REVOLVING CREDIT AGREEMENT
dated effective as of September 4, 2003
by and between
AmREIT
as Borrower
and
XXXXX FARGO BANK, NATIONAL ASSOCIATION
as Lender
TABLE OF CONTENTS
ARTICLE 1. DEFINITIONS................................................................................ 1
Section 1.1 Definitions................................................................................ 1
Section 1.2 Accounting Terms and Determinations; Covenant Calculations................................. 18
Section 1.3 Subsidiaries............................................................................... 18
Section 1.4 Interpretation Generally; Times............................................................ 18
ARTICLE 2. CREDIT FACILITY............................................................................ 19
Section 2.1 Making of Revolving Loan................................................................... 19
Section 2.2 Requests for Borrowings.................................................................... 19
Section 2.3 Funding.................................................................................... 20
Section 2.4 Continuation............................................................................... 20
Section 2.5 Conversion................................................................................. 20
Section 2.6 Interest Rate.............................................................................. 20
Section 2.7 Special Provisions for LIBOR Loans......................................................... 21
Section 2.8 Capital Adequacy........................................................................... 23
Section 2.9 Repayment of Loans......................................................................... 23
Section 2.10 Voluntary Reductions of the Commitment..................................................... 24
Section 2.11 Credit Sweep Account....................................................................... 25
Section 2.12 Revolving Note............................................................................. 25
Section 2.13 Letters of Credit.......................................................................... 25
ARTICLE 3. GENERAL LOAN PROVISIONS.................................................................... 29
Section 3.1 Fees....................................................................................... 29
Section 3.2 Computation of Interest and Fees........................................................... 29
Section 3.3 Limitation of Interest..................................................................... 29
Section 3.4 Statements of Account...................................................................... 31
Section 3.5 Lender's Reliance.......................................................................... 31
ARTICLE 4. UNENCUMBERED POOL PROPERTIES............................................................... 31
Section 4.1 Acceptance of Unencumbered Pool Properties................................................. 31
Section 4.2 Termination of Designation as Unencumbered Pool Property................................... 32
Section 4.3 Additional Requirements of Unencumbered Pool Properties.................................... 33
ARTICLE 5. CONDITIONS................................................................................. 33
Section 5.1 Conditions Precedent to Effectiveness...................................................... 33
Section 5.2 Conditions Precedent to Loans and Issuance of Letters of Credit............................ 35
ARTICLE 6. REPRESENTATIONS AND WARRANTIES............................................................. 35
Section 6.1 Existence and Power........................................................................ 35
Section 6.2 Ownership Structure........................................................................ 36
Section 6.3 Authorization of Agreement, Revolving Notes, Loan Documents and
Borrowings................................................................................. 36
Section 6.4 Compliance of Agreement, Revolving Notes, Loan Documents and Borrowing with Laws, etc...... 36
Section 6.5 Compliance with Law; Governmental Approvals................................................ 37
Section 6.6 Indebtedness and Guarantees................................................................ 37
Section 6.7 Property Management Agreements and Other Major Agreements.................................. 37
Section 6.8 Absence of Defaults........................................................................ 37
Section 6.9 Financial Information...................................................................... 37
Section 6.10 Litigation................................................................................. 38
Section 6.11 ERISA...................................................................................... 38
Section 6.12 Taxes...................................................................................... 38
Section 6.13 Investment Company Act; Public Utility Holding Company Act................................. 38
Section 6.14 Full Disclosure............................................................................ 38
Section 6.15 Insurance.................................................................................. 39
Section 6.16 Not Plan Assets............................................................................ 39
Section 6.17 Title and Liens............................................................................ 39
Section 6.18 Unencumbered Pool Properties............................................................... 39
Section 6.19 Margin Stock............................................................................... 39
Section 6.20 Solvency................................................................................... 39
Section 6.21 Tax Shelter Regulations.................................................................... 39
ARTICLE 7. COVENANTS.................................................................................. 40
Section 7.1 Information................................................................................ 40
Section 7.2 Payment of Obligations..................................................................... 42
Section 7.3 Maintenance of Property; Insurance......................................................... 42
Section 7.4 Conduct of Business; Maintenance of Existence; Qualification;
Amendment of Declaration of Trust.......................................................... 43
Section 7.5 Compliance with Laws....................................................................... 43
Section 7.6 Inspection of Property, Books and Records.................................................. 43
Section 7.7 Consolidations, Mergers, Acquisitions and Sales of Assets.................................. 44
Section 7.8 Use of Proceeds and Letters of Credit...................................................... 44
Section 7.9 Major Agreements........................................................................... 44
Section 7.10 Major Construction......................................................................... 45
Section 7.11 Material Events............................................................................ 45
Section 7.12 ERISA...................................................................................... 45
Section 7.13 ERISA Exemptions........................................................................... 45
Section 7.14 Negative Pledge............................................................................ 45
Section 7.15 Listing Status and REIT Status............................................................. 46
Section 7.16 Agreements with Affiliates................................................................. 46
Section 7.17 New Subsidiaries........................................................................... 46
Section 7.18 Management................................................................................. 47
Section 7.19 Concentrations............................................................................. 47
ARTICLE 8. FINANCIAL COVENANTS........................................................................ 47
Section 8.1 Minimum Tangible Net Worth................................................................. 47
Section 8.2 Ratio of Total Liabilities to Gross Asset Value............................................ 47
Section 8.3 Distributions.............................................................................. 48
Section 8.4 Ratio of EBITDA to Interest Expense........................................................ 48
Section 8.5 Ratio of EBITDA to Fixed Charges........................................................... 48
Section 8.6 Permitted Investments...................................................................... 48
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Section 8.7 Ratio of Unencumbered Net Operating Income to
Unsecured Interest Expense................................................................. 49
Section 8.8 Ratio of Secured Indebtedness to Gross Asset Value......................................... 49
Section 8.9 Maximum Loan Availability.................................................................. 49
ARTICLE 9. DEFAULTS.............................................................................................. 49
Section 9.1 Events of Default.......................................................................... 49
Section 9.2 Remedies Upon an Event of Default.......................................................... 51
Section 9.3 Additional Remedies Upon Certain Default................................................... 51
Section 9.4 Collateral Account......................................................................... 51
ARTICLE 10. MISCELLANEOUS........................................................................................ 52
Section 10.1 Notices.................................................................................... 52
Section 10.2 No Waivers................................................................................. 53
Section 10.3 Expenses................................................................................... 53
Section 10.4 Stamp, Intangible and Recording Taxes...................................................... 54
Section 10.5 Loan Sales and Participations; Disclosure of Information................................... 55
Section 10.6 Indemnification............................................................................ 55
Section 10.7 Successors and Assigns..................................................................... 56
Section 10.8 Governing Law.............................................................................. 56
Section 10.9 Litigation................................................................................. 56
Section 10.10 Counterparts; Integration.................................................................. 57
Section 10.11 Invalid Provisions......................................................................... 57
Section 10.12 Mandatory Disclosures...................................................................... 57
Section 10.13 Limitation of Liability of Trustees, Etc................................................... 58
Section 10.14 ENTIRE AGREEMENT........................................................................... 58
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REVOLVING CREDIT AGREEMENT
THIS REVOLVING CREDIT AGREEMENT (this "Agreement") is entered into
effective as of September 4, 2003, by and between AmREIT, a Texas Real Estate
Investment Trust ("Borrower") and XXXXX FARGO BANK, NATIONAL ASSOCIATION
("Lender").
WHEREAS, in order to finance pre-development costs, development costs,
construction related costs, tenant improvement costs, working capital, equity
investments, repayment of indebtedness and scheduled amortization payments on
debt or real estate equity investments in various forms of ownership permitted
hereunder and for other purposes permitted by this Agreement, Borrower desires
to borrow from Lender, on an unsecured revolving credit basis, loans in an
aggregate principal sum outstanding from time to time not exceeding Twenty
Million Dollars ($20,000,000.00); and
WHEREAS, Lender is willing to make loans to Borrower on such basis for
such purposes, subject to the terms and conditions hereof.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
ARTICLE 1.
DEFINITIONS
Section 1.1 Definitions.
The following terms, as used herein, have the following meanings:
"Adjusted LIBO Rate" means, with respect to any Interest Period, an
interest rate per annum equal to the lesser of (a) the sum of (1) the LIBO Rate
with respect to such Interest Period plus (2) the Applicable Margin or (b) the
Maximum Lawful Rate.
"Affiliate" means any Person (other than Lender): (a) directly or
indirectly controlling, controlled by, or under common control with, the
Borrower; (b) directly or indirectly owning or holding ten percent (10.0%) or
more of any equity interest in the Borrower; or (c) ten percent (10.0%) or more
of whose voting stock or other equity interest is directly or indirectly owned
or held by the Borrower. For purposes of this definition, "control" (including
with correlative meanings, the terms "controlling", "controlled by" and "under
common control with") means the possession directly or indirectly of the power
to direct or cause the direction of the management and policies of a Person,
whether through the ownership of voting securities or by contract or otherwise.
In no event shall Lender be deemed to be an Affiliate of the Borrower.
"Applicable Law" means all applicable provisions of local, state,
federal and foreign constitutions, statutes, rules, regulations, ordinances,
decrees, permits, concessions and orders of all governmental bodies and all
orders and decrees of all courts, tribunals and arbitrators.
"Applicable Margin" means the percentage rate set forth below
corresponding to the ratio of Total Liabilities to Gross Asset Value as
determined in accordance with Section 7.1(c) in effect at such time:
RATIO OF TOTAL LIABILITIES TO GROSS ASSET APPLICABLE MARGIN FOR APPLICABLE MARGIN FOR
LEVEL VALUE LIBOR LOANS BASE RATE LOANS
1 Less than or equal to 0.40 to 1.00 1.40% 0%
2 Greater than 0.40 to 1.00 but less than 1.60% 0%
or equal to 0.45 to 1.00
3 Greater than 0.45 to 1.00 but less than 1.75% 0%
or equal to 0.50 to 1.00
4 Greater than 0.50 to 1.00 but less than 2.00% 0%
or equal to 0.55 to 1.00
5 Greater than 0.55 to 1.00 2.35% .25%
The Applicable Margin for Loans shall be determined by Lender based on the ratio
of Total Liabilities to Gross Asset Value as set forth in the Compliance
Certificate most recently delivered by the Borrower pursuant to Section 7.1(c)
Any such adjustment to such Applicable Margin shall be effective as of the first
day of the calendar quarter immediately following the end of the calendar
quarter for which Borrower delivers to Lender the applicable Compliance
Certificate pursuant to Section 7.1(c). If the Borrower fails to deliver a
Compliance Certificate pursuant to Section 7.1(c) the Applicable Margin shall
equal the percentages corresponding to Level 5 from the date the required
Compliance Certificate was due until the date of receipt by Lender of the
required Compliance Certificate; however the application of such Xxxxx 0
Xxxxxxxxxx Xxxxxx under such circumstances shall not impair Lender's ability to
declare such failure to deliver the required Compliance Certificate an Event of
Default.
"Base Rate" means a rate of interest equal to the lesser of (a) the
greater of (1) the rate of interest per annum established from time to time by
Lender at its principal office in San Francisco, California and designated as
its prime rate (which rate of interest may not be the lowest rate charged by
Lender on similar loans) plus the Applicable Margin and (2) the Federal Funds
Rate plus one-half of one percent (0.5%) plus the Applicable Margin or (b) the
Maximum Lawful Rate. Each change in the Base Rate shall become effective without
prior notice to Borrower automatically as of the opening of business on the date
of such change in the Base Rate.
"Base Rate Loan" means any portion of the Revolving Loan with respect
to which the interest rate is calculated by reference to the Base Rate.
"Business Day" means (a) any day except a Saturday, Sunday or other day
on which commercial banks in San Francisco, California are authorized or
required to close and (b) with reference to LIBOR Loans, any day (except a
Saturday, Sunday or other day on which commercial banks in San Francisco,
California are authorized or required to close) on which dealings in Dollar
deposits are carried out in the London interbank market.
"Capital Expenditures Reserve" means, for any period and with respect
to any Property, an amount equal to the greater of (a) the aggregate square
footage of all completed space of such Property times $.25, times a fraction,
the numerator of which is the number of days of such period, and the denominator
of which is 365 and (b) the amount of capital expenditures actually made in
respect of such Property, excluding non-recurring capital expenditures for such
period.
2
"Capitalized Lease Obligation" means Indebtedness represented by
obligations under a lease that is required to be capitalized for financial
reporting purposes in accordance with GAAP, and the amount of such Indebtedness
shall be the capitalized amount of such obligations determined in accordance
with GAAP.
"Collateral Account" means Account Number 4945073278 established by
Borrower with Lender as a special, interest-bearing, deposit account under
Lender's sole dominion and control.
"Commitment" means Twenty Million and No/100 Dollars ($20,000,000.00).
"Compliance Certificate" means the certificate described in Section
7.1(c).
"Consequential Loss" means with respect to (a) Borrower's payment of
all or any portion of the then-outstanding principal amount of a LIBOR Loan on a
day other than the last day of the Interest Period related thereto or (b) any of
the circumstances specified in Section 2.7(d) upon which a Consequential Loss
may be incurred, any loss (excluding loss of anticipated profits), cost or
expense incurred by Lender as a result of the timing of such payment or LIBOR
Loan or in the redepositing, redeploying or reinvesting the principal amount so
paid or affected by the timing of such LIBOR Loan or the circumstances described
in such Section 2.7(d), including without limitation, the sum of (i) the
interest which, but for the payment or timing of the LIBOR Loan, Lender would
have earned in respect of such principal amount, reduced, if Lender is able to
redeposit, redeploy, or reinvest such principal amount by the interest earned by
Lender as a result of so redepositing, redeploying or reinvesting such principal
amount and (ii) any expense or penalty incurred by Lender on redepositing,
redeploying or reinvesting such principal amount. All determinations of
Consequential Loss shall be made by Lender exercising its reasonable judgment.
"Contingent Obligation" means, for any Person, any commitment,
undertaking, Guarantee or other obligation constituting a contingent liability
that must be accrued under GAAP.
"Continue," "Continuation" and "Continued" each refers to the
continuation of a LIBOR Loan from one Interest Period to the next Interest
Period pursuant to Section 2.4.
"Convert," "Conversion" and "Converted" each refers to the conversion
of a Base Rate Loan to a LIBOR Loan or a LIBOR Loan to a Base Rate Loan.
"Default" means any condition or event which constitutes an Event of
Default or which with the giving of notice or lapse of time or both would,
unless cured or waived, become an Event of Default.
"Derivatives Contract" means any and all rate swap transactions, basis
swaps, credit derivative transactions, forward rate transactions, commodity
swaps, commodity options, forward commodity contracts, equity or equity index
swaps or options, bond or bond price or bond index swaps or options or forward
bond or forward bond price or forward bond index transactions, interest rate
options, forward foreign exchange transactions, cap transactions, floor
transactions, collar transactions, currency swap transactions, cross-currency
rate swap transactions, currency options, spot contracts, or any other similar
transactions or any
3
combination of any of the foregoing (including any options to enter into any of
the foregoing), whether or not any such transaction is governed by or subject to
any master agreement. Not in limitation of the foregoing, the term "Derivatives
Contract" includes any and all transactions of any kind, and the related
confirmations, which are subject to the terms and conditions of, or governed by,
any form of master agreement published by the International Swaps and
Derivatives Association, Inc., any International Foreign Exchange Master
Agreement, or any other master agreement, including any such obligations or
liabilities under any such master agreement.
"Derivatives Termination Value" means, in respect of any one or more
Derivatives Contracts, after taking into account the effect of any legally
enforceable netting agreement relating to such Derivatives Contracts, (a) for
any date on or after the date such Derivatives Contracts have been closed out
and termination value(s) determined in accordance therewith, such termination
value(s), and (b) for any date prior to the date referenced in clause (a) the
amount(s) determined as the xxxx-to-market value(s) for such Derivatives
Contracts, as determined based upon one or more mid-market or other readily
available quotations provided by any recognized dealer in such Derivatives
Contracts (which may include Lender).
"Development Property" means real estate which is then undergoing
development or redevelopment; however, such real property shall cease to be
"Development Property" on the earlier of (i) twelve (12) full months of
operations following completion or (ii) achievement of an Occupancy Rate of 80%.
The term "Development Property" shall include real property of the type
described in the immediately preceding sentence to be (but not yet) acquired by
the Borrower, any Subsidiary or any Unconsolidated Affiliate upon completion of
construction pursuant to a contract in which the seller of such real property is
required to develop or renovate prior to, and as a condition precedent to, such
acquisition.
"Dollars" or "$" means the lawful currency of the United States of
America.
"EBITDA" means, with respect to any Person and for any period and
without duplication, the sum of (a) net earnings (loss) of such Person for such
period (excluding equity in net earnings or net loss of Unconsolidated
Affiliates) plus (b) depreciation and amortization expense and other non-cash
charges of such Person for such period (but only to the extent deducted in
determining net income (loss) for such period) plus (c) the amortized cash
portion of direct financing leases (as defined by GAAP) but only to the extent
deducted in determining net income (loss) for such period (d) plus interest
expense of such Person for such period (but only to the extent deducted in
determining net income (loss) for such period) plus (e) income and franchise tax
expense of such Person in respect of such period (but only to the extent
deducted in determining net income (loss) for such period) minus (with respect
to gains) or plus (with respect to losses) (f) extraordinary gains or losses of
such Person, non-recurring items of income or expense relating to mergers and
potential acquisitions acceptable to Lender in its reasonable discretion, and
gains and losses from sales of assets of such Person for such period plus (g)
such Person's pro rata share of EBITDA of each of such Person's Unconsolidated
Affiliates (determined in a manner consistent with the calculation of such
Person's EBITDA) minus (with respect to gains) or plus (with respect to losses)
any net income attributable to partnerships which hold Property in which
partnerships such Person has direct or indirect (through a Subsidiary of such
Person) ownership interest of not greater than fifty percent (50%).
4
"Effective Date" means the date this Agreement becomes effective in
accordance with Section 5.1.
"Eligible Property" means a Property which satisfies all of the
following requirements as determined by Lender: (a) such Property is owned 100%
in fee simple by Borrower or a Wholly Owned Subsidiary of Borrower; (b) neither
such Property, nor any interest of Borrower or such Wholly Owned Subsidiary
therein, is subject to any Lien other than Permitted Liens or to any agreement
(other than this Agreement or any other Loan Document) that prohibits the
creation of any Lien thereon as security for Indebtedness; (c) if such Property
is owned by a Wholly Owned Subsidiary: (i) none of Borrower's direct or indirect
ownership interest in such Wholly Owned Subsidiary is subject to any Lien other
than Permitted Liens or to any agreement (other than this Agreement or any other
Loan Document) that prohibits the creation of any Lien thereon as security for
Indebtedness and (ii) neither such Wholly Owned Subsidiary, nor any other Wholly
Owned Subsidiary through which Borrower holds any indirect interest in such
Wholly Owned Subsidiary, is subject to any restriction of any kind which would
limit its ability to pay or perform its obligations under the Guaranty required
to be delivered hereunder prior to its obligation to pay dividends or make any
other distribution on any of such Wholly Owned Subsidiary's capital stock or
other securities owned by Borrower or any other Wholly Owned Subsidiary of
Borrower; (d) such Property has an Occupancy Rate of at least 80%; and (e) such
Property is free of all structural defects, title defects, environmental
conditions or other adverse matters except for defects, conditions or matters
individually or collectively which are not material to the profitable operation
of such Property.
"Eligible Subsidiary" means any Subsidiary of Borrower other than a
Special Purpose Subsidiary.
"Eligibility Certificate" means the certificate described in Section
4.1(b)(iii) and in the Form of Exhibit H.
"Environmental Laws" means any Applicable Law relating to environmental
protection or the manufacture, storage, disposal or clean-up of Hazardous
Materials including, without limitation, the following: Clean Air Act, 42 U.S.C.
Section 7401 et seq.; Federal Water Pollution Control Act, 33 U.S.C. Section
1251 et seq.; Xxxxx Xxxxx Xxxxxxxx Xxx, 00 U.S.C. Section 6901 et seq.;
Comprehensive Environmental Response, Compensation and Liability Act, 42 U.S.C.
Section 9601 et seq.; National Environmental Policy Act, 42 U.S.C. Section 4321
et seq.; regulations of the Environmental Protection Agency and any applicable
rule of common law and any judicial interpretation thereof relating primarily to
the environment or Hazardous Materials.
"Equity Interest" means, with respect to any Person, any share of
capital stock of (or other ownership or profit interests in) such Person, any
warrant, option or other right for the purchase or other acquisition from such
Person of any share of capital stock of (or other ownership or profit interests
in) such Person, any security convertible into or exchangeable for any share of
capital stock of (or other ownership or profit interests in) such Person or
warrant, right or option for the purchase or other acquisition from such Person
of such shares (or such other interests), and any other ownership or profit
interest in such Person (including, without limitation, partnership, member or
trust interests therein), whether voting or nonvoting, and
5
whether or not such share, warrant, option, right or other interest is
authorized or otherwise existing on any date of determination.
"Equity Issuance" means any issuance or sale by a Person of any Equity
Interest.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended, or any successor statute.
"ERISA Group" means all members of a controlled group of corporations
and all trades or businesses (whether or not incorporated) under common control
that are treated as a single employer under Section 414 of the Internal Revenue
Code.
"ERISA Plan" means any employee benefit plan subject to Title I of
ERISA.
"Event of Default" means the occurrence of any of the events specified
in Section 9.1, whatever the reason for such event and whether it shall be
voluntary or involuntary or be effected by operation of law or pursuant to any
judgment or order of any court or any order, rule or regulation of any
governmental or nongovernmental body; provided that any requirement for notice
or lapse of time or any other condition has been satisfied.
"Executive Investment Summary" means, to the extent available, the set
of information provided to the investment committee of the Borrower in
connection with the acquisition of a Property. The Executive Investment Summary
shall include, at a minimum, the following information relating to such
Property: (a) a description of such Property, such description to include the
age, location, site plan, color photographs (to the extent reasonably available
to Borrower) and current occupancy rate of such Property; (b) the purchase price
paid or to be paid for such Property; (c) the capitalization rate for such
Property; (d) a summary of the existing tenants of such Property; (d) either
current operating statements for such Property for the immediately preceding
fiscal year and for current fiscal year through the fiscal quarter most recently
ending (to the extent reasonably available to Borrower) or pro forma operating
statements for such Property (to the extent reasonably available to Borrower);
and (e) other demographics and trade information relating to such Property.
"Federal Funds Rate" means, for any day, the rate per annum (rounded
upward, if necessary, to the nearest 1/100th of 1%) equal to the weighted
average of the rates on overnight Federal funds transactions with members of the
Federal Reserve System arranged by Federal funds brokers on such day, as
published by the Federal Reserve Bank of New York on the Business Day next
succeeding such day, provided that (a) if such day is not a Business Day, the
Federal Funds Rate for such day shall be such rate on such transactions on the
next preceding Business Day as so published on the next succeeding Business Day,
and (b) if no such rate is published on such next succeeding Business Day, the
Federal Funds Rate for such day shall be the average rate quoted to Lender on
such day on such transactions as reasonably determined by Lender.
"FIRREA" means the Financial Institution Recovery Reform and
Enforcement Act of 1989, as amended.
6
"Fixed Charges" means, with respect to a Person and for a given period,
the sum of (a) the Interest Expense of such Person for such period, plus (b) the
aggregate of all scheduled principal payments on Indebtedness made by such
Person during such period (excluding balloon, bullet or similar payments of
principal due upon the stated maturity of Indebtedness), plus (c) the aggregate
of all preferred dividends paid or accrued by such Person during such period,
plus (d) the Capital Expenditures Reserve for such period.
"Funds from Operations" means, as of any period for a Person, gross
revenues (excluding unforfeited security deposits) of such Person, less all
disbursements of such Person characterized as expenses and all proper charges
against income, plus depreciation and deferred taxes, reserves and other
non-cash charges (except for amortization of deferred finance costs) of such
Person; provided, that there shall not be included in such revenues (a) any
proceeds of any insurance policy other than rental or business interruption
insurance received by such Person, (b) any gain which is classified as
"extraordinary" in accordance with GAAP, (c) any capital gains, or (d)
non-recurring items of income (or expense) relating to mergers and potential
acquisitions acceptable to Lender in its reasonable discretion. The components
of Funds from Operations shall not be increased or decreased by gains or losses
from sales of Property. Funds from Operations shall be calculated on a
consolidated basis for Borrower and any of its Subsidiaries in accordance with
GAAP. Adjustments for Unconsolidated Affiliates will be calculated to reflect
Funds from Operations on the same basis.
"GAAP" means, as to a particular Person, such accounting practice as,
in the opinion of the independent accountants of recognized national standing
regularly retained by such Person and acceptable to Lender, conforms at the time
to generally accepted accounting principles, consistently applied. Generally
Accepted Accounting Principles means those principles and practices (a) which
are recognized as such by the Financial Accounting Standards Board, (b) which
are applied for all periods after the date hereof in a manner consistent with
the manner in which such principles and practices were applied to the most
recent audited financial statements of the relevant Person furnished to Lender
or where a change therein has been concurred in by such Person's independent
auditors, and (c) which are consistently applied for all periods after the date
hereof so as to reflect properly the financial condition, and results of
operations and changes in financial position, of such Person. If there is a
change in such accounting practice as to Borrower, then Borrower shall, unless
otherwise consented to by Lender, continue to utilize, for the purpose of this
Agreement, the accounting practices applicable to Borrower prior to such change.
"Governmental Approvals" means all authorizations, consents, approvals,
licenses and exemptions of, registrations and filings with, and reports to, all
Governmental Authorities.
"Governmental Authority" means any government (or any political
subdivision or jurisdiction thereof), court, bureau, agency or other
governmental authority having jurisdiction over Borrower or any Subsidiary, or
any of its or their business, operations or properties.
"Gross Asset Value" means, at a given time, the sum (without
duplication) of (a) the sum of the Operating Property Values of Borrower and its
Subsidiaries on a consolidated basis at such time, plus (b) all cash and cash
equivalents (excluding tenant deposits) of the Borrower and its Subsidiaries at
such time provided, however, that restricted cash and cash equivalents,
7
including, without limitation, cash deposited in escrow accounts for taxes and
insurance, shall only be included in Gross Asset Value to the extent a liability
corresponding thereto is included in the determination of Total Liabilities,
plus (c) the current book value of all unimproved real property (other than
Development Property) of Borrower and its Subsidiaries on a consolidated basis
held for development (provided that the aggregate value of all real property
held for development shall not exceed 5% of the Gross Asset Value) plus (d) the
current book value of all Development Property of Borrower and its Subsidiaries
on a consolidated basis, plus (e) the contractual purchase price of properties
subject to purchase obligations, repurchase obligations, forward commitments and
unfunded obligations to the extent such obligations and commitments are included
in determining Borrower's Total Liabilities, plus (f) Borrower's Ownership Share
of the Operating Property Value of Unconsolidated Affiliates, plus (g)
Borrower's Ownership Share of the current book value of all unimproved real
property (other than Development Property) of Unconsolidated Affiliates (subject
to the percentage limitation set forth in [c] above) plus (h) Borrower's
Ownership Share of the current book value of all Development Property.
"Guarantee" by any Person means any obligation, contingent or
otherwise, of such Person directly or indirectly guaranteeing any Indebtedness
or other obligation of any other Person and, without limiting the generality of
the foregoing, any obligation, direct or indirect, contingent or otherwise, of
such Person (a) to purchase or pay (or advance or supply funds for the purchase
or payment of) such Indebtedness or other obligation (whether arising by virtue
of partnership arrangements, by agreement to keep-well, to purchase assets,
goods, securities or services, to take-or-pay, or to maintain financial
statement conditions or otherwise) or (b) entered into for the purpose of
assuring in any other manner the obligee of such Indebtedness or other
obligation of the payment thereof or to protect such obligee against loss in
respect thereof (in whole or in part), provided that the term Guarantee shall
not include endorsements for collection or deposit in the ordinary course of
business. The term "Guarantee" used as a verb has a corresponding meaning.
"Guarantor" means all Subsidiaries of Borrower and each other Person
who has executed and delivered a Guaranty.
"Guaranty" means the Guaranty executed by each Guarantor in favor of
Lender and substantially in the form of Exhibit A.
"Hazardous Substances" means all or any of the following: (a)
substances that are defined or listed in, or otherwise classified pursuant to,
any applicable Environmental Laws as "hazardous substances", "hazardous
materials", "hazardous wastes", "toxic substances" or any other formulation
intended to define, list or classify substances by reason of deleterious
properties such as ignitability, corrosivity, reactivity, carcinogenicity,
reproductive toxicity, "TCLP" toxicity, or "EP toxicity"; (b) oil, petroleum or
petroleum derived substances, natural gas, natural gas liquids or synthetic gas
and drilling fluids, produced waters and other wastes associated with the
exploration, development or production of crude oil, natural gas or geothermal
resources; (c) any flammable substances or explosives or any radioactive
materials; (d) asbestos in any form; and (e) electrical equipment which contains
any oil or dielectric fluid containing levels of polychlorinated biphenyls in
excess of fifty parts per million. However, de minimus amounts of substances
which would otherwise be classified as Hazardous Substances
8
and are utilized in the ordinary course of the use of Properties and in
accordance with Applicable Laws are not Hazardous Substances for the purpose of
this Agreement.
"Indebtedness" means, with respect to a Person, at the time of
computation thereof, all of the following (without duplication): (a) all
obligations of such Person in respect of money borrowed; (b) all obligations of
such Person (other than trade debt incurred in the ordinary course of business),
whether or not for money borrowed (i) represented by notes payable, or drafts
accepted, in each case representing extensions of credit, (ii) evidenced by
bonds, debentures, notes or similar instruments, or (iii) constituting purchase
money indebtedness, conditional sales contracts, title retention debt
instruments or other similar instruments, upon which interest charges are
customarily paid or that are issued or assumed as full or partial payment for
property; (c) Capitalized Lease Obligations of such Person; (d) all Letter of
Credit Liabilities of such Person; (e) all Off Balance Sheet Liabilities of such
Person; (f) net obligations under any Derivative Contract in an amount equal to
the Derivatives Termination Value thereof; and (g) all Indebtedness of other
Persons to the extent (i) such Person has Guaranteed or is otherwise recourse to
such Person or (ii) is secured by a Lien on any property of such Person.
"Intangible Assets" means, with respect to any Person (to the extent
reflected in determining stockholders' equity of such Person) (a) deferred
charges, (b) the amount of any write-up in the book value of any assets
contained in any balance sheet resulting from revaluation thereof or any
write-up in excess of the cost of such assets acquired, and (c) the aggregate of
all amounts appearing on the assets side of any such balance sheet for
franchises, licenses, permits, patents, patent applications, copyrights,
trademarks, trade names, goodwill, treasury stock, experimental or
organizational expenses and other like intangibles.
"Interest Expense" means, for any Person and for any period, all paid,
accrued or capitalized interest expense of such Person (other than capitalized
interest funded from a Reserved Construction Loan) for such period and shall
include (a) all paid or accrued interest expense in respect of Indebtedness and
other liabilities which such Person has Guaranteed or is otherwise obligated
whether or not on a recourse basis, (b) such Person's Ownership Share of all
paid or accrued interest expense for such period of Unconsolidated Affiliates of
such Person, (c) costs related to Derivatives Contracts, and (d) fees and other
expenses related to the issuance of letters of credit.
"Interest Period" means with respect to any LIBOR Loan, the period
commencing on the date of the borrowing, Conversion or Continuation of such
LIBOR Loan and ending on the last day of the period selected by Borrower
pursuant to the provisions below. The duration of each Interest Period shall be
one, two, three or six months, which in each case Borrower may, in an
appropriate Notice of Borrowing, Notice of Continuation or Notice of Conversion,
select. In no event shall an Interest Period extend beyond the Maturity Date.
Whenever the last day of any Interest Period would otherwise occur on a day
other than a Business Day, the last day of such Interest Period shall be
extended to occur on the next succeeding Business Day; provided, however, that
if such extension would cause the last day of such Interest Period to occur in
the next following calendar month, the last day of such Interest Period shall
occur on the next preceding Business Day. In no event shall an Interest Period
have a duration of less than one month.
9
"Internal Revenue Code" means the Internal Revenue Code of 1986, as
amended, or any successor statute.
"Investment" means, with respect to any Person, any acquisition or
investment (whether or not of a controlling interest) by such Person, whether by
means of (a) the purchase or other acquisition of any Equity Interest in another
Person, (b) a loan, advance or extension of credit to, capital contribution to,
Guaranty of Indebtedness of, or purchase or other acquisition of any
Indebtedness of, another Person, including any partnership or joint venture
interest in such other Person, or (c) the purchase or other acquisition (in one
transaction or a series of transactions) of assets of another Person that
constitute the business or a division or operating unit of another Person. Any
commitment or option to make an Investment in any other Person shall constitute
an Investment. Except as expressly provided otherwise, for purposes of
determining compliance with any covenant contained in a Loan Document, the
amount of any Investment shall be the amount actually invested, without
adjustment for subsequent increases or decreases in the value of such
Investment.
"Issuing Bank" means Lender or an affiliate of Lender, as the issuer of
Letters of Credit hereunder.
"Issuing Bank Fees" means the Fees payable to the Issuing Bank pursuant
to the last sentences of Section 3.1(b) and (c).
"L/C Commitment Amount" means an amount equal to $5,000,000.00.
"Lending Office" means Lender's office identified as: Xxxxx Fargo Bank,
National Association, Disbursement and Operations Center, 0000 Xxxx Xxxx Xxxxx,
Xxxxx 000, Xx Xxxxxxx, Xxxxxxxxxx 00000; Attention: Xxxxx Xxxxxxxx.
"Letter of Credit" has the meaning set forth in Section 2.13(a).
"Letter of Credit Documents" means, with respect to any Letter of
Credit, collectively, any application therefor, any certificate or other
document presented in connection with a drawing under such Letter of Credit and
any other agreement, instrument or other document governing or providing for (a)
the rights and obligations of the parties concerned or at risk with respect to
such Letter of Credit or (b) any collateral security for any of such
obligations.
"Letter of Credit Liabilities" shall mean, without duplication, at any
time and in respect of any Letter of Credit, the sum of (a) the Stated Amount of
such Letter of Credit plus (b) the aggregate unpaid principal amount of all
Reimbursement Obligations of Borrower at such time due and payable in respect of
all drawings made under such Letter of Credit.
"LIBO Rate" means, with respect to each Interest Period, the average
rate of interest per annum (rounded upwards, if necessary, to the next highest
1/16th of 1%) at which deposits in immediately available funds in Dollars as
quoted to Lender by its current information service provider (at approximately
9:00 a.m., San Francisco time, two Business Days prior to the first day of such
Interest Period) by first class banks in the interbank Eurodollar market, where
the Eurodollar operations of Lender are customarily conducted, for delivery on
the first day of such Interest Period, such deposits being for a period of time
equal or comparable to such Interest
10
Period and in an amount equal to or comparable to the principal amount of the
LIBOR Loan to which such Interest Period relates. Each determination of the LIBO
Rate by Lender shall, in absence of demonstrable error, be conclusive and
binding.
"LIBOR Loan" means any portion of the Revolving Loan with respect to
which the interest rate is calculated by reference to the LIBO Rate for a
particular Interest Period.
"Lien" as applied to the real property of any Person means: (a) any
security interest, encumbrance, mortgage, deed to secure debt, deed of trust,
pledge, lien, charge or lease constituting a Capitalized Lease Obligation,
conditional sale or other title retention agreement, or other security interest,
security title or encumbrance of any kind in respect of any property of such
Person, or upon the income or profits therefrom; (b) any arrangement, express or
implied, under which any property of such Person is transferred, sequestered or
otherwise identified for the purpose of subjecting the same to the payment of
Indebtedness or performance of any other obligation in priority to the payment
of the general, unsecured creditors of such Person; (c) the filing of any
financing statement under the Uniform Commercial Code or its equivalent in any
jurisdiction; and (d) any agreement by any such person to grant, give or
otherwise convey any of the foregoing.
"Loan" means a LIBOR Loan or a Base Rate Loan.
"Loan Documents" means this Agreement, the Revolving Note, each Letter
of Credit, each of the Guaranties, any agreement evidencing the fees referred to
in Section 3.1(b) and each other document or instrument executed and delivered
by any Loan Party in connection with this Agreement or any of the other
foregoing documents.
"Loan Party" means each of Borrower, each Guarantor, and each other
Person who guarantees all or a portion of the Obligations and/or who pledges any
collateral security to secure all or a portion of the Obligations.
"Major Agreements" means, at any time, (a) each Property Management
Agreement with respect to a Property and (b) any other agreement which in any
way relates to the use, occupancy, operation, maintenance, enjoyment or
ownership of a Property, the breach or loss of which would have a Materially
Adverse Effect.
"Materially Adverse Effect" means a materially adverse effect on (a)
the business, assets, liabilities, financial condition, or results of operations
of Borrower and its Subsidiaries taken as a whole, (b) the ability of any Loan
Party to perform its obligations under any Loan Document to which it is a party,
(c) the validity or enforceability of any of such Loan Documents, (d) the rights
and remedies of Lender under any of such Loan Documents or (e) the timely
payment of the principal of or interest on the Revolving Loan or other amounts
payable in connection therewith. Except with respect to representations made or
deemed made by Borrower under Article 6 or in any of the other Loan Documents to
which any Loan Party is a party, all determinations of materiality shall be made
by Lender in its reasonable judgment unless expressly provided otherwise.
"Maximum Loan Availability" means, at any time, the lesser of (a) the
amount, if any, by which (i) the Unencumbered Pool Value divided by 1.85,
exceeds (ii) all Unsecured
11
Indebtedness (other than the Commitment) of Borrower and its Subsidiaries or (b)
the amount of the Commitment.
"Mortgage" means a mortgage, deed of trust or deed to secure debt or
similar security instrument made by a Person owning an interest in real estate
granting a Lien or such interest in real estate as security for the payment of
Indebtedness.
"Net Operating Income" means, for any Property for the period in
question, but without duplication, the sum of (a) rents and other revenues
received in the ordinary course from such Property (including amounts received
from tenants as reimbursements for common area maintenance, taxes and insurance
and proceeds of rent loss insurance but excluding pre-paid rents and revenues
and security deposits except to the extent applied in satisfaction of tenants'
obligations for rent) minus (b) all expenses paid or accrued related to the
ownership, operation or maintenance of such property, including but not limited
to taxes, assessments and the like, insurance, utilities, payroll costs,
maintenance, repair and landscaping expenses, marketing expenses, and general
and administrative expenses (including an appropriate allocation for legal,
accounting, advertising, marketing and other expenses incurred in connection
with such property, but specifically excluding general overhead expenses of
Borrower and any property management fees) minus (c) the Capital Expenditures
Reserve for such Property as of the end of such period minus (d) the greater of
(i) the actual property management fee paid during such period and (ii) an
imputed management fee determined by multiplying the Applicable Management Fee
Percentage (hereinafter defined) times the gross revenues for such Property for
such period, in each case determined in accordance with GAAP. The term
"Applicable Management Fee Percentage" shall mean, four percent (4.0%) with
respect to multi-tenant Properties and one percent (1%) with respect to
single-tenant Properties.
"Non-ERISA Plan" means any Plan subject to Section 4975 of the Internal
Revenue Code.
"Notice of Borrowing" means a notice in the form of Exhibit C to be
delivered to Lender by Borrower pursuant to Section 2.2.
"Notice of Continuation" means a notice in the form of Exhibit D to be
delivered to Lender by Borrower pursuant to Section 2.4.
"Notice of Conversion" means a notice in the form of Exhibit E to be
delivered to Lender by Borrower pursuant to Section 2.5.
"Obligations" means, individually and collectively: (a) the Loans; (b)
all Reimbursement Obligations and all other Letter of Credit Liabilities; (c)
any and all renewals and extensions of any of the foregoing and (d) all other
indebtedness, liabilities, obligations, covenants and duties of Borrower owing
to Lender and/or the Issuing Bank of every kind, nature and description, under
or in respect of this Agreement or any of the other Loan Documents, whether
direct or indirect, absolute or contingent, due or not due, contractual or
tortious, liquidated or unliquidated, and whether or not evidenced by any
promissory note.
"Occupancy Rate" means, with respect to a Property at any time, the
ratio, expressed as a percentage, of (a) the net rentable square footage of such
Property actually occupied by tenants
12
paying rent pursuant to binding leases as to which no monetary default has
occurred and has been continuing for a period of 90 or more days to (b) the
aggregate net rentable square footage of such Property.
"Off Balance Sheet Liabilities" means, with respect to any Person, any
obligation or liability that does not appear as a liability on the balance sheet
of such Person and that constitutes (a) any repurchase obligation or liability,
contingent or otherwise, of such Person with respect to any accounts or notes
receivable sold, transferred or otherwise disposed of by such Person, (b) any
repurchase obligation or liability, contingent or otherwise, of such Person with
respect to property or assets leased by such Person as lessee and (c) all
obligations, contingent or otherwise, of such Person under any synthetic lease,
tax retention operating lease, off balance sheet loan or similar off balance
sheet financing if the transaction giving rise to such obligation (i) is
considered indebtedness for borrowed money for tax purposes but is classified as
an operating lease or (ii) does not (and is not required pursuant to GAAP to)
appear as a liability on the balance sheet of such Person.
"Operating Property Value" means, as of a given date and with respect
to any Person, such Person's EBITDA for the fiscal quarter most recently ended
(including the amortized cash portion of Direct Financing Leases [as defined by
GAAP] not already added back to EBITDA, and excluding Net Operating Income from
any Property not owned by such Person for the entire fiscal quarter most
recently ended and further excluding EBITDA derived from sources other than
Property) multiplied by 4 and divided by (i) nine percent (9%) for that portion
of EBITDA derived from single-tenant, triple-net leased Properties or (ii) nine
and one-half percent (9-1/2%) for that portion of EBITDA derived from
multi-tenant Properties, plus the purchase price of any real property acquired
during the fiscal quarter most recently ended other than real property upon
which construction is then in progress.
"Ownership Share" means, with respect to any Subsidiary of a Person or
any Unconsolidated Affiliate of a Person, the greater of (a) such Person's
relative nominal direct and indirect ownership interest (expressed as a
percentage) in such Subsidiary or Unconsolidated Affiliate or (b) such Person's
relative direct and indirect economic interest (calculated as a percentage) in
such Subsidiary or Unconsolidated Affiliate determined in accordance with the
applicable provisions of the declaration of trust, articles or certificate of
incorporation, articles of organization, partnership agreement, joint venture
agreement or other applicable organizational document of such Subsidiary or
Unconsolidated Affiliate.
"PBGC" means the Pension Benefit Guaranty Corporation or any entity
succeeding to any or all of its functions under ERISA.
"Permitted Distributions" means an amount not exceeding 95% of
Borrower's Funds from Operations for the prior four calendar quarters.
"Permitted Liens" means (a) Liens granted to Lender to secure the
Obligations, (b) pledges or deposits made to secure payment of worker's
compensation (or to participate in any fund in connection with worker's
compensation insurance), unemployment insurance, pensions or social security
programs, (c) encumbrances consisting of zoning restrictions, easements, or
other restrictions on the use of real property, provided that such items do not
materially impair
13
the use of such property for the purposes intended and none of which is violated
in any material respect by existing or proposed structures or land use, (d) the
following to the extent no Lien has been filed in any jurisdiction or agreed to:
(i) Liens for taxes not yet due and payable; or (ii) Liens imposed by mandatory
provisions of Applicable Law such as for materialmen's, mechanic's,
warehousemen's and other like Liens arising in the ordinary course of business,
securing payment of Indebtedness the payment of which is not yet due, (e) Liens
for taxes, assessments and governmental charges or assessments that are being
contested in good faith by appropriate proceedings diligently conducted, and for
which reserves acceptable to Lender have been provided, (f) Liens expressly
permitted under the terms of the Loan Documents, and (g) any extension, renewal
or replacement of the foregoing to the extent such Lien as so extended, renewed
or replaced would otherwise be permitted hereunder.
"Person" means an individual, a corporation, a partnership, a limited
liability company, an association, a trust or any other entity or organization,
including a government or political subdivision or an agency or instrumentality
thereof.
"Plan" means at any time an employee pension benefit plan which is
covered by Title IV of ERISA or subject to the minimum funding standards under
Section 412 of the Internal Revenue Code.
"Property" means real property improved with one or more operating
retail properties.
"Property Management Agreements" means, collectively, all agreements
entered into by any Person with a Property Manager pursuant to which such Person
engages such Property Manager to advise such Person with respect to the
management of a Property.
"Property Manager" means any Person engaged under a Property Management
Agreement to advise the owner of a Property with respect to the management of
such Property.
"Regulations T, U and X" means Regulations T, U and X of the Board of
Governors of the Federal Reserve System, as in effect from time to time.
"Reimbursement Obligation" means the absolute, unconditional and
irrevocable obligation of Borrower to reimburse the Issuing Bank for any drawing
honored by the Issuing Bank under a Letter of Credit.
"REIT" means a Person qualifying for treatment as a "real estate
investment trust" under the Internal Revenue Code.
"Reserved Construction Loan" shall mean a construction loan extended to
Borrower or any Subsidiary for the purpose of financing construction of a
Property in respect of which: (a) no default or event of default exists; (b)
interest on such loan has been budgeted to accrue at a rate of not less than the
Base Rate at the time the interest reserve account is established; (c) the
amount of such budgeted interest has been (i) included in the principal amount
of such loan and (ii) segregated into an interest reserve account (which shall
include any arrangement whereby loan proceeds equal to such budgeted interest
are reserved and only disbursed to make interest payments in respect of such
loan); (d) absent an event of default or default, such interest can be paid out
of such interest reserve account only for the purpose of making interest
payments on
14
such loan; and (e) the amount held in such interest reserve account in respect
of such loan, together with the net income, if any, from such Property projected
by Lender will be sufficient, as determined by Lender, to pay all Interest
Expense on such loan until the date that the Net Operating Income of such
Property is anticipated to be sufficient to pay all Interest Expense on such
loan.
"Restricted Payment" means cash payment or other distributions on, or
in respect of, any class of stock of, or other equity interest in, a Person, or
other payments or transfers made in respect of the redemption, repurchase or
acquisition of such stock or equity interest, other than any distribution or
other payment payable solely in capital stock of such Person.
"Revolving Credit Termination Date" means the earlier to occur of (a)
September 4, 2004 or (b) the date on which the Commitment is terminated pursuant
to Section 9.2.
"Revolving Loan" means the credit facility evidenced by the Revolving
Note.
"Revolving Note" means the promissory note executed by Borrower,
payable to the order of Lender, in the amount of the Commitment and
substantially in the form of Exhibit B.
"Secured Indebtedness" means, with respect to any Person, any
Indebtedness of such Person that is secured in any manner by any Lien on any
real property and shall include such Person's Ownership Share of the Secured
Indebtedness of any of such Person's Unconsolidated Affiliates.
"Share" means a transferable unit of beneficial interest in Borrower.
"Solvent" means, when used with respect to any Person, that (a) the
fair value and the fair salable value of its assets (excluding any Indebtedness
due from any Affiliate of such Person) are each in excess of the fair valuation
of its total liabilities (including all contingent liabilities); (b) such Person
is able to pay its debts or other obligations in the ordinary course as they
mature and (c) that the Person has capital not unreasonably small to carry on
its business and all business in which it proposes to be engaged.
"Special Purpose Subsidiary" means any "single-asset" or "single pool"
Subsidiary of the Borrower that has been or may hereafter be formed by the
Borrower for the exclusive purposes of obtaining permanent financing from a
lender, and owning and operating the assets so financed, and which is prohibited
by such lender from providing any guaranty of other Indebtedness.
"Stated Amount" means the amount available to be drawn by a beneficiary
under a Letter of Credit from time to time, as such amount may be increased or
reduced from time to time in accordance with the terms of such Letter of Credit.
"Subsidiary" means, for any Person, any corporation, partnership or
other entity of which at least a majority of the securities or other ownership
interests having by the terms thereof ordinary voting power to elect a majority
of the board of directors or other persons performing similar functions of such
corporation, partnership or other entity (without regard to the occurrence of
any contingency) is at the time directly or indirectly owned or controlled by
such
15
Person or one or more Subsidiaries of such Person or by such Person and one or
more Subsidiaries of such Person. "Wholly Owned Subsidiary" means any such
corporation, partnership or other entity of which all of the equity securities
or other ownership interests (other than, in the case of a corporation,
directors' qualifying shares) are so owned or controlled.
"Substantial Amount" means, at the time of determination thereof, an
amount greater than or equal to 15% of the sum of (a) total consolidated assets
of Borrower and its Subsidiaries, on a consolidated basis, at such time, plus
(b) accumulated depreciation of Borrower and its Subsidiaries, on a consolidated
basis, at such time.
"Tangible Net Worth" means, for any Person and as of a given date, such
Person's total consolidated stockholders' equity plus, in the case of the
Borrower, increases in accumulated depreciation and amortization accrued after
the Effective Date, minus (to the extent contained in determining stockholders'
equity of such Person): (a) the amount of any write-up in the book value of any
assets reflected in any balance sheet resulting from revaluation thereof or any
write-up in excess of the cost of such assets acquired, and (b) the aggregate of
all amounts appearing on the assets side of any such balance sheet for
franchises, licenses, permits, patents, patent applications, copyrights,
trademarks, service marks, trade names, goodwill, treasury stock, experimental
or organizational expenses and other like assets which would be classified as
intangible assets under GAAP, all determined on a consolidated basis.
"Total Budgeted Costs" means, with respect to any Development Property,
all amounts budgeted with respect to all of the following: (a) acquisition of
land and any related improvements; (b) a reasonable and appropriate reserve for
construction interest; (c) a reasonable and appropriate operating deficit
reserve; (d) tenant improvements, (e) leasing commissions and (f) other hard and
soft costs associated with the development or redevelopment of such real
property. With respect to any real property to be developed in more than one
phase, the Total Budgeted Cost shall exclude budgeted costs (other than costs
relating to acquisition of land and related improvements) to the extent relating
to any phase for which (i) construction has not yet commenced and (ii) a binding
construction contract has not been entered into by the Borrower, any other
Subsidiary or any Unconsolidated Affiliate, as the case may be. For purposes of
this definition, Total Budgeted Costs shall, with respect to any real property
being developed by an Unconsolidated Affiliate, be equal to the greater of (x)
Borrower's or any Subsidiary's Ownership Share of such Unconsolidated Affiliate
times the Total Budgeted Costs determined in accordance with the foregoing or
(y) the total amount of Indebtedness related to such real property that Borrower
or any Subsidiary has Guaranteed or is otherwise obligated on a recourse basis.
"Total Liabilities" means, as to any Person as of a given date, all
liabilities which would, in conformity with GAAP, be properly classified as a
liability on a consolidated balance sheet of such Person as of such date, and in
any event shall include (without duplication): (a) all Indebtedness of such
Person, including without limitation, Capitalized Lease Obligations and
reimbursement obligations with respect to any letter of credit, (b) all accounts
payable and accrued expenses of such Person; (c) all purchase and repurchase
obligations and forward commitments of such Person to the extent such
obligations or commitments are evidenced by a binding purchase agreement
(forward commitments shall include without limitation (i) forward equity
commitments and (ii) commitments to purchase any real property under
development, redevelopment or renovation); (d) all unfunded obligations of such
Person; (e) all lease
16
obligations of such Person (including ground leases) to the extent required
under GAAP to be classified as a liability on a balance sheet of such Person;
(f) all contingent obligations of such Person including, without limitation, all
Guarantees of Indebtedness by such Person; (g) all liabilities of any
Unconsolidated Affiliate of such Person, which liabilities such Person has
Guaranteed or is otherwise obligated on a recourse basis; and (h) such Person's
Ownership Share of the Indebtedness of any Unconsolidated Affiliate of such
Person, including Nonrecourse Indebtedness of such Person. For purposes of
clauses (c) and (d) of this definition, the amount of Total Liabilities of a
Person at any given time in respect of (x) a contract to purchase or otherwise
acquire unimproved or fully developed real property shall be equal to (i) the
total purchase price payable by such Person under such contract if, at such
time, the seller of such real property would be entitled to specifically enforce
such contract against such Person, otherwise, (ii) the aggregate amount of due
diligence deposits, xxxxxxx money payments and other similar payments made by
such Person under such contract which, at such time, would be subject to
forfeiture upon termination of the contract and (y) a contract relating to the
acquisition of real property which the seller is required to develop or renovate
prior to, and as a condition precedent to, such acquisition, shall be equal to
(i) the maximum amount reasonably estimated to be payable by such Person under
such contract assuming performance by the seller of its obligations under such
contract, which amount shall include, without limitation, any amounts payable
after consummation of such acquisition which may be based on certain performance
levels or other related criteria if, at such time, the seller of such real
property would be entitled to specifically enforce such contract against such
Person, otherwise (ii) the aggregate amount of due diligence deposits, xxxxxxx
money payments and other similar payments made by such Person under such
contract which, at such time, would be subject to forfeiture upon termination of
the contract. For purposes of this definition, Total Budgeted Costs shall
include the Total Budgeted Costs of Development Properties being developed by
third parties with related Indebtedness which such Person Guaranteed or is
otherwise obligated.
"Type" with respect to the Revolving Loan, refers to whether the
applicable portion of the Revolving Loan is a LIBOR Loan or a Base Rate Loan.
"Unconsolidated Affiliate" shall mean, in respect of any Person, any
other Person in whom such Person holds an Investment, which Investment is
accounted for in the financial statements of such Person on an equity basis of
accounting and whose financial results would not be consolidated under GAAP with
the financial results of such Person on the consolidated financial statements of
such Person.
"Unencumbered Net Operating Income" means, for any period, the
aggregate Net Operating Income for such period for each Property of Borrower or
any Subsidiary which satisfies all of the following requirements as determined
by Lender: (a) such Property is 100% owned in fee simple by Borrower or a Wholly
Owned Subsidiary of Borrower; (b) neither such Property nor any interest of
Borrower or such Subsidiary therein, is subject to any Lien other than Permitted
Liens or to any agreement (other than this Agreement or any other Loan Document)
that prohibits the creation of any Lien thereon as security for Indebtedness;
(c) if such Property is owned by a Subsidiary: (i) none of Borrower's Ownership
Share in such Subsidiary is subject to any Lien other than Permitted Liens or to
any agreement (other than this Agreement or any other Loan Document) that
prohibits the creation of any Lien thereon as security for Indebtedness and (ii)
neither such Subsidiary, nor any other Subsidiary through
17
which Borrower holds any indirect interest in such Subsidiary, is subject to any
restriction of any kind which would limit its ability to pay or perform its
obligations under the Guaranty required to be delivered hereunder prior to its
obligation to pay dividends or make any other distribution on any of such
Subsidiary's capital stock or other securities owned by Borrower or any other
Subsidiary of Borrower.
"Unencumbered Pool Certificate" means a report, certified by the chief
financial officer of Borrower in the manner provided for in Exhibit G, setting
forth the calculations required to establish the Unencumbered Pool Value as of a
specified date, all in form and detail satisfactory to Lender.
"Unencumbered Pool Properties" means those Eligible Properties that
have been approved pursuant to Article 4 for inclusion when calculating the
Maximum Loan Availability.
"Unencumbered Pool Value" means, at any time, the sum of the following
amounts as determined for each Unencumbered Pool Property: (a) the Net Operating
Income of such Unencumbered Pool Property for the fiscal quarter most recently
ended times (b) 4 and divided by (c) the applicable of (i) nine percent (9%)
with respect to Net Operating Income derived from single-tenant, triple-net
leased Properties or (ii) nine and one-half percent (9-1/2%) with respect to Net
Operating Income derived from multi-tenant Properties. Notwithstanding anything
set forth in this definition to the contrary if an Unencumbered Pool Property
has been owned for less than one fiscal quarter, then either (i) the purchase
price of such Unencumbered Pool Property, or (ii) the aggregate developmental
and construction cost of such Unencumbered Pool Property shall be its
Unencumbered Pool Value.
"Unsecured Indebtedness" means, with respect to a Person, all
Indebtedness of such Person that is not Secured Indebtedness.
"Unsecured Interest Expense" means, with respect to a Person and for a
given period, all Interest Expense for such period attributable to the Unsecured
Indebtedness of such Person.
Section 1.2 Accounting Terms and Determinations; Covenant Calculations.
Unless otherwise specified herein, all accounting terms used herein
shall be interpreted, all accounting determinations hereunder shall be made, and
all financial statements required to be delivered hereunder shall be prepared in
accordance with GAAP.
Section 1.3 Subsidiaries.
Unless explicitly set forth to the contrary, a reference to
"Subsidiary" shall mean a Subsidiary of Borrower and a reference to an
"Affiliate" shall mean a reference to an Affiliate of Borrower.
Section 1.4 Interpretation Generally; Times.
References in this Agreement to "Sections", "Articles", "Exhibits" and
"Schedules" are to sections, articles, exhibits and schedules herein and hereto
unless otherwise indicated. References in this Agreement or any other Loan
Document to any document, instrument or
18
agreement (a) shall include all exhibits, schedules and other attachments
thereto, as updated from time to time, (b) shall include all documents,
instruments or agreements issued or executed in replacement thereof, and (c)
shall mean such document, instrument or agreement, or replacement or predecessor
thereto, as amended, modified or supplemented from time to time in accordance
with its terms and in effect at any given time. Wherever from the context it
appears appropriate, each term stated in either the singular or plural shall
include the singular and plural, and pronouns stated in the masculine, feminine
or neuter gender shall include the masculine, the feminine and the neuter.
Unless otherwise indicated, all references to time are references to San
Francisco, California time.
ARTICLE 2.
CREDIT FACILITY
Section 2.1 Making of Revolving Loan.
(a) Subject to the terms and conditions set forth in this Agreement
including, without limitation, Section 2.1(b), Lender agrees to permit Borrower
to make borrowings under the Revolving Loan during the period from and including
the Effective Date to but excluding the Revolving Credit Termination Date, in an
aggregate principal amount at any one time outstanding up to, but not exceeding,
the lesser of (a) the Maximum Loan Availability and (b) the Commitment. Each
borrowing shall be in an aggregate principal amount of (i) with respect to Base
Rate Loans, except with respect to fundings under the Sweep Agreement
(hereinafter defined), $100,000.00 and integral multiples of $50,000.00 in
excess of that amount (except that any such borrowing of Base Rate Loans may be
in the aggregate amount of the unused Commitment) and (ii) with respect to LIBOR
Loans, $250,000.00 and integral multiples of $100,000.00 in excess of that
amount. Within the foregoing limits and subject to the other terms of this
Agreement, Borrower may borrow, repay and reborrow the Revolving Loan.
(b) Notwithstanding any other term of this Agreement or any other Loan
Document, at no time may the aggregate principal amount of all outstanding LIBOR
Loans, Base Rate Loans and Letter of Credit Liabilities, exceed the lesser of
(a) Maximum Loan Availability at such time or (b) the Commitment.
Section 2.2 Requests for Borrowings.
Not later than 10:00 a.m. at least one Business Day prior to a
borrowing of Base Rate Loans and not later than 10:00 a.m. at least three
Business Days prior to a borrowing of LIBOR Loans, Borrower shall deliver to
Lender a Notice of Borrowing. Each Notice of Borrowing shall specify the
principal amount of the Revolving Loans to be borrowed, the date such amount is
to be borrowed (which must be a Business Day), the use of the proceeds of such
borrowing, the Type of the requested borrowing and if such borrowing is to be a
LIBOR Loan, the initial Interest Period for such LIBOR Loan. Each Notice of
Borrowing shall be irrevocable once given and binding on Borrower. Prior to
delivering a Notice of Borrowing, Borrower may (without specifying whether the
borrowing will be a Base Rate Loan or a LIBOR Loan) request that Lender provide
Borrower with the most recent LIBO Rate available to Lender. Lender shall
provide such quoted rate to Borrower on the date of such request or as soon as
possible thereafter.
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Section 2.3 Funding. Promptly after receipt of a Notice of Borrowing,
and upon and subject to fulfillment of all applicable conditions set forth
herein, Lender shall make available to Borrower at Lender's Lending Office, not
later than 11:00 a.m. on the date of the requested borrowing, the proceeds of
such borrowing.
Section 2.4 Continuation.
So long as no Default shall have occurred and be continuing, Borrower
may on any Business Day, with respect to any LIBOR Loan, elect to maintain such
LIBOR Loan or any portion thereof as a LIBOR Loan by selecting a new Interest
Period for such LIBOR Loan. Each new Interest Period selected under this Section
shall commence on the last day of the immediately preceding Interest Period.
Each selection of a new Interest Period shall be made by Borrower's giving of a
Notice of Continuation not later than 10:00 a.m. on the third Business Day prior
to the date of any such Continuation by Borrower to Lender. Such notice by
Borrower of a Continuation shall be by telephone or telecopy, confirmed
immediately in writing if by telephone, in the form of a Notice of Continuation,
specifying (a) the date of such Continuation, (b) the LIBOR Loan and portion
thereof subject to such Continuation and (c) the duration of the selected
Interest Period, all of which shall be specified in such manner as is necessary
to comply with all limitations on Loans outstanding hereunder. Each Notice of
Continuation shall be irrevocable by and binding on Borrower once given. If
Borrower shall fail to select in a timely manner a new Interest Period for any
LIBOR Loan in accordance with this Section, such Loan will automatically, on the
last day of the current Interest Period therefore, Convert into a Base Rate Loan
notwithstanding failure of Borrower to comply with Section 2.5.
Section 2.5 Conversion.
So long as no Event of Default shall have occurred and be continuing,
Borrower may on any Business Day, upon Borrower's giving of a Notice of
Conversion to Lender, Convert the entire amount of all or a portion of a Loan of
one Type into a Loan of another Type. Any Conversion of a LIBOR Loan into a Base
Rate Loan shall be made on, and only on, the last day of an Interest Period for
such LIBOR Loan. Each such Notice of Conversion shall be given not later than
10:00 a.m. on the Business Day prior to the date of any proposed Conversion into
Base Rate Loans and on the third Business Day prior to the date of any proposed
Conversion into LIBOR Loans. Subject to the restrictions specified above, each
Notice of Conversion shall be by telephone or telecopy confirmed immediately in
writing if by telephone in the form of a Notice of Conversion specifying (a) the
requested date of such Conversion, (b) the Type of Loan to be Converted, (c) the
portion of such Type of Loan to be Converted, (d) the Type of Loan such Loan is
to be Converted into and (e) if such Conversion is into a LIBOR Loan, the
requested duration of the Interest Period of such Loan. Each Notice of
Conversion shall be irrevocable by and binding on Borrower once given. Each
Conversion from a Base Rate Loan to a LIBOR Loan shall be in an amount of not
less than $250,000.00 or integral multiples of $100,000.00 in excess of that
amount.
Section 2.6 Interest Rate.
(a) All Loans. The unpaid principal of each Base Rate Loan shall bear
interest from the date of the making of such Loan to but not including the date
of repayment thereof at a rate
20
per annum equal to the Base Rate in effect from day to day. The unpaid principal
of each LIBOR Loan shall bear interest from the date of the making of such Loan
to but not including the date of repayment thereof at a rate per annum equal to
the Adjusted LIBO Rate for the Interest Period therefor.
(b) Default Rate. Notwithstanding the immediately preceding subsection
(a), or any other provision of this Agreement to the contrary, effective
immediately upon the occurrence and during the continuance of any Event of
Default, the outstanding principal balance of the Loans and all Reimbursement
Obligations, and to the extent permitted by Applicable Law any interest payments
on the Loans not paid when due, shall bear interest payable on demand until paid
at the lesser of the Maximum Rate or the Base Rate from time to time in effect
plus four percent (4.0%).
Section 2.7 Special Provisions for LIBOR Loans.
(a) Inadequacy of LIBOR Pricing. Anything herein to the contrary
notwithstanding, if, on or prior to the determination of any LIBO Rate for any
Interest Period:
(i) Lender reasonably determines, which determination shall be
conclusive, absent manifest error, that quotations of interest rates
for the relevant deposits referred to in the definition of LIBO Rate
are not being provided in the relevant amounts or for the relevant
maturities for purposes of determining rates of interest for LIBOR
Loans as provided herein; or
(ii) Lender reasonably determines, which determination shall
be conclusive, absent manifest error, that the relevant rates of
interest referred to in the definition of LIBO Rate upon the basis of
which the rate of interest for LIBOR Loans for such Interest Period is
to be determined are not likely adequately to cover the cost to Lender
of making or maintaining LIBOR Loans for such Interest Period;
then Lender shall give Borrower prompt notice thereof and, so long as such
condition remains in effect, Lender shall be under no obligation to, and shall
not, make additional LIBOR Loans, Continue LIBOR Loans or Convert Base Rate
Loans into LIBOR Loans and Borrower shall, on the last day of each current
Interest Period for each outstanding LIBOR Loan, either prepay such Loan or
Convert such Loan into a Base Rate Loan in accordance with Section 2.5.
(b) Number of Interest Periods. Anything herein to the contrary
notwithstanding, there shall not be outstanding at any one time more than six
(6) Interest Periods.
(c) Illegality of LIBOR Loans. If, after the date of this Agreement,
the adoption of any Applicable Law, rule or regulation, or any change therein,
or any change in the interpretation or administration thereof by any
Governmental Authority, central bank or comparable agency charged with the
interpretation or administration thereof, or compliance by Lender with any
request or directive (whether or not having the force of law) of any such
authority, central bank or comparable agency shall make it unlawful or
impossible for Lender to make, maintain or fund LIBOR Loans, Lender shall
forthwith give notice thereof to Borrower. Before giving any notice pursuant to
this subsection, Lender shall designate a different LIBOR lending office if such
designation will avoid the need for giving such notice and will not be otherwise
materially
21
disadvantageous to Lender (as determined in the reasonable judgment of Lender).
Upon receipt of such notice, Borrower shall Convert Lender's LIBOR Loans to Base
Rate Loans, on either (i) the last day of the then-current Interest Period
applicable to such LIBOR Loan if Lender may lawfully continue to maintain and
fund such LIBOR Loan to such day or (ii) immediately if Lender may not lawfully
continue to fund and maintain such LIBOR Loan to such day.
(d) Consequential Losses. Borrower shall indemnify Lender against any
Consequential Loss incurred by Lender as a result of (i) any failure to fulfill,
on or before the date specified for such Loan in the applicable Notice of
Borrowing, the conditions to such Loan set forth herein, or (ii) Borrower's
requesting that a Base Rate Loan not be Converted into a LIBOR Loan on the date
specified for such Conversion in a Notice of Conversion, (iii) Borrower's
requesting that a LIBOR Loan not be Continued on the date specified for such
Continuation in a Notice of Continuation or (iv) Borrower's requesting that a
LIBOR Loan not be made on the date specified for such LIBOR Loan in the Notice
of Borrowing. A certificate of Lender establishing the amount due from Borrower
according to the preceding sentence, together with a description in reasonable
detail of the manner in which such amount has been calculated, shall be prima
facie evidence thereof.
(e) Increased Costs for LIBOR Loans. If, after the date hereof, any
Governmental Authority, central bank or other comparable authority, shall at any
time impose, modify or deem applicable any reserve (including, without
limitation, any imposed by the Board of Governors of the Federal Reserve
System), special deposit or similar requirement against assets of, deposits with
or for the account of, or credit extended by Lender or shall impose on Lender
(or its eurodollar lending office) or the interbank eurodollar market any other
condition affecting its LIBOR Loans, the Revolving Note or Lender's obligation
to make LIBOR Loans; and the result of any of the foregoing is to increase the
cost to Lender of making or maintaining LIBOR Loans, or to reduce the amount of
any sum received or receivable by Lender under this Agreement, or under the
Revolving Note, by an amount reasonably deemed by Lender to be material, then,
within five days after demand by Lender, Borrower shall pay to Lender such
additional amount or amounts as will compensate Lender for such increased cost
or reduction. Lender will (i) notify Borrower of any event occurring after the
date of this Agreement which will entitle Lender to compensation pursuant to
this subsection as promptly as practicable (but in any event within 120 days)
after Lender obtains actual knowledge of such event, and Borrower shall not be
liable for any such increased costs that accrue between the date such
notification is required to be given and the date it was actually given and (ii)
use good faith and reasonable efforts to designate a different lending office
for Lender's LIBOR Loans if such designation will avoid the need for, or reduce
the amount of, such compensation and will not, in the reasonable opinion of
Lender, be materially disadvantageous to Lender. A certificate of Lender
claiming compensation under this Section and setting forth in reasonable detail
the calculation of the additional amount or amounts to be paid to it hereunder
shall be prima facie evidence thereof.
(f) Effect on Base Rate Loans. If notice has been given pursuant to
Section 2.7(a) or (c) requiring LIBOR Loans of Lender to be repaid or Converted,
then unless and until Lender notifies Borrower that the circumstances giving
rise to such repayment no longer apply, all Loans shall be Base Rate Loans. If
Lender notifies Borrower that the circumstances giving rise to such repayment no
longer apply, Borrower may thereafter select LIBOR Loans.
22
(g) Payments Not at End of Interest Period. If Borrower makes any
payment of principal with respect to any LIBOR Loan on any day other than the
last day of an Interest Period applicable to such LIBOR Loan, then Borrower
shall reimburse Lender on demand the Consequential Loss incurred by Lender as a
result of the timing of such payment. A certificate of Lender setting forth in
reasonable detail the basis for the determination of the amount of Consequential
Loss shall be delivered to Borrower by Lender and shall, in the absence of
demonstrable error, be conclusive and binding. Any Conversion of a LIBOR Loan to
a Base Rate Loan on any day other than the last day of the Interest Period for
such LIBOR Loan shall be deemed a payment for purposes of this subsection.
Section 2.8 Capital Adequacy.
If, after the date hereof, Lender shall have reasonably determined that
either (a) the adoption of any law, rule, regulation or guideline of general
applicability regarding capital adequacy, or any change therein, or any change
in the interpretation or administration thereof by any Governmental Authority,
central bank or comparable agency charged with the interpretation or
administration thereof, or (b) compliance by Lender (or any lending office of
Lender) with any request or directive of general applicability regarding capital
adequacy (whether or not having the force of law) of any such authority, central
bank or comparable agency, has or would have the effect of reducing the rate of
return on Lender's capital as a consequence of its or Borrower's obligations
hereunder to a level below that which Lender could have achieved but for such
adoption, change or compliance (taking into consideration Lender's policies with
respect to capital adequacy) by an amount reasonably deemed by Lender to be
material, then from time to time, Lender may notify Borrower, which notice shall
include a calculation and a reference to the law, rule or regulation. Within 120
days thereafter, Borrower shall either (i) pay to Lender such additional amount
or amounts as will adequately compensate Lender for such reduction effective
with the 121st day, or (ii) payoff the Loans. Lender will notify Borrower of any
such determination which will entitle Lender to compensation pursuant to this
subsection as promptly as practicable (but in any event within 120 days) after
Lender obtains actual knowledge of the event or condition prompting Lender to
make such determination. A certificate of Lender claiming compensation under
this Section and setting forth the additional amount or amounts to be paid to it
hereunder, together with the description of the manner in which such amounts
have been calculated, shall be prima facie evidence thereof. In determining such
amount, Lender may use any reasonable averaging and attribution methods.
Section 2.9 Repayment of Loans.
(a) All accrued and unpaid interest on the unpaid principal amount of
each Loan shall be payable (i) monthly in arrears on the first day of each
month, commencing with the first full calendar month occurring after the
Effective Date, (ii) on the Revolving Credit Termination Date and (iii) on any
date on which the principal balance of such Loan is due and payable in full.
(b) The aggregate outstanding principal balance of Revolving Loan shall
be due and payable in full on the Revolving Credit Termination Date.
(c) Borrower may, upon at least one Business Day's prior notice to
Lender, prepay any Loan in whole at any time, or from time to time in part in an
amount equal to $100,000.00 or
23
integral multiples of $50,000.00 in excess of that amount, by paying the
principal amount to be prepaid. If Borrower shall prepay the principal of any
LIBOR Loan on any date other than the last day of the Interest Period applicable
thereto, Borrower shall pay the amounts, if any, due under Section 2.7(d).
(d) If at any time the aggregate principal amount of all outstanding
principal balances of LIBOR Loans and Base Rate Loans, together with the
aggregate amount of Letter of Credit Liabilities, exceeds the aggregate amount
of the Commitment, Borrower shall promptly upon demand pay to Lender the amount
of such excess. If at any time the aggregate outstanding principal balances of
LIBOR Loans and Base Rate Loans together with the aggregate amount of all Letter
of Credit Liabilities, exceeds the Maximum Loan Availability, then Borrower
shall, within 10 days of Borrower obtaining actual knowledge of the occurrence
of such excess, deliver to Lender a written plan acceptable to Lender to
eliminate such excess (whether by designation of additional Properties as
Unencumbered Pool Properties, by Borrower repaying an appropriate amount of
Loans, or otherwise). If such excess is not eliminated within 30 days of
Borrower obtaining actual knowledge of the occurrence thereof, then the entire
outstanding principal balance of all Loans and all accrued interest thereon,
together with an amount equal to all Letter of Credit Liabilities for deposit
into the Collateral Account, shall be immediately due and payable in full.
(e) Except to the extent otherwise provided herein, all payments of
principal, interest and other amounts to be made by Borrower under this
Agreement, the Revolving Notes or any other Loan Document shall be made in
Dollars, in immediately available funds, without setoff, deduction or
counterclaim, to Lender at its Lending Office, not later than 11:00 a.m. on the
date on which such payment shall become due (each such payment made after such
time on such due date to be deemed to have been made on the next succeeding
Business Day). All payments to be made by Borrower to the Issuing Bank under
this Agreement or any other Loan Document shall be made in Dollars, in
immediately available funds, without setoff, deduction or counterclaim, to the
Issuing Bank, not later than 11:00 a.m. on the date on which such payment shall
become due (each such payment made after such time on such due date to be deemed
to have been made on the next succeeding Business Day). The parties agree that
if Borrower makes any payment due hereunder after 11:00 a.m. but before 5:00
p.m. on the date such payment is due, such late payment shall not constitute a
Default under Section 9.1(a) but shall nevertheless for all other purposes,
including but not limited to, the calculation of interest and any fees payable
pursuant to Section 3.1, be deemed to have been paid as of the next succeeding
Business Day as provided in the applicable parenthetical phrase of the preceding
sentences. If the due date of any payment under this Agreement or any other Loan
Document would otherwise fall on a day which is not a Business Day such date
shall be extended to the next succeeding Business Day and interest shall be
payable for the period of such extension.
Section 2.10 Voluntary Reductions of the Commitment.
Borrower may terminate or reduce the aggregate unused amount of the
Commitment (for which purpose use of the Commitment shall be deemed to include
the aggregate amount of all Letter of Credit Liabilities) at any time and from
time to time without penalty or premium upon not less than three Business Days
prior notice to Lender of each such termination or reduction, which notice shall
specify the effective date thereof and the amount of any such reduction (which
24
in the case of any partial reduction of the Commitment shall not be less than
$100,000.00 and integral multiples of $50,000.00 in excess of that amount) and
shall be irrevocable once given and effective only upon receipt by Lender;
provided, however, that if Borrower seeks to reduce the Commitment below
$5,000,000.00, then the Commitment shall be reduced to zero and except as
otherwise provided herein, the provisions of this Agreement shall terminate. The
Commitment, once reduced pursuant to this Section, may not be increased.
Borrower shall pay all interest and other costs on the Loans accrued to the date
of such reduction or termination of the Commitment of Lender.
Section 2.11 Credit Sweep Account.
Borrower wishes to establish an automatic debit/credit sweep between
the Revolving Loan and Account No. 4311786339 (the "Sweep Account"). Subject to
the terms of this Section, the terms of the sweep shall be governed by that
certain Master Agreement for Treasury Management Services Agreement, dated May
18, 2000, by and between Borrower and Lender (the "Sweep Agreement"). Borrower
hereby authorizes Lender, at the close of each business day, to make
disbursements from the Loan for deposit into the Sweep Account and/or to
withdraw funds from the Sweep Account to pay, in whole or in part, the
outstanding principal balance on the Revolving Loan. Lender may accept changes
to these instructions only by written request from one of the following persons:
X. Xxxx Xxxxxx, Xxxx Xxxxx and Xxx X'Xxxxx. Borrower hereby represents (i) that
Lender may rely and act upon any written request from any such individuals and
(ii) that the sweep specified above has been duly authorized by all necessary
entity approvals. Borrower further hereby irrevocably grants, pledges and
assigns to Lender, as additional security for the Loan, all monies now or
hereafter deposited in the Sweep Account. Finally, notwithstanding anything in
the Sweep Agreement to the contrary, Borrower agrees that Lender may immediately
terminate the sweep relationship upon any Default under the Loan Documents
and/or, whether or not there has been a Default under the Loan Documents, upon
seven (7) days prior written notice to Borrower.
Section 2.12 Revolving Note.
The obligation of Borrower to repay the Revolving Loan shall, in
addition to this Agreement, be evidenced by the Revolving Note.
Section 2.13 Letters of Credit.
(a) Subject to the terms and conditions of this Agreement including,
without limitation, Section 2.1(b), Lender agrees to cause the Issuing Bank to
issue for the account of Borrower during the period from and including the
Effective Date to, but excluding, the Revolving Credit Termination Date one or
more letters of credit (each a "Letter of Credit") in such form and containing
such terms as may be requested from time to time by Borrower and acceptable to
the Issuing Bank and Lender, up to a maximum aggregate Stated Amount at any one
time outstanding not to exceed the L/C Commitment Amount.
(b) At the time of issuance, the amount, terms and conditions of each
Letter of Credit, and of any drafts or acceptances thereunder, shall be subject
to approval by the Issuing Bank, Lender and Borrower. Notwithstanding the
foregoing, in no event may (i) the expiration date of
25
any Letter of Credit extend beyond the Revolving Credit Termination Date, (ii) a
Letter of Credit have an initial duration in excess of one year, (iii) a Letter
of Credit contain an automatic renewal clause or (iv) a Letter of Credit be
issued within 30 days of the Revolving Credit Termination Date. The initial
Stated Amount of each Letter of Credit shall be at least $100,000.00.
(c) In connection with the proposed issuance of a Letter of Credit,
Borrower shall give Lender written notice (or telephonic notice promptly
confirmed in writing) prior to the requested date of issuance of a Letter of
Credit, such notice to describe in reasonable detail the proposed terms of such
Letter of Credit and the nature of the transactions or obligations proposed to
be supported by such Letter of Credit, and in any event shall set forth with
respect to such Letter of Credit (i) the proposed initial Stated Amount, (ii)
the beneficiary, (iii) whether such Letter of Credit is a commercial or standby
letter of credit and (iv) the proposed expiration date. Borrower shall also
execute and deliver such customary applications and agreements for standby
letters of credit, standby letter of credit agreements, applications for
amendment to letter of credit, and other forms as requested from time to time by
Lender or the Issuing Bank. Provided Borrower has given the notice prescribed by
the first sentence of this subsection and Borrower has executed and delivered to
Lender and the Issuing Bank the agreements, applications and other forms as
required by the immediately preceding sentence of this subsection, and subject
to the terms and conditions of this Agreement, including the satisfaction of any
applicable conditions precedent set forth in Article 5., Lender agrees to cause
the Issuing Bank to issue the requested Letter of Credit on the requested date
of issuance for the benefit of the stipulated beneficiary but in no event prior
to the date five (5) Business Days following the date after which each of Lender
and the Issuing Bank received the items required to be delivered to it under
this subsection. Upon the written request of Borrower, Lender shall deliver to
Borrower a copy of each issued Letter of Credit within a reasonable time after
the date of issuance thereof. To the extent any term of a Letter of Credit
Document is inconsistent with a term of any Loan Document, the term of the
Letter of Credit Document shall control.
(d) Upon receipt by the Issuing Bank from the beneficiary of a Letter
of Credit of any demand for payment under such Letter of Credit, Lender shall
promptly notify Borrower of the amount to be paid by the Issuing Bank as a
result of such demand and the date on which payment is to be made by the Issuing
Bank to such beneficiary in respect of such demand. Borrower hereby
unconditionally and irrevocably agrees to pay and reimburse the Issuing Bank for
the amount of each demand for payment under such Letter of Credit at or prior to
the date on which payment is to be made by the Issuing Bank to the beneficiary
thereunder, without presentment, demand, protest or other formalities of any
kind.
(e) Unless Borrower shall elect to otherwise satisfy such Reimbursement
Obligation, such reimbursement shall, subject to satisfaction of the conditions
in Section 5.1 and Section 5.2 hereof and to the Maximum Loan Availability
(after adjustment to reflect elimination of the corresponding Reimbursement
Obligation), automatically be made by a borrowing under the Revolving Loans.
(f) In examining documents presented in connection with drawings under
Letters of Credit and making payments under such Letters of Credit against such
documents, the Issuing Bank shall only be required to use the same standard of
care as it uses in connection with
26
examining documents presented in connection with drawings under other letters of
credit it has issued and making payments under such other letters of credit.
Borrower assumes all risks of the acts and omissions of, or misuse of the
Letters of Credit by, the respective beneficiaries of such Letters of Credit. In
furtherance and not in limitation of the foregoing, neither the Issuing Bank,
nor Lender shall be responsible (i) for the form, validity, sufficiency,
accuracy, genuineness or legal effects of any document submitted by any party in
connection with the application for and issuance of or any drawing honored under
any Letter of Credit even if it should in fact prove to be in any or all
respects invalid, insufficient, inaccurate, fraudulent or forged; (ii) for the
validity or sufficiency of any instrument transferring or assigning or
purporting to transfer or assign any Letter of Credit, or the rights or benefits
thereunder or proceeds thereof, in whole or in part, which may prove to be
invalid or ineffective for any reason; (iii) for failure of the beneficiary of
any Letter of Credit to comply fully with conditions required in order to draw
upon such Letter of Credit; (iv) for errors, omissions, interruptions or delays
in transmission or delivery of any messages, by mail, cable, telex, telecopy or
otherwise, whether or not they be in cipher; (v) for errors in interpretation of
technical terms; (vi) for any loss or delay in the transmission or otherwise of
any document required in order to make a drawing under any Letter of Credit, or
of the proceeds thereof; (vii) for the misapplication by the beneficiary of any
such Letter of Credit, or the proceeds of any drawing under such Letter of
Credit; and (viii) for any consequences arising from causes beyond the control
of the Issuing Bank or Lender. None of the above shall affect, impair or prevent
the vesting of any of the Issuing Bank's rights or powers hereunder. Any action
taken or omitted to be taken by the Issuing Bank under or in connection with any
Letter of Credit, if taken or omitted in the absence of gross negligence or
willful misconduct, shall not create against the Issuing Bank any liability to
Borrower or Lender. In this connection, the obligation of Borrower to reimburse
the Issuing Bank for any drawing made under any Letter of Credit shall be
absolute, unconditional and irrevocable and shall be paid strictly in accordance
with the terms of this Agreement or any other applicable Letter of Credit
Document under all circumstances whatsoever, including without limitation, the
following circumstances: (i) any lack of validity or enforceability of any
Letter of Credit Document or any term or provisions therein; (ii) any amendment
or waiver of or any consent to departure from all or any of the Letter of Credit
Documents; (iii) the existence of any claim, setoff, defense or other right
which Borrower may have at any time against the Issuing Bank, Lender, any
beneficiary of a Letter of Credit or any other Person, whether in connection
with this Agreement, the transactions contemplated hereby or in the Letter of
Credit Documents or any unrelated transaction; (iv) any breach of contract or
dispute between Borrower, the Issuing Bank, Lender or any other Person; (v) any
demand, statement or any other document presented under a Letter of Credit
proving to be forged, fraudulent, invalid or insufficient in any respect or any
statement therein or made in connection therewith being untrue or inaccurate in
any respect whatsoever; (vi) any non-application or misapplication by the
beneficiary of a Letter of Credit of the proceeds of any drawing under such
Letter of Credit; (vii) payment by the Issuing Bank under the Letter of Credit
against presentation of a draft or certificate which does not strictly comply
with the terms of the Letter of Credit; and (viii) any other act, omission to
act, delay or circumstance whatsoever that might, but for the provisions of this
Section, constitute a legal or equitable defense to or discharge of Borrower's
Reimbursement Obligations.
(g) The issuance by the Issuing Bank of any amendment, supplement or
other modification to any Letter of Credit shall be subject to the same
conditions applicable under this Agreement to the issuance of new Letters of
Credit (including, without limitation, that the
27
request therefor be made through the Issuing Bank), and no such amendment,
supplement or other modification shall be issued unless either (i) the
respective Letter of Credit affected thereby would have complied with such
conditions had it originally been issued hereunder in such amended, supplemented
or modified form or (ii) Lender shall have consented thereto.
(h) Upon the issuance by the Issuing Bank of any Letter of Credit and
until such Letter of Credit shall have expired or been terminated, the
Commitment shall be deemed to be utilized for all purposes of this Agreement in
an amount equal to the Stated Amount of such Letter of Credit plus any related
Reimbursement Obligations then outstanding.
(i) If on the date (the "Facility Termination Date") this Agreement is
terminated (whether voluntarily, by reason of the occurrence of an Event of
Default or otherwise) any Letters of Credit are outstanding, Borrower shall, on
the Facility Termination Date, pay to Lender an amount of money equal to the
Stated Amount of such Letter(s) of Credit, together with the amount of any fees
which would otherwise be payable by Borrower to Lender or the Issuing Bank in
respect of such Letters of Credit but for the occurrence of the Facility
Termination Date for deposit into the Collateral Account. If at any time the
aggregate Stated Amount of all outstanding Letters of Credit shall exceed the
L/C Commitment Amount then in effect, Borrower shall pay to Lender for deposit
into the Collateral Account an amount equal to such excess. If a drawing
pursuant to any such Letter of Credit occurs on or prior to the expiration date
of such Letter of Credit, Borrower authorizes Lender to disburse to the Issuing
Bank the monies deposited in the Collateral Account to make payment to the
beneficiary with respect to such drawing. If no drawing occurs on or prior to
the expiration date of any such Letter of Credit, Lender shall return to
Borrower the monies deposited in the Collateral Account with respect to such
outstanding Letter of Credit on or before the date 10 Business Days after the
expiration date with respect to the Letter of Credit.
(j) If as a result of the adoption of any Applicable Law or guideline
of general applicability regarding capital adequacy, or any change therein, or
any change in the interpretation or administration thereof by any Governmental
Authority, central bank or comparable agency charged with the interpretation or
administration thereof, or if as a result of any risk-based capital guideline or
other requirement heretofore or hereafter issued by any Governmental Authority,
there shall be imposed, modified or deemed applicable any tax, reserve, special
deposit, capital adequacy or similar requirement against or with respect to or
measured by reference to Letters of Credit and the result shall be to increase
the cost to the Issuing Bank of issuing (or of Lender purchasing participations
in) or maintaining its obligation hereunder to issue (or purchase participations
in) any Letter of Credit or reduce any amount receivable by the Issuing Bank or
Lender hereunder in respect of any Letter of Credit, then, upon demand by the
Issuing Bank or Lender, Borrower shall pay immediately to the Issuing Bank or
Lender, as applicable, from time to time as specified by the Issuing Bank or
Lender, such additional amounts as shall be sufficient to compensate the Issuing
Bank or Lender for such increased costs or reductions in amount.
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ARTICLE 3.
GENERAL LOAN PROVISIONS
Section 3.1 Fees.
(a) Upon the execution of this Agreement, Borrower shall pay to the
Lender a credit facility fee equal to $50,000.00.
(b) Borrower agrees to pay to Lender such reasonable fees for services
rendered by Lender as shall be separately agreed upon between Borrower and
Lender. Borrower agrees to pay to the Issuing Bank such reasonable fees for
services rendered by the Issuing Bank as shall be separately agreed upon between
Borrower and the Issuing Bank from time to time.
(c) Borrower agrees to pay to Lender a letter of credit fee at a rate
per annum equal to the product obtained by multiplying the then Applicable
Margin for LIBOR Loans times the Stated Amount of each Letter of Credit on the
date of issuance of such Letter of Credit and on each anniversary of the date of
issuance thereof until such Letter of Credit has expired. The fee provided for
in the immediately preceding sentence shall be nonrefundable. Borrower shall pay
directly to the Issuing Bank from time to time on demand all commissions,
charges, costs and expenses in the amounts customarily charged by the Issuing
Bank from time to time in like circumstances with respect to the issuance of
each Letter of Credit, drawings, amendments and other transactions relating
thereto.
Section 3.2 Computation of Interest and Fees.
Interest on the Loans and the Letter of Credit Liabilities and all fees
shall be computed on the basis of a year of 360 days and paid for the actual
number of days elapsed (including the first day but excluding the last day of a
period).
Section 3.3 Limitation of Interest.
(a) It is expressly stipulated and agreed to be the intent of Borrower
and Lender at all times to comply strictly with the applicable Texas law (or
applicable United States federal law to the extent that it permits Lender to
contract for, charge, take, reserve or receive a greater amount of interest than
under Texas law) governing the maximum rate or amount of interest payable on the
Revolving Note or the Related Indebtedness. If the applicable law is ever
judicially interpreted so as to render usurious any amount (i) contracted for,
charged, taken, reserved or received pursuant to the Revolving Note, any of the
other Loan Documents or any other communication or writing by or between
Borrower and Lender related to the transaction or transactions that are the
subject matter of the Loan Documents, (ii) contracted for, charged or received
by reason of Lender's exercise of the option to accelerate the maturity of the
Revolving Note and/or the Related Indebtedness, or (iii) Borrower will have paid
or Lender will have received by reason of any voluntary prepayment by Borrower
of the Revolving Note and/or the Related Indebtedness, then it is Borrower's and
Lender's express intent that all amounts charged in excess of the Maximum Lawful
Rate shall be automatically canceled, ab initio, and all amounts in excess of
the Maximum Lawful Rate theretofore collected by Lender shall be credited on the
principal balance of the Revolving Note and/or the Related Indebtedness (or, if
the Revolving Note and all Related Indebtedness have been or would thereby be
paid in full,
29
refunded to Borrower), and the provisions of the Revolving Note and the other
Loan Documents immediately be deemed reformed and the amounts thereafter
collectible hereunder and thereunder reduced, without the necessity of the
execution of any new document, so as to comply with the applicable law, but so
as to permit the recovery of the fullest amount otherwise called for hereunder
and thereunder; provided, however, if the Revolving Note has been paid in full
before the end of the stated term of the Revolving Note, then Borrower and
Lender agrees that Lender shall, with reasonable promptness after Lender
discovers or is advised by Borrower that interest was received in an amount in
excess of the Maximum Lawful Rate, either refund such excess interest to
Borrower and/or credit such excess interest against the Revolving Note and/or
any Related Indebtedness then owing by Borrower to Lender. Borrower hereby
agrees that as a condition precedent to any claim seeking usury penalties
against Lender, Borrower will provide written notice to Lender, advising Lender
in reasonable detail of the nature and amount of the violation, and Lender shall
have sixty (60) days after receipt of such notice in which to correct such usury
violation, if any, by either refunding such excess interest to Borrower or
crediting such excess interest against the Revolving Note and/or the Related
Indebtedness then owing by Borrower to Lender. All sums contracted for, charged
or received by Lender for the use, forbearance or detention of any debt
evidenced by the Revolving Note and/or the Related Indebtedness shall, to the
extent permitted by applicable law, be amortized or spread, using the actuarial
method, throughout the stated term of the Revolving Note and/or the Related
Indebtedness (including any and all renewal and extension periods) until payment
in full so that the rate or amount of interest on account of the Revolving Note
and/or the Related Indebtedness does not exceed the Maximum Lawful Rate from
time to time in effect and applicable to the Revolving Note and/or the Related
Indebtedness for so long as debt is outstanding. In no event shall the
provisions of Chapter 346 of the Texas Finance Code (which regulates certain
revolving credit loan accounts and revolving triparty accounts) apply to the
Revolving Note and/or the Related Indebtedness. Notwithstanding anything to the
contrary contained herein or in any of the other Loan Documents, it is not the
intention of Lender to accelerate the maturity of any interest that has not
accrued at the time of such acceleration or to collect unearned interest at the
time of such acceleration. Borrower and Lender hereby agree that any and all
suits alleging the contracting for, charging or receiving of usurious interest
shall lie in Xxxxxx County, Texas, and each irrevocably waives the right to
venue in any other county.
(b) As used herein, the term "Maximum Lawful Rate" shall mean the
maximum lawful rate of interest which may be contracted for, charged, taken,
received or reserved by Lender in accordance with the applicable laws of the
State of Texas (or applicable United States federal law to the extent that it
permits Lender to contract for, charge, take, receive or reserve a greater
amount of interest than under Texas law), taking into account all Charges (as
herein defined) made in connection with the transaction evidenced by the
Revolving Note and the other Loan Documents. As used herein, the term "Charges"
shall mean all fees, charges and/or any other things of value, if any,
contracted for, charged, received, taken or reserved by Lender in connection
with the transactions relating to the Revolving Note and the other Loan
Documents, which are treated as interest under applicable law. As used herein,
the term "Related Indebtedness" shall mean any and all debt paid or payable by
Borrower to Lender pursuant to the Loan Documents or any other communication or
writing by or between Borrower and Lender related to the transaction or
transactions that are the subject matter of the Loan Documents, except such debt
which has been paid or is payable by Borrower to Lender under the Revolving
Note.
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(c) To the extent that Lender is relying on Chapter 303 of the Texas
Finance Code to determine the Maximum Lawful Rate payable on the Revolving Note
and/or the Related Indebtedness, Lender will utilize the weekly ceiling from
time to time in effect as provided in such Chapter 303, as amended. To the
extent United States federal law permits Lender to contract for, charge, take,
receive or reserve a greater amount of interest than under Texas law, Lender
will rely on United States federal law instead of such Chapter 303 for the
purpose of determining the Maximum Lawful Rate. Additionally, to the extent
permitted by applicable law now or hereafter in effect, Lender may, at its
option and from time to time, utilize any other method of establishing the
Maximum Lawful Rate under such Chapter 303 or under other applicable law by
giving notice, if required, to Borrower as provided by applicable law now or
hereafter in effect.
(d) Notwithstanding anything in the Revolving Note to the contrary, if
at any time (i) the interest rate provided for under the Revolving Note or any
other Loan Document (the "Stated Rate"), and (ii) the Charges computed over the
full term of the Revolving Note, exceed the Maximum Lawful Rate, then the rate
of interest payable hereunder, together with all Charges, shall be limited to
the Maximum Lawful Rate; provided, however, that any subsequent reduction in the
Stated Rate shall not cause a reduction of the rate of interest payable
hereunder below the Maximum Lawful Rate until the total amount of interest
earned hereunder, together with all Charges, equals the total amount of interest
which would have accrued at the Stated Rate if such interest rate had at all
times been in effect. Changes in the Stated Rate resulting from a fluctuations
in the rates used to calculate the Stated Rate shall be subject to the
provisions of this paragraph.
Section 3.4 Statements of Account.
Lender will account to Borrower monthly with a statement of Loans,
charges and payments made pursuant to this Agreement and the other Loan
Documents, and such account rendered by Lender shall be prima facie evidence
thereof. The failure of Lender to maintain or deliver such a statement of
accounts shall not relieve or discharge Borrower from its obligations hereunder.
Section 3.5 Lender's Reliance.
Neither Lender, nor the Issuing Bank, shall incur any liability to
Borrower for acting upon any telephonic notice permitted under this Agreement
which Lender or the Issuing Bank believes reasonably and in good faith to have
been given by an individual authorized to deliver a Notice of Borrowing, Notice
of Conversion, Notice of Continuation, a request for issuance of a Letter of
Credit or an Extension Request on behalf of Borrower.
ARTICLE 4.
UNENCUMBERED POOL PROPERTIES
Section 4.1 Acceptance of Unencumbered Pool Properties
(a) Existing Unencumbered Pool Properties. Subject to compliance with
the terms and conditions of Section 5.1, Lender has accepted the Properties
listed on Schedule 4.1 as of the date hereof as Unencumbered Pool Properties.
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(b) Submission of Additional Properties. If Borrower desires that
Lender accept an additional Property as an Unencumbered Pool Property, Borrower
shall so notify Lender in writing. No Property will be evaluated by Lender
unless it is an Eligible Property, and unless and until Borrower delivers to
Lender the following, in form and substance satisfactory to Lender:
(i) An Executive Investment Summary in a form acceptable to
the Lender;
(ii) An Unencumbered Pool Certificate setting forth (A) on a
pro forma basis the Maximum Loan Availability, assuming that such
Property is accepted as an Unencumbered Pool Property; (B) the
Occupancy Rate of such Property, and (C) the aggregate Occupancy Rate
of all Unencumbered Pool Properties, assuming that such Property is
accepted as an Unencumbered Pool Property; and
(iii) Copies of most recent environmental report, Borrower's
current title policy and a current survey applicable to such Property
to the extent same are available to Borrower; and
(iv) An Eligibility Certificate executed by the chief
financial officer or controller of Borrower (which officer shall be
authorized to execute such certificate) in the form of Exhibit H
attached hereto.
Following receipt of the foregoing items (i) through (iii) for such Property,
Lender will, within thirty (30) days after receipt of, review such documents and
information from Borrower (the "Review Period") take one of the following
actions: (I) notify Borrower of Lender's approval of the Property as an
Unencumbered Pool Property or (II) request from Borrower further information
relating to such Property in accordance with the following paragraph. If none of
the foregoing actions is taken by Lender prior to the expiration of the Review
Period, Lender shall be deemed to have accepted such Property as an Unencumbered
Pool Property.
At any time during the Review Period, Lender may request that Borrower
furnish additional information regarding the additional property. If a request
is made for such further information by Lender during the Review Period,
Borrower shall promptly (but in any event within ten (10) days of receipt of
such request) deliver the requested information to Lender. Lender shall then
have twenty (20) days (the "Extended Review Period") after receipt from Borrower
of the requested information to notify Borrower of its acceptance or rejection
of such Property. If Lender notifies the Borrower of its rejection of such
Property, such Property shall not be accepted as an Unencumbered Pool Property
under this subsection (b). If Lender fails to notify Borrower prior to the
expiration of the Extended Review Period, Lender shall be deemed to have
accepted such Property as Unencumbered Pool Property.
Section 4.2 Termination of Designation as Unencumbered Pool Property.
From time to time Borrower may request, upon not less than 30 days
prior written notice to Lender, that an Unencumbered Pool Property cease to be
an Unencumbered Pool Property. Lender shall grant such request if all of the
following conditions are satisfied:
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(a) no Default or Event of Default shall have occurred and be
continuing both at the time of such request and immediately after giving effect
to such request; and
(b) Borrower shall have delivered to Lender an Unencumbered Pool
Certificate demonstrating on a pro forma basis, and Lender shall have
determined, that the outstanding principal balance of the Loans, together with
the aggregate amount of Letter of Credit Liabilities, will not exceed the
Maximum Loan Availability after giving effect to such request and any prepayment
to be made and/or the acceptance of any Property as an additional or replacement
Unencumbered Pool Property to be given concurrently with such request.
Section 4.3 Additional Requirements of Unencumbered Pool Properties.
(a) The aggregate Occupancy Rate of all Unencumbered Pool Properties,
when determined on a combined basis, shall at all times equal or exceed 90% and
no single Unencumbered Pool Property shall have an Occupancy Rate of less than
80%.
(b) A Property shall cease to be an Unencumbered Pool Property if it
shall cease to be an Eligible Property.
(c) If a tenant of an Unencumbered Pool Property, while paying rent,
has not actually occupied the Property for 90 days, such Tenant's space shall,
for the purpose of determining Occupancy Rate, be deemed unoccupied.
(d) No single-tenant Unencumbered Pool Property (other than those
leased by Footstar) shall constitute greater than 10% of the total value of the
Unencumbered Pool Properties, and no single-tenant Unencumbered Pool Property
leased by Footstar shall constitute greater than 15% of the total value of the
Unencumbered Pool Properties.
(e) No multi-tenant Unencumbered Pool Property shall constitute greater
than 15% of the total value of the Unencumbered Pool Properties.
(f) No single tenant (other than Footstar) leasing one or more of the
Unencumbered Pool Properties can be the source of Net Operating Income which is
greater than 10% of the aggregate Net Operating Income for all Unencumbered Pool
Properties, and Footstar shall not be the source of Net Operating Income which
is greater than 15% of the aggregate Net Operating Income for all Unencumbered
Pool Properties.
ARTICLE 5.
CONDITIONS
Section 5.1 Conditions Precedent to Effectiveness.
The effectiveness of this Agreement and the obligation of Lender to
make any Loans to Borrower or to cause the Issuing Bank to issue any Letters of
Credit in accordance with the terms hereof are subject to the condition
precedent that Borrower deliver to Lender each of the following, each of which
shall be in form and substance reasonably satisfactory to Lender:
33
(a) counterparts of this Agreement and all other Loan Documents
executed by the parties hereto;
(b) the Revolving Note executed by Borrower, payable to Lender and
complying with the terms of Section 2.12;
(c) the Guaranty executed by each Guarantor;
(d) an opinion of counsel to the Loan Parties, and addressed to Lender
in substantially the form of Exhibit F;
(e) a certified copy of the Bylaws of Borrower;
(f) a certificate of incumbency signed by the Secretary or Assistant
Secretary of Borrower with respect to each of the officers of Borrower
authorized to execute and deliver the Loan Documents to which Borrower is a
party;
(g) certified copies (certified by the Secretary or Assistant Secretary
of Borrower) of all action taken by Borrower's Board of Directors to authorize
the execution, delivery and performance of the Loan Documents to which it is a
party;
(h) certified copy (certified by the Secretary or Assistant Secretary
of Borrower) of the Amended and Restated Declaration of Trust of Borrower as
filed in Xxxxxx County, Texas;
(i) the articles of incorporation, articles of organization,
certificate of limited partnership or other comparable organizational instrument
(if any) of each Guarantor certified as of a recent date by the Secretary of
State of the State of formation of such Guarantor;
(j) a Certificate of Good Standing or certificate of similar meaning
with respect to each Guarantor issued as of a recent date by the Secretary of
State of the State of formation of each such Guarantor and certificates of
qualification to transact business or other comparable certificates issued by
each Secretary of State (and any state department of taxation, as applicable) of
each state in which each such Guarantor is required to be so qualified;
(k) a certificate of incumbency signed by the Secretary or Assistant
Secretary (or other individual performing similar functions) of each Guarantor
with respect to each of the officers of such Guarantor authorized to execute and
deliver the Loan Documents to which such Guarantor is a party;
(l) copies certified by the Secretary or Assistant Secretary of each
Guarantor (or other individual performing similar functions) of (i) the by-laws
of such Guarantor, if a corporation, the operating agreement, if a limited
liability company, the partnership agreement, if a limited or general
partnership, or other comparable document in the case of any other form of legal
entity and (ii) all corporate, partnership, member or other necessary action
taken by such Guarantor to authorize the execution, delivery and performance of
the Loan Documents to which it is a party;
(m) an Unencumbered Pool Certificate calculated as of the date hereof;
34
(n) the fees then due under Section 3.1;
(o) such other documents and instruments as Lender may reasonably
request.
Section 5.2 Conditions Precedent to Loans and Issuance of Letters of
Credit.
The obligation of Lender to make any Loans or to cause the Issuing Bank
to issue Letters of Credit is subject to the condition precedent that the
following conditions be satisfied in the judgment of Lender:
(a) in the case of Loans, timely receipt by Lender of a Notice of
Borrowing;
(b) the proposed use of proceeds of such Loans or proposed use of such
Letter of Credit, as the case may be, set forth in the Notice of Borrowing is
consistent with the provisions of Section 7.8.;
(c) Since the date of the most recent financial statements of Borrower
or Guarantors delivered to Lender, nothing shall have occurred which would or
could have a Materially Adverse Effect on Borrower or any Guarantor;
(d) immediately before and after the making of such Loans or the
issuance of such Letter of Credit, as applicable, no Default (including without
limitation the existence of the condition described in Section 2.1(b)) or Event
of Default shall have occurred and be continuing; and
(e) the representations and warranties of Borrower and the other Loan
Parties contained in this Agreement and the other Loan Documents to which any of
them is a party shall be true in all material respects on and as of the date of
the making of such Loans or issuance of such Letter of Credit, as applicable,
except to the extent such representations or warranties specifically relate to
an earlier date or such representations or warranties become untrue by reason of
events or conditions otherwise permitted hereunder and the other Loan Documents.
The delivery of each Notice of Borrowing, the making of each Loan and the
issuance of each Letter of Credit shall constitute a certification by Borrower
to Lender and the Issuing Bank that the statements in the immediately preceding
clauses (b) through (e) are true.
ARTICLE 6.
REPRESENTATIONS AND WARRANTIES
Borrower represents and warrants, to the best of its knowledge and
belief (limited to the current actual knowledge, after due inquiry, of X. Xxxx
Xxxxxx, Xxxx Xxxxx and Xxx X'Xxxxx), to Lender and the Issuing Bank as follows:
Section 6.1 Existence and Power.
Borrower is a Texas Real Estate Investment Trust duly formed and
validly existing under the laws of the State of Texas and is qualified as a real
estate investment trust under Section 856 of the Internal Revenue Code. Each of
Borrower's Subsidiaries is a corporation or other
35
applicable legal entity, duly organized, validly existing and in good standing
under the laws of the jurisdiction of its incorporation or formation. Each of
Borrower and its Subsidiaries has all requisite power and authority and all
governmental licenses, authorizations, consents and approvals required to carry
on its business as now conducted and is duly qualified and is in good standing
as a foreign corporation or other applicable legal entity, and authorized to do
business, in each jurisdiction in which the character of its properties or the
nature of its business requires such qualification or authorization except where
the failure to be so qualified or authorized would not have a Materially Adverse
Effect.
Section 6.2 Ownership Structure.
Schedule 6.2. correctly sets forth the corporate structure and
ownership interests of Borrower and all of its Subsidiaries as of the date
hereof, including the correct legal name of Borrower and each such Subsidiary,
and Borrower's relative equity interest in each such Subsidiary.
Section 6.3 Authorization of Agreement, Revolving Notes, Loan Documents
and Borrowings.
Each Loan Party has the right and power, and has taken all necessary
action to authorize it, to borrow hereunder (in the case of Borrower) and to
execute, deliver and perform the Loan Documents to which it is or is to be a
party, in accordance with their respective terms and to consummate the
transactions contemplated. Each of the Loan Documents has been (and when
executed and delivered in connection with this Agreement will be) duly executed
and delivered by the duly authorized officers of each Loan Party a party thereto
and each is (and each other Loan Document when executed and delivered in
connection with this Agreement will be) a legal, valid and binding obligation of
such Loan Party enforceable against such Loan Party in accordance with its
respective terms, except as the same may be limited by bankruptcy, insolvency,
and other similar laws affecting the rights of creditors generally and the
availability of equitable remedies for the enforcement of certain obligations
(other than the payment of principal) contained herein or therein may be limited
by equitable principles generally.
Section 6.4 Compliance of Agreement, Revolving Notes, Loan Documents
and Borrowing with Laws, etc.
The execution, delivery and performance of the Loan Documents in
accordance with their respective terms and the borrowing of Loans hereunder do
not and will not, by the passage of time, the giving of notice or otherwise (a)
require any Governmental Approval, or violate any Applicable Law relating to any
Loan Party, the failure to possess or to comply with which would have a
Materially Adverse Effect; (b) conflict with, result in a breach of or
constitute a default under the declaration of trust of Borrower, the articles of
incorporation, articles of organization, partnership agreement or other
comparable instrument of any other Loan Party, or any indenture, agreement or
other instrument to which any Loan Party is a party or by which it or any of its
properties may be bound and the violation of which would have a Materially
Adverse Effect; or (c) result in or require the creation or imposition of any
Lien upon or with respect to any Unencumbered Pool Property other than Permitted
Liens.
36
Section 6.5 Compliance with Law; Governmental Approvals.
Each of Borrower and its Subsidiaries is in compliance with each
Governmental Approval applicable to it and in compliance with all other
Applicable Law relating to it, except for noncompliances which, and Governmental
Approvals the failure to possess which, would not, singly or in the aggregate,
cause a Default or Event of Default or have a Materially Adverse Effect and in
respect of which (if Borrower has actual knowledge of such Applicable Law or
Governmental Approval) adequate reserves have been established on the books of
Borrower or such Subsidiary, as applicable.
Section 6.6 Indebtedness and Guarantees.
Schedule 6.6. is a complete and correct listing of all Indebtedness and
Guarantees of Borrower and the other Loan Parties as of the date hereof. Each
Loan Party has performed and is in compliance with all of the terms of such
Indebtedness and such Guarantees and all instruments and agreements relating
thereto in all material respects, and no default or event of default, or event
or condition which with the giving of notice, the lapse of time or otherwise,
would constitute such a default or event of default, exists with respect to any
such Indebtedness or Guarantees.
Section 6.7 Property Management Agreements and Other Major Agreements.
Schedule 6.7 sets forth all Property Management Agreements and other
Major Agreements to which Borrower is a party or otherwise relating to any of
the Unencumbered Pool Properties as of the date hereof. All Property Management
Agreements and other Major Agreements are in full force and effect and to
Borrower's knowledge no default or event of default exists under any of such
agreements.
Section 6.8 Absence of Defaults.
Neither Borrower nor any Guarantor is in default under its declaration
of trust, articles of incorporation, bylaws, operating agreement, partnership
agreement or other organizational or constituent document, and no event has
occurred, which has not been remedied, cured or waived (a) which constitutes a
Default or an Event of Default; or (b) which constitutes, or which with the
passage of time, the giving of notice or otherwise, would constitute, a default
or event of default by Borrower, any Guarantor or any other Loan Party under any
material agreement (other than this Agreement) or judgment, decree or order to
which Borrower, any Guarantor or any other Loan Party is a party or by which
Borrower or any of its properties may be bound.
Section 6.9 Financial Information.
The consolidated balance sheets of Borrower as of June 30, 2003 and the
related statements of earnings, stockholders' equity and cash flows for the
three month period, then ending, copies of which have been delivered to Lender,
fairly present, in conformity with GAAP, the financial position of Borrower and
its Subsidiaries, on a consolidated basis, as of such date and its results of
operations and cash flows for such fiscal period. Since June 30, 2003, and with
reference to such date, no change has occurred which could or would have a
Materially Adverse Effect.
37
Section 6.10 Litigation.
There is no action, suit or proceeding pending against, or to the
knowledge of Borrower threatened against or affecting, Borrower or any of its
Subsidiaries before any court or arbitrator or any governmental body, agency or
official (a) which would reasonably be expected to have a Materially Adverse
Effect or (b) which in any manner draws into question the validity of any Loan
Document.
Section 6.11 ERISA.
No Loan Party maintains, and has at any time maintained, any Plan
subject to the provisions of ERISA and is, and has at any time been, a member of
any ERISA Group with any Person that has at any time maintained any such Plan.
Section 6.12 Taxes.
(a) As of the date hereof, no United States Federal income tax returns
of the "affiliated group" (as defined in the Internal Revenue Code) of which
Borrower is a member have been examined and closed. The members of such
affiliated group have filed all United States Federal income tax returns and all
other material tax returns which are required to be filed by them and have paid
all taxes due pursuant to such returns or pursuant to any assessment received by
any of them except for taxes being contested in good faith by appropriate
proceedings and for which appropriate reserves have been established. The
charges, accruals and reserves on the books of Borrower in respect of taxes or
other governmental charges are, in the opinion of Borrower, adequate.
(b) Borrower is in compliance with all conditions imposed under the
Internal Revenue Code to allow Borrower to maintain its status as a REIT.
Section 6.13 Investment Company Act; Public Utility Holding Company
Act.
Neither Borrower nor any of its Subsidiaries is (a) an "investment
company" or a company "controlled" by an "investment company" within the meaning
of the Investment Company Act of 1940, as amended, (b) 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", within the meaning
of the Public Utility Holding Company Act of 1935, as amended, or (c) subject to
any other Applicable Law which purports to regulate or restrict its ability to
borrow money or to consummate the transactions contemplated by this Agreement or
the other Loan Documents or to perform its obligations hereunder or thereunder.
Section 6.14 Full Disclosure.
All written information furnished by or on behalf of Borrower to Lender
or Issuing Bank for purposes of or in connection with this Agreement and the
other Loan Documents or any transaction contemplated hereby is, and all such
information hereafter furnished by or on behalf of Borrower or any Subsidiary to
Lender or Issuing Bank will be, true and accurate in all material respects on
the date as of which such information is stated or certified and does not, and
will not, fail to state any material facts necessary to make the statements
contained therein not
38
misleading. Borrower has disclosed to Lender in writing any and all facts known
to Borrower which, to the extent Borrower can now reasonably foresee, could or
would have a Materially Adverse Effect.
Section 6.15 Insurance.
Schedule 6.15. sets forth a true and correct description of the
insurance coverage maintained by or on behalf of each Loan Party currently in
effect.
Section 6.16 Not Plan Assets.
The respective assets of Borrower and each other Loan Party do not and
will not constitute "plan assets" within the meaning of ERISA, the Internal
Revenue Code and the respective regulations promulgated thereunder, of any ERISA
Plan or Non-ERISA Plan. The execution, delivery and performance of this
Agreement, and the borrowing and repayment of amounts thereunder, do not and
will not constitute "prohibited transactions" under ERISA or the Internal
Revenue Code.
Section 6.17 Title and Liens.
Each of Borrower and its Subsidiaries has good, indefeasible and legal
title to, or a valid leasehold interest in, (a) its respective Properties and
(b) its other assets, except in the case of this clause (b) where the failure to
have such title to its other assets could not reasonably be expected to have a
Materially Adverse Effect. Each of the Unencumbered Pool Properties is free and
clear of all Liens except for Permitted Liens.
Section 6.18 Unencumbered Pool Properties.
Each of the Unencumbered Pool Properties qualifies as an Eligible
Property.
Section 6.19 Margin Stock.
Neither Borrower nor any of its Subsidiaries is engaged principally in
the business of extending credit for the purpose of purchasing or carrying
"margin stock" within the meaning of Regulation T, U or X.
Section 6.20 Solvency.
Borrower and the other Loan Parties are Solvent and will remain Solvent
after giving effect to the execution and delivery of each Loan Document to which
any is a party, the initial disbursement of Loans hereunder and the payment and
accrual of all fees then payable under this Agreement or any of the other Loan
Documents.
Section 6.21 Tax Shelter Regulations.
Neither the Borrower, any Guarantor, any non-borrower trustor, nor any
Subsidiary of any of the foregoing intends to treat the Revolving Loan or the
transactions contemplated by this Agreement and other Loan Documents as being a
"reportable transaction" (within the meaning of
39
Treasury Regulation Section 1.6011-4). If the Borrower, or any other Loan Party
determines to take any action inconsistent with such intention, the Borrower
will promptly notify the Lender thereof. If the Borrower so notifies the Lender,
the Borrower acknowledges that Lender may treat the Revolving Loan as part of a
transaction that is subject to Treasury Regulation Section 301.6112-1, and
Lender will maintain the lists and other records, including the identity of the
applicable Loan Party as required by such Treasury Regulation.
ARTICLE 7.
COVENANTS
Borrower agrees that, so long as Lender has any Commitment hereunder or
any Obligation remains unpaid:
Section 7.1 Information.
Borrower will deliver to Lender:
(a) as soon as available and in any event within 90 days after the
end of each fiscal year of Borrower, a consolidated balance sheet of Borrower as
of the end of such fiscal year and the related consolidated statements of funds
from operations, earnings, cash flows for such fiscal year, setting forth in
each case in comparative form the figures for the previous fiscal year, all
(other than any statement of funds from operations) prepared in a manner
acceptable to Lender by independent public accountants of nationally recognized
standing acceptable to Lender, together with internally prepared cash flow
projections for the ensuing fiscal year reported in a manner acceptable to
Lender;
(b) as soon as available and in any event within 45 days after the
end of each of the first three fiscal quarters of each fiscal year of Borrower,
a consolidated balance sheet of Borrower as of the end of such quarter and the
related consolidated statements of funds from Operations or earnings,
stockholders' equity, cash flows for such quarter and for the portion of
Borrower's fiscal year ended at the end of such quarter, together with forward
looking cash flow and balance sheet projections for the next four fiscal
quarters of Borrower, setting forth in comparative form the figures for the
corresponding quarter and the corresponding portion of Borrower's previous
fiscal year, all certified (subject to normal year-end adjustments) as to
fairness of presentation, GAAP (subject to absence of full footnote disclosures
and other than the statement of funds from operations) and consistency by the
chief financial officer or controller of Borrower (which officer shall be
authorized to so certify such statements);
(c) simultaneously with the delivery of each set of financial
statements referred to in the immediately preceding clauses (a) and (b), a
certificate of the chief financial officer or controller of Borrower (which
officer shall be authorized to execute such certificate) (i) setting forth in
reasonable detail the calculations required to establish whether Borrower was in
compliance with the requirements of Article 8 on the date of such financial
statements, (ii) stating whether any Default or Event of Default is known to
Borrower on the date of such certificate and, if any Default or Event of Default
is then known to Borrower, setting forth the details thereof and the action
which Borrower is taking or proposes to take with respect thereto,
40
and (iii) setting forth a schedule of all Contingent Obligations of Borrower as
of the date of such financial statements;
(d) as soon as available and in any event within 45 days after the
end of each fiscal quarter of Borrower, an Unencumbered Pool Certificate setting
forth the information to be contained therein as of the last day of such fiscal
quarter;
(e) within 45 days after the end of each fiscal quarter of
Borrower, a summary statement of Net Operating Income and occupancy rates for
each Unencumbered Pool Property; provided, as to any specific Property, Lender
shall have the right to require Borrower to deliver such information on a
monthly basis;
(f) within 45 days after the end of each fiscal quarter of
Borrower, a current rent roll for each Unencumbered Pool Property; provided, as
to any specific Property, Lender shall have the right to require Borrower to
deliver such information on a monthly basis;
(g) within 45 days after the beginning of each calendar year, a
projected cash flow statement of Borrower and its Subsidiaries, in a form
satisfactory to Lender, for such calendar year, prepared on a quarterly basis
and setting forth the estimates and assumptions (including without limitation,
with respect to costs, revenues, general economic conditions, seasonal
variations, financial and market conditions and results of operations) on which
such projections are based;
(h) no later than 30 days before the end of each fiscal year of
Borrower, a property budget for each Unencumbered Pool Property for the coming
fiscal year of Borrower;
(i) promptly upon receipt thereof, copies of all management
reports relating to the financial condition of Borrower submitted to Borrower or
its Board of Trustees by Borrower's independent public accountants;
(j) within ten days after X. Xxxx Xxxxxx, Xxxx Xxxxx, Xxx X'Xxxxx
or other officer of Borrower with the rank of Executive Vice President or higher
obtains knowledge of any Default or Event of Default, a certificate of the chief
financial officer or controller of Borrower setting forth the details thereof
and the action which Borrower is taking or proposes to take with respect
thereto;
(k) promptly upon the mailing thereof to the shareholders of
Borrower generally, copies of all financial statements, reports, offering
memoranda and proxy statements so mailed;
(l) promptly upon the filing thereof, copies of all registration
statements (other than the exhibits thereto and any registration statements on
Form S-8 or its equivalent), reports on Forms 10-K, 10-Q and 8-K (or their
equivalents) and all other periodic reports, if any, which Borrower or any of
its Subsidiaries which it directly or indirectly controls shall file with the
Securities and Exchange Commission (or any Governmental Authority substituted
therefor) or any national securities exchange;
(m) if requested by Lender, promptly upon the release thereof,
copies of all press releases of Borrower and any of its Subsidiaries which it
directly or indirectly controls;
41
(n) promptly upon obtaining knowledge thereof, a description in
reasonable detail of (i) any action, suit or proceeding commenced against
Borrower, any of its Subsidiaries or any of the Unencumbered Pool Properties
which is reasonably likely to have a Materially Adverse Effect, and (ii) any
change which would or could have a Materially Adverse Effect on any of the
Unencumbered Pool Properties, including, without limitation, any contract or
agreement regarding the sale, transfer, mortgage or other encumbrance relating
thereto or any default of any major tenant under any lease thereof;
(o) within 45 days after the end of each fiscal quarter of
Borrower, any change in the composition of Borrower's board of trustees and
prompt written notice of any change in the senior management personnel of
Borrower;
(p) written notice of the acquisition, incorporation or other
creation of any Subsidiary after the date hereof, such notice to be given within
10 Business Days of such acquisition, incorporation or other creation; and
(q) from time to time such additional information regarding the
financial position or business of Borrower and its Subsidiaries or any Property
as Lender may reasonably request.
Section 7.2 Payment of Obligations.
Borrower will pay and discharge, and will cause each Subsidiary to pay
and discharge, at or before maturity, all their respective material obligations
and liabilities, including, without limitation, tax liabilities, except where
the same may be contested in good faith by appropriate proceedings unless the
contest thereof would have a Materially Adverse Effect, and will maintain, and
will cause each Subsidiary to maintain, in accordance with GAAP, appropriate
reserves for the accrual of any of the same. Borrower has paid or will pay (or
has caused to be paid or will be caused to be paid) in full (except for such
retainages as may be permitted or required by any Applicable Law to be withheld
pending completion of any improvements) all sums by Borrower or its Subsidiaries
owing or claimed from Borrower or such Subsidiaries for labor, material,
supplies, personal property (whether or not a fixture) and services of every
kind and character used, furnished or installed in or on any Pool Property and
no claim for same exists or will be permitted to be created, except where the
same may be contested in good faith by appropriate proceedings unless the
contest thereof would have a Materially Adverse Effect, and will maintain, and
will cause each Subsidiary to maintain, in accordance with GAAP, appropriate
reserves for the accrual of any of the same.
Section 7.3 Maintenance of Property; Insurance.
(a) Borrower will keep, and will cause each Subsidiary to keep,
all property useful and necessary in its business in good working order and
condition, ordinary wear and tear and insured casualty losses excepted.
(b) Borrower will maintain, and will cause each Subsidiary to
maintain insurance coverage in such amounts and with respect to such risks as is
consistent with insurance maintained by businesses of comparable type and size
in the industry. Borrower may cause such insurance to be provided by the tenant
of a Property. In addition to the foregoing, Borrower shall maintain insurance
as may be required under the other Loan Documents. Borrower will deliver
42
to Lender (i) upon request of Lender from time to time full information as to
the insurance carried, (ii) within five days of receipt of notice from any
insurer a copy of any notice of cancellation or material change in coverage from
that existing on the date of this Agreement and (iii) forthwith, notice of any
cancellation or nonrenewal of coverage by Borrower.
Section 7.4 Conduct of Business; Maintenance of Existence;
Qualification; Amendment of Declaration of Trust.
(a) Borrower will only engage in the business of acquiring,
developing, owning, managing and operating single-tenant and multi-tenant retail
properties, together with related business activities and investments incidental
thereto.
(b) Subject to Section 7.7, Borrower will preserve, renew and keep
in full force and effect, and will cause each Subsidiary to preserve, renew and
keep in full force and effect their respective existence and their respective
rights, privileges and franchises necessary or desirable in the normal conduct
of business; provided that nothing in this Section shall prohibit (i) the merger
of a Subsidiary into Borrower or the merger or consolidation of a Subsidiary
with or into another Person if the corporation surviving such consolidation or
merger is a Subsidiary and if, in each case, after giving effect thereto, no
Default or Event of Default shall have occurred and be continuing, and (ii) the
dissolution of a Subsidiary if (A) Borrower's board of trustees has determined
that such dissolution is in the best interest of Borrower, (B) such dissolution
will not be materially disadvantageous to Lender and (C) such dissolution will
not have a Materially Adverse Effect.
(c) Borrower will, and will cause each Subsidiary to, qualify and
remain qualified and authorized to do business in each jurisdiction in which the
character of its properties or the nature of its business requires such
qualification or authorization and where the failure to be so qualified or
authorized would have a Materially Adverse Effect.
(d) Borrower shall not amend, supplement, restate or otherwise
modify its declaration of trust without the prior written consent of Lender
unless such amendment, supplement or other modification (i) is required under or
as a result of the Internal Revenue Code or other Applicable Law, (ii) is
required or prudent to maintain Borrower's status as a REIT, or (iii) does not
affect the operation or management of Borrower, the rights and obligations of
any party thereto or any other material provision of the document.
Section 7.5 Compliance with Laws.
Borrower will comply, and cause each Subsidiary to comply, with all
Applicable Laws, including without limitation, all Environmental Laws and ERISA
and the rules and regulations thereunder, except where compliance therewith is
contested in good faith by appropriate proceedings or the failure to so comply
would not have a Materially Adverse Effect.
Section 7.6 Inspection of Property, Books and Records.
Borrower will keep, and will cause each Subsidiary to keep, proper
books of record and account in which full, true and correct entries shall be
made of all dealings and transactions in relation to its business and
activities; and will permit, and will cause each Subsidiary to permit,
43
representatives of Lender to visit and inspect any of their respective
properties, to examine and make abstracts from any of their respective books and
records and to discuss their respective affairs, finances and accounts with
their respective officers, employees and independent public accountants in
Borrower's presence prior to an Event of Default, all at such reasonable times
during business hours and as often as may reasonably be desired and with
reasonable notice so long as no Event of Default shall have occurred and be
continuing. All inspections of Properties are subject to the rights of tenants
in possession of the Properties.
Section 7.7 Consolidations, Mergers, Acquisitions and Sales of
Assets.
Borrower shall not, and shall not permit any Subsidiary to (a)
consolidate or merge with or into, acquire a Substantial Amount of the assets
of, or make any Investment of a Substantial Amount in, any other Person or (b)
sell, lease or otherwise transfer, directly or indirectly, and whether by one or
a series of related transactions, a Substantial Amount of its assets (including
capital stock or other securities of Subsidiaries) to any other Person without
the prior written consent of Lender, which consent will not be unreasonably
withheld or delayed and (i) after giving effect thereto, no Default or Event of
Default shall have occurred and be continuing; (ii) in the case of a
consolidation or merger by Borrower or a Subsidiary, Borrower or such
Subsidiary, as applicable, is the survivor thereof and (iii) at the time
Borrower requests Lender's consent, Borrower shall have delivered to Lender a
Compliance Certificate, calculated on a pro forma basis, evidencing Borrower's
continued compliance with the terms and conditions of this Agreement and the
other Loan Documents, including without limitation, the financial covenants
contained in Article 8, after giving effect to such consolidation, merger,
acquisition, Investment, sale, lease or other transfer.
Section 7.8 Use of Proceeds and Letters of Credit.
Borrower will only use the proceeds of the Loans made under this
Agreement (a) for the payment of pre-development and development costs incurred
in connection with a Development Property; (b) to finance acquisitions permitted
under Section 8.6; (c) to finance the repayment of Indebtedness of Borrower; (d)
to finance acquisitions of unimproved real estate intended to become a
Development Property; (e) to make Investments permitted by this Agreement; (f)
to finance tenant improvements at the Properties and (g) to provide for the
general working capital needs of Borrower. Borrower will not use any proceeds of
the Loans for the purpose of purchasing or carrying any "margin stock" within
the meaning of Regulations T, U and X if such use would result in a violation of
any of Regulations T, U and X. Borrower will use the Letters of Credit only for
the same purposes for which it may use the proceeds of Loans.
Section 7.9 Major Agreements.
Borrower shall, and shall cause each other Loan Party to, duly and
punctually perform and comply with any and all material representations,
warranties, covenants and agreements expressed as binding upon Borrower or such
other Loan Party under any Major Agreement. Without Lender's prior written
consent, Borrower shall not do or knowingly permit to be done anything to impair
materially the value of any of the Major Agreements; provided, Borrower may
terminate a Major Agreement so long as Borrower enters into a materially
comparable replacement agreement.
44
Section 7.10 Major Construction.
Borrower shall give Lender not less than 60-days' prior written notice
before commencing any construction, remodeling or demolition project or series
of related projects with respect to an Eligible Property of Borrower or any
Subsidiary, the aggregate cost of which will exceed $250,000. If (a) any such
project would reasonably be expected to have a Materially Adverse Effect or (b)
the aggregate cost of such project will exceed $2,000,000, then Borrower or such
Subsidiary, as applicable, shall not commence such project without the prior
written consent of Lender, which approval shall not be unreasonably withheld,
conditioned or delayed, and will be deemed granted if no written denial is
received within 60 days after written notice to Lender of the project together
with an adequate description of the project which is reasonably acceptable to
Lender.
Section 7.11 Material Events.
Borrower shall give Lender not less than 30-day's prior written notice
of any material acquisitions, dispositions, mergers or asset purchases and
shall, with the giving of such notice, deliver a Compliance Certificate
evidencing that Borrower will, after giving effect to such proposed acquisition,
disposition, merger or asset purchase, be in compliance with its covenants under
this Agreement.
Section 7.12 ERISA.
Borrower will not and will not permit any Subsidiary to at any time
maintain any Plan subject to the provisions of ERISA and will not at any time be
a member of any ERISA Group with any Person that has at any time maintained any
such Plan.
Section 7.13 ERISA Exemptions.
Borrower shall not, and shall not permit any of its Subsidiaries to,
permit any of its assets to become or be deemed to be "plan assets" within the
meaning of ERISA, the Internal Revenue Code and the respective regulations
promulgated thereunder, of any ERISA Plan or any Non-ERISA Plan.
Section 7.14 Negative Pledge.
Borrower will not, and will not permit any Subsidiary to, (a) create,
assume or suffer to exist any Lien on any asset of Borrower or any Subsidiary,
except for Permitted Liens, without Lender's prior written approval which may be
granted or withheld in Lender's sole and absolute discretion; or (b) create or
otherwise cause or suffer to exist or become effective, any consensual
encumbrance or restriction of any kind on the ability of any Subsidiary: (i) if
such Subsidiary is a Loan Party, to pay or perform its obligations under the
Guaranty to which it is a party prior to its obligation to pay dividends or make
any other distribution on any of such Subsidiary's capital stock or other
securities owned by Borrower or any Subsidiary of Borrower; (ii) to pay any
Indebtedness owed to Borrower or any other Subsidiary; (iii) to make loans or
advances to Borrower or any other Subsidiary; or (iv) to transfer any of its
property or assets to Borrower or any other Subsidiary.
45
Section 7.15 Listing Status and REIT Status.
Borrower will maintain its status as an American Stock Exchange listed
company and shall at all times be qualified as a real estate investment trust
pursuant to Section 856 of the Internal Revenue Code.
Section 7.16 Agreements with Affiliates.
Borrower shall not, and shall not permit any of its Subsidiaries to,
enter into any transaction requiring such Person to pay any amounts to or
otherwise transfer property to, or pay any management or other fees to, any
Affiliate other than on terms and conditions (a) substantially as favorable to
Borrower or such Subsidiary as would be obtainable at the time in a comparable
arm's length transaction with a Person not an Affiliate or (b) which comply with
the requirements of the Statement of Policy for Real Estate Investment Trusts
promulgated by the North American Security Administrators Association, as
amended from time to time.
Section 7.17 New Subsidiaries.
Upon any Person becoming an Eligible Subsidiary of Borrower after the
date hereof, Borrower shall cause such Eligible Subsidiary to deliver to Lender
within 15 days of such event each of the following items (if not previously
delivered to Lender):
(a) an accession agreement in the form of Annex I to the Guaranty
duly executed by such Eligible Subsidiary;
(b) the articles of incorporation, articles of organization,
certificate of limited partnership or other comparable organizational instrument
(if any) of such Eligible Subsidiary certified as of a recent date by the
Secretary of State of the State of formation of such Eligible Subsidiary;
(c) a Certificate of Good Standing or certificate of similar
meaning with respect to such Eligible Subsidiary issued as of a recent date by
the Secretary of State of the State of formation of such Eligible Subsidiary and
certificates of qualification to transact business or other comparable
certificates issued by each Secretary of State (and any state department of
taxation, as applicable) of each state in which such Eligible Subsidiary is
required to be so qualified;
(d) a certificate of incumbency signed by the Secretary or
Assistant Secretary (or other individual performing similar functions) of such
Eligible Subsidiary with respect to each of the officers of such Eligible
Subsidiary authorized to execute and deliver the Loan Documents to which such
Guarantor is a party;
(e) copies certified by the Secretary or Assistant Secretary of
such Eligible Subsidiary (or other individual performing similar functions) of
(i) the by-laws of such Eligible Subsidiary, if a corporation, the operating
agreement, if a limited liability company, the partnership agreement, if a
limited or general partnership, or other comparable document in the case of any
other form of legal entity and (ii) all corporate, partnership, member or other
46
necessary action taken by such Eligible Subsidiary to authorize the execution,
delivery and performance of the Loan Documents to which it is a party;
(f) an opinion of legal counsel to such Eligible Subsidiary,
regarding the due formation and good standing of such Subsidiary, the
enforceability of the Loan Documents to which it is a party, and such other
matters as Lender shall request; and
(g) such other documents and instruments as Lender may reasonably
request.
Section 7.18 Management.
Should either Xxxx Xxxxxx or Xxxx Xxxxx cease to be a member of the
board of trustees and/or an executive officer of Borrower, Borrower shall
replace such vacancy with a person reasonably acceptable to Lender within 90
days after the vacancy shall occur.
Section 7.19 Concentrations.
At no time shall Borrower and its Subsidiaries, on a consolidated
basis, derive more than 15% of its aggregate Net Operating Income from any
single tenant (other than IHOP Corp. and its Subsidiaries ["IHOP"]) nor, prior
to December 31, 2003, more than 40% of its aggregate Net Operating Income from
IHOP nor, after December 31, 2003, more than 35% of its aggregate Net Operating
Income from IHOP. Any tenant entities whose financial reporting is, in
accordance with GAAP, consolidated shall, for the purposes of the foregoing
covenant, be deemed a "single tenant."
ARTICLE 8.
FINANCIAL COVENANTS
Borrower agrees that, so long as Lender has any Commitments hereunder
or any Obligation remains unpaid:
Section 8.1 Minimum Tangible Net Worth.
Borrower shall not at any time permit the Tangible Net Worth of
Borrower and its Subsidiaries, on a consolidated basis, to be less than (a)
$33,739,570.00, plus (b) 90% of the amount of proceeds in cash or Property (net
of transaction costs) received by Borrower from the sale or issuance by Borrower
of Shares, options, warrants or other Equity Interests of any class or character
after June 30, 2003.
Section 8.2 Ratio of Total Liabilities to Gross Asset Value.
Borrower shall not at any time permit the ratio of (a) Total
Liabilities of Borrower and its Subsidiaries, on a consolidated basis, to (b)
Gross Asset Value of Borrower and its Consolidated Subsidiaries to exceed (i)
0.575 for the period from the Effective Date until December 31, 2003 and (ii)
0.55 to 1.00 for all time periods thereafter.
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Section 8.3 Distributions.
If an Event of Default under any of Sections 9.1(a), 9.1(h) or 9.1(i)
shall have occurred and be continuing, Borrower shall not directly or indirectly
declare or make, or incur any liability to make, any Restricted Payments. If any
other Event of Default shall have occurred and be continuing, Borrower shall not
directly or indirectly declare or make, or incur any liability to make, any
Restricted Payments except that Borrower may make distributions to its
shareholders in the minimum amount necessary to maintain compliance with Section
7.15. If no Event of Default, or any Event of Default other than those specified
above, shall have occurred and be continuing, Borrower shall not directly or
indirectly declare or make, or incur any liability to make, any Restricted
Payments other than Permitted Distributions.
Section 8.4 Ratio of EBITDA to Interest Expense.
Borrower shall not permit the ratio of (a) EBITDA of Borrower and its
Subsidiaries, on a consolidated basis, to (b) Interest Expense of Borrower and
its Subsidiaries, on a consolidated basis, for any fiscal quarter to be less
than 2.00 to 1.00 at the end of such quarter.
Section 8.5 Ratio of EBITDA to Fixed Charges.
Borrower shall not permit the ratio of (a) EBITDA of Borrower and its
Subsidiaries, on a Consolidated Basis, to (b) the Fixed Charges of Borrower and
its Subsidiaries, on a consolidated basis, for any fiscal quarter to be less
than 1.75 to 1.00 for such quarter.
Section 8.6 Permitted Investments.
Borrower shall not, and shall not permit any Subsidiary to, make any
Investment in or otherwise own the following items which would cause the value
of such holdings of Borrower and its Subsidiaries, on a consolidated basis, to
exceed the following percentages of Gross Asset Value:
(i) unimproved real estate (excluding Development
Property) such that the aggregate book value of all such unimproved
real estate exceeds 5% of Gross Asset Value;
(ii) Mortgages in favor of Borrower or such Subsidiary,
such that the aggregate book value of Indebtedness secured by such
Mortgages exceeds 5% of Gross Asset Value;
(iii) Investments in Equity Interests (other than Equity
Interests in Subsidiaries and Unconsolidated Affiliates), such that the
aggregate book value of such Equity Interests exceeds 5% of Gross Asset
Value;
(iv) Development Property, such that the Total Budgeted
Costs for all such Development Properties exceeds 10% of Gross Asset
Value;
(v) Non-retail improved real estate such that the
aggregate book value of all such non-retail improved real estate
exceeds 5% of Gross Asset Value;
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(vi) Investments in Subsidiaries (other than Wholly-Owned
Subsidiaries) and Unconsolidated Affiliates such that the aggregate of
Borrower's Ownership Share in such entities exceeds 5% of Gross Asset
Value.
The aggregate of all of the foregoing items shall not exceed 20% of Gross Asset
Value. For the purposes of the determining the value of any of the foregoing
items which are non-income producing (such as unimproved real estate) such items
will be valued at the lower of their acquisition cost or market value (as
determined by Lender in its reasonable discretion).
Section 8.7 Ratio of Unencumbered Net Operating Income to Unsecured
Interest Expense.
Borrower shall not permit the ratio of (a) Unencumbered Net Operating
Income of Borrower and its Subsidiaries, on a consolidated basis, to (b)
Unsecured Interest Expense of Borrower and its Subsidiaries, on a consolidated
basis, for any fiscal quarter to be less than 2.25:1.00 for such quarter.
Section 8.8 Ratio of Secured Indebtedness to Gross Asset Value.
Borrower will not permit the ratio of (a) Secured Indebtedness of
Borrower and its Subsidiaries, on a consolidated basis, to (b) Gross Asset Value
to exceed 0.35 to 1.0.
Section 8.9 Maximum Loan Availability.
Borrower will not at any time permit the aggregate principal amount of
all outstanding Loans, together with the aggregate amount of all Letter of
Credit Liabilities, to exceed the lesser of (a) Maximum Loan Availability at
such time, or (b) the Commitment.
ARTICLE 9.
DEFAULTS
Section 9.1 Events of Default.
If one or more of the following events shall have occurred and be
continuing:
(a) (i) Borrower shall fail to pay when due any Reimbursement
Obligation or any principal of any Loan or other Obligation, or (ii) Borrower
shall fail to pay when due any interest, fees or other Obligation and such
failure under this clause (ii) shall continue for a period of five days after
notice that such payment is due and payable;
(b) Borrower shall fail to observe or perform any covenant or
agreement contained in Section 7.7, Sections 7.12 through 7.15, inclusive or
Section 8.9;
(c) Borrower shall fail to comply with any of the covenants or
agreements contained in Article 8 (other than Section 8.9), and Borrower shall
remain in noncompliance with any such Section after 30 days following the first
failure following the Effective Date to comply with such Section;
49
(d) Borrower shall fail to observe or perform any covenant or
agreement contained in this Agreement (other than those covered by the
immediately preceding clauses (a) through (c)) for a period of 30 days after
written notice thereof has been given to Borrower by Lender;
(e) An Event of Default under and as defined in any Loan Document
shall occur and be continuing or Borrower shall fail to observe or perform any
covenant or agreement contained in any of the Loan Documents and such failure
shall continue beyond any applicable period of grace;
(f) any representation, warranty, certification or statement made
or deemed made by or on behalf of any Loan Party in this Agreement or in any
certificate, financial statement or other Loan Document delivered pursuant to
this Agreement shall prove to have been incorrect or misleading in any material
respect when made or deemed made;
(g) the maturity of any Indebtedness of Borrower or its
Subsidiaries in excess of $500,000.00 in the aggregate shall have been (i)
accelerated in accordance with the provisions of any indenture, contract or
instrument providing for the creation of or concerning such Indebtedness or (ii)
required to be prepaid in full prior to the stated maturity thereof;
(h) Borrower or any other Loan Party shall commence a voluntary
case or other proceeding seeking liquidation, reorganization or other relief
with respect to itself or its debts under any bankruptcy, insolvency or other
similar law now or hereafter in effect or seeking the appointment of a trustee,
receiver, liquidator, custodian or other similar official of it or any
substantial part of its property, or shall consent to any such relief or to the
appointment of or taking possession by any such official in an involuntary case
or other proceeding commenced against it, or shall make a general assignment for
the benefit of creditors, or shall fail generally to pay its debts as they
become due, or shall take any corporate action to authorize any of the
foregoing;
(i) an involuntary case or other proceeding shall be commenced
against Borrower or any other Loan Party seeking liquidation, reorganization or
other relief with respect to it or its debts under any bankruptcy, insolvency or
other similar law now or hereafter in effect or seeking the appointment of a
trustee, receiver, liquidator, custodian or other similar official of it or any
substantial part of its property and such involuntary case or other proceeding
shall remain undismissed and unstayed for a period of 60 days; or an order for
relief shall be entered against any such Person under the federal bankruptcy
laws as now or hereafter in effect;
(j) a judgment or order for the payment of money in excess of
$50,000.00 shall be rendered against Borrower or any other Loan Party and such
judgment or order shall continue unsatisfied and unstayed for a period of thirty
days;
(k) the assets of Borrower or any other Loan Party at any time
constitute assets, within the meaning of ERISA, the Internal Revenue Code and
the respective regulations promulgated thereunder, of any ERISA Plan or
Non-ERISA Plan; or
(l) any Guarantor shall fail to comply with any term, covenant,
condition or agreement contained in the Guaranty (after giving effect to any
applicable grace or cure periods)
50
or any Guarantor shall disallow, revoke or terminate or attempt to do any of the
foregoing with respect to the Guaranty.
Section 9.2 Remedies Upon an Event of Default.
Upon the occurrence of an Event of Default, and in every such event,
Lender may, (i) by notice to Borrower terminate the Commitments, which shall
thereupon terminate, (ii) by notice to Borrower declare the Loan and all other
Obligations and an amount equal to the Stated Amount of all Letters of Credit
then outstanding due, and the Loan and all other Obligations and an amount equal
to the Stated Amount of all Letters of Credit then outstanding shall thereupon
become, immediately due and payable without presentment, demand, protest or
notice of intention to accelerate, all of which are hereby waived by Borrower;
and (iii) exercise all rights and remedies available under all of the Loan
Documents. Notwithstanding the foregoing, upon the occurrence of any of the
Events of Default specified in clause (h) or (i) above, without any notice to
Borrower or any other act by Lender, the Commitment shall thereupon immediately
and automatically terminate and the Loans and all other Obligations and an
amount equal to the Stated Amount of all Letters of Credit then outstanding
shall become immediately due and payable without presentment, demand, protest,
notice of intention to accelerate or notice of acceleration, or other notice of
any kind, all of which are hereby waived by Borrower.
Section 9.3 Additional Remedies Upon Certain Default.
In addition to the other rights and remedies of Lender upon the
occurrence and during the continuance of a Default, upon the occurrence and
during the continuance of a Default under Section 9.1(c), Lender shall not be
obligated to make any Loans or issue any Letters of Credit.
Section 9.4 Collateral Account.
(a) As collateral security for the prompt payment in full when due
of all Letter of Credit Liabilities, Borrower hereby pledges and grants to
Lender, for the benefit of the Issuing Bank and Lender as provided herein, a
security interest in all of Borrower's right, title and interest in and to the
Collateral Account and the balances from time to time in the Collateral Account
(including the investments and reinvestments therein provided for below). The
balances from time to time in the Collateral Account shall not constitute
payment of any Letter of Credit Liabilities until applied by Lender as provided
herein. Anything in this Agreement to the contrary notwithstanding, funds held
in the Collateral Account shall be subject to withdrawal only as provided in
this Section.
(b) Amounts on deposit in the Collateral Account shall be invested
and reinvested by Lender in such investments as Lender shall determine in its
sole discretion. All such investments and reinvestments shall be held in the
name of and be under the sole dominion and control of Lender. Lender shall
exercise reasonable care in the custody and preservation of any funds held in
the Collateral Account and shall be deemed to have exercised such care if such
funds are accorded treatment substantially equivalent to that which Lender
accords other funds deposited with Lender, it being understood that Lender shall
not have any responsibility for taking any necessary steps to preserve rights
against any parties with respect to any funds held in the Collateral Account.
51
(c) If an Event of Default shall have occurred and be continuing,
Lender may (and, if instructed by the Issuing Bank, shall) in its (or their)
discretion at any time and from time to time elect to liquidate any such
investments and reinvestments and credit the proceeds thereof to the Collateral
Account and apply or cause to be applied such proceeds and any other balances in
the Collateral Account to the payment of any of the Letter of Credit Liabilities
then due and payable.
(d) When all of the Obligations shall have been indefeasibly paid
in full and no Letters of Credit remain outstanding, Lender shall promptly
deliver to Borrower, against receipt but without any recourse, warranty or
representation whatsoever, the balances remaining in the Collateral Account.
(e) Borrower shall pay to Lender from time to time such fees as
Lender normally charges for similar services in connection with Lender's
administration of the Collateral Account and investments and reinvestments of
funds therein.
ARTICLE 10.
MISCELLANEOUS
Section 10.1 Notices.
All notices, requests and other communications to any party under the
Loan Documents shall be in writing (including facsimile transmission or similar
writing) and shall be given to such party as follows:
If to Borrower:
AmREIT
Xxxxx Xxxxxxxx Xxxxx, Xxxxx 000
Xxxxxxx, Xxxxx 00000
Attention: Xx. Xxxx Xxxxxx
Telecopier: (000) 000-0000
Telephone: (000) 000-0000
With a copy of any notice of default to:
Xxxxxx, Xxxxxx & Xxxxx, P.C.
0000 Xxxxxx
Xxxxxxx, Xxxxx 00000
Attn: Xxxx X. Xxxxxx
Telecopier: (000) 000-0000
Telephone: (000) 000-0000
52
If to Lender:
Xxxxx Fargo Bank, National Association
Disbursement and Operations Center
0000 Xxxx Xxxx Xxxxx, Xxxxx 000
Xx Xxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxx Xxxxxxxx
Telecopier: (000) 000-0000
Telephone: (000) 000-0000
with a copy to:
Xxxxx Fargo Bank, National Association
0000 Xxxxxxxxx, 0xx Xxxxx
Xxxxxxx, Xxxxx 00000-0000
Attention: Mr. Xxxxxx Xxxx
Telecopier: (000) 000-0000
Telephone: (000) 000-0000
or as to each party at such other address as such party shall designate in a
written notice to the other parties. Each such notice, request or other
communication shall be effective (a) if given by mail, 72 hours after such
communication is deposited in the United States Mail, certified with return
receipt requested, postage prepaid, addressed as aforesaid or (b) if given by
any other means (including facsimile), when received at the applicable address
provided for in this Section; provided that notices to Lender under Article 2,
and any notice of a change of address for notices, shall not be effective until
received.
Section 10.2 No Waivers.
No failure or delay by Lender or the Issuing Bank in exercising any
right, power or privilege under any Loan Document shall operate as a waiver
thereof nor shall any single or partial exercise thereof preclude any other or
further exercise thereof or the exercise of any other right, power or privilege.
The rights and remedies provided in the Loan Documents shall be cumulative and
not exclusive of any rights or remedies provided by law.
Section 10.3 Expenses.
Borrower will pay on demand all present and future reasonable expenses
actually incurred by Persons who are not employees of, and other third parties
engaged by:
(a) Lender in connection with the negotiation, preparation,
execution, delivery and administration of this Agreement, the Revolving Note and
each of the other Loan Documents, whenever the same shall be executed and
delivered, including, without limitation, appraisers' fees, environment
engineers' fees, search fees, recording fees, mortgage recording taxes, and the
reasonable fees and disbursements of Xxxxxxxx Xxxxxxxx & Xxxxxx P.C., counsel
for Lender;
53
(b) Lender in connection with the review of Properties for
acceptance as Unencumbered Pool Properties and Lender's other activities under
Section 4.1, including reasonable fees and disbursements of counsel to Lender;
(c) Lender in connection with the negotiation, preparation,
execution and delivery of any waiver, amendment or consent by Lender relating to
this Agreement, the Revolving Note or any of the other Loan Documents, including
the reasonable fees and disbursements of counsel to Lender;
(d) Lender and Issuing Bank in connection with any restructuring,
refinancing or "workout" of the transactions contemplated by this Agreement, the
Revolving Note and the other Loan Documents, including the reasonable fees and
disbursements of counsel to Lender;
(e) Lender and Issuing Bank, after the occurrence of a Default or
Event of Default, in connection with the collection or enforcement of the
obligations of Borrower under this Agreement, the Revolving Note or any other
Loan Document, including the reasonable fees and disbursements of counsel to
Lender and Issuing Bank;
(f) Subject to any limitation contained in Section 10.6, Lender
and Issuing Bank in connection with prosecuting or defending any claim in any
way arising out of, related to, or connected with this Agreement, the Revolving
Note or any of the other Loan Documents, including the reasonable fees and
disbursements of counsel to Lender and Issuing Bank and of experts and other
consultants retained by Lender in connection therewith;
(g) Lender and Issuing Bank, to the extent not already covered by
any of the preceding subsections, in connection with any bankruptcy or other
proceeding of the type described in Sections 9.1(h) or (i), and the reasonable
fees and disbursements of counsel to Lender and Issuing Bank actually incurred
in connection with the representation of Lender and Issuing Bank in any matter
relating to or arising out of any such proceeding, including without limitation
(i) any motion for relief from any stay or similar order, (ii) the negotiation,
preparation, execution and delivery of any document relating to Lender and
Issuing Bank and (iii) the negotiation and preparation of any plan of
reorganization of Borrower, whether proposed by Borrower, Lender or any other
Person, and whether such fees and expenses are incurred prior to, during or
after the commencement of such proceeding or the confirmation or conclusion of
any such proceeding.
Section 10.4 Stamp, Intangible and Recording Taxes.
Borrower will pay any and all stamp, intangible, registration,
recordation, mortgage and similar taxes, fees or charges and shall indemnify
Lender and Issuing Bank against any and all liabilities with respect to or
resulting from any delay in the payment or omission to pay any such taxes, fees
or charges, which may be payable or determined to be payable in connection with
the execution, delivery, recording, performance or enforcement of this
Agreement, the Revolving Note and any of the other Loan Documents or the
perfection of any rights or Liens thereunder.
54
Section 10.5 Loan Sales and Participations; Disclosure of Information.
Borrower agrees that Lender may elect, at any time, to sell, assign or
grant participations in all or any portion of its rights and obligations under
the Loan Documents, and that any such sale, assignment or participation may be
to one or more financial institutions, private investors, and/or other entities,
at Lender's sole discretion ("Participant"). Borrower further agrees that Lender
may disseminate to any such actual or potential purchaser(s), assignee(s) or
participant(s) all documents and information (including, without limitation, all
financial information) which has been or is hereafter provided to or known to
Lender with respect to: (a) the Properties and their operation; (b) any party
connected with the Loan (including, without limitation, the Borrower and any
Guarantor); and/or (c) any lending relationship other than the Loans which
Lender may have with any party connected with the Loans. In the event of any
such sale, assignment or participation, Lender and the parties to such
transaction shall share in the rights and obligations of Lender as set forth in
the Loan Documents only as and to the extent they agree among themselves. In
connection with any such sale, assignment or participation, Borrower further
agrees that the Loan Documents shall be sufficient evidence of the obligations
of Borrower to each purchaser, assignee, or participant, and upon written
request by Lender, Borrower shall enter into such amendments or modifications to
the Loan Documents as may be reasonably required in order to evidence any such
sale, assignment or participation. The indemnity obligations of Borrower under
the Loan Documents shall also apply with respect to any purchaser, assignee or
participant. Anything in this Agreement to the contrary notwithstanding, and
without the need to comply with any of the formal or procedural requirements of
this Agreement, including this Section, any lender may at any time and from time
to time pledge and assign all or any portion of its rights under all or any of
the Loan Documents to a Federal Reserve Bank; provided that no such pledge or
assignment shall release such Lender from its obligations thereunder.
Section 10.6 Indemnification.
Borrower shall and hereby agrees to indemnify, defend and hold harmless
Lender and Issuing Bank and their respective directors, officers, agents and
employees (each an "Indemnified Party") from and against (a) any and all losses,
claims, damages, liabilities, deficiencies, judgments or expenses reasonably
incurred by any of them (except to the extent that it results from their own
gross negligence or willful misconduct) arising out of or by reason of any
litigation, investigations, claims or proceedings which arise out of or are in
any way related to: (i) this Agreement or the transactions contemplated thereby;
(ii) the making of Loans; (iii) any actual or proposed use by Borrower of the
proceeds of the Loans or of Letters of Credit; or (iv) Lender's or Issuing
Bank's entering into this Agreement, the other Loan Documents or any other
agreements and documents relating hereto, including, without limitation, amounts
paid in settlement, court costs and the reasonable fees and disbursements of
counsel incurred in connection with any such litigation, investigation, claim or
proceeding or any advice rendered in connection with any of the foregoing and
(b) any such losses, claims, damages, liabilities, deficiencies, judgments or
expenses incurred in connection with any remedial or other similar action taken
by Borrower, Lender or Issuing Bank in connection with the required compliance
by Borrower or any of the Subsidiaries, or any of their respective properties,
with any federal, state or local Environmental Laws or other material
environmental rules, regulations, orders, directions, ordinances, criteria or
guidelines. If and to the extent that the obligations of Borrower
55
hereunder are unenforceable for any reason, Borrower hereby agrees to make the
maximum contribution to the payment and satisfaction of such obligations which
is permissible under Applicable Law. Borrower's obligations hereunder shall
survive any termination of this Agreement and the other Loan Documents and the
payment in full of the Obligations, and are in addition to, and not in
substitution of, any other of its other obligations set forth in this Agreement
and the other Loan Documents. Borrower shall not be obligated as provided in
this Section to indemnify, defend or hold harmless any Indemnified Person in
respect of any litigation, investigation, claim or proceeding commenced by any
Indemnified Party against another Indemnified Party.
Section 10.7 Successors and Assigns.
The provisions of this Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and assigns,
except that Borrower may not assign or otherwise transfer any of its rights
under this Agreement without the prior written consent of Lender.
Section 10.8 Governing Law.
THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH,
THE LAWS OF THE STATE OF TEXAS.
Section 10.9 Litigation.
(a) EACH PARTY HERETO ACKNOWLEDGES THAT ANY DISPUTE OR CONTROVERSY
BETWEEN OR AMONG BORROWER, LENDER OR ISSUING BANK WOULD BE BASED ON DIFFICULT
AND COMPLEX ISSUES OF LAW AND FACT AND THAT A TRIAL BY JURY COULD RESULT IN
SIGNIFICANT DELAY AND EXPENSE. ACCORDINGLY, TO THE FULLEST EXTENT PERMITTED BY
APPLICABLE LAW, LENDER, ISSUING BANK AND BORROWER HEREBY WAIVE TRIAL BY JURY IN
ANY ACTION OR PROCEEDING OF ANY KIND OR NATURE IN ANY COURT OR TRIBUNAL IN WHICH
AN ACTION MAY BE COMMENCED BY OR AGAINST BORROWER ARISING OUT OF THIS AGREEMENT,
THE NOTES OR ANY OTHER LOAN DOCUMENT OR BY REASON OF ANY OTHER CAUSE OR DISPUTE
WHATSOEVER BETWEEN OR AMONG BORROWER, LENDER OR ISSUING BANK OF ANY KIND OR
NATURE.
(b) BORROWER, LENDER AND ISSUING BANK EACH HEREBY AGREES THAT THE
FEDERAL DISTRICT COURT OF THE SOUTHERN DISTRICT OF TEXAS OR, AT THE OPTION OF
LENDER, ANY STATE COURT LOCATED IN XXXXXX COUNTY, TEXAS SHALL HAVE NON-EXCLUSIVE
JURISDICTION TO HEAR AND DETERMINE ANY CLAIMS OR DISPUTES BETWEEN OR AMONG
BORROWER, LENDER OR ISSUING BANK PERTAINING DIRECTLY OR INDIRECTLY TO THIS
AGREEMENT, THE NOTE OR ANY OTHER LOAN DOCUMENT OR TO ANY MATTER ARISING HEREFROM
OR THEREFROM. BORROWER EXPRESSLY SUBMITS AND CONSENTS IN ADVANCE TO SUCH
JURISDICTION IN ANY ACTION OR PROCEEDING COMMENCED IN SUCH COURTS. THE CHOICE OF
FORUM SET FORTH IN THIS
56
SECTION SHALL NOT BE DEEMED TO PRECLUDE THE BRINGING OF ANY ACTION BY LENDER OR
ISSUING BANK OR THE ENFORCEMENT BY LENDER OR ISSUING BANK OF ANY JUDGMENT
OBTAINED IN SUCH FORUM IN ANY OTHER APPROPRIATE JURISDICTION. FURTHER, BORROWER
IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY
OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF THE VENUE OF ANY
SUCH PROCEEDING BROUGHT IN SUCH A COURT AND ANY CLAIM THAT ANY SUCH PROCEEDING
BROUGHT IN SUCH A COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.
(c) THE FOREGOING WAIVERS HAVE BEEN MADE WITH THE ADVICE OF
COUNSEL AND WITH A FULL UNDERSTANDING OF THE LEGAL CONSEQUENCES THEREOF, AND
SHALL SURVIVE THE PAYMENT OF THE LOANS AND ALL OTHER AMOUNTS PAYABLE HEREUNDER
OR UNDER THE OTHER LOAN DOCUMENTS AND THE TERMINATION OF THIS AGREEMENT.
Section 10.10 Counterparts; Integration.
This Agreement may be signed in any number of counterparts, each of
which shall be an original, with the same effect as if the signatures thereto
and hereto were upon the same instrument. This Agreement, together with the
other Loan Documents, constitutes the entire agreement and understanding among
the parties hereto and supersedes any and all prior agreements and
understandings, oral or written, relating to the subject matter hereof.
Section 10.11 Invalid Provisions.
Any provision of this Agreement or any other Loan Document held by a
court of competent jurisdiction to be illegal, invalid or unenforceable shall
not invalidate the remaining provisions of such Loan Document which shall remain
in full force and effect and the effect thereof shall be confined to the
provision held invalid or illegal.
Section 10.12 Mandatory Disclosures.
Notwithstanding anything to the contrary set forth herein or in any
other written or oral understanding or agreement to which the parties hereto are
parties or by which they are bound, the parties hereto acknowledge and agree
that (i) any obligations of confidentiality contained herein and therein do not
apply and have not applied from the commencement of discussions between the
parties to the tax treatment and tax structure of the transactions contemplated
by the Loan Documents (and any related transactions or arrangements), and (ii)
each party (and each of its employees, representatives, or other agents) may
disclose to any and all parties as required, without limitation of any kind, the
tax treatment and tax structure of the transactions contemplated by the Loan
Documents and all materials of any kind (including opinions or other tax
analyses) that are provided to such party relating to such tax treatment and tax
structure, all within the meaning of Treasury Regulations Section 1.6011-4;
provided, however, that each party recognizes that the privilege each has to
maintain, in its sole discretion, with regard to the confidentiality of a
communication relating to the transactions contemplated by the Loan Documents,
including a confidential communication with its attorney or a confidential
57
communication with a federally authorized tax practitioner under Section 7525 of
the Internal Revenue Code, is not intended to be affected by the foregoing.
Section 10.13 Limitation of Liability of Trustees, Etc.
LENDER SHALL LOOK SOLELY TO BORROWER FOR THE ENFORCEMENT OF ANY CLAIM
AGAINST BORROWER AND ACCORDINGLY NEITHER THE BORROWER'S BOARD OF TRUSTEES,
OFFICERS, EMPLOYEES, SHAREHOLDERS OF BORROWER NOR THE INVESTMENT MANAGER OR ANY
OF ITS OFFICERS, DIRECTORS, EMPLOYEES OR SHAREHOLDERS SHALL HAVE ANY PERSONAL
LIABILITY FOR OBLIGATIONS ENTERED INTO BY OR ON BEHALF OF BORROWER.
Section 10.14 ENTIRE AGREEMENT.
THIS REVOLVING CREDIT AGREEMENT AND THE OTHER LOAN DOCUMENTS REPRESENT
THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE
OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE
ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES. THIS INSTRUMENT MAY BE
AMENDED ONLY BY AN INSTRUMENT IN WRITING EXECUTED BY THE PARTIES HERETO.
IN WITNESS WHEREOF, the parties hereto have caused this Amended and
Restated Credit Agreement to be duly executed by their respective authorized
officers as of the day and year first above written.
BORROWER:
AmREIT,
a Texas Real Estate Investment Trust
By:__________________________________
Name:________________________________
Title:_______________________________
[Signatures Continued on Next Page]
58
XXXXX FARGO BANK, NATIONAL
ASSOCIATION
By:__________________________________
Name:________________________________
Title:_______________________________
59
FORM OF GUARANTY
THIS GUARANTY dated as of ____________, 2003, executed and delivered by
each of the undersigned and the other Persons from time to time party hereto
pursuant to the execution and delivery of an Accession Agreement in the form of
Annex I hereto (all of the undersigned, together with such other Persons each a
"Guarantor" and collectively, the "Guarantors") in favor of XXXXX FARGO BANK,
NATIONAL ASSOCIATION ("Lender") under that certain Revolving Credit Agreement
dated as of _______________, 2003, by and between AmREIT, a Texas Real Estate
Investment Trust ("Borrower") (as the same may be amended, restated,
supplemented or otherwise modified from time to time in accordance with its
terms, the "Credit Agreement").
WHEREAS, pursuant to the Credit Agreement, Lender has agreed to extend
certain financial accommodations to Borrower;
WHEREAS, it is a condition precedent to the effectiveness of the Credit
Agreement and the extension of financial accommodations under the Credit
Agreement that the Guarantors execute and deliver this Guaranty;
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged by each Guarantor, each Guarantor
agrees as follows:
Section 1. Guaranty. Each Guarantor hereby absolutely, irrevocably and
unconditionally guaranties the due and punctual payment and performance when
due, whether at stated maturity, by acceleration or otherwise, of all of the
following (collectively referred to as the "Guaranteed Obligations"): (a) all
indebtedness and obligations owing by the Borrower to Lender or the Issuing Bank
under or in connection with the Credit Agreement and any other Loan Document to
which the Borrower is a party, including without limitation, the repayment of
all principal of the Revolving Loan, all Reimbursement Obligations and all other
Letter of Credit Liabilities, and the payment of all interest, Fees, charges,
reasonable and actual attorneys fees and other amounts payable to Lender or the
Issuing Bank thereunder or in connection therewith; (b) any and all extensions,
renewals, modifications, amendments or substitutions of the foregoing; (c) all
expenses, including, without limitation, reasonable and actual attorneys' fees
and disbursements that are incurred by the Lender or the Issuing Bank in the
enforcement of any of the foregoing or any obligation of such Guarantor
hereunder and (d) all other Obligations.
Section 2. Guaranty of Payment and Not of Collection. This Guaranty is
a guaranty of payment, and not of collection, and a debt of each Guarantor for
its own account. Accordingly, neither Lender nor the Issuing Bank shall be
obligated or required before enforcing this Guaranty against any Guarantor: (a)
to pursue any right or remedy Lender or the Issuing Bank may have against
Borrower, any other Loan Party or any other Person or commence any suit or other
proceeding against Borrower, any other Loan Party or any other Person in any
court or other tribunal, (b) to make any claim in a liquidation or bankruptcy of
Borrower, any other Loan Party or any other Person; or (c) to make demand of
Borrower, any other Loan Party or any other Person or to enforce or seek to
enforce or realize upon any collateral security held by Lender or the Issuing
Bank which may secure any of the Guaranteed Obligations.
FORM OF GUARANTY
EXHIBIT A
PAGE A-1
Section 3. Guaranty Absolute. Each Guarantor guarantees that the
Guaranteed Obligations will be paid strictly in accordance with the terms of the
documents evidencing the same, regardless of any Applicable Law now or hereafter
in effect in any jurisdiction affecting any of such terms or the rights of
Lender or the Issuing Bank with respect thereto. The liability of each Guarantor
under this Guaranty shall be absolute and unconditional in accordance with its
terms and shall remain in full force and effect without regard to, and shall not
be released, suspended, discharged, terminated or otherwise affected by, any
circumstance or occurrence whatsoever, including without limitation, the
following (whether or not such Guarantor consents thereto or has notice
thereof):
(a) (i) any change in the amount, interest rate or due date or
other term of any of the Guaranteed Obligations, (ii) any change in the time,
place or manner of payment of all or any portion of the Guaranteed Obligations,
(iii) any amendment or waiver of, or consent to the departure from or other
indulgence with respect to, the Credit Agreement, any other Loan Document, or
any other document or instrument evidencing or relating to any Guaranteed
Obligations, or (iv) any waiver, renewal, extension, addition, or supplement to,
or deletion from, or any other action or inaction under or in respect of, the
Credit Agreement, any of the other Loan Documents, or any other documents,
instruments or agreements relating to the Guaranteed Obligations or any other
instrument or agreement referred to therein or evidencing any Guaranteed
Obligations or any assignment or transfer of any of the foregoing;
(b) any lack of validity or enforceability of the Credit
Agreement, any of the other Loan Documents, or any other document, instrument or
agreement referred to therein or evidencing any Guaranteed Obligations or any
assignment or transfer of any of the foregoing;
(c) any furnishing to the Lender or the Issuing Bank of any
additional security for the Guaranteed Obligations, or any sale, exchange,
release or surrender of, or realization on, any collateral securing any of the
Obligations;
(d) any settlement or compromise of any of the Guaranteed
Obligations, any security therefor, or any liability of any other party with
respect to the Guaranteed Obligations, or any subordination of the payment of
the Guaranteed Obligations to the payment of any other liability of the Borrower
or any other Loan Party,
(e) any bankruptcy, insolvency, reorganization, composition,
adjustment, dissolution, liquidation or other like proceeding relating to such
Guarantor, the Borrower, any other Loan Party or any other Person, or any action
taken with respect to this Guaranty by any trustee or receiver, or by any court,
in any such proceeding;
(f) any act or failure to act by the Borrower, any other Loan
Party or any other Person which may adversely affect such Guarantor's
subrogation rights, if any, against the Borrower to recover payments made under
this Guaranty;
(g) any application of sums paid by the Borrower, any other Loan
Party or any other Person with respect to the liabilities of the Borrower to
Lender, or the Issuing Bank, regardless of what liabilities of the Borrower
remain unpaid;
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PAGE A-2
(h) any defect, limitation or insufficiency in the borrowing
powers of the Borrower or in the exercise thereof; or
(i) any other circumstance which might otherwise constitute a
defense available to, or a discharge of, such Guarantor hereunder
Section 4. Action with Respect to Guaranteed Obligations. Lender and
the Issuing Bank may, at any time and from time to time, without the consent of,
or notice to, any Guarantor, and without discharging any Guarantor from its
obligations hereunder take any and all actions described in Section 3 and may
otherwise: (a) amend, modify, alter or supplement the terms of any of the
Guaranteed Obligations, including, but not limited to, extending or shortening
the time of payment of any of the Guaranteed Obligations or the interest rate
that may accrue on any of the Guaranteed Obligations; (b) amend, modify, alter
or supplement the Credit Agreement or any other Loan Document; (c) sell,
exchange, release or otherwise deal with all, or any part, of any collateral
securing any of the Obligations; (d) release any Loan Party or other Person
liable in any manner for the payment or collection of the Guaranteed
Obligations; (e) exercise, or refrain from exercising, any rights against the
Borrower, any other Loan Party or any other Person; and (f) apply any sum, by
whomsoever paid or however realized, to the Guaranteed Obligations in such order
as the Lender shall elect.
Section 5. Representations and Warranties. Each Guarantor hereby makes
to the Lender all of the representations and warranties made by the Borrower
with respect to or in any way relating to such Guarantor in the Credit Agreement
and the other Loan Documents, as if the same were set forth herein in full.
Section 6. Covenants. Each Guarantor will comply with all covenants
which the Borrower is to cause such Guarantor to comply with under the terms of
the Credit Agreement or any of the other Loan Documents.
Section 7. Waiver. Each Guarantor, to the fullest extent permitted by
Applicable Law, hereby waives notice or acceptance hereof or any presentment,
demand, protest or notice or any kind, and any other act or thing, or omission
or delay to do any other act or thing, which in any manner or to any extent
might vary the risk of such Guarantor or which otherwise might operate to
discharge such Guarantor from its obligations hereunder.
Section 8. Inability to Accelerate Loan. If either Lender or the
Issuing Bank is prevented from demanding or accelerating payment of any of the
Guaranteed Obligations by reason of any automatic stay or otherwise, Lender or
the Issuing Bank shall be entitled to receive from such Guarantor, upon demand
therefor, the sums which otherwise would have been due had such demand or
acceleration occurred.
Section 9. Reinstatement of Guaranteed Obligations. If claim is ever
made on Lender or the Issuing Bank for repayment or recovery of any amount or
amounts received in payment or on account of any of the Guaranteed Obligations,
and Lender or the Issuing Bank repays all or part of said amount by reason of
(a) any judgment, decree or order of any court or administrative body of
competent jurisdiction, or (b) any settlement or compromise of any such
FORM OF GUARANTY
EXHIBIT A
PAGE A-3
claim effected by Lender or the Issuing Bank with any such claimant (including
the Borrower or a trustee in bankruptcy for the Borrower), then and in such
event each Guarantor agrees that any such judgment, decree, order, settlement or
compromise shall be binding on it, notwithstanding any revocation hereof or the
cancellation of the Credit Agreement, any of the other Loan Documents, or any
other instrument evidencing any liability of the Borrower, and such Guarantor
shall be and remain liable to Lender or the Issuing Bank for the amounts so
repaid or recovered to the same extent as if such amount had never originally
been paid to Lender or the Issuing Bank.
Section 10. Subrogation. Upon the making by any Guarantor of any
payment hereunder for the account or the Borrower, such Guarantor shall be
subrogated to the rights of the payee against the Borrower; provided, however,
that such Guarantor shall not enforce any right or receive any payment by way of
subrogation or otherwise take any action in respect of any other claim or cause
of action such Guarantor may have against the Borrower arising by reason of any
payment or performance by such Guarantor pursuant to this Guaranty, unless and
until all of the Guaranteed Obligations have been indefeasibly paid and
performed in full. If any amount shall be paid to such Guarantor on account of
or in respect of such subrogation rights or other claims or causes of action,
such Guarantor shall hold such amount in trust for the benefit of Lender and the
Issuing Bank and shall forthwith pay such amount to Lender to be credited and
applied against the Guaranteed Obligations, whether matured or unmatured, in
accordance with the terms of the Credit Agreement or to be held by Lender as
collateral security for any Guaranteed Obligations existing.
Section 11. Payments Free and Clear. All sums payable by each Guarantor
hereunder, whether of principal, interest, Fees, expenses, premiums or
otherwise, shall be paid in full, without set-off or counterclaim or any
deduction or withholding whatsoever (including any withholding tax or liability
imposed by any Governmental Authority, or any Applicable Law promulgated
thereby), and if such Guarantor is required by Applicable Law or by any
Governmental Authority to make any such deduction or withholding, such Guarantor
shall pay to Lender and the Issuing Bank such additional amount as will result
in the receipt by Lender and the Issuing Bank of the full amount payable
hereunder had such deduction or withholding not occurred or been required.
Section 12. Subordination. Each Guarantor hereby expressly covenants
and agrees for the benefit of Lender and the Issuing Bank that all obligations
and liabilities of the Borrower to such Guarantor of whatever description,
including without limitation, all intercompany receivables of such Guarantor
from the Borrower (collectively, the "Junior Claims") shall be subordinate and
junior in right of payment to all Guaranteed Obligations. If an Event of Default
shall have occurred and be continuing, then no Guarantor shall accept any direct
or indirect payment (in cash, property, securities by set-off or otherwise) from
the Borrower on account of or in any manner in respect of any Junior Claim until
all of the Guaranteed Obligations have been indefeasibly paid in full.
Section 13. Avoidance Provisions. It is the intent of each Guarantor,
Lender and the Issuing Bank that in any Proceeding, such Guarantor's maximum
obligation hereunder shall equal, but not exceed, the maximum amount which would
not otherwise cause the obligations of
FORM OF GUARANTY
EXHIBIT A
PAGE A-4
the Guarantor hereunder (or any other obligations of the Guarantor to Lender and
the Issuing Bank) to be avoidable or unenforceable against the Guarantor in such
Proceeding as a result of Applicable Law, including, without limitation, (a)
Section 548 of the Bankruptcy Code of 1978, as amended (the "Bankruptcy Code")
and (b) any state fraudulent transfer or fraudulent conveyance act or statue
applied in such Proceeding, whether by virtue of Section 544 of the Bankruptcy
Code or otherwise. The Applicable Laws under which the possible avoidance or
unenforceability of the obligations of such Guarantor hereunder (or any other
obligations of such Guarantor to Lender and the Issuing Bank) shall be
determined in any such Proceeding are referred to as the "Avoidance Provisions".
Accordingly, to the extent that the obligations of any Guarantor hereunder would
otherwise be subject to avoidance under the Avoidance Provisions, the maximum
Guaranteed Obligations for which such Guarantor shall be liable hereunder shall
be reduced to that amount which, as of the time any of the Guaranteed
Obligations are deemed to have been incurred under the Avoidance Provisions,
would not cause the obligations of any Guarantor hereunder (or any other
obligations of the Guarantor to Lender and the Issuing Bank), to be subject to
avoidance under the Avoidance Provisions. This Section is intended solely to
preserve the rights of Lender and the Issuing Bank hereunder to the maximum
extent that would not cause the obligations of any Guarantor hereunder to be
subject to avoidance under the Avoidance Provisions, and no Guarantor or any
other Person shall have any right or claim under this Section as against Lender
and the Issuing Bank that would not otherwise be available to such Person under
the Avoidance Provisions.
Section 14. Information. Each Guarantor assumes all responsibility for
being and keeping itself informed of the financial condition of the Borrower and
the other Loan Parties, and of all other circumstances bearing upon the risk of
nonpayment of any of the Guaranteed Obligations and the nature, scope and extent
of the risks that such Guarantor assumes and incurs hereunder, and agrees that
neither Lender nor the Issuing Bank shall have any duty whatsoever to advise any
Guarantor of information regarding such circumstances or risks.
Section 15. Governing Law. THIS GUARANTY SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF TEXAS.
Section 16. WAIVER OF JURY TRIAL.
(a) EACH GUARANTOR, LENDER AND THE ISSUING BANK BY ACCEPTING THE
BENEFITS HEREOF, ACKNOWLEDGE THAT ANY DISPUTE OR CONTROVERSY BETWEEN OR AMONG
ANY GUARANTOR, LENDER AND THE ISSUING BANK WOULD BE BASED ON DIFFICULT AND
COMPLEX ISSUES OF LAW AND FACT AND THAT A TRIAL BY JURY COULD RESULT IN
SIGNIFICANT DELAY AND EXPENSE. ACCORDINGLY, THE GUARANTOR, AND LENDER AND THE
ISSUING BANK BY ACCEPTING THE BENEFITS HEREOF, TO THE FULLEST EXTENT PERMITTED
BY APPLICABLE LAW, HEREBY WAIVES TRIAL BY JURY IN ANY ACTION OR PROCEEDING OF
ANY KIND OR NATURE IN ANY COURT OR TRIBUNAL IN WHICH AN ACTION MAY BE COMMENCED
BY OR AGAINST SUCH GUARANTOR ARISING OUT OF THIS GUARANTY OR ANY OTHER LOAN
DOCUMENT OR BY REASON OF ANY OTHER CAUSE OR DISPUTE WHATSOEVER BETWEEN OR AMONG
SUCH GUARANTOR, LENDER OR THE ISSUING BANK OF ANY KIND OR NATURE.
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EXHIBIT A
PAGE A-5
(b) EACH GUARANTOR, LENDER AND THE ISSUING BANK EACH HEREBY AGREES
THAT THE FEDERAL DISTRICT COURT OF THE SOUTHERN DISTRICT OF TEXAS OR, AT THE
OPTION OF LENDER, ANY STATE COURT LOCATED IN XXXXXX COUNTY, TEXAS SHALL HAVE
NON-EXCLUSIVE JURISDICTION TO HEAR AND DETERMINE ANY CLAIMS OR DISPUTES BETWEEN
OR AMONG GUARANTOR, LENDER OR THE ISSUING BANK, PERTAINING DIRECTLY OR
INDIRECTLY TO THIS GUARANTY, THE GUARANTEED OBLIGATIONS OR ANY OTHER LOAN
DOCUMENT OR TO ANY MATTER ARISING HEREFROM OR THEREFROM. GUARANTOR EXPRESSLY
SUBMITS AND CONSENTS IN ADVANCE TO SUCH JURISDICTION IN ANY ACTION OR PROCEEDING
COMMENCED IN SUCH COURTS. THE CHOICE OF FORUM SET FORTH IN THIS SECTION SHALL
NOT BE DEEMED TO PRECLUDE THE BRINGING OF ANY ACTION BY LENDER OR THE ISSUING
BANK OR THE ENFORCEMENT BY LENDER OR THE ISSUING BANK OF ANY JUDGMENT OBTAINED
IN SUCH FORUM IN ANY OTHER APPROPRIATE JURISDICTION. FURTHER, EACH GUARANTOR
IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY
OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF THE VENUE OF ANY
SUCH PROCEEDING BROUGHT IN SUCH A COURT AND ANY CLAIM THAT ANY SUCH PROCEEDING
BROUGHT IN SUCH A COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.
(c) THE FOREGOING WAIVERS HAVE BEEN MADE WITH THE ADVICE OF
COUNSEL AND WITH A FULL UNDERSTANDING OF THE LEGAL CONSEQUENCES THEREOF, AND
SHALL SURVIVE THE PAYMENT OF THE OBLIGATIONS AND ALL OTHER AMOUNTS PAYABLE
HEREUNDER OR UNDER THE OTHER LOAN DOCUMENTS AND THE TERMINATION OF THIS
GUARANTY.
Section 17. Loan Accounts. Lender and the Issuing Bank may maintain
books and accounts setting forth the amounts of principal, interest and other
sums paid and payable with respect to the Guaranteed Obligations, and in the
case of any dispute relating to any of the outstanding amount, payment or
receipt of any of the Guaranteed Obligations or otherwise, the entries in such
books and accounts shall constitute prima facie evidence of the outstanding
amount of such Guaranteed Obligations and the amounts paid and payable with
respect thereto. The failure of Lender or the Issuing Bank to maintain such
books and accounts shall not in any way relieve or discharge any Guarantor of
any of its obligations hereunder.
Section 18. Waiver of Remedies. No delay or failure on the part of
Lender or the Issuing Bank in the exercise of any right or remedy it may have
against any Guarantor hereunder or otherwise shall operate as a waiver thereof,
and no single or partial exercise by Lender or the Issuing Bank of any such
right or remedy shall preclude other or further exercise thereof or the exercise
of any other such right or remedy.
Section 19. Termination. This Guaranty shall remain in full force and
effect until indefeasible payment in full of the Obligations and the termination
or cancellation of the Credit Agreement.
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EXHIBIT A
PAGE A-6
Section 20. Successors and Assigns. Each reference herein to Lender or
the Issuing Bank shall be deemed to include such Person's respective successors
and assigns (including, but not limited to, any holder of the Guaranteed
Obligations) in whose favor the provisions of this Guaranty also shall inure,
and each reference herein to each Guarantor shall be deemed to include such
Guarantor's successors and assigns, upon whom this Guaranty also shall be
binding. Lender and the Issuing Bank may, in accordance with the applicable
provisions of the Credit Agreement, assign, transfer or sell any Guaranteed
Obligations, or grant or sell participation in any Guaranteed Obligations, to
any Person without the consent of, or notice to, any Guarantor and without
releasing, discharging or modifying any Guarantor's obligations hereunder. Each
Guarantor hereby consents to the delivery by Lender or the Issuing Bank to any
assignee or participant (or any prospective assignee or participant) of any
financial or other information regarding the Borrower or any Guarantor. No
Guarantor may assign or transfer its obligations hereunder to any Person.
Section 21. JOINT AND SEVERAL OBLIGATIONS. THE OBLIGATIONS OF EACH
GUARANTOR HEREUNDER SHALL BE JOINT AND SEVERAL AND ACCORDINGLY, EACH GUARANTOR
CONFIRMS THAT IT IS LIABLE FOR THE FULL AMOUNT OF THE "GUARANTEED OBLIGATIONS"
AND ALL OF THE OBLIGATIONS AND LIABILITIES OF EACH OF THE OTHER GUARANTORS
HEREUNDER.
Section 22. Amendments. This Guaranty may not be amended except in
writing signed by Lender and each Guarantor.
Section 23. Payments. All payments to be made by any Guarantor pursuant
to this Guaranty shall be made in Dollars, in immediately available funds to
Lender at its Lending Office, not later than 11:00 a.m., on the date one
Business Day after demand therefor.
Section 24. Notices. All notices, requests and other communications
hereunder shall be in writing (including facsimile transmission or similar
writing) and shall be given (a) to each Guarantor at its address set forth below
its signature hereto, (b) to Lender or the Issuing Bank at its address for
notices provided for in the Credit Agreement, or (c) as to each such party at
such other address as such party shall designate in a written notice to the
other parties. Each such notice, request or other communication shall be
effective (i) if mailed, when received; (ii) if telecopied, when transmitted; or
(iii) if hand delivered, when delivered; provided, however, that any notice of a
change of address for notices shall not be effective until received.
Section 25. Severability. In case any provision of this Guaranty shall
be invalid, illegal or unenforceable in any jurisdiction, the validity, legality
and enforceability of the remaining provisions shall not in any way be affected
or impaired thereby.
Section 26. Headings. Section headings used in this Guaranty are for
convenience only and shall not affect the construction of this Guaranty.
Section 27. Definitions.
(a) For the purposes of this Guaranty:
FORM OF GUARANTY
EXHIBIT A
PAGE A-7
"Proceeding" means any of the following: (i) a voluntary or involuntary
case concerning any Guarantor shall be commenced under the Bankruptcy Code of
1978, as amended; (ii) a custodian (as defined in such Bankruptcy Code or any
other applicable bankruptcy laws) is appointed for, or takes charge of, all or
any substantial part of the property of any Guarantor; (iii) any other
proceeding under any Applicable Law, domestic or foreign, relating to
bankruptcy, insolvency, reorganization, winding-up or composition for adjustment
of debts, whether now or hereafter in effect, is commenced relating to any
Guarantor; (iv) any Guarantor is adjudicated insolvent or bankrupt; (v) any
order of relief or other order approving any such case or proceeding is entered
by a court of competent jurisdiction; (vi) any Guarantor makes a general
assignment for the benefit of creditors; (vii) any Guarantor shall fail to pay,
or shall state that it is unable to pay, or shall be unable to pay, its debts
generally as they become due; (viii) any Guarantor shall call a meeting of its
creditors with a view to arranging a composition or adjustment of its debts;
(ix) any Guarantor shall by any act or failure to act indicate its consent to,
approval of or acquiescence in any of the foregoing; or (x) any corporate action
shall be taken by any Guarantor for the purpose of effecting any of the
foregoing.
(b) Terms not otherwise defined herein are used herein with the
respective meanings given them in the Credit Agreement.
Section 28. ENTIRE AGREEMENT. THIS GUARANTY, TOGETHER WITH THE CREDIT
AGREEMENT AND THE OTHER LOAN DOCUMENTS REPRESENT THE FINAL AGREEMENT BETWEEN THE
PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR
SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL
AGREEMENTS BETWEEN THE PARTIES. THIS INSTRUMENT MAY BE AMENDED ONLY BY AN
INSTRUMENT IN WRITING EXECUTED BY THE PARTIES HERETO.
[Signatures on Next Page]
FORM OF GUARANTY
EXHIBIT A
PAGE A-8
IN WITNESS WHEREOF, each Guarantor has duly executed and delivered this
Guaranty as of the date and year first written above.
[GUARANTOR]
By:__________________________________
Name_________________________________
Title:_______________________________
Address for Notices:
_____________________________________
_____________________________________
_____________________________________
Attention:___________________________
Telecopier: (___)____________________
Telephone: (___)_____________________
FORM OF GUARANTY
EXHIBIT A
PAGE A-9
ANNEX I
FORM OF ACCESSION AGREEMENT
THIS ACCESSION AGREEMENT dated as of _________, _______, executed and
delivered by ________________, a (the "New Guarantor") in favor of (a) XXXXX
FARGO BANK, NATIONAL ASSOCIATION ("Lender") under that certain Revolving Credit
Agreement dated as of ____________, 2003 (as the same may be amended, restated,
supplemented or otherwise modified from time to time in accordance with its
terms, the "Credit Agreement"), by and between AmREIT, a Texas Real Estate
Investment Trust ("Borrower").
WHEREAS, pursuant to the Credit Agreement, Lender and the Issuing Bank
have agreed to make available to the Borrower certain financial accommodations
on the terms and conditions set forth in the Credit Agreement;
WHEREAS, the Borrower owns, directly or indirectly, ___% of the issued
and outstanding capital stock of; or other equity interest in, the New
Guarantor;
WHEREAS, the Borrower, the New Guarantor and the other Subsidiaries of
the Borrower though separate legal entities, are mutually dependent on each
other in the conduct of their respective businesses as an integrated operation
and have determined it to be in their mutual best interests to obtain financing
from Lender and the Issuing Bank through their collective efforts;
WHEREAS, the New Guarantor acknowledges that it will receive direct and
indirect benefits from Lender and the Issuing Bank making such financial
accommodations available to the Borrower under the Credit Agreement and,
accordingly, the New Guarantor is willing to guarantee the Borrower's
obligations to Lender and the Issuing Bank on the terms and conditions contained
herein, and
WHEREAS, the New Guarantor's execution and delivery of this Agreement
is a condition to Lender and the Issuing Bank continuing to make such financial
accommodations to the Borrower.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged by the New Guarantor, the New
Guarantor agrees as follows:
Section 1. Accession to Guaranty. The New Guarantor hereby agrees that
it is a "Guarantor" under that certain Guaranty dated as of _____________, 2003
(the "Guaranty"), made by each Subsidiary a party thereto in favor of Lender and
the Issuing Bank and assumes all obligations of a "Guarantor" thereunder, all as
if the New Guarantor had been an original signatory to the Guaranty. Without
limiting the generality of the foregoing, the New Guarantor hereby:
FORM OF GUARANTY
EXHIBIT A
PAGE A-10
(a) irrevocably and unconditionally guarantees the due and
punctual payment and performance when due, whether at stated maturity, by
acceleration or otherwise, of all Guaranteed Obligations;
(b) makes to Lender and the Issuing Bank as of the date hereof
each of the representations and warranties contained in Section 5 of the
Guaranty and agrees to be bound by each of the covenants contained in Section 6
of the Guaranty; and
(c) consents and agrees to each provision set forth in the
Guaranty.
Section 2. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF TEXAS.
Section 3. Definitions. Capitalized terms used herein and not otherwise
defined herein shall have their respective defined meanings given them in the
Credit Agreement.
Section 4. ENTIRE AGREEMENT. THIS ACCESSION AGREEMENT, TOGETHER WITH
THE GUARANTY, CREDIT AGREEMENT AND THE OTHER LOAN DOCUMENTS REPRESENT THE FINAL
AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO
UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES. THIS INSTRUMENT MAY BE AMENDED
ONLY BY AN INSTRUMENT IN WRITING EXECUTED BY THE PARTIES HERETO.
[Signatures on Next Page]
FORM OF GUARANTY
EXHIBIT A
PAGE A-11
IN WITNESS WHEREOF, the new Guarantor has caused this Accession
Agreement to be duly executed and delivered under seal by its duly authorized
officers as of the date first written above.
[NEW GUARANTOR]
By:__________________________________
Name_________________________________
Title:_______________________________
ATTEST:
By:__________________________________
Name_________________________________
Title:_______________________________
Address for Notices:
_____________________________________
_____________________________________
_____________________________________
Attention:___________________________
Telecopier: (___)____________________
Telephone: (___)_____________________
Accepted:
XXXXX FARGO BANK, NATIONAL
ASSOCIATION, as Lender
By:________________________________________
Name:______________________________________
Title:_____________________________________
FORM OF GUARANTY
EXHIBIT A
PAGE A-12
FORM OF REVOLVING NOTE
$20,000,000.00 Houston, Texas ____________, 2003
FOR VALUE RECEIVED, the undersigned, AmREIT, a Texas Real Estate
Investment Trust ("Borrower"), hereby unconditionally promises to pay to the
order of Xxxxx Fargo Bank, National Association (the "Lender"), at its Lending
Office at Xxxxx Fargo Bank, National Association, Disbursement and Operations
Center, 0000 Xxxx Xxxx Xxxxx, Xxxxx 000, Xx Xxxxxxx, Xxxxxxxxxx 00000 or at such
other address as may be specified by Lender to Borrower, the principal sum of
TWENTY MILLION AND NO/100 DOLLARS ($20,000,000.00), or such lesser amount as may
be the then outstanding and unpaid balance of all the Loans made by Lender to
the Borrower pursuant to, and in accordance with the terms of, the Credit
Agreement (hereinafter defined).
The Borrower further agrees to pay interest at said Lending Office, in
like money, on the unpaid principal amount owing hereunder from time to time on
the dates and at the rates and at the times specified in the Credit Agreement.
This Revolving Note is the "Revolving Note" referred to in that certain
Revolving Credit Agreement dated as of ___________, 2003 (as amended, restated,
supplemented or otherwise modified from time to time, the "Credit Agreement"),
by and between the Borrower and Lender, and is subject to, and entitled to, all
provisions and benefits thereof. Capitalized terms used herein and not defined
herein shall have the respective meanings given to such terms in the Credit
Agreement. The Credit Agreement, among other things, (a) provides for the making
of Loans by Lender to Borrower from time to time in an aggregate amount not to
exceed at any time outstanding the Dollar amount first above mentioned, (b)
permits the prepayment of the Loans by the Borrower subject to certain terms and
conditions and (c) provides for the acceleration of the Loans upon the
occurrence of certain specified events. This Revolving Note renews, extends and
modifies the indebtedness evidenced by that certain Third Amended and Restated
Promissory Note dated August 20, 2002, executed by Borrower to the order of
Lender in the maximum principal amount of $20,000,000.00.
It is expressly stipulated and agreed to be the intent of Borrower and
Lender at all times to comply strictly with the applicable Texas law (or
applicable United States federal law to the extent that it permits Lender to
contract for, charge, take, reserve or receive a greater amount of interest than
under Texas law) governing the maximum rate or amount of interest payable on
this Revolving Note or the Related Indebtedness (hereinafter defined). If the
applicable law is ever judicially interpreted so as to render usurious any
amount (i) contracted for, charged, taken, reserved or received pursuant to this
Revolving Note, any of the other Loan Documents or any other communication or
writing by or between Borrower and Lender related to the transaction or
transactions that are the subject matter of the Loan Documents, (ii) contracted
for, charged or received by reason of Lender's exercise of the option to
accelerate the maturity of this Revolving Note and/or the Related Indebtedness,
or (iii) Borrower will have paid or Lender will have received by reason of any
voluntary prepayment by Borrower of this Revolving Note and/or the Related
Indebtedness, then it is Borrower's and Lender's express intent that all amounts
charged in excess of the Maximum Lawful Rate shall be automatically canceled, ab
initio, and all
FORM OF REVOLVING NOTE
EXHIBIT B
PAGE B-1
amounts in excess of the Maximum Lawful Rate theretofore collected by Lender
shall be credited on the principal balance of this Revolving Note and/or the
Related Indebtedness (or, if this Revolving Note and all Related Indebtedness
have been or would thereby be paid in full, refunded to Borrower), and the
provisions of this Revolving Note and the other Loan Documents immediately be
deemed reformed and the amounts thereafter collectible hereunder and thereunder
reduced, without the necessity of the execution of any new document, so as to
comply with the applicable law, but so as to permit the recovery of the fullest
amount otherwise called for hereunder and thereunder; provided, however, if this
Revolving Note has been paid in full before the end of the stated term of this
Revolving Note, then Borrower and Lender agree that Lender shall, with
reasonable promptness after Lender discovers or is advised by Borrower that
interest was received in an amount in excess of the Maximum Lawful Rate, either
refund such excess interest to Borrower and/or credit such excess interest
against this Revolving Note and/or any Related Indebtedness then owing by
Borrower to Lender. Borrower hereby agrees that as a condition precedent to any
claim seeking usury penalties against Lender, Borrower will provide written
notice to Lender, advising Lender in reasonable detail of the nature and amount
of the violation, and Lender shall have sixty (60) days after receipt of such
notice in which to correct such usury violation, if any, by either refunding
such excess interest to Borrower or crediting such excess interest against this
Revolving Note and/or the Related Indebtedness then owing by Borrower to Lender.
All sums contracted for, charged or received by Lender for the use, forbearance
or detention of any debt evidenced by this Revolving Note and/or the Related
Indebtedness shall, to the extent permitted by applicable law, be amortized or
spread, using the actuarial method, throughout the stated term of this Revolving
Note and/or the Related Indebtedness (including any and all renewal and
extension periods) until payment in full so that the rate or amount of interest
on account of this Revolving Note and/or the Related Indebtedness does not
exceed the Maximum Lawful Rate from time to time in effect and applicable to
this Revolving Note and/or the Related Indebtedness for so long as debt is
outstanding. In no event shall the provisions of Chapter 346 of the Texas
Finance Code (which regulates certain revolving credit loan accounts and
revolving triparty accounts) apply to this Revolving Note and/or the Related
Indebtedness. Notwithstanding anything to the contrary contained herein or in
any of the other Loan Documents, it is not the intention of Lender to accelerate
the maturity of any interest that has not accrued at the time of such
acceleration or to collect unearned interest at the time of such acceleration.
Borrower and Lender hereby agree that any and all suits alleging the contracting
for, charging or receiving of usurious interest shall lie in Xxxxxx County,
Texas, and each irrevocably waive the right to venue in any other county.
As used herein, the term "Maximum Lawful Rate" shall mean the maximum
lawful rate of interest which may be contracted for, charged, taken, received or
reserved by Lender in accordance with the applicable laws of the State of Texas
(or applicable United States federal law to the extent that it permits Lender to
contract for, charge, take, receive or reserve a greater amount of interest than
under Texas law), taking into account all Charges (as herein defined) made in
connection with the transaction evidenced by this Revolving Note and the other
Loan Documents. As used herein, the term "Charges" shall mean all fees, charges
and/or any other things of value, if any, contracted for, charged, received,
taken or reserved by Lender in connection with the transactions relating to this
Revolving Note and the other Loan Documents, which are treated as interest under
applicable law. As used herein, the term "Related
FORM OF REVOLVING NOTE
EXHIBIT B
PAGE B-2
Indebtedness" shall mean any and all debt paid or payable by Borrower to Lender
pursuant to the Loan Documents or any other communication or writing by or
between Borrower and Lender related to the transaction or transactions that are
the subject matter of the Loan Documents, except such debt which has been paid
or is payable by Borrower to Lender under the Revolving Note.
To the extent that Lender is relying on Chapter 303 of the Texas
Finance Code to determine the Maximum Lawful Rate payable on this Revolving Note
and/or the Related Indebtedness, Lender will utilize the weekly ceiling from
time to time in effect as provided in such Chapter 303, as amended. To the
extent United States federal law permits Lender to contract for, charge, take,
receive or reserve a greater amount of interest than under Texas law, Lender
will rely on United States federal law instead of such Chapter 303 for the
purpose of determining the Maximum Lawful Rate. Additionally, to the extent
permitted by applicable law now or hereafter in effect, Lender may, at its
option and from time to time, utilize any other method of establishing the
Maximum Lawful Rate under such Chapter 303 or under other applicable law by
giving notice, if required, to Borrower as provided by applicable law now or
hereafter in effect.
Notwithstanding anything in this Revolving Note to the contrary, if at
any time (i) the interest rate provided for under this Revolving Note or any
other Loan Document (the "Stated Rate"), and (ii) the Charges computed over the
full term of this Revolving Note, exceed the Maximum Lawful Rate, then the rate
of interest payable hereunder, together with all Charges, shall be limited to
the Maximum Lawful Rate; provided, however, that any subsequent reduction in the
Stated Rate shall not cause a reduction of the rate of interest payable
hereunder below the Maximum Lawful Rate until the total amount of interest
earned hereunder, together with all Charges, equals the total amount of interest
which would have accrued at the Stated Rate if such interest rate had at all
times been in effect. Changes in the Stated Rate resulting from a fluctuations
in the rates used to calculate the Stated Rate shall be subject to the
provisions of this paragraph.
The holder hereof shall be entitled to the benefits of the other Loan
Documents (to the extent and with the effect as therein provided).
The Borrower hereby waives presentment, demand, protest and notice of
any kind, including without limitation notice of interest to accelerate and
notice of acceleration. No failure to exercise, and no delay in exercising any
rights hereunder on the part of the holder hereof shall operate as a waiver of
such rights.
Time is of the essence of this Revolving Note.
THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE
LAWS OF THE STATE OF TEXAS.
IN WITNESS WHEREOF, the undersigned has executed and delivered this
Revolving Note as of the date written above.
FORM OF REVOLVING NOTE
EXHIBIT B
PAGE B-3
AmREIT,
a Texas Real Estate Investment Trust
By:________________________
Name:______________________
Title:_____________________
FORM OF REVOLVING NOTE
EXHIBIT B
PAGE B-4
FORM OF NOTICE OF BORROWING
___________________, 200__
Xxxxx Fargo Bank, National Association
Disbursement and Operations Center
0000 Xxxx Xxxx Xxxxx, Xxxxx 000
Xx Xxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxx Xxxxxxx
Facsimile: (000) 000-0000
Ladies and Gentlemen:
Reference is made to that certain Revolving Credit Agreement dated as
of ______________, 2003, as amended (the "Credit Agreement"), by and between
AmREIT, a Texas Real Estate Investment Trust ("Borrower"), and Xxxxx Fargo Bank,
National Association ('Lender'). Capitalized terms used herein and not otherwise
defined herein, have their respective meanings given them in the Credit
Agreement.
1. Pursuant to Section 2.2 of the Credit Agreement, the Borrower
hereby requests that the Lender makes a Loan to the Borrower
in an amount equal to $_______________________.
2. The Borrower requests that the Loan be made available to the
Borrower on _________________, 200___.
3. The Borrower hereby requests that the requested Loan be of the
following Type:
[Check one box only]
[ ] Base Rate Loan
[ ] LIBOR Loan, with an initial Interest Period for a duration
of:
[Check one box only] [ ] one month
[ ] two months
[ ] three months
[ ] six months
4. The proceeds of the Loan will be used for the following:
__________________________________________________
__________________________________________________
__________________________________________________
The Borrower hereby certifies to Lender that as of the date hereof, as
of the date of the making of the requested Loan, and after making such Loan, (a)
no Default or Event of Default shall have occurred and be continuing and (b) the
representations and warranties of the Borrower
FORM OF NOTICE OF BORROWING
EXHIBIT C
PAGE C-1
contained in the Credit Agreement and the other Loan Documents are and shall be
true and correct in all material respects, except to the extent such
representations or warranties specifically relate to an earlier date or such
representations or warranties have become untrue by reason of events or
conditions otherwise permitted under the Credit Agreement or the other Loan
Documents.
AmREIT,
a Texas Real Estate Investment Trust
By:_______________________________
Name:_____________________________
Title:____________________________
FORM OF NOTICE OF BORROWING
EXHIBIT C
PAGE C-2
FORM OF NOTICE OF CONTINUATION
____________________, 200___
Xxxxx Fargo Bank, National Association
Disbursement and Operations Center
0000 Xxxx Xxxx Xxxxx, Xxxxx 000
Xx Xxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxx Xxxxxxx
Facsimile: (000) 000-0000
Ladies and Gentlemen:
Reference is made to that certain Revolving Credit Agreement dated as
of ________________, 2003, as amended (the "Credit Agreement"), by and between
AmREIT, a Texas Real Estate Investment Trust ("Borrower"), and Xxxxx Fargo Bank,
National Association (the "Lender"). Capitalized terms used herein, and not
otherwise defined herein, have their respective meanings given them in the
Credit Agreement.
Pursuant to Section 2.4 of the Credit Agreement, the Borrower hereby
requests a Continuation of a LIBOR Loan under the Credit Agreement, and in that
connection sets forth below the information relating to such Continuation as
required by such Section of the Credit Agreement:
1. The requested date of such Continuation is___________, 200___.
2. The aggregate principal amount of the LIBOR Loan subject to
the requested Continuation is $______________ and the portion
of such principal amount subject to such Continuation is
$_______________.
3. The current Interest Period of the Loan subject to such
Continuation ends on _________________, 200___.
4. The duration of the Interest Period for the Loan or portion
thereof subject to such Continuation is:
[Check one box only] [ ] one month
[ ] two months
[ ] three months
[ ] six months
The Borrower hereby certifies to Lender and the Issuing Bank that as of
the date hereof, as of the proposed date of the requested Continuation, and
after giving effect to such Continuation, no Event of Default shall have
occurred and be continuing.
FORM OF NOTICE OF CONTINUATION
EXHIBIT D
PAGE D-1
If notice of the requested Continuation was given previously by
telephone, this notice is to be considered the written confirmation of such
telephone notice required by Section 2.4 of the Credit Agreement.
AmREIT,
a Texas Real Estate Investment Trust
By:__________________________________
Name:________________________________
Title:_______________________________
FORM OF NOTICE OF CONTINUATION
EXHIBIT D
PAGE D-2
FORM OF NOTICE OF CONVERSION
_________________, 200___
Xxxxx Fargo Bank, National Association
Disbursement and Operations Center
0000 Xxxx Xxxx Xxxxx, Xxxxx 000
Xx Xxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxx Xxxxxxx
Facsimile: (000) 000-0000
Ladies and Gentlemen:
Reference is made to that certain Revolving Credit Agreement dated as
of _____________, 2003, as amended (the "Credit Agreement"), by and between
AmREIT, a Texas Real Estate Investment Trust ("Borrower"), and Xxxxx Fargo Bank,
National Association ("Lender"). Capitalized terms used herein, and not
otherwise defined herein, have their respective meanings given them in the
Credit Agreement.
Pursuant to Section 2.5 of the Credit Agreement, the Borrower hereby
requests a Conversion of a Loan of one Type into a Loan of another Type under
the Credit Agreement, and in that connection sets forth below the information
relating to such Conversion as required by such Section of the Credit Agreement:
1. The requested date of such Conversion is ________________, 200___.
2. The Type of Loan to be Converted pursuant hereto is currently:
[Check one box only] [ ] Base Rate Loan
[ ] LIBOR Loan
3. The aggregate principal amount of the Loan subject to the
requested Conversion is $______________ and the portion of
such principal amount subject to such Conversion is
$_________________.
4. The amount of such Loan to be so Converted is to be converted
into a Loan of the following Type:
[Check one box only] [ ] Base Rate Loan
[ ] LIBOR Loan, with an initial Interest
Period for a duration of:
[Check one box only] [ ] one month
[ ] two months
[ ] three months
[ ] six months
FORM OF NOTICE OF CONVERSION
EXHIBIT E
PAGE E-1
The Borrower hereby certifies to Lender and the Issuing Bank that as of
the date hereof, as of the proposed date of the requested Conversion, and after
giving effect to such Conversion, no Event of Default shall have occurred and be
continuing.
If notice of the requested Conversion was given previously by
telephone, this notice is to be considered the written confirmation of such
telephone notice required by Section 2.5 of the Credit Agreement.
AmREIT,
a Texas Real Estate Investment Trust
By:_________________________________
Name:_______________________________
Title:______________________________
FORM OF NOTICE OF CONVERSION
EXHIBIT E
PAGE E-2
FORM OF OPINION
________________, 2003
[NOTE: LENDER WILL ACCEPT BIFURCATED OPINIONS -
BORROWER TO PROPOSE FORMS]
Xxxxx Fargo Bank, National Association
0000 Xxxxxxxxx, 0xx Xxxxx
Xxxxxxx, Xxxxx 00000-0000
Re: $20,000,000.00 Revolving Credit Facility
Ladies and Gentlemen:
We have acted as counsel to AmREIT, a Texas Real Estate Investment
Trust (the "REIT"), and _____________(name all guarantors)_______________
(collectively, "Guarantors") in connection with the $20,000,000.00 revolving
credit facility provided pursuant to that certain Revolving Credit Agreement
dated as of _____________, 2003 (the "Agreement") by and between REIT and Xxxxx
Fargo Bank, National Association ("Lender"). This Opinion Letter (herein so
called) is furnished to you as required by Section 5.1(d) of the Agreement.
Capitalized terms used in this Opinion Letter and not defined herein are defined
as set forth in the Agreement.
Our opinions are limited in all respects to the substantive law of the
State of Texas and the federal law of the United States and we assume no
responsibility as to the applicability thereto, or the effect thereon, of the
laws of any other jurisdiction. [MODIFY IF GUARANTORS ARE INCORPORATED IN OTHER
STATES]
I.DOCUMENTS REVIEWED
A. DOCUMENTS REVIEWED--LOAN DOCUMENTS. As counsel to REIT, we have
reviewed the following documents and instruments (collectively, the "Transaction
Documents"):
1. Agreement;
2. Promissory Note, dated as of _____________, 2003,
executed by Borrower and payable to the order of
Lender in the maximum principal amount of
$20,000,000.00; and
3. Guaranty executed by Guarantors dated as of
__________, 2003.
B. DOCUMENTS REVIEWED--OTHER DOCUMENTS EXAMINED: In addition to the
Transaction Documents, other documents we have examined in rendering this
opinion, and upon which we have relied, include the following:
FORM OF OPINION
EXHIBIT F
PAGE F-1
1. [LIST ALL ORGANIZATIONAL DOCUMENTS, CERTIFICATES
AND RESOLUTIONS]
II. QUALIFICATIONS TO FACTUAL EXAMINATION;
RELIANCE ON LOCAL COUNSEL
We have been furnished with and examined originals or copies, certified
or otherwise identified to our satisfaction, of all such records of REIT,
agreements and other instruments, certificates of officers and representatives
of REIT, certificates of public officials, and other documents, and we have had
such discussions with appropriate officers of REIT as we have deemed necessary
or desirable as a basis for the opinions hereinafter expressed. As to questions
of fact material to such opinions, we have, where relevant facts were not
independently verified or established, relied upon certificates of and
discussions with officers of REIT.
III. ASSUMPTIONS
For purposes of this opinion, we have assumed: (i) the genuineness of
all signatures on all documents (other than REIT and the Guarantors on the
Transaction Documents); (ii) the authenticity of all documents submitted to us
as originals; (iii) the conformity to the originals of all documents submitted
to us as copies; (iv) the correctness and accuracy of all facts set forth in all
certificates and reports identified in this opinion; and (v) the due
authorization, execution, and delivery of and the validity and binding effect of
the Transaction Documents with regard to the parties to the Transaction
Documents other than REIT.
IV. OPINIONS
Based upon and subject to the foregoing and the other qualifications
and limitations stated in this Opinion Letter, we are of the opinion that:
1. REIT is duly organized and validly existing under the laws of the
State of Texas and is a real estate investment trust under Section 856 of the
Internal Revenue Code.
2. [RECITE ORGANIZATION, EXISTENCE AND GOOD STANDING OPINIONS FOR EACH
GUARANTOR]
3. REIT and the Guarantors have the corporate power and authority to
execute, deliver, and perform their respective obligations under the Transaction
Documents to which they are a party. The Transaction Documents to which either
REIT or the Guarantors are a party have been duly authorized by all necessary
corporate action on the part of such Person and have been duly executed and
delivered by such Person.
4. The Transaction Documents to which REIT or the Guarantors are a
party are enforceable against such Person.
5. The execution and delivery by REIT and the Guarantors, as
applicable, of, and performance of their agreements in, the Transaction
Documents to which either Person is a party do not (i) violate the trust
declaration, articles of incorporation or bylaws of such Person, breach,
FORM OF OPINION
EXHIBIT F
PAGE F-2
or result in a default under, any existing obligation of such Person under any
agreement binding on such Person, or (ii) breach or otherwise violate any
existing obligation of such Person.
6. The execution and delivery of the Transaction Documents to which
either REIT or the Guarantors are a party, the consummation of the transactions
contemplated thereby, and compliance by such Person with the provisions thereof
will not violate any Texas or federal statute or regulation.
7. No consent, approval, waiver, license or authorization or other
action by or filing with any governmental authority is required under Texas or
federal statutes or regulations in connection with the execution and delivery by
REIT or the Guarantors of the Transaction Documents to which such Person is a
party, except for those already obtained or completed.
8. The Transaction Documents are not usurious contracts.
V. ENFORCEABILITY LIMITATIONS
The opinions expressed in paragraph 3 are qualified and may be limited
as follows:
A. The enforceability of the Transaction Documents is subject to the
effect of bankruptcy, insolvency, reorganization, receivership, moratorium, or
other similar laws affecting the rights and remedies of creditors generally.
B. The enforceability of the Transaction Documents is subject to the
effect of general principles of equity.
The qualification of any opinion or statement herein by the use of the
words "to our knowledge" or "known to us" means that during the course of
representation as described in this Opinion Letter, no information has come to
the attention of the attorneys in this Firm which would give such attorneys
current actual knowledge of the existence of the facts so qualified. Except as
set forth herein, we have not undertaken any investigation to determine the
existence of such facts, and no inference as to our knowledge thereof shall be
drawn from the fact of our representation of any party or otherwise.
This Opinion Letter (i) has been furnished to Lender at its request,
and we consider it to be a confidential communication which may not be
furnished, reproduced, distributed or disclosed to anyone without our prior
written consent, (ii) is rendered solely for Lender's use in connection with the
above transaction, and may not be relied upon by any other person (other than an
assignee of Lender) or for any other purpose without our prior written consent,
(iii) is rendered as of the date hereof, and we undertake no, and hereby
disclaim any, obligation to advise you of any changes or any new developments
which might affect any matters or opinions set forth herein; and (iv) is limited
to the matters stated herein and no opinions may be inferred or implied beyond
the matters expressly stated herein.
FORM OF OPINION
EXHIBIT F
PAGE F-3
Very truly yours,
By:________________________
FORM OF OPINION
EXHIBIT F
PAGE F-4
FORM OF UNENCUMBERED POOL CERTIFICATE
Reference is made to that certain Revolving Credit Agreement dated as
of _____________, 2003 (the "Credit Agreement"), by and between AmREIT, a Texas
Real Estate Investment Trust ("Borrower") and Xxxxx Fargo Bank, National
Association ("Lender"). Capitalized terms used herein, and not otherwise defined
herein, have their respective meanings given them in the Credit Agreement.
1. Pursuant to Section 4.l(b)(ii) or Section 7.1(d), as applicable, of
the Credit Agreement, the undersigned hereby certifies to Lender that Schedule I
attached hereto accurately and completely sets forth, as of the date hereof: (i)
the identity of each Eligible Property as to which Borrower seeks Lender's
approval as a Pool Property, (ii) assuming the approval of each such Eligible
Property as a Pool Property, (A) on a pro forma basis the Maximum Loan
Availability, (B) the Occupancy Rate of such Property, and (C) the aggregate
Occupancy Rate of all Unencumbered Pool Properties, assuming the approval of
each such Eligible Property as a Pool Property.
The undersigned further certifies to Lender that as of the date hereof
(a) no Default or Event of Default has occurred and is continuing, and (b) the
representations and warranties of the Borrower contained in the Credit Agreement
and the other Loan Documents are true and correct in all material respects,
except to the extent such representations or warranties specifically relate to
an earlier date or such representations or warranties become untrue by reason of
events or conditions otherwise permitted under the Credit Agreement or the other
Loan Documents.
IN WITNESS WHEREOF, the undersigned has signed this Unencumbered Pool
Certificate on and as of __________, 200___.
___________________________________________
Name:______________________________________
Title: Chief Financial Officer of AmREIT,
a Texas Real Estate Investment Trust
FORM OF ENCUMBERED POOL CERTIFICATE
EXHIBIT G
PAGE G-1
FORM OF ELIGIBILITY CERTIFICATE
Reference is made to that certain Revolving Credit Agreement dated as
of ______________, 2003 (the "Credit Agreement"), by and between AmREIT, a Texas
Real Estate Investment Trust ("Borrower") and Xxxxx Fargo Bank, National
Association ("Lender"). Capitalized terms used herein, and not otherwise defined
herein, have their respective meanings given them in the Credit Agreement.
Pursuant to Section 4.1 (b)(iii) of the Credit Agreement, the
undersigned hereby certifies to Lender, with respect to each of the properties
listed on Schedule 1 attached hereto, that:
(a) such property is improved with one or more operating retail
properties.
(b) such property is 100% owned in fee simple by Borrower or by a
Wholly Owned Subsidiary designated as the owner of such property on Schedule 1.
Schedule 1 sets forth the capital structure of each such Wholly Owned
Subsidiary.
(c) (i) neither such property, nor any interest of Borrower or such
Wholly Owned Subsidiary therein, is subject to any Lien other than Permitted
Liens or to any agreement (other than the Credit Agreement or any other Loan
Document) that prohibits the creation of any Lien thereon as security for
Indebtedness; (ii) if such property is owned by a Wholly Owned Subsidiary: (A)
none of Borrower's direct or indirect ownership interest in such Wholly Owned
Subsidiary is subject to any Lien other than Permitted Liens or to any agreement
(other than the Credit Agreement or any other Loan Document) that prohibits the
creation of any Lien thereon as security for Indebtedness and (B) neither such
Wholly Owned Subsidiary, nor any other Wholly Owned Subsidiary through which
Borrower holds any indirect interest in such Wholly Owned Subsidiary, is subject
to any restriction of any kind which would limit its ability to pay or perform
its obligations under the Guaranty required to be delivered under the Credit
Agreement prior to its obligation to pay dividends or make any other
distribution on any of such Wholly Owned Subsidiary's capital stock or other
securities owned by Borrower or any other Wholly Owned Subsidiary of Borrower;
(iii) such property has an Occupancy Rate of at least 80%, and (iv) such
property is free of all structural defects, title defects, environmental
conditions or other adverse matters except for defects, conditions or matters
individually or collectively which are not material to the profitable operation
of such property.
(d) if such property were an Unencumbered Pool Property, the aggregate
Occupancy Rate of all Unencumbered Pool Properties as of the date hereof
(including all properties listed on Schedule 1), would not be less than ninety
percent (90%).
(e) (i) Borrower has obtained, with respect to such property, a
"Phase I" environmental assessment
(ii) Borrower has reviewed such assessments and believes it
reasonable to rely upon such assessments; and
FORM OF ELIGIBILITY CERTIFICATE
EXHIBIT H
PAGE H-1
(iii) such assessments do not (1) identify any contamination
or potential contamination that has resulted in, or that could reasonably be
anticipated to result in a materially adverse effect upon the condition, market
value, Net Operating Income or prospects of such property, (2) recommend that
any further material investigation be undertaken, or (3) identify any potential
or actual recognized environmental condition.
IN WITNESS WHEREOF, the undersigned has signed this Eligibility
Certificate on and as of ___________, 200___.
___________________________________________
Name:______________________________________
Printed:___________________________________
Title: Chief Financial Officer of AmREIT,
a Texas Real Estate Investment Trust
FORM OF ELIGIBILITY CERTIFICATE
EXHIBIT H
PAGE H-2
SCHEDULE 1
TO ELIGIBILITY CERTIFICATE
(A) Property Description [For each Property]
1. Property Name:
2. Owner: [If not Borrower, set forth capital structure of the owner]
3. Location: [Including City, State, County and address]
4. Environmental Information:
a. Date Phase I prepared:________________________________________
b. The Phase I was prepared by:__________________________________
5. Summary of Existing Tenants: [Including Rent Rolls in detail
satisfactory to Lender]
FORM OF ELIGIBILITY CERTIFICATE
EXHIBIT H
PAGE H-3
UNENCUMBERED POOL PROPERTIES AS OF AGREEMENT DATE
DATE SQUARE EXPIRATION
TENANT / ASSET LOCATION ACQUIRED FOOTAGE DATE
----------------------------------------------------------------------------------------------------------------------------
SINGLE-TENANT PROPERTIES
----------------------------------------------------------------------------------------------------------------------------
AFC, Inc. (AFCE) Xxxxxxx ,XX 7/19/1994 2,583 7/19/2014
----------------------------------------------------------------------------------------------------------------------------
Baptist Memorial Medical Plaza Memphis, TN 10/4/1991 15,000 8/31/2007
----------------------------------------------------------------------------------------------------------------------------
Blockbuster Video (Viacom, VIA) Oklahoma City, OK 12/19/1995 6,599 8/31/2005
----------------------------------------------------------------------------------------------------------------------------
Xxxxxxx Restaurants (TGI Friday's) Houston, TX 12/23/1993 8,500 1/31/2008
----------------------------------------------------------------------------------------------------------------------------
Comp USA (Guitar Center GTRC) Minnesota, MN 8/10/1994 15,000 8/31/2009
----------------------------------------------------------------------------------------------------------------------------
Footstar (FTS) Tucson, AZ 9/11/96 19,550 9/30/16
----------------------------------------------------------------------------------------------------------------------------
Golden Corral Houston, TX 8/20/1992 12,000 11/30/2007
----------------------------------------------------------------------------------------------------------------------------
Golden Corral Houston, TX 3/15/93 12,000 3/14/2008
----------------------------------------------------------------------------------------------------------------------------
Hollywood Entertainment Corp (HLYW) Lafayette, LA 10/31/97 7,488 9/24/12
----------------------------------------------------------------------------------------------------------------------------
IHOP Corporation (IHP) Topeka, KS 9/30/99 4,500 12/17/08
----------------------------------------------------------------------------------------------------------------------------
Xxxx in the Box Inc (JBX) Dallas, TX 7/21/1991 2,238 7/11/09
----------------------------------------------------------------------------------------------------------------------------
OfficeMax Inc (OMX) Dover, DE 5/15/98 23,500 4/1/13
----------------------------------------------------------------------------------------------------------------------------
Payless Shoesource Inc (PSS) Austin, TX 11/7/1991 4,000 1/30/2008
----------------------------------------------------------------------------------------------------------------------------
Pier One Imports Inc. (PIR) Longmont, CO 11/13/1997 8,014 2/29/2008
----------------------------------------------------------------------------------------------------------------------------
Radio Shack Corporation (RSH) Dallas, TX 6/15/94 5,200 11/30/06
----------------------------------------------------------------------------------------------------------------------------
Washington Mutual (WM) Houston, TX 12/11/96 3,685 12/31/11
----------------------------------------------------------------------------------------------------------------------------
Washington Mutual (WM) Woodlands, TX 9/23/96 3,685 9/30/11
----------------------------------------------------------------------------------------------------------------------------
Wellness Leasing, Inc. (Mem. Hermann Hospital) Sugarland, TX 1/16/1995 15,000 1/31/2009
----------------------------------------------------------------------------------------------------------------------------
MULTI-TENANT PROPERTIES
----------------------------------------------------------------------------------------------------------------------------
Xxxxxxxxxxx Medical - Texas Childrens Pediatrics Assoc Houston, TX 4/19/02 14,000 4/30/07
----------------------------------------------------------------------------------------------------------------------------
SCHEDULE 4.1
ENCUMBERED POOL PROPERTIES AS OF AGREEMENT DATE
OWNERSHIP STRUCTURE
Listed below is a complete corporate structure and ownership interests of
Borrower and all of its Subsidiaries as of the date hereto, including the
correct legal name of Borrower and each such Subsidiary, and Borrower's relative
equity interest in each Subsidiary:
[OWNERSHIP CHART]
SCHEDULE 6.2
OWNERSHIP STRUCTURE
INDEBTEDNESS AND GUARANTEES
SCHEDULE 6.6
INDEBTEDNESS & GUARANTIES
PROPERTY MANAGEMENT AGREEMENTS
AND OTHER MAJOR AGREEMENTS
SCHEDULE 6.7
MANAGEMENT AGREEMENTS AND OTHER MAJOR AGREEMENTS
INSURANCE
AmREIT
Unencumbered Pool Properties - Property Insurance
Schedule 6.15
DATE INSURANCE EXPIRATION
TENANT/ASSET CITY & STATE ACQ CARRIER DATE
------------ ------------ ----- ---------- ----------
I. Free Standing Properties
1 AFC, Inc. (AFCE) Atlanta GA 7/19/94 Marsh 12/19/03
2 Blockbuster Video (Viacom, VIA) Oklahoma City OK 12/19/95 USI Insurance Svcs of TX 11/10/03
3 Xxxxxxx Restaurants (TGI Fridays) Houston TX 12/23/93 Lexington Insurance Company 7/1/04
4 Comp USA (Guitar Ctr GTRC) Minnesota MN 3/16/94 Allianz Insurance Company 7/28/04
5 Wellness Leasing, Inc. (Mem. Hermann
Hospital) Sugar Land TX 1/16/95 Farmers Insurance Group 3/14/04
6 Footstar (FTS) Tucson AZ 9/11/96 Xxxxx USA, Inc. 7/30/04
7 Golden Corral Houston TX 3/26/92 Travelers Indemnity Co 3/31/04
8 Golden Corral Houston TX 3/15/93 Travelers Indemnity Co 3/31/04
9 Hollywood Entertainment Corp (HLYW) Lafayette LA 10/31/97 M L W Insurance (000) 000-0000 11/1/03
10 IHOP Corporation (IHP) Topeka KS 9/30/99 Federal Insurance 5/1/04
11 Xxxx in the Box, Inc. (JBX) Dallas TX 7/21/91 Xxxxx USA, Inc. 9/1/04
12 Office Max Dover DE 5/15/98 USI Insurance Svcs of TX 11/10/03
13 Payless Shoesource, Inc. (PSS) Austin TX 11/7/91 USI Insurance Svcs of TX 11/10/03
14 Pier One Imports Inc. (PIR) Longmont CO 11/13/97 USI Insurance Svcs of TX 11/10/03
15 Radio Shack Dallas TX 6/15/94 Liberty Mutual Insurance Co. 7/1/04
16 Washington Mutual (WM) Houston TX 12/11/96 Xxxxx USA, Inc. 3/1/04
17 Washington Mutual (WM) The Woodlands TX 9/23/96 Xxxxx USA, Inc. 3/1/04
00 Xxxxxxx Xxxxxxxx Xxxxxxx Xxxxx Xxxxxxx XX 16/4/91 Travelers P/C Corp 1/1/04
II. Multi-Tenant Properties
19 Xxxxxxxxxxx Medical - TCPA Houston TX 4/19/02 USI Insurance Svcs of TX 11/10/03
SCHEDULE 6.15
INSURANCE
