ITEM 99.2
CREDIT AGREEMENT
DATED AS OF AUGUST 3, 2001
AMONG
CP LIMITED PARTNERSHIP,
AS BORROWER
AND
BANK ONE, NA
AND
THE SEVERAL LENDERS
FROM TIME TO TIME PARTIES HERETO,
AS LENDERS
AND
BANK ONE, NA,
AS ADMINISTRATIVE AGENT
AND
BANC ONE CAPITAL MARKETS, INC.
AS LEAD ARRANGER AND SOLE BOOK RUNNER
CREDIT AGREEMENT
This Credit Agreement, dated as of August 3, 2001, is among CP Limited
Partnership, a Maryland limited partnership (the "Borrower"), Bank One, NA,
having its principal office in Chicago, Illinois and the several banks,
financial institutions and other entities from time to time parties to this
Agreement (the "Lenders"), and Bank One, NA, not individually, but as
"Administrative Agent".
RECITALS
A. The Borrower is primarily engaged in the business of acquiring, owning,
managing, developing, renovating and expanding manufactured home communities.
B. The Borrower's general partners are ROC Communities, Inc., a Maryland
corporation, and Chateau Communities, Inc., a Maryland corporation ("Chateau
Parent").
C. The common stock, $0.01 par value, of Chateau Parent is listed on the
New York Stock Exchange and is qualified as a real estate investment trust under
Sections 856 through 860 of the Code.
D. The Borrower and Chateau Parent have entered into an Agreement and Plan
of Merger (the "Merger Agreement") dated as of June 6, 2001 with CWS Communities
Trust, CWS Communities LP and certain other entities (which are collectively
referred to herein as the "Target") pursuant to which Borrower will acquire
substantially all of the assets of the Target through the consummation of
various mergers and the transactions as described more fully in the Merger
Agreement (collectively such transaction are referred to as the "Merger").
E. The Borrower has requested that the Administrative Agent act as
administrative agent for the Lenders and that the Lenders make loans available
to the Borrower pursuant to the terms of this Agreement to finance the
performance of Borrower's obligations under the Merger Agreement. The
Administrative Agent and the Lenders have agreed to do so.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
herein contained, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
As used in this Agreement:
"ABR Applicable Margin" means, as of any date, the Applicable Margin in
effect on such date with respect to Floating Rate Advances and Floating Rate
Loans.
"Acquisition" means any transaction, or any series of related transactions,
consummated on or after the date of this Agreement, by which the Borrower or any
of its Subsidiaries (i) acquires any going business or all or substantially all
of the assets of any firm, corporation or division thereof, whether through
purchase of assets, merger or otherwise, or (ii) directly or indirectly acquires
(in one transaction or as the most recent transaction in a series of
transactions)
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at least a majority (in number of votes) of the securities of a corporation
which have ordinary voting power for the election of directors (other than
securities having such power only by reason of the happening of a contingency)
or a majority (by percentage or voting power) of the outstanding partnership
interests of a partnership.
"Administrative Agent" means Bank One, NA in its capacity as agent for the
Lenders pursuant to Article X, and not in its individual capacity as a Lender,
and any successor Administrative Agent appointed pursuant to Article X.
"Advance" means all or any portion of the borrowing hereunder as portions
of the borrowing may be allocated among different interest rate options from
time to time in accordance with the terms hereof.
"Affiliate" of any Person means any other Person directly or indirectly
controlling, controlled by or under common control with such Person. A Person
shall be deemed to control another Person if the controlling Person owns 10% or
more of any class of voting securities (or other ownership interests) of the
controlled Person or possesses, directly or indirectly, the power to direct or
cause the direction of the management or policies of the controlled Person,
whether through ownership of stock, by contract or otherwise.
"Aggregate Commitment" means the aggregate of the Commitments of all the
Lenders, which is equal to $325,000,000 comprised of $250,000,000 with respect
to Tranche I and $75,000,000 with respect to Tranche II.
"Agreement" means this Credit Agreement, as it may be amended or modified
and in effect from time to time.
"Agreement Execution Date" means the date this Agreement has been fully
executed and delivered by all parties hereto.
"Alternate Base Rate" means, for any day, a rate of interest per annum
equal to the higher of (i) the Prime Rate for such day and (ii) the sum of
Federal Funds Effective Rate for such day plus 1/2% per annum.
"Applicable Margin" means the applicable margin set forth in the table in
Section 2.4 used in calculating the interest rate applicable to the various
Types of Advances, which shall vary from time to time in accordance with
Borrower's long term unsecured debt ratings.
"Approved Ground Leases" means (i) three ground leases covering 209 acres
of land at the Colony Cove project in Ellenton, Florida, (ii) the ground lease
covering 40.3 acres of land at the Colony Project in Rancho Mirage, California
and (iii) those ground leases which affect Projects subsequently acquired by the
Borrower or its Subsidiaries and which (A) are Financeable Ground Leases and (B)
do not cause the aggregate Net Operating Income of all Projects then included in
Unencumbered Assets which are subject to a ground lease to exceed fifteen
percent (15%) of the aggregate Net Operating Income of all Unencumbered Assets.
"Arranger" means Banc One Capital Markets, Inc., an affiliate of Bank One,
NA, in its capacity as Lead Arranger and Sole Book Runner.
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"Article" means an article of this Agreement unless another document is
specifically referenced.
"Authorized Officer" means any of the President, the Chief Executive
Officer, any Executive Vice President, the Chief Operating Officer, the Chief
Financial Officer or any Vice President of Chateau Parent, acting singly.
"Bank One" means Bank One, NA, having its principal office in Chicago,
Illinois.
"Borrower" means CP Limited Partnership, a Maryland limited partnership,
and its successors and assigns.
"Borrowing Date" means the date on which the Advances are made hereunder.
"Borrowing Notice" is defined in Section 2.9.
"Business Day" means (i) with respect to any borrowing, payment or rate
selection of LIBOR Advances, a day (other than a Saturday or Sunday) on which
banks generally are open in Chicago, Illinois, New York, New York, and San
Francisco, California for the conduct of substantially all of their commercial
lending activities and on which dealings in United States dollars are carried on
in the London interbank market and (ii) for all other purposes, a day (other
than a Saturday or Sunday) on which banks generally are open in Chicago,
Illinois and New York, New York for the conduct of substantially all of their
commercial lending activities.
"Capital Stock" means any and all shares, interests, participations or
other equivalents (however designated) of capital stock of a corporation, any
and all equivalent ownership interests in a Person which is not a corporation
and any and all warrants or options to purchase any of the foregoing.
"Capitalization Rate" means the appropriate capitalization rate for mobile
home parks and manufactured housing communities, as determined by the
Administrative Agent, which shall be subject to the approval of the Required
Lenders, which rate shall in no event be less than 8.5% or greater than 10%. The
Administrative Agent may make such determination no more frequently than once in
any consecutive twelve (12) month period upon sixty (60) days prior written
notice to the Borrower. If the Borrower has not submitted reasonably
satisfactory evidence to the Administrative Agent and the Required Lenders that
a different rate is appropriate, the rate chosen by the Administrative Agent
shall be effective as of the end of such sixty (60) day period. As of the date
hereof, the parties agree that the appropriate Capitalization Rate is 8.75%. The
determination by the Administrative Agent and the Required Lenders of the
Capitalization Rate after review of any evidence submitted by Borrower as
provided above shall be final.
"Capitalized Lease" of a Person means any lease of Property imposing
obligations on such Person, as lessee thereunder, which are required in
accordance with GAAP to be capitalized on a balance sheet of such Person.
"Capitalized Lease Obligations" of a Person means the amount of the
obligations of such Person under Capitalized Leases which would be shown as a
liability on a balance sheet of such Person prepared in accordance with GAAP.
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"Cash Equivalents" means, as of any date:
(i) securities issued or directly and fully guaranteed or
insured by the United States Government or any agency or
instrumentality thereof having maturities of not more than
one year from such date;
(ii) mutual funds organized under the United States Investment
Company Act rated AAm or AAm-G by S&P, P-1 by Xxxxx'x and A
by Fitch;
(iii) certificates of deposit or other interest-bearing
obligations of a bank or trust company which is a member in
good standing of the Federal Reserve System having a short
term unsecured debt rating of not less than A-1 by S&P, not
less than P-1 by Xxxxx'x and F-1 by Fitch (or in each case,
if no bank or trust company is so rated, the highest
comparable rating then given to any bank or trust company,
but in such case only for funds invested overnight or over a
weekend) provided that such investments shall mature or be
redeemable upon the option of the holders thereof on or
prior to a date one month from the date of their purchase;
(iv) certificates of deposit or other interest-bearing
obligations of a bank or trust company which is a member in
good standing of the Federal Reserve System having a short
term unsecured debt rating of not less than A-1+ by S&P, and
not less than P-1 by Xxxxx'x and which has a long term
unsecured debt rating of not less than A1 by Xxxxx'x (or in
each case, if no bank or trust company is so rated, the
highest comparable rating then given to any bank or trust
company, but in such case only for funds invested overnight
or over a weekend) provided that such investments shall
mature or be redeemable upon the option of the holders
thereof on or prior to a date three months from the date of
their purchase;
(v) bonds or other obligations having a short term unsecured
debt rating of not less than A-1+ by S&P and P-1+ by Xxxxx'x
and having a long term debt rating of not less than A1 by
Xxxxx'x issued by or by authority of any state of the United
States, any territory or possession of the United States,
including the Commonwealth of Puerto Rico and agencies
thereof, or any political subdivision of any of the
foregoing;
(vi) repurchase agreements issued by an entity rated not less
than A-1+ by S&P, and not less than P-1 by Xxxxx'x which are
secured by U.S. Government securities of the type described
in clause (i) of this definition maturing on or prior to a
date one month from the date the repurchase agreement is
entered into;
(vii) short term promissory notes rated not less than A-1+ by S&P,
and not less than P-1 by Xxxxx'x maturing or to be
redeemable upon the option of the holders thereof on or
prior to a date one month from the date of their purchase;
and
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(viii) commercial paper (having original maturities of not more
than 365 days) rated at least A-1+ by S&P and P-1 by Xxxxx'x
and issued by a foreign or domestic issuer who, at the time
of the investment, has outstanding long-term unsecured debt
obligations rated at least A1 by Xxxxx'x.
"Change in Control" means that the Borrower's management and directors
shall cease to beneficially own in the aggregate a minimum of 2,000,000 shares
of the common stock of Chateau Parent (or the equivalent in operating
partnership units in the Borrower).
"Chateau Parent" means Chateau Communities, Inc., a Maryland corporation.
"Code" means the Internal Revenue Code of 1986, as amended, reformed or
otherwise modified from time to time.
"Commitment" means the obligation of the Lenders to make a Loan not
exceeding the amount set forth opposite its signature below. Such amount shall
be allocated between Tranche I and Tranche II as specified.
"Consolidated Debt Service" means, for any period, (a) Consolidated
Interest Expense for such period plus (b) the aggregate amount of all dividend
payments on preferred stock issued by either of the General Partners, the
Borrower or any of its Consolidated Subsidiaries required to be made during such
period plus (c) the aggregate amount of scheduled principal payments of
Indebtedness (excluding optional prepayments and scheduled principal payments
due on maturity of any Indebtedness) required to be made during such period by
either of the General Partners, the Borrower or any of its Consolidated
Subsidiaries plus (d) a replacement reserve for such period calculated at the
rate of $50.00 per annum per homesite for all homesites owned or leased by the
Borrower or any of its Consolidated Subsidiaries as of the end of such period
plus (e) without duplication of the foregoing, the Consolidated Group Pro Rata
Share of the Unconsolidated Debt Service. In calculating Consolidated Debt
Service for any period, the Consolidated Debt Service attributable to any
Indebtedness first incurred or preferred stock first issued by either of the
General Partners, Borrower or its Consolidated Subsidiaries during such period
shall be increased for purposes of this definition to reflect the full amount of
interest, dividends and scheduled principal payments that would have been
payable if such Indebtedness or preferred stock, as the case may be, had been
outstanding for the full period (except to the extent such Indebtedness or
preferred stock refinances or replaces previously existing Indebtedness or
preferred stock, respectively).
"Consolidated Group Pro Rata Share" means, with respect to any
Unconsolidated Subsidiary, the percentage of the total equity ownership
interests held by the Borrower and its Consolidated Subsidiaries in the
aggregate, in such Unconsolidated Subsidiary, determined by calculating the
greater of (i) the percentage of the issued and outstanding stock, partnership
interests or membership interests in such Unconsolidated Subsidiary held by the
Borrower and its Consolidated Subsidiaries in the aggregate and (ii) the
percentage of the total book value of such Subsidiary that would be received by
the Borrower and its Consolidated Subsidiaries in the aggregate, upon
liquidation of such Unconsolidated Subsidiary after repayment in full of all
Indebtedness of such Unconsolidated Subsidiary.
"Consolidated Interest Expense" means, for any period, the amount of
interest expense of the General Partners, the Borrower and its Consolidated
Subsidiaries for such period on the
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aggregate principal amount of their Indebtedness, determined on a consolidated
basis in accordance with GAAP. In calculating Consolidated Interest Expense for
any period, the interest expense on any Indebtedness first incurred during such
period shall be increased for purposes of this definition to reflect the full
amount of interest that would have been payable had such Indebtedness been
outstanding for the full period (except to the extent such Indebtedness
refinances previously existing Indebtedness).
"Consolidated Market Value" means, as of any date, an amount equal to the
sum of (i) EBITDA (excluding any portion of EBITDA attributable to Development
Projects) for the most recent fiscal quarter for which the Borrower has reported
results under Section 6.1, multiplied by 4 and divided by (A) with respect to
that portion of EBITDA attributable to CSI and to "other fee income," 0.15, and
(B) with respect to all other EBITDA, the then applicable Capitalization Rate
plus (ii) with respect to Development Projects, the greater of (A) EBITDA
attributable to such Development Projects for such most recent fiscal quarter
multiplied by 4 and divided by the then applicable Capitalization Rate and (B)
an imputed value equal to 75% of the portion of Borrower's investment in such
entity (whether as an equity contribution, a loan or Indebtedness of such entity
which is guaranteed by the Borrower), provided that (1) the imputed value in
clause (B) shall not be used at any time after the first quarter in which the
EBITDA-based amount in clause (A) has exceeded the amount in clause (B), (2)
such imputed value under clause (B) shall not exceed five percent (5%) of
Consolidated Market Value and (3) Administrative Agent shall be provided from
time to time with quarterly reports on the status and asset value of the land
development program for all Development Projects plus (iii) 75% of the
Consolidated Group Pro Rata Share of the book value (determined in accordance
with GAAP) of CSI's inventory of manufactured homes.
"Consolidated Net Income" means, for any period, consolidated net income
(or loss) of the Borrower and its Consolidated Subsidiaries for such period
determined on a consolidated basis in accordance with GAAP; provided that there
shall be excluded (a) the income (or deficit) of any other Person accrued prior
to the date it becomes a Subsidiary of the Borrower or is merged into or
consolidated with the Borrower or any of its Subsidiaries and (b) the
undistributed earnings of any Subsidiary to the extent that the declaration or
payment of dividends or similar distributions by such Subsidiary is not at the
time permitted by the terms of any contractual obligation or requirement of law
applicable to such Subsidiary.
"Consolidated Net Worth" means, as of any date of determination, an amount
equal to (a) Consolidated Market Value minus (b) Consolidated Outstanding
Indebtedness as of such date.
"Consolidated Outstanding Indebtedness" means, as of any date of
determination, without duplication, the sum of (i) all Indebtedness of the
General Partners, the Borrower and its Consolidated Subsidiaries outstanding at
such date, determined on a consolidated basis in accordance with GAAP, (ii) the
Consolidated Group Pro Rata Share of the indebtedness for borrowed money of
joint ventures and Unconsolidated Subsidiaries outstanding at such date and
(iii) 100% of all Indebtedness of CSI other than CSI's indebtedness for borrowed
money, to the extent in excess of three percent (3%) of Consolidated Market
Value.
"Consolidated Secured Indebtedness" means, as of any date of determination,
the sum of (a) the aggregate principal amount of all Indebtedness of the
Borrower and its Consolidated
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Subsidiaries outstanding at such date secured by any Lien on the Property of
Borrower (including without limitation its interests in the Consolidated
Subsidiaries) or of its Consolidated Subsidiaries, without regard to recourse,
plus (b) the Consolidated Group Pro Rata Share of Indebtedness of joint ventures
and Unconsolidated Subsidiaries outstanding at such date secured by any Lien on
the Property of such joint ventures and Unconsolidated Subsidiaries.
"Consolidated Senior Unsecured Indebtedness" means, as of any date of
determination, the aggregate principal amount of all Senior Unsecured
Indebtedness of the General Partners, the Borrower and its Consolidated
Subsidiaries outstanding at such date, including without limitation all the
outstanding Indebtedness under this Agreement as of such date, determined on a
consolidated basis in accordance with GAAP.
"Consolidated Subsidiary" means (i) any Subsidiary of Borrower which is
consolidated for financial reporting purposes with Borrower pursuant to GAAP and
(ii) any 99% Partnership, whether or not consolidated for financial reporting
purposes with Borrower pursuant to GAAP.
"Controlled Group" means all members of a controlled group of corporations
and all trades or businesses (whether or not incorporated) under common control
which, together with the Borrower or any of its Subsidiaries, are treated as a
single employer under Section 414(b) or (c) of the Code.
"Conversion/Continuation Notice" is defined in Section 2.10.
"CSI" means Community Sales, Inc., an Unconsolidated Subsidiary of the
Borrower which buys manufactured homes and sells and finances the sales of such
manufactured homes to lessees at Borrower's manufactured home communities.
Borrower owns all of the preferred stock and 77.5% of the common stock of CSI.
"Default" means an event of Default described in Article VII.
"Defaulting Lender" shall mean 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 five Business Days after written
notice from the Administrative Agent; provided that if such Lender cures such
failure or refusal, such Lender shall cease to be a Defaulting Lender.
"Development Project" means any land and related site improvements under
development for use as a manufactured home community which is owned by the
Borrower or by a joint venture, limited liability company or other entity with
respect to which Borrower both (i) has invested through a loan to such entity or
an equity contribution to such entity or by guaranteeing the Indebtedness of
such entity all or substantially all of the development costs and (ii) has the
right to acquire 100% of the equity interests of such entity under a purchase
price established by formula in an agreement with such entity or with the other
owners of such entity.
"EBITDA" means earnings before interest, taxes (other than real estate
taxes), depreciation and amortization, as reported by the Borrower and its
Subsidiaries on a consolidated basis, plus a percentage of EBITDA of any
Unconsolidated Subsidiary equal to the Consolidated Group Pro Rata Share in such
joint venture or Unconsolidated Subsidiary held by Borrower or any Consolidated
Subsidiary, plus all EBITDA of any joint venture or Unconsolidated
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Subsidiary all of the Indebtedness of which is guaranteed by the Borrower or a
Consolidated Subsidiary and included in Consolidated Outstanding Indebtedness
(provided that no item of income or expense shall be included more than once in
such calculation even if it falls within more than one of the foregoing
categories), all as calculated in accordance with GAAP. The annualized EBITDA
for any Person or Property will be calculated by determining actual EBITDA for
the most recently ended fiscal quarter and annualizing the same (provided that
in calculating EBITDA for any quarter, EBITDA attributable to any Projects first
acquired or opened by Borrower during such quarter shall be increased for
purposes of this definition to reflect the full amount of EBITDA that would have
been generated by such Project if it had been owned or opened for the full
quarter.)
"Environmental Laws" means any and all foreign, Federal, state, local or
municipal laws, rules, orders, regulations, statutes, ordinances, codes,
decrees, requirements of any Governmental Authority or other Requirements of Law
(including common law) regulating, relating to or imposing liability or
standards of conduct concerning protection of human health or the environment,
as now or may at any time hereafter be in effect, in each case to the extent the
foregoing are applicable to the Borrower or any Subsidiary or any of their
respective assets or Projects.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and any rule or regulation issued thereunder.
"Excluded Taxes" means, in the case of each Lender or applicable Lending
Installation and the Administrative Agent, taxes imposed on its overall net
income, and franchise taxes imposed on it, by (i) the jurisdiction under the
laws of which such Lender or the Administrative Agent is incorporated or
organized or (ii) the jurisdiction in which the Administrative Agent's or such
Lender's principal executive office or such Lender's applicable Lending
Installation is located.
"Facility Termination Date" means August 2, 2002.
"Federal Funds Effective Rate" means, for any day, an interest rate per
annum equal to the weighted average of the rates on overnight Federal funds
transactions with members of the Federal Reserve System arranged by Federal
funds brokers on such day, as published for such day (or, if such day is not a
Business Day, for the immediately 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 at approximately 10 a.m. (Chicago
time) on such day on such transactions received by the Administrative Agent from
three Federal funds brokers of recognized standing selected by the
Administrative Agent in its sole discretion.
