EXHIBIT 10.5
CREDIT AGREEMENT
This Agreement, dated as of July 3, 2002, is among Sun Communities
Operating Limited Partnership, a Michigan limited partnership, Sun Communities,
Inc., a Maryland corporation, the Lenders and Bank One, NA, a national banking
association having its principal office in Chicago, Illinois, as LC Issuer and
as Agent. The parties hereto agree as follows:
ARTICLE I
DEFINITIONS
As used in this Agreement:
"Absolute Rate" means, with respect to an Absolute Rate Loan made by a
given Lender for the relevant Absolute Rate Interest Period, the rate of
interest per annum (rounded to the nearest 1/100 of 1%) offered by such Lender
and accepted by the Borrower pursuant to Section 2.3.
"Absolute Rate Advance" means a borrowing hereunder consisting of the
aggregate amount of the several Absolute Rate Loans made by some or all of the
Lenders to the Borrower at the same time and for the same Absolute Rate Interest
Period.
"Absolute Rate Auction" means a solicitation of Competitive Bid Quotes
setting forth Absolute Rates pursuant to Section 2.3.
"Absolute Rate Interest Period" means, with respect to an Absolute Rate
Advance, a period of not less than seven (7) and not more than ninety (90) days
commencing on a Business Day selected by the Borrower pursuant to this
Agreement. If such Absolute Rate Interest Period would end on a day which is not
a Business Day, such Absolute Rate Interest Period shall end on the next
succeeding Business Day.
"Absolute Rate Loan" means a Loan which bears interest at an Absolute
Rate.
"Accounts Receivable" means all income and revenues of the Borrower and
any Consolidated Entity received and the Borrower's and the Consolidated
Entity's right to receive all income and revenues arising from the operation of
the Real Property Assets and all payments for goods or property sold or leased
or for services rendered by the Borrower or any Consolidated Entity, whether or
not yet earned by performance, and not evidenced by an instrument or chattel
paper, including, without limiting the generality of the foregoing, (i) all
accounts, contract rights, book debts, and notes arising from the operation of a
mobile home park or manufactured housing community on the Real Property Assets
or arising from the sale, lease or exchange of goods or other property and/or
the performance of services, (ii) the Borrower's and any Consolidated Entity's
rights to payment from any consumer credit/charge card organization or entity
(such as, or similar to, the organizations or entities which sponsor and
administer the American Express Card, the Visa Card, the Bankamericard, the
Xxxxx Xxxxxxx Card, or the Mastercard), (iii) the Borrower's and any
Consolidated Entity's rights in, to and under all purchase orders for goods,
services or other property, (iv) the Borrower's and any Consolidated Entity's
rights to any goods, services or other property represented by any of the
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foregoing, (v) monies due to or to become due to the Borrower or any
Consolidated Entity under all contracts for the sale, lease or exchange of goods
or other property and/or the performance of services including the right to
payment of any interest or finance charges in respect thereto (whether or not
yet earned by performance on the part of the Borrower or any Consolidated
Entity) and (vi) all collateral security and guaranties of any kind given by any
person or entity with respect to any of the foregoing. Accounts Receivable shall
include those now existing or hereafter created, substitutions therefor,
proceeds (whether cash or non-cash, movable or immovable, tangible or
intangible) received upon the sale, exchange, transfer, collection or other
disposition or substitution thereof and any and all of the foregoing and
proceeds therefrom.
"Acquisition" means any transaction, or any series of related
transactions, consummated on or after the date of this Agreement, by which the
Borrower or any of its Subsidiaries (i) acquires any going business or all or
substantially all of the assets of any firm, corporation or limited liability
company, or division thereof, whether through purchase of assets, merger or
otherwise or (ii) directly or indirectly acquires (in one transaction or as the
most recent transaction in a series of transactions) at least a majority (in
number of votes) of the securities of a corporation which have ordinary voting
power for the election of directors (other than securities having such power
only by reason of the happening of a contingency) or a majority (by percentage
or voting power) of the outstanding ownership interests of a partnership or
limited liability company.
"Additional Lender" is defined in Section 2.5.4(i).
"Adjusted Eurodollar Base Rate" means, with respect to a Eurodollar
Advance for the relevant Eurodollar Interest Period, the quotient of (i) the
Eurodollar Base Rate applicable to such Eurodollar Interest Period divided by
(ii) one minus the Reserve Requirement applicable to such Eurodollar Interest
Period (expressed as a decimal).
"Advance" means a Ratable Advance or a Competitive Bid Advance.
"Affiliate" of any Person means any other Person directly or indirectly
controlling, controlled by or under common control with such Person. A Person
shall be deemed to control another Person if the controlling Person owns 10% or
more of any class of voting securities (or other ownership interests) of the
controlled Person or possesses, directly or indirectly, the power to direct or
cause the direction of the management or policies of the controlled Person,
whether through ownership of stock, by contract or otherwise.
"Agent" means Bank One in its capacity as contractual representative of
the Lenders pursuant to Article X, and not in its individual capacity as a
Lender, and any successor Agent appointed pursuant to Article X.
"Aggregate Commitment" means the aggregate of the Commitments of all
the Lenders, as increased from time to time pursuant to Section 2.5.4 hereof or
as reduced from time to time pursuant to the terms hereof.
"Aggregate Outstanding Credit Exposure" means, at any time, the
aggregate of the Outstanding Credit Exposure of all the Lenders.
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"Agreement" means this credit agreement, as it may be amended or
modified and in effect from time to time.
"Agreement Accounting Principles" means generally accepted accounting
principles as in effect from time to time, applied in a manner consistent with
that used in preparing the financial statements referred to in Section 5.4.
"Alternate Base Rate" means, for any day, a rate of interest per annum
equal to the higher of (i) the Prime Rate for such day and (ii) the sum of the
Federal Funds Effective Rate for such day plus 1/2% per annum.
"Applicable Fee Rate" means, at any time, the percentage rate per annum
at which Facility Fees are accruing on the Aggregate Commitment (without regard
to usage) or (as applicable) Non-Use Fees are accruing on the unused portion of
the Aggregate Commitment at such time, determined by reference to the lower of
the two Unsecured Debt Ratings of the Borrower (i.e., higher pricing) set forth
below:
------------------------------ ----------------------------- ---------------------------- ----------------------------
Standard & Poor's Ratings Xxxxx'x Investors Services,
Services Rating or a Inc. Rating or a Substitute
Substitute Rating Agency Rating Agency Equivalent Facility Fee Non-Use Fee
Equivalent Rating Rating
------------------------------ ----------------------------- ---------------------------- ----------------------------
A- or higher A3 or higher 0.15% Not Applicable
------------------------------ ----------------------------- ---------------------------- ----------------------------
BBB+ Baa1 0.175% Not Applicable
------------------------------ ----------------------------- ---------------------------- ----------------------------
BBB Baa2 0.20% Not Applicable
------------------------------ ----------------------------- ---------------------------- ----------------------------
BBB- Baa3 0.25% Not Applicable
------------------------------ ----------------------------- ---------------------------- ----------------------------
BB+ or lower Ba1 or lower Not Applicable 0.30%
------------------------------------------------------------ ---------------------------- ----------------------------
If no Rating Agency or Substitute Rating Agency assigns a Not Applicable 0.30%
rating to the Borrower for whatever reason
------------------------------------------------------------ ---------------------------- ----------------------------
The Facility Fee and the Non-Use Fee shall be determined by reference
to the lower of the two Unsecured Debt Ratings of the Borrower in effect from
time to time, and each change in the Facility Fee and Non-Use Fee shall be
effective as of the date such Unsecured Debt Rating is announced.
"Applicable Laws" means all existing and future federal, state and
local laws, statutes, orders, ordinances, rules, and regulations or orders,
writs, injunctions or decrees of any court affecting the Borrower, any
Consolidated Entity or any Real Property Asset, or the use thereof including,
but not limited to, all zoning, fire safety and building codes, the Americans
with Disabilities Act, and all Environmental Laws.
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"Applicable Margin" means, with respect to Ratable Advances of any Type
at any time, the percentage rate per annum determined by reference to the lower
of the two Unsecured Debt Ratings of the Borrower (i.e., higher pricing) set
forth below:
------------------------------ ----------------------------- ---------------------------- ----------------------------
Standard & Poor's Ratings Xxxxx'x Investors Services,
Services Rating or a Inc. Rating or a Substitute
Substitute Rating Agency Rating Agency Equivalent Applicable Margin for Applicable Margin for
Equivalent Rating Rating Eurodollar Ratable Loans Floating Rate Loans
------------------------------ ----------------------------- ---------------------------- ----------------------------
A- or higher A3 or higher 0.70% -0-
------------------------------ ----------------------------- ---------------------------- ----------------------------
BBB+ Baa1 0.775% -0-
------------------------------ ----------------------------- ---------------------------- ----------------------------
BBB Baa2 0.85% -0-
------------------------------ ----------------------------- ---------------------------- ----------------------------
BBB- Baa3 1.00% -0-
------------------------------ ----------------------------- ---------------------------- ----------------------------
BB+ or lower Ba1 or lower 1.55% 0.55
------------------------------------------------------------ ---------------------------- ----------------------------
If no Rating Agency or Substitute Rating Agency assigns a 1.55% 0.55
rating to the Borrower for whatever reason
------------------------------------------------------------ ---------------------------- ----------------------------
The Applicable Margin for each Eurodollar Ratable Advance shall be
determined by reference to the lower of the two Unsecured Debt Ratings of
Borrower in effect on the first day of the related Interest Period. The
Applicable Margin for each Floating Rate Advance shall be determined by
reference to the lower of the two Unsecured Debt Ratings of the Borrower in
effect from time to time, and each change in such Applicable Margin shall be
effective as of the date such Unsecured Debt Rating is announced.
"Approved Fund" means any Fund that is administered or managed by (i) a
Lender, (ii) an Affiliate of a Lender or (iii) an entity or an Affiliate of an
entity that administers or manages a Lender.
"Arranger" means Banc One Capital Markets, Inc., a Delaware
corporation, and its successors, in its capacity as Lead Arranger and Sole Book
Runner.
"Article" means an article of this Agreement unless another document is
specifically referenced.
"Assets" of any Person means all assets of such Person that would, in
accordance with Agreement Accounting Principles, be classified as assets of a
company conducting a business the same as or similar to that of such Person,
including without limitation, all Real Property Assets.
"Authorized Officer" means any of the President or Chief Financial
Officer of the REIT, acting singly.
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"Bank One" means Bank One, NA, a national banking association having
its principal office in Chicago, Illinois, in its individual capacity, and its
successors.
"Base Period" is defined in Section_6.16(i).
"Best" means A.M. Best Company, Inc.
"Book Value" means, with respect to any Assets of a Person, the book
value of such Assets that is reflected on such Person's consolidated financial
statements (adding back adjustments or allowances for depreciation and
amortization) and calculated and prepared in accordance with Agreement
Accounting Principles.
"Borrower" means Sun Communities Operating Limited Partnership, a
Michigan limited partnership, and its successors and assigns.
"Borrower's Partnership Agreement" means the Second Amended and
Restated Limited Partnership Agreement of Sun Communities Operating Limited
Partnership dated as of April 30, 1996, as amended.
"Borrowing Date" means a date on which an Advance is made hereunder.
"Borrowing Notice" means a Competitive Bid Borrowing Notice or a
Ratable Borrowing Notice, as the context may require.
"Business Day" means (i) with respect to any borrowing, payment or rate
selection of Eurodollar Advances, a day (other than a Saturday or Sunday) on
which banks generally are open in Chicago, Los Angeles and New York City for the
conduct of substantially all of their commercial lending activities, interbank
wire transfers can be made on the Fedwire system and dealings in United States
dollars are carried on in the London interbank market and (ii) for all other
purposes, a day (other than a Saturday or Sunday) on which banks generally are
open in Chicago for the conduct of substantially all of their commercial lending
activities and interbank wire transfers can be made on the Fedwire system.
"Capitalized Lease" of a Person means any lease of Property by such
Person as lessee which would be capitalized on a balance sheet of such Person
prepared in accordance with Agreement Accounting Principles.
"Capitalized Lease Obligations" of a Person means the amount of the
obligations of such Person under Capitalized Leases which would be shown as a
liability on a balance sheet of such Person prepared in accordance with
Agreement Accounting Principles.
"Change in Control" means the acquisition by any Person, or two or more
Persons acting in concert, of beneficial ownership (within the meaning of Rule
13d-3 of the Securities and Exchange Commission under the Securities Exchange
Act of 1934) of 30% or more of the outstanding shares of voting stock of the
REIT or OP Units of the Borrower.
"Closing Date" means the date of this Agreement.
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"Code" means the Internal Revenue Code of 1986, as amended from time to
time, and any successor statute, together with all rules and regulations from
time to time promulgated thereunder.
"Collateral Shortfall Amount" is defined in Section 8.1.
"Commitment" means, for each Lender, the obligation of such Lender to
make Ratable Loans to, and to participate in Facility LCs upon the application
of, the Borrower in an aggregate amount not exceeding the amount set forth in
Schedule 13 hereto or in any Commitment and Acceptance delivered pursuant to
Section 2.5.4(iii), as it may be modified as a result of any assignment that has
become effective pursuant to Section 12.3.2 or as otherwise modified from time
to time pursuant to the terms hereof.
"Commitment and Acceptance" is defined in Section 2.5.4(ii).
"Common OP Units" has the meaning provided in the Borrower's
Partnership Agreement.
"Competitive Bid Advance" means a borrowing hereunder made by some or
all of the Lenders on the same Borrowing Date and consisting of the aggregate
amount of the several Competitive Bid Loans of the same Type and for the same
Interest Period.
"Competitive Bid Borrowing Notice" is defined in Section 2.3.6.
"Competitive Bid Loan" means a Eurodollar Bid Rate Loan or an Absolute
Rate Loan, or both, as the case may be.
"Competitive Bid Margin" means the margin above or below the applicable
Eurodollar Base Rate (adjusted for reserve costs, if applicable) offered for a
Eurodollar Bid Rate Loan, expressed as a percentage (rounded to the nearest
1/100 of 1%) to be added or subtracted from such Eurodollar Base Rate.
"Competitive Bid Note" means any promissory note issued at the request
of a Lender pursuant to Section 2.11 to evidence its Competitive Bid Loans in
the form of Exhibit E-2 hereto.
"Competitive Bid Quote" means a Competitive Bid Quote substantially in
the form of Exhibit H hereto completed and delivered by a Lender to the Agent in
accordance with Section 2.3.4.
"Competitive Bid Quote Request" means a Competitive Bid Quote Request
substantially in the form of Exhibit F hereto completed and delivered by the
Borrower to the Agent in accordance with Section 2.3.2.
"Consolidated EBITDA" means Consolidated Net Income plus, to the extent
deducted from revenues in determining Consolidated Net Income, (i) Consolidated
Interest Expense, (ii) expense for taxes paid or accrued, (iii) depreciation,
(iv) amortization and (v) extraordinary losses incurred other than in the
ordinary course of business, minus, to the extent included in Consolidated Net
Income, extraordinary gains realized other than in the ordinary course of
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business, all calculated for the Borrower, the REIT and their Consolidated
Subsidiaries on a consolidated basis; provided, however, Consolidated EBITDA
shall exclude earnings or losses resulting from (a) cumulative changes in
accounting practices, (b) discontinued operations, (c) net income of any entity
acquired in a pooling of interest transaction for the period prior to the
acquisition, (d) net income of an Affiliate or any other Consolidated Entity
that is unavailable to the Borrower or the REIT, (e) net income not readily
convertible into Dollars or remittable to the United States, (f) gains and
losses from the sale of assets, and (g) net income from corporations,
partnerships, associations, joint ventures or other entities in which the
Borrower, the REIT or an Affiliate thereof has a minority interest and in which
neither the Borrower, the REIT or their Affiliate has Control, except to the
extent actually received.
"Consolidated Entity" means each of the Borrower, the REIT, the
Operating Partnerships, the Borrower's Consolidated Subsidiaries, and the REIT's
Consolidated Subsidiaries.
"Consolidated Indebtedness" means at any time the Indebtedness of the
Borrower, the REIT and their Consolidated Subsidiaries calculated on a
consolidated basis as of such time. "Consolidated Indebtedness" shall include a
pro rata portion of the Indebtedness of any Joint Venture or other Person in
which the Borrower, the REIT or any of their Consolidated Subsidiaries holds an
equity or ownership interest, which Indebtedness is not otherwise included in
Consolidated Indebtedness; such pro rata portion shall be in the proportion of
such equity or ownership interest in such Joint Venture or other Person.
"Consolidated Interest Expense" means, for any period, the interest
expense of the Borrower, the REIT and their Consolidated Subsidiaries calculated
on a consolidated basis for such period, taking into account any Hedge
Agreement. "Consolidated Interest Expense" shall include (without duplication)
interest on the pro rata portion of any Indebtedness of any Joint Venture or
other Person that is included in Consolidated Indebtedness.
"Consolidated Net Income" means, for any period, the net income (or
loss) of the Borrower, the REIT and their Consolidated Subsidiaries calculated
on a consolidated basis for such period.
"Consolidated Net Worth" means at any time the consolidated
stockholders' equity of the REIT and its Consolidated Subsidiaries (including
the Borrower) calculated on a consolidated basis as of such time (adding back
adjustments or allowances for accumulated depreciation) as calculated in
accordance with Agreement Accounting Principles.
"Consolidated Secured Indebtedness" means at any time all Consolidated
Indebtedness that is Secured Debt.
"Consolidated Subsidiaries" means those Persons (including the Borrower
and any Operating Partnership) set forth on Schedule 3 hereof, and any other
Persons required to be consolidated with the Borrower or the REIT under
Agreement Accounting Principles in the Borrower's or the REIT's consolidated
financial statements, and only for so long as (i) such Persons continue to be
required to be consolidated with the Borrower or the REIT under Agreement
Accounting Principles in the Borrower's or the REIT's consolidated financial
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statements or (ii) none of the events described in Section 7.5 have occurred
with respect to any such Persons.
"Consolidated Unsecured Indebtedness" means at any time all
Consolidated Indebtedness that is Unsecured Debt.
"Construction in Progress" means construction on any vacant, unimproved
or non-income producing Undeveloped Land or other Real Property Asset or
construction, renovation or rehabilitation of that portion of the net rentable
area of any Improvements on Real Property Assets as to which no certificate of
occupancy (or its equivalent) has been issued.
"Contingent Obligation" as to any Person means any obligation of such
Person guaranteeing or intended to guarantee any Indebtedness, leases (including
Capitalized Leases) dividends or other obligations ("primary obligations") of
any other Person (the "primary obligor") in any manner, whether directly or
indirectly, including, without limitation, any obligation of such Person,
whether or not contingent, (i) to purchase any such primary obligation or any
property constituting direct or indirect security therefor, (ii) to advance or
supply funds (x) for the purchase or payment of any such primary obligation or
(y) to maintain working capital or equity capital of the primary obligor or
otherwise to maintain the net worth, solvency or other financial condition of
the primary obligor, (iii) to purchase property, securities or services
primarily for the purpose of assuring the owner of any such primary obligation
of the ability of the primary obligor to make payment of such primary obligation
or (iv) otherwise to assure or hold harmless the owner of such primary
obligation against loss in respect thereof: provided, however, that the term
Contingent Obligation shall not include endorsements of instruments for deposit
or collection in the ordinary course of business or obligations of such Person
which would not be required under Agreement Accounting Principles to be
disclosed as liabilities or footnoted on such Person's financial statement and
provided, further, that, in the case of the Borrower, the term Contingent
Obligations shall not include a guaranty by the Borrower or the REIT of the
obligations of SHS under its $15,000,000 secured facility with Bank One. The
amount of any accrued or accruable Contingent Obligation shall be determined in
accordance with Agreement Accounting Principles.
"Control" means in (i) in the case of a corporation, ownership,
directly or through ownership of other entities, of at least ten percent (10%)
of all the voting stock (exclusive of stock which is voting only as required by
applicable law or in the event of nonpayment of dividends and pays dividends
only on a nonparticipating basis at a fixed or floating rate), and (ii) in the
case of any other entity, ownership, directly or through ownership of other
entities, of at least ten percent (10%) of all of the beneficial equity
interests therein (calculated by a method that excludes from equity interests,
ownership interests that are nonvoting (except as required by applicable law or
in the event of nonpayment of dividends or distributions) and pay dividends or
distributions only on a non-participating basis at a fixed or floating rate) or,
in any case, (iii) the power directly or indirectly, to direct or control, or
cause the direction of, the management policies of another Person, whether
through the ownership of voting securities, general partnership interests,
common directors, trustees, officers by contract or otherwise. The terms
"controlled" and "controlling" shall have meanings correlative to the foregoing
definition of "Control."
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"Controlled Group" means all members of a controlled group of
corporations or other business entities and all trades or businesses (whether or
not incorporated) under common control which, together with the Borrower or any
of its Subsidiaries, are treated as a single employer under Section 414 of the
Code.
"Conversion/Continuation Notice" is defined in Section 2.2.4.
"Credit Extension" means the making of an Advance or the issuance of a
Facility LC hereunder.
"Credit Extension Date" means the Borrowing Date for an Advance or the
issuance date for a Facility LC.
"Debt Service" means, for any period, the sum (without duplication) of
(i) Consolidated Interest Expense for such period plus (ii) scheduled principal
amortization of any Consolidated Indebtedness and any unscheduled principal
amortization payments actually made or required to be made during such period
pursuant to a settlement of Indebtedness (giving effect to any principal
payments actually made or required to be made other than scheduled balloon
payments due on the applicable maturity date that are not then due or past due)
for such period (whether or not such payments are made), all determined on a
consolidated basis for the Borrower, the REIT and their Consolidated
Subsidiaries. For purposes of Section 6.16(iii), the foregoing definition shall
be modified to exclude therefrom payments in respect of any Indebtedness that
does not constitute Unsecured Debt.
"Default" means an event described in Article VII.
"Designated Lender" means any Person who has been designated by a
Lender to fund Competitive Bid Loans pursuant to Section 2.3.9.
"Designating Lender" is defined in Section 2.3.10.
"Designation Agreement" means a designation agreement entered into by a
Lender (other than a Designated Lender) and a Designated Lender, and accepted by
the Agent and the Borrower, in substantially the form of Exhibit A hereto.
"Distribution" means any dividends (other than a dividend payable
solely in common stock), distributions, return of capital to any stockholders,
general or limited partners or members, other payments, distributions or
delivery of property or cash to stockholders, general or limited partners or
members, or any redemption, retirement, purchase or other acquisition, directly
or indirectly, of any shares of any class of capital stock now or hereafter
outstanding (or any options or warrants issued with respect to capital stock)
general or limited partnership interest, or the setting aside of any funds for
the foregoing.
"Dollars" and the symbol "$" each mean the lawful money of the United
States of America.
"Engineering Reports" means written engineering reports with respect to
any Real Property Asset, prepared by licensed engineers acceptable to the Agent,
stating, among other
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things, that such Real Property Asset is in good condition and repair, free from
damage and waste and is in compliance with the Americans with Disabilities Act,
and otherwise in form and substance satisfactory to the Agent.
"Environmental Indemnity" means that certain environmental indemnity
agreement dated the date hereof given by the Borrower and the REIT to the Agent
for the benefit of the Lenders, as the same may be supplemented or amended from
time to time.
"Environmental Laws" means any and all applicable federal, state and
local statutes, laws, judicial decisions, regulations, ordinances, rules,
judgments, orders, decrees, injunctions, permits, concessions, grants,
franchises, licenses, agreements and other governmental restrictions relating to
(i) the protection of the environment, (ii) the effect of the environment on
human health, (iii) emissions, discharges or releases of pollutants,
contaminants, hazardous substances or wastes into surface water, ground water or
land, or (iv) the manufacture, processing, distribution, use, treatment,
storage, disposal, transport or handling of pollutants, contaminants, hazardous
substances or wastes or the clean-up or other remediation thereof.
"Environmental Reports" means written environmental site assessments,
prepared by independent qualified environmental professionals acceptable to the
Agent, on any Real Property Assets in form and substance satisfactory to the
Agent and containing the following: (i) a Phase I environmental site assessment
analyzing the presence of environmental contaminants, polychlorinated biphenyls
or storage tanks and other Hazardous Substances at each of the Real Property
Assets, the risk of contamination from off-site Hazardous Substances and
compliance with Environmental Laws, such assessments shall be conducted in
accordance with ASTM Standard E 1527-93, or any successor thereto published by
ASTM, with respect to each of the Real Property Assets, (ii) an asbestos survey
of each of the Real Property Assets, which shall include random sampling of
materials and air quality testing, (iii) if any of the Real Property Assets is
used for residential housing, an assessment of the presence of lead-based paint,
lead in water and radon in the improvements (other than Units that are not owned
or leased by the Borrower, the REIT, any other Consolidated Entity or any
Affiliate thereof), and (iv) such further site assessments that the Agent may
require or request due to the results obtained in an assessment or survey
described in clauses (i), (ii) or (iii) above or in its reasonable discretion.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and any rule or regulation issued thereunder.
"Eurodollar Advance" means a Eurodollar Ratable Advance or a Eurodollar
Bid Rate Advance, as the context may require.
"Eurodollar Auction" means a solicitation of Competitive Bid Quotes
setting forth Competitive Bid Margins pursuant to Section 2.3.
"Eurodollar Base Rate" means, with respect to a Eurodollar Advance for
the relevant Eurodollar Interest Period, the applicable British Bankers'
Association LIBOR rate for deposits in U.S. dollars as reported by any generally
recognized financial information service as of 11:00 a.m. (London time) two
Business Days prior to the first day of such Eurodollar Interest Period, and
having a maturity equal to such Eurodollar Interest Period, provided that, if no
such British
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Bankers' Association LIBOR rate is available to the Agent, the applicable
Eurodollar Base Rate for the relevant Eurodollar Interest Period shall instead
be the rate determined by the Agent to be the rate at which Bank One or one of
its Affiliate banks offers to place deposits in U.S. dollars with first-class
banks in the London interbank market at approximately 11:00 a.m. (London time)
two Business Days prior to the first day of such Eurodollar Interest Period, in
the approximate amount of Bank One's relevant Eurodollar Ratable Loan, or, in
the case of a Eurodollar Bid Rate Advance, the amount of the Eurodollar Bid Rate
Advance requested by the Borrower, and having a maturity equal to such
Eurodollar Interest Period.
"Eurodollar Bid Rate" means, with respect to a Eurodollar Bid Rate Loan
made by a given Lender for the relevant Eurodollar Interest Period, the sum of
(i) the quotient of (a) the Eurodollar Base Rate (or, if such Lender is subject
to Reserve Requirements, the Adjusted Eurodollar Base Rate), applicable to such
Eurodollar Interest Period (expressed as a decimal) plus (ii) the Competitive
Bid Margin offered by such Lender and accepted by the Borrower.
"Eurodollar Bid Rate Advance" means a Competitive Bid Advance which
bears interest at a Eurodollar Bid Rate.
"Eurodollar Bid Rate Loan" means a Loan which bears interest at a
Eurodollar Bid Rate.
"Eurodollar Interest Period" means, (i) with respect to a Eurodollar
Ratable Advance, a period of one, two, three, six (or, subject to availability
and to agreement of all Lenders in their sole discretion) nine months commencing
on a Business Day selected by the Borrower pursuant to this Agreement and (ii)
with respect to a Eurodollar Bid Rate Advance, a period of one, two or three
months commencing on a Business Day selected by the Borrower pursuant to this
Agreement. Such Eurodollar Interest Period shall end on the day which
corresponds numerically to such date one, two, three, six or nine months (as
applicable) thereafter, provided, however, that if there is no such numerically
corresponding day in such next, second, third, sixth or ninth succeeding month
(as applicable), such Eurodollar Interest Period shall end on the last Business
Day of such next, second, third, sixth or ninth succeeding month (as
applicable). If a Eurodollar Interest Period would otherwise end on a day which
is not a Business Day, such Eurodollar Interest Period shall end on the next
succeeding Business Day, provided, however, that if said next succeeding
Business Day falls in a new calendar month, such Eurodollar Interest Period
shall end on the immediately preceding Business Day. If requested by the
Borrower and agreed to by all Lenders in their sole discretion, a Eurodollar
Interest Period may be a period of less than one month.
"Eurodollar Loan" means a Eurodollar Ratable Loan or a Eurodollar Bid
Rate Loan, as the context may require.
"Eurodollar Ratable Advance" means a Ratable Advance which bears
interest at a Eurodollar Rate requested by the Borrower pursuant to Section 2.2.
"Eurodollar Ratable Loan" means a Ratable Loan which bears interest at
a Eurodollar Rate requested by the Borrower pursuant to Section 2.2.
"Eurodollar Rate" means, with respect to a Eurodollar Ratable Advance
for the relevant Eurodollar Interest Period, the sum of (i) the Eurodollar Base
Rate (or, if any Lender is subject to
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Reserve Requirements, the Adjusted Eurodollar Base Rate) applicable to such
Eurodollar Interest Period (expressed as a decimal) plus (ii) the Applicable
Margin.
"Excluded Taxes" means, in the case of each Lender or applicable
Lending Installation and the Agent, taxes imposed on its overall net income, and
franchise taxes imposed on it, by (i) the jurisdiction under the laws of which
such Lender or the Agent is incorporated or organized or (ii) the jurisdiction
in which the Agent's or such Lender's principal executive office or such
Lender's applicable Lending Installation is located.
"Exhibit" refers to an exhibit to this Agreement, unless another
document is specifically referenced.
"Extension Fee" is defined in Section 2.17.
"Extension Request" is defined in Section 2.17.
"Facility Fee" is defined in Section 2.5.1.
"Facility LC" is defined in Section 2.19.1.
"Facility LC Application" is defined in Section 2.19.3.
"Facility LC Collateral Account" is defined in Section 2.19.11.
"Facility Termination Date" means July 2, 2005 or any later date as may
be specified as the Facility Termination Date in accordance with Section 2.17 or
any earlier date on which the Aggregate Commitment is reduced to zero or
otherwise terminated pursuant to the terms hereof.
"Federal Funds Effective Rate" means, for any day, an interest rate per
annum equal to the weighted average of the rates on overnight Federal funds
transactions with members of the Federal Reserve System arranged by Federal
funds brokers on such day, as published for such day (or, if such day is not a
Business Day, for the immediately preceding Business Day) by the Federal Reserve
Bank of New York, or, if such rate is not so published for any day which is a
Business Day, the average of the quotations at approximately 10:00 a.m. (Chicago
time) on such day on such transactions received by the Agent from three Federal
funds brokers of recognized standing selected by the Agent in its sole
discretion.
"Fixed Charges" means the amount of scheduled lease payments with
respect to leasehold interests or obligations of the respective Person and
dividends and distributions on all classes of preferred stock or preferred
partnership interests of such Person (including, in the case of the Borrower,
the Preferred OP Units).
"Fixed Rate" means the Eurodollar Rate, the Eurodollar Bid Rate or the
Absolute Rate.
"Fixed Rate Advance" means an Advance which bears interest at a Fixed
Rate.
"Fixed Rate Loan" means a Loan which bears interest at a Fixed Rate.
12
"Floating Rate" means, for any day, a rate per annum equal to (i) the
Alternate Base Rate for such day plus (ii) the Applicable Margin, in each case
changing when and as the Alternate Base Rate changes.
"Floating Rate Advance" means an Advance which, except as otherwise
provided in Section 2.9, bears interest at the Floating Rate.
"Floating Rate Loan" means a Loan which, except as otherwise provided
in Section 2.9, bears interest at the Floating Rate.
"Fund" means any Person (other than a natural person) that is (or will
be) engaged in making, purchasing, holding or otherwise investing in commercial
loans and similar extensions of credit in the ordinary course of its business.
"Funds from Operations" means consolidated net income (loss) before
extraordinary items, computed in accordance with Agreement Accounting
Principles, plus, to the extent deducted in determining net income (loss) and
without duplication, (i) gains (or losses) from debt restructuring and sales of
property, (ii) non-recurring charges, (iii) provisions for losses, (iv) real
estate related depreciation and amortization (excluding amortization of
financing costs), and (v) amortization of organizational expenses, less, to the
extent included in net income (loss), (a) non-recurring income and (b) equity
income (loss) from unconsolidated partnerships and joint ventures less the
proportionate share of funds from operations of such partnerships and joint
ventures, which adjustments shall be calculated on a consistent basis.
"Guarantors" means the REIT and those Wholly-Owned Subsidiaries of the
Borrower or of the REIT identified on Schedule 11, together with any other
Wholly-Owned Subsidiary of the Borrower or of the REIT which now or hereafter
(i) owns an Unencumbered Asset or an interest in another Guarantor which now or
hereafter owns an Unencumbered Asset or (ii) is a property manager of an
Unencumbered Asset.
"Guaranty" means that certain Guaranty dated the date hereof made by
the REIT and the Guarantors in favor of Agent for the ratable benefit of the
Lenders, as it may be amended or modified and in effect from time to time.
"Hazardous Substances" has the meaning provided in the Environmental
Indemnity.
"Hedge Agreement" means an interest rate swap, cap or other interest
rate management agreement, provided that the entity providing such interest rate
management agreement maintains a credit rating equal or exceeding "A" as rated
by Standard & Poor's Ratings Services or Aa2 by Xxxxx'x Investors Service, Inc.
or such other reputable rating agency reasonably satisfactory to the Agent and
the Required Lenders.
"Improvements" means any building, structure, fixture, addition,
enlargement, extension, modification, repair, replacement or improvement now or
hereafter located or erected on any Real Property Asset.
"Increase Date" is defined in Section 2.5.4(iii).
13
"Indebtedness" of any Person shall mean, without duplication, (i) all
obligations of such Person for borrowed money or for the deferred purchase price
of property or services, (ii) all obligations of such Person evidenced by a
note, bond, debenture or similar instrument, (iii) the face amount of all
Letters of Credit issued for the account of such Person and, without
duplication, all unreimbursed amounts drawn thereunder, (iv) all obligations of
any other Person secured by any Lien on any property owned by such Person,
whether or not such obligations have been assumed, (v) all Contingent
Obligations of such Person, (vi) all Unfunded Liabilities of such Person, (vii)
all Rate Management Obligations of such Person, (viii) all obligations and
liabilities secured by any Lien or mortgage on any property of such Person,
whether or not the same would be classified as a liability on a balance sheet,
(ix) the liability of such Person in respect of banker's acceptances and the
estimated liability under any participating mortgage, convertible mortgage or
similar arrangement, (x) the Capitalized Lease Obligations of such Person, (xi)
all final, nonappealable judgments or decrees by a court or courts or competent
jurisdiction entered against such Person to the extent not covered by insurance,
(xii) all obligations (of the kind described in clauses (i) through (xi) above)
of any partnership in which such Person holds a general partnership interest,
(xiii) all Preferred OP Units and preferred stock of such Person that, in either
case, are redeemable for cash, a cash equivalent, a note receivable or similar
instrument or are convertible to Indebtedness as defined herein (other than
Indebtedness described in clauses (iii), (vi), (x), (xi) or (xiii) of this
definition), and (xiv) all obligations, liabilities, reserves and any other
items which are listed as a liability on a balance sheet of such Person
determined on a consolidated basis in accordance with Agreement Accounting
Principles, but excluding all general contingency reserves and reserves for
deferred income taxes and investment credit.
"Interest Period" means a Eurodollar Interest Period or an Absolute
Rate Interest Period.
"Investment" of a Person means any loan, advance (other than
commission, travel and similar advances to officers and employees made in the
ordinary course of business), extension of credit (other than accounts
receivable arising in the ordinary course of business on terms customary in the
trade) or contribution of capital by such Person; stocks, bonds, mutual funds,
partnership interests, notes, debentures or other securities owned by such
Person; any deposit accounts and certificate of deposit owned by such Person;
and structured notes, derivative financial instruments and other similar
instruments or contracts owned by such Person.
"Invitation for Competitive Bid Quotes" means an Invitation for
Competitive Bid Quotes substantially in the form of Exhibit G hereto, completed
and delivered by the Agent to the Lenders in accordance with Section 2.3.3.
"Joint Venture" means any corporation, partnership or limited liability
company in which the Borrower or the REIT owns singly or together, directly or
indirectly, an economic interest but which is not an Operating Partnership or a
Wholly-Owned Subsidiary. The term "Joint Venture" shall not include SHS.
"LC Fee" is defined in Section 2.19.4.
"LC Issuer" means Bank One (or any subsidiary or affiliate of Bank One
designated by Bank One) in its capacity as issuer of Facility LCs hereunder.
14
"LC Obligations" means, at any time, the sum, without duplication, of
(i) the aggregate undrawn stated amount under all Facility LCs outstanding at
such time plus (ii) the aggregate unpaid amount at such time of all
Reimbursement Obligations.
"LC Payment Date" is defined in Section 2.19.5.
"Leases" means all written leases and rental agreements, registration
cards and agreements and other agreements, whether or not in writing, affecting
the use, enjoyment or occupancy of any Real Property Asset heretofore or
hereafter entered into.
"Lenders" means the lending institutions listed on the signature pages
of this Agreement and their respective successors and assigns.
"Lending Installation" means, with respect to a Lender or the Agent,
the office, branch, subsidiary or affiliate of such Lender or the Agent listed
on the signature pages hereof or on a Schedule or otherwise selected by such
Lender or the Agent pursuant to Section 2.15.
"Letter of Credit" of a Person means a letter of credit or similar
instrument which is issued upon the application of such Person or upon which
such Person is an account party or for which such Person is in any way liable.
"Lien" means any lien (statutory or other), mortgage, pledge,
hypothecation, assignment, deposit arrangement, encumbrance or preference,
priority or other security agreement or preferential arrangement of any kind or
nature whatsoever (including, without limitation, the interest of a vendor or
lessor under any conditional sale, Capitalized Lease or other title retention
agreement).
"Loan" means, with respect to a Lender, such Lender's loan made
pursuant to Article II (or, in the case of a Loan made pursuant to Section 2.2,
any conversion or continuation thereof).
"Loan Documents" means this Agreement, the Facility LC Applications,
any Notes issued pursuant to Section 2.11, the Guaranty, the Environmental
Indemnity, the Subordination of Management Agreement and any other documents or
instruments evidencing, securing or guaranteeing the Loans or LC Obligations.
"Management Agreement" means the Management Agreement identified in the
Subordination of Management Agreement or any replacement thereof entered into in
accordance with the provisions of Section 6.19.
"Market Capitalization Rate" means the appropriate capitalization rate
for manufactured housing communities, as determined by the Agent, which shall be
subject to the approval of the Required Lenders, which rate shall in no event be
less than 8 1/2% or greater than 11%. The Agent may make such determination no
more frequently than twice in any consecutive twelve (12) month period upon
sixty (60) days' prior written notice to the Borrower. If the Borrower has not
submitted reasonably satisfactory evidence to the Agent and the Required Lenders
that a different rate is appropriate, the rate chosen by the Agent shall be
effective as of the end of such sixty (60) day period. If the Borrower and the
REIT are required to submit any financial reports during such sixty (60) day
period, such reports shall include a pro forma statement showing the
15
impact of the Agent's selected rate on the calculations in such reports. As of
the date hereof, the parties agree that the appropriate capitalization rate is
8.75%. The determination by the Agent and Required Lenders of the Market
Capitalization Rate after review of any evidence submitted by the Borrower as
provided above shall be final.
"Market Value" means, with respect to any Asset, a value determined by
the Agent equal to (i) with respect to any Real Property Asset other than a
Non-Income Producing Asset, the quotient of Net Operating Income for the
twelve-month period immediately preceding the determination of the value of such
Real Property Asset divided by the Market Capitalization Rate and (ii) with
respect to Non-Income Producing Assets and any Other Assets, the Book Value
thereof.
"Material Adverse Effect" means any condition which causes or continues
the occurrence of a Default or has a material adverse effect upon (i) the
business, operations, properties, assets, prospects, corporate structure or
condition (financial or otherwise) of the Borrower, the REIT or any of the
Consolidated Entities, taken as a whole, (ii) the ability of the Borrower, the
REIT or the Consolidated Entities to perform any of the Obligations, or (iii)
the validity or enforceability of any of the Loan Documents or the rights or
remedies of the Agent, the LC Issuer or the Lenders thereunder.
"Minimum Capital Expenditure Reserves" means, for any Real Property
Asset other than a Non-Income Producing Asset, an amount equal to $100.00 per
Unit pad or site located on such Real Property Asset for the twelve (12) month
period preceding the calculation that the Borrower or the appropriate
Consolidated Entity shall reserve for capital expenditures on such Real Property
Asset.
"Modify" and "Modification" are defined in Section 2.19.1.
"Monthly Payment Date" means the first day of each calendar month.
"Moody's" means Xxxxx'x Investors Service, Inc.
"Multiemployer Plan" means a Plan maintained pursuant to a collective
bargaining agreement or any other arrangement to which the Borrower or any
member of the Controlled Group is a party to which more than one employer is
obligated to make contributions.
"Net Operating Income" means, with respect to any Real Property Asset,
the Rents derived from the customary operation of such Real Property Asset, less
Operating Expenses attributable to such Real Property Asset, and shall include
only the Rents and other such income actually received and earned, in accordance
with Agreement Accounting Principles, including any rent loss or business
interruption insurance proceeds, water and sewer charges, recreational vehicle
storage charges, and laundry, parking or other vending or concession income,
which are actually received and earned, in accordance with Agreement Accounting
Principles, and Operating Expenses actually paid or payable on an accrual basis
in accordance with Agreement Accounting Principles attributable to such Real
Property Asset during the twelve (12) month period ending at the end of the
calendar month for which the Net Operating Income is being calculated, as set
forth on operating statements satisfactory to the Agent. Notwithstanding the
foregoing, for purposes of calculating Market Value, Net Operating Income will
be based on the
16
twelve (12) month period immediately preceding the date of calculation. If a
Real Property Asset was not owned by the Borrower or a Consolidated Entity
during all of such twelve-month period or was a Non-Income Producing Asset
during a part of such twelve-month period, the Net Operating Income for the
applicable portion of such twelve-month period shall be annualized in a manner
reasonably satisfactory to the Agent. Net Operating Income shall be calculated
in accordance with customary accounting principles applicable to real estate.
Notwithstanding the foregoing, Net Operating Income shall not include (i) any
condemnation or insurance proceeds (other than rent or business interruption
insurance proceeds), (ii) any proceeds resulting from the sale, exchange,
transfer, financing or refinancing of all or any portion of the Real Property
Asset for which it is to be determined, (iii) amounts received from tenants as
security deposits, and (iv) any type of income otherwise included in Net
Operating Income but paid directly by any tenant to a Person other than the
Borrower or a Consolidated Entity or its agents or representatives.
"New Lender" means a Person, approved by the Borrower and the Agent,
that becomes a Lender hereunder pursuant to the provisions of Section 2.5.4.
"Non-Income Producing Assets" means any Real Property Asset which, at
the time such definition is utilized pursuant to any provision of this Agreement
is (i) comprised of vacant land or (ii) under construction and not, either
wholly or partially, open for business and operational.
"Non-Recourse Debt" means any Secured Debt with respect to which the
liability of the Borrower, the REIT and the other Consolidated Entities is
limited to (i) the Assets that secure such Secured Debt and (ii) liability for
customary "non-recourse exceptions," such as fraud, the misapplication of funds,
environmental liabilities, bankruptcy and unpermitted transfers of properties or
ownership interests.
"Non-Use Fee" is defined in Section 2.5.2.
"Non-U.S. Lender" is defined in Section 3.5(iv).
"Notes" means, collectively, all of the Competitive Bid Notes and all
of the Ratable Notes that may be issued hereunder, and "Note" means any one of
the Notes.
"Obligations" means all unpaid principal of and accrued and unpaid
interest on the Loans, all Reimbursement Obligations, all accrued and unpaid
fees and all expenses, reimbursements, indemnities and other obligations of the
Borrower to the Lenders or to any Lender, the Agent, the LC Issuer or any
indemnified party arising under the Loan Documents.
"Operating Expenses" means, with respect to any Real Property Asset,
for any given period (and shall include the pro rata portion for such period of
all such expenses attributable to, but not paid during, such period), all
expenses to be paid or payable, as determined in accordance with Agreement
Accounting Principles, by the Borrower, the REIT or the applicable Consolidated
Entity during that period in connection with the operation of such Real Property
Asset for which it is to be determined, including without limitation:
(i) expenses for cleaning, repair, maintenance, decoration and
painting of such Real Property Asset (including, without limitation,
parking lots and roadways), net of any insurance proceeds in respect of
any of the foregoing;
17
(ii) wages (including overtime payments), benefits, payroll
taxes and all other related expenses for the Borrower's, the REIT's or
other Consolidated Entity's on-site personnel, up to and including (but
not above) the level of the on-site manager, engaged in the repair,
operation and maintenance of such Real Property Asset and service to
tenants and on-site personnel engaged in audit and accounting functions
performed by the Borrower, the REIT or the applicable Consolidated
Entity;
(iii) management fees pursuant to the Management Agreement
providing for fees not exceeding market and approved by the Agent. Such
fees shall include all fees for management services whether such
services are performed at such Real Property Asset or off-site;
(iv) the cost of all electricity, oil, gas, water, steam,
heat, ventilation, air conditioning and any other energy, utility or
similar item and the cost of building and cleaning supplies;
(v) the cost of any leasing commissions and tenant concessions
(other than concessions reflected in reduced Rent) or tenant
improvements (unless otherwise reserved for) payable by the Borrower,
the REIT or any Consolidated Entity pursuant to any leases which are in
effect for such Real Property Asset at the commencement of that period
as such costs are recognized in accordance with Agreement Accounting
Principles, but on no less than a straight line basis over the expected
term of the respective tenancy, inclusive of any renewal or extension
or similar options (but in no event over a term longer than the greater
of (a) the actual remaining term of the respective tenancy or (b) seven
(7) years);
(vi) rent, liability, casualty, fidelity, errors and
omissions, dram shop liability, workmen's compensation and other
insurance premiums;
(vii) legal, accounting and other professional fees and
expenses;
(viii) the cost of all equipment to be used in the ordinary
course of business, which is not capitalized in accordance with
Agreement Accounting Principles;
(ix) real estate, personal property and other taxes;
(x) advertising and other marketing costs and expenses;
(xi) casualty losses to the extent not reimbursed by an
independent third party; and
(xii) all amounts that should be reserved, as reasonably
determined by the Borrower or the applicable Consolidated Entity, with
approval by the Agent in its reasonable discretion, for repair or
maintenance of the Real Property Asset and to maintain the value of the
Real Property Asset including replacement reserves equal to the greater
of (a) the reserves provided for in the Borrower's or the applicable
Consolidated Entity's capital budget and (b) $100.00 per Unit pad or
site.
18
Notwithstanding the foregoing, Operating Expenses shall not include (1)
depreciation or amortization or any other non-cash item of expense unless
otherwise determined by the Agent (2) interest, principal, fees, costs and
expense reimbursements of the Agent and Lenders in administering the Loan but
not in exercising any of its rights under this Agreement or the Loan Documents;
or (3) any expenditure (other than leasing commissions, tenant concessions and
improvements, and replacement reserves) which is properly treatable as a capital
item under Agreement Accounting Principles.
"Operating Partnership" means those partnerships and limited liability
companies set forth on Schedule 3, as such Schedule may be amended or
supplemented from time to time, and any partnership or limited liability company
in which the Borrower or the REIT owns, singly or together, directly or
indirectly, a majority or all of the economic interest and either the Borrower
or the REIT, either directly or indirectly, is the sole managing general
partner, manager or sole member as applicable. The term "Operating Partnership"
does not include the Borrower.
"OP Units" means the Common OP Units and the Preferred OP Units.
"Origen" means Origen Financial, LLC.
"Original Loan Agreement" means that certain Amended and Restated
Senior Unsecured Line of Credit Agreement dated as of July 1, 1999 among the
Borrower, the REIT, Bank One (formerly, The First National Bank of Chicago), as
Agent and the Co-Lenders party thereto.
"Other Assets" means all Assets of a Person that are not Real Property
Assets.
"Other Taxes" is defined in Section 3.5(ii).
"Outstanding Credit Exposure" means, as to any Lender at any time, the
sum of (i) the aggregate principal amount of its Loans outstanding at such time,
plus (ii) an amount equal to its Pro Rata Share of the LC Obligations at such
time.
"Participants" is defined in Section 12.2.1.
"PBGC" means the Pension Benefit Guaranty Corporation, or any successor
thereto.
"Permitted Investments" means, at any time, (i) the Permitted Origen
Investment, (ii) the existing Investments described in Schedule 12, (iii)
Investments in Operating Partnerships that are wholly owned and controlled by
the Borrower or the REIT, either directly or indirectly, and (iv) the
Investments identified below (the term "Investments" shall, for purposes hereof,
include any ownership of any of the categories of Assets identified below),
provided that (a) the aggregate amount of all of the Investments identified
below shall at all times be less than 25% of the Market Value of all of the
Borrower's Assets as of the date of calculation and (b) the aggregate amount of
each of the categories of Investments identified below shall be less than the
specified percentage of the Market Value of all of the Borrower's Assets as of
the date of calculation:
19
Permitted Investment Maximum of Market Value of all of
-------------------- ----------------------------------
Borrower's Assets
-----------------
Investments in Undeveloped Land and Construction in Progress: 15%
Investments in Qualified Secured Receivables: 10%
Investments in (1) Operating Partnerships in which the Borrower and
the REIT own, singly or together, a majority of the (but not the
entire) economic interest and either the Borrower or the REIT, either
directly or indirectly, is the sole managing general partner or
manager, (2) SHS and (3) SunChamp, LLC: 10%
Investments in Joint Ventures, including any Investment in Origen,
whether directly or indirectly and including SHS's investments in
Origen except for its $15,000,000 equity Investment in Origen: 5%
Investments in manufactured housing units and mobile homes that are
personal property and are not deemed fixtures or real property under
the law of the jurisdiction in which they are located: 2%
Other Investments relating to Borrower's core business of developing,
constructing, owning, leasing to consumers, operating and selling or
otherwise disposing of manufactured home communities: 2%
For purposes of calculating the foregoing, the amount of each Permitted
Investment will be deemed to be (A) in the case of SHS, the Book Value of such
Investments less SHS's Investments in Origen (but not less than zero), (B) in
the case of an Investment (other than an Investment in a Joint Venture) acquired
from a third party, the original acquisition price of such Investment, verified
by the Borrower to the satisfaction of the Agent, (C) in the case of a Joint
Venture, the sum of (x) the Book Value of such Investment plus (y) an amount
equal to the maximum additional amounts (if any) that the Borrower, the REIT or
any other Consolidated Entity may be obligated (without its consent) to invest
therein (whether as a mandatory capital contribution or otherwise), without
regard to whether such additional amounts have actually been invested, and (D)
in the case of any other Investment, its Book Value. All Permitted Investments
shall be subject to the requirements of Section 6.3. An Investment in a Joint
Venture pursuant to which the Borrower, the REIT or a Consolidated Entity may be
obligated (without its consent) to invest unlimited additional amounts (whether
as a capital contribution or otherwise) shall not be a Permitted Investment.
20
"Permitted Liens" is defined in Section 6.25.
"Permitted Mortgage Debt" means any Secured Debt of the Borrower, the
REIT or any Consolidated Entity that is permitted under this Agreement.
"Permitted Origen Investment" means any Investment by Borrower in
Origen, whether directly or indirectly and including SHS's Investments in
Origen, provided that (a) the maximum aggregate amount of any equity Investment
in Origen, whether directly or indirectly and including SHS's equity Investments
in Origen, shall not exceed $20,000,000 and (b) all Investments in Origen,
whether directly or indirectly and including SHS's Investments in Origen in
excess of $15,000,000, shall be subject to the limitations set forth in clause
(iv) of the definition of "Permitted Investments."
"Person" means any natural person, corporation, firm, joint venture,
partnership, limited liability company, association, enterprise, trust or other
entity or organization, or any government or political subdivision or any
agency, department or instrumentality thereof.
"Plan" means an employee pension benefit plan which is covered by Title
IV of ERISA or subject to the minimum funding standards under Section 412 of the
Code as to which the Borrower or any member of the Controlled Group may have any
liability.
"Preferred OP Units" means the class of convertible preferred OP Units
as defined in the Borrower's Partnership Agreement.
"Prime Rate" means a rate per annum equal to the prime rate of interest
announced from time to time by Bank One or its parent (which is not necessarily
the lowest rate charged to any customer), changing when and as said prime rate
changes.
"Pro Rata Share" means, with respect to a Lender, a portion equal to a
fraction the numerator of which is such Lender's Commitment and the denominator
of which is the Aggregate Commitment.
"Property" of a Person means any and all property, whether real,
personal, tangible, intangible, or mixed, of such Person, or other assets owned,
leased or operated by such Person.
"Purchasers" is defined in Section 12.3.1.
"Qualified Secured Receivables" means receivables that are evidenced by
a note or bond and secured by a mortgage, deed of trust, security agreement or
other similar instrument that encumbers either (i) fee interests in real
property used principally for manufactured housing communities or (ii)
manufactured houses.
"Quarterly Payment Date" means the first day of each January, April,
July and October.
"Rating Agencies" means both Standard & Poor's Ratings Services and
Xxxxx'x Investor Service, Inc. If either of such agencies discontinues its
rating of the Borrower or its ratings of real estate investment trusts
generally, the Agent and the Required Lenders shall, within six (6) months of
such discontinuance, determine another nationally recognized statistical
21
ratings agency that assigns a rating to the Borrower (a "Substitute Rating
Agency"), and the term Rating Agencies shall include such Substitute Rating
Agency. During any time that only one Rating Agency is assigning a rating to the
Borrower, that Rating Agency's rating shall be used for all calculations under
this Agreement.
"Ratable Advance" means a borrowing hereunder (i) made by the Lenders
on the same Borrowing Date, or (ii) converted or continued by the Lenders on the
same date of conversion or continuation, consisting, in either case, of the
aggregate amount of the several Ratable Loans of the same Type and, in the case
of Eurodollar Ratable Loans, for the same Interest Period.
"Ratable Borrowing Notice" is defined in Section 2.2.3.
"Ratable Loan" means a Loan made by a Lender pursuant to Section 2.2
hereof.
"Ratable Note" means any promissory note issued at the request of a
Lender pursuant to Section 2.11 to evidence its Ratable Loans in the form of
Exhibit E-1 hereto.
"Rate Management Obligations" of a Person means any and all obligations
of such Person, whether absolute or contingent and howsoever and whensoever
created, arising, evidenced or acquired (including all renewals, extensions and
modifications thereof and substitutions therefor), under (i) any and all Rate
Management Transactions, and (ii) any and all cancellations, buy backs,
reversals, terminations or assignments of any Rate Management Transactions.
"Rate Management Transaction" means any transaction (including an
agreement with respect thereto) now existing or hereafter entered by the
Borrower (including any Hedge Agreement) which is a rate swap, basis swap,
forward rate transaction, commodity swap, commodity option, equity or equity
index swap, equity or equity index option, bond option, interest rate option,
foreign exchange transaction, cap transaction, floor transaction, collar
transaction, forward transaction, currency swap transaction, cross-currency rate
swap transaction, currency option or any other similar transaction (including
any option with respect to any of these transactions) or any combination
thereof, whether linked to one or more interest rates, foreign currencies,
commodity prices, equity prices or other financial measures.
"Real Property Assets" means the real property set forth on Schedules 1
and 2, as such Schedules may be amended or supplemented from time to time, and
all real property owned or leased, directly or indirectly, wholly or partly, by
the Borrower, the REIT, or any other Consolidated Entity.
"Recourse Debt" means any Secured Debt that is not Non-Recourse Debt.
"Regulation D" means Regulation D of the Board of Governors of the
Federal Reserve System as from time to time in effect and any successor thereto
or other regulation or official interpretation of said Board of Governors
relating to reserve requirements applicable to member banks of the Federal
Reserve System.
"Regulation U" means Regulation U of the Board of Governors of the
Federal Reserve System as from time to time in effect and any successor or other
regulation or official
22
interpretation of said Board of Governors relating to the extension of credit by
banks for the purpose of purchasing or carrying margin stocks applicable to
member banks of the Federal Reserve System.
"Reimbursement Obligations" means, at any time, the aggregate of all
obligations of the Borrower then outstanding under Section 2.19 to reimburse the
LC Issuer for amounts paid by the LC Issuer in respect of any one or more
drawings under Facility LCs.
"REIT" means Sun Communities, Inc., a Maryland corporation.
"Rents" means all income, rents, additional rents, revenues, issues and
profits (including all oil and gas or other mineral royalties and bonuses), golf
revenues, and all pass-throughs and tenant's required contributions for taxes,
maintenance costs, tenant improvements, leasing commissions, capital
expenditures and other items including without limitation, all revenues and
credit card receipts collected from recreation facilities, vending machines and
concessions and all Accounts Receivable (without duplication) from the Real
Property Assets.
"Reportable Event" means a reportable event as defined in Section 4043
of ERISA and the regulations issued under such section, with respect to a Plan,
excluding, however, such events as to which the PBGC has by regulation waived
the requirement of Section 4043(a) of ERISA that it be notified within 30 days
of the occurrence of such event, provided, however, that a failure to meet the
minimum funding standard of Section 412 of the Code and of Section 302 of ERISA
shall be a Reportable Event regardless of the issuance of any such waiver of the
notice requirement in accordance with either Section 4043(a) of ERISA or Section
412(d) of the Code.
"Reports" is defined in Section 9.6.
"Required Lenders" means Lenders in the aggregate having at least
66-2/3% of the Aggregate Commitment or, if the Aggregate Commitment has been
terminated, Lenders in the aggregate holding at least 66-2/3% of the aggregate
unpaid principal amount of the Aggregate Outstanding Credit Exposure, but in no
event shall Required Lenders be less than two (2) Lenders.
"Reserve Requirement" means, with respect to an Interest Period, the
maximum aggregate reserve requirement (including all basic, supplemental,
marginal and other reserves) which is imposed under Regulation D on Eurocurrency
liabilities.
"Response Date" is defined in Section 2.17.
"Schedule" refers to a specific schedule to this Agreement, unless
another document is specifically referenced.
"Seasonal RV Sites" is defined in Section 6.33.
"Section" means a numbered section of this Agreement, unless another
document is specifically referenced.
23
"Secured Debt" means, with respect to any Person, all Indebtedness that
is secured, in whole or in part, by any Assets of such Person and shall include,
as applicable, Permitted Mortgage Debt.
"Selling Lender" is defined in Section 2.5.4(iii).
"Settlement Date" is defined in Section 2.5.4(iii).
"SHS" means Sun Home Services, Inc., a corporation in which the
Borrower owns 100% of the preferred stock, entitling the Borrower to 95% of the
operating cash flow of SHS.
"Significant Consolidated Entity" means (i) any Consolidated Entity
that has Assets having an aggregate Market Value in excess of $5,000,000 or (ii)
Consolidated Entities that, over the term of this Agreement, are the subject of
a proceeding or other event described in Section 7.5 or 7.6 and that have, in
the aggregate, Assets having an aggregate Market Value in excess of $5,000,000.
"Single Employer Plan" means a Plan maintained by the Borrower or any
member of the Controlled Group for employees of the Borrower or any member of
the Controlled Group.
"Subordination of Management Agreement" means a Subordination of
Management Agreement substantially in the form set forth as Exhibit I hereto.
"Subsidiary" of a Person means (i) any corporation more than 50% of the
outstanding securities having ordinary voting power of which shall at the time
be owned or controlled, directly or indirectly, by such Person or by one or more
of its Subsidiaries or by such Person and one or more of its Subsidiaries, or
(ii) any partnership, limited liability company, association, joint venture or
similar business organization more than 50% of the ownership interests having
ordinary voting power of which shall at the time be so owned or controlled.
Unless otherwise expressly provided, all references herein to a "Subsidiary"
shall mean a Subsidiary of the Borrower.
"Substantial Assets" means Real Property Assets (other than "Replaced
Assets," as defined below) of the Borrower, the REIT and any other Consolidated
Entity which, in the aggregate over any period of 36 consecutive months, either
(i) have a Market Value that exceeds 15% of the Market Value of all Real
Property Assets or (ii) contributed more than 15% of the consolidated Net
Operating Income of the Borrower, the REIT and the other Consolidated Entities
derived from all Real Property Assets. The determinations in clauses (i) and
(ii) above of the Market Value or Net Operating Income of any Real Property
Asset that is sold, transferred, leased or otherwise disposed of shall be made
at the time of such sale, lease, transfer or other disposition based upon the
then most recently available financial statements. The determination in clauses
(i) and (ii) above of the Market Value of all Real Property Assets and Net
Operating Income of the Borrower, the REIT and the other Consolidated Entities
from all Real Property Assets shall be made at the time that the determination
of "Substantial Assets" is made hereunder, based upon the most recently
available financial assets. For purposes of the foregoing, a "Replaced Asset"
means any Real Property Asset that is sold, leased, transferred or otherwise
disposed of within the applicable 36-month period if and to the extent that,
within the six (6) month period following the consummation of such sale, lease,
transfer or other
24
disposition, the Borrower, the REIT or any Consolidated Entity acquires one or
more similar Real Property Assets; in such event, the Real Property Asset so
sold, leased, transferred or otherwise disposed of shall be deemed a "Replaced
Asset" to the extent of the Market Value and Net Operating Income of the
replacement Real Property Asset acquired during such six-month period, as
determined at the time that any determination of "Substantial Assets" is made
hereunder, based upon the most recently available financial statements.
"Substantial Portion" means, with respect to the Assets of the
Borrower, the REIT and the Consolidated Entities, Assets which represent more
than 15% of the Market Value of the Assets of the Borrower, the REIT and the
Consolidated Entities or which are responsible for more than 15% of Consolidated
Net Income, in each case, as would be shown in the consolidated financial
statements of the Borrower, the REIT and the Consolidated Entities, as at the
beginning of the twelve-month period ending with the month in which such
determination is made (or if financial statements have not been delivered
hereunder for that month which begins the twelve-month period, then the
financial statements delivered hereunder for the quarter ending immediately
prior to that month).
"Substitute Rating Agency" is defined in the definition of "Rating
Agencies."
"Taxes" means any and all present or future taxes, duties, levies,
imposts, deductions, charges or withholdings, and any and all liabilities with
respect to the foregoing, but excluding Excluded Taxes and Other Taxes.
"Title Searches" is defined in Section 6.13.
"Total Unencumbered Assets" means, at any date, without duplication,
the sum of the following wholly-owned Assets of the Borrower and the Guarantors,
provided such Assets are free and clear of all Liens except for those described
in Sections 6.25(ii), (iii) and (iv), all as determined at such date: (i) the
Market Value of all Unencumbered Assets; (ii) all cash on hand and the Book
Value of all Investments described in clauses (i) through (vii) of Section 6.32;
(iii) the Book Value of all Qualified Secured Receivables, but only to the
extent fully secured by first mortgages or deeds of trust on manufactured
housing communities or manufactured homes; (iv) the Book Value of any
Undeveloped Land that does not constitute an Unencumbered Asset; and (v) the
Book Value of all Other Assets not described in clauses (i), (ii) and (iii)
above, except (a) Investments (whether equity or loans or advances) in or to any
Person (other than those Investments described in clauses (ii) and (iii) above)
and (b) receivables (whether secured or otherwise) (other than those described
in clauses (ii) and (iii) above); provided, however, that in no event shall
Total Unencumbered Assets exceed the quotient obtained by dividing (1) the sum
of the amounts under clauses (i) and (ii) above by (2) seventy percent (70%).
"Transferee" is defined in Section 12.4.
"Type" means an Absolute Rate Advance, a Eurodollar Bid Rate Advance or
a Eurodollar Ratable Advance.
"UCC Searches" is defined in Section 4.1.4.
25
"Undeveloped Land" means any vacant or unimproved non-income producing
Real Property Asset.
"Unencumbered Assets" means those Real Property Assets set forth on
Schedule 1, as such Schedule may be amended or supplemented from time, (i)
against which there are no liens or encumbrances except for Permitted Liens,
(ii) with respect to which the Borrower has complied with the applicable
requirements of Section 4.1, (iii) with respect to which the Borrower, the REIT
or a Guarantor (individually or collectively) is the sole owner, both of record
and beneficially, (iv) which do not constitute Undeveloped Land, unless such
Undeveloped Land is intended for development as expansion of another improved
Unencumbered Asset, and (v) which the Agent and the Required Lenders have agreed
in writing are to be deemed Unencumbered Assets for purposes of this Agreement
pursuant to Section 2.21. The Borrower, the REIT or the other Consolidated
Entities may own other Real Property Assets against which there are no liens or
encumbrances, but Real Property Assets shall constitute Unencumbered Assets only
as provided in the preceding sentence.
"Unfunded Liabilities" means the amount (if any) by which the present
value of all vested and unvested accrued benefits under all Single Employer
Plans exceeds the fair market value of all such Plan assets allocable to such
benefits, all determined as of the then most recent valuation date for such
Plans using PBGC actuarial assumptions for single employer plan terminations.
"Unmatured Default" means an event which but for the lapse of time or
the giving of notice, or both, would constitute a Default.
"Unit" means any mobile home units or manufactured housing units.
"Unsecured Debt" means, with respect to a Person, all Indebtedness
(including, in the case of the Borrower, the Obligations hereunder) that is not
Secured Debt.
"Unsecured Debt Rating" means with respect to a Person, the rating
assigned by the Rating Agencies to such Person's long term unsecured debt
obligations.
"Wholly-Owned Subsidiary" of a Person means (i) any Subsidiary all of
the outstanding voting securities of which shall at the time be owned or
controlled, directly or indirectly, (a) by such Person or one or more
Wholly-Owned Subsidiaries of such Person, (b) by such Person and one or more
Wholly-Owned Subsidiaries of such Person or (c) if such Person is the Borrower
or the REIT, collectively by the Borrower or the REIT, or (ii) any partnership,
limited liability company, association, joint venture or similar business
organization 100% of the ownership interests having ordinary voting power of
which shall at the time be so owned or controlled.
The foregoing definitions shall be equally applicable to both the
singular and plural forms of the defined terms.
26
ARTICLE II
THE CREDITS
2.1. The Facility.
2.1.1 Description of Facility. The Lenders grant to the
Borrower a revolving credit facility pursuant to which, and upon the
terms and subject to the conditions herein set forth:
(i) each Lender severally agrees to make Ratable
Loans to the Borrower in accordance with Section 2.2;
(ii) the LC Issuer will issue, and each Lender will
participate in, Facility LCs in accordance with Section 2.19;
and
(iii) each Lender may, in its sole discretion, make
bids to make Competitive Bid Loans to the Borrower in
accordance with Section 2.3.
2.1.2 Amount of Facility. In no event may the aggregate
principal amount of all outstanding Credit Extensions (including
Ratable Advances, Competitive Bid Advances and LC Obligations) exceed
the Aggregate Commitment.
2.1.3 Availability of Facility. Subject to the terms of this
Agreement, the facility is available from the date hereof to the
Facility Termination Date, and the Borrower may borrow, repay and
reborrow at any time prior to the Facility Termination Date. The
Commitments to lend hereunder shall expire on the Facility Termination
Date.
2.1.4 Repayment of Facility. The Aggregate Outstanding Credit
Exposure and all other unpaid Obligations shall be paid in full by the
Borrower on the Facility Termination Date.
2.2. Ratable Advances.
2.2.1 Ratable Advances. Each Ratable Advance hereunder shall
consist of Loans made from the several Lenders ratably according to
their Pro Rata Shares. The aggregate outstanding amount of Competitive
Bid Advances shall reduce each Lender's Commitment ratably in the
proportion such Lender's Commitment bears to the Aggregate Commitment
regardless of which Lender or Lenders make such Competitive Bid
Advances.
2.2.2 Types of Ratable Advances. The Ratable Advances may be
Floating Rate Advances or Eurodollar Ratable Advances, or a combination
thereof, selected by the Borrower in accordance with Section 2.2.3.
2.2.3 Method of Selecting Types and Interest Periods for
Ratable Advances. The Borrower shall select the Type of Ratable Advance
and, in the case of each Eurodollar Ratable Advance, the Interest
Period applicable thereto, from time to time. The Borrower
27
shall give the Agent irrevocable notice (a "Ratable Borrowing Notice")
not later than 10:00 a.m. (Chicago time) at least one Business Day
before the Borrowing Date of each Floating Rate Advance and at least
three Business Days before the Borrowing Date for each Eurodollar
Ratable Advance. Notwithstanding the foregoing, a Ratable Borrowing
Notice for a Floating Rate Advance may be given not later than 15
minutes after the time which the Borrower is required to reject one or
more bids offered in connection with an Absolute Rate Auction pursuant
to Section 2.3.6 and a Ratable Borrowing Notice for a Eurodollar
Ratable Advance may be given not later than 15 minutes after the time
the Borrower is required to reject one or more bids offered in
connection with a Eurodollar Auction pursuant to Section 2.3.6. A
Ratable Borrowing Notice shall specify:
(i) the Borrowing Date, which shall be a Business
Day, of such Ratable Advance,
(ii) the aggregate amount of such Ratable Advance,
(iii) the Type of Ratable Advance selected, and
(iv) in the case of each Eurodollar Ratable Advance,
the Interest Period applicable thereto (which may not end
after the Facility Termination Date).
2.2.4 Conversion and Continuation of Outstanding Ratable
Advances. Floating Rate Advances shall continue as Floating Rate
Advances unless and until such Floating Rate Advances are either
converted into Eurodollar Ratable Advances in accordance with this
Section 2.2.4 or are repaid in accordance with Section 2.7. Each
Eurodollar Ratable Advance shall continue as a Eurodollar Ratable
Advance until the end of the then applicable Eurodollar Interest Period
therefor, at which time such Eurodollar Ratable Advance shall be
automatically converted into a Floating Rate Advance unless (x) such
Eurodollar Ratable Advance is or was repaid in accordance with Section
2.7 or (y) the Borrower shall have given the Agent a
Conversion/Continuation Notice requesting that, at the end of such
Eurodollar Interest Period, such Eurodollar Ratable Advance continue as
a Eurodollar Ratable Advance for the same or another Eurodollar
Interest Period. Subject to the terms of Section 2.6, the Borrower may
elect from time to time to convert all or any part of a Floating Rate
Advance into a Eurodollar Ratable Advance. The Borrower shall give the
Agent irrevocable notice (a "Conversion/Continuation Notice") of each
conversion of a Floating Rate Advance into a Eurodollar Ratable
Advance, or continuation of a Eurodollar Ratable Advance, not later
than 10:00 a.m. (Chicago time) at least three Business Days prior to
the date of the requested conversion or continuation, specifying:
(i) the requested date, which shall be a Business
Day, of such conversion or continuation,
(ii) the aggregate amount and Type of the Ratable
Advance which is to be converted or continued, and
28
(iii) the amount of such Ratable Advance(s) which is
to be converted or continued as a Eurodollar Ratable Advance
and the duration of the Eurodollar Interest Period applicable
thereto.
2.3. Competitive Bid Advances.
2.3.1 Competitive Bid Option. In addition to Ratable Advances
pursuant to Section 2.2, but subject to the terms and conditions of
this Agreement (including, without limitation, the limitation set forth
in Section 2.1.2 as to the maximum aggregate principal amount of all
outstanding Credit Extensions hereunder), and provided further that the
Borrower's Unsecured Debt Rating is at least BBB- or greater or Baa3 or
greater, as assigned by the applicable Rating Agencies, the Borrower
may, as set forth in this Section 2.3, request the Lenders, prior to
the Facility Termination Date, to make offers to make Competitive Bid
Advances to the Borrower. Each Lender may, but shall have no obligation
to, make such offers and the Borrower may, but shall have no obligation
to, accept any such offers in the manner set forth in this Section 2.3.
Competitive Bid Loans shall be evidenced by the Competitive Bid Notes.
In no event shall the aggregate of all Competitive Bid Loans
outstanding at any time exceed fifty percent (50%) of the Aggregate
Commitment. Each Competitive Bid Advance shall be repaid by the
Borrower on the last day of the Interest Period applicable thereto.
2.3.2 Competitive Bid Quote Request. When the Borrower wishes
to request offers to make Competitive Bid Loans under this Section 2.3,
it shall transmit to the Agent by telecopy a Competitive Bid Quote
Request so as to be received no later than (a) 10:00 a.m. (Chicago
time) at least five Business Days prior to the Borrowing Date proposed
therein, in the case of a Eurodollar Auction, or (b) 9:00 a.m. (Chicago
time) at least one Business Day prior to the Borrowing Date proposed
therein, in the case of an Absolute Rate Auction, specifying:
(i) the proposed Borrowing Date, which shall be a
Business Day, for such Competitive Bid Advance,
(ii) the aggregate principal amount of such
Competitive Bid Advance,
(iii) whether the Competitive Bid Quotes requested
are to set forth a Competitive Bid Margin or an Absolute Rate,
or both, and
(iv) the Interest Period applicable thereto (which
may not end after the Facility Termination Date).
The Borrower may request offers to make Competitive Bid Loans for more
than one Interest Period and for a Eurodollar Auction and an Absolute
Rate Auction in a single Competitive Bid Quote Request. No Competitive
Bid Quote Request shall be given within five (5) Business Days (or such
other number of days as the Borrower and the Agent may agree) of any
other Competitive Bid Quote Request. A Competitive Bid Quote Request
that does not conform substantially to the format of Exhibit F hereto
shall be rejected, and the Agent shall promptly notify the Borrower of
such rejection.
29
2.3.3 Invitation for Competitive Bid Quotes. Promptly and in
any event before the close of business on the same Business Day of
receipt of a Competitive Bid Quote Request that is not rejected
pursuant to Section 2.3.2, the Agent shall send to each of the Lenders
by telecopy an Invitation for Competitive Bid Quotes substantially in
the form of Exhibit G hereto, which shall constitute an invitation by
the Borrower to each Lender to submit Competitive Bid Quotes offering
to make the Competitive Bid Loans to which such Competitive Bid Quote
Request relates in accordance with this Section 2.3.
2.3.4 Submission and Contents of Competitive Bid Quotes.
(i) Each Lender may, in its sole discretion, submit a
Competitive Bid Quote containing an offer or offers to make
Competitive Bid Loans in response to any Invitation for
Competitive Bid Quotes. Each Competitive Bid Quote must comply
with the requirements of this Section 2.3.4 and must be
submitted to the Agent by telecopy at its offices specified in
or pursuant to Article XIII not later than (a) 2:00 p.m.
(Chicago time) at least four Business Days prior to the
proposed Borrowing Date, in the case of a Eurodollar Auction
or (b) 9:00 a.m. (Chicago time) on the proposed Borrowing
Date, in the case of an Absolute Rate Auction (or, in either
case upon reasonable prior notice to the Lenders, such other
time and date as the Borrower and the Agent may agree);
provided that Competitive Bid Quotes submitted by Bank One may
only be submitted if the Agent or Bank One notifies the
Borrower of the terms of the offer or offers contained therein
not later than 15 minutes prior to the latest time at which
the relevant Competitive Bid Quotes must be submitted by the
other Lenders. Subject to Articles IV and VIII, any
Competitive Bid Quote so made shall be irrevocable except with
the written consent of the Agent given on the instructions of
the Borrower.
(ii) Each Competitive Bid Quote shall be in
substantially the form of Exhibit H hereto and shall in any
case specify:
(a) the proposed Borrowing Date, which shall
be the same as that set forth in the applicable
Invitation for Competitive Bid Quotes,
(b) the principal amount of the Competitive
Bid Loan for which each such offer is being made,
which principal amount (1) may be greater than, less
than or equal to the Commitment of the quoting
Lender, (2) must be at least $10,000,000 and an
integral multiple of $1,000,000, and (3) may not
exceed the principal amount of Competitive Bid Loans
for which offers were requested,
(c) in the case of a Eurodollar Auction, the
Competitive Bid Margin offered for each such
Competitive Bid Loan,
(d) the minimum amount, if any, of the
Competitive Bid Loan which may be accepted by the
Borrower,
(e) in the case of an Absolute Rate Auction,
the Absolute Rate offered for each such Competitive
Bid Loan,
30
(f) the maximum aggregate amount, if any, of
Competitive Bid Loans offered by the quoting Lender
which may be accepted by the Borrower, and
(g) the identity of the quoting Lender,
provided that such Competitive Bid Loan may be funded
by such Lender's Designated Lender as provided in
Section 2.3.9, regardless of whether that is
specified in the Competitive Bid Quote.
(iii) The Agent shall reject any Competitive Bid
Quote that:
(a) is not substantially in the form of
Exhibit H hereto or does not specify all of the
information required by Section 2.3.4(ii),
(b) contains qualifying, conditional or
similar language, other than any such language
contained in Exhibit H hereto,
(c) proposes terms other than or in addition
to those set forth in the applicable Invitation for
Competitive Bid Quotes, or
(d) arrives after the time set forth in
Section 2.3.4(i).
If any Competitive Bid Quote shall be rejected pursuant to
this Section 2.3.4(iii), then the Agent shall notify the
relevant Lender of such rejection as soon as practical.
2.3.5 Notice to Borrower. The Agent shall promptly notify the
Borrower of the terms (i) of any Competitive Bid Quote submitted by a
Lender that is in accordance with Section 2.3.4 and (ii) of any
Competitive Bid Quote that amends, modifies or is otherwise
inconsistent with a previous Competitive Bid Quote submitted by such
Lender with respect to the same Competitive Bid Quote Request. Any such
subsequent Competitive Bid Quote shall be disregarded by the Agent
unless such subsequent Competitive Bid Quote specifically states that
it is submitted solely to correct a manifest error in such former
Competitive Bid Quote. The Agent's notice to the Borrower shall specify
the aggregate principal amount of Competitive Bid Loans for which
offers have been received for each Interest Period specified in the
related Competitive Bid Quote Request and the respective principal
amounts and Eurodollar Bid Rates or Absolute Rates, as the case may be,
so offered.
2.3.6 Acceptance and Notice by Borrower. Not later than (i)
6:00 p.m. (Chicago time) at least four Business Days prior to the
proposed Borrowing Date, in the case of a Eurodollar Auction or (ii)
11:00 a.m. (Chicago time) on the proposed Borrowing Date, in the case
of an Absolute Rate Auction (or, in either case upon reasonable prior
notice to the Lenders, such other time and date as the Borrower and the
Agent may agree), the Borrower shall notify the Agent of its acceptance
or rejection of the offers so notified to it pursuant to Section 2.3.5;
provided, however, that the failure by the Borrower to give such notice
to the Agent shall be deemed to be a rejection of all such offers. In
the case of acceptance, such notice (a "Competitive Bid Borrowing
Notice") shall specify the aggregate principal amount
31
of offers for each Interest Period that are accepted. The Borrower may
accept any Competitive Bid Quote in whole or in part (subject to the
terms of Section 2.3.4(ii)(d)); provided that:
(i) the aggregate principal amount of each
Competitive Bid Advance may not exceed the applicable amount
set forth in the related Competitive Bid Quote Request,
(ii) acceptance of offers may only be made on the
basis of ascending Eurodollar Bid Rates or Absolute Rates, as
the case may be, and
(iii) the Borrower may not accept any offer that is
described in Section 2.3.4(iii) or that otherwise fails to
comply with the requirements of this Agreement.
2.3.7 Allocation by Agent. If offers are made by two or more
Lenders with the same Eurodollar Bid Rates or Absolute Rates, as the
case may be, for a greater aggregate principal amount than the amount
in respect of which offers are accepted for the related Interest
Period, the principal amount of Competitive Bid Loans in respect of
which such offers are accepted shall be allocated by the Agent among
such Lenders as nearly as possible (in such multiples, not greater than
$1,000,000, as the Agent may deem appropriate) in proportion to the
aggregate principal amount of such offers; provided, however, that no
Lender shall be allocated a portion of any Competitive Bid Advance
which is less than the minimum amount which such Lender has indicated
that it is willing to accept. Allocations by the Agent of the amounts
of Competitive Bid Loans shall be conclusive in the absence of manifest
error. The Agent shall promptly, but in any event on the same Business
Day, notify each Lender of its receipt of a Competitive Bid Borrowing
Notice and the aggregate principal amount of such Competitive Bid
Advance allocated to each participating Lender.
2.3.8 Administration Fee. The Borrower hereby agrees to pay to
the Agent an administration fee of $1,500 for each Competitive Bid
Quote Request transmitted by the Borrower to the Agent pursuant to
Section 2.3.2. Such administration fee shall be payable in arrears on
each Monthly Payment Date hereafter and on the Facility Termination
Date (or such earlier date on which the Aggregate Commitment shall
terminate or be cancelled) for any period then ending for which such
fee, if any, shall not have been theretofore paid.
2.3.9 Designated Lenders. A Lender may designate one or more
Designated Lenders to fund a Competitive Bid Loan on its behalf as
described in Section 2.3.4(ii)(g). Any Designated Lender which funds a
Competitive Bid Loan shall on and after the time of such funding become
the obligee under such Competitive Bid Loan and be entitled to receive
payment thereof when due. No Lender shall be relieved of its
obligations to fund a Competitive Bid Loan, and no Designated Lender
shall assume such obligations, prior to the time such Competitive Bid
Loan is funded.
32
2.3.10 Designation of Lender to Make Competitive Bid Loans.
Any Lender (each a "Designating Lender") may at any time designate one
or more Designated Lenders to fund Competitive Bid Loans which the
Designating Lender is required to fund, subject to the terms of this
Section 2.3.10. The provisions in Section 12.3.1 and 12.3.2 shall not
apply to such designation. No Lender shall be entitled to make more
than two such designations. The parties to each such designation shall
execute and deliver to the Agent a Designation Agreement in the form of
Exhibit A. From and after the effective date specified in the
Designation Agreement, the Designated Lender shall become a party to
this Agreement with a right to make Competitive Bid Loans on behalf of
its Designating Lender pursuant to this Section 2.3.10 after the
Borrower has accepted a Competitive Bid (or a portion thereof) of the
Designating Lender. Each Designating Lender shall serve as the agent
for the Designated Lender and shall on behalf of the Designated Lender
give and receive all communications and notices and take all actions
hereunder, including without limitation votes, approvals, waivers,
consents and amendments under or relating to this Agreement or the
other Loan Documents. Any such notice, communications, vote approval,
waiver, consent or amendment shall be signed by the Designating Lender
as agent for the Designated Lender and shall not be signed by the
Designated Lender. The Borrower, the Agent, the LC Issuer and the
Lenders may rely thereon without any requirement that the Designated
Lender sign or acknowledge the same, and without any specific
designation that the Designating Lender is signing in agency capacity.
This Section 2.3.10 shall survive the termination of this Agreement.
2.4. Method of Borrowing. Not later than 1:00 p.m. (Chicago time)
on each Borrowing Date, each Lender shall make available its Loan or Loans in
funds immediately available in Chicago to the Agent at its address specified
pursuant to Article XIII. The Agent will make the funds so received from the
Lenders available to the Borrower at the Agent's aforesaid address.
2.5. Fees; Reductions/Increases of Aggregate Commitment.
2.5.1 Facility Fee. The Borrower agrees to pay to the Agent
for the account of each Lender a fee ("Facility Fee"), if applicable,
at a per annum rate equal to the Applicable Fee Rate on the average
daily amount of such Lender's Commitment (whether used or unused) from
the date hereof to and including the Facility Termination Date, payable
quarterly in arrears on each Quarterly Payment Date hereafter and on
the Facility Termination Date.
2.5.2 Non-Use Fee. The Borrower agrees to pay to the Agent for
the account of each Lender a fee ("Non-Use Fee"), if applicable, at a
per annum rate equal to the Applicable Fee Rate on the daily average
unused portion of such Lender's Commitment from the date hereof to and
including the Facility Termination Date, payable quarterly in arrears
on each Quarterly Payment Date hereafter and on the Facility
Termination Date. For purposes of determining the Non-Use Fee,
Competitive Bid Loans shall not be deemed to be use of any Lender's
Commitment, but Facility LCs shall be deemed to be use of each Lender's
Commitment.
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2.5.3 Reductions in Aggregate Commitment. The Borrower may
permanently reduce the Aggregate Commitment in whole, or in part
ratably among the Lenders in a minimum amount of $5,000,000 and in
integral multiples of $1,000,000 if in excess thereof upon at least
three Business Days' written notice to the Agent, which notice shall
specify the amount of any such reduction, provided, however, that the
amount of the Aggregate Commitment may not be reduced below the
aggregate principal amount of the outstanding Credit Extensions and may
not in any event be reduced below $50,000,000 unless reduced to zero
(0). All accrued Facility Fees and Non-Use Fees shall be payable on the
effective date of any termination of the obligations of the Lenders to
make Loans hereunder.
2.5.4 Increases in Aggregate Commitment.
(i) The Borrower may, at any time and from time to
time, by notice to the Agent, request an increase in the
Aggregate Commitment within the limitations hereafter
described, which notice shall set forth the amount of such
increase. The Aggregate Commitment may be so increased either
by having one or more New Lenders become Lenders and/or by
having any one or more of the then existing Lenders (at their
respective election in their sole discretion) that have been
approved by the Borrower and the Agent (any such Lender or any
New Lender being herein referred to as an "Additional Lender")
increase the amount of their Commitments, provided that (a)
unless otherwise approved by the Agent, the Commitment of any
New Lender shall be in an amount not less than $5,000,000
(and, if in excess thereof, in an integral multiple of
$1,000,000); (b) unless otherwise approved by the Agent, any
single increase in the Aggregate Commitment shall be in an
aggregate amount of not less than $5,000,000 (and, if in
excess thereof, in an integral multiple of $1,000,000); and
(c) the Aggregate Commitment shall not exceed $125,000,000.
(ii) As a condition to any increase in the Aggregate
Commitment, (a) the Borrower and each Additional Lender shall
have executed and delivered a commitment and acceptance (the
"Commitment and Acceptance") substantially in the form of
Exhibit J hereto, and the Agent shall have accepted and
executed the same; (b) if requested by an Additional Lender,
the Borrower shall have executed and delivered to the Agent a
Ratable Note and/or Competitive Bid Note payable to the order
of such Additional Lender; (c) the Guarantors shall have
consented in writing to the increase in the Aggregate
Commitment and shall have reaffirmed their Guaranties; (d) the
Borrower and each Additional Lender shall otherwise have
executed and delivered such other instruments and documents as
the Agent shall have reasonably requested in connection with
such increase in the Aggregate Commitment; and (e) the
Borrower shall have delivered to the Agent an opinion of
counsel (substantially similar to the form of opinion provided
for in Section 4.1.9, modified to apply to the increase in the
Aggregate Commitment and to each Note, Commitment and
Acceptance, consent of Guarantors, and other documents
executed and delivered in connection with such increase in the
Aggregate Commitment). The form and substance of the documents
required under clauses (a) through (e) above shall be fully
acceptable to the Agent. The Agent shall
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provide written notice to all of the Lenders hereunder of any
increase in the Aggregate Commitment hereunder and shall
furnish to any Lender copies of the documents required under
clauses (a) through (e) above.
(iii) Upon the effective date of any increase in the
Aggregate Commitment pursuant to the provisions hereof (the
"Increase Date"), which Increase Date shall be mutually agreed
upon by the Borrower, each Additional Lender and the Agent,
each Lender that is not an Additional Lender ("Selling
Lender") hereby sells, grants, assigns and conveys to each
Additional Lender, without recourse, warranty, or
representation of any kind, except as specifically provided
herein, an undivided percentage in such Selling Lender's
right, title and interest in and to its outstanding Ratable
Loans and participations in Facility LCs in the respective
dollar amounts and percentages necessary so that, from and
after such sale, each such Selling Lender's outstanding
Ratable Loans shall equal such Selling Lender's Pro Rata Share
(calculated based upon the Increased Aggregate Commitment) of
the outstanding Ratable Loans under this Agreement and such
Selling Lender shall hold a participation interest in each
Facility LC equal to its Pro Rata Share thereof. Effective on
the Increase Date, each Additional Lender hereby purchases and
accepts such grant, assignment and conveyance from the Selling
Lenders. Each Additional Lender hereby agrees that its
respective purchase price for the portion of the outstanding
Ratable Loans and participations in Facility LCs purchased
hereby shall equal the respective dollar amount necessary so
that, from and after such payments, each Additional Lender's
outstanding Ratable Loans shall equal such Additional Lender's
Pro Rata Share (calculated based upon the increased Aggregate
Commitment) of the outstanding Ratable Loans; no additional
purchase price shall be payable in respect of the
participations in Facility LCs granted, assigned and conveyed
hereunder. The purchase price in respect of the interests in
Ratable Loans granted, assigned and conveyed hereunder shall
be payable as follows: (a) with respect to all Floating Rate
Loans, on the Increase Date by wire transfer of immediately
available funds to the Agent and (b) with respect to all
Eurodollar Ratable Loans, unless otherwise agreed to among the
Additional Lenders, the Selling Lenders, the Borrower and the
Agent, on the earlier of (i) the last day of the then current
Interest Period by wire transfer of immediately available
funds to the Agent and (ii) the date on which any such
Eurodollar Ratable Loan either becomes due (by acceleration or
otherwise) or is prepaid (such earlier date being hereinafter
referred to as the "Settlement Date") and, for purposes of
calculating interest due and payable with respect to the
Eurodollar Ratable Loans, the Lenders' Pro Rata Shares of each
such outstanding Eurodollar Ratable Loan shall not be adjusted
by virtue of the applicable increase until such Settlement
Date. The Agent, in turn, shall wire transfer any such funds
received to the Selling Lenders, in same day funds, for the
sole account of the Selling Lenders. Each Selling Lender
hereby represents and warrants to each Additional Lender that
such Selling Lender owns the Ratable Loans and participations
in Facility LCs being sold and assigned hereby for its own
account and has not sold, transferred or encumbered any or all
of its interest in such Ratable Loans, except for
participations which will be extinguished upon payment to such
Selling Lender of an amount equal to the
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portion of the outstanding Ratable Loans being sold by such
Selling Lender. Each Additional Lender hereby acknowledges and
agrees that, except for each Selling Lender's representations
and warranties contained in the foregoing sentence, each such
Additional Lender has entered into its Commitment and
Acceptance with respect to such increase on the basis of its
own independent investigation and has not relied upon, and
will not rely upon, any explicit or implicit written or oral
representation, warranty or other statement of the Lenders or
the Agent concerning the authorization, execution, legality,
validity, effectiveness, genuineness, enforceability or
sufficiency of this Agreement or the other Loan Documents. The
Borrower hereby agrees to compensate each Selling Lender for
all losses, expenses and liabilities incurred by each Lender
in connection with the sale and assignment of any Eurodollar
Ratable Loan hereunder on the terms and in the manner as set
forth in Section 3.4.
(iv) Nothing contained herein shall constitute, or
otherwise be deemed to be, a commitment or agreement on the
part of any Lender to increase its Commitment hereunder at any
time or a commitment or agreement on the part of the Borrower
or the Agent to give or grant any Lender the right to increase
its Commitment hereunder at any time.
2.6. Minimum Amount of Each Advance. Each Eurodollar Ratable Advance
shall be in the minimum amount of $1,000,000 and in multiples of $100,000 if in
excess thereof), and each Floating Rate Advance shall be in the minimum amount
of $1,000,000 and in multiples of $100,000 if in excess thereof), provided,
however, that any Floating Rate Advance may be in the amount of the unused
Aggregate Commitment. Each Competitive Bid Advance shall be in the minimum
amount of $10,000,000 (and in multiples of $1,000,000 if in excess thereof). The
Borrower shall not request a Eurodollar Ratable Advance if, after giving effect
to the requested Eurodollar Ratable Advance, more than six separate Eurodollar
Ratable Advances would be outstanding.
2.7. Optional Principal Payments. The Borrower may from time to time
pay, without penalty or premium, all outstanding Floating Rate Advances, or, in
a minimum aggregate amount of $500,000 or any integral multiple of $100,000
excess thereof, any portion of the outstanding Floating Rate Advances upon three
Business Days' prior notice to the Agent. The Borrower may from time to time
pay, subject to the payment of any funding indemnification amounts required by
Section 3.4 but without penalty or premium, all outstanding Eurodollar Ratable
Advances or, in a minimum aggregate amount of $500,000 or any integral multiple
of $100,000 in excess thereof, any portion of the outstanding Eurodollar Ratable
Advances upon three Business Days' prior notice to the Agent. A Competitive Bid
Loan may not be paid prior to the last day of the applicable Interest Period
without the prior consent of the applicable Lender.
2.8. Changes in Interest Rate, etc. Each Floating Rate Advance shall
bear interest on the outstanding principal amount thereof, for each day from and
including the date such Advance is made or is converted from a Eurodollar
Ratable Advance into a Floating Rate Advance pursuant to Section 2.2.4 to but
excluding the date it becomes due or is converted into a Eurodollar Ratable
Advance pursuant to Section 2.2.4 hereof, at a rate per annum equal to the
Floating Rate for such day. Changes in the rate of interest on that portion of
any Advance
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maintained as a Floating Rate Advance will take effect simultaneously with each
change in the Alternate Base Rate. Each Fixed Rate Advance shall bear interest
on the outstanding principal amount thereof from and including the first day of
the Interest Period applicable thereto to (but not including) the last day of
such Interest Period at the interest rate determined as applicable to such Fixed
Rate Advance. No Interest Period may end after the Facility Termination Date.
2.9. Rates Applicable After Default. Notwithstanding anything to the
contrary contained in Section 2.2.3, Section 2.2.4 or 2.8, during the
continuance of a Default or Unmatured Default the Required Lenders may, at their
option, by notice to the Borrower (which notice may be revoked at the option of
the Required Lenders notwithstanding any provision of Section 8.2 requiring
unanimous consent of the Lenders to changes in interest rates), declare that no
Ratable Advance may be made as, converted into or continued as a Eurodollar
Ratable Advance. During the continuance of a Default the Required Lenders may,
at their option, by notice to the Borrower (which notice may be revoked at the
option of the Required Lenders notwithstanding any provision of Section 8.2
requiring unanimous consent of the Lenders to changes in interest rates),
declare that (i) each Fixed Rate Advance shall bear interest for the remainder
of the applicable Interest Period at the rate otherwise applicable to such
Interest Period plus four percent (4%) per annum, (ii) each Floating Rate
Advance shall bear interest at a rate per annum equal to the Floating Rate
otherwise applicable to the Floating Rate Advance plus four percent (4%) per
annum, and (iii) the LC Fee shall be increased by four percent (4%) per annum,
provided that, during the continuance of a Default under Section 7.5 or 7.6, the
interest rates set forth in clauses (i), (ii) and (iii) above shall be
applicable to all Credit Extensions without any election or action on the part
of the Agent or any Lender.
2.10. Method of Payment. All payments of the Obligations hereunder
shall be made, without setoff, deduction, or counterclaim, in immediately
available funds to the Agent at the Agent's address specified pursuant to
Article XIII, or at any other Lending Installation of the Agent specified in
writing by the Agent to the Borrower, by noon (local time) on the date when due
and shall (except (a) in the case of payments of principal and interest on a
Competitive Bid Loans which shall be applied ratably to the Lender or Lenders
that make such Competitive Bid Loans, (b) in the case of payments of
Reimbursement Obligations for which the LC Issuer has not been fully reimbursed
by the Lenders, which payments shall be paid to the LC Issuer, or (c) as
otherwise specifically provided hereunder) be applied ratably by the Agent among
the Lenders. Each payment delivered to the Agent for the account of any Lender
shall be delivered promptly by the Agent to such Lender in the same type of
funds that the Agent received at its address specified pursuant to Article XIII
or at any Lending Installation specified in a notice received by the Agent from
such Lender. If the Agent fails to deliver to any Lender, within one Business
Day of the Agent's receipt thereof, funds received by Agent for the account of
such Lender, the Agent shall pay to such Lender interest on such funds, at the
Federal Funds Effective Rate for each day thereafter until such funds are
delivered to such Lender. The Agent is hereby authorized to charge the account
of the Borrower maintained with Bank One for each payment of principal,
interest, Reimbursement Obligations and fees as it becomes due hereunder. Each
reference to the Agent in this Section 2.10 shall also be deemed to refer, and
shall apply equally, to the LC Issuer, in the case of payments required to be
made by the Borrower pursuant to Section 2.19.6.
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2.11. Noteless Agreement; Evidence of Indebtedness.
(i) Each Lender shall maintain in accordance with its usual
practice an account or accounts evidencing the indebtedness of
the Borrower to such Lender resulting from each Loan made by
such Lender from time to time, including the amounts of
principal and interest payable and paid to such Lender from
time to time hereunder.
(ii) The Agent shall also maintain accounts in which it will record
(a) the amount of each Loan made hereunder, the Type thereof
and the Interest Period with respect thereto, (b) the amount
of any principal or interest due and payable or to become due
and payable from the Borrower to each Lender hereunder, (c)
the original stated amount of each Facility LC and the amount
of LC Obligations outstanding at any time and (d) the amount
of any sum received by the Agent hereunder from the Borrower
and each Lender's share thereof.
(iii) The entries maintained in the accounts maintained pursuant to
paragraphs (i) and (ii) above shall be prima facie evidence of
the existence and amounts of the Obligations therein recorded;
provided, however, that the failure of the Agent or any Lender
to maintain such accounts or any error therein shall not in
any manner affect the obligation of the Borrower to repay the
Obligations in accordance with their terms.
(iv) Any Lender may request that its Ratable Loans or its
Competitive Bid Loans be evidenced by Ratable Notes or
Competitive Bid Notes, respectively. In such event, the
Borrower shall prepare, execute and deliver to such Lender a
Ratable Note or a Competitive Bid Note, as the case may be,
payable to the order of such Lender. Thereafter, the Loans
evidenced by such Note and interest thereon shall at all times
(prior to any assignment pursuant to Section 12.3) be
represented by a Note payable to the order of the payee named
therein, except to the extent that any such Lender or assignee
subsequently returns any such Note for cancellation and
requests that such Loans once again be evidenced as described
in paragraphs (i) and (ii) above.
2.12. Telephonic Notices. The Borrower hereby authorizes the Lenders
and the Agent to extend, convert or continue Advances, effect selections of
Types of Advances, submit Competitive Bid Quotes and to transfer funds based on
telephonic notices made by any person or persons the Agent or any Lender in good
faith believes to be acting on behalf of the Borrower, it being understood that
the foregoing authorization is specifically intended to allow Borrowing Notices,
Conversion/Continuation Notices and Competitive Bid Quote Requests to be given
telephonically. The Borrower agrees to deliver promptly to the Agent a written
confirmation, if such confirmation is requested by the Agent or any Lender, of
each telephonic notice signed by an Authorized Officer. If the written
confirmation differs in any material respect from the action taken by the Agent
and the Lenders, the records of the Agent and the Lenders shall govern absent
manifest error.
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2.13. Interest Payment Dates; Interest and Fee Basis. Interest accrued
on each Floating Rate Advance shall be payable on each Monthly Payment Date,
commencing with the first such date to occur after the date hereof, on any date
on which the Floating Rate Advance is prepaid, whether due to acceleration or
otherwise, and at maturity. Interest accrued on that portion of the outstanding
principal amount of any Floating Rate Advance converted into a Eurodollar
Ratable Advance on a day other than a Monthly Payment Date shall be payable on
the date of conversion. Interest accrued on each Fixed Rate Advance shall be
payable on the last day of its applicable Interest Period, on any date on which
the Fixed Rate Advance is prepaid, whether by acceleration or otherwise, and at
maturity. Interest accrued on each Fixed Rate Advance having an Interest Period
longer than three months shall also be payable on the last day of each
three-month interval during such Interest Period. Interest and fees hereunder
shall be calculated on the basis of a 360-day year, based on twelve 30-day
months, except that interest or fees due and payable for a period of less than a
full month shall be calculated by multiplying the actual number of days elapsed
in such period by a daily rate based on such 360-day year. Interest shall be
payable for the day an Advance is made but not for the day of any payment on the
amount paid if payment is received prior to noon (local time) at the place of
payment. If any payment of principal of or interest on an Advance, or any
payments of fees, shall become due on a day which is not a Business Day, such
payment shall be made on the next succeeding Business Day and, in the case of a
principal payment, such extension of time shall be included in computing
interest in connection with such payment.
2.14. Notification of Advances, Interest Rates, Prepayments and
Commitment Reductions. Promptly after receipt thereof, the Agent will notify
each Lender of the contents of each Aggregate Commitment reduction notice,
Ratable Borrowing Notice, Conversion/Continuation Notice, Competitive Bid
Borrowing Notice, and repayment notice received by it hereunder. Promptly after
notice from the LC Issuer, the Agent will notify each Lender of the contents of
each request for issuance of a Facility LC hereunder. The Agent will notify each
Lender of the interest rate applicable to each Fixed Rate Advance promptly upon
determination of such interest rate and will give each Lender prompt notice of
each change in the Alternate Base Rate.
2.15. Lending Installations. Each Lender may book its Loans and
participations in Facility LCs at any Lending Installation selected by such
Lender or the LC Issuer, as the case may be, and may change its Lending
Installation from time to time. All terms of this Agreement shall apply to any
such Lending Installation, and the Loans, Facility LCs, participations in LC
Obligations and any Notes issued hereunder shall be deemed held by each Lender
or the LC Issuer, as the case may be, for the benefit of any such Lending
Installation. Each Lender may, by written notice to the Agent and the Borrower
in accordance with Article XIII, designate replacement or additional Lending
Installations through which Loans will be made by it or Facility LCs issued by
it and for whose account Loan payments are to be made or payments with respect
to Facility LCs are to be made.
2.16. Non-Receipt of Funds by the Agent. Unless the Borrower or a
Lender, as the case may be, notifies the Agent prior to the date on which it is
scheduled to make payment to the Agent of (i) in the case of a Lender, the
proceeds of a Loan or (ii) in the case of the Borrower, a payment of principal,
interest or fees to the Agent for the account of the Lenders, that it does not
intend to make such payment, the Agent may assume that such payment has been
made. The
39
Agent may, but shall not be obligated to, make the amount of such payment
available to the intended recipient in reliance upon such assumption. If such
Lender or the Borrower, as the case may be, has not in fact made such payment to
the Agent, the recipient of such payment shall, on demand by the Agent, repay to
the Agent the amount so made available together with interest thereon in respect
of each day during the period commencing on the date such amount was so made
available by the Agent until the date the Agent recovers such amount at a rate
per annum equal to (x) in the case of payment by a Lender, the Federal Funds
Effective Rate for such day for the first three days and, thereafter, the
interest rate applicable to the relevant Loan or (y) in the case of payment by
the Borrower, the interest rate applicable to the relevant Loan.
2.17. Extension of Facility Termination Date. Provided no Default has
occurred that is continuing, the Borrower shall have a one-time only option to
extend the Facility Termination Date to July 2, 2006 by giving notice (the
"Extension Notice") to the Agent not more than 90 nor less than 60 days prior to
the Facility Termination Date and paying to the Agent at the time of delivery of
such Extension Notice, for the account of the Lenders, a fee ("Extension Fee")
equal to 0.15% of the Aggregate Commitment. Promptly upon receipt of an
Extension Notice and the Extension Fee, the Agent shall give each Lender notice
of the Extension Notice and shall pay to each Lender its Pro Rata Share of the
Extension Fee.
2.18. Replacement of Lender. If the Borrower is required pursuant to
Section 3.1, 3.2 or 3.5 to make any additional payment to any Lender or if any
Lender's obligation to make or continue, or to convert Floating Rate Advances
into, Eurodollar Ratable Advances shall be suspended pursuant to Section 3.3
(any Lender so affected an "Affected Lender"), the Borrower may elect, if such
amounts continue to be charged or such suspension is still effective, to replace
such Affected Lender as a Lender party to this Agreement, provided that no
Default or Unmatured Default shall have occurred and be continuing at the time
of such replacement, and provided further that, concurrently with such
replacement, (i) another bank or other entity which is reasonably satisfactory
to the Borrower and the Agent shall agree, as of such date, to purchase for cash
the Advances and other Obligations due to the Affected Lender pursuant to an
assignment substantially in the form of Exhibit C and to become a Lender for all
purposes under this Agreement and to assume all obligations of the Affected
Lender to be terminated as of such date and to comply with the requirements of
Section 12.3 applicable to assignments, and (ii) the Borrower shall pay to such
Affected Lender in same day funds on the day of such replacement (A) all
interest, fees and other amounts then accrued but unpaid to such Affected Lender
by the Borrower hereunder to and including the date of termination, including
without limitation payments due to such Affected Lender under Sections 3.1, 3.2
and 3.5, and (B) an amount, if any, equal to the payment which would have been
due to such Lender on the day of such replacement under Section 3.4 had the
Loans of such Affected Lender been prepaid on such date rather than sold to the
replacement Lender. At the request of the Borrower, the Agent will assist the
Borrower in identifying a bank or other entity to replace an Affected Lender.
2.19. Facility LCs.
2.19.1 Issuance. The LC Issuer hereby agrees, on the terms and
conditions set forth in this Agreement, to issue standby and commercial
letters of credit (each, a "Facility LC") and to renew, extend,
increase, decrease or otherwise modify each Facility LC ("Modify," and
each such action a "Modification"), from time to time from and
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including the date of this Agreement and prior to the Facility
Termination Date upon the request of the Borrower; provided that
immediately after each such Facility LC is issued or Modified, (i) the
aggregate amount of the outstanding LC Obligations shall not exceed
$10,000,000 and (ii) the Aggregate Outstanding Credit Exposure shall
not exceed the Aggregate Commitment. No Facility LC shall have an
expiry date later than the fifth Business Day prior to the Facility
Termination Date.
2.19.2 Participations. Upon the issuance or Modification by
the LC Issuer of a Facility LC in accordance with this Section 2.19,
the LC Issuer shall be deemed, without further action by any party
hereto, to have unconditionally and irrevocably sold to each Lender,
and each Lender shall be deemed, without further action by any party
hereto, to have unconditionally and irrevocably purchased from the LC
Issuer, a participation in such Facility LC (and each Modification
thereof) and the related LC Obligations in proportion to its Pro Rata
Share.
2.19.3 Notice. Subject to Section 2.19.1, the Borrower shall
give the LC Issuer notice prior to 10:00 a.m. (Chicago time) at least
five Business Days prior to the proposed date of issuance or
Modification of each Facility LC, specifying the beneficiary, the
proposed date of issuance (or Modification) and the expiry date of such
Facility LC, and describing the proposed terms of such Facility LC and
the nature of the transactions proposed to be supported thereby. Upon
receipt of such notice, the LC Issuer shall promptly notify the Agent,
and the Agent shall promptly notify each Lender, of the contents
thereof and of the amount of such Lender's participation in such
proposed Facility LC. The issuance or Modification by the LC Issuer of
any Facility LC shall, in addition to the conditions precedent set
forth in Article IV (the satisfaction of which the LC Issuer shall have
no duty to ascertain), be subject to the conditions precedent that such
Facility LC shall be satisfactory to the LC Issuer and that the
Borrower shall have executed and delivered such application agreement
and/or such other instruments and agreements relating to such Facility
LC as the LC Issuer shall have reasonably requested (each, a "Facility
LC Application"). In the event of any conflict between the terms of
this Agreement and the terms of any Facility LC Application, the terms
of this Agreement shall control.
2.19.4 LC Fees. The Borrower shall pay to the Agent, for the
account of the Lenders ratably in accordance with their respective Pro
Rata Shares, a letter of credit fee (the "LC Fee") at a per annum rate
equal to the Applicable Margin for Eurodollar Ratable Loans in effect
from time to time on the average daily undrawn stated amount under such
Facility LC, such fee to be payable in arrears on each Quarterly
Payment Date. The Borrower shall also pay to the LC Issuer for its own
account (x) an issuance fee at the rate of 0.125% per annum on the
average daily undrawn stated amount under such Facility LC, such fee to
be payable in arrears on each Quarterly Payment Date, and (y)
documentary and processing charges in connection with the issuance or
Modification of and draws under Facility LCs in accordance with the LC
Issuer's standard schedule for such charges as in effect from time to
time.
2.19.5 Administration; Reimbursement by Lenders. Upon receipt
from the beneficiary of any Facility LC of any demand for payment under
such Facility LC, the
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LC Issuer shall notify the Agent and the Agent shall promptly notify
the Borrower and each other Lender as to the amount to be paid by the
LC Issuer as a result of such demand and the proposed payment date (the
"LC Payment Date"). The responsibility of the LC Issuer to the Borrower
and each Lender shall be only to determine that the documents
(including each demand for payment) delivered under each Facility LC in
connection with such presentment shall be in conformity in all material
respects with such Facility LC. The LC Issuer shall endeavor to
exercise the same care in the issuance and administration of the
Facility LCs as it does with respect to letters of credit in which no
participations are granted, it being understood that in the absence of
any gross negligence or willful misconduct by the LC Issuer, each
Lender shall be unconditionally and irrevocably liable without regard
to the occurrence of any Default or any condition precedent whatsoever,
to reimburse the LC Issuer on demand for (i) such Lender's Pro Rata
Share of the amount of each payment made by the LC Issuer under each
Facility LC to the extent such amount is not reimbursed by the Borrower
pursuant to Section 2.19.6 below, plus (ii) interest on the foregoing
amount to be reimbursed by such Lender, for each day from the date of
the LC Issuer's demand for such reimbursement (or, if such demand is
made after 11:00 a.m. (Chicago time) on such date, from the next
succeeding Business Day) to the date on which such Lender pays the
amount to be reimbursed by it, at a rate of interest per annum equal to
the Federal Funds Effective Rate for the first three days and,
thereafter, at a rate of interest equal to the rate applicable to
Floating Rate Advances.
2.19.6 Reimbursement by Borrower. The Borrower shall be
irrevocably and unconditionally obligated to reimburse the LC Issuer on
or before the applicable LC Payment Date for any amounts to be paid by
the LC Issuer upon any drawing under any Facility LC, without
presentment, demand, protest or other formalities of any kind; provided
that neither the Borrower nor any Lender shall hereby be precluded from
asserting any claim for direct (but not consequential) damages suffered
by the Borrower or such Lender to the extent, but only to the extent,
caused by (i) the willful misconduct or gross negligence of the LC
Issuer in determining whether a request presented under any Facility LC
issued by it complied with the terms of such Facility LC or (ii) the LC
Issuer's failure to pay under any Facility LC issued by it after the
presentation to it of a request strictly complying with the terms and
conditions of such Facility LC. All such amounts paid by the LC Issuer
and remaining unpaid by the Borrower shall bear interest, payable on
demand, for each day until paid at a rate per annum equal to (x) the
rate applicable to Floating Rate Advances for such day if such day
falls on or before the applicable LC Payment Date and (y) the sum of
four percent (4%) plus the rate applicable to Floating Rate Advances
for such day if such day falls after such LC Payment Date. The LC
Issuer will pay to each Lender ratably in accordance with its Pro Rata
Share all amounts received by it from the Borrower for application in
payment, in whole or in part, of the Reimbursement Obligation in
respect of any Facility LC issued by the LC Issuer, but only to the
extent such Lender has made payment to the LC Issuer in respect of such
Facility LC pursuant to Section 2.19.5. Subject to the terms and
conditions of this Agreement (including without limitation the
submission of a Borrowing Notice in compliance with Section 2.8 and the
satisfaction of the applicable conditions precedent set forth in
Article IV), the Borrower may request an Advance hereunder for the
purpose of satisfying any Reimbursement Obligation.
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2.19.7 Obligations Absolute. The Borrower's obligations under
this Section 2.19 shall be absolute and unconditional under any and all
circumstances and irrespective of any setoff, counterclaim or defense
to payment which the Borrower may have or have had against the LC
Issuer, any Lender or any beneficiary of a Facility LC. The Borrower
further agrees with the LC Issuer and the Lenders that the LC Issuer
and the Lenders shall not be responsible for, and the Borrower's
Reimbursement Obligation in respect of any Facility LC shall not be
affected by, among other things, the validity or genuineness of
documents or of any endorsements thereon, even if such documents should
in fact prove to be in any or all respects invalid, fraudulent or
forged, or any dispute between or among the Borrower, any of its
Affiliates, the beneficiary of any Facility LC or any financing
institution or other party to whom any Facility LC may be transferred
or any claims or defenses whatsoever of the Borrower or of any of its
Affiliates against the beneficiary of any Facility LC or any such
transferee. The LC Issuer shall not be liable for any error, omission,
interruption or delay in transmission, dispatch or delivery of any
message or advice, however transmitted, in connection with any Facility
LC. The Borrower agrees that any action taken or omitted by the LC
Issuer or any Lender under or in connection with each Facility LC and
the related drafts and documents, if done without gross negligence or
willful misconduct, shall be binding upon the Borrower and shall not
put the LC Issuer or any Lender under any liability to the Borrower.
Nothing in this Section 2.19.7 is intended to limit the right of the
Borrower to make a claim against the LC Issuer for damages as
contemplated by the proviso to the first sentence of Section 2.19.6.
2.19.8 Actions of LC Issuer. The LC Issuer shall be entitled
to rely, and shall be fully protected in relying, upon any Facility LC,
draft, writing, resolution, notice, consent, certificate, affidavit,
letter, cablegram, telegram, telecopy, telex or teletype message,
statement, order or other document believed by it to be genuine and
correct and to have been signed, sent or made by the proper Person or
Persons, and upon advice and statements of legal counsel, independent
accountants and other experts selected by the LC Issuer. The LC Issuer
shall be fully justified in failing or refusing to take any action
under this Agreement unless it shall first have received such advice or
concurrence of the Required Lenders as it reasonably deems appropriate
or it shall first be indemnified to its reasonable satisfaction by the
Lenders against any and all liability and expense which may be incurred
by it by reason of taking or continuing to take any such action.
Notwithstanding any other provision of this Section 2.19, the LC Issuer
shall in all cases be fully protected in acting, or in refraining from
acting, under this Agreement in accordance with a request of the
Required Lenders, and such request and any action taken or failure to
act pursuant thereto shall be binding upon the Lenders and any future
holders of a participation in any Facility LC.
2.19.9 Indemnification. The Borrower hereby agrees to
indemnify and hold harmless each Lender, the LC Issuer and the Agent,
and their respective directors, officers, agents and employees from and
against any and all claims and damages, losses, liabilities, costs or
expenses which such Lender, the LC Issuer or the Agent may incur (or
which may be claimed against such Lender, the LC Issuer or the Agent by
any Person whatsoever) by reason of or in connection with the issuance,
execution and delivery or transfer of or payment or failure to pay
under any Facility LC or any actual or proposed use of any Facility LC,
including, without limitation, any claims, damages, losses,
43
liabilities, costs or expenses which the LC Issuer may incur by reason
of or in connection with (i) the failure of any other Lender to fulfill
or comply with its obligations to the LC Issuer hereunder (but nothing
herein contained shall affect any rights the Borrower may have against
any defaulting Lender) or (ii) by reason of or on account of the LC
Issuer issuing any Facility LC which specifies that the term
"Beneficiary" included therein includes any successor by operation of
law of the named Beneficiary, but which Facility LC does not require
that any drawing by any such successor Beneficiary be accompanied by a
copy of a legal document, satisfactory to the LC Issuer, evidencing the
appointment of such successor Beneficiary; provided that the Borrower
shall not be required to indemnify any Lender, the LC Issuer or the
Agent for any claims, damages, losses, liabilities, costs or expenses
to the extent, but only to the extent, caused by (x) the willful
misconduct or gross negligence of the LC Issuer in determining whether
a request presented under any Facility LC complied with the terms of
such Facility LC or (y) the LC Issuer's failure to pay under any
Facility LC after the presentation to it of a request strictly
complying with the terms and conditions of such Facility LC. Nothing in
this Section 2.19.9 is intended to limit the obligations of the
Borrower under any other provision of this Agreement.
2.19.10 Lenders' Indemnification. Each Lender shall, ratably
in accordance with its Pro Rata Share, indemnify the LC Issuer, its
affiliates and their respective directors, officers, agents and
employees (to the extent not reimbursed by the Borrower) against any
cost, expense (including reasonable counsel fees and disbursements),
claim, demand, action, loss or liability (except such as result from
such indemnitees' gross negligence or willful misconduct or the LC
Issuer's failure to pay under any Facility LC after the presentation to
it of a request strictly complying with the terms and conditions of the
Facility LC) that such indemnitees may suffer or incur in connection
with this Section 2.19 or any action taken or omitted by such
indemnitees hereunder.
2.19.11 Facility LC Collateral Account. The Borrower agrees
that it will, upon the request of the Agent or the Required Lenders and
until the final expiration date of any Facility LC and thereafter as
long as any amount is payable to the LC Issuer or the Lenders in
respect of any Facility LC, maintain a special collateral account
pursuant to arrangements satisfactory to the Agent (the "Facility LC
Collateral Account") at the Agent's office at the address specified
pursuant to Article XIII, in the name of such Borrower but under the
sole dominion and control of the Agent, for the benefit of the Lenders
and in which such Borrower shall have no interest other than as set
forth in Section 8.1. The Borrower hereby pledges, assigns and grants
to the Agent, on behalf of and for the ratable benefit of the Lenders
and the LC Issuer, a security interest in all of the Borrower's right,
title and interest in and to all funds which may from time to time be
on deposit in the Facility LC Collateral Account to secure the prompt
and complete payment and performance of the Obligations. The Agent will
invest any funds on deposit from time to time in the Facility LC
Collateral Account in certificates of deposit of Bank One having a
maturity not exceeding 30 days. Nothing in this Section 2.19.11 shall
either require the Borrower to deposit any funds in the Facility LC
Collateral Account or limit the right of the Agent to release any funds
held in the Facility LC Collateral Account in each case other than as
required by Section 8.1.
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2.19.12 Rights as a Lender. In its capacity as a Lender, the
LC Issuer shall have the same rights and obligations as any other
Lender.
2.20. Use of Proceeds and Limitations on Advances.
(i) The Borrower shall use the proceeds of the Loans
solely to provide short-term financing for (a) in the case of
the Initial Advance, the repayment of all obligations
outstanding under the Original Agreement, (b) the acquisition
of fee interests in Real Property Assets which are utilized
principally for manufactured housing communities, (c) capital
improvements, expansion or additional development (subject to
Section 6.32) to Real Property Assets owned by the Borrower or
any Consolidated Entity, (d) working capital, provided that
the principal amount outstanding at any time hereunder which
has been advanced for working capital (including the payment
of Distributions) shall not exceed $15,000,000, (e) the
acquisition of (1) Undeveloped Land that is non-income
producing or (2) Real Property Assets that are held in any
form other than undivided fee simple ownership (such as
co-tenancy interests, leasehold interests, partnership
interests, shares of stock in corporations owning real estate,
or through mortgages or participation interests in or
assignments of mortgages), provided that (in the case of both
(1) and (2)) such Assets constitute Permitted Investments and
subject (in the case of both (1) and (2)) to the limitations
of Section 6.32, (f) to pay other Indebtedness subject to the
terms of Section 6.29, (g) to pay various costs and expenses
in connection with the transactions under this Agreement and
(h) the redemption of OP Units, provided that no more than
$5,000,000 of Advances in the aggregate over the term of this
Agreement shall be used for such redemption.
(ii) The aggregate amount of any single Advance made
hereunder shall not exceed, with respect to an acquisition by
the Borrower, the REIT or any Consolidated Entity of a Real
Property Asset, an amount equal to the acquisition cost of
such Real Property Asset, as verified by the Borrower to the
satisfaction of the Agent, less the amount of any mortgage
indebtedness secured by such Real Property Asset that will
remain outstanding following such acquisition.
2.21. Additional Unencumbered Assets. If the Borrower desires to add an
Unencumbered Asset for purposes of this Agreement, it shall notify the Agent and
together with such notification, deliver to the Agent, with respect to such
Asset such items as the Agent and the Lenders may reasonably request. If such
Asset is owned by a Consolidated Entity other than a Guarantor or the Borrower,
such Consolidated Entity and any other Consolidated Entity that owns an interest
in such Consolidated Entity (and that is not then a Guarantor) shall execute and
deliver a Supplemental Guaranty in the form attached to and provided for in the
Guaranty, together with the items required in Sections 4.1.2, 4.1.3 and 4.1.9
with respect to such Consolidated Entity and Guaranty. If such Asset is subject
to no Liens or encumbrances other than Permitted Liens and is otherwise
satisfactory to the Agent and the Required Lenders, the Agent shall confirm to
the Borrower in writing that such Asset shall be deemed an Unencumbered Asset
and Schedule 1 shall be amended accordingly. The cost of the review of such
documentation (but not the cost of preparation and delivery of such
documentation to the
45
Agent) shall be paid by the Agent and the Lenders based on each Lender's Pro
Rata Share, provided, however, that if the request for and review of such
documentation is made by and solely for the benefit of one or more Lenders, the
cost of review of such documentation shall be paid by such Lenders, and Lenders
not requesting the Agent's review of such documentation will not be required to
reimburse the Agent for the cost of the Agent's and/or Lender's review of such
documentation.
ARTICLE III
YIELD PROTECTION; TAXES
3.1. Yield Protection. If, on or after the date of this Agreement, the
adoption of any law or any governmental or quasi-governmental rule, regulation,
policy, guideline or directive (whether or not having the force of law), or any
change in the interpretation or administration thereof by any governmental or
quasi-governmental authority, central bank or comparable agency charged with the
interpretation or administration thereof, or compliance by any Lender or
applicable Lending Installation or the LC Issuer with any request or directive
(whether or not having the force of law) of any such authority, central bank or
comparable agency:
(i) subjects any Lender or any applicable Lending Installation or
the LC Issuer to any Taxes, or changes the basis of taxation
of payments (other than with respect to Excluded Taxes) to any
Lender or the LC Issuer in respect of its Fixed Rate Loans,
Facility LCs or participations therein, or
(ii) imposes or increases or deems applicable any reserve,
assessment, insurance charge, special deposit or similar
requirement against assets of, deposits with or for the
account of, or credit extended by, any Lender or any
applicable Lending Installation or the LC Issuer (other than
reserves and assessments taken into account in determining the
interest rate applicable to Eurodollar Advances), or
(iii) imposes any other condition the result of which is to increase
the cost to any Lender or any applicable Lending Installation
or the LC Issuer of making, funding or maintaining its Fixed
Rate Loans, or of issuing or participating in Facility LCs, or
reduces any amount receivable by any Lender or any applicable
Lending Installation or the LC Issuer in connection with its
Fixed Rate Loans, Facility LCs or participations therein, or
requires any Lender or any applicable Lending Installation or
the LC Issuer to make any payment calculated by reference to
the amount of Fixed Rate Loans, Facility LCs or participations
therein held or interest or LC Fees received by it, by an
amount deemed material by such Lender or the LC Issuer as the
case may be,
and the result of any of the foregoing is to increase the cost to such Lender or
applicable Lending Installation or the LC Issuer, as the case may be, of making
or maintaining its Fixed Rate Loans or Commitment or of issuing or participating
in Facility LCs or to reduce the return received by such Lender or applicable
Lending Installation or the LC Issuer, as the case may be, in connection with
such Fixed Rate Loans, Commitment, or Facility LCs or participations therein,
then, within 15 days of demand by such Lender or the LC Issuer, as the case may
be, the
46
Borrower shall pay such Lender or the LC Issuer, as the case may be, such
additional amount or amounts as will compensate such Lender or the LC Issuer, as
the case may be, for such increased cost or reduction in amount received.
3.2. Changes in Capital Adequacy Regulations. If any Lender or the LC
Issuer determines the amount of capital required or expected to be maintained by
such Lender or the LC Issuer, any Lending Installation of such Lender or the LC
Issuer, or any corporation controlling such Lender or the LC Issuer is increased
as a result of a Change, then, within 15 days of demand by such Lender or the LC
Issuer, the Borrower shall pay such Lender or the LC Issuer the amount necessary
to compensate for any shortfall in the rate of return on the portion of such
increased capital which such Lender or the LC Issuer determines is attributable
to this Agreement, its Outstanding Credit Exposure or its Commitment to make
Loans and issue or participate in Facility LCs, as the case may be, hereunder
(after taking into account such Lender's or the LC Issuer's policies as to
capital adequacy). "Change" means (i) any change after the date of this
Agreement in the Risk-Based Capital Guidelines or (ii) any adoption of or change
in any other law, governmental or quasi-governmental rule, regulation, policy,
guideline, interpretation, or directive (whether or not having the force of law)
after the date of this Agreement which affects the amount of capital required or
expected to be maintained by any Lender or the LC Issuer or any Lending
Installation or any corporation controlling any Lender or the LC Issuer.
"Risk-Based Capital Guidelines" means (i) the risk-based capital guidelines in
effect in the United States on the date of this Agreement, including transition
rules, and (ii) the corresponding capital regulations promulgated by regulatory
authorities outside the United States implementing the July 1988 report of the
Basle Committee on Banking Regulation and Supervisory Practices Entitled
"International Convergence of Capital Measurements and Capital Standards,"
including transition rules, and any amendments to such regulations adopted prior
to the date of this Agreement.
3.3. Availability of Types of Advances. If (a) any Lender determines
that maintenance of its Eurodollar Ratable Loans or Eurodollar Bid Rate Loans at
a suitable Lending Installation would violate any applicable law, rule,
regulation, or directive, whether or not having the force of law, or if (b) the
Required Lenders determine that (i) deposits of a type and maturity appropriate
to match fund Eurodollar Ratable Advances are not available or (ii) the interest
rate applicable to Eurodollar Ratable Advances does not accurately reflect the
cost of making or maintaining Eurodollar Ratable Advances, then the Agent shall,
in the case of clause (a) above, suspend the availability of Eurodollar Ratable
Advances and Eurodollar Bid Rate Advances and require any affected Eurodollar
Ratable Advances to be repaid or converted to Floating Rate Advances, subject to
the payment of any funding indemnification amounts required by Section 3.4, and,
in the case of clause (b) above, suspend the availability of Eurodollar Ratable
Advances and require any affected Eurodollar Ratable Advances to be repaid or
converted to Floating Rate Advances, subject to payment of any funding
indemnification amounts required by Section 3.4.
3.4. Funding Indemnification. If any payment of a Fixed Rate Advance
occurs on a date which is not the last day of the applicable Interest Period,
whether because of acceleration, prepayment or otherwise, or a Fixed Rate
Advance is not made on the date specified by the Borrower for any reason other
than default by the Lenders, the Borrower will indemnify each Lender for any
loss or cost incurred by it resulting therefrom, including, without limitation,
any
47
loss or cost in liquidating or employing deposits acquired to fund or maintain
such Fixed Rate Advance.
3.5. Taxes.
(i) All payments by the Borrower to or for the account of any
Lender, the LC Issuer or the Agent hereunder or under any Note
or Facility LC Application shall be made free and clear of and
without deduction for any and all Taxes. If the Borrower shall
be required by law to deduct any Taxes from or in respect of
any sum payable hereunder to any Lender, the LC Issuer or the
Agent, (a) the sum payable shall be increased as necessary so
that after making all required deductions (including
deductions applicable to additional sums payable under this
Section 3.5) such Lender, the LC Issuer or the Agent (as the
case may be) receives an amount equal to the sum it would have
received had no such deductions been made, (b) the Borrower
shall make such deductions, (c) the Borrower shall pay the
full amount deducted to the relevant authority in accordance
with applicable law and (d) the Borrower shall furnish to the
Agent the original copy of a receipt evidencing payment
thereof within 30 days after such payment is made.
(ii) In addition, the Borrower hereby agrees to pay any present or
future stamp or documentary taxes and any other excise or
property taxes, charges or similar levies which arise from any
payment made hereunder or under any Note or Facility LC
Application or from the execution or delivery of, or otherwise
with respect to, this Agreement or any Note or Facility LC
Application ("Other Taxes").
(iii) The Borrower hereby agrees to indemnify the Agent, the LC
Issuer and each Lender for the full amount of Taxes or Other
Taxes (including, without limitation, any Taxes or Other Taxes
imposed on amounts payable under this Section 3.5) paid by the
Agent, the LC Issuer or such Lender and any liability
(including penalties, interest and expenses) arising therefrom
or with respect thereto. Payments due under this
indemnification shall be made within 30 days of the date the
Agent, the LC Issuer or such Lender makes demand therefor
pursuant to Section 3.6.
(iv) Each Lender that is not incorporated under the laws of the
United States of America or a state thereof (each a "Non-U.S.
Lender") agrees that it will, not more than ten Business Days
after the date of this Agreement, (a) deliver to the Agent two
duly completed copies of United States Internal Revenue
Service Form W-8BEN or W-8ECI, certifying in either case that
such Lender is entitled to receive payments under this
Agreement without deduction or withholding of any United
States federal income taxes, and (b) deliver to the Agent a
United States Internal Revenue Form W-8 or W-9, as the case
may be, and certify that it is entitled to an exemption from
United States backup withholding tax. Each Non-U.S. Lender
further undertakes to deliver to each of the Borrower and the
Agent (x) renewals or additional copies of such form (or any
successor form) on or
48
before the date that such form expires or becomes obsolete,
and (y) after the occurrence of any event requiring a change
in the most recent forms so delivered by it, such additional
forms or amendments thereto as may be reasonably requested by
the Borrower or the Agent. All forms or amendments described
in the preceding sentence shall certify that such Lender is
entitled to receive payments under this Agreement without
deduction or withholding of any United States federal income
taxes, unless an event (including without limitation any
change in treaty, law or regulation) has occurred prior to the
date on which any such delivery would otherwise be required
which renders all such forms inapplicable or which would
prevent such Lender from duly completing and delivering any
such form or amendment with respect to it and such Lender
advises the Borrower and the Agent that it is not capable of
receiving payments without any deduction or withholding of
United States federal income tax.
(v) For any period during which a Non-U.S. Lender has failed to
provide the Borrower with an appropriate form pursuant to
paragraph (iv), above (unless such failure is due to a change
in treaty, law or regulation, or any change in the
interpretation or administration thereof by any governmental
authority, occurring subsequent to the date on which a form
originally was required to be provided), such Non-U.S. Lender
shall not be entitled to indemnification under this Section
3.5 with respect to Taxes imposed by the United States;
provided that, should a Non-U.S. Lender which is otherwise
exempt from or subject to a reduced rate of withholding tax
become subject to Taxes because of its failure to deliver a
form required under paragraph (iv), above, the Borrower shall
take such steps as such Non-U.S. Lender shall reasonably
request to assist such Non-U.S. Lender to recover such Taxes.
(vi) Any Lender that is entitled to an exemption from or reduction
of withholding tax with respect to payments under this
Agreement or any Note pursuant to the law of any relevant
jurisdiction or any treaty shall deliver to the Borrower (with
a copy to the Agent), at the time or times prescribed by
applicable law, such properly completed and executed
documentation prescribed by applicable law as will permit such
payments to be made without withholding or at a reduced rate.
(vii) If the U.S. Internal Revenue Service or any other governmental
authority of the United States or any other country or any
political subdivision thereof asserts a claim that the Agent
did not properly withhold tax from amounts paid to or for the
account of any Lender (because the appropriate form was not
delivered or properly completed, because such Lender failed to
notify the Agent of a change in circumstances which rendered
its exemption from withholding ineffective, or for any other
reason), such Lender shall indemnify the Agent fully for all
amounts paid, directly or indirectly, by the Agent as tax,
withholding therefor, or otherwise, including penalties and
interest, and including taxes imposed by any jurisdiction on
amounts payable to the Agent under this subsection, together
with all costs and expenses related thereto (including
attorneys fees and time charges of attorneys for the Agent,
which attorneys may be employees of the Agent). The
49
obligations of the Lenders under this Section 3.5(vii) shall
survive the payment of the Obligations and termination of this
Agreement.
3.6. Lender Statements; Survival of Indemnity. To the extent reasonably
possible, each Lender shall designate an alternate Lending Installation with
respect to its Eurodollar Loans to reduce any liability of the Borrower to such
Lender under Sections 3.1, 3.2 and 3.5 or to avoid the unavailability of
Eurodollar Ratable Advances under Section 3.3, so long as such designation is
not, in the judgment of such Lender, disadvantageous to such Lender. Each Lender
shall deliver a written statement of such Lender to the Borrower (with a copy to
the Agent) as to the amount due, if any, under Section 3.1, 3.2, 3.4 or 3.5.
Such written statement shall set forth in reasonable detail the calculations
upon which such Lender determined such amount and shall be final, conclusive and
binding on the Borrower in the absence of manifest error. Determination of
amounts payable under such Sections in connection with a Eurodollar Loan shall
be calculated as though each Lender funded its Eurodollar Loan through the
purchase of a deposit of the type and maturity corresponding to the deposit used
as a reference in determining the Eurodollar Rate or Eurodollar Bid Rate, as the
case may be, applicable to such Loan, whether in fact that is the case or not.
Unless otherwise provided herein, the amount specified in the written statement
of any Lender shall be payable on demand after receipt by the Borrower of such
written statement. The obligations of the Borrower under Sections 3.1, 3.2, 3.4
and 3.5 shall survive payment of the Obligations and termination of this
Agreement.
ARTICLE IV
CONDITIONS PRECEDENT
4.1. Conditions Precedent to the Initial Advance. The obligation of the
Lenders to make the initial Credit Extension on the Closing Date is subject to
the satisfaction by the Borrower on the Closing Date of the following conditions
precedent:
4.1.1 Loan Documents.
(i) Agreement. The Borrower and the REIT shall have
executed and delivered this Agreement to the Agent.
(ii) The Note. The Borrower shall have executed and
delivered to the Agent any Note(s) requested by a Lender
pursuant to Section 2.11.
(iii) Guaranty. The REIT and the other Guarantors
shall have executed and delivered
to the Agent the Guaranty.
(iv) Environmental Indemnity. The Borrower and the
REIT shall have executed and delivered to the Agent the
Environmental Indemnity.
(v) Subordination of Management Agreement. The
Borrower and the Manager shall have executed and delivered to
the Agent the Subordination of Management Agreement.
50
4.1.2 Organizational Documents. The Agent shall have received
(i) with respect to the REIT and each of the Guarantors which is a
corporation, the certificate of incorporation of the REIT and such
Guarantor, as amended, modified or supplemented to the Closing Date,
certified to be true, correct and complete by the appropriate Secretary
of State (or the equivalent thereof) as of a date not more than thirty
(30) days prior to the Closing Date, together with a good standing
certificate from such Secretary of State (or the equivalent thereof)
and a good standing certificate from the Secretaries of State (or the
equivalent thereof) of each other State in which such Guarantor is
required to be qualified to transact business, each to be dated a date
not more than thirty (30) days prior to the Closing Date, (ii) with
respect to the Borrower and each of the Guarantors which is a limited
partnership, the agreement of limited partnership of such Person, as
amended, modified or supplemented to the Closing Date, certified to be
true, correct and complete by a general partner of such Person,
together with a copy of the certificate of limited partnership of such
Person, as amended, modified or supplemented to the Closing Date,
certified to be true, correct and complete by the appropriate Secretary
of State (or the equivalent thereof) as of a date not more than thirty
(30) days prior to the Closing Date, together with a good standing
certificate from such Secretary of State (or the equivalent thereof)
and a good standing certificate from the Secretary of State (or the
equivalent thereof) of each other State in which each such Person is
required to be qualified to transact business, each to be dated not
more than thirty (30) days prior to the Closing Date, (iii) with
respect to each of the Guarantors which is a general partnership, the
agreement of general partnership of such Guarantor, as amended,
modified or supplemented to the Closing Date, certified to be true,
correct and complete by a general partner of such Guarantor, together
with a copy of such Guarantor's doing business certificate (or the
equivalent thereof), as amended, modified or supplemented to the
Closing Date, certified to be true, correct and complete by the
appropriate Secretary of State (or County Clerk's or Recorder's Office,
as the case may be) as of a date not more than thirty (30) days prior
to the Closing Date in each case reasonably satisfactory to the Agent,
(iv) with respect to each of the Guarantors that is a limited liability
company, the certificate of formation or organization of such
Guarantor, as amended, modified or supplemented to the Closing Date,
certified to be true, correct and complete by the appropriate Secretary
of State (or the equivalent thereof) as of a date not more than thirty
(30) days prior to the Closing Date, together with a good standing
certificate from the Secretary of State (or the equivalent thereof) of
each other state in which such Guarantor is required to be qualified to
transact business, each to be dated a date not more than thirty (30)
days prior to the Closing Date and (v) evidence satisfactory to the
Agent that the REIT is a "qualified real estate investment trust" as
defined in Section 856 of the Code, including, without limitation,
copies of the REIT's real estate investment trust registration
statement and all amendments thereto, any similar material documents
filed with the United States Securities and Exchange Commission or
issued in connection with a public offering of equity securities by the
REIT.
4.1.3 Certified Resolutions, etc. The Agent shall have
received (i) a certificate of the secretary or assistant secretary of
the REIT and each of the Guarantors which is a corporation and dated
the Closing Date, certifying (a) the names and true signatures of the
incumbent officers of such Person authorized to sign the applicable
Loan Documents, (b) the by-laws of such Person as in effect on the
Closing Date, (c) the resolutions of such
51
Person's board of directors approving and authorizing the execution,
delivery and performance of all Loan Documents executed by such Person
either in its own capacity or as a partner or member of another
Guarantor, and (d) that there have been no changes in the certificate
of incorporation of such Person since the date of the most recent
certification thereof by the appropriate Secretary of State and (ii)
with respect to each Guarantor that is not a corporation, comparable
certificates evidencing appropriate approvals, consents and authority
with respect to the execution and delivery of the Loan Documents by
such Guarantor.
4.1.4 Lien Search Results. The Agent shall have received
satisfactory (i.e., showing no Liens other than Permitted Liens) UCC
searches, together with tax lien searches conducted in the Secretary of
State's office in the State of Michigan and the County of Oakland in
the State of Michigan, by a search firm acceptable to the Agent with
respect to Borrower and the REIT (collectively, the "UCC Searches").
4.1.5 Rating Agencies. The Borrower shall have delivered
evidence satisfactory to the Agent that the Borrower's Unsecured Debt
Rating is BBB- or higher as assigned by Standard & Poor's Ratings
Services and Baa3 or higher as assigned by Xxxxx'x Investor Service,
Inc.
4.1.6 Financial Statements. The Agent shall have received the
consolidated audited financial statements of the Borrower and the REIT
and their Consolidated Subsidiaries for the most recently ended fiscal
year of the Borrower and the REIT and the unaudited consolidated
financial statements of the Borrower and the REIT and their
Consolidated Subsidiaries for each fiscal quarter of the Borrower and
the REIT and their Consolidated Subsidiaries ending since the end of
such entity's most recent fiscal year. Such financial statements shall
be reasonably acceptable to the Agent and all of the Lenders in their
sole discretion, and each such statement shall be certified by a
general partner or senior executive officer of the Borrower and the
REIT that, as of the Closing Date, there has been no material adverse
change in the financial condition of the Borrower, the REIT or the
respective Consolidated Subsidiaries since the date thereof.
4.1.7 Money Transfer Instructions. The Agent shall have
received written money transfer instructions, in substantially the form
of Exhibit D, addressed to the Agent and signed by an Authorized
Officer, together with such other related money transfer authorizations
as the Agent may have reasonably requested.
4.1.8 Insurance. The Agent shall have received the insurance
certificate described in Section 5.19.
4.1.9 Opinion. The Agent shall have received an opinion of the
Borrower's and Guarantors' counsel substantially in the form of Exhibit
K hereto.
4.1.10 Fees. The Agent shall have received the fees provided
for in the fee letter dated May 3, 2002 among the Borrower, the Agent
and the Arranger.
4.1.11 Additional Matters. The Agent shall have received such
other certificates, opinions, documents and instruments relating to the
transactions under this Agreement as
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may have been reasonably requested by the Agent or any of the Lenders,
and all corporate and other proceedings and all other documents
(including, without limitation, evidence of zoning compliance, leases,
contracts and agreements relating to the ownership, management, leasing
and operation of the Unencumbered Assets and all other documents
referred to herein and not appearing as exhibits hereto) and all legal
matters in connection with this Agreement shall be reasonably
satisfactory in form and substance to the Agent and all of the Lenders.
4.2. Each Credit Extension. The Lenders will not be required to make
any Credit Extension (including the Credit Extension on the Closing Date) unless
on the applicable Credit Extension Date:
4.2.1 No Default. There exists no Default or Unmatured
Default.
4.2.2 Representations and Warranties. The representations and
warranties contained in Article V are true and correct as of such
Credit Extension Date except to the extent any such representation or
warranty is stated to relate solely to an earlier date, in which case
such representation or warranty shall have been true and correct on and
as of such earlier date.
4.2.3 Legal Matters. All legal matters incident to the making
of such Credit Extension shall be satisfactory to the Lenders and their
counsel.
4.2.4 No Injunction. No law or regulation shall have been
adopted, no order, judgment or decree of any governmental authority
shall have been issued, and no litigation shall be pending or
threatened, which in the good faith judgment of the Agent would enjoin,
prohibit or restrain, or impose or result in the imposition of any
material adverse condition upon, the making of the Credit Extensions or
the Borrower's obligation to pay (or the Agent or any Lender's rights
to receive payment of) the Loan and the other Obligations or the
consummation of the transactions under this Agreement.
4.2.5 No Material Adverse Change. No event, act or condition
shall have occurred after the Closing Date which, in the reasonable
judgment of the Agent, has had or would have a Material Adverse Effect.
4.2.6 Notice of Borrowing/Facility L/Cs. The Agent shall have
received a fully executed Notice of Borrowing or Notice of Conversion
or Continuation, as the case may be, in respect of the Advance to be
made on such date and, in the case of the issuance of any Facility L/C,
the applicable conditions set forth in Section 2.19 shall have been
satisfied.
4.2.7 No Litigation. Except for matters identified on Schedule
5 (as the same may be amended or supplemented), no actions, suits or
proceedings shall be pending or threatened with respect to the Loan or
the Loan Documents, the Borrower or any of the other Consolidated
Entities, or with respect to the Real Property Assets, that could, in
the aggregate, result in a Material Adverse Effect, and matters
identified on Schedule 5, in the aggregate, do not result in a Material
Adverse Effect.
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4.2.8 Title Insurance Searches. The Agent may elect, in its
sole discretion and as a condition of any Credit Extension, to have
performed Title Searches with respect to some or all of the
Unencumbered Assets at the Borrower's sole cost and expense. Provided
that no Default has occurred and is continuing, the Borrower will be
required to pay for only one Title Search per Real Property Asset in
any period of twelve (12) consecutive months, unless a Title Search
indicates a Lien other than a Permitted Lien or another state of facts
not reasonably satisfactory to the Agent and the Required Lenders, in
which case the Borrower shall pay for such Title Search and a
subsequent Title Search to establish that such Lien or state of facts
has been removed. The results of all such Title Searches shall be
satisfactory to the Agent in its reasonable discretion.
4.2.9 UCC and Tax Searches. The Agent may elect, in its sole
discretion and as a condition of any Credit Extension, to have
performed UCC searches and tax lien searches in the jurisdictions
requested by the Agent performed by a search firm acceptable to the
Agent with respect to the Unencumbered Assets, the Borrower and each of
the Guarantors. The results of such searches shall be satisfactory to
the Agent in its reasonable discretion.
4.2.10 Additional Matters. The Agent shall have received such
other certificates, opinions, documents and instruments relating to the
Loan as may have been reasonably requested by the Agent or any of the
Lenders and all corporate and other proceedings and all other documents
(including, without limitation, all documents referred to herein and
not appearing as exhibits hereto) and all legal matters in connection
with the Loan shall be satisfactory in form and substance to the Agent
and the Required Lenders.
Each Ratable Borrowing Notice, Competitive Bid Borrowing Notice and
request for issuance of a Facility LC shall constitute a representation and
warranty by the Borrower that the conditions contained in Sections 4.2.1 and
4.2.2 have been satisfied. Any Lender may require a duly completed compliance
certificate in substantially the form of Exhibit B as a condition to making an
Credit Extension.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
In order to induce the Agent and the Lenders to enter into this
Agreement and to make the Credit Extensions hereunder, the Borrower and the REIT
make the following representations and warranties, which shall survive the
execution and delivery of this Agreement and the Notes and the making of each
Credit Extension:
5.1. Existence and Standing. Each of the Borrower, the REIT and the
other Consolidated Entities is a corporation, partnership or limited liability
company duly and properly incorporated or organized, as the case may be, validly
existing and (to the extent such concept applies to such entity) in good
standing under the laws of its jurisdiction of incorporation or organization and
has all requisite authority to conduct its business in each jurisdiction in
which its business is conducted.
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5.2. Authorization and Validity. Each of the Borrower, the REIT and the
other Consolidated Entities has the power and authority and legal right to
execute and deliver the Loan Documents to which it is a party and to perform its
obligations thereunder. The execution and delivery by each of the Borrower, the
REIT and the other Consolidated Entities of the Loan Documents to which it is a
party and the performance of its obligations thereunder have been duly
authorized by proper corporate or other appropriate proceedings, and the Loan
Documents to which each of the Borrower, the REIT and the other Consolidated
Entities is a party constitute its legal, valid and binding obligations
enforceable against it in accordance with the terms thereof, except as
enforceability may be limited by bankruptcy, insolvency or similar laws
affecting the enforcement of creditors' rights generally.
5.3. No Conflict; Government Consent. Neither the execution and
delivery by the Borrower, the REIT or any of the Consolidated Entities of the
Loan Documents to which it is a party, nor the consummation of the transactions
therein contemplated, nor compliance with the provisions thereof will violate
(i) any law, rule, regulation, order, writ, judgment, injunction, decree or
award binding on the Borrower, the REIT or any of the Consolidated Entities or
(ii) the articles or certificate of incorporation, partnership agreement,
certificate of partnership, articles or certificate of organization, by-laws, or
operating or other management agreement of the Borrower, the REIT or any of the
Consolidated Entities or (iii) the provisions of any indenture, instrument or
agreement to which the Borrower, the REIT or any of the Consolidated Entities is
a party or is subject, or by which it, or its Property, is bound, or conflict
with or constitute a default thereunder, or result in, or require, the creation
or imposition of any Lien in, of or on the Property of the Borrower or a
Subsidiary pursuant to the terms of any such indenture, instrument or agreement.
No order, consent, adjudication, approval, license, authorization, or validation
of, or filing, recording or registration with, or exemption by, or other action
in respect of any governmental or public body or authority, or any subdivision
thereof, which has not been obtained by the Borrower, the REIT or any of the
Consolidated Entities, is required to be obtained by the Borrower, the REIT or
any of the other Consolidated Entities in connection with the execution and
delivery of the Loan Documents, the borrowings under this Agreement, the payment
and performance by the Borrower of the Obligations or the legality, validity,
binding effect or enforceability of any of the Loan Documents.
5.4. Financial Statements; Financial Condition; etc. The financial
statements delivered pursuant to Section 4.1.6 were prepared in accordance with
Agreement Accounting Principles consistently applied and fairly present the
financial condition and the results of operations of the Borrower, the REIT and
their Consolidated Subsidiaries and the Real Property Assets covered thereby on
the dates and for the periods covered thereby, except as disclosed in the notes
thereto and, with respect to interim financial statements, subject to usual
year-end adjustments. Neither the Borrower nor the REIT nor any of their
Consolidated Subsidiaries has any material liability (contingent or otherwise)
not reflected in such financial statements or in the notes thereto. There has
been no adverse change in any condition, fact, circumstance or event that would
make any such information materially inaccurate, incomplete or otherwise
misleading or would affect the Borrower's or the REIT's ability to perform its
obligations under this Agreement.
5.5. Material Adverse Change. Since December 31, 2001 there has been no
change in the business, Property, prospects, condition (financial or otherwise)
or results of operations of the
55
Borrower, the REIT or any of the other Consolidated Entities that could
reasonably be expected to have a Material Adverse Effect.
5.6. Taxes. Each of the Borrower, the REIT and the other Consolidated
Entities has filed all United States federal tax returns and all other tax
returns which are required to be filed and has paid all taxes (if any) due
pursuant to said returns or pursuant to any assessment received by them, except
such taxes, if any, as are being contested in good faith and as to which
adequate reserves have been provided in accordance with Agreement Accounting
Principles and as to which no Lien exists. No tax liens have been filed and no
claims are being asserted with respect to any such taxes. The charges, accruals
and reserves on the books of the Borrower, the REIT and the other Consolidated
Entities in respect of any taxes or other governmental charges are adequate.
5.7. Litigation and Contingent Obligations. Except as set forth on
Schedule 4, there is no litigation, arbitration, governmental investigation,
proceeding or inquiry pending or, to the knowledge of any of their officers,
threatened against or affecting the Borrower, the REIT or any of the other
Consolidated Entities that could reasonably be expected to have a Material
Adverse Effect or that seeks to prevent, enjoin or delay the making of any
Credit Extension. Other than any liability incident to any litigation,
arbitration or proceeding that could not reasonably be expected to have a
Material Adverse Effect, neither the Borrower nor the REIT has any material
Contingent Obligations not provided for or disclosed in the financial statements
referred to in Section 5.4.
5.8. ERISA. The Unfunded Liabilities of all Single Employer Plans do
not in the aggregate exceed $1,000,000. Each Plan complies in all material
respects with all applicable requirements of law and regulations, no Reportable
Event has occurred with respect to any Plan, neither the Borrower nor any other
member of the Controlled Group has withdrawn from any Plan or initiated steps to
do so, and no steps have been taken to reorganize or terminate any Plan.
5.9. Accuracy of Information. No information, exhibit or report
furnished by the Borrower, the REIT or any of the other Consolidated Entities to
the Agent or to any Lender in connection with the negotiation of, or compliance
with, the Loan Documents contained any material misstatement of fact or omitted
to state a material fact or any fact necessary to make the statements contained
therein not misleading.
5.10. Regulation U. Margin stock (as defined in Regulation U)
constitutes less than 25% of the value of those assets of the Borrower, the REIT
or any of the other Consolidated Entities which are subject to any limitation on
sale, pledge, or other restriction hereunder.
5.11. Material Agreements. Neither the Borrower nor the REIT nor any of
the other Consolidated Entities is a party to any agreement or instrument or
subject to any charter or other corporate, partnership or other restriction
which could reasonably be expected to have a Material Adverse Effect. Neither
the Borrower nor the REIT nor any of the other Consolidated Entities is in
default in the performance, observance or fulfillment of any of the obligations,
covenants or conditions contained in (i) any agreement to which it is a party,
which default could reasonably be expected to have a Material Adverse Effect or
(ii) any agreement or instrument evidencing or governing Indebtedness.
56
5.12. Compliance With Laws. Each of the Borrower, the REIT and the
other Consolidated Entities has complied with all applicable statutes, rules,
regulations, orders and restrictions of any domestic or foreign government or
any instrumentality or agency thereof having jurisdiction over the conduct of
their respective businesses or the ownership of their respective Property except
for any failure to comply with any of the foregoing which could not reasonably
be expected to have a Material Adverse Effect.
5.13. Ownership of Real Property; Existing Security Instruments. The
Borrower or the Operating Partnerships have good and marketable fee simple title
in all of the Real Property Assets and good title to all of their personal
property subject to no Lien of any kind except for Permitted Liens. The Borrower
or a Guarantor, as applicable, has good and marketable fee simple title in all
of the Unencumbered Assets. As of the date of this Agreement, there are no
options or other rights to acquire any of the Real Property Assets that run in
favor of any Person and there are no mortgages, deeds of trust, indentures, debt
instruments or other agreements creating a Lien against any of the Real Property
Assets other than Permitted Liens and, other than with respect to Unencumbered
Assets, Permitted Mortgage Debt.
5.14. No Default. No Default or Unmatured Default exists under or with
respect to any Loan Document. Neither the Borrower, the REIT or any other
Consolidated Entity or any of their respective Subsidiaries is in default in any
material respect beyond any applicable grace period under or with respect to any
other material agreement, instrument or undertaking to which it is a party or by
which it or any of its properties or assets is bound in any respect, the
existence of which default could result in a Material Adverse Effect.
5.15. Plan Assets; Prohibited Transactions. The Borrower is not an
entity deemed to hold "plan assets" within the meaning of 29 C.F.R. Section
2510.3-101 of an employee benefit plan (as defined in Section 3(3) of ERISA)
which is subject to Title I of ERISA or any plan (within the meaning of Section
4975 of the Code), and neither the execution of this Agreement nor the making of
Credit Extensions hereunder gives rise to a prohibited transaction within the
meaning of Section 406 of ERISA or Section 4975 of the Code.
5.16. Environmental Matters. In the ordinary course of its business,
the officers of the REIT consider the effect of Environmental Laws on the
business of the Borrower, the REIT and their Subsidiaries, in the course of
which they identify and evaluate potential risks and liabilities accruing due to
Environmental Laws. On the basis of this consideration, the Borrower and the
REIT have concluded that Environmental Laws cannot reasonably be expected to
have a Material Adverse Effect.
5.17. Investment Company Act. Neither the Borrower nor the REIT nor any
of the other Consolidated Entities is an "investment company" or a company
"controlled" by an "investment company," within the meaning of the Investment
Company Act of 1940, as amended.
5.18. Public Utility Holding Company Act. Neither the Borrower nor the
REIT nor any of the other Consolidated Entities is a "holding company" or a
"subsidiary company" of a "holding company," or an "affiliate" of a "holding
company" or of a "subsidiary company" of a
57
"holding company", within the meaning of the Public Utility Holding Company Act
of 1935, as amended.
5.19. Insurance. The certificate signed by an officer of the REIT, that
attests to the existence and adequacy of, and summarizes, the insurance carried
by the Borrower with respect to itself, the REIT and their Subsidiaries in
accordance with the requirements of Section 6.5, and that has been furnished by
the Borrower to the Agent, is complete and accurate. This summary includes the
insurer's or insurers' name(s), policy number(s), expiration date(s), amount(s)
of coverage, type(s) of coverage, and deductibles.
5.20. Property Manager or an Affiliate. As of the date hereof, the
manager of the Real Property Assets is the Borrower or an Affiliate of the
Borrower.
5.21. Assets of the REIT. The sole Assets of the REIT are (i) its
general partnership interest in the Borrower, (ii) such other Assets as are
incidental to or required in connection with the ownership of such general
partnership interest, and (iii) as set forth on Schedule 6. The aggregate value
of the Assets described in clauses (ii) and (iii) above do not exceed
$5,000,000. The REIT is the sole general partner of the Borrower.
5.22. REIT Status. The "REIT" is a "qualified real estate investment
trust" as defined in Section 856 of the Code.
5.23. Operations. The REIT conducts its business directly only through
the Borrower, except as described on Schedule 7, and the Borrower conducts its
business only in its own name, except as described on Schedule 8.
5.24. Stock. The REIT lists all of its outstanding shares of stock on
the New York Stock Exchange.
5.25. Ground Leases. With respect to those Real Property Assets in
which the Borrower or any other Consolidated Entity holds a leasehold estate
under a Ground Lease, with respect to each such Ground Lease (i) the Borrower or
the respective Consolidated Entity is the owner of a valid and subsisting
interest as tenant under the Ground Lease; (ii) the Ground Lease is in full
force and effect, unmodified and not supplemented by any writing or otherwise;
(iii) all rent, additional rent and other charges reserved therein have been
paid to the extent they are payable to the date hereof; (iv) the remaining term
of the Ground Lease is at least ten (10) years after the Facility Termination
Date; (v) the Borrower or the respective Consolidated Entity enjoys the quiet
and peaceful possession of the estate demised thereby, subject to any sublease;
(vi) the Borrower or the respective Consolidated Entity is not in default under
any of the terms thereof and there are no circumstances which, with the passage
of time or the giving of notice or both, would constitute an event of default
thereunder; (vii) the lessor under the Ground Lease is not in default under any
of the terms or provisions thereof on the part of the lessor to be observed or
performed; (viii) the lessor under the Ground Lease has satisfied all of its
repair or construction obligations, if any, to date pursuant to the terms of the
Ground Lease; (ix) Schedule 9 lists all the Ground Leases to which any of the
Real Property Assets is subject and all amendments and modifications thereto;
and (x) the lessor identified on Schedule 9 for each Ground Lease is the current
lessor under the related Ground Lease.
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5.26. Single Purpose. Except as set forth in Schedule 10, each
Operating Partnership is engaged only in the business of owning, operating and
developing Real Property Assets. No Operating Partnership owns or has any
interest in any Person. The sole partners and beneficial owners of each
Operating Partnership are and will continue to be, directly or indirectly, the
Borrower and/or the REIT. The principal place of business of each Operating
Partnership is, and will continue to be, the location of the Borrower's
principal place of business.
5.27. Status of Property. With respect to each Real Property Asset,
except as set forth on Schedule 10:
(i) No portion of any improvement on the Real Property Asset
is located in an area identified by the Secretary of Housing and Urban
Development or any successor thereto as an area having special flood
hazards pursuant to the National Flood Insurance Act of 1968 or the
Flood Disaster Protection Act of 1973, as amended, or any successor
law, or, if located within any such area, the Borrower or the
respective Consolidated Entity has obtained and will maintain the
insurance prescribed in clause (y) of Section 6.5(ii)(a) hereof.
(ii) To the best knowledge of the Borrower and the REIT, the
Borrower or the respective Consolidated Entity has obtained all
necessary certificates, licenses and other approvals, governmental and
otherwise, necessary for the operation of the Real Property Asset and
the conduct of its business and all required zoning, building code,
land use, environmental and other similar permits or approvals, all of
which are in full force and effect as of the date hereof and not
subject to revocation, suspension, forfeiture or modification.
(iii) To the best knowledge of the Borrower and the REIT, the
Real Property Asset and the present and contemplated use and occupancy
thereof are in material compliance with all applicable zoning
ordinances (without reliance upon grandfather provisions or adjoining
or other properties), building codes, land use and Environmental Laws,
laws relating to the disabled (including, but not limited to, the ADA)
and other similar laws.
(iv) The Real Property Asset is served by all utilities
required for the current or contemplated use thereof. All utility
service is provided by public utilities and the Real Property Asset has
accepted or is equipped to accept such utility service.
(v) All public roads and streets necessary for service of and
access to the Real Property Asset for the current or contemplated use
thereof have been completed, are serviceable and all-weather and are
physically and legally open for use by the public.
(vi) The Real Property Asset is served by public water and
sewer systems; or, if the Real Property Asset is not serviced by a
public water and sewer system, such alternate systems are adequate and
meet, in all material respects, all requirements and regulations of,
and otherwise comply in all material respects with, all Applicable
Laws.
(vii) Neither the Borrower nor any Consolidated Entity is
aware of any latent or patent structural or other significant
deficiency of the Real Property Asset. The Real
59
Property Asset is free of damage and waste that would materially and
adversely affect the value of the Real Property Asset, is in good
repair and there is no deferred maintenance, other than ordinary wear
and tear. The Real Property Asset is free from damage caused by fire or
other casualty. There is no pending or, to the actual knowledge of the
Borrower, the REIT or the respective Consolidated Entity, threatened
condemnation proceedings affecting the Real Property Asset, or any part
thereof.
(viii) To the best knowledge of the Borrower and the REIT, all
costs and expenses of any and all labor, materials, supplies and
equipment used in the construction of the improvements on the Real
Property Asset have either (a) been paid in full, (b) not yet due and
payable, or (c) are being contested in good faith by Borrower, the REIT
or the applicable Consolidated Entity. Subject to the Borrower's or the
respective Consolidated Entity's right to contest as set forth in any
Permitted Mortgage Debt related to such Real Property Asset, there are
no mechanics' or similar liens or claims that have been filed and
recorded for work, labor or materials that affects the Real Property
Asset.
(ix) To the best knowledge of the Borrower and the REIT, the
Borrower or the respective Consolidated Entity has paid in full for,
and is the owner of, all furnishings, fixtures and equipment (other
than tenants' property) used in connection with the operation of the
Real Property Asset, free and clear of any and all security interests,
liens or encumbrances, except for Permitted Liens and purchase money
financing which is not a Lien on the fee title of such Real Property
Asset and is incurred in the ordinary course of business.
(x) To the best knowledge of the Borrower and the REIT, all
liquid and solid waste disposal, septic and sewer systems located on
the Real Property Asset are in a good and safe condition and repair and
are in material compliance with all Applicable Laws.
(xi) All improvements on the Real Property Asset lie within
the boundaries and building restrictions of the legal description of
record of the Real Property Asset, no such improvements encroach upon
easements benefitting the Real Property Asset other than encroachments
that do not materially adversely affect the use or occupancy of the
Real Property Asset and no improvements on adjoining properties
encroach upon the Real Property Asset or easements benefitting the Real
Property Asset other than encroachments that do not materially
adversely affect the use or occupancy of the Real Property Asset. All
amenities, access routes or other items that materially benefit the
Real Property Asset are under direct control of the Borrower or the
respective Consolidated Entity, constitute permanent easements that
benefit all or part of the Real Property Asset or are public property,
and the Real Property Asset, by virtue of such easements or otherwise,
is contiguous to a physically open, dedicated all weather public
street, and has the necessary permits for ingress and egress.
(xii) If the Real Property Asset constitutes a legal
non-conforming use, the non-conforming Improvements may be rebuilt to
current density and used and occupied for such non-conforming purposes
if damaged or destroyed.
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(xiii) To the best knowledge of the Borrower and the REIT,
there are no delinquent taxes, ground rents, water charges, sewer
rents, assessments (including assessments payable in future
installments), insurance premiums, leasehold payments, or other
outstanding charges affecting the Real Property Asset.
(xiv) To the best knowledge of the Borrower and the REIT, the
Real Property Asset is assessed for real estate tax purposes as one or
more wholly independent tax lot or lots, separate from any adjoining
land or improvements not constituting a part of such lot or lots, and
no other land or improvements are assessed and taxed together with the
Real Property Asset or any portion thereof.
(xv) (a) The Borrower or the respective Consolidated Entity is
the sole owner of the entire lessor's interest in the Leases; (b) the
Leases are valid and enforceable; (c) the terms of all alterations,
modifications and amendments to the Leases are reflected in the
certified occupancy statement delivered to and approved by the Agent;
(d) with respect to Unencumbered Assets, none of the rents reserved in
the Leases have been assigned or otherwise pledged or hypothecated; (e)
none of the rents have been collected for more than one (1) month in
advance (other than rents in connection with Seasonal RV Sites); (f)
the premises demised under the Leases have been completed and the
tenants under the Leases have accepted the same and have taken
possession of the same on a rent-paying basis; (g) there exist no
offsets or defenses to the payment of any portion of the rents; (h)
with respect to Unencumbered Assets no Lease contains an option to
purchase, right of first refusal to purchase, or any other similar
provision; (i) no person or entity has any possessory interest in, or
right to occupy, the Real Property Asset except under and pursuant to a
Lease; (j) with respect to Unencumbered Assets, there are no prior
assignments, pledges, hypothecations or other encumbrances of any
Leases or any portion of rents due and payable or to become due and
payable thereunder which are presently outstanding; and (k) the Real
Property Asset is not subject to any Lease other than the Leases
described in the rent rolls delivered pursuant to Section 6.1.1, none
of which is a lease for commercial use (other than laundry, cable
television, vending and other similar commercial leases for services).
(xvi) No portion of the Real Property Asset has been or will
be purchased with proceeds of any illegal activity.
(xvii) To the best knowledge of the Borrower and the REIT, all
contracts, agreements, consents, waivers, documents and writings of
every kind or character at any time to which the Borrower or any
Consolidated Entity is a party to be delivered to the Agent pursuant to
any of the provisions hereof are valid and enforceable against the
Borrower and such Consolidated Entity and, to the best knowledge of
Borrower, are enforceable against all other parties thereto, and in all
respects are what they purport to be and, to the best knowledge of the
Borrower, to the extent that any such writing shall impose any
obligation or duty on the party thereto or constitute a waiver of any
rights which any such party might otherwise have, said writing shall be
valid and enforceable against said party in accordance with the terms,
except as such enforcement may be limited by applicable bankruptcy,
insolvency, reorganization or similar laws affecting the rights of
creditors generally.
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ARTICLE VI
COVENANTS
During the term of this Agreement, unless the Required Lenders shall
otherwise consent in writing:
6.1. Financial Reporting.
6.1.1 Financial Statements and Other Reports. The Borrower
will furnish to the Agent: (i) annual audited consolidated financial
statements of the REIT and its Consolidated Subsidiaries prepared in
accordance with Agreement Accounting Principles within 90 days of the
end of the REIT's fiscal year certified by nationally recognized
independent public accountants (which accountant's opinion shall be
unqualified), including the related consolidated statements of income,
cash flow and retained earnings and setting forth in comparative form
the figures for the corresponding prior year period, satisfactory to
the Agent; (ii) within 60 days after the close of each quarterly
accounting period in each fiscal year, the management-prepared
consolidated balance sheet of the REIT and its Consolidated
Subsidiaries as of the end of such quarterly period and the related
consolidated statements of income, cash flow and retained earnings for
such quarterly period and for the elapsed portion of the fiscal year
ended with the last day of such quarterly period, each prepared in
accordance with Agreement Accounting Principles; (iii) annual audited
statements of the Borrower and its Consolidated Subsidiaries prepared
in accordance with Agreement Accounting Principles within 90 days of
the end of the Borrower's fiscal year, certified by nationally
recognized independent public accountants (which accountant's opinion
shall be unqualified), including the related consolidated statements of
income, cash flow and retained earnings and setting forth in
comparative form the figures for the corresponding prior year period,
satisfactory to Agent; (iv) within 60 days after the close of each
quarterly accounting period in each fiscal year, the
management-prepared consolidated balance sheet of the Borrower and its
Consolidated Subsidiaries as of the end of such quarterly period and
the related consolidated statements of income, cash flow and retained
earnings for such quarterly period and for the elapsed portion of the
fiscal year ended with the last day of such quarterly period, each
prepared in accordance with Agreement Accounting Principles; and (v)
copies of all of the REIT's, the Borrower's and the Consolidated
Entities' quarterly and annual filings with the Securities and Exchange
Commission and all other publicly released information promptly after
their filing or mailing. The Borrower and the REIT will furnish such
additional reports or data, but no more often than on a quarterly
basis, as the Agent may reasonably request including, without
limitation, monthly operating statements, a certified rent roll, and
leasing and management reports for each Unencumbered Asset. The
Borrower and the REIT shall maintain a system of accounting capable of
furnishing all such information and data, and shall maintain their
books and records respecting financial and accounting matters in a
proper manner and on a basis consistent with that used in the
preparation of the Agreement Accounting Principles consolidated
financial statements of the Borrower. Financial reports requested by
the Agent of the Borrower shall be provided to the Agent no later than
(a) the later of (x) 15 days after such request and (y) 60 days after
the end of
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the fiscal quarter relating to the requested financial reports
described in clause (ii) or (iv) above or (b) 90 days after the end of
the fiscal year relating to such financial report described in clause
(i) or (iii) above.
6.1.2 Officer's Certificate; Comfort Letters. (i) At the time
of the delivery of the financial statements under Section 6.1.1 above,
the Borrower and the REIT shall provide a certificate of the REIT for
itself and as general partner of the Borrower that (x) such financial
statements have been prepared in accordance with Agreement Accounting
Principles (unless such financial statements are not required to be
prepared in accordance with Agreement Accounting Principles pursuant to
this Agreement) and fairly present the consolidated financial condition
and the results of operations of the REIT and its Consolidated
Subsidiaries, the Borrower and its Consolidated Subsidiaries and the
Real Property Assets, as applicable, on the dates and for the periods
indicated, subject, in the case of interim financial statements, to
usual year end adjustments, (y) to the best knowledge of the Borrower
and the REIT, no Default or Unmatured Default has occurred that is
continuing on the date of such certificate or, if any Default or
Unmatured Default has occurred and is continuing on such date,
specifying the nature and extent thereof and the action the Borrower
and the REIT propose to take in respect thereof, and (z) since the date
of the prior financial statements delivered pursuant to such clause no
change has occurred in the financial position of the Borrower or the
REIT or their respective Consolidated Subsidiaries, which change could
result in a Material Adverse Effect.
(ii) Within 60 days of the end of each calendar quarter, the
Borrower and the REIT shall provide a certificate of the REIT for
itself and as general partner of the Borrower certifying that no
Default or Unmatured Default has occurred, that there has been no
change in the REIT's tax status as a real estate investment trust as
defined under Section 856 of the Code, and demonstrating compliance
with the financial covenants set forth in Sections 6.14, 6.15, 6.16,
and 6.18 and the provisions of Sections 6.28 and 6.33 and containing
calculations verifying such compliance commencing with the calendar
quarter ending on June 30, 2002, provided that the certificate for the
last calendar quarter with respect to Sections 6.14, 6.15, 6.16 and
6.28 may be delivered within 90 days after the end of such fiscal year
with the audited financial statements for the year then ended.
6.1.3 Notice of Default or Litigation. Promptly after a
Responsible Officer obtains actual knowledge thereof, the Borrower and
the REIT shall give Agent notice of (i) the occurrence of a Default or
Unmatured Default, (ii) the occurrence of (x) any default that is not
cured, or any event of default, under any partnership agreement of the
Borrower or any Consolidated Entity, any mortgage, deed of trust,
indenture or other debt or security instrument, covering any of the
Assets of the Borrower, the REIT or any other Consolidated Entity or
(y) any event of default under any other material agreement to which
the Borrower or the REIT or any other Consolidated Entity is a party,
which, if not cured could result in a Material Adverse Effect, (iii)
any litigation or governmental proceeding pending or threatened (in
writing) against the Borrower, the REIT or any other Consolidated
Entity which could result in a Material Adverse Effect and (iv) any
other event, act or condition which could result in a Material Adverse
Effect. Each notice delivered pursuant to this Section 6.1.3 shall be
accompanied by a certificate of the REIT for itself and as general
partner of the Borrower setting forth the details of the occurrence
63
referred to therein and describing the actions the Borrower and the
REIT propose to take with respect thereto.
6.1.4 ERISA Information. The Borrower shall furnish to the
Agent (i) within 270 days after the close of each fiscal year, a
statement of the Unfunded Liabilities of each Single Employer Plan,
certified as correct by an actuary enrolled under ERISA and (ii) as
soon as possible and in any event within ten (10) days after the
Borrower knows that any Reportable Event has occurred with respect to
any Plan, a statement, signed by the chief financial officer of the
Borrower, describing said Reportable Event and the action which the
Borrower proposes to take with respect thereto.
6.1.5 Environmental Notices. The Borrower shall furnish to the
Agent, as soon as possible and in any event within ten (10) days after
receipt by the Borrower, a copy of (i) any notice or claim to the
effect that the Borrower, the REIT or any of the Consolidated Entities
is or may be liable to any Person as a result of the release by the
Borrower, the REIT or any of the other Consolidated Entities, or any
other Person of any toxic or hazardous waste or substance into the
environment, and (ii) any notice alleging any violation of any federal,
state or local environmental, health or safety law or regulation by the
Borrower, the REIT or any of the other Consolidated Entities.
6.1.6 Notice of Violation. The Borrower and the REIT will give
prompt notice to the Agent of the receipt by the Borrower, the REIT or
any other Consolidated Entity of any notice related to a violation of
any Applicable Laws and of the commencement of any proceedings or
investigations which relate to compliance with Applicable Laws that
could result in a Material Adverse Effect.
6.1.7 Other Information. The Borrower and the REIT shall
promptly furnish to the Agent such other information (including
non-financial information) as the Agent or any Lender may from time to
time reasonably request.
6.2. Use of Proceeds; Margin Regulations. All proceeds of each Advance
will be used by the Borrower and the REIT only in accordance with the provisions
of Section 2.20. No part of the proceeds of any Advance will be used by the
Borrower or the REIT to purchase or carry any margin stock (as defined in
Regulation U) or to extend credit to others for the purpose of purchasing or
carrying any margin stock.
6.3. Conduct of Business; Assets of the REIT.
(i) The Borrower and the REIT will, and will cause each other
Consolidated Entity to, do all things necessary to remain duly
incorporated or organized, validly existing and (to the extent
such concept applies to such entity) in good standing as a
domestic corporation, partnership or limited liability company
in its jurisdiction of incorporation or organization, as the
case may be, and maintain all requisite authority to conduct
its business in each jurisdiction in which its business is
conducted.
(ii) The Borrower will carry on and conduct its business in
substantially the same manner and substantially the same field
of enterprise as it is presently conducted.
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(iii) The REIT will carry on and conduct its business in
substantially the same manner and substantially the same field
of enterprise as it is presently conducted and will conduct
substantially all of its business only through the Borrower,
except as described in Schedule 7.
(iv) The REIT shall not own any Assets other than (a) its general
partnership interest in the Borrower, (b) such other Assets as
are incidental to or required in connection with the ownership
of such general partnership interest, and (c) as set forth on
Schedule 6. The aggregate value of the Assets described in
clauses (b) and (c) above shall not exceed $5,000,000.
6.4. Taxes. The Borrower and the REIT will, and will cause each of the
other Consolidated Entities to, timely file complete and correct United States
federal and applicable foreign, state and local tax returns required by law and
pay when due all taxes, assessments and governmental charges and levies upon it
or its income, profits or Property, except those which are being contested in
good faith by appropriate proceedings and with respect to which adequate
reserves have been set aside in accordance with Agreement Accounting Principles.
6.5. Insurance.
(i) The Borrower and the REIT will, and will cause each of the
other Consolidated Entities to maintain with financially sound
and reputable insurance companies insurance on itself and its
Other Assets in commercially reasonable amounts and furnish to
the Agent from time to time, upon written request,
certificates of insurance or certified copies or abstracts of
all insurance policies required under this Agreement and such
other information relating to such insurance as the Agent may
reasonably request.
(ii) With respect to each Real Property Asset, the Borrower and the
REIT will, and will cause each of the other Consolidated
Entities to, obtain and maintain, or cause to be maintained,
insurance providing at least the following coverages:
(a) insurance on the Real Property Assets insuring
against such risks as are customarily insured against by
owners of comparable properties, in each case in an amount
equal to 100% of the "Full Replacement Cost," providing for no
deductible in excess of $50,000. In addition, the Borrower
will obtain (1) flood hazard insurance if any portion of the
improvements is currently or at any time in the future located
in a federally designated "special flood hazard area" and (2)
earthquake insurance in commercially reasonable amounts in the
event the Real Property Asset is located in an area with a
high degree of seismic activity;
(b) commercial general liability insurance against
claims for personal injury, bodily injury, death or property
damage occurring upon, in or about the Real Property Asset,
such insurance (1) to be on the so-called "occurrence" form
with a combined single limit of not less than $1,000,000; (2)
to continue at not less than the aforesaid limit until
required to be changed by the Agent in writing by reason of
changed conditions making such protection inadequate; and (3)
to
65
cover at least the following hazards: (A) premises and
operations; and (B) products and completed operations on an
"if any" basis;
(c) business income and rent loss insurance (1)
covering all risks required to be covered by the insurance
provided for in subparagraph (a) above; (2) containing an
extended period of indemnity endorsement which provides that
after the physical loss to the improvements and personal
property has been repaired, the continued loss of income will
be insured until such income either returns to the same level
it was at prior to the loss, or the expiration of not less
than sixty (60) days from the date of the loss, whichever
first occurs, and notwithstanding that the policy may expire
prior to the end of such period; and (3) in an amount equal to
100% of the projected gross income from the Real Property
Asset for a period of not less than sixty (60) days;
(d) at all times during which structural
construction, repairs or alterations are being made with
respect to the Real Property Asset, builder's risk coverage
with respect to such Real Property Asset (or blanket builder's
risk coverage in an amount that Borrower reasonably deems
adequate with respect to all Real Property Assets undergoing
structured construction, repairs or alterations);
(e) comprehensive boiler and machinery insurance, if
applicable, on terms consistent with the commercial general
liability insurance policy required under subparagraph (b)
above;
(f) umbrella liability insurance in an amount not
less than $15,000,000 per occurrence on terms consistent with
the commercial general liability insurance policy required
under subparagraph (b) above; and
(g) such other insurance and in such amounts and
against such other insurable hazards which at the time are
commonly insured against for property similar to the Real
Property Asset located in or around the region in which the
Real Property Asset is located.
(iii) All insurance provided for hereunder shall be obtained under
valid and enforceable policies, and shall be issued by
financially sound and responsible insurance companies
authorized to do business in the state in which the Real
Property Asset is located. Each insurance company must have a
rating of "A" or better for claims paying ability assigned by
Standard & Poor's Rating Group or, if Standard & Poor's Rating
Group does not assign a rating for such insurance company,
such insurance company must have a general policy rating of
"A" or better and a financial class of "VIII" or better by
Best.
(iv) The Borrower will furnish to the Agent, on or before thirty
(30) days after the close of each of the Borrower's fiscal
years, a statement certified by the Borrower or a duly
authorized officer of the Borrower of the amounts of insurance
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maintained in compliance herewith, of the risks covered by such
insurance and of the insurance company or companies which carry
such insurance.
6.6. Compliance with Laws. The Borrower and the REIT will, and will
cause each of the other Consolidated Entities to, comply with all laws, rules,
regulations, orders, writs, judgments, injunctions, decrees or awards to which
it may be subject, including, without limitation, all Environmental Laws. The
Borrower and the REIT will, and will cause each of the other Consolidated
Entities to, take appropriate measures to prevent, and will not engage in or
knowingly permit, any illegal activities at any Real Property Asset.
6.7. Maintenance of Properties. The Borrower and the REIT will, and
will cause each of the other Consolidated Entities to, do all things necessary
to maintain, preserve, protect and keep its Property in good repair, working
order and condition, and make all necessary and proper repairs, renewals and
replacements so that its business carried on in connection therewith may be
properly conducted at all times.
6.8. Inspection. The Borrower and the REIT will, and will cause each of
the other Consolidated Entities to, permit the Agent and the Lenders, by their
respective representatives and agents, to inspect any of the Property, books and
financial records of the Borrower, the REIT and each of the other Consolidated
Entities, to examine and make copies of the books of accounts and other
financial records of the Borrower, the REIT and each of the other Consolidated
Entities, to discuss the affairs, finances and accounts of the Borrower, the
REIT and each of the other Consolidated Entities with, and to be advised as to
the same by, their respective officers and to visit and inspect any of the Real
Property Assets, all at such reasonable times and intervals as the Agent or any
Lender may designate.
6.9. Stock. The REIT will cause all of its issued and outstanding
shares of stock to be listed for trading on the New York Stock Exchange.
6.10. Change in Rating. The Borrower will promptly notify the Agent in
writing of any change, downgrade or withdrawal, or threatened change, downgrade
or withdrawal of the Borrower's Unsecured Debt Rating.
6.11. Settlement/Judgment Notice. The Borrower agrees that it will ,
within ten (10) days after a settlement of any claim, liability or obligation of
the Borrower, the REIT or any Consolidated Entity in excess of $1,000,000,
provide written notice to the Agent of such settlement together with a
certification signed by the REIT for itself and as general partner of the
Borrower certifying that, based upon the most recent quarterly consolidated
financial statements of the Borrower, the REIT and their Consolidated
Subsidiaries, such settlement will not cause the Borrower or the REIT to violate
the financial covenants set forth in Sections 6.14, 6.15 and 6.16 hereof. The
Borrower further agrees that it will, within ten (10) days after entry of a
final judgment against the Borrower, the REIT or any Consolidated Entity in
excess of $1,000,000 or final judgments against the Borrower, the REIT or any
Consolidated Entity in excess of $1,000,000 in the aggregate during the
immediately preceding twelve (12) month period, provide written notice to the
Agent of such judgment together with a certification signed by the REIT for
itself and as general partner of the Borrower certifying based upon the most
recent quarterly
67
consolidated financial statements of the Borrower, such judgment will not cause
the Borrower to violate the financial covenants set forth in Sections 6.14 and
6.15 hereof.
6.12. Acceleration Notice. The Borrower agrees that it will, within ten
(10) days after receipt of written notice that any Indebtedness of the Borrower,
the REIT or any Consolidated Entity has been accelerated, provide written notice
to the Agent of such acceleration.
6.13. Lien Searches; Title Searches. In addition to searches and
endorsements that the Agent may require in connection with an Advance, the
Borrower will, upon the Agent's request therefor given from time to time, but
not more frequently than annually, unless a Default shall have occurred and be
continuing or such Title Search indicates a Lien other than a Permitted Lien or
another state of facts not reasonably satisfactory to the Agent, furnish to the
Agent, at the Borrower's sole cost and expense, (a) copies of all owners title
policies for each of the Unencumbered Assets (including copies of all
endorsements and back-up documentation relating to each such policies), (b) a
recent survey with respect to each Unencumbered Asset reasonably satisfactory in
form and substance to the Agent or the Lender requesting such survey, (c)
reports of UCC, tax lien, judgment and litigation searches with respect to the
Borrower and each of the other Consolidated Entities, and (d) current searches
of title to each of the Real Property Assets (each, a "Title Search"). Such
Title Searches and lien searches required under this Agreement shall be
conducted by search firms designated by the Agent in each of the locations
designated by the Agent.
6.14. Minimum Net Worth. Consolidated Net Worth shall not, at any time,
be less than $500,000,000, plus 85% of the net proceeds (after payment of
underwriter and placement fees and other expenses directly related to such
equity offering) and other consideration received from subsequent equity
offerings by the REIT following the Closing Date, calculated in accordance with
Agreement Accounting Principles.
6.15. Indebtedness.
(i) Consolidated Indebtedness shall not exceed at any time 50%
of the total Market Value of all Assets of the Borrower, the REIT and
their Consolidated Subsidiaries (including, for purposes of this
subparagraph (i), a pro rata portion of the Book Value of the Assets of
any Joint Venture or other Person in which the Borrower, the REIT or
any of their Consolidated Subsidiaries holds an equity or ownership
interest, to the extent that the same is not otherwise reflected in the
amount of the Investment in such Joint Venture or other Person that is
included in the determination of the Assets of the Borrower, the REIT
and their Consolidated Subsidiaries; such pro rata portion shall be in
the proportion of such equity or ownership interest in such Joint
Venture or other Person). In the event that this covenant is breached
solely as a result of a change in the appropriate Market Capitalization
Rate by the Agent and the Required Lenders, such breach shall not be
deemed a Default unless the Borrower and the REIT fail to cure such
breach within thirty (30) days of the date of such breach.
(ii) Consolidated Unsecured Indebtedness shall not exceed at
any time 50% of Total Unencumbered Assets. In the event that this
covenant is breached solely as a result of a change in the appropriate
Market Capitalization Rate by the Agent and the Required
68
Lenders, such breach shall not be deemed a Default unless the Borrower
and the REIT fail to cure such breach within thirty (30) days of the
date of such breach.
(iii) Consolidated Secured Indebtedness shall not exceed at
any time 40% of the total Market Value of all Assets of the Borrower,
the REIT and their Consolidated Subsidiaries (including, for purposes
of this subparagraph (iii), a pro rata portion of the Book Value of the
Assets of any Joint Venture or other Person in which the Borrower, the
REIT or any of their Consolidated Subsidiaries holds an equity or
ownership interest, to the extent that the same is not otherwise
reflected in the amount of the Investment in such Joint Venture or
other Person that is included in the determination of the Assets of the
Borrower, the REIT and their Consolidated Subsidiaries; such pro rata
portion shall be in the proportion of such equity or ownership interest
in such Joint Venture or other Person). In the event that this covenant
is breached solely as a result of a change in the appropriate Market
Capitalization Rate by the Agent and the Required Lenders, such breach
shall not be deemed a Default unless the Borrower and the REIT fail to
cure such breach within thirty (30) days of the date of such breach.
(iv) Not more than 40% of the Consolidated Secured
Indebtedness shall at any time be Recourse Debt. In the event that this
covenant is breached solely as a result of a change in the appropriate
Market Capitalization Rate by the Agent and the Required Lenders, such
breach shall not be deemed a Default unless the Borrower and the REIT
fail to cure such breach within thirty (30) days of the date of such
breach.
6.16. Coverage Ratios.
(i) The ratio of (x) Consolidated EBITDA (less Minimum Capital
Expenditure Reserves except to the extent such reserves have been taken
into account in determining Consolidated EBITDA) for any period of
twelve consecutive months ending on the last day of each of the
Borrower's fiscal quarters (each such period, a "Base Period"), to (y)
Debt Service of the Borrower, the REIT and their Consolidated
Subsidiaries (without duplication) for such Base Period shall not at
any time be less than 2.25 to 1.
(ii) The ratio of (x) Consolidated EBITDA (less Minimum
Capital Expenditure Reserves except to the extent such reserves have
been taken into account in determining Consolidated EBITDA) for any
Base Period, to (y) the sum of Debt Service plus Fixed Charges of the
Borrower, the REIT and their Consolidated Subsidiaries (without
duplication) for such Base Period shall not at any time be less than
1.85 to 1.
(iii) The ratio of (x) Net Operating Income from the
Unencumbered Assets (less Minimum Capital Expenditure Reserves, except
to the extent such reserves have been taken into account in determining
Net Operating Income) for any Base Period to (y) Debt Service with
respect to all Consolidated Unsecured Indebtedness for such Base Period
shall not at any time be less than 1.80 to 1.
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6.17. Equity or Debt Offerings. All net proceeds (after payment of
underwriter and placement fees and other expenses directly related to such
equity or debt offering) from any equity or debt offering by the REIT shall be
immediately distributed to the Borrower.
6.18. Minimum Asset Value. The Market Value of all Unencumbered Assets
shall at all times equal or exceed $300,000,000.
6.19. Managers. The Real Property Assets shall at all times be managed
by the Borrower or an Affiliate of the Borrower or the REIT. If (i) any manager
shall become insolvent or (ii) a Default shall occur and be continuing, then the
Agent and the Required Lenders, at their option, may require the Borrower to
engage a bona-fide, independent third party management agent approved by the
Agent and the Required Lenders in their sole discretion to manage the Real
Property Assets. Such management agent shall (a) be engaged by the Borrower
pursuant to a written management agreement that complies with the terms hereof
and is otherwise satisfactory to the Agent and the Required Lenders in all
respects and (b) execute and deliver a Subordination of Management Agreement.
6.20. Further Assurances. The Borrower will, at the Borrower's sole
cost and expense, at any time and from time to time upon request of the Agent
take or cause to be taken any action and execute, acknowledge, deliver or record
any further documents, opinions, negative pledge agreements or other instruments
which the Agent or any Lender in its reasonable discretion deems necessary or
appropriate to carry out the purposes of this Agreement and the other Loan
Documents including to consummate the transfer or sale of the Loan or any
portion thereof.
6.21. REIT Status. The REIT will at all times maintain its status as a
"qualified real estate investment trust" under Section 856 of the Code.
6.22. Preparation of Environmental Reports. At the request of the Agent
or the Required Lenders, from time to time, the Borrower will provide to the
Agent, within thirty (30) days after such request, at the expense of the
Borrower and the REIT, an Environmental Report for all Real Property Assets that
have been acquired after the date hereof and with respect to any Real Property
Asset for which the Agent has a reasonable basis for requiring such an
Environmental Report (including, without limitation, the fact that an
environmental report was not delivered at or prior to the Closing Date with
respect to a Real Property Asset owned on the Closing Date or there is a basis
to believe that there may be Hazardous Materials or a threat of a release of
Hazardous Materials with respect to such Real Property Asset) as described in
such request. Without limiting the generality of the foregoing, if the Agent or
the Required Lenders determine at any time that a material risk exists that any
such Environmental Report will not be provided within the time referred to
above, the Agent may retain an environmental consulting firm to prepare such
Environmental Report at the expense of the Borrower and the REIT, and the
Borrower hereby grants, and agrees to cause any Consolidated Entity which owns
any Real Property Asset described in such request to grant at the time of such
request, to the Agent, such firm and any agents or representatives thereof an
irrevocable non-exclusive license, subject to the rights of tenants, to enter
onto their respective Real Property Assets to undertake such an assessment.
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6.23. Documentation following Acquisition of an Interest in Real
Property Assets. The Borrower will provide to the Agent, not later than fifteen
(15) days after the close of each quarterly accounting period in each fiscal
year, the following information with respect to each acquisition of an interest
in a Real Property Asset (which shall include only Permitted Investments) by the
Borrower, the REIT or any Consolidated Entity during such prior quarter: (i) the
location of the Real Property Asset; (ii) the Net Operating Income of the Real
Property Asset; (iii) the number of units in the Real Property Asset; and (iv)
the purchase price of the Real Property Asset. Within thirty (30) days following
the delivery of such information, upon request of the Agent or any Lender, the
Borrower shall provide, within thirty (30) days of such request, the following
information: (i) the closing statement relating to such acquisition, (ii) a
description of the property acquired, (iii) a statement of condition of such
Real Property Asset prepared by the Borrower's internal or approved external
construction engineer, (iv) an historical operating statement of such Real
Property Asset for such period as may be available to the Borrower and a current
rent roll for such Real Property Asset and (v) such other information as may be
reasonably requested by the Agent, including any Environmental Reports prepared
in accordance with Section 6.30.
6.24. Preparation of Engineering Reports. At the request of the Agent
from time to time, the Borrower will provide to the Agent, within thirty (30)
days after such request, at the expense of the Borrower and the REIT, an
Engineering Report for all Real Property Assets acquired after the date hereof,
and, with respect to any Real Property Asset, if the Agent has a reasonable
basis to require an Engineering Report based on an inspection of such Real
Property Asset or such other information that may have come to the Agent's
attention, as described in such request.
6.25. Liens. The Borrower, the REIT and the other Consolidated Entities
will not, create, incur, assume or suffer to exist, directly or indirectly, any
Lien on any Unencumbered Asset, or any other Real Property Asset, other than the
following (collectively, the "Permitted Liens"):
(i) Liens existing on the Closing Date and set forth on Schedule
5 hereto;
(ii) Liens for taxes not yet due or which are being contested in
good faith by appropriate proceedings diligently conducted and with
respect to which adequate reserves are being maintained in accordance
with Agreement Accounting Principles;
(iii) Statutory Liens of landlords and Liens of mechanics,
materialmen and other Liens imposed by Law (other than any Lien imposed
by ERISA) created in the ordinary course of business for amounts not
yet due or which are being contested in good faith by appropriate
proceedings diligently conducted, and with respect to which adequate
bonds have been posted if required to do so by Applicable Law;
(iv) Easements, rights-of-way, zoning and similar restrictions
and other similar charges or encumbrances not interfering with the
ordinary conduct of the business of the Borrower and which do not
detract materially from the value of any of the Real Property Assets to
which they attach or impair materially the use thereof by the Borrower;
and
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(v) With respect to Real Property Assets that are not
Unencumbered Assets, Permitted Mortgage Debt.
6.26. Restriction on Fundamental Changes.
(i) Without the prior written consent of the Agent and the
Required Lenders, which consent may be withheld in the sole and
absolute discretion of the Agent and the Required Lenders, the
Borrower, the REIT and the other Consolidated Entities will not enter
into any merger or consolidation with, or sell, lease, transfer or
otherwise dispose of any Substantial Assets to, any Person other than
the Borrower, the REIT or a Wholly-Owned Subsidiary of the Borrower or
the REIT. Notwithstanding the foregoing, neither the Borrower, the REIT
nor any Consolidated Entity shall enter into any arrangement, directly
or indirectly, whereby the Borrower, the REIT or any Consolidated
Entity shall sell or transfer any Real Property Asset (in a single or
multiple transaction) owned by any of them in order then or thereafter
to lease such property or lease other Real Property Asset that it
intends to use for substantially the same purpose as the Real Property
Asset being sold or transferred.
(ii) Notwithstanding the foregoing, the Borrower and the other
Consolidated Entities may enter into a merger or consolidation,
provided that following such merger or consolidation, the Borrower is
the surviving entity of such merger or consolidation and the REIT or an
entity wholly owned and controlled by the REIT (i) is the sole general
partner of the Borrower, and (ii) owns at least a 51% economic
ownership interest in the Borrower.
(iii) Xxxx Xxxxxxxx will, for so long as he is living, at all
times own, in the aggregate, at least 350,000 OP Units in the Borrower
and shares of common stock in the REIT.
6.27. Transactions with Affiliates. The Borrower, the REIT and the
other Consolidated Entities will not enter into any material transaction or
series of related transactions, whether or not in the ordinary course of
business, with any Affiliate of the Borrower, other than on terms and conditions
substantially as favorable as would be obtainable at the time in a comparable
arm's-length transaction with a Person other than an Affiliate of the Borrower.
6.28. Distributions. The REIT and the Borrower (without duplication)
will not pay or declare Distributions (i) if a Default has occurred and is
continuing or (ii) that in the aggregate exceed (a) ninety percent (90%) of the
Funds From Operations of Borrower individually and combined with the REIT
(without duplication), respectively, in any four consecutive calendar quarters
(or if four consecutive calendar quarters have not passed since the date hereof,
the quarterly periods from the date hereof), (b) the amount necessary to
maintain the REIT's status as a real estate investment trust under Section 856
of the Code, or (c) the amount necessary for the REIT to avoid the payment of
any federal income or excise tax, whichever (a), (b) or (c) is greatest. Any
Distributions or dividends or other sums received by the REIT must be paid
promptly by the REIT as Distributions but in no event later than ten (10)
Business Days after such funds have been received by the REIT. For purposes of
the calculation only, Funds From
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Operations shall be determined without taking into account the effect of
Distributions on either Preferred OP Units or Common OP Units.
6.29. Restriction on Prepayment of Indebtedness. Neither the Borrower
nor the REIT will prepay the principal amount, in whole or in part, of any
Unsecured Debt other than the Obligations after the occurrence of any Default.
6.30. Real Property Assets. Neither the Borrower, the REIT nor any
other Consolidated Entity will acquire any Real Property Asset unless an
Environmental Report for such Real Property Asset dated within six (6) months of
the proposed acquisition date has been prepared and, if requested in the Agent's
sole discretion, delivered to the Agent and such Environmental Report is
satisfactory to the Agent in all material respects.
6.31. Organizational Documents. Neither the Borrower, the REIT nor any
other Consolidated Entity will make any amendments or modifications to its
partnership agreement, corporate charter, by-laws, certificate of incorporation,
articles of organization, operating agreement or other organizational documents
which would have a Material Adverse Effect without the prior approval of the
Agent and the Required Lenders; notwithstanding the foregoing, the Agent will be
promptly notified of all such changes (other than modifications and amendments
relating solely to the admission or deletion of limited partners or changes in
their limited partnership interests, unless such limited partner is Xxxx
Xxxxxxxx).
6.32. Restrictions on Investments. Neither the Borrower, the REIT or
any Consolidated Entity will make or suffer to exist any Investments (including
without limitation, loans and advances to, and other Investments in,
Subsidiaries), or commitments therefor, or to create any Subsidiary or to become
or remain a partner in any partnership or joint venture, or to make any
Acquisition of any Person, except:
(i) marketable direct or guaranteed obligations of the United
States of America that mature within one (1) year from the date of
purchase by the Borrower, the REIT or any Consolidated Entity;
(ii) marketable direct obligations of any of the following:
Federal Home Loan Mortgage Corporation, Student Loan Marketing
Association, Federal Home Loan banks, Federal national Mortgage
Association, Government National Mortgage association, Bank for
Cooperatives, Federal Intermediate Credit Banks, Federal Financing
Banks, Export-Import Bank of the United States, Federal Land Bank, or
any other agency or instrumentality of the United States of America;
(iii) demand deposits, certificates of deposit, bankers
acceptances and time deposits of United States banks having total
assets in excess of $100,000,000.00; provided, however, that the
aggregate amount at any time so invested with any single bank having
total assets of less than $1,000,000,000.00 will not exceed
$200,000.00;
(iv) securities commonly known as "commercial paper" issued by
a corporation organized and existing under the laws of the United
States of America or any State which at the times of purchase are rate
by Xxxxx'x Investors Service, Inc. or by Standard & Poor's Ratings
Services at not less than "P 2" if then rated by Moody's
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Investors Service, Inc., and not less than "A 2", if then rated by
Standard & Poor's Ratings Services;
(v) mortgage-backed securities guaranteed by the Government
National Mortgage Association, the Federal National Mortgage
Association or the Federal Home Loan Mortgage Corporation and other
mortgage-backed bonds which at the time of purchase are rated by
Xxxxx'x Investors Service, Inc. or by Standard & Poor's Ratings
Services at not less than "Aa" if then rated by Xxxxx'x Investors
Service, Inc. and not less than "AA" if then rated by Standard & Poor's
Ratings Services;
(vi) repurchase agreements having a term not greater than 90 days
and fully secured by securities described in the foregoing subsection
(a), (b) or (e) with banks described in the foregoing subsection (c) or
with financial institutions or other corporations having total assets
in excess of $500,000,000.00;
(vii) shares of so-called "money market funds" registered with
the SEC under the Investment Company Act of 1940 which maintain a level
per-share value, invest principally in investments described in the
foregoing subsections (a) through (f) and have total assets in excess
of $50,000,000.00; and
(viii) Permitted Investments.
6.33. RV Sites. Not more than fifteen percent (15%) (in the aggregate)
of the Unit pads or sites on the Real Property Assets that are actually
available and capable of being leased or rented and that may be legally leased
or rented pursuant to Applicable Laws will be designated, reserved for, or
leased or rented as Seasonal RV Sites or parking areas. For purposes hereof,
"Seasonal RV Sites" means those sites available for lease to seasonal
recreational vehicle tenants who wish to spend only a portion of the season at a
particular Real Property Asset.
6.34. Plans. The Borrower, the REIT and the other Consolidated Entities
shall not, nor shall they permit any member of their respective Controlled Group
to, (i) take any action which would (A) increase the aggregate present value of
the Unfunded Liabilities under all Plans or withdrawal liability under a
Multiemployer Plan for which the Borrower, the REIT or any other Consolidated
Entity or any member of their respective Controlled Groups (determined without
reference to Section 414(m) or (o) of the Code, if liabilities of entities in
the Borrower's, the REIT's or the other Consolidated Entities' Controlled Group
solely by reason of Section 414(m) or (o) of the Code could not result in
liability to the Borrower, the REIT or any other Consolidated Entity) to an
amount in excess of $1,000,000.00 or (B) result in liability or Contingent
Obligation for any post-retirement benefit under any "welfare plan" (as defined
in Section 3(1) of ERISA), or any withdrawal liability or exit fee or charge
with respect to any "welfare plan" (as defined in Section 3(1) of ERISA), other
than liability for continuation coverage under Part 6 of Title I of ERISA, or
state laws which require similar continuation coverage for which the employee
pays approximately the full cost of coverage if the taking of such action under
this clause (i) has, or could reasonably be expected to have, a Material Adverse
Effect, or (ii) engage in any transaction prohibited by Section 408 of ERISA or
Section 4975 of the Code.
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ARTICLE VII
DEFAULTS
Each of the following events, acts, occurrences or conditions shall
constitute a Default under this Agreement, regardless of whether such event,
act, occurrence or condition is voluntary or involuntary or results from the
operation of law or pursuant to or as a result of compliance by any Person with
any judgment, decree, order, rule or regulation of any court or administrative
or governmental body:
7.1. Failure to Make Payments. The Borrower and the REIT shall (i)
default in the payment when due of any principal of any Loan, or (ii) default in
the payment within five (5) days after the due date of (x) any interest on any
Loan or (y) any fees or other amounts owing hereunder.
7.2. Breach of Representation or Warranty. Any representation or
warranty made by the Borrower, the REIT or any other Consolidated Entity herein
or in any other Loan Document or in any certificate or statement delivered
pursuant hereto or thereto shall prove to be false or misleading in any material
respect on the date as of which made or deemed made: provided, however, that if
such breach is capable of being cured, then the Borrower shall have a period of
thirty (30) days after delivery of notice from the Agent to cure any such
breach.
7.3. Breach of Covenants.
(i) The Borrower, the REIT or any other Consolidated Entity
shall fail to perform or observe any agreement, covenant or obligation
arising under Sections 6.14, 6.15, 6.16, 6.18, 6.21, 6.25 (other than
Liens which are placed on a Real Property Asset without the consent of
the Borrower, the REIT or any Consolidated Entity), 6.26, 6.28, 6.29,
6.30 and 6.32.
(ii) The Borrower, the REIT or any of the other Consolidated
Entities shall fail to perform or observe any agreement, covenant or
obligation arising under this Agreement (except those described in
Sections 7.1, 7.2 and 7.3(i) above), and such failure shall continue
uncured for thirty (30) days after delivery of notice thereof, or such
longer period of time as is reasonably necessary to cure such failure,
provided that the Borrower has commenced and is diligently prosecuting
the cure of such failure and cures it within ninety (90) days.
(iii) The Borrower, the REIT or any other Consolidated Entity
shall fail to perform or observe any agreement, covenant or obligation
arising under any provision of the Loan Documents other than this
Agreement, which failure shall continue after the end of any applicable
grace period provided therein.
7.4. Default Under Other Agreements. The Borrower, the REIT or any
other Consolidated Entity shall default beyond any applicable grace period in
the payment, performance or observance of any obligation or condition with
respect to any Indebtedness in excess of $5,000,000 or any other event shall
occur or condition exist, if the effect of such default, event or condition is
to accelerate the maturity of any such Indebtedness or to permit
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(without regard to any required notice or lapse of time) the holder or holders
thereof, or any trustee or agent for such holders, to accelerate the maturity of
any such Indebtedness, or any such Indebtedness shall become or be declared to
be due and payable prior to its stated maturity and the forgoing conditions are
not cured within thirty (30) days after the condition occurs.
7.5. Bankruptcy, etc. (i) The Borrower, the REIT or any Significant
Consolidated Entity shall commence a voluntary case concerning itself under the
Bankruptcy Code; or (ii) an involuntary case is commenced against the Borrower,
the REIT or any Significant Consolidated Entity and the petition is not
contested within sixty (60) days, or is not dismissed within ninety (90) days,
after commencement of the case or (iii) a custodian (as defined in the
Bankruptcy Code) is appointed for, or takes charge of, all or substantially all
of the property of the Borrower, the REIT, any other Significant Consolidated
Entity or the Borrower, the REIT or any Significant Consolidated Entity
commences any other proceedings under any reorganization, arrangement,
adjustment of debt, relief of debtors, dissolution, insolvency or liquidation or
similar law of any jurisdiction whether now or hereafter in effect relating to
the Borrower, the REIT or any Significant Consolidated Entity or there is
commenced against the Borrower, the REIT or any Significant Consolidated Entity
any such proceeding which remains undismissed for a period of ninety (90) days;
or (iv) any order of relief or other order approving any such case or proceeding
is entered; or (v) the Borrower, the REIT or any Significant Consolidated Entity
is adjudicated insolvent or bankrupt; or (vi) the Borrower, the REIT or any
Significant Consolidated Entity suffers any appointment of any custodian or the
like for it or any substantial part of its property to continue undischarged or
unstayed for a period of ninety (90) days; or (vii) the Borrower, the REIT or
any Significant Consolidated Entity makes a general assignment for the benefit
of creditors; or (viii) the Borrower, the REIT or any Significant Consolidated
Entity shall fail to pay, or shall state that it is unable to pay, or shall be
unable to pay, its debts generally as they become due; or (ix) the Borrower, the
REIT or any Significant Consolidated Entity shall call a meeting of its
creditors with a view to arranging a composition or adjustment of its debt; or
(x) the Borrower, the REIT or any Significant Consolidated Entity shall by any
act or failure to act consent to, approve of or acquiesce in any of the
foregoing; or (xi) any corporate, partnership or limited liability company
action is taken by the Borrower, the REIT or any Significant Consolidated Entity
for the purpose of effecting any of the foregoing.
7.6. Receivership. Without the application, approval or consent of the
Borrower, the REIT or any Significant Consolidated Entity, a receiver, trustee,
examiner, liquidator or similar official shall be appointed for the Borrower,
the REIT or any Significant Consolidated Entity or any Substantial Portion of
their Property, or a proceeding described in Section 7.5(iii) shall be
instituted against the Borrower, the REIT or any Significant Consolidated Entity
and such appointment continues undischarged or such proceeding continues
undismissed or unstayed for a period of 30 consecutive days.
7.7. Condemnation. Any court, government or governmental agency shall
condemn, seize or otherwise appropriate, or take custody or control of, all or
any portion of the Property of the Borrower, the REIT or any Consolidated Entity
which, when taken together with all other Property of the Borrower, the REIT or
any Consolidated Entity so condemned, seized, appropriated, or taken custody or
control of, during the twelve-month period ending with the month in which any
such action occurs, constitutes a Substantial Portion.
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7.8. Unfunded Liabilities. The Unfunded Liabilities of all Single
Employer Plans shall exceed in the aggregate $1,000,000 or any Reportable Event
shall occur in connection with any Plan.
7.9. Change in Control. Any Change in Control shall occur.
7.10. Guaranty. Any Guaranty shall fail to remain in full force or
effect or any action shall be taken to discontinue or to assert the invalidity
or unenforceability of any Guaranty, or any Guarantor shall fail to comply with
any of the terms or provisions of any Guaranty to which it is a party, or any
Guarantor shall deny that it has any further liability under any Guaranty to
which it is a party, or shall give notice to such effect.
7.11. Judgments. One or more judgments or decrees (i) in an aggregate
amount of $5,000,000 or more are entered against the Borrower, the REIT or any
other Consolidated Entity in any consecutive twelve (12) month period or (ii)
which, with respect to the Borrower, the REIT and the other Consolidated
Entities, could result in a Material Adverse Effect, shall be entered by a court
or courts of competent jurisdiction against any of such Persons (other than any
judgment as to which, and only to the extent, a reputable insurance company has
acknowledged coverage of such claim in writing) and (x) any such judgments or
decrees shall not be stayed (by appeal or otherwise), discharged, paid, bonded
or vacated within thirty (30) days or (y) enforcement proceedings shall be
commenced by any creditor on any such judgments or decrees.
7.12. REIT. The REIT fails to remain a publicly-traded real estate
investment trust in good standing with the New York Stock Exchange and with the
Securities and Exchange Commission.
7.13. Material Adverse Effect. If any Material Adverse Effect shall
occur (other than a down grade, withdrawal or termination of the Borrower's or
the REIT's Unsecured Debt Rating).
ARTICLE VIII
ACCELERATION, WAIVERS, AMENDMENTS AND REMEDIES
8.1. Acceleration; Facility LC Collateral Account.
(i) If any Default described in Section 7.5 or 7.6 occurs with
respect to the Borrower, the obligations of the Lenders to
make Loans hereunder and the obligation and power of the LC
Issuer to issue Facility LCs shall automatically terminate and
the Obligations shall immediately become due and payable
without any election or action on the part of the Agent, the
LC Issuer or any Lender and the Borrower will be and become
thereby unconditionally obligated, without any further notice,
act or demand, to pay to the Agent an amount in immediately
available funds, which funds shall be held in the Facility LC
Collateral Account, equal to the difference of (x) the amount
of LC Obligations at such time, less (y) the amount on deposit
in the Facility LC Collateral Account at such time which is
free and clear of all rights and claims of third parties and
has not been applied against the Obligations (such difference,
the "Collateral Shortfall Amount"). If any other Default
occurs, the Required Lenders (or the Agent with the consent of
the
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Required Lenders) may (a) terminate or suspend the obligations
of the Lenders to make Loans hereunder and the obligation and
power of the LC Issuer to issue Facility LCs, or declare the
Obligations to be due and payable, or both, whereupon the
Obligations shall become immediately due and payable, without
presentment, demand, protest or notice of any kind, all of
which the Borrower hereby expressly waives, and (b) upon
notice to the Borrower and in addition to the continuing right
to demand payment of all amounts payable under this Agreement,
make demand on the Borrower to pay, and the Borrower will,
forthwith upon such demand and without any further notice or
act, pay to the Agent the Collateral Shortfall Amount, which
funds shall be deposited in the Facility LC Collateral
Account.
(ii) If at any time while any Default is continuing, the Agent
determines that the Collateral Shortfall Amount at such time
is greater than zero, the Agent may make demand on the
Borrower to pay, and the Borrower will, forthwith upon such
demand and without any further notice or act, pay to the Agent
the Collateral Shortfall Amount, which funds shall be
deposited in the Facility LC Collateral Account.
(iii) The Agent may, at any time or from time to time after funds
are deposited in the Facility LC Collateral Account, apply
such funds to the payment of the Obligations and any other
amounts as shall from time to time have become due and payable
by the Borrower to the Lenders or the LC Issuer under the Loan
Documents.
(iv) At any time while any Default is continuing, neither the
Borrower nor any Person claiming on behalf of or through the
Borrower shall have any right to withdraw any of the funds
held in the Facility LC Collateral Account. After all of the
Obligations have been indefeasibly paid in full and the
Aggregate Commitment has been terminated, any funds remaining
in the Facility LC Collateral Account shall be returned by the
Agent to the Borrower or paid to whomever may be legally
entitled thereto at such time.
(v) If, within 45 days after acceleration of the maturity of the
Obligations or termination of the obligations of the Lenders
to make Loans and the obligation and power of the LC Issuer to
issue Facility LCs hereunder as a result of any Default (other
than any Default as described in Section 7.5 or 7.6 with
respect to the Borrower) and before any judgment or decree for
the payment of the Obligations due shall have been obtained or
entered, the Required Lenders (in their sole discretion) shall
so direct, the Agent shall, by notice to the Borrower, rescind
and annul such acceleration and/or termination.
8.2. Amendments. Subject to the provisions of this Section 8.2, the
Required Lenders (or the Agent with the consent in writing of the Required
Lenders) and the Borrower may enter into agreements supplemental hereto for the
purpose of adding or modifying any provisions to the Loan Documents or changing
in any manner the rights of the Lenders or the Borrower
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hereunder or waiving any Default hereunder; provided, however, that no such
supplemental agreement shall, without the consent of all of the Lenders:
(i) Extend the final maturity of any Loan, or extend the expiry
date of any Facility LC to a date after the Facility
Termination Date or forgive all or any portion of the
principal amount thereof or any Reimbursement Obligation
related thereto, or reduce the rate or extend the time of
payment of interest or fees thereon or Reimbursement
Obligations related thereto.
(ii) Reduce the percentage specified in the definition of Required
Lenders.
(iii) Extend the Facility Termination Date or (except as otherwise
provided in Section 2.5.4) increase the amount of the
Aggregate Commitment, the Commitment of any Lender hereunder
or the commitment to issue Facility LCs, or permit the
Borrower to assign its rights under this Agreement.
(iv) Reduce the Commitment of any Lender except for (a) reductions
of the Aggregate Commitment provided for in Section 2.5.3, (b)
reductions of a Lender's Commitment as a result of the
assignment of all or a portion thereof to a Purchaser in
accordance with Section 12.3 and (c) replacement of a Lender
in accordance with Section 2.18.
(v) Amend this Section 8.2.
(vi) Release any Guarantor except as provided in Section 9.15.
(vii) Provide for a Eurodollar Interest Period of less than one
month or greater than six months.
(viii) Subject any Lender to any additional obligation.
No amendment of any provision of this Agreement relating to the Agent shall be
effective without the written consent of the Agent, and no amendment of any
provision relating to the LC Issuer shall be effective without the written
consent of the LC Issuer. The Agent may waive payment of the fee required under
Section 12.3.2.
8.3. Preservation of Rights. No delay or omission of the Lenders,
the LC Issuer or the Agent to exercise any right under the Loan Documents shall
impair such right or be construed to be a waiver of any Default or an
acquiescence therein, and the making of a Credit Extension notwithstanding the
existence of a Default or the inability of the Borrower to satisfy the
conditions precedent to such Credit Extension shall not constitute any waiver or
acquiescence. Any single or partial exercise of any such right shall not
preclude other or further exercise thereof or the exercise of any other right,
and no waiver, amendment or other variation of the terms, conditions or
provisions of the Loan Documents whatsoever shall be valid unless in writing
signed by the Lenders required pursuant to Section 8.2, and then only to the
extent in such writing specifically set forth. All remedies contained in the
Loan Documents or by law afforded shall be cumulative and all shall be available
to the Agent, the LC Issuer and the Lenders until the Obligations have been paid
in full.
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ARTICLE IX
GENERAL PROVISIONS
9.1. Survival of Representations. All representations and
warranties of the Borrower contained in this Agreement shall survive the making
of the Credit Extensions herein contemplated.
9.2. Governmental Regulation. Anything contained in this Agreement
to the contrary notwithstanding, neither the LC Issuer nor any Lender shall be
obligated to extend credit to the Borrower in violation of any limitation or
prohibition provided by any applicable statute or regulation.
9.3. Headings. Section headings in the Loan Documents are for
convenience of reference only, and shall not govern the interpretation of any of
the provisions of the Loan Documents.
9.4. Entire Agreement. The Loan Documents embody the entire
agreement and understanding among the Borrower, the Agent, the LC Issuer and the
Lenders and supersede all prior agreements and understandings among the
Borrower, the Agent, the LC Issuer and the Lenders relating to the subject
matter thereof other than those contained in the fee letter described in Section
10.13 which is the subject of this Agreement, all of which shall survive and
remain in full force and effect during the term of this Agreement.
9.5. Several Obligations; Benefits of this Agreement. The
respective obligations of the Lenders hereunder are several and not joint and no
Lender shall be the partner or agent of any other (except to the extent to which
the Agent is authorized to act as such). The failure of any Lender to perform
any of its obligations hereunder shall not relieve any other Lender from any of
its obligations hereunder. This Agreement shall not be construed so as to confer
any right or benefit upon any Person other than the parties to this Agreement
and their respective successors and assigns, provided, however, that the parties
hereto expressly agree that the Arranger shall enjoy the benefits of the
provisions of Sections 9.6, 9.10 and 10.11 to the extent specifically set forth
therein and shall have the right to enforce such provisions on its own behalf
and in its own name to the same extent as if it were a party to this Agreement.
9.6. Expenses; Indemnification.
(i) The Borrower shall reimburse the Agent and the Arranger for
any costs, internal charges and out-of-pocket expenses
(including attorneys' fees and time charges of attorneys for
the Agent, which attorneys may be employees of the Agent) paid
or incurred by the Agent or the Arranger in connection with
the preparation, negotiation, execution, delivery,
syndication, distribution (including, without limitation, via
the internet), review, amendment, modification, and
administration of the Loan Documents. The Borrower also agrees
to reimburse the Agent, the Arranger, the LC Issuer and the
Lenders for any costs, internal charges and out-of-pocket
expenses (including attorneys' fees and time charges of
attorneys for the Agent, the Arranger, the LC Issuer and the
Lenders, which attorneys may
80
be employees of the Agent, the Arranger, the LC Issuer or the
Lenders) paid or incurred by the Agent, the Arranger, the LC
Issuer or any Lender in connection with the collection and
enforcement of the Loan Documents. Expenses being reimbursed
by the Borrower under this Section include, without
limitation, costs and expenses incurred by the Agent under
Sections 4.1.4, 4.2.8, 4.2.9, 6.13 and 6.22 and costs and
expenses incurred in connection with the Reports described in
the following sentence. The Borrower acknowledges that from
time to time Bank One may prepare and may distribute to the
Lenders (but shall have no obligation or duty to prepare or to
distribute to the Lenders) certain audit reports (the
"Reports") pertaining to the Borrower's assets for internal
use by Bank One from information furnished to it by or on
behalf of the Borrower, after Bank One has exercised its
rights of inspection pursuant to this Agreement.
(ii) The Borrower hereby further agrees to indemnify the Agent, the
Arranger, the LC Issuer, each Lender, their respective
affiliates, and each of their directors, officers and
employees against all losses, claims, damages, penalties,
judgments, liabilities and expenses (including, without
limitation, all expenses of litigation or preparation therefor
whether or not the Agent, the Arranger, the LC Issuer, any
Lender or any affiliate is a party thereto) which any of them
may pay or incur arising out of or relating to this Agreement,
the other Loan Documents, the transactions contemplated hereby
or the direct or indirect application or proposed application
of the proceeds of any Credit Extension hereunder except to
the extent that they are determined in a final non-appealable
judgment by a court of competent jurisdiction to have resulted
from the gross negligence or willful misconduct of the party
seeking indemnification. The obligations of the Borrower under
this Section 9.6 shall survive the termination of this
Agreement.
9.7. Numbers of Documents. All statements, notices, closing
documents, and requests hereunder shall be furnished to the Agent with
sufficient counterparts so that the Agent may furnish one to each of the
Lenders.
9.8. Accounting. Except as provided to the contrary herein, all
accounting terms used herein shall be interpreted and all accounting
determinations hereunder shall be made in accordance with Agreement Accounting
Principles.
9.9. Severability of Provisions. Any provision in any Loan Document
that is held to be inoperative, unenforceable, or invalid in any jurisdiction
shall, as to that jurisdiction, be inoperative, unenforceable, or invalid
without affecting the remaining provisions in that jurisdiction or the
operation, enforceability, or validity of that provision in any other
jurisdiction, and to this end the provisions of all Loan Documents are declared
to be severable.
9.10. Nonliability of Lenders. The relationship between the Borrower
on the one hand and the Lenders, the LC Issuer and the Agent on the other hand
shall be solely that of borrower and lender. Neither the Agent, the Arranger,
the LC Issuer nor any Lender shall have any fiduciary responsibilities to the
Borrower or the REIT. Neither the Agent, the Arranger, the LC Issuer nor any
Lender undertakes any responsibility to the Borrower or the REIT to review or
inform them of any matter in connection with any phase of the business or
operations of the
81
Borrower or the REIT. The Borrower and the REIT agree that neither the Agent,
the Arranger, the LC Issuer nor any Lender shall have liability to the Borrower
or the REIT (whether sounding in tort, contract or otherwise) for losses
suffered by the Borrower or the REIT in connection with, arising out of, or in
any way related to, the transactions contemplated and the relationship
established by the Loan Documents, or any act, omission or event occurring in
connection therewith, unless it is determined in a final non-appealable judgment
by a court of competent jurisdiction that such losses resulted from the gross
negligence or willful misconduct of the party from which recovery is sought.
Neither the Agent, the Arranger, the LC Issuer nor any Lender shall have any
liability with respect to, and the Borrower or the REIT hereby waive, release
and agree not to xxx for, any special, indirect or consequential damages
suffered by the Borrower or the REIT in connection with, arising out of, or in
any way related to the Loan Documents or the transactions contemplated thereby.
9.11. Confidentiality. Each Lender agrees to hold any confidential
information which it may receive from the Borrower or the REIT pursuant to this
Agreement in confidence, except for disclosure (i) to its Affiliates and to
other Lenders and their respective Affiliates, (ii) to legal counsel,
accountants, and other professional advisors to such Lender or to a Transferee,
(iii) to regulatory officials, (iv) to any Person as requested pursuant to or as
required by law, regulation, or legal process, (v) to any Person in connection
with any legal proceeding to which such Lender is a party, (vi) to such Lender's
direct or indirect contractual counterparties in swap agreements or to legal
counsel, accountants and other professional advisors to such counterparties,
(vii) permitted by Section 12.4 and (viii) to rating agencies if requested or
required by such agencies in connection with a rating relating to the Advances
hereunder.
9.12. Nonreliance. Each Lender hereby represents that it is not
relying on or looking to any margin stock (as defined in Regulation U of the
Board of Governors of the Federal Reserve System) for the repayment of the Loans
provided for herein.
9.13. Disclosure. The Borrower, the REIT and each Lender hereby
acknowledge and agree that Bank One and/or its Affiliates and each Lender and/or
its Affiliates from time to time may hold investments in, make other loans to or
have other relationships with the Borrower, the REIT and their Affiliates.
9.14. Recourse. The Loans, the Facility LC Obligations and all other
Obligations shall be full recourse to the Borrower. The REIT shall have no
liability with respect to the Loans, the Facility LC Obligations or any other
Obligations except as set forth in the Guaranty.
9.15. Release of Certain Guarantors. The Agent shall, upon written
request of the Borrower, release from its Guaranty any Guarantor (other than the
REIT) that ceases to own any Unencumbered Assets, provided that (i) no Default
has occurred that is continuing and (ii) upon such release, the Borrower shall
be in compliance with its covenants hereunder.
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ARTICLE X
THE AGENT
10.1. Appointment; Nature of Relationship. Bank One, NA is hereby
appointed by each of the Lenders as its contractual representative (herein
referred to as the "Agent") hereunder and under each other Loan Document, and
each of the Lenders irrevocably authorizes the Agent to act as the contractual
representative of such Lender with the rights and duties expressly set forth
herein and in the other Loan Documents. The Agent agrees to act as such
contractual representative upon the express conditions contained in this Article
X. Notwithstanding the use of the defined term "Agent," it is expressly
understood and agreed that the Agent shall not have any fiduciary
responsibilities to any Lender by reason of this Agreement or any other Loan
Document and that the Agent is merely acting as the contractual representative
of the Lenders with only those duties as are expressly set forth in this
Agreement and the other Loan Documents. In its capacity as the Lenders'
contractual representative, the Agent (i) does not hereby assume any fiduciary
duties to any of the Lenders, (ii) is a "representative" of the Lenders within
the meaning of the term "secured party" as defined in the Illinois Uniform
Commercial Code and (iii) is acting as an independent contractor, the rights and
duties of which are limited to those expressly set forth in this Agreement and
the other Loan Documents. Each of the Lenders hereby agrees to assert no claim
against the Agent on any agency theory or any other theory of liability for
breach of fiduciary duty, all of which claims each Lender hereby waives.
10.2. Powers. The Agent shall have and may exercise such powers
under the Loan Documents as are specifically delegated to the Agent by the terms
of each thereof, together with such powers as are reasonably incidental thereto.
The Agent shall have no implied duties to the Lenders, or any obligation to the
Lenders to take any action thereunder except any action specifically provided by
the Loan Documents to be taken by the Agent.
10.3. General Immunity. Neither the Agent nor any of its directors,
officers, agents or employees shall be liable to the Borrower, the REIT, the
Lenders or any Lender for any action taken or omitted to be taken by it or them
hereunder or under any other Loan Document or in connection herewith or
therewith except to the extent such action or inaction is determined in a final
non-appealable judgment by a court of competent jurisdiction to have arisen from
the gross negligence or willful misconduct of such Person.
10.4. No Responsibility for Loans, Recitals, etc. Neither the Agent
nor any of its directors, officers, agents or employees shall be responsible for
or have any duty to ascertain, inquire into, or verify (a) any statement,
warranty or representation made in connection with any Loan Document or any
borrowing hereunder; (b) the performance or observance of any of the covenants
or agreements of any obligor under any Loan Document, including, without
limitation, any agreement by an obligor to furnish information directly to each
Lender; (c) the satisfaction of any condition specified in Article IV, except
receipt of items required to be delivered solely to the Agent; (d) the existence
or possible existence of any Default or Unmatured Default; (e) the validity,
enforceability, effectiveness, sufficiency or genuineness of any Loan Document
or any other instrument or writing furnished in connection therewith; (f) the
value, sufficiency, creation,
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perfection or priority of any Lien in any collateral security; or (g) the
financial condition of the Borrower, the REIT or any other Consolidated Entity
of any of the Obligations or of any of the Borrower's, the REIT's or any such
Consolidated Entity's respective Subsidiaries. The Agent shall with reasonable
promptness deliver to the Lenders (unless the Borrower has furnished the same
directly to the Lenders) copies of any materials furnished to the Agent by the
Borrower pursuant to the requirements of this Agreement, including without
limitation those provided for in Sections 6.1, 6.10, 6.11 and 6.12, but the
Agent shall have no duty to disclose to the Lenders information that is not
required to be furnished by the Borrower or the REIT to the Agent at such time,
but is voluntarily furnished by the Borrower or the REIT to the Agent (either in
its capacity as the Agent or in its individual capacity).
10.5. Action on Instructions of Lenders. The Agent shall in all
cases be fully protected in acting, or in refraining from acting, hereunder and
under any other Loan Document in accordance with written instructions signed by
the Required Lenders, and such instructions and any action taken or failure to
act pursuant thereto shall be binding on all of the Lenders. The Lenders hereby
acknowledge that the Agent shall be under no duty to take any discretionary
action permitted to be taken by it pursuant to the provisions of this Agreement
or any other Loan Document unless it shall be requested in writing to do so by
the Required Lenders. The Agent shall be fully justified in failing or refusing
to take any action hereunder and under any other Loan Document unless it shall
first be indemnified to its satisfaction by the Lenders pro rata against any and
all liability, cost and expense that it may incur by reason of taking or
continuing to take any such action.
10.6. Employment of Agents and Counsel. The Agent may execute any of
its duties as the Agent hereunder and under any other Loan Document by or
through employees, agents, and attorneys-in-fact and shall not be answerable to
the Lenders, except as to money or securities received by it or its authorized
agents, for the default or misconduct of any such agents or attorneys-in-fact
selected by it with reasonable care. The Agent shall be entitled to advice of
counsel concerning the contractual arrangement between the Agent and the Lenders
and all matters pertaining to the Agent's duties hereunder and under any other
Loan Document.
10.7. Reliance on Documents; Counsel. The Agent shall be entitled to
rely upon any Note, notice, consent, certificate, affidavit, letter, telegram,
statement, paper or document believed by it to be genuine and correct and to
have been signed or sent by the proper person or persons, and, in respect to
legal matters, upon the opinion of counsel selected by the Agent, which counsel
may be employees of the Agent.
10.8. Agent's Reimbursement and Indemnification. The Lenders agree
to reimburse and indemnify the Agent ratably in proportion to their respective
Commitments (or, if the Commitments have been terminated, in proportion to their
Commitments immediately prior to such termination) (i) for any amounts not
reimbursed by the Borrower for which the Agent is entitled to reimbursement by
the Borrower under the Loan Documents, (ii) for any other expenses incurred by
the Agent on behalf of the Lenders (and not reimbursed by the Borrower), in
connection with the preparation, execution, delivery, administration and
enforcement of the Loan Documents (including, without limitation, for any
expenses incurred by the Agent in connection with any dispute between the Agent
and any Lender or between two or more of the Lenders) and (iii) for any
liabilities, obligations, losses, damages, penalties, actions, judgments,
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suits, costs, expenses or disbursements of any kind and nature whatsoever which
may be imposed on, incurred by or asserted against the Agent in any way relating
to or arising out of the Loan Documents or any other document delivered in
connection therewith or the transactions contemplated thereby (including,
without limitation, for any such amounts incurred by or asserted against the
Agent in connection with any dispute between the Agent and any Lender or between
two or more of the Lenders), or the enforcement of any of the terms of the Loan
Documents or of any such other documents (but only to the extent not reimbursed
by the Borrower), provided that (i) no Lender shall be liable for any of the
foregoing to the extent any of the foregoing is found in a final non-appealable
judgment by a court of competent jurisdiction to have resulted from the gross
negligence or willful misconduct of the Agent and (ii) any indemnification
required pursuant to Section 3.5(vii) shall, notwithstanding the provisions of
this Section 10.8, be paid by the relevant Lender in accordance with the
provisions thereof. The obligations of the Lenders under this Section 10.8 shall
survive payment of the Obligations and termination of this Agreement.
10.9. Notice of Default. The Agent shall not be deemed to have
knowledge or notice of the occurrence of any Default or Unmatured Default
hereunder (other than a failure to pay any or all of the Obligations from time
to time payable hereunder) unless the Agent has received written notice from a
Lender or the Borrower referring to this Agreement describing such Default or
Unmatured Default and stating that such notice is a "notice of default". In the
event that the Agent receives such a notice, the Agent shall give prompt notice
thereof to the Lenders.
10.10. Rights as a Lender. In the event the Agent is a Lender, the
Agent shall have the same rights and powers hereunder and under any other Loan
Document with respect to its Commitment and its Loans as any Lender and may
exercise the same as though it were not the Agent, and the term "Lender" or
"Lenders" shall, at any time when the Agent is a Lender, unless the context
otherwise indicates, include the Agent in its individual capacity. The Agent and
its Affiliates may accept deposits from, lend money to, and generally engage in
any kind of trust, debt, equity or other transaction, in addition to those
contemplated by this Agreement or any other Loan Document, with the Borrower,
the REIT or any of their Subsidiaries in which the Borrower, the REIT or such
Subsidiary is not restricted hereby from engaging with any other Person.
10.11. Lender Credit Decision. Each Lender acknowledges that it has,
independently and without reliance upon the Agent, the Arranger or any other
Lender and based on the financial statements prepared by the Borrower and such
other documents and information as it has deemed appropriate, made its own
credit analysis and decision to enter into this Agreement and the other Loan
Documents. Each Lender also acknowledges that it will, independently and without
reliance upon the Agent, the Arranger or any other Lender and based on such
documents and information as it shall deem appropriate at the time, continue to
make its own credit decisions in taking or not taking action under this
Agreement and the other Loan Documents.
10.12. Successor Agent. The Agent may resign at any time by giving
written notice thereof to the Lenders and the Borrower, such resignation to be
effective upon the appointment of a successor Agent or, if no successor Agent
has been appointed, forty-five days after the retiring Agent gives notice of its
intention to resign. The Agent may be removed at any time with or without cause
by written notice received by the Agent from the Required Lenders, such
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removal to be effective on the date specified by the Required Lenders. Upon any
such resignation or removal, the Required Lenders shall have the right to
appoint, on behalf of the Borrower, the REIT and the Lenders, a successor Agent,
which appointment shall (as long as no Default has occurred that is continuing)
be subject to the prior written approval of the Borrower, not to be unreasonably
withheld. If no successor Agent shall have been so appointed by the Required
Lenders within thirty days after the resigning Agent's giving notice of its
intention to resign, then the resigning Agent may appoint, on behalf of the
Borrower, the REIT and the Lenders, a successor Agent. Notwithstanding the
previous sentence, the Agent may at any time without the consent of the
Borrower, the REIT or any Lender, appoint any of its Affiliates which is a
commercial bank as a successor Agent hereunder. If the Agent has resigned or
been removed and no successor Agent has been appointed, the Lenders may perform
all the duties of the Agent hereunder and the Borrower and the REIT shall make
all payments in respect of the Obligations to the applicable Lender and for all
other purposes shall deal directly with the Lenders. No successor Agent shall be
deemed to be appointed hereunder until such successor Agent has accepted the
appointment. Any such successor Agent shall be a commercial bank having capital
and retained earnings of at least $100,000,000. Upon the acceptance of any
appointment as Agent hereunder by a successor Agent, such successor Agent shall
thereupon succeed to and become vested with all the rights, powers, privileges
and duties of the resigning or removed Agent. Upon the effectiveness of the
resignation or removal of the Agent, the resigning or removed Agent shall be
discharged from its duties and obligations hereunder and under the Loan
Documents. After the effectiveness of the resignation or removal of an Agent,
the provisions of this Article X shall continue in effect for the benefit of
such Agent in respect of any actions taken or omitted to be taken by it while it
was acting as the Agent hereunder and under the other Loan Documents. In the
event that there is a successor to the Agent by merger, or the Agent assigns its
duties and obligations to an Affiliate pursuant to this Section 10.12, then the
term "Prime Rate" as used in this Agreement shall mean the prime rate, base rate
or other analogous rate of the new Agent.
10.13. Agent and Arranger Fees. The Borrower agrees to pay to the
Agent and the Arranger, for their respective accounts, the fees agreed to by the
Borrower, the REIT, the Agent and the Arranger pursuant to that certain letter
agreement dated May 3, 2002, or as otherwise agreed from time to time.
10.14. Delegation to Affiliates. The Borrower, the REIT and the
Lenders agree that the Agent may delegate any of its duties under this Agreement
to any of its Affiliates. Any such Affiliate (and such Affiliate's directors,
officers, agents and employees) which performs duties in connection with this
Agreement shall be entitled to the same benefits of the indemnification, waiver
and other protective provisions to which the Agent is entitled under Articles
IX and X.
ARTICLE XI
SETOFF; RATABLE PAYMENTS
11.1. Setoff. In addition to, and without limitation of, any rights
of the Lenders under applicable law, if the Borrower becomes insolvent, however
evidenced, or any Default occurs, any and all deposits (including all account
balances, whether provisional or final and whether or not collected or
available) and any other Indebtedness at any time held or owing by any Lender
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or any Affiliate of any Lender to or for the credit or account of the Borrower
may be offset and applied toward the payment of the Obligations owing to such
Lender, whether or not the Obligations, or any part thereof, shall then be due.
11.2. Ratable Payments. If any Lender, whether by setoff or
otherwise, has payment made to it upon its Outstanding Credit Exposure (other
than payments received pursuant to Section 3.1, 3.2, 3.4 or 3.5 or payments of
principal or interest on Competitive Bid Loans at a time when no Default is
continuing) in a greater proportion than that received by any other Lender, such
Lender agrees, promptly upon demand, to purchase a portion of the Aggregate
Outstanding Credit Exposure held by the other Lenders so that after such
purchase each Lender will hold its Pro Rata Share of the Aggregate Outstanding
Credit Exposure ratable proportion of Loans. If any Lender, whether in
connection with setoff or amounts which might be subject to setoff or otherwise,
receives collateral or other protection for its Obligations or such amounts
which may be subject to setoff, such Lender agrees, promptly upon demand, to
take such action necessary such that all Lenders share in the benefits of such
collateral ratably in proportion to their Loans respective Pro Rata Shares of
the Aggregate Outstanding Credit Exposure. In case any such payment is disturbed
by legal process, or otherwise, appropriate further adjustments shall be made.
ARTICLE XII
BENEFIT OF AGREEMENT; ASSIGNMENTS; PARTICIPATIONS
12.1. Successors and Assigns. The terms and provisions of the Loan
Documents shall be binding upon and inure to the benefit of the Borrower, the
REIT and the Lenders and their respective successors and assigns permitted
hereby, except that (i) neither the Borrower nor the REIT shall have the right
to assign its rights or obligations under the Loan Documents without the prior
written consent of each Lender, (ii) any assignment by any Lender must be made
in compliance with Section 12.3, and (iii) any transfer by Participation must be
made in compliance with Section 12.2. Any attempted assignment or transfer by
any party not made in compliance with this Section 12.1 shall be null and void,
unless such attempted assignment or transfer is treated as a participation in
accordance with Section 12.3.2. The parties to this Agreement acknowledge that
clause (ii) of this Section 12.1 relates only to absolute assignments and this
Section 12.1 does not prohibit assignments creating security interests,
including, without limitation, (x) any pledge or assignment by any Lender of all
or any portion of its rights under this Agreement and any Note to a Federal
Reserve Bank or (y) in the case of a Lender which is a Fund, any pledge or
assignment of all or any portion of its rights under this Agreement and any Note
to its trustee in support of its obligations to its trustee; provided, however,
that no such pledge or assignment creating a security interest shall release the
transferor Lender from its obligations hereunder unless and until the parties
thereto have complied with the provisions of Section 12.3. The Agent may treat
the Person which made any Loan or which holds any Note as the owner thereof for
all purposes hereof unless and until such Person complies with Section 12.3;
provided, however, that the Agent may in its discretion (but shall not be
required to) follow instructions from the Person which made any Loan or which
holds any Note to direct payments relating to such Loan or Note to another
Person. Any assignee of the rights to any Loan or any Note agrees by acceptance
of such assignment to be bound by all the terms and provisions of the Loan
Documents. Any request, authority or consent of any Person, who at the time of
making
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such request or giving such authority or consent is the owner of the rights to
any Loan (whether or not a Note has been issued in evidence thereof), shall be
conclusive and binding on any subsequent holder or assignee of the rights to
such Loan.
12.2. Participations.
12.2.1 Permitted Participants; Effect. Any Lender may at any
time sell to one or more banks or other entities ("Participants")
participating interests in any Outstanding Credit Exposure of such
Lender, any Note held by such Lender, any Commitment of such Lender or
any other interest of such Lender under the Loan Documents. In the
event of any such sale by a Lender of participating interests to a
Participant, such Lender's obligations under the Loan Documents shall
remain unchanged, such Lender shall remain solely responsible to the
other parties hereto for the performance of such obligations, such
Lender shall remain the owner of its Outstanding Credit Exposure and
the holder of any Note issued to it in evidence thereof for all
purposes under the Loan Documents, all amounts payable by the Borrower
under this Agreement shall be determined as if such Lender had not sold
such participating interests, and the Borrower, the REIT and the Agent
shall continue to deal solely and directly with such Lender in
connection with such Lender's rights and obligations under the Loan
Documents.
12.2.2. Voting Rights. Each Lender shall retain the sole right
to approve, without the consent of any Participant, any amendment,
modification or waiver of any provision of the Loan Documents other
than any amendment, modification or waiver with respect to any Credit
Exposure or Commitment in which such Participant has an interest which
would require consent of all of the Lenders pursuant to the terms of
Section 8.2 or of any other Loan Document.
12.2.3. Benefit of Certain Provisions. The Borrower agrees
that each Participant shall be deemed to have the right of setoff
provided in Section 11.1 in respect of its participating interest in
amounts owing under the Loan Documents to the same extent as if the
amount of its participating interest were owing directly to it as a
Lender under the Loan Documents, provided that each Lender shall retain
the right of setoff provided in Section 11.1 with respect to the amount
of participating interests sold to each Participant. The Lenders agree
to share with each Participant, and each Participant, by exercising the
right of setoff provided in Section 11.1, agrees to share with each
Lender, any amount received pursuant to the exercise of its right of
setoff, such amounts to be shared in accordance with Section 11.2 as if
each Participant were a Lender. The Borrower further agrees that each
Participant shall be entitled to the benefits of Sections 3.1, 3.2, 3.4
and 3.5 to the same extent as if it were a Lender and had acquired its
interest by assignment pursuant to Section 12.3, provided that (i) a
Participant shall not be entitled to receive any greater payment under
Section 3.1, 3.2 or 3.5 than the Lender who sold the participating
interest to such Participant would have received had it retained such
interest for its own account, unless the sale of such interest to such
Participant is made with the prior written consent of the Borrower, and
(ii) any Participant not incorporated under the laws of the United
States of America or any State thereof agrees to comply with the
provisions of Section 3.5 to the same extent as if it were a Lender.
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12.3. Assignments.
12.3.1 Permitted Assignments. Any Lender may, in the ordinary
course of its business and in accordance with applicable law, at any
time assign to one or more banks or other entities ("Purchasers") all
or any part of its rights and obligations under the Loan Documents.
Such assignment shall be substantially in the form of Exhibit C or in
such other form as may be agreed to by the parties thereto. The consent
of the Borrower, and the Agent and the LC Issuer shall be required
prior to an assignment becoming effective with respect to a Purchaser
which is not a Lender or an Affiliate thereof; provided, however, that
if a Default has occurred and is continuing, the consent of the
Borrower shall not be required. Such consents shall not be unreasonably
withheld or delayed. Each such assignment with respect to a Purchaser
which is not a Lender or an Affiliate thereof shall (unless each of the
Borrower and the Agent otherwise consents) be in an amount not less
than the lesser of (i) $10,000,000 or (ii) the remaining amount of the
assigning Lender's Commitment (calculated as at the date of such
assignment) or outstanding Loans (if the applicable Commitment has been
terminated).
12.3.2 Notice of Assignment. Upon (i) delivery to the Agent of
a notice of assignment, substantially in the form attached as Exhibit I
to Exhibit C (a "Notice of Assignment"), together with any consents
required by Section 12.3.1, and (ii) payment of a $4,000 fee to the
Agent for processing such assignment, such assignment shall become
effective on the effective date specified in such Notice of Assignment.
The Notice of Assignment shall contain a representation by the
Purchaser to the effect that none of the consideration used to make the
purchase of the Commitment and Outstanding Credit Exposure under the
applicable assignment agreement are "plan assets" as defined under
ERISA and that the rights and interests of the Purchaser in and under
the Loan Documents will not be "plan assets" under ERISA. On and after
the effective date of such assignment, such Purchaser shall for all
purposes be a Lender party to this Agreement and any other Loan
Document executed by or on behalf of the Lenders and shall have all the
rights and obligations of a Lender under the Loan Documents, to the
same extent as if it were an original party hereto, and no further
consent or action by the Borrower, the REIT, the Lenders or the Agent
shall be required to release the transferor Lender with respect to the
percentage of the Aggregate Commitment and Outstanding Credit Exposure
assigned to such Purchaser. Upon the consummation of any assignment to
a Purchaser pursuant to this Section 12.3.2, the transferor Lender, the
Agent and the Borrower shall, if the transferor Lender or the Purchaser
desires that its Loans be evidenced by Notes, make appropriate
arrangements so that new Notes or, as appropriate, replacement Notes
are issued to such transferor Lender and new Notes or, as appropriate,
replacement Notes, are issued to such Purchaser, in each case in
principal amounts reflecting their respective Commitments, as adjusted
pursuant to such assignment.
12.3.3 Register. The Agent, acting solely for this purpose as
an agent of the Borrower, shall maintain at one of its offices in
Chicago, Illinois a copy of each Assignment and Assumption delivered to
it and a register for the recordation of the names and addresses of the
Lenders, and the Commitments of, and principal amounts of the Loans
owing to, each Lender pursuant to the terms hereof from time to time
(the "Register"). The entries in the Register shall be conclusive, and
the Borrower, the Agent
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and the Lenders may treat each Person whose name is recorded in the
Register pursuant to the terms hereof as a Lender hereunder for all
purposes of this Agreement, notwithstanding notice to the contrary. The
Register shall be available for inspection by the Borrower and any
Lender, at any reasonable time and from time to time upon reasonable
prior notice.
12.4. Dissemination of Information. The Borrower and the REIT hereby
authorize each Lender to disclose to any Participant or Purchaser or any other
Person acquiring an interest in the Loan Documents by operation of law (each a
"Transferee") and any prospective Transferee any and all information in such
Lender's possession concerning the creditworthiness of the Borrower, the REIT
and their Subsidiaries, including without limitation any information contained
in any Reports; provided that each Transferee and prospective Transferee agrees
to be bound by Section 9.11 of this Agreement.
12.5. Tax Treatment. If any interest in any Loan Document is
transferred to any Transferee which is not incorporated under the laws of the
United States or any State thereof, the transferor Lender shall cause such
Transferee, concurrently with the effectiveness of such transfer, to comply with
the provisions of Section 3.5(iv).
ARTICLE XIII
NOTICES
13.1. Notices. Except as otherwise permitted by Section 2.12 with
respect to borrowing notices, all notices, requests and other communications to
any party hereunder shall be in writing (including electronic transmission,
facsimile transmission or similar writing) and shall be given to such party: (x)
in the case of the Borrower, the REIT or the Agent, at its address or facsimile
number set forth on the signature pages hereof, (y) in the case of any Lender,
at its address or facsimile number set forth below its signature hereto or (z)
in the case of any party, at such other address or facsimile number as such
party may hereafter specify for the purpose by notice to the Agent and the
Borrower in accordance with the provisions of this Section 13.1. Each such
notice, request or other communication shall be effective (i) if given by
facsimile transmission, when transmitted to the facsimile number specified in
this Section and confirmation of receipt is received, (ii) if given by mail, 72
hours after such communication is deposited in the mails with first class
postage prepaid, addressed as aforesaid, or (iii) if given by any other means,
when delivered (or, in the case of electronic transmission, received) at the
address specified in this Section; provided that notices to the Agent under
Article II shall not be effective until received.
13.2. Change of Address. The Borrower, the REIT, the Agent and any
Lender may each change the address for service of notice upon it by a notice in
writing to the other parties hereto.
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ARTICLE XIV
COUNTERPARTS
This Agreement may be executed in any number of counterparts, all of
which taken together shall constitute one agreement, and any of the parties
hereto may execute this Agreement by signing any such counterpart. This
Agreement shall be effective when it has been executed by the Borrower, the
REIT, the Agent, the LC Issuer and the Lenders and each party has notified the
Agent by facsimile transmission or telephone that it has taken such action.
ARTICLE XV
CHOICE OF LAW; CONSENT TO JURISDICTION; WAIVER OF JURY TRIAL
15.1. CHOICE OF LAW. THE LOAN DOCUMENTS (OTHER THAN THOSE CONTAINING
A CONTRARY EXPRESS CHOICE OF LAW PROVISION) SHALL BE CONSTRUED IN ACCORDANCE
WITH THE INTERNAL LAWS (INCLUDING, WITHOUT LIMITATION, 735 ILCS SECTION
105/5-1 ET SEQ, BUT OTHERWISE WITHOUT REGARD TO THE CONFLICT OF LAWS PROVISIONS)
OF THE STATE OF ILLINOIS, BUT GIVING EFFECT TO FEDERAL LAWS APPLICABLE TO
NATIONAL BANKS.
15.2. CONSENT TO JURISDICTION. THE BORROWER AND THE REIT HEREBY
IRREVOCABLY SUBMIT TO THE NON-EXCLUSIVE JURISDICTION OF ANY UNITED STATES
FEDERAL OR ILLINOIS STATE COURT SITTING IN CHICAGO, ILLINOIS IN ANY ACTION OR
PROCEEDING ARISING OUT OF OR RELATING TO ANY LOAN DOCUMENTS AND THE BORROWER AND
THE REIT HEREBY IRREVOCABLY AGREE THAT ALL CLAIMS IN RESPECT OF SUCH ACTION OR
PROCEEDING MAY BE HEARD AND DETERMINED IN ANY SUCH COURT AND IRREVOCABLY WAIVE
ANY OBJECTION THEY MAY NOW OR HEREAFTER HAVE AS TO THE VENUE OF ANY SUCH SUIT,
ACTION OR PROCEEDING BROUGHT IN SUCH A COURT OR THAT SUCH COURT IS AN
INCONVENIENT FORUM. NOTHING HEREIN SHALL LIMIT THE RIGHT OF THE AGENT, THE LC
ISSUER OR ANY LENDER TO BRING PROCEEDINGS AGAINST THE BORROWER OR THE REIT IN
THE COURTS OF ANY OTHER JURISDICTION. ANY JUDICIAL PROCEEDING BY THE BORROWER OR
THE REIT AGAINST THE AGENT, THE LC ISSUER OR ANY LENDER OR ANY AFFILIATE OF THE
AGENT, THE LC ISSUER OR ANY LENDER INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER
IN ANY WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH ANY LOAN DOCUMENT SHALL
BE BROUGHT ONLY IN A COURT IN CHICAGO, ILLINOIS.
15.3. WAIVER OF JURY TRIAL. THE BORROWER, THE REIT, THE AGENT, THE
LC ISSUER AND EACH LENDER HEREBY WAIVE TRIAL BY JURY IN ANY JUDICIAL PROCEEDING
INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER (WHETHER SOUNDING IN TORT,
CONTRACT OR OTHERWISE) IN ANY
91
WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH ANY LOAN DOCUMENT OR THE
RELATIONSHIP ESTABLISHED THEREUNDER.
92
IN WITNESS WHEREOF, the Borrower, the Lenders and the Agent have
executed this Agreement as of the date first above written.
SUN COMMUNITIES OPERATING LIMITED
PARTNERSHIP
By: Sun Communities, Inc., its general partner
By: /s/ Xxxxxxx X. Xxxxxxxx
--------------------------------------
Title: Chief Financial Officer
----------------------------------
Sun Communities Operating Limited Partnership
00000 Xxxxxxxxxx Xxxx, Xxxxx 000
Xxxxxxxxxx Xxxxx, Xxxxxxxx 00000
Telecopier Number: (000) 000-0000
Attention: Xxxxxxx X. Xxxxxxxx
With a copy to: Jaffe, Raitt, Heuer & Xxxxx
Xxx Xxxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Telecopier Number: (000) 000-0000
Attention: Xxxxxx X. Xxxxx, Esq.
SUN COMMUNITIES, INC.
By: /s/ Xxxxxxx X. Xxxxxxxx
--------------------------------------
Title: Chief Financial Officer
----------------------------------
Sun Communities, Inc.
00000 Xxxxxxxxxx Xxxx, Xxxxx 000
Xxxxxxxxxx Xxxxx, Xxxxxxxx 00000
Telecopier Number: (000) 000-0000
Attention: Xxxxxxx X. Xxxxxxxx
With a copy to: Jaffe, Raitt, Heuer & Xxxxx
Xxx Xxxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Telecopier Number: (000) 000-0000
Attention: Xxxxxx X. Xxxxx, Esq.
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BANK ONE, NA,
Individually and as Agent
By: /s/ Xxxxxxxx Xxxxx
-------------------------------------------
Title: Director of Capital Markets, Inc.
---------------------------------------
Bank One, NA
0 Xxxx Xxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Telecopier Number: (000) 000-0000
Attention: Xxxxxxxx Xxxxx
94
XXXXX FARGO BANK, NATIONAL
ASSOCIATION
By: /s/ Xxxx Xxxxxx
-------------------------------------------
Title: Vice President
---------------------------------------
Xxxxx Fargo Bank, National Association
000 Xxxx Xxxxxx Xxxxx
Xxxxx 0000
Xxxxxxx, XX 00000
Telecopier No.: (000) 000-0000
Attention: Xxxx Xxxxxx
95
AMSOUTH BANK
By: /s/ Xxxxx Coffee
-------------------------------------------
Title: Senior Vice President
---------------------------------------
AmSouth Bank
0000 0xx Xxxxxx No.
Commercial Real Estate 0xx Xxxxx
Xxxxxxxxxx, XX 00000
Telecopier No.: (000) 000-0000
Attention: Xxxxxx X. Xxxxx
96
THE HUNTINGTON NATIONAL BANK
By: /s/ Xxxxxxx X. Xxxxxxxx
-------------------------------------------
Title: Vice President
---------------------------------------
The Huntington National Bank
000 Xxxx Xxx Xxxxxx Xxxx -- Xxxxx 000
Xxxx, XX 00000
Telecopier No.: (000) 000-0000
Attention: Xxxxxxx X. Xxxxxxxx
97
STANDARD FEDERAL BANK, N.A.
By: /s/ Xxxxx Xxx Xxxxx
-------------------------------------------
Title: First Vice President
---------------------------------------
Standard Federal Bank, N.A.
0000 Xxxx Xxx Xxxxxx Xxxx -- 0xx Xxxxx
Xxxx, XX 00000
Telecopier No.: (000) 000-0000
Attention: Xxxxx Xxx Xxxxx
98
