EXHIBIT 10.44
FOURTH AMENDED AND RESTATED
CREDIT AGREEMENT
(REVOLVING FACILITY)
AMONG
MHC OPERATING LIMITED PARTNERSHIP,
AN ILLINOIS LIMITED PARTNERSHIP,
AS BORROWER,
MANUFACTURED HOME COMMUNITIES, INC.,
A MARYLAND CORPORATION,
THE REIT
AND
THE FINANCIAL INSTITUTIONS PARTY HERETO, AS LENDERS
TOGETHER WITH THOSE ASSIGNEES
BECOMING PARTIES HERETO PURSUANT
TO SECTION 11.13, AS LENDERS,
XXXXX FARGO BANK, N.A.
AS ADMINISTRATIVE AGENT, SOLE LEAD ARRANGER,
SWINGLINE LENDER AND ISSUING LENDER,
BANK OF AMERICA, N.A.,
AS SYNDICATION AGENT,
AND
LASALLE BANK NATIONAL ASSOCIATION,
AS DOCUMENTATION AGENT
DATED AS OF DECEMBER 11, 2003
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TABLE OF CONTENTS
PAGE
ARTICLE I. DEFINITIONS........................................................................................... 2
1.01 Certain Defined Terms................................................................................... 2
1.02 Computation of Time Periods............................................................................. 23
1.03 Terms................................................................................................... 23
1.04 Interrelationship With the Existing Credit Agreement.................................................... 24
ARTICLE II. LOANS................................................................................................ 24
2.01 Loan Advances and Repayment............................................................................. 24
2.02 Authorization to Obtain Loans and Letters of Credit..................................................... 26
2.03 Interest on the Loans................................................................................... 26
2.04 Fees.................................................................................................... 31
2.05 Payments................................................................................................ 32
2.06 Increased Capital....................................................................................... 33
2.07 Notice of Increased Costs............................................................................... 33
2.08 Option to Replace Lenders............................................................................... 33
2.09 Letters of Credit....................................................................................... 34
2.10 Swingline Loans......................................................................................... 38
ARTICLE III. EXTENSION OPTION.................................................................................... 40
3.01 Extension Option........................................................................................ 41
ARTICLE IV. CONDITIONS TO LOANS.................................................................................. 41
4.01 Intentionally Omitted................................................................................... 41
4.02 Conditions Precedent to All Loans and Issuance of Letters of Credit..................................... 41
ARTICLE V. REPRESENTATIONS AND WARRANTIES........................................................................ 42
5.01 Representations and Warranties as to Borrower........................................................... 42
5.02 Representations and Warranties as to the REIT........................................................... 47
ARTICLE VI. REPORTING COVENANTS.................................................................................. 51
6.01 Financial Statements and Other Financial and Operating Information...................................... 51
6.02 Press Releases; SEC Filings and Financial Statements.................................................... 53
6.03 Environmental Notices................................................................................... 53
6.04 Qualifying Unencumbered Properties...................................................................... 53
ARTICLE VII. AFFIRMATIVE COVENANTS............................................................................... 54
7.01 With respect to Borrower:............................................................................... 54
7.02 With respect to the REIT:............................................................................... 56
ARTICLE VIII. NEGATIVE COVENANTS................................................................................. 58
8.01 With respect to Borrower:............................................................................... 58
8.02 With respect to the REIT:............................................................................... 63
ARTICLE IX. FINANCIAL COVENANTS.................................................................................. 65
9.01 Total Liabilities to Gross Asset Value.................................................................. 65
9.02 EBITDA to Fixed Charges Ratio........................................................................... 65
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9.03 Unencumbered Net Operating Income to Unsecured Interest Expense......................................... 65
9.04 Unencumbered Pool....................................................................................... 65
9.05 Minimum Net Worth....................................................................................... 65
9.06 Permitted Holdings...................................................................................... 65
9.07 Calculation............................................................................................. 67
ARTICLE X. EVENTS OF DEFAULT; RIGHTS AND REMEDIES................................................................ 67
10.01 Events of Default....................................................................................... 67
10.02 Rights and Remedies..................................................................................... 71
10.03 Rescission.............................................................................................. 72
10.04 Suspension of Lending................................................................................... 72
ARTICLE XI. AGENCY PROVISIONS.................................................................................... 72
11.01 Appointment............................................................................................. 72
11.02 Nature of Duties........................................................................................ 72
11.03 Loan Disbursements...................................................................................... 73
11.04 Distribution and Apportionment of Payments.............................................................. 74
11.05 Rights, Exculpation, Etc................................................................................ 75
11.06 Reliance................................................................................................ 76
11.07 Indemnification......................................................................................... 76
11.08 Agent Individually...................................................................................... 76
11.09 Successor Agent; Resignation of Agent; Removal of Agent................................................. 76
11.10 Consents and Approvals.................................................................................. 77
11.11 [Intentionally Omitted]................................................................................. 78
11.12 [Intentionally Omitted]................................................................................. 79
11.13 Assignments and Participations.......................................................................... 79
11.14 Ratable Sharing......................................................................................... 81
11.15 Delivery of Documents................................................................................... 82
11.16 Notice of Events of Default............................................................................. 82
ARTICLE XII. MISCELLANEOUS....................................................................................... 82
12.01 Expenses................................................................................................ 82
12.02 Indemnity............................................................................................... 83
12.03 Change in Accounting Principles......................................................................... 84
12.04 Setoff.................................................................................................. 85
12.05 Amendments and Waivers.................................................................................. 85
12.06 Independence of Covenants............................................................................... 86
12.07 Notices and Delivery.................................................................................... 86
12.08 Survival of Warranties, Indemnities and Agreements...................................................... 87
12.09 Failure or Indulgence Not Waiver; Remedies Cumulative................................................... 87
12.10 Marshalling; Recourse to Security; Payments Set Aside................................................... 87
12.11 Severability............................................................................................ 87
12.12 Headings................................................................................................ 87
12.13 Governing Law........................................................................................... 87
12.14 Limitation of Liability................................................................................. 88
12.15 Successors and Assigns.................................................................................. 88
12.16 Usury Limitation........................................................................................ 88
12.17 Confidentiality......................................................................................... 88
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12.18 Consent to Jurisdiction and Service of Process; Waiver of Jury Trial; Waiver Of
Permissive Counterclaims................................................................................ 89
12.19 Counterparts; Effectiveness; Inconsistencies............................................................ 90
12.20 Construction............................................................................................ 90
12.21 Entire Agreement........................................................................................ 90
12.22 Agent's Action for Its Own Protection Only.............................................................. 90
12.23 Lenders' ERISA Covenant................................................................................. 91
12.24 Sole Lead Arranger, Documentation Agent and Syndication Agent........................................... 91
EXHIBITS
A - Assignment and Assumption
B - REIT Guaranty
C - [Intentionally Deleted]
D - Revolving Loan Notes
E - Swingline Note
F - Qualifying Unencumbered Properties
G - Letter of Credit Note
H - Letter of Credit Application
I - Notice of Borrowing
J - Notice of Continuation/Conversion
SCHEDULES
5.01(c) - Ownership of Borrower
5.01(r) - Environmental Matters
5.01(w) - Subsidiaries and Investment Affiliates
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FOURTH AMENDED AND RESTATED CREDIT AGREEMENT
THIS FOURTH AMENDED AND RESTATED CREDIT AGREEMENT is dated as
of December 11, 2003 (as amended, supplemented or modified from time to time,
the "Agreement") and is among MHC Operating Limited Partnership, an Illinois
limited partnership ("Borrower"), Manufactured Home Communities, Inc., a
Maryland corporation (the "REIT"), each of the Lenders, as hereinafter defined,
Xxxxx Fargo Bank, N.A ("Xxxxx Fargo") in its capacity as Agent, as Sole Lead
Arranger, as Swingline Lender, as Issuing Lender and as a Lender, Bank of
America, N.A., as Syndication Agent and as a Lender, LaSalle Bank National
Association, as Documentation Agent and as a Lender, and SouthTrust, N.A., as a
Lender.
RECITALS
A. Borrower, the REIT and Xxxxx Fargo Realty Advisors
Funding Incorporated ("WFRAF"), in its capacity as Agent and as the sole Lender,
have previously entered into that certain Credit Agreement dated as of August
16, 1994 (the "Original Credit Agreement").
B. The Original Credit Agreement was amended and
restated in its entirety by that certain First Amended and Restated Credit
Agreement dated as of September 26, 1994 (the "First Amended Credit Agreement")
by and among Borrower, the REIT, WFRAF, as Agent and as a Lender, and Bank of
America Illinois, as Co-Agent and as a Lender.
C. The First Amended Credit Agreement was amended and
restated in its entirety by that certain Second Amended and Restated Credit
Agreement dated as of April 28, 1998 (the "Second Amended Credit Agreement") by
and among Borrower, the REIT, Xxxxx Fargo (as successor in interest to WFRAF),
as Agent, Swingline Lender, Issuing Lender, and a Lender, Bank of America
National Trust and Savings Association, as Syndication Agent and as a Lender,
Xxxxxx Guaranty Trust Company of New York, as Documentation Agent and as a
Lender, and Commerzbank Aktiengesellschaft, New York Branch, as a Lender.
D. The Second Amended Credit Agreement was amended and
restated in its entirety by that certain Third Amended and Restated Credit
Agreement dated as of February 11, 2002 (as amended as described below, the
"Existing Credit Agreement") by and among Borrower, the REIT, Xxxxx Fargo (as
successor in interest to WFRAF), as Agent, Swingline Lender, Issuing Lender, and
a Lender, Bank of America, N.A., as Syndication Agent and as a Lender, LaSalle
Bank National Association, as Documentation Agent and as a Lender, and
Commerzbank Aktiengesellschaft, New York Branch, as a Lender.
E. Pursuant to that certain Assignment and Assumption,
dated as of August 30, 2002, by and between Bank of America, N.A. and
SouthTrust, N.A., Bank of America, N.A. assigned to SouthTrust, N.A. a
10.000000000% interest in the Loan and the Facility, as defined in the Existing
Credit Agreement.
F. Pursuant to that certain First Amendment to Third
Amended and Restated Credit Agreement, dated as of the date hereof, the maximum
amount of the Facility (as defined in the Existing Credit Agreement) was reduced
and the Commitment of Commerzbank Aktiengesellschaft, New York Branch, was
terminated.
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G. Borrower, the REIT, Xxxxx Fargo, as Agent, Sole Lead
Arranger, Swingline Lender, Issuing Lender and as a Lender, Bank of America,
N.A., as Syndication Agent and as a Lender, LaSalle Bank National Association,
as Documentation Agent and as a Lender and the other Lenders desire to further
amend and restate the Existing Credit Agreement in its entirety to make certain
modifications as hereinafter set forth.
NOW THEREFORE, for good and valuable consideration, the
receipt and adequacy of which are hereby acknowledged, the parties hereto agree
as follows:
AGREEMENT
ARTICLE I.
DEFINITIONS
1.01 Certain Defined Terms. The following terms used in
this Agreement shall have the following meanings (such meanings to be
applicable, except to the extent otherwise indicated in a definition of a
particular term, both to the singular and the plural forms of the terms
defined):
"Accommodation Obligations" as applied to any Person, means
any obligation, contingent or otherwise, of that Person in respect of which that
Person is liable for any Indebtedness or other obligation or liability of
another Person, including without limitation and without duplication (i) any
such Indebtedness, obligation or liability directly or indirectly guaranteed,
endorsed (otherwise than for collection or deposit in the ordinary course of
business), co-made or discounted or sold with recourse by that Person, or in
respect of which that Person is otherwise directly or indirectly liable,
including Contractual Obligations (contingent or otherwise) arising through any
agreement to purchase, repurchase or otherwise acquire such Indebtedness,
obligation or liability or any security therefor, or to provide funds for the
payment or discharge thereof (whether in the form of loans, advances, stock
purchases, capital contributions or otherwise), or to maintain solvency, assets,
level of income, or other financial condition, or to make payment other than for
value received and (ii) any obligation of such Person arising through such
Person's status as a general partner of a general or limited partnership with
respect to any Indebtedness, obligation or liability of such general or limited
partnership.
"Accountants" means any nationally recognized independent
accounting firm.
"Adjusted Asset Value" means, as of any date of determination,
(i) for any Property for which an acquisition or disposition by Borrower or any
Subsidiary has not occurred in the Fiscal Quarter most recently ended as of such
date, the quotient of EBITDA attributable to such Property in a manner
reasonably acceptable to Agent for the then most recently ended twelve (12)
calendar month period divided by seven hundred fifty ten-thousandths (0.0750),
and (ii) for any Property which has been acquired by Borrower or any Subsidiary
in the Fiscal Quarter most recently ended as of such date, the Net Price of the
Property paid by Borrower or such Subsidiary for such Property.
"Affiliates" as applied to any Person, means any other Person
directly or indirectly controlling, controlled by, or under common control with,
that Person. For purposes of this definition, "control" (including with
correlative meanings, the terms "controlling,"
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"controlled by" and "under common control with"), as applied to any Person,
means (a) the possession, directly or indirectly, of the power to vote
twenty-five percent (25%) or more of the Securities having voting power for the
election of directors of such Person or otherwise to direct or cause the
direction of the management and policies of that Person, whether through the
ownership of voting Securities or by contract or otherwise, (b) the ownership of
a general partnership interest in such Person or (c) the ownership of
twenty-five percent (25%) or more of the limited partnership interests (or other
ownership interests with similarly limited voting rights) in such Person;
provided, however, that in no event shall the Affiliates of Borrower or any
Subsidiary or any Investment Affiliate include Persons holding direct or
indirect ownership interests in the REIT or any other real estate investment
trust which holds a general partnership interest in Borrower if such Person does
not otherwise constitute an "Affiliate" hereunder; provided, further, that the
REIT and Borrower shall at all times be deemed Affiliates of each other.
"Agent" means Xxxxx Fargo in its capacity as administrative
agent for the Lenders under this Agreement, and shall include any successor
Agent appointed pursuant hereto and shall be deemed to refer to Xxxxx Fargo in
its individual capacity as a Lender where the context so requires.
"Agreement" has the meaning ascribed to such term in the
preamble hereto.
"Agreement Party" means any Person, other than the REIT and
Borrower, which concurrently with the execution of this Agreement or hereafter
executes and delivers a guaranty in connection with this Agreement, which as of
the date of determination, is in force and effect.
"Applicable Margin" means, for any day, the rate per annum set
forth below opposite the applicable Level Period then in effect:
Level Period Applicable Margin
Level I Period 1.25%
Level II Period 1.45%
Level III Period 1.65%
The Applicable Margin shall be adjusted for all purposes quarterly as soon as
reasonably practicable, but not later than five (5) days, after the date of
receipt by Agent of the quarterly financial information in accordance with the
provisions of Section 6.01(a) hereof, together with a calculation by Borrower of
the ratio of Total Liabilities to the sum of Gross Asset Values for Borrower and
each of its Subsidiaries as of the end of the applicable Fiscal Quarter. No
adjustment in the Applicable Margin shall be made retroactively.
"Assignment and Assumption" means an Assignment and Assumption
in the form of Exhibit A hereto (with blanks appropriately filled in) delivered
to Agent in connection with each assignment of a Lender's interest under this
Agreement pursuant to Section 11.13.
"Balloon Payment" means, with respect to any loan constituting
Indebtedness, any required principal payment of such loan which is either (i)
payable at the maturity of such
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loan or (ii) in an amount which exceeds twenty-five percent (25%) of the
original principal amount of such loan; provided, however, that the final
payment of a fully amortizing loan shall not constitute a Balloon Payment.
"Base Rate" means, on any day, a fluctuating interest rate per
annum as shall be in effect from time to time, which rate shall at all times be
equal to the higher of (a) the base rate of interest per annum established from
time to time by Xxxxx Fargo, and designated as its prime rate and in effect on
such day, and (b) the Federal Funds Rate as announced by the Federal Reserve
Bank of New York, in effect on such day plus one half percent (0.5%) per annum.
Each change in the Base Rate shall become effective automatically as of the
opening of business on the date of such change in the Base Rate, without prior
written notice to Borrower or Lenders. The Base Rate may not be the lowest rate
of interest charged by any bank, Agent or Lender on similar loans.
"Base Rate Loans" means those Loans bearing interest at the
Base Rate.
"Base Rent" means the aggregate rent received, on a
consolidated basis, by Borrower or any Subsidiary from tenants which lease
manufactured home community sites owned by Borrower or any Subsidiary minus any
amounts specifically identified as and representing payments for trash removal,
cable television, water, electricity, other utilities, taxes and other rent
which reimburses expenses related to the tenant's occupancy.
"Benefit Plan" means any employee pension benefit plan as
defined in Section 3(2) of ERISA (other than a Multiemployer Plan) which a
Person or any ERISA Affiliate maintains, administers, contributes to or is
required to contribute to, or, within the immediately preceding five (5) years,
maintained, administered, contributed to or was required to contribute to, or
under which a Person or any ERISA Affiliate may have any liability.
"Borrower" has the meaning ascribed to such term in the
preamble hereto.
"Borrower Plan" shall mean any Plan (A) which Borrower, any of
its Subsidiaries or any of its ERISA Affiliates maintains, administers,
contributes to or is required to contribute to, or, within the five years prior
to the Closing Date, maintained, administered, contributed to or was required to
contribute to, or under which Borrower, any of its Subsidiaries or any of its
ERISA Affiliates may incur any liability and (B) which covers any employee or
former employee of Borrower, any of its Subsidiaries or any of its ERISA
Affiliates (with respect to their relationship with such entities).
"Borrower's Adjusted Share" means Borrower's and/or the REIT's
collective direct or indirect share of the assets, liabilities, income, expenses
or expenditures, as applicable, of an Investment Affiliate based upon the
greater of (i) Borrower's and/or the REIT's percentage ownership (whether direct
or indirect) of such Investment Affiliate, as provided in the charter and
by-laws, partnership agreements or other organizational or governing documents
of such Investment Affiliate and (ii) Borrower's and/or the REIT's percentage
ownership (whether direct or indirect) of such Investment Affiliate, based upon
its effective economic ownership of such Investment Affiliate. For purposes of
determining Borrower's Adjusted Share, at any time that Newco REIT owns any
general partnership interest in Borrower in accordance with the terms
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and conditions of this Agreement, the REIT shall be deemed to own one hundred
percent (100%) of all ownership interests in Newco REIT.
"Borrower's Share" means Borrower's and/or the REIT's
collective direct or indirect share of the assets, liabilities, income, expenses
or expenditures, as applicable, of an Investment Affiliate based upon Borrower's
and/or the REIT's percentage ownership (whether direct or indirect) of such
Investment Affiliate, as the case may be. For purposes of determining Borrower's
Share, at any time that Newco REIT owns any general partnership interest in
Borrower in accordance with the terms and conditions of this Agreement, the REIT
shall be deemed to own one hundred percent (100%) of all ownership interests in
Newco REIT.
"Borrowing" means a borrowing under the Facility.
"Business Day" means (a) with respect to any Borrowing,
payment or rate determination of LIBOR Loans, a day, other than a Saturday or
Sunday, on which Agent is open for business in Chicago and San Francisco and on
which dealings in Dollars are carried on in the London inter bank market, and
(b) for all other purposes any day excluding Saturday, Sunday and any day which
is a legal holiday under the laws of the States of California and Illinois, or
is a day on which banking institutions located in California and Illinois are
required or authorized by law or other governmental action to close.
"Capital Expenditures" means, as applied to any Person for any
period, the aggregate of all expenditures (whether paid in cash or accrued as
liabilities during that period and including that portion of Capital Leases
which is capitalized on the balance sheet of a Person) by such Person during
such period that, in conformity with GAAP, are required to be included in or
reflected by the property, plant or equipment or similar fixed asset accounts
reflected in the balance sheet of such Person, excluding any expenditures
reasonably determined by such Person as having been incurred for expansion of
the number of manufactured home sites at a manufactured home community owned by
such Person.
"Capital Leases," as applied to any Person, means any lease of
any property (whether real, personal or mixed) by that Person as lessee which,
in conformity with GAAP, is or should be accounted for as a capital lease on the
balance sheet of that Person.
"Cash Equivalents" means (a) marketable direct obligations
issued or unconditionally guaranteed by the United States Government or issued
by an agency thereof and backed by the full faith and credit of the United
States, in each case maturing within one (1) year after the date of acquisition
thereof; (b) marketable direct obligations issued by any state of the United
States of America or any political subdivision of any such state or any public
instrumentality thereof maturing within ninety (90) days after the date of
acquisition thereof and, at the time of acquisition, having one of the two
highest ratings obtainable from any two nationally recognized rating services
reasonably acceptable to Agent; (c) domestic corporate bonds, other than
domestic corporate bonds issued by Borrower or any of its Affiliates, maturing
no more than 2 years after the date of acquisition thereof and, at the time of
acquisition, having a rating of at least A or the equivalent from two nationally
recognized rating services reasonably acceptable to Agent; (d) variable-rate
domestic corporate notes or medium term corporate notes, other than notes issued
by Borrower or any of its Affiliates, maturing or resetting no more than 1 year
after the date of acquisition thereof and having a rating of at least AA or the
equivalent from
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two nationally recognized rating services reasonably acceptable to Agent; (e)
commercial paper (foreign and domestic) or master notes, other than commercial
paper or master notes issued by Borrower or any of its Affiliates, and, at the
time of acquisition, having a long-term rating of at least A or the equivalent
from a nationally recognized rating service reasonably acceptable to Agent and
having a short-term rating of at least A-1 and P-1 from S&P and Xxxxx'x,
respectively (or, if at any time neither S&P nor Xxxxx'x shall be rating such
obligations, then the highest rating from such other nationally recognized
rating services reasonably acceptable to Agent); (f) domestic and Eurodollar
certificates of deposit or domestic time deposits or Eurotime deposits or
bankers' acceptances (foreign or domestic) that are issued by a bank (I) which
has, at the time of acquisition, a long-term rating of at least A or the
equivalent from a nationally recognized rating service reasonably acceptable to
Agent and (II) if a domestic bank, which is a member of the FDIC; and (g)
overnight securities repurchase agreements, or reverse repurchase agreements
secured by any of the foregoing types of securities or debt instruments,
provided that the collateral supporting such repurchase agreements shall have a
value not less than 101% of the principal amount of the repurchase agreement
plus accrued interest.
"Closing Date" means the date on which this Agreement shall
become effective in accordance with Section 12.19, which date shall be December
11, 2003 or such later date as to which Agent and Borrower agree in writing.
"Commission" means the Securities and Exchange Commission.
"Commitment" means, with respect to any Lender, such Lender's
Pro Rata Share of the Facility which amount shall not exceed the principal
amount set out under such Lender's name under the heading "Loan Commitment" on
the counterpart signature pages attached to this Agreement or as set forth on an
Assignment and Assumption executed by such Lender, as assignee, as such amount
may be adjusted pursuant to the terms of this Agreement.
"Contaminant" means any pollutant (as that term is defined in
42 U.S.C. 9601(33)) or toxic pollutant (as that term is defined in 33 U.S.C.
1362(13)), hazardous substance (as that term is defined in 42 U.S.C. 9601(14)),
hazardous chemical (as that term is defined by 29 C.F.R. Section 1910.1200(c)),
toxic substance, hazardous waste (as that term is defined in 42 U.S.C. 6903(5)),
radioactive material, special waste, petroleum (including crude oil or any
petroleum-derived substance, waste, or breakdown or decomposition product
thereof), or any constituent of any such substance or waste, including, but not
limited to hydrocarbons (including naturally occurring or man-made petroleum and
hydrocarbons), flammable explosives, urea formaldehyde insulation, radioactive
materials, biological substances, PCBs, pesticides, herbicides, asbestos, sewage
sludge, industrial slag, acids, metals, or solvents.
"Contractual Obligation," as applied to any Person, means any
provision of any Securities issued by that Person or any indenture, mortgage,
deed of trust, lease, contract, undertaking, document or instrument to which
that Person is a party or by which it or any of its properties is bound, or to
which it or any of its properties is subject (including without limitation any
restrictive covenant affecting such Person or any of its properties).
"Controlled Ownership Interests" means ownership interests in
a Person where the REIT or Borrower (independently or collectively) has control
over the management and operations of such Person.
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"Convertible Securities" means evidences of indebtedness,
shares of stock, limited or general partnership interests or other ownership
interests, warrants, options, or other rights or securities which are
convertible into or exchangeable for, with or without payment of additional
consideration, shares of common stock of the REIT or partnership interests of
Borrower, as the case may be, either immediately or upon the arrival of a
specified date or the happening of a specified event.
"Court Order" means any judgment, writ, injunction, decree,
rule or regulation of any court or Governmental Authority binding upon the
Person in question.
"Debt Service" means, for any period, Interest Expense for
such period plus scheduled principal amortization (exclusive of Balloon
Payments) for such period on all Indebtedness of the REIT, on a consolidated
basis.
"Defaulting Lender" means any Lender which fails or refuses to
perform its obligations under this Agreement within the time period specified
for performance of such obligation or, if no time frame is specified, if such
failure or refusal continues for a period of two (2) Business Days after written
notice from Agent.
"Development Activity" means construction in process, that is
being performed by or at the direction of Borrower, any Subsidiary or any
Investment Affiliate, of any manufactured home community that will be owned and
operated by Borrower, any Subsidiary or any Investment Affiliate upon completion
of construction, including construction in process of manufactured home
communities not owned by Borrower, any Subsidiary or any Investment Affiliate
but which Borrower, any Subsidiary or any Investment Affiliate has the
contractual obligation to purchase, but excluding construction in process for
the purpose of expanding manufactured home communities that have been operated
for at least one (1) year prior to the commencement of such expansion.
"Documentation Agent" means LaSalle Bank National Association
in its capacity as documentation agent for the Lenders under this Agreement.
"DOL" means the United States Department of Labor and any
successor department or agency.
"Dollars" and "$" means the lawful money of the United States
of America.
"EBITDA" means, for any period and without duplication (i) Net
Income for such period, plus (ii) depreciation and amortization expense and
other non-cash items deducted in the calculation of Net Income for such period,
plus (iii) Interest Expense deducted in the calculation of Net Income for such
period, plus, (iv) Taxes deducted in the calculation of Net Income for such
period, minus (v) the gains (and plus the losses) from extraordinary or unusual
items or asset sales or write-ups or forgiveness of indebtedness included in the
calculation of Net Income, for such period, minus (vi) earnings of Subsidiaries
for such period distributed to third parties, plus (or minus in the case of a
loss) (vii) Borrower's Share of the net income (or loss) of each Investment
Affiliate for such period calculated in conformity with GAAP before
depreciation, minus (or plus in the case of a loss) (viii) Borrower's Share of
the gains (or losses) from extraordinary or unusual items or asset sales or
write-ups or forgiveness of indebtedness included in the calculation of the net
income of each Investment Affiliate for such period.
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"Eligible Assignee" means any Person that is: (a) an existing
Lender; (b) a commercial bank, trust company, savings and loan association,
savings bank, insurance company, investment bank or pension fund organized under
the laws of the United States of America, any state thereof or the District of
Columbia, and having total assets in excess of $5,000,000,000; or (c) a
commercial bank organized under the laws of any other country which is a member
of the Organization for Economic Co-operation and Development, or a political
subdivision of any such country, and having total assets in excess of
$10,000,000,000, provided that such bank is acting through a branch or agency
located in the United States of America. If such entity is not currently a
Lender, such entity's (or in the case of a bank which is a subsidiary, such
bank's parent's) senior unsecured long term indebtedness must be rated BBB or
higher by S&P, Baa2 or higher by Moody's or the equivalent or higher of either
such rating by another rating agency acceptable to the Agent.
"Environmental Laws" means all federal, state, district, local
and foreign laws, and all orders, consent orders, judgments, notices, permits or
demand letters issued, promulgated or entered thereunder, relating to pollution
or protection of the environment, including laws relating to emissions,
discharges, releases or threatened releases of pollutants, contamination,
chemicals, or industrial substances or Contaminants into the environment
(including, without limitation, ambient air, surface water, ground water, land
surface or subsurface strata) or otherwise relating to the generation,
manufacture, processing, distribution, use, treatment, storage, disposal,
transport or handling of pollutants, contamination, chemicals, industrial
substances or Contaminants. The term Environmental Laws shall include, without
limitation, the Comprehensive Environmental Response, Compensation and Liability
Act of 1980, as amended ("CERCLA"); the Toxic Substances Control Act, as
amended; the Hazardous Materials Transportation Act, as amended; the Resource
Conservation and Recovery Act, as amended ("RCRA"); the Clean Water Act, as
amended; the Safe Drinking Water Act, as amended; the Clean Air Act, as amended;
all analogous state laws; the plans, rules, regulations or ordinances adopted,
or other criteria and guidelines promulgated pursuant to the preceding laws or
other similar laws, regulations, rules or ordinances now or hereafter in effect
regulating public health, welfare or the environment.
"Environmental Lien" means a Lien in favor of any Governmental
Authority for (a) any liability under federal or state Environmental Laws or
regulations, or (b) damages arising from, or costs incurred by such Governmental
Authority in response to, a Release or threatened Release of a Contaminant into
the environment
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended from time to time, and any successor statute.
"ERISA Affiliate" means any (a) corporation which is, becomes,
or is deemed by any Governmental Authority to be a member of the same controlled
group of corporations (within the meaning of Section 414(b) of the Internal
Revenue Code) as a Person or is so deemed by such Person, (b) partnership, trade
or business (whether or not incorporated) which is, becomes or is deemed by any
Governmental Authority to be under common control (within the meaning of Section
414(c) of the Internal Revenue Code) with such Person or is so deemed by such
Person, (c) any Person which is, becomes or is deemed by any Governmental
Authority to be a member of the same "affiliated service group" (as defined in
Section 414(m) of the Internal Revenue Code) as such Person or is so deemed by
such Person, or (d) any other organization or
8
arrangement described in Section 414(o) of the Internal Revenue Code which is,
becomes or is deemed by such Person or by any Governmental Authority to be
required to be aggregated pursuant to regulations issued under Section 414(o) of
the Internal Revenue Code with such Person pursuant to Section 414(o) of the
Internal Revenue Code or is so deemed by such Person.
"Event of Default" means any of the occurrences set forth in
Article X after the expiration of any applicable grace period expressly provided
therein.
"Existing Credit Agreement" has the meaning set forth in the
Recitals hereto.
"Existing Loans" means the "Loans" as defined in the Existing
Credit Agreement.
"Extended Maturity Date" has the meaning set forth in Section
3.01.
"Facility" means the loan facility of up to One Hundred Ten
Million Dollars ($110,000,000) described in Section 2.01(a).
"FDIC" means the Federal Deposit Insurance Corporation or any
successor thereto.
"Federal Funds Rate" means, for any period, a fluctuating
interest rate, rounded upwards to the nearest one hundredth of one percent
(0.01%), per annum equal for each day during such period to the weighted average
of the rates on overnight Federal Funds transactions with members of the Federal
Reserve System arranged by Federal Funds brokers, as published for such day (or,
if such day is not a Business Day, for the next preceding Business Day) by the
Federal Reserve Bank of New York, or, if such rate is not so published for any
day which is a Business Day, the average of the quotations for such day on such
transactions received by Agent from three Federal Funds brokers of recognized
standing selected by Agent.
"Federal Reserve Board" means the Board of Governors of the
Federal Reserve System or any governmental authority succeeding to its
functions.
"Financial Statements" has the meaning ascribed to such term
in Section 6.01(a).
"FIRREA" means the Financial Institutions Recovery, Reform and
Enforcement Act of 1989, as amended from time to time.
"First Amended Credit Agreement" has the meaning set forth in
the Recitals hereto.
"Fiscal Quarter" means a fiscal quarter of a Fiscal Year.
"Fiscal Year" means the fiscal year of Borrower and the REIT
which shall be the twelve (12) month period ending on the last day of December
in each year.
"Fixed Charges" for any Fiscal Quarter period means the sum of
(i) Debt Service for such period, (ii) 3% of Base Rent for such period, and
(iii) Borrower's Share of Capital Expenditures from each Investment Affiliate
for such period.
9
"Funding Date" means, with respect to any Loan made after the
Closing Date, the date of the funding of such Loan.
"Funds from Operations" means the definition of "Funds from
Operations" of the National Association of Real Estate Investment Trusts on the
date of determination (before allocation to minority interests).
"GAAP" means generally accepted accounting principles set
forth in the opinions and pronouncements of the Accounting Principles Board and
the American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board, or in such other
statements by such other entity as may be in general use by significant segments
of the accounting profession, which are applicable to the circumstances as of
the date of determination and which are consistent with the past practices of
the REIT and Borrower.
"Governmental Authority" means any nation or government, any
federal, state, local, municipal or other political subdivision thereof or any
entity exercising executive, legislative, judicial, regulatory or administrative
functions of or pertaining to government.
"Gross Asset Value" means with respect to any Person as of any
date of determination, the sum of the Adjusted Asset Values for each Property
then owned by such Person plus the value of any cash or Cash Equivalent owned by
such Person and not subject to any Lien.
"Indebtedness," as applied to any Person (and without
duplication), means (a) all indebtedness, obligations or other liabilities
(whether secured, unsecured, recourse, non-recourse, direct, senior or
subordinate) of such Person for borrowed money, (b) all indebtedness,
obligations or other liabilities of such Person evidenced by Securities or other
similar instruments, (c) all reimbursement obligations and other liabilities of
such Person with respect to letters of credit or banker's acceptances issued for
such Person's account or other similar instruments for which a contingent
liability exists, (d) all obligations of such Person to pay the deferred
purchase price of Property or services, (e) all obligations in respect of
Capital Leases of such Person, (f) all Accommodation Obligations of such Person,
(g) all indebtedness, obligations or other liabilities of such Person or others
secured by a Lien on any asset of such Person, whether or not such indebtedness,
obligations or liabilities are assumed by, or are a personal liability of, such
Person, (h) all indebtedness, obligations or other liabilities (other than
interest expense liability) in respect of Interest Rate Contracts and foreign
currency exchange agreements excluding all indebtedness, obligations or other
liabilities in respect of such Interest Rate Contracts to the extent that the
aggregate notional amount thereof does not exceed the aggregate principal amount
of any outstanding fixed or floating rate Indebtedness, obligations or other
liabilities permitted under this Agreement that exist as of the date that such
Interest Rate Contracts are entered into or that are incurred no more than
thirty (30) days after such Interest Rate Contracts are entered into and (i)
ERISA obligations currently due and payable.
"Initial Maturity Date" means August 9, 2006.
"Interest Expense" means, for any period and without
duplication, total interest expense, whether paid, accrued or capitalized
(including letter of credit fees and the interest component of Capital Leases
but excluding interest expense covered by an interest reserve
10
established under a loan facility) of the REIT, on a consolidated basis and
determined in accordance with GAAP.