"Financeable Ground Lease" means a ground lease satisfactory to the
Required Lenders and the Administrative Agent's counsel in their reasonable
discretion, which must provide protections for a potential leasehold mortgagee
("Mortgagee") which include, among other things (i) a remaining term of no less
than 25 years from the Agreement Execution Date, (ii) that the lease will not be
terminated until the Mortgagee has received notice of a default and has had a
reasonable opportunity to cure or complete foreclosure, and fails to do so,
(iii) a new lease on the same terms to the Mortgagee as tenant if the ground
lease is terminated for any reason, (iv) non-merger of the fee and leasehold
estates, (v) free transferability of the tenant's interest under the ground
lease and (vi) that insurance proceeds and condemnation awards (from the fee
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interest as well as the leasehold interest) will be applied pursuant to the
terms of a leasehold mortgage.
"Financial Contract" of a Person means (i) any exchange-traded or
over-the-counter futures, forward, swap or option contract or other financial
instrument with similar characteristics, or (ii) any Rate Management
Transaction.
"Financial Undertaking" of a Person means (i) any transaction which is the
functional equivalent of or takes the place of borrowing but which does not
constitute a liability on the consolidated balance sheet of such Person, or (ii)
any agreements, devices or arrangements designed to protect at least one of the
parties thereto from the fluctuations of interest rates, exchange rates or
forward rates applicable to such party's assets, liabilities or exchange
transactions, including, but not limited to, interest rate exchange agreements,
forward currency exchange agreements, interest rate cap or collar protection
agreements, forward rate currency or interest rate options.
"Fitch" means Fitch Investor Services, Inc. and its successors.
"Floating Rate" means, for any day, a rate per annum equal to (i) the
Alternate Base Rate for such day plus (ii) ABR Applicable Margin for such day,
in each case changing when and as the Alternate Base Rate changes.
"Floating Rate Advance" means an Advance which bears interest at the
Floating Rate.
"Floating Rate Loan" means a Loan which bears interest at the Floating
Rate.
"Funded Percentage" means for each Lender at any time of determination the
ratio that the principal balance of such Lender's outstanding Loans at such time
bears to the aggregate outstanding balance of all Loans at such time, expressed
as a percentage.
"Funds From Operations" means, for any period, Consolidated Net Income for
such period, excluding gains (losses) from debt restructuring and sales of
property, plus depreciation and amortization, after adjustments for
unconsolidated joint venture and partnerships.
"GAAP" means generally accepted accounting principles in the United States
of America as in effect from time to time, applied in a manner consistent with
that used in preparing the financial statements referred to in Section 6.1.
"General Partners" means ROC Communities, Inc. and Chateau Parent.
"Governmental Authority" means any nation or government, any state or other
political subdivision thereof and any entity exercising executive, legislative,
judicial, regulatory or administrative functions of or pertaining to government.
"Guarantee Obligation" means, as to any Person (the "guaranteeing person"),
any obligation (determined without duplication) of (a) the guaranteeing person
or (b) another Person (including, without limitation, any bank under any Letter
of Credit) to induce the creation of which the guaranteeing person has issued a
reimbursement, counter-indemnity or similar obligation, in either case
guaranteeing or in effect guaranteeing any Indebtedness, leases,
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dividends or other obligations (the "primary obligations") of any other third
Person (the "primary obligor") in any manner, whether directly or indirectly,
including, without limitation, any obligation of the guaranteeing person,
whether or not contingent, (i) to purchase any such primary obligation or any
property constituting direct or indirect security therefor, (ii) to advance or
supply funds (1) for the purchase or payment of any such primary obligation or
(2) to maintain working capital or equity capital of the primary obligor or
otherwise to maintain the net worth or solvency of the primary obligor, (iii) to
purchase property, securities or services primarily for the purpose of assuring
the owner of any such primary obligation of the ability of the primary obligor
to make payment of such primary obligation or (iv) otherwise to assure or hold
harmless the owner of any such primary obligation against loss in respect
thereof; provided, however, that the term Guarantee Obligation shall not include
endorsements of instruments for deposit or collection in the ordinary course of
business. The amount of any Guarantee Obligation of any guaranteeing person
shall be deemed to be the maximum stated amount of the primary obligation
relating to such Guarantee Obligation (or, if less, the maximum stated liability
set forth in the instrument embodying such Guarantee Obligation), provided, that
in the absence of any such stated amount or stated liability, the amount of such
Guarantee Obligation shall be such guaranteeing person's maximum reasonably
anticipated liability in respect thereof as determined by the Borrower in good
faith.
"Indebtedness" of any Person at any date means without duplication, (a) all
indebtedness of such Person for borrowed money including without limitation any
repurchase obligation or liability of such Person with respect to securities,
accounts or notes receivable sold by such Person, (b) all obligations of such
Person for the deferred purchase price of property or services (other than
current trade liabilities incurred in the ordinary course of business and
payable in accordance with customary practices), to the extent such obligations
constitute indebtedness for the purposes of GAAP, (c) any other indebtedness of
such Person which is evidenced by a note, bond, debenture or similar instrument,
(d) all Capitalized Lease Obligations, (e) all obligations of such Person in
respect of acceptances issued or created for the account of such Person, (f) all
Guarantee Obligations of such Person (excluding in any calculation of
consolidated Indebtedness of the Borrower, Guarantee Obligations of the Borrower
in respect of primary obligations of any Consolidated Subsidiary), (g) all
reimbursement obligations of such Person for letters of credit and other
contingent liabilities, (h) Net Xxxx-to-Market Exposure under Rate Management
Transactions and other Financial Contracts; and (i) all liabilities secured by
any lien (other than liens for taxes not yet due and payable) on any property
owned by such Person even though such Person has not assumed or otherwise become
liable for the payment thereof.
"Investment" of a Person means any loan, advance (other than commission,
travel and similar advances to officers and employees made in the ordinary
course of business), extension of credit (other than accounts receivable arising
in the ordinary course of business on terms customary in the trade), deposit
account or contribution of capital by such Person to any other Person or any
investment in, or purchase or other acquisition of, any Property, or the stock,
partnership interests, notes, debentures or other securities of any other Person
made by such Person.
"Lenders" mean the lending institutions listed on the signature pages of
this Agreement, their respective successors and assigns and any other lending
institutions that subsequently become parties to this Agreement.
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"Lending Installation" means, with respect to a Lender, any office, branch,
subsidiary or affiliate of such Lender.
"Letter of Credit" of a Person means a letter of credit or similar
instrument which is issued upon the application of such Person or upon which
such Person is an account party or for which such Person is in any way liable.
"LIBOR Advance" means an Advance that bears interest at the LIBOR Rate.
"LIBOR Applicable Margin" means, as of any date with respect to any LIBOR
Interest Period, the Applicable Margin in effect for such LIBOR Interest Period
as determined in accordance with Section 2.4 hereof.
"LIBOR Base Rate" means, with respect to a LIBOR Advance for the relevant
Interest Period, the applicable British Bankers' Association Interest Settlement
Rate for deposits in U.S. dollars appearing on Reuters Screen FRBD as of 11:00
a.m. (London time) two Business Days prior to the first day of such LIBOR
Interest Period, and having a maturity equal to such LIBOR Interest Period,
provided that, (i) if Reuters Screen FRBD is not available to the Administrative
Agent for any reason, the applicable LIBOR Base Rate for the relevant LIBOR
Interest Period shall instead be the applicable British Bankers' Association
Interest Settlement Rate for deposits in U.S. dollars as reported by any other
generally recognized financial information service as of 11:00 a.m. (London
time) two Business Days prior to the first day of such LIBOR Interest Period,
and having a maturity equal to such LIBOR Interest Period, and (ii) if no such
British Bankers' Association Interest Settlement Rate is available to the
Administrative Agent, the applicable LIBOR Base Rate for the relevant LIBOR
Interest Period shall instead be the rate determined by the Administrative Agent
to be the rate at which Bank One or one of its Affiliate banks offers to place
deposits in U.S. dollars with first-class banks in the London interbank market
at approximately 11:00 a.m. (London time) two Business Days prior to the first
day of such LIBOR Interest Period, in the approximate amount of Bank One's
relevant LIBOR Loan and having a maturity approximately equal to such LIBOR
Interest Period.
"LIBOR Interest Period" means a period of one month commencing on a
Business Day selected by the Borrower pursuant to this Agreement. Such LIBOR
Interest Period shall end on (but exclude) the day which corresponds numerically
to such date one month thereafter, provided, however, that if there is no such
numerically corresponding day in such next succeeding month, such LIBOR Interest
Period shall end on the last Business Day of such next succeeding month. If a
LIBOR Interest Period would otherwise end on a day which is not a Business Day,
such LIBOR Interest Period shall end on the next succeeding Business Day,
provided, however, that if said next succeeding Business Day falls in a new
calendar month, such LIBOR Interest Period shall end on the immediately
preceding Business Day.
"LIBOR Loan" means a Loan which bears interest at a LIBOR Rate.
"LIBOR Rate" means, with respect to a LIBOR Advance for the relevant LIBOR
Interest Period, the sum of (i) the quotient of (a) the LIBOR Base Rate
applicable to such LIBOR Interest Period, divided by (b) one minus the Reserve
Requirement (expressed as a decimal) applicable to such LIBOR Interest Period,
plus (ii) the LIBOR Applicable Margin in effect from time to time during such
LIBOR Interest Period. If the LIBOR Rate is not a multiple of 1/16 of 1%, the
LIBOR Rate shall be rounded to the next higher 1/100 of 1%.
-12-
"Lien" means any lien (statutory or other), mortgage, pledge,
hypothecation, assignment, deposit arrangement, encumbrance or preference,
priority or other security agreement or preferential arrangement of any kind or
nature whatsoever (including, without limitation, the interest of a vendor or
lessor under any conditional sale, Capitalized Lease or other title retention
agreement).
"Loan" means, with respect to a Lender, such Lender's portion of any
Advance.
"Loan Documents" means this Agreement, the Notes, the Subsidiary Guaranties
and any other document from time to time evidencing or securing indebtedness
incurred by the Borrower under this Agreement, as any of the foregoing may be
amended or modified from time to time.
"Market Value" means, as of any date for any Subsidiary, an amount equal to
EBITDA for such Subsidiary for the most recent fiscal quarter for which such
Subsidiary has reported results, multiplied by 4 and divided by the then
applicable Capitalization Rate.
"Material Adverse Effect" means a material adverse effect on (i) the
business, Property or condition (financial or otherwise) of the Borrower and its
Subsidiaries taken as a whole, (ii) the ability of the Borrower to perform its
obligations under the Loan Documents, or (iii) the validity or enforceability of
any of the Loan Documents.
"Material Subsidiary" means each Subsidiary that owns a Substantial Portion
of the aggregate Property of the Borrower and its Subsidiaries, as a whole.
"Materials of Environmental Concern" means any gasoline or petroleum
(including crude oil or any fraction thereof) or petroleum products or any
hazardous or toxic substances, materials or wastes, defined or regulated as such
in or under any Environmental Law, including, without limitation, asbestos,
polychlorinated biphenyls and urea-formaldehyde insulation.
"Maximum Legal Rate" means the maximum nonusurious interest rate, if any,
that at any time or from time to time may be contracted for, taken, reserved,
charged or received on the indebtedness evidenced by the Note and as provided
for herein or in the Note or other Loan Documents, under the laws of such state
or states whose laws are held by any court of competent jurisdiction to govern
the interest rate provision of the Loan.
"Maximum Variable Rate Debt Amount" shall be equal to: (i) $450,000,000
from the Agreement Execution Date until the earlier of the full repayment of
Tranche I or the date that is six months following the Agreement Execution Date,
(ii) $250,000,000 from the date that is the earlier of the date on which Tranche
I is repaid in full and the date that is six months following the Agreement
Execution Date, to the date that is nine months following the Agreement
Execution Date, and (iii) thereafter the greater of $150,000,000 and the sum of
the Aggregate Commitment as defined in the Revolving Credit Agreement, plus
$25,000,000.
"Merger" is defined in Recital D.
"Merger Agreement" is defined in Recital D.
"Moody's" means Xxxxx'x Investors Service, Inc. and its successors.
-13-
"Multiemployer Plan" means a Plan maintained pursuant to a collective
bargaining agreement or any other arrangement to which the Borrower or any
member of the Controlled Group is a party to which more than one employer is
obligated to make contributions and which otherwise is a "Multiemployer Plan" as
defined in Section 3(37) of ERISA.
"Net Xxxx-to-Market Exposure" of a Person means, as of any date of
determination, the excess (if any) of all unrealized losses over all unrealized
profits of such Person arising from Rate Management Transactions or any other
Financial Contract. "Unrealized losses" means the fair market value of the cost
to such Person of replacing such Rate Management Transaction or other Financial
Contract as of the date of determination (assuming the Rate Management
Transaction or other Financial Contract were to be terminated as of that date),
and "unrealized profits" means the fair market value of the gain to such Person
of replacing such Rate Management Transaction or other Financial Contract as of
the date of determination (assuming such Rate Management Transaction or other
Financial Contract were to be terminated as of that date).
"Net Operating Income" means, with respect to any Project for any period,
"property rental and other income" (as determined by GAAP) attributable to such
Project accruing for such period minus the amount of all expenses (as determined
in accordance with GAAP) incurred in connection with and directly attributable
to the ownership and operation of such Project for such period, including,
without limitation, Management Fees and amounts accrued for the payment of real
estate taxes and insurance premiums, but excluding interest expense or other
debt service charges and any non-cash charges such as depreciation or
amortization of financing costs. As used herein "Management Fees" means, with
respect to each Project for any period, an amount equal to two and one-half
percent (2.5%) of the aggregate rent due and payable for such period under
leases with tenants at such Project. In calculating Net Operating Income
attributable to any Project first acquired or opened by Borrower or its
Subsidiaries during a quarter, "property rental and other income" and expenses
shall be adjusted for purposes of this definition to reflect the full amount of
"property rental and other income" and expenses that would have been
attributable to such Project if it had been owned or opened for the full
quarter.
"Net Proceeds" means with respect to issuance of debt or sales of equity
interests, the amount available after payment of all usual and customary fees
and expenses in connection with the issuance of such debt or sale of equity
interests. Net Proceeds from sales of assets shall mean the amount available
after payment of usual and customary closing costs, prorations and any
indebtedness secured by a lien on such asset.
"99% Partnership" means any limited partnership in which Borrower holds at
least 99% of the partnership interests as a limited partner and Chateau Parent
or ROC Communities, Inc., directly or indirectly, is the sole general partner
and holds not more than 1% of the partnership interests.
"Note" means a promissory note, in substantially the form of Exhibit A
hereto, duly executed by the Borrower and payable to the order of a Lender
including any amendment, modification, renewal or replacement of such promissory
note.
"Notice of Assignment" is defined in Section 12.3.2.
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"Obligations" means all unpaid principal of and accrued and unpaid interest
on the Notes, all accrued and unpaid fees and all expenses, reimbursements,
indemnities and other obligations of the Borrower to the Lenders or to any
Lender, the Arranger, the Administrative Agent or any indemnified party
hereunder arising under the Loan Documents.
"Other Taxes" is defined in Section 3.5(b).
"Participants" is defined in Section 12.2.1.
"PBGC" means the Pension Benefit Guaranty Corporation, or any successor
thereto.
"Percentage" means for each Lender the ratio that such Lender's Commitment
bears to the Aggregate Commitment, expressed as a percentage.
"Permitted Acquisitions" are defined in Section 6.14.
"Permitted Liens" are defined in Section 6.15.
"Person" means any natural person, corporation, firm, joint venture,
partnership, association, enterprise, trust or other entity or organization, or
any government or political subdivision or any agency, department or
instrumentality thereof.
"Plan" means an employee pension benefit plan which is covered by Title IV
of ERISA or subject to the minimum funding standards under Section 412 of the
Code as to which the Borrower or any member of the Controlled Group may have any
liability.
"Prime Rate" means a rate per annum equal to the prime rate of interest
announced from time to time by Bank One or its parent (which is not necessarily
the lowest rate charged to any customer), changing when and as said prime rate
changes.
"Project" means any real estate asset owned by Borrower or any of its
Subsidiaries and operated as a manufactured home community.
"Property" of a Person means any and all property, whether real, personal,
tangible, intangible, or mixed, of such Person, or other assets owned, leased or
operated by such Person.
"Purchasers" is defined in Section 12.3.1.
"Rate Management Transaction" means any transaction (including an agreement
with respect thereto) now existing or hereafter entered into between the
Borrower and any Lender or Affiliate thereof which is a rate swap, basis swap,
forward rate transaction, commodity swap, commodity option, equity or equity
index swap, equity or equity index option, bond option, interest rate option,
foreign exchange transaction, cap transaction, floor transaction, collar
transaction, forward transaction, currency swap transaction, cross-currency rate
swap transaction, currency option or any other similar transaction (including
any option with respect to any of these transactions) or any combination
thereof, whether linked to one or more interest rates, foreign currencies,
commodity prices, equity prices or other financial measures.
"Regulation D" means Regulation D of the Board of Governors of the Federal
Reserve System as from time to time in effect and any successor thereto or other
regulation or official
-15-
interpretation of said Board of Governors relating to reserve requirements
applicable to member banks of the Federal Reserve System.
"Regulation U" means Regulation U of the Board of Governors of the Federal
Reserve System as from time to time in effect and any successor or other
regulation or official interpretation of said Board of Governors relating to the
extension of credit by banks for the purpose of purchasing or carrying margin
stocks applicable to member banks of the Federal Reserve System.
"Reportable Event" means a reportable event as defined in Section 4043(c)
(but not (c) (a) or (ii)) of ERISA and the regulations issued under such
section, with respect to a Plan, excluding, however, such events as to which the
PBGC by regulation waived the requirement of Section 4043(a) of ERISA that it be
notified within 30 days of the occurrence of such event, provided, however, that
a failure to meet the minimum funding standard of Section 412 of the Code and of
Section 302 of ERISA shall be a Reportable Event regardless of the issuance of
any such waiver of the notice requirement in accordance with either Section
4043(a) of ERISA or Section 412(d) of the Code.
"Required Lenders" means prior to the disbursement hereunder Lenders in the
aggregate having at least 66 2/3% of the Aggregate Commitment under Tranche I
and 66-2/3% of the total Commitments under Tranche 2 and following the
disbursement hereunder, Lenders in the aggregate holding at least 66 2/3% of the
aggregate outstanding principal amount of Loans under Tranche 1 (so long as any
amount under Tranche 1 remain outstanding) and Lenders in the aggregate holding
at least 66-2/3% of the aggregate outstanding principal amount of Loans under
Tranche 2 (so long as any amount under Tranche 2 remains outstanding); provided
that in each case, in determining such percentage at any given time, all then
existing Defaulting Lenders will be disregarded and excluded and the Percentages
(or, if applicable, percentage ownership of outstanding Loans) of Lenders shall
be redetermined, for voting purposes only, to exclude the Percentages of (or, if
applicable, outstanding Loans owed to) such Defaulting Lenders.
"Reserve Requirement" means, with respect to a LIBOR Interest Period, the
maximum aggregate reserve requirement (including all basic, supplemental,
marginal and other reserves) which is imposed under Regulation D on Eurocurrency
liabilities.
"Revolving Credit Agreement" means that certain Amended and Restated Credit
Agreement (Revolving) dated as of February 13, 2001 among Borrower,
Administrative Agent, certain of the Lenders, and certain other lenders.
"Section" means a numbered section of this Agreement, unless another
document is specifically referenced.
"Senior Unsecured Indebtedness" means all Indebtedness other than
Subordinated Indebtedness of any Person that is not secured by a Lien on any
asset of such Person.
"Single Employer Plan" means a Plan maintained by the Borrower or any
member of the Controlled Group for employees of the Borrower or any member of
the Controlled Group.
"Subordinated Indebtedness" means Indebtedness which is contractually
subordinated to the Obligations on terms reasonably acceptable to the
Administrative Agent.
-16-
"Subsidiary" of a Person means (i) any corporation more than 50% of the
outstanding securities having ordinary voting power of which shall at the time
be owned or controlled, directly or indirectly, by such Person or by one or more
of its Subsidiaries or by such Person and one or more of its Subsidiaries, or
(ii) any partnership, association, joint venture or similar business
organization more than 50% of the ownership interests having ordinary voting
power of which shall at the time be so directly or indirectly owned or
controlled. Unless otherwise expressly provided, all references herein to a
"Subsidiary" shall mean a Subsidiary of the Borrower.
"Subsidiary Guaranty" means a guaranty of the Obligations in the form
attached hereto as Exhibit G executed by a 99% Partnership.
"Substantial Portion" means, with respect to the Property of the Borrower
and its Subsidiaries, Property which (i) as of the date of determination
represents more than 10% of the consolidated assets of the Borrower and its
Subsidiaries as would be shown in the consolidated financial statements of the
Borrower and its Subsidiaries as at the beginning of the twelve-month period
ending with the month in which such determination is made, or (ii) is
responsible for more than 10% of the Consolidated Net Income of the Borrower and
its Subsidiaries as reflected in the financial statements referred to in clause
(i) above.
"S&P" means Standard & Poor's, a division of the XxXxxx-Xxxx Companies, and
its successors.
"Target" is defined in Recital D.
"Taxes" means any and all present or future taxes, duties, levies, imposts,
deductions, charges or withholdings, and any and all liabilities with respect to
the foregoing, but excluding Excluded Taxes and Other Taxes.
"Tranche" is Tranche I or Tranche II, as applicable.
"Tranche I" is a portion of the total amount of the Facility in the amount
of $250,000,000.
"Tranche II" is a portion of the total amount of the Facility in the amount
of $75,000,000.
"Tranche Percentage" means for each Lender, for either Tranche, the ratio
that such Lender's Commitment for such Tranche bears to the total of the
Commitments for such Tranche from all Lenders.
"Transferee" is defined in Section 12.4.
"Type" means, with respect to any Advance, its nature as a Floating Rate
Advance or a LIBOR Rate Advance.
"Unconsolidated Debt Service" means, for any period, without duplication,
(a) Unconsolidated Interest Expense for such period plus (b) the aggregate
amount of all dividend payments on preferred stock issued by any Unconsolidated
Subsidiary required to be made during such period plus (c) the aggregate amount
of scheduled principal payments of
-17-
Indebtedness (excluding optional prepayments and scheduled principal payments
due on maturity of any Indebtedness) required to be made during such period by
any Unconsolidated Subsidiary plus (d) a replacement reserve for such period
calculated at the rate of $50.00 per annum per homesite for all homesites owned
by any Unconsolidated Subsidiary as of the end of such period. In calculating
Unconsolidated Debt Service for any period, the Unconsolidated Debt Service
attributable to any Indebtedness first incurred or preferred stock first issued
by any Unconsolidated Subsidiary during such period shall be increased for
purposes of this definition to reflect the full amount of interest, dividends
and scheduled principal payments that would have been payable if such
Indebtedness or preferred stock, as the case may be, had been outstanding for
the full period (except to the extent such Indebtedness refinances previously
existing Indebtedness).
"Unconsolidated Interest Expense" means, for any period, without
duplication, the amount of interest expense of the Unconsolidated Subsidiaries
for such period on the aggregate principal amount of their Indebtedness,
determined in accordance with GAAP. In calculating Unconsolidated Interest
Expense for any period, the interest expense on any Indebtedness first incurred
during such period shall be increased for purposes of this definition to reflect
the full amount of interest that would have been payable had such Indebtedness
been outstanding for the full period (except to the extent such Indebtedness
refinances previously existing Indebtedness).
"Unconsolidated Subsidiary" means any Subsidiary of Borrower which is not
consolidated for financial reporting purposes with Borrower pursuant to GAAP.
"Unencumbered Asset" means any Project owned by the Borrower, a
Wholly-Owned Subsidiary or a 99% Partnership which has executed a Subsidiary
Guaranty which Project, at any date of determination, (a) is not subject to any
Liens or claims, including restrictions on transferability or assignability of
any kind (including any such Lien, claim or restriction imposed by the
organizational documents of any Subsidiary, provided that an Unencumbered Asset
may be subject to (i) Approved Ground Leases, (ii) Permitted Liens other than
those identified in Sections 6.15(v), (vi) and (viii), and (iii) any restriction
on sale imposed in connection with the acquisition of a Project in exchange for
an interest in the Borrower) (b) is not subject to any agreement (including (i)
any agreement governing Indebtedness incurred in order to finance or refinance
the acquisition of such Project, and (ii) if applicable, the organizational
documents of any Subsidiary) which prohibits or limits the ability of the
Borrower or any of its Subsidiaries to create, incur, assume or suffer to exist
any Lien upon any assets or Capital Stock of the Borrower or any of its
Subsidiaries, including, without limitation, any negative pledge or similar
covenant or restriction, (c) is not subject to any agreement (including any
agreement governing Indebtedness incurred in order to finance or refinance the
acquisition of such asset) which entitles any Person to the benefit of any Lien
(other than Permitted Liens) on any assets or Capital Stock of the Borrower or
any of its Subsidiaries, or would entitle any Person to the benefit of any Lien
(other than Permitted Liens) on such assets or Capital Stock upon the occurrence
of any contingency (including, without limitation, pursuant to an "equal and
ratable" clause), (d) has been improved with a manufactured home community and
has all approvals necessary for occupancy of the improved portion of such
Project and (e) if owned by a Wholly-Owned Subsidiary or a 99% Partnership, is
owned by an entity which has no Indebtedness for borrowed money, whether secured
or unsecured. For the purposes of this Agreement, any Project of a Subsidiary
shall not be deemed to be unencumbered unless both (i) such Project and (ii) all
Capital Stock of such Subsidiary held by the Borrower is
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unencumbered. In the event that any credit or other agreement of the Borrower
requires maintenance of unencumbered assets, an asset hereunder shall not be
deemed to be unencumbered unless there are sufficient unencumbered assets of the
Borrower to satisfy both the covenants with respect to Unencumbered Assets
contained herein and the requirements of any such other agreement.
"Unfunded Liabilities" means the amount (if any) by which the present value
of all vested nonforfeitable benefits under all Single Employer Plans exceeds
the fair market value of all such Plan assets allocable to such benefits, all
determined as of the then most recent valuation date for such Plans.
"Unmatured Default" means an event which but for the lapse of time or the
giving of notice, or both, would constitute a Default.
"Unrestricted Cash and Cash Equivalents" means, as of any date of
determination, the sum of (a) the aggregate amount of Unrestricted cash then
held by the Borrower or any of its Consolidated Subsidiaries and (b) the
aggregate amount of Unrestricted Cash Equivalents (valued at the lower of cost
and fair market value) then held by the Borrower or any of its Consolidated
Subsidiaries. As used in this definition, "Unrestricted" means the specified
asset is not subject to any Liens in favor of any Person.
"Unsecured Indebtedness" means all Indebtedness of any Person that is not
secured by a Lien on any asset of such Person.
"Value of Unencumbered Assets" means, as of any date, an amount equal to
the sum of (i) Net Operating Income attributable to Unencumbered Assets for the
most recent full fiscal quarter for which the Borrower has reported results
under Section 6.1 (excluding any portion of Net Operating Income attributable to
Unencumbered Assets acquired by the Borrower or its Wholly-Owned Subsidiaries or
the 99% Partnerships during or after such period) multiplied by 4, and divided
by the then applicable Capitalization Rate, plus (ii) with respect to those
Unencumbered Assets so acquired by the Borrower or its Wholly-Owned Subsidiaries
or the 99% Partnerships during such period of one full fiscal quarter, the
Borrower's estimated annual Net Operating Income for such Unencumbered Assets
based on leases in existence at the date of such acquisition multiplied by 4,
and divided by the then applicable Capitalization Rate.
"Wholly-Owned Subsidiary" of a Person means (i) any Subsidiary all of the
outstanding voting securities of which shall at the time be owned or controlled,
directly or indirectly, by such Person or one or more Wholly-Owned Subsidiaries
of such Person, or by such Person and one or more Wholly-Owned Subsidiaries of
such Person, or (ii) any partnership, association, joint venture or similar
business organization 100% of the ownership interests having ordinary voting
power of which shall at the time be so owned or controlled.
The foregoing definitions shall be equally applicable to both the singular
and plural forms of the defined terms.
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ARTICLE II
THE CREDIT
2.1 Commitments; Reduction or Increase in Aggregate Commitment.
This facility ("Facility") is a 364-day single draw unsecured term loan in
the maximum amount of the Aggregate Commitment. Subject to the terms and
conditions of this Agreement, each Lender severally agrees to make a single
disbursement through the Administrative Agent to Borrower in the amount not to
exceed its Commitment. For each Tranche, each Lender participating in the
Tranche shall fund its Tranche Percentage of the total disbursement for such
Tranche. This is not a revolving credit facility and, except as provided in
Section 3.3, any part of the Loans repaid may not be reborrowed. The commitment
to lend hereunder shall expire on August 31, 2001.
2.2 Final Principal Payment.
Any outstanding Advances and all other unpaid Obligations shall be paid in
full by the Borrower on the Facility Termination Date.
2.3 Ratable Loans.
Each portion of an Advance hereunder constituting an Advance under Tranche
I ("Tranche I Advances") shall consist of Loans made from the several Lenders
ratably in proportion to their respective Tranche Percentages for Tranche I.
Each portion of an Advance hereunder constituting an Advance under Tranche II
("Tranche II Advances") shall consist of Loans made from the several Lenders
ratably in proportion to their respective Tranche Percentages for Tranche II.
The Advances may be ABR Advances or LIBOR Advances, or a combination thereof,
selected by the Borrower in accordance with Sections 2.9 and 2.10.
2.4 Applicable Margins.
Both the ABR Applicable Margin and the LIBOR Applicable Margin to be used
in calculating the interest rate applicable to different Types of Advances shall
vary from time to time in accordance with the higher of the then-applicable
Moody's debt rating and S&P's debt rating, as the case may be, for the long-term
unsecured debt of Chateau Parent. The Applicable Margins shall be adjusted
effective on the next Business Day following any change in Chateau Parent's
Moody's debt rating and/or S&P's debt rating, as the case may be. Borrower shall
provide prompt notice to Administrative Agent of any rating change and promptly
upon receipt of such notice Administrative Agent shall promptly notify the
Lenders, but the determination of the Applicable Margin shall not be dependent
on the giving of such notice. The applicable debt ratings and the Applicable
Margins are set forth in the following tables:
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Pricing Grid For Period From Closing Through First 4 Months
---------------------------------------------------------------------------------------
Rating: At least At least Less than
S&P and Xxxxx'x Baa2 or BBB Baa3 or BBB- Baa3 and BBB-
("Level I Status") but lower than Level I
Status
---------------------------------------------------------------------------------------
ABR Applicable Margin 20 40 65
(in basis points)
---------------------------------------------------------------------------------------
LIBOR Applicable Margin 120 140 165
(in basis points)
---------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------
Pricing Grid For Period From Beginning of Month 5 Through Maturity
---------------------------------------------------------------------------------------
Rating: At least At least Less than
S&P and Xxxxx'x Baa2 or BBB Baa3 or BBB- Baa3 and BBB-
("Level I Status") but lower than Level I
Status
---------------------------------------------------------------------------------------
ABR Applicable Margin 50 75 100
(in basis points)
---------------------------------------------------------------------------------------
LIBOR Applicable Margin 150 175 200
(in basis points)
---------------------------------------------------------------------------------------
In the event that either S&P or Xxxxx'x shall discontinue its ratings of the
REIT industry or Chateau Parent, Chateau Parent shall seek a debt rating from a
substitute rating agency reasonably satisfactory to the Administrative Agent and
Chateau Parent (the "Substitute Rating Agency"). For the period from the date of
such discontinuance until the first to occur of (i) the date Chateau Parent
receives a debt rating from the Substitute Rating Agency or (ii) a date 180 days
after such discontinuance, the single rating from S&P or Xxxxx'x, as the case
may be, shall be used to determine the Applicable Margin. If the debt rating of
Chateau Parent from the Substitute Rating Agency is not received within such 180
day period, or if both S&P and Xxxxx'x shall discontinue their ratings of the
REIT industry or Chateau Parent at a time when Chateau Parent has not secured a
rating from a Substitute Rating Agency, the Applicable Margin to be used for the
calculation of interest on Advances hereunder shall be the highest Applicable
Margin for each Type.
If a rating agency downgrade or discontinuance results in an increase in
the Applicable Margins and if such rating downgrade or discontinuance is
reversed and the Applicable Margins are restored within ninety (90) days
thereafter, at Borrower's request, Borrower shall receive a credit against
interest next due the Lenders equal to interest accrued from time to time during
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such period of downgrade or discontinuance on the Advances at the differential
between such Applicable Margins.
If a rating agency upgrade results in a decrease in the Applicable Margins
and if such rating upgrade is reversed and the Applicable Margins are restored
within ninety (90) days thereafter, Borrower shall pay at the time of the next
interest payment (in addition to the interest then due) an amount equal to
interest accrued from time to time during such period of upgrade on the Advances
at the differential between such Applicable Margins.
2.5 Other Fees.
The Borrower agrees to pay all other fees payable to the Administrative
Agent and the Arranger pursuant to the Borrower's prior letter agreement with
the Administrative Agent and the Arranger dated June 5, 2001.
2.6 Minimum Amount of Each Advance.
Each Advance shall be in the minimum amount of $5,000,000 (and in multiples
of $500,000 if in excess thereof).
2.7 Optional Principal Payments.
The Borrower may from time to time pay, without penalty or premium, all or
any part of outstanding Floating Rate Advances without prior notice to the
Administrative Agent. A LIBOR Rate Advance may be paid on the last day of the
applicable Interest Period or, if and only if the Borrower pays any amounts due
to the Lenders under Sections 3.4 and 3.5 as a result of such prepayment, on a
day prior to such last day.
2.8 Mandatory Prepayments.
In addition to any other payments due hereunder, the following mandatory
prepayments shall be made:
(a) Upon the issuance of any public or private debt by Borrower or Chateau
Parent, the Borrower shall make a mandatory prepayment in an amount equal to
100% of the Net Proceeds realized from such sale, transfer or other disposition
which shall be applied first to the Tranche I Advances and then after Tranche I
has been repaid, to the Tranche II Advances.
(b) Upon the sale of any common stock, preferred stock, warrant or other
equity by Borrower or Chateau Parent, the Borrower shall make a mandatory
prepayment in an amount equal to 100% of the Net Proceeds so realized from such
sale or issuance which shall be applied first to the Tranche I Advances and then
after Tranche I has been repaid, to the Tranche II Advances.
(c) Upon the sale, transfer or other disposition of any asset of the
Borrower, or any of its subsidiaries (other than the sale of inventory in the
ordinary course of business) which is permitted by the terms of the Loan
Documents, the Borrower shall make a mandatory prepayment in an amount equal to
100% of the Net Proceeds realized from such sale, transfer or other disposition
which shall be applied first to the Tranche I Advances and then after Tranche I
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has been repaid, to the Tranche II Advances. Notwithstanding the foregoing, for
purposes of this requirement, the Borrower shall not be obligated to apply any
Net Proceeds from the sale of Sunset Palms in Tampa, Florida ("Sunset"),
currently under contract for sale, as otherwise provided herein if such sale
occurs after the Facility has funded, except for those Net Proceeds to be
received by Borrower as a part of the Sunset sale agreement with Target relating
to the sale of Sunset.
(d) Mandatory prepayments shall be subject to the same notice and
indemnification provisions provided in Section 2.7 for optional prepayments.
2.9 Method of Selecting Types and Interest Periods for the Advance.
The Borrower shall select the Type of Advance. The Borrower shall give the
Administrative Agent irrevocable notice (a "Borrowing Notice") (i) not later
than 10:00 a.m. (Chicago time) on the Borrowing Date of a Floating Rate Advance,
and (ii) not later than 11:00 a.m. (Chicago time) at least three Business Days
before the Borrowing Date for a LIBOR Advance, specifying:
(i) the Borrowing Date, which shall be a Business Day, of such
Advance,
(ii) the aggregate amount of such Advance,
(iii) the Type of Advance selected.
The Administrative Agent shall give telephonic notice to the Lenders of the
contents of any Borrowing Notice (i) requesting a LIBOR Advance not later than
3:00 p.m. (Chicago time) three Business Days prior to the applicable Borrowing
Date or (ii) requesting a Floating Rate Advance not later than 11:00 a.m. on the
Borrowing Date (or 4:00 p.m. (Chicago time) on the Business Day immediately
preceding such Borrowing Date for Floating Rate Advances requested prior to 3:00
p.m. (Chicago time) on such immediately preceding Business Day). The
Administrative Agent shall provide a copy of each Borrowing Notice to the
Lenders on or promptly after the Borrowing Date. The Administrative Agent shall
give telephonic notice to the other Lenders of the LIBOR Rate applicable to a
LIBOR Advance promptly after determination thereof two Business Days prior to
the Borrowing Date. Each Lender shall make available its Loan or Loans, in funds
immediately available in Chicago to the Administrative Agent at its address
specified pursuant to Article XIII on Borrowing Date not later than (i) 11:00
a.m. (Chicago time), in the case of a Floating Rate Advance which have been
requested by a Borrowing Notice given to the Administrative Agent not later than
3:00 p.m. (Chicago time) on the Business Day immediately preceding such
Borrowing Date, or (ii) noon (Chicago time) in the case of all other Advances.
The Administrative Agent will make the funds so received from the Lenders
available to the Borrower at the Administrative Agent's aforesaid address.
No LIBOR Interest Period may end after the Facility Termination Date. In no
event may there be more than one LIBOR Rate Advance and one Floating Rate
Advance outstanding at any one time.
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2.10 Conversion and Continuation of an Outstanding Advance.
A Floating Rate Advance shall continue as a Floating Rate Advance unless
and until such Floating Rate Advance is converted into a LIBOR Rate Advance. A
LIBOR Rate Advance shall continue as a LIBOR Rate Advance until the end of the
then applicable Interest Period therefor, at which time such LIBOR Rate Advance
shall be automatically converted into a Floating Rate Advance unless the
Borrower shall have given the Administrative Agent a Conversion/Continuation
Notice requesting that, at the end of such Interest Period, such LIBOR Rate
Advance either continue as a LIBOR Rate Advance for the same or another Interest
Period or be converted to an Advance of another Type. Subject to the terms of
Section 2.7, the Borrower may elect from time to time to convert all or any part
of an Advance of any Type into any other Type or Types of Advances; provided
that any conversion of any LIBOR Rate Advance shall be made on, and only on, the
last day of the Interest Period applicable thereto, or, if and only if the
Borrower pays any amounts due to the Lenders under Sections 3.4 and 3.5 as a
result of such conversion on a day prior to such last day. The Borrower shall
give the Administrative Agent irrevocable notice (a "Conversion/Continuation
Notice") of each conversion of the Advance to a LIBOR Rate Advance or
continuation of a LIBOR Rate Advance not later than 10:00 a.m. (Chicago time) at
least three Business Days prior to the date of the requested conversion or
continuation, specifying:
(i) the requested date which shall be a Business Day, of such
conversion or continuation;
(ii) the aggregate amount and Type of the Advance which is to be
converted or continued; and
(iii) the amount and Type(s) of Advance(s) into which such Advance is
to be converted or continued and, in the case of a conversion into or
continuation of a LIBOR Rate Advance, the duration of the Interest Period
applicable thereto.
2.11 Changes in Interest Rate, Etc.
A Floating Rate Advance shall bear interest on the outstanding principal
amount thereof, for each day from and including the date such Advance is made or
is converted from a LIBOR Rate Advance into a Floating Rate Advance pursuant to
Section 2.10 to but excluding the date it becomes due or is converted into a
LIBOR Rate Advance pursuant to Section 2.10 hereof, at a rate per annum equal to
the Floating Rate for such day. Changes in the rate of interest on that portion
of any Advance maintained as a Floating Rate Advance will take effect
simultaneously with each change in the Alternate Base Rate. Each LIBOR Rate
Advance shall bear interest from and including the first day of the Interest
Period applicable thereto to (but not including) the last day of such Interest
Period at the interest rate determined as applicable to such LIBOR Rate Advance.
2.12 Rates Applicable After Default.
Notwithstanding anything to the contrary contained in Section 2.9 or 2.10,
during the continuance of a Default or Unmatured Default the Required Lenders
may, at their option, by notice to the Borrower (which notice may be revoked at
the option of the Required Lenders notwithstanding any provision of Section 8.2
requiring unanimous consent of the Lenders to
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changes in interest rates), declare that no Advance may be made as, converted
into or continued as a LIBOR Rate Advance. During the continuance of a Default
the Required Lenders may, at their option, by notice to the Borrower (which
notice may be revoked at the option of the Required Lenders notwithstanding any
provision of Section 8.2 requiring unanimous consent of the Lenders to changes
in interest rates), declare that (i) a LIBOR Rate Advance shall bear interest
for the remainder of the applicable Interest Period at the rate otherwise
applicable to such Interest Period plus 2% per annum, and (ii) a Floating Rate
Advance shall bear interest at a rate per annum equal to the Floating Rate
otherwise applicable to the Floating Rate Advance plus 2% per annum.
2.13 Method of Payment.
(i) All payments of the Obligations hereunder shall be made, without
setoff, deduction, or counterclaim, in immediately available funds to the
Administrative Agent at the Administrative Agent's address specified
pursuant to Article XIII, or at any other Lending Installation of the
Administrative Agent specified in writing by the Administrative Agent to
the Borrower, by noon (Chicago time) on the date when due and shall be
applied ratably by the Administrative Agent among the Lenders, except as
otherwise expressly provided herein.
(ii) Except as may be provided elsewhere herein, all Lenders'
interests in the Advance and the Loan Documents shall be ratable undivided
interests and none of such Lenders' interests shall have priority over the
others. Each payment delivered to the Administrative Agent for the account
of any Lender or amount to be applied or paid by the Administrative Agent
to any Lender shall be paid promptly (on the same day as received by the
Administrative Agent if received prior to noon (Chicago time) on such day
and otherwise on the next Business Day) by the Administrative Agent to such
Lender in the same type of funds that the Administrative Agent received at
its address specified pursuant to Article XIII or at any Lending
Installation specified in a notice received by the Administrative Agent
from such Lender. Payments received by the Administrative Agent but not
timely funded to the Lenders shall bear interest payable by the
Administrative Agent at the Federal Funds Effective Rate from the date due
until the date paid. The Administrative Agent is hereby authorized to
charge the account of the Borrower maintained with Bank One for each
payment of principal, interest and fees as it becomes due hereunder.
2.14 Notes; Telephonic Notices.
Each Lender is hereby authorized to record the principal amount of each of
its Loans and each repayment on the schedule attached to its Note, provided,
however, that the failure to so record shall not affect the Borrower's
obligations under such Note. The Borrower hereby authorizes the Lenders and the
Administrative Agent to extend, convert or continue the Advance, effect
selections of the Types of Advance and to transfer funds based on telephonic
notices made by any Authorized Officer. The Borrower agrees to deliver promptly
to the Administrative Agent a written confirmation of each telephonic notice
signed by an Authorized Officer. If the written confirmation differs in any
material respect from the action taken by the Administrative Agent and the
Lenders, the records of the Administrative Agent and the Lenders shall govern
absent manifest error.
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2.15 Interest Payment Dates; Interest and Fee Basis.
Interest accrued on a Floating Rate Advance shall be payable on the last
day of each month, upon any prepayment, whether by acceleration or otherwise and
at maturity. Interest accrued on a LIBOR Rate Advance shall be payable on the
last day of the applicable Interest Period and on any date on which the LIBOR
Rate Advance is prepaid and at maturity. Interest shall be calculated for actual
days elapsed on the basis of a 360-day year. Interest shall be payable for the
day the Advance is made but not for the day of any payment on the amount paid if
payment is received prior to noon (local time) at the place of payment. If any
payment of principal of or interest on the Advance shall become due on a day
which is not a Business Day, such payment shall be made on the next succeeding
Business Day and, in the case of a principal payment, such extension of time
shall be included in computing interest in connection with such payment.
2.16 Notification of Advances, Interest Rates and Prepayments.
Promptly after receipt thereof and within any specific time periods
established herein, the Administrative Agent will notify each Lender of the
contents of each Borrowing Notice, Conversion/Continuation Notice, and repayment
notice received by it hereunder. The Administrative Agent will notify each
Lender of the interest rate applicable to a LIBOR Rate Advance promptly upon
determination of such interest rate and will give each Lender prompt notice of
each change in the Alternate Base Rate.
2.17 Lending Installations.
Subject to Section 3.5, each Lender may book its Loans at any Lending
Installation selected by such Lender and may change its Lending Installation
from time to time. All terms of this Agreement shall apply to any such Lending
Installation and the Loans, and the Notes shall be deemed held by each Lender
for the benefit of such Lending Installation. Each Lender may, by written or
telex notice to the Administrative Agent and the Borrower, designate a Lending
Installation through which Loans will be made and for whose account Loan
payments are to be made.
2.18 Non-Receipt of Funds by the Administrative Agent.
Unless the Borrower or a Lender, as the case may be, notifies the
Administrative Agent prior to the time at which it is scheduled to make payment
to the Administrative Agent of (i) in the case of a Lender, the proceeds of a
Loan or (ii) in the case of the Borrower, a payment of principal, interest or
fees to the Administrative Agent for the account of the Lenders, that it does
not intend to make such payment, the Administrative Agent may assume that such
payment has been made. The Administrative Agent may, but shall not be obligated
to, make the amount of such payment available to the intended recipient in
reliance upon such assumption. If such Lender or the Borrower, as the case may
be, has not in fact made such payment to the Administrative Agent, the recipient
of such payment shall, on demand by the Administrative Agent, repay to the
Administrative Agent the amount so made available together with interest thereon
in respect of each day during the period commencing on the date such amount was
so made available by the Administrative Agent until the date the Administrative
Agent recovers such amount at a rate per annum equal to (i) in the case of
payment by a Lender, the Federal Funds Effective Rate for such day or (ii) in
the case of payment by the Borrower, the interest rate
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applicable to the relevant Loan. If such Lender so repays such amount and
interest thereon to the Administrative Agent within one Business Day after such
demand, all interest accruing on the Loan not funded by such Lender during such
period shall be payable to such Lender when received from the Borrower.
2.19 Replacement of Lenders under Certain Circumstances.
The Borrower shall be permitted to replace any Lender which (a) is not
capable of receiving payments without any deduction or withholding of United
States federal income tax pursuant to Section 3.5, or (b) cannot maintain its
LIBOR Rate Loans at a suitable Lending Installation pursuant to Section 3.3,
with a replacement bank or other financial institution; provided that (i) such
replacement does not conflict with any applicable legal or regulatory
requirements affecting the remaining Lenders, (ii) no Default or (after notice
thereof to Borrower) no Unmatured Default shall have occurred and be continuing
at the time of such replacement, (iii) the Borrower shall repay (or the
replacement bank or institution shall purchase, at par) all Loans and other
amounts owing to such replaced Lender prior to the date of replacement, (iv) the
Borrower shall be liable to such replaced Lender under Sections 3.4 and 3.6 if
any LIBOR Rate Loan owing to such replaced Lender shall be prepaid (or
purchased) other than on the last day of the Interest Period relating thereto,
(v) the replacement bank or institution, if not already a Lender, and the terms
and conditions of such replacement, shall be reasonably satisfactory to the
Administrative Agent, (vi) the replaced Lender shall be obligated to make such
replacement in accordance with the provisions of Section 12.3 (provided that the
Borrower shall be obligated to pay the processing fee referred to therein),
(vii) until such time as such replacement shall be consummated, the Borrower
shall continue to pay all amounts payable hereunder without setoff, deduction,
counterclaim or withholding and (viii) any such replacement shall not be deemed
to be a waiver of any rights which the Borrower, the Administrative Agent or any
other Lender shall have against the replaced Lender.
2.20 Application of Moneys Received.
All moneys collected or received by the Administrative Agent on account of
the Facility directly or indirectly, shall be applied in the following order of
priority:
(i) to the payment of all reasonable costs incurred in the
collection of such moneys of which the Administrative Agent
shall have given notice to the Borrower;
(ii) to the reimbursement of any yield protection due to any of
the Lenders in accordance with Section 3.1;
(iii) to the payment of all fees to the Administrative Agent, if
then due;
(iv) first to interest until paid in full to all Lenders (other
than Defaulting Lenders) in Tranche I first, and then to all
Lenders (other than Defaulting Lenders) in Tranche II, and
then to principal for all Lenders (other than Defaulting
Lenders) in Tranche I first, and then for all Lenders (other
than Defaulting Lenders) in Tranche II, in accordance with
the respective Tranche Percentages of the Lenders in Tranche
I and Tranche II, respectively provided that following the
occurrence of an Event of Default
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all payments to Lenders in Tranche I and Tranche II shall be
on a parri passu basis;
(v) any other sums due to the Administrative Agent or any Lender
under any of the Loan Documents;
(vi) to the payment of all amounts due to Defaulting Lenders; and
(vii) any remaining amount to Borrower.
2.21 Usury.
(a) This Agreement and each Note are subject to the express condition that
at no time shall Borrower be obligated or required to pay interest on the
principal balance of the Loan at a rate which could subject any Lender to either
civil or criminal liability as a result of being in excess of the Maximum Legal
Rate. If by the terms of this Agreement or the Loan Documents, Borrower is at
any time required or obligated to pay interest on the principal balance due
hereunder at a rate in excess of the Maximum Legal Rate, the interest rate or
the Default Rate, as the case may be, shall be deemed to be immediately reduced
to the Maximum Legal Rate and all previous payments in excess of the Maximum
Legal Rate shall be deemed to have been payments in reduction of principal and
not on account of the interest due hereunder. All sums paid or agreed to be paid
to any Lender for the use, forbearance, or detention of the sums due under its
Loan, shall, to the extent permitted by applicable law, be amortized, prorated,
allocated, and spread throughout the full stated term of the Loan until payment
in full so that the rate or amount of interest on account of the Loan does not
exceed the Maximum Legal Rate of interest from time to time in effect and
applicable to the Loan for so long as the Loan is outstanding
ARTICLE III
CHANGE IN CIRCUMSTANCES
3.1 Yield Protection.
If, on or after the date of this Agreement, the adoption of any law or any
governmental or quasi-governmental rule, regulation, policy, guideline or
directive (whether or not having the force of law), or any change in the
interpretation or administration thereof by any governmental or
quasi-governmental authority, central bank or comparable agency charged with the
interpretation or administration thereof, or compliance by any Lender or
applicable Lending Installation with any request or directive (whether or not
having the force of law) of any such authority, central bank or comparable
agency:
(i) subjects any Lender or any applicable Lending Installation
to any Taxes, or changes the basis of taxation of payments
(other than with respect to Excluded Taxes) to any Lender in
respect of its LIBOR Loan or participations therein, or
(ii) imposes or increases or deems applicable any reserve,
assessment, insurance charge, special deposit or similar
requirement against assets of, deposits with or for the
account of, or credit extended by, any Lender or
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any applicable Lending Installation (other than reserves and
assessments taken into account in determining the interest
rate applicable to a LIBOR Advance), or
(iii) imposes any other condition the result of which is to
increase the cost to any Lender or any applicable Lending
Installation of making, funding or maintaining its LIBOR
Loan, or reduces any amount receivable by any Lender or any
applicable Lending Installation in connection with its LIBOR
Loan or participations therein, or requires any Lender or
any applicable Lending Installation to make any payment
calculated by reference to the amount of its LIBOR Loan or
participations therein held or interest, by an amount deemed
material by such Lender,
and the result of any of the foregoing is to increase the cost to such Lender or
applicable Lending Installation, of making or maintaining its LIBOR Loan or to
reduce the return received by such Lender or applicable Lending Installation in
connection with such LIBOR Loan, or participations therein, then, within 30 days
of demand by such Lender, the Borrower shall pay such Lender such additional
amount or amounts as will compensate such Lender for such increased cost or
reduction in amount received.
3.2 Changes in Capital Adequacy Regulations.
If a Lender in good faith determines the amount of capital required or
expected to be maintained by such Lender, any Lending Installation of such
Lender or any corporation controlling such Lender is increased as a result of a
Change (as hereinafter defined), then, within 30 days of demand by such Lender,
the Borrower shall pay such Lender the amount necessary to compensate for any
shortfall in the rate of return on the portion of such increased capital which
such Lender in good faith determines is attributable to this Agreement, its
outstanding Loan or its obligation to make a Loan hereunder (after taking into
account such Lender's policies as to capital adequacy). "Change" means (i) any
change after the date of this Agreement in the Risk-Based Capital Guidelines (as
hereinafter defined) or (ii) any adoption of or change in any other law,
governmental or quasi-governmental rule, regulation, policy, guideline,
interpretation, or directive (whether or not having the force of law) after the
date of this Agreement which affects the amount of capital required or expected
to be maintained by any Lender or any Lending Installation or any corporation
controlling any Lender. "Risk-Based Capital Guidelines" means (i) the risk-based
capital guidelines in effect in the United States on the date of this Agreement,
including transition rules, and (ii) the corresponding capital regulations
promulgated by regulatory authorities outside the United States implementing the
July 1988 report of the Basle Committee on Banking Regulation and Supervisory
Practices Entitled "International Convergence of Capital Measurements and
Capital Standards," including transition rules, and any amendments to such
regulations adopted prior to the date of this Agreement.
3.3 Availability of Types of Advances.
If any Lender in good faith determines that maintenance of any of its LIBOR
Rate Loan at a suitable Lending Installation would violate any applicable law,
rule, regulation or directive, whether or not having the force of law, the
Administrative Agent shall suspend the availability of the affected Type of
Advance and require any LIBOR Rate Advance of the affected Type to be
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repaid; or if the Required Lenders in good faith determine that (i) deposits of
a type or maturity appropriate to match fund a LIBOR Rate Advance are not
available, the Administrative Agent shall suspend the availability of the
affected Type of Advance with respect to any LIBOR Rate Advance made after the
date of any such determination, or (ii) an interest rate applicable to a Type of
Advance does not accurately reflect the cost of making a LIBOR Rate Advance of
such Type, then, if for any reason whatsoever the provisions of Section 3.1 are
inapplicable, the Administrative Agent shall suspend the availability of the
affected Type of Advance with respect to any LIBOR Rate Advance made after the
date of any such determination. If the Borrower is required to so repay a LIBOR
Rate Advance, the Borrower may concurrently with such repayment borrow from the
Lenders, in the amount of such repayment, a Loan bearing interest at the
Alternate Base Rate.
3.4 Funding Indemnification.
If any payment of a LIBOR Rate Advance occurs on a date which is not the
last day of the applicable Interest Period, whether because of acceleration,
prepayment or otherwise, or a LIBOR Rate Advance is not made on the date
specified by the Borrower for any reason other than default by the Lenders or as
a result of unavailability pursuant to Section 3.3, the Borrower will indemnify
each Lender for any loss or cost incurred by it resulting therefrom, including,
without limitation, any loss or cost in liquidating or employing deposits
acquired to fund or maintain a LIBOR Rate Advance and shall pay all such losses
or costs within fifteen (15) days after written demand therefor.
3.5 Taxes.
(a) All payments by the Borrower to or for the account of any Lender or the
Administrative Agent hereunder or under any Note shall be made free and clear of
and without deduction for any and all Taxes. If the Borrower shall be required
by law to deduct any Taxes from or in respect of any sum payable hereunder to
any Lender or the Administrative Agent, (a) the sum payable shall be increased
as necessary so that after making all required deductions (including deductions
applicable to additional sums payable under this Section 3.5) such Lender or the
Administrative Agent (as the case may be) receives an amount equal to the sum it
would have received had no such deductions been made, (b) the Borrower shall
make such deductions, (c) the Borrower shall pay the full amount deducted to the
relevant authority in accordance with applicable law and (d) the Borrower shall
furnish to the Administrative Agent the original copy of a receipt evidencing
payment thereof within 30 days after such payment is made.
(b) In addition, the Borrower hereby agrees to pay any present or future
stamp or documentary taxes and any other excise or property taxes, charges or
similar levies which arise from any payment made hereunder or under any Note or
from the execution or delivery of, or otherwise with respect to, this Agreement
or any Note ("Other Taxes").
(c) The Borrower hereby agrees to indemnify the Administrative Agent and
each Lender for the full amount of Taxes or Other Taxes (including, without
limitation, any Taxes or Other Taxes imposed on amounts payable under this
Section 3.5) paid by the Administrative Agent or such Lender and any liability
(including penalties, interest and expenses) arising therefrom or with respect
thereto. Payments due under this indemnification shall be made within 30 days of
the date the Administrative Agent or such Lender makes demand therefor pursuant
to Section 3.6.
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(d) Each Lender that is not incorporated under the laws of the United
States of America or a state thereof (each a "Non-U.S. Lender") agrees that it
will, not more than ten Business Days after the date of this Agreement, (i)
deliver to each of the Borrower and the Administrative Agent two duly completed
copies of United States Internal Revenue Service Form W-8BEN or W-8ECI,
certifying in either case that such Lender is entitled to receive payments under
this Agreement without deduction or withholding of any United States federal
income taxes, and (ii) deliver to each of the Borrower and the Administrative
Agent a United States Internal Revenue Form W-8 or W-9, as the case may be, and
certify that it is entitled to an exemption from United States backup
withholding tax. Each Non-U.S. Lender further undertakes to deliver to each of
the Borrower and the Administrative Agent (x) renewals or additional copies of
such form (or any successor form) on or before the date that such form expires
or becomes obsolete, and (y) after the occurrence of any event requiring a
change in the most recent forms so delivered by it, such additional forms or
amendments thereto as may be reasonably requested by the Borrower or the
Administrative Agent. All forms or amendments described in the preceding
sentence shall certify that such Lender is entitled to receive payments under
this Agreement without deduction or withholding of any United States federal
income taxes, unless an event (including without limitation any change in
treaty, law or regulation) has occurred prior to the date on which any such
delivery would otherwise be required which renders all such forms inapplicable
or which would prevent such Lender from duly completing and delivering any such
form or amendment with respect to it and such Lender advises the Borrower and
the Administrative Agent that it is not capable of receiving payments without
any deduction or withholding of United States federal income tax.
(e) For any period during which a Non-U.S. Lender has failed to provide the
Borrower with an appropriate form pursuant to clause (d), above (unless such
failure is due to a change in treaty, law or regulation, or any change in the
interpretation or administration thereof by any governmental authority,
occurring subsequent to the date on which a form originally was required to be
provided), such Non-U.S. Lender shall not be entitled to indemnification under
this Section 3.5 with respect to Taxes imposed by the United States.
(f) Any Lender that is entitled to an exemption from or reduction of
withholding tax with respect to payments under this Agreement or any Note
pursuant to the law of any relevant jurisdiction or any treaty shall deliver to
the Borrower (with a copy to the Administrative Agent), at the time or times
prescribed by applicable law, such properly completed and executed documentation
prescribed by applicable law as will permit such payments to be made without
withholding or at a reduced rate following receipt of such documentation.
(g) If the U.S. Internal Revenue Service or any other governmental
authority of the United States or any other country or any political subdivision
thereof asserts a claim that the Administrative Agent did not properly withhold
tax from amounts paid to or for the account of any Lender (because the
appropriate form was not delivered or properly completed, because such Lender
failed to notify the Administrative Agent of a change in circumstances which
rendered its exemption from withholding ineffective, or for any other reason),
such Lender shall indemnify the Administrative Agent fully for all amounts paid,
directly or indirectly, by the Administrative Agent as tax, withholding
therefor, or otherwise, including penalties and interest, and including taxes
imposed by any jurisdiction on amounts payable to the Administrative Agent under
this subsection, together with all costs and expenses related thereto (including
attorneys fees and time charges of attorneys for the Administrative Agent, which
attorneys may be employees of the
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Administrative Agent). The obligations of the Lenders under this Section 3.5(g)
shall survive the payment of the Obligations and termination of this Agreement.
3.6 Lender Statements; Survival of Indemnity.
To the extent reasonably possible, each Lender shall designate an alternate
Lending Installation with respect to its LIBOR Rate Loan to reduce any liability
of the Borrower to such Lender under Sections 3.1, 3.2 and 3.5 or to avoid the
unavailability of a LIBOR Rate Advance under Section 3.3, so long as such
designation is not, in the reasonable judgment of such Lender, disadvantageous
to such Lender. Each Lender shall deliver a written statement of such Lender to
the Borrower (with a copy to the Administrative Agent) as to the amount due, if
any, under Section 3.1, 3.2, 3.4 or 3.5. Such written statement shall set forth
in reasonable detail the calculations upon which such Lender determined such
amount and shall be final, conclusive and binding on the Borrower in the absence
of manifest error. Determination of amounts payable under such Sections in
connection with a LIBOR Rate Loan shall be calculated as though each Lender
funded its LIBOR Rate Loan through the purchase of a deposit of the type and
maturity corresponding to the deposit used as a reference in determining the
LIBOR Rate applicable to such Loan, whether in fact that is the case or not.
Unless otherwise provided herein, the amount specified in the written statement
of any Lender shall be payable on demand after receipt by the Borrower of such
written statement. The obligations of the Borrower under Sections 3.1, 3.2, 3.4
and 3.5 shall survive payment of the Obligations and termination of this
Agreement.
ARTICLE IV
CONDITIONS PRECEDENT
4.1 Advance.
The Lenders shall not be required to make the single disbursement hereunder
unless
(a) the Borrower prior to or concurrently with such disbursement, shall
have paid all fees due and payable to the Lenders, the Arranger and the
Administrative Agent hereunder;
(b) The Borrower shall have furnished to the Administrative Agent, with
sufficient copies for the Lenders, the following:
(i) The duly executed originals of the Loan Documents, including
the Notes, payable to the order of each of the Lenders, and
this Agreement;
(ii) (A) Certificates of good standing for the Borrower, the
General Partners and each Material Subsidiary, from the
states in which they are organized and have their principal
place of business and chief executive offices, certified by
the appropriate governmental officer and dated not more than
thirty (30) days prior to the Agreement Execution Date, and
(B) foreign qualification certificates for the Borrower and
each Material Subsidiary, certified by the appropriate
governmental officer and dated not more than sixty (60) days
prior to the Agreement Execution Date for each other
jurisdiction where the failure of such entity to so qualify
or be licensed (if required) would have a Material Adverse
Effect;
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(iii) Copies of the formation documents (including code of
regulations, if appropriate) of the Borrower and the General
Partners, certified by an officer of the applicable General
Partner, together with all amendments thereto;
(iv) Incumbency certificates, executed by officers of the
applicable General Partner(s), which shall identify by name
and title and bear the signature of the Persons authorized
to sign the Loan Documents and to make borrowings hereunder
on behalf of the Borrower, upon which certificate the
Administrative Agent and the Lenders shall be entitled to
rely until informed of any change in writing by the
Borrower;
(v) Copies, certified by a Secretary or an Assistant Secretary
of the applicable General Partner, of the Board of
Directors' resolutions (and resolutions of other bodies, if
any are reasonably deemed necessary by counsel for any
Lender) of each General Partner authorizing the Advance
provided for herein, with respect to the Borrower, and the
execution, delivery and performance of the Loan Documents to
be executed and delivered by the Borrower hereunder;
(vi) A written opinion of the Borrower's counsel, addressed to
the Lenders in substantially the form of Exhibit B hereto or
such other form as the Administrative Agent may reasonably
approve;
(vii) A certificate, signed by an officer of Chateau Parent,
stating that on the Borrowing Date no Default or Unmatured
Default has occurred and is continuing and that all
representations and warranties of the Borrower are true and
correct as of the Borrowing Date provided that such
certificate is in fact true and correct;
(viii) The most recent financial statements of the Borrower,
Chateau Parent and the Target;
(ix) UCC financing statement, judgment, and tax lien searches
with respect to the Borrower from the states in which the
Borrower is organized and has its principal place of
business and chief executive offices;
(x) Written money transfer instructions, in substantially the
form of Exhibit E hereto, addressed to the Administrative
Agent and signed by an Authorized Officer, together with
such other related money transfer authorizations as the
Administrative Agent may have reasonably requested;
(xi) A pro forma compliance certificate in the form of Exhibit C
as of March 31, 2001, giving effect to the Merger and
projections ("Projections") for the next two years, executed
by the Borrower's chief financial officer or chief
accounting officer based on the assumption that the Merger
had been consummated as of such a date, and such other
information as the Administrative Agent may reasonably
request;
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(xii) The Merger Agreement, together with such evidence as the
Administrative Agent may require that all of the conditions
precedent to the Merger shall have been satisfied (or waived
with the approval of the Administrative Agent), and that the
transactions contemplated by the Merger Agreement (in full)
shall have closed simultaneously with the disbursement of
the Facility; and
(xiii) Such other documents as any Lender or its counsel may have
reasonably requested, the form and substance of which
documents shall be reasonably acceptable to the parties and
their respective counsel.
(c) There exists no Default or Unmatured Default;
(d) The representations and warranties contained in Article V are true and
correct in all material respects as of the Borrowing Date with respect to
Borrower and to any Subsidiary in existence on the Borrowing Date, except to the
extent any such representation or warranty is stated to relate solely to an
earlier date, in which case such representation or warranty shall be true and
correct on and as of such earlier date; and
(e) There shall have been no change in the business, Property or condition
(financial or otherwise) of the Borrower and its Subsidiaries from the
preparation date of the most recent consolidated financial statements which
could reasonably be expected to have a Material Adverse Effect.
(f) There shall have been no change in the business, Property or condition
(financial or otherwise) of the Target's business, operations, performance or
properties as reflected in the Target's consolidated financial statements as of
December 31, 2000, previously delivered to the Administrative Agent, which could
reasonably be expected to have a Material Adverse Effect.
(g) There shall have been no material adverse change in the primary and
secondary loan syndication markets or capital markets generally that could
impair syndication of the Facilities.
(h) There shall be no injunction or temporary restraining order which, in
the judgment of the Administrative Agent would prohibit the making of the Loan
or the consummation of the Merger. There shall also be no litigation that would
reasonably be expected to result in a material adverse effect on the business
currently conducted by the Target.
(i) The Borrowing Notice shall constitute a representation and warranty by
the Borrower that all such conditions have been satisfied or waived in
accordance with the terms hereof or will have been satisfied or waived in
accordance with the terms hereof concurrently with the funding.
(j) The Borrower shall provide the Lenders with a waiver of, or amendment
to, covenants in the Revolving Credit Agreement which, but for such amendment or
waiver, would otherwise be breached by the transactions contemplated by the
Merger or this Agreement, in a form satisfactory to the Administrative Agent.
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ARTICLE V
REPRESENTATIONS AND WARRANTIES
The Borrower represents and warrants to the Lenders that:
5.1 Existence.
Borrower is a limited partnership duly organized and validly existing as a
limited partnership under the laws of the State of Maryland, with its principal
place of business in Englewood, Colorado and is duly qualified as a foreign
limited partnership, properly licensed (if required), in good standing and has
all requisite authority to conduct its business in each jurisdiction in which
its business is conducted, except where the failure to be so qualified, licensed
and in good standing and to have the requisite authority would not have a
Material Adverse Effect. Each of Borrower's Subsidiaries is duly organized,
validly existing and in good standing under the laws of its jurisdiction of
organization and has all requisite authority to conduct its business in each
jurisdiction in which its business is conducted. As of the Agreement Execution
Date, the only general partners of Borrower are ROC Communities, Inc. and
Chateau Parent.
5.2 Existence of Chateau Parent.
Chateau Parent is a corporation duly organized and validly existing as a
corporation under the laws of the State of Maryland and is qualified as a real
estate investment trust under Section 856 through 860 of the Code, with its
principal place of business in Englewood, Colorado and is duly qualified as a
foreign corporation, properly licensed (if required), in good standing and has
all requisite authority to conduct its business in each jurisdiction in which
its business is conducted, except where the failure to be so qualified, licensed
and in good standing and to have the requisite authority would not have a
Material Adverse Effect. Each of Chateau Parent's Subsidiaries is duly
organized, validly existing and in good standing under the laws of its
jurisdiction of organization and has all requisite authority to conduct its
business in each jurisdiction in which its business is conducted. As of the
Agreement Execution Date, the only assets of Chateau Parent (other than cash
held for distribution to its shareholders) are its interest in Borrower, its
interest in ROC Communities, Inc., its 100% ownership of the Windsor Corporation
and its interest in various partnerships in which it owns, directly or
indirectly, not more than 1% of the partnership interests and in which Borrower
owns, directly or indirectly, all of the remaining partnership interests.
5.3 Existence of ROC.
ROC Communities, Inc. is a corporation duly organized and validly existing
as a corporation under the laws of the State of Maryland with its principal
place of business in Englewood, Colorado and is duly qualified as a foreign
corporation, properly licensed (if required), in good standing and has all
requisite authority to conduct its business in each jurisdiction in which its
business is conducted, except where the failure to be so qualified, licensed and
in good standing and to have the requisite authority would not have a Material
Adverse Effect. Each of ROC Communities, Inc.'s Subsidiaries is duly organized,
validly existing and in good standing under the laws of its jurisdiction of
organization and has all requisite authority to conduct its business in each
jurisdiction in which its business is conducted.
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As of the Agreement Execution Date, the only assets of ROC Communities, Inc.
(other than cash held for distribution to its shareholders) are its interest in
Borrower and 100% of the common stock in CCC, Inc., which is the sole general
partner of, and the holder of a 1% partnership interest in, CCF Financing
Partnership.
5.4 Authorization and Validity.
The Borrower has the power and authority and legal right to execute and
deliver the Loan Documents and to perform its obligations thereunder. The
execution and delivery by the Borrower of the Loan Documents and the performance
of its obligations thereunder have been duly authorized by proper proceedings,
and the Loan Documents constitute legal, valid and binding obligations of the
Borrower enforceable against the Borrower in accordance with their terms, except
as enforceability may be limited by bankruptcy, insolvency or similar laws
affecting the enforcement of creditors' rights generally and general principles
of equity.
5.5 No Conflict; Government Consent.
Neither the execution and delivery by the Borrower of the Loan Documents,
nor the consummation of the transactions therein contemplated, nor compliance
with the provisions thereof will violate any law, rule, regulation, order, writ,
judgment, injunction, decree or award binding on the Borrower, any of its
Subsidiaries or the General Partners or the partnership agreement, articles of
incorporation or by-laws or other organizational documents, as the case may be,
of such entities, or the provisions of any indenture, instrument or agreement to
which the Borrower, any of its Subsidiaries or any General Partner is a party or
is subject, or by which it, or its Property, is bound, or conflict with or
constitute a default thereunder, except where such violation, conflict or
default would not have a Material Adverse Effect, or result in the creation or
imposition of any Lien in, of or on the Property of the Borrower or a Subsidiary
or a General Partner pursuant to the terms of any such indenture, instrument or
agreement. No order, consent, approval, license, authorization, or validation
of, or filing, recording or registration with, or exemption by, any governmental
or public body or authority, or any subdivision thereof, is required in
connection with the execution, delivery and performance of any of the Loan
Documents other than the filing of a copy of this Agreement, or the filing of
information concerning this Agreement, with the Securities and Exchange
Commission, the New York Stock Exchange and certain state securities
administrators. No order, consent, approval, license, authorization or
validation of, or filing, recording or registration with, or exception by, any
governmental or public body or authority, or any subdivision thereof, is
required to authorize, or for the legality, validity, binding effect or
enforceability of, any of the Loan Documents.
5.6 Financial Statements; Material Adverse Change.
All consolidated financial statements of the Borrower and its Subsidiaries
heretofore delivered to the Lenders were prepared in accordance with GAAP in
effect on the preparation date of such statements and fairly present in all
material respects the consolidated financial condition and operations of the
Borrower and its Subsidiaries at such date and the consolidated results of their
operations for the period then ended, subject, in the case of interim financial
statements, to normal and customary year-end adjustments. From the preparation
date of the most recent financial statements delivered to the Lenders through
the Agreement Execution Date, there was no change in the business, Property, or
condition (financial or otherwise) of the
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Borrower and its Subsidiaries which could reasonably be expected to have a
Material Adverse Effect.
5.7 Taxes.
The Borrower and its Subsidiaries have filed all United States federal tax
returns and all other tax returns which are required to be filed and have paid
all taxes due pursuant to said returns or pursuant to any assessment received by
the Borrower or any of its Subsidiaries except such taxes, if any, as are being
contested in good faith and as to which adequate reserves have been provided. No
tax liens have been filed and remain outstanding. The charges, accruals and
reserves on the books of the Borrower and its Subsidiaries in respect of any
taxes or other governmental charges are adequate.
5.8 Litigation and Guarantee Obligations.
Except as set forth on Schedule 3 hereto or as set forth in written notice
to the Administrative Agent from time to time, there is no litigation,
arbitration, governmental investigation, proceeding or inquiry pending or, to
the knowledge of any of their officers, threatened against or affecting the
Borrower or any of its Subsidiaries which could reasonably be expected to have a
Material Adverse Effect. The Borrower has no material contingent obligations not
provided for or disclosed in the financial statements referred to in Section 6.1
or as set forth in written notices to the Administrative Agent given from time
to time after the Agreement Execution Date on or about the date such material
contingent obligations are incurred.
5.9 Subsidiaries.
Schedule 1 hereto contains, as of the Agreement Execution Date, an accurate
list of all of the presently existing Subsidiaries of the Borrower, setting
forth their respective jurisdictions of incorporation and the percentage of
their respective equity securities owned by the Borrower or other Subsidiaries.
All of the issued and outstanding shares of equity securities of such
Subsidiaries have been duly authorized and issued and are fully paid and
non-assessable.
5.10 ERISA.
The Unfunded Liabilities of all Single Employer Plans as of the Agreement
Execution Date do not in the aggregate exceed $1,000,000 or, subsequent to the
Agreement Execution Date, exceed in the aggregate an amount which could have a
Material Adverse Effect. Neither the Borrower nor any other member of the
Controlled Group has incurred, or is reasonably expected to incur, any
withdrawal liability to Multiemployer Plans in excess of $250,000 in the
aggregate as of the Agreement Execution Date, or subsequent to the Agreement
Execution Date, exceed in the aggregate an amount which could have a Material
Adverse Effect. Each Plan (other than a Multiemployer Plan) complies in all
material respects with all applicable requirements of law and regulations (other
than those the failure with which to comply would not result in a Material
Adverse Effect), no Reportable Event has occurred with respect to any Plan
(other than a Multiemployer Plan), neither the Borrower nor any other members of
the Controlled Group has withdrawn from any Multiemployer Plan or initiated
steps to do so, and no steps have been taken to reorganize or terminate any
Multiemployer Plan which could reasonably be expected to have a Material Adverse
Effect.
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5.11 Accuracy of Information.
All factual information heretofore or contemporaneously furnished by or on
behalf of the Borrower or any of its Subsidiaries to the Administrative Agent or
any Lender for purposes of or in connection with this Agreement or any
transaction contemplated hereby is, and all other such factual information
hereafter furnished by or on behalf of the Borrower or any of its Subsidiaries
to the Administrative Agent or any Lender, including any information provided
with respect to the Target, will be, to the knowledge of Borrower, true and
accurate (taken as a whole) in all material respects on the date as of which
such information is dated or certified and not incomplete by omitting to state
any material fact necessary to make such information (taken as a whole) not
misleading in light of the circumstances and purposes for which such information
was provided at such time.
5.12 Regulation U.
The Borrower has not used the proceeds of any Advance to buy or carry any
margin stock (as defined in Regulation U) in violation of the terms of this
Agreement.
5.13 Material Agreements.
Neither the Borrower nor any Subsidiary is a party to any agreement or
instrument or subject to any charter or other corporate restriction which could
reasonably be expected to have a Material Adverse Effect. Neither the Borrower
nor any Subsidiary is in default in the performance, observance or fulfillment
of any of the obligations, covenants or conditions contained in (i) any
agreement to which it is a party, which default could have a Material Adverse
Effect, or (ii) any agreement or instrument evidencing or governing
Indebtedness, which default would constitute a Default hereunder.
5.14 Compliance With Laws.
The Borrower and its Subsidiaries have complied with all applicable
statutes, rules, regulations, orders and restrictions of any domestic or foreign
government or any instrumentality or agency thereof, having jurisdiction over
the conduct of their respective businesses or the ownership of their respective
Property, except for any non-compliance which would not have a Material Adverse
Effect. Neither the Borrower nor any Subsidiary has received any notice to the
effect that its operations are not in material compliance with any of the
requirements of applicable federal, state and local environmental, health and
safety statutes and regulations or the subject of any federal or state
investigation evaluating whether any remedial action is needed to respond to a
release of any toxic or hazardous waste or substance into the environment, which
non-compliance or remedial action could have a Material Adverse Effect.
5.15 Ownership of Properties.
Except as set forth on Schedule 2 hereto, on the date of this Agreement,
the Borrower and its Subsidiaries will have good and marketable (or the
equivalent) title, free of all Liens other than those permitted by Section 6.15,
to all of the Property and assets reflected in the financial statements as owned
by it, and will contemporaneously with the disbursement hereunder and the
consummation of the Merger, have good and marketable (or the equivalent) title,
free of all Liens
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other than those permitted by Section 6.15, to all of the Property and assets
reflected in the financial statements of the Target as owned by the Target.
5.16 Plan Assets; Prohibited Transactions.
The Borrower is not an entity deemed to hold "plan assets" within the
meaning of 29 C.F.R. ss. 2510.3-101 of an employee benefit plan (as defined in
Section 3(3) of ERISA) which is subject to Title I of ERISA or any plan (within
the meaning of Section 4975 of the Code), and, assuming that no Lender's assets
constitute "plan assets", neither the execution of this Agreement nor the making
of Credit Extensions hereunder gives rise to a prohibited transaction within the
meaning of Section 406 of ERISA or Section 4975 of the Code.
5.17 Investment Company Act.
Neither the Borrower nor any Subsidiary is an "investment company" or a
company "controlled" by an "investment company", within the meaning of the
Investment Company Act of 1940, as amended.
5.18 Public Utility Holding Company Act.
Neither the Borrower nor any Subsidiary is a "holding company" or a
"subsidiary company" of a "holding company", or an "affiliate" of a "holding
company" or of a "subsidiary company" of a "holding company", within the meaning
of the Public Utility Holding Company Act of 1935, as amended.
5.19 Solvency.
(i) Immediately after the Agreement Execution Date (taking into
account the effect of the Merger and the Indebtedness incurred hereunder)
and the application of the proceeds of such Indebtedness, (a) the fair
value of the assets of the Borrower and its Subsidiaries on a consolidated
basis, at a fair valuation, will exceed the debts and liabilities,
subordinated, contingent or otherwise, of the Borrower and its Subsidiaries
on a consolidated basis; (b) the present fair saleable value of the
Property of the Borrower and its Subsidiaries on a consolidated basis will
be greater than the amount that will be required to pay the probable
liability of the Borrower and its Subsidiaries on a consolidated basis on
their debts and other liabilities, subordinated, contingent or otherwise,
as such debts and other liabilities become absolute and matured; (c) the
Borrower and its Subsidiaries on a consolidated basis will be able to pay
their debts and liabilities, subordinated, contingent or otherwise, as such
debts and liabilities become absolute and matured; and (d) the Borrower and
its Subsidiaries on a consolidated basis will not have unreasonably small
capital with which to conduct the businesses in which they are engaged as
such businesses are now conducted and are proposed to be conducted after
the date hereof.
(ii) The Borrower does not intend to, or to permit any of its
Subsidiaries to, and does not believe that it or any of its Subsidiaries
will, incur debts beyond its ability to pay such debts as they mature,
taking into account the timing of and amounts of cash to be received by it
or any such Subsidiary and the timing of the amounts of cash to be payable
on or in respect of its Indebtedness or the Indebtedness of any such
Subsidiary.
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5.20 Insurance.
The Borrower and its Subsidiaries carry insurance on their Projects with
financially sound and reputable insurance companies, in such amounts, with such
deductibles and covering such risks as are customarily carried by companies
engaged in similar businesses and owning similar Projects in localities where
the Borrower and its Subsidiaries operate, including, without limitation:
(i) Property and casualty insurance in the amount of the
replacement cost of the improvements at the Project (other
than improvements owned by a tenant thereof), including
flood and other water damage insurance as deemed appropriate
by the Borrower, depending on the location and flood zone;
(ii) Insurance that covers builder's risk exposures on projects
under construction;
(iii) Loss of rental income insurance for up to six months
following a covered property loss; and
(iv) Liability insurance in an amount of at least $6,000,000 per
occurrence.
5.21 REIT Status.
Chateau Parent's common stock is listed on the New York Stock Exchange and
Chateau Parent is in compliance with all requirements for continued listing of
such stock, and Chateau Parent is qualified as a real estate investment trust
under Sections 856 through 860 of the Code and currently is in compliance in all
material respects with all provisions of the Code applicable to the
qualification of Chateau Parent as a real estate investment trust under such
Code sections.
5.22 Environmental Matters.
Each of the following representations and warranties is true and correct on
and as of the Agreement Execution Date except as disclosed on Schedule 4
attached hereto and to the extent that the facts and circumstances giving rise
to any such failure to be so true and correct, in the aggregate, could not
reasonably be expected to have a Material Adverse Effect:
(a) To the best knowledge of the Borrower, the Properties of the Borrower
and its Subsidiaries do not contain any Materials of Environmental Concern in
amounts or concentrations which constitute a violation of, or could reasonably
be expected to give rise to liability of the Borrower or any Subsidiary under,
Environmental Laws.
(b) To the best knowledge of the Borrower, (i) the Properties of the
Borrower and its Subsidiaries and all operations at the Projects are in
compliance with all applicable Environmental Laws, and (ii) with respect to all
Properties owned by the Borrower and/or its Subsidiaries (x) for at least two
(2) years, have in the last two years, or (y) for less than two (2) years, have
for such period of ownership, been in compliance in all material respects with
all applicable Environmental Laws.
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(c) Neither the Borrower nor any of its Subsidiaries has received any
notice of violation, alleged violation, non-compliance, liability or potential
liability regarding environmental matters or compliance with Environmental Laws
with regard to any of the Properties which remains outstanding, nor does the
Borrower have knowledge or reason to believe that any such notice will be
received or is being threatened in writing.
(d) To the best knowledge of the Borrower, Materials of Environmental
Concern have not been transported or disposed of from the Projects of the
Borrower and its Subsidiaries in violation of, or in a manner or to a location
which could reasonably be expected to give rise to liability of the Borrower or
any Subsidiary under, Environmental Laws, nor have any Materials of
Environmental Concern been generated, treated, stored or disposed of at, on or
under any of the Properties of the Borrower and its Subsidiaries in violation
of, or in a manner that could reasonably be expected to give rise to liability
of the Borrower or any Subsidiary under, any applicable Environmental Laws.
(e) No judicial proceeding or governmental or administrative action is
pending, or, to the knowledge of the Borrower, threatened, under any
Environmental Law to which the Borrower or any of its Subsidiaries is a party
or, to the Borrower's knowledge, will be named as a party with respect to the
Projects of the Borrower and its Subsidiaries, nor are there any consent decrees
or other decrees, consent orders, administrative order or other orders, or other
administrative or judicial requirements outstanding under any Environmental Law
with respect to the Properties of the Borrower and its Subsidiaries.
(f) To the best knowledge of the Borrower, there has been no release or
threat of release of Materials of Environmental Concern at or from the
Properties of the Borrower and its Subsidiaries, or arising from or related to
the operations of the Borrower and its Subsidiaries in connection with the
Projects in violation of or in amounts or in a manner that could reasonably be
expected to give rise to liability under Environmental Laws.
The Borrower represents that the matters disclosed on Schedule 4 could not
reasonably be expected to have a Material Adverse Effect.
ARTICLE VI
COVENANTS
During the term of this Agreement, unless the Required Lenders shall
otherwise consent in writing:
6.1 Financial Reporting.
The Borrower will maintain, for itself and each Subsidiary, a system of
accounting established and administered in accordance with GAAP, and furnish to
the Lenders the following (provided that the following balance sheets and
statements may be furnished in the form of balance sheets and statements of
Chateau Parent, with accompanying adjustments and calculations adequate to
separately determine the financial condition of the Borrower and its
Subsidiaries):
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(i) As soon as available, but in any event not later than 60
days after the close of each of the first three fiscal
quarters, for the Borrower and its Consolidated
Subsidiaries, an unaudited consolidated balance sheet as of
the close of each such period and the related unaudited
consolidated statements of income of the Borrower and its
Consolidated Subsidiaries for such period and the portion of
the fiscal year through the end of such period, setting
forth in each case in comparative form the figures for the
previous year, all certified by the Borrower's chief
financial officer or chief accounting officer;
(ii) As soon as available, but in any event not later than 60
days after the close of each fiscal quarter, for the
Borrower and its Consolidated Subsidiaries, the following
reports in form and substance reasonably satisfactory to the
Lenders, all certified by the entity's chief financial
officer or chief accounting officer: a statement of Funds
From Operations, a statement detailing Consolidated
Outstanding Indebtedness, Consolidated Secured Indebtedness,
Consolidated Senior Unsecured Indebtedness, Unconsolidated
Debt Service and EBITDA (with a breakdown between
Unencumbered Assets and other assets), a report listing and
describing all newly acquired Projects, including their net
operating income, cash flow, cost and secured or unsecured
Indebtedness assumed in connection with such acquisition, if
any, summary information and such other information on all
Projects as may be reasonably requested, including, without
limitation, if requested by the Administrative Agent,
operating statements in form reasonably satisfactory to
Administrative Agent;
(iii) As soon as available, but in any event not later than 120
days after the close of each fiscal year, for the Borrower
and its Subsidiaries, audited financial statements,
including a consolidated balance sheet as at the end of such
year and the related consolidated statements of income and
retained earnings and of cash flows for such year, setting
forth in each case in comparative form the figures for the
previous year, without a "going concern" or like
qualification or exception, or qualification arising out of
the scope of the audit, prepared by PricewaterhouseCoopers
L.L.P. (or other independent certified public accountants of
nationally recognized standing reasonably acceptable to
Administrative Agent);
(iv) As soon as available, but in any event not later than 120
days after the close of each fiscal year, for the Borrower
and its Subsidiaries, a statement detailing the
contributions to EBITDA from each individual Project for the
prior fiscal year in form and substance reasonably
satisfactory to the Lenders, certified by the entity's chief
financial officer or chief accounting officer;
(v) Upon the request of the Administrative Agent, a statement of
cash flows for each individual Project and, to the extent
not included in the Securities and Exchange Commission
filings, a listing of capital expenditures;
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(vi) Together with the quarterly and annual financial statements
required hereunder, a compliance certificate in
substantially the form of Exhibit C hereto signed by the
Borrower's chief financial officer or chief accounting
officer showing the calculations and computations necessary
to determine compliance with this Agreement (including pro
forma calculations of the covenants taking into account a
newly designated Capitalization Rate that has not yet become
effective) and stating that, to such officer's knowledge, no
Default or Unmatured Default exists, or if, to such
officer's knowledge, any Default or Unmatured Default
exists, stating the nature and status thereof;
(vii) As soon as possible and in any event within 15 days after a
responsible officer of the Borrower knows that any
Reportable Event has occurred with respect to any Plan, a
statement, signed by the chief financial officer of the
Borrower, describing said Reportable Event and the action
which the Borrower proposes to take with respect thereto;
(viii) As soon as possible and in any event within 15 days after
receipt by a responsible officer of the Borrower, a copy of
(a) any notice or claim to the effect that the Borrower or
any of its Subsidiaries is or may be liable to any Person as
a result of the release by the Borrower, any of its
Subsidiaries, or any other Person of any toxic or hazardous
waste or substance into the environment, and (b) any notice
alleging any violation of any federal, state or local
environmental, health or safety law or regulation by the
Borrower or any of its Subsidiaries, which, in either case,
could have a Material Adverse Effect;
(ix) Promptly upon the furnishing thereof to the shareholders of
Chateau Parent, copies of all financial statements, reports
and proxy statements so furnished;
(x) Promptly upon the filing thereof, copies of all registration
statements and annual, quarterly, monthly or other reports
and any other public information which the Borrower, the
General Partners or any of their respective Subsidiaries
file with the Securities and Exchange Commission; and
(xi) Such other information (including, without limitation,
financial statements for the Borrower and non-financial
information) as the Administrative Agent or any Lender may
from time to time reasonably request.
6.2 Use of Proceeds.
The Borrower will use the proceeds of this Facility to finance the costs
incurred in completing the Merger. The Borrower will not, nor will it permit any
Subsidiary to, use any of the proceeds of the Advances (i) to purchase or carry
any "margin stock" (as defined in Regulation U) if such usage could constitute a
violation of Regulation U by any Lender, (ii) to fund any purchase of, or offer
for, any Capital Stock of any Person, unless such Person (or its board of
directors, general partner or equivalent in other entities) has consented to
such offer
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prior to any public announcements relating thereto, or (iii) to make any
Acquisition other than a Permitted Acquisition.
6.3 Notice of Default.
The Borrower will give, and will cause each of its Subsidiaries to give,
prompt notice in writing to the Lenders of the occurrence of any Default or
Unmatured Default and of any other development, financial or otherwise, which
could reasonably be expected to have a Material Adverse Effect.
6.4 Conduct of Business.
The Borrower will do, and will cause each of its Subsidiaries and the
General Partners to do, all things necessary to remain duly incorporated or duly
qualified, validly existing and in good standing as a real estate investment
trust, corporation, general partnership or limited partnership, as the case may
be, in its jurisdiction of incorporation/formation and maintain all requisite
authority to conduct its business in each jurisdiction in which its business is
conducted and to carry on and conduct their businesses in substantially the same
manner as they are presently conducted where the failure to do so could
reasonably be expected to have a Material Adverse Effect and, specifically,
neither the Borrower nor its Subsidiaries may undertake any business other than
the acquisition, development, ownership, management, operation, leasing,
improvement, renovation and expansion of manufactured home communities and
ancillary businesses specifically related to such types of properties.
6.5 Taxes.
The Borrower will pay, and will cause each of its Subsidiaries to pay, when
due all taxes, assessments and governmental charges and levies upon them of
their income, profits or Projects, except those which are being contested in
good faith by appropriate proceedings and with respect to which adequate
reserves have been set aside.
6.6 Insurance.
The Borrower will, and will cause each of its Subsidiaries to, maintain
with financially sound and reputable insurance companies insurance on all their
Property in such amounts, with such deductibles and covering such risks as are
customarily carried by companies engaged in similar businesses and owning
similar projects in localities where the Borrower and its Subsidiaries operate,
including without limitation the coverages described in Section 5.19, and the
Borrower will furnish to any Lender upon reasonable request full information as
to the insurance carried.
6.7 Compliance with Laws.
The Borrower will, and will cause each of its Subsidiaries to, comply with
all laws, rules, regulations, orders, writs, judgments, injunctions, decrees or
awards to which they may be subject, the violation of which could reasonably be
expected to have a Material Adverse Effect.
6.8 Maintenance of Properties.
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The Borrower will, and will cause each of its Subsidiaries to, do all
things necessary to maintain, preserve, protect and keep their respective
Projects and all Properties reasonably necessary for the continuous operation of
the Projects, in good repair, working order and condition, ordinary wear and
tear excepted.
6.9 Inspection.
The Borrower will, and will cause each of its Subsidiaries to, permit the
Lenders upon reasonable notice, by their respective representatives and agents,
to inspect any of the Projects, corporate books and financial records of the
Borrower and each of its Subsidiaries, to examine and make copies of the books
of accounts and other financial records of the Borrower and each of its
Subsidiaries, and to discuss the affairs, finances and accounts of the Borrower
and each of its Subsidiaries with officers thereof, and to be advised as to the
same by, their respective officers at such reasonable times and intervals as the
Lenders may designate.
6.10 Maintenance of Status.
The Borrower shall at all times cause (i) the common stock of Chateau
Parent to be listed on the New York Stock Exchange, and (ii) Chateau Parent to
remain qualified as a real estate investment trust under the Code.
6.11 Dividends.
Provided there is no then-existing Default or (after notice thereof to
Borrower) Unmatured Default hereunder, the Borrower shall be permitted to make
distributions to its partners, and Chateau Parent shall be permitted to declare
and pay dividends on its Capital Stock from time to time in amounts determined
by Borrower or Chateau Parent, as the case may be, provided, however, that in no
event shall Borrower make any such distributions, or suffer or permit Chateau
Parent to declare or pay dividends on its Capital Stock, if such distributions
or dividends paid on account of any calendar year, in the aggregate, would
exceed 95% of Funds From Operations for such calendar year. Notwithstanding the
foregoing, provided that there exists no Default or Unmatured Default hereunder,
the Borrower shall be permitted to make distributions to its partners, including
without limitation Chateau Parent, and Chateau Parent shall be permitted at all
times to distribute to its shareholders whatever amount of dividends or
distributions is necessary to maintain Chateau Parent's tax status as a real
estate investment trust.
6.12 Merger; Sale of Assets.
The Borrower will not, nor will it permit any of its General Partners or
Subsidiaries to, enter into any merger, consolidation, reorganization or
liquidation or transfer or otherwise dispose of all or a Substantial Portion of
their Properties, except for (i) the Merger, (ii) such transactions that occur
between Wholly-Owned Subsidiaries or between Borrower and a Wholly-Owned
Subsidiary, (iii) a merger of Chateau Parent, ROC Communities, Inc., Borrower or
a Subsidiary (the "Chateau Acquiring Entity") and another entity engaged in
substantially the same business as Chateau Parent, provided that (A) Chateau
Acquiring Entity is the surviving entity, (B) the entity with which such Chateau
Acquiring Entity merges (and all consolidated subsidiaries thereof taken as a
whole) has less than 50% of the consolidated then current market value of
Chateau Parent, the Borrower and the Consolidated Subsidiaries taken as a whole
and (C) the surviving entity will continue to be managed by substantially the
same management team
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as is then managing Chateau Parent, or (iv) as otherwise approved in advance by
the Required Lenders.
6.13 Sale and Leaseback.
The Borrower will not, nor will it permit any of its Subsidiaries to, sell
or transfer a Substantial Portion of its Property in order to concurrently or
subsequently lease such Property as lessee.
6.14 Acquisitions and Investments.
The Borrower will not, nor will it permit any Subsidiary to, make or suffer
to exist any Investments (including without limitation, loans and advances to,
and other Investments in, Subsidiaries), or commitments therefor, or become or
remain a partner in any partnership or joint venture, or to make any Acquisition
of any Person (except in connection with the consummation of the Merger),
except:
(i) Cash Equivalents;
(ii) Investments in Projects, and Investments in direct or indirect
wholly owned Subsidiaries engaged substantially in the business of owning,
operating, leasing and managing Projects;
(iii) Subject to the last sentence of this Section 6.14, Investments
in land (other than land which is part of a completed Project) which do not
exceed, in the aggregate, seven and one-half percent (7.5%) of Consolidated
Market Value;
(iv) Subject to the last sentence of this Section 6.14, Investments in
commercial real estate (other than Projects or land which is included under
clause (iii) above) which do not exceed, in the aggregate, seven and
one-half percent (7.5%) of Consolidated Market Value;
(v) Subject to the last sentence of this Section 6.14, Investments in
joint ventures, partnerships and Subsidiaries which are not either 99%
Partnerships or Wholly Owned Subsidiaries which do not exceed, in the
aggregate, fifteen percent (15%) of Consolidated Market Value;
(vi) Subject to the last sentence of this Section 6.14, Investments in
stocks and securities (other than Cash Equivalents) which do not exceed, in
the aggregate, seven and one-half percent (7.5%) of Consolidated Market
Value;
(vii) Subject to the last sentence of this Section 6.14, Investments
in mortgage loans or other types of indebtedness secured by real property
which do not exceed, in the aggregate, seven and one-half percent (7.5%) of
Consolidated Market Value; and
(viii) Subject to the last sentence of this Section 6.14, passive
Investments in non-real estate assets which do not exceed in the aggregate,
seven and one-half percent (7.5%) of Consolidated Market Value.
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provided that, after giving effect to such Acquisitions and Investments,
Borrower continues to comply with all its covenants herein. Acquisitions and
Investments permitted pursuant to this Section 6.14 shall be deemed to be
"Permitted Acquisitions". Notwithstanding the foregoing, the Investments of
Borrower and its Subsidiaries described in clauses (iii), (iv), (v), (vi), (vii)
and (viii) above shall not, in the aggregate, exceed twenty five percent (25%)
of Consolidated Market Value. All Investments shall be valued in accordance with
GAAP.
6.15 Liens.
The Borrower will not, nor will it permit any of its Subsidiaries to,
create, incur, or suffer to exist any Lien in, of or on the Property of the
Borrower or any of its Subsidiaries, except:
(i) Liens for taxes, assessments or governmental charges or levies on
its Property if the same shall not at the time be delinquent or thereafter
can be paid without penalty, or are being contested in good faith and by
appropriate proceedings and for which adequate reserves shall have been set
aside on its books;
(ii) Liens imposed by law, such as carriers', warehousemen's and
mechanics' liens and other similar liens arising in the ordinary course of
business which secure payment of obligations not more than 60 days past due
or which are being contested in good faith by appropriate proceedings and
for which adequate reserves shall have been set aside on its books;
(iii) Liens arising out of pledges or deposits under worker's
compensation laws, unemployment insurance, old age pensions, or other
social security or retirement benefits, or similar legislation;
(iv) Easements, restrictions and such other encumbrances or charges
against real property as are of a nature generally existing with respect to
properties of a similar character and which do not in any material adverse
way affect the marketability of the same or interfere with the use thereof
in the business of the Borrower or its Subsidiaries;
(v) Liens on Projects existing on the date hereof which secure
Indebtedness as described in Schedule 2 hereto;
(vi) Liens other than Liens described in subsections (i) through (iv)
above arising in connection with any Indebtedness permitted hereunder to
the extent such Indebtedness will not result in a Default in any of
Borrower's covenants herein;
(vii) Leases of space in Projects to tenants in the ordinary course of
business; and
(viii) All ground leases, whether or not Approved Ground Leases.
Liens permitted pursuant to this Section 6.15 shall be deemed to be "Permitted
Liens".
6.16 Affiliates.
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The Borrower will not, nor will it permit any of its Subsidiaries to, enter
into any transaction (including, without limitation, the purchase or sale of any
Property or service) with, or make any payment or transfer to, any Affiliate
except in the ordinary course of business and pursuant to the reasonable
requirements of the Borrower's or such Subsidiary's business and upon fair and
reasonable terms no less favorable to the Borrower or such Subsidiary than the
Borrower or such Subsidiary would obtain in a comparable arms-length
transaction.
6.17 Financial Undertakings.
The Borrower will not enter into or remain liable upon, nor will it permit
any Subsidiary to enter into or remain liable upon, any Financial Undertaking,
except to the extent required to protect the Borrower and its Subsidiaries
against increases in interest payable by them under variable interest
Indebtedness.
6.18 Variable Interest Indebtedness.
The Borrower and its Subsidiaries shall not at any time permit the
outstanding principal balance of Indebtedness which bears interest at an
interest rate that is not fixed through the maturity date of such Indebtedness
to exceed an amount equal to the Maximum Variable Rate Debt Amount, unless all
of such Indebtedness in excess of such Maximum Variable Rate Debt Amount is
subject to a swap, rate cap or other interest rate management program reasonably
approved by the Administrative Agent that effectively converts the interest rate
on such excess to a fixed rate.
6.19 Consolidated Net Worth.
The Borrower shall maintain a Consolidated Net Worth, calculated as of the
last day of each fiscal quarter, of not less than the sum of (i) $725,000,000
plus (ii) seventy-five percent (75%) of the aggregate proceeds received by the
Borrower (net of customary related fees and expenses) in connection with any
offering of stock in either of the General Partners after June 30, 2000 and on
or prior to the date such determination of Consolidated Net Worth is made.
6.20 Indebtedness and Cash Flow Covenants.
The Borrower on a consolidated basis with its Subsidiaries shall not
permit:
(i) Consolidated Outstanding Indebtedness divided by Consolidated
Market Value (expressed as a percentage), based on reported results for the
most recent full fiscal quarter, to exceed fifty five percent (55%) for
quarters ending on or before March 31, 2002, fifty two and one half percent
(52 1/2%) for the quarter ending on June 30, 2002 and fifty percent (50%)
for quarters ending thereafter;
(ii) Consolidated Secured Indebtedness to exceed twenty-five percent
(25%) of Consolidated Market Value, based on reported results for the most
recent full fiscal quarter;
(iii) the Value of Unencumbered Assets, based on reported results for
the most recent full fiscal quarter, to be less than 1.65 times the
Consolidated Senior Unsecured
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Indebtedness for quarters ending on or before March 31, 2002, and 2.0 times
the Consolidated Senior Unsecured Indebtedness for quarters ending
thereafter;
(iv) EBITDA divided by the Consolidated Debt Service, based on results
for the two most recent full fiscal quarters for which Borrower has
reported results under Section 6.1, annualized, to be less than 2.0; and
(v) The ratio of (a) Net Operating Income attributable to Unencumbered
Assets to (b) Consolidated Interest Expense attributable to Unsecured
Indebtedness, in each case based on reported results for the most recent
full fiscal quarter, to be less than 2.0.
6.21 Environmental Matters.
Borrower and its Subsidiaries shall:
(a) Comply with, and use all reasonable efforts to ensure compliance by all
tenants and subtenants of the Properties of Borrower and its Subsidiaries, if
any, with, all applicable Environmental Laws and obtain and comply with and
maintain, and use all reasonable efforts to ensure that all such tenants and
subtenants obtain (to the extent necessary) and comply with and maintain, any
and all licenses, approvals, notifications, registrations or permits required by
applicable Environmental Laws, except to the extent that failure to do so could
not be reasonably expected to have a Material Adverse Effect; provided that in
no event shall the Borrower or its Subsidiaries be required to modify the terms
of leases, or renewals thereof, with existing tenants (i) at Properties owned by
the Borrower or its Subsidiaries as of the date hereof, or (ii) at Properties
hereafter acquired by the Borrower or its Subsidiaries as of the date of such
acquisition, to add provisions to such effect.
(b) Conduct and complete all investigations, studies, sampling and testing,
and all remedial, removal and other actions with respect to the Properties of
Borrower and its Subsidiaries required under Environmental Laws and promptly
comply in all material respects with all lawful orders and directives of all
Governmental Authorities regarding Environmental Laws, except to the extent that
(i) the same are being contested in good faith by appropriate proceedings and
the pendency of such proceedings could not be reasonably expected to have a
Material Adverse Effect, or (ii) the Borrower has determined in good faith that
contesting the same is not in the best interests of the Borrower and its
Subsidiaries and the failure to contest the same could not be reasonably
expected to have a Material Adverse Effect.
(c) Defend, indemnify and hold harmless Administrative Agent and each
Lender, and their respective officers and directors, from and against any
claims, demands, penalties, fines, liabilities, settlements, damages, costs and
expenses of whatever kind or nature known or unknown, contingent or otherwise,
arising out of, or in any way relating to the violation of, noncompliance with
or liability under any Environmental Laws applicable to the operations of the
Borrower, its Subsidiaries or its Properties, or any orders, requirements or
demands of Governmental Authorities related thereto, including, without
limitation, attorney's and consultant's fees, investigation and laboratory fees,
response costs, court costs and litigation expenses, except to the extent that
any of the foregoing arise out of the gross negligence or willful misconduct of
the party seeking indemnification therefor. This indemnity shall continue in
full force and effect regardless of the termination of this Agreement.
