REVOLVING CREDIT AGREEMENT
--------------------------
among
GROVE OPERATING, L.P.,
GROVE PROPERTY TRUST
and
BANKBOSTON, N.A.
and
THE OTHER BANKS WHICH MAY BECOME
PARTIES TO THIS AGREEMENT
with
BANKBOSTON, N.A.,
AS AGENT
BANCBOSTON XXXXXXXXX XXXXXXXX
AS ARRANGER
FIRST UNION NATIONAL BANK
AS SYNDICATION AGENT
Dated as of August 11, 1999
Table of Contents
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Section 1. DEFINITIONS AND RULES OF INTERPRETATION...........................1
Section 1.1. Definitions........................................1
Section 1.2. Rules of Interpretation............................1
Section 2. THE REVOLVING CREDIT FACILITY.....................................1
Section 2.1. Commitment to Lend.................................1
Section 2.2. The Revolving Credit Notes.........................2
Section 2.3. Interest on Revolving Credit Loans; Fees...........2
Section 2.4. Requests for Revolving Credit Loans................4
Section 2.5. Conversion Options.................................7
Section 2.6. Funds for Revolving Credit Loans...................8
Section 3. REPAYMENT OF THE REVOLVING CREDIT LOANS...........................9
Section 3.1. Maturity...........................................9
Section 3.2. Optional Repayments of Revolving Credit Loans......10
Section 3A. LETTER OF CREDIT FACILITY.........................................10
Section 3A.1. Issuance of Letters of Credit Commitments..........10
(b) Letter of Credit Applications. Each..........11
(c) Terms of Letters of Credit. Each.............11
Section 3A.2. Reimbursement Obligation of the Borrower...........11
Section 3A.3. Letter of Credit Payments..........................12
Section 3A.4. Obligations Absolute...............................13
Section 3A.5. Reliance by Issuer.................................14
Section 3A.6. Letter of Credit Fee...............................14
Section 4. CERTAIN GENERAL PROVISIONS........................................14
Section 4.1. Funds for Payments.................................14
Section 4.2. Computations.......................................16
Section 4.3. Inability to Determine LIBOR Rate..................16
Section 4.4. Illegality.........................................16
Section 4.5. Additional Costs, Etc..............................17
Section 4.6. Capital Adequacy...................................18
Section 4.7. Certificate........................................19
Section 4.8. Indemnity..........................................19
Section 4.9. Interest on Overdue Amounts........................19
Section 5. BORROWING BASE....................................................19
Section 5.1. Additions and Replacements to Eligible Properties..19
Section 5.2. Removal from Eligible Properties...................21
Section 5.3. Recourse Obligations...............................21
Section 6. REPRESENTATIONS AND WARRANTIES....................................21
Section 7. AFFIRMATIVE COVENANTS.............................................24
Section 8. NEGATIVE COVENANTS................................................27
Section 9. FINANCIAL COVENANTS...............................................30
Section 10. CONDITIONS TO THE CLOSING DATE....................................31
Section 10.1. Loan Documents.....................................31
Section 10.2. Certified Copies of Organization Documents.........31
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Section 10.3. By-Laws; Resolutions...............................32
Section 10.4. Incumbency Certificate; Authorized Signers.........32
Section 10.5. Survey and Taxes...................................32
Section 10.6. Title Insurance; Title Exception Documents.........33
Section 10.7. Leases, Service Contracts and Other Documents......33
Section 10.8. Estoppel Agreements................................33
Section 10.9. Certificates of Insurance..........................33
Section 10.10. Hazardous Substance Assessments....................33
Section 10.11. Opinion of Counsel Concerning Organization and
Loan Documents.....................................33
Section 10.12. Structural Condition Assurances....................34
Section 10.13. Permit Assurances; Compliance......................34
Section 10.14. Guaranty...........................................34
Section 10.15. Financial Analysis of Initial Eligible Properties..34
Section 10.16. Inspection of Eligible Properties..................34
Section 10.17. Certifications from Government Officials;
UCC-11 Reports.....................................34
Section 10.18. Proceedings and Documents..........................35
Section 10.19. Fees...............................................35
Section 10.20. Closing Certificate................................35
Section 11. CONDITIONS TO ALL BORROWINGS.....................................35
Section 11.1. Representations True; No Event of Default;
Compliance Certificate.............................35
Section 11.2. No Legal Impediment................................35
Section 11.3. Governmental Regulation............................36
Section 12. EVENTS OF DEFAULT; ACCELERATION; ETC.............................36
Section 12.1. EVENTS OF DEFAULT; ACCELERATION....................36
Section 12.2. Termination of Commitments.........................37
Section 12.3. Remedies...........................................38
Section 12.4. Distribution of Proceeds...........................38
Section 13. SETOFF...........................................................39
Section 14. ENVIRONMENTAL MATTERS............................................40
Section 14.1. Representations and Warranties.....................40
Section 14.2. Environmental Indemnity and Covenants..............42
Section 15. THE AGENT........................................................43
Section 15.1. Authorization......................................43
Section 15.2. Employees and Agents...............................44
Section 15.3. No Liability.......................................44
Section 15.4. No Representations.................................44
Section 15.5. Payments...........................................45
Section 15.6. Holders of Revolving Credit Notes..................46
Section 15.7. Indemnity..........................................47
Section 15.8. Agent as Bank......................................47
Section 15.9. Notification of Defaults and Events of Default.....47
Section 15.10. Duties in the Case of Enforcement..................47
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Section 15.11. Successor Agent....................................48
Section 15.12. Notices............................................48
Section 16. ASSIGNMENT; PARTICIPATIONS; ETC..................................48
Section 16.1. Conditions to Assignment by Banks..................48
Section 16.2. Certain Representations and Warranties;
Limitations; Covenants.............................49
Section 16.3. Register...........................................50
Section 16.4. New Revolving Credit Notes.........................50
Section 16.5. Participations.....................................51
Section 16.6. Pledge by Lender...................................51
Section 16.7. No Assignment by Borrower..........................51
Section 16.8. Disclosure.........................................52
Section 17. CONSENTS, AMENDMENTS, WAIVERS, ETC...............................52
Section 18. MISCELLANEOUS....................................................53
Section 19. WAIVER OF JURY TRIAL.............................................54
Section 20. PREJUDGMENT REMEDY WAIVER........................................54
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EXHIBITS
--------
A Form of Revolving Credit Note
B Eligible Property Conditions
C Form of Lease Summaries
D Form of Loan Request
E Form of Compliance Certificate
F Form of Closing Certificate
G Form of Assignment and Assumption Agreement
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Schedules to Revolving Credit Agreement
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SCHEDULE 1 Banks' Commitments
SCHEDULE 2 Definitions and Rules of Interpretation
SCHEDULE 3 List of Additional Guarantors and Eligible Properties
SCHEDULE 6(b) Capitalization; Outstanding Securities, Etc.
SCHEDULE 6(c) Partially Owned Real Estate Holding Entities
SCHEDULE 6(p) Subsidiaries/Joint Ventures
SCHEDULE 8(a)(vii) Other Permitted Indebtedness
REVOLVING CREDIT AGREEMENT
--------------------------
This REVOLVING CREDIT AGREEMENT is made as of the 11th day
of August, 1999, by and among GROVE OPERATING, L.P., a Delaware limited
partnership (the "Borrower"), GROVE PROPERTY TRUST, a Maryland corporation which
is the sole general partner of the Borrower (the "Guarantor"), each having its
principal place of business at 000 Xxxxxx Xxxxxx, Xxxxxxxx, Xxxxxxxxxxx 00000,
BANKBOSTON, N.A., a national banking association having its principal place of
business at Xxx XxxxXxxxxx Xxxxx, Xxxxxxxxxx, Xxxxx Xxxxxx 00000, and the other
lending institutions which may become parties hereto pursuant to ss.15
(individually, a "Bank" and collectively, the "Banks") and BANKBOSTON, N.A., as
agent for itself and each other Bank (in such capacity, the "Agent").
Section 1. DEFINITIONS AND RULES OF INTERPRETATION.
---------------------------------------
Section 1.1. DEFINITIONS. Except as otherwise expressly
provided herein, all capitalized terms used in this Agreement, the exhibits
hereto and any notes, certificates, reports or other documents or instruments
made or delivered pursuant to or in connection with this Agreement shall have
the meanings set forth for such terms in Schedule 2 hereto.
Section 1.2. RULES OF INTERPRETATION. Except as otherwise
expressly provided herein, the rules of interpretation set forth in Schedule 2
hereto shall apply to this Agreement, the exhibits hereto and any notes,
certificates, reports or other documents or instruments made or delivered
pursuant to or in connection with this Agreement.
Section 2. THE REVOLVING CREDIT FACILITY.
-----------------------------
Section 2.1. COMMITMENT TO LEND. Subject to the provisions
of ss.2.4 and the other terms and conditions set forth in this Agreement, each
of the Banks severally agrees to lend to the Borrower and the Borrower may
borrow, repay, and reborrow from each Bank from time to time between the Closing
Date and the Maturity Date upon notice by the Borrower to the Agent given in
accordance with ss.2.4 hereof, such sums as are requested by the Borrower up to
a maximum aggregate principal amount outstanding (after giving effect to all
amounts requested) at any one time equal to such Bank's Commitment minus such
Bank's Commitment Percentage of the sum of the Maximum Drawing Amount and all
Unpaid Reimbursement Obligations; provided that the sum of the outstanding
aggregate amount of the Revolving Credit Loans (after giving effect to all
amounts requested) plus the Maximum Drawing Amount and all Unpaid Reimbursement
Obligations shall not at any time exceed the Borrowing
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Base at such time. The Borrower agrees that it shall be an Event of Default if
at any time the outstanding Revolving Credit Loans plus the Maximum Drawing
Amount and all Unpaid Reimbursement Obligations exceed the Borrowing Base at
such time and such excess is not paid to the Agent on behalf of the Banks within
thirty (30) days of the Agent's request therefor.
The Revolving Credit Loans shall be made pro rata in
accordance with each Bank's Commitment Percentage. Each request for a Revolving
Credit Loan made pursuant to ss.2.4 hereof shall constitute a representation and
warranty by the Borrower that the conditions set forth in ss.10 have been
satisfied as of the Closing Date and that the conditions set forth in ss.11 have
been satisfied on the date of such request and will be satisfied on the proposed
Drawdown Date of the requested Revolving Credit Loan. No Revolving Credit Loan
shall be required to be made by any Bank unless all of the conditions contained
in ss.10 have been satisfied as of the Closing Date and that the conditions set
forth in ss.11 have been met at the time of any request for a Revolving Credit
Loan.
Section 2.2. THE REVOLVING CREDIT NOTES. The Revolving
Credit Loans shall be evidenced by the Revolving Credit Notes. A Revolving
Credit Note shall be payable to the order of each Bank in an aggregate principal
amount equal to such Bank's Commitment. The Borrower irrevocably authorizes each
Bank to make or cause to be made, at or about the time of the Drawdown Date of
any Revolving Credit Loan or at the time of receipt of any payment of principal
on such Bank's Revolving Credit Notes, an appropriate notation on such Bank's
Revolving Credit Note Record reflecting the making of such Revolving Credit Loan
or (as the case may be) the receipt of such payment. The outstanding amount of
the Revolving Credit Loans set forth on such Bank's Revolving Credit Note 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 Revolving Credit Note Record shall not limit or otherwise
affect the obligations of the Borrower hereunder or under any Revolving Credit
Note to make payments of principal of or interest on any Revolving Credit Note
when due.
Section 2.3. INTEREST ON REVOLVING CREDIT LOANS; FEES.
----------------------------------------
(a) BASE RATE. Each Base Rate Loan shall bear interest for the
period commencing with the Drawdown Date thereof and ending on the last
day of each Interest Period with respect thereto (unless earlier paid in
accordance with ss.3.2) at a rate equal to the Base Rate plus the
Applicable Base Rate Margin.
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(b) LIBOR RATE. Each LIBOR Rate Loan shall bear interest for the
period commencing with the Drawdown Date thereof and ending on the last
day of each Interest Period with respect thereto (unless earlier paid in
accordance with ss.3.2) at a rate equal to the LIBOR Rate determined for
such Interest Period plus the Applicable LIBOR Rate Margin.
(c) INTEREST PAYMENTS. The Borrower unconditionally promises to
pay interest on each Revolving Credit Loan in arrears on each Interest
Payment Date with respect thereto.
(d) CLOSING FEE. The Borrower agrees to pay to the Agent a closing
fee as set forth in that certain letter agreement dated as of August 11,
1999 between the Agent and the Borrower.
(e) UNUSED FEE. From and after the date hereof until the earlier
of (i) the Maturity Date or (ii) the date on which the Commitments
terminate, the Borrower agrees to pay to the Agent, for the accounts of
the Banks in accordance with their respective Commitment Percentages, an
unused fee (the "Unused Fee") in an amount equal to (a) twenty hundredths
of one percent (0.20%) per annum of the Daily Unused Commitment, for each
day that the aggregate outstanding principal balance of all Revolving
Credit Loans is equal to or more than fifty percent (50%) of the Total
Commitment and (b) twenty-five hundredths of one percent (0.25%) per
annum of the Daily Unused Commitment, for each day that the aggregate
outstanding principal balance of all Revolving Credit Loans is less than
fifty percent (50%) of the Total Commitment, in each case calculated
during each calendar quarter (or portion thereof for the first calendar
quarter of the term of this Agreement and the last calendar quarter of
the term of this Agreement, if either of same is not a full calendar
quarter). The Unused Fee shall be payable quarterly in arrears on the
fifteenth (15th) day of each January, April, July and October for the
immediately preceding calendar quarter commencing on the first such date
following the Closing Date, with a final payment on the earlier of (i)
Maturity Date or (ii) any earlier date on which the Commitments shall
terminate.
(f) AGENT'S FEE. The Borrowers shall pay to the Agent an Agent's
fee as set forth in that certain letter agreement dated as of August 11,
1999 between the Agent and the Borrower.
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Section 2.4. REQUESTS FOR REVOLVING CREDIT LOANS. The
following provisions shall apply to each request by the Borrower for a Revolving
Credit Loan:
(a) The Borrower shall submit a Completed Loan Request to the
Agent. The Agent shall promptly deliver a duplicate copy of such
Completed Loan Request to each Bank which is then a party to this
Agreement at the time such loan request is made. Except as otherwise
provided herein, each Completed Loan Request shall be in a minimum
amount of (i) $250,000 if such Loan Request does not involve an
Acquisition Property or a New Eligible Property or (ii) $500,000 if
such Loan Request involves an Acquisition Property or a New Eligible
Property. Each Completed Loan Request shall be irrevocable and
binding on the Borrower and shall obligate the Borrower to accept
the Revolving Credit Loans requested from the Banks on the proposed
Drawdown Date, unless such Completed Loan Request is withdrawn (x)
in the case of a request for a LIBOR Rate Loan, at least five (5)
Business Days prior to the proposed Drawdown Date for such Revolving
Credit Loan, and (y) in the case of a request for a Base Rate Loan,
at least two (2) Business Days prior to the proposed Drawdown Date
for such Revolving Credit Loan.
(b) Each Completed Loan Request shall be delivered by the
Borrower to the Agent by 10:00 a.m. on any Business Day, and
(i) in the case of a loan request that does not
involve an Acquisition Property or a New Eligible Property,
such Completed Loan Request shall be provided at least one
(1) Business Day prior to the proposed Drawdown Date of any
Base Rate Loan, and at least two (2) LIBOR Business Days
prior to the proposed Drawdown Date of any LIBOR Rate Loan;
and
(ii) in the case of a loan request involving a
proposed Acquisition Property or Properties, a good faith
estimate of such loan request shall be provided at least
fifteen (15) Business Days prior to the proposed Drawdown
Date, with a Completed Loan Request to be provided at least
five (5) Business Days prior to the proposed Drawdown Date;
and
(iii) in the case of a loan request involving a
proposed New Eligible Property, a good faith estimate of
such loan request shall be provided at least thirty
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(30) days prior to the proposed Drawdown Date, with a
Completed Loan Request to be provided at least five (5)
Business Days prior to the proposed Drawdown Date.
(c) Each Completed Loan Request shall include:
(A) in the case of a loan request that does not
involve an Acquisition Property or a New Eligible Property,
a completed writing in the form of Exhibit D hereto
specifying: (1) the principal amount of the Revolving Credit
Loan requested, (2) the proposed Drawdown Date of such
Revolving Credit Loan, (3) the Interest Period applicable to
such Revolving Credit Loan, (4) the Type of such Revolving
Credit Loan being requested and (5) the purpose for which
such funds will be used (a "Completed Exhibit D"); and
(B) in the case of a loan request involving a
proposed Acquisition Property, (x) a Completed Exhibit D,
and (y) evidence that the proposed Acquisition Property
meets the following conditions (collectively, the
"Acquisition Conditions"):
(1) the proposed Acquisition Property
when aggregated with the other Real Estate Assets
would not violate the covenants contained in
ss.7(e); and
(2) the proposed Acquisition Property
does not have unperformed or unpaid remediation
costs that are not budgeted and part of a
remediation plan with costs estimates approved by
the Agent. The Completed Loan Request shall
include evidence that the Borrower has performed a
hazardous waste due diligence review of the
proposed Acquisition Property, and have attached
to it a copy of an environmental site assessment
report obtained by the Borrower in connection with
the proposed acquisition which contains sufficient
information to permit the above determination
regarding potential remediation costs or other
environmental liabilities to be made. Such
environmental site assessments shall be
satisfactory to the Agent in all respects and
shall be submitted to the Agent
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at least ten (10) Business Days prior to the
proposed Drawdown Date; and
(C) in the case of a loan request involving the
addition of a proposed New Eligible Property, (v) a
Completed Exhibit D, (w) evidence that the proposed New
Eligible Property meets the Acquisition Conditions, (x) all
of the documents and other information relating to the
proposed New Eligible Property required by the Eligible
Property Conditions, (y) evidence that the proposed New
Eligible Property does not have unperformed or unpaid
remediation costs that are not budgeted and part of a
remediation plan with costs estimates approved by the Agent,
and (z) evidence that the proposed New Eligible Property
when aggregated with the other Eligible Properties would not
violate the covenants contained in ss.7(e).