"Interest Period" means, relative to any LIBOR Loans
comprising part of the same Borrowing, the period beginning on (and including)
the date on which such LIBOR Loans are made as, or converted into, LIBOR Loans,
and shall end on (but exclude) the day which numerically corresponds to such
date one (1), two (2), three (3), six (6) or twelve (12) months thereafter (or,
if such month has no numerically corresponding day, on the last Business Day of
such month), in either case as Borrower may select in its relevant Notice of
Borrowing pursuant to Section 2.01(b); provided, however, that:
(a) if such Interest Period would otherwise end on a day
which is not a Business Day, such Interest Period shall end on the next
following Business Day (unless such next following Business Day is the
first Business Day of a calendar month, in which case such Interest
Period shall end on the Business Day next preceding such numerically
corresponding day);
(b) no Interest Period may end later than the Termination
Date; and
(c) with the reasonable approval of Agent (unless any
Lender has previously advised Agent and Borrower that it is unable to
enter into LIBOR contracts for an Interest Period of such duration), an
Interest Period may have a duration of less than one (1) month.
"Interest Rate Contracts" means, collectively, interest rate
swap, collar, cap or similar agreements providing interest rate protection.
"Interim Period" has the meaning ascribed to such term in
Section 4.01(g).
"Internal Revenue Code" means the Internal Revenue Code of
1986, as amended from time to time, and any successor statute.
"Investment" means, as applied to any Person, any direct or
indirect purchase or other acquisition by that Person of Securities, or of a
beneficial interest in Securities, of any other Person, and any direct or
indirect loan, advance (other than deposits with financial institutions
available for withdrawal on demand, prepaid expenses, advances to employees and
similar items made or incurred in the ordinary course of business), or capital
contribution by such Person to any other Person, including all Indebtedness and
accounts owed by that other Person which are not current assets or did not arise
from sales of goods or services to that Person in the ordinary course of
business. The amount of any Investment shall be determined in conformity with
GAAP except as otherwise specifically provided herein.
"Investment Affiliate" means any Person in whom the REIT,
Borrower or any Subsidiary holds an equity interest, directly or indirectly,
whose financial results are not consolidated under GAAP with the financial
results of the REIT or Borrower on the consolidated financial statements of the
REIT and Borrower.
11
"Investment Mortgages" means mortgages securing indebtedness
directly or indirectly owed to Borrower or any of its Subsidiaries, including
certificates of interest in real estate mortgage investment conduits.
"Issuing Lender" means Xxxxx Fargo in its capacity as issuer
of Letters of Credit under this Agreement, and shall include any successor
Issuing Lender appointed pursuant hereto.
"IRS" means the Internal Revenue Service and any Person
succeeding to the functions thereof.
"Land" means unimproved real estate purchased or leased or to
be purchased or leased by Borrower or any of its Subsidiaries for the purpose of
future development of improvements.
"Lender Affiliate" as applied to any Lender, means any other
Person directly or indirectly controlling, controlled by, or under common
control with, that Lender. For purposes of this definition, "control" (including
with correlative meanings, the terms "controlling," "controlled by" and "under
common control with"), as applied to any Person, means (a) the possession,
directly or indirectly, of the power to vote more than fifty percent (50%) of
the Securities having voting power for the election of directors of such Person
or otherwise to direct or cause the direction of the management and policies of
that Person, whether through the ownership of voting Securities or by contract
or otherwise, or (b) the ownership of a general partnership interest or a
limited partnership interest representing more than fifty (50%) of the
outstanding limited partnership interests of a Person.
"Lender Reply Period" has the meaning ascribed to such term in
Section 11.10(a).
"Lender Taxes" has the meaning ascribed to such term in
Section 2.03(g).
"Lenders" means Xxxxx Fargo and any other bank, finance
company, insurance or other financial institution which is or becomes a party to
this Agreement by execution of a counterpart signature page hereto or an
Assignment and Assumption, as assignee, provided that with respect to matters
requiring the consent to or approval of Requisite Lenders, the Supermajority
Lenders, or all Lenders at any given time, all then existing Defaulting Lenders
will be disregarded and excluded, and, for voting purposes only, "all Lenders"
shall be deemed to mean "all Lenders other than Defaulting Lenders."
"Letter of Credit Application" shall have the meaning ascribed
to such term in Section 2.09(b).
"Letter of Credit Documents" has the meaning set forth in
Section 2.09(j) hereof.
"Letter of Credit Mandatory Borrowing" has the meaning set
forth in Section 2.09(f) hereof.
"Letter of Credit Note" means the promissory note evidencing
the Letter of Credit Obligations in the original principal amount of Thirty
Million Dollars ($30,000,000) executed by Borrower in favor of Issuing Lender,
as it may be amended, supplemented, replaced or modified from time to time. A
copy of the Letter of Credit Note is attached hereto as Exhibit G.
12
"Letter of Credit Obligations" means, collectively and without
duplication, (a) all reimbursement and other obligations of Borrower in respect
of Letters of Credit, and (b) all amounts paid by Lenders to Issuing Lender in
respect of Letters of Credit.
"Letters of Credit" means the letters of credit issued by
Issuing Lender pursuant to Section 2.09 hereof for the account of Borrower in an
aggregate face amount not to exceed $30,000,000.00 outstanding at any one time,
as they may be drawn on, replaced or modified from time to time.
"Level I Period" means a period during which the ratio of
Total Liabilities to the sum of Gross Asset Values for Borrower and each of its
Subsidiaries shall be less than 0.55:1.
"Level II Period" means a period during which the ratio of
Total Liabilities to the sum of Gross Asset Values for Borrower and each of its
Subsidiaries shall equal or exceed 0.55:1 but shall be less than 0.60:1.
"Level III Period" means a period during which the ratio of
Total Liabilities to the sum of Gross Asset Values for Borrower and each of its
Subsidiaries shall equal or exceed 0.60:1.
"Liabilities and Costs" means all claims, judgments,
liabilities, obligations, responsibilities, losses, damages (including punitive
and treble damages), costs, disbursements and expenses (including without
limitation reasonable attorneys', experts' and consulting fees and costs of
investigation and feasibility studies), fines, penalties and monetary sanctions,
interest, direct or indirect, known or unknown, absolute or contingent, past,
present or future.
"LIBOR" means, relative to any Interest Period for any LIBOR
Loan included in any Borrowing, the rate of interest obtained by dividing (i)
the rate of interest determined by Agent (whose determination shall be
conclusive absent manifest error, which shall not include any lower
determination by any other banks) equal to the rate (rounded upwards, if
necessary, to the nearest one one-hundredth of one percent (.01%)) per annum
reported by Xxxxx Fargo at which Dollar deposits in immediately available funds
are offered by Xxxxx Fargo to leading banks in the Eurodollar inter bank market
at or about 11:00 A.M. London time two (2) Business Days prior to the beginning
of such Interest Period for delivery on the first day of such Interest Period
for a period approximately equal to such Interest Period and in an amount equal
or comparable to the LIBOR Loan to which such Interest Period relates, by (ii) a
percentage expressed as a decimal equal to one (1) minus the LIBOR Reserve
Percentage.
"LIBOR Loan" means a Loan bearing interest, at all times
during an Interest Period applicable to such Loan, at a fixed rate of interest
determined by reference to LIBOR.
"LIBOR Reserve Percentage" means, relative to any Interest
Period, the average daily maximum reserve requirement (including, without
limitation, all basic, emergency, supplemental, marginal and other reserves)
which is imposed under Regulation D, as Regulation D may be amended, modified or
supplemented, on "Eurocurrency liabilities" having a term equal to the
applicable Interest Period (or in respect of any other category of liabilities
which includes deposits by reference to which the interest rate on LIBOR Loans
is determined or any category of extensions of credit or other assets which
includes loans by a non-United States office of any bank to United States
residents), which requirement shall be expressed as a decimal. LIBOR
13
shall be adjusted automatically on, and as of the effective date of, any change
in the LIBOR Reserve Percentage.
"Lien" means any mortgage, deed of trust, pledge,
hypothecation, assignment, deposit arrangement, security interest, encumbrance
(including, but not limited to, easements, rights-of-way, zoning restrictions
and the like), lien (statutory or other), preference, priority or other security
agreement or preferential arrangement of any kind or nature whatsoever,
including without limitation any conditional sale or other title retention
agreement, the interest of a lessor under a Capital Lease, any financing lease
having substantially the same economic effect as any of the foregoing, and the
filing of any financing statement (other than a financing statement filed by a
"true" lessor pursuant to Section 9-408 of the Uniform Commercial Code) naming
the owner of the asset to which such Lien relates as debtor, under the Uniform
Commercial Code or other comparable law of any jurisdiction.
"Loans" means the loans made pursuant to the Facility,
including, without limitation, loans made pursuant to Section 2.01 hereof,
Swingline Loans, and Loans made pursuant to Mandatory Borrowings.
"Loan Availability" means the amount of the Facility from time
to time.
"Loan Documents" means, this Agreement, the Loan Notes, the
REIT Guaranty, and all other agreements, instruments and documents (together
with amendments and supplements thereto and replacements thereof) now or
hereafter executed by the REIT, Borrower or any Agreement Party, which evidence,
guaranty or secure the Obligations.
"Loan Notes" means the promissory notes evidencing the Loans
(other than Swingline Loans) in the aggregate original principal amount of One
Hundred Ten Million Dollars ($110,000,000) executed by Borrower in favor of
Lenders, as they may be amended, supplemented, replaced or modified from time to
time. Copies of the Loan Notes are attached hereto as Exhibit D.
"Mandatory Borrowing" means any Letter of Credit Mandatory
Borrowing or Swingline Mandatory Borrowing.
"Manufactured Home Community Mortgages" means Investment
Mortgages issued by any Person engaged primarily in the business of developing,
owning, and managing manufactured home communities or recreational vehicle
resorts.
"Manufactured Home Community Ownership Interests" means
partnership, joint venture, membership or other equity interests issued by any
Person engaged primarily in the business of developing, owning, and managing
manufactured home communities or recreational vehicle resorts.
"Material Adverse Effect" means a material adverse effect upon
(i) the ability of Borrower or the REIT to perform its covenants and obligations
under this Agreement and the other Loan Documents or (ii) the ability of Agent
or Lenders to enforce the Loan Documents. The phrase "has a Material Adverse
Effect" or "will result in a Material Adverse Effect" or words substantially
similar thereto shall in all cases be intended to mean "has or will result in a
Material Adverse Effect," and the phrase "has no (or does not have a) Material
Adverse Effect"
14
or "will not result in a Material Adverse Effect" or words substantially similar
thereto shall in all cases be intended to mean "does not or will not result in a
Material Adverse Effect."
"Maturity Date" means the Initial Maturity Date, as such date
may be extended pursuant to Article III.
"Minimum Net Worth" means Five Hundred Million Dollars
($500,000,000).
"Moody's" means Xxxxx'x Investors Service, a Delaware
corporation, and its successors and assigns, and, if such corporation shall be
dissolved or liquidated or shall no longer perform the functions of a securities
rating agency, "Moody's" shall be deemed to refer to any other nationally
recognized securities rating agency designated by Agent.
"Multiemployer Plan" means an employee benefit plan defined in
Section 4001(a)(3) or Section 3(37) of ERISA which is, or within the immediately
preceding six (6) years was, maintained, administered, contributed to by or was
required to be contributed to by a Person or any ERISA Affiliate, or under which
a Person or any ERISA Affiliate may incur any liability.
"Net Income" means, for any period, the net income (or loss)
after Taxes of the REIT, on a consolidated basis, for such period calculated in
conformity with GAAP; provided, however, that Net Income shall not include the
net income (or loss) of Investment Affiliates.
"Net Offering Proceeds" means all cash or other assets
received by the REIT or Borrower as a result of the sale of common stock,
preferred stock, partnership interests, limited liability company interests,
Convertible Securities or other ownership or equity interests in the REIT or
Borrower less customary costs and discounts of issuance paid by the REIT or
Borrower, as the case may be.
"Net Operating Income" means, for any period, and with respect
to any Qualifying Unencumbered Property, the net operating income of such
Qualifying Unencumbered Property (attributed to such Property in a manner
reasonably acceptable to Agent) for such period (i) determined in accordance
with GAAP, (ii) determined in a manner which is consistent with the past
practices of the REIT and Borrower, and (iii) inclusive of an allocation of
reasonable management fees and administrative costs to such Qualifying
Unencumbered Property consistent with the past practices of the REIT and
Borrower, except that, for purposes of determining Net Operating Income, income
shall not (a) include security or other deposits, lease termination or other
similar charges, delinquent rent recoveries, unless previously reflected in
reserves, or any other items reasonably deemed by Agent to be of a non-recurring
nature or (b) be reduced by depreciation or amortization or any other non-cash
item.
"Net Price" means, with respect to the purchase of any
Property by Borrower or any Subsidiary, without duplication, (i) cash and Cash
Equivalents paid as consideration for such purchase, plus (ii) the principal
amount of any note or other deferred payment obligation delivered in connection
with such purchase (except as described in clause (iv) below), plus (iii) the
value of any other consideration delivered in connection with such purchase or
sale (including, without limitation, shares in the REIT and operating
partnership units or preferred operating partnership units in Borrower) (as
reasonably determined by Agent), minus (iv) the value of any consideration
deposited into escrow or subject to disbursement or claim upon the
15
occurrence of any event, minus (v) reasonable costs of sale and taxes paid or
payable in connection with such purchase.
"Net Worth" means, at any time, the sum of Gross Asset Values
for Borrower and each of its Subsidiaries at such time minus Total Liabilities
at such time.
"New Lender" shall have the meaning set forth in Section
11.13(k) hereof.
"Newco REIT" means a direct Subsidiary of the REIT that is (i)
owned at least 95% by the REIT, (ii) controlled by the REIT and (iii) the sole
general partner of Borrower.
"Non-Manufactured Home Community Property" means Property
which is not (i) used for lease or operation of manufactured home communities or
recreational vehicle resorts, (ii) Land, (iii) Securities consisting of stock
issued by real estate investment trusts engaged primarily in the development,
ownership and management of manufactured home communities and/or recreational
vehicle resorts, (iv) Manufactured Home Community Mortgages, (v) Manufactured
Home Community Ownership Interests or (vi) Taxable REIT Subsidiary Interests.
"Non Pro Rata Loan" means a Loan (other than a Swingline Loan
but including a Mandatory Borrowing) or Letter of Credit draw with respect to
which less than all Lenders have funded their respective Pro Rata Shares of such
Loans or Letter of Credit draws (whether by making Loans or purchasing
participation interests in accordance with the terms hereof) and the failure of
the non-funding Lender or Lenders to fund its or their respective Pro Rata
Shares of such Loan or Letter of Credit draw constitutes a breach of this
Agreement.
"Non-Recourse Indebtedness" means any single loan with respect
to which recourse for payment is limited to specific assets related to a
particular Property or group of Properties encumbered by a Lien securing such
Indebtedness, so long as the Adjusted Asset Value for such Property, or the
total of the Adjusted Asset Values for such group of Properties, does not exceed
One Hundred Million Dollars ($100,000,000); provided, however, that personal
recourse to the REIT, Borrower or any Subsidiary by a holder of any such loan
for fraud, misrepresentation, misapplication of cash, waste, environmental
claims and liabilities and other circumstances customarily excluded by
institutional lenders from exculpation provisions and/or included in separate
indemnification agreements in non-recourse financing of real estate shall not,
by itself, prevent such loan from being characterized as Non-Recourse
Indebtedness.
"Notice of Borrowing" means, with respect to a proposed
Borrowing pursuant to Section 2.01(b) or Section 2.10, a notice of borrowing
duly executed by an authorized officer of the sole general partner of Borrower
substantially in the form of Exhibit I.
"Notice of Continuation/Conversion" means a notice of
continuation or conversion of or to a LIBOR Loan duly executed by an authorized
officer of the sole general partner of Borrower substantially in the form of
Exhibit J.
"Obligations" means, from time to time, all Indebtedness of
Borrower owing to Agent, Swingline Lender, Issuing Lender, any Lender, or any
Person entitled to indemnification pursuant to Section 12.02, or any of their
respective successors, transferees or assigns, of every type and description,
whether or not evidenced by any note, guaranty or other instrument, arising
under or in connection with this Agreement or any other Loan Document, whether
or not for the
16
payment of money, whether direct or indirect (including those acquired by
assignment), absolute or contingent, due or to become due, now existing or
hereafter arising and however acquired. The term includes, without limitation,
all interest, charges, expenses, fees, reasonable attorneys' fees and
disbursements and any other sum now or hereafter chargeable to Borrower under or
in connection with this Agreement or any other Loan Document. Notwithstanding
anything to the contrary contained in this definition, Obligations shall not be
deemed to include any obligations or liabilities of Borrower to Agent or any
Lender under an Interest Rate Contract, foreign currency exchange agreement or
other Contractual Obligation unless the same is among Borrower and all Lenders.
"Officer's Certificate" means a certificate signed by a
specified officer of a Person certifying as to the matters set forth therein.
"Other Indebtedness" means all Indebtedness other than the
Obligations.
"Original Credit Agreement" has the meaning set forth in the
Recitals hereto.
"Original Obligations" means the "Obligations" as defined in
the Existing Credit Agreement.
"PBGC" means the Pension Benefit Guaranty Corporation or any
Person succeeding to the functions thereof.
"Permit" means any permit, approval, authorization, license,
variance or permission required from a Governmental Authority under an
applicable Requirement of Law.
"Permitted Holdings" means any of the holdings and activities
described in Section 9.06, but only to the extent permitted in Section 9.06.
"Permitted Liens" means:
(a) Liens for Taxes, assessments or other governmental
charges not yet due and payable or which are being contested in good
faith by appropriate proceedings promptly instituted and diligently
conducted in accordance with Sections 7.01(d) or 7.02(g);
(b) statutory liens of carriers, warehousemen, mechanics,
materialmen and other similar liens imposed by law, which are incurred
in the ordinary course of business for sums not more than sixty (60)
days delinquent or which are being contested in good faith in
accordance with Sections 7.01(d) or 7.02(g);
(c) deposits made in the ordinary course of business to
secure liabilities to insurance carriers;
(d) Liens for purchase money obligations for equipment;
provided that (i) the Indebtedness secured by any such Lien does not
exceed the purchase price of such equipment, (ii) any such Lien
encumbers only the asset so purchased and the proceeds upon sale,
disposition, loss or destruction thereof, and (iii) such Lien, after
giving effect
17
to the Indebtedness secured thereby, does not give rise to an Event of
Default or Unmatured Event of Default pursuant to Section 8.01(a);
(e) easements, rights-of-way, zoning restrictions, other
similar charges or encumbrances and all other items listed on Schedule
B to Borrower's or any Subsidiary's, as applicable, owner's title
insurance policies for any of Borrower's or any Subsidiary's real
Properties, so long as the foregoing do not interfere in any material
respect with the use or ordinary conduct of the business of Borrower or
such Subsidiary, as applicable, and do not diminish in any material
respect the value of the Property to which it is attached or for which
it is listed; or
(f) Liens and judgments which have been or will be bonded
or released of record within thirty (30) days after the date such Lien
or judgment is entered or filed against the REIT, Borrower, any
Subsidiary or any Agreement Party.
"Person" means any natural person, employee, corporation,
limited partnership, limited liability partnership, general partnership, joint
stock company, limited liability company, joint venture, association, company,
trust, bank, trust company, land trust, business trust, real estate investment
trust or other organization, whether or not a legal entity, or any other
nongovernmental entity, or any Governmental Authority.
"Plan" means an employee benefit plan defined in Section 3(3)
of ERISA (other than a Multiemployer Plan) in respect of which a Person or an
ERISA Affiliate, as applicable, is an "employer" as defined in Section 3(5) of
ERISA.
"Pre-Closing Financials" has the meaning ascribed to such term
in Section 5.01(g).
"Pro Rata Share" means, with respect to any Lender, a fraction
(expressed as a percentage), the numerator of which shall be the amount of such
Lender's Commitment and the denominator of which shall be the aggregate amount
of all of the Lenders' Commitments, as adjusted from time to time in accordance
with the provisions of this Agreement.
"Property" means, with respect to any Person, any real or
personal property, building, facility, structure, equipment or unit, or other
asset owned by such Person.
"Qualifying Unencumbered Property" means (a) the Properties
listed on Exhibit F hereto and (b) any Property designated by Borrower from time
to time pursuant to Section 6.04 which (i) is an operating manufactured home
community property wholly-owned (directly or beneficially) by Borrower or any
Subsidiary wholly-owned, directly or indirectly by Borrower and/or the REIT,
(ii) is not subject (nor are any direct or indirect equity interests in such
Property subject) to a Lien which secures Indebtedness of any Person other than
a Permitted Lien, (iii) is not subject (nor are any direct or indirect equity
interests in such Property subject) to any covenant, condition, or other
restriction which prohibits or limits the creation or assumption of any Lien
upon such Property, and (iv) has not been designated by Agent in a notice to
Borrower as not acceptable to the Requisite Lenders pursuant to Section 6.04;
provided, however, that the weighted average occupancy rate of the Properties
listed on Exhibit F together with those designated by Borrower to be Qualifying
Unencumbered Properties pursuant to Section 6.04 (excluding expansion areas of
such Properties which are purchased and/or developed on or after
18
the Closing Date and recreational vehicle resort properties) shall be at least
seventy-five percent (75%); and provided, further, that Borrower may, upon at
least fifteen (15) Business Days prior notice to Agent, designate that any
Property listed on Exhibit F or otherwise designated as a Qualifying
Unencumbered Property is no longer a Qualifying Unencumbered Property (and upon
such designation, such Property shall no longer be a Qualifying Unencumbered
Property).
"Recourse Indebtedness" means, with respect to any Person,
Indebtedness which is not Non-Recourse Indebtedness.
"Regulation D" means Regulation D of the Federal Reserve Board
as in effect from time to time.
"Regulation T" means Regulation T of the Federal Reserve Board
as in effect from time to time.
"Regulation U" means Regulation U of the Federal Reserve Board
as in effect from time to time.
"Regulation X" means Regulation X of the Federal Reserve Board
as in effect from time to time.
"REIT" has the meaning ascribed to such term in the preamble
hereto.
"REIT Guaranty" means the Amended and Restated REIT Guaranty
dated as of April 28, 1998 executed by the REIT in favor of Agent and the
Lenders. A copy of the REIT Guaranty is attached hereto as Exhibit B.
"Release" may be either a noun or a verb and means the
release, spill, emission, leaking, pumping, pouring, emitting, emptying,
escaping, dumping, injection, deposit, disposal, discharge, dispersal, leaching
or migration into the indoor or outdoor environment or into or out of any
property, including the movement of Contaminants through or in the air, soil,
surface water, groundwater or property.
"Remedial Action" means any action undertaken pursuant to
Environmental Laws to (a) clean up, remove, remedy, respond to, treat or in any
other way address Contaminants in the indoor or outdoor environment; (b) prevent
the Release or threat of Release or minimize the further Release of Contaminants
so they do not migrate or endanger or threaten to endanger public health or
welfare or the indoor or outdoor environment; or (c) perform pre-remedial
studies and investigations and post-remedial monitoring and care.
"Reportable Event" means any of the events described in
Section 4043(b) of ERISA, other than an event for which the thirty (30) day
notice requirement is waived by regulations, or any of the events described in
Section 4062(f) or 4063(a) of ERISA.
"Requirements of Law" means, as to any Person, the charter and
by-laws, partnership agreements or other organizational or governing documents
of such Person, and any law, rule or regulation, permit, or determination of an
arbitrator or a court or other Governmental Authority, in each case applicable
to or binding upon such Person or any of its property or to which such Person or
any of its property is subject, including without limitation, the Securities
19
Act, the Securities Exchange Act, Regulations T, U and X, FIRREA and any
certificate of occupancy, zoning ordinance, building or land use requirement or
Permit or occupational safety or health law, rule or regulation.
"Requisite Lenders" means, collectively, Lenders whose Pro
Rata Shares, in the aggregate, are at least sixty-six and two-thirds percent
(662/3%); provided, however, that, in determining such percentage at any given
time, all then existing Defaulting Lenders will be disregarded and excluded and
the Pro Rata Shares of Lenders shall be redetermined, for voting purposes only,
to exclude the Pro Rata Shares of such Defaulting Lenders; and provided,
further, that so long as there are at least two (2) Lenders who are not
Defaulting Lenders, the Requisite Lenders must be comprised of a minimum of two
(2) Lenders; and provided, further, that for purposes of any amendment,
modification or waiver of the requirements of Article IX, the Requisite lenders
must include Agent in its capacity as a Lender (provided Agent is not a
defaulting Lender).
"S&P" means Standard & Poor's Rating Group, a division of
McGraw Hill, its successors and assigns, and, if Standard & Poor's Rating Group
shall be dissolved or liquidated or shall no longer perform the functions of a
securities rating agency, "S&P" shall be deemed to refer to any other nationally
recognized securities rating agency designated by Agent.
"Secretary's Certificate" has the meaning ascribed to such
term in Section 4.01(c)(i).
"Secured Debt" means Indebtedness, the payment of which is
secured by a Lien on any real Property owned or leased by the REIT, Borrower, or
any Subsidiary.
"Securities" means any stock, partnership interests, shares,
shares of beneficial interest, voting trust certificates, bonds, debentures,
notes or other evidences of indebtedness, secured or unsecured, convertible,
subordinated or otherwise, or in general any instruments commonly known as
"securities," or any certificates of interest, shares, or participations in
temporary or interim certificates for the purchase or acquisition of, or any
right to subscribe to, purchase or acquire any of the foregoing, but shall not
include any evidence of the Obligations.
"Securities Act" means the Securities Act of 1933, as amended
to the date hereof and from time to time hereafter, and any successor statute.
"Securities Exchange Act" means the Securities Exchange Act of
1934, as amended to the date hereof and from time to time hereafter, and any
successor statute.
"Senior Loans" has the meaning ascribed to such term in
Section 11.04(b).
"Sole Lead Arranger" means Xxxxx Fargo Bank, N.A. in its
capacity as sole lead arranger for the Lenders under this Agreement.
"Solvent" means as to any Person at the time of determination,
such Person (a) owns property the value of which (both at fair valuation and at
present fair saleable value) is greater than the amount required to pay all of
such Person's liabilities (including contingent liabilities and debts); (b) is
able to pay all of its debts as such debts mature; and (c) has capital
20
sufficient to carry on its business and transactions and all business and
transactions in which it is about to engage.
"Subsidiary" means any Person, whose financial results are
consolidated under GAAP with the financial results of the REIT or Borrower on
the consolidated financial statements of the REIT or Borrower.
"Supermajority Lenders" means, collectively, Lenders whose Pro
Rata Shares, in the aggregate, are at least eighty-five percent (85%), provided,
however, that, in determining such percentage at any given time, all then
existing Defaulting Lenders will be disregarded and excluded and the Pro Rata
Shares of Lenders shall be redetermined, for voting purposes only, to exclude
the Pro Rata Shares of such Defaulting Lenders; and provided, further, that, so
long as there are at least two (2) Lenders who are not Defaulting Lenders, the
Supermajority Lenders must be comprised of a minimum of two (2) Lenders; and
provided, further, that for purposes of any amendment, modification or waiver of
the requirements of Article IX, the Supermajority Lenders must include Agent in
its capacity as a Lender (provided Agent is not a Defaulting Lender).
"Swingline Mandatory Borrowing" has the meaning set forth in
Section 2.10(b)(iv) hereof.
"Swingline Lender" means Xxxxx Fargo in its capacity as
Swingline Lender hereunder, and shall include any successor Swingline Lender
appointed pursuant hereto.
"Swingline Loan" means a Loan made by the Swingline Lender
pursuant to Section 2.10 hereof.
"Swingline Note" means the promissory note evidencing the
Swingline Loans in the original principal amount of Thirty Million Dollars
($30,000,000) executed by Borrower in favor of Swingline Lender, as it may be
amended, supplemented, replaced or modified from time to time. A copy of the
Swingline Note is attached hereto as Exhibit E.
"Syndication Agent" means Bank of America, N.A. in its
capacity as syndication agent for the Lenders under this Agreement.
"Taxable REIT Subsidiary Interests" means equity interests in
Subsidiaries not engaged in the development, ownership or operation of real
estate and permitted to be held by Borrower and the REIT pursuant to Section
856(l) of the Internal Revenue Code (as amended from time to time) without
violating the REIT's status as a real estate investment trust.
"Taxes" means all federal, state, local and foreign income and
gross receipts taxes.
"Termination Date" has the meaning ascribed to such term in
Section 2.01(d).
"Termination Event" means (a) any Reportable Event, (b) the
withdrawal of a Person, or an ERISA Affiliate from a Benefit Plan during a plan
year in which it was a "substantial employer" as defined in Section 4001(a)(2)
of ERISA, (c) the occurrence of an obligation arising under Section 4041 of
ERISA of a Person or an ERISA Affiliate to provide
21
affected parties with a written notice of an intent to terminate a Benefit Plan
in a distress termination described in Section 4041(c) of ERISA, (d) the
institution by the PBGC of proceedings to terminate any Benefit Plan under
Section 4042 of ERISA or to appoint a trustee to administer any Benefit Plan,
(e) any event or condition which constitutes grounds under Section 4042 of ERISA
for the appointment of a trustee to administer a Benefit Plan, (f) the partial
or complete withdrawal of such Person or any ERISA Affiliate from a
Multiemployer Plan which would have a Material Adverse Effect, or (g) the
adoption of an amendment by any Person or any ERISA Affiliate to terminate any
Benefit Plan which is subject to Title IV of ERISA or Section 412 of the
Internal Revenue Code or the treatment of an amendment to a Benefit Plan as a
termination under ERISA.
"Total Liabilities" means, without duplication, all
Indebtedness of the REIT on a consolidated basis, plus (i) all other items
which, in accordance with GAAP, would be included as liabilities on the
liability side of the balance sheet of the REIT, on a consolidated basis, and in
any event shall include recourse and non-recourse mortgage debt, letters of
credit, purchase obligations, forward equity sales, repurchase obligations,
unsecured debt, accounts payable, lease obligations (including ground leases) to
the extent required, in accordance with GAAP, to be classified as capital leases
on the balance sheet of the REIT, guarantees of indebtedness, subordinated debt
and unfunded obligations plus (ii) Borrower's Adjusted Share of Investment
Affiliates' Indebtedness; provided, however, that "Total Liabilities" shall not
include dividends declared by the REIT or Borrower which are permitted under
Section 8.01(d) but not yet paid.
"Transient RV NOI" means, with respect to any Qualifying
Unencumbered Property that is a recreational vehicle resort property, all of
such Qualifying Unencumbered Property's Net Operating Income that is not
attributable to residents/guests at such property who are either permanent
residents of such property or who reside at such property for the entire
"season" applicable to such property.
"Unencumbered Asset Value" means, as of any date of
determination, (i) the quotient of the Net Operating Income for the most
recently ended twelve (12) calendar month period which is attributable (in a
manner reasonably acceptable to Agent) to Qualifying Unencumbered Properties
wholly-owned (directly or beneficially) by Borrower or any Subsidiary
wholly-owned, directly or indirectly, by Borrower and/or the REIT, for the
entire most recently ended Fiscal Quarter divided by seven hundred seventy-five
ten-thousandths (0.0775) plus (ii) the aggregate of the Net Prices paid by
Borrower or such Subsidiary for all Qualifying Unencumbered Properties which
have been acquired in the Fiscal Quarter most recently ended; provided, however,
that for purposes of determining the numerator of the quotient described in
clause (i) of this definition, Transient RV NOI shall be included only to the
extent it does not exceed fifteen percent (15%) of the aggregate Net Operating
Income for the applicable Qualifying Unencumbered Properties.
"Unencumbered Net Operating Income" means for any Fiscal
Quarter, Net Operating Income for such period from each Qualifying Unencumbered
Property; provided, however, that for purposes of determining Unencumbered Net
Operating Income, Transient RV NOI shall be included only to the extent it does
not exceed fifteen percent (15%) of the aggregate Net Operating Income for the
applicable Qualifying Unencumbered Properties.
22
"Unfunded Pension Liabilities" means the excess of a Benefit
Plan's accrued benefits, as defined in Section 3(23) of ERISA, over the current
value of that Plan's assets, as defined in Section 3(26) of ERISA.
"Uniform Commercial Code" means the Uniform Commercial Code as
in effect on the date hereof in the State of Illinois.
"Unmatured Event of Default" means an event which, with the
giving of notice or the lapse of time, or both, would constitute an Event of
Default.
"Unsecured Debt" means, as of any date of determination and
without duplication, all Indebtedness of the REIT, Borrower or any Subsidiary,
which is not Secured Debt but excluding (i) all accounts payable of the REIT,
Borrower or any Subsidiary incurred in the ordinary course of business, (ii) all
advance rents received and (iii) all accrued interest payable.
"Unsecured Interest Expense" means Interest Expense other than
Interest Expense payable in respect of Secured Debt.
"Unused Amount" has the meaning ascribed to such term in
Section 2.04(a).
"Unused Facility Fee" has the meaning ascribed to such term in
Section 2.04(b).
"Welfare Plan" means any "employee welfare benefit plan" as
defined in Section 3(1) of ERISA, which a Person or any ERISA Affiliate
maintains, administers, contributes to or is required to contribute to, or
within the immediately preceding five years maintained, administered,
contributed to or was required to contribute to, or under which a Person or any
ERISA Affiliate may incur any liability.
"Xxxxx Fargo" has the meaning ascribed to such term in the
preamble hereto.
"Wholly-Owned Subsidiary" means any Subsidiary which is
wholly-owned directly or indirectly by Borrower or the REIT.
"WFRAF" has the meaning set forth in the Recitals hereto.
1.02 Computation of Time Periods. In this Agreement,
unless otherwise specified, in the computation of periods of time from a
specified date to a later specified date, the word "from" means "from and
including" and the words "to" and "until" each mean "to and including." Periods
of days referred to in this Agreement shall be counted in calendar days unless
Business Days are expressly prescribed.
1.03 Terms.
(a) Any accounting terms used in this Agreement which are
not specifically defined shall have the meanings customarily given them in
accordance with GAAP, provided that for purposes of references to the financial
results of the "REIT, on a consolidated basis," the REIT shall be deemed to own
one hundred percent (100%) of the partnership interests in Borrower.
23
(b) Any time the phrase "to the best of Borrower's
knowledge" or a phrase similar thereto is used herein, it means: "to the actual
knowledge of the executive officers of Borrower and the REIT, after reasonable
inquiry of those agents, employees or contractors of the REIT, Borrower, any
Agreement Party or any Subsidiary who could reasonably be anticipated to have
knowledge with respect to the subject matter or circumstances in question and
review of those documents or instruments which could reasonably be anticipated
to be relevant to the subject matter or circumstances in question."
(c) In each case where the consent or approval of Agent,
Requisite Lenders, Supermajority Lenders or all Lenders is required or their
non-obligatory action is requested by Borrower, such consent, approval or action
shall be in the sole and absolute discretion of Agent and, as applicable, each
Lender, unless otherwise specifically indicated.
1.04 Interrelationship With the Existing Credit Agreement.
Effective on the Closing Date, this Agreement shall amend and restate the
provisions of the Existing Credit Agreement in their entirety, and all Existing
Loans and all Loans made on or after the Closing Date shall be governed
exclusively by the terms of this Agreement. All Original Obligations outstanding
on the Closing Date (including without limitation all accrued and unpaid
interest and fees) shall, to the extent not paid on the Closing Date, be deemed
to be Obligations outstanding hereunder. The REIT Guaranty shall remain in full
force and effect with respect to the Obligations and is hereby reaffirmed. The
parties acknowledge and agree that the execution and delivery of this Agreement
shall not constitute a novation, payment and reborrowing or termination of the
Original Obligations and that all such Original Obligations outstanding on the
Closing Date are in all respects continued and outstanding as Obligations under
this Agreement.
ARTICLE II.
LOANS
2.01 Loan Advances and Repayment.
(a) Loan Availability.
(i) Subject to the terms and conditions set forth in this
Agreement, Lenders hereby agree to make Loans (other than Swingline
Loans) to Borrower from time to time during the period from the Closing
Date to the first Business Day preceding the Maturity Date; provided,
that the sum of the aggregate principal amount of all outstanding Loans
(including Swingline Loans) plus the aggregate face amount of all
outstanding Letters of Credit shall not exceed Loan Availability; and
provided, further, that if a Base Rate Loan is being made pursuant to
Section 2.09(e) hereof to reimburse Issuing Lender for a drawn Letter
of Credit, to avoid a duplicative reduction in the amount of Loan
Availability, the drawn Letter of Credit shall not be considered
outstanding. All Loans (other than Swingline Loans) under this
Agreement shall be made by Lenders simultaneously and proportionately
to their respective Pro Rata Shares, it being understood that no Lender
shall be responsible for any failure by any other Lender to perform its
obligation to make a Loan hereunder and that the Commitment of any
Lender shall not be increased or decreased as a result of the failure
by any other Lender to perform its obligation to make a Loan. The Loans
(other than Swingline Loans) will be evidenced by the Loan Notes. The
Swingline Loans will be evidenced by the Swingline Note.
24
(ii) Loans (including, without limitation, Swingline
Loans) may be voluntarily prepaid pursuant to Section 2.05(a) and,
subject to the provisions of this Agreement (including, without
limitation, the provisions of Section 2.11 hereof), any amounts so
prepaid may be reborrowed, up to the amount available under Section
2.01(a)(i) at the time of such Borrowing, until the Business Day next
preceding the Termination Date. The principal balance of the Loans
shall be payable in full on the Termination Date. During the term of
this Agreement and prior to the termination of the Commitments,
Borrower shall pay to Agent, within one (1) Business Day after
Borrower's receipt of a demand in writing from Agent for the benefit of
Lenders, such principal amounts as are necessary so that the sum of the
aggregate principal amounts of all outstanding Loans (including
Swingline Loans) plus the aggregate face amount of all outstanding
Letters of Credit at any time does not exceed Loan Availability at such
time.
(b) Notice of Borrowing. Whenever Borrower desires to
borrow under this Section 2.01, Borrower shall give Agent, at Xxxxx Fargo Real
Estate Group Disbursement Center, 0000 Xxxx Xxxx Xxxxx, Xxxxx 000, Xx Xxxxxxx,
Xxxxxxxxxx 00000, with a copy to: Xxxxx Fargo Bank, N.A., 000 Xxxxx Xxxxxx
Xxxxx, Xxxxx 0000, Xxxxxxx, Xxxxxxxx 00000, Attn: Account Officer, or such other
address as Agent shall designate, an original or facsimile Notice of Borrowing
no later than 10:00 A.M. (California time), not less than three (3) nor more
than five (5) Business Days prior to the proposed Funding Date of each Loan.
Each Notice of Borrowing shall specify (i) the Funding Date (which shall be a
Business Day) in respect of the Loan, (ii) the amount of the proposed Loan,
provided that the aggregate amount of such proposed Loan shall equal (A) in the
case of Base Rate Loans, One Million Dollars ($1,000,000) or integral multiples
of One Hundred Thousand Dollars ($100,000) in excess thereof, or (B) in the case
of LIBOR Loans, One Million Dollars ($1,000,000) or integral multiples of One
Hundred Thousand Dollars ($100,000) in excess thereof, and (iii) whether the
Loan to be made thereunder will be a Base Rate Loan or a LIBOR Loan and, if a
LIBOR Loan, the Interest Period. Any Notice of Borrowing pursuant to this
Section 2.01(b) shall be irrevocable. Each such Notice of Borrowing shall be
accompanied by all reports or documents required to be delivered by Borrower to
Agent or any Lender under this Agreement. Borrower may elect (A) so long as no
Event of Default has occurred and is continuing, to convert Base Rate Loans or
any portion thereof into LIBOR Loans, (B) to convert LIBOR Loans or any portion
thereof into Base Rate Loans, or (C) so long as no Event of Default has occurred
and is continuing, to continue any LIBOR Loans or any portion thereof for an
additional Interest Period, provided, however, that the aggregate amount of
Loans being continued as or converted into LIBOR Loans shall, in the aggregate,
equal One Million Dollars ($1,000,000) or an integral multiple of One Hundred
Thousand Dollars ($100,000) in excess thereof. The applicable Interest Period
for the continuation of any LIBOR Loan shall commence on the day on which the
next preceding Interest Period expires. Each such election shall be made by
giving Agent, at 0000 X. Xxxx Xxxxx, Xxxxx 000, Xx Xxxxxxx, Xxxxxxxxxx 00000,
Attn: Xxxxxxxxx XxxXxxxxx, a Notice of Continuation/Conversion by 10:00 A.M.
(California time) on the date of a conversion to a Base Rate Loan, or by 10:00
A.M. (California time) not less than three (3) nor more than five (5) Business
Days prior to the date of a conversion to or continuation of a LIBOR Loan,
specifying, in each case (1) whether a conversion or continuation is to occur,
(2) the amount of the conversion or continuation, (3) the Interest Period
therefor, in the case of a conversion to or continuation of a LIBOR Loan, and
(4) the date of the conversion or continuation (which date shall be a Business
Day). Agent shall promptly notify each Lender, but in any event within one (1)
Business Day after receipt of such notice, of its receipt of each such notice
and the contents
25
thereof. Notwithstanding anything to the contrary contained herein and subject
to the default interest provisions contained in Section 2.03, if an Event of
Default occurs and as a result thereof the Commitments are terminated, all LIBOR
Loans will convert to Base Rate Loans upon the expiration of the applicable
Interest Periods therefor or the date all Loans become due, whichever occurs
first. Except as provided above, the conversion of a LIBOR Loan to a Base Rate
Loan shall only occur on the last Business Day of the Interest Period relating
to such LIBOR Loan. In the absence of an effective election by Borrower of a
LIBOR Loan and Interest Period in accordance with the above procedures prior to
the third (3rd) Business Day prior to the expiration of the then current
Interest Period with respect to any LIBOR Loan, interest on such LIBOR Loan
shall accrue at the interest rate then applicable to a LIBOR Loan for an
Interest Period of thirty (30) days, effective immediately upon the expiration
of the then-current Interest Period, without prejudice, however, to the right of
Borrower to elect a Base Rate Loan or a different Interest Period in accordance
with the terms and provisions of this Agreement; provided, however, that if such
continuation shall cause the number of LIBOR Loan tranches to exceed six (6),
such LIBOR Loan shall be converted to a Base Rate Loan.
(c) Making of Loans. Subject to Section 11.03, Agent
shall make the proceeds of Loans (other than Swingline Loans) available to
Borrower in El Segundo, California on such Funding Date and shall disburse such
funds in Dollars and in immediately available funds not later than 1:00 P.M.
Chicago time to Borrower's account, at Bank of America, Account Number
73-00000000 in Chicago, Illinois, or such other account specified in the Notice
of Borrowing acceptable to Agent, with a confirming telephone call to Quantaze
Xxxxx at (000) 000-0000 or Xxxxxxx Xxxxxx at (000) 000-0000.
(d) Term; Principal Payment. The outstanding balance of
the Loans (other than Swingline Loans, which by their terms shall mature
earlier) shall be payable in full on the earlier to occur of (A) the Maturity
Date, and (B) the acceleration of the Loans pursuant to Section 10.02(a) (the
"Termination Date").
2.02 Authorization to Obtain Loans and Letters of Credit.
Borrower shall provide Agent with documentation reasonably satisfactory to Agent
indicating the names of those employees or agents of Borrower authorized by
Borrower to sign Notices of Borrowing, to request Letters of Credit and to
receive callback confirmations, and Agent and Lenders shall be entitled to rely
on such documentation until notified in writing by Borrower of any change(s) of
the persons so authorized. Agent, Swingline Lender and Issuing Lender shall be
entitled to act in good faith on the instructions of anyone identifying himself
as one of the Persons authorized to request Loans or Letters of Credit, and
Borrower shall be bound thereby in the same manner as if such Person were
actually so authorized. Borrower agrees to indemnify, defend and hold Lenders,
Agent, Swingline Lender and Issuing Lender harmless from and against any and all
Liabilities and Costs which may arise or be created by the acceptance of
instructions for making Loans, and issuing Letters of Credit.
2.03 Interest on the Loans
(a) Base Rate Loans. Subject to Section 2.03(d), all Base
Rate Loans shall bear interest on the average daily unpaid principal amount
thereof from the date made until paid in full at a fluctuating rate per annum
equal to the Base Rate. Base Rate Loans shall be made in
26
minimum amounts of One Million Dollars ($1,000,000) or an integral multiple of
One Hundred Thousand Dollars ($100,000) in excess thereof.
(b) LIBOR Loans. Subject to Section 2.03(d), all LIBOR
Loans shall bear interest on the unpaid principal amount thereof during the
Interest Period applicable thereto at a rate per annum equal to the sum of LIBOR
for such Interest Period plus the Applicable Margin. Upon receipt of a Notice of
Borrowing requesting LIBOR Loans, Agent shall determine LIBOR applicable to the
Interest Period for such LIBOR Loans, and shall give notice thereof to Borrower
and Lenders; provided, however, that failure to give such notice shall not
affect the validity of such rate. Each determination by Agent of LIBOR shall be
conclusive and binding upon the parties hereto in the absence of demonstrable
error. LIBOR Loans shall be in tranches of One Million Dollars ($1,000,000) or
One Hundred Thousand Dollars ($100,000) increments in excess thereof. No more
than six (6) LIBOR Loan tranches shall be outstanding at any one time.
(c) Interest Payments. Subject to Section 2.03(d),
interest accrued on all Loans shall be payable by Borrower in arrears on the
first Business Day of the first calendar month following the Closing Date, and
the first Business Day of each succeeding calendar month thereafter, and on the
Termination Date.
(d) Default Interest. Notwithstanding the rates of
interest specified in Sections 2.03(a) and 2.03(b) and the payment dates
specified in Section 2.03(c), effective immediately upon demand by Agent after
the occurrence of an Event of Default and during the continuance of any Event of
Default, the principal balance of all Loans then outstanding and, to the extent
permitted by applicable law, any interest payments on the Loans not paid when
due shall bear interest payable upon demand at a rate which is five percent (5%)
per annum in excess of the rate or rates of interest otherwise payable under
this Agreement. All other amounts due Agent, Swingline Lender, Issuing Lender or
Lenders (whether directly or for reimbursement) under this Agreement or any of
the other Loan Documents if not paid when due, or if no time period is
expressed, if not paid within fifteen (15) days after written demand to
Borrower, shall bear interest from and after demand at the rate which is five
percent (5%) per annum in excess of the lowest rate or rates of interest
otherwise payable under this Agreement, or, if no Loans are then outstanding, at
the rate which is five percent (5%) per annum in excess of the rate of interest
applicable to Base Rate Loans.
(e) Late Fee. Borrower acknowledges that late payment
hereunder will cause Agent, Swingline Lender, Issuing Lender and Lenders to
incur costs not contemplated by this Agreement. Such costs include without
limitation processing and accounting charges. Therefore, if Borrower fails
timely to pay any sum due and payable hereunder through the Termination Date
(other than payments of principal), unless waived by Agent pursuant to Section
12.05(e), a late charge of four cents ($.04) for each dollar of any interest
payment due hereon and which is not paid within ten (10) days after such payment
is due or of any other amount due hereon (other than payments of principal) and
which is not paid within thirty (30) days after such payment is due, shall be
charged by Agent (for the benefit of Swingline Lender, Issuing Lender and
Lenders, as applicable) and paid by Borrower for the purpose of defraying the
expense incident to handling such delinquent payment; provided, however, that no
late charges shall be assessed with respect to any amount for which Borrower is
obligated to pay interest at the rate specified in Section 2.03(d), provided,
further, that in no event shall Agent, Swingline Lender, Issuing Lender or
Lenders be required to refund any late fees paid by Borrower, notwithstanding
the preceding proviso. Borrower, Agent,
27
Swingline Lender, Issuing Lender, and Lenders agree that this late charge
represents a reasonable sum considering all of the circumstances existing on the
date hereof and represents a fair and reasonable estimate of the costs that
Agent, Swingline Lender, Issuing Lender and Lenders will incur by reason of late
payment. Borrower, Agent, Swingline Lender, Issuing Lender and Lenders further
agree that proof of actual damages would be costly and inconvenient. Acceptance
of any late charge shall not constitute a waiver of the default with respect to
the overdue installment, and shall not prevent Agent from exercising any of the
other rights available hereunder or any other Loan Document. Such late charge
shall be paid without prejudice to any other rights of Agent.
(f) Computation of Interest. Interest and fees shall be
computed on the basis of the actual number of days elapsed in the period during
which interest or fees accrue and a year of three hundred sixty (360) days. In
computing interest on any Loan, the date of the making of the Loan shall be
included and the date of payment shall be excluded; provided, however, that if a
Loan is repaid on the same day on which it is made, one (1) day's interest shall
be paid on that Loan. Notwithstanding subsections (a), (b), (d) and (e) above,
interest in respect of any Loan shall not exceed the maximum rate permitted by
applicable law.
(g) Changes; Legal Restrictions. In the event that after
the Closing Date (A) the adoption of or any change in any law, treaty, rule,
regulation, guideline or determination of a court or Governmental Authority or
any change in the interpretation or application thereof by a court or
Governmental Authority, or (B) compliance by Agent, Swingline Lender, Issuing
Lender or any Lender with any request or directive made or issued after the
Closing Date (whether or not having the force of law and whether or not the
failure to comply therewith would be unlawful) from any central bank or other
Governmental Authority or quasi-governmental authority:
(i) subjects Agent, Swingline Lender, Issuing Lender or
any Lender to any tax, duty or other charge of any kind with respect to
the Facility, this Agreement or any of the other Loan Documents or the
Loans or the Letters of Credit or changes the basis of taxation of
payments to Agent, Swingline Lender, Issuing Lender or such Lender of
principal, fees, interest or any other amount payable hereunder, except
for net income, gross receipts, gross profits or franchise taxes
imposed by any jurisdiction and not specifically based upon loan
transactions (all such non-excepted taxes, duties and other charges
being hereinafter referred to as "Lender Taxes");
(ii) imposes, modifies or holds applicable, in the
determination of Agent, Swingline Lender, Issuing Lender or any Lender,
any reserve, special deposit, compulsory loan, FDIC insurance, capital
allocation or similar requirement against assets held by, or deposits
or other liabilities in or for the account of, advances or loans by, or
other credit extended by, or any other acquisition of funds by, Agent,
Swingline Lender, Issuing Lender or such Lender or any applicable
lending office (except to the extent that the reserve and FDIC
insurance requirements are reflected in the "Base Rate" or "LIBOR
Rate"); or
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(iii) imposes on Agent, Swingline Lender, Issuing Lender or
any Lender any other condition materially more burdensome in nature,
extent or consequence than those in existence as of the Closing Date;
and the result of any of the foregoing is to (X) increase the cost to Agent,
Swingline Lender, Issuing Lender or any Lender of making, renewing, maintaining
or participating in the Loans or issuing or participating in the Letters of
Credit or to reduce any amount receivable hereunder or thereunder or (Y) to
require Agent, Swingline Lender, Issuing Lender or any Lender or any applicable
lending office to make any payment calculated by reference to the amount of the
Loan held or interest received by it; then, in any such case, Borrower shall
promptly pay to Agent, Swingline Lender, Issuing Lender or such Lender, as
applicable, upon demand, such amount or amounts (based upon a reasonable
allocation thereof by Agent, Swingline Lender, Issuing Lender or such Lender to
the financing transactions contemplated by this Agreement and affected by this
Section 2.03(g)) as may be necessary to compensate Agent, Swingline Lender,
Issuing Lender or such Lender for any such additional cost incurred, reduced
amounts received or additional payments made to the extent Agent, Swingline
Lender, Issuing Lender or such Lender generally imposes such additional costs,
losses and payments on other borrowers in similar circumstances. Agent,
Swingline Lender, Issuing Lender or such Lender shall deliver to Borrower and in
the case of a delivery by a Lender, such Lender shall also deliver to Agent, a
written statement in reasonable detail of the claimed additional costs incurred,
reduced amounts received or additional payments made and the basis therefor as
soon as reasonably practicable after Agent or such Lender, as applicable,
obtains knowledge thereof.
(h) Certain Provisions Regarding LIBOR Loans
(i) LIBOR Lending Unlawful. If any Lender shall determine
in good faith that the introduction of or any change in or in the
interpretation of any law makes it unlawful, or any central bank or
other governmental authority asserts that it is unlawful, for such
Lender to make or maintain any Loan as a LIBOR Loan, (A) the
obligations of the Lenders to make or maintain any Loans as LIBOR Loans
shall, upon such determination, forthwith be suspended until such
Lender shall notify Agent that the circumstances causing such
suspension no longer exist, and (B) if required by law or such
assertion, all LIBOR Loans shall automatically convert into Base Rate
Loans.
(ii) Deposits Unavailable. If Agent shall have determined
in good faith that adequate means do not exist for ascertaining the
interest rate applicable hereunder to LIBOR Loans, then, upon notice
from Agent to Borrower the obligations of all Lenders to make or
maintain Loans as LIBOR Loans shall forthwith be suspended until Agent
shall notify Borrower that the circumstances causing such suspension no
longer exist. Agent will give such notice when it determines, in good
faith, that such circumstances no longer exist; provided, however, that
Agent shall not have any liability to any Person with respect to any
delay in giving such notice.
(iii) Funding Losses. In the event any Lender shall incur
any loss or expense (including any loss or expense incurred by reason
of the liquidation or reemployment of deposits or other funds acquired
by such Lender to make or maintain any portion of any Loan as a LIBOR
Loan) as a result of:
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(A) any continuance, conversion, repayment or
prepayment of the principal amount of any LIBOR Loans for any
reason whatsoever on a date other than the scheduled last day
of the Interest Period applicable thereto; or
(B) any Loans not being made as LIBOR Loans in
accordance with the Notice of Borrowing therefor, other than
as a result of such Lender's breach of its obligation to fund
such Loans in accordance with the terms hereof;
then, within fifteen (15) Business Days after Borrower's receipt of the
written notice of such Lender to Borrower with a copy to Agent,
Borrower shall reimburse such Lender for such loss or expense;
provided, however, that each Lender will use reasonable efforts to
minimize such loss or expense. Such written notice (which shall include
calculations in reasonable detail) shall, in the absence of
demonstrable error, be conclusive and binding on the parties hereto.
(i) Withholding Tax Exemption. Each Lender that is not
created or organized under the laws of the United States of America or a
political subdivision thereof shall deliver to Borrower and Agent no later than
the Closing Date (or, in the case of a Lender which becomes a Lender pursuant to
Section 11.13, the date upon which such Lender becomes a party hereto) a true
and accurate certificate executed in duplicate by a duly authorized officer of
such Lender, in a form satisfactory to Borrower and Agent, to the effect that
such Lender is capable, under the provisions of an applicable treaty concluded
by the United States of America (in which case the certificate shall be
accompanied by three (3) accurate and complete duly executed originals of Form
W-8BEN of the Internal Revenue Service) or under Section 1442 of the Internal
Revenue Code (in which case the certificate shall be accompanied by three (3)
accurate and complete duly executed originals of Form W-8ECI of the Internal
Revenue Service), of receiving payments of principal, interest and fees
hereunder without deduction or withholding of United States federal income tax.
Further, if at any time a Lender changes its applicable lending office or
selects an additional applicable lending office, it shall, at the same time or
promptly thereafter, but only to the extent the certificate and forms previously
delivered by it hereunder are no longer applicable or effective, deliver to
Borrower and Agent in replacement for, or in addition to, the certificate and
forms previously delivered by it hereunder, a true and accurate certificate
executed in duplicate by a duly authorized officer of such Lender accompanied by
three (3) accurate and complete duly executed originals of either Form W-8BEN of
the Internal Revenue Service or Form W-8ECI of the Internal Revenue Service,
whichever is applicable, indicating that such Lender is entitled to receive
payments of principal, interest and fees for the account of such changed or
additional applicable lending office under this Agreement without deduction or
withholding of United States federal tax. Each Lender further agrees to deliver
to Borrower and Agent a true and accurate certificate executed in duplicate by a
duly authorized officer of such Lender accompanied by three (3) accurate and
complete duly executed originals of either Form W-8BEN of the Internal Revenue
Service or Form W-8ECI of the Internal Revenue Service, whichever is
appropriate, substantially in a form satisfactory to Borrower and Agent, before
or promptly upon the occurrence of any event requiring a change in the most
recent certificate or Internal Revenue Service form previously delivered by it
to Borrower and Agent pursuant to this Section 2.03(j). Further, each Lender
which delivers a certificate accompanied by Form W-8BEN of the Internal Revenue
Service covenants and agrees to deliver to Borrower and Agent within fifteen
(15) days prior to January 1, 2003, and every third (3rd) anniversary of such
date thereafter, on which this Agreement is still in effect, another such
certificate and three (3)
30
accurate and complete original signed copies of Form W-8BEN (or any successor
form or forms required under the Internal Revenue Code or the applicable
regulations promulgated thereunder), and each Lender that delivers a certificate
accompanied by Form W-8ECI of the Internal Revenue Service covenants and agrees
to deliver to Borrower and Agent within fifteen (15) days prior to the beginning
of each subsequent taxable year of such Lender during which this Agreement is
still in effect, another such certificate and three (3) accurate and complete
original signed copies of Internal Revenue Service Form W-8ECI (or any successor
form or forms required under the Internal Revenue Code or the applicable
regulations promulgated hereunder). If (i) any Lender is required under this
Section 2.03(j) to provide a certificate or other evidence described above and
fails to deliver to Borrower and Agent such certificate or other evidence or
(ii) any Lender delivers a certificate to the effect that, as a result of the
adoption of or any change in any law, treaty, rule, regulation, guideline or
determination of a Governmental Authority after the date such Lender became a
party hereto, such Lender is not capable of receiving payments of interest
hereunder without deduction or withholding of United States federal income tax
as specified therein and that it is not capable of recovering the full amount of
the same from a source other than Borrower, then, to the extent required by law,
as the sole consequence of such Lender's failure to deliver the certificate
described in (i) above or such Lender's delivery of the certificate described in
(ii) above, Borrower shall be entitled to deduct or withhold taxes from the
payments owed to such Lender.
2.04 Fees.
(a) Intentionally Deleted.
(b) Unused Facility Fee. Until the Obligations are paid
in full and this Agreement is terminated or, if sooner, the date the Commitments
terminate, and subject to Section 11.04(b), Borrower shall pay to Agent, for the
account of each Lender, an Unused Facility Fee accruing from and after the
Closing Date at the rate described below upon the amount during each calendar
quarter of (i) the Facility, minus (ii) the sum of (A) the average daily
aggregate principal balance of all Loans then outstanding other than Swingline
Loans and (B) the average daily aggregate face amount of all outstanding Letters
of Credit (the "Unused Amount"). The Unused Facility Fee will be calculated and
will accrue at the rate per annum of fifteen one-hundredths of one percent
(.15%). Subject to Section 11.04(b), each Lender shall be entitled to receive
its Pro Rata Share of such Unused Facility Fee. All such Unused Facility Fees
payable under this paragraph shall be payable in arrears on the fifth Business
Day in each calendar quarter beginning with the first calendar quarter after the
Closing Date.
(c) Arrangement and Administrative Agency Fees. Borrower
shall pay Agent such fees as are provided for in the separate fee agreement
between Agent and Borrower, as in existence from time to time.
(d) Letter of Credit Fee. With respect to each Letter of
Credit, Borrower agrees to pay to Agent (i) a letter of credit fee equal to the
Applicable Margin on the face amount of such Letter of Credit for the term of
such Letter of Credit to be distributed by Agent to each Lender according to its
Pro Rata Share payable in arrears on the fifth Business Day in each calendar
quarter beginning with the first calendar quarter after the Closing Date and
ending on the date of the expiration, return or termination of such Letter of
Credit if such date is a date
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other than the first Business Day of a calendar month and (ii) a non-refundable
issuing fee of $500.00 solely for the account of Issuing Lender, payable in full
on the date of issuance thereof.
(e) Payment of Fees. The fees described in this Section
2.04 represent compensation for services rendered and to be rendered separate
and apart from the lending of money or the provision of credit and do not
constitute compensation for the use, detention or forbearance of money, and the
obligation of Borrower to pay the fees described herein shall be in addition to,
and not in lieu of, the obligation of Borrower to pay interest, other fees and
expenses otherwise described in this Agreement. All fees shall be payable when
due in California in immediately available funds and shall be non-refundable
when paid. If Borrower fails to make any payment of fees or expenses specified
or referred to in this Agreement due to Agent or Lenders, including without
limitation those referred to in this Section 2.04 or otherwise under this
Agreement or any separate fee agreement between Borrower and Agent relating to
this Agreement, when due, the amount due shall bear interest until paid at the
Base Rate and, after five (5) days at the rate specified in Section 2.03(d) (but
not to exceed the maximum rate permitted by applicable law) and shall constitute
part of the Obligations. All fees described in this Section 2.04 which are
expressed as a per annum charge shall be calculated on the basis of the actual
number of days elapsed in a three hundred sixty (360) day year.
2.05 Payments.
(a) Voluntary Prepayments. Borrower may, upon not less
than three (3) Business Days prior written notice (or with written notice not
later than 1:00 P.M. (California time) on the same Business Day in the case of a
Swingline Loan), at any time and from time to time, prepay any Loans, without
premium or penalty (other than as set forth in Section 2.03(h)(iii)), in whole
or in part in amounts not less than One Hundred Thousand Dollars ($100,000) or
integral multiples of Twenty-Five Thousand Dollars ($25,000) in excess of One
Hundred Thousand Dollars ($100,000). Any notice of prepayment given to Agent
under this Section 2.05(a) shall specify the date of prepayment and the
aggregate principal amount of the prepayment. All prepayments of principal shall
be accompanied by a payment of all accrued and unpaid interest thereon.
(b) Manner and Time of Payment. All payments of
principal, interest and fees hereunder payable to Agent, Swingline Lender,
Issuing Lender or the Lenders shall be made without condition or reservation of
right and free of set-off or counterclaim, in Dollars and by (i) wire transfer
(pursuant to Agent's written wire transfer instructions) of immediately
available funds, delivered to Agent not later than 11:00 A.M. (California time)
(or 2:00 P.M. (California time) in the case of a Swingline Loan) on the date
due; and funds received by Agent after that time and date shall be deemed to
have been paid on the next succeeding Business Day or (ii) by check (pursuant to
Agent's written check payment instructions) delivered to Agent, such check and
the payment intended to be covered thereby to be deemed to have been paid on the
date Agent receives immediately available funds therefor. All payments of
principal, interest and fees hereunder shall be made by (i) wire transfer of
immediately available funds to Xxxxx Fargo Bank, N.A. (ABA number 000000000) for
credit to account number AC2963507207, reference MHC Operating Limited
Partnership, loan number 6023AMC with telephonic notice to Xxxxxxxxx XxxXxxxxx
at (000) 000-0000 or (ii) check payable to Xxxxx Fargo Bank, N.A., and delivered
to Agent at 0000 X. Xxxx Xxxxx, Xxxxx 000, Xx Xxxxxxx, Xxxxxxxxxx 00000, Attn:
Xxxxxxxxx
32
MacDonald, or to such other bank, account or address as Agent may specify in a
written notice to Borrower.
(c) Payments on Non-Business Days. Whenever any payment
to be made by Borrower hereunder shall be stated to be due on a day which is not
a Business Day, payment shall be made on the next succeeding Business Day and
such extension of time shall be included in the computation of the payment of
interest hereunder and of any of the fees specified in Section 2.04, as the case
may be.
2.06 Increased Capital. If either (i) the introduction of
or any change in or in the interpretation of any law or regulation or (ii)
compliance by Agent, Swingline Lender, Issuing Lender or any Lender with any
guideline or request from any central bank or other Governmental Authority
(whether or not having the force of law and whether or not the failure to comply
therewith would be unlawful) made or issued after the Closing Date affects or
would affect the amount of capital required or expected to be maintained by
Agent, Swingline Lender, Issuing Lender or such Lender or any corporation
controlling Agent, Swingline Lender, Issuing Lender or such Lender, and Agent,
Swingline Lender, Issuing Lender or such Lender determines that the amount of
such capital is increased by or based upon the existence of the obligations of
Agent, Swingline Lender, Issuing Lender or such Lender, then, upon demand by
Agent, Swingline Lender, Issuing Lender or such Lender, Borrower shall
immediately pay to Agent, Swingline Lender, Issuing Lender or such Lender, from
time to time as specified by Agent, Swingline Lender, Issuing Lender or such
Lender, additional amounts sufficient to compensate Agent, Swingline Lender,
Issuing Lender or such Lender in light of such circumstances, to the extent that
Agent, Swingline Lender, Issuing Lender or such Lender reasonably determines
such increase in capital to be allocable to the existence of the obligations of
Agent, Swingline Lender, Issuing Lender or such Lender hereunder and to the
extent Agent, Swingline Lender, Issuing Lender or such Lender generally imposes
such amounts on other borrowers in similar circumstances. A certificate as to
such amounts submitted to Borrower by Agent, Swingline Lender, Issuing Lender or
such Lender shall, in the absence of manifest error, be conclusive and binding
for all purposes.
2.07 Notice of Increased Costs. Each of Agent, Swingline
Lender, Issuing Lender and the Lenders agrees that, as promptly as reasonably
practicable after it becomes aware of the occurrence of an event or the
existence of a condition which would cause it to be affected by any of the
events or conditions described in Section 2.03(g) or (h), or Section 2.06, it
will notify Borrower and provide in such notice a reasonably detailed
calculation of the amount due from Borrower, and provide a copy of such notice
to Agent, of such event and the possible effects thereof. If Agent, Swingline
Lender, Issuing Lender or the affected Lender shall fail to notify Borrower of
the occurrence of any such event or the existence of any such condition within
ninety (90) days following the end of the month during which such event occurred
or such condition arose, then Borrower's liability for any amounts described in
said Sections 2.03(g) and (h) and 2.06 incurred by Agent, Swingline Lender,
Issuing Lender or such affected Lender as a result of such event or condition
shall be limited to those attributable to the period occurring subsequent to the
ninetieth (90th) day prior to the date upon which Agent, Swingline Lender,
Issuing Lender or such affected Lender actually notified Borrower of such event
or condition.
2.08 Option to Replace Lenders.
33
(a) Lenders. If any Lender shall make any demand for
payment or reimbursement pursuant to Section 2.03(g), Section 2.03(h) or Section
2.06, then, provided that (a) there does not then exist any Unmatured Event of
Default or Event of Default and (b) the circumstances resulting in such demand
for payment or reimbursement are not applicable to all Lenders, Borrower may
terminate the Commitment of such Lender, in whole but not in part, by (i) giving
such Lender and Agent not less than three (3) Business Days prior written notice
thereof, which notice shall be irrevocable and effective only upon receipt
thereof by such Lender and Agent and shall specify the effective date of such
termination, (ii) paying to such Lender (and there shall become due and payable)
on such date the outstanding principal amount of all Loans made by such Lender,
all interest thereon, and all other Obligations owed to such Lender, including,
without limitation, amounts owing under Sections 2.03(g), 2.03(h)(iii), 2.04 and
2.06, if any, and (iii) pursuant to the provisions of Section 11.13, proposing
the introduction of a replacement Lender reasonably satisfactory to Agent, or
obtaining the agreement of one or more existing Lenders, to assume the entire
amount of the Commitment of the Lender whose Commitment is being terminated, on
the effective date of such termination. Upon the satisfaction of all of the
foregoing conditions, such Lender which is being terminated pursuant to this
Section 2.08 shall cease to be a "Lender" for purposes of this Agreement
provided that Borrower shall continue to be obligated to such Lender under
Sections 12.01 and 12.02 (and any other indemnifications contained herein or in
any other Loan Document) with respect to or on account of unpaid, unliquidated,
unknown or similar claims or liabilities accruing prior to such Lender ceasing
to be a "Lender" for purposes of this Agreement.
(b) Agent, Swingline Lender and Issuing Lender. If Agent,
Swingline Lender or Issuing Lender shall make any demand for payment or
reimbursement pursuant to Section 2.03(g), Section 2.03(h) or Section 2.06,
then, provided that (a) there does not then exist any Unmatured Event of Default
or Event of Default and (b) the circumstances resulting in such demand for
payment or reimbursement are not applicable to all Lenders, Borrower may remove
Agent, Swingline Lender and Issuing Lender by (i) giving the Lenders and Agent
not less than thirty (30) Business Days prior written notice thereof, and (ii)
paying to Agent, Swingline Lender and Issuing Lender (and there shall become due
and payable) on such date all other Obligations owed to Agent, Swingline Lender
and Issuing Lender, including, without limitation, amounts owing under Sections
2.03(g), 2.03(h), 2.04 and 2.06, if any. Agent, Swingline Lender and Issuing
Lender shall be replaced in accordance with the provisions of Section 11.09
hereof.