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(d) Prior to the acquisition of a new Property after the Agreement
Execution Date, perform or cause to be performed an environmental
investigation which investigation shall at a minimum comply with the
specifications and procedures attached hereto as Exhibit F. In connection
with any such investigation, Borrower shall cause to be prepared a report
of such investigation, to be made available to any Lenders upon reasonable
request, for informational purposes and to assure compliance with the
specifications and procedures.
6.22 Ownership of Borrower.
Chateau Parent shall at all times, either directly or indirectly, hold 100%
of the general partnership interests in the Borrower.
6.23 Restrictions of General Partners.
Neither General Partner in its individual capacity shall own or acquire (i)
any manufactured home community, (ii) any land for the development of any
manufactured home community or (iii) any other type of assets (other than one or
more interests in the Borrower) if such other types of assets have an aggregate
market value of more than $10,000,000. This Section shall not apply with respect
to either General Partner in its capacity as a general partner of the Borrower.
ARTICLE VII
DEFAULTS
The occurrence of any one or more of the following events shall constitute
a Default:
7.1 Nonpayment of any principal payment on any Note when due.
7.2 Nonpayment of interest upon any Note or of any fee or other payment
Obligations under any of the Loan Documents within five (5) Business Days after
the same becomes due.
7.3 The breach of any of the terms or provisions of Sections 6.2, 6.4, 6.10
through 6.20, 6.22 and 6.23.
7.4 Any representation or warranty made or deemed made by or on behalf of
the Borrower or any of its Subsidiaries to the Lenders or the Administrative
Agent under or in connection with this Agreement, any Credit Extension, or any
material certificate or information delivered in connection with this Agreement
or any other Loan Document shall be materially false on the date as of which
made.
7.5 The breach by the Borrower (other than a breach which constitutes a
Default under Section 7.1, 7.2, 7.3 or 7.4) of any of the terms or provisions of
this Agreement which is not remedied within fifteen (15) days after written
notice from the Administrative Agent or any Lender; provided, however, that if
such breach cannot reasonably be remedied within fifteen (15) days, such fifteen
(15) day period shall be extended for an additional thirty (30) days provided
that Borrower has commenced and is diligently prosecuting the remedy of such
breach.
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7.6 Failure of the Borrower, any of its Subsidiaries or either General
Partner to pay any Indebtedness in a principal amount in excess of $10,000,000,
in the aggregate, when due; or the default by the Borrower, any of its
Subsidiaries or either General Partner in the performance of any term, provision
or condition contained in any agreement, or any other event shall occur or
condition exist, which results in any such Indebtedness of the Borrower, any of
its Subsidiaries or either General Partner to be due and payable or required to
be prepaid (other than by a regularly scheduled payment) prior to the stated
maturity thereof (provided that the failure to pay any such Indebtedness shall
not constitute a Default so long as the Borrower, its Subsidiaries or either
General Partner, as the case may be is diligently contesting the payment of the
same by appropriate legal proceedings and the Borrower or its Subsidiaries or
either General Partner, as the case may be, have set aside, in a manner
reasonably satisfactory to the Required Lenders, a sufficient reserve to repay
such Indebtedness plus all accrued interest thereon calculated at the default
rate thereunder and costs of enforcement in the event of an adverse outcome).
7.7 The Borrower, either General Partner or any Subsidiary having a Market
Value in excess of $10,000,000, shall (i) have an order for relief entered with
respect to it under the Federal bankruptcy laws as now or hereafter in effect,
(ii) make an assignment for the benefit of creditors, (iii) apply for, seek,
consent to, or acquiesce in, the appointment of a receiver, custodian, trustee,
examiner, liquidator or similar official for it or any Substantial Portion of
its Property, (iv) institute any proceeding seeking an order for relief under
the Federal bankruptcy laws as now or hereafter in effect or seeking to
adjudicate it as a bankrupt or insolvent, or seeking dissolution, winding up,
liquidation, reorganization, arrangement, adjustment or composition of it or its
debts under any law relating to bankruptcy, insolvency or reorganization or
relief of debtors or fail to file an answer or other pleading denying the
material allegations of any such proceeding filed against it, (v) take any
corporate action to authorize or effect any of the foregoing actions set forth
in this Section 7.7, (vi) fail to contest in good faith any appointment or
proceeding described in Section 7.8 or (vii) admit in writing its inability to
pay its debts generally as they become due.
7.8 A receiver, trustee, examiner, liquidator or similar official shall be
appointed for the Borrower, either General Partner or any Subsidiary having a
Market Value in excess of $10,000,000, or for any Substantial Portion of the
Property of the Borrower, either General Partner or such Subsidiary, or a
proceeding described in Section 7.7(iv) shall be instituted against the
Borrower, either General Partner or any such Subsidiary and such appointment
continues undischarged or such proceeding continues undismissed or unstayed for
a period of ninety (90) consecutive days.
7.9 The Borrower, either General Partner or any of the Borrower's
Subsidiaries shall fail within sixty (60) days to pay, bond or otherwise
discharge any judgments or orders for the payment of money in an amount which,
when added to all other judgments or orders outstanding against Borrower or any
Subsidiary would exceed $10,000,000 in the aggregate, which have not been stayed
on appeal or otherwise appropriately contested in good faith.
7.10 The Borrower or any other member of the Controlled Group shall have
been notified by the sponsor of a Multiemployer Plan that it has incurred
withdrawal liability to such Multiemployer Plan in an amount which, when
aggregated with all other amounts then required to be paid to Multiemployer
Plans by the Borrower as withdrawal liability (determined as of the
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date of such notification), exceeds $2,000,000 or requires payments exceeding
$1,000,000 per annum.
7.11 The Borrower or any other member of the Controlled Group shall have
been notified by the sponsor of a Multiemployer Plan that such Multiemployer
Plan is in reorganization or is being terminated, within the meaning of Title IV
of ERISA, if as a result of such reorganization or termination the aggregate
annual contributions of the Borrower and the other members of the Controlled
Group (taken as a whole) to all Multiemployer Plans which are then in
reorganization or being terminated have been or will be increased over the
amounts contributed to such Multiemployer Plans for the respective plan years of
each such Multiemployer Plan immediately preceding the plan year in which the
reorganization or termination occurs by an amount exceeding $1,000,000.
7.12 Failure to remediate within the time period permitted by law or
governmental order, after all administrative hearings and appeals have been
concluded (or within a reasonable time in light of the nature of the problem if
no specific time period is so established), material environmental problems
related to Properties if (i) the affected Properties have an aggregate book
value in excess of $20,000,000 or (ii) the estimated costs of remediation at all
affected Properties, in the aggregate, exceed $2,000,000.
7.13 The occurrence of any "Default" as defined in any Loan Document or the
breach of any of the terms or provisions of any Loan Document, which default or
breach continues beyond any period of grace therein provided.
7.14 A Change in Control occurs.
7.15 Chateau Parent shall fail to (i) qualify as a real estate investment
trust under Sections 856 through 860 of the Code (unless the Required Lenders
shall have otherwise consented thereto) or (ii) maintain its listing on the New
York Stock Exchange.
7.16 Occurrence and continuation of a "Default," as such term is defined in
the Revolving Credit Agreement.
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ARTICLE VIII
ACCELERATION, WAIVERS, AMENDMENTS AND REMEDIES
8.1 Acceleration.
If any Default described in Section 7.7 or 7.8 occurs with respect to the
Borrower, the obligations of the Lenders to make Loans hereunder shall
automatically terminate and the Obligations shall immediately become due and
payable without any election or action on the part of the Administrative Agent
or any Lender. If any other Default occurs, the Required Lenders, at any time
prior to the date that such Default has been fully cured, may terminate or
suspend the obligations of the Lenders to make Loans hereunder or declare the
Obligations to be due and payable, or both, whereupon the Obligations shall
become immediately due and payable, without presentment, demand, protest or
notice of any kind, all of which the Borrower hereby expressly waives.
If after acceleration of the maturity of the obligations or termination of
the obligations of the Lenders to make Loans as result of any Default (other
than any Default as described in Section 7.7 or 7.8 with respect to the
Borrower) and before any judgment or decree for the payment of the obligations
due shall have been obtained or entered, all of the Lenders (in their sole
discretion) shall so direct, the Administrative Agent shall, by notice to the
Borrower, rescind and annul such acceleration and/or termination.
8.2 Amendments.
Subject to the provisions of this Article VIII the Required Lenders (or the
Administrative Agent with the consent in writing of the Required Lenders) and
the Borrower may enter into agreements supplemental hereto for the purpose of
adding or modifying any provisions to the Loan Documents or changing in any
manner the rights of the Lenders or the Borrower hereunder or waiving any
Default hereunder; provided, however, that no such supplemental agreement or
waiver shall, without the consent of all Lenders:
(i) Extend the Facility Termination Date or forgive all or any
portion of the principal amount of the Loan or accrued
interest thereof, reduce the Applicable Margins (or modify
any definition herein which would have the effect of
reducing the Applicable Margins, or the underlying interest
rate options or extend the time of payment of any such
principal, interest or fees.
(ii) Reduce the percentage specified in the definition of
Required Lenders or release any Subsidiary Guaranty.
(iii) Increase the Aggregate Commitment beyond $325,000,000.
(iv) Permit the Borrower to assign its rights under this
Agreement.
(v) Amend Sections 2.3, 2.13(ii), 8.1, 8.2 or 11.2.
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(vi) Amend the provisions of Section 2.8 to the extent relating
to the priority of repayment of Tranche I.
No amendment of any provision of this Agreement relating to the Administrative
Agent shall be effective without the written consent of the Administrative
Agent.
8.3 Preservation of Rights.
No delay or omission of the Lenders or the Administrative Agent to exercise
any right under the Loan Documents shall impair such right or be construed to be
a waiver of any Default or an acquiescence therein, and the making of the
Advance notwithstanding the existence of a Default or the inability of the
Borrower to satisfy the conditions precedent to such Advance shall not
constitute any waiver or acquiescence. 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 writing signed by the Lenders required pursuant to Section 8.2, 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 the Administrative Agent and the Lenders until the Obligations have
been paid in full.
ARTICLE IX
GENERAL PROVISIONS
9.1 Survival of Representations.
All representations and warranties of the Borrower contained in this
Agreement shall survive delivery of the Notes and the making of the Advance
herein contemplated.
9.2 Governmental Regulation.
Anything contained in this Agreement to the contrary notwithstanding, no
Lender shall be obligated to extend credit to the Borrower in violation of any
limitation or prohibition provided by any applicable statute or regulation.
9.3 Taxes.
Any taxes (excluding taxes on the overall net income of any Lender) or
other similar assessments or charges made by any governmental or revenue
authority in respect of the Loan Documents shall be paid by the Borrower,
together with interest and penalties, if any.
9.4 Headings.
Section headings in the Loan Documents are for convenience of reference
only, and shall not govern the interpretation of any of the provisions of the
Loan Documents.
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9.5 Entire Agreement.
The Loan Documents embody the entire agreement and understanding among the
Borrower, the Administrative Agent and the Lenders and supersede all prior
commitments, agreements and understandings among the Borrower, the
Administrative Agent and the Lenders relating to the subject matter thereof.
9.6 Several Obligations; Benefits of this Agreement.
The respective obligations of the Lenders hereunder are several and not
joint and no Lender shall be the partner or agent of any other (except to the
extent to which the Administrative Agent is authorized to act as such). The
failure of any Lender to perform any of its obligations hereunder shall not
relieve any other Lender from any of its obligations hereunder. This Agreement
shall not be construed so as to confer any right or benefit upon any Person
other than the parties to this Agreement and their respective successors and
assigns.
9.7 Expenses; Indemnification.
The Borrower shall reimburse the Administrative Agent and Arranger for any
costs, internal charges and out-of-pocket expenses (including, without
limitation, all reasonable fees for consultants and reasonable fees and expenses
for attorneys for the Administrative Agent, which attorneys may be employees of
the Administrative Agent) paid or incurred by the Administrative Agent in
connection with the preparation, negotiation, execution, delivery, syndication,
review, amendment or modification of the Loan Documents. The Borrower also
agrees to reimburse the Administrative Agent, the Arranger and the Lenders for
any costs, internal changes, and out of pocket expenses (including attorneys'
fees and time charges of attorneys for the Administrative Agent, the Arranger
and the Lenders which attorneys may be employees of the Administrative Agent,
the Arranger and the Lenders) paid or incurred in connection with the collection
and enforcement of the Loan Documents (including, without limitation, any
workout). The Borrower further agrees to indemnify the Administrative Agent, the
Arranger and each Lender, its directors and officers against all losses, claims,
damages, penalties, judgments, liabilities and expenses (including, without
limitation, all reasonable expenses of litigation or preparation therefor
whether or not the Administrative Agent or any Lender is a party thereto) which
any of them may pay or incur arising out of or relating to this Agreement, the
other Loan Documents, the Projects, the transactions contemplated hereby or the
direct or indirect application or proposed application of the proceeds of any
Credit Extension hereunder, except to the extent that any of the foregoing arise
out of the gross negligence or willful misconduct of the party seeking
indemnification therefor. The obligations of the Borrower under this Section
shall survive the termination of this Agreement.
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9.8 Numbers of Documents.
All statements, notices, closing documents, and requests hereunder shall be
furnished to the Administrative Agent with sufficient counterparts so that the
Administrative Agent may furnish one to each of the Lenders.
9.9 Accounting.
Except as provided to the contrary herein, all accounting terms used herein
shall be interpreted and all accounting determinations hereunder shall be made
in accordance with GAAP.
9.10 Severability of Provisions.
Any provision in any Loan Document that is held to be inoperative,
unenforceable, or invalid in any jurisdiction shall, as to that jurisdiction, be
inoperative, unenforceable, or invalid without affecting the remaining
provisions in that jurisdiction or the operation, enforceability, or validity of
that provision in any other jurisdiction, and to this end the provisions of all
Loan Documents are declared to be severable.
9.11 Nonliability of Lenders.
The relationship between the Borrower, on the one hand, and the Lenders and
the Administrative Agent, on the other, shall be solely that of borrower and
lender. Neither the Administrative Agent, Arranger nor any Lender shall have any
fiduciary responsibilities to the Borrower. Neither the Administrative Agent,
Arranger nor any Lender undertakes any responsibility to the Borrower to review
or inform the Borrower of any matter in connection with any phase of the
Borrower's business or operations.
9.12 CHOICE OF LAW. THE LOAN DOCUMENTS (OTHER THAN THOSE CONTAINING A
CONTRARY EXPRESS CHOICE OF LAW PROVISION) SHALL BE CONSTRUED IN ACCORDANCE WITH
THE INTERNAL LAWS (AND NOT THE LAW OF CONFLICTS) OF THE STATE OF ILLINOIS, BUT
GIVING EFFECT TO FEDERAL LAWS APPLICABLE TO NATIONAL BANKS.
9.13 CONSENT TO JURISDICTION. THE BORROWER HEREBY IRREVOCABLY SUBMITS TO
THE NON-EXCLUSIVE JURISDICTION OF ANY UNITED STATES FEDERAL OR ILLINOIS STATE
COURT SITTING IN CHICAGO IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING
TO ANY LOAN DOCUMENTS AND THE BORROWER HEREBY IRREVOCABLY AGREES THAT ALL CLAIMS
IN RESPECT OF SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN ANY SUCH
COURT AND IRREVOCABLY WAIVES ANY OBJECTION IT MAY NOW OR HEREAFTER HAVE AS TO
THE VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN SUCH A COURT OR THAT
SUCH COURT IS AN INCONVENIENT FORUM. NOTHING HEREIN SHALL LIMIT THE RIGHT OF THE
ADMINISTRATIVE AGENT OR ANY LENDER TO BRING PROCEEDINGS AGAINST THE BORROWER IN
THE COURTS OF ANY OTHER JURISDICTION. ANY JUDICIAL PROCEEDING BY THE BORROWER
AGAINST THE ADMINISTRATIVE AGENT OR ANY LENDER OR ANY AFFILIATE OF THE
ADMINISTRATIVE AGENT OR ANY
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LENDER INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER IN ANY WAY ARISING OUT OF,
RELATED TO, OR CONNECTED WITH ANY LOAN DOCUMENT SHALL BE BROUGHT ONLY IN A COURT
IN CHICAGO, ILLINOIS.
9.14 WAIVER OF JURY TRIAL. THE BORROWER, THE ADMINISTRATIVE AGENT AND EACH
LENDER HEREBY WAIVE TRIAL BY JURY IN ANY JUDICIAL PROCEEDING INVOLVING, DIRECTLY
OR INDIRECTLY, ANY MATTER (WHETHER SOUNDING IN TORT, CONTRACT OR OTHERWISE) IN
ANY WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH ANY LOAN DOCUMENT OR THE
RELATIONSHIP ESTABLISHED THEREUNDER.
ARTICLE X
THE ADMINISTRATIVE AGENT
10.1 Appointment.
Bank One, NA is hereby appointed Administrative Agent hereunder and under
each other Loan Document, and each of the Lenders irrevocably authorizes the
Administrative Agent to act as the agent of such Lender. The Administrative
Agent agrees to act as such upon the express conditions contained in this
Article X. The Administrative Agent shall not have a fiduciary relationship in
respect of the Borrower or any Lender by reason of this Agreement.
Notwithstanding the use of the defined term "Administrative Agent," it is
expressly understood and agreed that the Administrative Agent shall not have any
fiduciary responsibilities to any Lender by reason of this Agreement or any
other Loan Document and that the Administrative Agent is merely acting as the
contractual representative of the Lenders with only those duties as are
expressly set forth in this Agreement and the other Loan Documents. In its
capacity as the Lenders' contractual representative, the Administrative Agent
(i) does not hereby assume any fiduciary duties to any of the Lenders, (ii) is a
"representative" of the Lenders within the meaning of Section 9-102 of the
Uniform Commercial Code and (iii) is acting as an independent contractor, the
rights and duties of which are limited to those expressly set forth in this
Agreement and the other Loan Documents. Each of the Lenders hereby agrees to
assert no claim against the Administrative Agent on any agency theory or any
other theory of liability for breach of fiduciary duty, all of which claims each
Lender hereby waives.
10.2 Powers.
The Administrative Agent shall have and may exercise such powers under the
Loan Documents as are specifically delegated to the Administrative Agent by the
terms of each thereof, together with such powers as are reasonably incidental
thereto. The Administrative Agent shall have no implied duties to the Lenders,
or any obligation to the Lenders to take any action thereunder except any action
specifically provided by the Loan Documents to be taken by the Administrative
Agent. The Administrative Agent shall endeavor to administer this Agreement in
the same manner and with the same standard of care as it administers similar
agreements for its own account.
10.3 General Immunity.
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Neither the Administrative Agent nor any of its directors, officers, agents
or employees shall be liable to the Borrower, the Lenders or any Lender for (i)
any action taken or omitted to be taken by it or them hereunder or under any
other Loan Document or in connection herewith or therewith except for its or
their own gross negligence or willful misconduct; or (ii) any determination by
the Administrative Agent that compliance with any law or any governmental or
quasi-governmental rule, regulation, order, policy, guideline or directive
(whether or not having the force of law) requires the Advances and Commitments
hereunder to be classified as being part of a "highly leveraged transaction".
The foregoing shall not limit the liability of the Administrative Agent for a
breach of its express obligations and undertakings to the Lenders hereunder
which continues after written notice to the Administrative Agent of such breach
and its failure to cure such breach within a reasonable time after such notice.
10.4 No Responsibility for Loans, Recitals, etc.
Neither the Administrative Agent nor any of its directors, officers, agents
or employees shall be responsible for or have any duty to ascertain, inquire
into, or verify (i) any statement, warranty or representation made in connection
with any Loan Document or any borrowing hereunder; (ii) the performance or
observance of any of the covenants or agreements of any obligor under any Loan
Document, including, without limitation, any agreement by an obligor to furnish
information directly to each Lender; (iii) the satisfaction of any condition
specified in Article IV, except receipt of items required to be delivered to the
Administrative Agent; or (iv) the validity, effectiveness or genuineness of any
Loan Document or any other instrument or writing furnished in connection
therewith. Except as otherwise specifically provided herein, the Administrative
Agent shall have no duty to disclose to the Lenders information that is not
required to be furnished by the Borrower to the Administrative Agent at such
time, but is voluntarily furnished by the Borrower to the Administrative Agent
(either in its capacity as Administrative Agent or in its individual capacity).
Notwithstanding anything to the contrary herein, Administrative Agent shall make
available promptly after the Agreement Execution Date to any Lender copies of
all Loan Documents in its possession which are requested by any such Lender.
Administrative Agent shall also furnish to all Lenders promptly after such items
are available in final form copies of Default notices issued to the Borrower,
amendments to any Loan Documents being proposed by the Administrative Agent or
the Borrower, financial statements of the Borrower required hereunder,
compliance certificates from the Borrower required by this Agreement or any
other notice or communication from the Borrower specifically relating to this
Agreement which is actually received by the Administrative Agent. Promptly after
the Administrative Agent has actual knowledge of the occurrence of a Default
hereunder, the Administrative Agent shall so notify the Lenders.
