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EXHIBIT 10.4
AMENDED AND RESTATED CREDIT AGREEMENT
(TERM LOAN)
AMONG
MHC OPERATING LIMITED PARTNERSHIP,
AN ILLINOIS LIMITED PARTNERSHIP,
AS BORROWER,
MANUFACTURED HOME COMMUNITIES, INC.,
A MARYLAND CORPORATION,
THE REIT,
XXXXX FARGO BANK, N.A.,
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION,
COMMERZBANK AKTIENGESELLSCHAFT,
CHICAGO BRANCH
AND
XXXXXX GUARANTY TRUST COMPANY OF NEW YORK,
TOGETHER WITH THOSE ASSIGNEES
BECOMING PARTIES HERETO PURSUANT
TO SECTION 10.11, AS LENDERS,
XXXXX FARGO BANK, N.A.,
AS AGENT
DATED AS OF APRIL 28, 1998
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RECITALS......................................................................................................1
ARTICLE I - DEFINITIONS ......................................................................................1
1.01 Certain Defined Terms ..................................................................................1
1.02 Computation of Time Periods............................................................................21
1.03 Terms..................................................................................................21
ARTICLE II - LOAN ...........................................................................................22
2.01 Making of Loan and Repayment ..........................................................................22
2.02 Borrowing and Interest Rate Election Authorization ....................................................25
2.03 Interest on the Loan...................................................................................25
2.04 Fees...................................................................................................30
2.05 Payments...............................................................................................30
2.06 Increased Capital......................................................................................31
2.07 Notice of Increased Costs .............................................................................31
2.08 Option to Replace Lenders .............................................................................32
ARTICLE III - CONDITIONS TO LOAN ............................................................................33
3.01 Conditions to Disbursement of Loan ....................................................................33
ARTICLE IV - REPRESENTATIONS AND WARRANTIES .................................................................35
4.01 Representations and Warranties as to Borrower .........................................................35
4.02 Representations and Warranties as to the REIT .........................................................40
ARTICLE V - REPORTING COVENANTS .............................................................................44
5.01 Financial Statements and Other Financial and Operating Information ....................................44
5.02 Press Releases; SEC Filings and Financial Statements ..................................................47
5.03 Environmental Notices .................................................................................47
5.04 Qualifying, Unencumbered Properties ...................................................................47
ARTICLE VI - AFFIRMATIVE COVENANTS ..........................................................................48
6.01 With respect to Borrower: .............................................................................48
6.02 With respect to the REIT: .............................................................................50
ARTICLE VII - NEGATIVE COVENANTS ............................................................................51
7.01 With respect to Borrower: .............................................................................52
7.02 With respect to the REIT: .............................................................................56
ARTICLE VIII - FINANCIAL COVENANTS ..........................................................................58
8.01 Total Liabilities to Gross Asset Value ................................................................58
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8.02 Secured Debt to Gross Asset Value .....................................................................58
8.03 EBITDA to Interest Expense Ratio.......................................................................58
8.04 EBITDA to Fixed Charges Ratio .........................................................................58
8.05 Unencumbered Net Operating Income to Unsecured Interest Expense .......................................58
8.06 Unencumbered Pool......................................................................................58
8.07 Minimum Net Worth......................................................................................59
8.08 Permitted Holdings.....................................................................................59
8.09 Calculation............................................................................................60
ARTICLE IX - EVENTS OF DEFAULT; RIGHTS AND REMEDIES .........................................................60
9.01 Events of Default......................................................................................60
9.02 Rights and Remedies....................................................................................64
9.03 Rescission.............................................................................................65
ARTICLE X -AGENCY PROVISIONS ................................................................................66
10.01 Appointment............................................................................................66
10.02 Nature of Duties.......................................................................................66
10.03 Loan Continuation/Conversion...........................................................................66
10.04 Distribution and Apportionment of Payments.............................................................67
10.05 Rights, Exculpation, Etc...............................................................................68
10.06 Reliance...............................................................................................69
10.07 Indemnification........................................................................................69
10.08 Agent Individually ....................................................................................69
10.09 Successor Agent; Resignation of Agent; Removal of Agent ...............................................69
10.10 Consents and Approvals ................................................................................70
10.11 Assignments and Participations ........................................................................72
10.12 Ratable Sharing .......................................................................................75
10.13 Delivery of Documents .................................................................................76
10.14 Notice of Events of Default ...........................................................................76
ARTICLE XI - MISCELLANEOUS ..................................................................................76
11.01 Expenses...............................................................................................76
11.02 Indemnity .............................................................................................77
11.03 Change in Accounting Principles .......................................................................78
11.04 Setoff.................................................................................................79
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11.05 Amendments and Waivers.................................................................................79
11.06 Independence of Covenants .............................................................................80
11.07 Notices and Delivery ..................................................................................81
11.08 Survival of Warranties, Indemnities and Agreements ....................................................81
11.09 Failure or Indulgence Not Waiver; Remedies Cumulative .................................................81
11.10 Marshaling; Recourse to Security; Payments Set Aside ..................................................81
11.11 Severability...........................................................................................82
11.12 Headings...............................................................................................82
11.13 Governing Law..........................................................................................82
11.14 Limitation of Liability................................................................................82
11.15 Successors and Assigns.................................................................................82
11.16 Usury Limitation.......................................................................................82
11.17 Confidentiality........................................................................................83
11.18 CONSENT TO JURISDICTION AND SERVICE OF PROCESS; WAIVER OF JURY TRIAL; WAIVER OF
PERMISSIVE COUNTERCLAIMS.....................................................................................83
11.19 Counterparts; Effectiveness; Inconsistencies ..........................................................84
11.20 Construction ..........................................................................................84
11.21 Entire Agreement ......................................................................................85
11.22 Agent's Action for Its Own Protection Only ............................................................85
11.23 Lenders' ERISA Covenant................................................................................85
EXHIBITS
A - Assignment and Assumption
B - Closing Checklist
C - Compliance Certificate
D - Loan Note
E-1 - Notice of Borrowing
E-2 - Notice of Continuation
F - Qualified Unencumbered Properties
SCHEDULES
4.01(c) - Ownership of Borrower
4.01(r) - Environmental Matters
4.01(v) - Subsidiaries and Investment Affiliates
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AMENDED AND RESTATED CREDIT AGREEMENT
THIS AMENDED AND RESTATED CREDIT AGREEMENT is dated as of April 28,
1998 (as amended, supplemented or modified from time to time, the "Agreement")
and is among MHC Operating Limited Partnership, an Illinois limited partnership
("Borrower"), Manufactured Home Communities. Inc., a Maryland corporation (the
"REIT"), each of the Lenders, as hereinafter defined, and Xxxxx Fargo Bank, N.A.
("Xxxxx Fargo") in its capacity as Agent and as a Lender, Bank of America
National Trust and Savings Association, as Syndication Agent and as a Lender,
Xxxxxx Guaranty Trust Company of New York, as Documentation Agent and as a
Lender, and Commerzbank Aktiengesellschaft, Chicago Branch, as a Lender.
RECITALS
A. Borrower and the REIT have executed and delivered to Agent and the
Lenders that certain Credit Agreement dated as of April 3, 1997, by and among
Borrower, the REIT, Agent and the Lenders (the "Existing Credit Agreement"); and
B. Borrower, the REIT, Agent and the Lenders desire to amend and
restate the Existing Credit Agreement in its entirety to increase the term loan
facility provided thereby from Sixty Million Dollars ($60,000,000) to One
Hundred Million Dollars ($100,000.000), and make certain other modifications as
hereinafter set forth.
AGREEMENT
ARTICLE I
DEFINITIONS
1.01 Certain Defined Terms. The following terms used in this Agreement
shall have the following meanings (such meanings to be applicable, except to the
extent otherwise indicated in a definition of a particular term, both to the
singular and the plural forms of the terms defined):
"Accommodation Obligations" as applied to any Person, means any
obligation, contingent or otherwise, of that Person in respect of which that
person is liable for any Indebtedness or other obligation or liability of
another Person, including without limitation and without duplication (i) any
such Indebtedness, obligation or liability directly or indirectly guaranteed,
endorsed (otherwise than for collection or deposit in the ordinary course of
business), co-made or discounted or sold with recourse by that Person, or in
respect of which that Person is otherwise directly or indirectly liable,
including Contractual Obligations (contingent or otherwise) arising through any
agreement to purchase, repurchase or otherwise acquire such Indebtedness,
obligation or liability or any security therefor, or to provide funds for the
payment or discharge thereof (whether in the form of loans. advances, stock
purchases, capital
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contributions or otherwise), or to maintain solvency, assets, level of income,
or other financial condition, or to make payment other than for value received
and (ii) any obligation of such Person arising through such Person's status as a
general partner of a general or limited partnership with respect to any
Indebtedness, obligation or liability of such general or limited partnership.
"Accountants" means any nationally recognized independent accounting
firm.
"Adjusted Asset Value" means, as of any date of determination, (i) for
any Property for which an acquisition or disposition by Borrower or any
Subsidiary has not occurred in the Fiscal Quarter most recently ended as of such
date, the product of four (4) and a fraction, the numerator of which is EBITDA
for such Fiscal Quarter attributable to such Property in a manner reasonably
acceptable to Agent, and the denominator of which is eight hundred seventy-five
ten thousandths (0.0875), and (ii) for any Property which has been acquired by
Borrower or any Subsidiary in the Fiscal Quarter most recently ended as of such
date, the Net Price of the Property paid by Borrower or its Subsidiaries for
such Property.
"Affiliates" as applied to any Person, means any other Person directly
or indirectly controlling, controlled by, or under common control with, that
Person. For purposes of this definition, "control" (including with correlative
meanings, the terms "controlling," "controlled by" and "under common control
with"), as applied to any Person, means (a) the possession, directly or
indirectly, of the power to vote twenty-five percent (25%) or more of the
Securities having voting power for the election of directors of such Person or
otherwise to direct or cause the direction of the management and policies of
that Person, whether through the ownership of voting Securities or by contract
or otherwise, (b) the ownership of a general partnership interest in such Person
or (c) the ownership of twenty-five percent (25%) or more of the limited
partnership interests (or other ownership interests with similarly limited
voting rights) in such Person; provided, however, that in no event shall the
Affiliates of Borrower or any Subsidiary or any Investment Affiliate include
Persons holding direct or indirect ownership interests in the REIT or any other
real estate investment trust which holds a general partnership interest in
Borrower if such Person does not otherwise constitute an "Affiliate" hereunder;
provided, further, that the REIT and Borrower shall at all times be deemed
Affiliates of each other.
"Agent" means Xxxxx Fargo in its capacity as administrative agent for
the Lenders under this Agreement, and shall include any successor Agent
appointed pursuant hereto and shall be deemed to refer to Xxxxx Fargo in its
individual capacity as a Lender where the context so requires.
"Agreement" has the meaning ascribed to such term in the Preamble
hereto.
"Agreement Party" means any Person, other than the REIT and Borrower.
which concurrently with this Agreement or hereafter executes and delivers a
guaranty in connection with this Agreement, which as of the date of
determination, is in force and effect.
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"Assignment and Assumption" means an Assignment and Assumption in the
form of Exhibit A hereto (with blanks appropriately filled in) delivered to
Agent in connection with each assignment of a Lender's interest under this
Agreement pursuant to Section 10.11.
"Balloon Payment" means, with respect to any loan constituting
Indebtedness, any required principal payment of such loan which is either (i)
payable at the maturity of such Indebtedness or (ii) in an amount which exceeds
twenty-five percent (25%) of the original principal amount of such loan;
provided, however, that the final payment of a fully amortizing loan shall not
constitute a Balloon Payment.
"Base Rate" means, on any day, a fluctuating interest rate per annum as
shall be in effect from time to time, which rate shall at all times be equal to
the higher of (a) the base rate of interest per annum established from time to
time by Xxxxx Fargo, and designated as its prime rate and in effect on such day,
and (b) the Federal Funds Rate as announced by the Federal Reserve Bank of New
York in effect on such day plus one half percent (0.5%) per annum. Each change
in the Base Rate shall become effective automatically as of the opening of
business on the date of such change in the Base Rate, without prior written
notice to Borrower or Lenders. The Base Rate may not be the lowest rate of
interest charged by any bank, Agent or Lender on similar loans.
"Base Rate Loans" means that portion of the Loan bearing interest at
the Base Rate.
"Base Rent" means the aggregate rent received by Borrower from tenants
which lease manufactured community home sites owned by Borrower minus any
amounts specifically identified as and representing payments for trash removal,
cable television, water, electricity, taxes, other utilities, and other rent
which reimburses expenses related to tenant's occupancy.
"Benefit Plan" means any employee pension benefit plan as defined in
Section 3(2) of ERISA (other than a Multiemployer Plan) which a Person or any
ERISA Affiliate maintains, administers, contributes to or is required to
contribute to, or, within the immediately preceding five (5) years, was
maintained administered, contributed to or was required to contribute to, or
under which a Person or any ERISA Affiliate may have any liability.
"Borrower" has the meaning ascribed to such term in the preamble
hereto.
"Borrower Plan" shall mean any Plan (A) which Borrower, any of its
Subsidiaries or any of its ERISA Affiliates maintains administers, contributes
to or is required to contribute to, or, within the five years prior to the
Closing Date, maintained, administered, contributed to or was required to
contribute to, or under which Borrower, any of its Subsidiaries or any of its
ERISA Affiliates may incur any liability and (B) which covers any employee or
former employee of Borrower, any of its Subsidiaries or any of its ERISA
Affiliates (with respect to their relationship with such entities).
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"Borrower's Share" means Borrower's or the REIT's direct or indirect
share of the assets, liabilities, income, expenses or expenditures, as
applicable, of an Investment Affiliate based upon Borrower's or the REIT's
percentage ownership (whether direct or indirect) of such Investment Affiliate,
as the case may be.
"Business Day" means (a) with respect to any payment or rate
determination of LIBOR Loans, a day, other than a Saturday or Sunday, on which
Agent is open for business in Chicago and San Francisco and on which dealings in
Dollars are carried on in the London inter bank market, and (b) for all other
purposes any day excluding Saturday, Sunday and any day which is a legal holiday
under the laws of the States of California and Illinois, or is a day on which
banking institutions located in California and Illinois are required or
authorized by law or other governmental action to close.
"Capital Expenditures" means, as applied to any Person for any period,
the aggregate of all expenditures (whether paid in cash or accrued as
liabilities during that period and including that portion of Capital Leases
which is capitalized on the balance sheet of a Person) by such Person during
such period that, in conformity with GAAP, are required to be included in or
reflected by the property, plant or equipment or similar fixed asset accounts
reflected in the balance sheet of such Person, excluding any expenditures
reasonably determined by such Person as having been incurred for expansion of
the number of manufactured home sites at a manufactured home community owned by
such Person.
"Capital Leases," as applied to any Person, means any lease of any
property (whether real, personal or mixed) by that Person as lessee which, in
conformity with GAAP, is or should be accounted for as a capital lease on the
balance sheet of that Person, excluding ground leases.
"Cash Equivalents" means (a) marketable direct obligations issued or
unconditionally guaranteed by the United States Government or issued by an
agency thereof and backed by the full faith and credit of the United States, in
each case maturing within one (1) year after the date of acquisition thereof,
(b) marketable direct obligations issued by any state of the United States of
America or any political subdivision of any such state or any public
instrumentality thereof maturing within ninety (90) days after the date of
acquisition thereof and, at the time of acquisition, having one of the two
highest ratings obtainable from any two nationally recognized rating services
reasonably acceptable to Agent; (c) domestic corporate bonds, other than
domestic corporate bonds issued by Borrower or any of its Affiliates, maturing
no more than 2 years after the date of acquisition thereof and, at the time of
acquisition, having a rating of at least A or the equivalent from two nationally
recognized rating services reasonably acceptable to Agent; (d) variable-rate
domestic corporate notes or medium term corporate notes, other than notes issued
by Borrower or any of its Affiliates, maturing or resetting no more than I year
after the date of acquisition thereof and having a rating of at least AA or the
equivalent from, two nationally recognized rating services reasonably acceptable
to Agent; (e) commercial paper (foreign and domestic) or master notes, other
than commercial paper or master notes issued by
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Borrower or any of its Affiliates, and, at the time of acquisition, having a
long-term rating of at least A or the equivalent from a nationally recognized
rating services reasonably acceptable to Agent and having a short-term rating of
at least A-1 and P-1 from S&P and Xxxxx'x, respectively (or, if at any time
neither S&P nor Xxxxx'x shall be rating such obligations, then the highest
rating from such other nationally recognized rating services reasonably
acceptable to Agent); (f) domestic and Eurodollar certificates of deposit or
domestic time deposits or Eurotime deposits or bankers' acceptances (foreign or
domestic) that are issued by a bank (I) which has, at the time of acquisition, a
long-term rating of at least A or the equivalent from a nationally recognized
rating service reasonably acceptable to Agent and (II) if a domestic bank, which
is a member of the Federal Deposit Insurance Corporation; and (g) overnight
securities repurchase agreements, or reverse repurchase agreements secured by
any of the foregoing types of securities or debt instruments, provided that the
collateral supporting such repurchase agreements shall have a value not less
than 101% of the principal amount of the repurchase agreement plus accrued
interest.
"Closing Checklist" means the Closing Checklist attached hereto as
Exhibit B, as the same may be amended by the parties.
"Closing, Date" means the date on which this Agreement shall become
effective in accordance with Section 11. 19, which date shall be April 28, 1998
or such later date as to which Agent and Borrower agree in writing.
"Commission" means the Securities and Exchange Commission.
"Commitment" means, with respect to any Lender, the principal amount
set out under such Lender's name under the heading "Loan Commitment" on the
counterpart signature pages attached to this Agreement or as set forth on an
Assignment and Assumption complying with Section 10.11 and executed by such
Lender, as assignee, as such amount may be adjusted pursuant to the terms of
this Agreement.
"Compliance Certificate" means a certificate in the form of Exhibit C
hereto delivered to Agent by Borrower pursuant to Section 5.01(c) and covering
Borrower's compliance with the financial covenants contained in Articles VII
and VIII hereof.
"Contaminant" means any pollutant (as that term is defined in 42 U.S.C.
9601(33)) or toxic pollutant (as that term is defined in 33 U.S.C. 1362(13)),
hazardous substance (as that term is defined in 42 U.S.C. 9601(14)), hazardous
chemical (as that term is defined by 29 C.F.R. Section 1910.1200(c)), toxic
substance, hazardous waste (as that term is defined in 42 U.S.C. 6903(5)),
radioactive material, special waste, petroleum (including crude oil or any
petroleum-derived substance, waste, or breakdown or decomposition product
thereof), or any constituent of any such substance or waste, including, but not
limited to hydrocarbons (including naturally occurring or man-made petroleum and
hydrocarbons), flammable explosives, urea formaldehyde insulation, radioactive
materials, biological substances, PCBs, pesticides, herbicides, asbestos, sewage
sludge, industrial slag, acids, metals, or solvents.
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"Continuation/Conversion Date" means, with respect to the continuation
of a LIBOR Loan or the conversion of a Base Rate Loan into a LIBOR Loan, and
vice versa, the date of such continuation or conversion.
"Contractual Obligation," as applied to any Person, means any provision
of any Securities issued by that Person or any indenture, mortgage, deed of
trust, lease, contract, undertaking, document or instrument to which that Person
is a party or by which it or any of its properties is bound, or to which it or
any of its properties is subject (including without limitation any restrictive
covenant affecting such Person or any of its properties).
"Controlled Partnership Interests" means ownership interests held by
the REIT and/or Borrower in a partnership or joint venture where the REIT or
Borrower (independently or collectively) has control over the management and
operations of the partnership or joint venture.
"Convertible Securities" means evidences of indebtedness, shares of
stock, limited or general partnership interests or other ownership interests,
warrants, options, or other rights or securities which are convertible into or
exchangeable for, with or without payment of additional consideration, shares of
common stock of the REIT or partnership interests of Borrower, as the case may
be, either immediately or upon the arrival of a specified date or the happening
of a specified event.
"Court Order" means any judgment, writ, injunction, decree, rule or
regulation of any court or Governmental Authority binding upon the Person in
question.
"Debt Service" means, for any period, Interest Expense for such period
plus scheduled principal amortization (exclusive of Balloon Payments) for such
period on all Indebtedness of the REIT, on a consolidated basis, plus, the
REIT's and Borrower's actual or potential liability, on a consolidated basis,
for scheduled principal amortization (exclusive of Balloon Payments) for such
period on all Indebtedness of Investment Affiliates that is recourse to the
REIT, Borrower or any Material Subsidiary.
"Development Activity" means construction in process, that is being
performed by or at the direction of Borrower, of any manufactured home community
that will be owned and operated by Borrower upon completion of construction,
other than (i) construction in process of manufactured home communities not
owned by Borrower and for which Borrower has no contractual obligation to
purchase until completion of construction or (ii) construction in process for
the purpose of expanding manufactured home communities that have been operated
by Borrower or another owner for at least one (1) year prior to the commencement
of such expansion.
"Documentation Agent means Xxxxxx Guaranty Trust Company of New York in
its capacity as documentation agent for the Lenders under this Agreement
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"DOL" means the United States Department of Labor and any successor
department or agency.
"Dollars" and "$" means the lawful money of the United States of
America.
"EBITDA" means, for any period (i) Net Income for such period, plus
(ii) depreciation and amortization expense and other non-cash items deducted in
the calculation of Net Income for such period, plus (iii) Interest Expense
deducted in the calculation of Net Income for such period, plus, (iv) Taxes
deducted in the calculation of Net Income for such period, minus (v) the gains
(and plus the losses) from extraordinary or unusual items or asset sales or
write-ups or forgiveness of indebtedness included in the calculation of Net
Income for such period, minus (vi) earnings of Subsidiaries for such period
distributed to third parties, all of the foregoing without duplication.
"Environmental Laws" means all federal, state, district, local and
foreign laws, and all orders, consent orders, judgments, notices, permits or
demand letters issued, promulgated or entered thereunder, relating to pollution
or protection of the environment, including laws relating to emissions,
discharges, releases or threatened releases of pollutants, contamination,
chemicals, or industrial substances or Contaminants into the environment
(including, without limitation, ambient air, surface water, ground water, land
surface or subsurface strata) or otherwise relating to the generation,
manufacture, processing, distribution, use, treatment, storage, disposal,
transport or handling of pollutants, contamination, chemicals, industrial
substances or Contaminants. The term Environmental Laws shall include, without
limitation, the Comprehensive Environmental Response, Compensation and Liability
Act of 1980, as amended ("CERCLA"); the Toxic Substances Control Act, as
amended; the Hazardous Materials Transportation Act, as amended; the Resource
Conservation and Recovery Act, as amended ("RCRA"); the Clean Water Act, as
amended; the Safe Drinking Water Act, as amended; the Clean Air Act, as amended;
all analogous state laws; the plans, rules, regulations or ordinances adopted,
or other criteria and guidelines promulgated pursuant to the preceding laws or
other similar laws, regulations, rules or ordinances now or hereafter in effect
regulating public health, welfare or the environment.
"Environmental Lien" means a Lien in favor of any Governmental
Authority for (a) any liability under federal or state environmental laws or
regulations, or (b) damages arising from, or costs incurred by such Governmental
Authority in response to, a Release or threatened Release of a Contaminant into
the environment
"ERISA" means the Employee Retirement Income Security Act of 1974. as
amended from time to time, and any successor statute.
"ERISA Affiliate" means any (a) corporation which is, becomes, or is
deemed by any Governmental Authority to be a member of the same controlled group
of corporations (within the meaning of Section 414(b) of the Internal Revenue
Code) as a Person or is so deemed by such Person, (b) partnership, trade or
business (whether or not incorporated) which is,
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becomes or is deemed by any Governmental Authority to be under common control
(within the meaning of Section 414(c) of the Internal Revenue Code) with such
Person or is so deemed by such Person, (c) any Person which is, becomes or is
deemed by any Governmental Authority to be a member of the same "affiliated
service group" (as defined in Section 414(m) of the Internal Revenue Code) as
such Person or is so deemed by such Person, or (d) any other organization or
arrangement described in Section 414(o) of the Internal Revenue Code which is,
becomes or is deemed by such Person or by any Governmental Authority to be
required to be aggregated pursuant to regulations issued under Section 414(o) of
the Internal Revenue Code with such Person pursuant to Section 414(o) of the
Internal Revenue Code or is so deemed by such Person.
"Event of Default" means any of the occurrences set forth in Article IX
after the expiration of any applicable grace period expressly provided therein.
"Existing Credit Agreement" has the meaning set forth in the Recitals
hereto.
"Existing Loan" means the "Loan" as defined in the Existing Credit
Agreement.
"Existing Pro Rata Share" means, with respect to any Lender, such
Lender's "Pro Rata Share" as defined in the Existing Credit Agreement.
"Extended Maturity Date" means April 3, 2002.
"Extension Notice" has the meaning ascribed to such term in Section
2.01(d).
"Facility" means the loan facility of One Hundred Million Dollars
($100,000,000) described in Section 2.01 (a).
"FDIC" means the Federal Deposit Insurance Corporation or any successor
thereto.
"Federal Funds Rate" means, for any period, a fluctuating interest
rate, rounded upwards to the nearest one hundredth of one percent (0.01%), per
annum equal for each day during such period to the weighted average of the rates
on overnight Federal Funds transactions with members of the Federal Reserve
System arranged by Federal Funds brokers, as published for such day (or, if such
day is not a Business Day, for the next preceding Business Day) by the Federal
Reserve Bank of New York, or, if such rate is not so published for any day which
is a Business Day, the average of the quotations for such day on such
transactions received by Agent from three Federal Funds brokers of recognized
standing selected by Agent.
"Federal Reserve Board" means the Board of Governors of the Federal
Reserve System or any governmental authority succeeding to its functions.
"Financial Statements" has the meaning ascribed to such term in Section
5.01(a).
"Fiscal Quarter" means a fiscal quarter of a Fiscal Year.
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"Fiscal Year" means the fiscal year of Borrower and the REIT which
shall be the twelve (12) month period ending on the last day of December in each
year.
"Fixed Charges" for any Fiscal Quarter period means the sum of (i) Debt
Service for such period, (ii) 3% of Base Rent for such period, and (iii)
Borrower's Share of Capital Expenditures from Investment Affiliates for such
period.
"Funds from Operations" means the definition of "Funds from Operations"
of the National Association of Real Estate Investment Trusts on the date of
determination (before allocation of minority interests).
"GAAP" means generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board and the American
Institute of Certified Public Accountants and statements, and pronouncements of
the Financial Accounting Standards Board, or in such other statements by such
other entity as may be in general use by significant segments of the accounting
profession, which are applicable to the circumstances as of the date of
determination and which are consistent with the past practices of the REIT and
Borrower.
"Governmental Authority" means any nation or government, any federal,
state, local, municipal or other political subdivision thereof or any entity
exercising executive, legislative, judicial, regulatory or administrative
functions of or pertaining to government.
"Gross Asset Value" means (subject to the proviso in Section 8.08),
with respect to any Person as of any date of determination, the sum of the
Adjusted Asset Values for each Property then owned by such Person plus the value
of any cash or Cash Equivalent owned by such Person and not subject to any Lien.
"Indebtedness," as applied to any Person (and without duplication),
means (a) all indebtedness, obligations or other liabilities (whether secured,
unsecured, recourse, non-recourse, direct, senior or subordinate) of such Person
for borrowed money, (b) all indebtedness obligations or other liabilities of
such Person evidenced by Securities or other similar instruments, (c) all
reimbursement obligations and other liabilities of such Person with respect to
letters of credit or banker's acceptances issued for such Person's account or
other similar instruments for which a contingent liability exists, (d) all
obligations of such Person to pay the deferred purchase price of Property or
services, (e) all obligations in respect of Capital Leases of such Person, (f)
all Accommodation Obligations of such Person, (g) all indebtedness, obligations
or other liabilities of such Person or others secured by a Lien on any asset of
such Person, whether or not such indebtedness, obligations or liabilities are
assumed by, or are a personal liability of, such Person, (h) all indebtedness,
obligations or other liabilities (other than interest expense liability) in
respect of Interest Rate Contracts and foreign currency exchange agreements
excluding all indebtedness, obligations or other liabilities in respect of such
Interest Rate Contracts to the extent that the aggregate notional amount
thereof does not exceed the aggregate principal amount of any outstanding fixed
or floating rate Indebtedness, obligations or other liabilities permitted under
this Agreement that exist as of the date that such Interest Rate
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Contracts are entered into or that are incurred no more than thirty (30) days
after such Interest Rate Contracts are entered into and (i) ERISA obligations
currently due and payable.
"Interest Expense" means, for any period and without duplication, total
interest expense, whether paid, accrued or capitalized (including the interest
component of Capital Leases but excluding interest expense covered by an
interest reserve established under a loan facility) of the REIT, on a
consolidated basis and determined in accordance with GAAP, plus the REIT's and
Borrower's actual or potential liability, on a consolidated basis, for accrued,
paid or capitalized interest with respect to Indebtedness of Investment
Affiliates that is recourse to the REIT, Borrower or any Material Subsidiary.
"Interest Period" means, relative to any LIBOR Loans, the period
beginning on (and including) the date on which such LIBOR Loans are made as, or
converted into, LIBOR Loans, and shall end on (but exclude) the day which
numerically corresponds to such date one (I), two (2), three (3), six (6) or
twelve (12) months thereafter (or, if such month has no numerically
corresponding day, on the last Business Day of such month), in either case as
Borrower may select in its relevant Notice of Continuation/Conversion pursuant
to Section 2.01 (b); provided, however, that:
(a) if such Interest Period would otherwise end on a day which is not a
Business Day, such Interest Period shall end on the next following Business Day
(unless such next following Business Day is the first Business Day of a calendar
month, in which case such Interest Period shall end on the Business Day next
preceding such numerically corresponding day);
(b) no Interest Period may end later than the Termination Date; and
(c) with the reasonable approval of Agent (unless any Lender has
previously advised Agent and Borrower that it is unable to enter into LIBOR
contracts for an Interest Period of such duration), an Interest Period may have
a duration of less than one (1) month.
"Interest Rate Contracts" means, collectively, interest rate swap,
collar, cap or similar agreements providing interest rate protection.
"Interim Period" has the meaning ascribed to such term in Section
3.01(g).
"Internal Revenue Code" means the Internal Revenue Code of 1986, as
amended from time to time, and any successor statute.
"Investment" means, as applied to any Person, any direct or indirect
purchase or other acquisition by that Person of Securities, or of a beneficial
interest in Securities, of any other Person, and any direct or indirect loan,
advance (other than deposits with financial institutions available for
withdrawal on demand, prepaid expenses, advances to employees and similar items
made or incurred in the ordinary course of business), or capital contribution by
such Person to
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any other Person, including all Indebtedness and accounts owed by that other
Person which are not current assets or did not arise from sales of goods or
services to that Person in the ordinary course of business. The amount of any
Investment shall be determined in conformity with GAAP.
"Investment Affiliate" means any Person in whom the REIT, Borrower or
any Subsidiary holds an equity interest, directly or indirectly, whose financial
results are not consolidated under GAAP with the financial results of the REIT
or Borrower on the consolidated financial statements of the REIT and Borrower.
"Investment Mortgages" means mortgages securing indebtedness directly
or indirectly owed to Borrower or any of its Subsidiaries, including
certificates of interest in real estate mortgage investment conduits.
"IRS" means the Internal Revenue Service and any Person succeeding to
the functions thereof.
"Land" means unimproved real estate purchased or leased or to be
purchased or leased by Borrower or any of its Subsidiaries for the purpose of
future development of improvements.
"Lender Affiliate "as applied to any Lender, means any other Person
directly or indirectly controlling, controlled by, or under common control with,
that Lender. For purposes of this definition, "control" (including with
correlative meanings, the terms "controlling," "controlled by" and "under
common control with"), as applied to any Person, means (a) the possession,
directly or indirectly, of the power to vote more than fifty percent (50%) of
the Securities having voting power for the election of directors of such Person
or otherwise to direct or cause the direction of the management and policies of
that Person, whether through the ownership of voting Securities or by contract
or otherwise, or (b) the ownership of a general partnership interest or a
limited partnership interest representing more than fifty (50%) of the
outstanding limited partnership interests of a Person.
"Lender Reply Period" has the meaning ascribed to such term in Section
10.10(a).
"Lender Taxes" has the meaning ascribed to such term in Section
2.03(g).
"Lenders" means Xxxxx Fargo and any other bank, finance company,
insurance or other financial institution which is or becomes a party to this
Agreement by execution of a counterpart signature page hereto or an Assignment
and Assumption, as assignee.
"Liabilities and Costs" means all claims, judgments, liabilities,
obligations, responsibilities, losses, damages (including punitive and treble
damages), costs, disbursements and expenses (including without limitation
reasonable attorneys', experts' and consulting fees
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and costs of investigation and feasibility studies), fines, penalties and
monetary sanctions, interest, direct or indirect, known or unknown, absolute or
contingent, past, present or future.
"LIBOR" means, relative to any Interest Period for any LIBOR Loan, the
rate of interest obtained by dividing (i) the rate of interest determined by
Agent (whose determination shall be conclusive absent manifest error, which
shall not include any lower determination by any other banks) equal to the rate
(rounded upwards, if necessary, to the nearest one one-hundredth of one percent
(.01%)) per annum reported by Xxxxx Fargo at which Dollar deposits in
immediately available funds are offered by Xxxxx Fargo to leading banks in the
Eurodollar inter bank market at or about 11:00 AM London time two (2) Business
Days prior to the beginning of such Interest Period for delivery on the first
day of such Interest Period for a period approximately equal to such Interest
Period and in an amount equal or comparable to the LIBOR Loan to which such
Interest Period relates, by (ii) a percentage expressed as a decimal equal to
one (1) minus the LIBOR Reserve Percentage.
"LIBOR Loans" means those portions of the Loan bearing interest, at all
times during an Interest Period applicable to such portion, at a fixed rate of
interest determined by reference to LIBOR.
"LIBOR Margin" means one percent (1.00%).
"LIBOR Reserve Percentage" means, relative to any Interest Period, the
average daily maximum reserve requirement (including, without limitation, all
basic, emergency, supplemental, marginal and other reserves) which is imposed
under Regulation D, as Regulation D may be amended, modified or supplemented, on
"Eurocurrency liabilities" having a term equal to the applicable Interest Period
(or in respect of any other category of liabilities which includes deposits by
reference to which the interest rate on LIBOR Loans is determined or any
category of extensions of credit or other assets which includes loans by a
non-United States office of any bank to United States residents), which
requirement shall be expressed as a decimal. LIBOR shall be adjusted
automatically on, and as of the effective date of, any change in the LIBOR
Reserve Percentage.
"Lien" means any mortgage, deed of trust, pledge, hypothecation,
assignment, deposit arrangement, security interest, encumbrance (including, but
not limited to, easements, rights-of-way, zoning restrictions and the like),
lien (statutory or other) preference, priority or other security agreement or
preferential arrangement of any kind or nature whatsoever, including without
limitation any conditional sale or other title retention agreement, the interest
of a lessor under a Capital Lease, any financing lease having substantially the
same economic effect as any of the foregoing, and the filing of any financing
statement (other than a financing statement filed by a "true" lessor pursuant to
9-408 of the Uniform Commercial Code) naming the owner of the asset to which
such Lien relates as debtor, under the Uniform Commercial Code or other
comparable law of any jurisdiction.
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"Loan" means the One Hundred Million Dollar ($100,000,000) loan made
pursuant to this Agreement and the Existing Credit Agreement.
"Loan Documents" means, this Agreement, the Loan Notes, the REIT
Guaranty, and all other agreements, instruments and documents (together with
amendments and supplements thereto and replacements thereof) now or hereafter
executed by the REIT. Borrower or any Agreement Party, which evidence, guaranty
or secure the Obligations.
"Loan Increase" means that portion of the Loan in excess of the
Existing Loan.
"Loan Notes" means the promissory notes evidencing the Loan in the
aggregate original principal amount of One Hundred Million Dollars
($100,000,000) executed by Borrower in favor of Lenders, as they may be amended,
supplemented, replaced or modified from time to time. The initial Loan Notes and
any replacements thereof shall be substantially in the form of Exhibit D. The
Loan Notes shall be issued in substitution for the "Loan Notes" issued pursuant
to the Existing Credit Facility.
"Manufactured Home Community Mortgages" means Investment Mortgages
issued by any Person engaged primarily in the business of developing, owning,
and managing manufactured home communities.
"Manufactured Home Community Partnership Interests" means partnership
or joint venture interests issued by any Person engaged primarily in the
business of developing, owning, and managing manufactured home communities.
"Material Adverse Effect" means a material adverse effect upon (i) the
ability of Borrower or the REIT to perform its covenants and obligations under
this Agreement and the other Loan Documents or (ii) the ability of Agent or
Lenders to enforce the Loan Documents. The phrase "has a Material Adverse
Effect" or "will result in a Material Adverse Effect" or words substantially
similar thereto shall in all cases be intended to mean "has or will result in a
Material Adverse Effect," and the phrase "has no (or does not have a) Material
Adverse Effect" or "will not result in a Material Adverse Effect" or words
substantially similar thereto shall in all cases be intended to mean "does not
or will not result in a Material Adverse Effect."
"Material Subsidiary" means any Subsidiary having a Gross Asset Value
in excess of One Hundred Million Dollars ($ 100,000,000).
"Maturity Date" means April 3, 2000.
"Moody's" means Xxxxx'x Investors Service, Inc., a Delaware
corporation, and its successors and assigns, and, if such corporation shall be
dissolved or liquidated or shall no longer perform the functions of a securities
rating agency, "Moody's" shall be deemed to refer to any other nationally
recognized securities rating agency designated by the Agent.
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"Multiemployer Plan" means an employee benefit plan defined in Section
4001 (a)(3) or Section 3(37) of ERISA which is, or within the immediately
preceding six (6) years was, maintained, administered, contributed to by or was
required to be contributed to by a Person or any ERISA Affiliate, or under which
a Person or any ERISA Affiliate may incur any liability.
"Net Income" means, for any period, the net income (or loss) after
Taxes of the REIT, on a consolidated basis, for such period calculated in
conformity with GAAP.
"Net Offering Proceeds" means all cash or other assets received by the
REIT or Borrower as a result of the sale of common stock, preferred stock,
partnership interests, limited liability company interests, Convertible
Securities or other ownership or equity interests in the REIT or Borrower less
customary costs and discounts of issuance paid by the REIT or Borrower, as the
case may be.
"Net Operating Income" means, for any period, and with respect to any
Qualifying Unencumbered Property, the net operating income of such Qualifying
Unencumbered Property (attributed to such Property in a manner reasonably
acceptable to Agent) for such period (i) determined in accordance with GAAP,
(ii) determined in a manner which is consistent with the past practices of the
REIT and Borrower, and (iii) inclusive of an allocation of reasonable management
fees and administrative costs to such Qualifying Unencumbered Property
consistent with the past practices of the REIT and Borrower, except that, for
purposes of determining Net Operating Income, income shall not (a) include
security or other deposits, lease termination or other similar charges,
delinquent rent recoveries, unless previously reflected in reserves, or any
other items reasonably deemed by Agent to be of a non-recurring nature or (b) be
reduced by depreciation or amortization or any other non-cash item.
"Net Price" means, with respect to the purchase of any Property by
Borrower or any Subsidiary, without duplication, (i) cash and Cash Equivalents
paid as consideration for such purchase, plus (ii) the principal amount of any
note or other deferred payment obligation delivered in connection with such
purchase (except as described in clause (iv) below), plus (iii) the value of any
other consideration delivered in connection with such purchase or sale
(including, without limitation, shares in the REIT and operating partnership
units or preferred operating partnership units in Borrower) (as reasonably
determined by Agent), minus (iv) the value of any consideration deposited into
escrow or subject to disbursement or claim upon the occurrence of any event,
minus (v) reasonable costs of sale and taxes paid or payable in connection with
such purchase.
"Net Worth" means, at any time, the tangible net worth of the REIT
determined in accordance with GAAP, on a consolidated basis, not including
depreciation and amortization expense of the REIT since September 30, 1996 and
not including the REIT's share of depreciation and amortization expense of
Investment Affiliates since September 30, 1996. The
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parties hereto acknowledge that the Net Worth as of December 31, 1997 was Three
Hundred Sixty Nine Million Nine Hundred Sixty One Thousand Dollars
($369,961,000).
"Non-Recourse Indebtedness" means any single loan with respect to which
recourse for payment is limited to (i) specific assets related to a particular
Property or group of Properties encumbered by a Lien securing such Indebtedness,
so long as the Adjusted Asset Value for such Property, or the total of the
Adjusted Asset Values for such group of Properties, does not exceed One Hundred
Million Dollars ($100,000,000) or (ii) any Subsidiary which is not a Material
Subsidiary; provided, however, that personal recourse to the REIT, on a
consolidated basis, or to Borrower by a holder of any such loan for fraud,
misrepresentation, misapplication of cash, waste, environmental claims and
liabilities and other circumstances customarily excluded by institutional
lenders from exculpation provisions and/or included in separate indemnification
on agreements in non-recourse financing of real estate shall not, by itself,
prevent such loan from being characterized as Non-Recourse Indebtedness.
"Non-Manufactured Home Community Property" means Property which is not
(i) used for lease, operation or use of manufactured home communities, (ii)
Land, (iii) Securities consisting of stock issued by real estate investment
trusts engaged primarily in the development, ownership and management of
manufactured home communities, (iv) Manufactured Home Community Mortgages or (v)
Manufactured Home Community Partnership Interests.
"Notice of Borrowing" means a notice of borrowing duly executed by an
authorized officer of Borrower substantially in the form of Exhibit E-1.
"Notice of Continuation/Conversion" means a notice of continuation or
conversion of or to a LIBOR Loan duly executed by an authorized officer of
Borrower substantially in the form of Exhibit E-2.
"Obligations" means, from time to time, all Indebtedness of Borrower
owing to Agent, any Lender, or any Person entitled to indemnification pursuant
to Section 11.02, or any of their respective successors, transferees or assigns,
of every type and description, whether or not evidenced by any note, guaranty or
other instrument, arising under or in connection with this Agreement or any
other Loan Document, whether or not for the payment of money, whether direct or
indirect (including those acquired by assignment), absolute or contingent, due
or to become due, now existing or hereafter arising and however acquired. The
term includes, without limitation, all interest, charges, expenses, fees,
reasonable attorneys' fees and disbursements and any other sum now or hereafter
chargeable to Borrower under or in connection with this Agreement or any other
Loan Document. Notwithstanding anything to the contrary contained in this
definition, Obligations shall not be deemed to include any obligations or
liabilities of Borrower to Agent or any Lender under an Interest Rate Contract,
foreign currency exchange agreement or other Contractual Obligation unless the
same is among Borrower and all Lenders. Obligations shall also not include the
"Obligations" under the Revolving Credit Agreement.
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"Officer's Certificate" means a certificate signed by a specified
officer of a Person certifying as to the matters set forth therein.
"Other Indebtedness" means all Indebtedness other than the Obligations.
"Original Closing Date" means the "Closing Date" as defined in the
Existing Credit Agreement.
"PBGC" means the Pension Benefit Guaranty Corporation or any Person
succeeding to the functions thereof.
"Permit" means any permit, approval, authorization, license, variance
or permission required from a Governmental Authority under an applicable
Requirement of Law.
"Permitted Holdings" means any of the holdings and activities described
in Section 8.08, but only to the extent permitted in Section 8.08.
"Permitted Liens" means:
(a) Liens for Taxes, assessments or other governmental charges not yet
due and payable or which are being contested in good faith by appropriate
proceedings promptly instituted and diligently conducted in accordance with
Sections 6.01(d) or 6.02(g);
(b) statutory liens of carriers, warehousemen, mechanics, materialmen
and other similar liens imposed by law, which are incurred in the ordinary
course of business for sums not more than sixty (60) days delinquent or which
are being contested in good faith in accordance with Sections 6.01(d) or
6.02(g);
(c) deposits made in the ordinary course of business to secure
liabilities to insurance carriers;
(d) Liens for purchase money obligations for equipment; provided that
(i) the Indebtedness secured by any such Lien does not exceed the purchase price
of such equipment, (ii) any such Lien encumbers only the asset so purchased and
the proceeds upon sale, disposition, loss or destruction thereof, and (iii) such
Lien, after giving effect to the Indebtedness secured thereby, does not give
rise to an Event of Default or Unmatured Event of Default pursuant to Section
7.01(a)(iii);
(e) easements, rights-of-way, zoning restrictions, other similar
charges or encumbrances and all other items listed on Schedule B to Borrower's
owner's title insurance policies for any of Borrower's real Properties, so long
as the foregoing do not interfere in any material respect with the use or
ordinary conduct of the business of Borrower and do not diminish in any
material respect the value of the Property to which it is attached or for which
it is listed; or
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(f) Liens and judgments which have been or will be bonded or released
of record within thirty (30) days after the date such Lien or judgment is
entered or filed against the REIT, Borrower, any Subsidiary or any Agreement
Party.
"Person" means any natural person, employee, corporation, limited
partnership, limited liability partnership, general partnership, joint stock
company, limited liability company, joint venture, association, company, trust,
bank-, trust company, land trust, business trust. real estate investment trust
or other organization, whether or not a legal entity, or any other
nongovernmental entity, or any Governmental Authority.
"Plan" means an employee benefit plan defined in Section 3(3) of ERISA
(other than a Multiemployer Plan) in respect of which a Person or an ERISA
Affiliate, as applicable, is an "employer" as defined in Section 3(5) of ERISA.
"Pre-Closing Financials" has the meaning ascribed to such term in
Section 4.01(g).
"Pro Rata Share" means, with respect to any Lender, a fraction
(expressed as a percentage), the numerator of which shall be the amount of such
Lender's Commitment and the denominator of which shall be the aggregate amount
of all of the Lenders' Commitments, as adjusted from time to time in accordance
with the provisions of this Agreement.
"Property" means, with respect to any Person, any real or personal
property, building, facility, structure, equipment or unit, or other asset owned
by such Person.
"Qualifying Unencumbered Property" means (a) the Properties listed on
Exhibit F hereto and (b) any Property designated by Borrower from time to time
pursuant to Section 5.04 which (i) is an operating manufactured home community
property wholly-owned (directly or beneficially) by Borrower or any Subsidiary
wholly-owned, directly or indirectly by Borrower and/or the REIT, (ii) is not
subject (nor are any equity interests in such Property subject) to a Lien which
secures Indebtedness of any Person other than a Permitted Lien, (iii) is not
subject (nor are any equity interests in such Property subject) to any covenant,
condition, or other restriction which prohibits or limits the creation or
assumption of any Lien upon such Property (except as set forth in the Revolving
Credit Agreement), and (iv) has not been designated by the Agent in a notice to
Borrower as not acceptable to the Requisite Lenders pursuant to Section 5.04;
provided, however, that the weighted average occupancy rate of the Properties
listed on Exhibit F together with those designated by Borrower to be Qualifying
Unencumbered Properties pursuant to Section 5.04 (excluding expansion areas of
such Properties which are purchased and/or developed on or after the Closing
Date) shall be at least eighty-five percent (85%); provided, further that
Borrower may, upon at least fifteen (15) Business Days prior notice to Agent,
designate that any Property listed on Exhibit F or otherwise designated as a
Qualifying Unencumbered Property is no longer a Qualifying Unencumbered Property
(and upon such designation such Property shall no longer be a Qualifying
Unencumbered Property).
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"Regulation D" means Regulation D of the Federal Reserve Board as in
effect from time to time.
"Regulation G" means Regulation G of the Federal Reserve Board as in
effect from time to time.
"Regulation T" means Regulation T of the Federal Reserve Board as in
effect from time to time.
"Regulation U" means Regulation U of the Federal Reserve Board as in
effect from time to time.
"Regulation X" means Regulation X of the Federal Reserve Board as in
effect from time to time.
"REIT" has the meaning ascribed to such term in the preamble hereto.
"REIT Guaranty" means the Amended and Restated REIT Guaranty of even
date herewith executed by the REIT in favor of Agent and the Lenders.
"Release" may be either a noun or a verb and means the release, spill,
emission, leaking, pumping, pouring, emitting, emptying, escaping, dumping,
injection, deposit, disposal, discharge, dispersal, leaching or migration into
the indoor or outdoor environment or into or out of any property, including the
movement of Contaminants through or in the air, soil, surface water, groundwater
or property.
"Remedial Action" means any action undertaken pursuant to Environmental
Laws to (a) clean up, remove, remedy, respond to, treat or in any other way
address Contaminants in the indoor or outdoor environment; (b) prevent the
Release or threat of Release or minimize the further Release of Contaminants so
they do not migrate or endanger or threaten to endanger public health or welfare
or the indoor or outdoor environment; or (c) perform pre-remedial studies and
investigations and post-remedial monitoring and care.
"Reportable Event" means any of the events described in Section 4043(b)
of ERISA, other than an event for which the thirty (30) day notice requirement
is waived by regulations, or any of the events described in Section 4062(f) or
4063(a) of ERISA.
"Requirements of Law" means, as to any Person, the charter and by-laws,
partnership agreements or other organizational or governing documents of such
Person, and any law, rule or regulation, permit, 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, including without limitation, the Securities
Act, the Securities Exchange Act, Regulations G, T, U and X and any certificate
of occupancy,
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zoning ordinance, building or land use requirement or Permit or occupational
safety or health law, rule or regulation.
"Requisite Lenders" means, collectively, Lenders whose Pro Rata Shares,
in the aggregate, are at least sixty-six and two-thirds percent (66 2/3%).
"Revolving Credit Agreement" means that certain Second Amended and
Restated Credit Agreement of even date herewith by and among Borrower, the REIT,
Xxxxx Fargo, as Agent, and the lenders named therein.
"S&P" means Standard & Poor's Rating Group, a division of McGraw Hill,
its successors and assigns, and, if Standard & Poor's Rating Group shall be
dissolved or liquidated or shall no longer perform the functions of a securities
rating agency, "S&P" shall be deemed to refer to any other nationally recognized
securities rating agency designated by the Agent.
"Secretary's Certificate" has the meaning ascribed to such term in
Section 3.01(c)(i).
"Secured Debt" means Indebtedness, the payment of which is secured by a
Lien on any real Property owned or leased by the REIT, Borrower, or any
Subsidiary.
"Securities" means any stock, partnership interests, shares, shares of
beneficial interest, voting trust certificates, bonds, debentures, notes or
other evidences of indebtedness, secured or unsecured, convertible, subordinated
or otherwise, or in general any instruments commonly known as "securities" or
any certificates of interest, shares, or participations in temporary or interim
certificates for the purchase or acquisition of, or any right to subscribe to,
purchase or acquire any of the foregoing, but shall not include any evidence of
the Obligations.
"Securities Act" means the Securities Act of 1933, as amended to the
date hereof and from time to time hereafter, and any successor statute.
"Securities Exchange Act" means the Securities Exchange Act of 1934, as
amended to the date hereof and from time to time hereafter, and any successor
statute.
"Solvent" means as to any Person at the time of determination, such
Person (a) owns property the value of which (both at fair valuation and at
present fair saleable value) is greater than the amount required to pay all of
such Person's liabilities (including contingent liabilities and debts); (b) is
able to pay all of its debts as such debts mature; and (c) has capital
sufficient to carry on its business and transactions and all business and
transactions in which it is about to engage.
"Subsidiary" means any Person whose financial results are consolidated
under GAAP with the financial results of the REIT or Borrower on the
consolidated financial statements of the REIT or Borrower.
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"Supermajority Lenders" means Lenders whose Pro Rata Shares, in the
aggregate, are at least eighty-five percent (85%).
"Syndication Agent" means Bank of America National Trust and Savings
Association in its capacity as syndication agent for the Lenders under this
Agreement.
"Taxes" means all federal, state, local and foreign income and gross
receipts taxes.
"Termination Date" has the meaning ascribed to such term in Section
2.01(d).
"Termination Event" means (a) any Reportable Event, (b) the withdrawal
of a Person, or an ERISA Affiliate from a Benefit Plan during a plan year in
which it was a "substantial employer" as defined in Section 4001(a)(2) of
ERISA, (c) the occurrence of an obligation arising under Section 4041 of ERISA
of a Person or an ERISA Affiliate to provide affected parties with a written
notice of an intent to terminate a Benefit Plan in a distress termination
described in Section 4041(c) of ERISA, (d) the institution by the PBGC of
proceedings to terminate any Benefit Plan under Section 4042 of ERISA or to
appoint a trustee to administer any Benefit Plan, (e) any event or condition
which constitutes grounds under Section 4042 of ERISA for the appointment of a
trustee to administer a Benefit Plan, (f) the partial or complete withdrawal of
such Person or any ERISA Affiliate from a Multiemployer Plan which would have a
Material Adverse Effect, or (g) the adoption of an amendment by any Person or
any ERISA Affiliate to terminate any Benefit Plan which is subject to Title IV
of ERISA or Section 412 of the Internal Revenue Code or the treatment of an
amendment to a Benefit Plan as a termination under ERISA.
"Total Liabilities" means, without duplication, all Indebtedness of the
REIT, on a consolidated basis, plus all other items which, in accordance with
GAAP, would be included as liabilities on the liability side of the balance
sheet of the REIT (including, without limitation, accounts payable incurred in
the ordinary course of business), on a consolidated basis, plus the actual or
potential liability of the REIT, Borrower or any Material Subsidiary for any
Indebtedness of Investment Affiliates that is recourse to the REIT, Borrower or
any Material Subsidiary; provided, however, that "Total Liabilities" shall not
include dividends declared by the REIT or Borrower which are permitted under
Section 7.01(d) but not yet paid.
"Unencumbered Asset Value" means, as of any date of determination, (i)
a fraction, the numerator of which is the product of four (4) and the
Unencumbered Net Operating Income for the most recently ended Fiscal Quarter
which is attributable (in a manner reasonably acceptable to Agent) to Qualifying
Unencumbered Properties owned (directly or beneficially) by Borrower or any
Subsidiary wholly-owned, directly or indirectly, by Borrower and/or the REIT,
for the entire Fiscal Quarter and the denominator of which is eight hundred
seventy-five ten-thousandths (0.0875) plus (ii) the aggregate of the Net Prices
paid by Borrower or such Subsidiary or their respective Affiliates for all
Qualifying Unencumbered Properties which have been acquired in the Fiscal
Quarter most recently ended.
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"Unencumbered Net Operating income" means for any Fiscal Quarter, Net
Operating Income for such period from each Qualifying Unencumbered Property
owned (directly or beneficially) by Borrower.
"Unfunded Pension Liabilities" means the excess of a Benefit Plan's
accrued benefits, as defined in Section 3(23) of ERISA, over the current value
of that Plan's assets, as defined in Section 3(26) of ERISA.
"Uniform Commercial Code" means the Uniform Commercial Code as in
effect on the date hereof in the State of Illinois.
"Unmatured Event of Default" means an event which, with the giving of
notice or the lapse of time, or both, would constitute an Event of Default.
"Unsecured Debt" means, as of any date of determination, the sum of
(i) Indebtedness of the REIT, Borrower or any Subsidiary, which is not Secured
Debt or accounts payable plus (ii) that portion of accounts payable of the REIT,
Borrower or any Subsidiary incurred in the ordinary course of business, the
payment of which is not secured by a Lien on any property owned or leased by the
REIT, Borrower or any Subsidiary, which at the date of determination exceeds two
percent (2%) of the sum of Gross Asset Values of Borrower and each of its
Subsidiaries.
"Unsecured Interest Expense" means Interest Expense other than
Interest Expense payable in respect of Secured Debt.
"Welfare Plan" means any "employee welfare benefit plan" as defined in
Section 3(1) of ERISA, which a Person or any ERISA Affiliate maintains,
administers, contributes to or is required to contribute to, or within the
immediately preceding five years maintained, administered, contributed to or
was required to contribute to, or under which a Person or any ERISA Affiliate
may incur any liability.
"Xxxxx Fargo" has the meaning ascribed to such term in the preamble
hereto.
1.02 Computation of Time Periods. In this Agreement, unless otherwise
specified, in the computation of periods of time from a specified date to a
later specified date, the word "from" means "from and including" and the words
"to" and "until" each mean "to and including." Periods of days referred to in
this Agreement shall be counted in calendar days unless Business Days are
expressly prescribed.
1.03 Terms
(a) Any accounting terms used in this Agreement which are not
specifically defined shall have the meanings customarily given them in
accordance with GAAP, provided that for purposes of references to the financial
results of the "REIT, on a consolidated basis," the
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REIT shall be deemed to own one hundred percent (100%) of the partnership
interests in Borrower.
(b) Any time the phrase "to the best of Borrower's knowledge" or a
phrase similar thereto is used herein, it means: "to the actual knowledge of the
executive officers of Borrower and the REIT, after reasonable inquiry of those
agents, employees or contractors of the REIT, Borrower, any Agreement Party or
any Subsidiary who could reasonably be anticipated to have knowledge with
respect to the subject matter or circumstances in question and review of those
documents or instruments which could reasonably be anticipated to be relevant to
the subject matter or circumstances in question."
(c) In each case where the consent or approval of Agent, Requisite
Lenders, Supermajority Lenders or all Lenders is required or their
non-obligatory action is requested by Borrower, such consent, approval or action
shall be in the sole and absolute discretion of Agent and, as applicable, each
Lender, unless otherwise specifically indicated.
1.04 Interrelationship with the Existing Credit Agreement. Effective
on the Closing Date, this Agreement shall amend and restate the provisions of
the Existing Credit Agreement in their entirety, and the Existing Loan and the
Loan Increase shall together constitute the Loan and be governed exclusively by
the terms of this Agreement. Borrower hereby acknowledges that no Existing
Lender is currently in default of its obligations under the Existing Credit
Agreement. Each Existing Lender hereby waives any Event of Default or Unmatured
Event of Default arising from the failure of Borrower to comply with the
provisions of Section 8.01 of the Existing Credit Agreement prior to the Closing
Date.
ARTICLE II
LOAN
2.01 Making of Loan and Repayment.
(a) Loan Availability.
(i) Subject to the terms and conditions set forth in this
Agreement and in reliance on the representation and warranties of Borrower
and the REIT set forth in this Agreement, each Lender hereby agrees to make
its share of the Loan Increase to Borrower on the Closing Date in an amount
equal to such Lender's Commitment. The Loan will be evidenced by the Loan
Notes.
(ii) The Loan may be voluntarily prepaid pursuant to Section
2.05(a), but Borrower may not reborrow any amounts so prepaid. The
principal balance of the Loan shall be payable in full on the Termination
Date.
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(b) Notice of Borrowing: Continuation/Conversion. Borrower shall give
Agent, at Xxxxx Fargo Disbursement Center, 0000 Xxxx Xxxx Xxxxx, Xxxxx 000, Xx
Xxxxxxx, Xxxxxxxxxx, 00000, with a copy to Xxxxx Fargo Bank, N.A., 000 Xxxx
Xxxxxx Xxxxx, Xxxxx 0000, Xxxxxxx, Xxxxxxxx, 00000, Attn: Account Officer, or
such other address as Agent shall designate, an original or facsimile Notice of
Borrowing no later than 10:00 A.M. (California time), not less than three (3)
nor more than five (5) Business Days prior to the Closing Date. The Notice of
Borrowing shall specify whether the Loan Increase will be a Base Rate Loan or a
LIBOR Loan and, if a LIBOR Loan, the applicable Interest Period. Any Notice of
Borrowing pursuant to this Section 2.01(b) shall be irrevocable. Borrower may
elect (A) so long as no Event of Default has occurred and is continuing, to
convert Base Rate Loans or any portion thereof into LIBOR Loans, (B) to convert
LIBOR Loans or any portion thereof into Base Rate Loans, or (C) so long as no
Event of Default has occurred and is continuing, to continue any LIBOR Loans or
any portion thereof for an additional Interest Period; provided, however, that
the amount of the Loan being continued as or converted to LIBOR Loans shall, in
the aggregate, equal One Million Dollars ($1,000,000) or an integral multiple of
One Hundred Thousand Dollars ($100,000) in excess thereof. The applicable
Interest Period for the continuation of any LIBOR Loan shall commence on the day
on which the next preceding Interest Period expires. Each such election shall be
made by giving Agent, at 0000 X. Xxxx Xxxxx, Xxxxx 000, Xx Xxxxxxx, Xxxxxxxxxx,
00000, Attn: Xxxxxxxx Xxxxxxxx, a Notice of Continuation/Conversion by 10:00
A.M. (California time) on the date of a conversion to a Base Rate Loan, or by
10:00 A.M. (California time) not less than three (3) nor more than five (5)
Business Days prior to the date of a conversion to or continuation of a LIBOR
Loan, specifying, in each case (1) whether a conversion or continuation is to
occur, (2) the amount of the conversion or continuation, (3) the Interest Period
therefor, in the case of a conversion to or continuation of a LIBOR Loan, and
(4) the date of the conversion or continuation (which date shall be a Business
Day). Agent shall promptly notify each Lender, but in any event within one (1)
Business Day after receipt of such notice, of its receipt of each such notice
and the contents thereof. Notwithstanding anything to the contrary contained
herein and subject to the default interest provisions contained in Section 2.03,
if an Event of Default occurs, all LIBOR Loans will convert to Base Rate Loans
upon the expiration of the applicable Interest Periods therefor or the date the
Loan becomes due, whichever occurs first. Except as provided above, the
conversion of a LIBOR Loan to a Base Rate Loan shall only occur on the last
Business Day of the Interest Period relating to such LIBOR Loan. In the absence
of an effective election by Borrower of a LIBOR Loan and Interest Period in
accordance with the above procedures prior to the third (3rd) Business Day prior
to the expiration of the then current Interest Period with respect to any LIBOR
Loan, interest on such LIBOR Loan shall accrue at the interest rate then
applicable to a LIBOR Loan for an Interest Period of thirty (30) days, effective
immediately upon the expiration of the then-current Interest Period, without
prejudice, however, to the right of Borrower to elect a Base Rate Loan or a
different Interest Period in accordance with the terms and provisions of this
Agreement; provided, however, that if such continuation shall cause the number
of LIBOR Loan tranches to exceed three (3), such LIBOR Loan shall be converted
to a Base Rate Loan.
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(c) Making of Loan Increase. Subject to Section 10.03. Agent shall
make the proceeds of the Loan Increase available to Borrower in El Segundo,
California on the Closing Date and shall disburse such funds in Dollars and in
immediately available funds not later than 1:00 P.M. Chicago time to Borrower's
account, at Bank of America, Account Number 75-01943 in Chicago, Illinois, or
such other account specified in the Notice of Borrowing acceptable to Agent,
with a confirming telephone call to Xxxxx Xxxxxxx at (000) 000-0000 or Xxxx
Xxxxxxxx at (000) 000-0000.
(d) Term; Principal Payment. The outstanding balance of the Loan shall
be payable in full on the earlier to occur of (A) the Maturity Date, and (B) the
acceleration of the Loan pursuant to Section 9.02(a) (the "Termination Date");
provided, however, that Borrower shall have one (1) option to extend the
Maturity Date to the Extended Maturity Date, to be exercised by providing Agent
with written notice of Borrower's desire to so extend the Maturity Date (the
"Extension Notice") no earlier than one hundred eighty (180) days prior to the
Maturity Date and no later than thirty (30) days prior to the Maturity Date;
provided, further, that Borrower shall have the right to such extension only if
all of the following conditions are satisfied:
(i) no Event of Default or Unmatured Event of Default shall have
occurred and be continuing as of the Maturity Date;
(ii) all representations and warranties contained in this Agreement
and the other Loan Documents shall be true and correct in all material
respects as of the Maturity Date except to the extent they relate to a
specific date;
(iii) Agent shall have received Officer's Certificates of the REIT
dated as of the Maturity Date stating that the executive officer who is the
signatory thereto, which officer shall be the chief executive officer or
the chief financial officer of the REIT, has reviewed, or caused under his
supervision to be reviewed, the terms of this Agreement and the other Loan
Documents, and has made, or caused to be made under his supervision, a
review in reasonable detail of the transactions and condition of Borrower,
the REIT, the Subsidiaries, and the Agreement Parties, and that (A) such
review has not disclosed the existence as of the date of such Officer's
Certificate, and that the signers do not have knowledge of the existence as
of the date of such Officer's Certificate, of any condition or event which
constitutes an Event of Default or Unmatured Event of Default and (B) all
representations and warranties contained in this Agreement and the other
Loan Documents are true and correct in all material respects as of the
date of such Officer's Certificate except to the extent they relate to a
specific date; and
(iv) on or before the Maturity Date, Agent shall have received, on
behalf of Agent and Lenders, an extension fee in the amount of fifteen
one-hundredths of one percent (0.15%) of the outstanding principal amount
of the Loan as of the Maturity Date.
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In the event Agent has not received an Extension Notice on or before
the date which is sixty (60) days prior to the Maturity Date, Agent shall so
notify Borrower in writing.
2.02 Borrowing and Interest Rate Election Authorization. Borrower
shall provide Agent with documentation satisfactory to Agent indicating the
names of those employees or agents of Borrower authorized by Borrower to sign
Notices of Borrowing and Continuation/Conversion, the Extension Notice and to
receive callback confirmations, and Agent and Lenders shall be entitled to rely
on such documentation until notified in writing by Borrow of any change(s) of
the persons so authorized. Agent shall be entitled to act in good faith on the
instructions of anyone identifying himself as one of the Persons so authorized,
and Borrower shall be bound thereby in the same manner as if such Person were
actually so authorized. Borrower agrees to indemnify, defend and hold Lenders
and Agent harmless from and against any and all Liabilities and Costs which may
arise or be created by the acceptance of instructions for making the Loan.
2.03 Interest on the Loan.
(a) Base Rate Loans. Subject to Section 2.03(d), all Base Rate Loans
shall bear interest on the average daily unpaid principal amount thereof from
the date made until paid in full at a fluctuating rate per annum equal to the
Base Rate.
(b) LIBOR Loans. Subject to Section 2.03(d), all LIBOR Loans shall
bear interest on the unpaid principal amount thereof during the Interest Period
applicable thereto at a rate per annum equal to the sum of LIBOR for such
Interest Period plus the LIBOR Margin. Upon receipt of a Notice of Borrowing or
Continuation/Conversion requesting the making of, continuation of and/or
conversion to LIBOR Loans, Agent shall determine LIBOR applicable to the
Interest Period for such LIBOR Loans, and shall give notice thereof to Borrower
and Lenders; provided, however, that failure to give such notice shall not
affect the validity of such rate. Each determination by Agent of LIBOR shall be
conclusive and binding upon the parties hereto in the absence of demonstrable
error. LIBOR Loans shall be in tranches of One Million Dollars ($1,000,000) or
One Hundred Thousand Dollar ($100,000) increments in excess thereof. No more
than three (3) LIBOR Loan tranches shall be outstanding at any one time.
(c) Interest Payments. Subject to Section 2.03(d), interest accrued on
the Loan shall be payable by Borrower in arrears on the first Business Day of
the first calendar month following the Closing Date, and the first Business Day
of each succeeding calendar month thereafter, and on the Termination Date.
(d) Default Interest. Notwithstanding the rates of interest specified
in Sections 2.03(a) and 2.03(b) and the payment dates specified in Section
2.03(c), effective immediately upon demand by Agent after the occurrence of an
Event of Default and during the continuance of any Event of Default, the
principal balance of the Loan then outstanding and, to the extent permitted by
applicable law, any interest payments on the Loan not paid when due shall bear
interest payable upon demand at a rate which is five percent (5%) per annum in
excess of the rate.
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or rates of interest otherwise payable under this Agreement. All other amounts
due Agent or Lenders (whether directly or for reimbursement) under this
Agreement or any of the other Loan Documents if not paid when due, or if no time
period is expressed, if not paid within fifteen (15) days after written demand
to Borrower, shall bear interest from and after demand at the rate which is five
percent (5%) per annum in excess of the lowest rate or rates of interest
otherwise payable under this Agreement, or, if no portion of the Loan is then
outstanding, at the rate which is five percent (5%) per annum in excess of the
rate of interest applicable to Base Rate Loans.
(e) Late Fee. Borrower acknowledges that late payment to Agent will
cause Agent and Lenders to incur costs not contemplated by this Agreement. Such
costs include without limitation processing and accounting charges. Therefore,
if Borrower fails timely to pay any sum due and payable hereunder through the
Termination Date (other than payments of principal), unless waived by Agent,
pursuant to Section 11.05(e), a late charge of four cents ($.04) for each dollar
of any interest payment due hereon and which is not paid within fifteen (15)
days after such payment is due or of any other amount due hereon (other than
payments of principal) and which is not paid within thirty (30) days after such
payment is due, shall be charged by Agent (for the benefit of Lenders) and paid
by Borrower for the purpose of defraying the expense incident to handling such
delinquent payment; provided, however, that no late charges shall be assessed
with respect to any amount for which Borrower is obligated to pay interest at
the rate specified in Section 2.03(d), provided, further, that in no event shall
Agent or Lenders be required to refund any late fees paid by Borrower,
notwithstanding the preceding proviso. Borrower and Agent agree that this late
charge represents a reasonable sum considering all of the circumstances existing
on the date hereof and represents a fair and reasonable estimate of the costs
that Agent and Lenders will incur by reason of late payment. Borrower and Agent
further agree that proof of actual damages would be costly and inconvenient.
Acceptance of any late charge shall not constitute a waiver of the default with
respect to the overdue installment, and shall not prevent Agent from exercising
any of the other rights available hereunder or any other Loan Document. Such
late charge shall be paid without prejudice to any other rights of Agent.
(f) Computation of Interest. Interest and fees shall be computed on
the basis of the actual number of days elapsed in the period during which
interest or fees accrue and a year of three hundred sixty (360) days. In
computing interest on the Loan, the date of the making of the Loan shall be
included and the date of payment shall be excluded. Notwithstanding subsections
(a), (b), (d) and (e) above, interest in respect of the Loan or any portion
thereof shall not exceed the maximum rate permitted by applicable law.
(g) Changes; Legal Restrictions. In the event that after the Closing
Date (A) the adoption of or any change in any law, treaty, rule, regulation,
guideline or determination of a court or Governmental Authority or any change in
the interpretation or application thereof by a court or Governmental Authority,
or (B) compliance by Agent or any Lender with any request or directive made or
issued after the Closing Date (whether or not having the force of law and
whether or not the failure to comply therewith would be unlawful) from any
central bank or other Governmental Authority or quasi-governmental authority:
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(i) subjects Agent or any Lender to any tax, duty or other charge of
any kind with respect to the Facility, this Agreement or any of the other
Loan Documents or changes the basis of taxation of payments to Agent or
such Lender of principal, fees, interest or any other amount payable
hereunder, except for net income, gross receipts, gross profits or
franchise taxes imposed by any jurisdiction and not specifically based upon
loan transactions (all such non-excepted taxes, duties and other charges
being hereinafter referred to as "Lender Taxes");
(ii) imposes, modifies or holds applicable, in the determination of
Agent or any Lender, any reserve, special deposit, compulsory loan, FDIC
insurance, capital allocation or similar requirement against assets held
by, or deposits or other liabilities in or for the account of, advances or
loans by, or other credit extended by, or any other acquisition of funds
by, Agent or such Lender or any applicable lending office (except to the
extent that the reserve and FDIC insurance requirements are reflected in
the "Base Rate" or "LIBOR"); or
(iii) imposes on Agent or any Lender any other condition materially
more burdensome in nature, extent or consequence than those in existence as
of the Closing Date;
and the result of any of the foregoing is to (X) increase the cost to Agent or
any Lender of making, renewing, maintaining or participating in any portion of
the Loan or to reduce any amount receivable hereunder or thereunder or (Y) to
require Agent or any Lender or any applicable lending office to make any payment
calculated by reference to the amount of the portion of the Loan held or
interest received by it under such portion of the Loan; then, in any such case,
Borrower shall promptly pay to Agent or such Lender, as applicable, upon demand,
such amount or amounts (based upon a reasonable allocation thereof by Agent or
such Lender to the financing transactions contemplated by this Agreement and
affected by this Section 2.03(g)) as may be necessary to compensate Agent or
such Lender for any such additional cost incurred, reduced amounts received or
additional payments made to the extent Agent or such Lender generally imposes
such additional costs, losses and payments on other borrowers of Agent or such
Lenders in similar circumstances. Agent or such Lender shall deliver to Borrower
and in the case of a delivery by a Lender, such Lender shall also deliver to
Agent, a written statement in reasonable detail of the claimed additional costs
incurred, reduced amounts received or additional payments made and the basis
therefor as soon as reasonably practicable after such Lender obtains knowledge
thereof.
(h) Certain Provisions Regarding LIBOR Loans.
(i) LIBOR Lending Unlawful. If any Lender shall determine in good
faith that the introduction of or any change in or in the interpretation of
any law makes it unlawful, or any central bank or other governmental
authority asserts that it is unlawful, for such Lender to convert any Base
Rate Loan into a LIBOR Loan or maintain any Loan
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as a LIBOR Loan, (A) the obligations of the Lenders to convert any
Base Rate Loan into a LIBOR Loan or maintain any LIBOR Loans shall, upon
such determination, forthwith be suspended until such Lender shall notify
Agent that the circumstances causing such suspension no longer exist, and
(B) if required by law or such assertion, all LIBOR Loans shall
automatically convert into Base Rate loans.
(ii) Deposits Unavailable. If Agent shall have determined in good
faith that adequate means do not exist for ascertaining the interest rate
applicable hereunder to LIBOR Loans, then, upon notice from Agent to
Borrower the obligations of all Lenders to convert any Base Rate Loan into
a LIBOR Loan or maintain any Loan as a LIBOR Loan shall forthwith be
suspended until Agent shall notify Borrower that the circumstances causing
such suspension no longer exist. Agent will give such notice when it
determines, in good faith, that such circumstances no longer exist;
provided, however, that Agent shall not have any liability to any Person
with respect to any delay in giving such notice.
(iii) Funding Losses. In the event any Lender shall incur any loss or
expense (including any loss or expense incurred by reason of the
liquidation or reemployment of deposits or other funds acquired by such
Lender to make or maintain any portion of the Loan as a LIBOR Loan) as a
result of:
(A) any continuance, conversion, repayment or prepayment of the
principal amount of any LIBOR Loans for any reason whatsoever on a
date other than the scheduled last day of the Interest Period
applicable thereto;
(B) any Base Rate Loans not being converted into LIBOR Loans or
any LIBOR Loans not being continued as LIBOR Loans in accordance with
the Notice of Continuation/Conversion therefor, other than as a result
of such Lender's breach of its obligation to continue or convert such
Loan in accordance with the terms hereof;
then, within fifteen (15) Business Days after Borrower's receipt of the
written notice of such Lender to Borrower with a copy to Agent, Borrower
shall reimburse such Lender for such loss or expense; provided, however,
that each Lender will use reasonable efforts to minimize such loss or
expense. Such written notice (which shall include calculations in
reasonable detail) shall, in the absence of demonstrable error, be
conclusive and binding on the parties hereto.
(i) Withholding Tax Exemption. Each Lender that is not created or
organized under the laws of the United States of America or a political
subdivision thereof shall deliver to Borrower and the Agent no later than the
Closing Date (or, in the case of a Lender which becomes a Lender pursuant to
Section 10.11, the date upon which such Lender becomes a party hereto) a true
and accurate certificate executed in duplicate by a duly authorized officer of
such Lender in a form satisfactory to Borrower and the Agent, to the effect
that such Lender is
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capable, under the provisions of an applicable treaty concluded by the United
States of America (in which case the certificate shall be accompanied by three
(3) accurate and complete duly executed originals of Form 1001 of the
Internal Revenue Service) or under Section 1442 of the Internal Revenue Code (in
which case the certificate shall be accompanied by three (3) accurate and
complete duly executed originals of Form 4224 of the Internal Revenue Service),
of receiving payments of principal, interest and fees hereunder without
deduction or withholding of United States federal income tax. Further, if at any
time a Lender changes its applicable lending office or selects an additional
applicable lending office, it shall, at the same time or promptly thereafter,
but only to the extent the certificate and forms previously delivered by it
hereunder are no longer applicable or effective, deliver to Borrower and Agent
in replacement for, or in addition to, the certificate and forms previously
delivered by it hereunder, a true and accurate certificate executed in duplicate
by a duly authorized officer of such Lender accompanied by three (3) accurate
and complete duly executed originals of either Form 1001 of the Internal
Revenue Service or Form 4224 of the Internal Revenue Service, whichever is
applicable, indicating that such Lender is entitled to receive payments of
principal, interest and fees for the account of such changed or additional
applicable lending office under this Agreement without deduction or withholding
of United States federal tax. Each Lender further agrees to deliver to Borrower
and the Agent a true and accurate certificate executed in duplicate by a duly
authorized officer of such Lender accompanied by three (3) accurate and complete
duly executed originals of either Form 1001 of the Internal Revenue Service or
Form 4224 of the Internal Revenue Service, whichever is appropriate,
substantially in a form satisfactory to Borrower and the Agent, before or
promptly upon the occurrence of any event requiring a change in the most recent
certificate or Internal Revenue Service form previously delivered by it to
Borrower and the Agent pursuant to this Section 2.03(j). Further, each Lender
which delivers a certificate accompanied by Form 1001 of the Internal Revenue
Service covenants and agrees to deliver to Borrower and the Agent within fifteen
(15) days prior to January 1, 1999, and every third (3rd) anniversary of such
date thereafter, on which this Agreement is still in effect, another such
certificate and three (3) accurate and complete original signed copies of Form
1001 (or any successor form or forms required under the Internal Revenue Code
or the applicable regulations promulgated thereunder), and each Lender that
delivers a certificate accompanied by Form 4224 of the Internal Revenue Service
covenants and agrees to deliver to Borrower and the Agent within fifteen (15)
days prior to the beginning of each subsequent taxable year of such Lender
during which this Agreement is still in effect, another such certificate and
three (3) accurate and complete original signed copies of Internal Revenue
Service Form 4224 (or any successor form or forms required under the Internal
Revenue Code or the applicable regulations promulgated hereunder). If (i) any
Lender is required under this Section 2.03(j) to provide a certificate or other
evidence described above and fails to deliver to Borrower and Agent such
certificate or other evidence or (ii) any Lender delivers a certificate to the
effect that, as a result of the adoption of or any change in any law, treaty,
rule, regulation, guideline or determination of a Governmental Authority after
the date such Lender became a party hereto, such Lender is not capable of
receiving payments of interest hereunder without deduction or withholding of
United States of America federal income tax as specified therein and that it is
not capable of recovering the full amount of the same from a source other than
Borrower, then, to the extent required by
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law, as the sole consequence of such Lender's failure to deliver the certificate
described in (i) above or such Lender's delivery of the certificate described in
(ii) above. Borrower shall be entitled to deduct or withhold taxes from the
payments owed to such Lender.
2.04 Fees.
(a) Loan Fee. On the Closing Date, Borrower shall pay Agent, on behalf
of Agent and Lenders, a loan increase fee in the amount of Sixty Thousand
Dollars ($60,000).
(b) Agency Fees. Borrower shall pay Agent such fees as are provided
for in the agency and arrangement fee agreement between Agent and Borrower, as
in existence from time to time.
(c) Payment of Fees. The fees described in this Section 2.04
represent compensation for services rendered and to be rendered separate and
apart from the lending of money or the provision of credit and do not constitute
compensation for the use, detention or forbearance of money, and the obligation
of Borrower to pay the fees described herein shall be in addition to, and not in
lieu of, the obligation of Borrower to pay interest, other fees and expenses
otherwise described in this Agreement. All fees shall be payable when due in
California in immediately available funds and shall be non-refundable when paid.
If Borrower fails to make any payment of fees or expenses specified or referred
to in this Agreement due to Agent or Lenders, including without limitation those
referred to in this Section 2.04 or otherwise under this Agreement or any
separate fee agreement between Borrower and Agent relating to this Agreement,
when due, the amount due shall bear interest until paid at the Base Rate and,
after five (5) days at the rate specified in Section 2.03(d) (but not to exceed
the maximum rate permitted by applicable law) and shall constitute part of the
Obligations. All fees described in this Section 2.04 which are expressed as a
per annum charge shall be calculated on the basis of the actual number of days
elapsed in a three hundred sixty (360) day year.
2.05 Payments.
(a) Voluntary Prepayments. Borrower may, upon not less than three (3)
Business Days prior written notice, at any time and from time to time, prepay,
without premium or penalty (other than as set forth in Section 2.03(h)(iii)),
the Loan in whole or in part in amounts not less than One Hundred Thousand
Dollars ($100,000) or integral multiples of Twenty-Five Thousand Dollars
($25,000) in excess of One Hundred Thousand Dollars ($100,000). Any notice of
prepayment given to Agent under this Section 2.05(a) shall specify the date of
prepayment and the aggregate principal amount of the prepayment. All prepayments
of principal shall be accompanied by a payment of all accrued and unpaid
interest thereon.
(b) Manner and Time of Payment. All payments of principal, interest
and fees hereunder payable to Agent or the Lenders shall be made without
condition or reservation of right and free of set-off or counterclaim, in
Dollars and by (i) wire transfer (pursuant to Agent's written wire transfer
instructions) of immediately available funds, delivered to Agent not later
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than 11:00 A.M. (California time) on the date due; and funds received by Agent
after that time and date shall be deemed to have been paid on the next
succeeding Business Day or (ii) by check (pursuant to Agent's written check
payment instructions) delivered to Agent, such check and the payment intended to
be covered thereby to be deemed to have been paid on the date Agent receives
immediately available funds therefor. All payments of principal, interest and
fees hereunder shall be made by (i) wire transfer of immediately available funds
to Xxxxx Fargo Bank, N.A. (ABA number 000000000) for credit to account number
2934507203 reference MHC Operating Limited Partnership, loan number 1561ZMC with
telephonic notice to Xxxxxxx Xxxxxx at (000) 000-0000, or (ii) check payable to
Xxxxx Fargo Bank, N.A. and delivered to Agent at 0000 X. Xxxx Xxxxx, Xxxxx 000,
Xx Xxxxxxx, Xxxxxxxxxx, 00000, Attn: Xxxxxxx Xxxxxx, or to such other bank,
account or address as Agent may specify in a written notice to Borrower.
(c) Payments on Non-Business Days. Whenever any payment to be
made by Borrower hereunder shall be stated to be due on a day which is not a
Business Day, payments shall be made on the next succeeding Business Day and
such extension of time shall be included in the computation of the payment of
interest hereunder and of any of the fees specified in Section 2.04, as the case
may be.
2.06 Increased Capital. If either (i) the introduction of or any
change in or in the interpretation of any law or regulation or (ii) compliance
by Agent or any Lender with any guideline or request from any central bank or
other Governmental Authority (whether or not having the force of law and whether
or not the failure to comply therewith would be unlawful) made or issued after
the Closing Date affects/or would affect the amount of capital required or
expected to be maintained by Agent or such Lender or any corporation controlling
Agent or such Lender, and Agent or such Lender determines that the amount of
such capital is increased by or based upon the existence of Agent's obiligations
hereunder or such Lender's obligation to maintain, continue or convert to LIBOR
Loans hereunder, then, upon demand by Agent or such Lender, Borrower shall
immediately pay to Agent or such Lender, from time to time as specified by Agent
or such Lender, additional amounts sufficient to compensate Agent or such Lender
in the light of such circumstances, to the extent that Agent or such Lender
reasonably determines such increase in capital to be allocable to the existence
of Agent's obligations hereunder or such Lender's commitment and to the extent
Agent or such Lender generally imposes such amounts on other borrowers of Agent
or Lender in similar circumstances. A certificate as to such amounts in
reasonable detail submitted to Borrower by Agent or such Lender shall, in the
absence of manifest error, be conclusive and binding for all purposes.
2.07 Notice of Increased Costs. Each Lender agrees that, as
promptly as reasonably practicable after it becomes aware of the occurrence of
an event or the existence of a condition which would cause it to be affected by
any of the events or conditions described in Section 2.03(g) or (h), or Section
2.06, it will notify Borrower and provide in such notice a reasonably detailed
calculation of the amount due from Borrower, and provide a copy of such notice
to Agent, of such event and the possible effects thereof. If Agent or the
affected Lender shall fail to notify Borrower of the occurrence of any such
event or the existence of any such
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condition within ninety (90) days following the end of the month during which
such event occurred or such condition arose then Borrower's liability for any
amounts described in said Sections 2.03(g) and (h) and 2.06 incurred by Agent or
such affected Lender as a result of such event or condition shall be limited to
those attributable to the period occurring subsequent to the ninetieth (90th)
day prior to the date upon which Agent or such affected Lender actually notified
Borrower of such event or condition.
2.08 Option to Replace Lenders.
(a) Lenders. If any Lender shall make any demand for payment or
reimbursement pursuant to Section 2.03(g), Section 2.03(h) or Section 2.06,
then, provided that (a) there does not then exist any Unmatured Event of Default
or Event of Default and (b) the circumstance resulting in such demand for
payment or reimbursement are not applicable to all Lenders, Borrower may
terminate the Commitment of such Lender, in whole but not in part, by (i) giving
such Lender and Agent not less than three (3) Business Days prior written notice
thereof, which notice shall be irrevocable and effective only upon receipt
thereof such Lender and Agent and shall specify the effective date of such
termination, (ii) paying to such Lender (and there shall become due and payable)
on such date the outstanding principal amount of the portion of the Loan made by
such Lender, all interest thereon, and all other Obligations owed to such
Lender, including, without limitation, amounts owing under Sections 2.03(g),
2.03(h)(iii), 2.04 and 2.06, if any, and (iii) pursuant to the provisions of
Section 10.11, proposing the introduction of a replacement Lender reasonably
satisfactory to Agent, or obtaining the agreement of one or more existing
Lenders, to assume the entire amount of the Commitment of the Lender whose
Commitment is being terminated, on the effective date of such termination. Upon
the satisfaction of all of the foregoing conditions, such Lender which is being
terminated pursuant to this Section 2.08 shall cease to be a "Lender" for
purposes of this Agreement provided that Borrower shall continue to be obligated
to such Lender under Sections 11.01 and 11.02 (and any other indemnifications
contained herein or in any other Loan Document) with respect to or on account of
unpaid, unliquidated, unknown or similar claims or liabilities accruing prior to
such Lender ceasing to be a "Lender" for purposes of this Agreement.
(b) Agent. If Agent shall make any demand for payment or
reimbursement pursuant to Section 2.03(g), Section 2.03(h) or Section 2.06,
then, provided that (i) there does not then exist any Unmatured Event of Default
or Event of Default and (ii) the circumstances resulting in such demand for
payment or reimbursement are not applicable to all Lenders. Borrower may remove
Agent by (x) giving the Lenders and Agent not less than thirty (30) Business
Days prior written notice thereof, and (y) paying to Agent (and there shall
become due and payable) on such date all other Obligations owed to Agent,
including, without limitation, amounts owing under Sections 2.03(g), 2.03(h),
2.04 and 2.06, if any. Agent shall be replaced in accordance with the provisions
of Section 10.09 hereof.
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ARTICLE III
CONDITIONS TO LOAN INCREASE
3.01 Conditions to Disbursement of Loan Increase. The obligation of
Lenders to make the Loan Increase shall be subject to satisfaction of each of
the following conditions precedent on or before the Closing Date:
(a) Borrower Loan Documents. Borrower shall have executed and
delivered to Agent each of the following, in form and substance acceptable to
Agent and Agent's counsel:
(i) This Agreement;
(ii) The Loan Notes;
(iii) A solvency certificate;
(iv) Agent's form of Funds Transfer Agreement and signature
authorization form; and
(v) All other documents to be executed by or on behalf of
Borrower as listed on the Closing Checklist.
(b) REIT Documents. The REIT shall have executed and delivered to
Agent each of the following, in form and substance acceptable to Agent and
Agent's counsel:
(i) The REIT Guaranty;
(ii) A solvency certificate;
(iii) A Compliance Certificate confirming the matters described
in Section 3.01(i); and
(iv) All other documents to be executed by or on behalf of the
REIT as listed on the Closing Checklist.
(c) Corporate and Partnership Documents. Agent shall have received
the following corporate and partnership documents:
(i) With respect to Borrower: a certified copy of Borrower's
limited partnership agreement; a certified copy of Borrower's Certificate of
Limited Partnership; a certificate of existence for Borrower from the State
of Illinois; and a certificate of Borrower's Secretary or an officer
comparable thereto (a "Secretary's Certificate") with respect to Borrower
pertaining to authorization, incumbency and by-laws, if any; and
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(ii) With respect to the REIT: certified copies of the REIT's
certificate of incorporation and by-laws; a good standing certificate of the
REIT from the State of Maryland; and a Secretary's Certificate with respect
to the REIT pertaining to authorization, incumbency and by-laws.
(d) Notice of Borrowing. Borrower shall have delivered to Agent a
Notice of Borrowing in compliance with Section 2.01(b).
(e) Performance. Borrower, the REIT and each Agreement Party shall have
performed in all material respects all agreements and covenants required by
Agent to be performed by them as a condition to funding the Loan Increase.
(f) Solvency. Each of the REIT, Borrower and each Agreement Party shall
be Solvent.
(g) Material Adverse Changes. No change, as reasonably determined by
Agent, shall have occurred during the period commencing on December 31, 1997 and
ending on the Closing Date (the "Interim Period"), which has a Material Adverse
Effect.
(h) Litigation Proceedings. There shall not have been instituted or, to
the knowledge of Borrower or the REIT, threatened, during the Interim Period,
any litigation or proceeding in any court or by a Governmental Authority
affecting or threatening to affect Borrower, the REIT, any Subsidiary, or any
Agreement Party, in which there is a reasonable possibility of an adverse
decision that could, individually or in the aggregate, have a Material Adverse
Effect.
(i) No Event of Default; Satisfaction of Financial Covenants. On the
Closing Date and after giving effect to the disbursement of the Loan, no Event
of Default or Unmatured Event of Default shall exist and all of the financial
covenants contained in Articles VII and VIII shall be satisfied.
(j) Opinion of Counsel. Agent shall have received on behalf of Agent
and Lenders a favorable opinion of counsel for Borrower, each Agreement Party
and the REIT dated as of the Closing Date, in form and substance reasonably
satisfactory to Agent and its counsel.
(k) Due Diligence. Agent shall have completed its review of all other
information delivered by Borrower pursuant to this Section 3.01 and shall have
completed such additional due diligence investigations as Agent deems reasonably
necessary, and such review and investigations shall provide Agent with results
and information which, in Agent's determination, are satisfactory to permit
Agent to enter into this Agreement.
(l) Representations and Warranties. All representations and warranties
contained in this Agreement and the other Loan Documents shall be true and
correct in all material respects.
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(m) Fees. Agent shall have received for the benefit of Agent and
Lenders all fees (or Borrower shall have made arrangements reasonably acceptable
to Agent therefor) then due, and Borrower shall have performed all of its other
obligations as set forth in the Loan Documents to make payments to Agent on or
before the Closing Date and all expenses of Agent incurred prior to such Closing
Date (including without limitation all reasonable attorneys' fees), shall have
been paid by Borrower.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
4.01 Representations and Warranties as to Borrower. In order to induce
Lenders to make the Loan Increase, Borrower hereby represents and warrants to
Lenders as follows:
(a) Organization; Partnership Powers. Borrower (i) is a limited
partnership duly organized, validly existing and in good standing under the laws
of the jurisdiction of its formation, (ii) is duly qualified to do business as a
foreign limited partnership and in good standing under the laws of each
jurisdiction in which the nature of its business requires it to be so qualified,
except for those jurisdictions where failure to so qualify and be in good
standing would not have a Material Adverse Effect and (iii) has all requisite
partnership power and authority to own, operate and encumber its property and
assets and to conduct its business as presently conducted and as proposed to be
conducted in connection with and following the consummation of the Loan
contemplated by the Loan Documents.
(b) Authority. Borrower has the requisite partnership power and
authority to execute, deliver and perform each of the Loan Documents to which it
is or will be a party. The execution, delivery and performance thereof, and the
consummation of the transactions contemplated thereby, have been duly approved
by the general partner of Borrower, and no other partnership proceedings or
authorizations on the part of Borrower or its general or limited partners are
necessary to consummate such transactions. Each of the Loan Documents to which
Borrower is a party has been duly executed and delivered by Borrower and
constitutes its legal, valid and binding obligation, enforceable against it in
accordance with its terms, subject to bankruptcy, insolvency and other laws
affecting creditors' rights generally and general equitable principles.
(c) Ownership of Borrower. Schedule 4.01(c) sets forth the general
partners of Borrower and their respective ownership percentages as of the date
hereof. Except as set forth in the partnership agreement of Borrower, no
partnership interests (or any securities, instruments, warrants, option or
purchase rights, conversion or exchange rights, calls, commitments or claims of
any character convertible into or exercisable for partnership interests) of
Borrower are subject to issuance under any security, instrument, warrant,
option or purchase rights, conversion or exchange rights, call, commitment or
claim of any right, title or interest therein or thereto. To Borrower's
knowledge, all of the partnership interests in Borrower have been issued in
compliance with all applicable Requirements of Law.
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(d) No Conflict. The execution, delivery and performance by Borrower of
the Loan Documents to which it is or will be a party, and each of the
transactions contemplated thereby, do not and will not (i) conflict with or
violate Borrower's limited partnership agreement or Certificate of Limited
Partnership or other organizational documents, as the case may be, or the
organizational documents of any Subsidiary of Borrower or (ii) conflict with,
result in a breach of or constitute (with or without notice or lapse of time
or both) a default under any Requirement of Law, Contractual Obligation or Court
Order of or binding upon Borrower or any of its Subsidiaries, or require
termination of any such Contractual Obligation, the consequences of which
conflict or breach or default or termination would have a Material Adverse
Effect, or result in or require the creation or imposition of any Lien
whatsoever upon any Property (except as contemplated herein).
(e) Consents and Authorizations. Borrower has obtained all consents and
authorizations required pursuant to its Contractual Obligations with any other
Person, the failure of which to obtain would have a Material Adverse Effect, and
has obtained all consents and authorizations of, and effected all notices to and
filings with, any Governmental Authority necessary to allow Borrower to lawfully
execute, deliver and perform its obligations under the Loan Documents to which
Borrower is a party.
(f) Governmental Regulation. Borrower is not subject to regulation
under the Public Utility Holding Company Act of 1935, the Federal Power Act, the
Interstate Commerce Act, the Investment Company Act of 1940 or any other federal
or state statute or regulation such that its ability to incur indebtedness is
limited or its ability to consummate the transactions contemplated by the Loan
Documents is materially impaired.
(g) Prior Financials. The Consolidated and Combined Balance Sheet as of
December 31, 1997, the Consolidated and Combined Statement of Operations for the
Year Ended December 31, 1997, and the Consolidated and Combined Statement of
Cash Flows for the Year Ended December 31, 1997, of the REIT contained in the
Form 10-K Annual Report of the REIT as of December 31, 1997 (the "Pre-Closing
Financials") delivered to Agent prior to the date hereof were prepared in
accordance with GAAP in effect on the date such Pre-Closing Financials were
prepared and fairly present the assets, liabilities and financial condition of
the REIT, on a consolidated basis, at such date and the results of its
operations and its cash flows, on a consolidated basis, for the period then
ended.
(h) Financial Statements; Projections and Forecasts. Each of the
Financial Statements to be delivered to Agent pursuant to Sections 5.01(a) and
(b), (i) has been, or will be, as applicable, prepared in accordance with the
books and records of the REIT, on a consolidated basis, and (ii) either fairly
present, or will fairly present, as applicable, the financial condition of the
REIT, on a consolidated basis, at the dates thereof (and, if applicable, subject
to normal year-end adjustments) and the results of its operations and cash
flows, on a consolidated basis, for the period then ended. Each of the
projections delivered to Agent (A) has been or will be, as applicable,
prepared by the REIT and the REIT's financial personnel in light of the past
business
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and performance of the REIT, on a consolidated basis and (B) represent, or will
represent, as of the date thereof, the reasonable good faith estimates of such
personnel.
(i) Litigation; Adverse Effects.
(i) There is no action, suit, proceeding, governmental
investigation or arbitration, at law or in equity, or before or by any
Governmental Authority, pending, or to the best of Borrower's knowledge,
threatened against Borrower or any of its Subsidiaries or any of their
respective Properties, in which there is a reasonable possibility of an
adverse decision that could have a Material Adverse Effect;
(ii) Neither Borrower nor any of its Subsidiaries is (A) in
violation of any Requirement of Law, which violation has a Material Adverse
Effect, or (B) subject to or in default with respect to any Court Order
which has a Material Adverse Effect.
(j) No Material Adverse Change. Since December 1, 1997, there has
occurred no event which has a Material Adverse Effect.
(k) Payment of Taxes. All tax returns and reports to be filed by
Borrower or any of its Subsidiaries have been timely filed, and all taxes,
assessments, fees and other governmental charges shown on such returns have been
paid when due and payable, except such taxes, if any, as are reserved against in
accordance with GAAP, such taxes as are being contested in good faith by
appropriate proceedings or such taxes, the failure to make payment of which when
due and payable will not have, in the aggregate, a Material Adverse Effect.
Borrower has no knowledge of any proposed tax assessment against Borrower or any
of its Subsidiaries that will have a Material Adverse Effect, which is not being
actively contested in good faith by such Person.
(1) Material Adverse Agreements. Neither Borrower nor any of its
Subsidiaries is a party to or subject to any Contractual Obligation or other
restriction contained in its partnership agreement, certificate of partnership,
by-laws, or similar governing documents which has a Material Adverse Effect.
(m) Performance. Neither Borrower nor any of its Subsidiaries is in
default in the performance, observance or fulfillment of any of the obligations,
covenants or conditions contained in any Contractual Obligation applicable to
it, and no condition exists which, with the giving of notice or the lapse of
time or both, would constitute a default under such Contractual Obligation in
each case, except where the consequences, direct or indirect, of such default or
defaults, if any, will not have a Material Adverse Effect.
(n) Federal Reserve Regulations. No part of the proceeds of the Loan
hereunder will be used to purchase or carry any "margin security", as defined in
Regulation G or for the purpose of reducing or retiring any indebtedness which
was originally incurred to purchase or carry any margin security or for any
other purpose which might constitute this transaction a "purpose credit" within
the meaning of said Regulation G. Borrower is not engaged primarily in
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the business of extending credit for the purpose of purchasing or carrying any
"margin stock" as defined in Regulation U. No part of the proceeds of the Loan
hereunder will be used for any purpose that violates, or which is inconsistent
with, the provisions of Regulation X or any other regulation of the Federal
Reserve Board.
(o) Disclosure. Borrower has not intentionally or knowingly withheld
any material fact from Agent in regard to any matter raised in the Loan
Documents. Notwithstanding the foregoing, with respect to any projections of
Borrower's future performance such representations and warranties are made in
good faith and to the best judgment of Borrower at the time such projections
were made.
(p) Requirements of Law. To Borrower's knowledge, Borrower and each of
its Subsidiaries are in compliance with all Requirements of Law (including
without limitation the Securities Act and the Securities Exchange Act, and the
applicable rules and regulations thereunder, state securities law and "Blue Sky"
laws) applicable to them and their respective businesses, in each case, where
the failure to so comply will have a Material Adverse Effect.
(q) Patents, Trademarks, Permits, Etc. Borrower and each of its
Subsidiaries owns, is licensed or otherwise has the lawful right to use, or have
all permits and other governmental approvals, patents, trademarks, trade names,
copyrights, technology, know-how and processes used in or necessary for the
conduct of Borrower's or such Subsidiary's business as currently conducted, the
absence of which would have a Material Adverse Effect. To Borrower's knowledge,
the use of such permits and other governmental approvals, patents, trademarks,
trade names, copyrights, technology, know-how and processes by Borrower or such
Subsidiary does not infringe on the rights of any Person, subject to such claims
and infringements as do not, in the aggregate, have a Material Adverse Effect.
(r) Environmental Matters. To the knowledge of Borrower, except as
would not have a Material Adverse Effect and except as set forth on Schedule
4.01(r), (i) the Property and operations of Borrower and each of its
Subsidiaries comply in all material respects with all applicable Environmental
Laws; (ii) none of the Property or operations of Borrower or any of its
Subsidiaries are subject to any Remedial Action or other Liabilities and Costs
arising from the Release or threatened Release of a Contaminant into the
environment or from the violation of any Environmental Laws, which Remedial
Action or other Liabilities and Costs would have a Material Adverse Effect;
(iii) neither Borrower nor any of its Subsidiaries has filed any notice under
applicable Environmental Laws reporting a Release of a Contaminant into
the environment in violation of any Environmental Laws, except as the same may
have been heretofore remedied; (iv) there is not now, nor to Borrower's
knowledge has there ever been, on or in the Property of Borrower or any of its
Subsidiaries (except in compliance in all material respects with all applicable
Environmental Laws): (A) any underground storage tanks, (B) any asbestos-
containing material, (C) any polychlorinated biphenyls (PCB's) used in hydraulic
oils, electrical transformers or other equipment, (D) any petroleum hydrocarbons
or (E) any chlorinated or halogenated solvents; and (v) neither Borrower nor any
of its Subsidiaries has
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received any notice or claim to the effect that it is or may be liable to any
Person as a result of the Release or threatened Release of a Contaminant into
the environment.
(s) ERISA. None of the REIT, Borrower or any Agreement Party, is an
"employee pension benefit plan" as defined in Section 3(2) of ERISA, an
"employee welfare benefit plan" as defined in Section 3(l) of ERISA, a
"multiemployer plan" as defined in Sections 4001(a)(33) or 3(37) of ERISA or a
"plan" as defined in Section 4975(e)(1) of the Internal Revenue Code. Except for
a prohibited transaction arising solely because of a Lender's breach of the
covenant set forth in Section 11.23, none of the Obligations, any of the Loan
Documents or the exercise of any of the Agent's or Lenders' rights in connection
therewith constitutes a prohibited transaction under ERISA or the Internal
Revenue Code (which is not exempt from the restrictions of Section 406 of ERISA
and the taxes and penalties imposed by Section 4975 of the Internal Revenue Code
and Section 502(i) of ERISA) or otherwise results in a Lender, the Agent or the
Lenders being deemed in violation of Sections 404 or 406 of ERISA or Section
4975 of the Internal Revenue Code or will by itself result in a Lender, the
Agent or the Lenders being a fiduciary or party in interest under ERISA or a
"disqualified person" as defined in Section 4975(e)(2) of the Internal Revenue
Code with respect to an "employee benefit plan" within the meaning of Section
3(3) of ERISA or a "plan" within the meaning of Section 4975(e)(1) of the
Internal Revenue Code. No assets of the REIT, Borrower or any Agreement Party
constitute "assets" (within the meaning of 29 C.F.R. ss. 2510.3-101 or any
successor regulation thereto) of an "employee benefit plan" within the meaning
of Section 3(3) of ERISA or a "plan" within the meaning of Section 4975(e)(1) of
the Internal Revenue Code.
Each Borrower Plan is in compliance with ERISA and the applicable
provisions of the Internal Revenue Code in all respects except where the
failure to comply would not have a Material Adverse Effect. There are no claims
(other than claims for benefits in the normal course), actions or lawsuits
asserted or instituted against, and none of Borrower, the REIT, any of the
Material Subsidiaries or any of their ERISA Affiliates has knowledge of any
threatened litigation or claims against the assets of any Borrower Plan or
against any fiduciary of such Borrower Plan with respect to the operation of
such Borrower Plan which could have a Material Adverse Effect. No liability to
the PBGC has been, or is likely to be, incurred by Borrower, the REIT, any of
the Material Subsidiaries or their ERISA Affiliates other than such liabilities
which, in the aggregate, would not have a Material Adverse Effect. None of
Borrower, the REIT, any of the Material Subsidiaries or any of their ERISA
Affiliates is now contributing to or has ever contributed to or been obligated
to contribute to any Multiemployer Plan, no employees or former employees of
Borrower, the REIT, any of the Material Subsidiaries or any of their ERISA
Affiliates have been covered by any Multiemployer Plan in respect of their
employment by Borrower or such Material Subsidiary or such ERISA Affiliate. None
of Borrower, the REIT, any of the Material Subsidiaries or any of their ERISA
Affiliates has engaged in a "prohibited transaction" as such term is defined in
Section 4975 of the Internal Revenue Code or in a transaction subject to the
prohibitions of Section 406 of ERISA, in connection with any Benefit Plan or
Welfare Plan which would subject Borrower, the REIT, any of the Material
Subsidiaries or any of their ERISA Affiliates (after giving effect to any
exemption) to the tax penalty on
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prohibited transactions imposed by Section 4975 of the Internal Revenue Code,
Section 502 of ERISA or any other liability under ERISA which tax, penalty or
other liability would have a Material Adverse Effect. None of the Benefit Plans
subject to Title IV of ERISA has any material Unfunded Pension Liability as to
which Borrower, the REIT, any of the Material Subsidiaries or any of their ERISA
Affiliates is or may be liable, which liability would have a Material Adverse
Effect.
(t) Solvency. Borrower is and will be Solvent after giving effect to
the disbursements of the Loan and the payment and accrual of all fees then
payable.
(u) Use of Proceeds. Borrower's use of the proceeds of the Loan are,
and will continue to be, legal and proper uses (and to the extent necessary,
duly authorized by Borrower's partners) and such uses are consistent with all
applicable laws and statutes.
(v) Subsidiaries and Investment Affiliates. Each Subsidiary and
Investment Affiliate as of the date hereof is set forth on Schedule 4.01(v).
Schedule 4.01(v) sets forth the ownership of each such Subsidiary and Investment
Affiliate and the material Property owned by such Person as of the date hereof.
(w) Year 2000. Based on a recent assessment, Borrower determined that a
majority of its applications will function properly with respect to dates in the
Year 2000 and thereafter. Borrower has initiated formal communications with all
of its significant suppliers to determine the extent to which Borrower's
interface systems are vulnerable to those third parties' failure to remediate
their own Year 2000 issues. Borrower's total Year 2000 project cost and estimate
to complete do not include the estimated costs and time associated with the
impact of third party Year 2000 issues. There can be no guarantee that the
systems of other companies on which Borrower's systems rely will be timely
converted and would not have an adverse effect on Borrower's systems. Borrower
anticipates completing its Year 2000 project no later than December 31, 1998,
which is prior to any impact on its operating systems. The total cost of the
Year 2000 project is estimated to be immaterial assuming third parties remediate
their own Year 2000 issues. This assumption is based on management's best
estimates, which were derived utilizing numerous assumption of future events,
and there can be no guarantee that these estimates will be achieved and actual
results could differ materially from those anticipated.
4.02 Representations and Warranties as to the REIT. In order to induce
Lenders to make the Loan, REIT hereby represents and warrants to Lenders as
follows:
(a) Organization; Corporate Powers. The REIT (i) is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Maryland, (ii) is duly qualified to do business as a foreign corporation and in
good standing under the laws of each jurisdiction in which the nature of its
business requires it to be so qualified, except for those jurisdictions where
failure to so qualify and be in good standing will not have a Material Adverse
Effect, and (iii) has all requisite corporate power and authority to own,
operate and encumber its property and assets and to conduct its business as
presently conducted and as proposed to be
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conducted in connection with and following the consummation of the transactions
contemplated by the Loan Documents.
(b) Authority. The REIT has the requisite corporate power and authority
to execute, deliver and perform each of the Loan Documents to which it is or
will be a party. The execution, delivery and performance thereof, and the
consummation of the transactions contemplated thereby, have been duly approved
by the Board of Directors of the REIT, and no other corporate proceedings on the
part of the REIT are necessary to consummate such transactions. Each of the Loan
Documents to which the REIT is a party has been duly executed and delivered by
the REIT and constitutes its legal, valid and binding obligation, enforceable
against it in accordance with its terms, subject to bankruptcy, insolvency and
other laws affecting creditors' rights generally and general equitable
principles.
(c) No Conflict. The execution, delivery and performance by the REIT of
the Loan Documents to which it is a party, and each of the transactions
contemplated thereby, do not and will not (i) conflict with or violate its
Articles or Certificate of Incorporation or by-laws, or other organizational
documents, as the case may be, or the organizational documents of Borrower or
any Subsidiary, (ii) conflict with, result in a breach of or constitute (with or
without notice or lapse of time or both) a default under any Requirement of Law,
Contractual Obligation or Court Order of the REIT, Borrower or any Subsidiary,
or require termination of any such Contractual Obligation, the consequences of
which conflict or breach or default or termination will have a Material Adverse
Effect, or result in or require the creation or imposition of any Lien
whatsoever upon any of its Property, or (iii) require any approval of the
stockholders of the REIT.
(d) Consents and Authorizations. The REIT has obtained all consents and
authorizations required pursuant to its Contractual Obligations with any other
Person, the failure of which to obtain would have a Material Adverse Effect,
and has obtained all consents and authorizations of, and effected all notices to
and filings with, any Governmental Authority necessary to allow the REIT to
lawfully execute, deliver and perform its obligations under the Loan Documents
to which the REIT is a party.
(e) Governmental Regulation. The REIT is not subject to regulation
under the Public Utility Holding Company Act of 1935, the Federal Power Act, the
Interstate Commerce Act, the Investment Company Act of 1940 or any other federal
or state statute or regulation such that its ability to incur indebtedness is
limited or its ability to consummate the transactions contemplated by the Loan
Documents is materially impaired.
(f) Capitalization. To the REIT's knowledge, all of the capital stock
of the REIT has been issued in compliance with all applicable Requirements of
Law.
(g) Litigation, Adverse Effects.
(i) There is no action, suit, proceeding, governmental
investigation or arbitration, at law or in equity, or before or by any
Governmental Authority, pending, or
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to best of the REIT's knowledge, threatened against the REIT, any of its
Subsidiaries or any of their respective Properties in which there is a
reasonable possibility of an adverse decision that could have a Material
Adverse Effect.
(ii) Neither the REIT nor any of its Subsidiaries is (A) in
violation of any applicable Requirement of Law, which violation has a
Material Adverse Effect, or (B) subject to or in default with respect to any
Court Order which has a Material Adverse Effect.
(h) Payment of Taxes. All tax returns and reports to be filed by the
REIT or any of its Subsidiaries have been timely filed, and all taxes,
assessments, fees and other governmental charges shown on such returns have been
paid when due and payable, except such taxes, if any, as are reserved against in
accordance with GAAP, such taxes as are being contested in good faith by
appropriate proceedings or such taxes, the failure to make payment of which when
due and payable would not have, in the aggregate, a Material Adverse Effect. The
REIT has no knowledge of any proposed tax assessment against the REIT or any of
its Subsidiaries that would have a Material Adverse Effect, which is not being
actively contested in good faith by the REIT or such Subsidiary.
(i) Material Adverse Agreements. The REIT is not a party to or subject
to any Contractual Obligation or other restriction contained in its charter,
by-laws, or similar governing documents which has a Material Adverse Effect.
(j) Performance. Neither the REIT nor any of its Subsidiaries is in
default in the performance, observance or fulfillment of any of the obligations,
covenants or conditions contained in any Contractual Obligation applicable to
it, and no condition exists which, with the giving of notice or the lapse of
time or both, would constitute a default under such Contractual Obligation in
each case, except where the consequences, direct or indirect, of such default or
defaults, if any, would not have a Material Adverse Effect.
(k) Securities Activities. The REIT is not engaged principally in the
business of extending credit for the purpose of purchasing or carrying any
"margin stock" (as defined in Regulation U).
(l) Disclosure. The REIT has not intentionally or knowingly withheld
any material fact from Agent in regard to any matter raised in the Loan
Documents. Notwithstanding the foregoing, with respect to any projections of the
REIT's future performance such representations and warranties are made in good
faith and to the best judgment of the management of the REIT at the time such
projections were made.
(m) Requirements of Law. To the REIT's knowledge, the REIT and each of
its Subsidiaries are in compliance with all Requirements of Law (including
without limitation the Securities Act and the Securities Exchange Act, and the
applicable rules and regulations thereunder, state securities law and "Blue Sky"
laws) applicable to them and their respective
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businesses, in each case, where the failure to so comply would have a Material
Adverse Effect. After giving effect to all filings made simultaneously with the
Closing Date, the REIT has made all filings with and obtained all consents of
the Commission required under the Securities Act and the Securities Exchange Act
in connection with the execution, delivery and performance by the REIT of the
Loan Documents to which it is a party.
(n) Patents, Trademarks, Permits, Etc. The REIT and each of its
Subsidiaries own, are licensed or otherwise have the lawful right to use, or
have all permits and other governmental approvals, patents, trademarks, trade
names, copyrights, technology, know-how and processes used in or necessary for
the conduct of the REIT's or such Subsidiary's business as currently conducted,
the absence of which would have a Material Adverse Effect. To the REIT's
knowledge, the use of such permits and other governmental approvals, patents,
trademarks, trade names, copyrights, technology, know-how and processes by the
REIT or such subsidiary does not infringe on the rights of any Person, subject
to such claims and infringements as do not, in the aggregate, have a Material
Adverse Effect.
(o) Environmental Matters. To the knowledge of the REIT, except as
would not have a Material Adverse Effect and except as set forth on Schedule
4.01(r), (i) the Property and operations of the REIT and each of its
Subsidiaries comply in all material respects with all applicable Environmental
Laws; (ii) none of the Property or operations of the REIT or any of its
Subsidiaries are subject to any Remedial Action or other Liabilities and Costs
arising from the Release or threatened Release of a Contaminant into the
environment or from the violation of any Environmental laws, which Remedial
Action or other Liabilities and Costs would have a Material Adverse Effect;
(iii) neither the REIT nor any of its Subsidiaries has filed any notice under
applicable Environmental Laws reporting a Release of a Contaminant into the
environment in violation of any Environmental Laws, except as the same may have
been heretofore remedied; (iv) there is not now, nor to the REIT's knowledge has
there ever been, on or in the Property of the REIT or any of its Subsidiaries
(except in compliance in all material respects with all applicable Environmental
Laws): (A) any underground storage tanks, (B) any asbestos-containing material,
(C) any polychlorinated biphenyls (PCB's) used in hydraulic oils, electrical
transformers or other equipment, (D) any petroleum hydrocarbons or (E) any
chlorinated or halogenated solvents; and (v) neither the REIT nor any of its
Subsidiaries has received any notice or claim to the effect that it is or may be
liable to any Person as a result of the Release or threatened Release of
Contaminant into the environment.
(p) Solvency. The REIT is and will be Solvent after giving effect to
the disbursement of the Loan and the payment of all fees then payable.
(q) Status as a REIT. The REIT (i) is a real estate investment trust as
defined in Section 856 of the Internal Revenue Code (or any successor provision
thereto), (ii) has not revoked its election to be a real estate investment
trust, (iii) has not engaged in any "prohibited transactions" as defined in
Section 856(b)(6)(iii) of the Internal Revenue Code (or any successor provision
thereto), except for the transfer of manufactured home inventory from Borrower
to
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Realty Systems, Inc., a Delaware corporation (provided that such transfer does
not adversely affect the REIT's status as a real estate investment trust under
the Internal Revenue Code), and (iv) for its current "tax year" (as defined in
the Internal Revenue Code) is and for all prior tax years subsequent to its
election to be a real estate investment trust has been entitled to a dividends
paid deduction which meets the requirements of Section 857 of the Internal
Revenue Code.
(r) Ownership. The REIT does not own any Property or have any
interest in any Person other than as set forth on Schedule 4.01(v).
(s) Listing. The common stock of the REIT is and will continue to be
listed for trading and traded on either the New York Stock Exchange or American
Stock Exchange.
(t) Year 2000. Based on a recent assessment, the REIT determined that
a majority of its applications will function properly with respect to dates in
the Year 2000 and thereafter. The REIT has initiated formal communications with
all of its significant suppliers to determine the extent to which the REIT's
interface systems are vulnerable to those third parties' failure to remediate
their own Year 2000 issues. The REIT's total Year 2000 project cost and
estimate to complete do not include the estimated costs and time associated with
the impact of third party Year 2000 issues. There can be no guarantee that the
systems of other companies on which the REIT's systems rely will be timely
converted and would not have an adverse effect on the REIT's systems. The REIT
anticipates completing its Year 2000 project no later than December 31, 1998,
which is prior to any impact on its operating systems. The total cost of the
Year 2000 project is estimated to be immaterial assuming third parties remediate
their own Year 2000 issues. This assumption is based on management's best
estimates, which were derived utilizing numerous assumption of future events,
and there can be no guarantee that these estimates will be achieved and actual
results could differ materially from those anticipated.
ARTICLE V
REPORTING COVENANTS
Borrower covenants and agrees that, on and after the date hereof, until
payment in full of all of the Obligations and termination of this Agreement:
5.01 Financial Statements and Other Financial and Operating
Information. Borrower shall maintain or cause to be maintained a system of
accounting established and administered in accordance with sound business
practices and consistent with past practice to permit preparation of quarterly
and annual financial statements in conformity with GAAP. Borrower shall deliver
or cause to be delivered to Agent with copies for each Lender:
(a) Quarterly Financial Statements Certified by CFO. As soon as
practicable, and in any event within fifty (50) days after the end of each
Fiscal Quarter, except the last fiscal Quarter of a Fiscal Year, consolidated
balance sheets, statements of income and expenses and
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statements of cash flow (collectively, "Financial Statements") for the REIT, on
a consolidated basis, in the form provided to the Commission on the REIT's Form
10-Q and certified by the REIT's chief financial officer.
(b) Annual Financial Statements. Within one hundred and twenty (120)
days after the close of each Fiscal Year, annual Financial Statements of the
REIT, on a consolidated basis (in the form provided to the Commission on the
REIT's Form 10K), audited and certified without qualification by the
Accountants.
(c) Officer's Certificate of Borrower. (i) Together with each delivery
of any Financial Statement pursuant to Sections 5.01(a) and (b), an Officer's
Certificate of the REIT stating that (A) the executive officer who is the
signatory thereto, which officer shall be the chief executive officer or the
chief financial officer of the REIT, has reviewed, or caused under his
supervision to be reviewed, the terms of this Agreement and the other Loan
Documents, and has made, or caused to be made under his supervision, a review in
reasonable detail of the transactions and condition of Borrower, the REIT, the
Subsidiaries, and the Agreement Parties, during the accounting period covered by
such Financial Statements, and that such review has not disclosed the existence
during or at the end of such accounting period, and that the signers do not have
knowledge of the existence as of the date of the Officer's Certificate, of any
condition or event which constitutes an Event of Default or Unmatured Event of
Default, or, if any such condition or event existed or exists, specifying the
nature and period of existence thereof and what action has been taken, is being
taken and is proposed to be taken with respect thereto and (B) such Financial
Statements have been prepared in accordance with the books and records of the
REIT, on a consolidated basis, and fairly present the financial condition of the
REIT, on a consolidated basis at the date thereof (and, if applicable subject to
normal year-end adjustments) and the results of operations and cash flows, on a
consolidated basis, for the period then ended; and (ii) together with each
delivery pursuant to clauses (a) and (b) above, a Compliance Certificate
demonstrating, in reasonable detail (which detail shall include actual
calculations), compliance during and at the end of such accounting periods with
the financial covenants contained in 7.01(d) and 7.01(k) and Article VIII.
(d) Knowledge of Event of Default. Promptly upon Borrower obtaining
knowledge (i) of any condition or event which constitutes an Event of Default or
Unmatured Event of Default, or (ii) of any condition or event which has a
Material Adverse Effect, an Officer's Certificate specifying the nature and
period of existence of any such condition or event and the nature of such
claimed Event of Default, Unmatured Event of Default, event or condition, and
what action Borrower, the REIT or the Agreement Party, as the case may be, has
taken, is taking and proposes to take with respect thereto.
(e) Litigation, Arbitration or Government Investigation. Promptly upon
Borrower obtaining knowledge of (i) the institution of, or threat of, any
material action, suit, proceeding, governmental investigation or arbitration
against or affecting Borrower, any Agreement Party, the REIT, any Subsidiary or
any of their Property not previously disclosed in
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writing by Borrower to Agent pursuant to this Section 5.01(e), or (ii) any
material development in any action, suit, proceeding, governmental investigation
or arbitration already disclosed, in which, in either case, there is a
reasonable possibility of an adverse decision that could have a Material Adverse
Effect, a notice thereof to Agent and such other information as may be
reasonably available to it to enable Agent and its counsel to evaluate such
matters.
(f) Failure of the REIT to Qualify as Real Estate Investment Trust.
Promptly upon, and in any event within forty-eight (48) hours after Borrower
first has knowledge of (i) the REIT failing to continue to qualify as a real
estate investment trust as defined in Section 856 of the Internal Revenue Code
(or any successor provision thereof), (ii) any act by the REIT causing its
election to be taxed as a real estate investment trust to be terminated, (iii)
any act causing the REIT to be subject to the taxes imposed by Section 857(b)(6)
of the Internal Revenue Code (or any successor provision thereto), (iv) the REIT
failing to be entitled to a dividends paid deduction which meets the
requirements of Section 857 of the Internal Revenue Code or (v) any challenge by
the IRS to the REIT's status as a real estate investment trust, a notice of any
such occurrence or circumstance.
(g) Management Reports. Upon and after the occurrence of an Event of
Default, copies of any management reports prepared by the Accountants as soon as
available.
(h) Property Changes. Notice of any material acquisition, disposition,
merger, or purchase by the REIT, Borrower, any Subsidiary or any Agreement Party
no later than ten (10) days after the consummation thereof, specifying the
nature of the transaction in reasonable detail.
(i) Other Information. Such other information, reports, contracts,
schedules, lists, documents, agreements and instruments in the possession of the
REIT, Borrower, any Subsidiary, or any Agreement Party with respect to the
business, financial condition, operations, performance, or properties of
Borrower, the REIT, any Subsidiary, or any Agreement Party, as Agent may, from
time to time, reasonably request, including without limitation, annual
information with respect to cash flow projections, budgets, operating statements
(current year and immediately preceding year), rent rolls, lease expiration
reports, leasing status reports, note payable summaries, bullet note summaries,
equity funding requirements, contingent liability summaries, line of credit
summaries, line of credit collateral summaries, wrap note or note receivable
summaries, schedules of outstanding letters of credit, summaries of cash and
Cash Equivalents, projections of management and leasing fees and overhead
budgets, each in the form customarily prepared by the REIT or Borrower. If
Borrower fails to provide Agent with information requested from Borrower within
the time periods provided for herein, or if no time periods are provided for,
within ten (10) Business Days after Agent requests such information, and
provided that Agent gives Borrower reasonable prior notice and an opportunity to
participate, Borrower hereby authorizes Agent to communicate with the
Accountants and authorizes the Accountants to disclose to Agent any and all
financial statements and other information of any kind, including copies of any
management letter or the substance of any oral information that such Accountants
may have with respect to financial condition, operations,
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properties, performance and prospects of Borrower, the REIT, any Subsidiary, or
any Agreement Party. Concurrently therewith, Agent will notify Borrower of any
such communication. At Agent's request, Borrower shall deliver a letter
addressed to the Accountants instructing them to disclose such information in
compliance with this Section 5.01(i).
5.02 Press Releases: SEC Filings and Financial Statements. The REIT
and Borrower will deliver to the Agent as soon as practicable after public
release all press releases concerning the REIT or Borrower. The REIT and
Borrower will deliver to Agent as soon as practicable after filing with the
Commission, all reports and notices, proxy statements, registration statements
and prospectuses. All materials sent or made available generally by the REIT
to the holders of its publicly-held Securities or to a trustee under any
indenture or filed with the Commission, including all periodic reports required
to be filed with the Commission, will be delivered to Agent as soon as
available.
5.03 Environmental Notices. Except for events or occurrences that will
not result in a Material Adverse Effect, Borrower shall notify Agent, in
writing, as soon as practicable, and in any event within ten (10) days after
Borrower's learning thereof, of any: (a) written notice or claim to the effect
that Borrower, any Agreement Party, the REIT, or any Subsidiary is or may be
liable to any Person as a result of the Release or threatened Release of any
Contaminant into the environment; (b) written notice that Borrower, any
Agreement Party, the REIT, or any Subsidiary is subject to investigation by any
Governmental Authority evaluating whether any Remedial Action is needed to
respond to the Release or threatened Release of any Contaminant into the
environment; (c) written notice that any Property of Borrower, any Agreement
Party, the REIT, or any Subsidiary is subject to an Environmental Lien; (d)
written notice of violation to Borrower, any Agreement Party, the REIT, or any
subsidiary or awareness of a condition which might reasonably result in a
notice of violation of any Environmental Laws by Borrower, the REIT, any
subsidiary or any Agreement Party; (e) commencement or written threat of any
judicial or administrative proceeding alleging a violation by Borrower, the
REIT, any Subsidiary or any Agreement Party of any Environmental Laws; or (f)
written notice received directly from a Governmental Authority of any changes to
any existing Environmental Laws.
5.04 Qualifying Unencumbered Properties. Borrower may from time to
time but no more frequently than quarterly deliver notice to the Agent stating
that Borrower intends to designate a Property to become a Qualifying
Unencumbered Property. Such notice shall (i) set forth the name of such
Property (or, if such Property has no name, such notice shall otherwise identify
such Property), and (ii) be accompanied by a statement of income, certified by
the chief financial officer of Borrower, for each such Property for the then
most recently completed Fiscal Quarter (or, if such statement of income is
unavailable, a pro forma financial statement setting forth the Net Operating
Income with respect to such Property for the then current Fiscal Quarter). If
any such Property meets the requirements set forth in the definition of
"Qualifying Unencumbered Properties" and the Agent fails to deliver written
notice to Borrower stating that the Requisite Lenders have disapproved the
designation of such Property as a Qualifying Unencumbered Property (it being
understood that such notice shall provide Borrower with
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information regarding why such designation was disapproved by the Requisite
Lenders and that the Requisite Lenders will not unreasonably disapprove such
designation) within twenty (20) days after receipt of such information by Agent,
such Property shall become a Qualifying Unencumbered Property.
ARTICLE VI
AFFIRMATIVE COVENANTS
Borrower and the REIT covenant and agree that, on and after the date
hereof, until payment in full of all of the Obligations and termination of this
Agreement:
6.01 With respect to Borrower:
(a) Existence. Borrower shall, and shall cause each of its
Subsidiaries to, at all times maintain its and their respective partnership,
limited liability company, trust or corporate existence, as applicable, and
preserve and keep in full force and effect its and their respective rights and
franchises unless the failure to maintain such rights and franchises does not
have a Material Adverse Effect. Borrower shall maintain its status as a limited
partnership.
(b) Qualification. Borrower shall, and shall cause each of its
Subsidiaries to, qualify and remain qualified to do business in each
jurisdiction in which the nature of its and their businesses require them to be
so qualified except for those jurisdictions where failure to so qualify does not
have a Material Adverse Effect.
(c) Compliance with Laws, Etc. Borrower shall, and shall cause each of
its Subsidiaries to, (i) comply with all Requirements of Law and Contractual
Obligations, and all restrictive covenants affecting Borrower and its
Subsidiaries or their respective properties, performance, assets or operations,
and (ii) obtain as needed all Permits necessary for its and their respective
operations and maintain such in good standing, except in each of the foregoing
cases where the failure to do so will not have a Material Adverse Effect or
expose Agent or Lenders to any material liability therefor.
(d) Payment of Taxes and Claims. (a) Borrower shall, and shall cause
each of its Subsidiaries to, pay (i) all taxes, assessments and other
governmental charges imposed upon it or them or on any of its or their
respective properties or assets or in respect of any of its or their respective
franchises, business, income or property before any penalty or interest accrues
thereon, the failure to make payment of which in such time periods will have a
Material Adverse Effect, and (ii) all claims (including, without limitation,
claims for labor, services, materials and supplies) which have become due and
payable and which by law have or may become a Lien (other than a Permitted Lien)
upon any of its or their respective properties or assets, prior to the time when
any penalty or fine shall be incurred with respect thereto, the failure to make
payment of which will have a Material Adverse Effect; provided, however, that no
such taxes, assessments, and governmental charges referred to in clause (i)
above or claims referred to in
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clause (ii) above need be paid if being contested in good faith by appropriate
proceedings promptly instituted and diligently conducted and if adequate
reserves shall have been set aside therefor in accordance with GAAP.
(e) Maintenance of Properties; Insurance. Borrower shall, and shall
cause each of its Subsidiaries to, maintain in good repair, working order and
condition, excepting ordinary wear and tear, all of its and their respective
Property (personal and real) and will make or cause to be made all appropriate
repairs, renewals and replacements thereof, in each case where the failure to so
maintain, repair, renew or replace will have a Material Adverse Effect. Borrower
shall, and shall cause each of its Subsidiaries to, maintain with insurance
companies that have a Best Rating of "A- VII" or higher or other insurance
companies reasonably acceptable to Agent that have similar financial resources
and stability, which companies shall be qualified to do business in the states
where such Property is located, the insurance policies and programs reasonably
acceptable to Agent insuring all property and assets material to the operations
of Borrower and each of its Subsidiaries against loss or damage by fire, theft,
burglary, pilferage and loss in transit and business interruption, together with
such other hazards as is reasonably consistent with prudent industry practice,
and maintain liability insurance consistent with prudent industry practice with
financially sound insurance companies qualified to do business in the states
where such property is located. The insurance policies shall provide that they
cannot be terminated or materially modified unless Agent receives thirty (30)
days prior written notice of said termination or modification. At Agent's
reasonable request, Borrower shall furnish evidence of replacement costs,
without cost to Agent, such as are regularly and ordinarily made by insurance
companies to determine the then replacement cost of the improvements on any
Property of Borrower or any of its Subsidiaries. In the event Borrower fails to
cause insurance to be carried as aforesaid, Agent shall have the right (but not
the obligation), with the consent of Requisite Lenders, to place and maintain
insurance required to be maintained hereunder and treat the amounts expended
therefor as additional Obligations, payable on demand; provided however, that
Agent shall give Borrower five (5) days' prior notice of Agent's intent to place
or maintain such insurance during which time Borrower shall have the opportunity
to obtain such insurance. All of the insurance policies required hereunder shall
be in form and substance reasonably satisfactory to Agent. Agent hereby agrees
that Borrower may use blanket policies to satisfy the requirements of this
Section 6.01(e), approves the issuer, form and content of all insurance
policies currently carried by Borrower and agrees that such insurance satisfies
the requirements of this Section 6.01(e). Furthermore, Agent agrees that it
will not be unreasonable in exercising any right hereunder to require Borrower
to modify, alter or supplement its insurance policies or coverage or in
exercising any right it may have hereunder to approve any changes Borrower may
hereafter make with respect to its insurance.
(f) Inspection of Property; Books and Records. Borrower shall permit
and shall cause each of the REIT, each Subsidiary, and each Agreement Party to,
upon reasonable prior notice by Agent to Borrower, permit any authorized
representative(s) designated by Agent to visit and inspect any of its properties
including inspection of financial and accounting records and leases, and to make
copies and take extracts therefrom, all at such times during normal
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business hours and as often as Agent may reasonably request. In connection
therewith, Borrower shall pay all reasonable expenses of the types described in
Section 11.01. Borrower shall keep, and shall cause each of the REIT, each
Subsidiary and each Agreement Party to keep proper books of record and account
in conformity with GAAP, as modified and as otherwise required by this Agreement
and applicable Requirements of Law.
(g) Maintenance of Licenses, Permits, Etc. Borrower shall, and shall
cause each of its Subsidiaries to, maintain in full force and effect all
licenses, permits, governmental approvals, franchises, patents, trademarks,
trade names, copyrights, authorizations or other rights necessary for the
operation of their respective businesses, except where the failure to obtain
any of the foregoing would not have a Material Adverse Effect; and notify Agent
in writing, promptly after learning thereof, of the suspension, cancellation,
revocation or discontinuance of or of any pending or threatened action or
proceeding seeking to suspend, cancel, revoke or discontinue any such material
license, permit, patent, trademark, trade name, copyright, governmental
approval, franchise authorization or right, except where the suspension,
cancellation, revocation or discontinuance would not have a Material Adverse
Effect.
(h) Conduct of Business. Except for Permitted Holdings and other
Investments permitted under Section 7.01(c), Borrower shall engage only in the
business of owning, operating and developing manufactured home communities,
whether directly or through its Subsidiaries.
(i) Use of Proceeds. Borrower shall use the proceeds of the Loan
Increase only for the purpose of refinancing indebtedness outstanding under the
Revolving Credit Agreement.
(j) Further Assurance. Borrower shall take and shall cause its
Subsidiaries and each Agreement Party to take all such further actions and
execute all such further documents and instruments as Agent may at any time
reasonably determine to be necessary or advisable to (i) correct any technical
defect or technical error that may be discovered in any Loan Document or in the
execution, acknowledgment or recordation thereof and (ii) cause the execution,
delivery and performance of the Loan Documents to be duly authorized.
6.02 With respect to the REIT:
(a) Corporate Existence. The REIT shall, and shall cause each of its
Subsidiaries to, at all times maintain its and their respective partnership or
corporate existence, as applicable, and preserve and keep in full force and
effect its and their respective rights and franchises unless the failure to
maintain such rights and franchises will not have a Material Adverse Effect.
(b) Qualification, Name. The REIT shall, and shall cause each of its
Subsidiaries to, qualify and remain qualified to do business in each
jurisdiction in which the nature of its and their businesses requires them to be
so qualified except for those jurisdictions where failure to so qualify does not
have a Material Adverse Effect. The REIT will transact business solely in its
own name.
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(c) Securities Law Compliance. The REIT shall comply in all material
respects with all rules and regulations of the Commission and file all reports
required by the Commission relating to the REIT's publicly-held Securities.
(d) Continued Status as a REIT Prohibited Transactions. The REIT (i)
will continue to be a real estate investment trust as defined in Section 856 of
the Internal Revenue Code (or any successor provision thereto), (ii) will not
revoke its election to be a real estate investment trust, (iii) will not engage
in any "prohibited transactions" as defined in Section 856(b)(6)(iii) of the
Internal Revenue Code (or any successor provision thereto), and (iv) will do all
acts necessary to continue to be entitled to a dividend paid deduction meeting
the requirements of Section 857 of the Internal Revenue Code.
(e) NYSE Listed Company. The REIT shall cause its common stock at all
times to be listed for trading and be traded on the New York Stock Exchange or
American Stock Exchange.
(f) Compliance with Laws, Etc. The REIT shall, and shall cause each of
its Subsidiaries to, (i) comply with all Requirements of Law and Contractual
Obligations, and all restrictive covenants affecting the REIT and its
Subsidiaries or their respective properties, performance, prospects, assets or
operations, and (ii) obtain as needed all Permits necessary for its and their
respective operations and maintain such in good standing, except in each of the
foregoing cases where the failure to do so will not have a Material Adverse
Effect.
(g) Payment of Taxes and Claims. Subject to Section 6.02(d), the REIT
shall, and shall cause each of its Subsidiaries to, pay (i) all taxes,
assessments and other governmental charges imposed upon it or them or on any of
its or their respective properties or assets or in respect of any of its or
their respective franchises, business, income or property before any penalty or
interest accrues thereon, the failure to make payment of which will have a
Material Adverse Effect, and (ii) all claims (including, without limitation,
claims for labor, services, materials and supplies) which have become due and
payable and which by law have or may become a Lien (other than a Permitted Lien)
upon any of its or their respective properties or assets, prior to the time when
any penalty or fine shall be incurred with respect thereto, the failure to make
payment of which will have a Material Adverse Effect; provided, however, that no
such taxes, assessments, and governmental charges referred to in clause (i)
above or claims referred to in clause (ii) above need be paid if being contested
in good faith by appropriate proceedings promptly instituted and diligently
conducted and if adequate reserves shall have been set aside therefor in
accordance with GAAP.
ARTICLE VII
NEGATIVE COVENANTS
Borrower and the REIT covenant and agree that, on and after the date
hereof, until payment in full of all of the Obligations and termination of
this Agreement:
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7.01 With respect to Borrower:
(a) Indebtedness. Borrower shall not, and shall not permit any of its
Subsidiaries to, directly or indirectly create, incur, assume or otherwise
become or remain directly or indirectly liable with respect to, any
Indebtedness, except:
(i) the Obligations;
(ii) trade debt incurred in the normal course of business; and
(iii) Indebtedness which, after giving effect thereto, may be
incurred or may remain outstanding without giving rise to an Event of Default or
Unmatured Event of Default under any provision of Articles VII and VIII.
(b) Liens. Borrower shall not, and shall not permit any of its
Subsidiaries to, directly or indirectly create, incur, assume or permit to exist
any Lien on or with respect to any of its Property, except:
(i) Permitted Liens; and
(ii) Liens securing Indebtedness permitted to be incurred and
remain outstanding pursuant to Section 7.01(a)(iii), which, after giving effect
thereto, may be incurred or may remain outstanding without giving rise to an
Event of Default or Unmatured Event of Default under any provision of Articles
VII and VIII.
(c) Investments. Borrower shall not, and shall not permit any of its
Subsidiaries to, directly or indirectly make or own any Investment except:
(i) Investments in cash and Cash Equivalents;
(ii) Permitted Holdings;
(iii) Investments in Subsidiaries and Investment Affiliates owned
as of the Closing Date;
(iv) Investments permitted pursuant to Section 7.01(e)(v);
(v) Controlled Partnership Interests which do not constitute
Non-Manufactured Home Community Property; and
(vi) mortgage loans which do not constitute Non-Manufactured Home
Community Property and which are either eliminated in the consolidation of the
REIT, Borrower and the Subsidiaries or are accounted for as investments in real
estate under GAAP.
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(d) Distributions and Dividends. Neither Borrower nor the REIT shall
declare or make any dividend or other distribution on account of partnership
interests in excess of ninety-five percent (95%) of Funds From Operations in any
Fiscal Year; provided, however, that if an Event of Default under Section 9.01
(a) shall have occurred, neither Borrower nor the REIT shall declare or make any
dividend or other distribution on account of partnership interests in excess of
what is required for the REIT to maintain its status as a real estate investment
trust as defined in Section 856 of the Internal Revenue Code.
(e) Restrictions on Fundamental Changes.
(i) Borrower shall not, and shall not permit any of its
Subsidiaries to, enter into any merger, consolidation, reorganization or
recapitalization or liquidate, wind-up or dissolve (or suffer any
liquidation or dissolution), or discontinue its business.
(ii) Borrower shall remain a limited partnership with the REIT as
its sole general partner.
(iii) Borrower shall not change its Fiscal Year.
(iv) Except for Permitted Holdings and other Investments
permitted under Section 7.01(c), Borrower shall not engage in any line of
business other than ownership, operation and development of manufactured
home communities and the provision of services incidental thereto and the
brokerage, purchase, and sale of manufactured home units, whether directly
or through its Subsidiaries and Investment Affiliates.
(v) Borrower shall not acquire by purchase or otherwise all or
substantially all of the business, property or assets of, or stock or other
evidence of beneficial ownership of, any Person, unless after giving effect
thereto, Borrower is in pro forma compliance with this Agreement.
(f) ERISA. Neither Borrower nor the REIT shall, and neither shall
permit any Material Subsidiary or any of their ERISA Affiliates to, do any of
the following to the extent that such act or failure to act would result in the
aggregate, after taking into account any other such acts or failure to act, in a
Material Adverse Effect:
(i) Engage, or knowingly permit a Subsidiary or an ERISA
Affiliate to engage, in any prohibited transaction described in Section 406
of ERISA or Section 4975 of the Internal Revenue Code which is not exempt
under Section 407 or 408 of ERISA or Section 4975(d) of the Internal
Revenue Code for which a class exemption is not available or a private
exemption has not been previously obtained from the DOL;
(ii) Permit to exist any accumulated funding deficiency (as
defined in Section 302 of ERISA and Section 412 of the Internal Revenue
Code), whether or not
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(iii) Fail, or permit a Material Subsidiary or an ERISA Affiliate
of the REIT. Borrower or any Material Subsidiary to fail, to pay timely
required contributions or annual installments due with respect to any
waived funding deficiency to any Plan if such failure could result in the
imposition of a Lien or otherwise would have a Material Adverse Effect;
(iv) Terminate, or permit an ERISA Affiliate of the REIT,
Borrower or any Material Subsidiary to terminate, any Benefit Plan which
would result in any liability of Borrower or a Material Subsidiary or an
ERISA Affiliate of the REIT, Borrower or any, Material Subsidiary under
Title IV of ERISA; or
(v) Fail, or permit any Subsidiary or ERISA Affiliate to fail to
pay any required installment under section (m) of Section 412 of the
Internal Revenue Code or any other payment required under Section 412 of
the Internal Revenue Code on or before the due date for such installment or
other payment, if such failure could result in the imposition of a Lien or
otherwise would have a Material Adverse Effect; or
(vi) Permit to exist any Termination Event;
(vii) Make, or permit a Material Subsidiary or an ERISA Affiliate
of the REIT, Borrower or any Material Subsidiary to make, a complete or
partial withdrawal (within the meaning of ERISA Section 4201) from any
Multiemployer Plan so as to result in liability to Borrower, a Material
Subsidiary or any ERISA Affiliate of the REIT, Borrower or any Material
Subsidiary which would have a Material Adverse Effect; or
(viii) Permit the total Unfunded Pension Liabilities (using the
actuarial assumptions utilized by the PBGC) for all Benefit Plans (other
than Benefit Plans which have no Unfunded Pension Liabilities) to have a
Material Adverse Effect.
None of the REIT, Borrower nor any Agreement Party shall use any
"assets" (within the meaning of ERISA or Section 4975 of the Internal Revenue
Code, including but not limited to 29 C.F.R. ss. 2510.3-101 or any successor
regulation thereto) of an "employee benefit plan" within the meaning of Section
3(3) of ERISA or a "plan" within the meaning of Section 4975(e)(1) of the
Internal Revenue Code to repay or secure the Obligations if the use of such
assets may result in a prohibited transaction under ERISA or the Internal
Revenue Code (which is not exempt from the restrictions of Section 406 of ERISA
and Section 4975 of the Internal Revenue Code and the taxes and penalties
imposed by Section 4975 of the Internal Revenue Code and Section 502(i) of
ERISA) or in a Lender, Agent or the Lenders being deemed in violation of Section
404 or 406 of ERISA or Section 4975 of the Internal Revenue Code or otherwise by
itself results in or will result in a Lender, Agent or the Lenders being a
fiduciary or party in interest under ERISA or a "disqualified person" as defined
in Section 4975 (e)(2) of the Internal Revenue Code with respect to an
"employee benefit plan" within the meaning of Section 3(3) of ERISA or a "plan"
within the meaning of Section 4975(e)(1) of the Internal Revenue Code. Without
limitation of any other provision of this Agreement, none of the REIT. Borrower
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or any Agreement Party shall assign, sell, pledge, encumber, transfer,
hypothecate or otherwise dispose of their respective interests or rights (direct
or indirect) in any Loan Document, or attempt to do any of the foregoing or
suffer any of the foregoing, or permit any party with a direct or indirect
interest or right in any Loan Document to do any of the foregoing, nor shall
REIT or Borrower assign, sell, pledge, encumber, transfer, hypothecate or
otherwise dispose of any of their respective rights or interests (direct or
indirect) in any Agreement Party. Borrower or REIT, as applicable, or attempt
to do any of the foregoing or suffer any of the foregoing, if such action would
cause the Obligations, or the exercise of any of the Agent's or Lenders' rights
in connection therewith, to constitute a prohibited transaction under ERISA or
the Internal Revenue Code (unless Borrower furnishes to Agent a legal opinion
reasonably satisfactory to Agent that the transaction is exempt from the
prohibited transaction provisions of ERISA and the Internal Revenue Code (for
this purpose, the Agent and Lenders agree to supply Borrower all relevant
non-confidential factual information reasonably necessary to such legal opinion
and reasonably requested by Borrower)) or otherwise results in a Lender, the
Agent or the Lenders being deemed in violation of Sections 404 or 406 of ERISA
or Section 4975 of the Internal Revenue Code or otherwise by itself would result
in a Lender, the Agent or the Lenders being a fiduciary or party in interest
under ERISA or a "disqualified person" as defined in Section 4975(e)(2) of the
Internal Revenue Code with respect to an "employee benefit plan" within the
meaning of Section 3(3) of ERISA or a "plan" within the meaning of Section
4975(e)(1) of the Internal Revenue Code.
(g) Environmental Liabilities. Borrower shall not, and shall not
permit any of its Subsidiaries to, become subject to any Liabilities and Costs
which will have a Material Adverse Effect arising out of or related to (i) the
Release or threatened Release of any Contaminant into the environment, or any
Remedial Action in response thereto, or (ii) any violation of any Environmental
Laws. Notwithstanding the foregoing provision, Borrower and its Subsidiaries
shall have the right to contest in good faith any claim of violation of an
Environmental Law by appropriate legal proceedings and shall be entitled to
postpone compliance with the obligation being contested as long as (i) no Event
of Default shall have occurred and be continuing, (ii) Borrower shall have given
Agent prior written notice of the commencement of such contest, (iii)
noncompliance with such Environmental Law shall not subject Borrower or such
Subsidiary to any criminal penalty or subject Agent to pay any civil penalty or
to prosecution for a crime, and (iv) no portion of any Property material to
Borrower or its condition or prospects shall be in imminent danger of being
sold, forfeited or lost, by reason of such contest or the continued existence of
the matter being contested.
(h) Amendment of Constituent Documents. Borrower shall not permit any
amendment of its limited partnership agreements, certificate of limited
partnership or by-laws, if any, which would materially and adversely affect
Agent or Lenders or their respective rights and remedies under the Loan
Documents.
(i) Disposal of Interests. Borrower will not directly or indirectly
convey, sell, transfer, assign, pledge or otherwise encumber or dispose of any
material portion of its
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partnership interests, stock or other ownership interests in any Subsidiary or
other Person in which it has an interest unless Borrower has delivered to Agent
a Compliance Certificate showing on a pro forma basis (calculated in a manner
reasonably acceptable to Agent) that there would be no breach of any of the
financial covenants contained in Articles VII and VIII after giving effect to
such conveyance, sale, transfer, assignment, pledge, or other encumbrance or
disposition.
(j) Margin Regulations. No portion of the proceeds of any credit
extended under this Agreement shall be used in any manner which might cause the
extension of credit or the application of such proceeds to violate Regulation G,
Regulation U or Regulation X or any other regulation of the Federal Reserve
Board or to violate the Securities Exchange Act or the Securities Act, in each
case as in effect on the Closing Date and the date of such use of proceeds.
(k) Transactions with Affiliates. Borrower shall not, and shall not
permit any of its Subsidiaries to, enter into, any transaction or series of
related transactions with any Affiliate of Borrower, other than transactions in
the ordinary course of business which are on terms and conditions substantially
as favorable to Borrower or such Subsidiary as would be obtainable by Borrower
or such Subsidiary in an arms-length transaction with a Person other than an
Affiliate.
7.02 With respect to the REIT:
(a) Indebtedness. The REIT shall not, and shall not permit any of its
Subsidiaries to, directly or indirectly, create, incur, assume or otherwise
become or remain directly or indirectly liable with respect to, any
Indebtedness, except:
(i) the Obligations; and
(ii) Indebtedness which, after giving effect thereto, may be
incurred or may remain outstanding without giving rise to an Event of
Default or Unmatured Event of Default under any provision of Articles VII
and VIII.
(b) Liens. The REIT shall not, and shall not permit any of its
Subsidiaries to, directly or indirectly create, incur, assume or permit to
exist any Lien on or with respect to any of its Property, except:
(i) Permitted Liens, and
(ii) Liens securing Indebtedness permitted to be incurred and
remain outstanding pursuant to Section 7.02(a)(ii).
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(c) Restriction on Fundamental Changes.
(i) The REIT shall not enter into any merger, consolidation,
reorganization or recapitalization or liquidate, wind-up or dissolve (or
suffer any liquidation or dissolution) or discontinue its business.
(ii) The REIT shall not change its Fiscal Year.
(iii) The REIT shall not engage in any line of business other
than owning partnership interests in Borrower and the interests identified
on Schedule 4.01(v) as being owned by the REIT and any other ownership
interests in Subsidiaries and Investment Affiliates which are permitted
under the terms of Borrower's partnership agreement.
(iv) The REIT shall not have an Investment in any Person other
than Borrower and the interests identified on Schedule 4.01(v) as being
owned by the REIT and any other ownership interests in Subsidiaries and
Investment Affiliates which are permitted under the terms of Borrower's
partnership agreement.
(v) The REIT shall not acquire an interest in any Property other
than Securities issued by Borrower and the interests identified on Schedule
4.01 (v) and any other ownership interests in Subsidiaries and Investment
Affiliates which are permitted under the terms of Borrower's partnership
agreement.
(d) Environmental Liabilities. The REIT shall not, and shall not
permit any of its Subsidiaries to, become subject to any Liabilities and Costs
which will have a Material Adverse Effect arising out of or related to (i) the
Release or threatened Release of any Contaminant into the environment, or any
Remedial Action in response thereto, or (ii) any violation of any Environmental
Laws. Notwithstanding the foregoing provision, the REIT and its Subsidiaries
shall have the right to contest in good faith any claim of violation of an
Environmental Law by appropriate legal proceedings and shall be entitled to
postpone compliance with the obligation being contested as long as (i) no Event
of Default shall have occurred and be continuing, (ii) the REIT shall have given
Agent prior written notice of the commencement of such contest, (iii)
noncompliance with such Environmental Law shall not subject the REIT or such
Subsidiary to any criminal penalty or subject Agent to pay any civil penalty or
to prosecution for a crime, and (iv) no portion of any Property material to
Borrower or its condition or prospects shall be in imminent danger of being
sold, forfeited or lost, by reason of such contest or the continued existence of
the matter being contested.
(e) Amendment of Charter or By-Laws. The REIT shall not permit any
amendment of its charter documents or by-laws, which would materially and
adversely affect Agent or Lenders or their respective rights and remedies under
the Loan Documents.
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(f) Disposal of Partnership Interests. The REIT will not directly or
indirectly convey, sell, transfer, assign, pledge or otherwise encumber or
dispose of any of its partnership interests in Borrower.
(g) Maximum Ownership Interests. No Person or group of Persons (within
the meaning of Section 13 or 14 of the Securities Exchange Act) (other than
Xxxxxx Xxxx) shall beneficially acquire ownership (within the meaning of Rule
l3d-3 promulgated by the Commission under such Act), directly or indirectly, of
more than fifteen percent (15%) of the Securities which have the right to elect
the board of directors of the REIT under ordinary circumstances on a combined
basis, after giving effect to the conversion of any Convertible Securities in
the REIT and Borrower.
ARTICLE VIII
FINANCIAL COVENANTS
Borrower covenants and agrees that, on and after the date of this
Agreement and until payment in full of all the Obligations, the expiration of
all Commitments and the termination of this Agreement:
8.01 Total Liabilities to Gross Asset Value. Borrower shall not permit
the ratio of Total Liabilities to the sum of Gross Asset Values for Borrower and
each of its Subsidiaries to exceed 0.6:1.
8.02 Secured Debt to Gross Asset Value. Borrower shall not permit the
ratio of Secured Debt to the sum of Gross Asset Values for Borrower and each of
its Subsidiaries to exceed 0.4:1.
8.03 EBITDA to Interest Expense Ratio. Borrower shall not permit the
ratio of EBITDA for any Fiscal Quarter to Interest Expense for such Fiscal
Quarter to be less than 2.0:1.
8.04 EBITDA to Fixed Charges Ratio. Borrower shall not permit the
ratio of EBITDA for any Fiscal Quarter to Fixed Charges for such Fiscal Quarter
to be less than 1.75:1.
8.05 Unencumbered Net Operating Income to Unsecured Interest Expense.
Borrower shall not permit the ratio of Unencumbered Net Operating Income for any
Fiscal Quarter to Unsecured Interest Expense for such Fiscal Quarter to be less
than 1.80:1.
8.06 Unencumbered Pool. Borrower shall not permit the ratio of (a) the
sum of (i) the Unencumbered Asset Value and (ii) the fair market value of cash
and Cash Equivalents owned by Borrower and subject to no Lien in excess of
$10,000,000 to (b) outstanding Unsecured Debt to be less than 1.80:1.
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8.07 Minimum Net Worth. Borrower will maintain a Net Worth of not less
than Two Hundred Fifty-Eight Million Three Hundred Seventeen Thousand One
Hundred Dollars ($258,317,100) plus ninety percent (90%) of all Net Offering
Proceeds received by the REIT or Borrower after September 30, 1996.
8.08 Permitted Holdings. Borrower's primary business will be the
ownership, operation and development of manufactured home communities and any
other business activities of Borrower and its Subsidiaries will remain
incidental thereto. Notwithstanding the foregoing, Borrower and its Subsidiaries
may acquire, maintain or engage in the following "Permitted Holdings" if and so
long as (i) the aggregate value of such Permitted Holdings, whether held
directly or indirectly by Borrower and its Subsidiaries, does not exceed, at any
time, twenty percent (20%) of Gross Asset Value for Borrower as a whole and (ii)
the value of each such Permitted Holding, whether held directly or indirectly by
Borrower and its Subsidiaries, does not exceed, at any time, the following
percentages of Borrower's Gross Asset Value:
Maximum Percentage of
Permitted Holdings Gross Asset Value
------------------ -----------------
Non-Manufactured Home Community
Property (other than cash or Cash Equivalents) 10%
Land 5%
Securities issued by real estate investment
trusts primarily engaged in the development,
ownership and management of manufactured
home communities 5%
Manufactured Home Community Mortgages
other than mortgage indebtedness which is
either eliminated in the consolidation of the
REIT, Borrower and the Subsidiaries or
accounted for as investments in real estate
under GAAP 10%
Manufacturing Home Community Partnership
Interests other than Controlled Partnership
Interests 10%
Development Activity 10%
For purposes of calculating the foregoing percentages the value of each category
shall be calculated in the manner that Gross Asset Value is determined;
provided, however, that the Gross Asset Value for Land and Securities shall be
equal to the lesser of (a) acquisition cost thereof
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or (b) the current market value thereof (such market value to be determined in a
manner reasonably acceptable to Agent); provided, further, that the Gross Asset
Value of Development Activity shall be determined in accordance with GAAP.
8.09 Calculation. Each of the foregoing ratios and financial
requirements shall be calculated as of the last day of each Fiscal Quarter, but
shall be satisfied at all times.
ARTICLE IX
EVENTS OF DEFAULT; RIGHTS AND REMEDIES
9.01 Events of Default. Each of the following occurrences shall
constitute an Event of Default under this Agreement:
(a) Failure to Make Payments When Due. (i) The failure to pay in full
any amount due on the Termination Date; (ii) the failure to pay in full any
principal when due; (iii) the failure to pay in full any interest owing
hereunder or under any of the other Loan Documents within ten (10) days after
the due date thereof and, unless Agent has previously delivered two (2) or more
notices of payment default to Borrower during the term of this Agreement (in
which event the following notice shall not be required), Agent shall have given
Borrower written notice that Agent has not received such payment on or before
the date such payment was required to be made and Borrower shall have failed to
make such payment within five (5) days after receipt of such notice; or (iv) the
failure to pay in full any other payment required hereunder or under any of the
other Loan Documents, whether such payment is required to be made to Agent or to
some other Person, within ten (10) days after Agent gives Borrower written
notice that such payment is due and unpaid.
(b) Dividends. Borrower or the REIT shall breach the covenant set
forth in Section 7.01 (d).
(c) Breach of Financial Covenants. Borrower shall fail to satisfy any
covenant set forth in Article VIII and such failure shall continue for forty
(40) days after Borrower's knowledge thereof.
(d) Other Defaults. Borrower, the REIT or any Agreement Party shall
fail duly and punctually to perform or observe any agreement, covenant or
obligation binding on Borrower, the REIT or any Agreement Party under this
Agreement or under any of the other Loan Documents (other than as described in
Section 6.01(e) or Sections 9.01(a), (b), (c), (e), or (p)), and such
failure shall continue for thirty (30) days after written notice from Agent to
Borrower, the REIT or any Agreement Party (or (i) such lesser period of time as
is mandated by applicable Requirements of Law or (ii) such longer period of time
(but in no case more than ninety (90) days) as is reasonably required to cure
such failure if Borrower, the REIT, or such Agreement Party commences such cure
within such thirty (30) days and diligently pursues the completion thereof).
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(e) Breach of Representation or Warranty. Any representation or
warranty made or deemed made by Borrower, the REIT or any Agreement Party to
Agent or any Lender herein or in any of the other Loan Documents or in any
statement, certificate or financial statements at any time given by Borrower
pursuant to any of the Loan Documents shall be false or misleading in any
material respect on the date as of which made and, with respect to such
representations or warranties not known by Borrower at the time made or deemed
made to be false or misleading, the defect causing such representation or
warranty to be false or misleading is not removed within thirty (30) days after
the written notice thereof from Agent to Borrower.
(f) Default as to Other Indebtedness. Borrower, the REIT, any
Subsidiary or any Investment Affiliate shall have defaulted under any Other
Indebtedness of such party (other than Non-Recourse Indebtedness) and as a
result thereof the holders of such Other Indebtedness shall have accelerated
such Other Indebtedness (other than Non-Recourse Indebtedness), if the aggregate
amount of such accelerated Other Indebtedness (to the extent of any recourse to
Borrower, the REIT or any Material Subsidiary), together with the aggregate
amount of any Other Indebtedness (other than Non-Recourse Indebtedness) of
Borrower, the REIT, any Subsidiary or any Investment Affiliate which has
theretofore been accelerated (to the extent of any recourse to Borrower, the
REIT or any Material Subsidiary) is $10,000,000 or more.
(g) Involuntary Bankruptcy; Appointment of Receiver, etc.
(i) An involuntary case or other proceeding shall be commenced
against the REIT, Borrower, any Subsidiary, or any Agreement Party and the
petition shall not be dismissed within sixty (60) days after commencement
of the case, or a court having jurisdiction shall enter a decree or order
for relief in respect of the REIT, Borrower, any Subsidiary, or any
Agreement Party, as the case may be, in an involuntary case or other
proceeding, under any applicable bankruptcy, insolvency or other similar
law now or hereinafter in effect; or any other similar relief shall be
granted under any applicable federal, state or foreign law; or
(ii) A decree or order of a court having jurisdiction in the
premises for the appointment of a receiver, liquidator, sequestrator,
trustee, custodian or other officer having similar powers over Borrower,
the REIT, any Subsidiary, or any Agreement Party, or over all or a
substantial part of the property of the REIT, Borrower, any Subsidiary, or
any Agreement Party shall be entered, or an interim receiver, trustee or
other custodian of the REIT, Borrower, any Subsidiary, or any Agreement
Party, or of all or a substantial part of the property of the REIT,
Borrower, any Subsidiary, or any Agreement Party shall be appointed or a
warrant of attachment, execution or similar process against any substantial
part of the property of the REIT, Borrower, any Subsidiary, or any
Agreement Party shall be issued and any such event shall not be stayed,
vacated, dismissed, bonded or discharged within sixty (60) days of entry,
appointment or issuance.
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(h) Voluntary Bankruptcy, Appointment of Receiver, Etc. The REIT,
Borrower, any Subsidiary, or any Agreement Party shall have an order for relief
entered with respect to it or commence a voluntary case under any applicable
bankruptcy, insolvency or other similar law now or hereafter in effect, or shall
consent to the entry of an order for relief in an involuntary case, or to the
conversion of an involuntary case to a voluntary case, under any such law, or
shall consent to the appointment of or taking of possession by a receiver,
trustee or other custodian for all or a substantial part of its property; the
REIT, Borrower, any Subsidiary, or any Agreement Party shall make any assignment
for the benefit of creditors or shall be unable or fail, or admit in writing its
inability, to pay its debts as such debts become due; or the general partner(s)
or Board of Directors (or any committee thereof), as applicable, of the REIT,
Borrower, any Subsidiary, or any Agreement Party adopts any resolution or
otherwise authorizes any action to approve any of the foregoing.
(i) Judgments and Attachments. (i) Any money judgments (other than a
money judgment covered by insurance but only if the insurer has admitted
liability with respect to such money judgment), writs or warrants of attachment,
or similar processes involving an aggregate amount in excess of $5,000,000 shall
be entered or filed against the REIT, Borrower, any Subsidiary, or any Agreement
Party or their respective assets and shall remain undischarged, unvacated,
unbonded or unstayed for a period of thirty (30) days, or (ii) any judgment or
order of any court or administrative agency awarding material damages shall be
entered against the REIT, Borrower, any Subsidiary, or any Agreement Party in
any action under the Federal securities laws seeking rescission of the purchase
or sale of, or for damages arising from the purchase or sale of, any Securities,
such judgment or order shall have become final after exhaustion of all available
appellate remedies and such judgment or order would have a Material Adverse
Effect.
(j) Dissolution. Any order, judgment or decree shall be entered
against the REIT, Borrower, or any Agreement Party decreeing its involuntary
dissolution or split up and such order shall remain undischarged and unstayed
for a period in excess of thirty (30) days; or the REIT, Borrower, or any
Agreement Party shall otherwise dissolve or cease to exist.
(k) Loan Documents. Any Loan Document shall cease to be in full force
and effect for any reason or any guarantor under any guaranty of all or any
portion of the Obligations shall at any time disavow or deny liability under
such guaranty in writing.
(l) ERISA Plan Assets. Any assets of Borrower, the REIT or any
Agreement Party shall constitute "assets" (within the meaning of 29 C.F.R. ss.
2510.3-101 or any successor regulation thereto) of an "employee benefit plan"
within the meaning of Section 3(3) of ERISA or a "plan" within the meaning of
Section 4975(e)(1) of the Internal Revenue Code or Borrower, the REIT or any
Agreement Party shall be an "employee benefit plan" as defined in Section 3(3)
of ERISA, a "multiemployer plan" as defined in Sections 4001(a)(3) or 3(37)
of ERISA, or a "plan" as defined in Section 4975(e)(1) of the Internal Revenue
Code.
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(m) ERISA Prohibited Transaction. The Obligations, any of the Loan
Documents or the exercise of any of the Agent's or Lenders' rights in connection
therewith shall constitute a prohibited transaction under ERISA and/or the
Internal Revenue Code (which is not exempt from the restrictions of Section 406
of ERISA or Section 4975 of the Internal Revenue Code and the taxes and
penalties imposed by Section 4975 of the Internal Revenue Code and Section
502(i) of ERISA).
(n) ERISA Liabilities. (i) Any Termination Event occurs which will or
is reasonably likely to subject Borrower, the REIT, any Material Subsidiary, any
Agreement Party, any ERISA Affiliate thereof or any of them to a liability
which Agent reasonably determines will have a Material Adverse Effect, (ii) the
plan administrator of any Benefit Plan applies for approval under Section 412(d)
of the Internal Revenue Code for a waiver of the minimum funding standards of
Section 412(a) of the Internal Revenue Code and Agent reasonably determines that
the business hardship upon which the Section 412(d) waiver request was based
will or would reasonably be anticipated to subject Borrower, the REIT, any
Material Subsidiary, any Agreement Party, or any ERISA Affiliate thereof or any
of them to a liability which Agent reasonably determines will have a Material
Adverse Effect; (iii) any Benefit Plan shall incur an "accumulated funding
deficiency" (as defined in Section 412 of the Internal Revenue Code or Section
302 of ERISA) for which a waiver shall not have been obtained in accordance with
the applicable provisions of the Internal Revenue Code or ERISA which
"accumulated funding deficiency" will or would reasonably be anticipated to
subject Borrower, the REIT, any Material Subsidiary, any Agreement Party, or
any ERISA Affiliate thereof or any of them to a liability which the Agent
reasonably determines will have a Material Adverse Effect; (iv) Borrower, the
REIT, any Material Subsidiary, any Agreement Party, or any ERISA Affiliate
thereof or any of them shall have engaged in a transaction which is prohibited
under Section 4975 of the Internal Revenue Code or Section 406 of ERISA which
will or would reasonably be anticipated to result in the imposition of a
liability on Borrower, the REIT, any Material Subsidiary, any Agreement Party,
or any ERISA Affiliate thereof or any of them which the Agent reasonably
determines will have a Material Adverse Effect; (v) Borrower, the REIT, any
Material Subsidiary, any Agreement Party, or any ERISA Affiliate thereof or any
of them shall fail to pay when due an amount which it shall have become liable
to pay to the PBGC, a Plan or a trust established under Title IV of ERISA which
failure will or would reasonably be anticipated to result in the imposition of a
liability on Borrower, the REIT, any Material Subsidiary, any Agreement Party,
or any ERISA Affiliate thereof or any of them which the Agent reasonably
determines will have a Material Adverse Effect; (vi) a condition shall exist by
reason of which the PBGC would be entitled to obtain a decree adjudicating that
a Benefit Plan must be terminated or have a trustee appointed to administer such
Plan which condition will or would reasonably be anticipated to result in the
imposition of a liability on Borrower, the REIT, any Material Subsidiary, any
Agreement Party, or any ERISA Affiliate thereof or any of them which the Agent
reasonably determines will have a Material Adverse Effect; (vii) a Lien shall be
imposed on any assets of Borrower, the REIT, any Material Subsidiary, any
Agreement Party, or any ERISA Affiliate thereof or any of them in favor of the
PBGC or a Plan which the Agent reasonably determines will have a Material
Adverse Effect; (viii) Borrower, the REIT, any Material Subsidiary, any
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Agreement Party, or any ERISA Affiliate thereof or any of them shall
suffer a partial or complete withdrawal from a Multiemployer Plan or shall be in
"default" (as defined in Section 4219(c)(5) of ERISA) with respect to payments
to a Multiemployer Plan resulting from a complete or partial withdrawal (as
described in Section 4203 or 4205 of ERISA) from such Multiemployer Plan which
will or would reasonably be anticipated to result in the imposition of a
liability on Borrower, the REIT, any Material Subsidiary, any Agreement Party,
or any ERISA Affiliate thereof or any of them which the Agent reasonably
determines will have a Material Adverse Effect; or (ix) a proceeding shall be
instituted by a fiduciary of any Multiemployer Plan against Borrower, the REIT,
any Material Subsidiary, any Agreement Party, or any ERISA Affiliate thereof or
any of them to enforce Section 515 of ERISA which will or would reasonably be
anticipated to result in the imposition of a liability on Borrower, the REIT,
any Material Subsidiary, any Agreement Party, or any ERISA Affiliate thereof or
any of them which the Agent reasonably determines will have a Material Adverse
Effect.
(o) Solvency. Borrower, any Agreement Party or the REIT shall cease to
be Solvent.
(p) Board of Directors. During any 12-month period, individuals who
were directors of the REIT on the first day of such period shall not constitute
a majority of the board of directors of the REIT.
(q) Revolving Credit Agreement. An "Event of Default" shall have
occurred under the Revolving Credit Agreement.
An Event of Default shall be deemed "continuing" until cured or waived
in writing in accordance with Section 11.05.
9.02 Rights and Remedies.
(a) Acceleration. Upon the occurrence of any Event of Default with
respect to Borrower described in the foregoing Section 9.01(g) or 9.01(h), the
unpaid principal amount of and any and all accrued interest on the Loan and all
of the other Obligations shall automatically become immediately due and payable,
with all additional interest from time to time accrued thereon and without
presentment, demand or protest or other requirements of any kind (including
without limitation diligence, presentment, notice of intent to demand or
accelerate or notice of acceleration), all of which are hereby expressly waived
by Borrower, and the obligations of Lenders to make, continue or convert any
Loan hereunder shall thereupon terminate; and upon the occurrence and during the
continuance of any other Event of Default, Agent shall, at the request of, or
may, with the consent of, Requisite Lenders, by written notice to Borrower,
declare the unpaid principal amount of and any and all accrued and unpaid
interest on the Loan and all of the other Obligations to be, and the same shall
thereupon be, immediately due and payable with all additional interest from time
to time accrued thereon and without presentment, demand, or protest or other
requirements of any kind (including without limitation diligence, presentment,
notice of intent to demand or accelerate and of acceleration), all of which are
hereby expressly
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waived by Borrower. Upon the occurrence of and during the continuance of an
Event of Default, no Agreement Party shall be permitted to make any
distributions or dividends without the prior written consent of Agent. Upon the
occurrence of an Event of Default or an acceleration of the Obligations, Agent
and Lenders may exercise all or any portion of the rights and remedies set forth
in the Loan Documents.
(b) Access to Information. Notwithstanding anything to the contrary
contained in the Loan Documents, upon the occurrence of and during the
continuance of an Event of Default, Agent shall be entitled to request and
receive, by or through Borrower or appropriate legal process, any and all
information concerning the REIT, Borrower, any Subsidiary of Borrower, any
Investment Affiliate, any Agreement Party, or any property of any of them, which
is reasonably available to or obtainable by Borrower.
(c) Waiver of Demand. Demand, presentment, protest and notice of
nonpayment are hereby waived by Borrower.
(d) Waivers, Amendments and Remedies. No delay or omission of Agent or
Lenders to exercise any right under any Loan Document shall impair such right or
be construed to be a waiver of any Event of Default or an acquiescence therein,
and any single or partial exercise of any such right shall not preclude other or
further exercise thereof or the exercise of any other right, and no waiver,
amendment or other variation of the terms, conditions or provisions of the Loan
Documents whatsoever shall be valid unless in a writing signed by Agent after
obtaining written approval thereof or the signature thereon of those Lenders
required to approve such waiver, amendment or other variation, and then only to
the extent in such writing specifically set forth. All remedies contained in the
Loan Documents or by law afforded shall be cumulative and all shall be available
to Agent and Lenders until the Obligations have been paid in full, the
Commitments have expired or terminated and this Agreement has been terminated.
9.03 Rescission. If at any time after acceleration of the maturity of
the Loan, Borrower shall pay all arrears of interest and all payments on account
of principal of the Loan which shall have become due otherwise than by
acceleration (with interest on principal and, to the extent permitted by law, on
overdue interest, at the rates specified in this Agreement) and all Events of
Default and Unmatured Events of Default (other than nonpayment of principal of
and accrued interest on the Loan due and payable solely by virtue of
acceleration) shall be remedied or waived pursuant to Section 11.05, then by
written notice to Borrower, Requisite Lenders may elect, in the sole discretion
of Requisite Lenders to rescind and annul the acceleration and its consequences;
but such action shall not affect any subsequent Event of Default or Unmatured
Event of Default or impair any right or remedy in connection therewith. The
provisions of the preceding sentence are intended merely to bind Lenders to a
decision which may be made at the election of Requisite Lenders; they are not
intended to benefit Borrower and do not give Borrower the right to require
Lenders to rescind or annul any acceleration hereunder, even if the conditions
set forth herein are met.
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ARTICLE X
AGENCY PROVISIONS
10.01 Appointment.
(a) Each Lender hereby designates and appoints Xxxxx Fargo as Agent
of such Lender under this Agreement and the Loan Documents, and each Lender
hereby irrevocably authorizes Agent to take such action on its behalf under the
provisions of this Agreement and the Loan Documents and to exercise such powers
as are set forth herein or therein, together with such other powers as are
reasonably incidental thereto. Agent agrees to act as such on the express
conditions contained in this Article X.
(b) The provisions of this Article X are solely for the benefit of
Agent and Lenders, and Borrower shall not have any rights to rely on or enforce
any of the provisions hereof. In performing its functions and duties under this
Agreement, Agent shall act solely as Agent of Lenders and does not assume and
shall not be deemed to have assumed any obligation toward or relationship of
agency or trust with or for Borrower.
10.02 Nature of Duties. Agent shall not have any duties or
responsibilities except those expressly set forth in this Agreement or in the
Loan Documents. The duties of Agent shall be administrative in nature. Subject
to the provisions of Sections 10.05 and 10.07, Agent shall administer the Loan
in the same manner as it administers its own loan. Agent shall not have by
reason of this Agreement a fiduciary relationship in respect of any Lender.
Nothing in this Agreement or any of the Loan Documents, expressed or implied, is
intended or shall be construed to impose upon Agent any obligation in respect of
this Agreement or any of the Loan Documents except as expressly set forth herein
or therein. Each Lender shall make its own independent investigation of the
financial condition and affairs of the REIT, Borrower, the Subsidiaries, the
Investment Affiliates, and each Agreement Party in connection with the making
and the continuance of the Loan hereunder and shall make its own assessment of
the creditworthiness of the REIT, Borrower, the Subsidiaries, the Investment
Affiliates, and each Agreement Party, and except as specifically provided
herein, Agent shall not have any duty or responsibility, either initially or on
a continuing basis, to provide any Lender with any credit or other information
with respect thereto, whether coming into its possession before the Closing Date
or at any time or times thereafter.
10.03 Loan Continuation/Conversion.
(a) Promptly after receipt of a Notice of Continuation/Conversion,
but in no event later than two (2) Business Days prior to the proposed
Continuation/Conversion Date for the continuation of a LIBOR Loan or the
conversion of a Base Rate Loan into a LIBOR Loan, Agent shall notify by
telecopy, each Lender of the proposed continuation or conversion and the
Continuation/Conversion Date set forth therein. Each Lender shall make
available to Agent (or the funding bank or entity designated by Agent), the
amount of such Lender's Pro Rata Share of
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the Loan Increase in immediately available funds not later the time designated
in Section 10.03(b). Unless Agent shall have been notified by any Lender prior
to such time for funding in respect of the Loan Increase that such Lender does
not intend to make available to Agent such Lender's Pro Rata Share of the Loan
Increase, Agent may assume that such Lender had made such amount available to
Agent and Agent, in its sole discretion, may, but shall not be obligated to,
make available to Borrower a corresponding amount. If such corresponding
amount is not in fact made available to Agent by such Lender on or prior to the
Closing Date, such lender agrees to pay to Agent forthwith on demand such
corresponding amount together with interest thereon, for each day from the date
such amount is made available to Borrower until the date such amount is paid or
repaid to Agent, at the Federal Funds Rate. If such Lender shall pay to Agent
such corresponding amount, such amount so paid shall constitute such Lender's
Pro Rata Share of the Loan Increase. If such Lender shall not pay to Agent such
corresponding amount after reasonable attempts are made by Agent to collect such
amounts from such Lender, Borrower agrees to repay to Agent forthwith on demand
such corresponding amount together with interest thereon, for each day from the
date such amount is made available to Borrower until the date such amount is
repaid to Agent, at the interest rate applicable thereto.
(b) Each Lender shall make the amount of its Pro Rata Share of the
Loan Increase available to Agent in Dollars and in immediately available funds,
to such bank and account, in El Segundo, California as Agent may designate, not
later than 9:00 A.M. (California time) on the Closing Date. Nothing in this
Section 10.03(b) shall be deemed to relieve any Lender of its obligation
hereunder to deliver its Pro Rata Share of the Loan Increase on the Closing
Date, nor shall any Lender be responsible for the failure of any other Lender to
perform its obligations to deliver its Pro Rata Share of the Loan Increase
hereunder, and the Commitment of any Lender shall not be increased or decreased
as a result of the failure by any other Lender to perform its obligation to
deliver Pro Rata Share of the Loan Increase are required by this Section 10.03.
10.04 Distribution and Apportionment of Payments. Payments actually
received by Agent for the account of Lenders shall be paid to them promptly
after receipt thereof by Agent, but in any event prior to 3:00 P.M. (California
time) on the day of receipt (if received by 11:00 A.M. (California time) on such
day), or within one (1) Business Day thereafter (if received after 11:00 A.M.
(California time) on the day of receipt), provided that Agent shall pay to such
Lenders interest thereon at the Federal Funds Rate from the Business Day on
which such funds are required to be paid to Lenders by Agent until such funds
are actually paid in immediately available funds to such Lenders. All payments
of principal and interest in respect of the outstanding Loan, all payments of
the fees described in this Agreement (other than agency and arrangement fees
described in Section 2.04(b)), and all payments in respect of any other
Obligations shall be allocated among such of Lenders as are entitled thereto, in
proportion to their respective Pro Rata Shares or otherwise as provided herein.
Agent shall promptly, but in any event within two (2) Business Days (with
interest thereon, if required pursuant to this Section 11.04(a)), distribute to
each Lender at its primary address set forth on the appropriate counterpart
signature page hereof or on the Assignment and Assumption, or at such other
address as a Lender may request in writing, such funds as it may be entitled to
receive, provided that
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Agent shall in any event not be bound to inquire into or determine the validity,
scope or priority of any interest or entitlement of any Lender and may suspend
all payments and seek appropriate relief (including without limitation
instructions from Requisite Lenders, or all Lenders, as applicable, or an action
in the nature of interpleader) in the event of any doubt or dispute as to any
apportionment or distribution contemplated hereby. The order of priority herein
is set forth solely to determine the rights and priorities of Lenders as among
themselves and may at any time or from time to time be changed by Lenders as
they may elect, in writing in accordance with Section 11.05, without necessity
of notice to or consent of or approval by Borrower or any other Person.
10.05 Rights, Exculpation, Etc. Neither agent, any Affiliate of Agent,
nor any of their respective officers, directors, employees, agents, attorneys or
consultants, shall be liable to any Lender for any action taken or omitted by
them hereunder or under any of the Loan Documents, or in connection herewith or
therewith, except that Agent shall be liable for its gross negligence or willful
misconduct in the performance of its express obligations hereunder. In the
absence of gross negligence or willful misconduct, Agent shall not be liable for
any apportionment or distribution of payments made by it in good faith pursuant
to Section 10.04, and if any such apportionment or distribution is subsequently
determined to have been made in error the sole recourse of any Person to whom
payment was due, but not made, shall be to recover from the recipients of such
payments any payment in excess of the amount to which they are determined to
have been entitled. Agent shall not be responsible to any Lender for any
recitals, statements, representations or warranties herein or for the execution,
effectiveness, genuineness, validity, enforceability, collectibility or
sufficiency of this Agreement, or any of the other Loan Documents, or any of the
transactions contemplated hereby and thereby; or for the financial condition of
the REIT, Borrower, any Subsidiary, any Investment Affiliate, or any Agreement
Party. Agent shall not be required to make any inquiry concerning either the
performance or observance of any of the terms, provisions or conditions of this
Agreement or any of the Loan Documents or the financial condition of the REIT,
Borrower, any Subsidiary, any Investment Affiliate, or any Agreement Party, or
the existence or possible existence of any Unmatured Event of Default or Event
of Default. Agent may at any time request instructions from Lenders with
respect to any actions or approvals which, by the terms of this Agreement or of
any of the Loan Documents, Agent is permitted or required to take or to grant
without instructions from any Lenders, and if such instructions are promptly
requested, Agent shall be absolutely entitled to refrain from taking any action
or to withhold any approval and shall not be under any liability whatsoever to
any Person for refraining from taking any action or withholding any approval
under any of the Loan Documents until it shall have received such instructions
from Requisite Lenders or Supermajority Lenders, as the case may be. Without
limiting the foregoing, no Lender shall have any right of action whatsoever
against Agent as a result of Agent acting or refraining from acting under this
Agreement or any of the other Loan Documents in accordance with the instructions
of Requisite Lenders, Supermajority Lenders or, where applicable, all Lenders.
Agent shall promptly notify each Lender at any time that the Requisite Lenders
or Supermajority Lenders, as the case may be, have instructed Agent to act or
refrain from acting pursuant hereto.
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10.06 Reliance. Agent shall be entitled to rely upon any written
notices, statements, certificates, orders or other documents, telecopies or any
telephone message believed by it in good faith to be genuine and correct and to
have been signed, sent or made by the proper Person and with respect to all
matters pertaining to this Agreement or any of the Loan Documents and its duties
hereunder or thereunder, upon advice of legal counsel (including counsel for
Borrower), independent public accountant and other experts selected by it.
10.07 Indemnification. To the extent that Agent is not reimbursed and
indemnified by Borrower, Lenders will reimburse, within ten (10) days after
notice from Agent, and indemnify Agent for and against any and all Liabilities
and Costs which may be imposed on, incurred by, or asserted against Agent (in
its capacity as Agent) in any way relating to or arising out of this Agreement
or any of the other Loan Documents or any action taken or omitted by Agent(in
its capacity as Agent) under this Agreement or any of the other Loan Documents,
in proportion to each Lender's Pro Rata Share, provided that no Lender shall be
liable for any portion of such Liabilities and Costs resulting from Agent's
gross negligence or willful misconduct, bad faith or fraud. The obligations of
Lenders under this Section 10.07 shall survive the payment in full of all
Obligations and the termination of this Agreement. In the event that after
payment and distribution of any amount by Agent to Lenders, any Lender or third
party, including Borrower, any creditor of Borrower or a trustee in bankruptcy,
recovers from Agent any amount found to have been wrongfully paid to Agent or
disbursed by Agent to Lenders, then Lenders, in proportion to their respective
Pro Rata Shares, shall reimburse Agent for all such amounts. Notwithstanding
the foregoing, Agent shall not be obligated to advance Liabilities and Costs and
may require the deposit by each Lender of its Pro Rata Share of any material
Liabilities and Costs anticipated by Agent before they are incurred or made
payable.
10.08 Agent Individually. With respect to its Pro Rata Share of the
Commitments hereunder and its Pro Rata share of the Loan, Agent shall have and
may exercise the same rights and powers hereunder and is subject to the same
obligations and liabilities as and to the extent set forth herein for any other
Lender. The terms "Lenders", "Requisite Lenders", "Supermajority Lenders", or
any similar terms may include Agent in its individual capacity as a Lender, one
of the Requisite Lenders or one of the Supermajority Lenders, but Requisite
Lenders and Supermajority Lenders shall not include Agent solely in its capacity
as Agent and need not necessarily include Agent in its capacity as a Lender.
Agent and its Affiliates may accept deposits from, lend money to, and generally
engage in any kind of banking, trust or other business with Borrower or any of
its Subsidiaries or Affiliates as if it were not acting as Agent pursuant
hereto.
10.09 Successor Agent; Resignation of Agent; Removal of Agent.
(a) Agent may resign from the performance of all its functions and
duties hereunder at any time by giving at least thirty (30) Business Days prior
written notice to Lenders and Borrower. For good cause, by a determination of
all the Lenders (excluding for such determination the Agent in its capacity as a
Lender), the Agent may be removed at any time by
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giving at least thirty (30) Business Days prior written notice to Agent and
Borrower. Such resignation or removal shall take effect upon the acceptance by a
successor Agent of appointment pursuant to clauses (b) and (c) below or as
otherwise provided below.
(b) Upon any such notice of resignation by or removal of Agent.
Requisite Lenders shall appoint a successor Agent with the consent of Borrower,
which shall not be unreasonably withheld or delayed (and which approval from
Borrower shall not be required upon the occurrence and during the continuance of
an Event of Default). Any successor Agent must be a bank (i) the senior debt
obligations of which (or such Bank's parent's senior debt obligations) are rated
not less than Baa-1 by Xxxxx'x or a comparable rating by a rating agency
acceptable to Requisite Lenders, (ii) which has total assets in excess of Ten
Billion Dollars ($10,000,000,000) and (iii) which is a Lender as of the date of
such succession holding a Commitment without participants equal to at least ten
percent (10%) of the Facility. Agent hereby agrees to remit to any successor
Agent, a pro rata portion of any annual agent's fee received by Agent, in
advance, for the one-year period covered by such agent's fee based upon the
portion of such year then remaining.
(c) If a successor Agent shall not have been so appointed within
said thirty (30) Business Day period, the retiring or removed Agent, with the
consent of Borrower, which may not be unreasonably withheld or delayed (and
which approval from Borrower shall not be required upon the occurrence and
during the continuance of an Event of Default), shall then appoint a successor
Agent who shall meet the requirements described in subsection (b) above and who
shall serve as Agent until such time, if any, as Requisite Lenders, with the
consent of Borrower, which may not be unreasonably withheld or delayed (and
which approval from Borrower shall not be required upon the occurrence and
during the continuance of an Event of Default), appoint a successor Agent as
provided above.
10.10 Consents and Approvals.
(a) Each Lender authorizes and directs Agent to enter into the
Loan Documents other than this Agreement for the benefit of Lenders. Each Lender
agrees that any action taken by Agent at the direction or with the consent of
Requisite Lenders or the Supermajority Lenders and any action taken by Agent not
requiring consent by Requisite Lenders, Supermajority Lenders, or all Lenders in
accordance with the provisions of this Agreement or any Loan Document, and the
exercise by Agent at the direction or with the consent of Requisite Lenders or
the Supermajority Lenders of the powers set forth herein or therein, together
with such other powers as are reasonably incidental thereto, shall be authorized
and binding upon all Lenders, except for actions specifically requiring the
approval of all Lenders. All communications from Agent to Lenders requesting
Lenders determination, consent, approval or disapproval (i) shall be given in
the form of a written notice to each Lender, (ii) shall be accompanied by a
description of the matter or item as to which such determination, approval,
consent or disapproval is requested. or shall advise each Lender where such
matter or item may be inspected, or shall otherwise describe the matter or issue
to be resolved. (iii) shall include, if reasonably requested by a Lender
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and to the extent not previously provided to such Lender, written materials and
a summary of all oral information provided to Agent by Borrower in respect of
the matter or issue to be resolved, and (iv) shall include Agent's recommended
course of action or determination in respect thereof. Each Lender shall reply
promptly, but in any event within fifteen (15) Business Days after receipt of
the request therefor from Agent (the "Lender Reply Period"). Unless a Lender
shall give written notice to Agent that it objects to the recommendation or
determination of Agent (together with a written explanation of the reasons
behind such objection) within the Lender Reply Period, such Lender shall be
deemed to have approved of or consented to such recommendation or determination.
With respect to decisions requiring the approval of Requisite Lenders,
Supermajority Lenders or all Lenders, Agent shall submit its recommendation or
determination for approval of or consent to such recommendation or determination
to all Lenders and upon receiving the required approval or consent shall follow
the course of action or determination recommended to Lenders by Agent or such
other course of action recommended by Requisite Lenders or Supermajority
Lenders, as the case may be, and each non-responding Lender shall be deemed to
have concurred with such recommended course of action. The following amendments,
modifications or waivers shall require the consent of the Requisite Lenders:
(i) Waiver of Sections 7.01(h) or 7.02(e),
(ii) Acceleration following an Event of Default pursuant to
Section 9.02(a) (except for any Event of Default pursuant to Sections 9.01(g)
or 9.01(h) or rescission of such acceleration pursuant to Section 9.03;
(iii) Approval of the exercise of remedies requiring the
consent of the Requisite Lenders under Section 9.02(a);
(iv) Appointment of a successor Agent in accordance with
Sections 10.09(b) and (c); or
(v) Disapproval of any Property as a Qualifying Unencumbered
Property.
(b) The consent of the Supermajority Lenders shall be required to
amend or modify Sections 8.01, 8.02, 8.03, 8.04, 8.05, 8.06, 8.07 or 9.01(a) or
to waive any requirement thereof or to amend or modify this Section 10.10(b).
(c) In addition to the required consents or approvals referred to
in Section 11.05, Agent may at any time request instructions from Requisite
Lenders with respect to any actions or approvals which, by the terms of this
Agreement or of any of the Loan Documents, Agent is permitted or required to
take or to grant without instructions from any Lenders, and if such
instructions are promptly requested, Agent shall be absolutely entitled to
refrain from taking any action or to withhold any approval and shall not be
under any liability whatsoever to any Person for refraining from taking any
action or withholding any approval under any of the Loan Documents until it
shall have received such instructions from Requisite Lenders. Without
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limiting the foregoing, no Lender shall have any right of action whatsoever
against Agent as a result of Agent acting or refraining from acting under this
Agreement, any of the other Loan Documents in accordance with the instructions
of Requisite Lenders or, where applicable, Supermajority Lenders or all Lenders.
Agent shall promptly notify each Lender at any time that the Requisite Lenders
or Supermajority Lenders have instructed Agent to act or refrain from acting
pursuant hereto.
10.11 Assignments and Participations.
(a) Subject to the provisions of Section 10.11(j) after first
obtaining the approval of Agent and Borrower, which approval will not be
unreasonably withheld (and which approval from Borrower shall not be required
upon the occurrence and during the continuance of an Event of Default), each
Lender may assign to one or more banks, finance companies, insurance or other
financial institutions all or a portion of its rights and obligations under this
Agreement in accordance with the provisions of this Section (including without
limitation all or a portion of its Commitment and the portion of the Loan owing
to it); provided, however, that (i) each such assignment shall be of a constant,
and not a varying, percentage of the assigning Lender's rights and obligations
under this Agreement and the assignment shall cover the same percentage of such
Lender's Commitment and the portion of the Loan owing to it, (ii) unless Agent
and Borrower otherwise consent (which consent of Borrower shall not be required
upon the occurrence and during the continuance of an Event of Default), the
aggregate amount of the Commitment of the assigning Lender being assigned to a
Person that is not already a Lender hereunder pursuant to each such assignment
(determined as of the date of the Assignment and Assumption with respect to such
assignment) shall in no event be less than Ten Million Dollars ($10,000,000) and
shall be an integral multiple of One Million Dollars ($1,000,000), (iii) the
parties to each such assignment shall execute and deliver to Agent, for its
approval and acceptance, an Assignment and Assumption and (iv) Agent shall
receive from the assignor or assignors for its sole account a processing fee of
Three Thousand Dollars ($3,000). Without restricting the right of agent or
Borrower to reasonably object to any bank, finance company, insurance or other
financial institution becoming an assignee of an interest of a Lender hereunder,
each proposed assignee must be an existing Lender or a bank, finance company,
insurance or other financial institution which (i) has (or, in the case of a
bank which is a subsidiary, such bank's parent has) a rating of its senior debt
obligations of not less than Baa-1 by Xxxxx'x or a comparable rating by a
rating agency acceptable to Agent and (ii) has total assets in excess of Ten
Billion Dollars ($10,000,000,000). Upon such execution, delivery, approval and
acceptance, and upon the effective date specified in the applicable Assignment
and Assumption. (A) the assignee thereunder shall be a party hereto and, to
the extent that rights and obligations hereunder have been validly and
effectively assigned to it pursuant to such Assignment and Assumption, have the
rights and obligations of a Lender hereunder and (B) the Lender-assignor
thereunder shall, to the extent that rights and obligations hereunder have
been validly and effectively assigned by it pursuant to such Assignment and
Assumption, relinquish its rights and be released from its obligations under
this Agreement.
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(b) By executing and delivering an Assignment and Assumption, the
Lender-assignor thereunder and the assignee thereunder confirm to and agree with
each other and the other parties hereto as follows: (i) other than as provided
in such Assignment and Assumption, such assigning Lender makes no representation
or warranty and assumes no responsibility with respect to any statements,
warranties or representations made in or in connection with this Agreement or
any other Loan Document or the execution, legality, validity, enforceability,
genuineness, sufficiency or value of this Agreement or any other Loan Document
or any other instrument or document furnished pursuant hereto; (ii) such
assigning Lender makes no representation or warranty and assumes no
responsibility with respect to the financial condition of the REIT, Borrower,
any Subsidiary, any Investment Affiliate, or any Agreement Party or the
performance or observance by the REIT, Borrower, any Subsidiary, any Investment
Affiliate, or any Agreement Party of any of their respective obligations under
any Loan Document or any other instrument or document furnished pursuant hereto;
(iii) such assignee confirms that it has received a copy of this Agreement,
together with copies of the financial statements referred to in Article V or
delivered pursuant to Article V to the date of such assignment and such other
Loan Documents and other documents and information as it has deemed appropriate
to make its own credit analysis and decision to enter into such Assignment and
Assumption; (iv) such assignee will, independently and without reliance upon
Agent, such assigning Lender 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 decisions in taking or not taking action under this Agreement; (v) such
assignee appoints and authorizes Agent to take such action as Agent on its
behalf and to exercise such powers under this Agreement and the other Loan
Documents as are delegated to Agent by the terms hereof and thereof, together
with such powers as are reasonably incidental thereto; and (vi) such assignee
agrees that it will perform in accordance with their terms all of the
obligations which by the terms of this Agreement are required to be performed by
it as a Lender.
(c) Agent shall maintain at its address referred to on the
counterpart signature pages hereof a copy of each Assignment and Assumption
delivered to and accepted by it and shall record the names and addresses of
each lender and the Commitment of, and principal amount of the Loan owing to,
such Lender from time to time. Borrower, Agent and Lenders may treat each Person
whose name is so recorded as a Lender hereunder for all purposes of this
Agreement.
(d) Upon its receipt of an Assignment and Assumption executed by
an assigning Lender and an assignee, Agent shall, if such Assignment and
Assumption has been properly completed and is in substantially the form of
Exhibit A, (i) accept such Assignment and Assumption, (ii) record the
information contained therein and (iii) give prompt notice thereof to Borrower.
Upon request, Borrower will execute and deliver to Agent an appropriate
replacement promissory note or replacement promissory notes in favor of each
assignee (and assignor, if such assignor is retaining a portion of its
Commitment and the Loan) reflecting such assignee's (and assignor is retaining a
portion of its Commitment and the Loan) reflecting such assignee's (and
assignor's) Pro Rata Share(s) of the Facility. Upon execution and delivery of
such replacement
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promissory notes, the original promissory note or notes evidencing all or a
portion of the Commitment and the Loan being assigned shall be canceled and
returned to Borrower.
(e) Subject to the provisions of Section 10.11(j), each Lender may
sell participations to one or more banks, finance companies, insurance or other
financial institutions in or to all or a portion of its rights and obligations
under this Agreement (including without limitation all or a portion of its
Commitment and the portion of the Loan owing to it); provided, however, that (i)
such Lender's obligations under this Agreement (including without limitation its
Commitment to Borrower hereunder) shall remain unchanged, (ii) such Lender shall
remain solely responsible to the other parties hereto for the performance of
such obligations, (iii) Borrower, Agent and the other Lenders shall continue to
deal solely and directly with such Lender in connection with such Lender's
rights and obligations under this Agreement and with regard to any and all
payments to be made under this Agreement and (iv) the holder of any such
participation shall not be entitled to voting rights under this Agreement except
that such Participant may have the contractual right in the applicable
participation agreement to prevent (A) increases in the Facility, (B) extensions
of the Termination Date and (C) decreases in the interest rates described in
this Agreement.
(f) Borrower will use reasonable efforts to cooperate with Agent
and Lenders in connection with the assignment of interests under this Agreement
or the sale of participations herein.
(g) Anything in this Agreement to the contrary notwithstanding,
and without the need to comply with any of the formal or procedural requirements
of this Agreement, including Section 10.11, any Lender may at any time and from
time to time pledge and assign all or any portion of its rights under all or any
of the Loan Documents to a Federal Reserve Bank; provided that no such pledge or
assignment shall release such Lender from its obligations thereunder. To
facilitate any such pledge or assignment, Agent shall, at the request of such
Lender, enter into a letter agreement with the Federal Reserve Bank in, or
substantially in, the form of the exhibit to Appendix C to the Federal Reserve
Bank of New York Operating Circular No 12.
(h) Anything in this Agreement to the contrary notwithstanding,
any Lender may assign all or any portion of its rights and obligations under
this Agreement to a Lender Affiliate of such Lender without first obtaining the
approval of Agent and Borrower, provided that (i) such assigning Lender is not
released from any obligations hereunder unless the assignee has total assets in
excess of Ten Billion Dollars ($10,000,000,000), (ii) such Lender gives Agent
and Borrower at least fifteen (15) days prior written notice of any such
assignment; (iii) the parties to each such assignment execute and deliver to
Agent an Assignment and Assumption, and (iv) Agent receives from assignor for
its sole account a processing fee of Three Thousand Dollars ($3,000).
(i) No Lender shall be permitted to assign or sell all or any
of its rights and obligations under this Agreement to Borrower or any portion
Affiliate of Borrower.
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(j) Anything in this Agreement to the contrary notwithstanding, so
long as no Event of Default shall have occurred and be continuing, no Lender
shall be permitted to enter into an assignment of, or sell a participation
interest in, its rights and obligations hereunder which would result in such
Lender holding a Commitment without participants of less than Ten Million
Dollars ($10,000,000). In the event Agent ceases to hold a Commitment without
participants of less than ten percent (10%) of the Facility, Agent shall resign
from the performance of all of its functions and duties hereunder; provided,
however, that no such resignation shall be required during the continuance of an
Event of Default.
(k) By its execution of this Agreement, each of the Lenders hereby
assigns and sells to the other Lenders accepting the same as set forth below,
without recourse, representation or warranty (except as expressly provided
herein), that portion of its Existing Pro Rata Share of the Existing Loan which
is in excess of its Pro Rata Share of the Existing Loan (collectively, the
"Excess Loan Amount"). By execution of this Agreement, each Lender whose Pro
Rata Share of the Existing Loan exceeds its Existing Pro Rata Share of the
Existing Loan hereby accepts the portion of the Excess Loan Amount which is
equal to the amount of such excess. Each assigning Lender hereby represents and
warrants that it is the legal and beneficial owner of the interests being
assigned by it in accordance with this Section 10.11 (k) and that such
interests are free and clear of any adverse claim.
10.12 Ratable Sharing. Subject to Sections 10.03 and 10.04,
Lenders agree among themselves that (i) with respect to all amounts received by
them which are applicable to the payment of the Obligations, equitable
adjustment will be made so that, in effect, all such amounts will be shared
among them ratably in accordance with their Pro Rata Shares, whether received by
voluntary payment, by the exercise of the right of set-off or banker's lien, by
counterclaim or cross action or by the enforcement of any or all of the
Obligations, (ii) if any of them shall by voluntary payment or by the exercise
of any right of counterclaim, set-off, banker's lien or otherwise, receive
payment of a proportion of the aggregate amount of the Obligations held by it
which is greater than its Pro Rata Share of the payments on account of the
Obligations, the one receiving such excess payment shall purchase, without
recourse or warranty, an undivided interest and participation (which it shall be
deemed to have done simultaneously upon the receipt of such payment) in such
Obligations owed to the others so that all such recoveries with respect to such
Obligations shall be applied ratably in accordance with their Pro Rata Shares;
provided, that if all or part of such excess payment received by the purchasing
party is thereafter recovered from it, those purchases shall be rescinded and
the purchase prices paid for such participations shall be returned to that party
to the extent necessary to adjust for such recovery, but without interest except
to the extent the purchasing party is required to pay interest in connection
with such recovery. Borrower agrees that any Lender so purchasing a
participation from another Lender pursuant to this Section 10.12 may, to the
fullest extent permitted by law, exercise all its rights of payment (including,
subject to Section 11.04, the right of set-off) with respect to such
participation as fully as if such Lender were the direct creditor of Borrower in
the amount of such participation.
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10.13 Delivery of Documents. Agent shall as soon as reasonably
practicable distribute to each Lender at its primary address set forth on the
appropriate counterpart signature page hereof or at such other address as a
Lender may request in writing, (i) all documents to which such Lender is a party
or of which such Lender is a beneficiary set forth on the Closing Checklist
attached hereto as Exhibit B and (ii) all documents of which Agent receives
copies from Borrower for distribution to Lenders pursuant to Sections 5.01 and
11.07. In addition, within ten (10) Business Days after receipt of a request in
writing from a Lender for written information or documents provided by or
prepared by Borrower, the REIT or any Agreement Party, Agent shall deliver such
written information or documents to such requesting Lender if Agent has
possession of such written information or documents in its capacity as Agent or
as a Lender.
10.14 Notice of Events of Default. Except as expressly provided
in this Section 10.14, Agent shall not be deemed to have knowledge or notice of
the occurrence of any Unmatured Event of Default or Event of Default (other than
nonpayment of principal of or interest on the Loan) unless Agent has received
notice in writing from a Lender or Borrower referring to this Agreement or the
other Loan Documents, describing such event or condition and expressly stating
that such notice is a notice of an Unmatured Event of Default or Event of
Default. Should Agent receive such notice of the occurrence of an Unmatured
Event of Default or Event of Default, or should Agent send Borrower a notice of
Unmatured Event of Default or Event of Default, Agent shall promptly give
notice thereof to each Lender.
ARTICLE XI
MISCELLANEOUS
11.01 Expenses.
(a) Generally. Borrower agrees, within thirty (30) days after
receipt of a written notice from the Agent, to pay or reimburse Agent for all
of Agent's reasonable costs and expenses incurred by Agent at any time (whether
prior to, on or after the date of this Agreement) in connection with: (A) the
negotiation, preparation and execution of this Agreement and the other Loan
Documents and any amendments or waivers with respect hereto requested by
Borrower, including, without limitation, the reasonable fees, expenses and
disbursements of Agent's outside counsel incurred in connection therewith; (B)
the making of the Loan Increase and (C) the collection or enforcement by Agent
of any of the Obligations, including, without limitation, reasonable attorneys'
fees and costs incurred in connection therewith.
(b) After Event of Default. Borrower further agrees to pay, or
reimburse Agent and Lenders, for all reasonable costs and expenses, including
without limitation reasonable attorneys' fees and disbursements incurred by
Agent or Lenders after the occurrence of an Event of Default (i) in enforcing
any Obligation or exercising or enforcing any other right or remedy available by
reason of such Event of Default; (ii) in connection with any refinancing or
restructuring of the credit arrangements provided under this Agreement in the
nature of a
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"work-out" or in any insolvency or bankruptcy proceeding; (iii) in commencing,
defending or intervening in any litigation or in filing a petition, complaint,
answer, motion or other pleadings in any legal proceeding relating to Borrower,
the REIT or any Agreement Party and related to or arising out of the
transactions contemplated hereby; (iv) in taking any other action in or with
respect to any suit or proceeding (whether in bankruptcy or otherwise); or (v)
attempting to enforce or enforcing any rights under the Loan Documents;
provided, however, that the attorneys' fees and disbursements for which Borrower
is obligated under this subsection (b) shall be limited to the reasonable
non-duplicative fees and disbursements of counsel for Agent and counsel for all
Lenders as a group. For purposes of this Section 11.01(b), (i) counsel for
Agent shall mean a single outside law firm representing Agent plus any
additional law firms providing special local law representation in connection
with the enforcement of the Loan Documents, and (ii) counsel for all Lenders as
a group shall mean a single outside law firm representing such Lenders as a
group.
11.02 Indemnity.
(a) Generally. Borrower shall indemnify and defend Agent and each
Lender and their respective affiliates, participants, officers, directors,
employees and agents (each an "Indemnitee") against, and shall hold each such
Indemnitee harmless from, any and all losses, damages (whether general, punitive
or otherwise), liabilities, claims, causes of action (whether legal, equitable
or administrative), judgments, court costs and legal or other expenses
(including reasonable attorneys' fees) which such Indemnitee may suffer or
incur: (i) in connection with claims made by third parties against such
Indemnitee for losses or damages suffered by such third party as a result of (A)
such Indemnitee's performance of this Agreement or any of the other Loan
Documents, including without limitation such Indemnitee's exercise or failure to
exercise any rights, remedies or powers in connection with this Agreement or any
of the other Loan Documents or (B) the failure by Borrower, the REIT or any
Agreement Party to perform any of their respective obligations under this
Agreement or any of the other Loan Documents as and when required hereby or
thereby, including without limitation any failure of any representation or
warranty of Borrower, the REIT or any Agreement Party to be true and correct;
(ii) in connection with any claim or cause of action of any kind by any Person
to the effect that such Indemnitee is in any way responsible or liable for any
act or omission by Borrower, the REIT or any Agreement Party, whether on account
of any theory of derivative liability or otherwise, (iii) in connection with the
past, present or future environmental condition of any Property owned by
Borrower, the REIT, Subsidiary or any Agreement Party, the presence of
asbestos-containing materials at any such Property, the presence of Contaminants
in groundwater at any such Property, or the Release or threatened Release of any
Contaminant into the environment from any such Property; or (iv) in connection
with any claim or cause of action of any kind by any Person which would have the
effect of denying such Indemnitee the full benefit or protection of any
provision of this Agreement or any of the other Loan Documents.
(b) ERISA. Without limitation of the provisions of subsection (a)
above, Borrower shall indemnify and hold each Indemnitee free and harmless from
and against all loss.
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costs (including reasonable attorneys' fees and expenses), expenses, taxes, and
damages (including consequential damages) such Indemnitee may suffer or incur by
reason of the investigation, defense and settlement of claims and in obtaining
any prohibited transaction exemption under ERISA or the Internal Revenue Code
necessary in such Indemnitee's reasonable judgment by reason of the inaccuracy
of the representations and warranties set forth in the first paragraph of
Section 4.01(s) or a breach of the provisions set forth in the last paragraph of
Section 7.01(f)
(c) Exceptions; Limitations. Notwithstanding anything to the
contrary set forth in this Section 11.02, Borrower shall have no obligation to
any Indemnitee hereunder with respect to (i) any intentional tort, fraud or act
of gross negligence or bad faith which any Indemnitee is personally determined
by the judgment of a court of competent jurisdiction (sustained on appeal, if
any) to have committed, (ii) any liability of such Indemnitee to any third part
based upon contractual obligations of such Indemnitee owing to such third party
which are not expressly set forth in the Loan Documents or (iii) violations of
Environmental Laws relating to a Property which are caused by the act or
omission of such Indemnitee after such Indemnitee takes possession of such
Property and which would not have occurred if such Indemnitee had exercised
reasonable care under the circumstances. In addition, the indemnification set
forth in this Section 11.02 in favor of any officer, director, partner, employee
or agent of Agent or any Lender shall be solely in their respective capacities
as such officer, director, partner, employee or agent. Such indemnification in
favor of any affiliate of Agent or any Lender shall be solely in its capacity as
the provider of services to Agent or such Lender in connection with this
Agreement, and such indemnification in favor of any participant of Agent or any
Lender shall be solely in its capacity as a participant in the Commitments and
the Loan.
(d) Payment: Survival. Borrower shall pay any amount owing under
this Section 11.02 within thirty (30) days after written demand therefor by the
applicable Indemnitee together with reasonable supporting documentation
therefor. The indemnity set forth in this Section 11.02 shall survive the
payment of all amounts payable pursuant to, and secured by, this Agreement and
the other Loan Documents. Payment by any Indemnitee shall not be a condition
precedent to the obligations of Borrower under this Section 11.02. To the extent
that any indemnification obligation set forth in this Section 11.02 may be
unenforceable because it is violative of any law or public policy, Borrower
shall contribute the maximum portion which it is permitted to pay and satisfy
under applicable law, to the payment and satisfaction of the applicable
indemnified matter.
11.03 Change in Accounting Principles. Except as otherwise
provided herein, if any changes in accounting principles from those used in the
preparation of the most recent financial statements delivered to Agent pursuant
to the terms hereof are hereinafter required or permitted by the rules,
regulations, pronouncements and opinions of the Financial Accounting Standards
Board or the American Institute of Certified Public Accountants (or successors
thereto or agencies with similar functions) and are adopted by the REIT.
Borrower, any Subsidiary, any Investment Affiliate, or any Agreement Party with
the agreement of its independent certified
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public accountants and such changes result in a change in the method of
calculation of any of the financial covenants, standards or terms found herein,
the parties hereto agree to enter into negotiations in order to amend such
provisions so as to equitably reflect such changes with the desired result that
the criteria for evaluating the financial condition of the REIT, on a
consolidated basis, shall be the same after such changes as if such changes had
not been made: provided however, that no change in GAAP that would affect the
method of calculation of an), of the financial covenants, standards or terms
shall be given effect in such calculations until such provisions are amended, in
a manner satisfactory to Agent and all Lenders, to so reflect such change in
accounting principles.
11.04 Setoff. In addition to any Liens granted to Agent and any
rights now or hereafter granted under applicable law and not by way of
limitation of any such Lien or rights, upon the occurrence and during the
continuance of any Event of Default, Agent and each Lender are hereby authorized
by Borrower at any time or from time to time, with concurrent notice to
Borrower, or to any other Person (any such notice being hereby expressly waived)
to set off and to appropriate and to apply any and all deposits (general or
special, including, but not limited to, indebtedness evidenced by certificates
of deposit, whether matured or unmatured but not including trust accounts) and
any other indebtedness at any time held or owing by Agent or such Lender solely
to or for the credit or the account of Borrower against and on account of the
Obligations of Borrower to Agent or such Lender including but not limited to the
Loan and all claims of any nature or description arising out of or connected
with this Agreement or any of the other Loan Documents, irrespective of whether
or not (a) Agent or such Lender shall have made any demand hereunder or (b)
Agent shall have declared the principal of and interest on the Loan and other
amounts due hereunder to be due and payable as permitted by Article X and
although said obligations and liabilities, or any of them, may be contingent or
unmatured.
11.05 Amendments and Waivers. No amendment or modification of any
provision of this Agreement shall be effective without the written agreement of
Requisite Lenders (after notice to all Lenders) as provided in Section 10.10(a)
and Borrower (provided that the agreement of Requisite Lenders shall not be
required for amendments or modifications that are purely of a clerical nature or
that correct a manifest error), and no termination or waiver of any such
provision of this Agreement (including without limitation any waiver of an Event
of Default which does not specifically require the consent of all Lenders), or
consent to any departure by Borrower therefrom, shall in any event be effective
without the written concurrence of Requisite Lenders (after notice to all
Lenders) as provided in Section 10.10(a), which Requisite Lenders shall have
the right to grant or withhold at their sole discretion, except that the
amendments, modifications or waivers specified in Section 10.10(b) shall require
the consent of the Supermajority Lenders and the following amendments,
modifications or waivers shall require the consent of all Lenders (other than
Section 11.05(i) which shall require the consent of all Lenders other than
Agent):
(a) Increasing the Facility:
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(b) Changing the principal amount or final maturity of the Loan;
(c) Reducing or increasing the interest rates applicable to the
Loan:
(d) Reducing the rates on which fees payable pursuant hereto are
determined:
(e) Forgiving or delaying any amount payable under Article II
(other than late fees);
(f) Changing the definition of "Requisite Lenders," "Supermajority
Lenders," or "Pro Rata Shares";
(g) Changing any provision contained in Section 11.05;
(h) Releasing any obligor under any Loan Document, unless such
release is otherwise required by the terms of this Agreement or any other Loan
Document;
(i) Removal of Agent for good cause in accordance with Section
10.09(a); and
(j) Modifying or waiving any other provision herein which
specifically requires the consent of all Lenders.
Notwithstanding anything to the contrary contained in this Agreement, Borrower
shall have no right to consent to any amendment, modification, termination or
waiver of any provision of Article X hereof; provided, however, that no
amendment, modification, termination or waiver of Section 10.09(b), 10.09(c),
10.10(a), or 10.11 (except subsection (i) thereof) which has an adverse effect
on Borrower or Borrower's rights hereunder shall be effective without the
written concurrence of Borrower. Agent and Lenders further acknowledge and agree
that the remaining provisions of Article X are intended to and shall continue to
address only the rights and obligations of Agent and Lenders amongst each other
and do not and shall not impose obligations or restrictions upon Borrower or
result in any way in the loss of any rights, claims or defenses of borrower. No
amendment, modification, termination or waiver of any provision of Article X
hereof or any other provision referring to any Agent shall be effective without
the written concurrence of the Agent. Any waiver or consent shall be effective
only in the specific instance and for the specific purpose for which it was
given. No notice to or demand on Borrower in any case shall entitle Borrower to
any other further notice or demand in similar or other circumstances. Any
amendment, modification, termination, waiver or consent effected in accordance
with this Section shall be binding on each assignee, transferee or recipient of
Agent's powers, functions or duties or any Lender's Commitment under this
Agreement or the Loan at the time outstanding.
11.06 Independence of Covenants. All covenants hereunder shall be
given independent effect so that if a particular action or condition is not
permitted by any of such covenants, the fact that it would be permitted by an
exception to, or be otherwise within the
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limitations of another covenant shall not avoid the occurrence of an Event of
Default or Unmatured Event of Default if such action is taken or condition
exists.
11.07 Notices and Delivery. Unless otherwise specifically provided
herein, any consent, notice or other communication herein required or permitted
to be given shall be in writing and may be personally served, telecopied or sent
by courier service or United States mail and shall be deemed to have been given
when delivered in person or by courier service, upon receipt of a telecopy or if
deposited in the United States mail (registered or certified, with postage
prepaid and properly addressed) upon receipt or refusal to accept delivery.
Notices to Agent shall not be effective until received by Agent. For the
purposes hereof, the addresses of the parties hereto (until notice of a change
thereof is delivered as provided in this Section 11.07) shall be as set forth
below each party's name on the signature pages hereof, or, as to each party, at
such other address as may be designated by such party in a written notice to all
of the other parties. All deliveries to be made to Agent for distribution to the
Lenders shall be made to Agent at the addresses specified for notice on the
signature page hereto and, in addition. a sufficient number of copies of each
such delivery shall be delivered to Agent for delivery to each Lender at the
address specified for deliveries on the signature page hereto or such other
address as may be designated by Agent or Lenders in a written notice.
11.08 Survival of Warranties, Indemnities and Agreements. All
agreements, representations, warranties and indemnities made or given herein or
pursuant hereto shall survive the execution and delivery of this Agreement and
the other Loan Documents and the making and repayment of the Loan hereunder and
such indemnities shall survive termination hereof.
11.09 Failure or Indulgence Not Waiver; Remedies Cumulative.
Except as otherwise expressly provided in this Agreement or any other Loan
Document, no failure or delay on the part of Agent or any Lender in the exercise
of any power, right or privilege under any of the Loan Documents shall impair
such power, right or privilege or be construed to be a waiver of any default or
acquiescence therein nor shall any single or partial exercise of any such power,
right or privilege preclude other or further exercise thereof or of any other
right, power or privilege. All rights and remedies existing under the Loan
Documents are cumulative to and not exclusive of any rights or remedies
otherwise available.
11.10 Marshaling; Recourse to Security; Payments Set Aside.
Neither any Lender nor Agent shall be under any obligation to xxxxxxxx any
assets in favor of Borrower or any other party or against or in payment of any
or all of the Obligations. Recourse to security shall not be required at any
time. To the extent that Borrower makes a payment or payments to Agent or the
Lenders or Agent or the Lenders exercise their rights of set off, and such
payment or payments or the proceeds of such enforcement or set off or any part
thereof are subsequently invalidated, declared to be fraudulent or preferential,
set aside and/or required to be repaid to a trustee, receiver or any other party
under any bankruptcy law, state or federal law, common law or equitable cause,
then to the extent of such recovery the Obligations or part thereof originally
intended to be satisfied, and all rights and remedies therefor, shall be revived
and continued in
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full force and effect as if such payment had not been made or such enforcement
or set off had not occurred.
11.11 Severability. In case any provision in or obligation under
this Agreement or the other Loan Documents shall be invalid, illegal or
unenforceable in any jurisdiction, the validity, legality and enforceability of
the remaining provisions or obligations, or of such provision or obligation in
any other jurisdiction, shall not in any way be affected or impaired thereby.
11.12 Headings. Section headings in this Agreement are included
herein for convenience of reference only and shall not constitute a part of this
Agreement for any other purpose or be given any substantive effect.
11.13 Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY, AND
SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF
ILLINOIS WITHOUT REGARD TO CONFLICT OF LAW PRINCIPLES.
11.14 Limitation of Liability. To the extent permitted by
applicable law, no claim may be made by Borrower, the REIT, any Lender or any
other Person against Agent or any Lender, or the affiliates, directors,
officers, employees, attorneys or agents of any of them, for any punitive
damages in respect of any claim for breach of contract or any other theory of
liability arising out of or related to the transactions contemplated by this
Agreement, or any act, omission or event occurring in connection therewith; and
Borrower, the REIT and each Lender hereby waive, release and agree not to xxx
upon any claim for any such damages, whether or not accrued and whether or not
known or suspected to exist in its favor.
11.15 Successors and Assigns. This Agreement and the other Loan
Documents shall be binding upon the parties hereto and their respective
successors and permitted assigns and shall inure to the benefit of the parties
hereto and the successors and permitted assigns of Agent and Lenders. The terms
and provisions of this Agreement shall inure to the benefit of any permitted
assignee or transferee of the Loan and the Commitments of Lenders under this
Agreement, and in the event of such transfer or assignment, the rights and
privileges herein conferred upon Agent and Lenders shall automatically extend to
and be vested in such transferee or assignee, all subject to the terms and
conditions hereof. Borrower's rights or any interest therein hereunder, and
Borrower's duties and obligations hereunder, shall not be assigned (whether
directly, indirectly, by operation of law or otherwise) without the consent of
all Lenders.
11.16 Usury Limitation. Each Loan Document is expressly limited
so that in no contingency or event whatsoever, whether by reason of error of
fact or law, payment, prepayment or advancement of the proceeds of Loan,
acceleration of maturity of the unpaid principal balance of the Loan, or
otherwise, shall the amount paid or agreed to be paid to Lenders for the use,
forbearance, or retention of money, including any fees or charges collected or
made in connection with the Loan which may be treated as interest under
applicable law, if any, exceed
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the maximum legal limit (if any such limit is applicable) under United States
federal laws or state laws (to the extent not preempted by federal law, if any),
now or hereafter governing the interest payable under such Loan Documents. If,
from any circumstances whatsoever, fulfillment of any provision hereof or any of
the other Loan Documents at the time performance of such provision shall be due,
shall involve transcending the limit of validity (if any) prescribed by law
which a court of competent jurisdiction may deem applicable hereto, then ipso
facto, the obligation to be fulfilled shall be reduced to the limit of such
validity, and if from any circumstances Lenders shall ever receive as interest
an amount which would exceed the maximum legal limit (if any, such limit is
applicable), such amount which would be excessive interest shall be applied to
the reduction of the unpaid principal balance due under the Loan Documents and
not to the payment of interest or, if necessary, to Borrower. Notwithstanding
any other provision of this Agreement or any of the other Loan Documents, this
provision shall control every other provision of all Loan Documents.
11.17 Confidentiality. Agent and Lenders shall use reasonable
efforts to assure that any information about Borrower, the REIT, Subsidiaries
and Investment Affiliates (and their respective Properties) not generally
disclosed to the public which is furnished to Agent or Lenders pursuant to the
provisions of this Agreement or any of the other Loan Documents is used only for
the purposes of this Agreement and the other Loan Documents and shall not be
divulged to any other Person other than Agent, Lenders and their respective
affiliates, officers, directors, employees and agents who are actively and
directly participating in the evaluation, administration or enforcement of the
Obligations; provided, however, that nothing herein shall affect the disclosure
of any such information (i) to the extent required by statute, rule, regulation
or judicial process, (ii) to counsel for Agent or Lenders or to their
accountants, (iii) to bank examiners and auditors, (iv) to any transferee or
participant or prospective transferee or participant hereunder who agrees to be
bound by this provision, (v) in connection with the enforcement of the rights of
Agent and Lenders under this Agreement and the other Loan Documents, or (vi) in
connection with any litigation to which Agent or any Lender is a party so long
as Agent or such Lender provides Borrower with prior written notice of the need
for such disclosure and exercises reasonable efforts to obtain a protective
order with respect to such information from the court or other tribunal before
which such litigation is pending.
11.18 CONSENT TO JURISDICTION AND SERVICE OF PROCESS, WAIVER OF
JURY TRIAL, WAIVER OF PERMISSIVE COUNTERCLAIMS. ALL JUDICIAL PROCEEDINGS BROUGHT
AGAINST BORROWER OR THE REIT WITH RESPECT TO THIS AGREEMENT OR ANY OTHER LOAN
DOCUMENT MAY BE AND ALL JUDICIAL PROCEEDINGS BROUGHT BY BORROWER OR THE REIT
WITH RESPECT TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT SHALL BE BROUGHT IN
ANY STATE OR FEDERAL COURT OF COMPETENT JURISDICTION HAVING SITUS WITHIN THE
BOUNDARIES OF THE FEDERAL COURT DISTRICT OF THE NORTHERN DISTRICT OF ILLINOIS,
AND BY EXECUTION AND DELIVERY OF THIS AGREEMENT, BORROWER AND THE REIT ACCEPT.
FOR ITSELF AND IN CONNECTION WITH ITS PROPERTIES, GENERALLY AND UNCONDITIONALLY,
THE
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JURISDICTION OF THE AFORESAID COURTS, AND IRREVOCABLY AGREE TO BE BOUND BY ANY
FINAL JUDGMENT RENDERED THEREBY FROM WHICH NO APPEAL HAS BEEN TAKEN OR IS
AVAILABLE. BORROWER AND THE REIT HEREBY DESIGNATE AND APPOINT XXXXX XXXXXXXX,
ESQ., MANUFACTURED HOME COMMUNITIES, INC., XXX XXXXX XXXXXXXXX XXXXX, XXXXX 000,
XXXXXXX, XXXXXXXX 00000, TO RECEIVE ON THEIR BEHALF SERVICE OF ALL PROCESS IN
ANY SUCH PROCEEDINGS IN ANY SUCH COURT, SUCH SERVICE BEING HEREBY ACKNOWLEDGED
BY SUCH PERSON TO BE EFFECTIVE AND BINDING SERVICE IN EVERY RESPECT. SUCH
APPOINTMENT SHALL BE REVOCABLE ONLY WITH AGENT'S PRIOR WRITTEN APPROVAL.
BORROWER AND THE REIT IRREVOCABLY CONSENT TO THE SERVICE OF PROCESS OF ANY OF
THE AFOREMENTIONED COURTS IN ANY SUCH ACTION OR PROCEEDING BY THE MAILING OF
COPIES THEREOF BY REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, TO ITS
RESPECTIVE NOTICE ADDRESS SPECIFIED ON THE SIGNATURE PAGES HEREOF. SUCH SERVICE
TO BECOME EFFECTIVE UPON RECEIPT. BORROWER, THE REIT, AGENT AND LENDERS
IRREVOCABLY WAIVE (A) TRIAL BY JURY IN ANY ACTION OR PROCEEDING WITH RESPECT TO
THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, AND (B) ANY OBJECTION (INCLUDING
WITHOUT LIMITATION ANY OBJECTION OF 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 WITH RESPECT TO THIS AGREEMENT OR ANY OTHER LOAN
DOCUMENT IN ANY JURISDICTION SET FORTH ABOVE. NOTHING HEREIN SHALL AFFECT THE
RIGHT TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR SHALL LIMIT THE
RIGHT OF AGENT OR ANY LENDER TO BRING PROCEEDINGS AGAINST BORROWER IN THE COURTS
OF ANY OTHER JURISDICTION. BORROWER AND THE REIT AGREE THAT THEY WILL NOT ASSERT
ANY PERMISSIVE COUNTERCLAIM IN ANY PROCEEDING BROUGHT BY LENDER WITH RESPECT TO
THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT.
11.19 Counterparts; Effectiveness; Inconsistencies. This Agreement
and any amendments, waivers, consents or supplements may be executed in
counterparts, each of which when so executed and delivered shall be deemed an
original, but all such counterparts together shall constitute but one and the
same instrument. This Agreement shall become effective when Borrower, the
initial Lenders and Agent have duly executed and delivered counterpart execution
pages of this Agreement to each other (delivery by Borrower and the REIT to
Lenders and by any Lender to Borrower, the REIT and any other Lender being
deemed to have been made by delivery to Agent). This Agreement and each of the
other Loan Documents shall be construed to the extent reasonable to be
consistent one with the other, but to the extent that the terms and conditions
of this Agreement are actually and directly inconsistent with the terms and
conditions of any other Loan Document, this Agreement shall govern.
11.20 Construction. The parties acknowledge that each party and
its counsel have reviewed and revised this Agreement and that the normal rule of
construction to the-effect
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that any ambiguities are to be resolved against the drafting party shall not be
employed in the interpretation of this Agreement or any amendments or exhibits
hereto.
11.21 Entire Agreement. This Agreement, taken together with all of
the other Loan Documents and all certificates and other documents delivered by
Borrower to Agent in connection herewith, embodies the entire agreement and
supersede all prior agreements, written and oral, relating to the subject
matter hereof.
11.22 Agent's Action for Its Own Protection Only. The authority
herein conferred upon Agent, and any action taken by Agent, to inspect any
Property will be exercised and taken by Agent for its own protection only and
may not be relied upon by Borrower for any purposes whatsoever, and Agent shall
not be deemed to have assumed any responsibility to Borrower with respect to
any such action herein authorized or taken by Agent. Any review, investigation
or inspection conducted by Agent, any consultants retained by Agent or any
agent or representative of Agent in order to verify independently Borrower's
satisfaction of any conditions precedent to Loan, Borrower's performance of any
of the covenants, agreements and obligations of Borrower under this Agreement,
or the validity of any representations and warranties made by Borrower
hereunder (regardless of whether or not the party conducting such review,
investigation or inspection should have discovered that any of such conditions
precedent were not satisfied or that any such covenants, agreements or
obligations were not performed or that any such representations or warranties
were not true), shall not affect (or constitute a waiver by Agent or Lenders
of) (i) any of Borrower's representations and warranties under this Agreement
or Agent's or Lenders' reliance thereon or (ii) Agent's or Lenders' reliance
upon any certifications of Borrower required under this Agreement or any other
facts, information or reports furnished to Agent and Lenders by Borrower
hereunder.
11.23 Lenders' ERISA Covenant. Each Lender, by its signature hereto
or on the applicable Assignment and Assumption, hereby agrees (a) that on the
date any Loan is disbursed hereunder no portion of such Lender's Pro Rata Share
of such Loan will constitute "assets" within the meaning of 29 C.F.R. ss.
2510.3-101 of an "employee benefit plan" within the meaning of Section 3(3) of
ERISA or a "plan" within the meaning of Section 4975(e)(1) of the Internal
Revenue Code, and (b) that following such date such Lender shall not allocate
such Lender's Pro Rata Share of any Loan to an account of such Lender if such
allocation (i) by itself would cause such Pro Rata Share of such Loan to then
constitute "assets" (within the meaning of 29 C.F.R. ss. 2510.3-101 or any
successor regulation thereto) of an "employee benefit plan" within the meaning
of Section 3(3) of ERISA or a "plan" within the meaning of Section 4975(e)(1) of
the Internal Revenue Code and (ii) by itself would cause such Loan to
constitute a prohibited transaction under ERISA or the Internal Revenue Code
(which is not exempt from the restrictions of Section 406 of ERISA and Section
4975 of the Internal Revenue Code and the taxes and penalties imposed by
Section 4975 of the Internal Revenue Code and Section 502(i) of ERISA) or any
Agent or Lender being deemed in violation of Section 404 of ERISA.
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11.24. Documentation Agent and Syndication Agent. Each of the parties to
this Agreement acknowledges and agrees that the obligations of Documentation
Agent and Syndication Agent hereunder shall be limited to those obligations that
are expressly set forth herein, if any, and Documentation Agent and Syndication
Agent shall not be required to take any action or assume any liability except as
may be required in their respective capacities as a Lender hereunder. Each of
the parties to this Agreement agrees that, for purposes of the indemnifications
set forth herein, the term "Agent" shall be deemed to include Documentation
Agent and Syndication Agent.
[SIGNATURE PAGES FOLLOW]
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first written above.
"Borrower"
MHC OPERATING LIMITED PARTNERSHIP, an
Illinois limited partnership
By: MANUFACTURED HOME
COMMUNITIES, INC., a Maryland
corporation as General Partner
By: /s/ Xxxxx Xxxxxxxx
-------------------------------
Name: Xxxxx Xxxxxxxx
-----------------------------
Title: Executive VP/General Counsel
----------------------------
Address:
Two Xxxxx Xxxxxxxxx Xxxxx, Xxxxx 000
Xxxxxxx, Xxxxxxxx 00000
Telecopy: 312/474-0205
"REIT"
MANUFACTURED HOME COMMUNITIES,
INC., a Maryland corporation
By: /s/ Xxxxx Xxxxxxxx
-------------------------------
Name: Xxxxx Xxxxxxxx
-----------------------------
Title: Executive VP/General Counsel
----------------------------
Address:
Xxx Xxxxx Xxxxxxxxx Xxxxx, Xxxxx 000
Xxxxxxx, Xxxxxxxx 00000
Telecopy: 312/474-0205
S-1
92
"Agent and "Lenders"
XXXXX FARGO BANK, N.A., as Agent and as
a Lender
By: /s/ Xxxxxx X Xxxxxx
------------------------------------
Name: Xxxxxx X. Xxxxxx
----------------------------------
Title: Vice President
----------------------------------
Address:
000 Xxxx Xxxxxx Xxxxx,
Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attn.: Senior Loan Officer
Telecopy: 312/782-0969
with a copy to:
Xxxxx Fargo & Co.
Real Estate Group
000 Xxxxxxxxxx Xxxxxx, Xxxxx 0
Xxx Xxxxxxxxx, Calif. 94163
Attn.: Chief Credit Officer
Telecopy: 415/391-2971
with a copy to (for Financial Statements
and Reporting Information Only):
Xxxxx Fargo Bank
0000 Xxxx Xxxxxx
Xxxxx 000
Xxxxxx, Xxxxxxxxxx 00000
Attn: Xxxxx Xxxxx
Telecopy: 714/851-9442
Loan Commitment: $40,000,000
40%
S-2
93
COMMERZBANK AKTIENGESELLSCHAFT,
Chicago Branch, as a Lender
By: Xxxxx X. Xxxxx X. Xxxxxx Xxxxx
----------------------------------------
Name: XXXXX X. XXXXX X. XXXXXX XXXXX
-------------------------------------
Title: SENIOR VICE ASSISTANT
PRESIDENT TREASURER
By:
---------------------------------------
Name:
-------------------------------------
Title:
------------------------------------
Address:
Xxx Xxxxx Xxxxxxxxx Xxxxxx
Xxx Xxxx, XX 00000-0000
Attn: Xxxxxxx X. Xxxxxxx
Telecopy: 212/266-7569
Loan Commitment: $20,000,000
20%
X-0
00
XXXXXX XXXXXXXX TRUST COMPANY OF
NEW YORK, as a Lender
By: Xxxxxxx X. X'Xxxxxxx
----------------------------------
Name: XXXXXXX X. X'XXXXXXX
--------------------------------
Title: VICE PRESIDENT
-------------------------------
Address:
00 Xxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000-0000
Attn.: Xxxxxxx X'Xxxxxxx
Telecopy: 212/648-8111
Loan Commitment: $20,000,000
20%
S-4
95
BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION, as Syndication Agent
and as a Lender
By: Xxxxx XxXxxxx
-------------------------------
Name: Xxxxx Xxxxxxx
-------------------------------
Title: Vice President
-------------------------------
Address:
000 X. XxXxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxx, XX 00000
Attn.: Xxxxx XxXxxxx
Telecopy: 312/974-4970
Loan Commitment: $20,000,000
20%
S-5
96
EXHIBIT A
ASSIGNMENT AND ASSUMPTION
THIS ASSIGNMENT AND ASSUMPTION (the "Agreement") is dated this______
day of______________, ______, by and between ____________________________
("Assigning Lender") and ________________________________ ("Assignee Lender").
WHEREAS, Assigning Lender is the holder of that certain promissory note
(the "Note") in the principal amount of $______________________, dated ________,
____, and executed by MHC Operating Limited Partnership, an Illinois limited
partnership ("Borrower"), for the benefit of Assigning Lender. The Note
evidences Assigning Lender's "Pro Rata Share" of the "Loan" made or to be made
under that certain Amended and Restated Credit Agreement, dated as of
April _, 1998 (as amended, supplemented or restated from time to time, the
"Credit Agreement"). Capitalized terms used herein without definition have the
meanings provided in the Credit Agreement.
1. Assignment
(a) For value received, the Assigning Lender hereby sells, assigns,
conveys and delivers to Assignee Lender, and Assignee Lender hereby purchases
from Assigning Lender, a ________% interest in the Loan and the Facility
(collectively, the "Assigned Rights and Obligations"). After giving effect
hereto, the Assignee Lender will have a Commitment of $___________, a Pro Rata
Share of_______%.
(b) Agent shall pay to Assignee Lender all interest and other amounts
that are paid by or on behalf of Borrower pursuant to the Loan Documents and are
attributable to the Assigned Rights and Obligations ("Borrower Amounts"), that
accrue on and after the date hereof. If Assigning Lender receives or collects
any such Borrower Amounts, Assigning Lender shall promptly pay them to Assignee
Lender.
2. Representations and Warranties
(a) Each of Assigning Lender and Assignee Lender represents and
warrants to the other and to Agent as follows:
(i) It has full power and authority, and has taken all action
necessary, to execute and deliver this Agreement and to fulfill its
obligations under, and to consummate the transactions contemplated
by, this Agreement;
(ii) The making and performance of this Agreement and all documents
required to be executed and delivered by it hereunder do not and
will not violate any law or regulation applicable to it;
97
(iii) This Agreement has been duly executed and delivered by it and
constitutes its legal, valid and binding obligation enforceable in
accordance with its terms; and
(iv) All approvals, authorizations or other actions by, or filing with,
any governmental authority necessary for the validity or enforceability of
its obligations under this Agreement have been made or obtained.
(b) Assigning Lender represents and warrants to Assignee Lender that
Assigning Lender owns the Assigned Rights and Obligations free and clear of
any lien or other encumbrance and that the assignment contemplated hereby
complies with the provisions of the first sentence of Section 10.11(a) of
the Credit Agreement.
(c) Assignee Lender represents and warrants to Assigning Lender as follows:
(i) Assignee Lender has made and shall continue to make its own
independent investigation of the financial condition, affairs and
creditworthiness of Borrower and any other person or entity obligated under
the Loan Documents (collectively, "Credit Parties," and the value of any
collateral now or hereafter securing any of the obligations);
(ii) Assignee Lender has received copies of the Loan Documents and such
other documents, financial statements and information as it has deemed
appropriate to make its own credit analysis and decision to enter into this
Agreement; and
(iii) The assignment contemplated hereby complies with the provisions
of the second sentence of Section 10.11(a) of the Credit Agreement.
3. No Assigning Lender Responsibility. Assigning Lender makes no
representation or warranty regarding, and assumes no responsibility to Assignee
Lender for:
(a) The execution (by any party other than Assigning Lender),
effectiveness, genuineness, validity, enforceability, collectibility or
sufficiency of the Loan Documents or any representations, warranties, recitals
or statements made in the Loan Documents or in any financial or other written or
oral statement, instrument, report, certificate or any other document made or
furnished or made available by Assigning Lender to Assignee Lender or by or on
behalf of any Credit Party to Assigning Lender or Assignee Lender in connection
with the Loan Documents and the transactions contemplated thereby;
(b) The performance or observance of any of the terms, covenants or
agreements contained in any of the Loan Documents or as to the existence or
possible existence of any Unmatured Event of Default or Event of Default under
the Loan Documents;
2
98
(c) The accuracy or completeness of any information provided to Assignee
Lender, whether by Assigning Lender or by or on behalf of any Credit Party; or
(d) Any investigation of the financial condition, affairs or
creditworthiness of any of the Borrower or the REIT, or the value of any
collateral, in connection with the assignment of the Assigned Rights and
Obligations or to provide Assignee Lender with any credit or other information
with respect thereto, whether coming into its possession before the date hereof
or at any time or times thereafter.
4. Assignee Lender Bound By Credit Agreement. Effective on the date
hereof, Assignee Lender (a) shall be deemed to be a party to the Credit
Agreement, (b) agrees to be bound by the Credit Agreement to the same extent as
it would have been if it had been an original Lender thereunder, and (c) agrees
to perform in accordance with their respective terms all of the obligations
which are required under the Loan Documents to be performed by it as a Lender.
Assignee Lender appoints and authorizes Agent to take such actions as agent on
its behalf and to exercise such powers under the Loan Documents as are delegated
to Agent by the terms thereof, together with such powers as are reasonably
incidental thereto.
5. Assigning Lender Released From Credit Agreement. Effective on the date
hereof, and to the extent of the Assigned Rights and Obligations, Assigning
Lender shall relinquish its rights and be released from its obligations under
the Credit Agreement and the other Loan Documents; provided, however, that
Assigning Lender shall retain all of its rights to indemnification under the
Credit Agreement and the other Loan Documents for any events, acts or omissions
occurring before the date hereof.
6. General
(a) No term or provision of this Agreement may be amended, waived or
terminated orally, but only by an instrument signed by the parties hereto.
(b) If Assigning Lender has not assigned its entire remaining Commitment
and Loan to Assignee Lender, Assigning Lender may at any time and from time to
time grant to others, subject to applicable provisions in the Credit Agreement,
assignments of or participations in all of Assigning Lender's remaining Loan or
Commitment.
(c) All payments to Assigning Lender or Assignee Lender hereunder shall,
unless otherwise specified by the party entitled thereto, be made in Dollars, in
immediately available funds, and to the address or account specified on the
signature pages of this Agreement. The address of Assignee Lender for notice
purposes under the Credit Agreement shall be as specified on the signature pages
of this Agreement.
(d) This Agreement shall be governed by and construed in accordance with
the laws of the State of Illinois.
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99
(e) This Agreement is executed to be effective as of the date set forth
above.
[SIGNATURE PAGE FOLLOWS]
4
100
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first written above.
,as
--------------------------
Assigning Lender
By:
--------------------------------
Name:
------------------------------
Title:
-----------------------------
Pro Rata Share (after giving effect to this
Agreement): %
-------
Commitment (after giving effect to this
Agreement):$
-----------------------
Assigning Lender's Payment Instructions:
-----------------------------------
ABA No.:
---------------------------
Account No.:
-----------------------
Ref.:
-----------------------------
ASSUMPTION:
The undersigned Assignee Lender hereby accepts the above sale and
assignment and agrees to be bound by the obligations of the Credit Agreement and
the Loan Documents and hereby assumes the obligations of a Lender thereunder.
,as Assignee
-------------------------------
Lender
By:
-------------------------------
Name:
-----------------------------
Title:
----------------------------
Pro Rata Share (after giving effect to this
Agreement): %
-------
Commitment (after giving effect to this
Agreement): $
---------------------
Address for Notice and Delivery:
5
101
----------------------------------
----------------------------------
----------------------------------
Attention:
Telephone: ( ) -
--- ---- ----
Telecopy: ( ) -
--- ---- ----
Assignee Lender's Payment Instructions:
----------------------------------
ABA No.:
--------------------------
Account No.:
----------------------
Ref.:
-----------------------------
6
102
ACKNOWLEDGED AND AGREED:
XXXXX FARGO BANK, N.A., as Agent
By:
-----------------------------
Name:
---------------------------
Title:
--------------------------
MHC OPERATING LIMITED PARTNERSHIP, an
Illinois limited partnership, as Borrower
By: MANUFACTURED HOME COMMUNITIES,
INC., a Maryland corporation, as General Partner
By:
-----------------------------
Name:
---------------------------
Title:
--------------------------
ACKNOWLEDGED:
MANUFACTURED HOME COMMUNITIES, INC., a
Maryland corporation, as Guarantor
By:
-----------------------------
Name:
---------------------------
Title:
--------------------------
7
103
EXHIBIT B
AMENDMENT AND RESTATEMENT
OF $100,000,000 TERM LOAN
CREDIT AGREEMENT FOR
MHC OPERATING LIMITED PARTNERSHIP
CLOSING CHECKLIST
1. Loan Documents
------- 1.01 Amended and Restated Revolving Credit Agreement
------- 1.02 Amended and Restated Notes for each Bank
x. Xxxxx Fargo Bank, National Association
------
------ b. Bank of America National Trust and Savings
Association
------
X. Xxxxxx Guaranty Trust Company of New York
------
d. Commerzbank Aktiengesellschaft
------- 1.03 Agent's form of Funds Transfer Agreement and signature
authorization form
------- 1.04 The REIT Guaranty
------- 1.05 Solvency Certificate of Borrower
------- 1.06 Solvency Certificate of the REIT
------- 1.07 Compliance Certificate (referencing Section 3.01 (i))
------- 1.08 Notice of Borrowing
11..Evidence of Existence and Authorization
------- 2.01 Opinion of Borrower's counsel
------- 2.02 Certified copy of Borrower's Limited Partnership
Agreement and Certificate of Limited Partnership (and all
amendments thereto)
------- 2.03 Certificate of Existence for Borrower from Secretary of
State of Illinois
------- 2.04 Intentionally omitted
------- 2.05 Certified copy of the REIT's Certificate of Incorporation
and Bylaws
104
(and all amendments thereto)
------- 2.06 Certificate of Good Standing for the REIT from the
Secretary of State Maryland
------- 2.07 Certificate of the REIT's Secretary with respect to (i)
authorization. (ii) incumbancy, (iii) bylaws and (iv)
resolutions
III. Miscellaneous
------- 3.01 Exisiting Notes (marked canceled for return to Borrower)
---- x. Xxxxx Fargo Bank, National Association
---- b. Bank of America Illinois
---- X. Xxxxxx Guaranty Trust Company of New York
---- d. Commerzbank Aktiengesellschaft
------- 3.02 Forms 4224 from Banks (as appropriate)
------- 3.03 Agent's Fee Letter
------- 3.04 Authorizations from Banks and Borrower to release
signature pages
------- 3.05 Payment of fees and expenses
105
EXHIBIT C TO TERM LOAN
COMPLIANCE CERTIFICATE
This Compliance Certificate is delivered pursuant to the Amended and
Restated Credit Agreement dated as of April 28, 1998, (as amended, supplemented
and restated from time to time, the "Credit Agreement"), among MHC Operating
Limited Partnership, the Lenders (as defined therein or made party thereto), and
Xxxxx Fargo Bank, N.A., as Agent. All capitalized defined terms used herein
shall have the meaning ascribed to such terms in the Credit Agreement.
1. The undersigned hereby certifies that the undersigned has reviewed
the terms of the Credit Agreement and other Loan Documents and has made a review
in reasonable detail of the transactions consummated by and financial condition
of the REIT, the Borrower, the Subsidiaries and the Agreement Parties during the
accounting period covered by the financial statements being delivered to Lender
along with this Compliance Certificate and
(a) Such review has not disclosed the existence during or at the end
of such accounting period, and the undersigned does not have knowledge of the
existence as of the date hereof, of any condition or event which constitutes an
Unmatured Event of Default or an Event of Default (except as set forth in
paragraph (b) hereof).
(b) The financial statements being delivered to Agent along with this
Compliance Certificate have been prepared in accordance with the books and
records of the REIT, on a consolidated basis, and fairly present the financial
condition of the REIT, on a consolidated basis, at the date thereof (if
applicable, subject to normal year-end adjustments) and the results of
operations and cash flows, on a consolidated basis, for the period then ended.
(c) The nature and period of existence of the condition(s) or event(s)
which constitute an Unmatured Event(s) of Default or an Event(s) of Default is
(are) as follows: None.
(d) Borrower (is taking) (is planning to take) the following action
with respect to the condition(s) or event(s) set forth in paragraph (b) above:
N/A
2. As of the end of the most recently ended accounting period:
(a) Total Liabilities to Gross Asset Value. Total Liabilities:
$________________ Gross Asset Value: $_____________________. Ratio:
(Ratio not to exceed 0.6:1).
(b) Secured Debt to Gross Asset Value. Secured Debt:
$________________ Gross Asset Value: $_____________________. Ratio:
_________(Ratio not to exceed 0.41).
106
(c) EBITDA to Interest Expense Ratio. EBITDA:
$________________. Interest Expense: $_____________________. Ratio: ____
(Ratio not to be less than 2.0:1).
(d) EBITDA to Fixed Charges Ratio. EBITDA:
$________________. Fixed Charges: $________________________. Ratio: ____
(Ratio not to be less than 1.75:1).
(e) Unencumbered Net Operating Income to Unsecured Interest
Expense. Unencumbered Net Operating Income: $___________________________
Unsecured Interest Expense: $___________________. Ratio: ________ (Ratio not
to be less than 1.80:1).
(f) Unencumbered Pool. Borrower shall not permit the ratio of (a) the
sum of (i) Unencumbered Asset Value: $_________________________; (ii) Cash
and Cash Equivalents owned by Borrower subject to no Lien in excess of $10MM:
$________________ to (b) outstanding Unsecured Debt:
$________________ Ratio: __________ (Ratio not to be less than 1.80:1).
(g) Minimum Net Worth. Borrower will maintain Net Worth of not less
than $258,317,100 plus 90% of all Net Offering Proceeds received by the REIT or
Borrower after September 30, 1996. Net Worth: $_____________________________.
(h) Permitted Holdings. Borrower and its Subsidiaries may acquire or
maintain the following Permitted Holdings so long as (i) the aggregate value
whether held directly or indirectly by Borrower and its Subsidiaries does not
exceed, at any time, 20% of Gross Asset Value for the Borrower as a whole and
(ii) the value of each Permitted Holding does not exceed, at any time the
following percentages of Borrower's Gross Asset Value:
% OF GROSS
PERMITTED HOLDINGS MAXIMUM ASSET VALUE
- NON MANUFACTURED home community property 10% %
(other than cash or Cash Equivalents) -----
- Land 5% %
-----
- Securities (issued by REITs primarily 5% %
engaged in the development, ownership and -----
management of Manufactured Home
communities)
- Manufactured Home Community Mortgage 10% %
other than mortgage indebtedness which is -----
either eliminated in the consolidation of
the REIT, Borrower and the Subsidiaries or
accounted for as investments in real estate
107
UNDER GAAP
- manufactured home community partnership 10% %
interest other than controlled partnership -----
interests
- development activity 10% %
-----
3. All representations and warranties contained in the
above-referenced Credit Agreement remain true and correct in all material
respects. No Event of Default described in section 9.01 (g) or section 9.01
(h) has occurred and no other Event of Default or Unmatured Event of Default has
occurred and is continuing. There has been no Material Adverse Effect to the
Borrower or the REIT.
4. As of the end of the Fiscal Quarter covered by the financial
statements being delivered to Agent along with this Compliance Certificate, the
weighted average occupancy rate of the Properties listed On Exhibit F to the
Credit Agreement together with those designated by Borrower is at least
eight-five percent (85%)
DATE:
------------------ -----------------------------------------
Xx. Xxxxxx X. Xxxxxxxx
Chief Financial Officer of the REIT
108
EXHIBIT D
TERM LOAN NOTE
April _____ , 1998
$_______________________
FOR VALUE RECEIVED, MHC Operating Limited Partnership, an Illinois
limited partnership (" Borrower"), HEREBY PROMISES TO PAY to the order of
_______________________ ("Lender") at c/o Wells Fargo Bank, N.A., 0000 X.
Xxxx Xxxxx, Xxxxx 000. Xx Xxxxxxx, Xxxxxxxxxx, 00000, the principal sum
of ____________________ Dollars ($___________________) together
with interest on the unpaid principal balance hereof at the rates provided below
from the date such principal is advanced until payment in full thereof.
This Note is one of the Loan Notes referred to in and governed by
that certain Amended and Restated Credit Agreement, dated as of the date hereof,
as amended, supplemented or restated from time to time (the "Credit Agreement"),
among Borrower, Manufactured Home Communities, Inc., the Lenders named therein
and Xxxxx Fargo Bank, as Agent for the said Lenders ("Agent"), which Credit
Agreement, among other things, contains provisions for acceleration of the
maturity hereof and payment of certain additional sums to Lender upon the
happening of certain stated events. Any capitalized term used herein, unless
otherwise defined herein, shall have the meaning ascribed to such term in the
Credit Agreement.
The principal amount of this Note will be due and payable, if not
sooner paid, on the Maturity Date, subject to extension as provided in the
Credit Agreement. Borrower may make voluntary prepayments of all or a portion of
the Loan, upon not less than three (3) Business Days prior written notice,
pursuant to the provisions of Section 2.05 of the Credit Agreement.
Interest on the Loan is payable on the terms and at the rates set
forth in the Credit Agreement. In addition to the interest charges described in
the Credit Agreement, the Credit Agreement provides for the payment by Borrower
of various other charges and fees as set forth more fully in the Credit
Agreement.
Upon the occurrence of an Event of Default described in
Section 9.01 (g) or Section 9.01 (h) of the Credit Agreement, this Note shall,
without demand, notice or legal process of any kind, automatically become
immediately due and payable. Upon and after the occurrence and continuance of
any other Event of Default, this Note may, at the option or with the consent of
Requisite Lenders, and without demand, notice or legal process of any kind
(except as specifically set forth in the Credit Agreement), be declared, and
immediately shall become, due and payable, unless such Event of Default is
waived or such acceleration is rescinded as provided in the Credit Agreement.
Demand, presentment, protest and notice of nonpayment and protest,
notice of intention to accelerate maturity, notice of acceleration of maturity
and notice of dishonor are
S-1
109
hereby waived by Borrower, except to the extent specifically provided for in the
Credit Agreement. Subject to the terms of the Credit Agreement, Agent on behalf
of the Lenders may extend the time of payment of this Note, postpone the
enforcement hereof, grant any indulgences, release any party or primarily or
secondarily liable hereon or agree to any substitution. subordination, exchange
or release of any security without affecting or diminishing Lender's right of
recourse against Borrower, which right is hereby expressly reserved.
This Note has been delivered and accepted at Chicago, Illinois and
shall be interpreted, and the rights and liabilities of the parties hereto
determined, in accordance with, and governed by the laws of the State of
Illinois.
Whenever possible each provision of this Note shall be interpreted in
such manner as to be effective and valid under applicable law, but if any
provision of this Note shall be prohibited by or invalid under applicable law,
such provision shall be ineffective to the extent of such prohibition or
invalidity, without invalidating the remainder of such provision or the
remaining provisions of this Note.
MHC OPERATING LIMITED PARTNERSHIP, an
Illinois limited partnership
By: MANUFACTURED HOME COMMUNITIES,
INC., a Maryland corporation,
as General Partner
By:
-----------------------------
Name:
---------------------------
Title:
--------------------------
S-2
110
EXHIBIT E-1
NOTICE OF BORROWING
Re: Amended and Restated Credit Agreement dated as of April _____ , 1998,
as amended, supplemented and restated from time to time among MHC
Operating Limited Partnership, Manufactured Home Communities, Inc.,
the Lenders thereunder and Xxxxx Fargo Bank N.A., as agent for said
Lenders ("Agent") (the "Credit Agreement")
Xxxxx Fargo Disbursement Center
0000 Xxxx Xxxx Xxxxx
Xxxxx 000
Xx Xxxxxxx, Xxxxxxxxxx 00000
This notice represents the Borrower's request for a Loan Increase
pursuant to Section 2.01 of the Credit Agreement on April ____, 1998 (the
"Closing Date") in the principal amount of $ ________ on the terms set forth on
the attached schedule. All capitalized terms used herein and not defined herein
shall have the meanings ascribed to them in the Credit Agreement.
Borrower hereby certifies that (a) all conditions set forth in Article
III of the Credit Agreement to the disbursement of the Loan Increase hereby
requested will be satisfied on the Closing Date, (b) the proposed Loan Increase
complies with the terms of the Credit Agreement, and (c) no Event of Default
or Unmatured Event of Default has occurred and is continuing either before or
after giving effect to such Loan Increase.
Dated: April_____, 1998
MHC Operating Limited Partnership,
an Illinois limited partnership
By: Manufactured Home Communities,
Inc., a Maryland corporation, as its
General Partner
By:
----------------------------------
Name:
--------------------------------
Title:
-------------------------------
cc: Xxxxx Fargo Bank, N.A.
000 X. Xxxxxx Xxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attn: Account Officer
111
Schedule I to
NOTICE OF BORROWING
PROPOSED LOAN FUNDING
1 Proposed Funding Date: _____________________________
2. Amount of Proposed Loan: $_____________________________
Yes No
3. Base Rate:
4. Libor Rate: ($ 100,000 or integral multiples of $100,000)
(INDICATE WITH AN "X")
5. Specify Interest Period for LIBOR Loan (if applicable), indicate with
"x."
< 30 days 30 days 60 days 90 days 180 days 360 days
---------------------------------------------------------------------
---------------------------------------------------------------------
CONDITIONS
(i) An Interest Period having a duration of less than one (1) month is
available with the reasonable approval of Agent (unless any Lender has
previously advised Agent and Borrower that it is unable to enter into
LIBOR contracts for an Interest Period of such duration).
112
Schedule 4.01 (r)
Environmental Compliance Issues
ASBESTOS. Limited quantities of asbestos containing materials ("ACMs") are
present in various building materials such as floor coverings, acoustical tiles
and decorative treatments located at certain Properties. The ACMs present at
these Properties are generally in good condition, and possess low probabilities
for disturbance. Borrower has implemented comprehensive operations and
maintenance plans for Properties where ACMs are present or reasonably suspected.
Property managers are being trained to deal effectively with the in-place
maintenance of ACMs. ACMs will be properly removed by Borrower in the ordinary
course of renovation and construction and all damaged ACMs will be replaced
immediately; however, in certain circumstances, Borrower may determine to
encapsulate rather than remove damaged ACMs.
STORAGE TANKS. A number of above ground fuel tanks ("ASTs") and underground
storage tanks ("USTs") are located on the Properties. Four of the manufactured
housing communities, Camelot Xxxxxxx. XxXxxxx, Nassau and Mariner's Cove, have
several active and/or inactive USTs (approximately 225 USTs between the four
Properties) used for the storage of residential heating fuel. A June 1994 site
assessment (conducted prior to the Borrower's ownership of the Properties)
conducted by ATEC Environmental Consultants at Camelot Xxxxxxx and XxXxxxx
identified six potential leaking underground storage tanks ("LUSTs"). The LUSTs
were removed by Xxxxx Environmental in March 1998. A Site Investigation Work
Plan has been submitted to Delaware Department of Natural Resources. The
Borrower does not believe that any future remediation that may be required of
the LUST's will have a Material Adverse Effect.
WASTE WATER TREATMENT PLANTS ("WWTPS"). WWTPs are operated at several of the
Properties. Two WWTPs, those at Xxx Xxxx Xxxxxxx xxx Xxxx Xxxxxx Xxxxxxx, are
currently under an Order Pursuant to the Clean Water Act to implement various
corrective actions to conform to National Pollution Discharge Elimination System
permit requirements and conditions. United States Environmental Protection
Agency ("USEPA") and Indiana Department of Environmental Management ("IDEM")
may assess certain penalties for past non-compliance. Borrower has implemented
most of the corrective actions proposed to it by USEPA/IDEM and Borrower intends
to complete the remaining corrective actions in due course.
113
================================================================================
EXHIBIT E-2
NOTICE OF CONTINUATION/CONVERSION
TODAY'S DATE:
---------------
TO: XXXXX FARGO BANK, N.A.
DISBURSEMENT AND OPERATIONS CENTER
FAX #(000) 000-0000 OR (000) 000-0000
ATTENTION: RATE OPTION DESK
================================================================================
BORROWER INTEREST RATE OPTION REQUEST
Rate Quote Line (000) 000-0000
LOAN# BORROWER NAME:
--------------- --------------------
RATE SET DATE: INTEREST PERIOD COMMENCEMENT DATE: (1350)
----------- -------------
INTEREST PERIOD (TERM): (i.e. 1,2,3,6 months,xxx.xx allowed per
------------------ the Credit Agreement)
INDEX: RATE % + = % (1350)
------------ --------- ----------------- ---------------
(i.e. Libor) Spread Applicable Rate
LIBOR LOAN EXPIRING ON (Date): $
------------ --------------------
1) AMOUNT ROLLING OVER $ FROM OBLGN#
------------------ -----
2) ADD: AMT TRANSFERRED FROM
BASE RATE LOAN $ FROM OBLGN# TO OBLGN:
------------------ ----- -----
(5522) (5022)
3) ADD: AMT TRANSFERRED FROM
OTHER LIBOR LOAN $ FROM OBLGN# TO OBLGN:
------------------ ----- -----
(5522) (5022)
ADD: AMT TRANSFERRED FROM $ FROM OBLGN# TO OBLGN:
OTHER LIBOR LOAN ------------------ ----- -----
(5522) (5022)
4) LESS: AMT TRANSFERRED TO $ FROM OBLGN# TO OBLGN:
BASE RATE LOAN ------------------ ----- -----
(5522) (5022)
TOTAL LIBOR LOAN: $
------------------
Borrower confirms, represents and warrants to Lender(a) that this Notice of
Continuation/Conversion is subject to the terms and conditions of that certain
Amended and Restated Credit Agreement dated as of _______, 1998, by and among
Borrower, Manufactured Home Communities, Inc. the "Lenders" thereunder and Xxxxx
Fargo Bank, N.A., as Agent for the said Lenders (the"Credit Agreement"). (b)that
terms, words and phrases used but not defined in this Notice of Continuation/
Conversion have the meanings attributed thereto in the Credit Agreement, and
(c) that no Event of Default or Unmatured Event of Default has occurred and is
continuing.
REQUESTED BY (as allowed per documents): TELEPHONE# ( )
------------- -- ----------
PRINT NAME: FAX# ( )
------------------------------------------ -- ----------------
================================================================================
XXXXX FARGO BANK ACKNOWLEDGEMENT OF RECEIPT AND CONFIRMATION
FIXED EXPIRATION DATE: (2301) DATE:
------------------------- -------------------
REQUEST VERIFIED BY: DATE:
------------------------- -------------------
REQUEST APPROVED BY: DATE:
------------------------- -------------------
CONFIRMATION FAXED TO CUSTOMER BY: DATE: TIME:
------------- ------- -------
================================================================================
XXXXX FARGO BANK OPERATIONS USE ONLY
TRACKING# LOAN AU: LOAN SU: OBLIGOR#
-------- ---------- --------- ------------------
CHARGE CODE: 100 BASIS: EARN TYPE: 0 BAL TYPE 000 (1350)
------ ---------- ------ -----------
SPECIAL PRODUCT TYPE CODE: (If change required) (2305)
------------------------
TDR: NO YES (Fax to loan acctg) UPDATE BILLING: NO YES (1370)
--- --- --- ---
--------------------------------------------------------------------------------
DATA ENTRY COMPLETED BY: DATE: BATCH ID:
----------- ----------------- ------------
DATA ENTRY AUDITED BY: DATE:
------------------------------------ ---------------
114
EXHIBIT F TO TERM LOAN
QUALIFYING UNENCUMBERED PROPERTIES
AS OF MARCH 31, 1998
Apollo Village Sweetbriar
Aspen Meadow The Heritage
Bear Creek The Xxxx
Xxxxxx Springs Waterford Estates
Brook Gardens Woodland Hills
Xxxxx Harbor Estate Independence Hill
Cabana Northstar
Camelot Xxxxxxx Dellwood
Carefree Manor Briarwood
Carriage Cove Pheasant Ridge
Carriage Park Quivira
Colony Park Holiday Village-IA
Country Xxxxxxx Rockwood
Countryside North Falconwood
Creekside All Seasons
Del Rey Coralwood
Desert Skies Four Seasons
Em Xx Xx Quail Hollow
Fairview Manor Royal Oaks
Five Seasons San Xxxx 1-4
Flamingo West Sea Oaks
Fun N Sun Shadowbrook
Golf Vista Estates Consolidated Sunshadow
Heritage Village Westwood Village
Hillcrest Quail Xxxxxxx
Holiday Ranch Arrowhead Village
Lake Fairways Mariners Cove
Lakewood Village Landings
XxXxxxx Xxxxxxx of Chantilly
Oak Bend Nassau Park
Sunrise Heights Pine Lakes
115
SCHEDULE 4.01(c) TO TERM LOAN
General Partners of Borrower
Manufactured Home Communities, Inc. owns approximately an 80% general
partnership interest.
116
SCHEDULE 4.01 (v) TO TERM LOAN
Subsidiaries and Investment Affiliates
Manufactured Home Communities, Inc. ("MHC") owns 100% of the stock of:
MHC-QRS Bay Indies, Inc. MHC-QRS Western, Inc.
MHC Lending QRS, Inc. MHC-QRS Two, Inc.
MHC-QRS, Inc. MHC-QRS Blue Ribbon Communities, Inc.
MHC-QRS DeAnza, Inc. QRS Gold Medal Communities, Inc.
MHC owns an approximately an 80% general partner interest in MHC Operating
Limited Partnership ("MHC OP").
MHC-QRS DeAnza, Inc. is the 1% general partner of
MHC-DeAnza Financing Limited Partnership (owns the beneficial interest in
six manufactured home communities
purchased from affiliates of
DeAnza Group, Inc.)
MHC-QRS Bay Indies, Inc. is the 1% general partner of
MHC-Bay Indies Financing Limited Partnership (owns the beneficial interest
in Bay Indies manufactured
home community)
MHC Lending QRS, Inc. is the 1% general partner of
MHC Lending Limited Partnership (owns certain loans)
MHC-QRS, Inc. is the 1% general partner of
MHC Financing Limited Partnership (owns the beneficial interest in 29
manufactured home communities)
MHC-QRS Two, Inc. is the 1% general partner of MHC Financing Limited
Partnership Two (owns some or all of the
beneficial interest in 26 manufactured
home communities or recreational vehicle parks)
MHC-QRS Blue Ribbon Communities, Inc. is the 1% general partner of Blue Ribbon
Communities Limited Partnership (currently an
inactive "shelf" entity)
QRS Gold Medal Communities, Inc. is the 1% general partner of Gold Medal
Communities Limited Partnership (currently an
inactive "shelf" entity)
MHC OP is the 99% limited partner of:
MHC Financing Limited Partnership
MHC Lending Limited Partnership
MHC-Bay Indies Financing Limited Partnership
MHC-DeAnza Financing Limited Partnership
MHC Financing Limited Partnership Two
117
Blue Ribbon Communities Limited Partnership
Gold Medal Communities Limited Partnership
MHC OP owns the amount set forth below of the limited partnership interests in
the following entities:
ELL-CAP XX-Mon Dak 4.88%
ELL-CAP/Diversified 75-Naples Estates 100%
ELL-CAP/Diversified 80-Rehobeth Beach 87.13%
ELL-CAP/Diversified 80 Associates 91.75%
ELL-CAP 97 Laguna Lake Associates 15.69%
MHC OP is a 49% member of Trails Associates LLC and a 49% member of Plantation
Company LLC
MHC OP owns the beneficial interest in the manufactured home communities not
beneficially owned by a financing partnership.
MHC OP is the 1% general partner of:
MHC Management Limited Partnership
MHC DAG Management Limited Partnership
MHC OP owns 100% of the non-voting preferred stock of:
LP Management Corporation
DeAnza Group, Inc.
LP Management Corp. is the 99% limited partner of MHC Management Limited
Partnership.
DeAnza Group, Inc. is the 99% limited partner of MHC DAG Management Limited
Partnership.
MHC OP owns 100% of the non-voting preferred stock of Realty Systems, Inc.
("RSI").
Equity Group Investments, Inc. owns 100% of the non-voting common
stock of RSI.
Equity-RSI Limited Partnership owns 100% of the voting common stock
of RSI.
MHC Management Limited Partnership owns 100% of the stock of MHC Systems, Inc.
RSI owns 100% of the stock of Realty Systems Nevada, Inc.
118
TERM LOAN NOTE
$40,000,000 April 28, 1998
FOR VALUE RECEIVED, MHC Operating Limited Partnership, an Illinois
limited partnership ("Borrower"), HEREBY PROMISES TO PAY to the order of Xxxxx
Fargo Bank, N.A. ("Lender") at c/o Wells Fargo Bank, N.A., 0000 X. Xxxx Xxxxx,
Xxxxx 000, Xx Xxxxxxx, Xxxxxxxxxx, 00000, the principal sum of Forty Million
Dollars ($40,000,000) together with interest on the unpaid principal balance
hereof at the rates provided below from the date such principal is advanced
until payment in full thereof.
This Note is one of the Loan Notes referred to in and governed by
that certain Amended and Restated Credit Agreement, dated as of the date
hereof, as amended, supplemented or restated from time to time (the "Credit
Agreement"), among Borrower, Manufactured Home Communities, Inc., the Lenders
named therein and Xxxxx Fargo Bank, as Agent for the said Lenders ("Agent"),
which Credit Agreement, among other things, contains provisions for
acceleration of the maturity hereof and payment of certain additional sums to
Lender upon the happening of certain stated events. Any capitalized term used
herein, unless otherwise defined herein, shall have the meaning ascribed to
such term in the Credit Agreement.
The principal amount of this Note will be due and payable, if not
sooner paid, on the Maturity Date, subject to extension as provided in the
Credit Agreement. Borrower may make voluntary prepayments of all or a portion
of the Loan, upon not less than three (3) Business Days prior written notice,
pursuant to the provisions of Section 2.05 of the Credit Agreement.
Interest on the Loan is payable on the terms and at the rates set
forth in the Credit Agreement. In addition to the interest charges described
in the Credit Agreement, the Credit Agreement provides for the payment by
Borrower of various other charges and fees as set forth more fully in the
Credit Agreement.
Upon the occurrence of an Event of Default described in Section 9.01
(g) or Section 9.01(h) of the Credit Agreement, this Note shall, without
demand, notice or legal process of any kind, automatically become immediately
due and payable. Upon and after the occurrence and continuance of any other
Event of Default, this Note may, at the option or with the consent of Requisite
Lenders, and without demand, notice or legal process of any kind (except as
specifically set forth in the Credit Agreement), be declared, and immediately
shall become, due and payable, unless such Event of Default is waived or such
acceleration is rescinded as provided in the Credit Agreement.
Demand, presentment, protest and notice of nonpayment and protest,
notice of intention to accelerate maturity, notice of acceleration of maturity
and notice of dishonor are
S-1
119
hereby waived by Borrower, except to the extent specifically provided for in
the Credit Agreement. Subject to the terms of the Credit Agreement, Agent on
behalf of the Lenders may extend the time of payment of this Note, postpone the
enforcement hereof, grant any indulgences, release any party primarily or
secondarily liable hereon or agree to any substitution, subordination, exchange
or release of any security without affecting or diminishing Lender's right of
recourse against Borrower, which right is hereby expressly reserved.
This Note has been delivered and accepted at Chicago, Illinois and
shall be interpreted, and the rights and liabilities of the parties hereto
determined, in accordance with, and governed by the laws of the State of
Illinois.
Whenever possible each provision of this Note shall be interpreted in
such manner as to be effective and valid under applicable law, but if any
provision of this Note shall be prohibited by or invalid under applicable law,
such provision shall be ineffective to the extent of such prohibition or
invalidity, without invalidating the remainder of such provision or the
remaining provisions of this Note.
MHC OPERATING LIMITED PARTNERSHIP, an
Illinois limited partnership
By: MANUFACTURED HOME COMMUNITIES,
INC., a Maryland corporation, as General Partner
By: /s/ Xxxxxx X. Xxxxxxxx
-----------------------------
Name: Xxxxxx X. Xxxxxxxx
----------------------------
Title: EVP & CFO
---------------------------
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120
TERM LOAN NOTE
$20,000,000 April 28, 1998
FOR VALUE RECEIVED, MHC Operating Limited Partnership, an Illinois limited
partnership ("Borrower"), HEREBY PROMISES TO PAY to the order of Bank of
America National Trust and Savings Association ("Lender") at c/o Wells Fargo
Bank, N.A., 0000 X. Xxxx Xxxxx, Xxxxx 000, Xx Xxxxxxx, Xxxxxxxxxx, 00000, the
principal sum of Twenty Million Dollars ($20,000,000) together with interest on
the unpaid principal balance hereof at the rates provided below from the date
such principal is advanced until payment in full thereof.
This Note is one of the Loan Notes referred to in an governed by that
certain Amended and Restated Credit Agreement, dated as of the date hereof, as
amended, supplemented or restated from time to time (the "Credit Agreement"),
among Borrower, Manufactured Home Communities, Inc., the Lenders named therein
and Xxxxx Fargo Bank, as Agent for the said Lenders ("Agent"), which Credit
Agreement, among other things, contains provisions for acceleration of the
maturity hereof and payment of certain additional sums to Lender upon the
happening of certain stated events. Any capitalized term used herein, unless
otherwise defined herein, shall have the meaning ascribed to such term in the
Credit Agreement.
The principal amount of this Note will be due and payable, if not sooner
paid, on the Maturity Date, subject to extension as provided in the Credit
Agreement. Borrower may make voluntary prepayments of all or a portion of the
Loan, upon not less than three (3) Business Days prior written notice, pursuant
to the provisions of Section 2.05 of the Credit Agreement.
Interest on the Loan is payable on the terms and at the rates set forth in
the Credit Agreement. In addition to the interest charges described in the
Credit Agreement, the Credit Agreement provides for the payment by Borrower of
various other charges and fees as set forth more fully in the Credit Agreement.
Upon the occurrence of an Event of Default described in Section 9.01(g) or
Section 9.01(h) of the Credit Agreement, this Note shall, without demand,
notice or legal process of any kind, automatically become immediately due and
payable. Upon and after the occurrence and continuance of any other Event of
Default, this Note may, at the option or with the consent of Requisite Lenders,
and without demand, notice or legal process of any kind (except as specifically
set forth in the Credit Agreement), be declared, and immediately shall become,
due and payable, unless such Event of Default is waived or such acceleration is
rescinded as provided in the Credit Agreement.
Demand, presentment, protest and notice of nonpayment and protest, notice
of intention to accelerate maturity, notice of acceleration of maturity and
notice of dishonor are
S-1
121
hereby waived by Borrower, except to the extent specifically provided for in
the Credit Agreement. Subject to the terms of the Credit Agreement, Agent on
behalf of the Lenders may extend the time of payment of this Note, postpone the
enforcement hereof, grant any indulgences, release any party primarily or
secondarily liable hereon or agree to any substitution, subordination, exchange
or release of any security without affecting or diminishing Lender's right of
recourse against Borrower, which right is hereby expressly reserved.
This Note has been delivered and accepted at Chicago, Illinois and shall
be interpreted, and the rights and liabilities of the parties hereto
determined, in accordance with, and governed by the laws of the State of
Illinois.
Whenever possible each provision of this Note shall be interpreted in such
manner as to be effective and valid under applicable law, but if any provision
of this Note shall be prohibited by or invalid under applicable law, such
provision shall be ineffective to the extent of such prohibition or invalidity,
without invalidating the remainder of such provision or the remaining
provisions of this Note.
MHC OPERATING LIMITED PARTNERSHIP, an
Illinois limited partnership
By: MANUFACTURED HOME COMMUNITIES,
INC., a Maryland corporation, as General Partner
By: Xxxxxx X. Xxxxxxxx
-----------------------------------------------
Name: Xxxxxx X. Xxxxxxxx
---------------------------------------------
Title: EVP & CFO
--------------------------------------------
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122
TERM LOAN NOTE
$20,000,000 April 28, 1998
FOR VALUE RECEIVED, MHC Operating Limited Partnership, an Illinois
limited partnership ("Borrower"), HEREBY PROMISES TO PAY to the order of
Commerzbank Aktiengesellschaft ("Lender"), at c/o Wells Fargo Bank, N.A., 0000
X. Xxxx Xxxxx, Xxxxx 000, Xx Xxxxxxx, Xxxxxxxxxx, 00000, the principal sum of
Twenty Million Dollars ($20,000,000) together with interest on the unpaid
principal balance hereof at the rates provided below from the date such
principal balance hereof at the rates provided below from the date such
principal is advanced until payment in full thereof.
This Note is one of the Loan Notes referred to in and governed by that
certain Amended and Restated at Credit Agreement, dated as of the date hereof,
as amended, supplemented or restated from time to time (the "Credit Agreement"),
among Borrower, Manufactured Home Communities, Inc., the Lenders named therein
and Xxxxx Fargo Bank, as Agent for the said Lenders ("Agent"), which Credit
Agreement, among other things, contains provisions for acceleration of the
maturity hereof and payment of certain additional sums to Lender upon the
happening of certain stated events. Any capitalized term used herein, unless
otherwise defined herein, shall have the meaning ascribed to such term in the
Credit Agreement.
The principal amount of this Note will be due and payable, if not
sooner paid, on the Maturity Date, subject to extension as provided in the
Credit Agreement. Borrower may make voluntary prepayments of all or a portion
of the Loan, upon not less three (3) Business Days prior written notice,
pursuant to the provisions of Section 2.05 of the Credit Agreement.
Interest on the Loan is payable on the terms and at the rates set
forth in the Credit Agreement. In addition to the interest charges described in
the Credit Agreement, the Credit Agreement provides for the payment by Borrower
of various other charges and fees as set forth more fully in the Credit
Agreement.
Upon the occurrence of an Event of Default described in Section
9.01(g) or Section 9.01(h) of the Credit Agreement, this Note shall, without
demand, notice or legal process of any kind, automatically become immediately
due and payable. Upon and after the occurrence and continuance of any other
Event of Default, this Note may, at the option or with the consent of Requisite
Lenders, and without demand, notice or legal process of any kind (except as
specifically set forth in the Credit Agreement), be declared, and immediately
shall become, due and payable, unless such Event of Default is waived or such
acceleration is rescinded as provided in the Credit Agreement.
Demand, presentment, protest and notice of nonpayment and protest,
notice of intention to accelerate maturity, notice of acceleration of maturity
and notice of dishonor are
S-1
123
hereby waived by Borrower, except to the extent specifically provided for in
the Credit Agreement. Subject to the terms of the Credit Agreement, Agent on
behalf of the Lenders may extended the time of payment of this Note, postpone
the enforcement hereof, grant any indulgences, release any party primarily of
secondarily liable hereon or agree to any substitution, subordination, exchange
or release of any security without affecting or diminishing Lender's right of
recourse against Borrower, which right is hereby expressly reserved.
This Note has been delivered and accepted at Chicago, Illinois and
shall be interpreted, and the rights and liabilities, and the rights and
liabilities of the parties hereto determined, in accordance with, and governed
by the laws of the State of Illinois.
Whenever possible each provision of this Note shall be interpreted in
such manner as to be effective and valid under applicable law, but if any
provision of this Note shall be prohibited by or invalid under applicable law,
such provision shall be ineffective to the extent of such prohibition or
invalidity, without invalidating the reminder of such provision or the remaining
provisions of this Note.
MHC OPERATING LIMITED PARTNERSHIP, an
Illinois limited partnership
By: MANUFACTURED HOME COMMUNITIES,
INC., a Maryland corporation, as General Partner
By: /s/ Xxxxxx X. Xxxxxxxx
------------------------------------------------
Name: Xxxxxx X. Xxxxxxxx
------------------------------------------------
Title: EVP & CFO
------------------------------------------------
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124
TERM LOAN NOTE
$20,000,000 April 28, 1998
FOR VALUE RECEIVED, MHC Operating Limited Partnership, an Illinois
limited partnership ("Borrower"), HEREBY PROMISES TO PAY to the order of Xxxxxx
Guaranty Trust Company ("Lender") at c/o Wells Fargo Bank, N.A., 0000 X. Xxxx
Xxxxx, Xxxxx 000, Xx Xxxxxxx, Xxxxxxxxxx, 00000, the principal sum of Twenty
Million Dollars ($20,000,000) together with interest on the unpaid principal
balance hereof tat the rates provided below from the date such principal is
advanced until payment in full thereof.
This Note is one of the Loan Notes referred to in and governed by that
certain Amended and Restated Credit Agreement, dated as of the date hereof, as
amended, supplemented or restated from time to time (the "Credit Agreement"),
among Borrower, Manufactured Home Communities, Inc., the Lenders named therein
and Xxxxx Fargo Bank, as Agent for the said Lenders ("Agent"), which Credit
Agreement, among other things, contains provisions for acceleration of the
maturity hereof and payment of certain additional sums to Lender upon the
happening of certain stated events. Any capitalized term used herein, unless
otherwise defined herein, shall have the meaning ascribed to such term in the
Credit Agreement.
The principal amount of this Note will be due and payable, if not
sooner paid, on the Maturity Date, subject to extension as provided in the
Credit Agreement. Borrower may make voluntary prepayments of all or a portion of
the Loan, upon not less than three (3) Business Days prior written notice,
pursuant to the provisions of Section 2.05 if the Credit Agreement.
Interest on the Loan is payable on the terms and at the rates set forth
in the Credit Agreement. In addition to the interest charges described in the
Credit Agreement, the Credit Agreement provides for the payment by Borrower of
various other charges and fees as set forth more fully in the Credit Agreement.
Upon the occurrence of an Event of Default described in Section 9.01(g)
or Section 9.01(h) of the Credit Agreement, this Note shall, without demand,
notice or legal process of any kind, automatically become immediately due and
payable. Upon and after the occurrence and continuance of any other Event of
Default, this Note may, at the option or with the consent of Requisite Lenders,
and without demand, notice or legal process of any kind (except as specifically
set forth in the Credit Agreement), be declared, and immediately shall become,
due and payable, unless such Event of Default is waived or such acceleration is
rescinded as provided in the Credit Agreement.
Demand, presentment, protest and notice of nonpayment and protest,
notice of intention to accelerate maturity, notice of acceleration maturity of
and notice of dishonor are
S-1
125
hereby waived by Borrower, except to the extent specifically provided for in
the Credit Agreement. Subject to the terms of the Credit Agreement, Agent on
behalf of the Lenders may extend the time of payment of this Note, postpone the
enforcement hereof, grant any indulgences, release any party primarily or
secondarily liable hereon or agree to any substitution, subordination, exchange
or release of any security without affecting or diminishing Lender's right of
recourse against Borrower, which right is hereby expressly reserved.
This Note has been delivered and accepted at Chicago, Illinois and
shall be interpreted, and the rights and liabilities of the parties hereto
determined, in accordance with, and governed by the laws of the State of
Illinois.
Whenever possible each provision of this Note shall be interpreted in
such manner as to be effective and valid under applicable law, but if any
provision of this Note shall be prohibited by or invalid under applicable law,
such provision shall be ineffective to the extent of such prohibition or
invalidity, without invalidating the remainder of such provision or the
remaining provisions of this Note.
MHC OPERATING LIMITED PARTNERSHIP, an
Illinois limited partnership
By: MANUFACTURED HOME COMMUNITIES,
INC., a Maryland corporation, as General Partner
By: Xxxxxx X. Xxxxxxxx
----------------------------------------------
Name: Xxxxxx X. Xxxxxxxx
--------------------------------------------
Title: EVP & CFO
-------------------------------------------
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126
AMENDED AND RESTATED REIT GUARANTY
(MANUFACTURED HOME COMMUNITIES, INC.)
This REIT Guaranty (this "Guaranty") is made as of April 28, 1998 by
Manufactured Home Communities, Inc., a Maryland corporation ("Guarantor"), in
favor of the Lenders (as defined in the "Credit Agreement" described below) and
Xxxxx Fargo Bank, N.A. ("Agent"), in its capacity as agent for the Lenders and
as a Lender.
Recitals
Concurrently with the execution and delivery of this Guaranty, MHC
Operating Limited Partnership, an Illinois limited partnership ("Borrower"),
Guarantor, Agent and Lenders are entering into a certain Amended and Restated
Credit Agreement of even date herewith (the "Credit Agreement") pursuant to
which Lenders are agreeing to provide a term credit facility to Borrower. This
Guaranty is executed and delivered in order to induce Agent and Lenders to enter
into the Credit Agreement. Unless otherwise specified herein, the capitalized
defined terms used herein shall have the meanings ascribed to such terms in the
Credit Agreement.
Guaranty
1. For valuable consideration, receipt of which is hereby acknowledged,
Guarantor hereby unconditionally guaranties the full and prompt payment when due
and performance of all of the Obligations. The Guarantor agrees that this
Guaranty is a guaranty of payment and performance and not of collection. Nothing
herein shall be construed as requiring Agent or Lenders to exhaust its remedies
against Borrower, or to foreclose any security interest that may in the future
be granted to Agent in any collateral or to exercise any other remedies
available to it, as a condition to proceeding against Guarantor hereunder.
Additional Agreements and Waivers
2. Guarantor hereby agrees that its obligations under this Guaranty
shall be unconditional, irrespective of (i) the validity or enforceability of
the Obligations or any part thereof, or of any other Loan Document, (ii) the
absence of any attempt to collect the Obligations from Borrower or any other
guarantor or other action to enforce the same, (iii) the waiver or consent by
Agent or Lenders with respect to any provision of any Loan Document or any other
agreement now or hereafter executed by Borrower and delivered to Agent and
Lenders, (iv) the failure by Agent to take any steps to perfect and maintain any
Liens that may in the future be granted to Agent against any collateral, (v)
Agent's election, in any proceeding instituted under Chapter 11 of Title 11 of
the United States Code (11 U.S.C. Section 101 et seq.), as amended (the
"Bankruptcy Code") of the application of Section 1111(b)(2) of the Bankruptcy
Code, (vi) any borrowing or grant of a security interest by Borrower as
debtor-in-possession, under Section 364 of the Bankruptcy Code, (vii) the
disallowance, under Section 502 of the Bankruptcy Code, of all or any portion of
Agent's or Lenders' claim(s) for repayment of the Obligations, or (viii)
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any other circumstance which might otherwise constitute a legal or equitable
discharge or defense of Borrower or a guarantor.
3. Effective until the repayment in full of the Obligations, no payment
made by or for the account or benefit of Guarantor (including, without
limitation, (i) a payment made by Guarantor in respect of the Obligations, (ii)
a payment made by any Person under any other guaranty of the Obligations or
(iii) a payment made by means of set-off or other application of funds by Agent
or any of the Lenders) pursuant to this Guaranty shall entitle Guarantor, by
subrogation or otherwise, to any payment by Borrower or from or out of any
property of Borrower, and Guarantor shall not exercise any right or remedy
against Borrower or any property of Borrower including, without limitation, any
right of contribution or reimbursement by reason of any performance by Guarantor
under this Guaranty. Without limitation of any of the foregoing, any
Indebtedness (including, without limitation, interest obligations) of Borrower
to Guarantor now or hereafter existing shall be, and such Indebtedness hereby
is, deferred, postponed and subordinated to the repayment in full of the
Obligations. The provisions of this paragraph shall survive the termination of
this Guaranty or the release or discharge of Guarantor from liability hereunder.
Guarantor and Agent hereby agree that Borrower is and shall be a third party
beneficiary of the provisions of this paragraph.
4. To the extent permitted by law, Guarantor further waives all notices
to which Guarantor might otherwise be entitled, except as otherwise expressly
provided for herein, in the Credit Agreement or in any other agreement or
document executed in connection with the transactions contemplated by the Credit
Agreement. Without limitation of the foregoing, Guarantor, to the extent
permitted by applicable law, hereby waives diligence, presentment, demand of
payment, filing of claims with a court in the event of receivership or
bankruptcy of the Borrower, protest or notice with respect to the Obligations,
all setoffs and counterclaims and all presentments, demands for performance,
notices of nonperformance, protests, notices of protest, notices of dishonor and
notices of acceptance of this Guaranty, the benefits of all statutes of
limitation, and all other demands whatsoever (and shall not require that the
same be made on the Borrower as a condition precedent to Guarantor's obligations
hereunder). Guarantor further waives all notices of the existence, creation or
incurring of new or additional indebtedness, arising either from additional
loans extended to the Borrower or otherwise, and also waives, to the extent
permitted by law, all notices that the principal amount, or any portion thereof,
and/or any interest on any instrument or document evidencing all or any part of
the Obligations is due, notices of any and all proceedings to collect from the
maker, any endorser or any guarantor of all or any part of the Obligations or
from any other party, and, to the extent permitted by law, notices of exchange,
sale, surrender or other handling of any security given to the Lenders and the
Agent to secure payment of all or any part of the Obligations.
5. Guarantor covenants that this guaranty will not be discharged
except by complete and irrevocable payment and performance of the obligations
and liabilities guaranteed herein. No notice to Guarantor or any other party
shall be required for Agent or Lenders to make
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demand hereunder. Such demand shall constitute a mature and liquidated claim
against Guarantor. Upon the occurrence of an Event of Default described in
Section 9.01(g) or Section 9.01(h) or upon the occurrence and continuance of any
other Event of Default, Agent may, at its sole election, proceed directly and at
once, without notice, against Guarantor to collect and recover the full amount
or any portion of the Obligations, without first proceeding against Borrower,
any other Person or any other collateral. Agent and Lenders shall have the
exclusive right to determine the application of payments and credits, if any,
from Guarantor, Borrower or from any other person, firm or corporation, on
account of the Obligations.
6. To the extent permitted by applicable law, Agent is hereby
authorized, without notice or demand to Guarantor (but without limiting any
requirements of notice and demand to Borrower) and without affecting the
liability of Guarantor hereunder or under any of the other Loan Documents
executed by Guarantor, from time to time, (i) to renew, extend, accelerate or
otherwise change the time for payment of, or other terms relating to, all or any
part of the Obligations, or to otherwise modify, amend or change the terms of
any of the Loan Documents; (ii) to accept partial payments on all or any part of
the Obligations; (iii) to take and hold security or collateral for the payment
of all or any part of the Obligations, or any guaranties of all or any part of
the Obligations or other liabilities of Borrower, (iv) to exchange, enforce,
waive and release any such security or collateral; (v) to apply such security or
collateral and direct the order or manner of sale thereof as in its discretion
it may determine; (vi) to settle, release, exchange, enforce, waive, compromise
or collect or otherwise liquidate all or any part of the Obligations, any
guaranty of all or any part of the Obligations and any security or collateral
for the Obligations or for any such guaranty. Guarantor agrees, to the extent
permitted by applicable law, that any of the foregoing may be done in any
manner, without affecting or impairing the obligations of Guarantor hereunder or
under any of the other Loan Documents executed by Guarantor.
7. At any time after maturity of the Obligations, Agent may, in its
sole discretion, with notice (solely as may be provided for in the Credit
Agreement) to Guarantor and regardless of the acceptance of any collateral for
the payment hereof, appropriate and apply toward payment of the Obligations (i)
any Indebtedness due or to become due from Agent or any of Lenders to Guarantor
and (ii) any moneys, credits or other property belonging to Guarantor at any
time held by or coming into the possession of Agent or any of Lenders or any
affiliates thereof, whether for deposit or otherwise. Agent and Lenders shall
appropriate and apply towards payment of the Obligations only moneys, credits or
other property of Guarantor and of Guarantor's direct and indirect wholly-owned
subsidiaries.
8. Notwithstanding any provision of this Guaranty to the contrary, it
is NOT INTENDED THAT THIS GUARANTY CONSTITUTE A "FRAUDULENT CONVEYANCE" (as
defined below). CONSEQUENTLY, GUARANTOR AGREES THAT IF THE GUARANTY WOULD, BUT
FOR THE APPLICATION of this sentence, constitute a Fraudulent Conveyance, this
Guaranty shall be valid and enforceable only to the maximum extent that would
not cause this Guaranty to constitute a Fraudulent
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Conveyance, and this Guaranty shall automatically be deemed to have been amended
accordingly at all relevant times. For purposes hereof, a "Fraudulent
Conveyance" means a fraudulent conveyance under Section 548 of the Bankruptcy
Code (or any successor section) or a fraudulent conveyance or fraudulent
transfer under the provisions of any applicable fraudulent conveyance or
fraudulent transfer law or similar law of any state, nation or other
governmental unit, as in effect from time to time.
9. The obligations of Guarantor under this Guaranty shall not be
altered, limited or affected by any proceeding, voluntary or involuntary,
involving the bankruptcy, insolvency, receivership, reorganization, liquidation
or arrangement of Borrower or by any defense which Borrower may have by reason
of the order, decree or decision of any court or administrative body resulting
from any such proceeding. Guarantor acknowledges and agrees that any interest on
the Obligations which accrues after the commencement of any such proceeding (or,
if interest on any portion of the Obligations ceases to accrue by operation of
law by reason of the commencement of said proceeding, such interest as would
have accrued on any such portion of the Obligations if said proceedings had not
been commenced) shall be included in the Obligations, since it is the intention
of the parties that the amount of the Obligations which is guaranteed by
Guarantor pursuant to this Guaranty should be determined without regard to any
rule of law or order which may relieve Borrower of any portion of such
Obligations. Guarantor will permit, to the extent permitted by law, any trustee
in bankruptcy, receiver, debtor in possession, assignee for the benefit of
creditors or similar person to pay Agent for the benefit of the Lenders, or
allow the claim of Agent in respect of, any such interest accruing after the
date on which such proceeding is commenced.
10. Guarantor consents and agrees that neither Agent nor any Lender
shall be under any obligation to marshal any assets in favor of Guarantor or
against or in payment of any or all of the Obligations. Guarantor further agrees
that, to the extent that Borrower makes a payment or payments to Agent or
Lenders, or Agent receives any proceeds of any collateral, for its benefit and
the ratable benefit of Lenders, which payment or payments or any part thereof
are subsequently invalidated, declared to be fraudulent or preferential, set
aside or required to be repaid to Borrower, its estate, trustee, receiver or any
other party, including without limitation Guarantor, under any bankruptcy law,
state or federal law, common law or equitable cause, then to the extent of such
payment or repayment, the Obligations or the part thereof which has been paid,
reduced or satisfied by such amount shall be reinstated and continued in full
force and effect as of the date such initial payment, reduction or satisfaction
occurred, and this Guaranty shall continue to be in existence and in full force
and effect, irrespective of whether any evidence of indebtedness has been
surrendered or cancelled.
11. No delay on the part of agent or lenders in the exercise of any
right or remedy shall operate as a waiver thereof, and no single or partial
exercise by Agent or Lenders of any right or remedy shall preclude any further
exercise thereof, nor shall any modification or waiver of any of the provisions
of this Guaranty be binding upon Agent or Lenders, except as
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expressly set forth in a writing duly signed and delivered on Agent's behalf by
an authorized officer or agent of Agent. Agent's or Lenders' failure at any time
or times hereafter to require strict performance by Borrower or Guarantor of any
of the provisions, warranties, terms and conditions contained in any Loan
Document, agreement, guaranty instrument or document now or at any time or times
executed by Borrower, Guarantor or any other Person obligated under the Loan
Documents shall not constitute a waiver of or affect or diminish any right of
Agent and Lenders at any time or times hereafter to demand strict performance
thereof and such right shall not be deemed to have been waived by any act or
knowledge of Agent or Lenders, or their respective agents, officers or
employees, unless such waiver is contained in an instrument in writing signed by
an officer or agent of Agent and directed to Borrower, Guarantor or such other
Person, as applicable, specifying such waiver. No waiver by Agent or Lenders of
any default shall operate as a waiver of any other default or the same default
on a future occasion, and no action by Agent or Lenders permitted hereunder
shall in any way affect or impair Agent's or Lenders' rights or the obligations
of Guarantor under this Guaranty. Any determination by a court of competent
jurisdiction of an amount owing by Borrower to Agent or Lenders, or both, shall
be conclusive and binding on Guarantor irrespective of whether Guarantor was a
party to the suit or action in which such determination was made.
12. Guarantor will file all claims against Borrower in any bankruptcy
or other proceeding in which the filing of claims is required or permitted by
law upon any indebtedness of Borrower to Guarantor or claim against Borrower by
Guarantor and will assign to Agent for the benefit of the Lenders all rights of
Guarantor thereunder. If Guarantor does not file any such claim, Agent, as
attorney-in-fact for Guarantor, is hereby authorized to do so in the name of
Guarantor or, in Agent's discretion, to assign the claim and to cause proof of
claim to be filed in the name of Agent's nominee. Agent or its nominee shall
have the sole right to accept or reject any plan proposed in such proceeding and
to take any other action which a party filing a claim is entitled to take. In
all such cases, whether in administration, bankruptcy or otherwise, the person
or persons authorized to pay such claim shall pay to Agent the full amount
payable on such claims, and, to the full extent necessary for that purpose,
Guarantor hereby assigns to Agent for the benefit of the Lenders all of
Guarantor's rights to any such payments or distributions to which Guarantor
would otherwise be entitled; provided, however, that Guarantor's obligations
hereunder shall not be satisfied except to the extent that Agent receives cash
by reason of any such payment or distribution. If Agent receives anything
hereunder other than cash, the same shall be held as collateral for amounts due
under this Agreement.
13. This Guaranty shall be binding upon Guarantor and upon the
successor and permitted assigns of Guarantor and shall inure to the benefit of
Agent's and Lenders' respective successors and assigns. All references herein to
borrower shall be deemed to include its successors, transferees and permitted
assigns and all references herein to Agent or Lenders shall be deemed to include
their successors, transferees and assigns. Borrower's successors and permitted
assigns shall include, without limitation, a receiver, trustee or debtor in
possession of
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or for Borrower. All references to the singular shall be deemed to include the
plural, and vice versa, where the context so requires.
14. Guarantor is fully aware of the financial condition of Borrower and
is executing and delivering this Guaranty based solely upon Guarantor's own
independent investigation of all matters pertinent hereto and is not relying in
any manner upon any representation or statement of Agent. Guarantor represents
and warrants that Guarantor is in a position to obtain, and Guarantor hereby
assumes full responsibility for obtaining, any additional information concerning
Borrower's financial condition and any other matter pertinent hereto as
Guarantor may desire, and Guarantor is not relying upon or expecting Agent to
furnish to Guarantor any information now or hereafter in Agent's possession
concerning the same or any other matter. By executing this Guaranty, Guarantor
knowingly accepts the full range of risks encompassed within a contract of this
type, which risks Guarantor acknowledges. Guarantor shall have no right to
require Agent to obtain or disclose any information with respect to the
Obligations, the financial condition or character of Borrower or Borrower's
ability to perform the Obligations, the existence or nonexistence of any other
guaranties of all or any part of the Obligations, any action or nonaction on the
part of Agent, Borrower, or any other person, or any other matter, fact or
occurrence whatsoever.
15. Guarantor understands and agrees that, in accordance with the terms
of the Credit Agreement, any Lender may elect, at any time, to sell, assign, or
participate all or any part of such Lender's interest in the Loan and the
Facility, and that any such sale, assignment or participation may be to one or
more Persons as provided in Section 10.11 of the Credit Agreement. Subject to
Section 11.17 of the Credit Agreement, Guarantor further agrees that Agent or
any Lender may disseminate to any such potential purchaser(s), assignee(s) or
participant(s) all documents and information (including without limitation all
financial information) which has been or is hereafter provided to or known to
Agent or any Lender with respect to: (a) the Property owned or leased by
Guarantor and its operation; (b) any party connected with the Loans (including,
without limitation, Guarantor, Borrower, any partner of Borrower or Guarantor or
any other guarantor); and/or (c) any lending relationship other than the
Facility which Agent or any Lender may have with any party connected with the
Facility.
16. ALL JUDICIAL PROCEEDINGS BROUGHT AGAINST GUARANTOR WITH RESPECT TO
THIS GUARANTY OR ANY OTHER LOAN DOCUMENT MAY BE AND ALL JUDICIAL PROCEEDINGS
BROUGHT BY GUARANTOR WITH RESPECT TO THIS GUARANTY OR ANY OTHER LOAN DOCUMENT
SHALL BE BROUGHT IN ANY STATE OR FEDERAL COURT OF COMPETENT JURISDICTION HAVING
SITUS WITHIN THE BOUNDARIES OF THE FEDERAL COURT DISTRICT OF THE NORTHERN
DISTRICT OF ILLINOIS, AND BY EXECUTION AND DELIVERY OF THIS GUARANTY, GUARANTOR
ACCEPTS, FOR ITSELF AND IN CONNECTION WITH ITS PROPERTIES, GENERALLY AND
UNCONDITIONALLY, THE JURISDICTION OF THE AFORESAID COURTS, AND IRREVOCABLY
AGREES TO BE BOUND BY ANY FINAL JUDGMENT
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RENDERED THEREBY FROM WHICH NO APPEAL HAS BEEN TAKEN OR IS AVAILABLE. GUARANTOR
HEREBY DESIGNATES AND APPOINTS XXXXX XXXXXXXX, ESQ., MANUFACTURED HOME
COMMUNITIES, INC., XXX XXXXX XXXXXXXXX XXXXX, XXXXX 000, XXXXXXX, XXXXXXXX
00000, TO RECEIVE ON ITS BEHALF SERVICE OF ALL PROCESS IN ANY SUCH PROCEEDINGS
IN ANY SUCH COURT, SUCH SERVICE BEING HEREBY ACKNOWLEDGED BY SUCH PERSON TO BE
EFFECTIVE AND BINDING SERVICE IN EVERY RESPECT. SUCH APPOINTMENT SHALL BE
REVOCABLE ONLY WITH AGENT'S PRIOR WRITTEN APPROVAL. GUARANTOR IRREVOCABLY
CONSENTS TO THE SERVICE OF PROCESS OF ANY OF THE AFOREMENTIONED COURTS IN ANY
SUCH ACTION OR PROCEEDING BY THE MAILING OF COPIES THEREOF BY REGISTERED OR
CERTIFIED MAIL, POSTAGE PREPAID, TO ITS NOTICE ADDRESS SPECIFIED ON THE
SIGNATURE PAGES HEREOF, SUCH SERVICE TO BECOME EFFECTIVE UPON RECEIPT.
GUARANTOR, AGENT AND LENDERS IRREVOCABLY WAIVE (A) TRIAL BY JURY IN ANY ACTION
OR PROCEEDING WITH RESPECT TO THIS GUARANTY OR ANY OTHER LOAN DOCUMENT, AND (B)
ANY OBJECTION (INCLUDING WITHOUT LIMITATION ANY OBJECTION OF 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 WITH RESPECT TO THIS
GUARANTY OR ANY OTHER LOAN DOCUMENT IN ANY JURISDICTION SET FORTH ABOVE. NOTHING
HEREIN SHALL AFFECT THE RIGHT TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY
LAW OR SHALL LIMIT THE RIGHT OF AGENT OR ANY LENDER TO BRING PROCEEDINGS AGAINST
GUARANTOR IN THE COURTS OF ANY OTHER JURISDICTION. GUARANTOR AGREES THAT IT WILL
NOT ASSERT ANY PERMISSIVE COUNTERCLAIM IN ANY PROCEEDING BROUGHT BY AGENT OR ANY
LENDER WITH RESPECT TO THIS GUARANTY OR ANY OTHER LOAN DOCUMENT.
17. This Guaranty shall be governed by, and shall be construed and
enforced in accordance with, the laws of the State of Illinois without regard to
conflict of law principles.
18. Wherever possible, each provision of this Guaranty shall be
interpreted in such manner as to be effective and valid under applicable law,
but if any provision of this Guaranty shall be prohibited by or invalid under
such law, such provision shall be ineffective to the extent of such prohibition
or invalidity without invalidating the remainder of such provision or the
remaining provisions of this Guaranty.
19. This Guaranty amends and restates in its entirety that certain REIT
Guaranty dated as of April 3, 1997 executed by Guarantor in connection with the
Existing Credit Agreement, as such REIT Guaranty has been heretofore amended,
modified and confirmed.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, this Guaranty has been duly executed by Guarantor
as of this 28th day of April 1998.
GUARANTOR:
MANUFACTURED HOME COMMUNITIES, INC.
a Maryland corporation
By: Xxxxx Xxxxxxxx
--------------------------------
Name: Xxxxx Xxxxxxxx
-----------------------------
Title: Executive VP/General Counsel
-----------------------------
Address: Xxx Xxxxx Xxxxxxxxx Xxxxx,
Xxxxx 000
Xxxxxxx, Xxxxxxxx 00000
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SOLVENCY CERTIFICATE
(MHC OPERATING LIMITED PARTNERSHIP)
1, Xxxxxx X. Xxxxxxxx, the Chief Financial Officer of Manufactured Home
Communities, Inc., a Maryland corporation (the "REIT"), which is the general
partner of MHC Operating Limited Partnership, an Illinois limited partnership
(the "Borrower"), in my capacity as Chief Financial Officer of the REIT, hereby
certify to Xxxxx Fargo Bank, N.A. as agent for the lenders (the "Lenders")
under the Amended and Restated Credit Agreement of even date herewith (as
amended, supplemented or restated from time to time, the "Credit Agreement) by
and among the Borrower, the REIT, Agent and the Lenders, and to the Lenders
that:
1. I am the duly elected, qualified and acting Chief Financial Officer
of the REIT, which is the general partner of the Borrower, and I am familiar
with the business and financial matters hereinafter described.
2. This Certificate is made and delivered to Xxxxx Fargo Bank, N.A., as
Agent on behalf of the Lenders, for the purpose of inducing the Lenders to
advance the Loan Increase (as defined in the Credit Agreement) to Borrower,
pursuant to the Credit Agreement. Each capitalized term used herein without
definition shall have the meaning ascribed to such term in the Credit Agreement.
3. Immediately following the execution of the Loan Documents to which
it is a party, including without limitation, the Credit Agreement, the Borrower
will be able to pay its debts as they mature, will have capital sufficient to
carry on its business and all businesses in which it presently intends to engage
and will have assets which will have a present fair salable value and a fair
valuation greater than the amount of its liabilities, whether direct or
contingent.
4. The Borrower does not intend to incur debts beyond its ability to
pay them as they mature.
5. The Borrower does not contemplate filing a petition in bankruptcy or
for an arrangement or reorganization under Federal bankruptcy law, nor to its
knowledge are there any threatened bankruptcy or insolvency proceedings against
the Borrower.
[SIGNATURE PAGE FOLLOWS]
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Dated: April 28, 1998
MHC OPERATING LIMITED PARTNERSHIP, an
Illinois limited partnership
By: MANUFACTURED HOME
COMMUNITIES, INC., a Maryland
corporation as
General Partner
By: Xxxxxx X. Xxxxxxxx
------------------------
Name: Xxxxxx X. Xxxxxxxx
----------------------
Title: EUP & CFO
---------------------
Signature page to Solvency Certificate of MHC Operating Limited Partnership
(Term).
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SOLVENCY CERTIFICATE
(MANUFACTURED HOME COMMUNITIES, INC.)
I, Xxxxxx X. Xxxxxxxx, the Chief Financial Officer of Manufactured Home
Communities, Inc., a Maryland corporation (the "REIT"), which is the general
partner of MHC Operating Limited Partnership, an Illinois limited partnership
(the "Borrower"), in my capacity as Chief Financial Officer of the REIT, hereby
certify to Xxxxx Fargo Bank, N.A. as agent for the lenders (the "Lenders") under
the Amended and Restated Credit Agreement of even date herewith (as amended,
supplemented or restated from time to time, the "Credit Agreement) by and among
the Borrower, the REIT, Agent and the Lenders, and to the Lenders that:
1. I am the duly elected, qualified and acting Chief Financial Officer
of the REIT, which is the general partner of the Borrower, and I am familiar
with the business and financial matters hereinafter described.
2. This Certificate is made and delivered to Xxxxx Fargo Bank, N.A., as
Agent on behalf of the Lenders, for the purpose of inducing the Lenders to
advance the Loan Increase (as defined in the Credit Agreement) to Borrower,
pursuant to the Credit Agreement. Each capitalized term used herein without
definition shall have the meaning ascribed to such term in the Credit Agreement.
3. Immediately following the execution of the Loan Documents to which
it is a party, including without limitation, the REIT Guarantee, the REIT will
be able to pay its debts as they mature, will have capital sufficient to carry
on its business and all businesses in which it presently intends to engage and
will have assets which will have a present fair salable value and a fair
valuation greater than the amount of its liabilities, whether direct or
contingent.
4. The REIT does not intend to incur debts beyond its ability to pay
them as they mature.
5. The REIT does not contemplate filing a petition in bankruptcy or for
an arrangement or reorganization under Federal bankruptcy law, nor to its
knowledge are there any threatened bankruptcy or insolvency proceedings against
the REIT.
[SIGNATURE PAGE FOLLOWS]
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Dated: April 28, 1998
MANUFACTURED HOME COMMUNITIES,
INC., a Maryland corporation, as General Partner
By: Xxxxxx X. Xxxxxxxx
----------------------------------------------
Name: Xxxxxx X. Xxxxxxxx
--------------------------------------------
Title: EVP & CFO
-------------------------------------------
Signature page to Solvency Certificate of MHC Operating Limited Partnership
(Term).
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COMPLIANCE CERTIFICATE
This Compliance Certificate is delivered pursuant to the Amended and
Restated Credit Agreement dated as of April 28, 1998 (as amended, supplemented
and restated from time to time, the "Credit Agreement"), among MHC Operating
Limited Partnership, the Lenders (as defined therein or made party thereto), and
Xxxxx Fargo Bank, N.A., as Agent. All capitalized defined terms used herein
shall have the meaning ascribed to such terms in the Credit Agreement.
1. The undersigned hereby certifies that the undersigned has reviewed
the terms of the Credit Agreement and other Loan Documents and has made a review
in reasonable detail of the transactions consummated by and financial condition
of the REIT, the Borrower, the Subsidiaries and the Agreement Parties during the
accounting period covered by the financial statements being delivered to Lender
along with this Compliance Certificate and
(a) Such review has not disclosed the existence during or at the end of
such accounting period, and the undersigned does not have knowledge of
the existence as of the date hereof, of any condition or event which
constitutes an Unmatured Event of Default or an Event of Default
(except as set forth in paragraph (b) hereof).
(b) The financial statements being delivered to Agent along with this
Compliance Certificate have been prepared in accordance with the books
and records of the REIT, on a consolidated basis, and fairly present
the financial condition of the REIT, on a consolidated basis, at the
date thereof (if applicable, subject to normal year-end adjustments)
and the results of operations and cash flows, on a consolidated basis,
for the period then ended.
(c) The nature and period of existence of the condition(s) or event(s)
which constitute an Unmatured Event(s) of Default or an Event(s) of
Default is (are) as follows: None.
(d) Borrower (is taking) (is planning to take) the following action
with respect to the condition(s) or event(s) set forth in paragraph (b)
above: N/A
2. As of the end of the most recently ended accounting period
(March 31, 1998):
(a) Total Liabilities to Gross Asset Value. Total Liabilities:
$589,989,000.00 Gross Asset Value: $1,183,980,000.00. Ratio: 0.49:1
(Ratio not to exceed 0.6: 1).
(b) Secured Debt to Gross Asset Value. Secured Debt: $409,500,000.00.
GROSS ASSET Value: $1,183,980,000.00. Ratio: 0.35:1 (Ratio not to
exceed 0.4:1).
(c) EBITDA to Interest Expense EBITDA: $25,824,000.00. Interest
Expense: $10,019,000.00. Ratio: 2.61 (Ratio not to be less than 2.01)
(d) EBITDA to Fixed Charges Ratio. EBITDA: $25,824,000-00. Fixed
Charges: $11,954,000.00. Ratio: 2.2:1 (Ratio not to be less than
1.75:1).
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(e) Unencumbered Net Operating Income to Unsecured Interest Expense.
Unencumbered Net Operating Income: $11,336,000.00. Unsecured Interest Expense:
$2,360,000.00. Ratio: 4.8:1 (Ratio not to be less than 1.80:1).
(f) Unencumbered Pool. Borrower shall not permit the ratio of (a) the
sum of (i) Unencumbered Asset value: $518,236,000.00; (ii) Cash and Cash
Equivalents owned by Borrower subject to no Lien in excess of $10MM: $0 to (b)
outstanding Unsecured Debt: $150,488,000.00. Ratio: 3.4:1 (Ratio not to be less
than 1.80:1).
(g) Minimum Net Worth. Borrower will maintain Net Worth of not less
than $258,317,100 plus 90% of all Net Offering Proceeds received by the REIT or
Borrower after September 30, 1996. Net Worth: $386,878,000.00.
(h) Permitted Holdings. Borrower and its Subsidiaries may acquire or
maintain the following Permitted Holdings so long as (i) the aggregate value
whether held directly or indirectly by Borrower and its Subsidiaries does not
exceed, at any time, 20% of Gross Asset Value for the Borrower as a whole and
(ii) the value of each Permitted Holding does not exceed, at any time the
following percentages of Borrower's Gross Asset Value:
PERMITTED HOLDINGS MAXIMUM % OF GROSS
ASSET VALUE
-------------------------------------- ------------------- ----------------
- Non manufactured home community 10% 0.6%
property (other than cash or Cash
Equivalents
- Land 5% 0%
- Securities (issued by REITs primarily 5% 0%
engaged in the development, ownership
and management of Manufactured Home
communities
- Manufactured Home community Mortgage 10% 1.1%
other than mortgage indebtedness which
is either eliminated in the consolidation
of the REIT, Borrower and the Subsidiaries
or accounted for as investments in real
estate under GAAP
- Manufactured Home Community Partnership 10% 0.5%
Interest other than Controlled Partnership
Interest
- Development Activity 10% 0.5%
3. All representations and warranties contained in the above-referenced
Credit Agreement remain true and correct in all material respects. No Event
of Default described in Section 9.01(g) or Section 9.01(h) has occurred and no
other Event of Default or Unmatured
2
140
Event of Default has occurred and is continuing. There has been no Material
Adverse Effect to the Borrower or the REIT.
4. As of the end of the Fiscal Quarter covered by the financial
statements being delivered to Agent along with this Compliance Certificate, the
weighted average occupancy rate of the Properties listed on Exhibit F to the
Credit Agreement together with those designated by Borrower is at least
eight-five percent (85%)
Xxxxxx X. Xxxxxxxx
Date: April 28, 1998 --------------------------------------
Xx. Xxxxxx X. Xxxxxxxx
Chief Financial Officer of the REIT
3
141
MHC OPERATING LIMITED PARTNERSHIP
Xxx Xxxxx Xxxxxxxxx Xxxxx, Xxxxx 000
Xxxxxxx, Xxxxxxxx 00000
312/474-0205
Fee Letter
April 28, 11998
Xxxxx Fargo Bank, N.A.
000 Xxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxx Xxxxxx
Re: Arrangement and Administrative Fees
Dear Xxxxx:
Reference is made to that certain Amended and Restated Credit Agreement
of even date herewith (the "Credit Agreement"), among MHC Operating Limited
Partnership ("Borrower"), Manufactured Home Communities, Inc. (the "REIT"), the
financial institutions named therein (the "Lenders") and Xxxxx Fargo Bank,
N.A., as Agent ("Agent"). In consideration for the execution and delivery of the
Credit Agreement by Agent and Lenders, Borrower hereby agrees to pay the
following fees not described in the Credit Agreement:
1. Arrangement Fee. Borrower shall pay Agent an arrangement fee of
Fifty Thousand Dollars ($50,000) on the date hereof.
2. Administrative Fee. Borrower shall also pay Agent an administrative
fee of Ten Thousand Dollars ($10,000) per year throughout the entire term of the
Credit Agreement, payable for the first year in advance on the date hereof and
for each year thereafter in advance on each anniversary of the date hereof.
000
Xxxx Xxxxx Xxxx,X.X.
April 28, 1998
Page 2
All fees described herein shall be fully earned when paid and shall
not be refundable for any reason, including early termination of the Credit
Agreement.
The fees, indemnities and other amounts payable pursuant to the Credit
Agreement shall be in addition to the fees provided herein.
Very truly yours,
MHC OPERATING LIMITED PARTNERSHIP,
an Illinois corporation,
By: MANUFACTURED HOME COMMUNITIES, INC.,
a Maryland corporation, its general
partner
By: Xxxxx Xxxxxxxx
-------------------------------------
Name: Xxxxx Xxxxxxxx
-----------------------------------
Title: Executive BP/General Counsel
----------------------------------
Accepted and agreed as of
April 28, 1998
XXXXX FARGO BANK, N.A.
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
143
Well Fargo Bank, N.A.
April 28, 1998
Page 2
All fees described herein shall be fully earned when paid and shall
not be refundable for any reason, including early termination of the Credit
Agreement.
The fees, indemnities and other amounts payable pursuant to the Credit
Agreement shall be in addition to the fees provided herein.
Very truly yours,
MHC OPERATING LIMITED PARTNERSHIP,
an Illinois corporation,
By: MANUFACTURED HOME COMMUNITIES, INC.,
a Maryland corporation, its general
partner
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
Accepted and agreed as of
April 28, 1998
XXXXX FARGO BANK, N.A.
By: Xxxxxx X. Xxxxxx
-------------------------------------
Name: Xxxxxx X. Xxxxxx
----------------------------------
Title: Vice President
---------------------------------
