EXHIBIT 10.2(a)
AMENDED AND RESTATED
CREDIT AGREEMENT
dated as of
August 4, 1999
between
RECKSON SERVICE INDUSTRIES, INC.,
as Borrower
and
RECKSON OPERATING PARTNERSHIP, L.P.,
as Lender
relating to the operations of
RECKSON STRATEGIC VENTURE PARTNERS, LLC
Table of Contents
Page
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ARTICLE I.
DEFINITIONS
Section 1.1 Definitions................................................1
(a) Terms Generally...................................1
(b) Other Terms.......................................1
ARTICLE II.
THE REVOLVING CREDIT FACILITY
Section 2.1 Commitment and Loans.......................................7
Section 2.2 Borrowing Procedure........................................7
Section 2.3 Termination and Reduction of Commitment....................7
Section 2.4 Repayment..................................................8
Section 2.5 Optional Prepayment........................................8
ARTICLE III.
INTEREST AND FEES
Section 3.1 Interest Rate..............................................8
Section 3.2 Interest on Overdue Amounts................................8
Section 3.3 Maximum Interest Rate......................................9
ARTICLE IV.
DISBURSEMENT AND PAYMENT
Section 4.1 Method and Time of Payments................................9
Section 4.2 Compensation for Losses....................................0
Section 4.3 Withholding and Additional Costs...........................0
(a) Withholding.......................................0
(b) Additional Costs..................................0
(c) Certificate, Etc..................................1
Section 4.4 Expenses; Indemnity........................................1
Section 4.5 Survival...................................................2
ARTICLE V.
REPRESENTATIONS AND WARRANTIES
Section 5.1 Representations and Warranties.............................2
(a) Good Standing and Power...........................2
(b) Authority.........................................2
(c) Authorizations....................................2
(d) Binding Obligation................................2
(e) Litigation........................................3
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(f) No Conflicts......................................3
(g) Taxes.............................................3
(h) Properties........................................3
(i) Compliance with Laws and Charter Documents........3
(j) No Material Adverse Effect........................3
(k) Disclosure........................................4
Section 5.2 Survival...................................................4
ARTICLE VI.
CONDITIONS PRECEDENT
Section 6.1 Conditions to the Availability of the Commitment and Letters
of Credit................................................14
(a) This Agreement....................................14
(b) Certificate of Incorporation and By-Laws..........14
(c) Representations and Warranties....................14
(d) Other Documents...................................15
Section 6.2 Conditions to All Loans and Letters of Credit..............15
(a) Borrowing Request.................................15
(b) No Default........................................15
(c) Debt-to-Equity Ratio..............................15
(d) Representations and Warranties; Covenants.........15
(e) REIT Status of Reckson............................15
(f) Certain Loans Subject to Reckson's Approval.......15
Section 6.3 Satisfaction of Conditions Precedent.......................15
ARTICLE VII.
COVENANTS
Section 7.1 Affirmative Covenants......................................16
(a) Financial Statements; Compliance Certificates.....16
(b) Existence.........................................16
(c) Compliance with Law and Agreements................16
(d) Authorizations....................................17
(e) Inspection........................................17
(f) Maintenance of Records............................17
(g) Notice of Defaults and Adverse Developments.......17
Section 7.2 Negative Covenants.........................................17
(a) Mergers, Consolidations and Sales of Assets.......17
(b) Liens.............................................17
(c) Indebtedness......................................18
(d) Dividends.........................................18
(e) Certain Amendments................................18
ARTICLE VIII.
EVENTS OF DEFAULT
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Section 8.1 Events of Default..........................................18
ARTICLE IX.
EVIDENCE OF LOANS; TRANSFERS
Section 9.1 Evidence of Loans and Letters of Credit....................20
ARTICLE X.
LETTERS OF CREDIT
Section 10.1 Letters of Credit..........................................20
(a) Types and Amounts.................................20
(b) Conditions........................................21
(c) Issuance of Letters of Credit.....................21
(d) Reimbursement Obligations; Duties of the Lender...22
(e) Payment of Reimbursement Obligations..............22
(f) Letter of Credit Fee Charges......................22
(g) Letter of Credit Reporting Requirements...........23
(h) Indemnification; Exoneration......................23
ARTICLE XI.
MISCELLANEOUS
Section 11.1 Applicable Law.............................................24
Section 11.2 Waiver of Jury.............................................24
Section 11.3 Jurisdiction and Venue; Service of Process.................24
Section 11.4 Confidentiality............................................24
Section 11.5 Amendments and Waivers.....................................25
Section 11.6 Cumulative Rights; No Waiver...............................25
Section 11.7 Notices....................................................25
Section 11.8 Certain Acknowledgments....................................26
Section 11.9 Separability...............................................26
Section 11.10 Parties in Interest........................................26
Section 11.11 Execution in Counterparts..................................26
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AMENDED AND RESTATED CREDIT AGREEMENT, dated as of August 4,
1999, between Reckson Service Industries, Inc., a Delaware corporation, and
Reckson Operating Partnership, L.P., a Delaware limited partnership, relating to
the operations of Reckson Strategic Venture Partners, LLC ("RSVP").
W I T N E S S E T H:
WHEREAS, the Borrower has requested the Lender to commit to
lend to the Borrower up to $100 million on a revolving basis for investment in
RSVP;
WHEREAS, the Lender is willing to make revolving credit loans
on the terms and conditions provided herein; and
WHEREAS, the parties hereto desire to amend and restate their
credit agreement dated June 15, 1998 to allow for the issuance of one or more
Letters of Credit in favor of the Lender for the benefit of the Borrower;
NOW, THEREFORE, the parties agree as follows:
DEFINITIONS
Section 1.1 Definitions.
(a) Terms Genezrally. The definitions ascribed to terms in this
Agreement apply equally to both the singular and plural forms of such terms.
Whenever the context may require, any pronoun shall be deemed to include the
corresponding masculine, feminine and neuter forms. The words "include",
"includes" and "including" shall be interpreted as if followed by the phrase
"without limitation". The phrase "individually or in the aggregate" shall be
deemed general in scope and not to refer to any specific Section or clause of
this Agreement. All references herein to Articles, Sections, Exhibits and
Schedules shall be deemed references to Articles and Sections of, and Exhibits
and Schedules to, this Agreement unless the context shall otherwise require. The
table of contents, headings and captions herein shall not be given effect in
interpreting or construing the provisions of this Agreement. Except as otherwise
expressly provided herein, all references to "dollars" or "$" shall be deemed
references to the lawful money of the United States of America.
(b) Other Terms. The following terms have the meanings ascribed to
them below or in the Sections of this Agreement
indicated below:
"Adjusted Indebtedness" means, with respect to the Borrower,
the Borrower's Indebtedness determined without regard for any amounts
described in clause (viii) of the definition of "Indebtedness."
"Affiliate" means, with respect to any Person, any other
Person that controls, is controlled by, or is under common control
with, such Person.
"Agreement" means this credit agreement, as it may be amended,
modified or supplemented from time to time.
"Available Commitment" means, on any day, an amount equal to
(i) the Commitment on such day minus (ii) the aggregate outstanding
principal amount of Loans on such day.
"Borrower" means Reckson Service Industries, Inc., a Delaware
corporation.
"Borrowing Date" means, with respect to any Loan or Letter of
Credit, the Business Day set forth in the relevant Borrowing Request as
the date upon which the Borrower desires to borrow such Loan or Letter
of Credit;
"Borrowing Request" means a request by the Borrower for a Loan
or a Letter of Credit, which shall specify (i) the requested Borrowing
Date and (ii) the aggregate amount of such Loan or Letter of Credit.
"Business Day" means any day that is not a Saturday, Sunday or
other day on which commercial banks in The City of New York are
authorized by law to close.
"Capital Lease Obligations" means, with respect to any Person,
the obligation of such Person to pay rent or other amounts under any
lease with respect to any property (whether real, personal or mixed)
acquired or leased by such Person that is required to be accounted for
as a liability on a consolidated balance sheet of such Person.
"Commercial Letter of Credit" means any documentary letter of
credit issued by an Issuing Bank pursuant to Section 10.1 for the
account of the Lender on behalf of the Borrower.
"Commitment" means $100 million, less (i) the amount of loans
made by the Lender to the Borrower for the funding of investments made
by RSVP prior to the spin-off distribution of shares of common stock of
the Borrower by Reckson and (ii) the amount of any investments made by
the Lender in joint venture investments made with RSVP, and as such
amount may be reduced from time to time pursuant to Section 2.3.
"Commitment Termination Date" means the earlier to occur of
(i) June 15, 2003 and (ii) the date, if any, on which the Commitment is
terminated.
"Confidential Information" means information delivered to the
Lender by or on behalf of the Borrower in connection with the
transactions contemplated by or otherwise pursuant to this Agreement
that is confidential or proprietary in nature at the time it is so
delivered or information obtained by the Lender in the course of its
review of the books or records of the Borrower contemplated herein;
provided that such term shall not include information W that was
publicly known or otherwise known to the Lender prior
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to the time of such disclosure, (ii) that subsequently becomes
publicly known through no act or omission by the Lender or any Person
acting on the Lender's behalf, (iii) that otherwise becomes known to
the Lender other than through disclosure by the Borrower or (iv) that
constitutes financial information delivered to the Lender that is
otherwise publicly available.
"Credit Obligations" means, at any particular time, the sum of
(i) the outstanding principal amount of the Loans at such time, plus
(ii) the Letter of Credit Obligations at such time.
"Default" means any event or circumstance which, with the
giving of notice or the passage of time, or both, would be an Event of
Default.
"EBITDA" means for any fiscal period, the Consolidated Net
Income or Consolidated Net Loss, as the case may be, for such fiscal
period, after restoring thereto amounts deducted for (a) extraordinary
losses (or deducting therefrom any amounts included therein on account
of extraordinary gains) and special charges, (b) depreciation and
amortization (including write-offs or write-downs) and special charges,
(c) the amount of interest expense of the Borrower and its
Subsidiaries, if any, determined on a consolidated basis in accordance
with GAAP, for such period on the aggregate principal amount of their
consolidated indebtedness, (d) the amount of tax expense of the
Borrower and its Subsidiaries, if any, determined on a consolidated
basis in accordance with GAAP, for such period and (e) the aggregate
amount of fixed and contingent rentals payable by the Borrower and its
Subsidiaries, if any, determined on a consolidated basis in accordance
with GAAP, for such period with respect to leases of real and personal
property.
"Effective Date" has the meaning assigned to such term in
Section 6.1.
"Event of Default" has the meaning assigned to such term in
Section 8.1.
"GAAP" means generally accepted accounting principles, as set
forth in the opinions and pronouncements of the Accounting Principles
Board of the American Institute of Certified Public Accountants and
statements and pronouncements of the Financial Accounting Standards
Board or in such other statements by such other entities as may be
approved by a significant segment of the accounting profession of the
United States of America.
"Governmental Authority" means any nation or government, any
state or other political subdivision thereof and any entity exercising
executive, legislative, judicial, regulatory or administrative
functions of or pertaining to government.
"Guaranty" means, with respect to any Person, any obligation,
contingent or otherwise, of such Person guaranteeing or having the
economic effect of guaranteeing any Indebtedness of any other Person
(the "primary obligor") in any manner, whether directly or indirectly,
and including any obligation of such Person (i) to purchase or pay
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(or advance or supply funds for the purchase or payment of) such
Indebtedness or to purchase (or to advance or supply funds for the
purchase of) any security for the payment of such Indebtedness, (ii)
to purchase property, securities or services for the purpose of
assuring the holder of such Indebtedness of the payment of such
Indebtedness or (iii) to maintain working capital, equity capital or
the financial condition or liquidity of the primary obligor so as to
enable the primary obligor to pay such Indebtedness. The term
"Guaranteed" shall have the corresponding meaning.
"Indebtedness" means, with respect to any Person, (i) all
obligations of such Person for borrowed money or for the deferred
purchase price of property or services (including all obligations,
contingent or otherwise, of such Person in connection with letters of
credit, bankers' acceptances, interest rate swap agreements, interest
rate cap agreements or other similar instruments, including currency
swaps) other than indebtedness to trade creditors and service providers
incurred in the ordinary course of business and payable on usual and
customary terms, (ii) all obligations of such Person evidenced by
bonds, notes, debentures or other similar instruments, (iii) all
indebtedness created or arising under any conditional sale or other
title retention agreement with respect to property acquired by such
Person (even though the remedies available to the seller or lender
under such agreement are limited to repossession or sale of such
property), (iv) all Capital Lease Obligations of such Person, (v) all
obligations of the types described in clauses (i), (ii), (iii) or (iv)
above secured by (or for which the obligee has an existing right,
contingent or otherwise, to be secured by) any Lien upon or in any
property (including accounts, contract rights and other intangibles)
owned by such Person, even though such Person has not assumed or become
liable for the payment of such Indebtedness, (vi) all preferred stock
issued by such Person which is redeemable, prior to full satisfaction
of the Borrower's obligations under this Agreement (including repayment
in full of the Loans and all interest accrued thereon), other than at
the option of such Person, valued at the greater of its voluntary or
involuntary liquidation preference plus accrued and unpaid dividends,
(vii) all Indebtedness of others Guaranteed by such Person and (viii)
all Indebtedness of any partnership of which such Person is a general
partner.
"Indemnitee" has the meaning assigned to such term in Section
4.4(b).
"Intercompany Agreement" means the intercompany agreement,
dated as of the date hereof, by and between the Borrower and the
Lender.
"Interest Period" means, with respect to any Loan, each
three-month period commencing on the date such Loan is made or at the
end of the preceding Interest Period, as the case may be; provided,
however, that:
(i) any Interest Period that would otherwise end on a day that
is not a Business Day shall be extended to the next Business Day,
unless such Business Day falls in another calendar month, in which case
such Interest Period shall end on the next preceding Business Day;
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(ii) any Interest Period that 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 (iii) below, end on the last Business
Day of a calendar month; and
(iii) any Interest Period that would otherwise end after the
Commitment Termination Date then in effect shall end on such Commitment
Termination Date.
"Issuing Bank" means The Chase Manhattan Bank or such other
banking institution selected by the parties hereto to issue a Letter of
Credit pursuant to Section 10.1(c)(ii) hereof.
"Lender" means Reckson Operating Partnership, L.P., a Delaware
limited partnership.
"Letter of Credit" means any Commercial Letter of Credit or
Standby Letter of Credit.
"Letter of Credit Fee" has the meaning set forth in Section
10.1(f).
"Letter of Credit Obligations" means, at any particular time,
the sum of (i) all outstanding Reimbursement Obligations, (ii) the
aggregate undrawn face amount of all outstanding Letters of Credit, and
(iii) the aggregate face amount of all Letters of Credit requested by
the Lender but not yet issued.
"Letter of Credit Reimbursement Agreement" means, with respect
to a Letter of Credit, such form of application therefor and form of
reimbursement agreement therefor (whether in a single or several
documents, taken together) as an Issuing Bank may employ in the
ordinary course of business for its own account, with such
modifications thereto as may be agreed upon by such Issuing Bank and
the Lender and as are not materially adverse (in the judgment of such
Issuing Bank) to the interests of the Lender; provided, however, in the
event of any conflict between the terms of any Letter of Credit
Reimbursement Agreement and this Agreement, the terms of this Agreement
shall control.
"Lien" means, with respect to any asset of a Person, (i) any
mortgage, deed of trust, lien, pledge, encumbrance, charge or security
interest in or on such asset, (ii) the interest of a vendor or lessor
under any conditional sale agreement, capital lease or title retention
agreement relating to such asset, and (iii) in the case of securities,
any purchase option, call or similar right of any other Person with
respect to such securities.
"Loans" has the meaning assigned to such term in Section 2.1.
"Material Adverse Effect" means any material and adverse
effect on (i) the consolidated business, properties, condition
(financial or otherwise) or operations, present or prospective, of the
Borrower and its Subsidiaries, (ii) the ability of the Borrower timely
to perform any of its material obligations, or of the Lender to
exercise
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any remedy, under this Agreement or (iii) the legality, validity,
binding nature or enforceability of this Agreement.
"Net Assets" means, with respect to the Borrower, the greater
of (i) the sum of the Borrower's paid-in capital and retained earnings
or (ii) the excess of the Value of all of the Borrower's assets of any
kind over the Borrower's Adjusted Indebtedness.
"Permitted Liens" means, collectively, the following: (i)
Liens expressly approved by the Lender, which approval shall not be
unreasonably withheld; (ii) Liens imposed by any Governmental Authority
for taxes, assessments or charges not yet due or that are being
contested in good faith by appropriate proceedings and for which
adequate reserves are being maintained (in accordance with GAAP); and
(iii) Liens existing on the date hereof.