(d) No Bank shall be obligated to fund any Revolving Credit Loan
unless:
(i) a Completed Loan Request has been timely
received by the Agent as provided in subsection (b) above;
and
(ii) both before and after giving effect to the
Revolving Credit Loan to be made pursuant to the Completed
Loan Request, all of the conditions contained in ss.10 shall
have been satisfied as of the Closing Date and all of the
conditions set forth in ss.11 shall have been met,
including, without limitation, the condition under ss.11.1
that there be no Default or Event of Default under this
Agreement; and
(iii) the Agent shall have received a certificate
in the form of Exhibit E-1 hereto signed by the chief
financial officer of the Borrower (in his capacity as such
and not in his individual capacity) (copies of which shall
be delivered by the Agent promptly to the Banks) setting
forth computations evidencing compliance with the covenants
contained in ss.9 on a pro forma basis after giving effect
to such requested Revolving Credit Loan, and certifying that
to the best knowledge of such officer after due inquiry,
both before and after giving effect to such requested
Revolving Credit Loan, no Default or
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Event of Default exists or will exist under this Agreement
or any other Loan Document; and
(iv) in the case of a loan request not involving
an Acquisition Property or a New Eligible Property, the
proceeds of the Revolving Credit Loan are to be used for the
purposes and meet the conditions set forth in the Completed
Loan Request; and
(v) in the case of a loan request involving a
proposed Acquisition Property, the Acquisition Conditions
have been met; and
(vi) in the case of a loan request involving the
acquisition of an Acquisition Property and its proposed
inclusion as a New Eligible Property, the Eligible Property
Conditions and the Acquisition Conditions have been met.
Section 2.5. CONVERSION OPTIONS.
------------------
(a) The Borrower may elect from time to time to convert any
outstanding Revolving Credit Loan to a Revolving Credit Loan of
another Type, provided that (i) with respect to any such conversion
of a LIBOR Rate Loan to a Base Rate Loan, such conversion shall take
place automatically at the end of the applicable Interest Period
unless the Borrower provides notice to the Agent of its request to
continue such Revolving Credit Loan as a LIBOR Rate Loan as provided
in ss.2.5(b) and ss.2.5(a)(ii); (ii) subject to the further proviso
at the end of this ss.2.5(a) and subject to ss.2.5(b) and 2.5(d),
with respect to any conversion of a Base Rate Loan to a LIBOR Rate
Loan (or a continuation of a LIBOR Rate Loan, as provided in
ss.2.5(b)), the Borrower shall give the Agent at least three (3)
LIBOR Business Days' prior written notice of such election, which
such notice must be received by the Agent by 10:00 a.m. on any
Business Day; and (iii) no Revolving Credit Loan may be converted
into a LIBOR Rate Loan when any Default or Event of Default has
occurred and is continuing. The Agent shall provide each Bank with a
copy of such notice promptly after its receipt thereof. All or any
part of outstanding Revolving Credit Loans of any Type may be
converted as provided herein, provided that each Conversion Request
relating to the conversion of a Base Rate Loan to a LIBOR Rate Loan
shall be for an amount equal to $250,000 or an integral multiple of
$50,000 in excess thereof and shall be irrevocable by the Borrower.
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(b) Any Revolving Credit Loan of any Type may be continued as
such upon the expiration of the Interest Period with respect thereto
(i) in the case of Base Rate Loans, automatically and (ii) in the
case of LIBOR Rate Loans by compliance by the Borrower with the
notice provisions contained in ss.2.5(a)(ii); provided that no LIBOR
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 first Interest Period relating
thereto ending during the continuance of any Event of Default. The
Agent shall notify the Banks promptly when any such automatic
conversion contemplated by this ss.2.5(b) is scheduled to occur.
(c) In the event that the Borrower does not notify the Agent of
its election hereunder with respect to any Revolving Credit Loan,
such Revolving Credit Loan shall be automatically converted to a
Base Rate Loan at the end of the applicable Interest Period.
(d) The Borrower may not request or elect a LIBOR Rate Loan
pursuant to ss.2.4, elect to convert a Base Rate Loan to a LIBOR
Loan pursuant to ss.2.5(a) or elect to continue a LIBOR Rate Loan
pursuant to ss.2.5(b) if, after giving effect thereto, there would
be greater than five (5) LIBOR Rate Loans then outstanding. Any
Revolving Credit Loan Request for a LIBOR Rate Loan that would
create greater than five (5) LIBOR Rate Loans outstanding shall be
deemed to be a Loan Request for a Base Rate Loan.
Section 2.6. FUNDS FOR REVOLVING CREDIT LOANS.
--------------------------------
(a) Subject to the other provisions of this ss.2, not later than
11:00 a.m. on the proposed Drawdown Date of any Revolving Credit
Loans, each of the Banks will make available to the Agent, at its
Head Office, in immediately available funds, the amount of such
Bank's Commitment Percentage of the amount of the requested
Revolving Credit Loan. Upon receipt from each Bank of such amount,
the Agent will make available to the Borrower the aggregate amount
of such Revolving Credit Loan made available to the Agent by the
Banks; all such funds received by the Agent by 11:00 a.m. on any
Business Day will be made available to the Borrower not later than
2:00 p.m. on the same Business Day. Funds received after such time
will be made available by not later than 11:00 a.m. on the next
Business Day. 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
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Percentage of the requested Revolving Credit Loan shall not relieve
any other Bank from its several obligation hereunder to make
available to the Agent the amount of its Commitment Percentage of
any requested Revolving Credit Loan but in no event shall the Agent
(in its capacity as Agent) have any obligation to make any funding
or shall any Bank be obligated to fund more than its Commitment
Percentage of the requested Revolving Credit Loan or to increase its
Commitment Percentage on account of such failure or otherwise.
(b) The Agent may, unless notified to the contrary by any Bank
prior to a Drawdown Date, assume that such Bank has made available
to the Agent on such Drawdown Date the amount of such Bank's
Commitment Percentage of the Revolving Credit Loan to be made on
such Drawdown Date, and the Agent may (but it shall not be required
to), in reliance upon such assumption, make available to the
Borrower a corresponding amount. If any Bank makes available to the
Agent such amount on a date after such Drawdown Date, such Bank
shall pay to the Agent on demand an amount equal to the product of
(i) the average, computed for the period referred to in clause (iii)
below, of the weighted average interest rate paid by the Agent for
federal funds acquired by the Agent during each day included in such
period, multiplied by (ii) the amount of such Bank's Commitment
Percentage of such Revolving Credit Loan, multiplied by (iii) a
fraction, the numerator of which is the number of days that elapsed
from and including such Drawdown Date to the date on which the
amount of such Bank's Commitment Percentage of such Revolving Credit
Loan shall become immediately available to the Agent, and the
denominator of which is 365. A statement of the Agent submitted to
such Bank with respect to any amounts owing under this paragraph
shall be prima facie evidence of the amount due and owing to the
Agent by such Bank.
Section 3. REPAYMENT OF THE REVOLVING CREDIT LOANS.
---------------------------------------
Section 3.1. MATURITY. The Borrower promises to pay on the
Maturity Date, and there shall become absolutely due and payable on the Maturity
Date, all unpaid principal of the Revolving Credit Loans outstanding on such
date, together with any and all accrued and unpaid interest thereon, the unpaid
balance of any fees accrued through such date, and any and all other unpaid
amounts due under this Agreement, the Revolving Credit Notes or any other of the
Loan Documents.
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Section 3.2. OPTIONAL REPAYMENTS OF REVOLVING CREDIT LOANS.
The Borrower shall have the right, at its election, to prepay the outstanding
amount of the Revolving Credit Loans, in whole or in part, at any time without
penalty or premium; provided that the outstanding amount of any LIBOR Rate Loans
may not be prepaid unless the Borrower pays all amounts due and payable under
ss.4.8 hereof for each LIBOR Rate Loan so prepaid at the time of such
prepayment. The Borrower shall give the Agent, no later than 10:00 a.m., at
least five (5) Business Days prior written notice of any prepayment pursuant to
this ss.3.2 of any Revolving Credit Loans, specifying the proposed date of
prepayment of Revolving Credit Loans and the principal amount to be prepaid. The
Agent shall provide each Bank with a copy of such notice promptly after its
receipt thereof. Each such partial prepayment of the Revolving Credit Loans
shall be a minimum of $100,000, or, if less, the outstanding balance of the
Revolving Credit Loans then being repaid, shall be accompanied by the payment of
all charges outstanding on all Revolving Credit Loans so prepaid and of all
accrued interest on the principal prepaid to the date of payment, and 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 LIBOR Rate Loans, at the Agent's
option.
Section 3A. LETTER OF CREDIT FACILITY.
Section 3A.1. ISSUANCE OF LETTERS OF CREDIT COMMITMENTS.
(a) Agent's Discretion to Issue Letters of Credit. Subject to
the terms and conditions hereof and the execution and delivery by
the Borrower of a letter of credit application on the Agent's
customary form (a "Letter of Credit Application"), the Agent on
behalf of the Banks and in reliance upon the agreement of the Banks
set forth in ss.3A.1(c) and upon the representations and warranties
of the Borrower contained herein, may in its sole discretion, in its
capacity as a Bank, issue, extend and renew for the account of the
Borrower one or more letters of credit (individually, a "Letter of
Credit"), in such form as may be requested from time to time by the
Borrower and agreed to by the Agent; provided, however, that, after
giving effect to such request, (a) the sum of the aggregate Maximum
Drawing Amount and all Unpaid Reimbursement Obligations shall not
exceed $5,000,000 at any one time and (b) the sum of (i) the Maximum
Drawing Amount on all Letters of Credit, (ii) all Unpaid
Reimbursement Obligations, and (iii) the amount of all Revolving
Credit Loans outstanding shall not
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exceed the lesser of (A) the Total Commitment and (B) the Borrowing
Base.
(b) Letter of Credit Applications. Each Letter of Credit
Application shall be completed to the satisfaction of the Agent. In
the event that any provision of any Letter of Credit Application
shall be inconsistent with any provision of this Credit Agreement,
then the provisions of this Credit Agreement shall, to the extent of
any such inconsistency, govern.
(c) Terms of Letters of Credit. Each Letter of Credit issued,
extended or renewed hereunder shall, among other things (i) provide
for the payment of sight drafts for honor thereunder when presented
in accordance with the terms thereof and when accompanied by the
documents described therein, and (ii) have an expiry date no later
than the date which is fourteen (14) days (or, if the Letter of
Credit is confirmed by a confirmer or otherwise provides for one or
more nominated persons, forty-five (45) days) prior to the Maturity
Date. Each Letter of Credit so issued, extended or renewed shall be
subject to the Uniform Customs or, in the case of a standby Letter
of Credit, either the Uniform Customs or the International Standby
Practices.
(d) Reimbursement Obligations of Banks. Each Bank severally
agrees that it shall be absolutely liable, without regard to the
occurrence of any Default or Event of Default or any other condition
precedent whatsoever, to the extent of such Bank's Commitment
Percentage, to reimburse the Agent on demand for the amount of each
draft paid by the Agent under each Letter of Credit to the extent
that such amount is not reimbursed by the Borrower pursuant to
ss.3A.2 (such agreement for a Bank being called herein the "Letter
of Credit Participation" of such Bank).
(e) Participations of Banks. Each such payment made by a Bank
shall be treated as the purchase by such Bank of a participating
interest in the Borrower's Reimbursement Obligation under ss.3A.2 in
an amount equal to such payment. Each Bank shall share in accordance
with its participating interest in any interest which accrues
pursuant to ss.3A.2.
Section 3A.2. REIMBURSEMENT OBLIGATION OF THE BORROWER. In
order to induce the Agent to issue, extend and renew each Letter of Credit and
the Banks to participate therein, the Borrower hereby agrees to reimburse or pay
to the Agent, for the account of the Agent or (as the case
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may be) the Banks, with respect to each Letter of Credit issued, extended or
renewed by the Agent hereunder:
(a) except as otherwise expressly provided in ss.3A.2(b) and
(c), on each date that any draft presented under the Letter of
Credit is honored by the Agent, or the Agent otherwise makes a
payment with respect thereto, (i) the amount paid by the Agent under
or with respect to such Letter of Credit, and (ii) the amount of any
taxes, fees, charges or other costs and expenses whatsoever incurred
by the Agent or any Bank in connection with any payment made by the
Agent or any Bank under, or with respect to, such Letter of Credit;
(b) upon any reduction (but not termination) of the Total
Commitment to an amount less than the Maximum Drawing Amount, an
amount equal to such difference, which amount shall be held by the
Agent for the benefit of the Banks and the Agent as cash collateral
for all Reimbursement Obligations; and
(c) upon the termination of the Total Commitment, or the
acceleration of the Reimbursement Obligations with respect to all
Letters of Credit in accordance with ss.12 of the Credit Agreement,
an amount equal to the then Maximum Drawing Amount on all Letters of
Credit, which amount shall be held by the Agent for the benefit of
the Banks and the Agent as cash collateral for all Reimbursement
Obligations.
Each such payment shall be made to the Agent at the Agent's Head
Office in immediately available funds. Interest on any and all
amounts remaining unpaid by the Borrower under this ss.3A.2 at any
time from the date such amounts become due and payable (whether as
stated in this ss.3A.2, by acceleration or otherwise) until payment
in full (whether before or after judgment) shall be payable to the
Agent on demand at the rate specified in ss.4.9 for overdue
principal on the Revolving Credit Loans.
Section 3A.3. LETTER OF CREDIT PAYMENTS. If any draft shall
be presented or other demand for payment shall be made under any Letter of
Credit, the Agent shall notify the Borrower of the date and amount of the draft
presented or demand for payment and of the date and time when it expects to pay
such draft or honor such demand for payment. If the Borrower fails to reimburse
the Agent as provided in ss.3A.2 on or before the date that such draft is paid
or other payment is made by the Agent, the Agent may at any time thereafter
notify the Banks of the amount of any such Unpaid Reimbursement Obligation. No
later than 3:00 p.m. (Rhode Island time) on the Business Day next following the
receipt of such
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notice, each Bank shall make available to the Agent, at the Agent's Head Office,
in immediately available funds, such Bank's Commitment Percentage of such Unpaid
Reimbursement Obligation, together with an amount equal to the product of (i)
the average, computed for the period referred to in clause (iii) below, of the
weighted average interest rate paid by the Agent for federal funds acquired by
the Agent during each day included in such period, times (ii) the amount equal
to such Bank's Commitment Percentage of such Unpaid Reimbursement Obligation,
times (iii) a fraction, the numerator of which is the number of days that elapse
from and including the date the Agent paid the draft presented for honor or
otherwise made payment to the date on which such Bank's Commitment Percentage of
such Unpaid Reimbursement obligation shall become immediately available to the
Agent, and the denominator of which is 360. The responsibility of the Agent to
the Borrower and the Banks shall be only to determine that the documents
(including each draft) delivered under each Letter of Credit in connection with
such presentment shall be in conformity in all material respects with such
Letter of Credit.
Section 3A.4. OBLIGATIONS ABSOLUTE. The Borrower's
obligations under this ss.3A shall be absolute and unconditional under any and
all circumstances and irrespective of the occurrence of any Default or Event of
Default or any condition precedent whatsoever or any setoff, counterclaim or
defense to payment which the Borrower may have or have had against the Agent,
any Bank or any beneficiary of a Letter of Credit. The Borrower further agrees
with the Agent and the Banks that the Agent and the Banks shall not be
responsible for, and the Borrower's Reimbursement Obligations under ss.3A.2
shall not be affected by, among other things, the validity or genuineness of
documents or of any endorsements thereon, even if such documents should in fact
prove to be in any or all respects invalid, fraudulent or forged, or any dispute
between or among the Borrower, the beneficiary of any Letter of Credit or any
financing institution or other party to which any Letter of Credit may be
transferred or any claims or defenses whatsoever of the Borrower against the
beneficiary of any Letter of Credit or any such transferee. The Agent and the
Banks shall not be liable for any interruption or delay in transmission,
dispatch or delivery of any message or advice, however transmitted, in
connection with any Letter of Credit. The Borrower agrees that any action taken
or omitted by the Agent or any Bank under or in connection with each Letter of
Credit and the related drafts and documents, if done in good faith, shall be
binding upon the Borrower and shall not result in any liability on the part of
the Agent or any Bank to the Borrower.
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Section 3A.5. RELIANCE BY ISSUER. To the extent not
inconsistent with ss.3A.4, the Agent shall be entitled to rely, and shall be
fully protected in relying upon, any Letter of Credit, draft, writing,
resolution, notice, consent, certificate, affidavit, letter, cablegram,
telegram, telecopy, telex or teletype message, statement, order or other
document believed by it to be genuine and correct and to have been signed, sent
or made by the proper Person or Persons and upon advice and statements of legal
counsel, independent accountants and other experts selected by the Agent. The
Agent shall be fully justified in failing or refusing to take any action under
this Agreement unless it shall first have received such advice or concurrence of
the Majority Banks as it reasonably deems appropriate or it shall first be
indemnified to its reasonable satisfaction by the Banks against any and all
liability and expense which may be incurred by it by reason of taking or
continuing to take any such action. The Agent shall in all cases be fully
protected in acting, or in refraining from acting, under this Agreement in
accordance with a request of the Majority Banks, and such request and any action
taken or failure to act pursuant thereto shall be binding upon the Banks and all
future holders of the Revolving Credit Notes or of a Letter of Credit
Participation.
Section 3A.6. LETTER OF CREDIT FEE. The Borrower shall, on
the date of issuance or any extension or renewal of any Letter of Credit pay a
fee (in each case, a "Letter of Credit Fee") to the Agent in an amount equal to
two percent (2.00%) per annum (or such other amount mutually acceptable to the
Borrower, the Agent and the Banks) of the face amount of the Letter of Credit,
of which an amount equal to one-quarter of one percent (0.25%) per annum of the
face amount of the Letter of Credit shall be for the account of the Agent, as a
fronting fee, and the balance of which Letter of Credit Fee shall be for the
accounts of the Banks in accordance with their respective Commitment
Percentages. In respect of each Letter of Credit, the Borrower shall also pay to
the Agent for the Agent's own account, at such other time or times as such
charges are customarily made by the Agent, the Agent's customary issuance,
amendment, negotiation or document examination and other administrative fees as
in effect from time to time.
Section 4. CERTAIN GENERAL PROVISIONS.
--------------------------
Section 4.1. FUNDS FOR PAYMENTS.
(a) All payments of principal, interest, 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
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or (as the case may be) the Agent, at the Agent's Head Office, in
each case in Dollars and in immediately available funds.
(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
liens, 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 shall 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 to receive the same net amount which the Banks 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. The Agent shall provide
each Bank with a copy of such notice promptly after its receipt
thereof.
