Exhibit 10.2
TERM LOAN CREDIT AGREEMENT
among
PROLOGIS TRUST,
Borrower
NATIONSBANK, N.A.,
Administrative Agent
COMMERZBANK AKTIENGESELLSCHAFT, NEW YORK BRANCH,
Syndication Agent
CHASE BANK OF TEXAS, NATIONAL ASSOCIATION,
Documentation Agent
and
THE LENDERS NAMED HEREIN,
Lenders
$150,000,000
As of
March 29, 1999
NATIONSBANC XXXXXXXXXX SECURITIES LLC,
Lead Arranger and Book Manager
TABLE OF CONTENTS
-----------------
Page
----
SECTION 1 DEFINITIONS AND TERMS......................................................... 1
1.1 Definitions................................................................... 1
1.2 Time References............................................................... 17
1.3 Other References.............................................................. 17
1.4 Accounting Principles......................................................... 17
SECTION 2 TERM LOANS.................................................................... 17
SECTION 3 TERMS OF PAYMENT.............................................................. 17
3.1 Note and Payments............................................................. 17
3.2 Interest and Principal Payments............................................... 18
3.3 Interest Options.............................................................. 18
3.4 Selection of Interest Option.................................................. 18
3.5 Default Rate.................................................................. 19
3.6 Interest Recapture............................................................ 19
3.7 Interest Calculations......................................................... 19
3.8 Maximum Rate.................................................................. 20
3.9 Order of Application.......................................................... 20
3.10 Offset........................................................................ 20
3.11 Booking Borrowings............................................................ 20
3.12 Basis Unavailable or Inadequate for the Eurodollar Rate....................... 21
3.13 Additional Costs.............................................................. 21
3.14 Change in Law................................................................. 22
3.15 Funding Loss.................................................................. 23
3.16 Sharing of Payments, etc...................................................... 23
3.17 Foreign Lenders............................................................... 23
3.18 Extension..................................................................... 23
SECTION 4 FEES.......................................................................... 24
4.1 Treatment of Fees............................................................. 24
4.2 Commitment Fees............................................................... 24
4.3 Extension Fee................................................................. 24
SECTION 5 CONDITIONS PRECEDENT.......................................................... 24
SECTION 6 REPRESENTATIONS AND WARRANTIES................................................ 24
6.1 Purpose of Credit Facility.................................................... 24
6.2 Corporate Existence, Good Standing, Authority and Compliance.................. 25
6.3 Affiliates.................................................................... 25
6.4 Authorization and Contravention............................................... 25
6.5 Binding Effect................................................................ 25
6.6 Financial Statements; Fiscal Year............................................. 25
6.7 Litigation.................................................................... 25
6.8 Taxes......................................................................... 26
6.9 Environmental Matters......................................................... 26
6.10 Pension Plans................................................................. 26
6.11 Properties; Liens............................................................. 26
6.12 Locations..................................................................... 27
6.13 Government Regulations........................................................ 27
6.14 Transactions with Affiliates.................................................. 27
6.15 Insurance..................................................................... 27
6.16 Labor Matters................................................................. 27
(i)
6.17 Solvency...................................................................... 27
6.18 Full Disclosure............................................................... 27
6.19 Exemption from ERISA; Plan Assets............................................. 27
6.20 Minority Interests............................................................ 28
6.21 Year 2000 Compliance.......................................................... 28
SECTION 7 AFFIRMATIVE COVENANTS......................................................... 28
7.1 Items to be Furnished......................................................... 28
7.2 Use of Proceeds............................................................... 30
7.3 Books and Records............................................................. 30
7.4 Inspections................................................................... 30
7.5 Taxes......................................................................... 30
7.6 Year 2000 Compliance.......................................................... 30
7.7 Expenses...................................................................... 30
7.8 Maintenance of Existence, Assets, and Business................................ 30
7.9 Insurance..................................................................... 31
7.10 Preservation and Protection of Rights......................................... 31
7.11 Environmental Laws............................................................ 31
7.12 Indemnification............................................................... 31
7.13 REIT Status................................................................... 32
7.14 Hedging Agreements............................................................ 32
7.15 Property Pool................................................................. 32
7.16 Subsidiary Guaranties......................................................... 33
SECTION 8 NEGATIVE COVENANTS............................................................ 33
8.1 Payment of Obligations........................................................ 33
8.2 Employee Plans................................................................ 33
8.3 Secured Debt.................................................................. 33
8.4 Transactions with Affiliates.................................................. 33
8.5 Compliance with Laws and Documents............................................ 34
8.6 Loans, Advances, and Investments.............................................. 34
8.7 Dividends and Distributions................................................... 35
8.8 Sale of Assets................................................................ 36
8.9 Mergers and Dissolutions...................................................... 36
8.10 Assignment.................................................................... 36
8.11 Fiscal Year and Accounting Methods............................................ 36
8.12 New Businesses................................................................ 36
8.13 Government Regulations........................................................ 36
8.14 Negative Pledge Agreements.................................................... 36
SECTION 9 FINANCIAL COVENANTS........................................................... 36
9.1 Leverage Ratios............................................................... 37
9.2 Minimum Consolidated Net Worth................................................ 37
9.3 Interest Expense Coverage Ratio............................................... 37
9.4 Fixed Charge Coverage Ratio................................................... 37
9.5 Preferred Dividend Coverage Ratio............................................. 37
9.6 Unsecured Debt Service Coverage Ratio......................................... 37
SECTION 10 DEFAULT....................................................................... 37
10.1 Payment of Obligation......................................................... 37
10.2 Covenants..................................................................... 37
10.3 Debtor Relief................................................................. 37
10.4 Judgments and Attachments..................................................... 38
10.5 Government Action............................................................. 38
10.6 Misrepresentation............................................................. 38
(ii)
10.7 Default Under Other Agreements................................................ 38
10.8 Validity and Enforceability of Loan Documents................................. 38
10.9 Management Changes............................................................ 39
10.10 Plan Assets................................................................... 39
10.11 Default under Revolving Credit Agreement...................................... 39
SECTION 11 RIGHTS AND REMEDIES........................................................... 39
11.1 Remedies Upon Default......................................................... 39
11.2 Waivers....................................................................... 39
11.3 Performance by Administrative Agent........................................... 40
11.4 Not in Control................................................................ 40
11.5 Course of Dealing............................................................. 40
11.6 Cumulative Rights............................................................. 40
11.7 Application of Proceeds....................................................... 40
11.8 Diminution in Value of Collateral............................................. 40
11.9 Certain Proceedings........................................................... 40
SECTION 12 AGENTS AND LENDERS............................................................ 41
12.1 Agents........................................................................ 41
12.2 Delegation of Duties; Reliance................................................ 42
12.3 Limitation of Administrative Agent's Liability................................ 42
12.4 Limitation of Liability....................................................... 43
12.5 Expenses...................................................................... 43
12.6 Proportionate Absorption of Losses............................................ 44
12.7 Relationship of Lenders....................................................... 44
12.8 Benefits of Agreement......................................................... 44
12.9 Approval of Lenders........................................................... 44
12.10 Default; Collateral........................................................... 45
SECTION 13 MISCELLANEOUS................................................................. 45
13.1 Headings...................................................................... 45
13.2 Nonbusiness Days; Time........................................................ 45
13.3 Communications................................................................ 45
13.4 Form and Number of Documents.................................................. 45
13.5 Survival...................................................................... 46
13.6 Governing Law................................................................. 46
13.7 Invalid Provisions............................................................ 46
13.8 Venue; Service of Process; Jury Trial......................................... 46
13.9 Amendments, Consents, Conflicts, and Waivers.................................. 47
13.10 Multiple Counterparts......................................................... 47
13.11 Successors and Assigns; Participations........................................ 48
13.12 Discharge Only Upon Payment in Full; Reinstatement in Certain Circumstances... 49
13.13 Confidentiality............................................................... 49
13.14 Arbitration................................................................... 50
(a) SPECIAL RULES........................................................ 50
(b) RESERVATION OF RIGHTS................................................ 50
13.15 Limitation of Liability of Trustees, Shareholders and Officers of Borrower.... 51
13.16 Entirety...................................................................... 51
(iii)
SCHEDULES AND EXHIBITS
Schedule 1 Parties, Addresses, Commitments and Wiring Information
Schedule 2 Calculation of Adjusted Leverage Ratio as of December 31, 1998
Schedule 5 Closing Documents
Schedule 6.2 Jurisdictions of Incorporation, Business, and Names
Schedule 6.7 Litigation
Schedule 6.9 Environmental Matters
Schedule 6.10 Pension Plan Disclosures
Schedule 6.12 Chief Executive Office
Schedule 6.14 Affiliates Transactions
Schedule 6.20 Minority Interests
Schedule 7.16-1 Excluded Guarantors
Schedule 7.16-2 Existing Pledged Indebtedness - Unconsolidated Affiliates
Schedule 8.6 Permitted Minority Interests
Exhibit A Compliance Certificate
Exhibit B Conversion Request
Exhibit C Form of Note
Exhibit D Form of Assignment and Acceptance
Exhibit E Form of Subsidiary Guaranty
(iv)
TERM LOAN CREDIT AGREEMENT
THIS TERM LOAN CREDIT AGREEMENT is dated as of March 29, 1999, among
PROLOGIS TRUST, a Maryland real estate investment trust ("Borrower"), the
Lenders (defined below), NATIONSBANK, N.A., a national banking association
("NationsBank"), for itself and as Administrative Agent for the Lenders (in such
capacity, together with its successors and assigns, "Administrative Agent"),
COMMERZBANK AKTIENGESELLSCHAFT, NEW YORK BRANCH, for itself and as Syndication
Agent (in such capacity, together with its successors and assigns, "Syndication
Agent"), and CHASE BANK OF TEXAS, NATIONAL ASSOCIATION, for itself and as
Documentation Agent (in such capacity, together with its successors and assigns,
"Documentation Agent").
R E C I T A L S:
- - - - - - - -
1. Borrower has requested that Lenders provide to Borrower a term loan in
the original principal amount of $150,000,000.
2. Lenders are willing to make such loan to Borrower on the terms and
subject to the conditions set forth in this Agreement.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
SECTION 1 DEFINITIONS AND TERMS.
--------- ---------------------
1.1 Definitions. Unless otherwise indicated, as used in the Loan
Documents:
"Actual Capital Expenditures" means any expenditures by a Person that are
properly classified in the relevant financial statements of such Person in
accordance with GAAP as a capital asset for tenant improvements, capitalized
lease commissions on previously leased space, and recurring capital expenditures
relating to any Property.
"Adjusted Leverage Ratio" means, as of any date, the ratio of (a) all
Indebtedness, to (b) Adjusted Tangible Net Worth, in each case for the Companies
and their Unconsolidated Affiliates calculated on a combined basis in a manner
consistent with the calculation set forth on Schedule 2 and without duplication
of any Indebtedness (e.g., not including both Indebtedness of an Unconsolidated
Affiliate and of a Company resulting from a guaranty of such Indebtedness).
"Adjusted NOI" means, for any period and any Unencumbered Property, the NOI
with respect to such Unencumbered Property adjusted for a capital reserve of
either (a) $0.20 per square foot in the case of Properties that are not
Refrigerated Warehouse Properties, or (b) $0.10 per cubic foot in the case of
Properties that are Refrigerated Warehouse Properties.
"Adjusted Tangible Net Worth" means, as of any date, Tangible Net Worth of
the Companies and their Unconsolidated Affiliates calculated on a combined basis
plus to the extent subtracted from Total Assets in calculating Tangible Net
Worth, the goodwill of Frigoscandia AB, CS Integrated LLC, KingsPark Holding
S.A., and Garanor S.A. not to exceed the amount of such goodwill set forth on
the consolidated financial statements of the Companies and the applicable
Unconsolidated Affiliates dated as of December 31, 1998.
"Administrative Agent" is defined in the preamble to this Agreement.
"Affiliate" of a Person means any other individual or entity who directly
or indirectly controls, or is controlled by, or is under common control with,
that Person. For purposes of this definition "control," "controlled by," and
"under common control with" mean possession, directly or indirectly, of power to
direct (or cause the direction of) management or policies (whether through
ownership of voting securities or other ownership interests, by contract, or
otherwise).
"Agents" means Administrative Agent, Documentation Agent, and Syndication
Agent, and "Agent" means any one of the Agents.
"Agreement" means this Credit Agreement, as amended, supplemented, or
restated from time to time.
"Applicable Facility Fee Percentage" means, at the time of determination
thereof, the percentage per annum set forth below based upon the Rating
Requirement:
===============================================================
Rating Requirement Applicable
Percentage
===============================================================
Xxxxx'x S & P DCR
Rating Rating Rating
===============================================================
Less than Less than Less than 0.30%
Baa3 or not BBB- or not BBB- or not
rated rated rated
===============================================================
Baa3 BBB- BBB- 0.25%
===============================================================
Baa2 BBB BBB 0.20%
===============================================================
Baa1 BBB+ BBB+ 0.20%
===============================================================
A3 A- A- 0.15%
===============================================================
A2 or better A or better A or better 0.15%
===============================================================
"Applicable Margin" means, at the time of determination thereof, the
interest margin per annum over the Base Rate or the Eurodollar Rate, as the case
may be, based upon the Rating Requirement as follows:
2
(a) From the Closing Date through the Initial Maturity Date:
========================================================================================
Rating Requirement Applicable Margin
========================================================================================
Xxxxx'x S & P DCR Base Rate Eurodollar
Rating Rating Rating Borrowings Borrowings
========================================================================================
Less than Less than Less than 0.5% 1.90%
Baa3 or not BBB- or not BBB- or not
rated rated rated
========================================================================================
Baa3 BBB- BBB- 0% 1.20%
========================================================================================
Baa2 BBB BBB 0% 1.10%
========================================================================================
Baa1 BBB+ BBB+ 0% 1.00%
========================================================================================
A3 X- X- 0% 0.85%
========================================================================================
A2 or better A or better A or better 0% 0.75%
========================================================================================
(b) After the Initial Maturity Date through the Extended Maturity Date, if
the Initial Maturity Date is extended to the Extended Maturity Date pursuant to
Section 3.18:
========================================================================================
Rating Requirement Applicable Margin
========================================================================================
Xxxxx'x S & P DCR Base Rate Eurodollar
Rating Rating Rating Borrowings Borrowings
========================================================================================
Less than Less than Less than 0.75% 2.15%
Baa3 or not BBB- or not BBB- or not
rated rated rated
======================================================================================
Baa3 BBB- BBB- 0% 1.45%
====================================================================================
Baa2 BBB BBB 0% 1.35%
====================================================================================
Baa1 BBB+ BBB+ 0% 1.25%
====================================================================================
A3 X- X- 0% 1.10%
====================================================================================
A2 or better A or better A or better 0% 1.00%
========================================================================================
"Applicable Pension Laws" means, with respect to any Person, all pension
Laws applicable to such Person, including, without limitation, ERISA.
"Base Rate" means, for any day, the greater of (a) the sum of the Federal
Funds Rate plus one-half of one percent (0.5%), and (b) the annual interest rate
most recently announced by Administrative Agent as its prime rate (or, if the
Person then acting as Administrative Agent under this Agreement is not a bank
organized under the Laws of the United States or any State, then the rate
announced by NationsBank as its prime rate) in effect at its office in Dallas,
Texas, automatically fluctuating upward and downward with and
3
as specified in each announcement without special notice to Borrower or any
other Person (which prime rate may not necessarily represent the lowest or best
rate actually charged to a customer).
"Base Rate Borrowing" means a Borrowing bearing interest at the sum of the
Base Rate plus the Applicable Margin.
"Borrower" is defined in the preamble to this Agreement.
"Borrowing" means (without duplication) any amount disbursed by (a) any
Credit Party to or on behalf of Borrower under this Agreement (under the
Competitive Bid Subfacility, the Swing Line Subfacility, or otherwise), or (b)
any Credit Party in accordance with, and to satisfy the obligations of any
Company under, this Agreement.
"Borrowing Date" means for any Borrowing (a) the date for which funds are
requested by Borrower, or (b) the date any Borrowing is converted hereunder to
another Type of Borrowing.
"Business Day" means (a) for all purposes, any day other than Saturday,
Sunday, and any other day that commercial banks are authorized by Law to be
closed in Texas or New York, and (b) for purposes of any Eurodollar Borrowing, a
day that satisfies the requirements of clause (a) and is a day when commercial
banks are open for domestic or international business in London.
"Capital Expenditures" means an amount equal the sum of (a) in the case of
Properties that are not Refrigerated Warehouse Properties, the greater of (i)
Actual Capital Expenditures with respect to such Properties during the four (4)
fiscal quarters ending on the date of determination, and (ii) the product of (A)
the sum of the total square footage with respect to all completed industrial
space in all such Properties as of the last day of each of the immediately
preceding five (5) calendar quarters, divided by five (5), and (B) $0.15, and
(b) in the case of Properties that are Refrigerated Warehouse Properties, the
greater of (i) Actual Capital Expenditures with respect to such Properties
during the four (4) fiscal quarters ending on the date of determination, and
(ii) the product of (A) the sum of the total cubic footage with respect to all
completed space in all such Properties as of the last day of each of the
immediately preceding five (5) calendar quarters, divided by five (5), and (B)
$0.06.
"Capital Lease" means any capital lease or sublease that has been (or under
GAAP should be) capitalized on a balance sheet.
"Cash Equivalents" means (a) investments and direct obligations of the
United States of America or any agency thereof, or obligations fully guaranteed
by the United States of America or any agency thereof, provided that such
obligations mature within one (1) year of the date of acquisition thereof, (b)
commercial paper rated "A-1" (or higher) according to S & P, or "P-1" (or
higher) according to Xxxxx'x and maturing not more than one hundred eighty (180)
days from the date of acquisition thereof, (c) time deposits with, and
certificates of deposit and bankers' acceptances issued by, Administrative
Agent, any Lender, or any United States bank having capital surplus and
undivided profits aggregating at least $1,000,000,000, and (d) mutual funds
whose investments are substantially limited to the foregoing.
"Change in Control" means, with respect to Borrower, the transfer of
beneficial ownership of the outstanding Stock of Borrower such that (a) Security
Capital Group Incorporated and/or its Affiliates own, directly or indirectly,
less than twenty percent (20%) of the Stock (other than non-voting perpetual
preferred Stock) of Borrower, and (b) any Person other than Security Capital
Group Incorporated and/or its Affiliates
4
owns, directly or indirectly, more than twenty percent (20%) of the Stock (other
than non-voting perpetual preferred Stock) of Borrower.
"Closing Date" means the date this Agreement is fully executed and
delivered.
"Code" means the Internal Revenue Code of 1986, as amended, and the rules
and regulations promulgated thereunder.
"Companies" means, without duplication, Borrower and each of its
Consolidated Affiliates, and "Company" means any one of the Companies.
"Compliance Certificate" means a certificate substantially in the form of
Exhibit A and signed by a Responsible Officer.
"Consolidated Affiliate" means, in respect of any Person, any other Person
in whom such Person holds an equity or ownership interest and whose financial
results would be consolidated under GAAP with the financial results of such
Person on the consolidated financial statements of such Person.
"Consolidated Net Worth" means, for any Person as of any date, (a) Total
Assets, minus (b) all Liabilities of such Person, minus (c) the amount
determined in accordance with GAAP attributable to any minority interests in
Consolidated Affiliates of such Person.
"Constituent Documents" means, with respect to any Person, its articles or
certificate of incorporation, charter, bylaws, certificates of limited
partnership, partnership agreements, limited liability company agreements,
organizational documents, and such other documents as may govern such Person's
formation or organization.
"Conversion Request" means a request in substantially the form of Exhibit B
and signed by a Responsible Officer.
"Credit Parties" means Agents and Lenders, and "Credit Party" means any one
of the Credit Parties.
"Current Financials" means, at any time, the consolidated Financial
Statements of the Companies most recently delivered to Administrative Agent
under Section 7.1(a) or 7.1(b), as the case may be (or, prior to delivery of any
such Financial Statements, the consolidated Financial Statements of the
Companies dated as of December 31, 1998).
"Customary Recourse Exceptions" means, with respect to any Non-Recourse
Debt, exclusions from the exculpation provisions with respect to such Non-
Recourse Debt for fraud, misapplication of cash, environmental claims, and other
circumstances customarily excluded by institutional lenders from exculpation
provisions and/or included in separate indemnification agreements in non-
recourse financings of real estate.
"DCR" means Duff & Xxxxxx Credit Rating Co. or, if DCR no longer publishes
ratings, then another ratings agency selected by Borrower and acceptable to
Administrative Agent.
"DCR Rating" means the most recently-announced rating from time to time of
DCR assigned to any class of long-term senior, unsecured Liability securities
issued by Borrower, as to which no letter of credit,
5
guaranty, or third party credit support is in place, regardless of whether all
or any part of such Liability has been issued at the time such rating was
issued.
