$110,000,000
SECOND
AMENDED AND RESTATED CREDIT AGREEMENT
AMONG
HOMESTEAD VILLAGE INCORPORATED,
THE LENDERS NAMED HEREIN,
AND
COMMERZBANK AG, NEW YORK BRANCH,
AS ADMINISTRATIVE AGENT FOR THE LENDERS
DATED AS OF FEBRUARY 29, 2000
SECOND AMENDED AND RESTATED CREDIT AGREEMENT
SECOND AMENDED AND RESTATED CREDIT AGREEMENT (this Agreement ), dated
as of February 29, 2000, among HOMESTEAD VILLAGE INCORPORATED, a Maryland
corporation (the Borrower ), COMMERZBANK AG, NEW YORK BRANCH, and the other
lenders listed on Exhibit A annexed hereto, as amended from time to time (each a
Lender and collectively, the Lenders ) and COMMERZBANK AG, NEW YORK BRANCH,
as contractual representative for the Lenders on the terms provided herein (the
Administrative Agent ).
W I T N E S S E T H:
WHEREAS, the Administrative Agent arranged a revolving credit facility
in the original principal amount of $50,000,000 on behalf of the Borrower
pursuant to a Credit Agreement dated as of May 6, 1997 among Borrower,
Administrative Agent and certain lenders named therein (said Agreement, as
amended to, but not including, this date, the Original Agreement );
WHEREAS, the parties to the Original Agreement amended and restated the
Original Agreement in its entirety pursuant to the terms of an Amended and
Restated Credit Agreement dated as of March 18, 1999 (the First Restatement );
and
WHEREAS, the parties to the First Restatement have agreed to amend and
restate the First Restatement in its entirety, including the letters modifying,
amending or waiving the terms thereof.
NOW, THEREFORE, in consideration of the fees, representations,
warranties, covenants and agreements of the Borrower set forth herein and in the
Loan Documents, the parties hereto agree as follows:
ARTICLE I.. DEFINITIONS; CONSTRUCTION
Section 1.1 Definitions As used herein, the following terms shall have
the following meanings:
Accounting Period means any accounting period within
Borrower's fiscal year, provided that such fiscal year is in accordance with
GAAP and generally coincides with the calendar year.
Acquisition Costs means the actual purchase price paid by
Borrower or a Subsidiary of Borrower to acquire a Property.
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Adjusted EBITDA means, with respect to any quarter, EBITDA
for such quarter, plus non-cash charges, minus a reserve for replacements
equivalent to the greater of (i) the average of actual, historical recurring
Property capital expenditures incurred during the four calender quarters
immediately preceding the calender quarter in which the calculation is made and
(ii) four percent (4.0%) of the gross revenues derived from the Properties
during the calendar quarter immediately preceding the quarter in which the
calculation is made.
Adjusted LIBOR Rate means, with respect to each Interest
Period, the rate obtained by dividing (i) the LIBOR Rate for such Interest
Period by (ii) a percentage equal to one minus the actual rate (stated as a
decimal) of all reserves then actually required to be maintained by each Lender
(provided that reasonable evidence of the imposition of such requirement is
furnished to Borrower) against eurocurrency liabilities as specified in
Regulation D (or against any other category of liabilities that includes
deposits by reference to which the interest rate on borrowings hereunder is
determined or any category of extensions of credit or other assets that includes
loans by a non-United States office of the Administrative Agent to United States
residents) or by any other Requirement of Law relating to reserve or capital
adequacy requirements.
Adjusted Maximum Availability Amount means the Maximum
Availability Amount, except that, for periods occurring prior to the Closing
Date, the Adjusted Maximum Availability Amount shall mean $170,000,000.
Adjusted Pool NOI means, as of the last day of any calendar
quarter, the NOI derived from the Mortgaged Properties during such quarter and
the three calendar quarters immediately preceding such quarter less (i) a
reserve for replacements equivalent to four percent (4.0%) of gross revenues
derived from such Mortgaged Properties during such period and (ii) a management
fee equal to four percent (4.0%) of gross revenues derived from such Mortgaged
Properties during such period.
Administrative Agent means Commerzbank AG, New York Branch,
in its capacity as contractual representative for the Lenders hereunder, or such
successor Administrative Agent as may be appointed pursuant to Section 7.9 of
this Agreement.
Affiliate means, with respect to any Person, any other
Person directly or indirectly controlling, controlled by, or under common
control with such Person, whether through the ownership of voting securities, by
contract, or otherwise. A Person shall be deemed to control a corporation if
such Person possesses, directly or indirectly, the power to (i) vote fifty
percent (50%) or more of the securities having ordinary voting power for the
election of directors of such corporation or (ii) direct or cause the direction
of the management and policies of such corporation, through the ownership of
voting securities, by contract or otherwise.
Agreement means this Agreement, as amended, supplemented, or
modified from time to time.
Alternate Rate means, as of any date of determination, a per
annum rate equal to the greater of (a) the Prime Lending Rate plus one and
one-half percent (1.5%) and (b) the Federal Funds Rate plus two percent (2%).
Applicable Margin means two and one-half percent (2.5%).
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Appraised Value shall have the following meanings:
(i) At all times prior to May 1, 2001:
(x) With respect to each of the fifty-six (56) Mortgaged
Properties to which a value is ascribed on Schedule 1 annexed hereto, Appraised
Value shall mean the value ascribed on Schedule 1 annexed hereto; and
(y) With respect to each of the Mortgaged Properties to
which a value is not ascribed on Schedule 1 annexed hereto, (x) until such time
as Borrower shall have delivered to Administrative Agent a FIRREA Appraisal of
such Mortgaged Property in accordance with the terms of Section 5.2(k) hereof,
Appraised Value shall mean undepreciated GAAP cost value and (y) upon delivery
of a FIRREA Appraisal as aforesaid, Appraised Value shall mean the value set
forth in the FIRREA Appraisal of the Mortgaged Property; and
(ii) During the period commencing May 1, 2001 and at all times
thereafter up to and including the Maturity Date, Appraised Value shall mean the
value ascribed to the Mortgaged Properties in the Updated Appraisals delivered
to Administrative Agent pursuant to the terms of Section 5.2(l) hereof.
Average Undrawn Balance means the average daily amount of
the Revolving Portion of the Loan which remains undrawn upon by the Borrower for
the related period of determination (on the basis of a year of 365/366 days for
the actual number of days which have elapsed during such period).
Bankruptcy Code has the meaning provided in Section 6.1(g).
Borrower has the meaning set forth in the introductory
paragraph to this Agreement.
Borrower's Authorized Representative means any duly elected
officer designated by the Borrower in a written notice to the Administrative
Agent, as such officer may be changed from time to time by written notice to the
Administrative Agent.
Business Day means any day excluding Saturday, Sunday and
any other day on which banks are required or authorized to close in New York
City or on which trading is not carried on by and between banks in Dollar
deposits in the applicable interbank Eurodollar market.
Capital Stock means any and all shares, interests,
participation, or other equivalents (however designated) of capital stock of a
corporation, any and all equivalent ownership interests, including but not
limited to partnership interests, in a Person (other than a corporation), and
any and all warrants or options to purchase any of the foregoing.
Closing Date means the date hereof.
Code means the Internal Revenue Code of 1986, as amended
from time to time, or any successor thereto.
Collateral means, collectively, the Mortgaged Properties and
all other property and interests in property now owned or hereafter acquired and
upon which a Lien has been or is purported or intended to have been granted in
favor of the Administrative Agent or its predecessor -in-interest as
Administrative Agent, Xxxxx Fargo Bank, National Association.
Construction Budget means, with respect to any Project under
Development, the total budgeted costs (including soft and hard costs), required
to cause such Project under Development to become Construction Complete,
including the acquisition cost of land.
Construction Complete means, with respect to any Mortgaged
Property, that (a) construction of such Mortgaged Property is complete, in
accordance with the Plans and Specifications of such Mortgaged Property, (b)
final, permanent and unconditional certificates of occupancy permitting
occupancy of all portions of such Mortgaged Property as an extended stay
facility have been issued and are in full force and effect, (c) all portions of
such Mortgaged Property are, or may become at any time, without the consent or
approval of any Person, open for business to the general public as an extended
stay hotel, and (d) the Administrative Agent shall have received evidence
satisfactory to it that the conditions set forth in (a), (b) and (c) have been
satisfied.
Contractual Obligation means as to any Person, any material
provision of any security issued by such Person or of any agreement, instrument,
or other undertaking to which such Person is a party or by which it or any of
its property is bound.
Credit Exposure has the meaning provided in Section 7.17.
Debt Service means, with respect to any period, Interest
Expense for such period, plus scheduled amortization of all Indebtedness of
Borrower or its Subsidiaries (excluding balloon payments and bullet maturities
on loans.)
Debt Yield shall mean the quotient, expressed as a
percentage, obtained by dividing (x) the aggregate Net Operating Income derived
from the Mortgaged Properties during the four calendar quarters preceding the
calendar quarter in which the calculation occurs by (y) the average outstanding
principal balance of the Loan during the calendar quarter preceding the calendar
quarter in which the calculation occurs.
Decisions has the meaning set forth in Section 7.14.
Default means any condition or event that, with the giving
of notice or the lapse of time or both, would constitute an Event of Default
hereunder or under the Promissory Notes or the other Loan Documents.
Default Rate has the meaning set forth in Section 2.3(b)
hereof.
Direct Costs means actual costs paid by Borrower or any
Subsidiary of Borrower for labor, materials, equipment, contractor and
subcontractor fees and all other costs (other than Acquisition Costs and
Indirect Costs) in connection with the construction of improvements on a
Property.
Dollar and the sign $ each mean lawful currency of the
United States of America.
EBITDA means, with respect to any period and any Person, the
net income of such Person, plus, to the extent included in the calculation of
earnings, interest expense (per GAAP), income taxes, depreciation and
amortization expense, other non-cash losses relating to restructuring,
downsizing in connection with a corporate personnel restructuring or other
unusual events, accounting changes, write-downs, reclassifications or
revaluations, distributed earnings of Unconsolidated Affiliates and losses on
sales of property, less, to the extent excluded in the calculation of earnings,
gains on sales of property.
Eligible Assignee means a Person who, at the time of
determination is (a) a Lender; (b) a commercial bank, trust company, savings and
loan association, savings bank, insurance company, investment bank or pension
fund organized under the laws of the United States of America or any state
thereof, and having total assets in excess of $5,000,000,000; or (c) a
commercial bank organized under the laws of any other country which is a member
of the Organization for Economic Cooperation and Development or a political
subdivision of any such country, and having total assets in excess of
$5,000,000,000, provided such bank is acting through a branch or agency located
in the United States of America. If such a Person is not currently a Lender,
such Person's senior unsecured long term indebtedness must be rated BBB or
higher by Standard & Poor's, BA2 or higher by Xxxxx'x Investor's Services, or
the equivalent or higher of either such rating by another rating agency
acceptable to the Administrative Agent.
Eligible Costs means, with respect to each Mortgaged
Property, the Eligible Cost ascribed thereto in Schedule 2 annexed hereto.
Environment means soil, surface waters, groundwaters, land,
stream, sediments, surface or subsurface strata and ambient air.
Environmental Discharge means any discharge of pollutants or
effluent into any aquifer or water source or system (whether naturally occurring
or man made), gaseous emissions (including, without limitation, air emissions),
particulate emissions and noise emissions, in each case, in violation of any
Relevant Environmental Law.
ERISA means the Employee Retirement Income Security Act of
1974, as amended from time to time.
ERISA Affiliate means each trade or business (whether or not
incorporated) that together with the Borrower or a Subsidiary of the Borrower
would be deemed to be a single employer within the meaning of Section 4001 of
ERISA.
Event of Default has the meaning provided in Article VI.
Exchange Act means the Securities and Exchange Act of 1934,
as amended.
Federal Funds Rate means, for any day of determination, the
rate per annum (rounded upwards, if necessary, to the nearest 1/100th of one
percent) equal to the weighted average of the rates on overnight Federal Funds
transacted with members of the Federal Reserve System arranged by Federal Funds
brokers on such date, as published by the Federal Reserve Bank of New York on
the Business Day next succeeding such day, provided that (i) if such day is not
a Business Day, the Federal Funds Rate for such day shall be such rate on such
transactions on the next preceding Business Day as so published on the next
succeeding Business Day, and (ii) if no such rate is so published on such next
succeeding Business Day, the Federal Funds Rate for such day shall be the
average rate quoted to the Administrative Agent on such day on such transactions
as determined by the Administrative Agent.
Financing Statements means UCC-1 Financing Statements made
by the Borrower or a Subsidiary Mortgagor, as debtor, in favor of the
Administrative Agent, as secured party, covering all fixtures, equipment and
personal property of the Borrower or such Subsidiary Mortgagor at the Mortgaged
Properties.
FIRREA Appraisal means an appraisal conforming in all
respects with the requirements of the Financial Institutions Reform, Recovery
and Enforcement Act of 1989, 12 USC 1811, as amended and as the same may be
amended from time to time, which appraisal is otherwise satisfactory to the
Administrative Agent and is prepared by an appraiser satisfactory to the
Administrative Agent at the sole cost and expense of Borrower.
Free Cash Flow means, with respect to any Person for any
period, such Person's EBITDA for such period, plus Net Cash Proceeds of sales of
assets, less (i) interest expense paid or accrued (without duplication), (ii)
income taxes paid or accrued (without duplication), (iii) routine capital
expenditures on operating properties and (iv) to the extent excluded in the
calculation of earnings, payments made under the Sale-Leaseback Facility.
GAAP means generally accepted accounting principles as in
effect at the time of application applied on a consistent basis; provided,
however, if any change is adopted after the Closing Date in generally accepted
accounting principles which either Borrower or the Administrative Agent
determines to be adverse, and if either such party notifies the other of such
determination, then both Borrower and the Administrative Agent shall negotiate
in good faith the extent to which such change shall be adopted with respect to
the matters to which the definition of GAAP is applicable under the Loan
Documents, and the term GAAP shall mean (i) in the event a written agreement
with respect to such change is executed and delivered by both Borrower and
Required Lenders within thirty (30) days following such notice, generally
accepted accounting principles applied on a consistent basis giving effect to
such agreement or (ii) in any other event, generally accepted accounting
principles as in effect at the time immediately prior to the adoption of such
change applied on a consistent basis.
Governmental Authority means any nation and any state or
other political subdivision thereof, and any entity exercising executive,
legislative, judicial, regulatory, or administrative functions of or pertaining
to government, including, but not limited to, the Federal Reserve Board, any
Federal Reserve Bank, any other central banking authority, or any agency or
subdivision thereof.
Gross Asset Value Cost or GAV Cost means the value of
all cash, cash equivalents and Properties owned by the Borrower and its
Subsidiaries, valued at one hundred percent (100%) of cost.
Gross Asset Value Market (GAV Market) means Adjusted
EBITDA capitalized at a rate per annum equal to 11%, calculated with reference
to the four calendar quarters preceding the calendar quarter in which the
calculation occurs.
Guarantee Obligation means, as to any Person (the
Guaranteeing Person ), any obligation of (a) the Guaranteeing Person or (b)
another Person (including, without limitation, any bank under any letter of
credit) to induce the creation of which the Guaranteeing Person has issued a
reimbursement, counterindemnity, or similar obligation, in either case
guaranteeing any Indebtedness, leases, dividends, or other obligations (the
primary obligations ) of any other third Person (the primary obligor ) in any
manner, whether directly or indirectly, including, without limitation, any
obligation of the Guaranteeing Person, whether or not contingent, (i) to
purchase any such primary obligation or any property constituting direct or
indirect security therefor, (ii) to advance or supply funds (x) for the purchase
or payment of any such primary obligation or (y) to maintain working capital or
equity capital of the primary obligor or otherwise to maintain the net worth or
solvency of the primary obligor, (iii) to purchase property, securities, or
services primarily for the purpose of assuring the owner of any such primary
obligation of the ability of the primary obligor to make payment of such primary
obligation or (iv) otherwise to assure or hold harmless the owner of any such
primary obligation against loss in respect thereof; provided, however that the
term Guarantee Obligation shall not include endorsements of instruments for
deposit or collection in the ordinary course of business. The amount of any
Guarantee Obligation of any Guaranteeing Person shall be deemed to be the lower
of (a) an amount equal to the stated or determinable amount of the primary
obligation in respect of which such Guarantee Obligation is made and (b) the
maximum amount for which such Guaranteeing Person may be liable pursuant to the
terms of the instrument embodying such Guarantee Obligation, unless such primary
obligation and the maximum amount for which such Guaranteeing Person may be
liable are not stated or determinable, in which case the amount of such
Guarantee Obligation shall be such Guaranteeing Person's maximum reasonably
anticipated liability in respect thereof as determined by the Lenders in good
faith.
Hazardous Materials means any substance in quantities and/or
form:
(a) the presence of which requires or shall
hereafter require notification, investigation or remediation under any Relevant
Environmental Law; or
(b) which is or becomes defined as a hazardous waste,
hazardous material or hazardous substance or controlled industrial waste
or Pollutant or Acontaminant under any Relevant Environmental Law, including
without limitation, which contains gasoline, diesel fuel or other petroleum
hydrocarbons or volatile organic compounds, or which contains polychlorinated
biphenyls or asbestos or urea formaldehyde foam insulation, or which contains or
emits radioactive particles, waves or material, including radon gas; or
(c) which is toxic, explosive, corrosive, flammable,
infectious, radioactive, carcinogenic, mutagenic or otherwise hazardous and is
or becomes regulated under any Relevant Environmental Law or by any Governmental
Authority; or
(d)pursuant to applicable Relevant Environmental Laws,
the presence of which on the Mortgaged Property causes or threatens to cause a
nuisance upon the Mortgaged Property or adjacent properties; or poses or
threatens to pose a hazard to the Mortgaged Property or to the health or safety
of persons or property on or about the Mortgaged Property.
HPT means HPT HSD Properties Trust, the purchaser-lessor
under the Sale- Leaseback Facility.
Implied Pool Debt Service means, as of the last day of any
calendar quarter, the debt service, calculated on an annualized basis, of a
self-liquidating loan with an original principal amount equal to the average
daily Adjusted Maximum Availability Amount during such calendar quarter,
amortized over 300 months (25 years) at an interest rate per annum equivalent to
the higher of (i) the actual interest rate under the Loan and (ii) the then
current 10-year Treasury Rate plus three percent (3.0%).
Indebtedness of any Person means, as of the date of any
determination thereof, without duplication:
(i) all obligations of such Person for borrowed money
and for the deferred purchase price of property or services, and obligations
evidenced by bonds, debentures, notes, or other similar instruments;
(ii) all rental or other obligations under leases
required to be capitalized under
GAAP;
(iii) all Guarantee Obligations of such Person, including
obligations of Unconsolidated Affiliates guaranteed by such Person or with
respect to which such Person is otherwise obligated on a recourse basis;
(iv) such Person's Ownership Share of all obligations and
liabilities of its Unconsolidated Affiliates;
(v) all liabilities in respect of currency or interest rate
swap, cap or collar arrangements or any similar derivative instrument; provided
that if such currency or interest rate swap, cap or collar arrangements or any
similar derivative instrument has been entered into in order to hedge the
currency or interest rate exposure of such Person in respect of current or
contemplated Indebtedness, the amount of any liability in respect of such
arrangement or instrument shall not be included in the determination of
Indebtedness; and
(vi) Indebtedness of others secured by any Lien upon property
owned by such Person, whether or not assumed by such Person.
Indirect Costs means actual costs incurred by Borrower or a
Subsidiary of Borrower for title insurance, brokerage commissions, closing costs
and escrow fees, real estate taxes, legal fees design and architectural fees,
permits and all other costs or fees (other than Acquisition Costs and Direct
Costs) incurred in connection with the development of a Property.
Intellectual Property has the meaning set forth in Section
4.12.
Interest Expense means (without redundancy) the sum of all
accrued, paid or capitalized interest costs of Borrower and its consolidated
Affiliates (excluding capitalized interest funded from an interest reserve),
including, without limitation, payments made under the Sale-Leaseback Facility
(to the extent deemed interest costs under GAAP) plus (i) Borrower's Ownership
Share of interest expense in its Unconsolidated Affiliates and (ii) 100% of any
accrued, paid, or capitalized interest incurred (without redundancy) on any
obligation for which Borrower is wholly or partially liable under repayment,
interest carry or performance guarantees, or other relevant liabilities, minus,
to the extent included in the foregoing, financing costs and fees paid prior to
the Closing Date which relate to (x) Indebtedness which has been incurred prior
to the Closing Date, (y) the Sale-Leaseback Facility and (z) the Loan.
Interest Period has the meaning set forth in Section 2.4.
Leases means all leases, licenses and other arrangements
pursuant to which any Person has the right or option to occupy or use any
portion of any Mortgaged Property, and shall include all right, title and
interest to receive all rent and other revenue thereunder, and shall include all
guaranties of the obligations of all such Persons.
Lender or Lenders has the meaning set forth in the
introductory paragraph of this Agreement, and their permitted successors and
assigns.
Lending Office means, with respect to any of the Lenders,
the branch or branches (or affiliate or affiliates) from which any of such
Lender's loans are made or maintained and for the account of which all payments
of principal of, and interest on, such Lender's loans are made, as designated in
writing from time to time to the Administrative Agent and the Borrower.
LIBO Rate means, with respect to any Interest Period, the
sum of the Applicable Margin plus the rate per annum appearing on Dow Xxxxx
Markets (Telerate) Page 3750 (the Telerate Screen) at or about 11:00 a.m. (New
York time), subject to corrections (if any) made on the Telerate Screen, two
Business Days prior to the commencement of the Interest Period for which such
LIBO Rate will apply (the Rate Fixing Day ) for the offering of deposits in
Dollars for a period comparable to the Interest Period for which such LIBO Rate
will apply; provided, however, that if (x) no relevant rate appears on the
Telerate Screen for the purposes of the foregoing calculation or (y) the
Administrative Agent determines that no rate for a period of comparable duration
to that Interest Period appears on the Telerate Screen at the relevant time,
then LIBO Rate shall mean the Applicable Margin plus the arithmetic mean
(rounded upwards, if necessary, to two decimal places) of the respective rates,
as supplied to the Administrative Agent at its request, quoted by leading banks
to the Lenders in the London Interbank Market at or about 11:00 a.m. (New York
time) on the Rate Fixing Day for the offering of deposits in Dollars for a
period comparable to the Interest Period for which such LIBO Rate will apply. If
any of the Lenders is unable or otherwise fails to supply an offered rate by
11:30 a.m. (New York time) on the Rate Fixing Day, LIBO Rate shall be
determined on the basis of the quotations of the remaining Lenders so long as at
least two Lenders supply an offered rate. In the event there are less than two
Lenders supplying offered rates, then such offered rate shall be determined by
the Administrative Agent from an alternate, substantially similar independent
source available to the Administrative Agent or shall be calculated by the
Administrative Agent by a substantially similar methodology as that theretofore
used to determine such offered rate on the Telerate Screen in the London
Interbank market for a term comparable to such Interest Period and in an amount
equal to or comparable to the principal amount of the borrowing to which such
Interest Period relates. Each determination of the LIBO Rate by the
Administrative Agent, in absence of demonstrable error, shall be conclusive and
binding.
Lien means with respect to any asset: any mortgage, pledge,
security interest, encumbrance, lien, charge, or deposit arrangement or other
arrangement having the practical effect of the foregoing and shall include the
interest of a vendor or lessor under any conditional sale agreement, capitalized
lease, or other title retention agreement relating to such asset or the filing
of any financing statement under the UCC or comparable law.
Loan has the meaning provided in Section 2.1 hereof.
Loan Documents means, collectively, this Agreement, the
Promissory Notes, all Mortgages, all Financing Statements, the Environmental
Indemnity, all Subsidiary Mortgagor Guaranties (as that term is defined in the
First Restatement) and all other documents, certificates, affidavits and other
instruments executed and delivered by the Borrower and its Affiliates pursuant
thereto or in connection therewith, as each of the same may be amended, modified
or otherwise supplemented from time to time.
Loss has the meaning provided in Section 7.16(c).
Margin Stock has the meaning provided in Regulation U.
Material Adverse Change means any change, event or
circumstance which has or is reasonably likely to have a material adverse effect
on (i) the ability of the Borrower and its Subsidiaries to perform their
respective obligations under this Agreement or any of the other Loan Documents,
or (ii) the business, condition (financial or otherwise) or results of operation
of the Borrower and its Subsidiaries when taken as a whole.
Maturity Date means February 28, 2003.
Maximum Availability Amount means, as of any date of
calculation, the sum of (x) the Revolving Portion of the Loan and (y) the
outstanding principal balance of the Term Portion of the Loan.
Maximum Dividend Amount means, as of any date of
determination, fifty percent (50%) of Free Cash Flow of Borrower derived during
the period commencing September 30, 1999 and ending on such date of
determination.
Mortgaged Properties means, collectively, each Property of
the Borrower or any Subsidiary Mortgagor which is (and for so long as same is)
mortgaged to the Administrative Agent pursuant to the terms hereof, and shall
include all of the Property , as such term is defined in the Mortgages.
Mortgages means those certain deeds of trust, deeds to
secure debt, mortgages and security agreements with assignments of leases,
rents, operating agreements and management agreements and fixture filings
delivered by the Borrower or any Subsidiary Mortgagor in favor of the
Administrative Agent and covering the Mortgaged Properties, as the same may be
amended, modified, or otherwise supplemented from time to time.
Net Cash Proceeds means with respect to any sale, transfer
or other disposition by the Borrower or a Subsidiary of any asset (including
stock of a Subsidiary), the aggregate cash proceeds (including cash proceeds
received by way of deferred payment of principal pursuant to a note, installment
receivable, reserve for adjustment or otherwise, but only as and when received)
received by the Borrower or a Subsidiary pursuant to such sale, transfer or
other disposition, net (subject to reserves for normal course post-closing
adjustments and reserves for indemnification obligations in connection with such
asset sale) of (i) the direct costs relating to such sale, transfer or other
disposition (including sales commissions and legal and accounting fees), (ii)
taxes paid or payable as a result thereof (after taking into account any
available tax credits or deductions and any tax sharing arrangements), (iii)
amounts required to be applied to the repayment of any Indebtedness secured by a
Lien on the asset subject to such sale, transfer or other disposition (other
than hereunder), and (iv) liabilities of the entity, or relating to the business
or assets sold, transferred or otherwise disposed of which are retained by the
Borrower or the applicable Subsidiary.
Net Operating Income or NOI means, with respect to any
appropriate period and any Properties, the gross revenues from such Properties
for such period less all direct operating expenses of such Properties,
including, without limitation, expenses for the following to the extent same
relate to such Properties: personnel, landscaping, contracts, utilities,
housekeeping, repairs and maintenance, marketing, administrative duties,
insurance and real estate taxes for such period (other than interest expense,
depreciation, amortization and expenditures capitalized in accordance with
GAAP).
Net Worth means the tangible net worth of the Borrower,
calculated on a GAAP basis, plus increases in accumulated depreciation and
amortization that occur subsequent to Closing.
Non-public Information means any information delivered by
the Borrower to the Administrative Agent or the Lenders (in their capacities as
such) pursuant to this Agreement which is not publicly disclosed or known, or
which cannot be readily derived from information which is publicly disclosed or
known.
Notice of Borrowing means a notice in the form of Exhibit C
annexed hereto pursuant to which Borrower may request a disbursement of the
Revolving Portion of the Loan.
Notice of Conversion means, with respect to proposed
conversion of a Short-Notice Borrowing in accordance with the terms of Section
2.16 hereof, a notice substantially in the form of Exhibit D annexed hereto.
Notice of Additional Interest Period Selection means a
notice in the form of Exhibit E-1 annexed hereto pursuant to which Borrower may
specify an additional Interest Period or Interest Periods applicable to portions
of the Loan.
Notice of Interest Period Selection means a notice in the
form of Exhibit E annexed hereto pursuant to which Borrower shall specify an
Interest Period or Interest Periods applicable to the initial disbursement of
the Loan.
Notifying Lender has the meaning provided in Section 2.10.
Ownership Share means, with respect to any Subsidiary of a
Person that is not a wholly owned Subsidiary and any Unconsolidated Affiliate of
a Person, the greater of (i) such Person's relative nominal direct and indirect
ownership interest (expressed as a percentage) in such Subsidiary or
Unconsolidated Affiliate and (ii) such Persons relative direct and indirect
economic interest (expressed as a percentage) in such Subsidiary or
Unconsolidated Affiliate, determined in accordance with the applicable
provisions of the declaration of trust, articles or certificate of organization,
articles of organization, partnership agreement, joint venture agreement or
other applicable organizational document of such Subsidiary or Unconsolidated
Affiliate.
Participant has the meaning provided in Section 7.17.
Payment Office means the office of the Administrative Agent
located at Two World Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000-0000.
Percentage means each Lender's percentage share of the Loan
as set forth on Exhibit A annexed hereto.
Period Fraction means, with respect to any period of time, a
fraction, the numerator of which is the actual number of days in such period,
and the denominator of which is 360.
Permissible Assumed Indebtedness has the meaning provided in
Section 5.3(a)(iv).
Permitted Encumbrances means, with respect to each of the
Mortgaged Properties, (i) all exceptions to title insurance coverage set forth
in the title insurance policies insuring the Mortgages covering such Mortgaged
Properties, other than standard printed exceptions, as of the date such policies
are issued or updated by endorsement, (ii) all liens for real estate taxes and
assessments provided either (x) that the last day by which such taxes or
assessments may be paid without the imposition of any interest, fine or penalty
has not occurred, or (y) the amount or validity of such taxes or assessments are
being contested in good faith by appropriate proceedings which have the effect
of staying enforcement or execution of such liens and with respect to which
adequate reserves in conformity with GAAP have been provided on the books of
Borrower, (iii) mechanics and materialmen's liens, the existence of which do
not constitute or create a Material Adverse Change, and which remain
unsatisfied, unbonded or unstayed for no more than thirty (30) days other than
those the amount or validity of which are being contested in good faith by
appropriate proceedings which have the effect of staying enforcement or
execution of such liens and with respect to which adequate reserves in
conformity with GAAP have been provided on the books of Borrower, (iv) Leases
which are subordinate to the lien of the Mortgages and (v) such other matters
affecting title to the Mortgaged Properties as the Administrative Agent shall
from time to time approve in writing.
Person means any individual, partnership, firm, corporation,
association, joint venture, joint stock company, trust, unincorporated
organization or other entity, or any governmental or political subdivision or
agency, department, or instrumentality thereof.
Plan means any multiemployer plan or single employer plan,
as defined in Section 4001 and subject to Title IV of ERISA, which is
maintained, or at any time during the five calendar years preceding the date of
this Agreement was maintained, for employees of the Borrower or a Subsidiary of
the Borrower or an ERISA Affiliate.
Plans and Specifications means the final plans and
specifications filed with the appropriate Governmental Authorities with respect
to the construction of an extended stay hotel facility on a Mortgaged Property.
Presence means, when used in connection with Hazardous
Materials, treatment, use, storage, handling, repair, encapsulation, disposal,
transportation, spill, discharge and release.
Prime Lending Rate means the rate at which the
Administrative Agent announces in New York, New York from time to time as its
prime lending rate, as in effect from time to time. The Prime Lending Rate is a
reference rate and does not necessarily represent the lowest or best rate
actually charged to any customer by the Administrative Agent or any Lender. The
Administrative Agent and each Lender may make commercial loans or other loans at
rates of interest at, above or below the Prime Lending Rate.
Project under Development means a Property (a) on which
construction of an extended stay facility has commenced and (b) which lacks any
permit or certificate required for the lawful occupancy thereof as an
extended-stay facility.
Promissory Notes means the promissory notes made by the
Borrower to each Lender substantially in the form of Exhibit F annexed hereto.
Properties means all land owned or leased by the Borrower
and/or any of its Subsidiaries, all buildings, structures, improvements,
fixtures and equipment, and parking areas located thereon and therein, and all
easements, rights, interests, privileges and other appurtenances thereto, of any
nature whatsoever. An individual Property is a portion of land owned or leased
by the Borrower and/or its Subsidiaries which is bound by a perimeter containing
no land not owned or leased by Borrower and/or any of its Subsidiaries, together
with all buildings, structures, improvements and parking areas fixtures and
equipment located thereon, and all easements, rights, interests, privileges and
other appurtenances thereto, of any nature whatsoever.
Purchasing Lender has the meaning provided in Section 7.18.
Reaffirmation of Environmental Indemnity means the Fourth
Reaffirmation of Environmental Indemnity to be executed by the Borrower in favor
of the Administrative Agent, substantially in the form of Exhibit B annexed
hereto.
Reaffirmation of Subsidiary Guaranty means the Reaffirmation
of Subsidiary Guaranty in favor of the Administrative Agent in the form of
Exhibit H annexed hereto.
Realty means SC Realty Incorporated, a Nevada corporation.
Regulation D and Regulation U mean Regulation D and
Regulation U, respectively, of the Board of Governors of the Federal Reserve
System as from time to time in effect and any successor thereto.
Release has the meaning provided in Section 8.11.
Release Parcel has the meaning provided in Section 8.11.
Release Price means, with respect to each Mortgaged
Property, the release price allocated thereto on Schedule 2 annexed hereto.
Release Request has the meaning provided in Section 8.11.
Relevant Environmental Laws means all Requirements of Law
and all other applicable Federal, state and local environmental statutes,
regulations, rules, ordinances, codes, licenses, permits, approvals, plans,
authorizations, guidelines, concessions, franchises, orders and similar items,
and rules of common law (whether now existing or hereafter enacted or
promulgated and whether now contemplated, anticipated or foreseeable or not) of
all courts and Governmental Authorities, and all applicable judicial and
administrative and regulatory decrees, judgments and orders, including common
law rulings and determinations, relating to injury to or the protection of the
Environment, including, without limitation, all requirements pertaining to
reporting, licensing, permitting, investigation, remediation and removal of
emissions, discharges, releases or threatened releases of Hazardous Materials
into the Environment, or relating to the manufacture, processing, distribution,
use, treatment, storage, disposal, transport or handling of Hazardous Materials.
Required Lenders means the Lenders holding at least sixty
six and two thirds percent (66 2/3%) of the Maximum Availability Amount.
Requirement of Law means, as to any Person, the certificate
of incorporation and by-laws, certificate of partnership and partnership
agreement or other organizational or governing documents of such Person, and any
law, treaty, rule, or regulation or determination of an arbitrator or a court or
other Governmental Authority, in each case applicable to or binding upon such
Person or any of its property or to which such Person or any of its property is
subject.
Revolving Portion of the Loan shall have the meaning
provided in Section 2.15.
Sale-Leaseback Facility means the lease dated February 23,
1999 between HPT, as lessor, and HVI (2) Incorporated, a Delaware corporation,
as lessee.
Stockholders Equity means stockholders equity as reflected
on the balance sheet of the Borrower determined in accordance with GAAP.
Studies means environmental studies and investigations
respecting (i) the condition and circumstances of the Environment on, under,
about or affecting any Mortgaged Property, (ii) any actual or suspected
Environmental Discharge or Presence of any Hazardous Materials on, under, about
or affecting any Mortgaged Property, and (iii) any actual or suspected violation
of any Relevant Environmental Laws on, under, about or related to any Mortgaged
Property.
Subsidiary of any Person means a corporation, partnership,
limited liability, trust or other entity of which a majority of the outstanding
shares of stock or beneficial interests of each class having ordinary voting
power is owned by such Person, by one or more Subsidiaries of such Person, or by
such Person and one or more of its Subsidiaries.
Subsidiary Mortgagor means any wholly-owned Subsidiary of
Borrower or wholly-owned Subsidiary of a wholly-owned Subsidiary of Borrower.
Taxes has the meaning provided in Section 2.17.
Term Portion of the Loan means that portion of the Loan
which is not the Revolving Portion of the Loan.
Total Costs means, with respect to any Property, the sum of
(i) the Acquisition Costs with respect to such Property, (ii) the Direct Costs
with respect to such Property, and (iii) the Indirect Costs with respect to such
Property, all calculated on a cost to completion basis.
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Total Liabilities includes all GAAP liabilities and certain
non-GAAP (off balance sheet) liabilities with no redundancy. Included are the
following: non-recourse mortgage debt; letters of credit; binding purchase
obligations; repurchase obligations; forward commitments; unsecured debt;
accounts payable; accrued expenses, capitalized lease obligations, and to the
extent required under GAAP to be reported as a liability, any other lease
obligations (including ground leases); guarantees of indebtedness; subordinated
debt; unfunded obligations of Borrower and its Subsidiaries; forward equity
commitments (but excluding forward equity subscriptions for which stock is
issued within thirty (30) days of receipt of equity proceeds); Derivative
Exposure (as hereinafter defined); and any other non-GAAP liability that the
Security and Exchange Commission has determined, either currently or in the
future, should be treated as debt. Total Liabilities will include (without
redundancy): (a) one hundred percent (100%) of the recourse liability of
Borrower and its Subsidiaries under (i) guarantees of indebtedness or (ii) loans
where Borrower or a Subsidiary of Borrower is liable for debt as a general
partner and (b) Borrower's and its Subsidiaries Ownership Share of non-recourse
debt in their Unconsolidated Affiliates. As used herein, Derivative Exposure
means the maximum liability (including costs, fees and expenses), based upon a
liquidation or termination as of the date of the applicable covenant compliance
test, of any Person under any interest rate swap, collar, cap or other interest
rate protection agreements, treasury locks, foreign currency exchange
agreements, commodity purchase or option agreements or other interest or
exchange rate or commodity price hedging agreements.
For purposes of purchase obligations, repurchase obligations
and forward commitments, the amount of Total Liabilities of a Person at any
given time in respect of a contract to purchase real property shall be
determined as follows: (x) if, at such time, the seller of such real property
would be entitled to specific enforcement of the contract against such Person,
then the amount of Total Liabilities shall equal the total purchase price
payable by such Person under the contract, otherwise, (y) the amount of Total
Liabilities shall equal the aggregate amount of due diligence deposits, xxxxxxx
money payments and other similar payments made by such Person under the contract
which, at such time, would be subject to forfeiture upon termination of such
contract.
For purposes of purchase obligations, repurchase obligations
and forward commitments, the amount of Total Liabilities of a Person at any
given time in respect of a contract to purchase a property being renovated or
developed by a third party shall equal the maximum amount reasonably estimated
to be payable under such contract during the remaining term of such contract.
Treasury Rate means for any day the weekly average auction
rate on United States Treasury Bonds with a maturity of ten years, as published
in the Federal Reserve Bulletin and made available each week by the Federal
Reserve Board in Statistical Release H.15(519) or any successor publication.
UCC means the Uniform Commercial Code as from time to time
in effect in the relevant jurisdiction.
Unconsolidated Affiliate means, with respect to any Person,
an unconsolidated affiliate of such Person (determined in accordance with GAAP).
Updated Appraisals shall have the meaning set forth in
Section 5.2(l).
Use Requirements means any and all building codes or
permits, certificates of occupancy or compliance, restrictions of record,
easements, reciprocal easements or other agreements, subdivision, zoning,
wetlands protection, or land use laws or ordinances and any and all applicable
rules or regulations of any Governmental Authority affecting any part of any
Mortgaged Property.
Section 1.2 Accounting Terms and Determinations. Unless otherwise defined
or specified herein, all accounting terms shall be construed herein, all
accounting determinations hereunder shall be made, all financial statements
required to be delivered hereunder shall be prepared, and all financial records
shall be maintained in accordance with GAAP.
Section 1.3 Other Definitional Terms. The words Ahereof, Aherein, and
Ahereunder and words of similar import when used in this Agreement shall refer
to this Agreement as a whole and not to any particular provision of this
Agreement, and Article, section, schedule, exhibit, and like references are to
this Agreement unless otherwise specified. References to agreements,
instruments, documents, statutes, and regulations include all amendments,
supplements, and modifications thereof as may be in effect from time to time.
ARTICLE II. THE LOAN
Section 2.1 The Loan. Subject to and upon the terms and conditions herein
set forth, each Lender, severally and not jointly, agrees to make a loan to
Borrower on the Closing Date in the amount of $110,000,000 (such loans of the
Lenders, the ALoan ), pro rata in accordance with such Lender's Percentage.
Borrower hereby agrees to accept the Loan. Borrower may not reborrow any portion
of the Loan, except as provided in Section 2.15 hereof. The Loan shall be
disbursed to Borrower upon the satisfaction of the conditions set forth in
Article III of this Agreement.
Section 2.2 Promissory Notes; Collateral
(a) The Borrower's obligation to pay the principal of, and
interest on, the Loan shall be evidenced by one or more Promissory Notes in the
face amount of each Lender's Percentage of the Loan, with blanks as to payee,
date and principal amount appropriately completed. The determination by the
Administrative Agent of the amount of principal outstanding hereunder or under
any Promissory Note shall, except for patent error, be final, conclusive and
binding upon the Borrower for all purposes.
(b) Each borrowing, repayment and permitted reborrowing
hereunder shall be recorded by the Administrative Agent and the entries in such
records shall, except for patent error, be final, conclusive and binding on the
Borrower; provided, however, that no failure to make or error in making a
recordation of a borrowing shall in any way limit, affect or modify the
obligation of the Borrower to repay any obligations, or the rights of the
Administrative Agent and the Lenders to any amounts due under this Agreement,
the Loan Documents and the Promissory Notes.
(c) Except as otherwise set forth in the Loan Documents, each
item of Collateral shall secure the payment and performance of all indebtedness
and obligations of the Borrower under this Agreement, including without
limitation, any increased cost under Section 2.11 hereof, and each other Loan
Document.
Section 2.3 Interest on the Loan.
(a) Subject to the provisions of Section 2.15 hereof, the
unpaid principal amount of the Loan shall bear interest at a rate per annum for
each Interest Period equal to the Adjusted LIBO Rate. Interest on the Loan shall
accrue from the date of any borrowing hereunder to but excluding the date of any
repayment thereof and shall be payable (i) in arrears on the first day of each
calendar month, (ii) at maturity (whether by acceleration or otherwise) and
(iii) after maturity, on demand. Notwithstanding the foregoing, should the Loan
bear interest at the Alternate Rate pursuant to the terms of this Agreement,
interest shall be payable (i) in arrears on the first day of each calendar
month, (ii) at maturity (whether by acceleration or otherwise) and (iii) after
maturity, on demand.
(b) Overdue principal and, to the extent permitted by law,
overdue interest in respect of the Loan, and all other overdue amounts owing
hereunder, shall bear interest for each day that such amounts are overdue at a
rate (the Default Rate ) equal to three percent (3%) per annum plus the
interest rate otherwise applicable thereto from the first day such amounts are
overdue to but excluding the date such overdue amounts are paid.
(c) The Administrative Agent, upon determining the Adjusted
LIBO Rate for any Interest Period, shall promptly notify by telephone (confirmed
in writing) or in writing the Borrower thereof. All such determinations shall be
binding on all parties, absent patent error.
(d) It is expressly stipulated and agreed to be the intent of
the Lenders and Borrower at all times to comply with the applicable law
governing the highest lawful interest rate. If the applicable law is ever
judicially interpreted so as to render usurious any amount called for under this
Agreement or under any of the other Loan Documents, or contracted for, charged,
taken, reserved or received with respect to the Indebtedness evidenced thereby,
or if acceleration of the maturity of the obligations, or the rights of the
Administrative Agent and the Lenders to any amounts due, under this Agreement,
the Loan Documents and the Promissory Notes, any prepayment by Borrower, or any
other circumstance whatsoever, results in Borrower having paid any interest,
penalty, fee or other amount in excess of that permitted by applicable law, then
it is the express intent of Borrower and Lenders that all excess amounts
theretofore collected by Lenders be credited on the principal balance of the
Loan (or, at Lenders option, paid over to Borrower), and the provisions of this
Agreement and the other Loan Documents immediately be deemed reformed and the
amounts thereafter collectible hereunder and thereunder reduced, without the
necessity of the execution of any new document, so as to comply with the
applicable law, but so as to permit the recovery of the fullest amount otherwise
called for hereunder and thereunder. The right to accelerate maturity of the
obligations, or the rights of the Administrative Agent and the Lenders to any
amounts due, under this Agreement, the Loan Documents and the Promissory Notes,
does not include the right to accelerate any interest which has not otherwise
accrued on the date of such acceleration, and Lenders do not intend to collect
any unearned interest in the event of acceleration. All sums paid or agreed to
be paid to Lenders for the use, forbearance or detention of the obligations, or
the rights of the Administrative Agent and the Lenders to any amounts due, under
this Agreement, the Loan Documents and the Promissory Notes shall, to the extent
permitted by applicable law, be amortized, prorated, allocated and spread
throughout the full term of such obligations and amounts until payment in full
so that the rate or amount of interest on account of such secured obligations
does not exceed the maximum rate or amount of interest permitted under
applicable law.
Section 2.4 Interest Periods. One or more interest periods (each an
AInterest Period ) shall be applicable with respect to the outstanding principal
amount of the Loan. Each Interest Period shall be a period of one, two, three or
six months as specified by Borrower in accordance with the terms of this
Agreement. Simultaneously with the execution and delivery hereof, Borrower shall
furnish the Administrative Agent with a Notice of Interest Period Selection
specifying the initial Interest Period or Interest Periods applicable to the
Loan. Notwithstanding the foregoing:
(i) the initial Interest Period for all or any
portion of the Loan shall commence on the date of the disbursement of the Loan;
(ii) Provided that no Event of Default shall have
occurred and be continuing, at the end of the initial Interest Period and each
subsequent Interest Period applicable to any portion of the Loan, the Borrower
shall be permitted to select an additional Interest Period for the applicable
portion of the Loan by delivering a Notice of Additional Interest Period
Selection to the Administrative Agent at any time prior to 12:00 noon (New York
time) on the third Business Day prior to the expiration of the then current
Interest Period applicable to such portion of the Loan, provided that if no
Interest Period selection is delivered to the Administrative Agent by such time,
the Borrower shall be deemed to have selected an Interest Period of one month
and such Interest Period selected or deemed to have been selected for such
portion of the Loan may not be changed without the consent of the Administrative
Agent;
(iii) if any Interest Period would otherwise
expire on a day which is not a Business Day, such Interest Period shall expire
on the next succeeding Business Day, provided that if any Interest Period in
respect of a portion of the Loan (other than a borrowing referred to in Section
2.10(b)(ii) or Section 2.11(b)(ii)) would otherwise expire on a day that is not
a Business Day but is a day of the month after which no further Business Day
occurs in such month, such Interest Period shall expire on the next preceding
Business Day;
(iv) any Interest Period in respect of a portion
of the Loan which begins on the last Business Day of a calendar month (or on a
day for which there is no numerically corresponding day in the calendar month at
the end of such Interest Period) shall, subject to clause (v) below, end on the
last Business Day of a calendar month;
(v) no Interest Period shall extend beyond the
Maturity Date; and
(vi there shall be no more than six Interest Periods
in effect at any time.
