$170,000,000
AMENDED AND RESTATED CREDIT AGREEMENT
AMONG
HOMESTEAD VILLAGE INCORPORATED,
THE LENDERS NAMED HEREIN,
COMMERZBANK AG, NEW YORK BRANCH,
AND
XXXXX FARGO BANK, NATIONAL ASSOCIATION,
AS ADMINISTRATIVE AGENT FOR THE LENDERS
DATED AS OF MARCH 18, 1999
AMENDED AND RESTATED CREDIT AGREEMENT
AMENDED AND RESTATED CREDIT AGREEMENT (this "Agreement"), dated as of
March 18, 1999, among HOMESTEAD VILLAGE INCORPORATED, a Maryland corporation
(the "Borrower"), COMMERZBANK AG, LOS ANGELES BRANCH, and the other lenders
listed on Exhibit A attached hereto, as amended from time to time (each a
"Lender" and collectively, the "Lenders"), COMMERZBANK AG, NEW YORK BRANCH (the
"Arranger") and XXXXX FARGO BANK, NATIONAL ASSOCIATION, as contractual
representative for the Lenders on the terms provided herein (the "Administrative
Agent").
W I T N E S S E T H:
WHEREAS, the Arranger arranged a revolving credit facility in the
original principal amount of $50,000,000 on behalf of the Borrower pursuant to a
Credit Agreement dated as of May 6, 1997 among Borrower, Arranger and certain
lenders named therein (said Agreement, as amended to, but not including, this
date, the "Original Agreement"); and
WHEREAS, the parties hereto have agreed to amend and restate the
Original Agreement in its entirety, including the letters modifying, amending or
waiving the terms thereof.
NOW, THEREFORE, in consideration of the fees, representations,
warranties, covenants and agreements of the Borrower set forth herein and in the
Loan Documents, the parties hereto agree as follows:
ARTICLE . DEFINITIONS; CONSTRUCTION
. As used herein, the following terms shall have the following meanings:
"Accounting Period" means each accounting period of Borrower,
the first two such periods in any fiscal quarter consisting of four weeks each
and the last such period in any fiscal quarter consisting of five weeks.
"Acquisition Costs" means the actual purchase price paid by
Borrower to acquire the property constituting a Mortgaged Property or that
portion of a Mortgaged Property (the portion of such actual purchase price
allocable to such portion of a Mortgaged Property to be determined in a manner
reasonably acceptable to Administrative Agent) upon which it shall construct an
extended stay facility and ancillary facilities which are related to the
purpose, and shall enhance the value, of the extended stay facility (the
"ancillary facilities"), as evidenced by the documentation and certificate of
Borrower furnished to the Administrative Agent pursuant to Section 3.2(g)(i)(1)
and (2) hereof, excluding, without limitation, all fees, costs and expenses
incurred with regard to use, planning and zoning rules and regulations relating
to such Mortgaged Property, but including such other expenses as the
Administrative Agent approves.
"Adjusted EBITDA" means, with respect to any quarter, EBITDA
for such quarter plus non-cash charges minus a reserve for replacements
equivalent to the greater of (a) actual historical recurring property capital
expenditures for the prior quarter or (b) four percent (4.0%) of the prior
quarter's gross revenues from the Properties.
"Adjusted LIBO Rate" means, with respect to each Interest
Period, the rate obtained by dividing (i) the LIBO Rate for such Interest Period
by (ii) a percentage equal to one minus the actual rate (stated as a decimal) of
all reserves then actually required to be maintained by each Lender (provided
that reasonable evidence of the imposition of such requirement is furnished to
Borrower) against "eurocurrency liabilities" as specified in Regulation D (or
against any other category of liabilities that includes deposits by reference to
which the interest rate on Advances is determined or any category of extensions
of credit or other assets that includes loans by a non-United States office of
the Administrative Agent to United States residents) or by any other Requirement
of Law relating to reserve or capital adequacy requirements.
"Adjusted Property Net Operating Income" or "Adjusted Property
NOI" means, with respect to any period, NOI adjusted for a capital expenditure
reserve equal to 4% of gross revenue and a management fee equal to 4% of gross
revenue.
"Administrative Agent" means Xxxxx Fargo Bank National
Association., in its capacity as contractual representative for the Lenders
hereunder, or such successor Administrative Agent as may be appointed pursuant
to Section 7.9 of this Agreement.
"Advance" has the meaning provided in Section 2.1(a).
"Affiliate" means, with respect to any Person, any other
Person directly or indirectly controlling, controlled by, or under common
control with such Person, whether through the ownership of voting securities, by
contract, or otherwise. A Person shall be deemed to control a corporation if
such Person possesses, directly or indirectly, the power to (i) vote fifty
percent (50%) or more of the securities having ordinary voting power for the
election of directors of such corporation or (ii) direct or cause the direction
of the management and policies of such corporation, through the ownership of
voting securities, by contract or otherwise.
"Agreement" means this Agreement, as amended, supplemented, or
modified from time to time.
"Alternate Rate" means, as of any date of determination, a per
annum rate equal to the greater of(a) the Prime Lending Rate plus the Prime Rate
Applicable Margin, and (b) the Federal Funds Rate plus the Federal Funds
Applicable Margin.
"Applicable Margin Adjustment Date" means the date on which
any Applicable Margin Adjustment Event occurs.
"Applicable Margin Adjustment Event" means each of (a) the
making of any Advance, and (b) the receipt and collection by the Administrative
Agent, on behalf of the Lenders, of any portion of the unpaid principal balance
of the Loan.
"Arranger" means Commerzbank AG, New York Branch.
"Average Undrawn Balance" means the average daily amount of
the Commitment which remained undrawn upon by the Borrower for the related
period of determination (on the basis of a year of 365/366 days for the actual
number of days which have elapsed during such period).
"Bankruptcy Code" has the meaning provided in Section 6.1(g).
"Borrower" has the meaning set forth in the introductory
paragraph to this Agreement.
"Borrower's Authorized Representative" means any duly elected
officer designated by the Borrower in a written notice to the Arranger and the
Administrative Agent, as such officer may be changed from time to time by
written notice to the Arranger and the Administrative Agent.
"Bridge Facility" means the credit facility governed by the
Credit Agreement dated as of June 15, 1998, among Borrower, certain lenders and
Arranger, as modified and amended, from time to time.
"Budget" means, for any Mortgaged Property (i) until the Final
Budget for such Mortgaged Property is received by the Administrative Agent, the
Initial Budget for such Mortgaged Property, and (ii) upon and after such time as
the Final Budget for such Mortgaged Property is received by the Administrative
Agent, the Final Budget for such Mortgaged Property.
"Business Day" means any day excluding Saturday, Sunday, and
any other day on which banks are required or authorized to close in New York
City or San Francisco, California or on which trading is not carried on by and
between banks in Dollar deposits in the applicable interbank Eurodollar market.
"Capital Stock" means any and all shares, interests,
participation, or other equivalents (however designated) of capital stock of a
corporation, any and all equivalent ownership interests, including but not
limited to partnership interests, in a Person (other than a corporation), and
any and all warrants or options to purchase any of the foregoing.
"Closing Date" means May 6, 1997.
"Code" means the Internal Revenue Code of 1986, as amended
from time to time, or any successor thereto.
"Collateral" means, collectively, the Mortgaged Properties and
all other property and interests in property now owned or hereafter acquired and
upon which a Lien has been or is purported or intended to have been granted in
favor of the Arranger.
"Commitment" means One Hundred Seventy Million Dollars
($170,000,000).
"Construction Budget" means, with respect to any Project under
Development, the total budgeted costs (including soft and hard costs), as
indicated in the Budget for such Project under Development, to cause such
Project under Development to become Construction Complete, including the
acquisition cost of land. If the Project under Development is a multi-phase
development, the total budgeted costs shall include the acquisition cost of land
for all phases and the development budget for any phases for which improvements
have commenced.
"Construction Complete" means, with respect to any Mortgaged
Property, that (a) construction of such Mortgaged Property is complete, in
accordance with the Plans and Specifications of such Mortgaged Property, (b)
final, permanent and unconditional certificates of occupancy permitting
occupancy of all portions of such Mortgaged Property as an extended stay
facility have been issued and are in full force and effect, (c) all portions of
such Mortgaged Property are, or may become at any time, without the consent or
approval of any Person, open for business to the general public as an extended
stay hotel, and (d) the Administrative Agent shall have received evidence
satisfactory to it that the conditions set forth in (a), (b) and (c) have been
satisfied.
"Construction Interest" means all interest expense of the
Borrower and its Subsidiaries, for the construction of projects, which is
capitalized in accordance with GAAP.
"Contractual Obligation" means as to any Person, any material
provision of any security issued by such Person or of any agreement, instrument,
or other undertaking to which such Person is a party or by which it or any of
its property is bound.
"Convertible Preferred Securities" means the convertible
preferred securities to be issued by Borrower prior to July 22, 1999.
"Credit Exposure" has the meaning provided in Section 7.17.
"Debt Service" means, with respect to any period, Interest
Expense for such period, excluding financing costs and fees related to:
(i) Indebtedness which has been incurred before
the Effective Date,
(ii) the Sale Leaseback Facility, or
(iii) the Loan,
plus scheduled amortization of all Indebtedness of Borrower and its Subsidiaries
(excluding balloon payments and bullet maturities on loans).
"Decisions" has the meaning set forth in Section 7.14.
"Default" means any condition or event that, with the giving
of notice or the lapse of time or both, would constitute an "Event of Default"
hereunder or under the Promissory Notes or the other Loan Documents.
"Default Rate" has the meaning set forth in Section 2.6(b)
hereof.
"Development Encumbrances" means:
(a) all non-monetary easements, restrictions
and encumbrances customary and appropriate for the development of property as an
extended stay facility, including ancillary facilities related thereto, which do
not and will not materially impair the use of the Mortgaged Property affected
thereby as an extended stay facility or the ancillary facilities related thereto
or the expected value of the Mortgaged Property affected thereby and
(b) all other easements, restrictions and
encumbrances customary and appropriate for the development of
property as an extended stay facility, including ancillary facilities related
thereto, which (i) are approved by the Arranger and the Administrative Agent or
(ii) do not and will not materially impair the use of the Mortgaged Property
affected thereby as an extended stay facility or the ancillary facilities
related thereto or the expected value of the Mortgaged Property affected thereby
"Direct Costs" means, for each Mortgaged Property, the
aggregate costs of all items described under the categories entitled "Hard
Costs-Contractor Costs", "Hard Costs-Other Hard Costs", "Hard Costs-Hard Costs
Contingency" and "Hard Costs-Furniture, Fixtures & Equipment" in the Budget for
such Mortgaged Property actually paid which are necessary for an extended stay
facility, including ancillary facilities related thereto, on such Mortgaged
Property to be Construction Complete in accordance with the Plans and
Specifications, as evidenced by the documentation and certificate of Borrower
furnished to the Administrative Agent pursuant to Sections 3.2(g)(i)(1) and (2)
hereof.
"Dollar" and the sign "$" each mean lawful currency of the
United States of America.
"EBITDA" means, with respect to any period and any Person, the
net income of such Person (excluding equity in net earnings or non-cash losses
of its Unconsolidated Affiliates), plus, to the extent included in the
calculation of earnings, any losses on the sale of a Property, interest expense
(per GAAP), income taxes, depreciation and amortization expense, other losses
relating to restructurings or extraordinary or unusual events of a non-recurring
nature, accounting changes, or write-downs, reclassifications, or revaluation
(provided that for the purposes of this definition any severance related cash
expenses, charges or losses shall be spread in equal portions over the quarter
in which such expenses, charges or losses are incurred and the next three
succeeding quarters), and the distributed earnings of its Unconsolidated
Affiliates minus, to the extent excluded in the calculation of earnings, any
gains on the sale of a Property, or extraordinary or unusual events, in all
cases as determined on a consolidated basis in accordance with GAAP for such
Person for such period.
"Effective Date" means March 18, 1999.
"Eligible Acquisition Costs" means, for each Mortgaged
Property, the lesser of (i) the Acquisition Costs with respect to such Mortgaged
Property, and (ii) the amount budgeted, in the aggregate, for Acquisition Costs
as shown on the Budget for such Mortgaged Property (including any contingency
for Acquisition Costs shown on such Budget).
"Eligible Assignee" means a Person who, at the time of
determination is (a) a Lender; (b) a commercial bank, trust company, savings and
loan association, savings bank, insurance company, investment bank or pension
fund organized under the laws of the United States of America or any state
thereof, and having total assets in excess of $5,000,000,000; or (c) a
commercial bank organized under the laws of any other country which is a member
of the Organization for Economic Cooperation and Development or a political
subdivision of any such country, and having total assets in excess of
$5,000,000,000, provided such bank is acting through a branch or agency located
in the United States of America. If such a Person is not currently a Lender,
such Person's senior unsecured long term indebtedness must be rated BBB or
higher by Standard & Poor's, Baa2 or higher by Xxxxx'x Investor's Services, or
the equivalent or higher of either such rating by another rating agency
acceptable to the Administrative Agent.
"Eligible Costs" means Eligible Acquisition Costs, Eligible
Direct Costs and Eligible Indirect Costs.
"Eligible Direct Costs" means, for each Mortgaged Property,
the lesser of (i) the Direct Costs with respect to such Mortgaged Property, and
(ii) the amount budgeted, in the aggregate, for Direct Costs as shown on the
Budget for such Mortgaged Property (including any contingency for Direct Costs
shown on such Budget).
"Eligible Indirect Costs" means, for each Mortgaged Property,
the lesser of (i) the Indirect Costs with respect to such Mortgaged Property,
and (ii) the amount budgeted, in the aggregate, for Indirect Costs as shown on
the Budget for such Mortgaged Property (including any contingency for Indirect
Costs shown on such Budget).
"Environment" means soil, surface waters, groundwaters, land,
stream, sediments, surface or subsurface strata and ambient air.
"Environmental Discharge" means any discharge of pollutants or
effluent into any aquifer or water source or system (whether naturally occurring
or man made), gaseous emissions (including, without limitation, air emissions),
particulate emissions and noise emissions, in each case, in violation of any
Relevant Environmental Law.
"Environmental Indemnity" means the Environmental Indemnity to
be executed by the Borrower in favor of the Arranger, substantially in the form
attached hereto as Exhibit B.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended from time to time.
"ERISA Affiliate" means each trade or business (whether or not
incorporated) that together with the Borrower or a Subsidiary of the Borrower
would be deemed to be a "single employer" within the meaning of Section 4001 of
ERISA.
"Estimated Operating Property Value" or "EOPV" means, as of
any date of determination, the sum of:
(1) for each Mortgaged Property that is Construction
Complete and open for business as an extended stay facility but has been so open
less than ten (10) full calendar months as of the end of the calendar quarter
ending on or prior to the date of determination, the lower of the undepreciated
GAAP cost value or the Stabilized Appraised Value;
(2) for each Property that is Construction Complete
and has been open for business as an extended stay facility at least ten (10)
full calendar months as of the end of the calendar quarter ending on or prior to
the date of determination, the lower of (a) the estimated asset value derived by
capitalizing the appropriate annualized Adjusted Property NOI (as determined
pursuant to the directions set forth below) at 11%, (b) the undepreciated GAAP
cost value and (c) only if the property is a Mortgaged Property, the Stabilized
Appraised Value, plus
(3) for each Property that is not a Mortgaged Property
and has been open for business as an extended stay facility but has been so open
less than ten (10) full calendar months as of the end of the calendar quarter
ending on or prior to the date of determination, the undepreciated GAAP cost
value for such Property.
In order to determine annualized Adjusted Property NOI, for a Property that has
been open as an extended stay facility for at least ten (10) but less than
thirteen (13) full calendar months, the trailing quarter Adjusted Property NOI
will be annualized. For a Property that has been open as an extended stay
facility for at least thirteen (13) but less than sixteen (16) full calendar
months, the trailing two quarter Adjusted Property NOI will be annualized. For a
Property that has been open as an extended stay facility for sixteen (16) months
but less than nineteen (19) months, the prior three quarter Adjusted Property
NOI will be annualized. Once a Property has been open as an extended stay
facility for nineteen(19) full calendar months and thereafter, trailing 12-month
Adjusted Property NOI will be utilized.
"Estimated Operating Property Value of the Mortgaged Properties" means, as of
any date of determination, for all Mortgaged Properties, the sum calculated
pursuant to the foregoing formula, but only with respect to the Mortgaged
Properties.
"Event of Default" has the meaning provided in Article VI.
"Exchange Act" means the Securities and Exchange Act of 1934,
as amended.
"Federal Funds Applicable Margin" means, as of any Applicable
Margin Adjustment Date, (i) if the Leverage Percentage as of such Applicable
Margin Adjustment Date is less than fifteen percent (15%), one hundred fifty
(150) basis points, (ii) if the Leverage Percentage as of such Applicable Margin
Adjustment Date is equal to or greater than fifteen percent (15%) but less than
twenty five percent (25%), two hundred (200) basis points, and (iii) if the
Leverage Percentage as of such Applicable Margin Adjustment Date is equal to or
greater than twenty five percent (25%) and up to a maximum of thirty eight
percent (38%), two hundred fifty (250) basis points.
"Federal Funds Rate" means, for any day of determination, the
rate per annum (rounded upwards, if necessary, to the nearest 1/100th of one
percent) equal to the weighted average of the rates on overnight Federal Funds
transacted with members of the Federal Reserve System arranged by Federal Funds
brokers on such date, as published by the Federal Reserve Bank of New York on
the Business Day next succeeding such day, provided that (i) if such day is not
a Business Day, the Federal Funds Rate for such day shall be such rate on such
transactions on the next preceding Business Day as so published on the next
succeeding Business Day, and (ii) if no such rate is so published on such next
succeeding Business Day, the Federal Funds Rate for such day shall be the
average rate quoted to the Administrative Agent on such day on such transactions
as determined by the Administrative Agent.
"Financing Statements" means UCC-1 Financing Statements made
by the Borrower or a Subsidiary Mortgagor, as debtor, in favor of the Arranger,
as secured party, covering all fixtures, equipment and personal property of the
Borrower or such Subsidiary Mortgagor at the Mortgaged Properties.
"Final Budget" means, for any Mortgaged Property, a final
budget with respect to such Mortgaged Property in the same form as the Initial
Budget for such Mortgaged Property (as the form of such final budget may be
changed from time to time by Borrower upon the prior written consent of the
Administrative Agent) showing the amounts budgeted for the Total Costs
(including contingencies) for such Mortgaged Property, provided that Total Costs
(including contingencies) as shown on such final budget do not exceed, in the
aggregate, the amount equal to one hundred ten percent (110%) of the Total Costs
(including contingencies) as shown on such Initial Budget, in the aggregate.
"GAAP" means generally accepted accounting principles as in
effect at the time of application applied on a consistent basis; provided,
however, if any change is adopted after the Closing Date in generally accepted
accounting principles which either Borrower or Arranger determines to be
adverse, and if either such party notifies the other of such determination, then
both Borrower and Arranger shall negotiate in good faith the extent to which
such change shall be adopted with respect to the matters to which the definition
of "GAAP" is applicable under the Loan Documents, and the term "GAAP" shall mean
(i) in the event a written agreement with respect to such change is executed and
delivered by both Borrower and Required Lenders within thirty (30) days
following such notice, generally accepted accounting principles applied on a
consistent basis giving effect to such agreement, or (ii) in any other event,
generally accepted accounting principles as in effect at the time immediately
prior to the adoption of such change applied on a consistent basis.
"Governmental Authority" means any nation and any state or
other political subdivision thereof, and any entity exercising executive,
legislative, judicial, regulatory, or administrative functions of or pertaining
to government, including, but not limited to, the Federal Reserve Board, any
Federal Reserve Bank, any other central banking authority, or any agency or
subdivision thereof.
"Gross Asset Value -- Cost" or "GAV -- Cost" means the value
of all cash, cash equivalents and the value of all Properties owned by Borrower
and its Subsidiaries valued at one hundred percent (100%) of cost.
"Gross Asset Value -- Market" or "GAV -- Market" means the sum
of:
(a) EOPV,
(b) cash and equivalents (not including any form
of restricted cash),
(c) the GAAP value of construction in process and
land held for development or sale (subject to a
value cap set forth in Sections 5.3(s) and (t)) plus
(d) the contractual purchase price of properties
subject to purchase obligations, repurchase obligations, unfunded obligations,
and forward commitments to the extent such obligations are accounted for under
Total Liabilities and subject to specific enforcement.
With respect to purchase obligations, repurchase obligations, unfunded
obligations, and forward commitments that are not subject to specific
enforcement but have xxxxxxx money or similar payments subject to forfeiture,
the amount of the xxxxxxx money or similar payment will be included in the
calculation of Gross Asset Value -- Market, to the extent such obligations are
accounted for in Total Liabilities. With respect to any property that is being
developed or redeveloped pursuant a purchase agreement and that is not owned by
the Borrower or a Subsidiary, the amount of the purchase agreement will be
included in the calculation of Gross Asset Value -- Market, to the extent such
obligations are accounted for in Total Liabilities.
"Guarantee Obligation" means, as to any Person (the
"Guaranteeing Person"), any obligation of (a) the Guaranteeing Person or (b)
another Person (including, without limitation, any bank under any letter of
credit) to induce the creation of which the Guaranteeing Person has issued a
reimbursement, counterindemnity, or similar obligation, in either case
guaranteeing any Indebtedness, leases, dividends, or other obligations (the
"primary obligations") of any other third Person (the "primary obligor") in any
manner, whether directly or indirectly, including, without limitation, any
obligation of the Guaranteeing Person, whether or not contingent, (i) to
purchase any such primary obligation or any property constituting direct or
indirect security therefor, (ii) to advance or supply funds (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 or
solvency of the primary obligor, (iii) to purchase property, securities, or
services primarily for the purpose of assuring the owner of any such primary
obligation of the ability of the primary obligor to make payment of such primary
obligation or (iv) otherwise to assure or hold harmless the owner of any such
primary obligation against loss in respect thereof; provided, however that the
term Guarantee Obligation shall not include endorsements of instruments for
deposit or collection in the ordinary course of business. The amount of any
Guarantee Obligation of any Guaranteeing Person shall be deemed to be the lower
of (a) an amount equal to the stated or determinable amount of the primary
obligation in respect of which such Guarantee Obligation is made and (b) the
maximum amount for which such Guaranteeing Person may be liable pursuant to the
terms of the instrument embodying such Guarantee Obligation, unless such primary
obligation and the maximum amount for which such Guaranteeing Person may be
liable are not stated or determinable, in which case the amount of such
Guarantee Obligation shall be such Guaranteeing Person's maximum reasonably
anticipated liability in respect thereof as determined by the Lenders in good
faith.
"Hazardous Materials" means any substance in quantities and/or
form:
(a) the presence of which requires or shall hereafter require notification,
investigation or remediation under any Relevant Environmental Law; or
(b) which is or becomes defined as a "hazardous waste", "hazardous material" or
"hazardous substance" or "controlled industrial waste" or "Pollutant" or
"contaminant" under any Relevant Environmental Law, including without
limitation, which contains gasoline, diesel fuel or other petroleum hydrocarbons
or volatile organic compounds, or which contains polychlorinated biphenyls or
asbestos or urea formaldehyde foam insulation, or which contains or emits
radioactive particles, waves or material, including radon gas; or (c) which is
toxic, explosive, corrosive, flammable, infectious, radioactive, carcinogenic,
mutagenic or otherwise hazardous and is or becomes regulated under any Relevant
Environmental Law or by any Governmental Authority; or
(d) pursuant to applicable Relevant Environmental Laws, the presence of which on
the Mortgaged Property causes or threatens to cause a nuisance upon the
Mortgaged Property or adjacent properties; or poses or threatens to pose a
hazard to the Mortgaged Property or to the health or safety of persons or
property on or about the Mortgaged Property.
"HPT" means HPT HSD Properties Trust, the purchaser-lessor
under the Sale- Leaseback Facility.
"Implied Debt Service" means, as of any determination date,
the annual debt service of a self-liquidating loan with an original principal
amount equal to the Maximum Availability Amount, as of such date, and amortized
over 240 months (20 years) (pursuant to regular and equal monthly installments
of principal and interest) at an annual interest rate equal to the lesser of:
(a) ten percent (10%) and
(b) the greater of (i) eight and one half
percent (8.50%) and (ii) the 10 year Treasury Rate (as hereinafter defined) at
such time plus three and one quarter percent (3.25%). "Treasury Rate" means the
annual yield on the Treasury Constant Maturity Series with maturity equal to ten
(10) years, for the week prior to the determination date, as reported in Federal
Reserve Statistical Release H.15 - Selected Interest Rates, conclusively
determined by the Administrative Agent. In the event Release H.15 is no longer
published, Administrative Agent shall select a comparable publication to
determine the Treasury Rate.
"Indebtedness" of any Person means, as of the date of any
determination thereof, without duplication:
(1) all obligations of such Person for borrowed money and for the deferred
purchase price of property or services, and obligations evidenced by bonds,
debentures, notes, or other similar instruments;
(2) all rental or other obligations under leases required to be capitalized
under GAAP;
(3) all Guarantee Obligations of such Person;
(4) all liabilities in respect of currency or interest rate swap, cap or collar
arrangements or any similar derivative instrument; provided that if such
currency or interest rate swap, cap or collar arrangements or any similar
derivative instrument has been entered into in order to hedge the currency or
interest rate exposure of such Person in respect of current or contemplated
Indebtedness, the amount of any liability in respect of such arrangement or
instrument shall not be included in the determination of Indebtedness; and
(5) Indebtedness of others secured by any Lien upon property owned by such
Person, whether or not assumed by such Person. "Indirect Costs" means the
aggregate costs of all items described in the line items entitled "Title
Insurance", "Commissions", "Closing Costs/Escrow Fees", "Property Taxes",
"Legal" and "Soft Costs Contingency" and under the categories entitled "Soft
Costs-Design Costs", "Soft Costs-Permits & Fees", and "Soft Costs-Other Soft
Costs" in the Budget for such Mortgaged Property actually paid, in all cases as
evidenced by the documentation and certificate of Borrower furnished to the
Administrative Agent pursuant to Section 3.2(g)(i)(1) and (2) hereof, it being
understood that Indirect Costs shall in no event include, with respect to any
Mortgaged Property, any portion of the legal fees for zoning and planning board
approval and similar matters.
"Initial Budget" means, for any Mortgaged Property, a pro
forma budget with respect to such Mortgaged Property in the form of Exhibit C
annexed hereto (as the form of such pro forma budget may be changed from time to
time by Borrower upon the prior written consent of Administrative Agent) showing
the amounts budgeted for the Total Costs (including contingencies) for such
Mortgaged Property, provided and to the extent such budget and the amounts set
forth thereon reasonably conform, in the Administrative Agent's sole discretion,
to the Regional Prototypical Budget applicable to such Mortgaged Property.
"Intellectual Property" has the meaning set forth in Section
4.12.
"Interest Expense" means (without redundancy) the sum of all
accrued, paid or capitalized interest costs of Borrower and its consolidated
affiliates (excluding capitalized interest funded from an interest reserve) plus
Borrower's pro rata share (based on the higher of its nominal ownership interest
or the ownership percentage used in the calculation of Gross Asset Value --
Cost) of interest expense in its Unconsolidated Affiliates, plus 100% of any
accrued, paid, or capitalized interest incurred (without redundancy) on any
obligation for which Borrower is wholly or partially liable under repayment,
interest carry, or performance guarantees, or other relevant liabilities; minus,
to the extent included in the foregoing, financing costs and fees related to (i)
Indebtedness which has been incurred before the Effective Date, (ii) the Sale
Leaseback Facility, and (iii) the Loan.
"Interest Period" has the meaning set forth in Section 2.7.
"Leases" means all leases, licenses and other arrangements
pursuant to which any Person has the right or option to occupy or use any
portion of any Mortgaged Property, and shall include all right, title and
interest to receive all rent and other revenue thereunder, and shall include all
guaranties of the obligations of all such Persons.
"Lender" or "Lenders" has the meaning set forth in the
introductory paragraph of this Agreement, and any successors and assigns.
"Lending Office" means, with respect to any of the Lenders,
the branch or branches (or affiliate or affiliates) from which any of such
Lender's Advances are made or maintained and for the account of which all
payments of principal of, and interest on, such Lender's Advances are made, as
designated in writing from time to time to the Arranger and the Administrative
Agent and the Borrower.
"Leverage Percentage" means, as of any Applicable Margin
Adjustment Date and after giving effect to any Applicable Margin Adjustment
Event giving rise thereto, the quotient of the outstanding principal amount of
the Loan, divided by the aggregate Eligible Costs for all Mortgaged Properties,
expressed as a percentage. In no event shall such Leverage Percentage be
permitted to exceed thirty eight percent (38%).
"LIBO Rate" means, with respect to any Interest Period, the
average rate of interest per annum (rounded upwards, if necessary, to the next
highest 1/16th of 1%) at which deposits in immediately available funds in
dollars are offered to Xxxxx Fargo Bank National Association (at approximately
12:00 noon (New York time), two Business Days prior to the first day of such
Interest Period) by first class banks in the interbank Eurodollar market, for
delivery on the first day of such Interest Period, such deposits being for a
period of time equal or comparable to such Interest period and in an amount
equal to or comparable to the principal amount of the Advance to which such
Interest Period relates. Each determination of the LIBO Rate by the
Administrative Agent shall, in absence of demonstrable error, be conclusive and
binding.
"LIBOR Applicable Margin" means, as of any Applicable Margin
Adjustment Date (i) if the Leverage Percentage as of such Applicable Margin
Adjustment Date is less than fifteen percent (15%), two hundred (200) basis
points, (ii) if the Leverage Percentage as of such Applicable Margin Adjustment
Date is equal to or greater than fifteen percent (15%) but less than twenty five
percent (25%), two hundred fifty (250) basis points, and (iii) if the Leverage
Percentage as of such Applicable Margin Adjustment Date is equal to or greater
than twenty five percent (25%) and up to a maximum of thirty eight percent
(38%), three hundred (300) basis points.
"Lien" means with respect to any asset: any mortgage, pledge,
security interest, encumbrance, lien, charge, or deposit arrangement or other
arrangement having the practical effect of the foregoing and shall include the
interest of a vendor or lessor under any conditional sale agreement, capitalized
lease, or other title retention agreement relating to such asset or the filing
of any financing statement under the UCC or comparable law.
"Loan" means, collectively, the loans made by the Lenders
pursuant to the Loan Documents.
"Loan Documents" means, collectively, this Agreement, the
Promissory Notes, all Mortgages, all Financing Statements, the Environmental
Indemnity, all Subsidiary Mortgagor Guaranties and all other documents,
certificates, affidavits and other instruments executed and delivered by the
Borrower and its Affiliates pursuant thereto or in connection therewith, as each
of the same may be amended, modified or otherwise supplemented from time to
time.
"Loss" has the meaning provided in Section 7.16(c).
"Margin Stock" has the meaning provided in Regulation U.
"Market Studies" means, for any Mortgaged Property, all of the
following with respect to such Mortgaged Property in the form of the examples of
the following attached hereto as Exhibit D: (i) a target submarket overview,
(ii) a comparison with the Borrower's acquisition criteria, (iii) an area map,
(iv) a neighborhood map, (v) an aerial photograph, (vi) a contextual site plan,
(vi) a preliminary site plan, (vii) a map indicating retail and restaurant
support, (viii) the identity of and information respecting demand generators and
area employers, (ix) a demand location map, (x) a competitive survey, and (xi) a
competitive survey map.
"Material Adverse Change" means any change, event or
circumstance which has or is reasonably likely to have a material adverse effect
on (i) the ability of the Borrower and its Subsidiaries to perform their
respective obligations under this Agreement or any of the other Loan Documents,
or (ii) the business, condition (financial or otherwise) or results of operation
of the Borrower and its Subsidiaries when taken as a whole.
"Maturity Date" means December 31, 2000, and any extensions
thereof.
"Maximum Availability Amount" means, as of any date of
determination, the least of:
(a) the Commitment,
(b) thirty eight percent (38%) of the
aggregate Stabilized Appraised Value of all of the Mortgaged Properties;
(c) thirty eight percent (38%) of the Eligible
Costs of all of the Mortgaged Properties; and
(d) the sum of the Property Amount for each Mortgaged
Property, as hereinafter defined.
As used herein, the "Property Amount" with respect to any Mortgaged Property
means, as of any date of determination, the least of :
(i) the sum of: (A) forty five percent(45%) of the
aggregate Eligible Acquisition Costs for such Mortgaged Property, plus (B)
thirty five percent (35%) of the aggregate Eligible Direct Costs and the
aggregate Eligible Indirect Costs for such Mortgaged Property; and
(ii) with respect to any Mortgaged Property which is
a Stabilized Project, forty five percent
(45%) of the Estimated Operating Property Value of such Mortgaged Property.
"Xxxxxxx Xxxxx Facility" means the credit facility in the
original amount of $122,028,471 arranged by, and secured by mortgage liens held
by, Xxxxxxx Xxxxx Mortgage Capital, Inc.
"Mortgaged Properties" means, collectively, each Property of
the Borrower or any Subsidiary Mortgagor which is located in a Suburban Area and
which is (and for so long as same is) mortgaged to the Arranger pursuant to the
terms hereof, and shall include all of the "Property", as such term is defined
in the Mortgages.
"Mortgages" means those certain deeds of trust, deeds to
secure debt, mortgages and security agreements with assignments of leases,
rents, operating agreements and management agreements and fixture filings
delivered by the Borrower or any Subsidiary Mortgagor in favor of the Arranger
and covering the Mortgaged Properties, substantially (i.e., with such
modifications as may be required by, or, in the Arranger's and the
Administrative Agent's reasonable judgment, appropriate for, the jurisdiction in
which a particular Mortgaged Property is located) in the form attached hereto as
Exhibit E, as the same may be amended, modified, or otherwise supplemented from
time to time.
"Net Operating Income" or "NOI" means, with respect to any
appropriate period and any Properties, the gross revenues from such Properties
for such period less all direct operating expenses of such Properties,
including, without limitation, expenses for the following to the extent same
relate to such Properties: personnel, landscaping, contracts, utilities,
housekeeping, repairs and maintenance, marketing, administrative duties,
insurance and real estate taxes for such period (other than interest expense,
depreciation, amortization and expenditures capitalized in accordance with
GAAP).
"New Mortgaged Property" means any Property and all rights,
titles and interests appurtenant thereto which the Borrower or any Subsidiary
Mortgagor proposes to encumber by a Mortgage at any time on or after the
Effective Date.
"Non-public Information" means any information delivered by
the Borrower to the Arranger or the Administrative Agent or the Lenders (in
their capacities as such) pursuant to this Agreement which is not publicly
disclosed or known, or which cannot be readily derived from information which is
publicly disclosed or known.
"Notice of Borrowing" has the meaning provided in Section 2.3.
"Notifying Lender" has the meaning provided in Section 2.13.
"Participant" has the meaning provided in Section 7.17.
"Payment Office" means the office of the Administrative Agent
located at 0000 X. Xxxx Xxxxx, Xxxxx 000, Xx Xxxxxxx, Xxxxxxxxxx 00000.
"Percentage" means each Lender's percentage share of the
Commitment as set forth on Exhibit A hereto.
"Period Fraction" means, with respect to any period of time, a
fraction, the numerator of which is the actual number of days in such period,
and the denominator of which is 360.
"Permissible Assumed Indebtedness" has the meaning provided in
Section 5.3(a)(iv).
"Permitted Encumbrances" means, with respect to each of the
Mortgaged Properties, (i) all exceptions to title insurance coverage set forth
in the title insurance policies insuring the Mortgages covering such Mortgaged
Properties, other than standard printed exceptions, as of the date such policies
are issued, (ii) all liens for real estate taxes and assessments provided either
(x) that the last day by which such taxes or assessments may be paid without the
imposition of any interest, fine or penalty has not occurred, or (y) the amount
or validity of such taxes or assessments are being contested in good faith by
appropriate proceedings which have the effect of staying enforcement or
execution of such liens and with respect to which adequate reserves in
conformity with GAAP have been provided on the books of Borrower, (iii)
Development Encumbrances, (iv) mechanics' and materialmen's liens, the existence
of which do not constitute or create a Material Adverse Change, and which remain
unsatisfied, unbonded or unstayed for no more than thirty (30) days other than
those the amount or validity of which are being contested in good faith by
appropriate proceedings which have the effect of staying enforcement or
execution of such liens and with respect to which adequate reserves in
conformity with GAAP have been provided on the books of Borrower, and (v) Leases
which are subordinate to the lien of the Mortgages.
"Permitted Purpose" means reimbursement to the Borrower of a
portion of the Total Costs with respect to each Mortgaged Property and general
working capital purposes (other than the purchase of Capital Stock).
"Person" means any individual, partnership, firm, corporation,
association, joint venture, joint stock company, trust, unincorporated
organization or other entity, or any governmental or political subdivision or
agency, department, or instrumentality thereof.
"Plan" means any multiemployer plan or single employer plan,
as defined in Section 4001 and subject to Title IV of ERISA, which is
maintained, or at any time during the five calendar years preceding the date of
this Agreement was maintained, for employees of the Borrower or a Subsidiary of
the Borrower or an ERISA Affiliate.
"Plans and Specifications" has the meaning specified in Section
3.2(g).
"Preferred Dividends" means, without duplication, the
dividends accrued, paid or declared under the Convertible Preferred Securities.
"Presence" means, when used in connection with Hazardous
Materials, treatment, use, storage, handling, repair, encapsulation, disposal,
transportation, spill, discharge and release.
"Prime Lending Rate" means the rate at which the
Administrative Agent announces in San Francisco, California from time to time as
its prime lending rate, as in effect from time to time. The Prime Lending Rate
is a reference rate and does not necessarily represent the lowest or best rate
actually charged to any customer by the Administrative Agent or any Lender. The
Administrative Agent and each Lender may make commercial loans or other loans at
rates of interest at, above or below the Prime Lending Rate.
"Prime Rate Applicable Margin" means, as of any Applicable
Margin Adjustment Date (i) if the Leverage Percentage as of such Applicable
Margin Adjustment Date is less than fifteen percent (15%), one hundred (100)
basis points, (ii) if the Leverage Percentage as of such Applicable Margin
Adjustment Date is equal to or greater than fifteen percent (15%) but less than
twenty five percent (25%), one hundred fifty (150) basis points, and (iii) if
the Leverage Percentage as of such Applicable Margin Adjustment Date is equal to
or greater than twenty five percent (25%) and up to a maximum of thirty eight
percent (38%), two hundred (200) basis points.
"Proforma Operating Statement" means, for any Mortgaged
Property, a completed pro forma operating statement with respect to such
Mortgaged Property in the form of Exhibit F attached hereto, accurate as of the
date of such statement, and containing the information required to complete such
schedule in the manner and detail contemplated by such Exhibit, which shall be
acceptable in form and substance to the Administrative Agent in its sole
discretion.
"Project Cost Report" means, for any Mortgaged Property, a
completed project cost report with respect to such Mortgaged Property in the
form of Exhibit G attached hereto, accurate as of the date of such form, and
containing the information required to complete such schedule in the manner and
detail contemplated by such Exhibit, and including, without limitation, the
current actual and projected Total Costs with respect to such Mortgaged Property
and the deviations of same (on line-item by line-item basis) from the Budget
furnished to Arranger and the Administrative Agent with respect to such
Mortgaged Property.
"Project under Development" means a Property (a) on which
construction of an extended stay facility has commenced and (b) which has not
been open as an extended stay facility for at least four (4) months.
"Promissory Notes" means the promissory notes made by the
Borrower to each Lender substantially in the form annexed hereto as Exhibit H.
"Properties" means all land owned or leased by the Borrower
and/or any of its Subsidiaries, all buildings, structures, improvements,
fixtures and equipment, and parking areas located thereon and therein, and all
easements, rights, interests, privileges and other appurtenances thereto, of any
nature whatsoever. An individual "Property" is a portion of land owned or leased
by the Borrower and/or its Subsidiaries which is bound by a perimeter containing
no land not owned or leased by Borrower and/or any of its Subsidiaries, together
with all buildings, structures, improvements and parking areas fixtures and
equipment located thereon, and all easements, rights, interests, privileges and
other appurtenances thereto, of any nature whatsoever.
"Purchasing Lender" has the meaning provided in Section 7.18.
"Regional Prototypical Budget" means, for any Mortgaged
Property, the prototypical budget in the form set forth in Exhibit I hereto with
respect to the region in which such Mortgaged Property is located.
"Regulation D" and "Regulation U" mean Regulation D and
Regulation U, respectively, of the Board of Governors of the Federal Reserve
System as from time to time in effect and any successor thereto.
"Realty" means SC Realty Incorporated, a Nevada corporation.
"Release" has the meaning provided in Section 8.11.
"Release Parcel" has the meaning provided in Section 8.11.
"Release Request" has the meaning provided in Section 8.11.
"Relevant Environmental Laws" means all Requirements of Law
and all other applicable Federal, state and local environmental statutes,
regulations, rules, ordinances, codes, licenses, permits, approvals, plans,
authorizations, guidelines, concessions, franchises, orders and similar items,
and rules of common law (whether now existing or hereafter enacted or
promulgated and whether now contemplated, anticipated or foreseeable or not) of
all courts and Governmental Authorities, and all applicable judicial and
administrative and regulatory decrees, judgments and orders, including common
law rulings and determinations, relating to injury to or the protection of the
Environment, including, without limitation, all requirements pertaining to
reporting, licensing, permitting, investigation, remediation and removal of
emissions, discharges, releases or threatened releases of Hazardous Materials
into the Environment, or relating to the manufacture, processing, distribution,
use, treatment, storage, disposal, transport or handling of Hazardous Materials.
"Required Lenders" means the Lenders holding at least sixty
six and two thirds percent (66 2/3%) of the Commitment.
"Requirement of Law" means, as to any Person, the certificate
of incorporation and by-laws, certificate of partnership and partnership
agreement or other organizational or governing documents of such Person, and any
law, treaty, rule, or regulation or determination of an arbitrator or a court or
other Governmental Authority, in each case applicable to or binding upon such
Person or any of its property or to which such Person or any of its property is
subject.
"Sale-Leaseback Facility" means the lease dated February 23,
1999 between HPT, as lessor, and HVI (2) Incorporated, a Delaware corporation,
as lessee.
"Stabilized Appraised Value" means appraised value reasonably
acceptable to all of the Lenders, but at least satisfying the requirements for
an acceptable real estate appraisal imposed from time to time on each Lender by
the applicable Governmental Authority.
"Stabilized Project" means a Mortgaged Property which is (a)
Construction Complete and is open for business as an extended stay facility and
(b) has been either so open for at least twenty four (24) weeks or has, at any
time, been at least eighty percent (80%) occupied for at least one (1) week.
"Stockholders' Equity" means stockholders' equity as reflected
on the balance sheet of the Borrower determined in accordance with GAAP.
"Studies" means environmental studies and investigations
respecting (i) the condition and circumstances of the Environment on, under,
about or affecting any Mortgaged Property, (ii) any actual or suspected
Environmental Discharge or Presence of any Hazardous Materials on, under, about
or affecting any Mortgaged Property, and (iii) any actual or suspected violation
of any Relevant Environmental Laws on, under, about or related to any Mortgaged
Property.
"Subsidiary" of any Person means a corporation, partnership,
limited liability, trust or other entity of which a majority of the outstanding
shares of stock or beneficial interests of each class having ordinary voting
power is owned by such Person, by one or more Subsidiaries of such Person, or by
such Person and one or more of its Subsidiaries.
"Subsidiary Mortgagor" means any wholly-owned Subsidiary of
Borrower, any wholly-owned Subsidiary of a wholly-owned Subsidiary of Borrower,
or, with Lenders' consent, any other Person which owns any portion of or
interest in any New Mortgaged Property.
"Subsidiary Mortgagor Guaranty" has the meaning provided in
Section 3.3(b).
"Suburban Area" means an area outside a major metropolitan city.
"Tangible Net Worth" is defined as the tangible net worth of
the Borrower, calculated on a GAAP basis, plus increases in accumulated
depreciation and amortization that occur subsequent to the Effective Date.
"Taxes" has the meaning provided in Section 2.17.
"Total Costs" means, with respect to any Property, the sum of
(i) the Acquisition Costs with respect to such Property, (ii) the Direct Costs
with respect to such Property, and (iii) the Indirect Costs with respect to such
Property.
"Total Liabilities" includes all GAAP liabilities and certain
non-GAAP (off balance sheet) liabilities with no redundancy. Included are the
following: non-recourse mortgage debt; letters of credit; binding purchase
obligations; repurchase obligations; forward commitments; unsecured debt;
accounts payable; accrued expenses, capitalized lease obligations, and to the
extent required under GAAP to be reported as a liability, any other lease
obligations (including ground leases); guarantees of indebtedness; subordinated
debt; unfunded obligations of Borrower and its Subsidiaries; forward equity
commitments (but excluding forward equity subscriptions for which stock is
issued within thirty (30) days of receipt of equity proceeds); Derivative
Exposure (as hereinafter designed); and any other non-GAAP liability that the
Security and Exchange Commission has determined, either currently or in the
future, should be treated as debt. Total Liabilities will include (without
redundancy): (a) one hundred percent (100%) of the recourse liability of
Borrower and its Subsidiaries under (i) guarantees of indebtedness or (ii) loans
where Borrower or a Subsidiary of Borrower is liable for debt as a general
partner and (b) Borrower's and its Subsidiaries' share of non-recourse debt in
their Unconsolidated Affiliates based on the greater of its nominal ownership
interest or the percentage of ownership interest used to calculate Gross Asset
Value -- Cost. As used herein, "Derivative Exposure" means the maximum liability
(including costs, fees and expenses), based upon a liquidation or termination as
of the date of the applicable covenant compliance test, of any Person under any
interest rate swap, collar, cap or other interest rate protection agreements,
treasury locks, foreign currency exchange agreements, commodity purchase or
option agreements or other interest or exchange rate or commodity price hedging
agreements.
For purposes of purchase obligations, repurchase obligations and forward
commitments, the amount of Total Liabilities of a Person at any given time in
respect of a contract to purchase real property shall be determined as follows:
(x) if, at such time, the seller of such real property would be entitled to
specific enforcement of the contract against such Person, then the amount of
Total Liabilities shall equal the total purchase price payable by such Person
under the contract, otherwise, (y) the amount of Total Liabilities shall equal
the aggregate amount of due diligence deposits, xxxxxxx money payments and other
similar payments made by such Person under the contract which, at such time,
would be subject to forfeiture upon termination of such contract.
For purposes of purchase obligations, repurchase obligations and forward
commitments, the amount of Total Liabilities of a Person at any given time in
respect of a contract to purchase a property being renovated or developed by a
third party shall equal the maximum amount reasonably estimated to be payable
under such contract during the remaining term of such contract.
"UCC" means the Uniform Commercial Code as from time to time
in effect in the relevant jurisdiction.
"Unconsolidated Affiliate" means, with respect to any Person,
an unconsolidated affiliate of such Person (determined in accordance with GAAP).
"Unsecured Advances" has the meaning provided in Section 3.4.
"Use Requirements" means any and all building codes or
permits, certificates of occupancy or compliance, restrictions of record,
easements, reciprocal easements or other agreements, subdivision, zoning,
wetlands protection, or land use laws or ordinances and any and all applicable
rules or regulations of any Governmental Authority affecting any part of any
Mortgaged Property.
Section 1.2 "Accounting Terms and Determinations." Unless otherwise defined
or specified herein, all accounting terms shall be construed herein, all
accounting determinations hereunder shall be made, all financial statements
required to be delivered hereunder shall be prepared, and all financial records
shall be maintained in accordance with GAAP.
Section 1.3 "Other Definitional Terms." The words "hereof," "herein," and
"hereunder" and words of similar import when used in this Agreement shall refer
to this Agreement as a whole and not to any particular provision of this
Agreement, and Article, section, schedule, exhibit, and like references are to
this Agreement unless otherwise specified. References to agreements,
instruments, documents, statutes, and regulations include all amendments,
supplements, and modifications thereof as may be in effect from time to time.
ARTICLE II. AMOUNTS AND TERMS OF LOANS
Section 2.1 Commitment.
a) Subject to and upon the terms and conditions herein set forth, each Lender,
severally and not jointly, agrees to make loans (each an "Advance" and
collectively, the "Advances") pro rata in accordance with such Lender's
Percentage to the Borrower from time to time during the period from the
Effective Date to but excluding the Maturity Date.
b) The aggregate principal amount outstanding of all Advances made pursuant
hereto by the Lenders, at any time, shall not exceed the lesser of the
Commitment or the then Maximum Availability Amount. There may not be more than
one Advance made on any day. Within the foregoing limits and subject to the
conditions set out in this Agreement, the Borrower may borrow Advances under
this Section 2.1, repay Advances under Section 2.8, and reborrow Advances.
c) The aggregate principal amount of each Advance hereunder shall be not less
than $500,000 and shall be in integral multiples of $100,000.
Sectioni 2.2 "Advances (a)." The Lenders will make Advances of the Loan for
(and only for) any Permitted Purpose subject to and in accordance with the terms
and conditions of this Agreement, including, without limitation, subject to
satisfaction of all conditions precedent to Advances set forth herein.
b) The initial Advance of the loan proceeds will be made upon satisfaction of
the conditions set forth in Article III of this Agreement, and all subsequent
advances shall be made no more frequently than (i) twice during any calendar
month thereafter and (ii) once every 12 days.
Section 2.3. Whenever the Borrower desires to receive an Advance hereunder,
it shall give the Arranger and the Administrative Agent at least five Business
Days' prior written notice of the proposed Advance to be made hereunder, such
notice to be given prior to 12:00 noon (New York time) on the date specified.
Each such notice (each a "Notice of Borrowing") shall be in the form of Exhibit
J, be irrevocable, and specify the principal amount of the Advance to be made
and the date (which shall be a Business Day) of the Advance.
Section 2.4. The Administrative Agent shall promptly (but in no event less
than three Business Days prior to the date of the Advance) notify each Lender of
its Percentage of each Advance and the date of such Advance. On the date
specified for the Advance, each Lender shall make available to the
Administrative Agent at the Payment Office no later than 12:00 noon. (New York
time) in immediately available funds an amount equal to such Lender's Percentage
of such Advance. No later than 3:00 p.m. (New York time) on the date of each
Advance, the Administrative Agent will make available to the Borrower at the
Payment Office the full amount of the Advance.
Section 2.5 Promissory Notes; Collateral.
a) The Borrower's obligation to pay the principal of, and interest on, the
Advances made by each Lender shall be evidenced by one or more Promissory Notes
in the face amount of each such Lender's Percentage of the Commitment, with
blanks as to payee, date and principal amount appropriately completed. The
determination by the Administrative Agent of the amount of principal outstanding
hereunder or under any Promissory Note shall, except for patent error, be final,
conclusive and binding upon the Borrower for all purposes.
b) Each borrowing, repayment and reborrowing hereunder shall be recorded by the
Administrative Agent and the entries in such records shall, except for patent
error, be final, conclusive and binding on the Borrower; provided, however, that
no failure to make or error in making a recordation of an Advance shall in any
way limit, affect or modify the obligation of the Borrower to repay any
obligations, or the rights of the Administrative Agent and the Lenders to any
amounts due under this Agreement, the Loan Documents and the Promissory Notes.
c) Except as otherwise set forth in the Loan Documents, each item of Collateral
shall secure the payment and performance of all indebtedness and obligations of
the Borrower under this Agreement, including without limitation, any increased
cost under Section 2.14 hereof, and each other Loan Document.
Section 2.6 "Interest on Advances."
a) The Borrower agrees to pay interest in respect of the unpaid principal amount
of each Advance from the date such Advance is made at a rate per annum for each
Interest Period equal to the LIBOR Applicable Margin plus the relevant Adjusted
LIBO Rate. Interest on each Advance shall accrue from and including the date of
such Advance to but excluding the date of any repayment thereof and shall be
payable, in arrears, with respect to each Advance, (i) on the first day of each
calendar month, (ii) at maturity (whether by acceleration or otherwise), and
(iii) after maturity, on demand. Notwithstanding the foregoing, interest on each
Advance bearing interest at the Alternate Rate pursuant to the terms of this
Agreement shall be payable in arrears (i) on the first day of each calendar
month during the Interest Period applicable to such Advance, (ii) at maturity
(whether by acceleration or otherwise), and (iii) after maturity, on demand. No
later than five (5) Business Days prior to an Applicable Margin Adjustment Date,
Borrower shall furnish the Administrative Agent with calculations of the LIBOR
Applicable Margin, Federal Funds Applicable Margin and Prime Rate Applicable
Margin as of the Applicable Margin Adjustment Date, together with sufficient
detail to allow the Administrative Agent to review the Borrower's calculations.
The LIBOR Applicable Margin, Federal Funds Applicable Margin and Prime Rate
Applicable Margin shall be recalculated by the Administrative Agent (which
calculation shall be binding on all parties, absent patent error), and the
interest on each Advance shall be correspondingly increased or decreased, on and
as of each Applicable Margin Adjustment Date. In the event that the date on
which the interest on any Advance is converted to, or otherwise commences to
accrue at, the Alternate Rate is a date that is not an Applicable Margin
Adjustment Date, then the Alternate Rate shall be calculated on the basis of the
Leverage Percentage as of the most recent Applicable Margin Adjustment Date.
b) Overdue principal and, to the extent permitted by law, overdue interest in
respect of each Advance, and all other overdue amounts owing hereunder, shall
bear interest for each day that such amounts are overdue at a rate (the "Default
Rate") per annum equal to three percent (3%) per annum plus the interest rate
otherwise applicable thereto from the first day such amounts are overdue to but
excluding the date such overdue amounts are paid.
c) The Administrative Agent, upon determining the Adjusted LIBO Rate for any
Interest Period, shall promptly notify by telephone (confirmed in writing) or in
writing the Borrower thereof. All such determinations shall be binding on all
parties, absent patent error.
d) It is expressly stipulated and agreed to be the intent of the Lenders and
Borrower at all times to comply with the applicable law governing the highest
lawful interest rate. If the applicable law is ever judicially interpreted so as
to render usurious any amount called for under this Agreement or under any of
the other Loan Documents, or contracted for, charged, taken, reserved or
received with respect to the Indebtedness evidenced thereby, or if acceleration
of the maturity of the obligations, or the rights of the Administrative Agent
and the Lenders to any amounts due, under this Agreement, the Loan Documents and
the Promissory Notes, any prepayment by Borrower, or any other circumstance
whatsoever, results in Borrower having paid any interest, penalty, fee or other
amount in excess of that permitted by applicable law, then it is the express
intent of Borrower and Lenders that all excess amounts theretofore collected by
Lenders be credited on the principal balance of the Advances (or, at Lenders'
option, paid over to Borrower), and the provisions of this Agreement
and the other Loan Documents immediately be deemed reformed and the amounts
thereafter collectible hereunder and thereunder reduced, without the necessity
of the execution of any new document, so as to comply with the applicable law,
but so as to permit the recovery of the fullest amount otherwise called for
hereunder and thereunder. The right to accelerate maturity of the obligations,
or the rights of the Administrative Agent and the Lenders to any amounts due,
under this Agreement, the Loan Documents and the Promissory Notes, does not
include the right to accelerate any interest which has not otherwise accrued on
the date of such acceleration, and Lenders do not intend to collect any unearned
interest in the event of acceleration. All sums paid or agreed to be paid to
Lenders for the use, forbearance or detention of the obligations, or the rights
of the Administrative Agent and the Lenders to any amounts due, under this
Agreement, the Loan Documents and the Promissory Notes shall, to the extent
permitted by applicable law, be amortized, prorated, allocated and spread
throughout the full term of such obligations and amounts until payment in full
so that the rate or amount of interest on account of such secured obligations
does not exceed the maximum rate or amount of interest permitted under
applicable law.
Section 2.7 "Interest Periods." An interest period (each an "Interest
Period") shall be applicable with respect to each Advance, which shall be a
period of one, two, three or six months as selected by the Borrower in the
Notice of Borrowing for such Advance, provided that:
(i) the initial Interest Period for any Advance shall commence on the date of
such Advance;
(ii) subject to the provisions of Section 6.2 hereof and provided that no Event
of Default shall have occurred and be continuing, at the end of the initial
Interest Period, and each subsequent Interest Period for any Advance, the
Borrower shall be permitted to select an additional Interest Period for such
Advance by delivering a written notice thereof, in the form of Exhibit K, to the
Administrative Agent at any time prior to 12:00 noon (New York time) on the
third Business Day prior to the expiration of the then current Interest Period
applicable to such Advance, provided that if no Interest Period selection is
delivered to the Administrative Agent by such time, the Borrower shall be deemed
to have selected an Interest Period of one month and such Interest Period
selected or deemed to have been selected for such Advance may not be changed
without the consent of the Administrative Agent;
(iii) if any Interest Period would otherwise expire on a day which is not a
Business Day, such Interest Period shall expire on the next succeeding Business
Day, provided that if any Interest Period in respect of an Advance (other than
an Advance referred to in Section 2.13(b)(ii) or Section 2.14(b)(ii)) would
otherwise expire on a day that is not a Business Day but is a day of the month
after which no further Business Day occurs in such month, such Interest Period
shall expire on the next preceding Business Day;
(iv) any Interest Period in respect of an Advance which begins on the last
Business Day of a calendar month (or on a day for which there is no numerically
corresponding day in the calendar month at the end of such Interest Period)
shall, subject to clause (v) below, end on the last Business Day of a calendar
month;
(v) no Interest Period shall extend beyond the Maturity Date; and
(vi) there shall be no more than six Interest Periods in effect at any time.
Section 2.8 "Repayment of Advances." The Borrower shall repay to the
Administrative Agent, for the account of the Lenders, the unpaid principal
amount of each Advance made by the Lenders hereunder, together with all accrued
and unpaid interest thereon and any other sums due and payable to the Lenders
hereunder or under the other Loan Documents on the Maturity Date.
Section 2.9 "Prepayments of Advances."
a) The Borrower may prepay all outstanding Advances, any one Advance or portion
thereof on any Business Day without penalty, premium or additional charge,
except as set forth in Section 2.16 hereof; provided such prepayment shall be at
least equal to the lesser of $100,000 or the outstanding amount of such Advance.
Upon three (3) days written notice to the Arranger and the Administrative Agent,
the Borrower may terminate the Commitment by prepaying all outstanding Advances
and all other amounts and fees due to the Administrative Agent and the Lenders
under this Agreement and the other Loan Documents.
b) The Borrower shall be liable for all amounts payable pursuant to Section 2.16
with respect to a prepayment of an Advance on any date other than the last day
of the Interest Period related to such Advance where no new Interest Period
shall have been selected or deemed to have been selected pursuant to Section
2.7(ii) for such Advance.
Section 2.10 "Fees." The Borrower shall pay to the Administrative Agent for
the account of the Lenders a commitment fee (the "Commitment Fee") equal to
three eighths of one percent (0.375%) per annum of the Average Undrawn Balance
of the Commitment. The amount of the Commitment Fee shall be calculated by the
Administrative Agent and, absent patent error, shall be binding on all parties.
The Commitment Fee shall be due and payable (i) quarterly in arrears on the last
day of each calendar quarter, and (ii) on the Maturity Date or earlier
termination of the Loan. Each payment on account of the Commitment Fee for a
period which is less than a full calendar quarter shall be prorated. The
Borrower agrees to pay to the Administrative Agent such fees for services
rendered by the Administrative Agent as shall be separately agreed upon in
writing between the Borrower and the Administrative Agent.
Section 2.11 "Payments, Etc."
a) All payments under this Agreement shall be pro rata among the Lenders in
accordance with their Percentages and shall be made by the Borrower, without
defense, setoff, or counterclaim, to the Administrative Agent not later than
12:00 noon (New York time) on the date when due and shall be made in Dollars in
immediately available funds at the Payment Office and any funds received by the
Administrative Agent after such time shall, for all purposes of this Agreement,
be deemed to have been paid on the next succeeding Business Day. The
Administrative Agent shall thereafter cause to be distributed to the Lenders, on
the Business Day when paid, in like funds their Percentage of payments so
received. Notwithstanding the foregoing, any payments received by the
Administrative Agent after 12:00 noon (New York time) shall be distributed to
the Lenders on the following Business Day.
b) Whenever any payment to be made hereunder or under the Promissory Notes shall
be stated to be due on a day which is not a Business Day, the due date thereof
shall be extended to the next succeeding Business Day (unless the relevant
Interest Period expires on the next preceding Business Day pursuant to Section
2.7(iii), in which case the due date shall be the next preceding Business Day)
and, with respect to payments of principal, interest thereon shall be payable at
the applicable rate during such extension.
c) All computations of interest on the Advances shall be made on the basis of a
year of (x) in the case of Advances on which interest is computed on the basis
of the LIBO Rate, 360 days, and (y) in the case of Advances on which interest is
computed on the basis of the Alternate Rate, 365/366 days, in either case for
the actual number of days (including the first day but excluding the last day)
occurring in the period for which such interest is payable.
Section 2.12 "Interest Rate Not Ascertainable, Etc." If the Administrative
Agent shall have determined (which determination shall be conclusive and binding
upon the Borrower) that on any date for determining the LIBO Rate for any
Interest Period, by reason of any circumstances affecting the interbank
Eurodollar market generally, adequate and fair means do not exist for
ascertaining the applicable interest rate on the basis provided for in the
definition of Adjusted LIBO Rate, then, and in any such event, the
Administrative Agent shall forthwith give notice (by telephone confirmed in
writing) to the Borrower of such determination. Until the Administrative Agent
notifies the Borrower that the circumstances giving rise to the suspension
described herein no longer exist:
(i) any Advance made hereunder shall bear interest at the
then applicable Alternate Rate; and
(ii) if any Advance affected is then outstanding, each such
Advance shall immediately convert into an Advance bearing interest at the then
applicable Alternate Rate with an Interest Period ending on the date on which
the Interest Period applicable to the Advance affected expires.
Section 2.13 Illegality.
a) If any Lender (a "Notifying Lender") shall have determined at any time that
the making or continuance of any Advance has become unlawful by compliance by
such Lender in good faith with any applicable Requirement of Law adopted or
becoming effective after the date hereof, then, in any such event, the Notifying
Lender shall give prompt notice (by telephone confirmed in writing) to the
Arranger and the Administrative Agent and the Borrower of such determination.
b) Upon the giving of the notice to the Arranger and the Administrative Agent
and the Borrower referred to in subsection (a) above, (i) the Borrower's right
to request and the Notifying Lender's obligation to make Advances shall be
immediately suspended, and (ii) if any Advance of the Notifying Lender affected
thereby is then outstanding, each such Advance shall immediately convert into an
Advance bearing interest at the then applicable Alternate Rate with an Interest
Period ending on the date on which the Interest Period applicable to the Advance
affected expires.
Section 2.14 Increased Costs.
a) If, by reason of (x) after the date hereof, the implementation of or any
change (including, without limitation, any change by way of imposition or
increase of reserve or capital adequacy requirements) in, or in the
interpretation by any Governmental Authority or any other recognized authority
of, any law or regulation, or (y) the compliance with any guideline or request
from any central bank or other Governmental Authority or quasi-Governmental
Authority exercising control over banks or financial institutions generally
(whether or not having the force of law) adopted or becoming effective after the
date hereof:
(i) any Lender (or its Lending Office) shall be subject to any tax, duty,
or other charge, with respect to the Advances or its obligation to make
Advances, or shall change the basis of taxation of payments to any Lender of the
principal of or interest on the Advances or its obligation to make Advances
(except for changes in the rate of tax on the overall net income of such Lender
or its Lending Office imposed by the jurisdiction in which such Lender's
principal executive office or Lending Office is located); or
(ii) any reserve, special deposit, or similar requirement (including,
without limitation, any reserve, special deposit, or similar requirement imposed
by the Board of Governors of the Federal Reserve System) against assets of,
deposits with or for the account of, or credit extended by, any Lender or its
Lending Office shall be imposed or deemed applicable or any other condition
affecting the Advances shall be imposed on such Lender or its Lending Office or
the interbank Eurodollar market;
and as a result thereof there shall be any cost to such Lender of agreeing to
make or maintain the Advances, or there shall be a reduction in the amount
received or receivable by such Lender or its Lending Office, then the Borrower
shall from time to time, upon written notice and demand (including such Lender's
reasonable details with respect to such increased cost) promptly given by the
Administrative Agent, pay to the Administrative Agent for the account of such
Lender, within five Business Days after the date specified in such notice and
demand, additional amounts sufficient to indemnify such Lender against such
increased cost. In the event that a Lender becomes aware of the imposition of a
cost to such Lender or a reduction in the amount to be received or receivable by
such Lender or its Lending Office which is an additional cost pursuant to this
Section 2.14, such Lender shall promptly notify the Administrative Agent and the
Borrower in writing of such imposition or reduction, which notice shall include
such Lender's reasonable details with respect to such increased cost. With
respect to costs or reductions incurred by a Lender pursuant to this Section
2.14 relating to any period in which the Commitment is in effect, the provisions
of this Section 2.14 shall survive the termination of this Agreement and the
payment of the Promissory Notes and all other amounts payable hereunder.
b) If the Required Lenders shall notify the Borrower in writing (with a copy to
the Administrative Agent) that at any time, because of the circumstances
described in clause (x) or (y) in Section 2.14(a) or any other circumstances
arising after the Closing Date and relating to any period in which the
Commitment is in effect affecting the interbank Eurodollar market generally, the
then applicable Adjusted LIBO Rate, as determined by the Administrative Agent,
will not adequately and fairly reflect the cost to the Lenders of funding the
Advances, then, subject to Section 2.14(c), thereafter:
(i) any Advance made hereunder shall bear interest at the Alternate Rate;
and
(ii) if the affected Advance is then outstanding, the Borrower shall
immediately, or if permitted by applicable law, no later than the date permitted
thereby, upon at least one Business Day's written notice to the Lenders, convert
each such Advance into an Advance bearing interest at the Alternate Rate with an
Interest Period ending on the date on which the Interest Period applicable to
the affected Advance expires.
c) If the Required Lenders shall notify the Borrower in writing (with a copy to
the Administrative Agent) that at any time, because of the circumstances
described in clause (x) or (y) in Section 2.14(a) or any other circumstances
arising after the Closing Date and relating to any period in which the
Commitment is in effect affecting the interbank Eurodollar market generally,
then the Borrower shall be entitled to require each Lender to which such
circumstances apply to assign its Credit Exposure at par to any Person selected
by Borrower that is a financial institution reasonably acceptable to the
Arranger and the Administrative Agent, which assignment shall be effected
pursuant to Section 7.18 hereof.
Section 2.15 "Change of Lending Office." Each Lender agrees that it will
use reasonable efforts to designate an alternate Lending Office with respect to
its Advances affected by the matters or circumstances described in Section 2.12,
2.13 or 2.14 to reduce the liability of the Borrower or avoid the results
provided thereunder, so long as such designation is not disadvantageous to such
Lender as determined by such Lender in its sole discretion.
Section 2.16 "Funding Losses." The Borrower shall compensate each Lender,
upon such Lender's written request to the Administrative Agent and the
Administrative Agent's delivery thereof to the Borrower (which request shall set
forth in reasonable detail the basis for requesting such amounts), for all
losses, expenses, and liabilities (including, without limitation, any interest
paid by such Lender to lenders of funds borrowed by it to make or carry its
Advances to the extent not recovered by such Lender in connection with the
re-employment of such funds but excluding loss of anticipated profits), which
such Lender may sustain: (i) if for any reason (other than a default by such
Lender) an Advance does not occur on the date specified therefor in a Notice of
Borrowing (whether or not withdrawn); (ii) if any repayment of any Advance
occurs on a date which is not the Maturity Date or the last day of an Interest
Period applicable to such Advance (subject to Section 2.9(b)); (iii) if, for any
reason, the Borrower defaults in its obligation to repay any Advances when
required by the terms of this Agreement; or (iv) the occurrence of any of the
events described in Sections 2.12, 2.13 or 2.15. With respect to losses,
expenses and liabilities which a Lender may sustain as described in this Section
2.16 relating to any period in which the Commitment is in effect, the provisions
of this Section 2.16 shall survive the termination of this Agreement and the
payment of the Promissory Notes and all other amounts payable hereunder.
Section 2.17 Taxes
a) All payments made by the Borrower under this Agreement and the Promissory
Notes shall be made free and clear of, and without deduction or withholding for
or on account of, any present or future income, stamp, or other taxes, levies,
imposts, duties, charges, fees, deductions, reserves or withholdings, now or
hereafter imposed, levied, collected, withheld or assessed by any Governmental
Authority, excluding in the case of each Lender, net income taxes and franchise
taxes (imposed in lieu of net income taxes) imposed on such Lender as a result
of a present or former connection between the jurisdiction of the government or
taxing authority imposing such tax and such Lender (excluding a connection
arising solely from such Lender having executed, delivered, or performed its
obligations or received a payment under, or enforced, this Agreement or the
Promissory Notes) or any political subdivision or taxing authority thereof or
therein (all such non-excluded taxes, levies, imposts, duties, charges, fees,
deductions and withholdings being hereinafter called "Taxes"). If any Taxes are
required to be withheld from any amounts payable to any Lender hereunder or
under the Promissory Notes, the amounts so payable to such Lender shall be
increased to the extent necessary to yield to such Lender (after payment of all
Taxes) interest or any such other amounts payable hereunder at the rates or in
the amounts specified in this Agreement and the appropriate Promissory Note.
Whenever any Taxes are payable by the Borrower pursuant to applicable law, as
promptly as possible thereafter the Borrower shall send to the Administrative
Agent a certified copy of an original official receipt received by the Borrower
showing payment thereof. If the Borrower fails to pay any Taxes when due to the
appropriate taxing authority or fails to remit to the Administrative Agent the
required receipts or other required documentary evidence (other than any such
failure due to failure of any Lender to furnish the documents required to be
furnished by such Lender pursuant to Section 2.17(b)), the Borrower shall
indemnify, defend and hold harmless the Administrative Agent and each Lender for
any incremental taxes, interest, or penalties that may become payable by the
Administrative Agent or any Lender as a result of any such failure. With respect
to any obligations of the Borrower pursuant to this Section 2.17 relating to any
period in which the Commitment is in effect, the agreements in this Section
2.17, as they apply to any Advance, shall survive the termination of this
Agreement and the payment of the Promissory Notes and all other amounts payable
hereunder.
b) The Administrative Agent and each Lender shall furnish Borrower and the
Administrative Agent, at least thirty (30) days prior to the date on which the
first payment to each Lender (including each Purchasing Lender) is due, and
annually thereafter during the term of the Loan, with United States Internal
Revenue Service Form 1001, 4224, W-8 or W-9 (or any other successor form) or any
other document evidencing such Lender's exemption from withholding of Taxes from
any amounts payable to such Lender hereunder under as of the Closing Date. If
any Taxes are required to be withheld from any amounts payable to any Lender
hereunder or under the Promissory Notes, then the Borrower shall be entitled to
require such Lender to assign its Credit Exposure at par to any Person selected
by Borrower that is an Eligible Assignee reasonably acceptable to the Arranger
and the Administrative Agent, which assignment shall be effected pursuant to
Section 7.18 hereof.
ARTICLE III. CONDITIONS TO BORROWINGS
The obligation of the Lenders to make an Advance to the Borrower is
subject to the satisfaction of the following conditions:
Section 3.1 "Conditions Precedent to Closing." On or prior to the Effective
Date, all obligations of the Borrower hereunder to the Administrative Agent, the
Arranger and the Lenders incurred prior to the Effective Date and any amounts
payable to the Administrative Agent, the Arranger or the Lenders on the
Effective Date (other than legal fees payable pursuant to the last paragraph of
subsection 3.1(a)), shall have been paid in full. In addition, the following
conditions shall be satisfied:
a) Receipt of Documents. The Administrative Agent and the Arranger shall have
received the following, each dated as of or prior to the Effective Date, in form
and substance satisfactory to the Arranger and the Administrative Agent:
(i) an officer's certificate, dated the Effective Date, signed by any
Co-Chairman, the President, any Senior Vice President, any Vice President or the
Controller of the Borrower, and attested to by the Secretary or any Assistant
Secretary of the Borrower, in the form of Exhibit L with appropriate insertions,
together with copies of the Articles of Incorporation of Borrower certified, as
of a recent date, by the Secretary of State of the State of the Borrower's
incorporation and the By-Laws of Borrower and the resolutions of the Borrower
referred to in such certificate; and certified copies of all other documents, if
any, evidencing corporate action or governmental authorization or approval with
respect to this Agreement, the Promissory Notes, the Advances and the Loan
Documents;
(ii) duly executed and completed Promissory Notes payable to the order of
each Lender;
(iii) a duly executed and delivered Affirmation of Environmental Indemnity;
(iv) opinions of counsel to the Borrower addressed to the Administrative
Agent and the Lenders as to the matters set forth in Exhibits M and N; provided
that local counsel opinions shall be limited to the modifications of Mortgages
except for states where New Mortgaged Properties are located;
(v) financial statements in the forms prescribed by Sections 5.2(a) to (d)
for fiscal year 1997, the fiscal quarter ending September 30, 1998 and the most
recent Accounting Period; provided that prior to March 31, 1999, Borrower will
deliver audited financial statements for the year ended December 31, 1998;
(vi) copies of all financial statements, reports, and proxy statements
mailed to the Borrower's shareholders within the last year, and copies of all
registration statements, periodic reports, and other documents filed by the
Borrower with the Securities and Exchange Commission (or any successor thereto)
and any national securities exchange within the last year;
(vii) such consents or acknowledgements, with respect to such of the
transactions hereunder, from such Persons as the Arranger or its counsel may
reasonably determine to be necessary or appropriate;
(viii) (A) a good standing certificate from the State of Maryland in
respect of the Borrower as of a recent date; and (B) a certificate of the
Secretary of State of each state in which the Borrower owns a Mortgaged Property
or is required to qualify to do business, as to due qualification to do business
as a foreign entity and good standing of Borrower as of a recent date; and
(ix) duly executed, delivered and acknowledged modifications of the
Mortgages, in recordable form, sufficient to protect the Liens of Arranger in
such Mortgaged Properties;
(x) title policy endorsements which have the effect of redating the title
policies insuring the Liens of the Mortgages with no additional exceptions; and
(xi) duly executed and delivered Subsidiary Guaranties.
Execution and delivery of this Agreement by Borrower shall constitute Borrower's
agreement and covenant to pay to the Administrative Agent and the Arranger,
promptly upon demand (together with a reasonably detailed invoice(s) in respect
thereof), all reasonable fees and disbursements of counsel to the Administrative
Agent, the Arranger and the Lenders incurred prior to or on the Effective Date.
b) Receipt of More Documents. The Arranger and the Administrative Agent shall
have received the following, each dated as of or prior to the Effective Date, in
form and substance satisfactory to the Lenders:
(i) originals of an estoppel letter executed by HPT; and
(ii) appraisals on the forty five (45) of the Mortgaged Properties
designated by the Arranger.
(c) Sale-Leaseback. Borrower shall have evidenced to the satisfaction of
Arranger that the Xxxxxxx Xxxxx Facility has been repaid through the execution
of the Sale-Leaseback Facility.
Section 3.2 "Conditions Precedent to Each Advance." At the time of the
making by the Lenders of each Advance (before as well as after giving effect to
such Advance and to the proposed use of the proceeds thereof):
a) The Arranger and the Administrative Agent shall have received a timely Notice
of Borrowing from the Borrower in accordance with Article II;
b) No Default or Event of Default shall have occurred and be continuing;
c) Such Advance shall not cause the aggregate principal amount of all
outstanding Advances to exceed the lesser of (i) the Commitment, and (ii) the
then Maximum Availability Amount;
d) Subject to the provisions of Section 5.5 hereof, all representations and
warranties contained herein and incorporated herein by reference (other than
representations and warranties which are expressly provided as being made only
as of the Effective Date) shall be true and correct in all material respects
with the same effect as though such representations and warranties had been made
on and as of the date of such Advance and the Borrower shall be in compliance in
all material respects with all covenants and agreements contained in Article V
hereof and elsewhere in this Agreement;
e) There shall have been no Material Adverse Change and no Requirement of Law or
Contractual Obligation of the Borrower or any Subsidiary could reasonably be
expected to result in a Material Adverse Change;
f) No litigation, investigation or proceeding before or by any arbitrator or
Governmental Authority shall be continuing or threatened against the Borrower or
any of the officers or directors of any Subsidiary thereof in connection with
this Agreement and the other Loan Documents which would result in a Material
Adverse Change;
g) the Administrative Agent shall have received, in form and substance
satisfactory to the Administrative Agent:
(i) prior to any Advance with respect to any Mortgaged Property (and,
notwithstanding anything to the contrary, no portion of the Total Costs with
respect to such Mortgaged Property shall be included in the computation of the
Maximum Availability Amount unless the Administrative Agent shall have
received): (1) such supporting documentation for Total Costs and Estimated
Operating Property Value of the Mortgaged Properties as the Administrative Agent
may require, (2) Borrower's certificate to the effect that it has actually
incurred the Total Costs for which it is seeking reimbursement with respect to
the requested Advance, that such costs have not been made the basis for any
other request for an Advance under this Agreement, that no Material Adverse
Change has occurred since the immediately preceding Advance, and that the
requested Advance will be used for (and only for) the Permitted Purpose, (3) a
notice of title continuation or an endorsement to each title policy referred to
in Section 3.3(a)(iii) dated no more than seven (7) days prior to the date of
any such Advance, indicating that since the date of the last preceding Advance
there has been no change in the state of title not theretofore approved by the
Administrative Agent, which endorsement shall have the effect of redating such
title policy to a date no more than seven (7) days prior to the date of any such
Advance, and increasing the coverage thereof by an amount equal to at least the
amount of the Advance then being made, together with Borrower's certificate
dated on the date of any such Advance to the effect that there has been no
change in the state of title since the date of such title continuation or
endorsement or title policy, as the case may be, and the date of such Advance;
or in the case of a New Mortgaged Property, a title policy as referred to in
Section 3.3(a)(iii) dated the date of any such Advance, (4) a Project Cost
Report for such Mortgaged Property, dated as of the date of the Notice of
Borrowing, and (5) evidence that (A) the Borrower's sources and uses of funds
are in balance with respect to Borrower's business in general, which evidence
may be in the form of Exhibit U (B) the Borrower has adequate sources to make
each Project under Development Construction Complete and (C) the Borrower has
adequate sources to satisfy the Borrower's cash requirements;
(ii) prior to any Advance with respect to any Acquisition Cost for any
Mortgaged Property (and, notwithstanding anything to the contrary, no portion of
the Total Costs with respect to such Mortgaged Property shall be included in the
computation of the Maximum Availability Amount unless the Administrative Agent
shall have received): (1) a Budget for such Mortgaged Property, together with a
full copy of the material agreement(s) (together with all amendments thereto)
pursuant to which such Mortgaged Property was acquired, certified by the
Borrower as being true, complete and accurate; (2) Borrower's certification
that, and evidence reasonably satisfactory to the Administrative Agent that, the
zoning district in which the Mortgaged Property is located permits the
development, use and operation of the Mortgaged Property as an extended stay
facility, including ancillary facilities related thereto, and that all zoning,
planning board and similar approvals required to be obtained under any
Requirements of Law or Use Requirements for the development, use and operation
of an extended stay facility, including ancillary facilities related thereto, on
such Mortgaged Property have been obtained and are in full force and effect; (3)
Borrower's certificate to the effect that the building permit and all other
permits, authorizations and approvals required to be obtained under any
Requirements of Law or Use Requirements for the construction and operation of an
extended stay facility, including ancillary facilities related thereto, on such
Mortgaged Property will be promptly and duly applied for, are capable of being
obtained, and that Borrower will pursue the obtainment of such permits,
authorizations and approvals with due diligence, and that the construction and
operation of an extended stay facility, including ancillary facilities related
thereto, on such Mortgaged Property shall at all times comply in all material
respects with all applicable Requirements of Law and Use Requirements, and (4)
Borrower's certification, and evidence reasonably satisfactory to the
Administrative Agent, that Borrower is in compliance with subsection 5.3(v)
hereof; and
(iii) prior to any Advance with respect to any Direct Cost for any
Mortgaged Property (and, notwithstanding anything to the contrary, no portion of
the Direct Costs with respect to such Mortgaged Property shall be included in
the computation of the Maximum Availability Amount unless the Administrative
Agent shall have received): (1) Borrower's certification that the building
permit and all other permits, authorizations and approvals then required to be
obtained under any Requirements of Law or Use Requirements for the construction
and operation of an extended stay facility, including ancillary facilities
related thereto, on such Mortgaged Property (i.e., only to the extent such
permits, authorizations and approvals are required to have been obtained for an
extended stay facility and such ancillary facilities as constructed and/or
operated as of the date of such Advance) have been obtained and are in full
force and effect in all material respects; (2) Borrower's certificate to the
effect that final plans and specifications (the "Plans and Specifications") for
the construction of an extended stay facility, including ancillary facilities
related thereto, on such Mortgaged Property have been duly filed with all
Governmental Authorities having jurisdiction over the construction of such
facility; (3) a Final Budget for such Mortgaged Property; and (4) prior to the
first Advance with respect to any Direct Cost for any particular Mortgaged
Property, Borrower's certificate to the effect that agreements with the general
contractor and all major trade contractors and subcontractors required for the
construction of an extended stay facility, including ancillary facilities
related thereto, on such Mortgaged Property have been duly executed and
delivered by all parties thereto and are in full force and effect.
(iv) prior to the first Advance with respect to the Indirect Cost for any
Mortgaged Property (and, notwithstanding anything to the contrary, no portion of
the Indirect Costs with respect to such Mortgaged Property shall be included in
the computation of the Maximum Availability Amount unless the Administrative
Agent shall have received): (1) with respect to any Mortgaged Property which is
not a Stabilized Project, Borrower's certification that construction shall
commence in accordance with the Plans and Specifications for such Mortgaged
Property not later than ninety (90) days of the first advance for Indirect Costs
for such Mortgaged Property, and (2) all other documents required under clauses
(i), (ii) and (iii) above.
h) The Borrower shall have commenced construction of each extended stay
facility, including the ancillary facilities related thereto, to be constructed
on a Mortgaged Property in accordance with the Plans and Specifications therefor
not later than ninety (90) days from the date that Borrower receives the first
Advance with respect to Indirect Costs for such Mortgaged Property; provided,
however, notwithstanding the foregoing, if either (x) despite the use of
commercially reasonable efforts, such construction cannot be commenced within
such 90-day period as a result of conditions or circumstances outside of the
Borrower's control (it being agreed that conditions or circumstances which can
be cured by the payment of money on commercially reasonable terms shall not be
deemed outside of the Borrower's control), or (y) commencement of construction
within such 90-day period shall or is reasonably likely to result in the Direct
Costs or Indirect Costs with respect to such Mortgaged Property being materially
greater than the amount thereof set forth in the Budget for such Mortgaged
Property, then, in either such event, Borrower shall have an additional thirty
(30) days to commence construction on such Mortgaged Property. In the event
construction is not commenced with one hundred twenty (120) days after the first
advance of Indirect Costs with respect to such Mortgaged Property, then no
additional Advances for such Mortgaged Property shall be made until construction
commences.
i) The Administrative Agent shall have received such other documents or legal
opinions as the Administrative Agent or counsel to the Arranger may reasonably
request, all in form and substance reasonably satisfactory to the Administrative
Agent; and
j) (1) The Administrative Agent shall have received payment of all costs and
expenses (other than the legal fees described in the following clause (2) of
this subparagraph) incurred by the Administrative Agent in connection with
reviewing and evaluating the items furnished and the actions purporting to
satisfy the conditions and requirements to be satisfied pursuant to this Section
3.2, and (2) receipt of a Notice of Borrowing for each Advance shall constitute
Borrower's agreement and covenant to pay to the Administrative Agent, promptly
upon demand (together with a reasonably detailed invoice(s) in respect thereof),
all reasonable legal fees and expenses incurred in connection with preparing
and/or reviewing all documents relating to, and rendering at the request of the
Administrative Agent all advice respecting, such items, actions, conditions and
requirements.
Each request for an Advance by the Borrower, each selection or deemed
selection by the Borrower of an additional Interest Period for any Advance
pursuant to Section 2.7(ii), shall constitute a representation and warranty by
the Borrower, as of the date of the Advance, the selection or deemed selection
of such additional Interest Period, as the case may be, that the conditions
specified in subsections (a)-(j) of this Section 3.2 have been satisfied.
Borrower shall furnish, with respect to each request for an Advance,
all documents referred to in Sections 3.2(g)(i)(3), 3.2(g)(ii)(2), 3.2(i),
3.3(a) (other than those referred to in subsections (viii) and (ix) thereof) and
3.3(b), to the extent applicable to such Advance, to the Administrative Agent
and the Arranger's counsel, Xxxxxxxx Xxxxxxxxx Xxxxxx Xxxxxxxx & Xxxxxx LLP,
0000 Xxxxxx xx xxx Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Xxxxxxx X.
Xxxx, Esq., or at such other address or to such other counsel as Arranger may
from time to time designate by notice to Borrower. Notwithstanding the
foregoing: (i) the failure of any such documents to be furnished to such counsel
shall not constitute a Default or Event of Default (provided, however, nothing
herein shall negate or vitiate any requirement hereunder to cause the
Administrative Agent to receive any such documents), and (ii) copies of all of
the foregoing documents delivered to such counsel shall also be given to the
Administrative Agent as provided herein.
Section 3.3 "Additional Conditions Precedent to an Advance in Respect of
New Mortgaged Property." Notwithstanding anything to the contrary, no portion of
the Total Costs with respect to a New Mortgaged Property shall be included in
the computation of the Maximum Availability Amount unless the following
conditions are satisfied to the Administrative Agent's satisfaction (after
consultation with Arranger's counsel) with respect to each such New Mortgaged
Property:
a) Receipt of Documents. The Administrative Agent shall have received the
following in form and substance satisfactory to the Administrative Agent:
(i) a Mortgage for the New Mortgaged Property duly authorized, executed,
acknowledged and delivered in recordable form and evidence of the recording of
such instrument as may be necessary or, in the opinion of the Administrative
Agent, desirable to perfect and protect the Liens or rights purported to be
created thereby;
(ii) Financing Statements for the New Mortgaged Property (including,
without limitation, all furniture, fixtures and equipment the cost of which is
or has been included in Total Costs for purposes of computing the Maximum
Availability Amount), duly authorized and executed and delivered in form
suitable for recording and filing in all necessary and appropriate, in
Administrative Agent's determination, recorders and filing offices, with
evidence of the recording and filing of each such Financing Statement in such
offices;
(iii) with respect to the New Mortgaged Property (i) a mortgagee's policy
of title insurance issued by a reputable national title insurance company
reasonably acceptable to the Administrative Agent, in form and substance
satisfactory to the Administrative Agent, (x) insuring the Arranger and the
Lenders in an amount acceptable to the Administrative Agent with respect to the
New Mortgaged Property, that each Mortgage constitutes a valid first mortgage
lien on the Borrower's fee interest in the New Mortgaged Property, (y) providing
full coverage against all mechanics' and materialmen's liens, and (z) containing
the endorsements described on Schedule 1 attached hereto and such other
endorsements and affirmative coverage as reasonably required by the
Administrative Agent to the extent available under applicable law and with such
reinsurance (with direct access provisions) as the Administrative Agent may
reasonably request; and the Administrative Agent shall also have received
evidence that the premiums in respect of such title insurance policies have been
paid; (ii) a survey by a licensed surveyor reasonably satisfactory to the
Arranger and the Administrative Agent and such title insurance company,
containing the certification set forth on Schedule 2 attached hereto and
certified to the Arranger, the Lenders, the Borrower, and the title insurance
company, showing no state of facts reasonably unacceptable to the Administrative
Agent; and (iii) a copy of all recorded documents referred to, or listed as
exceptions to title in, the title policies referred to in this Section
3.3(a)(iii), including copies of appurtenant easements affecting or benefitting
the New Mortgaged Property;
(iv) (A) studies, in each case reasonably satisfactory to the
Administrative Agent (and conducted by an experienced and reputable engineering
firm as demonstrated to the Administrative Agent by evidence reasonably
satisfactory to the Administrative Agent) confirming that there are no Hazardous
Materials on or under the New Mortgaged Property, except as set forth in such
Studies and acceptable to the Administrative Agent in its sole discretion; and
(B) an appraisal for the New Mortgaged Property satisfactory to each Lender in
its sole discretion;
(v) UCC lien searches with respect to the Borrower in the county and state
where the New Mortgaged Property is located and in the state of organization of
Borrower, whether filed against the New Mortgaged Property or otherwise;
(vi) copies of each policy of insurance required hereunder and under the
other Loan Documents, and, with respect to policies of insurance covering the
New Mortgaged Property, to the extent such New Mortgaged Property is not insured
under existing policies of insurance required hereunder and under the other Loan
Documents, certificates or binders naming the Arranger and each Lender as an
additional insured thereunder, accompanied by a certification of Borrower
stating that all insurance required hereunder and under the other Loan Documents
has been obtained, such insurance satisfies the requirements hereof and thereof,
and is in full force and effect and that all current due premiums therefor have
been paid in full;
(vii) an opinion of counsel to the Borrower addressed to the Arranger and
the Lenders as to the matters set forth in Exhibit M and N and in form
reasonably acceptable to the Administrative Agent;
(viii) copies of Market Studies acceptable to the Administrative Agent in
its reasonable discretion with respect to the New Mortgaged Property;
(ix) a Proforma Operating Statement acceptable in form and substance to the
Administrative Agent in its sole discretion for each New Mortgaged Property,
dated as of a recent date;
(x) certificates of occupancy for the New Mortgaged Property and such other
evidence satisfactory to the Administrative Agent that the New Mortgaged
Property is Construction Complete;
(xi) evidence that the New Mortgaged Property is a Stabilized Project;
(xii) such consents or acknowledgements from such Persons as the
Administrative Agent or the Arranger's counsel may reasonably determine to be
necessary;
(xiii) such other documents, instruments and material as the Administrative
Agent or the Lenders may deem reasonably necessary or appropriate, as a
condition to the granting of the Borrower's request to add New Mortgaged
Properties to the Collateral, including information addressing environmental,
market and market concentration concerns; and
(xiv) (1) the Administrative Agent shall have received payment of all costs
and expenses (other than the legal fees described in the following clause (2) of
this subparagraph) incurred by the Arranger and the Administrative Agent in
connection with reviewing and evaluating the items furnished and the actions
purporting to satisfy the conditions and requirements to be satisfied pursuant
to this Section 3.3, and (2) receipt of any of the documents or instruments
described in this Section 3.3 shall constitute Borrower's agreement and covenant
to pay to the Administrative Agent, promptly upon demand (together with a
reasonably detailed invoice(s) in respect thereof), all reasonable legal fees
and expenses incurred in connection with preparing and/or reviewing all
documents relating to, and rendering at the request of the Arranger and the
Administrative Agent all advice respecting, such items, actions, conditions and
requirements.
b) Subsidiary-Owned New Mortgaged Properties. With respect to each Mortgaged
Property any portion of or interest in which is owned by any Subsidiary
Mortgagor, the Administrative Agent shall have received the following in form
and substance satisfactory to the Administrative Agent: (x) a guaranty of the
Indebtedness hereunder in the form of Exhibit O attached hereto from such
Subsidiary Mortgagor (the "Subsidiary Mortgagor Guaranty"), (y) all of the
documents and instruments described in Section 3.3(a) hereof, and (z) the
documents and instruments described in Section 3.1(a)(i) with respect to the
authority, execution and delivery of documents and instruments by, and the
performance of the obligations thereunder by, such Subsidiary Mortgagor, and the
documents and instruments described in Section 3.1(a)(viii). For purposes of
this Section 3.3(b) (and for no other purpose), all references to "Borrower" in
Sections 3.1(a)(i), 3.1(a)(ix) and 3.3(a) (and in the definitions and other
provisions referred to in such Sections) shall be deemed to include such
Subsidiary Mortgagor.
(c) Lender Approval. The Administrative Agent shall forward to each of the
Lenders, with respect to each New Mortgaged Property, copies of each document,
instrument and other material described in Sections 3.2(g) and 3.2(i). All of
Lenders shall have given their approval to the New Mortgaged Property, which
approval may be withheld for any reason or no reason at all. No New Mortgaged
Property or portion thereof which is not owned in fee simple by Borrower or a
Subsidiary Mortgagor shall be deemed to be a Mortgaged Property or a portion
thereof for the purposes of computing Maximum Availability Amount, without the
unanimous consent of Lenders, which consent shall not be unreasonably withheld.
ARTICLE IV. REPRESENTATIONS AND WARRANTIES
Borrower represents and warrants the following as of the date hereof
and, except with respect to the representations and warranties expressly
provided herein as being made only as of the Effective Date, further represents
and warrants on the date of each Advance:
Section 4.1 "Corporate Existence." Borrower is duly organized and validly
existing under the laws of the jurisdiction of its incorporation. In addition,
Borrower is in good standing under the laws of the jurisdiction of its
incorporation, is duly qualified to do business as a foreign corporation and is
in good standing in each jurisdiction where it owns property or where the
conduct of its business or the ownership of its property or assets (including,
without limitation, the Mortgaged Properties) requires such qualification
(unless the failure to be so qualified or in good standing would not constitute
a Material Adverse Change), and has all corporate powers and all governmental
licenses, authorizations, consents, and approvals required to carry on its
business as is now or is proposed to be conducted (unless the failure to have
same would not constitute a Material Adverse Change).
Section 4.2 "Authorization of Agreement." The execution, delivery, and
performance by Borrower of this Agreement and of the Loan Documents (i) are
within the Borrower's powers, and (ii) have been duly authorized by all
necessary action.
Section 4.3 "Governmental Approvals." No authorization or approval or other
action by, and no notice to or filing or registration with, any Governmental
Authority is required in connection with the execution, delivery, and
performance by Borrower of this Agreement or the other Loan Documents (unless
the failure to have obtained or made same would not constitute a Material
Adverse Change).
Section 4.4 "Binding Effect." This Agreement and the other Loan Documents
have each been duly executed by Borrower and each constitutes a legal, valid,
and binding obligation of Borrower, enforceable against Borrower in accordance
with its terms, except as enforcement thereof may be subject to (i) the effect
of any applicable bankruptcy, insolvency, reorganization, moratorium, or similar
law affecting creditors, rights generally, and (ii) general principles of equity
(regardless of whether such enforcement is sought in a proceeding in equity or
at law).
Section 4.5 "Financial Information and No Material Adverse Change."
a) Each of the financial statements delivered pursuant to Sections 3.1(a)(vi)
and 3.1(a)(vii) were prepared in accordance with GAAP and fairly present the
financial condition and results of operation of the Persons and/or properties
covered thereby on the dates and for the periods covered thereby, except as
disclosed in the notes thereto and, with respect to normally recurring year-end
adjustments. As of the date hereof Borrower does not have any material
liability, absolute or contingent, not reflected in such financial statements,
the notes thereto or Schedule 3 hereof.
b) Since December 31, 1997, there has been no Material Adverse Change, except as
otherwise disclosed in writing to the Arranger in the press releases dated
February 4, 1999 and March 15, 1999 and the reports on Forms 10-Q and 8-K filed
by the Borrower with the Securities and Exchange Commission.
Section 4.6 "Litigation." There is no action, suit, or proceeding, or any
governmental investigation or any arbitration, in each case pending or, to the
knowledge of the Borrower, threatened against Borrower, or any property of the
Borrower before any court or arbitrator or any governmental or administrative
body, agency, or official (i) which challenges the validity of this Agreement or
any of the other Loan Documents or (ii) which, as reasonably likely to be
determined, and taking into account any insurance with respect thereto, would
constitute a Material Adverse Change.
Section 4.7 "Compliance with Law." The Borrower is in compliance with all
Requirements of Law, the Borrower's Certificate of Incorporation and By-Laws and
all Contractual Obligations binding on or affecting it or any of its properties
(other than where the failure to so comply would not constitute a Material
Adverse Change). The execution and delivery by Borrower of this Agreement, the
Promissory Notes and the Loan Documents do not, and the performance by Borrower
of this Agreement, the Promissory Notes and each of the Loan Documents will not,
(a) violate any Requirement of Law, (b) violate or contravene any provision of
the Borrower's Certificate of Incorporation and By-Laws, or any law, rule,
regulation, order, writ, judgment, decree, determination or award applicable to
the Borrower, (c) violate, contravene or result in a breach of or constitute a
default under any Contractual Obligation, or (d) result in, or require the
creation or imposition of, any Lien upon or with respect to any of its property
or assets (including, without limitation, the Mortgaged Properties) other than
the Liens created by the Loan Documents (other than, in any such case, where
such violation, contravention, default or result would not constitute a Material
Adverse Change).
Section 4.8 "Labor Matters."
a) There are no strikes, work stoppages, slowdowns or lockouts pending, or
reasonably likely to occur in the immediate future, against or involving the
Borrower or any of its Subsidiaries, other than those which in the aggregate
would not constitute or result in a Material Adverse Change.
b) There are no arbitrations or grievances pending against or involving the
Borrower or any of its Subsidiaries, nor, to the best knowledge of Borrower, are
there any arbitrations or grievances threatened involving the Borrower or any of
its Subsidiaries, other than those which in the aggregate would not constitute
or result in a Material Adverse Change.
c) Neither the Borrower nor any of its Subsidiaries are parties to, or have any
obligations under, any collective bargaining agreement, other than collective
bargaining agreement(s) copies of which (certified by the Borrower as being
true, correct and complete) have been furnished to the Administrative Agent.
d) There are no representation proceedings pending, or, to the best knowledge of
the Borrower, threatened with the National Labor Relations Board, and no labor
organization or group of employees of the Borrower or any of its Subsidiaries
have made a pending demand for recognition, other than those which in the
aggregate would not constitute or result in a Material Adverse Change.
e) There are no unfair labor practice charges, grievances or complaints pending
or in process or, to the best knowledge of Borrower, threatened by or on behalf
of any employee or group of employees of the Borrower or any of its Subsidiaries
other than those which in the aggregate would not constitute or result in a
Material Adverse Change.
f) There are no complaints or charges against the Borrower or any of its
Subsidiaries pending or, to the best knowledge of Borrower, threatened to be
filed with any Governmental Authority or arbitrator based on, arising out of, in
connection with, or otherwise relating to the employment by the Borrower or any
of its Subsidiaries of any individual, other than those which in the aggregate
would not constitute or result in a Material Adverse Change.
g) The Borrower and each of its Subsidiaries is in compliance with all laws, and
all orders of any court, governmental agency or arbitrator, relating to the
employment of labor, including all such laws relating to wages, hours,
collective bargaining, discrimination, civil rights, and the payment of
withholding and/or social security and similar taxes, other than such
non-compliances as in the aggregate would not constitute or result in a Material
Adverse Change.
Section 4.9 "ERISA." As of the date of this Agreement and throughout the
term of this Agreement, (i) the Borrower is not and will not be an "employee
benefit plan" as defined in Section 3(3) of ERISA, which is subject to Title I
of ERISA, (ii) the assets of the Borrower do not and will not constitute "plan
assets" of one or more such plans within the meaning of 29 C.F.R. ss. 2510.3-101
and (iii) the Borrower is not and will not be a "government plan" within the
meaning of Section 3(32) of ERISA.
Section 4.10 "No Default." The Borrower is not in default under, or with
respect to, any of its Contractual Obligations in any respect which could
reasonably be expected to result in a Material Adverse Change and no Default or
Event of Default has occurred and is continuing.
Section 4.11 "Improvements." Subject to the provisions of Section 5.5
hereof:
a) Except for portions of any Mortgaged Property under construction or which are
to be demolished in the course of construction, all of the improvements located
on the Mortgaged Properties and the use of such improvements are covered by
existing valid certificates of occupancy and all other certificates and permits
required by applicable laws, rules, regulations, and ordinances or in connection
with the use, occupancy, and operation thereof.
b) No material portion of any of the Mortgaged Properties, nor any improvements
located on such Mortgaged Properties that are material to the operation, use, or
value thereof, have been damaged in any respect as a result of any fire,
explosion, accident, flood, or other casualty, except to the extent that the
same have been or will with due diligence and in compliance with this Agreement
and all of the other Loan Documents be restored to their condition prior
thereto.
c) No written notices of violation of any federal, state, or local law
or ordinance or order or requirement have been received with respect to any
Mortgaged Properties.
Section 4.12 "Intellectual Property." Borrower owns, or is licensed to use,
all trademarks, trade names, copyrights, technology, know-how, and processes
necessary for the conduct of its business as currently conducted (the
"Intellectual Property") except for those the failure to own or license which
could not reasonably be expected to have a Material Adverse Change. No claim has
been asserted and is pending by any Person challenging or questioning the use of
any such Intellectual Property or the validity or effectiveness of any such
Intellectual Property, nor does the Borrower know of any valid basis for any
such claim (other than claims which would not constitute a Material Adverse
Change). The use of such Intellectual Property by the Borrower does not infringe
on the rights of any Person, except for such claims and infringements that, in
the aggregate, could not reasonably be expected to have a Material Adverse
Change.
Section 4.13 "Taxes." Borrower has filed or caused to be filed all tax
returns that, to the knowledge of Borrower, are required to be filed and has
paid all taxes shown to be due and payable on such returns or on any assessments
made against it or any of its property and all other taxes, fees, or other
charges now due and payable imposed on it or any of its property by any
Governmental Authority (other than any the amount or validity of which are
currently being contested in good faith by appropriate proceedings and with
respect to which adequate reserves in conformity with GAAP have been provided on
the books of Borrower). No tax Lien has been filed which could constitute a Lien
senior in priority to the Lien of any of the Mortgages or Financing Statements
and which has not been (or will not be) removed or discharged of record within
ten (10) days after Borrower's notice of such Lien (or the taxes to which such
Lien relates are being contested in good faith by appropriate proceedings which
have the effect of staying enforcement or execution of such Lien and with
respect to which adequate reserves in conformity with GAAP have been provided on
the books of Borrower).
Section 4.14 "Investment Company Act; Other Regulations." Borrower is not
an "investment company," or a company "controlled" by an "investment company,"
within the meaning of the Investment Company Act of 1940, as amended. Borrower
is not subject to regulation under any Federal or state statute or regulation
which limits its ability to incur Indebtedness.
Section 4.15 "Security Capital." Security Capital Group Incorporated
directly or, through a wholly-owned Subsidiary, indirectly owns no less than (a)
fifty one percent (51%) of the voting stock in Borrower before dilution due to
the conversion of the mortgages in favor of Archstone Communities Trust shown on
Schedule 3 and (b) forty six percent (46%) after such dilution.
Section 4.16 "Insurance." Subject to the provisions of Section 5.5 hereof,
the Borrower keeps the Mortgaged Properties insured in the manner and in the
amounts set forth in subsection 5.1(k) hereof.
Section 4.17 "Properties." Subject to the provisions of Section 5.5 hereof:
a) Borrower and each Subsidiary Mortgagor, as the case may be, has good and
marketable title to all of the Mortgaged Properties, subject to no mortgage,
security interest, pledge, lien, charge, encumbrance or title retention or other
security agreement or arrangement of any nature whatsoever, except Permitted
Encumbrances. Borrower shall, and shall cause each Subsidiary Mortgagor to,
forever warrant and defend the title of their respective Mortgaged Properties
against the lawful claims and demands of all persons whomsoever subject to the
Permitted Encumbrances.
b) There are no pending or, to the best knowledge of Borrower, threatened
proceedings or actions to revoke, attack, invalidate, rescind, or modify in any
material respect (i) the zoning of any Mortgaged Property or any part thereof,
or (ii) any building or other permits heretofore issued with respect to any
Mortgaged Property or any part thereof, or asserting that any such zoning or
permits do not permit the operation of any Mortgaged Property or any part
thereof or that any improvements located on such Mortgaged Property cannot be
operated in accordance with its intended use or is in violation of applicable
Use Requirements.
c) The Mortgage covering each such Mortgaged Property creates a valid and
enforceable first Lien, on such property described therein, as security for the
repayment of the Indebtedness incurred by the Borrower hereunder and under the
other Loan Documents, subject only to the Permitted Encumbrances applicable to
such property.
d) The Collateral is now, and so long as the Commitment remains in effect or any
monetary obligation to the Administrative Agent or the Lenders hereunder or
under the Promissory Notes or the other Loan Documents shall remain unpaid, will
be owned solely by the Borrower or a Subsidiary Mortgagor, as the case may be,
and said Collateral, including the proceeds resulting from the sale or other
disposition (other than as permitted by Section 5.3(k)) thereof, is and will
remain free and clear of any Liens except the Liens granted pursuant to the Loan
Documents to the Arranger, which Liens shall, at all times, be first and prior
on the Collateral and all proceeds resulting from the sale or other disposition
thereof, and no further action need be taken to perfect said Liens.
e) Except for portions of any Mortgaged Property which are to be demolished in
the course of construction of an extended stay facility, neither the existence
of any improvements upon a Mortgaged Property nor the intended use or condition
of any Mortgaged Property violates in any material respect any Use Requirements.
With respect to each Mortgaged Property, neither the zoning nor any other right
to carry on the use of such Mortgaged Property as an extended stay facility,
including ancillary facilities related thereto, is to any extent dependent upon
or related to any other real estate. Each Mortgaged Property may be operated as
an extended stay facility with ancillary facilities related thereto and the
Borrower has received no written notices from any Governmental Authorities
alleging any violation by any Mortgaged Property of any Requirement of Law,
including but not limited to applicable Use Requirements.
f) Except as set forth in Schedule 4 hereto, there are no pending or, to the
knowledge of the Borrower, threatened proceedings relating to any (i) taking by
eminent domain or other condemnation of any portion of any Mortgaged Property,
(ii) condemnation or relocation of any roadways abutting any Mortgaged Property
and (iii) denial of access to any Mortgaged Property from any point of access to
such Mortgaged Property, in any such case not accounted for in the Plans and
Specifications.
g) Each Mortgaged Property has adequate and permanent legal access to water,
gas, and electrical supply, storm, and sanitary sewerage facilities, other
required public utilities (with respect to each of the aforementioned items by
means of either a direct connection to the source of such utilities or through
easements or connections available on publicly dedicated roadways directly
abutting such Mortgaged Property), parking, and means of access between such
Mortgaged Property and public highways over recognized curb cuts, and all of the
foregoing comply with all applicable Use Requirements.
h) Each Mortgaged Property constitutes a legally subdivided lot under all
applicable Use Requirements (or, if not subdivided, no subdivision or platting
of such Mortgaged Property is required under applicable Requirements of Law),
and for all material purposes each Mortgaged Property may be mortgaged,
conveyed, and otherwise dealt with as an independent parcel.
Section 4.18 "Full and Accurate Disclosure." No statement of fact made by
or on behalf of the Borrower in this Agreement or in any of the other Loan
Documents (other than any Loan Documents to which neither the Borrower nor any
Affiliate is a party), or any certificate or financial statement furnished by
the Borrower to the Administrative Agent, the Arranger or any Lender when made
or deemed made or the date as of which such certificate or statement speaks or
is deemed to speak, as the case may be, contains any untrue statement of a
material fact or, to the best of Borrower's knowledge, omits to state any
material fact necessary to make statements contained herein or therein not
misleading.
Section 4.19 "Solvency." Within the meaning of Section 548 of the
Bankruptcy Code, the Uniform Fraudulent Transfer Act and the Uniform Fraudulent
Conveyance Act as in effect in any relevant jurisdiction, and any similar laws
or statutes, and after giving effect to the transactions contemplated hereby:
the fair saleable value of the Borrower's assets exceeds and will, immediately
following the making of the Advances, exceed the Borrower's total liabilities
including, without limitation, subordinated, unliquidated, disputed, and
contingent liabilities; the fair saleable value of the Borrower's assets is and
will, immediately following the making of each Advance, be greater than the
Borrower's probable liabilities, including the maximum amount of its contingent
liabilities on its debts as such debts become absolute and matured; the
Borrower's assets do not and, immediately following the making of the Advances
will not, constitute unreasonably small capital to carry out its business as
conducted or as proposed to be conducted; and the Borrower does not intend to,
and does not believe that it will, incur debts and liabilities (including
without limitation contingent liabilities and other commitments) beyond its
ability to pay such debts as they mature (taking into account the timing and
amounts of cash to be received by the Borrower and the amounts to be payable on
or in respect of obligations of the Borrower).
Section 4.20 "Not Foreign Person." The Borrower is not a "foreign person"
within the meaning of Section 1445(f)(3) of the Code.
Section 4.21 "Assessments." Subject to the provisions of Section 5.5
hereof, except as set forth in the Budget with respect to the applicable
Mortgaged Property, there are no pending or, to the Borrower's knowledge,
proposed special or other assessments for public improvements or otherwise
affecting any Mortgaged Property, nor, to the Borrower's knowledge, are there
any contemplated improvements to any Mortgaged Property that may result in such
special or other assessments.
Section 4.22 "Flood Zone." Except as disclosed by a survey delivered
pursuant to Section 3.3(a)(iii), no Mortgaged Property is located in a flood
hazard area as defined by the Federal Emergency Management Agency.
Section 4.23 "Physical Condition." Subject to the provisions of Section 5.5
hereof, except for portions of any Mortgaged Property which are to be demolished
in the course of construction of an extended stay facility and related ancillary
facilities thereon, each Mortgaged Property is free of material structural
defects and all building systems contained therein are in good working order
subject to ordinary wear and tear.
Section 4.24 "Operation of Premises." Subject to the provisions of Section
5.5 hereof, except for portions of any Mortgaged Property which are to be
demolished in the course of construction of an extended stay facility and
related ancillary facilities thereon, each Mortgaged Property is being operated
and maintained in accordance with the Borrower's usual and customary business
practices.
Section 4.25 "Margin Regulations." The Borrower is not engaged in the
business of extending credit for the purpose of purchasing or carrying any
margin stock or margin securities (within the meaning of Regulations T, U and X
issued by the Board of Governors of the Federal Reserve System), and no proceeds
of any Advance will be used, directly or indirectly, to purchase or carry any
margin stock or margin securities or to extend credit to others for the purpose
of purchasing or carrying any margin stock or margin securities. None of the
transactions contemplated by this Agreement will violate or result in a
violation of Section 7 of the Securities Exchange Act of 1934, as amended.
Section 4.26 "Hazardous Materials." Subject to the provisions of Section
5.5 hereof, except as disclosed in the Studies, to the best of the Borrower's
knowledge, no Hazardous Materials are located on or about the Mortgaged
Properties, and the Mortgaged Properties do not contain any underground tanks
for the storage or disposal of Hazardous Materials. Further, subject to the
provisions of Section 5.5 hereof, except as disclosed in the Studies, (i) the
Borrower has not, and to the knowledge of the Borrower no other party has, (A)
stored or treated Hazardous Materials on the Mortgaged Properties, (B) disposed
of Hazardous Materials or incorporated Hazardous Materials on the Mortgaged
Properties, and (C) permitted any underground storage tanks to exist on the
Mortgaged Properties, (ii) no complaint, order, citation or notice with regard
to air emissions, water discharges, noise emissions, or Hazardous Materials, if
any, or any other environmental, health, or safety matters affecting the
Mortgaged Properties or any portion thereof, from any person, government or
entity, has been issued to the Borrower which has not been remedied or cured,
and (iii) the Borrower has complied with all Requirements of Law affecting the
Mortgaged Properties.
Section 4.27 "Representations and Warranties in the Loan Documents."
Subject to the provisions of Section 5.5 hereof, the representations and
warranties in each of the Loan Documents (except with respect to the
representations and warranties expressly provided as being made only as of the
Effective Date) are true, complete and correct in all material respects, and the
Borrower hereby confirms each such representation and warranty as being true,
complete and correct in all material respects as of the relevant dates with the
same effect as if set forth in its entirety herein.
Section 4.28 "Loan Documents." The provisions of the Loan Documents are
each effective to create, in favor of the Arranger, a legal, valid and
enforceable Lien on or security interest in all of the collateral described
therein, and when the appropriate recordings and filings have been effected in
the appropriate public offices (or, in the case of collateral represented by
certificates, when such certificates have been pledged to and received by the
Arranger or the Administrative Agent), the Loan Documents will constitute a
perfected first Lien on and security interest in all right, title, estate and
interest of the Borrower or a Subsidiary Mortgagor, as the case may be, in the
collateral described therein, prior and superior to all other Liens except for
Permitted Encumbrances and as otherwise permitted under this Agreement.
Section 4.29 "Balloon Payments." Except as reflected on Schedule 3 hereof,
as of the Effective Date, there are no balloon payments, scheduled balloon
amortizing payments or scheduled amortizing payments required to be paid at any
time in respect of any Indebtedness (other than Permissible Assumed
Indebtedness) of the Borrower or its Subsidiaries.
Section 4.30 "Subsidiaries."
(a) Each Subsidiary Mortgagor is a Subsidiary of Borrower.
(b) Each Subsidiary of Borrower has guaranteed the Indebtedness hereunder
pursuant to a guaranty in the form of Exhibit P attached hereto, except for (i)
any Non-Guarantor Subsidiary which has no other Indebtedness other than
non-recourse debt to third parties and inter-company Indebtedness to the
Borrower and (ii) the bankruptcy remote Subsidiary which was formed for the
purpose of entering into the Sale Leaseback Facility. A "Non-Guarantor
Subsidiary" shall mean a Subsidiary of Borrower that all of the Lenders agree
(i) is prohibited from providing a guaranty or (ii) would not be an appropriate
Person, for reasons acceptable to Lenders, to provide a guaranty of the
Indebtedness hereunder.
Section 4.31 "Nature of Business." Neither the Borrower nor any Subsidiary
of Borrower is engaged in any business other than the ownership, construction,
development, operation and management of extended stay hotel facilities (other
than businesses and investments incidental to the development, operation and
management of extended stay hotel facilities), the management for a fee of other
lodging facilities or the licensing of the operation of extended stay facilities
under the "Homestead" name, which licensing business does not have start-up
costs in excess of one million dollars ($1,000,000).
ARTICLE V. COVENANTS
Section 5.1 "Certain Affirmative Covenants." So long as the Commitment
remains in effect or any amounts due to the Lenders hereunder or under the
Promissory Notes or the other Loan Documents shall remain unpaid, the Borrower
will, and, to the extent any of the following relates to a Mortgaged Property
any portion of or interest in which is owned by any Subsidiary Mortgagor, the
Borrower will cause each such Subsidiary Mortgagor, with respect to such
Mortgaged Property, to (unless expressly waived by the Arranger or the Lenders
as provided herein):
a) Payment. Duly and punctually pay or reimburse when due or, if there is no
specified due date, when demanded, the principal and interest on the Promissory
Notes and all other amounts due under this Agreement and the other Loan
Documents.
b) Existence, Etc. (i) Preserve and maintain its existence in Maryland, and (ii)
preserve and maintain its rights and franchises in each state in which there
exists a Mortgaged Property (unless the failure to so preserve and maintain its
rights and franchises would not constitute a Material Adverse Change).
c) Compliance With Laws, Etc. Subject to the provisions of Section 5.5 hereof,
comply with all applicable Requirements of Law, Use Requirements and all
agreements and grants of easements or rights-of-way, permits, declarations of
covenants, conditions and restrictions, disposition and development agreements,
planned unit development agreements, management or parking agreements, party
wall agreements or other instruments affecting the Mortgaged Properties.
d) Payment of Taxes and Claims, Etc. Pay (i) all taxes, assessments and
governmental charges imposed upon it or upon its property (other than the
Mortgaged Property), unless the failure to so pay would not constitute or result
in a Material Adverse Change, (ii) subject to the provisions of Section 5.5
hereof and subparagraph (iii) of this Section, all taxes, assessments and
governmental charges imposed upon the Mortgaged Properties, and all claims
(including, without limitation, claims for labor, materials, supplies, or
services) which might, if unpaid, become a Lien upon the Mortgaged Properties or
any of them unless, in each case, the validity or amount thereof is being
contested in good faith by appropriate proceedings and the Borrower has
maintained adequate reserves with respect thereto, and (iii) all taxes,
assessments and governmental charges imposed upon the Mortgaged Properties which
would, if unpaid, become a Lien senior in priority to the Lien of any of the
Mortgages within ten (10) days after Borrower's notice of such Lien (unless the
taxes, assessments or governmental charges to which such Lien relates are being
contested in good faith by appropriate proceedings which have the effect of
staying enforcement or execution of such Lien and with respect to which adequate
reserves in conformity with GAAP have been provided on the books of Borrower).
e) Keeping of Books. Keep accurate records and books of account in which full,
accurate and correct entries shall be made of all dealings or transactions in
relation to its business and affairs in accordance with GAAP. Upon reasonable
prior notice and during normal business hours, the Borrower shall permit
representatives of any Lender to visit its offices and inspect, examine and make
abstracts from any of its books and records, and to discuss the business,
operations, and financial and other condition of the Borrower with officers and
employees of the Borrower and with its independent certified public accountants,
if any, in the presence of a representative of the Borrower.
f) Visitation, Inspection, Etc. Permit any representative of the Arranger or the
Lenders to visit and inspect any of the Mortgaged Properties, to examine its
books and records and to make copies and take extracts therefrom, and to discuss
its affairs, finances, and accounts with its officers, accountants, and agents,
all upon reasonable notice from the Arranger during normal business hours.
g) Maintenance of Property. Keep all Mortgaged Properties in good working order
and condition and operate Mortgaged Properties in a manner consistent with the
operation thereof as an extended stay facility, including ancillary facilities
related thereto, and otherwise consistent with prudent business practices.
h) Management of Properties. Subject to the provisions of Section 5.5 hereof,
Borrower or a Subsidiary of Borrower shall directly operate and manage the
business of the Borrower at each of the Mortgaged Properties; provided, however,
that with the prior written consent of all of the Lenders, which consent shall
not be unreasonably withheld, the Borrower may hire another Person to operate
and manage any Mortgaged Property.
i) Hazardous Materials Removal. Subject to the provisions of Section 5.5 hereof,
xxxxx and/or remove any Hazardous Materials present in, on or under any of the
Mortgaged Properties in violation of any applicable Requirement of Law.
j) Covenants in the Loan Documents. Subject to the provisions of Section 5.5
hereof, perform all covenants (affirmative and negative) contained in each of
the Loan Documents with the same effect as if set forth in their entirety
herein.
k) Insurance. Subject to the provisions of Section 5.5 hereof, maintain upon or
in connection with each of the Mortgaged Properties:
(i) Property and casualty insurance coverage evidenced by original or certified
copies of insurance policies or binders for such insurance, together with
evidence that the premiums for such policies have been paid current. Such
insurance policies shall insure each of the Mortgaged Properties for one hundred
percent (100%) of their full replacement cost (exclusive of footings and
foundations) in so-called "all risk" form and with coverage for floods,
earthquakes (except as provided in subsection (ii) below) and such other hazards
(including "collapse" and "explosion") as the Lenders may require for each of
the Mortgaged Properties and as are consistent with reasonable and customary
requirements in the industry. Such insurance policies shall contain replacement
cost and agreed amount endorsements (with no reduction for depreciation), an
endorsement providing Building Ordinance Coverage and an endorsement covering
the costs of demolition and increased costs of construction due to the
enforcement of building codes or ordinances. To the extent there exists a boiler
on the premises of any of the Mortgaged Properties, Borrower shall also furnish
insurance providing boiler and machinery comprehensive coverage for all
mechanical and electrical equipment at each of such Mortgaged Properties
insuring against breakdown or explosion of such equipment on a replacement cost
value basis. Borrower shall also furnish business interruption or loss of rental
income insurance in connection with all policies covering property and boiler
and machinery insurance for a period of not less than one (1) year endorsed,
other than with respect to boiler and machinery insurance, to provide a 180 day
extended period of indemnity. All insurance required under this subsection
5.1(k) shall be with companies and in amounts and with coverage and deductibles
satisfactory to the Lenders. All insurance required under this subsection
5.1(k)(i) with respect to the Mortgaged Properties shall include endorsements
naming the Arranger as loss payee, and shall have endorsed thereon the standard
mortgagee clause in favor of the Arranger. All companies issuing policies
required under subsection 5.1(k) shall have a current Best Insurance Reports
rating no less favorable than "A-", and all such companies shall be licensed to
do business in the states where the applicable Mortgaged Property is located.
All policies required under subsection 5.1(k) shall provide that (A) the
insurance evidenced thereby shall not be canceled or modified without, in the
case of non-payment of premiums, at least ten (10) days' prior written notice
from the insurance carrier to the Arranger and the Administrative Agent, or, in
any other circumstance, at least thirty (30) days' prior written notice from the
insurance carrier to the Arranger and the Administrative Agent; and (B) no act
or thing done by the Borrower, or any Affiliate of any of Borrower shall
invalidate the policy as against the Lenders. The Borrower shall deliver renewal
certificates of all policies of insurance required under subsection 5.1(k) and
requested by the Administrative Agent, together with written evidence that the
premiums are paid current, at least ten (10) days prior to the expiration of the
then current policy.
(ii) earthquake insurance provided for in subsection 5.1(k)(i) only for the
Mortgaged Properties and only to the extent (A) any Mortgaged Property is
located in an earthquake prone area and (B) such insurance is available at
commercially reasonable rates.
(iii) Liability and worker's compensation insurance evidenced by original
or certified copies of insurance policies, binders for such insurance policies,
or certificates of insurance, together with evidence that the premiums for such
policies have been paid current. Such insurance shall provide for (A) commercial
general liability (including contractual liability) covering each of the
Mortgaged Properties and the Borrower's and its Subsidiaries' operations thereon
in an amount not less than $1,000,000 per occurrence and not less than
$1,000,000 per occurrence in the aggregate; (B) commercial automobile liability
with a limit not less than $1,000,000 combined single limit and be endorsed to
cover owned, hired and non-owned automobiles; and (C) worker's compensation
insurance covering all of the Borrower's and its Subsidiaries' employees and
contracted parties (including their employees) situated at the Mortgaged
Properties in accordance with the statutory requirements of the states where the
applicable Mortgaged Property is located and including an endorsement for
employer's liability coverage. The Borrower shall also furnish umbrella
liability coverage in excess of the foregoing liability coverage with a limit of
not less than $9,000,000. The commercial general liability and automobile
policies and umbrella liability policy shall name the Lenders as additional
insureds. Such policies shall also contain a so-called "products-completed
operations endorsement."
(iv) Insurance insuring against loss or damage by perils customarily
included under standard "builder's risk completed value non-reporting form" and
which include all insurance required to be carried by Borrower, as "owner,"
under the provisions of all construction contracts let by Borrower; provided
that such insurance shall insure all construction on all of the Mortgaged
Properties, including, without limitation, the construction of an extended stay
facility and ancillary facilities related thereto on each Mortgaged Property,
including all materials in storage and while in transit during construction.
(v) flood insurance with respect to any Mortgaged Property which is at any
time identified by the Secretary of Housing and Urban Development as having
special flood hazards.
(vi) On and after April 30, 1999, the insurance coverage set forth in
Schedule 8, to the extent such coverage is inconsistent with the requirements
set forth above.
l) Further Assurances. The Borrower agrees upon demand of the Arranger or the
Administrative Agent (i) to do any act or execute any additional documents
(including, but not limited to, security agreements on any personalty included
or to be included in the Collateral) as may be reasonably required by the
Arranger or the Administrative Agent to confirm the Lien of the Loan Documents
or to exercise or enforce its rights under this Agreement, the Promissory Notes
or the Loan Documents and to realize thereon, and (ii) to execute and deliver to
the Administrative Agent and/or the Lenders such additional documents and to
provide such additional information as the Administrative Agent and/or the
Lenders may reasonably require to carry out or confirm the terms of this
Agreement or the other Loan Documents. This covenant shall survive the
termination of this Agreement until payment in full of all amounts due hereunder
or under the Promissory Notes and the Loan Documents, provided that the covenant
shall be reinstated if any payment of all amounts due hereunder or under the
Promissory Notes and the Loan Documents is required to be returned to the payor
or any other party under any applicable bankruptcy law.
m) Final Budget; Major Trade Agreements. If the Borrower commences development
on a Mortgaged Property after the Effective Date, the Final Budget for each such
Mortgaged Property shall be received by the Arranger and the Administrative
Agent no later than one hundred twenty (120) days after the first Advance
relating to such Mortgaged Property is made, and, with respect to all Mortgaged
Properties which were mortgaged to the Arranger prior to the date hereof and
which are not Stabilized Projects, all agreements with the general contractor
and all major trade contractors and subcontractors required for the construction
of an extended stay facility on such Mortgaged Property shall be duly executed
and delivered by all parties thereto no later than one hundred twenty (120) days
after the first Advance relating to such Mortgaged Property shall have been made
and such agreements shall remain (or substitutes therefor shall be) in full
force and effect until such Mortgaged Property is Construction Complete.
n) Application of Proceeds From Equity Offerings. Except as provided in the
March 15, 1999 letter between the Borrower, Arranger and Administrative Agent
attached hereto as Exhibit Q, Borrower shall pay (i) to the Arranger for the
benefit of the Lenders, upon receipt, all net proceeds from its equity offerings
to repay on a pari passu basis the Loan and the Indebtedness under the amended
and restated credit agreement dated as of this date, as amended, between
Borrower, the Arranger and one or more lenders with regard to a revolving credit
facility of up to an aggregate principal amount of $30,000,000 secured by
mortgage liens on metropolitan downtown properties; and (ii) to the
Administrative Agent all other amounts and fees due to the Administrative Agent
and the Lenders under this Agreement and the other Loan Documents.
o) Year 2000 Compliance.
(i) Borrower has reviewed its business and operations and has developed a
plan (the "Y2K Plan") to address on a timely basis the risk that computer
applications used by it in performing date sensitive functions and involving
dates prior to December 31, 1999 and thereafter (such risk being herein referred
to as the "Y2K Problem") would reasonably be expected to have a Material Adverse
Effect.
(ii) Pursuant to the Y2K Plan, Borrower is taking and will take reasonable
efforts to address the Y2K Problem on a timely basis.
Section 5.2 "Reporting Covenants." Reporting Covenants. So long as the
Commitment remains in effect or any monetary obligation to the Lenders hereunder
or under the Promissory Notes or the other Loan Documents shall remain unpaid,
the Borrower will furnish to the Arranger and the Administrative Agent at the
Borrower's sole cost and expense (unless expressly waived by the Arranger and
the Administrative Agent or the Lenders as provided herein).
a) Annual Financial Statements With Respect to the Borrower. As soon as
available and in any event within ninety (90) days after the end of each fiscal
year (unless the filing requirements have been extended by the Securities and
Exchange Commission ("SEC"), in which case the 90-day period shall be extended
until the earlier of the date of filing with the SEC or such extended date
granted by the SEC), a consolidated balance sheet of the Borrower and its
Subsidiaries as at the end of such year and the related consolidated statements
of income, retained earnings, and cash flow of the Borrower and its Subsidiaries
for such fiscal year, setting forth in each case in comparative form the figures
for the previous fiscal year, all in reasonable detail and accompanied by a
report thereon of Xxxxxx Xxxxxxxx or other independent public accountants of
comparable recognized national standing acceptable to the Arranger, which such
report shall be unqualified as to scope of audit and shall state that such
consolidated financial statements present fairly the consolidated financial
condition as at the end of such fiscal year, and the consolidated results of
operations and changes in cash flow for such fiscal year, of the Borrower and
its Subsidiaries in accordance with GAAP, and a statement of sources and uses of
funds in the form of Exhibit U, indicating to Arranger's satisfaction, that (A)
the Borrower's sources and uses of funds are in balance with respect to
Borrower's business in general, (B) the Borrower has adequate sources to make
each Project under Development Construction Complete and (C) the Borrower has
adequate sources to satisfy the Borrower's cash requirements.
b) Quarterly Financial Statements With Respect to the Borrower. As soon as
available and in any event within sixty (60) days after the end of each fiscal
quarter other than the last fiscal quarter of a fiscal year (unless the filing
requirements have been extended by the SEC in which case the 60-day period shall
be extended until the earlier of the date of filing with the SEC or such
extended date granted by the SEC), a consolidated balance sheet of the Borrower
and its Subsidiaries as at the end of such quarter and the related consolidated
statements of income and cash flow of the Borrower and its Subsidiaries for such
fiscal quarter and/or for the portion of the Borrower's fiscal year ended at the
end of such quarter, setting forth in each case in comparative form the figures
for the corresponding quarter and the corresponding portion of the Borrower's
previous fiscal year, all in reasonable detail and certified by the Controller
or chief financial officer of the Borrower that they are complete and correct
and that they fairly present the consolidated financial condition as at the end
of such fiscal quarter, the consolidated results of operations and changes in
cash flow for such fiscal quarter and/or such portion of the Borrower's fiscal
year, of the Borrower and its Subsidiaries in accordance with GAAP (subject to
normal, year-end audit adjustments), and a statement of sources and uses of
funds in the form of Exhibit U, indicating to Arranger's satisfaction, that
evidence that (A) the Borrower's sources and uses of funds are in balance with
respect to Borrower's business in general, (B) the Borrower has adequate sources
to make each Project under Development Construction Complete and (C) the
Borrower has adequate sources to satisfy the Borrower's cash requirements.
c) Annual Financial Statements With Respect to Operating Mortgaged Properties.
As soon as available and in any event within 90 days after the end of each
fiscal year of the Borrower or at such time as the financial statements
described in Section 5.2(a) above are furnished to the Administrative Agent, a
statement with respect to each of the operating Mortgaged Properties for such
fiscal year, each of which statements shall (i) be in the form of Exhibit R
attached hereto, and contain in comparative form the information required to
complete such Exhibit in the manner and detail contemplated by such Exhibit,
(ii) set forth the Net Operating Income of each such Mortgaged Property in
comparative form, and (iii) be certified by the Controller or chief financial
officer of the Borrower that they are complete and correct and that they fairly
present the information required to complete such Exhibit for each such property
as at the end of such fiscal year, in accordance with GAAP and (iv) state that
such statement presents fairly the information required to complete such Exhibit
for each such property as at the end of such fiscal year, in accordance with
GAAP.
d) Monthly Financial Statements With Respect to the Operating Mortgaged
Properties. As soon as available and in any event within thirty (30) days after
the end of each Accounting Period, a statement with respect to each of the
operating Mortgaged Properties as at the end of such Accounting Period, each of
which statements shall (i) be in the form of Exhibit R attached hereto, and
contain in comparative form the information required to complete such Exhibit in
the manner and detail contemplated by such Exhibit, (ii) set forth the Net
Operating Income of each such Mortgaged Property in comparative form, (iii) be
certified by the Controller or chief financial officer of the Borrower that they
are complete and correct and that they fairly present the information required
to complete such Exhibit for each such property as at the end of such Accounting
Period, in accordance with GAAP (subject to normal, year-end audit adjustments).
e) Semi-annual Proformas. Detailed twelve month forward proforma balance sheet,
operating statement, and cash flow projection together with proforma financial
covenant calculations acceptable to the Arranger and the Administrative Agent.
These should be provided, as soon as available, but in any event by December
31st for the calendar year projections and by June 30 with respect to the
mid-year projections covering the period from July 1st to June 30th.
f) No Default/Compliance Certificate. Together with the financial statements
required pursuant to subsections (a), (b), (c) and (d) above, a certificate of
the President, the Controller or the chief financial officer of the Borrower to
the effect that, based upon a review of the Borrower's activities and such
financial statements during the period covered thereby, there exists no Event of
Default and no Default under this Agreement, or if there exists an Event of
Default or a Default hereunder, specifying the nature thereof and the Borrower's
actions taken or proposed to be taken in response thereto. The President or the
chief financial officer or the Controller of the Borrower shall complete the
form of certificate attached as Exhibit L to this Agreement and shall certify
thereon that the Borrower is in compliance with all financial covenants under
this Agreement.
g) Notice of Default or Events of Default. Promptly after acquiring knowledge of
the occurrence of a Default or an Event of Default (or the occurrence of any
event or existence of any condition which but for the application of Section 5.5
would constitute a Default or Event of Default), a certificate of the president
or chief financial officer or the Controller of the Borrower specifying the
nature thereof and the Borrower's proposed response thereto.
h) Litigation. Promptly after (i) the occurrence thereof, the Borrower shall
deliver notice of the institution of or any development in any action, suit, or
proceeding or any governmental investigation or any arbitration, before any
court or arbitrator or any governmental or administrative body, agency, or
official, against the Borrower or any Mortgaged Property in writing, (ii) the
Borrower receives actual knowledge thereof, the Borrower shall deliver notice of
the threat of any such action, suit, proceeding, investigation, or arbitration,
or (iii) receipt thereof, the Borrower shall deliver notice of any claims
relating to the Lenders' interests or any proposal by a Governmental Authority
to acquire any part of the Mortgaged Properties (other than any such proceeding
or development which, as reasonably likely to be determined, would not
constitute or result in a Material Adverse Change).
i) Adverse Change. Immediately after the Borrower knows of the occurrence of any
Material Adverse Change, a certificate of any Co-Chairman, the President, any
Senior Vice President, any Vice President or the Controller or chief financial
officer of the Borrower specifying the nature of such change.
j) Shareholder Communications, Filings, Etc. Promptly upon the mailing or filing
thereof, the Borrower shall deliver copies of all financial statements, reports,
and proxy statements mailed to the Borrower's shareholders generally, and copies
of all final registration statements and other final documents filed with the
Securities and Exchange Commission (or any successor thereto) or any national
securities exchange.
k) Other Information. With reasonable promptness, such information about the
Borrower, Realty and the Mortgaged Properties as the Arranger, the
Administrative Agent or the Lenders may reasonably request from time to time.
Section 5.3 "Certain Negative Covenants." Neither Borrower nor, with
respect to subsections (a), (i), (k) to (r), (u) and (v), any Subsidiary of
Borrower will:
a) Indebtedness. Create, incur, assume, or suffer to exist, any Indebtedness
other than:
(i) the Indebtedness hereunder and under the other Loan Documents; and
(ii) Indebtedness outstanding on the date hereof which is reflected in the
Borrower's financial statements referred to in Section 4.5(a) and in Schedule 3;
(iii) unsecured liabilities (not the result of borrowing) incurred in the
ordinary course of business for current purposes and not represented by any note
or other evidence of Indebtedness and which are not past due more than 90 days;
(iv) non-recourse Indebtedness to third parties ("Permissible Assumed
Indebtedness");
(iv) liability to a surety under performance bonds or similar instruments
incurred in connection with the Borrower's construction of extended stay
facilities on the Borrower's property;
(vi) Indebtedness due and payable solely to a Subsidiary of Borrower or by
a Subsidiary to Borrower; and (7) subject to Lenders' prior written consent,
which consent shall not be unreasonable withheld, and provided no Default or
Event of Default has occurred, Indebtedness arising from the refinancing of the
Indebtedness referred to in Schedule 3; provided:
(A) such refinanced Indebtedness is not secured by any of the
Collateral;
(B) then existing non-recourse Indebtedness is not exchanged for
recourse (however limited) Indebtedness;
(C) Borrower, prior to and following the closing of such refinancing,
is in compliance with the covenants set forth in this Article V;
(D) such refinanced Indebtedness does not make any change in, the
condition or affairs of Borrower which, in any Lender's opinion, increases
its credit risk; and
(E) the eight (8) properties which are being released from the Lien
granted in connection with the Xxxxxxx Xxxxx Facility through the execution
of the Sale-Leaseback Facility are financed only with the Indebtedness
governed by this Agreement.
b) Total Liabilities. Permit there to be Total Liabilities of Borrower
(excluding, through April 23, 1999, liabilities under the Bridge Facility), at
any time, in excess of the amount equal to the lower of fifty five percent (55%)
of
(i) Total Liabilities to Gross Asset Value -- Market; and
(ii) Total Liabilities to Gross Asset Value -- Cost.
c) Aggregate Indebtedness. Permit there to be aggregate Indebtedness of the
Borrower (excluding, through April 23, 1999, liabilities under the Bridge
Facility), , at any time, in excess of the amount equal to the lower of fifty
percent (50%) of
(i) Indebtedness to Gross Asset Value -- Market; and
(ii) Indebtedness to Gross Asset Value -- Cost.
d) Interest Expense Ratios. Maintain a ratio of EBITDA to Interest Expense in
less than:
(i) including the Bridge Facility, for the first calendar quarter of
1999, 1.25:1.0;
(ii) excluding the Bridge Facility, for the first calendar quarter of
1999, 1.60:1.0;
(iii) for each of the second, third and fourth quarters of 1999,
1.60:1.0;
(iv) for the first calender quarter of 2000, 1.75:1.0; and
(v) for each of the second, third and fourth quarters of 2000,
1.90:1.0.
e) Debt Service Ratios. Maintain a ratio of Adjusted EBITDA to the sum of Debt
Service plus the amount of Preferred Dividends less than:
(i) including the Bridge Facility, for the first calendar quarter of
1999, 1.00:1.0;
(ii) excluding the Bridge Facility, for the first calendar quarter of
1999, 1.10:1.0;
(iii) for each of the second, third and fourth quarters of 1999,
1.10:1.0; and
(iv) for each of the four quarters of 2000, 1.25:1.0.
f) Implied Debt Service Ratios. Maintain a ratio of Adjusted Property Net
Operating Income to Implied Debt Service less than:
(i) for the first calendar quarter of 1999, 1.40:1.0;
(ii) for each of the second, third and fourth quarters of 1999,
2.25:1.0; and
(iii) for the first quarter of 2000, 2.00:1.0; and
(iv) for each of the second, third and fourth quarters of 2000,
2.25:1.0.
For the purposes of this subsection (f) only, the Adjusted Property Net
Operating Income ("APNOI") shall be calculated based only on the NOI of the
Mortgaged Properties and shall be determined, as follows. With respect to any
Mortgaged Property which:
(A) has been open as an extended stay facility for less than
three (3) full calendar months, the APNOI shall be deemed zero,
(B) has been so open for at least three (3) full calendar months
but less than six (6) full calendar months, the trailing quarter APNOI
will be annualized,
(C) has been so open for at least six (6) full calendar months
but less than nine (9) full calendar months, the trailing two quarter
APNOI will be annualized,
(D) has been so open for at least nine (9) full calendar months
but less than twelve (12) full calendar months, the trailing three
quarter APNOI will be annualized, and
(E) has been so open for at least twelve (12) full calendar
months, the trailing twelve month APNOI will be utilized.
g) Tangible Net Worth. Maintain, at any time, a Tangible Net Worth less than
eighty five percent (85%) of its Tangible Net Worth as of December 31, 1998,
less any reduction required by SOP 98-5, adjusted upwards (but not downwards) by
eighty five percent (85%) of the net cash proceeds and other value derived form
the Borrower's issuance of equity securities after the Effective Date.
h) Available Amount. Permit the aggregate principal amount of all outstanding
Advances at any time to exceed the lesser of (i) the Commitment, and (ii) the
Maximum Availability Amount at such time.
i) Dividends and Distributions. Make any dividend or distribution to the
shareholders of Borrower, without the prior written consent of the Required
Lenders, which consent may be withheld in the Lenders' sole discretion, except
that payments may be made, if no Event of Default has occurred, on account of
the coupon payable on up to $250,000,000 of the Convertible Preferred
Securities.
j) Security Capital. Permit Security Capital Group Incorporated to directly or,
through a wholly-owned subsidiary, indirectly own less than (a) fifty one
percent (51%) of the voting stock in Borrower before dilution due to the
conversion of the mortgages in favor of Archstone Communities Trust shown on
Schedule 3 or (b) forty six percent (46%) after such dilution.
k) Sales, Transfers. Sell, transfer or enter into any agreement for the sale or
transfer of any of the Mortgaged Properties, other than:
(i) a sale or transfer or an agreement for the sale or transfer
of a Release Parcel with respect to which all conditions and
requirements to the Release thereof pursuant to Section 8.11 hereof
are (as of the date of such agreement) capable of being, and upon such
sale or transfer shall be, satisfied or
(ii) in connection with the sale of any unimproved land which is
a part (or all) of a Mortgaged Property which is not a Project under
Development or a Stabilized Project, without the unanimous consent of
Lenders, which consent shall not be unreasonably withheld. If Lenders
do not reject any such sale within fifteen (15) days of receipt of
written notice thereof from Borrower, and such notice is clearly
marked "URGENT -- THIS NOTICE MUST BE RESPONDED TO IN FIFTEEN (15)
DAYS," the sale shall be deemed approved.
l) Liens. Create, incur, assume, or suffer to exist any Lien on any Mortgaged
Property to secure any Indebtedness of the Borrower or any other Person, other
than Permitted Encumbrances.
m) Mergers, Sales, Etc. (i) Merge into or consolidate with any other Person;
(ii) sell, assign, lease, transfer, convey or otherwise dispose of (in one
transaction or a series of transactions) all or substantially all of the
Borrower's or such Subsidiary's assets, as the case may be, to any Person or
group (as such term is used in Section 13(d)(3) of the Exchange Act), (iii) the
liquidation or dissolution of the Borrower or such Subsidiary, as the case may
be, or the adoption of a plan by the stockholders of the Borrower or such
Subsidiary, as the case may be, relating to the dissolution or liquidation of
the Borrower or such Subsidiary, as the case may be, (iv) the acquisition by any
Person or group (as such term is used in Section 13(d)(3) of the Exchange Act),
except for Realty or Affiliates thereof, of a direct or indirect majority
interest (more than 50%) of the voting power of the capital stock of the
Borrower by way of purchase, merger or consolidation or otherwise; or (v) during
any period of two consecutive years, individuals who at the beginning of such
period constituted the Board of Directors of the Borrower (which includes any
new directors whose election by such Board of Directors or whose nomination for
election by the stockholders of the Borrower was approved by a vote of at least
two thirds (2/3) of the directors then still in office who were either directors
at the beginning of such period or whose election or nomination for election was
previously so approved) cease for any reason to constitute a majority of the
Board of Directors of the Borrower.
n) Changes in Property or Business. Except in connection with the development of
an extended stay facility and ancillary facilities related thereto or with the
prior written consent of the Required Lenders:
(A) Make or allow any material change to be made in the nature of
the use of any Mortgaged Property, or any part thereof from that in
effect on the date hereof or the date acquired, as the case may be; or
(B) Initiate or acquiesce in any change in any Use Requirements
now or hereafter in effect and affecting any Mortgaged Property or any
part thereof.
o) Transactions with Affiliates. Purchase, acquire, or lease any property from,
or sell, transfer, or lease any property to, or lend or advance any money to, or
borrow any money from, or guarantee any obligation of, or acquire any stock,
obligations, or securities of, or enter into any merger or consolidation
agreement, or any management or similar agreement with, any Affiliate, or enter
into any other transaction or arrangement or make any payments to (including,
without limitation, on account of any management fees, service fees, office
charges, consulting fees, technical service charges, or tax sharing charges) or
otherwise deal with, in the ordinary course of business or otherwise, any
Affiliate on terms other than arm's-length commercially reasonable terms (other
than (i) any such transactions in effect on the Effective Date and described in
Schedule 4 attached hereto, and (ii) any such transactions between the Borrower
and any of its wholly-owned Subsidiaries and between wholly-owned Subsidiaries
of Borrower).
p) Use of Proceeds. Use the proceeds of the Advances for other than any
Permitted Purpose.
q) Change of Business. Make or allow any material change in the nature or scope
of the business of the Borrower or any Subsidiary, except as permitted under
Section 4.31.
r) Hazardous Materials. Subject to the provisions of Section 5.5 hereof:
(i) Use or permit or suffer use of any Mortgaged Property or any
part thereof or any interest therein or conduct any activity or
operations thereon in any manner which:
(A) would involve or result in the occurrence or presence of
or exposure to Hazardous Materials at, upon, under, across or
within any Mortgaged Property or any part thereof not in the
ordinary course of operation;
(B) would violate any Relevant Environmental Laws; or
(C) would result in the occurrence of any Environmental
Discharge.
(ii) Install or suffer or permit installation or Presence on, in
or under any Mortgaged Property or any part thereof of any underground
or above-ground containers for the storage of fuel oil, gasoline or
other petroleum products or by-products, except (i) such above-ground
containers that are required for the operation of the Mortgaged
Property and that are at all times in compliance with all Relevant
Environmental Laws and any other applicable Requirements of Law and
(ii) such underground containers that are required for the operation
of the Mortgaged Property and are at all times in compliance with all
Relevant Environmental Laws and any other applicable Requirements of
Law.
s) Projects under Development. Permit the Total Costs of Projects under
Development, at any time, to exceed:
(i) during the first quarter of 1999, twenty percent (20%) of GAV -- Cost;
(ii) during the second quarter of 1999, fifteen percent (15%) of GAV --
Cost; and
(iii) thereafter, twelve and one half percent (12.5%) of GAV --Cost.
For the purposes of this section, if a Project under Development is owned by an
Unconsolidated Affiliate of Borrower, then the Total Costs shall be deemed to be
the greater of:
(iv) the product of (A) the greater of Borrower's nominal ownership
interest in such Unconsolidated Affiliate or its ownership interest used in the
calculation of GAV -- Cost and (B) the amount of the Construction Budget for
such Project under Development and
(v) the recourse obligations of Borrower relating to the Indebtedness of
such Unconsolidated Affiliate.
t) Land and Projects. Permit the sum of the Total Costs of Projects under
Development and the GAV -- Cost with respect to unimproved land, at any time, to
exceed:
(i) during the first quarter of 1999, thirty two and one half percent
(32.5%) of GAV-- Cost;
(ii) during the second quarter of 1999, twenty seven and one half percent
(27.5%) of GAV-- Cost; and
(iii) thereafter, twenty percent (20.0%) of GAV -- Cost.
u) Guarantors. Except as provided in Section 4.30(b), permit or suffer any
Subsidiary of Borrower to not guarantee the Indebtedness hereunder.
v) Investments. Owns or holds any direct or indirect interest in any Capital
Stock (other than in a Subsidiary of Borrower) or any mortgages or other debt or
security instruments, except as set forth in Schedule 5 hereto. Borrower and its
Subsidiaries will not in the aggregate own or hold any direct or indirect
interest in excess of (a) twelve and one half percent (12.5%) of GAV -- Cost
with respect to unimproved land or (b) twenty five percent (25%) of GAV -- Cost
with respect to, collectively, (i) any interest in Persons in which Borrower
owns less than 75% beneficial interest therein and (ii) any interest in Persons
not managed by Borrower.
Section 5.4 "Material Casualties." The Borrower agrees that if at any time
prior to the repayment in full of the Advances and the termination of the
Commitment (including, but not limited to, at any time, prior to or after an
Event of Default) any Mortgaged Property is damaged by fire, earthquake or other
casualty in such a manner or to such an extent so that it is unlikely, in the
Arranger's reasonable judgment, that such Mortgaged Property will be restored on
or prior to the Maturity Date to the same physical, leased and operating
condition as it exists prior to such casualty, the Borrower shall, within twenty
(20) days of the Arranger's written request, direct that the insurance proceeds
from the casualty be delivered over to the Administrative Agent, to be applied
by the Administrative Agent to repayment of or the Borrower's obligations under
this Agreement and the other Loan Documents.
Section 5.5 "Effect of Certain Representations or Covenants Being
Inaccurate or Breached." In the event that any of the representations and
warranties contained in Sections 4.11, 4.13, 4.15, 4.16, 4.17, 4.21, 4.23, 4.24,
4.26, 4.27, 4.30, 4.31 and 4.32 of this Agreement (or any representation or
warranty contained in any other Loan Document which is substantially similar to
any of the foregoing representations and warranties) are not accurate when made
or deemed made, or in the event that any of the covenants contained in Sections
5.1(c), (d)(ii), (h), (i), (j), (k), (m) and (o) and 5.3(r) (or any covenant
contained in any other Loan Document which is substantially similar to any of
the foregoing covenants) are breached, then, notwithstanding anything to the
contrary, such breach or inaccuracy shall not constitute or be deemed a Default
or Event of Default, and Borrower shall not be deemed to have made any
misrepresentation, or breached any warranty or covenant unless and until (but
shall, at Arranger's option, constitute and be deemed a Default and Event of
Default, and Borrower shall be deemed to have made such misrepresentation, or
breached such warranty or covenant, if and when):
(a) (i) Borrower is given notice by the Administrative Agent
or the Arranger of the circumstances which, but for this Section 5.5, would
constitute such misrepresentation, or breach of warranty or covenant and such
circumstances are not remediated (i.e, the circumstances which would otherwise
constitute such misrepresentation, or breach of warranty or covenant no longer
exist) within (1) in the case of circumstances which can be remediated by the
payment of a sum of money only, 10 days after such notice is given, and (2) in
the case of all other circumstances, thirty (30) days after such notice is given
plus, if such circumstances cannot reasonably be remediated within thirty (30)
days after such notice is given and the Borrower has during such 30-day period
commenced to remediate such circumstances and thereafter diligently pursues all
necessary efforts to effect such remediation, such additional period of time as
may be required to effect such remediation; provided, however, that if at any
time during any cure period described above regarding circumstances the cost to
remediate which are quantifiable, Borrower shall not have provided evidence
satisfactory to the Arranger and the Administrative Agent that the Borrower has
available to it sufficient funds (other than from borrowings pursuant to this
Agreement) to promptly effect any such remediation, then the cure period
provided for above regarding such circumstances shall immediately expire; and
(ii) upon the expiration of the applicable cure period described
in Section 5.5(a)(i), if such circumstances have not been remediated, the
aggregate principal amount of all outstanding Advances at such time exceeds the
"Eligible Maximum Availability Amount", as herein defined, at such time. The
term "Remediation Amount" means the amount which Borrower certifies to the
Arranger and the Administrative Agent in writing (Borrower hereby agreeing to so
certify such amount promptly upon the Arranger or the Administrative Agent's
request) as being Borrower's reasonable estimate (determined in a manner
reasonably acceptable to the Arranger and the Administrative Agent, the basis
for which determination shall be set forth in reasonable detail in such
certification) of the aggregate cost of remediating all circumstances which
would constitute a misrepresentation or breach of warranty or covenant of any of
the representations, warranties or covenants described above in this Section
5.5. The term "Eligible Maximum Availability Amount" means, as of the date of
expiration of such applicable cure period, the Maximum Availability Amount as of
such date recomputed by subtracting from the Eligible Costs as of such date the
amount by which the Remediation Amount exceeds, if at all, the lesser of (x)
$3,000,000.00, and (y) the greater of (A) $300,000.00, and (B) three percent
(3%) of the Eligible Costs as of such date; provided, however, notwithstanding
the foregoing, the aggregate principal amount of all outstanding Advances shall
not at any time exceed the lesser of (i) the Commitment, and (ii) the Maximum
Availability Amount at such time; or
(b) all circumstances which would constitute a
misrepresentation or breach of warranty or covenant of any of the
representations, warranties or covenants described above in this Section 5.5,
when taken as a whole, constitute a Material Adverse Change.
In the event that any misrepresentation or breach of warranty or covenant with
respect to one or more Mortgaged Properties occurs which, pursuant to the
provisions of this Section 5.5, constitutes or will constitute a Default and
Event of Default, then, subject to the terms hereof, Borrower shall have the
right to substitute for such affected Mortgaged Properties one or more other
properties of the Borrower or its Subsidiaries, provided that (i) all of such
proposed substitute properties are acceptable in all respects to the Lenders in
their sole, absolute and subjective discretion, (ii) all other conditions herein
to a property becoming a Mortgaged Property are satisfied and complied with, and
(iii) both before and after giving effect to such proposed substitution, no
Default or Event of Default (other than as a result of such misrepresentation or
breach of warranty or covenant) shall exist.
Section 5.6 "Appraisals and Environmental Reports." Within forty (40) days
of the Effective Date, the Arranger shall deliver to Administrative Agent
appraisals of all of the Mortgaged Properties. Administrative Agent shall
forward copies of the appraisals to the Lenders. Within sixty (60) days of the
Effective Date, and following Lenders' comments on the appraisals (which
Administrative Agent shall be sent and shall thereupon send to the Borrower),
the Arranger shall cause the appraisals to be finalized to the satisfaction of
Lenders. If the aggregate Stabilized Appraised Value of the Mortgaged Properties
is less than the aggregate Eligible Direct Costs thereof, and the Maximum
Available Amount is therefor reduced, then Borrower, within thirty (30) days of
the date of such appraisal, shall increase the Maximum Available Amount or shall
repay a portion of the Loan and reduce the principal balance thereof to no more
than the Maximum Available Amount.
Section 5.7 "New Subsidiaries." In the event any Person becomes a
Subsidiary after the Effective Date, the Borrower shall deliver to the
Administrative Agent within twenty (20) Business Days of such event, each of the
following items, in form and substance satisfactory to the Administrative Agent:
(a) an accession agreement in the form annexed hereto as Exhibit S executed by
such Subsidiary;
(b) the articles of incorporation, articles of organization, certificate of
limited partnership or other comparable organizational instrument (if any) of
such Subsidiary certified as of a recent date by the Secretary of State of the
State of formation of such Subsidiary;
(c) a Certificate of Good Standing or certificate of similar meaning with
respect to such Subsidiary issued as of a recent date by the Secretary of State
of the State of formation of such Subsidiary and certificates of qualification
to transact business or other comparable certificates issued by each Secretary
of State (and any state department of taxation, as applicable) of each state in
which such Subsidiary is required to be so qualified;
(d) a certificate of incumbency signed by the Secretary or Assistant Secretary
(or other individual performing similar functions) of such Subsidiary with
respect to each of the officers or other representatives of such Subsidiary
authorized to execute and deliver the Loan Documents to which such Subsidiary is
a party;
(e) copies certified by the Secretary or Assistant Secretary of such Subsidiary
(or other individual performing similar functions) of (i) the bylaws of such
Subsidiary, if a corporation, the operating agreement, if a limited liability
company, the partnership agreement, if a limited or general partnership, or
other comparable document in the case of any other form or legal entity and (ii)
all corporate, partnership, member or other similar action taken by such
Subsidiary to authorize the execution, delivery and performance of the Loan
Documents to which it is a party;
(f) an opinion of legal counsel to such Subsidiary, regarding the due formation
and good standing of such Subsidiary, the authorization, execution, delivery and
enforceability of the Loan Documents to which it is a party, and such other
matter as the Administrative Agent may reasonably request; and
(g) such other documents and instruments as the Administrative Agent may
reasonably request.
ARTICLE VI. EVENTS OF DEFAULT
Section 6.1 "Events of Default." The occurrence and continuance of any of
the following specified events shall constitute an "Event of Default":
a) Payments. The Borrower shall fail to pay (i) any principal of the Advances
hereunder when due, or (ii) within three (3) days when due (including, without
limitation, by mandatory prepayment) (1) any interest on any of the Advances or
any fees or (2) any other amount payable hereunder or under the other Loan
Documents.
b) Certain Property Representations and Covenants. Any misrepresentation or
breach of warranty or covenant occurs which, pursuant to the provisions of
Section 5.5 hereof, constitutes a Default and Event of Default.
c) Other Covenants. The Borrower or any Subsidiary of Borrower shall fail to
observe or perform any covenant or agreement (other than those referred to in
Sections 6.1(a) and (b)) and such failure shall remain unremedied (i) in the
case of any amounts payable hereunder or under the other Loan Documents for
three (3) days after notice from the Arranger of the Administrative Agent, (ii)
in the case of covenants or agreements contained in Section 5.2(a), (b), (c) and
(d) of this Agreement, for fifteen (15) Business Days after the occurrence
thereof; or (ii) in all other cases, for thirty (30) days after the occurrence
thereof. In the event that a breach of a covenant described in clause (ii) above
cannot be cured within thirty (30) days after the occurrence thereof and the
Borrower has during such 30-day period commenced to cure such breach and
thereafter diligently pursues all necessary efforts to effect a cure, an Event
of Default shall be deemed only to have occurred if the breach either cannot be
remedied, or remains unremedied, for sixty (60) days after the occurrence
thereof.
d) Representations. Any representation, warranty, or statement (other than those
referred to in Section 6.1(b)) made or deemed to be made by the Borrower or any
other Person (other than the Administrative Agent or any Lender) that is a party
to any Loan Document under or in connection with any Loan Document shall have
been incorrect in any material respect as of the date hereof, or as of the date
deemed to have been made.
e) Non-Payments of Other Indebtedness. The Borrower or any Subsidiary of
Borrower shall fail to make any payment of principal of or interest on any
Indebtedness of the Borrower or any such Subsidiary (other than any Indebtedness
under this Agreement or the other Loan Documents and other than Permissible
Assumed Indebtedness) in an aggregate principal amount of not less than
$5,000,000.00 within the applicable cure period or any event specified in any
note, agreement, indenture or other document evidencing or relating to any such
Indebtedness shall occur; and the effect of such failure or event is to
accelerate, or to permit the holder of such aggregate Indebtedness or any other
Person to accelerate, the maturity of such Indebtedness; or such Indebtedness
shall be required to be prepaid (other than by a regularly scheduled required
prepayment) in whole or in part prior to its stated maturity.
f) Defaults Under Loan Documents. The Borrower or any other Person (other than
the Administrative Agent or any Lender) that is a party to any Loan Document
shall fail to observe or perform any covenant or agreement (other than those
referred to in Sections 6.1(a) and (b)) contained in any other Loan Document, or
any default shall occur under any other Loan Document (other than those referred
to in Sections 6.1(a) and (b)) and such failure or default shall remain
unremedied (i) in the case of any amounts payable under the other Loan
Documents, for three (3) days after notice from the Arranger or the
Administrative Agent, (ii) in the case of covenants or agreements similar to the
covenants or agreements contained in Section 5.2(a), (b), (c) and (d) of this
Agreement, for fifteen (15) Business Days after the occurrence thereof; or (iii)
in all other cases, thirty (30) days after the occurrence thereof. In the event
that a breach of a covenant described in clause (ii) above cannot be cured
within thirty (30) days after the occurrence thereof and the Borrower has during
such 30-day period commenced to cure such breach and thereafter diligently
pursues all necessary efforts to effect a cure, an Event of Default shall be
deemed only to have occurred if the breach either cannot be remedied, or remains
unremedied, for sixty (60) days after the occurrence thereof.
g) Bankruptcy. The Borrower shall commence a voluntary case concerning itself
under Title 11 of the United States Code entitled "Bankruptcy" as now or
hereafter in effect, or any successor thereto (the "Bankruptcy Code"); or an
involuntary case is commenced against the Borrower and the petition is not
dismissed within ninety (90) days, after commencement of the case; or a
custodian (as defined in the Bankruptcy Code) is appointed for, or takes charge
of, all or any substantial part of the property of the Borrower; or the Borrower
commences any other proceeding 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 or there is commenced against the Borrower any such proceeding which
remains undismissed for a period of ninety (90) days; or the Borrower is
adjudicated insolvent or bankrupt; or any order of relief or other order
approving any such case or proceeding is entered; or the Borrower 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 the Borrower makes a general assignment for the benefit of creditors; or the
Borrower 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 the Borrower shall
call a meeting of its creditors with a view to arranging a composition or
adjustment of its debts; or the Borrower shall by any act or failure to act
indicate its consent to, approval of, or acquiescence in any of the foregoing;
or any action is taken by the Borrower for the purpose of effecting any of the
foregoing; or any of the foregoing shall occur with respect to any Subsidiary of
Borrower.
h) Money Judgment. A judgment or order for the payment of money in excess of
$5,000,000 shall be rendered against the Borrower or any Subsidiary of Borrower
and such judgment or order shall continue unsatisfied (in the case of a money
judgment) and in effect for a period of thirty (30) days during which execution
shall not be effectively stayed or deferred (whether by action of a court, by
agreement, or otherwise) (or, if such judgment is covered by insurance, such
longer period during which the Borrower or such Subsidiary is appealing or
otherwise contesting such judgment in good faith).
i) Cessation. Borrower or, without the prior consent of all Lenders, which
consent may not be unreasonably withheld, any Subsidiary of Borrower which is
not an Urban Subsidiary (as hereinafter defined) ceases, or threatens to cease,
to carry on all or a substantial part of its business. As used herein, an "Urban
Subsidiary" is a Subsidiary of Borrower which has mortgaged property to the
Arranger, as agent, pursuant to the credit facility referred to in subsection
(j) below.
j) Urban Credit Facility. An Event of Default shall have occurred under the
Amended and Restated Credit Agreement of even date herewith among Borrower,
Commerzbank AG, Los Angeles Branch and other lenders as set forth therein, and
Arranger, as agent, governing a certain credit facility secured by mortgage
liens on properties in central business districts.
(k) Sale-Leaseback Facility. A default shall have occurred under the
Sale-Leaseback Facility.
Section 6.2 "Global Remedies." Upon the occurrence and continuation of an
Event of Default, and at any time thereafter, if any Event of Default shall then
be continuing, the Required Lenders may, by written notice to the Borrower, take
any or all of the following actions, without prejudice to the rights of the
Lenders to enforce its claims against the Borrower: (i) declare the Commitment
terminated, whereupon the Commitment shall terminate immediately; (ii) declare
all or any portion of the principal of and any accrued interest on the Advances
and all other obligations owing hereunder and under the other Loan Documents, to
be, whereupon the same shall become, forthwith due and payable without
presentment, demand, protest, or other notice of any kind, all of which are
hereby waived by the Borrower; (iii) foreclose on any Collateral concurrently or
in such order as the Arranger may from time to time see fit; or (iv) take any
action permitted under any Loan Document; provided, that, if any Event of
Default specified in Section 6.1(g) shall occur, the actions specified in
clauses (i) and (ii) above shall be deemed to have immediately and automatically
occurred without the giving of any notice to the Borrower.
Section 6.3 "Marshalling; Waiver of Certain Rights; Recapture." Neither the
Administrative Agent, the Arranger nor the Lenders shall be under any obligation
to xxxxxxxx any assets in favor of the Borrower or any other party or against or
in payment of any or all of the obligations of such parties. To the extent
permitted by law the Borrower waives and renounces the benefit of all valuation,
appraisement, homestead, exemption, stay, redemption, and moratorium rights
under or by virtue of the constitution and laws of the state in which the
Mortgaged Properties are located and of any other state or of the United States,
now existing or hereafter enacted. To the extent the Administrative Agent or any
Lender receives any payment by or on behalf of the Borrower, which payment or
any part thereof is subsequently invalidated, declared to be fraudulent or
preferential, set aside or required to be repaid to the Borrower or its estate,
trustee, receiver, custodian, or any other party under any bankruptcy law, state
or federal law, common law, or equitable cause, then to the extent of such
payment or repayment, the obligation or part thereof which has been paid,
reduced, or satisfied by the amount so repaid shall be reinstated by the amount
so repaid and shall be included within the liabilities of the Borrower to such
party as of the date such initial payment, reduction, or satisfaction occurred,
together with interest at the Default Rate. The Borrower agrees that (i) the
Arranger on behalf of the Lenders shall have the right to pursue all of its
rights and remedies in one proceeding, or separately and independently in
separate proceedings from time to time, as the Arranger, in its reasonable
discretion, shall determine from time to time, (ii) the Collateral may be sold
at such proceeding or proceedings in one or more sales and in such portions or
combinations as the Arranger, in its sole and absolute discretion, shall
determine, (iii) the Arranger on behalf of the Lenders shall not be required to
xxxxxxxx assets, sell any of the Collateral in any inverse order of alienation,
or be subject to any "one action" or "election of remedies" law or rule, (iv)
the exercise by the Lenders of any remedies against any one item of Collateral
will not impede the Lenders from subsequently or simultaneously exercising
remedies against any other item of Collateral, and (v) all Liens and other
rights, remedies, or privileges provided to the Arranger and the Lenders under
this Agreement and the other Loan Documents shall remain in full force and
effect until the Arranger and the Lenders have exhausted all of their remedies
against the Collateral and all of the Collateral has been foreclosed, sold or
otherwise realized upon in satisfaction of the Promissory Notes and the other
obligations of the Borrower to the Arranger and the Lenders. Each Lender and its
officers, directors, shareholders, employees, counsel and agents shall not incur
any liability as a result of the sale of the Collateral, or any part thereof, in
accordance with the provisions of this Agreement or any Loan Document, or for
the failure to sell or offer for sale the Collateral, or any part thereof, for
any reason whatsoever. The Borrower waives any claims against each Lender and
its officers, directors, shareholders, employees, counsel and agents arising
with respect to the price at which the Collateral, or any part thereof, may have
been sold by reason of the fact that such price was less than the aggregate
amount of the indebtedness due under the Promissory Notes, this Agreement and
the other Loan Documents.
Section 6.4 "Application of Proceeds." All proceeds received by the
Arranger or the Lenders in respect of the repayment of any sums due hereunder or
in connection with a foreclosure sale of all or any portion of the Collateral
after the occurrence of an Event of Default shall be applied, first, to the
costs of enforcement of the Lenders' rights hereunder and under the other Loan
Documents; second, to pay any accrued and unpaid interest (including all
interest owing at the Default Rate), the principal amount of the Advances and
any unpaid fees payable under this Agreement and the other Loan Documents in
such order of priority as the Arranger, in its sole and absolute discretion
shall determine but subject to the rights of the Lenders; and third, if any
excess proceeds exist, to the Borrower or any party entitled thereto as a matter
of law. If the amount of all proceeds received in liquidation of the Collateral
which shall be applied to payment of the indebtedness due in respect of this
Agreement, the Promissory Notes and the Loan Documents shall be insufficient to
pay all such indebtedness or obligations in full, the Borrower acknowledges that
it shall remain liable for any deficiency, together with interest thereon and
costs of collection thereof (including reasonable counsel fees and legal
expenses).
b) The Arranger shall have the right, but not the obligation, to deposit any
proceeds in its possession which are available under clause third of Section
6.4(a) above into a court of competent jurisdiction for determination by such
court of the disposition of such excess proceeds and upon such deposit, the
Arranger shall have no further liability with respect to such proceeds. All
costs and expenses of the Arranger in connection with such action may be
deducted or charged by the Arranger against such excess proceeds and shall
otherwise be reimbursed by the Borrower upon demand. The Arranger shall have the
right, but not the obligation, to request and rely on the instructions of the
Borrower in connection with the disposition of any such excess proceeds and,
upon compliance with such instructions, shall have no further liability with
respect to such proceeds.
Section 6.5 "Attorneys-in-Fact." The Borrower hereby makes, constitutes and
appoints the Arranger, and its agents and designees, the true and lawful agents
and attorneys-in-fact of the Borrower, with full power of substitution, to take
any or all of the following actions during the continuance of an Event of
Default: (i) to receive, open and dispose of all mail addressed to the Borrower
relating to the Collateral, (ii) to notify and direct the United States Post
Office authorities by notice given in the name of the Borrower and signed on its
behalf, to change the address for delivery of all mail addressed to the Borrower
relating to the Collateral to an address to be designated by the Arranger, and
to cause such mail to be delivered to such designated address where the Arranger
may open all such mail and remove therefrom any notes, checks, acceptances,
drafts, money orders or other instruments in payment of the Collateral in which
the Arranger has a security interest hereunder and any documents relative
thereto, with full power to endorse the name of the Borrower upon any such
notes, checks, acceptances, drafts, money orders or other form of payment or on
Collateral or security of any kind and to effect the deposit and collection
thereof, and the Arranger shall have the further right and power to endorse the
name of the Borrower on any documents otherwise relating to such Collateral, and
(iii) to do any and all other things necessary or proper to carry out the intent
of this Agreement and to perfect and protect the liens and rights of the
Arranger created under this Agreement, including, without limitation, to claim,
bring suit, settle or adjust any insurance proceeds claims relating to the
Collateral. The Borrower agrees that neither the Lenders nor any of their
officers, directors, shareholders, employees, counsel, agents, designees or
attorneys-in-fact will be liable for any acts of commission or omission, or for
any error of judgment or mistake of fact or law, except for any acts of gross
negligence or willful misconduct. The powers granted hereunder are coupled with
an interest and shall be irrevocable during the term hereof.
ARTICLE VII
AGENCY AND INTERCREDITOR RELATIONSHIPS
Section 7.1 "Appointment." Each Lender hereby irrevocably designates and
appoints each of Commerzbank AG, New York Branch and Xxxxx Fargo Bank National
Association as the contractual representatives of such Lender under the Loan
Documents, and each such Lender irrevocably authorizes Commerzbank AG, New York
Branch and Xxxxx Fargo Bank National Association , to act as the contractual
representatives for such Lender, to take such action on its behalf under the
provisions of this Agreement and the Loan Documents and to exercise such powers
and perform such duties as are expressly delegated to the Arranger and the
Administrative Agent, as the case may be, by the terms of this Agreement and the
Loan Documents, together with such other powers as are reasonably incidental
thereto. The Arranger and the Administrative Agent shall not have any duties or
responsibilities, except those expressly set forth in this Agreement and the
Loan Documents, or any fiduciary relationship with any Lender, and no implied
covenants, functions, responsibilities, duties, obligations or liabilities on
the part of the Arranger or the Administrative Agent shall be read into any of
the Loan Documents or otherwise exist against the Arranger or the Administrative
Agent. The provisions of this Article VII are solely for the benefit of the
Arranger, the Administrative Agent and the Lenders, and the Borrower shall not
have any rights as a third party beneficiary or otherwise under any of the
provisions of this Article VII. In performing its respective functions and
duties under the Loan Documents, the Arranger and the Administrative Agent shall
act solely as the contractual representatives of the Lenders and do not assume
nor shall the Arranger and the Administrative Agent be deemed to have assumed
any obligation or relationship of trust or agency with or for the Borrower or
any of such party's respective successors and assigns.
Section 7.2 "Delegation of Duties." The Arranger and the Administrative
Agent may execute any of their duties under the Loan Documents by or through
agents or attorneys-in-fact and shall be entitled to advice of counsel
(including their internal counsel) concerning all matters pertaining to such
duties. The Arranger and the Administrative Agent shall not be responsible for
the negligence or misconduct of any agents or attorneys-in-fact selected by it
with reasonable care.
Section 7.3 "Exculpatory Provisions." The Arranger and the Administrative
Agent shall not be (a) liable for any action lawfully taken or omitted to be
taken by it, or any Person described in Section 7.2, under or in connection with
any Loan Document (except for those actions arising from the gross negligence or
willful misconduct of the Arranger or the Administrative Agent, as the case may
be), or (b) responsible in any manner to any of the Lenders for (i) any
recitals, statements, representations or warranties made by the Borrower
contained in any Loan Document, or by the Borrower in any certificate, report,
statement or other document referred to or provided for in, or received under or
in connection with any Loan Document or (ii) the value, validity, effectiveness,
genuineness, enforceability or sufficiency of any Loan Document or any such
certificate, report, statement or other document, or (iii) any failure of the
Borrower, or any Lender to perform or observe its respective obligations
hereunder or thereunder. Except as expressly required to do so under the Loan
Documents, the Arranger and the Administrative Agent shall not be under any
obligation to any Lender to ascertain or to inquire as to the observance or
performance of any of the agreements contained in, or conditions of any Loan
Document, or to inspect the properties, or the books or records of the Borrower.
This Section 7.3 is intended to govern solely the relationship between each of
the Arranger and the Administrative Agent, on the one hand, and the Lenders, on
the other.
Section 7.4 "Reliance by Arranger and the Administrative Agent." Each of
the Arranger and the Administrative Agent shall be entitled to rely, and shall
be fully protected in relying, upon any writing, resolution, notice, consent,
certificate, affidavit, letter, cablegram, telegram, telecopy, telex or teletype
message, statement, order or other document or conversation (including by
telephone) 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 (including, without limitation, its internal counsel and counsel
to the Borrower), independent accountants and other experts selected by the
Arranger and the Administrative Agent, as the case may be. The Arranger and the
Administrative Agent shall be fully justified in failing or refusing to take any
action under any Loan Document unless it shall first receive such advice or
concurrence of the Lenders required pursuant to this Agreement or it shall first
be indemnified to its 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.
Section 7.5 "Notices." Neither the Arranger nor the Administrative Agent
shall be deemed to have knowledge or notice of the occurrence of any Default or
Event of Default unless (i) such party has received notice from a Lender or the
Borrower referring to this Agreement, describing such Default or Event of
Default and stating that such notice is a "notice of default" or (ii) such
party, in its capacity as the Arranger of the Administrative Agent, has actual
knowledge of such Default or Event of Default. In the event that the
Administrative Agent or the Arranger receives such a notice or obtains such
actual knowledge, it shall promptly give notice thereof to the Lenders. The
Arranger shall take such action with respect to such Default or Event of Default
as shall be directed by the Required Lenders; provided that unless and until the
Arranger shall have received such directions, the Arranger may (but shall not be
obligated to) take such action, or refrain from taking such action, with respect
to such Default or Event of Default as the Arranger shall deem advisable and in
the best interests of the Lenders. The Administrative Agent shall take no action
with respect to a Default or Event of Default except as directed by the Arranger
in writing and shall have no liability to the Borrower or its Subsidiaries or
any Lender for acting on and carrying out any such direction.
b) Each Lender agrees that it shall promptly notify the Arranger and the
Administrative Agent in writing after it first has knowledge of any Default or
Event of Default or of any matter which in such Lender's judgment adversely
affects any Lender's respective interests in the Commitment, which notice will
describe the Default or Event of Default or matter in reasonable detail. The
Administrative Agent shall give a copy of any such notice received by the
Administrative Agent to the other Lenders. c) The Arranger shall promptly give
copies of the financial reports it receives pursuant to Sections 5.2(a) and (b)
hereof to the other Lenders. The Administrative Agent shall promptly give copies
of the financial reports it receives pursuant to Sections 5.2(c) to (e) hereof
to the other Lenders.
Section 7.6 "Non_reliance on the Arranger, the Administrative Agent and the
Other Lenders." Each Lender expressly acknowledges that neither the Arranger,
the Administrative Agent, nor any of their officers, directors, employees,
agents, attorneys-in-fact or affiliates has made any representations or
warranties to it and that no act by either of the Arranger or the Administrative
Agent hereafter taken, including, without limitation, any review of the affairs
of the Borrower shall be deemed to constitute any representation or warranty by
the Arranger or the Administrative Agent. Each Lender represents and warrants to
the Arranger and the Administrative Agent that it has, independently and without
reliance upon the Arranger and the Administrative Agent or any other Lender and
based on such documents and information as it has deemed appropriate, (a) made
its own appraisal of and investigation into the business, operations, property,
prospects, financial and other condition, creditworthiness and solvency of the
Borrower, (b) satisfied itself as to the due execution, legality, validity,
enforceability, genuineness, sufficiency and value of all of the Loan Documents
and all other instruments and documents furnished pursuant to any Loan Document,
and (c) made its own decision as to its Percentage of the Commitment pursuant to
this Agreement. Each Lender also represents that it will, independently and
without reliance upon the Arranger, the Administrative Agent or any other
Lender, and based on such documents and information as it shall deem appropriate
at the time, continue to make its own credit analyses, appraisals and decisions
in taking or not taking action under this Agreement, and to make such
investigation as it deems necessary to inform itself as to the business,
operations, property, prospects, financial and other condition and
creditworthiness of the Borrower. Except for notices, reports and other
documents expressly required pursuant to the Loan Documents to be furnished by
the Arranger or the Administrative Agent to the Lenders, the Arranger and the
Administrative Agent, as applicable, shall not have any duty or responsibility
to provide any Lender with any credit or other information concerning the
business, operations, property, prospects, financial and other condition or
creditworthiness of the Borrower which may come into the possession of the
Arranger, the Administrative Agent or any of their officers, directors,
employees, agents, attorneys-in-fact or affiliates.
Section 7.7 "Indemnification." The Lenders agree to indemnify each of the
Arranger and the Administrative Agent (in their capacities as such) and their
officers, directors, employees, representatives and agents (to the extent not
reimbursed by the Borrower and without limiting the obligation, if any, of the
Borrower to do so), ratably in accordance with their Percentages, from and
against any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements of any kind or
nature whatsoever (including, without limitation, the fees and disbursements of
counsel for the Arranger, the Administrative Agent or such Person in connection
with any investigative, administrative or judicial proceeding commenced or
threatened, whether or not the Arranger, the Administrative Agent or such Person
shall be designated a party thereto) that may at any time be imposed on,
incurred by or asserted against the Arranger, the Administrative Agent or such
Person as a result of, or arising out of, or in any way related to or by reason
of, any of the transactions contemplated by the Loan Documents or the execution,
delivery or performance of any Loan Document (but excluding any such
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements resulting solely from the gross negligence or
willful misconduct of the Arranger, the Administrative Agent or such Person as
determined by a court of competent jurisdiction). The agreements in this
subsection shall survive the payment of the Promissory Notes and all other
amounts payable hereunder.
Section 7.8 "Individual Capacity." The Arranger, the Administrative Agent
and their Affiliates may make loans to, accept deposits from and generally
engage in any kind of business with the Borrower and any of its Affiliates as
though it were not the Arranger or the Administrative Agent hereunder. With
respect to Advances made or renewed by it and any Promissory Note issued to it,
the Arranger and the Administrative Agent shall have the same rights and powers
under this Agreement as any Lender and may exercise the same as though they were
not the Arranger or the Administrative Agent .
Section 7.9 "The Arranger's Resignation." The Arranger may resign at any
time by giving notice thereof to the Administrative Agent, the other Lenders and
the Borrower. If the Arranger's resignation is given in conjunction with an
assignment of the Arranger's interest in the Promissory Note held by the
Arranger to another Person or Persons, the Arranger, with the consent of the
Required Lenders, shall have the right to name a successor Arranger by giving
notice thereof to the Administrative Agent, the Borrower and the other Lenders.
Otherwise, upon the resignation of the Arranger, the Required Lenders shall
designate within forty five (45) days in writing another Person as the successor
Arranger. If such proposed successor Arranger agrees in writing to act as the
Arranger in accordance with the terms hereof, such successor Arranger shall
thereupon succeed to and become vested with all the rights, powers, privileges,
duties and obligations of the resigning the Arranger, and the resigning Arranger
shall be discharged from its duties and obligations as the Arranger under this
Agreement. After any retiring Arranger's resignation hereunder, the provisions
of this Article VII shall inure to its benefit as to any actions taken or
omitted to be taken by it while it was the Arranger under this Agreement.
Section 7.10 "Appointment of a Substitute Administrative Agent." Xxxxx
Fargo Bank National Association shall be the initial Administrative Agent under
this Agreement and the Loan Documents until the Loan Documents have been
terminated and the Lenders have been paid in full. In the event that the
Administrative Agent determines that it is not in the best interest of the
Administrative Agent to continue to act as the Administrative Agent, then the
Administrative Agent may, at its option and upon thirty (30) days' prior written
notice to the Borrower and the Lenders, request a substitute Administrative
Agent be selected in accordance with the terms of this Section to act as the
Administrative Agent with respect to such matters. Within fifteen (15) days
after receipt of such notice, the Required Lenders shall select a proposed
substitute agent and shall notify the Borrower of the identity of such proposed
substitute agent. In addition, the Required Lenders, on not less than thirty
(30) days' notice to the Administrative Agent, may elect to appoint a substitute
Administrative Agent in the event that the Administrative Agent has acted
hereunder with willful misconduct, gross negligence or exhibited a continuing
pattern of negligence with respect to its duties and obligations hereunder.
Provided that no Event of Default shall have occurred and be continuing,
Borrower shall have the right to approve any such proposed substitute agent. The
succeeding substitute Administrative Agent shall have all the rights, powers and
duties of the Administrative Agent and the term "Administrative Agent" shall
mean such substitute Administrative Agent, effective upon its appointment. In
the event that the substitute Administrative Agent wishes to resign, it may do
so upon thirty (30) days' prior notice to the Borrower, the Administrative Agent
and the Lenders, and a new substitute Administrative Agent shall be appointed in
accordance with this Section. After any retiring substitute Administrative
Agent's resignation hereunder as substitute Administrative Agent, the provisions
of this Section 7.10 and Section 8.4 hereof shall inure to the benefit of such
retired substitute Administrative Agent as to any actions taken or omitted to be
taken by it while it was substitute Administrative Agent under this Agreement.
Section 7.11 "Loans." Each Lender shall make available to the Borrower such
Lender's portion of the Commitment subject to and in accordance with the
provisions of the Loan Documents. The Borrower shall look solely to each Lender
for the performance of such Lender's obligations, covenants and agreements under
the Loan Documents on the part of each Lender to be performed or observed with
respect to each such portion of the Commitment, subject to and upon the
conditions, limitations and restrictions set forth herein and in the other Loan
Documents, as evidenced by the signature of each such party hereto. In the event
any Lender has not made available its Percentage of any Advance, the
Administrative Agent may (but shall not be obligated to), and each Lender
authorizes the Administrative Agent to, advance for such Lender's account,
pursuant to the terms hereof, the amount of the Advance to be made by such
Lender and each Lender agrees to reimburse the Administrative Agent in
immediately available funds for any amount so advanced on its behalf. If any
such reimbursement is not made in immediately available funds on the same day on
which the Administrative Agent shall have made such amount available on behalf
of any Lender, such Lender shall also pay interest thereon to the Administrative
Agent at the Federal Funds Rate.
Section 7.12 "Priority of Loans." Each Lender's portion of the Commitment
shall be of equal priority with each other Lender's portion of the Commitment,
and no portion of the Commitment shall have priority or preference over any
other portion of the Commitment or the security therefor, except as provided in
Sections 7.20 and 7.24 hereof.
Section 7.13 "Books and Records." The Administrative Agent will keep
customary books and records relating to the Advances, and such books and records
shall be available at the Administrative Agent's office for the Lenders'
reasonable inspection during the Administrative Agent's normal business hours.
The original Loan Documents shall be kept at the New York office of the
Administrative Agent or at such other office of the Administrative Agent or at
such other place as may be designated from time to time by the Administrative
Agent and shall be made available to any Lender for inspection at such office
within a reasonable period of time following such Lender's written request to
inspect same.
Section 7.14 "Decisions of the Lenders." Except as expressly set forth in
Sections 7.15 and 7.16 hereof, all decisions, consents, waivers, approvals and
other actions (collectively, "Decisions") authorized to be taken under or in
connection with this Agreement and the other Loan Documents by any Lender shall
be taken by the Arranger in its discretion reasonably exercised, subject to the
provisions of Section 7.4 hereof. Except as expressly provided in Sections 7.15
and 7.16 hereof, the Arranger (i) may consent or withhold consent to any action
by the Borrower, (ii) may exercise or refrain from exercising any power, rights
or remedies hereunder or under the other Loan Documents or otherwise in respect
of the Advances, and/or (iii) may waive any conditions in any Loan Documents, so
long as such consent, exercise or waiver would not, in the Arranger's judgment
reasonably exercised, represent a departure from the standards followed by the
Arranger in the administration of loans held by the Arranger entirely for its
own account. The Arranger may request a Decision with respect to matters
described in Sections 7.15 and 7.16 hereof at any time by making a request for
such Decision in writing to all of the Lenders. Any such request (x) shall
contain an adequate description together with relevant background information of
the Decision being requested, (y) shall specify the reasons for such request,
and (z) shall state the effect of not responding to such notice as set forth in
this Section. The Arranger will provide the Lenders with such additional
information as the Lenders may reasonably request to assist such Lenders in
reaching a Decision, to the extent such information is in the Arranger's
possession or under its control. The requested Decision shall be deemed approved
by the Lenders if and when the Arranger receives written approval from the
required percentage of the Lenders as specified in Sections 7.15 and 7.16
hereof, as the case may be. If a Lender does not deliver to the Arranger a
written objection thereto within ten (10) Business Days after hand delivery,
mailing or delivery to an express courier service of the request by the
Arranger, the Arranger shall make a second written request for a Decision from
that Lender. If the Lender does not deliver to the Arranger or the
Administrative Agent a written objection within five (5) Business Days after
hand delivery, mailing or delivery to an express courier service of such a
second request, such Lender shall be deemed to have approved the requested
Decision. If the Arranger is unable to contact the usual representatives of a
Lender for any reason, the Arranger will make a good faith effort to contact
other representatives of such Lender as necessary to reach a Decision within the
allotted time. To the extent that the Arranger reasonably deems necessary, any
such Decision may also be requested telephonically by the Arranger from each
Lender with such telephonic request to be confirmed in writing by the
Administrative Agent. Any Decision as to which the Arranger has made telephonic
requests for approval shall be deemed approved by the Lenders after the
Administrative Agent has received the written approval of the required
percentage of the Lenders as specified in Sections 7.15 and 7.16 hereof. The
Borrower shall be promptly notified of the Decision, if such Decision was made
in response to a request by the Borrower.
Section 7.15 "Approvals by the Lenders."
(a) No amendment, supplement, modification or waiver shall be effective unless
consented to in writing by the Required Lenders; provided, however, that any
amendment, supplement, modification or waiver which adds, deletes, changes or
waives any provisions of the Loan Documents the effect of which is to (i) extend
either the Maturity Date or any installment or required prepayment of any
Advances; (ii) reduce the rate or extend the time of payment of interest on any
Advances; (iii) reduce the principal amount of any Advances; (iv) reduce the
fees payable under this Agreement and the other Loan Documents, or any other fee
payable to the Lenders or extend the due date of any such fee; (v) change any
Lender's portion of the Commitment or the amount of any Advance of any Lender
(except to the extent permitted by Sections 7.18 and 7.19 hereof); (vii) forgive
any Indebtedness of Borrower or any Subsidiary of Borrower; (viii) change any
allocation of payments among the Lenders, (ix) change any provision of this
Section 7.15 or Section 7.16 or the definition of Required Lenders; (x) modify
any financial covenants or waive any Default or Event of Default (except as
provided in Section 7.16), (xi) release any guaranty, (xii) waive or release any
lien on any of the Mortgaged Properties (except as provided in Section 8.11)
or (xiii) commence any judicial or nonjudicial foreclosure proceeding (except as
provided in Section 7.16), shall be ineffective in each case without the written
consent of all the Lenders. Furthermore, no amendment, supplement, modification
or waive shall amend, modify or waive any provision of any Loan Document, if the
effect thereof is to affect the rights or duties of the Arranger or the
Administrative Agent, without the written consent of the Arranger or the
Administrative Agent, as the case may be. Any such amendment, supplement,
modification or waiver shall apply to each of the Lenders equally and shall be
binding upon the Borrower, the Lenders, Arranger, the Administrative Agent and
all future holders of the Promissory Notes. In the case of any waiver, the
Borrower, the Lenders, the Arranger and the Administrative Agent shall be
restored to their former position and rights hereunder and under the outstanding
Promissory Notes, and any Default or Event of Default waived shall be deemed to
be cured and not continuing, but no such waiver shall extend to any subsequent
or other Default or Event of Default, or impair any right consequent thereon.
Section 7.16 "Approvals by the Required Lenders." Upon the Arranger's
receipt of a notice of default (as defined in Section 7.5(a) hereof) with
respect to an Event of Default, the Arranger shall consult with the Lenders in
respect of any such Event of Default to determine a course of action which is
acceptable to the Required Lenders. Subject to Section 7.15 hereof, the Arranger
shall pursue any such course of action approved in writing by the Required
Lenders in respect of any such Event of Default, including, without limitation,
acceleration of the Advances. In the event that the Required Lenders cannot
decide which remedies, if any, are to be pursued, the Arranger may commence
proceedings on behalf of the Lenders; provided, however, that if at any time
thereafter the Required Lenders shall direct that a different or additional
remedial action shall be taken, such different or additional remedial action
shall be taken in lieu of or in addition to such proceedings.
b) The Borrower hereby consents and agrees to the provisions of Sections 7.14
through 7.16 and any modifications thereof entered into by the Arranger and the
Lenders of such provisions and specifically acknowledges and agrees that,
notwithstanding any provisions in the Loan Documents requiring action by the
"Lenders" or similar provisions in connection with the declaration of an Event
of Default, the acceleration of the indebtedness evidenced by the Loan Documents
and/or the exercise of any remedies under the Loan Documents, the Arranger is
hereby empowered to act on behalf of the Lenders in accordance with the
provisions hereof and the authority of the Arranger with respect to any action
taken by the Arranger pursuant to and in accordance with this Agreement shall
not be contested by the Borrower by reason of any different or conflicting
provision contained in any of the Loan Documents.
Section 7.17 "Participation." Any Lender may at any time after the
execution and delivery of this Agreement, sell to one or more Persons (each a
"Participant") participating interests in any Advance owing to such Lender, any
Promissory Note held by such Lender and/or any other interest of such Lender
hereunder (in respect of any such Lender, its "Credit Exposure").
Notwithstanding any such sale by a Lender of participating interests to a
Participant, such Lender's rights and obligations hereunder shall remain
unchanged, such Lender shall remain solely responsible for the performance
thereof, such Lender shall remain the holder of any such Promissory Note for all
purposes hereunder (except as expressly provided below), and the Arranger and
the Administrative Agent shall continue to deal solely and directly with such
Lender in connection with such Lender's rights and obligations hereunder. The
Borrower also agrees that each Participant shall be entitled to the benefits of
Sections 2.11, 2.13 and 2.15 hereof. Each Lender agrees that any agreement
between such Lender and any such Participant in respect of such participating
interest shall not restrict such Lender's right to agree to any amendment,
supplement, waiver or modification to any Loan Document, except where the result
of any of the foregoing would be to extend the final maturity of any Advance or
any regularly scheduled installment thereof or reduce the rate or extend the
time of payment of interest thereon or reduce the principal amount thereof.
Section 7.18 "Assignments." (a) Any Lender may, in the ordinary course of
its business and in accordance with applicable law, at any time after the
execution and delivery of this Agreement and from time to time assign to any
Lender or any other Eligible Assignee (each a "Purchasing Lender") all or any
part of its Credit Exposure in amounts not less than $10,000,000. The Borrower,
the Arranger and the Lenders agree that to the extent of any assignment, the
Purchasing Lender shall be deemed to have the same rights and benefits under the
Loan Documents and the same obligation to share pursuant to Section 7.24 hereof
as it would have had if it had been a Lender which was one of the original
parties hereto. The consent of the Arranger and the Administrative Agent and,
provided no Default or Event of Default has occurred, the Borrower shall be
required prior to an assignment becoming effective, which consents will not be
unreasonably withheld, delayed or conditioned; provided that the Arranger and
the Administrative Agent shall be entitled to continue to deal solely and
directly with the assignor Lender in connection with the interests so assigned
to the Purchasing Lender unless and until such Purchasing Lender executes a
supplement to this Agreement, substantially in the form of Exhibit T hereto (a
"Form of Assignment and Assumption Agreement").
b) Upon (i) execution of a Form of Assignment and Assumption Agreement, (ii)
delivery of an executed copy thereof to the Borrower, the Arranger and the
Administrative Agent, (iii) payment by such Purchasing Lender to such transferor
Lender of an amount equal to the purchase price agreed between such transferor
Lender and such Purchasing Lender, and (iv) payment to the Administrative Agent
of an assignment fee of $2500 for each assignment by any Lender of all or any
portion of its Credit Exposure, such transferor Lender shall be released from
its obligations hereunder to the extent of such assignment and such Purchasing
Lender shall for all purposes be a Lender party to this Agreement and shall have
all the rights and obligations of a Lender under this Agreement to the same
extent as if it were an original party hereto, and no further consent or action
by the Borrower, the Lenders or the Administrative Agent shall be required. Such
Form of Assignment and Assumption Agreement shall be deemed to amend this
Agreement to the extent, and only to the extent, necessary to reflect the
addition of such Purchasing Lender as a Lender. Promptly after the consummation
of any transfer to a Purchasing Lender pursuant hereto, the transferor Lender,
the Administrative Agent and the Borrower shall make appropriate arrangements so
that a replacement Promissory Note is issued to such transferor Lender and a new
Promissory Note is issued to such Purchasing Lender, in each case in principal
amounts reflecting such transfer. The Purchasing Lender shall furnish to
Borrower and the Administrative Agent, at least 10 days prior to the date on
which the first payment to such Purchasing Lender is due, the documents
described in Section 2.17(b) hereof.
c) Commerzbank AG, New York Branch, agrees that it will not assign to a
Purchasing Lender any part of its Credit Exposure such that, after giving effect
to such assignment, Commerzbank AG, New York Branch's Percentage shall be less
than twenty five percent (25%), unless its failure to do so shall (or in
Commerzbank AG, New York Branch's reasonable judgment is likely to) constitute a
violation of any Requirement of Law. Notwithstanding the foregoing, nothing
herein shall restrict or limit Commerzbank AG, New York Branch, from selling a
participating interest in any portion, or all, of its Credit Exposure.
Section 7.19 "Withholding." Notwithstanding anything to the contrary
herein, no Participant or other assignee of all or any part of the Credit
Exposure of any Lender (each, a "Non-Party Holder"), other than a Purchasing
Lender, shall be entitled to any of the benefits of Section 2.16 hereof.
Section 7.20 "Amounts Received by the Lenders." Each Lender agrees that it
shall act as a trustee for the benefit of the other Lenders to the extent of the
respective interests of the other Lenders in the Advances with respect to all
sums of any kind paid to or received by such Lender in payment of all or a
portion of the Advances by or on behalf of the Borrower.
Section 7.21 "No Joint Venture." Neither the execution of this Agreement
nor the selling of an interest in the Advances nor any agreement to share in
profits or losses as provided herein is intended to be, nor shall it be
construed to be, the formation of a partnership or joint venture among the
parties to this Agreement.
Section 7.22 "Acknowledgment by Parties Hereto." The agreement to and
acceptance of this Agreement by the parties hereto, indicated by the execution
of this Agreement, shall evidence (a) each party's acceptance of all the terms
and conditions of this Agreement and the other Loan Documents and (b) each
party's consent to the Arranger and the Administrative Agent acting as the
contractual representatives on behalf of the Lenders with regard to all aspects
of the administration, enforcement and collection of the Advances and to all
matters pertaining to the Loan Documents as provided for herein.
Section 7.23 "Sharing of Payments." Each of the Lenders agrees that if it
should receive any amount under this Agreement or any of the other Loan
Documents (whether by voluntary payment, by realization upon security, by the
exercise of the right of banker's lien, by counterclaim or cross action, by the
enforcement of any right under the Loan Documents, or otherwise) which is
applicable to the payment of any Advance of a sum which with respect to the
related sum or sums received by the other Lenders is in a greater proportion
than the total of such Advance then owed and due to such Lender bears to the
total of such Advance then owed and due to all of the Lenders immediately prior
to such receipt, then such Lender receiving such excess payment shall purchase
for cash without recourse or warranty from the other Lenders an interest in such
Advance owing to such Lenders in such amount as shall result in a proportional
participation by all of the Lenders in such amount; provided that if all or any
portion of such excess amount is thereafter recovered from such Lender, such
purchase shall be rescinded and the purchase price restored to the extent of
such recovery, but without interest.
Section 7.24 "Limitation of Liability." No claim may be made by the
Borrower or any other Person against the Arranger, the Administrative Agent or
any Lender or any of their affiliates, directors, officers, employees, attorneys
or agent of any of such Persons for any special, indirect or consequential
damages in respect of any claim for breach of contract or any other theory of
liability arising out of or under this Article VII; and the Borrower hereby
waives, releases and agrees not to xxx upon any such claim for any such damages,
whether or not accrued and whether or not known or suspected to exist in its
favor.
ARTICLE VIII. MISCELLANEOUS
Section 8.1 "Notices." All notices, requests, and other communications to
any party hereunder shall be in writing (including bank wire, telecopy, or
similar teletransmission or writing) and shall be given to such party at its
address or telecopy number set forth on Schedule 5 annexed hereto or such other
address or telecopier number as such party may hereafter specify by notice to
the Arranger, the Administrative Agent and the Borrower. No notices, requests,
and other communications given to any Person other than the Arranger or the
Administrative Agent (including, without limitation, any Affiliate thereof)
shall be deemed to have been given to the Arranger or the Administrative Agent,
as the case may be. Each such notice, request, or other communication shall be
effective (i) when delivered personally, (ii) if given by telecopier, when such
telecopy is transmitted to the telecopier number specified in this Section 8.1,
(iii) if given by certified or registered mail, return receipt requested, 72
hours after such communication is deposited in the mails with first class
postage prepaid, addressed as aforesaid, or (iv) by Federal Express or other
recognized overnight delivery service (provided that, in either such case, such
delivery is made with a request for receipt), on the next Business Day after
such communication is deposited with such delivery service, or (v) if given by
any other means when delivered at the address specified in this Section 8.1.
Section 8.2 "Amendments, Etc." No amendment or waiver of any provision of
this Agreement or the other Loan Documents, nor consent to any departure by
either party therefrom, shall in any event be effective unless the same shall be
in writing and signed by the party or its agent, if authorized to act on its
behalf, against whom enforcement of such waiver or amendment is sought, and then
such waiver or consent shall be effective only in the specific instance and for
the specified purpose for which given. None of the foregoing shall negate or
vitiate any of the provisions of Sections 7.14, 7.15 or 7.16.
Section 8.3 "No Waiver; Remedies Cumulative." No failure or delay on the
part of the Lenders in exercising any right or remedy hereunder or under any
other Loan Document and no course of dealing between the Borrower and the
Arranger, the Administrative Agent or the Lenders shall operate as a waiver
thereof, nor shall any single or partial exercise of any right or remedy
hereunder or under any other Loan Document preclude any other or further
exercise thereof or the exercise of any other right or remedy hereunder. The
rights and remedies herein and in the other Loan Documents expressly provided
are cumulative and not exclusive of any rights or remedies that the Lenders
would otherwise have. No notice to or demand on the Borrower not required
hereunder or under the other Loan Documents in any case shall entitle the
Borrower to any other or further notice or demand in similar or other
circumstances or constitute a waiver of the rights of the Lenders to any other
or further action in any circumstances without notice or demand.
Section 8.4 "Payment of Expenses, Etc." The Borrower shall: whether or not
the transactions hereby contemplated are consummated, pay all reasonable
out-of-pocket costs and expenses of the Arranger, the Administrative Agent and
the Lenders in the administration (both before and after the execution hereof
and including advice of counsel as to the rights and duties of the Arranger, the
Administrative Agent or the Lenders) of, and in connection with the preparation,
execution, and delivery of, preservation of rights under, enforcement of, and,
after an Event of Default, refinancing, renegotiation, or restructuring of, this
Agreement and the other Loan Documents and the documents and instruments
referred to therein; any amendment, waiver, or consent relating thereto
(including, without limitation, the reasonable fees and disbursements of counsel
for the Arranger, the Administrative Agent and the Lenders);
b) to the extent permitted by applicable law, pay and hold the Arranger, the
Administrative Agent and the Lenders harmless from and against any and all
present and future stamp, recording, and other similar taxes and fees with
respect to the foregoing matters and save the Lenders harmless from and against
any and all liabilities with respect to or resulting from any delay or omission
to pay such taxes and fees; and
c) indemnify the Arranger, the Administrative Agent and the Lenders and each of
their officers, directors, employees, Affiliates, representatives, and agents
from, and hold each of them harmless against, any and all costs, losses,
liabilities, claims, damages and expenses incurred by any of them (whether or
not any of them is designated a party thereto) arising out of or by reason of
any litigation, or other proceeding related to any actual or proposed use by the
Borrower of the proceeds of any of the Advances or the Borrower entering into
and performing of this Agreement or the other Loan Documents or resulting from
the ownership of any Mortgaged Property, including, without limitation, the
reasonable fees and disbursements of counsel incurred in connection with any
such investigation, litigation, or other proceeding; provided that the Borrower
shall not be obligated to indemnify any such Person to the extent of any costs,
losses, liabilities, claims, damages, or expenses caused by the gross negligence
or willful misconduct of such Person.
If and to the extent that the obligations of the Borrower under this
Section 8.4 are unenforceable for any reason, the Borrower hereby agrees to make
the maximum contribution to the payment and satisfaction of such obligations
which is permissible under applicable law. The Borrower's obligations under this
Section 8.4 shall survive any termination of this Agreement and the payment of
the sums due hereunder and under the other Loan Documents.
Section 8.5 "Right of Setoff." Subject to the Arranger's written consent,
in addition to and not in limitation of all rights of offset that the Lenders
may have under applicable law, the Lenders shall, upon the occurrence and during
the continuance of any Event of Default and whether or not the Lenders have made
any demand or the Borrower's obligations are matured, have the right to
appropriate and apply to the payment of the Borrower's obligations hereunder and
under the other Loan Documents, all deposits (general or special, time or
demand, provisional or final) of the Borrower then or thereafter held by, and
other indebtedness or property then or thereafter owing by, the Lenders.
Section 8.6 "Benefit of Agreement." This Agreement shall be binding upon
and inure to the benefit of and be enforceable by the respective successors and
assigns of the parties hereto, provided
that the Borrower may not assign or transfer any of its interest hereunder
without the prior written consent of the Lenders.
Section 8.7 "Governing Law; Submission to Jurisdiction." This Agreement and
the rights and obligations of the parties hereunder shall be construed in
accordance with and be governed by the law (without giving effect to the
conflict of law principles thereof) of the State of New York except as otherwise
specifically provided in the Loan Documents with respect to the perfection,
priority and enforcement of liens upon real property and fixtures not located in
the State of New York.
b) Any legal action or proceeding with respect to this Agreement or the other
Loan Documents or any document related thereto may be brought in the courts of
the State of New York or of the United States of America for the Southern
District of New York, and by execution and delivery of this Agreement, the
Borrower hereby accepts for itself and in respect of its property generally and
unconditionally, the jurisdiction of the aforesaid courts. The Borrower hereby
irrevocably waives any objection, including, without limitation, any objection
to the laying of venue or based on the grounds of forum non conveniens, which it
may now or hereafter have to the bringing of any such action or proceeding in
such respective jurisdictions. The Borrower agrees that any process in any
proceeding in any such court may be served on the Borrower through the United
States mails in accordance with Section 8.1.
c) WAIVER OF JURY TRIAL. TO THE EXTENT PERMITTED BY APPLICABLE LAW, EACH OF THE
PARTIES HERETO HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES TRIAL BY JURY IN
ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR THE PROMISSORY NOTE
OR ANY OTHER LOAN DOCUMENTS AND FROM ANY COUNTERCLAIM THEREIN.
d) Nothing herein shall affect the right of the Lenders to serve process in any
other manner permitted by law or to commence legal proceedings or otherwise
proceed against the Borrower in any other jurisdiction.
Section 8.8 "Counterparts." This Agreement may be executed in any number of
counterparts and by the different parties hereto on separate counterparts, each
of which when executed and delivered shall be an original, but all of which
shall together constitute one and the same instrument.
Section 8.9 "Headings Descriptive." The headings contained in this
Agreement are for convenience only and shall not in any way affect the meaning
or construction of any provision of this Agreement.
. Section 8.10 Entire Agreement
(a) The provisions:
(i) the letter agreements among the Borrower, the Arranger
and Administrative Agent dated as of March 18, 1999, March 15,
1999, February 4, 1999, January 25, 1999, and September 3, 1998,
and
(ii) the letter agreement dated as of August 25, 1997 among
the Borrower, Commerzbank AG, Los Angeles Branch and Arranger,
each of which letter agreement is attached hereto as Exhibit Q shall survive the
execution of this Agreement and shall be deemed incorporated herein. The letter
agreement referred to in clause (i) above provides, inter alia, that Borrower
may effect a single issuance of convertible preferred securities with gross
proceeds not to exceed $250,000,000, provided (x) the first $200,000,000 or the
lesser amount raised of net proceeds of such issuance is used solely to repay
the sums due under the Bridge Facility, and (y) the Bridge Facility is repaid on
or before April 23, 1999, even if such net proceeds are insufficient for the
purpose thereof. The letter agreement further provides that Security Capital
Group may fund its obligations under a certain Subscription Agreement by
purchasing convertible subordinated debentures issued by the Borrower and that
such debentures may be refinanced with the proceeds of an offering of Borrower's
common, but not preferred, stock.
(b) Except as set forth in subsection (a) above, this Agreement and the other
Loan Documents constitute the entire agreement of the parties with respect to
the subject matter hereof and thereof, and all prior discussions, negotiations,
term sheets, commitment letters, waiver letters, agreements, letter agreements,
correspondence and document drafts with respect to such matters are merged
herein and therein. Neither the Lenders nor any employee of the Lenders has been
authorized to make any representation or agreement upon which the Borrower or
its Affiliates may rely unless such matter is set forth in this Agreement or the
other Loan Documents.
Section 8.11 "Release of Certain Mortgaged Property." Arranger agrees that,
upon Borrower's request (a "Release Request") to the Arranger and the
Administrative Agent, Arranger will deliver to Borrower a form of release, duly
executed and acknowledged by the Arranger, releasing from the lien of the
applicable Mortgage (a "Release"), any real property constituting a portion of a
Mortgaged Property (a "Release Parcel") but only if and on the condition that:
(i) each Release Request shall be in writing, shall contain all information
necessary for the Administrative Agent to cause a Release in recordable form to
be prepared and shall be given at least ten (10) Business Days prior to the
requested date of such Release;
(ii) each Release Request shall constitute Borrower's representation and
warranty that, and shall be accompanied by evidence demonstrating to the
Administrative Agent's satisfaction that (a) no portion of the extended stay
facility and related ancillary facilities constructed (or to be constructed) on
the Mortgaged Property from which the Release Parcel is to be Released is (or
will be) located on such Release Parcel, (b) the requested Release shall not
cause or result in the remaining Mortgaged Property and the existence and use of
the extended stay facility and related ancillary facilities constructed (or to
be constructed) thereon to fail to comply with any Use Requirements or
Requirements of Law, and (c) no portion of the Total Costs allocated in a manner
satisfactory to the Arranger and the Administrative Agent to the Release Parcel
is included in the computation of the Maximum Availability Amount;
(iii) as of the date of such Release Request, and as of the effective date
of such Release (before as well as after giving effect to such Release), no
Default or Event of Default shall have occurred and be continuing, and each
Release Request shall constitute Borrower's representation and warranty that the
foregoing is true, complete and accurate;
(iv) before as well as after giving effect to such Release, subject to the
provisions of Section 5.5 hereof, all representations and warranties contained
herein (except representations and warranties expressly provided herein as being
made only as of the Effective Date) shall be true and correct in all material
respects with the same effect as though such representations and warranties had
been made on and as of the date of such Release;
(v) Borrower executes, acknowledges and delivers to the Administrative
Agent, at Borrower's expense, any and all documents and instruments reasonably
required by the Administrative Agent to preserve and maintain Arranger's, the
Administrative Agent's and Lenders' rights, upon and following any such Release,
under and with respect to the Loan Documents; and
(vi) (1) The Administrative Agent shall have received payment of all costs
and expenses (other than the legal fees described in the following clause (2) of
this subparagraph) incurred by Arranger and the Administrative Agent in
connection with such Release, including, but not limited to, all title insurance
premiums arising as a result of endorsements required by Arranger and the
Administrative Agent in connection with such Release, and (2) receipt of a
Release Request for each Release shall constitute Borrower's agreement and
covenant to pay to the Administrative Agent, promptly upon demand (together with
a reasonably detailed invoice(s) in respect thereof), all reasonable legal fees
and expenses arising in connection with the preparation, execution, delivery and
review of each Release, the documents and instruments described in this Section,
and all other documents relating to, and rendering at the request of the
Administrative Agent all advice respecting, each Release.
In the event that all of the foregoing conditions to a Release have been
satisfied, then, at Borrower's request, the Administrative Agent shall furnish
such Release for execution by the Arranger and for recordation to the title
company insuring the Lenders' interest in the Mortgaged Property affected by
such Release or as otherwise designated by Borrower.
Section 8.12 "Subordination of Certain Mortgaged Property." The Arranger
and the Administrative Agent agree that, upon Borrower's request (a
"Subordination Request"), it will deliver to Borrower a form of subordination,
duly executed and acknowledged by the Arranger, subordinating the lien of the
applicable Mortgage (a "Subordination"), to any Development Encumbrances on a
Mortgaged Property, but only if and on the condition that:
(i) each Subordination Request shall be in writing, shall contain all
information necessary for the Administrative Agent to cause a Subordination in
recordable form to be prepared and shall be given at least ten (10) Business
Days prior to the requested date of such Subordination;
(ii) The Administrative Agent shall have received an endorsement to the
title policy referred to in Section 3.3(a)(iii) with respect to the applicable
Mortgaged Property indicating that since the date of the last endorsement to
such policy there has been no change in the state of title not theretofore
approved by the Administrative Agent, providing with respect to such Development
Encumbrances a so-called "comprehensive endorsement" (or equivalent), to the
extent available in the jurisdiction in which such Mortgaged Property is
located, and such other affirmative insurance as the Administrative Agent shall
reasonably require, which endorsement shall have the effect of redating the
title policy to the date of recordation of, and insuring the lien of the
Mortgage as subordinated pursuant to, the Subordination;
(iii) as of the date of such Subordination Request, and as of the effective
date of such Subordination (before as well as after giving effect to such
Subordination), no Default or Event of Default shall have occurred and be
continuing, and each Subordination Request shall constitute Borrower's
representation and warranty that the foregoing is true, complete and accurate;
(iv) before as well as after giving effect to such Subordination, subject
to the provisions of Section 5.5 hereof, all representations and warranties
contained herein (except representations and warranties expressly provided
herein as being made only as of the Effective Date) shall be true and correct in
all material respects with the same effect as though such representations and
warranties had been made on and as of the date of such Subordination;
(v) Borrower executes, acknowledges and delivers to the Administrative
Agent, at Borrower's expense, any and all documents and instruments reasonably
required by the Administrative Agent to preserve and maintain the Administrative
Agent's and Lenders' rights, upon and following any such Subordination, under
and with respect to the Loan Documents; and
(vi) (1) The Administrative Agent shall have received payment of all costs
and expenses (other than the legal fees described in the following clause (2) of
this subparagraph) incurred by the Arranger and the Administrative Agent in
connection with such Subordination, including, but not limited to, all title
insurance premiums arising as a result of endorsements required by the
Administrative Agent in connection with such Subordination, and (2) receipt of a
Subordination Request for each Subordination shall constitute Borrower's
agreement and covenant to pay to the Administrative Agent, promptly upon demand
(together with a reasonably detailed invoice(s) in respect thereof), all
reasonable legal fees and expenses arising in connection with the preparation,
execution, delivery and review of each Subordination, the documents and
instruments described in this Section, and all other documents relating to, and
rendering at the request of the Administrative Agent all advice respecting, each
Subordination.
Section 8.13 "Confidentiality." The Administrative Agent, the Arranger and
the other Lenders agree that, unless otherwise agreed to in writing by us,
except as required by law or regulation or by legal process, to keep all
Non-public Information delivered by the Borrower to the Administrative Agent or
the Lenders confidential and not to disclose or reveal any Non-public
Information to any person, other than those employed or retained by the
Administrative Agent or the Lenders (including, without limitation, employees,
counsel, accountants, engineers, advisers, experts and consultants to the
Administrative Agent or the Lenders). Except as provided for in the next
sentence, in the event that the Administrative Agent or any Lender is requested
pursuant to, or required by, applicable law or regulation or by legal process to
disclose any Non-public Information, the Administrative Agent or such Lender
agrees that it shall provide the Borrower with prompt notice of such request(s)
and, unless required by law or regulation to disclose sooner, shall wait at
least forty eight (48) hours before disclosing such Non-public information.
Notwithstanding the foregoing or anything else to the contrary herein contained
or contained in any of the other Loan Documents, the provisions of this
Section 8.13 shall not apply to (a) the disclosure or sharing of any
Non-public information among the Administrative Agent and the Lenders, (b) the
disclosure by the Administrative Agent or any Lender of any Non-public
information to federal, state and local bank regulators or other governmental
agencies to the extent required or requested to do so (such disclosure shall
not, however, in and of itself be deemed to render such information public), and
(c) the Administrative Agent or any Lender may, in connection with any
assignment or participation or proposed assignment or participation, disclose to
the assignee or participant or proposed assignee or participant under a
requirement of confidentiality, any Non-public information relating to the
Borrower, the Collateral, the Borrower's assets, properties or financial
condition or information otherwise furnished to the Administrative Agent or the
Lenders by the Borrower.
IN WITNESS WHEREOF, the parties hereto have caused their duly
authorized officers to execute and deliver this Agreement as of the date first
written above.
HOMESTEAD VILLAGE INCORPORATED
By
Name:
Title:
COMMERZBANK AG, New York Branch,
as Arranger
By
Name:
Title:
And by
Name:
Title:
COMMERZBANK AG, Los Angeles Branch,
as a lender
By
Name:
Title:
And by
Name:
Title:
XXXXX FARGO BANK, NATIONAL ASSOCIATION,
as a lender and the Administrative Agent
By
Name:
Title:
