EXHIBIT 10.11
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AMENDED AND RESTATED
LOAN AGREEMENT
Dated as of October 1, 1998
among
PRIME GROUP REALTY, L.P.,
as Borrower
and
PRIME GROUP REALTY TRUST
and
LASALLE NATIONAL BANK
as Lender
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INDEX
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Page No.
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1. DEFINITIONS...................................................... 1
1.1 General Terms........................................ 1
1.2 Accounting Terms..................................... 9
1.3 Certain Matters of Construction...................... 9
2. LOANS; FEES; TERMS OF PAYMENT.................................... 9
2.1 Revolving Credit Facility. .......................... 9
2.2 Borrowing Procedures................................. 10
2.3 Payments and Prepayments............................. 10
2.4 Intentionally Deleted. .............................. 11
2.5 Interest............................................. 11
2.6 Fees................................................. 13
2.7 Payment Dates........................................ 14
2.8 Intentionally Deleted. .............................. 14
2.9 Renewals; Conversion and Continuation of Loans....... 14
2.10 Indemnity............................................ 15
2.11 Change in Legality................................... 15
2.12 Unavailability of Deposits or Inability to
Ascertain, or Inadequacy of Libor Rate.............. 16
2.13 Increased Cost and Reduced Return.................... 16
2.14 Discretion of the Lender as to Manner of Funding..... 17
3. TERM OF THIS AGREEMENT; PREPAYMENTS.............................. 17
3.1 Term................................................. 17
3.2 Prepayment; Termination.............................. 18
3.3 Mandatory Prepayment................................. 18
3.4 Collateral Security.................................. 18
4. CONDITIONS PRECEDENT............................................. 19
4.1 Closing; Conditions to Initial Loan and Closing...... 19
4.2 Condition to All Loans............................... 21
5. GENERAL CONTINUING WARRANTIES AND REPRESENTATIONS................ 22
5.1 Office............................................... 22
5.2 Existence............................................ 23
5.3 Authority............................................ 23
5.4 No Breach............................................ 23
5.5 Solvency............................................. 24
5.6 Compliance With Laws. ............................... 25
5.7 Actions or Proceedings............................... 25
5.8 Trademarks, Licenses, etc............................ 25
5.9 Financial Statements................................. 25
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Page No.
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5.10 Conduct of Business.................................. 26
5.11 Environmental Laws................................... 26
5.12 Permits and Licenses................................. 27
5.13 ERISA................................................ 28
5.14 Intentionally Deleted................................ 28
5.15 Tax Obligations. ................................... 28
5.16 Employee Controversies............................... 29
5.17 Full Disclosure. .................................... 29
5.18 Bank Boston Credit Agreement......................... 29
6. INCORPORATION OF NEGATIVE COVENANTS.............................. 29
6.1-6.9Incorporation of Negative Covenants.................. 29
6.10 Independent Enforcement of Negative Covenants by
the Lender........................................... 30
6.11 Leases............................................... 30
7. INCORPORATION OF AFFIRMATIVE COVENANTS - GENERAL................. 30
7.1-7.17Incorporation of Affirmative Covenants.............. 30
7.18 Independent Enforcement of Affirmative Covenants
by the Lender........................................ 30
7.19 Use of Proceeds...................................... 31
7.19 Leases, Lease Approvals.............................. 31
8. AFFIRMATIVE COVENANTS - REPORTING................................ 31
8.1 Reports, Covenant Compliance Certificates............ 31
8.2 Intentionally Deleted................................ 31
8.3 Other Information and Changes........................ 31
8.4 Confidentiality...................................... 32
9. COVENANTS - FINANCIAL............................................ 32
9.1 Incorporation of Financial Covenants................. 32
9.2 Independent Enforcement of Financial Covenants
by the Lender........................................ 32
10. EVENTS OF DEFAULT................................................ 32
10.1 Payment.............................................. 33
10.2 Breach of Covenants.................................. 33
10.3 Breach of Representation............................. 33
10.4 Attachment or Levy................................... 33
10.5 Voluntary Insolvency................................. 33
10.6 Involuntary Insolvency............................... 33
10.7 Injunction........................................... 34
10.8 Governmental Lien.................................... 34
10.9 Judgment............................................. 34
10.10 Other Indebtedness................................... 34
10.11 Bank Boston Credit Agreement......................... 34
10.12 ERISA Reportable Event............................... 34
10.13 Breach of Covenants.................................. 35
11. RIGHTS AND REMEDIES.............................................. 35
11.1 Rights and Remedies Generally........................ 35
11.2 Rights Cumulative.................................... 36
12. TAXES AND EXPENSES............................................... 36
13. CERTAIN WAIVERS.................................................. 36
13.1 Application of Payments.............................. 36
13.2 Demand, etc. ....................................... 37
14. NOTICES.......................................................... 37
15. CHOICE OF LAW AND VENUE.......................................... 38
16. INDEMNITY........................................................ 38
17. GENERAL PROVISIONS............................................... 39
17.1 Acceptance........................................... 39
17.2 Binding Agreement.................................... 39
17.3 Section Headings..................................... 40
17.4 Construction......................................... 40
17.5 Severability......................................... 40
17.6 Entire Agreement..................................... 40
17.7 No Fiduciary Relationship or Joint Venture........... 40
17.8 Publicity............................................ 40
17.9 Counterparts......................................... 40
17.10 Conflict............................................. 41
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Page No.
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18. WAIVER OF JURY TRIAL............................................. 41
19. PARTNER LIABILITY................................................ 41
19.1 Limited Recourse to Company.......................... 41
19.2 Limited Recourse to Partners of Borrower other
than Company......................................... 41
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AMENDED AND RESTATED LOAN AGREEMENT
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THIS AMENDED AND RESTATED LOAN AGREEMENT, dated as of October 1, 1998, is
entered into by and between the "Lender" and "Borrower" and "Company"
(hereinafter defined).
R E C I T A L S:
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A. The Lender has made certain revolving financing accommodations available
to the Borrower pursuant to that certain Loan Agreement dated as of January 28,
1998 between Lender, Borrower and Company ("Existing Agreement"); and
B. The Borrower has requested that Lender make certain modifications to the
Existing Agreement and the Lender is willing to make such modifications upon the
terms and conditions set forth in this Agreement.
NOW, THEREFORE, in consideration of the parties' mutual agreements
contained herein, the parties hereby agree that effective upon the date hereof
the Existing Agreement is amended and restated in its entirety as follows:
1. DEFINITIONS
1.1 General Terms
As used in this Agreement, the following terms shall have the following
definitions:
"AFFILIATE" shall mean any Person (a) that directly or indirectly, through
one or more intermediaries, controls or is controlled by, or is under common
control with Borrower, (b) that directly or beneficially owns or holds five
percent (5%) or more of any class of the interests of Borrower, (c) five percent
(5%) or more of whose voting stock (or in the case of a Person which is not a
corporation, five percent (5%) or more of the equity interest or economic value
of which) is owned directly or beneficially or held by Borrower, or (d) five
percent (5%) or more of whose voting stock (or in case of a Person which is not
a corporation, five percent (5%) or more of the equity interest or economic
value of which) is owned directly or beneficially or held by a Person referred
to in (a), (b) or (c) above.
"AGREEMENT" shall mean this Amended and Restated Loan Agreement, any and
all exhibits or schedules thereto, any and all concurrent or subsequent riders
to this Loan Agreement and any extensions, supplements, amendments,
modifications or restatements to or of this Loan Agreement and/or to or of any
such rider.
"ASSIGNMENT OF LEASES AND RENTS" shall mean that certain Assignment of
Leases and Rents dated as of January 28, 1998, as amended from time to time from
the Mortgagor to Lender pursuant to which the Borrower shall grant and assign
Lender a security interest and assignment of Mortgagor's interest as lessor with
respect to all leases and rents of all or any part of the Indiana Property,
including without limitation, the Indiana Property Lease, as security for the
Obligations.
"AUTHORIZED REPRESENTATIVE" shall mean W. Xxxxxxx Xxxxxx and any other
corporate officer designated in writing to Lender by any of the aforementioned
officers.
"BANK BOSTON CREDIT AGREEMENT" shall mean that certain Credit Agreement by
and among Borrower, Company, Bank Boston, N.A. and Prudential Securities Credit
Corporation dated November 17, 1997, as amended by that certain First Amendment
to Credit Agreement dated as of December 15, 1997, and by that certain Second
Amendment to Credit Agreement dated as of March 16, 1998, as amended and
restated by that certain Third Amendment to Credit Agreement dated as of March
30, 1998, and as amended by that certain Fourth Amendment to Credit Agreement
dated as of September 24, 1998 and that certain Fifth Amendment to Credit
Agreement dated as of October __, 1998, a copy of which Third Amendment, Fourth
Amendment and Fifth Amendment is attached hereto as Exhibit B.
"BENEFIT PLAN" shall mean an employee pension benefit plan of Borrower or
an ERISA Affiliate, as defined in Section 3(2) of ERISA, which is subject to
Title IV of ERISA.
"BORROWER" shall mean Prime Group Realty, L.P., a Delaware limited
partnership, with its chief executive office and principal place of business at
00 Xxxx Xxxxxx Xxxxx, Xxxxx 0000, Xxxxxxx, Xxxxxxxx, 00000.
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"BORROWER'S BOOKS" shall mean all of Borrower's books and records
including, but not limited to: minute books; ledgers; records indicating,
summarizing, or evidencing Borrower's assets, liabilities, and all information
relating thereto; records indicating, summarizing, or evidencing Borrower's
business operations or financial condition; records indicating, summarizing, or
evidencing Borrower's compliance with or problems or activities concerning Laws;
and all computer programs, disc or tape files, printouts, runs, and other
computer prepared information and the equipment containing such information and
any software necessary to operate the same.
"BORROWER'S LOAN ACCOUNT" shall mean a loan account maintained by Lender on
its books in which shall be recorded (i) all loans and advances made by Lender
to Borrower pursuant to this Agreement, (ii) all payments made by Borrower on
all such loans and advances, and (iii) all other appropriate debits and credits
as provided in this Agreement, including, without limitation, all Out-of-Pocket
Fees and Costs and interest; all such entries shall be made by Lender in
accordance with Lender's customary accounting practices as in effect from time
to time.
"BUSINESS DAY" shall mean (a) any day other than a Saturday, Sunday, or
other day on which banks in Illinois are required to be closed, and (b) relative
to the making of Eurodollar Loans, any day on which dealings in Dollars are
carried on in the interbank Eurodollar market which also satisfies the criteria
set forth in (a) above.
"CAPITAL EXPENDITURES" shall mean, with respect to any period, the
aggregate of all expenditures (whether paid in cash or accrued as liabilities
and including expenditures for capitalized lease obligations) by Borrower during
such period that are required by Generally Accepted Accounting Principles to be
included in or reflected by the property, plant, or equipment or similar fixed
asset accounts in the balance sheet of Borrower.
"CLOSING" shall have the meaning set forth in Section 4.1 hereof.
"CODE" shall mean the Uniform Commercial Code of the State of Illinois as
in effect from time to time during the term hereof and any and all terms used in
this Agreement which are not otherwise defined herein but are defined in the
Code shall be construed and defined in accordance with the meaning and
definition ascribed to such terms under the Code.
"COMMITMENT" shall mean the Lender's commitment to make Loans to the
Borrower in an aggregate amount not to exceed the Maximum Facility.
"COMMON SHARES" shall have the same meaning as set forth in the Bank Boston
Credit Agreement.
"COMMON UNITS" shall have the same meaning as set forth in the Bank Boston
Credit Agreement.
"COMPANY" shall mean Prime Group Realty Trust, a Maryland trust.
"CONTRIBUTING SPONSOR" shall mean any person described in Section
4001(a)(13) of ERISA with respect to a Benefit Plan.
"DEFAULT RATE" shall have the meaning set forth in Section 2.5(b) hereof.
"DISTRIBUTION" shall mean the declaration or payment of any dividend or
distribution of cash or cash equivalents to the holders of any Equity Interests,
or any distribution or payment to any officer, employee or director of the
Borrower or the Company, other than reasonable employee compensation.
"DOLLAR(S)" and the sign "$" shall mean lawful currency of the United
States of America.
"EFFECTIVE DATE" shall mean the date on which the conditions precedent for
initial Loans under Section 4 hereof have been satisfied and the initial Loan
has been made.
"ENVIRONMENTAL LAWS" shall have the meaning set forth in Section 5.11
hereof.
"ENVIRONMENTAL REPORTS" shall have the same meaning as set forth in the
Bank Boston Credit Agreement and in addition shall include that certain
Environmental Report dated December 16, 1997, prepared by Xxxxxxx Environmental,
Inc. with respect to the Indiana Property.
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"EQUITY INTERESTS" shall mean, collectively, all equity ownership interests
in the Borrower or the Company including, without limitation, the Common Shares,
the Preferred Shares, the Common Units and the Preferred Units.
"EQUITY PROSPECTUS" shall have the same meaning as set forth in the Bank
Boston Credit Agreement.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974, as
amended, and all references to sections thereof shall include such sections and
any predecessor and successor provisions thereto.
"ERISA AFFILIATE" shall mean each trade or business (whether or not
incorporated) which, together with Borrower, would be treated as a single
employer under Section 4001(a)(14) of ERISA or IRC Sections 414(b), (c), (m),
(n) or (o), as applicable.
"EURODOLLAR LOAN" shall mean any Loan with respect to which the Borrower
shall have selected an interest rate based on the Libor Rate in accordance with
the provisions of Section 2.5(a) of this Agreement; provided, however, that
there shall not be in excess of four (4) Eurodollar Loans outstanding at any one
time.
"EVENT OF DEFAULT" shall mean the occurrence of any one or more of the
events set forth in Section 10 of this Agreement.
"EXCESS INTEREST" shall have the meaning set forth in Section 2.5(c)
hereof.
"FAIR VALUE" shall mean Borrower's assets and liabilities as determined in
accordance with Generally Accepted Accounting Principles, except that assets
shall be reflected at present fair saleable value and liabilities shall reflect
a complete statement of liabilities, fixed or contingent, direct or indirect,
disputed or undisputed, whether or not required to be reflected on a balance
sheet prepared in accordance with Generally Accepted Accounting Principles.
"FEDERAL FUNDS EFFECTIVE RATE" shall mean for any day, a fluctuating rate
of interest equal for each day during such period to (i) the weighted average of
the rates on overnight federal funds transactions with members of the Federal
Reserve System arranged by federal funds brokers, as published for such day by
the Federal Reserve Bank of New York; or (ii) if such rate is not so published
for any day, the average of the quotations for such day on such transactions
received by Lender from three (3) federal funds brokers of recognized standing
selected by it.
"FISCAL YEAR" shall mean with respect to Borrower, the fiscal accounting
period of Borrower each year ending on December 31 of each calendar year.
"FORMATION TRANSACTIONS" shall have the same meaning as set forth in the
Bank Boston Credit Agreement.
"GENERALLY ACCEPTED ACCOUNTING PRINCIPLES" shall mean, with respect to any
date of determination, generally accepted accounting principles as used by the
Financial Accounting Standards Board and/or the American Institute of Certified
Public Accountants consistently applied.
"GUARANTOR SUBSIDIARIES" shall mean the partnerships, limited liability
companies and corporations identified on Schedule 1.1 hereto (including, without
limitation, Mortgagor), and any other partnerships, limited liability companies
or corporations hereafter approved by the Lender which are at least 99% owned by
Borrower and which execute and deliver a Subsidiary Guaranty in favor of the
Lender.
"HAZARDOUS MATERIALS" shall have the meaning set forth in Section 5.11
hereof.
"INDEBTEDNESS" shall have the same meaning as set forth in the Bank Boston
Credit Agreement.
"INDEMNIFIED PERSONS" shall have the meaning set forth in Section 16
hereof.
"INDIANA PROPERTY" shall mean that certain tract of real property owned by
Mortgagor consisting of approximately 31 acres, together with the warehouse
building comprised of approximately 450,000 square feet and all other
improvements located thereon, located at 000 Xxxxxxxx Xxxxxx, Xxxxxxx, Xxxxxxx.
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"INDIANA PROPERTY LEASE" shall mean that certain lease for the Indiana
Property dated May 1, 1988 between Mortgagor, as landlord, and General Electric
Company, as tenant.
"INSOLVENCY PROCEEDING" shall mean, with respect to any Person, any
proceeding commenced by or against such Person, under any provision of the
United States Bankruptcy Code, as amended, or under any other bankruptcy,
reorganization or insolvency law, or any assignment for the benefit of
creditors, formal or informal moratorium, compositions or extensions with some
or all creditors of such Person.
"INTEREST PERIOD" shall mean: (i) as to any Eurodollar Loan, the period
commencing on the date of such Eurodollar Loan and ending on the date thereafter
selected by the Borrower, not to exceed in any event 180 days, and (ii) as to
any Reference Rate Loan, the period commencing on the date of such Reference
Rate Loan and ending on the earlier of (A) the last Business Day of each
calendar month, and (B) the expiration or earlier termination of this Agreement;
provided, however, that (i) if any Interest Period would end on a day that shall
not be a Business Day, such Interest Period shall be extended to the next
succeeding Business Day, (ii) no Interest Period with respect to any Loan shall
end later than the Termination Date, and (iii) interest shall accrue from and
including the first day of an Interest Period to and excluding the last day of
such Interest Period.
"IRC" shall mean the Internal Revenue Code of 1986, as amended, and all
references to sections thereof shall include such sections and any predecessor
and successor provisions thereto.
"JUDICIAL OFFICER OR ASSIGNEE" shall mean any trustee, receiver,
controller, custodian, assignee for the benefit of creditors or any other Person
or entity having powers or duties like or similar to the powers and duties of a
trustee, receiver, controller, custodian, or assignee for the benefit of
creditors.
"LAWS" shall mean all ordinances, statutes, rules, regulations, codes,
orders, injunctions, writs or decrees of any government, whether federal, state,
municipal or local, of any political subdivision or agency thereof, or of any
court, board or similar entity established by any of the foregoing having
jurisdiction over the property, assets, business or operations of a Person.
"LENDER" shall mean LaSalle National Bank, a national banking association,
together with its successors and assigns.
"LIBOR RATE" shall mean, with respect to any Eurodollar Loan for any
Interest Period, the interest rate per annum equal to the quotient obtained by
dividing (x) the rate of interest determined by Lender to be the average of the
rate per annum at which deposits in U.S. dollars are generally offered in the
London Interbank Bank at 11:00 A.M. London time, two (2) Business Days before
the first day of such Interest Period, for a period equal to such Interest
Period and in the amount of the applicable Eurodollar Loan, by (y) the
difference between one hundred percent (100%) and any applicable reserve
requirements (rounded upward to the nearest whole multiple of one hundredth
(1/100) of one percent (1%) per annum), including, without limitation, any
statutory maximum requirement for Lender to hold reserves for "Eurocurrency
Liabilities" under Regulation D of the Board of Governors of the Federal Reserve
System (or any similar reserves under any successor regulation or regulations).
"LIEN" shall have the same meaning as set forth in the Bank Boston Credit
Agreement.
"LOAN DOCUMENTS" shall mean this Agreement, the Note, the Security
Documents, the Subsidiary Guaranty, and all other agreements, documents and
instruments now or hereafter evidencing, securing or otherwise relating to the
Loans.
"LOANS" shall have the meaning set forth in Section 2.1 hereof.
"LOSSES" shall have the meaning set forth in Section 16 hereof.
"MAJOR LEASE" shall mean with respect to the Indiana Property, any lease
(including, without limitation, the Indiana Property Lease) of 100,000 square
feet or more, and any guaranty of the tenant's obligations under any such lease.
"MAJOR TENANTS" shall mean as to any Major Lease, those tenants that are
parties to that Major Lease and any guarantors of those tenant's obligations
thereunder.
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"MATERIAL ADVERSE EFFECT" shall mean a material adverse effect on (i) any
of the Mortgaged Properties, (ii) the business, result of operations or
financial condition of the Borrower, the Company, and the Related Companies
taken as a whole, (iii) the ability of the Borrower, the Company, Mortgagor, or
any other of the Guarantor Subsidiaries to perform their obligations under the
Loan Documents, or (iv) the validity or enforceability of any of the Loan
Documents or the remedies or material rights of the Lender thereunder.
"MAXIMUM FACILITY" shall mean $15,000,000.
"MORTGAGE" shall mean that certain Mortgage, Assignment of Leases and
Rents, Security Agreement and Financing Statement dated as of January 28, 1998
as amended from time to time delivered by Mortgagor to Lender pursuant to which
the Mortgagor shall convey the Indiana Property as security for the Obligations.
"MORTGAGED PROPERTIES" shall have the same meaning as set forth in the Bank
Boston Credit Agreement, and in addition, shall be deemed to include, without
limitation, the Indiana Property.
"MORTGAGOR" shall mean 000 Xxxxxxxx Xxxxxx, L.L.C., a Delaware limited
liability company, which is 100% owned by the Borrower.
"MULTIEMPLOYER PLAN" shall mean a plan described in Section 4001(a)(3) of
ERISA which covers employees of Borrower or any ERISA Affiliate.
"NET OFFERING PROCEEDS" shall mean all net cash proceeds received after the
date hereof by the Borrower or the Company as a result of the sale of common,
preferred or other classes of stock of the Company or the issuance of limited
partnership interests in the Borrower after deducting customary costs and
discounts of issuance paid by the Company or Borrower in connection therewith.
"NOTE" shall mean the Revolving Loan Note dated as of January 28, 1998
attached hereto as Exhibit A, as amended from time to time.
"OBLIGATIONS" shall mean all loans, advances, overdrafts, debts,
liabilities (including without limitation any and all amounts charged to
Borrower's account pursuant to any agreement authorizing Lender to charge
Borrower's Loan Account), obligations, covenants, lease payments, guarantees and
duties owing by Borrower to Lender of any kind or description (whether advanced
pursuant to or evidenced by this Agreement, by the Note, or by any other Loan
Document), whether direct or indirect, absolute or contingent, due or to become
due, now existing or hereafter arising (or otherwise as a result of a payment
made by Lender on behalf of Borrower as permitted under this Agreement or any
other Loan Documents) and further including without limitation all interest, all
Out-of-Pocket Fees and Costs which Borrower is required to pay or reimburse by
this Agreement or any other Loan Document, by law or otherwise.
"OUT-OF-POCKET FEES AND COSTS" shall have the meaning set forth in Section
2.6(b) hereof.
"PBGC" shall mean the Pension Benefit Guaranty Corporation or any successor
agency.
"PARTICIPANT" shall mean any Person now or from time to time hereafter
participating with the Lender in any of the Loans made or issued by the Lender
to Borrower pursuant to this Agreement.
"PERMITTED ACQUISITIONS" shall have the same meaning as set forth in the
Bank Boston Credit Agreement.
"PERMITTED DEVELOPMENTS" shall have the same meaning as set forth in the
Bank Boston Credit Agreement.
"PERSON" shall mean any individual, sole proprietorship, partnership, joint
venture, trust, unincorporated organization, association, corporation,
institution, entity or governmental entity.
"POTENTIAL DEFAULT" shall mean any event which through the passage of time,
service of notice or both, would mature into an Event of Default.
"PREFERRED SHARES" shall have the same meaning as set forth in the Bank
Boston Credit Agreement.
"PREFERRED UNITS" shall have the same meaning as set forth in the
Bank Boston Credit Agreement.
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"PROHIBITED TRANSACTION" shall mean any transaction described in
Section 406 of ERISA which is not exempt by reason of Section 408 of ERISA, and
any transaction described in Section 4975(c) of the IRC which is not exempt by
reason of Sections 4975(c)(2) or (d) of the IRC, and which could result in any
excise tax, fine, penalty or other liability being imposed on Borrower.
"RATE" shall have the meaning set forth in Section 2.5(a) hereof.
"REAL ESTATE" shall have the same meaning as set forth in the Bank Boston
Credit Agreement, and in addition shall be deemed to include, without
limitation, the Indiana Property.
"REAL ESTATE ASSETS" shall have the same meaning as set forth in the Bank
Boston Credit Agreement, and in addition shall be deemed to include, without
limitation, the Indiana Property.
"REFERENCE RATE" shall mean the greater of (i) the variable per annum rate
of interest announced from time to time by LaSalle at its corporate headquarters
in Chicago, Illinois, as its Prime Rate or equivalent rate, or (ii) the Federal
Funds Effective Rate in effect from time to time, plus one-half of one percent
(.50%) per annum. The "Prime Rate" is one of LaSalle's index rates and merely
serves as a basis under which effective rates of interest are calculated for
loans making reference thereto and may not be the lowest or best rate at which
LaSalle calculates interest or extends credit.
"REFERENCE RATE LOAN" shall mean any Loan with respect to which Borrower
shall have selected an interest rate based upon the Reference Rate in accordance
with the provisions of Section 2.5(a) of this Agreement.
"REGULATORY AGENCIES" shall mean any national, federal, state, local or
other government or political subdivision or any agency, authority, bureau,
commission, department or instrumentality thereof, or any court.
"RELATED COMPANIES" shall have the same meaning as set forth in the Bank
Boston Credit Agreement.
"RELEASE" shall have the meaning set forth in Section 5.11 hereof.
"REPORTABLE EVENT" shall mean a reportable event described in Section 4043
of ERISA or the regulations thereunder, for which the thirty (30) day notice
requirement has not been waived.
"SECURITY DOCUMENTS" shall mean the Mortgage, Assignment of Leases and
Rents and all other documents granting or evidencing security interests in the
Indiana Property or any portion thereof to secure the Obligations.
"SUBSIDIARY" shall mean any corporation, partnership, limited liability
company, association, trust or other business entity of which the designated
parent or other controlling Person shall at any time own, directly or
indirectly, through a Subsidiary or Subsidiaries at least a majority (by number
of votes) of the outstanding Voting Interests.
"SUBSIDIARY GUARANTY" shall mean that certain Guaranty of Payment and
Performance dated as of January 28, 1998 made and delivered by each of the
Guarantor Subsidiaries in favor of the Lender, as modified by that certain First
Amendment to Guaranty dated February 17, 1998, and as further modified by that
certain Release and Reaffirmation of Guaranty dated as of the date hereof.
"TERMINATION DATE" shall have the meaning set forth in Section 2.1.
"TOTAL EQUITY CAPITAL" shall mean the Borrower's total equity capital
determined in a manner consistent with that used in preparing Borrower's
consolidated financial statements for its fiscal year ending December 31, 1997.
"UNCURED DEFAULT" shall mean an Event of Default which shall be continuing.
"VOTING INTERESTS" shall have the same meaning as set forth in the Bank
Boston Credit Agreement.
1.2 ACCOUNTING TERMS.
Any accounting terms used in this Agreement which are not specifically
defined herein shall have the meanings customarily given them in accordance with
Generally Accepted Accounting Principles. In the event that changes in Generally
Accepted Accounting Principles shall be mandated by the Financial Accounting
Standards Board and/or the American Institute of Certified Public Accountants or
any similar accounting body of comparable standing, or shall be recommended by
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Borrower's certified public accountants, to the extent that such changes would
modify such accounting terms or the interpretation or computation thereof as
contemplated by this Agreement at the time of execution hereof, then in such
event such changes shall be followed in defining such accounting terms only
after the Borrower and Lender shall have agreed to amend this Agreement to
reflect the original intent of such terms in light of such changes, and such
terms shall continue to be applied and interpreted without such change until
such agreement.
1.3 CERTAIN MATTERS OF CONSTRUCTION.
The terms "herein" "hereof" and "hereunder" and other words of similar
import refer to this Agreement as a whole and not to any particular section,
paragraph or subdivision. Any pronoun used shall be deemed to cover all genders.