"Person" means any individual, sole proprietorship,
partnership, joint venture, trust, unincorporated organization,
association, corporation, institution, public benefit corporation,
entity or government (whether Federal, state, county, city, municipal
or otherwise, including any instrumentality, division, agency, body or
department thereof).
"Prime Rate" means the prime rate (or if a range is given, the
highest prime rate) listed under "Money Rates" in The Wall Street
Journal for such date or, if The Wall Street Journal is not published
on such date, then in The Wall Street Journal most recently published.
"Reckson" means Reckson Associates Realty Corp., a Maryland
corporation.
"Reimbursement Obligations" means the aggregate non-contingent
reimbursement or repayment obligations of the Borrower with respect to
amounts drawn under Letters of Credit.
"Responsible Officer" means the chief executive officer,
president, chief financial officer, chief accounting officer, treasurer
or any vice president, senior vice president or executive vice
president of the General Partner.
"RSI Facility Agreement" means the credit agreement dated the
date hereof between Borrower and Lender in respect of the operations of
Reckson Service Industries, Inc.
"RSVP Platform" means a particular real estate market sector
in which RSVP invests.
"SEC" means the Securities and Exchange Commission (or any
successor Governmental Authority).
"Standby Letter of Credit" means any Letter of Credit issued
by the Issuing Bank pursuant to Section 10.1 for the account of the
Lender, which is not a Commercial Letter of Credit.
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"Subsidiary" means, at any time and with respect to any
Person, any other Person the shares of stock or other ownership
interests of which having ordinary voting power to elect a majority of
the board of directors or with respect to other matters of such Person
are at the time owned, or the management or policies of which is
otherwise at the time controlled, directly or indirectly through one or
more intermediaries (including other Subsidiaries) or both, by such
first Person. Unless otherwise qualified or the context indicates
clearly to the contrary, all references to a "Subsidiary" or
"Subsidiaries" in this Agreement refer to a Subsidiary or Subsidiaries
of the Borrower.
"Taxes" has the meaning assigned to such term in Section
4.3(a).
"Value" means, with respect to any asset owned by the
Borrower, the present value of the net cash flow reasonably projected
by the Borrower to be received with respect to its ownership of such
assets, discounted at an interest rate that the Borrower reasonably
determines appropriate given the risks associated with such asset and
such projected net cash flow, but in no event at an interest rate lower
than 2% above the Prime Rate in effect at the time that the
determination of Value is made.
ARTICLE II
THE REVOLVING CREDIT FACILITY
Section 2.1 Commitment and Loans. Until the Commitment Termination Date,
subject to the terms and conditions of this Agreement, the Lender agrees to make
revolving credit loans (collectively, "Loans") in dollars to the Borrower in an
aggregate principal amount at any one time outstanding, and taking into account
any Letters of Credit issued pursuant to the terms of Article X, not to exceed
the Commitment.
Section 2.2 Borrowing Procedure. In order to borrow a Loan, the Borrower
shall give a Borrowing Request to the Lender, by telephone, telex or telecopy or
in writing, not later than 10:30 A.M., New York time, on the third Business Day
before the Borrowing Date (or such later time or date as the Lender may in its
sole discretion permit). (If any Borrowing Request is made otherwise than in
writing, Borrower shall promptly confirm such Borrowing Request in writing.)
Subject to satisfaction, or waiver by the Lender, of each of the applicable
conditions precedent contained in Article VI, on the Borrowing Date the Lender
shall make available, in immediately available funds, to the Borrower the amount
of the requested Loan.
Section 2.3 Termination and Reduction of Commitment. The Borrower may
terminate the Commitment, or reduce the amount thereof, by giving written notice
to the Lender, not later than 5:00 P.M., New York time, on the fifth Business
Day prior to the date of termination or reduction (or such later time or date as
the Lender may in its sole discretion permit).
Section 2.4 Repayment. Loans shall be repaid, together with all accrued and
unpaid interest thereon, on the Commitment Termination Date.
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Section 2.5 Optional Prepayment. The Borrower may prepay Loans by giving
notice (specifying the Loans to be prepaid in whole or in part, the principal
amount thereof to be prepaid and the date of prepayment) to the Lender, by
telephone, telex, telecopy or in writing not later than 12:00 noon, New York
time, on the fourth Business Day preceding the proposed date of prepayment (or
such later time or date as the Lender may in its sole discretion permit). (If
any such prepayment notice is made otherwise than in writing, Borrower shall
promptly confirm such notice in writing.) Each such prepayment shall be at the
aggregate principal amount of the principal being prepaid, together with accrued
interest on the principal being prepaid to the date of prepayment and the
amounts required by Section 4.3. Subject to the terms and conditions of this
Agreement, prepaid Loans may be reborrowed.
ARTICLE III.
INTEREST AND FEES
Section 3.1 Interest Rate. Each Loan shall bear interest from the date made
until the date repaid, payable in arrears, with respect to Interest Periods of
three months or less, on the last day of such Interest Period, and with respect
to Interest Periods longer than three months, on the day which is three months
after the commencement of such Interest Period and on the last day of such
Interest Period, at a rate per annum equal to the greater of (i) the sum of (x)
2% and (y) the Prime Rate for the applicable Interest Period and (ii) 12%. With
respect to each Loan outstanding for one year or longer, such 12% rate shall
increase to 12.48%, 12.98%, 13.50% and 14.04% as of the anniversary of the
making of such Loan, for the second, third, fourth and fifth years that such
Loan is outstanding, respectively. Notwithstanding the foregoing, if the amount
of interest to be paid by the Borrower to the Lender exceeds the amount of
EBITDA of the Borrower for the immediately preceding calendar quarter (ending
the last day of September, December, March, or June), the Borrower shall not be
obligated to repay the amount of interest in excess of EBITDA of the Borrower
for such period. Any such amount of unpaid interest shall be added to principal
and shall accrue interests thereon. Payments under the Notes shall be applied
first to any fees, costs or expenses due under the Notes or hereunder, then to
interest, and then to principal. Notwithstanding any other provision of this
Agreement, all outstanding principal and interest of the Loan and all other
amounts payable hereunder, if not sooner paid, shall be due and payable on the
Commitment Termination Date.
Section 3.2 Interest on Overdue Amounts. All overdue amounts (including
principal, interest and fees) hereunder, and, during the continuance of any
Event of Default that shall have occurred, each Loan, shall bear interest,
payable on demand, at a rate per annum equal to the greater of (i) the sum of
(x) 3% and (y) Prime Rate for the applicable Interest Period and (ii) 13%. With
respect to each Loan outstanding for one year or longer, such 13% rate shall
increase to 13.48%, 13.98%, 14.50% and 15.04% as of the anniversary of the
making of such Loan for the second, third, fourth and fifth years that such Loan
is outstanding, respectively.
Section 3.3 Maximum Interest Rate. (a) Nothing in this Agreement shall
require the Borrower to pay interest at a rate exceeding the maximum rate
permitted by applicable law. Neither this Section nor Section 11.1 is intended
to limit the rate of interest payable for the
8
account of the Lender to the maximum rate permitted by the laws of the State of
New York (or any other applicable law) if a higher rate is permitted with
respect to the Lender by supervening provisions of U.S. Federal law.
(b) If the amount of interest payable for the account of the Lender
on any interest payment date in respect of the immediately preceding interest
computation period, computed pursuant to this Article III, would exceed the
maximum amount permitted by applicable law to be charged by the Lender, the
amount of interest payable for its account on such interest payment date shall
automatically be reduced to such maximum permissible amount.
(c) If the amount of interest payable for the account of the Lender
in respect of any interest computation period is reduced pursuant to Section
3.3(b) and the amount of interest payable for its account in respect of any
subsequent interest computation period would be less than the maximum amount
permitted by law to be charged by the Lender, then the amount of interest
payable for its account in respect of such subsequent interest computation
period shall be automatically increased to such maximum permissible amount;
provided that at no time shall the aggregate amount by which interest paid for
the account of the Lender has been increased pursuant to this Section 3.3(c)
exceed the aggregate amount by which interest paid for its account has
theretofore been reduced pursuant to Section 3.3(b).
ARTICLE IV.
DISBURSEMENT AND PAYMENT
Section 4.1 Method and Time of Payments.
(a) All payments by the Borrower hereunder shall be made without
setoff or counterclaim to the Lender, for its account, in dollars and in
immediately available funds to the account of the Lender theretofore designated
in writing to the Borrower not later than 12:00 noon, New York time, on the date
when due or, in the case of payments pursuant to Sections 4.3 and 4. 4 or
payments otherwise specified as payable upon demand, forthwith upon written
demand therefor.
(b) Whenever any payment from the Borrower shall be due on a day
that is not a Business Day, the date of payment thereof shall be extended to the
next succeeding Business Day. If the date for any payment of principal is
extended by operation of law or otherwise, interest thereon shall be payable for
such extended time.
Section 4.2 Compensation for Losses. 1. If (i) the Borrower prepays
Loans, (ii) the Borrower revokes any Borrowing Request or (iii) Loans (or
portions thereof) shall become or be declared to be due prior to the scheduled
maturity thereof, then the Borrower shall pay to the Lender an amount that will
compensate the Lender for any loss (other than lost profit) or premium or
penalty incurred by the Lender as a result of such prepayment, declaration or
revocation in respect of funds obtained for the purpose of making or maintaining
the Lender's Loans, or any portion thereof. Such compensation shall include an
amount equal to the excess, if any, of (i) the amount of interest that would
have accrued on the amount so paid or prepaid, or
9
not borrowed, for the period from the date of such payment or prepayment or
failure to borrow to the last day of such Interest Period (or, in the case of a
failure to borrow, the Interest Period that would have commenced on the expected
Borrowing Date) in each case at the applicable rate of interest for such Loan
over (ii) the amount of interest (as reasonably determined by the Lender) that
would have accrued on such amount were it on deposit for a comparable period
with leading banks in the London interbank market.
(b) If requested by the Borrower, in connection with a payment due
pursuant to this Section 4.2, the Lender shall provide to the Borrower a
certificate setting forth in reasonable detail the amount required to be paid by
the Borrower to the Lender and the computations made by the Lender to determine
such amount. In the absence of manifest error, such certificate shall be
conclusive as to the amount required to be paid.
Section 4.3 Withholding and Additional Costs.
(a) Withholding. All payments under this Agreement (including
payments of principal and interest) shall be payable to the Lender free and
clear of any and all present and future taxes, levies, imposts, duties,
deductions, withholdings, fees, liabilities and similar charges (collectively,
"Taxes"). If any Taxes are required to be withheld or deducted from any amount
payable under this Agreement, then the amount payable under this Agreement shall
be increased to the amount which, after deduction from such increased amount of
all Taxes required to be withheld or deducted therefrom, will yield to the
Lender the amount stated to be payable under this Agreement. The Borrower shall
also hold the Lender harmless and indemnify it for any stamp or other taxes with
respect to the preparation, execution, delivery, recording, performance or
enforcement of this Agreement (all of which shall be included within "Taxes").
If any of the Taxes specified in this Section 4.3(a) are paid by the Lender, the
Borrower shall, upon demand of the Lender, promptly reimburse the Lender for
such payments, together with any interest, penalties and expenses incurred in
connection therewith. The Borrower shall deliver to the Lender certificates or
other valid vouchers for all Taxes or other charges deducted from or paid with
respect to payments made by the Borrower hereunder.
(b) Additional Costs. Subject to Section 4.3(c), and without
duplication of any amounts payable described in Section 4.2 or 4.3(a), if after
the date hereof any change in any law or regulation or in the interpretation
thereof by any court or administrative or Governmental Authority charged with
the administration thereof or the enactment of any law or regulation shall
either (1) impose, modify or deem applicable any reserve, special deposit or
similar requirement against the Lender's Commitment or Loans or (2) impose on
the Lender any other condition regarding this Agreement, its Commitment or the
Loans and the result of any event referred to in clause (1) or (2) shall be to
increase the cost to the Lender of maintaining its Commitment or any Loans made
by the Lender (which increase in cost shall be calculated in accordance with the
Lender's reasonable averaging and attribution methods) by an amount which the
Lender deems to be material, then, upon demand by the Lender, the Borrower shall
pay to the Lender an amount equal to such increase in cost.
(c) Certificate, Etc. If requested by the Borrower, in connection
with any demand for payment pursuant to this Section 4.3, the Lender shall
provide to the Borrower a certificate
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setting forth in reasonable detail the basis for such demand, the amount
required to be paid by the Borrower to the Lender, the computations made by the
Lender to determine such amount and satisfaction of the conditions set forth in
the next sentence. Anything to the contrary herein notwithstanding, the Lender
shall not have the right to demand any payment or compensation under this
Section 4.3 (i) with respect to any period more than 180 days prior to the date
it has made a demand pursuant to this Section 4.3, and (ii) to the extent that
the Lender determines in good faith that the interest rate on the relevant Loans
appropriately accounts for any increased cost or reduced rate of return. In the
absence of manifest error, the certificate referred to above shall be conclusive
as to the amount required to be paid.
Section 4.4 Expenses; Indemnity. 1. The Borrower agrees: (i) to pay
or reimburse the Lender for all reasonable out-of-pocket costs and expenses
incurred in connection with the preparation and execution of, and any amendment,
supplement or modification to, this Agreement and any other documents prepared
in connection herewith or therewith, and the consummation of the transactions
contemplated hereby and thereby, including, without limitation, the reasonable
fees and disbursements of Xxxxx & Xxxx LLP, counsel to the Lender; and (ii) to
pay or reimburse the Lender for all reasonable costs and expenses incurred in
connection with the enforcement or preservation of any rights under this
Agreement and any such other documents, including, without limitation, the
reasonable fees and disbursements of counsel to the Lender. The Borrower also
agrees to indemnify the Lender against any transfer taxes, documentary taxes,
assessments or charges made by any Governmental Authority by reason of the
execution and delivery of this Agreement.
(b) The Borrower agrees to indemnify the Lender and its directors,
officers, partners, employees, agents and Affiliates (for purposes of this
paragraph, each, an "Indemnitee") against, and to hold each Indemnitee harmless
from, any and all claims, liabilities, damages, losses, costs, charges and
expenses (including fees and expenses of counsel) incurred by or asserted
against any Indemnitee arising out of, in any way connected with, or as a result
of (i) the execution or delivery of this Agreement or any agreement or
instrument contemplated by this Agreement, the performance by the parties
thereto of their respective obligations under this Agreement or the consummation
of the transactions and the other transactions contemplated by this Agreement,
(ii) the use of the proceeds of the Loans or (iii) any claim, litigation,
investigation or proceeding relating to any of the foregoing, whether or not any
Indemnitee is a party thereto; provided that such indemnity shall not, as to any
Indemnitee, be available to the extent that such losses, claims, damages,
liabilities or related expenses are determined by a court of competent
jurisdiction by final and nonappealable judgment to have resulted from the gross
negligence or willful misconduct of such Indemnitee.
(c) All amounts due under this Section 4.4 shall be payable in
immediately available funds upon written demand therefor.
Section 4.5 Survival. The provisions of Sections 4.2, 4.3 and 4.4
shall remain operative and in full force and effect regardless of the expiration
of the term of this Agreement, the consummation of the transactions contemplated
hereby, the repayment of any of the Loans, the reduction or termination of the
Commitment, the invalidity or unenforceability of any term or provision of this
Agreement, or any investigation made by or on behalf of the Lender.
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ARTICLE V.
REPRESENTATIONS AND WARRANTIES
Section 5.1 Representations and Warranties. In order to induce the
Lender to enter into this Agreement and to make Loans and the other financial
accommodations to the Borrower and to induce the Lender to obtain Letters of
Credit on its behalf as described herein, the Borrower represents and warrants
to the Lender as follows:
(a) Good Standing and Power. The Borrower and each Subsidiary is a
limited partnership or corporation, duly organized and validly existing
in good standing under the laws of the jurisdiction of its
organization; each has the power to own its property and to carry on
its business as now being conducted; and each is duly qualified to do
business and is in good standing in each jurisdiction in which the
character of the properties owned or leased by it therein or in which
the transaction of its business makes such qualification necessary,
except where the failure to be so qualified, or to be in good standing,
individually or in the aggregate, could not reasonably be expected to
have a Material Adverse Effect.
(b) Authority. The Borrower has full power and authority to execute
and deliver, and to incur and perform its obligations under, this
Agreement, which has been duly authorized by all proper and necessary
action. No consent or approval of limited partners is required as a
condition to the validity or performance of, or the exercise by the
Lender of any of its rights or remedies under, this Agreement.