(c) The Agent and the Banks acknowledge that the Borrower will
establish a demand deposit account with the Agent and intends to
deposit into such account on a monthly basis an amount not less than
the amount of interest due and payable during such month. Without
limiting anything set forth herein, the Agent shall be entitled to
charge such account of the Borrower with the Bank for any sum due
and payable by the Borrower hereunder or under any of the other Loan
Documents. Notwithstanding anything to the contrary contained herein
or in any other Loan Document, if, on any date that a payment is due
to the Agent or the Banks under the Loan Documents, there are
sufficient funds in such account to make such payment and there is
no legal impediment of any kind to Agent's effecting such payment by
debiting such account, then Borrower shall have no obligation to
make such payment (other than by way of Agent's debiting such
account in accordance with the above provisions of this paragraph
(c)) and no late charge or default rate interest shall accrue, and
no Event of Default shall result, from
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Borrower's failure to make such payment while such sufficient funds
remain in such account to make such payment.
Section 4.2. COMPUTATIONS. All computations of interest on
the Revolving Credit Loans and of commitment or other similar fees (if any) 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 LIBOR 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 Revolving Credit Loans as reflected on the Revolving
Credit Note Record from time to time shall constitute prima facie evidence of
the principal amount thereof.
Section 4.3. INABILITY TO DETERMINE LIBOR RATE. In the
event, prior to the commencement of any Interest Period relating to any LIBOR
Rate Loan, the Agent shall reasonably determine that adequate and reasonable
methods do not exist for ascertaining the LIBOR Rate that would otherwise
determine the rate of interest to be applicable to any LIBOR Rate Loan during
any Interest Period (and the rate of interest applicable to all indebtedness due
and owing to the Agent by any Person to the extent that the principal amount of
such indebtedness was intended to bear interest at the LIBOR Rate), the Agent
shall forthwith give notice of such determination (which shall be conclusive and
binding on the Borrower) to the Borrower and the Banks. In such event (a) any
Completed Loan Request with respect to LIBOR Rate Loans shall be automatically
withdrawn and shall be deemed a request for Base Rate Loans, (b) each LIBOR Rate
Loan will automatically, on the last day of the then current Interest Period
thereof, become a Base Rate Loan, and (c) the obligations of the Banks to make
LIBOR Rate Loans shall be suspended until the Agent reasonably determines that
the circumstances giving rise to such suspension no longer exist, whereupon the
Agent shall so notify the Borrower and the Banks.
Section 4.4. ILLEGALITY. Notwithstanding any other
provisions herein, if any present or future law, regulation, treaty or directive
or in the interpretation or application thereof shall make it unlawful for any
Bank to make or maintain LIBOR Rate Loans, such Bank shall forthwith give notice
of such circumstances to the Borrower and thereupon (a) the Commitment of such
Bank to make LIBOR Rate Loans or convert Base Rate Loans to LIBOR Rate Loans
shall forthwith be suspended and (b) such Bank's Commitment Percentage of a
LIBOR Rate Loans then
-17-
outstanding shall be converted automatically to Base Rate Loans on the last day
of each Interest Period applicable to such LIBOR Rate Loans or within such
earlier period as may be required by law, all until such time as it is no longer
unlawful for such Bank to make or maintain LIBOR Rate Loans. The Borrower hereby
agrees promptly to pay the Agent for the account of such Bank, upon demand, any
additional amounts necessary to compensate such Bank for any out-of-pocket costs
incurred by such Bank in making any conversion required by this ss.4.4 prior to
the last day of an Interest Period with respect to a LIBOR Rate Loan, including
any interest or fees payable by such Bank to lenders of funds obtained by it in
order to make or maintain its LIBOR Rate Loans hereunder.
Section 4.5. ADDITIONAL COSTS, ETC. If any present or future
applicable law, which expression, as used herein, includes statutes, rules and
regulations thereunder and interpretations thereof by any competent court or by
any governmental or other regulatory body or official 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 by any central bank or other fiscal, monetary or
other authority (whether or not having the force of law, but if not having the
force of law, then generally applied by the Banks with respect to similar
loans), shall:
(a) subject any Bank 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 or the
Revolving Credit Loans (other than taxes based upon or measured by
the income or profits of such Bank), or
(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 Revolving Credit Loans or any
other amounts payable to the Agent or any Bank under this Agreement
or the other Loan Documents, or
(c) impose or increase or render applicable (other than to the
extent specifically provided for elsewhere in this Agreement) 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 commitments of an office of any Bank, or
(d) impose on any Bank any other conditions or requirements with
respect to this Agreement, the other Loan Documents, the Revolving
Credit Loans, such Bank's Commitment,
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or any class of loans or commitments of which any of the Revolving
Credit Loans or such Bank's Commitment forms a part;
and the result of any of the foregoing is
(i) to increase the cost to such Bank of making,
funding, issuing, renewing, extending or maintaining any of
the Revolving Credit Loans, any Letter of Credit or such
Bank's Commitment, or
(ii) to reduce the amount of principal, interest
or other amount payable to such Bank hereunder on account of
such Bank's Commitment or any of the Revolving Credit Loans
or any Letter of Credit, or
(iii) to require such Bank 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 from the Borrower
hereunder,
then, and in each such case, the Borrower will, upon demand made
by such Bank at any time and from time to time and as often as the
occasion therefor may arise, pay to such Bank such additional
amounts as such Bank shall determine in good faith to be sufficient
to compensate such Bank for such additional cost, reduction, payment
or foregone interest or other sum, provided that such Bank is
generally imposing similar charges on its other similarly situated
borrowers.
Section 4.6. CAPITAL ADEQUACY. If any future law,
governmental rule, regulation, policy, guideline or directive (whether or not
having the force of law, but if not having the force of law, then generally
applied by the Banks with respect to similar loans) or the interpretation
thereof by a court or governmental authority with appropriate jurisdiction
affects the amount of capital required or expected to be maintained by banks or
bank holding companies and any Bank or the Agent determines that the amount of
capital required to be maintained by it is increased by or based upon the
existence of Revolving Credit Loans made or deemed to be made pursuant hereto,
then such Bank or the Agent may notify the Borrower of such fact, and the
Borrower shall pay to such Bank or the Agent from time to time on demand, as an
additional fee payable hereunder, such amount as such Bank or the Agent shall
determine in good faith and certify in a notice to the Borrower to be an amount
that will adequately compensate such Bank in light of these circumstances for
its increased costs of
-19-
maintaining such capital. Each Bank and the Agent shall allocate such cost
increases among its customers in good faith and on an equitable basis, and will
not charge the Borrower unless it is generally imposing a similar charge on its
other similarly situated borrowers.
Section 4.7. CERTIFICATE. A certificate setting forth any
additional amounts payable pursuant to ss.ss.4.5 or 4.6 and a brief explanation
of such amounts which are due, submitted by any Bank or the Agent to the
Borrower, shall be prima facie evidence that such amounts are due and owing.
Section 4.8. INDEMNITY. In addition to the other provisions
of this Agreement regarding such matters, the Borrower agrees to indemnify the
Agent and each Bank and to hold the Agent and each Bank harmless from and
against any loss, cost or expense (but excluding any loss of anticipated
profits) that the Agent or such Bank may sustain or incur as a consequence of
(a) the failure by the Borrower to pay any principal amount of or any interest
on any LIBOR Rate Loans as and when due and payable, including any such loss or
expense arising from interest or fees payable by the Agent or such Bank to
lenders of funds obtained by it in order to maintain its LIBOR Rate Loans, (b)
the failure by the Borrower to make a borrowing or conversion after the Borrower
has given a Completed Loan Request for a LIBOR Rate Loan or a Conversion Request
for a LIBOR Rate Loan, and (c) the making of any payment of a LIBOR Rate Loan or
the making of any conversion of any such Revolving Credit Loan to a Base Rate
Loan on a day that is not the last day of the applicable Interest Period with
respect thereto, including interest or fees payable by the Agent or a Bank to
lenders of funds obtained by it in order to maintain any such LIBOR Rate Loans.
Section 4.9. INTEREST ON OVERDUE AMOUNTS. Overdue principal
and (to the extent permitted by applicable law) interest on the Revolving Credit
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 principal (other than
principal due on the Maturity Date) and/or interest charges on the Revolving
Credit Loans which is not paid within ten (10) days of the date when due.
Section 5. BORROWING BASE.
--------------
Section 5.1. ADDITIONS AND REPLACEMENTS TO ELIGIBLE
PROPERTIES. From time to time during the term of the Revolving
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Credit Loans, due to the fact that the Borrower may wish to enter into financial
transactions involving certain Eligible Properties, or for other reasons, the
Borrower may request in writing to the Banks to replace or add to the Eligible
Properties to be used in calculating the Borrowing Base. Any such request for
replacement or addition may be approved by the Agent, which approval may be
given or withheld by the Agent in its sole discretion, as hereinafter provided.
The Agent shall approve or deny such request in writing within thirty (30) days
of receipt, provided that the Agent has received, at the time such request is
made, all of the information regarding the Real Estate Asset proposed to be
added to the Eligible Properties to be used in calculating the Borrowing Base
required by the Eligible Property Conditions. Any property so approved by the
Agent as a replacement of or addition to the Eligible Properties (a "New
Eligible Property") shall thereafter be included in computing the Borrowing
Base. The Borrower shall reimburse the Agent for its reasonable costs and
expenses (including reasonable attorneys' fees and expenses of the Agent's
counsel) in evaluating the proposed New Eligible Property. Without in any way
limiting the absolute discretion of the Agent to approve or deny any request to
include a property as a New Eligible Property, before a property shall become a
New Eligible Property, the Borrower shall have, in any case, satisfied each of
the following conditions (the "Additional Eligible Property Conditions"):
(a) The Acquisition Conditions have been met with respect to the
Property (whether or not the proposed New Eligible Property is then
owned by the Borrower or an Additional Guarantor or is a proposed
Acquisition Property);
(b) The Borrower or an Additional Guarantor (as applicable)
shall satisfy, with respect to the proposed New Eligible Property,
to the satisfaction of the Agent (in its sole discretion), each of
the Eligible Property Conditions with respect to each New Eligible
Property;
(c) No Default or Event of Default shall exist under this
Agreement or any other Loan Document at the time of any acceptance
of a New Eligible Property, unless such Default or Event of Default
would be cured thereby and the Borrower shall have delivered a
compliance certificate in the form of Exhibit E-2 to the Agent (with
copies for each Bank) to such effect;
(d) The New Eligible Property shall be 100% owned in fee simple
by the Borrower or an Additional Guarantor (as applicable) and the
title thereof shall be unencumbered by any mortgage, deed
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of trust, security agreement or other lien (whether voluntary or
involuntary) except for liens permitted by Section 8(b)(v) hereof;
and
(e) The Agent shall, in its sole discretion, have approved in
writing the addition of the property as a New Eligible Property for
inclusion in the Borrowing Base.
Section 5.2. REMOVAL FROM ELIGIBLE PROPERTIES. From time to
time during the term of the Revolving Credit Loans, due to the fact that the
Borrower may wish to enter into financial transactions involving certain
Eligible Properties, or for other reasons, the Borrower may request in writing
that the Banks allow the Borrower to remove an Eligible Property from being used
in calculating the Borrowing Base. The Agent shall approve or deny such request
in writing within thirty (30) days of receipt. If within such thirty-day period
the Agent does not approve or deny the removal and if all of the conditions set
forth in clauses (i) and (ii) below have been and remain satisfied, then such
removal shall be deemed approved. The Borrower shall reimburse the Agent for its
reasonable costs and expenses (including reasonable attorneys' fees and expenses
of the Agent's counsel) in evaluating the proposed removal. The Agent shall
approve the removal so long as: (i) the Borrower demonstrates to the Agent that
any such removal shall in no way affect any of the Borrower's representations,
warranties, or covenants hereunder, including, but not limited to, the
Borrower's covenants regarding the Borrowing Base, and (ii) no Default or Event
of Default shall have occurred and be continuing hereunder.
Section 5.3. RECOURSE OBLIGATIONS. Notwithstanding the
foregoing, the Obligations are full recourse obligations of the Borrower, the
Guarantor and the Additional Guarantors and all of their respective assets and
properties shall be available for the payment in full in cash and performance of
the Obligations.
Section 6. REPRESENTATIONS AND WARRANTIES. The Borrower and the
Guarantor represent and warrant to the Agent and the Banks on the date hereof,
on the date of any Revolving Loan Request, and on each Drawdown Date of any
Revolving Credit Loan that: (a) each of the Borrower, the Guarantor and each
Additional Guarantor is duly formed or organized, validly existing, and in good
standing under the laws of its jurisdiction of organization and is duly
qualified and in good standing in every other jurisdiction where it is required
to be so qualified, and the execution, delivery and performance by each of the
Borrower, the Guarantor and each Additional Guarantor of the Loan Documents (i)
are
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within its trust, partnership, limited liability company or corporate authority,
(ii) have been duly authorized, (iii) do not conflict with or contravene its
Charter Documents; (b) the outstanding equity of the Borrower on the date hereof
is comprised of a general partner interest and limited partner interests, all of
which have been duly issued and are outstanding and fully paid and, with respect
to limited partner interests, nonassessable, all as set forth in Schedule 6(b)
hereto; (c) each of the direct or indirect interests of the Borrower in any
Partially-Owned Real Estate Holding Entity is set forth on Schedule 6(c) hereto
(as updated from time to time in accordance with the terms hereof), including
the type of entity in which the interest is held, the percentage interest owned
by the Borrower in such entity, the capacity in which the Borrower holds the
interest, and the Borrower's ownership interest therein; provided, that the
Borrower agrees to update (at the end of each calendar quarter) such Schedule
6(c) in connection with any additional Investment in any Partially-Owned Real
Estate Holding Entity after the date hereof that is permitted by the terms
hereof; (d) upon execution and delivery thereof, each Loan Document shall
constitute the legal, valid and binding obligation of the Borrower, the
Guarantor or the Additional Guarantors, as the case may be, enforceable in
accordance with its terms; (e) each of the Borrower, the Guarantor and each
Additional Guarantor has good and marketable title to all Eligible Properties
and other material properties, subject only to Permitted Liens and possesses or
has the legal right to use all assets, including intellectual properties,
franchises and Consents adequate for the conduct of its business as now
conducted, without known conflict with any rights of others; (f) the Borrower
has provided to the Agent and the Banks its unaudited pro forma Financials as of
December 31, 1998 and for the period then ended, and such pro forma Financials
are complete and correct in all material respects and have been prepared in
accordance with GAAP consistently applied; (g) since December 31, 1998, there
has been no materially adverse change of any kind in the Borrower which would
have a Materially Adverse Effect; (h) the Guarantor has provided to the Agent
and the Banks (i) the pro forma condensed consolidated balance sheet of the
Guarantor and its Subsidiaries (including, without limitation, the Borrower) as
of December 31, 1998 and their related consolidated statements of operations for
the fiscal year ended December 31, 1998 and (ii) the SEC Filings which contain a
summary of information relating to the Real Estate Assets and such information
is true and correct in all material respects; (i) since December 31, 1998, there
has been no materially adverse change of any kind in the Guarantor which would
have a Materially Adverse Effect; (j) each Additional Guarantor has delivered to
the Agent and the Banks its unaudited operating statements as at December 31,
1998 and for the period then ended and such operating statements are complete
and correct
-23-
in all material respects; (k) since December 31, 1998, there has been no
materially adverse change of any kind in any Additional Guarantor which would
have a Materially Adverse Effect; (l) there are no legal or other proceedings or
investigations pending or, to the best knowledge of the Borrower, the Guarantor
or any Additional Guarantor, threatened against the Borrower, the Guarantor or
such Additional Guarantor before any court, tribunal or regulatory authority
which would, if adversely determined, alone or together, have a Materially
Adverse Effect; (m) the execution, delivery, performance of its obligations, and
exercise of its rights under the Loan Documents by the Borrower, the Guarantor
and each Additional Guarantor, including borrowing under this Agreement (i) to
the best knowledge of the Borrower and the Guarantor after due inquiry, do not
require any Consents; and (ii) are not and will not be in conflict with or
prohibited or prevented by (A) any Requirement of Law, (B) any Charter Document,
trust minute or resolution, or (C) in any material respect, instrument,
agreement or provision thereof, in each case binding on the Borrower, the
Guarantor or any Additional Guarantor or affecting any property of the Borrower,
the Guarantor or any Additional Guarantor; (n) neither the Guarantor, the
Borrower nor any Additional Guarantor is in violation of (A) any Charter
Document, trust minute or resolution, (B) any instrument or agreement, in each
case binding on it or affecting its property, or (C) any Requirement of Law, in
a manner which could have a Materially Adverse Effect, including, without
limitation, all applicable federal and state tax laws, ERISA and Environmental
Laws; (o) none of the Eligible Properties shall be subject to or encumbered by
any mortgage, deed of trust, security agreement, lien or encumbrance of any
kind, except for Permitted Liens; (p) except as set forth on Schedule 6(p)
attached hereto and other Investments expressly permitted by the terms hereof,
neither the Guarantor nor the Borrower has any Subsidiaries and is not a party
to any partnership or joint venture; (q) the Guarantor qualifies and has not
taken any action that would prevent it from qualifying as a REIT pursuant to
ss.856-860 of the Code and the related regulations for its tax year ended
December 31, 1998 and all subsequent years during the term of the Revolving
Credit Loans; (r) the Borrower has provided the Agent on behalf of the Banks
with Lease Summaries and information packages regarding each of the Eligible
Properties, and such information packages fairly represent the position of each
of the Eligible Properties on the date hereof or as of the date of delivery
thereof (if applicable); (s) neither the Borrower, the Guarantor or any of their
respective Subsidiaries is 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; and (t) no security of the
Guarantor traded on a National Securities Exchange has been suspended from
trading or de-listed, except that the
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securities of the Guarantor may have been suspended from trading for brief
periods of time due to various public offerings of the securities of the
Guarantor.
Section 7. AFFIRMATIVE COVENANTS. The Borrower and the Guarantor
jointly and severally agree that until the termination of the Commitment and the
payment and satisfaction in full of all the Obligations, the Borrower and the
Guarantor will comply with their respective obligations as set forth throughout
this Agreement and will, and will cause each of their respective Subsidiaries
to:
(a) furnish the Agent on behalf of the Banks: (i) as soon as
available but in any event within ninety (90) days after the close
of each fiscal year, the Guarantor's audited Financials for such
fiscal year, certified by the Guarantor's accountants; (ii) within
ninety (90) days after the close of each fiscal year (or
contemporaneously with the filing thereof with the SEC), the Form
10-K (or with respect to the 1998 fiscal year of the Guarantor, the
Form 10-K) filed by the Guarantor with the SEC with respect to such
fiscal year; (iii) as soon as available but in any event within
forty-five (45) days after the end of each fiscal quarter of the
Guarantor, the Guarantor's unaudited financials with respect to such
fiscal quarter; (iv) as soon as available but in any event within
forty-five (45) days after the end of each fiscal quarter of the
Guarantor the Form 10-Q statement (or with respect to the 1998
fiscal year of the Guarantor, the Form 10-QSB statement) filed by
the Guarantor with the SEC with respect to such fiscal quarter, (v)
together with the quarterly unaudited and annual audited Financials,
a certificate of the Borrower and the Guarantor (in substantially
the form attached to Exhibit E-3 hereto) setting forth computations
demonstrating compliance with the Borrower's and the Guarantor's
financial covenants set forth in ss.9 hereof, and certifying that no
Default or Event of Default has occurred, or if it has, the actions
taken by the Borrower or the Guarantor with respect thereto; (vi)
contemporaneously with the filing, mailing or issuances thereof,
copies of all material of a financial nature filed with the SEC or
sent to the owners/stockholders or partners of the Guarantor or the
Borrower and copies of all press and news releases made by the
Borrower, the Guarantor or any Additional Guarantor; (vii) promptly
after its receipt thereof, annual financial information regarding
commercial tenants in the Eligible Properties as applicable and
available and (viii) if a Default or an Event of Default or a
materially adverse change in any of the Eligible Properties shall
have occurred, Appraisals (or updates thereof if
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required) of the Eligible Properties within thirty (30) days after
the request of the Agent therefor; (ix) from time to time, upon the
request of the Agent or the Bank, operating statements for all
Eligible Properties, in form and substance reasonably satisfactory
to the Agent or Banks, as applicable; (x) evidence as may be
required by the Agent or the Banks with regard to the Guarantor's
compliance with its status as a REIT, in form and substance
reasonably satisfactory to the Agent or Banks, as applicable; (xi)
from time to time, upon request of the Agent or the Banks, such
other financial data and information about the Borrower, the
Guarantor, the Additional Guarantors, their respective Subsidiaries,
the Real Estate Assets and as the Agent may reasonably request, and
which is prepared by such Person in the normal course of its
business or is required for securities and tax law compliance,
including without limitation, pro forma financial statements,
complete rent rolls and summary rent rolls, existing governmental
reports, surveys, title insurance policies and insurance
certificates with respect to the Real Estate Assets.
(b) keep true and accurate books of account in accordance with
GAAP and to permit the Agent or any Bank or its designated
representatives during normal business hours and upon reasonable
prior notice (unless, in each case, a Default or Event of Default
has occurred whereupon no such notice shall be required) to inspect
the Borrower's or the Guarantor's premises and to examine and be
advised as to such or other business records upon the request of the
Agent or such Bank;
(c) maintain in good operating condition its business and
assets, to keep its business and assets adequately insured, to
maintain its chief executive office in the United States, to
continue to engage in the same lines of business, and to comply with
all Requirements of Law, including ERISA and Environmental Laws;
(d) notify the Agent on behalf of the Banks promptly in writing
of (i) the occurrence of any Default or Event of Default, (ii) any
noncompliance with ERISA or any Environmental Law or proceeding in
respect thereof which could have a Materially Adverse Effect, (iii)
any change of name or address, (iv) any threatened or pending
litigation or similar proceeding affecting the Borrower, the
Guarantor or any Additional Guarantor or any of the Eligible
Properties which could have a Materially Adverse Effect or any
material change in any such litigation or proceeding previously
reported and (v) claims against any assets or properties of the
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Borrower or the Guarantor which could have a Materially Adverse
Effect;
(e) use the proceeds of the Revolving Credit Loans solely to
finance acquisitions by the Borrower or Subsidiaries of the Borrower
of Real Estate Assets and to pay reasonable and customary costs
associated with such acquisitions in accordance with the terms
hereof and for the repair and improvement of presently owned Real
Estate Assets and such acquired Real Estate Assets, and not for the
carrying of "margin security" or "margin stock" within the meaning
of Regulations U and X of the Board of Governors of the Federal
Reserve System, 12 C.F.R. Parts 221 and 224; provided, that,
notwithstanding the foregoing, the Borrower may use the outstanding
principal amount of the Revolving Credit Loans for general working
capital purposes of the Borrower;
(f) cooperate with the Agent and the Banks, take such action,
execute such documents, and provide such information as the Agent
and the Banks may from time to time reasonably request in order
further to effect the transactions contemplated by and the purposes
of the Loan Documents;
(g) do or cause to be done all things necessary (i) to preserve
and keep in full force and effect the existence of the Guarantor as
a Maryland real estate investment trust and its election to be taxed
as a REIT under the provisions of Sections 856-860 of the Code, or
such other laws as may be applicable in order to maintain the
current material characteristics of the Guarantor as an investment
vehicle and tax entity, and (ii) to preserve and keep in full force
and effect the listing of the Guarantor on a National Securities
Exchange, (iii) to cause the Guarantor to continue to operate as a
fully-integrated, self-administered and self-managed REIT, which,
together with its Subsidiaries owns and operates an improved
property portfolio comprised primarily of apartment and retail
properties, (iv) to cause the Guarantor not to engage in any
business other than the business of acting as a REIT and serving as
the general partner and limited partner of the Borrower and as a
member, partner or stockholder of other Persons, (v) to cause the
Guarantor to conduct all or substantially all of its business
operations through the Borrower or through subsidiary partnerships
or other entities in which (x) the Borrower or the Guarantor
directly or indirectly owns or controls as least 51% of the voting
interests as well being entitled to at least 51% of the profits and
losses distributions and (y) the Borrower or the Guarantor
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directly or indirectly (through wholly-owned Subsidiaries) acts as
sole general partner or managing member;
(h) maintain at least one operating account of the Borrower and
the Guarantor with the Agent;
(i) take all steps reasonably necessary to cause any and all
payments due to any third party under any management fee agreements
with respect to the Eligible Properties to be subordinated in full
in writing to the prior payment of the Revolving Credit Loans during
the continuance of a Default or an Event of Default, each on terms
and conditions reasonably satisfactory the Agent in all respects;
and
(j) notify the Agent on behalf of the Banks prior to any single
transaction or series of transactions for the sale of, the granting
of a Lien (as security for any borrowed money) on, or the transfer
of any property or partnership or other ownership interest (other
than any sale or transfer to the Guarantor or a consolidated
subsidiary of the Borrower or the redemption of operating
partnership units by the Borrower) and furnish to the Agent on
behalf of the Banks prior thereto a certificate of the Borrower and
the Guarantor (in substantially the form attached as Exhibit E-3
hereto) setting forth computations demonstrating compliance with the
Borrower's and the Guarantor's financial covenants set forth in ss.9
hereof, and certifying that no Default or Event of Default has
occurred or will occur, all after giving effect to the proposed
transaction or transactions.
Section 8. NEGATIVE COVENANTS. The Borrower and the Guarantor jointly
and severally agree that until the termination of the Commitment and the payment
and satisfaction in full of all the Obligations, the Borrower and the Guarantor
will not, and will not permit any of their respective Subsidiaries to,:
(a) create, incur or assume any Indebtedness other than (i)
Indebtedness to the Agent and the Banks arising under the Loan
Documents, (ii) Indebtedness in respect of the acquisition of
personal property which does not exceed $500,000 in aggregate amount
for the Borrower, the Guarantor and their respective Subsidiaries,
(iii) current liabilities not incurred through the borrowing of
money or the obtaining of credit except credit on an open account
customarily extended, (iv) Indebtedness in respect of taxes or other
governmental charges contested in good faith and by appropriate
proceedings; (v) Indebtedness of the Borrower or any of
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its Subsidiaries, the payment of which is without recourse to the
Borrower or such Subsidiary, incurred in connection with the
acquisition of Real Estate Assets (other than the Eligible
Properties) or the financing or refinancing of any permitted
Indebtedness secured by liens on such Real Estate Assets; (vi)
Recourse Indebtedness permitted under Section 9(g) hereof; and (vii)
Indebtedness not included above and listed on Schedule 8(a)(vii)
hereto;
(b) create or incur any Liens on any property or assets of the
Borrower, the Guarantor or any of their respective Subsidiaries
except (i) Liens securing the Obligations; (ii) Liens securing taxes
or other governmental charges not yet due; (iii) deposits or pledges
made in connection with social security obligations; (iv) Liens of
carriers, warehousemen, mechanics and materialmen, less than 120
days old as to obligations not yet due; (v) easements,
rights-of-way, zoning restrictions and similar minor Liens which
individually and in the aggregate do not have a Materially Adverse
Effect; (vi) purchase money security interests in personal property
securing purchase money Indebtedness permitted by Section 8(a)(ii),
covering only the personal property so acquired; (vii) mortgage
liens on, pledges of and security interests in (A) the Real Estate
Assets other than the Eligible Properties acquired with Indebtedness
permitted by Section 8(a)(v), (B) any personal property of the
Borrower, the Guarantor or such Subsidiary directly related or
appurtenant to such Real Estate Assets and (C) if, and only if, the
applicable Subsidiary that incurs such permitted Indebtedness and
grants such liens on such Real Estate Assets and related personal
property is a special purpose entity that owns only the Real Estate
Assets and personal property that secure the applicable permitted
Indebtedness, the outstanding equity interests of such Subsidiary,
in each case that secure such Indebtedness and cover only the Real
Estate Assets and personal property directly related or appurtenant
to such Real Estate Assets so acquired and equity interests; and
(viii) liens securing the payment of Indebtedness permitted by
ss.8(a)(vi) hereof that encumber only the Real Estate Asset acquired
with the initial proceeds of such Indebtedness;
(c) make any Investments other than investments in (i)
marketable obligations of the United States maturing within one (1)
year, (ii) certificates of deposit, bankers' acceptances and time,
money market and demand deposits of United States Federal and state
chartered banks having total assets in excess of $1,000,000,000,
(iii) as long as no Default or Event of Default shall
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have occurred and be continuing or would result therefrom
Investments consisting of (A) all of the issued and outstanding
capital stock of, or equity interests in, a Subsidiary of the
Borrower or (B) a majority of the capital stock of or equity
interests in a Partially-Owned Real Estate Holding Entity, (iv) any
other investments made by the Guarantor in the ordinary course of
the Guarantor's business in a manner consistent with past practice
if such investments qualify under Section 856(c)(5)(A) of the Code
(or any successor regulation thereto), for purposes of inclusion in
the "75% asset test" relating to the Guarantor's status as a REIT;
provided, that the Guarantor may not make any investments in other
REITs, unless such Investment in any single REIT does not exceed
more than fifteen percent (15%) of the Guarantor's total assets,
determined in accordance with GAAP and provided, further, that the
aggregate value of all Investments under this subsection (c)(iv)
shall not exceed at any time thirty percent (30%) of the total
assets of the Guarantor, determined in accordance with the Code and
the regulations promulgated thereunder, (v) investments in respect
of Acquisition Properties or other Real Estate Assets acquired by
the Borrower after the date hereof in accordance with the terms of
this Agreement; (vi) intercompany loans provided by the Borrower to
the Guarantor solely in connection with stock repurchase
arrangements of the Guarantor; and (vii) such other investments as
the Agent may from time to time approve in writing;
(d) become party to a merger, or to effect any disposition of
any properties or assets other than by the Guarantor, the Borrower
or any of their respective Subsidiaries in the ordinary course of
their respective businesses as a REIT or as a Subsidiary of a REIT,
or to purchase or otherwise acquire assets other than the
acquisition of Acquisition Properties or other Real Estate Assets or
the making of Investments in accordance with the terms hereof and
the purchase of personal property in the ordinary course of their
respective businesses;
(e) (i) in the case of the Borrower, make (A) annual
Distributions in excess of seventy-five percent (75%) of Funds from
Operations or (B) any Distributions during any period when any Event
of Default has occurred and is continuing or would result therefrom;
provided, however, that the Borrower may at all times make
Distributions to the extent (after taking into account all available
funds of the Guarantor from all other sources) required in order to
enable the Guarantor to continue to qualify as a REIT; and (ii) the
case of the Guarantor, during any period when any Event of
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Default has occurred and is continuing, make any Distributions in
excess of the Distributions required to be made by the Guarantor in
order to maintain its status as a REIT;
(f) cause or permit (a) the occupancy for all Units in the
Eligible Properties (under valid and enforceable Leases with bona
fide, third party tenants) to be less than ninety percent (90%) of
all such Units at any time or (b) the occupancy for all Units in any
individual Eligible Property (under valid and enforceable Leases
with bona fide, third party tenants) to be less than eighty percent
(80%) of all such Units at any time; or
(g) at any time cause or permit any of the Partnership Documents
to be modified, amended or supplemented in any respect whatsoever,
without (in each case) the express prior written consent or approval
of the Agent, if such changes would affect the Guarantor's REIT
status or otherwise materially adversely affect the rights of the
Agent and the Banks hereunder or under any other Loan Document.
Section 9. FINANCIAL COVENANTS. The Borrower and the Guarantor jointly
and severally agree that until the termination of the Commitment and the payment
and satisfaction in full of all the Obligations, the Borrower and the Guarantor
will not at any time:
(a) cause or permit the outstanding principal amount of the
Revolving Credit Loans to exceed sixty percent (60%) of the Fair
Market Value of Eligible Properties; provided, that, the Borrower
shall have the right to either (i) pay down the outstanding
principal amount of the Revolving Credit Loans, or (ii) request in
writing to the Agent to add to the Eligible Properties from
additional Real Estate Assets on which all real estate due diligence
requirements referred to in ss.2 hereof have been met and subject to
the right of the Agents to approve or disapprove such request in
accordance with ss.5 hereof, in each case in order to cure the
Borrower's failure to comply with this ss.9(a) within the time
period referred to in ss.12.1(c) hereof;
(b) cause or permit the ratio of Adjusted EBITDA calculated
solely with respect to the Eligible Properties to Pro Forma Debt
Service Charges to be less than 1.75 to 1.0;
(c) cause or permit the ratio of EBITDA to Total Interest
Expense of the Guarantor to be less than 2.0 to 1.0;
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(d) cause or permit the ratio of Operating Cash Flow to Total
Debt Service for the Guarantor to be less than 1.70 to 1.0;
(e) cause or permit Consolidated Total Liabilities to exceed
sixty percent (60%) of Consolidated Total Adjusted Asset Value;
(f) cause or permit Secured Indebtedness to exceed forty percent
(47%) of Consolidated Total Adjusted Asset Value;
(g) cause or permit Recourse Indebtedness (other than
Indebtedness to the Agent and the Banks arising under the Loan
Documents or Indebtedness listed on Schedule 8(a)(vii) hereto) to
exceed ten percent (10%) of Consolidated Total Adjusted Asset Value;
(h) cause or permit Tangible Net Worth to be less than the sum
of (a) $90,000,000 plus (b) ninety percent (90%) of the aggregate
proceeds received by the Guarantor (net of fees and expenses
customarily incurred in transactions of such type) in connection
with any offering of stock, stock equivalents, partnership
interests, or other, similar investment interests in the Guarantor;
(i) cause or permit the aggregate Budgeted Renovation Costs of
all Renovations to exceed fifteen percent (15%) of Consolidated
Total Adjusted Asset Value; or
(j) cause or permit the value of Unhedged Variable Rate
Indebtedness to exceed thirty percent (30%) of Consolidated Total
Adjusted Asset Value.
Section 10. CONDITIONS TO THE CLOSING DATE. The obligations of the
Banks to enter into this Agreement shall be subject to the satisfaction of the
following conditions precedent on or prior to the Closing Date:
Section 10.1. LOAN DOCUMENTS. Each of the Loan Documents
shall have been duly executed and delivered by the respective parties thereto
and shall be in full force and effect.
Section 10.2. CERTIFIED COPIES OF ORGANIZATION DOCUMENTS.
The Agent shall have received (i) from the Borrower a copy, certified as of a
recent date by a duly authorized officer of the Guarantor, in its capacity as
general partner of the Borrower, to be true and complete, of the Agreement of
Limited Partnership of the Borrower and any other agreement governing the rights
of the partners of the Borrower, (ii) from the Guarantor a copy, certified as of
a recent date by the appropriate
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officer of the State of Maryland to be true and correct, of the declaration of
trust of the Guarantor and (iii) from each Additional Guarantor copies of such
Additional Guarantor's Charter Documents, in each case along with any other
organization documents of the Borrower or the Guarantor or the Additional
Guarantors, as the case may be, and each as in effect on the date of such
certification.
Section 10.3. BY-LAWS; RESOLUTIONS. All action on the part
of the Borrower, the Guarantor and the Additional Guarantors necessary for the
valid execution, delivery and performance by the Borrower, the Guarantor and the
Additional Guarantors of this Agreement and the other Loan Documents to which
any of them is or is to become a party shall have been duly and effectively
taken, and evidence thereof satisfactory to the Banks shall have been provided
to the Agent. The Agent shall have received from the Guarantor, for itself and
in its capacity as general partner of the Borrower and the Additional
Guarantors, true copies of its by-laws and the resolutions adopted by its board
of directors authorizing the transactions described herein and evidencing the
due authorization, execution and delivery of the Loan Documents to which it
and/or the Borrower or the Additional Guarantors is a party, each certified by
the secretary as of a recent date to be true and complete.
Section 10.4. INCUMBENCY CERTIFICATE; AUTHORIZED SIGNERS.
The Agent shall have received from the Guarantor for itself and as general
partner of the Borrower and the Additional Guarantors, an incumbency
certificate, dated as of the Closing Date, signed by a duly authorized officer
of the Guarantor 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, the Guarantor and the Additional Guarantors, as the case may be,
each of the Loan Documents to which the Borrower or the Guarantor or any of the
Additional Guarantors is or is to become a party; (b) to make Loan and
Conversion Requests on behalf of the Borrower; and (c) to give notices and to
take other action on behalf of the Borrower or the Guarantor or the Additional
Guarantors, as applicable, under the Loan Documents.
Section 10.5. SURVEY AND TAXES. The Agent shall have
received (a) a Survey of each of the Initial Eligible Properties, together with
the applicable Surveyor Certificate, bearing dates acceptable to the Agent, and
in form and substance acceptable to the Agent, and (b) evidence of payment of
real estate taxes and municipal charges on the Initial Eligible Properties which
are or will become due and payable on or before the Closing Date.
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Section 10.6. TITLE INSURANCE; Title Exception Documents.
The Agent shall have received the Title Policies. The Agent shall have received
true and accurate copies of all documents listed as exceptions under each Title
Policy.
Section 10.7. LEASES, SERVICE CONTRACTS AND OTHER DOCUMENTS.
The Agent shall have received from the Borrower Lease Summaries, all material
Service Agreements, and all Partnership Documents.
Section 10.8. ESTOPPEL AGREEMENTS. The Agent shall have
received Estoppel Agreements in form and substance satisfactory to the Agent, in
each case from each of the commercial tenants under the Leases which occupy more
than 5,000 square feet of gross rentable area of any of the Eligible Properties.
Section 10.9. CERTIFICATES OF INSURANCE. The Agent shall
have received (a) current certificates of insurance as to all of the insurance
maintained by Borrower on the Initial Eligible Properties (including flood
insurance if necessary) from the insurer or an independent insurance broker,
identifying insurers, types of insurance, insurance limits, and policy terms and
insurance binders naming the Agent as Mortgagee, loss payee and additional
insured; (b) certified copies of all policies evidencing such insurance (or
certificates therefor signed by the insurer or an agent authorized to bind the
insurer); and (c) such further information and certificates from Borrower, its
insurers and insurance brokers as the Agent may reasonably request.
Section 10.10. HAZARDOUS SUBSTANCE ASSESSMENTS. The Agent
shall have received hazardous waste site assessment reports running in favor of
the Agent and the Banks concerning Hazardous Substances (or the threat thereof)
and asbestos with respect to the Initial Eligible Properties, dated as of a date
satisfactory to the Banks, from environmental engineers acceptable to the Agent,
such reports to be in form and substance satisfactory to the Agent and each of
the Banks. The Agent shall have the right to obtain third-party review of the
reports at the Borrower's expense.
Section 10.11. OPINION OF COUNSEL CONCERNING ORGANIZATION
AND LOAN DOCUMENTS. Each of the Banks and the Agent shall have received
favorable opinions addressed to the Banks and the Agent in form and substance
satisfactory to the Banks and the Agent from counsel to the Borrower, the
Guarantor, the Additional Guarantors and their respective subsidiaries.
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Section 10.12. STRUCTURAL CONDITION ASSURANCES. The Agent
and each of the Banks shall have received evidence satisfactory to the Agent and
each of the Banks as to the good physical condition of the Buildings and that
utilities and public water and sewer service is available at the lot lines of
the Initial Eligible Properties and connected directly to the Buildings with all
necessary Permits.
Section 10.13. PERMIT ASSURANCES; COMPLIANCE. The Agent
shall have received evidence reasonably satisfactory to the Agent that (i) all
activities being conducted on the Initial Eligible Properties which require
federal, state or local Permits have been duly licensed and that such Permits
are in full force and effect, and (ii) the Initial Eligible Properties are in
compliance with all zoning, land use, environmental, architectural access,
historical and building laws.
Section 10.14. GUARANTY. The Guaranty shall have been duly
executed and delivered by the Guarantor. The Additional Guaranties shall have
been duly executed and delivered by the Additional Guarantors.
Section 10.15. FINANCIAL ANALYSIS OF INITIAL ELIGIBLE
PROPERTIES. Each of the Banks shall have completed to its satisfaction, a
financial analysis of each Initial Eligible Property, which analysis shall
include, without limitation, a review, with respect to each Initial Eligible
Property, of (i) the most recent rent rolls, (ii) three (3) year historical and
projected operating statements, (iii) cash flow projections, (iv) capital
expenditure budgets (which shall be subject to the review and approval of each
of the Banks), (v) market data, (vi) Lease Summaries, (vii) tenant financial
statements, to the extent available for commercial tenants, and (viii) an aging
of rent payments and rent payment histories for each tenant.
Section 10.16. INSPECTION OF ELIGIBLE PROPERTIES. The Agent
and each Bank shall have completed to its satisfaction an inspection of the
Initial Eligible Properties at the Borrower's expense.
Section 10.17. CERTIFICATIONS FROM GOVERNMENT OFFICIALS;
UCC-11 REPORTS. The Agent shall have received (i) long-form certifications from
government officials evidencing the legal existence, good standing and foreign
qualification of the Borrower, the Guarantor and each of the Additional
Guarantors, along with a certified copy of the certificate of limited
partnership of the Borrower and the Additional Guarantors, all as of the most
recent practicable date; and (ii) UCC-11 search results from the appropriate
jurisdictions for the Borrower, the Guarantor and the Additional Guarantors.
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Section 10.18. PROCEEDINGS AND DOCUMENTS. All proceedings in
connection with the transactions contemplated by this Agreement, the other Loan
Documents and all other documents incident thereto shall be reasonably
satisfactory in form and substance to each of the Banks and to the Agent's
counsel, and the Agent, each of the Banks and such counsel shall have received
all information and such counterpart originals or certified or other copies of
such documents as the Agent may reasonably request.
Section 10.19. FEES. The Borrower shall have paid to the
Agent, for the accounts of the Banks or for its own account, as applicable, all
reasonable fees and expenses that are due and payable as of the Closing Date in
accordance with this Agreement.
Section 10.20. CLOSING CERTIFICATE. The Borrower and the
Guarantor shall have delivered a Closing Certificate to the Agent, the form of
which is attached hereto as Exhibit F.
Section 11. CONDITIONS TO ALL BORROWINGS. The obligations of the Banks
to make any Revolving Credit Loan, whether on or after the Closing Date, shall
also be subject to the satisfaction of the following conditions precedent:
Section 11.1. REPRESENTATIONS TRUE; NO EVENT OF DEFAULT;
COMPLIANCE CERTIFICATE. Each of the representations and warranties of the
Borrower, the Guarantor and the Additional Guarantors 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 as of the date as
of which they were made and shall also be true at and as of the time of the
making of each Revolving Credit 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 not prohibited by this Agreement or the other Loan Documents and
changes occurring in the ordinary course of business, and except to the extent
that such representations and warranties relate expressly to an earlier date);
and no Default or Event of Default under this Agreement shall have occurred and
be continuing on the date of any Loan Request or on the Drawdown Date of any
Revolving Credit Loan. Each of the Banks shall have received a certificate of
the Borrower signed by an authorized officer of the Borrower as provided in
ss.2.4(d)(iii).
Section 11.2. NO LEGAL IMPEDIMENT. No change shall have
occurred in any law or regulations thereunder or interpretations thereof that in
the reasonable opinion of the Agent or any Bank would make it illegal for any
Bank to make such Loan.
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Section 11.3. 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 12. EVENTS OF DEFAULT; ACCELERATION; ETC.
------------------------------------
Section 12.1. EVENTS OF DEFAULT; ACCELERATION. If any of the
following events ("Events of Default") shall occur: (a) the Borrower shall fail
to pay (i) when due and payable any principal of or interest on the Revolving
Credit Loans or any Reimbursement Obligation or (ii) any other sum due under any
of the Loan Documents within five (5) days following written demand for payment
of the same; (b) the Borrower or the Guarantor shall fail to perform any term,
covenant or agreement contained in ss.8 or ss.9 (other than the covenant set
forth in ss.9(a) hereof); (c) the Borrower shall fail to perform the covenant
set forth in ss.9(a) hereof and such failure shall continue for thirty (30) days
after the Bank has given written notice of such failure to the Borrower pursuant
to ss.18 hereof; (d) the Borrower or the Guarantor or any Additional Guarantor
shall fail to perform any other term, covenant or agreement contained in the
Loan Documents and such failure shall continue for thirty (30) days after the
Bank has given written notice of such failure to the Borrower; provided, that if
any such failure is of a nature that it cannot be corrected within such thirty
(30) day period but is capable of being corrected within an additional sixty
(60) day period, such failure shall not constitute an Event of Default hereunder
so long as (i) the Borrower or the Guarantor or such Additional Guarantor, as
applicable, institutes reasonable curative action within such initial period and
diligently pursues such action to completion and (ii) such failure shall be
fully cured within such additional sixty (60) day period; (e) any representation
or warranty of the Borrower or the Guarantor or any Additional Guarantor in any
of the Loan Documents or in any certificate or notice given in connection
therewith shall have been false or misleading in any material respect at the
time made or deemed to have been made; (f) the Borrower or the Guarantor or any
Additional Guarantor shall be in default beyond the expiration of any applicable
grace period under any environmental, financial or payment covenant set forth in
any agreement or agreements evidencing Indebtedness owing to the Bank or any
affiliates of the Bank or other Indebtedness in excess of $1,000,000 in
aggregate principal amount, or shall fail to pay such Indebtedness when due,
subject to any applicable period of grace; (g) any of the Loan Documents shall
cease to be in full force and effect; (h) the Borrower, the Guarantor, any
Additional Guarantor or any of their respective Subsidiaries (i) shall make an
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assignment for the benefit of creditors, (ii) shall be adjudicated bankrupt or
insolvent, (iii) shall seek the appointment of, or be the subject of an order
appointing, a trustee, liquidator or receiver as to all or part of its assets,
(iv) shall commence, approve or consent to, any case or proceeding under any
bankruptcy, reorganization or similar law and, in the case of an involuntary
case or proceeding, such case or proceeding is not dismissed within thirty (30)
days following the commencement thereof, or (v) shall be the subject of an order
for relief in an involuntary case under federal bankruptcy law; (i) the Borrower
or the Guarantor or any Additional Guarantor shall be unable to pay its debts as
they mature; (j) there shall remain undischarged for more than ten (10) days any
final (beyond any applicable appeal period) judgment or execution action against
the Borrower or the Guarantor or any Additional Guarantor (not covered by
insurance reasonably satisfactory to the Agent) that, together with other
outstanding claims (not covered by insurance reasonably satisfactory to the
Agent) and execution actions against the Borrower or the Guarantor or such
Additional Guarantor exceeds $1,000,000 in the aggregate; or (k) the Guarantor
shall cease to be the general partner of the Borrower at any time:
then, and in any such event, so long as the same may be continuing, 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 Revolving Credit 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 and the Guarantor; provided that in the
event of any Event of Default specified in ss.12.1(h) or 12.1(i), all such
amounts shall become immediately due and payable automatically and without any
requirement of notice from any of the Banks or the Agent or action by the Banks
or the Agent.
Section 12.2. TERMINATION OF COMMITMENTS. If any one or more
Events of Default specified in ss.12.1(h) or ss.12.1(i) shall occur, any unused
portion of the Commitments hereunder shall forthwith terminate and the Banks
shall be relieved of all obligations to make Revolving Credit Loans to the
Borrower. If any other Event of Default shall have occurred and be continuing,
the Majority Banks may, by notice to the Borrower, terminate the unused portion
of the Total Commitment hereunder, and upon such notice being given such unused
portion of the Total Commitment shall terminate immediately and the Banks shall
be relieved of all further obligations to make Revolving Credit Loans. No such
termination of the Total Commitment hereunder shall relieve the Borrower of any
of the
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Obligations or any of its existing obligations to any Bank arising under other
agreements or instruments.
Section 12.3. REMEDIES. In the event that one or more Events
of Default shall have occurred and be continuing, whether or not the Banks shall
have accelerated the maturity of the Revolving Credit Loans pursuant to ss.12.1,
the Majority Banks may direct the Agent to proceed to protect and enforce the
rights and remedies of the Agent and the Banks under this Agreement, the
Revolving Credit Notes, any or all of the other Loan Documents or under
applicable law by suit in equity, action at law or other appropriate proceeding
(including for the specific performance of any covenant or agreement contained
in this Agreement or the other Loan Documents or any instrument pursuant to
which the Obligations are evidenced and, to the full extent permitted by
applicable law, the obtaining of the ex parte appointment of a receiver), and,
if any amount shall have become due, by declaration or otherwise, proceed to
enforce the payment thereof or any other legal or equitable right or remedy of
the Agent and the Banks under the Loan Documents or applicable law. No remedy
herein conferred upon the Banks or the Agent or the holder of any Revolving
Credit Note or purchaser of any Letter of Credit Participation 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 under any of the
other Loan Documents or now or hereafter existing at law or in equity or by
statute or any other provision of law.
Section 12.4. DISTRIBUTION OF PROCEEDS. In the event that,
following the occurrence and during the continuance of any Default or Event of
Default, the Agent or any Bank, as the case may be, receives any monies in
connection with the Revolving Credit Loans, 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 or the Banks 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;
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(b) Second, to all other Obligations pro rata based upon the
amount of the Obligations due each of the Agent and the Banks; and
provided, further, that the Agent may in its discretion make proper
allowance to take into account any Obligations not then due and
payable;
(c) Third, upon payment and satisfaction in full or other
provisions for payment in full satisfactory to the Majority Banks of
all of the Obligations, to the payment of any obligations required
to be paid pursuant to ss.9-504(1)(c) of the Uniform Commercial Code
of the State of Connecticut or any similar law; and
(d) Fourth, the excess, if any, shall be returned to the
Borrower or to such other Persons as are entitled thereto.
Section 13. SETOFF. Without demand or notice, during the continuance of
any Event of Default, any deposits in any account (general or specific, time or
demand, provisional or final, regardless of currency, maturity, or the branch at
which such deposits are held) in the possession of the Agent or a Bank, other
than those accounts in the possession of First Union National Bank which relate
to any currently existing secured financing between the Borrower and First Union
National Bank, may be applied to or set off against the payment of the
Obligations. Each of the Banks agrees with each other Bank that (a) if pursuant
to any agreement between such Bank and the Borrower (other than this Agreement
or any other Loan Document, an amount to be set off is to be applied to
Indebtedness of the Borrower to such Bank, other than with respect to the
Obligations, such amount shall be applied ratably to such other Indebtedness and
to the Obligations, and (b) if such Bank shall receive from the Borrower,
whether by voluntary payment, exercise of the right of setoff, counterclaim,
cross action, enforcement of the Obligations by proceedings against the Borrower
at law or in equity or by proof thereof in bankruptcy, reorganization,
liquidation, receivership or similar proceedings, or otherwise, and shall retain
and apply to the payment of the Revolving Credit Note or Revolving Credit Notes
held by, and Reimbursement Obligations owed to, such Bank any amount in excess
of its ratable portion of the payments received by all of the Banks with respect
to the Revolving Credit Notes held by, and Reimbursement Obligations owed to,
all of the Banks, such Bank will make such disposition and arrangements with the
other Banks with respect to such excess, either by way of distribution, pro
tanto assignment of claims, subrogation or otherwise, as shall result in each
Bank receiving in respect of the Revolving Credit Notes held by it, or
Reimbursement Obligations owed to it, its proportionate payment as contemplated
by this Agreement;
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provided that if all or any part of such excess payment is thereafter recovered
from such Bank, such disposition and arrangements shall be rescinded and the
amount restored to the extent of such recovery, but without interest.
Notwithstanding the foregoing, no Bank shall exercise a right of setoff if such
exercise would limit or prevent the exercise of any other remedy or other
recourse against the Borrower.
Section 14. ENVIRONMENTAL MATTERS.
---------------------
Section 14.1. REPRESENTATIONS AND WARRANTIES. The Borrower,
the Guarantor, and each Additional Guarantor represent and warrant to the Agent
and the Banks on the date hereof, on the date of any Revolving Loan Request and
on each Drawdown Date of any Revolving Credit Loan that the Borrower, the
Guarantor and each Additional Guarantor has caused environmental assessments to
be conducted and/or taken other steps to investigate the past and present
environmental condition and usage of the Real Estate Assets and the operations
conducted thereon. Except as disclosed in the environmental assessments provided
to the Agent pursuant to ss.10.10 and based upon such assessments and/or
investigation, the Borrower, the Guarantor and each Additional Guarantor
represent and warrant, to the best of their knowledge, that: (a) none of the
Borrower, the Guarantor, any Additional Guarantor, any of their respective
Subsidiaries or any operator of the Real Estate or any portion thereof, or any
operations thereon is in violation, or alleged violation, of any Environmental
Law, which violation or alleged violation (in writing) has, or its remediation
would have, by itself or when aggregated with all such other violations or
alleged violations, a Materially Adverse Effect, (b) none of the Borrower, the
Guarantor, the Additional Guarantor or any of their respective 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. ss.6903(5), any hazardous substances as defined
by 42 U.S.C. ss. 9601(14), any pollutant or contaminant as defined by 42 U.S.C.
ss.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 has 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, the Guarantor, any Additional
Guarantor or any of their respective Subsidiaries conduct a remedial
investigation, removal or other response action pursuant to any Environmental
Law, or (iii) that it
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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; which event described in any such notice would have a Materially
Adverse Effect, (c) (i) no portion of the Real Estate Assets has been used, from
the time of ownership by the Borrower, the Guarantor, or an Additional
Guarantor, as the case may be, 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 any Real Estate Asset except in
accordance with applicable Environmental Laws, (ii) in the course of any
activities conducted by the Borrower, the Guarantor, any Additional Guarantor,
their respective Subsidiaries or to the knowledge of the Borrower, without any
independent inquiry other than as set forth in the environmental assessments,
the operators of the Real Estate Assets, or any ground or space tenants on any
Real Estate Asset, no Hazardous Substances have been generated or are being used
on such Real Estate Asset except in accordance with applicable Environmental
Laws, (iii) there has been no present or past 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 Assets from the time of ownership by the
Borrower, the Guarantor or an Additional Guarantor, as the case may be, (iv) to
the knowledge of the Borrower without any independent inquiry other than as set
forth in the environmental assessments, there have been no Releases on, upon,
from or into any real property in the vicinity of any of the Real Estate Assets
which, through soil or groundwater contamination, may have come to be located on
such Real Estate Assets, and (v) any Hazardous Substances that have been
generated by the Borrower, the Guarantor or any Additional Guarantor or any of
their respective Subsidiaries at any of the Real Estate Assets have been
transported off-site only by carriers having an identification number issued by
the EPA, treated or disposed of only by treatment or disposal facilities
maintaining valid permits as required under applicable Environmental Laws; any
of which events described in clauses (i) through (v) above would have a
Materially Adverse Effect, (d) by virtue of the use of the Revolving Credit
Loans proceeds contemplated hereby, or as a condition to the effectiveness of
any of the Loan Documents, none of the Borrower, the Guarantor, any Additional
Guarantor or any of the 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
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governmental agency or the recording or delivery to other Persons of an
environmental disclosure document or statement.
Section 14.2. ENVIRONMENTAL INDEMNITY AND COVENANTS.
-------------------------------------
(a) The Borrower, the Guarantor, and each Additional Guarantor
jointly and severally agree that they will indemnify and hold the
Agent and each Bank, and each of their respective Affiliates,
harmless from and against any and all claims, expense, damage, loss
or liability incurred by the Agent or any Bank (including all
reasonable costs of legal representation incurred by the Agent or
any Bank in connection with any investigative, administrative or
judicial proceeding, whether or not the Agent or any Bank is party
thereto, but excluding, as applicable for the Agent or a Bank, any
claim, expense, damage, loss or liability as a result of: (x) the
gross negligence or willful misconduct of the Agent or such Bank or
any of their respective Affiliates, or (y) any of the below events
which first occur following the transfer or sale of the applicable
Real Estate Asset to a party indemnified hereunder or to a bona fide
third party purchaser; and the indemnity set forth herein shall not
apply to any claim or loss arising after the date of purchase of a
Real Estate Asset from the Borrower, the Guarantor, or an Additional
Guarantor (as the case may be) by a subsequent owner who purchases
such Real Estate Asset with the proceeds of loans made by the Agent
or any Bank, unless such claim or loss was directly or indirectly
caused by the Borrower, the Guarantor or the Additional Guarantor)
relating to (a) any Release or threatened Release of Hazardous
Substances on any Real Estate; (b) any violation of any
Environmental Laws with respect to conditions at any Real Estate or
the operations conducted thereon; (c) the investigation or
remediation of off-site locations at which the Borrower, the
Guarantor, any Additional Guarantor or any of their respective
Subsidiaries or their predecessors are alleged to have directly or
indirectly disposed of Hazardous Substances; or (d) any action,
suit, proceeding or investigation brought or threatened with respect
to any Hazardous Substances relating to Real Estate Assets
(including, but not limited to, claims with respect to wrongful
death, personal injury or damage to property). In litigation, or the
preparation therefor, the Bank and the Agent shall be entitled to
select their own counsel and participate in the defense and
investigation of such claim, action or proceeding, and the Borrower
shall bear the expense of such separate counsel of the Agent and the
Bank if (i) in the written opinion of counsel to the Agent and the
Banks, use of counsel of the Borrower's choice could reasonably be
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expected to give rise to a conflict of interest, (ii) the Borrower
shall not have employed counsel reasonably satisfactory to the Agent
and the Lenders within a reasonable time after notice of the
institution of any such litigation or proceeding, or (iii) the
Borrower authorizes the Agent and the Bank to employ separate
counsel at the Borrowers' expense. It is expressly acknowledged by
the Borrower and the Guarantor that this covenant of indemnification
shall survive the payment of the Loans and shall inure to the
benefit of the Agent and the Banks and their respective Affiliates,
their respective successors, and their respective assigns under the
Loan Documents permitted under this Agreement.
(b) If the Agent has reasonable grounds to believe that a
Release has occurred with respect to any Eligible Property, whether
or not a Default or an Event of Default shall have occurred, the
Agent may obtain (provided the Borrower refuses to so obtain upon
request of the Agent with a qualified consultant or expert approved
by the Agent) one or more environmental assessments or audits of
such Eligible Property prepared by a hydrogeologist, an independent
engineer or other qualified consultant or expert approved by the
Agent, which approval will not be unreasonably withheld, to evaluate
or confirm (i) whether any Release of Hazardous Substances has
occurred in the soil or water at such Eligible Property and (ii)
whether the use and operation of such Eligible Property materially
complies with all Environmental Laws. All such environmental
assessments shall be at the sole cost and expense of the Borrowers,
provided, however, such costs and expenses shall be reasonable in
all respects.
(c) The Borrower, the Guarantor and each Additional Guarantor
covenants and agrees that if any Release or disposal of Hazardous
Substances shall occur or shall have occurred on any Eligible
Properties owned by it or any of its Subsidiaries, such Borrower,
Guarantor or Additional Guarantor will cause the prompt containment
and removal of such Hazardous Substances and remediation of such
Eligible Properties as necessary to comply with all Environmental
Laws.
Section 15. THE AGENT.
---------
Section 15.1. AUTHORIZATION.
(a) 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
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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 relationship between
the Agent and the Banks is and shall be that of agent and principal
only, and nothing contained in this Agreement or any of the other
Loan Documents shall be construed to constitute the Agent as a
trustee or fiduciary for any Bank.
(b) The Borrower, without further inquiry or investigation,
shall, and is hereby authorized by the Banks to, assume that all
actions taken by the Agent hereunder and in connection with or under
the Loan Documents are duly authorized by the Banks. The Banks shall
notify Borrower of any successor to Agent by a writing signed by
Majority Banks, which successor shall be reasonably acceptable to
the Borrower.
Section 15.2. 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 in
its sole discretion may reasonably determine, and all reasonable fees and
expenses of any such Persons shall be paid by the Borrower.
Section 15.3. 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 may be liable for losses due to its willful misconduct or gross
negligence.
Section 15.4. NO REPRESENTATIONS. The Agent shall not be
responsible for the execution or validity or enforceability of this Agreement,
the Revolving Credit Notes, any of the other Loan Documents or any instrument at
any time constituting, or intended to constitute, collateral security for the
Revolving Credit Notes, or for the value of any such collateral security or for
the validity, enforceability or collectibility of any such amounts owing with
respect to the Revolving Credit Notes, or for any recitals or statements,
warranties or representations made herein or
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in any of the other Loan Documents or in any certificate or instrument hereafter
furnished to it by or on behalf of the Guarantor or the Borrower or any of their
respective Subsidiaries, or be bound to ascertain or inquire as to the
performance or observance of any of the terms, conditions, covenants or
agreements in this Agreement, the other Loan Documents or in any instrument at
any time constituting, or intended to constitute, collateral security for the
Obligations. The Agent shall not be bound to ascertain whether any notice,
consent, waiver or request delivered to it by the Borrower or the Guarantor or
any holder of any of the Revolving Credit 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 credit worthiness or financial
condition of the Borrower or any of its Subsidiaries or the Guarantor or any of
the Subsidiaries or any tenant under a Lease or any other entity. 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.
Section 15.5. PAYMENTS.
(a) A payment by the Borrower to the Agent hereunder or any of
the other Loan Documents for the account of any Bank shall
constitute a payment to such Bank. The Agent agrees to distribute to
each Bank such Bank's pro rata share of payments received by the
Agent for the account of the Banks, as provided herein or in any of
the other Loan Documents. All such payments shall be made on the
date received, if before 2:00 p.m., and if after 2:00 p.m., on the
next Business Day. If payment is not made on the day received, the
funds shall be invested by the Agent in overnight obligations, and
interest thereon paid pro rata to the Banks.
(b) If in the reasonable opinion of the Agent the distribution
of any amount received by it in such capacity hereunder, under the
Revolving Credit Notes or under any of the other Loan Documents
might involve it in material liability, it may refrain from making
distribution until its right to make distribution shall have been
adjudicated by a court of competent jurisdiction, provided that the
Agent shall invest any such undistributed amounts in overnight
obligations on behalf of the Banks and interest thereon shall be
paid pro rata to the Banks. 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
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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
Revolving Credit Loan or to purchase any Letter of Credit
Participation or (ii) to comply with the provisions of ss.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,
or to adjust promptly such Bank's outstanding principal and its pro
rata Commitment Percentage as provided in ss.2.1, 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, whether on account of outstanding Revolving
Credit Loans, Unpaid Reimbursement Obligations, interest, fees or
otherwise, to the remaining nondelinquent Banks for application to,
and reduction of, their respective pro rata shares of all
outstanding Revolving Credit Loans and Unpaid Reimbursement
Obligations. 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 Revolving Credit
Loans. If not previously satisfied directly by the Delinquent Bank,
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 Revolving Credit Loans of the
nondelinquent Banks, the Banks' respective pro rata shares of all
outstanding Revolving Credit Loans and Unpaid Reimbursement
Obligations have returned to those in effect immediately prior to
such delinquency and without giving effect to the nonpayment causing
such delinquency.
Section 15.6. HOLDERS OF REVOLVING CREDIT NOTES. The Agent
may deem and treat the payee of any Revolving Credit Notes 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.
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Section 15.7. INDEMNITY. The Banks ratably and severally
agree hereby to indemnify and hold harmless the Agent from and against any and
all claims, actions and suits (whether groundless or otherwise), losses,
damages, costs, expenses (including any expenses for which the Agent has not
been reimbursed by the Borrower as required by ss.18), and liabilities of every
nature and character arising out of or related to this Agreement, the Revolving
Credit 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 15.8. AGENT AS BANK. In its individual capacity as a
Bank, BankBoston, N.A. shall have the same obligations and the same rights,
powers and privileges in respect to its Commitment and the Revolving Credit
Loans made by it, and as the holder of any of the Revolving Credit Notes and any
Letter of Credit Participation, as it would have were it not also the Agent.
Section 15.9. NOTIFICATION OF DEFAULTS AND EVENTS OF
DEFAULT. Each Bank hereby agrees that, upon learning of the existence of a
default, Default or an Event of Default, it shall (to the extent notice has not
previously been provided) promptly notify the Agent thereof. The Agent hereby
agrees that upon receipt of any notice under this ss.15.9 it shall promptly
notify the other Banks of the existence of such default, Default or Event of
Default.
Section 15.10. DUTIES IN THE CASE OF ENFORCEMENT. In case
one of 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 provided to the
Agent such additional indemnities and assurances against expenses and
liabilities as the Agent may reasonably request, proceed to enforce the
provisions of this Agreement. The Majority Banks may direct the Agent in writing
as to the method and the extent of any such sale or other disposition, the Banks
(including any Bank which is not one of the Majority Banks) hereby agreeing to
ratably and severally 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.
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Section 15.11. SUCCESSOR AGENT. BankBoston, N.A., or any
successor Agent, may resign as Agent at any time by giving written notice
thereof to the Banks and to the Borrower. In addition, the Majority Banks may
remove the Agent in the event of the Agent's willful misconduct or gross
negligence. Any such resignation or removal shall be effective upon appointment
and acceptance of a successor Agent, as hereinafter provided. Upon any such
resignation or removal, the Majority Banks shall have the right to appoint a
successor Agent, provided that, unless a Default or an Event of Default shall
have occurred and be continuing, the Borrower shall have the right to approve
any successor Agent, which approval shall not be unreasonably withheld. If, in
the case of a resignation by the Agent, no successor Agent shall have been so
appointed by the Majority Banks and approved by the Borrower, and shall have
accepted such appointment, within thirty (30) days after the retiring Agent's
giving of notice of resignation, then the retiring Agent may, on behalf of the
Banks, appoint any one of the other Banks as a successor Agent. 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 or removed Agent, and the
retiring or removed Agent shall be discharged from all further duties and
obligations as Agent under this Agreement. After any Agent's resignation or
removal hereunder as Agent, the provisions of this ss.15 shall inure to its
benefit as to any actions taken or omitted to be taken by it while it was Agent
under this Agreement. The Agent agrees that it shall not assign any of its
rights or duties as Agent to any other Person.
Section 15.12. NOTICES. Any notices or other information
required hereunder to be provided to the Agent shall be forwarded by the Agent
to each of the Banks on the same day (if practicable) and, in any case, on the
next Business Day following the Agent's receipt thereof. The Agent's receipt of
such notice shall be deemed to constitute receipt by the Banks of any such
notice.
Section 16. ASSIGNMENT; PARTICIPATIONS; ETC.
-------------------------------
Section 16.1. CONDITIONS TO ASSIGNMENT BY BANKS. Except as
provided herein, each Bank may assign to one or more Eligible Assignees all or a
portion of its interests, rights and obligations under this Agreement (including
all or a portion of its Commitment Percentage and Commitment and the same
portion of the Revolving Credit Loans at the time owing to it and the Letter of
Credit Participations held by it) and the Revolving Credit Notes held by it;
provided that (a) the Agent and, unless a Default or an Event of Default shall
have occurred and be continuing,
-49-
the Borrower each shall have the right to approve any Eligible Assignee, which
approval shall not be unreasonably withheld, it being agreed that the Agent and
the Borrower must approve or reject a proposed Eligible Assignee within seven
(7) days of receiving a written request from any Bank for such approval and if
the Agent or the Borrower fails to respond within such seven (7) day period,
such request for approval shall be deemed approved by the Agent or the Borrower,
or both, as the case may be, (b) each such assignment shall be of a constant,
and not a varying, percentage of all the assigning Bank's rights and obligations
under this Agreement, (c) subject to the provisions of ss.2.2 hereof, each Bank
shall have at all times an amount of its Commitment of not less than $8,000,000
and (d) the parties to such assignment shall execute and deliver to the Agent,
for recording in the Register (as hereinafter defined), an assignment and
assumption, substantially in the form of Exhibit G hereto (an "Assignment and
Assumption"), together with any Revolving Credit Notes subject to such
assignment. Upon such execution, delivery, acceptance and recording, from and
after the effective date specified in each Assignment and Assumption, which
effective date shall be at least five (5) Business Days after the execution
thereof, (i) the assignee thereunder shall be a party hereto and, to the extent
provided in such Assignment and Assumption, have the rights and obligations of a
Bank hereunder and thereunder, and (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 ss.16.3, be released from its obligations under this
Agreement. Any such Assignment and Assumption shall run to the benefit of the
Borrower and a fully executed copy of any such Assignment and Assumption shall
be delivered by the Assignor to the Borrower.
Section 16.2. CERTAIN REPRESENTATIONS AND WARRANTIES;
LIMITATIONS; COVENANTS. By executing and delivering an Assignment and
Assumption, the parties to the assignment thereunder confirm to and agree with
each other and the other parties hereto as follows: (a) other than the
representation and warranty that it is the legal and beneficial owner of the
interest being assigned thereby free and clear of any adverse claim, the
assigning Bank makes no representation or warranty and assumes no responsibility
with respect to any statements, warranties or representations made in or in
connection with this Agreement or the execution, legality, validity,
enforceability, genuineness, sufficiency or value of this Agreement, the other
Loan Documents or any other instrument or document furnished pursuant hereto;
(b) the assigning Bank makes no representation or warranty and assumes no
responsibility with respect to the financial condition of the Borrower and its
Subsidiaries or the Guarantor or any other Person primarily or secondarily
liable in respect of any of the Obligations, or the performance
-50-
or observance by the Borrower and its Subsidiaries or the Guarantor or any other
Person primarily or secondarily liable in respect of any of the Obligations of
any of their obligations under this Agreement or any of the other Loan Documents
or any other instrument or document furnished pursuant hereto or thereto; (c)
such assignee confirms that it has received a copy of this Agreement, together
with copies of such other documents and information as it has deemed appropriate
to make its own credit analysis and decision to enter into such Assignment and
Assumption; (d) such assignee will, independently and without reliance upon the
assigning Bank, the Agent or any other Bank and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit decisions in taking or not taking action under this Agreement; (e) such
assignee represents and warrants that it is an Eligible Assignee; (f) such
assignee appoints and authorizes the Agent to take such action as agent on its
behalf and to exercise such powers under this Agreement and the other Loan
Documents as are delegated to the Agent by the terms hereof or thereof, together
with such powers as are reasonably incidental thereto; (g) such assignee agrees
that it will perform in accordance with their terms all of the obligations that
by the terms of this Agreement are required to be performed by it as a Bank; and
(h) such assignee represents and warrants that it is legally authorized to enter
into such Assignment and Assumption.
Section 16.3. REGISTER. The Agent shall maintain a copy of
each Assignment and Assumption 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 Revolving Credit
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
$2,500.
Section 16.4. NEW REVOLVING CREDIT NOTES. Upon its receipt
of an Assignment and Assumption executed by the parties to such assignment,
together with each Revolving Credit Notes 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 (5) Business Days after receipt of such notice, the Borrower,
at its own expense, shall execute and deliver to
-51-
the Agent, in exchange for each surrendered Revolving Credit Notes, a new
Revolving Credit Notes to the order of such Eligible Assignee in an amount equal
to the amount assumed by such Eligible Assignee pursuant to such Assignment and
Assumption and, if the assigning Bank has retained some portion of its
obligations hereunder, a new Revolving Credit Notes to the order of the
assigning Bank in an amount equal to the amount retained by it hereunder. Such
new Revolving Credit Notes shall provide that they are replacements for the
surrendered Revolving Credit Notes, shall be in an aggregate principal amount
equal to the aggregate principal amount of the surrendered Revolving Credit
Notes, shall be dated the effective date of such Assignment and Assumption and
shall otherwise be in substantially the form of the assigned Revolving Credit
Notes. The surrendered Revolving Credit Notes shall be canceled and returned to
the Borrower.
Section 16.5. 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) unless a Default or an Event of Default shall have
occurred and be continuing, the Borrower shall have approved such participant
(such approval not to be unreasonably withheld), (b) each such participation
shall be in an amount of not less than $8,000,000 (c) any such sale or
participation shall not affect the rights and duties of the selling Bank
hereunder to the Borrower and the Agent and the Bank shall continue to exercise
all approvals, disapprovals and other functions of a Bank, and (d) no
participant shall have the right to grant further participations or assign its
rights, obligations or interests under such participation to other Persons
without the prior written consent of the Agent.
Section 16.6. PLEDGE BY LENDER. Notwithstanding any other
provision of this Agreement, any Bank at no cost to the Borrower may at any time
pledge all or any portion of its interest and rights under this Agreement
(including all or any portion of its Revolving Credit Notes) to any of the
twelve Federal Reserve Banks organized under ss.4 of the Federal Reserve Act, 12
U.S.C. ss.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 16.7. NO ASSIGNMENT BY BORROWER. The Borrower shall
not assign or transfer any of its rights or obligations under any of the Loan
Documents without prior Unanimous Bank Approval.
-52-
Section 16.8. DISCLOSURE. The Borrower agrees that, in
addition to disclosures made in accordance with standard banking practices, any
Bank may, after written notice to the Borrower, disclose information obtained by
such Bank pursuant to this Agreement to assignees or participants and potential
assignees or participants hereunder. Any such disclosed information shall be
treated by any assignee or participant with the same standard of confidentiality
set forth herein.
Section 17. 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 of the other Loan Documents may be amended, and the performance or
observance by the Borrower or the Guarantor of any terms of this Agreement or
the other Loan Documents or the continuance of any default, 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, Unanimous Bank Approval shall be
required for any amendment, modification or waiver of this Agreement that:
(i) reduces or forgives any principal of any
unpaid Revolving Credit Loan or any interest thereon
(including any interest "breakage" costs) or any fees due
any Bank hereunder, or permits any prepayment not otherwise
permitted hereunder; or
(ii) changes the unpaid principal amount of, or
the rate of interest on, any Revolving Credit Loan; or
(iii) changes the date fixed for any payment of
principal of or interest on any Revolving Credit Loan
(including, without limitation, any extension of the
Maturity Date) or any fees payable hereunder; or
(iv) changes the amount of any Bank's Commitment
(other than pursuant to an assignment permitted under
ss.16.1 hereof) or increases the amount of the Total
Commitment; or
(v) amends or otherwise changes the definition of
the Borrowing Base, or the method of calculating such
Borrowing Base; or
-53-
(vi) amends any of the covenants contained in ss.9
hereof; or
(vii) releases or reduces the liability of the
Guarantor pursuant to the Guaranty; or
(viii) modifies any provision herein or in any
other Loan Document which by the terms thereof expressly
requires Unanimous Bank Approval; or
(ix) amends any of the provisions governing
funding contained in ss.2 hereof; or
(x) changes the rights, duties or obligations of
the Agent specified in ss.15 hereof (provided that no
amendment or modification to such ss.15 or to the fee
payable to the Agent under this Agreement may be made
without the prior written consent of the Agent); or
(xi) changes the definitions of Majority Banks or
Unanimous Bank Approval.
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 the Banks or any Bank in exercising any
right shall operate as a waiver thereof or otherwise be prejudicial to such
right or any other rights of the Agent or the Banks. No notice to or demand upon
the Borrower shall entitle the Borrower to other or further notice or demand in
similar or other circumstances.
Section 18. MISCELLANEOUS. The Borrower and the Guarantor jointly and
severally agree to indemnify and hold harmless the Agent and the Banks against
all claims and losses of every kind arising out of the Loan Documents, including
without limitation against those in respect of the application of Environmental
Laws to the Borrower. The Borrower and the Guarantor shall pay to the Agent and
the Banks promptly on demand all reasonable costs and expenses (including any
taxes and legal appraisal, engineering and other professional fees, syndication
fees and fees of its commercial finance examiner) incurred by the Agent and the
Banks in connection with the preparation, negotiation, execution, amendment,
syndication or enforcement of any of the Loan Documents. Any communication to be
made hereunder shall (a) be made in writing and by hand delivery or by
registered or certified first class mail, and (b) be made or delivered to the
address of the party receiving notice which is identified with its signature
below (unless such party has by five (5) days'
-54-
written notice specified another address), and shall be deemed made or
delivered, when dispatched, left at that address, or five (5) days after being
mailed, postage prepaid, to such address. This Agreement shall be binding upon
and inure to the benefit of each party hereto and its successors and assigns
(but neither the Guarantor nor the Borrower may assign its rights or obligations
hereunder) and the Guarantor and the Borrower agree to cooperate and execute and
deliver any and all agreements, documents and instruments reasonably required in
connection with the terms hereof, including, without limitation, any documents
reasonably required by any Bank in connection with the assignment by such Bank
of any of its rights and remedies hereunder. No failure or delay by the Agent
and the Banks to exercise any right hereunder shall operate as a waiver thereof,
nor shall any single or partial exercise of any right, power or privilege
preclude any other right, power or privilege. The provisions of this Agreement
are severable and if any one provision hereof shall be held invalid or
unenforceable in whole or in part in any jurisdiction, such invalidity or
unenforceability shall affect only such provision in such jurisdiction. This
Agreement, together with all Exhibits and Schedules hereto, expresses the entire
understanding of the parties with respect to the transactions contemplated
hereby. This Agreement and any amendment hereby may be executed in several
counterparts, each of which shall be an original, and all of which shall
constitute one agreement. In proving this Agreement, it shall not be necessary
to produce more than one such counterpart executed by the party to be charged.
THIS AGREEMENT AND THE NOTE ARE CONTRACTS UNDER THE LAWS OF THE STATE OF
CONNECTICUT AND SHALL BE CONSTRUED IN ACCORDANCE THEREWITH AND GOVERNED THEREBY.
THE BORROWER AGREES THAT ANY SUIT FOR THE ENFORCEMENT OF ANY OF THE LOAN
DOCUMENTS MAY BE BROUGHT IN THE COURTS OF THE STATE OF CONNECTICUT OR ANY
FEDERAL COURT SITTING THEREIN.
Section 19. WAIVER OF JURY TRIAL. THE BORROWER AND THE GUARANTOR, AS AN
INDUCEMENT TO THE AGENT AND THE BANKS TO ENTER INTO THIS AGREEMENT, HEREBY WAIVE
ALL RIGHTS TO A JURY TRIAL WITH RESPECT TO ANY ACTION ARISING IN CONNECTION WITH
ANY LOAN DOCUMENT.
Section 20. PREJUDGMENT REMEDY WAIVER. THE BORROWER AND THE GUARANTOR
ACKNOWLEDGE THAT THE FINANCING EVIDENCED HEREBY IS A COMMERCIAL TRANSACTION
WITHIN THE MEANING OF CHAPTER 903a OF THE CONNECTICUT GENERAL STATUTES. THE
BORROWER AND THE GUARANTOR
-55-
HEREBY WAIVE THEIR RIGHT TO NOTICE AND PRIOR COURT HEARING OR COURT ORDER UNDER
CONNECTICUT GENERAL STATUTES SECTIONS 52-278a ET. SEQ. AS AMENDED OR UNDER ANY
OTHER STATE OR FEDERAL LAW WITH RESPECT TO ANY AND ALL PREJUDGMENT REMEDIES THE
AGENT AND THE BANKS MAY EMPLOY TO ENFORCE THEIR RIGHTS AND REMEDIES HEREUNDER.
MORE SPECIFICALLY, THE BORROWER ACKNOWLEDGE THAT THE BANK'S AND THE AGENT'S
ATTORNEY MAY, PURSUANT TO CONN. GEN. STAT. ss.52-278F, ISSUE A WRIT FOR A
PREJUDGMENT REMEDY WITHOUT SECURING A COURT ORDER. THE BORROWER ACKNOWLEDGE AND
RESERVE THEIR RIGHT TO NOTICE AND A HEARING SUBSEQUENT TO THE ISSUANCE OF A WRIT
FOR PREJUDGMENT REMEDY AS AFORESAID AND THE AGENT AND THE BANKS ACKNOWLEDGE THE
BORROWER'S AND THE GUARANTOR'S RIGHT TO SAID HEARING SUBSEQUENT TO THE ISSUANCE
OF SAID WRIT.
-56-
IN WITNESS WHEREOF, the undersigned have duly executed this Agreement
as a sealed instrument as of the date first set forth above.
GROVE OPERATING, L.P.
By: Grove Property Trust
By: /s/ Xxxxxx XxXxxxxx
---------------------------------
Name: Xxxxxx XxXxxxxx
Title: Treasurer
Address: 000 Xxxxxx Xxxxxx
Xxxxxxxx, Xxxxxxxxxxx 00000
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
GROVE PROPERTY TRUST
By: /s/ Xxxxxx XxXxxxxx
---------------------------------
Name: Xxxxxx XxXxxxxx
Title: Treasurer
Address: 000 Xxxxxx Xxxxxx
Xxxxxxxx, Xxxxxxxxxxx 00000
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
-57-
BANKBOSTON, N.A.
individually and as Agent
By: /s/ Xxxxx X. St. Xxxxxx
---------------------------------
Name: Xxxxx X. St. Xxxxxx
Title: Vice President
Address: Xxx XxxxXxxxxx Xxxxx
Xxxxxxxxxx, XX 00000
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
CITIZENS BANK OF RHODE ISLAND
By: /s/ Xxxxx X. Xxxxxxxxxxxx
---------------------------------
Name: Xxxxx X. Xxxxxxxxxxxx
Title: Vice President
Address: Xxx Xxxxxxxx Xxxxx
Xxxxxxxxxx, XX 00000
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
-00-
XXXXX XXXXX NATIONAL BANK
By: /s/ Xxxxx Xxxxxxxx
---------------------------------
Name: XXXXX XXXXXXXX
Title: VICE PRESIDENT
Address: Real Estate Capital
Markets Group
Xxx Xxxxx Xxxxx Xxxxxx
0xx Xxxxx
Xxxxxxxxx, XX 00000
Telephone: 000 000-0000
Telecopy: (000) 000-0000
Exhibit A
---------
Revolving Credit Note
---------------------
$ Dated:
----------------
----------------
--------------, -----------------
FOR VALUE RECEIVED, the undersigned GROVE OPERATING, L.P., a Delaware
limited partnership, with a business address at 000 Xxxxxx Xxxxxx, Xxxxxxxx,
Xxxxxxxxxxx 00000 (hereinafter referred to as "Maker"), promises to pay to the
order of , a (hereinafter
---------------------------- -------------------------
referred to as "Payee", Payee and any and all other holders of this Note being
hereinafter collectively referred to as "Holder"), at the head office of
BANKBOSTON, N.A. (the "Agent") at One BankBoston Plaza, Providence, Rhode Island
("Head Office"), the principal sum of (U.S.
---------------------------
$ ), or so much of the aggregate Revolving Credit Loans (as
-----------------
hereinafter defined by reference) as may be advanced hereunder pursuant to that
certain Revolving Credit Agreement (hereinafter referred to as the "Loan
Agreement") of even date herewith made among Maker, Payee, the Agent and certain
other financial institutions, together with interest as provided in this Note,
as follows:
From and after the date hereof (until maturity or default as
hereinafter provided), interest shall accrue on the principal amount of this
Note which is outstanding from time to time at the rates per annum provided for
in the Loan Agreement. Interest shall be computed on the daily outstanding
principal balance hereunder on the basis of a 360 day year, but shall accrue and
be payable for the actual number of days during which funds are outstanding.
The entire outstanding principal balance of this Note, together with
all accrued but unpaid interest thereon and all other sums due under this Note
and the Loan Agreement, shall be due and payable in full, unless sooner due and
payable hereunder or under the Loan Agreement, on the Maturity Date (as defined
by reference below).
Notwithstanding any provisions in this Note, or in any instrument
securing this Note, the total liability for payments legally regarded as
interest shall not exceed the maximum limits imposed by the laws of the State of
Connecticut in effect on the date hereof, and any payment of same in excess of
the amount allowed thereby shall, as of the date of such payment, automatically
be deemed to have been applied to the payment of
-2-
the principal indebtedness evidenced hereby, or, if same has been fully repaid,
shall be deemed to be held by Holder as additional security for all remaining
indebtedness of Maker to Holder and shall be repaid to Maker upon demand after
all of such indebtedness has been fully paid. Any notation or record of Holder
with respect to such required application which is inconsistent with the
provisions of this paragraph shall be disregarded for all purposes and shall not
be binding upon the Maker or Holder.
All sums payable under this Note shall be paid in immediately available
funds in lawful money of the United States of America which shall be legal
tender for public and private purposes at the time of such payment.
All payments under this Note shall be made to Holder without set-off or
counterclaim and free and clear of and without deduction on account of taxes,
levies, fees, deductions, withholdings, restrictions or conditions of any nature
now or hereafter imposed or levied by any country or any political subdivision
thereof unless Maker is required by law to make such deductions. If any such
obligation is imposed upon Maker with respect to any amount payable by it
hereunder, it will pay to Holder, on the date on which such amount becomes due
and payable hereunder, such additional amount as shall be necessary to enable
Holder to receive the same net amount which it would have received on such due
date had no such obligation been imposed upon Maker.
At the option of the Majority Banks (as defined herein by reference),
the entire principal amount outstanding under this Note, together with all
accrued interest thereon and all other sums due under this Note and the Loan
Agreement, shall, without notice or demand, subject to ss.12 of the Loan
Agreement, become immediately due and payable in full, if any payment of
principal or interest due under this Note is not paid when due, or if any other
default or breach shall occur and continue beyond the expiration of any
applicable grace or notice period under the terms or conditions of this Note,
the Loan Agreement or any other document, instrument or agreement now or
hereafter evidencing, securing or relating to the loan evidenced by this Note or
affecting the Eligible Properties (as hereinafter defined by reference), which
terms and conditions are hereby incorporated herein with the same force and
effect as if herein set forth at length. Failure to exercise such option shall
not constitute a waiver of the right to exercise such option if Maker is in
default hereunder. In the event of any default in the payment of this Note, and
if the same is referred to an attorney at law for collection or suit is brought
hereon,
-3-
Maker shall pay Holder, in either case, all expenses and costs of collection,
including, but not limited to, reasonable attorney's fees.
If any payment of principal or interest due under this Note is not paid
when due (whether at stated maturity, acceleration or otherwise) or if any Event
of Default (as defined in the Loan Agreement) shall occur which, by the terms of
this Note, would entitle the Majority Banks to declare this Note to be
immediately due any payable (whether or not the Majority Banks exercise their
option to so declare this Note to be immediately due and payable), then each
such overdue payment or the entire unpaid principal balance of this Note, as the
case may be, shall bear interest, from the date on which such overdue payment
shall have become due and payable by Maker until payment in full (whether before
or after judgment) or from the date of the occurrence of such Event of Default
until such Event of Default is cured, at the interest rate set forth in ss.4.9
of the Loan Agreement, or if such increased rate of interest may not be
collected under applicable law, then at the maximum increased rate of interest,
if any, which may be collected from Maker under applicable law.
Maker shall have the right to prepay this Note, in full or in part, in
accordance with the Loan Agreement.
From time to time, without affecting the obligation of Maker or any
sureties, guarantors, endorsers, accommodation parties or other persons liable
or to become liable on this Note to pay the outstanding principal balance of
this Note and observe the covenants of Maker contained herein, without giving
notice to or obtaining the consent of Maker or any such sureties, guarantors,
endorsers, accommodation parties or other persons, and without liability on the
part of Holder, Holder may, at the option of Holder, extend the time for payment
of said outstanding principal balance, interest or any part thereof, reduce the
payments thereon, release anyone liable on any of said outstanding principal
balance, accept a renewal of this Note, modify the terms and time of payment of
said outstanding principal balance or join in any extension or subordination
agreement, and agree in writing with Maker to modify the rate of interest or
period of amortization of this Note or change the amount of the monthly
installments payable hereunder. No one or more of such actions shall constitute
a novation.
Presentment, notice of dishonor, protest and notice of protest are
hereby waived by the Maker and all sureties, guarantors, endorsers and
accommodation parties hereof and all other persons liable or to become liable on
this Note. The Maker further waives any and all homestead and
-4-
exemption rights under the laws and constitutions of the United States of
America, the State of Connecticut and any other state. This Note shall be the
joint and several obligation of the Maker and all sureties, guarantors,
endorsers, accommodation parties and all other persons liable or to become
liable on this Note, and shall be binding upon them and their heirs, legal
representatives, successors and assigns, as applicable.
All capitalized terms used herein without definition that are defined
in the Loan Agreement shall have the same meanings herein as therein.
THE MAKER ACKNOWLEDGES THAT THE FINANCING EVIDENCED HEREBY IS A
COMMERCIAL TRANSACTION WITHIN THE MEANING OF CHAPTER 903a OF THE CONNECTICUT
GENERAL STATUTES. THE MAKER HEREBY WAIVES ITS RIGHT TO NOTICE AND PRIOR COURT
HEARING OR COURT ORDER UNDER CONNECTICUT GENERAL STATUTES SECTIONS 52-278a ET.
SEQ. AS AMENDED OR UNDER ANY OTHER STATE OR FEDERAL LAW WITH RESPECT TO ANY AND
ALL PREJUDGMENT REMEDIES THE HOLDER MAY EMPLOY TO ENFORCE ITS RIGHTS AND
REMEDIES HEREUNDER. MORE SPECIFICALLY, THE MAKER ACKNOWLEDGES THAT THE HOLDER'S
ATTORNEY MAY, PURSUANT TO CONN. GEN. STAT. ss.52-278F, ISSUE A WRIT FOR A
PREJUDGMENT REMEDY WITHOUT SECURING A COURT ORDER. THE MAKER ACKNOWLEDGES AND
RESERVES ITS RIGHT TO NOTICE AND A HEARING SUBSEQUENT TO THE ISSUANCE OF A WRIT
FOR PREJUDGMENT REMEDY AS AFORESAID AND THE HOLDER ACKNOWLEDGES THE MAKER'S
RIGHT TO SAID HEARING SUBSEQUENT TO THE ISSUANCE OF SAID WRIT.
This Note shall be governed and construed in accordance with the laws
of the State of Connecticut.
The Maker hereby irrevocably and unconditionally (a) submits to
personal jurisdiction in the State of Connecticut over any suit, action or
proceeding arising out of or relating to this Note, and (b) waives any and all
personal rights under the laws of any state (i) to the right, if any, to trial
by jury, or (ii) to object to jurisdiction within the State of Connecticut or
venue in any particular forum within the State of Connecticut. The Maker agrees
that, in addition to any methods of service of process provided for under
applicable law, all service of process in any such suit, action or proceeding
may be made by hand or by certified or registered mail, return receipt
requested, directed to the Maker at the address set forth above, and service so
made shall be complete when delivered or
-5-
when delivery of the same is refused by the Maker. Nothing contained herein,
however, shall prevent Holder from bringing any suit, action or proceeding or
exercising any rights against any security and against the Maker, and against
any property of the Maker, in any other state. Initiating such suit, action or
proceeding or taking such action in any state shall in no event constitute a
waiver of the agreement contained herein that the laws of the State of
Connecticut shall govern the rights and obligations of Maker and Holder
hereunder or the submission herein made by the Maker to personal jurisdiction
within the State of Connecticut.
This Note may not be amended, modified, or changed, nor shall any
waiver of any provision hereof be effective, except only by an instrument in
writing signed by the party against whom enforcement of any waiver, amendment,
change, modification or discharge is sought.
Whenever used herein, the words "Maker" and "Holder" shall be deemed to
include their respective heirs, legal representatives, successors and assigns,
as applicable.
IN WITNESS WHEREOF, the Maker has executed this Note under seal as of
the date first above written.
GROVE OPERATING, L.P.
By: GROVE PROPERTY TRUST,
Its general partner duly authorized
By:
--------------------------------
Xxxxxx XxXxxxxx
Its Treasurer
Exhibit B
---------
Eligible Property Conditions
----------------------------
If the Borrower requests the Banks to consider any (proposed) Real Estate
Asset as an Eligible Property, the Borrower shall furnish or make available to
the Banks, for purposes of the Banks' consideration of such request, the
following:
(1) At the time that the Borrower makes such request:
(a) FINANCIAL ANALYSIS. Adequate information to permit the Banks to
conduct a complete financial analysis of each proposed property, including
a review of each such property's (i) most recent rent roll, (ii) 3-year
historical operating statements, if available after reasonable efforts,
(iii) cash flow projections, (iv) capital expenditure budgets, (v) market
data, (vi) leases or other agreements that would constitute Leases if the
property were an Eligible Property, including any separate agreements
regarding concessions to or options for tenants, and lease summaries (in
substantially the form of the Lease Summaries attached as Exhibit C to the
Revolving Credit Agreement or in such other form as shall be reasonably
acceptable to the Agent), (vii) commercial tenant financials, if available,
and (viii) if available after reasonable efforts, aging of rent payments
and rent payment histories for each commercial tenant if such property were
an Eligible Property.
(b) INSPECTION. The opportunity to inspect each proposed property.
(c) ENVIRONMENTAL SITE ASSESSMENTS. An environmental site assessment
report running in favor of the Banks, at the Borrower's sole expense, for
each proposed property, such report to be in form and substance
satisfactory to the Agent and each of the Banks. The environmental site
assessment report must be dated no earlier than six (6) months prior to the
date on which the property is proposed to become an Eligible Property.
(d) CAPITAL EXPENDITURE BUDGET. A capital expenditure budget for the
proposed property.
(e) INSPECTING ENGINEER'S/ARCHITECT'S REPORT; STRUCTURAL CONDITION
ASSURANCES. Unless such request is waived by the Agent, a satisfactory
third party engineer's or architect's report prepared at the Borrower's
expense in favor of the Banks for each proposed
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property dated no earlier than six (6) months prior to the date on which
the property is proposed to become an Eligible Property.
(2) Prior to the proposed property being accepted as a New Eligible
Property (except as otherwise provided in clause (c)(ii) below), and as a
condition to any funding in connection therewith, such other due diligence
items (or satisfaction of other conditions) as the Agent or the Banks
reasonably require, including, without limitation:
(a) If applicable, an Additional Guaranty from the applicable
Additional Guarantor in the form attached hereto as Schedule 1;
(b) A copy of the Title Policy for such New Eligible Property and,
upon the request of the Agent, a then current Title Policy Endorsement if
such Title Policy was issued more than 90 days prior to the acceptance of
the proposed property;
(c) Evidence of compliance reasonably satisfactory to the Agent with
respect to zoning and land use regulation compliance, including, without
limitation, an opinion of counsel as required by the Agent.
(d) Estoppel certificates, in form and substance reasonably
satisfactory to the Agent, from each commercial tenant under the Leases
which occupies more than 5,000 square feet of gross rentable area; and
(e) The items required to be delivered or conditions required to be
met set forth in ss.10.2 and ss.10.3 (as to the Charter Documents of the
applicable Additional Guarantor and the resolutions adopted by the Borrower
or the applicable Additional Guarantor authorizing the transactions
relating to the proposed New Eligible Property and the valid execution,
delivery and performance by the Borrower of the documents delivered in
connection therewith), ss.10.4, ss.10.5, ss.10.6, ss.10.7, ss.10.8,
ss.10.9, ss.10.10, ss.10.11, ss.10.12, ss.10.16 and ss.10.17 of the
Agreement, with respect to the proposed New Eligible Property.
The items referred to in this paragraph (2), or copies or drafts thereof,
as appropriate, shall be delivered to the Agent and the Banks a reasonable
period of time prior to the requested funding date so as to afford the Banks a
reasonable period of time in which to review the same, and in which to address
to the Banks' satisfaction any issues raised therein or thereby.
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Unless otherwise defined herein, the terms used in this Exhibit B have the
meanings described in the Revolving Credit Agreement to which it is an exhibit.
Schedule 1 to Exhibit B
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UNLIMITED GUARANTY
------------------
GUARANTY, dated as of by
--------- ----, ------
, a with a business address at
--------------------------- ----------------------
(the "Guarantor"), in favor of
----------------------------------------
BANKBOSTON, N.A. and certain other financial institutions (collectively, the
"Banks") and BankBoston, N.A., as agent for certain of the Banks (in such
capacity, the "Agent"). In consideration of the Agent and the Banks' giving, in
its discretion, time, credit or banking facilities or accommodations to Grove
Operating, L.P. and its successors and assigns (collectively, the "Customer"),
the Guarantor agrees as follows:
1. GUARANTY OF PAYMENT AND PERFORMANCE. The Guarantor hereby guarantees
to the Agent and the Banks the full and punctual payment when due (whether at
maturity, by acceleration or otherwise), and the performance, of all
liabilities, agreements and other obligations of the Customer to the Agent or
the Banks, whether direct or indirect, absolute or contingent, due or to become
due, secured or unsecured, now existing or hereafter arising or acquired
(whether by way of discount, letter of credit, lease, loan, overdraft or
otherwise) arising under or in connection with the Revolving Credit Agreement
dated , 1999 among the Customer, certain of the Banks and the Agent
---------
(the "Credit Agreement") or any document, agreement and instrument executed in
connection therewith (collectively, the "Obligations"). This Guaranty is an
absolute, unconditional and continuing guaranty of the full and punctual payment
and performance of the Obligations and not of their collectibility only and is
in no way conditioned upon any requirement that the Agent or the Banks first
attempt to collect any of the Obligations from the Customer or resort to any
security or other means of obtaining their payment. Should the Customer default
in the payment or performance of any of the Obligations, the obligations of the
Guarantor hereunder shall become immediately due and payable to the Agent and
the Banks, without demand or notice of any nature, all of which are expressly
waived by the Guarantor. Payments by the Guarantor hereunder may be required by
the Agent and the Banks on any number of occasions.
2. GUARANTOR'S AGREEMENT TO PAY. The Guarantor further agrees, as the
principal obligor and not as a guarantor only, to pay to the Agent and the
Banks, on demand, all costs and expenses (including court costs and reasonable
legal expenses) incurred or expended by the Agent or the Banks in connection
with the Obligations, this Guaranty and
-2-
the enforcement thereof, together with interest on amounts recoverable under
this Guaranty from the time such amounts become due until payment, at the
interest rate set forth in the Credit Agreement; provided, that if such interest
exceeds the maximum amount permitted to be paid under applicable law, then such
interest shall be reduced to such maximum permitted amount.
3. UNLIMITED GUARANTY. The liability of the Guarantor hereunder shall
be unlimited.
4. WAIVERS BY GUARANTOR; BANKS' FREEDOM TO ACT. The Guarantor agrees
that the Obligations will be paid and performed strictly in accordance with
their respective terms regardless of any law, regulation or order now or
hereafter in effect in any jurisdiction affecting any of such terms or the
rights of the Banks with respect thereto. The Guarantor waives presentment,
demand, protest, notice of acceptance, notice of Obligations incurred and all
other notices of any kind, all defenses which may be available by virtue of any
valuation, stay, moratorium law or other similar law now or hereafter in effect,
any right to require the marshalling of assets of the Customer, and all
suretyship defenses generally. Without limiting the generality of the foregoing,
the Guarantor agrees to the provisions of any instrument evidencing, securing or
otherwise executed in connection with any Obligation and agrees that the
obligations of the Guarantor hereunder shall not be released or discharged, in
whole or in part, or otherwise affected by (i) the failure of the Agent or any
Bank to assert any claim or demand or to enforce any right or remedy against the
Customer; (ii) any extensions or renewals of any Obligation; (iii) any
rescissions, waivers, amendments or modifications of any of the terms or
provisions of any agreement evidencing, securing or otherwise executed in
connection with any Obligation; (iv) the substitution or release of any entity
primarily or secondarily liable for any Obligation (including, without
limitation, the release of the Guarantor); (v) the adequacy of any rights the
Agent or any Bank may have against any collateral or other means of obtaining
repayment of the Obligations; (vi) the impairment of any collateral securing the
Obligations, including without limitation the failure to perfect or preserve any
rights the Agent or any Bank might have in such collateral or the substitution,
exchange, surrender, release, loss or destruction of any such collateral; or
(vii) any other act or omission which might in any manner or to any extent vary
the risk of the Guarantor or otherwise operate as a release or discharge of the
Guarantor, all of which may be done without notice to the Guarantor.
-3-
5. UNENFORCEABILITY OF OBLIGATIONS AGAINST CUSTOMER. If for any reason
the Customer has no legal existence or is under no legal obligation to discharge
any of the Obligations, or if any of the Obligations have become irrecoverable
from such Customer by operation of law or for any other reason, this Guaranty
shall nevertheless be binding on the Guarantor to the same extent as if the
Guarantor at all times had been the principal obligor on all such Obligations.
In the event that acceleration of the time for payment of the Obligations is
stayed upon the insolvency, bankruptcy or reorganization of the Customer, or for
any other reason, all such amounts otherwise subject to acceleration under the
terms of any agreement evidencing, securing or otherwise executed in connection
with any Obligation shall be immediately due and payable by the Guarantor.
6. SUBROGATION; SUBORDINATION. Until the payment and performance in
full of all Obligations and any and all obligations of the Customer to any
affiliate of the Agent or any Bank, the Guarantor shall not exercise any rights
against the Customer arising as a result of payment by the Guarantor hereunder,
by way of subrogation or otherwise, and will not prove any claim in competition
with the Agent or any Bank or its affiliates in respect of any payment hereunder
in bankruptcy or insolvency proceedings of any nature; until the payment and
performance of all of the Obligations and any and all Obligations of the
Customer to any affiliate of the Agent or any Bank, the Guarantor will not claim
any set-off or counterclaim against the Customer in respect of any liability of
the Guarantor to the Customer; and the Guarantor waives any benefit of and any
right to participate in any collateral which may be held by the Agent or any
Bank or any such affiliate. The payment of any amounts due with respect to any
indebtedness of the Customer now or hereafter held by the Guarantor is hereby
subordinated to the prior payment in full of the Obligations. The Guarantor
agrees that the Guarantor will not demand, xxx for or otherwise attempt to
collect any such indebtedness of the Customer to the Guarantor until the
Obligations shall have been paid in full. If, notwithstanding the foregoing
sentence, the Guarantor shall collect, enforce or receive any amounts in respect
of such indebtedness, such amounts shall be collected, enforced and received by
the Guarantor as trustee for the Agent and the Banks and be paid over to the
Agent on behalf of the Banks on account of the Obligations without affecting in
any manner the liability of the Guarantor under the other provisions of this
Guaranty.
7. SECURITY; SET-OFF. The Guarantor hereby grants to the Agent and the
Banks, as security for the full and punctual payment and performance of the
Guarantor's obligations hereunder, a continuing lien
-4-
on and security interest in all securities or other property belonging to the
Guarantor now or hereafter held by the Agent or any Bank and in all deposits
(general or special, time or demand, provisional or final) and other sums
credited by or due from the Agent or any Bank to the Guarantor or subject to
withdrawal by the Guarantor; and regardless of the adequacy of any collateral or
other means of obtaining repayment of the Obligations, the Agent and each Bank
are hereby authorized at any time and from time to time during the continuance
of a Default or an event of Default, without notice to the Guarantor (any such
notice being expressly waived by the Guarantor) and to the fullest extent
permitted by law, to set off and apply such deposits and other sums against the
obligations of the Guarantor under this Guaranty, whether or not the Agent and
the Banks shall have made any demand under this Guaranty and although such
obligations may be contingent or unmatured.
8. FURTHER ASSURANCES. The Guarantor agrees to do all such things and
execute all such documents, including financing statements, which may be
reasonably necessary or desirable to give full effect to this Guaranty and to
protect and preserve the rights and powers of the Agent and the Banks hereunder.
9. TERMINATION; REINSTATEMENT. This Guaranty shall remain in full force
and effect until the payment in full of the Obligations. This Guaranty shall
continue to be effective or be reinstated if at any time any payment made or
value received with respect to an Obligation is rescinded or must otherwise be
returned by the Agent or any Bank upon the insolvency, bankruptcy or
reorganization of any Customer, or otherwise, all as though such payment had not
been made or value received.
10. SUCCESSORS AND ASSIGNS. This Guaranty shall be binding upon the
Guarantor, and its respective heirs, trustees, successors and assigns, and shall
inure to the benefit of and be enforceable by the Agent, the Bank and their
respective successors, transferees and assigns. Without limiting the generality
of the foregoing sentence, the Agent and any Bank may assign or otherwise
transfer any agreement or any note held by it evidencing, securing or otherwise
executed in connection with the Obligations, or sell participations in any
interest therein, to any other person or entity, and such other person or entity
shall thereupon become vested, to the extent set forth in the agreement
evidencing such assignment, transfer or participation, with all the rights in
respect thereof granted to the Agent and such Bank herein.
-5-
11. AMENDMENTS AND WAIVERS. No amendment or waiver of any provision of
this Guaranty nor consent to any departure by the Guarantor therefrom shall be
effective unless the same shall be in writing and signed by the Agent and the
Banks. No failure on the part of the Agent or any Bank to exercise, and no delay
in exercising, any right hereunder shall operate as a waiver thereof; nor shall
any single or partial exercise of any right hereunder preclude any other or
further exercise thereof or the exercise of any other right.
12. NOTICES. All notices and other communications called for hereunder
shall be made in writing and, unless otherwise specifically provided herein,
shall be deemed to have been duly made or given when delivered by hand,
overnight mail or mailed first class certified mail postage prepaid, return
receipt requested, addressed as follows: if to the Guarantor, at the address set
forth beneath its respective signature hereto, and if to the Agent and the
Banks, at Xxx XxxxXxxxxx Xxxxx, Xxxxxxxxxx, Xxxxx Xxxxxx 00000, Attention: Xxxxx
X. St. Xxxxxx, or at such address as either party may designate in writing.
13. GOVERNING LAW; CONSENT TO JURISDICTION. This Guaranty shall be
governed by, and construed in accordance with, the laws of the State of
Connecticut. The Guarantor agrees that any suit for the enforcement of this
Guaranty may be brought in the courts of the State of Connecticut or any Federal
Court sitting therein and consents to the non-exclusive jurisdiction of such
court and to service of process in any such suit being made upon the Guarantor
by mail at the addresses specified in Section 12 hereof. The Guarantor 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 was brought in an inconvenient court.
14. MISCELLANEOUS. This Guaranty constitutes the entire agreement of
the Guarantor with respect to the matters set forth herein. The rights and
remedies herein provided are cumulative and not exclusive of any remedies
provided by law or any other agreement, and this Guaranty shall be in addition
to any other guaranty of the Obligations. The invalidity or unenforceability of
any one or more sections of this Guaranty shall not affect the validity or
enforceability of its remaining provisions. Captions are for the ease of
reference only and shall not affect the meaning of the relevant provisions. The
meanings of all defined terms used in this Guaranty shall be equally applicable
to the singular and plural forms of the terms defined.
15. WAIVER OF JURY TRIAL; CONSENT TO JURISDICTION. The Guarantor hereby
waives the Guarantor's right to
-6-
a jury trial with respect to: (i) any action or claim arising out of any dispute
in connection with this Guaranty, any rights or obligations hereunder or the
performance of such rights and obligations; and, (ii) any action or claim
arising out of any dispute in connection with the Credit Agreement or any
document, agreement or instrument executed in connection therewith
(collectively, with the Credit Agreement and this Guaranty, the "Loan
Documents"). Except as prohibited by law, the Guarantor hereby waives any right
the Guarantor may have to claim or recover in any litigation referred to in the
preceding sentence any special, exemplary, punitive or consequential damages or
any damages other than, or in addition to, actual damages. The Guarantor (a)
certifies that no representative, agent or attorney of the Agent or any Bank has
represented, expressly or otherwise, that the Agent or such Bank would not, in
the event of litigation, seek to enforce the foregoing waivers and (b)
acknowledges that the Agent and the Banks have been induced to give credit to
such Customer by, among other things, the waivers and certifications contained
herein.
The Guarantor hereby further agrees that the following courts: (i)
State Court-any state or local court of the State of Connecticut; and (ii)
Federal Court-United States District Court for the District of Connecticut, or
at the option of the Banks and the Agent, any court in which the Banks and the
Agent shall initiate legal or equitable proceedings and which has subject matter
and personal jurisdiction over the matter and parties in controversy, shall have
exclusive jurisdiction to hear and determine any claims or disputes between the
undersigned and the Banks and the Agent pertaining directly or indirectly to the
Loan Documents or to any matter arising therefrom. The Guarantor expressly
submits and consents in advance to such jurisdiction in any action or proceeding
commenced in such courts, hereby waiving personal service of the summons and
complaint, or other process or papers issued therein, and agreeing that service
of such summons and complaint, or other process or papers, may be made by
registered or certified mail, return receipt requested, addressed to the
undersigned at the address set forth below. Should the Guarantor fail to appear
or answer any summons, complaint, process or papers so served within thirty (30)
days after the mailing thereof, the Guarantor shall be deemed in default and an
order and/or judgment may be entered against the Guarantor as demanded or prayed
for in such summons, complaint, process or papers.
The exclusive choice of forum set forth in this Guaranty shall not be
deemed to preclude the enforcement of any judgment obtained in such forum or the
taking of any action under the Loan Documents to enforce the same in any
appropriate jurisdiction.
16. PREJUDGMENT REMEDY WAIVER; OTHER WAIVERS. THE GUARANTOR
ACKNOWLEDGES THAT THIS GUARANTY IS PART OF A COMMERCIAL TRANSACTION WITHIN THE
MEANING
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OF CHAPTER 903a OF THE CONNECTICUT GENERAL STATUTES. THE GUARANTOR HEREBY WAIVES
THE GUARANTOR'S RIGHT TO NOTICE AND PRIOR COURT HEARING OR COURT ORDER UNDER
CONNECTICUT GENERAL STATUTES SECTIONS 52-278a ET. SEQ. AS AMENDED OR UNDER ANY
OTHER STATE OR FEDERAL LAW WITH RESPECT TO ANY AND ALL PREJUDGMENT REMEDIES THE
BANK MAY EMPLOY TO ENFORCE ITS RIGHTS AND REMEDIES HEREUNDER. MORE SPECIFICALLY,
THE GUARANTOR ACKNOWLEDGES THAT THE AGENT'S AND THE BANK'S ATTORNEY MAY,
PURSUANT TO CONN. GEN. STAT. SECTION 52-278F, ISSUE A WRIT FOR A PREJUDGMENT
REMEDY WITHOUT SECURING A COURT ORDER. THE GUARANTOR ACKNOWLEDGES AND RESERVES
THE GUARANTOR'S RIGHT TO NOTICE AND A HEARING SUBSEQUENT TO THE ISSUANCE OF A
WRIT FOR PREJUDGMENT REMEDY AS AFORESAID AND THE AGENT AND THE BANK ACKNOWLEDGES
THE GUARANTOR'S RIGHT TO SAID HEARING SUBSEQUENT TO THE ISSUANCE OF SAID WRIT.
IN WITNESS WHEREOF, the Guarantor has caused this Guaranty to be
executed and delivered as of the date first appearing above.
-------------------------------------
By:
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Name:
Title:
Address:
----------------------
Telephone:
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Telecopy:
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