THIRD AMENDED AND RESTATED
REVOLVING CREDIT AGREEMENT
DATED SEPTEMBER 23, 1997
AMONG
MERIDIAN INDUSTRIAL TRUST, INC.
AND
BANKBOSTON, N.A.,
THE OTHER BANKS WHICH ARE
A PARTY TO THIS AGREEMENT
AND
OTHER BANKS WHICH MAY BECOME
PARTIES TO THIS AGREEMENT
AND
BANKBOSTON, N.A.,
AS AGENT
TABLE OF CONTENTS
SECTION 1. DEFINITIONS AND RULES OF INTERPRETATION . . . . . . . . . . . 1
Section 1.1. Definitions . . . . . . . . . . . . . . . . . . . . 1
Section 1.2. Rules of Interpretation . . . . . . . . . . . . . . 20
SECTION 2. THE REVOLVING CREDIT FACILITY . . . . . . . . . . . . . . . . 21
Section 2.1. Commitment to Lend. . . . . . . . . . . . . . . . . 21
Section 2.2. Facility Fee. . . . . . . . . . . . . . . . . . . . 21
Section 2.3. Intentionally Omitted . . . . . . . . . . . . . . . 21
Section 2.4. Notes . . . . . . . . . . . . . . . . . . . . . . . 21
Section 2.5. Interest on Loans . . . . . . . . . . . . . . . . . 22
Section 2.6. Requests for Loans. . . . . . . . . . . . . . . . . 22
Section 2.7. Funds for Loans . . . . . . . . . . . . . . . . . . 23
Section 2.8. Extension of Maturity Date. . . . . . . . . . . . . 23
Section 2.9. Letters of Credit . . . . . . . . . . . . . . . . . 25
SECTION 3. REPAYMENT OF THE LOANS. . . . . . . . . . . . . . . . . . . . 27
Section 3.1. Stated Maturity . . . . . . . . . . . . . . . . . . 27
Section 3.2. Mandatory Prepayments . . . . . . . . . . . . . . . 27
Section 3.3. Optional Prepayments. . . . . . . . . . . . . . . . 27
Section 3.4. Partial Prepayments . . . . . . . . . . . . . . . . 27
Section 3.5. Effect of Prepayments . . . . . . . . . . . . . . . 27
Section 3.6. Proceeds from Debt Offering and
Equity Offering. . . . . . . . . . . . . . . . . . 28
Section 3.7. Mandatory Reduction of Commitments. . . . . . . . . 28
SECTION 4. CERTAIN GENERAL PROVISIONS. . . . . . . . . . . . . . . . . . 28
Section 4.1. Conversion Options. . . . . . . . . . . . . . . . . 28
Section 4.2. Commitment Fee. . . . . . . . . . . . . . . . . . . 29
Section 4.3. Agent's Fee . . . . . . . . . . . . . . . . . . . . 29
Section 4.4. Funds for Payments. . . . . . . . . . . . . . . . . 29
Section 4.5. Computations. . . . . . . . . . . . . . . . . . . . 30
Section 4.6. Inability to Determine Eurodollar Rate. . . . . . . 30
Section 4.7. Illegality. . . . . . . . . . . . . . . . . . . . . 31
Section 4.8. Additional Interest . . . . . . . . . . . . . . . . 31
Section 4.9. Additional Costs, Etc.. . . . . . . . . . . . . . . 31
Section 4.10. Capital Adequacy . . . . . . . . . . . . . . . . . 33
Section 4.11. Indemnity of Borrower. . . . . . . . . . . . . . . 33
Section 4.12. Interest on Overdue Amounts; Late Charge . . . . . 33
Section 4.13. Certificate. . . . . . . . . . . . . . . . . . . . 33
Section 4.14. Limitation on Interest . . . . . . . . . . . . . . 33
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SECTION 5. SECURITY. . . . . . . . . . . . . . . . . . . . . . . . . . . 34
SECTION 6. REPRESENTATIONS AND WARRANTIES. . . . . . . . . . . . . . . . 34
Section 6.1. Corporate Authority, Etc. . . . . . . . . . . . . . 34
Section 6.2. Governmental Approvals. . . . . . . . . . . . . . . 35
Section 6.3. Title to Properties; Leases . . . . . . . . . . . . 35
Section 6.4. Financial Statements. . . . . . . . . . . . . . . . 36
Section 6.5. No Material Changes . . . . . . . . . . . . . . . . 36
Section 6.6. Franchises, Patents, Copyrights, Etc. . . . . . . . 36
Section 6.7. Litigation. . . . . . . . . . . . . . . . . . . . . 36
Section 6.8. No Materially Adverse Contracts, Etc. . . . . . . . 37
Section 6.9. Compliance with Other Instruments, Laws, Etc. . . . 37
Section 6.10. Tax Status . . . . . . . . . . . . . . . . . . . . 37
Section 6.11. No Event of Default. . . . . . . . . . . . . . . . 37
Section 6.12. Holding Company and Investment Company Acts. . . . 37
Section 6.13. Absence of UCC Financing Statements, Etc.. . . . . 38
Section 6.14. Intentionally Omitted. . . . . . . . . . . . . . . 38
Section 6.15. Certain Transactions . . . . . . . . . . . . . . . 38
Section 6.16. Employee Benefit Plans . . . . . . . . . . . . . . 38
Section 6.17. Regulations U and X. . . . . . . . . . . . . . . . 38
Section 6.18. Environmental Compliance . . . . . . . . . . . . . 38
Section 6.19. Subsidiaries . . . . . . . . . . . . . . . . . . . 40
Section 6.20. Minority Interests . . . . . . . . . . . . . . . . 40
Section 6.21. Loan Documents . . . . . . . . . . . . . . . . . . 40
Section 6.22. Property . . . . . . . . . . . . . . . . . . . . . 40
Section 6.23. Brokers. . . . . . . . . . . . . . . . . . . . . . 41
Section 6.24. Other Debt . . . . . . . . . . . . . . . . . . . . 41
Section 6.25. Solvency . . . . . . . . . . . . . . . . . . . . . 41
Section 6.26. MIT Unsecured L.P. . . . . . . . . . . . . . . . . 41
SECTION 7. AFFIRMATIVE COVENANTS OF THE BORROWER . . . . . . . . . . . . 41
Section 7.1. Punctual Payment. . . . . . . . . . . . . . . . . . 42
Section 7.2. Maintenance of Office . . . . . . . . . . . . . . . 42
Section 7.3. Records and Accounts. . . . . . . . . . . . . . . . 42
Section 7.4. Financial Statements, Certificates
and Information. . . . . . . . . . . . . . . . . . 42
Section 7.5. Notices . . . . . . . . . . . . . . . . . . . . . . 44
Section 7.6. Existence; Maintenance of Properties. . . . . . . . 46
Section 7.7. Insurance . . . . . . . . . . . . . . . . . . . . . 46
Section 7.8. Taxes . . . . . . . . . . . . . . . . . . . . . . . 46
Section 7.9. Inspection of Properties and Books. . . . . . . . . 47
Section 7.10. Compliance with Laws, Contracts,
Licenses, and Permits . . . . . . . . . . . . . . 47
Section 7.11. Use of Proceeds. . . . . . . . . . . . . . . . . . 47
Section 7.12. Further Assurances . . . . . . . . . . . . . . . . 48
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Section 7.13. REIT Status. . . . . . . . . . . . . . . . . . . . 48
Section 7.14. Restrictions on Acquisitions . . . . . . . . . . . 48
Section 7.15. Unencumbered Operating Properties. . . . . . . . . 48
Section 7.16. Limiting Agreements. . . . . . . . . . . . . . . . 49
Section 7.17. Environmental and Engineering Inspections. . . . . 50
Section 7.18. Distribution of Income to the Borrower.. . . . . . 50
SECTION 8. CERTAIN NEGATIVE COVENANTS OF THE BORROWER. . . . . . . . . . 51
Section 8.1. Restrictions on Indebtedness. . . . . . . . . . . . 51
Section 8.2. Restrictions on Liens, Etc. . . . . . . . . . . . . 52
Section 8.3. Restrictions on Investments . . . . . . . . . . . . 53
Section 8.4. Merger, Consolidation . . . . . . . . . . . . . . . 55
Section 8.5. Sale and Leaseback. . . . . . . . . . . . . . . . . 55
Section 8.6. Compliance with Environmental Laws. . . . . . . . . 56
Section 8.7. Distributions . . . . . . . . . . . . . . . . . . . 57
Section 8.8. Asset Sales . . . . . . . . . . . . . . . . . . . . 58
Section 8.9. Development Activity. . . . . . . . . . . . . . . . 58
Section 8.10. Sources of Capital . . . . . . . . . . . . . . . . 58
Section 8.11. Restriction on Prepayment of Indebtedness. . . . . 59
SECTION 9. FINANCIAL COVENANTS OF THE BORROWER . . . . . . . . . . . . . 59
Section 9.1. Liabilities to Tangible Net Worth Ratio . . . . . . 59
Section 9.2. Debt Coverage . . . . . . . . . . . . . . . . . . . 59
Section 9.3. Fixed Charge Coverage . . . . . . . . . . . . . . . 59
Section 9.4. Borrowing Base. . . . . . . . . . . . . . . . . . . 59
Section 9.5. Tangible Net Worth. . . . . . . . . . . . . . . . . 60
Section 9.6. Real Estate Assets. . . . . . . . . . . . . . . . . 60
Section 9.7. Value Adjustment. . . . . . . . . . . . . . . . . . 60
Section 9.8. Annualization of Results. . . . . . . . . . . . . . 60
SECTION 10. CLOSING CONDITIONS . . . . . . . . . . . . . . . . . . . . . 60
Section 10.1. Loan Documents . . . . . . . . . . . . . . . . . . 61
Section 10.2. Certified Copies of Organizational Documents . . . 61
Section 10.3. Bylaws; Resolutions and Consents . . . . . . . . . 61
Section 10.4. Incumbency Certificate; Authorized Signers . . . . 61
Section 10.5. Opinion of Counsel . . . . . . . . . . . . . . . . 61
Section 10.6. Payment of Fees. . . . . . . . . . . . . . . . . . 62
Section 10.7. Performance; No Default. . . . . . . . . . . . . . 62
Section 10.8. Representations and Warranties . . . . . . . . . . 62
Section 10.9. Proceedings and Documents. . . . . . . . . . . . . 62
Section 10.10. Compliance Certificate. . . . . . . . . . . . . . 62
Section 10.11. Other . . . . . . . . . . . . . . . . . . . . . . 62
Section 10.12. Intentionally Omitted . . . . . . . . . . . . . . 62
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Section 10.14. Intentionally Omitted . . . . . . . . . . . . . . 62
Section 10.15. Tangible Net Worth. . . . . . . . . . . . . . . . 62
Section 10.16. Due Diligence . . . . . . . . . . . . . . . . . . 63
Section 10.17. Management of the Borrower. . . . . . . . . . . . 63
SECTION 11. CONDITIONS TO ALL BORROWINGS. . . . . . . . . . . . . . . . . 63
Section 11.1. Prior Conditions Satisfied . . . . . . . . . . . . 63
Section 11.2. Representations True; No Default . . . . . . . . . 63
Section 11.3. No Legal Impediment. . . . . . . . . . . . . . . . 63
Section 11.4. Governmental Regulation. . . . . . . . . . . . . . 63
Section 11.5. Proceedings and Documents. . . . . . . . . . . . . 63
Section 11.6. Borrowing Documents. . . . . . . . . . . . . . . . 63
SECTION 12. EVENTS OF DEFAULT; ACCELERATION; ETC.. . . . . . . . . . . . 64
Section 12.1. Events of Default and Acceleration . . . . . . . . 64
Section 12.2. Limitation of Cure Periods . . . . . . . . . . . . 67
Section 12.3. Termination of Commitments . . . . . . . . . . . . 67
Section 12.4. Remedies . . . . . . . . . . . . . . . . . . . . . 67
Section 12.5. Distribution of Proceeds . . . . . . . . . . . . . 68
SECTION 13. INTENTIONALLY OMITTED. . . . . . . . . . . . . . . . . . . . 68
SECTION 14. THE AGENT . . . . . . . . . . . . . . . . . . . . . . . . . . 68
Section 14.1. Authorization. . . . . . . . . . . . . . . . . . . 68
Section 14.2. Employees and Agents . . . . . . . . . . . . . . . 69
Section 14.3. No Liability . . . . . . . . . . . . . . . . . . . 69
Section 14.4. No Representations . . . . . . . . . . . . . . . . 69
Section 14.5. Payments . . . . . . . . . . . . . . . . . . . . . 70
Section 14.6. Holders of Notes . . . . . . . . . . . . . . . . . 71
Section 14.7. Indemnity. . . . . . . . . . . . . . . . . . . . . 71
Section 14.8. Agent as Bank. . . . . . . . . . . . . . . . . . . 71
Section 14.9. Resignation. . . . . . . . . . . . . . . . . . . . 71
Section 14.10. Duties in the Case of Enforcement . . . . . . . . 72
Section 14.11. Determinations by Agent . . . . . . . . . . . . . 72
SECTION 15. EXPENSES . . . . . . . . . . . . . . . . . . . . . . . . . . 72
SECTION 16. INDEMNIFICATION. . . . . . . . . . . . . . . . . . . . . . . 73
SECTION 17. SURVIVAL OF COVENANTS, ETC.. . . . . . . . . . . . . . . . . 74
SECTION 18. ASSIGNMENT AND PARTICIPATION . . . . . . . . . . . . . . . . 74
Section 18.1. Conditions to Assignment by Banks. . . . . . . . . 74
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Section 18.2. Register . . . . . . . . . . . . . . . . . . . . . 75
Section 18.3. New Notes. . . . . . . . . . . . . . . . . . . . . 75
Section 18.4. Participations . . . . . . . . . . . . . . . . . . 75
Section 18.5. Pledge by Bank . . . . . . . . . . . . . . . . . . 76
Section 18.6. No Assignment by Borrower. . . . . . . . . . . . . 76
Section 18.7. Disclosure . . . . . . . . . . . . . . . . . . . . 76
SECTION 19. NOTICES. . . . . . . . . . . . . . . . . . . . . . . . . . . 76
SECTION 20. RELATIONSHIP . . . . . . . . . . . . . . . . . . . . . . . . 77
SECTION 21. GOVERNING LAW; CONSENT TO JURISDICTION AND SERVICE . . . . . 78
SECTION 22. HEADINGS . . . . . . . . . . . . . . . . . . . . . . . . . . 78
SECTION 23. COUNTERPARTS . . . . . . . . . . . . . . . . . . . . . . . . 78
SECTION 24. ENTIRE AGREEMENT, ETC. . . . . . . . . . . . . . . . . . . . 78
SECTION 25. WAIVER OF JURY TRIAL . . . . . . . . . . . . . . . . . . . . 78
SECTION 26. DEALINGS WITH THE BORROWER . . . . . . . . . . . . . . . . . 79
SECTION 27. CONSENTS, AMENDMENTS, WAIVERS, ETC.. . . . . . . . . . . . . 79
SECTION 28. SEVERABILITY . . . . . . . . . . . . . . . . . . . . . . . . 80
SECTION 29. NO UNWRITTEN AGREEMENTS. . . . . . . . . . . . . . . . . . . 80
SECTION 30. TIME OF THE ESSENCE. . . . . . . . . . . . . . . . . . . . . 80
EXHIBIT A - Form of Note
EXHIBIT B - Form of Request for Loan
EXHIBIT C - Reserved
EXHIBIT D - Form of Compliance Certificate
SCHEDULE 1 - Banks and Commitments
SCHEDULE 2 - Banks and Commitments
v
SCHEDULE 3 - Initial Unencumbered Properties
SCHEDULE 4 - Adjusted Asset Values of Real Estate
SCHEDULE 6.3 - Title to Properties; Leases
SCHEDULE 6.7 - Litigation
SCHEDULE 6.19 - Subsidiaries of the Borrower
vi
THIRD AMENDED AND RESTATED REVOLVING CREDIT AGREEMENT
THIS THIRD AMENDED AND RESTATED REVOLVING CREDIT AGREEMENT (this
"Agreement") is made the 23rd day of September, 1997, by and among MERIDIAN
INDUSTRIAL TRUST, INC. (the "Borrower"), a Maryland corporation having its
principal place of business at 000 Xxxxxx Xxxxxx, 00xx Xxxxx, Xxx Xxxxxxxxx,
Xxxxxxxxxx 00000, BANKBOSTON, N.A., formerly known as The First National Bank of
Boston, TEXAS COMMERCE BANK NATIONAL ASSOCIATION, NATIONSBANK OF TEXAS, N.A.,
XXXXX FARGO BANK, N.A., DRESDNER BANK AG, FIRST AMERICAN BANK TEXAS, S.S.B. and
the other lending institutions which may become parties hereto pursuant to
Section 18 (the "Banks"), BANKBOSTON, N.A. formerly known as The First National
Bank of Boston, as Agent for the Banks (the "Agent"), and TEXAS COMMERCE BANK,
NATIONAL ASSOCIATION, as Documentation Agent for the Banks (the "Documentation
Agent"), and NATIONSBANK OF TEXAS, N.A., as Syndication Agent for the Banks (the
"Syndication Agent").
RECITALS.
WHEREAS, Borrower, Agent and certain of the Banks have entered into that
certain Revolving Credit Agreement dated February 26, 1996 (the "Original
Credit Agreement"), as amended and restated by that certain First Amended and
Restated Revolving Credit Agreement dated March 19, 1996 (the "First Amended
Credit Agreement") and that certain Second Amended and Restated Revolving Credit
Agreement dated April 21, 1997 (the "Second Amended Credit Agreement"); and
WHEREAS, Borrower has requested that the Banks increase the Total
Commitment and modify certain other provisions of the Second Amended Credit
Agreement; and
WHEREAS, Borrower, Agent and the Banks desire to amend and restate the
Second Amended Credit Agreement in its entirety;
NOW, THEREFORE, in consideration of the recitals herein and the mutual
covenants contained herein, the parties hereto hereby agree to amend and restate
the Second Amended Credit Agreement in its entirety as follows:
SECTION 1. DEFINITIONS AND RULES OF INTERPRETATION.
Section 1.1. DEFINITIONS. The following terms shall have the meanings set
forth in this Section l or elsewhere in the provisions of this Agreement
referred to below:
AGENT. BankBoston, N.A. acting as agent for the Banks, its successors and
assigns.
AGENT'S HEAD OFFICE. The Agent's head office located at 000 Xxxxxxx
Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000, or at such other location as the Agent may
designate from time to time by notice to the Borrower and the Banks.
AGENT'S SPECIAL COUNSEL. Long Xxxxxxxx & Xxxxxx LLP or such other counsel
as may be approved by the Agent.
AGREEMENT. This Third Amended and Restated Revolving Credit Agreement,
including the SCHEDULES and EXHIBITS hereto.
AGREEMENT REGARDING FEES. That certain Second Amended and Restated
Agreement Regarding Fees between the Borrower and BankBoston dated of even date
herewith.
APPLICABLE MARGIN. On any date that the lower of the Implied Ratings
issued from time to time by either of the Rating Agencies for the Borrower is an
Investment Grade Rating, the Applicable Margin shall be as set forth below based
on the lower of the Implied Ratings issued by either of the Rating Agencies:
Rating Eurodollar Rate Loans
------ ---------------------
A-/A3 or better 1.00%
BBB+/Baa1 1.10%
BBB/Baa2 or 1.20%
BBB-/Baa3
In the event that either of the Rating Agencies issues an Implied Rating
for the Borrower that is an Investment Grade Rating, or in the event of any
change in an Implied Rating of the Borrower by either of the Rating Agencies, or
if the Borrower's Implied Rating, after having obtained an Investment Grade
Rating, shall cease at any time to be an Investment Grade Rating by either of
the Rating Agencies (but subject to the provisions within the definition of the
term "Investment Grade Rating"), such change shall effect a change in the
Applicable Margin on the first Business Day after the Rating Notice Date. On
any date that the lower of the Implied Ratings for the Borrower is not an
Investment Grade Rating or the Borrower has not obtained an Investment Grade
Rating from either of the Rating Agencies, the Applicable Margin for Eurodollar
Rate Loans shall be one and three-tenths percent (1.30%). It is the intention
of the parties that if the Borrower shall only obtain an Investment Grade Rating
from one of the Rating Agencies without seeking an Investment Grade Rating from
the other of the Rating Agencies, the Borrower shall be entitled to the benefit
of the rate reductions described above; provided that if the Borrower shall have
obtained an Investment Grade Rating from both of the Rating Agencies, the lower
of the two ratings (or the loss of the Investment Grade Rating from one of the
Rating Agencies thereafter) shall control.
ASSET VALUE. With respect to the Initial Unencumbered Operating Properties
and any other parcels of Real Estate owned by the Borrower and its Subsidiaries
as of the Closing Date, the book value after adjustment for market values in
accordance with Section 9.7; with respect to Unencumbered Operating Properties
and any other parcels of Real Estate acquired after the Closing Date, the
purchase price (including improvements) and ordinary related purchase
transaction costs, without deduction for depreciation, or if developed by the
Borrower, the completed construction costs, determined in accordance with
generally accepted accounting principles without deduction for depreciation; and
with respect to the Borrower's direct or indirect interests in joint ventures or
partnerships (including the OTR Minority Interest), the book value of such
interests themselves without deduction for depreciation. If any parcel of Real
Estate is purchased as a part of a group of properties, the Asset Value shall be
calculated based upon a reasonable allocation by the Borrower of the aggregate
purchase price among all parcels of Real Estate purchased in such transaction
and agreed to by the Majority Banks.
AUTHORIZED OFFICER. As to the Borrower, each of Xxxxx X. Xxxxxxxx, as
Chairman of the Board of the Borrower; Xxxxxx Xxxxxx, as President of the
Borrower; or Xxxxx Xxxxxx, as Treasurer/Controller of the Borrower; and their
respective successors in office. As to each Guarantor, the managing general
partner of each such Guarantor and their respective successors in office.
BALANCE SHEET DATE. December 31, 1996.
BANKBOSTON. BankBoston, N.A.
BANKS. BankBoston, the other Banks that are a party to this Agreement and
any other Person who becomes an assignee of any rights of a Bank pursuant to
Section 18 (but not including any Participant, as defined in Section 18).
BASE RATE. The higher of (a) the annual rate of interest announced from
time to time by the Agent at its head office as its "base rate", or (b) one half
of one percent (0.5%) above the Federal Funds Effective Rate (rounded upwards,
if necessary, to the next one-eighth of one percent). Any change in the rate of
interest payable hereunder resulting from a change in the Base Rate shall become
effective as of the opening of business on the day on which such change in the
Base Rate becomes effective.
BASE RATE LOANS. Those Loans bearing interest calculated by reference to
the Base Rate.
BORROWER. As defined in the preamble hereto.
BORROWING BASE. At any time, the aggregate Borrowing Base for all of the
Unencumbered Operating Properties which shall be the amount which is the lesser
of (I) the lesser of (a) fifty percent (50%) of the aggregate Asset Value of all
of the Unencumbered Operating Properties, decreased by the book value of the
Subsidiary Minority Interest and, with the prior written
3
approval of the Majority Banks, increased by the book value of minority
interests of the Borrower in unconsolidated joint ventures and partnerships
recorded under generally accepted accounting principles, or (b) fifty percent
(50%) of the aggregate value of all of the Unencumbered Operating Properties,
such value being determined as follows: (x) for the Initial Unencumbered
Operating Properties and the hereafter acquired Unencumbered Operating
Properties which do not constitute Qualifying Properties, the aggregate value
shall be the amount resulting from dividing (i) the sum of aggregate Net
Operating Income for the four preceding fiscal quarters for all of such
properties MINUS the portion of aggregate Net Operating Income allocable to the
Subsidiary Minority Interest MINUS the aggregate Capital Improvement Reserve for
all of such properties by (ii) ten percent (10%); and (y) for the Qualifying
Properties, the aggregate value shall be the amount resulting from dividing (i)
the sum of aggregate Net Operating Income for the four preceding fiscal quarters
for all of the Qualifying Properties MINUS the portion of aggregate Net
Operating Income allocable to the Subsidiary Minority Interest MINUS the
aggregate Capital Improvement Reserve for all of the Qualifying Properties by
(ii) nine and one-fourth percent (9.25%), and, with the prior written approval
of the Majority Banks, increased by the book value of minority interests of the
Borrower in unconsolidated joint ventures and partnerships recorded under
generally accepted accounting principles; or (c) the aggregate Debt Service
Coverage Amount for all of the Unencumbered Operating Properties and, with the
prior written approval of the Majority Banks, increased by the book value of
minority interests of the Borrower in unconsolidated joint ventures and
partnerships recorded under generally accepted accounting principles; and (II)
the lesser of (a) fifty-five percent (55%) of the aggregate Asset Value of all
of the Unencumbered Operating Properties (excluding the OTR Minority Interest
and the minority interests of the Borrower in unconsolidated joint ventures and
partnerships approved by the Majority Banks), decreased by the book value of the
Subsidiary Minority Interest, or (b) fifty-five percent (55%) of the aggregate
value of all of the Unencumbered Operating Properties (excluding the OTR
Minority Interest and the minority interests of the Borrower in unconsolidated
joint ventures and partnerships approved by the Majority Banks), such value
being determined as follows: (x) for the Initial Unencumbered Operating
Properties and the hereafter acquired Unencumbered Operating Properties which do
not constitute Qualifying Properties, the aggregate value shall be the amount
resulting from dividing (i) the sum of aggregate Net Operating Income for the
four preceding fiscal quarters for all of such properties MINUS the portion of
aggregate Net Operating Income allocable to the Subsidiary Minority Interest
MINUS the aggregate Capital Improvement Reserve for all of such properties by
(ii) ten percent (10%); and (y) for the Qualifying Properties, the aggregate
value shall be the amount resulting from dividing (i) the sum of aggregate Net
Operating Income for the four preceding fiscal quarters for all of the
Qualifying Properties MINUS the portion of aggregate Net Operating Income
allocable to the Subsidiary Minority Interest MINUS the aggregate Capital
Improvement Reserve for all of the Qualifying Properties by (ii) nine and
one-fourth percent (9.25%); or (c) the aggregate Debt Service Coverage Amount
for all of the Unencumbered Operating Properties (excluding the OTR Minority
Interest and the minority interests of the Borrower in unconsolidated joint
ventures and partnerships approved by the Majority Banks); and the amount which
is the lesser of (I) or (II) shall be the aggregate Borrowing Base for all of
the Unencumbered Operating Properties.
4
BUILDING. With respect to any portion of the Real Estate, all of the
buildings, structures and improvements now or hereafter located thereon.
BUSINESS DAY. Any day on which banking institutions located in the same
city and state as the head office of the Agent are open for the transaction of
banking business and, in the case of Eurodollar Rate Loans, which also is a
Eurodollar Business Day.
CAPITAL IMPROVEMENT PROJECT. With respect to any Real Estate now or
hereafter owned by the Borrower or its Subsidiaries which is utilized
principally for industrial purposes, capital improvements consisting of
rehabilitation, refurbishment, replacement and improvements to the existing
Buildings on such Real Estate which may be properly capitalized under generally
accepted accounting principles.
CAPITAL IMPROVEMENT RESERVE. With respect to the Real Estate or any
portion thereof, a reserve for Capital Improvement Projects in the amount of
fifteen cents ($0.15) multiplied by the average Gross Rentable Area contained
therein for the period in question.
CAPITALIZED LEASE. A lease under which a Person is the lessee or obligor,
the discounted future rental payment obligations under which are required to be
capitalized on the balance sheet of the lessee or obligor in accordance with
generally accepted accounting principles.
CASH AVAILABLE FOR DISTRIBUTION. With respect to any Person for any fiscal
period, an amount equal to Funds from Operations, MINUS the Capital Improvement
Reserve with respect to the Real Estate, MINUS actual tenant improvements and
leasing commissions incurred during such fiscal period.
CERCLA. See Section 6.18.
CLOSING DATE. The first date on which all of the conditions set forth in
Section 10 and Section 11 have been satisfied.
CODE. The Internal Revenue Code of 1986, as amended.
COMMITMENT. With respect to each Bank, the amount set forth on SCHEDULE 1
hereto as the amount of such Bank's Commitment to make or maintain Loans to the
Borrower or purchase participations in Letters of Credit issued by the Agent to
the Borrower, as the same may be changed from time to time in accordance with
the terms of this Agreement; PROVIDED, however, that after June 23, 1998, each
Bank's Commitment shall be as specified in SCHEDULE 2.
COMMITMENT PERCENTAGE. With respect to each Bank, the percentage set forth
on SCHEDULE 1 hereto as such Bank's percentage of the aggregate Commitments of
all of the Banks; PROVIDED, however, that after June 23, 1998, each Bank's
percentage shall be as specified in SCHEDULE 2.
5
COMPLIANCE CERTIFICATE. See Section 7.4(e).
CONSOLIDATED or COMBINED. With reference to any term defined herein, that
term as applied to the accounts of the Borrower and its Subsidiaries,
consolidated or combined in accordance with generally accepted accounting
principles.
CONSOLIDATED TANGIBLE NET WORTH. The amount by which Consolidated Total
Assets exceed Consolidated Total Liabilities, and LESS the sum of:
(a) the total book value of all assets of a Person properly
classified as intangible assets under generally accepted accounting
principles, including such items as good will, the purchase price of
acquired assets in excess of the fair market value thereof, trademarks,
trade names, service marks, brand names, copyrights, patents and licenses,
and rights with respect to the foregoing; PLUS
(b) all amounts representing any write-up in the book value of any
assets of such Person resulting from a revaluation thereof subsequent to
the Balance Sheet Date; PLUS
(c) prepaid fees and deferred charges (regardless of whether
classified as intangible assets under generally accepted accounting
principles).
CONSOLIDATED TOTAL ASSETS. All assets of the Borrower and its Subsidiaries
determined on a Consolidated basis in accordance with generally accepted
accounting principles, provided that all Real Estate shall be valued on an
undepreciated cost basis. The assets of the Borrower and its Subsidiaries on
the consolidated financial statements of the Borrower and its Subsidiaries shall
be adjusted as of the Closing Date for market values in accordance with
Section 9.7 and to reflect the Borrower's allocable share of such asset, for the
relevant period or as of the date of determination, taking into account (a) the
relative proportion of each such item derived from assets directly owned by the
Borrower and from assets owned by its respective Subsidiaries, and (b) the
Borrower's respective ownership interest in its Subsidiaries.
CONSOLIDATED TOTAL LIABILITIES. All liabilities of the Borrower and its
Subsidiaries determined on a Consolidated basis in accordance with generally
accepted accounting principles and all Indebtedness of the Borrower and its
Subsidiaries, whether or not so classified.
CONVERSION REQUEST. A notice given by the Borrower to the Agent of its
election to convert or continue a Loan in accordance with Section 4.1.
DEBT OFFERING. The issuance and sale by the Borrower or the Guarantor of
any debt securities of the Borrower or the Guarantor.
DEBT SERVICE. For any period, the sum of all interest (including
capitalized interest) and
6
mandatory scheduled principal payments due and payable during such period with
respect to any Indebtedness excluding any balloon payments due upon maturity of
any Indebtedness.
DEBT SERVICE COVERAGE AMOUNT. At any time determined by Agent, an amount
equal to the maximum principal loan amount which, when bearing interest at a
rate per annum equal to the greater of (a) the then-current annual yield on ten
(10) year obligations issued by the United States Treasury most recently prior
to the date of determination plus two percent (2%) and (b) ten percent (10%),
and payable based on a twenty-five year mortgage style amortization schedule,
could be paid by the monthly principal and interest payment amount resulting
from dividing (x) the quotient obtained by dividing an amount equal to (i) the
sum of the Net Operating Income from an individual Unencumbered Operating
Property for the preceding four fiscal quarters (with respect to a DownREIT,
that portion of the Net Operating Income allocable to the Subsidiary Minority
Interest shall be deducted from the total Net Operating Income), MINUS the
Capital Improvement Reserve for such Unencumbered Operating Property, by (ii)
1.75 by (y) 12.
DEFAULT. See Section 12.1.
DISTRIBUTION. The declaration or payment of any dividend or distribution
on or in respect of any shares of beneficial interest of the Borrower or the
Guarantor, other than dividends or distributions payable solely in equity
securities of the Borrower or the Guarantor; the purchase, redemption, exchange
or other retirement of any shares of beneficial interest of the Borrower or the
Guarantor, directly or indirectly through a Subsidiary of the Borrower or the
Guarantor or otherwise, including without limitation, the purchase of shares of
beneficial interest of the Borrower for cash pursuant to the Excepted Holder
Agreement (as defined in the definition of Indebtedness), but excluding the
purchase of shares of beneficial interest of the Borrower from executive
officers of the Borrower where the only consideration for such purchase is the
extinguishing of notes made by such executive officers and held by the Borrower;
the return of capital by the Borrower to its shareholders as such; or any other
distribution on or in respect of any shares of beneficial interest of the
Borrower or the Guarantor, including, without limitation, interest and premium
paid on the Debentures (as defined in the definition of Indebtedness).
DOCUMENTATION AGENT. As defined in the preamble hereto.
DOLLARS or $. Dollars in lawful currency of the United States of America.
DOMESTIC LENDING OFFICE. Initially, the office of each Bank designated as
such in SCHEDULE 1 hereto; thereafter, such other office of such Bank, if any,
located within the United States that will be making or maintaining Base Rate
Loans.
DOWNREIT. A partnership, limited liability company or other entity formed
by the Borrower and another party for the primary purpose of enabling the
Borrower to acquire industrial properties from third parties that become
investors in such entity on a tax advantaged basis to such investors by enabling
them to defer taxes until such time as they convert their
7
ownership interest in the DownREIT to common stock of the Borrower. The
formation, structure and operation of each DownREIT shall be subject to the
prior written approval of the Majority Banks, but shall generally be structured
such that (i) the Borrower directly controls its operations and assets,
including, without limitation, the right to sell, transfer, convey or encumber
such assets; (ii) the investors will have the right to convert their equity to
common stock of the Borrower, but will not have buy-sell or similar rights;
(iii) any debt of the DownREIT shall be subordinated to repayment of the
Obligations pursuant to a subordination and standstill agreement in form and
substance satisfactory to the Majority Banks and shall be limited to no more
than a thirty percent (30%) loan to value ratio determined pursuant to such
value assessments satisfactory to the Majority Banks; and (iv) the DownREIT
shall execute and deliver to the Banks a guaranty of payment and performance in
form substantially similar to the Guaranty.
DRAWDOWN DATE. The date on which any Loan is made, and the date on which
any Loan which is made prior to the Maturity Date is converted or combined in
accordance with Section 4.1.
EMPLOYEE BENEFIT PLAN. Any employee benefit plan within the meaning of
Section 3(3) of ERISA maintained or contributed to by the Borrower or any ERISA
Affiliate, other than a Multi-employer Plan.
ENVIRONMENTAL LAWS. See Section 6.18(a).
EQUITY OFFERING. The issuance and sale by the Borrower or the Guarantor of
any equity securities of the Borrower or the Guarantor.
ERISA. The Employee Retirement Income Security Act of 1974, as amended and
in effect from time to time and any rules and regulations promulgated pursuant
thereto.
ERISA AFFILIATE. Any Person which is treated as a single employer with the
Borrower under Section 414 of the Code.
ERISA REPORTABLE EVENT. A reportable event with respect to a Guaranteed
Pension Plan within the meaning of Section 4043 of ERISA and the regulations
promulgated thereunder as to which the requirement of notice has not been
waived.
EUROCURRENCY RESERVE RATE. For any day with respect to a Eurodollar Rate
Loan, the maximum rate (expressed as a decimal) at which the Reference Bank
would be required to maintain reserves under Regulation D of the Board of
Governors of the Federal Reserve System (or any successor or similar regulations
relating to such reserve requirements) against "Eurocurrency Liabilities" (as
that term is used in Regulation D or any successor or similar regulation), if
such liabilities were outstanding. The Eurocurrency Reserve Rate shall be
adjusted automatically on and as of the effective date of any change in the
Eurocurrency Reserve Rate.
8
EURODOLLAR BUSINESS DAY. Any day on which commercial banks are open for
international business (including dealings in Dollar deposits) in London or such
other Eurodollar interbank market as may be selected by the Agent in its sole
discretion acting in good faith.
EURODOLLAR LENDING OFFICE. Initially, the office of each Bank designated
as such in SCHEDULE 1 hereto; thereafter, such other office of such Bank, if
any, that shall be making or maintaining Eurodollar Rate Loans.
EURODOLLAR RATE. For any Interest Period with respect to a Eurodollar Rate
Loan, the rate per annum equal to the quotient (rounded upwards to the nearest
1/16 of one percent) of (i) the rate at which the Reference Bank's Eurodollar
Lending Office is offered Dollar deposits two Eurodollar Business Days prior to
the beginning of such Interest Period in whatever interbank eurodollar market
may be selected by the Reference Bank in its sole discretion, acting in good
faith, for delivery on the first day of such Interest Period for the number of
days comprised therein and in an amount comparable to the amount of the
Eurodollar Rate Loan to which such Interest Period applies (based upon Telerate
quotes, page 3750, or such other page as contains the same information as
contained on page 3750), divided by (ii) a number equal to 1.00 minus the
Eurocurrency Reserve Rate.
EURODOLLAR RATE LOANS. Loans bearing interest calculated by reference to a
Eurodollar Rate.
EVENT OF DEFAULT. See Section 12.1.
EXTENSION REQUEST. See Section 2.8.
FEDERAL FUNDS EFFECTIVE RATE. For any day, the rate per annum equal to the
weighted average of the rates on overnight Federal funds transactions with
members of the Federal Reserve System arranged by Federal funds brokers, as
published for such day (or, if such day is not a Business Day, for the next
preceding Business Day) by the Federal Reserve Bank of New York, or, if such
rate is not so published for any day that is a Business Day, the average of the
quotations for such day on such transactions received by the Agent from three
Federal funds brokers of recognized standing selected by the Agent.
FUNDS FROM OPERATIONS. With respect to any Person for any fiscal period,
an amount equal to the Net Income (or Deficit) of such Person computed in
accordance with generally accepted accounting principles, excluding financing
costs and gains (or losses) from debt restructuring and sales of property, PLUS
depreciation and amortization and other non-cash items, PLUS the amortized
portion of the Initial Loan Fees for such fiscal period (excluding amortization
of loan fees not constituting Initial Loan Fees).
GENERALLY ACCEPTED ACCOUNTING PRINCIPLES. Principles that are (a)
consistent with the principles promulgated or adopted by the Financial
Accounting Standards Board and its
9
predecessors, as in effect from time to time and (b) consistently applied with
past financial statements of the Borrower or any of its Subsidiaries adopting
the same principles; PROVIDED that a certified public accountant would, insofar
as the use of such accounting principles is pertinent, be in a position to
deliver an unqualified opinion (other than a qualification regarding changes in
generally accepted accounting principles) as to financial statements in which
such principles have been properly applied.
GROSS CASH RECEIPTS. Gross Cash Receipts shall mean with respect to any
parcel of Real Estate the sum of cash recorded during any period by or for the
account of the Borrower or the Guarantor in payment of the following items:
(b) Rentals, including minimum or base rent, percentage rent,
and rent attributable to recovery of tenant improvements costs
received from tenants occupying space in such parcel of Real Estate
during such period (prepaid rentals shall be treated in accordance
with generally accepted accounting principles);
(c) All amounts paid by tenants to the Borrower or the Guarantor
under Leases with respect to taxes and assessments imposed on such
parcel of Real Estate or in reimbursement of operating expenses;
(d) Parking revenues received in connection with the operation
of parking facilities; and
(e) Receipts from vending machines, recreational facilities and
any and all other operating revenues received from such parcel of Real
Estate.
In the event that the Borrower or the Guarantor receives a payment of Gross
Cash Receipts other than on a monthly basis, then for the purposes of
determining the Gross Cash Receipts for a four quarter period (a "Determination
Period"), only the amount of such payment which relates to the Determination
Period (as opposed to a period either before or after the Determination Period)
shall be included in the calculation of Gross Cash Receipts for such period.
Any payment of Gross Cash Receipts received from a tenant of a parcel of
Real Estate which is delinquent shall not be included as Gross Cash Receipts
until all delinquencies relating to such tenant for any prior periods have been
paid in full. Gross Cash Receipts shall not include any amounts payable by
tenants holding over pursuant to expired or terminated Leases, nor any amounts
paid by tenants as late charges, default interest or such other similar charges.
If the Borrower or the Guarantor shall receive cash by reason of fire or
other casualty insurance proceeds, proceeds of rental, loss or business
interruption insurance (except to the extent that such proceeds replace the
rental payments which otherwise would have been due to
10
the Borrower or the Guarantor from tenants of a parcel of Real Estate), the
forfeiting by tenants of security or other deposits or payments made by tenants
to cancel their Leases or the recovery by the Borrower or the Guarantor of
future rentals under Leases (regardless of whether or not discounted to present
value), or a taking by eminent domain, a loan or advance, a sale, transfer,
assignment or other disposition of any part of a parcel of Real Estate or any
interest therein, or any other items of income which are extraordinary or of a
non-recurring nature, such amounts shall not be included in Gross Cash Receipts.
Except as otherwise provided herein, Gross Cash Receipts shall be
determined on the basis of generally accepted accounting principles applied on a
consistent basis.
In the event that the Borrower shall not have owned a parcel of Real Estate
for an entire Determination Period, the Agent shall annualize the available data
in such manner as the Agent shall determine in its sole discretion so as to
allow calculations and other tests to be performed with respect to Gross Cash
Receipts for a Determination Period.
GROSS RENTABLE AREA. With respect to any portion of the Real Estate, the
floor area of a Building (exclusive of common areas) available for leasing to
tenants determined in accordance with the Rent Roll for such Real Estate, the
manner of such determination to be consistent for all Real Estate unless
otherwise approved by the Agent.
GUARANTEED PENSION PLAN. Any employee pension benefit plan within the
meaning of Section 3(2) of ERISA maintained or contributed to by the Borrower or
any ERISA Affiliate the benefits of which are guaranteed on termination in full
or in part by the PBGC pursuant to Title IV of ERISA, other than a
Multi-employer Plan.
GUARANTOR. Collectively, MIT Unsecured L.P., a California limited
partnership, having a usual place of business at c/o Meridian Industrial Trust,
Inc., 000 Xxxxxx Xxxxxx, 00xx Xxxxx, Xxx Xxxxxxxxx, Xxxxxxxxxx 00000, and any
DownREIT or Subsidiary of the Borrower owning an Unencumbered Operating Property
who executes a guaranty of payment and performance in form substantially similar
to the Guaranty.
GUARANTY. The Guaranty of Payment and Performance dated February 26, 1996
made by the Guarantor in favor of Agent and the Banks, as modified by that
certain First Amendment to Guaranty of Payment and Performance dated March 19,
1996, as amended and restated by that certain First Amended and Restated
Guaranty of Payment and Performance dated April 21, 1997, and as amended and
restated by that certain Second Amended and Restated Guaranty of Payment and
Performance dated of even date herewith, and as the same may be modified or
amended hereafter, such Guaranty to be in form and substance satisfactory to the
Agent.
HAZARDOUS SUBSTANCES. See Section 6.18(b).
IMPLIED RATING. With respect to a Person, the most recent rating issued
from time to time
11
by a Rating Agency as is applicable to such Person's senior unsecured long-term
debt, or if no such senior unsecured long-term debt is outstanding, then the
most recent rating issued from time to time by a Rating Agency as would
hypothetically be applicable to such Person's senior unsecured long-term debt
(i.e., an implied rating).
INDEBTEDNESS. All obligations, contingent and otherwise, that in
accordance with generally accepted accounting principles should be classified
upon the obligor's balance sheet as liabilities, or to which reference should be
made by footnotes thereto, including in any event and whether or not so
classified: (a) all debt and similar monetary obligations, whether direct or
indirect (including, without limitation, any obligations evidenced by bonds,
debentures, notes or similar debt instruments and all subordinated debt);
(b) all liabilities secured by any mortgage, pledge, security interest, lien,
charge or other encumbrance existing on property owned or acquired subject
thereto, whether or not the liability secured thereby shall have been assumed;
(c) all guarantees, endorsements and other contingent obligations whether direct
or indirect in respect of indebtedness of others, including any obligation to
supply funds to or in any manner to invest directly or indirectly in a Person,
to purchase indebtedness, or to assure the owner of indebtedness against loss
through an agreement to purchase goods, supplies or services for the purpose of
enabling the debtor to make payment of the indebtedness held by such owner or
otherwise, and the obligation to reimburse the issuer in respect of any letter
of credit; (d) any obligation as a lessee or obligor under a Capitalized Lease;
(e) all obligations to purchase under agreements to acquire, or otherwise to
contribute money with respect to, properties under "development" within the
meaning of Section 8.9; (f) a Person's pro rata share of any of the
above-described obligations of its unconsolidated affiliates; and (g) all
amounts available to be drawn under Letters of Credit; PROVIDED, HOWEVER, that
with respect to the conversion of certain preferred stock of the Borrower into
debentures of the Borrower (the "Debentures") pursuant to that certain Excepted
Holder Agreement to be entered into between the Borrower and State Street Bank
and Trust Company, as Trustee for Ameritech Pension Trust ("Ameritech"), and
that certain letter agreement (the "Letter Agreement") dated December 29, 1995,
between the Borrower and Ameritech, such Debentures shall be excluded from the
definition of Indebtedness for the purposes of this Agreement upon the approval
by the Banks of each and every term of the Debentures in the exercise of their
sole discretion, including, without limitation, the terms of the subordination
of such Debentures to payment of the Loans and all renewals, modifications and
extensions thereof, and provided further that Ameritech shall enter into a
subordination and standstill agreement in form and substance satisfactory to the
Banks in their sole discretion.
INITIAL LOAN FEES. The fees payable by the Borrower in connection with the
closing of the transactions contemplated by the Original Credit Agreement, the
First Amended Credit Agreement, this Agreement and the restructure of the
Prudential Loan completed on May 31, 1995, including any and all fees paid or
which may be paid by the Borrower after such date in connection with
collateralizing or modifying the collateralization of the Prudential Loan
pursuant to such restructuring.
INITIAL UNENCUMBERED OPERATING PROPERTIES. The Unencumbered Operating
Properties
12
described on SCHEDULE 3 attached hereto.
INTEREST PAYMENT DATE. As to each Loan, the first day of each calendar
month during the term of such Loan and with respect to each Eurodollar Rate
Loan, the last day of each Interest Period during the term of such Eurodollar
Rate Loan.
INTEREST PERIOD. With respect to each Eurodollar Rate Loan (a) initially,
the period commencing on the Drawdown Date of such Loan and ending one, two,
three or six months thereafter, and (b) thereafter, each period commencing on
the day following the last day of the next preceding Interest Period applicable
to such Loan and ending on the last day of one of the periods set forth above,
as selected by the Borrower in a Conversion Request; PROVIDED that all of the
foregoing provisions relating to Interest Periods are subject to the following:
(A) if any Interest Period with respect to a Eurodollar Rate Loan
would otherwise end on a day that is not a Eurodollar Business Day, that
Interest Period shall end and the next Interest Period shall commence on
the next preceding or succeeding Eurodollar Business Day as determined
conclusively by the Reference Bank in accordance with the then current bank
practice in the applicable eurodollar interbank market;
(B) if the Borrower shall fail to give notice as provided in Section
4.1, the Borrower shall be deemed to have requested a conversion of the
affected Eurodollar Rate Loan to a Base Rate Loan on the last day of the
then current Interest Period with respect thereto; and
(C) no Interest Period relating to any Eurodollar Rate Loan shall
extend beyond the Maturity Date.
INVESTMENT GRADE RATING. With respect to any Person, an Implied Rating
equal to or more favorable than BBB- with respect to a rating issued by Standard
& Poors Corporation (or in the case of a rating issued by Xxxxx'x Investors
Service, Inc., a rating of Baa3). If, at any time after a Person obtains an
Investment Grade Rating, (a) no Implied Rating for such Person's senior
unsecured long-term debt shall have been issued or confirmed in writing by
either of the Rating Agencies within the previous 365 days, or (b) the rating
system of either of the Rating Agencies (as opposed to the rating of a Person)
shall change, or (c) either of the Rating Agencies shall no longer perform the
functions of a securities rating agency, then the Borrower and the Agent shall
promptly negotiate in good faith to amend the reference to the specific ratings
in this definition for the determination of the Investment Grade Rating, and
pending such amendment, the applicable rating in effect as of the date the event
described in this paragraph occurred shall continue to apply.
INVESTMENTS. With respect to any Person, all shares of capital stock,
evidences of Indebtedness and other securities issued by any other Person, all
loans, advances, or extensions
13
of credit to, or contributions to the capital of, any other Person, all
purchases of the securities or business or integral part of the business of any
other Person and commitments and options to make such purchases, all interests
in real property, and all other investments; PROVIDED, HOWEVER, that the term
"Investment" shall not include (i) equipment, inventory and other tangible
personal property acquired in the ordinary course of business, or (ii) current
trade and customer accounts receivable for services rendered in the ordinary
course of business and payable in accordance with customary trade terms. In
determining the aggregate amount of Investments outstanding at any particular
time: (a) the amount of any investment represented as a guaranty shall be taken
at not less than the principal amount of the obligations guaranteed and still
outstanding; (b) there shall be included as an Investment all interest accrued
with respect to Indebtedness constituting an Investment unless and until such
interest is paid; (c) there shall be deducted in respect of each such Investment
any amount received as a return of capital (but only by repurchase, redemption,
retirement, repayment, liquidating dividend or liquidating distribution); (d)
there shall not be deducted in respect of any Investment any amounts received as
earnings on such Investment, whether as dividends, interest or otherwise, except
that accrued interest included as provided in the foregoing clause (b) may be
deducted when paid; and (e) there shall not be deducted from the aggregate
amount of Investments any decrease in the value thereof.
LEASES. Leases, licenses and agreements whether written or oral, relating
to the use or occupation of space in the Building or on the Real Estate by
persons other than the Borrower or the Guarantor.
LETTER OF CREDIT. A standby letter of credit which is payable upon
presentation of a sight draft and other documents, as originally issued pursuant
to this Agreement or as amended, modified, extended, reviewed or supplemented.
LETTER OF CREDIT REQUEST. See Section 2.9.
LIENS. See Section 8.2.
LOAN DOCUMENTS. This Agreement, the Notes, the Guaranty and all other
documents, instruments or agreements executed or delivered by or on behalf of
the Borrower or the Guarantor evidencing or securing the Loans.
LOAN REQUEST. See Section 2.6.
LOANS. The aggregate Loans to be made by the Banks hereunder. Amounts
drawn under a Letter of Credit shall also be considered Loans as provided in
Section 2.9(f).
MAJORITY BANKS. As of any date, the Agent and the Bank or Banks whose
aggregate Commitment Percentage is equal to or greater than the percentage
required to approve such matter as set forth in that certain Intercreditor
Agreement dated of even date herewith among the Banks, and as disclosed by the
Agent to the Borrower from time to time.
14
MATURITY DATE. April 3, 2000, as the same may be extended as provided in
Section 2.8 or such earlier date on which the Loans shall become due and payable
pursuant to the terms hereof.
MULTI-EMPLOYER PLAN. Any Multi-employer plan within the meaning of Section
3(37) of ERISA maintained or contributed to by the Borrower or any ERISA
Affiliate.
NET CAPITAL EXPENDITURES. With respect to any Person or asset for any
fiscal period, an amount equal to the amount of capital expenditures incurred by
such Person or with respect to such asset during such fiscal period determined
in accordance with generally accepted accounting principles.
NET INCOME (OR DEFICIT). With respect to any Person (or any asset of any
Person) for any fiscal period, the net income (or deficit) of such Person (or
attributable to such asset), after deduction of all expenses, taxes and other
proper charges, determined in accordance with generally accepted accounting
principles.
NET OPERATING INCOME. During any period for any parcel of Real Estate, the
sum of (a) Gross Cash Receipts from such parcel of Real Estate less (b)
Operating Expenses for such parcel of Real Estate.
NON-RECOURSE INDEBTEDNESS. Indebtedness of the Borrower or any Subsidiary
which is secured by one or more parcels of Real Estate and related personal
property or interests therein and Short-term Investments and is not a general
obligation of the Borrower or any Subsidiary, the holder of such Indebtedness
having recourse solely to the parcels of Real Estate securing such Indebtedness,
the improvements thereon, related personal property and leases thereon, and the
rents and profits thereof and the Short-term Investments securing such
Indebtedness.
NOTES. See Section 2.4.
NOTICE. See Section 19.
OBLIGATIONS. All indebtedness, obligations and liabilities of the Borrower
to any of the Banks and the Agent, individually or collectively, under this
Agreement or any of the other Loan Documents or in respect of any of the Loans,
the Letters of Credit or the Notes, or other instruments at any time evidencing
any of the foregoing, whether existing on the date of this Agreement or arising
or incurred hereafter, direct or indirect, joint or several, absolute or
contingent, matured or unmatured, liquidated or unliquidated, secured or
unsecured, arising by contract, operation of law or otherwise.
OPERATING CASH FLOW. With respect to any parcel of Real Estate for any
period, an amount equal to Net Operating Income less Net Capital Expenditures.
15
OPERATING EXPENSES. With respect to any parcel of Real Estate during any
period the sum of the following:
(a) All taxes and assessments imposed upon such parcel of Real
Estate actually paid by or on behalf of the Borrower or the
Guarantor (to the extent not paid by tenants of the Borrower
or the Guarantor) during such period in accordance with
generally accepted accounting principles (or if such taxes or
assessments are paid in advance with respect to future
periods, such payment shall be amortized over the period
covered by such payment);
(b) The amounts paid by or on behalf of the Borrower or the
Guarantor (to the extent not paid by tenants of the Borrower
or the Guarantor) in such period in accordance with generally
accepted accounting principles on account of insurance
premiums for insurance carried in connection with such parcel
of Real Estate or the Borrower's or the Guarantor's ownership
and operation thereof, and the deductible amounts expended by
the Borrower or the Guarantor not reimbursed under any such
insurance (or if such insurance premiums are paid in advance
with respect to future periods, such payment shall be
amortized over the period covered by such payment); and
(c) Operating expenses paid by or on behalf of the Borrower or
the Guarantor in such period for the operation, cleaning,
marketing, maintenance and repair of such parcel of Real
Estate properly chargeable against income according to
generally accepted accounting principles, including
management fees.
For the purposes of this Agreement, Operating Expenses shall not include any of
the following:
(i) Foreign, U.S., state and local income taxes, franchise taxes or
other taxes based on the income imposed on the Borrower or the
Guarantor generally and not as owner of such parcel of Real
Estate;
(ii) Depreciation and any other non-cash expenditures of the Borrower
or the Guarantor for income tax purposes;
(iii) Any improvements to such parcel of Real Estate of a capital
nature (as determined in accordance with generally accepted
accounting practices);
(iv) Any expense paid or incurred in connection with the sale of all
or any part of such parcel of Real Estate or any interest
therein;
16
(v) All costs, expenses, fees, commissions or other compensation paid
by or on behalf of the Borrower or the Guarantor in connection
with the renovation, improvement or development of such parcel of
Real Estate to the extent treated as Net Capital Expenditures;
(vi) Any payment of principal or interest under the Notes or other
fees or charges payable under this Agreement; and
(vii) The Capital Improvement Reserve.
Operating Expenses shall be determined on the basis of sound cash basis
accounting practices applied on a consistent basis, modified as described above.
OTR MINORITY INTEREST. The Borrower's minority partnership interest in
Meridian Ohio Limited Partnership, a Delaware limited partnership, as recorded
under generally accepted accounting principles, without deduction for
depreciation.
OTR MINORITY INTEREST PROPERTY. All real property at any time owned by
Meridian Ohio Limited Partnership, a Delaware limited partnership.
OUTSTANDING. With respect to the Loans, the aggregate unpaid principal
thereof as of any date of determination. With respect to the Letters of Credit,
the aggregate amount of amounts available to be drawn under Letters of Credit.
PBGC. The Pension Benefit Guaranty Corporation created by Section 4002 of
ERISA and any successor entity or entities having similar responsibilities.
PERMITTED LIENS. Liens, security interests and other encumbrances
permitted by Section 8.2.
PERSON. Any individual, corporation, partnership, trust, unincorporated
association, business, or other legal entity, and any government or any
governmental agency or political subdivision thereof.
PROSPECTUS. The prospectus included in the registration statement on Form
S-4 of the Borrower dated November 19, 1996 and filed with the SEC.
PRUDENTIAL LOAN. That certain $66,100,000 Non-recourse loan made by The
Prudential Life Insurance Company of America to Borrower, as restructured by the
predecessors in interest of the Borrower on May 31, 1995, and as amended on
December 14, 1995.
QUALIFYING PROPERTY. With respect to the Unencumbered Operating
Properties, an Unencumbered Operating Property meeting all of the following
requirements at the time of determination: (a) age does not exceed twelve (12)
years; (b) total Gross Rentable Area is not
17
less than 50,000 square feet; (c) use is non-specialized; and (d) at least two
of the following three characteristics are present: (i) finished out air
conditioned office space does not exceed twenty percent (20%) of total Gross
Rentable Area, (ii) ceiling clearance height is not less than twenty-two (22)
feet, and (iii) the average amount of Gross Rentable Area covered by each Lease
is not less than 20,000 square feet.
RATING AGENCIES. Standard & Poor's Corporation and Xxxxx'x Investors
Service, Inc.
RATING NOTICE. See Section 7.4(k).
RATING NOTICE DATE. The earlier of (a) the date a Rating Notice is
received by the Agent, or (b) the date the Agent, having received actual notice
of a change by the Rating Agency of the Borrower's Implied Rating, sends notice
to the Borrower of such change, provided that nothing contained herein shall
imply any obligation of the Agent to monitor such rating changes.
REAL ESTATE. All real property at any time owned or leased (as lessee or
sublessee) by the Borrower or any of its Subsidiaries.
RECORD. The grid attached to any Note, or the continuation of such grid,
or any other similar record, including computer records, maintained by any Bank
with respect to any Loan referred to in such Note.
REFERENCE BANK. Agent.
REGISTER. See Section 18.2.
REIT STATUS. With respect to the Borrower, its status as a real estate
investment trust as defined in Section 856(a) of the Code.
RELEASE. See Section 6.18(c)(iii).
RENT ROLL. A report prepared and certified by the Borrower or the
Guarantor, as applicable, showing for each unit its type, location, Gross
Rentable Area, occupancy status, lease expiration date, market rent, lease rent
and other information in substantially the form presented to the Banks prior to
the date hereof or in such other form as may have been approved by the Agent,
such approval not to be unreasonably withheld.
SEC. The federal Securities and Exchange Commission.
SHORT-TERM INVESTMENTS. Investments described in subsections (a) through
(g), inclusive, of Section 8.3.
STATE. A state of the United States of America.
18
SUBSIDIARY. Any corporation, association, partnership, trust, or other
business entity of which the designated parent shall at any time own directly or
indirectly through a Subsidiary or Subsidiaries a controlling interest that
would require preparation of Consolidated financial statements under generally
accepted accounting principles.
SUBSIDIARY MINORITY INTEREST. The minority interest in a DownREIT or other
Consolidated Subsidiary owned by Persons other than Borrower or its Subsidiaries
as recorded under generally accepted accounting principles.
SYNDICATION AGENT. As defined in the preamble hereto.
TEST PERIOD. See Section 9.2.
TOTAL COMMITMENT. The sum of the Commitments of the Banks, as in effect
from time to time.
TYPE. As to any Loan, its nature as a Base Rate Loan or a Eurodollar Rate
Loan.
UNDER DEVELOPMENT. Any Real Estate shall be considered under development
until such time as (i) a Certificate of Occupancy has been obtained, (ii)
seventy percent (70%) of the gross leasable area is leased and occupied, and
(iii) the Gross Cash Receipts from the operation of such Real Estate shall have
equaled or exceeded Operating Expenses for three (3) consecutive months.
UNENCUMBERED OPERATING PROPERTIES. Real Estate which is owned one hundred
percent (100%) in fee simple by the Borrower or the Guarantor and which
satisfies all of the following conditions:
(a) each of the Unencumbered Operating Properties shall be free and
clear of all Liens other than Liens permitted in Section 8.2(ii) and (iv);
(b) to the best of the Borrower's knowledge and belief, none of the
Unencumbered Operating Properties shall have any material environmental,
structural, title, survey or other defects that would give rise to a materially
adverse effect as to the value, use of or ability to sell or refinance such
property; and
(c) each of the Unencumbered Operating Properties shall consist
solely of Real Estate (i) which is fully operational and (ii) with respect to
which valid certificates of occupancy for all Buildings thereon have been issued
and are in full force and effect;
Notwithstanding anything herein to the contrary, (i) Unencumbered Operating
Properties shall only be owned by the Guarantor to the extent necessary to
reduce or minimize franchise or other similar taxes computed with respect to the
ownership and/or operation of the Unencumbered Operating Properties; (ii) the
OTR Minority Interest Property shall constitute an "Unencumbered
19
Operating Property", provided (x) Borrower shall not create or incur or suffer
to be created or incurred any lien upon or against the OTR Minority Interest
Property except for liens permitted by Section 8.2(ii) and (iv), and the OTR
Minority Interest Property otherwise complies with the requirements governing
Unencumbered Operating Properties contained in this Agreement; (y) the limited
partnership agreement governing Meridian Ohio Limited Partnership shall permit
the Borrower to provide financial and operating information regarding the OTR
Minority Interest and the OTR Minority Interest Property to the Banks; and (z)
the Borrower shall not be permitted to own any other minority interests without
the prior written approval of the Majority Banks; (iii) real property owned by a
DownREIT shall constitute an Unencumbered Operating Property, provided the
provisions of clauses (x) and (y) (as applied to the applicable DownREIT's
formation agreement) in (ii) above are complied with; (iv) Real Estate owned by
a Subsidiary of the Borrower and approved in writing by the Majority Banks
(which approval shall be conditioned on, among other things, the execution and
delivery by such Subsidiary of a guaranty of payment and performance in form
substantially similar to the Guaranty, direct ownership and control of such
Subsidiary by the Borrower, including, without limitation, the right to sell,
transfer, convey or encumber assets of such Subsidiary, and the assets of such
Subsidiary and the ownership interests of the Borrower in such Subsidiary being
unencumbered) shall constitute Unencumbered Operating Properties, and (v) other
minority interests approved in writing by the Majority Banks shall constitute
Unencumbered Operating Properties.
VOTING INTERESTS. Stock or similar ownership interests, of any class or
classes (however designated), the holders of which are at the time entitled, as
such holders, (a) to vote for the election of a majority of the directors (or
persons performing similar functions) of the corporation, association,
partnership, trust or other business entity involved, or (b) to control, manage,
or conduct the business of the corporation, partnership, association, trust or
other business entity involved.
Section 1.2. RULES OF INTERPRETATION.
(a) A reference to any document or agreement shall include such
document or agreement as amended, modified or supplemented from time to time in
accordance with its terms and the terms of this Agreement.
(b) The singular includes the plural and the plural includes the
singular.
(c) A reference to any law includes any amendment or modification to
such law.
(d) A reference to any Person includes its permitted successors and
permitted assigns.
(e) Accounting terms not otherwise defined herein have the meanings
assigned to them by generally accepted accounting principles applied on a
consistent basis by the
20
accounting entity to which they refer.
(f) The words "include", "includes" and "including" are not limiting.
(g) The words "approval" and "approved", as the context so
determines, means an approval in writing given to the party seeking approval
after full and fair disclosure to the party giving approval of all material
facts necessary in order to determine whether approval should be granted.
(h) All terms not specifically defined herein or by generally
accepted accounting principles, which terms are defined in the Uniform
Commercial Code as in effect in the Commonwealth of Massachusetts, have the
meanings assigned to them therein.
(i) Reference to a particular "Section ", refers to that section of
this Agreement unless otherwise indicated.
(j) The words "herein", "hereof", "hereunder" and words of like
import shall refer to this Agreement as a whole and not to any particular
section or subdivision of this Agreement.
SECTION 2. THE REVOLVING CREDIT FACILITY.
Section 2.1. COMMITMENT TO LEND. Subject to the terms and conditions set
forth in this Agreement, each of the Banks severally agrees to lend to the
Borrower, and the Borrower may borrow (and repay and reborrow) from time to time
between the Closing Date and the Maturity Date upon notice by the Borrower to
the Agent given in accordance with Section 2.6, such sums as are requested by
the Borrower for the purposes set forth in Section 7.11 up to a maximum
aggregate principal amount Outstanding (after giving effect to all amounts
requested and the amount of Letters of Credit Outstanding, including Letters of
Credit accepted but unpaid) at any one time equal to such Bank's Commitment,
PROVIDED, that, in all events no Default or Event of Default shall have occurred
and be continuing; and PROVIDED, FURTHER, that the Outstanding principal amount
of the Loans (after giving effect to all amounts requested and the amount of
Letters of Credit Outstanding, including Letters of Credit accepted but unpaid)
shall not at any time exceed the Total Commitment or cause a violation of the
covenant set forth in Section 9.4. The Loans shall be made PRO RATA in
accordance with each Bank's Commitment Percentage. The funding of a Loan
hereunder shall constitute a representation and warranty by the Borrower that
all of the conditions set forth in Section 10 and Section 11, in the case of the
initial Loan, and Section 11, in the case of all other Loans, have been
satisfied on the date of such funding.
Section 2.2. FACILITY FEE. The Borrower agrees to pay to the Agent for
the accounts of the Banks in accordance with their respective Commitment
Percentages a facility fee calculated at the rate of one-fourth of one percent
(0.25%) per annum on the average daily amount by which the Total Commitment
exceeds the Outstanding principal amount of Loans and the amount of
21
Outstanding Letters of Credit (including Letters of Credit accepted but unpaid)
during each calendar quarter or portion thereof commencing on the Closing Date
and ending on the Maturity Date, provided, however, that in the event for any
quarter the ratio (expressed as a percentage) of (a) the average daily amount of
the Outstanding principal amount of the Loans and the amount of Outstanding
Letters of Credit (including Letters of Credit accepted but unpaid) during such
quarter to (b) the Total Commitment is greater than sixty-five percent (65%),
then the facility fee shall be calculated at the rate of three-twentieths of one
percent (0.15%) for such quarter. The facility fee shall be payable quarterly
in arrears on the last day of each calendar quarter for such calendar quarter or
portion thereof, with a final payment on the Maturity Date.
Section 2.3. INTENTIONALLY OMITTED.
Section 2.4. NOTES. The Loans shall be evidenced by separate promissory
notes of the Borrower in substantially the form of EXHIBIT A hereto
(collectively, the "Notes"), dated the date of this Agreement and completed with
appropriate insertions. One Note shall be payable to the order of each Bank in
the principal face amount equal to such Bank's Commitment and shall be payable
as set forth below. The Borrower irrevocably authorizes each Bank to make or
cause to be made, at or about the time of the Drawdown Date of any Loan or at
the time of receipt of any payment of principal thereof, an appropriate notation
on such Bank's Record reflecting the making of such Loan or (as the case may be)
the receipt of such payment. The Outstanding amount of the Loans set forth on
such Bank's Record shall be PRIMA FACIE evidence of the principal amount thereof
owing and unpaid to such Bank, but the failure to record, or any error in so
recording, any such amount on such Bank's Record shall not limit or otherwise
affect the obligations of the Borrower hereunder or under any Note to make
payments of principal of or interest on any Note when due. By delivery of the
Notes, there shall not be deemed to have occurred, and there has not otherwise
occurred, any payment, satisfaction or novation of the indebtedness evidence by
the "Notes" as defined in the First Amended Credit Agreement, which indebtedness
is instead allocated among the Banks as of the date hereof and evidenced by the
Notes in accordance with their respective Commitment Percentages.
Section 2.5. INTEREST ON LOANS.
(a) Each Base Rate Loan shall bear interest for the period commencing
with the Drawdown Date thereof and ending on the date on which such Base Rate
Loan is repaid or converted to a Eurodollar Rate Loan at the rate per annum
equal to the Base Rate.
(b) Each Eurodollar Rate Loan shall bear interest for the period
commencing with the Drawdown Date thereof and ending on the last day of the
Interest Period with respect thereto at the rate per annum equal to the sum of
the Applicable Margin plus the Eurodollar Rate determined for such Interest
Period.
(c) The Borrower promises to pay interest on each Loan in arrears on
each Interest Payment Date with respect thereto.
22
(d) Base Rate Loans and Eurodollar Rate Loans may be converted to
Loans of the other Type as provided in Section 4.1.
Section 2.6. REQUESTS FOR LOANS. Except with respect to the initial Loan,
the Borrower (i) shall notify the Agent of a potential request for a Loan as
soon as possible but not less than five (5) Business Days prior to the
Borrower's proposed Drawdown Date, and (ii) shall give to the Agent written
notice in the form of EXHIBIT B hereto (or telephonic notice confirmed in
writing in the form of EXHIBIT B hereto) of each Loan requested hereunder (a
"Loan Request") no less than three (3) Business Days prior to the proposed
Drawdown Date. The Agent shall promptly notify each of the Banks following the
receipt of a Loan Request, but in any event not less than three (3) Business
Days prior to the proposed Drawdown Date. Borrower shall not make a Loan
Request more frequently than five (5) times each month, but will exercise its
best efforts not to exceed three (3) draws each month. Each such notice shall
specify with respect to the requested Loan the proposed principal amount,
Drawdown Date, Interest Period (if applicable) and Type. Each such notice shall
also contain (i) a statement as to the purpose for which such advance shall be
used (which purpose shall be in accordance with the terms of Section 7.11),
(ii) a certification by an Authorized Officer of the Borrower and the Guarantor
that since the date of the last Compliance Certificate delivered under this
Agreement, there have been no material changes in the matters certified in such
Compliance Certificate that could cause a Default or Event of Default to occur
after giving effect to the making of such Loan, and (iii) a certification by an
Authorized Officer of the Borrower that the Borrower is and will be in
compliance with Section 9.4 after giving effect to the making of such Loan.
Promptly upon receipt of any such notice, the Agent shall notify each of the
Banks thereof. Except as provided in this Section 2.6, each such Loan Request
shall be irrevocable and binding on the Borrower and shall obligate the Borrower
to accept the Loan requested from the Banks on the proposed Drawdown Date,
provided that, in addition to the Borrower's other remedies against any Bank
which fails to advance its proportionate share of a requested Loan, such Loan
Request may be revoked by the Borrower by notice received by the Agent no later
than the Drawdown Date if any Bank fails to advance its proportionate share of
the requested Loan in accordance with the terms of this Agreement, provided
further that the Borrower shall be liable in accordance with the terms of this
Agreement to any Bank which is prepared to advance its proportionate share of
the requested Loan for any costs, expenses or damages incurred by such Bank as a
result of the Borrower's election to revoke such Loan Request (including,
without limitation, the items described in Section 4.8, as applicable, but not
including any damages for lost interest earnings as a result of such Loan not
being made). Nothing herein shall prevent the Borrower from seeking recourse
against any Bank that fails to advance its proportionate share of a requested
Loan as required by this Agreement. The Borrower may without cost or penalty
revoke a Loan Request by delivering notice thereof to each of the Banks no later
than three (3) Business Days prior to the Drawdown Date. Each Loan Request
shall be (a) for a Base Rate Loan in a minimum aggregate amount of $1,000,000 or
an integral multiple of $100,000 in excess thereof, or (b) for a Eurodollar Rate
Loan in a minimum aggregate amount of $1,000,000 or an integral multiple of
$100,000 in excess thereof; PROVIDED, HOWEVER, that there shall be no more than
five (5) Eurodollar Rate Loans outstanding at any one
23
time.
Section 2.7. FUNDS FOR LOANS. Not later than 2:00 p.m. (Boston time) on
the proposed Drawdown Date of any Loans, each of the Banks will make available
to the Agent, at the Agent's Head Office, in immediately available funds, the
amount of such Bank's Commitment Percentage of the amount of the requested Loans
which may be disbursed pursuant to Section 2.1. Upon receipt from each Bank of
such amount, and upon receipt of the documents required by Section 10 and
Section 11 and the satisfaction of the other conditions set forth therein, to
the extent applicable, the Agent will make available to the Borrower the
aggregate amount of such Loans made available to the Agent by the Banks by
crediting such amount to the account of the Borrower maintained at the Agent's
Head Office. The failure or refusal of any Bank to make available to the Agent
at the aforesaid time and place on any Drawdown Date the amount of its
Commitment Percentage of the requested Loans shall not relieve any other Bank
from its several obligation hereunder to make available to the Agent the amount
of such other Bank's Commitment Percentage of any requested Loans, including any
additional Loans that may be requested subject to the terms and conditions
hereof to provide funds to replace those not advanced by the Bank so failing or
refusing, provided that the Borrower may by notice received by the Agent no
later than the Drawdown Date refuse to accept any Loan which is not fully funded
in accordance with the Borrower's Loan Request subject to the terms of
Section 2.6. In the event of any such failure or refusal, the Banks not so
failing or refusing shall be entitled to a priority position as against the Bank
or Banks so failing or refusing for such Loans as provided in Section 12.5.
Section 2.8. EXTENSION OF MATURITY DATE.
(a) The Borrower has requested the ability to extend the Maturity
Date. The Borrower acknowledges and agrees that the Banks have no agreement or
obligation to extend the Maturity Date. Notwithstanding the foregoing, the
Borrower and the Banks have agreed upon the following procedure with respect to
requests by the Borrower to extend the Maturity Date:
(i) The Borrower may request that the Banks extend the
Maturity Date by one (1) year. If the Borrower desires to request that the
Maturity Date be extended by one (1) year, the Borrower shall deliver
written notice of such request to the Agent not earlier than the first
anniversary of the Closing Date and not later than the date which is ninety
(90) days prior to the then effective Maturity Date (an "Extension
Request"). The Agent shall provide a copy of such notice to each of the
Banks within ten (10) days after the Agent's receipt of such notice. The
Banks shall notify the Agent within forty-five (45) days of receipt of such
notice from the Agent of such Bank's approval or rejection of the Extension
Request. No Extension Request shall be deemed approved unless approved by
all of the Banks, which approval may be granted or withheld in each Bank's
sole and absolute discretion. In the event that a Bank shall fail to
respond in writing to the Agent within such forty-five (45) day period,
such Bank shall be deemed to have rejected the Extension Request. The
Agent shall promptly notify the Borrower of the responses received from the
Banks with respect to the Extension Request.
24
(ii) If the Extension Request is approved by all of the Banks
as provided in Section 2.8(a)(i), the Borrower shall retain the right to
request further one (1) year extensions in the manner provided in this
Section 2.8(a).
(b) In the event that an Extension Request is approved as provided in
Section 2.8(a), each and every such approval shall be conditioned upon
satisfaction of the following conditions precedent, which terms shall be in
addition to any terms and conditions which may be required by the Banks as a
condition to the approval of the Extension Request and must be satisfied prior
to the effectiveness of any extension of the Maturity Date:
(i) PAYMENT OF EXTENSION FEE. Within fifteen (15) days of
approval of the Extension Request by all of the Banks (but in no event
later than the Maturity Date as determined without regard to such
extension), the Borrower shall pay to the Agent for the PRO RATA accounts
of the Banks in accordance with their respective Commitment Percentages an
extension fee as more particularly described in the Agreement Regarding
Fees, which fee shall, when paid, be fully earned and non-refundable under
any circumstances.
(ii) NO DEFAULT. On the date the Extension Request is given
and on the Maturity Date (as determined without regard to such extension)
there shall exist no Default or Event of Default.
(iii) REPRESENTATIONS AND WARRANTIES. The representations and
warranties made by the Borrower or the Guarantor in the Loan Documents or
otherwise made by or on behalf of the Borrower, the Guarantor or any of the
Borrower's Subsidiaries in connection therewith or after the date thereof
shall have been true and correct in all material respects when made and
shall also be true and correct in all material respects on the Maturity
Date (as determined without regard to such extension) other than for
changes in the ordinary course of business permitted by this Agreement that
have not had any materially adverse affect on the business of the Borrower,
the Guarantor or any of the Borrower's Subsidiaries.
Section 2.9. LETTERS OF CREDIT.
(a) Subject to the terms and conditions set forth in this Agreement,
at any time and from time to time from the Closing Date through the day that is
thirty (30) days prior to the Maturity Date, the Agent shall issue such Letters
of Credit as the Borrower may request, for the purposes provided in Section
7.11, upon the delivery of a written request in the form of EXHIBIT C hereto (a
"Letter of Credit Request") to the Agent, PROVIDED that (i) upon issuance of
such Letter of Credit, the Outstanding Letters of Credit (including Letters of
Credit accepted but unpaid) shall not exceed Nineteen Million Five Hundred
Thousand Dollars ($19,500,000.00), (iii) the conditions set forth in Sections 10
and 11 shall have been satisfied, and (iv) in no event shall any
25
amount drawn under a Letter of Credit be available for reinstatement or a
subsequent drawing under such Letter of Credit. The Borrower assumes all risks
with respect to the use of the Letters of Credit. Unless the Agent and the
Majority Banks otherwise consent, the term of any Letter of Credit shall not
exceed the lesser of twelve (12) months or a period of time commencing on the
issuance of the Letter of Credit and ending on the date which is fifteen (15)
days prior to the Maturity Date (but in any event the term shall not extend
beyond the Maturity Date), and no Letter of Credit shall contain an automatic
extension or renewal clause. The amount available to be drawn under any Letter
of Credit shall reduce on a dollar for dollar basis the amount available to be
drawn under the Total Commitment as a Loan.
(b) Each Letter of Credit Request shall be submitted to the Agent at
least ten (10) Business Days prior to the date upon which the requested Letter
of Credit is to be issued. Following the receipt of a Letter of Credit Request,
the Agent shall promptly notify each of the Banks of the Letter of Credit
Request. Each such Letter of Credit Request shall contain (i) a statement as to
the purpose for which such Letter of Credit shall be used (which purpose shall
be in accordance with the terms of Section 7.11), (ii) a certification by an
Authorized Officer of the Borrower that the Borrower is and will be in
compliance with all covenants under the Loan Documents after giving effect to
the issuance of such Letter of Credit, and (iii) a certification by an
Authorized Officer of the Borrower that the Borrower is and will be in
compliance with Section 7.15 after giving effect to the issuance of the Letter
of Credit. The Borrower shall further deliver to the Agent such additional
applications and documents as the Agent may require, in conformity with the then
standard practices of its letter of credit department, in connection with the
issuance of such Letter of Credit; provided that in the event of any conflict,
the terms of this Agreement shall control.
(c) The Agent shall, if it approves of the content of the Letter of
Credit Request (which approval shall not be unreasonably withheld), and subject
to the conditions set forth in this Agreement, issue the Letter of Credit on or
before ten (10) Business Days following receipt of the documents last due
pursuant to Section 2.9(b). Each Letter of Credit shall be in form and
substance satisfactory to the Agent in its sole discretion. Upon issuance of a
Letter of Credit, the Agent shall provide copies of each Letter of Credit to the
Banks.
(d) Upon the issuance of a Letter of Credit, each Bank shall be
deemed to have purchased a participation therein from Agent in an amount equal
to its respective Commitment Percentage of the amount of such Letter of Credit.
(e) Upon the issuance of each Letter of Credit, the Borrower shall
pay to the Agent (i) for its own account, a Letter of Credit fee calculated at
the rate of three-tenths of one percent (0.30%) per annum of the amount
available to be drawn under such Letter of Credit (which fee shall not be less
than $1,000.00 in any event), and (ii) for the accounts of the Banks in
accordance with their respective percentage shares of participation in such
Letter of Credit, a Letter of Credit fee calculated at the rate of the
Applicable Margin less three-tenths of one percent (0.30%) per annum of the
amount available to be drawn under such Letter of Credit. Such fees shall be
payable in quarterly installments in advance with respect to each Letter of
26
Credit commencing on its date of issuance and continuing on each quarter
thereafter, as applicable.
(f) If and to the extent that any amounts are drawn upon any Letter
of Credit, the amounts so drawn shall, from the date of payment thereof by the
Agent, be considered Loans for all purposes hereunder bearing interest as
provided in Section 2.5(a). The Banks shall be required to make such Loans
regardless of whether all of the conditions to disbursement set forth in Section
11 have been satisfied.
(g) If after the issuance of a Letter of Credit pursuant to Section
2.9(d) by the Agent, but prior to the funding of any portion thereof by a Bank,
one of the events described in Section 12.1(h), (i) or (j) shall have occurred,
each Bank will, on the date such Loan pursuant to Section 2.9(d) was to have
been made, purchase an undivided participating interest in the Letter of Credit
in an amount equal to its Commitment Percentage of the amount of such Letter of
Credit. Each Bank will immediately transfer to the Agent in immediately
available funds the amount of its participation and upon receipt thereof the
Agent will deliver to such Bank a Letter of Credit participation certificate
dated the date of receipt of such funds and in such amount.
(h) Whenever at any time after the Agent has received from any Bank
such Bank's payment of funds under a Letter of Credit, the Agent receives any
payment on account thereof, the Agent will distribute to such Bank its
participating interest in such amount (appropriately adjusted in the case of
interest payments to reflect the period of time during which such Bank's
participating interest was outstanding and funded); PROVIDED, HOWEVER, that in
the event that such payment received by the Agent is required to be returned,
such Bank will return to the Agent any portion thereof previously distributed by
the Agent to it.
(i) Upon the receipt by the Agent of any draw or other presentation
for payment of a Letter of Credit and the payment of any amount under a Letter
of Credit, the Agent shall, without notice to or the consent of the Borrower,
direct the Banks to fund to the Agent in accordance with Section 2.7 on or
before 2:00 p.m. (Boston time) on the next Business Day their respective
Commitment Percentages of the amount so paid by the Agent. The proceeds of such
funding shall be paid to the Agent to reimburse the Agent for the payment made
by it under the Letter of Credit. The provisions of Section 2.7 shall apply to
any Bank or Banks failing or refusing to fund its Commitment Percentage of any
such draw.
(j) The issuance of any supplement, modification, amendment, renewal
or extension to or of any Letter of Credit shall be treated in all respects the
same as the issuance of a new Letter of Credit.
SECTION 3. REPAYMENT OF THE LOANS.
Section 3.1. STATED MATURITY. The Borrower promises to pay on the
Maturity Date and there shall become absolutely due and payable on the Maturity
Date, all of the Loans Outstanding on
27
such date, together with any and all accrued and unpaid interest thereon.
Section 3.2. MANDATORY PREPAYMENTS. If at any time the aggregate
Outstanding principal amount of the Loans and Outstanding Letters of Credit
(including Letters of Credit accepted but unpaid) exceeds the Total Commitment,
then the Borrower shall immediately pay the amount of such excess to the Agent
for the respective accounts of the Banks for application to the Loans. If at
any time the Borrower is not in compliance with the covenants contained in
Section 9.4, the Borrower shall pay to the Agent for the accounts of the Banks
so much of the Outstanding principal amounts of the Loans as is necessary to
cause the Borrower to be in compliance with Section 9.4.
Section 3.3. OPTIONAL PREPAYMENTS. The Borrower shall have the right, at
its election, to prepay the Outstanding amount of the Loans, as a whole or in
part, at any time without penalty or premium; PROVIDED, that the full or partial
prepayment of the Outstanding amount of any Eurodollar Rate Loans pursuant to
this Section 3.3 may be made only on the last day of the Interest Period
relating thereto unless accompanied by breakage costs computed in accordance
with Section 4.8 and except as otherwise required pursuant to Section 4.7. The
Borrower shall give the Agent, no later than 1:00 p.m., Boston time, at least
three (3) Business Days prior written notice of any prepayment pursuant to this
Section 3.3 specifying the proposed date of payment of Loans and the principal
amount to be paid.
Section 3.4. PARTIAL PREPAYMENTS. Each partial prepayment of the Loans
under Section 3.2 and Section 3.3 shall be in an integral multiple of $500,000,
shall be accompanied by the payment of accrued interest on the principal prepaid
to the date of payment and, after payment of such interest, shall be applied, in
the absence of instruction by the Borrower, first to the principal of Base Rate
Loans and then to the principal of Eurodollar Rate Loans.
Section 3.5. EFFECT OF PREPAYMENTS. Amounts of the Loans prepaid under
Section 3.2 and Section 3.3 prior to the Maturity Date may be reborrowed as
provided in Section 2.
Section 3.6. PROCEEDS FROM DEBT OFFERING AND EQUITY OFFERING. Upon the
occurrence of a Default or Event of Default and during any period during which
such Default or Event of Default shall be continuing, the Borrower shall cause
all gross proceeds of each and every Debt Offering and Equity Offering, less all
reasonable costs, fees, expenses, underwriting commissions, fees and discounts
incurred in connection therewith, to be promptly paid by the Borrower to the
Agent for the account of the Banks as a prepayment of the Loans to the extent of
the Outstanding balance of the Loans.
Section 3.7. MANDATORY REDUCTION OF COMMITMENTS. On or before June 23,
1998, the Commitments shall be reduced to the amounts described on SCHEDULE 2
hereto and the Borrower shall pay to the Agent for the accounts of the Banks
which had increased their Commitments the amount of the excess of the
Outstanding principal amounts of the Loans over the amount of the reduced
Commitments described on SCHEDULE 2 hereto.
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SECTION 4. CERTAIN GENERAL PROVISIONS.
Section 4.1. CONVERSION OPTIONS.
(a) The Borrower may elect from time to time to convert any
outstanding Loan to a Loan of another Type and such Loan shall thereafter bear
interest as a Base Rate Loan or a Eurodollar Rate Loan, as applicable; PROVIDED
that (i) with respect to any such conversion of a Eurodollar Rate Loan to a Base
Rate Loan, the Borrower shall give the Agent at least three Business Days' prior
written notice of such election, and such conversion shall only be made on the
last day of the Interest Period with respect to such Eurodollar Rate Loan; (ii)
with respect to any such conversion of a Base Rate Loan to a Eurodollar Rate
Loan, the Borrower shall give the Agent at least four Eurodollar Business Days'
prior written notice of such election and the Interest Period requested for such
Loan, the principal amount of the Loan so converted shall be in a minimum
aggregate amount of $1,000,000 or an integral multiple of $100,000 in excess
thereof and, after giving effect to the making of such Loan, there shall be no
more than five (5) Eurodollar Rate Loans Outstanding at any one time; and (iii)
no Loan may be converted into a Eurodollar Rate Loan when any Default or Event
of Default has occurred and is continuing. All or any part of the Outstanding
Loans of any Type may be converted as provided herein, PROVIDED that no partial
conversion shall result in a Base Rate Loan in an aggregate principal amount of
less than $1,000,000 or a Eurodollar Rate Loan in an aggregate principal amount
of less than $1,000,000 and that the aggregate principal amount of each Loan
shall be in an integral multiple of $100,000. On the date on which such
conversion is being made, each Bank shall take such action as is necessary to
transfer its Commitment Percentage of such Loans to its Domestic Lending Office
or its Eurodollar Lending Office, as the case may be. Each Conversion Request
relating to the conversion of a Base Rate Loan to a Eurodollar Rate Loan shall
be irrevocable by the Borrower.
(b) Any Loan may be continued as such Type upon the expiration of an
Interest Period with respect thereto by compliance by the Borrower with the
terms of Section 4.1; PROVIDED that no Eurodollar Rate Loan may be continued as
such when any Event of Default has occurred and is continuing, but shall be
automatically converted to a Base Rate Loan on the last day of the Interest
Period relating thereto ending during the continuance of any Event of Default.
(c) In the event that the Borrower does not notify the Agent of its
election hereunder with respect to any Loan, such Loan shall be automatically
converted to a Base Rate Loan at the end of the applicable Interest Period.
Section 4.2. COMMITMENT FEE. Upon the execution of this Agreement, the
Borrower agrees to pay to the Banks a nonrefundable commitment fee pursuant to
the Agreement Regarding Fees.
Section 4.3. AGENT'S FEE. The Borrower shall pay to the Agent, for the
Agent's own account, a non-refundable Agent's fee pursuant to the Agreement
Regarding Fees.
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Section 4.4. FUNDS FOR PAYMENTS.
(a) All payments of principal, interest, facility fees, Agent's fees,
closing fees, Letter of Credit fees and any other amounts due hereunder or under
any of the other Loan Documents shall be made to the Agent, for the respective
accounts of the Banks and the Agent, as the case may be, at the Agent's Head
Office, not later than 1:00 p.m. (Boston time) on the day when due, in each case
in immediately available funds. The Agent is hereby authorized to charge the
account of the Borrower with BankBoston, on the dates when the amount thereof
shall become due and payable, with the amounts of the principal of and interest
on the Loans and all fees, charges, expenses and other amounts owing to the
Agent and/or the Banks under the Loan Documents.
(b) All payments by the Borrower hereunder and under any of the other
Loan Documents shall be made without setoff or counterclaim and free and clear
of and without deduction for any taxes, levies, imposts, duties, charges, fees,
deductions, withholdings, compulsory loans, restrictions or conditions of any
nature now or hereafter imposed or levied by any jurisdiction or any political
subdivision thereof or taxing or other authority therein unless the Borrower is
compelled by law to make such deduction or withholding. If any such obligation
is imposed upon the Borrower with respect to any amount payable by it hereunder
or under any of the other Loan Documents, the Borrower will pay to the Agent,
for the account of the Banks or (as the case may be) the Agent, on the date on
which such amount is due and payable hereunder or under such other Loan
Document, such additional amount in Dollars as shall be necessary to enable the
Banks or the Agent to receive the same net amount which the Banks or the Agent
would have received on such due date had no such obligation been imposed upon
the Borrower. The Borrower will deliver promptly to the Agent certificates or
other valid vouchers for all taxes or other charges deducted from or paid with
respect to payments made by the Borrower hereunder or under such other Loan
Document.
(c) The obligations of the Borrower to the Banks under this Agreement
shall be absolute, unconditional and irrevocable, and shall be paid and
performed strictly in accordance with the terms of this Agreement, under all
circumstances whatsoever, including, without limitation, the following
circumstances: (i) any improper use which may be made of any Letter of Credit
or any improper acts or omissions of any beneficiary or transferee of any Letter
of Credit in connection therewith; (ii) the existence of any claim, set-off,
defense or any right which the Borrower may have at any time against any
beneficiary or any transferee of any Letter of Credit (or persons or entities
for whom any such beneficiary or any such transferee may be acting) or the Banks
(other than the defense of payment to the Banks in accordance with the terms of
this Agreement) or any other person, whether in connection with any Letter of
Credit, this Agreement, any other Loan Document, or any unrelated transaction;
(iii) any statement or any other documents presented under any Letter of Credit
proving to be insufficient, forged, fraudulent or invalid in any respect or any
statement therein being untrue or inaccurate in any respect whatsoever; (iv) any
breach of any agreement between Borrower and any beneficiary or
30
transferee of any Letter of Credit; (v) any irregularity in the transaction with
respect to which any Letter of Credit is issued, including any fraud by the
beneficiary or any transferee of such Letter of Credit; (vi) payment by the
Agent under any Letter of Credit against presentation of a sight draft or a
certificate which does not comply with the terms of such Letter of Credit,
provided that such payment shall not have constituted gross negligence or
willful misconduct on the part of the Agent, and (vii) any other circumstance or
happening whatsoever, whether or not similar to any of the foregoing, provided
that such other circumstances or happenings shall not have been the result of
gross negligence or willful misconduct on the part of the Agent.
(d) Each Bank organized under the laws of a jurisdiction outside the
United States, if requested in writing by the Borrower (but only so long as such
Bank remains lawfully able to do so), shall provide the Borrower with such duly
executed form(s) or statement(s) which may, from time to time, be prescribed by
law and, which, pursuant to applicable provisions of (i) an income tax treaty
between the United States and the country of residence of such Bank, (ii) the
Code, or (iii) any applicable rules or regulations in effect under (i) or (ii)
above, indicating the withholding status of such Bank; provided that nothing
herein (including without limitation the failure or inability to provide such
form or statement) shall relieve the Borrower of its obligations under Section
4.4(b). In the event that the Borrower shall have delivered the certificates or
vouchers described above for any payments made by the Borrower and such Bank
receives a refund of any taxes paid by the Borrower pursuant to Section 4.4(b),
such Bank will pay to the Borrower the amount of such refund promptly upon
receipt thereof, PROVIDED that if at any time thereafter such Bank is required
to return such refund, the Borrower shall promptly repay to such Bank the amount
of such refund.
Section 4.5. COMPUTATIONS. All computations of interest on the Loans and
of other fees to the extent applicable shall be based on a 360-day year and paid
for the actual number of days elapsed. Except as otherwise provided in the
definition of the term "Interest Period" with respect to Eurodollar Rate Loans,
whenever a payment hereunder or under any of the other Loan Documents becomes
due on a day that is not a Business Day, the due date for such payment shall be
extended to the next succeeding Business Day, and interest shall accrue during
such extension. The Outstanding amount of the Loans as reflected on the records
of the Agent from time to time shall be considered PRIMA FACIE evidence of such
amount.
Section 4.6. INABILITY TO DETERMINE EURODOLLAR RATE. In the event that,
prior to the commencement of any Interest Period relating to any Eurodollar Rate
Loan, the Agent shall determine that adequate and reasonable methods do not
exist for ascertaining the Eurodollar Rate for such Interest Period, the Agent
shall forthwith give notice of such determination (which shall be conclusive and
binding on the Borrower and the Banks) to the Borrower and the Banks. In such
event (a) any Loan Request with respect to Eurodollar Rate Loans shall be
automatically withdrawn and shall be deemed a request for Base Rate Loans and
(b) each Eurodollar Rate Loan will automatically, on the last day of the then
current Interest Period thereof, become a Base Rate Loan, and the obligations of
the Banks to make Eurodollar Rate Loans shall be suspended until the Agent
determines that the circumstances giving rise to such suspension no longer
exist,
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whereupon the Agent shall so notify the Borrower and the Banks.
Section 4.7. ILLEGALITY. Notwithstanding any other provisions herein, if
any present or future law, regulation, treaty or directive or the interpretation
or application thereof shall make it unlawful, or any central bank or other
governmental authority having jurisdiction over a Bank or its Eurodollar Lending
Office shall assert that it is unlawful, for any Bank to make or maintain
Eurodollar Rate Loans, such Bank shall forthwith give notice of such
circumstances to the Agent and the Borrower and thereupon (a) the commitment of
the Banks to make Eurodollar Rate Loans or convert Loans of another type to
Eurodollar Rate Loans shall forthwith be suspended and (b) the Eurodollar Rate
Loans then Outstanding shall be converted automatically to Base Rate Loans on
the last day of each Interest Period applicable to such Eurodollar Rate Loans or
within such earlier period as may be required by law.
Section 4.8. ADDITIONAL INTEREST. If any Eurodollar Rate Loan or any
portion thereof is repaid or is converted to a Base Rate Loan for any reason on
a date which is prior to the last day of the Interest Period applicable to such
Eurodollar Rate Loan, the Borrower will pay to the Agent upon demand for the
account of the Banks in accordance with their respective Commitment Percentages,
in addition to any amounts of interest otherwise payable hereunder, any amounts
required to compensate the Banks for any losses, costs or expenses which may
reasonably be incurred as a result of such payment or conversion, including,
without limitation, an amount equal to daily interest for the unexpired portion
of such Interest Period on the Eurodollar Rate Loan or portion thereof so repaid
or converted at a per annum rate equal to the excess, if any, of (a) the
Eurodollar Rate applicable to such Eurodollar Rate Loan over (b) the yield
obtainable by the Agent upon the purchase of debt securities customarily issued
by the Treasury of the United States of America which have a maturity date most
closely approximating the last day of such Interest Period (it being understood
that the purchase of such securities shall not be required in order for such
amounts to be payable) (it being agreed that a Bank shall not be obligated or
required to have actually obtained funds at the Eurodollar Rate or to have
actually reinvested such amount as described above).
Section 4.9. ADDITIONAL COSTS, ETC. Notwithstanding anything herein to
the contrary, if any present or future applicable law, which expression, as used
herein, includes statutes, rules and regulations thereunder and legally binding
interpretations thereof by any competent court or by any governmental or other
regulatory body or official with appropriate jurisdiction charged with the
administration or the interpretation thereof and requests, directives,
instructions and notices at any time or from time to time hereafter made upon or
otherwise issued to any Bank or the Agent by any central bank or other fiscal,
monetary or other authority (whether or not having the force of law), shall:
(a) subject any Bank or the Agent to any tax, levy, impost, duty,
charge, fee, deduction or withholding of any nature with respect to this
Agreement, the other Loan Documents, such Bank's Commitment, a Letter of Credit
or the Loans (other than taxes based upon or measured by the income or profits
of such Bank or the Agent), or
32
(b) materially change the basis of taxation (except for changes in
taxes on income or profits) of payments to any Bank of the principal of or the
interest on any Loans or any other amounts payable to any Bank under this
Agreement or the other Loan Documents, or
(c) impose or increase or render applicable any special deposit,
reserve, assessment, liquidity, capital adequacy or other similar requirements
(whether or not having the force of law) against assets held by, or deposits in
or for the account of, or loans by, or letters of credit from, or commitments of
any Bank beyond those in effect as of the date hereof, or
(d) impose on any Bank or the Agent any other conditions or
requirements with respect to this Agreement, the other Loan Documents, the
Loans, such Bank's Commitment, a Letter of Credit or any class of loans or
commitments of which any of the Loans or such Bank's Commitment forms a part;
and the result of any of the foregoing is
(i) to increase the cost to any Bank of making, funding,
issuing, renewing, extending or maintaining any of the Loans or Letters of
Credit or such Bank's Commitment, or
(ii) to reduce the amount of principal, interest or other
amount payable to such Bank or the Agent hereunder on account of such
Bank's Commitment or any of the Loans or Letters of Credit, or
(iii) to require such Bank or the Agent to make any payment or
to forego any interest or other sum payable hereunder, the amount of which
payment or foregone interest or other sum is calculated by reference to the
gross amount of any sum receivable or deemed received by such Bank or the
Agent from the Borrower hereunder,
then, and in each such case, the Borrower will, within fifteen (15) days of
demand made by such Bank or (as the case may be) the Agent at any time and from
time to time and as often as the occasion therefor may arise, pay to such Bank
or the Agent such additional amounts as such Bank or the Agent shall determine
in good faith to be sufficient to compensate such Bank or the Agent for such
additional cost, reduction, payment or foregone interest or other sum. Each
Bank and the Agent in determining such amounts may use any reasonable averaging
and attribution methods, generally applied by such Bank or the Agent.
Section 4.10. CAPITAL ADEQUACY. If after the date hereof any Bank
determines that (a) the adoption of or change in any law, rule, regulation or
guideline regarding capital requirements of general application for banks or
bank holding companies (as opposed to a particular bank) or any change in the
interpretation or application thereof by any governmental authority charged with
the administration thereof, or (b) compliance by such Bank or its parent bank
holding company with any future guideline, request or directive of any such
entity regarding capital adequacy or any amendment or change in interpretation
of any existing guideline, request or directive
33
(whether or not having the force of law), has the effect of reducing the return
on such Bank's or such holding company's capital as a consequence of such Bank's
commitment to make Loans hereunder to a level below that which such Bank or
holding company could have achieved but for such adoption, change or compliance
(taking into consideration such Bank's or such holding company's then existing
policies with respect to capital adequacy and assuming the full utilization of
such entity's capital) by any amount deemed by such Bank to be material, then
such Bank may notify the Borrower thereof. The Borrower agrees to pay to such
Bank the amount of such reduction in the return on capital as and when such
reduction is determined, upon presentation by such Bank of a statement of the
amount setting for the Bank's calculation thereof. In determining such amount,
such Bank may use any reasonable averaging and attribution methods, generally
applied by such Bank.
Section 4.11. INDEMNITY OF BORROWER. The Borrower agrees to indemnify
each Bank and to hold each Bank harmless from and against any loss, cost or
expense that such Bank may sustain or incur as a consequence of (a) default by
the Borrower in payment of the principal amount of or any interest on any
Eurodollar Rate Loans as and when due and payable, including any such loss or
expense arising from interest or fees payable by such Bank to lenders of funds
obtained by it in order to maintain its Eurodollar Rate Loans, or (b) default by
the Borrower in making a borrowing or conversion after the Borrower has given
(or is deemed to have given) a Loan Request or a Conversion Request; provided,
however, that the Borrower shall not be required to so indemnify any Bank
pursuant to clause (b) above which fails or refuses to fund its proportionate
share of a Loan in accordance with the terms of this Agreement.
Section 4.12. INTEREST ON OVERDUE AMOUNTS; LATE CHARGE. Overdue principal
and (to the extent permitted by applicable law) interest on the Loans and all
other overdue amounts payable hereunder or under any of the other Loan Documents
shall bear interest payable on demand at a rate per annum equal to four percent
(4%) above the Base Rate until such amount shall be paid in full (after as well
as before judgment). In addition, the Borrower shall pay a late charge equal to
three percent (3%) of any amount of interest and/or principal payable on the
Loans or any other amounts payable hereunder or under the Loan Documents, which
is not paid within ten days of the date when due.
Section 4.13. CERTIFICATE. A certificate setting forth any amounts
payable pursuant to Section 4.8, Section 4.9, Section 4.10, Section 4.11 or
Section 4.12 and a brief explanation of such amounts which are due, submitted by
any Bank or the Agent to the Borrower, shall be conclusive in the absence of
manifest error.
Section 4.14. LIMITATION ON INTEREST. Notwithstanding anything in this
Agreement to the contrary, all agreements between the Borrower and the Banks and
the Agent, whether now existing or hereafter arising and whether written or
oral, are hereby limited so that in no contingency, whether by reason of
acceleration of the maturity of any of the Obligations or otherwise, shall the
interest contracted for, charged or received by the Banks exceed the maximum
amount permissible under applicable law. If, from any circumstance whatsoever,
interest would otherwise be payable to the Banks in excess of the maximum lawful
amount, the
34
interest payable to the Banks shall be reduced to the maximum amount permitted
under applicable law; and if from any circumstance the Banks shall ever receive
anything of value deemed interest by applicable law in excess of the maximum
lawful amount, an amount equal to any excessive interest shall be applied to the
reduction of the principal balance of the Obligations and to the payment of
interest or, if such excessive interest exceeds the unpaid balance of principal
of the Obligations, such excess shall be refunded to the Borrower. All interest
paid or agreed to be paid to the Banks shall, to the extent permitted by
applicable law, be amortized, prorated, allocated and spread throughout the full
period until payment in full of the principal of the Obligations (including the
period of any renewal or extension thereof) so that the interest thereon for
such full period shall not exceed the maximum amount permitted by applicable
law. This section shall control all agreements between the Borrower and the
Banks and the Agent.
SECTION 5. SECURITY. The Banks have agreed to make the Loans to the
Borrower on an unsecured basis. Notwithstanding the foregoing, the Obligations
shall be guaranteed by Guarantor pursuant to the Guaranty.
SECTION 6. REPRESENTATIONS AND WARRANTIES.
The Borrower represents and warrants to the Agent and the Banks as follows:
Section 6.1. CORPORATE AUTHORITY, ETC.
(a) INCORPORATION; GOOD STANDING. The Borrower (i) is a corporation
duly organized pursuant to its organizational documents and amendments thereto
filed with the Department of Assessments and Taxation of Maryland and is validly
existing and in good standing under the laws of the State of Maryland, (ii) has
all requisite power to own its property and conduct its business as now
conducted and as presently contemplated, (iii) is in good standing as a foreign
entity and is duly authorized to do business in the jurisdictions where the
Unencumbered Operating Properties are located to the extent required to be so
authorized and in each other jurisdiction where a failure to be so qualified in
such other jurisdiction could have a materially adverse effect on the business,
assets or financial condition of the Borrower and (iv) is a real estate
investment trust in full compliance with and entitled to the benefits of Section
856 of the Code.
(b) SUBSIDIARIES. Each of the Subsidiaries of the Borrower
(including the Guarantor) (i) is a corporation, limited partnership, limited
liability company or trust duly organized under the laws of its State of
organization and is validly existing and in good standing under the laws
thereof, (ii) has all requisite power to own its property and conduct its
business as now conducted and as presently contemplated and (iii) is in good
standing and is duly authorized to do business in each jurisdiction where a
failure to be so qualified could have a materially adverse effect on the
business, assets or financial condition of the Borrower or such Subsidiary.
(c) AUTHORIZATION. The execution, delivery and performance of this
35
Agreement and the other Loan Documents and the transactions contemplated hereby
and thereby (i) are within the authority of the Borrower and the Guarantor, (ii)
have been duly authorized by all necessary proceedings on the part of the such
Person, (iii) do not and will not conflict with or result in any breach or
contravention of any provision of law, statute, rule or regulation to which such
Person is subject or any judgment, order, writ, injunction, license or permit
applicable to such Person, (iv) do not and will not conflict with or constitute
a default (whether with the passage of time or the giving of notice, or both)
under any provision of the charter documents, partnership agreement, declaration
of trust or other charter documents or bylaws of, or any agreement or other
instrument binding upon, such Person or any of its properties, and (v) do not
and will not result in or require the imposition of any lien or other
encumbrance on any of the properties, assets or rights of such Person.
(d) ENFORCEABILITY. The execution and delivery of this Agreement and
the other Loan Documents are valid and legally binding obligations of the
Borrower and the Guarantor enforceable in accordance with the respective terms
and provisions hereof and thereof, except as enforceability is limited by
bankruptcy, insolvency, reorganization, moratorium or other laws relating to or
affecting generally the enforcement of creditors' rights and except to the
extent that availability of the remedy of specific performance or injunctive
relief is subject to the discretion of the court before which any proceeding
therefor may be brought.
Section 6.2. GOVERNMENTAL APPROVALS. The execution, delivery and
performance by the Borrower and the Guarantor of this Agreement and the other
Loan Documents and the transactions contemplated hereby and thereby do not
require the approval or consent of, or filing with, any governmental agency or
authority other than those already obtained.
Section 6.3. TITLE TO PROPERTIES; LEASES. Except as indicated on SCHEDULE
6.3 hereto, the Borrower and its Subsidiaries own all of the assets reflected in
the consolidated balance sheet of the Borrower as at the Balance Sheet Date or
acquired since that date (except property and assets sold or otherwise disposed
of in the ordinary course of business since that date), subject to no rights of
others, including any mortgages, leases (excluding leases entered into in the
ordinary course of the Borrower's business), conditional sales agreements, title
retention agreements, liens or other encumbrances except Permitted Liens.
Without limiting the foregoing, the Borrower and its Subsidiaries have good and
marketable fee simple title to, or a valid and subsisting leasehold interest in,
all real property reasonably necessary for the operation of its business in
whole, free from all liens or encumbrances of any nature whatsoever, except for
Permitted Liens. The Borrower or its Subsidiary or the Guarantor, as the case
may be, is the insured under owner's policies of title insurance covering all
real property owned by it, in each case in an amount not less than the purchase
price for such real property. Neither the Borrower nor the Guarantor is a party
to a Lease with a tenant which accounts for one-half percent (0.5%) or more of
the total rental revenues of the Borrower and in which Ameritech owns, directly
or indirectly, more than a nine and nine tenths percent (9.9%) interest.
Section 6.4. FINANCIAL STATEMENTS. The Borrower has furnished to each of
the Banks: (a) the
36
pro forma consolidated balance sheet of the Borrower and its Subsidiaries and of
the Guarantor as of the Balance Sheet Date and their related consolidated
statements of income, changes in stockholder equity and cash flows for the
fiscal year then ended, certified by an Authorized Officer of the Borrower and
the Guarantor, as applicable, (b) a pro forma consolidated balance sheet and a
pro forma consolidated statement of income and cash flows of the Borrower and
its Subsidiaries and of the Guarantor for each of the fiscal quarters of the
Borrower ended since the Balance Sheet Date certified by an Authorized Officer
of the Borrower and the Guarantor, as applicable, to have been prepared in
accordance with generally accepted accounting principles consistent with those
used in the preparation of the annual statements delivered pursuant to
subsection (a) above and to fairly present the financial condition of the
Borrower and its Subsidiaries and the Guarantor as at the close of business on
the dates thereof and the results of operations for the fiscal quarters then
ended (subject to year-end adjustments), and (c) an unaudited consolidated
statement of Net Operating Income for the Borrower and its Subsidiaries and the
Guarantor and an unaudited statement of Net Operating Income for each parcel of
Real Estate for the fiscal year ended December 31, 1996, satisfactory in form to
the Majority Banks and certified by an Authorized Officer of the Borrower and
the Guarantor, as applicable, as fairly presenting the operating income for such
parcels for such periods. Such balance sheet and statements of income,
stockholder's equity and cash flows have been prepared in accordance with
generally accepted accounting principles and fairly present the financial
condition of the Borrower and its Subsidiaries and the Guarantor as of such
dates and the results of the operations of the Borrower and its Subsidiaries and
the Guarantor for such periods. There are no liabilities, contingent or
otherwise, of the Borrower or any of its Subsidiaries or the Guarantor involving
material amounts not disclosed in said financial statements and the related
notes thereto.
Section 6.5. NO MATERIAL CHANGES. Since the Balance Sheet Date, there has
occurred no materially adverse change in the financial condition or business of
the Borrower and its Subsidiaries or the Guarantor taken as a whole as shown on
or reflected in the consolidated balance sheet of the Borrower and its
Subsidiaries and the Guarantor, adjusted pursuant to Section 9.7, as of the
Balance Sheet Date, or its consolidated statement of Net Operating Income or
Operating Cash Flow for the Real Estate for the fiscal year then ended, other
than changes in the ordinary course of business that have not had any materially
adverse effect either individually or in the aggregate on the business or
financial condition of such Person.
Section 6.6. FRANCHISES, PATENTS, COPYRIGHTS, ETC. The Borrower and its
Subsidiaries and the Guarantor possess all franchises, patents, copyrights,
trademarks, trade names, servicemarks, licenses and permits, and rights in
respect of the foregoing, adequate for the conduct of their business
substantially as now conducted without known conflict with any rights of others.
Section 6.7. LITIGATION. Except as stated on SCHEDULE 6.7 there are no
actions, suits, proceedings or investigations of any kind pending or threatened
against the Borrower or any of its Subsidiaries or the Guarantor before any
court, tribunal or administrative agency or board that, if adversely determined,
might, either in any case or in the aggregate, materially adversely affect the
properties, assets, financial condition or business of such Person or materially
impair the
37
right of such Person to carry on business substantially as now conducted by it,
or result in any liability not adequately covered by insurance, or for which
adequate reserves are not maintained on the balance sheet of such Person, or
which question the validity of this Agreement or any of the other Loan
Documents, any action taken or to be taken pursuant hereto or thereto, or which
will adversely affect the ability of the Borrower or the Guarantor to pay and
perform the Obligations in the manner contemplated by this Agreement and the
other Loan Documents.
Section 6.8. NO MATERIALLY ADVERSE CONTRACTS, ETC. Neither the Borrower
nor any of its Subsidiaries nor the Guarantor is subject to any charter,
corporate or other legal restriction, or any judgment, decree, order, rule or
regulation that has or is expected in the future to have a materially adverse
effect on the business, assets or financial condition of the Borrower or any of
its Subsidiaries or the Guarantor. Neither the Borrower nor any of its
Subsidiaries nor the Guarantor is a party to any contract or agreement that has
or is expected, in the judgment of the officers of such Person, to have any
materially adverse effect on the business of any of them.
Section 6.9. COMPLIANCE WITH OTHER INSTRUMENTS, LAWS, ETC. Neither the
Borrower nor any of its Subsidiaries nor the Guarantor is in violation of any
provision of its charter or other organizational documents, by-laws, or any
agreement or instrument to which it may be subject or by which it or any of its
properties may be bound or any decree, order, judgment, statute, license, rule
or regulation, in any of the foregoing cases in a manner that could result in
the imposition of substantial penalties or materially and adversely affect the
financial condition, properties or business of the Borrower or its Subsidiaries
or the Guarantor.
Section 6.10. TAX STATUS. The Borrower and each of its Subsidiaries and
the Guarantor (a) has made or filed all federal and state income and all other
tax returns, reports and declarations required by any jurisdiction to which it
is subject, (b) has paid all taxes and other governmental assessments and
charges shown or determined to be due on such returns, reports and declarations,
except those being contested in good faith and by appropriate proceedings and
(c) has set aside on its books provisions reasonably adequate for the payment of
all taxes for periods subsequent to the periods to which such returns, reports
or declarations apply. There are no unpaid taxes in any material amount claimed
to be due by the taxing authority of any jurisdiction, and the officers of such
Person know of no basis for any such claim.
Section 6.11. NO EVENT OF DEFAULT. No Default or Event of Default has
occurred and is continuing.
Section 6.12. HOLDING COMPANY AND INVESTMENT COMPANY ACTS. Neither the
Borrower nor any of its Subsidiaries nor the Guarantor is a "holding company",
or a "subsidiary company" of a "holding company", or an "affiliate" of a
"holding company", as such terms are defined in the Public Utility Holding
Company Act of 1935; nor is it an "investment company", or an "affiliated
company" or a "principal underwriter" of an "investment company", as such terms
are defined in the Investment Company Act of 1940.
38
Section 6.13. ABSENCE OF UCC FINANCING STATEMENTS, ETC. Except with
respect to Permitted Liens, there is no financing statement, security agreement,
chattel mortgage, real estate mortgage or other document filed or recorded with
any filing records, registry, or other public office, that purports to cover,
affect or give notice of any present or possible future lien on, or security
interest or security title in, any property of the Borrower or its Subsidiaries
or the Guarantor or rights thereunder.
Section 6.14. INTENTIONALLY OMITTED.
Section 6.15. CERTAIN TRANSACTIONS. Except as set forth in the
Prospectus, none of the officers, trustees, directors, or employees of the
Borrower or any of its Subsidiaries or the Guarantor is a party to any
transaction with the Borrower or any of its Subsidiaries or the Guarantor (other
than for services as employees, officers and directors), including any contract,
agreement or other arrangement providing for the furnishing of services to or
by, providing for rental of real or personal property to or from, or otherwise
requiring payments to or from any officer, trustee, director or such employee
or, to the knowledge of the Borrower, any corporation, partnership, trust or
other entity in which any officer, trustee, director, or any such employee has a
substantial interest or is an officer, director, trustee or partner.
Section 6.16. EMPLOYEE BENEFIT PLANS. The Borrower and each ERISA
Affiliate has fulfilled its obligations under the minimum funding standards of
ERISA and the Code with respect to each Employee Benefit Plan, Multiemployer
Plan or Guaranteed Pension Plan and is in compliance in all material respects
with the presently applicable provisions of ERISA and the Code with respect to
each Employee Benefit Plan, Multiemployer Plan or Guaranteed Pension Plan.
Neither the Borrower nor any ERISA Affiliate has (a) sought a waiver of the
minimum funding standard under Section 412 of the Code in respect of any
Employee Benefit Plan, Multiemployer Plan or Guaranteed Pension Plan, (b) failed
to make any contribution or payment to any Employee Benefit Plan, Multiemployer
Plan or Guaranteed Pension Plan, or made any amendment to any Employee Benefit
Plan, Multiemployer Plan or Guaranteed Pension Plan, which has resulted or could
result in the imposition of a Lien or the posting of a bond or other security
under ERISA or the Code, or (c) incurred any liability under Title IV of ERISA
other than a liability to the PBGC for premiums under Section 4007 of ERISA.
None of the Unencumbered Operating Properties constitutes a "plan asset" of any
Employee Plan, Multiemployer Plan or Guaranteed Pension Plan.
Section 6.17. REGULATIONS U AND X. No portion of any Loan is to be used
for the purpose of purchasing or carrying any "margin security" or "margin
stock" as such terms are used in Regulations U and X of the Board of Governors
of the Federal Reserve System, 12 C.F.R. Parts 221 and 224.
Section 6.18. ENVIRONMENTAL COMPLIANCE. The Borrower has conducted or
caused to be conducted Phase I environmental site assessments with respect to
the past usage and condition of the Real Estate and the operations conducted
thereon, and is familiar with the present condition
39
and usage of the Real Estate and the operations conducted thereon and, based
upon such reports and knowledge, makes the following representations and
warranties.
(a) To the best of the Borrower's knowledge, none of the Borrower or
its Subsidiaries or any operator of the Real Estate, or any operations thereon
is in violation, or alleged violation, of any judgment, decree, order, law,
license, rule or regulation pertaining to environmental matters, including
without limitation, those arising under the Resource Conservation and Recovery
Act ("RCRA"), the Comprehensive Environmental Response, Compensation and
Liability Act of 1980 as amended ("CERCLA"), the Superfund Amendments and
Reauthorization Act of 1986 ("XXXX"), the Federal Clean Water Act, the Federal
Clean Air Act, the Toxic Substances Control Act, or any state or local statute,
regulation, ordinance, order or decree relating to the environment (hereinafter
"Environmental Laws"), which violation involves the Real Estate and would have a
material adverse effect on the environment or the business, assets or financial
condition of the Borrower.
(b) Neither the Borrower nor any of its Subsidiaries has received
notice from any third party including, without limitation, any federal, state or
local governmental authority, (i) that it has been identified by the United
States Environmental Protection Agency ("EPA") as a potentially responsible
party under CERCLA with respect to a site listed on the National Priorities
List, 40 C.F.R. Part 000 Xxxxxxxx X (1986); (ii) that any hazardous waste, as
defined by 42 U.S.C. Section 9601(5), any hazardous substances as defined by 42
U.S.C. Section 9601(14), any pollutant or contaminant as defined by 42 U.S.C.
Section 9601(33) or any toxic substances, oil or hazardous materials or other
chemicals or substances regulated by any Environmental Laws ("Hazardous
Substances") which it has generated, transported or disposed of have been found
at any site at which a federal, state or local agency or other third party has
conducted or has ordered that the Borrower or any of its Subsidiaries conduct a
remedial investigation, removal or other response action pursuant to any
Environmental Law; or (iii) that it is or shall be a named party to any claim,
action, cause of action, complaint, or legal or administrative proceeding (in
each case, contingent or otherwise) arising out of any third party's incurrence
of costs, expenses, losses or damages of any kind whatsoever in connection with
the release of Hazardous Substances.
(c) To the best of the Borrower's knowledge, except as set forth in
SCHEDULE 6.18 or, in the case of Real Estate acquired after the date hereof,
except as may be disclosed in writing to the Agent upon the acquisition of the
same: (i) no portion of the Real Estate has been used for the handling,
processing, storage or disposal of Hazardous Substances except in accordance
with applicable Environmental Laws, and no underground tank or other underground
storage receptacle for Hazardous Substances is located on any portion of the
Real Estate; (ii) in the course of any activities conducted by the Borrower, its
Subsidiaries or the operators of its properties, no Hazardous Substances have
been generated or are being used on the Real Estate except in the ordinary
course of business and in accordance with applicable Environmental Laws; (iii)
there has been no past or present releasing, spilling, leaking, pumping,
pouring, emitting, emptying, discharging, injecting, escaping, disposing or
dumping (a "Release") or threatened Release of Hazardous Substances on, upon,
into or from the Real Estate, or, to the best of the
40
Borrower's knowledge, on, upon, into or from the other properties of the
Borrower or its Subsidiaries, which Release would have a material adverse effect
on the value of any of the Real Estate or adjacent properties or the
environment; (iv) to the best of the Borrower's knowledge, there have been no
Releases on, upon, from or into any real property in the vicinity of any of the
Real Estate which, through soil or groundwater contamination, may have come to
be located on, and which would have a material adverse effect on the value of,
the Real Estate; and (v) any Hazardous Substances that have been generated on
any of the Real Estate have been transported off-site only by carriers having an
identification number issued by the EPA or approved by a state or local
environmental regulatory authority having jurisdiction regarding the
transportation of such substance and, to the best knowledge of the Borrower
without independent investigation, treated or disposed of only by treatment or
disposal facilities maintaining valid permits as required under all applicable
Environmental Laws, which transporters and facilities have been and are, to the
best of the Borrower's knowledge, operating in compliance with such permits and
applicable Environmental Laws.
(d) Neither the Borrower, its Subsidiaries nor any Real Estate is
subject to any applicable Environmental Law requiring the performance of
Hazardous Substances site assessments, or the removal or remediation of
Hazardous Substances, or the giving of notice to any governmental agency or the
recording or delivery to other Persons of an environmental disclosure document
or statement by virtue of the transactions set forth herein and contemplated
hereby, or as a condition to the effectiveness of any other transactions
contemplated hereby.
Section 6.19. SUBSIDIARIES. SCHEDULE 6.19 sets forth all of the
Subsidiaries of the Borrower. The form and jurisdiction of organization of each
of the Subsidiaries, and the Borrower's ownership interest therein, is set forth
in said SCHEDULE 6.19.
Section 6.20. MINORITY INTERESTS. Other than the OTR Minority Interest,
the Borrower owns no other minority interests in partnerships, joint ventures,
corporations or other entities.
Section 6.21. LOAN DOCUMENTS. All of the representations and warranties
of the Borrower made in this Agreement and the other Loan Documents or any
document or instrument delivered to the Agent or the Banks pursuant to or in
connection with any of such Loan Documents are true and correct in all material
respects, and neither the Borrower nor the Guarantor has failed to disclose such
information as is necessary to make such representations and warranties not
misleading.
Section 6.22. PROPERTY. All of the Borrower's and its Subsidiaries'
properties are in good repair and condition in all material respects, subject to
ordinary wear and tear, other than with respect to deferred maintenance existing
as of the date of acquisition of such property as permitted in this Section
6.22. Without limiting the foregoing, the Borrower has completed an appropriate
investigation of the physical condition of each such property as of the later of
the date of the Borrower's or such Subsidiaries' purchase thereof or the date
upon which such property was last security for Indebtedness of the Borrower or
such Subsidiary, or their predecessors, including without limitation an analysis
of the structural condition and existence of any material deferred
41
maintenance, and such property is in good condition, order and repair, and any
material deferred maintenance existing as of the date of acquisition of such
property has been corrected or satisfactory remediation actions are being taken.
The Borrower further has completed an appropriate investigation of the
environmental condition of each such property as of the later of the date of the
Borrower's or such Subsidiaries' purchase thereof or the date upon which such
property was last security for Indebtedness of the Borrower or such Subsidiary,
or their predecessors, including preparation of a "Phase I" report and, if
appropriate, a "Phase II" report, in each case prepared by a recognized
environmental engineer in accordance with customary standards which discloses
that such property is not in violation of the representations and covenants set
forth in this Agreement, unless satisfactory remediation actions are being
taken. There are no unpaid or outstanding real estate or other taxes or
assessments on or against any property of the Borrower or any of its
Subsidiaries which are payable by the Borrower or its Subsidiaries (except only
real estate or other taxes or assessments, that are not yet due and payable).
There are no pending eminent domain proceedings against any property of the
Borrower or its Subsidiaries or any part thereof, and, to the knowledge of the
Borrower, no such proceedings are presently threatened or contemplated by any
taking authority which may individually or in the aggregate have any materially
adverse effect on the business or financial condition of the Borrower. None of
the property of Borrower or its Subsidiaries is now damaged or injured as a
result of any fire, explosion, accident, flood or other casualty in any manner
which individually or in the aggregate would have any materially adverse effect
on the business or financial condition of the Borrower.
Section 6.23. BROKERS. Neither the Borrower nor any of its Subsidiaries
has engaged or otherwise dealt with any broker, finder or similar entity in
connection with this Agreement or the Loans contemplated hereunder.
Section 6.24. OTHER DEBT. Neither the Borrower nor any of its
Subsidiaries nor the Guarantor is in default in the payment of any other
Indebtedness or under any agreement, mortgage, deed of trust, security
agreement, financing agreement, indenture or lease to which any of them is a
party, excluding trade payables less than sixty (60) days old. The Borrower is
not a party to or bound by any agreement, instrument or indenture that may
require the subordination in right or time of payment of any of the Obligations
to any other indebtedness or obligation of the Borrower.
Section 6.25. SOLVENCY. As of the Closing Date and after giving effect to
the transactions contemplated by this Agreement and the other Loan Documents,
including all of the Loans made hereunder, the Borrower and the Guarantor are
not insolvent on a balance sheet basis such that the sum of each of their
respective assets exceeds the sum of each of their respective liabilities, each
is able to pay its debts as they become due, and each has sufficient capital to
carry on its business.
Section 6.26. MIT UNSECURED L.P. MIT-ULP, Inc., a wholly-owned Subsidiary
of the Borrower, is the sole limited partner of MIT Unsecured L.P., and MIT
Unsecured, Inc., the sole general partner of MIT Unsecured L.P., is a
wholly-owned Subsidiary of the Borrower.
42
SECTION 7. AFFIRMATIVE COVENANTS OF THE BORROWER.
The Borrower covenants and agrees that, so long as any Loan or Note or
Letter of Credit is outstanding or any Bank has any obligation to make any Loans
or the Agent has any obligation to issue any Letters of Credit:
Section 7.1. PUNCTUAL PAYMENT. The Borrower will duly and punctually pay
or cause to be paid the principal and interest on the Loans and all interest and
fees provided for in this Agreement, all in accordance with the terms of this
Agreement and the Notes as well as all other sums owing pursuant to the Loan
Documents.
Section 7.2. MAINTENANCE OF OFFICE. The Borrower will maintain its chief
executive office at 000 Xxxxxx Xxxxxx, 00xx Xxxxx, Xxx Xxxxxxxxx, Xxxxxxxxxx
00000, or at such other place in the United States of America as the Borrower
shall designate upon prior written notice to the Agent and the Banks, where
notices, presentations and demands to or upon the Borrower in respect of the
Loan Documents may be given or made.
Section 7.3. RECORDS AND ACCOUNTS. The Borrower will (a) keep, and cause
each of its Subsidiaries to keep, true and accurate records and books of account
in which full, true and correct entries will be made in accordance with
generally accepted accounting principles and (b) maintain adequate accounts and
reserves for all taxes (including income taxes), depreciation and amortization
of its properties and the properties of its Subsidiaries, contingencies and
other reserves. Neither the Borrower nor the Guarantor nor any of their
respective Subsidiaries shall, without the prior written consent of the Majority
Banks, (x) make any material change to the accounting procedures used by such
Person in preparing the financial statements and other information described in
Section 6.4 or (y) change its fiscal year.
Section 7.4. FINANCIAL STATEMENTS, CERTIFICATES AND INFORMATION. The
Borrower will deliver to each of the Banks:
(a) as soon as practicable, but in any event not later than 90 days
after the end of each fiscal year of the Borrower, the audited consolidated
balance sheet of the Borrower and its Subsidiaries at the end of such year, and
the related audited consolidated statements of income, changes in shareholder's
equity and cash flows for such year, each setting forth in comparative form the
figures for the previous fiscal year and all such statements to be in reasonable
detail, prepared in accordance with generally accepted accounting principles,
and accompanied by an auditor's report prepared without qualification by Xxxxxx
Xxxxxxxx LLP or by another "Big Six" accounting firm, the Form 10-K filed with
the SEC (unless the SEC has approved an extension, in which event the Borrower
will deliver to the Agent and each of the Banks a copy of the Form 10-K
simultaneously with delivery to the SEC), and any other information the Banks
may need to complete a financial analysis of the Borrower and its Subsidiaries.
At any time that the Agent has reasonable grounds to request the same
(including,
43
without limitation, at any time that the Compliance Certificate indicates that
the Borrower is at or near minimum compliance with the financial covenants
contained in this Agreement), the Agent may require that such report be
accompanied by a written statement from such accountants to the effect that they
have read a copy of this Agreement, and that, in making the examination
necessary for said certification, they have obtained no knowledge of any Default
or Event of Default, or, if such accountants shall have obtained knowledge of
any then existing Default or Event of Default, they shall disclose in such
statement any such Default or Event of Default;
(b) as soon as practicable, but in any event not later than 45 days
after the end of each fiscal quarter of the Borrower (including the fourth
fiscal quarter in each year), copies of the unaudited consolidated balance sheet
of the Borrower and its Subsidiaries as at the end of such quarter, and the
related unaudited consolidated statements of income, changes in shareholder's
equity and cash flows for the portion of the Borrower's fiscal year then
elapsed, all in reasonable detail and prepared in accordance with generally
accepted accounting principles (which may be provided by inclusion in the Form
10-Q of the Borrower for such period provided pursuant to subsection (c) below),
together with a certification by an Authorized Officer of the Borrower that the
information contained in such financial statements fairly presents the financial
position of the Borrower and its Subsidiaries on the date thereof (subject to
year-end adjustments);
(c) as soon as practicable, but in any event not later than 45 days
after the end of each fiscal quarter of the Borrower (excluding the fourth
fiscal quarter in each year), copies of Form 10-Q filed with the SEC (unless the
SEC has approved an extension in which event the Borrower will deliver such
copies of the Form 10-Q to the Agent and each of the Banks simultaneously with
delivery to the SEC);
(d) as soon as practicable, but in any event not later than 45 days
after the end of each fiscal quarter of the Borrower (including the fourth
fiscal quarter in each year), copies of a consolidated statement of the Funds
from Operations for such fiscal quarter for the Borrower and its Subsidiaries
and the Net Operating Income and Operating Cash Flow for the Real Estate and
year-to-date in form and substance satisfactory to Agent, prepared on a basis
consistent with the statement furnished pursuant to Section 6.4(c) together with
a certification by an Authorized Officer of the Borrower that the information
contained in such statement fairly presents the Funds from Operations of the
Borrower and its Subsidiaries and the Net Operating Income and Operating Cash
Flow for the Real Estate for such period;
(e) simultaneously with the delivery of the financial statements
referred to in subsections (a) and (b) above, and within thirty (30) days of the
filing with the SEC of a Form 8-K or any other document amending any other
filing previously made by the Borrower which could reasonably be expected to
have a materially adverse effect on the Borrower, a statement (a "Compliance
Certificate") certified by an Authorized Officer of the Borrower and the
Guarantor in the form of EXHIBIT D hereto setting forth in reasonable detail
computations evidencing
44
compliance with the covenants contained in Section 9, and (if applicable)
reconciliations to reflect changes in generally accepted accounting principles
since the Balance Sheet Date;
(f) concurrently with the delivery of the financial statements
described in subsections (b) and (c) above, a certificate signed by an
Authorized Officer of the Borrower to the effect that, having read this
Agreement, and based upon an examination which they deem sufficient to enable
them to make an informed statement, there does not exist any Default or Event of
Default, or if such Default or Event of Default has occurred, specifying the
facts with respect thereto;
(g) contemporaneously with the filing or mailing thereof, copies of
all material of a financial nature filed with the SEC or sent to the
stockholders of the Borrower;
(h) upon request of the Agent, but in any event not later than 30
days after receipt of notice of such request from the Agent, updated Rent Rolls
with respect to the Real Estate, a summary of each Rent Roll in form reasonably
satisfactory to the Agent, and a leasing activity report with respect to the
Real Estate setting forth the Borrower's efforts to market and lease the then
unleased space in the Real Estate and the results of such efforts;
(i) simultaneously within the delivery of the financial statement
referred to in subsection (a) above, a statement (i) listing the Real Estate
owned by the Borrower and its Subsidiaries (or in which Borrower or its
Subsidiaries owns an interest) and stating the owner thereof, the location
thereof, the date acquired and the acquisition cost, (ii) listing the
Indebtedness of the Borrower and its Subsidiaries (excluding Indebtedness of the
type described in Section 8.1(b)-(e)), which statement shall include, without
limitation, a statement of the original principal amount of such Indebtedness
and the current amount outstanding, the holder thereof, the maturity date and
any extension options, the interest rate, the collateral provided for such
Indebtedness and whether such Indebtedness is recourse or Non-recourse, and
(iii) listing the properties of the Borrower and its Subsidiaries which are
under "development" (as used in Section 8.9) and providing a brief summary of
the status of such development;
(j) promptly after they are filed with the Internal Revenue Service,
copies of all annual federal income tax return and amendments thereto of the
Borrower;
(k) not later than five (5) Business Days after the Borrower receives
notice of the same from either of the Rating Agencies or otherwise learns of the
same, notice of the issuance of any change in the rating by either of the Rating
Agencies in respect of any debt of the Borrower (including any change in an
Implied Rating), together with the details thereof, and of any announcement by
either of the Rating Agencies that any such rating is "under review" or that any
such rating has been placed on a watch list or that any similar action has been
taken by either of the Rating Agencies (collectively a "Rating Notice"); and
45
(l) from time to time such other financial data and information in
the possession of the Borrower or the Guarantor (including without limitation
separate financial statements for the Guarantor, auditors' management letters,
evidence of payment of taxes, property inspection and environmental reports and
information as to zoning and other legal and regulatory changes affecting the
Borrower or the Guarantor) as the Agent may reasonably request.
Section 7.5. NOTICES.
(a) DEFAULTS. The Borrower will promptly notify the Agent in writing
of the occurrence of any Default or Event of Default. If any Person shall give
any notice or take any other action in respect of a claimed default (whether or
not constituting an Event of Default) under this Agreement or under any note,
evidence of indebtedness, indenture or other obligation to which or with respect
to which the Borrower or any of its Subsidiaries or the Guarantor is a party or
obligor, whether as principal or surety, and such default would permit the
holder of such note or obligation or other evidence of indebtedness to
accelerate the maturity thereof, which acceleration would have a material
adverse effect on the Borrower or the Guarantor or the existence of which
claimed default might become an Event of Default under Section 12.1(g), the
Borrower shall forthwith give written notice thereof to the Agent and each of
the Banks, describing the notice or action and the nature of the claimed
default.
(b) ENVIRONMENTAL EVENTS. The Borrower will promptly give notice to
the Agent (i) upon the Borrower obtaining knowledge of any potential or known
Release, or threat of Release, of any Hazardous Substances at or from any Real
Estate of the Borrower or its Subsidiaries; (ii) of any violation of any
Environmental Law that the Borrower or any of its Subsidiaries reports in
writing or is reportable by such Person in writing (or for which any written
report supplemental to any oral report is made) to any federal, state or local
environmental agency and (iii) upon becoming aware thereof, of any inquiry,
proceeding, investigation, or other action, including a notice from any agency
of potential environmental liability, of any federal, state or local
environmental agency or board, that in either case involves any Real Estate of
the Borrower or its Subsidiaries or has the potential to materially affect the
assets, liabilities, financial conditions or operations of the Borrower or any
Subsidiary.
(c) NOTICE OF LITIGATION AND JUDGMENTS. The Borrower will give
notice to the Agent in writing within 15 days of becoming aware of any
litigation or proceedings threatened in writing or any pending litigation and
proceedings affecting the Borrower, any of its Subsidiaries or the Guarantor, or
to which such Person is or is to become a party involving an uninsured claim
against such Person that could reasonably be expected to have a materially
adverse effect on such Person and stating the nature and status of such
litigation or proceedings. The Borrower will give notice to the Agent, in
writing, in form and detail satisfactory to the Agent and each of the Banks,
within ten days of any judgment not covered by insurance, whether final or
otherwise, against the Borrower, any of its Subsidiaries or the Guarantor in an
amount in excess of $250,000.
46
(d) NOTICE OF PROPOSED SALES, ENCUMBRANCES, REFINANCE OR TRANSFER.
The Borrower will give notice to the Agent of any proposed or completed sale,
encumbrance (excluding encumbrances described in Section 8.2(iv)), refinance or
transfer of any Real Estate or other Investment described in Section 8.3(j) of
the Borrower of its Subsidiaries within any fiscal quarter of the Borrower, such
notice to be submitted together with the Compliance Certificate provided or
required to be provided to the Banks under Section 7.4 with respect to such
fiscal quarter. The Compliance Certificate shall with respect to any proposed
or completed sale, encumbrance, refinance or transfer be adjusted in the best
good-faith estimate of the Borrower to give effect to such sale, encumbrance,
refinance or transfer and demonstrate that no Default or Event of Default with
respect to the covenants referred to therein shall exist after giving effect to
such sale, encumbrance, refinance or transfer. Notwithstanding the foregoing,
in the event of any sale, encumbrance, refinance or transfer of any Real Estate
or other Investment described in Section 8.3(j) of the Borrower or its
Subsidiaries involving an amount in excess of twenty percent (20%) of the value
of the Consolidated Total Assets of the Borrower, the Borrower shall promptly
give notice to the Agent of such transaction, which notice shall be accompanied
by a certification of Authorized Officer of the Borrower that no Default or
Event of Default shall exist after giving affect to such event.
(e) NOTIFICATION OF BANKS. Promptly after receiving any notice under
this Section 7.5, the Agent will forward a copy thereof to each of the Banks,
together with copies of any certificates or other written information that
accompanied such notice.
Section 7.6. EXISTENCE; MAINTENANCE OF PROPERTIES.
(a) The Borrower will do or cause to be done all things necessary to
preserve and keep in full force and effect its existence as a Maryland
corporation. The Borrower will cause each of its Subsidiaries to do or cause to
be done all things necessary to preserve and keep in full force and effect its
legal existence. The Borrower will do or cause to be done all things necessary
to preserve and keep in full force all of its rights and franchises and those of
its Subsidiaries. The Borrower will, and will cause each of its Subsidiaries
to, continue to engage primarily in the businesses now conducted by it and in
related businesses.
(b) The Borrower (i) will cause all of its properties and those of
its Subsidiaries used or useful in the conduct of its business or the business
of its Subsidiaries to be maintained and kept in good condition, repair and
working order (ordinary wear and tear excepted) and supplied with all necessary
equipment, and (ii) will cause to be made all necessary repairs, renewals,
replacements, betterments and improvements thereof in all cases in which the
failure so to do would have a material adverse effect on the condition of its
properties or on the financial condition, assets or operations of the Borrower
and its Subsidiaries.
Section 7.7. INSURANCE. The Borrower will, at its expense, procure and
maintain or cause to be procured and maintained insurance covering the Borrower,
its Subsidiaries and their respective
47
properties in such amounts and against such risks and casualties as are
customary for properties of similar character and location, due regard being
given to the type of improvements thereon, their construction, location, use and
occupancy.
Section 7.8. TAXES. The Borrower and each Subsidiary will duly pay and
discharge, or cause to be paid and discharged, before the same shall become
overdue, all taxes, assessments and other governmental charges imposed upon it
and upon the Real Estate, sales and activities, or any part thereof, or upon the
income or profits therefrom, as well as all claims for labor, materials, or
supplies that if unpaid might by law become a lien or charge upon any of its
property; PROVIDED that any such tax, assessment, charge, levy or claim need not
be paid if the validity or amount thereof shall currently be contested in good
faith by appropriate proceedings and if the Borrower or such Subsidiary shall
have set aside on its books adequate reserves with respect thereto; and
PROVIDED, FURTHER, that forthwith upon the commencement of proceedings to
foreclose any lien that may have attached as security therefor, the Borrower and
each Subsidiary of the Borrower either (i) will provide a bond issued by a
surety reasonably acceptable to the Agent and sufficient to stay all such
proceedings or (ii) if no such bond is provided, will pay each such tax,
assessment, charge, levy or claim. The Borrower shall certify annually to the
Agent that the Borrower is in compliance with this Section 7.8 with respect to
the Unencumbered Operating Properties.
Section 7.9. INSPECTION OF PROPERTIES AND BOOKS. The Borrower shall
permit the Banks, through the Agent or any representative designated by the
Agent, at the Borrower's expense to visit and inspect any of the properties of
the Borrower or any of its Subsidiaries, to examine the books of account of the
Borrower and its Subsidiaries (and to make copies thereof and extracts
therefrom) and to discuss the affairs, finances and accounts of the Borrower and
its Subsidiaries with, and to be advised as to the same by, its officers, all at
such reasonable times and intervals as the Agent or any Bank may reasonably
request. The Banks shall use good faith efforts to coordinate such visits and
inspections so as to minimize the interference with and disruption to the
Borrower's normal business operations.
Section 7.10. COMPLIANCE WITH LAWS, CONTRACTS, LICENSES, AND PERMITS. The
Borrower will comply with, and will cause each of its Subsidiaries to comply in
all respects with (i) all applicable laws and regulations now or hereafter in
effect wherever its business is conducted, including all Environmental Laws,
(ii) the provisions of its corporate charter, partnership agreement or
declaration of trust, as the case may be, and other charter documents and
bylaws, (iii) all agreements and instruments to which it is a party or by which
it or any of its properties may be bound, (iv) all applicable decrees, orders,
and judgments, and (v) all licenses and permits required by applicable laws and
regulations for the conduct of its business or the ownership, use or operation
of its properties (with respect to subsections (i), (iii) and (v) above, such
compliance shall be in all material respects, subject to the provisions of
Section 12.1(f)). If at any time while any Loan or Note or Letter of Credit is
outstanding or the Banks have any obligation to make Loans hereunder or the
Agent has any obligation to issue any Letters of Credit hereunder, any
authorization, consent, approval, permit or license from any officer, agency or
instrumentality of
48
any government shall become necessary or required in order that the Borrower may
fulfill any of its obligations hereunder, the Borrower will immediately take or
cause to be taken all steps necessary to obtain such authorization, consent,
approval, permit or license and furnish the Agent and the Banks with evidence
thereof.
Section 7.11. USE OF PROCEEDS. Subject to the limitations set forth
herein, the Borrower will use the proceeds of the Loans or issuances of Letters
of Credit solely to provide short-term financing (a) for the acquisition and
development of interests in primarily non-specialized industrial real estate of
institutional quality (either direct fee interests or interests in joint
ventures or partnerships owning such property, as permitted by this Agreement),
including reasonable transaction costs related thereto; (b) for the making of
construction loans to the Borrower's Subsidiaries or joint ventures composed of
the Borrower and third parties, PROVIDED that the amount of Loans and Letters
of Credit outstanding at any time which has been advanced for this purpose shall
not exceed ten percent (10%) of the Consolidated Total Assets of the Borrower
and its Subsidiaries; (c) for working capital purposes; and (d) for such other
purposes as the Majority Banks in their discretion from time to time may agree
to in writing. Notwithstanding anything herein to the contrary, the amount of
Loans and Letters of Credit Outstanding at any time which has been advanced for
the purpose described in Section 7.11(c) shall not exceed $25,000,000.00, and
may be used by Borrower only for the following purposes: (i) for the payment of
expenditures for Capital Improvement Projects, tenant finish and leasing
commissions; (ii) up to $5,000,000.00 per quarter for payment of Distributions
up to a maximum amount outstanding at one time of $10,000,000.00, provided that
the Borrower shall not draw on the Loans for payment of Distributions in any two
(2) consecutive quarters; (iii) up to a maximum amount outstanding at any time
of $10,000,000.00 to repurchase Voting Interests of the Borrower (other than
Voting Interests owned by Xxxx Realty Acquisitions, L.P., USAA Real Estate
Company or subsequent private placement investors); and (iv) with respect to
amounts Outstanding under Letters of Credit only, for other working capital
purposes. Upon repayment of all or a portion of the Loans, the Borrower will be
allowed to reborrow for working capital purposes subject to the limitations set
forth above.
Section 7.12. FURTHER ASSURANCES. The Borrower will cooperate with, and
will cause each of its Subsidiaries to cooperate with the Agent and the Banks
and execute such further instruments and documents as the Banks or the Agent
shall reasonably request to carry out to their satisfaction the transactions
contemplated by this Agreement and the other Loan Documents.
Section 7.13. REIT STATUS. Subject to the terms of Section 8.7, the
Borrower shall at all times comply with all requirements of applicable laws and
regulations necessary to maintain REIT Status and shall operate its business as
described in the Prospectus in all material aspects and in compliance with the
terms and conditions of this Agreement and the other Loan Documents.
Section 7.14. RESTRICTIONS ON ACQUISITIONS. The Borrower shall, and shall
cause each of its Subsidiaries to, exercise due diligence in connection with the
acquisition of Real Estate or other assets and shall not knowingly acquire any
Real Estate or other assets which has any material
49
title, survey, environmental, structural or other defects that would give rise
to a materially adverse effect as to the value, use of or ability to sell or
refinance such property or the business or affairs of the Borrower or its
Subsidiaries.
Section 7.15. UNENCUMBERED OPERATING PROPERTIES.
(a) The Borrower and the Guarantor shall at all times own
Unencumbered Operating Properties which satisfy all of the following conditions:
(i) at least seventy-five percent (75%) of the Asset Value of
the Unencumbered Operating Properties constitutes industrial properties;
(ii) as of the end of each fiscal quarter, at least eighty-five
percent (85%) of the total Gross Rentable Area of the Unencumbered
Operating Properties is subject to arms-length Leases which are in full
force and effect and pursuant to which the tenants are paying rent, and at
least seventy-seven percent (77%) of the total Gross Rentable Area in the
Unencumbered Operating Properties is physically occupied by tenants under
arms-length Leases which are in full force and effect;
(iii) no more than thirty-five (35%) of the Asset Value of the
Unencumbered Operating Properties is located in any one city or
metropolitan area; and
(iv) no one tenant shall comprise more than seven percent (7%)
[ten percent (10%) if the tenant has an Implied Rating of BBB- or better
from Standard & Poor's Corporation and twenty percent (20%) if the tenant
is Sears and it has an Implied Rating of A3 or better from Xxxxx'x
Investors Service, Inc. or BBB+ from Standard & Poor's Corporation] of the
Gross Cash Receipts generated by the Unencumbered Operating Properties.
(b) The Borrower shall provide to the Agent as of the Closing Date
and concurrently with the delivery of the financial statements described in
Section 7.4(a) (i) a list of the Unencumbered Operating Properties, (ii) the
certification of an Authorized Officer of the Borrower or the Guarantor, as
applicable, of the Asset Values and that such Unencumbered Operating Properties
are in compliance with Section 7.15(a), and (iii) operating statements setting
forth the Net Operating Income and Operating Cash Flow for each of the
Unencumbered Operating Properties for the previous four (4) fiscal quarters
certified as true and correct by an Authorized Officer of the Borrower or the
Guarantor, as applicable. In the event that all or any material portion of a
property within the Unencumbered Operating Properties shall be damaged or taken
by condemnation, then such property shall no longer be a part of the
Unencumbered Operating Properties unless and until any damage to such Real
Estate is repaired or restored, such Real Estate becomes fully operational and
the Agent shall receive evidence satisfactory to the Agent of the value, Net
Operating Income and Operating Cash Flow of such Real Estate following such
repair or restoration.
50
(c) Nothing herein shall be construed as an obligation of the
Borrower to grant any mortgage, pledge or security interest to the Agent or the
Banks in any of the Unencumbered Operating Properties, nor as an obligation of
the Borrower to reserve any particular Unencumbered Operating Property as
potential collateral for the Agent and the Banks; provided, however, that this
Section 7.15(c) shall not diminish the Borrower's obligation to comply with the
terms of this Section 7.15 or Section 7.16.
(d) The Borrower and the Guarantor will use commercially reasonable
efforts to ascertain the equity ownership of each of its potential tenants prior
to executing a Lease (excluding those tenants from whom the Borrower or the
Guarantor derive a sufficiently small amount of revenue such that, in the
reasonable opinion of the management of the Borrower or the Guarantor, rent from
such tenant would not adversely affect the Borrower's ability to qualify as a
REIT), in order to identify any tenants in which Ameritech owns, directly or
indirectly, a ten percent (10%) or greater equity interest, and neither the
Borrower nor any Guarantor shall enter into Leases with any tenants so
identified.
Section 7.16. LIMITING AGREEMENTS.
(a) Neither Borrower nor any of its Subsidiaries nor the Guarantor
shall enter into any agreement, instrument or transaction which has or may have
the effect of prohibiting or limiting the Borrower's or the Guarantor's ability
to pledge to the Agent Real Estate, the OTR Minority Interest, any other
minority interests of the Borrower in unconsolidated joint ventures and
partnerships approved by the Majority Banks, interests of the Borrower in
Subsidiaries or other assets owned by Borrower or Guarantor. Borrower and
Guarantor shall take, and Borrower shall cause its Subsidiaries to take, such
actions as are necessary to preserve the right and ability of Borrower and
Guarantor to pledge those Real Estate assets as security for the Loans without
any such pledge after the date hereof causing or permitting the acceleration
(after the giving of notice or the passage of time, or otherwise) of any other
Indebtedness of Borrower or any of its Subsidiaries or the Guarantor. This
Section 7.16 shall not be construed as limiting Borrower's or Guarantor's rights
under Section 8.2 as it relates to a particular type of lien which the Borrower
or the Guarantor may incur.
(b) Borrower shall, upon demand by the Agent in the exercise of the
Agent's reasonable discretion, provide to the Agent such evidence as the Agent
may reasonably require to evidence Borrower's compliance with this Section 7.16,
which evidence shall include, without limitation, copies of any agreements or
instruments which would in any way restrict or limit the Borrower's or the
Guarantor's ability to pledge assets as security for Indebtedness, or which
provide for the occurrence of a default (after the giving of notice or the
passage of time, or otherwise) if assets are pledged in the future as security
for Indebtedness of the Borrower or any of its Subsidiaries or the Guarantor.
Section 7.17. ENVIRONMENTAL AND ENGINEERING INSPECTIONS. The Borrower
shall, with respect to
51
each property at any time included as part of the Unencumbered Operating
Properties, provide to the Agent evidence reasonably satisfactory to the Agent
prior to the inclusion of such property within the Unencumbered Operating
Properties that (a) the Borrower has completed an appropriate investigation of
the physical condition of such property, including without limitation an
analysis of the structural condition and existence of any material deferred
maintenance, and that such property is in good condition, order and repair and
that any material deferred maintenance has been corrected or satisfactory
remediation actions are being taken, as determined by the Agent in its
reasonable judgment, and (b) that the Borrower has completed an appropriate
investigation of the environmental condition of each proposed property,
including preparation of a "Phase I" report and, if appropriate, a "Phase II"
report, in each case prepared by a recognized environmental engineer in
accordance with customary standards which discloses that such property is not in
violation of the representations and covenants set forth in this Agreement,
unless satisfactory remediation actions are being taken, as determined by the
Agent in its reasonable judgment.
Section 7.18. DISTRIBUTION OF INCOME TO THE BORROWER. The Borrower shall
cause all of its Subsidiaries to promptly distribute to the Borrower (but not
less frequently than once each fiscal quarter of the Borrower), whether in the
form of dividends, distributions or otherwise, all profits, proceeds or other
income relating to or arising from its Subsidiaries' use, operation, financing,
refinancing, sale or other disposition of their respective assets and properties
after (a) the payment by each Subsidiary of its Debt Service and Operating
Expenses for such quarter and (b) the establishment of reasonable reserves for
the payment of Operating Expenses not paid on at least a quarterly basis and
Capital Improvement Projects to be made to such Subsidiary's assets and
properties approved by such Subsidiary in the ordinary course of business
consistent with its past practices.
SECTION 8. CERTAIN NEGATIVE COVENANTS OF THE BORROWER.
The Borrower covenants and agrees that, so long as any Loan or Note or
Letter of Credit is outstanding or any of the Banks has any obligation to make
any Loans or the Agent has any obligation to issue any Letters of Credit:
Section 8.1. RESTRICTIONS ON INDEBTEDNESS. The Borrower will not, and
will not permit any of its Subsidiaries to, create, incur, assume, guarantee or
be or remain liable, contingently or otherwise, with respect to any Indebtedness
other than:
(a) Indebtedness to the Banks arising under any of the Loan
Documents;
(b) current liabilities of the Borrower or its Subsidiaries incurred
in the ordinary course of business, including letters of credit not to exceed
$1,500,000.00 in the aggregate, but not incurred through (i) the borrowing of
money, or (ii) the obtaining of credit except for credit on an open account
basis customarily extended and in fact extended in connection with normal
purchases of goods and services;
52
(c) Indebtedness in respect of taxes, assessments, governmental
charges or levies and claims for labor, materials and supplies to the extent
that payment therefor shall not at the time be required to be made in accordance
with the provisions of Section 7.8;
(d) Indebtedness in respect of judgments or awards that have been in
force for less than the applicable period for taking an appeal so long as
execution is not levied thereunder or in respect of which the Borrower shall at
the time in good faith be prosecuting an appeal or proceedings for review and in
respect of which a stay of execution shall have been obtained pending such
appeal or review;
(e) endorsements for collection, deposit or negotiation and
warranties of products or services, in each case incurred in the ordinary course
of business;
(f) subject to the provisions of Section 9, Non-recourse Indebtedness
of the Borrower or any Subsidiary of the Borrower related to the acquisition of
Real Estate or a refinance of the Prudential Loan in an aggregate outstanding
principal amount not to exceed thirty-five percent (35%) of the value of the
Consolidated Total Assets of the Borrower, adjusted pursuant to Section 9.7;
(g) Indebtedness in respect of reverse repurchase agreements having a
term of not more than 180 days with respect to Investments described in Section
8.3(d) or (e);
(h) The Prudential Loan, provided the Prudential Loan shall remain
Non-recourse as to the Borrower;
(i) Indebtedness not to exceed $2,000,000.00 in the aggregate in
respect of note purchase agreement(s) relating to loans made to executive
officers of the Borrower for the purchase of shares of beneficial interest in
the Borrower; and
(j) unsecured Debt Offerings which have been granted an Investment
Grade Rating by either of the Rating Agencies at the time of issuance provided
(i) at the time such Indebtedness is issued the scheduled maturity date of such
Indebtedness is not sooner than six (6) days after the Maturity Date (after
giving effect to any extension of the Maturity Date which may have been
requested by the Borrower prior to the issuance of such Indebtedness or approved
by the Banks, whether or not the same has become effective), and (ii) Borrower
shall exercise its best efforts to ensure that any covenants or restrictions
imposed upon the Borrower, the Guarantor or their respective Subsidiaries in
connection with such Indebtedness shall not individually or in the aggregate be
more restrictive against the Borrower, the Guarantor and their respective
Subsidiaries than the covenants and restrictions imposed pursuant to this
Agreement or the other Loan Documents, but in any event, the covenants and
restrictions imposed in connection with such Indebtedness shall not be more
restrictive than the covenants and restrictions contained in Section 8.1,
Section 8.2, Section 8.3, Section 8.7 and Section 9 of this Agreement; and
provided further
53
that neither the Borrower, Guarantor nor any of their respective Subsidiaries
shall incur any of the Indebtedness described in this Section 8.1(j) unless it
shall have provided to the Banks prior written notice of the proposed issuance
of such Indebtedness, a statement that no Default or Event of Default exists and
a certificate that the Borrower will be in compliance with its covenants
referred to herein after giving effect to such incurrence; and
(k) Indebtedness of Subsidiaries to Borrower or other Subsidiaries of
Borrower, provided that repayment of such Indebtedness shall be subordinate at
all times to repayment of the Obligations pursuant to a subordination and
standstill agreement in form satisfactory to the Majority Banks.
Section 8.2. RESTRICTIONS ON LIENS, ETC. The Borrower will not, and will
not permit any of its Subsidiaries to, (a) create or incur or suffer to be
created or incurred or to exist any lien, encumbrance, mortgage, pledge,
negative pledge, charge, restriction or other security interest of any kind upon
any of its property or assets of any character whether now owned or hereafter
acquired, or upon the income or profits therefrom; (b) transfer any of its
property or assets or the income or profits therefrom for the purpose of
subjecting the same to the payment of Indebtedness or performance of any other
obligation in priority to payment of its general creditors; (c) acquire, or
agree or have an option to acquire, any property or assets upon conditional sale
or other title retention or purchase money security agreement, device or
arrangement; (d) suffer to exist for a period of more than 30 days after the
same shall have been incurred any Indebtedness or claim or demand against it
that if unpaid might by law or upon bankruptcy or insolvency, or otherwise, be
given any priority whatsoever over its general creditors; (e) sell, assign,
pledge, encumber or otherwise transfer any accounts, contract rights, general
intangibles, chattel paper or instruments, with or without recourse; or (f)
incur or maintain any obligation to any holder of Indebtedness of the Borrower
or such Subsidiary which prohibits the creation or maintenance of any lien
securing the Obligations (collectively "Liens"); PROVIDED that, the Borrower and
any Subsidiary of the Borrower may create or incur or suffer to be created or
incurred or to exist:
(i) liens in favor of the Borrower on all or part of the
assets of Subsidiaries of the Borrower securing Indebtedness owing by
Subsidiaries of the Borrower to the Borrower;
(ii) liens on properties to secure taxes, assessments and other
governmental charges or claims for labor, material or supplies in respect
of obligations not overdue;
(iii) liens on properties in respect of judgments, awards or
indebtedness, the Indebtedness with respect to which is permitted by
Section 8.1(d) or Section 8.1(f);
(iv) encumbrances on properties consisting of leases entered
into in the ordinary conduct of the business of the Borrower and its
Subsidiaries, easements, rights
54
of way, zoning restrictions, restrictions on the use of real property and
defects and irregularities in the title thereto, landlord's or lessor's
liens under leases to which the Borrower or a Subsidiary of the Borrower is
a party, and other minor non-monetary liens or encumbrances none of which
interferes materially with the use of the property effected in the ordinary
conduct of the business of the Borrower and its Subsidiaries, which defects
do not individually or in the aggregate have a materially adverse effect on
the business of the Borrower individually or of the Borrower and its
Subsidiaries on a consolidated basis;
(v) liens on Real Estate and Short-term Investments securing
Non-recourse Indebtedness permitted by Section 8.1(f);
(vi) liens in favor of the Agent and the Banks;
(vii) liens securing the Prudential Loan; and
(viii) liens securing Indebtedness described in Section 8.1(k).
Section 8.3. RESTRICTIONS ON INVESTMENTS. The Borrower will not, and will
not permit any of its Subsidiaries to, make or permit to exist or to remain
outstanding any Investment except Investments in:
(a) marketable direct or guaranteed obligations of the United States
of America that mature within five (5) years from the date of purchase by the
Borrower or its Subsidiary;
(b) marketable direct obligations of any of the following: Federal
Home Loan Mortgage Corporation, Student Loan Marketing Association, Federal Home
Loan Banks, Federal National Mortgage Association, Government National Mortgage
Association, Bank for Cooperatives, Federal Intermediate Credit Banks, Federal
Financing Banks, Export-Import Bank of the United States, Federal Land Banks, or
any other agency or instrumentality of the United States of America;
(c) demand deposits, certificates of deposit, bankers acceptances and
time deposits of United States banks having total assets in excess of
$100,000,000; PROVIDED, HOWEVER, that the aggregate amount at any time so
invested with any single bank having total assets of less than $1,000,000,000
will not exceed $200,000;
(d) securities commonly known as "commercial paper" issued by a
corporation organized and existing under the laws of the United States of
America or any State which at the time of purchase are rated by Xxxxx'x
Investors Service, Inc. or by Standard & Poor's Corporation at not less than "P
1" if then rated by Xxxxx'x Investors Service, Inc., and not less than "A 1", if
then rated by Standard & Poor's Corporation;
55
(e) mortgage-backed securities guaranteed by the Government National
Mortgage Association, the Federal National Mortgage Association or the Federal
Home Loan Mortgage Corporation and other mortgage-backed bonds which at the time
of purchase are rated by Xxxxx'x Investors Service, Inc. or by Standard & Poor's
Corporation at not less than "Aa" if then rated by Xxxxx'x Investors Service,
Inc. and not less than "AA" if then rated by Standard & Poor's Corporation;
(f) repurchase agreements having a term not greater than 90 days and
fully secured by securities described in the foregoing subsection (a), (b) or
(e) with banks described in the foregoing subsection (c) or with financial
institutions or other corporations having total assets in excess of
$500,000,000;
(g) shares of so-called "money market funds" registered with the SEC
under the Investment Company Act of 1940 which maintain a level per-share value,
invest principally in investments described in the foregoing subsections (a)
through (f) and have total assets in excess of $50,000,000;
(h) subject to the provisions of Section 9.6, Investments in fee
interests in Real Estate constituting institutional grade, non-specialized
industrial property, including xxxxxxx money deposits relating thereto and
transaction costs;
(i) Investments in Subsidiaries in which the Borrower holds 100% of
the Voting Interests;
(j) subject to the provisions of Section 9.6, interests in
partnerships, joint ventures, corporations or other entities which own
institutional grade real property used principally for industrial purposes;
(k) Investments in shares of beneficial interest in the Borrower,
provided that the Borrower shall give notice to the Agent concurrently with the
financial statements provided in Section 7.4(b) of any such Investments that
have occurred during the preceding fiscal quarter of the Borrower;
(l) Investments in purchase money notes payable to the order of the
Borrower or any of its Subsidiaries which are received in connection with the
sale by the Borrower or any of its Subsidiaries of Real Estate, provided that
Borrower shall not, for any fiscal quarter, permit the aggregate outstanding
principal balance of such purchase money notes to exceed ten percent (10%) of
the value of the Consolidated Total Assets of the Borrower, adjusted pursuant to
Section 9.7;
(m) Investments in notes payable to the Borrower made by executive
officers of the Borrower for the purchase of shares of beneficial interest in
the Borrower in an aggregate outstanding principal amount not exceeding
$2,000,000.00;
56
(n) Investments in construction loans permitted pursuant to the
provisions of Section 7.11; and
(o) all assets being purchased by the Borrower as described in the
Borrower's Proxy Statement for Special Shareholders Meeting to be held on
September 24, 1997.
Section 8.4. MERGER, CONSOLIDATION. The Borrower will not, and will not
permit any of its Subsidiaries to, become a party to any merger, consolidation
or other business combination without the prior written consent of the Majority
Banks except (i) the merger or consolidation of one or more of the Subsidiaries
of the Borrower with and into the Borrower, (ii) the merger or consolidation of
two or more Subsidiaries of the Borrower, and (iii) the merger or consolidation
of one or more unaffiliated corporations or other entities with and into the
Borrower where (a) the Borrower is the surviving entity, (b) immediately after
the merger or consolidation, the original shareholders of the Borrower at the
time of such consolidation or merger own at least fifty-one percent (51%) of the
Voting Interests in the Borrower, (c) the purpose of the consolidation or merger
is the acquisition of Real Estate as permitted under this Agreement, and (d)
immediately prior to such merger the Borrower shall have provided to the Banks a
written statement that no Default or Event of Default exists and a Compliance
Certificate demonstrating that the Borrower will be in compliance with the
covenants referred to therein after giving effect to said merger.
Section 8.5. SALE AND LEASEBACK. The Borrower will not, and will not
permit any of its Subsidiaries to, enter into any arrangement, directly or
indirectly, whereby the Borrower or any Subsidiary of the Borrower shall sell or
transfer any Real Estate owned by it in order that then or thereafter the
Borrower or any Subsidiary shall lease back such Real Estate.
Section 8.6. COMPLIANCE WITH ENVIRONMENTAL LAWS. The Borrower will not,
and will not permit any of its Subsidiaries, to do any of the following:
(a) use any of the Real Estate or any portion thereof as a facility for the
handling, processing, storage or disposal of Hazardous Substances, except for
small quantities of Hazardous Substances used in the ordinary course of business
and in compliance with all applicable Environmental Laws, (b) cause or permit to
be located on any of the Real Estate any underground tank or other underground
storage receptacle for Hazardous Substances except in full compliance with
Environmental Laws, (c) generate any Hazardous Substances on any of the Real
Estate except in full compliance with Environmental Laws, (d) conduct any
activity at any Real Estate or use any Real Estate in any manner so as to cause
a Release of Hazardous Substances on, upon or into the Real Estate or any
surrounding properties or any threatened Release of Hazardous Substances which
might give rise to liability under CERCLA or any other Environmental Law, or
(e) directly or indirectly transport or arrange for the transport of any
Hazardous Substances (except in compliance with all Environmental Laws).
The Borrower shall:
57
(i) in the event of any change in Environmental Laws governing the
assessment, release or removal of Hazardous Substances, which change would lead
a prudent owner of real property to require additional testing to avail itself
of any statutory insurance or limited liability, take all action (including,
without limitation, the conducting of engineering tests at the sole expense of
the Borrower) to determine whether Hazardous Substances were ever Released or
disposed of on the Real Estate; and
(ii) if any Release or disposal of Hazardous Substances shall occur
or shall have occurred on the Real Estate (including without limitation any such
Release or disposal occurring prior to the acquisition of such Real Estate by
the Borrower), cause the prompt containment and removal of such Hazardous
Substances and remediation of the Real Estate in full compliance with all
applicable laws and regulations and to the satisfaction of the Majority Banks;
PROVIDED, that the Borrower shall be deemed to be in compliance with
Environmental Laws for the purpose of this clause (ii) so long as it or a
responsible third party with sufficient financial resources is taking reasonable
action to remediate or manage any event of noncompliance to the satisfaction of
the Majority Banks and no action shall have been commenced by any enforcement
agency. The Majority Banks may engage their own environmental engineer to
review the environmental assessments and the Borrower's compliance with the
covenants contained herein, the cost of which shall be borne by the Borrower.
At any time after an Event of Default shall have occurred hereunder, or,
whether or not an Event of Default shall have occurred, at any time that the
Agent or the Majority Banks shall have reasonable grounds to believe that a
Release or threatened Release of Hazardous Substances may have occurred,
relating to any Real Estate, or that any of the Real Estate is not in compliance
with the Environmental Laws, and, unless such Real Estate is an Unencumbered
Operating Property, that such Release, threatened Release or noncompliance may
be reasonably expected to have a material adverse effect on the Borrower as
determined by the Agent in the exercise of its sole discretion, the Agent may at
its election (and will at the request of the Majority Banks excluding the Agent)
obtain such environmental assessments of such Real Estate prepared by an
environmental engineer as may be necessary or advisable for the purpose of
evaluating or confirming (i) whether any Hazardous Substances are present in the
soil or water at or adjacent to such Real Estate and (ii) whether the use and
operation of such Real Estate comply with all Environmental Laws. Environmental
assessments may include detailed visual inspections of such Real Estate
including, without limitation, any and all storage areas, storage tanks, drains,
dry xxxxx and leaching areas, and the taking of soil samples, as well as such
other investigations or analyses as are necessary or appropriate for a complete
determination of the compliance of such Real Estate and the use and operation
thereof with all applicable Environmental Laws. All such environmental
assessments shall be at the sole cost and expense of the Borrower.
Section 8.7. DISTRIBUTIONS. The Borrower will not make any Distributions
which would cause it to violate any of the following covenants:
(a) Pay any Distribution to the shareholders of the Borrower if such
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Distribution is in excess of the greater of (i) the minimum Distributions
required under the Code to maintain the REIT status of the Borrower, and (ii)
the amount which, when added to the amount of all other Distributions (a) paid
in the same fiscal quarter, would exceed eighty-five percent (85%) of its Funds
from Operations for such fiscal quarter (except that, for the fiscal quarter
ending December 31, 1996 only, such percentage shall be increased to ninety
percent (90%)), and (b) paid for the preceding four fiscal quarters, would
exceed one hundred ten percent (110%) of its Cash Available for Distribution for
the preceding four fiscal quarters (except that, commencing with any fiscal
quarter after December 31, 1996, such percentage shall be decreased to one
hundred percent (100%)); provided, however, that in making the foregoing
calculation, with respect to any calendar quarter in which Borrower has made an
Equity Offering, there shall be excluded the amount of Distributions made during
such calendar quarter to Persons acquiring such Equity Offering, to the extent
such Distributions exceed the pro rata amount of Distributions that would have
been payable to such persons had Distributions been based upon the actual time
that such Person held interests in Borrower during calendar quarter in question
(for example, if an Equity Offering were successfully concluded in the third
month of any calendar quarter, the Persons acquiring interests pursuant to such
new Equity Offering would receive a full quarterly distribution as of the
relevant record date, as opposed to receiving a one-third (1/3) distribution
based on their actual period of ownership for such calendar quarter if pro rata
Distributions were permissible - in making the foregoing calculation, then,
two-thirds of the Distributions to the acquiring Persons would be excluded);
(b) In the event that an Event of Default shall have occurred and be
continuing, the Majority Banks may require that the Borrower make no
Distributions other than the minimum Distributions required under the Code to
maintain the REIT Status of the Borrower, as evidenced by a certification of an
Authorized Officer of the Borrower containing calculations in reasonable detail
satisfactory in form and substance to the Agent; and
(c) Notwithstanding the foregoing, at any time when an Event of
Default shall have occurred and the maturity of the Obligations has been
accelerated, the Majority Banks may prohibit Borrower from making any
Distributions whatsoever, directly or indirectly.
Section 8.8. ASSET SALES. Neither the Borrower nor any Subsidiary shall
sell, transfer or otherwise dispose of any Real Estate or other Investment
described in Section 8.3(j) or (k) or any of the Unencumbered Operating
Properties in excess of twenty percent (20%) of the value of the Consolidated
Total Assets of the Borrower, adjusted pursuant to Section 9.7 (except as the
result of a condemnation or casualty and except for the granting of Permitted
Liens, as applicable) unless there shall have been delivered to the Banks a
statement that no Default or Event of Default exists and a certification that
the Borrower will be in compliance with its covenants referred to therein after
giving effect to such sale, transfer or other disposition.
Section 8.9. DEVELOPMENT ACTIVITY. Neither the Borrower nor any
Subsidiary shall engage, directly or indirectly, in the development of
commercial real estate except for the development of warehouse distribution
facilities (including, without limitation, the speculative development of
59
warehouse distribution facilities, but excluding build-to-suit development of
warehouse distribution facilities which remain 100% leased during development),
the aggregate cost of which facilities (on a fully developed basis) Under
Development at any one time shall not exceed twenty percent (20%) of the value
of the Consolidated Total Assets of the Borrower, adjusted pursuant to Section
9.7. For purposes of this Section 8.9, the term "development" shall include new
construction or the substantial renovation or rehabilitation of improvements to
real property. Without limiting the generality of the foregoing, the Borrower
acknowledges that for the purposes of this Agreement, (i) any interest by the
Borrower or any Subsidiary in a property which is proposed to be developed, or
any interest therein pursuant to which the Borrower or any Subsidiary has the
right to approve site plans or other plans and specifications or pursuant to
which such party's obligations are conditioned upon the achievement of certain
initial lease-up levels, or (ii) any agreement by the Borrower or any Subsidiary
which obligates such party to contribute or otherwise advance funds in
connection with or upon completion of the development of a property, or
(iii) any acquisition of a property which is proposed to be developed or which
is under development and initial lease-up at the time such agreement is entered
into, shall be considered a "development" for the purposes of this Section 8.9;
provided, however, that nothing in this Section 8.9 shall prohibit the Borrower
or any Subsidiary from entering into an agreement to acquire Real Estate at a
time when such Real Estate has been developed and initially leased by another
Person.
Section 8.10. SOURCES OF CAPITAL. The Borrower shall, at all times that
the Borrower or any of its Subsidiaries is engaging in any development as
provided in Section 8.9 or has entered into any agreement to acquire properties
under purchase agreements, maintain available sources of capital equal to the
total cost to acquire and complete such developments and to purchase such
properties, which sources of capital shall be acceptable to the Agent in its
reasonable discretion. Amounts available to be disbursed for such purposes
pursuant to this Agreement may be considered as a source of capital for the
purposes of this Section 8.10. The Non-recourse Indebtedness described in
Section 8.1(f) shall be considered a source of such capital.
Section 8.11. RESTRICTION ON PREPAYMENT OF INDEBTEDNESS. The Borrower
shall not prepay the principal amount, in whole or in part, of any Indebtedness
other than the Obligations after the occurrence of any Event of Default;
provided, however, that this Section 8.11 shall not prohibit the prepayment of
Indebtedness which is financed solely from the proceeds of a new loan which
would otherwise be permitted by the terms of Section 8.1.
SECTION 9. FINANCIAL COVENANTS OF THE BORROWER.
The Borrower covenants and agrees that, so long as any Loan or Note or
Letter of Credit is outstanding or any of the Banks has any obligation to make
any Loans or the Agent has any obligation to issue any Letters of Credit it will
comply with the following:
Section 9.1. LIABILITIES TO TANGIBLE NET WORTH RATIO. The Borrower will
not, at the end of any fiscal quarter, permit the ratio of Consolidated Total
Liabilities to Consolidated Tangible Net
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Worth of the Borrower to exceed 0.75 to 1.
Section 9.2. DEBT COVERAGE. The Borrower will not, at the end of any
fiscal quarter, permit the Funds from Operations plus expensed interest for such
fiscal quarter and the preceding three fiscal quarters (the "Test Period") to be
less than 2.5 times the Debt Service for the Test Period. For purposes of
testing compliance with this covenant only, if Debt Service includes capitalized
interest incurred as the result of Borrower or its Subsidiary engaging in a
development activity permitted by Section 8.9, Funds from Operations for each
fiscal quarter in which interest is so capitalized as a result of such
development shall include the Pro Forma Development Net Operating Income for
such development. For any fiscal quarter, the Pro Forma Development Net
Operating Income shall be the amount obtained by multiplying (x) the quarterly
Net Operating Income which the Borrower and the Agent mutually agree will be
derived immediately following the completion of such development project and the
delivery of leased premises to tenants with signed leases on the basis of such
signed leases in effect as of the date of such calculation (any cancellation or
termination options contained in such leases must be acceptable to the Agent in
the exercise of its reasonable discretion), by (y) the quotient obtained by
dividing (i) the amount of Loans advanced under this Agreement in connection
with the construction of such development project during the fiscal quarter in
question, by (ii) the total project costs incurred for such development project
as of the end of the fiscal quarter in question. The Borrower shall provide the
Agent with copies of such leases, information regarding project costs and such
other information, data and reports as the Agent shall require in order to test
compliance with this covenant.
Section 9.3. FIXED CHARGE COVERAGE. The Borrower will not, at the end of
any fiscal quarter, permit the Cash Available for Distribution plus expensed
interest for any Test Period to be less than 1.75 times the Debt Service for
such Test Period.
Section 9.4. BORROWING BASE. The Borrower will not, at the end of any
fiscal quarter, permit the Outstanding principal balance of the Loans and
Outstanding Letters of Credit (including Letters of Credit accepted but unpaid)
as of the date of determination to be greater than the Borrowing Base as
determined as of the same date.
Section 9.5. TANGIBLE NET WORTH. The Borrower will not, at the end of any
fiscal quarter, permit its Consolidated Tangible Net Worth to be less than
$244,646,000.00 plus the amount of any net proceeds received from any Equity
Offering subsequent to the Closing Date.
Section 9.6. REAL ESTATE ASSETS.
(a) The Borrower shall not, for any fiscal quarter, permit the Asset
Value of its direct or indirect interests in joint ventures or partnerships
(other than DownREITs) to exceed fifteen percent (15%) of the value of the
Consolidated Total Assets of the Borrower, adjusted pursuant to Section 9.7.
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(b) The Borrower shall not, for any fiscal quarter, permit its direct
or indirect interests in non-income producing land assets to exceed eight
percent (8%) of the value of the Consolidated Total Assets of the Borrower,
adjusted pursuant to Section 9.7; provided that such non-income producing land
assets shall be zoned for industrial development and all infrastructure
(including roadways and utilities to the boundaries of such land assets)
necessary for the use and enjoyment of such property when developed shall be in
place prior to purchase of such assets by the Borrower or the Guarantor. The
foregoing provision will not preclude acquisition of land assets that may
require installation of internal roads or utilities.
Section 9.7. VALUE ADJUSTMENT. The Borrower and the Banks have agreed to
a one-time market value adjustment to the Asset Value of each parcel of Real
Estate as contained in SCHEDULE 4 attached hereto and by this reference
incorporated herein, and the financial covenants set forth in Section 9.1,
Section 9.4, Section 9.5 and Section 9.6 shall for the term of this Agreement be
tested against the market value of each such parcel of Real Estate, based on
such one-time market value adjustment. As so adjusted, the Asset Value of the
Initial Unencumbered Operating Properties is $197,452,161.00 and the Asset Value
of the Real Estate is $350,780,715.00. Within thirty (30) days of the Closing
Date, the Borrower shall provide the Agent with a schedule listing the book
value of each parcel of Real Estate.
Section 9.8. ANNUALIZATION OF RESULTS. In the event that the covenants
and other provisions contained in this Agreement shall require the submission of
data for four consecutive fiscal quarters and the Borrower shall not have such
data available at the time in question, the Agent shall annualize the available
data in such manner as the Agent shall determine in its sole discretion so as to
allow calculations and other tests to be performed with respect to four
consecutive fiscal quarters.
SECTION 10. CLOSING CONDITIONS.
The obligations of the Agent and the Banks to make the initial Loans and/or
the Agent to issue the initial Letters of Credit shall be subject to the
satisfaction of the following conditions precedent on or prior to September 23,
1997;
Section 10.1. LOAN DOCUMENTS. Each of the Loan Documents (including any
amendments to the Loan Documents securing the Original Credit Agreement and
First Amended Credit Agreement as required by the Agent) shall have been duly
executed and delivered by the respective parties thereto, shall be in full force
and effect and shall be in form and substance satisfactory to the Majority
Banks. The Agent shall have received a fully executed copy of each such
document, except that each Bank shall have received a fully executed counterpart
of its Note. The Agent is authorized by the Banks to execute on behalf of the
Banks and the Agent, as applicable, any amendments to the Loan Documents
securing the Original Credit Agreement.
Section 10.2. CERTIFIED COPIES OF ORGANIZATIONAL DOCUMENTS. The Agent
shall have received from the Borrower and the Guarantor, a copy, certified as of
a recent date by the appropriate
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officer of each State in which the Borrower and the Guarantor is organized and
an Authorized Officer of the Borrower and the Guarantor, as applicable, to be
true and complete, of the articles or certificate of incorporation of the
Borrower and the agreement and certificate of limited partnership of the
Guarantor or its qualification to do business, as applicable, as in effect on
such date of certification (or a certification satisfactory to the Agent that
there have been no changes to the foregoing since the date they were provided to
the Agent in connection with the execution of the First Amended Credit
Agreement).
Section 10.3. BYLAWS; RESOLUTIONS AND CONSENTS. All action on the part of
the Borrower and the Guarantor necessary for the valid execution, delivery and
performance by the Borrower and the Guarantor of this Agreement and the other
Loan Documents to which it is or is to become a party shall have been duly and
effectively taken, and evidence thereof satisfactory to the Agent shall have
been provided to the Agent. The Agent shall have received from the Borrower
true copies of its bylaws and the resolutions adopted by its board of directors
authorizing the transactions described herein, and from the Guarantor all
necessary partner consents authorizing the transactions described herein, each
certified by an Authorized Officer of the Borrower and the Guarantor, as
applicable, as of a recent date to be true and complete (or a certification
satisfactory to the Agent that there have been no changes to the foregoing since
the date they were provided to the Agent in connection with the execution of the
First Amended Credit Agreement).
Section 10.4. INCUMBENCY CERTIFICATE; AUTHORIZED SIGNERS. The Agent shall
have received from the Borrower and the Guarantor an incumbency certificate,
dated as of the Closing Date, signed by an Authorized Officer of the Borrower
and the Guarantor, as applicable, and giving the name and bearing a specimen
signature of each individual who shall be authorized: (a) to sign, in the name
and on behalf of the Borrower and the Guarantor, each of the Loan Documents to
which the Borrower and the Guarantor is or is to become a party; (b) to make
Loan and Conversion Requests; and (c) to give notices and to take other action
on behalf of the Borrower and the Guarantor under the Loan Documents.
Section 10.5. OPINION OF COUNSEL. The Agent shall have received a
favorable opinion addressed to the Banks and the Agent and dated as of the
Closing Date, in form and substance satisfactory to the Agent, from each of
Xxxxxxx, Procter & Xxxx, Xxxxxxx Xxxxxx & Diamond and Xxxxxxx, Xxxxx Xxxxxxx &
Xxxxxxxxx, counsel of the Borrower and the Guarantor, as to such matters as the
Agent shall reasonably request.
Section 10.6. PAYMENT OF FEES. The Borrower shall have paid to the Agent
the fees required to be paid as of the Closing Date pursuant to Section 4.2.
Section 10.7. PERFORMANCE; NO DEFAULT. The Borrower shall have performed
and complied with all terms and conditions herein required to be performed or
complied with by it on or prior to the Closing Date, and on the Closing Date
there shall exist no Default or Event of Default.
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Section 10.8. REPRESENTATIONS AND WARRANTIES. The representations and
warranties made by the Borrower and the Guarantor in the Loan Documents or
otherwise made by or on behalf of the Borrower, the Guarantor or any
Subsidiaries of the Borrower in connection therewith or after the date thereof
shall have been true and correct in all material respects when made and shall
also be true and correct in all material respects on the Closing Date.
Section 10.9. PROCEEDINGS AND DOCUMENTS. All proceedings in connection
with the transactions contemplated by this Agreement and the other Loan
Documents shall be reasonably satisfactory to the Agent and the Agent's Special
Counsel in form and substance, and the Agent shall have received all information
and such counterpart originals or certified copies of such documents and such
other certificates, opinions or documents as the Agent and the Agent's Special
Counsel may reasonably require.
Section 10.10. COMPLIANCE CERTIFICATE. A Compliance Certificate dated as
of the date of the Closing Date demonstrating compliance with each of the
covenants calculated therein as of the most recent fiscal quarter end for which
the Borrower and the Guarantor have provided financial statements under Section
6.4, adjusted in the best good faith estimate of the Borrower and the Guarantor
and dated as of the date of the Closing Date shall have been delivered to the
Agent.
Section 10.11. OTHER. The Agent shall have reviewed such other documents,
instruments, certificates, opinions, assurances, consents and approvals as the
Agent or the Agent's Special Counsel may reasonably have requested.
Section 10.12. INTENTIONALLY OMITTED.
Section 10.13. INTENTIONALLY OMITTED.
Section 10.14. INTENTIONALLY OMITTED.
Section 10.15. TANGIBLE NET WORTH. The Borrower shall have a Consolidated
Tangible Net Worth, adjusted for market values pursuant to Section 9.7, of not
less than $244,646,000.00.
Section 10.16. DUE DILIGENCE. The Banks shall have completed and found
satisfactory their due diligence regarding the Unencumbered Operating
Properties.
Section 10.17. MANAGEMENT OF THE BORROWER. There shall be no material
change in the management of the Borrower.
SECTION 11. CONDITIONS TO ALL BORROWINGS.
The obligations of the Banks to make any Loan or of the Agent to issue any
Letter of Credit, whether on or after the Closing Date, shall also be subject to
the satisfaction of the following conditions precedent:
64
Section 11.1. PRIOR CONDITIONS SATISFIED. All conditions set forth in
Section 10 shall continue to be satisfied as of the date upon which any Loan is
to be made.
Section 11.2. REPRESENTATIONS TRUE; NO DEFAULT. Each of the
representations and warranties of the Borrower and the Guarantor contained in
this Agreement, the other Loan Documents or in any document or instrument
delivered pursuant to or in connection with this Agreement shall be true in all
material respects as of the date as of which they were made and shall also be
true in all material respects at and as of the time of the making of such Loan,
with the same effect as if made at and as of that time (except to the extent of
changes resulting from transactions contemplated or permitted by this Agreement
and the other Loan Documents and changes occurring in the ordinary course of
business that singly or in the aggregate are not materially adverse, and except
to the extent that such representations and warranties relate expressly to an
earlier date) and no Default or Event of Default shall have occurred and be
continuing. Each of the Banks shall have received a certificate of the Borrower
signed by an Authorized Officer of the Borrower to such effect.
Section 11.3. NO LEGAL IMPEDIMENT. No change shall have occurred in any
law or regulations thereunder or interpretations thereof that in the reasonable
opinion of any Bank would make it illegal for such Bank to make such Loan.
Section 11.4. GOVERNMENTAL REGULATION. Each Bank shall have received such
statements in substance and form reasonably satisfactory to such Bank as such
Bank shall require for the purpose of compliance with any applicable regulations
of the Comptroller of the Currency or the Board of Governors of the Federal
Reserve System.
Section 11.5. PROCEEDINGS AND DOCUMENTS. All proceedings in connection
with the Loan shall be satisfactory in substance and in form to the Majority
Banks, and the Majority Banks shall have received all information and such
counterpart originals or certified or other copies of such documents as the
Majority Banks may reasonably request.
Section 11.6. BORROWING DOCUMENTS. In the case of any request for a Loan,
the Agent shall have received a copy of the request for a Loan required by
Section 2.6 in the form of EXHIBIT B hereto, fully completed.
SECTION 12. EVENTS OF DEFAULT; ACCELERATION; ETC.
Section 12.1. EVENTS OF DEFAULT AND ACCELERATION. If any of the following
events ("Events of Default" or, if the giving of notice or the lapse of time or
both is required, then, prior to such notice or lapse of time, "Defaults") shall
occur:
(a) the Borrower shall fail to pay any principal of the Loans when
the same shall become due and payable, whether at the stated date of maturity or
any accelerated date of
65
maturity or at any other date fixed for payment;
(b) the Borrower shall fail to pay any interest on the Loans or any
other sums due hereunder or under any of the other Loan Documents, when the same
shall become due and payable, whether at the stated date of maturity or any
accelerated date of maturity or at any other date fixed for payment;
(c) the Borrower shall fail to comply with any covenant contained in
Section 7.15 or Section 7.16;
(d) the Borrower shall fail to comply with any covenant contained in
Article 9, and such failure shall continue for 45 days after written notice
thereof shall have been given to the Borrower by the Agent;
(e) the Borrower or any of its Subsidiaries or the Guarantor shall
fail to perform any other term, covenant or agreement contained herein or in any
of the other Loan Documents (other than those specified above in this Section
12);
(f) any representation or warranty of the Borrower or any of its
Subsidiaries or the Guarantor in this Agreement or any other Loan Document, or
in any report, certificate, financial statement, request for a Loan, or in any
other document or instrument delivered pursuant to or in connection with this
Agreement, any advance of a Loan or any of the other Loan Documents shall prove
to have been false in any material respect upon the date when made or deemed to
have been made or repeated;
(g) the Borrower or any of its Subsidiaries or the Guarantor shall
fail to pay at maturity, or within any applicable period of grace, any
obligation for borrowed money or credit received or other Indebtedness,
including, without limitation, the Prudential Loan, or fail to observe or
perform any material term, covenant or agreement contained in any agreement by
which it is bound, evidencing or securing any such borrowed money or credit
received or other Indebtedness for such period of time as would permit (assuming
the giving of appropriate notice if required) the holder or holders thereof or
of any obligations issued thereunder to accelerate the maturity thereof;
(h) the Borrower or any of its Subsidiaries or the Guarantor, (A)
shall make an assignment for the benefit of creditors, or admit in writing its
general inability to pay or generally fail to pay its debts as they mature or
become due, or shall petition or apply for the appointment of a trustee or other
custodian, liquidator or receiver of the Borrower or any of its Subsidiaries or
the Guarantor or of any substantial part of the assets of any thereof, (B) shall
commence any case or other proceeding relating to the Borrower or any of its
Subsidiaries or the Guarantor under any bankruptcy, reorganization, arrangement,
insolvency, readjustment of debt, dissolution or liquidation or similar law of
any jurisdiction, now or hereafter in effect, or (C) shall take any action to
authorize or in furtherance of any of the foregoing;
66
(i) a petition or application shall be filed for the appointment of a
trustee or other custodian, liquidator or receiver of the Borrower or any of its
Subsidiaries or the Guarantor or any substantial part of the assets of any
thereof, or a case or other proceeding shall be commenced against the Borrower
or any of its Subsidiaries or the Guarantor under any bankruptcy,
reorganization, arrangement, insolvency, readjustment of debt, dissolution or
liquidation or similar law of any jurisdiction, now or hereafter in effect, and
the Borrower or any of its Subsidiaries or the Guarantor shall indicate its
approval thereof, consent thereto or acquiescence therein or such petition,
application, case or proceeding shall not have been dismissed within 60 days
following the filing or commencement thereof;
(j) a decree or order is entered appointing any such trustee,
custodian, liquidator or receiver or adjudicating the Borrower or any of its
Subsidiaries or the Guarantor bankrupt or insolvent, or approving a petition in
any such case or other proceeding, or a decree or order for relief is entered in
respect of the Borrower or any of its Subsidiaries or the Guarantor, in each
case of the foregoing in an involuntary case under federal bankruptcy laws as
now or hereafter constituted;
(k) there shall remain in force, undischarged, unsatisfied and
unstayed, for more than 60 days, whether or not consecutive, any uninsured final
judgment against the Borrower or any of its Subsidiaries or the Guarantor that,
with other outstanding uninsured final judgments, undischarged, against the
Borrower or any of its Subsidiaries or the Guarantor exceeds in the aggregate
$5,000,000.00;
(l) if any of the Loan Documents shall be canceled, terminated,
revoked or rescinded otherwise than in accordance with the terms thereof or with
the express prior written agreement, consent or approval of the Banks, or any
action at law, suit in equity or other legal proceeding to cancel, revoke or
rescind any of the Loan Documents shall be commenced by or on behalf of the
Borrower or the Guarantor or any of its holders of Voting Interests, or any
court or any other governmental or regulatory authority or agency of competent
jurisdiction shall make a determination that, or issue a judgment, order, decree
or ruling to the effect that, any one or more of the Loan Documents is illegal,
invalid or unenforceable in accordance with the terms thereof in any material
respect as determined by the Majority Banks;
(m) any dissolution, termination, partial or complete liquidation,
merger or consolidation of the Borrower or the Guarantor, or any sale, transfer
or other disposition of the assets of the Borrower or the Guarantor, other than
as permitted under the terms of this Agreement or the other Loan Documents;
(n) any suit or proceeding shall be filed against the Borrower or the
Guarantor or any of their respective assets which in the good faith business
judgment of the Majority Banks after giving consideration to the likelihood of
success of such suit or proceeding and the availability of insurance to cover
any judgment with respect thereto and based on the information
67
available to them, if adversely determined, would have a materially adverse
affect on the ability of the Borrower or the Guarantor to perform each and every
one of its obligations under and by virtue of the Loan Documents;
(o) the Borrower or the Guarantor, shall be indicted for a federal
crime, a punishment for which could include the forfeiture of any assets of the
Borrower or the Guarantor;
(p) Xxxxx X. Xxxxxxxx shall cease to be the Chairman of the Board and
Xxxxxx Xxxxxx shall cease to be the President of the Borrower, and a competent
and experienced successor for such Person shall not be approved by the Majority
Banks within three (3) months of such event;
(q) the Borrower shall no longer own directly or indirectly one
hundred percent (100%) of the Voting Interests of the Guarantor;
(r) the Guarantor denies that the Guarantor has any liability or
obligation under the Guaranty, or shall notify the Agent or any of the Banks of
the Guarantor's intention to attempt to cancel or terminate the Guaranty, or
shall fail to observe or comply with any term, covenant, condition or agreement
under the Guaranty; or
(s) the Borrower shall make any payment with respect to the
Debentures, including principal thereto or interest or premium thereon, except
as specifically approved by the Banks as provided herein or any subordination
and standstill agreement executed pursuant hereto or there shall be a default by
Ameritech pursuant to any subordination and standstill agreement executed
pursuant hereto;
then, and in any such event, the Agent may, and upon the request of the Majority
Banks shall, by notice in writing to the Borrower declare all amounts owing with
respect to this Agreement, the Notes and the other Loan Documents to be, and
they shall thereupon forthwith become, immediately due and payable without
presentment, demand, protest or other notice of any kind, all of which are
hereby expressly waived by the Borrower; PROVIDED that in the event of any Event
of Default specified in Section 12.1(h), Section 12.1(i) or Section 12.1(j), all
such amounts shall become immediately due and payable automatically and without
any requirement of notice from any of the Banks or the Agent. The Borrower and
any other Person shall be entitled to conclusively rely on a statement from the
Agent that it has the authority to act for and bind the Banks pursuant to this
Agreement and the other Loan Documents.
Section 12.2. LIMITATION OF CURE PERIODS. Notwithstanding anything
contained in Section 12.1 to the contrary, (i) no Event of Default shall exist
hereunder upon the occurrence of any failure described in Section 12.1(a) or
Section 12.1(b) in the event that the Borrower cures such default within five
(5) days following receipt of written notice of such default, provided that no
such cure period shall apply to any payments due upon the maturity of the Notes;
(ii) no Event of Default shall exist hereunder upon the occurrence of any
failure described in Section 12.1(c) as it pertains to Section 7.15 only in
68
the event that the Borrower cures such default within sixty (60) days following
receipt of written notice of such default; and (iii) no Event of Default shall
exist hereunder upon the occurrence of any failure described in Section 12.1(e)
in the event that the Borrower cures such default within forty-five (45) days
following receipt of written notice of such default, provided that the
provisions of this clause (iii) shall not pertain to any default consisting of a
failure to comply with Section 7.4(e), or to any default excluded from any
provision of cure of defaults contained in any other of the Loan Documents.
Section 12.3. TERMINATION OF COMMITMENTS. If any one or more Events of
Default specified in Section 12.1(h), Section 12.1(i), Section 12.1(j), Section
12.1(l) or Section 12.1(r) shall occur, then immediately and without any action
on the part of the Agent or any Bank any unused portion of the credit hereunder
shall terminate and the Banks shall be relieved of all obligations to make Loans
or provide Letters of Credit to the Borrower. If any other Event of Default
shall have occurred and be continuing, the Agent, upon the election of the
Majority Banks, may by notice to the Borrower terminate the obligation to make
Loans or provide Letters of Credit to the Borrower. No termination under this
Section 12.2 shall relieve the Borrower of its obligations to the Banks arising
under this Agreement or the other Loan Documents.
Section 12.4. REMEDIES. In case any one or more of the Events of Default
shall have occurred and be continuing, and whether or not the Banks shall have
accelerated the maturity of the Loans pursuant to Section 12.1, the Agent on
behalf of the Banks, may, with the consent of the Majority Banks but not
otherwise, proceed to protect and enforce their rights and remedies under this
Agreement, the Notes or any of the other Loan Documents by suit in equity,
action at law or other appropriate proceeding, whether for the specific
performance of any covenant or agreement contained in this Agreement and the
other Loan Documents or any instrument pursuant to which the Obligations are
evidenced, including to the full extent permitted by applicable law the
obtaining of the EX PARTE appointment of a receiver, and, if such amount shall
have become due, by declaration or otherwise, proceed to enforce the payment
thereof or any other legal or equitable right. No remedy herein conferred upon
the Agent or the holder of any Note is intended to be exclusive of any other
remedy and each and every remedy shall be cumulative and shall be in addition to
every other remedy given hereunder or now or hereafter existing at law or in
equity or by statute or any other provision of law. In the event that all or
any portion of the Obligations is collected by or through an attorney-at-law,
the Borrower shall pay all costs of collection including, but not limited to,
reasonable attorney's fees not to exceed fifteen percent (15%) of such portion
of the Obligations. Notwithstanding anything herein to the contrary, upon the
occurrence of any Event of Default, an amount equal to the aggregate amount of
the Outstanding Letters of Credit (including Letters of Credit accepted but
unpaid) shall, at the Majority Banks' option, without demand upon or further
notice to the Borrower, be deemed to have been paid or disbursed by the Agent
under the Letter of Credit and a Loan to the Borrower from the Banks in such
amount to have been made and accepted, which Loan shall be immediately due and
payable.
Section 12.5. DISTRIBUTION OF PROCEEDS. In the event that, following the
occurrence or during the
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continuance of any Event of Default, any monies are received in connection with
the enforcement of any of the Loan Documents, or otherwise with respect to the
realization upon any of the assets of the Borrower, such monies shall be
distributed for application as follows:
(a) First, to the payment of, or (as the case may be) the
reimbursement of, the Agent for or in respect of all reasonable costs, expenses,
disbursements and losses which shall have been incurred or sustained by the
Agent in connection with the collection of such monies by the Agent, for the
exercise, protection or enforcement by the Agent of all or any of the rights,
remedies, powers and privileges of the Agent under this Agreement or any of the
other Loan Documents or in support of any provision of adequate indemnity to the
Agent against any taxes or liens which by law shall have, or may have, priority
over the rights of the Agent to such monies;
(b) Second, to all other Obligations in such order or preference as
the Majority Banks shall determine; PROVIDED, HOWEVER, that (i) distributions in
respect of such other Obligations shall be made PARI PASSU among Obligations
with respect to the Agent's fee payable pursuant to Section 4.3 and all other
Obligations; (ii) in the event that any Bank shall have wrongfully failed or
refused to make an advance under Section 2.7 and such failure or refusal shall
be continuing, advances made by other Banks during the pendency of such failure
or refusal shall be entitled to be repaid as to principal and accrued interest
in priority to the other Obligations described in this subsection (b), and
(iii) Obligations owing to the Banks with respect to each type of Obligation
such as interest, principal, fees and expenses, shall be made among the Banks
PRO RATA; and PROVIDED, further that the Majority Banks may in their discretion
make proper allowance to take into account any Obligations not then due and
payable; and
(c) Third, the excess, if any, shall be returned to the Borrower or
to such other Persons as are entitled thereto.
SECTION 13. INTENTIONALLY OMITTED.
SECTION 14. THE AGENT.
Section 14.1. AUTHORIZATION. The Agent is authorized to take such action
on behalf of each of the Banks and to exercise all such powers as are hereunder
and under any of the other Loan Documents and any related documents delegated to
the Agent, together with such powers as are reasonably incident thereto,
PROVIDED that no duties or responsibilities not expressly assumed herein or
therein shall be implied to have been assumed by the Agent. The obligations of
the Agent hereunder are primarily administrative in nature, and nothing
contained in this Agreement or any of the other Loan Documents shall be
construed to constitute the Agent as a trustee for any Bank or to create a
fiduciary relationship. Unless they have been expressly notified in writing by
all of the Banks to the contrary, the Borrower and any other Person shall be
entitled to conclusively rely on a statement from the Agent that it has the
authority to act for and bind the Banks pursuant to this Agreement and the other
Loan Documents.
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Section 14.2. EMPLOYEES AND AGENTS. The Agent may exercise its powers and
execute its duties by or through employees or agents and shall be entitled to
take, and to rely on, advice of counsel concerning all matters pertaining to its
rights and duties under this Agreement and the other Loan Documents. The Agent
may utilize the services of such Persons as the Agent may reasonably determine,
and all reasonable fees and expenses of any such Persons shall be paid by the
Borrower.
Section 14.3. NO LIABILITY. Neither the Agent nor any of its
shareholders, directors, officers or employees nor any other Person assisting
them in their duties nor any agent, or employee thereof, shall be liable for any
waiver, consent or approval given or any action taken, or omitted to be taken,
in good faith by it or them hereunder or under any of the other Loan Documents,
or in connection herewith or therewith, or be responsible for the consequences
of any oversight or error of judgment whatsoever, except that the Agent or such
other Person, as the case may be, may be liable for losses due to its willful
misconduct or gross negligence.
Section 14.4. NO REPRESENTATIONS. The Agent shall not be responsible for
the execution or validity or enforceability of this Agreement, the Notes, any of
the other Loan Documents or any instrument at any time constituting, or intended
to constitute, collateral security for the Notes, or for the value of any such
collateral security or for the validity, enforceability or collectability of any
such amounts owing with respect to the Notes, or for any recitals or statements,
warranties or representations made herein or in any of the other Loan Documents
or in any certificate or instrument hereafter furnished to it by or on behalf of
the Borrower or any of its Subsidiaries or the Guarantor, or be bound to
ascertain or inquire as to the performance or observance of any of the terms,
conditions, covenants or agreements herein or in any other of the Loan
Documents. The Agent shall not be bound to ascertain whether any notice,
consent, waiver or request delivered to it by the Borrower or the Guaranty or
any holder of any of the Notes shall have been duly authorized or is true,
accurate and complete. The Agent has not made nor does it now make any
representations or warranties, express or implied, nor does it assume any
liability to the Banks, with respect to the creditworthiness or financial
condition of the Borrower or any of its Subsidiaries or the Guarantor. Each
Bank acknowledges that it has, independently and without reliance upon the Agent
or any other Bank, and based upon such information and documents as it has
deemed appropriate, made its own credit analysis and decision to enter into this
Agreement. Each Bank also acknowledges that it will, independently and without
reliance upon the Agent or any other Bank, based upon such information and
documents as it deems appropriate at the time, continue to make its own credit
analysis and decisions in taking or not taking action under this Agreement and
the other Loan Documents.
Section 14.5. PAYMENTS.
(a) A payment by the Borrower or the Guarantor to the Agent hereunder
or under any of the other Loan Documents for the account of any Bank shall
constitute a payment to such Bank. The Agent agrees to exercise reasonable
efforts to distribute to each Bank on the
71
same day as (but in no event later than one Business Day after) the Agent's
receipt of good funds, determined in accordance with the Agent's customary
practices, such Bank's PRO RATA share of payments received by the Agent for the
account of the Banks except as otherwise expressly provided herein or in any of
the other Loan Documents. In the event that the Agent fails to distribute such
amounts within one Business Day as provided above, the Agent shall pay interest
on such amount at a rate per annum equal to the Federal Funds Effective Rate
from time to time in effect.
(b) If in the opinion of the Agent the distribution of any amount
received by it in such capacity hereunder, under the Notes or under any of the
other Loan Documents might involve it in liability, it may refrain from making
distribution until its right to make distribution shall have been adjudicated by
a court of competent jurisdiction. If a court of competent jurisdiction shall
adjudge that any amount received and distributed by the Agent is to be repaid,
each Person to whom any such distribution shall have been made shall either
repay to the Agent its proportionate share of the amount so adjudged to be
repaid or shall pay over the same in such manner and to such Persons as shall be
determined by such court.
(c) Notwithstanding anything to the contrary contained in this
Agreement or any of the other Loan Documents, any Bank that fails (i) to make
available to the Agent its PRO RATA share of any Loan or (ii) to comply with the
provisions of Section 13 with respect to making dispositions and arrangements
with the other Banks, where such Bank's share of any payment received, whether
by setoff or otherwise, is in excess of its PRO RATA share of such payments due
and payable to all of the Banks, in each case as, when and to the full extent
required by the provisions of this Agreement, shall be deemed delinquent (a
"Delinquent Bank") and shall be deemed a Delinquent Bank until such time as such
delinquency is satisfied. A Delinquent Bank shall be deemed to have assigned
any and all payments due to it from the Borrower and the Guarantor, whether on
account of outstanding Loans, interest, fees or otherwise, to the remaining
nondelinquent Banks for application to, and reduction of, their respective PRO
RATA shares of all Outstanding Loans. The Delinquent Bank hereby authorizes the
Agent to distribute such payments to the nondelinquent Banks in proportion to
their respective PRO RATA shares of all Outstanding Loans. A Delinquent Bank
shall be deemed to have satisfied in full a delinquency when and if, as a result
of application of the assigned payments to all Outstanding Loans of the
nondelinquent Banks or as a result of other payments by the Delinquent Banks to
the nondelinquent Banks, the Banks' respective PRO RATA shares of all
Outstanding Loans have returned to those in effect immediately prior to such
delinquency and without giving effect to the nonpayment causing such
delinquency.
Section 14.6. HOLDERS OF NOTES. Subject to the terms of Article 18, the
Agent may deem and treat the payee of any Note as the absolute owner or
purchaser thereof for all purposes hereof until it shall have been furnished in
writing with a different name by such payee or by a subsequent holder, assignee
or transferee.
Section 14.7. INDEMNITY. The Banks ratably agree hereby to indemnify and
hold harmless the
72
Agent from and against any and all claims, actions and suits (whether groundless
or otherwise), losses, damages, costs, expenses (including any reasonable
expenses for which the Agent has not been reimbursed by the Borrower as required
by Section 15), and liabilities of every nature and character arising out of or
related to this Agreement, the Notes, or any of the other Loan Documents or the
transactions contemplated or evidenced hereby or thereby, or the Agent's actions
taken hereunder or thereunder, except to the extent that any of the same shall
be directly caused by the Agent's willful misconduct or gross negligence.
Section 14.8. AGENT AS BANK. In its individual capacity, BankBoston shall
have the same obligations and the same rights, powers and privileges in respect
to its Commitment and the Loans made by it, and as the holder of any of the
Notes as it would have were it not also the Agent.
Section 14.9. RESIGNATION. Subject to the terms of Section 18.1, the
Agent may resign at any time by giving 60 days' prior written notice thereof to
the Banks and the Borrower. Upon any such resignation, the Documentation Agent
or Syndication Agent (as selected by vote of the Majority Banks) shall be
appointed as a successor Agent provided that such entity is still a Bank, its
senior debt obligations are rated not less than "A" or its equivalent by Xxxxx'x
Investors Service, Inc. or not less than "A" or its equivalent by Standard &
Poor's Corporation and it has total assets in excess of $10,000,000,000.00. If
such successor agent selected by vote of the Majority Banks fails to satisfy
such conditions or declines to serve as Agent, the Majority Banks shall have the
right to appoint as a successor Agent the Documentation Agent (if the
Syndication Agent was initially selected) or Syndication Agent (if the
Documentation Agent was initially selected) or any Bank or any other banks
satisfying the conditions contained in the immediately preceding sentence if
there is no other such candidate. Unless a Default or Event of Default shall
have occurred and be continuing, such successor Agent (including the
Documentation Agent and the Syndication Agent) shall be reasonably acceptable to
the Borrower. If no successor Agent shall have been so appointed by the
Majority Banks and shall have accepted such appointment within 30 days after the
retiring Agent's giving of notice of resignation, then the retiring Agent may,
on behalf of the Banks, appoint a successor Agent, which shall be a bank whose
debt obligations are rated not less than "A" or its equivalent by Xxxxx'x
Investors Service, Inc. or not less than "A" or its equivalent by Standard &
Poor's Corporation and which has total assets in excess of $10,000,000,000.00.
Upon the acceptance of any appointment as Agent hereunder by a successor Agent,
such successor Agent shall thereupon succeed to and become vested with all the
rights, powers, privileges and duties of the retiring Agent, and the retiring
Agent shall be discharged from its duties and obligations hereunder as Agent.
After any retiring Agent's resignation, the provisions of this Agreement and the
other Loan Documents shall continue in effect for its benefit in respect of any
actions taken or omitted to be taken by it while it was acting as Agent.
Section 14.10. DUTIES IN THE CASE OF ENFORCEMENT. In case one or more
Events of Default have occurred and shall be continuing, and whether or not
acceleration of the Obligations shall have occurred, the Agent shall, if (a) so
requested by the Majority Banks and (b) the Banks have
73
provided to the Agent such additional indemnities and assurances against
expenses and liabilities as the Agent may reasonably request, proceed to
exercise all or any legal and equitable and other rights or remedies as it may
have. The Majority Banks may direct the Agent in writing as to the method and
the extent of any such exercise, the Banks hereby agreeing to indemnify and hold
the Agent harmless from all liabilities incurred in respect of all actions taken
or omitted in accordance with such directions, PROVIDED that the Agent need not
comply with any such direction to the extent that the Agent reasonably believes
the Agent's compliance with such direction to be unlawful or commercially
unreasonable in any applicable jurisdiction.
Section 14.11. DETERMINATIONS BY AGENT. Any and all determinations to be
made by the Agent pursuant to the provisions of this Agreement shall be
conclusive and binding absent manifest error and so long as the same shall be
determined in good faith by the Agent. Where no procedures for such
determinations are specified, such determinations shall be made in such manner
as Agent shall determine in its sole discretion, subject to the provisions of
this Section 14.11.
SECTION 15. EXPENSES.
The Borrower agrees to pay (a) the reasonable costs of producing and
reproducing this Agreement, the other Loan Documents and the other agreements
and instruments mentioned herein, (b) any taxes (including any interest and
penalties in respect thereto) payable by the Agent or any of the Banks (other
than taxes based upon the Agent's or any Bank's gross or net income), including
any recording, mortgage, documentary or intangibles taxes in connection with the
Loan Documents, or other taxes payable on or with respect to the transactions
contemplated by this Agreement, including any such taxes payable by the Agent or
any of the Banks after the Closing Date under the Original Credit Agreement (the
Borrower hereby agreeing to indemnify the Agent and each Bank with respect
thereto), (c) all reasonable internal charges of the Agent (determined in good
faith and in accordance with the Agent's internal policies applicable generally
to its customers) for commercial finance exams and engineering and environmental
reviews and the reasonable fees, expenses and disbursements of the counsel to
the Agent, counsel for the Banks and any local counsel to the Agent incurred in
connection with the preparation, administration or interpretation of the Loan
Documents and other instruments mentioned herein (excluding, however, the
preparation of agreements evidencing participations granted under Section 18.4),
each closing hereunder, and amendments, modifications, approvals, consents or
waivers hereto or hereunder, (d) the reasonable fees, expenses and disbursements
of the Agent incurred by the Agent in connection with the preparation,
administration or interpretation of the Loan Documents and other instruments
mentioned herein, and the making of each advance hereunder, (e) all reasonable
out-of-pocket expenses (including reasonable attorneys' fees and costs, which
attorneys may be employees of any Bank or the Agent and the fees and costs of
appraisers, engineers, investment bankers or other experts retained by any Bank
or the Agent) incurred by any Bank or the Agent in connection with (i) the
enforcement of or preservation of rights under any of the Loan Documents against
the Borrower or the Guarantor or the administration thereof after the occurrence
of a Default or Event of Default and (ii) any litigation, proceeding or dispute
whether arising hereunder or otherwise, in any way related to the Agent's or any
of the Bank's
74
relationship with the Borrower or the Guarantor, and (f) all reasonable fees,
expenses and disbursements of any Bank or the Agent incurred in connection with
UCC searches, UCC filings, title rundowns or title searches. The covenants of
this Section 15 shall survive payment or satisfaction of payment of amounts
owing with respect to the Notes. Notwithstanding the foregoing, each of the
Banks (excluding the Agent) shall only be entitled to recover up to $5,000.00
each for the fees, expenses and disbursements of their counsel incurred on or
before the Closing Date.
SECTION 16. INDEMNIFICATION.
The Borrower agrees to indemnify and hold harmless the Agent and the Banks
and each director, officer, employee, agent, attorney and any Person who
controls the Agent or any Bank from and against any and all claims, actions and
suits, whether groundless or otherwise, and from and against any and all
liabilities, losses, damages and expenses of every nature and character arising
out of or relating to this Agreement or any of the other Loan Documents or the
transactions contemplated hereby and thereby including, without limitation, (a)
any leasing fees and any brokerage, finders or similar fees asserted against any
Person indemnified under this Section 16 based upon any agreement, arrangement
or action made or taken, or alleged to have been made or taken, by the Borrower
or any of its Subsidiaries or the Guarantor, (b) any condition of the Real
Estate, (c) any actual or proposed use by the Borrower of the proceeds of any of
the Loans or any actual or proposed use of a Letter of Credit by any beneficiary
of a Letter of Credit, (d) any actual or alleged infringement of any patent,
copyright, trademark, service xxxx or similar right of the Borrower or any of
its Subsidiaries or the Guarantor, (e) the Borrower and the Guarantor entering
into or performing this Agreement or any of the other Loan Documents, (f) any
actual or alleged violation of any law, ordinance, code, order, rule,
regulation, approval, consent, permit or license relating to the Real Estate, or
(g) with respect to the Borrower and its Subsidiaries and the Guarantor and
their respective properties and assets, the violation of any Environmental Law,
the Release or threatened Release of any Hazardous Substances or any action,
suit, proceeding or investigation brought or threatened with respect to any
Hazardous Substances (including, but not limited to claims with respect to
wrongful death, personal injury or damage to property), in each case including,
without limitation, the reasonable fees and disbursements of counsel and
allocated costs of internal counsel incurred in connection with any such
investigation, litigation or other proceeding; PROVIDED, HOWEVER, that the
Borrower shall not be obligated under this Section 16 to indemnify any Person
for liabilities arising from such Person's own gross negligence or willful
misconduct. In litigation, or the preparation therefor, the Banks and the Agent
shall be entitled to select a single law firm as their own counsel and, in
addition to the foregoing indemnity, the Borrower agrees to pay promptly the
reasonable fees and expenses of such counsel. If, and to the extent that the
obligations of the Borrower under this Section 16 are unenforceable for any
reason, the Borrower hereby agrees to make the maximum contribution to the
payment in satisfaction of such obligations which is permissible under
applicable law. The provisions of this Section 16 shall survive the repayment
of the Loans and the termination of the obligations of the Banks hereunder.
SECTION 17. SURVIVAL OF COVENANTS, ETC.
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All covenants, agreements, representations and warranties made herein, in
the Notes, in any of the other Loan Documents or in any documents or other
papers delivered by or on behalf of the Borrower or any of its Subsidiaries or
the Guarantor pursuant hereto or thereto shall be deemed to have been relied
upon by the Banks and the Agent, notwithstanding any investigation heretofore or
hereafter made by any of them, and shall survive the making by the Banks of any
of the Loans, as herein contemplated, and shall continue in full force and
effect so long as any amount due under this Agreement, the Notes, the Letters of
Credit or any of the other Loan Documents remains outstanding or any Bank has
any obligation to make any Loans or the Agent has any obligation to issue any
Letters of Credit. The indemnification obligations of the Borrower provided
herein and the other Loan Documents shall survive the full repayment of amounts
due and the termination of the obligations of the Banks hereunder and thereunder
to the extent provided herein and therein. All statements contained in any
certificate or other paper delivered to any Bank or the Agent at any time by or
on behalf of the Borrower or any of its Subsidiaries or the Guarantor pursuant
hereto or in connection with the transactions contemplated hereby shall
constitute representations and warranties by the Borrower or such Subsidiary or
the Guarantor hereunder.
SECTION 18. ASSIGNMENT AND PARTICIPATION.
Section 18.1. CONDITIONS TO ASSIGNMENT BY BANKS. Except as provided
herein, each Bank may assign to another bank or other entity all (but not less
than all) of its interests, rights and obligations under this Agreement
(including all of its Commitment Percentage and Commitment and the same portion
of the Loans at the time owing to it, and the Notes held by it); provided that
(a) the Agent shall have given its prior written consent to such assignment,
which consent shall not be unreasonably withheld (provided that such consent
shall not be required for any assignment to another Bank, to a bank which is
under common control with the assigning Bank or to a wholly-owned Subsidiary of
such Bank provided that such assignee shall remain a wholly-owned Subsidiary of
such Bank), (b) the Borrower shall have given its prior written consent to such
assignment, which consent shall not be unreasonably withheld or delayed
(provided that such consent shall not be required if a Default or Event of
Default shall have occurred and be continuing or for any assignment to another
Bank, to a bank which is under common control with the assigning Bank or to a
wholly-owned Subsidiary of such Bank provided that such assignee shall remain a
wholly-owned Subsidiary of such Bank), (c) each such assignment shall be of all
the assigning Bank's rights and obligations under this Agreement, (d) the
parties to such assignment shall execute and deliver to the Agent, for recording
in the Register (as hereinafter defined), a notice of such assignment, together
with any Notes subject to such assignment, (e) in no event shall any voting,
consent or approval rights of a Bank be assigned to any Person controlling,
controlled by or under common control with, or which is not otherwise free from
influence or control by, the Borrower or the Guarantor, which rights shall
instead be allocated PRO RATA among the other remaining Banks, (f) such assignee
shall have total assets as of the date of such assignment of not less than
$500,000,000, and (g) such assignment is subject to the terms of any
intercreditor agreement among the Banks and the Agent. Upon such
76
execution, delivery, acceptance and recording, of such notice of assignment, (i)
the assignee thereunder shall be a party hereto and all other Loan Documents
executed by the Banks and, to the extent provided in such assignment, have the
rights and obligations of a Bank hereunder, (ii) the assigning Bank shall, to
the extent provided in such assignment and upon payment to the Agent of the
registration fee referred to in Section 18.2, be released from its obligations
under this Agreement, and (iii) the Agent may unilaterally amend SCHEDULE 1 to
reflect such assignment. In connection with each assignment, the assignee shall
represent and warrant to the Agent, the assignor and each other Bank as to
whether such assignee is controlling, controlled by, under common control with
or is not otherwise free from influence or control by, the Borrower and the
Guarantor.
Section 18.2. REGISTER. The Agent shall maintain a copy of each
assignment delivered to it and a register or similar list (the "Register") for
the recordation of the names and addresses of the Banks and the Commitment
Percentages of, and principal amount of the Loans owing to the Banks from time
to time. The entries in the Register shall be conclusive, in the absence of
manifest error, and the Borrower, the Agent and the Banks may treat each Person
whose name is recorded in the Register as a Bank hereunder for all purposes of
this Agreement. The Register shall be available for inspection by the Borrower
and the Banks at any reasonable time and from time to time upon reasonable prior
notice. Upon each such recordation, the assigning Bank agrees to pay to the
Agent a registration fee in the sum of $2,000.
Section 18.3. NEW NOTES. Upon its receipt of an assignment executed by
the parties to such assignment, together with each Note subject to such
assignment, the Agent shall (a) record the information contained therein in the
Register, and (b) give prompt notice thereof to the Borrower and the Banks
(other than the assigning Bank). Within five Business Days after receipt of
such notice, the Borrower, at its own expense, shall execute and deliver to the
Agent, in exchange for each surrendered Note, a new Note to the order of such
assignee in an amount equal to the amount assumed by such assignee pursuant to
such assignment, and shall cause the Guarantor to deliver to the Agent an
acknowledgment in form and substance satisfactory to the Agent to the effect
that the Guaranty extends to and is applicable to each new Note. Such new Note
shall provide that it is a replacement for the surrendered Note, shall be in an
aggregate principal amount equal to the aggregate principal amount of the
surrendered Note, shall be dated the effective date of such assignment and shall
otherwise be in substantially the form of the assigned Note. The surrendered
Note shall be canceled and returned to the Borrower.
Section 18.4. PARTICIPATIONS. Each Bank may sell participations to one or
more banks or other entities in all or a portion of such Bank's rights and
obligations under this Agreement and the other Loan Documents; PROVIDED that (a)
any such sale or participation shall not affect the rights and duties of the
selling Bank hereunder to the Borrower, (b) such sale and participation shall
not entitle such participant to any rights or privileges under this Agreement or
the Loan Documents (including, without limitation, the right to approve waivers,
amendments or modifications), (c) such participant shall have no direct rights
against the Borrower or the Guarantor except the rights granted to the Banks
pursuant to Section 13, and (d) such participant shall not be a Person
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controlling, controlled by or under common control with, or which is not
otherwise free from influence or control by, the Borrower or the Guaranty.
Section 18.5. PLEDGE BY BANK. Any Bank may at any time pledge all or any
portion of its interest and rights under this Agreement (including all or any
portion of its Note) to any of the twelve Federal Reserve Banks organized under
Section 4 of the Federal Reserve Act, 12 U.S.C. Section 341. No such pledge or
the enforcement thereof shall release the pledgor Bank from its obligations
hereunder or under any of the other Loan Documents.
Section 18.6. NO ASSIGNMENT BY BORROWER. The Borrower shall not assign or
transfer any of its rights or obligations under any of the Loan Documents
without the prior written consent of each of the Banks.
Section 18.7. DISCLOSURE. The Borrower agrees that in addition to
disclosures made in accordance with standard banking practices any Bank may
disclose information obtained by such Bank pursuant to this Agreement to
assignees or participants and potential assignees or participants hereunder
provided the Borrower receives prior notice of such disclosures unless such
participant or assignee is one of the Banks.
SECTION 19. NOTICES.
Each notice, demand, election or request provided for or permitted to be
given pursuant to this Agreement (hereinafter in this Section 19 referred to as
"Notice"), but specifically excluding to the maximum extent permitted by law any
notices of the institution or commencement of foreclosure proceedings, must be
in writing and shall be deemed to have been properly given or served by personal
delivery or by sending same by overnight courier or by depositing same in the
United States Mail, postpaid and registered or certified, return receipt
requested, or as expressly permitted herein, by telegraph, telecopy, telefax or
telex, and addressed as follows:
If to the Agent or BankBoston:
BankBoston, N.A.
000 Xxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attn: Real Estate Division
(000) 000-0000
(000) 000-0000 (FAX)
With a copy to:
BankBoston, N.A.
000 Xxxxxxxxx Xxxxxx Xxxxx, X.X., Xxxxx 000
Xxxxxxx, Xxxxxxx 00000
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Attn: Xxx Xxxxxxx, Assistant Vice President
(000) 000-0000
(000) 000-0000 (FAX)
If to the Borrower:
Meridian Industrial Trust, Inc.
000 Xxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Attn: Xxxxxx X. Xxxxxx, President and Chief
Financial Officer
(000) 000-0000
(000) 000-0000 (FAX)
if to a Bank now a party to this Agreement, at the address set forth below the
signature of such Bank attached to this Agreement, and to each other Bank which
may hereafter become a party to this Agreement at such address as may be
designated by such Bank. Each Notice shall be effective upon being personally
delivered or upon being sent by overnight courier or upon being deposited in the
United States Mail as aforesaid or, if sent by facsimile transmission, upon
receipt of such transmission as evidenced by the confirmation notice. The time
period in which a response to such Notice must be given or any action taken with
respect thereto (if any), however, shall commence to run from the date of
receipt if personally delivered, sent by overnight courier or sent by facsimile
transmission, or if so deposited in the United States Mail, the earlier of three
(3) Business Days following such deposit or the date of receipt as disclosed on
the return receipt. Rejection or other refusal to accept or the inability to
deliver because of changed address for which no notice was given shall be deemed
to be receipt of the Notice sent. By giving at least fifteen (15) days prior
Notice thereof, the Borrower, a Bank or Agent shall have the right from time to
time and at any time during the term of this Agreement to change their
respective addresses and each shall have the right to specify as its address any
other address within the United States of America.
SECTION 20. RELATIONSHIP.
The relationship between each Bank and the Borrower is solely that of a
lender and borrower, and nothing contained herein or in any of the other Loan
Documents shall in any manner be construed as making the parties hereto
partners, joint venturers or any other relationship other than lender and
borrower.
SECTION 21. GOVERNING LAW; CONSENT TO JURISDICTION AND SERVICE.
THIS AGREEMENT AND EACH OF THE OTHER LOAN DOCUMENTS EXCEPT AS OTHERWISE
SPECIFICALLY PROVIDED THEREIN, ARE CONTRACTS UNDER THE LAWS OF THE COMMONWEALTH
OF MASSACHUSETTS AND SHALL FOR ALL PURPOSES BE CONSTRUED IN
79
ACCORDANCE WITH AND GOVERNED BY THE LAWS OF SUCH COMMONWEALTH (EXCLUDING THE
LAWS APPLICABLE TO CONFLICTS OR CHOICE OF LAW). THE BORROWER AGREES THAT ANY
SUIT FOR THE ENFORCEMENT OF THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS
MAY BE BROUGHT IN THE COURTS OF THE COMMONWEALTH OF MASSACHUSETTS OR ANY FEDERAL
COURT SITTING THEREIN AND CONSENTS TO THE NONEXCLUSIVE JURISDICTION OF SUCH
COURT AND THE SERVICE OF PROCESS IN ANY SUCH SUIT BEING MADE UPON THE BORROWER
BY MAIL AT THE ADDRESS SPECIFIED IN SECTION 19. THE BORROWER HEREBY WAIVES ANY
OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE VENUE OF ANY SUCH SUIT OR ANY
SUCH COURT OR THAT SUCH SUIT IS BROUGHT IN AN INCONVENIENT COURT.
SECTION 22. HEADINGS.
The captions in this Agreement are for convenience of reference only and
shall not define or limit the provisions hereof.
SECTION 23. COUNTERPARTS.
This Agreement and any amendment hereof may be executed in several
counterparts and by each party on a separate counterpart, each of which when so
executed and delivered shall be an original, and all of which together shall
constitute one instrument. In proving this Agreement it shall not be necessary
to produce or account for more than one such counterpart signed by the party
against whom enforcement is sought.
SECTION 24. ENTIRE AGREEMENT, ETC.
The Loan Documents and any other documents executed in connection herewith
or therewith express the entire understanding of the parties with respect to the
transactions contemplated hereby. Neither this Agreement nor any term hereof
may be changed, waived, discharged or terminated, except as provided in
Section 27.
SECTION 25. WAIVER OF JURY TRIAL.
EACH OF THE BORROWER, THE AGENT AND THE BANKS HEREBY WAIVES ITS RIGHT TO A
JURY TRIAL WITH RESPECT TO ANY ACTION OR CLAIM ARISING OUT OF ANY DISPUTE IN
CONNECTION WITH THIS AGREEMENT, ANY NOTE OR ANY OF THE OTHER LOAN DOCUMENTS, ANY
RIGHTS OR OBLIGATIONS HEREUNDER OR THEREUNDER OR THE PERFORMANCE OF SUCH RIGHTS
AND OBLIGATIONS. THE BORROWER (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR
ATTORNEY OF ANY BANK OR THE AGENT HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT
SUCH
80
BANK OR THE AGENT WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE
FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT THE AGENT AND THE BANKS HAVE BEEN
INDUCED TO ENTER INTO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS TO WHICH THEY
ARE PARTIES BY, AMONG OTHER THINGS, THE WAIVER AND CERTIFICATIONS CONTAINED IN
THIS SECTION 25.
SECTION 26. DEALINGS WITH THE BORROWER.
The Banks and their affiliates may accept deposits from, extend credit to
and generally engage in any kind of banking, trust or other business with the
Borrower, its Subsidiaries, the Guarantor or any of their affiliates regardless
of the capacity of the Bank hereunder.
SECTION 27. CONSENTS, AMENDMENTS, WAIVERS, ETC.
Except as otherwise expressly provided in this Agreement, any consent or
approval required or permitted by this Agreement may be given, and any term of
this Agreement or of any other instrument related hereto or mentioned herein may
be amended, and the performance or observance by the Borrower of any terms of
this Agreement or such other instrument or the continuance of any Default or
Event of Default may be waived (either generally or in a particular instance and
either retroactively or prospectively) with, but only with, the written consent
of the Majority Banks. Notwithstanding the foregoing, none of the following may
occur without the written consent of each Bank: (a) any change in the rate of
interest on and the term of the Notes; (b) any change in the amount of the
Commitments of the Banks; (c) any forgiveness, reduction or waiver of the
principal of any unpaid Loan or any interest thereon or fee payable under the
Loan Documents; (d) any change in the amount of any fee payable to a Bank or the
Agent hereunder; (e) any postponement of any date fixed for any payment of
principal of or interest on the Loan; (f) any extension of the Maturity Date;
(g) any change in the manner of distribution of any payments to the Banks;
(h) any release of the Borrower or the Guarantor; (i) except as permitted herein
or in that certain Intercreditor Agreement, the sale, transfer or assignment of
the Loan Documents or any interest therein; (j) any written modification to or
waiver of the definition of the term "Borrowing Base" or any defined term used
within such definition; (k) any amendment of the (i) definition of Majority
Banks, (ii) any requirement for consent by all of the Banks, (iii) the
provisions of Section 14.9 regarding the appointment of the successor Agent,
(iv) Section 27, or (v) any provision of this Agreement or the Loan Documents
which requires the approval of the Majority Banks to require a lesser number of
Banks to approve such action; and (l) approval of the terms relating to the
Debentures. The amount of the Agent's fee payable for the Agent's account and
the provisions of Section 14 may not be amended without the written consent of
the Agent. No waiver shall extend to or affect any obligation not expressly
waived or impair any right consequent thereon. No course of dealing or delay or
omission on the part of the Agent or any Bank in exercising any right shall
operate as a waiver thereof or otherwise be prejudicial thereto. No notice to
or demand upon the Borrower shall entitle the Borrower to other or further
notice or demand in similar or other circumstances.
81
SECTION 28. SEVERABILITY.
The provisions of this Agreement are severable, and if any one clause or
provision hereof shall be held invalid or unenforceable in whole or in part in
any jurisdiction, then such invalidity or unenforceability shall affect only
such clause or provision, or part thereof, in such jurisdiction, and shall not
in any manner affect such clause or provision in any other jurisdiction, or any
other clause or provision of this Agreement in any jurisdiction.
SECTION 29. NO UNWRITTEN AGREEMENTS.
THE WRITTEN LOAN DOCUMENTS REPRESENT THE FINAL AGREEMENT BETWEEN THE
PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR
SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL
AGREEMENTS BETWEEN THE PARTIES.
SECTION 30. TIME OF THE ESSENCE.
Time is of the essence with respect to each and every covenant, agreement
and obligation of the Borrower under this Agreement and the other Loan
Documents.
82
IN WITNESS WHEREOF, the undersigned have duly executed this Agreement as a
sealed instrument as of the date first set forth above.
MERIDIAN INDUSTRIAL TRUST,
INC., a Maryland corporation
By: [SEAL]
-------------------------
Name:
----------------------
Title:
---------------------
[SIGNATURES CONTINUED ON NEXT PAGE]
83
BANKBOSTON, N.A. , individually and
as Agent
By:
-----------------------------
Its:
-------------------------
[SIGNATURES CONTINUED ON NEXT PAGE]
84
TEXAS COMMERCE BANK NATIONAL
By:
----------------------------
Its:
-----------------------
Texas Commerce Bank National
Association
000 Xxxxxx Xxxxxx, 0xx Xxxxx- Xxxxx
Xxxx Xxxxxx Department
Xxxxxxx, Xxxxx 00000
Attn: Xxxxxxxxx X. Xxxxxx,
Senior Vice President
(000) 000-0000
(000) 000-0000 (FAX)
[SIGNATURES CONTINUED ON NEXT PAGE]
85
NATIONSBANK OF TEXAS, N.A.,
individually and as Syndication
Agent
By:
----------------------------
Its:
------------------------
NationsBank of Texas, N.A.
Real Estate Banking Group
000 Xxxx Xxxxxx, 00xx Xxxxx
XxxxxxxXxxx Xxxxx
Xxxxxx, Xxxxx 00000-0000
Attn: Real Estate Administration
(000) 000-0000
(000) 000-0000 (FAX)
86
XXXXX FARGO BANK, N.A.
By:
-----------------------------
Its:
--------------------
Xxxxx Fargo Bank, N.A.
000 Xxxxxxxxxx Xxxxxx
0xx Xxxxx
Xxx Xxxxxxxxx, XX 00000
Attn: Xxxxxxxx X. Xxxxx
(000) 000-0000
(000) 000-0000 (FAX)
00
XXXXXXXX XXXX XX, XXX XXXX
BRANCH AND GRAND CAYMAN BRANCH
By:
-----------------------------
Its:
---------------------------
By:
----------------------------
Its:
---------------------------
Dresdner Bank AG
000 Xxxxx Xxxxx Xxxxxx
Xxxxx 0000
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attn: Xxxxxx X. Xxxxxx
(000) 000-0000
(000) 000-0000 (FAX)
00
XXXXX XXXXXXXX XXXX XXXXX,
S.S.B.
By:
---------------------------
Xxxxxxx X. Xxxxxxx,
Assistant Vice President
First American Bank Texas, S.S.B.
00000 Xxxxxx Xxxxxxx, Xxxxx 000
Xxxxxx, Xxxxx 00000-0000
Attn: Xxxxxxx X. Xxxxxxx
(000) 000-0000
(000) 000-0000 (FAX)
89
EXHIBIT A
FORM OF AMENDED AND RESTATED NOTE
$_____________ September __, 1997
FOR VALUE RECEIVED, the undersigned MERIDIAN INDUSTRIAL TRUST, INC., a
Maryland corporation, hereby promises to pay to
______________________________________ or order, in accordance with the terms of
that certain Third Amended and Restated Revolving Credit Agreement dated
September __, 1997 (the "Credit Agreement"), as from time to time in effect,
among the undersigned, BankBoston, N.A., for itself and as Agent, and such other
Banks as may be from time to time named therein, to the extent not sooner paid,
on or before the Maturity Date the principal sum of
______________________________________ and No/100 Dollars ($________________),
or such amount as may be advanced by the payee hereof under the Credit Agreement
with daily interest from the date hereof, computed as provided in the Credit
Agreement, on the principal amount hereof from time to time unpaid, at a rate
per annum on each portion of the principal amount which shall at all times be
equal to the rate of interest applicable to such portion in accordance with the
Credit Agreement, and with interest on overdue principal and, to the extent
permitted by applicable law, on overdue installments of interest and late
charges at the rates provided in the Credit Agreement. Interest shall be
payable on the dates specified in the Credit Agreement, except that all accrued
interest shall be paid at the stated or accelerated maturity hereof or upon the
prepayment in full hereof. Capitalized terms used herein and not otherwise
defined herein shall have the meanings set forth in the Credit Agreement.
Payments hereunder shall be made to BankBoston, N.A., as Agent for the
payee hereof, 000 Xxxxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000.
This Note is one of one or more Notes evidencing borrowings under and is
entitled to the benefits and subject to the provisions of the Credit Agreement.
The principal of this Note may be due and payable in whole or in part prior to
the maturity date stated above and is subject to mandatory prepayment in the
amounts and under the circumstances set forth in the Credit Agreement, and may
be prepaid in whole or from time to time in part, all as set forth in the Credit
Agreement.
Notwithstanding anything in this Note to the contrary, all agreements
between the Borrower and the Banks and the Agent, whether now existing or
hereafter arising and whether written or oral, are hereby limited so that in no
contingency, whether by reason of acceleration of the maturity of any of the
Obligations or otherwise, shall the interest contracted for, charged or received
by the Banks exceed the maximum amount permissible under applicable law. If,
from any circumstance whatsoever, interest would otherwise be payable to the
Banks in excess of the maximum lawful amount, the interest payable to the Banks
shall be reduced to the maximum amount permitted under applicable law; and if
from any circumstance the Banks shall ever
receive anything of value deemed interest by applicable law in excess of the
maximum lawful amount, an amount equal to any excessive interest shall be
applied to the reduction of the principal balance of the Obligations and to the
payment of interest or, if such excessive interest exceeds the unpaid balance of
principal of the Obligations, such excess shall be refunded to the Borrower.
All interest paid or agreed to be paid to the Banks shall, to the extent
permitted by applicable law, be amortized, prorated, allocated and spread
throughout the full period until payment in full of the principal of the
Obligations (including the period of any renewal or extension thereof) so that
the interest thereon for such full period shall not exceed the maximum amount
permitted by applicable law. This paragraph shall control all agreements
between the Borrower and the Banks and the Agent.
In case an Event of Default shall occur, the entire principal amount of
this Note may become or be declared due and payable in the manner and with the
effect provided in said Credit Agreement.
This Note shall be governed by and construed in accordance with the laws of
the Commonwealth of Massachusetts (without giving effect to the conflict of laws
rules of any jurisdiction).
The undersigned maker and all guarantors and endorsers, hereby waive
presentment, demand, notice, protest, notice of intention to accelerate the
indebtedness evidenced hereby, notice of acceleration of the indebtedness
evidenced hereby and all other demands and notices in connection with the
delivery, acceptance, performance and enforcement of this Note, except as
specifically otherwise provided in the Credit Agreement, and assent to
extensions of time of payment or forbearance or other indulgence without notice.
This Note is a note executed in amendment and restatement in part of the
"Notes" as defined in the Second Amended Credit Agreement.
IN WITNESS WHEREOF the undersigned has by its duly authorized officers,
executed this Note under seal as of the day and year first above written.
MERIDIAN INDUSTRIAL TRUST, INC.,
a Maryland corporation
By: [SEAL]
--------------------------
Xxxxxx X. Xxxxxx,
President and Chief Financial
Officer
EXHIBIT B
FORM OF REQUEST FOR LOAN
BankBoston, N.A., for itself and as Agent
000 Xxxxxxxxx Xxxxxx Xxxxx, Xxxxx 000
Xxxxxxx, Xxxxxxx 00000
Attn: Xxx Xxxxxxx, Assistant Vice President
(000) 000-0000 (FAX)
Ladies and Gentlemen:
Pursuant to the provisions of Section 2.6 of the Third Amended and Restated
Revolving Credit Agreement dated September 23, 1997, as from time to time in
effect (the "Credit Agreement"), among Meridian Industrial Trust, Inc. (the
"Borrower"), BankBoston, N.A., for itself and as Agent and the other Banks from
time to time party thereto, the Borrower hereby requests and certifies as
follows:
1. LOAN. The Borrower hereby requests a Loan under Section 2.1 of the
Credit Agreement:
Principal Amount: $_______________
Type (Eurodollar, Base Rate):
Drawdown Date: _______________ , 19___
Interest Period:
by credit to the general account of the Borrower with the Agent at the Agent's
Head Office.
2. USE OF PROCEEDS. Such Loan shall be used for the following purposes
permitted by Section 7.11 of the Credit Agreement:
[Describe]
3. NO DEFAULT. The undersigned Authorized Officer of the Borrower
certifies that the Borrower is and will be in compliance with all covenants
under the Loan Documents after giving effect to the making of the Loan requested
hereby.
4. UNENCUMBERED OPERATING PROPERTIES. The undersigned Authorized Officer
of the Borrower certifies that the Borrower is and will be in compliance with
Section 9.4 of the Credit Agreement after giving effect to the making of the
Loan requested hereby. Attached hereto as
SCHEDULE A is a list of each of the Unencumbered Operating Properties, their
location, the year in which each property was built, the Gross Rentable Area in
each such property, the Asset Value of each such property, the average occupancy
for each of the Unencumbered Operating Properties for the last two (2) fiscal
quarters and the average occupancy for such period for all of the Unencumbered
Operating Properties, the Net Operating Income and Operating Cash Flow for each
of the Unencumbered Operating Properties, and calculations evidencing the
Borrower's compliance with Section 9.4.
5. REPRESENTATIONS TRUE. Each of the representations and warranties made
by or on behalf of the Borrower and its Subsidiaries and the Guarantor contained
in the Credit Agreement, in the other Loan Documents or in any document or
instrument delivered pursuant to or in connection with the Credit Agreement was
true as of the date as of which it was made and shall also be true at and as of
the Drawdown Date for the Loan requested hereby, with the same effect as if made
at and as of such Drawdown Date (except to the extent of changes resulting from
transactions contemplated or permitted by the Credit Agreement and the other
Loan Documents and changes occurring in the ordinary course of business that
singly or in the aggregate are not materially adverse, and except to the extent
that such representations and warranties relate expressly to an earlier date)
and no Default or Event of Default has occurred and is continuing.
6. OTHER CONDITIONS. All other conditions to the making of the Loan
requested hereby set forth in Section 11 of the Credit Agreement have been
satisfied.
7. DRAWDOWN DATE. Except to the extent, if any, specified by notice
actually received by the Agent prior to the Drawdown Date specified above, the
foregoing representations and warranties shall be deemed to have been made by
the Borrower on and as of such Drawdown Date.
8. DEFINITIONS. Terms defined in the Credit Agreement are used herein
with the meanings so defined.
IN WITNESS WHEREOF, I have hereunto set my hand this _____ day of
_______________, 199__.
MERIDIAN INDUSTRIAL TRUST, INC., a
Maryland corporation
By: [SEAL]
--------------------------
Xxxxxx X. Xxxxxx
President and Chief Financial
Officer
The undersigned Authorized Officer of the Guarantor joins in the execution
hereof to certify that since the date of the last Compliance Certificate
delivered pursuant to the Credit Agreement, there have been no material changes
that could cause a Default or Event of Default to occur after giving effect to
the making of the Loan requested hereby.
MIT UNSECURED L.P., a California
limited partnership
By: MIT Unsecured, Inc., a
California corporation, its
sole general partner
By:
-------------------------
Name:
Title:
[CORPORATE SEAL]
EXHIBIT C
FORM OF LETTER OF CREDIT REQUEST
BankBoston, N.A., for itself and as Agent
000 Xxxxxxxxx Xxxxxx Xxxxx, Xxxxx 000
Xxxxxxx, Xxxxxxx 00000
Attn: Xxx Xxxxxxx, Assistant Vice President
(000) 000-0000 (FAX)
Ladies and Gentlemen:
Pursuant to the provisions of Section 2.9 of the Third Amended and Restated
Revolving Credit Agreement dated September 23, 1997, as from time to time in
effect (the "Credit Agreement"), among Meridian Industrial Trust, Inc. (the
"Borrower"), BankBoston, N.A., for itself and as Agent and the other Banks from
time to time party thereto, the Borrower hereby requests and certifies as
follows:
1. LETTER OF CREDIT. The Borrower hereby requests a Letter of Credit to
be issued under Section 2.9 of the Credit Agreement:
Principal Amount: $
Beneficiary:
2. USE OF PROCEEDS. Such Letter of Credit shall be used for the
following purposes permitted by Section 2.9 and Section 7.11 of the Credit
Agreement:
[Describe]
3. NO DEFAULT. The undersigned Authorized Officer of the Borrower
certifies that the Borrower is and will be in compliance with all covenants
under the Loan Documents after giving effect to the issuance of the Letter of
Credit requested hereby.
4. UNENCUMBERED OPERATING PROPERTIES. The undersigned Authorized Officer
of the Borrower certifies that the Borrower is and will be in compliance with
Section 7.15 of the Credit Agreement after giving effect to the issuance of the
Letter of Credit requested hereby.
5. REPRESENTATIONS TRUE. Each of the representations and warranties made
by or on behalf of the Borrower and its subsidiaries contained in the Credit
Agreement, in the other Loan Documents or in any document or instrument
delivered pursuant to or in connection with the Credit Agreement was true as of
the date as of which it was made and shall also be true at and as
of the issuance date for the Letter of Credit requested hereby, with the same
effect as if made at and as of such issuance date (except to the extent of
changes resulting from transactions contemplated or permitted by the Credit
Agreement and the other Loan documents and changes occurring in the ordinary
course of business that singly or in the aggregate are not materially adverse,
and except to the extent that such representations and warranties relate
expressly to an earlier date) and no default or Event of Default has occurred
and is continuing.
6. OTHER CONDITIONS. All other conditions to the issuance of the Letter
of Credit requested hereby set forth in Section 11 of the Credit Agreement have
been satisfied.
7. ISSUANCE DATE. Except to the extent, if any, specified by notice
actually received by the Agent prior to the issuance date specified above, the
foregoing representations and warranties shall be deemed to have been made by
the Borrower on and as of such issuance date.
8. DEFINITIONS. Terms defined in the Credit Agreement are used herein
with the meanings so defined.
IN WITNESS WHEREOF, I have hereunto set my hand this ____ day of
____________, 199___.
MERIDIAN INDUSTRIAL TRUST, INC., a
Maryland corporation
By: [SEAL]
--------------------------
Xxxxxx X. Xxxxxx
President and Chief Financial
Officer
The undersigned Authorized Officer of the Guarantor joins in the execution
hereof to certify that since the date of the last Compliance Certificate
delivered pursuant to the Credit Agreement, there have been no material changes
that could cause a Default or Event of Default to occur after giving effect to
the making of the Letter of Credit requested hereby.
MIT UNSECURED L.P., a California
limited partnership
By: MIT Unsecured, Inc., a
California corporation, its
sole general partner
By:
-------------------------
Name:
Title:
[CORPORATE SEAL]
EXHIBIT D
FORM OF
COMPLIANCE CERTIFICATE
BankBoston, N.A., for itself and as Agent
000 Xxxxxxxxx Xxxxxx Xxxxx, Xxxxx 000
Xxxxxxx, Xxxxxxx 00000
Attn: Xxx Xxxxxxx, Assistant Vice President
(000) 000-0000 (FAX)
Ladies and Gentlemen:
Reference is made to the Third Amended and Restated Revolving Credit
Agreement dated September 23, 1997 (the "Credit Agreement") by and among
Meridian Industrial Trust, Inc. (the "Borrower"), BankBoston, N.A., for itself
and as Agent, and the other Banks from time to time party thereto. Terms
defined in the Credit Agreement and not otherwise defined herein are used herein
as defined in the Credit Agreement.
Pursuant to the Credit Agreement, the Borrower and the Guarantor are
furnishing to you herewith (or has most recently furnished to you) the financial
statements of the Borrower and its Subsidiaries and the Guarantor for the fiscal
period ended _______________, 199__ (the "Balance Sheet Date"). Such financial
statements have been prepared in accordance with generally accepted accounting
principles and present fairly the financial position of the Borrower and its
Subsidiaries and the Guarantor covered thereby at the date thereof and the
results of their operations for the periods covered thereby, subject in the case
of interim statements only to normal year-end audit adjustments.
This certificate is submitted in compliance with requirements of Section
7.4(e), Section 7.5(d) and Section 10.10 of the Credit Agreement. If this
certificate is provided under a provision other than Section 7.4(e), the
calculations provided below are made using the financial statements of the
Borrower and its Subsidiaries and the Guarantor as of the Balance Sheet Date
adjusted in the best good-faith estimate of the Borrower and the Guarantor to
give effect to the making of a Loan, extension of the Maturity Date, acquisition
or disposition of property or other event that occasions the preparation of this
certificate; and the nature of such event and the Borrower's and the Guarantor's
estimate of its effects are set forth in reasonable detail in an attachment
hereto. The undersigned officers of the Borrower and the Guarantor are
Authorized Officers of the Borrower and the Guarantor .
The undersigned Authorized Officers have caused the provisions of the
Credit Agreement and the Guaranty to be reviewed and have no knowledge of any
Default or Event of Default.
93
(Note: If the signer does have knowledge of any Default or Event of Default, the
form of certificate should be revised to specify the Default or Event of
Default, the nature thereof and the actions taken, being taken or proposed to be
taken by the Borrower and the Guarantor with respect thereto.)
The Borrower and the Guarantor are providing the following information to
demonstrate compliance as of the date hereof with the following covenants (to
the extent the Certificate requests a ratio for the previous three quarters and
three quarters have not elapsed since the Closing Date, the Borrower should
specify only such ratios as are then available):
1. SECTION 7.5(d). TRANSFERS AND ENCUMBRANCES.
Describe sales, encumbrances, refinances
and other transfers referred to in Section 7.5(d).
2. SECTION 7.15. UNENCUMBERED OPERATING PROPERTIES.
A. Value of Industrial Properties
1. Total Asset Value of
Unencumbered Operating
Properties constituting
industrial properties $
-----------
2. Total Asset Value of all
Unencumbered Operating
Properties (after one-time
market adjustment of $______) $
-----------
Ratio of A.1 to A.2 %
(shall be at least 75%); ---------
Ratio for previous three quarters
__________, __________, __________
B. Geographic Distribution
1. Attach schedules for each
metropolitan area showing
total Asset Value for each
such area $
-----------
2. Total Asset Value of
all Unencumbered Operating
Properties (after one-time
market adjustment) $
-----------
Ratio of B.1 to B.2 %
(shall not exceed 35%) -----------
Ratio for previous three
quarters
__________, __________, ___________
C. Leases
1. Economic Leases
(a) Total Gross Rentable Area
of Unencumbered Operating
Properties subject to Leases
paying rent
-----------
(b) Total Gross Rentable Area
of Unencumbered Operating
Properties
-----------
Ratio of C.1(a) to C.1(b) %
(shall be at least 85%) -----------
Ratio for previous three quarters
__________, __________, ___________
2. All Leases
(a) Total Gross Rentable Area
of Unencumbered Operating
Properties subject to Leases
in which tenants are in occupancy
-----------
(b) Total Gross Rentable Area
of Unencumbered Operating
Properties
-----------
Ratio of C.2(a) to C.2(b) %
(shall be at least 77%) ----------
Ratio for previous three quarters
__________, __________, __________
3. Tenants
(a) Total Gross Cash Receipts
generated by Unencumbered
Operating Properties $
-----------
(b) Does any single tenant
account for more than 7% of
C.3(a) (10% if S&P rating of
BBB- or better or 20% if Sears
and Xxxxx'x Investors Service, Inc.'s
rating of A-3 or better or S&P rating
of A- or better)?
-----------
List top five tenants with respect to
Gross Cash Receipts
3. SECTION 8.1(f). NON-RECOURSE INDEBTEDNESS.
A. Amount of Non-recourse Indebtedness
pursuant to Section 8.1(f) $
-----------
B. Consolidated Total Assets per balance sheet $
-----------
Plus Depreciation $
-----------
One-time market adjustment $
-----------
Consolidated Total Assets after
increase for depreciation and
one-time market adjustment $
-----------
A may not exceed 35% of B
The amount for the previous
three quarters __________, __________, __________
4. SECTION 8.7. DISTRIBUTIONS.
A. Amount of Distributions for fiscal
quarter most recently ended $
-----------
B. Amount of Distributions for previous
four fiscal quarters $
-----------
C. Funds from Operations for
Fiscal quarter most recently ended $
-----------
D. Cash Available for Distribution for
previous four fiscal quarters $
-----------
E. Minimum Distributions required
to maintain REIT status of the
Borrower $
-----------
F. A is _______% of C
For the quarter ending December 31, 1996,
A may not exceed the greater of
(i) 90% of C or (ii) E; thereafter,
A may not exceed the greater of (i)
85% of C or (ii) E.
G. B is ____% of D
For the quarter ending December 31, 1996,
B may not exceed the greater of (a) 110%
of D or (b) E; thereafter, B may not exceed
the greater of (a) 100% of D or (b) E.
5. SECTION 9.1. LIABILITIES TO TANGIBLE NET WORTH RATIO.
A. Consolidated Total Liabilities
per balance sheet $
-----------
B. Consolidated Tangible Net Worth $
-----------
Ratio of A to B
-----------
Ratio of A to B may not exceed 0.75 to 1.
The ratio of A to B for the
previous three quarters __________, __________, __________
6. SECTION 9.2. DEBT COVERAGE.
A. Funds from Operations
Consolidated Net Income for
most recent quarter $
-----------
Plus depreciation and amortization $
-----------
Plus expensed interest $
-----------
Plus amortized portion of $
Initial Loan Fees -----------
Subtotal for most recent quarter $
-----------
Funds from Operations
for three prior quarters:
Quarter ended __________ $
-----------
Quarter ended __________ $
-----------
Quarter ended __________ $
-----------
Total $
-----------
B. Debt Service for four prior
quarters
Principal Paid $
-----------
Interest Paid $
-----------
Total $
-----------
A divided by B (expressed as a percentage) %
-----------
A must equal or exceed 250% of B.
Coverage for previous
three quarters __________, __________, __________
7. SECTION 9.3. FIXED CHARGE COVERAGE.
A. Cash Available for Distribution
Funds from Operations for
quarter ending ________ $
----------
Minus Capital Improvement Reserve $
($0.15 x Total Gross Rentable Area) -----------
Minus actual tenant improvements and
leasing commissions
(attach itemization) $
-----------
Subtotal for most recent quarter $
-----------
Cash Available for Distribution
for three prior quarters:
Quarter ended __________ $
-----------
Quarter ended __________ $
-----------
Quarter ended __________ $
-----------
Total $
-----------
B. Debt Service for four prior
quarters
Principal Paid $
-----------
Interest Paid $
-----------
Total $
-----------
A divided by B (expressed as a percentage)
A must equal or exceed 175% of total of B.
8. SECTION 9.4. BORROWING BASE. (Attach separate worksheet)
A. Aggregate of all Borrowing Bases
(per attached worksheet) $
-----------
B. Total Outstanding principal
balance of Loans (after giving
effect to any Loan Request) and
Outstanding Letters of Credit $
-----------
B may not exceed A.
9. SECTION 9.5. TANGIBLE NET WORTH
Consolidated Tangible Net Worth
A. Consolidated Total Assets per
balance sheet after increase for depreciation
and one-time market adjustment (see 3.B. above) $
Minus Consolidated Total -----------
Liabilities per balance sheet $
-----------
Minus aggregate book value of
intangible assets $
-----------
Minus asset write-up amounts,
if any $
-----------
Minus prepaid fees and deferred
charges $
-----------
Total $
-----------
Consolidated Tangible Net Worth may not be less
than $244,646.00 plus the amount of any net
proceeds received from any Equity Offering subsequent
to the Closing Date.
10. REAL ESTATE ASSETS
A. SECTION 9.6(a). Partnerships/Joint Ventures
1. Total Asset Value of Borrower's
partnership and joint venture
interests (excluding Subsidiaries
that are 100% owned, directly or
indirectly by Borrower) $
-----------
2. Total value of the Consolidated
Total Assets after increase for depreciation
and one-time market adjustment $
(see 3.B. above) -----------
A.1 may not exceed 15% of A.2
B. SECTION 9.6(b). Land
1. Total Asset Value of Borrower's
non-income producing land assets $
-----------
2. Total value of the Consolidated
Total Assets after increase for depreciation
and one-time market adjustment $
(see 3.B. above) -----------
B.1 may not exceed 8% of B.2
C. SECTION 8.9. Development
1. Total Asset Value of Borrower's
Real Estate Under Development $
-----------
2. Total value of the Consolidated
Total Assets after increase for depreciation
and one-time market adjustment $
(see 3.B. above) -----------
C.1 may not exceed 20% of C.2
IN WITNESS WHEREOF, we have hereunto set our hands this ___ day of
_______________________, 199__.
MERIDIAN INDUSTRIAL TRUST, INC., a
Maryland corporation
By: [SEAL]
-------------------------
Xxxxxx X. Xxxxxx
President and Chief Financial
Officer
MIT UNSECURED L.P., a California
limited partnership
By: MIT Unsecured, Inc., a
California corporation, its
sole general partner
By:
---------------------------
Title:
-------------------
[CORPORATE SEAL]
BORROWING BASE WORKSHEET
Prepare spread sheet showing following information for all Unencumbered
Operating Properties:
I. INCLUDING OTR MINORITY INTEREST.
A. Asset Value
1. Aggregate Asset Value of all Unencumbered
Operating Properties decreased by book value
of Subsidiary Minority Interest and ,with approval of Majority
Banks, increased by book value of other minority interests
2. 50% of (1)
B. Net Operating Income
1. Gross Cash Receipts
(a) Aggregate Gross Cash Receipts
of all Unencumbered Operating
Properties for quarter ending
________ [Attach worksheet in
form and substance satisfactory
to the Agent]
(b) Aggregate Gross Cash Receipts
of all Unencumbered Operating
Properties for prior quarters:
Quarter ended __________
Quarter ended __________
Quarter ended __________
Total Gross Cash Receipts
2. Operating Expenses
(a) Aggregate Operating Expenses
of all Unencumbered Operating
Properties for quarter ending
__________
(b) Aggregate Operating Expenses
of all Unencumbered Operating
Properties for prior quarters
Quarter ended ___________
Quarter ended ___________
Quarter ended ___________
Total Operating Expenses
3. Net Operating Income
(a) Total Gross Cash Receipts minus
Total Operating Expenses
(b) Portion of Net Operating Income allocable to
Subsidiary Minority Interest
(c) Capital Improvement Reserve of
$0.15 multiplied by average Gross
Rentable Area of all Unencumbered
Operating Properties
Total Net Operating Income equals
3(a) minus 3(b)minus 3(c)
4. Divide total on line 3 by 10% if
Initial Unencumbered Operating
Properties or after acquired
Unencumbered Operating Properties
which do not constitute a Qualifying
Property (see 5)
5. Divide total on line 3 by 9.25% if
Qualifying Properties
Test for Qualifying Properties
(a) Age
(Must not exceed 12 years)
(b) Gross Rentable Area
(Must not be less than 50,000 s.f.)
(c) Use
(Must be non-specialized)
(d) Must meet 2 of the following 3
requirements
(1) s.f. of finished out air
conditioned office space
(Must not exceed 20% of
total Gross Rentable Area)
(2) ceiling clearance height
(must not be less than 22 feet)
(3) average Gross Rentable Area
covered by each Lease (must
not be less than 20,000 s.f.)
6. Aggregate value is sum of (4) and (5) and, with approval
of the Majority Banks, increased by the book value of other
minority interests
7. 50% of (6)
C. Debt Service Test
1. Total Gross Cash Receipts (See B.1. above)
2. Total Operating Expenses (See B.2 above)
3. Total Net Operating Income (See B.3 above)
4. Divide total on line 3 by 1.75
5. Divide total on line 4 by 12
6. Constant based on 10 year Treasury
3
Obligations (yield supplied by Agent)
+ 2.0% and 25 year mortgage style
amortization
7. Total on line 5 divided by constant
on line 6, which total is
multiplied by 12, equals aggregate Debt Service
Coverage Amount
8. Total of Line 7 increased, with approval of the Majority
Banks, by the book value of other minority interests
D. Lesser of A.2, B.7 and C.8 is the aggregate Borrowing Base for
all Unencumbered Operating Properties (including the
OTR Minority Interest)
II. EXCLUDING THE OTR MINORITY INTEREST AND OTHER MINORITY INTERESTS OF
BORROWER APPROVED BY MAJORITY BANKS.
A. Asset Value
1. Aggregate Asset Value of all Unencumbered
Operating Properties decreased by book value
of Subsidiary Minority Interest
2. 55% of (1)
B. Net Operating Income
1. Gross Cash Receipts
(a) Aggregate Gross Cash Receipts
of all Unencumbered Operating
Properties for quarter ending
________ [Attach worksheet in
form and substance satisfactory
to the Agent]
(b) Aggregate Gross Cash Receipts
of all Unencumbered Operating
Properties for prior quarters:
Quarter ended __________
4
Quarter ended __________
Quarter ended __________
Total Gross Cash Receipts
2. Operating Expenses
(a) Aggregate Operating Expenses
of all Unencumbered Operating
Properties for quarter ending
__________
(b) Aggregate Operating Expenses
of all Unencumbered Operating
Properties for prior quarters
Quarter ended ___________
Quarter ended ___________
Quarter ended ___________
Total Operating Expenses
3. Net Operating Income
(a) Total Gross Cash Receipts minus
Total Operating Expenses
(b) Portion of Net Operating Income allocable to
Subsidiary Minority Interest
(c) Capital Improvement Reserve of
$0.15 multiplied by average Gross
Rentable Area of all Unencumbered
Operating Properties
Total Net Operating Income equals
3(a) minus 3(b) minus 3(c)
4. Divide total on line 3 by 10% if
5
Initial Unencumbered Operating
Properties or after acquired
Unencumbered Operating Properties
which do not constitute a Qualifying
Property (see 5)
5. Divide total on line 3 by 9.25% if
Qualifying Properties
Test for Qualifying Properties
(a) Age
(Must not exceed 12 years)
(b) Gross Rentable Area
(Must not be less than 50,000 s.f.)
(c) Use
(Must be non-specialized)
(d) Must meet 2 of the following 3
requirements
(1) s.f. of finished-out air
conditioned office space
(Must not exceed 20% of
total Gross Rentable Area)
(2) ceiling clearance height
(must not be less than 22 feet)
(3) average Gross Rentable Area
covered by each Lease (must
not be less than 20,000 s.f.)
6. Aggregate value is sum of (4) and (5)
7. 55% of (6)
C. Debt Service Test
1. Total Gross Cash Receipts (See B.1 above)
2. Total Operating Expenses (See B.2 above)
6
3. Total Net Operating Income (See B.3 above)
4. Divide total on line 3 by 1.75
5. Divide total on line 4 by 12
6. Constant based on 10-year Treasury
Obligations (yield supplied by Agent)
+ 2.0% and 25 year mortgage style
amortization
7. Total on line 5 divided by constant
on line 6, which total is
multiplied by 12, equals aggregate
Debt Service Coverage Amount
D. Lesser of A.2, B.7 and C.7 is the aggregate Borrowing Base for
all Unencumbered Operating Properties (excluding the
OTR Minority Interest and other minority interests of Borrower
approved by Majority Banks)
Lesser of I and II is the aggregate Borrowing Base for all
Unencumbered Operating Properties.
7
SCHEDULE 1
BANKS AND COMMITMENTS
Name and Address Commitment Commitment Percentage
---------------- ---------- ---------------------
BankBoston, N.A. $ 60,000,000.00 24%
000 Xxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attn: Real Estate Division
Eurodollar Lending Office
Same as above
Texas Commerce Bank $ 45,000,000.00 18%
National Association
000 Xxxxxx Xxxxxx, 0xx Xxxxx-Xxxxx
Xxxx Xxxxxx Department
Xxxxxxx, Xxxxx 00000
Attn: Xxxxxxxxx X. Xxxxxx,
Senior Vice President
Eurodollar Lending Office
Same as above
NationsBank of Texas, N.A. $ 55,000,000.00 22%
Real Estate Banking Group
000 Xxxx Xxxxxx, 00xx Xxxxx
XxxxxxxXxxx Xxxxx
Xxxxxx, Xxxxx 00000-0000
Attn: Real Estate Administration
Eurodollar Lending Office
Same as above
Xxxxx Fargo Bank, N.A. $ 40,000,000.00 16%
000 Xxxxxxxxxx Xxxxxx
0xx Xxxxx
Xxx Xxxxxxxxx, XX 00000
1
Attn: Xxxxxxxx X. Xxxxx
Eurodollar Lending Office
Same as above
Dresdner Bank AG $ 35,000,000.00 14%
000 Xxxxx Xxxxx Xxxxxx
Xxxxx 0000
Xxx Xxxxxxx, XX 00000
Attn: Xxxxxx X. Xxxxxx
Eurodollar Lending Office
Same as above
First American Bank Texas, S.S.B. $ 15,000,000.00 6%
00000 Xxxxxx Xxxxxxx, Xxxxx 000
Xxxxxx, Xxxxx 00000-0000
Attn: Xxxxxxx X. Xxxxxxx
Eurodollar Lending Office
Same as above
---------------
Total Commitment $250,000,000.00
Commitment Percentages may not equal 100% due to rounding.
2
SCHEDULE 2
BANKS AND COMMITMENTS
Name and Address Commitment Commitment Percentage
---------------- ---------- ---------------------
BankBoston, N.A. $30,000,000.00 20%
000 Xxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attn: Real Estate Division
Eurodollar Lending Office
Same as above
Texas Commerce Bank $25,000,000.00 17%
National Association
000 Xxxxxx Xxxxxx, 0xx Xxxxx-Xxxxx
Xxxx Xxxxxx Department
Xxxxxxx, Xxxxx 00000
Attn: Xxxxxxxxx X. Xxxxxx,
Senior Vice President
Eurodollar Lending Office
Same as above
NationsBank of Texas, N.A. $30,000,000.00 20%
Real Estate Banking Group
000 Xxxx Xxxxxx, 00xx Xxxxx
XxxxxxxXxxx Xxxxx
Xxxxxx, Xxxxx 00000-0000
Attn: Real Estate Administration
Eurodollar Lending Office
Same as above
Xxxxx Fargo Bank, N.A. $25,000,000.00 17%
000 Xxxxxxxxxx Xxxxxx
0xx Xxxxx
Xxx Xxxxxxxxx, XX 00000
3
Attn: Xxxxxxxx X. Xxxxx
Eurodollar Lending Office
Same as above
Dresdner Bank AG $25,000,000.00 17%
000 Xxxxx Xxxxx Xxxxxx
Xxxxx 0000
Xxx Xxxxxxx, XX 00000
Attn: Xxxxxx X. Xxxxxx
Eurodollar Lending Office
Same as above
First American Bank Texas, S.S.B. $15,000,000.00 10%
00000 Xxxxxx Xxxxxxx, Xxxxx 000
Xxxxxx, Xxxxx 00000-0000
Attn: Xxxxxxx X. Xxxxxxx
Eurodollar Lending Office
Same as above
---------------
Total Commitment $150,000,000.00
Commitment Percentages may not equal 100% due to rounding.
4
SCHEDULE 3
INITIAL UNENCUMBERED OPERATING PROPERTIES
NAME OWNER
---------------------------------- ---------------------------------
4000 Air Park Cove MIT Unsecured L.P.
Airport Building #3 MIT Unsecured L.P.
Airport Building #14 MIT Unsecured L.P.
Airport Building #16A MIT Unsecured L.P.
Airport Building #16B MIT Unsecured L.P.
Airport Building #17 MIT Unsecured L.P.
Chatsworth Borrower
Scripps Ranch Borrower
Bedford Park MIT Unsecured L.P.
Palisades I & II MIT Unsecured L.P.
Northgate 4 & 5 MIT Unsecured L.P.
Northgate 28 MIT Unsecured L.P.
Las Colinas 4 & 5 MIT Unsecured L.P.
Valley Branch I & II MIT Unsecured L.P.
Beltline MIT Unsecured L.P.
Great Southwest 4 MIT Unsecured L.P.
Olive Branch (expansion) MIT Unsecured L.P.
1550 Xxxx Quaker MIT Unsecured L.P.
0000 Xxxxxxxxx Xxxxx MIT Unsecured X.X.
Xxxxxxxxx Warehouse MIT Unsecured L.P.
4013 Premier MIT Unsecured L.P.
Live Oak Parkway Borrower
Phoenix N. 23rd Borrower
Phoenix N. 27th Borrower
Phoenix Plaza Three Borrower
Cypress B Borrower
Golden Cove Borrower
Xxxxx Xxxxx Two Borrower
North Irvine Borrower
Regal Empress MIT Unsecured L.P.
Las Colinas I MIT Unsecured L.P.
San Xxxxxx Borrower
Meridian Village Borrower
Xxxxx Xxxx Parkway MIT Unsecured L.P.
Overlake Place Borrower
Crosswind Drive Borrower
Xxxxxx Avenue Borrower
Xxxxxxxxx Avenue Borrower
Gold River Lane Borrower
Mission Oaks Borrower
Crossroads Parkway MIT Unsecured X.X.
Xxxxxx Ridge Drive MIT Unsecured L.P.
SCHEDULE 4
----------
ADJUSTED ASSET VALUE OF REAL ESTATE
SCHEDULE 6.3
------------
TITLE TO PROPERTIES; LEASES
NONE.
SCHEDULE 6.7
------------
LITIGATION
NONE.
SCHEDULE 6.19
-------------
SUBSIDIARIES OF THE BORROWER
THE BORROWER HAS A 100% OWNERSHIP INTEREST (DIRECTLY OR INDIRECTLY) IN THE
FOLLOWING ENTITIES; ALL OF WHICH HOLD DIRECT OR INDIRECT OWNERSHIP INTERESTS IN
COMMERCIAL REAL PROPERTY :
1. MIT Unsecured L.P., a California limited partnership (formerly known
as DFW Nine Limited Partnership)
2. MIT Unsecured, Inc., a California corporation (formerly known as
Metroplex Co.)
3. MIT-ULP, Inc., a California corporation
4. MIT Secured L.P., a California limited partnership (formerly known as
Progress Center/Alabama Limited Partnership)
5. MIT Secured, Inc., a California corporation (formerly known as
Pro-Sierra Corp.)
6. MIT-SLP, Inc., a California corporation
7. MJV III Corp., a California corporation
8. MJV IV Corp., a California corporation
THE BORROWER HAS A 100% OWNERSHIP INTEREST (DIRECT AND INDIRECT) IN THE
FOLLOWING ENTITIES, ALL OF WHICH HAVE NO ASSETS, ARE CONDUCTING NO BUSINESS, AND
ARE SCHEDULED TO BE DISSOLVED:
1. 6834 Limited Partnership, and Illinois limited partnership
2. Dallas Nine Corp., a Nevada corporation
3. Metroplex Co., a Nevada corporation
4. 6834 Corporation, a Nevada corporation
5. Mem-Ind Corporation, a Nevada corporation
6. Texmet Corporation, a California corporation
THE BORROWER'S OWNERSHIP INTEREST IN THE FOLLOWING ENTITIES IS AS SHOWN:
Meridian Ohio Limited Partnership, a Delaware limited partnership (20%)
MDN/JSC Limited Partnership, a California limited partnership (86%)
EBP 1, Ltd., a Texas limited partnership (50%)
EBP 2, Ltd., a Texas limited partnership (50%)
Meridian - Argent VI, a Texas limited partnership (50%)