(c) Authorizations. All authorizations, consents, approvals,
registrations, notices, exemptions and licenses with or from any
Governmental Authority or other Person necessary for the execution,
delivery and performance by the Borrower of, and the incurrence and
performance of each of its obligations under, this Agreement, and the
exercise by the Lender of its remedies under this Agreement have been
effected or obtained and are in full force and effect.
(d) Binding Obligation. This Agreement constitutes the valid and
legally binding obligation of the Borrower enforceable in accordance
with its terms, subject as to enforcement to bankruptcy, insolvency,
reorganization, moratorium and similar laws of general applicability
relating to or affecting creditors' rights and to general equity
principles.
(e) Litigation. There are no proceedings or investigations now
pending or, to the knowledge of the Borrower, threatened before any
court or arbitrator or before or by any Governmental Authority which,
individually or in the aggregate, if determined adversely to the
interests of the Borrower or any Subsidiary, could reasonably be
expected to have a Material Adverse Effect.
(f) No Conflicts. There is no statute, regulation, rule, order or
judgment, and no provision of any agreement or instrument binding upon
the Borrower or any
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Subsidiary, or affecting their properties, and no provision of the
certificate of limited partnership, certificate of incorporation,
agreement of limited partnership or by-laws (or similar constitutive
instruments) of the Borrower or any Subsidiary, that would prohibit,
conflict with or in any way impair the execution or delivery of, or
the incurrence or performance of any obligations of the Borrower
under, this Agreement, or result in or require the creation or
imposition of any Lien on property of the Borrower or any Subsidiary
as a consequence of the execution, delivery and performance of this
Agreement.
(g) Taxes. The Borrower and the Subsidiaries each has filed or
caused to be filed all tax returns that are required to be filed and
paid all taxes that are required to be shown to be due and payable on
said returns or on any assessment made against it or any of its
property and all other taxes, assessments, fees, liabilities, penalties
or other charges imposed on it or any of its property by any
Governmental Authority, except for any taxes, assessments, fees,
liabilities, penalties or other charges which are being contested in
good faith and (unless the amount thereof is not material to the
Borrower's consolidated financial condition) for which adequate
reserves have been established in accordance with GAAP.
(h) Properties. The Borrower and the Subsidiaries each has good and
marketable title to, or valid leasehold interests in, all of its
respective properties and assets. All such assets and properties are so
owned or held free and clear of all Liens, except Permitted Liens.
(i) Compliance with Laws and Charter Documents. Neither the
Borrower nor any Subsidiary is, or as a result of performing any of its
obligations under this Agreement will be, in violation of (a) any law,
statute, rule, regulation or order of any Governmental Authority
applicable to it or its properties or assets or (b) its certificate of
limited partnership, certificate of incorporation, agreement of limited
partnership, by-laws or any similar document.
(j) No Material Adverse Effect. Since May 15, 1997, there has not
occurred or arisen any event, condition or circumstance that,
individually or in the aggregate, could reasonably be expected to have
a Material Adverse Effect.
(k) Disclosure. All information relating to the Borrower or its
Subsidiaries delivered in writing to the Lender in connection with the
negotiation, execution and delivery of this Agreement is true and
complete in all material respects. There is no material fact of which
the Borrower is aware which, individually or in the aggregate, would
reasonably be expected adversely to influence the Lender's credit
analysis relating to the Borrower and its Subsidiaries which has not
been disclosed to the Lender in writing.
Section 5.2 Survival. All representations and warranties made by the
Borrower in this Agreement, and in the certificates or other instruments
prepared or delivered in connection with or pursuant to this Agreement, shall be
considered to have been relied upon by the Lender,
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(ii) survive the making of Loans and the issuance of or payment under any Letter
of Credit regardless of any investigation made by, or on behalf of, the Lender
and (iii) continue in full force and effect as long as the Commitment has not
been terminated and, thereafter, so long as any Loan, Letter of Credit fee or
other amount payable under this Agreement remains unpaid.
ARTICLE VI.
CONDITIONS PRECEDENT
Section 6.1 Conditions to the Availability of the Commitment and Letters of
Credit. The obligations of the Lender (including its obligators in respect of
Letters of Credit) hereunder are subject to, and the Lender's Commitment shall
not become available until the earliest date (the "Effective Date") on which
each of the following conditions precedent shall have been satisfied or waived
in writing by the Lender:
(a) This Agreement. The Lender shall have received this Agreement
duly executed and delivered by the Borrower.
(b) Certificate of Incorporation and By-Laws. The Lender shall have
received the following:
(i) a copy of the Certificate of Incorporation of the Borrower, as
in effect on the Effective Date, certified by the Secretary of State of
Delaware, and a certificate from such Secretary of State as to the good
standing of the Borrower, in each case as of a date reasonably close to
the Effective Date; and
(ii) a certificate of a Responsible Officer of the Borrower, dated
the Effective Date, and stating that attached thereto is a true and
complete copy of the By-Laws of the Borrower as in effect on such date.
(c) Representations and Warranties. The representations and
warranties contained in Section 5.1 shall be true and correct on the
Effective Date, and the Lender shall have received a certificate,
signed by a Responsible Officer of the Borrower, to that effect.
(d) Other Documents. The Lender shall have received such other
certificates, opinions and other documents as the Lender reasonably may
require.
Section 6.2 Conditions to All Loans and Letters of Credit. The obligations
of the Lender to make each Loan and to obtain Letters of Credit are subject to
the conditions precedent that, on the date of each Loan or Letter of Credit and
after giving effect thereto, each of the following conditions precedent shall
have been satisfied, or waived in writing by the Lender:
(a) Borrowing Request. The Lender shall have received a Borrowing
Request in accordance with the terms of this Agreement.
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(b) No Default. No Default or Event of Default shall have occurred
and be continuing, nor shall any Default or Event of Default occur as a
result of the making of such Loan or obtaining such Letter of Credit.
(c) Debt-to-Equity Ratio. The Lender shall have received from the
Borrower a certificate demonstrating that the ratio of the Borrower's
Adjusted Indebtedness to the Borrower's Net Assets, taking into account
the requested Loan or Letter of Credit and the assets, if any, to be
acquired by the Borrower with the proceeds of such Loan or Letter of
Credit, shall not exceed 4-to-1.
(d) Representations and Warranties; Covenants. The representations
and warranties contained in Section 5. 1 shall have been true and
correct when made and (except to the extent that any representation or
warranty speaks as of a date certain) shall be true and correct on the
Borrowing Date with the same effect as though such representations and
warranties were made on such Borrowing Date; and the Borrower shall
have complied with all of its covenants and agreements under this
Agreement.
(e) REIT Status of Reckson. The borrowing shall not, in the sole
judgment of the Lender, endanger Reckson's status as a REIT.
(f) Certain Loans Subject to Reckson's Approval. In respect of any
Loan or Letter of Credit or Loans or Letters of Credit aggregating $25
million in a single RSVP Platform, Reckson shall have approved the
Lender's making such Loan or obtaining such Letter of Credit in its
sole discretion.
Section 6.3 Satisfaction of Conditions Precedent. Each of (i) the delivery
by the Borrower of a Borrowing Request (unless the Borrower notifies the Lender
in writing to the contrary prior to the Borrowing Date) and (ii) the acceptance
of the proceeds of a Loan or the delivery of the Letter of Credit shall be
deemed to constitute a certification by the Borrower that, as of the Borrowing
Date, each of the conditions precedent contained in Section 6. 2 has been
satisfied with respect to the Loan then being made or the Letter of Credit then
being issued.
ARTICLE VII
COVENANTS
Section 7.1 Affirmative Covenants. Until satisfaction in full of all the
obligations of the Borrower under this Agreement and termination of the
Commitment of the Lender hereunder, the Borrower will:
(a) Financial Statements; Compliance Certificates. Furnish to the
Lender:
(i) as soon as available, but in no event more than 60 days
following the end of each of the first three quarters of each fiscal
year, copies of the Borrower's Quarterly Report on Form 10-Q being
filed with the SEC, which shall include a consolidated
15
balance sheet and consolidated income statement of the Borrower and
the Subsidiaries for such quarter;
(ii) as soon as available, but in no event more than 120 days
following the end of each fiscal year, a copy of the Borrower's Annual
Report on Form 10-K being filed with the SEC, which shall include the
consolidated financial statements of the Borrower and the
Subsidiaries, together with a report thereon by Ernst & Young LLP (or
another firm of independent certified public accountants reasonably
satisfactory to the Lender), for such year;
(iii) within five Business Days of any Responsible Officer of the
Borrower obtaining knowledge of any Default or Event of Default, if
such Default or Event of Default is then continuing, a certificate of
a Responsible Officer of the Borrower stating that such certificate is
a "Notice of Default" and setting forth the details thereof and the
action which the Borrower is taking or proposes to take with respect
thereto; and
(iv) such additional information, reports or statements,
regarding the business, financial condition or results of operations
of the Borrower and its Subsidiaries, as the Lender from time to time
may reasonably request.
(b) Existence. Except as permitted by Section 7. 2(a), maintain its
existence in good standing and qualify and remain qualified to do business
in each jurisdiction in which the character of the properties owned or
leased by it therein or in which the transaction of its business is such
that the failure to qualify, individually or in the aggregate, could
reasonably be expected to have a Material Adverse Effect.
(c) Compliance with Law and Agreements. Comply, and cause each
Subsidiary to comply, with all applicable laws, ordinances, orders, rules,
regulations and requirements of all Governmental Authorities and with all
agreements except where the necessity of compliance therewith is contested
in good faith by appropriate proceedings or where the failure to comply
therewith, individually or in the aggregate, could not reasonably be
expected to have a Material Adverse Effect.
(d) Authorizations. Obtain, make and keep in full force and effect all
authorizations from and registrations with Governmental Authorities
required for the validity or enforceability of this Agreement.
(e) Inspection. Permit, and cause each Subsidiary to permit, the
Lender to have one or more of its officers and employees, or any other
Person designated by the Lender, to visit and inspect any of the properties
of the Borrower and the Subsidiaries and to examine the minute books, books
of account and other records of the Borrower and the Subsidiaries, and to
photocopy extracts from such minute books, books of account and other
records, and to discuss its affairs, finances and accounts with its
officers and with the Borrower's independent accountants, during normal
business hours and at such other reasonable times, for the purpose of
monitoring the Borrower's compliance with its obligations under this
Agreement.
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(f) Maintenance of Records. Keep, and cause each Subsidiary to keep, proper
books of record and account in which full, true and correct entries will be made
of all dealings or transactions of or in relation to its business and affairs.
(g) Notice of Defaults and Adverse Developments. Promptly notify the Lender
upon the discovery by any Responsible officer of the occurrence of (i) any
Default or Event of Default; (ii) any event, development or circumstance whereby
the financial statements most recently furnished to the Lender fail in any
material respect to present fairly, in accordance with GAAP, the financial
condition and operating results of the Borrower and the Subsidiaries as of the
date of such financial statements; (iii) any material litigation or proceedings
that are instituted or threatened (to the knowledge of the Borrower) against the
Borrower or any Subsidiary or any of their respective assets; (iv) any event,
development or circumstance which, individually or in the aggregate, could
reasonably be expected to result in an event of default (or, with the giving of
notice or lapse of time or both, an event of default) under any Indebtedness and
the amount thereof; and (v) any other development in the business or affairs of
the Borrower or any Subsidiary if the effect thereof would reasonably be
expected, individually or in the aggregate, to have a Material Adverse Effect;
in each case describing the nature thereof and the action the Borrower proposes
to take with respect thereto.
Section 7.2 Negative Covenants. Until satisfaction in full of all the
obligations of the Borrower under this Agreement and termination of the
Commitment of the Lender hereunder, the Borrower will not:
(a) Mergers, Consolidations and Sales of Assets. Wind up, liquidate
or dissolve its affairs or enter into any merger, consolidation or
share exchange, or convey, sell, lease or otherwise dispose of (or
agree to do any of the foregoing at any future time), whether in one or
a series of transactions, all or any substantial part of its assets, or
permit any Subsidiary so to do, unless such transaction or series of
transactions are expressly approved by the Lender, which approval shall
not be unreasonably withheld.
(b) Liens. Create, incur, assume or suffer to exist any Lien upon
or with respect to any of its property or assets, whether now owned or
hereafter acquired, or assign or otherwise convey any right to receive
income, except Permitted Liens.
(c) Indebtedness. Create, incur, issue, assume, guarantee or suffer
to exist any Indebtedness, except:
(i) Indebtedness to the Lender under this Agreement or under
the RSI Facility Agreement,
(ii) Non-recourse Indebtedness of the Borrower and any
Subsidiary secured by mortgages, encumbrances or liens specifically
permitted by Section 7. 2(b), and
(iii) Indebtedness expressly approved by the Lender in writing,
which approval may be withheld in the Lender's sole discretion.
17
(d) Dividends. Declare any dividends on any of its shares of capital stock
unless such dividend or distribution is expressly approved in writing by the
Lender.
(e) Certain Amendments. Amend, modify or waive, or permit to be amended,
modified or waived, any provision of its Certificate of Incorporation unless,
within not less than 5 days prior to such amendment, modification or waiver (or
such later time as the Lender may in its sole discretion permit), the Borrower
shall have given the Lender notice thereof, including all relevant terms and
conditions thereof, and the Lender shall have consented in writing thereto.
ARTICLE VIII.
EVENTS OF DEFAULT
Section 8.1 Events of Default. If one or more of the following events
(each, an "Event of Default") shall occur:
(a) The Borrower shall fail duly to pay any principal of any Loan or Letter
of Credit when due, whether at maturity, by notice of intention to prepay or
otherwise; or
(b) The Borrower shall fail duly to pay any interest, fee or any other
amount payable under this Agreement within two days after the same shall be due;
or
(c) Borrower shall fail duly to observe or perform any term, covenant, or
agreement contained in Section 7. 2; or
(d) The Borrower shall fail duly to observe or perform any other term,
covenant or agreement contained in this Agreement, and such failure shall have
continued unremedied for a period of 30 days; or
(e) Any representation or warranty made or deemed made by the Borrower in
this Agreement, or any statement or representation made in any certificate,
report or opinion delivered by or on behalf of the Borrower in connection with
this Agreement, shall prove to have been false or misleading in any material
respect when so made or deemed made; or
(f) The Borrower shall fail to pay any Indebtedness (other than obligations
here under) in an amount of $100,000 or more when due; or any such Indebtedness
having an aggregate principal amount outstanding of $100,000 or more shall
become or be declared to be due prior to the expressed maturity thereof; or
(g) An involuntary case or other proceeding shall be commenced against the
Borrower seeking liquidation, reorganization or other relief with respect to it
or its debts under any applicable bankruptcy, insolvency, reorganization or
similar law or seeking the appointment of a custodian, receiver, liquidator,
assignee, trustee, sequestrator or similar official of it or any substantial
part of its property, and such involuntary case or other proceeding shall remain
undismissed and unstayed for a period of more than 60 days; or an order or
decree approving or ordering any of the foregoing shall be entered and continued
unstayed and in effect; or
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(h) The Borrower shall commence a voluntary case or proceeding under any
applicable bankruptcy, insolvency, reorganization or similar law or any other
case or proceeding to be adjudicated a bankrupt or insolvent, or any of them
shall consent to the entry of a decree or order for relief in respect of the
Borrower in an involuntary case or proceeding under any applicable bankruptcy,
insolvency, reorganization or other similar law or to the commencement of any
bankruptcy or insolvency case or proceeding against any of them, or any of them
shall file a petition or answer or consent seeking reorganization or relief
under any applicable law, or any of them shall consent to the filing of such
petition or to the appointment of or taking possession by a custodian, receiver,
liquidator, assignee, trustee, sequestrator or similar official of the Borrower
or any substantial part of its property, or the Borrower shall make an
assignment for the benefit of creditors, or the Borrower shall admit in writing
its inability to pay its debts generally as they become due, or the Borrower
shall take corporate action in furtherance of any such action;
(i) One or more judgments against the Borrower or attachments against its
property, which in the aggregate exceed $100,000, or the operation or result of
which could be to interfere materially and adversely with the conduct of the
business of the Borrower remain unpaid, unstayed on appeal, undischarged,
unbonded, or undismissed for a period of more than 30 days; or
(j) Any court or governmental or regulatory authority shall have enacted,
issued, promulgated, enforced or entered any statute, rule, regulation,
judgment, decree, injunction or other order (whether temporary, preliminary or
permanent) which is in effect and which prohibits, enjoins or otherwise
restricts, in a manner that, individually or in the aggregate, could reasonably
be expected to have a Material Adverse Effect, any of the transactions
contemplated under this Agreement; or
(k) Any Event of Default shall occur and be continuing under the RSI
Facility Agreement.
then, and at any time during the continuance of such Event of Default, the
Lender may, by written notice to the Borrower, take either or both of the
following actions, at the same or different times: (i) terminate forthwith the
Commitment, Credit Obligations and any obligations of the Lender to obtain
Letters of Credit pursuant to this Agreement and (ii) declare any Credit
Obligations then outstanding to be due, whereupon the principal of the Credit
Obligations so declared to be due, together with accrued interest thereon and
any unpaid amounts accrued under this Agreement, shall become forthwith due,
without presentment, demand, protest or any other notice of any kind (all of
which are hereby expressly waived by the Borrower); provided that, in the case
of any Event of Default described in Section 8. 1(g) or (h) occurring with
respect to the Borrower, the Commitment and any obligations of the Lender to
obtain Letters of Credit pursuant to this Agreement shall automatically and
immediately terminate and the principal of all Loans then outstanding, together
with accrued interest thereon and any unpaid amounts accrued under this
Agreement, shall automatically and immediately become due without presentment,
demand, protest or any other notice of any kind (all of which are hereby
expressly waived by the Borrower).
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ARTICLE IX.
EVIDENCE OF LOANS; TRANSFERS
Section 9.1 Evidence of Loans and Letters of Credit. 1. The Lender shall
maintain accounts evidencing the indebtedness of the Borrower to the Lender
resulting from each Loan made by the Lender and each Letter of Credit issued for
the benefit of the Borrower from time to time, including the amounts of
principal and interest payable and paid to the Lender in respect of Loans or
Letters of Credit.
(b) The Lender's written records described above shall be available for
inspection during ordinary business hours by the Borrower from time to time upon
reasonable prior notice to the Lender.
(c) The entries made in the Lender's written or electronic records and the
foregoing accounts shall be prima facie evidence of the existence and amounts of
the indebtedness of the Borrower therein recorded; provided, however, that the
failure of the Lender to maintain any such account or such records, as
applicable, or any error therein, shall not in any manner affect the validity or
enforceability of any obligation of the Borrower to repay any Loan actually made
by the Lender in accordance with the terms of this Agreement.
ARTICLE X
LETTERS OF CREDIT
Section 10.1 Letters of Credit. Until the Commitment Termination Date and
subject to the terms and conditions set forth in this Agreement, the Lender
hereby agrees to obtain from an Issuing Bank for the account of the Borrower one
or more Letters of Credit, subject to the following provisions:
(a) Types and Amounts. The Lender shall not have any obligation to obtain,
or cause the amendment or extension of any Letter of Credit at any time:
(i) if the aggregate Letter of Credit Obligations with respect to the
Issuing Bank, after giving effect to the issuance, amendment or extension
of the Letter of Credit requested hereunder, shall exceed any limit
imposed by law or regulation upon the Issuing Bank;
(ii) if, immediately after giving effect to the issuance, amendment or
extension of such Letter of Credit, (1) the Letter of Credit Obligations
at such time would exceed [$10,000,000] or (2) the Credit Obligations at
such time would exceed the Commitment at such time, or (3) one or more of
the conditions precedent contained in Sections 6.1 or 6.2, as applicable,
would not on such date be satisfied, unless such conditions are thereafter
satisfied and written notice of such satisfaction is given to the Lender
(and the Lender shall not otherwise be required to determine that, or take
notice
20
whether, the conditions precedent set forth in Sections 6.1 or 6.2, as
applicable, have been satisfied);
(iii) which has an expiration date later than the earlier of
(A) the date one (1) year after the date of issuance (without regard to
any automatic renewal provisions thereof) or (B) the Business Day next
preceding the scheduled Commitment Termination Date; or
(iv) which is in a currency other than dollars.
(b) Conditions. In addition to being subject to the satisfaction of
the conditions precedent contained in Sections 6.1 and 6.2, as
applicable, the obligation of the Lender to obtain from an Issuing
Bank, or to cause the amendment or extension of any Letter of Credit is
subject to the satisfaction in full of the following conditions:
(i) if the Lender so requests, the Borrower shall have executed
and delivered to the Lender a Letter of Credit Reimbursement Agreement
and such other documents and materials as may be required pursuant to
the terms thereof; and
(ii) the terms of the proposed Letter of Credit shall be
satisfactory to the Lender in its sole discretion.
(c) Issuance of Letters of Credit. 1. The Borrower shall give the
Lender written notice that it requires the issuance of a Letter of Credit
not later than 11:00 a.m. (New York time) on the third (3rd) Business Day
preceding the requested date for issuance thereof under this Agreement.
Such notice shall be irrevocable unless and until such request is denied by
the Lender and shall specify (A) that the requested Letter of Credit is
either a Commercial Letter of Credit or a Standby Letter of Credit, (B) the
stated amount of the Letter of Credit requested, (C) the effective date
(which shall be a Business Day) of issuance of such Letter of Credit, (D)
the date on which such Letter of Credit is to expire (which shall be a
Business Day and no later than the Business Day immediately preceding the
scheduled Commitment Termination Date), (E) that such Letter of Credit is
to be issued for the benefit of the Borrower, (F) other relevant terms of
such Letter of Credit, (G) the Available Commitment at such time and (H)
the amount of the then outstanding Letter of Credit Obligations.
(ii) The Lender shall give the Borrower written notice, or
telephonic notice confirmed promptly thereafter in writing, of the
issuance, amendment or extension of a Letter of Credit.
(d) Reimbursement Obligations; Duties of the Lender.
(i) Notwithstanding any provisions to the contrary in any
Letter of Credit Reimbursement Agreement:
(A) the Borrower shall reimburse the Lender for amounts
drawn under its Letter of Credit, in dollars, no later than the
date (the "Reimbursement Date") which is the earlier of (I) the
time specified in the applicable Letter of Credit
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Reimbursement Agreement and (II) three (3) Business Days after
the Borrower receives written notice from the Lender that payment
has been made under such Letter of Credit by the Issuing Bank;
and
(B) all Reimbursement Obligations with respect to any
Letter of Credit shall bear interest at the Prime Rate in
accordance with Section 3.1 from the date of the relevant drawing
under such Letter of Credit until the Reimbursement Date.
(ii) The Lender shall give the Borrower written notice, or
telephonic notice confirmed promptly thereafter in writing, of all
drawings under a Letter of Credit and the payment (or the failure to
pay when due) by the Borrower, as the case may be, on account of a
Reimbursement Obligation.
(iii) In determining whether to pay under any Letter of Credit,
it is understood that the Issuing Bank shall have no obligation other
than to confirm that any documents required to be delivered under a
respective Letter of Credit appear to have been delivered and that they
appear on their face to comply with the requirements of such Letter of
Credit.
(e) Payment of Reimbursement Obligations. (i) The Borrower unconditionally
agrees to pay to the Lender, in dollars, the amount of all Reimbursement
Obligations, interest and other amounts payable to the Lender under or in
connection with the Letters of Credit when such amounts are due and payable,
irrespective of any claim, setoff, defense or other right which the Borrower may
have at any time against the Lender or any other Person.
(f) Letter of Credit Fee Charges. In connection with each Letter of Credit,
the Borrower hereby covenants to pay to the Lender the following Letter of
Credit Fee payable quarterly in arrears (on the first Banking Day of each
calendar quarter following the issuance of each Letter of Credit): a fee, for
the Lender's own account, computed daily on the amount of the Letter of Credit
issued and outstanding at a rate per annum equal to the Lender's cost in
obtaining the Letter of Credit plus a spread equal to the difference between the
interest rate payable on Loans hereunder less the Lender's cost of borrowing
under the Lender's credit facility (or, in the absence of a credit facility, the
Prime Rate as announced by Citibank N.A.). Notwithstanding the foregoing, if
amounts payable pursuant to this Section 10.1(f) together with any interest
payable pursuant to Section 3.1, exceed the amount of EBITDA of the Borrower for
the immediately preceding calendar quarter (ending the last day of September,
December, March or June), the Borrower shall not be obligated to repay the
amounts payable under this Section 10.1(f) which when added to the interest
payable pursuant to Section 3.1 exceeds EBITDA of the Borrower for such period.
Any such amount in excess of EBITDA shall be added to principal hereunder and
shall accrue interest thereon in accordance with Section 3.1.
(g) Letter of Credit Reporting Requirements. The Lender shall, upon the
request of the Borrower, provide to the Borrower separate schedules for
Commercial Letters of Credit and Standby Letters of Credit issued as Letters of
Credit, in form and substance reasonably satisfactory to the Borrower, setting
forth the aggregate Letter of Credit Obligations outstanding
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to it at the end of each month and any information requested by the Borrower
relating to the date of issue, account party, amount, expiration date and
reference number of each Letter of Credit issued as contemplated hereunder.
(h) Indemnification; Exoneration. 1. In addition to all other amounts
payable to the Lender, the Borrower hereby agrees to defend, indemnify, and save
the Lender harmless from and against any and all claims, demands, liabilities,
penalties, damages, losses (other than loss of profits), reasonable costs,
reasonable charges and reasonable expenses (including reasonable attorneys fees
but excluding taxes) which the Lender may incur or be subject to as a
consequence, direct or indirect, of (A) the issuance of any Letter of Credit
other than as a result of the gross negligence or willful misconduct of the
Lender, as determined by a court of competent jurisdiction, or (B) the failure
of the Issuing Bank to honor a drawing under such Letter of Credit as a result
of any act or omission, whether rightful or wrongful, of any present or future
de jure or de facto government or Governmental Authority.
(ii) As between the Borrower on the one hand and the Lender on the
other hand, the Borrower assumes all risks of the acts and omissions of, or
misuse of Letters of Credit by, the respective beneficiary of the Letters
of Credit. In furtherance and not in limitation of the foregoing, subject
to the provisions of the Letter of Credit Reimbursement Agreements, the
Lender shall not be responsible for: (A) the form, validity, legality,
sufficiency, accuracy, genuineness or legal effect of any document
submitted by any party in connection with the application for and issuance
of the Letters of Credit, even if it should in fact prove to be in any or
all respects invalid, insufficient, inaccurate, fraudulent or forged; (B)
the validity, legality or sufficiency of any instrument transferring or
assigning or purporting to transfer or assign a Letter of Credit or the
rights or benefits thereunder or proceeds thereof, in whole or in part,
which may prove to be invalid or ineffective for any reason; (C) failure of
the Borrower to duly comply with conditions required in order to draw upon
such Letter of Credit; (D) errors, omissions, interruptions or delays in
transmission or delivery of any messages, by mail, cable, telegraph, telex
or otherwise, whether or not they be in cipher; (E) errors in
interpretation of technical terms; (F) any loss or delay in the
transmission or otherwise of any document required in order to make a
drawing under any Letter of Credit or of the proceeds thereof; (G) the
misapplication by the Borrower of the proceeds of any drawing Letter of
Credit; and (H) any consequences arising from causes beyond the control of
the Lender, other than of the foregoing resulting from the gross negligence
or willful misconduct of the Lender.
ARTICLE XI.
MISCELLANEOUS
Section 11.1 Applicable Law. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO
CONTRACTS MADE AND TO BE PERFORMED ENTIRELY WITHIN SUCH STATE.
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Section 11.2 Waiver of Jury. THE BORROWER AND THE LENDER EACH HEREBY WAIVES
TRIAL BY JURY IN ANY JUDICIAL PROCEEDING INVOLVING, DIRECTLY OR INDIRECTLY, ANY
MATTER (WHETHER SOUNDING IN TORT, CONTRACT OR OTHERWISE) IN ANY WAY ARISING OUT
OF, RELATED TO, OR CONNECTED WITH THIS AGREEMENT, OR THE RELATIONSHIPS
ESTABLISHED HEREUNDER.
Section 11.3 Jurisdiction and Venue; Service of Process. 1. The Borrower
and the Lender each hereby irrevocably submits to the non-exclusive jurisdiction
of any state or federal court in the Borough of Manhattan, The City of New York
for the purpose of any suit, action, proceeding or judgment relating to or
arising out of this Agreement and to the laying of venue in the Borough of
Manhattan The City of New York. The Borrower and the Lender each hereby
irrevocably waives, to the fullest extent permitted by applicable law, any
objection to the laying of the venue of any such suit, action or proceeding
brought in the aforesaid courts and hereby irrevocably waives any claim that any
such suit, action or proceeding brought in any such court has been brought in an
inconvenient forum.
(b) Borrower agrees that service of process in any such action or
proceeding may be effected by mailing a copy thereof by registered or certified
mail (or any substantially similar form of mail), postage prepaid, to the
Borrower at its address set forth in subsection 11.7 or at such other address of
which the Lender shall have been notified pursuant thereto. The Borrower further
agrees that nothing herein shall affect the right to effect service of process
in any other manner permitted by law or shall limit the right to xxx in any
other jurisdiction; and
(c) The Borrower waives, to the maximum extent not prohibited by law, any
right it may have to claim or recover in any legal action or proceeding referred
to in this subsection any special, exemplary, punitive or consequential damages.
Section 11.4 Confidentiality. The Lender agrees (on behalf of itself and
each of its Affiliates, partners, officers, employees and representatives) to
use its best efforts to keep confidential, in accordance with their customary
procedures for handling confidential information of this nature and in
accordance with commercially reasonable business practices, any Confidential
Information; provided that nothing herein shall limit the disclosure of any such
information (i) to the extent required by statute, rule, regulation or judicial
process, (ii) to counsel for the Lender, (iii) to auditors or accountants, (iv)
by the Lender to an Affiliate thereof, or (v) in connection with any litigation
relating to enforcement of this Agreement; provided further, that, unless
specifically prohibited by applicable law or court order, the Lender shall,
prior to disclosure thereof, notify the Borrower of any request for disclosure
of any Confidential Information (x) by any Governmental Authority or
representative thereof or (y) pursuant to legal process.
Section 11.5 Amendments and Waivers. 1. Any provision of this Agreement may
be amended, modified, supplemented or waived, but only by a written amendment or
supplement, or written waiver, signed by the Borrower and the Lender.
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(b) Except to the extent expressly set forth therein, any waiver shall be
effective only in the specific instance and for the specific purpose for which
such waiver is given.
Section 11.6 Cumulative Rights; No Waiver. Each and every right granted to
the Lender hereunder or under any other document delivered in connection
herewith, or allowed it by law or equity, shall be cumulative and not exclusive
and may be exercised from time to time. No failure on the part of the Lender to
exercise, and no delay in exercising, any right will operate as a waiver
thereof, nor will any single or partial exercise by the Lender of any right
preclude any other or future exercise thereof or the exercise of any other
right.
Section 11.7 Notices. Any communication, demand or notice to be given
hereunder will be duly given when delivered in writing or by telecopy to a party
at its address as indicated below or such other address as such party may
specify in a notice to the other party hereto. A communication, demand or notice
given pursuant to this Agreement shall be addressed:
If to the Borrower, to:
Reckson Service Industries, Inc.
000 Xxxxxxxxxxx Xxxx
Xxxxxxxx, Xxx Xxxx 00000
Telecopy: (000) 000-0000
Attention: Chief Financial Officer
If to the Lender, to:
Reckson Operating Partnership, L.P.
000 Xxxxxxxxxxx Xxxx
Xxxxxxxx, Xxx Xxxx 00000
Telecopy: (000) 000-0000
Attention: Chief Financial Officer
This Section 11.7 shall not apply to notices referred to in Article II of
this Agreement, except to the extent set forth therein.
Section 11.8 Certain Acknowledgments. The Borrower hereby confirms and
acknowledges that (a) the Lender does not have any fiduciary or similar
relationship to the Borrower by virtue of this Agreement and the transactions
contemplated herein and that the relationship established by this Agreement
between the Lender and the Borrower is solely that of creditor and debtor and
(b) no joint venture exists between the Borrower and the Lender by virtue of
this Agreement and the transactions contemplated herein.
Section 11.9 Separability. In case any one or more of the provisions
contained in this Agreement shall be invalid, illegal or unenforceable in any
respect under any law, the validity,
26
legality and enforceability of the remaining provisions contained herein shall
not in any way be affected or impaired thereby.
Section 11.10 Parties in Interest. This Agreement shall be binding upon and
inure to the benefit of the Borrower and the Lender and their respective
successors and assigns, except that the Borrower may not assign any of its
rights hereunder without the prior written consent of the Lender, and any
purported assignment by the Borrower without such consent shall be void.
Section 1l.11 Execution in Counterparts. This Agreement may be executed in
any number of counterparts and by the different parties hereto on separate
counterparts, each of which when so executed and delivered shall be an original,
but all the counterparts shall together constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the date first above written.
RECKSON SERVICE INDUSTRIES, INC.,
as Borrower
By: ________________________________
Name:
Title:
RECKSON OPERATING PARTNERSHIP, L.P.,
as Lender
By: Reckson Associates Realty Corp.,
its general partner
By: ________________________________
Name:
Title:
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