$30,000,000
AMENDED AND RESTATED CREDIT AGREEMENT
AMONG
HOMESTEAD VILLAGE INCORPORATED,
THE LENDERS NAMED HEREIN,
AND
COMMERZBANK AG,
NEW YORK BRANCH, AS AGENT FOR THE LENDERS
DATED AS OF MARCH 18, 1999
AMENDED AND RESTATED CREDIT AGREEMENT
AMENDED AND RESTATED CREDIT AGREEMENT (this "Agreement"), dated as of March
18, 1999, among HOMESTEAD VILLAGE INCORPORATED, a Maryland corporation (the
"Borrower"), COMMERZBANK AG, LOS ANGELES BRANCH, and the other lenders listed on
Exhibit A attached hereto, as amended from time to time (each a "Lender" and
collectively, the "Lenders") and COMMERZBANK AG, NEW YORK BRANCH, as agent for
the Lenders (the "Agent").
W I T N E S S E T H:
WHEREAS, the 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 April 24, 1998 among Borrower, Agent and certain lenders
named therein (said Agreement, as amended to, but not including, this date, the
"Original Agreement"); and
WHEREAS, the parties hereto have agreed to amend and restate the Original
Agreement in its entirety, including all of 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 each accounting period of Borrower, the first
two such periods in any fiscal quarter consisting of four weeks each and the
last such period in any fiscal quarter consisting of five weeks.
"Acquisition Costs" means the actual purchase price paid by Borrower to
acquire the property constituting a Mortgaged Property or that portion of a
Mortgaged Property (the portion of such actual purchase price allocable to such
portion of a Mortgaged Property to be determined in a manner reasonably
acceptable to Agent) upon which it shall construct an extended stay facility and
ancillary facilities which are related to the purpose, and shall enhance the
value, of the extended stay facility (the "ancillary facilities"), as evidenced
by the documentation and certificate of Borrower furnished to Agent, excluding,
without limitation, all fees, costs and expenses incurred with regard to use,
planning and zoning rules and regulations relating to such Mortgaged Property,
but including such other expenses as the Agent approves in its sole discretion.
"Adjusted LIBO Rate" means, with respect to each Interest Period, the
rate obtained by dividing (i) the LIBO 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 Advances is determined or any category of extensions
of credit or other assets that includes loans by a non-United States office of
the Agent to United States residents) or by any other Requirement of Law
relating to reserve or capital adequacy requirements.
"Adjusted Property Net Operating Income" or "Adjusted Property NOI"
means, with respect to any period, NOI adjusted for a capital expenditure
reserve equal to 4% of gross revenue and a management fee equal to 4% of gross
revenue.
"Advance" has the meaning provided in Section 2.1(a).
"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 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.
"Agent" means Commerzbank AG, New York Branch, in its capacity as agent
for the Lenders hereunder, or such successor Agent as may be appointed pursuant
to Section 7.9 of this Agreement.
"Agreement" means this Agreement, as amended, supplemented, restated 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 the Prime Rate
Applicable Margin, and (b) the Federal Funds Rate plus the Federal Funds
Applicable Margin.
"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 Agent, as such officer may
be changed from time to time by written notice to the Agent.
"Bridge Facility" means the credit facility governed by the Credit
Agreement dated as of June 15, 1998, among Borrower, certain lenders and Agent,
as modified and amended, from time to time.
"Budget" means, for any Mortgaged Property (i) until the Final Budget
for such Mortgaged Property is received by Agent, the Initial Budget for such
Mortgaged Property, and (ii) upon and after such time as the Final Budget for
such Mortgaged Property is received by Agent, the Final Budget for such
Mortgaged Property.
"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.
"Central Business District" means the downtown section of a city,
generally consisting of retail, office, hotel, entertainment, and governmental
land uses with some high density housing.
"Closing Date" means April 24, 1998.
"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 Agent.
"Commitment" means Thirty Million Dollars ($30,000,000), as reduced by
any repayments.
"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 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, excluding financing costs and fees related to:
(i) Indebtedness which has been incurred before the Effective Date,
(ii)the Sale Leaseback Facility, or
(iii) the Loan,
plus scheduled amortization of all Indebtedness of Borrower and its Subsidiaries
(excluding balloon payments and bullet maturities on loans).
"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 2.6(b) hereof.
"Development Encumbrances" means:
(a) all non-monetary easements, restrictions and encumbrances
customary and appropriate for the development of property as an extended stay
facility, including ancillary facilities related thereto, which do not and will
not materially impair the use of the Mortgaged Property affected thereby as an
extended stay facility or the ancillary facilities related thereto or the
expected value of the Mortgaged Property affected thereby and
(b) all other easements, restrictions and encumbrances customary
and appropriate for the development of property as an extended stay facility,
including ancillary facilities related thereto, which (i) are approved by the
Agent and or (ii) do not and will not materially impair the use of the Mortgaged
Property affected thereby as an extended stay facility or the ancillary
facilities related thereto or the expected value of the Mortgaged Property
affected thereby
"Direct Costs" means, for each Mortgaged Property, the aggregate costs
of all items described under the categories entitled "Hard Costs-Contractor
Costs", "Hard Costs-Other Hard Costs", "Hard Costs-Hard Costs Contingency" and
"Hard Costs-Furniture, Fixtures & Equipment" in the Budget for such Mortgaged
Property actually paid which are necessary for an extended stay facility,
including ancillary facilities related thereto, on such Mortgaged Property to be
Construction Complete in accordance with the Plans and Specifications, as
evidenced by the documentation and certificate of Borrower furnished to Agent.
"Dollar" and the sign "$" each mean lawful currency of the United
States of America.
"Effective Date" means March 18, 1999.
"Eligible Costs" means, for each Mortgaged Property, the lesser of (i)
the Acquisition Costs with respect to such Mortgaged Property, and (ii) the
amount budgeted, in the aggregate, for Acquisition Costs as shown on the Budget
for such Mortgaged Property (including any contingency for Acquisition Costs
shown on such Budget).
"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.
"Environmental Indemnity" means the Environmental Indemnity to be
executed by the Borrower in favor of the Agent, substantially in the form
attached hereto as Exhibit E.
"Estimated Operating Property Value" or "EOPV" means, as of any date of
determination, the sum of:
(1) for each Mortgaged Property that is Construction Complete and
open for business as an extended stay facility but has been so open less than
ten (10) full calendar months as of the end of the calendar quarter ending on or
prior to the date of determination, the lower of the undepreciated GAAP cost
value or the Stabilized Appraised Value;
(2) for each Property that is Construction Complete and has been
open for business as an extended stay facility at least ten (10) full calendar
months as of the end of the calendar quarter ending on or prior to the date of
determination, the lower of (a) the estimated asset value derived by
capitalizing the appropriate annualized Adjusted Property NOI (as determined
pursuant to the directions set forth below) at 11%, (b) the undepreciated GAAP
cost value and (c) only if the property is a Mortgaged Property, the Stabilized
Appraised Value, plus
(3) for each Property that is not a Mortgaged Property and has
been open for business as an extended stay facility but has been so open less
than ten (10) full calendar months as of the end of the calendar quarter ending
on or prior to the date of determination, the undepreciated GAAP cost value for
such Property.
In order to determine annualized Adjusted Property NOI, for a Property that has
been open as an extended stay facility for at least ten (10) but less than
thirteen (13) full calendar months, the trailing quarter Adjusted Property NOI
will be annualized. For a Property that has been open as an extended stay
facility for at least thirteen (13) but less than sixteen (16) full calendar
months, the trailing two quarter Adjusted Property NOI will be annualized. For a
Property that has been open as an extended stay facility for sixteen (16) months
but less than nineteen (19) months, the prior three quarter Adjusted Property
NOI will be annualized. Once a Property has been open as an extended stay
facility for nineteen(19) full calendar months and thereafter, trailing 12-month
Adjusted Property NOI will be utilized.
"Estimated Operating Property Value of the Mortgaged Properties" means, as of
any date of determination, for all Mortgaged Properties, the sum calculated
pursuant to the foregoing formula, but only with respect to the Mortgaged
Properties.
"Event of Default" has the meaning provided in Article VI.
"Federal Funds Applicable Margin" means two hundred fifty (250) basis
points.
"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 Agent on such day on such transactions as determined by the Agent.
"Financing Statements" means UCC-1 Financing Statements made by the
Borrower or a Subsidiary Mortgagor, as debtor, in favor of the Agent, as secured
party, covering all fixtures, equipment and personal property of the Borrower or
such Subsidiary Mortgagor at the Mortgaged Properties.
"Final Budget" means, for any Mortgaged Property, a final budget with
respect to such Mortgaged Property in the same form as the Initial Budget for
such Mortgaged Property (as the form of such final budget may be changed from
time to time by Borrower upon the prior written consent of Agent) showing the
amounts budgeted for the Total Costs (including contingencies) for such
Mortgaged Property, provided that Total Costs (including contingencies) as shown
on such final budget do not exceed, in the aggregate, the amount equal to one
hundred ten percent (110%) of the Total Costs (including contingencies) as shown
on such Initial Budget, in the aggregate.
"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 Agent determines to be adverse, and if
either such party notifies the other of such determination, then both Borrower
and 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 Agent 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 the value of all Properties owned by Borrower or its
Subsidiaries valued at one hundred percent (100%) of cost.
"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 "contaminant" 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 Debt Service" means, as of any determination date, the annual
debt service of a self-liquidating loan with an original principal amount equal
to the Maximum Availability Amount, as of such date, and amortized over 240
months (20 years) (pursuant to regular and equal monthly installments of
principal and interest) at an annual interest rate equal to the lesser of (a)
ten percent (10%) and (b) the greater of (i) eight and one half percent (8.50%)
and (ii) the 10 year Treasury Rate (as hereinafter defined) at such time plus
three and one quarter percent (3.25%). "Treasury Rate" means the annual yield on
the Treasury Constant Maturity Series with maturity equal to ten (10) years, for
the week prior to the determination date, as reported in Federal Reserve
Statistical Release H.15 - Selected Interest Rates, conclusively determined by
the Agent. In the event Release H.15 is no longer published, Agent shall select
a comparable publication to determine the Treasury Rate.
"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;
(iv) 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
(v) Indebtedness of others secured by any Lien upon property owned by such
Person, whether or not assumed by such Person.
"Indirect Costs" means the aggregate costs of all items described in
the line items entitled "Title Insurance", "Commissions", "Closing Costs/Escrow
Fees", "Property Taxes", "Legal" and "Soft Costs Contingency" and under the
categories entitled "Soft Costs-Design Costs", "Soft Costs-Permits & Fees", and
"Soft Costs-Other Soft Costs" in the Budget for such Mortgaged Property actually
paid, in all cases as evidenced by the documentation and certificate of Borrower
furnished to Agent, it being understood that Indirect Costs shall in no event
include, with respect to any Mortgaged Property, any portion of the legal fees
for zoning and planning board approval and similar matters.
"Initial Budget" means, for any Mortgaged Property, a pro forma budget
with respect to such Mortgaged Property in the form of Exhibit G annexed hereto
(as the form of such pro forma budget may be changed from time to time by
Borrower upon the prior written consent of Agent) showing the amounts budgeted
for the Total Costs (including contingencies) for such Mortgaged 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) plus Borrower's
pro rata share (based on the higher of its nominal ownership interest or the
ownership percentage used in the calculation of Gross Asset Value -- Cost) of
interest expense in its Unconsolidated Affiliates, plus 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 related to (i)
Indebtedness which has been incurred before the Effective Date, (ii) the Sale
Leaseback Facility, and (iii) the Loan.
"Interest Period" has the meaning set forth in Section 2.7.
"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 any 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
Advances are made or maintained and for the account of which all payments of
principal of, and interest on, such Lender's Advances are made, as designated in
writing from time to time to the Agent and the Borrower.
"Leverage Percentage" means the quotient of the outstanding principal
amount of the Loan, divided by the aggregate Eligible Costs for all Mortgaged
Properties, expressed as a percentage. In no event shall such Leverage
Percentage be permitted to exceed forty five percent (45%).
"LIBOR Applicable Margin" means three hundred (300) basis points.
"LIBO Rate" means, with respect to any Interest Period, the average
rate of interest per annum (rounded upwards, if necessary, to the next highest
1/16th of 1%) at which deposits in immediately available funds in dollars are
offered to Agent (at approximately 12:00 noon (New York time), two Business Days
prior to the first day of such Interest Period) by first class banks in the
interbank Eurodollar market, for delivery on the first day of such Interest
Period, such deposits being for a period of time equal or comparable to such
Interest period and in an amount equal to or comparable to the principal amount
of the Advance to which such Interest Period relates. Each determination of the
LIBO Rate by the Agent shall, in absence of demonstrable error, 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" means, collectively, the loans made by the Lenders pursuant to
the Loan Documents.
"Loan Documents" means, collectively, this Agreement, the Promissory
Notes, all Mortgages, all Financing Statements, the Environmental Indemnity, all
Subsidiary Mortgagor Guaranties 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).
"Market Studies" means, for any Mortgaged Property, all of the
following with respect to such Mortgaged Property in the form of the examples of
the following attached hereto as Exhibit H: (i) a target submarket overview,
(ii) a comparison with the Borrower's acquisition criteria, (iii) an area map,
(iv) a neighborhood map, (v) an aerial photograph, (vi) a contextual site plan,
(vi) a preliminary site plan, (vii) a map indicating retail and restaurant
support, (viii) the identity of and information respecting demand generators and
area employers, (ix) a demand location map, (x) a competitive survey, and (xi) a
competitive survey map.
"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 the earlier of December 31, 2000 or the date
that the Suburban Facility is satisfied. "Maximum Availability Amount" means, as
of any date of determination, the least of:
(a) the Commitment,
(b) forty five percent (45%) of the Eligible Costs of all of the
Mortgaged Properties.
"Mortgaged Properties" means, collectively, the Property of the
Borrower or any Subsidiary Mortgagor which is located in a Central Business
District and which is (and for so long as same is) mortgaged to the 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 Agent and covering the
Mortgaged Properties (which such Mortgages are recorded or unrecorded),
substantially (i.e., with such modifications as may be required by, or, in the
Agent's reasonable judgment, appropriate for, the jurisdiction in which a
particular Mortgaged Property is located) in the form attached hereto as Exhibit
N, as the same may be amended, modified, or otherwise supplemented from time to
time.
"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).
"Non-public Information" means any information delivered by the
Borrower to the 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 the written notice given by Borrower that
it desired to receive an Advance hereunder.
"Notifying Lender" has the meaning provided in Section 2.13.
"Participant" has the meaning provided in Section 7.17.
"Payment Office" means the office of the Agent located at 0 Xxxxx
Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000-0000.
"Percentage" means each Lender's percentage share of the Commitment as
set forth on Exhibit A 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, (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)
Development Encumbrances, (iv) 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, and (v) Leases
which are subordinate to the lien of the Mortgages.
"Permitted Purpose" means reimbursement to the Borrower of a portion of
the Total Costs with respect to each Mortgaged Property, and general working
capital purposes (other than the purchase of Capital Stock.)
"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.
"Plans and Specifications" means, with respect to any Mortgaged
Property, the final plans and specifications for the construction of an extended
stay facility, including ancillary facilities related thereto, on such 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 Agent announces 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 Agent or any Lender.
The Agent and each Lender may make commercial loans or other loans at rates of
interest at, above or below the Prime Lending Rate.
"Prime Rate Applicable Margin" means two hundred (200) basis points.
"Proforma Operating Statement" means, for any Mortgaged Property, a
completed pro forma operating statement with respect to such Mortgaged Property
in the form of Exhibit I attached hereto, accurate as of the date of such
statement, and containing the information required to complete such schedule in
the manner and detail contemplated by such Exhibit, which shall be acceptable in
form and substance to the Agent in its sole discretion.
"Project Cost Report" means, for any Mortgaged Property, a completed
project cost report with respect to such Mortgaged Property in the form of
Exhibit J attached hereto, accurate as of the date of such form, and containing
the information required to complete such schedule in the manner and detail
contemplated by such Exhibit, and including, without limitation, the current
actual and projected Total Costs with respect to such Mortgaged Property and the
deviations of same (on line-item by line-item basis) from the Budget furnished
to Agent with respect to such Mortgaged Property.
"Promissory Notes" means the promissory notes made by the Borrower to
each Lender substantially in the form annexed hereto as Exhibit C.
"Properties" means all land owned or leased by the Borrower and 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 that does not containing
any land not owned by Borrower and/or 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.
"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.
"Realty" means SC Realty Incorporated, a Nevada corporation.
"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 Commitment.
"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.
"Sale-Leaseback Facility" means the lease dated February 23, 1999
between HPT, as lessor, and HVI (2) Incorporated, a Delaware corporation, as
lessee.
"Stabilized Appraised Value" means appraised value reasonably
acceptable to the Agent.
"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,
any wholly-owned Subsidiary of a wholly-owned Subsidiary of Borrower, or, with
Lenders' consent, any other Person which owns any portion of or interest in any
Mortgaged Property.
"Subsidiary Mortgagor Guaranty" means a guaranty of the Indebtedness
hereunder from a Subsidiary Mortgagor.
"Suburban Credit Agreement" means the Amended and Restated Credit
Agreement of even date herewith among Borrower, Commerzbank AG, Los Angeles
Branch and other lenders as set forth therein, and Agent, as agent, governing a
certain credit facility secured by mortgage liens on properties lying outside
major metropolitan cities.
"Taxes" has the meaning provided in Section 2.17.
"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.
"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' share of non-recourse debt in their Unconsolidated Affiliates
based on the greater of its nominal ownership interest or the percentage of
ownership interest used to calculate Gross Asset Value -- Cost. 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.
"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).
"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 "hereof," "herein," and
"hereunder" 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
AMOUNTS AND TERMS OF LOANS
Section 2.1 Commitment.
a) Each Lender, severally and not jointly, has made loans (each an
"Advance" and collectively, the "Advances") pro rata in accordance with such
Lender's Percentage to the Borrower from time to time before the Effective Date.
b) No new Advance shall be made under this Agreement. Borrower may not
reborrow any Advance once it has been repaid.
c) The aggregate principal amount outstanding of all Advances made pursuant
hereto by the Lenders, at any time, shall not exceed the lesser of the then
Commitment or the then Maximum Availability Amount.
Section 2.2 Deliberately omitted.
Section 2.3 Deliberately omitted.
Section 2.4 Deliberately omitted.
Section 2.5 "Promissory Notes; Collateral." (a) The Borrower's obligation
to pay the principal of, and interest on, the Advances made by each Lender is
evidenced by one or more Promissory Notes in the face amount of each such
Lender's Percentage of the Commitment, with blanks as to payee, date and
principal amount appropriately completed. The determination by the 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 and repayment hereunder shall be recorded by the Agent;
provided, however, that no failure to make or error in making a recordation of
an Advance shall in any way limit, affect or modify the obligation of the
Borrower to repay any obligations, or the rights of the 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 2.14 hereof, and each other Loan Document.
Section 2.6 "Interest on Advances."
a) The Borrower shall pay interest in respect of the unpaid principal
amount of each Advance from the date such Advance is made at a rate per annum
for each Interest Period equal to the LIBOR Applicable Margin plus the relevant
Adjusted LIBO Rate. Interest on each Advance shall accrue from and including the
date of such Advance to but excluding the date of any repayment thereof and
shall be payable, in arrears, with respect to each Advance, on the last day of
each calendar month and on the last day of the Interest Period applicable to
such Advance, (i) at maturity (whether by acceleration or otherwise), and (ii)
after maturity, on demand. Notwithstanding the foregoing, interest on each
Advance bearing interest at the Alternate Rate pursuant to the terms of this
Agreement shall be payable in arrears on the last day of each calendar month
during the Interest Period applicable to such Advance and on the last day of
such Interest Period, (i) at maturity (whether by acceleration or otherwise),
and (ii) after maturity, on demand.
b) Overdue principal and, to the extent permitted by law, overdue interest
in respect of each Advance, and all other overdue amounts owing hereunder, shall
bear interest for each day that such amounts are overdue at a rate (the "Default
Rate") per annum 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 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.
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 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 Advances (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 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 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 2.7 "Interest Periods." In connection with each Advance bearing
interest at the rate described in Section 2.6(a) above, an interest period (each
an "Interest Period") shall be applicable thereto, which shall be a period of
one, two, three or six months as selected by the Borrower in the Notice of
Borrowing for such Advance, provided that:
(i) the initial Interest Period for any Advance shall commence on the date
of such Advance;
(ii) subject to the provisions of Section 6.2 hereof and 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 for any Advance,
the Borrower shall be permitted to select an additional Interest Period for such
Advance by delivering a written notice thereof, in the form of Exhibit B-1, to
the 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 Advance, provided that if no Interest Period selection is delivered to the
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 Advance may not be changed without the consent of the 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 an Advance (other than
an Advance referred to in Section 2.13(b)(ii) or Section 2.14(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 an Advance 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.
Section 2.8 "Repayment of Advances." The Borrower shall repay to the Agent,
for the account of the Lenders, the unpaid principal amount of each Advance made
by the Lenders hereunder, 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 2.9 "Prepayments of Advances." The Borrower may prepay all
outstanding Advances, any one Advance or portion thereof on any Business Day
without penalty, premium or additional charge, except as set forth in Section
2.16 hereof; provided such prepayment shall be at least equal to the lesser of
$100,000 or the outstanding amount of such Advance. Upon three (3) days written
notice to the Agent, the Borrower may terminate the Commitment by prepaying all
outstanding Advances and all other amounts and fees due to the Agent and the
Lenders under this Agreement and the other Loan Documents.
b) The Borrower shall be liable for all amounts payable pursuant to Section
2.16 with respect to a prepayment of an Advance on any date other than the last
day of the Interest Period related to such Advance where no new Interest Period
shall have been selected or deemed to have been selected pursuant to Section
2.7(ii) for such Advance.
Section 2.10 "Deliberately omitted"
Section 2.11 "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 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 Agent after such time shall, for all purposes of this Agreement,
be deemed to have been paid on the next succeeding Business Day. The 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.
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
2.7(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 Advances shall be made on the basis of a
year of (x) in the case of Advances on which interest is computed on the basis
of the LIBO Rate, 360 days, and (y) in the case of Advances on which interest is
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 2.12 "Interest Rate Not Ascertainable, Etc." If the 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 Agent shall forthwith give notice (by telephone
confirmed in writing) to the Borrower of such determination. Until the Agent
notifies the Borrower that the circumstances giving rise to the suspension
described herein no longer exist:
(i) any Advance made hereunder shall bear interest at the then
applicable Alternate Rate; and
(ii) if any Advance affected is then outstanding, each such Advance
shall immediately convert into an Advance bearing interest at the then
applicable Alternate Rate with an Interest Period ending on the date on which
the Interest Period applicable to the Advance affected expires.
Section 2.13 "Illegality." (a) If any Lender (a "Notifying Lender") shall
have determined at any time that the making or continuance of any Advance 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 Agent and the Borrower of such determination.
b) Upon the giving of the notice to the Agent and the Borrower referred to
in subsection (a) above, (i) the Borrower's right to request and the Notifying
Lender's obligation to make Advances shall be immediately suspended, and (ii) if
any Advance of the Notifying Lender affected thereby is then outstanding, each
such Advance shall immediately convert into an Advance bearing interest at the
then applicable Alternate Rate with an Interest Period ending on the date on
which the Interest Period applicable to the Advance affected expires.
Section 2.14 "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 Advances or its obligation to
make Advances, or shall change the basis of taxation of payments to any Lender
of the principal of or interest on the Advances or its obligation to make
Advances (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 the Advances 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 Advances, or there shall be a reduction in the amount
received or receivable by such Lender or its Lending Office, 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
Agent, pay to the 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 2.14, such
Lender shall promptly notify the 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 2.14 relating to any period in
which the Commitment is in effect, the provisions of this Section 2.14 shall
survive the termination of this Agreement and the payment of the Promissory
Notes and all other amounts payable hereunder.
b) If the Lenders shall notify the Borrower in writing that at any time,
because of the circumstances described in clause (x) or (y) in Section 2.14(a)
or any other circumstances arising after the Closing Date and relating to any
period in which the Commitment is in effect affecting the interbank Eurodollar
market generally, the then applicable Adjusted LIBO Rate, as determined by the
Agent, will not adequately and fairly reflect the cost to the Lenders of funding
the Advances, then, subject to Section 2.14(c), thereafter:
(i) any Advance made hereunder shall bear interest at the Alternate
Rate; and
(ii) if the affected Advance is then outstanding, the Borrower shall
immediately, or if permitted by applicable law, no later than the date permitted
thereby, upon at least one Business Day's written notice to the Lenders, convert
each such Advance into an Advance bearing interest at the Alternate Rate with an
Interest Period ending on the date on which the Interest Period applicable to
the affected Advance expires.
c) If the Lenders shall notify the Borrower in writing that at any time,
because of the circumstances described in clause (x) or (y) in Section 2.14(a)
or any other circumstances arising after the Closing Date and relating to any
period in which the Commitment is in effect 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 Agent, which assignment shall be effected pursuant to Section
7.18 hereof.
Section 2.15 "Change of Lending Office." Each Lender agrees that it will
use reasonable efforts to designate an alternate Lending Office with respect to
its Advances affected by the matters or circumstances described in Section 2.12,
2.13 or 2.14 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 2.16 "Funding Losses." The Borrower shall compensate each Lender,
upon such Lender's written request to the Agent and the 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 Advances 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 any
repayment of any Advance occurs on a date which is not the Maturity Date or the
last day of an Interest Period applicable to such Advance (subject to Section
2.9(b)); (ii) if, for any reason, the Borrower defaults in its obligation to
repay any Advances when required by the terms of this Agreement; or (iii) the
occurrence of any of the events described in Sections 2.12, 2.13 or 2.15. With
respect to losses, expenses and liabilities which a Lender may sustain as
described in this Section 2.16 relating to any period in which the Commitment is
in effect, the provisions of this Section 2.16 shall survive the termination of
this Agreement and the payment of the Promissory Notes and all other amounts
payable hereunder.
Section 2.17 "Taxes". 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 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
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 2.17(b)), the Borrower shall
indemnify, defend and hold harmless the Agent and each Lender for any
incremental taxes, interest, or penalties that may become payable by the Agent
or any Lender as a result of any such failure. With respect to any obligations
of the Borrower pursuant to this Section 2.17 relating to any period in which
the Commitment is in effect, the agreements in this Section 2.17, as they apply
to any Advance, shall survive the termination of this Agreement and the payment
of the Promissory Notes and all other amounts payable hereunder.
b) Agent and each Lender shall furnish Borrower, 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 a financial institution
reasonably acceptable to the Agent, which assignment shall be effected pursuant
to Section 7.18 hereof.
ARTICLE III
CONDITIONS TO BORROWINGS AND CLOSING
Section 3.1 "Conditions Precedent to Closing." On or prior to the Effective
Date, all obligations of the Borrower hereunder to the Agent and the Lenders
incurred prior to the Closing Date and any amounts payable to the Agent or the
Lenders on the Effective Date (other than legal fees payable pursuant to the
last paragraph of this Section 3.1), shall have been paid in full. In addition,
the Agent shall have received or waived in writing the following, each dated as
of or prior to the Effective Date, in form and substance satisfactory to the
Agent:
(i) an officer's certificate, dated the Effective Date, signed by any
Co-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 D with appropriate insertions,
together with copies of the Articles of Incorporation of Borrower certified 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, the Advances and the Loan Documents;
(ii) duly executed and completed Promissory Notes payable to the order of
each Lender;
(iii) a duly executed and delivered Affirmation of Environmental Indemnity;
(iv) an opinion of counsel to the Borrower addressed to the Agent and the
Lenders in form reasonably acceptable to the Agent;
(v) financial statements in the forms prescribed by Sections 5.2(a)-(d) for
the fiscal year 1997, the fiscal quarter ended September 30, 1998 and the most
recent Accounting Period;
(vi) 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;
(vii) such consents or acknowledgements, with respect to such of the
transactions hereunder, from such Persons as the Agent or its counsel may
reasonably determine to be necessary or appropriate;
(viii) (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
(ix) title policy endorsements which have the effect of redating the title
policies insuring the Liens of the Mortgages.
Execution and delivery of this Agreement by Borrower shall constitute Borrower's
agreement and covenant to pay to the Agent, promptly upon demand (together with
a reasonably detailed invoice(s) in respect thereof), all reasonable fees and
disbursements of counsel to the Agent and the Lenders incurred prior to or on
the Effective Date.
Section 3.2 "Deliberately omitted."
Section 3.3 "Deliberately omitted."
Section 3.4 "Unrecorded Mortgages of Subsidiary Mortgagor." Unrecorded
Mortgages of Subsidiary Mortgagor. The Mortgage with respect to any Mortgaged
Property may remain unrecorded provided that all of the following conditions
are, and continue to be, satisfied: (i) the mortgage recording tax that would be
payable by the mortgagor under such Mortgage with the jurisdiction in which such
Mortgaged Property is located as a condition precedent to the recordation in
such jurisdiction of such Mortgage, shall exceed one percent (1.0%) of the
Eligible Costs with respect to such Mortgaged Property, (ii) such Mortgaged
Property is owned by a Subsidiary Mortgagor that is and shall remain a
single-purpose entity which, among other things, (A) has the ability and
capacity as determined in the sole discretion of the Agent to pay the mortgage
recording tax, (B) does not and shall not engage in any business other than
owning and operating such Mortgaged Property, or acquire or own assets other
than such Mortgaged Property and incidental personal property without the prior
written consent of the Agent, which consent may be withheld for any reason or no
reason, (C) has no debt as of the date hereof and shall not incur or create any
debt except such debt agreed to in advance by the Agent in writing, (D)
maintains its assets in a way which segregates and identifies such assets
separate and apart from the assets of any other person or entity, (E) holds
itself out to the public as a separate legal entity from any other person or
entity, and (F) conducts business solely in its own name, (iii) the entire
stock, partnership, membership and other ownership interests and privileges in
such Subsidiary Mortgagor and any other property owned by such Subsidiary
Mortgagor under clause (ii)(B) above are assigned and pledged to the Lenders
pursuant to a Pledge and Security Agreement in the form of Exhibit P and
appropriate Financing Statements are filed evidencing the collateral under the
Pledge and Security Agreement , and (iv) the jurisdiction in which such
Mortgaged Property is located permits the immediate recordation of such Mortgage
at no cost or expense to the Agent or the Lenders other than payment of such
mortgage recording tax and nominal recording charges. Notwithstanding anything
to the contrary, the Borrower irrevocably agrees that each and every unrecorded
Mortgage may be recorded at any time (A) immediately upon an Event of Default
described in Section 6.1(a), (B) for any insubstantial, immaterial, technical
Default in the Agent's reasonable discretion, at the earlier of ninety (90) days
following such Default (unless such Default has been cured) or immediately upon
an Event of Default, and (C) for any Default not covered in either (A) or (B)
above, immediately, after such Default (unless such Default has been cured) or
after the Agent, in its sole discretion, reasonably believes that a Default is
likely to occur. Borrower shall pay upon demand all mortgage recording taxes,
charges, fees, cost and expenses incurred by the Agent or any of the Lenders in
connection with such recordation.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
Borrower represents and warrants the following as of the date hereof:
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).
Section 4.2 "Authorization of Agreement; No Violation." The execution,
delivery, and performance by Borrower of this Agreement and of the Loan
Documents (i) are within the Borrower's powers, (ii) have been duly authorized
by all necessary action, and (iii) do not violate or create a default under any
Requirement of Law, the Borrower's Certificate of Incorporation and By-Laws or
any Contractual Obligation binding on or affecting the Borrower or its property
(other than any violation or default that would not constitute a Material
Adverse Change).
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) and 3.1(a)(vii) 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 2 hereof.
b) Since December 31, 1997, there has been no Material Adverse Change,
except as otherwise disclosed in writing to the Agent in the press releases
dated February 4, 1999 and March 15, 1999 and 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 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 "Deliberately omitted."
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) Except for portions of any Mortgaged Property under construction or
which are to be demolished in the course of construction, 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 "Unrecorded Mortgages." Each Subsidiary Mortgagor which owns a
Mortgaged Property for which the Mortgage encumbering such Mortgaged Property
remains unrecorded pursuant to Section 3.3(c) is and shall remain a
single-purpose entity which, among other things, (i) has the ability and
capacity to pay the mortgage recording tax, (B) does not engage and has not
engaged in any business other than owning and operating such Mortgaged Property,
and has not acquired and does not own any assets other than such Mortgaged
Property, any incidental personal property, or such other property which has
been acquired without the prior written consent of the Agent, (C) has incurred
no debt as of the date hereof and shall not incur or create any debt except such
debt agreed to in advance by the Agent in writing, (D) maintains its assets in a
way which segregates and identifies such assets separate and apart from the
assets of any other person or entity, (E) holds itself out to the public as a
separate legal entity from any other person or entity, and (F) conducts business
solely in its own name.
Section 4.14 "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
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 4.15 "Deliberately omitted."
Section 4.16 "Deliberately omitted."
Section 4.17 "Insurance". Subject in all events to the provisions of
Section 5.5 hereof, notwithstanding anything to the contrary contained in the
Mortgages and subject to Section 4.17(b), the Borrower maintains upon or in
connection with each of the Mortgaged Properties:
a) 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 Section 4.17(b)) 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 Section 4.17 shall be
with companies and in amounts and with coverage and deductibles satisfactory to
the Lenders. All insurance required under this Section 4.17(a) with respect to
the Mortgaged Properties shall include endorsements naming the Lenders as loss
payees, and shall have endorsed thereon the standard mortgagee clause in favor
of the Lenders. All companies issuing policies required under Section 4.17 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 Section
4.17 shall provide that (i) 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 Agent, or,
in any other circumstance, at least thirty (30) days' prior written notice from
the insurance carrier to the Agent; and (ii) 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 Section 4.17, together with written
evidence that the premiums are paid current, at least ten (10) days prior to the
expiration of the then current policy.
(b) earthquake insurance provided for in Section 4.17(a) only for the
Mortgaged Properties and only to the extent (i) any Mortgaged Property is
located in an earthquake prone area and (ii) such insurance is available at
commercially reasonable rates.
(c) 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 (i) commercial
general liability (including contractual liability) covering each of the
Mortgaged Properties and the Borrower's 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; (ii) 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 (iii) worker's compensation insurance covering all of
the Borrower's 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 "products-completed operations endorsement."
(d) Insurance insuring against loss or damage by perils customarily
included under standard "builder's risk completed value non-reporting form" and
which include all insurance required to be carried by Borrower, as "owner,"
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 such ancillary facilities related thereto on each Mortgaged
Property, including all materials in storage and while in transit during
construction.
Section 4.18 "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,
except for unrecorded Mortgages, 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 the Commitment remains in effect
or any monetary obligation to the 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 Agent and the Lenders, which Liens to the Agent and the Lenders 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) Except for portions of any Mortgaged Property which are to be demolished
in the course of construction of an extended stay facility, 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 such 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 such 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.
f) 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), 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 4.19 "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 Agent 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 4.20 "Deliberately omitted."
Section 4.21 "Deliberately omitted."
Section 4.22 "Assessments." Subject to the provisions of Section 5.5
hereof, except as disclosed to Lenders in writing with respect to the applicable
Mortgaged Property, 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 4.23 "Flood Zone." Except as disclosed by a survey delivered
pursuant to Section 3.3(a)(iii), no Mortgaged Property is located in a flood
hazard area as defined by the Federal Emergency Management Agency.
Section 4.24 "Flood Zone." Subject to the provisions of Section 5.5 hereof,
except for portions of any Mortgaged Property which are to be demolished in the
course of construction of an extended stay facility and related ancillary
facilities thereon, 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 4.25 "Operation of Premises." Subject to the provisions of Section
5.5 hereof, except for portions of any Mortgaged Property which are to be
demolished in the course of construction of an extended stay facility and
related ancillary facilities thereon, each Mortgaged Property is being operated
and maintained in accordance with the Borrower's usual and customary business
practices.
Section 4.26 "Deliberately omitted."
Section 4.27 "Hazardous Materials." Subject to the provisions of Section
5.5 hereof, except as disclosed in the Studies, 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 4.28 "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
Effective 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 4.29 "Loan Documents." The provisions of the Loan Documents are
each effective to create, in favor of the 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
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 4.30 "Deliberately omitted."
Section 4.31 "Subsidiary Mortgagors." Each Subsidiary Mortgagor is a
Subsidiary of Borrower.
Section 4.32 "Deliberately omitted."
Section 4.33 "Deliberately omitted."
ARTICLE V
COVENANTS
Section 5.1 "Certain Affirmative Covenants." So long as the Commitment
remains in effect or any amounts due to the Agent or 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 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 Property), 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, 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 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 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) Management of Properties. Subject to the provisions of Section 5.5 hereof,
Borrower or a Subsidiary of shall directly or indirectly operate and manage the
business of the Borrower at each of the Mortgaged Properties; provided, however,
that with the prior written consent of the Agent, 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, keep the
Mortgaged Properties insured in the manner and in the amounts set forth in
Section 4.17.
(l) Further Assurances. The Borrower agrees upon demand of the 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 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 Agent and/or the Lenders such additional documents
and to provide such additional information as the 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) Deliberately omitted.
Section 5.2 "Reporting Covenants." So long as the Commitment remains in
effect or any monetary obligation to the Agent or the Lenders hereunder or under
the Promissory Notes or the other Loan Documents shall remain unpaid, the
Borrower will furnish to the Agent at the Borrower's sole cost and expense
(unless expressly waived by the 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, retained earnings, 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 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 Q, indicating to Agent's satisfaction, that (A) the
sources and uses of funds are in balance with respect to Borrower's business in
general and (B) 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, and 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 Q, indicating to Agent's satisfaction, that
(A) the sources and uses of funds are in balance with respect to Borrower's
business in general and (B) the Borrower has adequate sources to satisfy the
Borrower's cash requirements.
c) Annual Financial Statements With Respect to Operating Mortgaged Properties.
As soon as available and in any event within ninety (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 Agent, a statement with
respect to each of the operating Mortgaged Properties for such fiscal year, each
of which statements shall (i) be in the form of Exhibit L attached 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) Monthly Financial Statements With Respect to the Operating Mortgaged
Properties. As soon as available and in any event within thirty (30) days after
the end of each Accounting Period, a statement with respect to each of the
operating Mortgaged Properties as at the end of such Accounting Period, each of
which statements shall (i) be in the form of Exhibit L attached 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, (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 or the
chief financial officer or the Controller of the Borrower shall complete the
form of certificate attached as Exhibit D 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, 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) Deliberately omitted
(k) Other Information. With reasonable promptness, such other information about
the Borrower, Realty and the Mortgaged Properties as the Agent or the Lenders
may reasonably request from time to time.
Section 5.3 "Certain Negative Covenants." Neither Borrower nor, with
respect to subsections (k) through (r), any Subsidiary of Borrower will:
a) Deliberately omitted
b) Deliberately omitted
c) Deliberately omitted
d) Deliberately omitted
e) Deliberately omitted
f) Deliberately omitted
g) Deliberately omitted
h) Available Amount. Permit the aggregate principal amount of all outstanding
Advances at any time to exceed the lesser of (i) the Commitment, and (ii) the
Maximum Availability Amount at such time.
i) Deliberately omitted
j) Deliberately omitted
k) Sales, Transfers. Sell, transfer or enter into any agreement for the sale or
transfer of any of the Mortgaged Properties without the consent of the Agent,
which consent may be withheld in the Agent's sole discretion.
l) 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.
m) Deliberately omitted
n) 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 Agent:
(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.
o) Deliberately omitted
p) Use of Proceeds. Use the proceeds of the Advances for other than any
Permitted Purpose.
q) 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 4.32.
r) 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.
Section 5.4 "Material Casualties." The Borrower agrees that if at any time
prior to the repayment in full of the Advances and the termination of the
Commitment (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
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 Agent's written request, direct that the insurance proceeds from the
casualty be delivered over to the Agent, to be applied by the Agent to repayment
of or the Borrower's obligations under this Agreement and the other Loan
Documents.
Section 5.5 "Effect of Certain Representations or Covenants Being
Inaccurate or Breached." In the event that any of the representations and
warranties contained in Sections 4.11, 4.17, 4.18, 4.22, 4.24, 4.25, 4.27 and
4.28 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 (m) and 5.3(n) (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 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) (i) Borrower is given notice 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 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 Advances 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 Agent in
writing (Borrower hereby agreeing to so certify such amount promptly upon
Agent's request) as being Borrower's reasonable estimate (determined in a manner
reasonably acceptable to 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 Availability Amount as of such date recomputed by
subtracting from the Eligible Costs as of such date 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) 3% of the Eligible Costs as of such
date; provided, however, notwithstanding the foregoing, the aggregate principal
amount of all outstanding Advances shall not at any time exceed the lesser of
(i) the Commitment, and (ii) the Maximum Availability Amount at such time; 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 Agent in
its 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.
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 Advances
hereunder when due, or (ii) within three (3) days when due (including, without
limitation, by mandatory prepayment) (1) any interest on any of the Advances 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 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 3 days after notice from the Agent, (ii)
in the case of covenants or agreements contained in Section 5.2(a), (b), (c) and
(d) of this Agreement, for 15 Business Days after the occurrence thereof; or
(iii) in all other cases, for 30 days after the occurrence thereof. In the event
that a breach of a covenant described in clause (iii) above cannot be cured
within 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 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 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 shall fail to make any
payment of principal of or interest on any Indebtedness of the Borrower (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 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 3 days
after notice from the 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 15 Business Days after the occurrence thereof; or (iii) in
all other cases, for 30 days after the occurrence thereof. In the event that a
breach of a covenant described in clause (iii) above cannot be cured within 30
days after the occurrence thereof and the Borrower or such other Person 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 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 "Bankruptcy" as now or
hereafter in effect, or any successor thereto (the "Bankruptcy Code"); or an
involuntary case is commenced against the Borrower and the petition is not
dismissed within 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 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 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 Mortgagor.
h) Money Judgment. A judgment or order for the payment of money in excess of
$5,000,000 shall be rendered against the Borrower and such judgment or order
shall continue unsatisfied (in the case of a money judgment) and in effect for a
period of 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
is appealing or otherwise contesting such judgment in good faith).
i) Cessation. Borrower ceases, or threatens to cease, to carry on all or a
substantial part of its business.
(j) Suburban Credit Agreement. An Event of Default, as defined in the Suburban
Credit Agreement.
(k) Sale-Leaseback Facility. A default shall have occurred under the
Sale-Leaseback Facility.
(l) Appraisals. Agent shall have failed to receive an "as is" land
valuation, acceptable to Agent, for each of the Mortgaged Properties by May 18,
1999.
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 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 Commitment terminated,
whereupon the Commitment shall terminate immediately; (ii) declare all or any
portion of the principal of and any accrued interest on the Advances 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 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
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 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 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 Agent, in its sole and absolute 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 Agent, in its sole and
absolute discretion, shall determine, (iii) the 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 "one action" or "election 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 Agent and
the Lenders under this Agreement and the other Loan Documents shall remain in
full force and effect until the 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 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." All proceeds received by the 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 Advances and any unpaid fees
payable under this Agreement and the other Loan Documents in such order of
priority as the 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 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
Agent shall have no further liability with respect to such proceeds. All costs
and expenses of the Agent in connection with such action may be deducted or
charged by the Agent against such excess proceeds and shall otherwise be
reimbursed by the Borrower upon demand. The 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 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 Agent, and to
cause such mail to be delivered to such designated address where the 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
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
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 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 Agent of such Lender under the
Loan Documents, and each such Lender irrevocably authorizes Commerzbank AG, New
York Branch, to act as the Agent 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
Agent by the terms of this Agreement and the Loan Documents, together with such
other powers as are reasonably incidental thereto. The 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 Agent shall be read into any of the Loan
Documents or otherwise exist against the Agent. The provisions of this Article
VII are solely for the benefit of the 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 functions and duties under
the Loan Documents, the Agent shall act solely as the agent of the Lenders and
does not assume nor shall the 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 Agent may execute any of its duties
under the Loan Documents by or through agents or attorneys-in-fact and shall be
entitled to advice of counsel (including its internal counsel) concerning all
matters pertaining to such duties. The 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 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 Agent's own gross negligence or willful misconduct), or
(b) responsible in any manner to any of the Lenders for 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 for the value, validity, effectiveness, genuineness,
enforceability or sufficiency of any Loan Document or any such certificate,
report, statement or other document, or for any failure of the Borrower, or any
Lender to perform or observe its respective obligations hereunder or thereunder.
Unless the Agent shall have been requested to do so by a Lender on such Lender's
behalf, the 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 the Agent, on the one hand, and the Lenders, on
the other.
Section 7.4 "Reliance by the Agent." The 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
Agent. The 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 "Notice of Default." The Agent shall not be deemed to have
knowledge or notice of the occurrence of any Default or Event of Default unless
(i) the Agent 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) the Agent, in its capacity as a
Lender, has actual knowledge of such Default or Event of Default. In the event
that the Agent receives such a notice, the Agent shall promptly give notice
thereof to the Lenders. The 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 Agent shall have received such directions,
the 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
Agent shall deem advisable and in the best interests of the Lenders.
b) Each Lender agrees that it shall promptly notify the 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 Commitment, which notice will describe the Default or Event of Default or
matter in reasonable detail. The Agent shall give a copy of any such notice
received by the Agent to the other Lenders if such notice pertains to a Decision
by the Lenders pursuant to Section 7.14 or 7.15 hereof.
Section 7.6."Non-Reliance on the Agent and the Other Lenders." Each Lender
expressly acknowledges that neither the 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 the 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 Agent. Each
Lender represents and warrants to the Agent that it has, independently and
without reliance upon the 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 Commitment pursuant to this Agreement. Each Lender
also represents that it will, independently and without reliance upon the 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 Agent to the Lenders, the Agent 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 Agent
or any of its officers, directors, employees, agents, attorneys-in-fact or
affiliates.
Section 7.7 "Indemnification." The Lenders agree to indemnify the Agent (in
its capacity as such) and its 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 Agent or such Person in connection
with any investigative, administrative or judicial proceeding commenced or
threatened, whether or not the Agent or such Person shall be designated a party
thereto) that may at any time be imposed on, incurred by or asserted against the
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 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 "The Agent in Its Individual Capacity." The Agent and its
Affiliates may make loans to, accept deposits from and generally engage in any
kind of business with the Borrower as though it were not the Agent hereunder.
With respect to Advances made or renewed by it and any Promissory Note issued to
it, the Agent shall have the same rights and powers under this Agreement as any
Lender and may exercise the same as though it were not the Agent.
Section 7.9 "Agents Resignation." The Agent may resign at any time by
giving notice thereof to the Lenders and the Borrower. Upon any such
resignation, the Required Lenders shall designate within 45 days in writing
another Person as the successor Agent. Provided that no Event of Default shall
have occurred and be continuing, Borrower shall have the right to approve such
successor Agent. If such proposed successor Agent agrees in writing to act as
the Agent in accordance with the terms hereof, such successor Agent shall
thereupon succeed to and become vested with all the rights, powers, privileges,
duties and obligations of the resigning Agent, and the resigning Agent shall be
discharged from its duties and obligations as Agent under this Agreement. After
any retiring 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 Agent under this Agreement.
Section 7.10 "Appointment of a Substitute Agent." Commerzbank AG, New York
Branch, shall be the initial 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 any Agent determines, for good cause (including, without
limitation, a conflict which, in such Agent's judgment, is material), that it is
not in the best interest of the Agent to continue to act as the Agent, then the
Agent may, at its option and upon thirty (30) days' prior written notice to the
Borrower and the Lenders, request a substitute Agent be selected in accordance
with the terms of this Section to act as the 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 Agent, may elect to appoint a
substitute Agent in the event that the 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 Agent
shall have all the rights, powers and duties of the Agent and the term "Agent"
shall mean such substitute Agent, effective upon its appointment. In the event
that the substitute Agent wishes to resign, it may do so upon thirty (30) days'
prior notice to the Borrower, the Agent and the Lenders, and a new substitute
Agent shall be appointed in accordance with this Section. After any retiring
substitute Agent's resignation hereunder as substitute Agent, the provisions of
this Section 7.10 and Section 8.4 hereof shall inure to the benefit of such
retired substitute Agent as to any actions taken or omitted to be taken by it
while it was substitute Agent under this Agreement.
Section 7.11 "Loans." Each Lender shall make available to the Borrower such
Lender's portion of the Commitment 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 Commitment, 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 Advance, the Agent may
(but shall not be obligated to), and each Lender authorizes the Agent to,
advance for such Lender's account, pursuant to the terms hereof, the amount of
the Advance to be made by such Lender and each Lender agrees to reimburse the
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 Agent shall have made such amount available on behalf of any
Lender, such Lender shall also pay interest thereon to the Agent at the Federal
Funds Rate.
Section 7.12 "Priority of Loans." Each Lender's portion of the Commitment
shall be of equal priority with each other Lender's portion of the Commitment,
and no portion of the Commitment shall have priority or preference over any
other portion of the Commitment or the security therefor, except as provided in
Sections 7.20 through 7.24 hereof.
Section 7.13 "Books and Records." The Agent will keep customary books and
records relating to the Advances, and such books and records shall be available
at the Agent's office for the Lenders' reasonable inspection during the Agent's
normal business hours. The original Loan Documents shall be kept at the New York
office of the Agent or at such other office of the Agent or at such other place
as may be designated from time to time by the 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 the Lenders." Except as expressly set forth in
Sections 7.15 and 7.16 hereof, all decisions, consents, waivers, approvals and
other actions (collectively, "Decisions") authorized to be taken under or in
connection with this Agreement and the other Loan Documents by any Lender shall
be taken by the 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 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 Advances, and/or (iii) may waive any conditions in any Loan Documents, so
long as such consent, exercise or waiver would not, in the Agent's judgment
reasonably exercised, represent a departure from the standards followed by the
Agent in the administration of loans held by the Agent entirely for its own
account. The 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
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 Agent's possession or under its control. The
requested Decision shall be deemed approved by the Lenders if and when the 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 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 Agent, the Agent shall make a second written request for a
Decision from that Lender. If the Lender does not deliver to the 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 Agent is unable to
contact the usual representatives of a Lender for any reason, the 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
Agent reasonably deems necessary, any such Decision may also be requested
telephonically by the Agent from each Lender with such telephonic request to be
confirmed in writing by the Agent. Any Decision as to which the Agent has made
telephonic requests for approval shall be deemed approved by the Lenders after
the 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 "Unanimous Approvals by the Lenders." No written amendment,
supplement, modification or waiver which adds, deletes, changes or waives any
provisions of the Loan Documents shall (i) extend either the Maturity Date or
any installment or required prepayment of any Advances; (ii) reduce the rate or
extend the time of payment of interest on any Advances; (iii) reduce the
principal amount of any Advances; (iv) reduce the fees payable under this
Agreement and the other Loan Documents, or any other fee payable to the Lenders;
(v) change any Lender's portion of the Commitment or the amount of any Advance
of any Lender (except to the extent permitted by Sections 7.18 and 7.19 hereof);
(vii) change any provision of this Section 7.15 or the definition of Required
Lenders; (viii) modify any financial covenants, waive any Default or Event of
Default, or waive or release any lien on any of the Mortgaged Properties or
commence any judicial or nonjudicial foreclosure proceeding, in each case
without the written consent of all the Lenders; or (ix) amend, modify or waive
any provision of any Loan Document, if the effect thereof is to affect the
rights or duties of the Agent, without the written consent of the then the
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,
Agent and all future holders of the Promissory Notes. In the case of any waiver,
the Borrower, the Lenders and the 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." Upon the Agent's receipt
of a notice of default (as defined in Section 7.5(a) hereof) with respect to an
Event of Default, the 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 Agent shall pursue any
such course of action approved by the Required Lenders in respect of any such
Event of Default, including, without limitation, acceleration of the Advances.
In the event that the Required Lenders cannot decide which remedies, if any, are
to be pursued, the 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 Agent shall not, without the prior approval of the Required Lenders, (i)
enter into written amendments, supplements, modifications or waivers for the
purpose of adding, deleting, changing or waiving any of the provisions of
Article V or Section 6.1, except to the extent such amendment, supplement,
modification or waiver requires the unanimous consent of the Lenders pursuant to
Section 7.15 hereof, or (ii) enter into written amendments, supplements,
modifications or waivers for the purpose of adding, deleting, changing or
waiving any provision of the Loan Documents, except to the extent such
amendment, supplement, modification or waiver requires the unanimous consent of
the Lenders (pursuant to Section 7.15 hereof), or (iii) consent to, approve, or
waive the requirement of receipt of, any documents, certificates or other
agreements or statements delivered or to be delivered by the Borrower or any
other Person pursuant to Article III hereof, or (iv) consent to or permit (if
not expressly permitted under the Loan Documents) the assignment or transfer by
the Borrower of any of its rights and obligations under any Loan Document, or
consent to any merger or consolidation or sale, lease or other disposal of all
or a substantial part of the Borrower's property or assets.
c) All losses, costs, expenses, disbursements, liabilities, fees (including
reasonable attorneys' fees and disbursements), obligations, damages, suits,
actions and penalties of any kind or nature whatsoever (collectively, a "Loss")
incurred by the Agent in connection with the Advances or the enforcement thereof
shall be borne by the Lenders in accordance with each Lender's Percentage.
d) Each Lender shall, upon demand by the Agent, reimburse the Agent (to the
extent not otherwise reimbursed by the Borrower) for such Lender's Percentage of
(i) any out-of-pocket expenses incurred by the Agent in good faith in connection
with any Event of Default under the Loan Documents (including, without
limitation, reasonable fees and disbursements of outside counsel), and (ii) any
other expenses incurred in good faith to the extent not reimbursed by the
Borrower in connection with the enforcement of the Loan Documents.
e) The Borrower hereby consents and agrees to the provisions of Sections 7.14
through 7.16 and any modifications thereof entered into by the Agent and the
Lenders of such provisions and specifically acknowledges and agrees that,
notwithstanding any provisions in the Loan Documents requiring action by the
"Lenders" 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 Agent is
hereby empowered to act on behalf of the Lenders in accordance with the
provisions hereof and the authority of the Agent with respect to any action
taken by the 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
"Participant") participating interests in any Advance 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 "Credit Exposure").
Notwithstanding any such sale by a Lender of participating interests to a
Participant, unless the Agent shall have agreed otherwise, 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 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 2.15 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 Advance 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." 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
affiliate thereof or to any other Person (each a "Purchasing Lender") all or any
part of its Credit Exposure in amounts not less than $10,000,000. The Borrower,
the 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 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 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 M
hereto (a "Form 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 and the 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 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
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 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, 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, Los Angeles 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, Los Angeles Branch's Percentage shall be
less than 20%, unless the foregoing shall (or in Commerzbank AG, Los Angeles
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, Los Angeles 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 "Non-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 the 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 Advances with respect to all
sums of any kind paid to or received by such Lender in payment of all or a
portion of the Advances 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 Advances 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. "Acknowledgment 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 Agent's acting as the Agent on behalf of the Lenders with
regard to all aspects of the administration, enforcement and collection of the
Advances and to all matters pertaining to the Loan Documents as provided for
herein.
Section 7.23 "Rights of the Lenders and the Agent to Transact Busines." The
Lenders, the Agent and/or any of their respective affiliates may accept deposits
from, lend money to, act as trustee under indentures of, and generally engage in
any kind of business with, the Borrower or any other Person without any duty to
account therefor to the other Lenders and/or the Agent, as the case may be.
Section 7.24 "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 Advance 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 Advance then owed and due to such Lender bears to the
total of such Advance 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
Advance 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 7.25 "Limitation of Liability." No claim may be made by the
Borrower or any other Person against the 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 3 annexed hereto or such other
address or telecopier number as such party may hereafter specify by notice to
the Agent and the Borrower. No notices, requests, and other communications given
to any Person other than the Agent (including, without limitation, any Affiliate
of the Agent) shall be deemed to have been given to the 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 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: whether or not
the transactions hereby contemplated are consummated, pay all reasonable
out-of-pocket costs and expenses of 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 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 Agent and the Lenders);
b) to the extent permitted by applicable law, pay and hold the 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 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 any of the Advances 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 to Setoff." 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." 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"
(a) (a) The provisions:
(i) the letter agreements among the Borrower, Xxxxx Fargo Bank,
National Association and Agent dated as of March 18, 1999, March 15, 1999,
February 4, 1999, January 25, 1999, and September 3, 1998, and
(ii) the letter agreement dated as of August 25, 1997 among the
Borrower, Commerzbank AG, Los Angeles Branch and Agent,
each of which letter agreement is attached hereto as Exhibit R shall survive the
execution of this Agreement and shall be deemed incorporated herein.
(b) Except as set forth in subsection (a) above, 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 "Deliberately omitted"
Section 8.12 "Subordination of Certain Mortgaged Property." Agent agrees
that, upon Borrower's request (a "Subordination Request"), it will deliver to
Borrower a form of subordination, duly executed and acknowledged by the Agent,
subordinating the lien of the applicable Mortgage (a "Subordination"), to any
Development Encumbrances on a Mortgaged Property, but only if and on the
condition that:
(i) each Subordination Request shall be in writing, shall contain all
information necessary for the Agent to cause a Subordination in recordable form
to be prepared and shall be given at least ten (10) Business Days prior to the
requested date of such Subordination;
(ii) Agent shall have received an endorsement to the title policy referred to in
Section 3.3(a)(iii) with respect to the applicable Mortgaged Property indicating
that since the date of the last endorsement to such policy there has been no
change in the state of title not theretofore approved by Agent, providing with
respect to such Development Encumbrances a so-called "comprehensive endorsement"
(or equivalent), to the extent available in the jurisdiction in which such
Mortgaged Property is located, and such other affirmative insurance as Agent
shall reasonably require, which endorsement shall have the effect of redating
the title policy to the date of recordation of, and insuring the lien of the
Mortgage as subordinated pursuant to, the Subordination;
(iii) as of the date of such Subordination Request, and as of the effective date
of such Subordination (before as well as after giving effect to such
Subordination), no Default or Event of Default shall have occurred and be
continuing, and each Subordination Request shall constitute Borrower's
representation and warranty that the foregoing is true, complete and accurate;
(iv) before as well as after giving effect to such Subordination, 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 Effective 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 Subordination;
(v) Borrower executes, acknowledges and delivers to Agent, at Borrower's
expense, any and all documents and instruments reasonably required by Agent to
preserve and maintain Agent's and Lenders' rights, upon and following any such
Subordination, under and with respect to the Loan Documents; and
(vi) (1) The Agent shall have received payment of all costs and expenses (other
than the legal fees described in the following clause (2) of this subparagraph)
incurred by Agent in connection with such Subordination, including, but not
limited to, all title insurance premiums arising as a result of endorsements
required by Agent in connection with such Subordination, and (2) receipt of a
Subordination Request for each Subordination shall constitute Borrower's
agreement and covenant to pay to the 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 Subordination, the documents and instruments described in this
Section, and all other documents relating to, and rendering at the request of
Agent all advice respecting, each Subordination.
Section 8.13 "Confidentiality by the Agent and the Lenders." The Agent and
the 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 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 Agent or the Lenders (including, without
limitation, employees, counsel, accountants, engineers, advisers, experts and
consultants to the Agent or the Lenders). Except as provided for in the next
sentence, in the event that the 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 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 8.13 shall not apply to (a) the
disclosure or sharing of any Non-public information among the Agent and the
Lenders, (b) the disclosure by the 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 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 Agent or the Lenders by the Borrower.
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.
[Signatures on following page]
HOMESTEAD VILLAGE INCORPORATED
By
Name:
Title:
COMMERZBANK AG, New York Branch, as Agent
By
Name:
Title:
And by
Name:
Title:
COMMERZBANK AG, Los Angeles Branch, as a lender
By
Name:
Title:
And by
Name:
Title:
