Surety Amendment to General Indemnity Agreement dated as of
November 6, 1998 and by the St. Xxxx Surety Amendment to General Indemnity
Agreement dated as of March __, 2002 and (ii) any additional indemnity agreement
in form and substance satisfactory to the Agents and the Banks, by and between
the Parent and a Surety, and as each such Indemnity Agreement may be amended,
restated or otherwise modified.
"INDICATED SPREAD" shall have the meaning set forth in Section 4.01(d)
hereof.
"INTEREST ADJUSTMENT DATE" shall mean the last day of each Interest
Period.
"INTEREST OPTIONS" means the LIBOR Rate Option and the Prime Rate
Option.
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"INTEREST PERIOD" shall mean a period of one, two, three or six months
or one year (as selected by the Borrower) commencing on the applicable borrowing
or conversion date of each Loan subject to the LIBOR Rate Option and on the date
that is one London Banking Day after each Interest Adjustment Date occurring
thereafter with respect thereto; PROVIDED, that if any such Interest Period
would be affected by a reduction in the Revolving Loan Commitment as provided in
Section 3.02(b) hereof, prepayment rights as provided in Section 5.05 hereof or
maturity of Loans as provided in Sections 2.01(b) and/or 3.07 hereof, such
Interest Period shall, without affecting the Borrower's obligations, if any, to
pay to the Banks, the prepayment premium set forth in Section 5.05 hereof, be
shortened to end on the date of such reduction, prepayment or maturity.
Notwithstanding anything to the contrary contained above:
(i) if any Interest Period begins on a day for which there is
no numerically corresponding day in the calendar month at the end of
such Interest Period, such Interest Period shall end on the last London
Banking Day of such calendar month;
(ii) if any Interest Period would otherwise expire on a day
which is not a London Banking Day, such Interest Period shall expire on
the next succeeding London Banking Day, PROVIDED, that if any Interest
Period would otherwise expire on a day which is not a London Banking
Day but is a day of the month after which no further London Banking Day
occurs in such month, such Interest Period shall expire on the next
preceding London Banking Day;
(iii) no Interest Period may be selected at any time that an
Event of Default has occurred and is continuing;
(iv) no Interest Period may be selected if it would extend
beyond the scheduled maturity date or principal repayment date(s) of
the Loans to which it would apply; and
(v) no Interest Period may be selected if it would extend
beyond the Termination Date.
"LC OBLIGATIONS" shall mean the aggregate amount of all possible
drawings under all letters of credit issued pursuant to Section 3.06 hereof,
plus all amounts drawn under such letters of credit and not reimbursed.
"LIBOR" shall mean the average (rounded upward to the nearest 1/16th of
1%) of the per annum rates at which deposits in immediately available funds in
United States dollars for the relevant Interest Period and in the amount of the
principal of the Loans to be disbursed or to remain outstanding during such
Interest Period, as the case may be, are offered to the Reference Banks by prime
banks in any Eurodollar market reasonably selected by the Reference Banks,
determined as of 11:00 a.m. London time (or as soon thereafter as practicable),
two (2) London Banking Days prior to the beginning of the relevant Interest
Period. In the event one or more of the Reference Banks fail to furnish its
quote of any rate required herein, such rate shall be determined on the basis of
the quote or quotes of the remaining Reference Bank or Banks.
"LIBOR RATE OPTION" means interest determined pursuant to Section
4.01(b) and related provisions hereof.
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"LIEN" shall mean any mortgage, pledge, security interest, encumbrance,
lien or charge of any kind (including any agreement to give any of the
foregoing, any conditional sale or other title retention agreement, any
financing or similar statement or notice filed under the Uniform Commercial Code
or any similar notice or recording statute, and any lease having substantially
the same effect as any of the foregoing).
"LOAN" means a Term Loan or a Revolving Loan, and "LOANS" means Term
Loans, Revolving Loans or any combination of the foregoing.
"LONDON BANKING DAY" shall mean a day on which banks are open for
business in London, England, and quoting deposit rates for dollar deposits.
"MATERIAL ADVERSE EFFECT" shall mean (a) a material adverse effect on
the business, property, assets, liabilities, or condition (financial or
otherwise) of the Borrower or the Parent or (b) a material adverse effect on the
rights or remedies of the Banks or the Agents, or on the ability of the Borrower
or the Parent to perform its respective obligations to the Banks or the Agents
under this Agreement, the Notes, the Guaranty or the Related Writings.
"NET OPERATING INCOME" shall mean for any relevant period, the excess
of the Borrower's revenues over the Borrower's operating expenses, in each case,
as determined in accordance with GAAP. For purposes of this definition, Net
Operating Income (i) shall not include any gains or losses from the sale of
income producing real property, other than gains or losses obtained from the
sale of net outlot parcels to a total maximum aggregate amount of $15,000,000
for the immediately preceding four consecutive quarters and (ii) shall include
adjustments for cash flow of properties pursuant to which the Borrower is
receiving a preferred return over and above its ownership percentage in such
properties.
"NOTE" or "NOTES" shall mean a note or notes executed and delivered
pursuant to Sections 2.03 and 3.05 hereof.
"NOTICE OF BORROWING" shall have the meaning set forth in Section 5.01
hereof.
"ORIGINAL SURETY" means, collectively, St. Xxxx Fire and Marine
Insurance Company, St. Xxxx Mercury Insurance Company, St. Xxxx Guardian
Insurance Company, Seabord Surety Company and Economy Fire & Casualty Company.
"PARENT" means Forest City Enterprises, Inc., an Ohio corporation.
"PAYMENT DEFAULT" shall mean any failure by the Borrower or the Parent
to make payment of principal, interest, or any other charge due, whether at
maturity or by acceleration, under this Agreement or the Guaranty.
"PBGC" means the Pension Benefit Guaranty Corporation established
pursuant to Section 4002 of ERISA, or any successor thereto.
"PERMITTED DEBT" shall have the meaning set forth in Section 8.04
hereof.
"PERMITTED DISTRIBUTIONS" shall have the meaning set forth in Section
8.14 hereof.
-7-
"PERMITTED HOLDER" shall mean (i) any of Xxxxxx X. Xxxxxx, Xxxxxx X.
Xxxxxx, Xxxxxxx X. Xxxxxx, Xxxxx X. Xxxxxx, Xxxxxx X. Xxxxxx or any spouse of
any of the foregoing, and any trusts for the benefit of any of the foregoing,
(ii) RMS, Limited Partnership and any general partner or limited partner thereof
and any Person (other than a creditor) that upon the dissolution or winding up
of RMS, Limited Partnership receives a distribution of Capital Stock of the
Parent, (iii) any group (as defined in Section 13(d) of the Exchange Act) of two
or more Persons or entities that are specified in the immediately preceding
clauses (i) and (ii), and (iv) any successive recombination of the Persons or
groups that are specified in the immediately preceding clauses (i), (ii) and
(iii).
"PERSON" means an individual, a corporation, a limited liability
company, a partnership, an association, a trust or any other entity or
organization, including, without limitation, governmental or political
subdivision or an agency or instrumentality thereof.
"PLAN" shall mean any employee pension benefit plan subject to Title IV
of ERISA, established or maintained by the Borrower, any Subsidiary, or any
member of the Controlled Group, or any such Plan to which the Borrower, any
Subsidiary, or any member of the Controlled Group is required to contribute on
behalf of any of its employees.
"POSSIBLE DEFAULT" shall mean any event, act or condition which with
notice or lapse of time, or both, would constitute an Event of Default.
"POST CLOSING ITEMS" shall have the meaning set forth in Section 7.14
hereof.
"PRIME RATE" shall mean that interest rate established from time to
time by the Agent as the Agent's prime rate, whether or not such rate is
publicly announced; the Prime Rate may be other than the lowest interest rate
charged by the Agent for commercial or other extensions of credit.
"PRIME RATE OPTION" means interest determined pursuant to Section
4.01(c) and related provisions hereof.
"PRO RATA" when used with reference to the Banks means (unless the
context otherwise clearly indicates) pro rata according to the unpaid principal
amounts owing to the respective Banks under the Notes, or, if no principal is
then owing to any Bank, according to the Commitment, as the case may be, of the
respective Bank.
"QUARTERLY DATE" shall mean each of January 1, April 1, July 1 and
October 1.
"REFERENCE BANKS" shall mean KeyBank National Association and National
City Bank.
"REGULATORY CHANGE" shall mean, as to any Bank, any change in federal,
state or foreign laws or regulations or the adoption or making of any
interpretations, directives or requests of or under any federal, state or
foreign laws or regulations (whether or not having the force of law) by any
court or governmental authority charged with the interpretation or
administration thereof.
-8-
"RELATED PERSON" of any Person shall mean any other Person directly or
indirectly owning (a) 5% or more of the outstanding Common Stock of any class of
such Person (or, in the case of a Person that is not a corporation, 5% or more
of the equity interest in such Person), or (b) 5% or more of the combined voting
power of the Voting Stock of such Person.
"RELATED WRITING" shall mean any Note, assignment, mortgage, security
agreement, guaranty agreement, subordination agreement, financial statement,
audit report or other writing furnished by Borrower, the Parent or any of their
respective officers to the Agents or the Banks pursuant to or otherwise in
connection with this Agreement.
"REPORTABLE EVENT" shall mean a reportable event as that term is
defined in Title IV of ERISA with respect to a Plan as to which the 30-day
notice requirement has not been waived by the PBGC.
"REQUIRED BANKS" means at any time Banks having at least 66 2/3% of the
aggregate amount of the Commitments or, if the Commitments shall have been
terminated, Banks holding Notes evidencing at least 66 2/3% of the aggregate
unpaid principal amount of the Loans.
"REVOLVING LOANS" shall have the meaning set forth in Section 3.03(a)
hereof.
"REVOLVING LOAN COMMITMENT" shall have the meaning set forth in Section
3.02(a) hereof.
"REVOLVING LOAN NOTE" shall have the meaning set forth in Section
3.05(a) hereof.
"SATISFACTION DATE" shall have the meaning set forth in Section 7.14
hereof.
"SENIOR NOTES" shall mean the senior notes of the Parent, in the
original principal amount not to exceed $200,000,000 issued or to be issued
under the terms of the Indenture.
"SUBORDINATION AGREEMENT" means, collectively, (i) that certain Amended
and Restated Subordination Agreement dated as of March 5, 2002, executed and
delivered by the Original Surety in favor of the Agent for the benefit of the
Banks, and (ii) any other subordination agreement in form and substance
satisfactory to the Agents and the Banks entered into by a Surety in favor of
the Agent for the benefit of the Banks, and as each such Subordination Agreement
may, from time to time, be amended, restated or otherwise modified.
"SUBSIDIARY" of any Person shall mean and include (i) any corporation
more than fifty percent (50%) of whose stock of any class or classes having by
the terms thereof ordinary voting power to elect a majority of the directors of
such corporation is at the time owned by such Person directly or indirectly
through Subsidiaries and (ii) any partnership, limited liability company,
association (including business trusts) or other entity in which such Person
directly or indirectly through Subsidiaries, has more than a fifty percent (50%)
voting or equity interest at the time.
"SUPER MAJORITY BANKS" shall have the meaning set forth in Section
13.02 hereof.
"SURETY" means the Original Surety and/or any other surety or insurance
company reasonably acceptable to the Agents.
-9-
"SURETY BONDS" means the bonds, undertakings and other like obligations
executed by a Surety for the Parent subject to the Indemnity Agreement and the
Subordination Agreement, in a maximum aggregate principal amount of $30,000,000
for all Sureties.
"SYNDICATION AGENT" means National City Bank, in its capacity as
syndication agent for the Banks hereunder, and its successors in such capacity.
"TERM LOAN" shall have the meaning set forth in Section 2.01(a) hereof.
"TERM NOTE" shall have the meaning set forth in Section 2.03(a) of this
Agreement.
"TERMINATION DATE" means March 4, 2006, unless extended by the Banks
pursuant to Section 3.08 of this Agreement, in which case the Termination Date
shall be the date of the expiration of any such extension, or, if terminated
earlier pursuant to Article XI of this Agreement, the Termination Date shall be
the date of such earlier termination.
"UNFUNDED CURRENT LIABILITIES" of any Plan shall mean the amount, if
any, by which the actuarial present value of the accumulated plan benefits under
the Plan as of the close of its most recent plan year, determined in accordance
with Statement of Financial Accounting Standards No. 35, based upon the
actuarial assumptions used by the Plan's actuary in the most recent annual
valuation of the Plan, exceeds the fair market value of the assets allocable
thereto, determined in accordance with Section 412 of the Code.
"VOTING STOCK" of any Person shall mean Capital Stock of such Person
which ordinarily has voting power for the election of directors (or persons
performing similar functions) of such Person, whether at all times or only so
long as no senior class of securities has such voting power by reason of any
contingency.
Any accounting term not specifically defined in this Article I or
elsewhere in the Agreement, shall have the meaning ascribed thereto by GAAP not
inconsistent with the Borrower's present accounting procedures. Notwithstanding
the foregoing, the financial statements to be furnished to the Banks pursuant
hereto shall be made and prepared in accordance with GAAP consistently applied
throughout the periods involved (except as set forth in the notes thereto or
otherwise disclosed in writing by the Borrower to the Banks), PROVIDED, that (a)
all computations determining compliance with Section VIII, including definitions
used therein, shall utilize accounting principles based on the prorata method of
accounting as opposed to the equity method or consolidation method of accounting
and (b) such financial statements must also include a report (in the footnotes
thereto or otherwise) of the financial results of the Borrower and its
Subsidiaries using accounting principles based on the prorata method of
accounting.
The foregoing definitions shall be applicable to the singular and
plurals of the foregoing defined terms.
-10-
ARTICLE II
----------
TERM LOANS
----------
SECTION 2.01(a). TERM LOANS. Subject to and upon the terms and
conditions of this Agreement, each Bank severally agrees that it will, on the
Closing Date, make a term loan (each, a "Term Loan" and, collectively, the "Term
Loans") to the Borrower in the amount set forth opposite the name of such Bank
on Exhibit A hereto under the heading "Term Loan Commitment." The proceeds of
the Term Loans shall be used to repay the Indebtedness incurred by the Borrower
under the Credit Agreement and for working capital purposes of the Borrower.
SECTION 2.01(b). REPAYMENT OF TERM LOANS. The principal of the Term
Loans shall be payable in sixteen consecutive quarterly payments each in an
amount equal to $6,250,000 commencing on July 1, 2002 and continuing on each
Quarterly Date thereafter until March 4, 2006, when all remaining principal of
the Term Loans shall be due and payable in full, unless such principal becomes
due and payable earlier pursuant to the provisions of Article XI hereof.
Notwithstanding any other provisions of this Agreement, any regularly scheduled
installment of principal paid by the Borrower on a Quarterly Date pursuant to
this Section 2.01(b) that results in a prepayment of the Term Loans shall not be
subject to the payment of the prepayment premium set forth in Section 5.05 of
this Agreement.
SECTION 2.02(a). [Reserved].
SECTION 2.03. TERM NOTES. (a) The Borrower's obligation to pay the
principal of, and interest on, the Term Loan made to it by each Bank shall be
evidenced by a promissory note substantially in the form of Exhibit C attached
hereto with blanks appropriately completed in conformity herewith (each such
promissory note as it may be from time to time amended, restated or otherwise
modified, a "Term Note" and, collectively, the "Term Notes").
(b) The Term Note issued to each Bank shall (i) be executed by the
Borrower, (ii) be payable to the order of such Bank and dated as of the Closing
Date, (iii) be in a stated principal amount equal to the amount set forth on
Exhibit A hereto for such Bank and be payable in the principal amount of the
Term Loan evidenced thereby, (iv) mature on the sixteenth (16th) Quarterly Date
following the date on which the Term Loan was made, (v) bear interest as
provided in Article IV in respect of the Term Loan evidenced thereby and (vi) be
entitled to the benefits of this Agreement and the other Related Writings.
ARTICLE III
-----------
REVOLVING LOANS
---------------
The Banks hereby establish a revolving loan facility pursuant to which
Revolving Loans will be made to the Borrower, on and subject to the terms and
conditions set forth in this Agreement.
SECTION 3.01. AMOUNT OF THE REVOLVING LOAN FACILITY. The aggregate
principal amount of the Revolving Loans plus the LC Obligations outstanding from
time to time shall not exceed the sum of the Revolving Loan Commitments in
effect at the time.
-11-
SECTION 3.02. REVOLVING LOAN COMMITMENTS. (a) As used in this
Agreement, the "Revolving Loan Commitment" of each Bank at any time means the
obligation of each Bank to advance, subject to the terms and conditions set
forth herein, up to the maximum amount set forth for such Bank on Exhibit A
hereto (the "Maximum Amount").
(b) The Borrower shall have the right at all times to permanently
reduce the Revolving Loan Commitments in whole or in part by giving written
notice of the reduction to the Agent at least one Cleveland Banking Day prior to
the reduction, each such reduction to be equal to at least $500,000, or the then
Revolving Loan Commitments if the then Revolving Loan Commitments are less than
$500,000. Each such reduction shall reduce each Bank's Revolving Loan Commitment
Pro rata. Concurrently with each reduction, the Borrower shall prepay the
amount, if any, together with interest thereon by which the aggregate unpaid
principal amount of the Revolving Loans plus LC Obligations exceeds the sum of
the Revolving Loan Commitments as so reduced in accordance with the requirements
of Section 5.05 of this Agreement.
(c) All Revolving Loans under this Agreement shall be made by the Banks
Pro rata on the basis of their Revolving Loan Commitments. It is understood that
no Bank shall be responsible for any default by any other Bank of its obligation
to make Loans hereunder and that each Bank shall be obligated to make the Loans
to be made by it hereunder, regardless of the failure of any other Bank to
fulfill its commitments hereunder.
SECTION 3.03. REVOLVING LOANS. (a) Each Bank severally agrees, subject
to the fulfillment of the terms and conditions of this Agreement, to make
revolving loans (the "Revolving Loans") to the Borrower from time to time from
and including the Closing Date until the Termination Date. Subject to the
provisions of this Agreement, Revolving Loans may be repaid in whole or in part,
and amounts so repaid may be reborrowed, but in no event shall the aggregate
principal amount of each Bank's Revolving Loans plus such Bank's Pro rata share
of the LC Obligations exceed at any time the then Revolving Loan Commitment of
such Bank.
(b) The requesting of a Revolving Loan in and of itself pursuant to a
Notice of Borrowing constitutes a representation and warranty by the Borrower to
the Banks and the Agents that the conditions specified in Section 5.01 hereof
have been satisfied. Each oral request for a Revolving Loan (which request shall
be promptly confirmed in writing as specified in Section 5.01 hereof) shall be
made by a person authorized by the Borrower to do so and designated on Schedule
3.03, or as that Schedule may be amended from time to time in writing by the
Borrower (an "Authorized Fiscal Officer"), and the making of a Revolving Loan as
provided herein shall conclusively establish the Borrower's obligation to repay
such Loan.
SECTION 3.04. PURPOSE OF THE REVOLVING LOANS. The proceeds of Revolving
Loans shall be used by the Borrower for working capital purposes of the
Borrower.
SECTION 3.05. REVOLVING LOAN NOTES. (a) On the Closing Date, the
Borrower shall execute and deliver to each of the Banks a promissory note
substantially in the form and substance of Exhibit D attached hereto with all
blanks appropriately completed in conformity herewith (each such promissory note
as it may be from time to time amended, restated or otherwise modified, a
"Revolving Loan Note" and, collectively, the "Revolving Loan Notes").
-12-
(b) The Revolving Loan Note issued to each Bank shall (i) be executed
by the Borrower, (ii) be payable to the order of such Bank and dated as of the
Closing Date, (iii) be in a stated principal amount equal to the Revolving Loan
Commitments of such Bank and is payable in the principal amount of the Revolving
Loans evidenced thereby, (iv) shall mature on the Termination Date and (v) shall
be entitled to the benefits of this Agreement and other Related Writings. The
Revolving Loan Notes shall be subject to the terms of this Agreement.
SECTION 3.06. LETTERS OF CREDIT. (a) The Banks agree to make available
to the Borrower letters of credit, issued by the Agent, pursuant to their
respective Revolving Loan Commitments up to an aggregate amount at any one time
outstanding of $40,000,000 MINUS the aggregate principal amount of all then
outstanding Surety Bonds issued by a Surety on behalf of the Parent pursuant to
the Indemnity Agreement. The availability of letters of credit will be subject
to (i) the Agent and the Banks being satisfied with the terms of the letter of
credit, (ii) the Borrower's executing and delivering such letter of credit and
reimbursement agreements and related documents as required by the Agent, and
(iii) the satisfaction of all conditions to the Borrower obtaining a Revolving
Loan in the amount of the requested letter of credit. The Borrower shall pay a
fee for each letter of credit to the Agent for the Pro rata benefit of the
Banks, upon issuance of each letter of credit and, thereafter, upon the annual
anniversary of the issuance of each such letter of credit remaining outstanding,
in the amount of the Indicated Spread for Term Loans under the LIBOR Rate Option
on the stated amount of the letter of credit; PROVIDED that, the Agent shall be
entitled to .125% of such fee prior to the distribution of the balance of such
fee Pro rata to the Banks. In addition, the Borrower shall pay to the Agent upon
issuance of each letter of credit provided for under this Section 3.06 an
issuance fee of $500 for the Agent's services in issuing the letter of credit.
No letter of credit shall be issued having an expiration date after the
Termination Date. All letters of credit shall be in such form and substance as
the Agent, the Banks and the Borrower agree. The Borrower shall not be entitled
to obtain letters of credit from the Agent unless the Borrower is then entitled
to obtain Revolving Loans from the Banks in an amount not less than the stated
amount of the letter of credit requested, the other conditions of Section 5.01
of this Agreement have been satisfied as if the Borrower was obtaining a
Revolving Loan and the Borrower has executed and delivered such letter of
credit, reimbursement agreements and other related documents as may be required
by the Agent.
(b) In the event the Agent pays any amount under or on account of a
letter of credit (the payment by the Agent under or on account of a letter of
credit being herein called a "Draw"), a Revolving Loan shall be deemed to be
made to the Borrower by each Bank to the extent of its Pro rata share of the
Revolving Loan Commitments to reimburse immediately the Agent for the amount of
the Draw. The Agent shall notify each Bank of the occurrence and payment of a
Draw no later than 12:00 p.m. (Cleveland time) on the date of such notice and,
not later than 1:00 p.m. (Cleveland time) on the date of such notice, each Bank
will make available to the Agent its Pro rata portion of the Draw deemed to be a
Revolving Loan. All amounts shall be made available to the Agent in U.S. Dollars
and immediately available funds at its office listed on the signature pages
hereto. If such corresponding Pro rata amount is not in fact made available to
the Agent by such Bank the Agent shall be entitled to recover such corresponding
amount from such Bank. If such Bank does not pay such corresponding amount
forthwith upon the Agent's demand therefor, the Agent shall promptly notify the
Borrower, and the Borrower shall immediately pay such corresponding amount to
the Agent. The Agent shall also be entitled
-13-
to recover from the Bank or the Borrower, as the case may be, interest on such
corresponding amount in respect of each day from the date such corresponding
amount was made available by the Agent to the Borrower to the date such
corresponding amount is recovered by the Agent at a rate per annum equal to (i)
if paid by such Bank, the overnight federal funds effective rate or (ii) if paid
by the Borrower, the then applicable rate of interest, calculated in accordance
with Article IV, for the Revolving Loans. In the event no Revolving Loan or only
a partial Revolving Loan is deemed to be made, the Agent is hereby authorized to
charge (without prior notice to the Borrower) the amount of each Draw, together
with interest thereon, against any account of the Borrower maintained with the
Agent.
(c) So long as letters of credit are outstanding, the amount of
Revolving Loans that the Borrower is entitled to obtain under this Article III
shall be reduced by the LC Obligations then outstanding and, in addition to
otherwise constituting part of the Revolving Loans, except as otherwise
expressly stated herein, the stated amount of the letters of credit shall be
treated as principal of the Revolving Loans.
(d) Whenever the Borrower desires that a letter of credit be issued,
the Borrower shall give the Agent written notice (including by way of facsimile
transmission) thereof prior to 1:00 p.m. (Cleveland time) at least five
Cleveland Banking Days (or such shorter period as may be acceptable to the
Agent) prior to the proposed date of issuance (which shall be a Cleveland
Business Day), which written notice shall be in the form of Exhibit E hereto
(each, a "Letter of Credit Request"). Each Letter of Credit Request shall
include an application for such letter of credit and any other documents that
the Agent customarily requires in connection therewith. The Agent shall promptly
notify each Bank of each Letter of Credit Request.
(e) The delivery of each Letter of Credit Request shall be deemed a
representation and warranty by the Borrower that such letter of credit as
requested in such Letter of Credit Request may be issued in accordance with and
will not violate the requirements of this Section 3.06 and shall include a
representation and warranty as to the aggregate principal amount of all then
outstanding Surety Bonds. The Agent shall, on the date of each issuance of or
amendment or modification to a letter of credit by it, give each Bank and the
Borrower written notice of the issuance of or amendment or modification to such
letter of credit.
(f) In determining whether to pay under any letter of credit, the Agent
shall not have any obligation relative to the Banks other than to determine that
any documents required to be delivered under such letter of credit have been
delivered and that they appear to comply on their face with the requirements of
the letter of credit. Any action taken or omitted to be taken by the Agent with
respect to a letter of credit issued by it if taken or omitted in the absence of
gross negligence or willful misconduct, shall not create any resulting liability
for the Agent.
SECTION 3.07. REPAYMENT OF THE REVOLVING LOAN NOTES. The principal of
the Revolving Loan Notes shall be due and payable in full on the Termination
Date, unless such principal sums shall become due earlier in whole or in part by
reason of the principal amount exceeding the aggregate amount of the Revolving
Loan Commitments at any time in effect or pursuant to the provisions of Article
XI hereof.
-14-
SECTION 3.08. EXTENSIONS OF THE REVOLVING LOANS. Within 60 days prior
to any anniversary of the Closing Date, the Borrower may request the Banks to
extend the Termination Date for one additional year in a writing delivered to
the Agent in accordance with the terms of this Agreement. The unanimous consent
of the Banks shall be required for any such extension and the Banks shall have
the right, but not the obligation, to approve such request for an extension. Any
approval of the Borrower's request shall be subject to such terms and conditions
as the Banks may deem appropriate.
ARTICLE IV
----------
INTEREST ON THE TERM LOANS AND THE REVOLVING LOANS
--------------------------------------------------
SECTION 4.01(a). INTEREST OPTIONS. The Borrower shall pay interest on
the Term Loans and the Revolving Loans at the rates in effect from time to time
pursuant to the Interest Options provided for in Sections 4.01(b) and 4.01(c) as
selected by the Borrower or otherwise in effect from time to time in accordance
with the terms and conditions of this Agreement. Interest on the Revolving Loans
shall accrue from and including the date of borrowing thereof to but excluding
the date of repayment thereof. Interest on the Term Loans shall accrue from and
including the date such Loans are made to the Borrower to but excluding the date
of repayment thereof.
SECTION 4.01(b). LIBOR RATE OPTION. Interest on the principal amount of
each Loan at any time subject to the interest rate option provided for pursuant
to this Section 4.01(b) (the "LIBOR Rate Option") shall be at a rate determined
by adding the applicable LIBOR rate at the time in effect for each Interest
Period for such Loan and the applicable Indicated Spread for the LIBOR Rate
Option set forth in Section 4.01(d) below. The LIBOR Rate Option shall be in
effect for all portions of the principal of the Loans for which the Borrower has
selected an Interest Period in accordance with Section 4.02 hereof, unless and
until any event or circumstance provided for in Sections 4.09 or 4.10 hereof
shall have occurred and continue to be in effect or an Event of Default has
occurred and is continuing.
SECTION 4.01(c). PRIME RATE OPTION. Interest on the principal amount of
all Loans at any time subject to the interest rate option provided for pursuant
to this Section 4.01(c) (the "Prime Rate Option") shall be at rates determined
by adding the Prime Rate in effect from time to time and the applicable
Indicated Spread for the Prime Rate Option set forth in Section 4.01(d) below.
The interest rate in effect under the Prime Rate Option shall change
automatically and immediately with each change in the Prime Rate. The Prime Rate
Option shall be in effect for all portions of the principal of the Loans for
which the LIBOR Rate Option is not in effect at any time.
-15-
SECTION 4.01(d). INDICATED SPREAD. The Indicated Spread is measured in
basis points and shall be determined as follows:
Revolving Loans
---------------
Period Indicated Spread
------ ----------------
(Basis Points)
Prime Rate Option LIBOR Rate Option
----------------- -----------------
From and including the Closing Date to the 50 212.5
Termination Date, on the aggregate outstanding
principal amount of the Revolving Loans that is less
than or equal to the difference of (A) the aggregate
Revolving Loan Commitments MINUS (B) the outstanding
LC Obligations MINUS (C) $50,000,000
From and including the Closing Date to the 75 275
Termination Date, on the aggregate outstanding
principal amount of the Revolving Loans that is
greater than the difference of (A) the aggregate
Revolving Loan Commitments MINUS (B) the outstanding
LC Obligations MINUS (C) $50,000,000
Term Loans
----------
Period Indicated Spread
------ ----------------
(Basis Points)
Prime Rate Option LIBOR Rate Option
----------------- -----------------
From and including the Closing Date to the 50 212.5
Termination Date
By the way of example only, and not in limitation (and assuming the
aggregate Revolving Loan Commitments are $250,000,000 (i.e. no reduction has
occurred)), if the aggregate outstanding principal amount of Revolving Loans is
$200,000,000 and the outstanding LC Obligations are $25,000,000, then
$175,000,000 of the outstanding principal amount of Revolving Loans will bear
interest at the rate of Prime Rate plus 50 basis points or LIBOR plus 212.5
basis points, as applicable, and $25,000,000 of the outstanding principal amount
of Revolving Loans will bear interest at the rate of Prime Rate plus 75 basis
points or LIBOR plus 275 basis points, as applicable.
SECTION 4.02. INTEREST PERIODS. The Borrower shall have the option to
select and advise the Agent of the Interest Periods the Borrower has selected
for Term Loans and
-16-
Revolving Loans not less than two (2) Cleveland Banking Days prior to (a) the
Closing Date, for the Term Loans and the Revolving Loans to be made on the
Closing Date, (b) each Interest Adjustment Date, (c) the date any Revolving
Loans are to be made subsequent to the Closing Date, and (d) any date on which
the Borrower desires to have any portion of the principal of the Loans not
subject to the LIBOR Rate Option become subject to the LIBOR Rate Option,
PROVIDED, that Loans subject to the Prime Rate Option may not be converted into
Loans subject to the LIBOR Rate Option and Loans subject to the LIBOR Rate
Option may not be continued as Loans subject to the LIBOR Rate Option if an
Event of Default is in existence on the date of such conversion or continuation.
Each Interest Period selected shall apply to not less than $500,000 in principal
amount of the Loans; provided, that at no time shall there be more than ten (10)
Interest Periods in effect. The principal amount subject to each Interest Period
shall be deemed distributed Pro rata among the Banks with respect to the
respective Loans to which the Interest Period applies. If the Borrower fails to
timely select any Interest Period, the Borrower shall be deemed to have elected
to convert such Loan to a Loan subject to the Prime Rate Option, effective as of
the expiration date of such current Interest Period.
SECTION 4.03. INTEREST PAYMENT DATES. Interest on all Loans shall be
payable (a) in arrears on the first Cleveland Banking Day of each month, (b) on
any prepayment or conversion (on the amount prepaid or converted), (c) at
maturity (whether by acceleration or otherwise) and/or, (d) after such maturity,
on demand.
SECTION 4.04. INTEREST CALCULATIONS. All interest shall be computed on
the basis of a three hundred sixty (360) day year for the actual number of days
elapsed. Interest shall in all events continue to accrue in accordance with the
provisions of this Agreement until the time payment in full is received.
SECTION 4.05. POST-DEFAULT RATE. After the occurrence and during the
continuation of any Event of Default, the Loans and any interest on the Loans
not paid when due shall bear interest at a rate equal to the rate(s) otherwise
in effect pursuant to this Agreement plus two percent (2%) per annum, and all
such interest shall be due on demand. No interest shall accrue on any interest
that is being charged with respect to any interest not paid when due.
SECTION 4.06. RESERVES OR DEPOSIT REQUIREMENTS, ETC. If at any time any
law, treaty, regulation (including, without limitation, Regulation D of the
Board of Governors of the Federal Reserve System), governmental rule, guideline,
order or request (whether or not having force of law) or the interpretation or
administration thereof by any governmental authority charged with the
administration thereof or any central bank or other fiscal, monetary or other
authority shall impose, modify or deem applicable any reserve and/or special
deposit requirement against assets held by, or deposits in or for the amount of
any Loans by, any Bank, and the result of the foregoing is to increase the cost
(whether by incurring a cost or adding to a cost) to such Bank of making or
maintaining Loans hereunder or to reduce the amount of principal or interest
received by such Bank with respect to such Loans, then upon demand by such Bank
the Borrower shall pay to such Bank from time to time on each interest payment
date with respect to such Loans, as additional consideration hereunder,
additional amounts sufficient to fully compensate and indemnify such Bank for
such increased cost or reduced amount, assuming (which assumption such Bank need
not corroborate) such additional cost or reduced amount were allocable to such
Loans. A statement as to the increased cost or
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reduced amount as a result of any event mentioned in this Section 4.06, setting
forth the calculations therefor, shall be submitted by such Bank to the Borrower
not later than one hundred fifty (150) days after the events giving rise to the
same occurred and shall, in the absence of manifest error, be conclusive and
binding as to the amount thereof. Notwithstanding any other provision of this
Agreement, after any such demand for compensation by any Bank, the Borrower,
upon at least one (1) Cleveland Banking Day's prior written notice to such Bank
through the Agent, may prepay all Loans in full regardless of the Interest
Period of any thereof. Any such prepayment shall be subject to the prepayment
premium set forth in Section 5.05 hereof.
SECTION 4.07. TAX LAW, ETC. In the event that by reason of any law,
regulation or requirement or in the interpretation thereof by an official
authority, or the imposition of any requirement of any central bank whether or
not having the force of law, any Bank shall, with respect to this Agreement or
any transaction under this Agreement, be subjected to any tax, levy, impost,
charge, fee, duty, deduction or withholding of any kind whatsoever (other than
any tax imposed upon the total net income of such Bank) and if any such measures
or any other similar measure shall result in an increase in the cost to such
Bank of making or maintaining any Loan or in a reduction in the amount of
principal, interest or commitment fee receivable by such Bank in respect
thereof, then such Bank shall promptly notify the Borrower stating the reasons
therefor. The Borrower shall thereafter pay to such Bank upon demand from time
to time on each interest payment date with respect to such Loans, as additional
consideration hereunder, such additional amounts as will fully compensate such
Bank for such increased cost or reduced amount. A statement as to any such
increased cost or reduced amount, setting forth the calculations therefor, shall
be submitted by such Bank to the Borrower not later than one hundred fifty (150)
days after the events giving rise to the same occurred and shall, in the absence
of manifest error, be conclusive and binding as to the amount thereof.
If any Bank receives such additional consideration from the Borrower
pursuant to this Section 4.07, such Bank shall use its best efforts to obtain
the benefits of any refund, deduction or credit for any taxes or other amounts
on account of which such additional consideration has been paid and shall
reimburse the Borrower to the extent, but only to the extent, that such Bank
shall receive a refund of such taxes or other amounts together with any interest
thereon or an effective net reduction in taxes or other governmental charges
(including any taxes imposed on or measured by the total net income of such
Bank) of the United States or any state or subdivision thereof by virtue of any
such deduction or credit, after first giving effect to all other deductions and
credits otherwise available to such Bank. If, at the time any audit of such
Bank's income tax return is completed, such Bank determines, based on such
audit, that it was not entitled to the full amount of any refund reimbursed to
the Borrower as aforesaid or that its net income taxes are not reduced by a
credit or deduction for the full amount of taxes reimbursed to the Borrower as
aforesaid, the Borrower, upon demand of such Bank, will promptly pay to such
Bank the amount so refunded to which such Bank was not so entitled, or the
amount by which the net income taxes of such Bank were not so reduced, as the
case may be.
Notwithstanding any other provision of this Agreement, after any such
demand for compensation by any Bank, the Borrower, upon at least one (1)
Cleveland Banking Day's prior written notice to such Bank through the Agent, may
prepay all Loans in full regardless of the
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Interest Period of any thereof. Any such prepayment shall be subject to the
prepayment premium set forth in Section 5.05 hereof.
SECTION 4.08. INDEMNITY. Without prejudice to any other provisions of
this Article IV, the Borrower hereby agrees to indemnify each Bank against any
reasonable loss or expense which such Bank may sustain or incur as a consequence
of any Event of Default hereunder, including, but not limited to, any loss of
profit, premium or penalty incurred by such Bank in respect of funds borrowed by
it for the purpose of making or maintaining any Loan subject to the Libor Rate
Option, as determined by such Bank in the exercise of its sole but reasonable
discretion. A statement as to any such loss or expense shall be promptly
submitted by such Bank to the Borrower not later than one hundred fifty (150)
days after the events giving rise to the same occurred and shall, in the absence
of manifest error, be conclusive and binding as to the amount thereof.
SECTION 4.09. EURODOLLAR DEPOSITS UNAVAILABLE OR INTEREST RATE
UNASCERTAINABLE. In the event that the Agent shall have determined that dollar
deposits of the relevant amount for the relevant Interest Period are not
available to the Reference Banks in the applicable Eurodollar market or that, by
reason of circumstances affecting such market, adequate and reasonable means do
not exist for ascertaining the LIBOR rate applicable to such Interest Period, as
the case may be, the Agent shall promptly give notice of such determination to
the Borrower. In any such event, all principal of the Loans then subject to the
LIBOR Rate Option shall become subject to the Prime Rate Option on expiration of
any Interest Periods then in effect. In the event that the circumstances causing
any such unavailability of deposits or inability to determine the LIBOR rate
shall change or terminate so that the LIBOR rate may again be determined, the
Agent shall promptly so notify the Borrower.
SECTION 4.10. CHANGES IN LAW RENDERING LIBOR LOANS UNLAWFUL. If at any
time any new law, treaty, regulation, governmental rule, guideline, order or
request or any change in any existing law, treaty, regulation, governmental
rule, guideline, order or request or any interpretation thereof by any
governmental or other regulatory authority charged with the administration
thereof, shall make it unlawful for any Bank to fund any Loans which it is
committed to make hereunder subject to the LIBOR Rate Option with moneys
obtained in the Eurodollar market, the Commitment of such Bank to fund such
Loans shall, upon the happening of such event forthwith be suspended for the
duration of such illegality, and such Bank shall by written notice to the
Borrower and the Agent declare that its Commitment with respect to such Loans
has been so suspended and, if and when such illegality ceases to exist, such
suspension shall cease and such Bank shall similarly notify the Borrower and the
Agent. If any such change shall make it unlawful for any Bank to continue in
effect the funding in the applicable Eurodollar market of any Loan previously
made by it hereunder subject to the LIBOR Rate Option, such Bank shall, upon the
happening of such event, notify the Borrower, the Agent and the other Banks
thereof in writing stating the reasons therefor, and the Borrower shall, on the
earlier of (i) the last day of the then current Interest Period or (ii) if
required by such law, regulation or interpretation, on such date as shall be
specified in such notice, prepay all such Loans to the Banks in full. Any such
prepayment or conversion may be made without payment of the prepayment premium
provided for in Section 5.05 hereof, but the Borrower shall compensate such
Bank(s) for any costs or expenses relating to such Loan incurred in connection
with the
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events provided for in this Section on written request to the Borrower
describing such costs or expenses.
SECTION 4.11. FUNDING. Each Bank may, but shall not be required to,
make Loans hereunder with funds obtained outside the United States.
ARTICLE V
---------
AGREEMENTS AND CONDITIONS APPLICABLE TO ALL LOANS
-------------------------------------------------
SECTION 5.01. NOTICE OF BORROWING. (a) Whenever the Borrower desires to
incur a Loan, it shall give the Agent, prior to 12:00 noon (Cleveland time), at
least two (2) Cleveland Banking Day's prior written notice (or telephonic notice
promptly confirmed in writing) of each Loan to be subject to the LIBOR Rate
Option and at least one (1) Cleveland Banking Days' prior written notice (or
telephonic notice promptly confirmed in writing) of each Loan to be subject to
the Prime Rate Option. Each such notice (each, a "Notice of Borrowing" a form of
which is attached hereto as Exhibit F) shall be appropriately completed to
specify (i) the type of Loan(s) to be made, (ii) the aggregate principal amount
of each type of Loan to be made, which, in the case of Revolving Loans shall be
an amount equal to an integral multiple of $500,000, (iii) the date such Loan(s)
is to be made (which shall be a Cleveland Banking Day), and (iv) whether the
Loan(s) shall be subject to the Prime Rate Option or the Libor Rate Option and,
in the latter case, the Interest Period to be initially applicable thereto. The
Agent shall promptly give each Bank written notice (or telephonic notice
promptly confirmed in writing) of each proposed Loan, of such Bank's Pro rata
share thereof and of the other matters covered by the Notice of Borrowing.
(b) Without in any way limiting the obligation of the Borrower to
confirm in writing any telephonic notice permitted to be given hereunder, the
Agent may, prior to receipt of written confirmation, act without liability upon
the basis of such telephonic notice, believed by the Agent in good faith to be
from an Authorized Fiscal Officer of the Borrower. In such case, the Borrower
hereby waives the right to dispute the Agent's record of the terms of such
telephonic notice.
SECTION 5.02. DISBURSEMENT OF FUNDS. (a) No later than 1:00 p.m.
(Cleveland time) on the date specified in each Notice of Borrowing, each Bank
will make available its Pro rata portion of each Loan requested to be made on
such date in the manner provided below in this Section 5.02(a). All amounts
shall be made available to the Agent in U.S. dollars and immediately available
funds at its office listed on the signature pages hereto and the Agent promptly
will make available to the Borrower by depositing to its account at the Agent's
office the aggregate of the amounts so made available in the type of funds
received. Unless the Agent shall have been notified by any Bank prior to the
date specified in the Notice of Borrowing that such Bank does not intend to make
available to the Agent its portion of the Loan or Loans to be made on such date,
the Agent may assume that such Bank has made such amount available to the Agent
on such date of borrowing, and the Agent, in reliance upon such assumption, may
(in its sole discretion and without any obligation to do so) make available to
the Borrower a corresponding amount. If such corresponding amount is not in fact
made available to the Agent by such Bank and the Agent has made available same
to the Borrower, the Agent shall be entitled to recover such corresponding
amount from such Bank. If such Bank does not pay such
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corresponding amount forthwith upon the Agent's demand therefor, the Agent shall
promptly notify the Borrower, and the Borrower shall immediately pay such
corresponding amount to the Agent. The Agent shall also be entitled to recover
from the Bank or the Borrower, as the case may be, interest on such
corresponding amount in respect of each day from the date such corresponding
amount was made available by the Agent to the Borrower to the date such
corresponding amount is recovered by the Agent at a rate per annum equal to (i)
if paid by such Bank, the overnight federal funds effective rate or (ii) if paid
by the Borrower, the then applicable rate of interest, calculated in accordance
with Article IV, for the Loans.
(b) Nothing herein shall be deemed to relieve any Bank from its
obligation to fulfill its commitments hereunder or to prejudice any rights which
the Borrower may have against any Bank as a result of any default by such Bank
hereunder.
SECTION 5.03. CONDITIONS TO LOANS. The obligation of each Bank to make
Loans hereunder is conditioned, in the case of each Loan hereunder, upon the
following:
(a) receipt by the Agent of a Notice of Borrowing or Letter of Credit
Request, as applicable;
(b) no Event of Default or Possible Default existing then or
immediately after giving effect to the Loan;
(c) the conditions set forth in Article VI hereof having been
satisfied; and
(d) the representations and warranties contained in Article IX hereof
being true and correct in all material respects with the same force and effect
as if made on and as of the date of such Loan except to the extent that any
thereof expressly relate to an earlier date.
Each request for a Loan by the Borrower hereunder shall be deemed to be a
representation and warranty by the Borrower as of the date of such borrowing as
to the truth of the matters specified in subsections (b), (c) and (d) above.
SECTION 5.04. PAYMENT ON NOTES, ETC. All payments of principal,
interest, and any other amounts under this Agreement shall be made to the Agent
in immediately available funds and in lawful money of the United States of
America for the account of the Banks, not later than 12:00 noon (Cleveland time)
on the date when due. Any such payment received by the Agent after 12:00 noon on
a Cleveland Banking Day shall be deemed received on the next succeeding
Cleveland Banking Day and interest shall accrue to such next Cleveland Banking
Day in respect of any principal of the Loans to be paid by such payment. All
payments made by the Borrower hereunder, under any Note or any other Related
Writing, will be made without setoff, counterclaim or defense. The Agent shall
distribute to each Bank its Pro rata share of the amount of principal, interest
and other amounts received by it for the account of such Bank on the same day
the Agent receives payment thereof from the Borrower in immediately available
funds, unless the Agent does not receive such payment from the Borrower until
after 12:00 noon, in which case the Agent shall make payment thereof to the
Banks on the next Cleveland Banking Day. Each Bank shall endorse each Note held
by it with appropriate notations evidencing each payment of principal made
thereon or shall record such principal payment by such other method as such Bank
may generally employ; PROVIDED, that failure to make any such entry shall in no
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way detract from the Borrower's obligations under each such Note. Whenever any
payment to be made hereunder, including without limitation any payment to be
made on any Note, shall be stated to be due on a day which is not a Cleveland
Banking Day, such payment shall be made on the next succeeding Cleveland Banking
Day and such extension of time shall in each case be included in the computation
of the interest payable on such Note; provided, that if the next succeeding
Cleveland Banking Day falls in the succeeding calendar month, such payment shall
be made on the preceding Cleveland Banking Day and the relevant Interest Period
shall be adjusted accordingly. To the extent a Bank does not receive its Pro
rata share of the amount of principal, interest and other amounts made available
by the Borrower to the Agent for the account of such Bank at the applicable time
set forth above in this Section 5.04, such Bank shall be entitled to recover
from the Agent, interest on all such amounts in respect of each day from the
date such amounts were made available to the Agent by the Borrower to the date
such amounts are distributed to such Bank at a rate per annum equal to the
overnight federal funds effective rate.
SECTION 5.05. PREPAYMENT. (a) The Borrower shall have the right
(subject to the payment of a prepayment premium as hereinafter described in this
Section 5.05), at any time or from time to time, upon two (2) Cleveland Banking
Days' prior written notice (or telephonic notice promptly confirmed in writing)
to prepay all or any part of the principal amount of the Loans then outstanding
as designated by the Borrower, subject to the provisions of Section 5.05(b)
hereof, plus interest accrued on the amount so prepaid to the date of such
prepayment, which notice shall promptly be transmitted by the Agent to each of
the Banks.
(b) The Borrower agrees that if LIBOR as determined as of 11:00 a.m.
London time, two (2) London Banking Days' prior to the date of prepayment or
acceleration of any Loans (hereinafter, "Prepayment LIBOR") shall be lower than
the last LIBOR previously determined for those Loans accruing interest at LIBOR
with respect to which prepayment is intended to be made or that are accelerated
(hereinafter, "Last LIBOR") prior to the end of the applicable Interest Period,
then the Borrower shall, upon written notice by the Agent, promptly pay to the
Agent, for the account of each of the Banks, in immediately available funds, a
prepayment premium measured by a rate (the "Prepayment Premium Rate") which
shall be equal to the difference between the Last LIBOR and the Prepayment
LIBOR. In determining the Prepayment LIBOR payable to each Bank, the Agent shall
apply a rate for each Bank equal to LIBOR for a deposit approximately equal to
each Bank's portion of such prepayment or accelerated balance which would be
applicable to an Interest Period commencing on the date of such prepayment or
acceleration and having a duration as nearly equal as practicable to the
remaining duration of the actual Interest Period during which such acceleration
occurs or prepayment is to be made. In addition, the Borrower shall immediately
pay directly to each Bank the amount claimed as additional costs or expenses
(including, without limitation, cost of telex, wires, or cables) incurred by
such Bank in connection with the prepayment or acceleration upon the Borrower's
receipt of a written statement from such Bank. The Prepayment Premium Rate shall
be applied to all or such part of the principal amounts of the Notes as related
to the Loans to be prepaid, or that are accelerated and the prepayment premium
shall be computed for the period commencing with the date on which such
prepayment is to be made or acceleration occurs to that date which coincides
with the last day of the Interest Period previously established when the Loans,
which are to be prepaid or are accelerated, were made. Each voluntary prepayment
of a Loan shall be in the aggregate principal sum of not less than One Million
Dollars ($1,000,000) (except in the
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case of a Loan initially made in an aggregate amount less than One Million
Dollars ($1,000,000)) and, if greater, in an integral multiple of Two Hundred
Fifty Thousand Dollars ($250,000). In the event the Borrower cancels a proposed
Loan subsequent to the delivery to the Agent of a Notice of Borrowing with
respect to such Loan, but prior to the draw down of funds thereunder, such
cancellation shall be treated as a prepayment subject to the aforementioned
prepayment premium.
(c) Each prepayment of the Term Loans shall be applied to the principal
installments thereof in the inverse order of their respective maturities.
SECTION 5.06. UNUSED COMMITMENT FEES. The Borrower agrees to pay to the
Agent, for the Pro rata benefit of each Bank, as consideration for its Revolving
Loan Commitment hereunder, an unused commitment fee calculated at the rate of
thirty seven and one half (37.5) Basis Points per annum (based on a year having
360 days and calculated for the actual number of days elapsed) from the Closing
Date to the Termination Date, on the sum of the average daily unborrowed amount
of such Bank's Revolving Loan Commitment hereunder minus the aggregate amount of
all possible drawings under all letters of credit issued pursuant to Section
3.06 hereof, payable on each Quarterly Date. After any permanent reduction of
the Revolving Loan Commitments pursuant to Section 3.02(b), the unused
commitment fees payable hereunder shall be calculated upon the Revolving Loan
Commitments of the Banks as so reduced.
ARTICLE VI
----------
CONDITIONS PRECEDENT
--------------------
Prior to or concurrently with the execution and delivery of this
Agreement, and as conditions precedent to the making of any Loans hereunder, the
following actions shall be taken, all in form and substance satisfactory to the
Agents and the Banks and their respective counsel:
SECTION 6.01. CORPORATE AND LOAN DOCUMENTS. The Borrower shall deliver
or cause to be delivered to the Agents and the Banks the following documents, in
all cases duly executed, delivered and/or certified, as the case may be:
(a) Certified copies of the resolutions of the board of directors of
the Borrower evidencing approval of the execution, delivery and performance of
this Agreement and the Notes provided for herein;
(b) Certified copies of resolutions of the board of directors of the
Parent evidencing approval of the execution, delivery and performance of the
Guaranty;
(c) Copies of the Articles of Incorporation of the Borrower, certified
by the Ohio Secretary of State as of a recent date;
(d) Copies of the Articles of Incorporation of the Parent, certified by
the Ohio Secretary of State as of a recent date;
(e) Copies of the Code of Regulations of the Borrower, certified as
true and complete as of the Closing Date by the secretary of the Borrower;
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(f) Copies of the Code of Regulations of the Parent, certified as true
and complete as of the Closing Date by the secretary of the Parent;
(g) Borrower good standing certificate from the State of Ohio as of a
recent date;
(h) Parent good standing certificate from the State of Ohio as of a
recent date.
(i) A certificate of the secretary or assistant secretary of the
Borrower certifying the names of the officers of the Borrower authorized to sign
this Agreement and the Notes, together with the true signatures of such
officers.
(j) A certificate of the secretary or assistant secretary of the Parent
certifying the names of the officers of the Parent authorized to sign the
Guaranty, together with the true signatures of such officers.
(k) The Borrower, the Agents, and the Banks shall have executed and
delivered counterparts of the Agreement.
(l) The Parent shall have executed and delivered the Guaranty to the
Agents and the Banks.
(m) The Borrower shall have executed and delivered to each Bank a
Revolving Loan Note and a Term Note payable to the account of each respective
Bank in the amount of their respective Commitments for Revolving Loans and Term
Loans.
(n) A certificate of the secretary or assistant secretary of the
Borrower certifying that as of the Closing Date and after giving effect thereto
and to the Loans made hereunder (i) there shall exist no Possible Default or
Event of Default and (ii) all representations and warranties contained herein
shall be true and correct in all material respects.
(o) A certificate of the secretary or assistant secretary of the Parent
certifying that as of the Closing Date and after giving effect thereto and to
the Loans made hereunder (i) there shall exist no Possible Default or Event of
Default and (ii) all representations and warranties contained herein shall be
true and correct in all material respects.
SECTION 6.02. OPINION OF COUNSEL FOR PARENT. The Borrower shall deliver
or caused to be delivered to the Agents and the Banks a favorable opinion of
counsel for the Parent as to the due authorization, execution and delivery, and
legality, validity, and enforceability of the Guaranty and such other matters as
the Agents and the Banks may request.
SECTION 6.03. JUDGMENT, ORDERS. On the Closing Date, there shall not
exist any judgment, order, injunction or other restraint issued or filed with
respect to the consummation of the transactions contemplated by this Agreement.
SECTION 6.04. LITIGATION. On the Closing Date, there shall be no
actions, suits or proceedings pending or threatened (a) with respect to this
Agreement or the transactions contemplated hereby or (b) which the Agents or the
Banks shall determine could (i) have a Material Adverse Effect or (ii) have a
material adverse effect on the rights or remedies of the
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Banks hereunder or under the Notes or the Guaranty or on the ability of either
the Borrower or the Parent to perform its respective obligations to the Banks
hereunder or under the Notes or the Guaranty.
SECTION 6.05. NOTICE OF BORROWING. Prior to the making of each Loan,
the Agent shall have received a Notice of Borrowing satisfying the requirements
of Section 5.01.
SECTION 6.06. OPINION OF COUNSEL FOR BORROWER. The Borrower shall
deliver or cause to be delivered to the Agents and the Banks a favorable opinion
of counsel for the Borrower as to the due authorization, execution and delivery,
and legality, validity and enforceability of this Agreement and the Notes and
such other matters as the Agents and the Banks may request.
SECTION 6.07. PAYMENT OF FEES. On the Closing Date, the Borrower shall
have paid to the Agents and the Banks all costs, fees and expenses, and all
other compensation contemplated by this Agreement (including, without
limitation, legal fees and expenses) to the extent then due.
SECTION 6.08. ADVERSE CHANGE, ETC. From July 31, 2001 to the Closing
Date, nothing shall have occurred (and neither the Banks nor the Agents shall
have become aware of any facts or conditions not previously known) which the
Banks or the Agents shall determine has, or could reasonably be expected to
have, a Material Adverse Effect.
SECTION 6.09. TERMINATION OF CREDIT AGREEMENT. The Credit Agreement
shall have been cancelled and terminated and the Indebtedness and obligations of
the Borrower thereunder shall have been satisfied and performed in full.
SECTION 6.10. AMENDMENTS TO INDEMNITY AGREEMENT AND SUBORDINATION
AGREEMENT. The Borrower shall have delivered to the Agents and the Banks the
Subordination Agreement duly executed by the Original Surety and such amendments
to the Indemnity Agreement, in form and substance satisfactory to the Agents and
the Banks.
ARTICLE VII
-----------
AFFIRMATIVE COVENANTS
---------------------
Borrower covenants and agrees that on the Closing Date and thereafter,
for so long as this Agreement remains in effect and until the Commitments and
all letters of credit are terminated, no Notes are outstanding and the Loans,
together with interest, fees and all other obligations incurred hereunder, are
paid in full, the Borrower will perform and observe all of the following
provisions, namely:
SECTION 7.01. PAYMENT OF AMOUNTS DUE. The Borrower will make all
payments of the principal of and interest on the Loans and the Notes promptly as
the same become due.
SECTION 7.02. EXISTENCE, BUSINESS, ETC. The Borrower will cause to be
done all things necessary to preserve and to keep in full force and effect its
existence and rights and those of its Subsidiaries. The Borrower will, and will
cause its Subsidiaries to, comply in all
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material respects with all federal, state and local laws and regulations now in
effect or hereafter promulgated by any governmental authority having
jurisdiction over it or them, as applicable.
SECTION 7.03. MAINTENANCE OF PROPERTIES. The Borrower will, and will
cause its Subsidiaries to, at all times maintain, preserve, protect and keep its
properties used in the conduct of its business in good repair, working order and
condition, ordinary wear and tear excepted, and, from time to time, make all
needful and proper repairs, renewals, replacements, betterments, and
improvements thereto, so that the business carried on in connection therewith
may be properly conducted at all times.
SECTION 7.04. PAYMENT OF TAXES, ETC. The Borrower will pay and
discharge all lawful taxes, assessments and governmental charges or levies
imposed upon it, upon its income or profits or upon its properties, before the
same shall become in default or penalties attach thereto, as well as all lawful
claims for same which have become due and payable which, if unpaid, might become
a Lien or charge upon such properties or any part thereof; provided, that the
Borrower shall not be required to pay and discharge any such tax, assessment,
charge, levy or claim so long as the validity thereof shall be contested in good
faith by appropriate proceedings and there shall be set aside on its books such
reserves with respect thereto as are required by generally accepted accounting
principles. Except where the liability for the tax, assessment, charge, levy or
claim is limited solely to the property on which assessed and is not subject to
enforcement against the Borrower, the Borrower will in all events pay such tax,
assessment, charge, levy or claim before the property subject thereto shall be
sold to satisfy any Lien which has attached as security therefor.
SECTION 7.05. FINANCIAL STATEMENTS. The Borrower will furnish to each
Bank:
(a) within forty-five (45) days (or fifty (50) days so long as the
Parent shall not have reported an Event of Default under the Guaranty to the
Securities and Exchange Commission during such fiscal period nor on its most
recent filing with the Securities and Exchange Commission) after the end of each
of the first three (3) quarter-annual fiscal periods of each of the Borrower's
fiscal years, an unaudited consolidated and consolidating balance sheet of the
Parent, the Borrower and their respective Subsidiaries as at the end of that
period and an unaudited consolidated and consolidating statement of earnings of
the Parent, the Borrower and their respective Subsidiaries for the Borrower's
current fiscal year to the end of that period, all prepared in form and detail
in accordance with generally accepted accounting principles, consistently
applied, and certified by a Chief Financial Officer of the Parent, together with
a certificate of a senior officer of the Borrower (i) specifying the nature and
period of existence of each Event of Default and/or Possible Default, if any,
and the action taken, being taken or proposed to be taken by the Borrower in
respect thereof, or if none, so stating, (ii) certifying that the
representations and warranties of the Borrower set forth in Article IX hereof
are true and correct as of the date of such certificate, or, if not, all
respects in which they are not and (iii) certifying compliance by the Borrower
with the covenants contained in Section 8.13;
(b) within ninety (90) days (or ninety-five (95) days so long as the
Parent shall not have reported an Event of Default under the Guaranty to the
Securities and Exchange Commission during such fiscal period nor on its most
recent filing with the Securities and
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Exchange Commission) after the end of each of the Borrower's fiscal years,
complete audited annual financial statements of the Parent, the Borrower and
their respective Subsidiaries for that year prepared on a consolidated basis
and unaudited on a consolidating basis and in form and detail satisfactory to
the Banks, together with (i) a certificate of a senior officer of the Borrower
(x) specifying the nature and period of existence of each Event of Default
and/or Possible Default, if any, and the action taken, being taken or proposed
to be taken by the Borrower in respect thereof or, if none, so stating, and (y)
certifying that the representations and warranties of the Borrower set forth in
Article IX hereof are true and correct as of the date of such certificate, or,
if not, all respects in which they are not, and (ii) a fully completed covenant
compliance worksheet in the form and substance of Schedule 7.05 hereof relating
to such fiscal year duly certified by the Borrower's accountants; and
(c) forthwith upon the Agent's or any Bank's written request, such
other information about the financial condition, properties and operations of
the Borrower and its Subsidiaries, including, but not limited to, financial
statements, rent rolls and other similar information for each Subsidiary of the
Borrower, in each case as the Agent or that Bank may from time to time
reasonably request.
SECTION 7.06. INSPECTION. The Borrower will and will cause each
Subsidiary to permit its properties and records to be examined at all reasonable
times by the Agent and each of the Banks.
SECTION 7.07. ENVIRONMENTAL COMPLIANCE. The Borrower will comply in all
material respects with any and all Environmental Laws including, without
limitation, all Environmental Laws in jurisdictions in which the Borrower or any
Subsidiary owns property, operates, arranges for disposal or treatment of
hazardous substances, solid waste or other wastes, accepts for transport any
hazardous substances, solid waste or other wastes or holds any interest in real
property or otherwise. The Borrower will furnish to the Banks promptly after
receipt thereof a copy of any notice the Borrower or any Subsidiary may receive
from any governmental authority, private person or entity or otherwise that any
litigation or proceeding pertaining to any environmental, health or safety
matter has been filed or is threatened against the Borrower or such Subsidiary,
any real property in which the Borrower or such Subsidiary holds any interest or
any past or present operation of the Borrower or such Subsidiary. The Borrower
will not allow the storage, release or disposal of hazardous waste, solid waste
or other wastes on, under or to any real property in which the Borrower holds
any interest or performs any of its operations, in violation of any
Environmental Law. As used in this subsection "litigation or proceeding" means
any demand, claim, notice, suit, suit in equity, action, administrative action,
investigation or inquiry whether brought by any governmental authority, private
person or entity or otherwise. The Borrower shall defend, indemnify and hold the
Banks harmless against all costs, expenses, claims, damages, penalties and
liabilities of every kind or nature whatsoever (including attorneys' fees)
arising out of or resulting from the noncompliance of the Borrower or any
Subsidiary with any Environmental Law provided that, so long as and to the
extent that the Banks are not required to make any payment or suffer to exist
any unsatisfied judgment, order or assessment against them, the Borrower may
pursue rights of appeal to comply with such Environmental Laws. In any case of
noncompliance with any Environmental Law by a Subsidiary, the Banks' recourse
for indemnity in respect of the matters provided for in this Section 7.07 shall
be limited solely to the property of the Subsidiary holding title to the
property
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involved in such noncompliance and such recovery shall not be a Lien, or a basis
of a claim of Lien or levy of execution, against either the Borrower's general
assets or the general assets of any of its Subsidiaries.
SECTION 7.08. ERISA. (a) At the request of any Bank, the Borrower will
deliver to such Bank a complete copy of the annual report (Form 5500) of each
Plan required to be filed with the Internal Revenue Service. In addition to any
certificates or notes delivered to the Banks pursuant to this Section 7.08,
copies of any notices received by the Borrower or any Subsidiary of the Borrower
or any ERISA Affiliate with respect to any Plan shall be delivered to the Banks
no later than ten (10) days after the date such notice has been filed with the
Internal Revenue Service or the PBGC or such notice has been received by the
Borrower or such Subsidiary or such ERISA Affiliate, as applicable.
(b) As soon as possible and, in any event, within ten (10) days after
the Borrower, any of its Subsidiaries or any ERISA Affiliate knows or has reason
to know of the occurrence of any of the following, the Borrower will deliver to
each of the Banks a certificate of an authorized officer of the Borrower setting
forth details as to the occurrence and such action, if any, which the Borrower,
such Subsidiary or such ERISA Affiliate is required or proposed to take,
together with any notices required or proposed to be given to or filed with or
by the Borrower, such Subsidiary, such ERISA Affiliate, the PBGC, a Plan
participant or the Plan administrator with respect thereto:
(i) that a Reportable Event has occurred;
(ii) that an accumulated funding deficiency has been incurred
or any application may be or has been made to the Secretary of the
Treasury for a waiver or modification of the minimum funding standard
(including any required installment payments) or an extension of any
amortization period under Section 412 of the Code with respect to a
Plan;
(iii) that a contribution required to be made to a Plan has
not been timely made;
(iv) that a Plan has been or may be terminated, reorganized,
partitioned or declared insolvent under Title IV of ERISA;
(v) that a Plan has an Unfunded Current Liability giving rise
to a Lien under ERISA or the Code;
(vi) that proceedings may be or have been instituted to
terminate or appoint a trustee to administer a Plan;
(vii) that a proceeding has been instituted pursuant to
Section 515 of ERISA to collect a delinquent contribution to a Plan;
(viii) that the Borrower, any of its Subsidiaries or any ERISA
Affiliate will or may incur any liability (including any indirect,
contingent or secondary liability) to or on account of the termination
of or withdrawal from a Plan under Section 4062, 4069, 4201,
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4204 or 4212 of ERISA or with respect to a Plan under Section
401(a)(29), 4971, 4975, or 4980 of the Code or Sections 409 or 502(i)
or 501(1) of ERISA; or
(ix) that the Borrower or any of its Subsidiaries may incur
any material liability pursuant to any employee welfare benefit plan
(as defined in Section 3(1) of ERISA) that provides benefits to retired
employees or other former employees (other than as required by Section
601 of ERISA) or any employee pension benefit plan (as defined in
Section 3(2) of ERISA).
SECTION 7.09. INSURANCE. The Borrower will and will cause each of its
Subsidiaries to (a) keep itself and all of its insurable properties insured at
all times to such extent, by such insurers, and against such hazards and
liabilities as is generally and prudently done by like businesses, it being
understood that the Parent, the Borrower and each Subsidiary has obtained a
fidelity bond for each of its employees that handle funds, (b) give each Bank
prompt written notice of each material change in the Borrower's or any
Subsidiary's insurance coverage and the details of the change and (c) forthwith
upon any Bank's written request, furnish to each Bank such information about the
Borrower's or any Subsidiary's insurance as any Bank may from time to time
reasonably request, which information shall be prepared in form and detail
satisfactory to each Bank and certified by an officer of the Borrower or such
Subsidiary, as applicable.
SECTION 7.10. MONEY OBLIGATIONS. The Borrower will and will cause each
Subsidiary to pay in full (a) prior in each case to the date when penalties
would attach, all taxes, assessments and governmental charges and levies (except
only those so long as and to the extent that the same shall be contested in good
faith by appropriate and timely proceedings diligently pursued) for which it may
be or become liable or to which any or all of its properties may be or become
subject, (b) all of its wage obligations to its employees in compliance with the
Fair Labor Standards Act (29 U.S.C. secs.206-207) or any comparable provisions,
and (c) all of its other obligations calling for the payment of money (except
only those so long as and to the extent that the same shall be contested in good
faith by appropriate and timely proceedings diligently pursued) before such
payment becomes overdue except where the failure to make such payments, either
singly or in the aggregate, would not have a Material Adverse Effect on the
Borrower and provided that the Borrower shall promptly give written notice to
the Agent of any such non-payments, which written notice the Agent will promptly
deliver to each Bank.
SECTION 7.11. RECORDS. The Borrower will and will cause each Subsidiary
to (a) at all times maintain true and complete records and books of account, and
without limiting the generality of the foregoing, maintain appropriate reserves
for possible losses and liabilities, all in accordance with GAAP applied on a
basis not inconsistent with its present accounting procedures, and (b) at all
reasonable times permit any Bank to examine the Borrower's or any Subsidiary's
books and records and to make excerpts therefrom and transcripts thereof.
SECTION 7.12. FRANCHISES. The Borrower will and will cause each
Subsidiary to preserve and maintain at all times its corporate existence, rights
and franchises; PROVIDED, that this Section 7.12 shall not prohibit any merger,
consolidation, dissolution or transfer permitted by Section 8.02.
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SECTION 7.13. NOTICE. The Borrower will cause its Chief Financial
Officer, or in his or her absence another officer designated by the Chief
Financial Officer, to promptly notify the Banks whenever:
(a) any Event of Default or Possible Default may occur hereunder or any
representation or warranty made in Article IX hereof or elsewhere in this
Agreement or in any Related Writing may for any reason cease in any material
respect to be true and complete; and/or
(b) (i) any Subsidiary shall be in default of any material (either with
respect to the Subsidiary or the Borrower) Indebtedness or Contingent Obligation
or, to the knowledge of the Borrower, any material obligations in respect of
taxes and/or Indebtedness for goods or services purchased by, or other
contractual obligations of, such Subsidiary and/or (ii) any Subsidiary shall
not, to the knowledge of Borrower, be in compliance with any law, order, rule,
judgments, ordinance, regulation, license, franchise, lease or other agreement
that has or could reasonably be expected to have a material adverse effect on
the business, operations, property or financial condition of the Subsidiary,
and/or (iii) the Borrower and/or the Subsidiary shall have received or have
knowledge of any actual, pending or threatened claim, notice, litigation,
citation, proceeding, or demand relating to any matter(s) described in
subsections (i) and (ii) of this Section 7.13(b); and/or
(c) the Borrower shall be in default of any guarantee permitted by
Section 8.07(b).
SECTION 7.14. POST CLOSING ITEMS. The Borrower will promptly perform
and complete to the satisfaction of the Agent each of the matters, if any, set
forth on Schedule 7.14 attached hereto (the "Post Closing Items") on or before
the date set forth on Schedule 7.14 for the performance and completion thereof
(the "Satisfaction Date").
SECTION 7.15. FURTHER ASSURANCES; REPLACEMENT NOTES. (a) The Borrower
agrees to execute and deliver to the Agent and/or the Banks any agreements,
documents and instruments, including, without limitation, additional Notes as
replacements or substitutions as may reasonably be required by the Agent and/or
the Banks, and to take such other actions as reasonably requested by the Agent
to effect the transactions contemplated hereby.
(b) Upon the receipt by the Borrower of an affidavit of an officer of a
Bank as to the loss, theft, destruction or mutilation of its Term Note and/or
its Revolving Loan Note or any other security document that is not of public
record, upon the cancellation of any such Term Note, Revolving Loan Note or
other security document, as applicable, the Borrower shall issue, in lieu
thereof, a replacement Term Note, Revolving Loan Note or other security
document, as applicable, in the same principal amount thereof and otherwise of
like tenor.
SECTION 7.16. NOTICE OF DEFAULT OR LITIGATION. Promptly, and in any
event within three (3) Cleveland Banking Days after any officer of the Borrower
or any of its Subsidiaries obtains knowledge thereof, the Borrower will deliver
notice to the Banks of (a) the occurrence of any event which constitutes a
Possible Default or Event of Default, which notice shall specify the nature
thereof, the period of existence thereof and what action the Borrower proposes
to take with respect thereto, and (b) the commencement of, or written threat of,
or any
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significant development in, any litigation or governmental proceeding pending
against the Borrower or any of its Subsidiaries which is likely to have a
Material Adverse Effect.
SECTION 7.17. USE OF PROCEEDS. All proceeds of the Loans shall be used
as provided in Sections 2.01(a) or 3.04, as applicable.
ARTICLE VIII
------------
NEGATIVE COVENANTS
------------------
The Borrower covenants and agrees that as of the Closing Date, and
thereafter for so long as this Agreement is in effect and until the Commitments
and all letters of credit are terminated, no Notes are outstanding and the
Loans, together with interest, fees and all other obligations incurred
hereunder, are paid in full, the Borrower will observe all of the following
provisions, namely:
SECTION 8.01. PLAN. Neither the Borrower nor any Subsidiary will suffer
or permit any Plan to be amended if, as a result of such amendment, the current
liability under the Plan is increased to such an extent that security is
required pursuant to Section 307 of the ERISA. As used herein, "current
liability" means current liability as defined in Section 307 of ERISA.
SECTION 8.02. COMBINATIONS. The Borrower will not dissolve or
liquidate, and will not permit any Subsidiary to dissolve or liquidate, except
in the ordinary course of business to the extent that no Material Adverse Effect
is thereby suffered by the Borrower. The Borrower will not and will not permit
any Subsidiary to be a party to any consolidation or merger; provided, that this
Section 8.02 shall not apply to (i) any merger of a Subsidiary into the Borrower
(with the Borrower being the surviving corporation) or into another Subsidiary,
or (ii) any consolidation of a Subsidiary with another Subsidiary.
SECTION 8.03. BULK TRANSFERS. The Borrower will not and will not permit
a Subsidiary to be a party to any lease, sale or other transfer involving all or
a substantial part of the assets of the Borrower and its Subsidiaries as a
whole; PROVIDED, that this Section 8.03 shall not apply to (a) any transfer of
assets by a Subsidiary to the Borrower or another Subsidiary, (b) the transfer
of assets to a trustee (other than a trustee for the benefit of creditors) in
connection with a building project involving such assets, or (c) any transfer
effected in the normal course of business and on commercially reasonable terms.
SECTION 8.04. BORROWINGS. The Borrower will not and will not permit any
Subsidiary to create, assume or suffer to exist any unsecured or secured
Indebtedness of any kind or any reimbursement obligation or other similar
liabilities with respect to letters of credit issued for the Borrower's or any
Subsidiary's account (other than non-recourse letters of credit or surety bonds
issued as credit enhancement); PROVIDED, that this Section 8.04 shall not apply
to the following (collectively, "Permitted Debt"):
(a) any Loans obtained hereunder;
(b) any secured Indebtedness of the Borrower or of any Subsidiary
created in the course of purchasing or developing real estate or financing
construction or other improvements thereon or purchasing furniture, fixtures or
other equipment therefor or any other related
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Indebtedness of the Borrower or of any Subsidiary or any refinancings thereof,
provided, that neither the Borrower nor any Subsidiary (other than a Subsidiary
whose sole assets consist of contiguous parcels of land which are being
purchased or developed with such financing, the improvements, if any, thereon,
furniture, fixtures and other equipment used in connection therewith,
receivables arising from tenants in connection therewith and the proceeds of
such receivables and other property directly obtained from the ownership of such
assets) shall have any personal liability for such Indebtedness, the creditors'
recourse being solely to the property being pledged as collateral for such
Indebtedness and the income therefrom;
(c) (i) Indebtedness under any Hedge Agreement relating to Indebtedness
otherwise permitted under this Section 8.04, provided, that, any Hedge Agreement
proposed to be entered into by the Borrower or any Subsidiary that will not be
provided by one or more of the Agents or the Banks shall require the prior
written consent of the Required Banks (such written consent to be delivered by
each consenting Bank to the Agent not more than three (3) Business Days after
the request for such consent has been delivered by the Borrower to the Agent,
provided, that, each Bank that does not deliver such written consent within such
three (3) Business Day period shall be deemed to have denied the request for
such Hedge Agreement) and (ii) Indebtedness of any of the Borrower's
Subsidiaries (whose sole assets consist of contiguous parcels of lands, the
improvements, if any, thereon, fixtures and other equipment used in connection
therewith, receivables arising from tenants in connection therewith and the
proceeds of such receivables and other property directly obtained from the
ownership of such assets) under Hedge Agreements that are recourse solely to
such Subsidiary; or
(d) Indebtedness owed by any Subsidiary to the Borrower as permitted by
Section 8.06(b) hereof.
SECTION 8.05. LIENS. The Borrower will not and will not permit any
Subsidiary to (a) acquire any property subject to any inventory consignment,
land contract or other title retention contract, (b) other than the periodic
sale by the Borrower or any Subsidiary of any mortgages held by the Borrower or
such Subsidiary, sell or otherwise transfer any receivables, or (c) suffer or
permit any property now owned or hereafter acquired by it to be or become
encumbered by any mortgage, security interest, financing statement or Lien of
any kind or nature other than:
(i) any Lien for a tax, assessment or governmental charge or
levy so long as the payment thereof is not at the time required by
Section 7.10 hereof;
(ii) any Lien securing only its workers' compensation,
unemployment insurance and similar obligations;
(iii) any mechanic's, carrier's or similar common law or
statutory Lien incurred in the normal course of business;
(iv) any transfer of a check or other medium of payment for
deposit or collection through normal banking channels or any similar
transaction in the normal course of business;
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(v) any mortgage, security interest or other Lien securing
only Indebtedness permitted by clause (b) of Section 8.04;
(vi) any Lien permitted by Section 8.15 hereunder;
(vii) any transfer of receivables without recourse;
(viii) any assignment of rents, profits and/or cash flows
derived from particular real estate given as additional security to a
mortgage or security interest on such real estate permitted by this
Section 8.05, provided, that the mortgage or security interest
encumbers only the real property in question;
(ix) any financing statement perfecting a security interest
permitted by this Section 8.05;
(x) easements, restrictions, minor title irregularities and
similar matters having no adverse effect as a practical matter on the
ownership or use of the Borrower's or any Subsidiary's real property;
or
(xi) any mortgage, security interest and Lien securing any
Debt incurred to the Banks under this Agreement.
SECTION 8.06. LOANS RECEIVABLE. The Borrower will not and will not
permit any Subsidiary to knowingly make or have outstanding at any time to any
third party, any advance or loan of any kind other than:
(a) any loan secured by mortgages on real estate and not exceeding
eighty per cent (80%) of the value of the real estate as appraised by a
nationally recognized appraiser;
(b) any loan from the Borrower to one of its Subsidiaries or from such
a Subsidiary to the Borrower, provided, that any such loan from a Subsidiary to
the Borrower shall be subordinated in all respects to the Borrower's Debt to the
Banks on such terms and conditions as may be satisfactory to the Banks; or
(c) any advance or loan made in the normal course of business of
acquiring properties for, or developing properties of, the Borrower or any
Subsidiary.
SECTION 8.07. GUARANTEES. The Borrower will not and will not permit any
Subsidiary to pledge its credit or property in any manner for the payment or
other performance of Indebtedness, contract or other obligation of another
(including, without limitation, the Indebtedness of the Parent under the Senior
Notes), whether as guarantor (whether of payment or of collection), surety,
co-maker, endorser or by agreeing conditionally or otherwise to make any
purchase, loan or investment in order thereby to enable another to prevent or
correct a default of any kind, or otherwise, except for:
(a) endorsements of negotiable instruments for deposit or collection or
similar transactions in the normal course of business;
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(b) any guarantee set forth on Schedule 9.22 as of the Closing Date;
(c) any indemnity or guarantee of a surety bond for the performance by
a customer of the Borrower or any Subsidiary of such customer's obligations
under a land development contract;
(d) any guarantee by the Borrower of the equity investment or
performance of a Subsidiary (other than any Indebtedness of such Subsidiary
incurred for borrowed money) in connection with a real estate project in favor
of a partner or partnership in which such Subsidiary is a general partner, when
the Borrower deems it to be in its best interest not to be a partner or have a
direct interest in the partnership;
(e) any guarantee or indemnity by the Borrower for fraud,
misappropriation, misapplication or environmental problems, as are usual and
customary in commercial mortgage loan transactions entered into by the Borrower
and/or its Subsidiaries; and
(f) any guarantee by the Borrower of an unsecured Hedge Agreement
permitted by Section 8.04 hereof entered into by a Subsidiary and with a
maturity date of not more than twelve (12) months following the date of such
Hedge Agreement.
SECTION 8.08. AMENDMENT OF ARTICLES OF INCORPORATION AND/OR
REGULATIONS. The Borrower will not amend, modify or supplement its articles of
incorporation or its code of regulations in any material respect that would be
detrimental to the performance by the Borrower of its obligations under this
Agreement or the Notes or the rights of the Agents or the Banks under this
Agreement or the Notes.
SECTION 8.09. FISCAL YEAR. Except as required by law, or required in
connection with a transaction permitted under Section 8.02 hereof, the Borrower
will not change its fiscal year without the consent of the Banks, which consent
shall not be unreasonably withheld.
SECTION 8.10. REGULATION U. The Borrower will not, and will not permit
its Subsidiaries to, directly or indirectly, (a) apply any part of the proceeds
of any Loan to the purchasing or carrying of any "margin stock" within the
meaning of Regulations T, U or X of the Federal Reserve Board, or any
regulations, interpretations or rulings thereunder, (b) extend credit to others
for the purpose of purchasing or carrying any such margin stock, or (c) retire
Indebtedness which was incurred to purchase or carry any such margin stock.
SECTION 8.11. NO PLEDGE. (a) The Borrower will not, and will not permit
any of its Subsidiaries to, sell, assign, pledge or otherwise dispose of or
encumber any of its or their partnership interests or other equity interests in
any of its or their Subsidiaries, except as permitted under Section 8.02, and
except that the Borrower and each Subsidiary shall be permitted to pledge its
stock or other ownership interests in any of its or their Subsidiaries to secure
the following:
(i) additional or mezzanine Indebtedness incurred with respect
to a project encumbered by a first mortgage at the time the additional
or mezzanine Indebtedness is incurred, so long as such additional or
mezzanine Indebtedness is permitted under Section 8.04 of this
Agreement; provided, that the sum of the then existing Indebtedness
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with respect to such project plus such additional or mezzanine
Indebtedness does not exceed eighty percent (80%) of the appraised
value of the project at the time such additional or mezzanine
Indebtedness is incurred; or
(ii) primary Indebtedness (or the re-financing thereof)
incurred solely with respect to the acquisition of real property or for
construction or redevelopment purposes, PROVIDED, that such primary
Indebtedness (or the re-financing thereof) does not exceed one hundred
percent (100%) of the appraised value of the acquired property at the
time of such financing or re-financing, as applicable.
(b) In addition to the foregoing, (i) such pledges of stock or other
ownership interests in a Subsidiary (the "Pledged Subsidiary") may only be made
to secure Indebtedness incurred with respect to a project owned or to be
acquired by such Pledged Subsidiary and not to secure Indebtedness incurred with
respect to a project owned or to be acquired by any other Subsidiary; (ii) such
pledges of stock or other ownership interests may be made with respect to no
more than fifteen (15) individual properties collectively between the Borrower,
all Subsidiaries and all Restricted Companies (as defined in the Guaranty), at
any one time, exclusive of the properties set forth on Schedule 9.9A to the
Guaranty and (iii) the aggregate of all such additional or mezzanine
Indebtedness described in Section 8.11(a)(i) above and primary Indebtedness
described in Section 8.11(a)(ii) above for which such a pledge will be provided
by the Borrower or a Subsidiary shall not exceed Two Hundred Million Dollars
($200,000,000) in the aggregate for all pledges provided by the Borrower, its
Subsidiaries and all Restricted Companies (as defined in the Guaranty), taken
together.
(c) The Borrower will deliver to the Agents and the Banks an updated
schedule in the form of Schedule 9.9 to the Guaranty listing all of the
properties as to which a pledge of stock or other ownership interest has been
provided to a lender in accordance with this Section 8.11, within forty-five
(45) days after the end of each of the Borrower's fiscal quarters.
SECTION 8.12. TRANSACTIONS WITH AFFILIATES. Except for loans permitted
by Section 8.06 of this Agreement, the Borrower will not and will not permit any
of its Subsidiaries to, enter into any transaction or series of transactions
with any Affiliate other than in the ordinary course of business and on terms
and conditions substantially as favorable as would be obtainable by the Borrower
or such Subsidiary, at the time, in a comparable arm's-length transaction with a
Person other than an Affiliate.
SECTION 8.13. DEBT SERVICE COVERAGE RATIO. The Borrower will not permit
the Debt Service Coverage Ratio in each case for the four (4) consecutive
quarters ending on each January 31, April 30, July 31 and October 31 to be less
than 1:30:1.00.
SECTION 8.14(a). RESTRICTIONS ON DISTRIBUTIONS DURING AN EVENT OF
DEFAULT OTHER THAN A PAYMENT DEFAULT. If any Event of Default has occurred and
is continuing, or if any Event of Default would occur as a result thereof, other
than a Payment Default, the Borrower shall not directly or indirectly declare,
make, or pay any Dividends in respect of its Capital Stock, or, notwithstanding
any other provision of the Agreement to the contrary, make any loans or advances
to the Parent (any such Dividends, loans, or advances are referred to
hereinafter as "Distributions") in excess of the sum of the amounts
-35-
sufficient to pay, when due, all interest payments in respect of the Senior
Notes and the amounts sufficient to pay, when due, all taxes of the Parent
(collectively, "Permitted Distributions"); provided, that any Permitted
Distributions shall be applied by the Parent strictly to the permitted uses
specified above.
SECTION 8.14(b). RESTRICTIONS ON DISTRIBUTIONS DURING A PAYMENT
DEFAULT. In the event of and during the continuance of any Payment Default, the
Borrower shall not directly or indirectly declare or pay any Distributions to
the Parent.
SECTION 8.15. CROSS COLLATERALIZATION AND CROSS DEFAULTS
(a) Except as permitted in this Section 8.15, the Borrower shall not
and shall not permit any Subsidiary to:
(i) cross-default or agree to cross-default any Permitted Debt
to this Agreement or the Debt incurred hereunder;
(ii) agree to any financial covenants based on the performance
of the Borrower under any other Permitted Debt (other than the Debt);
or
(iii) cross-collateralize, or agree to cross-collateralize
Indebtedness owing to any one lender under one or more different loan
agreements or arrangements, provided, that the cross-defaulted and/or
cross-collateralized Indebtedness set forth on Schedule 8.15 attached
hereto shall be permitted.
(b) Notwithstanding Section 8.15(a) above:
(i) with respect to construction projects which are
constructed in multiple phases and/or stabilized properties, the
Borrower and any Subsidiary shall be permitted to cross-default and/or
cross-collateralize any Permitted Debt with other Permitted Debt (other
than, in each case, the Debt under this Agreement), but only if the
phases to be cross-collateralized and/or cross-defaulted consist of a
single identifiable project; and
(ii) under the construction loan agreement or any other
relevant documents (other than a Completion Guaranty) relating to any
Permitted Debt (other than the Debt), any Subsidiary (but not the
Borrower) shall be permitted to cross-default or agree to cross-default
such Permitted Debt with this Agreement or the Debt, provided, that,
the construction lender shall not be permitted to call a default under
its construction loan agreement or other relevant documents due to an
Event of Default under this Agreement unless the Banks have provided a
written notice of the Event of Default to the Borrower and all
applicable cure periods have lapsed without remedy; provided, further,
that the construction lender shall not, under any circumstances, be
permitted to call upon its Completion Guaranty, if any, due to an Event
of Default under this Agreement.
SECTION 8.16. SENIOR NOTES. The Borrower shall not alter, amend, change
or modify the terms of the Senior Notes (a) to allow the maturity date of the
Senior Notes to be less than ten (10) years from the date of issue, (b) to
provide for payment of interest under the Senior
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Notes less frequently than semi-annually, or (c) to modify the redemption
provisions contained therein, including adding additional redemption provisions.
ARTICLE IX
----------
REPRESENTATIONS AND WARRANTIES
------------------------------
Subject only to such exceptions, if any, as may be fully disclosed in
an officer's certificate in the form of Schedule 9.00 hereto furnished by the
Borrower to each Bank prior to the execution and delivery hereof, the Borrower
represents and warrants as follows:
SECTION 9.01. EXISTENCE. The Borrower is a corporation duly organized
and validly existing in good standing under the laws of the State of Ohio and is
duly qualified to transact business and is in good standing as a foreign
corporation in all jurisdictions (other than jurisdictions in which the nature
of the property owned or business conducted, when considered in relation to the
absence of serious penalties, renders qualification as a foreign corporation
unnecessary as a practical matter) where the nature of the property owned and
business transacted by the Borrower render such qualification necessary. Each of
the Borrower's Subsidiaries is duly organized and existing in good standing in
the jurisdiction of its incorporation or formation. The Borrower and each of its
Subsidiaries has full power, authority, and legal right to own and operate its
respective properties and to carry on the business in which it engages and
intends to engage.
SECTION 9.02. RIGHT TO ACT. No registration with or approval of any
governmental agency of any kind is required for the due execution and delivery
or for the enforceability of this Agreement and any Note issued pursuant to this
Agreement. The Borrower has legal power and right to execute and deliver this
Agreement and any Note issued pursuant to this Agreement and to perform and
observe the provisions of this Agreement and any Note issued pursuant hereto and
all such actions have been duly authorized by all necessary corporate action of
the Borrower. By executing and delivering this Agreement and any Note issued
pursuant to this Agreement and by performing and observing the provisions of
this Agreement and any Note issued pursuant hereto, the Borrower will not
violate any existing provision of its Articles of Incorporation, Code of
Regulations or any applicable law or violate or otherwise become in default
under any existing contract, agreement, indenture or other obligation binding
upon the Borrower. The officers executing and delivering this Agreement on
behalf of the Borrower have been duly authorized to do so.
SECTION 9.03. BINDING EFFECT. This Agreement constitutes a valid and
binding agreement of the Borrower, and the Guaranty constitutes a valid and
binding agreement of the Parent, in both cases enforceable in accordance with
their respective terms, and the Notes, when executed and delivered in accordance
with this Agreement, will constitute valid and binding obligations of the
Borrower, enforceable in accordance with their respective terms.
SECTION 9.04. LITIGATION. No litigation or proceeding is pending or
being threatened against the Borrower, the Parent or any Subsidiary before any
court or any administrative agency which might, if successful, be expected to
have a Material Adverse Effect on the Borrower or the Parent. The Internal
Revenue Service has not alleged any default by the
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Borrower, the Parent or any Subsidiary in the payment of any tax or threatened
to make any assessment in respect thereof.
SECTION 9.05. EMPLOYEE RETIREMENT INCOME SECURITY ACT. No material Plan
established or maintained by the Borrower or any Domestic Subsidiary, which is
subject to Part 3 of Subtitle B of Title I of ERISA, had an accumulated funding
deficiency (as such term is defined in Section 302 of ERISA) as of the last day
of the most recent fiscal year of such Plan ended prior to the date hereof, or
would have had an accumulated funding deficiency (as so defined) on such day if
such year were the first year of such Plan to which Part 3 of Subtitle B of
Title I of that Act applied, and no material liability to the PBGC, has been, or
is expected by the Borrower or any Domestic Subsidiary to be, incurred with
respect to any such Plan by the Borrower or any Domestic Subsidiary.
SECTION 9.06. ENVIRONMENTAL COMPLIANCE. To the actual knowledge of the
Borrower, the Borrower and each Subsidiary are in compliance with any and all
Environmental Laws including, without limitation, all Environmental Laws in all
jurisdictions in which the Borrower or any Subsidiary owns or operates, or has
owned or operated, a facility or site, arranges or has arranged for disposal or
treatment of hazardous substances, solid waste or other wastes, accepts or has
accepted for transport any hazardous substances, solid waste or other wastes or
holds or has held any interest in real property or otherwise, for which failure
to comply is likely to result in claims, penalties or fines in excess of
$500,000 for any single claim of noncompliance or $5,000,000 in the aggregate
for all such claims and occurrences. No litigation or proceeding arising under,
relating to or in connection with any Environmental Law is pending or threatened
against the Borrower or any Subsidiary, any real property in which the Borrower
or any Subsidiary holds or has held an interest or any past or present operation
of the Borrower or any Subsidiary. To the actual knowledge of the Borrower, no
release, threatened release or disposal of hazardous waste, solid waste or other
wastes is occurring, or has occurred, on, under, from, or to any real property
in which the Borrower or any Subsidiary holds any interest or performs any of
its operations, in violation of any Environmental Law that could reasonably be
expected to result in claims of liability against the Borrower or any Subsidiary
in excess of $500,000 for any single claim or $5,000,000 in the aggregate for
all such claims. As used in this subsection, "litigation or proceeding" means
any demand, claim, notice, suit, suit in equity, action, administrative action,
investigation or inquiry whether brought by any governmental authority, private
person or entity or otherwise.
SECTION 9.07. SOLVENCY. The Borrower has received consideration which
is the reasonable equivalent value of the obligations and liabilities that the
Borrower has incurred to the Banks. The Borrower is not insolvent as defined in
any applicable state or federal statute, nor will the Borrower be rendered
insolvent by the execution and delivery of this Agreement or any Note to the
Banks. The Borrower is not engaged or about to engage in any business or
transaction for which the assets retained by it shall be an unreasonably small
capital, taking into consideration the obligations to the Banks incurred
hereunder. The Borrower does not intend to, nor does it believe that it will,
incur debts beyond its ability to pay them as they mature.
SECTION 9.08. FINANCIAL STATEMENTS. The annual financial statements of
the Borrower prepared as of January 31, 2001, certified by the Borrower's Chief
Financial Officer and heretofore furnished to each Bank, are true and complete,
have been prepared in accordance
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with GAAP applied on a basis consistent with those used by the Borrower during
its immediately preceding full fiscal year and fairly present its financial
condition as of those dates and the results of its operations for the periods
set forth therein. Since January 31, 2001 there has been no material adverse
change in the Borrower's financial condition, properties or business or in the
financial condition, properties or business of any Subsidiary other than any
change which has been previously disclosed to the Banks.
SECTION 9.09. DEFAULTS. No Event of Default or Possible Default exists
hereunder, nor will any begin to exist immediately after the execution and
delivery hereof.
SECTION 9.10. OPERATIONS. The Borrower and its Subsidiaries have
obtained and continue to possess all permits, licenses and authorizations the
absence of which would materially and adversely affect the Borrower's or a
Subsidiary's ability to carry on its business in the ordinary course.
SECTION 9.11. TITLE TO PROPERTIES; PATENTS, TRADE MARKS, ETC. The
Borrower and its Subsidiaries have good and marketable title to all of their
properties and assets, including, without limitation, the properties and assets
reflected in the financial statements referred to in Section 9.08 (excepting,
however, inventory and other immaterial assets, in each case sold or otherwise
disposed of in the ordinary course of business subsequent to the date of such
financial statements). There are no Liens of any nature whatsoever on any of the
properties or assets of the Borrower and its Subsidiaries other than such as are
permitted under Section 8.05. The Borrower and its Subsidiaries owns or
possesses all the patents, trademarks, service marks, trade names, copyrights,
and licenses and rights with respect to the foregoing necessary for the conduct
of their respective businesses as now conducted, without any known conflict with
the valid rights of others which would be inconsistent with the conduct of its
business substantially as now conducted and as currently proposed to be
conducted.
SECTION 9.12. COMPLIANCE WITH OTHER INSTRUMENTS. The Borrower and, to
the best of the Borrower's knowledge, each Subsidiary is not in default in the
performance, observance or fulfillment of any of the material obligations,
covenants or conditions contained in any evidence of Indebtedness or Contingent
Obligations. Neither the execution and delivery of this Agreement, nor the
consummation of the transactions contemplated hereby, nor compliance with the
terms and provisions hereof will violate the provisions of any applicable law or
of any applicable order or regulations of any governmental authority having
jurisdiction over the Borrower or its Subsidiaries, or will conflict with any
material permit, license or authorization, or will conflict with or result in a
breach of any of the terms, conditions or provisions of any restriction or of
any agreement or instrument to which the Borrower is now a party, or will
constitute a default thereunder, or will result in the creation or imposition of
any Lien upon any of the properties or assets of the Borrower or any Subsidiary.
SECTION 9.13. MATERIAL RESTRICTIONS. Neither the Borrower, nor the
Parent nor any of their respective Subsidiaries are a party to any agreement or
other instrument or subject to any other restriction which would have a
Materially Adverse Effect on the Parent or the Borrower and its Subsidiaries
taken as a whole.
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SECTION 9.14. CORRECTNESS OF DATA FURNISHED. This Agreement and all
schedules and exhibits attached hereto do not contain any untrue statement of a
material fact or omit a material fact necessary to make the statements contained
herein or therein not misleading; and there is no fact not otherwise disclosed
in writing to the Agent which, to the knowledge of the Borrower, would have a
Material Adverse Effect on the Borrower and its Subsidiaries.
SECTION 9.15. TAXES. The Borrower, the Parent and each of their
respective Subsidiaries has (a) timely filed all returns required to be filed by
it with respect to all taxes, (b) paid all taxes shown to have become due
pursuant to such returns, and (c) paid all other taxes for which a notice of
assessment or demand for payment has been received other than taxes that the
Borrower, the Parent or such Subsidiary is contesting in good faith with
appropriate proceedings. All tax returns have been prepared in accordance with
all applicable laws and requirements and accurately reflect in all material
respects the taxable income (or other measure of tax) of the Borrower, the
Parent or such Subsidiary filing the same. The accruals for taxes contained in
the financial statements referred to in Section 9.08 are adequate under GAAP to
cover all liabilities for taxes for all periods ending on or before the date of
such financial statements and include adequate provision for all deferred taxes
(including deferred federal taxes), and nothing has occurred subsequent to that
date to make any of such accruals inadequate. All taxes for periods beginning
after the date of this Agreement through and including the Closing Date have
been paid or are adequately reserved against on the books of the Borrower or the
Parent, as applicable. The Borrower, the Parent and each of their respective
Subsidiaries has timely filed all information returns or reports which are
required to be filed and has accurately reported all information required to be
included on such returns or reports. There are no proposed assessments of taxes
against the Borrower, the Parent or any of their respective Subsidiaries nor
proposed adjustments to any tax return filed that, individually or in the
aggregate, would have a Material Adverse Effect on the Borrower or the Parent.
SECTION 9.16. COMPLIANCE WITH LAWS. Except as disclosed on Schedule
9.16, the Borrower and, to the best of the Borrower's knowledge, the Parent and
each of their respective Subsidiaries is in compliance in all material respects
with all material laws, rules, regulations, court orders and decrees, and orders
of any governmental agency which are applicable to the Borrower, the Parent or
their respective Subsidiaries or to their respective properties.
SECTION 9.17. REGULATION U, ETC. The Borrower does not own, nor does it
have any present intention of acquiring, any "margin stock" within the meaning
of Regulation U (12 CFR Part 221) of the Board of Governors of the Federal
Reserve System (herein called "margin stock"). The proceeds of the Loans will
not be used, directly or indirectly, by the Borrower for the purpose of
purchasing or carrying, or for the purpose of reducing or retiring any
Indebtedness or other liability which was originally incurred to purchase or
carry, any margin stock or for any other purpose which might cause the
transactions contemplated hereby to be considered a "purpose credit" within the
meaning of said Regulation U, or which might cause this Agreement to violate
Regulation U, Regulation T, Regulation X or any other regulation of the Board of
Governors of the Federal Reserve System or the Securities Exchange Act of 1934.
Upon request, the Borrower will promptly furnish the Agent with a statement in
conformity with the requirements of Federal Reserve Form U-1 referred to in said
Regulation U.
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SECTION 9.18. HOLDING COMPANY ACT. The Borrower is not a "Holding
Company" or a "Subsidiary Company" of a "Holding Company", or an "Affiliate" of
a "Holding Company" or of a "Subsidiary Company" of a "Holding Company", as such
terms are defined in the Public Utility Holding Company Act of 1935, as amended.
SECTION 9.19. SECURITIES ACT, ETC. Neither the registration of any
security under the Securities Act of 1933, as amended, or any other federal,
state or local securities laws, nor the qualification of the Agreement, the
Notes and/or the Guaranty under the Trust Indenture Act of 1939, as amended, is
required in connection with the Loans or the issuance and delivery of the Notes
pursuant hereto.
SECTION 9.20. INVESTMENT COMPANY ACT. The Borrower is not, nor
immediately after the application by the Borrower of the proceeds of each Loan
will the Borrower be, an "investment company" within the meaning of the
Investment Company Act of 1940, as amended.
SECTION 9.21. INDEBTEDNESS OF SUBSIDIARIES. No Subsidiary has any
Indebtedness other than (a) on terms that limit recourse for the payment thereof
to the real property or other assets of the Subsidiary securing such
Indebtedness, provided, that the assets securing such Indebtedness were acquired
or developed with the proceeds of such Indebtedness, (b) such Indebtedness owed
by a Subsidiary the sole assets of which consist of contiguous parcels of land,
the improvements, if any, thereon, furniture, fixtures and other equipment used
in connection therewith, receivables arising from tenants in connection
therewith and the proceeds of such receivables and other property directly
obtained from the ownership of such assets, or (c) Indebtedness permitted under
Section 8.04 or 8.06 of this Agreement.
SECTION 9.22. GUARANTIES. (a) All outstanding guaranties, including,
but not limited to Completion Guaranties, issued by the Borrower and/or the
Parent and the maximum amounts guaranteed pursuant to each such guaranty are set
forth on Schedule 9.22 attached hereto.
(b) With respect to each Completion Guaranty set forth on Schedule
9.22, the Borrower or the Parent, as applicable, has received a budget for the
relevant construction project and any interest reserve provided in connection
therewith is available to the construction lender only through project
completion and not through stabilization of the project.
SECTION 9.23. INDEBTEDNESS. Schedule 9.23 attached hereto sets forth a
complete and accurate list of all Indebtedness, of each of the Parent and the
Borrower (other than the Loans and intercompany Indebtedness), not otherwise
disclosed on the most recent financial statements delivered by the Borrower to
the Banks or by the Parent to the Banks, as applicable. All intercompany
Indebtedness of the Parent and the Borrower is subordinated in all respects to
the Borrower's Debt to the Banks.
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ARTICLE X
---------
EVENTS OF DEFAULT
-----------------
Each of the following shall constitute an event of default (each an
"Event of Default") hereunder:
SECTION 10.01. PAYMENTS. If all or any installment of the principal of,
or interest on, any Note, or any fee provided hereunder shall not be paid in
full punctually when due and payable.
SECTION 10.02. COVENANTS.
(a) If the Borrower shall fail or omit to perform or observe any
agreement or other provision contained or referred to in Sections 7.13(a), 7.15,
7.16(a), 7.17 or Article 8 of this Agreement; or
(b) If the Borrower shall fail or omit to perform or observe any
agreement or other provision (other than those referred to in Sections 10.01 or
10.02(a) hereof) contained or referred to in this Agreement or any Related
Writing that is on the Borrower's part to be complied with, and the Borrower
shall not have corrected such failure or omission within thirty (30) days after
the giving of written notice thereof to the Borrower by the Agent or any Bank
that the specified default is to be remedied.
SECTION 10.03. REPRESENTATIONS AND WARRANTIES. If any representation,
warranty or statement made in or pursuant to this Agreement or any Related
Writing or any other material information furnished by the Borrower to the
Agents, the Banks or any thereof or any other holder of any Note, shall be false
or erroneous in any material respect.
SECTION 10.04. CROSS DEFAULT. If the Borrower and/or any Subsidiary
defaults in any payment of principal or interest due and owing upon any
Indebtedness (other than the Debt) in excess of $1,000,000, or, in the case of
the Borrower, in the payment or performance of any obligation permitted to be
outstanding or incurred pursuant to Sections 8.04 or 8.05, 8.06, or 8.07 hereof
in excess of $1,000,000, beyond any period of grace provided with respect
thereto or in the performance of any other agreement, term or condition
contained in any agreement under which any such obligation is created, if the
effect of such default is to accelerate the maturity of the related Indebtedness
or to permit the holder thereof to cause such Indebtedness to become due prior
to its stated maturity or foreclose on any lien on property of the Borrower
securing the same, except that defaults in payment or performance of
non-recourse obligations of the Borrower or any Subsidiary shall not constitute
Events of Default under this Section 10.04 unless such defaults have,
individually or in the aggregate, a Material Adverse Effect on the Borrower.
SECTION 10.05. TERMINATION OF PLAN. If (a) any Reportable Event occurs
and the Banks, in their sole determination, deem such Reportable Event to
constitute grounds (i) for the termination of any Plan by the PBGC or (ii) for
the appointment by the appropriate United States district court of a trustee to
administer any Plan and such Reportable Event shall not have been fully
corrected or remedied to the full satisfaction of the Banks within thirty (30)
days after the giving of written notice of such determination to the Borrower by
the Banks or (b) any Plan shall be terminated within the meaning of Title IV of
ERISA or (c) a trustee shall be appointed
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by the appropriate United States district court to administer any Plan, or (d)
the PBGC shall institute proceedings to terminate any Plan or to appoint a
trustee to administer any Plan.
SECTION 10.06. DOMESTIC SUBSIDIARY SOLVENCY. If (a) any Domestic
Subsidiary shall (i) generally not pay its debts as such debts become due, or
(ii) make a general assignment for the benefit of creditors, or (iii) apply for
or consent to the appointment of a receiver, a custodian, a trustee, an interim
trustee or liquidator of itself or all or a substantial part of its assets, or
(iv) be adjudicated a debtor or have entered against it an order for relief
under Title 11 of the United States Code, as the same may be amended from time
to time, or (v) file a voluntary petition in bankruptcy or file a petition or an
answer seeking reorganization or an arrangement with creditors or seeking to
take advantage of any other law (whether federal or state) relating to relief of
debtors, or admit (by answer, by default or otherwise) the material allegations
of a petition filed against it in any bankruptcy, reorganization, insolvency or
other proceeding (whether federal or state) relating to relief of debtors, or
(vi) suffer or permit to continue unstayed and in effect for thirty (30)
consecutive days any judgment, decree or order, entered by a court of competent
jurisdiction, which approves a petition seeking its reorganization or appoints a
receiver, custodian, trustee, interim trustee or liquidator of itself or of all
or a substantial part of its assets, or (vii) take or omit to take any other
action in order thereby to effect any of the foregoing or (viii) fail to pay and
discharge all lawful taxes, assessments and governmental charges or levies
imposed upon it or its income, profits, or properties, and/or all lawful claims
for labor, materials and supplies, which, if unpaid, might become a lien or
charge against such properties, in all cases before the same shall become in
default, or (ix) fail to comply with any and all Environmental Laws applicable
to such Domestic Subsidiary, its properties or activities, or (x) fail to
observe, perform or fulfill any of its obligations, covenants or conditions
contained in any evidence of Indebtedness or Contingent Obligations or other
contract, decree, order, judgment, or instrument to which such Domestic
Subsidiary is a party or by which it or its assets are bound, and (b) any such
event or events described in (a) above shall in the reasonable judgment of the
Banks have a Material Adverse Effect on the Borrower.
SECTION 10.07. BORROWER'S SOLVENCY. If the Borrower shall (a)
discontinue business, or (b) generally not pay its debts as such debts become
due, or (c) make a general assignment for the benefit of creditors, or (d) apply
for or consent to the appointment of a receiver, a custodian, a trustee, an
interim trustee or liquidator of all or a substantial part of its assets, or (e)
be adjudicated a debtor or have entered against it an order for relief under
Title 11 of the United States Code, as the same may be amended from time to time
(the "Bankruptcy Code"), or (f) file a voluntary petition under any chapter or
provision of the Bankruptcy Code or file a petition or an answer seeking
reorganization or an arrangement with creditors or seeking to take advantage of
any other law (whether federal or state) relating to relief of debtors, or admit
(by answer, by default or otherwise) the material allegations of a petition
filed against it in any bankruptcy, reorganization, insolvency or other
proceeding (whether federal or state) relating to relief of debtors, or (g)
suffer or permit to continue unstayed and in effect for thirty (30) consecutive
days any judgment, decree or order entered by a court or governmental commission
of competent jurisdiction, which assumes custody or control of the Borrower,
approves a petition seeking reorganization of the Borrower or any other judicial
modification of the rights of its creditors, or appoints a receiver, custodian,
trustee, interim trustee or liquidator for the Borrower or of all or a
substantial part of its assets, or (h) take or omit to take any action in order
thereby to effect any of the foregoing.
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SECTION 10.08. CHANGE OF OWNERSHIP; CHANGE OF MANAGEMENT EVENT. If a
Change of Ownership Event or a Change of Management Event shall occur.
SECTION 10.09. JUDGMENTS. If one or more judgments or decrees shall be
entered against the Borrower involving a liability (not paid or fully covered by
a reputable and solvent insurance company) in excess of $10,000,000 for all such
judgments or decrees and any such judgments or decrees shall not have been
vacated, discharged, stayed or bonded pending appeal within sixty (60) days from
the entry thereof.
SECTION 10.10. DEFAULT UNDER GUARANTY OR SENIOR NOTES. If the Parent
defaults in the payment or performance of any obligation in the Guaranty or in
the performance of any other agreement, covenant, term or condition in the
Guaranty, or in the payment or performance of any obligation under the Senior
Notes or the Indenture (after giving effect to any applicable grace periods), or
in the performance of any other agreement, covenant, term or condition in the
Senior Notes or the Indenture (after giving effect to any applicable grace
periods).
SECTION 10.11. DEFAULT UNDER SUBORDINATION AGREEMENT. If the Parent
defaults in the performance of any obligation in the Subordination Agreement or
in the performance of any other agreement, covenant, term or condition in the
Subordination Agreement (which default shall only be an Event of Default
hereunder when the Agent provides written notice of such default to the Parent
and/or the Borrower).
ARTICLE XI
----------
REMEDIES UPON DEFAULT
---------------------
Notwithstanding any contrary provision or inference herein or
elsewhere, the Banks may take any or all of the following actions if any Event
of Default occurs and is continuing:
SECTION 11.01. OPTIONAL DEFAULTS. If any Event of Default referred to
in Sections 10.01, 10.02(a), 10.02(b), 10.03, 10.04, 10.05, 10.06, 10.07 (other
than Section 10.07 (e), (f), (g) or (h) (solely as it relates to Section
10.07(a), (b), (c) or (d)) and/or Section 10.08, 10.09, 10.10 (other than an
Event of Default (as defined in the Guaranty) under Section 10(f) or 10(g) of
the Guaranty) or 10.11 shall occur, the Required Banks shall have the right in
their discretion, by directing the Agent, on behalf of the Banks, to give
written notice to the Borrower, and to
(a) terminate the Commitments and the credits hereby established and
any letter of credit which may be terminated in accordance with its terms, in
each case, if not theretofore terminated, and forthwith upon such election the
obligations of the Banks, and each thereof, to make any further Loan or Loans
and/or issue further letters of credit hereunder immediately shall be
terminated, and/or
(b) accelerate the maturity of all of Borrower's Debt to the Banks (if
it be not already due and payable), whereupon all of Borrower's Debt to the
Banks shall become and thereafter be immediately due and payable in full without
any presentment or demand and without any further or other notice of any kind,
all of which are hereby waived by the Borrower.
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SECTION 11.02. AUTOMATIC DEFAULTS. If any Event of Default referred to
in Section 10.07(e), 10.07(f), 10.07(g), 10.07 (h) (solely as it relates to
Section 10.07(e), (f) or (g)) or 10.10 (with regard to an Event of Default (as
defined in the Guaranty) under Section 10(f) or 10(g) of the Guaranty) hereof
shall occur,
(a) all of the Commitments and the credits hereby established shall
automatically and forthwith terminate, if not theretofore terminated, and no
Bank thereafter shall be under any obligation to grant any further Loan or Loans
and/or issue further letters of credit hereunder, and
(b) the principal of and interest on all Notes then outstanding, and
all of Borrower's Debt to the Banks shall thereupon become and thereafter be
immediately due and payable in full (if it be not already due and payable), all
without any presentment, demand or notice of any kind, all of which are hereby
waived by the Borrower.
SECTION 11.03. REMEDIES RELATING TO LETTERS OF CREDIT. In the event the
Commitments are terminated and/or the Debt is accelerated pursuant to Sections
11.01 or 11.02 above, the Borrower shall immediately deposit with the Agent an
amount of cash equal to the then aggregate amount of the stated amounts of all
letters of credit outstanding hereunder as security for reimbursement of any
drawings made on any such letters of credit and as collateral for repayment of
the Debt or any part thereof.
SECTION 11.04. OFFSETS. If there shall occur or exist any Possible
Default under Section 10.07 hereof or if the maturity of the Notes is
accelerated pursuant to Sections 11.01 or 11.02 hereof, each Bank shall have the
right at any time to set off against, and to appropriate and apply toward the
payment of, any and all Debt then owing by Borrower to that Bank (including,
without limitation, any participation purchased or to be purchased pursuant to
Section 12.12 hereof), whether or not the same shall then have matured, any and
all deposit balances and all other Indebtedness then held or owing by that Bank
to or for the credit or account of the Borrower, all without notice to or demand
upon the Borrower or any other Person, all such notices and demands being hereby
expressly waived by the Borrower.
SECTION 11.05. APPLICATION OF PAYMENTS. Notwithstanding any other
provision of this Agreement, upon the occurrence and during the continuance of
an Event of Default, the Borrower waives any right it may have to direct the
application of any and all payments received by the Agent or the Banks on
account of the Debt and the Borrower agrees that the Agent and each Bank shall
have the right, in its sole and absolute discretion, to apply and re-apply any
and all such payments in such manner as the Agent or such Bank may deem
advisable, subject to the Pro rata sharing of any such payments among the Banks.
ARTICLE XII
-----------
THE AGENT
---------
SECTION 12.01. APPOINTMENT AND AUTHORIZATION. Each Bank hereby
irrevocably designates and appoints KeyBank National Association as the Agent of
such Bank to act as specified in this Agreement and each such Bank hereby
irrevocably authorizes KeyBank National Association to take such action as the
Agent on its behalf and to exercise such powers and perform such duties
hereunder as are expressly delegated to the Agent by the terms hereof,
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together with such other powers as are reasonably incidental thereto. The Agent
agrees to act as such upon the express conditions contained in this Article XII.
Notwithstanding any provision to the contrary elsewhere in this Agreement, the
Agent shall not have any duties or responsibilities, except those expressly set
forth in this Agreement, or any fiduciary relationship with any Bank, and no
implied covenants, functions, responsibilities, duties, obligations or
liabilities shall be created by or arise under this Agreement or otherwise exist
against the Agent. Subject to the provisions of Sections 12.03 and 12.11, the
Agent shall administer the Loans in the same manner as it administers its own
loans. The provisions of this Article XII are solely for the benefit of the
Agent and the Banks, and neither the Borrower, the Parent nor any of their
respective Subsidiaries shall have any rights as a third party beneficiary of
any of the provisions hereof. In performing its functions and duties under this
Agreement, the Agent shall act solely as agent of the Banks and the Agent does
not assume and shall not be deemed to have assumed any obligation or
relationship of agency or trust with or for the Borrower, the Parent or their
respective Subsidiaries.
SECTION 12.02. DELEGATION OF DUTIES. The Agent may execute any of its
duties under this Agreement, the Notes or any Related Writing by or through
agents or attorneys-in-fact and shall be entitled to advice of counsel
concerning all matters pertaining to such duties. The Agent shall not be
responsible for the negligence or misconduct of any agents or attorneys-in-fact
selected by it with reasonable care except to the extent otherwise required by
Section 12.03.
SECTION 12.03. EXCULPATORY PROVISIONS. Neither the Agent nor any of its
officers, directors, employees, agents, attorneys-in-fact or affiliates shall be
(a) liable for any action lawfully taken or omitted to be taken by such Person
under or in connection with this Agreement, the Notes or the other Related
Writings (except for its or such Person's own gross negligence or willful
misconduct) or (b) responsible in any manner to any of the Banks for any
recitals, statements, representations or warranties made by the Borrower, the
Parent, or any of their respective Subsidiaries or any of their responsible
officers contained in this Agreement or any Related Writing, or for any failure
of the Borrower, the Parent or any of their respective Subsidiaries or any of
their respective officers to perform its obligations hereunder or thereunder.
Each Bank by its signature to this Agreement acknowledges and agrees that the
Agent has made no representation or warranty, express or implied, with respect
to the creditworthiness, financial condition or any other condition of Borrower,
the Parent or any Subsidiary, or with respect to the statements contained in any
information memorandum furnished in connection herewith or in any other oral or
written communication between the Agent and such Bank. Each Bank represents that
it has made and shall continue to make its own independent investigation of the
creditworthiness, financial condition and affairs of Borrower, the Parent and
any Subsidiary in connection with the extension of credit hereunder, and agrees
that the Agent has no duty or responsibility, either initially or on a
continuing basis, to provide any Bank with any credit or other information with
respect thereto (other than such notices as may be expressly required to be
given by Agent to the Banks hereunder), whether coming into its possession
before the granting of the first Loans or at any time or times thereafter.
SECTION 12.04. RELIANCE BY AGENT. The Agent shall be entitled to rely,
and shall be fully protected in relying, upon any note, writing, resolution,
notice, consent, certificate, affidavit, letter, cablegram, facsimile
transmission, telex or teletype message, statement, order or
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other document or conversation reasonably believed by it to be genuine and
correct and to have been signed, sent or made by the proper Person or Persons
and upon advice and statements of legal counsel (including counsel to the
Borrower), independent accountants and other experts selected by the Agent. The
Agent shall be fully justified in failing or refusing to take any action under
this Agreement or the Notes unless it shall first receive such advice or
concurrence of the Required Banks or the Super Majority Banks, as it deems
appropriate, or it shall first be indemnified to its satisfaction by the Banks
against any and all liability and expense which may be incurred by it by reason
of taking or continuing to take any such action. The Agent shall in all cases be
fully protected in acting, or in refraining from acting, under this Agreement,
the Notes or the other Related Writings in accordance with a request of the
Required Banks or the Super Majority Banks, as applicable, and such request and
any action or failure to act pursuant thereto shall be binding upon all the
Banks.
SECTION 12.05. RESIGNATION OR REMOVAL OF THE AGENT; SUCCESSOR AGENT.
The Agent may resign upon twenty (20) days' notice to the Banks or the Agent may
be removed by the vote of the Required Banks (excluding the Agent). Upon the
resignation or removal of the Agent, the Required Banks shall appoint from among
the Banks a successor Agent for the Banks subject to prior approval of the
Borrower so long as no Possible Default or Event of Default then exists (such
approval not to be unreasonably withheld or delayed), whereupon such successor
agent shall succeed to the rights, powers and duties of the Agent, and the term
"Agent" shall include such successor agent effective upon its appointment, and
the resigning or removed Agent's rights, powers and duties as the Agent shall be
terminated, without any other or further act or deed on the part of the former
Agent or any of the parties to this Agreement. After the resignation or removal
of the Agent hereunder, the provisions of this Article XII shall inure to its
benefit as to any actions taken or omitted to be taken by it while it was Agent
under this Agreement. In the event no successor agent has been appointed by the
end of such twenty (20) day period in the case of a resignation or upon the
removal of the Agent by the Required Banks (excluding the Agent), the
resignation or removal of the Agent shall become effective and the Required
Banks shall perform the duties of the Agent until a successor agent is
appointed.
SECTION 12.06. NOTE HOLDERS. The Agent may deem and treat the payee of
any Note as the holder thereof for all purposes unless and until written notice
of the assignment, transfer or endorsement thereof, as the case may be, shall
have been filed with the Agent. Any request, authority or consent of any Person
or entity who, at the time of making such request or giving such authority or
consent, is the holder of any Note shall be conclusive and binding on any
subsequent holder, transferee, assignee or indorsee, as the case may be, of such
Note or of any Note or Notes issued in exchange therefor.
SECTION 12.07. CONSULTATION WITH COUNSEL. (a) The Agent may consult
with legal counsel reasonably selected by it and shall not be liable for any
action taken or suffered in good faith by it in accordance with the opinion of
such counsel.
(b) Should the Agent (i) employ counsel for advice or other
representation (whether or not any suit has been or shall be filed) with respect
to this Agreement, the Notes or any of the Related Writings, or (ii) commence
any proceeding or in any way seek to enforce its rights or remedies under this
Agreement, the Notes or any Related Writing, each Bank, upon demand
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therefor from time to time, shall contribute its share (based on its Pro rata
share) of the reasonable costs and/or expenses of any such advice or other
representation, enforcement or acquisition, including, but not limited to, fees
of receivers, court costs and fees and expenses of attorneys to the extent not
otherwise reimbursed by Borrower; provided, that the Agent shall not be entitled
to reimbursement of its attorneys' fees and expenses incurred in connection with
the resolution of disputes between the Agent and the other Banks unless the
Agent shall be the prevailing party in any such dispute and, provided, further,
that the Agent shall only be entitled to such reimbursement from those Banks
that were involved in the dispute with the Agent. Any loss of principal and
interest resulting from any Event of Default shall be shared by the Banks in
accordance with their respective Pro rata shares.
SECTION 12.08. DOCUMENTS. The Agent shall not be under a duty to
examine into or pass upon the validity, effectiveness, genuineness or value of
this Agreement, the Notes or any other Related Writing furnished pursuant hereto
or in connection herewith or the value of any collateral obtained hereunder, and
the Agent shall be entitled to assume that the same are valid, effective and
genuine and what they purport to be.
SECTION 12.09. AGENT AND AFFILIATES. With respect to the Loans made
hereunder, the Agent shall have the same rights and powers hereunder as any
other Bank and may exercise the same as though it were not the Agent, and the
Agent and its affiliates may accept deposits from, lend money to and generally
engage in any kind of business with the Borrower or any Subsidiary or Affiliate
of the Borrower.
SECTION 12.10. KNOWLEDGE OF DEFAULT. It is expressly understood and
agreed that the Agent shall not be deemed to have knowledge or notice of the
occurrence of any Possible Default or Event of Default hereunder (other than the
failure to make available to the Agent any principal of or interest on the Loans
for the account of the Banks as required under this Agreement and the Notes),
unless the Agent has actually received written notice from a Bank or the
Borrower describing such Possible Default or Event of Default and stating that
such notice is a "notice of default." In the event that the Agent receives such
a notice, the Agent shall give prompt notice thereof to the Banks. The Agent
shall take such action with respect to such Default or Event of Default as shall
be reasonably directed by the Required Banks; provided, that unless and until
the Agent shall have received such directions, the Agent may (but shall not be
obligated to) take such action, or refrain from taking such action, with respect
to such Possible Default or Event of Default as it shall deem advisable in the
best interests of the Banks.
SECTION 12.11. INDEMNIFICATION. The Banks agree to indemnify the Agent
in its capacity as such (to the extent not reimbursed by the Borrower), Pro rata
according to the respective principal amounts of their Commitments, 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 be imposed on, incurred by or asserted against the
Agent in its capacity as agent in any way relating to or arising out of this
Agreement, the Notes or any Related Writing, or the transactions contemplated
hereby or thereby, or any action taken or omitted to be taken by the Agent under
or in connection with the foregoing, provided, that no Bank shall be liable to
the Agent for any portion of such liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements resulting
from the Agent's gross negligence, willful misconduct or from any
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action taken or omitted by the Agent in any capacity other than as agent under
this Agreement. If any indemnity furnished to the Agent for any purpose shall,
in the reasonable opinion of the Agent, be insufficient or become impaired, the
Agent may call for additional indemnity and cease, or not commence, to do the
acts indemnified against until such additional indemnity is furnished. The
agreements in this Section 12.11 shall survive the termination of this
Agreement.
SECTION 12.12. EQUALIZATION PROVISION. Each Bank agrees with the other
Banks that if it at any time shall obtain any Advantage over the other Banks or
any thereof in respect of Borrower's Debt to the Banks including without
limitation in respect of the letters of credit described in Schedule 3.06 hereof
(except under Sections 4.06, 4.07, 4.08, 4.09, 4.10 and/or 4.11, hereof), it
will purchase from the other Banks, for cash and at par, such additional
participation in Borrower's Debt to the Banks as shall be necessary to nullify
the Advantage. If any said Advantage resulting in the purchase of an additional
participation as aforesaid shall be recovered in whole or in part from the Bank
receiving the Advantage each such purchase shall be rescinded, and the purchase
price restored (but without interest unless the Bank receiving the Advantage is
required to pay interest on the Advantage to the Person recovering the Advantage
from such Bank) ratably to the extent of the recovery. Each Bank further agrees
with the other Banks that if it at any time shall receive any payment from or on
behalf of Borrower on any Indebtedness owing by the Borrower to that Bank by
reason of offset of any deposit or other Indebtedness, it will apply such
payment first to any and all Debt owing by Borrower to that Bank pursuant to
this Agreement (including, without limitation, any participation purchased or to
be purchased pursuant to this Section 12.12) until Borrower's Debt has been paid
in full. The Borrower agrees that any Bank so purchasing a participation from
the other Banks pursuant to this Section may exercise all its rights of payment
(including the right of set-off) with respect to such participation as fully as
if such Bank were a direct creditor of the Borrower in the amount of such
participation.
ARTICLE XIII
------------
MISCELLANEOUS
-------------
SECTION 13.01. NO WAIVER; CUMULATIVE REMEDIES. No failure or delay on
the part of the Agent or any Bank in exercising any right, power or privilege
hereunder and no omission or course of dealing on the part of Agent, any Bank or
the holder of any Note in exercising any right, power or remedy hereunder shall
operate as a waiver thereof; nor shall any single or partial exercise of any
such right, power or remedy preclude any other or further exercise thereof or
the exercise of any other right, power or remedy hereunder. The remedies herein
provided are cumulative and in addition to any other rights, powers or
privileges that the Agent or any Bank would otherwise have. No notice to or
demand on the Borrower in any case shall entitle the Borrower to any other or
further notice or demand in similar or other circumstances or constitute a
waiver of the rights of the Agent or the Banks to any other or further action in
any circumstances without notice or demand.
SECTION 13.02. AMENDMENTS, CONSENTS. No amendment, modification,
termination, or waiver of any provision of this Agreement or of the Notes or of
the Guaranty, nor consent to any variance therefrom, shall be effective unless
the same shall be in writing and signed by the Required Banks, the Super
Majority Banks or all of the Banks as appropriate under this Section 13.02, and
any such waiver or consent shall be effective only in the specific instance
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and for the specific purpose for which given. Unanimous consent of the Banks,
or, if there is any borrowing hereunder, the holders of one hundred percent
(100%) (by outstanding principal amount) of the Notes, shall be required with
respect to (i) any increase in any Commitment, the extension of maturity of the
Notes or the payment date of interest thereunder, (ii) any reduction in the rate
of interest on the Notes, or in any amount of principal or interest due on any
Note or any change in the manner of Pro rata application of any payments made by
the Borrower to the Banks hereunder, or any change in amortization schedules, or
in the manner of calculating fees or prepayment penalties, (iii) any change in
any percentage voting requirements in this Agreement, or (iv) the release of the
Guaranty, or any material amendment or modification thereto, or any other
guarantee in favor of the Banks, or (v) any amendment to the definitions of
Required Banks, Super Majority Banks or Reference Banks set forth herein or to
this Section 13.02, or (vi) any material amendment to any representation,
warranty, covenant, Possible Default, Event of Default or remedy provided for
hereunder. The consent of the holders of eighty percent (80%)(by outstanding
principal amount) of the Notes (the "Super Majority Banks") shall be required
for any amendments, modifications or other changes to Section 8.13. Notice of
amendments or consents ratified by the Banks hereunder shall immediately be
forwarded by the Borrower to all Banks. Each Bank or other holder of a Note
shall be bound by any amendment, waiver or consent obtained as authorized by
this Section 13.02, regardless of its failure to agree thereto.
SECTION 13.03. NOTICES. Except as otherwise expressly provided herein,
all notices, requests, demands and other communications provided for hereunder
shall be in writing (including telegraphic, telex, facsimile, transmission or
cable communication) and mailed, telexed, telegraphed, facsimile transmitted,
cabled or delivered, if to the Borrower, addressed to it at the address
specified on the signature pages of this Agreement, if to a Bank, addressed to
the address of such Bank specified on the signature pages of this Agreement and
if to the Agents, addressed to them at the address of the Agent or the
Syndication Agent, as applicable, specified on the signature pages of this
Agreement. All notices, statements, requests, demands and other communications
provided for hereunder shall be deemed to be given or made when delivered or
forty-eight (48) hours after being deposited in the mails with postage prepaid
by registered or certified mail or delivered to a telegraph company, addressed
as aforesaid, except that notices from the Borrower to the Agent or the Banks
pursuant to any of the provisions hereof shall not be effective until received
by the Agent or the Banks.
SECTION 13.04. COSTS, EXPENSES AND TAXES. The Borrower agrees to pay on
demand all costs and expenses of the Banks and the Agents, and any expenses
incurred in connection with the preparation of this Agreement, the Notes and any
Related Writings, including, without limitation (i) administration and
out-of-pocket expenses of the Agent in connection with the administration of
this Agreement, the Notes, the collection and disbursement of all funds
hereunder and the other instruments and documents to be delivered hereunder,
(ii) extraordinary expenses of the Agents or the Banks in connection with the
administration of this Agreement, the Notes and the other instruments and
documents to be delivered hereunder, (iii) the reasonable fees and out-of-pocket
expenses of Xxxxxxxx Xxxx LLP, counsel to the Agent, in connection with the
negotiation, preparation, execution and delivery of this Agreement and related
matters, and (iv) all costs and expenses, including reasonable attorneys' fees
and out-of-pocket expenses, in connection with the restructuring or enforcement
of this Agreement, the Notes or any Related Writing. In addition, the Borrower
shall pay any and all stamp and
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other taxes and fees payable or determined to be payable in connection with the
execution and delivery of this Agreement or the Notes, and the other instruments
and documents to be delivered hereunder, and agrees to save the Agents and each
Bank harmless from and against any and all liabilities with respect to or
resulting from any delay in paying or omission to pay such taxes or fees.
SECTION 13.05. SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All
representations and warranties of the Borrower made in or pursuant to this
Agreement or in any certificate or other Related Writing in connection herewith
shall survive the closing hereof or the making of the Loans or other
transactions in connection with which given.
SECTION 13.06. OBLIGATIONS SEVERAL; NO FIDUCIARY OBLIGATIONS. The
obligations of the Banks hereunder are several and not joint. Nothing contained
in this Agreement and no action taken by the Agents or the Banks pursuant hereto
shall be deemed to constitute the Banks a partnership, association, joint
venture or other entity. No default by any Bank hereunder shall excuse the other
Banks from any obligation under this Agreement; but no Bank shall have or
acquire any additional obligation of any kind by reason of such default. The
relationship among the Borrower and the Banks with respect to this Agreement,
any Note and any Related Writing is and shall be solely that of debtor and
creditor, respectively, and no Bank has any fiduciary obligation toward the
Borrower with respect to any such documents or the transactions contemplated
thereby.
SECTION 13.07. EXECUTION IN COUNTERPARTS. This Agreement may be
executed in any number of counterparts and by different parties hereto in
separate counterparts, each of which when so executed and delivered shall be
deemed to be an original and all of which taken together shall constitute but
one and the same agreement.
SECTION 13.08. BINDING EFFECT; ASSIGNMENT. (a) This Agreement shall
become effective on the date (the "Closing Date") (i) when it shall have been
executed by the Borrower, the Agents and by each Bank and shall have been
delivered to the Agent and (ii) when the conditions set forth in Article VI are
met to the satisfaction of, or waived in writing by, the Agent and the Required
Lenders, and thereafter shall be binding upon and inure to the benefit of the
Borrower and each of the Banks and their respective successors and assigns,
except that the Borrower shall not have the right to assign its rights hereunder
or any interest herein without the prior written consent of all of the Banks,
which consent may be withheld in their sole discretion. Each Bank may at any
time grant participations in any of its rights hereunder or under its Note or
Notes to another commercial bank, financial institution, mutual fund or any
institutional "accredited investor" (as defined in Regulation D of the
Securities Act of 1933, as amended), PROVIDED, that in the case of any such
participation, the participant shall not have any rights under this Agreement,
the Notes or any Related Writing (the participant's rights against such Bank in
respect of any such participation to be those set forth in the agreement
executed by such Bank in favor of the participant relating thereto) and all
amounts payable by such Bank hereunder shall be determined as if such Bank had
not sold such participation; and provided further, that no Bank shall transfer,
assign or grant any participation under this Agreement under which the
participant shall have rights to approve any amendment to or waiver of this
Agreement or any Related Writing.
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(b) Notwithstanding the foregoing, (i) any Bank may assign all or a
portion of its Loans and/or Commitments and its rights and obligations hereunder
to an affiliate of such Bank and (ii) with the consent of the Agent and the
Borrower so long as no Possible Default or Event of Default then exists (which
consents shall not be unreasonably withheld or delayed), any Bank may assign all
or a portion of its Loans and/or Commitments and its rights and obligations
hereunder to one or more commercial banks, financial institutions (including one
or more Banks), mutual funds or institutional "accredited investors" (as defined
in Regulation D of the Securities Act of 1933, as amended), provided, that (A)
any assignment of a Bank's Revolving Loans shall include a ratable part of such
Bank's Revolving Loan Commitment, and (B) the consent of the Agent (which
consent shall not be unreasonably withheld or delayed) shall be required for any
assignment of a Revolving Loan Commitment to the extent any letters of credit
are outstanding. No assignment pursuant to subsection (ii) of the immediately
preceding sentence shall be in an aggregate amount less than Ten Million Dollars
($10,000,000). If any Bank so sells all or a part of its rights hereunder or
under any Note, any reference in this Agreement or such Note to such assigning
Bank shall thereafter refer to such Bank and to the respective assignee to the
extent of their respective interests and the respective assignee shall have, to
the extent of such assignment (unless otherwise provided therein), the same
rights and benefits as it would if it were such assigning Bank. Each assignment
pursuant to Section 13.08(b)(ii) shall be effected by the assigning Bank and the
assignee Bank executing a Bank Assignment and Assumption Agreement substantially
in the form of Exhibit E (appropriately completed). At the time of any such
assignment pursuant to Section 13.08(b)(ii), (X) Exhibit A shall be deemed to be
amended to reflect the Commitments of the respective assignee (which shall
result in a corresponding reduction of the Commitment of the assigning Bank) and
of the other Banks (Y) if any such assignment occurs after the Closing Date, the
Borrower will issue new Notes to the respective assignee and to the assigning
Bank (upon delivery of the existing Note or Notes of such assigning Bank) in
conformity with the requirements of this Agreement and (Z) the Agent shall
receive at the time of each such assignment, from the assigning or assignee
Bank, the payment of a nonrefundable assignment fee of $3,000.
(c) Notwithstanding any other provisions of this Section 13.08, no
transfer or assignment of the interests or obligations of any Bank hereunder or
any grant of participations therein shall be permitted if such transfer,
assignment or grant would require the Borrower to file a registration Statement
with the Securities and Exchange Commission or to qualify the loans under the
"Blue Sky" laws of any State.
(d) Notwithstanding any other provisions of this Section 13.08, so long
as no Event of Default has occurred and is continuing and the Administrative
Agent or the Syndication Agent, as applicable, has not resigned or been removed
pursuant to the provisions of this Agreement, each Agent agrees that it will not
assign or transfer any of its Loans and/or Commitments to the extent that the
amount of the Loans and/or Commitments that such Agent would continue to hold
following such assignment or transfer would be less than ten percent (10%) of
the aggregate Loans and/or Commitments of all of the Banks.
(e) Notwithstanding any other provision set forth in this Agreement,
any Bank may at any time pledge or assign all or any portion of its rights under
this Agreement, the Guaranty and the other documents executed and delivered in
connection therewith (including, without
-52-
limitation, the Notes held by it) to any Federal Reserve Bank in accordance with
Regulation A of the Federal Reserve Board without notice to, or the consent of,
the Agents, the Borrower or the Parent, PROVIDED, that no such pledge or
assignment or enforcement thereof shall release a Bank from any of its
obligations hereunder or substitute any such pledgee or assignee for such Bank
as a party hereto.
SECTION 13.09. GOVERNING LAW. This Agreement, each of the Notes and any
Related Writing shall be governed by and construed in accordance with the laws
of the State of Ohio, without regard to the principles of conflict of laws and
the respective rights and obligations of the Borrower and the Banks shall be
governed by Ohio law.
SECTION 13.10. SEVERABILITY OF PROVISIONS; CAPTIONS. Any provision of
this Agreement which is prohibited or unenforceable in any jurisdiction shall,
as to such jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof or
affecting the validity or enforceability of such provision in any other
jurisdiction. The several headings to Sections and subsections herein are
inserted for convenience only and shall be ignored in interpreting the
provisions of this Agreement.
SECTION 13.11. PURPOSE. Each of the Banks represents and warrants to
the Borrower that it is entering into this Agreement with the present intention
of acquiring any Note issued pursuant hereto solely in connection with such
Bank's commercial lending activities and not for the purpose of distribution or
resale, it being understood, however, that each Bank shall at all times retain
full control over the disposition of its assets.
SECTION 13.12. CONSENT TO JURISDICTION. The Borrower agrees that any
action or proceeding to enforce or arising out of this Agreement may be
commenced in the Court of Common Pleas for Cuyahoga County, Ohio or in the
District Court of the United States for the Northern District of Ohio, and the
Borrower waives personal service of process and agrees that a summons and
complaint commencing an action or proceeding in any such court shall be properly
served and shall confer personal jurisdiction over the Borrower if served to the
Borrower at the address listed opposite the signature of the Borrower at the end
of this Agreement or as otherwise provided by the laws of the State of Ohio or
the United States.
SECTION 13.13. ENTIRE AGREEMENT. This Agreement, the Notes, the Related
Writings and any other agreement, document or instrument attached hereto or
referred to herein or executed on or as of the date hereof integrate all the
terms and conditions mentioned herein or incidental hereto and supersede all
oral representations and negotiations and prior writings with respect to the
subject matter hereof.
SECTION 13.14. JURY TRIAL WAIVER. THE BORROWER AND EACH OF THE BANKS
WAIVE ANY RIGHT TO HAVE A JURY PARTICIPATE IN RESOLVING ANY DISPUTE, WHETHER
SOUNDING IN CONTRACT, TORT OR OTHERWISE, AMONG BORROWER AND THE BANKS, OR ANY
THEREOF, ARISING OUT OF, IN CONNECTION WITH, RELATED TO, OR INCIDENTAL TO THE
RELATIONSHIP ESTABLISHED AMONG THEM IN CONNECTION WITH THIS AGREEMENT OR ANY
NOTE OR OTHER INSTRUMENT, DOCUMENT OR AGREEMENT EXECUTED OR
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DELIVERED IN CONNECTION HEREWITH OR THE TRANSACTIONS RELATED THERETO. THIS
WAIVER SHALL NOT IN ANY WAY AFFECT, WAIVE, LIMIT, AMEND OR MODIFY ANY BANK'S
ABILITY TO PURSUE REMEDIES PURSUANT TO ANY CONFESSION OF JUDGMENT OR COGNOVIT
PROVISION CONTAINED IN ANY NOTE OR OTHER INSTRUMENT, DOCUMENT OR AGREEMENT AMONG
THE BORROWER AND THE BANKS, OR ANY THEREOF.
SECTION 13.15. SURVIVAL. All indemnities set forth herein shall survive
the execution and delivery of this Agreement and the making and repayment of the
Loans and the satisfaction of all other obligations under this Agreement.
SECTION 13.16. INDEPENDENCE OF COVENANTS. All covenants hereunder shall
be given independent effect so that if a particular action or condition is not
permitted by any of such covenants, the fact that it would be permitted by an
exception to, or be otherwise within the limitations of, another covenant shall
not avoid the occurrence of a Possible Default or an Event of Default if such
action is taken or condition exists, and if a particular action or condition is
expressly permitted under any covenant, unless expressly limited to such
covenant, the fact that it would not be permitted under the general provisions
of another covenant shall not constitute a Possible Default or an Event of
Default if such action is taken or condition exists.
SECTION 13.17. INTERPRETATION. The Borrower, each Agent and each Bank
acknowledges that such party, either directly or through such party's
representatives, has participated in the drafting of this Agreement, and any
applicable rule of construction that ambiguities are to be resolved against the
drafting party shall not be applied in connection with the construction or
interpretation of this Agreement.
[The remainder of this page intentionally left blank.]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed and delivered as of the date set forth above, each by an officer
thereunto duly authorized.
Address: FOREST CITY RENTAL PROPERTIES CORPORATION
0000 Xxxxxxxx Xxxxx
Xxxxxxxxx, Xxxx 00000
By: /s/ Xxxxxx X. Xxxxx
---------------------------------------
Xxxxxx X. Xxxxx
Vice President and Assistant Secretary
Address: KEYBANK NATIONAL ASSOCIATION
000 Xxxxxx Xxxxxx individually and as Agent
Xxxxxxxxx, Xxxx 00000
By: /s/ Xxxxxx Xxxxx
---------------------------------------
Title:
-------------------------------
Address: NATIONAL CITY BANK individually and
0000 Xxxx Xxxxx Xxxxxx as Syndication Agent
Xxxxxxxxx, Xxxx 00000
By: /s/ Xxxxxxx X. XxXxxx
---------------------------------------
Title:
-------------------------------
Address: THE HUNTINGTON NATIONAL BANK
Commercial Real Estate Division
000 Xxxxxx Xxxxxx
Xxxxxxxxx, Xxxx 00000
By: /s/ Xxxx Xxxxxxx
---------------------------------------
Title:
-------------------------------
Address: U.S. BANK NATIONAL ASSOCIATION
Wrigley Building
000 Xxxxx Xxxxxxxx, 0xx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
By: /s/ Xxxx Xxxxxx
---------------------------------------
Title:
-------------------------------
[Signature page to Credit Agreement]
Address: COMERICA BANK
000 Xxxxxxxx Xxx., 0xx Xxxxx
XX 0000
Xxxxxxx, Xxxxxxxx 00000
By: /s/ Xxxxxxx Xxxxxxx
-----------------------------------
Title:
---------------------------
Address: FIRST MERIT BANK
000 Xxxx Xxxxxxxx Xxxxxx
Xxxxx 000
Xxxxxxxxx, Xxxx 00000
By: /s/ Xxxx X. Xxxxxxx
-----------------------------------
Title:
---------------------------
Address: LASALLE BANK NATIONAL ASSOCIATION
000 Xxxxx XxXxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
By: /s/ Xxxxxxx Xxxxxxx
-----------------------------------
Title:
---------------------------
Address: MANUFACTURERS AND TRADERS TRUST COMPANY
Xxx Xxxxxxxx Xxxxx
Xxxxxxx, Xxx Xxxx 00000-0000
By: /s/ Xxxxx X. Xxxxx
-----------------------------------
Title:
---------------------------
Address: FIFTH THIRD BANK
0000 Xxxx Xxxxx Xxxxxx
Xxxxxxxxx, Xxxx 00000
By: /s/ Xxxxx Xxxxxx
-----------------------------------
Title:
---------------------------
Address: FLEET NATIONAL BANK
One Federal Street
Mail Code: MADE 10304X
Xxxxxx, Xxxxxxxxxxxxx 00000
By: /s/ Xxxxxx Xxxxx
-----------------------------------
Title:
---------------------------
[Signature page to Credit Agreement]
Address: CREDIT LYONNAIS
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
By: /s/ Xxxx Xxxxx
-----------------------------------
Title:
---------------------------
Address: THE PROVIDENT BANK
Attn: Xxxxxx X. Xxxxxxx, V.P.
0000 Xxxxxxxx Xxxxxx
Xxxxxxxxx, Xxxx 00000
By: /s/ Xxxxxx X. Xxxxxxx
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Title:
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[Signature page to Credit Agreement]
EXHIBIT A
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Bank Maximum Amount
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KeyBank National Association $32,142,857.14
National City Bank $32,142,857.14
The Huntington National Bank $28,571,428.57
U.S. Bank National Association $25,000,000.00
Comerica Bank $17,857,142.86
First Merit Bank $17,857,142.86
LaSalle Bank National Association $17,857,142.86
Manufacturers and Traders Trust
Company $17,857,142.86
Fifth Third Bank $16,071,428.57
Fleet National Bank $16,071,428.57
Credit Lyonnais $14,285,714.29
The Provident Bank $14,285,714.29
TOTAL $250,000,000.00
Term Loan Commitment
Bank Term Loan
---- ---------
KeyBank National Association $12,857,142.86
National City Bank $12,857,142.86
The Huntington National Bank $11,428,571.43
U.S. Bank National Association $10,000,000.00
Comerica Bank $7,142,857.14
First Merit Bank $7,142,857.14
LaSalle Bank National Association $7,142,857.14
Manufacturers and Traders Trust
Company $7,142,857.14
Fifth Third Bank $6,428,571.43
Fleet National Bank $6,428,571.43
Credit Lyonnais $5,714,285.71
The Provident Bank $5,714,285.71
TOTAL $100,000,000.00