10.5 Action on Instructions of Lenders.
To the extent that the Administrative Agent is authorized hereunder to
request additional information from the Borrower, the Administrative Agent shall
do so at the request of any Lender unless the Administrative Agent deems such
request to be duplicative of other requests or unreasonably burdensome on the
Borrower. Notwithstanding anything herein to the contrary, the Administrative
Agent shall in all cases be fully protected in so acting, or refraining from
acting, hereunder and under any other Loan Document in accordance with written
instructions signed by the Required Lenders or all of the Lenders, as the case
may be, and such instructions and any
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action taken or failure to act pursuant to such written instructions shall be
binding on all of the Lenders and on all holders of Notes and on the
Administrative Agent.
10.6 Employment of Agents and Counsel.
The Administrative Agent may execute any of its duties as Administrative
Agent hereunder and under any other Loan Document by or through employees,
agents, and attorneys-in-fact and shall not be answerable to the Lenders, except
as to money or securities received by it or its authorized agents, for the
default or misconduct of any such agents or attorneys-in-fact selected by it
with reasonable care. The Administrative Agent shall be entitled to advice of
counsel concerning all matters pertaining to the agency hereby created and its
duties hereunder and under any other Loan Document.
10.7 Reliance on Documents; Counsel.
The Administrative Agent shall be entitled to rely upon any Note, notice,
consent, certificate, affidavit, letter, telegram, statement, paper or document
believed by it to be genuine and correct and to have been signed or sent by the
proper person or persons, and, in respect to legal matters, upon the opinion of
counsel selected by the Administrative Agent, which counsel may be employees of
the Administrative Agent.
10.8 Administrative Agent's Reimbursement and Indemnification.
The Lenders agree to reimburse and indemnify the Administrative Agent
ratably in proportion to their respective Commitments (i) for any amounts not
reimbursed by the Borrower for which the Administrative Agent is entitled to
reimbursement by the Borrower under the Loan Documents, (ii) for any other
expenses incurred by the Administrative Agent on behalf of the Lenders, in
connection with the preparation, execution, delivery, administration and
enforcement of the Loan Documents and (iii) for any liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind and nature whatsoever which may be imposed on,
incurred by or asserted against the Administrative Agent in any way relating to
or arising out of the Loan Documents or any other document delivered in
connection therewith or the transactions contemplated thereby, or the
enforcement of any of the terms thereof or of any such other documents, provided
that no Lender shall be liable for any of the foregoing to the extent they arise
from the gross negligence or willful misconduct or a breach of the
Administrative Agent's express obligations and undertakings to the Lenders which
is not cured after written notice and within the period described in Section
10.3. To the extent any amounts so paid by Lenders are thereafter recovered by
the Administrative Agent from the Borrower or otherwise, such recovered amount
shall be remitted to the Lenders making such payment on a pro rata basis in
accordance with their respective portions of such payment. The obligations of
the Lenders and the Administrative Agent under this Section 10.8 shall survive
payment of the Obligations and termination of this Agreement.
10.9 Rights as a Lender.
In the event the Administrative Agent is a Lender, the Administrative Agent
shall have the same rights and powers hereunder and under any other Loan
Document as any Lender and may exercise the same as though it were not the
Administrative Agent, and the term "Lender" or "Lenders" shall, at any time when
the Administrative Agent is a Lender, unless the context
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otherwise indicates, include the Administrative Agent in its individual
capacity. The Administrative Agent may accept deposits from, lend money to, and
generally engage in any kind of trust, debt, equity or other transaction, in
addition to those contemplated by this Agreement or any other Loan Document,
with the Borrower or any of its Subsidiaries in which the Borrower or such
Subsidiary is not restricted hereby from engaging with any other Person. The
Administrative Agent, in its individual capacity, is not obligated to remain a
Lender but if the Administrative Agent is no longer a Lender, the Administrative
Agent shall resign and a successor shall be appointed as described in Section
10.11. The rights and duties of the Administrative Agent are separate from its
rights and duties as a Lender and no transfer of all or any part of the
Administrative Agent's Commitment or its interest as a Lender in the Loans
hereunder shall be deemed to transfer any of its rights and duties as
Administrative Agent to its successor or successors as a Lender.
10.10 Lender Credit Decision.
Each Lender acknowledges that it has, independently and without reliance
upon the Administrative Agent or any other Lender and based on the financial
statements prepared by the Borrower and such other documents and information as
it has deemed appropriate, made its own credit analysis and decision to enter
into this Agreement and the other Loan Documents. Each Lender also acknowledges
that it will, independently and without reliance upon the Administrative Agent
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 and the other Loan Documents.
10.11 Successor Administrative Agent.
The Administrative Agent may resign at any time by giving written notice
thereof to the Lenders and the Borrower, such resignation to be effective upon
the appointment of a successor Administrative Agent or, if no successor
Administrative Agent has been appointed, forty-five days after the retiring
Administrative Agent gives notice of its intention to resign. Bank One (or any
successor Administrative Agent) may be removed as Administrative Agent by
written notice received by Administrative Agent from all of the other Lenders at
any time with cause (i.e., a breach by Bank One (or any successor Administrative
Agent) of its duties as Administrative Agent hereunder). Upon any such
resignation or removal, the Required Lenders shall have the right to appoint,
after consultation with the Borrower, on behalf of the Borrower and the Lenders,
a successor Administrative Agent. If no successor Administrative Agent shall
have been so appointed by the Required Lenders within thirty days after the
resigning Administrative Agent's giving notice of its intention to resign, then
the resigning or removed Administrative Agent may appoint, on behalf of the
Borrower and the Lenders, a successor Administrative Agent. If the
Administrative Agent has resigned or been removed and no successor
Administrative Agent has been appointed, the Lenders may perform all the duties
of the Administrative Agent hereunder and the Borrower shall make all payments
in respect of the Obligations to the applicable Lender and for all other
purposes shall deal directly with the Lenders. No successor Administrative Agent
shall be deemed to be appointed hereunder until such successor Administrative
Agent has accepted the appointment. Any such successor Administrative Agent
shall be a commercial bank having capital and retained earnings of at least
$100,000,000, and sophisticated in administration of similar credits. Upon the
acceptance of any appointment as Administrative Agent hereunder by a successor
Administrative Agent, such successor Administrative Agent shall thereupon
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succeed to and become vested with all the rights, powers, privileges and duties
of the resigning or removed Administrative Agent. Upon the effectiveness of the
resignation or removal of the Administrative Agent, the resigning or removed
Administrative Agent shall be discharged from its duties and obligations
hereunder and under the Loan Documents. After the effectiveness of the
resignation or removal of an Administrative Agent, the provisions of this
Article X shall continue in effect for the benefit of such Administrative Agent
in respect of any actions taken or omitted to be taken by it while it was acting
as the Administrative Agent hereunder and under the other Loan Documents.
10.12 Delegation to Affiliates.
The Borrower and the Lenders agree that the Administrative Agent may
delegate any of its duties under this Agreement to any of its Affiliates. Any
such Affiliate (and such Affiliate's directors, officers, agents and employees)
which performs duties in connection with this Agreement shall be entitled to the
same benefits of the indemnification, waiver and other protective provisions to
which the Administrative Agent is entitled under Articles IX and X.
ARTICLE XI
SETOFF; RATABLE PAYMENTS
11.1 Setoff.
In addition to, and without limitation of, any rights of the Lenders under
applicable law, if the Borrower becomes insolvent, however evidenced, or any
Default occurs, any and all deposits (including all account balances, whether
provisional or final and whether or not collected or available) and any other
Indebtedness at any time held or owing by any Lender to or for the credit or
account of the Borrower may be offset and applied toward the payment of the
Obligations owing to such Lender at any time prior to the date that such Default
has been fully cured, whether or not the Obligations, or any part hereof, shall
then be due.
11.2 Ratable Payments.
If any Lender, whether by setoff or otherwise, has payment made to it
(other than payments received pursuant to Sections 3.1, 3.2 or 3.4) in a greater
proportion than that received by any other Lender, such Lender agrees, promptly
upon demand, to purchase a portion of the Loan held by the other Lenders so that
after such purchase each Lender will hold its ratable proportion of the Loan. If
any Lender, whether in connection with setoff or amounts which might be subject
to setoff or otherwise, receives collateral or other protection for its
Obligations or such amounts which may be subject to setoff, such Lender agrees,
promptly upon demand, to take such action necessary such that all Lenders share
in the benefits of such collateral ratably in proportion to their respective
Funded Percentages. In case any such payment is disturbed by legal process, or
otherwise, appropriate further adjustments shall be made.
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ARTICLE XII
BENEFIT OF AGREEMENT; ASSIGNMENTS; PARTICIPATIONS
12.1 Successors and Assigns.
The terms and provisions of the Loan Documents shall be binding upon and
inure to the benefit of the Borrower and the Lenders and their respective
successors and assigns, except that (i) the Borrower shall not have the right to
assign its rights or obligations under the Loan Documents and (ii) any
assignment by any Lender must be made in compliance with Section 12.3.
Notwithstanding clause (ii) of this Section, any Lender may at any time, without
the consent of the Borrower or the Administrative Agent, assign all or any
portion of its rights under this Agreement and its Notes to a Federal Reserve
Bank; provided, however, that no such assignment shall release the transferor
Lender from its obligations hereunder. The Administrative Agent may treat the
payee of any Note as the owner thereof for all purposes hereof unless and until
such payee complies with Section 12.3 in the case of an assignment thereof or,
in the case of any other transfer, a written notice of the transfer is filed
with the Administrative Agent. Any assignee or transferee of a Note agrees by
acceptance thereof to be bound by all the terms and provisions of the Loan
Documents. Any request, authority or consent of any Person, who at the time of
making such request or giving such authority or consent is the holder of any
Note shall be conclusive and binding on any subsequent holder, transferee or
assignee of such Note or of any Note or Notes issued in exchange therefor.
12.2 Participations.
12.2.1 Permitted Participants; Effect. Any Lender may, in the ordinary
course of its business and in accordance with applicable law, at any time
sell to one or more banks, financial institutions, pension funds, or any
other funds or entities ("Participants") participating interests in any
Loans owing to such Lender, any Note held by such Lender, any Commitment of
such Lender or any other interest of such Lender under the Loan Documents.
In the event of any such sale by a Lender of participating interests to a
Participant, such Lender's obligations under the Loan Documents shall
remain unchanged, such Lender shall remain solely responsible to the other
parties hereto for the performance of such obligations, such Lender shall
remain the holder of any such Note for all purposes under the Loan
Documents, all amounts payable by the Borrower under this Agreement shall
be determined as if such Lender had not sold such participating interests,
and the Borrower and the Administrative Agent shall continue to deal solely
and directly with such Lender in connection with such Lender's rights and
obligations under the Loan Documents.
12.2.2 Voting Rights. Each Lender shall retain the sole right to
approve, without the consent of any Participant, any amendment,
modification or waiver of any provision of the Loan Documents other than
any amendment, modification or waiver which forgives principal, interest or
fees or reduces the interest rate or fees payable with respect to any Loan
or extends the final maturity of the Facility; postpones any date fixed for
any regularly-scheduled payment of principal of, or interest or fees on,
any Loan, releases any guarantor of such Loan or releases all or
substantially all of the Collateral, if security for the Loan.
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12.2.3 Benefit of Setoff. The Borrower agrees that each Participant
which has previously advised the Borrower in writing of its purchase of a
participation in a Lender's interest in its Loans shall be deemed to have
the right of setoff provided in Section 11.1 in respect of its
participating interest in amounts owing under the Loan Documents to the
same extent as if the amount of its participating interest were owing
directly to it as a Lender under the Loan Documents. Each Lender shall
retain the right of setoff provided in Section 11.1 with respect to the
amount of participating interests sold to each Participant, provided that
such Lender and Participant may not each setoff amounts against the same
portion of the Obligations, so as to collect the same amount from the
Borrower twice. The Lenders agree to share with each Participant, and each
Participant, by exercising the right of setoff provided in Section 11.1,
agrees to share with each Lender, any amount received pursuant to the
exercise of its right of setoff, such amounts to be shared in accordance
with Section 11.2 as if each Participant were a Lender.
12.3 Assignments.
12.3.1 Permitted Assignments. Any Lender may, in the ordinary course
of its business and in accordance with applicable law, at any time assign
to any of such Lender's affiliates or to one or more banks, financial
institutions or pension funds, or with the prior approval of the Borrower,
which shall not be unreasonably withheld or delayed (except Borrower's
consent shall not be required following the occurrence of a Default), any
other entity ("Purchasers") all or any part of its rights and obligations
under the Loan Documents. Each such assignment shall (unless each of the
Borrower and Administrative Agent otherwise consents) be in the amount not
less than the lesser of (i) $5,000,000 or (ii) the remaining principal
amount of the Loans due to the assigning Lender (calculated as of the date
of such assignment). Such assignment shall be substantially in the form of
Exhibit D hereto or in such other form as may be agreed to by the parties
thereto. The consent of the Administrative Agent shall be required prior to
an assignment becoming effective with respect to a Purchaser which is not a
Lender or an Affiliate thereof. Such consent shall not be unreasonably
withheld.
12.3.2 Effect; Effective Date. Upon (i) delivery to the Administrative
Agent of a notice of assignment, substantially in the form attached as
Exhibit I to Exhibit D hereto (a "Notice of Assignment"), together with any
consents required by Section 12.3.1, and (ii) payment of a $3,500 fee by
the assignor or assignee to the Administrative Agent for processing such
assignment, such assignment shall become effective on the effective date
specified in such Notice of Assignment. The Notice of Assignment shall
contain a representation by the Purchaser to the effect that none of the
consideration used to make the purchase of the Loans under the applicable
assignment agreement are "plan assets" as defined under ERISA and that the
rights and interests of the Purchaser in and under the Loan Documents will
not be "plan assets" under ERISA. On and after the effective date of such
assignment, such Purchaser shall for all purposes be a Lender party to this
Agreement and any other Loan Document executed by the Lenders and shall
have all the rights and obligations of a Lender under the Loan Documents,
to the same extent as if it were an original party hereto, and no further
consent or action by the Borrower, the Lenders or the Administrative Agent
shall be required to release the transferor Lender, and the transferor
Lender shall automatically be released on the effective date of such
assignment, with respect to the percentage of the Loans assigned to such
Purchaser.
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Upon the consummation of any assignment to a Purchaser pursuant to this
Section 12.3.2, the transferor Lender, the Administrative Agent and the
Borrower shall make appropriate arrangements so that replacement Notes are
issued to such transferor Lender and new Notes or, as appropriate,
replacement Notes are issued to such Purchaser, in each case in principal
amounts reflecting their Commitment, as adjusted pursuant to such
assignment.
12.4 Dissemination of Information.
The Borrower authorizes each Lender to disclose to any Participant or
Purchaser or any other Person acquiring an interest in the Loan Documents by
operation of law (each a "Transferee") and any prospective Transferee any and
all information in such Lender's possession concerning the creditworthiness of
the Borrower and its Subsidiaries, subject to Section 12.6.
12.5 Tax Treatment.
If any interest in any Loan Document is transferred to any Transferee which
is organized under the laws of any jurisdiction other than the United States or
any State thereof, the transferor Lender shall cause such Transferee,
concurrently with the effectiveness of such transfer, to comply with the
provisions of Section 3.5.
12.6 Confidentiality.
The Administrative Agent and Lenders agree to take normal and reasonable
precautions and exercise due care to maintain the confidentiality of all
non-public information provided to them by the Borrower or by any other Person
on the Borrower's behalf in connection with the Loan Documents and agree and
undertake that neither they nor any of their Affiliates shall disclose any such
information for any purpose or in any manner other than pursuant to the terms
contemplated by the Loan Documents. The Administrative Agent and each Lender may
disclose such information (1) at the request of any regulatory authority with
jurisdiction over the Administrative Agent and/or the Lenders or in connection
with an examination of such Person by any such authority, (2) pursuant to
subpoena or other process of a court having jurisdiction over the Administrative
Agent and/or the Lenders, (3) when required to do so in accordance with the
provisions of any applicable law, (4) at the express direction of any other
governmental authority, with jurisdiction over the Administrative Agent and/or
the Lenders, of any State of the United States of America or of any other
jurisdiction in which such Person conducts its business, (5) to such Person's
independent auditors, attorneys and other professional advisors, (6) if such
information has become public other than through disclosure by such Person or
any Lender, (7) in connection with any litigation involving such Person, and (8)
to any Affiliate of such Person which agrees to be bound by this Section 12.6.
Notwithstanding the foregoing, the Borrower authorizes each of the
Administrative Agent and each Lender to disclose to any prospective or actual
Transferee such financial and other information in its possession (i) which has
been delivered to such Person pursuant to the Loan Documents or which has been
delivered to such Person by the Borrower prior to entering into the Loan
Documents, or (ii) which is reasonably necessary to effectuate the purposes of
this Agreement and the Loan Documents; provided that, unless otherwise agreed by
the Borrower, such Transferee shall agree to keep such information confidential
to the same extent required to the Administrative Agent or any Lender, as
applicable, hereunder.
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ARTICLE XIII
NOTICES
13.1 Giving Notice.
Except as otherwise permitted by Section 2.14 with respect to borrowing
notices, all notices and other communications provided to any party hereto under
this Agreement or any other Loan Document shall be in writing or by telex or by
facsimile and addressed or delivered to such party at its address set forth
below its signature hereto or at such other address as may be designated by such
party in a notice to the other parties. Any notice, if mailed and properly
addressed with postage prepaid, shall be deemed given when received; any notice,
if transmitted by telex or facsimile, shall be deemed given when transmitted
(answerback confirmed in the case of telexes).
13.2 Change of Address.
The Borrower, the Administrative Agent and any Lender may each change the
address for service of notice upon it by a notice in writing to the other
parties hereto.
ARTICLE XIV
COUNTERPARTS
This Agreement may be executed in any number of counterparts, all of which
taken together shall constitute one agreement, and any of the parties hereto may
execute this Agreement by signing any such counterpart. This Agreement shall be
effective when it has been executed by the Borrower, the Administrative Agent
and the Lenders and each party has notified the Administrative Agent by telex or
telephone, that it has taken such action.
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IN WITNESS WHEREOF, the Borrower, the Lenders and the Administrative Agent
have executed this Agreement as of the date first above written.
CP LIMITED PARTNERSHIP, a Maryland
limited partnership
By: Chateau Communities, Inc., a general partner
By:
--------------------------------------
Name:
--------------------------------------
Title:
--------------------------------------
By: ROC Communities, Inc., a general partner
By:
--------------------------------------
Name:
--------------------------------------
Title:
--------------------------------------
The undersigned, Chateau Communities, Inc. and ROC Communities, Inc., which
are the sole general partners of the Borrower, for the benefit of the Lenders
under this Agreement, hereby (i) accept and agree to the restrictions which the
Borrower has agreed to cause to be imposed on their actions and activities under
Sections 6.4, 6.10, 6.11, 6.12, 6.22 and 6.23 of this Agreement and (ii) agree
that, with respect to any interest either of them may directly or indirectly
hold in any entity which owns a Project or Projects that are included in
Unencumbered Assets, the undersigned shall sell or obtain secured financing on
such Project at the direction of the Borrower on such terms as may be acceptable
to the Borrower.
ROC COMMUNITIES, INC.
By:
--------------------------------------
Name:
--------------------------------------
Title:
--------------------------------------
CHATEAU COMMUNITIES, INC.
By:
--------------------------------------
Name:
--------------------------------------
Title:
--------------------------------------
S-1
Commitments
Tranche I: $248,000,000 BANK ONE, NA
Tranche II: $5,000,000 Individually and as Administrative Agent
By:
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Name:
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Title:
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1 Bank Xxx Xxxxx
Xxxx Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000-0000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: Xxxxx Xxxxx
Corporate Real Estate Finance
Department
S-2
Tranche I: $0 U.S. BANK NATIONAL ASSOCIATION
Tranche II: $30,000,000
By:
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Name:
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Title:
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000 Xxxxxxxxxxx Xxxxxx
0xx Xxxxx XXXX0000
Xxxxxx, Xxxxxxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: Xx. Xxx Xxxxx
X-0
Tranche I: $0 XXXXX FARGO BANK, N.A.
Tranche II: $25,000,000
By:
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Name:
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Title:
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0000 X. Xxxxxx Xxxxxx, Xxxxx 0000
Xxxxxx, XX 00000
Telephone: (000) 000-0000, x222/208
Facsimile: (000) 000-0000
Attention: Xxxx XxXxxxxx/Xxxxxx Xxxxxx
S-4
Tranche I: $0 AMSOUTH BANK
Tranche II: $15,000,000
By:
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Name:
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Title:
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AmSouth Bank
0000 0xx Xxxxxx Xxxxx, Xxxx. XXX 0
Xxxxxxxxxx, XX 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: Xxxxxxxx Xxxxx
S-5