"Debt Service" means, for any Person for any period, the sum of all
regularly scheduled principal payments (other than Excluded Debt Service) and
all Interest Expense that are paid or payable during such period in respect of
all Indebtedness of such Person (excluding the payment or amortization of
Interest Expense consisting of fees and expenses paid upon the incurrence of
Indebtedness and paid in cash with the proceeds of such Indebtedness).
"Debtor Relief Laws" means Title 11 of the United States Code and all other
applicable state or federal liquidation, conservatorship, bankruptcy,
moratorium, rearrangement, receivership, insolvency, reorganization, suspension
of payments, or similar Laws affecting creditors' Rights in effect from time to
time.
"Default" is defined in Section 10.
"Defaulting Lender" means, as of any date, any Lender that has defaulted on
any of its obligations under this Agreement, which default has not been cured or
waived as of such date.
"Default Rate" means an annual rate of interest equal from day to day to
the lesser of (a) the then-existing Base Rate plus four percent (4%), and (b)
the Maximum Rate.
"Disqualified Stock" means any Company's Stock which by its terms (or by
the terms of any Stock into which it is convertible or for which it is
exchangeable or exercisable) (a) matures or is subject to mandatory redemption,
pursuant to a sinking fund obligation or otherwise, (b) is convertible into or
exchangeable or exercisable for a Liability or Disqualified Stock during the
term of this Agreement, (c) is redeemable during the term of this Agreement at
the option of the holder of such Stock, or (d) otherwise requires any mandatory
payments by any Company, in each case on or before the Termination Date.
"Distribution" means, with respect to any Stock of any Person, (a) the
retirement, redemption, purchase, or other acquisition for value of such Stock
by such Person, (b) the declaration or payment of any dividend on or with
respect to such Stock by such Person, (c) any loan or advance by that Person to,
or other investment by that Person in, the holder of any of such Stock, and (d)
any other payment by that Person with respect to such Stock.
"Documentation Agent" is defined in the preamble to this Agreement.
"Dollars" and the symbol "$" mean lawful money of the United States of
America.
"Domestic Properties" means each Property located in the United States, and
"Domestic Property" means any one of the Domestic Properties.
"EBITDA" means, for any Refrigerated Warehouse Property for any period, and
without duplication, (a) net income with respect to such Refrigerated Warehouse
Property determined in accordance with GAAP, plus (b) extraordinary losses
determined in accordance with GAAP and reflected in the determination of net
income, minus (c) extraordinary gains determined in accordance with GAAP and
reflected in the determination of income, plus (d) losses determined in
accordance with GAAP in connection with foreign currency exchange transactions,
minus (e) gains determined in accordance with GAAP in connection with
6
foreign currency exchange transactions, plus (f) all amounts deducted in
calculating net income, in conformity with GAAP, for Interest Expense, taxes,
depreciation, and amortization.
"Eligible Institution" means a commercial bank or a finance company,
insurance company, or other financial institution that is regularly engaged in
making, purchasing, or investing in loans, but shall not include any Person
which is an Affiliate of Borrower.
"Environmental Law" means any Law that relates to the pollution or
protection of the environment or to Hazardous Substances.
"Equity Issuance" means the issuance or sale by any Person of any of its
Stock.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended, and the rules and regulations promulgated thereunder.
"ERISA Affiliate" means any trade or business (whether or not incorporated)
which, together with Borrower, are treated as a single employer under Section
414(b) or (c) of the Code (and Section 414(m) or (o) of the Code for purposes of
provisions related to Section 412 of the Code).
"Eurodollar Borrowing" means a Borrowing bearing interest at the sum of the
Eurodollar Rate plus the Applicable Margin.
"Eurodollar Rate" means, for any Eurodollar Borrowing for any Interest
Period therefor, the rate per annum (rounded upwards, if necessary, to the
nearest 1/100 of 1%) appearing on Dow Xxxxx Markets Page 3750 (or any successor
page) as the London interbank offered rate (Eurodollar) for deposits in Dollars
at approximately 11:00 a.m. (London time) two (2) Business Days prior to the
first (1st) day of such Interest Period for a term comparable to such Interest
Period. If for any reason such rate is not available, then the term "Eurodollar
Rate" shall mean, for any Eurodollar Borrowing for any Interest Period therefor,
the rate per annum (rounded upwards, if necessary, to the nearest 1/100 of 1%)
appearing on Reuters Screen LIBO Page as the London interbank offered rate for
deposits in Dollars at approximately 11:00 a.m. (London time) two (2) Business
Days prior to the first (1st) day of such Interest Period for a term comparable
to such Interest Period; provided, however, if more than one (1) rate is
specified on Reuters Screen LIBO Page, then the applicable rate shall be the
arithmetic mean of all such rates (rounded upwards, if necessary, to the nearest
1/100 of 1%).
"Excluded Debt Service" means, for any period, any regularly scheduled
principal payments on (a) any Indebtedness which pays such Indebtedness in full,
but only to the extent that the amount of such final payment is greater than the
scheduled principal payment immediately preceding such final payment, and (b)
any Indebtedness that is rated at least Baa3 and BBB-, as the case may be, by at
least two (2) of Moody's, S & P, and DCR and issued prior to December 31, 1998.
"Extended Maturity Date" means March 31, 2000.
"Extension Request" is defined in Section 3.20.
"Federal Funds Rate" means, on any day, the annual rate (rounded upwards,
if necessary, to the nearest 0.01%) determined by Administrative Agent (which
determination is conclusive and binding, absent manifest error) to be equal to
the weighted average of the rates on overnight federal funds transactions with
7
member banks of the Federal Reserve System arranged by federal funds brokers as
published by the Federal Reserve Bank of New York on the next successive
Business Day; provided, however, that (a) if such determination date is not a
Business Day, then the Federal Funds Rate for such day shall be the rate for
such transactions on the next preceding Business Day as published on the next
successive Business Day, and (b) if those rates are not published for any
Business Day, then the Federal Funds Rate shall be the average of the quotations
at approximately 10:00 a.m. on such Business Day received by Administrative
Agent from three (3) federal funds brokers of recognized standing selected by
Administrative Agent in its sole discretion.
"Financial Statements" of a Person means balance sheets and statements of
earnings, shareholders' equity, and cash flow prepared (a) according to GAAP,
(b) except as stated in Section 1.4, in comparative form to prior year-end
figures or corresponding periods of the preceding fiscal year, as applicable,
and (c) on a consolidated basis if that Person had any Consolidated Affiliates
during the applicable period; provided that Financial Statements for any fiscal
quarter may omit footnotes and shall be subject to normal audit adjustments.
"Fixed Charge Coverage Ratio" means, as of any date, the ratio of (a) (i)
Funds from Operations, plus (ii) Interest Expense, minus (iii) Capital
Expenditures, to (b) the sum of (i) Debt Service in respect of all Indebtedness,
plus (ii) Distributions of any kind or character or other proceeds paid or
payable with respect to Disqualified Stock, in each case for the Companies and
for the four (4) fiscal quarters ending on the date of determination.
"Funding Loss" means, without duplication, any loss, expense, or cost
incurred by any Lender (including any loss, expense, or cost incurred by reason
of the liquidation or reemployment of deposits or other funds acquired by such
Lender to make or maintain any portion of any Borrowing as a Eurodollar
Borrowing or a Fixed Rate Borrowing, but excluding loss of anticipated profit)
when (a) Borrower fails or refuses (for any reason other than any Lender's
failure to comply with this Agreement) to take any Borrowing that it has
requested under this Agreement, or (b) Borrower prepays or pays any Borrowing or
converts any Borrowing to a Borrowing of another Type, in each case, before the
last day of the applicable Interest Period.
"Funds from Operations" means, for Borrower for any period, net earnings
(before Distributions in respect of preferred Stock) plus depreciation and
amortization (exclusive of amortization of financing costs), all as determined
in accordance with GAAP; provided that there shall not be included in such
calculation (a) any proceeds of any insurance policy other than rental or
business interruption insurance received by such Person, (b) any gain or loss
which is classified as "extraordinary" in accordance with GAAP, (c) any capital
gains and taxes on capital gains (in each case exclusive of such amounts
recognized in accordance with GAAP that are attributable to bona fide sales to
third parties (including the Pan-European Partnership, to the extent of any
third party-interests therein) by ProLogis Services, KingsPark Holding S.A., and
International Consolidated Affiliates of Properties developed by such Persons
with the intention of reselling such Properties to third parties and not holding
such Properties as an Investment), (d) any non-recurring and non-cash event that
is excluded from Borrower's reported Funds from Operations in its quarterly 10-Q
and annual 10-K Financial Statements, (e) any tax expense which is classified as
"deferred" in accordance with GAAP, (f) any tax income which is classified as a
tax benefit in accordance with GAAP, (g) any foreign exchange gain or loss which
is the result of a period ending "xxxx to market" of intercompany or third-party
loans in accordance with GAAP, and (h) gains or losses from sales of depreciated
Properties. The Funds from Operations contribution from Unconsolidated
Affiliates shall be (i) included only to the extent that such amounts have been,
or are not prohibited on the last day of the applicable period of determination
from being, distributed (directly or indirectly) to a Company, and
8
(ii) calculated on the same basis as this definition. Funds from Operations
shall be calculated as if all minority interests in Consolidated Affiliates have
been converted into Stock of Borrower.
"GAAP" means generally accepted accounting principles of the Accounting
Principles Board of the American Institute of Certified Public Accountants and
the Financial Accounting Standards Board that are applicable on the date of this
Agreement, subject to changes permitted by Section 1.4.
"Hazardous Substance" means any substance (a) the presence of which
requires removal, remediation, or investigation under any Environmental Law, or
(b) that is defined or classified as a hazardous waste, hazardous material,
pollutant, contaminant, or toxic or hazardous substance under any Environmental
Law.
"Hedging Agreements" means any and all agreements, devices, or arrangements
designed to protect at least one of the parties thereto from fluctuations of
interest rates, exchange rates, or forward rates applicable to such party's
assets, liabilities, or exchange transactions, including, without limitation,
dollar-denominated or cross-currency interest rate exchange agreements, forward
currency exchange agreements, interest rate cap, swap, or collar protection
agreements, and forward rate currency or interest rate options, as the same may
be amended or modified and in effect from time to time, and any and all
cancellations, buybacks, reversals, terminations, or assignments of the
foregoing.
"Historical Value" means the purchase price of any Property (including
improvements) and ordinary related purchase transaction costs, plus the cost of
subsequent capital improvements made by a Company, less any provision for
losses, all as determined in accordance with GAAP.
"Implied Value" means, as of any determination date with respect to
Properties in the Operating Sub-Pool, the lesser of (a) the aggregate Historical
Value less the outstanding balance of any assessment bonds of the Properties in
the Operating Sub-Pool, and (b) the sum of (i) in the case of Domestic
Properties in the Operating Sub-Pool that are not Refrigerated Warehouse
Properties, the aggregate NOI of such Properties divided by nine and one quarter
percent (9.25%), (ii) in the case of International Properties in the Operating
Sub-Pool that are not Refrigerated Warehouse Properties, the aggregate NOI
(adjusted to include a capital reserve of $0.20 per square foot and for actual
income and withholding taxes) of such Properties divided by eleven percent
(11%), and (iii) in the case of Properties in the Operating Sub-Pool that are
Refrigerated Warehouse Properties, the aggregate EBITDA (adjusted to include a
capital reserve of $0.10 per cubic foot) of such Refrigerated Warehouse
Properties divided by thirteen percent (13%); provided that for Properties in
the Operating Sub-Pool owned for less than three (3) months, the Implied Value
shall equal the Historical Value of such Properties. For purposes of the
foregoing, NOI and EBITDA shall be determined for the twelve- (12-) month period
ending on the date of determination; provided, however, that for any Property
(i) owned by a Company for less than twenty-four (24) months as of the date of
determination, or (ii) on which substantial completion of improvements thereon
was completed less than twenty-four (24) months prior to the date of
determination, NOI and EBITDA shall be annualized based upon the NOI or EBITDA,
as the case may be, of such Property in a manner reasonably satisfactory to
Administrative Agent.
"Indebtedness" means, for any Person, all Liabilities (without duplication)
of such Person that are (a) Liabilities for borrowed money of such Person, (b)
evidenced by bonds, debentures, notes, or similar instruments of such Person,
(c) obligations to pay the deferred purchase price of assets, services, or
Stock, except (i) accounts payables, (ii) obligations incurred in the ordinary
course of business to pay the purchase price of Stock so long as such
obligations are paid within customary settlement terms, and (iii) obligations
9
to purchase Stock (other than Stock of Borrower or any of its Affiliates)
pursuant to subscription or Stock purchase agreements in the ordinary course of
business, (d) secured by a Lien existing on any property of such Person or any
interest of such Person therein, whether or not such Liability shall have been
assumed by such Person, (e) Capital Leases, (f) a guaranty, endorsement, or
other contingent obligation of such Person (other than (i) endorsements in the
ordinary course of business of negotiable instruments or documents for deposit
or collection, and (ii) indemnification obligations and purchase price
adjustments pursuant to acquisition agreements entered into in the ordinary
course of business), and (g) accounts payable, accrued expenses, net obligations
arising under Hedging Agreements, and other Liabilities not included in the
calculation of (a) through (f) above which in the aggregate are in excess of
five percent (5%) of the amount of Total Assets of such Person determined in
accordance with GAAP plus the amount of any accumulated depreciation with
respect to such assets, as of the date of determination.
"Initial Maturity Date" means September 30, 1999.
"Interest Expense" means, for any Person for any period, all interest
expense on such Person's Indebtedness (whether direct, indirect, or contingent,
and including interest on all convertible Liabilities) determined in accordance
with GAAP.
"Interest Expense Coverage Ratio" means, as of any date, the ratio of (a)
the sum of (i) Funds from Operations, plus (ii) Interest Expense, to (b) the sum
of (i) Interest Expense (excluding the payment or amortization of Interest
Expense consisting of fees and expenses paid upon the incurrence of Indebtedness
and paid in cash with the proceeds of such Indebtedness), plus (ii)
Distributions of any kind or character or other proceeds paid or payable with
respect to any Disqualified Stock, in each case for the Companies and for the
four (4) fiscal quarters ending on the date of determination.
"Interest Period" has the meaning set forth in Section 3.9.
"International Properties" means each Property located outside the United
States, and "International Property" means any one of the International
Properties.
"International Consolidated Affiliates" means each Consolidated Affiliate
of Borrower that is not organized under the laws of a state located in the
United States, and "International Consolidated Affiliate" means any one of the
International Consolidated Affiliates.
"Investment" in any Person means any investment, whether by means of Stock
purchase, loan, advance, extension of credit, capital contribution, or
otherwise, in or to such Person, the guaranty of any Liabilities of such Person,
or the subordination of any claim against such Person to other Liabilities of
such Person.
"Laws" means all applicable statutes, laws, treaties, ordinances, rules,
regulations, orders, writs, injunctions, decrees, judgments, opinions, and
interpretations of any Tribunal.
"Lenders" means the financial institutions named on Schedule 1 or on the
most recently amended Schedule 1, if any, delivered by Administrative Agent
under this Agreement, and, subject to this Agreement, their respective
successors and assigns (but not any Participant who is not otherwise a party to
this Agreement).
10
"Leverage Ratio" means, as of any date, the ratio of (a) all Indebtedness,
to (b) Tangible Net Worth, in each case for the Companies on a consolidated
basis.
"Liabilities" means (without duplication), for any Person, (a) any
obligations required by GAAP to be classified upon such Person's balance sheet
as liabilities, (b) any liabilities secured (or for which the holder of the
Liability has an existing Right, contingent or otherwise, to be so secured) by
any Lien existing on property owned or acquired by that Person, (c) any
obligations that have been (or under GAAP should be) capitalized for financial
reporting purposes, and (d) any guaranties, endorsements, and other contingent
obligations with respect to Liabilities or obligations of others, and
"Liability" means any of the Liabilities.
"Lien" means any lien, mortgage, security interest, pledge, assignment,
charge, title retention agreement, or encumbrance of any kind and any other
substantially similar arrangement for a creditor's claim to be satisfied from
assets or proceeds prior to the claims of other creditors or the owners.
"Litigation" means any action by or before any Tribunal.
"Loan Documents" means (a) this Agreement (including the exhibits and
schedules to this Agreement), (b) the Notes, (c) the Subsidiary Guaranties, (d)
any Hedging Agreements with any Lender relating to the Obligation, (e) all other
agreements, documents, and instruments in favor of any Credit Party (or any
Agent on behalf of the Credit Parties) ever delivered in connection with or
under this Agreement or otherwise delivered in connection with all or any part
of the Obligation, and (f) all renewals, extensions, and restatements of, and
amendments and supplements to, any of the foregoing.
"Material Adverse Event" means any circumstance or event that, individually
or collectively with other circumstances or events, reasonably is expected to
result in any (a) material impairment of the ability of Borrower to perform any
of its payment or other material obligations under any Loan Document, (b)
material impairment of the ability of any Credit Party to enforce (i) any of the
material obligations of Borrower under this Agreement or (ii) any of its
respective Rights under the Loan Documents, and, in the case of (i) and (ii),
such impairment shall substantially interfere with the realization of the
principal legal benefits provided by this Agreement and the other Loan
Documents, taken as a whole, (c) material and adverse effect on the financial
condition of the Companies as a whole as represented to Lenders in the Current
Financials, or (d) Default.
"Maturity Date" means (a) if the Initial Maturity Date is not extended to
the Extended Maturity Date pursuant to Section 3.18, then the Initial Maturity
Date, and (b) if the Initial Maturity Date is extended to the Extended Maturity
Date pursuant to Section 3.18, then the Extended Maturity Date.
"Maximum Amount" and "Maximum Rate" respectively mean, for a Lender, the
maximum non-usurious amount and the maximum non-usurious rate of interest that,
under applicable Law, such Lender is permitted to contract for, charge, take,
reserve, or receive on the Obligation.
"Moody's" means Xxxxx'x Investors Service, Inc. or, if Moody's no longer
publishes ratings, another ratings agency selected by Borrower and acceptable to
Administrative Agent.
"Xxxxx'x Rating" means the most recently-announced rating from time to time
of Moody's assigned to any class of long-term senior, unsecured Liability
securities issued by Borrower, as to which no letter of credit, guaranty, or
third party credit support is in place, regardless of whether all or any part of
such Liability has been issued at the time such rating was issued.
11
"NationsBank" is defined in the preamble to this Agreement.
"Net Proceeds" means, with respect to any Equity Issuance by any Person,
the amount of cash received by such Person in connection with such transaction
after deducting therefrom the aggregate, without duplication, of the following
amounts to the extent properly attributable to such transaction: (a) reasonable
brokerage commissions, attorneys' fees, finder's fees, financial advisory fees,
accounting fees, underwriting fees, investment banking fees, and other similar
commissions and fees and expenses and disbursements of any of the foregoing, in
each case to the extent paid or payable by such Person; (b) printing and related
expenses of filing and recording or registration fees or charges or similar fees
or charges paid by such Person; and (c) taxes paid or payable by such Person to
any Tribunal as a result of such transaction.
"New Ventures" means corporations, limited liability companies,
partnerships, joint ventures, and similar entities that are in the business of
providing logistics, distribution, or related services, but whose primary
business is not the ownership of industrial properties.
"NOI" means, for any period and any Property, the difference between (a)
any cash rentals, proceeds, expense reimbursements, or income received from such
Property (but excluding security or other deposits, late fees, early lease
termination, or other penalties of a non-recurring nature), less (b) all cash
costs and expenses (including interest on assessment bonds) incurred as a result
of, or in connection with, the development, operation, or leasing of such
Property, in each case determined in accordance with GAAP.
"Non-Industrial Properties" means Properties that are not used for
manufacturing, processing, or warehousing. The term "Non-Industrial Properties"
excludes Refrigerated Warehouse Properties.
"Non-Recourse Debt" means, for any Person, any Indebtedness of such Person
in which the holder of such Indebtedness may not look to such Person personally
for repayment, other than to the extent of any security therefor or pursuant to
Customary Recourse Exceptions.
"Notes" means the promissory notes substantially in the form of Exhibit C,
and all renewals, extensions, and modifications, rearrangements, and
replacements thereof and any and all substitutions therefor, and "Note" means
any one of the Notes.
"Obligation" means all present and future indebtedness and obligations, and
all renewals, increases, and extensions thereof, or any part thereof, now or
hereafter owed to any Credit Party by any Company under any Loan Document,
together with all interest accruing thereon, fees, costs, and expenses
(including all reasonable attorneys' fees and expenses incurred in the
enforcement or collection thereof) payable under the Loan Documents or in
connection with the protection of Rights under the Loan Documents.
"Operating Sub-Pool" is defined in Section 7.15.
"Pan-European Partnership" means a Luxembourg closed-end private fund
managed by Borrower and whose owners will consist of Borrower and third-party
institutional investors, and whose purpose is to acquire strategic warehouses
and distribution properties developed in Europe by Borrower and/or its
Consolidated Affiliates and Affiliates.
"Participant" is defined in Section 13.11(b).
12
"Pension Plan" means an employee pension or benefit plan covered by Title
IV of ERISA or any other Applicable Pension Laws and established or maintained
by Borrower or any ERISA Affiliate.
"Permitted Distributions" means, for Borrower for any fiscal year of
Borrower, an amount not to exceed ninety-five percent (95%) of Funds from
Operations for such fiscal year.
"Permitted Liens" means (a) Liens granted to any Agent to secure the
Obligation, (b) pledges or deposits made to secure payment of worker's
compensation (or to participate in any fund in connection with worker's
compensation insurance), unemployment insurance, pensions, or social security
programs, (c) encumbrances consisting of zoning restrictions, easements, or
other restrictions on the use of real property, provided that such items do not
materially impair the use of such property for the purposes intended and none of
which is violated in any material respect by existing or proposed structures or
land use, (d) the following: (i) Liens for taxes not yet due and payable or are
being contested in good faith by appropriate proceedings diligently conducted,
and for which reserves in accordance with GAAP or otherwise reasonably
acceptable to Administrative Agent have been provided; or (ii) Liens imposed by
mandatory provisions of law such as for materialmen's, mechanic's,
warehousemen's, and other like Liens arising in the ordinary course of business,
securing payment of any Liability whose payment is not yet due, (e) Liens for
taxes, assessments, and governmental charges or assessments that are being
contested in good faith by appropriate proceedings diligently conducted, and for
which reserves in accordance with GAAP or otherwise reasonably acceptable to
Administrative Agent have been provided, (f) Liens on Properties where Borrower
is insured against such Liens by title insurance, (g) Liens securing assessments
or charges payable to a property owner association or similar entity, which
assessments are not yet due and payable or are being contested in good faith by
appropriate proceedings diligently conducted, and for which reserves in
accordance with GAAP or otherwise reasonably acceptable to Administrative Agent
have been provided, (h) Liens securing assessment bonds, so long as no Company
is in material default under the terms thereof, (i) Liens granted to Borrower by
any other Company or an Unconsolidated Affiliate of Borrower, and (j) leases to
tenants of space in Properties that are entered into in the ordinary course of
business.
"Person" means any individual, entity, or Tribunal.
"Pool" is defined in Section 7.15.
"Pool Consolidated Affiliates" means (a) ProLogis Services so long as
ProLogis Services has no Recourse Debt (other than (i) to Borrower, and (ii)
unsecured guaranties of Indebtedness of Borrower), and (b) Subsidiary Guarantors
(i) that have no Recourse Debt (other than (i) to Borrower, and (ii) unsecured
guaranties of Indebtedness of Borrower), (ii) whose Stock is not subject to any
Lien (other than Permitted Liens), (iii) in which Borrower shall have at least
similar control as it has with respect to any of the Consolidated Affiliates set
forth on Schedule 8.6, and (iv) in which Borrower has the ability to cause such
Subsidiary Guarantors to assume or guarantee, or grant Liens to secure, any
Liabilities of Borrower.
"Potential Default" means the occurrence of any event or the existence of
any circumstance that would, upon notice or lapse of time or both, become a
Default.
"Preferred Dividend Coverage Ratio" means, as of any date, the ratio of (a)
(i) Funds from Operations, plus (ii) Interest Expense, minus (iii) Capital
Expenditures, to (b) the sum of (i) Debt Service in respect of all Indebtedness,
plus (ii) Distributions of any kind or character or other proceeds paid or
payable with respect to all preferred Stock, in each case for the Companies and
for the four (4) fiscal quarters ending on the date of determination.
13
"Preferred Stock Subsidiary" of any Person means a corporation issuing non-
voting preferred Stock (or, if applicable, non-voting common Stock) and no more
than ten percent (10%) of the issued and outstanding voting common Stock to such
Person, which corporation either (a) is a Consolidated Affiliate of such Person,
or (b) owns no assets other than (i) investments otherwise permitted under
Section 8.6, (ii) securities of Consolidated Affiliates of such Preferred Stock
Subsidiary, or (iii) fifty-one percent (51%) or more of the voting Stock of
Unconsolidated Affiliates of such Preferred Stock Subsidiary.
"Principal Debt" means, for a Lender and at any time, the unpaid principal
balance of all outstanding Borrowings from such Lender hereunder.
"ProLogis Services" means ProLogis Development Services Incorporated
(formerly known as SCI Development Services Incorporated).
"Properties" means real estate properties owned by a Company or an
Unconsolidated Affiliate of Borrower, and "Property" means any one of the
Properties.
"Pro Rata" and "Pro Rata Part" means, when determined for any Lender, the
proportion (stated as a percentage) that such Lender's Commitment bears to the
Total Commitment, or, if the Total Commitments shall have been terminated, then
the proportion (stated as a percentage) that the sum of the Principal Debt owed
to such Lender bears to the Total Principal Debt owed to all Lenders.
"Purchaser" is defined in Section 13.11(c).
"Rating Requirement" means, as of any date of determination, the lower of
the two (2) highest ratings of the Xxxxx'x Rating, the S & P Rating, and the DCR
Rating. For purposes hereof, the correlation of the levels or grades of the
Xxxxx'x Rating, the S & P Rating, and the DCR Rating shall be as set forth in
the table included herein in the definition of "Applicable Margin" in the column
labeled "Rating Requirement." Each change in the Rating Requirement shall be
effective commencing on the fifth (5th) Business Day following the earlier to
occur of (a) Administrative Agent's receipt of notice from Borrower, as required
in Section 7.1(k), of an applicable change in the Xxxxx'x Rating, the S & P
Rating, or the DCR Rating and (b) Administrative Agent's actual knowledge of an
applicable change in the Xxxxx'x Rating, the S & P Rating, or the DCR Rating.
"Recourse Debt" means all Indebtedness that is not Non-Recourse Debt;
provided that "Recourse Debt" shall not include Recourse Debt of Unconsolidated
Affiliates of such Person unless the holder of such Recourse Debt has recourse
against such Person for the payment of such Recourse Debt other than to the
extent of any security therefor or pursuant to any Customary Recourse
Exceptions.
"Refrigerated Warehouse Properties" means each Property that is a
temperature-controlled facility, and "Refrigerated Warehouse Property" means any
one of the Refrigerated Warehouse Properties.
"REIT" means a "real estate investment trust" for purposes of the Code.
"Representatives" means representatives, officers, directors, employees,
attorneys, and agents.
"Required Lenders" means as of any date those Lenders (other than any
Defaulting Lenders) holding sixty-six and two-thirds percent (66-2/3%) or more
of the outstanding Principal Debt of the Term Loans (excluding the Principal
Debt of any Defaulting Lenders).
14
"Reserve Requirement" means, with respect to any Eurodollar Borrowing for
the relevant Interest Period, the actual aggregate reserve requirements
(including all basic, supplemental, emergency, special, marginal, and other
reserves required by applicable Law) applicable to a member bank of the Federal
Reserve System for eurocurrency fundings or liabilities.
"Responsible Officer" means any chairman, president, chief executive
officer, chief financial officer, controller, secretary, senior vice president,
or vice president of Borrower.
"Revolving Credit Agreement" means that certain Credit Agreement dated of
even date herewith, executed by and among Borrower, NationsBank, as
Administrative Agent, the Syndication Agent defined therein, the Documentation
Agent defined therein, and the Lenders defined therein, as modified, amended,
renewed, extended, or restated from time to time.
"Rights" means rights, remedies, powers, privileges, and benefits.
"Secured Debt" means, for any Person, Indebtedness of such Person secured
by any Liens (other than Permitted Liens) in any of such Person's Properties or
other assets.
"Solvent" means, as to a Person, that (a) the aggregate fair market value
of its assets exceeds its liabilities, (b) it has sufficient cash flow to enable
it to pay its Liabilities as they mature, and (c) it does not have unreasonably
small capital to conduct its businesses.
"S & P" means Standard & Poor's Rating Group, a division of McGraw Hill,
Inc., a New York corporation, or, if S & P no longer publishes ratings, then
another ratings agency selected by Borrower and acceptable to Administrative
Agent.
"S & P Rating" means the most recently-announced rating from time to time
of S & P assigned to any class of long-term senior, unsecured Liability
securities issued by Borrower, as to which no letter of credit, guaranty, or
third party credit support is in place, regardless of whether all or any part of
such Liability has been issued at the time such rating was issued.
"Stock" means all shares, options, warrants, general or limited partnership
interests, membership interests, or other ownership interests (regardless of how
designated) of or in a corporation, partnership, limited liability company,
trust, or other entity, whether voting or nonvoting, including common stock,
preferred stock, or any other "equity security" (as such term is defined in Rule
3a11-1 of the General Rules and Regulations promulgated by the Securities and
Exchange Commission under the Securities Exchange Act of 1934, as amended).
"Subsidiary Guaranties" means (a) an Unconditional Guaranty Agreement in
substantially the form of Exhibit E, executed by each Consolidated Affiliate
(other than International Consolidated Affiliates) of Borrower pursuant to
Section 7.17, and (b) any Unconditional Guaranty Agreement in substantially the
form of Exhibit E and modified to the extent required under applicable Laws,
executed by an International Consolidated Affiliate of Borrower pursuant to
Section 7.17, in each case as modified, amended, and supplemented from time to
time, and "Subsidiary Guaranty" means any one of the Subsidiary Guaranties.
"Subsidiary Guarantors" means each Consolidated Affiliate of Borrower
executing a Subsidiary Guaranty.
15
"Syndication Agent" is defined in the preamble to this Agreement.
"Tangible Net Worth" means, for any Person as of any date, (a) Total Assets
less (to the extent included therein) the book value of all assets that would be
treated as intangible assets under GAAP (including goodwill, trademarks, trade
names, copyrights, patents, deferred charges, and unamortized debt discount and
expense), minus (b) all Liabilities of such Person, minus (c) the amount
determined in accordance with GAAP attributable to any minority interests in
Consolidated Affiliates of such Person.
"Taxes" means, for any Person, taxes, assessments, or other governmental
charges or levies imposed upon it, its income, or any of its properties,
franchises, or assets.
"Term Loan" means, for any Lender, the amount stated beside such Lender's
name on Schedule 1 as most recently amended under this Agreement, as the same
may be increased or decreased from time to time by further assignment pursuant
to Section 13.11, and "Term Loans" means the Term Loans of all Lenders in the
aggregate maximum principal amount of $150,000,000.
"Total Assets" means, for any Person as of any date, (a) such Person's
total assets determined in accordance with GAAP, plus (b) accumulated
depreciation with respect to such assets.
"Tribunal" means any (a) local, state, or federal judicial, executive, or
legislative instrumentality, (b) private arbitration board or panel, or (c)
central bank.
"Type" means any type of Borrowing determined with respect to the
applicable interest option.
"Unconsolidated Affiliate" means, in respect of any Person, any other
Person in whom such Person holds Stock and whose financial results would not be
consolidated under GAAP with the financial results of such Person on the
consolidated financial statements of such Person.
"Unencumbered Properties" means, all Domestic Properties in which Borrower,
a Subsidiary Guarantor, or ProLogis Services owns fee simple title or a
leasehold interest, in each case free and clear of any Liens (other than
Permitted Liens).
"Unsecured Debt" means, for any Person, Indebtedness of such Person that is
not Secured Debt.
"Unsecured Debt Service Coverage Ratio" means, as of any date, the ratio of
(a) Adjusted NOI from all Unencumbered Properties during the period of
determination, to (b) all Debt Service in respect of all Unsecured Debt of the
Companies, in each case for the four (4) fiscal quarters ending on the date of
determination.
1.2 Time References. Unless otherwise specified in the Loan Documents (a)
time references are to time in Dallas, Texas, and (b) in calculating a period
from one date to another, the word "from" means "from and including" and the
word "to" or "until" means "to but excluding."
1.3 Other References. Unless otherwise specified in the Loan Documents
(a) where appropriate, the singular includes the plural and vice versa, and
words of any gender include each other gender, (b) headings and caption
references may not be construed in interpreting provisions, (c) monetary
references are to currency of the United States of America, (d) section,
paragraph, annex, schedule, exhibit, and similar references are to the
particular Loan Document in which they are used, (e) references to
16
"telecopy," "facsimile," "fax," or similar terms are to facsimile or telecopy
transmissions, (f) references to "including" mean including without limiting the
generality of any description preceding that word, (g) the rule of construction
that references to general items that follow references to specific items are
limited to the same type or character of those specific items is not applicable
in the Loan Documents, (h) references to any Person include that Person's heirs,
personal representatives, successors, trustees, receivers, and permitted
assigns, (i) references to any Law include every amendment or supplement to it,
rule and regulation adopted under it, and successor or replacement for it, and
(j) references to any Loan Document or other document include every renewal and
extension of it, amendment and supplement to it, and replacement or substitution
for it.
1.4 Accounting Principles. Under the Loan Documents, unless otherwise
stated, (a) GAAP determines all accounting and financial terms and compliance
with financial covenants, (b) otherwise, all accounting principles applied in a
current period must be comparable in all material respects to those applied
during the preceding comparable period, and (c) while Borrower has any
Consolidated Affiliates, all accounting and financial terms and compliance with
financial covenants must be on a consolidated basis, as applicable. If there is
a change in GAAP after the date hereof, the Compliance Certificate shall include
calculations setting forth the adjustments from the relevant financial items as
shown in the Current Financials, based on the then-current GAAP, to the
corresponding financial items based on GAAP as used in the Current Financials
delivered to Administrative Agent and Lenders on or prior to the date hereof, so
as to demonstrate how such financial covenant compliance was derived from the
Current Financials; provided that Administrative Agent or Borrower may request
the other to, whereupon the other party shall, negotiate in good faith for a
period for not more than thirty (30) days regarding amendments to any affected
covenants to make such covenants consistent with the prior covenants and GAAP,
as then in effect, and, after any such revision as shall be agreed to by
Borrower and Administrative Agent, this Agreement will be construed in
accordance with GAAP as then in effect.
SECTION 2 TERM LOANS. Subject to the provisions in the Loan Documents, each
--------- ----------
Lender severally and not jointly agrees to lend to Borrower in a single advance
on the Closing Date, the amount of such Lender's Term Loan. The Term Loans
shall bear interest in accordance with selections made by Borrower from time to
time pursuant to Section 3.4. Borrower may not reborrow any portion of any Term
Loan.
SECTION 3 TERMS OF PAYMENT.
--------- ----------------
3.1 Note and Payments.
(a) The Principal Debt shall be evidenced by the Notes.
(b) Borrower must make each payment and prepayment on the Obligation,
without offset, counterclaim, or deduction, to Administrative Agent's principal
office in Dallas, Texas, in funds that will be available for immediate use by
Administrative Agent by 12:00 noon on the day due. Payments received after such
time shall be deemed received on the next Business Day. Administrative Agent
shall pay to each Lender any payment to which such Lender is entitled on the
same day Administrative Agent receives the funds from Borrower if Administrative
Agent receives the payment or prepayment before 12:00 noon, and otherwise before
12:00 noon on the following Business Day. If and to the extent that
Administrative Agent does not make payments to Lenders when due, then unpaid
amounts shall accrue interest at the Federal Funds Rate from the due date until
(but not including) the payment date.
17
3.2 Interest and Principal Payments.
(a) Interest Payments. Accrued interest on each Borrowing is due and
payable monthly as it accrues on the first (1st) day of each calendar month
(commencing on May 1, 1999).
(b) Principal Payments. All unpaid Principal Debt is due and payable on
the Maturity Date.
(c) Voluntary Prepayment. Borrower may voluntarily prepay all or any part
of the Principal Debt at any time without premium or penalty, subject to the
following conditions:
(i) Administrative Agent must receive Borrower's written prepayment
notice by 11:00 a.m. on the Business Day preceding the date of prepayment,
which shall specify the payment date and the Type and amount of the
Borrowing(s) to be paid, and which shall constitute an irrevocable and
binding obligation of Borrower to make a prepayment on the designated date;
(ii) each partial prepayment must be in the amount of $1,000,000 or
a greater integral multiple of $100,000, or, if less, the unpaid Principal
Debt; and
(iii) Borrower shall pay any related Funding Loss upon demand.
3.3 Interest Options. Except as specifically otherwise provided,
Borrowings shall bear interest at an annual rate equal to the lesser of (a)
either the Base Rate plus the Applicable Margin, or the Eurodollar Rate plus the
Applicable Margin (in each case as designated or deemed designated by Borrower
and, in the case of Eurodollar Borrowings, for the Interest Period designated by
Borrower), and (b) the Maximum Rate. Each change in the Base Rate and Maximum
Rate is effective, without notice to Borrower or any other Person, upon the
effective date of such change.
3.4 Selection of Interest Option.
(a) When Borrower requests any Eurodollar Borrowing, Borrower shall elect
the applicable interest period (each an "Interest Period"), which may be, at
Borrower's option, seven (7) days, fourteen (14) days, twenty-one (21) days, one
(1) month, two (2) months, or three (3) months subject to the following
conditions: (i) each Interest Period applicable to any Borrowing commences on
the date of the initial advance of the Term Loan and thereafter the day on or
after the day when the next preceding applicable Interest Period expires; (ii)
if any Interest Period for a Eurodollar Borrowing begins on a day for which
there exists no numerically corresponding Business Day in the calendar month at
the end of the Interest Period ("Ending Calendar Month"), then the Interest
Period ends on the next succeeding Business Day of the Ending Calendar Month,
unless there is no succeeding Business Day in the Ending Calendar Month in which
case the Interest Period ends on the next preceding Business Day of the Ending
Calendar Month; (iii) no Interest Period for any portion of any Term Loan may
extend beyond the scheduled repayment date for that portion of the Term Loans;
(iv) there may not be in effect at any one time more than five (5) Interest
Periods; (v) each Eurodollar Borrowing with respect to the Term Loans shall be
in the amount of $1,000,000 or a greater integral multiple of $100,000; and (vi)
Borrower may not request a Eurodollar Borrowing if the interest rate applicable
thereto under Section 3.3 would exceed the Maximum Rate in effect on the first
(1st) day of the Interest Period applicable to such Borrowing.
18
(b) Borrower may (i) on the last day of the applicable Interest Period (or
at any other time, subject to payment of any Funding Loss) convert all or part
of a Eurodollar Borrowing to a Base Rate Borrowing, (ii) at any time convert all
or part of a Base Rate Borrowing to a Eurodollar Borrowing, and (iii) on the
last day of an Interest Period, elect a new Interest Period for a Eurodollar
Borrowing; provided that no conversions to or elections of new Interest Periods
for any Eurodollar Borrowings shall be permitted while a Default exists unless
Required Lenders otherwise consent in writing. Any such conversion may be
accomplished by delivering a Conversion Request to Administrative Agent no later
than 11:00 a.m. (A) on the third (3rd) Business Day before (x) the conversion
date for conversion to a Eurodollar Borrowing, and (y) the last day of the
Interest Period, for the election of a new Interest Period, and (B) one (1)
Business Day before the last day of the Interest Period for conversion to a Base
Rate Borrowing. Absent Borrower's notice of conversion or election of a new
Interest Period, a Eurodollar Borrowing shall be converted to a Base Rate
Borrowing when the applicable Interest Period expires.
3.5 Default Rate. If permitted by Law, all past-due Principal Debt and
past-due interest shall bear interest from the date due (stated or by
acceleration) at the Default Rate until paid, regardless whether payment is made
before or after entry of a judgment.
3.6 Interest Recapture. If the designated interest rate applicable to any
Borrowing exceeds the Maximum Rate, then the interest rate on that Borrowing is
limited to the Maximum Rate, but any subsequent reductions in the designated
rate shall not reduce the interest rate thereon below the Maximum Rate until the
total amount of accrued interest equals the amount of interest that would have
accrued if that designated rate had always been in effect. If at maturity
(stated or by acceleration), or at final payment of the Notes, the total
interest paid or accrued is less than the interest that would have accrued if
the designated rates had always been in effect, then, at that time and to the
extent permitted by applicable Law, Borrower shall pay an amount equal to the
difference between (a) the lesser of the amount of interest that would have
accrued if the designated rates had always been in effect and the amount of
interest that would have accrued if the Maximum Rate had always been in effect,
and (b) the amount of interest actually paid or accrued on the Notes.
3.7 Interest Calculations.
(a) Interest will be calculated on the basis of actual number of days
elapsed (including the first day but excluding the last day) but computed as if
each calendar year consisted of 360 days in the case of all Eurodollar
Borrowings (unless the calculation would result in an interest rate greater than
the Maximum Rate, in which event interest will be calculated on the basis of a
year of 365 or 366 days, as the case may be), and 365 or 366 days, as the case
may be, in the case of Base Rate Borrowings. All interest rate determinations
and calculations by Administrative Agent are conclusive and binding absent
manifest error.
(b) The provisions of this Agreement relating to calculation of the Base
Rate and the Eurodollar Rate are included only for the purpose of determining
the rate of interest or other amounts to be paid under this Agreement that are
based upon those rates. Each Lender may fund and maintain its funding of all or
any part of each Borrowing as it selects.
3.8 Maximum Rate. Regardless of any provision contained in any Loan
Document or any document related thereto, it is the intent of the parties to
this Agreement that no Credit Party contract for, charge, take, reserve,
receive, or apply, as interest on all or any part of the Obligation any amount
in excess of the Maximum Rate or the Maximum Amount or receive any unearned
interest in violation of any applicable Law, and, if any Credit Party ever does
so, then any excess shall be treated as a partial repayment
19
or prepayment of principal and any remaining excess shall be refunded to
Borrower. In determining if the interest paid or payable exceeds the Maximum
Rate, Borrower and the Credit Parties shall, to the maximum extent permitted
under applicable Law, (a) treat all Borrowings as but a single extension of
credit (and the Credit Parties and Borrower agree that is the case and that
provision in this Agreement for multiple Borrowings is for convenience only),
(b) characterize any non-principal payment as an expense, fee, or premium rather
than as interest, (c) exclude voluntary repayments or prepayments and their
effects, and (d) amortize, prorate, allocate, and spread the total amount of
interest throughout the entire contemplated term of the Obligation. However, if
the Obligation is paid in full before the end of its full contemplated term, and
if the interest received for its actual period of existence exceeds the Maximum
Amount, then the Credit Parties shall refund any excess (and the Credit Parties
may not, to the extent permitted by Law, be subject to any penalties provided by
any Laws for contracting for, charging, taking, reserving or receiving interest
in excess of the Maximum Amount). If the Laws of the State of Texas are
applicable for purposes of determining the "Maximum Rate" or the "Maximum
Amount," then those terms mean the "weekly ceiling" from time to time in effect
under Article 5069-1D.009, Title 79, Revised Civil Statutes of Texas, as
amended.
3.9 Order of Application.
(a) If no Default exists, any payment shall be applied to the Obligation
in the order and manner specified by Borrower.
(b) If a Default exists, any payment (including proceeds from the exercise
of any Rights) shall be applied in the following order: (i) to all fees and
expenses for which the Credit Parties have not been paid or reimbursed in
accordance with the Loan Documents (and if such payment is less than all unpaid
or unreimbursed fees and expenses, then the payment shall be paid against unpaid
and unreimbursed fees and expenses in the order of incurrence or due date); (ii)
to accrued interest on the Principal Debt; and (iii) to the remaining Obligation
in the order and manner as the Required Lenders deem appropriate.
All payments to or for the account of Lenders shall be shared by such Lenders on
a Pro Rata basis.
3.10 Offset. If a Default exists, then each Lender is entitled, but is not
obligated, to exercise (for the benefit of all Lenders in accordance with
Section 3.16) the Rights of offset and banker's Lien against each and every
account and other property, or any interest therein, that Borrower may now or
hereafter have with, or which is now or hereafter in the possession of, that
Lender to the extent of the full amount of the Obligation.
3.11 Booking Borrowings. To the extent permitted by Law, any Lender may
make, carry, or transfer its Borrowings at, to, or for the account of any of its
branch offices or the office of any of its Affiliates. However, no Affiliate is
entitled to receive any greater payment under this Agreement than the transferor
Lender would have been entitled to receive with respect to those Borrowings.
3.12 Basis Unavailable or Inadequate for the Eurodollar Rate. If, prior to
the first (1/st/) day of any Interest Period, (a) Administrative Agent
determines that the basis for determining the applicable rate is not available,
or (b) Lenders holding fifty percent (50%) of the Principal Debt of the Term
Loans notify Administrative Agent that such Lenders have determined that the
rate determined by Administrative Agent as the Eurodollar Rate for any Interest
Period does not accurately reflect the cost to such Lenders of making or
converting Borrowings at that rate for such Interest Period, then Administrative
Agent shall promptly notify Borrower and Lenders of such determination (which is
conclusive and binding on Borrower absent manifest error), and all affected
Borrowings shall bear interest at the sum of the Base Rate plus the
20
Applicable Margin. Until Administrative Agent notifies Borrower that such
circumstances no longer exist, Lenders' commitments under this Agreement to
make, or to convert to, affected Borrowings will be suspended.
3.13 Additional Costs. With respect to any Law, requirement, request,
directive, or change affecting banking institutions generally:
(a) Eurocurrency Reserves. If any Lender shall be required under any
Reserve Requirement to maintain reserves with respect to liabilities or assets
consisting of or including Eurocurrency Liabilities, then (i) such Lender
(through Administrative Agent) shall, within sixty (60) days after the end of
any Interest Period with respect to any Eurodollar Borrowing during which such
Lender was so required to maintain reserves, deliver to Borrower a certificate
stating (A) that such Lender was required to maintain reserves and as a result
such Lender incurred additional costs in connection with making such Eurodollar
Borrowing and (B) in reasonable detail, such Lender's computations of the amount
of additional interest payable by Borrower, pursuant to the provisions below,
and (ii) Borrower shall, within ten (10) days after receipt of any such
certificate, pay to Administrative Agent, for the account of such Lender,
additional interest on the unpaid principal amount of such Eurodollar Borrowing
of such Lender made to it outstanding during the Interest Period with respect to
which the above-referenced certificate was delivered to Administrative Agent, at
a rate per annum equal to the difference obtained by subtracting (x) the
Eurodollar Rate for such Interest Period from (y) the rate obtained by dividing
such Eurodollar Rate by a percentage equal to 100% minus the Reserve Requirement
of such Lender for such Interest Period. The amount of interest payable by
Borrower to any Lender as stated in any certificate delivered to Administrative
Agent pursuant to the provisions of this Section 3.13(a) shall be conclusive
and binding for all purposes, absent manifest error. The provisions of this
Section 3.13(a) shall survive the termination of this Agreement.
(b) Reserves. With respect to any Eurodollar Borrowing, if (i) any change
in present Law, any change in the interpretation or application of any present
Law, or any future Law imposes, modifies, or deems applicable (or if compliance
by any Lender with any such requirement of any Tribunal results in) any such
requirement that any reserves (including any marginal, emergency, supplemental,
or special reserves) be maintained, and (ii) those reserves reduce any sums
receivable by such Lender under this Agreement or increase the costs incurred by
such Lender in advancing or maintaining any portion of any Eurodollar Borrowing,
then (unless the effect is already reflected in the rate of interest then
applicable under this Agreement) such Lender (through Administrative Agent)
shall deliver to Borrower a certificate setting forth in reasonable detail the
calculation of the amount necessary to compensate it for its reduction or
increase (which certificate is conclusive and binding absent manifest error),
and Borrower shall within ten (10) days after receipt of such certificate pay
that amount to Administrative Agent, for the account of such Lender. Such
Lender shall notify Administrative Agent and Borrower of any such determination
as soon as practicable (but in any event within 120 days) after such Lender
obtains actual knowledge of the event or condition prompting such Lender to make
such determination, and Borrower shall not be liable for any such amount or
amounts that accrue between the date such notification is required to be given
and the date notice was actually given. The provisions of and undertakings and
indemnification set forth in this Section 3.13(b) shall survive the satisfaction
and payment of the Obligation and termination of this Agreement.
(c) Capital Adequacy. With respect to any Borrowing, if any change in
present Law or any future Law regarding capital adequacy or compliance by any
Credit Party with any request, directive, or requirement now existing or
hereafter imposed by any Tribunal regarding capital adequacy, or any change in
its written policies or in the risk category of this transaction, reduces the
rate of return on its capital as a consequence of its obligations under this
Agreement to a level below that which it otherwise could have
21
achieved (taking into consideration its policies with respect to capital
adequacy) by an amount deemed by it to be material (and it may, in determining
the amount, use reasonable assumptions and allocations of costs and expenses and
use any reasonable averaging or attribution method), then (unless the effect is
already reflected in the rate of interest then applicable under this Agreement)
Administrative Agent or such Credit Party (through Administrative Agent) shall
notify Borrower and deliver to Borrower a certificate setting forth in
reasonable detail the calculation of the amount necessary to compensate it
(which certificate is conclusive and binding absent manifest error), and
Borrower shall within ten (10) days after receipt of such certificate pay that
amount to Administrative Agent for the account of such Credit Party. Such
Credit Party shall notify Administrative Agent and Borrower of any such
determination as soon as practicable (but in any event within 120 days) after
such Lender obtains actual knowledge of the event or condition prompting such
Credit Party to make such determination, and Borrower shall not be liable for
any such amount or amounts that accrue between the date such notification is
required to be given and the date notice was actually given. The provisions of
and undertakings and indemnification set forth in this Section 3.13(c) shall
survive the satisfaction and payment of the Obligation and termination of this
Agreement.
(d) Taxes. Any Taxes payable by any Credit Party or ruled (by a Tribunal)
payable by any Credit Party in respect of this Agreement or any other Loan
Document shall, if permitted by Law, be paid by Borrower, together with interest
and penalties, if any (except for (i) (1) Taxes imposed on or measured by the
overall net income of such Credit Party, (2) franchise or similar taxes of such
Credit Party, and (3) amounts requested to be withheld for Taxes pursuant to the
last sentence of Section 3.17, and (ii) such interest and penalties incurred as
a result of the gross negligence or willful misconduct of any Credit Party).
Such Credit Party (through Administrative Agent) shall notify Borrower and
deliver to Borrower a certificate setting forth in reasonable detail the
calculation of the amount of payable Taxes, which certificate is conclusive and
binding (absent manifest error), and Borrower shall within ten (10) days after
receipt of such certificate pay that amount to Administrative Agent for its
account or the account of such Credit Party, as the case may be. If such Credit
Party subsequently receives a refund of the Taxes paid to it by Borrower, then
the recipient shall promptly pay the refund to Borrower.
3.14 Change in Law. If any Law makes it unlawful for any Lender to make or
maintain Eurodollar Borrowings, then such Lender shall promptly notify Borrower
and Administrative Agent, and with respect to such Lender's Borrowings (a) as to
undisbursed funds, that requested Borrowing shall be made as a Base Rate
Borrowing, and (b) as to any outstanding Borrowing, (i) if maintaining the
Borrowing until the last day of the applicable Interest Period is unlawful, the
Borrowing shall be converted to a Base Rate Borrowing as of the date of notice,
and Borrower shall pay any related Funding Loss, or (ii) if not prohibited by
Law, the Borrowing shall be converted to a Base Rate Borrowing as of the last
day of the applicable Interest Period, or (iii) if any conversion will not
resolve the unlawfulness, then Borrower shall promptly prepay the Borrowing,
without penalty, together with any related Funding Loss.
3.15 Funding Loss. Borrower Agrees To Indemnify Each Lender Against, And
Pay To Each Lender Within Ten (10) Days After Demand, Any Funding Loss Of Such
Lender. When any Lender demands that Borrower pay any Funding Loss, such Lender
shall deliver to Borrower and Administrative Agent a certificate setting forth
in reasonable detail the basis for such Funding Loss and the calculation of the
amount, which calculation is conclusive and binding absent manifest error. The
provisions of and undertakings and indemnification set forth in this Section
3.15 shall survive the satisfaction and payment of the Obligation and
termination of this Agreement.
3.16 Sharing of Payments, etc. If any Lender obtains any amount (whether
voluntary, involuntary, or otherwise, including as a result of exercising its
Rights under Section 3.10) that exceeds the
22
part of that payment that such Lender is entitled to receive under the Loan
Documents, then such Lender shall purchase from the other Lenders participations
that will cause the purchasing Lender to share the excess amount ratably with
each other Lender. If all or any portion of any excess payment is subsequently
recovered from the purchasing Lender, then the purchase shall be rescinded and
the purchase price restored to the extent of the recovery. Borrower agrees that
any Lender purchasing a participation from another Lender under this Section
3.16 may, to the fullest extent permitted by Law, exercise all of its Rights of
payment (including the Right of offset) with respect to that participation as
fully as if such Lender were the direct creditor of Borrower in the amount of
that participation.
3.17 Foreign Lenders. Each Lender that is organized under the Laws of any
jurisdiction other than the United States of America or any State thereof (a)
represents to Administrative Agent and Borrower that (i) no Taxes are required
to be withheld by Administrative Agent or Borrower with respect to any payments
to be made to it in respect of the Obligation, and (ii) it has furnished to
Administrative Agent and Borrower two (2) duly completed copies of United States
Internal Revenue Service Form 4224, Form 1001, Form W-8, or any other tax form
acceptable to Administrative Agent (wherein it claims entitlement to complete
exemption from United States federal withholding tax on all interest payments
under the Loan Documents), and (b) covenants to (i) provide Administrative Agent
and Borrower a new tax form upon the expiration or obsolescence of any
previously delivered form according to Law, duly executed and completed by it,
and (ii) comply from time to time with all Laws with regard to the withholding
tax exemption. If any of the foregoing is not true or the applicable forms are
not provided, then Borrower or Administrative Agent (without duplication) may
deduct and withhold from interest payments under the Loan Documents United
States federal income tax at the full rate applicable under the Code.
3.18 Extension. Borrower may request that the Initial Maturity Date be
extended to the Extended Maturity Date by making such request in writing (an
"Extension Request") to Administrative Agent on or before August 31, 1999. The
Initial Maturity Date shall be extended to the Extended Maturity Date only if
(a) Borrower pays to Administrative Agent the extension fee set forth in Section
4.3, and (b) no Default or Potential Default exists at the time of Borrower's
request for such extension.
SECTION 4 FEES.
--------- ----
4.1 Treatment of Fees. The fees described in this Section 4 (a) are not
compensation for the use, detention, or forbearance of money, (b) are in
addition to, and not in lieu of, interest and expenses otherwise described in
this Agreement, (c) are payable in accordance with Section 3.1(b), (d) are non-
refundable, (e) to the fullest extent permitted by Law, bear interest, if not
paid when due, at the Default Rate, and (f) are calculated on the basis of
actual number of days (including the first day but excluding the last day)
elapsed, but computed as if each calendar year consisted of 360 days, unless
computation would result in an interest rate in excess of the Maximum Rate in
which event the computation is made on the basis of a year of 365 or 366 days,
as the case may be. The fees described in this Section 4 are in all events
subject to the provisions of Section 3.8.
4.2 Commitment Fees.
(a) Borrower agrees to pay to Administrative Agent the commitment
fees set forth in the separate letter agreement dated of even date
herewith, which fees shall be for the account of Administrative Agent and
for the account of Lenders as shall be agreed between Administrative Agent
and the other Lenders.
23
(b) Borrower shall pay to Administrative Agent, for the ratable
account of each Lender, a facility fee equal to the product of (i) the
average daily Principal Debt for the period from and including the Closing
Date up to but excluding the Maturity Date, times (ii) a rate per annum
equal to the Applicable Facility Fee Percentage. Such facility fee shall
be payable quarterly in arrears on the first (1/st/) day of each January,
April, July, and October during the term hereof and on the Maturity Date,
commencing on July 1, 1999.
4.3 Extension Fee. Upon the extension of the Initial Maturity Date to the
Extended Maturity Date, as provided in Section 3.18, Borrower agrees to pay to
Administrative Agent, for the ratable account of Lenders, an extension fee equal
to one-half of one percent (0.50%) of the unpaid Principal Debt on the Initial
Maturity Date.
SECTION 5 CONDITIONS PRECEDENT. Lenders will not be obligated to fund the Term
--------- --------------------
Loans unless (a) Administrative Agent has timely received all of the items
described on Schedule 5, (b) all of the representations and warranties of
Borrower in the Loan Documents are true and correct in all material respects,
(c) no Default or Potential Default exists, and (d) the funding of the Term
Loans is permitted by Law.
SECTION 6 REPRESENTATIONS AND WARRANTIES. Borrower represents and warrants to
--------- ------------------------------
the Credit Parties as follows:
6.1 Purpose of Credit Facility. Borrower will use proceeds of the
Borrowings hereunder to prepay Indebtedness and general trust purposes.
Borrower is not engaged principally, or as one of its important activities, in
the business of extending credit for the purpose of purchasing or carrying any
"margin stock" within the meaning of Regulation U of the Board of Governors of
the Federal Reserve System, as amended. No part of the proceeds of any
Borrowing will be used, directly or indirectly, for a purpose that violates any
Law, including the provisions of Regulation U.
6.2 Corporate Existence, Good Standing, Authority and Compliance. Each
Company is duly formed, validly existing, and in good standing under the Laws of
the jurisdiction in which it is incorporated or formed as identified on Schedule
6.2 (as supplemented from time to time). Each Company (a) is duly qualified to
transact business and is in good standing as a foreign trust, corporation,
partnership, limited liability company, or other entity in each jurisdiction
where the nature and extent of its business and properties require due
qualification and good standing, (b) possesses all requisite authority, permits,
and power to conduct its business as is now being, or is contemplated by this
Agreement to be, conducted, and (c) is in compliance with all applicable Laws,
except in any such case where violation of the foregoing could not reasonably be
expected to result in a Material Adverse Event.
6.3 Affiliates. As of the date of this Agreement, Borrower has no
Consolidated Affiliates or Unconsolidated Affiliates except as disclosed on
Schedule 6.2 (as supplemented from time to time to reflect changes as a result
of transactions permitted by this Agreement).
6.4 Authorization and Contravention. The execution and delivery by
Borrower of each Loan Document or related document to which it is a party and
the performance by it of its obligations thereunder (a) are within its trust
power, (b) have been duly authorized by all necessary trust action, (c) require
no action by or filing with any Tribunal (other than any action or filing that
has been taken or made on or before the date of this Agreement), (d) do not
violate any provision of its declaration of trust or bylaws, (e) do not violate
any provision of Law or order of any Tribunal applicable to it, (f) do not
violate any material
24
agreements to which it is a party, or (g) do not result in the creation or
imposition of any Lien on any asset of any Company, except in such case where
failure to do so could not reasonably be expected to result in a Material
Adverse Event.
6.5 Binding Effect. Upon execution and delivery by all parties thereto,
each Loan Document to which it is a party will constitute a legal and binding
obligation of Borrower, enforceable against it in accordance with its terms,
subject to applicable Debtor Relief Laws and general principles of equity.
6.6 Financial Statements; Fiscal Year. The Current Financials were
prepared in accordance with GAAP (except that quarterly Financial Statements may
omit footnotes required by GAAP) and present fairly, in all material respects,
the consolidated financial condition, results of operations, and cash flows of
the Companies as of, and for the portion of the fiscal year ending on, the date
or dates thereof (subject only to normal audit adjustments). All material
liabilities of the Companies as of the date or dates of the Current Financials
are reflected therein or in the notes thereto. Except for transactions directly
related to, or specifically contemplated by, the Loan Documents or disclosed in
the Current Financials, no subsequent material adverse changes have occurred in
the consolidated financial condition of the Companies from that shown in the
Current Financials, nor has any Company incurred any subsequent material
liability. The fiscal year of the Companies ends on December 31.
6.7 Litigation. Except as disclosed on Schedule 6.7 and as otherwise
disclosed pursuant to Section 7.1(d)(i), no Company is subject to, or aware of
the threat of, any Litigation that is reasonably likely to be determined
adversely to such Company and which, if so adversely determined, is reasonably
likely to result in a Material Adverse Event. Except as permitted under Section
10.4, no outstanding and unpaid judgments against any Company exist.
6.8 Taxes.
(a) All Tax returns of the Companies required to be filed have been filed
(or extensions have been granted) before delinquency, except for returns for
which the failure to file could not reasonably be expected to result in a
Material Adverse Event, and all Taxes imposed upon the Companies that are due
and payable have been paid before delinquency or are being contested in good
faith by appropriate proceedings diligently conducted and for which reserves in
accordance with GAAP or otherwise reasonably acceptable to Administrative Agent
have been provided.
(b) As of the date hereof, no United States federal income tax returns of
the "affiliated group" (as defined in the Code) of which Borrower is a member
have been examined and closed. The members of such affiliated group have filed
all United States Federal income tax returns and all other material tax returns
which are required to be filed by them and have paid all taxes due pursuant to
such returns or pursuant to any assessment received by or any of them. The
charges, accruals and reserves on the books of Borrower in respect of taxes or
other governmental charges are, in the opinion of Borrower, adequate.
(c) Borrower qualifies as a REIT.
6.9 Environmental Matters. Except as disclosed on Schedule 6.9, and
except for any of the following which could not reasonably be expected to result
in a Material Adverse Event, (a) no environmental condition or circumstance
exists that adversely affects any Company's properties or operations, (b) no
Company has received any report of any Company's violation of any Environmental
Law, (c) no Company knows that any Company is under any obligation to remedy any
violation of any
25
Environmental Law, or (d) no facility of any Company is used for, or to the
knowledge of any Company has been used for, storage, treatment, or disposal of
any Hazardous Substance, except for (i) the storage and use of cleaning and
maintenance materials, used and stored in commercially reasonable quantities and
in compliance with applicable Environmental Laws, and (ii) light manufacturing
and distribution activities of tenants, in compliance with applicable
Environmental Laws, provided that such tenants are not primarily engaged in the
treatment, processing, recycling or disposal of any Hazardous Substance or in
any other activity that would give rise to the release of any Hazardous
Substance on such facility. Each Company has taken prudent steps to determine
that its properties and operations do not violate any Environmental Law, other
than violations that, individually or in the aggregate, could not reasonably be
expected to result in a Material Adverse Event.
6.10 Pension Plans. Except as disclosed on the Financial Statements of
Borrower dated as of December 31, 1998, and except to the extent that any such
termination, liability, penalty, or fine would not (either individually or in
the aggregate) reasonably be expected to have a Material Adverse Event, (a) no
steps have been taken to terminate any Pension Plan, and no contribution failure
has occurred with respect to any Pension Plan sufficient to give rise to a Lien
under any Applicable Pension Laws, (b) no condition exists or event or
transaction has occurred with respect to any Pension Plan which could reasonably
be expected to result in the incurrence by Borrower or any ERISA Affiliate of
any material liability with respect to any contribution thereto, fine, or
penalty, and (c) neither Borrower nor any ERISA Affiliate has any material
contingent liability with respect to any post-retirement benefit under a Pension
Plan.
6.11 Properties; Liens. Each Company has good title to all its property
reflected on the Current Financials (except for property that is obsolete or
that has been disposed in the ordinary course of business or, after the date of
this Agreement, as otherwise permitted by Section 8.8 or Section 8.9). Except
for Permitted Liens and Liens on Properties acquired by a Company, provided that
such Liens are not incurred in contemplation of any Company's acquisition of
such Properties, no Lien exists on any Property of any Company in the Pool, and
the execution, delivery, performance, or observance of the Loan Documents will
not require or result in the creation of any Lien on any of any Company's
Property in the Pool.
6.12 Locations. Borrower's chief executive office is located at the
address on Schedule 6.12 (as supplemented from time to time). Borrower's books
and records are located at its chief executive office.
6.13 Government Regulations. No Company is subject to regulation under
the Investment Company Act of 1940, as amended, or the Public Utility Holding
Company Act of 1935, as amended.
6.14 Transactions with Affiliates. Except as disclosed on Schedule 6.14
(as supplemented from time to time) (if the disclosures are approved by
Administrative Agent) or as permitted by Section 8.4, no Company is a party to a
material transaction with any of its Affiliates, other than transactions in the
ordinary course of business and upon fair and reasonable terms not materially
less favorable than it could obtain or could become entitled to in an arm's-
length transaction with a Person that was not its Affiliate.
6.15 Insurance. Each Company maintains with financially sound,
responsible, and reputable insurance companies or associations (or, as to
workers' compensation or similar insurance, with an insurance fund or by self-
insurance authorized by the jurisdictions in which it operates) insurance
concerning its properties and businesses against casualties and contingencies
and of types and in amounts (and with co-insurance and deductibles) as is
customary in the case of similar businesses.
26
6.16 Labor Matters. No actual or, to Borrower's knowledge, threatened
strikes, labor disputes, slow downs, walkouts, or other concerted interruptions
of operations by the employees of any Company that could reasonably be expected
to result in a Material Adverse Event exist. All payments due from each Company
for employee health and welfare insurance have been paid or accrued as a
liability on its books, other than non-payments that are not, individually or
collectively, reasonably expected to result in a Material Adverse Event.
6.17 Solvency. On each Borrowing Date, Borrower is, and after giving
effect to the requested Borrowing will be, Solvent.
6.18 Full Disclosure. Each material fact or condition relating to the
financial condition or business of any Company which could reasonably be
expected to result in a Material Adverse Event has been disclosed to
Administrative Agent. All information previously furnished, furnished on the
date of this Agreement, and furnished in the future, by any Company to
Administrative Agent in connection with the Loan Documents (a) was, is, and will
be, true and accurate in all material respects or based on good faith estimates
on the date the information is stated or certified, and (b) did not, does not,
and will not, fail to state any material fact the omission of which would
otherwise make any such information materially misleading, in each case taken as
a whole.
6.19 Exemption from ERISA; Plan Assets. The assets of Borrower are not
"plan assets" as defined in 29 C.F.R. (S) 2510.3-101(a)(1) (or any successor
regulation) of any Pension Plan.
6.20 Minority Interests. All Consolidated Affiliates of Borrower having
minority interests are set forth on Schedule 6.20 (as supplemented from time to
time).
6.21 Year 2000 Compliance. Borrower has (a) initiated a review and
assessment of all areas within each Company's business and operations (including
those affected by suppliers and vendors) that could be adversely affected by the
"Year 2000 Problem" (that is, the risk that computer applications used by any
Company (or its material suppliers and vendors) may be unable to recognize and
perform properly date-sensitive functions involving certain dates prior to and
any date after December 31, 1999), (b) developed a plan and timeline for
addressing the Year 2000 Problem on a timely basis, and (c) to date, implemented
that plan in accordance with that timetable. Borrower reasonably believes that
all computer applications (including those of its material suppliers and
vendors) that are material to each Company's business and operations will on a
timely basis be able to perform properly date-sensitive functions for all dates
before and after January 1, 2000 (that is, be "Year 2000 compliant"), except to
the extent that a failure to do so could not reasonably be expected to result in
a Material Adverse Event.
SECTION 7 AFFIRMATIVE COVENANTS. So long as Lenders are committed to fund any
--------- ---------------------
Borrowings under this Agreement and until the Obligation is paid in full,
Borrower covenants and agrees that, unless Required Lenders otherwise consent in
writing (except as provided in Section 13.9 with respect to matters requiring
consent or approval of all Lenders):
7.1 Items to be Furnished. Borrower shall cause the following to be
furnished to Administrative Agent (with sufficient copies for each Lender):
(a) Promptly after preparation, and no later than one hundred (100) days
after the last day of each fiscal year of Borrower, Financial Statements showing
the consolidated financial condition and results of operations of the Companies
as of, and for the year ended on, that last day, accompanied by:
27
(i) the unqualified opinion of the firm of Xxxxxx Xxxxxxxx & Co.
or another firm of nationally-recognized independent certified public
accountants, based on an audit using generally accepted auditing standards,
that the Financial Statements were prepared in accordance with GAAP and
present fairly, in all material respects, the consolidated financial
condition and results of operations of the Companies;
(ii) any management letter prepared by the accounting firm
delivered in connection with its audit;
(iii) a certificate from the accounting firm to Administrative
Agent indicating that during its audit it obtained no knowledge of any
Default or Potential Default or, if it obtained knowledge, the nature and
period of existence thereof;
(iv) a Compliance Certificate with respect to the Financial
Statements; and
(v) a certificate listing the Properties in the Pool and
Operating Sub-Pool, together with a computation in reasonable detail of the
Historical Values and the Implied Value and showing Borrower's compliance
with Sections 7.15 and 8.14.
(b) Promptly after preparation, and no later than fifty (50) days after
the last day of each fiscal quarter (except the last) of Borrower, (i) Financial
Statements showing the consolidated financial condition and results of
operations of the Companies for the fiscal quarter and for the period from the
beginning of the current fiscal year to the last day of the fiscal quarter, (ii)
a Compliance Certificate with respect to the Financial Statements, and (iii) a
certificate listing the Properties in the Pool and Operating Sub-Pool, together
with a computation in reasonable detail of the Historical Values and the Implied
Value and showing Borrower's compliance with Sections 7.15 and 8.14.
(c) Promptly after receipt, a copy of each interim or special audit
report and management letter issued by independent accountants with respect to
any Company or its financial records.
(d) Notice, promptly after a Responsible Officer of Borrower knows of
(i) the existence and status of any Litigation that, if determined adversely to
any Company, could reasonably be expected to result in a Material Adverse Event,
(ii) any change in any material fact or circumstance represented or warranted by
any Company in any Loan Document, (iii) the receipt by any Company of notice of
any violation or alleged violation of any Applicable Pension Law or any
Environmental Law which individually or collectively with other violations or
allegations could reasonably be expected to result in a Material Adverse Event,
or (iv) a Default or Potential Default, specifying the nature thereof and what
action Borrower has taken, is taking, or proposes to take with respect thereto.
(e) Promptly after filing, true, correct, and complete copies of all
material reports or filings filed by or on behalf of any Company with any
Tribunal (including copies of each Form 10-K, Form 10-Q, and Form S-8 filed by
or on behalf of any Company with the Securities and Exchange Commission).
(f) Promptly after the mailing or delivery thereof, copies of all
material reports or other information from Borrower generally to the holders of
its common or preferred Stock.
(g) Promptly upon the consummation thereof, a description in reasonable
detail of any acquisition of material assets other than investments in
industrial Properties.
28
(h) Promptly upon any Change in Control, notice of such event together
with a description of the transaction giving rise thereto.
(i) Promptly upon written request by Administrative Agent and to the
extent available after reasonable inquiry by Borrower, a list of all registered
major holders of Stock of Borrower.
(j) Promptly upon the filing thereof, the annual report of Borrower
filed with the Maryland Department of Corporations.
(k) Promptly upon the receipt of notice thereof, and in any event within
five (5) Business Days after any change in the Xxxxx'x Rating, the S & P Rating
or the DCR Rating, notice of such change.
(l) Promptly upon reasonable request by Administrative Agent,
information (not otherwise required to be furnished under the Loan Documents)
respecting the business affairs, assets, and liabilities of the Companies.
7.2 Use of Proceeds. Borrower shall use the proceeds of Borrowings only
for the purposes represented in this Agreement.
7.3 Books and Records. Borrower shall, and shall cause each of the
other Companies to, maintain books, records, and accounts necessary to prepare
financial statements in accordance with GAAP.
7.4 Inspections. Upon reasonable request, and subject to Section 13.13,
Borrower shall, and shall cause each of the other Companies to, allow
Administrative Agent (or its Representatives who may be accompanied by
Representatives of one (1) or more Lenders) to inspect any of its properties, to
review reports, files, and other records and to make and take away copies, to
conduct tests or investigations, and to discuss (provided that Borrower is given
the opportunity to be present for such discussions), any of its affairs,
conditions, and finances with its other creditors, directors, officers,
employees, or representatives from time to time, during reasonable business
hours.
7.5 Taxes. Borrower shall, and shall cause each of the other Companies
to, promptly pay when due any and all Taxes, other than Taxes which are being
contested in good faith by lawful proceedings diligently conducted, against
which reserve or other provision required by GAAP has been made, and in respect
of which levy and execution of any Lien have been and continue to be stayed.
7.6 Year 2000 Compliance. Borrower will promptly notify Administrative
Agent in the event Borrower discovers or determines that any computer
application (including those of its material suppliers and vendors) that is
material to any Company's business and operations will not be Year 2000
compliant on a timely basis, except to the extent that such failure could not
reasonably be expected to result in a Material Adverse Event.
7.7 Expenses. Borrower shall promptly pay upon reasonable notice (a)
all costs, fees, and expenses paid or incurred by Administrative Agent in
connection with the arrangement, syndication, and negotiation of the loan
evidenced by this Agreement and the other Loan Documents and the negotiation,
preparation, delivery, and execution of the Loan Documents and any related
amendment, waiver, or consent (including in each case the reasonable fees and
expenses of Administrative Agent's counsel), and (b) all costs, fees, and
expenses of Administrative Agent and, after the occurrence and during the
continuance of a Default, each Credit Party incurred by each Credit Party in
connection with the enforcement of the
29
obligations of Borrower arising under the Loan Documents or the exercise of any
Rights arising under the Loan Documents (including reasonable attorneys' fees,
expenses, and costs paid or incurred in connection with any workout or
restructure and any action taken in connection with any Debtor Relief Laws), all
of which shall be a part of the Obligation and shall bear interest, if not paid
within ten (10) days after Borrower's receipt of an invoice in reasonable
detail, at the Default Rate until repaid.
7.8 Maintenance of Existence, Assets, and Business. Except as otherwise
permitted by Section 8.09, Borrower shall, and shall cause each of the other
Companies to, continue to engage in business of the same general type as now
conducted by such Company, and will preserve, renew, and keep in full force and
effect, and will cause each other Company to preserve, renew, and keep in full
force and effect, their respective trust or corporate existence and their
respective rights, privileges and franchises necessary or desirable in the
normal conduct of business, except in any such case where failure to do so would
not reasonably be expected to result in a Material Adverse Event.
7.9 Insurance. Borrower shall, and shall cause each of the other
Companies to, maintain with financially sound, responsible, and reputable
insurance companies or associations (or, as to workers' compensation or similar
insurance, with an insurance fund or by self-insurance authorized by the
jurisdictions in which it operates) insurance concerning its properties and
businesses against casualties and contingencies and of types and in amounts (and
with co-insurance and deductibles) as is customary in the case of similar
businesses. Borrower shall deliver to Administrative Agent (i) at Administrative
Agent's request from time to time, full information as to the insurance carried,
(ii) within five (5) days of receipt of notice from any insurer, a copy of any
notice of cancellation or material change in coverage from that existing on the
date of this Agreement, and (iii) forthwith, notice of any cancellation or non-
renewal of coverage by Borrower. At Administrative Agent's request, Borrower
shall, and shall cause each of the other Companies to, deliver to Administrative
Agent evidence of insurance for each policy of insurance and evidence of payment
of all premiums.
7.10 Preservation and Protection of Rights. Borrower shall, and shall
cause each of the other Companies to, perform the acts and duly authorize,
execute, acknowledge, deliver, file, and record any additional writings as
Administrative Agent may reasonably deem necessary or appropriate to preserve
and protect the Rights of Administrative Agent and Lenders under any Loan
Document.
7.11 Environmental Laws. Borrower shall, and shall cause each of the
other Companies to (a) conduct its business so as to comply with all applicable
Environmental Laws and shall promptly take corrective action to remedy any non-
compliance with any Environmental Law, except where failure to comply or take
action could not reasonably be expected to result in a Material Adverse Event,
and (b) establish and maintain a management system designed to ensure compliance
with applicable Environmental Laws and minimize financial and other risks to the
Companies arising under applicable Environmental Laws or as the result of
environmentally related injuries to Persons or property. Borrower shall deliver
reasonable evidence of compliance with the foregoing covenant to Administrative
Agent within thirty (30) days after any request from Administrative Agent.
7.12 Indemnification. BORROWER SHALL, AND SHALL CAUSE EACH OF THE
SUBSIDIARY GUARANTORS TO, JOINTLY AND SEVERALLY, INDEMNIFY, PROTECT, AND HOLD
THE CREDIT PARTIES AND THEIR RESPECTIVE REPRESENTATIVES, SUCCESSORS, AND ASSIGNS
(INCLUDING ALL OFFICERS, DIRECTORS, EMPLOYEES, AND AGENTS) (COLLECTIVELY, THE
"INDEMNIFIED PARTIES") HARMLESS FROM AND AGAINST ANY AND ALL LIABILITIES,
OBLIGATIONS, LOSSES, DAMAGES, PENALTIES, ACTIONS, JUDGMENTS, SUITS, CLAIMS, AND
PROCEEDINGS AND ALL COSTS, EXPENSES (INCLUDING ALL
30
REASONABLE ATTORNEYS' FEES AND LEGAL EXPENSES WHETHER OR NOT SUIT IS BROUGHT)
AND DISBURSEMENTS OF ANY KIND OR NATURE (THE "INDEMNIFIED LIABILITIES") THAT MAY
AT ANY TIME BE IMPOSED ON, INCURRED BY OR ASSERTED AGAINST THE INDEMNIFIED
PARTIES, IN ANY WAY RELATING TO OR ARISING OUT OF (A) THE DIRECT OR INDIRECT
RESULT OF THE VIOLATION BY ANY COMPANY OF ANY ENVIRONMENTAL LAW, (B) ANY
COMPANY'S GENERATION, MANUFACTURE, PRODUCTION, STORAGE, RELEASE, THREATENED
RELEASE, DISCHARGE, DISPOSAL, OR PRESENCE IN CONNECTION WITH ITS PROPERTIES OF A
HAZARDOUS SUBSTANCE (INCLUDING (I) ALL DAMAGES OF ANY USE, GENERATION,
MANUFACTURE, PRODUCTION, STORAGE, RELEASE, THREATENED RELEASE, DISCHARGE,
DISPOSAL, OR PRESENCE, OR (II) THE COSTS OF ANY ENVIRONMENTAL INVESTIGATION,
MONITORING, REPAIR, CLEANUP, OR DETOXIFICATION AND THE PREPARATION AND
IMPLEMENTATION OF ANY CLOSURE, REMEDIAL, OR OTHER PLANS), OR (C) THE LOAN
DOCUMENTS OR ANY OF THE TRANSACTIONS CONTEMPLATED THEREIN. ALTHOUGH EACH
-------------
INDEMNIFIED PARTY HAS THE RIGHT TO BE INDEMNIFIED UNDER THE LOAN DOCUMENTS FOR
------------------------------------------------------------------------------
ITS OWN ORDINARY NEGLIGENCE, NO INDEMNIFIED PARTY HAS THE RIGHT TO BE
---------------------------
INDEMNIFIED UNDER THE LOAN DOCUMENTS FOR ITS OWN FRAUD, GROSS NEGLIGENCE, OR
WILLFUL MISCONDUCT. THE PROVISIONS OF AND UNDERTAKINGS AND INDEMNIFICATION SET
FORTH IN THIS SECTION 7.12 SHALL SURVIVE THE SATISFACTION AND PAYMENT OF THE
OBLIGATION AND TERMINATION OF THIS AGREEMENT.
7.13 REIT Status. At all times, Borrower (including its organization and
method of operations and those of its subsidiaries) shall qualify as a REIT.
7.14 Hedging Agreements. Borrower shall, promptly after the date hereof,
enter into such Hedging Agreements in respect of interest rate and currency
risks as are reasonably acceptable to Administrative Agent.
7.15 Property Pool.
(a) Borrower and its Pool Consolidated Affiliates shall, as of any date
during the term hereof, own, free and clear of any Liens (other than Permitted
Liens), (i) fee simple title to Domestic Properties, and (ii) the equivalent of
fee simple title to International Properties (the Properties and other assets
described in (i) and (ii) being the "Pool"), with an aggregate Historical Value
less the outstanding balance of any assessment bonds on such Properties of at
least one hundred seventy-five percent (175%) of the Companies' Unsecured Debt
(less any unrestricted cash and Cash Equivalents to the extent that such cash
and Cash Equivalents are used to pay such Unsecured Debt within seven (7) days
after the date of determination) outstanding on such date (including Unsecured
Debt of Unconsolidated Affiliates to the extent that the holder of such
Indebtedness has recourse against any Company for the payment of such
Indebtedness, except to the extent of any security therefor or pursuant to any
Customary Recourse Exceptions).
(b) The Pool must include income-producing operating industrial Domestic
Properties and International Properties owned by Borrower or a Pool Consolidated
Affiliate free and clear of any Liens (except Permitted Liens) (the "Operating
Sub-Pool"): (i) with an Implied Value of at least one hundred fifty percent
(150%) of the Companies' Unsecured Debt (less any unrestricted cash and Cash
Equivalents to the extent that such cash and Cash Equivalents are used to pay
such Unsecured Debt within seven (7) days after the date of determination)
outstanding from time to time (including Unsecured Debt of Unconsolidated
Affiliates to the extent that the holder of such Indebtedness has recourse
against any Company for the payment of such Indebtedness, except to the extent
of any security therefor or pursuant to any Customary Recourse Exceptions); (ii)
(A) in the case of Properties that are not Refrigerated Warehouse Properties,
which have an aggregate occupancy level based on bona fide tenant leases
requiring current rent payments
31
of at least eighty-five percent (85%), and (B) in the case of Properties that
are Refrigerated Warehouse Properties, which have an aggregate occupancy level
based on bona fide tenant leases, licenses, or other agreements requiring
current rent or other payments of at least eighty percent (80%), in each case
where the occupancy level is the average of the occupancy level for each of the
immediately preceding three (3) months; and (iii) for which Borrower and its
Pool Consolidated Affiliates must have received from third-party independent
environmental consultants, written assessments for each Property in, or to be
added to, the Operating Sub-Pool that do not disclose any material environmental
conditions or risks related to such Properties. Notwithstanding the foregoing,
the Operating Sub-Pool shall not, as of any date, include Refrigerated Warehouse
Properties and International Properties having an Implied Value exceeding in the
aggregate ten percent (10%) of the Implied Value of all Properties in the
Operating Sub-Pool as of such date.
(c) For purposes of calculating the Historical Value or the Implied
Value, (i) any amounts attributable to Properties owned by an International
Consolidated Affiliate whose Subsidiary Guaranty is, pursuant to the
requirements of any Laws, limited in amount shall not exceed the amount of the
Obligation guaranteed by such International Consolidated Affiliate pursuant to
its Subsidiary Guaranty, and (ii) any amounts attributable to Properties owned
by ProLogis Services shall not exceed the amount of any Indebtedness of ProLogis
Services to Borrower that is secured by first-priority Lien in such Properties,
which Indebtedness and Lien are pledged to Administrative Agent, for the benefit
of the Credit Parties, pursuant to the Pledge Agreements.
7.16 Subsidiary Guaranties. Borrower shall cause each of its
Consolidated Affiliates (other than International Consolidated Affiliates and
the Consolidated Affiliates listed on Schedule 7.16-1) to execute a Subsidiary
Guaranty. To the fullest extent permitted under applicable Laws, Borrower shall
cause each of its International Consolidated Affiliates to execute a Subsidiary
Guaranty, except to the extent that the execution of a Subsidiary Guaranty would
result in material adverse tax Liabilities to Borrower in the United States.
SECTION 8 NEGATIVE COVENANTS. So long as Lenders are committed to fund
--------- ------------------
Borrowings and until the Obligation is paid in full, Borrower covenants and
agrees that, unless Required Lenders otherwise consent in writing (except as
provided in Section 13.9 with respect to matters requiring consent or approval
of all Lenders):
8.1 Payment of Obligations. Borrower shall not, and shall not permit
any other Company to, voluntarily prepay principal of, or interest on, any
Liabilities other than the Obligation, if a Default or Potential Default exists.
8.2 Employee Plans. Except where a Material Adverse Event would not
result, Borrower shall not, and shall not permit any ERISA Affiliate to, permit
any of the events or circumstances described in Section 6.10 to exist or occur.
8.3 Secured Debt. Borrower shall not, and shall not permit any other
Company to, as of any date during the term hereof, create, incur, or suffer to
exist any Secured Debt, other than Secured Debt that is either:
(a) Non-Recourse Debt not to exceed in the aggregate at any time
outstanding thirty percent (30%) of Borrower's Total Assets;
32
(b) Recourse Debt secured by International Properties not to exceed
$200,000,000 in the aggregate at any time outstanding;
(c) Recourse Debt not to exceed in the aggregate at any time outstanding
$1,000,000; or
(d) the Indebtedness under the Revolving Credit Agreement.
8.4 Transactions with Affiliates. Except as disclosed on Schedule 6.14
(as supplemented from time to time to reflect changes as a result of
transactions permitted by this Agreement or approved by Required Lenders),
Borrower shall not, and shall not permit any other Company to, enter into any
material transaction with any of its Affiliates, other than (a) transactions
with existing shareholders of Consolidated Affiliates and Unconsolidated
Affiliates, (b) transactions in the ordinary course of business and upon fair
and reasonable terms not materially less favorable than it could obtain or could
become entitled to in an arm's-length transaction with a Person that was not its
Affiliate or that comply with the requirements of the North America Security
Administrators Association's Statement of Policy of Real Estate Investment
Trusts, (c) payments to or from such Affiliates under leases of office space on
market terms, (d) payment of fees under property management agreements under
terms and conditions available from qualified management companies, (e)
intercompany Liabilities and other Investments between any Company and its
Unconsolidated Affiliates otherwise permitted pursuant to this Agreement, (f)
transactions between Companies, and (g) transactions otherwise permitted
hereunder.
8.5 Compliance with Laws and Documents. Borrower shall not, and shall
not permit any other Company to, (a) violate the provisions of any Laws
applicable to it or of any material agreement to which it is a party if that
violation alone, or when aggregated with all other violations, could reasonably
be expected to result in Material Adverse Event, (b) violate the provisions of
its charter or bylaws, or (c) repeal, replace or amend any provision of its
charter or bylaws if that action could reasonably be expected to result in a
Material Adverse Event.
8.6 Loans, Advances, and Investments. Borrower shall not, and shall not
permit any other Company to, have or make any direct or indirect Investments in:
(a) Raw land (other than land under development or planned for
commencement of development within twelve (12) months following the date such
land was acquired) exceeding in the aggregate ten percent (10%) of Borrower's
Total Assets;
(b) Non-Industrial Properties and New Ventures exceeding in the
aggregate ten percent (10%) of Borrower's Total Assets;
(c) The Stock of Unconsolidated Affiliates accounted for on a cost or
equity basis (determined in accordance with GAAP) exceeding in the aggregate
twenty-five percent (25%) of Borrower's Total Assets; provided that Investments
in any such Unconsolidated Affiliates whose primary business is the ownership of
Non-Industrial Properties shall not exceed in the aggregate fifteen percent
(15%) of Borrower's Total Assets;
(d) ProLogis Services, unless (i) except as provided in (ii) below, all
loans, advances, or extensions of credit from Borrower to ProLogis Services are
secured by leasehold loans or first priority liens and security interests
(subject only to prior liens and security interests securing performance
guaranties granted in the ordinary course of ProLogis Services' business) in
real properties developed or acquired by
33
ProLogis Services, (ii) all loans, advances, or extensions of credit from
Borrower to ProLogis Services for international purposes (A) are either (x)
secured by first priority Liens (subject only to prior Liens securing
performance guaranties granted in the ordinary course of ProLogis Services'
business) in real properties held for development, under development, and/or
acquired by ProLogis Services, or (y) unsecured and payable on demand, and (B)
do not exceed $100,000,000 in the aggregate, (iii) ProLogis Services shall be
internally managed or managed by Borrower, (iv) Borrower shall, at all times,
beneficially own at least ninety percent (90%) of the aggregate economic
interest in ProLogis Services, (v) the financial condition and results of
operation of ProLogis Services shall be consolidated with those of Borrower for
purposes of the Financial Statements or as required by GAAP, (vi) ProLogis
Services shall engage primarily in the acquisition and construction of
industrial real estate properties, or land that will be used for the
construction of such properties, for sale or lease to third parties on an arms-
length basis and under market terms, (vii) all equity Investments of Borrower in
ProLogis Services do not exceed $40,000,000 in the aggregate, and (viii) all
Investments (equity or otherwise) of Borrower in ProLogis Services do not exceed
$350,000,000 in the aggregate;
(e) The Stock of (i) any Preferred Stock Subsidiary (other than ProLogis
Services, ProLogis Logistics Services, Inc., Frigoscandia SA, KingsPark Holding
S.A., and Garanor S.A.), unless (A) Borrower shall, at all times, beneficially
own at least ninety percent (90%) of the aggregate economic interest in such
Preferred Stock Subsidiary, (B) neither such Preferred Stock Subsidiary nor any
of its Consolidated Affiliates are prohibited or restricted from making any
payments, directly or indirectly, to Borrower by way of Dividends, advances,
repayments of loans, repayments of expenses, accruals, or otherwise, other than
customary third-party lender debt service covenants or as required by applicable
Laws, (C) such Preferred Stock Subsidiary is internally managed or managed by
Borrower, and (D) such Preferred Stock Subsidiary owns fifty-one percent (51%)
or more of its respective equity Investments, which assets must be otherwise
permitted Investments under this Section 8.6, and (ii) Preferred Stock
Subsidiaries (other than ProLogis Services, ProLogis Logistics Services, Inc.,
Frigoscandia SA, KingsPark Holding S.A., and Garanor S.A.) exceeding in the
aggregate fifteen percent (15%) of Borrower's Total Assets;
(f) The Stock of any Person (other than Consolidated Affiliates and
Unconsolidated Affiliates permitted by (a) through (e) above), other than Stock
received in settlement of Liabilities of such Person created in the ordinary
course of business or in other REITs acquired in exchange for Properties not to
exceed ten percent (10%) of Borrower's Total Assets;
(g) Loans, advances, and extensions of credit to Persons other than (i)
loans, advances, and extensions of credit to Consolidated Affiliates and
Unconsolidated Affiliates to the extent permitted hereunder, (ii) loans,
advances, and extensions of credit to Persons secured by valid and enforceable
first priority liens on real estate for the purpose of acquiring and developing
such property for eventual ownership by, or to be acquired by, Borrower prior
to, or within a reasonable period of time consistent with a business purpose
after, the completion of construction or development of such property, (iii)
loans and advances to directors, officers, and employees pursuant to Borrower's
existing long-term incentive plan or similar incentive compensation
arrangements, and (iv) travel and similar advances to officers and employees in
the ordinary course of business.
(h) International Properties, Consolidated Affiliates domiciled outside
of the United States, Unconsolidated Affiliates domiciled outside of the United
States, and loans or advances to Consolidated Affiliates and Unconsolidated
Affiliates for international purposes exceeding in the aggregate thirty-five
percent (35%) of Borrower's Total Assets; and
34
(i) Refrigerated Warehouse Properties (including Investments through
Unconsolidated Affiliates) exceeding in the aggregate fifteen percent (15%) of
Borrower's Total Assets.
Borrower shall not permit, as of any date, the Companies' aggregate direct and
indirect Investments of the types described in (a), (b), (h), and (i) above to
exceed in the aggregate fifty percent (50%) of Borrower's Total Assets as of
such date.
8.7 Dividends and Distributions. Borrower shall not, on a consolidated
basis, declare, make, or pay any Distributions, other than (a) Permitted
Distributions, and (b) Distributions declared, made, or paid by (i) Borrower
wholly in the form of its Stock, and (ii) to the extent it can do so, any
Consolidated Affiliate to Borrower or any other Company. Borrower shall not, and
shall not permit any other Company to, enter into or permit to exist any
arrangement or agreement (other than this Agreement) that prohibits it from
paying Distributions to the holders of its Stock.
8.8 Sale of Assets. Borrower shall not, and shall not permit any other
Company to, sell, assign, lease, transfer, or otherwise dispose of any of its
assets, other than to a Company, and except for (a) occasional sales, leases, or
other dispositions of immaterial assets for consideration not less than fair
market value, (b) sales, leases, or other dispositions of assets that are
obsolete or have negligible fair market value, (c) sales of equipment for a fair
and adequate consideration (but if replacement equipment is necessary for the
proper operation of the business of the seller, the seller must promptly replace
the sold equipment), and (d) sales or other transfers of Properties during any
twelve (12) month period having a fair market value of not more than twenty
percent (20%) of the fair market value of all Properties of the Companies prior
to such sale or transfer.
8.9 Mergers and Dissolutions. Borrower shall not, and shall not permit
any other Company to, merge or consolidate with any other Person or liquidate,
wind up or dissolve (or suffer any liquidation or dissolution); provided,
however, that the foregoing shall not operate to prevent (a) mergers or
consolidations of any Consolidated Affiliate of Borrower into Borrower or any
Consolidated Affiliate of Borrower (if such transaction does not reduce the net
worth of Borrower determined in accordance with GAAP, except for minor
transaction costs related to such merger or consolidation), or (b) a merger or
consolidation in which Borrower is the surviving entity and, immediately after
giving effect to such merger or consolidation, no Change in Control has
occurred.
8.10 Assignment. Borrower shall not, and shall not permit any other
Company to, assign or transfer any of its Rights, duties, or obligations under
any of the Loan Documents.
8.11 Fiscal Year and Accounting Methods. Borrower shall not change its
fiscal year or its method of accounting (other than immaterial changes in
methods or as required by GAAP).
8.12 New Businesses. Borrower shall not, and shall not permit any other
Company to, engage in any business except (a) the businesses in which they are
presently engaged and any other reasonably related business (including
distribution and logistics services), and (b) New Ventures (so long as the
Investment in such New Ventures is otherwise permitted by Section 8.6).
8.13 Government Regulations. Borrower shall not, and shall not permit
any other Company to, conduct its business in a way that it becomes regulated
under the Investment Company Act of 1940, as amended, or the Public Utility
Holding Company Act of 1935, as amended.
35
8.14 Negative Pledge Agreements. Borrower shall not, and shall not
permit any other Company to, enter into any negative pledge agreements with any
other Person (except pursuant to the Revolving Credit Agreement) such that
Borrower shall be prohibited from granting, or causing any other Company from
granting, to Administrative Agent, for the benefit of the Credit Parties, a
first priority lien and security interest in the Operating Sub-Pool as security
for the Obligation in an amount equal to one hundred fifty percent (150%) of the
Obligation. Nothing herein should be construed as creating a Lien.
SECTION 9 FINANCIAL COVENANTS. So long as Lenders are committed to fund
--------- -------------------
Borrowings under this Agreement and until the Obligation is paid and performed
in full, Borrower covenants and agrees with the Credit Parties that Borrower
will not directly or indirectly permit:
9.1 Leverage Ratios.
(a) The Leverage Ratio, as of any date, to exceed 1.0 to 1.0.
(b) The Adjusted Leverage Ratio, as of any date, to exceed 1.0 to 1.0.
9.2 Minimum Consolidated Net Worth. Consolidated Net Worth of the
Companies on a consolidated basis, as of any date, to be less than the sum of
(a) $2,500,000,000, plus (b) seventy percent (70%) of the amount of Net Proceeds
of any Equity Issuances by Borrower or any other Company (except for Equity
Issuance to any other Company) subsequent to the Closing Date.
9.3 Interest Expense Coverage Ratio. The Interest Expense Coverage
Ratio, as of the last day of each fiscal quarter during the term hereof, to be
less than 2.0 to 1.0.
9.4 Fixed Charge Coverage Ratio. The Fixed Charge Coverage Ratio, as of
the last day of each fiscal quarter during the term hereof, to be less than 1.75
to 1.0.
9.5 Preferred Dividend Coverage Ratio. The Preferred Dividend Coverage
Ratio, as of the last day of each fiscal quarter during the term hereof, to be
less than 1.5 to 1.0.
9.6 Unsecured Debt Service Coverage Ratio. The Unsecured Debt Service
Coverage Ratio, as of the last day of each fiscal quarter during the term
hereof, to be less than 1.75 to 1.0.
SECTION 10 DEFAULT. The term "Default" means the occurrence of any one or more
---------- -------
of the following events:
10.1 Payment of Obligation. The failure of Borrower (a) to pay any part
of the Obligation (other than the Principal Debt or any other principal of the
Obligation) within three (3) days after it becomes due and payable under the
Loan Documents, and (b) to pay any Principal Debt or any other principal of the
Obligation when it becomes due and payable under the Loan Documents.
10.2 Covenants. The failure of Borrower (and, if applicable, any other
Company) to punctually and properly perform, observe and comply with:
(a) Any covenant or agreement contained in Sections 7.15, 8.3, 8.7,
8.14, and 9; or
36
(b) Any other covenant or agreement contained in any Loan Document
(other than the covenants to pay the Obligation and the covenants in clause (a)
preceding), and such failure continues for thirty (30) days after the first to
occur of (i) a Responsible Officer of Borrower obtaining knowledge or (ii)
Borrower's receipt of notice from Administrative Agent, of such failure.
10.3 Debtor Relief. Any Company (a) is not Solvent, (b) fails to pay its
Liabilities generally as they become due, (c) voluntarily seeks, consents to, or
acquiesces in the benefit of any Debtor Relief Law, or (d) becomes a party to or
is made the subject of any proceeding provided for by any Debtor Relief Law,
other than as a creditor or claimant, that could suspend or otherwise adversely
affect the Rights of any Credit Party granted in the Loan Documents (unless, if
the proceeding is involuntary, the applicable petition is dismissed within
ninety (90) days after its filing).
10.4 Judgments and Attachments. Any Company fails, within sixty (60)
days after entry, to pay, bond or otherwise discharge any judgment or order for
the payment of money in excess of $5,000,000 (individually or collectively) or
any warrant of attachment, sequestration or similar proceeding against any
Company's assets having a value (individually or collectively) in excess of
$5,000,000 which is neither (a) stayed on appeal nor (b) diligently contested in
good faith by appropriate proceedings and for which adequate reserves have been
set aside on its books in accordance with GAAP.
10.5 Government Action. (a) A final non-appealable order is issued by
any Tribunal (including the United States Justice Department) requiring any
Company to divest all or a substantial portion of its assets under any
antitrust, restraint of trade, unfair competition, industry regulation or
similar Laws, or (b) any Tribunal condemns, seizes, or otherwise appropriates,
or takes custody or control of all or any substantial portion of the assets of
the Companies, taken as a whole.
10.6 Misrepresentation. Any material representation or warranty made by
Borrower contained in any Loan Document or in any certificate or report
delivered under this Agreement at any time proves to have been incorrect in any
material respect when made.
10.7 Default Under Other Agreements.
(a) Any Company shall fail to make any payment in respect of any
Liability when due or within any applicable grace period; provided that the
failure of any Company to make any payment when due or within any applicable
grace period in respect of (i) any Recourse Debt arising in one or more related
or unrelated transactions in an aggregate principal amount not exceeding
$10,000,000, and (ii) any non-recourse Liabilities arising in one or more
related or unrelated transactions in an aggregate principal amount not exceeding
$50,000,000, shall not constitute a Default hereunder; or
(b) the acceleration of the maturity of any Liabilities of any Company
or default shall occur in the payment of any Liabilities of any Company or in
respect of any note or credit agreement relating to any such Liabilities and
such default shall continue for more than the period of grace, if any, specified
therein or otherwise granted by the lender thereof; provided that the
acceleration of the maturity of (i) any Recourse Debt arising in one or more
related or unrelated transactions in an aggregate principal amount not exceeding
$10,000,000, and (ii) any non-recourse Liabilities arising in one or more
related or unrelated transactions in an aggregate principal amount not exceeding
$50,000,000 shall not constitute a Default hereunder;
10.8 Validity and Enforceability of Loan Documents. Except in accordance
with its terms or as otherwise expressly permitted by this Agreement, any Loan
Document at any time after its execution and
37
delivery ceases to be in full force and effect in any material respect or is
declared by a Tribunal to be null and void or its validity or enforceability is
contested by any Company or any Company denies that it has any further liability
or obligations under any Loan Document to which it is a party.
10.9 Management Changes.
(a) During any period of twelve (12) consecutive calendar months,
individuals who were directors or trustees of Borrower on the first day of such
period shall cease to constitute a majority of the board of directors or
trustees of Borrower; provided, however, that the directors or trustees of
Borrower may include new directors or trustees that (i) are an officer or
employee of an Affiliate, or (ii) that are required in order (as a practical
matter) for the majority of the board of directors or trustees of Borrower to be
independent directors or trustees.
(b) Borrower shall change its present executive management, which change
could result in a Material Adverse Event.
10.10 Plan Assets. The assets of Borrower at any time constitute "plan
assets" as defined in 29 C.F.R. (S) 2510.3-101(a)(1) (or any successor
regulation).
10.11 Default under Revolving Credit Agreement. A Default shall occur
under the Revolving Credit Agreement, which Default shall remain unremedied
within any applicable period of grace or notice, if any.
SECTION 11 RIGHTS AND REMEDIES.
---------- -------------------
11.1 Remedies Upon Default.
(a) If a Default (i) occurs under Section 10.3(c) or (ii) occurs and is
continuing under Section 10.3(a), (b) or (d), the entire unpaid balance of the
Obligation automatically becomes due and payable without any action of any kind
whatsoever.
(b) If a Default occurs and is continuing, subject to the terms of
Section 12.3(b) and Section 12.10, Administrative Agent may, and upon the
request of Required Lenders shall, do any one or more of the following: (i) if
the maturity of the Obligation has not already been accelerated under Section
11.1(a), declare the entire unpaid balance of all or any part of the Obligation
immediately due and payable, whereupon it is due and payable; (ii) reduce any
claim to judgment; (iii) to the extent permitted by Law, exercise (or request
each Lender to, and each Lender is entitled to, exercise) the Rights of offset
or banker's Lien against the interest of each Company in and to every account
and other property of such Company that are in the possession of any Credit
Party to the extent of the full amount of the Obligation (and to the extent
permitted by Law, each Company is deemed directly obligated to each Credit Party
in the full amount of the Obligation for this purpose); and (iv) exercise any
and all other legal or equitable Rights afforded by the Loan Documents, the Laws
of the State of Texas, or any other applicable jurisdiction.
11.2 Waivers. To the extent permitted by Law, Borrower waives
presentment and demand for payment, protest, notice of intention to accelerate,
notice of acceleration, and notice of protest and nonpayment, and agrees that
its liability with respect to all or any part of the Obligation is not affected
by any renewal or extension in the time of payment of all or any part of the
Obligation, by any indulgence, or by any release or change in any security for
the payment of all or any part of the Obligation.
38
11.3 Performance by Administrative Agent. If any covenant, duty, or
agreement of any Company is not performed in accordance with the terms of the
Loan Documents, then Administrative Agent may, while a Default exists, at its
option, perform or attempt to perform that covenant, duty or agreement on behalf
of such Company (and any amount expended by Administrative Agent in its
performance or attempted performance is payable by Borrower to Administrative
Agent on demand, becomes part of the Obligation, and bears interest at the
Default Rate from the date of Administrative Agent's expenditure until paid).