2.09 Letters of Credit.
(a) Letter of Credit Availability. Subject to the terms
and conditions set forth in this Agreement, at any time and from time to time
through the date that is thirty (30) days prior to the Maturity Date, Issuing
Lender shall issue such Letters of Credit for the account of Borrower as
Borrower may request in accordance with this Section 2.09; provided that (i)
upon issuance of such Letters of Credit, the sum of the aggregate principal
amount of all outstanding Loans (including Swingline Loans) plus the aggregate
face amount of all outstanding Letters of Credit shall not exceed Loan
Availability, provided, that if a Base Rate Loan is being made pursuant to
Section 2.09(e) hereof to reimburse Issuing Lender for a drawn Letter of Credit,
to avoid a duplicative reduction in the amount of Loan Availability, the drawn
Letter of Credit shall not be considered outstanding; (ii) the aggregate face
amount of all outstanding Letters of Credit shall not exceed Thirty Million
Dollars ($30,000,000); and (iii) unless all Lenders otherwise consent in
writing, the term of any Letter of Credit shall not extend or be extended beyond
the
34
date which is ten (10) days prior to the Maturity Date and no Letter of Credit
shall contain an automatic extension or renewal clause. Use of funds drawn under
Letters of Credit shall be subject to the same conditions as those for use of
Loan proceeds set forth in Section 7.01(i) hereof.
(b) Request for Letter of Credit. Borrower shall deliver
to Agent and Issuing Lender a duly executed letter of credit application
substantially in the form attached as Exhibit H hereto (a "Letter of Credit
Application") not later than 10:00 A.M., (California time), at least five (5)
Business Days prior to the date upon which a requested Letter of Credit is to be
issued. Borrower shall further deliver to Agent and Issuing Lender such
additional instruments and documents as Issuing Lender may reasonably require,
in conformity with customary and commercially reasonable practices or law, in
connection with the issuance of such Letter of Credit.
(c) Issuance of Letters of Credit. Subject to the
conditions set forth in this Agreement, Issuing Lender shall issue the Letter of
Credit on or before 5:00 P.M. (California time), on or before the day which is
five (5) Business Days following receipt of the documents last due pursuant to
Section 2.09(b) hereof in respect thereof. Upon issuance of a Letter of Credit,
Issuing Lender shall promptly notify Lenders of the amount and terms thereof.
Issuing Lender shall provide copies of each Letter of Credit to Lenders promptly
following issuance thereof and shall notify Lenders promptly of all payments,
reimbursements, expirations, negotiations, transfers and other activity with
respect to outstanding Letters of Credit.
(d) Participations. Each Lender, upon issuance by Issuing
Lender of a Letter of Credit in accordance with the provisions of this
Agreement, shall be deemed to have purchased without recourse a risk
participation from Issuing Lender in such Letter of Credit and the obligations
arising thereunder, in each case in an amount equal to its Pro Rata Share of the
obligations under such Letter of Credit, and shall absolutely, unconditionally
and irrevocably assume, as primary obligor and not as surety, and be obligated
to pay to Issuing Lender therefor and discharge when due, its Pro Rata Share of
the obligations arising under such Letter of Credit.
(e) Reimbursement. In the event of any drawing or request
for drawing under any Letter of Credit, Issuing Lender will promptly notify
Borrower and Agent thereof. Unless Borrower shall notify Issuing Lender of its
intent to otherwise reimburse Issuing Lender immediately upon receipt of notice
from Issuing Lender of a drawing under a Letter of Credit, Borrower shall be
deemed to have requested Base Rate Loans in the amount of the drawing as
provided in subsection (f) hereof, the proceeds of which will be used to satisfy
the reimbursement obligations. Borrower shall reimburse Issuing Lender on the
day of drawing under any Letter of Credit (either with the proceeds of a Loan
obtained hereunder or otherwise) in same day funds as provided herein. If
Borrower shall fail to reimburse Issuing Lender as provided hereinabove, the
unreimbursed amount of such drawing shall bear interest at a per annum rate
equal to the Base Rate plus two percent (2%). Borrower's reimbursement
obligations hereunder shall be absolute and unconditional under all
circumstances irrespective of any rights of set-off, counterclaim or defense to
payment Borrower may claim or have against Issuing Lender, Agent, the Lenders,
the beneficiary of the Letter of Credit drawn upon or any other Person,
including, without limitation, any defense based on any failure of Borrower to
receive consideration or the legality, validity, regularity or unenforceability
of the Letter of Credit; provided, however, that (i) the Borrower shall not be
obligated to reimburse Issuing
35
Lender and (ii) Lenders shall not be obligated to fund Loans or purchase
participations hereunder in reimbursement of Issuing Lender, for any wrongful
payment made by Issuing Lender under a Letter of Credit as a result of acts or
omissions constituting bad faith, willful misconduct or gross negligence on the
part of Issuing Lender. The Letter of Credit Obligations will be evidenced by
the Letter of Credit Note.
(f) Repayment with Loans. On any day on which Borrower
shall have requested, or been deemed to have requested, Base Rate Loans to
reimburse a drawing under a Letter of Credit, Agent shall give notice to the
Lenders that such Loans have been requested or deemed requested in connection
with a drawing under a Letter of Credit, in which case such Loans (collectively,
a "Letter of Credit Mandatory Borrowing") shall be immediately made by all
Lenders (without giving effect to any termination of the Commitments pursuant to
Section 10.02 hereof) pro rata based on each Lender's Pro Rata Share and the
proceeds thereof shall be paid directly to Issuing Lender for application to the
respective Letter of Credit Obligations. Each Lender hereby irrevocably agrees
to make such Loans promptly upon any such request or deemed request in the
amount and in the manner specified in the preceding sentence and on the same
such date (or the next Business Day if such notice is received after 10:00 A.M.
(California time)) notwithstanding (i) the amount of the Letter of Credit
Mandatory Borrowing may not comply with the minimum amount for Borrowings
otherwise required hereunder, (ii) whether any conditions specified in Section
4.02 are then satisfied, (iii) whether an Event of Default or Unmatured Event of
Default then exists, (iv) failure of any such request or deemed request for a
Borrowing to be made by the time otherwise required in Section 2.01 hereof, (v)
the date of such Letter of Credit Mandatory Borrowing (provided that such date
must be a Business Day), or (vi) any termination of the Commitments immediately
prior to such Letter of Credit Mandatory Borrowing or contemporaneously
therewith. In the event that any Letter of Credit Mandatory Borrowing cannot for
any reason occur in respect of a Letter of Credit on the date otherwise required
above (including, without limitation, as a result of the commencement of a
proceeding under the Bankruptcy Code with respect to Borrower), then each Lender
hereby agrees that it shall forthwith fund (as of the date the Letter of Credit
Mandatory Borrowing would otherwise have occurred, but adjusted for any payments
received from Borrower on or after such date and prior to such funding) its
participation interest in the outstanding obligations arising in connection with
such Letter of Credit, provided that (A) all interest payable on Borrower's
reimbursement obligation with respect to such Letter of Credit shall be for the
account of Issuing Lender until but excluding the day upon which the Letter of
Credit Mandatory Borrowing would otherwise have occurred, and (B) in the event
of a delay between the day upon which the Letter of Credit Mandatory Borrowing
would otherwise have occurred and the time any funding of a participation
pursuant to this sentence is actually made, the funding Lender shall be required
to pay to the Issuing Lender interest on the principal amount of such
participation for each day from and including the day upon which the Letter of
Credit Mandatory Borrowing would otherwise have occurred to but excluding the
date of funding of such participation, at the rate equal to the Federal Funds
Rate, for the two (2) Business Days after the date the Letter of Credit
Mandatory Borrowing would otherwise have occurred, and thereafter at a rate
equal to the Base Rate.
(g) Modification, Extension. The issuance of any
supplement, modification, amendment, renewal, or extension to any Letter of
Credit shall, for purposes hereof, be treated in all respects the same as if it
were the issuance of a new Letter of Credit hereunder.
36
(h) Uniform Customs and Practices. Issuing Lender may
have the Letters of Credit be subject to The Uniform Customs and Practice for
Documentary Credits, as published as of the date of issue by the International
Chamber of Commerce (the "UCP"), in which case the UCP may be incorporated
therein and deemed in all respects to be a part thereof.
(i) Collateralization at Termination Date. Upon the
occurrence of the Termination Date prior to the expiration of all Letters of
Credit, Borrower shall provide to Issuing Lender a standby letter of credit
issued by a bank with a rating of its senior unsecured debt obligations of not
less than A by Xxxxx'x, in form and substance satisfactory to Issuing Lender, in
favor of Issuing Lender in a face amount equal to the outstanding Letters of
Credit on that date, or shall make other provisions satisfactory to Issuing
Lender and Agent for the full collateralization, by cash or cash equivalent, of
such outstanding Letters of Credit. In the event of failure of Borrower to
comply with the requirement of this Section 2.09(i), such portion of the face
amount of all outstanding Letters of Credit as to which Borrower has failed to
comply shall be deemed to be immediately due and payable.
(j) Limitation of Liability. Borrower assumes all risks
of the acts or omissions of any beneficiary or transferee of any Letter of
Credit with respect to its use of such Letter of Credit absent the bad faith,
gross negligence or willful misconduct of Issuing Lender. Neither Issuing
Lender, Agent, any Lender nor any of their respective officers, directors,
employees or agents shall be liable or responsible for, nor shall Borrower's
obligations hereunder in respect of such Letters of Credit be impaired as a
result of any of the following absent the bad faith, gross negligence or willful
misconduct of Issuing Lender:
(i) any lack of validity or enforceability of any Letter
of Credit or any other agreement or instrument relating thereto (such
Letter of Credit and any other agreement or instrument relating thereto
being, collectively, the "Letter of Credit Documents");
(ii) the use that may be made of any Letter of Credit or
any acts or omissions of any beneficiary or transferee in connection
therewith;
(iii) any 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 being untrue or
inaccurate in any respect;
(iv) the existence of any claim, setoff, defense or other
right that Borrower may have at any time against any beneficiary or any
transferee of a Letter of Credit (or any Persons for whom any such
beneficiary or any such transferee may be acting), Issuing Lender or
any other Person, whether in connection with the transactions
contemplated by the Letter of Credit Documents or any unrelated
transaction;
(v) failure of any documents to bear any reference or
adequate reference to the Letter of Credit; or
(vi) any other circumstances whatsoever in making or
failing to make payment under any Letter of Credit.
In furtherance and not in limitation of the foregoing, Issuing Lender may accept
documents that appear on their face to be in order, without responsibility for
further investigation, regardless of
37
any notice or information to the contrary, absent the bad faith, gross
negligence or willful misconduct of Issuing Lender.
(k) Lenders. Any action taken or omitted to be taken by
Issuing Lender under or in connection with any Letter of Credit, if taken or
omitted in the absence of bad faith, gross negligence or willful misconduct,
shall not put Issuing Lender under any resulting liability to any Lender or
relieve that Lender of its obligations hereunder to Issuing Lender. In
determining whether to pay under any Letter of Credit, Issuing Lender shall have
no obligations to Lenders other than to confirm that any documents required to
be delivered under such Letter of Credit appear to have been delivered and that
they appear to comply on their face with the requirements of such Letter of
Credit.
(l) Indemnification. Borrower shall indemnify and hold
harmless Issuing Lender, Agent and Lenders from and against any and all claims,
damages, losses, liabilities, reasonable costs and expenses of any kind
whatsoever, including reasonable fees and expenses of attorneys that such
indemnified Person may incur, together with all reasonable costs and expenses
resulting from the compromise or defense of any claims or liabilities
hereinafter described, by reason of or in connection with (i) the execution and
delivery or transfer of, or payment or failure to pay under, any Letter of
Credit, (ii) any suit, action or proceeding brought by any Person to require or
present payment under any Letter of Credit, or (iii) any breach by Borrower of
any warranty, covenant, term or condition in, or the occurrence of any default
under, any Letter of Credit or any related contract; provided, however, that
Borrower shall not be required to indemnify Issuing Lender, Agent or any Lender
for any claims, damages, losses, liabilities, costs or expenses to the extent,
but only to the extent, caused by the willful misconduct, gross negligence, bad
faith or fraud of such indemnified Person; and provided, further, that Issuing
Lender will be liable to Borrower for any damages suffered by Borrower as a
result of Issuing Lender's grossly negligent or willful failure to pay under any
Letter of Credit after the presentment to it of documentation in strict
compliance with the terms and conditions of the Letter of Credit and absent any
challenge by any Person (other than Issuing Lender or any of its affiliates) to
the making of such payment.
2.10 Swingline Loans
(a) Swingline Availability. Subject to the terms and
conditions set forth in this Agreement, Swingline Lender agrees to make certain
revolving loans to Borrower (each a "Swingline Loan" and, collectively, the
"Swingline Loans") from time to time during the period from the Closing Date to
the fifth day preceding the Maturity Date; provided, however, that the aggregate
amount of Swingline Loans outstanding at any time shall not exceed the lesser of
(i) THIRTY MILLION DOLLARS ($30,000,000), and (ii) the excess of Loan
Availability over the sum of the aggregate principal amount of all outstanding
Loans (excluding Swingline Loans) plus the aggregate face amount of all
outstanding Letters of Credit, provided, that if a Base Rate Loan is being made
pursuant to Section 2.09(e) hereof to reimburse Issuing Lender for a drawn
Letter of Credit, to avoid a duplicative reduction in the amount of Loan
availability, the drawn Letter of Credit shall not be considered outstanding.
Subject to the limitations set forth herein, any amounts repaid in respect of
Swingline Loans may be reborrowed.
(b) Swingline Borrowings.
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(i) Notice of Borrowing. Whenever Borrower desires to
borrow under this Section 2.10, Borrower shall give Swingline Lender
and Agent at Xxxxx Fargo Real Estate Group Disbursement Center, 0000
Xxxx Xxxx Xxxxx, Xxxxx 000, Xx Xxxxxxx, Xxxxxxxxxx 00000, with a copy
to Xxxxx Fargo Bank, N.A., 000 Xxxxx Xxxxxx Xxxxx, Xxxxx 0000, Xxxxxxx,
Xxxxxxxx 00000, Attn: Account Officer, or such other address as Agent
shall designate, an original or facsimile Notice of Borrowing no later
than 11:00 A.M. (California time) on the proposed date of such
borrowing (and confirmed by telephone by such time), specifying (A)
that a Swingline Loan is being requested, (B) the amount of such
Swingline Loan, (C) the proposed date of such Swingline Loan, which
shall be a Business Day, and (D) stating that no Event of Default or
Unmatured Event of Default has occurred and is continuing both before
and after giving effect to such Swingline Loan. Such notice shall be
irrevocable.
(ii) Minimum Amounts; Frequency of Swingline Loans. Each
Swingline Loan shall be in a minimum principal amount of $1,000,000, or
an integral multiple of $100,000 in excess thereof. Swingline Loans
shall be available no more frequently than six (6) times in any month.
(iii) Making of Swingline Loans. Swingline Lender shall
make the proceeds of each Swingline Loan available to Borrower in El
Segundo, California on the applicable Funding Date in Dollars and in
immediately available funds not later than 1:00 P.M. (California time)
on such Funding Date to Borrower's account, at Bank of America, Account
Number 75-01943 in Chicago, Illinois or such other account specified in
the Notice of Borrowing and acceptable to Agent.
(iv) Repayment of Swingline Loans. Each Swingline Loan
shall be due and payable on the earliest of (A) five (5) days from the
date of the applicable Funding Date for such Swingline Loan, (B) the
date of the next Borrowing under Section 2.01 hereof (other than a
Letter of Credit Mandatory Borrowing) or (C) the Termination Date. If,
and to the extent, any Swingline Loans shall be outstanding on the date
of any Borrowing under Section 2.01 hereof (other than a Letter of
Credit Mandatory Borrowing), such Swingline Loans shall first be repaid
from the proceeds of such Borrowing prior to the disbursement of the
same to Borrower. If, and to the extent, a Borrowing under Section 2.01
hereof (other than a Letter of Credit Mandatory Borrowing) is not
requested prior to the Termination Date or the end of the five (5) day
period after a Swingline Loan is made, Borrower shall be deemed to have
requested Base Rate Loans in the amount of the applicable Swingline
Loan then outstanding, the proceeds of which shall be used to repay
such Swingline Loan to the Swingline Lender. In addition, the Swingline
Lender may, at any time, in its sole discretion, by written notice to
Borrower and Agent, demand repayment of its Swingline Loans by way of
Base Rate Loans, in which case Borrower shall be deemed to have
requested Base Rate Loans in the amount of such Swingline Loans then
outstanding, the proceeds of which shall be used to repay such
Swingline Loans to the Swingline Lender. Any Borrowing which is deemed
requested by Borrower in accordance with this Section 2.10(b)(iv) is
hereinafter referred to as a "Swingline Mandatory Borrowing". Each
Lender hereby irrevocably agrees to make Base Rate Loans in accordance
with its Pro Rata Share promptly upon receipt of notice from the
Swingline Lender of any such deemed request for a Swingline Mandatory
Borrowing in the amount and in the manner specified in the preceding
sentences and on the date such
39
notice is received by such Lender (or the next Business Day if such
notice is received after 10:00 A.M. (California time)) notwithstanding
(I) the amount of the Swingline Mandatory Borrowing may not comply with
the minimum amount for Borrowings otherwise required hereunder, (II)
whether any conditions specified in Section 4.02 hereof are then
satisfied, (III) whether an Event of Default or Unmatured Event of
Default then exists, (IV) failure of any such deemed request for a
Borrowing to be made by the time otherwise required in Section 2.01
hereof, (V) the date of such Swingline Mandatory Borrowing (provided
that such date must be a Business Day), or (VI) any termination of the
Commitments immediately prior to such Swingline Mandatory Borrowing or
contemporaneously therewith; provided, however, that no Lender shall be
obligated to make any Loans under this Section 2.10(b)(iv) if an Event
of Default or Unmatured Event of Default then exists and the applicable
Swingline Loan was made by the Swingline Lender without receipt of a
written Notice of Borrowing in the form specified in subclause (i)
above or after Agent had delivered a notice of an Event of Default or
Unmatured Event of Default which had not been rescinded.
(v) Purchase of Participations. In the event that any
Swingline Mandatory Borrowing cannot for any reason occur on the date
otherwise required above (including, without limitation, as a result of
the commencement of a proceeding under the Bankruptcy Code with respect
to Borrower), then each Lender hereby agrees that it shall forthwith
purchase (as of the date the Swingline Mandatory Borrowing would
otherwise have occurred, but adjusted for any payment received from
Borrower on or after such date and prior to such purchase) from the
Swingline Lender such participations in the outstanding Swingline Loans
as shall be necessary to cause each such Lender to share in such
Swingline Loans ratably based upon its Pro Rata Share, provided that
(A) all interest payable on the Swingline Loans with respect to any
participation shall be for the account of the Swingline Lender until
but excluding the day upon which the Swingline Mandatory Borrowing
would otherwise have occurred, and (B) in the event of a delay between
the day upon which the Swingline Mandatory Borrowing would otherwise
have occurred and the time any purchase of a participation pursuant to
this sentence is actually made, the purchasing Lender shall be required
to pay to the Swingline Lender interest on the principal amount of such
participation for each day from and including the day upon which the
Swingline Mandatory Borrowing would otherwise have occurred to but
excluding the date of payment for such participation, at the rate equal
to the Federal Funds Rate, for the two (2) Business Days after the date
the Swingline Mandatory Borrowing would otherwise have occurred, and
thereafter at a rate equal to the Base Rate. Notwithstanding the
foregoing, no Bank shall be obligated to purchase a participation in
any Swingline Loan if an Event of Default or Unmatured Event of Default
then exists and such Swingline Loan was made by the Swingline Lender
without receipt of a written Notice of Borrowing in the form specified
in subclause (i) above or after Agent had delivered a notice of an
Event of Default or Unmatured Event of Default which had not been
rescinded.
(c) Interest Rate. Each Swingline Loan shall bear
interest at a rate per annum equal to the Base Rate minus 1.5% per annum.
ARTICLE III.
EXTENSION OPTION
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3.01 Extension Option. At the written request of Borrower
made at least thirty (30) days prior to the Initial Maturity Date, the Maturity
Date shall be extended to the one-year anniversary of the Initial Maturity Date
(the "Extended Maturity Date") provided that the following conditions are
satisfied:
(a) no Event of Default or Unmatured Event of Default
shall have occurred and be continuing as of the Initial Maturity Date;
(b) all representations and warranties made by Borrower
and the REIT contained in this Agreement and the other Loan Documents shall be
true and correct in all material respects as of the Initial Maturity Date except
to the extent they related to a specific date;
(c) Agent shall have received Officer's Certificates of
the REIT dated as of the Initial Maturity Date stating that the executive
officer who is the signatory thereto, which officer shall be the chief executive
officer or the chief financial officer of the REIT, has reviewed, or caused
under his supervision to be reviewed, the terms of this Agreement and the other
Loan Documents, and has made, or caused to be made under his supervision, a
review in reasonable detail of the transactions and condition of Borrower, the
REIT, the Subsidiaries, and the Agreement Parties, and that (A) such review has
not disclosed the existence as of the date of such Officer's Certificate, and
that the signer does not have knowledge of the existence as of the date of such
Officer's Certificate, of any condition or event which constitutes an Event of
Default or Unmatured Event of Default and (B) all representations and warranties
made by such entities contained in this Agreement and the other Loan Documents
are true and correct in all material respects as of the date of such Officer's
Certificate except to the extent they relate to a specific date; and
(d) on or before the Initial Maturity Date, Agent shall
have received, on behalf of Agent and Lenders, an extension fee in the amount of
one-fourth of one percent (0.25%) of the amount of the Facility.
ARTICLE IV.
CONDITIONS TO LOANS
4.01 Intentionally Omitted.
4.02 Conditions Precedent to All Loans and Issuance of
Letters of Credit. The obligation of each Swingline Lender to make any Swingline
Loan requested to be made by it, the obligation of Lender to make any Loan
requested to be made by it, and the obligation of Issuing Lender to issue any
Letter of Credit requested to be issued by it, on any date, is subject to
satisfaction of the following conditions precedent as of such date:
(a) Documents. With respect to a request for a Loan,
Agent shall have received in accordance with the provisions of Section 2.01(b)
hereof or Section 2.10 hereof (as applicable), an original and duly executed
Notice of Borrowing. With respect to a request for a Letter of Credit, Agent and
Issuing Bank shall have received in accordance with the provisions of Section
2.09(b) hereof, an original and duly executed Letter of Credit Application
together with such other documents as shall be required under Section 2.09(b)
hereof.
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(b) Additional Matters. As of the Funding Date for any
Loan or the issuance date of any Letter of Credit and after giving effect to the
Loans and/or Letters of Credit being requested:
(i) Representations and Warranties. All of the
representations and warranties of Borrower and the REIT contained in
this Agreement and in any other Loan Document (other than
representations and warranties which expressly speak only as of a
different date) shall be true and correct in all material respects on
and as of such Funding Date or issuance date, as though made on and as
of such date;
(ii) No Default. No Event of Default or Unmatured Event of
Default shall have occurred and be continuing or would result from the
making of the requested Loan or issuance for the requested Letter of
Credit and all of the financial covenants contained in Articles VIII
and IX shall be satisfied; and
(iii) No Material Adverse Change. No change shall have
occurred which shall have a Material Adverse Effect.
Each submission by Borrower to Agent of a Notice of Borrowing with respect to a
Loan or a request for a Letter of Credit and the acceptance by Borrower of the
proceeds of each such Loan made hereunder or the issuance of such Letter of
Credit hereunder shall constitute a representation and warranty by Borrower as
of the Funding Date in respect of such Loan or the date such Letter of Credit is
issued that all the conditions contained in this Section 4.02 have been
satisfied.
ARTICLE V.
REPRESENTATIONS AND WARRANTIES
5.01 Representations and Warranties as to Borrower.
Borrower hereby represents and warrants to Agent, Swingline Lender, Issuing
Lender and Lenders as follows:
(a) Organization; Partnership Powers. Borrower (i) is a
limited partnership duly organized, validly existing and in good standing under
the laws of the jurisdiction of its formation, (ii) is duly qualified to do
business as a foreign limited partnership and in good standing under the laws of
each jurisdiction in which the nature of its business requires it to be so
qualified, except for those jurisdictions where failure to so qualify and be in
good standing would not have a Material Adverse Effect and (iii) has all
requisite partnership power and authority to own, operate and encumber its
property and assets and to conduct its business as presently conducted and as
proposed to be conducted in connection with and following the consummation of
the transactions contemplated by the Loan Documents.
(b) Authority. Borrower has the requisite partnership
power and authority to execute, deliver and perform each of the Loan Documents
to which it is or will be a party. The execution, delivery and performance
thereof, and the consummation of the transactions contemplated thereby, have
been duly approved by the general partner of Borrower, and no other partnership
proceedings or authorizations on the part of Borrower or its general or limited
partners are necessary to consummate such transactions. Each of the Loan
Documents to which Borrower is a party has been duly executed and delivered by
Borrower and constitutes its legal, valid and binding obligation, enforceable
against it in accordance with its terms, subject to
42
bankruptcy, insolvency and other laws affecting creditors' rights generally and
general equitable principles.
(c) Ownership of Borrower. Schedule 5.01(c) sets forth
the general partners of Borrower and their respective ownership percentages as
of the date hereof. Except as set forth in the partnership agreement of
Borrower, no partnership interests (or any securities, instruments, warrants,
option or purchase rights, conversion or exchange rights, calls, commitments or
claims of any character convertible into or exercisable for partnership
interests) of Borrower are subject to issuance under any security, instrument,
warrant, option or purchase rights, conversion or exchange rights, call,
commitment or claim of any right, title or interest therein or thereto. To
Borrower's knowledge, all of the partnership interests in Borrower have been
issued in compliance with all applicable Requirements of Law.
(d) No Conflict. The execution, delivery and performance
by Borrower of the Loan Documents to which it is or will be a party, and each of
the transactions contemplated thereby, do not and will not (i) conflict with or
violate Borrower's limited partnership agreement or Certificate of Limited
Partnership or other organizational documents, as the case may be, or the
organizational documents of any Subsidiary of Borrower or (ii) conflict with,
result in a breach of or constitute (with or without notice or lapse of time or
both) a default under any Requirement of Law, Contractual Obligation or Court
Order of or binding upon Borrower or any of its Subsidiaries, or require
termination of any such Contractual Obligation, the consequences of which
conflict or breach or default or termination would have a Material Adverse
Effect, or result in or require the creation or imposition of any Lien
whatsoever upon any Property (except as contemplated herein).
(e) Consents and Authorizations. Borrower has obtained
all consents and authorizations required pursuant to its Contractual Obligations
with any other Person, the failure of which to obtain would have a Material
Adverse Effect, and has obtained all consents and authorizations of, and
effected all notices to and filings with, any Governmental Authority necessary
to allow Borrower to lawfully execute, deliver and perform its obligations under
the Loan Documents to which Borrower is a party.
(f) Governmental Regulation. Borrower is not subject to
regulation under the Public Utility Holding Company Act of 1935, the Federal
Power Act, the Interstate Commerce Act, the Investment Company Act of 1940 or
any other federal or state statute or regulation such that its ability to incur
indebtedness is limited or its ability to consummate the transactions
contemplated by the Loan Documents is materially impaired.
(g) Prior Financials. The Consolidated and Combined
Balance Sheet as of September 30, 2003, the Consolidated and Combined Statement
of Operations for the Quarter Ended September 30, 2003, and the Consolidated and
Combined Statement of Cash Flows for the Quarter Ended September 30, 2003 of the
REIT contained in the Form 10-Q Quarterly Report of the REIT as of September 30,
2003 (the "Pre-Closing Financials") delivered to Agent prior to the date hereof
were prepared in accordance with GAAP in effect on the date such Pre-Closing
Financials were prepared and fairly present the assets, liabilities and
financial condition of the REIT, on a consolidated basis, at such date and the
results of its operations and its cash flows, on a consolidated basis, for the
period then ended.
43
(h) Financial Statements; Projections and Forecasts. Each
of the Financial Statements to be delivered to Agent pursuant to Sections
6.01(a) and (b), (i) has been, or will be, as applicable, prepared in accordance
with the books and records of the REIT, on a consolidated basis, and (ii) either
fairly present, or will fairly present, as applicable, the financial condition
of the REIT, on a consolidated basis, at the dates thereof (and, if applicable,
subject to normal year-end adjustments) and the results of its operations and
cash flows, on a consolidated basis, for the period then ended. Each of the
projections delivered to Agent (A) has been, or will be, as applicable, prepared
by the REIT and the REIT's financial personnel in light of the past business and
performance of the REIT, on a consolidated basis and (B) represent, or will
represent, as of the date thereof, the reasonable good faith estimates of such
personnel.
(i) Litigation; Adverse Effects.
(i) There is no action, suit, proceeding, governmental
investigation or arbitration, at law or in equity, or before or by any
Governmental Authority, pending, or to the best of Borrower's
knowledge, threatened against Borrower or any of its Subsidiaries or
any of their respective Properties, in which there is a reasonable
possibility of an adverse decision that could have a Material Adverse
Effect; and
(ii) Neither Borrower nor any of its Subsidiaries is (A)
in violation of any Requirement of Law, which violation has a Material
Adverse Effect, or (B) subject to or in default with respect to any
Court Order which has a Material Adverse Effect.
(j) No Material Adverse Change. Since September 30, 2003,
there has occurred no event which has a Material Adverse Effect.
(k) Payment of Taxes. All tax returns and reports to be
filed by Borrower or any of its Subsidiaries have been timely filed, and all
taxes, assessments, fees and other governmental charges shown on such returns
have been paid when due and payable, except such taxes, if any, as are reserved
against in accordance with GAAP, such taxes as are being contested in good faith
by appropriate proceedings or such taxes, the failure to make payment of which
when due and payable will not have, in the aggregate, a Material Adverse Effect.
Borrower has no knowledge of any proposed tax assessment against Borrower or any
of its Subsidiaries that will have a Material Adverse Effect, which is not being
actively contested in good faith by such Person.
(l) Material Adverse Agreements. Neither Borrower nor any
of its Subsidiaries is a party to or subject to any Contractual Obligation or
other restriction contained in its partnership agreement, certificate of
partnership, by-laws, or similar governing documents which has a Material
Adverse Effect.
(m) Performance. Neither Borrower nor any of its
Subsidiaries is in default in the performance, observance or fulfillment of any
of the obligations, covenants or conditions contained in any Contractual
Obligation applicable to it, and no condition exists which, with the giving of
notice or the lapse of time or both, would constitute a default under such
Contractual Obligation in each case, except where the consequences, direct or
indirect, of such default or defaults, if any, will not have a Material Adverse
Effect.
44
(n) Federal Reserve Regulations. No part of the proceeds
of the Loan hereunder will be used to purchase or carry any "margin security" as
defined in Regulation U or for the purpose of reducing or retiring any
indebtedness which was originally incurred to purchase or carry any margin
security or for any other purpose which might constitute this transaction a
"purpose credit" within the meaning of said Regulation U. Borrower is not
engaged primarily in the business of extending credit for the purpose of
purchasing or carrying any "margin stock" as defined in Regulation U. Borrower
is not engaged primarily in the business of extending credit for the purpose of
purchasing or carrying any "margin stock" as defined in Regulation U. No part of
the proceeds of the Loans will be used for any purpose that violates, or which
is inconsistent with, the provisions of Regulation X or any other regulation of
the Federal Reserve Board.
(o) Disclosure. Borrower has not intentionally or
knowingly withheld any material fact from Agent in regard to any matter raised
in the Loan Documents. Notwithstanding the foregoing, with respect to any
projections of Borrower's future performance such representations and warranties
are made in good faith and to the best judgment of Borrower at the time such
projections were made.
(p) Requirements of Law. To Borrower's knowledge,
Borrower and each of its Subsidiaries are in compliance with all Requirements of
Law (including without limitation the Securities Act and the Securities Exchange
Act, and the applicable rules and regulations thereunder, state securities law
and "Blue Sky" laws) applicable to them and their respective businesses, in each
case, where the failure to so comply will have a Material Adverse Effect.
(q) Patents, Trademarks, Permits, Etc. Borrower and each
of its Subsidiaries owns, is licensed or otherwise has the lawful right to use,
or has all permits and other governmental approvals, patents, trademarks, trade
names, copyrights, technology, know-how and processes used in or necessary for
the conduct of Borrower's or such Subsidiary's business as currently conducted,
the absence of which would have a Material Adverse Effect. To Borrower's
knowledge, the use of such permits and other governmental approvals, patents,
trademarks, trade names, copyrights, technology, know-how and processes by
Borrower or such Subsidiary does not infringe on the rights of any Person,
subject to such claims and infringements as do not, in the aggregate, have a
Material Adverse Effect.
(r) Environmental Matters. To the knowledge of Borrower,
except as would not have a Material Adverse Effect and except as set forth on
Schedule 5.01(r), (i) the Property and operations of Borrower and each of its
Subsidiaries comply in all material respects with all applicable Environmental
Laws; (ii) none of the Property or operations of Borrower or any of its
Subsidiaries are subject to any Remedial Action or other Liabilities and Costs
arising from the Release or threatened Release of a Contaminant into the
environment or from the violation of any Environmental Laws, which Remedial
Action or other Liabilities and Costs would have a Material Adverse Effect;
(iii) neither Borrower nor any of its Subsidiaries has filed any notice under
applicable Environmental Laws reporting a Release of a Contaminant into the
environment in violation of any Environmental Laws, except as the same may have
been heretofore remedied; (iv) there is not now, nor to Borrower's knowledge has
there ever been, on or in the Property of Borrower or any of its Subsidiaries
(except in compliance in all material respects with all applicable Environmental
Laws): (A) any underground storage tanks, (B) any asbestos-containing material,
(C) any polychlorinated biphenyls (PCB's) used in hydraulic oils,
45
electrical transformers or other equipment, (D) any petroleum hydrocarbons or
(E) any chlorinated or halogenated solvents; and (v) neither Borrower nor any of
its Subsidiaries has received any notice or claim to the effect that it is or
may be liable to any Person as a result of the Release or threatened Release of
a Contaminant into the environment.
(s) ERISA. None of the REIT, Borrower or any Agreement
Party is an "employee pension benefit plan" as defined in Section 3(2) of ERISA,
an "employee welfare benefit plan" as defined in Section 3(1) of ERISA, a
"multiemployer plan" as defined in Sections 4001(a)(3) or 3(37) of ERISA or a
"plan" as defined in Section 4975(e)(1) of the Internal Revenue Code. Except for
a prohibited transaction arising solely because of a Lender's breach of the
covenant set forth in Section 11.23, none of the Obligations, any of the Loan
Documents or the exercise of any of the Agent's or Lenders' rights in connection
therewith constitutes a prohibited transaction under ERISA or the Internal
Revenue Code (which is not exempt from the restrictions of Section 406 of ERISA
and the taxes and penalties imposed by Section 4975 of the Internal Revenue Code
and Section 502(i) of ERISA) or otherwise results in a Lender, the Agent or the
Lenders being deemed in violation of Sections 404 or 406 of ERISA or Section
4975 of the Internal Revenue Code or will by itself result in a Lender, Agent or
the Lenders being a fiduciary or party in interest under ERISA or a
"disqualified person" as defined in Section 4975(e)(2) of the Internal Revenue
Code with respect to an "employee benefit plan" within the meaning of Section
3(3) of ERISA or a "plan" within the meaning of Section 4975(e)(1) of the
Internal Revenue Code. No assets of the REIT, Borrower or any Agreement Party
constitute "assets" (within the meaning of 29 C.F.R. Section 2510.3-101 or any
successor regulation thereto) of an "employee benefit plan" within the meaning
of Section 3(3) of ERISA or a "plan" within the meaning of Section 4975(e)(1) of
the Internal Revenue Code.
Each Borrower Plan is in compliance with ERISA and the
applicable provisions of the Internal Revenue Code in all respects except where
the failure to comply would not have a Material Adverse Effect. There are no
claims (other than claims for benefits in the normal course), actions or
lawsuits asserted or instituted against, and none of Borrower, the REIT, any of
the Subsidiaries or any of their ERISA Affiliates has knowledge of any
threatened litigation or claims against the assets of any Borrower Plan or
against any fiduciary of such Borrower Plan with respect to the operation of
such Borrower Plan which could have a Material Adverse Effect. No liability to
the PBGC has been, or is likely to be, incurred by Borrower, the REIT, any of
the Subsidiaries or their ERISA Affiliates other than such liabilities which, in
the aggregate, would not have a Material Adverse Effect. None of Borrower, the
REIT, any of the Subsidiaries or any of their ERISA Affiliates is now
contributing to or has ever contributed to or been obligated to contribute to
any Multiemployer Plan, no employees or former employees of Borrower, the REIT,
any of the Subsidiaries or any of their ERISA Affiliates have been covered by
any Multiemployer Plan in respect of their employment by Borrower or such
Subsidiary or such ERISA Affiliate. None of Borrower, the REIT, any of the
Subsidiaries or any of their ERISA Affiliates has engaged in a "prohibited
transaction," as such term is defined in Section 4975 of the Internal Revenue
Code or in a transaction subject to the prohibitions of Section 406 of ERISA, in
connection with any Benefit Plan or Welfare Plan which would subject Borrower,
the REIT, any of the Subsidiaries or any of their ERISA Affiliates (after giving
effect to any exemption) to the tax or penalty on prohibited transactions
imposed by Section 4975 of the Internal Revenue Code, Section 502 of ERISA or
any other liability under ERISA which tax, penalty or other liability would have
a Material Adverse Effect. None of the Benefit Plans subject to Title IV of
ERISA has any material Unfunded Pension Liability as to which Borrower,
46
the REIT, any of the Subsidiaries or any of their ERISA Affiliates is or may be
liable, which liability would have a Material Adverse Effect.
(t) Solvency. Borrower is and will be Solvent after
giving effect to the disbursements of the Loans and the payment and accrual of
all fees then payable hereunder.
(u) Title to Assets; No Liens. Borrower has good,
indefeasible and merchantable title to the Property owned or leased by it, and
all such Property is free and clear of all Liens, except Permitted Liens and
Liens permitted by Section 8.01(b).
(v) Use of Proceeds. Borrower's use of the proceeds of
the Loans are, and will continue to be, legal and proper uses (and to the extent
necessary, duly authorized by Borrower's partners) and such uses are consistent
with all applicable laws and statutes and Section 7.01(i).
(w) Subsidiaries and Investment Affiliates. Each
Subsidiary and Investment Affiliate as of the date hereof is set forth on
Schedule 5.01(w). Schedule 5.01(w) sets forth the ownership of each such
Subsidiary and Investment Affiliate and the material Property owned by such
Person as of the date hereof.
(x) Tax Shelter Representation. Neither Borrower, the
REIT nor any Affiliate of either of the foregoing intends to treat the Loans or
the transactions contemplated by this Agreement and the other Loan Documents as
being a "reportable transaction" (within the meaning of Treasury Regulation
Section 1.6011-4). If Borrower, or any other party to the Loans determines to
take any action inconsistent with such intention, Borrower will promptly notify
Lenders thereof. If Borrower so notifies Lenders, Borrower acknowledges that
Lenders may treat the Loans as part of a transaction that is subject to Treasury
Regulation Section 301.6112-1, and Lenders will maintain the lists and other
records, including the identity of the applicable party to the Loans as required
by such Treasury Regulation.
5.02 Representations and Warranties as to the REIT. The
REIT hereby represents and warrants to Agent, Swingline Lender, Issuing Lender
and Lenders as follows:
(a) Organization; Corporate Powers. The REIT (i) is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Maryland, (ii) is duly qualified to do business as a foreign
corporation and in good standing under the laws of each jurisdiction in which
the nature of its business requires it to be so qualified, except for those
jurisdictions where failure to so qualify and be in good standing would not have
a Material Adverse Effect, and (iii) has all requisite corporate power and
authority to own, operate and encumber its property and assets and to conduct
its business as presently conducted and as proposed to be conducted in
connection with and following the consummation of the transactions contemplated
by the Loan Documents.
(b) Authority. The REIT has the requisite corporate power
and authority to execute, deliver and perform each of the Loan Documents to
which it is or will be a party. The execution, delivery and performance thereof,
and the consummation of the transactions contemplated thereby, have been duly
approved by the Board of Directors of the REIT, and no other corporate
proceedings on the part of the REIT are necessary to consummate such
transactions. Each of the Loan Documents to which the REIT is a party has been
duly executed
47
and delivered by the REIT and constitutes its legal, valid and binding
obligation, enforceable against it in accordance with its terms, subject to
bankruptcy, insolvency and other laws affecting creditors' rights generally and
general equitable principles.
(c) No Conflict. The execution, delivery and performance
by the REIT of the Loan Documents to which it is a party, and each of the
transactions contemplated thereby, do not and will not (i) conflict with or
violate its Articles or Certificate of Incorporation or by-laws, or other
organizational documents, as the case may be, or the organizational documents of
Borrower or any Subsidiary, (ii) conflict with, result in a breach of or
constitute (with or without notice or lapse of time or both) a default under any
Requirement of Law, Contractual Obligation or Court Order of the REIT, Borrower
or any Subsidiary, or require termination of any such Contractual Obligation,
the consequences of which conflict or breach or default or termination will have
a Material Adverse Effect, or result in or require the creation or imposition of
any Lien whatsoever upon any of its Property, or (iii) require any approval of
the stockholders of the REIT.
(d) Consents and Authorizations. The REIT has obtained
all consents and authorizations required pursuant to its Contractual Obligations
with any other Person, the failure of which to obtain would have a Material
Adverse Effect, and has obtained all consents and authorizations of, and
effected all notices to and filings with, any Governmental Authority necessary
to allow the REIT to lawfully execute, deliver and perform its obligations under
the Loan Documents to which the REIT is a party.
(e) Governmental Regulation. The REIT is not subject to
regulation under the Public Utility Holding Company Act of 1935, the Federal
Power Act, the Interstate Commerce Act, the Investment Company Act of 1940 or
any other federal or state statute or regulation such that its ability to incur
indebtedness is limited or its ability to consummate the transactions
contemplated by the Loan Documents is materially impaired.
(f) Capitalization. To the REIT's knowledge, all of the
capital stock of the REIT has been issued in compliance with all applicable
Requirements of Law.
(g) Litigation; Adverse Effects.
(i) There is no action, suit, proceeding, governmental
investigation or arbitration, at law or in equity, or before or by any
Governmental Authority, pending, or to best of the REIT's knowledge,
threatened against the REIT, any of its Subsidiaries or any of their
respective Properties in which there is a reasonable possibility of an
adverse decision that could have a Material Adverse Effect; and
(ii) Neither the REIT nor any of its Subsidiaries is (A)
in violation of any applicable Requirement of Law, which violation has
a Material Adverse Effect, or (B) subject to or in default with respect
to any Court Order which has a Material Adverse Effect.
(h) Payment of Taxes. All tax returns and reports to be
filed by the REIT or any of its Subsidiaries have been timely filed, and all
taxes, assessments, fees and other governmental charges shown on such returns
have been paid when due and payable, except such taxes, if any, as are reserved
against in accordance with GAAP, such taxes as are being contested
48
in good faith by appropriate proceedings or such taxes, the failure to make
payment of which when due and payable would not have, in the aggregate, a
Material Adverse Effect. The REIT has no knowledge of any proposed tax
assessment against the REIT or any of its Subsidiaries that would have a
Material Adverse Effect, which is not being actively contested in good faith by
the REIT or such Subsidiary.
(i) Material Adverse Agreements. The REIT is not a party
to or subject to any Contractual Obligation or other restriction contained in
its charter, by-laws, or similar governing documents which has a Material
Adverse Effect.
(j) Performance. Neither the REIT nor any of its
Subsidiaries is in default in the performance, observance or fulfillment of any
of the obligations, covenants or conditions contained in any Contractual
Obligation applicable to it, and no condition exists which, with the giving of
notice or the lapse of time or both, would constitute a default under such
Contractual Obligation in each case, except where the consequences, direct or
indirect, of such default or defaults, if any, would not have a Material Adverse
Effect.
(k) Securities Activities. The REIT is not engaged
principally in the business of extending credit for the purpose of purchasing or
carrying any "margin stock" (as defined in Regulation U).
(l) Disclosure. The REIT has not intentionally or
knowingly withheld any material fact from Agent in regard to any matter raised
in the Loan Documents. Notwithstanding the foregoing, with respect to any
projections of the REIT's future performance such representations and warranties
are made in good faith and to the best judgment of the management of the REIT at
the time such projections were made.
(m) Requirements of Law. To the REIT's knowledge, the
REIT and each of its Subsidiaries are in compliance with all Requirements of Law
(including without limitation the Securities Act and the Securities Exchange
Act, and the applicable rules and regulations thereunder, state securities law
and "Blue Sky" laws) applicable to them and their respective businesses, in each
case, where the failure to so comply would have a Material Adverse Effect. After
giving effect to all filings made simultaneously with the Closing Date, the REIT
has made all filings with and obtained all consents of the Commission required
under the Securities Act and the Securities Exchange Act in connection with the
execution, delivery and performance by the REIT of the Loan Documents to which
it is a party.
(n) Patents, Trademarks, Permits, Etc. The REIT and each
of its Subsidiaries owns, is licensed or otherwise has the lawful right to use,
or has all permits and other governmental approvals, patents, trademarks, trade
names, copyrights, technology, know-how and processes used in or necessary for
the conduct of the REIT's or such Subsidiary's business as currently conducted,
the absence of which would have a Material Adverse Effect. To the REIT's
knowledge, the use of such permits and other governmental approvals, patents,
trademarks, trade names, copyrights, technology, know-how and processes by the
REIT or such Subsidiary does not infringe on the rights of any Person, subject
to such claims and infringements as do not, in the aggregate, have a Material
Adverse Effect.
49
(o) Environmental Matters. To the knowledge of the REIT,
except as would not have a Material Adverse Effect and except as set forth on
Schedule 5.01(r), (i) the Property and operations of the REIT and each of its
Subsidiaries comply in all material respects with all applicable Environmental
Laws; (ii) none of the Property or operations of the REIT or any of its
Subsidiaries are subject to any Remedial Action or other Liabilities and Costs
arising from the Release or threatened Release of a Contaminant into the
environment or from the violation of any Environmental Laws, which Remedial
Action or other Liabilities and Costs would have a Material Adverse Effect;
(iii) neither the REIT nor any of its Subsidiaries has filed any notice under
applicable Environmental Laws reporting a Release of a Contaminant into the
environment in violation of any Environmental Laws, except as the same may have
been heretofore remedied; (iv) there is not now, nor to the REIT's knowledge has
there ever been, on or in the Property of the REIT or any of its Subsidiaries
(except in compliance in all material respects with all applicable Environmental
Laws): (A) any underground storage tanks, (B) any asbestos-containing material,
(C) any polychlorinated biphenyls (PCB's) used in hydraulic oils, electrical
transformers or other equipment, (D) any petroleum hydrocarbons or (E) any
chlorinated or halogenated solvents; and (v) neither the REIT nor any of its
Subsidiaries has received any notice or claim to the effect that it is or may be
liable to any Person as a result of the Release or threatened Release of a
Contaminant into the environment.
(p) Solvency. The REIT is and will be Solvent after
giving effect to the disbursement of the Loans and the payment of all fees then
payable hereunder.
(q) Status as a REIT. The REIT (i) is a real estate
investment trust as defined in Section 856 of the Internal Revenue Code (or any
successor provision thereto), (ii) has not revoked its election to be a real
estate investment trust, (iii) has not engaged in any "prohibited transactions"
as defined in Section 856(b)(6)(iii) of the Internal Revenue Code (or any
successor provision thereto), except for the transfer of manufactured home
inventory from Borrower to Realty Systems, Inc., a Delaware corporation
(provided that such transfer does not adversely affect the REIT's status as a
real estate investment trust under the Internal Revenue Code), and (iv) for its
current "tax year" (as defined in the Internal Revenue Code) is and for all
prior tax years subsequent to its election to be a real estate investment trust
has been entitled to a dividends paid deduction which meets the requirements of
Section 857 of the Internal Revenue Code.
(r) Ownership. The REIT does not own any Property or have
any interest in any Person, other than as set forth on Schedule 5.01(w).
(s) Listing. The common stock of the REIT is and will
continue to be listed for trading and traded on either the New York Stock
Exchange or American Stock Exchange.
(t) Tax Shelter Representation. Neither Borrower, the
REIT nor any Affiliate of either of the foregoing intends to treat the Loans or
the transactions contemplated by this Agreement and the other Loan Documents as
being a "reportable transaction" (within the meaning of Treasury Regulation
Section 1.6011-4). If the REIT, or any other party to the Loans determines to
take any action inconsistent with such intention, the REIT will promptly notify
Lenders thereof. If the REIT so notifies Lenders, Borrower acknowledges that
Lenders may treat the Loans as part of a transaction that is subject to Treasury
Regulation Section 301.6112-1, and
50
Lenders will maintain the lists and other records, including the identity of the
applicable party to the Loans as required by such Treasury Regulation.
ARTICLE VI.
REPORTING COVENANTS
Borrower covenants and agrees that, on and after the date
hereof, until payment in full of all of the Obligations, the expiration of the
Commitments and termination of this Agreement:
6.01 Financial Statements and Other Financial and
Operating Information. Borrower shall maintain or cause to be maintained a
system of accounting established and administered in accordance with sound
business practices and consistent with past practice to permit preparation of
quarterly and annual financial statements in conformity with GAAP. Borrower
shall deliver or cause to be delivered to Agent with copies for each Lender:
(a) Quarterly Financial Statements Certified by CFO. As
soon as practicable, and in any event within fifty (50) days after the end of
each Fiscal Quarter, except the last Fiscal Quarter of a Fiscal Year,
consolidated balance sheets, statements of income and expenses and statements of
cash flow (collectively, "Financial Statements") for the REIT, on a consolidated
basis, in the form provided to the Commission on the REIT's Form 10-Q and
certified by the REIT's chief financial officer.
(b) Annual Financial Statements. Within one hundred and
twenty (120) days after the close of each Fiscal Year, annual Financial
Statements of the REIT, on a consolidated basis (in the form provided to the
Commission on the REIT's Form 10K), audited and certified without qualification
by the Accountants.
(c) Officer's Certificate of REIT. (i) Together with each
delivery of any Financial Statement pursuant to clauses (a) and (b) above, an
Officer's Certificate of the REIT, stating that (A) the executive officer who is
the signatory thereto, which officer shall be the chief executive officer or the
chief financial officer of the REIT, has reviewed, or caused under his
supervision to be reviewed, the terms of this Agreement and the other Loan
Documents, and has made, or caused to be made under his supervision, a review in
reasonable detail of the transactions and condition of Borrower, the REIT, the
Subsidiaries, and the Agreement Parties, during the accounting period covered by
such Financial Statements, and that such review has not disclosed the existence
during or at the end of such accounting period, and that the signer does not
have knowledge of the existence as of the date of the Officer's Certificate, of
any condition or event which constitutes an Event of Default or Unmatured Event
of Default, or, if any such condition or event existed or exists, specifying the
nature and period of existence thereof and what action has been taken, is being
taken and is proposed to be taken with respect thereto and (B) such Financial
Statements have been prepared in accordance with the books and records of the
REIT, on a consolidated basis, and fairly present the financial condition of the
REIT, on a consolidated basis, at the date thereof (and, if applicable, subject
to normal year-end adjustments) and the results of operations and cash flows, on
a consolidated basis, for the period then ended; and (ii) together with each
delivery pursuant to clauses (a) and (b) above, a compliance certificate
demonstrating, in reasonable detail (which detail shall include actual
51
calculations), compliance during and at the end of such accounting periods with
the financial covenants contained in Sections 8.01(a), 8.01(d) and 8.02(a) and
Article IX.
(d) Knowledge of Event of Default. Promptly upon Borrower
obtaining knowledge (i) of any condition or event which constitutes an Event of
Default or Unmatured Event of Default, or (ii) of any condition or event which
has a Material Adverse Effect, an Officer's Certificate of the REIT specifying
the nature and period of existence of any such condition or event and the nature
of such claimed Event of Default, Unmatured Event of Default, event or
condition, and what action Borrower, the REIT or the Agreement Party, as the
case may be, has taken, is taking and proposes to take with respect thereto.
(e) Litigation, Arbitration or Government Investigation.
Promptly upon Borrower obtaining knowledge of (i) the institution of, or threat
of, any material action, suit, proceeding, governmental investigation or
arbitration against or affecting Borrower, any Agreement Party, the REIT, any
Subsidiary or any of their Property not previously disclosed in writing by
Borrower to Agent pursuant to this Section 6.01(f), or (ii) any material
development in any action, suit, proceeding, governmental investigation or
arbitration already disclosed, in which, in either case, there is a reasonable
possibility of an adverse decision that could have a Material Adverse Effect, a
notice thereof to Agent and such other information as may be reasonably
available to it to enable Agent and its counsel to evaluate such matters.
(f) Failure of the REIT to Qualify as Real Estate
Investment Trust. Promptly upon, and in any event within forty- eight (48) hours
after Borrower first has knowledge of (i) the REIT failing to continue to
qualify as a real estate investment trust as defined in Section 856 of the
Internal Revenue Code (or any successor provision thereof), (ii) any act by the
REIT causing its election to be taxed as a real estate investment trust to be
terminated, (iii) any act causing the REIT to be subject to the taxes imposed by
Section 857(b)(6) of the Internal Revenue Code (or any successor provision
thereto), (iv) the REIT failing to be entitled to a dividends paid deduction
which meets the requirements of Section 857 of the Internal Revenue Code, or (v)
any challenge by the IRS to the REIT's status as a real estate investment trust,
a notice of any such occurrence or circumstance.
(g) Management Reports. Upon and after the occurrence of
an Event of Default, copies of any management reports prepared by the
Accountants as soon as available.
(h) Property Changes. Notice of any material acquisition,
disposition, merger, or purchase by the REIT, Borrower, any Subsidiary or any
Agreement Party no later than ten (10) days after the consummation thereof,
specifying the nature of the transaction in reasonable detail.
(i) Other Information. Such other information, reports,
contracts, schedules, lists, documents, agreements and instruments in the
possession of the REIT, Borrower, any Subsidiary, or any Agreement Party with
respect to the business, financial condition, operations, performance, or
properties of Borrower, the REIT, any Subsidiary, or any Agreement Party, as
Agent may, from time to time, reasonably request, including without limitation,
annual information with respect to cash flow projections, budgets, operating
statements (current year and immediately preceding year), rent rolls, lease
expiration reports, leasing status reports, note payable summaries, bullet note
summaries, equity funding requirements, contingent liability
52
summaries, line of credit summaries, line of credit collateral summaries, wrap
note or note receivable summaries, schedules of outstanding letters of credit,
summaries of cash and Cash Equivalents, projections of management and leasing
fees and overhead budgets, each in the form customarily prepared by the REIT or
Borrower. If Borrower fails to provide Agent with information requested from
Borrower within the time periods provided for herein, or if no time periods are
provided for, within ten (10) Business Days after Agent requests such
information, and provided that Agent gives Borrower reasonable prior notice and
an opportunity to participate, Borrower hereby authorizes Agent to communicate
with the Accountants and authorizes the Accountants to disclose to Agent any and
all financial statements and other information of any kind, including copies of
any management letter or the substance of any oral information, that such
Accountants may have with respect to the financial condition, operations,
properties, performance and prospects of Borrower, the REIT, any Subsidiary, or
any Agreement Party. Concurrently therewith, Agent will notify Borrower of any
such communication. At Agent's request, Borrower shall deliver a letter
addressed to the Accountants instructing them to disclose such information in
compliance with this Section 6.01(s).
6.02 Press Releases; SEC Filings and Financial Statements.
The REIT and Borrower will deliver to the Agent as soon as practicable after
public release all press releases concerning the REIT or Borrower. The REIT and
Borrower will deliver to Agent as soon as practicable after filing with the
Commission, all reports and notices, proxy statements, registration statements
and prospectuses. All materials sent or made available generally by the REIT to
the holders of its publicly-held Securities or to a trustee under any indenture
or filed with the Commission, including all periodic reports required to be
filed with the Commission, will be delivered to Agent as soon as available.
6.03 Environmental Notices. Except for events or
occurrences that will not result in a Material Adverse Effect, Borrower shall
notify Agent, in writing, as soon as practicable, and in any event within ten
(10) days after Borrower's learning thereof, of any: (a) written notice or claim
to the effect that Borrower, any Agreement Party, the REIT, or any Subsidiary is
or may be liable to any Person as a result of the Release or threatened Release
of any Contaminant into the environment; (b) written notice that Borrower, any
Agreement Party, the REIT, or any Subsidiary is subject to investigation by any
Governmental Authority evaluating whether any Remedial Action is needed to
respond to the Release or threatened Release of any Contaminant into the
environment; (c) written notice that any Property of Borrower, any Agreement
Party, the REIT, or any Subsidiary is subject to an Environmental Lien; (d)
written notice of violation to Borrower, any Agreement Party, the REIT, or any
REIT Subsidiary or awareness of a condition which might reasonably result in a
notice of violation of any Environmental Laws by Borrower, the REIT, any REIT
Subsidiary or any Agreement Party; (e) commencement or written threat of any
judicial or administrative proceeding alleging a violation by Borrower, the
REIT, any Subsidiary or any Agreement Party of any Environmental Laws; or (f)
written notice received directly from a Governmental Authority of any changes to
any existing Environmental Laws.
6.04 Qualifying Unencumbered Properties. Borrower may from
time to time but no more frequently than quarterly deliver notice to the Agent
stating that Borrower intends to designate a Property to become a Qualifying
Unencumbered Property. Such notice shall (i) set forth the name of such Property
(or, if such Property has no name, such notice shall otherwise identify such
Property), and (ii) be accompanied by a statement of income, certified by the
chief
53
financial officer of the REIT, for each such Property for the then most recently
completed Fiscal Quarter (or, if such statement of income is unavailable, a pro
forma financial statement setting forth the Net Operating Income with respect to
such Property for the then current Fiscal Quarter). If any such Property meets
the requirements set forth in the definition of "Qualifying Unencumbered
Properties" and the Agent fails to deliver written notice to Borrower stating
that the Requisite Lenders have disapproved the designation of such Property as
a Qualifying Unencumbered Property (it being understood that such notice shall
provide Borrower with information regarding why such designation was disapproved
by the Requisite Lenders and that the Requisite Lenders will not unreasonably
disapprove such designation) within twenty (20) days after receipt of such
information by Agent, such Property shall become a Qualifying Unencumbered
Property.
ARTICLE VII.
AFFIRMATIVE COVENANTS
Borrower covenants and agrees that, on and after the date
hereof, until payment in full of all of the Obligations, the expiration of the
Commitments and termination of this Agreement:
7.01 With respect to Borrower:
(a) Existence. Borrower shall, and shall cause each of
its Subsidiaries to, at all times maintain its and their respective partnership,
limited liability company, trust or corporate existence, as applicable, and
preserve and keep in full force and effect its and their respective rights and
franchises unless the failure to maintain such rights and franchises does not
have a Material Adverse Effect. Borrower shall maintain its status as a limited
partnership.
(b) Qualification. Borrower shall, and shall cause each
of its Subsidiaries to, qualify and remain qualified to do business in each
jurisdiction in which the nature of its and their businesses require them to be
so qualified except for those jurisdictions where failure to so qualify does not
have a Material Adverse Effect.
(c) Compliance with Laws, Etc. Borrower shall, and shall
cause each of its Subsidiaries to, (i) comply with all Requirements of Law and
Contractual Obligations, and all restrictive covenants affecting Borrower and
its Subsidiaries or their respective properties, performance, assets or
operations, and (ii) obtain as needed all Permits necessary for its and their
respective operations and maintain such in good standing, except in each of the
foregoing cases where the failure to do so will not have a Material Adverse
Effect or expose Agent or Lenders to any material liability therefor.
(d) Payment of Taxes and Claims. (a) Borrower shall, and
shall cause each of its Subsidiaries to, pay (i) all taxes, assessments and
other governmental charges imposed upon it or them or on any of its or their
respective properties or assets or in respect of any of its or their respective
franchises, business, income or property before any penalty or interest accrues
thereon, the failure to make payment of which in such time periods would have a
Material Adverse Effect, and (ii) all claims (including, without limitation,
claims for labor, services, materials and supplies) which have become due and
payable and which by law have or may become a Lien (other than a Permitted Lien)
upon any of its or their respective properties or
54
assets, prior to the time when any penalty or fine shall be incurred with
respect thereto, the failure to make payment of which would have a Material
Adverse Effect; provided, however, that no such taxes, assessments, and
governmental charges referred to in clause (i) above or claims referred to in
clause (ii) above need be paid if being contested in good faith by appropriate
proceedings promptly instituted and diligently conducted and if adequate
reserves shall have been set aside therefor in accordance with GAAP.
(e) Maintenance of Properties; Insurance. Borrower shall,
and shall cause each of its Subsidiaries to, maintain in good repair, working
order and condition, excepting ordinary wear and tear, all of its and their
respective Property (personal and real) and will make or cause to be made all
appropriate repairs, renewals and replacements thereof, in each case where the
failure to so maintain, repair, renew or replace would have a Material Adverse
Effect. Borrower shall, and shall cause each of its Subsidiaries to, maintain
with insurance companies that have a Best Rating of "A- VII" or higher or other
insurance companies reasonably acceptable to Agent that have similar financial
resources and stability, which companies shall be qualified to do business in
the states where such Property is located, the insurance policies and programs
reasonably acceptable to Agent insuring all property and assets material to the
operations of Borrower and each of its Subsidiaries against loss or damage by
fire, theft, burglary, pilferage and loss in transit and business interruption,
together with such other hazards as is reasonably consistent with prudent
industry practice, and maintain liability insurance consistent with prudent
industry practice with financially sound insurance companies qualified to do
business in the states where such Property is located. The insurance policies
shall provide that they cannot be terminated or materially modified unless Agent
receives thirty (30) days prior written notice of said termination or
modification. At Agent's reasonable request, Borrower shall furnish evidence of
replacement costs, without cost to Agent, such as are regularly and ordinarily
made by insurance companies to determine the then replacement cost of the
improvements on any Property of Borrower or any of its Subsidiaries. In the
event Borrower fails to cause insurance to be carried as aforesaid, Agent shall
have the right (but not the obligation), with the consent of Requisite Lenders,
to place and maintain insurance required to be maintained hereunder and treat
the amounts expended therefor as additional Obligations, payable on demand;
provided however, that Agent shall give Borrower five (5) days' prior notice of
Agent's intent to place or maintain such insurance during which time Borrower
shall have the opportunity to obtain such insurance. All of the insurance
policies required hereunder shall be in form and substance reasonably
satisfactory to Agent. Agent hereby agrees that Borrower may use blanket
policies to satisfy the requirements of this Section 7.01(e), approves the
issuer, form and content of all insurance policies currently carried by Borrower
and agrees that such insurance satisfies the requirements of this Section
7.01(e). Furthermore, Agent agrees that it will not be unreasonable in
exercising any right hereunder to require Borrower to modify, alter or
supplement its insurance policies or coverage or in exercising any right it may
have hereunder to approve any changes Borrower may hereafter make with respect
to its insurance.
(f) Inspection of Property; Books and Records. Borrower
shall permit and shall cause each of the REIT, each Subsidiary, and each
Agreement Party to, upon reasonable prior notice by Agent to Borrower, permit
any authorized representative(s) designated by Agent to visit and inspect any of
its properties including inspection of financial and accounting records and
leases, and to make copies and take extracts therefrom, all at such times during
normal business hours and as often as Agent may reasonably request. In
connection therewith, Borrower shall pay all reasonable expenses of the types
described in Section 12.01. Borrower shall keep,
55
and shall cause each of, the REIT, each Subsidiary and each Agreement Party to
keep proper books of record and account in conformity with GAAP, as modified and
as otherwise required by this Agreement and applicable Requirements of Law.
(g) Maintenance of Licenses, Permits, Etc. Borrower
shall, and shall cause each of its Subsidiaries to, maintain in full force and
effect all licenses, permits, governmental approvals, franchises, patents,
trademarks, trade names, copyrights, authorizations or other rights necessary
for the operation of their respective businesses, except where the failure to
obtain any of the foregoing would not have a Material Adverse Effect; and notify
Agent in writing, promptly after learning thereof, of the suspension,
cancellation, revocation or discontinuance of or of any pending or threatened
action or proceeding seeking to suspend, cancel, revoke or discontinue any such
material license, permit, patent, trademark, trade name, copyright, governmental
approval, franchise authorization or right, except where the suspension,
cancellation, revocation or discontinuance would not have a Material Adverse
Effect.
(h) Conduct of Business. Except for Permitted Holdings
and other investments permitted under Section 8.01(c), Borrower shall engage
only in the business of owning, operating, managing and developing manufactured
home communities, whether directly or through its Subsidiaries.
(i) Use of Proceeds. Borrower shall use the proceeds of
each Loan only for general partnership purposes in accordance with the
provisions of this Agreement. Notwithstanding anything contained in this
Agreement to the contrary, no Swingline Loan shall be used more than once for
the purpose of refinancing another Swingline Loan, in whole or part.
(j) Further Assurance. Borrower shall take and shall
cause its Subsidiaries and each Agreement Party to take all such further actions
and execute all such further documents and instruments as Agent may at any time
reasonably determine to be necessary or advisable to (i) correct any technical
defect or technical error that may be discovered in any Loan Document or in the
execution, acknowledgment or recordation thereof, and (ii) cause the execution,
delivery and performance of the Loan Documents to be duly authorized.
(k) Newco REIT. Promptly after any transfer or
contribution of any of Borrower's general partnership interests to Newco REIT,
as permitted by Section 8.01(e)(vi)(3) or Section 8.02(c)(vi)(3) of this
Agreement, Borrower shall (a) cause Newco REIT to enter into a guaranty of the
Loan Obligations in substantially the same form as the REIT Guaranty, (b)
provide to Agent copies of Newco REIT's organizational documents, certified as
true, correct and complete, and good standing certificates, (c) provide Agent
with a legal opinion, in form and substance reasonably satisfactory to Agent,
with respect to Newco REIT's authorization, execution and delivery of such
guaranty, the enforceability of such guaranty and other matters reasonably
requested by Agent and (d) provide Agent with such other certificates and
documentation relating to Newco REIT as Agent may reasonably request, including,
without limitation, incumbency certificates and resolutions authorizing the
execution and delivery of the above-referenced guaranty.
7.02 With respect to the REIT:
56
(a) Corporate Existence. The REIT shall, and shall cause
each of its Subsidiaries to, at all times maintain its and their respective
partnership or corporate existence, as applicable, and preserve and keep in full
force and effect its and their respective rights and franchises unless the
failure to maintain such rights and franchises will not have a Material Adverse
Effect.
(b) Qualification, Name. The REIT shall, and shall cause
each of its Subsidiaries to, qualify and remain qualified to do business in each
jurisdiction in which the nature of its and their businesses requires them to be
so qualified except for those jurisdictions where failure to so qualify does not
have a Material Adverse Effect. The REIT will transact business solely in its or
its Subsidiaries' own name.
(c) Securities Law Compliance. The REIT shall comply in
all material respects with all rules and regulations of the Commission and file
all reports required by the Commission relating to the REIT's publicly-held
Securities.
(d) Continued Status as a REIT; Prohibited Transactions.
The REIT (i) will continue to be a real estate investment trust as defined in
Section 856 of the Internal Revenue Code (or any successor provision thereto),
(ii) will not revoke its election to be a real estate investment trust, (iii)
will not engage in any "prohibited transactions" as defined in Section
856(b)(6)(iii) of the Internal Revenue Code (or any successor provision
thereto), and (iv) will do all acts necessary to continue to be entitled to a
dividend paid deduction meeting the requirements of Section 857 of the Internal
Revenue Code.
(e) NYSE or ASE Listed Company. The REIT shall cause its
common stock at all times to be listed for trading and be traded on the New York
Stock Exchange or American Stock Exchange.
(f) Compliance with Laws, Etc. The REIT shall, and shall
cause each of its Subsidiaries to, (i) comply with all Requirements of Law and
Contractual Obligations, and all restrictive covenants affecting the REIT and
its Subsidiaries or their respective properties, performance, prospects, assets
or operations, and (ii) obtain as needed all Permits necessary for its and their
respective operations and maintain such in good standing, except in each of the
foregoing cases where the failure to do so will not have a Material Adverse
Effect.
(g) Payment of Taxes and Claims. Subject to Section
7.02(d), the REIT shall, and shall cause each of its Subsidiaries to, pay (i)
all taxes, assessments and other governmental charges imposed upon it or them or
on any of its or their respective properties or assets or in respect of any of
its or their respective franchises, business, income or property before any
penalty or interest accrues thereon, the failure to make payment of which would
have a Material Adverse Effect, and (ii) all claims (including, without
limitation, claims for labor, services, materials and supplies) which have
become due and payable and which by law have or may become a Lien (other than a
Permitted Lien) upon any of its or their respective properties or assets, prior
to the time when any penalty or fine shall be incurred with respect thereto, the
failure to make payment of which would have a Material Adverse Effect; provided,
however, that no such taxes, assessments, and governmental charges referred to
in clause (i) above or claims referred to in clause (ii) above need be paid if
being contested in good faith by
57
appropriate proceedings promptly instituted and diligently conducted and if
adequate reserves shall have been set aside therefor in accordance with GAAP.
(h) Newco REIT. From and after the date of any transfer
or contribution of any of Borrower's general partnership interests to Newco
REIT, as permitted by Section 8.01(e)(vi)(3) or Section 8.02(c)(vi)(3) of this
Agreement, the REIT shall cause Newco REIT to at all times (i) remain a
Subsidiary of the REIT, (ii) remain controlled by the REIT and (iii) be the sole
general partner of Borrower.
ARTICLE VIII.
NEGATIVE COVENANTS
Borrower and the REIT covenant and agree that, on and after
the date hereof, until payment in full of all of the Obligations, the expiration
of the Commitments and termination of this Agreement:
8.01 With respect to Borrower:
(a) Indebtedness. Borrower shall not, and shall not
permit any of its Subsidiaries to, directly or indirectly create, incur, assume
or otherwise become or remain directly or indirectly liable with respect to, any
Indebtedness, except:
(i) the Obligations;
(ii) trade debt incurred in the normal course of business;
(iii) intercompany payables and receivables owing between
Subsidiaries in the nature of trade debt incurred in the normal course
of business; and
(iv) Indebtedness which, after giving effect thereto, may
be incurred or may remain outstanding without giving rise to an Event
of Default or Unmatured Event of Default under any provision of
Articles VIII and IX; provided, however, that (A) the Borrower shall
not, and shall not permit any of its Subsidiaries to, guarantee or
otherwise become or remain directly or indirectly liable with respect
to the Indebtedness of any Investment Affiliate, and (B) Borrower shall
not permit any Subsidiary to create, incur, assume or otherwise become
or remain directly or indirectly liable with respect to, any Recourse
Indebtedness in excess of Ten Million Dollars ($10,000,000) per
Subsidiary at any time or Fifteen Million Dollars ($15,000,000) in the
aggregate for all Subsidiaries at any time.
(b) Liens. Borrower shall not, and shall not permit any
of its Subsidiaries to, directly or indirectly create, incur, assume or permit
to exist any Lien on or with respect to any of its Property, except:
(i) Permitted Liens; and
(ii) Liens securing Indebtedness permitted to be incurred
and remain outstanding pursuant to Section 8.01(a)(iv).
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(c) Investments. Borrower shall not, and shall not permit
any of its Subsidiaries to, directly or indirectly make or own any Investment
except:
(i) Investments in cash and Cash Equivalents;
(ii) Permitted Holdings;
(iii) Investments in Subsidiaries and Investment Affiliates
owned as of the Closing Date;
(iv) Investments permitted pursuant to Section 8.01(e)(v).
(v) Controlled Ownership Interests which do not
constitute Non-Manufactured Home Community Property; and
(vi) mortgage loans which do not constitute
Non-Manufactured Home Community Property and which are either
eliminated in the consolidation of the REIT, Borrower and the
Subsidiaries or are accounted for as investments in real estate under
GAAP.
(d) Distributions and Dividends. Other than a
distribution of recapitalization proceeds in an amount not to exceed Fifteen
Dollars ($15.00) per outstanding share of the REIT's common stock to be made in
the first Fiscal Quarter of 2004, none of Borrower, the REIT nor Newco REIT
shall declare or make any dividend or other distribution on account of
partnership interests in excess of ninety-five percent (95%) of Funds From
Operations in any Fiscal Year; provided, however, that if an Event of Default
under Section 10.01(a) shall have occurred, none of Borrower, the REIT nor Newco
REIT shall declare or make any dividend or other distribution on account of
partnership interests in excess of what is required for the REIT to maintain its
status as a real estate investment trust as defined in Section 856 of the
Internal Revenue Code.
(e) Restrictions on Fundamental Changes. Except as
provided in Section 8.01(e)(vi) below:
(i) Borrower shall not, and shall not permit any of its
Subsidiaries to, enter into any merger, consolidation, reorganization
or recapitalization or liquidate, wind-up or dissolve (or suffer any
liquidation or dissolution), or discontinue its business.
(ii) Borrower shall remain a limited partnership with the
REIT as its sole general partner.
(iii) Borrower shall not change its Fiscal Year.
(iv) Except for Permitted Holdings and other Investments
permitted under Section 8.01(c), Borrower shall not engage in any line
of business other than ownership, operation, management and development
of manufactured home communities and the provision of services
incidental thereto and the brokerage, purchase, and sale of
manufactured home units, whether directly or through its Subsidiaries
and Investment Affiliates.
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(v) Borrower shall not acquire by purchase or otherwise
all or substantially all of the business, property or assets of, or
stock or other evidence of beneficial ownership of, any Person, unless
after giving effect thereto, Borrower is in pro forma compliance with
this Agreement.
(vi) So long as Borrower and the REIT at all times remain
in compliance with all of the terms and conditions of this Agreement,
including, without limitation, those contained in Articles VI, VII,
VIII and IX hereof, and no Event of Default or Unmatured Event of
Default exists at the time of or would arise as a result thereof, the
following transfers are permitted notwithstanding anything expressly to
the contrary contained in this Agreement: (1) transfers of securities
issued by the REIT that are effected on the New York Stock Exchange or
American Stock Exchange, (2) direct or indirect transfers of interests
in any Subsidiary (the "Transferred Subsidiary") among Borrower, the
REIT or any other Subsidiary, so long as the Transferred Subsidiary
remains a Subsidiary after such transfer or transfers, (3) the
contribution of the REIT's partnership interests in Borrower to Newco
REIT, (4) transfers of limited partnership interests in Borrower,
provided that the REIT or Newco REIT remains the sole general partner
of Borrower, and (5) the merger (or similar transaction) of the REIT or
Borrower, so long as the REIT or Borrower, as applicable, is the
surviving entity. At least fifteen (15) days prior to any transaction
permitted under clause (5) above, Borrower shall provide Agent and the
Lenders with written notice of such merger (or similar transaction)
accompanied by a compliance certificate demonstrating in reasonable
detail (which detail shall include actual calculations) compliance with
the financial covenants contained in Sections 8.01(a), 8.01(d) and
8.02(a) and Article IX both before and, on a pro forma basis, after
giving effect to such merger (or similar transaction).
(f) ERISA. Neither Borrower nor the REIT shall, and
neither shall permit any Subsidiary or any of their ERISA Affiliates to, do any
of the following to the extent that such act or failure to act would result in
the aggregate, after taking into account any other such acts or failure to act,
in a Material Adverse Effect:
(i) Engage, or knowingly permit a Subsidiary or an ERISA
Affiliate to engage, in any prohibited transaction described in Section
406 of ERISA or Section 4975 of the Internal Revenue Code which is not
exempt under Section 407 or 408 of ERISA or Section 4975(d) of the
Internal Revenue Code for which a class exemption is not available or a
private exemption has not been previously obtained from the DOL;
(ii) Permit to exist any accumulated funding deficiency
(as defined in Section 302 of ERISA and Section 412 of the Internal
Revenue Code), whether or not waived;
(iii) Fail, or permit a Subsidiary or an ERISA Affiliate of
the REIT, Borrower or any Subsidiary to fail, to pay timely required
contributions or annual installments due with respect to any waived
funding deficiency to any Plan if such failure could result in the
imposition of a Lien or otherwise would have a Material Adverse Effect;
(iv) Terminate, or permit an ERISA Affiliate of the REIT,
Borrower or any Subsidiary to terminate, any Benefit Plan which would
result in any liability of Borrower
60
or a Subsidiary or an ERISA Affiliate of the REIT, Borrower or any
Subsidiary under Title IV of ERISA;
(v) Fail, or permit any Subsidiary or ERISA Affiliate to
fail to pay any required installment under section (m) of Section 412
of the Internal Revenue Code or any other payment required under
Section 412 of the Internal Revenue Code on or before the due date for
such installment or other payment, if such failure could result in the
imposition of a Lien or otherwise would have a Material Adverse Effect;
(vi) Permit to exist any Termination Event;
(vii) Make, or permit a Subsidiary or an ERISA Affiliate of
the REIT, Borrower or any Subsidiary to make, a complete or partial
withdrawal (within the meaning of ERISA Section 4201) from any
Multiemployer Plan so as to result in liability to Borrower, a
Subsidiary or any ERISA Affiliate of the REIT, Borrower or any
Subsidiary which would have a Material Adverse Effect; or
(viii) Permit the total Unfunded Pension Liabilities (using
the actuarial assumptions utilized by the PBGC) for all Benefit Plans
(other than Benefit Plans which have no Unfunded Pension Liabilities)
to have a Material Adverse Effect.
None of the REIT, Borrower nor any Agreement Party shall use any "assets"
(within the meaning of ERISA or Section 4975 of the Internal Revenue Code,
including but not limited to 29 C.F.R. Section 2510.3-101 or any successor
regulation thereto) of an "employee benefit plan" within the meaning of Section
3(3) of ERISA or a "plan" within the meaning of Section 4975(e)(1) of the
Internal Revenue Code to repay or secure the Obligations if the use of such
assets may result in a prohibited transaction under ERISA or the Internal
Revenue Code (which is not exempt from the restrictions of Section 406 of ERISA
and Section 4975 of the Internal Revenue Code and the taxes and penalties
imposed by Section 4975 of the Internal Revenue Code and Section 502(i) of
ERISA) or in a Lender, Agent or the Lenders being deemed in violation of Section
404 or 406 of ERISA or Section 4975 of the Internal Revenue Code or otherwise by
itself results in or will result in a Lender, Agent or the Lenders being a
fiduciary or party in interest under ERISA or a "disqualified person" as defined
in Section 4975 (e) (2) of the Internal Revenue Code with respect to an
"employee benefit plan" within the meaning of Section 3(3) of ERISA or a "plan"
within the meaning of Section 4975(e)(1) of the Internal Revenue Code. Without
limitation of any other provision of this Agreement, none of the REIT, Borrower
or any Agreement Party shall assign, sell, pledge, encumber, transfer,
hypothecate or otherwise dispose of their respective interests or rights (direct
or indirect) in any Loan Document, or attempt to do any of the foregoing or
suffer any of the foregoing, or permit any party with a direct or indirect
interest or right in any Loan Document to do any of the foregoing, nor shall the
REIT or Borrower assign, sell, pledge, encumber, transfer, hypothecate or
otherwise dispose of any of their respective rights or interests (direct or
indirect) in any Agreement Party, Borrower or the REIT, as applicable, or
attempt to do any of the foregoing or suffer any of the foregoing, if such
action would cause the Obligations, or the exercise of any of the Agent's or
Lenders' rights in connection therewith, to constitute a prohibited transaction
under ERISA or the Internal Revenue Code (unless Borrower furnishes to Agent a
legal opinion reasonably satisfactory to Agent that the transaction is exempt
from the prohibited transaction provisions of ERISA and the Internal Revenue
Code (for this purpose, Agent and the Lenders agree to supply Borrower all
relevant
61
non-confidential factual information reasonably necessary to such legal
opinion and reasonably requested by Borrower)) or otherwise results in a Lender,
Agent or the Lenders being deemed in violation of Sections 404 or 406 of ERISA
or Section 4975 of the Internal Revenue Code or otherwise by itself would result
in a Lender, Agent or the Lenders being a fiduciary or party in interest under
ERISA or a "disqualified person" as defined in Section 4975(e)(2) of the
Internal Revenue Code with respect to an "employee benefit plan" within the
meaning of Section 3(3) of ERISA or a "plan" within the meaning of Section
4975(e)(1) of the Internal Revenue Code.
(g) Environmental Liabilities. Borrower shall not, and
shall not permit any of its Subsidiaries to, become subject to any Liabilities
and Costs which would have a Material Adverse Effect arising out of or related
to (i) the Release or threatened Release of any Contaminant into the
environment, or any Remedial Action in response thereto, or (ii) any violation
of any Environmental Laws. Notwithstanding the foregoing provision, Borrower and
its Subsidiaries shall have the right to contest in good faith any claim of
violation of an Environmental Law by appropriate legal proceedings and shall be
entitled to postpone compliance with the obligation being contested as long as
(i) no Event of Default shall have occurred and be continuing, (ii) Borrower
shall have given Agent prior written notice of the commencement of such contest,
(iii) noncompliance with such Environmental Law shall not subject Borrower or
such Subsidiary to any criminal penalty or subject Agent to pay any civil
penalty or to prosecution for a crime, and (iv) no portion of any Property
material to Borrower or its condition or prospects shall be in imminent danger
of being sold, forfeited or lost, by reason of such contest or the continued
existence of the matter being contested.
(h) Amendment of Constituent Documents. Borrower shall
not permit any amendment of its limited partnership agreement, certificate of
limited partnership or by-laws, if any, which would materially and adversely
affect Agent or Lenders or their respective rights and remedies under the Loan
Documents.
(i) Disposal of Interests. Borrower will not directly or
indirectly convey, sell, transfer, assign, pledge or otherwise encumber or
dispose of any material portion of its partnership interests, stock or other
ownership interests in any Subsidiary or other Person in which it has an
interest unless Borrower has delivered to Agent a Compliance Certificate showing
on a pro forma basis (calculated in a manner reasonably acceptable to Agent)
that there would be no breach of any of the financial covenants contained in
Articles VIII and XI after giving effect to such conveyance, sale, transfer,
assignment, pledge, or other encumbrance or disposition.
(j) Margin Regulations. No portion of the proceeds of any
credit extended under this Agreement shall be used in any manner which might
cause the extension of credit or the application of such proceeds to violate
Regulation U or Regulation X or any other regulation of the Federal Reserve
Board or to violate the Securities Exchange Act or the Securities Act, in each
case as in effect on the date or dates of Borrowings and such use of proceeds.
(k) Transactions with Affiliates. Borrower shall not and
shall not permit any of its Subsidiaries to enter into, any transaction or
series of related transactions with any Affiliate of Borrower, other than
transactions in the ordinary course of business which are on terms and
conditions substantially as favorable to Borrower or such Subsidiary as would be
obtainable by Borrower or such Subsidiary in an arms-length transaction with a
Person other than an Affiliate.
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8.02 With respect to the REIT:
(a) Indebtedness. The REIT shall not, and shall not
permit any of its Subsidiaries to, directly or indirectly, create, incur, assume
or otherwise become or remain directly or indirectly liable with respect to, any
Indebtedness, except:
(i) the Obligations; and
(ii) Indebtedness which, after giving effect thereto, may
be incurred or may remain outstanding without giving rise to an Event
of Default or Unmatured Event of Default under any provision of
Articles VIII and IX; provided, however, that (A) the REIT shall not,
and shall not permit any of its Subsidiaries to, guarantee or otherwise
become or remain directly or indirectly liable with respect to the
Indebtedness of any Investment Affiliate, and (B) the REIT shall not
permit any Subsidiary to create, incur, assume or otherwise become or
remain directly or indirectly liable with respect to, any Recourse
Indebtedness in excess of Ten Million Dollars ($10,000,000) per
Subsidiary at any time or Fifteen Million Dollars ($15,000,000) in the
aggregate for all Subsidiaries at any time.
(b) Liens. The REIT shall not, and shall not permit any
of its Subsidiaries to, directly or indirectly create, incur, assume or permit
to exist any Lien on or with respect to any of its Property, except:
(i) Permitted Liens; and
(ii) Liens securing Indebtedness permitted to be incurred
and remain outstanding pursuant to Section 8.02(a)(ii).
(c) Restriction on Fundamental Changes. Except as
provided in Section 8.02(c)(vi) below:
(i) The REIT shall not enter into any merger,
consolidation, reorganization or recapitalization or liquidate, wind-up
or dissolve (or suffer any liquidation or dissolution) or discontinue
its business.
(ii) The REIT shall not change its Fiscal Year.
(iii) The REIT shall not engage in any line of business
other than owning partnership interests in Borrower and the interests
identified on Schedule 5.01(w) as being owned by the REIT and any other
ownership interests in Subsidiaries and Investment Affiliates which are
permitted under the terms of Borrower's partnership agreement.
(iv) The REIT shall not have an Investment in any Person
other than Borrower and the interests identified on Schedule 5.01(w) as
being owned by the REIT and any other ownership interests in
Subsidiaries and Investment Affiliates which are permitted under the
terms of Borrower's partnership agreement.
63
(v) The REIT shall not acquire an interest in any
Property other than Securities issued by Borrower and the interests
identified on Schedule 5.01(w) and any other ownership interests in
Subsidiaries and Investment Affiliates which are permitted under the
terms of Borrower's partnership agreement.
(vi) So long as Borrower and the REIT at all times remain
in compliance with all of the terms and conditions of this Agreement,
including, without limitation, those contained in Articles VI, VII,
VIII and IX hereof, and no Event of Default or Unmatured Event of
Default exists at the time of or would arise as a result thereof, the
following transfers are permitted notwithstanding anything expressly to
the contrary contained in this Agreement: (1) transfers of securities
issued by the REIT that are effected on the New York Stock Exchange or
American Stock Exchange, (2) direct or indirect transfers of interests
in any Subsidiary (the "Transferred Subsidiary") among Borrower, the
REIT or any other Subsidiary, so long as the Transferred Subsidiary
remains a Subsidiary after such transfer or transfers, (3) the
contribution of the REIT's partnership interests in Borrower to Newco
REIT, (4) transfers of limited partnership interests in Borrower,
provided that the REIT or Newco REIT remains the sole general partner
of Borrower, and (5) the merger (or similar transaction) of the REIT or
Borrower, so long as the REIT or Borrower, as applicable, is the
surviving entity. At least fifteen (15) days prior to any transaction
permitted under clause (5) above, the REIT shall provide Agent and the
Lenders with written notice of such merger (or similar transaction)
accompanied by a compliance certificate demonstrating in reasonable
detail (which detail shall include actual calculations) compliance with
the financial covenants contained in Sections 8.01(a), 8.01(d) and
8.02(a) and Article IX both before and, on a pro forma basis, after
giving effect to such merger (or similar transaction).
(d) Environmental Liabilities. The REIT shall not, and
shall not permit any of its Subsidiaries to become subject to any Liabilities
and Costs which would have a Material Adverse Effect arising out of or related
to (i) the Release or threatened Release of any Contaminant into the
environment, or any Remedial Action in response thereto, or (ii) any violation
of any Environmental Laws. Notwithstanding the foregoing provision, the REIT and
its Subsidiaries shall have the right to contest in good faith any claim of
violation of an Environmental Law by appropriate legal proceedings and shall be
entitled to postpone compliance with the obligation being contested as long as
(i) no Event of Default shall have occurred and be continuing, (ii) the REIT
shall have given Agent prior written notice of the commencement of such contest,
(iii) noncompliance with such Environmental Law shall not subject the REIT or
such Subsidiary to any criminal penalty or subject Agent to pay any civil
penalty or to prosecution for a crime, and (iv) no portion of any Property
material to Borrower or its condition or prospects shall be in imminent danger
of being sold, forfeited or lost, by reason of such contest or the continued
existence of the matter being contested.
(e) Amendment of Charter or By-Laws. The REIT shall not
permit any amendment of its charter documents or by-laws, which would materially
and adversely affect Agent or Lenders or their respective rights and remedies
under the Loan Documents.
(f) Disposal of Partnership Interests. Except as
permitted under Section 8.02(c)(vi)(3) of this Agreement, the REIT will not
directly or indirectly convey, sell, transfer, assign, pledge or otherwise
encumber or dispose of any of its partnership interests in Borrower.
64
(g) Maximum Ownership Interests. No Person or group of
Persons (within the meaning of Section 13 or 14 of the Securities Exchange Act)
(other than Xxxxxx Xxxx) shall beneficially acquire ownership (within the
meaning of Rule 13d-3 promulgated by the Commission under such Act), directly or
indirectly, of more than fifteen percent (15%) of the Securities which have the
right to elect the board of directors of the REIT under ordinary circumstances
on a combined basis, after giving effect to the conversion of any Convertible
Securities in the REIT and Borrower.
ARTICLE IX.
FINANCIAL COVENANTS
Borrower covenants and agrees that, on and after the date of
this Agreement and until payment in full of all the Obligations, the expiration
of all Commitments and the termination of this Agreement:
9.01 Total Liabilities to Gross Asset Value. Borrower
shall not permit the ratio of Total Liabilities to the sum of Gross Asset Values
for Borrower and each of its Subsidiaries to exceed 0.7:1.
9.02 EBITDA to Fixed Charges Ratio. Borrower shall not
permit the ratio of EBITDA for any Fiscal Quarter to Fixed Charges for such
Fiscal Quarter to be less than 1.40:1.
9.03 Unencumbered Net Operating Income to Unsecured
Interest Expense. Borrower shall not permit the ratio of Unencumbered Net
Operating Income for any Fiscal Quarter to Unsecured Interest Expense for such
Fiscal Quarter to be less than 1.80:1.
9.04 Unencumbered Pool. Borrower shall not permit the
ratio of (a) the Unencumbered Asset Value to (b) outstanding Unsecured Debt to
be less than 1.35:1.
9.05 Minimum Net Worth. Borrower will maintain a Net Worth
of not less than the Minimum Net Worth.
9.06 Permitted Holdings. Borrower's primary business will
be the ownership, operation, management and development of manufactured home
communities and any other business activities of Borrower and its Subsidiaries
will remain incidental thereto. Notwithstanding the foregoing, Borrower and its
Subsidiaries may acquire, or maintain or engage in the following Permitted
Holdings if and so long as (i) the aggregate value of such Permitted Holdings,
whether held directly or indirectly by Borrower and its Subsidiaries, does not
exceed, at any time, twenty percent (20%) of Gross Asset Value for Borrower as a
whole and (ii) the value of each such Permitted Holding, whether held directly
or indirectly by Borrower and its Subsidiaries, does not exceed, at any time,
the following percentages of Borrower's Gross Asset Value:
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Maximum Percentage
Permitted Holdings of Gross Asset Value
------------------ --------------------
Non-Manufactured Home
Community Property (other
than cash or Cash Equivalents) 10%
Land 5%
Securities issued by real estate investment trusts primarily engaged in
the development, ownership, operation and management of manufactured
home communities 5%
Manufactured Home Community Mortgages other than mortgage indebtedness
which is either eliminated in the consolidation of the REIT, Borrower
and the Subsidiaries or accounted for as investments in real estate
under GAAP 10%
Manufactured Home Community Ownership Interests other than Controlled
Ownership Interests 10%
Development Activity 10%
Taxable REIT Subsidiary Interests 5%
The value of the foregoing categories of Permitted Holdings shall be calculated
as follows: (i) the value of any Non-Manufactured Home Community Property (other
than cash or Cash Equivalents) or any Manufactured Home Community Ownership
Interest (other than a Controlled Ownership Interest) shall be calculated based
upon its Adjusted Asset Value; (ii) the value of any Land or any Security issued
by a real estate investment trust primarily engaged in the development,
ownership, operation and management of manufactured home communities shall be
equal to the lesser of (A) the acquisition cost thereof or (B) the current
market value thereof (such market value to be determined in a manner reasonably
acceptable to Agent); (iii) the value of any Taxable REIT Subsidiary Interest
shall be the acquisition or investment cost thereof; (iv) the value of any
Manufactured Home Community Mortgage (other than mortgage indebtedness which is
either eliminated in the consolidation of the REIT, Borrower and the
Subsidiaries or accounted for as an investment in real estate under GAAP) shall
be equal to the book value thereof; (v) the value of Development Activity by
Borrower or any Subsidiary shall be equal to the full budgeted cost thereof; and
(vi) the value of any Development Activity by an
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Investment Affiliate shall be equal to the greater of (A) Borrower's pro rata
share of the full budgeted cost thereof based upon its percentage of equity
ownership, or (B) Borrower's pro rata share of the full budgeted cost thereof
based upon Borrower's economic interest in the project (as determined by
Borrower in a manner reasonably satisfactory to Agent).
9.07 Calculation. Each of the foregoing ratios and
financial requirements shall be calculated as of the last day of each Fiscal
Quarter, but shall be satisfied at all times.
ARTICLE X.
EVENTS OF DEFAULT; RIGHTS AND REMEDIES
10.01 Events of Default. Each of the following occurrences
shall constitute an Event of Default under this Agreement:
(a) Failure to Make Payments When Due. (i) The failure to
pay in full any amount due on the Termination Date; (ii) the failure to pay in
full any principal when due; (iii) the failure to pay in full any interest owing
hereunder or under any of the other Loan Documents within ten (10) days after
the due date thereof and, unless Agent has previously delivered two (2) or more
notices of payment default to Borrower during the term of this Agreement (in
which event the following notice shall not be required), Agent shall have given
Borrower written notice that Agent has not received such payment on or before
the date such payment was required to be made and Borrower shall have failed to
make such payment within five (5) days after receipt of such notice; or (iv) the
failure to pay in full any other payment required hereunder or under any of the
other Loan Documents, whether such payment is required to be made to Agent or to
some other Person, within ten (10) days after Agent gives Borrower written
notice that such payment is due and unpaid.
(b) Dividends. Borrower or the REIT shall breach the
covenant set forth in Section 8.01(d).
(c) Breach of Financial Covenants. Borrower shall fail to
satisfy any covenant set forth in Article IX and such failure shall continue for
forty (40) days after Borrower's knowledge thereof.
(d) Other Defaults. Borrower, the REIT or any Agreement
Party shall fail duly and punctually to perform or observe any agreement,
covenant or obligation binding on Borrower, the REIT or any Agreement Party
under this Agreement or under any of the other Loan Documents (other than as
described in Section 7.01(e) or Sections 10.01(a), (b), (c), (e), (g) or (p)),
and such failure shall continue for thirty (30) days after written notice from
Agent to Borrower, the REIT or any Agreement Party (or (i) such lesser period of
time as is mandated by applicable Requirements of Law or (ii) such longer period
of time (but in no case more than ninety (90) days) as is reasonably required to
cure such failure if Borrower, the REIT, or such Agreement Party commences such
cure within such ninety (90) days and diligently pursues the completion
thereof).
(e) Breach of Representation or Warranty. Any
representation or warranty made or deemed made by Borrower, the REIT or any
Agreement Party to Agent or any Lender herein or in any of the other Loan
Documents or in any statement, certificate or financial statements at any time
given by Borrower pursuant to any of the Loan Documents shall be false
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or misleading in any material respect on the date as of which made and, with
respect to any such representation or warranty not known by Borrower at the time
made or deemed made to be false or misleading, the defect causing such
representation or warranty to be false or misleading is not removed within
thirty (30) days after written notice thereof from Agent to Borrower.
(f) Default as to Other Indebtedness. Borrower, the REIT,
any Subsidiary or any Investment Affiliate shall have defaulted under any Other
Indebtedness of such party (other than Non-Recourse Indebtedness) and as a
result thereof the holders of such Other Indebtedness shall have accelerated
such Other Indebtedness (other than Non-Recourse Indebtedness), if the aggregate
amount of such accelerated Other Indebtedness (to the extent of any recourse to
Borrower, the REIT or any Subsidiary), together with the aggregate amount of any
Other Indebtedness (other than Non-Recourse Indebtedness) of Borrower, the REIT,
any Subsidiary or any Investment Affiliate which has theretofore been
accelerated (to the extent of any recourse to Borrower, the REIT or any
Subsidiary) is $10,000,000 or more.
(g) Involuntary Bankruptcy; Appointment of Receiver, etc.
(i) An involuntary case or other proceeding shall be
commenced against the REIT, Borrower, any Subsidiary, or any Agreement
Party and the petition shall not be dismissed within sixty (60) days
after commencement of the case, or a court having jurisdiction shall
enter a decree or order for relief in respect of the REIT, Borrower,
any Subsidiary, or any Agreement Party, as the case may be, in an
involuntary case or other proceeding, under any applicable bankruptcy,
insolvency or other similar law now or hereafter in effect; or any
other similar relief shall be granted under any applicable federal,
state or foreign law; or
(ii) A decree or order of a court having jurisdiction in
the premises for the appointment of a receiver, liquidator,
sequestrator, trustee, custodian or other officer having similar powers
over Borrower, the REIT, any Subsidiary, or any Agreement Party, or
over all or a substantial part of the property of the REIT, Borrower,
any Subsidiary, or any Agreement Party shall be entered, or an interim
receiver, trustee or other custodian of the REIT, Borrower, any
Subsidiary, or any Agreement Party, or of all or a substantial part of
the property of the REIT, Borrower, any Subsidiary, or any Agreement
Party shall be appointed or a warrant of attachment, execution or
similar process against any substantial part of the property of the
REIT, Borrower, any Subsidiary, or any Agreement Party shall be issued
and any such event shall not be stayed, vacated, dismissed, bonded or
discharged within sixty (60) days of entry, appointment or issuance.
(h) Voluntary Bankruptcy; Appointment of Receiver, etc.
The REIT, Borrower, any Subsidiary, or any Agreement Party shall have an order
for relief entered with respect to it or commence a voluntary case under any
applicable bankruptcy, insolvency or other similar law now or hereafter in
effect, or shall consent to the entry of an order for relief in an involuntary
case, or to the conversion of an involuntary case to a voluntary case, under any
such law, or shall consent to the appointment of or taking of possession by a
receiver, trustee or other custodian for all or a substantial part of its
property; the REIT, Borrower, any Subsidiary, or any Agreement Party shall make
any assignment for the benefit of creditors or shall be unable or fail, or admit
in writing its inability, to pay its debts as such debts become due; or the
general partner(s) or Board of Directors (or any committee thereof), as
applicable, of the REIT,
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Borrower, any Subsidiary, or any Agreement Party adopts any resolution or
otherwise authorizes any action to approve any of the foregoing.
(i) Judgments and Attachments. (i) Any money judgments
(other than a money judgment covered by insurance but only if the insurer has
admitted liability with respect to such money judgment), writs or warrants of
attachment, or similar processes involving an aggregate amount in excess of
$5,000,000 shall be entered or filed against the REIT, Borrower, any Subsidiary,
or any Agreement Party or their respective assets and shall remain undischarged,
unvacated, unbonded or unstayed for a period of thirty (30) days, or (ii) any
judgment or order of any court or administrative agency awarding material
damages shall be entered against the REIT, Borrower, any Subsidiary, or any
Agreement Party in any action under the Federal securities laws seeking
rescission of the purchase or sale of, or for damages arising from the purchase
or sale of, any Securities, such judgment or order shall have become final after
exhaustion of all available appellate remedies and such judgment or order would
have a Material Adverse Effect.
(j) Dissolution. Any order, judgment or decree shall be
entered against the REIT, Borrower, or any Agreement Party decreeing its
involuntary dissolution or split up and such order shall remain undischarged and
unstayed for a period in excess of thirty (30) days; or the REIT, Borrower, or
any Agreement Party shall otherwise dissolve or cease to exist.
(k) Loan Documents; Failure of Security or Subordination.
Any Loan Document shall cease to be in full force and effect or any Obligation
shall be subordinated or shall not have the priority contemplated by this
Agreement or the Loan Documents for any reason or any guarantor under any
guaranty of all or any portion of the Obligations shall at any time disavow or
deny liability under such guaranty in writing.
(l) ERISA Plan Assets. Any assets of Borrower, the REIT
or any Agreement Party shall constitute "assets" (within the meaning of 29
C.F.R. Section 2510.3-101 or any successor regulation thereto) of an "employee
benefit plan" within the meaning of Section 3(3) of ERISA or a "plan" within the
meaning of Section 4975(e)(1) of the Internal Revenue Code or Borrower, the REIT
or any Agreement Party shall be an "employee benefit plan" as defined in Section
3(3) of ERISA, a "multiemployer plan" as defined in Sections 4001(a)(3) or 3(37)
of ERISA, or a "plan" as defined in Section 4975(e)(1) of the Internal Revenue
Code.
(m) ERISA Prohibited Transaction. The Obligations, any of
the Loan Documents or the exercise of any of the Agent's or Lenders' rights in
connection therewith shall constitute a prohibited transaction under ERISA
and/or the Internal Revenue Code (which is not exempt from the restrictions of
Section 406 of ERISA or Section 4975 of the Internal Revenue Code and the taxes
and penalties imposed by Section 4975 of the Internal Revenue Code and Section
502(i) of ERISA).
(n) ERISA Liabilities. (i) Any Termination Event occurs
which will or is reasonably likely to subject Borrower, the REIT, any
Subsidiary, any Agreement Party, any ERISA Affiliate thereof or any of them to a
liability which Agent reasonably determines will have a Material Adverse Effect;
(ii) the plan administrator of any Benefit Plan applies for approval under
Section 412(d) of the Internal Revenue Code for a waiver of the minimum funding
standards of Section 412(a) of the Internal Revenue Code and Agent reasonably
determines that the business hardship upon which the Section 412(d) waiver
request was based
69
will or would reasonably be anticipated to subject Borrower, the REIT, any
Subsidiary, any Agreement Party, or any ERISA Affiliate thereof or any of them
to a liability which Agent reasonably determines will have a Material Adverse
Effect; (iii) any Benefit Plan shall incur an "accumulated funding deficiency"
(as defined in Section 412 of the Internal Revenue Code or Section 302 of ERISA)
for which a waiver shall not have been obtained in accordance with the
applicable provisions of the Internal Revenue Code or ERISA which "accumulated
funding deficiency" will or would reasonably be anticipated to subject Borrower,
the REIT, any Subsidiary, any Agreement Party, or any ERISA Affiliate thereof or
any of them to a liability which the Agent reasonably determines will have a
Material Adverse Effect; (iv) Borrower, the REIT, any Subsidiary, any Agreement
Party, or any ERISA Affiliate thereof or any of them shall have engaged in a
transaction which is prohibited under Section 4975 of the Internal Revenue Code
or Section 406 of ERISA which will or would reasonably be anticipated to result
in the imposition of a liability on Borrower, the REIT, any Subsidiary, any
Agreement Party, or any ERISA Affiliate thereof or any of them which the Agent
reasonably determines will have a Material Adverse Effect; (v) Borrower, the
REIT, any Subsidiary, any Agreement Party, or any ERISA Affiliate thereof or any
of them shall fail to pay when due an amount which it shall have become liable
to pay to the PBGC, a Plan or a trust established under Title IV of ERISA which
failure will or would reasonably be anticipated to result in the imposition of a
liability on Borrower, the REIT, any Subsidiary, any Agreement Party, or any
ERISA Affiliate thereof or any of them which the Agent reasonably determines
will have a Material Adverse Effect; (vi) a condition shall exist by reason of
which the PBGC would be entitled to obtain a decree adjudicating that a Benefit
Plan must be terminated or have a trustee appointed to administer such Plan
which condition will or would reasonably be anticipated to result in the
imposition of a liability on Borrower, the REIT, any Subsidiary, any Agreement
Party, or any ERISA Affiliate thereof or any of them which the Agent reasonably
determines will have a Material Adverse Effect; (vii) a Lien shall be imposed on
any assets of Borrower, the REIT, any Subsidiary, any Agreement Party, or any
ERISA Affiliate thereof or any of them in favor of the PBGC or a Plan which the
Agent reasonably determines will have a Material Adverse Effect; (viii)
Borrower, the REIT, any Subsidiary, any Agreement Party, or any ERISA Affiliate
thereof or any of them shall suffer a partial or complete withdrawal from a
Multiemployer Plan or shall be in "default" (as defined in Section 4219(c)(5) of
ERISA) with respect to payments to a Multiemployer Plan resulting from a
complete or partial withdrawal (as described in Section 4203 or 4205 of ERISA)
from such Multiemployer Plan which will or would reasonably be anticipated to
result in the imposition of a liability on Borrower, the REIT, any Subsidiary,
any Agreement Party, or any ERISA Affiliate thereof or any of them which the
Agent reasonably determines will have a Material Adverse Effect; or (ix) a
proceeding shall be instituted by a fiduciary of any Multiemployer Plan against
Borrower, the REIT, any Subsidiary, any Agreement Party, or any ERISA Affiliate
thereof or any of them to enforce Section 515 of ERISA which will or would
reasonably be anticipated to result in the imposition of a liability on
Borrower, the REIT, any Subsidiary, any Agreement Party, or any ERISA Affiliate
thereof or any of them which the Agent reasonably determines will have a
Material Adverse Effect.
(o) Solvency. Borrower, any Agreement Party or the REIT
shall cease to be Solvent.
(p) Board of Directors. During any 12-month period,
individuals who were directors of the REIT on the first day of such period shall
not constitute a majority of the board of directors of the REIT.
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An Event of Default shall be deemed "continuing" until cured
or waived in writing in accordance with Section 12.05.
10.02 Rights and Remedies.
(a) Acceleration. Upon the occurrence of any Event of
Default with respect to Borrower described in the foregoing Section 10.01(g) or
10.01(h), the Commitments (including the obligations of Swingline Lender and
Issuing Lender) shall automatically and immediately terminate and the unpaid
principal amount of and any and all accrued interest on the Loans and all of the
other Obligations shall automatically become immediately due and payable, with
all additional interest from time to time accrued thereon and without
presentment, demand or protest or other requirements of any kind (including
without limitation valuation and appraisement, diligence, presentment, notice of
intent to demand or accelerate or notice of acceleration), all of which are
hereby expressly waived by Borrower, and the obligations of Lenders to make any
Loans hereunder shall thereupon terminate; and upon the occurrence and during
the continuance of any other Event of Default, Agent shall, at the request of,
or may, with the consent of, Requisite Lenders, by written notice to Borrower,
(i) declare that the Commitments (including the obligations of Swingline Lender
and Issuing Lender) are terminated, whereupon the Commitments and the obligation
of Lenders to make any Loans hereunder shall immediately terminate, and/or (ii)
declare the unpaid principal amount of and any and all accrued and unpaid
interest on the Loans and all of the other Obligations to be, and the same shall
thereupon be, immediately due and payable with all additional interest from time
to time accrued thereon and without presentment, demand, or protest or other
requirements of any kind (including without limitation, valuation and
appraisement, diligence, presentment, notice of intent to demand or accelerate
and of acceleration), all of which are hereby expressly waived by Borrower. Upon
the occurrence of and during the continuance of an Event of Default, no
Agreement Party shall be permitted to make any distributions or dividends
without the prior written consent of Agent. Upon the occurrence of an Event of
Default or an acceleration of the Obligations, Agent and Lenders may exercise
all or any portion of the rights and remedies set forth in the Loan Documents.
(b) Access to Information. Notwithstanding anything to
the contrary contained in the Loan Documents, upon the occurrence of and during
the continuance of an Event of Default, Agent shall be entitled to request and
receive, by or through Borrower or appropriate legal process, any and all
information concerning the REIT, Borrower, any Subsidiary of Borrower, any
Investment Affiliate, any Agreement Party, or any property of any of them, which
is reasonably available to or obtainable by Borrower.
(c) Waiver of Demand. Demand, presentment, protest and
notice of nonpayment are hereby waived by Borrower.
(d) Waivers, Amendments and Remedies. No delay or
omission of Agent or Lenders to exercise any right under any Loan Document shall
impair such right or be construed to be a waiver of any Event of Default or an
acquiescence therein, and any single or partial exercise of any such right shall
not preclude other or further exercise thereof or the exercise of any other
right, and no waiver, amendment or other variation of the terms, conditions or
provisions of the Loan Documents whatsoever shall be valid unless in a writing
signed by Agent after obtaining written approval thereof or the signature
thereon of those Lenders required to
71
approve such waiver, amendment or other variation, and then only to the extent
in such writing specifically set forth. All remedies contained in the Loan
Documents or by law afforded shall be cumulative and all shall be available to
Agent and Lenders until the Obligations have been paid in full, the Commitments
have expired or terminated and this Agreement has been terminated.
10.03 Rescission. If at any time after acceleration of the
maturity of the Loans, Borrower shall pay all arrears of interest and all
payments on account of principal of the Loans which shall have become due
otherwise than by acceleration (with interest on principal and, to the extent
permitted by law, on overdue interest, at the rates specified in this Agreement)
and all Events of Default and Unmatured Events of Default (other than nonpayment
of principal of and accrued interest on the Loans due and payable solely by
virtue of acceleration) shall be remedied or waived pursuant to Section 12.05,
then by written notice to Borrower, Requisite Lenders may elect, in the sole
discretion of Requisite Lenders to rescind and annul the acceleration and its
consequences; but such action shall not affect any subsequent Event of Default
or Unmatured Event of Default or impair any right or remedy in connection
therewith. The provisions of the preceding sentence are intended merely to bind
Lenders to a decision which may be made at the election of Requisite Lenders;
they are not intended to benefit Borrower and do not give Borrower the right to
require Lenders to rescind or annul any acceleration hereunder, even if the
conditions set forth herein are met.
10.04 Suspension of Lending. At any time during which an
Unmatured Event of Default exists pursuant to Section 10.01(c) or Section
10.01(d) and is not cured (by improvement in the applicable financial measure by
compliance with the applicable financial covenant in such 40-day period or as
provided in Section 10.01(d)), Borrower shall have no right to receive any
additional Loans.
ARTICLE XI.
AGENCY PROVISIONS
11.01 Appointment
(a) Each Lender hereby designates and appoints Xxxxx
Fargo as Agent of such Lender under this Agreement and the Loan Documents, and
each Lender hereby irrevocably authorizes Agent to take such action on its
behalf under the provisions of this Agreement and the Loan Documents and to
exercise such powers as are set forth herein or therein, together with such
other powers as are reasonably incidental thereto. Agent agrees to act as such
on the express conditions contained in this Article XI.
(b) The provisions of this Article XI are solely for the
benefit of Agent and Lenders, and Borrower shall not have any rights to rely on
or enforce any of the provisions hereof. In performing its functions and duties
under this Agreement, Agent shall act solely as Agent of Lenders and does not
assume and shall not be deemed to have assumed any obligation toward or
relationship of agency or trust with or for Borrower.
11.02 Nature of Duties. Agent shall not have any duties or
responsibilities except those expressly set forth in this Agreement or in the
Loan Documents. The duties of Agent shall be administrative in nature. Subject
to the provisions of Sections 11.05 and 11.07, Agent shall administer the Loans
in the same manner as it administers its own loans. Agent shall
72
not have by reason of this Agreement a fiduciary relationship in respect of any
Lender. Nothing in this Agreement or any of the Loan Documents, expressed or
implied, is intended or shall be construed to impose upon Agent any obligation
in respect of this Agreement or any of the Loan Documents except as expressly
set forth herein or therein. Each Lender shall make its own independent
investigation of the financial condition and affairs of the REIT, Borrower, the
Subsidiaries, the Investment Affiliates, and each Agreement Party in connection
with the making and the continuance of the Loans hereunder and shall make its
own assessment of the creditworthiness of the REIT, Borrower, the Subsidiaries,
the Investment Affiliates, and each Agreement Party, and, except as specifically
provided herein, Agent shall not have any duty or responsibility, either
initially or on a continuing basis, to provide any Lender with any credit or
other information with respect thereto, whether coming into its possession
before the Closing Date or at any time or times thereafter.
11.03 Loan Disbursements
(a) Promptly after receipt of a Notice of Borrowing for a
Loan to be made pursuant to Section 2.01 hereof, but in no event later than one
(1) Business Day prior to the proposed Funding Date for a Base Rate Loan or two
(2) Business Days prior to the proposed Funding Date for a LIBOR Loan, Agent
shall notify each Lender of the proposed Borrowing and the Funding Date set
forth therein. Each Lender shall make available to Agent (or the funding bank or
entity designated by Agent), the amount of such Lender's Pro Rata Share of such
Borrowing in immediately available funds not later than the times designated in
Section 11.03(b). Unless Agent shall have been notified by any Lender prior to
such time for funding in respect of any Borrowing that such Lender does not
intend to make available to Agent such Lender's Pro Rata Share of such
Borrowing, Agent may assume that such Lender has made such amount available to
Agent and Agent, in its sole discretion, may, but shall not be obligated to,
make available to Borrower a corresponding amount. If such corresponding amount
is not in fact made available to Agent by such Lender on or prior to a Funding
Date, such Lender agrees to pay to Agent forthwith on demand such corresponding
amount together with interest thereon, for each day from the date such amount is
made available to Borrower until the date such amount is paid or repaid to
Agent, at the Federal Funds Rate. If such Lender shall pay to Agent such
corresponding amount, such amount so paid shall constitute such Lender's Pro
Rata Share of such Borrowing. If such Lender shall not pay to Agent such
corresponding amount after reasonable attempts are made by Agent to collect such
amounts from such Lender, Borrower agrees to repay to Agent forthwith on demand
such corresponding amount together with interest thereon, for each day from the
date such amount is made available to Borrower until the date such amount is
repaid to Agent, at the interest rate applicable thereto.
(b) Requests by Agent for funding by Lenders of Loans
will be made by telecopy. Each Lender shall make the amount of its Loan
available to Agent in Dollars and in immediately available funds, to such bank
and account, in El Segundo, California as Agent may designate, not later than
10:00 A.M. (California time) on the Funding Date designated in the Notice of
Borrowing with respect to such Loan. Nothing in this Section 11.03(b) shall be
deemed to relieve any Lender of its obligation hereunder to make its Pro Rata
Share of Loans on any Funding Date, nor shall any Lender be responsible for the
failure of any other Lender to perform its obligations to make any Loan
hereunder, and the Commitment of any Lender shall not be increased or decreased
as a result of the failure by any other Lender to perform its obligation to make
a Loan.
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11.04 Distribution and Apportionment of Payments
(a) Subject to Section 11.04(b), payments actually
received by Agent for the account of Lenders shall be paid to them promptly
after receipt thereof by Agent, but in any event prior to 3:00 P.M. (California
time) on the day of receipt (if received by 11:00 A.M. (California time) on such
day), or within one (1) Business Day thereafter (if received after 11:00 A.M.
(California time) on the day of receipt), provided that Agent shall pay to such
Lenders interest thereon at the Federal Funds Rate from the Business Day on
which such funds are required to be paid to Lenders by Agent until such funds
are actually paid in immediately available funds to such Lenders. All payments
of principal and interest in respect of outstanding Loans (other than Swingline
Loans), all payments of the fees described in this Agreement (other than agency
and arrangement fees described in Section 2.04(c)), and all payments in respect
of any other Obligations shall be allocated among such of Lenders as are
entitled thereto, in proportion to their respective Pro Rata Shares or otherwise
as provided herein. Agent shall promptly, but in any event within two (2)
Business Days (with interest thereon, if required pursuant to this Section
11.04(a)), distribute to each Lender at its primary address set forth on the
appropriate counterpart signature page hereof or on the Assignment and
Assumption, or at such other address as a Lender may request in writing, such
funds as it may be entitled to receive, provided that Agent shall in any event
not be bound to inquire into or determine the validity, scope or priority of any
interest or entitlement of any Lender and may suspend all payments and seek
appropriate relief (including without limitation instructions from Requisite
Lenders, or all Lenders, as applicable, or an action in the nature of
interpleader) in the event of any doubt or dispute as to any apportionment or
distribution contemplated hereby. The order of priority herein is set forth
solely to determine the rights and priorities of Lenders as among themselves and
may at any time or from time to time be changed by Lenders as they may elect, in
writing in accordance with Section 12.05, without necessity of notice to or
consent of or approval by Borrower or any other Person.
(b) Notwithstanding any provision hereof to the contrary,
until such time as a Defaulting Lender has funded its Pro Rata Share of a Loan
(other than a Swingline Loan but including a Mandatory Borrowing) or draw on a
Letter of Credit which was previously a Non Pro Rata Loan, or all other Lenders
have received payment in full (whether by repayment or prepayment) of the
principal and interest due in respect of such Non Pro Rata Loan, all of the
Obligations owing to such Defaulting Lender hereunder shall be subordinated in
right of payment, as provided in the following sentence, to the prior payment in
full of all principal, interest and fees in respect of all Non Pro Rata Loans in
which the Defaulting Lender has not funded its Pro Rata Share (such principal,
interest and fees being referred to as "Senior Loans"). All amounts paid by
Borrower and otherwise due to be applied to the Obligations owing to the
Defaulting Lender pursuant to the terms hereof shall be distributed by Agent to
the other Lenders in accordance with their respective Pro Rata Shares
(recalculated for purposes hereof to exclude the Defaulting Lender's
Commitment), until all Senior Loans have been paid in full. This provision
governs only the relationship among Agent, each Defaulting Lender, and the other
Lenders; nothing hereunder shall limit the obligation of Borrower to repay all
Loans in accordance with the terms of this Agreement. The provisions of this
section shall apply and be effective regardless of whether an Event of Default
occurs and is then continuing, and notwithstanding (i) any other provision of
this Agreement to the contrary, (ii) any instruction of Borrower as to its
desired application of payments or (iii) the suspension of such Defaulting
Lender's right to vote on matters which are subject to the consent or approval
of Requisite
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Lenders, Supermajority Lenders, or all Lenders. No Unused Facility Fee shall
accrue in favor of, or be payable to, such Defaulting Lender from the date of
any failure to fund Loans (other than Swingline Loans but including Loans made
pursuant to Mandatory Borrowings) or draws on Letters of Credit or reimburse
Agent for any Liabilities and Costs as herein provided until such failure has
been cured and, without limitation of other provisions set forth in this
Agreement, Agent shall be entitled to (i) collect interest from such Lender for
the period from the date on which the payment was due until the date on which
the payment is made at the Federal Funds Rate for each day during such period,
(ii) withhold or set off, and to apply to the payment of the defaulted amount
and any related interest, any amounts to be paid to such Defaulting Lender under
this Agreement, and (iii) bring an action or suit against such Defaulting Lender
in a court of competent jurisdiction to recover the defaulted amount and any
related interest. In addition, the Defaulting Lender shall indemnify, defend and
hold Agent and each of the other Lenders harmless from and against any and all
Liabilities and Costs plus interest thereon at the default rate set forth in the
Loan Documents for funds advanced by Agent or any other Lender on account of the
Defaulting Lender which they may sustain or incur by reason of or as a direct
consequence of the Defaulting Lender's failure or refusal to abide by its
obligations under this Agreement.
11.05 Rights, Exculpation, Etc. Neither Agent, any
Affiliate of Agent, nor any of their respective officers, directors, employees,
agents, attorneys or consultants, shall be liable to any Lender for any action
taken or omitted by them hereunder or under any of the Loan Documents, or in
connection herewith or therewith, except that Agent shall be liable for its
gross negligence or willful misconduct in the performance of its express
obligations hereunder. In the absence of gross negligence or willful misconduct,
Agent shall not be liable for any apportionment or distribution of payments made
by it in good faith pursuant to Section 11.04. Agent shall not be responsible to
any Lender for any recitals, statements, representations or warranties herein or
for the execution, effectiveness, genuineness, validity, enforceability,
collectibility or sufficiency of this Agreement, or any of the other Loan
Documents, or any of the transactions contemplated hereby and thereby; or for
the financial condition of the REIT, Borrower, any Subsidiary, any Investment
Affiliate, or any Agreement Party. Agent shall not be required to make any
inquiry concerning either the performance or observance of any of the terms,
provisions or conditions of this Agreement or any of the Loan Documents or the
financial condition of the REIT, Borrower, any Subsidiary, any Investment
Affiliate, or any Agreement Party, or the existence or possible existence of any
Unmatured Event of Default or Event of Default. Agent may at any time request
instructions from Lenders with respect to any actions or approvals which, by the
terms of this Agreement or of any of the Loan Documents, Agent is permitted or
required to take or to grant without instructions from any Lenders, and if such
instructions are promptly requested, Agent shall be absolutely entitled to
refrain from taking any action or to withhold any approval and shall not be
under any liability whatsoever to any Person for refraining from taking any
action or withholding any approval under any of the Loan Documents until it
shall have received such instructions from Requisite Lenders or Supermajority
Lenders, as the case may be. Without limiting the foregoing, no Lender shall
have any right of action whatsoever against Agent as a result of Agent acting or
refraining from acting under this Agreement or any of the other Loan Documents
in accordance with the instructions of Requisite Lenders, Supermajority Lenders
or, where applicable, all Lenders. Agent shall promptly notify each Lender at
any time that the Requisite Lenders or Supermajority Lenders, as the case may
be, have instructed Agent to act or refrain from acting pursuant hereto.
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11.06 Reliance. Agent shall be entitled to rely upon any
written notices, statements, certificates, orders or other documents, telecopies
or any telephone message believed by it in good faith to be genuine and correct
and to have been signed, sent or made by the proper Person, and with respect to
all matters pertaining to this Agreement or any of the Loan Documents and its
duties hereunder or thereunder, upon advice of legal counsel (including counsel
for Borrower), independent public accountant and other experts selected by it.
11.07 Indemnification. To the extent that Agent or Issuing
Lender is not reimbursed and indemnified by Borrower, Lenders will reimburse,
within ten (10) days after notice from Agent, and indemnify Agent and Issuing
Lender for and against any and all Liabilities and Costs which may be imposed
on, incurred by, or asserted against it (in its capacity as Agent or Issuing
Lender) in any way relating to or arising out of this Agreement or any of the
other Loan Documents or any action taken or omitted by Agent or Issuing Lender
(in its capacity as Agent or Issuing Lender) under this Agreement or any of the
other Loan Documents, in proportion to each Lender's Pro Rata Share, provided
that no Lender shall be liable for any portion of such Liabilities and Costs
resulting from Agent's or Issuing Lender's gross negligence or willful
misconduct, bad faith or fraud. The obligations of Lenders under this Section
11.07 shall survive the payment in full of all Obligations and the termination
of this Agreement. In the event that after payment and distribution of any
amount by Agent to Lenders, any Lender or third party, including Borrower, any
creditor of Borrower or a trustee in bankruptcy, recovers from Agent any amount
found to have been wrongfully paid to Agent or disbursed by Agent to Lenders,
then Lenders, in proportion to their respective Pro Rata Shares, shall reimburse
Agent for all such amounts. Notwithstanding the foregoing, Agent shall not be
obligated to advance Liabilities and Costs and may require the deposit by each
Lender of its Pro Rata Share of any material Liabilities and Costs anticipated
by Agent before they are incurred or made payable.
11.08 Agent Individually. With respect to its Pro Rata
Share of the Commitments hereunder and the Loans made by it, Agent shall have
and may exercise the same rights and powers hereunder and is subject to the same
obligations and liabilities as and to the extent set forth herein for any other
Lender. The terms "Lenders", "Requisite Lenders", "Supermajority Lenders", or
any similar terms may include Agent in its individual capacity as a Lender, one
of the Requisite Lenders or one of the Supermajority Lenders, but Requisite
Lenders and Supermajority Lenders shall not include Agent solely in its capacity
as Agent. Agent and its Affiliates may accept deposits from, lend money to and
generally engage in any kind of banking, trust or other business with Borrower
or any of its Subsidiaries or Affiliates as if it were not acting as Agent
pursuant hereto.
11.09 Successor Agent; Resignation of Agent; Removal of
Agent
(a) Agent may resign from the performance of all its
functions and duties hereunder at any time by giving at least thirty (30)
Business Days prior written notice to Lenders and Borrower. For good cause, by a
determination of all the Lenders (excluding for such determination the Agent in
its capacity as a Lender), the Agent may be removed at any time by giving at
least thirty (30) Business Days prior written notice to Agent and Borrower. Such
resignation or removal shall take effect upon the acceptance by a successor
Agent of appointment pursuant to clauses (b) and (c) below or as otherwise
provided below.
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(b) Upon any such notice of resignation by or removal of
Agent, Requisite Lenders shall appoint a successor Agent with the consent of
Borrower, which shall not be unreasonably withheld or delayed (and approval from
Borrower shall not be required upon the occurrence and during the continuance of
an Event of Default). Any successor Agent must be a bank (i) the senior debt
obligations of which (or such Bank's parent's senior debt obligations) are rated
not less than Baa-1 by Xxxxx'x Inc. or a comparable rating by a rating agency
acceptable to Requisite Lenders, (ii) which has total assets in excess of Ten
Billion Dollars ($10,000,000,000) and (iii) which is a Lender as of the date of
such succession holding a Commitment without participants equal to at least ten
percent (10%) of the Facility. Agent hereby agrees to remit to any successor
Agent, a pro rata portion of any annual agent's fee received by Agent, in
advance, for the one-year period covered by such agent's fee based upon the
portion of such year then remaining.
(c) If a successor Agent shall not have been so appointed
within said thirty (30) Business Day period, the retiring or removed Agent, with
the consent of Borrower, which may not be unreasonably withheld or delayed (and
which approval from Borrower shall not be required upon the occurrence and
during the continuance of an Event of Default), shall then appoint a successor
Agent who shall meet the requirements described in subsection (b) above and who
shall serve as Agent until such time, if any, as Requisite Lenders, with the
consent of Borrower, which may not be unreasonably withheld or delayed (and
which approval from Borrower shall not be required upon the occurrence and
during the continuance of an Event of Default), appoint a successor Agent as
provided above.
(d) Any Person succeeding Xxxxx Fargo (or any successor
to Xxxxx Fargo) as Agent hereunder shall also serve as Issuing Lender and
Swingline Lender; provided, however, that the issuer of any Letter of Credit
outstanding at the time of such succession shall retain all of the rights and
protections of Issuing Lender hereunder with respect to such Letter of Credit.
11.10 Consents and Approvals
(a) Each Lender authorizes and directs Agent to enter
into the Loan Documents other than this Agreement for the benefit of Lenders.
Each Lender agrees that any action taken by Agent at the direction or with the
consent of Requisite Lenders or the Supermajority Lenders and any action taken
by Agent not requiring consent by Requisite Lenders, Supermajority Lenders, or
all Lenders in accordance with the provisions of this Agreement or any Loan
Document, and the exercise by Agent at the direction or with the consent of
Requisite Lenders or the Supermajority Lenders of the powers set forth herein or
therein, together with such other powers as are reasonably incidental thereto,
shall be authorized and binding upon all Lenders, except for actions
specifically requiring the approval of all Lenders. All communications from
Agent to Lenders requesting Lenders' determination, consent, approval or
disapproval (i) shall be given in the form of a written notice to each Lender,
(ii) shall be accompanied by a description of the matter or item as to which
such determination, approval, consent or disapproval is requested, or shall
advise each Lender where such matter or item may be inspected, or shall
otherwise describe the matter or issue to be resolved, (iii) shall include, if
reasonably requested by a Lender and to the extent not previously provided to
such Lender, written materials and a summary of all oral information provided to
Agent by Borrower in respect of the matter or issue to be resolved, and (iv)
shall include Agent's recommended course of action or determination in respect
thereof. Each Lender shall reply promptly, but in any event
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within fifteen (15) Business Days after receipt of the request therefor from
Agent (the "Lender Reply Period"). Unless a Lender shall give written notice to
Agent that it objects to the recommendation or determination of Agent (together
with a written explanation of the reasons behind such objection) within the
Lender Reply Period, such Lender shall be deemed to have approved of or
consented to such recommendation or determination. With respect to decisions
requiring the approval of Requisite Lenders, Supermajority Lenders or all
Lenders, Agent shall submit its recommendation or determination for approval of
or consent to such recommendation or determination to all Lenders and upon
receiving the required approval or consent shall follow the course of action or
determination recommended to Lenders by Agent or such other course of action
recommended by Requisite Lenders or Supermajority Lenders, as the case may be,
and each non-responding Lender shall be deemed to have concurred with such
recommended course of action. The following amendments, modifications or waivers
shall require the consent of the Requisite Lenders:
(i) Waiver of Sections 8.01(h) or 8.02(f);
(ii) Acceleration following an Event of Default pursuant
to Section 10.02(a) (except for any Event of Default pursuant to
Sections 10.01(g) or 10.01(h)) or rescission of such acceleration
pursuant to Section 10.03;
(iii) Approval of the exercise of remedies requiring the
consent of the Requisite Lenders under Section 10.02(a);
(iv) Appointment of a successor Agent in accordance with
Sections 11.09(b) and (c);
(v) Disapproval of any Property as a Qualifying
Unencumbered Property.
(b) Except for amendments, modifications and waivers
requiring the consent of all Lenders pursuant to Section 12.05(b) hereof, the
consent of the Supermajority Lenders shall be required to amend or modify
Sections 9.01, 9.02, 9.03, 9.04, 9.05 or 10.01(a) or to waive any requirement
thereof or to amend or modify this Section 11.10(b).
(c) In addition to the required consents or approvals
referred to in Section 12.05, Agent may at any time request instructions from
Requisite Lenders with respect to any actions or approvals which, by the terms
of this Agreement or of any of the Loan Documents, Agent is permitted or
required to take or to grant without instructions from any Lenders, and if such
instructions are promptly requested, Agent shall be absolutely entitled to
refrain from taking any action or to withhold any approval and shall not be
under any liability whatsoever to any Person for refraining from taking any
action or withholding any approval under any of the Loan Documents until it
shall have received such instructions from Requisite Lenders. Without limiting
the foregoing, no Lender shall have any right of action whatsoever against Agent
as a result of Agent acting or refraining from acting under this Agreement, any
of the other Loan Documents in accordance with the instructions of Requisite
Lenders or, where applicable, Supermajority Lenders or all Lenders. Agent shall
promptly notify each Lender at any time that the Requisite Lenders or
Supermajority Lenders have instructed Agent to act or refrain from acting
pursuant hereto.
11.11 [Intentionally Omitted]
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11.12 [Intentionally Omitted]
11.13 Assignments and Participations
(a) Subject to the provisions of Section 11.13(j), after
first obtaining the approval of Agent and Borrower, which approval will not be
unreasonably withheld (and which approval from Borrower shall not be required
upon the occurrence and during the continuance of an Event of Default), each
Lender may assign to one or more Eligible Assignees all or a portion of its
rights and obligations under this Agreement in accordance with the provisions of
this Section (including without limitation all or a portion of its Commitment
and the Loans owing to it); provided, however, that (i) each such assignment
shall be of a constant, and not a varying, percentage of the assigning Lender's
rights and obligations under this Agreement and the assignment shall cover the
same percentage of such Lender's Commitment and Loans, (ii) unless Agent and
Borrower otherwise consent (which consent of Borrower shall not be required upon
the occurrence and during the continuance of an Event of Default), the aggregate
amount of the Commitment of the assigning Lender being assigned to an Eligible
Assignee that is not already a Lender hereunder (provided such Lender was also a
Lender on the Closing Date) pursuant to each such assignment shall in no event
be less than Five Million Dollars ($5,000,000) and shall be an integral multiple
of One Million Dollars ($1,000,000), (iii) the parties to each such assignment
shall execute and deliver to Agent, for its approval and acceptance, an
Assignment and Assumption and (iv) Agent shall receive from the assignor or
assignors for its sole account a processing fee of Three Thousand Dollars
($3,000). Upon such execution, delivery, approval and acceptance, and upon the
effective date specified in the applicable Assignment and Assumption, (A) the
assignee thereunder shall be a party hereto and, to the extent that rights and
obligations hereunder have been validly and effectively assigned to it pursuant
to such Assignment and Assumption, have the rights and obligations of a Lender
hereunder and (B) the Lender-assignor thereunder shall, to the extent that
rights and obligations hereunder have been validly and effectively assigned by
it pursuant to such Assignment and Assumption, relinquish its rights and be
released from its obligations under this Agreement.
(b) By executing and delivering an Assignment and
Assumption, the Lender-assignor thereunder and the assignee thereunder confirm
to and agree with each other and the other parties hereto as follows: (i) other
than as provided in such Assignment and Assumption, such assigning Lender makes
no representation or warranty and assumes no responsibility with respect to any
statements, warranties or representations made in or in connection with this
Agreement or any other Loan Document or the execution, legality, validity,
enforceability, genuineness, sufficiency or value of this Agreement or any other
Loan Document or any other instrument or document furnished pursuant hereto;
(ii) such assigning Lender makes no representation or warranty and assumes no
responsibility with respect to the financial condition of the REIT, Borrower,
any Subsidiary, any Investment Affiliate, or any Agreement Party or the
performance or observance by the REIT, Borrower, any Subsidiary, any Investment
Affiliate, or any Agreement Party of any of their respective obligations under
any Loan Document or any other instrument or document furnished pursuant hereto;
(iii) such assignee confirms that it has received a copy of this Agreement,
together with copies of the financial statements referred to in Article VI or
delivered pursuant to Article VI to the date of such assignment and such other
Loan Documents and other documents and information as it has deemed appropriate
to make its own credit analysis and decision to enter into such Assignment and
Assumption; (iv) such assignee will, independently and without reliance upon
Agent, such
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assigning Lender or any other Lender and based on such documents and information
as it shall deem appropriate at the time, continue to make its own credit
decisions in taking or not taking action under this Agreement; (v) such assignee
appoints and authorizes Agent to take such action as Agent on its behalf and to
exercise such powers under this Agreement and the other Loan Documents as are
delegated to Agent by the terms hereof and thereof, together with such powers as
are reasonably incidental thereto; and (vi) such assignee agrees that it will
perform in accordance with their terms all of the obligations which by the terms
of this Agreement are required to be performed by it as a Lender.
(c) Agent shall maintain at its address referred to on
the counterpart signature pages hereof a copy of each Assignment and Assumption
delivered to and accepted by it and shall record the names and addresses of each
Lender and the Commitment of, and principal amount of the Loans owing to, such
Lender from time to time. Borrower, Agent and Lenders may treat each Person
whose name is so recorded as a Lender hereunder for all purposes of this
Agreement.
(d) Upon its receipt of an Assignment and Assumption
executed by an assigning Lender and an assignee, Agent shall, if such Assignment
and Assumption has been properly completed and is in substantially the form of
Exhibit A, (i) accept such Assignment and Assumption, (ii) record the
information contained therein and (iii) give prompt notice thereof to Borrower.
Upon request, Borrower will execute and deliver to Agent an appropriate
replacement promissory note or replacement promissory notes in favor of each
assignee (and assignor, if such assignor is retaining a portion of its
Commitment and Loans) reflecting such assignee's (and assignor's) Pro Rata
Share(s) of the Facility. Upon execution and delivery of such replacement
promissory notes, the original promissory note or notes evidencing all or a
portion of the Commitments and Loans being assigned shall be canceled and
returned to Borrower.
(e) Each Lender may sell participations to one or more
banks, finance companies, insurance or other entities in or to all or a portion
of its rights and obligations under this Agreement (including without limitation
all or a portion of its Commitment and the Loans owing to it); provided,
however, that (i) such Lender's obligations under this Agreement (including
without limitation its Commitment to Borrower hereunder) shall remain unchanged,
(ii) such Lender shall remain solely responsible to the other parties hereto for
the performance of such obligations, (iii) Borrower, Agent and the other Lenders
shall continue to deal solely and directly with such Lender in connection with
such Lender's rights and obligations under this Agreement and with regard to any
and all payments to be made under this Agreement and (iv) the holder of any such
participation shall not be entitled to voting rights under this Agreement except
that such Participant may have the contractual right in the applicable
participation agreement to prevent (A) increases in the Facility, (B) extensions
of the Maturity Date (except pursuant to Article III hereof), (C) decreases in
the interest rates described in this Agreement, and (D) a release of the REIT
Guaranty.
(f) Borrower will use reasonable efforts to cooperate
with Agent and Lenders in connection with the assignment of interests under this
Agreement or the sale of participations herein.
(g) 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,
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including Section 11.13, 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. To facilitate any
such pledge or assignment, Agent shall, at the request of such Lender, enter
into a letter agreement with the Federal Reserve Bank in, or substantially in,
the form of the exhibit to Appendix C to the Federal Reserve Bank of New York
Operating Circular No 12.
(h) Anything in this Agreement to the contrary
notwithstanding, any Lender may assign all or any portion of its rights and
obligations under this Agreement to a Lender Affiliate of such Lender without
first obtaining the approval of Agent and Borrower, provided that (i) at the
time of such assignment such Lender is not a Defaulting Lender, (ii) such Lender
gives Agent and Borrower at least fifteen (15) days prior written notice of any
such assignment; (iii) the parties to each such assignment execute and deliver
to Agent an Assignment and Assumption, and (iv) Agent receives from assignor for
its sole account a processing fee of Three Thousand Dollars ($3,000).
(i) No Lender shall be permitted to assign, or sell a
participation interest in, all or any portion of its rights and obligations
under this Agreement to Borrower or any Affiliate of Borrower.
(j) Anything in this Agreement to the contrary
notwithstanding, so long as no Event of Default shall have occurred and be
continuing, no Lender shall be permitted to enter into an assignment of its
rights and obligations hereunder which would result in such Lender holding a
Commitment of less than Ten Million Dollars ($10,000,000). In the event Agent
ceases to hold a Commitment of less than ten percent (10%) of the Facility,
Agent shall resign from the performance of all of its functions and duties
hereunder; provided, however, that no such resignation shall be required during
the continuance of an Event of Default.
11.14 Ratable Sharing. Subject to Sections 11.03 and 11.04,
Lenders agree among themselves that (i) with respect to all amounts received by
them which are applicable to the payment of the Obligations, equitable
adjustment will be made so that, in effect, all such amounts will be shared
among them ratably in accordance with their Pro Rata Shares, whether received by
voluntary payment, by the exercise of the right of set-off or banker's lien, by
counterclaim or cross action or by the enforcement of any or all of the
Obligations, (ii) if any of them shall by voluntary payment or by the exercise
of any right of counterclaim, set-off, banker's lien or otherwise, receive
payment of a proportion of the aggregate amount of the Obligations held by it
which is greater than its Pro Rata Share of the payments on account of the
Obligations, the one receiving such excess payment shall purchase, without
recourse or warranty, an undivided interest and participation (which it shall be
deemed to have done simultaneously upon the receipt of such payment) in such
Obligations owed to the others so that all such recoveries with respect to such
Obligations shall be applied ratably in accordance with their Pro Rata Shares;
provided, that if all or part of such excess payment received by the purchasing
party is thereafter recovered from it, those purchases shall be rescinded and
the purchase prices paid for such participations shall be returned to that party
to the extent necessary to adjust for such recovery, but without interest except
to the extent the purchasing party is required to pay interest in connection
with such recovery. Borrower agrees that any Lender so purchasing a
participation from another Lender pursuant to this Section 11.14 may, to the
fullest extent permitted by law,
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exercise all its rights of payment (including, subject to Section 12.04, the
right of set-off) with respect to such participation as fully as if such Lender
were the direct creditor of Borrower in the amount of such participation.
11.15 Delivery of Documents. Agent shall as soon as
reasonably practicable distribute to each Lender at its primary address set
forth on the appropriate counterpart signature page hereof or at such other
address as a Lender may request in writing, (i) all documents to which such
Lender is a party or of which such Lender is a beneficiary and (ii) all
documents of which Agent receives copies from Borrower for distribution to
Lenders pursuant to Sections 6.01 and 12.07. In addition, within ten (10)
Business Days after receipt of a request in writing from a Lender for written
information or documents provided by or prepared by Borrower, the REIT or any
Agreement Party, Agent shall deliver such written information or documents to
such requesting Lender if Agent has possession of such written information or
documents in its capacity as Agent or as a Lender.
11.16 Notice of Events of Default. Except as expressly
provided in this Section 11.16, Agent shall not be deemed to have knowledge or
notice of the occurrence of any Unmatured Event of Default or Event of Default
(other than nonpayment of principal of or interest on the Loans) unless Agent
has received notice in writing from a Lender or Borrower referring to this
Agreement or the other Loan Documents, describing such event or condition and
expressly stating that such notice is a notice of an Unmatured Event of Default
or Event of Default. Should Agent receive such notice of the occurrence of an
Unmatured Event of Default or Event of Default, or should Agent send Borrower a
notice of Unmatured Event of Default or Event of Default, Agent shall promptly
give notice thereof to each Lender.
ARTICLE XII.
MISCELLANEOUS
12.01 Expenses
(a) Generally. Borrower agrees, within thirty (30) days
after receipt of a written notice from the Agent, to pay or reimburse Agent for
all of Agent's reasonable costs and expenses incurred by Agent at any time
(whether prior to, on or after the date of this Agreement) in connection with:
(A) the negotiation, preparation and execution of this Agreement and the other
Loan Documents and any amendments or waivers with respect hereto requested by
Borrower, including, without limitation, the reasonable fees, expenses and
disbursements of Agent's outside counsel incurred in connection therewith; (B)
the making of the Loans and (C) the collection or enforcement by Agent of any of
the Obligations, including, without limitation, reasonable attorneys' fees and
costs incurred in connection therewith.
(b) After Event of Default. Borrower further agrees to
pay, or reimburse Agent and Lenders, for all reasonable costs and expenses,
including without limitation reasonable attorneys' fees and disbursements
incurred by Agent or Lenders after the occurrence of an Event of Default (i) in
enforcing any Obligation or exercising or enforcing any other right or remedy
available by reason of such Event of Default; (ii) in connection with any
refinancing or restructuring of the credit arrangements provided under this
Agreement in the nature of a "work-out" or in any insolvency or bankruptcy
proceeding; (iii) in commencing, defending or intervening in any litigation or
in filing a petition, complaint, answer, motion or other pleadings
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in any legal proceeding relating to Borrower, the REIT or any Agreement Party
and related to or arising out of the transactions contemplated hereby; (iv) in
taking any other action in or with respect to any suit or proceeding (whether in
bankruptcy or otherwise); (v) in protecting, preserving, collecting, leasing,
selling, taking possession of, or liquidating any such collateral; or (vi)
attempting to enforce or enforcing any rights under the Loan Documents;
provided, however, that the attorneys' fees and disbursements for which Borrower
is obligated under this subsection (b) shall be limited to the reasonable
non-duplicative fees and disbursements of counsel for Agent and counsel for all
Lenders as a group. For purposes of this Section 12.01(b), (i) counsel for Agent
shall mean a single outside law firm representing Agent plus any additional law
firms providing special local law representation in connection with the
enforcement of the Loan Documents, and (ii) counsel for all Lenders as a group
shall mean a single outside law firm representing such Lenders as a group.
12.02 Indemnity
(a) Generally. Borrower shall indemnify and defend Agent,
Swingline Lender, Issuing Lender and each Lender and their respective
affiliates, participants, officers, directors, employees and agents (each an
"Indemnitee") against, and shall hold each such Indemnitee harmless from, any
and all losses, damages (whether general, punitive or otherwise), liabilities,
claims, causes of action (whether legal, equitable or administrative),
judgments, court costs and legal or other expenses (including reasonable
attorneys' fees) which such Indemnitee may suffer or incur: (i) in connection
with claims made by third parties against such Indemnitee for losses or damages
suffered by such third party as a result of (A) such Indemnitee's performance of
this Agreement or any of the other Loan Documents, including without limitation
such Indemnitee's exercise or failure to exercise any rights, remedies or powers
in connection with this Agreement or any of the other Loan Documents or (B) the
failure by Borrower, the REIT or any Agreement Party to perform any of their
respective obligations under this Agreement or any of the other Loan Documents
as and when required hereby or thereby, including without limitation any failure
of any representation or warranty of Borrower, the REIT or any Agreement Party
to be true and correct; (ii) in connection with any claim or cause of action of
any kind by any Person to the effect that such Indemnitee is in any way
responsible or liable for any act or omission by Borrower, the REIT or any
Agreement Party, whether on account of any theory of derivative liability or
otherwise, (iii) in connection with the past, present or future environmental
condition of any Property owned by Borrower, the REIT, Subsidiary or any
Agreement Party, the presence of asbestos-containing materials at any such
Property, the presence of Contaminants in groundwater at any such Property, or
the Release or threatened Release of any Contaminant into the environment from
any such Property; or (iv) in connection with any claim or cause of action of
any kind by any Person which would have the effect of denying such Indemnitee
the full benefit or protection of any provision of this Agreement or any of the
other Loan Documents.
(b) ERISA. Without limitation of the provisions of
subsection (a) above, Borrower shall indemnify and hold each Indemnitee free and
harmless from and against all loss, costs (including reasonable attorneys' fees
and expenses), expenses, taxes, and damages (including consequential damages)
such Indemnitee may suffer or incur by reason of the investigation, defense and
settlement of claims and in obtaining any prohibited transaction exemption under
ERISA or the Internal Revenue Code necessary in such Indemnitee's reasonable
judgment by reason of the inaccuracy of the representations and warranties set
forth
83
in the first paragraph of Section 5.01(s) or a breach of the provisions set
forth in the last paragraph of Section 8.01(f).
(c) Exceptions; Limitations. Notwithstanding anything to
the contrary set forth in this Section 12.02, Borrower shall have no obligation
to any Indemnitee hereunder with respect to (i) any intentional tort, fraud or
act of gross negligence or bad faith which any Indemnitee is personally
determined by the judgment of a court of competent jurisdiction (sustained on
appeal, if any) to have committed, (ii) any liability of such Indemnitee to any
third party based upon contractual obligations of such Indemnitee owing to such
third party which are not expressly set forth in the Loan Documents or (iii)
violations of Environmental Laws relating to a Property which are caused by the
act or omission of such Indemnitee after such Indemnitee takes possession of
such Property and which would not have occurred if such Indemnitee had exercised
reasonable care under the circumstances. In addition, the indemnification set
forth in this Section 12.02 in favor of any officer, director, partner, employee
or agent of Agent, Swingline Lender, Issuing or any Lender shall be solely in
their respective capacities as such officer, director, partner, employee or
agent. Such indemnification in favor of any affiliate of Agent, Swingline
Lender, Issuing Lender or any Lender shall be solely in its capacity as the
provider of services to Agent, Swingline Lender, Issuing Lender or such Lender
in connection with this Agreement, and such indemnification in favor of any
participant of Agent or any Lender shall be solely in its capacity as a
participant in the Commitments and the Loans.
(d) Payment; Survival. Borrower shall pay any amount
owing under this Section 12.02 within thirty (30) days after written demand
therefor by the applicable Indemnitee together with reasonable supporting
documentation therefor. The indemnity set forth in this Section 12.02 shall
survive the payment of all amounts payable pursuant to, and secured by, this
Agreement and the other Loan Documents. Payment by any Indemnitee shall not be a
condition precedent to the obligations of Borrower under this Section 12.02. To
the extent that any indemnification obligation set forth in this Section 12.02
may be unenforceable because it is violative of any law or public policy,
Borrower shall contribute the maximum portion which it is permitted to pay and
satisfy under applicable law, to the payment and satisfaction of the applicable
indemnified matter.
12.03 Change in Accounting Principles. Except as otherwise
provided herein, if any changes in accounting principles from those used in the
preparation of the most recent financial statements delivered to Agent pursuant
to the terms hereof are hereafter required or permitted by the rules,
regulations, pronouncements and opinions of the Financial Accounting Standards
Board or the American Institute of Certified Public Accountants (or successors
thereto or agencies with similar functions) and are adopted by the REIT,
Borrower, any Subsidiary, any Investment Affiliate, or any Agreement Party with
the agreement of its independent certified public accountants and such changes
result in a change in the method of calculation of any of the financial
covenants, standards or terms found herein, the parties hereto agree to enter
into negotiations in order to amend such provisions so as to equitably reflect
such changes with the desired result that the criteria for evaluating the
financial condition of the REIT, on a consolidated basis, shall be the same
after such changes as if such changes had not been made; provided, however, that
no change in GAAP that would affect the method of calculation of any of the
financial covenants, standards or terms shall be given effect in such
calculations until such provisions are amended, in a manner satisfactory to
Agent and all Lenders, to so reflect such change in accounting principles.
84
12.04 Setoff. In addition to any Liens granted to Agent and
any rights now or hereafter granted under applicable law and not by way of
limitation of any such Lien or rights, upon the occurrence and during the
continuance of any Event of Default, Agent and each Lender are hereby authorized
by Borrower at any time or from time to time, with concurrent notice to
Borrower, or to any other Person (any such notice being hereby expressly waived)
to set off and to appropriate and to apply any and all deposits (general or
special, including, but not limited to, indebtedness evidenced by certificates
of deposit, whether matured or unmatured but not including trust accounts) and
any other indebtedness at any time held or owing by Agent or such Lender solely
to or for the credit or the account of Borrower against and on account of the
Obligations of Borrower to Agent or such Lender including but not limited to all
Loans and all claims of any nature or description arising out of or connected
with this Agreement or any of the other Loan Documents, irrespective of whether
or not (a) Agent or such Lender shall have made any demand hereunder or (b)
Agent shall have declared the principal of and interest on the Loans and other
amounts due hereunder to be due and payable as permitted by Article XI and
although said obligations and liabilities, or any of them, may be contingent or
unmatured.
12.05 Amendments and Waivers. No amendment or modification
of any provision of this Agreement shall be effective without the written
agreement of Requisite Lenders (after notice to all Lenders) as provided in
Section 11.10(a) and Borrower provided that the agreement of Requisite Lenders
shall not be required for amendments or modifications that are purely of a
clerical nature or that correct a manifest error and no termination or waiver of
any such provision of this Agreement (including without limitation any waiver of
an Event of Default which does not specifically require the consent of all
Lenders), or consent to any departure by Borrower therefrom, shall in any event
be effective without the written concurrence of Requisite Lenders (after notice
to all Lenders) as provided in Section 11.10(a), which Requisite Lenders shall
have the right to grant or withhold at their sole discretion, except that the
amendments, modifications or waivers specified in Section 11.10(b) shall require
the consent of the Supermajority Lenders and the following amendments,
modifications or waivers shall require the consent of all Lenders (other than
Section 12.05(j) which shall require the consent of all Lenders other than
Agent):
(a) Increasing the Commitments or any Lender's
Commitments (excluding any increase as a result of an assignment of commitments
under Section 11.13);
(b) Changing the principal amount or final maturity of
the Loans;
(c) Reducing or increasing the interest rates applicable
to the Loans (other than Swingline Loans);
(d) Reducing the rates on which fees payable pursuant
hereto are determined;
(e) Forgiving or delaying any amount payable under
Article II (other than late fees);
(f) Changing the definition of "Requisite Lenders," "Loan
Availability," "Supermajority Lenders," or "Pro Rata Shares";
(g) Changing any provision contained in Section 12.05;
85
(h) Releasing any obligor under any Loan Document, unless
such release is otherwise required by the terms of this Agreement or any other
Loan Document;
(a) Issuing a Letter of Credit for a term extending
beyond the Maturity Date;
(i) Removal of Agent for good cause in accordance with
Section 11.09(a); and
(j) Modifying or waiving any other provision herein which
specifically requires the consent of all Lenders.
Notwithstanding anything to the contrary contained in this Agreement, Borrower
shall have no right to consent to any amendment, modification, termination or
waiver of any provision of Article XI hereof; provided, however, that no
amendment, modification, termination or waiver of Section 11.09(b), 11.09(c),
11.10(a), or 11.13 (except subsection (i) thereof) which has an adverse effect
on Borrower or Borrower's rights hereunder shall be effective without the
written concurrence of Borrower. Agent and Lenders further acknowledge and agree
that the remaining provisions of Article XI are intended to and shall continue
to address only the rights and obligations of Agent and Lenders amongst each
other and do not and shall not impose obligations or restrictions upon Borrower
or result in any way in the loss of any rights, claims or defenses of Borrower.
No amendment, modification, termination or waiver of any provision of Article XI
hereof or any other provision referring to any Agent, Swingline Lender or
Issuing Lender shall be effective without the written concurrence of the Agent,
Swingline Lender or Issuing Lender, as applicable. Any waiver or consent shall
be effective only in the specific instance and for the specific purpose for
which it was given. No notice to or demand on Borrower in any case shall entitle
Borrower to any other further notice or demand in similar or other
circumstances. Any amendment, modification, termination, waiver or consent
effected in accordance with this Section shall be binding on each assignee,
transferee or recipient of Agent's powers, functions or duties or any Lender's
Commitment under this Agreement or the Loans at the time outstanding.
12.06 Independence of Covenants. All covenants hereunder
shall be given independent effect so that if a particular action or condition is
not permitted by any of such covenants, the fact that it would be permitted by
an exception to, or be otherwise within the limitations of, another covenant
shall not avoid the occurrence of an Event of Default or Unmatured Event of
Default if such action is taken or condition exists.
12.07 Notices and Delivery. Unless otherwise specifically
provided herein, any consent, notice or other communication herein required or
permitted to be given shall be in writing and may be personally served,
telecopied or sent by courier service or United States mail and shall be deemed
to have been given when delivered in person or by courier service, upon receipt
of a telecopy or if deposited in the United States mail (registered or
certified, with postage prepaid and properly addressed) upon receipt or refusal
to accept delivery. Notices to Agent, Swingline Lender or Issuing Lender
pursuant to Article II shall not be effective until received by Agent, Swingline
Lender or Issuing Lender, as applicable. For the purposes hereof, the addresses
of the parties hereto (until notice of a change thereof is delivered as provided
in this Section 12.07) shall be as set forth below each party's name on the
signature pages hereof, or, as to each party, at such other address as may be
designated by such party in a written notice
86
to all of the other parties. All deliveries to be made to Agent for distribution
to the Lenders shall be made to Agent at the addresses specified for notice on
the signature page hereto and, in addition, a sufficient number of copies of
each such delivery shall be delivered to Agent for delivery to each Lender at
the address specified for deliveries on the signature page hereto or such other
address as may be designated by Agent or Lenders in a written notice.
12.08 Survival of Warranties, Indemnities and Agreements.
All agreements, representations, warranties and indemnities made or given herein
or pursuant hereto shall survive the execution and delivery of this Agreement
and the other Loan Documents and the making and repayment of the Loans hereunder
and such indemnities shall survive termination hereof.
12.09 Failure or Indulgence Not Waiver; Remedies
Cumulative. Except as otherwise expressly provided in this Agreement or any
other Loan Document, no failure or delay on the part of Agent, Swingline Lender,
Issuing Lender or any Lender in the exercise of any power, right or privilege
under any of the Loan Documents shall impair such power, right or privilege or
be construed to be a waiver of any default or acquiescence therein nor shall any
single or partial exercise of any such power, right or privilege preclude other
or further exercise thereof or of any other right, power or privilege. All
rights and remedies existing under the Loan Documents are cumulative to and not
exclusive of any rights or remedies otherwise available.
12.10 Marshalling; Recourse to Security; Payments Set
Aside. Neither any Lender, Swingline Lender, Issuing Lender nor Agent shall be
under any obligation to marshal any assets in favor of Borrower or any other
party or against or in payment of any or all of the Obligations. Recourse to
security shall not be required at any time. To the extent that Borrower makes a
payment or payments to Agent, Swingline Lender, Issuing Lender or the Lenders or
Agent, Swingline Lender, Issuing Lender or the Lenders enforce their Liens or
exercise their rights of set off, and such payment or payments or the proceeds
of such enforcement or set off or any part thereof are subsequently invalidated,
declared to be fraudulent or preferential, set aside and/or required to be
repaid to a trustee, receiver or any other party under any bankruptcy law, state
or federal law, common law or equitable cause, then to the extent of such
recovery, the Obligations or part thereof originally intended to be satisfied,
and all Liens, rights and remedies therefor, shall be revived and continued in
full force and effect as if such payment had not been made or such enforcement
or set off had not occurred.
12.11 Severability. In case any provision in or obligation
under this Agreement or the other Loan Documents shall be invalid, illegal or
unenforceable in any jurisdiction, the validity, legality and enforceability of
the remaining provisions or obligations, or of such provision or obligation in
any other jurisdiction, shall not in any way be affected or impaired thereby.
12.12 Headings. Section headings in this Agreement are
included herein for convenience of reference only and shall not constitute a
part of this Agreement for any other purpose or be given any substantive effect.
12.13 Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY,
AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF
ILLINOIS.
87
12.14 Limitation of Liability. To the extent permitted by
applicable law, no claim may be made by Borrower, the REIT, any Lender or any
other Person against Agent, Swingline Lender, Issuing Lender or any Lender, or
the affiliates, directors, officers, employees, attorneys or agents of any of
them, for any punitive damages in respect of any claim for breach of contract or
any other theory of liability arising out of or related to the transactions
contemplated by this Agreement, or any act, omission or event occurring in
connection therewith; and Borrower, the REIT, and each Lender hereby waive,
release and agree not to xxx upon any claim for any such damages, whether or not
accrued and whether or not known or suspected to exist in its favor.
12.15 Successors and Assigns. This Agreement and the other
Loan Documents shall be binding upon the parties hereto and their respective
successors and permitted assigns and shall inure to the benefit of the parties
hereto and the successors and permitted assigns of Agent and Lenders. The terms
and provisions of this Agreement shall inure to the benefit of any permitted
assignee or transferee of the Loans and the Commitments of Lenders under this
Agreement, and in the event of such transfer or assignment, the rights and
privileges herein conferred upon Agent and Lenders shall automatically extend to
and be vested in such transferee or assignee, all subject to the terms and
conditions hereof. Borrower's rights or any interest therein hereunder, and
Borrower's duties and obligations hereunder, shall not be assigned (whether
directly, indirectly, by operation of law or otherwise) without the consent of
all Lenders.
12.16 Usury Limitation. Each Loan Document is expressly
limited so that in no contingency or event whatsoever, whether by reason of
error of fact or law, payment, prepayment or advancement of the proceeds of the
Loans, acceleration of maturity of the unpaid principal balance of the Loans, or
otherwise, shall the amount paid or agreed to be paid to Lenders for the use,
forbearance, or retention of money, including any fees or charges collected or
made in connection with the Loans which may be treated as interest under
applicable law, if any, exceed the maximum legal limit (if any such limit is
applicable) under United States federal laws or state laws (to the extent not
preempted by federal law, if any), now or hereafter governing the interest
payable under such Loan Documents. If, from any circumstances whatsoever,
fulfillment of any provision hereof or any of the other Loan Documents at the
time performance of such provision shall be due, shall involve transcending the
limit of validity (if any) prescribed by law which a court of competent
jurisdiction may deem applicable hereto, then ipso facto, the obligation to be
fulfilled shall be reduced to the limit of such validity, and if from any
circumstances Lenders shall ever receive as interest an amount which would
exceed the maximum legal limit (if any such limit is applicable), such amount
which would be excessive interest shall be applied to the reduction of the
unpaid principal balance due under the Loan Documents and not to the payment of
interest or, if necessary, to Borrower. Notwithstanding any other provision of
this Agreement or any of the other Loan Documents, this provision shall control
every other provision of all Loan Documents.
12.17 Confidentiality. Agent, Swingline Lender, Issuing
Lender and Lenders shall use reasonable efforts to assure that any information
about Borrower, the REIT, Subsidiaries and Investment Affiliates (and their
respective Properties) not generally disclosed to the public which is furnished
to Agent, Swingline Lender, Issuing Lender or Lenders pursuant to the provisions
of this Agreement or any of the other Loan Documents is used only for the
purposes of this Agreement and the other Loan Documents and shall not be
divulged to any other
88
Person other than Agent, Swingline Lender, Issuing Lender and Lenders and their
respective affiliates, officers, directors, employees and agents who are
actively and directly participating in the evaluation, administration or
enforcement of the Obligations; provided, however, that nothing herein shall
affect the disclosure of any such information (i) to the extent required by
statute, rule, regulation or judicial process, (ii) to counsel for Agent,
Swingline Lender, Issuing Lender or Lenders or to their accountants, (iii) to
bank examiners and auditors, (iv) to any transferee or participant or
prospective transferee or participant hereunder who agrees to be bound by this
provision, (v) in connection with the enforcement of the rights of Agent,
Swingline Lender, Issuing Lender and Lenders under this Agreement and the other
Loan Documents, or (vi) in connection with any litigation to which Agent,
Swingline Lender, Issuing Lender or any Lender is a party so long as Agent,
Swingline Lender, Issuing Lender or such Lender provides Borrower with prior
written notice of the need for such disclosure and exercises reasonable efforts
to obtain a protective order with respect to such information from the court or
other tribunal before which such litigation is pending.
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 persons 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 communication with a federally authorized tax practitioner under
Section 7525 of the Internal Revenue Code, is not intended to be affected by the
foregoing.
12.18 Consent to Jurisdiction and Service of Process;
Waiver of Jury Trial; Waiver Of Permissive Counterclaims. ALL JUDICIAL
PROCEEDINGS BROUGHT AGAINST BORROWER OR THE REIT WITH RESPECT TO THIS AGREEMENT
OR ANY OTHER LOAN DOCUMENT MAY BE AND ALL JUDICIAL PROCEEDINGS BROUGHT BY
BORROWER OR THE REIT WITH RESPECT TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT
SHALL BE BROUGHT IN ANY STATE OR FEDERAL COURT OF COMPETENT JURISDICTION HAVING
SITUS WITHIN THE BOUNDARIES OF THE FEDERAL COURT DISTRICT OF THE NORTHERN
DISTRICT OF ILLINOIS, AND BY EXECUTION AND DELIVERY OF THIS AGREEMENT, BORROWER
AND THE REIT ACCEPT, FOR ITSELF AND IN CONNECTION WITH ITS PROPERTIES, GENERALLY
AND UNCONDITIONALLY, THE JURISDICTION OF THE AFORESAID COURTS, AND IRREVOCABLY
AGREE TO BE BOUND BY ANY FINAL JUDGMENT RENDERED THEREBY FROM WHICH NO APPEAL
HAS BEEN TAKEN OR IS AVAILABLE. BORROWER AND THE REIT HEREBY DESIGNATE AND
APPOINT XXXXX XXXXXXXX, ESQ., MANUFACTURED HOME COMMUNITIES, INC., XXX XXXXX
XXXXXXXXX XXXXX, XXXXX 000, XXXXXXX, XXXXXXXX 00000, TO RECEIVE ON
89
THEIR BEHALF SERVICE OF ALL PROCESS IN ANY SUCH PROCEEDINGS IN ANY SUCH COURT,
SUCH SERVICE BEING HEREBY ACKNOWLEDGED BY SUCH PERSON TO BE EFFECTIVE AND
BINDING SERVICE IN EVERY RESPECT. SUCH APPOINTMENT SHALL BE REVOCABLE ONLY WITH
AGENT'S PRIOR WRITTEN APPROVAL. BORROWER AND THE REIT IRREVOCABLY CONSENT TO THE
SERVICE OF PROCESS OF ANY OF THE AFOREMENTIONED COURTS IN ANY SUCH ACTION OR
PROCEEDING BY THE MAILING OF COPIES THEREOF BY REGISTERED OR CERTIFIED MAIL,
POSTAGE PREPAID, TO ITS RESPECTIVE NOTICE ADDRESS SPECIFIED ON THE SIGNATURE
PAGES HEREOF, SUCH SERVICE TO BECOME EFFECTIVE UPON RECEIPT. BORROWER, THE REIT,
AGENT AND LENDERS IRREVOCABLY WAIVE (A) TRIAL BY JURY IN ANY ACTION OR
PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, AND (B)
ANY OBJECTION (INCLUDING WITHOUT LIMITATION ANY OBJECTION TO THE LAYING OF VENUE
OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS) WHICH IT MAY NOW OR HEREAFTER
HAVE TO THE BRINGING OF ANY SUCH ACTION OR PROCEEDING WITH RESPECT TO THIS
AGREEMENT OR ANY OTHER LOAN DOCUMENT IN ANY JURISDICTION SET FORTH ABOVE.
NOTHING HEREIN SHALL AFFECT THE RIGHT TO SERVE PROCESS IN ANY OTHER MANNER
PERMITTED BY LAW OR SHALL LIMIT THE RIGHT OF AGENT OR ANY LENDER TO BRING
PROCEEDINGS AGAINST BORROWER IN THE COURTS OF ANY OTHER JURISDICTION. BORROWER
AND THE REIT AGREE THAT THEY WILL NOT ASSERT ANY PERMISSIVE COUNTERCLAIM IN ANY
PROCEEDING BROUGHT BY LENDER WITH RESPECT TO THIS AGREEMENT OR ANY OTHER LOAN
DOCUMENT.
12.19 Counterparts; Effectiveness; Inconsistencies. This
Agreement and any amendments, waivers, consents or supplements may be executed
in counterparts, each of which when so executed and delivered shall be deemed an
original, but all such counterparts together shall constitute but one and the
same instrument. This Agreement shall become effective when Borrower, the
initial Lenders, Swingline Lender, Issuing Lender and Agent have duly executed
and delivered counterpart execution pages of this Agreement to each other
(delivery by Borrower and the REIT to Lenders and by any Lender to Borrower, the
REIT and any other Lender being deemed to have been made by delivery to Agent).
This Agreement and each of the other Loan Documents shall be construed to the
extent reasonable to be consistent one with the other, but to the extent that
the terms and conditions of this Agreement are actually and directly
inconsistent with the terms and conditions of any other Loan Document, this
Agreement shall govern.
12.20 Construction. The parties acknowledge that each party
and its counsel have reviewed and revised this Agreement and that the normal
rule of construction to the effect that any ambiguities are to be resolved
against the drafting party shall not be employed in the interpretation of this
Agreement or any amendments or exhibits hereto.
12.21 Entire Agreement. This Agreement, taken together with
all of the other Loan Documents and all certificates and other documents
delivered by Borrower to Agent in connection herewith, embodies the entire
agreement and supersede all prior agreements, written and oral, relating to the
subject matter hereof.
12.22 Agent's Action for Its Own Protection Only. The
authority herein conferred upon Agent, and any action taken by Agent, to inspect
any Property will be exercised
90
and taken by Agent for its own protection only and may not be relied upon by
Borrower for any purposes whatsoever, and Agent shall not be deemed to have
assumed any responsibility to Borrower with respect to any such action herein
authorized or taken by Agent. Any review, investigation or inspection conducted
by Agent, any consultants retained by Agent or any agent or representative of
Agent in order to verify independently Borrower's satisfaction of any conditions
precedent to the Loans, Borrower's performance of any of the covenants,
agreements and obligations of Borrower under this Agreement, or the validity of
any representations and warranties made by Borrower hereunder (regardless of
whether or not the party conducting such review, investigation or inspection
should have discovered that any of such conditions precedent were not satisfied
or that any such covenants, agreements or obligations were not performed or that
any such representations or warranties were not true), shall not affect (or
constitute a waiver by Agent or Lenders of) (i) any of Borrower's
representations and warranties under this Agreement or Agent's or Lenders'
reliance thereon or (ii) Agent's or Lenders' reliance upon any certifications of
Borrower required under this Agreement or any other facts, information or
reports furnished to Agent and Lenders by Borrower hereunder.
12.23 Lenders' ERISA Covenant. Each Lender, by its
signature hereto or on the applicable Assignment and Assumption, hereby agrees
(a) that on the date any Loan is disbursed hereunder no portion of such Lender's
Pro Rata Share of such Loan will constitute "assets" within the meaning of 29
C.F.R. Section 2510.3-101 of an "employee benefit plan" within the meaning of
Section 3(3) of ERISA or a "plan" within the meaning of Section 4975(e)(1) of
the Internal Revenue Code, and (b) that following such date such Lender shall
not allocate such Lender's Pro Rata Share of any Loan to an account of such
Lender if such allocation (i) by itself would cause such Pro Rata Share of such
Loan to then constitute "assets" (within the meaning of 29 C.F.R. Section
2510.3-101 or any successor regulation thereto) of an "employee benefit plan"
within the meaning of Section 3(3) of ERISA or a "plan" within the meaning of
Section 4975(e)(1) of the Internal Revenue Code and (ii) by itself would cause
such Loan to constitute a prohibited transaction under ERISA or the Internal
Revenue Code (which is not exempt from the restrictions of Section 406 of ERISA
and Section 4975 of the Internal Revenue Code and the taxes and penalties
imposed by Section 4975 of the Internal Revenue Code and Section 502(i) of
ERISA) or any Agent or Lender being deemed in violation of Section 404 of ERISA.
12.24 Sole Lead Arranger, Documentation Agent and
Syndication Agent. Each of the parties to this Agreement acknowledges and agrees
that the obligations of Sole Lead Arranger, Documentation Agent and Syndication
Agent hereunder shall be limited to those obligations that are expressly set
forth herein, if any, and Sole Lead Arranger, Documentation Agent and
Syndication Agent shall not be required to take any action or assume any
liability except as may be required in their respective capacities as a Lender
hereunder. Each of the parties to this Agreement agrees that, for purposes of
the indemnifications set forth herein, the term "Agent" shall be deemed to
include Sole Lead Arranger, Documentation Agent and Syndication Agent.
[SIGNATURE PAGES FOLLOW]
91
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the date first written above.
"Borrower"
MHC OPERATING LIMITED
PARTNERSHIP, an Illinois limited
partnership
By: MANUFACTURED HOME COMMUNITIES, INC.,
a Maryland corporation, as General
Partner
By:_________________________________
Name: Xxxxxxx X. Xxxxxx
Title: Vice President/Chief Financial
Officer
Address:
Two Xxxxx Xxxxxxxxx Xxxxx, Xxxxx 000
Xxxxxxx, Xxxxxxxx 00000
Telecopy: 312/279-1710
S-1
"REIT"
MANUFACTURED HOME COMMUNITIES, INC.,
a Maryland corporation
By:___________________________________
Name: Xxxxxxx X. Xxxxxx
Title: Vice President/Chief Financial
Officer
Address:
Two Xxxxx Xxxxxxxxx Xxxxx, Xxxxx 000
Xxxxxxx, Xxxxxxxx 00000
Telecopy: 312/279-1710
AGREED AND ACKNOWLEDGED
FOR PURPOSES OF SECTION 1.04:
"REIT GUARANTOR"
MANUFACTURED HOME
COMMUNITIES, INC., a Maryland corporation
By:______________________________
Name: Xxxxxxx X. Xxxxxx
Title: Vice President/Chief Financial Officer
Address:
Xxx Xxxxx Xxxxxxxxx Xxxxx, Xxxxx 000
Xxxxxxx, Xxxxxxxx 00000
Telecopy: 312/279-1710
S-2
XXXXX FARGO BANK, N.A,
as Agent, Sole Lead Arranger, Swingline Lender,
Issuing Lender and a Lender
By:____________________________________________
Name:__________________________________________
Title:_________________________________________
Address:
000 Xxxxx Xxxxxx Xxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attn.: Senior Loan Officer
Telecopy: 312/782-0969
WITH A COPY TO:
Xxxxx Fargo & Co.
Real Estate Group
000 Xxxxxxxxxx Xxxxxx, Xxxxx 0
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Attn.: Chief Credit Officer
Telecopy: 415/391-2971
WITH A COPY TO (FOR
FINANCIAL STATEMENTS AND REPORTING INFORMATION
ONLY):
Xxxxx Fargo Bank
0000 Xxxx Xxxxxx
Xxxxx 000
Xxxxxx, Xxxxxxxxxx 00000
Attn: Xxx Xxxxxxxx
Telecopy 949/251-4343
Commitment: $50,000,000
45.454545%
S-3
BANK OF AMERICA, N.A.,
as Syndication Agent and as a Lender
By:____________________________________________
Name:__________________________________________
Title:_________________________________________
Address:
IL1-231-10-35
000 X. XxXxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Attn: Xxxxxx Xxxxx
Telecopy: 312/974-4970
Commitment: $25,000,000
22.727273%
S-4
LASALLE BANK NATIONAL ASSOCIATION, as
Documentation Agent and as a Lender
By:____________________________________________
Name:__________________________________________
Title:_________________________________________
Address:
000 Xxxxx XxXxxxx Xxxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxx Xxxxxxx
Telecopy: 312/904-6691
Commitment: $25,000,000
22.727273%
S-5
SOUTHTRUST, N.A., as a Lender
By:____________________________________________
Name:__________________________________________
Title:_________________________________________
By:____________________________________________
Name:__________________________________________
Title:_________________________________________
Address:
000 Xxxx Xxxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxx 00000
Attention: Xxx Xxxxxx
Telecopy: 404/214-5904
Commitment: $10,000,000
9.090909%
S-6
