EXHIBIT 10.3
________________________________________________________________________________
________________________________________________________________________________
AMENDED AND RESTATED REVOLVING CREDIT AGREEMENT
dated as of November 24, 1997
among
Security Capital Atlantic Incorporated,
The Banks Listed Herein
and
Xxxxxx Guaranty Trust Company of New York,
as Agent
________________________________________________________________________________
________________________________________________________________________________
AMENDED AND RESTATED REVOLVING CREDIT AGREEMENT
THIS AMENDED AND RESTATED REVOLVING CREDIT AGREEMENT, dated as of
November __, 1997, among SECURITY CAPITAL ATLANTIC INCORPORATED, the BANKS
listed on the signature pages hereof and XXXXXX GUARANTY TRUST COMPANY OF NEW
YORK, as Agent.
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, Borrower, Agent, and the Banks entered into the Revolving
Credit Agreement, dated as of December 18, 1996 (the "Initial Closing Date"), as
--------------------
amended by First Amendment to Revolving Credit Agreement, dated as of April 11,
1997, and by Second Amendment to Revolving Credit Agreement (as amended, the
"Existing Credit Agreement"); and
-------------------------
WHEREAS, the parties hereto have agreed to amend and restate the terms
and conditions contained in the Existing Credit Agreement in their entirety as
hereinafter set forth.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
I. The Existing Credit Agreement is hereby modified so that all of
the terms and conditions of the aforesaid Existing Credit Agreement shall be
restated in their entirety as set forth herein, and the Borrower agrees to
comply with and be subject to all of the terms, covenants and conditions of this
Agreement.
II. This Agreement shall be binding upon and inure to the benefit of
the parties hereto, and their respective successors and assigns, and shall be
deemed to be effective as of the date hereof.
III. Any reference to the Existing Credit Agreement in the Notes, any
other Loan Document or any other document executed in connection with this
Agreement shall be deemed to refer to this Agreement.
ARTICLE I
DEFINITIONS
SECTION 1.01. Definitions. The following terms, as used herein, have
-----------
the following meanings:
"Absolute Rate Auction" means a solicitation of Money Market Quotes
---------------------
setting forth Money Market Absolute Rates pursuant to Section 2.03.
"Adjusted EBITDA" means EBITDA less an amount equal to (i) the Unit
---------------
Amount for each unit for each Real Property Asset which is 100% owned in fee or
leasehold directly or indirectly by the Borrower and its wholly-owned
Subsidiaries and (ii) the Borrower's pro-rata share of the Unit Amount for each
unit for each Real Property Asset which is not 100% owned or leased, directly or
indirectly, by the Borrower and its wholly-owned Subsidiaries. Notwithstanding
anything to the contrary contained herein, the Unit Amount shall not be applied
to any Construction Assets.
"Adjusted London Interbank Offered Rate" has the meaning set forth in
--------------------------------------
Section 2.07(b).
"Adjusted Net Operating Income" means, when used with respect to any
-----------------------------
parcel of real property, Net Operating Income less an amount equal to the Unit
Amount for each unit in the subject property.
"Administrative Questionnaire" means, with respect to each Bank, an
----------------------------
administrative questionnaire in the form prepared by the Agent and submitted to
the Agent (with a copy to the Borrower) duly completed by such Bank.
"Administrative Services Contract" means an administrative services
--------------------------------
contract with Group or an Affiliate.
"Affiliate" of any specified Person means any other Person directly or
---------
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. An Affiliate of the Borrower or any
Subsidiary includes, without limitation, (i) any officer or director of such
Person and (ii) any record or beneficial owner of more than 10% of any class of
Equity Interests of such Person; provided that, for purposes of this clause
(ii), so long as Group owns beneficially more
-2-
than 45% of each class of Equity Interests of the Borrower, an Affiliate of the
Borrower for purposes of clause (ii) shall not include any record or beneficial
owner of less than 20% of any class of Equity Interests of the Borrower. For
purposes of this definition "control" of any Person means the power to direct
the management and policies of such Person, directly or indirectly, whether
through the ownership of Equity Interests, by contract or otherwise, and the
terms "controlling" and "controlled" have meanings correlative to the foregoing.
"Agent" means Xxxxxx Guaranty Trust Company of New York in its
-----
capacity as agent for the Banks hereunder, and its successors in such
capacity.
"Agreement" means this Revolving Credit Agreement, as it may be
---------
amended, supplemented or otherwise modified from time to time.
"Applicable Lending Office" means, with respect to any Bank, (i) in
-------------------------
the case of its Base Rate Loans, its Domestic Lending Office, (ii) in the case
of its Euro-Dollar Loans, its Euro-Dollar Lending Office, and (iii) in the case
of its Money Market Loans, its Money Market Lending Office.
"Applicable Margin" means, with respect to each Loan, the respective
-----------------
percentages per annum determined, at any time, based on the range into which the
Borrower's Credit Rating then falls, in accordance with the table set forth
below. Any change in the Borrower's Credit Rating causing it to move to a
different range on the table shall effect an immediate change in the Applicable
Margin. In the event that the Borrower receives two (2) Credit Ratings that are
not equivalent, the Applicable Margin shall be determined by the lower of such
two (2) Credit Ratings. In the event that the Borrower receives more than two
(2) Credit Ratings, and such ratings are not equivalent, the Applicable Margin
shall be determined by the lower of the two (2) highest ratings, provided that
each of said two (2) highest ratings shall be Investment Grade Ratings and at
least one of which shall be an Investment Grade Rating from S&P or Xxxxx'x.
Applicable
Range of Borrower's Margin for Applicable
Credit Rating Base Rate Margin for Euro
(Applicable Loans Dollar Loans
annum) Ratings) (% per annum) (% per
----------- -------- ------------- ------
-3-
BBB+/Baa1 0.0 0.60
BBB/Baa2 0.0 0.75
BBB-/Baa3 0.0 0.9625
Non-Invest-
ment Grade
or not rated 0.0 1.1875
"Assignee" has the meaning set forth in Section 9.06(c).
--------
"Available Commitment" means, with respect to each Bank, at any time,
--------------------
the amount obtained by multiplying such Bank's Commitment at such time by a
fraction, the numerator of which is the Total Available Commitments (as the same
may be reduced pursuant to Sections 2.09 and 2.10) at such time and the
denominator of which is $350,000,000.
"Bank" means each bank listed on the signature pages hereof, each
----
Assignee which becomes a Bank pursuant to Section 9.06(c), and their respective
successors and each Designated Lender; provided, however, that the term "Bank"
-------- ------- ----
shall exclude each Designated Lender when used in reference to a Committed Loan,
the Commitments or terms relating to the Committed Loans and the Commitments and
shall further exclude each Designated Lender for all other purposes hereunder
except that any Designated Lender which funds a Money Market Loan shall, subject
to Section 9.06(d), have the rights (including the rights given to a Bank
contained in Section 9.03 and otherwise in Article 9) and obligations of a Bank
associated with holding such Money Market Loan.
"Base Rate" means, for any day, a rate per annum equal to the higher
---------
of (i) the Prime Rate for such day and (ii) the sum of 1/2 of 1% plus the
Federal Funds Rate for such day.
"Base Rate Loan" means a Committed Loan which bears interest at the
--------------
Base Rate pursuant to the applicable Notice of Committed Borrowing or Notice of
Interest Rate Election or the provisions of Section 2.06(c) or Article VIII.
"Benefit Arrangement" means at any time an employee benefit plan
-------------------
within the meaning of Section 3(3) of ERISA which is not a Plan or a
Multiemployer Plan and which is maintained or otherwise contributed to by any
member of the ERISA Group.
-4-
"Borrower" means Security Capital Atlantic Incorporated, a Maryland
--------
corporation, and its successors.
"Borrowing" has the meaning set forth in Section 1.03.
---------
"Capital Expenditures" means, for any period, the sum of all
--------------------
expenditures (whether paid in cash or accrued as a liability) by the Borrower
which are capitalized on the balance sheet of the Borrower in conformity with
GAAP.
"Closing Date" means the date on or after the Effective Date on which
------------
the conditions set forth in Section 3.01 shall have been satisfied to the
satisfaction of the Lead Agent.
"Combined Debt Service" means, as of any date of determination, the
---------------------
sum of (i) Debt Service payable in connection with Real Property Assets owned
100% by the Borrower or any wholly-owned Subsidiary, and (ii) Borrower's pro
rata share (such share being based upon the Borrower's percentage ownership
interest) of Debt Service payable in connection with investments in joint
ventures, whether consolidated or unconsolidated of Borrower or its wholly-owned
Subsidiaries.
"Combined Interest Expense" means, as of any date of determination,
-------------------------
the sum of (i) Interest Expense of the Borrower or any wholly-owned Subsidiary,
and (ii) the Borrower's pro rata share (such share being based upon the
Borrower's percentage ownership interest) of Interest Expense with respect to
investments in joint ventures, whether consolidated or unconsolidated of the
Borrower or its wholly-owned Subsidiaries.
"Commitment" means, with respect to each Bank, the amount set forth
----------
opposite the name of such Bank on the signature pages hereof, as such amount may
be reduced from time to time pursuant to Sections 2.09 and 2.10.
"Commitment Reduction Date" means the last day of each of six
-------------------------
consecutive six-month periods, the first such day being the last day of the six-
month period immediately following the Conversion Date and the last such day
being the third anniversary of the Conversion Date.
"Committed Loan" means a loan made by a Bank pursuant to Section 2.01;
--------------
provided that, if any such loan or loans (or portions thereof) are combined or
--------
subdivided pursuant to a Notice of Interest Rate Election, the term "Committed
Loan" shall refer to the combined principal amount resulting from such
combination or to each of the separate principal amounts resulting from such
subdivision, as the case may be.
-5-
"Consolidated Capital Expenditures" means, for any period, the product
---------------------------------
of (A) the Unit Amount, and (B) the sum of the number of units contained in all
completed properties as of the last day of each month during the applicable
twelve month period, divided by 12, except to the extent that actual capital
expenditures in the aggregate exceed for such period amounts raised by the
Borrower and its Subsidiaries pursuant to (x) equity offerings, (y) borrowings
from third parties (including borrowings pursuant to this Agreement) and (z)
undistributed Funds From Operations, in which case the excess shall also be
deemed to be Consolidated Capital Expenditures.
"Consolidated Subsidiary" means, at any date, any Subsidiary or other
-----------------------
entity which the Borrower owns the majority economic interest in or property of,
the accounts of which would be consolidated with those of the Borrower in its
consolidated financial statements if such statements were prepared as of such
date.
"Consolidated Tangible Net Worth" means, at any date, the consolidated
-------------------------------
stockholders' equity of the Borrower and its Consolidated Subsidiaries, plus any
accumulated depreciation, less their consolidated Intangible Assets, all
determined as of such date. For purposes hereof, "Intangible Assets" means the
-----------------
amount (to the extent reflected in determining such consolidated stockholders'
equity) of (i) all write-ups (other than write-ups resulting from foreign
currency translations and write-ups of assets of a going concern business made
within twelve months after the acquisition of such business) subsequent to
September 30, 1997 in the book value of any asset owned by the Borrower or a
Consolidated Subsidiary and (ii) all unamortized debt discount and expense,
unamortized deferred charges, goodwill, patents, trademarks, service marks,
trade names, anticipated future benefit of tax loss carry-forwards, copyrights,
organization expenses and other intangible assets.
"Construction Assets" shall mean, as of any date, the Real Property
-------------------
Assets listed on Exhibit C attached hereto and made a part hereof, subject to
---------
adjustment, each of which is not subject to any Lien, unless the same is being
contested in good faith and the same is discharged, bonded or paid off within
sixty (60) days of the filing of such Lien, on which construction of
improvements has begun (as evidenced by foundation excavation) but have not yet
been substantially completed (as such completion shall be evidenced by (i)
being not less than 90% complete, (ii) the issuance of a permanent certificate
of occupancy or its equivalent, (iii) the commencement of the payment of rent by
tenants of such Real Property Asset and (iv) being more than 85% leased to
tenants).
-6-
"Conversion Date" has the meaning set forth in Section 2.01(d).
---------------
"Conversion Option" has the meaning set forth in Section 2.01(d).
-----------------
"Credit Rating" means the rating assigned by the Rating Agencies to
-------------
Borrower's senior unsecured long term indebtedness.
"D&P" means Duff & Xxxxxx Credit Rating Co.
---
"Debt" of any Person means, at any date, without duplication, as shown
----
on such Person's balance sheet as prepared in accordance with GAAP (i) all
obligations of such Person for borrowed money, (ii) all obligations of such
Person evidenced by bonds, debentures, notes or other similar instruments,
(iii) all obligations of such Person to pay the deferred purchase price of
property or services, except trade accounts payable arising in the ordinary
course of business, (iv) all obligations of such Person as lessee which are
capitalized in accordance with generally accepted accounting principles, (v) all
Debt secured by a Lien on any asset of such Person, whether or not such Debt is
otherwise an obligation of such Person, (vi) all Debt of others guaranteed by
such Person, (vii) accounts payable, dividends of any kind or character or other
proceeds payable with respect to any stock and accrued expenses which in the
aggregate are in excess of five percent (5%) of the undepreciated value of the
assets of the Borrower determined in accordance with GAAP, (viii) all contingent
obligations of such Person and (ix) all guaranty obligations of such Person,
whether for Debt or otherwise, not shown on such Person's balance sheet.
"Debt Service" shall mean, measured as of the last day of each
------------
calendar quarter, an amount equal to the sum of (i) Interest Expense actually
payable by Borrower for the previous four consecutive quarters including the
quarter then ended, plus (ii) regularly scheduled payments of principal on
such Debt, whether or not paid by Borrower (excluding balloon payments and
scheduled balloon amortization payments) for the previous four consecutive
quarters including the quarter then ended.
"Default" means any condition or event which constitutes an Event of
-------
Default or which with the giving of notice or lapse of time or both would,
unless cured or waived, become an Event of Default.
"Designated Lender" means a special purpose corporation that (i)
-----------------
shall have become a party to this Agreement
-7-
pursuant to Section 9.06(d), and (ii) is not otherwise a Bank.
"Designated Lender Notes" means promissory notes of the Borrower,
-----------------------
substantially in the form of Exhibit A-1 hereto, evidencing the obligation of
the Borrower to repay Money Market Loans made by Designated Lenders, and
"Designated Lender Note" means any one of such promissory notes issued under
Section 9.06(d) hereof.
"Designating Lender" shall have the meaning set forth in Section
------------------
9.06(d) hereof.
"Designation Agreement" means a designation agreement in
---------------------
substantially the form of Exhibit G attached hereto, entered into by a Bank and
a Designated Lender and accepted by the Lead Agent.
"Domestic Business Day" means any day except a Saturday, Sunday or
---------------------
other day on which commercial banks in New York City and Los Angeles are
authorized by law to close.
"Domestic Lending Office" means, as to each Bank, its office located
-----------------------
at its address set forth in its Administrative Questionnaire (or identified in
its Administrative Questionnaire as its Domestic Lending Office) or such other
office as such Bank may hereafter designate as its Domestic Lending Office by
notice to the Borrower and the Agent.
"EBITDA" means an amount derived from (i) net earnings plus (ii)
------
depreciation, amortization, interest expense and income taxes plus or minus
(iii) any losses or gains resulting from sales, write-downs, write-ups, write-
offs or other valuation adjustments of assets or liabilities, in each case, as
determined on a consolidated basis in accordance with GAAP.
"Effective Date" means the date this Agreement becomes effective in
--------------
accordance with Section 9.09.
"Eligible Assignee" means (a) a commercial bank, trust company,
-----------------
insurance company, investment bank or pension fund organized under the laws of
the United States of America, or any state thereof, and having total assets in
excess of $5,000,000,000; (b) a savings and loan association or savings bank
organized under the laws of the United States of America, or any state thereof,
and having a tangible net worth of at least $500,000,000; (c) a commercial bank
organized under the laws of any other country which is a member of the
Organization for Economic Cooperation and Development ("OECD"), or a political
subdivision of any such country, and having total assets in excess of
$10,000,000,000, pro-
-8-
vided that such bank is acting through a branch or agency located in the United
States of America; or (d) the central bank of any country which is a member of
the OECD.
"Environmental Claim" means, with respect to any Person, any written
-------------------
notice, claim, demand or similar communication by any other Person alleging
potential liability for investigatory costs, cleanup costs, governmental
response costs, natural resources damage, property damages, personal injuries,
fines or penalties arising out of, based on or resulting from (i) the presence,
or release into the environment, of any Hazardous Substances at any location,
whether or not owned by such Person or (ii) circumstances forming the basis of
any violation, or alleged violation, of any Environmental Law, in each case as
to which there is a reasonable possibility of an adverse determination with
respect thereto and which, if adversely determined, could have a Material
Adverse Effect.
"Environmental Laws" means any and all federal, state, local and
------------------
foreign statutes, laws, judicial decisions, regulations, ordinances, rules,
judgments, orders, decrees, plans, injunctions, permits, concessions, grants,
franchises, licenses, agreements and other governmental restrictions relating to
the environment, the effect of the environment on human health or to emissions,
discharges or releases of pollutants, contaminants, Hazardous Substances or
wastes into the environment including, without limitation, ambient air, surface
water, ground water, or land, or otherwise relating to the manufacture,
processing, distribution, use, treatment, storage, disposal, transport or
handling of pollutants, contaminants, Hazardous Substances or wastes or the
clean-up or other remediation thereof.
"Equity Interests" means any and all shares of common stock or
----------------
equivalent equity or ownership interests, participations, rights or other
equivalents, however designated (other than warrants or other options which have
not been exercised) in a corporation or in any other Person (including, without
limitation, equivalent general or limited partnership interests in any
partnership).
"ERISA" means the Employee Retirement Income Security Act of 1974, as
-----
amended, or any successor statute.
"ERISA Group" means the Borrower, any Subsidiary and all members of a
-----------
controlled group of corporations and all trades or businesses (whether or not
incorporated) under common control which, together with the Borrower or any
Subsidiary, are treated as a single employer under Section 414 of the Internal
Revenue Code.
-9-
"Euro-Dollar Business Day" means any Domestic Business Day on which
------------------------
commercial banks are open for international business (including dealings in
dollar deposits) in London.
"Euro-Dollar Lending Office" means, as to each Bank, its office,
--------------------------
branch or affiliate located at its address set forth in its Administrative
Questionnaire (or identified in its Administrative Questionnaire as its Euro-
Dollar Lending Office) or such other office, branch or affiliate of such Bank as
it may hereafter designate as its Euro-Dollar Lending Office by notice to the
Borrower and the Agent.
"Euro-Dollar Loan" means a Committed Loan which bears interest at a
----------------
rate calculated by reference to the London Interbank Offered Rate pursuant to
the applicable Notice of Committed Borrowing or Notice of Interest Rate
Election.
"Euro-Dollar Reference Bank" means the principal London office of
--------------------------
Xxxxxx Guaranty Trust Company of New York.
"Euro-Dollar Reserve Percentage" has the meaning set forth in Section
------------------------------
2.07(b).
"Event of Default" has the meaning set forth in Section 6.01.
----------------
"Facility Fee" means the respective percentages per annum determined,
------------
at any time, based on the range into which the Borrower's Credit Rating then
falls, in accordance with the table set forth below. Any change in the
Borrower's Credit Rating causing it to move to a different range on the table
shall effect an immediate change in the Facility Fee. In the event that the
Borrower receives two (2) Credit Ratings that are not equivalent, the Facility
Fee shall be determined by the lower of such two (2) Credit Ratings. In the
event that the Borrower receives more than two (2) Credit Ratings, and such
ratings are not equivalent, the Facility Fee shall be determined by the lower of
the two (2) highest ratings, provided that each of said two (2) highest ratings
shall be Investment Grade Ratings and at least one of which shall be an
Investment Grade Rating from S&P or Xxxxx'x.
Range of Borrower's
Credit Rating
(Applicable Facility Fee
Ratings) (% per annum)
------- ------------
BBB+/Baa1 0.15
-10-
BBB/Baa2 0.15
XXX-/Xxx0 0.0000
Xxx-Xxxxxx-
ment Grade
or not rated 0.1875
"Federal Funds Rate" means, for any day, the rate per annum (rounded
------------------
upward, if necessary, to the nearest 1/100th of 1%) equal to the weighted
average of the rates on overnight Federal funds transactions with members of the
Federal Reserve System arranged by Federal funds brokers on such day, as
published by the Federal Reserve Bank of New York on the Domestic Business Day
next succeeding such day; provided that (i) if such day is not a Domestic
--------
Business Day, the Federal Funds Rate for such day shall be such rate on such
transactions on the next preceding Domestic Business Day as so published on the
next succeeding Domestic Business Day, and (ii) if no such rate is so published
on such next succeeding Domestic Business Day, the Federal Funds Rate for such
day shall be the average rate quoted to Xxxxxx Guaranty Trust Company of New
York on such day on such transactions as determined by the Agent.
"Fitch" means Fitch Investors Service Inc.
-----
"Fixed Rate Loans" means Euro-Dollar Loans.
----------------
"Funds From Operations" means an amount derived from (i) net earnings
---------------------
plus (ii) depreciation and amortization plus or minus (iii) any losses or
gains resulting from sales, write-downs, write-ups, write-offs or other
valuation adjustments of assets or liabilities, in each case, as determined on a
consolidated basis in accordance with GAAP.
"GAAP" means generally accepted accounting principles recognized as
----
such in the opinions and pronouncements of the Accounting Principles Board and
the American Institute of Certified Public Accountants and Board or in such
other statements by such other entity as may be approved by a significant
segment of the accounting profession, which are applicable to the circumstances
as of the date of determination.
"Group" means Security Capital Group Incorporated, a Maryland
-----
corporation, and its successors.
"Gross Asset Value" shall mean the sum of (x) the aggregate book value
-----------------
of the Real Property Assets which are multifamily residential property and are
at least 85% leased to tenants, plus any accumulated depreciation, and (y) 50%
-11-
of the aggregate book value of the Construction Assets which are multifamily
residential property, all determined in accordance with GAAP as of the
applicable date.
"Guarantee" by any Person means any obligation, contingent or
---------
otherwise, of such Person directly or indirectly guaranteeing any Debt or other
obligation of any other Person and, without limiting the generality of the
foregoing, any obligation, direct or indirect, contingent or otherwise, of such
Person (i) to purchase or pay (or advance or supply funds for the purchase or
payment of) such Debt or other obligation (whether arising by virtue of
partnership arrangements, by agreement to keep-well, to purchase assets, goods,
securities or services, to take-or-pay, or to maintain financial statement
conditions or otherwise) or (ii) entered into for the purpose of assuring in any
other manner the obligee of such Debt or other obligation of the payment thereof
or to protect such obligee against loss in respect thereof (in whole or in
part); provided that the term "Guarantee" shall not include endorsements for
--------
collection or deposit in the ordinary course of business. The term "Guarantee"
used as a verb has a corresponding meaning.
"Hazardous Substances" means any toxic, radioactive, caustic or
--------------------
otherwise hazardous substance, including petroleum, its derivatives, by-products
and other hydrocarbons, asbestos or any substance having any constituent
elements displaying any of the foregoing characteristics.
"Historical Value" means the purchase price of any Property
----------------
(including improvements) and ordinary related purchase transaction costs, plus
the cost of subsequent capital improvements made by the Borrower, less any
provision for losses, all determined in accordance with GAAP. If the Property is
purchased as part of a group of properties, the Historical Value shall be
calculated based upon a reasonable allocation of the aggregate purchase price
by the Borrower for all purposes, consistent with GAAP.
"Homestead Investment" means an Investment in Homestead Village
--------------------
Incorporated ("Homestead"), which Investment when made shall not exceed in the
---------
aggregate (a) 30% of the common stock of Homestead, (b) 30% in warrants of Home-
stead, (c) $115,000,000, determined at cost, in convertible mortgages with
respect to the assets of Homestead, or (d) 20% of the Consolidated Tangible Net
Worth of the Borrower.
"Indemnitee" has the meaning set forth in Section 9.03(b).
----------
"Interest Expense" means, measured as of the last day of any calendar
----------------
quarter, an amount equal to the interest
-12-
(whether accrued, paid or capitalized) actually payable by Borrower on its Debt
for the previous four consecutive quarters including the quarter then ended,
exclusive of capitalized interest relating to Construction Assets and
development activity.
"Interest Period" means (1) with respect to each Euro-Dollar
---------------
Borrowing, the period commencing (x) on the date of such Borrowing specified in
the applicable Notice of Committed Borrowing or (y) on the date specified in the
applicable Notice of Interest Rate Election and ending in either case 1, 2, 3 or
6 months thereafter, as the Borrower may elect in the applicable notice;
provided that:
--------
(a) any Interest Period which would otherwise end on a day
which is not a Euro-Dollar Business Day shall be extended to the next
succeeding Euro-Dollar Business Day unless such Euro-Dollar Business Day
falls in another calendar month, in which case such Interest Period shall
end on the next preceding Euro-Dollar Business Day;
(b) any Interest Period which begins on the last Euro-Dollar
Business Day of a calendar month (or on a day for which there is no
numerically corresponding day in the calendar month at the end of such
Interest Period) shall, subject to clause (c) below, end on the last
Euro-Dollar Business Day of a calendar month; and
(c) if any Interest Period includes a date on which a payment of
principal of the Loans is required to be made under Section 2.10 but does
not end on such date, then (i) the principal amount (if any) of each Euro-
Dollar Loan required to be repaid on such date shall have an Interest
Period ending on such date and (ii) the remainder (if any) of each such
Euro-Dollar Loan shall have an Interest Period determined as set forth
above,
(2) with respect to each Base Rate Borrowing, the period commencing on the
date of such Borrowing and ending 30 days thereafter or any subsequent period of
30 days, in each case commencing on the last day of the preceding Interest
Period; provided that:
--------
(a) any Interest Period (other than an Interest Period
determined pursuant to clause (b)(i) below) which would otherwise end on a
day which is not a Euro-Dollar Business Day shall be extended to the next
succeeding Euro-Dollar Business Day;
-13-
(b) if any Interest Period includes a date on which a payment of
principal of the Loans is required to be made under Section 2.10 but does
not end on such date, then (i) the principal amount (if any) of each Base
Rate Loan required to be repaid on such date shall have an Interest Period
ending on such date and (ii) the remainder (if any) of each such Base Rate
Loan shall have an Interest Period determined as set forth above; and
(3) with respect to each Money Market LIBOR Loan, the period commencing on
the date of borrowing specified in the applicable Notice of Borrowing and ending
1, 2, 3 or 6 months thereafter, as the Borrower may elect in the applicable
Notice of Money Market Borrowing in accordance with Section 2.03; provided that:
--------
(a) any Interest Period which would otherwise end on a day which is
not a Euro-Dollar Business Day shall be extended to the next succeeding
Euro-Dollar Business Day unless such Euro-Dollar Business Day falls in
another calendar month, in which case such Interest Period shall end on the
next preceding Euro-Dollar Business Day;
(b) any Interest Period which begins on the last Euro-Dollar Business
Day of a calendar month (or on a day for which there is no numerically
corresponding day in the calendar month at the end of such Interest Period)
shall, subject to clause (c) below, end on the last Euro-Dollar Business
Day of a calendar month;
(c) if any Interest Period includes a date on which a payment of
principal of Loans is required to be made under Section 2.12 but does not
end on such date, then (i) the principal amount (if any) of each Money
Market LIBOR Loan required to be repaid on such date and (ii) the remainder
(if any) of each such Money Market LIBOR Loan shall have an Interest Period
determined as set forth above; and
(d) any Interest Period which would otherwise end after the Maturity
Date shall end on the Maturity Date.
(4) with respect to each Money Market Absolute Rate Loan, the period
commencing on the date of borrowing specified in the applicable Notice of
Borrowing and ending such number of days thereafter (but not less than 14 days)
as the Borrower may elect in accordance with Section 2.03; provided that:
--------
-14-
(a) any Interest Period which would otherwise end on a day which is
not a Euro-Dollar Business Day shall be extended to the next succeeding
Euro-Dollar Business Day; and
(b) if any Interest Period includes a date on which a payment of
principal of Loans is required to be made under Section 2.12 but does not
end on such date, then (i) the principal amount (if any) of each Money
Market Absolute Rate Loan required to be repaid on such date and (ii) the
remainder (if any) of each such Money Market Absolute Rate Loan shall have
an Interest Period determined as set forth above; and
(c) any Interest Period which would otherwise end after the Maturity
Date shall end on the Maturity Date.
"Internal Revenue Code" means the Internal Revenue Code of 1986, as
---------------------
amended, or any successor statute.
"Investment" means any investment in any Person, whether by means of
----------
share purchase, capital contribution, loan, time deposit or otherwise, other
than any Permitted Investment.
"Investment Grade Rating" has the meaning set forth in Section 5.25
-----------------------
hereof.
"LIBOR Auction" means a solicitation of Money Market Quotes setting
-------------
forth Money Market Margins based on the London Interbank Offered Rate pursuant
to Section 2.03.
"Lien" means, with respect to any asset, any mortgage, lien, pledge,
----
charge, security interest or encumbrance of any kind, or any other type of
preferential arrangement that has the practical effect of creating a security
interest, in respect of such asset. For the purposes of this Agreement, the
Borrower or any Subsidiary shall be deemed to own subject to a Lien any asset
which it has acquired or holds subject to the interest of a vendor or lessor
under any conditional sale agreement, capital lease or other title retention
agreement relating to such asset.
"Loan" means a Base Rate Loan, a Euro-Dollar Loan, a Money Market Loan
----
or a Swing Loan and "Loans" means Base Rate Loans, Euro-Dollar Loans, Money
-----
Market Loans or Swing Loans or any combination of the foregoing.
"Loan Documents" means this Agreement, the Notes, each Notice of
--------------
Committed Borrowing and each Notice of Interest Rate Election.
-15-
"London Interbank Offered Rate" has the meaning set forth in Section
-----------------------------
2.07(c).
"Management Investment" means the acquisition of an one hundred
---------------------
percent (100%) of the ownership interests in the Property Manager and in the
REIT Manager.
"Material Adverse Effect" means a material adverse effect on (i) the
-----------------------
business, operations, properties, assets or financial condition of the Borrower
and its Consolidated Subsidiaries taken as a whole or (ii) the ability of the
Borrower to perform its obligations under the Loan Documents.
"Material Plan" means at any time a Plan or Plans having aggregate
-------------
Unfunded Liabilities in excess of $5,000,000.
"Material Subsidiary" means any Subsidiary of the Borrower to which
-------------------
more than $15,000,000 of Gross Asset Value is attributable.
"Minority Holdings" means partnerships, limited liability companies,
-----------------
corporations and other Persons held or owned by the Borrower which are not
consolidated with the Borrower on the Borrower's financial statements.
"Money Market Absolute Rate" has the meaning set forth in Section
--------------------------
2.03.
"Money Market Absolute Rate Loan" means a loan to be made by a Bank
-------------------------------
pursuant to an Absolute Rate Auction.
"Money Market Lending Office" means, as to each Bank, its Domestic
---------------------------
Lending Office or such other office, branch or affiliate of such Bank as it may
hereafter designate as its Money Market Lending Office by notice to the
Borrower and the Agent; provided that any Bank may from time to time by notice
--------
to the Borrower and the Agent designate separate Money Market Lending Offices
for its Money Market LIBOR Loans, on the one hand, and its Money Market Absolute
Rate Loans, on the other hand, in which case all references herein to the Money
Market Lending Office of such Bank shall be deemed to refer to either or both of
such offices, as the context may require.
"Money Market LIBOR Loan" means a loan to be made by a Bank pursuant
-----------------------
to a LIBOR Auction (including such a loan bearing interest at the Base Rate
pursuant to Section 2.03).
"Money Market Loan" means a Money Market LIBOR Loan or a Money Market
-----------------
Absolute Rate Loan.
-00-
"Xxxxx Xxxxxx Xxxxxx" has the meaning set forth in Section 2.03.
-------------------
"Money Market Quote" means an offer by a Bank to make a Money Market
------------------
Loan in accordance with Section 2.03.
"Xxxxx'x" means Xxxxx'x Investors Services, Inc. or any successor
-------
thereto.
"Multiemployer Plan" means at any time an employee pension benefit
------------------
plan within the meaning of Section 4001(a)(3) of ERISA to which any member of
the ERISA Group is then making or accruing an obligation to make contributions
or has within the preceding five plan years made contributions, including for
these purposes any Person which ceased to be a member of the ERISA Group during
such five year period.
"Net Offering Proceeds" means all cash or other assets received by
---------------------
Borrower as a result of the sale of common shares, preferred shares, partnership
interests, limited liability company interests, convertible securities or other
ownership or equity interests in Borrower or a Consolidated Subsidiary less
customary costs and discounts of issuance paid by Borrower or by a Consolidated
Subsidiary.
"Net Operating Income" means, when used with respect to any parcel of
--------------------
real property, the revenues, less operating expenses recorded in accordance with
GAAP for such property that are related to the ownership, operation or
maintenance of such property, but specifically excluding interest expense and
fees paid pursuant to the Administrative Services Contract and similar general
overhead expenses.
"New Acquisitions" means real property assets (or interests therein)
----------------
acquired by Borrower after November 1, 1997, excluding the Homestead Investment.
"New Manager" means a newly formed, wholly-owned Subsidiary of
-----------
Borrower, into which the REIT Manager and the Property Manager have been merged.
"Non-Recourse Debt" means Debt of the Borrower on a consolidated basis
-----------------
for which the right of recovery of the obligee thereof is limited to recourse
against the Real Property Assets securing such Debt (subject to such limited
exceptions to the non-recourse nature of such Debt such as fraud,
misappropriation, misapplication and environmental indemnities, as are usual and
customary in like transactions at the time of the incurrence of such Debt).
-17-
"Notes" means promissory notes of the Borrower, substantially in the
-----
form of Exhibit A-1 hereto with respect to the Swing Lender and Exhibit A-2
----------- -----------
hereto with respect to any other Bank, evidencing the obligation of the Borrower
to repay the Loans, together with any Designated Lender Notes, and "Note" means
----
any one of such promissory notes issued hereunder.
"Notice of Borrowing" means a Notice of Committed Borrowing (as
-------------------
defined in Section 2.02) or a Notice of Money Market Borrowing (as defined in
Section 2.03(f)), as the case may be.
"Notice of Interest Rate Election" has the meaning set forth in
--------------------------------
Section 2.05.
"Other Taxes" has the meaning set forth in Section 8.04(b).
-----------
"Outstanding Working Capital Amount" means the aggregate outstanding
----------------------------------
and unpaid principal balance of all Loans used for working capital purposes from
time to time; provided, that any cash flow from the Real Property Assets used by
the Borrower to purchase New Acquisitions, fund the Homestead Investment or for
Development Activity may be applied by the Borrower to reduce the Outstanding
Working Capital Amount; and provided, further, that all payments and prepayments
of principal made hereunder shall be applied first to reduce the Outstanding
Working Capital Amount.
"Parent" means, with respect to any Bank, any Person controlling such
------
Bank.
"Participant" has the meaning set forth in Section 9.06(b).
-----------
"PBGC" means the Pension Benefit Guaranty Corporation or any entity
----
succeeding to any or all of its functions under ERISA.
"Permitted Intercompany Debt" means (i) loans from the Borrower to any
---------------------------
Subsidiary, and (ii) loans between Subsidiaries, all of which loans shall be
unsecured loans, which:
(A) are evidenced by a written agreement which provides that payment
of any amounts in respect of such indebtedness shall be made only to the extent
that Net Operating Income is available to pay such amounts after the payment of
all amounts then due and payable on all other indebtedness of the borrower
(subject, however, to the accrual of unpaid amounts under such indebtedness) and
-18-
further provides that any amounts paid in violation hereof shall be held in
trust by the payee thereof for the benefit of the Banks and disgorged to the
Banks upon demand; and
(B) are evidenced by a written agreement which prohibits such Person
from exercising any remedies, including accelerating any indebtedness and
commencing any action (including the filing of a bankruptcy petition or similar
proceeding) against the borrower for collection of interest, principal or other
charges while any Note or any other amounts due hereunder are outstanding and
prohibits such Person from filing a claim in a bankruptcy or similar proceeding
commenced by the Borrower or, in whole or in part, by one or more Affiliates of
the Borrower and requires that such Affiliate shall vote against any plan
presented in such proceeding which would alter the terms of the Notes or the
Loan Documents (provided that such Person may file a claim in a bankruptcy or
similar proceeding commenced by an independent Person other than itself) unless
such plan is endorsed by the Banks.
"Permitted Investments" means (i) loans, equity investments and
---------------------
capital contributions to Atlantic Development Services Incorporated, (ii) land
and building loans to unaffiliated, third party real estate developers to fund
the costs of the development and construction of improvements on properties
which are subject to purchase contracts with the Borrower, and which loans are
secured by mortgages on such properties, (iii) cash or Temporary Cash
Investments received in an exchange under Section 1031 of the Internal Revenue
Code and (iv) the investment in the ordinary course of the Borrower's business
of undistributed Net Operating Income after payment of Debt Service on all Debt.
"Person" means an individual, a corporation, a partnership, an
------
association, a trust or any other entity or organization, including a government
or political subdivision or an agency or instrumentality thereof.
"Plan" means at any time an employee pension benefit plan (other than
----
a Multiemployer Plan) which is covered by Title IV of ERISA or subject to the
minimum funding standards under Section 412 of the Internal Revenue Code and
either (i) is maintained, or contributed to, by any member of the ERISA Group
for employees of any member of the ERISA Group or (ii) has at any time within
the preceding five years been maintained, or contributed to, by any Person which
was at such time a member of the ERISA Group for employees of any Person which
was at such time a member of the ERISA Group.
-19-
"Prime Rate" means the rate of interest publicly announced by Xxxxxx
----------
Guaranty Trust Company of New York in New York City from time to time as its
Prime Rate.
"Property" means any interest in any kind of property or asset,
--------
whether real, personal, tangible or intangible.
"Property Manager" means SCG Realty Services Atlantic Incorporated, a
----------------
Delaware corporation, and its successors, which has been merged into the New
Manager.
"Rating Agencies" means, collectively, S&P, Xxxxx'x, D&P and Fitch.
---------------
"Real Property Assets" means as of any time, the real property assets
--------------------
(including interests in participating, convertible or other mortgages in which
Borrower's interest therein is characterized as equity according to GAAP), owned
directly or indirectly by the Borrower at such time, cash received in an
exchange under Section 1031 of the Internal Revenue Code, the Homestead
Investment, as such may be modified from time to time to reflect sales,
conveyances, assignments, acquisitions or other transfers of Real Property
Assets.
"Recourse Debt" shall mean Debt of the Borrower or any Consolidated
--------------
Subsidiary that is not Non-Recourse Debt.
"Refunded Swing Loan" has the meaning set forth in Section
-------------------
2.01(a)(iii).
"Regulation U" means Regulation U of the Board of Governors of the
------------
Federal Reserve System, as in effect from time to time.
"REIT" has the meaning set forth in Section 4.15.
----
"REIT Manager" means Security Capital (Atlantic) Incorporated, a
------------
Nevada corporation, and its successors, which has been merged into the New
Manager.
"Request to Extend" has the meaning set forth in Section 2.01(c).
-----------------
"Required Banks" means at any time Banks having at least 51% of the
--------------
aggregate amount of the Commitments or, if the Commitments shall have been
terminated, holding Notes evidencing at least 51% of the aggregate unpaid
principal amount of the Loans.
-20-
"Revolver Termination Date" means November 23, 1999 or any subsequent
-------------------------
anniversary of the Closing Date to which the Revolver Termination Date has been
extended pursuant to Section 2.01(c) or any prior anniversary to which the
Revolver Termination Date has been advanced pursuant to Section 2.01(d), or,
if any such day is not a Euro-Dollar Business Day, the next succeeding Euro-
Dollar Business Day unless such Euro-Dollar Business Day falls in another
calendar month, in which case the Revolver Termination Date shall be the next
preceding Euro-Dollar Business Day.
"Revolving Credit Period" means the period from and including the
-----------------------
Closing Date to but excluding the Revolver Termination Date.
"Secured Debt" means Debt of the Borrower and its Consolidated
------------
Subsidiaries secured by a Lien.
"Stabilized" shall mean, with respect to any Real Property Asset, the
----------
earlier of (i) twelve (12) months after substantial completion of construction
or development of any new construction or development Real Property Asset, and
(ii) the date on which the occupancy level is at least eighty-five percent
(85%).
"S&P" means Standard & Poor's Ratings Services, a division of The
---
XxXxxx-Xxxx Companies, Inc., or any successor thereto.
"Subsidiary" means any corporation or other entity of which securities
----------
or other ownership interests having ordinary voting power to elect a majority of
the board of directors or other persons performing similar functions are at the
time directly or indirectly owned by the Borrower.
"Swing Lender" means Xxxxxx Guaranty Trust Company of New York, in its
------------
capacity as the Swing Lender under the Swing Loan Facility described in Section
2.01(a)(ii), and its successors in such capacity.
"Swing Loan" means a Loan made by the Swing Lender pursuant to Section
----------
2.01(a)(ii).
"Swing Loan Commitment" means $25,000,000 or if less, the aggregate
---------------------
amount of the Commitments.
"Swing Loan Refund Amount" has the meaning set forth in Section
------------------------
2.01(a)(iii).
"Temporary Cash Investment" means any Investment in (i) direct
-------------------------
obligations of the United States or any agency thereof, or obligations
guaranteed by the United States or
-21-
any agency thereof, (ii) commercial paper rated at least A-1 by S&P or P-1 by
Xxxxx'x, (iii) demand and time deposits with, including certificates of deposit
issued by, any office located in the United States of any bank or trust company
which is organized or licensed under the laws of the United States or any state
thereof and has capital, surplus and undivided profits aggregating at least
$1,000,000,000, (iv) cash received in an exchange under Section 1031 of the
Internal Revenue Code or (v) repurchase agreements with respect to securities
described in clause (i) above entered into with an office of a bank or trust
company meeting the criteria specified in clause (iii) above, provided in each
--------
case described in clauses (i) - (v) above that such Investment matures within
one year from the date of acquisition thereof by the Borrower or a Subsidiary,
or (vi) money market funds that invest primarily in Investments of the kind
described in clauses (i) - (v) above.
"Total Asset Value" shall mean the sum of (a) the Borrower's
-----------------
aggregate Net Operating Income (based on the immediately preceding calendar
quarter and annualized, and adjusted to exclude the Net Operating Income from
any Real Property Assets not owned for the full quarter and the Real Property
Assets described in (iii) below) divided by eight and three-fourths percent
(8.75%), plus (b) the total book value of (i) Real Property Assets acquired
during the immediately preceding calendar quarter, (ii) land not yet being
developed and (iii) land (and any improvements being constructed thereon) on
which the construction of new income producing improvements has been commenced
and is continuing and for up to six (6) months after completion of all im
provements thereon, plus (c) the amount of any cash and cash equivalents,
excluding tenant security and other restricted deposits, plus (d) the total book
value of all of the Borrower's other assets not described in (a), (b) or (c)
above, excluding intangibles and equity investments in joint ventures. Total
Asset Value shall be calculated on a consolidated basis in accordance with GAAP.
"Total Available Commitments" means, at any time of determination, the
---------------------------
least of (i) the maximum aggregate principal amount of Loans that could have
been outstanding during the most recent preceding four quarters as to which a
certificate has been delivered pursuant to Section 5.01(c) in order for the
ratio of the sum of (x) the Unencumbered Asset Pool Value and (y) 50% of the
aggregate book value of the Construction Assets which are multifamily
residential property to Unsecured Debt outstanding as of the date of
determination for such period to exceed 1.75:1 and the ratio of the aggregate
amount of the Unencumbered Asset Pool Value to Unsecured Debt outstanding as of
the date of determination to exceed 1.5:1, (ii) the aggregate amount of the Com-
-22-
mitments at such time less the amount by which Interest Expense payable on
Construction Assets and development activity exceeds EBITDA, if any, or (iii)
$350,000,000 less the amount by which Interest Expense payable on Construction
Assets and development activity exceeds EBITDA, if any. For purposes of clauses
(ii) and (iii) of this definition, Interest Expense shall be calculated based on
what would be included in Interest Expense as defined herein other than the
exclusion for capitalized interest relating to Construction Assets and
development activity.
"Unencumbered Asset Pool" means, as of any date, the Real Property
-----------------------
Assets listed on Exhibit B attached hereto and made a part hereof, subject to
---------
adjustment as set forth herein, each of which is 100% owned in fee (or leasehold
in the case of assets listed as such on Exhibit B) by the Borrower or any
---------
Consolidated Subsidiary of the Borrower and each of which is not subject to any
Lien, unless the same is being contested in good faith and the same is
discharged, bonded or paid off within sixty (60) days of the filing of such
Lien, together with all New Acquisitions or Real Property Assets, excluding the
Homestead Investment, which have become part of the Unencumbered Asset Pool as
of such date in accordance with Section 3.03 and excluding any Real Property
Asset which has been released from the Unencumbered Asset Pool under this
Agreement and the other Loan Documents as of such date in accordance with
Sections 5.23 and 5.24 and all other terms of this Agreement.
"Unencumbered Asset Pool Cash Flow" shall mean, as of any date of
---------------------------------
determination, Adjusted Net Operating Income but only with respect to the
Unencumbered Asset Pool.
"Unencumbered Asset Pool Value" means, with respect to Real Property
-----------------------------
Assets in the Unencumbered Asset Pool, for the period being measured, the lesser
of (a) the aggregate Historical Value of such Real Property Assets; and (b) the
sum of (i) for those Real Property Assets that (1) have been Stabilized for more
than the preceding twelve calendar months or (2) have been Stabilized for one,
two or three full preceding calendar quarters, the sum of the Net Operating
Income for the preceding twelve months in the case of (1) and the Net Operating
Income for the one, two or three preceding Stabilized calendar quarters, as
annualized, in the case of (2) divided by nine and one-fourth percent (9.25%),
plus (ii) the Historical Value of the remaining Real Property Assets, excluding
Construction Assets.
"Unfunded Liabilities" means, with respect to any Plan at any time,
--------------------
the amount (if any) by which (i) the value of all benefit liabilities under such
Plan, determined on a plan termination basis using the assumptions prescribed by
-23-
the PBGC for purposes of Section 4044 of ERISA, exceeds (ii) the fair market
value of all Plan assets allocable to such liabilities under Title IV of ERISA
(excluding any accrued but unpaid contributions), all determined as of the then
most recent valuation date for such Plan, but only to the extent that such
excess represents a potential liability of a member of the ERISA Group to the
PBGC or any other Person under Title IV of ERISA.
"Unit Amount" means $200 for each period of twelve months (or a pro
-----------
rata portion thereof for any shorter period).
"Unsecured Debt" means Debt which is not secured by a Lien.
--------------
"Unsecured Interest Expense" means Interest Expense of the Borrower,
--------------------------
its Consolidated Subsidiaries and Minority Holdings in connection with Unsecured
Debt of such parties.
"United States" means the United States of America, including the
-------------
States and the District of Columbia, but excluding its territories and
possessions.
SECTION 1.02. Accounting Terms and Determinations. Unless otherwise
-----------------------------------
specified herein, all accounting terms used herein shall be interpreted, all
accounting determinations hereunder shall be made, and all financial statements
required to be delivered hereunder shall be prepared in accordance with
generally accepted accounting principles as in effect from time to time, applied
on a basis consistent (except for changes concurred in by the Borrower's
independent public accountants) with the most recent consolidated financial
statements of the Borrower and its Consolidated Subsidiaries delivered to the
Banks; provided that, if the Borrower notifies the Agent that the Borrower
--------
wishes to amend any covenant in Article V to eliminate the effect of any change
in generally accepted accounting principles on the operation of such covenant
(or if the Agent notifies the Borrower that the Required Banks wish to amend
Article V for such purpose), then the Borrower's compliance with such covenant
shall be determined on the basis of generally accepted accounting principles in
effect immediately before the relevant change in generally accepted accounting
principles became effective, until either such notice is withdrawn or such
covenant is amended in a manner satisfactory to the Borrower and the Required
Banks.
SECTION 1.03. Types of Borrowings. The term "Borrowing" denotes the
------------------- ---------
aggregation of Loans of one or more Banks to be made to the Borrower pursuant to
Article II (or
-24-
a Swing Loan made solely by the Swing Lender) on the same date, all of which
Loans are of the same type (subject to Article VIII) and, except in the case of
Base Rate Loans, for the same Interest Periods. Borrowings are classified for
purposes of this Agreement by reference to the pricing of Loans comprising such
Borrowing (e.g., a "Euro-Dollar Borrowing" is a Borrowing comprised of Euro-
----
Dollar Loans) or by reference to the provisions of Article II under which
participation therein is determined (i.e., a "Committed Borrowing" is a
----
Borrowing under Section 2.01 in which all Banks participate in proportion to
their Commitments, while a "Money Market Borrowing" is a Borrowing under Section
2.03).
ARTICLE II
THE CREDITS
SECTION 2.01. Commitments to Lend.
-------------------
(a) During Revolving Credit Period. (i) During the Revolving Credit
------------------------------
Period, each Bank severally agrees, on the terms and conditions set forth in
this Agreement, to make Committed Loans to the Borrower pursuant to this Section
from time to time in amounts such that the aggregate principal amount of
Committed Loans by such Bank at any one time outstanding shall not exceed the
amount of its Available Commitment. Each Borrowing under this Section 2.01
(a)(i) shall be in an aggregate principal amount of $1,000,000 or any larger
multiple of $250,000 (except that any such Borrowing may be in the aggregate
amount available) and shall be made from the several Banks ratably in proportion
to their respective Commitments. Within the foregoing limits, the Borrower may
borrow under this Section 2.01(a)(i), prepay Loans to the extent permitted by
Section 2.09, and reborrow at any time during the Revolving Credit Period under
this subsection (a).
(ii) Swing Loans. During the Revolving Credit Period, the Swing
-----------
Lender agrees, on the terms and conditions set forth in this Agreement, to make
loans to the Borrower pursuant to this Section 2.01(a)(ii) from time to time in
amounts such that (i) the aggregate principal amount of Swing Loans does not at
any time exceed the Swing Loan Commitment, and (ii) the sum of the aggregate
outstanding principal amount of the Committed Loans, Money Market Loans and
Swing Loans at such time does not exceed the aggregate Available Commitments.
Each Borrowing under this Section 2.01(a)(ii) shall be in an aggregate principal
amount of
-25-
$1,000,000 or any larger multiple of $250,000 (except that any such Borrowing
may be in the aggregate available amount of Swing Loans determined in accordance
with the immediately preceding sentence). Within the foregoing limits, the
Borrower may borrow under this Section 2.01(a)(ii), repay or, to the extent
permitted by Section 2.11, prepay Swing Loans and reborrow at any time during
the Revolving Credit Period under this Section 2.01(a)(ii).
(iii) Conversion of Swing Loans to Loans. The Swing Lender shall, on
----------------------------------
behalf of the Borrower (which hereby irrevocably directs the Swing Lender to act
on its behalf), on notice given by the Swing Lender no later than 1:00 P.M. (New
York City time), on the Domestic Business Day immediately following the funding
of any Swing Loan, request each Bank to make, and each Bank hereby agrees to
make, a Base Rate Loan, in an amount (with respect to each Bank, its "Swing Loan
----------
Refund Amount") equal to such Bank's ratable share of the aggregate Commitments
-------------
with respect to the aggregate principal amount of the Swing Loans (the "Refunded
--------
Swing Loans") outstanding on the date of such notice, to repay the Swing Lender.
-----------
Unless any of the events described in clause (f) or (g) of Section 6.01 with
respect to the Borrower shall have occurred and be continuing (in which case the
procedures of Section 2.01(a)(iv) shall apply), each Bank shall make such Base
Rate Loan available to the Agent at its address specified in or pursuant to
Section 9.01 in immediately available funds, not later than 1:00 P.M. (New York
City time), on the Domestic Business Day immediately following the date of such
notice. The Agent shall pay the proceeds of such Loans to the Swing Lender,
which shall immediately apply such proceeds to repay Refunded Swing Loans.
Effective on the day such Loans are made, the portion of the Swing Loans so paid
shall no longer be outstanding as Swing Loans, shall no longer be due as Swing
Loans under the Note held by the Swing Lender, and shall be due as Base Rate
Loans under the respective Notes issued to the Banks (including the Swing
Lender) in accordance with their ratable share of the aggregate Commitments. The
Borrower authorizes the Swing Lender to charge the Borrower's accounts with the
Agent (up to the amount available in each such account) in order to immediately
pay the amount of such Refunded Swing Loans to the extent amounts received from
the Banks are not sufficient to repay in full such Re funded Swing Loans.
(iv) Purchase of Participations in Swing Loans. If, prior to the time
-----------------------------------------
Loans would have otherwise been made pursuant to Section 2.01(a)(iii), one of
the events described in clause (f) or (g) of Section 6.01 with respect to the
Borrower shall have occurred and be continuing, each Bank shall, on the date
such Loans were to have been made
-26-
pursuant to the notice referred to in Section 2.01(a)(iii) (the "Refunding
---------
Date"), purchase an undivided participating interest in the Swing Loans in an
----
amount equal to such Bank's Swing Loan Refund Amount. On the Refunding Date,
each Bank shall transfer to the Swing Lender, in immediately available funds,
such Bank's Swing Loan Refund Amount, and upon receipt thereof the Swing Lender
shall deliver to such Bank a Swing Loan participation certificate dated the date
of the Swing Lender's receipt of such funds and in the Swing Loan Refund Amount
of such Bank.
(v) Payments on Participated Swing Loans. Whenever, at any time
------------------------------------
after the Swing Lender has received from any Bank such Bank's Swing Loan Refund
Amount pursuant to Section 2.01(a)(iv), the Swing Lender receives any payment on
account of the Swing Loans in which the Banks have purchased participations
pursuant to Section 2.01(a)(iv), the Swing Lender will promptly distribute to
each such Bank its ratable share (determined on the basis of the Swing Loan
Refund Amounts of all of the Banks) of such payment (appropriately adjusted, in
the case of interest payments, to reflect the period of time during which such
Bank's participating interest was outstanding and funded); provided, however,
-------- -------
that in the event that such payment received by the Swing Lender is required to
be returned, such Bank will return to the Swing Lender any portion thereof
previously distributed to it by the Swing Lender.
(vi) Obligations to Refund or Purchase Participations in Swing
---------------------------------------------------------
Loans Absolute. Each Bank's obligation to transfer the amount of a Loan to the
--------------
Swing Lender as provided in Section 2.01(a)(iii) or to purchase a participating
interest pursuant to Section 2.01(a)(iv) shall be absolute and unconditional and
shall not be affected by any circumstance, including, without limitation, (i)
any set-off, counterclaim, recoupment, defense or other right which such Bank,
the Borrower or any other Person may have against the Swing Lender or any other
Person, other than the Swing Lender's gross negligence or willful misconduct in
connection with making any such Swing Loan, (ii) the occurrence or continuance
of a Default or an Event of Default or the termination or reduction of the
Commitments, (iii) any adverse change in the condition (financial or otherwise)
of the Borrower or any other Person, (iv) any breach of this Agreement by the
Borrower, any other Bank or any other Person, or (v) any other circumstance,
happening or event whatsoever, whether or not similar to any of the foregoing.
(b) After Revolving Credit Period. If the Borrower has elected the
-----------------------------
Conversion Option, each Bank severally agrees, on the terms and conditions set
forth in this Agreement, to maintain its Committed Loans outstanding on the
-27-
Conversion Date for a maximum term of three years; provided that the principal
--------
amount of such Bank's Committed Loans shall not exceed the principal amount of
its Loans outstanding on the Conversion Date; and provided, further, that the
-------- -------
aggregate principal amount of such Bank's outstanding Committed Loans shall at
no time exceed the amount of its Available Commitment. On and after the
Conversion Date, amounts prepaid or required to be repaid pursuant to Article II
shall not be reborrowed, and amounts repaid pursuant to Section 8.02 shall not
be reborrowed except as provided therein.
(c) Extension of Revolver Termination Date. The Borrower may request
--------------------------------------
a one-year extension of the Revolver Termination Date then in effect by
delivering a written request therefor to the Agent not more than sixteen months
or less than fifteen months prior to such Revolver Termination Date (a
"Request to Extend"). The Agent shall notify the Banks of the receipt of such
-----------------
request and each Bank shall give notice in writing to the Agent not less than
fourteen months prior to the Revolver Termination Date of such Bank's acceptance
or rejection of such request. If all the Banks shall have notified the Agent on
or prior to the date which is fourteen months prior to the Revolver Termination
Date that they accept such request, the Revolver Termination Date shall be
extended for one year. If any Bank shall not have notified the Agent on or prior
to the date which is fourteen months prior to the Revolver Termination Date that
it accepts such request, the Revolver Termination Date shall not be extended.
The Agent shall notify the Borrower whether the Request to Extend has been
accepted or rejected as well as which Bank or Banks rejected the Borrower's
Request to Extend (each such Bank a "Rejecting Bank").
--------------
Notwithstanding the preceding paragraph, within forty (40) days after
notification from the Agent that the Request to Extend has been rejected (a
"Notice of Rejection"), and provided that the aggregate amount of Commitments
-------------------
of the Rejecting Banks do not exceed 20% of the total aggregate amount of
Commitments then outstanding, the Borrower may by written notice to the Agent
and any Rejecting Bank exercise either or a combination of the following
options: (i) require any Rejecting Bank to assign all of its rights and
obligations under this Agreement, the Notes and the other Loan Documents to any
transferee selected by the Borrower and approved by the Agent (a "Transferee"),
----------
or (ii) prepay the entire amount of the outstanding Loan from each such
Rejecting Bank, in which case each such Rejecting Bank's Commitment shall be $0,
in each of clause (i) and (ii) pursuant to the terms and conditions set forth
below. Notwithstanding the foregoing, however, in no event the aggregate of all
Commitments of all Banks (including any
-28-
Transferee pursuant to clause (i) above) shall be less than $280,000,000.
In the event the Borrower elects the option set forth in clause (i)
above, the assignment shall occur pursuant to the terms of a Transfer
Supplement in substantially the form of Exhibit D hereto, effective no later
---------
than the fortieth (40th) day after the Borrower receives a Notice of Rejection
from the Agent, and otherwise pursuant to Section 9.06(c) hereof. On such
effective date the Transferee shall pay to such Rejecting Bank the principal
amount outstanding of the Loans assigned to it by such Rejecting Bank, together
with accrued interest thereon, as well as the accrued Commitment Fee with
respect to the Commitment of such Rejecting Bank, and, if such effective date is
not the last day of the Interest Period for each of the Loans being assigned,
the Borrower shall reimburse to the Rejecting Bank the losses and expenses
specified in Section 2.13. The Borrower shall also deliver to the Agent on such
effective date (y) an executed copy of such Assignment and Assumption Agreement
and (z) written confirmation from such Transferee that it accepts the Request to
Extend, and, upon such receipt with respect to all Transferees, the Agent shall
notify the Borrower that the Request to Extend has been accepted.
(d) Conversion Option. If the Borrower delivers a Request to Extend
-----------------
as provided in Section 2.01(c), any Bank shall not have notified the Agent on or
prior to the date which is thirty (30) days prior to the Revolver Termination
Date that it accepts such request, and such Bank has not been paid in full to
the extent of its outstanding Commitment or replaced by a Transferee accepting
such extension pursuant to Section 2.01(c), then not later than ten (10) days
after the Agent has notified the Borrower that the Request to Extend has been
rejected, if (x) no Default has then occurred and is continuing, provided that
if the Agent shall have actual notice of such Default, it shall have provided
notice thereof to the Borrower and (y) no Event of Default has then occurred and
is continuing, the Borrower may notify the Agent that it elects both to
terminate the Revolving Credit Period as of the Revolver Termination Date then
in effect (the date of such termination being the "Conversion Date") and
---------------
effective as of the Conversion Date to maintain its Loans then outstanding
pursuant to Section 2.01(b) (the "Conversion Option").
-----------------
SECTION 2.02. Notice of Committed Borrowing. The Borrower shall give
-----------------------------
the Agent notice (a "Notice of Committed Borrowing") not later than 12:00 noon
-----------------------------
(New York City time) on (x) the Domestic Business Day before each Base Rate
Borrowing, (y) the third Euro-Dollar Business Day before each
-29-
Euro-Dollar Borrowing and (z) the date of each Borrowing of a Swing Loan,
specifying:
(a) the date of such Borrowing, which shall be a Domestic Business
Day in the case of a Base Rate Borrowing or Swing Borrowing, or a Euro-Dollar
Business Day in the case of a Euro-Dollar Borrowing,
(b) the aggregate amount of such Borrowing,
(c) whether the Loans comprising such Borrowing are to be initially
Base Rate Loans, Swing Loans or Euro-Dollar Loans, provided that, all Swing
Loans shall bear interest based on the Base Rate,
(d) in the case of a Fixed Rate Borrowing, the duration of the
initial Interest Period applicable thereto, subject to the provisions of the
definition of Interest Period, and
(e) if the proceeds of the Loans are to be used for working capital
purposes, and if so, the Outstanding Working Capital Amount both immediately
before and after such Borrowing.
No more than four (4) Swing Loans may be borrowed during any calendar
month.
Notwithstanding the time frame set forth in clause (x) above, in the
event that the Money Market Quotes submitted by the Banks pursuant to Section
2.03(c) below are, in the aggregate, in an amount less than the principal amount
requested by the Borrower in the related Money Market Quote Request, then the
Borrower shall be permitted to give the Lead Agent notice of its intent to make
a Base Rate Borrowing, in the amount of the difference between accepted Money
Market Quotes and the principal amount requested by Borrower in the related
Money Market Quote Request, no later than 12:00 Noon (New York City time) on the
date of such Borrowing.
SECTION 2.03. Money Market Borrowings.
-----------------------
(a) The Money Market Option. In addition to Committed Borrowings
-----------------------
pursuant to Section 2.01, the Borrower may, as set forth in this Section,
request the Banks during the term of the Loans to make offers to make Money
Market Loans to the Borrower, not to exceed, at such time, the lesser of (i) the
Total Available Commitments and (ii) $175,000,000. The Banks may, but shall have
no obligation to, make such offers and the Borrower may, but shall have no
-30-
obligation to, accept any such offers in the manner set forth in this Section.
(b) Money Market Quote Request. When the Borrower wishes to request
--------------------------
offers to make Money Market Loans under this Section, it shall transmit to the
Agent by telex or facsimile transmission a Money Market Quote Request
substantially in the form of Exhibit E hereto so as to be received not later
---------
than 10:30 A.M. (New York City time) on (x) the fourth Euro-Dollar Business Day
prior to the date of Borrowing proposed therein, in the case of a LIBOR Auction
or (y) the Domestic Business Day next preceding the date of Borrowing proposed
therein, in the case of an Absolute Rate Auction (or, in either case, such other
time or date as the Borrower and the Agent shall have mutually agreed and shall
have notified to the Banks not later than the date of the Money Market Quote
Request for the first LIBOR Auction or Absolute Rate Auction for which such
change is to be effective) specifying:
(i) the proposed date of Borrowing, which shall be a Euro-Dollar
Business Day in the case of a LIBOR Auction or a Domestic Business Day in
the case of an Absolute Rate Auction,
(ii) the aggregate amount of such Borrowing, which shall be
$20,000,000 or a larger multiple of $1,000,000,
(iii) the duration of the Interest Period applicable thereto,
subject to the applicable provisions of the definition of Interest Period,
(iv) whether the Money Market Quotes requested are to set forth a
Money Market Margin or a Money Market Absolute Rate, and
(v) whether the Banks will be permitted to designate a Designated
Lender to fund such Money Market Loans.
The Borrower may request offers to make Money Market Loans for more than one
Interest Period in a single Money Market Quote Request. No Money Market Quote
Request shall be given within five Euro-Dollar Business Days (or such other
number of days as the Borrower and the Agent may agree) of any other Money
Market Quote Request.
(c) Invitation for Money Market Quotes. Promptly upon receipt of a
----------------------------------
Money Market Quote Request, the Agent shall send to the Banks by telex or
facsimile transmission an Invitation for Money Market Quotes substantially in
the
-31-
form of Exhibit F hereto, which shall constitute an invitation by the Borrower
---------
to each Bank to submit Money Market Quotes offering to make the Money Market
Loans to which such Money Market Quote Request relates in accordance with this
Section.
(d) Submission and Contents of Money Market Quotes. (i) Each Bank
----------------------------------------------
may submit a Money Market Quote containing an offer or offers to make Money
Market Loans in response to any Invitation for Money Market Quotes. Each Money
Market Quote must comply with the requirements of this subsection (d) and must
be submitted to the Agent by telex or facsimile transmission at its offices
specified in or pursuant to Section 9.01 not later than (x) 10:00 A.M. (New York
City time) on the third Euro-Dollar Business Day prior to the proposed date of
Borrowing, in the case of a LIBOR Auction or (y) 10:00 A.M. (New York City time)
on the proposed date of Borrowing, in the case of an Absolute Rate Auction;
provided that Money Market Quotes submitted by the Agent (or any affiliate of
--------
the Agent or its Designated Lender) in the capacity of a Bank may be submitted,
and may only be submitted, if the Agent or such affiliate notifies the Borrower
of the terms of the offer or offers contained therein not later than thirty (30)
minutes prior to the applicable deadline for the other Banks. Subject to
Articles III and VI, any Money Market Quote so made shall be irrevocable except
with the written consent of the Agent given on the instructions of the Borrower.
If, and only if, the Borrower elected in the applicable Money Market Quote
Request to permit the Banks to designate Designated Lenders to fund such Money
Market Loans, such Money Market Loans may be funded by such Bank's Designated
Lender (if any) as provided in Section 9.06(d), however such Bank shall not be
required to specify in its Money Market Quote whether such Money Market Loans
will be funded by such Designated Lender.
(ii) Each Money Market Quote shall be in substantially the form of
Exhibit G hereto and shall in any case specify:
---------
(1) the proposed date of Borrowing,
(2) the principal amount of the Money Market Loan for which each such
offer is being made, which principal amount (w) may be greater than or
less than the Commitment of the quoting Bank, (x) must be $5,000,000 or a
larger multiple of $500,000, (y) may not exceed the principal amount of
Money Market Loans for which offers were requested and (z) may be subject
to an aggregate limitation as to the principal amount of Money Market Loans
for which offers being made by such quoting Bank may be accepted,
-32-
(3) in the case of a LIBOR Auction, the margin above or below the
applicable London Interbank Offered Rate (the "Money Market Margin")
-------------------
offered for each such Money Market Loan, expressed as a percentage
(specified to the nearest 1/10,000th of 1%) to be added to or subtracted
from such applicable rate,
(4) in the case of an Absolute Rate Auction, the rate of interest per
annum (specified to the nearest 1/10,000th of 1%) (the "Money Market
------------
Absolute Rate") offered for each such Money Market Loan, and
-------------
(5) the identity of the quoting Bank.
A Money Market Quote may set forth up to five separate offers by the quoting
Bank with respect to each Interest Period specified in the related Invitation
for Money Market Quotes.
(iii) Any Money Market Quote shall be disregarded if it:
(1) is not substantially in conformity with Exhibit G hereto or
---------
does not specify all of the information required by subsection (d)(ii)
above;
(2) contains qualifying, conditional or similar language;
(3) proposes terms other than or in addition to those set forth
in the applicable Invitation for Money Market Quotes; or
(4) arrives after the time set forth in subsection (d)(i).
(e) Notice to Borrower. The Agent shall promptly notify the
------------------
Borrower (x) with respect to each Money Market Quote submitted in accordance
with subsection (d), of the terms of such Money Market Quote and the identity of
the Bank submitting such Money Market Quote and (y) of any Money Market Quote
that amends, modifies or is otherwise inconsistent with a previous Money Market
Quote submitted by such Bank with respect to the same Money Market Quote
Request. Any such subsequent Money Market Quote shall be disregarded by the
Agent unless such subsequent Money Market Quote is submitted solely to correct a
manifest error in such former Money Market Quote. The Agent's notice to the
Borrower shall specify (A) the aggregate principal amount of Money Market Loans
for which offers have been received for each Interest Period specified in the
related Money Market Quote Request, (B) the respective principal amounts and
Money
-00-
Xxxxxx Xxxxxxx or Money Market Absolute Rates, as the case may be, so offered
and (C) if applicable, limitations on the aggregate principal amount of Money
Market Loans for which offers in any single Money Market Quote may be accepted.
(f) Acceptance and Notice by Borrower. Not later than 11:00 a.m. (New
---------------------------------
York City time) on (x) the third Euro-Dollar Business Day prior to the proposed
date of Borrowing, in the case of a LIBOR Auction or (y) the proposed date of
Borrowing, in the case of an Absolute Rate Auction, the Borrower shall notify
the Agent of its acceptance or non-acceptance of the offers so notified to it
pursuant to subsection (e). In the case of acceptance, such notice (a "Notice of
---------
Money Market Borrowing") shall specify the aggregate principal amount of offers
----------------------
for each Interest Period that are accepted. The Borrower may accept any Money
Market Quote in whole or in part: provided that:
--------
1. the aggregate principal amount of each Money Market Borrowing may
not exceed the applicable amount set forth in the related Money Market
Quote Request;
2. the principal amount of each Money Market Borrowing must be
$5,000,000 or a larger multiple of $500,000;
3. acceptance of offers may only be made on the basis of ascending
Money Market Margins or Money Market Absolute Rates, as the case may be;
and
4. the Borrower may not accept any offer that is described in
subsection (d)(3) or that otherwise fails to comply with the requirements
of this Agreement.
(g) Allocation by Agent. If offers are made by two or more Banks with
-------------------
the same Money Market Margins or Money Market Absolute Rates, as the case may
be, for a greater aggregate principal amount than the amount in respect of which
such offers are accepted for the related Interest Period, the principal amount
of Money Market Loans in respect of which such offers are accepted shall be
allocated by the Agent among such Banks as nearly as possible (in multiples of
$100,000, as the Agent may deem appropriate) in proportion to the aggregate
principal amounts of such offers. The Agent shall promptly (and in any event
within one (1) Domestic Business Day after such offers are accepted) notify the
Borrower and each such Bank in writing of any such allocation of Money Market
Loans. Determinations by the Agent of the allocation of Money Market Loans shall
be conclusive in the absence of manifest error.
-34-
(h) Notification by Lead Agent. Upon receipt of the Borrower's Notice
--------------------------
of Money Market Borrowing in accordance with Section 2.03(f) hereof, the Agent
shall, on the date such Notice of Money Market Borrowing is received by the
Agent, promptly notify each Bank of the principal amount of the Money Market
Borrowing accepted by the Borrower and of such Bank's share (if any) of such
Money Market Borrowing and such Notice of Money Market Borrowing shall not
thereafter be revocable by the Borrower. Any Bank so notified shall fund such
Money Market Borrowing at the times provided in Section 2.04(b). A Bank who is
notified that it has been selected to make a Money Market Loan may designate its
Designated Lender (if any) to fund such Money Market Loan on its behalf, as
described in Section 9.06(d). Any Designated Lender which funds a Money Market
Loan shall on and after the time of such funding become the obligee under such
Money Market Loan and be entitled to receive payment thereof when due. No Bank
shall be relieved of its obligation to fund a Money Market Loan, and no
Designated Lender shall assume such obligation, prior to the time the applicable
Money Market Loan is funded.
(i) Notwithstanding anything to the contrary contained herein, each
Bank shall be required to fund its pro rata share of Committed Loans in
accordance with Section 2.1 hereof despite the fact that any Bank's Commitment
may have been or may be exceeded as a result of such Bank's making of Money
Market Loans.
SECTION 2.04. Notice to Banks; Funding of Loans.
---------------------------------
(a) Upon receipt of a Notice of Committed Borrowing, the Agent shall
promptly notify each Bank of the contents thereof and of such Bank's share (if
any) of such Borrowing and such Notice of Committed Borrowing shall not
thereafter be revocable by the Borrower.
(b) Not later than 1:00 P.M. (New York City time) on the date of each
Committed Borrowing (including, without limitation, each Swing Borrowing), each
Bank (or, in the case of a Swing Loan, the Swing Lender) participating therein
shall make available its share of such Borrowing, in Federal or other funds
immediately available in New York City, to the Agent at its address referred to
in Section 9.01. Unless the Agent determines that any applicable condition
specified in Article III has not been satisfied, the Agent will make the funds
so received from the Banks available to the Borrower at the Agent's aforesaid
address not later than 1:00 P.M. (New York City time).
-35-
(c) Unless the Agent shall have received notice from a Bank prior to
the date of any Committed Borrowing that such Bank will not make available to
the Agent such Bank's share of such Borrowing, the Agent may assume that such
Bank has made such share available to the Agent on the date of such Borrowing in
accordance with subsection (b) of this Section 2.04 and the Agent may, in
reliance upon such assumption, make available to the Borrower on such date a
corresponding amount. If and to the extent that such Bank shall not have so made
such share available to the Agent, such Bank and the Borrower severally agree to
repay to the Agent forthwith on demand such corresponding amount together with
interest thereon, for each day from the date such amount is made available to
the Borrower until the date such amount is repaid to the Agent, at (i) in the
case of the Borrower, a rate per annum equal to the higher of the Federal Funds
Rate and the interest rate applicable thereto pursuant to Section 2.07 and (ii)
in the case of such Bank, the Federal Funds Rate. If such Bank shall repay to
the Agent such corresponding amount, such amount so repaid shall constitute such
Bank's Loan included in such Borrowing for purposes of this Agreement.
SECTION 2.05. Notes.
-----
(a) The Loans of each Bank shall be evidenced by a single Note
payable to the order of such Bank for the account of its Applicable Lending
Office in an amount equal to the aggregate unpaid principal amount of such
Bank's Loans.
(b) Each Bank may, by notice to the Borrower and the Agent, request
that its Loans of a particular type, including Swing Loans, be evidenced by a
separate Note in an amount equal to the aggregate unpaid principal amount of
such Loans. Each such Note shall be in substantially the form of Exhibit A-1
-----------
hereto with respect to the Swing Lender and Exhibit A-2 hereto and with respect
-----------
to any other Bank or Exhibit A-3 hereto with respect to any Designated Lender,
-----------
with appropriate modifications to reflect the fact that it evidences solely
Loans of the relevant type. Each reference in this Agreement to the "Note" of
such Bank shall be deemed to refer to and include any or all of such Notes, as
the context may require.
(c) Upon receipt of each Bank's Note pursuant to Section 3.01(a), the
Agent shall forward such Note to such Bank. Each Bank shall record the date,
amount and type of each Loan made by it and the date and amount of each payment
of principal made by the Borrower with respect thereto, and may, if such Bank so
elects in connection with any transfer or enforcement of its Note, endorse on
the
-36-
schedule forming a part thereof appropriate notations to evidence the foregoing
information with respect to each such Loan then outstanding; provided that the
--------
failure of any Bank to make any such recordation or endorsement shall not affect
the obligations of the Borrower hereunder or under the Notes. Each Bank is
hereby irrevocably authorized by the Borrower so to endorse its Note and to
attach to and make a part of its Note a continuation of any such schedule as and
when required.
SECTION 2.06. Method of Electing Interest Rates. (a) The Loans
---------------------------------
included in each Borrowing shall bear interest initially at the type of rate
specified by the Borrower in the applicable Notice of Committed Borrowing.
Thereafter, the Borrower may from time to time elect to change or continue the
type of interest rate borne by all the Loans comprised in such Borrowing
(subject in each case to the provisions of Article VIII and except for any Swing
Loans), as follows:
(i) if such Loans are Base Rate Loans, the Borrower may elect to
convert such Loans to Euro-Dollar Loans as of any Euro-Dollar Business
Day;
(ii) if such Loans are Euro-Dollar Loans, the Borrower may elect
to convert such Loans to Base Rate Loans or elect to continue such
Loans as Euro-Dollar Loans for an additional Interest Period, in each
case effective on the last day of the then current Interest Period
applicable to such Loans.
Each such election shall be made by delivering a notice (a "Notice of
---------
Interest Rate Election") to the Agent at least three Euro-Dollar Business Days
----------------------
before the conversion or continuation selected in such notice is to be effective
(unless the relevant Loans are to be converted from Euro-Dollar Loans to Base
Rate Loans or continued as Base-Rate Loans of the same type for an additional
Interest Period, in which case such notice shall be delivered to the Agent at
least three Domestic Business Days before such conversion or continuation is to
be effective). Notwithstanding the foregoing, in the case of any conversion of a
Euro-Dollar Loan to a Base Rate Loan, or the continuation of a Base Rate Loan,
such notice need only be delivered to the Agent at least one Domestic Business
Day before such conversion or continuation is to be effective. During the
Revolving Credit Period a Notice of Interest Rate Election may, if it so
specifies, divide the aggregate principal amount of the relevant Borrowing into
two or more portions, each of which shall thereafter be deemed a "Borrowing";
provided that each such portion is allocated ratably among the Loans
--------
-37-
comprising such Borrowing and is at least $1,000,000 or any larger multiple of
$250,000.
(b) Each Notice of Interest Rate Election shall specify:
(i) the Borrowing to which such notice applies;
(ii) the date on which the conversion or continuation selected
in such notice is to be effective, which shall comply with the applicable
clause of subsection (a) above;
(iii) if the Loans comprising such Borrowing are to be converted,
the new type of Loans and, if such Loans of a new type are Fixed Rate
Loans, the duration of the next Interest Period applicable thereto; and
(iv) if such Loans are to be continued as Euro-Dollar Loans for
an additional Interest Period, the duration of such additional Interest
Period,
and, if requested by the Agent, shall be accompanied by a certificate of the
Borrower satisfactory to the Agent showing the calculation of Total Available
Commitments as of the commencement of such Interest Period.
Each Interest Period specified in a Notice of Interest Rate Election
shall comply with the provisions of the definition of Interest Period.
(c) Upon receipt of a Notice of Interest Rate Election from the
Borrower pursuant to subsection (a) above, the Agent shall promptly notify each
Bank of the contents thereof and such notice shall not thereafter by revocable
by the Borrower. If the Borrower fails to deliver a timely Notice of Interest
Rate Election to the Agent for any Borrowing consisting of Fixed Rate Loans,
such Loans shall be converted into Base Rate Loans on the last day of the then
current Interest Period applicable thereto.
SECTION 2.07. Interest Rates.
--------------
(a) Each Base Rate Loan shall bear interest on the outstanding
principal amount thereof, for each day from the date such Loan is made until it
becomes due, at a rate per annum equal to the Base Rate plus the Applicable
Margin for Base Rate Loans for such day. Such interest shall be payable for each
Interest Period on the last day thereof. Any overdue principal of or interest on
any Base
-38-
Rate Loan shall bear interest, payable on demand, for each day until paid at a
rate per annum equal to the sum of four percent (4%) plus the rate otherwise
applicable to Base Rate Loans for such day.
(b) Each Euro-Dollar Loan shall bear interest on the outstanding
principal amount thereof, for each day during each Interest Period applicable
thereto, at a rate per annum equal to the sum of the Applicable Margin for Euro-
Dollar Loans for such day plus the Adjusted London Interbank Offered Rate
applicable to such Interest Period. Such interest shall be payable for each
Interest Period on the last day thereof and, if such Interest Period is longer
than three months, at intervals of three months after the first day thereof.
The "Adjusted London Interbank Offered Rate" applicable to any
--------------------------------------
Interest Period means a rate per annum equal to the quotient obtained (rounded
upward, if necessary, to the next higher 1/100 of 1%) by dividing (i) the
applicable London Interbank Offered Rate by (ii) 1.00 minus the Euro-Dollar
Reserve Percentage.
The "London Interbank Offered Rate" applicable to any Interest Period
-----------------------------
means the average (rounded upward, if necessary, to the next higher 1/16 of 1%)
of the respective rates per annum at which deposits in dollars are offered to
the Euro-Dollar Reference Bank in the London interbank market at approximately
11:00 a.m. (London time) two Euro-Dollar Business Days before the first day of
such Interest Period in an amount approximately equal to the principal amount of
the Euro-Dollar Loan of the Euro-Dollar Reference Bank to which such Interest
Period is to apply and for a period of time comparable to such Interest Period.
"Euro-Dollar Reserve Percentage" means for any day that percentage
------------------------------
(expressed as a decimal) which is in effect on such day, as prescribed by the
Board of Governors of the Federal Reserve System (or any successor) for
determining the maximum reserve requirement for a member bank of the Federal
Reserve System in New York City with deposits exceeding five billion dollars in
respect of "Euro-currency liabilities" (or in respect of any other category of
liabilities which includes deposits by reference to which the interest rate on
Euro-Dollar Loans is determined or any category of extensions of credit or other
assets which includes loans by a non-United States office of any Bank to United
States residents). The Adjusted London Interbank Offered Rate shall be adjusted
automatically on and as of the effective date of any change in the Euro-Dollar
Reserve Percentage.
-39-
(c) Subject to Section 8.01, each Money Market LIBOR Loan shall bear
interest on the outstanding principal amount thereof, for the Interest Period
applicable thereto, at a rate per annum equal to the sum of the London Interbank
Offered Rate for such Interest Period (determined in accordance with Section
2.07(c) as if the related Money Market LIBOR Borrowing were a Committed Euro-
Dollar Borrowing) plus (or minus) the Money Market Margin quoted by the Bank
making such Loan in accordance with Section 2.03. Each Money Market Absolute
Rate Loan shall bear interest on the outstanding principal amount thereof, for
the Interest Period applicable thereto, at a rate per annum equal to the Money
Market Absolute Rate quoted by the Bank making such Loan in accordance with
Section 2.03. Such interest shall be payable for each Interest Period on the
last day thereof and, if such Interest Period is longer than ninety days, at
intervals of ninety days after the first day thereof.
(d) Any overdue principal of or interest on any Euro-Dollar Loan or
Money Market Loan shall bear interest, payable on demand, for each day from and
including the date payment thereof was due to but excluding the date of actual
payment, at a rate per annum equal to the sum of four per cent (4%) plus the
rate applicable to Base Rate Loans for such day.
(e) Each Swing Loan shall bear interest on the outstanding principal
amount thereof, and in the case of any amount of overdue Swing Loan, overdue
interest thereon at a rate per annum for each day equal to the sum of four
percent (4%) plus the rate applicable to Base Rate Loans for such day.
(f) The Agent shall determine each interest rate applicable to the
Loans hereunder. The Agent shall give prompt notice to the Borrower and the
participating Banks of each rate of interest so determined, and its
determination thereof shall be conclusive in the absence of manifest error.
(g) Each Euro-Dollar Reference Bank agrees to use its best efforts to
furnish quotations to the Agent as contemplated by this Section. If any Euro-
Dollar Reference Bank does not furnish a timely quotation, the Agent shall
determine the relevant interest rate on the basis of the quotation or quotations
furnished by the remaining Euro-Dollar Reference Bank or Banks or, if none of
such quotations is available on a timely basis, the provisions of Section 8.01
shall apply.
SECTION 2.08. Fees.
----
-40-
(a) Facility Fee. The Borrower shall pay to the Lead Agent for the
------------
account of the Banks ratably in proportion to their respective Commitments a
facility fee accruing at a rate per annum equal to the applicable Facility Fee
Percentage from time to time in effect on the amount of the Commitments, such
fee being payable quarterly in arrears. The Facility Fee shall be payable in
arrears on each January 1, April 1, July 1 and October 1 during the Term.
(b) Extension Fee. Within one week of the notification by the Agent
-------------
to the Borrower that a Request to Extend has been accepted pursuant to Section
2.01(c), the Borrower shall pay to the Agent for the account of the Banks
ratably in proportion to their Commitments an extension fee of .10% of the
Commitments.
(c) Conversion Fee. On the date that pursuant to Section 2.01(d) the
--------------
Borrower notifies the Agent of its election of the Conversion Option, the
Borrower shall pay to the Agent for the account of the Banks ratably in
proportion to their Commitments of the then outstanding principal balance of the
Loans a conversion fee of .15% of the Commitments that will be outstanding as of
the Conversion Date.
(d) Fees Non-Refundable. All fees set forth in this Section 2.08
-------------------
shall be deemed to have been earned on the date payment is due in accordance
with the provisions hereof and shall be non-refundable. The obligation of the
Borrower to pay such fees in accordance with the provisions hereof shall be
binding upon the Borrower and shall inure to the benefit of the Agent and the
Banks regardless of whether any Loans are actually made.
SECTION 2.09. Optional Termination or Reduction of Commitments.
------------------------------------------------
During the Revolving Credit Period, the Borrower may, upon at least three
Domestic Business Days' notice to the Agent prior to the end of any Interest
Period, (i) terminate the Commitments at any time, if no Loans or Swing Loans
are outstanding at such time or (ii) ratably reduce from time to time by an
aggregate amount of $1,000,000 or any larger multiple of $250,000, the aggregate
amount of the Commitments in excess of the aggregate outstanding principal
amount of the Loans and the Swing Loans.
SECTION 2.10. Maturity; Mandatory Termination or Reduction of
-----------------------------------------------
Commitments.
-----------
(a) The Commitments and Swing Commitment shall terminate on the
Revolver Termination Date or, if pursuant to Section 2.01(d) the Borrower has
exercised the Conversion Option, except with respect to the Swing Loans, on the
third anniversary of the Conversion Date, and any Loans then out-
-41-
standing (together with accrued interest thereon) shall mature and be due and
payable on such date.
(b) On any date on or after the Conversion Date on which the
Commitment of any Bank shall be greater than the principal amount of the Loan or
Loans or Swing Loans of such Bank outstanding on such date (after giving effect
to any repayment, prepayment and borrowing on such date), the Commitment of such
Bank shall be automatically reduced to an amount equal to such outstanding
principal amount.
(c) The Commitment of each Bank shall be further reduced, on (x) each
of the first five Commitment Reduction Dates, by an amount equal to fifteen
percent (15%) of the amount of such Bank's Commitment in effect on the
Conversion Date (after giving effect to any reduction pursuant to subsection (e)
on such date), and (y) the sixth Commitment Reduction Date, by an amount equal
to twenty-five percent (25%) of the amount of such Bank's Commitment in effect
on the Conversion Date (after giving effect to any reduction pursuant to
subsection (e) on such date). No reduction of any Commitment pursuant to
subsection (c), (d) or (e) shall reduce the amount of any subsequent mandatory
reduction of such Commitment pursuant to this subsection (f).
(d) On each date of reduction of any Commitment, the Borrower shall
repay such principal amount (together with accrued interest thereon) of each
Bank's outstanding Loans or Swing Loans, if any, as may be necessary so that
after such repayment the aggregate outstanding principal amount of such Bank's
Loans or Swing Loans does not exceed the amount of such Bank's Available
Commitment as then reduced. In connection with the prepayment of a Euro-Dollar
Loan prior to the maturity thereof, the Borrower shall also pay any applicable
expenses pursuant to Section 2.13.
(e) If at any time the Borrower or any Consolidated Subsidiary sells,
transfers, assigns or conveys any Real Property Asset which shall cause the
Borrower to fail to be in compliance with any covenant contained in Article V
hereof, the Borrower shall pay to the Agent, for the account of the Banks,
within ten (10) days of the date such Real Property Asset is sold, transferred,
assigned or conveyed, an amount such that the Borrower subsequent to such
payment shall be in compliance with the covenants contained in Article V hereof.
Borrower shall make such prepayment together with interest accrued to the date
of the prepayment on the principal amount prepaid. In connection with the
prepayment of a Euro-Dollar Loan prior to the maturity thereof, the Borrower
shall also pay any applicable expenses pursuant to Section 2.12. Each such
prepayment shall be applied to prepay ratably the Loans of the Banks. As used in
this Section 2.09(e) only, the phrase "sells, transfers,
-42-
assigns or conveys" shall not include (i) sales or conveyances among Borrower
and any wholly-owned Subsidiaries, or (ii) mortgages secured by Real Property
Assets.
(f) If at any time the Borrower or any Consolidated Subsidiary shall
issue shares of capital stock or other equity interest, the Borrower shall pay
to the Agent, for the account of the Banks, within ten (10) days after the date
of such issuance, an amount equal to the Net Offering Proceeds of such issuance
less any such proceeds which shall be used to make any Permitted Investment
which occurs within ten (10) days after the date of such issuance of shares of
capital stock or other equity interest. The Borrower shall make such prepayment
together with interest accrued to the date of the prepayment on the principal
amount prepaid. In connection with the prepayment of a Euro-Dollar Loan prior to
the maturity thereof, the Borrower shall also pay any applicable expenses
pursuant to Section 2.12. Each such prepayment shall be applied to prepay
ratably the Loans of the Banks.
SECTION 2.11. Optional Prepayments.
--------------------
(a) The Borrower may, upon at least one (1) Domestic Business Days'
notice to the Agent, prepay any Base Rate Borrowing or Swing Loan in whole at
any time or from time to time in part in amounts aggregating $1,000,000 or any
larger multiple of $250,000, by paying the principal amount to be prepaid
together with accrued interest thereon to the date of prepayment. Each such
optional prepayment shall be applied to prepay ratably the Loans of the several
Banks included in such Borrowing.
(b) The Borrower may, upon at least three Euro-Dollar Business Days'
notice to the Agent, in case of a Borrowing comprised of Euro-Dollar Loans,
prepay the Loans comprising such Borrowing, on the last day of any Interest
Period applicable to such Borrowing, in whole at any time, or from time to time
in part in amounts aggregating $1,000,000 or any larger multiple of $250,000, by
paying the principal amount to be prepaid together with accrued interest thereon
to the date of prepayment. Each such optional prepayment shall be applied to
prepay ratably the Loans of the several Banks included in such Borrowing.
(c) Upon receipt of a notice of prepayment pursuant to this Section,
the Agent shall promptly notify each Bank of the contents thereof and of such
Bank's ratable share (if any) of such prepayment and such notice shall not
thereafter be revocable by the Borrower.
-43-
(d) Notwithstanding anything contained herein to the contrary, the
Borrower may not prepay any Money Market Loan.
SECTION 2.12. General Provisions as to Payments.
---------------------------------
(a) The Borrower shall make each payment of principal of, and
interest on, the Loans and of fees hereunder, not later than 12:00 Noon (New
York City time) on the date when due, in Federal or other funds immediately
available in New York City, to the Agent at its address referred to in Section
9.01. The Agent will promptly distribute to each Bank its ratable share of each
such payment received by the Agent for the account of the Banks. If and to the
extent that the Agent shall receive any such payment for the account of the
Banks on or before 12:00 Noon (New York City time) on any Domestic Business Day,
and Agent shall not have distributed to any Bank its applicable share of such
payment on such Domestic Business Day, Agent shall distribute such amount to
such Bank together with interest thereon, for each day from the date such amount
should have been distributed to such Bank until the date Agent distributes such
amount to such Bank, at the Federal Funds Rate. Whenever any payment of
principal of, or interest on, the Base Rate Loans or of fees shall be due on a
day which is not a Domestic Business Day, the date for payment thereof shall be
extended to the next succeeding Domestic Business Day. Whenever any payment of
principal of, or interest on, the Euro-Dollar Loans shall be due on a day which
is not a Euro-Dollar Business Day, the date for payment thereof shall be
extended to the next succeeding Euro-Dollar Business Day unless such Euro-Dollar
Business Day falls in another calendar month, in which case the date for payment
thereof shall be the next preceding Euro-Dollar Business Day. If the date for
any payment of principal is extended by operation of law or otherwise, interest
thereon shall be payable for such extended time.
(b) Unless the Agent shall have received notice from the Borrower
prior to the date on which any payment is due to the Banks hereunder that the
Borrower will not make such payment in full, the Agent may assume that the
Borrower has made such payment in full to the Agent on such date and the Agent
may, in reliance upon such assumption, cause to be distributed to each Bank on
such due date an amount equal to the amount then due such Bank. If and to the
extent that the Borrower shall not have so made such payment, each Bank shall
repay to the Agent forthwith on demand such amount distributed to such Bank
together with interest thereon, for each day from the date such amount is
distributed to such Bank until the date such Bank repays such amount to the
Agent, at the Federal Funds Rate.
-44-
SECTION 2.13. Funding Losses. If the Borrower makes any payment of
--------------
principal with respect to any Fixed Rate Loan or any Fixed Rate Loan is
converted to a Base Rate Loan (pursuant to this Article II or Article VI or VIII
or otherwise) on any day other than the last day of an Interest Period
applicable thereto, or the last day of an applicable period fixed pursuant to
Section 2.07(c), or if the Borrower fails to borrow or prepay any Fixed Rate
Loans after notice has been given to any Bank in accordance with Section 2.04(a)
or 2.11(c), the Borrower shall reimburse each Bank within 15 days after demand
for any resulting loss or expense incurred by it (or by an existing or
prospective Participant in the related Loan), including (without limitation) any
loss incurred in obtaining, liquidating or employing deposits from third
parties, but excluding loss of margin for the period after any such payment or
conversion or failure to borrow or prepay; provided that such Bank shall have
--------
delivered to the Borrower a certificate as to the amount of such loss or
expense, which certificate shall be prima facie evidence of the matters
certified therein.
SECTION 2.14. Computation of Interest and Fees. Interest based on the
--------------------------------
Base Rate hereunder shall be computed on the basis of a year of 365 days (or 366
days in a leap year) and paid for the actual number of days elapsed (including
the first day but excluding the last day). All other interest and fees shall be
computed on the basis of a year of 360 days and paid for the actual number of
days elapsed (including the first day but excluding the last day if and only if
such payment is made in accordance with the provisions of the first sentence of
Section 2.12(a)).
ARTICLE III
CONDITIONS
SECTION 3.01. Conditions Precedent to Effectiveness of Agreement.
---------------------------------------------------
The Closing as contemplated hereunder shall occur upon receipt by the Agent of
the following documents, each dated as of the Closing Date (or dated as
otherwise provided below) or a date otherwise satisfactory to the Agent and in
each case satisfactory in form and substance to the Agent:
(1) a duly executed Note for the account of each Bank, complying
with the provisions of Section 2.05;
(2) a duly executed copy of this Agreement;
(3) an opinion of Xxxxx, Xxxxx & Xxxxx, counsel for the
Borrower, satisfactory to the Agent;
-45-
(4) all documents the Agent may reasonably request relating to the
existence of the Borrower, the authority for and the validity of this Agreement
and the other Loan Documents, and any other matters relevant hereto, all inform
and substance reasonably satisfactory to the Agent. Such documentation shall
include, without limitation, the articles of incorporation and by-laws of the
Borrower, as amended, modified or supplemented to the Closing Date, each
certified to be true, correct and complete by a senior officer of the Borrower,
as of a date not more than ten (10) days prior to the Closing Date, together
with a good standing certificate from the Secretary of State (or the equivalent
thereof) of Maryland and a good standing certificate from the Secretary of State
(or the equivalent thereof) from the Secretary of State (or the equivalent
thereof) of each other State in which the Borrower is required to be qualified
to transact business, each to be dated not more than ten (10) days prior to the
Closing Date;
(5) all certificates, agreements and other documents and papers
referred to in this Section 3.01 and Section 3.02, unless otherwise specified,
in sufficient counterparts, satisfactory in form and substance to the Agent in
its sole discretion;
(6) the Borrower shall have taken all actions required to authorize
the execution and delivery of this Agreement and the other Loan Documents and
the performance thereof by the Borrower;
(7) an unaudited consolidated balance sheet and income statement of
the Borrower for the fiscal quarter ended September 30, 1997;
(8) wire transfer instructions in connection with any Loans to be
made on the Closing Date;
all fees due and payable pursuant to Section 2.08 hereof on or before the
Closing Date;
(9) copies of all consents, licenses and approvals, if any, required
in connection with the execution, delivery and performance by the Borrower, and
the validity and enforceability, of the Loan Documents, or in connection with
any of the transactions contemplated thereby, and such consents, licenses and
approvals shall be in full force and effect;
(10) satisfactory reports of Uniform Commercial Code filing searches
conducted by a search firm acceptable to the Agent with respect to the Borrower,
such searches to be conducted in each of the locations specified by the Agent;
-46-
(11) no material defaults or events of default (as defined therein)
shall exist under any existing agreement entered into by Borrower in connection
with any Debt of Borrower;
(12) the representations and warranties of the Borrower contained in
this Agreement shall be true and correct in all material respects on and as of
the Closing Date both before and after giving effect to the making of any Loans;
(13) to the extent not previously delivered, certificates of insurance
with respect to the Unencumbered Asset Pool demonstrating the coverages required
under this Agreement; and
(14) a certificate of the chief financial officer or the chief
accounting officer of the Borrower certifying that the Borrower is in compliance
with all covenants of the Borrower contained in this Agreement, including,
without limitation, the requirements of Section 5.07 through 5.19, inclusive, as
of the Closing Date.
The Agent shall promptly notify the Borrower and the Banks of the Closing Date,
and such notice shall be conclusive and binding on all parties hereto.
SECTION 3.02. Borrowings. The obligation of any Bank to make a Loan,
----------
other than a Refunding Swing Loan, on the occasion of any Borrowing is subject
to the satisfaction of the following conditions:
(a) receipt by the Agent of an appropriate Notice of Borrowing as
required by Section 2.02 or 2.03;
(b) if requested by the Agent or the Required Banks, receipt by the
Agent of a certificate of the Borrower satisfactory to the Agent showing the
calculation of Total Available Commitments as of the date of such Borrowing;
(c) the fact that, immediately after such Borrowing, the aggregate
outstanding principal amount of the Committed Loans and Swing Loans will not
exceed the amount of the Total Available Commitments;
(d) the fact that, immediately before and after such Borrowing, no
Default or Event of Default shall have occurred and be continuing;
(e) the fact that the representations and warranties of the Borrower
contained in this Agreement and any other Loan Document (except those that
relate specifically
-47-
to an earlier date) shall be true in all material respects on and as of the date
of such Borrowing;
(f) there shall not be more than twelve (12) Borrowings (including
Swing Loans) outstanding at any time;
(g) receipt by the Agent of a certificate of the Borrower
satisfactory to the Agent showing the calculation of the aggregate Borrowings
hereunder (determined on a cumulative basis);
(h) no law or regulation shall have been adopted, no order, judgment
or decree of any governmental authority shall have been issued, and no
litigation shall be pending or threatened, which does or, with respect to any
threatened litigation, seeks to enjoin, prohibit or restrain, the making or
repayment of the Loans, or any participations therein or the consummation of the
transactions contemplated hereby; and
(i) no event, act or condition shall have occurred after the Closing
Date which, in the reasonable judgment of the Agent or the Required Banks, as
the case may be, has had or is likely to have a Material Adverse Effect.
Each Borrowing hereunder shall be deemed to be a representation and
warranty by the Borrower on the date of such Borrowing as to the facts specified
in clauses (b), (c), (d), (e), (h) and (i) of this Section.
SECTION 3.03. Conditions Precedent to New Acquisitions and Additional Real
------------------------------------------------------------
Property Assets.
---------------
(a) All New Acquisitions or Real Property Assets to be added to the
Unencumbered Asset Pool shall be approved by the Required Banks; provided, that
if Borrower shall have received an Investment Grade Rating from both S&P and
Xxxxx'x, and for so long as Borrower shall maintain both such Investment Grade
Ratings, no such approval shall be required to include any New Acquisition or
Real Property Asset in the Unencumbered Asset Pool, which is (i) 100% owned in
fee or leasehold by Borrower or any Consolidated Subsidiary of Borrower, (ii)
not subject (nor is any equity interest therein subject) to any Lien, negative
pledge, stock pledge or pledge of partnership interest and (iii) in compliance
with the provisions of Section 5.19 hereof.
(b) If Borrower shall not have received or shall not maintain an
Investment Grade Rating from both S&P and Xxxxx'x, Borrower shall submit to the
Agent and the Banks as provided in subsection (c) below the materials set forth
below (the "Due Diligence Package") relating to each potential New Acquisition
---------------------
or Real Property Asset to be added to
-48-
the Unencumbered Asset Pool. The Due Diligence Package shall include (i) a
description of the Real Property Asset or New Acquisition, (ii) two years of
historical cash flow operating statements, if available, (iii) three years of
cash flow projections (including capital expenditures), if available, (iv) an
environmental report in compliance with Section 3.01(p), (v) a satisfactory
engineer's property/ structural inspection report (other than Construction
Assets), (vi) evidence of compliance with zoning and other local laws, (vii) a
final investment memorandum prepared by the Borrower in connection with the New
Acquisition or Real Property Asset and (viii) such additional information
regarding the Real Property Asset or New Acquisition as the Agent may reasonably
request. The Borrower shall permit the Agent at all reasonable times and upon
reasonable prior notice to make an inspection of such New Acquisition or Real
Property Asset.
(c) If Borrower shall not have received or shall not maintain an
Investment Grade Rating from both S&P and Xxxxx'x, the Borrower shall distribute
a copy of each item constituting the Due Diligence Package by overnight mail to
each of the Banks for their review and approval. Failure to respond to the Agent
in writing by any Bank within ten (10) Domestic Business Days after receipt of
the Due Diligence Package, shall be deemed to be an approval by such Bank of
such potential New Acquisition or Real Property Asset.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
The Borrower represents and warrants that:
SECTION 4.01. Corporate Existence and Power. The Borrower is a
-----------------------------
corporation duly incorporated, validly existing and in good standing under the
laws of Maryland, and has all corporate powers and all material governmental
licenses, authorizations, consents and approvals required to carry on its
business as now conducted.
SECTION 4.02. Corporate and Governmental Authorization; No
--------------------------------------------
Contravention. The execution, delivery and performance by the Borrower of each
-------------
Loan Document to which it is or will be a party are within its corporate powers,
have been duly authorized by all necessary corporate action, require no action
by or in respect of, or filing with, any governmental body, agency or official
and do not contravene, or constitute a default under, any provision of
applicable law or regulation, or of the certificate of incorporation or by-laws
of the Borrower or of any agreement, judgment, in-
-49-
junction, order, decree or other instrument binding upon the Borrower or any of
its Subsidiaries, or result in the creation or imposition of any Lien on any
asset of the Borrower or any of its Subsidiaries, except as contemplated by the
Loan Documents.
SECTION 4.03. Binding Effect. Each Loan Document constitutes, or
--------------
when duly executed and delivered will constitute a valid and binding
obligation of the Borrower.
SECTION 4.04. Financial Information.
---------------------
(a) The unaudited consolidated balance sheet of the Borrower and its
Consolidated Subsidiaries as of September 30, 1997 and the related unaudited
consolidated statement of earnings and statement of cash flows for the three
months then ended, a copy of which has been delivered to each of the Banks,
fairly present, in conformity with generally accepted accounting principles, the
consolidated financial position of the Borrower and its Consolidated
Subsidiaries as of such date and their consolidated results of operations and
cash flows for such three month period.
(b) Since September 30, 1997 there has been no material adverse
change in the business, operations, properties, assets or financial condition of
the Borrower and its Consolidated Subsidiaries, taken as a whole.
SECTION 4.05. Litigation. There is no action, suit or proceeding
----------
pending against, or to the knowledge of the Borrower threatened against or
affecting, the Borrower or any of its Subsidiaries before any court or
arbitrator or any governmental body, agency or official in which there is a
reasonable possibility of an adverse decision which could have a Material
Adverse Effect.
SECTION 4.06. Compliance with ERISA. Each member of the ERISA Group
---------------------
has fulfilled its obligations under the minimum funding standards of ERISA and
the Internal Revenue Code with respect to each Plan and is in compliance in all
material respects with the presently applicable provisions of ERISA and the
Internal Revenue Code with respect to each Plan. No member of the ERISA Group
has (i) sought a waiver of the minimum funding standard under Section 412 of the
Internal Revenue Code in respect of any Plan, (ii) failed to make any
contribution or payment to any Plan or Multiemployer Plan or in respect of any
Benefit Arrangement, or made any amendment to any Plan or Benefit Arrangement,
which has resulted or could result in the imposition of a Lien or the posting of
a bond or other security under ERISA or the Internal Revenue Code or (iii)
incurred any liability
-50-
under Title IV of ERISA other than a liability to the PBGC for premiums under
Section 4007 of ERISA.
SECTION 4.07. Environmental Matters. Except as indicated in the
---------------------
environmental reports previously delivered to the Agent, (i) the Borrower and
each Subsidiary (x) is in compliance with all applicable Environmental Laws,
except to the extent non-compliance would not have a Material Adverse Effect,
(y) has all material permits, licenses, approvals, rulings, variances,
exemptions or other authorizations under applicable Environmental Laws to
operate each Real Property Asset as presently conducted or as reasonably
anticipated to be conducted, (z) has received no written communication, from a
governmental authority, alleging that the Borrower or any such Subsidiary is not
in full compliance with all Environmental Laws, and there are no events or
circumstances, to the Borrower's or any Subsidiary's knowledge, that may
prevent or interfere with such full compliance in the future, except to the
extent non-compliance would not have a Material Adverse Effect, (ii) there is no
Environmental Claim pending or, to the Borrower's or any such Subsidiary's
knowledge, threatened against the Borrower or any such Subsidiary, (iii) to the
Borrower's or any such Subsidiary's knowledge, there are no past or present
actions, activities, circumstances, conditions, events or incidents including,
without limitation, the release, emission, discharge or disposal of any
Hazardous Substances, that could form the basis of any Environmental Claim
against the Borrower or any such Subsidiary, (iv) to the Borrower's or any such
Subsidiary's knowledge, without in any way limiting the generality of the
foregoing (A) there are no sites on any Real Property Asset in which the
Borrower or any such Subsidiary, has stored (except in full compliance with
Environmental Laws), disposed or arranged for the disposal of any Hazardous
Substances, (B) there are no underground storage tanks located on any Real
Property Asset, other than propane tanks, (C) there is no asbestos contained in
or forming a part of any improvement on any Real Property Asset, other than non-
friable materials that are the subject of an operations and maintenance program,
and (D) no polychlorinated biphenyls (PCBs) are used or stored on any Real
Property Asset, other than transformers owned by utility companies.
SECTION 4.08. Taxes. The Borrower and its Subsidiaries have filed
-----
all United States Federal income tax returns and all other material tax returns
which are required to be filed by them and have paid all taxes due pursuant to
such returns or pursuant to any assessment received by the Borrower or any
Subsidiary, except if such assessment is being contested in good faith by
appropriate proceedings and adequate reserves have been established with respect
thereto. The charges, accruals and reserves on the
-51-
books of the Borrower and its Subsidiaries in respect of taxes or other
governmental charges are, in the opinion of the Borrower, adequate.
SECTION 4.09. Subsidiaries. Each of the Borrower's corporate
------------
Subsidiaries is a corporation duly incorporated, validly existing and in good
standing under the laws of its jurisdiction of incorporation, each of the
Borrower's partnership Subsidiaries is a limited partnership duly organized,
validly existing and in good standing under the laws of its jurisdiction of
organization, and each such entity has all corporate or partnership powers, as
applicable, and all material governmental licenses, authorizations, consents
and approvals required to carry on its business as now conducted.
SECTION 4.10. Investments. Neither the Borrower nor any Consolidated
-----------
Subsidiary has any Investment in any Person other than Investments specified in
clauses (i), (ii), (iii) and (iv) of Section 5.20.
SECTION 4.11. Not an Investment Company. Neither the Borrower nor
-------------------------
any Subsidiary or Affiliate of the Borrower is an "investment company" within
the meaning of the Investment Company Act of 1940, as amended.
SECTION 4.12. Full Disclosure. All information heretofore furnished
---------------
by the Borrower to the Agent or any Bank for purposes of or in connection with
this Agreement or any transaction contemplated hereby is, and all such
information hereafter furnished by the Borrower to the Agent or any Bank will
be, true and accurate, taken as a whole, in all material respects on the date as
of which such information is stated or certified. The Borrower has disclosed to
the Banks in writing any and all facts which materially and adversely affect or
may so affect (to the extent the Borrower can now reasonably foresee) the
business, operations, properties, assets or financial condition of the Borrower
and its Consolidated Subsidiaries, taken as a whole, or the value of any Real
Property Asset, or the ability of the Borrower to perform its obligations under
any Loan Document.
SECTION 4.13. Relationship of Borrower and Its Affiliates. The
-------------------------------------------
Borrower is an Affiliate of Group and is controlled by Group. At the date
hereof, at least 45% of each class of Equity Interests of the Borrower is owned
beneficially by Group.
SECTION 4.14. Contracts. Except as indicated on Schedule 4.14 or has
---------
been previously delivered to the Agent in connection with the Existing Credit
Agreement, there are no material leasing, asset management, property management
or advisory contracts in connection with the Real Property
-52-
Assets. All contracts in connection with the operation of the Real Property
Assets (other than the Investor Agreement between Group and the Borrower) are
(i) to the Borrower's knowledge, market rate contracts with third parties on
customary terms for similar contracts and (ii) in each case (except for
contracts set forth on Schedule 4.14) terminable by the Borrower on no more than
30 days' notice.
SECTION 4.15. Qualification as a REIT. The Borrower qualifies, and
-----------------------
intends to maintain its status, as a "real estate investment trust" for purposes
of the Internal Revenue Code (a "REIT").
----
SECTION 4.16. No Plan Assets. The Borrower does not hold "plan
--------------
assets" within the meaning of Section 2510.3-101 of the Regulations of the
Department of Labor.
SECTION 4.17. Subsidiary Debt. No Subsidiary has any Debt
---------------
outstanding other than Debt permitted under Section 5.26.
The Borrower shall also be deemed to represent and warrant that as of
the first day of each Interest Period of each Borrowing (x) the aggregate
outstanding principal amount of the Loans does not exceed the amount of the
Total Available Commitments, (y) no Default has occurred and is continuing and
(z) the representations and warranties of the Borrower contained in this
Agreement and any other Loan Document (except (i) the representations and
warranties set forth in Section 4.05 as to any matter which has theretofore been
disclosed in writing by the Borrower to the Banks, (ii) the representation and
warranty set forth in Section 4.14 to the extent such contracts are otherwise
permitted by this Agreement and (iii) the representation and warranty set forth
in Section 4.07 to the extent a breach thereof would by virtue of the proviso to
Section 6.01(c) not give rise to an Event of Default pursuant to Section 5.34)
are true in all material respects on and as of such day.
SECTION 4.18. Ownership of Property. Schedule 4.18 attached hereto and
--------------------- -------------
made a part hereof sets forth all the real property owned or leased by the
Borrower and Persons in which the Borrower, directly or indirectly, owns an
interest as of the Closing Date. As of the Closing Date, Borrower and such
Persons have good and insurable fee simple title (or leasehold title if so
designated on Schedule 4.18) to all of such real property, subject to customary
-------------
encumbrances and liens as of the date of this Agreement. As of the date of this
Agreement, there are no mortgages, deeds of trust, indentures, debt instruments
or other agreements creating a Lien against any of the Real Property Assets
except as disclosed on Schedule 4.18.
-------------
-53-
ARTICLE V
COVENANTS
The Borrower agrees that, so long as any Bank has any Commitment
hereunder or any amount payable under any Note or hereunder remains unpaid:
SECTION 5.01. Information. The Borrower will deliver to each of the
-----------
Banks:
(a) as soon as available and in any event within 90 days after the
end of each fiscal year of the Borrower, a consolidated balance sheet of the
Borrower and its Consolidated Subsidiaries as of the end of such fiscal year
and the related consolidated statement of earnings and statement of cash flows
for such fiscal year, setting forth in each case in comparative form the figures
for the previous fiscal year, all reported on (in a manner acceptable to the
Securities and Exchange Commission, if the Borrower is required to file
reports with the Securities and Exchange Commission), by Xxxxxx Xxxxxxxx & Co.,
Coopers & Xxxxxxx, Deloitte & Touche, Ernst & Young LLP, KPMG Peat Marwick,
Price Waterhouse or Xxxxxxx Xxxxxxxxx & Co.;
(b) as soon as available and in any event within 45 days after the
end of each of the first three quarters of each fiscal year of the Borrower, a
consolidated balance sheet of the Borrower and its Consolidated Subsidiaries as
of the end of such quarter and the related consolidated statement of earnings
and statement of cash flows for such quarter and for the portion of the
Borrower's fiscal year ended at the end of such quarter, setting forth in the
case of such financial statements in comparative form the figures for the
corresponding quarter and the corresponding portion of the Borrower's previous
fiscal year, all certified (subject to normal year-end or audit adjustments)
as to fairness of presentation, generally accepted accounting principles and
consistency by the controller of the Borrower;
(c) simultaneously with the delivery of each set of financial
statements referred to in clauses (a) and (b) above, a certificate of the chief
financial officer or the chief accounting officer of Borrower (i) setting forth
in reasonable detail the calculations required to establish whether the Borrower
was in compliance with the requirements of Sections 5.07 through 5.19 on the
last day of the preceding quarter; (ii) stating whether any Default exists on
the date of such certificate and, if any Default then exists, setting forth the
details thereof and the action which the Borrower is taking or proposes to take
with respect thereto; and (iii) certifying (x) that such financial statements
-54-
fairly present the financial condition and the results of operations of the
Borrower on the dates and for the periods indicated, on the basis of GAAP, with
respect to the Borrower subject, in the case of interim financial statements,
to normally recurring year-end adjustments, and (y) that such officer has
reviewed the terms of the Loan Documents and has made, or caused to be made
under his or her supervision, a review in reasonable detail of the business and
condition of the Borrower during the period beginning on the date through which
the last such review was made pursuant to this Section 5.01(c) (or, in the case
of the first certification pursuant to this Section 5.01(c), the Closing Date)
and ending on a date not more than ten (10) Domestic Business Days prior to the
date of such delivery and that (1) on the basis of such financial statements and
such review of the Loan Documents, no Event of Default existed under Section
6.01(b) with respect to Sections 5.07 through 5.19, inclusive, at or as of the
date of said financial statements, and (2) on the basis of such review of the
Loan Documents and the business and condition of the Borrower, no Default or
Event of Default under any other provision of Section 6.01 occurred or, if any
such Default or Event of Default has occurred, specifying the nature and
extent thereof and, if continuing, the action the Borrower proposes to take in
respect thereof. Such certificate shall, set forth the calculations required to
establish the matters described in clause (1) above;
(d) simultaneously with the delivery of each set of financial
statements referred to in clause (a) above, a statement of the firm of
independent public accountants which reported on such statements (i) whether
anything has come to their attention to cause them to believe that any Default
existed on the date of such statements and (ii) confirming the calculations set
forth in the most recent officer's certificate delivered pursuant to clause (c)
above;
(e) within five days after any executive officer of the Borrower
(including without limitation any member of the board of directors, any managing
director, any senior vice president, the secretary or the controller) obtains
knowledge of any Default, if such Default is then continuing, a certificate of
the controller of the Borrower setting forth the details thereof and the
action which the Borrower is taking or proposes to take with respect thereto;
(f) within five days after any executive officer of the Borrower
(including without limitation any member of the board of directors, any managing
director, any senior vice president, the secretary or the controller) obtains
knowledge of any Environmental Claim against the Borrower or any Subsidiary, a
certificate of the controller of the Borrower setting forth the details thereof
and the action
-55-
which such Person is taking or proposes to take with respect thereto;
(g) promptly upon the mailing thereof to the shareholders of the
Borrower generally, copies of all financial statements, reports and proxy
statements so mailed;
(h) promptly upon the filing thereof, if any, copies of all
registration statements (other than the exhibits thereto and any registration
statements on Form S-8 or its equivalent) and reports on Forms 10-K, 10-Q and 8-
K (or their equivalents) which the Borrower shall have filed with the Securities
and Exchange Commission;
(i) if and when any member of the ERISA Group (i) gives or is
required to give notice to the PBGC of any "reportable event" (as defined in
Section 4043 of ERISA) with respect to any Plan which might constitute grounds
for a termination of such Plan under Title IV of ERISA, or knows that the plan
administrator of any Plan has given or is required to give notice of any such
reportable event, a copy of the notice of such reportable event given or
required to be given to the PBGC; (ii) receives notice of complete or partial
withdrawal liability under Title IV of ERISA or notice that any Multiemployer
Plan is in reorganization, is insolvent or has been terminated, a copy of such
notice; (iii) receives notice from the PBGC under Title IV of ERISA of an intent
to terminate, impose liability (other than for premiums under Section 4007 of
ERISA) in respect of, or appoint a trustee to administer any Plan, a copy of
such notice; (iv) applies for a waiver of the minimum funding standard under
Section 412 of the Internal Revenue Code, a copy of such application; (v) gives
notice of intent to terminate any Plan under Section 4041(c) of ERISA, a copy of
such notice and other information filed with the PBGC; (vi) gives notice of
withdrawal from any Plan pursuant to Section 4063 of ERISA, a copy of such
notice; or (vii) fails to make any payment or contribution to any Plan or
Multiemployer Plan or in respect of any Benefit Arrangement or makes any
amendment to any Plan or Benefit Arrangement which has resulted or could result
in the imposition of a Lien or the posting of a bond or other security, a
certificate of the controller of the Borrower setting forth details as to such
occurrence and action, if any, which the Borrower or applicable member of the
ERISA Group is required or proposes to take;
(j) simultaneously with delivery of the certificate required pursuant to
Section 5.01(c), an updated Schedule 4.18, certified by the chief financial or
accounting officer or any senior vice president or vice president of the
Borrower as true, correct and complete as of the date such updated schedules are
delivered;
-56-
(k) within fifteen (15) days after filing of the annual income tax return
with the Internal Revenue Service, a certificate of the chief financial or
accounting officer of Borrower certifying that Borrower is properly classified
and continues to qualify as a real estate investment trust under the Internal
Revenue Code and has taken all actions consistent with maintaining such status;
and
(l) from time to time such additional information regarding the financial
position or business of the Borrower and its Subsidiaries as the Agent, at the
request of any Bank, may reasonably request.
SECTION 5.02. Payment of Obligations. The Borrower will pay and
----------------------
discharge, and will cause each Subsidiary to pay and discharge, at or before
maturity, all their respective material obligations and liabilities, including,
without limitation, any obligation pursuant to any agreement by which it or any
of its properties, or any Subsidiary or any of its Subsidiaries' properties, may
be bound and any tax liabilities, impositions, assessments, and public charges
of every character, except where the same may be contested in good faith by
appropriate proceedings, and will maintain, and will cause each Subsidiary to
maintain, in accordance with generally accepted accounting principles,
appropriate reserves for the accrual of any of the same.
SECTION 5.03. Maintenance of Property; Insurance.
----------------------------------
(a) The Borrower will keep, and will cause each Subsidiary to keep,
all property useful and necessary in its business in good order and condition,
ordinary wear and tear excepted.
(b) The Borrower shall or shall cause the Subsidiaries to maintain "all
risk" insurance covering 100% replacement cost of its real property assets with
insurers having an A.M. Best policyholder's rating of not less than A- and
financial size category of not less than X which insurance shall in any event
not provide for materially less coverage than the insurance in effect on the
Closing Date. The Borrower will deliver to the Banks (i) upon request of any
Bank through the Agent from time to time full information as to the insurance
carried, (ii) within five days of receipt of notice from any insurer a copy of
any notice of cancellation or material change in coverage from that existing on
the date of this Agreement and (iii) forthwith, notice of any cancellation or
nonrenewal of coverage by the Borrower.
SECTION 5.04. Conduct of Business and Maintenance of Existence. The
------------------------------------------------
Borrower will (x) continue to engage in business of the same general type as now
conducted by the Borrower, and will preserve, renew and keep in full force
-57-
and effect its corporate existence and its rights, privileges and franchises
necessary or desirable in the normal conduct of business and (y) except to the
extent that a failure to do so would not have a Material Adverse Effect, cause
each Subsidiary to engage in business of the same general type as now conducted
by the Borrower and its Subsidiaries, and preserve, renew and keep in full force
and effect their respective corporate or partnership existence and their
respective rights, privileges and franchises necessary or desirable in the
normal conduct of business; provided that nothing in this Section 5.04 shall
--------
prohibit (i) the merger of a Subsidiary into the Borrower or the merger or
consolidation of a Subsidiary with or into another Person if the corporation
surviving such consolidation or merger is a Subsidiary and if, in each case,
after giving effect thereto, no Default shall have occurred and be continuing,
(ii) the termination of the corporate existence of any Subsidiary if the
Borrower in good faith determines that such termination is in the best interest
of the Borrower and is not materially disadvantageous to the Banks, or (iii) the
Homestead Investment.
SECTION 5.05. Compliance with Laws. The Borrower will comply, and
--------------------
cause each Subsidiary to comply, with all applicable laws, ordinances, rules,
regulations, and requirements of governmental authorities (including, without
limitation, Environmental Laws, land use laws, all zoning and building codes
with respect to the Real Property Assets and ERISA and the rules and regulations
thereunder) except where the necessity of compliance therewith is contested in
good faith by appropriate proceedings and except to the extent non-compliance
would not have a Material Adverse Effect.
SECTION 5.06. Inspection of Property, Books and Records. The Borrower
-----------------------------------------
will keep, and will cause each Subsidiary to keep, proper books of record and
account in which full, true and correct entries shall be made of all dealings
and transactions in relation to its business and activities; and will permit,
and will cause each Subsidiary to permit, representatives of any Bank at such
Bank's expense and risk to visit and inspect any of their respective properties,
including without limitation the Real Property Assets, to examine and make
abstracts from any of their respective books and records and to discuss their
respective affairs, finances and accounts with their respective officers,
employees and independent public accountants, all at such reasonable times, upon
reasonable prior notice and as often as may reasonably be desired.
SECTION 5.07. Debt to Consolidated Tangible Net Worth. As of the last
---------------------------------------
day of each calendar quarter, the ratio as of the date of determination of (i)
the sum of (x)
-58-
the aggregate Debt of the Borrower and its Consolidated Subsidiaries and (y) the
Borrower's pro rata share of the Debt of any Subsidiaries of the Borrower which
are not Consolidated Subsidiaries, at the time of determination, to (ii)
Consolidated Tangible Net Worth of the Borrower and its Consolidated
Subsidiaries will be equal to or less than 1.0:1.
SECTION 5.08. EBITDA to Interest Expense Coverage. As of the last day
-----------------------------------
of each calendar quarter, the ratio of EBITDA to Combined Interest Expense will
not, for the previous four (4) consecutive quarters including the quarter then
ended, be less than 2.0:l.
SECTION 5.09. Adjusted EBITDA to Debt Service Coverage. As of the
----------------------------------------
last day of each calendar quarter, the ratio of (x) Adjusted EBITDA to (y)
Combined Debt Service for the previous four (4) consecutive quarters including
the quarter then ended, will not be less than 1.4:1.
SECTION 5.10. Unencumbered Cash Flow. If Borrower shall not have an
----------------------
Investment Grade Rating from both S&P and Xxxxx'x, as of the last day of each
calendar quarter, the ratio of (x) Unencumbered Asset Pool Cash Flow to (y)
Unsecured Interest Expense for the previous four (4) consecutive quarters
including the quarter then ended, will not be less than 1.75:1.
SECTION 5.11. Unencumbered Asset Pool Value. (a) At no time shall the
-----------------------------
ratio, calculated on a quarterly basis by the Borrower as of the last day of
each calendar quarter, of the sum of (i) the Unencumbered Asset Pool Value and
(ii) 50% of the aggregate book value of the Construction Assets which are
multifamily residential property, as of the date of determination, to the
aggregate amount of Unsecured Debt outstanding as of the date of determination,
be less than 1.75:1.
(b) At no time shall the ratio, calculated on a quarterly basis by
the Borrower as of the last day of each calendar quarter, of the Unencumbered
Asset Pool Value to the aggregate amount of Unsecured Debt outstanding as of the
date of determination, be less than 1.5:1.
SECTION 5.12. Minimum Consolidated Tangible Net Worth. Consolidated
---------------------------------------
Tangible Net Worth will at no time be less than the sum of (x) $500,000,000 and
(y) seventy-five percent (75%) of all Net Offering Proceeds received by Borrower
after the date hereof, but less seventy-five percent (75%) of the cost of any
repurchases of any shares or other equity interests in Borrower.
-59-
SECTION 5.13. Secured Debt Ratio. Secured Debt of the Borrower and
------------------
its Consolidated Subsidiaries shall at no time exceed forty (40%) percent of
Gross Asset Value.
SECTION 5.14. Debt to Total Asset Value Ratio. After the Conversion
-------------------------------
Date, at no time shall the ratio, calculated on a quarterly basis by the
Borrower as of the last day of each calendar quarter, of the aggregate amount of
Debt of the Borrower and its Consolidated Subsidiaries outstanding as of the
date of determination, to Total Asset Value exceed fifty-five percent (55%)
during the first year after the Conversion Date, if any, and fifty percent (50%)
thereafter.
SECTION 5.15. Investments in Unimproved Real Property. The aggregate
---------------------------------------
amount of the investments of the Borrower and its Consolidated Subsidiaries in
unimproved real property, excluding Construction Assets, will at no time exceed
10% of Gross Asset Value.
SECTION 5.16. Minority Holdings. The value of the Borrower's Minority
-----------------
Holdings, exclusive of the Homestead Investment, shall at no time exceed ten
(10%) percent of Gross Asset Value.
SECTION 5.17. Joint Ventures. The value of the Borrower's interest
--------------
in any joint ventures, whether consolidated or unconsolidated, shall at no
time exceed ten (10%) percent of Gross Asset Value.
SECTION 5.18. Restricted Payments. The Borrower will not make any
-------------------
Restricted Payment during any of its fiscal quarters which, when added to all
Restricted Payments made during the three immediately preceding fiscal quarters,
exceeds 95% of the Funds From Operations during its four fiscal quarters then
most recently ended; provided that the foregoing shall not prohibit the Borrower
--------
from making the minimum amount of Restricted Payments required to be made in
order for the Borrower to comply with the provisions of Section 5.32. For
purposes of this provision "Restricted Payment" means (i) any dividend or other
------------------
distribution on any shares of the Borrower's capital stock (except dividends
payable solely in shares of its capital stock or in rights to subscribe for or
purchase shares of its capital stock) or (ii) any payment on account of the
purchase, redemption, retirement or acquisition of (a) any shares of the Bor
rower's capital stock or (b) any option, warrant or other right to acquire
shares of the Borrower's capital stock.
SECTION 5.19. Certain Requirements for the Unencumbered Asset Pool.
-----------------------------------------------------
-60-
(a) At all times, (i) the Real Property Assets in the
Unencumbered Asset Pool shall be on average during any consecutive twelve-month
period at least 85% leased to tenants and (ii) no Real Property Asset in the
Unencumbered Asset Pool shall be less than 85% leased to tenants during any
consecutive six-month period (provided, however, that with respect to
Construction Assets that have achieved the required 85% leased status and are no
longer deemed to be Construction Assets, the foregoing requirement that the same
shall have been 85% leased for an initial six months shall not apply). In the
event that the requirements of this Section 5.19 are not satisfied and if
Borrower would not be in compliance with the covenants contained in this Article
V if such Real Property Asset were not in the Unencumbered Asset Pool based on
pro forma calculations as of the last day of the previous calendar quarter, the
Borrower shall be prohibited from further Borrowings unless Borrower adds a New
Acquisition or Real Property Asset to the Unencumbered Asset Pool in accordance
with this Agreement in order to restore compliance with the requirements of this
provision. Failure to restore compliance with the requirements of this Section
5.19 within thirty (30) days of such non-compliance shall be an Event of
Default.
(b) Any Subsidiary which owns any of the Real Property Assets
in the Unencumbered Asset Pool shall not at any time incur any Recourse Debt for
borrowed money which in the aggregate exceeds $100,000 unless such Subsidiary
guaranties Borrower's obligations under this Agreement.
SECTION 5.20. Investments. Neither the Borrower nor any Consolidated
-----------
Subsidiary will make or acquire any Investment in any Person other than:
(i) Investments in Subsidiaries made primarily for the purpose of
(A) prudent tax planning as disclosed to the Agent in writing at least ten (10)
days prior to such transaction or (B) assuming or refinancing Debt described in
Sections 5.26 (i) and (ii),
(ii) Temporary Cash Investments,
(iii) Permitted Investments,
(iv) the Homestead Investment, and
(v) any Investment not otherwise permitted by the foregoing clauses
of this Section if, immediately after such Investment is made or acquired, the
aggregate net book value of all Investments permitted by this clause (v) does
not exceed 10% of Consolidated Tangible Net Worth.
-61-
SECTION 5.21. Consolidations, Mergers and Sales of Assets. The
-------------------------------------------
Borrower will not (i) consolidate or merge with or into any other Person or (ii)
sell, lease or otherwise transfer, directly or indirectly, all or any
substantial part of the assets of the Borrower and its Subsidiaries, taken as a
whole, to any other Person.
SECTION 5.22. Use of Proceeds. The proceeds of the Loans made under
---------------
this Agreement will be used by the Borrower to directly or indirectly acquire
and develop parcels of real property improved or to be improved by income-
producing multifamily buildings, to refinance the acquisition costs thereof, for
the Homestead Investment and for working capital purposes, provided, however,
the Outstanding Working Capital Amount shall not exceed $30,000,000 at any one
time. None of such proceeds will be used, directly or indirectly, for the
purpose, whether immediate, incidental or ultimate, of buying or carrying any
"margin stock" within the meaning of Regulation U.
SECTION 5.23. Sale of Unencumbered Asset Pool. Prior to the sale or
-------------------------------
transfer of any Real Property Asset in the Unencumbered Asset Pool or any
interest in any Subsidiary owning any Real Property Asset in the Unencumbered
Asset Pool, to which, individually or in the aggregate, $25,000,000 or more of
Gross Asset Value is attributable, the Borrower shall (i) deliver prior written
notice to the Agent and the Banks, (ii) deliver to the Agent and the Banks a
certificate from its chief financial or accounting officer certifying that at
the time of such sale or other disposal (based on pro-forma calculations for the
previous period assuming that such Real Property Asset or interest was not owned
by Borrower for the relevant period) all of the covenants contained in Sections
5.07 through 5.19 are and after giving effect to the transaction shall continue
to be true and accurate in all respects, and (iii) pay to the Lead Agent an
amount equal to that required pursuant to Section 2.10(e).
SECTION 5.24. Liens; Release of Liens. Neither the Borrower nor any
-----------------------
of its Subsidiaries shall at any time during the Term directly or indirectly
create, incur, assume or permit to exist any Lien for borrowed monies or any
other Lien unless the same is being contested in good faith and the same is
discharged, bonded off or paid within sixty (60) days of filing of such Lien, on
or with respect to any Real Property Asset in the Unencumbered Asset Pool.
Notwithstanding the foregoing, the Borrower may obtain a release from the terms
of this Agreement of any Real Property Asset in the Unencumbered Asset Pool
provided that the Borrower has complied with Section 2.10(e) and prior to or
simultaneously with such release (i) Borrower shall pay to the Agent any amounts
due pursuant to Section 2.10(e), and (ii)
-62-
Borrower delivers to the Agent and the Banks a certificate from its chief
financial or accounting officer certifying that at the time of the release all
of the covenants con tained in Sections 5.07 through 5.19 are and after giving
effect to the transaction shall continue to be true and accurate in all
respects.
SECTION 5.25. Limitations on Recourse Debt. Neither the Borrower nor
----------------------------
any Consolidated Subsidiary shall at any time create, incur or guaranty any
Recourse Debt, except for at such time and for so long as Borrower shall
maintain a long term debt rating from both S&P and Xxxxx'x of not less than BBB-
/Baa3 (an "Investment Grade Rating"), (i) $500,000,000 of Recourse Debt which is
-----------------------
Unsecured Debt (inclusive of the Loans), and (ii) Unsecured Debt with an
Investment Grade Rating or better at the time of issuance.
SECTION 5.26. Limitations on Subsidiary Debt. The Borrower will not
------------------------------
permit any Subsidiary to have or incur any Debt other than (i) Debt incurred or
assumed for the purpose of financing all or any part of the cost of acquiring or
developing an asset, provided that the amount of Debt so incurred or assumed
--------
does not exceed the acquisition or development cost of such asset, (ii) Debt
consisting, or in respect, of existing tax-exempt bonds or the refinancing
thereof, (iii) Debt the sole obligee of which is the Borrower and (iv)
Permitted Intercompany Debt.
SECTION 5.27. Other Debt Instruments. The Borrower will not, and
----------------------
will not permit any Subsidiary to enter into any agreement containing any
provision (a) which would be violated or breached by any Borrowings hereunder or
by the performance by the Borrower of its obligations hereunder or under any
other Loan Document, or (b) which is materially more restrictive upon the
Borrower than the terms and conditions of this Agreement. The Borrower will not,
and will not permit any of its Subsidiaries to, enter into any agreement (other
than this Agreement and the other Loan Documents) prohibiting the creation or
assumption of any Lien upon its properties (other than with respect to any
mortgage on a particular property), revenues or assets, whether now owned or
hereafter acquired, or restricting the ability of the Borrower to amend or
modify this Agreement or any other Loan Document.
SECTION 5.28. Hedging Requirements. The Borrower shall maintain
--------------------
Interest Rate Xxxxxx on a notional amount of the Debt of the Borrower and its
Consolidated Subsidiaries which, when added to the aggregate principal amount of
the Debt of the Borrower and its Consolidated Subsidiaries which bears interest
at a fixed rate, equals or exceeds 100% of the aggregate principal amount of all
Debt, exclusive of the Loans, of the Borrower and its Consolidated Subsidiaries,
-63-
except in connection with the assumption of up to $75,000,000 of Debt and the
Obligations and principal reserve funds required to be maintained in
connection with tax-exempt bonds.
SECTION 5.29. Restriction on Intercompany Debt; Subordination. The
-----------------------------------------------
Borrower (x) will cause each Subsidiary not to, and (y) as lender to Homestead
will not, modify or waive in any manner the terms of the Permitted Intercompany
Debt, and will cause each Subsidiary to comply with the terms of the
subordination provisions thereof. The Borrower will not, and will not permit
any Subsidiary to, sell, transfer, assign or pledge any Permitted Intercompany
Debt of which it is the obligee.
SECTION 5.30. Affiliate Transactions. The Borrower will not enter
----------------------
into any transaction with or make any payment to any Affiliates of the Borrower,
other than the Management Investment, the Administrative Services Contract, the
Investor Agreement between Group and the Borrower or Permitted Intercompany Debt
or any payments made in accordance therewith or dividends on shares of capital
stock to the extent not prohibited hereby. Notwithstanding the foregoing, the
Borrower or any Subsidiary may enter into transactions with Affiliates (other
than purchases or sales of real property, loan transactions or transactions for
services provided pursuant to the Property Management Contract) which involve
(i) underwriting or placement agent agreements as to which no amounts are
payable by the Borrower other than expenses payable to third parties or
indemnity obligations, in each case not less favorable to the Borrower or any
Subsidiary than those which are generally available in the market, (ii) stock
purchase, option or warrant agreements in which the Borrower is selling or
agreeing to sell Equity Interests thereunder, (iii) collective insurance
agreements, (iv) the Homestead Investment or (v) any other contract as to which
the Borrower gives the Agent 30 days prior notice of the terms thereof and, in
the reasonable judgment of the Required Banks, such terms are not less favorable
to the Borrower or any Subsidiary than those which are generally available in
the market. In addition, notwithstanding the foregoing, the Borrower may enter
into (i) temporary or bridge loan transactions with Group or any wholly-owned
subsidiary thereof, which loans shall be unsecured and subordinate (on the same
terms and conditions as set forth in clauses (A) and (B) of the definition of
"Permitted Intercompany Debt") to any and all Loans made by any Bank and
terminable upon thirty (30) days' notice and (ii) any and all transactions with
or through Atlantic Development Services Incorporated which are permitted by,
and in accordance with the terms of, this Agreement. No such transaction with or
through Atlantic Development Services Incorporated ("ADS") shall be permitted,
---
unless (i) all
-64-
loans or advances to ADS are secured by first priority liens and security
interests (subject only to prior liens and security interests securing
performance guaranties granted in the ordinary course of ADS' business) in real
properties developed or acquired by ADS, (ii) the Borrower shall, at all times,
beneficially own at least ninety percent (90%) of the economic interests in ADS,
and (iii) the financial condition and results of operation of ADS shall be
consolidated with those of the Borrower for purposes of the financial
statements.
SECTION 5.31. Contracts. The Borrower will not, and will cause each
---------
Subsidiary not to, modify the Administrative Services Contract in any manner
that (i) materially increases fees payable thereunder, or (ii) adversely affects
the Borrower's termination rights.
SECTION 5.32. Real Estate Investment Trust. At all times prior to
----------------------------
electing treatment as a REIT, the Borrower (including without limitation its
organization and method of operations and those of its subsidiaries) will
satisfy the conditions specified in Sections 856 through 859 of the Internal
Revenue Code in order to elect treatment as a REIT. Borrower will timely elect
treatment as a REIT for the tax year 1994 and will for each tax year thereafter
continue to qualify as, and maintain its election under Section 856(c)(1) of the
Internal Revenue Code to be, a REIT.
SECTION 5.33. No Plan Assets. The Borrower will at no time hold
--------------
"plan assets" within the meaning of Section 2510.3-101 of the Regulations of the
Department of Labor.
SECTION 5.34. Environmental Matters. At its sole cost and expense,
---------------------
the Borrower will comply with, and will cause each Subsidiary to comply with,
all Environmental Laws, except to the extent non-compliance would not have a
Material Adverse Effect. Without limiting the generality of the foregoing, the
Borrower will not, and will cause each Subsidiary not to, use, store, discharge,
install or transport on any Real Property Asset, or permit to be used, stored,
discharged, installed or transported on any Real Property Asset, any Hazardous
Substances other than Hazardous Substances of such types and in such
quantities as are customarily used or stored in or at comparable, prudently-
managed multifamily buildings. Furthermore, the Borrower will (i) immediately
commence any and all remedial action needed according to the environmental
reports delivered to the Agent pursuant to Section 3.01(a)(xvii), (ii)
diligently pursue such action to completion and (iii) promptly deliver to the
Agent notice of initiation as well as notice of completion of such action.
-65-
ARTICLE VI
DEFAULTS
SECTION 6.01. Events of Default. If one or more of the following
-----------------
events ("Events of Default") shall have occurred and be continuing:
-----------------
(a) (i) the Borrower shall fail to pay when due any principal of or
interest on any Loan, or (ii) shall fail to pay for five (5) Business Days after
written notice thereof has been given to the Borrower by the Agent, any fees or
any other amount payable hereunder;
(b) the Borrower shall fail to observe or perform any covenant
contained in Sections 5.07 through 5.14, 5.18, 5.19, 5.21, 5.22, 5.25, 5.27,
5.32, or 5.33, inclusive;
(c) the Borrower shall fail to observe or perform any covenant or
agreement set forth herein other than those specified in Section 6.01(a) or (b),
or the Borrower or any Subsidiary shall fail to perform any covenant or
agreement contained in any other Loan Document to which it is a party, in either
case, for 30 days (or such shorter period as may be provided for therein) after
written notice thereof has been given to the Borrower by the Agent at the
request of any Bank; provided, however, that, in the event a Default hereunder
--------
arises due to a breach of the covenant contained in Section 5.34, which breach
is caused by non-compliance with Environmental Laws affecting a Real Property
Asset (the "Contaminated Property") due solely to the action or inaction of one
---------------------
or more third parties, then the Borrower shall have up to sixty (60) days to (i)
cure such breach (the "Cure Period") and (ii) provide the Agent with a report of
-----------
an environmental consultant, reasonably acceptable to the Required Banks, which
report demonstrates to the reasonable satisfaction of the Required Banks that
such breach has been cured and that the Contaminated Property is in compliance
with applicable Environmental Laws (satisfaction of (i) and (ii) collectively a
"Cure"). In the event the breach of Section 5.34 shall not have been Cured by
----
the end of the Cure Period, then such breach shall constitute an Event of
Default hereunder;
(d) any representation, warranty, certification or statement made by
the Borrower in any Loan Document or in any certificate, financial statement or
other document delivered pursuant to any Loan Document shall prove to have been
incorrect in any material respect when made (or deemed made);
-66-
(e) the Borrower shall default in the payment when due (whether by
scheduled maturity, required prepayment, acceleration, demand or otherwise) of
any amount owing in respect of any Debt (other than the Obligations and Non-
Recourse Debt for which the aggregate outstanding principal amount is
$25,000,000 or less) which is $10,000,000 or more, individually or in the
aggregate, and such default shall continue beyond the giving of any required
notice and the expiration of any applicable grace period and such default has
not been waived, in writing, by the holder of any such Debt; or the Borrower
shall default in the performance or observance of any obligation or condition
with respect to any such Debt or any other event shall occur or condition exist
beyond the giving of any required notice and the expiration of any applicable
grace period, if the effect of such default, event or condition is to accelerate
the maturity of any such indebtedness or to permit (without any further
requirement of notice or lapse of time) the holder or holders thereof, or any
trustee or agent for such holders, to accelerate the maturity of any such
indebtedness;
(f) the Borrower or any Material Subsidiary shall commence a
voluntary case or other proceeding seeking liquidation, reorganization or other
relief with respect to itself or its debts under any bankruptcy, insolvency or
other similar law now or hereafter in effect or seeking the appointment of a
trustee, receiver, liquidator, custodian or other similar official of it or any
substantial part of its property, or shall consent to any such relief or to the
appointment of or taking possession by any such official in an involuntary case
or other proceeding commenced against it, or shall make a general assignment for
the benefit of creditors, or shall fail generally to pay its debts as they
become due, or shall take any corporate action to authorize any of the
foregoing;
(g) an involuntary case or other proceeding shall be commenced
against the Borrower or any Material Subsidiary seeking liquidation,
reorganization or other relief with respect to it or its debts under any
bankruptcy, insolvency or other similar law now or hereafter in effect or
seeking the appointment of a trustee, receiver, liquidator, custodian or other
similar official of it or any substantial part of its property, and such
involuntary case or other proceeding shall remain undismissed and unstayed for
a period of 90 days; or an order for relief shall be entered against the
Borrower or any Material Subsidiary under the federal bankruptcy laws as now
or hereafter in effect;
(h) any member of the ERISA Group shall fail to pay when due an
amount or amounts aggregating in excess of $25,000,000 which it shall have
become liable to pay under Title IV of ERISA; or notice of intent to terminate a
Mate-
-67-
rial Plan shall be filed under Title IV of ERISA by any member of the
ERISA Group, any plan administrator or any combination of the foregoing; or the
PBGC shall institute proceedings under Title IV of ERISA to terminate, to impose
liability (other than for premiums under Section 4007 of ERISA) in respect of,
or to cause a trustee to be appointed to administer any Material Plan; or a
condition shall exist by reason of which the PBGC would be entitled to obtain a
decree adjudicating that any Material Plan must be terminated; or there shall
occur a complete or partial withdrawal from, or a default, within the meaning of
Section 4219(c)(5) of ERISA, with respect to, one or more Multiemployer Plans
which could cause one or more members of the ERISA Group to incur a current
payment obligation in excess of $5,000,000;
(i) a judgment or order for the payment of money in excess of
$25,000,000 shall be rendered against the Borrower or any Subsidiary and such
judgment or order shall continue unsatisfied and unstayed for a period of 30
days (excluding any judgment as to which, and only to the extent, a reputable
insurance company has acknowledged coverage of such claim in writing);
(j) (i) the Borrower is no longer an Affiliate of Group, is no longer
controlled by Group, or Group no longer owns beneficially, and either of record
or through a wholly-owned subsidiary of Group which holds of record, at least
20% of each class of Equity Interests of the Borrower having the right to vote
on the election of directors and any other material actions, proposals, issues
or activities of the Borrower and its Subsidiaries, or (ii) the New Manager, to
the extent that the same shall exist, is no longer a wholly-owned Subsidiary of
Borrower;
(k) any person or group of persons (within the meaning of Section 13
or 14 of the Securities Exchange Act of 1934, as amended) other than Group shall
have acquired beneficial ownership (within the meaning of Rule 13d-3 promulgated
by the Securities and Exchange Commission under said Act) of a percentage of any
class of Equity Interests of the Borrower having the right to vote on the
election of directors and any other material actions, proposals, issues or
activities of the Borrower and its Subsidiaries, equal to the percentage of such
class then owned beneficially by Group minus 10% or, during any period of 24
consecutive calendar months commencing on or after November 1, 1997, individuals
who were directors of the Borrower on the first day of such period (and
directors appointed or nominated by any number of such individuals) shall cease
to constitute a majority of the board of directors of the Borrower;
-68-
(l) any Loan Document shall for any reason cease to be in full force
and effect, or the material rights, powers and privileges purported to be
created thereby; or
(m) Borrower shall cease at any time to qualify as a REIT under the
Internal Revenue Code;
then, and in every such event, the Agent shall (i) if requested by Banks
having more than 50% in aggregate amount of the Commitments, by notice to the
Borrower terminate the Commitments and they shall thereupon terminate, or (ii)
if requested by Banks holding Notes evidencing more than 50% in aggregate
principal amount of the Loans, by notice to the Borrower declare the Notes
(together with accrued interest thereon) to be, and the Notes shall thereupon
become, immediately due and payable without presentment, demand, protest or
other notice of any kind, all of which are hereby waived by the Borrower;
provided that in the case of any of the Events of Default specified in clause
--------
(g) or (h) above with respect to the Borrower, without any notice to the
Borrower or any other act by the Agent or the Banks, the Commitments shall
thereupon terminate and the Notes (together with accrued interest thereon) shall
become immediately due and payable without presentment, demand, protest or other
notice of any kind, all of which are hereby waived by the Borrower.
SECTION 6.02. Notice of Default. The Agent shall give notice to the
-----------------
Borrower under Section 6.01(c) promptly upon being requested to do so by any
Bank and shall thereupon notify all the Banks thereof.
ARTICLE VII
THE AGENT
SECTION 7.01. Appointment and Authorization. Each Bank irrevocably
-----------------------------
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 all such
powers as are reasonably incidental thereto.
SECTION 7.02. Agent and Affiliates. Xxxxxx Guaranty Trust Company of
--------------------
New York shall have the same rights and powers under this Agreement as any other
Bank and may exercise or refrain from exercising the same as though it were not
the Agent, and Xxxxxx Guaranty Trust Company of New York and its affiliates may
accept deposits from, lend money to, and generally engage in any kind of
business with
-69-
the Borrower or any Subsidiary or affiliate of the Borrower as if it were not
the Agent hereunder.
SECTION 7.03. Action by Agent. The obligations of the Agent
---------------
hereunder are only those expressly set forth herein. Without limiting the
generality of the foregoing, the Agent shall not be required to take any action
with respect to any Default, except as expressly provided in Article VI.
SECTION 7.04. Consultation with Experts. The Agent may consult with
-------------------------
legal counsel (who may be counsel for the Borrower), independent public
accountants and other experts selected by it and shall not be liable for any
action taken or omitted to be taken by it in good faith in accordance with the
advice of such counsel, accountants or experts.
SECTION 7.05. Liability of Agent. Neither the Agent nor any of its
------------------
affiliates nor any of their respective directors, officers, agents or employees
shall be liable for any action taken or not taken by it in connection herewith
(i) with the consent or at the request of the Required Banks or of a lesser
number of Banks requesting action pursuant to Section 6.01 or (ii) in the
absence of its own gross negligence or willful misconduct. Neither the Agent
nor any of its directors, officers, agents or employees shall be responsible
for or have any duty to ascertain, inquire into or verify (i) any statement,
warranty or representation made in connection with this Agreement or any
borrowing hereunder; (ii) the performance or observance of any of the covenants
or agreements of the Borrower; (iii) the satisfaction of any condition specified
in Article III, except receipt of items required to be delivered to the Agent;
or (iv) the validity, effectiveness or genuineness of this Agreement, the Notes,
any other Loan Documents or any other instrument or writing furnished in
connection herewith or therewith. The Agent shall not incur any liability by
acting in reliance upon any notice, consent, certificate, statement, or other
writing (which may be a bank wire, telex or similar writing) believed by it to
be genuine or to be signed by the proper party or parties.
SECTION 7.06. Indemnification. Each Bank shall, ratably in
---------------
accordance with its Commitment, indemnify the Agent, its affiliates and their
respective directors, officers, agents and employees (to the extent not
reimbursed by the Borrower) against any cost, expense (including counsel fees
and disbursements), claim, demand, action, loss or liability (except such as
result from such indemnitees' gross negligence or willful misconduct) that such
indemnitees may suffer or incur in connection with this
-70-
Agreement or any other Loan Document or any action taken or omitted by such
indemnitees hereunder or thereunder.
SECTION 7.07. Credit Decision. Each Bank acknowledges that it has,
---------------
independently and without reliance upon the Agent or any other Bank, and based
on such documents and information as it has deemed appropriate, made its own
credit analysis and decision to enter into this Agreement. Each Bank also
acknowledges that it will, independently and without reliance upon the Agent or
any other Bank, 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 any action under this Agreement.
SECTION 7.08. Successor Agent. The Agent may resign at any time by
---------------
giving notice thereof to the Banks and the Borrower. Upon any such resignation,
the Required Banks shall have the right to appoint a successor Agent, which
successor Agent, provided no Event of Default shall have occurred and be
continuing, shall be subject to approval by the Borrower, which approval shall
not be unreasonably withheld or delayed. If no successor Agent shall have been
so appointed by the Required Banks, and shall have accepted such appointment,
within 30 days after the retiring Agent gives notice of resignation, then the
retiring Agent may, on behalf of the Banks, appoint a successor Agent. The
Agent, whether appointed by the Required Banks or by the retiring Agent, shall
be a commercial bank organized or licensed under the laws of the United States
of America or of any State thereof and having a combined capital and surplus of
at least $500,000,000. Upon the acceptance of its appointment as Agent hereunder
by a successor Agent, such successor Agent shall thereupon succeed to and become
vested with all the rights and duties of the retiring Agent, and the retiring
Agent shall be discharged from its duties and obligations hereunder. After any
retiring Agent's resignation hereunder as Agent, the provisions of this Article
shall inure to its benefit as to any actions taken or omitted to be taken by it
while it was Agent. In addition, if Xxxxxx Guaranty Trust Company of New York
("Xxxxxx"), as Agent, shall at any time hold Commitments equal to less than
------
$25,000,000 in the aggregate, it shall promptly notify the Banks and the
Borrower thereof and shall offer to resign as Agent. If such offer shall be
accepted by the Required Banks (for this purpose only, Xxxxxx shall be deemed to
have accepted its own offer to resign), a successor Agent shall be appointed in
accordance with this Section 7.08.
SECTION 7.09. Agent's Fee. The Borrower shall pay to the Agent for
-----------
its own account fees in the amounts and at the times previously agreed upon
between the Borrower and the Agent.
-71-
ARTICLE VIII
CHANGE IN CIRCUMSTANCES
SECTION 8.01. Basis for Determining Interest Rate Inadequate or
-------------------------------------------------
Unfair. If on or prior to the first day of any Interest Period for any Fixed
------
Rate Borrowing or Money Market Borrowing:
(a) the Agent is advised by the Euro-Dollar Reference Bank that
deposits in dollars (in the applicable amounts) are not being offered to the
Euro-Dollar Reference Bank in the relevant market for such Interest Period, or
(b) Banks having 50% or more of the aggregate principal amount of the
affected Loans advise the Agent that the Adjusted London Interbank Offered Rate,
as the case may be, as determined by the Agent will not adequately and fairly
reflect the cost to such Banks of funding their Euro-Dollar Loans for such
Interest Period,
the Agent shall forthwith give notice thereof to the Borrower and the Banks,
whereupon until the Agent notifies the Borrower that the circumstances giving
rise to such suspension no longer exist, (i) the obligations of the Banks to
make Euro-Dollar Loans, as the case may be, or to convert outstanding Loans into
Euro-Dollar Loans shall be suspended and (ii) each outstanding Euro-Dollar Loan
shall be converted into a Base Rate Loan on the last day of the then current
Interest Period applicable thereto. Unless the Borrower notifies the Agent at
least two Domestic Business Days before the date of any Fixed Rate Borrowing or
Money Market Borrowing for which a Notice of Committed Borrowing has previously
been given that it elects not to borrow on such date, (i) if such Borrowing is a
Committed Borrowing, such Borrowing shall instead be made as a Base Rate Borrow-
ing, and (ii) if such Borrowing is a Money Market LIBOR Borrowing, the Money
Market LIBOR Loans comprising such Borrow ing shall bear interest for each day
from and including the first day to but excluding the last day of the Interest
Period applicable thereto at the Base Rate for such day.
SECTION 8.02. Illegality. If, on or after the date of this
----------
Agreement, the adoption of any applicable law, rule or regulation, or any change
in any applicable law, rule or regulation, or any change in the interpretation
or administration thereof by any governmental authority, central bank or
comparable agency charged with the interpretation or administration thereof, or
compliance by any Bank (or its Euro-Dollar Lending Office) with any request or
directive (whether or not having the force of law) of any
-72-
such authority, central bank or comparable agency shall make it unlawful or
impossible for any Bank (or its Euro-Dollar Lending Office) to make, maintain or
fund its Euro-Dollar Loans or Money Market Loans and such Bank shall so notify
the Agent, the Agent shall forthwith give notice thereof to the other Banks and
the Borrower, whereupon until such Bank notifies the Borrower and the Agent that
the circumstances giving rise to such suspension no longer exist, the obligation
of such Bank to make or convert Euro-Dollar Loans or Money Market Loans, or to
convert outstanding Loans into Euro-Dollar Loans, shall be suspended. Before
giving any notice to the Agent pursuant to this Section, such Bank shall
designate a different Euro-Dollar Lending Office if such designation will avoid
the need for giving such notice and will not, in the judgment of such Bank, be
otherwise disadvantageous to such Bank. If such notice is given, each Euro-
Dollar Loan or Money Market Loan of such Bank then outstanding shall be
converted to a Base Rate Loan either (a) on the last day of the then current
Interest Period applicable to such Euro-Dollar Loan or Money Market Loan if such
Bank may lawfully continue to maintain and fund such Loan to such day or (b)
immediately if such Bank shall determine that it may not lawfully continue to
maintain and fund such Loan to such day.
SECTION 8.03. Increased Cost and Reduced Return.
---------------------------------
(a) If on or after (x) the date hereof, in the case of any Committed
Loan or any obligation to make Committed Loans, or (y) the date of the related
Money Market Quote, in the case of any Money Market Loan, the adoption of any
applicable law, rule or regulation, or any change in any applicable law, rule or
regulation, or any change in the interpretation or administration thereof by any
governmental authority, central bank or comparable agency charged with the
interpretation or administration thereof, or compliance by any Bank (or its
Applicable Lending Office) with any request or directive (whether or not having
the force of law) of any such authority, central bank or comparable agency shall
impose, modify or deem applicable any reserve (including, without limitation,
any such requirement imposed by the Board of Governors of the Federal Reserve
System, but excluding with respect to any Euro-Dollar Loan any such requirement
included in an applicable Euro-Dollar Reserve Percentage), special deposit,
insurance assessment or similar requirement against assets of, deposits with or
for the account of, or credit extended by, any Bank (or its Applicable Lending
Office) or shall impose on any Bank (or its Applicable Lending Office) or on the
United States market for certificates of deposit or the London interbank market
any other condition affecting its Fixed Rate Loans or Money Market Loans, its
Note or its obligation to make Fixed Rate Loans, and the result of any of the
foregoing is to increase the cost to such Bank (or its Applicable Lending
Office) of
-73-
making or maintaining any Fixed Rate Loan, or to reduce the amount of any sum
received or receivable by such Bank (or its Applicable Lending Office) under
this Agreement or under its Note with respect thereto, by an amount deemed by
such Bank to be material, then, within 15 days after demand by such Bank (with a
copy to the Agent), and provided such Bank is generally exercising rights
similar to those set forth in this Section 8.03 (a) against other borrowers
similarly situated to the Borrower, the Borrower shall pay to such Bank such
additional amount or amounts as will compensate such Bank for such increased
cost or reduction.
(b) If any Bank shall have determined that, after the date hereof,
the adoption of any applicable law, rule or regulation regarding capital
adequacy, or any change in any such law, rule or regulation, or any change in
the interpretation or administration thereof by any governmental authority,
central bank or comparable agency charged with the interpretation or
administration thereof, or any request or directive regarding capital adequacy
(whether or not having the force of law) of any such authority, central bank or
comparable agency, has or would have the effect of reducing the rate of return
on capital of such Bank (or its Parent) as a consequence of such Bank's
obligations hereunder to a level below that which such Bank (or its Parent)
could have achieved but for such adoption, change, request or directive (taking
into consideration its policies with respect to capital adequacy) by an amount
deemed by such Bank to be material, then from time to time, within 15 days after
demand by such Bank (with a copy to the Agent), and provided such Bank is
generally exercising rights similar to those set forth in this Section 8.03(b)
against other borrowers similarly situated to the Borrower, the Borrower shall
pay to such Bank such additional amount or amounts as will compensate such Bank
(or its Parent) for such reduction.
(c) Each Bank will promptly notify the Borrower and the Agent of any
event of which it has knowledge, occurring after the date hereof, which will
entitle such Bank to compensation pursuant to this Section and will designate a
different Applicable Lending Office if such designation will avoid the need for,
or reduce the amount of, such compensation and will not, in the judgment of such
Bank, be otherwise disadvantageous to such Bank. A certificate of any Bank
claiming compensation under this Section and setting forth the additional amount
or amounts to be paid to it hereunder shall be prima facie evidence of the
matters certified therein. In determining such amount, such Bank may use any
reasonable averaging and attribution methods.
-74-
SECTION 8.04. Taxes.
-----
(a) Any and all payments by the Borrower to or for the account of any
Bank or the Agent hereunder or under any Note shall be made free and clear of
and without deduction for any and all present or future taxes, duties, levies,
imposts, deductions, charges or withholdings, and all liabilities with respect
thereto, excluding, in the case of each Bank and the Agent, taxes imposed on its
---------
income, and franchise taxes imposed on it, by the jurisdiction under the laws of
which such Bank or the Agent (as the case may be) is organized or any political
subdivision thereof and, in the case of each Bank, taxes imposed on its income,
and franchise or similar taxes imposed on it, by the jurisdiction of such Bank's
Applicable Lending Office or any political subdivision thereof (all such non-
excluded taxes, duties, levies, imposts, deductions, charges, withholdings and
liabilities being hereinafter referred to as "Taxes"). If the Borrower shall be
required by law to deduct any Taxes from or in respect of any sum payable
hereunder or under any Note to any Bank or the Agent, (i) the sum payable shall
be increased as necessary so that after making all required deductions
(including deductions applicable to additional sums payable under this Section
8.04) such Bank or the Agent (as the case may be) receives an amount equal to
the sum it would have received had no such deductions been made, (ii) the
Borrower shall make such deductions, (iii) the Borrower shall pay the full
amount deducted to the relevant taxation authority or other authority in
accordance with applicable law and (iv) the Borrower shall furnish to the Agent,
at its address referred to in Section 9.01, the original or a certified copy of
a receipt evidencing payment thereof.
(b) In addition, the Borrower agrees to pay any present or future
stamp or documentary taxes and any other excise or property taxes, or charges or
similar levies, including without limitation documentary, intangibles,
recording, mortgage recording and transfer taxes, which arise from any extension
of credit hereunder, any payment made hereunder or under any Note or from the
execution or delivery or performance of, or the exercise of remedies under, or
otherwise with respect to, this Agreement or any other Loan Document
(hereinafter referred to as "Other Taxes").
-----------
(c) The Borrower agrees to indemnify each Bank and the Agent for the
full amount of Taxes or Other Taxes (including, without limitation, any Taxes or
Other Taxes imposed or asserted by any jurisdiction on amounts payable under
this Section 8.04) paid by such Bank or the Agent (as the case may be) and any
liability (including penalties, interest and expenses) arising therefrom or with
respect thereto. This indemnification shall be made within 15 days
-75-
from the date such Bank or the Agent (as the case may be) makes demand therefor.
(d) Each Bank organized under the laws of a jurisdiction outside the
United States, on or prior to the date of its execution and delivery of this
Agreement in the case of each Bank listed on the signature pages hereof and on
or prior to the date on which it becomes a Bank in the case of each other Bank,
and from time to time thereafter if requested in writing by the Borrower (but
only so long as such Bank remains lawfully able to do so), shall provide the
Borrower with Internal Revenue Service form 1001 or 4224, as appropriate, or any
successor form prescribed by the Internal Revenue Service, certifying that such
Bank is entitled to benefits under an income tax treaty to which the United
States is a party which reduces the rate of withholding tax on payments of
interest or certifying that the income receivable pursuant to this Agreement is
effectively connected with the conduct of a trade or business in the United
States. If the form provided by a Bank at the time such Bank first becomes a
party to this Agreement indicates a United States interest withholding tax rate
in excess of zero, withholding tax at such rate shall be considered excluded
from "Taxes" as defined in Section 8.04(a).
(e) For any period with respect to which a Bank has failed to provide
the Borrower with the appropriate form pursuant to Section 8.04(d) (unless such
failure is due to a change in treaty, law or regulation occurring subsequent to
the date on which a form originally was required to be provided), such Bank
shall not be entitled to indemnification under Section 8.04(a) with respect to
Taxes imposed by the United States; provided that, should a Bank, which is
--------
otherwise exempt from or subject to a reduced rate of withholding tax, become
subject to Taxes because of its failure to deliver a form required hereunder,
the Borrower shall take such steps as such Bank shall reasonably request to
assist such Bank to recover such Taxes.
(f) If the Borrower is required to pay additional amounts to or for
the account of any Bank pursuant to this Section 8.04, then such Bank will
change the jurisdiction of its Applicable Lending Office so as to eliminate or
reduce any such additional payment which may thereafter accrue if such change,
in the judgment of such Bank, is not otherwise disadvantageous to such Bank.
SECTION 8.05. Base Rate Loans Substituted for Affected Fixed Rate
---------------------------------------------------
Loans. If (i) the obligation of any Bank to make or maintain, or convert
-----
outstanding Loans to, Euro-Dollar Loans has been suspended pursuant to Section
8.02 or (ii) any Bank has demanded compensation under Section 8.03 or 8.04
with respect to its Euro-Dollar Loans and
-76-
the Borrower shall, by at least five Euro-Dollar Business Days' prior notice to
such Bank through the Agent, have elected that the provisions of this Section
shall apply to such Bank, then, unless and until such Bank notifies the Borrower
that the circumstances giving rise to such suspension or demand for
compensation no longer exist:
(a) all Loans which would otherwise be made by such Bank as (or
continued as or converted into) Euro-Dollar Loans shall be Base Rate Loans (on
which interest and principal shall be payable contemporaneously with the related
Fixed Rate Loans of the other Banks), and
(b) after each of its Euro-Dollar Loans has been repaid (or converted
into a Base Rate Loan), all payments of principal which would otherwise be
applied to repay such Fixed Rate Loans shall be applied to repay its Base Rate
Loans instead.
If such Bank notifies the Borrower that the circumstances giving rise
to such notice no longer apply, the principal amount of each such Base Rate Loan
shall be converted into a Euro-Dollar Loan on the first day of the next
succeeding Interest Period applicable to the related Euro-Dollar Loans of the
other Banks.
ARTICLE IX
MISCELLANEOUS
SECTION 9.01. Notices. All notices, requests and other
-------
communications to any party hereunder shall be in writing (including bank wire,
telex, facsimile transmission or similar writing) and shall be given to such
party: (x) in the case of the Borrower or the Agent, at its address or telex
number set forth on the signature pages hereof, (y) in the case of any Bank, at
its address or telex number set forth in its Administrative Questionnaire or (z)
in the case of any party, such other address or telex number as such party may
hereafter specify for the purpose by notice to the Agent and the Borrower. Each
such notice, request or other communication shall be effective (i) if given by
telex, when such telex is transmitted to the telex number specified in this
Section and the appropriate answer back is received, (ii) if given by mail, 72
hours after such communication is deposited in the mails with first class
postage prepaid, addressed as aforesaid or (iii) if given by any other means,
when delivered at the address specified in this Section; provided that notices
to the Agent under Article II or Article VIII shall not be effective until
received.
-77-
SECTION 9.02. No Waivers. No failure or delay by the Agent or any
----------
Bank in exercising any right or remedy hereunder or under any Note, and no
course of dealing with respect thereto, shall operate as a waiver thereof nor
shall any single or partial exercise of any right or remedy hereunder or under
any Note or under any other Loan Document preclude any other or further exercise
thereof or the exercise of any other right or remedy. The rights and remedies
provided herein, under any Note or in any other Loan Document are cumulative and
may be exercised independently or concurrently and are not exclusive of any
other rights or remedies provided by law.
SECTION 9.03. Expenses; Indemnification.
-------------------------
(a) The Borrower shall pay (i) all out-of-pocket expenses of the
Agent, including reasonable fees and disbursements of special counsel and local
counsel for the Agent, in connection with the preparation and administration of
this Agreement and each other Loan Document, any waiver or consent hereunder or
thereunder or any amendment hereof or thereof or any Default or alleged Default
hereunder, (ii) all appraisal fees, recording and filing fees, taxes, brokerage
fees and commissions, abstract fees, title insurance premiums and fees, Uniform
Commercial Code and other search fees, escrow fees, environmental report fees,
engineering report fees, and all other costs and expenses of every character
incurred in connection with the preparation, execution, delivery, filing,
recordation or performance of any Loan Document and (iii) if an Event of Default
occurs, all out-of-pocket expenses incurred by the Agent and each Bank,
including fees and disbursements of counsel, in connection with such Event of
Default, and collection, bankruptcy, insolvency and other enforcement
proceedings resulting therefrom.
(b) The Borrower agrees to indemnify the Agent and each Bank, their
respective affiliates and the respective directors, officers, agents and
employees of the foregoing (each an "Indemnitee") and hold each Indemnitee
----------
harmless from and against any and all liabilities, losses, damages, costs and
expenses of any kind, including, without limitation, the reasonable fees and
disbursements of counsel, which may be incurred by such Indemnitee in connection
with any investigative, administrative or judicial proceeding (whether or not
such Indemnitee shall be designated a party thereto) brought or threatened
relating to or arising out of (i) this Agreement or any Loan Document or any
actual or proposed use of proceeds of Loans hereunder, (ii) any violation by the
Borrower or any Subsidiary of any applicable Environmental Law or other law,
(iii) any Environmental Claim or other claim arising out of the management,
use, control, ownership or operation of property or assets by the
-78-
Borrower or any Subsidiary, including, without limitation, all on-site and off-
site activities involving Hazardous Substances, (iv) the breach of any
representation, warranty or covenant set forth herein or in any Loan Document,
(v) the grant to the Agent of any Lien on any property or assets of the Borrower
or any Subsidiary, or (vi) the exercise by the Agent and the Banks of their
rights and remedies (including, without limitation, foreclosure) under any
agreement creating any such Lien, provided that no Indemnitee shall have the
--------
right to be indemnified hereunder for such Indemnitee's own gross negligence or
willful misconduct as determined by a court of competent jurisdiction.
SECTION 9.04. Sharing of Set-Offs. Each Bank agrees that if it shall,
-------------------
by exercising any right of set-off or counterclaim or otherwise, receive payment
of a proportion of the aggregate amount of principal and interest due with
respect to any Note held by it which is greater than the proportion received by
any other Bank in respect of the aggregate amount of principal and interest due
with respect to any Note held by such other Bank, the Bank receiving such
proportionately greater payment shall purchase such participations in the Notes
held by the other Banks, and such other adjustments shall be made, as may be
required so that all such payments of principal and interest with respect to the
Notes held by the Banks shall be shared by the Banks pro rata; provided that
--------
nothing in this Section shall impair the right of any Bank to exercise any right
of set-off or counterclaim it may have and to apply the amount subject to such
exercise to the payment of indebtedness of the Borrower other than its
indebtedness under the Notes. The Borrower agrees, to the fullest extent it may
effectively do so under applicable law, that any holder of a participation in a
Note, whether or not acquired pursuant to the foregoing arrangements, may
exercise rights of set-off or counterclaim and other rights with respect to such
participation as fully as if such holder of a participation were a direct
creditor of the Borrower in the amount of such participation. If any Rejecting
Bank shall be repaid pursuant to Section 2.01(c), then, from and after the
Conversion Date, the provisions of this Section 9.04 shall not apply as to such
Rejecting Bank.
SECTION 9.05. Amendments and Waivers. Except as expressly provided
----------------------
in any other Loan Document, any provision of this Agreement or the Notes or any
other Loan Document may be amended or waived if, but only if, such amendment or
waiver is in writing and is signed by the Borrower and the Required Banks (or by
the Agent after receiving approval therefor from the Required Banks) (and, if
the rights or duties of the Agent are affected thereby, by the Agent); provided
that no such amendment or waiver shall, unless signed by all the Banks, (i)
increase or decrease the Com-
-79-
mitment of any Bank (except for a ratable decrease in the Commitments of all
Banks) or subject any Bank to any additional obligation (other than any Bank
signing such amendment or waiver), (ii) reduce the principal of or rate of
interest on any Loan or any fees hereunder, except as provided below, (iii)
postpone the date fixed for any payment of principal of or interest on any Loan
or any fees hereunder or for any reduction or termination of any Commitment,
(iv) change the aggregate amount by which or to which the Commitments are
required to be reduced on or prior to any Commitment Reduction Date, or (v)
change the percentage of the Commitments or of the aggregate unpaid principal
amount of the Notes, or the number of Banks, which shall be required for the
Banks or any of them to take any action under this Section or any other
provision of this Agreement. In addition, no such amendment or waiver shall,
unless signed by the Swing Lender and each other Bank affected thereby, increase
the Swing Loan Commitment, postpone the date fixed for the termination of the
Swing Loan Commitment or otherwise affect any of its rights or obligations
hereunder relating to the Swing Loan Commitment or the Swing Loans.
Notwithstanding the foregoing, no amendment, waiver or consent shall, unless in
writing and signed by the Designating Lender on behalf of its Designated Lender
affected thereby, (a) subject such Designated Lender to any additional
obligations, (b) reduce the principal of, interest on, or other amounts due with
respect to, the Designated Lender Note made payable to such Designated Lender,
or (c) postpone any date fixed for any payment of principal of, or interest on,
or other amounts due with respect to the Designated Lender Note made payable to
the Designated Lender.
SECTION 9.06. Successors and Assigns.
----------------------
(a) The provisions of this Agreement shall be binding upon and inure
to the benefit of the parties hereto and their respective successors and
assigns, except that the Borrower may not assign or otherwise transfer any of
its rights under this Agreement without the prior written consent of all
Banks.
(b) Any Bank may at any time grant to one or more banks or other
institutions (each a "Participant") participating interests in its Commitment
-----------
on any or all of its Loans. In the event of any such grant by a Bank of a
participating interest to a Participant, whether or not upon notice to the
Borrower and the Agent, such Bank shall remain responsible for the performance
of its obligations hereunder, and the Borrower and the Agent shall continue to
deal solely and directly with such Bank in connection with such Bank's rights
and obligations under this Agreement. Any agreement pursuant to which any Bank
may grant such a participating interest shall provide that such Bank shall
-80-
retain the sole right and responsibility to enforce the obligations of the
Borrower hereunder including, without limitation, the right to approve any
amendment, modification or waiver of any provision of this Agreement; provided
--------
that such participation agreement may provide that such Bank will not agree to
any modification, amendment or waiver of this Agreement described in clause (i),
(ii), (iii), (iv) or (vi) of Section 9.05 without the consent of the
Participant. The Borrower agrees that each Participant shall, to the extent
provided in its participation agreement, be entitled to the benefits of Article
VIII with respect to its participating interest. An assignment or other transfer
which is not permitted by subsection (c) or (d) below shall be given effect for
purposes of this Agreement only to the extent of a participating interest
granted in accordance with this subsection (b).
(c) Any Bank may at any time assign to one or more banks or other
institutions (each an "Assignee") all, or a proportionate part of all, of its
--------
rights and obligations under this Agreement and the Notes and the other Loan
Documents, and such Assignee shall assume such rights and obligations, pursuant
to a Transfer Supplement in substantially the form of Exhibit D hereto executed
---------
by such Assignee and such transferor Bank, with (and subject to) the subscribed
consent of the Agent and, unless an Event of Default shall have occurred and be
continuing, the Borrower, which in each case shall not be unreasonably withheld
(the withholding of such consent shall not be deemed unreasonable if such
Assignee is not an Eligible Assignee); provided that if an Assignee is an
--------
affiliate of such transferor Bank, no such consent shall be required; and
provided further that if the Assignee is not an Affiliate of the transferor Bank
-------- -------
and not a Bank, the amount of the Commitment being assigned shall not be less
than the lesser of (i) the entire Commitment of the transferor Bank or (ii)
$10,000,000. Upon execution and delivery of such instrument and payment by such
Assignee to such transferor Bank of an amount equal to the purchase price agreed
between such transferor Bank and such Assignee, such Assignee shall be a Bank
party to this Agreement and shall have all the rights and obligations of a Bank
with a Commitment as set forth in such instrument of assumption, and the
transferor Bank shall be released from its obligations hereunder to a
corresponding extent, and no further consent or action by any party shall be
required. Upon the consummation of any assignment pursuant to this subsection
(c), the transferor Bank, the Agent and the Borrower shall make appropriate
arrangements so that, if required, a new Note is issued to the Assignee. In
connection with any such assignment, the transferor Bank shall pay to the Agent
an administrative fee for processing such assignment in the amount of $2,500. If
the Assignee is not incorporated under the laws of the United States of America
or a state thereof,
-81-
it shall deliver to the Borrower and the Agent certification as to exemption
from deduction or withholding of any United States federal income taxes in
accordance with Section 8.04.
(d) Any Bank (each, a "Designating Lender") may at any time designate
------------------
one Designated Lender to fund Money Market Loans on behalf of such Designating
Lender subject to the terms of this Section 9.06(d) and the provisions in
Section 9.06(b) and (c) shall not apply to such designation. No Bank may
designate more than one (1) Designated Lender. The parties to each such
designation shall execute and deliver to the Agent for its acceptance a
Designation Agreement. Upon such receipt of an appropriately completed
Designation Agreement executed by a Designating Lender and a designee
representing that it is a Designated Lender, the Agent will accept such
Designation Agreement and will give prompt notice thereof to the Borrower,
whereupon, (i) the Borrower shall execute and deliver to the Designating Bank a
Designated Lender Note payable to the order of the Designated Lender, (ii) from
and after the effective date specified in the Designation Agreement, the
Designated Lender shall become a party to this Agreement with a right (subject
to the provisions of Section 2.03(b)) to make Money Market Loans on behalf of
its Designating Lender pursuant to Section 2.03 after the Borrower has accepted
a Money Market Loan (or portion thereof) of the Designating Lender, and (iii)
the Designated Lender shall not be required to make payments with respect to any
obligations in this Agreement except to the extent of excess cash flow of such
Designated Lender which is not otherwise required to repay obligations of such
Designated Lender which are then due and payable; provided, however, that
regardless of such designation and assumption by the Designated Lender, the
Designating Lender shall be and remain obligated to the Borrower, Agent and the
Banks for each and every obligation of the Designating Lender and its related
Designated Lender with respect to this Agreement, including, without limitation,
any indemnification obligations under Section 7.06 hereof and any sums otherwise
payable to the Borrower by the Designated Lender. Each Designating Lender shall
serve as the administrative agent of the Designated Lender and shall on behalf
of, and to the exclusion of, the Designated Lender: (i) receive any and all
payments made for the benefit of the Designated Lender and (ii) give and receive
all communications and notices and take all actions hereunder, including,
without limitation, votes, approvals, waivers, consents and amendments under or
relating to this Agreement and the other Loan Documents. Any such notice,
communication, vote, approval, waiver, consent or amendment shall be signed by
the Designating Lender as administrative agent for the Designated Lender and
shall not be signed by the Designated Lender on its own behalf and shall be
binding upon the Designated Lender to the same extent as if signed by the
-82-
Designated Lender on its own behalf. The Borrower, the Agent and the Banks may
rely thereon without any requirement that the Designated Lender sign or
acknowledge the same. No Designated Lender may assign or transfer all or any
portion of its interest hereunder or under any other Loan Document, other than
assignments to the Designating Lender which originally designated such
Designated Lender or otherwise in accordance with the provisions of Section
9.06(b) and (c).
(d) Any Bank may at any time assign all or any portion of its rights
under this Agreement and its Note to a Federal Reserve Bank. No such assignment
shall release the transferor Bank from its obligations hereunder.
(e) No Assignee, Participant or other transferee of any Bank's rights
shall be entitled to receive any greater payment under Section 8.03 or 8.04
than such Bank would have been entitled to receive with respect to the rights
transferred, unless such transfer is made with the Borrower's prior written
consent (provided no Event of Default shall have occurred and be continuing) or
by reason of the provisions of Section 8.02, 8.03 or 8.04 requiring such Bank to
designate a different Applicable Lending Office under certain circumstances or
at a time when the circumstances giving rise to such greater payment did not
exist.
SECTION 9.07. Collateral. Each of the Banks represents to the Agent
----------
and each of the other Banks that it in good faith is not relying upon any
"margin stock" (as defined in Regulation U) of the Borrower or any Subsidiary
Guarantor or Affiliate as collateral in the extension or maintenance of the
credit provided for in this Agreement.
SECTION 9.08. Governing Law; Submission to Jurisdiction. This
-----------------------------------------
Agreement and each Loan Document, including, without limitation, each Note,
shall be governed by and construed in accordance with the laws of the State of
New York. The Borrower hereby submits to the nonexclusive jurisdiction of the
United States District Court for the Southern District of New York and of any
New York State court sitting in New York City for purposes of all legal
proceedings arising out of or relating to this Agreement or the transactions
contemplated hereby. The Borrower irrevocably waives, to the fullest extent
permitted by law, any objection which it may now or hereafter have to the laying
of the venue of any such proceeding brought in such a court and any claim that
any such proceeding brought in such a court has been brought in an inconvenient
forum.
SECTION 9.09. Counterparts; Integration; Effectiveness. This
-----------------------------------------
Agreement may be signed in any number of counterparts, each of which shall be an
original, with the same effect as if the signatures thereto and hereto were
-83-
upon the same instrument. This Agreement constitutes the entire agreement and
understanding among the parties hereto and supersedes any and all prior
agreements and understandings, oral or written, relating to the subject matter
hereof. This Agreement shall become effective upon receipt by the Agent of
counterparts hereof signed by each of the parties hereto (or, in the case of any
party as to which an executed counterpart shall not have been received, receipt
by the Agent in form satisfactory to it of telegraphic, telex or other written
confirmation from such party of execution of a counterpart hereof by such
party).
SECTION 9.10. WAIVER OF JURY TRIAL. EACH OF THE BORROWER, THE AGENT
--------------------
AND THE BANKS HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN
ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE
TRANSACTIONS CONTEMPLATED HEREBY.
SECTION 9.11. Survival. All indemnities set forth herein shall
--------
survive the execution and delivery of this Agreement and the other Loan
Documents and the making and repayment of the Loans and the termination of the
Commitments hereunder.
SECTION 9.12. Domicile of Loans. Each Bank may transfer and carry
-----------------
its Loans at, to or for the account of any domestic or foreign branch office,
subsidiary or affiliate of such Bank.
SECTION 9.13. Limitation of Liability. No claim may be made by the
-----------------------
Borrower or any other Person acting by or through Borrower against the Agent or
any Bank or the affiliates, directors, officers, employees, attorneys or agent
of any of them for any consequential or punitive damages in respect of any claim
for breach of contract or any other theory of liability arising out of or
related to the transactions contemplated by this Agreement or by the other Loan
Documents, or any act, omission or event occurring in connection therewith; and
the Borrower hereby waives, releases and agrees not to xxx upon any claim for
any such damages, whether or not accrued and whether or not known or suspected
to exist in its favor.
SECTION 9.14. Recourse Obligation. This Agreement and the Obligations
-------------------
hereunder are fully recourse to the Borrower. Notwithstanding the foregoing, no
recourse under or upon any obligation, covenant, or agreement contained in this
Agreement shall be had against any officer, director, shareholder or employee of
the Borrower except in the event of fraud or misappropriation of funds on the
part of such officer, director, shareholder or employee.
-84-
SECTION 9.15. Further Assurances. At any time or from time to time
------------------
upon the request of the Agent, the Borrower will, at its expense, promptly
execute, acknowledge, and deliver such further documents and do such other acts
and things as shall be necessary or advisable, in the Agent's discretion, in
order to effect fully the purposes of this Agreement or any of the other Loan
Documents. The Borrower will pay all fees and expenses (including reasonable
attorneys fees) incurred by the Agent in connection therewith.
SECTION 9.16. Confidentiality; Disclosure of Information. Each party
------------------------------------------
hereto shall treat the transactions contemplated hereby and all financial and
other information furnished to it about the Banks, the Borrower, any Subsidiary
or any of the Real Property Assets, as applicable, as confidential; provided,
however, that such confidential information may be disclosed (a) as required by
law or pursuant to generally accepted accounting procedures, (b) to officers,
directors, employees, agents, partners, attorneys, accountants, engineers and
other consultants of the parties hereto who need to know such information,
provided such Persons are instructed to treat such information confidentially,
or (c) by any Bank to any Participant or Assignee or any prospective transferee
(provided such prospective transferee agrees to treat such information
confidentially), which disclosure to prospective transferees may include any and
all information which has been delivered to such Bank by the Borrower pursuant
to this Agreement or the other Loan Documents or which has been delivered to
such Bank in connection with such Bank's credit evaluation of the Borrower prior
to entering into this Agreement. Notwithstanding the foregoing, this Section
9.16 shall not apply to any Bank so long as any Event of Default hereunder or
under any other Loan Documents shall have occurred and be continuing and, in any
such event, such Bank shall be entitled to disclose any information furnished to
it in connection with this Agreement as it deems necessary or appropriate in its
sole and absolute discretion. Notwithstanding the foregoing, the Borrower hereby
consents to the disclosure of any non-public information with respect to it
which is related to this transaction by any Designated Lender to any rating
agency, commercial paper dealer, or provider of a surety, guaranty or credit or
liquidity enhancement to such Designated Lender, provided, however, that prior
to any such disclosure such Designated Lender shall obtain an agreement from the
applicable Person pursuant to which it shall agree to be bound by
confidentiality provisions similar to those set forth herein.
SECTION 9.17. No Bankruptcy Proceedings. Each of the Borrower, the
-------------------------
Banks, and the Agent hereby agrees that it will not institute against any
Designated Lender or join any other Person in instituting against any Designated
Lender
-85-
any bankruptcy, reorganization, arrangement, insolvency or liquidation
proceeding under any federal or state bankruptcy or similar law, until the later
to occur of (i) one year and one day after the payment in full of the latest
maturing commercial paper note issued by such Designated Lender and (ii) the
Revolver Termination Date.
-86-
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed by their respective authorized officers as of the day and year
first above written.
BORROWER:
SECURITY CAPITAL ATLANTIC
INCORPORATED
By: _________________________
Name:
Title:
0000 Xxxxxx Xxxxxx Xxxxxx
Xx Xxxx, Xxxxx 00000
Attention: Xxxx Xxxxxxxxxx
Fax number: (000) 000-0000
Commitments BANKS:
-----------
$40,000,000 XXXXXX GUARANTY TRUST COMPANY
OF NEW YORK
By: _________________________
Name:
Title:
$35,000,000 THE FIRST NATIONAL BANK OF
BOSTON
By: _________________________
Name:
Title:
$35,000,000 TEXAS COMMERCE BANK NATIONAL
ASSOCIATION
By: _________________________
Name:
Title:
-87-
$40,000,000 XXXXX FARGO BANK, NATIONAL
ASSOCIATION
By: ____________________
Name:
Title:
$35,000,000 BANK OF AMERICA NATIONAL TRUST &
SAVINGS ASSOCIATION
By: _________________________
Name:
Title:
$40,000,000 FIRST UNION NATIONAL BANK
By: _________________________
Name:
Title:
-88-
$25,000,000 DRESDNER BANK AG NEW YORK AND
GRAND CAYMAN BRANCHES
By: _________________________
Name:
Title:
By: _________________________
Name:
Title:
$20,000,000 DG BANK DEUTSCHE GENOSSENSCHAFTSBANK
By: _________________________
Name:
Title:
By: _________________________
Name:
Title:
$12,000,000 CORESTATES BANK, N.A.
By: _________________________
Name:
Title:
-89-
$35,000,000 COMMERZBANK AKTIENGESELLSCHAFT,
LOS ANGELES BRANCH
By: _________________________
Name:
Title:
By: _________________________
Name:
Title:
$20,000,000 WACHOVIA BANK,N.A.
By: ___________________
Name:
Title:
Total Commitments
-----------------
$350,000,000
-90-
AGENT:
XXXXXX GUARANTY TRUST COMPANY
OF NEW YORK, as Agent
By:_____________________________
Name: Xxxxxxx X. X'Xxxxxxx
Title: Vice President
00 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Attention: Xxxxxxx X. Xxxxxxx
Fax Number: (000) 000-0000
Domestic Lending Office:
X.X. Xxxxxx Services Inc.
000 Xxxxxxx-Xxxxxxxxxx Xxxx
Xxxxxx, Xxxxxxxx 00000
Attention: Xxxxxxx Xxxxxxx
Fax Number: (000) 000-0000
Euro-Currency Lending Office:
Nassau, Bahamas Office
c/o X.X. Xxxxxx Services Inc.
Euro-Loan Servicing Xxxx
000 Xxxxxxx-Xxxxxxxxxx Xxxx
Xxxxxx, Xxxxxxxx 00000
Attention: Xxxxxxx Xxxxxxx
Fax Number: (000) 000-0000
-00-
XXXXXXX X-0
-----------
NOTE
New York, New York
as of ______, 199_
For value received, SECURITY CAPITAL ATLANTIC INCORPORATED, a Maryland
corporation (the "Borrower"), promises to pay to the order of _________________
---------
(the "Bank"), for the account of its Applicable Lending Office, the unpaid
----
principal amount of each Loan made by the Bank to the Borrower pursuant to the
Credit Agreement referred to below on the maturity date provided for in the
Credit Agreement. The Borrower promises to pay interest on the unpaid principal
amount of each such Loan on the dates and at the rate or rates provided for in
the Credit Agreement. All such payments of principal and interest shall be made
in lawful money of the United States in Federal or other immediately available
funds at the office of Xxxxxx Guaranty Trust Company of New York, 00 Xxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx.
All Loans made by the Bank, the respective types and maturities thereof and
all repayments of the principal thereof shall be recorded by the Bank and, if
the Bank so elects in connection with any transfer or enforcement hereof,
appropriate notations to evidence the foregoing information with respect to each
such Loan then outstanding may be endorsed by the Bank on the schedule attached
hereto, or on a continuation of such schedule attached to and made a part
hereof; provided that the failure of the Bank to make any such recordation or
--------
endorsement shall not affect the obligations of the Borrower hereunder or under
the Credit Agreement.
This note is one of the Notes referred to in the Revolving Credit
Agreement, dated as of ________, 1997, among the Borrower, the banks listed on
the signature pages thereof and Xxxxxx Guaranty Trust Company of New York, as
Agent (as the same may be amended from time to time, the "Credit Agreement").
----------------
Terms defined in the Credit Agreement are used herein with the same meanings.
A-1
Reference is made to the Credit Agreement for provisions for the prepayment
hereof and the acceleration of the maturity hereof.
SECURITY CAPITAL ATLANTIC
INCORPORATED
By: _____________________
Name:
Title:
A-2
Note (cont'd)
LOANS AND PAYMENTS OF PRINCIPAL
________________________________________________________________________________
Amount of
Amount of Type of Principal Maturity Notation
Date Loan Loan Repaid Date Made By
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
X-0
XXXXXXX X-0
-----------
XXXX
Xxx Xxxx, Xxx Xxxx
as of ______, 199_
For value received, SECURITY CAPITAL ATLANTIC INCORPORATED, a Maryland
corporation (the "Borrower"), promises to pay to the order of _________________
--------
(the "Bank"), for the account of its Applicable Lending Office, the unpaid
----
principal amount of each Loan made by the Bank to the Borrower pursuant to the
Credit Agreement referred to below on the maturity date provided for in the
Credit Agreement. The Borrower promises to pay interest on the unpaid principal
amount of each such Loan on the dates and at the rate or rates provided for in
the Credit Agreement. All such payments of principal and interest shall be made
in lawful money of the United States in Federal or other immediately available
funds at the office of Xxxxxx Guaranty Trust Company of New York, 00 Xxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx.
All Loans made by the Bank, the respective types and maturities thereof and
all repayments of the principal thereof shall be recorded by the Bank and, if
the Bank so elects in connection with any transfer or enforcement hereof,
appropriate notations to evidence the foregoing information with respect to
each such Loan then outstanding may be endorsed by the Bank on the schedule
attached hereto, or on a continuation of such schedule attached to and made a
part hereof; provided that the failure of the Bank to make any such recordation
--------
or endorsement shall not affect the obligations of the Borrower hereunder or
under the Credit Agreement.
This note is one of the Notes referred to in the Revolving Credit
Agreement, dated as of _________, 1997, among the Borrower, the banks listed on
the signature pages thereof and Xxxxxx Guaranty Trust Company of New York, as
Agent (as the same may be amended from time to time, the "Credit Agreement").
----------------
Terms defined in the Credit Agreement are used herein with the same meanings.
Reference is made to the Credit Agreement for provisions for the prepayment
hereof and the acceleration of the maturity hereof.
SECURITY CAPITAL ATLANTIC
INCORPORATED
By: ___________________
Name:
A2-1
Title:
Note (cont'd)
LOANS AND PAYMENTS OF PRINCIPAL
________________________________________________________________________________
Amount of
Amount of Type of Principal Maturity Notation
Date Loan Loan Repaid Date Made By
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
X0-0
XXXXXXX X-0
-----------
XXXX
Xxx Xxxx, Xxx Xxxx
as of ______, 199_
For value received, SECURITY CAPITAL ATLANTIC INCORPORATED, a Maryland
corporation (the "Borrower"), promises to pay to the order of _________________
--------
(the "Bank"), for the account of its Applicable Lending Office, the unpaid
----
principal amount of each Loan made by the Bank to the Borrower pursuant to the
Credit Agreement referred to below on the maturity date provided for in the
Credit Agreement. The Borrower promises to pay interest on the unpaid principal
amount of each such Loan on the dates and at the rate or rates provided for in
the Credit Agreement. All such payments of principal and interest shall be made
in lawful money of the United States in Federal or other immediately available
funds at the office of Xxxxxx Guaranty Trust Company of New York, 00 Xxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx.
All Loans made by the Bank, the respective types and maturities thereof
and all repayments of the principal thereof shall be recorded by the Bank and,
if the Bank so elects in connection with any transfer or enforcement hereof,
appropriate notations to evidence the foregoing information with respect to each
such Loan then outstanding may be endorsed by the Bank on the schedule attached
hereto, or on a continuation of such schedule attached to and made a part
hereof; provided that the failure of the Bank to make any such recordation or
--------
endorsement shall not affect the obligations of the Borrower hereunder or under
the Credit Agreement.
This note is one of the Designated Lender Notes referred to in the
Revolving Credit Agreement, dated as of _________, 1997, among the Borrower, the
banks listed on the signature pages thereof and Xxxxxx Guaranty Trust Company of
New York, as Agent (as the same may be amended from time to time, the "Credit
------
Agreement"). Terms defined in the Credit Agreement are used herein with the
---------
same meanings. Reference is made to the Credit Agreement for provisions for
the prepayment hereof and the acceleration of the maturity hereof.
SECURITY CAPITAL ATLANTIC
INCORPORATED
By: ___________________
Name:
Title:
A3-1
Note (cont'd)
LOANS AND PAYMENTS OF PRINCIPAL
________________________________________________________________________________
Amount of
Amount of Type of Principal Maturity Notation
Date Loan Loan Repaid Date Made By
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
A3-2
EXHIBIT B
---------
UNENCUMBERED ASSET POOL
B-1
EXHIBIT C
---------
CONSTRUCTION ASSETS
C-1
EXHIBIT D
---------
TRANSFER SUPPLEMENT
-------------------
TRANSFER SUPPLEMENT (this "Transfer Supplement") dated as of ______,
199_ between _______________ (the "Assignor") and _________________ having an
address at _______________(the "Purchasing Bank").
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, the Assignor has made loans to Security Capital Atlantic
Incorporated, a Maryland corporation (the "Borrower"), pursuant to the First
Amended and Restated Revolving Credit Agreement, dated as of _________, 1997 (as
the same may be amended, supplemented or otherwise modified through the date
hereof, the "Credit Agreement"), among the Borrower, the banks party thereto,
and Xxxxxx Guaranty Trust Company of New York, as Agent. All capitalized terms
used and not otherwise defined herein shall have the respective meanings set
forth in the Credit Agreement;
WHEREAS, the Purchasing Bank desires to purchase and assume from
the Assignor, and the Assignor desires to sell and assign to the Purchasing
Bank, certain rights, title, interest and obligations under the Credit
Agreement;
NOW, THEREFORE, IT IS AGREED:
1. In consideration of the amount set forth in the receipt (the
"Receipt") given by Assignor to Purchasing Bank of even date herewith, and
transferred by wire to Assignor, the Assignor hereby assigns and sells, without
recourse, representation or warranty except as specifically set forth herein, to
the Purchasing Bank, and the Purchasing Bank hereby purchases and assumes from
the Assignor, a __% interest (the "Purchased Interest") of the Loans
constituting a portion of the Assignor's rights and obligations under the Credit
Agreement as of the Effective Date (as defined below) including, without
limitation, such percentage interest of the Assignor in any Loans owing to the
Assignor, any Note held by the Assignor, any Loan Commitment of the Assignor and
any other interest of the Assignor under any of the Loan Documents.
2. The Assignor (i) represents and warrants that as of the date
hereof the aggregate outstanding principal amount of its share of the Loans
owing to it (without giving effect to assignments thereof which have not yet
become effective) is $__________; (ii) represents and warrants that it is the
legal
D-1
and beneficial owner of the interests being assigned by it hereunder and that
such interests are free and clear of any adverse claim; (iii) represents and
warrants that it has not received any notice of Default or Event of Default from
the Borrower; (iv) makes no representation or warranty and assumes no
responsibility with respect to any statements, warranties or representations (or
the truthfulness or accuracy thereof) made in or in connection with the Credit
Agreement, or the other Loan Documents or the execution, legality, validity,
enforceability, genuineness, sufficiency or value of the Credit Agreement, or
the other Loan Documents or any other instrument or document furnished pursuant
thereto; and (v) makes no representation or warranty and assumes no
responsibility with respect to the financial condition of the Borrower or any
Subsidiary of Guarantor or the performance or observance by the Borrower or any
Subsidiary of Guarantor of any of its obligations under the Credit Agreement or
the other Loan Documents or any other in strument or document furnished pursuant
thereto. Except as specifically set forth in this Paragraph 2, this assignment
shall be without recourse to Assignor.
3. The Purchasing Bank (i) confirms that it has received a copy of
the Credit Agreement, and the other Loan Documents, together with such financial
statements and such other documents and information as it has deemed appropriate
to make its own credit analysis and decision to enter into this Transfer Supple
ment and to become a party to the Credit Agreement, and has not relied on any
statements made by Assignor or Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP; (ii)
agrees that it will, independently and without reliance upon any of the Agent,
the Assignor or any other Bank and based on such documents and information as it
shall deem appropriate at the time, continue to make its own appraisal of and
investigation into the business, operations, property, prospects, financial and
other conditions and credit worthiness of the Borrower and will make its own
credit analysis, appraisals and decisions in taking or not taking action under
the Credit Agreement, and the other Loan Documents; (iii) appoints and
authorizes the Agent to take such action as agent on its behalf and to exercise
such powers under the Credit Agreement, and the other Loan Documents as are
delegated to the Agent by the terms thereof, together with such powers as are
incidental thereto; (iv) agrees that it will be bound by and perform in
accordance with their terms all of the obligations which by the terms of the
Credit Agreement are required to be performed by it as a Bank; (v) specifies as
its address for notices and lending office, the office set forth beneath its
name on the signature page hereof; (vi) it has full power and authority to
execute and deliver, and perform under, this Transfer Supplement, and all
necessary corporate and/or partnership action has taken to authorize, and all
approvals and consents have been obtained for, the execution, delivery and
performance thereof; (vii) this Transfer Supplement constitutes its legal, valid
and binding
D-2
obligation enforceable in accordance with its terms; and (viii) the interest
being assigned hereunder is being acquired by it for its own account, for
investment purposes only and not with a view to the public distribution thereof
and without any present intention of its resale in either case that would be in
violation of applicable securities laws.
4. This Transfer Supplement shall be effective on the date (the
"Effective Date") on which all of the following have occurred (i) it shall have
--------------
been executed and delivered by the parties hereto, (ii) copies hereof shall have
been delivered to the Agent and the Borrower, and (iii) the Purchasing Bank
shall have paid to the Assignor the agreed purchase price as set forth in the
Receipt.
5. On and after the Effective Date, (i) the Purchasing Bank shall be
a party to the Credit Agreement and, to the extent provided in this Transfer
Supplement, have the rights and obligations of a Bank thereunder and be entitled
to the benefits and rights of the Banks thereunder and (ii) the Assignor shall,
to the extent provided in this Transfer Supplement as to the Pur-chased
Interest, relinquish its rights and be released from its obligations under the
Credit Agreement.
6. From and after the Effective Date, the Assignor shall cause the
Agent to make all payments under the Credit Agreement, and the Notes in respect
of the Purchased Interest assigned hereby (including, without limitation, all
payments of principal, fees and interest with respect thereto and any amounts
accrued but not paid prior to such date) to the Purchasing Bank.
7. This Transfer Supplement may be executed in any number of
counterparts which, when taken together, shall be deemed to constitute one and
the same instrument.
8. Assignor hereby represents and warrants to Purchasing Bank that it
has made all payments demanded to date by Xxxxxx Guaranty Trust Company of New
York ("Xxxxxx") as Agent in connection with the Assignor's pro rata share of
------
the obligation to reimburse the Agent for its expenses. In the event Xxxxxx, as
Agent, shall demand reimbursement for fees and expenses from Purchasing Bank for
any period prior to the Effective Date, Assignor hereby agrees to promptly pay
Xxxxxx, as Agent, such sums directly, subject, however, to Paragraph 12 hereof.
9. Assignor will, at the cost of Assignor, and without expense to
Purchasing Bank, do, execute, acknowledge and deliver all and every such further
acts, deeds conveyances, assignments, notices of assignments, transfers and
assurances as Purchasing Bank shall, from time to time, reasonably require, for
the better assuring, conveying, assigning, transferring and confirming unto
Purchasing Bank the property and rights hereby given, granted,
D-3
bargained, sold, aliened, enfeoffed, conveyed, confirmed, assigned and/or
intended now or hereafter so to be, on which Assignor may be or may hereafter
become bound to convey or assign to Purchasing Bank, or for carrying out the
intention or facilitating the performance of the terms of this Agreement or for
filing, registering or recording this Agreement.
10. The parties agree that no broker or finder was instrumental in
bringing about this transaction. Each party shall indemnify, defend the other
and hold the other free and harmless from and against any damages, costs or
expenses (including, but not limited to, reasonable attorneys' fees and
disbursements) suffered by such party arising from claims by any broker or
finder that such broker or finder has dealt with said party in connection with
this transaction.
11. Subject to the provisions of Paragraph 12 hereof, if, with
respect to the Purchased Interest only, Assignor shall on or after the Effective
Date receive (a) any cash, note, securities, property, obligations or other
consideration in respect of or relating to the Loan or the Loan Documents or
issued in substitution or replacement of the Loan or the Loan Documents, (b) any
cash or non-cash consideration in any form whatsoever distributed, paid or
issued in any bankruptcy proceeding in connection with the Loan or the Loan
Documents or (c) any other distribution (whether by means of repayment,
redemption, realization of security or otherwise), Assignor shall accept the
same as Purchasing Bank's agent and hold the same in trust on behalf of and for
the benefit of Purchasing Bank, and shall deliver the same forthwith to
Purchasing Bank in the same form received, with the endorsement (without
recourse) of Assignor when necessary or appropriate. If the Assignor shall fail
to deliver any funds received by it within the same Business Day of receipt,
unless such funds are received by Assignor after 4:00 p.m., Eastern Standard
Time, then the following business day after receipt, said funds shall accrue
interest at the federal funds interest rate and in addition to promptly
remitting said amount, Assignor shall remit such interest from the date received
to the date such amount is remitted to the Purchasing Bank.
12. Assignor and Purchasing Bank each hereby agree to indemnify and
hold harmless the other, each of its directors and each of its officers in
connection with any claim or cause of action based on any matter or claim based
on the acts of either while acting as a Bank under the Credit Agreement.
Promptly after receipt by the indemnified party under this Section of notice of
the commencement of any action, such indemnified party shall notify the
indemnifying party in writing of the commencement thereof. If any such action
is brought against any indemnified party and that party notifies the
indemnifying party of the commencement thereof, the indemnifying party shall be
entitled to participate therein, and to the extent that it may elect by
D-4
written notice delivered to the indemnified party promptly after receiving the
aforesaid notice from such indemnified party, to assume the defense thereof,
with counsel satisfactory to such indemnified party, and after receipt of notice
from the indemnifying party to such indemnified party of its election so to
assume the defense thereof, the indemnifying party will not be liable to such
indemnified party under this Section for any legal or other expenses
subsequently incurred by such indemnified party in connection with the defense
thereof. In no event shall the indemnified party settle or consent to a
settlement of such cause of action or claim without the consent of the
indemnifying party.
D-5
13. THIS TRANSFER SUPPLEMENT AND THE RIGHTS AND OBLIGATIONS OF THE
PARTIES HEREUNDER SHALL BE CONSTRUED IN ACCORDANCE WITH AND BE GOVERNED BY THE
LAWS OF THE STATE OF NEW YORK.
Wire Transfer Instructions: __________________________
By:_______________________
Name:
Title:
___________________________
By: ______________________
Name:
Title:
Acknowledged this
____ day of ________, 199_:
XXXXXX GUARANTY TRUST COMPANY
OF NEW YORK, as Agent
By:__________________________
Name:
Title:
D-6
EXHIBIT E
Form of Money Market Quote Request
----------------------------------
[Date]
To: Xxxxxx Guaranty Trust Company of New York (the "Agent")
From: Security Capital Atlantic Incorporated
Re: First Amended and Restated Revolving Credit Agreement (the "Credit
Agreement"), dated as of __________, 1997 among Security Capital
Atlantic Incorporated, the Banks parties thereto and the Agent
We hereby give notice pursuant to Section 2.3 of the Credit Agreement
that we request Money Market Quotes for the following proposed Money Market
Borrowing(s):
Date of Borrowing: __________________
Principal Amount/*/ Interest Period/*/
---------------- ---------------
$
Such Money Market Quotes should offer a Money Market [Margin]
[Absolute Rate]. [The applicable base rate is the London Interbank Offered
Rate.]
The funding of Money Market Loans made in connection with this Money
Market Quote Request [may/may not] be made by Designated Lenders.
Terms used herein have the meanings assigned to them in the Credit
Agreement.
Security Capital Atlantic Incorporated
By:________________________
Name:
Title:
___________________
Amount must be $20,000,000 or a larger multiple of $1,000,000.
Not less than one month (LIBOR Auction) or not less than 30 days (Absolute
Rate Auction), subject to the provisions of the definition of Interest Period.
E-1
EXHIBIT F
Form of Invitation for Money Market Quotes
------------------------------------------
To: [Name of Bank]
Re: Invitation for Money Market Quotes to TriNet Corporate Realty Trust, Inc.
(the "Borrower")
Pursuant to Section 2.03 of the First Amended and Restat ed Revolving
Credit Agreement, dated as of _______, 1997 among Security Capital Atlantic
Incorporated, the Banks parties thereto and the undersigned, as Agent, we are
pleased on behalf of the Borrower to invite you to submit Money Market Quotes to
the Borrower for the following proposed Money Market Borrowing(s):
Date of Borrowing: __________________
Principal Amount Interest Period
---------------- ---------------
$
Such Money Market Quotes should offer a Money Market [Margin]
[Absolute Rate]. [The applicable base rate is the London Interbank Offered
Rate.]
Please respond to this invitation by no later than 10:00 A.M. (New
York City time) on [date].
XXXXXX GUARANTY TRUST COMPANY
OF NEW YORK, as Agent
By______________________
Authorized Officer
F-1
EXHIBIT G
Form of Money Market Quote
--------------------------
To: Xxxxxx Guaranty Trust Company of New York, as Agent
Re: Money Market Quote to Security Capital Atlantic Incorporated (the
"Borrower")
In response to your invitation on behalf of the Borrower dated
_____________, 19__, we hereby make the following Money Market Quote on the
following terms:
1. Quoting Bank: ________________________________
2. Person to contact at Quoting Bank:
_____________________________
3. Date of Borrowing: ____________________*
4. We hereby offer to make Money Market Loan(s) in the following principal
amounts, for the following Interest Periods and at the following rates:
Principal Interest Money Market
Amount** Period*** [Margin****] [Absolute Rate*****]
-------- --------- ---------------------------------
$
$
[Provided, that the aggregate principal amount of Money Market Loans for
which the above offers may be accepted shall not exceed $____________.]**
We understand and agree that the offer(s) set forth above,
subject to the satisfaction of the applicable conditions set forth in the
First Amended and Restated Revolving Credit Agreement dated as of ______,
1997 among Security Capital Atlantic Incorporated, the Banks parties
thereto and yourselves, as Agent, irrevocably obligates us to make the
Money Market Loan(s) for which any offer(s) are accepted, in whole or in
part.
Very truly yours,
[NAME OF BANK]
Dated:_________________________
Authorized Officer
G-1
EXHIBIT H
FORM OF DESIGNATION AGREEMENT
-----------------------------
Dated _____________, 199___
Reference is made to that certain First Amended and Restated Revolving
Credit Agreement dated as of ______, 1997 (as amended, supplemented or otherwise
modified from time to time, the "Credit Agreement") among SECURITY CAPITAL
ATLANTIC INCORPORATED, the banks parties thereto, and XXXXXX GUARANTY TRUST
COMPANY OF NEW YORK (the "Agent"), as Agent. Terms defined in the Credit
Agreement are used herein with the same meaning.
[NAME OF DESIGNOR] (the "Designor"), [NAME OF DESIGNEE] (the "Designee"),
the Agent and Borrower agree as follows:
1. The Designor hereby designates the Designee, and the Designee hereby
accepts such designation, to have a right to make Money Market Loans pursuant to
Article III of the Credit Agreement. Any assignment by Designor to Designee of
its rights to make a Money Market Loan pursuant to such Article III shall be
effective at the time of the funding of such Money Market Loan and not before
such time.
2. Except as set forth in Section 7 below, the Designor makes no
representation or warranty and assumes no responsibility pursuant to this
Designation Agreement with respect to (a) any statements, warranties or
representations made in or in connection with any Loan Document or the
execution, legality, validity, enforceability, genuineness, sufficiency or value
of any Loan Document or any other instrument and document furnished pursuant
thereto and (b) the financial condition of the Borrower or the performance or
observance by the Borrower of any of its obligations under any Loan Document or
any other instrument or document furnished pursuant thereto.
3. The Designee (a) confirms that it has received a copy of each Loan
Document, together with copies of the financial statements referred to in
Articles IV and V of the Credit Agreement and such other documents and
information as it has deemed appropriate to make its own credit analysis and
decision to enter into this Designation Agreement; (b) agrees that it will
independently and without reliance upon the Agent, the Designor 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
H-1
taking or not taking action under any Loan Document; (c) confirms that it is a
Designated Lender; (d) appoints and authorizes the Agent to take such action as
agent on its behalf and to exercise such powers and discretion under any Loan
Document as are delegated to the Agent by the terms thereof, together with such
powers and discretion as are reasonably incidental thereto; and (e) agrees to be
bound by each and every provision of each Loan Document and further agrees that
it will perform in accordance with their terms all of the obligations which by
the terms of any Loan Document are required to be performed by it as a Bank.
4. The Designee hereby appoints Designor as Designee's agent and attorney
in fact, and grants to Designor an irrevocable power of attorney, to receive
payments made for the benefit of Designee under the Credit Agreement, to deliver
and receive all communications and notices under the Credit Agreement and
other Loan Documents and to exercise on Designee's behalf all rights to vote
and to grant and make approvals, waivers, consents of amendments to or under the
Credit Agreement or other Loan Documents. Any document executed by the Designor
on the Designee's behalf in connection with the Credit Agreement or other Loan
Documents shall be binding on the Designee. The Borrower, the Agent and each of
the Banks may rely on and are beneficiaries of the preceding provisions.
5. Following the execution of this Designation Agreement by the Designor
and its Designee, it will be delivered to the Agent for acceptance and recording
by the Agent. The effective date for this Designation Agreement (the "Effective
Date") shall be the date of acceptance hereof by the Agent, unless otherwise
specified on the signature page thereto.
6. The Agent hereby agrees that it will not institute against any
Designated Lender or join any other Person in instituting against any Designated
Lender any bankruptcy, reorganization, arrangement, insolvency or liquidation
proceeding under any federal or state bankruptcy or similar law, until the later
to occur of (i) one year and one day after the payment in full of the latest
maturing commercial paper note issued by such Designated Lender and (ii) the
Maturity Date.
7. The Designor unconditionally agrees to pay or reimburse the Designee
and save the Designee harmless against all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
of any kind or nature whatsoever which may be imposed or asserted by any of the
parties to the Loan Documents against the Designee, in its capacity as such, in
any way relating to or arising out of this Agreement or
H-2
any other Loan Documents or any action taken or omitted by the Designee
hereunder or thereunder, provided that the Designor shall not be liable for any
--------
portion of such liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements if the same results from the
Designee's gross negligence or willful misconduct.
8. Upon such acceptance and recording by the Agent, as of the Effective
Date, the Designee shall be a party to the Credit Agreement with a right
(subject to the provisions of Section 2.03(b)) to make Money Market Loans as a
Bank pursuant to Section 2.03 of the Credit Agreement and the rights and
obligations of a Bank related thereto; provided, however, that the Designee
-------- -------
shall not be required to make payments with respect to such obligations except
to the extent of excess cash flow of such Designee which is not otherwise
required to repay obligations of such Designated Lender which are then due and
payable. Notwithstanding the foregoing, the Designor, as administrative agent
for the Designee, shall be and remain obligated to the Borrower, the Co-Agents
and the Banks for each and every of the obligations of the Designee and its
Designor with respect to the Credit Agreement, including, without limitation,
any indemnification obligations under Section 7.6 of the Credit Agreement and
any sums otherwise payable to the Borrower by the Designee.
9. This Designation Agreement shall be governed by, and construed in
accordance with, the laws of the State of New York.
10. This Designation Agreement may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each of
which when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement. Delivery of an executed
counterpart of a signature page to this Designation Agreement by facsimile
transmission shall be effective as delivery of a manually executed counter
part of this Designation Agreement.
H-3
IN WITNESS WHEREOF, the Designor and the Designee, intending to be legally
bound, have caused this Designation Agreement to be executed by their officers
thereunto duly authorized as of the date first above written.
Effective Date: ________________________,
199__
[NAME OF DESIGNOR], as
Designor
By:
Title:
[NAME OF DESIGNEE] as
Designee
By:
Title:
Applicable Lending Office
(and address for notices):
[ADDRESS]
Accepted this _____ day
of ________, 19__
XXXXXX GUARANTY TRUST COMPANY OF NEW YORK,
as Agent
By:
Title:
H-4
TABLE OF CONTENTS
-----------------
ARTICLE I
DEFINITIONS
-----------
SECTION 1.01. Definitions.................................................. 2
SECTION 1.02. Accounting Terms and Determinations.......................... 24
SECTION 1.03. Types of Borrowings.......................................... 25
ARTICLE II
THE CREDITS
-----------
SECTION 2.01. Commitments to Lend.......................................... 25
SECTION 2.02. Notice of Committed Borrowing................................ 26
SECTION 2.03. Money Market Borrowings...................................... 31
SECTION 2.04. Notice to Banks; Funding of Loans............................ 35
SECTION 2.05. Notes........................................................ 36
SECTION 2.06. Method of Electing Interest Rates............................ 37
SECTION 2.07. Interest Rates............................................... 39
SECTION 2.08. Fees......................................................... 41
SECTION 2.09. Optional Termination or Reduction of
Commitments................................................ 41
SECTION 2.10. Maturity; Mandatory Termination or
Reduction of Commitments.................................. 42
SECTION 2.11. Optional Prepayments......................................... 43
SECTION 2.12. General Provisions as to Payments............................ 44
SECTION 2.13. Funding Losses............................................... 45
SECTION 2.14. Computation of Interest and Fees............................. 45
ARTICLE III
CONDITIONS
SECTION 3.01. Conditions Precedent to Effectiveness
of Agreement............................................... 46
SECTION 3.02. Borrowings................................................... 47
SECTION 3.03. Conditions Precedent to New Acquisitions
and Additional Real Property Assets........................ 49
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
SECTION 4.01. Corporate Existence and Power................................ 50
SECTION 4.02. Corporate and Governmental Authorization;
No Contravention........................................... 50
SECTION 4.03. Binding Effect............................................... 50
SECTION 4.04. Financial Information........................................ 50
SECTION 4.05. Litigation................................................... 51
SECTION 4.06. Compliance with ERISA........................................ 51
SECTION 4.07. Environmental Matters........................................ 51
SECTION 4.08. Taxes........................................................ 52
SECTION 4.09. Subsidiaries................................................. 52
i
SECTION 4.10. Investments.................................................. 52
SECTION 4.11. Not an Investment Company.................................... 52
SECTION 4.12. Full Disclosure.............................................. 52
SECTION 4.13. Relationship of Borrower and Its
Affiliates................................................. 53
SECTION 4.14. Contracts.................................................... 53
SECTION 4.15. Qualification as a REIT...................................... 53
SECTION 4.16. No Plan Assets............................................... 53
SECTION 4.17. Subsidiary Debt.............................................. 53
SECTION 4.18. Ownership of Property........................................ 54
ARTICLE V
COVENANTS
SECTION 5.01. Information.................................................. 54
SECTION 5.02. Payment of Obligations....................................... 57
SECTION 5.03. Maintenance of Property; Insurance........................... 58
SECTION 5.04. Conduct of Business and Maintenance of
Existence.................................................. 58
SECTION 5.05. Compliance with Laws......................................... 58
SECTION 5.06. Inspection of Property, Books and Records.................... 59
SECTION 5.07. Debt to Consolidated Tangible Net Worth...................... 59
SECTION 5.08. EBITDA to Interest Expense Coverage.......................... 59
SECTION 5.09. EBITDA to Debt Service Coverage.............................. 59
SECTION 5.10. Unencumbered Cash Flow....................................... 59
SECTION 5.11. Unencumbered Asset Pool Value................................ 60
SECTION 5.12. Minimum Consolidated Tangible................................ 52
Net Worth.................................................. 60
SECTION 5.13. Secured Debt Ratio........................................... 60
SECTION 5.14. Debt to Total Asset Value Ratio.............................. 60
SECTION 5.15. Investments in Unimproved Real Property...................... 60
SECTION 5.16. Minority Holdings............................................ 60
SECTION 5.17. Joint Ventures............................................... 61
SECTION 5.18. Restricted Payments.......................................... 61
SECTION 5.19. Certain Requirements for the
Unencumbered Asset Pool.................................... 61
SECTION 5.20. Investments.................................................. 62
SECTION 5.21. Consolidations, Mergers and Sales of Assets.................. 62
SECTION 5.22. Use of Proceeds.............................................. 62
SECTION 5.23. Sale of Unencumbered Asset Pool.............................. 62
SECTION 5.24. Liens; Release of Liens...................................... 63
SECTION 5.25. Limitations on Recourse Debt................................. 63
SECTION 5.26. Limitations on Subsidiary Debt............................... 63
SECTION 5.27. Other Debt Instruments....................................... 64
SECTION 5.28. Hedging Requirements......................................... 64
SECTION 5.29. Restriction on Intercompany Debt;
Subordination.............................................. 64
SECTION 5.30. Affiliate Transactions....................................... 64
SECTION 5.31. Contracts.................................................... 65
ii
SECTION 5.32. Real Estate Investment Trust................................. 65
SECTION 5.33. No Plan Assets............................................... 66
SECTION 5.34. Environmental Matters........................................ 66
ARTICLE VI
DEFAULTS
SECTION 6.01. Events of Default............................................ 66
SECTION 6.02. Notice of Default............................................ 70
ARTICLE VII
THE AGENT
SECTION 7.01. Appointment and Authorization................................ 70
SECTION 7.02. Agent and Affiliates......................................... 70
SECTION 7.03. Action by Agent.............................................. 70
SECTION 7.04. Consultation with Experts.................................... 70
SECTION 7.05. Liability of Agent........................................... 70
SECTION 7.06. Indemnification.............................................. 71
SECTION 7.07. Credit Decision.............................................. 71
SECTION 7.08. Successor Agent.............................................. 71
SECTION 7.09. Agent's Fee.................................................. 72
ARTICLE VIII
CHANGE IN CIRCUMSTANCES
SECTION 8.01. Basis for Determining Interest Rate
Inadequate or Unfair....................................... 72
SECTION 8.02. Illegality................................................... 73
SECTION 8.03. Increased Cost and Reduced Return............................ 74
SECTION 8.04. Taxes........................................................ 75
SECTION 8.05. Base Rate Loans Substituted for Affected
Fixed Rate Loans........................................... 77
ARTICLE IX
MISCELLANEOUS
SECTION 9.01. Notices...................................................... 78
SECTION 9.02. No Waivers................................................... 78
SECTION 9.03. Expenses; Indemnification.................................... 78
SECTION 9.04. Sharing of Set-Offs.......................................... 79
SECTION 9.05. Amendments and Waivers....................................... 80
SECTION 9.06. Successors and Assigns....................................... 81
SECTION 9.07. Collateral................................................... 84
SECTION 9.08. Governing Law; Submission to
Jurisdiction............................................... 84
SECTION 9.09. Counterparts; Integration;
Effectiveness.............................................. 84
SECTION 9.10. WAIVER OF JURY TRIAL......................................... 84
SECTION 9.11. Survival..................................................... 84
SECTION 9.12. Domicile of Loans............................................ 84
iii
SECTION 9.13. Limitation of Liability....................................... 85
SECTION 9.14. Recourse Obligation........................................... 85
SECTION 9.15. Further Assurances............................................ 85
SECTION 9.16. Confidentiality; Disclosure of
Information................................................. 85
SECTION 9.17. No Bankruptcy Proceedings..................................... 86