However, no Credit Party assumes or shall have, except by its express written
consent, any liability or responsibility for the performance of any covenant,
duty, or agreement of any Company.
11.4 Not in Control. None of the covenants or other provisions contained
in any Loan Document shall, or shall be deemed to, give any Credit Party the
Right to exercise control over the assets (including real property), affairs, or
management of any Company; the power of each Credit Party is limited to the
Right to exercise the remedies provided in this Section 11.
11.5 Course of Dealing. The acceptance by any Credit Party of any
partial payment on the Obligation shall not be deemed to be a waiver of any
Default then existing. No waiver by any Credit Party of any Default shall be
deemed to be a waiver of any other then-existing or subsequent Default. No delay
or omission by any Credit Party in exercising any Right under the Loan Documents
will impair that Right or be construed as a waiver thereof or any acquiescence
therein, nor will any single or partial exercise of any Right preclude other or
further exercise thereof or the exercise of any other Right under the Loan
Documents or otherwise.
11.6 Cumulative Rights. All Rights available to the Credit Parties under
the Loan Documents are cumulative of and in addition to all other Rights granted
to the Credit Parties at law or in equity, whether or not the Obligation is due
and payable and whether or not any Credit Party has instituted any suit for
collection, foreclosure, or other action in connection with the Loan Documents.
11.7 Application of Proceeds. Any and all proceeds ever received by any
Credit Party from the exercise of any Rights pertaining to the Obligation shall
be applied to the Obligation according to Section 3.11.
11.8 Diminution in Value of Collateral. No Credit Party has any
liability or responsibility whatsoever for any diminution in or loss of value of
any collateral now or hereafter securing payment or performance of all or any
part of the Obligation (other than diminution in or loss of value caused by its
gross negligence or willful misconduct).
11.9 Certain Proceedings. Borrower will promptly execute and deliver, or
cause the execution and delivery of, all applications, certificates,
instruments, registration statements, and all other documents and papers any
Credit Party reasonably requests in connection with the obtaining of any
consent, approval, registration, qualification, permit, license, or
authorization of any Tribunal or other Person necessary or appropriate for the
effective exercise of any Rights under the Loan Documents. Because Borrower
agrees that the Credit Parties' remedies at Law for failure of Borrower to
comply with the provisions of this paragraph would be inadequate and that
failure would not be adequately compensable in damages, Borrower agrees that the
covenants of this Section 11.9 may be specifically enforced.
39
SECTION 12 AGENTS AND LENDERS.
---------- ------------------
12.1 Agents.
(a) Appointment. Each Lender appoints Administrative Agent (and
Administrative Agent accepts appointment) as its nominee and agent, in its name
and on its behalf: (i) to act as its nominee and on its behalf in and under all
Loan Documents; (ii) to arrange the means whereby its funds are to be made
available to Borrower under the Loan Documents; (iii) to take any action that it
properly requests under the Loan Documents (subject to the concurrence of other
Lenders as may be required under the Loan Documents); (iv) to receive all
documents and items to be furnished to it under the Loan Documents; (v) to be
the secured party, mortgagee, beneficiary, recipient, and similar party in
respect of any collateral, if any, for the benefit of Lenders; (vi) to promptly
distribute to it all Financial Statements, notices received hereunder, and other
items specifically required to be delivered to it hereunder and, upon request,
such other material information, requests, documents, and items received from
Borrower under the Loan Documents; (vii) to promptly distribute to it its
ratable part of each payment or prepayment (whether voluntary, as proceeds of
collateral upon or after foreclosure, as proceeds of insurance thereon, or
otherwise) in accor dance with the terms of the Loan Documents; (viii) to
deliver to the appropriate Persons requests, demands, approvals, and consents
received from it; and (ix) to arrange for inspections pursuant to Section 7.4.
However, Administrative Agent may not be required to take any action that
exposes it to personal liability or that is contrary to any Loan Document or
applicable Law.
(b) Successor. Administrative Agent may assign all of its Rights and
obligations as Administrative Agent under the Loan Documents to any of its
Affiliates, which Affiliate shall then be the successor Administrative Agent
under the Loan Documents. Administrative Agent may also voluntarily resign by
giving thirty (30) days' prior written notice to Borrower and Lenders, and shall
resign upon the request of the Required Lenders for cause (i.e., Administrative
Agent is continuing to fail to perform its responsibilities as Administrative
Agent under the Loan Documents). If the initial or any successor Administrative
Agent ever ceases to be a party to this Agreement or if the initial or any
successor Administrative Agent ever resigns (whether voluntarily or at the
request of the Required Lenders), then the Required Lenders shall (which, if no
Default or Potential Default exists, is subject to Borrower's approval that may
not be unreasonably withheld) appoint the successor Administrative Agent from
among Lenders (other than the resigning Administrative Agent). If the Required
Lenders fail to appoint a successor Administrative Agent within thirty (30) days
after the resigning Administrative Agent has given notice of resignation or the
Required Lenders have removed the resigning Administrative Agent, then the
resigning Administrative Agent may, on behalf of Lenders, appoint a successor
Administrative Agent (which, if no Default or Potential Default exists, is
subject to Borrower's approval that may not be unreasonably withheld), which
must be a commercial bank having a combined capital and surplus of at least
$10,000,000,000 (as shown on its most recently published statement of condition)
and whose debt obligations (or whose parent's debt obligations) are rated not
less than Baa1 by Xxxxx'x or BBB+ by S & P. Upon its acceptance of appointment
as successor Administrative Agent, the successor Administrative Agent succeeds
to and becomes vested with all of the Rights of the prior Administrative Agent,
and the prior Administrative Agent is discharged from its duties and obligations
as Administrative Agent under the Loan Documents, and each Lender shall execute
the documents that any Lender, the resigning or removed Administrative Agent, or
the successor Administrative Agent reasonably requests to reflect the change.
After any Administrative Agent's resignation or removal as Administrative Agent
under the Loan Documents, the provisions of this Section inure to its benefit as
to any actions taken or not taken by it while it was Administrative Agent under
the Loan Documents. If Borrower fails to respond to any written request for any
consent required in this
40
Section 12.1(b) within ten (10) days after the date that Borrower receives such
request, then Borrower shall be deemed to have given its consent to such
request.
(c) Syndication Agent. Syndication Agent, in such capacity, shall have
no rights, duties, or obligations hereunder, except as specifically provided in
this Agreement. Syndication Agent (i) may voluntarily resign by notice to
Administrative Agent, Lenders, and Borrower, and (ii) shall resign upon the
request of the Required Lenders for cause. Upon the resignation of Syndication
Agent, Administrative Agent may elect to designate a successor Syndication Agent
(which, if no Default or Potential Default exists, is subject to Borrower's
approval that may not be unreasonably withheld), which must be a Lender who is a
commercial bank having a combined capital and surplus of at least
$10,000,000,000 (as shown on its most recently published statement of condition)
and whose debt obligations (or whose parent's debt obligations) are rated not
less than Baa1 by Xxxxx'x or BBB+ by S & P.
(d) Documentation Agent. Documentation Agent, in such capacity, shall
have no rights, duties, or obligations hereunder, except as specifically
provided in this Agreement. Documentation Agent (i) may voluntarily resign by
notice to Administrative Agent, Lenders, and Borrower, and (ii) shall resign
upon the request of the Required Lenders for cause. Upon the resignation of
Documentation Agent, Administrative Agent may elect to designate a successor
Documentation Agent (which, if no Default or Potential Default exists, is
subject to Borrower's approval that may not be unreasonably withheld), which
must be a Lender who is a commercial bank having a combined capital and surplus
of at least $10,000,000,000 (as shown on its most recently published statement
of condition) and whose debt obligations (or whose parent's debt obligations)
are rated not less than Baa1 by Xxxxx'x or BBB+ by S & P.
12.2 Delegation of Duties; Reliance. Lenders may perform any of their
duties or exercise any of their Rights under the Loan Documents by or through
Administrative Agent, and Lenders and Administrative Agent may perform any of
their duties or exercise any of their Rights under the Loan Documents by or
through their respective Representatives. The Credit Parties and their
respective Representatives (a) are entitled to rely upon (and shall be protected
in relying upon) any written or oral statement believed by it or them to be
genuine and correct and to have been signed or made by the proper Person and,
with respect to legal matters, upon opinion of counsel selected by
Administrative Agent or any Lender (but nothing in this clause (a) permits
Administrative Agent to rely on (i) oral statements if a writing is required by
this Agreement or any other Loan Document or (ii) any other writing if a
specific writing is required by this Agreement or any other Loan Document), (b)
are entitled to deem and treat each Lender as the owner and holder of its
portion of the Obligation for all purposes until written notice of the
assignment or transfer is given to and received by Administrative Agent (and any
request, authorization, consent, or approval of any Lender is conclusive and
binding on each subsequent holder, assignee, or transferee of such Lender's
portion of the Obligation until that notice is given and received), (c) are not
deemed to have notice of the occurrence of a Default unless a responsible
officer of Administrative Agent, who handles matters associated with the Loan
Documents and transactions thereunder, has actual knowledge or Administrative
Agent has been notified by a Lender or Borrower, and (d) are entitled to consult
with legal counsel (including counsel for Borrower), independent accountants,
and other experts selected by Administrative Agent and are not liable for any
action taken or not taken in good faith by it in accordance with the advice of
counsel, accountants, or experts.
12.3 Limitation of Administrative Agent's Liability.
(a) Exculpation. Neither Administrative Agent nor any of its
representatives will be liable for any action taken or omitted to be taken by it
or them under the Loan Documents in good faith and believed
41
by it or them to be within the discretion or power conferred upon it or them by
the Loan Documents or be responsible for the consequences of any error of
judgment (except for fraud, gross negligence, or willful misconduct), and
neither Administrative Agent nor any of its Representatives has a fiduciary
relationship with any Lender by virtue of the Loan Documents (but nothing in
this Agreement negates the obligation of Administrative Agent to account for
funds received by it for the account of any Lender).
(b) Indemnity. Unless indemnified to its satisfaction against loss,
cost, liability, and expense, Administrative Agent may not be compelled to do
any act under the Loan Documents or to take any action toward the execution or
enforcement of the powers thereby created or to prosecute or defend any suit in
respect of the Loan Documents. If Administrative Agent requests instructions
from Lenders, with respect to any act or action in connection with any Loan
Document, then Administrative Agent is entitled to refrain (without incurring
any liability to any Person by so refraining) from that act or action unless and
until it has received instructions. In no event, however, may Administrative
Agent or any of its Representatives be required to take any action that it or
they determine could incur for it or them criminal or onerous civil liability.
Without limiting the generality of the foregoing, no Lender has any right of
action against Administrative Agent as a result of Administrative Agent's acting
or refraining from acting under this Agreement in accordance with instructions
of Required Lenders.
(c) Reliance. Administrative Agent is not responsible to any Lender or
any Participant for, and each Lender represents and warrants that it has not
relied upon Administrative Agent in respect of, (i) the creditworthiness of any
Company and the risks involved to such Lender, (ii) the effectiveness,
enforceability, genuineness, validity, or due execution of any Loan Document
(except by Administrative Agent), (iii) any representation, warranty, document,
certificate, report, or statement made therein (except by Administrative Agent)
or furnished thereunder or in connection therewith, (iv) the adequacy of any
collateral now or hereafter securing the Obligation or the existence, priority,
or perfection of any Lien now or hereafter granted or purported to be granted on
the collateral under any Loan Document, or (v) observation of or compliance with
any of the terms, covenants, or conditions of any Loan Document on the part of
any Company. EACH LENDER AGREES TO INDEMNIFY ADMINISTRATIVE AGENT AND ITS
REPRESENTATIVES AND HOLD THEM HARMLESS FROM AND AGAINST (BUT LIMITED TO SUCH
lENDER'S PRO RATA PART OF) ANY AND ALL LIABILITIES, OBLIGATIONS, LOSSES,
DAMAGES, PENALTIES, ACTIONS, JUDGMENTS, SUITS, COSTS, REASONABLE EXPENSES, AND
REASONABLE DISBURSEMENTS OF ANY KIND OR NATURE WHATSOEVER THAT MAY BE IMPOSED
ON, ASSERTED AGAINST, OR INCURRED BY THEM IN ANY WAY RELATING TO OR ARISING OUT
OF THE LOAN DOCUMENTS OR ANY ACTION TAKEN OR OMITTED BY THEM UNDER THE LOAN
DOCUMENTS IF ADMINISTRATIVE AGENT AND ITS REPRESENTATIVES ARE NOT REIMBURSED FOR
SUCH AMOUNTS BY BORROWER. ALTHOUGH ADMINISTRATIVE AGENT AND ITS REPRESENTATIVES
-----------------------------------------------------
HAVE THE RIGHT TO BE INDEMNIFIED UNDER THIS AGREEMENT FOR ITS OR THEIR OWN
--------------------------------------------------------------------------
ORDINARY NEGLIGENCE, ADMINISTRATIVE AGENT AND ITS REPRESENTATIVES DO NOT HAVE
-------------------
THE RIGHT TO BE INDEMNIFIED UNDER THIS AGREEMENT FOR ITS OR THEIR OWN FRAUD,
GROSS NEGLIGENCE, OR WILLFUL MISCONDUCT.
12.4 Limitation of Liability. No Lender or any Participant will incur
any liability to any other Lender or Participant except for acts or omissions in
bad faith, and neither Administrative Agent nor any Lender or Participant will
incur any liability to any other Person for any act or omission of any other
Lender or any Participant.
12.5 Expenses. Should Administrative Agent commence any proceeding or in
any way seek to enforce its Rights under the Loan Documents, each Lender, upon
demand therefor from time to time, shall contribute its share (based on its Pro
Rata Part) of the reasonable costs and/or expenses of any such
42
enforcement, including, but not limited to, fees of receivers or trustees, court
costs, title company charges, filing and recording fees, appraisers' fees and
fees and expenses of attorneys to the extent not otherwise reimbursed by
Borrower. Without limiting the generality of the foregoing, each Lender shall
contribute its share (based on its Pro Rata Part) of all reasonable costs and
expenses incurred by Administrative Agent (including reasonable attorneys' fees
and expenses) if Administrative Agent employs counsel for advice or other
representation (whether or not any suit has been or shall be filed) with respect
to any of the Loan Documents, or to enforce any rights of Administrative Agent
or any of Borrower's or any other Company's obligations under any of the Loan
Documents, but not with respect to any dispute between Administrative Agent and
any other Lender(s). Any loss of principal and interest resulting from any
Default shall be shared by Lenders in accordance with their respective Pro Rata
Parts. It is understood and agreed that if Administrative Agent determines that
it is necessary to engage counsel for Lenders from and after the occurrence of a
Potential Default or Default, then said counsel shall be selected by
Administrative Agent and written notice of the same shall be delivered to
Lenders.
12.6 Proportionate Absorption of Losses. Except as otherwise provided in
the Loan Documents, nothing in the Loan Documents gives any Lender any advantage
over any other Lender insofar as the Obligation is concerned or relieves any
Lender from ratably absorbing any losses sustained with respect to the
Obligation (except to the extent unilateral actions or inactions by any Lender
result in Borrower or any other obligor on the Obligation having any credit,
allowance, setoff, defense, or counterclaim solely with respect to all or any
part of such Lender's Pro Rata Part of the Obligation).
12.7 Relationship of Lenders. The Loan Documents do not create a
partnership or joint venture among Administrative Agent and Lenders or among
Lenders.
12.8 Benefits of Agreement. None of the provisions of this Section inure
to the benefit of any Company or any other Person except Administrative Agent
and Lenders. Therefore, no Company nor any other Person is responsible or liable
for, entitled to rely upon, or entitled to raise as a defense -- in any manner
whatsoever -- the failure of any Credit Party to comply with these provisions.
12.9 Approval of Lenders.
(a) All communications from Administrative Agent to any Lender
requesting such Lender's determination, consent, approval, or disapproval (i)
shall be given in the form of a written notice to each Lender, (ii) shall be
accompanied by a description of the matter or thing as to which such
determination, approval, consent, or disapproval is requested, or shall advise
each Lender where such matter or thing may be inspected, or shall otherwise
describe the matter or issue to be resolved, (iii) shall include, if reasonably
requested by a Lender and to the extent not previously provided to such Lender,
written materials and a summary of all oral information provided to
Administrative Agent by Borrower in respect of the matter or issue to be
resolved, and (iv) shall include Administrative Agent's recommended course of
action or determination in respect thereof. Each Lender shall reply promptly,
but in any event (x) within thirty (30) days (or such lesser period as may be
required under the Loan Documents for Administrative Agent to respond) for those
matters requiring the consent by all Lenders, and (y) within fifteen (15)
Business Days (or such lesser period as may be required under the Loan Documents
for Administrative Agent to respond) for those matters requiring the consent by
the Required Lenders, in each instance, after receipt of the request therefor by
Administrative Agent (in either event, the "Lender Reply Period").
(b) Unless a Lender shall give written notice to Administrative Agent
that it objects to the recommendation or determination of Administrative Agent
(together with a written explanation of the
43
reasons behind such objection) within the Lender Reply Period, such Lender shall
be deemed to have approved of or consented to such recommendation or
determination.
12.10 Default; Collateral. Upon the occurrence and during the continuance
of a Default, the Credit Parties agree to promptly confer in order that Required
Lenders or Lenders, as the case may be, may agree upon a course of action for
the enforcement of the Rights of the Credit Parties; and Administrative Agent
shall be entitled to refrain from taking any action (without incurring any
liability to any Person for so refraining) unless and until Administrative Agent
shall have received instructions from Required Lenders or Lenders, as the case
may be. All rights of action under this Agreement and under the Notes and all
rights to any collateral, if any, hereunder may be enforced by Administrative
Agent and any suit or proceeding instituted by Administrative Agent in
furtherance of such enforcement shall be brought in its respective name as
Administrative Agent without the necessity of joining as plaintiffs or
defendants any other Credit Party, and the recovery of any judgment shall be for
the benefit of the Credit Parties subject to the expenses of Administrative
Agent. In actions with respect to any property of any Company, Administrative
Agent is acting for the ratable benefit of each Credit Party.
SECTION 13 MISCELLANEOUS.
---------- -------------
13.1 Headings. The headings, captions, and arrangements used in any of
the Loan Documents are, unless specified otherwise, for convenience only and
shall not be deemed to limit, amplify, or modify the terms of the Loan
Documents, nor affect the meaning thereof.
13.2 Nonbusiness Days; Time. Any payment or action that is due under any
Loan Document on a non-Business Day may be delayed until the next-succeeding
Business Day (but interest shall continue to accrue on any applicable payment
until payment is in fact made) unless the payment concerns a Eurodollar
Borrowing, in which case if the next-succeeding Business Day is in the next
calendar month, then such payment shall be made on the next-preceding Business
Day.
13.3 Communications. Unless otherwise specifically provided, whenever
any Loan Document requires or permits any consent, approval, notice, request,
demand, or other communication from one party to another, communication must be
in writing (which may be by telex or telecopy) to be effective and shall be
deemed to have been given (a) if by telex, when transmitted to the appropriate
telex number and the appropriate answerback is received, (b) if by telecopy,
when transmitted to the appropriate telecopy number (and all communications sent
by telecopy must be confirmed promptly thereafter by telephone; but any
requirement in this parenthetical shall not affect the date when the telecopy
shall be deemed to have been delivered), (c) if by mail, on the fifth (5th)
Business Day after it is enclosed in an envelope and properly addressed,
stamped, sealed, certified mail, return receipt requested, and deposited in the
appropriate official postal service, or (d) if by any other means, when actually
delivered. Until changed by notice pursuant to this Agreement, the address (and
telecopy number) for each party to this Agreement is set forth on Schedule 1.
13.4 Form and Number of Documents. The form, substance, and number of
counterparts of each writing to be furnished under this Agreement must be
satisfactory to Administrative Agent and its counsel.
13.5 Survival. All covenants, agreements, undertakings, representations,
and warranties made in any of the Loan Documents survive all closings under the
Loan Documents and, except as otherwise indicated, are not affected by any
investigation made by any party.
44
13.6 Governing Law. EXCEPT AS EXPRESSLY PROVIDED IN A LOAN DOCUMENT, THE
LAWS (OTHER THAN CONFLICT-OF-LAWS PROVISIONS) OF THE XXXXX XX XXXXX XXX XX XXX
XXXXXX XXXXXX OF AMERICA GOVERN THE RIGHTS AND DUTIES OF THE PARTIES TO THE LOAN
DOCUMENTS AND THE VALIDITY, CONSTRUCTION, ENFORCEMENT, AND INTERPRETATION OF THE
LOAN DOCUMENTS.
13.7 Invalid Provisions. Any provision in any Loan Document held to be
illegal, invalid or unenforceable is fully severable; the appropriate Loan
Document shall be construed and enforced as if that provision had never been
included; and the remaining provisions shall remain in full force and effect and
shall not be affected by the severed provision. The Credit Parties and Borrower
agree to negotiate, in good faith, the terms of a replacement provision as
similar to the severed provision as may be possible and be legal, valid and
enforceable. However, if the provision held to be illegal, invalid or
unenforceable is a material part of this Agreement, such invalid, illegal or
unenforceable provision shall be, to the extent permitted by Law, replaced by a
clause or provision judicially construed and interpreted to be as similar in
substance and content to the original terms of such illegal, invalid or
unenforceable clause or provision as the context thereof would reasonably allow,
so that such clause or provision would thereafter be legal, valid and
enforceable.
13.8 Venue; Service of Process; Jury Trial. EACH PARTY TO ANY LOAN
DOCUMENT, IN EACH CASE FOR ITSELF, ITS SUCCESSORS AND ASSIGNS (AND IN THE CASE
OF BORROWER, FOR EACH OF THE OTHER COMPANIES), (a) IRREVOCABLY SUBMITS TO THE
NONEXCLUSIVE JURISDICTION OF THE STATE AND FEDERAL COURTS OF THE STATE OF TEXAS,
(b) IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION
THAT IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY LITIGATION
ARISING OUT OF OR IN CONNECTION WITH THE LOAN DOCUMENTS AND THE OBLIGATION
BROUGHT IN DISTRICT COURTS OF DALLAS OR XXXXXX COUNTY, TEXAS, OR IN THE UNITED
STATES DISTRICT COURT FOR THE NORTHERN OR SOUTHERN DISTRICT OF TEXAS, DALLAS OR
HOUSTON DIVISION, (c) IRREVOCABLY WAIVES ANY CLAIMS THAT ANY LITIGATION BROUGHT
IN ANY OF THE AFOREMENTIONED COURTS HAS BEEN BROUGHT IN AN INCONVENIENT FORUM,
(d) IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS OUT OF ANY OF THOSE COURTS IN
ANY LITIGATION BY THE MAILING OF COPIES THEREOF BY CERTIFIED MAIL, RETURN
RECEIPT REQUESTED, POSTAGE PREPAID, BY HAND-DELIVERY, OR BY DELIVERY BY A
NATIONALLY RECOGNIZED COURIER SERVICE, AND SERVICE SHALL BE DEEMED COMPLETE UPON
DELIVERY OF THE LEGAL PROCESS AT ITS ADDRESS SET FORTH IN THIS AGREEMENT, (e)
IRREVOCABLY AGREES THAT ANY LEGAL PROCEEDING AGAINST ANY PARTY TO ANY LOAN
DOCUMENT ARISING OUT OF OR IN CONNECTION WITH THE LOAN DOCUMENTS OR THE
OBLIGATION MAY BE BROUGHT IN ONE OF THE AFOREMENTIONED COURTS, AND (f)
IRREVOCABLY WAIVES TO THE FULLEST EXTENT PERMITTED BY LAW, ITS RESPECTIVE RIGHTS
TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF ANY
LOAN DOCUMENT. The scope of each of the foregoing waivers is intended to be all-
encompassing of any and all disputes that may be filed in any court and that
relate to the subject matter of this transaction, including contract claims,
tort claims, breach of duty claims, and all other common law and statutory
claims. Borrower (for itself and on behalf of each of the other Companies)
acknowledges that these waivers are a material inducement to each Credit Party's
agreement to enter into a business relationship, that each Credit Party has
already relied on these waivers in entering into this Agreement, and that each
Agent and each Lender will continue to rely on each of these waivers in related
future dealings. Borrower (for itself and on behalf of each other Company)
further warrants and represents that it has reviewed these waivers with its
legal counsel, and that it knowingly and voluntarily agrees to each waiver
following consultation with legal counsel. THE WAIVERS IN THIS
45
SECTION 13.8 ARE IRREVOCABLE, MEANING THAT THEY MAY NOT BE MODIFIED EITHER
ORALLY OR IN WRITING, AND THESE WAIVERS SHALL APPLY TO ANY SUBSEQUENT
AMENDMENTS, SUPPLEMENTS, OR REPLACEMENTS TO OR OF THIS OR ANY OTHER LOAN
DOCUMENT. In the event of Litigation, this Agreement may be filed as a written
consent to a trial by the court.
13.9 Amendments, Consents, Conflicts, and Waivers.
(a) Required Lenders. Unless otherwise specifically provided the
provisions of this Agreement may be amended, modified, or waived only by an
instrument in writing executed by Borrower and the Required Lenders and
supplemented only by documents delivered or to be delivered in accordance with
the express terms of this Agreement.
(b) All Lenders. Except as specifically otherwise provided in this
Section 13.9, any amendment to or consent or waiver under this Agreement or any
Loan Document that purports to accomplish any of the following must be by an
instrument in writing executed by Borrower and executed (or approved, as the
case may be) by Administrative Agent and each Lender (other than any Defaulting
Lender): (i) extends the Maturity Date (except as set forth in Section 3.18);
(ii) extends the due date or decreases the amount of any scheduled payment or
amortization of the Obligation beyond the date specified in the Loan Documents;
(iii) decreases any rate or amount of interest, fees, principal, or other sums
payable to any Credit Party under this Agreement (except such reductions as are
contemplated by this Agreement); (iv) changes the definition of "Historical
Value," "Implied Value," "Pool Consolidated Affiliates," "Pro Rata," "Pro Rata
Part," "Required Lenders," "Term Loan," or "Term Loans;" (v) amends or waives
the requirements of Section 7.15; (vi) increases any one or more Lender's Term
Loan; (vii) waives the requirement of, compliance with, amends, or fully or
partially releases any guaranty or any substantial part of any collateral, if
any (except as expressly permitted by the terms of the Loan Documents); (viii)
permits Borrower to assign any of its rights hereunder; or (ix) changes this
clause (b) or any other matter specifically requiring the consent of all Lenders
under this Agreement.
(c) Administrative Agent. No amendment, modification, consent or waiver
which modifies the rights, duties, or obligations of any Agent shall be
effective without the consent of such Agent.
(d) Conflicts. Any conflict or ambiguity between the terms and
provisions of this Agreement and terms and provisions in any other Loan Document
is controlled by the terms and provisions of this Agreement.
(e) Course of Dealing. No course of dealing or any failure or delay by
any Credit Party or any of its respective Representatives with respect to
exercising any Right of such Credit Party under this Agreement operates as a
waiver thereof. Any waiver will be effective only in the specific instance and
for the specific purpose for which it is given.
13.10 Multiple Counterparts. Any Loan Document may be executed in a
number of identical counterparts, each of which shall be deemed an original for
all purposes and all of which constitute, collectively, one agreement; but, in
making proof thereof, it shall not be necessary to produce or account for more
than one counterpart. Each Lender need not execute the same counterpart of this
Agreement so long as identical counterparts are executed by Borrower, each
Lender, and each Agent. This Agreement shall become effective when counterparts
of this Agreement have been executed and delivered to Administrative Agent by
each Lender, each Agent, and Borrower, or, in the case only of the Credit
Parties, when
46
Administrative Agent has received telecopied, telexed, or other evidence
satisfactory to it that each Credit Party has executed and is delivering to
Administrative Agent a counterpart of this Agreement.
13.11 Successors and Assigns; Participations.
(a) Each Loan Document binds and inures to the benefit of the parties
thereto, any intended beneficiary thereof, and each of their respective
successors and permitted assigns. No Lender may, without the prior written
consent of Administrative Agent and, so long as no Default has occurred and is
continuing, Borrower, transfer, pledge, assign, sell any participation in, or
otherwise encumber its portion of the Obligation, except as specifically
permitted by this Section 13.11.
(b) Subject to the provisions of this Section 13.11 and in accordance
with applicable Law, any Lender may, in the ordinary course of its commercial
banking business, at any time sell to one or more Persons (each a "Participant")
participating interests in its portion of the Obligation; provided that each
such participation is not less than $10,000,000. The selling Lender shall remain
a "Lender" under this Agreement (and the Participant shall not constitute a
"Lender" under this Agreement) and its obligations under this Agreement shall
remain unchanged. The selling Lender shall remain solely responsible for the
performance of its obligations under the Loan Documents and shall remain the
holder of its share of the Principal Debt for all purposes under this Agreement.
Borrower and Administrative Agent shall continue to deal solely and directly
with the selling Lender in connection with such Lender's Rights and obligations
under the Loan Documents. Participants have no Rights under the Loan Documents,
other than certain voting Rights as provided below. Subject to the following,
each Lender may obtain (on behalf of its Participants) the benefits of Section 3
with respect to all participations in its part of the Obligation outstanding
from time to time so long as Borrower is not obligated to pay any amount in
excess of the amount that would be due to such Lender under Section 3 calculated
as though no participations have been made. No Lender may sell any participating
interest under which the Participant has any Rights to approve any amendment,
modification or waiver of any Loan Document, except to the extent the amendment,
modification or waiver extends the due date for payment of any principal,
interest or fees due under the Loan Documents, reduces the interest rate or the
amount of principal or fees applicable to the Obligation (except reductions
contemplated by this Agreement), or releases any guaranty or any substantial
part of the collateral, if any, for the Obligation. However, if a Participant is
entitled to the benefits of Section 3 or a Lender grants Rights to its
Participants to approve amendments to or waivers of the Loan Documents
respecting the matters described in the previous sentence, then such Lender must
include a voting mechanism in the relevant participation agreement whereby a
majority of its portion of the Obligation (whether held by it or participated)
shall control the vote for all of such Lender's portion of the Obligation.
(c) Subject to the provisions of this Section 13.11, any Lender may at
any time, in the ordinary course of its commercial banking business, (i) without
the consent of Borrower or Administrative Agent, assign all or any part of its
Rights and obligations under the Loan Documents to any of its Affiliates so long
as such Affiliate is an Eligible Institution (each a "Purchaser") and (ii) upon
the prior written consent of Administrative Agent, and so long as no Default has
occurred and is continuing, Borrower, such consents not to be unreasonably
withheld, assign to any other Eligible Institution (each of which is also a
"Purchaser") a proportionate part (not less than $15,000,000 and an integral
multiple of $1,000,000) of its Rights and obligations under the Loan Documents.
Notwithstanding the foregoing, each Agent shall, at all times prior to its
resignation or replacement as an Agent hereunder, retain a minimum Commitment of
$25,000,000, or if the Total Commitments have been terminated, then Notes having
outstanding Principal Debt of at least $25,000,000. In each case, the Purchaser
shall assume those Rights and obligations under an assignment agreement
substantially in the form of Exhibit E. Upon (i) delivery of an executed copy of
47
the assignment agreement to Borrower and Administrative Agent and (ii) payment
of a fee of $3,000 from the transferor to Administrative Agent, from and after
the assignment's effective date (which shall be after the date of delivery), the
Purchaser shall for all purposes be a Lender party to this Agreement and shall
have all the Rights and obligations of a Lender under this Agreement to the same
extent as if it were an original party to this Agreement with commitments as set
forth in the assignment agreement, and the transferor Lender shall be released
from its obligations under this Agreement to a corresponding extent, and, except
as provided in the following sentence, no further consent or action by Borrower,
Lenders, or any Agent shall be required. Upon the consummation of any transfer
to a Purchaser under this clause (c), the then-existing Schedule 1 shall
automatically be deemed to reflect the name, address, and Term Loan of such
Purchaser, Administrative Agent shall deliver to Borrower and Lenders an amended
Schedule 1 reflecting those changes, Borrower shall execute and deliver to each
of the transferor Lender and the Purchaser a Note in the face amount of its
respective Commitment following transfer, and, upon receipt of its new Note, the
transferor Lender shall return to Borrower the Note previously delivered to it
under this Agreement. A Purchaser is subject to all the provisions in this
Section as if it were a Lender signatory to this Agreement as of the date of
this Agreement.
(d) Any Lender may at any time, without the consent of Borrower or
Administrative Agent, assign all or any part of its Rights under the Loan
Documents to a Federal Reserve Bank without releasing the transferor Lender from
its obligations thereunder.
(e) Notwithstanding any contrary provision in this Agreement, a Lender
may not sell or participate any of its interests for a purchase price that,
directly or indirectly, reflects a discount from face value, without first
offering the sale or participation to the other Lenders on a Pro Rata basis
(which must be accepted or rejected within five (5) Business Days after the
offer).
(f) Borrower is entitled to deem and treat each Lender as the owner and
holder of its portion of the Obligation for all purposes until written notice of
the assignment pursuant to this Section 13.11 is received by Borrower.
13.12 Discharge Only Upon Payment in Full; Reinstatement in Certain
Circumstances. Borrower's obligations under the Loan Documents remain in full
force and effect until the Obligation is paid in full (except for provisions
under the Loan Documents which by their terms expressly survive payment of the
Obligation and termination of the Loan Documents). If at any time any payment of
the principal of or interest on any Note or any other amount payable by Borrower
or any other obligor on the Obligation under any Loan Document is rescinded or
must be restored or returned upon the insolvency, bankruptcy or reorganization
of Borrower or otherwise, the obligations of Borrower under the Loan Documents
with respect to that payment shall be reinstated as though the payment had been
due but not made at that time.
13.13 Confidentiality. Each Lender agrees to hold any confidential
information which (a) it has received prior to the Closing Date from Borrower
which is confidential and is not otherwise publicly available, and (b) it may
receive from Borrower pursuant to this Agreement after the Closing Date which
Borrower has marked "confidential" and is not otherwise publicly available, in
confidence, except (i) to other Lenders, (ii) to legal counsel, accountants, and
other professional advisors to such Lender who agree to be bound by the terms of
this Section, (iii) to regulatory officials, but only to the extent required by
such officials, (iv) upon prior notice to Borrower (which Lenders agree shall be
delivered as promptly as practicable), in connection with or response to
compliance with any Law or at the request of any Tribunal, but only to the
extent required by such Law or Tribunal, (v) upon prior notice to Borrower
(which Lenders agree shall be delivered as promptly as practicable), in
connection with any legal proceedings to which such
48
Lender is a party, but only to the extent required by such proceedings, and (vi)
to prospective Participants or Purchasers who agree to be bound by the terms of
this Section.
13.14 Arbitration. ANY CONTROVERSY OR CLAIM BETWEEN OR AMONG THE PARTIES
HERETO INCLUDING BUT NOT LIMITED TO THOSE ARISING OUT OF OR RELATING TO THIS
AGREEMENT OR ANY RELATED AGREEMENTS OR INSTRUMENTS, INCLUDING ANY CLAIM BASED ON
OR ARISING FROM AN ALLEGED TORT, SHALL BE DETERMINED BY BINDING ARBITRATION IN
ACCORDANCE WITH THE FEDERAL ARBITRATION ACT (OR IF NOT APPLICABLE, THE
APPLICABLE STATE LAW), THE RULES OF PRACTICE AND PROCEDURE FOR THE ARBITRATION
OF J.A.M.S./ENDISPUTE, INC. OR ANY SUCCESSOR THEREOF ("J.A.M.S."), AND THE
"SPECIAL RULES" SET FORTH BELOW. IN THE EVENT OF ANY INCONSISTENCY, THE SPECIAL
RULES SHALL CONTROL. JUDGMENT UPON ANY ARBITRATION AWARD MAY BE ENTERED IN ANY
COURT HAVING JURISDICTION. ANY PARTY TO THIS AGREEMENT MAY BRING AN ACTION,
INCLUDING A SUMMARY OR EXPEDITED PROCEEDING, TO COMPEL ARBITRATION OF ANY
CONTROVERSY OR CLAIM TO WHICH THIS AGREEMENT APPLIES IN ANY COURT HAVING
JURISDICTION OVER SUCH ACTION.
(a) SPECIAL RULES. THE ARBITRATION SHALL BE CONDUCTED IN DALLAS, TEXAS
AND ADMINISTERED BY J.A.M.S. WHO WILL APPOINT AN ARBITRATOR; IF J.A.M.S. IS
UNABLE OR LEGALLY PRECLUDED FROM ADMINISTERING THE ARBITRATION, THEN THE
AMERICAN ARBITRATION ASSOCIATION WILL SERVE. ALL ARBITRATION HEARINGS WILL BE
COMMENCED WITHIN 90 DAYS OF THE DEMAND FOR ARBITRATION; FURTHER, THE ARBITRATOR
SHALL ONLY, UPON A SHOWING OF CAUSE, BE PERMITTED TO EXTEND THE COMMENCEMENT OF
SUCH HEARING FOR UP TO AN ADDITIONAL 60 DAYS.
(b) RESERVATION OF RIGHTS. NOTHING IN THIS AGREEMENT SHALL BE DEEMED TO
(i) LIMIT THE APPLICABILITY OF ANY OTHERWISE APPLICABLE STATUTES OF LIMITATION
OR REPOSE AND ANY WAIVERS CONTAINED IN THIS AGREEMENT; OR (ii) BE A WAIVER BY
LENDERS OF THE PROTECTION AFFORDED TO THEM BY 12 U.S.C. (S) 91 OR ANY
SUBSTANTIALLY EQUIVALENT STATE LAW; OR (iii) LIMIT THE RIGHT OF THE CREDIT
PARTIES (A) TO EXERCISE SELF HELP REMEDIES SUCH AS (BUT NOT LIMITED TO) SET-OFF,
OR (B) TO FORECLOSE AGAINST ANY REAL OR PERSONAL PROPERTY COLLATERAL, OR (C) TO
OBTAIN FROM A COURT PROVISIONAL OR ANCILLARY REMEDIES SUCH AS (BUT NOT LIMITED
TO) INJUNCTIVE RELIEF OR THE APPOINTMENT OF A RECEIVER. THE CREDIT PARTIES MAY
EXERCISE SUCH SELF HELP RIGHTS, FORECLOSE UPON SUCH PROPERTY, OR OBTAIN SUCH
PROVISIONAL OR ANCILLARY REMEDIES BEFORE, DURING OR AFTER THE PENDENCY OF ANY
ARBITRATION PROCEEDING BROUGHT PURSUANT TO THIS AGREEMENT. AT ADMINISTRATIVE
AGENT'S AND LENDERS' OPTION, FORECLOSURE UNDER A DEED OF TRUST OR MORTGAGE MAY
BE ACCOMPLISHED BY ANY OF THE FOLLOWING: THE EXERCISE OF A POWER OF SALE UNDER
THE DEED OF TRUST OR MORTGAGE, OR BY JUDICIAL SALE UNDER THE DEED OF TRUST OR
MORTGAGE, OR BY JUDICIAL FORECLOSURE. NEITHER THIS EXERCISE OF SELF HELP
REMEDIES NOR THE INSTITUTION OR MAINTENANCE OF AN ACTION FOR FORECLOSURE OR
PROVISIONAL OR ANCILLARY REMEDIES SHALL CONSTITUTE A WAIVER OF THE RIGHT OF ANY
PARTY, INCLUDING THE CLAIMANT IN ANY SUCH ACTION, TO ARBITRATE THE MERITS OF THE
CONTROVERSY OR CLAIM OCCASIONING RESORT TO SUCH REMEDIES.
49
13.15 Limitation of Liability of Trustees, Shareholders and Officers of
Borrower. ANY OBLIGATION OR LIABILITY WHATSOEVER OF BORROWER WHICH MAY ARISE AT
ANY TIME UNDER THIS AGREEMENT OR ANY OBLIGATION OR LIABILITY WHICH MAY BE
INCURRED BY BORROWER PURSUANT TO ANY OTHER INSTRUMENT, TRANSACTION, OR
UNDERTAKING CONTEMPLATED HEREBY SHALL BE SATISFIED OUT OF BORROWER'S ASSETS
ONLY. NO SUCH OBLIGATION OR LIABILITY SHALL BE PERSONALLY BINDING UPON, NOR
SHALL RESORT FOR THE ENFORCEMENT THEREOF BE HAD TO, THE PROPERTY OF ANY OF
BORROWER'S TRUSTEES, SHAREHOLDERS, OFFICERS, EMPLOYEES OR AGENTS, REGARDLESS OF
WHETHER SUCH OBLIGATION OR LIABILITY IS IN THE NATURE OF CONTRACT, TORT, OR
OTHERWISE.
13.16 Entirety. THIS AGREEMENT AND THE OTHER WRITTEN LOAN DOCUMENTS (EACH
AS AMENDED IN WRITING FROM TIME-TO-TIME) EXECUTED BY BORROWER, ANY LENDER, OR
ANY AGENT REPRESENT THE FINAL AGREEMENT AMONG BORROWER AND THE CREDIT PARTIES
AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT
ORAL AGREEMENTS BY THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS AMONG THE
PARTIES.
[Remainder of Page Intentionally Left Blank; Signature Pages to Follow]
50