The section titles, table of contents and list of exhibits appear as a matter of
convenience only and shall not affect the interpretation of this Agreement. All
references to statutes and related regulations shall include any amendments of
same and any successor statutes and regulations. All references to any
instruments or agreements, including, without limitation, references to any of
the Loan Documents shall include any and all modifications or amendments thereto
and any and all extensions or renewals thereof. The Recitals to this Agreement
are incorporated into this Agreement in their entirety and deemed to be a part
hereof. Wherever covenants or definitions from the Bank Boston Credit Agreement
are incorporated and/or restated in this Agreement, any defined terms or
references to sections or schedules or exhibits in such covenants or definitions
shall have the same meaning as ascribed to such defined terms in the Bank Boston
Credit Agreement and shall be deemed to be references to such sections,
schedules or exhibits of the Bank Boston Credit Agreement.
2. LOANS; FEES; TERMS OF PAYMENT.
2.1 REVOLVING CREDIT FACILITY.
Subject to the terms and provisions of this Agreement including without
limitation, that no Event of Default or Potential Default has occurred and all
other conditions precedent to lending under Section 4 hereof have been
satisfied, upon the request of Borrower, made at any time and from time to time
prior to January 31, 1999 (the "Termination Date"), the Lender agrees to make
loans and advances (hereinafter individually referred to as a "Loan" and
collectively as the "Loans") to Borrower from time to time so long as the
aggregate amount of the Revolving Loans outstanding at any time does not exceed
the Maximum Facility.
The Loans shall be evidenced by, and repayable in accordance with the Note.
2.2 BORROWING PROCEDURES.
Lender shall have received, on or before 11:00 a.m. Chicago time, one (1)
Business Day prior to the date a Loan is to be made, if a Reference Rate Loan,
or three (3) Business Days prior to the date a Loan is to be made, if a
Eurodollar Loan, (i) an oral request from Borrower for a Loan in a specific
amount (and a request in writing, which shall be delivered to Lender on the same
Business Day, executed by an Authorized Representation of Borrower), (ii)
designation whether the Loan is to be a Eurodollar Loan or a Reference Rate
Loan, and if such Loan is to be a Eurodollar Loan, the Interest Period or
Interest Periods with respect thereto, and (iii) copies of all other documents
which the Borrower is required to deliver to Lender hereunder. If such request
for a Loan is received by Lender one (1) business day before the day a Reference
Rate Loan is to be made or three (3) Business Days prior to the date a
Eurodollar Loan is to be made, subject to the other terms and conditions of this
Agreement, Lender will make such Loan on the applicable day on which such Loan
is to be funded hereunder, subject to any delays beyond Lender's reasonable
control, provided that Lender shall not be liable for any damages or liabilities
for the failure to so make any Loan on the day requested unless such failure was
due to Lender's gross negligence or wilful misconduct. If no election as to the
type of Loan is specified in any such notice by Borrower, then such Loan shall
be a Reference Rate Loan. If no Interest Period is specified with respect to a
Eurodollar Loan in such notice, then Borrower shall be deemed to have selected
an Interest Period of one month's duration. Each request for a Reference Rate
Loan shall be in a minimum amount of $100,000. Notwithstanding anything
contained in this Agreement to the contrary, Borrower may not have more than
four (4) Eurodollar Loans outstanding at any one time, and each request for a
Eurodollar Loan shall be in a minimum initial increment of $100,000.
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2.3 PAYMENTS AND PREPAYMENTS.
(a) Notwithstanding anything to the contrary set forth in this Agreement,
each Loan shall be due and payable on the earlier of (i) 180 days
after the Lender's funding thereof, or (ii) the Termination Date.
Borrower shall make each payment in respect of the principal of and
interest on the Loans and any other payments due under this Agreement
not later than 12:00 p.m. Chicago time on the day when due, in
Dollars, to the Lender at the Lender's office in Chicago, Illinois in
immediately available funds.
(b) After the occurrence of an Event of Default resulting from failure to
pay any Obligations hereunder, Lender may (but shall not be obligated
to) debit the amount of any such payment which is not made by such
time to any ordinary deposit account of Borrower with Lender and shall
give notice thereof to the Borrower, provided the failure to give such
notice does not affect the validity of such debit.
(c) Borrower shall, at the time of making such payment under this
Agreement or the Note, specify to the Lender the Loans or other
amounts payable by Borrower hereunder to which such payment is to be
applied. Absent receipt of such notice from the Borrower, the Lender
may apply any payments received from the Borrower in any order or
priority determined by the Lender in its sole discretion.
(d) Each payment received by the Lender under this Agreement or the Note
shall be deemed paid to Lender on the same Business Day of receipt by
Lender if received by 1:00 p.m. Chicago time, or otherwise on the next
successive Business Day, at the office of the Lender.
(e) Except as otherwise provided in Section 2.10 hereof, any prepayment of
the Obligations by Borrower shall be without premium or penalty, other
than the imposition of the Default Rate of interest, where applicable.
(f) The Lender shall render monthly statements of the Obligations owing by
Borrower to the Lender, including statements of all principal,
interest, and Out-of-Pocket Fees and Costs owing, and such statements
shall be prima facie evidence to be correct and accurate and
constitute an account stated between the Borrower and the Lender
unless, within thirty (30) days after receipt thereof by the Borrower,
the Borrower shall deliver to the Lender, at the Lender's place of
business indicated in Section 14 hereof, written objection thereto
specifying the error or errors, if any, contained in any such
statement. Any balance credited to the Borrower's account, less monies
remitted, paid or otherwise advanced by the Lender to or for the
Borrower's account, and less any other sums due to the Lender as
provided in this Agreement, shall be remitted to the Borrower when all
Obligations owed by the Borrower to the Lender have been paid in full.
2.4 INTENTIONALLY DELETED.
2.5 INTEREST.
(a) All Obligations owed by the Borrower to Lender (except for Eurodollar
Loans and those Obligations evidenced by a promissory note other than
the Note, or covered by any other Section of this Agreement or other
agreement which specifically provides for a rate of interest different
from that provided for herein) shall bear interest, on the unpaid
principal balance thereof, at a rate per annum (computed on the basis
of the actual number of days elapsed over a 360 day year) (the "Rate")
equal to the Reference Rate, payable monthly in arrears on the first
Business Day of each calendar month.
Each Eurodollar Loan shall bear interest on the unpaid principal
balance thereof at a rate per annum (computed on the basis of the
actual number of days elapsed over a 360-day year) equal to the Libor
Rate for the Interest Period in effect for such Loan, plus 1.95%.
Interest on Eurodollar Loans shall be payable in arrears on the
earlier of (i) last day of each calendar month during the applicable
Interest Period, or (ii) on the last day of such Interest Period.
In addition to calculations of the Rate as provided above, in the
event that the Reference Rate announced is, from time to time
hereafter, changed, adjustment in the Rate shall be made on the
effective date of such change in the Reference Rate. The Rate, as
adjusted, shall apply to all Obligations (except as provided above
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with respect to Eurodollar Loans or where otherwise specifically
provided) owed on the date following the date on which the adjustment
is made and shall continue to apply to such Obligations owed during
succeeding months until the Reference Rate is adjusted again. Lender
shall use reasonable efforts to notify Borrower of each change in the
Reference Rate as soon as practicable, but Borrower's obligation to
pay all interest at the Rate and Default Rate as provided in this
Agreement shall not be affected by, nor shall Lender have any
liability for, any failure to so notify Borrower.
(b) Notwithstanding the foregoing, the Obligations shall bear interest,
from and after the occurrence of an Event of Default and for so long
as an Event of Default shall be an Uncured Default and without
constituting a waiver of any such Event of Default, on the balances
owing from time to time, at a rate per annum equal to four (4)
percentage points above the Rate (the "Default Rate"), payable on
demand. In addition, the Borrower shall pay to the Lender a late
charge equal to three (3) percent of any amount of principal and/or
interest and/or charges on the Loans which is not paid within ten (10)
days of the date when due.
(c) It is the intention of Lender and Borrower to comply with the laws of
the State of Illinois, and notwithstanding any provision to the
contrary contained herein or in the other Loan Documents, Borrower
shall not be required to pay, and Lender shall not be permitted to
collect, any amount in excess of the maximum amount of interest
permitted by applicable law ("Excess Interest"). If any Excess
Interest is provided for or determined to have been provided for by a
court of competent jurisdiction in this Agreement or in any of the
other Loan Documents, then in such event (i) the provisions of this
Section shall govern and control; (ii) Borrower shall not be obligated
to pay any Excess Interest; (iii) any Excess Interest that Lender may
have received hereunder shall be, at Lender's option, (A) applied as a
credit against either the outstanding principal balance of the Loans
or accrued and unpaid interest hereon, (B) refunded to the payor
thereof, or (C) any combination of the foregoing; (iv) the interest
rate(s) provided for herein shall be automatically reduced to the
maximum rate allowed under applicable law, and this Agreement and the
other Loan Documents shall be deemed to have been, and shall be,
reformed and modified to reflect such reduction; and (v) Borrower
shall not have any action against Lender for any damages arising out
of the payment or collection of any Excess Interest. Notwithstanding
the foregoing, if any interest payment or other charge or fee payable
hereunder or under any of the other Loan Documents exceeds the maximum
amount then permitted by applicable law, then to the extent permitted
by law, Borrower shall be obligated to pay the maximum amount then
permitted by applicable law and Borrower shall continue to pay the
maximum amount from time to time permitted by applicable law until all
such interest payments and other charges and fees otherwise due
hereunder or under any of the other Loan Documents (in the absence of
such restraint imposed by applicable law) have been paid in full.
(d) Lender may, upon notice to Borrower, at its option, charge any
interest and fees payable hereunder or under any of the other Loan
Documents to Borrower's Loan Account, and any amounts so charged shall
thereupon constitute Obligations hereunder and shall thereafter accrue
interest as provided for in this Agreement.
2.6 FEES.
In consideration of Lender' establishing the Maximum Facility hereunder and
making of the Loans hereunder, Borrower shall pay to the Lender, the following
fees and charges:
(a) A facility fee equal to $82,500.00, previous receipt of which is
acknowledged by Lender.
(b) All reasonable out-of-pocket fees, costs and expenses ("Out-of-Pocket
Fees and Costs"), incurred by Lender in connection with (i) any bank
charges in connection with opening and maintaining and transferring
funds from any depository account and depositing funds for collection
by Lender on account of the Obligations; (ii) wire transfer fees in
connection with Lender's forwarding to Borrower the proceeds of Loans
hereunder; (iii) photocopying and other mechanical or electronic
reproduction expenses in connection with Lender's rights of inspection
under this Agreement or any other Loan Document or in connection with
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any service utilized by Lender to perform such functions; (iv)
expenses in connection with the documentation, negotiation and closing
of the Loans, including without limitation title insurance charges and
escrow fees (including any and all amendments or waivers with respect
hereto), (v) the fees, costs and expenses for attorneys and paralegals
(A) incurred by Lender in connection with the documentation,
negotiation and Closing of the Loans described herein, or incurred by
Lender in connection with any and all amendments or waivers with
respect thereto entered into at or after the Closing of the Loans, and
the enforcement of Lender's rights hereunder and under the other Loan
Documents, (B) incurred by the Lender in connection with any suit by
or involving the Lender in enforcing or defending this Agreement or
any portion hereof, including without limitation, attorneys' and
paralegals' fees and costs incurred in connection with appellate
proceedings in any appeals court, and (C) incurred by the Lender
obtaining advice and legal services with respect to drafting,
negotiating, amending, restating, restructuring, terminating,
enforcing or defending this Agreement, or any portion hereof or any of
the other Loan Documents, whether or not suit is brought. All such
Out-of-Pocket Fees and Costs shall be part of the Obligations, payable
on demand.
2.7 PAYMENT DATES.
Any payment due under this Agreement on any day other than a Business Day
shall be due on the next succeeding Business Day, and such payment shall bear
interest in accordance herewith until actually received.
2.8 INTENTIONALLY DELETED.
2.9 RENEWALS; CONVERSION AND CONTINUATION OF LOANS.
(a) Upon maturity of any Eurodollar Loan, the Borrower may renew all or
any part of any Eurodollar Loan to it from Lender with a Loan of the
same or a different type from Lender, subject to the conditions and
limitations set forth herein and elsewhere in this Agreement. Any
Eurodollar Loan or part thereof so renewed shall be deemed to be
repaid in accordance with this Section 2 with the proceeds of a new
borrowing hereunder and the proceeds of the new Loan, to the extent
such proceeds do not exceed the principal amount of the Eurodollar
Loan being renewed, shall not be paid by the Lender to Borrower.
Nothing in this Section 2.9(a) shall be deemed a limitation on the
Borrower's obligations under Section 2.3(a) above.
(b) The Borrower shall have the right at any time, upon notice to the
Lender given in the manner and at the times specified in this
Agreement with respect to the Loans into which conversion or
continuation is to be made, to convert its Eurodollar Loans into
Reference Rate Loans, to convert its Reference Rate Loans into
Eurodollar Loans (specifying the Interest Period to be applicable
thereto), to convert the Interest Period applicable to any of its
Eurodollar Loans to another permissible Interest Period, and to
continue any of its Eurodollar Loans into a subsequent Interest Period
of any permissible duration, subject to the terms and conditions of
this Agreement, and to the following:
(i) each conversion shall be effected by Lender by applying the
proceeds of the new Reference Rate Loan or Eurodollar Loan, as
the case may be, to the Reference Rate Loan or Eurodollar Loan
(or portion thereof) being converted; accrued interest on a Loan
(or portion thereof) being converted or continued shall be paid
by the Borrower at the time of conversion or continuation; and
(ii) If any Eurodollar Loan is converted at any time other than the
end of an Interest Period applicable thereto, the Borrower shall
make such payments associated therewith as are required pursuant
to Section 2.10 at the time such Eurodollar Loan shall be
converted to a Reference Rate Loan.
The Interest Period applicable to any Eurodollar Loan resulting from a
conversion or continuation shall be specified by the Borrower in the notice of
conversion or continuation delivered pursuant to this provided, however, that if
no such Interest Period shall be specified, the Borrower shall be deemed to have
selected an Interest Period of one month's duration.
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2.10 INDEMNITY.
The Borrower shall indemnify the Lender against any loss, fee, claim,
damage, liability or expense which the Lender may sustain or incur as a
consequence of (i) any failure by the Borrower to fulfill on the date of any
borrowing of a Eurodollar Loan hereunder the applicable conditions set forth in
this Agreement, (ii) any failure by the Borrower to borrow hereunder after
notice of borrowing pursuant to this Agreement has been given, (iii) any
payment, prepayment or conversion of a Eurodollar Loan required by any provision
of this Agreement, or otherwise made on a date other than the last day of the
applicable Interest Period, or (iv) the occurrence of any Event of Default,
including, but not limited to, any loss or expense sustained or incurred or to
be sustained or incurred in liquidating or employing deposits from third parties
acquired to effect or maintain such Loan or any part thereof as a Eurodollar
Loan. Such loss or expense shall include, without limitation, an amount equal to
the excess, if any, as reasonably determined by the Lender of its cost of
obtaining the funds for the Eurodollar Loan being paid, prepaid or converted or
not borrowed (based on the Libor Rate applicable thereto) for the period from
the date of such payment, prepayment or conversion or failure to borrow to the
last day of the Interest Period for such Eurodollar Loan (or, in the case of a
failure to borrow, the Interest Period for such Eurodollar Loan which would have
commenced on the date of such failure to borrow) over the amount of interest (as
reasonably determined by the Lender) that could be realized by the Lender in
re-employing during such period the funds so paid, prepaid or converted or not
borrowed. A certificate of the Lender setting forth any amount or amounts which
the Lender is entitled to receive pursuant to this Section 2.10 shall be
conclusive absent manifest error.
2.11 CHANGE IN LEGALITY.
(a) Notwithstanding anything to the contrary herein contained, if any
change in any law or regulation or in the interpretation thereof by
any governmental authority charged with the administration or
interpretation thereof shall make it unlawful for the Lender to make
or maintain any Eurodollar Loan or to give effect to its obligations
as contemplated hereby (an "Illegality"), or if the Lender determines
that maintenance of Eurodollar Loans would cause the Lender to
implement or modify any reserve, special deposit or assessment or
other requirement, or impose any other condition on the Lender
affecting the Loans (each of the foregoing circumstances called a
"Regulatory Action"), then, by written notice to the Borrower, the
Lender shall:
(i) declare that Eurodollar Loans will not thereafter be made by the
Lender hereunder, whereupon the Borrower shall be prohibited from
requesting Eurodollar Loans from the Lender hereunder unless such
declaration is subsequently withdrawn; provided, however, that if
after the date of any such declaration there shall occur any
change in law or regulation or in the interpretation thereof by
any government authority charged with the administration or
interpretation thereof that shall eliminate such Illegality, the
Lender shall as promptly as reasonably practicable notify the
Borrower of such occurrence and withdraw such declaration; and
(ii) require that all outstanding Eurodollar Loans made by the Lender
be converted to Reference Rate Loans, in which event (1) all such
Eurodollar Loans shall be automatically converted to Reference
Rate Loans as of the effective date of such notice as provided in
paragraph (b) below and, (2) all payments and prepayments of
principal which would otherwise have been applied to repay the
converted Eurodollar Loans shall instead be applied to repay the
Reference Rate Loans resulting from the conversion of such
Eurodollar Loans.
(b) for purposes of this Section 2.11 a notice to the Borrower by the
Lender pursuant to paragraph (a) above shall be effective on the date
of receipt by the Borrower.
2.12 UNAVAILABILITY OF DEPOSITS OR INABILITY TO ASCERTAIN, OR INADEQUACY OF
LIBOR RATE.
If on or prior to the first day of any Interest Period for any Borrowing of
Eurodollar Loans, the Lender advises the Borrower that deposits in United States
Dollars (in the applicable amounts) are not being offered to it in the off-shore
U.S. Dollar interbank market for such Interest Period, whereupon until the
Lender notifies the Borrower that the circumstances giving rise to such
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suspension no longer exist, the obligations of the Lender to make Eurodollar
Loans shall be suspended without liability to the Lender.
2.13 INCREASED COST AND REDUCED RETURN.
(a) If on or after the date hereof, the adoption of any applicable law,
rule or regulation, or any change therein, 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 the Lender
with any request or directive (whether or not having the force of law)
of any such authority, central bank or comparable agency:
(i) shall subject the Lender to any tax, duty or other charge with
respect to its Eurodollar Loans, its Note or its obligation to
make Eurodollar Loans, or shall change the basis of taxation of
payments to the Lender of the principal of or interest on its
Eurodollar Loans or any other amounts due under this Agreement in
respect of its Eurodollar Loans or its obligation to make
Eurodollar Loans (except for changes in the rate of tax on the
overall net income of the Lender imposed by the jurisdiction in
which the Lender's principal executive office is located);
(ii) shall impose, modify or deem applicable any reserve, special
deposit or similar requirement (including, without limitation,
any such requirement imposed by the Board of Governors of the
Federal Reserve System, against assets of, deposits with or for
the account of, or credit extended by, the Lender or shall impose
on the Lender or on the interbank market any other condition
affecting its Eurodollar Loans, its Note or its obligation to
make Eurodollar Loans; or
(iii)shall impose on the Lender any other condition affecting the
Loans;
and the result of any of the foregoing is to increase the cost to the Lender of
making or maintaining any Eurodollar Loan, or to reduce the amount of any sum
received or receivable by the Lender under this Agreement or under its Note with
respect thereto, by an amount deemed reasonably and in good faith by the Lender
to be material, then, Borrower shall, within fifteen (15) days after demand by
the Lender, be obligated to pay the Lender such additional amount or amounts as
will compensate the Lender for such increased cost or reduction (computed
commencing on the effective date of any event mentioned herein). The Lender
agrees to use its best efforts to give the Borrower notice of the occurrence of
any event mentioned herein. In addition, the Lender may, upon notice to the
Borrower, elect to increase the interest rate applicable to all Eurodollar Loans
made subsequent thereto, to compensate the Lender for such increased cost or
reduced yield.
2.14 DISCRETION OF THE LENDER AS TO MANNER OF FUNDING.
Notwithstanding any other provision of this Agreement, the Lender shall be
entitled to fund and maintain its funding of all or any part of its Loans in any
manner it sees fit, it being understood, however, that for the purposes of this
Agreement all determinations hereunder shall be made as if the Lender had
actually funded and maintained each Eurodollar Loan through the purchase of
deposits in the interbank market having a maturity corresponding to such
Eurodollar Loan's Interest Period and bearing an interest rate equal to the
Libor Rate for such Interest Period.
3. TERM OF THIS AGREEMENT; PREPAYMENTS; COLLATERAL SECURITY
3.1 TERM.
(a) This Agreement shall have a term commencing on the Effective Date and
expiring on the Termination Date.
(b) Notwithstanding the foregoing, upon the occurrence of an Event of
Default, the Lender may, in accordance with Section 11 of this
Agreement, terminate this Agreement, except that this Agreement shall
terminate automatically upon an Event of Default under Section 10.5 or
10.6.
(c) On the date of termination or expiration of this Agreement, all
Obligations owed by the Borrower shall become immediately due and
payable without notice or demand and shall be repaid in cash or by a
wire transfer of immediately available funds and the Lender's
Commitment shall terminate.
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3.2 PREPAYMENT; TERMINATION.
The Borrower may borrow, repay and reborrow Loans subject to the terms of
this Agreement. Subject to the terms of Section 2.10 of this Agreement and this
Section 3.2, Borrower may, at any time, on five (5) days written notice prior to
the end of any month, prepay in full the Loans and terminate this Agreement by
paying to the Lender, in cash or by a wire transfer of immediately available
funds, the Obligations. The Borrower may, at any time, on five (5) day's written
notice prior to the end of any month, elect to reduce the Maximum Facility in
increments of not less than $1,000,000. Upon receipt by the Lender of such
notice, the Maximum Facility shall be reduced by the requested increment
effective the first day of the month following the expiration of the notice
period. Notwithstanding any of the foregoing, the Lender shall not be obligated
to refund any portion of the facility fee described in Section 2.6(a) in the
event the Maximum Facility Amount is reduced as set forth in this Section 3.2.
3.3 MANDATORY PREPAYMENT.
In the event that at any time before the termination of this Agreement and
the repayment of all Obligations hereunder there exist any Net Offering
Proceeds, then subject to the terms of Section 2.10 of this Agreement and this
Section 3.3: (a) Borrower and Company shall, within two (2) business days after
receipt of any Net Offering Proceeds, prepay the Loans and any outstanding
Obligations to the extent of such Net Offering Proceeds; and (b) the Maximum
Facility Amount shall be permanently reduced dollar for dollar by the amount of
any Net Offering Proceeds, effective immediately upon receipt of same by
Borrower or Company. Notwithstanding any of the foregoing, the Lender shall not
be obligated to refund any portion of the facility fee described in Section
2.6(a) in the event the Maximum Facility Amount is reduced as set forth in this
Section 3.3.
3.4 COLLATERAL SECURITY.
The Obligations shall be secured by (i) a perfected first priority lien and
security interest to be held by Lender in the Indiana Property and Indiana
Property Lease, pursuant to the terms of the Mortgage, Assignment of Leases and
Rents and other Security Documents, and (ii) the Subsidiary Guaranty.
Notwithstanding the foregoing collateral, the Obligations are full recourse
obligations of the Borrower (with recourse to its partners limited to the extent
provided in Section 19 below) and, to the extent provided in the Subsidiary
Guaranty, of the Guarantor Subsidiaries.
4. CONDITIONS PRECEDENT
4.1 CLOSING; CONDITIONS TO INITIAL LOAN AND CLOSING.
The initial Loan shall be made upon the Effective Date hereunder at the
offices of the Lender's counsel ("Closing"). In addition to those conditions set
forth hereunder with respect to all Loans hereunder, prior to or
contemporaneously with the making of the initial Loan hereunder, the Lender
shall be satisfied that all of the following conditions precedent shall have
been satisfied in a manner satisfactory to the Lender.
(a) No Material Adverse Change.
There shall have been (as determined by the Lender in its sole
discretion) (i) no Material Adverse Change since September 30, 1997
which has occurred in the operations (financial or otherwise) of the
Borrower, Company or their Subsidiaries, and (ii) no material
litigation or claims that have occurred which would have a Material
Adverse Effect.
(b) Required Documents.
The Lender shall have received all of the following documents, each in
form and substance satisfactory to the Lender and its counsel, duly
executed and dated the Effective Date (or such other date prior
thereto as shall be satisfactory to the Lender):
(i) Agreement. Multiple copies of this Agreement as requested by the
Lender.
(ii) Note. The Note payable to the Lender.
(iii)Subsidiary Guaranty. The Subsidiary Guaranty executed and
delivered by the Guarantor Subsidiaries.
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(iv) Mortgage, Assignment of Leases and Rents and other Security
Documents executed and delivered by Mortgagor.
(v) Initial Draw Request. A written request for the initial Loan from
the Borrower in form and substance reasonably acceptable to the
Lender, with such supporting documentation as the Lender may
request in its sole discretion.
(vi) Certified Copies of Organizational Documents; Good Standing
Certificates. (a) A Certificate of the Borrower to which there
shall be attached true, correct and complete copies of the
Borrower's Limited Partnership Agreement and its Certificate of
Limited Partnership, certified as of a recent date by the
Secretary of State for the State of Delaware, (b) Certificates of
Good Standing for the Borrower from the Secretary of State for
the State of Delaware and each State in which the Borrower is
qualified to do business as a foreign limited partnership, (c) a
copy of the Company's Declaration of Trust certified by the
Maryland Secretary of State, (d) Certificates of Good Standing
for the Company from the State of Maryland and each State in
which the Company is qualified to do business as a foreign trust,
and (e) certificates of good standing and certified copies of the
partnership agreements, certificates of limited partnership,
Articles of Incorporation and By-Laws and/or Articles of
organization and operating agreements with respect to each of the
Guarantor Subsidiaries, including without limitation, the
Mortgagor.
(vii)Authority. All action on the part of the Borrower and the
Company necessary for the valid execution, delivery and
performance by the Borrower, the Company and each of the
Guarantor Subsidiaries, including Mortgagor, of this Agreement
and the other Loan Documents to which it is or is to become a
party shall have been duly and effectively taken, and evidence
thereof satisfactory to the Lender shall have been provided to
the Lender.
(viii)Incumbency Certificate; Authorized Signers. The Lender shall
have received from the Company an incumbency certificate, dated
as of the Effective Date, signed by a duly authorized officer of
the Company and giving the name and bearing a specimen signature
of each individual who shall be authorized: (a) to sign, in the
name and on behalf of the Company (in its own capacity and as
general partner on behalf of the Borrower and on behalf of each
Guarantor Subsidiary which is a partnership or limited liability
company ), each of the Loan Documents to which the Borrower, the
Company or any Guarantor Subsidiary is or is to become a party;
(b) to make loan requests and conversion requests; and (c) to
give notices and to take other action on behalf of the Borrower
under the Loan Documents.
(ix) Legal Opinion. Legal opinions of Winston & Xxxxxx, special
counsel for the Borrower and Company, Maryland counsel, Tennessee
counsel and Indiana counsel.
(x) Officer's Certificate. A certificate executed by the chief
executive officer or chief financial officer of the Company, as
general partner on behalf of the Borrower in his capacity as a
corporate officer, stating that to the best knowledge of such
officer after diligent inquiry and investigation no Event of
Default or Potential Default has occurred and is continuing.
(xi) The Lender shall have received the facility fee pursuant to
Section 2.6(a) hereof.
(xii)The Borrower shall deliver to Lender a copy of all "Loan
Documents" (as defined in the Bank Boston Credit Agreement)
delivered by the Borrower, the Company and the Guarantor
Subsidiaries in connection with the Bank Boston Credit Agreement
which are requested by the Lender.
(xiii)Consent of the Agent and Lenders (as such terms are defined in
the Bank Boston Credit Agreement) as may be required under the
Bank Boston Credit Agreement to any matters related to the Loans
and Loan Documents which require consent of the Agent and/or the
Lenders under the Bank Boston Credit Agreement.
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(xiv)Lender's title insurance policy and a survey regarding the
Indiana Property in form and substance satisfactory to Lender.
(xv) A copy of the Indiana Property Lease, certified as true and
complete by the Borrower.
(xvi)Tenant Estoppel Certificate addressed to Lender, from the tenant
under the Indiana Property Lease, in form and substance
satisfactory to Lender.
(xvii) Reliance letters addressed to Lender for the environmental and
engineering reports regarding the Indiana Property previously
delivered to Lender.
(xviii)Evidence of insurance regarding the Indiana Property naming
Lender as mortgagee and loss payee and otherwise in form
satisfactory to Lender.
(xix)Other. Such other documents as the Lender shall reasonably
request.
(c) Out-of-Pocket Fees and Costs. The Lender shall have received
reimbursement for all Out-of-Pocket Fees and Costs which then have
been paid or accrued by the Lender, and Lender shall advise Borrower
as to the amount of the same.
4.2 CONDITION TO ALL LOANS.
Notwithstanding any other provisions contained in this Agreement, the
making of each Loan provided for in this Agreement shall be conditioned upon the
satisfaction of the matters set forth in this Section 4.2, and each request by
the Borrower for a Loan shall constitute a representation to the Lender that
each such condition set forth below has been met or satisfied.
(a) Warranties and Representations.
All of the warranties and representations contained in this Agreement
or any other Loan Document shall be true and correct in all material
respects on and as of the date of such Loan as if made on such date
and each request for a Loan shall constitute an affirmation by the
Borrower that such warranties and representations are then true and
correct in all material respects.
(b) No Default.
As determined by the Lender in its reasonable discretion, no Potential
Default shall have occurred or will result from such Loan and no Event
of Default shall have occurred which shall be an Uncured Default or
will result from such Loan.
(c) No Litigation.
(i) Except as set forth on Schedule 5.7 no litigation, investigation
or proceeding before any court or other governmental authority shall
be pending or threatened against the Borrower, the Company or any of
their respective Subsidiaries, including Mortgagor, or any officer,
director, or employee of the Borrower, the Company or any of their
respective Subsidiaries, including Mortgagor, which, in the reasonable
opinion of the Lender, is likely to have a Material Adverse Effect;
and (ii) no injunction, writ, restraining order, judgment, decree, or
other order of any nature which could reasonably have a Material
Adverse Effect shall have been issued or threatened by any court or
other governmental authority.
(d) Other Requirements and Other Documents.
The Lender shall have received, in form and substance reasonably
satisfactory to Lender, all certificates, orders, authorizations,
consents, affidavits, schedules, instruments and other documents which
are provided for hereunder, or which the Lender may at any time
reasonably request, including, without limitation, an Officer's
Certificate as set forth in Subsection 4.1(b)(x) above.
5. GENERAL CONTINUING WARRANTIES AND REPRESENTATIONS.
As of the Effective Date and as of the date hereof, the Borrower warrants and
represents to Lender as follows, and to the extent that the following warranties
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and representations relate to the Company, the Company represents and warrants
to Lender as follows:
5.1 OFFICE.
The chief executive office or principal place of business of the Borrower
is at the address indicated in Section 14 hereof and the Borrower covenants and
agrees that it will not, during the term of this Agreement, without prior
written notification to the Lender, relocate such chief executive office or
principal place of business.
5.2 EXISTENCE.
The Borrower is a limited partnership, duly formed and validly existing as
a limited partnership under the laws of the State of Delaware and has all powers
and all material governmental licenses, authorizations, consents and approvals
required to own its property and assets and carry on its business as now
conducted or as it presently proposes to conduct and has been duly qualified and
is in good standing in every jurisdiction in which the failure to be so
qualified and/or in good standing is likely to have a Material Adverse Effect.
Company is a real estate investment trust, duly formed, validly existing and in
good standing as a real estate investment trust under the laws of the State of
Maryland and has all powers and all material governmental licenses,
authorizations, consents and approvals required to own its property and assets
and carry on its business as now conducted or as it presently proposes to
conduct and has been duly qualified and is in good standing in every
jurisdiction in which the failure to be so qualified and/or in good standing is
likely to have a Material Adverse Effect. Mortgagor is a limited liability
company, duly formed and existing as a limited liability company under the laws
of the State of Delaware and has all powers and all material governmental
licenses, authorizations, consents and approvals required to own its property
and assets and carry on its business as now conducted or as it presently
proposes to conduct and has been duly qualified and is in good standing in every
jurisdiction in which the failure to be so qualified and/or in good standing is
likely to have a Material Adverse Effect.
5.3 AUTHORITY.
The Borrower has the partnership power and authority to execute, deliver
and carry out the terms and provisions of each of the Loan Documents to which it
is a party and has taken all necessary partnership action, if any, to authorize
the execution and delivery on behalf of the Borrower and the performance by the
Borrower of such Loan Documents. The Borrower, the Company and the Guarantor
Subsidiaries, including Mortgagor, each have duly executed and delivered each
Loan Document to which it is a party in accordance with the terms of this
Agreement, and each such Loan Document constitutes the legal, valid and binding
obligation of the Borrower, the Company and each Guarantor Subsidiary, including
Mortgagor, enforceable in accordance with its terms, except as enforceability
may be limited by applicable insolvency, bankruptcy or other laws affecting
creditors rights generally, or general principles of equity, whether such
enforceability is considered in a proceeding in equity or at law. The Company
and each Guarantor Subsidiary, including Mortgagor, has the power and authority
to execute, deliver and carry out the terms and provisions of each of the Loan
Documents to which it is a party and has taken all necessary action to authorize
the execution, delivery and performance of such Loan Documents. The Company has
the power and authority to execute, deliver and carry out the terms and
provisions of each of the Loan Documents on behalf of the Borrower to which the
Borrower is a party and has taken all necessary action to authorize the
execution and delivery on behalf of the Borrower and the performance by the
Borrower of such Loan Documents.
5.4 NO BREACH.
(a) Neither the execution, delivery or performance by or on behalf of the
Borrower of the Loan Documents to which it is a party, nor compliance by the
Borrower with the terms and provisions thereof nor the consummation of the
transactions contemplated by the Loan Documents, (i) will contravene any
provision of any law, statute, rule, regulation, order, writ, injunction or
decree of any court or governmental instrumentality, as applicable to the
Borrower, (ii) will materially conflict with or result in any breach of, any of
the terms, covenants, conditions or provisions of, or constitute a default
under, or result in the creation or imposition of (or the obligation to create
or impose) any Lien upon any of the property or assets of the Borrower or any of
its Subsidiaries pursuant to the terms of any indenture, mortgage, deed of
trust, or other agreement or other instrument, including, without limitation,
the Bank Boston Credit Agreement, to which the Borrower (or of any partnership
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of which the Borrower is a partner) or any of its Subsidiaries is a party or by
which it or any of its property or assets is bound or to which it is subject
(except for such breaches and defaults under loan agreements which the lenders
thereunder have agreed to forbear pursuant to valid forbearance agreements), or
(iii) will cause a default by the Borrower under any organizational document of
any Person in which the Borrower has an interest, or cause a default under the
Borrower's agreement or certificate of limited partnership, the consequences of
which conflict, breach or default would have a Material Adverse Effect, or
result in or require the creation or imposition of any Lien whatsoever upon any
property.
(b) Neither the execution, delivery or performance by the Company or the
Guarantor Subsidiaries (including without limitation, Mortgagor) of the Loan
Documents to which they are a party, nor compliance by the Company or the
Guarantor Subsidiaries with the terms and provisions thereof nor the
consummation of the transactions contemplated by the Loan Documents to which any
of them are a party, (i) will contravene any provision of any law, statute,
rule, regulation, order, writ, injunction or decree of any court or governmental
instrumentality, as applicable to the Company or the Guarantor Subsidiaries (ii)
will materially conflict with or result in any breach of, any of the terms,
covenants, conditions or provisions of, or constitute a default under, or result
in the creation or imposition of (or the obligation to create or impose) any
Lien upon any of the property or assets of the Company, any Guarantor Subsidiary
or any of their respective Subsidiaries pursuant to the terms of any indenture,
mortgage, deed of trust, or other agreement or other instrument to which the
Company (or of any partnership of which the Company is a partner), any Guarantor
Subsidiary or any of their respective Subsidiaries is a party or by which any of
them or any of their respective property or assets is bound or to which any of
them are subject (except for such breaches and defaults under loan agreements
which the lenders thereunder have agreed to forbear pursuant to valid
forbearance agreements), or (iii) will cause a default by the Company or any
Guarantor Subsidiary under any organizational document of any Person in which
the Company or any Guarantor Subsidiary has an interest, the consequences of
which conflict, breach or default would have a Material Adverse Effect, or
result in or require the creation or imposition of any Lien whatsoever upon any
property.
5.5 SOLVENCY.
On the Effective Date both prior to and after the transactions contemplated
in connection with the Closing, and at all times thereafter, the Fair Value of
the Borrower's assets is and shall be greater than its liabilities; the Borrower
is and shall be able to pay its debts as they mature and the Borrower does not
and will not have an unreasonably small amount of capital. The Borrower has and
at all times hereafter will have sufficient capital to carry on its business and
transactions as now conducted and as planned to be conducted in the future.
5.6 COMPLIANCE WITH LAWS.
The Borrower, the Company and each Guarantor Subsidiary (including without
limitation, Mortgagor) is in compliance in all respects with all applicable
Laws, including without limitation, Laws imposed by any Regulatory Agencies or
other governmental authority, including but not limited to the Securities Act of
1933, the Securities Exchange Act of 1934, the Fair Labor Standards Act,
Environmental Laws, laws relating to income, unemployment, payroll or social
security taxes and employee benefit plans (as defined in Section 3(3) of ERISA)
as required by ERISA, except for those laws, rules and regulations the violation
of which would not have a Material Adverse Effect.
5.7 ACTIONS OR PROCEEDINGS.
Except as disclosed on Schedule 5.7, there are no actions or proceedings
pending by or against the Borrower, the Company or any Guarantor Subsidiary
(including without limitation, Mortgagor) before any court, administrative
agency or other governmental entity including, without limitation, any
Regulatory Agency which could have a Material Adverse Effect and the Borrower
and Company have no knowledge of any pending, threatened or imminent litigation,
governmental investigations or claims, complaints, actions or prosecutions
involving the Borrower, the Company or any Guarantor Subsidiary (including,
without limitation, Mortgagor), or any breaches by the Borrower, Company,
Mortgagor or any other Person of any agreement to which the Borrower, Company,
or Mortgagor is a party, except for actions, proceedings, litigation,
investigations, claims, complaints, actions, prosecutions and breaches that
would not have a Material Adverse Effect.
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5.8 TRADEMARKS, LICENSES, ETC.
Borrower, Company and each Guarantor Subsidiary (including, without
limitation, Mortgagor) owns or possesses rights to use all licenses, patents,
patent applications, copyrights, service marks, trademarks and trade names
required to continue to conduct its business as heretofore or presently
conducted. All such licenses, patents, patent applications, copyright
registrations, service marks, trademarks and trade names are listed on Schedule
5.8. To the best of the Borrower's knowledge, after diligent inquiry, no such
license or trademark has been declared invalid, been limited by order of any
governmental authority or by agreement, or is the subject of any infringement,
interference or similar proceeding or challenge, except for those licenses or
trademarks which if challenged, limited or rendered invalid, would not have a
Material Adverse Effect.
5.9 FINANCIAL STATEMENTS.
All financial statements relating to the Borrower, Company and the
Guarantor Subsidiaries which have been or may hereafter be delivered by the
Borrower to the Lender fairly present the financial condition of the Borrower,
Company and their Subsidiaries and have been prepared in accordance with
Generally Accepted Accounting Principles, subject to year-end adjustments and
the absence of footnotes with respect to interim financial statements, and there
has been no material adverse change in the financial condition of the Borrower,
Company and the Guarantor Subsidiaries (including without limitation,
Mortgagor), either individually or on a consolidated basis, since the submission
of such financial information to the Lender.
5.10 CONDUCT OF BUSINESS.
Since September 30, 1997, except as set forth in the Equity Prospectus or
as set forth in Schedule 5.10, neither the Borrower nor the Company has: (i)
incurred any debts, obligations, or liabilities (absolute, accrued, or
contingent and whether due or to become due) except current liabilities incurred
in the ordinary course of business, none of which (individually or in the
aggregate) materially and adversely affects the business or properties of the
Borrower; (ii) paid any obligation or liability other than current liabilities
in the ordinary course of business, or discharged or satisfied any liens or
encumbrances other than those securing current liabilities, in each case in the
ordinary course of business; (iii) declared or made any payment to or
distribution to its partners as such, or obligated itself to do so; (iv)
mortgaged, pledged, or subjected to any Lien any of its assets (tangible or
intangible); (v) sold, transferred or leased any of its assets except in the
usual and ordinary course of business; (vi) suffered any physical damage,
destruction or loss (whether or not covered by insurance) materially and
adversely affecting the properties or business of the Borrower; (vii) entered
into any transaction other than in the usual and ordinary course of business and
other than as contemplated hereby; (viii) encountered any labor difficulties or
labor union organizing activities; (ix) issued or sold any securities or granted
any options or similar rights with respect thereto other than pursuant hereto;
or (x) agreed to do any of the foregoing other than pursuant hereto. There has
been no Material Adverse Change in the business, financial condition, operations
or results of operations of either the Borrower or the Company since September
30, 1997.
5.11 ENVIRONMENTAL COMPLIANCE.
The Borrower has delivered to the Lender the Environmental Reports with
respect to the Mortgaged Properties, which are listed on Schedule 5.11. Except
as may be set forth in the Environmental Reports with respect to the Mortgaged
Properties, or as described on Schedule 5.11 or in the Equity Prospectus with
respect to the other Real Estate Assets, Borrower makes the following
representations and warranties:
(a) To the best of Borrower's knowledge, none of the Borrower, the Company,
any of the Guarantor Subsidiaries (including, without limitation, Mortgagor) or
any operator of the Real Estate or any portion thereof, or any operations
thereon is in violation, or alleged material violation, of any judgment, decree,
order, law, license, rule or regulation pertaining to environmental matters,
including without limitation, those arising under the Resource Conservation and
Recovery Act ("RCRA"), the Comprehensive Environmental Response, Compensation
and Liability Act of 1980 as amended ("CERCLA"), the Superfund Amendments and
Reauthorization Act of 1986 ("XXXX"), the Federal Clean Water Act, the Federal
Clean Air Act, the Toxic Substances Control Act, or any state or local statute,
regulation, ordinance, order or decree relating to health, safety or the
environment, including, without limitation, the environmental statutes,
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regulations, orders and decrees of the States in which any of the Real Estate
may be located (hereinafter collectively referred to as the "Environmental
Laws"), which violation either involves the Mortgaged Properties, or would have
a Material Adverse Effect.
(b) None of the Borrower, the Company or the Guarantor Subsidiaries
(including, without limitation, Mortgagor) has received written notice from any
third party including, without limitation any federal, state or local
governmental authority with respect to any of the Mortgaged Properties, or with
respect to any other Real Estate if the same would have a Material Adverse
Effect, (i) that it has been identified by the United States Environmental
Protection Agency ("EPA") as a potentially responsible party under CERCLA with
respect to a site listed on the National Priorities List, 40 C.F.R. Part 000
Xxxxxxxx X (1986); (ii) that any hazardous waste, as defined by 42 U.S.C. ss
9601(5), any hazardous substances as defined by 42 U.S.C. ss 9601(14), any
pollutant or contaminant as defined by 42 U.S.C. ss 9601(33) or any toxic
substances, oil or hazardous materials or other chemicals or substances
regulated by any Environmental Laws ("Hazardous Materials") which it has
generated, transported or disposed of have been found at any site at which a
federal, state or local agency or other third party has conducted or has ordered
that the Borrower, the Company or any of the Guarantor Subsidiaries (including,
without limitation, Mortgagor) conduct a remedial investigation, removal or
other response action pursuant to any Environmental Law; or (iii) that it is or
shall be a named party to any claim, action, cause of action, complaint, or
legal or administrative proceeding (in each case, contingent or otherwise)
arising out of any third party's incurrence of costs, expenses, losses or
damages of any kind whatsoever in connection with the release of Hazardous
Materials.
(c) (i) To the best of Borrower's knowledge no portion of the Real Estate
has been used for the handling, processing, storage or disposal of Hazardous
Materials except in material compliance with applicable Environmental Laws; and
no underground tank or other underground storage receptacle for Hazardous
Materials is located on any portion of the Real Estate except in material
compliance with applicable Environmental Laws; (ii) to the best of Borrower's
knowledge, in the course of any activities conducted by the Borrower, the
Company, any of the Guarantor Subsidiaries or the operators of any Real Estate,
any ground or space tenants on any Real Estate, no Hazardous Materials have been
generated or are being used on the Real Estate except in material compliance
with applicable Environmental Laws, which in the case of Real Estate other than
the Mortgaged Properties would have a Material Adverse Effect; (iii) there has
been no present, or to the best of Borrower's knowledge past, releasing,
spilling, leaking, pumping, pouring, emitting, emptying, discharging, injecting,
escaping, disposing or dumping (a "Release") or threatened Release of Hazardous
Materials on, upon, into or from the Mortgaged Properties, or the other Real
Estate, which Release in the case of Real Estate other than the Mortgaged
Properties would have a Material Adverse Effect and; (iv) to the best of
Borrower's knowledge, there have been no Releases on, upon, from or into any
real property in the vicinity of any of the Real Estate which, through soil or
groundwater contamination, may have come to be located on, and which would have
a Material Adverse Effect; and (v) notwithstanding that any representation
contained herein may be limited to the knowledge of the Borrower, any such
limitation shall not affect the covenants specified in Section 7.11 or elsewhere
in this Agreement.
5.12 PERMITS AND LICENSES.
To the best of the Borrower's knowledge after diligent inquiry, the
Borrower, the Company and each of the Guarantor Subsidiaries (including without
limitation, Mortgagor) has been and is current and in good standing with respect
to all governmental approvals, permits, certificates, licenses, inspections,
consents and franchises (collectively, the "Licenses") necessary to continue to
conduct its business and to own or lease and operate its properties as
heretofore conducted, owned, leased or operated, except where failure to hold or
maintain such Licenses would not have a Material Adverse Effect.
5.13 ERISA.
To the best of the Borrower's knowledge after diligent inquiry: neither the
Borrower, the Company, any ERISA Affiliate of the Borrower or the Company, nor
any Benefit Plan is in violation in any material respect of any of the
provisions of ERISA or any of the qualification requirements of Section 401(a)
of the IRC; no material Prohibited Transaction or Reportable Event has occurred
with respect to any Benefit Plan, nor has any Benefit Plan been the subject of a
waiver of the minimum funding standard under Section 412 of the IRC; nor has any
Benefit Plan experienced an accumulated funding deficiency under Section 412 of
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the IRC; nor has any lien been imposed upon the Borrower or any ERISA Affiliate
of the Borrower under Section 412(n) of the IRC; nor has any Benefit Plan been
amended in such a way that the security requirements of Section 401(a)(29) of
the IRC apply; no notice of intent to terminate a Benefit Plan has been
distributed to affected parties or filed with the PBGC under Section 4041(c) of
ERISA, nor has any Benefit Plan been terminated under Section 4041(e) of ERISA;
the PBGC has not instituted proceedings to terminate, or appoint a trustee to
administer, a Benefit Plan and no event has occurred or condition exists which
might constitute grounds under Section 4042 of ERISA for the termination of, or
the appointment of a trustee to administer, any Benefit Plan; neither the
Borrower nor any ERISA Affiliate of the Borrower would be liable for any amount
pursuant to Sections 4062, 4063 or 4064 of ERISA if all Benefit Plans terminated
as of the most recent valuation dates of such Benefit Plans; neither the
Borrower nor any ERISA Affiliate of the Borrower maintains any employee welfare
benefit plan, as defined in Section 3(1) of ERISA, which provides any benefits
to an employee or the employee's dependents with respect to claims incurred
after the employee separates from service other than is required by applicable
law; and neither the Borrower nor any ERISA Affiliate of the Borrower has
incurred or expects to incur any withdrawal liability to any Multiemployer Plan.
5.14 INTENTIONALLY DELETED.
5.15 TAX OBLIGATIONS.
Borrower, the Company and each of the Guarantor Subsidiaries has
filed complete and correct federal, state and local tax reports and returns
required to be filed by it, prepared in accordance with any applicable laws or
regulations, and except for extensions duly obtained, has either duly paid all
taxes, duties and charges owed by it, or made adequate provision for the payment
thereof, unless the Borrower, the Company or such Guarantor Subsidiary is
contesting in good faith, by appropriate proceedings, the validity, amount or
imposition of such tax, duty or charge while maintaining adequate reserves to
cover such tax, duty or charge and where such contest would not have a Material
Adverse Effect. There are no material unresolved questions or claims concerning
any tax liability of the Borrower, the Company or any of the Guarantor
Subsidiaries. None of the transactions contemplated hereby or under any
agreements referred to hereunder will result in any material tax liability for
the Borrower, the Company or any of the Guarantor Subsidiaries or result in any
other material adverse tax consequence for the Borrower, the Company or any of
the Guarantor Subsidiaries.
5.16 EMPLOYEE CONTROVERSIES.
There are no strikes, work stoppages or controversies pending or, to the
best of the Borrower's knowledge after diligent inquiry and investigation,
threatened, between either the Borrower, the Company or any of the Guarantor
Subsidiaries and any of their employees, other than employee grievances arising
in the ordinary course of business which will not, individually or in the
aggregate, have a Material Adverse Effect.
5.17 FULL DISCLOSURE.
To the best of Borrower's knowledge, this Agreement, the financial
statements delivered in connection herewith, and the representations and
warranties of the Borrower herein and in any other document delivered or to be
delivered by or on behalf of the Borrower, do not and will not contain any
untrue statement of a material fact or omit a material fact necessary to make
the statements contained therein or herein, in light of the circumstances under
which they were made, not misleading. To the best of Borrower's knowledge, there
is no material fact which the Borrower has not disclosed to the Lender in
writing which materially and adversely affects or, so far as the Borrower
reasonably foresees, could materially and adversely affect the assets, business,
prospects, profits, or condition (financial or otherwise) of the Borrower, or
Company, the rights of the Lender or the ability of the Borrower to perform this
Agreement.
5.18 BANK BOSTON CREDIT AGREEMENT.
The Bank Boston Credit Agreement attached hereto as Exhibit B is true,
correct and complete, is in full force and effect, and no Default or Event of
Default (as each such term is defined thereunder) has occurred and is
continuing, nor has any event which, with the passage of time or the giving of
notice, or both, could give rise to a Default or Event of Default under the Bank
Boston Credit Agreement (as each such term is defined thereunder). Except as set
forth in Exhibit B, the Bank Boston Credit Agreement has not been amended,
modified or supplemented.
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6. INCORPORATION OF NEGATIVE COVENANTS.
The Borrower covenants and agrees, and to the extent that the following
covenants relate to the Company, the Company covenants and agrees, that the
following covenants contained in the Bank Boston Credit Agreement shall be
incorporated herein by this reference, and made a part hereof, for all purposes,
as if more fully set forth herein and shall be for the direct benefit of Lender:
Sections 8.1, 8.2, 8.3, 8.4, 8.5, 8.6, 8.7 and 8.9 of the Bank Boston Credit
Agreement in the form attached hereto as Exhibit B.
6.1 INCORPORATION OF NEGATIVE COVENANTS.
The foregoing Sections 8.1, 8.2, 8.3, 8.4, 8.5, 8.6, 8.7 and 8.9 of the
Bank Boston Credit Agreement are by this reference hereby restated in their
entirety and incorporated herein respectively as Sections 6.2 through 6.9 hereof
and shall run to the direct benefit of Lender, and all references therein to
"Lenders", "Requisite Lenders", "Lead Lenders" or "Agent" shall be deemed to
instead mean the Lender hereunder.
6.10 INDEPENDENT ENFORCEMENT OF NEGATIVE COVENANTS BY THE LENDER.
The foregoing Sections 6.2 through 6.9 hereof shall be independent
obligations of the Borrower and, as applicable, the Company hereunder, and shall
be enforceable by the Lender hereunder notwithstanding (i) the termination,
maturity or further amendment, modification or renewal of the Bank of Boston
Credit Agreement, or (ii) the waiver of the Borrower's or Company's failure to
perform, keep or observe any of the foregoing affirmative covenants by the
"Agent", "Requisite Lenders", "Lead Lenders" or the "Lenders" (each as defined
in the Bank Boston Credit Agreement).
6.11 LEASES.
Neither Borrower nor Mortgagor will (i) enter into any Major Leases or (ii)
materially amend, supplement or otherwise materially modify, or terminate or
cancel, or accept the surrender of, or grant any material concessions to or
waive the material performance of any of the Major Tenants under the Major
Leases, in each case without the prior approval of Lender as provided in Section
7.20 below.
7. INCORPORATION OF AFFIRMATIVE COVENANTS - GENERAL.
The Borrower covenants and agrees, and to the extent that the following
covenants relate to the Company, the Company covenants and agrees, that the
following covenants contained in the Bank Boston Credit Agreement shall be
incorporated herein by this reference, and made a part hereof, for all purposes,
as if more fully set forth herein and shall be for the direct benefit of Lender:
Sections 7.1, 7.2, 7.3, 7.4, 7.5, 7.6, 7.7, 7.8, 7.9, 7.10, 7.14, 7.15, 7.16,
7.18, 7.19, 7.20 and 7.22 of the Bank Boston Credit Agreement in the form
attached hereto as Exhibit B.
7.1 INCORPORATION OF AFFIRMATIVE COVENANTS.
The foregoing Sections 7.1, 7.2, 7.3, 7.4, 7.5, 7.6, 7.7, 7.8, 7.9, 7.10,
7.14, 7.15, 7.16, 7.18, 7.19, 7.20 and 7.22 of the Bank Boston Credit Agreement
are by this reference hereby restated in their entirety and incorporated herein
respectively as Sections 7.2 through 7.18 hereof, and shall run to the direct
benefit of Lender, and all references therein to "Lenders", "Requisite Lenders",
"Lead Lenders" or "Agent" shall be deemed instead to mean the Lender hereunder.
7.19 INDEPENDENT ENFORCEMENT OF AFFIRMATIVE COVENANTS BY THE LENDER.
The foregoing Sections 7.2 through 7.18 hereof shall be independent
obligations of the Borrower and, as applicable, the Company hereunder, and shall
be enforceable by the Lender hereunder notwithstanding (i) the termination,
maturity or further amendment, modification or renewal of the Bank of Boston
Credit Agreement, or (ii) the waiver of the Borrower's or Company's failure to
perform, keep or observe any of the foregoing affirmative covenants by the
"Agent", "Requisite Lenders", "Lead Lenders" or the "Lenders" (each as defined
in the Bank Boston Credit Agreement).
7.20 USE OF PROCEEDS.
Subject to the provisions of Section 2.2 hereof, the proceeds of the Loans
shall be used by the Borrower for Permitted Acquisitions and Permitted
Developments, for refinancing other Indebtedness and for working capital and
other purposes consistent with the covenants contained herein.
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7.21 LEASES; LEASE APPROVALS.
Mortgagor will at all times exercise or enforce its material rights under
the Indiana Property Lease and any other leases for the Indiana Property. During
the continuance of an Event of Default, Lender shall have the right, and the
Borrower (on behalf of Mortgagor) hereby authorizes Lender, to communicate
directly with any of the tenants or guarantors for any purpose contemplated by
this Agreement or any of the Security Documents. Any proposed lease which would
be a Major Lease shall be submitted to and approved by Lender prior to
execution, along with the most recent financial statements of such proposed
tenant and any guarantor. The Mortgagor will not terminate, accept surrender of
or materially adversely amend the Indiana Property Lease or any other Major
Lease or release any Major Tenant or waive the material performance of a Major
Lease by a Major Tenant, in each case without prior approval of the Lender. The
Lender shall not unreasonably withhold its approval of any Major Lease or
amendment thereof. If Lender fails to respond within five (5) business days
after receipt of any proposed Major Lease or amendment of a Major Lease, the
same shall be deemed to be approved.
7.22 YEAR 2000 PROBLEM.
The Borrower shall promptly conduct a comprehensive review and assessment
of its computer applications and make inquiry of its property managers with
respect to the "Year 2000 Problem" (i.e., the risk that computer applications
may not be able to properly perform date-sensitive functions after December 31,
1999) and, based on that review and inquiry, take appropriate actions to assure
that the Year 2000 Problem will not result in a Material Adverse Effect.
8. AFFIRMATIVE COVENANTS - REPORTING.
Borrower shall furnish, or cause to be furnished to the Lender the
following:
8.1 REPORTS, COVENANT COMPLIANCE CERTIFICATES.
As soon as practicable, and in any event, within the time periods set forth
in Sections 7.4 and 7.5 of the Bank Boston Credit Agreement for delivery to the
Agent or Lenders thereunder, the Borrower shall provide the Lender with all
certificates, affidavits, financial statements, balance sheets, notices, reports
and other instruments described in Sections 7.4 and 7.5 of the Bank Boston
Credit Agreement in effect as of the date hereof, notwithstanding the
termination, maturity or further amendment, modification or renewal of the Bank
Boston Credit Agreement.
8.2 INTENTIONALLY DELETED.
8.3 OTHER INFORMATION AND CHANGES.
Borrower shall promptly supply the Lender with such other information
concerning its or its Subsidiaries' affairs as the Lender may reasonably request
from time to time hereafter, and shall promptly notify the Lender of any
material adverse change in the Borrower's or any Subsidiary's financial
condition and of any condition or event which constitutes a breach of or an
Event of Default under this Agreement.
8.4 CONFIDENTIALITY.
Lender understands that in the course of its exercise of the rights set
forth in this Section 8, the Lender may obtain information which relating to
Borrower or the Company or the Guarantor Subsidiaries which is confidential in
nature (the "Confidential Information"). Lender agrees that it will not, at any
time, divulge, publish or disclose, or authorize or permit any other person to
do so, to any other Person, any of the Confidential Information, provided,
however, that the Confidential Information may be disclosed by Lender (a) to its
officers, attorneys, and accountants, (b) to any Participant, (c) to any
regulator or other governmental agency with supervisory authority over the
business of Lender, (d) to any other Person to the extent required by applicable
law or regulation, and (e) to the extent that such Confidential Information is
otherwise publicly available from sources other than Lender.
9. COVENANTS - FINANCIAL.
The Borrower covenants and agrees that the following covenants contained in
the Bank Boston Credit Agreement shall be incorporated herein by this reference,
and made a part hereof, for all purposes, as if more fully set forth herein and
shall be for the direct benefit of Lender Sections 9.1, 9.2, 9.3, 9.4, 9.5 and
9.6 of the Bank Boston Credit Agreement in the form attached hereto as Exhibit
B.
-22-
9.1 INCORPORATION OF FINANCIAL COVENANTS.
The foregoing Sections 9.1, 9.2, 9.3, 9.4, 9.5 and 9.6 of the Bank Boston
Credit Agreement are by this reference hereby restated in their entirety and
incorporated herein respectively as Sections 9.2 through 9.7 hereof.
Notwithstanding anything to the contrary set forth in this Agreement the parties
hereto acknowledge and agree that the provisions of Section 9.4 of this
Agreement shall be deemed to have been amended effective as of September 30,
1998.
9.8 INDEPENDENT ENFORCEMENT OF FINANCIAL COVENANTS BY THE LENDER.
The foregoing Sections 9.2 through 9.7 hereof shall be independent
obligations of the Borrower hereunder, and shall be enforceable by the Lender
hereunder notwithstanding (i) the termination, maturity or further amendment,
modification or renewal of the Bank of Boston Credit Agreement, or (ii) the
waiver of the Borrower's failure to perform, keep or observe any of the
foregoing affirmative covenants by the "Agent", "Requisite Lenders", "Lead
Lenders" or the "Lenders" (each as defined in the Bank Boston Credit Agreement).
10. EVENTS OF DEFAULT.
Any one or more of the following shall constitute an Event of Default under
this Agreement:
10.1 PAYMENT.
If the Borrower fails to pay when due and payable or when declared due and
payable, all or any portion of the principal amount on any of the Loans owing to
the Lender, or if the Borrower fails to pay when due and payable or when
declared due and payable, all or any portion of the Obligations owning to the
Lender (other than payments of principal) within five (5) days after the same
shall be due and payable.
10.2 BREACH OF CERTAIN COVENANTS.
If the Borrower or Company shall fail to comply with any of their
respective covenants contained in Section 6, Section 7.6, the first sentence of
Section 7.7, the first sentence of Section 7.8 (with respect to the Indiana
Property), Section 7.17 or Section 9 hereof.
10.3 BREACH OF REPRESENTATION.
If any representation, warranty, statement, report, or certificate made or
delivered by the Borrower, the Company or any Guarantor Subsidiary, or any of
their officers, partners, employees or agents on behalf of the Borrower, the
Company or any Guarantor Subsidiary, to the Lender is false or misleading in any
material respect when made or deemed to be made.
10.4 ATTACHMENT OR LEVY.
If all or any of the Borrower's assets in excess of $5,000,000.00 in the
aggregate are attached, seized, subjected to a writ or distress warrant, or are
levied upon, or come into the possession of any Judicial Officer or assignee for
the benefit of creditors unless, with respect to any such assets, such
attachment, seizure, writ, warrant or levy shall be dismissed, released or
stayed within thirty (30) days of issuance thereof.
10.5 VOLUNTARY INSOLVENCY.
If an Insolvency Proceeding is commenced by the Borrower, the Company or
any Guarantor Subsidiary, including, without limitation, the Mortgagor.
10.6 INVOLUNTARY INSOLVENCY.
If an Insolvency Proceeding is commenced against the Borrower, the Company
or any of their Subsidiaries, including, without limitation, the Mortgagor,
except that if the Borrower, the Company or any Guarantor Subsidiary is
contesting such Proceeding in good faith, such Insolvency Proceeding shall not
constitute an Event of Default unless such Insolvency Proceeding is not
dismissed within ninety (90) days of the commencement of such Insolvency
Proceedings.
10.7 INJUNCTION.
If the Borrower, the Company or any Guarantor Subsidiary, including,
without limitation, the Mortgagor, is enjoined, restrained or in any way
-23-
prevented by court order from continuing to conduct all or any material part of
its business affairs.
10.8 GOVERNMENTAL LIEN.
If a notice of lien, levy or assessment in excess of $5,000,000.00 in the
aggregate, is filed of record with respect to any or all of the Borrower's, the
Company's or any Guarantor Subsidiary's assets by the United States Government,
or any department, agency or instrumentality thereof, or by any state, county,
municipal or other governmental agency, or if any taxes or debts owing at any
time hereafter to any one or more of such entities in excess of $5,000,000.00 in
the aggregate, becomes a Lien, whether xxxxxx or otherwise, upon any or all of
the Borrower's, the Company's or any Guarantor Subsidiary's assets and the same
is not paid on the payment date thereof.
10.9 JUDGMENT.
If a judgment or other claim in excess of $5,000,000.00 individually, or
$10,000,000.00 in the aggregate, becomes a Lien upon any or all of the
Borrower's, the Company's or any Guarantor Subsidiary's assets.
10.10 OTHER INDEBTEDNESS.
If there is a default in any agreement with respect to Indebtedness in
excess of $5,000,000.00 to which the Borrower, the Company or any Guarantor
Subsidiary is a party with another Person resulting in a right by such Person to
accelerate the maturity of such Indebtedness or to exercise any other right or
remedy.
10.11 BANK BOSTON CREDIT AGREEMENT.
If there is an 'Event of Default' under the Bank Boston Credit Agreement
(as such term is defined therein) which has not been waived or cured within the
time periods provided therein, if any.
10.12 ERISA REPORTABLE EVENT.
If (a) any Reportable Event which the Lender determines constitutes grounds
for the termination of any Benefit Plan by the PBGC or for the appointment by
the appropriate United States District Court of a trustee to administer any such
Plan, shall have occurred and be continuing thirty (30) days after written
notice of such determination shall have been given to the Borrower by the
Lender, or any such Benefit Plan shall be terminated within the meaning of Title
IV of ERISA, or a trustee shall be appointed by the appropriate United States
District Court to administer any such Plan, or the PBGC shall institute
proceedings to terminate any Benefit Plan; and (b) in case of any event
described above in this Section 10.12, the aggregate amount of the Borrower's
liability under Sections 4062, 4063 or 4064 of ERISA shall exceed one percent
(1%) of the Borrower's Total Equity Capital; or (c) there shall be a withdrawal
from any Multiemployer Plan as a result of which the aggregate amount of the
Borrower's liability in relation thereto shall exceed one percent (1%) of the
Borrower's Total Equity Capital.
10.13 BREACH OF COVENANTS.
If the Borrower, the Company or any Guarantor Subsidiary fails or neglects
to perform, keep or observe any term, provision, condition, covenant, agreement
contained in this Agreement (other than as set forth in any other subsection of
this Section 10), any other Loan Document, or any other present or future
agreement between the Borrower, the Company or any such Guarantor Subsidiary and
the Lender and/or evidencing and/or securing the Obligations, and such failure
remains unremedied for a period of thirty (30) days after written notice of such
breach from the Lender to the Borrower. Provided, however, that if the condition
or event giving rise to such breach is not reasonably capable of being cured
within such thirty (30) day period, Borrower shall be granted an additional
sixty (60) day period to cure the condition or event giving rise to the breach,
provided further that Borrower has commenced cure of such condition or event
within thirty (30) days after written notice of such breach from the Lender and
continuously and diligently pursues the cure of such condition or event.
Notwithstanding anything contained in this Section 10 or contained in any
other provision of this Agreement or the other Loan Documents to the contrary,
in the event of the institution of Insolvency Proceedings against the Borrower,
the Company or any Guarantor Subsidiary, the Lender shall not be obligated to
make advances to the Borrower during the ninety (90) day grace period under
Section 10.6.
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11. RIGHTS AND REMEDIES.
11.1 RIGHTS AND REMEDIES GENERALLY.
Upon the occurrence of an Event of Default by the Borrower or the Company
under this Agreement and notice thereof by the Lender to the Borrower, except as
hereinafter provided, The Lender may do any one or more of the following, all of
which are authorized by the Borrower and Company:
(a) Declare all Obligations, whether evidenced by this Agreement, by the
Note, or otherwise, immediately due and payable; provided, that all
Obligations shall be immediately due and payable without notice or
demand upon an Event of Default under Section 10.5 or 10.6;
(b) Cease advancing money or extending credit to or for the benefit of the
Borrower under this Agreement, or any other agreement between the
Borrower and the Lender;
(c) Terminate this Agreement as to any future liability or obligation of
the Lender but without affecting the Lender's rights and without
affecting the Obligations owing by the Borrower to the Lender;
(d) Commerce suit for collection of the Obligations or pursue any other
right or remedy available under the other Loan Documents, or
(e) Borrower shall pay all Out-of-Pocket Fees and Costs incurred in
connection with the Lender's enforcement and exercise of any of its
rights and remedies as herein provided, whether or not suit is
commenced by the Lender.
11.2 RIGHTS CUMULATIVE.
The Lender's rights and remedies under this Agreement and all other Loan
Documents shall be cumulative. The Lender shall have all other rights and
remedies not inconsistent herewith as provided by law, or in equity. No exercise
by the Lender of one right or remedy shall be deemed an election, and no waiver
by the Lender of any default on the Borrower's part shall be deemed a continuing
waiver. No delay by the Lender shall constitute a waiver, election or
acquiescence by it.
12. TAXES AND EXPENSES.
If the Borrower fails to pay promptly when due to any other Person, monies
which the Borrower is required to pay by reason of any provision in this
Agreement (including without limitation for any tax, expense or with respect to
any Lien), or to promptly contest same by proper proceedings diligently pursued,
the Lender may, but need not, pay the same and charge the Borrower's account
therefor, and the Borrower shall promptly reimburse the Lender. All such sums
shall become additional Obligations owing to the Lender and shall bear interest
at the Default Rate hereunder. Any payments made by the Lender shall not
constitute: (i) agreement by the Lender to make similar payments in the future,
or (ii) a waiver by the Lender of any Event of Default under this Agreement. the
Lender need not inquire as to, or contest the validity of, any such expense, tax
or Lien and the receipt of the usual official notice for the payment thereof
shall be conclusive evidence that the same was validly due and owing, and the
receipt of any other notice with respect to all other such monies due hereunder
shall be prima facia evidence that the same was validly due and owing.
13. CERTAIN WAIVERS.
13.1 APPLICATION OF PAYMENTS.
Except as expressly provided in this Agreement with respect to payments and
prepayments on the Loans, the Borrower waives the right to direct the
application of any and all payments at any time or times hereafter received by
the Lender on account of any Obligations owed by the Borrower, and the Borrower
agrees that the Lender shall have the continuing exclusive right to apply and
reapply such payments in any manner as the Lender may deem advisable,
notwithstanding any entry by the Lender upon its books.
13.2 DEMAND, ETC.
Except as expressly provided in this Agreement, the Borrower waives demand,
protest, notice of protest, notice of default or dishonor, notice of payment and
nonpayment, notice of any default, notice of nonpayment at maturity, notice of
intent to accelerate, and notice of acceleration.
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14. NOTICES.
Except as otherwise expressly provided herein, any notice required or
desired to be served, given or delivered hereunder shall be in the form and
manner specified below, and shall be addressed to the party to be notified as
follows:
If to the Lender at: LaSalle National Bank
000 Xxxxx XxXxxxx Xxxxxx, Xxxxx 000
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxx X. Xxxx
Facsimile: 312/904-6467
With a Copy to: Jenner & Block
Xxx XXX Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxxx, Esq.
Facsimile: 312/840-7656
If to Borrower at: Prime Group Realty, L.P.
00 Xxxx Xxxxxx Xxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attention: Chief Financial Officer
Facsimile: (000) 000-0000
With a copy to: Winston & Xxxxxx
00 Xxxx Xxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxx X. Xxxxxx, Esq.
Telecopy: (000) 000-0000
or to such other address as each party designates to the other by notice in the
manner herein prescribed. Notice shall be deemed given hereunder if (i)
delivered personally or otherwise actually received, (ii) sent by overnight
delivery service, (iii) mailed by first-class United States mail, postage
prepaid, registered or certified, with return receipt requested, or (iv) sent
via telecopy machine with a duplicate signed copy sent on the same day as
provided in clause (ii) above. Notice mailed as provided in clause (iii) above
shall be effective upon the expiration of three (3) Business Days after its
deposit in the United States mail, and notice telecopied as provided in clause
(iv) above shall be effective upon receipt of such telecopy if the duplicate
signed copy is sent under clause (iii) above. Notice given in any other manner
described in this section shall be effective upon receipt by the addressee
thereof; provided, however, that if any notice is tendered to an addressee and
delivery thereof is refused by such addressee, such notice shall be effective
upon such tender unless expressly set forth in such notice.
15. CHOICE OF LAW AND VENUE.
This Agreement and each of the other Loan Documents (except as otherwise
specifically provided therein) shall be deemed to have been made in the State of
Illinois and the validity of this Agreement and the other Loan Documents, their
construction, interpretation and enforcement, shall be determined under,
governed by and construed in accordance with the laws of the State of Illinois.
The parties agree that all actions or proceedings arising in connection with
this Agreement and each of the other Loan Documents (except as otherwise
specifically provided therein) shall be tried and litigated only in the state
and federal courts located in the County of Xxxx, State of Illinois. The
Borrower waives any right it may have to assert the doctrine of forum non
conveniens or to object to such venue and hereby consents to any court ordered
relief. The Borrower consents that all service of process upon it be made by
registered mail or messenger directed to it at the address set forth in Section
14 above and that service so made shall be deemed to be completed upon the
earlier of actual receipt or three (3) Business Days after the same shall have
been posted to the Borrower's address by the Borrower's agent as set forth
below. Nothing contained in this Section 15 shall affect the right of the Lender
to serve legal process in any other manner permitted by law or affect the right
of the Lender to bring any action or proceeding against the Borrower, Company or
any Guarantor Subsidiaries or their property in the courts of any other
jurisdiction. Without limiting the foregoing, in addition to the state and
federal courts of Illinois, the Lender may bring action(s) for enforcement on a
non-exclusive basis in the state or federal courts of Indiana with respect to
the Security Documents, and the Borrower consents (on behalf of itself and
Mortgagor) to the non-exclusive jurisdiction of such courts and the service of
process in any such suit being made upon the Mortgagor and Borrower by
registered mail or messenger at the address specified in Section 14 above.
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16. INDEMNITY.
Borrower shall indemnify, hold harmless and defend the Lender and its
directors, officers, agents, counsel and employees ("Indemnified Persons") from
and against all losses, claims, damages, costs, expenses and liabilities
("Losses"), whether such Losses arise or notice thereof is received by the
Lender during the term of this Agreement or after termination of this Agreement,
incurred by any of them arising principally out of or relating to this
Agreement, the Loans, the other Loan Documents or any other transaction
contemplated hereby or thereby, other than arising out of any intercreditor
relationship between the Lender and any Participant or subordinated debt holder
and except for any such losses caused by the gross negligence or willful
misconduct of such Indemnified Persons, and shall reimburse the Lender and each
other Indemnified Person for any expenses including in connection with the
investigation of, preparation for or defense of any actual or threatened claim,
action or proceeding arising therefrom (including any such costs of responding
to discovery requests or subpoenas), regardless of whether any Indemnified
Person is a party thereto. Except as set forth below, each Indemnified Person
may select its own counsel with respect to any Losses, in addition to any
Borrower's counsel, and shall be indemnified therefor hereunder. In litigation,
or the preparation therefor, the Indemnified Persons shall be entitled to select
their own separate counsel to the extent that their representation by the same
counsel would present such counsel with a conflict of interest, or would be
inappropriate due to the actual or potential differing interests or because
there may be defenses available to the other Persons to be represented by such
counsel and, in addition to the foregoing indemnity, the Borrower agrees to pay
promptly the reasonable fees and expenses of such counsel. In the event that any
Indemnified Persons are made a party to any litigation against the Borrower, the
Company or any Guarantor Subsidiary relating to or arising from the Formation
Transactions, the Borrower, the Company or any Guarantor Subsidiary may, or if
requested by such Indemnified Persons shall, assume primary responsibility for
the defense thereof with counsel reasonably satisfactory to such Indemnified
Persons, subject to the right of such Indemnified Persons to separate counsel to
the extent provided in the preceding sentence. The provisions of this Section 16
shall survive the termination of this Agreement and/or repayment of the
Obligations.
17. GENERAL PROVISIONS.
17.1 ACCEPTANCE.
This Agreement shall be binding and deemed effective when executed by the
Borrower and Company and accepted and executed by the Lender.
17.2 BINDING AGREEMENT.
This Agreement shall bind and inure to the benefit of the respective
successors and assigns of each of the parties; provided, however, that the
Borrower and Company may not assign this Agreement or any rights hereunder
without the Lender's prior written consent and any prohibited assignment shall
be absolutely void. No consent to an assignment by the Lender shall release the
Borrower or the Company from their obligations to the Lender. Except as
otherwise provided herein, the Lender may assign this Agreement and its rights
and duties hereunder, and the Borrower and Company shall execute and deliver
such documents in connection with such assignment as they or such assignee may
reasonably request. Except as otherwise provided herein, Lender reserve the
right to sell, assign, transfer, negotiate or grant participations in all or any
part of, or any interest in their rights and benefits hereunder; provided,
however, the Lender shall not assign all of its interest hereunder to any other
Person without the prior consent of the Borrower, which consent will not
unreasonably be withheld, provided further that the Lender shall not be
restricted in making partial assignments or granting participation interests
hereunder. Notwithstanding anything to the contrary in this Agreement, Lender
shall not assign, transfer or grant any participation in its rights and benefits
hereunder to any assignee, transferee, or Participant which is not domiciled in
the United States, and no such participation shall require Borrower to give any
notice, deliver any report or certificate, obtain any consent, or otherwise
treat any Participant as a Lender hereunder or pay any amount, including any
amount under Sections 2.13 or 16 of this Agreement in excess of the amount which
would have been payable by Borrower to Lender hereunder had such participation
not occurred. In connection therewith, the Lender may disclose all documents and
information which the Lender now or hereafter may have relating to the Borrower
or the Borrower's business, but shall use all reasonable efforts to ensure that
the recipient of such information maintains the confidentiality of such
information.
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17.3 SECTION HEADINGS.
Section headings and section numbers have been set forth herein for
convenience only. Unless the contrary is compelled by the context, everything
contained in each paragraph applies equally to this entire Agreement.
17.4 CONSTRUCTION.
Neither this Agreement nor any uncertainty or ambiguity herein shall be
construed or resolved against the Lender or the Borrower, whether under any rule
of construction or otherwise. On the contrary, this Agreement has been reviewed
by all parties and shall be construed and interpreted according to the ordinary
meaning of the words used so as to fairly accomplish the purposes and intentions
of the parties hereto.
17.5 SEVERABILITY.
Each provision of this Agreement shall be severable from every other
provision of this Agreement for the purpose of determining the legal
enforceability of any specific provision.
17.6 ENTIRE AGREEMENT.
This Agreement cannot be changed or terminated orally. All prior
agreements, understandings, representations, warranties, and negotiations, if
any, are merged into this Agreement. This Agreement may be amended only by a
written agreement signed by duly authorized officers of the Borrower, the
Company and the Lender.
17.7 NO FIDUCIARY RELATIONSHIP OR JOINT VENTURE.
No provision herein or in any of the other Loan Documents and no course of
dealing between the parties hereto shall be deemed to create any fiduciary
relationship between the Lender and the Borrower nor to create any partnership
or joint venture between the Lender and the Borrower.
17.8 PUBLICITY.
Borrower hereby consents to the issuance or dissemination by Lender to the
public of information describing the credit accommodations entered into pursuant
to this Agreement (as it may be amended, modified and supplemented from time to
time) to the extent such information is available to the public pursuant to any
filing made by the Borrower with any Regulatory Agency, including without
limitation, the name and address of the Borrower, a general description of the
Borrower's business and the use of the Borrower's name and logo in connection
therewith.
17.9 COUNTERPARTS.
This Agreement may be executed in two or more counterparts, each of which
shall be deemed an original but all of which shall together constitute one and
the same instrument.
17.10 CONFLICT.
In the event of a conflict between the terms of this Agreement and the
terms of the Note or other Loan Documents, the terms of this Agreement shall be
controlling.
17.11 EFFECTIVENESS OF LOAN DOCUMENTS.
The Borrower hereby confirms that each of the Security Documents shall
continue to secure payment and performance of all of the Obligations under this
Agreement and the Borrower's obligations under the Security Documents shall
continue to be valid and enforceable and shall not be impaired or limited by the
execution or effectiveness of this Agreement. Every reference contained in the
Loan Documents to the Loan Agreement shall mean and be a reference to this
Agreement and as the Loan Agreement may be further amended. Except as
specifically amended by this Agreement each of the Loan Documents shall remain
in full force and effect and are hereby ratified and confirmed.
18. WAIVER OF JURY TRIAL.
BORROWER AND THE LENDER ACKNOWLEDGE THAT THE RIGHT TO A TRIAL BY
JURY IS A CONSTITUTIONAL RIGHT, BUT THAT THE RIGHT MAY BE WAIVED. THE BORROWER
AND THE LENDER EACH KNOWINGLY, VOLUNTARILY, IRREVOCABLY AND WITHOUT COERCION,
-28-
WAIVE ALL RIGHTS TO TRIAL BY JURY OF ALL DISPUTES BETWEEN THEM. NEITHER THE
LENDER NOR THE BORROWER SHALL BE DEEMED TO HAVE GIVEN UP THIS WAIVER OF JURY
TRIAL UNLESS THE PARTY CLAIMING THAT THIS WAIVER HAS BEEN RELINQUISHED HAS A
WRITTEN INSTRUMENT SIGNED BY THE OTHER PARTY STATING THAT THIS WAIVER HAS BEEN
GIVEN UP.
19. PARTNER LIABILITY.
19.1 LIMITED RECOURSE TO COMPANY.
Notwithstanding anything expressed or implied to the contrary contained
herein, the Company shall not be liable hereunder or under the Subsidiary
Guaranty or under any legal or equitable proceeding or by virtue of any statute,
regulation or other applicable law for (i) any payment of principal or interest
on, or any other amounts due under, any of the Loans, or (ii) to repay any other
indebtedness of Borrower or any Guarantor Subsidiary, provided, however, that
nothing herein shall be construed to prevent the Lender from recovering from the
Company, or limit the Lender's recourse against the Company for any losses,
damages or costs (including without limitation, reasonable legal expenses),
incurred by the Lender in connection with the Company's breach of the Company's
own covenants and agreements herein, or in connection with the Company's fraud,
misappropriation of funds (whether due to the Company's failure to contribute
Net Offering Proceeds to the Borrowers, as required by Section 7.17 hereof, or
its receipt of Distributions from the Borrower in violation of Section 6.8
hereof, or otherwise) or any misrepresentation made by or on behalf of the
Company hereunder or in connection with the transactions contemplated hereby.
19.2 LIMITED RECOURSE TO PARTNERS OF BORROWER OTHER THAN THE COMPANY.
With respect to all partners of the Borrower other than the Company, no
personal deficiency judgment or any other judgment shall be asserted or enforced
against any such partner for payment of any amount hereunder or for observance
or performance of any of the obligations of the Borrower contained herein,
except as expressly set forth in this Agreement or any other agreement or
instrument or document as an obligation of such partner in connection herewith
(including without limitation the Subsidiary Guaranty), and provided that the
foregoing shall not affect the liability which any of such other partners may
have for any fraud, misappropriation of funds or intentional misrepresentation
made hereunder by or on behalf of the Borrower or in connection with the
transactions contemplated hereby.
IN WITNESS WHEREOF, the Borrower and Company have executed and delivered
this Agreement.
"BORROWER"
PRIME GROUP REALTY, L.P.
By: PRIME GROUP REALTY TRUST,
its general partner
By: /s/ Xxx X. Xxxxxxx
--------------------------------
Xxx X. Xxxxxxx
--------------------------------
Its: Senior Vice President
--------------------------------
"COMPANY"
PRIME GROUP REALTY TRUST
By: /s/ Xxx X. Xxxxxxx
--------------------------------
Xxx X. Xxxxxxx
--------------------------------
Its: Senior Vice President
--------------------------------
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ACCEPTED this 1st day of October, 1998, at Lender's place of business in
the City of Chicago, State of Illinois.
LASALLE NATIONAL BANK, a national banking
association
By: /s/ Xxxx X. Xxxx
-------------------------------------
Title: First Vice President
----------------------------------
Address: 000 X. XxXxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attn: Xxxx X. Xxxx
Fax No. (000) 000-0000
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EXHIBIT A
---------
Note
[Exhibit Omitted]
EXHIBIT B
---------
Bank Boston Credit Agreement
[Exhibit Omitted]
SCHEDULE 1.1
------------
List of Guarantor Subsidiaries
NASHVILLE OFFICE BUILDING I, LTD.
OLD KINGSTON PROPERTIES, LTD.
PROFESSIONAL PLAZA, LTD.
CENTRE SQUARE II, LTD.
TRIAD PARKING COMPANY, LTD.
000 XXXXXXXX XXXXXX, X.X.X.