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Section 2.5 Repayment of the Loan. The Borrower shall repay to the
Administrative Agent, for the account of the Lenders, the unpaid principal
amount of the Loan, together with all accrued and unpaid interest thereon and
any other sums due and payable to the Lenders hereunder or under the other Loan
Documents, on the Maturity Date.
Section 2.6 Prepayments of the Loan. The Loan may be prepaid in full or in
part without penalty, premium or additional charge, except as set forth in
Section 2.13 hereof; provided such prepayment shall be at least equal to
$100,000 and provided further that in no event may any prepayment (other than a
prepayment in full of the entire unpaid principal balance of the Loan) cause the
Maximum Availability Amount to be less than $50,000,000. Any partial prepayment
of the Loan shall be applied to the Revolving Portion of the Loan, unless
Borrower, simultaneously with the making of such prepayment, instructs the
Administrative Agent to apply the same to the Term Portion of the Loan.
Notwithstanding the foregoing, any prepayment made in connection with the
Release of a Mortgaged Property pursuant to Section 2.15 shall be applied only
to the Term Portion of the Loan. Borrower shall furnish the Administrative Agent
with not less than three (3) business days notice of the prepayment in full of
the Loan. At the time of any prepayment in full of the Loan, Borrower shall pay
all accrued and unpaid interest and all fees and other amounts due to the
Administrative Agent and the Lenders under this Agreement and the other Loan
Documents.
Section 2.7 Fees. The Borrower shall pay to the Administrative Agent for
the account of the Lenders a commitment fee (the ACommitment Fee ) equal to
three eighths of one percent (0.375%) per annum of the Average Undrawn Balance
of the Revolving Portion of the Loan. The amount of the Commitment Fee shall be
calculated by the Administrative Agent and, absent patent error, shall be
binding on all parties. The Commitment Fee shall be due and payable (i)
quarterly in arrears on the last day of each calendar quarter, and (ii) on the
Maturity Date or earlier termination of the Loan. Each payment on account of the
Commitment Fee for a period which is less than a full calendar quarter shall be
prorated. The Borrower agrees to pay to the Administrative Agent such fees for
services rendered by the Administrative Agent as shall be separately agreed upon
in writing between the Borrower and the Administrative Agent.
Section 2.8 Payments, Etc
(a) All payments under this Agreement shall be pro rata among
the Lenders in accordance with their Percentages and shall be made by the
Borrower, without defense, setoff, or counterclaim, to the Administrative Agent
not later than 12:00 noon (New York time) on the date when due and shall be made
in Dollars in immediately available funds at the Payment Office and any funds
received by the Administrative Agent after such time shall, for all purposes of
this Agreement, be deemed to have been paid on the next succeeding Business Day.
The Administrative Agent shall thereafter cause to be distributed to the
Lenders, on the Business Day when paid, in like funds their Percentage of
payments so received. Notwithstanding the foregoing, any payments received by
the Administrative Agent after 12:00 noon (New York time) shall be distributed
to the Lenders on the following Business Day.
(b) Whenever any payment to be made hereunder or under the
Promissory Notes shall be stated to be due on a day which is not a Business Day,
the due date thereof shall be extended to the next succeeding Business Day
(unless the relevant Interest Period expires on the next preceding Business Day
pursuant to Section 2.4(iii), in which case the due date shall be the next
preceding Business Day) and, with respect to payments of principal, interest
thereon shall be payable at the applicable rate during such extension.
(c) All computations of interest on the unpaid principal
amount of the Loan shall be made on the basis of a year of (x) in the case of
interest computed on the basis of the Adjusted LIBO Rate, 360 days, and (y) in
the case of interest computed on the basis of the Alternate Rate, 365/366 days,
in either case for the actual number of days (including the first day but
excluding the last day) occurring in the period for which such interest is
payable.
Section 2.9 Interest Rate not Ascertainable, etc. If the Administrative
Agent shall have determined (which determination shall be conclusive and binding
upon the Borrower) that on any date for determining the LIBO Rate for any
Interest Period, by reason of any circumstances affecting the interbank
Eurodollar market generally, adequate and fair means do not exist for
ascertaining the applicable interest rate on the basis provided for in the
definition of Adjusted LIBO Rate, then, and in any such event, the
Administrative Agent shall forthwith give notice (by telephone confirmed in
writing) to the Borrower of such determination. Until the Administrative Agent
notifies the Borrower that the circumstances giving rise to the suspension
described herein no longer exist:
(i) each borrowing of the Revolving Portion
of the Loan made pursuant to Section 2.15 hereof shall bear interest at the then
applicable Alternate Rate; and
(ii) the entire unpaid principal amount of the Loan
shall immediately convert into
a Loan bearing interest at the then applicable Alternate Rate with an Interest
Period ending on the date on which the Interest Period applicable to the
affected borrowing expires.
Section 2.10 Illegality
(i) If any Lender (a ANotifying Lender ) shall have determined
at any time that the making or continuance of any portion of the Loan has become
unlawful by compliance by such Lender in good faith with any applicable
Requirement of Law adopted or becoming effective after the date hereof, then, in
any such event, the Notifying Lender shall give prompt notice (by telephone
confirmed in writing) to the Administrative Agent and the Borrower of such
determination.
(ii) Upon the giving of the notice to the Administrative Agent
and the Borrower referred to in subsection (a) above, (i) the Borrower's right
to request and the Notifying Lender's obligation to fund any portion of the
Revolving Portion of the Loan shall be suspended and (ii) any portion of the
Loan held by such Lender shall immediately convert into a Loan bearing interest
at the then applicable Alternate Rate with an Interest Period ending on the date
on which the Interest Period applicable to the affected borrowing expires.
Section 2.11 Increased Costs
(a) If, by reason of (x) after the date hereof, the
implementation of or any change (including, without limitation, any change by
way of imposition or increase of reserve or capital adequacy requirements) in,
or in the interpretation by any Governmental Authority or any other recognized
authority of, any law or regulation, or (y) the compliance with any guideline or
request from any central bank or other Governmental Authority or
quasi-Governmental Authority exercising control over banks or financial
institutions generally (whether or not having the force of law) adopted or
becoming effective after the date hereof:
(i) any Lender (or its Lending Office) shall be
subject to any tax, duty, or other charge with respect to the Loan or its
obligation to fund any portion of the Revolving Portion of the Loan, or shall
change the basis of taxation of payments to any Lender of the principal of or
interest on the Loan or its obligation to fund any portion of the Revolving
Portion of the Loan (except for changes in the rate of tax on the overall net
income of such Lender or its Lending Office imposed by the jurisdiction in which
such Lender's principal executive office or Lending Office is located); or
(ii) any reserve, special deposit, or similar
requirement (including, without limitation, any reserve, special deposit, or
similar 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, any Lender or its Lending Office shall be imposed or deemed
applicable or any other condition affecting borrowings hereunder shall be
imposed on such Lender or its Lending Office or the interbank Eurodollar market;
and as a result thereof there shall be any cost to such Lender of agreeing to
make or maintain the Loan or to fund any portion of the Revolving Portion of the
Loan (excluding any cost reflected in the Adjusted LIBO Rate or in the Alternate
Rate), or there shall be a reduction in the amount received or receivable by
such Lender or its Lending Office (excluding any reduction reflected in the
Adjusted LIBO Rate or in the Alternate Rate), then the Borrower shall from time
to time, upon written notice and demand (including such Lender's reasonable
details with respect to such increased cost) promptly given by the
Administrative Agent, pay to the Administrative Agent for the account of such
Lender, within five Business Days after the date specified in such notice and
demand, additional amounts sufficient to indemnify such Lender against such
increased cost. In the event that a Lender becomes aware of the imposition of a
cost to such Lender or a reduction in the amount to be received or receivable by
such Lender or its Lending Office which is an additional cost pursuant to this
Section 2.11, such Lender shall promptly notify the Administrative Agent and the
Borrower in writing of such imposition or reduction, which notice shall include
such Lender's reasonable details with respect to such increased cost. With
respect to costs or reductions incurred by a Lender pursuant to this Section
2.11 relating to any period in which any portion of the Loan remains
outstanding, the provisions of this Section 2.11 shall survive the termination
of this Agreement and the payment of the Promissory Notes and all other amounts
payable hereunder.
(b) If the Required Lenders shall notify the Borrower in
writing (with a copy to the Administrative Agent) that at any time, because of
the circumstances described in clause (x) or (y) in Section 2.11(a) or any other
circumstances arising after the Closing Date and relating to any period in which
any portion of the Loan remains outstanding affecting the interbank Eurodollar
market generally, the then applicable Adjusted LIBO Rate, as determined by the
Administrative Agent, will not adequately and fairly reflect the cost to the
Lenders of funding the borrowings, then, subject to Section 2.11(c), thereafter:
(i) any borrowing of the Revolving Portion of
the Loan shall bear interest at the Alternate Rate; and
(ii) any affected portion of the Loan shall
immediately convert to a loan bearing interest at the Alternate Rate with an
Interest Period ending on the date on which the Interest Period applicable to
the affected portion expires.
(c) If the Required Lenders shall notify the Borrower in
writing (with a copy to the Administrative Agent) that at any time, because of
the circumstances described in clause (x) or (y) in Section 2.11(a) or any other
circumstances arising after the Closing Date and relating to any period in which
any portion of the Loan remains outstanding affecting the interbank Eurodollar
market generally, then the Borrower shall be entitled to require each Lender to
which such circumstances apply to assign its Credit Exposure at par to any
Person selected by Borrower that is a financial institution reasonably
acceptable to the Administrative Agent, which assignment shall be effected
pursuant to Section 7.18 hereof.
Section 2.12 Change of Lending Office. Each Lender agrees that it will use
reasonable efforts to designate an alternate Lending Office with respect to
portions of the Loan affected by the matters or circumstances described in
Section 2.9, 2.10 or 2.11 to reduce the liability of the Borrower or avoid the
results provided thereunder, so long as such designation is not disadvantageous
to such Lender as determined by such Lender in its sole discretion.
Section 2.13 Funding Losses. The Borrower shall compensate each Lender,
upon such Lender's written request to the Administrative Agent and the
Administrative Agent's delivery thereof to the Borrower (which request shall set
forth in reasonable detail the basis for requesting such amounts), for all
losses, expenses, and liabilities (including, without limitation, any interest
paid by such Lender to lenders of funds borrowed by it to make or carry its
Percentage of the Loan to the extent not recovered by such Lender in connection
with the re-employment of such funds but excluding loss of anticipated profits),
which such Lender may sustain: (i) if for any reason (other than a default by
such Lender) a borrowing of the Revolving Portion of the Loan does not occur on
the date specified therefor in a Notice of Borrowing (whether or not withdrawn);
(ii) if any repayment of a portion of the Loan occurs on a date which is not the
Maturity Date or the last day of an Interest Period applicable to such portion
(subject to Section 2.6(b)); (iii) if, for any reason, the Borrower defaults in
its obligation to repay any portion of the Loan when required by the terms of
this Agreement; or (iv) the occurrence of any of the events described in Section
2.9, 2.10 or 2.11. With respect to losses, expenses and liabilities which a
Lender may sustain as described in this Section 2.13 relating to any period in
which any portion of the Loan remains unpaid, the provisions of this Section
2.13 shall survive the termination of this Agreement and the payment of the
Promissory Notes and all other amounts payable hereunder.
Section 2.14 Taxes
(a) All payments made by the Borrower under this Agreement and
the Promissory Notes shall be made free and clear of, and without deduction or
withholding for or on account of, any present or future income, stamp, or other
taxes, levies, imposts, duties, charges, fees, deductions, reserves or
withholdings, now or hereafter imposed, levied, collected, withheld or assessed
by any Governmental Authority, excluding in the case of each Lender, net income
taxes and franchise taxes (imposed in lieu of net income taxes) imposed on such
Lender as a result of a present or former connection between the jurisdiction of
the government or taxing authority imposing such tax and such Lender (excluding
a connection arising solely from such Lender having executed, delivered, or
performed its obligations or received a payment under, or enforced, this
Agreement or the Promissory Notes) or any political subdivision or taxing
authority thereof or therein (all such non-excluded taxes, levies, imposts,
duties, charges, fees, deductions and withholdings being hereinafter called
Taxes ). If any Taxes are required to be withheld from any amounts payable to
any Lender hereunder or under the Promissory Notes, the amounts so payable to
such Lender shall be increased to the extent necessary to yield to such Lender
(after payment of all Taxes) interest or any such other amounts payable
hereunder at the rates or in the amounts specified in this Agreement and the
appropriate Promissory Note. Whenever any Taxes are payable by the Borrower
pursuant to applicable law, as promptly as possible thereafter the Borrower
shall send to the Administrative Agent a certified copy of an original official
receipt received by the Borrower showing payment thereof. If the Borrower fails
to pay any Taxes when due to the appropriate taxing authority or fails to remit
to the Administrative Agent the required receipts or other required documentary
evidence (other than any such failure due to failure of any Lender to furnish
the documents required to be furnished by such Lender pursuant to Section
2.14(b)), the Borrower shall indemnify, defend and hold harmless the
Administrative Agent and each Lender for any incremental taxes, interest, or
penalties that may become payable by the Administrative Agent or any Lender as a
result of any such failure. With respect to any obligations of the Borrower
pursuant to this Section 2.14 relating to any period in which any portion of the
Loan remains outstanding, the agreements in this Section 2.14, as they apply to
any borrowing hereunder, shall survive the termination of this Agreement and the
payment of the Promissory Notes and all other amounts payable hereunder.
(b) The Administrative Agent and each Lender shall furnish
Borrower and the Administrative Agent, at least thirty (30) days prior to the
date on which the first payment to each Lender (including each Purchasing
Lender) is due, and annually thereafter during the term of the Loan, with United
States Internal Revenue Service Form 1001, 4224, W-8 or W-9 (or any other
successor form) or any other document evidencing such Lender's exemption from
withholding of Taxes from any amounts payable to such Lender hereunder under as
of the Closing Date. If any Taxes are required to be withheld from any amounts
payable to any Lender hereunder or under the Promissory Notes, then the Borrower
shall be entitled to require such Lender to assign its Credit Exposure at par to
any Person selected by Borrower that is an Eligible Assignee reasonably
acceptable to the Administrative Agent, which assignment shall be effected
pursuant to Section 7.18 hereof.
Section 2.15 Revolving Portion of the Loan
(1) Subject to the terms and conditions hereof, the Borrower
may reborrow portions of the Loan in an aggregate principal amount of up to
$35,000,000 (the ARevolving Portion of the Loan ). Subject to the terms and
conditions of this Agreement, the Borrower may borrow, repay and reborrow the
Revolving Portion of the Loan, provided that:
(i) the Administrative Agent shall have received
a Notice of Borrowing either (x) prior to 12:00 noon (New York time) on the
third Business Day prior to the date of the proposed borrowing (any such
proposed borrowing, a ALong-Notice Borrowing ) or (y) prior to 11:30 A.M. (New
York time) on the date of the proposed borrowing (any such proposed borrowing, a
AShort-Notice Borrowing ). Each Notice of Borrowing shall be irrevocable and
shall advise the Administrative Agent as to whether it pertains to a Long-Notice
Borrowing or a Short-Notice Borrowing, provided that any Notice of Borrowing
which purports to pertain to a Short-Notice Borrowing but which is received by
the Administrative Agent after 11:30 A.M. (New York time) on the date of the
proposed borrowing shall be deemed to constitute a request for a Short-Notice
Borrowing on the next Business Day.
(ii) before as well as after giving effect to the
proposed borrowing, no Default or
Event of Default shall have occurred or be continuing;
(iii) subject to the provisions of Section 5.5
hereof, all representations and warranties contained herein (including, without
limitation, those incorporated herein by reference, but not including those
expressly provided to be made only as of the Closing Date) shall be true and
correct in all material respects (before as well as after giving effect to the
proposed borrowing) with the same effect as though such representations and
warranties had been made on and as of the date of the proposed borrowing and
Borrower shall be in compliance in all material respects (before as well as
after giving effect to the proposed borrowing) with all covenants and agreements
contained in Article V hereof and elsewhere in this Agreement.
(iv) there shall have been no Material Adverse Change
and no Requirement of Law or Contractual Obligation of the Borrower or any
Subsidiary which could reasonably be expected to result in a Material Adverse
Change;
(v) no litigation, investigation or proceeding
before or by any arbitrator or Governmental Authority shall be continuing or
threatened against the Borrower or any Subsidiary thereof in connection with
this Agreement and the other Loan Documents which could result in a Material
Adverse Change;
(vi) the proposed borrowing shall not cause the
aggregate outstanding principal amount of the Loan to exceed the lowest of (i)
the Maximum Availability Amount, (ii) $110,000,000 and (iii) an amount which
would violate the provisions of Section 5.3(k) hereof.
(vii) the proposed borrowing shall not cause the
aggregate outstanding principal amount of the Revolving Portion of the Loan to
exceed $35,000,000.
(b) Each Long-Notice Borrowing shall be in an amount equal to
$1,000,000 or a whole multiple of $100,000 in excess thereof. Each Short-Notice
Borrowing shall be in an amount equal to $2,000,000 or a whole multiple of
$100,000 in excess thereof.
(c) There shall be no more than ten borrowings of the
Revolving Portion of the Loan in any calendar month.
(d) Interest on Long-Notice Borrowings shall accrue at the
Adjusted LIBO Rate, subject to and in accordance with the provisions of this
Article 2. Each Notice of Borrowing which pertains to a Long-Notice Borrowing
shall specify the Interest Period applicable thereto. Interest shall accrue on
Short-Notice Borrowings at the Alternate Rate.
(e) The proceeds of any borrowing of the Revolving Portion of
the Loan shall be used solely to fund ongoing cash needs, interest payments,
dividend payments, working capital requirements and reserve requirements of the
Borrower.
Section 2.16 Conversion Option. Provided that there is no Default or Event
of Default hereunder, the Borrower shall have the option to convert Short-Notice
Borrowings to borrowings bearing interest at the Adjusted LIBO Rate. Any
proposed conversion shall pertain to Short-Notice Borrowings in an amount equal
to $2,000,000 or a whole multiple of $100,000 in excess thereof. In the event
the Borrower shall elect to convert a Short-Notice Borrowing as aforesaid, the
Borrower shall deliver a Notice of Conversion to the Administrative Agent no
later than 11:30 A.M. (New York time) at least three (3) Business Days prior to
the date of the proposed conversion. A Notice of Conversion shall specify the
proposed conversion date, the amount of the Short-Notice Borrowing to be
converted and the Interest Rate applicable thereto. If no Interest Period is
specified in a Notice of Conversion, the Borrower shall be deemed to have
selected an Interest Period of one month. Any Notice of Conversion shall be
irrevocable and the Borrower shall be obligated to convert the Short-Notice
Borrowing to which it relates in accordance therewith.
ARTICLE III. CONDITIONS TO BORROWINGS
The obligation of the Lenders to disburse the Loan to Borrower on the
Closing Date is subject to the satisfaction of the following conditions:
Section 3.1 Conditions oPrecedent to Closing. On or prior to the Closing
Date, all obligations of the Borrower hereunder to the Administrative Agent and
the Lenders incurred prior to the Closing Date and any amounts payable to the
Administrative Agent or the Lenders on the Closing Date (other than legal fees
payable pursuant to the last paragraph of subsection 3.1(a)), shall have been
paid in full. In addition, the following conditions shall be satisfied:
(1) Receipt of Documents. The Administrative Agent shall have
received the following, each dated as of or prior to the Closing Date, in form
and substance satisfactory to the Administrative Agent:
(i) an officer's certificate, dated the Closing Date, signed
by any Chairman, the President, any Senior Vice President, any Vice President or
the Controller of the Borrower, and attested to by the Secretary or any
Assistant Secretary of the Borrower, in the form of Exhibit G annexed hereto
with appropriate insertions, together with copies of the Articles of
Incorporation of the Borrower certified, as of a recent date, by the Secretary
of State of the State of the Borrower's incorporation and the By-Laws of
Borrower and the resolutions of the Borrower referred to in such certificate;
and certified copies of all other documents, if any, evidencing corporate action
or governmental authorization or approval with respect to this Agreement, the
Promissory Notes and the Loan Documents;
(ii) duly executed and completed replacement or
substitute Promissory Notes payable to the order of each Lender;
(iii) a duly executed and delivered Reaffirmation of Environ-
mental Indemnity;
(iv) a duly executed and delivered Reaffirmation of Subsidiary
Guaranty;
(v) an opinion of counsel to the Borrower as to such matters
as the Administrative Agent shall require;
(vi) preliminary financial statements in the forms prescribed
by Sections 5.2(a) to (d) hereof for fiscal year 1999, the accounting period
ending in December, 1999 and the most recent Accounting Period, to be followed
on or before March 31, 2000 by final financial statements in the aforesaid forms
for the aforesaid periods which disclose a financial condition of the Borrower
and the Mortgaged Properties which is no worse in all material respects than
that disclosed by the preliminary financial statements;
(vii) copies of all financial statements, reports, and proxy
statements mailed to the Borrower's shareholders within the last year, and
copies of all registration statements, periodic reports, and other documents
filed by the Borrower with the Securities and Exchange Commission (or any
successor thereto) and any national securities exchange within the last year;
(viii) such consents or acknowledgments, with respect to such
of the transactions hereunder, from such Persons as the Administrative Agent or
its counsel may reasonably determine to be necessary or appropriate;
(ix) (A) a good standing certificate from the State of
Maryland in respect of the Borrower as of a recent date; and (B) a certificate
of the Secretary of State of each state in which the Borrower owns a Mortgaged
Property or is required to qualify to do business, as to due qualification to do
business as a foreign entity and good standing of Borrower as of a recent date;
and
(x) title policy endorsements which have the effect
of redating the title policies insuring the Liens of the Mortgages with no
additional exceptions; and
(xi) originals of an estoppel letter executed by HPT.
Execution and delivery of this Agreement by Borrower shall constitute Borrower's
agreement and covenant to pay to the Administrative Agent, promptly upon demand
(together with a reasonably detailed invoice(s) in respect thereof), all
reasonable fees and disbursements of counsel to the Administrative Agent and the
Lenders incurred prior to or on the Closing Date.
Section 3.2 Post Closing Covenant. On or before March 10, 2000, the
Borrower shall furnish the Administrative Agent with a certificate of good
standing with respect to each of the entities listed on Schedule 9 annexed
hereto from the Secretary of State of its state of incorporation or
organization, and, if such entity owns a Mortgaged Property in a state other
than its state of incorporation or organization, a certificate from the
applicable Secretary of State as to its qualification to do business in such
state.
ARTICLE IV. REPRESENTATIONS AND WARRANTIES
Borrower represents and warrants the following as of the date hereof
and, except with respect to the representations and warranties expressly
provided herein as being made only as of the Closing Date, further represents
and warrants on the date of any borrowing of the Revolving Portion of the Loan.
Section 4.1 Corporate Existence. Borrower is duly organized and validly
existing under the laws of the jurisdiction of its incorporation. In addition,
Borrower is in good standing under the laws of the jurisdiction of its
incorporation, is duly qualified to do business as a foreign corporation and is
in good standing in each jurisdiction where it owns property or where the
conduct of its business or the ownership of its property or assets (including,
without limitation, the Mortgaged Properties) requires such qualification
(unless the failure to be so qualified or in good standing would not constitute
a Material Adverse Change), and has all corporate powers and all governmental
licenses, authorizations, consents, and approvals required to carry on its
business as is now or is proposed to be conducted (unless the failure to have
same would not constitute a Material Adverse Change).
The execution, delivery, and performance by Borrower of this
Agreement and of the Loan Documents (i) are within the Borrower's powers, and
(ii) have been duly authorized by all necessary action.
Section 4.3 Governmental Approvals. No authorization or approval or other
action by, and no notice to or filing or registration with, any Governmental
Authority is required in connection with the execution, delivery, and
performance by Borrower of this Agreement or the other Loan Documents (unless
the failure to have obtained or made same would not constitute a Material
Adverse Change).
Section 4.4 Binding Effect. This Agreement and the other Loan Documents
have each been duly executed by Borrower and each constitutes a legal, valid,
and binding obligation of Borrower, enforceable against Borrower in accordance
with its terms, except as enforcement thereof may be subject to (i) the effect
of any applicable bankruptcy, insolvency, reorganization, moratorium, or similar
law affecting creditors, rights generally, and (ii) general principles of equity
(regardless of whether such enforcement is sought in a proceeding in equity or
at law).
Section 4.5 Financial Information and No Material Adverse Change
(a) Each of the financial statements delivered pursuant to
Sections 3.1(a)(vi) were prepared in accordance with GAAP and fairly present the
financial condition and results of operation of the Persons and/or properties
covered thereby on the dates and for the periods covered thereby, except as
disclosed in the notes thereto and, with respect to normally recurring year-end
adjustments. As of the date hereof Borrower does not have any material
liability, absolute or contingent, not reflected in such financial statements,
the notes thereto or Schedule 4 hereof.
(b) Since December 31, 1999, there has been no Material
Adverse Change, except as otherwise disclosed in writing to the Administrative
Agent and in the reports on Forms 10-Q and 8-K filed by the Borrower with the
Securities and Exchange Commission.
Section 4.6 Litigation. There is no action, suit, or proceeding, or any
governmental investigation or any arbitration, in each case pending or, to the
knowledge of the Borrower, threatened against Borrower, or any property of the
Borrower before any court or arbitrator or any governmental or administrative
body, agency, or official (i) which challenges the validity of this Agreement or
any of the other Loan Documents or (ii) which, as reasonably likely to be
determined, and taking into account any insurance with respect thereto, would
constitute a Material Adverse Change.
Section 4.7 Compliance with Law. The Borrower is in compliance with all
Requirements of Law, the Borrower's Certificate of Incorporation and By-Laws and
all Contractual Obligations binding on or affecting it or any of its properties
(other than where the failure to so comply would not constitute a Material
Adverse Change). The execution and delivery by Borrower of this Agreement, the
Promissory Notes and the Loan Documents do not, and the performance by Borrower
of this Agreement, the Promissory Notes and each of the Loan Documents will not,
(a) violate any Requirement of Law, (b) violate or contravene any provision of
the Borrower's Certificate of Incorporation and By-Laws, or any law, rule,
regulation, order, writ, judgment, decree, determination or award applicable to
the Borrower, (c) violate, contravene or result in a breach of or constitute a
default under any Contractual Obligation, or (d) result in, or require the
creation or imposition of, any Lien upon or with respect to any of its property
or assets (including, without limitation, the Mortgaged Properties) other than
the Liens created by the Loan Documents (other than, in any such case, where
such violation, contravention, default or result would not constitute a Material
Adverse Change).
Section 4.8 Labor Matters
(a) There are no strikes, work stoppages, slowdowns or
lockouts pending, or reasonably likely to occur in the immediate future, against
or involving the Borrower or any of its Subsidiaries, other than those which in
the aggregate would not constitute or result in a Material Adverse Change.
(b) There are no arbitrations or grievances pending against or
involving the Borrower or any of its Subsidiaries, nor, to the best knowledge of
Borrower, are there any arbitrations or grievances threatened involving the
Borrower or any of its Subsidiaries, other than those which in the aggregate
would not constitute or result in a Material Adverse Change.
(c) Neither the Borrower nor any of its Subsidiaries are
parties to, or have any obligations under, any collective bargaining agreement,
other than collective bargaining agreement(s) copies of which (certified by the
Borrower as being true, correct and complete) have been furnished to the
Administrative Agent.
(d) There are no representation proceedings pending, or, to
the best knowledge of the Borrower, threatened with the National Labor Relations
Board, and no labor organization or group of employees of the Borrower or any of
its Subsidiaries have made a pending demand for recognition, other than those
which in the aggregate would not constitute or result in a Material Adverse
Change.
(e) There are no unfair labor practice charges, grievances or
complaints pending or in process or, to the best knowledge of Borrower,
threatened by or on behalf of any employee or group of employees of the Borrower
or any of its Subsidiaries other than those which in the aggregate would not
constitute or result in a Material Adverse Change.
(f) There are no complaints or charges against the Borrower or
any of its Subsidiaries pending or, to the best knowledge of Borrower,
threatened to be filed with any Governmental Authority or arbitrator based on,
arising out of, in connection with, or otherwise relating to the employment by
the Borrower or any of its Subsidiaries of any individual, other than those
which in the aggregate would not constitute or result in a Material Adverse
Change.
(g) The Borrower and each of its Subsidiaries is in compliance
with all laws, and all orders of any court, governmental agency or arbitrator,
relating to the employment of labor, including all such laws relating to wages,
hours, collective bargaining, discrimination, civil rights, and the payment of
withholding and/or social security and similar taxes, other than such
non-compliances as in the aggregate would not constitute or result in a Material
Adverse Change.
Section 4.9 ERISA. As of the date of this Agreement and throughout the term
of this Agreement, (i) the Borrower is not and will not be an Aemployee benefit
plan as defined in Section 3(3) of ERISA, which is subject to Title I of ERISA,
(ii) the assets of the Borrower do not and will not constitute Aplan assets of
one or more such plans within the meaning of 29 C.F.R. ' 2510.3-101 and (iii)
the Borrower is not and will not be a Agovernment plan within the meaning of
Section 3(32) of ERISA.
Section 4.10 No Default. The Borrower is not in default under, or with
respect to, any of its Contractual Obligations in any respect which could
reasonably be expected to result in a Material Adverse Change and no Default or
Event of Default has occurred and is continuing.
Section 4.11 Improvements. Subject to the provisions of Section 5.5 hereof:
(a) All of the improvements located on the Mortgaged
Properties and the use of such improvements are covered by existing valid
certificates of occupancy and all other certificates and permits required by
applicable laws, rules, regulations, and ordinances or in connection with the
use, occupancy, and operation thereof.
(b) No material portion of any of the Mortgaged Properties,
nor any improvements located on such Mortgaged Properties that are material to
the operation, use, or value thereof, have been damaged in any respect as a
result of any fire, explosion, accident, flood, or other casualty, except to the
extent that the same have been or will with due diligence and in compliance with
this Agreement and all of the other Loan Documents be restored to their
condition prior thereto.
(c) No written notices of violation of any federal, state, or
local law or ordinance or order or requirement have been received with respect
to any Mortgaged Properties.
Section 4.12 Intellectual Property. Borrower owns, or is licensed to use,
all trademarks, trade names, copyrights, technology, know-how, and processes
necessary for the conduct of its business as currently conducted (the
Intellectual Property ) except for those the failure to own or license which
could not reasonably be expected to have a Material Adverse Change. No claim has
been asserted and is pending by any Person challenging or questioning the use of
any such Intellectual Property or the validity or effectiveness of any such
Intellectual Property, nor does the Borrower know of any valid basis for any
such claim (other than claims which would not constitute a Material Adverse
Change). The use of such Intellectual Property by the Borrower does not infringe
on the rights of any Person, except for such claims and infringements that, in
the aggregate, could not reasonably be expected to have a Material Adverse
Change.
Section 4.13 Taxes. Borrower has filed or caused to be filed all tax
returns that, to the knowledge of Borrower, are required to be filed and has
paid all taxes shown to be due and payable on such returns or on any assessments
made against it or any of its property and all other taxes, fees, or other
charges now due and payable imposed on it or any of its property by any
Governmental Authority (other than any the amount or validity of which are
currently being contested in good faith by appropriate proceedings and with
respect to which adequate reserves in conformity with GAAP have been provided on
the books of Borrower). No tax Lien has been filed which could constitute a Lien
senior in priority to the Lien of any of the Mortgages or Financing Statements
and which has not been (or will not be) removed or discharged of record within
ten (10) days after Borrower's notice of such Lien (or the taxes to which such
Lien relates are being contested in good faith by appropriate proceedings which
have the effect of staying enforcement or execution of such Lien and with
respect to which adequate reserves in conformity with GAAP have been provided on
the books of Borrower).
Section 4.14 Investment Company Act; Other Regulations. Borrower is not an
Ainvestment company, or a company Acontrolled by an Ainvestment company, within
the meaning of the Investment Company Act of 1940, as amended. Borrower is not
subject to regulation under any Federal or state statute or regulation which
limits its ability to incur Indebtedness.
Section 4.15 SEcurity Capital. Security Capital Group Incorporated directly
or, through a wholly-owned Subsidiary, indirectly owns no less than (a) fifty
one percent (51%) of the voting stock in Borrower before dilution due to the
conversion of the mortgages in favor of Archstone Communities Trust shown on
Schedule 4 and (b) forty-six percent (46%) after such dilution.
Section 4.16 Insurance. Subject to the provisions of Section 5.5 hereof,
the Borrower keeps the Mortgaged Properties insured in the manner and in the
amounts set forth in subsection 5.1(k) hereof.
Section 4.17 Properties. Subject to the provisions of Section 5.5 hereof:
(a) Borrower and each Subsidiary Mortgagor, as the case may
be, has good and marketable title to all of the Mortgaged Properties, subject to
no mortgage, security interest, pledge, lien, charge, encumbrance or title
retention or other security agreement or arrangement of any nature whatsoever,
except Permitted Encumbrances. Borrower shall, and shall cause each Subsidiary
Mortgagor to, forever warrant and defend the title of their respective Mortgaged
Properties against the lawful claims and demands of all persons whomsoever
subject to the Permitted Encumbrances.
(b) There are no pending or, to the best knowledge of
Borrower, threatened proceedings or actions to revoke, attack, invalidate,
rescind, or modify in any material respect (i) the zoning of any Mortgaged
Property or any part thereof, or (ii) any building or other permits heretofore
issued with respect to any Mortgaged Property or any part thereof, or asserting
that any such zoning or permits do not permit the operation of any Mortgaged
Property or any part thereof or that any improvements located on such Mortgaged
Property cannot be operated in accordance with its intended use or is in
violation of applicable Use Requirements.
(c) The Mortgage covering each such Mortgaged Property creates
a valid and enforceable first Lien, on such property described therein, as
security for the repayment of the Indebtedness incurred by the Borrower
hereunder and under the other Loan Documents, subject only to the Permitted
Encumbrances applicable to such property.
(d) The Collateral is now, and so long as any portion of the
Loan remains outstanding or any monetary obligation to the Administrative Agent
or the Lenders hereunder or under the Promissory Notes or the other Loan
Documents shall remain unpaid, will be owned solely by the Borrower or a
Subsidiary Mortgagor, as the case may be, and said Collateral, including the
proceeds resulting from the sale or other disposition (other than as permitted
by Section 5.3(k)) thereof, is and will remain free and clear of any Liens
except the Liens granted pursuant to the Loan Documents to the Administrative
Agent, which Liens shall, at all times, be first and prior on the Collateral and
all proceeds resulting from the sale or other disposition thereof, and no
further action need be taken to perfect said Liens.
(e) Neither the existence of any improvements upon a Mortgaged
Property nor the intended use or condition of any Mortgaged Property violates in
any material respect any Use Requirements. With respect to each Mortgaged
Property, neither the zoning nor any other right to carry on the use of such
Mortgaged Property as an extended stay facility, including ancillary facilities
related thereto, is to any extent dependent upon or related to any other real
estate. Each Mortgaged Property may be operated as an extended stay facility
with ancillary facilities related thereto and the Borrower has received no
written notices from any Governmental Authorities alleging any violation by any
Mortgaged Property of any Requirement of Law, including but not limited to
applicable Use Requirements. Each of the Mortgaged Properties includes an
extended-stay hotel facility which is Construction Complete and open for
business.
(f) Except as set forth in Schedule 6 annexed hereto, there
are no pending or, to the knowledge of the Borrower, threatened proceedings
relating to any (i) taking by eminent domain or other condemnation of any
portion of any Mortgaged Property, (ii) condemnation or relocation of any
roadways abutting any Mortgaged Property and (iii) denial of access to any
Mortgaged Property from any point of access to such Mortgaged Property, in any
such case not accounted for in the Plans and Specifications.
(g) Each Mortgaged Property has adequate and permanent legal
access to water, gas, and electrical supply, storm, and sanitary sewerage
facilities, other required public utilities (with respect to each of the
aforementioned items by means of either a direct connection to the source of
such utilities or through easements or connections available on publicly
dedicated roadways directly abutting such Mortgaged Property), parking, and
means of access between such Mortgaged Property and public highways over
recognized curb cuts, and all of the foregoing comply with all applicable Use
Requirements.
(h) Each Mortgaged Property constitutes a legally subdivided
lot under all applicable Use Requirements (or, if not subdivided, no subdivision
or platting of such Mortgaged Property is required under applicable Requirements
of Law), and for all material purposes each Mortgaged Property may be mortgaged,
conveyed, and otherwise dealt with as an independent parcel.
Section 4.18 Full and Accurate Disclosure. No statement of fact made by or
on behalf of the Borrower in this Agreement or in any of the other Loan
Documents (other than any Loan Documents to which neither the Borrower nor any
Affiliate is a party), or any certificate or financial statement furnished by
the Borrower to the Administrative Agent or any Lender when made or deemed made
or the date as of which such certificate or statement speaks or is deemed to
speak, as the case may be, contains any untrue statement of a material fact or,
to the best of Borrower's knowledge, omits to state any material fact necessary
to make statements contained herein or therein not misleading.
Section 4.19 Solvency. Within the meaning of Section 548 of the Bankruptcy
Code, the Uniform Fraudulent Transfer Act and the Uniform Fraudulent Conveyance
Act as in effect in any relevant jurisdiction, and any similar laws or statutes,
and after giving effect to the transactions contemplated hereby: the fair
saleable value of the Borrower's assets exceeds and will, immediately following
the disbursement of the Loan or of any borrowing of the Revolving Portion of the
Loan, exceed the Borrower's total liabilities including, without limitation,
subordinated, unliquidated, disputed, and contingent liabilities; the fair
saleable value of the Borrower's assets is and will, immediately following the
disbursement of the Loan or of any borrowing of the Revolving Portion of the
Loan, be greater than the Borrower's probable liabilities, including the maximum
amount of its contingent liabilities on its debts as such debts become absolute
and matured; the Borrower's assets do not and, immediately following the
disbursement of the Loan or of any borrowing of the Revolving Portion of the
Loan, constitute unreasonably small capital to carry out its business as
conducted or as proposed to be conducted; and the Borrower does not intend to,
and does not believe that it will, incur debts and liabilities (including
without limitation contingent liabilities and other commitments) beyond its
ability to pay such debts as they mature (taking into account the timing and
amounts of cash to be received by the Borrower and the amounts to be payable on
or in respect of obligations of the Borrower).
Section 4.20 Not Foreign Person. The Borrower is not a Aforeign person
within the meaning of Section 1445(f)(3) of the Code.
Section 4.21 Assessments. Subject to the provisions of Section 5.5 hereof,
except as set forth in budgets submitted to the Administrative Agent or its
predecessor-in-interest under the Original Agreement or the First Restatement,
there are no pending or, to the Borrower's knowledge, proposed special or other
assessments for public improvements or otherwise affecting any Mortgaged
Property, nor, to the Borrower's knowledge, are there any contemplated
improvements to any Mortgaged Property that may result in such special or other
assessments.
Section 4.22 Flood Zone. Except as disclosed by a survey heretofore
delivered to the Administrative Agent, no Mortgaged Property is located in a
flood hazard area as defined by the Federal Emergency Management Agency.
Section 4.23 Physical Condition. Subject to the provisions of Section 5.5
hereof, each Mortgaged Property is free of material structural defects and all
building systems contained therein are in good working order subject to ordinary
wear and tear.
Section 4.24 Operation of Premises. Subject to the provisions of Section
5.5 hereof, each Mortgaged Property is being operated and maintained in
accordance with the Borrower's usual and customary business practices.
Section 4.25 Margin Regulations. The Borrower is not engaged in the
business of extending credit for the purpose of purchasing or carrying any
margin stock or margin securities (within the meaning of Regulations T, U and X
issued by the Board of Governors of the Federal Reserve System), and no proceeds
of any borrowing will be used, directly or indirectly, to purchase or carry any
margin stock or margin securities or to extend credit to others for the purpose
of purchasing or carrying any margin stock or margin securities. None of the
transactions contemplated by this Agreement will violate or result in a
violation of Section 7 of the Securities Exchange Act of 1934, as amended.
Section 4.26 Hazardous Materials. Subject to the provisions of Section 5.5
hereof, except as disclosed in the Studies heretofore delivered to the
Administrative Agent, to the best of the Borrower's knowledge, no Hazardous
Materials are located on or about the Mortgaged Properties, and the Mortgaged
Properties do not contain any underground tanks for the storage or disposal of
Hazardous Materials. Further, subject to the provisions of Section 5.5 hereof,
except as disclosed in the Studies, (i) the Borrower has not, and to the
knowledge of the Borrower no other party has, (A) stored or treated Hazardous
Materials on the Mortgaged Properties, (B) disposed of Hazardous Materials or
incorporated Hazardous Materials on the Mortgaged Properties, and (C) permitted
any underground storage tanks to exist on the Mortgaged Properties, (ii) no
complaint, order, citation or notice with regard to air emissions, water
discharges, noise emissions, or Hazardous Materials, if any, or any other
environmental, health, or safety matters affecting the Mortgaged Properties or
any portion thereof, from any person, government or entity, has been issued to
the Borrower which has not been remedied or cured, and (iii) the Borrower has
complied with all Requirements of Law affecting the Mortgaged Properties.
Section 4.27 Representations and Warranties in the Loan Documents. Subject
to the provisions of Section 5.5 hereof, the representations and warranties in
each of the Loan Documents (except with respect to the representations and
warranties expressly provided as being made only as of the Closing Date) are
true, complete and correct in all material respects, and the Borrower hereby
confirms each such representation and warranty as being true, complete and
correct in all material respects as of the relevant dates with the same effect
as if set forth in its entirety herein.
Section 4.28 Loan Documents. The provisions of the Loan Documents are each
effective to create, in favor of the Administrative Agent, a legal, valid and
enforceable Lien on or security interest in all of the collateral described
therein, and when the appropriate recordings and filings have been effected in
the appropriate public offices (or, in the case of collateral represented by
certificates, when such certificates have been pledged to and received by the
Administrative Agent), the Loan Documents will constitute a perfected first Lien
on and security interest in all right, title, estate and interest of the
Borrower or a Subsidiary Mortgagor, as the case may be, in the collateral
described therein, prior and superior to all other Liens except for Permitted
Encumbrances and as otherwise permitted under this Agreement.
Section 4.29 Balloon Payments. Except as reflected on Schedule 4 hereof, as
of the Closing Date, there are no balloon payments, scheduled balloon amortizing
payments or scheduled amortizing payments required to be paid at any time in
respect of any Indebtedness (other than Permissible Assumed Indebtedness) of the
Borrower or its Subsidiaries.
Section 4.30 Subsidiaries
(a) Each Subsidiary Mortgagor is a Subsidiary of Borrower.
(b) Each Subsidiary of Borrower has guaranteed the
Indebtedness hereunder and reaffirmed such guaranty pursuant to the
Reaffirmation of Guaranty, other than (i) any Non-Guarantor Subsidiary which has
no other Indebtedness other than non-recourse debt to third parties and
inter-company Indebtedness to the Borrower which would be accelerated by the
occurrence of a Default or Event of Default hereunder and (ii) the bankruptcy
remote Subsidiary which was formed for the purpose of entering into the Sale
Leaseback Facility. A Non-Guarantor Subsidiary shall mean a Subsidiary of
Borrower that all of the Lenders agree (i) is prohibited from providing a
guaranty or (ii) would not be an appropriate Person, for reasons acceptable to
Lenders, to provide a guaranty of the Indebtedness hereunder.
Section 4.31 Nature of Business. Neither the Borrower nor any Subsidiary of
Borrower is engaged in any business other than the ownership, construction,
development, operation and management of extended stay hotel facilities (other
than businesses and investments incidental to the development, operation and
management of extended stay hotel facilities), the management for a fee of other
lodging facilities or the licensing of the operation of extended stay facilities
under the AHomestead name, which licensing business does not have start-up costs
in excess of one million dollars ($1,000,000).
Section 4.32 Indebtedness. The Indebtedness set forth on Schedule 4 annexed
hereto represents the only outstanding Indebtedness of Borrower and its
Subsidiaries on the Closing Date.
ARTICLE V. COVENANTS
Section 5.1 Certain Affirmative Covenants. So long as any portion of the
Loan remains outstanding or any amounts due to the Lenders hereunder or under
the Promissory Notes or the other Loan Documents shall remain unpaid, the
Borrower will, and, to the extent any of the following relates to a Mortgaged
Property any portion of or interest in which is owned by any Subsidiary
Mortgagor, the Borrower will cause each such Subsidiary Mortgagor, with respect
to such Mortgaged Property, to (unless expressly waived by the Administrative
Agent or the Lenders as provided herein):
(a) Payment. Duly and punctually pay or reimburse when due or,
if there is no specified due date, when demanded, the principal and interest on
the Promissory Notes and all other amounts due under this Agreement and the
other Loan Documents.
(b) Existence, Etc. (i) Preserve and maintain its existence in
Maryland, and (ii) preserve and maintain its rights and franchises in each state
in which there exists a Mortgaged Property (unless the failure to so preserve
and maintain its rights and franchises would not constitute a Material Adverse
Change).
(c) Compliance With Laws, Etc. Subject to the provisions of
Section 5.5 hereof, comply with all applicable Requirements of Law, Use
Requirements and all agreements and grants of easements or rights-of-way,
permits, declarations of covenants, conditions and restrictions, disposition and
development agreements, planned unit development agreements, management or
parking agreements, party wall agreements or other instruments affecting the
Mortgaged Properties.
(d) Payment of Taxes and Claims, Etc. Pay (i) all taxes,
assessments and governmental charges imposed upon it or upon its property (other
than the Mortgaged Properties), unless the failure to so pay would not
constitute or result in a Material Adverse Change, (ii) subject to the
provisions of Section 5.5 hereof and subparagraph (iii) of this Section 5.1(d),
all taxes, assessments and governmental charges imposed upon the Mortgaged
Properties, and all claims (including, without limitation, claims for labor,
materials, supplies, or services) which might, if unpaid, become a Lien upon the
Mortgaged Properties or any of them unless, in each case, the validity or amount
thereof is being contested in good faith by appropriate proceedings and the
Borrower has maintained adequate reserves with respect thereto, and (iii) all
taxes, assessments and governmental charges imposed upon the Mortgaged
Properties which would, if unpaid, become a Lien senior in priority to the Lien
of any of the Mortgages within ten (10) days after Borrower's notice of such
Lien (unless the taxes, assessments or governmental charges to which such Lien
relates are being contested in good faith by appropriate proceedings which have
the effect of staying enforcement or execution of such Lien and with respect to
which adequate reserves in conformity with GAAP have been provided on the books
of Borrower).
(e) Keeping of Books. Keep accurate records and books of
account in which full, accurate and correct entries shall be made of all
dealings or transactions in relation to its business and affairs in accordance
with GAAP. Upon reasonable prior notice and during normal business hours, the
Borrower shall permit representatives of any Lender to visit its offices and
inspect, examine and make abstracts from any of its books and records, and to
discuss the business, operations, and financial and other condition of the
Borrower with officers and employees of the Borrower and with its independent
certified public accountants, if any, in the presence of a representative of the
Borrower.
(f) Visitation, Inspection, Etc. Permit any representative of
the Administrative Agent or the Lenders to visit and inspect any of the
Mortgaged Properties, to examine its books and records and to make copies and
take extracts therefrom, and to discuss its affairs, finances, and accounts with
its officers, accountants, and agents, all upon reasonable notice from the
Administrative Agent during normal business hours.
(g) Maintenance of Property. Keep all Mortgaged Properties in
good working order and condition and operate Mortgaged Properties in a manner
consistent with the operation thereof as an extended stay facility, including
ancillary facilities related thereto, and otherwise consistent with prudent
business practices.
(h)0 Management of Properties. Subject to the provisions of
Section 5.5 hereof, Borrower or a Subsidiary of Borrower shall directly operate
and manage the business of the Borrower at each of the Mortgaged Properties;
provided, however, that with the prior written consent of all of the Lenders,
which consent shall not be unreasonably withheld, the Borrower may hire another
Person to operate and manage any Mortgaged Property.
(i) Hazardous Materials Removal. Subject to the
provisions of Section 5.5 hereof, xxxxx and/or remove any Hazardous Materials
present in, on or under any of the Mortgaged Properties in violation of any
applicable Requirement of Law.
(j) Covenants in the Loan Documents. Subject to the
provisions of Section 5.5 hereof, perform all covenants (affirmative and
negative) contained in each of the Loan Documents with the same effect as if set
forth in their entirety herein.
(k) Insurance. Subject to the provisions of Section
5.5 hereof, maintain upon or in connection with each of the Mortgaged
Properties:
(i) Property and casualty insurance coverage
evidenced by original or certified copies of insurance policies or binders for
such insurance, together with evidence that the premiums for such policies have
been paid current. Such insurance policies shall insure each of the Mortgaged
Properties for one hundred percent (100%) of their full replacement cost
(exclusive of footings and foundations) in so-called All risk form and with
coverage for floods, earthquakes (except as provided in subsection (ii) below)
and such other hazards (including collapse and explosion ) as the Lenders may
require for each of the Mortgaged Properties and as are consistent with
reasonable and customary requirements in the industry. Such insurance policies
shall contain replacement cost and agreed amount endorsements (with no reduction
for depreciation), an endorsement providing Building Ordinance Coverage and an
endorsement covering the costs of demolition and increased costs of construction
due to the enforcement of building codes or ordinances. To the extent there
exists a boiler on the premises of any of the Mortgaged Properties, Borrower
shall also furnish insurance providing boiler and machinery comprehensive
coverage for all mechanical and electrical equipment at each of such Mortgaged
Properties insuring against breakdown or explosion of such equipment on a
replacement cost value basis. Borrower shall also furnish business interruption
or loss of rental income insurance in connection with all policies covering
property and boiler and machinery insurance for a period of not less than one
(1) year endorsed, other than with respect to boiler and machinery insurance, to
provide a 180 day extended period of indemnity. All insurance required under
this subsection 5.1(k) shall be with companies and in amounts and with coverage
and deductibles satisfactory to the Lenders. All insurance required under this
subsection 5.1(k)(i) with respect to the Mortgaged Properties shall include
endorsements naming the Administrative Agent as loss payee, and shall have
endorsed thereon the standard mortgagee clause in favor of the Administrative
Agent. All companies issuing policies required under subsection 5.1(k) shall
have a current Best Insurance Reports rating no less favorable than A- , and
all such companies shall be licensed to do business in the states where the
applicable Mortgaged Property is located. All policies required under subsection
5.1(k) shall provide that (A) the insurance evidenced thereby shall not be
canceled or modified without, in the case of non-payment of premiums, at least
ten (10) days prior written notice from the insurance carrier to the
Administrative Agent, or, in any other circumstance, at least thirty (30) days
prior written notice from the insurance carrier to the Administrative Agent; and
(B) no act or thing done by the Borrower, or any Affiliate of any of Borrower
shall invalidate the policy as against the Lenders. The Borrower shall deliver
renewal certificates of all policies of insurance required under subsection
5.1(k) and requested by the Administrative Agent, together with written evidence
that the premiums are paid current, at least ten (10) days prior to the
expiration of the then current policy.
(ii) earthquake insurance provided for in
subsection 5.1(k)(i) only for the Mortgaged Properties and only to the extent
(A) any Mortgaged Property is located in an earthquake prone area and (B) such
insurance is available at commercially reasonable rates.
(iii)0 Liability and worker's compensation
insurance evidenced by original or certified copies of insurance policies,
binders for such insurance policies, or certificates of insurance, together with
evidence that the premiums for such policies have been paid current. Such
insurance shall provide for (A) commercial general liability (including
contractual liability) covering each of the Mortgaged Properties and the
Borrower's and its Subsidiaries operations thereon in an amount not less than
$1,000,000 per occurrence and not less than $1,000,000 per occurrence in the
aggregate; (B) commercial automobile liability with a limit not less than
$1,000,000 combined single limit and be endorsed to cover owned, hired and
non-owned automobiles; and (C) worker's compensation insurance covering all of
the Borrower's and its Subsidiaries employees and contracted parties (including
their employees) situated at the Mortgaged Properties in accordance with the
statutory requirements of the states where the applicable Mortgaged Property is
located and including an endorsement for employer's liability coverage. The
Borrower shall also furnish umbrella liability coverage in excess of the
foregoing liability coverage with a limit of not less than $9,000,000. The
commercial general liability and automobile policies and umbrella liability
policy shall name the Lenders as additional insureds. Such policies shall also
contain a so-called Aproducts-completed operations endorsement.
(iv) Insurance insuring against loss or damage by
perils customarily included under standard Abuilder's risk completed value
non-reporting form and which include all insurance required to be carried by
Borrower, as Aowner, under the provisions of all construction contracts let by
Borrower; provided that such insurance shall insure all construction on all of
the Mortgaged Properties, including, without limitation, the construction of an
extended stay facility and ancillary facilities related thereto on each
Mortgaged Property, including all materials in storage and while in transit
during construction.
(v) flood insurance with respect to any
Mortgaged Property which is at any time identified by the Secretary of Housing
and Urban Development as having special flood hazards.
(l) Further Assurances. The Borrower agrees upon demand of
the Administrative Agent (i) to do any act or execute any additional documents
(including, but not limited to, security agreements on any personalty included
or to be included in the Collateral) as may be reasonably required by the
Administrative Agent to confirm the Lien of the Loan Documents or to exercise or
enforce its rights under this Agreement, the Promissory Notes or the Loan
Documents and to realize thereon, and (ii) to execute and deliver to the
Administrative Agent and/or the Lenders such additional documents and to provide
such additional information as the Administrative Agent and/or the Lenders may
reasonably require to carry out or confirm the terms of this Agreement or the
other Loan Documents. This covenant shall survive the termination of this
Agreement until payment in full of all amounts due hereunder or under the
Promissory Notes and the Loan Documents, provided that the covenant shall be
reinstated if any payment of all amounts due hereunder or under the Promissory
Notes and the Loan Documents is required to be returned to the payor or any
other party under any applicable bankruptcy law.
(m) Year 2000 Compliance.
(i) Borrower has reviewed its business and
operations and has developed a plan (the Y2K Plan ) to address on a timely
basis the risk that computer applications used by it in performing date
sensitive functions and involving dates prior to December 31, 1999 and
thereafter (such risk being herein referred to as the AY2K Problem ) would
reasonably be expected to have a Material Adverse Effect.
(ii) Pursuant to the Y2K Plan, Borrower is taking
and will take reasonable efforts to address the Y2K Problem on an ongoing basis.
Section 5.2 Reporting Covenants. So long as the Loan remains in effect or
any monetary obligation to the Lenders hereunder or under the Promissory Notes
or the other Loan Documents shall remain unpaid, the Borrower will furnish to
the Administrative Agent at the Borrower's sole cost and expense (unless
expressly waived by the Administrative Agent or the Lenders as provided herein).
(a) Annual Financial Statements With Respect to the Borrower.
As soon as available and in any event within ninety (90) days after the end of
each fiscal year (unless the filing requirements have been extended by the
Securities and Exchange Commission (SEC ), in which case the 90-day period
shall be extended until the earlier of the date of filing with the SEC or such
extended date granted by the SEC), a consolidated balance sheet of the Borrower
and its Subsidiaries as at the end of such year and the related consolidated
statements of income, shareholders equity, and cash flow of the Borrower and
its Subsidiaries for such fiscal year, setting forth in each case in comparative
form the figures for the previous fiscal year, all in reasonable detail and
accompanied by a report thereon of Xxxxxx Xxxxxxxx or other independent public
accountants of comparable recognized national standing acceptable to the
Administrative Agent, which such report shall be unqualified as to scope of
audit and shall state that such consolidated financial statements present fairly
the consolidated financial condition as at the end of such fiscal year, and the
consolidated results of operations and changes in cash flow for such fiscal
year, of the Borrower and its Subsidiaries in accordance with GAAP, and a
statement of sources and uses of funds in the form of Exhibit I, indicating to
Administrative Agent's satisfaction, that (A) the Borrower's sources and uses of
funds are in balance with respect to Borrower's business in general, (B) the
Borrower has adequate sources to make each Project under Development
Construction Complete and (C) the Borrower has adequate sources to satisfy the
Borrower's cash requirements.
(b) Quarterly Financial Statements With Respect to the
Borrower. As soon as available and in any event within sixty (60) days after the
end of each fiscal quarter other than the last fiscal quarter of a fiscal year
(unless the filing requirements have been extended by the SEC in which case the
60-day period shall be extended until the earlier of the date of filing with the
SEC or such extended date granted by the SEC), a consolidated balance sheet of
the Borrower and its Subsidiaries as at the end of such quarter and the related
consolidated statements of income and cash flow of the Borrower and its
Subsidiaries for such fiscal quarter and/or for the portion of the Borrower's
fiscal year ended at the end of such quarter, setting forth in each case in
comparative form the figures for the corresponding quarter and the corresponding
portion of the Borrower's previous fiscal year, all in reasonable detail and
certified by the Controller or chief financial officer of the Borrower that they
are complete and correct and that they fairly present the consolidated financial
condition as at the end of such fiscal quarter, the consolidated results of
operations and changes in cash flow for such fiscal quarter and/or such portion
of the Borrower's fiscal year, of the Borrower and its Subsidiaries in
accordance with GAAP (subject to normal, year-end audit adjustments), and a
statement of sources and uses of funds in the form of Exhibit I, indicating to
Administrative Agent's satisfaction that (A) the Borrower's sources and uses of
funds are in balance with respect to Borrower's business in general, (B) the
Borrower has adequate sources to make each Project under Development
Construction Complete and (C) the Borrower has adequate sources to satisfy the
Borrower's cash requirements.
(c) Annual Financial Statements With Respect to Mortgaged
Properties. As soon as available and in any event within 90 days after the end
of each fiscal year of the Borrower or at such time as the financial statements
described in Section 5.2(a) above are furnished to the Administrative Agent, a
statement with respect to each of the Mortgaged Properties for such fiscal year,
each of which statements shall (i) be in the form of Exhibit J annexed hereto,
and contain in comparative form the information required to complete such
Exhibit in the manner and detail contemplated by such Exhibit, (ii) set forth
the Net Operating Income of each such Mortgaged Property in comparative form,
and (iii) be certified by the Controller or chief financial officer of the
Borrower that they are complete and correct and that they fairly present the
information required to complete such Exhibit for each such property as at the
end of such fiscal year, in accordance with GAAP and (iv) state that such
statement presents fairly the information required to complete such Exhibit for
each such property as at the end of such fiscal year, in accordance with GAAP.
(d) Quarterly Financial Statements With Respect to Mortgaged
Properties. As soon as available and in any event within thirty (30) days after
the end of each fiscal quarter of Borrower, a statement with respect to each of
the Mortgaged Properties as at the end of such fiscal quarter, each of which
statements shall (i) be in the form of Exhibit J annexed hereto, and contain in
comparative form the information required to complete such Exhibit in the manner
and detail contemplated by such Exhibit, (ii) set forth the Net Operating Income
of each such Mortgaged Property in comparative form, and (iii) be certified by
the Controller or chief financial officer of the Borrower that they are complete
and correct and that they fairly present the information required to complete
such Exhibit for each such property as at the end of such Accounting Period, in
accordance with GAAP (subject to normal, year-end audit adjustments).
(e) No Default/Compliance Certificate. Together with the
financial statements required pursuant to subsections (a), (b), (c) and (d)
above, a certificate of the President, the Controller or the chief financial
officer of the Borrower to the effect that, based upon a review of the
Borrower's activities and such financial statements during the period covered
thereby, there exists no Event of Default and no Default under this Agreement,
or if there exists an Event of Default or a Default hereunder, specifying the
nature thereof and the Borrower's actions taken or proposed to be taken in
response thereto. The President, the Chief Financial Officer or the Controller
of the Borrower shall complete the form of certificate annexed as Exhibit G to
this Agreement and shall certify thereon that the Borrower is in compliance with
all financial covenants under this Agreement.
(f) Notice of Default or Events of Default. Promptly after
acquiring knowledge of the occurrence of a Default or an Event of Default (or
the occurrence of any event or existence of any condition which but for the
application of Section 5.5 would constitute a Default or Event of Default), a
certificate of the president or chief financial officer or the Controller of the
Borrower specifying the nature thereof and the Borrower's proposed response
thereto.
(g) Litigation. Promptly after (i) the occurrence thereof, the
Borrower shall deliver notice of the institution of or any development in any
action, suit, or proceeding or any governmental investigation or any
arbitration, before any court or arbitrator or any governmental or
administrative body, agency, or official, against the Borrower or any Mortgaged
Property in writing, (ii) the Borrower receives actual knowledge thereof, the
Borrower shall deliver notice of the threat of any such action, suit,
proceeding, investigation, or arbitration, or (iii) receipt thereof, the
Borrower shall deliver notice of any claims relating to the Lenders interests
or any proposal by a Governmental Authority to acquire any part of the Mortgaged
Properties (other than any such proceeding or development which, as reasonably
likely to be determined, would not constitute or result in a Material Adverse
Change).
(h) Adverse Change. Immediately after the Borrower knows of
the occurrence of any Material Adverse Change, a certificate of any Co-Chairman,
the President, any Senior Vice President, any Vice President or the Controller
or chief financial officer of the Borrower specifying the nature of such change.
(i) Shareholder Communications, Filings, Etc. Promptly upon
the mailing or filing thereof, the Borrower shall deliver copies of all
financial statements, reports, and proxy statements mailed to the Borrower's
shareholders generally, and copies of all final registration statements and
other final documents filed with the Securities and Exchange Commission (or any
successor thereto) or any national securities exchange.
(j) Title Endorsements. On or before March 31, 2001 and on or
before each March 31 occurring thereafter during the term of the Loan, title
policy endorsements which have the effect of redating the title policies
insuring the Liens of the Mortgages with no exceptions other than the Permitted
Exceptions, to be obtained at Borrower's sole cost and expense and to be dated
as of a date no later than the date which is thirty (30) days prior to the
outside date for the delivery thereof.
(k) FIRREA Appraisals. On or before the date which is sixty
(60) days after the Closing Date, FIRREA Appraisals with respect to each of the
eight Mortgaged Properties to which an appraised value is not ascribed on
Schedule 1 annexed hereto.
(l) Updated Appraisals. On or before April 30, 2001,
FIRREA Appraisals with respect to each of the Mortgaged Properties, dated as of
a date not more than 60 days prior to April 30, 2001. Such appraisals are
referred to herein , collectively, as the AUpdated Appraisals.
(M) Other Information. With reasonable promptness, such
information about the Borrower, Realty and the Mortgaged Properties as the
Administrative Agent or the Lenders may reasonably request from time to time.
Section 5.3 Certain Negative Covenants. Neither Borrower nor, with
respect to subsection (a), (m) to (t), (v), (w) or (x), any Subsidiary of
Borrower will:
(a) Indebtedness. Create, incur, assume, or suffer to
exist, any Indebtedness other than:
(i) the Indebtedness hereunder and under the
other Loan Documents; and
(ii) Indebtedness outstanding on the date
hereof which is reflected in the Borrower's financial statements referred to in
Section 4.5(a) and in Schedule 4 annexed hereto;
(iii) unsecured liabilities (not the result of
borrowing) incurred in the ordinary course of business for current purposes and
not represented by any note or other evidence of Indebtedness and which are not
past due more than 90 days;
(iv) non-recourse Indebtedness to third
parties (Permissible Assumed Indebtedness);
(v) liability to a surety under performance bonds or
similar instruments incurred in connection with the Borrower's construction of
extended stay facilities on the Borrower's property;
(vi) Indebtedness due and payable solely to
a Subsidiary of Borrower or by a Subsidiary to Borrower; and
(vii) The guaranty of lease obligations under
the Sale-Leaseback Facility;
(viii) subject to Lenders prior written consent,
which consent shall not be unreasonably withheld, and provided no Default or
Event of Default has occurred, Indebtedness arising from the refinancing of the
Indebtedness referred to in Schedule 4 annexed hereto; provided:
(a) such refinanced Indebtedness is not
secured by any of the Collateral;
(b) then existing non-recourse
Indebtedness is not exchanged for recourse (however limited) Indebtedness;
(c) Borrower, prior to and following
the closing of such refinancing, is in compliance with the covenants set forth
in this Article V; and
(d) such refinanced Indebtedness
does not make any change in, the condition or affairs of Borrower which, in any
Lender's opinion, increases its credit risk.
(b) Total Liabilities. (1) Permit there to be Total
Liabilities of Borrower, at any time, in excess of the amount equal fifty-five
percent (55%) of Gross Asset Value C Cost.
(i) Permit there to be Total Liabilities of
Borrower, at any time, in excess of the amount equal to:
(a) for the first calendar quarter of
2000, 65% of Gross Asset Value C Market;
(b) for the second calendar quarter of
2000, 60% of Gross Asset Value C Market;
(c) for the third calendar quarter of
2000, 57.5% of Gross Asset Value C Market; and
(d) for the fourth calendar quarter of
2000 and thereafter at all times up to and including the Maturity Date, 55% of
Gross Asset Value Market.
(c) Aggregate Indebtedness. (1) Permit there to be aggregate
Indebtedness of the Borrower, at any time, in excess of the amount equal to
fifty percent (50%) Gross Asset Value Cost.
(i) Permit there to be aggregate Indebtedness
of the Borrower, at any time, in excess of the amount equal to:
(a) for the first calendar quarter of
2000, 60% of Gross Asset Value Market;
(b) for the second calendar quarter of
2000, 55% of Gross Asset Value Market;
(c) for the third calendar quarter of
2000, 52.5% of Gross Asset Value Market; and
(d) for the fourth calendar quarter of
2000 and at all times thereafter up to and including the Maturity Date, 50% of
Gross Asset Value Market.
(d) Interest Expense Ratios. Maintain a ratio of EBITDA to
Interest Expense less than:
(i) for the first calendar quarter of 2000, 1.75:1.0;
(ii) for the second calendar quarter of 2000,
1.90:1.0; and
(iii) for the third calendar quarter of 2000
and at all times thereafter up to and including the Maturity Date, 2.00:1.0.
(e) Debt Service Ratios. Maintain a ratio of Adjusted EBITDA
to Debt Service less than:
(i) for the first calendar quarter of 2000,
1.25:1.0; and
(ii) for the second calendar quarter of 2000
and at all times thereafter up to and including the Maturity Date, 1.5:1.0.
(f) Implied Debt Service Ratios. Maintain a ratio of Adjusted
Pool NOI to Implied Pool Debt Service less than:
(i) for the first calendar quarter of 2000,
2.00:1.0; and
(ii2) for the second calendar quarter of 2000
and at all times thereafter up to and including the Maturity Date, 2.25:1.0.
(g) Net Worth. Maintain, at any time, a Net Worth less than
eighty five percent (85%) of its Net Worth as of December 31, 1999, adjusted
upwards (but not downwards) by eighty five percent (85%) of the net cash
proceeds and other value derived form the Borrower's issuance of equity
securities after the Closing Date.
(h) Available Amount. Permit the aggregate principal amount of
the Loan at any time to exceed $110,000,000, or the aggregate principal amount
of all borrowings of the Revolving Portion of the Loan to exceed $35,000,000.
(i) Dividends and Distributions. Make any dividend or
distribution prior to March 31, 2000. Thereafter, make any dividend or
distribution which would cause the aggregate of all dividends or distributions
made by the Borrower at any time subsequent to March 31, 2000 to exceed the
Maximum Dividend Amount, as determined as of the date of the declaration of the
dividend or distribution, provided, however, that in no event may the Borrower
make a dividend or distribution during the continuance of a Default or Event of
Default.
(j) Debt Yield. Permit there at any time to be a Debt Yield
with respect to the Mortgaged Properties of less than 20%.
(k) Loan to Appraised Value and Loan to Eligible Costs.
(i) At all times during the period commencing
on the Closing Date and ending on April 30, 2001, permit the outstanding
principal balance of the Loan to exceed an amount equal to 20% of the aggregate
Appraised Value of the Mortgaged Properties.
(ii) At all times during the period
commencing May 1, 2001 and ending on the Maturity Date, permit the outstanding
principal balance of the Loan to exceed an amount equal to 30% of the aggregate
Appraised Value of the Mortgaged Properties.
(iii) At all times during the term of the Loan, permit
the outstanding principal
amount of the Loan to exceed an amount equal to 25% of Eligible Costs applicable
to the Mortgaged Properties.
(l) Security Capital. Permit Security Capital Group
Incorporated to directly or, through a wholly-owned subsidiary, indirectly own
less than (a) fifty-one percent (51%) of the voting stock in Borrower before
dilution due to the conversion of the mortgages in favor of Archstone
Communities Trust shown on Schedule 4 or (b) forty-six percent (46%) after such
dilution.
(m) Sales, Transfers. Sell, transfer or enter into any
agreement for the sale or transfer of any of the Mortgaged Properties, other
than a sale or transfer or an agreement for the sale or transfer of a Mortgaged
Property with respect to which all conditions and requirements to the Release
thereof pursuant to Section 8.11 hereof are (as of the date of such agreement)
capable of being, and upon such sale or transfer shall be, satisfied.
(n) Liens. Create, incur, assume, or suffer to exist any Lien
on any Mortgaged Property to secure any Indebtedness of the Borrower or any
other Person, other than Permitted Encumbrances.
(o) Mergers, Sales, Etc. (i) Merge into or consolidate with
any other Person; (ii) sell, assign, lease, transfer, convey or otherwise
dispose of (in one transaction or a series of transactions) all or substantially
all of the Borrower's or such Subsidiary's assets, as the case may be, to any
Person or group (as such term is used in Section 13(d)(3) of the Exchange Act),
(iii) the liquidation or dissolution of the Borrower or such Subsidiary, as the
case may be, or the adoption of a plan by the stockholders of the Borrower or
such Subsidiary, as the case may be, relating to the dissolution or liquidation
of the Borrower or such Subsidiary, as the case may be, (iv) the acquisition by
any Person or group (as such term is used in Section 13(d)(3) of the Exchange
Act), except for Realty or Affiliates thereof, of a direct or indirect majority
interest (more than 50%) of the voting power of the capital stock of the
Borrower by way of purchase, merger or consolidation or otherwise; or (v) during
any period of two consecutive years, individuals who at the beginning of such
period constituted the Board of Directors of the Borrower (which includes any
new directors whose election by such Board of Directors or whose nomination for
election by the stockholders of the Borrower was approved by a vote of at least
two thirds (2/3) of the directors then still in office who were either directors
at the beginning of such period or whose election or nomination for election was
previously so approved) cease for any reason to constitute a majority of the
Board of Directors of the Borrower.
(p) Changes in Property or Business. Except in connection
with the development of an extended stay facility and ancillary facilities
related thereto or with the prior written consent of the Required Lenders:
(a) Make or allow any material change to be
made in the nature of the use of any Mortgaged Property, or any part thereof
from that in effect on the date hereof or the date acquired, as the case may be;
or
(b) Initiate or acquiesce in any change in any
Use Requirements now or hereafter in effect and affecting any Mortgaged Property
or any part thereof.
(q) Transactions with Affiliates. Purchase, acquire, or lease
any property from, or sell, transfer, or lease any property to, or lend or
advance any money to, or borrow any money from, or guarantee any obligation of,
or acquire any stock, obligations, or securities of, or enter into any merger or
consolidation agreement, or any management or similar agreement with, any
Affiliate, or enter into any other transaction or arrangement or make any
payments to (including, without limitation, on account of any management fees,
service fees, office charges, consulting fees, technical service charges, or tax
sharing charges) or otherwise deal with, in the ordinary course of business or
otherwise, any Affiliate on terms other than arm's-length commercially
reasonable terms (other than (i) any such transactions in effect on the Closing
Date and described in Schedule 7 annexed hereto, and (ii) any such transactions
between the Borrower and any of its wholly-owned Subsidiaries and between
wholly-owned Subsidiaries of Borrower).
(r) Use of Proceeds. Use the proceeds of any borrowing of the
Revolving Portion of the Loan for any purpose other than those set forth in
Section 2.15(e) hereof.
(s) Change of Business. Make or allow any material change in
the nature or scope of the business of the Borrower or any Subsidiary, except as
permitted under Section 4.31.
(t) Hazardous Materials. Subject to the provisions of
Section 5.5 hereof:
(i) Use or permit or suffer use of any
Mortgaged Property or any part thereof or any interest therein or conduct any
activity or operations thereon in any manner which:
(a) would involve or result in the
occurrence or presence of or exposure to Hazardous Materials at, upon, under,
across or within any Mortgaged Property or any part thereof not in the ordinary
course of operation;
(b) would violate any Relevant
Environmental Laws; or
(c) would result in the occurrence of
any Environmental Discharge.
(ii) Install or suffer or permit installation
or Presence on, in or under any Mortgaged Property or any part thereof of any
underground or above-ground containers for the storage of fuel oil, gasoline or
other petroleum products or by-products, except (i) such above-ground containers
that are required for the operation of the Mortgaged Property and that are at
all times in compliance with all Relevant Environmental Laws and any other
applicable Requirements of Law and (ii) such underground containers that are
required for the operation of the Mortgaged Property and are at all times in
compliance with all Relevant Environmental Laws and any other applicable
Requirements of Law.
(u) Projects under Development.
(i) Permit there to be any Project under
Development other than those with respect to which Borrower shall have delivered
to Agent evidence reasonably satisfactory to Agent demonstrating that such
Projects under Development are capable of being made Construction Complete using
funds readily available to Borrower.
(ii) Permit the Total Costs of Projects under
Development, at any time, to exceed
ten percent (10%) of the lesser of (i) GAV Cost and (ii) GAV Market.
(iii) Permit the aggregate amount of
Construction Budgets to exceed ten percent (10%) of the lesser of (i) GAV Cost
and (ii) GAVC Market.
(v) Guarantors. Except as provided in Section 4.30(b), permit
or suffer any Subsidiary of Borrower to not guarantee the Indebtedness
hereunder.
(w) Investments.
(i) Except as set forth in Schedule 5
annexed hereto, Borrower and its Subsidiaries shall not own or hold any direct
or indirect interest in any Capital Stock, other than (x) Capital Stock in a
Subsidiary of Borrower and (y) Capital Stock which does not and will not
constitute plan assets , as defined in Section 4.9 hereof.
(ii) Borrower and its Subsidiaries will not in
the aggregate own or hold any direct or indirect interest with respect to
unimproved land in excess of (a) five percent (5%) of the lesser of (i) GAV
Cost and (ii) GAV Market.
(iii) Borrower and its Subsidiaries will not in
the aggregate own or hold any direct or indirect interest in any mortgage or
other debt or security instrument in excess of the lesser of ten percent (10%)
of the lesser of (i) GAV Cost and (ii) GAV Market.
(iv) Borrower and its Subsidiaries will not in
the aggregate own or hold any direct or indirect interest, whether economic or
nominal, in any limited liability company, joint venture or partnership (other
than a wholly owned Subsidiary) in excess of fifteen percent (15%) of the lesser
of (i) GAV Cost and (ii) GAV Market, provided that in no event shall Borrower
or its Subsidiaries hold an interest in any such entity unless Borrower or the
applicable Subsidiary owns not less than 25% of the beneficial interests in such
entity and has the sole power at all times to direct the management and affairs
of such entity.
(v) Borrower and its Subsidiaries will not,
in the aggregate, own or hold any direct or indirect interest in unimproved
land, joint venture, limited liability company or partnership interests,
mortgages or other debt or security instruments or any other investments in
excess of twenty-five percent (25%) of the lesser of (i) GAV Cost and (ii) GAV
Market.
(x) Preferred Stock Issuance. Permit there to be any issuance
of preferred stock in Borrower or any Subsidiary Mortgagor.
Section 5.4 Material Casualties. The Borrower agrees that if at any
time prior to the repayment in full of the Loan (including, but not limited to,
at any time, prior to or after an Event of Default) any Mortgaged Property is
damaged by fire, earthquake or other casualty in such a manner or to such an
extent so that it is unlikely, in the Administrative Agent's reasonable
judgment, that such Mortgaged Property will be restored on or prior to the
Maturity Date to the same physical, leased and operating condition as it exists
prior to such casualty, the Borrower shall, within twenty (20) days of the
Administrative Agent's written request, direct that the insurance proceeds from
the casualty be delivered over to the Administrative Agent, to be applied by the
Administrative Agent to repayment of or the Borrower's obligations under this
Agreement and the other Loan Documents.
Section 5.5 Effect of Certain Representations of Covenants Being
Inaccurate or Breached. In the event that any of the representations and
warranties contained in Sections 4.11, 4.13, 4.15, 4.16, 4.17, 4.21, 4.23, 4.24,
4.26, 4.27, 4.30, 4.31 and 4.32 of this Agreement (or any representation or
warranty contained in any other Loan Document which is substantially similar to
any of the foregoing representations and warranties) are not accurate when made
or deemed made, or in the event that any of the covenants contained in Sections
5.1(c), (d)(ii), (h), (i), (j), (k) and (o) and 5.3(t) (or any covenant
contained in any other Loan Document which is substantially similar to any of
the foregoing covenants) are breached, then, notwithstanding anything to the
contrary, such breach or inaccuracy shall not constitute or be deemed a Default
or Event of Default, and Borrower shall not be deemed to have made any
misrepresentation, or breached any warranty or covenant unless and until (but
shall, at Administrative Agent's option, constitute and be deemed a Default and
Event of Default, and Borrower shall be deemed to have made such
misrepresentation, or breached such warranty or covenant, if and when):
(a) (1) Borrower is given notice by the Administrative Agent
of the circumstances which, but for this Section 5.5, would constitute such
misrepresentation, or breach of warranty or covenant and such circumstances are
not remediated (i.e, the circumstances which would otherwise constitute such
misrepresentation, or breach of warranty or covenant no longer exist) within (1)
in the case of circumstances which can be remediated by the payment of a sum of
money only, 10 days after such notice is given, and (2) in the case of all other
circumstances, thirty (30) days after such notice is given plus, if such
circumstances cannot reasonably be remediated within thirty (30) days after such
notice is given and the Borrower has during such 30-day period commenced to
remediate such circumstances and thereafter diligently pursues all necessary
efforts to effect such remediation, such additional period of time as may be
required to effect such remediation; provided, however, that if at any time
during any cure period described above regarding circumstances the cost to
remediate which are quantifiable, Borrower shall not have provided evidence
satisfactory to the Administrative Agent that the Borrower has available to it
sufficient funds (other than from borrowings pursuant to this Agreement) to
promptly effect any such remediation, then the cure period provided for above
regarding such circumstances shall immediately expire; and
(ii) upon the expiration of the applicable
cure period described in Section 5.5(a)(i), if such circumstances have not been
remediated, the aggregate principal amount of all outstanding borrowings at such
time exceeds the Eligible Maximum Availability Amount , as herein defined, at
such time. The term Remediation Amount means the amount which Borrower
certifies to the Administrative Agent in writing (Borrower hereby agreeing to so
certify such amount promptly upon the Administrative Agent's request) as being
Borrower's reasonable estimate (determined in a manner reasonably acceptable to
the Administrative Agent, the basis for which determination shall be set forth
in reasonable detail in such certification) of the aggregate cost of remediating
all circumstances which would constitute a misrepresentation or breach of
warranty or covenant of any of the representations, warranties or covenants
described above in this Section 5.5. The term Eligible Maximum Availability
Amount means, as of the date of expiration of such applicable cure period, the
maximum outstanding principal balance permitted under Section 5.3(k) as of such
date recomputed by subtracting from the Eligible Costs and the Appraised Value
of the Mortgaged Properties the amount by which the Remediation Amount exceeds,
if at all, the lesser of (x) $3,000,000.00, and (y) the greater of (A)
$300,000.00, and (B) three percent (3%) of the greater of (I) the Eligible Costs
of the Mortgaged Properties, and (II) the Appraised Value of the Mortgaged
Properties; or
(b) all circumstances which would constitute a
misrepresentation or breach of warranty or covenant of any of the
representations, warranties or covenants described above in this Section 5.5,
when taken as a whole, constitute a Material Adverse Change.
In the event that any misrepresentation or breach of warranty or covenant with
respect to one or more Mortgaged Properties occurs which, pursuant to the
provisions of this Section 5.5, constitutes or will constitute a Default and
Event of Default, then, subject to the terms hereof, Borrower shall have the
right to substitute for such affected Mortgaged Properties one or more other
properties of the Borrower or its Subsidiaries, provided that (i) all of such
proposed substitute properties are acceptable in all respects to the Lenders in
their sole, absolute and subjective discretion, (ii) all other conditions herein
to a property becoming a Mortgaged Property are satisfied and complied with, and
(iii) both before and after giving effect to such proposed substitution, no
Default or Event of Default (other than as a result of such misrepresentation or
breach of warranty or covenant) shall exist.
Section 5.6 New Subsidiaries. In the event any Person becomes a
Subsidiary after the Closing Date, the Borrower shall deliver to the
Administrative Agent within twenty (20) Business Days of such event, each of the
following items, in form and substance satisfactory to the Administrative Agent:
(a) an accession agreement in the form annexed
hereto as Exhibit K executed by such Subsidiary;
(b) the articles of incorporation, articles of organization,
certificate of limited partnership or other comparable organizational instrument
(if any) of such Subsidiary certified as of a recent date by the Secretary of
State of the State of formation of such Subsidiary;
(c) a Certificate of Good Standing or certificate of similar
meaning with respect to such Subsidiary issued as of a recent date by the
Secretary of State of the State of formation of such Subsidiary and certificates
of qualification to transact business or other comparable certificates issued by
each Secretary of State (and any state department of taxation, as applicable) of
each state in which such Subsidiary is required to be so qualified;
(d) a certificate of incumbency signed by the Secretary or
Assistant Secretary (or other individual performing similar functions) of such
Subsidiary with respect to each of the officers or other representatives of such
Subsidiary authorized to execute and deliver the Loan Documents to which such
Subsidiary is a party;
(e) copies certified by the Secretary or Assistant Secretary
of such Subsidiary (or other individual performing similar functions) of (i) the
bylaws of such Subsidiary, if a corporation, the operating agreement, if a
limited liability company, the partnership agreement, if a limited or general
partnership, or other comparable document in the case of any other form or legal
entity and (ii) all corporate, partnership, member or other similar action taken
by such Subsidiary to authorize the execution, delivery and performance of the
Loan Documents to which it is a party;
(f) an opinion of legal counsel to such Subsidiary, regarding
the due formation and good standing of such Subsidiary, the authorization,
execution, delivery and enforceability of the Loan Documents to which it is a
party, and such other matter as the Administrative Agent may reasonably request;
and
(g) such other documents and instruments as the
Administrative Agent may reasonably request.
ARTICLE VI. EVENTS OF DEFAULT
Section 6.1 Events of Default. The occurrence and continuance of any of
the following specified events shall constitute an Event of Default :
(a) Payments. The Borrower shall fail to pay (i) any principal
of the Loan when due, or (ii) within three (3) days when due (including, without
limitation, by mandatory prepayment) (1) any interest on the Loan or any fees or
(2) any other amount payable hereunder or under the other Loan Documents.
(b) Certain Property Representations and Covenants. Any
misrepresentation or breach of warranty or covenant occurs which, pursuant to
the provisions of Section 5.5 hereof, constitutes a Default and Event of
Default.
(c) Other Covenants. The Borrower or any Subsidiary of
Borrower shall fail to observe or perform any covenant or agreement (other than
those referred to in Sections 6.1(a) and (b)) and such failure shall remain
unremedied (i) in the case of any amounts payable hereunder or under the other
Loan Documents for three (3) Business Days after notice from the Administrative
Agent, (ii) in the case of covenants or agreements contained in Section 5.2(a),
(b), (c) and (d) of this Agreement, for fifteen (15) Business Days after the
occurrence thereof; or (ii) in all other cases, for thirty (30) days after the
occurrence thereof. In the event that a breach of a covenant described in clause
(ii) above cannot be cured within thirty (30) days after the occurrence thereof
and the Borrower has during such 30-day period commenced to cure such breach and
thereafter diligently pursues all necessary efforts to effect a cure, an Event
of Default shall be deemed only to have occurred if the breach either cannot be
remedied, or remains unremedied, for sixty (60) days after the occurrence
thereof.
(d) Representations. Any representation, warranty, or
statement (other than those referred to in Section 6.1(b)) made or deemed to be
made by the Borrower or any other Person (other than the Administrative Agent or
any Lender) that is a party to any Loan Document under or in connection with any
Loan Document shall have been incorrect in any material respect as of the date
hereof, or as of the date deemed to have been made.
(e) Non-Payments of Other Indebtedness. The Borrower or any
Subsidiary of Borrower shall fail to make any payment of principal of or
interest on any Indebtedness of the Borrower or any such Subsidiary (other than
any Indebtedness under this Agreement or the other Loan Documents and other than
Permissible Assumed Indebtedness) in an aggregate principal amount of not less
than $5,000,000.00 within the applicable cure period or any event specified in
any note, agreement, indenture or other document evidencing or relating to any
such Indebtedness shall occur; and the effect of such failure or event is to
accelerate, or to permit the holder of such aggregate Indebtedness or any other
Person to accelerate, the maturity of such Indebtedness; or such Indebtedness
shall be required to be prepaid (other than by a regularly scheduled required
prepayment) in whole or in part prior to its stated maturity.
(f) Defaults Under Loan Documents. The Borrower or any other
Person (other than the Administrative Agent or any Lender) that is a party to
any Loan Document shall fail to observe or perform any covenant or agreement
(other than those referred to in Sections 6.1(a) and (b)) contained in any other
Loan Document, or any default shall occur under any other Loan Document (other
than those referred to in Sections 6.1(a) and (b)) and such failure or default
shall remain unremedied (i) in the case of any amounts payable under the other
Loan Documents, for three (3) days after notice from the Administrative Agent or
the Administrative Agent, (ii) in the case of covenants or agreements similar to
the covenants or agreements contained in Section 5.2(a), (b), (c) and (d) of
this Agreement, for fifteen (15) Business Days after the occurrence thereof; or
(iii) in all other cases, thirty (30) days after the occurrence thereof. In the
event that a breach of a covenant described in clause (ii) above cannot be cured
within thirty (30) days after the occurrence thereof and the Borrower has during
such 30-day period commenced to cure such breach and thereafter diligently
pursues all necessary efforts to effect a cure, an Event of Default shall be
deemed only to have occurred if the breach either cannot be remedied, or remains
unremedied, for sixty (60) days after the occurrence thereof.
(g) Bankruptcy. The Borrower shall commence a voluntary case
concerning itself under Title 11 of the United States Code entitled ABankruptcy
as now or hereafter in effect, or any successor thereto (the ABankruptcy Code );
or an involuntary case is commenced against the Borrower and the petition is not
dismissed within ninety (90) days, after commencement of the case; or a
custodian (as defined in the Bankruptcy Code) is appointed for, or takes charge
of, all or any substantial part of the property of the Borrower; or the Borrower
commences any other proceeding under any reorganization, arrangement, adjustment
of debt, relief of debtors, dissolution, insolvency, or liquidation or similar
law of any jurisdiction whether now or hereafter in effect relating to the
Borrower or there is commenced against the Borrower any such proceeding which
remains undismissed for a period of ninety (90) days; or the Borrower is
adjudicated insolvent or bankrupt; or any order of relief or other order
approving any such case or proceeding is entered; or the Borrower suffers any
appointment of any custodian or the like for it or any substantial part of its
property to continue undischarged or unstayed for a period of ninety (90) days;
or the Borrower makes a general assignment for the benefit of creditors; or the
Borrower shall fail to pay, or shall state that it is unable to pay, or shall be
unable to pay, its debts generally as they become due; or the Borrower shall
call a meeting of its creditors with a view to arranging a composition or
adjustment of its debts; or the Borrower shall by any act or failure to act
indicate its consent to, approval of, or acquiescence in any of the foregoing;
or any action is taken by the Borrower for the purpose of effecting any of the
foregoing; or any of the foregoing shall occur with respect to any Subsidiary of
Borrower.
(h) Money Judgment. A judgment or order for the payment of
money in excess of $5,000,000 shall be rendered against the Borrower or any
Subsidiary of Borrower and such judgment or order shall continue unsatisfied (in
the case of a money judgment) and in effect for a period of thirty (30) days
during which execution shall not be effectively stayed or deferred (whether by
action of a court, by agreement, or otherwise) (or, if such judgment is covered
by insurance, such longer period during which the Borrower or such Subsidiary is
appealing or otherwise contesting such judgment in good faith).
(i) Cessation. Borrower or, without the prior consent of all
Lenders, which consent may not be unreasonably withheld, any Subsidiary of
Borrower which is not an Urban Subsidiary (as hereinafter defined) ceases, or
threatens to cease, to carry on all or a substantial part of its business. As
used herein, an Urban Subsidiary is a Subsidiary of Borrower which has
mortgaged property to the Administrative Agent, as agent, pursuant to the credit
facility referred to in subsection (j) below.
(j) Sale-Leaseback Facility. A default shall have occurred
under the Sale-Leaseback Facility and shall remain uncured beyond the expiration
of any applicable notice or grace period.
Section 6.2 Global Remedies. Upon the occurrence and continuation of
an Event of Default, and at any time thereafter, if any Event of Default shall
then be continuing, the Required Lenders may, by written notice to the Borrower,
take any or all of the following actions, without prejudice to the rights of the
Lenders to enforce its claims against the Borrower: (i) declare the Loan
terminated, whereupon the Loan shall terminate immediately; (ii) declare all or
any portion of the principal of and any accrued interest on the Loan and all
other obligations owing hereunder and under the other Loan Documents, to be,
whereupon the same shall become, forthwith due and payable without presentment,
demand, protest, or other notice of any kind, all of which are hereby waived by
the Borrower; (iii) foreclose on any Collateral concurrently or in such order as
the Administrative Agent may from time to time see fit; or (iv) take any action
permitted under any Loan Document; provided, that, if any Event of Default
specified in Section 6.1(g) shall occur, the actions specified in clauses (i)
and (ii) above shall be deemed to have immediately and automatically occurred
without the giving of any notice to the Borrower.
Section 6.3 Marshalling Waiver of Certain Rights; Recapture. Neither
the Administrative Agent nor the Lenders shall be under any obligation to
xxxxxxxx any assets in favor of the Borrower or any other party or against or in
payment of any or all of the obligations of such parties. To the extent
permitted by law the Borrower waives and renounces the benefit of all valuation,
appraisement, homestead, exemption, stay, redemption, and moratorium rights
under or by virtue of the constitution and laws of the state in which the
Mortgaged Properties are located and of any other state or of the United States,
now existing or hereafter enacted. To the extent the Administrative Agent or any
Lender receives any payment by or on behalf of the Borrower, which payment or
any part thereof is subsequently invalidated, declared to be fraudulent or
preferential, set aside or required to be repaid to the Borrower or its estate,
trustee, receiver, custodian, or any other party under any bankruptcy law, state
or federal law, common law, or equitable cause, then to the extent of such
payment or repayment, the obligation or part thereof which has been paid,
reduced, or satisfied by the amount so repaid shall be reinstated by the amount
so repaid and shall be included within the liabilities of the Borrower to such
party as of the date such initial payment, reduction, or satisfaction occurred,
together with interest at the Default Rate. The Borrower agrees that (i) the
Administrative Agent on behalf of the Lenders shall have the right to pursue all
of its rights and remedies in one proceeding, or separately and independently in
separate proceedings from time to time, as the Administrative Agent, in its
reasonable discretion, shall determine from time to time, (ii) the Collateral
may be sold at such proceeding or proceedings in one or more sales and in such
portions or combinations as the Administrative Agent, in its sole and absolute
discretion, shall determine, (iii) the Administrative Agent on behalf of the
Lenders shall not be required to xxxxxxxx assets, sell any of the Collateral in
any inverse order of alienation, or be subject to any Aone action or Aelection
of remedies law or rule, (iv) the exercise by the Lenders of any remedies
against any one item of Collateral will not impede the Lenders from subsequently
or simultaneously exercising remedies against any other item of Collateral, and
(v) all Liens and other rights, remedies, or privileges provided to the
Administrative Agent and the Lenders under this Agreement and the other Loan
Documents shall remain in full force and effect until the Administrative Agent
and the Lenders have exhausted all of their remedies against the Collateral and
all of the Collateral has been foreclosed, sold or otherwise realized upon in
satisfaction of the Promissory Notes and the other obligations of the Borrower
to the Administrative Agent and the Lenders. Each Lender and its officers,
directors, shareholders, employees, counsel and agents shall not incur any
liability as a result of the sale of the Collateral, or any part thereof, in
accordance with the provisions of this Agreement or any Loan Document, or for
the failure to sell or offer for sale the Collateral, or any part thereof, for
any reason whatsoever. The Borrower waives any claims against each Lender and
its officers, directors, shareholders, employees, counsel and agents arising
with respect to the price at which the Collateral, or any part thereof, may have
been sold by reason of the fact that such price was less than the aggregate
amount of the indebtedness due under the Promissory Notes, this Agreement and
the other Loan Documents.
Section 6.4 Application of Proceeds
(a) All proceeds received by the Administrative Agent or the
Lenders in respect of the repayment of any sums due hereunder or in connection
with a foreclosure sale of all or any portion of the Collateral after the
occurrence of an Event of Default shall be applied, first, to the costs of
enforcement of the Lenders rights hereunder and under the other Loan Documents;
second, to pay any accrued and unpaid interest (including all interest owing at
the Default Rate), the principal amount of the Loan and any unpaid fees payable
under this Agreement and the other Loan Documents in such order of priority as
the Administrative Agent, in its sole and absolute discretion shall determine
but subject to the rights of the Lenders; and third, if any excess proceeds
exist, to the Borrower or any party entitled thereto as a matter of law. If the
amount of all proceeds received in liquidation of the Collateral which shall be
applied to payment of the indebtedness due in respect of this Agreement, the
Promissory Notes and the Loan Documents shall be insufficient to pay all such
indebtedness or obligations in full, the Borrower acknowledges that it shall
remain liable for any deficiency, together with interest thereon and costs of
collection thereof (including reasonable counsel fees and legal expenses).
(b) The Administrative Agent shall have the right, but not the
obligation, to deposit any proceeds in its possession which are available under
clause third of Section 6.4(a) above into a court of competent jurisdiction for
determination by such court of the disposition of such excess proceeds and upon
such deposit, the Administrative Agent shall have no further liability with
respect to such proceeds. All costs and expenses of the Administrative Agent in
connection with such action may be deducted or charged by the Administrative
Agent against such excess proceeds and shall otherwise be reimbursed by the
Borrower upon demand. The Administrative Agent shall have the right, but not the
obligation, to request and rely on the instructions of the Borrower in
connection with the disposition of any such excess proceeds and, upon compliance
with such instructions, shall have no further liability with respect to such
proceeds.
Section 6.5 Attorneys in Fact. The Borrower hereby makes,
constitutes and appoints the Administrative Agent, and its agents and designees,
the true and lawful agents and attorneys-in-fact of the Borrower, with full
power of substitution, to take any or all of the following actions during the
continuance of an Event of Default: (i) to receive, open and dispose of all mail
addressed to the Borrower relating to the Collateral, (ii) to notify and direct
the United States Post Office authorities by notice given in the name of the
Borrower and signed on its behalf, to change the address for delivery of all
mail addressed to the Borrower relating to the Collateral to an address to be
designated by the Administrative Agent, and to cause such mail to be delivered
to such designated address where the Administrative Agent may open all such mail
and remove therefrom any notes, checks, acceptances, drafts, money orders or
other instruments in payment of the Collateral in which the Administrative Agent
has a security interest hereunder and any documents relative thereto, with full
power to endorse the name of the Borrower upon any such notes, checks,
acceptances, drafts, money orders or other form of payment or on Collateral or
security of any kind and to effect the deposit and collection thereof, and the
Administrative Agent shall have the further right and power to endorse the name
of the Borrower on any documents otherwise relating to such Collateral, and
(iii) to do any and all other things necessary or proper to carry out the intent
of this Agreement and to perfect and protect the liens and rights of the
Administrative Agent created under this Agreement, including, without
limitation, to claim, bring suit, settle or adjust any insurance proceeds claims
relating to the Collateral. The Borrower agrees that neither the Lenders nor any
of their officers, directors, shareholders, employees, counsel, agents,
designees or attorneys-in-fact will be liable for any acts of commission or
omission, or for any error of judgment or mistake of fact or law, except for any
acts of gross negligence or willful misconduct. The powers granted hereunder are
coupled with an interest and shall be irrevocable during the term hereof.
ARTICLE VII. AGENCY AND INTERCREDITOR RELATIONSHIPS
Section 7.1 Appointment. Each Lender hereby irrevocably designates
and appoints Commerzbank AG, New York Branch as the contractual representative
of such Lender under the Loan Documents, and each such Lender irrevocably
authorizes Commerzbank AG, New York Branch to act as the contractual
representative for such Lender, to take such action on its behalf under the
provisions of this Agreement and the Loan Documents and to exercise such powers
and perform such duties as are expressly delegated to the Administrative Agent
by the terms of this Agreement and the Loan Documents, together with such other
powers as are reasonably incidental thereto. The Administrative Agent shall not
have any duties or responsibilities, except those expressly set forth in this
Agreement and the Loan Documents, or any fiduciary relationship with any Lender,
and no implied covenants, functions, responsibilities, duties, obligations or
liabilities on the part of the Administrative Agent shall be read into any of
the Loan Documents or otherwise exist against the Administrative Agent. The
provisions of this Article VII are solely for the benefit of the Administrative
Agent, the Administrative Agent and the Lenders, and the Borrower shall not have
any rights as a third party beneficiary or otherwise under any of the provisions
of this Article VII. In performing its respective functions and duties under the
Loan Documents, the Administrative Agent shall act solely as the contractual
representatives of the Lenders and do not assume nor shall the Administrative
Agent be deemed to have assumed any obligation or relationship of trust or
agency with or for the Borrower or any of such party's respective successors and
assigns.
Section 7.2 Delegation of Duties. The Administrative Agent may
execute any of their duties under the Loan Documents by or through agents or
attorneys-in-fact and shall be entitled to advice of counsel (including their
internal counsel) concerning all matters pertaining to such duties. The
Administrative Agent shall not be responsible for the negligence or misconduct
of any agents or attorneys-in-fact selected by it with reasonable care.
Section 7.3 Exculpatory Provisions. The Administrative Agent shall not be
(a) liable for any action lawfully taken or omitted to be taken by it, or any
Person described in Section 7.2, under or in connection with any Loan Document
(except for those actions arising from the gross negligence or willful
misconduct of the Administrative Agent), or (b) responsible in any manner to any
of the Lenders for (i) any recitals, statements, representations or warranties
made by the Borrower contained in any Loan Document, or by the Borrower in any
certificate, report, statement or other document referred to or provided for in,
or received under or in connection with any Loan Document or (ii) the value,
validity, effectiveness, genuineness, enforceability or sufficiency of any Loan
Document or any such certificate, report, statement or other document, or (iii)
any failure of the Borrower, or any Lender to perform or observe its respective
obligations hereunder or thereunder. Except as expressly required to do so under
the Loan Documents, the Administrative Agent shall not be under any obligation
to any Lender to ascertain or to inquire as to the observance or performance of
any of the agreements contained in, or conditions of any Loan Document, or to
inspect the properties, or the books or records of the Borrower. This Section
7.3 is intended to govern solely the relationship between each of the
Administrative Agent, on the one hand, and the Lenders, on the other.
Section 7.4 Reliance by the Administrative Agent. The Administrative Agent
shall be entitled to rely, and shall be fully protected in relying, upon any
writing, resolution, notice, consent, certificate, affidavit, letter, cablegram,
telegram, telecopy, telex or teletype message, statement, order or other
document or conversation (including by telephone) believed by it to be genuine
and correct and to have been signed, sent or made by the proper Person or
Persons and upon advice and statements of legal counsel (including, without
limitation, its internal counsel and counsel to the Borrower), independent
accountants and other experts selected by the Administrative Agent. The
Administrative Agent shall be fully justified in failing or refusing to take any
action under any Loan Document unless it shall first receive such advice or
concurrence of the Lenders required pursuant to this Agreement or it shall first
be indemnified to its satisfaction by the Lenders against any and all liability
and expense which may be incurred by it by reason of taking or continuing to
take any such action.
Section 7.5 Notices
(a) The Administrative Agent shall not be deemed to have
knowledge or notice of the occurrence of any Default or Event of Default unless
(i) such party has received notice from a Lender or the Borrower referring to
this Agreement, describing such Default or Event of Default and stating that
such notice is a notice of default or (ii) such party, in its capacity as the
Administrative Agent, has actual knowledge of such Default or Event of Default.
In the event that the Administrative Agent receives such a notice or obtains
such actual knowledge, it shall promptly give notice thereof to the Lenders. The
Administrative Agent shall take such action with respect to such Default or
Event of Default as shall be directed by the Required Lenders; provided that
unless and until the Administrative Agent shall have received such directions,
the Administrative Agent may (but shall not be obligated to) take such action,
or refrain from taking such action, with respect to such Default or Event of
Default as the Administrative Agent shall deem advisable and in the best
interests of the Lenders. The Administrative Agent shall take no action with
respect to a Default or Event of Default except as directed by the
Administrative Agent in writing and shall have no liability to the Borrower or
its Subsidiaries or any Lender for acting on and carrying out any such
direction.
(b) Each Lender agrees that it shall promptly notify the
Administrative Agent in writing after it first has knowledge of any Default or
Event of Default or of any matter which in such Lender's judgment adversely
affects any Lender's respective interests in the Loan, which notice will
describe the Default or Event of Default or matter in reasonable detail. The
Administrative Agent shall give a copy of any such notice received by the
Administrative Agent to the other Lenders.
(c) The Administrative Agent shall promptly give copies of the
financial reports it receives pursuant to Sections 5.2(a) and (b) hereof to the
other Lenders. The Administrative Agent shall promptly give copies of the
financial reports it receives pursuant to Sections 5.2(c) to (e) hereof to the
other Lenders.
Section 7.6 Non-Reliance on the Administrative Agent and Other Lenders.
Each Lender expressly acknowledges that neither the Administrative Agent nor any
of its officers, directors, employees, agents, attorneys-in-fact or affiliates
has made any representations or warranties to it and that no act by either of
the Administrative Agent hereafter taken, including, without limitation, any
review of the affairs of the Borrower shall be deemed to constitute any
representation or warranty by the Administrative Agent. Each Lender represents
and warrants to the Administrative Agent that it has, independently and without
reliance upon the Administrative Agent or any other Lender and based on such
documents and information as it has deemed appropriate, (a) made its own
appraisal of and investigation into the business, operations, property,
prospects, financial and other condition, creditworthiness and solvency of the
Borrower, (b) satisfied itself as to the due execution, legality, validity,
enforceability, genuineness, sufficiency and value of all of the Loan Documents
and all other instruments and documents furnished pursuant to any Loan Document,
and (c) made its own decision as to its Percentage of the Loan pursuant to this
Agreement. Each Lender also represents that it will, independently and without
reliance upon the Administrative Agent or any other Lender, and based on such
documents and information as it shall deem appropriate at the time, continue to
make its own credit analyses, appraisals and decisions in taking or not taking
action under this Agreement, and to make such investigation as it deems
necessary to inform itself as to the business, operations, property, prospects,
financial and other condition and creditworthiness of the Borrower. Except for
notices, reports and other documents expressly required pursuant to the Loan
Documents to be furnished by the Administrative Agent to the Lenders, the
Administrative Agent, as applicable, shall not have any duty or responsibility
to provide any Lender with any credit or other information concerning the
business, operations, property, prospects, financial and other condition or
creditworthiness of the Borrower which may come into the possession of the
Administrative Agent or any of their officers, directors, employees, agents,
attorneys-in-fact or affiliates.
Section 7.7 Indemnification. The Lenders agree to indemnify each of the
Administrative Agent (in their capacities as such) and their officers,
directors, employees, representatives and agents (to the extent not reimbursed
by the Borrower and without limiting the obligation, if any, of the Borrower to
do so), ratably in accordance with their Percentages, from and against any and
all liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements of any kind or nature whatsoever
(including, without limitation, the fees and disbursements of counsel for the
Administrative Agent or such Person in connection with any investigative,
administrative or judicial proceeding commenced or threatened, whether or not
the Administrative Agent or such Person shall be designated a party thereto)
that may at any time be imposed on, incurred by or asserted against the
Administrative Agent or such Person as a result of, or arising out of, or in any
way related to or by reason of, any of the transactions contemplated by the Loan
Documents or the execution, delivery or performance of any Loan Document (but
excluding any such liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements resulting solely
from the gross negligence or willful misconduct of the Administrative Agent or
such Person as determined by a court of competent jurisdiction). The agreements
in this subsection shall survive the payment of the Promissory Notes and all
other amounts payable hereunder.
Section 7.8 Individual Capacity. The Administrative Agent and its
Affiliates may make loans to, accept deposits from and generally engage in any
kind of business with the Borrower and any of its Affiliates as though it were
not the Administrative Agent hereunder. With respect to portions of the Loan
made or renewed by it and any Promissory Note issued to it, the Administrative
Agent shall have the same rights and powers under this Agreement as any Lender
and may exercise the same as though they were not the Administrative Agent.
Section 7.9 The administrative Agents Resignation. The Administrative Agent
may resign at any time by giving notice thereof to the Administrative Agent, the
other Lenders and the Borrower. If the Administrative Agent's resignation is
given in conjunction with an assignment of the Administrative Agent's interest
in the Promissory Note held by the Administrative Agent to another Person or
Persons, the Administrative Agent, with the consent of the Required Lenders,
shall have the right to name a successor Administrative Agent by giving notice
thereof to the Administrative Agent, the Borrower and the other Lenders.
Otherwise, upon the resignation of the Administrative Agent, the Required
Lenders shall designate within forty-five (45) days in writing another Person as
the successor Administrative Agent. If such proposed successor Administrative
Agent agrees in writing to act as the Administrative Agent in accordance with
the terms hereof, such successor Administrative Agent shall thereupon succeed to
and become vested with all the rights, powers, privileges, duties and
obligations of the resigning Administrative Agent, and the resigning
Administrative Agent shall be discharged from its duties and obligations as the
Administrative Agent under this Agreement. After any retiring Administrative
Agent's resignation hereunder, the provisions of this Article VII shall inure to
its benefit as to any actions taken or omitted to be taken by it while it was
the Administrative Agent under this Agreement.
Section 7.10 Appointment of a Substitute Administrative Agent. Commerzbank
AG, New York Branch shall be the initial Administrative Agent under this
Agreement and the Loan Documents until the Loan Documents have been terminated
and the Lenders have been paid in full. In the event that the Administrative
Agent determines that it is not in the best interest of the Administrative Agent
to continue to act as the Administrative Agent, then the Administrative Agent
may, at its option and upon thirty (30) days prior written notice to the
Borrower and the Lenders, request a substitute Administrative Agent be selected
in accordance with the terms of this Section to act as the Administrative Agent
with respect to such matters. Within fifteen (15) days after receipt of such
notice, the Required Lenders shall select a proposed substitute agent and shall
notify the Borrower of the identity of such proposed substitute agent. In
addition, the Required Lenders, on not less than thirty (30) days notice to the
Administrative Agent, may elect to appoint a substitute Administrative Agent in
the event that the Administrative Agent has acted hereunder with willful
misconduct, gross negligence or exhibited a continuing pattern of negligence
with respect to its duties and obligations hereunder. Provided that no Event of
Default shall have occurred and be continuing, Borrower shall have the right to
approve any such proposed substitute agent. The succeeding substitute
Administrative Agent shall have all the rights, powers and duties of the
Administrative Agent and the term Administrative Agent shall mean such
substitute Administrative Agent, effective upon its appointment. In the event
that the substitute Administrative Agent wishes to resign, it may do so upon
thirty (30) days prior notice to the Borrower, the Administrative Agent and the
Lenders, and a new substitute Administrative Agent shall be appointed in
accordance with this Section. After any retiring substitute Administrative
Agent's resignation hereunder as substitute Administrative Agent, the provisions
of this Section 7.10 and Section 8.4 hereof shall inure to the benefit of such
retired substitute Administrative Agent as to any actions taken or omitted to be
taken by it while it was substitute Administrative Agent under this Agreement.
Section 7.11 Loans. Each Lender shall make available to the Borrower such
Lender's portion of the Loan subject to and in accordance with the provisions of
the Loan Documents. The Borrower shall look solely to each Lender for the
performance of such Lender's obligations, covenants and agreements under the
Loan Documents on the part of each Lender to be performed or observed with
respect to each such portion of the Loan, subject to and upon the conditions,
limitations and restrictions set forth herein and in the other Loan Documents,
as evidenced by the signature of each such party hereto. In the event any Lender
has not made available its Percentage of any borrowing, the Administrative Agent
may (but shall not be obligated to), and each Lender authorizes the
Administrative Agent to, advance for such Lender's account, pursuant to the
terms hereof, the amount of the borrowing to be made by such Lender and each
Lender agrees to reimburse the Administrative Agent in immediately available
funds for any amount so advanced on its behalf. If any such reimbursement is not
made in immediately available funds on the same day on which the Administrative
Agent shall have made such amount available on behalf of any Lender, such Lender
shall also pay interest thereon to the Administrative Agent at the Federal Funds
Rate.
Section 7.12 Priority of Loans. Each Lender's portion of the Loan shall be
of equal priority with each other Lender's portion of the Loan, and no portion
of the Loan shall have priority or preference over any other portion of the Loan
or the security therefor, except as provided in Sections 7.20 and 7.24 hereof.
Section 7.13 Books and Records. The Administrative Agent will keep
customary books and records relating to all borrowings hereunder, and such books
and records shall be available at the Administrative Agent's office for the
Lenders reasonable inspection during the Administrative Agent's normal business
hours. The original Loan Documents shall be kept at the New York office of the
Administrative Agent or at such other office of the Administrative Agent or at
such other place as may be designated from time to time by the Administrative
Agent and shall be made available to any Lender for inspection at such office
within a reasonable period of time following such Lender's written request to
inspect same.
Section 7.14 Decisions of Lenders. Except as expressly set forth in
Sections 7.15 and 7.16 hereof, all decisions, consents, waivers, approvals and
other actions (collectively, ADecisions ) authorized to be taken under or in
connection with this Agreement and the other Loan Documents by any Lender shall
be taken by the Administrative Agent in its discretion reasonably exercised,
subject to the provisions of Section 7.4 hereof. Except as expressly provided in
Sections 7.15 and 7.16 hereof, the Administrative Agent (i) may consent or
withhold consent to any action by the Borrower, (ii) may exercise or refrain
from exercising any power, rights or remedies hereunder or under the other Loan
Documents or otherwise in respect of the borrowings made hereunder, and/or (iii)
may waive any conditions in any Loan Documents, so long as such consent,
exercise or waiver would not, in the Administrative Agent's judgment reasonably
exercised, represent a departure from the standards followed by the
Administrative Agent in the administration of loans held by the Administrative
Agent entirely for its own account. The Administrative Agent may request a
Decision with respect to matters described in Sections 7.15 and 7.16 hereof at
any time by making a request for such Decision in writing to all of the Lenders.
Any such request (x) shall contain an adequate description together with
relevant background information of the Decision being requested, (y) shall
specify the reasons for such request, and (z) shall state the effect of not
responding to such notice as set forth in this Section. The Administrative Agent
will provide the Lenders with such additional information as the Lenders may
reasonably request to assist such Lenders in reaching a Decision, to the extent
such information is in the Administrative Agent's possession or under its
control. The requested Decision shall be deemed approved by the Lenders if and
when the Administrative Agent receives written approval from the required
percentage of the Lenders as specified in Sections 7.15 and 7.16 hereof, as the
case may be. If a Lender does not deliver to the Administrative Agent a written
objection thereto within ten (10) Business Days after hand delivery, mailing or
delivery to an express courier service of the request by the Administrative
Agent, the Administrative Agent shall make a second written request for a
Decision from that Lender. If the Lender does not deliver to the Administrative
Agent a written objection within five (5) Business Days after hand delivery,
mailing or delivery to an express courier service of such a second request, such
Lender shall be deemed to have approved the requested Decision. If the
Administrative Agent is unable to contact the usual representatives of a Lender
for any reason, the Administrative Agent will make a good faith effort to
contact other representatives of such Lender as necessary to reach a Decision
within the allotted time. To the extent that the Administrative Agent reasonably
deems necessary, any such Decision may also be requested telephonically by the
Administrative Agent from each Lender with such telephonic request to be
confirmed in writing by the Administrative Agent. Any Decision as to which the
Administrative Agent has made telephonic requests for approval shall be deemed
approved by the Lenders after the Administrative Agent has received the written
approval of the required percentage of the Lenders as specified in Sections 7.15
and 7.16 hereof. The Borrower shall be promptly notified of the Decision, if
such Decision was made in response to a request by the Borrower.
Section 7.15 Approvals by the Lenders. No amendment, supplement,
modification or waiver shall be effective unless consented to in writing by the
Required Lenders; provided, however, that any amendment, supplement,
modification or waiver which adds, deletes, changes or waives any provisions of
the Loan Documents the effect of which is to (i) extend either the Maturity Date
or any installment or required prepayment of any borrowings; (ii) reduce the
rate or extend the time of payment of interest on any borrowings; (iii) reduce
the principal amount of any borrowings; (iv) reduce the fees payable under this
Agreement and the other Loan Documents, or any other fee payable to the Lenders
or extend the due date of any such fee; (v) change any Lender's portion of the
Loan or the amount of any borrowing of any Lender (except to the extent
permitted by Sections 7.18 and 7.19 hereof); (vii) forgive any Indebtedness of
Borrower or any Subsidiary of Borrower; (viii) change any allocation of payments
among the Lenders, (ix) change any provision of this Section 7.15 or Section
7.16 or the definition of Required Lenders; (x) modify any financial covenants
or waive any Default or Event of Default (except as provided in Section 7.16),
(xi) release any guaranty, (xii) waive or release any lien on any of the
Mortgaged Properties (except as provided in Section 8.11) or (xiii) commence any
judicial or nonjudicial foreclosure proceeding (except as provided in Section
7.16), shall be ineffective in each case without the written consent of all the
Lenders. Furthermore, no amendment, supplement, modification or waive shall
amend, modify or waive any provision of any Loan Document, if the effect thereof
is to affect the rights or duties of the Administrative Agent, without the
written consent of the Administrative Agent. Any such amendment, supplement,
modification or waiver shall apply to each of the Lenders equally and shall be
binding upon the Borrower, the Lenders, Administrative Agent, the Administrative
Agent and all future holders of the Promissory Notes. In the case of any waiver,
the Borrower, the Lenders, the Administrative Agent shall be restored to their
former position and rights hereunder and under the outstanding Promissory Notes,
and any Default or Event of Default waived shall be deemed to be cured and not
continuing, but no such waiver shall extend to any subsequent or other Default
or Event of Default, or impair any right consequent thereon.
Section 7.16 Approvals by the Required Lenders
(a) Upon the Administrative Agent's receipt of a notice of
default (as defined in Section 7.5(a) hereof) with respect to an Event of
Default, the Administrative Agent shall consult with the Lenders in respect of
any such Event of Default to determine a course of action which is acceptable to
the Required Lenders. Subject to Section 7.15 hereof, the Administrative Agent
shall pursue any such course of action approved in writing by the Required
Lenders in respect of any such Event of Default, including, without limitation,
acceleration of the Loan. In the event that the Required Lenders cannot decide
which remedies, if any, are to be pursued, the Administrative Agent may commence
proceedings on behalf of the Lenders; provided, however, that if at any time
thereafter the Required Lenders shall direct that a different or additional
remedial action shall be taken, such different or additional remedial action
shall be taken in lieu of or in addition to such proceedings.
(b) The Borrower hereby consents and agrees to the provisions
of Sections 7.14 through 7.16 and any modifications thereof entered into by the
Administrative Agent and the Lenders of such provisions and specifically
acknowledges and agrees that, notwithstanding any provisions in the Loan
Documents requiring action by the ALenders or similar provisions in connection
with the declaration of an Event of Default, the acceleration of the
indebtedness evidenced by the Loan Documents and/or the exercise of any remedies
under the Loan Documents, the Administrative Agent is hereby empowered to act on
behalf of the Lenders in accordance with the provisions hereof and the authority
of the Administrative Agent with respect to any action taken by the
Administrative Agent pursuant to and in accordance with this Agreement shall not
be contested by the Borrower by reason of any different or conflicting provision
contained in any of the Loan Documents.
Section 7.17 Participation. Any Lender may at any time after the execution
and delivery of this Agreement, sell to one or more Persons (each a AParticipant
) participating interests in any borrowing owing to such Lender, any Promissory
Note held by such Lender and/or any other interest of such Lender hereunder (in
respect of any such Lender, its ACredit Exposure ). Notwithstanding any such
sale by a Lender of participating interests to a Participant, such Lender's
rights and obligations hereunder shall remain unchanged, such Lender shall
remain solely responsible for the performance thereof, such Lender shall remain
the holder of any such Promissory Note for all purposes hereunder (except as
expressly provided below), and the Administrative Agent shall continue to deal
solely and directly with such Lender in connection with such Lender's rights and
obligations hereunder. The Borrower also agrees that each Participant shall be
entitled to the benefits of Sections 2.11, 2.13 and 2.14 hereof. Each Lender
agrees that any agreement between such Lender and any such Participant in
respect of such participating interest shall not restrict such Lender's right to
agree to any amendment, supplement, waiver or modification to any Loan Document,
except where the result of any of the foregoing would be to extend the final
maturity of any borrowing or any regularly scheduled installment thereof or
reduce the rate or extend the time of payment of interest thereon or reduce the
principal amount thereof.
Section 7.18 Assignments
(a) Any Lender may, in the ordinary course of its business and
in accordance with applicable law, at any time after the execution and delivery
of this Agreement and from time to time assign to any Lender or any other
Eligible Assignee (each a APurchasing Lender ) all or any part of its Credit
Exposure in amounts not less than $10,000,000. The Borrower, the Administrative
Agent and the Lenders agree that to the extent of any assignment, the Purchasing
Lender shall be deemed to have the same rights and benefits under the Loan
Documents and the same obligation to share pursuant to Section 7.24 hereof as it
would have had if it had been a Lender which was one of the original parties
hereto. The consent of the Administrative Agent and, provided no Default or
Event of Default has occurred, the Borrower shall be required prior to an
assignment becoming effective, which consents will not be unreasonably withheld,
delayed or conditioned; provided that the Administrative Agent shall be entitled
to continue to deal solely and directly with the assignor Lender in connection
with the interests so assigned to the Purchasing Lender unless and until such
Purchasing Lender executes a supplement to this Agreement, substantially in the
form of Exhibit L hereto (a AForm of Assignment and Assumption Agreement ).
(b) Upon (i) execution of a Form of Assignment and Assumption
Agreement, (ii) delivery of an executed copy thereof to the Borrower, the
Administrative Agent, (iii) payment by such Purchasing Lender to such transferor
Lender of an amount equal to the purchase price agreed between such transferor
Lender and such Purchasing Lender, and (iv) payment to the Administrative Agent
of an assignment fee of $2500 for each assignment by any Lender of all or any
portion of its Credit Exposure, such transferor Lender shall be released from
its obligations hereunder to the extent of such assignment and such Purchasing
Lender shall for all purposes be a Lender party to this Agreement and shall have
all the rights and obligations of a Lender under this Agreement to the same
extent as if it were an original party hereto, and no further consent or action
by the Borrower, the Lenders or the Administrative Agent shall be required. Such
Form of Assignment and Assumption Agreement shall be deemed to amend this
Agreement to the extent, and only to the extent, necessary to reflect the
addition of such Purchasing Lender as a Lender. Promptly after the consummation
of any transfer to a Purchasing Lender pursuant hereto, the transferor Lender,
the Administrative Agent and the Borrower shall make appropriate arrangements so
that a replacement Promissory Note is issued to such transferor Lender and a new
Promissory Note is issued to such Purchasing Lender, in each case in principal
amounts reflecting such transfer. The Purchasing Lender shall furnish to
Borrower and the Administrative Agent, at least 10 days prior to the date on
which the first payment to such Purchasing Lender is due, the documents
described in Section 2.17(b) hereof.
(c) Commerzbank AG, New York Branch, agrees that it will not
assign to a Purchasing Lender any part of its Credit Exposure such that, after
giving effect to such assignment, Commerzbank AG, New York Branch's Percentage
shall be less than twenty five percent (25%), unless its failure to do so shall
(or in Commerzbank AG, New York Branch's reasonable judgment is likely to)
constitute a violation of any Requirement of Law. Notwithstanding the foregoing,
nothing herein shall restrict or limit Commerzbank AG, New York Branch, from
selling a participating interest in any portion, or all, of its Credit Exposure.
Section 7.19 Withholding. Notwithstanding anything to the contrary herein,
no Participant or other assignee of all or any part of the Credit Exposure of
any Lender (each, a ANon-Party Holder ), other than a Purchasing Lender, shall
be entitled to any of the benefits of Section 2.16 hereof.
Section 7.20 Amounts Received by Lenders. Each Lender agrees that it shall
act as a trustee for the benefit of the other Lenders to the extent of the
respective interests of the other Lenders in the Loan with respect to all sums
of any kind paid to or received by such Lender in payment of all or a portion of
the Loan by or on behalf of the Borrower.
Section 7.21 No Joint Venture. Neither the execution of this Agreement nor
the selling of an interest in the Loan nor any agreement to share in profits or
losses as provided herein is intended to be, nor shall it be construed to be,
the formation of a partnership or joint venture among the parties to this
Agreement.
Section 7.22 Acknowledgement by Parties Hereto. The agreement to and
acceptance of this Agreement by the parties hereto, indicated by the execution
of this Agreement, shall evidence (a) each party's acceptance of all the terms
and conditions of this Agreement and the other Loan Documents and (b) each
party's consent to the Administrative Agent acting as the contractual
representatives on behalf of the Lenders with regard to all aspects of the
administration, enforcement and collection of the Loan and to all matters
pertaining to the Loan Documents as provided for herein.
Section 7.23 Sharing of Payments. Each of the Lenders agrees that if it
should receive any amount under this Agreement or any of the other Loan
Documents (whether by voluntary payment, by realization upon security, by the
exercise of the right of banker's lien, by counterclaim or cross action, by the
enforcement of any right under the Loan Documents, or otherwise) which is
applicable to the payment of any borrowing of a sum which with respect to the
related sum or sums received by the other Lenders is in a greater proportion
than the total of such borrowings then owed and due to such Lender bears to the
total of borrowings made hereunder then owed and due to all of the Lenders
immediately prior to such receipt, then such Lender receiving such excess
payment shall purchase for cash without recourse or warranty from the other
Lenders an interest in such borrowings owing to such Lenders in such amount as
shall result in a proportional participation by all of the Lenders in such
amount; provided that if all or any portion of such excess amount is thereafter
recovered from such Lender, such purchase shall be rescinded and the purchase
price restored to the extent of such recovery, but without interest.
Section 7.24 Limitation of Liability. No claim may be made by the Borrower
or any other Person against the Administrative Agent or any Lender or any of
their affiliates, directors, officers, employees, attorneys or agent of any of
such Persons for any special, indirect or consequential damages in respect of
any claim for breach of contract or any other theory of liability arising out of
or under this Article VII; and the Borrower hereby waives, releases and agrees
not to xxx upon any such claim for any such damages, whether or not accrued and
whether or not known or suspected to exist in its favor.
ARTICLE VIII. MISCELLANEOUS
Section 8.1 Notices. All notices, requests, and other communications to any
party hereunder shall be in writing (including bank wire, telecopy, or similar
teletransmission or writing) and shall be given to such party at its address or
telecopy number set forth on Schedule 8 annexed hereto or such other address or
telecopier number as such party may hereafter specify by notice to the
Administrative Agent and the Borrower. No notices, requests, and other
communications given to any Person other than the Administrative Agent
(including, without limitation, any Affiliate thereof) shall be deemed to have
been given to the Administrative Agent. Each such notice, request, or other
communication shall be effective (i) when delivered personally, (ii) if given by
telecopier, when such telecopy is transmitted to the telecopier number specified
in this Section 8.1, (iii) if given by certified or registered mail, return
receipt requested, 72 hours after such communication is deposited in the mails
with first class postage prepaid, addressed as aforesaid, or (iv) by Federal
Express or other recognized overnight delivery service (provided that, in either
such case, such delivery is made with a request for receipt), on the next
Business Day after such communication is deposited with such delivery service,
or (v) if given by any other means when delivered at the address specified in
this Section 8.1.
Section 8.2 Amendments, Etc. No amendment or waiver of any provision of
this Agreement or the other Loan Documents, nor consent to any departure by
either party therefrom, shall in any event be effective unless the same shall be
in writing and signed by the party or its agent, if authorized to act on its
behalf, against whom enforcement of such waiver or amendment is sought, and then
such waiver or consent shall be effective only in the specific instance and for
the specified purpose for which given. None of the foregoing shall negate or
vitiate any of the provisions of Sections 7.14, 7.15 or 7.16.
Section 8.3 No Waiver Remedies Cumulative. No failure or delay on the part
of the Lenders in exercising any right or remedy hereunder or under any other
Loan Document and no course of dealing between the Borrower and the
Administrative Agent or the Lenders shall operate as a waiver thereof, nor shall
any single or partial exercise of any right or remedy hereunder or under any
other Loan Document preclude any other or further exercise thereof or the
exercise of any other right or remedy hereunder. The rights and remedies herein
and in the other Loan Documents expressly provided are cumulative and not
exclusive of any rights or remedies that the Lenders would otherwise have. No
notice to or demand on the Borrower not required hereunder or under the other
Loan Documents in any case shall entitle the Borrower to any other or further
notice or demand in similar or other circumstances or constitute a waiver of the
rights of the Lenders to any other or further action in any circumstances
without notice or demand.
Section 8.4 Payment of Expenses, Etc. The Borrower shall:
(a) whether or not the transactions hereby contemplated are
consummated, pay all reasonable out-of-pocket costs and expenses of the
Administrative Agent and the Lenders in the administration (both before and
after the execution hereof and including advice of counsel as to the rights and
duties of the Administrative Agent or the Lenders) of, and in connection with
the preparation, execution, and delivery of, preservation of rights under,
enforcement of, and, after an Event of Default, refinancing, renegotiation, or
restructuring of, this Agreement and the other Loan Documents and the documents
and instruments referred to therein; any amendment, waiver, or consent relating
thereto (including, without limitation, the reasonable fees and disbursements of
counsel for the Administrative Agent and the Lenders);
(b) to the extent permitted by applicable law, pay and hold
the Administrative Agent and the Lenders harmless from and against any and all
present and future stamp, recording, and other similar taxes and fees with
respect to the foregoing matters and save the Lenders harmless from and against
any and all liabilities with respect to or resulting from any delay or omission
to pay such taxes and fees; and
(c) indemnify the Administrative Agent and the Lenders and
each of their officers, directors, employees, Affiliates, representatives, and
agents from, and hold each of them harmless against, any and all costs, losses,
liabilities, claims, damages and expenses incurred by any of them (whether or
not any of them is designated a party thereto) arising out of or by reason of
any litigation, or other proceeding related to any actual or proposed use by the
Borrower of the proceeds of the Loan or the Borrower entering into and
performing of this Agreement or the other Loan Documents or resulting from the
ownership of any Mortgaged Property, including, without limitation, the
reasonable fees and disbursements of counsel incurred in connection with any
such investigation, litigation, or other proceeding; provided that the Borrower
shall not be obligated to indemnify any such Person to the extent of any costs,
losses, liabilities, claims, damages, or expenses caused by the gross negligence
or willful misconduct of such Person.
If and to the extent that the obligations of the Borrower under this
Section 8.4 are unenforceable for any reason, the Borrower hereby agrees to make
the maximum contribution to the payment and satisfaction of such obligations
which is permissible under applicable law. The Borrower's obligations under this
Section 8.4 shall survive any termination of this Agreement and the payment of
the sums due hereunder and under the other Loan Documents.
Section 8.5 Right of Setoff. Subject to the Administrative Agent's written
consent, in addition to and not in limitation of all rights of offset that the
Lenders may have under applicable law, the Lenders shall, upon the occurrence
and during the continuance of any Event of Default and whether or not the
Lenders have made any demand or the Borrower's obligations are matured, have the
right to appropriate and apply to the payment of the Borrower's obligations
hereunder and under the other Loan Documents, all deposits (general or special,
time or demand, provisional or final) of the Borrower then or thereafter held
by, and other indebtedness or property then or thereafter owing by, the Lenders.
Section 8.6 Benefit of Agreement. This Agreement shall be binding upon and
inure to the benefit of and be enforceable by the respective successors and
assigns of the parties hereto, provided that the Borrower may not assign or
transfer any of its interest hereunder without the prior written consent of the
Lenders.
Section 8.7 Governing Law; Submission to Jurisdiction
(a) This Agreement and the rights and obligations of the
parties hereunder shall be construed in accordance with and be governed by the
law (without giving effect to the conflict of law principles thereof) of the
State of New York except as otherwise specifically provided in the Loan
Documents with respect to the perfection, priority and enforcement of liens upon
real property and fixtures not located in the State of New York.
(b) Any legal action or proceeding with respect to this
Agreement or the other Loan Documents or any document related thereto may be
brought in the courts of the State of New York or of the United States of
America for the Southern District of New York, and by execution and delivery of
this Agreement, the Borrower hereby accepts for itself and in respect of its
property generally and unconditionally, the jurisdiction of the aforesaid
courts. The Borrower hereby irrevocably waives any objection, including, without
limitation, any objection to the laying of venue or based on the grounds of
forum non conveniens, which it may now or hereafter have to the bringing of any
such action or proceeding in such respective jurisdictions. The Borrower agrees
that any process in any proceeding in any such court may be served on the
Borrower through the United States mails in accordance with Section 8.1.
(c) WAIVER OF JURY TRIAL. TO THE EXTENT PERMITTED BY
APPLICABLE LAW, EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY AND
UNCONDITIONALLY WAIVES TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING
TO THIS AGREEMENT OR THE PROMISSORY NOTE OR ANY OTHER LOAN DOCUMENTS AND FROM
ANY COUNTERCLAIM THEREIN.
(d) Nothing herein shall affect the right of the Lenders to
serve process in any other manner permitted by law or to commence legal
proceedings or otherwise proceed against the Borrower in any other jurisdiction.
Section 8.8 Counterparts. This Agreement may be executed in any number of
counterparts and by the different parties hereto on separate counterparts, each
of which when executed and delivered shall be an original, but all of which
shall together constitute one and the same instrument.
Section 8.9 Headings Descriptive . The headings contained in this Agreement
are for convenience only and shall not in any way affect the meaning or
construction of any provision of this Agreement.
Section 8.10 Entire Agreement. This Agreement and the other Loan Documents
constitute the entire agreement of the parties with respect to the subject
matter hereof and thereof, and all prior discussions, negotiations, term sheets,
commitment letters, waiver letters, agreements, letter agreements,
correspondence and document drafts with respect to such matters are merged
herein and therein. Neither the Lenders nor any employee of the Lenders has been
authorized to make any representation or agreement upon which the Borrower or
its Affiliates may rely unless such matter is set forth in this Agreement or the
other Loan Documents.
Section 8.11 Release of Mortgaged Properties. The Administrative Agent
agrees that, upon the Borrower's request (a ARelease Request ) to the
Administrative Agent, the Administrative Agent will deliver to Borrower a form
of release, duly executed and acknowledged by the Administrative Agent,
releasing from the lien of the applicable Mortgage (a ARelease ) a Mortgaged
Property (a ARelease Parcel ) but only if and on the condition that:
(i) each Release Request shall be in writing,
shall contain all information necessary for the Administrative Agent to cause a
Release in recordable form to be prepared and shall be given at least ten (10)
Business Days prior to the requested date of such Release;
(ii) as of the date of such Release Request,
and as of the Closing Date of such Release (before as well as after giving
effect to such Release), no Default or Event of Default shall have occurred and
be continuing, and each Release Request shall constitute Borrower's
representation and warranty that the foregoing is true, complete and accurate;
(iii) before as well as after giving effect to such
Release, subject to the provisions of Section 5.5 hereof, all representations
and warranties contained herein (except representations and warranties expressly
provided herein as being made only as of the Closing Date) shall be true and
correct in all material respects with the same effect as though such
representations and warranties had been made on and as of the date of such
Release;
(iv) the Borrower executes, acknowledges and
delivers to the Administrative Agent, at Borrower's expense, any and all
documents and instruments reasonably required by the Administrative Agent to
preserve and maintain the Administrative Agent's and Lenders rights, upon and
following any such Release, under and with respect to the Loan Documents; and
(v) the Borrower pays to the Administrative
Agent for the account of the Lenders and for application to the Term Portion of
the Loan an amount equal to the Release Price for the Mortgaged Property, less
any previous prepayment of the Term Portion of the Loan not made in connection
with a Release or otherwise applied to a Release Price.
In the event that all of the foregoing conditions to a Release have been
satisfied, then, at Borrower's request, the Administrative Agent shall furnish
such Release for execution by the Administrative Agent and for recordation by
the title company which had insured the Lenders interest in the Mortgaged
Property subject to the Release or as otherwise designated by Borrower. Receipt
of a Release Request for each Release shall constitute Borrower's agreement and
covenant to pay to the Administrative Agent, promptly upon demand (together with
a reasonably detailed invoice(s) in respect thereof), all reasonable legal fees
and expenses arising in connection with the preparation, execution, delivery and
review of each Release, the documents and instruments described in this Section,
and all other documents relating to, and rendering at the request of the
Administrative Agent all advice respecting, each Release.
Section 8.12 Confidentiality. The Administrative Agent and the other
Lenders agree that, unless otherwise agreed to in writing by us, except as
required by law or regulation or by legal process, to keep all Non-public
Information delivered by the Borrower to the Administrative Agent or the Lenders
confidential and not to disclose or reveal any Non-public Information to any
person, other than those employed or retained by the Administrative Agent or the
Lenders (including, without limitation, employees, counsel, accountants,
engineers, advisers, experts and consultants to the Administrative Agent or the
Lenders). Except as provided for in the next sentence, in the event that the
Administrative Agent or any Lender is requested pursuant to, or required by,
applicable law or regulation or by legal process to disclose any Non-public
Information, the Administrative Agent or such Lender agrees that it shall
provide the Borrower with prompt notice of such request(s) and, unless required
by law or regulation to disclose sooner, shall wait at least forty eight (48)
hours before disclosing such Non-public information. Notwithstanding the
foregoing or anything else to the contrary herein contained or contained in any
of the other Loan Documents, the provisions of this Section 8.12 shall not apply
to (a) the disclosure or sharing of any Non-public information among the
Administrative Agent and the Lenders, (b) the disclosure by the Administrative
Agent or any Lender of any Non-public information to federal, state and local
bank regulators or other governmental agencies to the extent required or
requested to do so (such disclosure shall not, however, in and of itself be
deemed to render such information public), and (c) the Administrative Agent or
any Lender may, in connection with any assignment or participation or proposed
assignment or participation, disclose to the assignee or participant or proposed
assignee or participant under a requirement of confidentiality, any Non-public
information relating to the Borrower, the Collateral, the Borrower's assets,
properties or financial condition or information otherwise furnished to the
Administrative Agent or the Lenders by the Borrower.
Section 8.13 No Discharge. The execution and delivery of this Agreement
shall not extinguish the indebtedness or the obligations secured by the
Mortgages, and no part thereof shall be discharged, disturbed, cancelled or
impaired by the execution and delivery of this Agreement.
[Signatures Continued on Next Page]
IN WITNESS WHEREOF, the parties hereto have caused their duly
authorized officers to execute and deliver this Agreement as of the date first
written above.
HOMESTEAD VILLAGE INCORPORATED
By
Xxxxx X. Xxxxxxxx
Senior Vice President
COMMERZBANK AG, New York Branch,
as Administrative Agent
By
Name:
Title:
By
Name:
Title:
COMMERZBANK AG, New York Branch,
as Lender
By
Name:
Title:
By
Name:
Title:
K-2
XXXXX FARGO BANK
By
Name:
Title:
BANKBOSTON, N.A.
By
Name:
Title:
CHASE BANK OF TEXAS, N.A.
By
Name:
Title:
