EXHIBIT 10.1
REVOLVING CREDIT AGREEMENT
AMONG
AMERIVEST PROPERTIES INC.
and
FLEET NATIONAL BANK, AS ADMINISTRATIVE AGENT
and
THE LENDERS PARTY HERETO
TABLE OF CONTENTS
ss.1. DEFINITIONS AND RULES OF INTERPRETATION...............................1
ss.1.1. DEFINITIONS..................................................1
ss.1.2. RULES OF INTERPRETATION.....................................16
ss.2. REVOLVING CREDIT FACILITY............................................17
ss.2.1. COMMITMENT TO LEND; LIMITATION ON TOTAL COMMITMENT..........17
ss.2.2. CHANGES IN TOTAL COMMITMENT.................................17
ss.2.3. THE NOTES...................................................18
ss.2.4. INTEREST ON LOANS...........................................19
ss.2.5. REQUESTS FOR LOANS..........................................19
ss.2.6. CONVERSION OPTIONS..........................................19
ss.2.7. FUNDS FOR LOANS.............................................20
ss.2.8. LETTERS OF CREDIT...........................................21
ss.3. REPAYMENT OF THE LOANS...............................................24
ss.3.1. MATURITY....................................................24
ss.3.2. MANDATORY REPAYMENTS OF LOAN................................24
ss.3.3. OPTIONAL REPAYMENTS OF LOANS................................24
ss.4. CERTAIN GENERAL PROVISIONS...........................................25
ss.4.1. FEES........................................................25
ss.4.2. COMMITMENT FEE..............................................25
ss.4.3. FUNDS FOR PAYMENTS..........................................26
ss.4.4. COMPUTATIONS................................................26
ss.4.5. ADDITIONAL COSTS, ETC.......................................27
ss.4.6. CAPITAL ADEQUACY............................................28
ss.4.7. CERTIFICATE.................................................28
ss.4.8. INDEMNITY...................................................28
ss.4.9. INTEREST ON OVERDUE AMOUNTS.................................28
ss.4.10. INABILITY TO DETERMINE EURODOLLAR RATE......................28
ss.4.11. ILLEGALITY..................................................29
ss.4.12. REPLACEMENT OF LENDERS......................................29
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ss.5. COLLATERAL SECURITY; NO LIMITATION ON RECOURSE.......................30
ss.5.1. COLLATERAL SECURITY..........................................30
ss.5.2. NO LIMITATION ON RECOURSE....................................30
ss.5.3. ADDITIONAL PROPERTIES........................................30
ss.5.3. ADDITIONAL PROPERTIES........................................30
ss.5.4. CONDITIONS TO APPROVAL OF ADDITIONAL PROPERTIES..............31
ss.5.5. RELEASE OF MORTGAGED PROPERTIES..............................31
ss.5.6. CHATEAU PLAZA RESERVE ACCOUNT................................32
ss.6. REPRESENTATIONS AND WARRANTIES.......................................32
ss.6.1. AUTHORITY; ETC..............................................32
ss.6.2. GOVERNMENTAL APPROVALS......................................33
ss.6.3. TITLE TO PROPERTIES; LEASES.................................34
ss.6.4. FINANCIAL STATEMENTS........................................34
ss.6.5. NO MATERIAL CHANGES.........................................34
ss.6.6. FRANCHISES, PATENTS, COPYRIGHTS, ETC........................35
ss.6.7. LITIGATION..................................................35
ss.6.8. NO MATERIALLY ADVERSE CONTRACTS, ETC........................35
ss.6.9. COMPLIANCE WITH OTHER INSTRUMENTS, LAWS, ETC................35
ss.6.10. TAX STATUS..................................................35
ss.6.11. EVENT OF DEFAULT............................................35
ss.6.12. INVESTMENT COMPANY ACT......................................36
ss.6.13. ABSENCE OF FINANCING STATEMENTS, ETC........................36
ss.6.14. SETOFF, ETC.................................................36
ss.6.15. CERTAIN TRANSACTIONS........................................36
ss.6.16. BENEFIT PLANS; MULTIEMPLOYER PLANS; GUARANTEED PENSION
PLANS.......................................................36
ss.6.17. REGULATIONS U AND X.........................................36
ss.6.18. ENVIRONMENTAL COMPLIANCE....................................36
ss.6.19. SUBSIDIARIES AND AFFILIATES.................................38
ss.6.20. LEASES......................................................38
ss.6.21. LOAN DOCUMENTS..............................................39
ss.6.22. MORTGAGED PROPERTIES........................................39
ss.7. AFFIRMATIVE COVENANTS OF THE BORROWER................................41
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ss.7.1. PUNCTUAL PAYMENT............................................41
ss.7.2. MAINTENANCE OF OFFICE.......................................41
ss.7.3. RECORDS AND ACCOUNTS........................................41
ss.7.4. FINANCIAL STATEMENTS, CERTIFICATES AND INFORMATION..........41
ss.7.5. NOTICES.....................................................42
ss.7.6. EXISTENCE; MAINTENANCE OF REIT STATUS; MAINTENANCE OF
PROPERTIES..................................................43
ss.7.7. INSURANCE...................................................44
ss.7.8. TAXES.......................................................44
ss.7.9. INSPECTION OF PROPERTIES AND BOOKS..........................44
ss.7.10. COMPLIANCE WITH LAWS, CONTRACTS, LICENSES, AND PERMITS......45
ss.7.11. USE OF PROCEEDS.............................................45
ss.7.12. APPRAISALS..................................................45
ss.7.13. LEASES; LEASE APPROVALS.....................................45
ss.7.14. INTEREST RATE PROTECTION....................................46
ss.7.15. FURTHER ASSURANCE...........................................46
ss.7.16. REAL ESTATE ASSETS SUBSEQUENTLY ACQUIRED....................46
ss.7.17. ENVIRONMENTAL INDEMNIFICATION...............................46
ss.7.18. RESPONSE ACTIONS............................................47
ss.7.19. ENVIRONMENTAL ASSESSMENTS...................................47
ss.7.20. EMPLOYEE BENEFIT PLANS......................................47
ss.8. CERTAIN NEGATIVE COVENANTS OF THE BORROWER...........................48
ss.8.1. RESTRICTIONS ON INDEBTEDNESS................................48
ss.8.2. RESTRICTIONS ON LIENS, ETC..................................48
ss.8.3. RESTRICTIONS ON INVESTMENTS.................................49
ss.8.4. MERGER, CONSOLIDATION AND DISPOSITION OF PROPERTIES.........50
ss.8.5. SALE AND LEASEBACK..........................................51
ss.8.6. COMPLIANCE WITH ENVIRONMENTAL LAWS..........................51
ss.8.7. DISTRIBUTIONS...............................................51
SS.8.8. MAJOR LEASES................................................51
ss.9. FINANCIAL COVENANTS OF THE BORROWER..................................52
ss.9.1. BORROWING BASE VALUE........................................52
ss.9.2. MINIMUM DEBT SERVICE COVERAGE...............................52
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ss.9.3. TOTAL LIABILITIES TO GROSS ASSET VALUE.....................52
ss.9.4. ADJUSTED EBITDA TO INTEREST EXPENSE........................52
ss.9.5. EBITDA TO FIXED CHARGES....................................52
ss.9.6. MINIMUM TANGIBLE NET WORTH.................................52
ss.10. CONDITIONS TO EFFECTIVENESS..........................................52
ss.10.1. LOAN DOCUMENTS.............................................53
ss.10.2. GOOD STANDING CERTIFICATES AND CERTIFIED COPIES............53
ss.10.3. BY-LAWS; RESOLUTIONS.......................................53
ss.10.4. INCUMBENCY CERTIFICATE; AUTHORIZED SIGNERS.................53
ss.10.5. OPINIONS OF COUNSEL CONCERNING ORGANIZATION AND LOAN
DOCUMENTS..................................................53
ss.10.6. PAYMENT OF FEES............................................53
ss.10.7. VALIDITY OF LIENS..........................................53
ss.10.8. SURVEY.....................................................54
ss.10.9. TITLE INSURANCE; TITLE EXCEPTION DOCUMENTS.................54
ss.10.10. LEASES.....................................................54
ss.10.11. SUBORDINATION, ATTORNMENT AND NON-DISTURBANCE AGREEMENTS;
ESTOPPEL CERTIFICATES......................................54
ss.10.12. CERTIFICATES OF INSURANCE..................................54
ss.10.13. HAZARDOUS SUBSTANCE ASSESSMENTS............................54
ss.10.14. EVIDENCE OF COMPLIANCE WITH LAWS AND PERMITS...............54
ss.10.15. APPRAISALS.................................................54
ss.10.16. INSPECTING ENGINEER'S REPORTS..............................55
ss.10.17. UCC LIEN SEARCHES..........................................55
ss.10.18. PURCHASE OF MORTGAGED PROPERTIES...........................55
ss.10.19. COMPLIANCE CERTIFICATE.....................................55
ss.11. CONDITIONS TO ALL BORROWINGS.........................................55
ss.11.1. REPRESENTATIONS TRUE; NO EVENT OF DEFAULT; COMPLIANCE
CERTIFICATE................................................55
ss.11.2. NO LEGAL IMPEDIMENT........................................56
ss.11.3. GOVERNMENTAL REGULATION....................................56
ss.11.4. PROCEEDINGS AND DOCUMENTS..................................56
ss.12. EVENTS OF DEFAULT; ACCELERATION; ETC.................................56
ss.12.1. EVENTS OF DEFAULT AND ACCELERATION.........................56
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ss.12.2. TERMINATION OF COMMITMENTS.................................58
ss.12.3. REMEDIES...................................................59
ss.12.4. DISTRIBUTION OF COLLATERAL PROCEEDS........................59
ss.12.5. ADDITION OF REAL ESTATE ASSETS TO CURE DEFAULT.............60
ss.13. SETOFF...............................................................60
ss.14. THE AGENT............................................................61
ss.14.1. AUTHORIZATION..............................................61
ss.14.2. EMPLOYEES AND AGENTS.......................................61
ss.14.3. NO LIABILITY...............................................61
ss.14.4. NO REPRESENTATIONS.........................................61
ss.14.5. PAYMENTS...................................................62
ss.14.6. HOLDERS OF NOTES...........................................63
ss.14.7. INDEMNITY..................................................63
ss.14.8. AGENT AS LENDER............................................63
ss.14.9. RESIGNATION AND REMOVAL....................................63
ss.14.10. NOTIFICATION OF DEFAULTS AND EVENTS OF DEFAULT.............63
ss.14.11. DUTIES IN THE CASE OF ENFORCEMENT..........................64
ss.15. EXPENSES.............................................................64
ss.16. INDEMNIFICATION......................................................65
ss.17. SURVIVAL OF COVENANTS, ETC...........................................65
ss.18. ASSIGNMENT: PARTICIPATIONS; ETC......................................66
ss.18.1. CONDITIONS TO ASSIGNMENT BY LENDERS........................66
ss.18.2. CERTAIN REPRESENTATIONS AND WARRANTIES; LIMITATIONS;
COVENANTS..................................................66
ss.18.3. REGISTER...................................................67
ss.18.4. NEW NOTES..................................................67
ss.18.5. PARTICIPATIONS.............................................68
ss.18.6. PLEDGE BY LENDER...........................................68
ss.18.7. NO ASSIGNMENT BY BORROWER..................................68
ss.18.8. DISCLOSURE.................................................68
ss.19. NOTICES, ETC.........................................................68
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ss.20. GOVERNING LAW; CONSENT TO JURISDICTION AND SERVICE...................69
ss.21. HEADINGS.............................................................69
ss.22. COUNTERPARTS.........................................................69
ss.23. ENTIRE AGREEMENT.....................................................70
ss.24. WAIVER OF JURY TRIAL AND CERTAIN DAMAGE CLAIMS.......................70
ss.25. CONSENTS, AMENDMENTS, WAIVERS, ETC...................................70
ss.26. SEVERABILITY.........................................................71
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REVOLVING CREDIT AGREEMENT
This REVOLVING CREDIT AGREEMENT is made as of the 12th day of November,
2002, by and among AMERIVEST PROPERTIES INC., a Maryland corporation (the
"Borrower"), and FLEET NATIONAL BANK, a national banking association ("FNB"),
the other lending institutions which are listed on Schedule 1, (the "Lenders")
and FLEET NATIONAL BANK, as agent for itself and such other lending institutions
(the "Agent").
WHEREAS, the Borrower has requested and FNB has agreed to provide a
revolving credit facility, and portions of such facility may be assigned to
other lending institutions, and Borrower has agreed to provide real property
collateral and other collateral to FNB and such other lending institutions;
NOW, THEREFORE, to accomplish these purposes, the Agent, the Borrower and
the Lenders hereby agree as follows:
ss.1. DEFINITIONS AND RULES OF INTERPRETATION
ss.1.1. Definitions The following terms shall have the meanings set forth
in this ss.l or elsewhere in the provisions of this Agreement referred to below:
Adjusted EBITDA. EBITDA minus the Reserve Amount for all Real Estate Assets
owned by Borrower or any of the Related Companies.
Adjusted Net Operating Income. For each Mortgaged Property, the Net
Operating Income for such Mortgaged Property for the six month period that ended
as of the end of the last preceding quarter for which a Compliance Certificate
has been delivered pursuant to ss.7.4(d), multiplied by two (2), minus the
Reserve Amount for such Mortgaged Property. With respect to Chateau Plaza, if
the current lease of the Xxxx Foods Premises is terminated, the termination fee
shall not be included in Adjusted Net Operating Income, and to the extent that
portions of such premises are relet pursuant to Leases approved by the Agent,
Adjusted Net Operating Income for Chateau Plaza may be adjusted on a proforma
basis as though each Lease which is an Effective Lease on the last day of such
six month period had been in effect throughout such period, provided that any
rent paid by the tenant under the current lease of the Xxxx Foods Premises
allocable to the relet premises for such six month period shall be excluded from
such proforma Adjusted Net Operating Income. Prior to making any proforma
adjustments as described in the preceding sentence Borrower shall submit a
detailed explanation thereof to the Agent for its approval.
Additional Properties. Real Estate Assets which hereafter become Mortgaged
Properties pursuant to ss.5.3.
Affiliated Lenders. Any commercial bank which is (i) the parent corporation
of any of the Lenders originally listed on Schedule 1, (ii) a wholly-owned
subsidiary of any of the Lenders or (iii) a wholly-owned subsidiary of the
parent corporation of any of the Lenders.
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Agent. Fleet National Lender acting as agent for the Lenders or any
successor agent.
Agent's Head Office. The Agent's head office located at 000 Xxxxxxx Xxxxxx,
Xxxxxx, Xxxxxxxxxxxxx 00000, or at such other location as the Agent may
designate from time to time.
Agreement. This Revolving Credit Agreement, including the Schedules and
Exhibits hereto.
Appraisals. Appraisals of the value of the Mortgaged Properties, prepared
in writing independently and impartially by qualified appraisers selected and
retained by the Agent and paid for by Borrower, the form and substance of such
appraisals and final determination of market value of the Mortgaged Properties
thereunder to be reviewed and subject to approval by the Agent based on its
internal appraisal review policies and procedures. All appraisals shall be
prepared in accordance with the Uniform Standards of Professional Appraisal
Practice, Supplemental Standards Applicable to Federally Related Transactions,
as further described in Title XI of the "Financial Institutions Reform, Recovery
and Enforcement Act of 1989 ("FIRREA"), and any additional standards and
conditions required for appraisals prepared for the Lenders. All Appraisals
shall disregard any value associated with any unimproved land located on the
applicable Mortgaged Property.
Appraised Value. The market value of each of the Mortgaged Properties,
determined by the Agent based on an Appraisal of such Mortgaged Property, after
discretionary adjustments of the value shown in such Appraisal following a
review by the Agent's appraisal review department.
Arranger. Fleet Securities, Inc. or any successor.
Assignment and Acceptance. See ss.18.
Assignments of Leases and Rents. The assignments of rents and leases from
the Mortgagor to the Agent pursuant to which the Mortgagor shall grant and
assign to the Agent as agent for the Lenders a security interest in and
assignment of the Mortgagor's interest as lessor with respect to all Leases and
rents thereunder of all or any part of the Mortgaged Properties as security for
the Obligations.
Balance Sheet Date. December 31, 2001.
Borrower. As defined in the preamble hereto.
Borrowing Base Value. For each Mortgaged Property, Borrowing Base Value
shall equal seventy percent (70%) of the lesser of (a) the Appraised Value of
such Mortgaged Property or (b) an amount equal to the sum of the purchase price
of such Mortgaged Property plus all capital expenditures for improvements to the
Mortgaged Property approved by the Agent and made by the Mortgagor since the
date of purchase.
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Borrowing Date. The date on which any Loan is made or is to be made
(including, without limitation, the date on which any Mandatory Prime Rate Loan
is made), and the date on which any Loan is converted or continued in accordance
with ss.2.6.
Buildings. The buildings, structures and other improvements now or
hereafter located on the Mortgaged Properties.
Building Service Equipment. All apparatus, fixtures and articles of
personal property owned by the Mortgagor now or hereafter attached to or used or
procured for use in connection with the operation or maintenance of any Building
located on or included in the Mortgaged Properties, including, but without
limiting the generality of the foregoing, all engines, furnaces, boilers,
stokers, pumps, heaters, tank, dynamos, motors, generators, switchboards,
electrical equipment, heating, plumbing, lifting and ventilating apparatus,
air-cooling and air-conditioning apparatus, gas and electric fixtures,
elevators, escalators, fittings, and machinery and all other equipment of every
kind and description, used or procured for use in the operation of the Buildings
(except apparatus, fixtures or articles of personal property belonging to
lessees or other occupants of such building or to persons other than the
Mortgagor unless the same be abandoned by any such lessee or other occupant or
person), together with any and all replacements thereof and additions thereto.
Business Day. Any day other than a Saturday, Sunday or day which shall be
in the Commonwealth of Massachusetts a legal holiday or day on which banking
institutions are required or authorized to close and, in the case of LIBOR
Loans, also a day which is a LIBOR Business Day.
Capitalized Leases. Leases under which the Borrower is the lessee or
obligor, the discounted future rental payment obligations under which are
required to be capitalized on the balance sheet of the Borrower in accordance
with Generally Accepted Accounting Principles.
CERCLA. See ss.6.18.
Chateau Plaza. The Real Estate Asset know as Chateau Plaza located at 0000
XxXxxxxx Xxxxxx, Xxxxxx, Xxxxx.
Chateau Plaza Reserve Account. See ss.5.6
Code. The Internal Revenue Code of 1986, as amended and in effect from time
to time.
Collateral. All of the properties of the Borrower or of any Guarantor that
are subject to the security interests, liens and mortgages created by the
Security Documents, including, without limitation, the Mortgaged Properties, the
Leases and the Permits.
Collateral Account Agreement. The Collateral Account Agreement between
AmeriVest Chateau Inc. and FNB with respect to the Chateau Plaza Reserve Account
to be executed and delivered on or before the date that Chateau Plaza becomes a
Mortgaged Property.
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Collateral Cash Flow. The aggregate Adjusted Net Operating Income derived
from the Mortgaged Properties.
Commitment. With respect to each Lender, the amount set forth from time to
time on Schedule 1.1 hereto as the amount of such Lender's commitment to make
Loans to the Borrower.
Commitment Increase. An increase in the Total Commitment to not more than
$45,000,000 pursuant to ss. 2.2(a).
Commitment Increase Date. See ss.2.2(a).
Commitment Percentage. With respect to each Lender, the percentage set
forth from time to time on Schedule 1.1 hereto as such Lender's percentage of
the Total Commitment.
Compliance Certificate. A certificate in the form of Exhibit C hereto
signed by a Responsible Officer setting forth in reasonable detail computations
evidencing compliance with the covenants contained in ss.9.1 through ss.9.6,
ss.8.3(d) and ss.8.7.
Controlled Unconsolidated Entity. An Unconsolidated Entity to the extent
that the Borrower has the authority to make management decisions on behalf of
such Unconsolidated Entity, or when this term is used with respect to the
negative covenants herein, an Unconsolidated Entity in which the Borrower has
the right or ability to prevent such Unconsolidated Entity from taking the
action which is prohibited by the applicable negative covenant.
Conversion Request. A notice given by the Borrower to the Agent of its
election to convert or continue a Loan in accordance with ss.2.6.
Xxxx Foods Premises. That portion of Chateau Plaza currently leased to Xxxx
Foods Company consisting of approximately 115,618 rentable square feet.
Default. See ss.12.1.
Distribution. The declaration or payment of any dividend or distribution of
cash or cash equivalents to the shareholders of the Borrower or the limited
partners of any operating partnership in which the Borrower is a general
partner.
Dollars or $. Dollars in lawful currency of the United States of America.
Domestic Lending Office. Initially, the office of each Lender designated as
such in Schedule 1.3 hereto; thereafter, such other office of such Lender, if
any, located within the United States that will be making or maintaining Prime
Rate Loans.
Drawing Date. The date on which a draft under a Letter of Credit is paid by
the Agent.
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EBITDA. For any period of calculation and without duplication, net income
(loss) of Borrower for such period (determined in accordance with Generally
Accepted Accounting Principles, before allocations to minority interests and
excluding all amounts attributable to the net income or net losses of
Unconsolidated Entities) plus the sum of the following amounts (but only to the
extent included in determining net income (loss) for such period): (a)
depreciation and amortization expense of Borrower for such period plus (b)
Interest Expense for such period plus (c) income tax expense of Borrower in
respect of such period plus (d) extraordinary losses of Borrower, losses from
the sale of assets of Borrower and losses resulting from forgiveness of debt by
Borrower, all for such period minus (e) extraordinary gains of Borrower and
gains from the sale of assets of Borrower for such period plus (f) any cash
dividends or distributions actually received (and not reinvested) by Borrower
from its Unconsolidated Entities.
Effective Date. The date upon which this Agreement shall become effective
pursuant to ss.10.
Effective Leases. As of any date, those Leases currently in effect on such
date with the tenant thereunder in substantial occupancy of the leased premises,
having commenced the payment of rent at the regular rate specified in the Lease
(i.e., any free rent periods have expired) and not, as of such date, in default
beyond any applicable notice and cure period.
Eligible Assignee. Any of (a) a commercial bank organized under the laws of
the United States, or any State thereof or the District of Columbia, and having
total assets in excess of $1,000,000,000; (b) a savings and loan association or
savings bank organized under the laws of the United States, or any State thereof
or the District of Columbia, and having a net worth of at least $100,000,000,
calculated in accordance with Generally Accepted Accounting Principles; (c) a
commercial bank organized under the laws of any other country which is a member
of the Organization for Economic Cooperation and Development (the "OECD"), or a
political subdivision of any such country, and having total assets in excess of
$1,000,000,000, provided that such bank is acting through a branch or agency
located in the country in which it is organized or another country which is also
a member of the OECD; and (d) the central bank of any country which is a member
of the OECD; (e) an insurance company and other institutional investor having a
net worth of at least $100,000,000 that, in the reasonable judgment of the
Agent, has substantial experience in real estate lending or investing in loans
similar to the Loans; (f) an investment fund or similar entity having a net
worth of at least $100,000,000 that is engaged in making, purchasing or holding
bank loans or similar extensions of credit and that is managed by an investment
advisor that, in the reasonable judgment of the Agent, has substantial
experience in real estate lending or investing in loans similar to the Loans or
(g) an Affiliated Lender, provided, however that the Borrower, the Related
Companies and the Unconsolidated Entities shall not be Eligible Assignees.
Employee Benefit Plan. Any employee benefit plan within the meaning of ss.3
(3) of ERISA maintained or contributed to by the Borrower or any ERISA
Affiliate, other than a Multiemployer Plan.
Environmental Laws. See ss.6.18(a).
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Environmental Reports. Reports addressed to the Agent prepared by
environmental engineering firms acceptable to the Agent relating to
environmental site assessments conducted with respect to the Mortgaged
Properties described in Schedule 6.18 hereto and conducted with respect to
prospective Additional Properties pursuant to ss.5.3.
ERISA. The Employee Retirement Income Security Act of 1974, as amended and
in effect from time to time.
ERISA Affiliate. Any Person which is treated as a single employer with the
Borrower under ss.414 of the Code.
ERISA Reportable Event. A reportable event with respect to a Guaranteed
Pension Plan within the meaning of ss.4043 of ERISA and the regulations
promulgated thereunder as to which the requirement of notice has not been
waived.
Eurocurrency Reserve Rate. For any day with respect to a LIBOR Loan, the
maximum rate (expressed as a decimal) at which any Lender subject thereto would
be required to maintain reserves under Regulation D of the Board of Governors of
the Federal Reserve System (or any successor or similar regulations relating to
such reserve requirements) against Eurocurrency Liabilities" (as that term is
used in Regulation D) , if such liabilities were outstanding. The Eurocurrency
Reserve Rate shall be adjusted automatically on and as of the effective date of
any change in the Eurocurrency Reserve Rate.
Event of Default. See ss.12.1.
Fixed Charges. With respect to any fiscal period of the Borrower, an amount
equal to the sum of (i) Interest Expense, (ii) regularly scheduled installments
of principal payable with respect to all Indebtedness of Borrower, excluding any
balloon payments due at the maturity of such Indebtedness, plus (iii) all
dividend payments due to the holders of any preferred stock of the Borrower.
FNB. See preamble.
Funds From Operations. With respect to any fiscal period of the Borrower,
an amount equal to net income (computed in accordance with Generally Accepted
Accounting Principles) from the operation of Real Estate Assets, excluding gains
(or losses) from debt restructuring and sales of property, plus real estate
depreciation and amortization, and after adjustments for unconsolidated
partnerships and joint ventures. Adjustments for unconsolidated partnerships and
joint ventures will be calculated to reflect funds from operations on the same
basis.
Generally Accepted Accounting Principles. Principles that are (a)
consistent with the principles promulgated or adopted by the Financial
Accounting Standards Board and its predecessors, as in effect from time to time
and (b) consistently applied with past financial statements of the Borrower
adopting the same principles; provided that a certified public accountant would,
insofar as the use of such accounting principles is pertinent, be in a position
to deliver an unqualified opinion (other than a qualification regarding changes
in Generally Accepted Accounting Principles) as to financial statements in which
such principles have been properly applied.
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Gross Asset Value. At any date, Borrower's total assets, adjusted to add
back the accumulated depreciation of its real estate assets, all as determined
in accordance with Generally Accepted Accounting Principals as of such date.
Guaranteed Pension Plan. Any employee pension benefit plan within the
meaning of ss.3(2) of ERISA maintained or contributed to by the Borrower or any
ERISA Affiliate the benefits of which are guaranteed on termination in full or
in part by the PBGC pursuant to Title IV of ERISA, other than a Multiemployer
Plan.
Guarantor. AmeriVest Centerra Inc., a Colorado corporation, AmeriVest
Chateau Inc., a Texas corporation and each Related Company that owns a Real
Estate Asset approved by the Majority Lenders as an Additional Property and that
executes and delivers a Guaranty.
Guaranty. The Unconditional Guaranty of Payment and Performance from each
Guarantor to the Agent pursuant to which such Guarantor shall guarantee the
Obligations.
Hazardous Substances. See ss.6.18(b).
Indebtedness. All obligations, contingent and otherwise, that in accordance
with Generally Accepted Accounting Principles should be classified upon the
obligor's balance sheet as liabilities, or to which reference should be made by
footnotes thereto, including, without limitation, all of the following, whether
or not so classified: (a) the Obligations, (b) all debt and similar monetary
obligations, whether direct or indirect; (c) all liabilities secured by any
mortgage, pledge, negative pledge, security interest, lien, negative lien,
charge, or other encumbrance existing on property owned or acquired subject
thereto, whether or not the liability secured thereby shall have been assumed;
(d) all guarantees, endorsements and other contingent obligations whether direct
or indirect in respect of indebtedness or obligations of others, including any
liability as the general partner of a partnership, any obligation to supply
funds to or in any manner to invest in, directly or indirectly, the debtor, to
purchase indebtedness, or to assure the owner of indebtedness against loss,
through an agreement to purchase goods, supplies, or services for the purpose of
enabling the debtor to make payment of the indebtedness held by such owner or
otherwise, and the obligations to reimburse the issuer in respect of any letters
of credit; and (e) such obligor's liabilities, contingent or otherwise of the
type set forth in (a) through (d) above, under any joint venture, limited
liability company or partnership agreement.
Indemnity Agreements. The Indemnity Agreements Regarding Hazardous
Materials from the Borrower to the Agent and the Lenders pursuant to which the
Borrower shall, among other things, indemnify the Agent and the Lenders from all
environmental liability on or affecting the Mortgaged Properties in accordance
with the terms thereof.
Interest Expense. With respect to any fiscal period of the Borrower, an
amount equal to the sum of the following with respect to all Indebtedness of the
Borrower and the Related Companies: (i) total interest expense, accrued in
accordance with Generally Accepted Accounting Principles plus (ii) all
capitalized interest determined in accordance with Generally Accepted Accounting
Principles.
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Interest Payment Date. As to any Prime Rate Loan or LIBOR Loan, the first
day of each calendar month.
Interest Period. With respect to each Loan, (a) initially, the period
commencing on the Borrowing Date of such Loan and ending on the last day of one
of the periods set forth below, as selected by the Borrower in a Loan Request
(except that no Loan Request is required for Mandatory Prime Rate Loans) (i) for
any Prime Rate Loan, the day on which such Prime Rate Loan is paid in full or
converted to a LIBOR Loan; and (ii) for any LIBOR Loan, 1, 2 or 3 months; and
(b) thereafter, each period commencing on the last day of the next preceding
Interest Period applicable to such Loan and ending on the last day of one of the
periods set forth above, as selected by the Borrower in a Conversion Request;
provided that all of the foregoing provisions relating to Interest Periods are
subject to the following:
(A) if any Interest Period with respect to a LIBOR Loan would
otherwise end on a day that is not a LIBOR Business Day, that Interest Period
shall be extended to the next succeeding LIBOR Business Day unless the result of
such extension would be to carry such Interest Period into another calendar
month, in which event such Interest Period shall end on the immediately
preceding LIBOR Business Day;
(B) if any Interest Period with respect to a Prime Rate Loan would end
on a day that is not a Business Day, that Interest Period shall end on the next
succeeding Business Day;
(C)if the Borrower shall fail to give notice as provided in ss.2.6,
the Borrower shall be deemed to have requested a conversion of the affected
LIBOR Loan to a Prime Rate Loan on the last day of the then current Interest
Period with respect thereto;
(D) any Interest Period relating to any LIBOR Loan that begins on the
last LIBOR Business Day of a calendar month (or on a day for which there is no
numerically corresponding day in the calendar month at the end of such Interest
Period) shall end on the last LIBOR Business Day of a calendar month; and
(E) any Interest Period relating to any LIBOR Loan that would
otherwise extend beyond the Maturity Date shall end on the Maturity Date.
Investments. All expenditures made and all liabilities incurred
(contingently or otherwise) for the acquisition of stock, partnership or
membership interests or Indebtedness of, or for loans, advances, capital
contributions or transfers of property to, or in respect of any guaranties (or
other commitments as described under Indebtedness), or obligations of, any
Person. In determining the aggregate amount of Investments outstanding at any
particular time: (a) the amount of any Investment represented by a guaranty
shall be taken at not less than the principal amount of the obligations
guaranteed and still outstanding; (b) there shall be included as an Investment
all interest accrued with respect to Indebtedness constituting an Investment
unless and until such interest is paid; (c) there shall be deducted in respect
of each such Investment any amount received as a return of capital (but only by
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repurchase, redemption, retirement, repayment, liquidating dividend or
liquidating distribution); (d) there shall not be deducted in respect of any
Investment any amounts received as earnings on such Investment, whether as
dividends, interest or otherwise, except that accrued interest included as
provided in the foregoing clause (b) may be deducted when paid; and (e) there
shall not be deducted from the aggregate amount of Investments any decrease in
the value thereof.
Leases. Leases, licenses and agreements whether written or oral, relating
to the use or occupation of space in or on the Buildings or on the Mortgaged
Properties by persons other than the applicable Mortgagor, including but not
limited to the leases listed on Schedule 6.20.
Lenders. FNB and the other lending institutions listed from time to time on
Schedule 1 hereto and any other Person who becomes an assignee of any rights of
a Lender pursuant to ss.18 or a Person who acquires all or substantially all of
the stock or assets of a Lender.
Letter of Credit. A letter of credit issued by the Agent for the account of
the Borrower pursuant to ss.2.8.
Letter of Credit Request. See ss.2.8.
LIBOR. As applicable to any LIBOR Loan, the rate per annum as determined on
the basis of the offered rates for deposits in U.S. Dollars, for a period of
time comparable to the Interest Period applicable to such LIBOR Loan which
appears on the Telerate page 3750 as of 11:00 a.m. London time on the day that
is two LIBOR Business Days preceding the first day of such LIBOR Loan; provided,
however, if the rate described above does not appear on the Telerate System on
any applicable interest determination date, the LIBOR rate shall be the rate
(rounded upward, if necessary, to the nearest one hundred-thousandth of a
percentage point), determined on the basis of the offered rates for deposits in
U.S. dollars for a period of time comparable to the Interest Period applicable
to such LIBOR Loan which are offered by four major banks in the London interbank
market at approximately 11:00 a.m. London time, on the day that is two (2) LIBOR
Business Days preceding the first day of such LIBOR Loan as selected by the
Agent. The principal London office of each of the four major London banks will
be requested to provide a quotation of its U.S. Dollar deposit offered rate. If
at least two such quotations are provided, the rate for that date will be the
arithmetic mean of the quotations. If fewer than two quotations are provided as
requested, the rate for that date will be determined on the basis of the rates
quoted for loans in U.S. dollars to leading European banks for a period of time
comparable to the Interest Period applicable to such LIBOR Loan offered by major
banks in New York City at approximately 11:00 a.m. New York City time, on the
day that is two Business Days preceding the first day of such Interest Period
applicable to such LIBOR Loan. In the event that the Agent is unable to obtain
any such quotation as provided above, it will be deemed that LIBOR pursuant to a
LIBOR Loan cannot be determined and ss.4.10 shall be applicable. In the event
that the Board of Governors of the Federal Reserve System shall impose a
Eurocurrency Reserve with respect to LIBOR deposits of Bank, then for any period
during which such Eurocurrency Reserve shall apply, LIBOR shall be equal to the
amount determined above divided by an amount equal to 1 minus the Eurocurrency
Reserve Rate.
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LIBOR Business Day. Any day on which commercial banks are open for
international business (including dealings in Dollar deposits) in London,
England.
LIBOR Lending Office. Initially, the office of each Lender designated as
such in Schedule 1.3 hereto; thereafter, such other office of such Lender, if
any, that shall be making or maintaining LIBOR Loans.
LIBOR Loans. Loans bearing interest calculated by reference to LIBOR.
LIBOR Prepayment Fee. See ss.3.3.
Loan Documents. This Agreement, the Notes, the Security Documents, the
Indemnity Agreements, and any and all other agreements, documents and
instruments now or hereafter evidencing, securing or otherwise relating to the
Loans.
Loan Request. See ss.2.5.
Loans. Loans made or to be made by the Lenders to the Borrower pursuant to
ss.2.1 and ss.2.5, and Mandatory Prime Rate Loans made pursuant to ss.2.8.
Mandatory Prime Rate Loans. Loans made by the Lenders (without a Loan
Request) under the circumstances described in ss.2.8(d).
Major Leases. A Lease of 7,500 square feet or more of the gross leasable
area of a Building located on a Mortgaged Property and any guaranty of such
Lease or a Lease of less than 7,500 square feet of the gross leasable area of a
Building located on a Mortgaged Property if the Agent, with the approval of the
Majority Lenders, determines such Lease to be a Major Lease.
Major Tenants. As to any Major Lease, those tenants that are parties to
that Major Lease and any guarantors of those tenants.
Majority Lenders. As of any date, the Lenders whose aggregate Commitments
constitute at least fifty-one percent (51%) of the Total Commitment, provided
that (i) if a single Lender's Commitment shall constitute more than 50% but less
than 100% of the Total Commitment then Majority Lenders shall mean such Lender
and at least one other Lender, and (ii) the Commitments of any Delinquent
Lenders shall be disregarded when determining the Majority Lenders.
Material Adverse Effect. A material adverse effect on (i) any of the
Mortgaged Properties, (ii) the business, results of operations or financial
condition of the Borrower and the Related Companies taken as a whole, (iii) the
ability of the Borrower or any Guarantor to perform its obligations under the
Loan Documents, or (iv) the validity or enforceability of any of the Loan
Documents or the remedies or material rights of the Agent or the Lenders
thereunder.
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Maturity Date. November 12, 2005, or such earlier date on which the Loans
shall become due and payable pursuant to the terms hereof.
Maximum Credit Amount. Maximum Credit Amount shall mean the least of the
following: (i) the maximum amount of Outstanding Obligations without causing a
violation of ss.9.1; (ii) the maximum amount of Outstanding Obligations without
causing a violation of ss.9.2; and (iii) the Total Commitment.
Mortgaged Properties. The (a) Real Estate Assets described on Schedule 1.1
hereto and such other Real Estate Assets which may be subsequently conveyed to
the Agent as Additional Properties to secure the Obligations in accordance with
ss.5.3 hereof, excluding from the foregoing any Real Estate Assets which the
Agent may release pursuant to ss.5.5 hereof, as such Real Estate Assets are more
particularly described in the Security Deeds; (b) the Buildings and Building
Service Equipment located thereon and all Permits relating thereto; and (c) all
other property incident to any of same described in any Security Document or
other Loan Document.
Mortgagor. With respect to each of the Mortgaged Properties, the Borrower
or the Guarantor that is the owner thereof.
Multiemployer Plan. Any multiemployer plan within the meaning of ss.3(37)
of ERISA maintained or contributed to by the Borrower or any ERISA Affiliate.
Net Offering Proceeds. All cash proceeds received after the Effective Date
by the Borrower, as a result of the sale of common, preferred or other classes
of stock of the Borrower less customary costs and discounts of issuance paid by
Borrower in connection therewith.
Net OP Proceeds. All cash proceeds received and the fair market value of
all property contributed, after the Effective Date, as a result of the issuance
of any limited partnership interests, limited liability company interests or
other equity interests in any entity that is a Related Company (such entities
being sometimes called "operating partnerships") less customary costs and
discounts of issuance paid by such operating partnership or Borrower in
connection therewith.
Net Operating Income. With respect to any fiscal period of the Borrower and
with respect to any one or more of the Real Estate Assets, the total rental and
other income from the operation of such Real Estate Assets, after deducting all
expenses and other proper charges incurred by the Borrower in connection with
the operation of such Real Estate Assets during such fiscal period, including,
without limitation, real estate taxes and bad debt expenses, but before payment
or provision for debt service charges, income taxes, and depreciation,
amortization, and other non-cash expenses, all as determined in accordance with
Generally Accepted Accounting Principles except that there shall be no rent
leveling adjustments made when computing Net Operating Income.
Notes. See ss.2.3.
Obligations. All indebtedness, obligations and liabilities of the Borrower
to any of the Lenders and the Agent, individually or collectively, under this
Agreement or any of the other Loan Documents or in respect of any of the Loans,
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the Letters of Credit or the Notes or other instruments at any time evidencing
any thereof, whether existing on the date of this Agreement or arising or
incurred hereafter, direct or indirect, joint or several, absolute or
contingent, matured or unmatured, liquidated or unliquidated, secured or
unsecured, arising by contract, operation of law of otherwise.
Outstanding. With respect to the Loans, the aggregate unpaid principal
thereof as of any date of determination.
Outstanding Obligations. As of any date of determination, the sum of the
outstanding principal amount of the Loans plus the stated amount of each Letter
of Credit issued under ss.2.8 which has not expired or terminated prior to the
date of determination.
PBGC. The Pension Benefit Guaranty Corporation created by ss.4002 of ERISA
and any successor entity or entities having similar responsibilities.
Permits. All governmental permits, licenses, and approvals necessary for
the lawful operation and maintenance of the Mortgaged Properties.
Permitted Liens. Liens, security interests and other encumbrances permitted
by ss.8.2.
Person. Any individual, corporation, partnership, trust, unincorporated
association, business, or other legal entity, and any government or any
governmental agency or political subdivision thereof.
Prepayment Date. See ss.3.3.
Prime Rate. The variable per annum rate of interest designated from time to
time by FNB as its Prime Rate. The Prime Rate is a reference rate and does not
necessarily represent the lowest or best rate being charged to any customer.
Prime Rate Loans. Those Loans bearing interest calculated by reference to
the Prime Rate.
Pro Forma Debt Service Charges. For any fiscal period of the Borrower, an
amount determined by the Agent based on the higher of (A) a nine and one quarter
percent (9.25%) constant on the Pro Forma Principal Amount or (B) the sum of the
monthly principal and interest payments that would be due during such fiscal
period based on a twenty-five (25) year mortgage style amortization schedule,
calculated on the Pro Forma Principal Amount and an interest rate equal to the
greater of (i) the actual average interest rate on the Loans during such period
or (ii) the then current ten (10) year U.S. Treasury note yield plus two and
one-half percent (2.5%).
Pro Forma Principal Amount. (a) With respect to Compliance Certificates
delivered pursuant to ss.7.4(d), the Outstanding Obligations at the end of the
applicable fiscal quarter; (b) with respect to Compliance Certificates delivered
pursuant to ss.2.5, ss.2.8(b) or ss.11.1, the Outstanding Obligations after
giving effect to the requested Loan or Letter of Credit; (c) with respect to
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Compliance Certificates delivered pursuant to ss.5.5, ss.8.1(f) or ss.8.4(c),
the principal amount outstanding after giving effect to any proposed transaction
including any payments on the Loans in connection therewith.
Properties. All Real Estate Assets, Real Estate, and all other assets,
including, without limitation, intangibles and personalty owned by the Borrower.
Real Estate. All real property at any time owned, leased (as lessee or
sublessee) or operated by the Borrower, or any of the Related Companies or any
Controlled Unconsolidated Entity.
Real Estate Assets. Those fixed and tangible properties consisting of land,
buildings and/or other improvements owned by the Borrower, by any of the Related
Companies or by any Controlled Unconsolidated Entity at the relevant time of
reference thereto, including without limitation, the Mortgaged Properties, but
excluding all leaseholds other than leaseholds under ground leases having an
unexpired term of 30 years.
Record. The grid attached to any Note, or the continuation of such grid, or
any other similar record, including computer records, maintained by any Lender
with respect to any Loan referred to in such Note.
Related Companies. The entities listed and described on Schedule 1.3
hereto, or thereafter, any entity whose financial statements are consolidated or
combined with the Borrower's pursuant to Generally Accepted Accounting
Principles, or any ERISA Affiliate.
Release. See ss.6.18(c)(iii).
Reserve Amount. With respect to any Real Estate Assets or group of Real
Estate Assets, a normalized annual reserve for capital expenditures, replacement
reserves and leasing costs at the rate of $0.25 per year per square foot of net
leasable area contained in all buildings on such Real Estate Assets.
Responsible Officer. With respect to the Borrower, any one of its Chairman,
President, Chief Executive Officer, Chief Financial Officer, or Executive Vice
Presidents or Vice Presidents.
Security Deeds. The mortgages, deeds to secure debt and deeds of trust from
each Mortgagor to the Agent pursuant to which such Mortgagor shall mortgage or
convey the Mortgaged Properties as security for the Obligations.
Security Documents. The Security Deeds, the Assignments of Rents and
Leases, the Collateral Account Agreement, the Subordination, Attornment and
Non-Disturbance Agreements and the UCC-1 financing statements.
Subordination, Attornment and Non-Disturbance Agreement. An agreement among
and executed by the Agent, the Mortgagor and a tenant under a Lease pursuant to
which such tenant agrees to subordinate its rights under the Lease to the lien
of a Security Deed and agrees to recognize the Agent or its successor in
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interest as landlord under the Lease in the event of a foreclosure or other
transfer under the Security Deed and the Agent agrees to not disturb the
possession of the tenant so long as there is no default beyond applicable grace
periods under the Lease.
Subsidiary. Any corporation, association, trust, or other business entity
of which the designated parent or other controlling Person shall at any time own
directly or indirectly through a Subsidiary or Subsidiaries at least a majority
(by number of votes) of the outstanding Voting Interests.
Surveys. Instrument surveys of the Mortgaged Properties, which shall show
the location of all Buildings, easements and utility lines on the Mortgaged
Properties, shall be sufficient to remove the survey exception from the Title
Policy, shall show that all Buildings are within the lot lines of the Mortgaged
Properties, shall not show any encroachments by others, shall show the zoning
district or districts in which the Mortgaged Properties are located and shall
show whether or not the Mortgaged Properties are located in any flood hazard
district as established by the Federal Emergency Management Agency or any
successor agency or are located in any flood plain, flood hazard or wetland
protection district established under federal, state or local law and in
addition shall meet the then applicable standards of the Agent.
Surveyor Certificate. A certificates executed by the surveyor who prepared
each Survey dated as of a recent date and containing such information relating
to the Mortgaged Properties as the Agent or the Title Insurance Company may
reasonably require, such certificate to be reasonably satisfactory to the Agent
in form and substance.
Tangible Net Worth. At any date, Borrower's total assets, adjusted to add
back the accumulated depreciation of its real estate assets, less its Intangible
Assets, less its total liabilities, all as determined in accordance with
Generally Accepted Accounting Principals as determined as of such date. For
purposes of this definition, "Intangible Assets" means with respect to any such
intangible assets, (i) the amount (to the extent reflected in determining such
total assets) of all write-ups (other than write-ups resulting from foreign
currency translations and write-ups of assets of a going concern business made
within 12 months after the acquisition of such business) in the book value of
any asset (other than real property assets) owned by Borrower, and (ii)
goodwill, patents, trademarks, service marks, trade names, anticipated future
benefit of tax loss carry forwards, copyrights, organization or developmental
expenses and other intangible assets.
Title Insurance Company shall mean Chicago Title Insurance Company or
Xxxxxxx Title Guaranty Company.
Title Policy shall mean for each Mortgaged Property an ALTA standard form
(or TLTA standard form if the Mortgaged Property is in Texas) title insurance
policy issued by the Title Insurance Company (with such reinsurance or
co-insurance as the Agent may require, any such reinsurance to be with direct
access endorsements) in an amount not less than the Appraised Value of the
Mortgaged Property from time to time insuring the priority of the Security Deed
and Assignment of Leases and Rents and that the Borrower holds good and clear
record marketable (or indefeasible, with respect to Mortgaged Property located
in Texas) fee simple title to the Mortgaged Property, subject only to the
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encumbrances permitted by the Security Deed and which shall not contain
exceptions for mechanics liens, persons in occupancy (other than Leases listed
on Schedule 6.20) or matters which would be shown by a survey (other than
matters approved by the Agent in its reasonable discretion), shall not insure
over any matter except to the extent that any such affirmative insurance is
acceptable to the Agent in its sole reasonable discretion, and shall contain
such endorsements and affirmative insurance as the Agent in its reasonable
discretion may require, including but not limited to (a) comprehensive
endorsement, (b) variable rate of interest endorsement, (c) usury endorsement,
(d) revolving credit endorsement, (e) doing business endorsement, (f) ALTA form
3.1 zoning endorsement (g) survey(same-as) endorsement (h) access endorsement,
(i) single tax lot endorsement, (j) due execution endorsement, (k) mortgage tax
endorsement, (l) subdivision endorsement (m) last dollar endorsement, (n) tie-in
endorsement and (o) a first loss endorsement, to the extent that such
endorsements are available in the state where the applicable Mortgaged Property
is located. A tie-in endorsement will not be required for the initial two Title
Policies, but upon issuance of a Title Policy with respect to an Additional
Property, there shall be tie-in endorsements issued for all Title Policies
issued by the same Title Insurance Company.
Total Commitment. The sum of the Commitments of the Lenders, as in effect
from time to time.
Total Liabilities. The sum, without duplication of (i) all liabilities of
the Borrower determined in accordance with the accounting principles used in the
preparation of the financial statements delivered pursuant to ss.7.4, including
capital leases, accounts payable, accrued expenses, mortgage payables, notes
payable, senior notes, convertible debentures, subordinated debentures, and
secured or unsecured debt owed to banks or other financial institutions (ii) all
Indebtedness of the Borrower whether or not so classified, including, without
limitation, all outstanding Loans under this Agreement, (iii) the balance
available for drawing under letters of credit issued for the account of the
Borrower and (iv) Borrower's Unconsolidated Entity Percentage of the
Indebtedness of all Unconsolidated Entities.
Type. As to any Loan its nature as a Prime Rate Loan or a LIBOR Loan.
Unconsolidated Entity. As of any date, any Person in whom the Borrower or
any Related Company holds an Investment, and whose financial results would not
be consolidated under Generally Accepted Accounting Principles with the
financial statements of the Borrower, if such statements were prepared as of
such date. Unconsolidated Entities existing on the date hereof are set forth in
Schedule 1.3.
Unconsolidated Entity Percentage. With respect to any Unconsolidated
Entity, the percentage interest of the Borrower or any Related Company in such
Unconsolidated Entity which shall be the greatest of the following: (a) the
relative nominal direct and indirect ownership interest owned by Borrower or any
Related Company (expressed as a percentage) in such Unconsolidated Entity, (b)
the proportion (expressed as a percentage) of Borrower's relative contingent
liability for the Indebtedness of such Unconsolidated Entity to that entity's
total Indebtedness, or (c) the relative and indirect economic interest owned by
Borrower or any Related Company (calculated as a percentage) in such
Unconsolidated Entity determined in accordance with the applicable provisions of
the declaration of trust, articles or certificate of incorporation, articles of
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organization, partnership agreement, limited liability operating agreement,
joint venture agreement or other applicable organizational document of such
Unconsolidated Entity.
Voting Interests. Stock or similar ownership interests, of any class or
classes (however designated), the holders of which are at the time entitled, as
such holders, (a) to vote for the election of a majority of the directors (or
persons performing similar functions) of the corporation, association,
partnership, trust or other business entity involved, or (b) to control, manage
or conduct the business of the corporation, partnership, association, trust or
other business entity involved.
ss.1.2. Rules of Interpretation.
(a) A reference to any document or agreement shall include such
document or agreement as amended, modified or supplemented from time to time in
accordance with its terms and the terms of this Agreement.
(b) The singular includes the plural and the plural includes the
singular.
(c) A reference to any law includes any amendment or modification
to such law.
(d) A reference to any Person includes its permitted successors
and permitted assigns.
(e) Accounting terms not otherwise defined herein have the
meanings assigned to them by Generally Accepted Accounting Principles applied on
a consistent basis by the accounting entity to which they refer and, except as
otherwise expressly stated, all use of accounting terms with respect to the
Borrower shall reflect the consolidation of the financial statements of Borrower
and the Related Companies.
(f) The words "include", "includes" and "including" are not
limiting.
(g) All terms not specifically defined herein or by Generally
Accepted Accounting Principles, which terms are defined in the Uniform
Commercial Code as in effect in Massachusetts, have the meanings assigned to
them therein.
(h) Reference to a particular "ss." refers to that section of this
Agreement unless otherwise indicated.
(i) The words "herein", "hereof", "hereunder" and words of like
import shall refer to this Agreement as a whole and not to any particular
section or subdivision of this Agreement.
(j) The words "so long as any Loan or Note is outstanding" shall
mean so long as such Loan or Note is not indefeasibly paid in full in cash.
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ss.2. REVOLVING CREDIT FACILITY.
ss.2.1. Commitment to Lend; Limitation on Total Commitment. Subject to the
provisions of ss.2.5 and the other terms and conditions set forth in this
Agreement, each of the Lenders severally agrees to lend to the Borrower and the
Borrower may borrow, repay, and reborrow from time to time between the Effective
Date and the Maturity Date upon notice by the Borrower to the Agent given and
approved by the Agent in accordance with ss.2.5, such sums as are requested by
the Borrower up to a maximum aggregate principal amount of Outstanding
Obligations (after giving effect to all amounts requested) at any one time equal
to such Lender's Commitment, provided that the sum of the Outstanding
Obligations (after giving effect to all amounts requested) shall not at any time
exceed the Maximum Credit Amount. The Loans shall be made pro rata in accordance
with each Lender's Commitment Percentage and the Lenders shall at all times
immediately adjust inter se any inconsistency between each Lender's outstanding
principal amount and each Lender's Commitment. Each request for a Loan hereunder
shall constitute a representation and warranty by the Borrower that the
conditions set forth in ss.10 or ss.11 (whichever is applicable) have been
satisfied in all material respects on the date of such request and will be
satisfied on the proposed Borrowing Date of the requested Loan, provided that
the making of such representation and warranty by Borrower shall not limit the
right of any Lender not to lend upon a determination by the Majority Lenders
that such conditions have not been satisfied.
ss.2.2. Increase in Total Commitment.
(a) Provided that no Default or Event of Default has occurred
and is continuing, the Borrower shall have the option to request an increase in
the Total Commitment to not more than $45,000,000 by written notice to the
Agent, provided that any such increase must become effective within the first
twelve (12) months after the Effective Date. Upon receipt of such notice, the
Agent shall consult with Arranger and shall notify the Borrower of the amount of
facility fees to be paid to any Lenders who provide an Additional Commitment in
connection with such increase in the Total Commitment. If the Borrower agrees to
pay the facility fees so determined, then the Agent shall send a notice to all
Lenders (the "Additional Commitment Request Notice") informing them of the
Borrower's request to increase the Total Commitment and of the facility fees to
be paid with respect thereto. Each Lender who desires to provide an Additional
Commitment upon such terms shall provide Agent with a written commitment letter
specifying the amount of the Additional Commitment by which it is willing to
provide prior to such deadline as may be specified in the Additional Commitment
Request Notice. If the requested increase is oversubscribed then the Agent and
the Arranger shall allocate the Commitment Increase among the Lenders who
provide such commitment letters on such basis as the Agent and the Arranger
shall determine in their sole discretion. If the Additional Commitments so
provided are not sufficient to provide the full amount of the Commitment
Increase requested by the Borrower, then the Agent may, but shall not be
obligated to, invite one or more Eligible Assignees to become a Lender and
provide an Additional Commitment. The Agent shall provide all Lenders with a
notice setting forth the amount, if any, of the Additional Commitment to be
provided by each Lender and the revised Commitment Percentages which shall be
applicable after the effective date of the Commitment Increase specified therein
(the "Commitment Increase Date").
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(b) On the Commitment Increase Date the outstanding principal
balance of the Loans shall be reallocated among the Lenders such that after the
Commitment Increase Date the outstanding principal amount of Loans owed to each
Lender shall be equal to such Lender's Commitment Percentage (as in effect after
the Commitment Increase Date) of the outstanding principal amount of all Loans.
On the Commitment Increase Date those Lenders whose Commitment Percentage is
increasing shall advance the funds to the Agent and the funds so advanced shall
be distributed among the Lenders whose Commitment Percentage is decreasing as
necessary to accomplish the required reallocation of the outstanding Loans. The
funds so advanced shall be Prime Rate Loans until converted to LIBOR Loans which
are allocated among all Lenders based on their Commitment Percentages. To the
extent such reallocation results in certain Lenders receiving funds which are
applied to LIBOR Loans prior to the last day of the applicable Interest Period,
then the Borrower shall pay to the Agent for the account of the affected Lenders
the LIBOR Prepayment Fee which shall be determined separately for each such
Lender in the manner set forth in ss.3.3. On the Commitment Increase Date, the
Lenders' respective interests in outstanding Letters of Credit shall also be
adjusted to reflect the revised Commitment Percentages. Upon request from any
Lender whose interest in an outstanding Letter of Credit is so increasing, the
Borrower will pay additional Letter of Credit fees for the amount of such
increase at the rate provided in ss.2.8(c) prorated for the period from the
Commitment Increase Date until the expiration of the applicable Letter of
Credit.
(c) Upon the effective date of each increase in the Total
Commitment pursuant to this ss.2.2 the parties shall enter into an amendment of
this Agreement revising Schedule 1.1 and the Borrower shall execute and deliver
to the Agent new Notes for each Lender whose Commitment has changed so that the
principal amount of such Lender's Note shall equal its Commitment. The Agent
shall deliver such replacement Notes to the respective Lenders in exchange for
the Notes replaced thereby which shall be surrendered by such Lenders. Such new
Notes shall provide that they are replacements for the surrendered Notes and
that they do not constitute a novation, shall be dated as of the Commitment
Increase Date and shall otherwise be in substantially the form of the replaced
Notes. Within five (5) days of issuance of any new Notes pursuant to this
ss.2.2(d), the Borrower shall deliver an opinion of counsel, addressed to the
Lenders and the Agent, relating to the due authorization, execution and delivery
of such new Notes and the enforceability thereof, in form and substance
substantially similar to the opinion delivered in connection with the first
disbursement under this Agreement. The surrendered Notes shall be canceled and
returned to the Borrower.
ss.2.3. The Notes. The Loans shall be evidenced by separate promissory
notes of the Borrower in substantially the form of Exhibit A hereto (each a
"Note"), and completed with appropriate insertions. One or more Notes shall be
payable to the order of each Lender in an aggregate principal amount equal to
such Lender's Commitment. The Borrower irrevocably authorizes each Lender to
make or cause to be made, at or about the time of the Borrowing Date of any Loan
or at the time of receipt of any payment of principal on such Lender's Note, an
appropriate notation on such Lender's Record reflecting the making of such Loan
or (as the case may be) the receipt of such payment. The outstanding amount of
the Loans set forth on such Lender's Record shall (absent manifest error) be
prima facie evidence of the principal amount thereof owing and unpaid to such
Lender, but the failure to record, or any error in so recording, any such amount
on the Record shall not limit or otherwise affect the obligations of the
Borrower hereunder or under any Note to make payments of principal of or
interest on any Note when due. Upon receipt of an affidavit of an officer of any
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Lender as to the loss, theft, destruction or mutilation of its Note or any other
security document which is not of public record, and, in the case of any such
loss, theft, destruction or mutilation, upon cancellation of such Note or other
security document, Borrower will issue, in lieu thereof, a replacement Note or
other security document in the same principal amount thereof and otherwise of
like tenor.
ss.2.4. Interest on Loans.
(a) Each Prime Rate Loan shall bear interest for the period
commencing with the Borrowing Date thereof and ending on the last day of the
Interest Period with respect thereto at the rate equal to 0.75% per annum above
the Prime Rate.
(b) Each LIBOR Loan shall bear interest for the period commencing
with the Borrowing Date thereof and ending on the last day of the Interest
Period with respect thereto at the rate equal to the 2.75% per annum above LIBOR
determined for such Interest Period.
(c) The Borrower unconditionally promises to pay interest on each
Loan in arrears on each Interest Payment Date with respect thereto.
ss.2.5. Requests for Loans. The Borrower shall give to the Agent written
notice in the form of Exhibit B hereto of each Loan requested hereunder (a "Loan
Request") no less than (a) one (1) Business Day prior to the proposed Borrowing
Date of any Prime Rate Loan and (b) three (3) LIBOR Business Days prior to the
proposed Borrowing Date of any LIBOR Loan. Each such notice shall specify (i)
the principal amount of the Loan requested, (ii) the proposed Borrowing Date of
such Loan, (iii) the Interest Period for such Loan, and (iv) the Type of such
Loan, and shall be accompanied by a Compliance Certificate based on the most
recent certificate deliver pursuant to ss. 7.4 (d) with updated calculations
evidencing compliance with the covenants contained in ss.9.1 through ss.9.3
hereof after giving effect to such requested Loan. Within one (1) Business Day
after receipt of a Loan Request, the Agent shall provide to each of the Lenders
by facsimile a copy of such Loan Request and accompanying Compliance Certificate
and each Lender shall, within 24 hours thereafter, notify the Agent if it
believes that any of the conditions contained in ss.11 of this Agreement has not
been met or waived. If such a notice is given the Majority Lenders shall
promptly determine whether all of the conditions contained in ss.11 of this
Agreement have been met or waived. If no such notice is given by any Lender or
if following such notice the Majority Lenders determine that the conditions
contained in ss.11 have been met or waived, each of the Lenders shall be
obligated to fund its Commitment Percentage of the requested Loans. Each such
Loan Request shall be irrevocable and binding on the Borrower and the Borrower
shall be obligated to accept the Loan requested from the Lenders on the proposed
Borrowing Date. Each Loan Request shall be in a minimum aggregate amount of
$5,000,000 or an integral multiple of $1,000,000 in excess thereof.
ss.2.6. Conversion Options.
(a) The Borrower may elect from time to time to convert any
outstanding Loan to a Loan of another Type, provided that (i) with respect to
any such conversion of a LIBOR Loan to a Prime Rate Loan, the Borrower shall
give the Agent at least three (3) Business Days, prior written notice of such
election; (ii) with respect to any such conversion of a LIBOR Loan into a Prime
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Rate Loan, such conversion shall only be made on the last day of the Interest
Period with respect thereto; (iii) subject to the further proviso at the end of
this section and subject to ss.2.6(b) and ss.2.6(d) hereof with respect to any
such conversion of a Prime Rate Loan to a LIBOR Loan, the Borrower shall give
the Agent at least three (3) LIBOR Business Days, prior written notice of such
election and (iv) no Loan may be converted into a LIBOR Loan when any Default or
Event of Default has occurred and is continuing. On the date on which such
conversion is being made, each Lender shall take such action as is necessary to
transfer its Commitment Percentage of such Loans to its Domestic Lending Office
or its LIBOR Lending Office, as the case may be. All or any part of outstanding
Loans of any Type may be converted as provided herein, provided further that
each Conversion Request relating to the conversion of a Prime Rate Loan to a
LIBOR Loan shall be for an amount equal to $5,000,000 or an integral multiple of
$1,000,000 in excess thereof and shall be irrevocable by the Borrower.
(b) Any Loans of any Type may be continued as such upon the
expiration of an Interest Period with respect thereto by compliance by the
Borrower with the notice provisions contained in ss.2.6 (a) ; provided that no
LIBOR Loan may be continued as such when any Default or Event of Default has
occurred and is continuing but shall be automatically converted to a Prime Rate
Loan on the last day of the first Interest Period relating thereto ending during
the continuance of any Default or Event of Default of which the officers of the
Agent active upon the Borrower's account have actual knowledge.
(c) In the event that the Borrower does not notify the Agent of its
election hereunder with respect to any Loan, such Loan shall be automatically
converted to a Prime Rate Loan at the end of the applicable Interest Period.
(d) The Borrower may not request a LIBOR Loan pursuant to ss.2.5,
elect to convert a Prime Rate Loan to a LIBOR Loan pursuant to ss.2.6(a) or
elect to continue a LIBOR Loan pursuant to ss.2.6(b) if, after giving effect
thereto, there would be greater than three (3) LIBOR Loans outstanding. Any Loan
Request for a LIBOR Loan that would create greater than three (3) LIBOR Loans
outstanding shall be deemed to be a Loan Request for a Prime Rate Loan.
ss.2.7. Funds for Loans.
(a) Subject to ss.2.5 and other provisions of this Agreement, not
later than 11:00 a.m. (Boston time) on the proposed Borrowing Date of any Loans,
each of the Lenders will make available to the Agent, at the Agent's Head
Office, in immediately available funds, the amount of such Lender's Commitment
Percentage of the amount of the requested Loans. Upon receipt from each Lender
of such amount, and upon receipt of the documents required by ss.ss.10 or 11
(whichever is applicable) and the satisfaction of the other conditions set forth
therein, to the extent applicable, the Agent will make available to the Borrower
the aggregate amount of such Loans made available to the Agent by the Lenders.
The failure or refusal of any Lender to make available to the Agent at the
aforesaid time and place on any Borrowing Date the amount of its Commitment
Percentage of the requested Loans shall not relieve any other Lender from its
several obligation hereunder to make available to the Agent the amount of such
other Lender's Commitment Percentage of any requested Loans but shall not
obligate any other Lender or Agent to fund more than its Commitment Percentage
of the requested Loans or to increase its Commitment Percentage.
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(b) The Agent may, unless notified to the contrary by any Lender
prior to a Borrowing Date, assume that such Lender has made available to the
Agent on such Borrowing Date the amount of such Lender's Commitment Percentage
of the Loans to be made on such Borrowing Date, and the Agent may (but it shall
not be required to), in reliance upon such assumption, make available to the
Borrower a corresponding amount. If any Lender makes available to the Agent such
amount on a date after such Borrowing Date, such Lender shall pay to the Agent
on demand an amount equal to the product of (i) the average computed for the
period referred to in clause (iii) below, of the weighted average interest rate
paid by the Agent for federal funds acquired by the Agent during each day
included in such period, times (ii) the amount of such Lender's Commitment
Percentage of such Loans, times (iii) a fraction, the numerator of which is the
number of days or portion thereof that elapsed from and including such Borrowing
Date to the date on which the amount of such Lender's Commitment Percentage of
such Loans shall become immediately available to the Agent, and the denominator
of which is 365. A statement of the Agent submitted to such Lender with respect
to any amounts owing under this paragraph shall be prima facie evidence of the
amount due and owing to the Agent by such Lender.
ss.2.8. Letters of Credit.
(a) Up to $5,000,000 of the Commitments may be used by Borrower for
the issuance of Letters of Credit by the Agent for the account of the Borrower
subject to the terms and conditions set forth herein. Each Letter of Credit
shall be denominated in Dollars and shall be a standby letter of credit issued
to support the obligations of Borrower in connection with any purposes for which
the proceeds of the Loans may be used pursuant to ss.7.11. Each Letter of Credit
shall have an initial term of not more than one (1) year, and shall expire no
later than five (5) Business Days prior to the Maturity Date. Although the Agent
shall be the issuing bank of the Letter of Credit, each Lender hereby accepts
for its own account and risk an undivided interest equal to its Commitment
Percentage in the Agent's obligations and rights under each Letter of Credit
issued hereunder. Each Lender unconditionally and irrevocably agrees with the
Agent that, if a draft is paid under any Letter of Credit, such Lender shall
promptly pay to the Agent an amount equal to such Lender's Commitment Percentage
of the amount of such draft or any part thereof. Upon the issuance of each
Letter of Credit hereunder, there shall be reserved from each Lender's
Commitment an amount equal to such Lender's Commitment Percentage of the stated
amount of the Letter of Credit. Such reserved amounts shall remain in place and
shall be unavailable for borrowing under ss.2.1 until the date that the Letter
of Credit expires, is fully drawn or is terminated.
(b) The Borrower shall give to the Agent a written notice in the
form of Exhibit E hereto of each Letter of Credit requested hereunder (a "Letter
of Credit Request") no less than five (5) Business Days prior to the proposed
issuance date of the requested Letter of Credit. Each Letter of Credit Request
shall specify (i) the name and address of the beneficiary of the requested
Letter of Credit, (ii) the stated amount of the requested Letter of Credit,
(iii) the proposed issuance date and expiration date of the requested Letter of
Credit, (iv) the proposed form of the requested Letter of Credit, and (v) the
permitted purpose for which the Letter of Credit will be used, and shall be
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accompanied by a Compliance Certificate based on the most recent certificate
deliver pursuant to ss. 7.4 (d) with updated calculations evidencing compliance
with the covenants contained in ss.9.1 through ss.9.3 hereof after including in
the Outstanding Obligations and Total Liabilities the stated amount of the
requested Letter of Credit. The Agent may also require that the Borrower
complete its standard letter of credit application in the form, as such standard
form may be revised from time to time, and submit the same together with the
Letter of Credit Request. Within two (2) Business Days after receipt of a Letter
of Credit Request, the Agent shall provide to each of the Lenders by facsimile a
copy of such Letter of Credit Request and accompanying Compliance Certificate
and each Lender shall, within 24 hours thereafter, notify the Agent if it
believes that any of the conditions contained in ss.11 of this Agreement has not
been met or waived such that a Loan in an amount equal to the stated amount of
the requested Letter of Credit could be made on the proposed issuance date of
such Letter of Credit. If such a notice is given the Majority Lenders shall
promptly determine whether all of the conditions contained in ss.11 of this
Agreement have been met or waived. If no such notice is given by any Lender or
if following such notice the Majority Lenders determine that the conditions
contained in ss.11 have been met or waived, and if the Agent determines, in its
discretion, that it is willing to issue the requested Letter of Credit, and that
it is satisfied with the proposed form thereof, the Letter of Credit shall be
issued by the Agent and each of the Lenders shall then be obligated to the Agent
with respect to its Commitment Percentage of the Letter of Credit as provided
above in ss.2.8(a).
(c) On or before the issuance date of any requested Letters of
Credit, the Borrower shall pay to the Agent for its own account an issuance fee
equal to one-eighth percent (.125%) of the stated amount of the Letter of
Credit. On or before the date of any renewal or extension of a Letter of Credit,
the Borrower shall pay to the Agent for its own account a renewal fee equal to
five-hundredths percent (.05%) of the stated amount of the Letter of Credit. The
Borrower shall pay to the Agent for the account of the Lenders a Letter of
Credit fee equal to 2.75% per annum of the stated amount of the Letter of
Credit, which Letter of Credit fee shall be due and payable on the issuance date
of the Letter of Credit and on the date of each renewal or extension thereof,
and shall be prorated for any partial year based on a 360-day year and paid for
the actual number of days between the issuance date and the expiration date of
such Letter of Credit. Promptly after its receipt thereof the Agent shall
distribute such Letter of Credit fee to the Lenders pro-rata in accordance with
their respective Commitment Percentages. Such fees shall be nonrefundable and
shall not be further prorated in the event that the Letter of Credit terminates
prior to its scheduled expiration date. The Borrower also agrees to reimburse
the Agent for all reasonable fees, costs, expenses and disbursements of the
Agent in issuing, effecting payment under, amending or otherwise administering
any Letter of Credit.
(d) Promptly after each Drawing Date the Agent shall notify the
Lenders and the Borrower of the amount of the draft paid by the Agent on such
Drawing Date. The payment of a draft under a Letter of Credit shall constitute
an advance of a Mandatory Prime Rate Loan which shall bear interest as a Prime
Rate Loan from the Drawing Date. On the Drawing Date each Lender shall make
available to the Agent in immediately available funds its Commitment Percentage
of the amount of the Mandatory Prime Rate Loan so advanced upon such payment of
a draft under the Letter of Credit. If the Agent receives such funds from any
Lender on a date after the Drawing Date, such Lender shall pay to the Agent on
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demand an amount computed in the same manner as the amount due to the Agent from
a Lender which has made available funds for loans after the Borrowing Date
thereof pursuant to ss.2.7(b). Each Lender's obligation to fund its Commitment
Percentage of Mandatory Prime Rate Loans arising from the payment of a draft
under a Letter of Credit shall not be subject to the satisfaction of the
conditions set forth in ss.11. Within three (3) Business Days after each Drawing
Date, the Borrower shall deliver to the Agent a written explanation of the facts
and circumstances relating to such drawing and a Compliance Certificate and any
other information requested by the Agent for the purpose of allowing the Lenders
to determine whether the drawing or related events have resulted in a Default or
Event of Default. The Agent shall promptly provide copies of such explanation
and information to the Lenders. In the event that a Mandatory Prime Rate Loan
cannot be made on the date required in this paragraph, upon written demand by
the Agent, each other Lender shall purchase from the Agent a participating
interest in the unreimbursed draft paid pursuant to such Letter of Credit in an
amount equal to such other Lender's Commitment Percentage of such unreimbursed
draft. Each Lender agrees to purchase its Commitment Percentage of such
unreimbursed draft within one (1) business day after such demand therefor is
made by the Agent and on such date of purchase, an amount equal to such Lender's
Commitment Percentage of the such unreimbursed draft to be purchased by such
Lender shall be advanced to the Agent.
(e) The Borrower's obligations under this ss.2.8 shall be absolute
and unconditional under any and all circumstances and irrespective of any
set-off, counterclaim or defense to payment which the Borrower may have or have
had against the Agent, any Lender or any beneficiary of a Letter of Credit. The
Borrower also agrees that the Agent shall not be responsible for, and the
Borrower's reimbursement obligations hereunder shall not be affected by, among
other things, (i) the validity or genuineness of documents or of any
endorsements thereon, even though such documents shall in fact prove to be
invalid, fraudulent or forged, or (ii) any dispute between or among the Borrower
and any beneficiary of any Letter of Credit or any other party to which such
Letter of Credit may be transferred or (iii) any claims whatsoever of the
Borrower against any beneficiary of such Letter of Credit or any such
transferee. The Agent shall not be liable for any error, omission, interruption
or delay in transmission, dispatch or delivery of any message or advice, however
transmitted, in connection with any Letter of Credit, except for errors,
omissions, interruptions or delays caused by the Agent's gross negligence or
willful misconduct. The Borrower agrees that any action taken or omitted by the
Agent under or in connection with any Letter of Credit or the related drafts or
documents, if done in the absence of gross negligence or willful misconduct and
in accordance with the standards of care specified in the Uniform Customs and
Practices for Documentary Credits as the same may be amended from time to time,
shall be binding on the Borrower and shall not result in any liability of the
Agent to the Borrower.
(f) In the event that any Letters of Credit are in effect at the
time of an acceleration of the maturity of the Loans pursuant to ss.12.1, the
amounts which shall thereupon become immediately due and payable by the Borrower
shall include a sum equal to the aggregate stated amount of such then effective
Letters of Credit. Such sum shall be deposited in a cash collateral account to
be opened by the Agent which shall be under the sole dominion and control of the
Agent. The Borrower hereby grants to the Agent, for the benefit of the Lenders,
as security for the Obligations a first priority security interest in such cash
collateral account and all deposits at any time therein and the proceeds thereof
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and the Borrower shall execute and deliver such documents and take all actions
as may be required to create and maintain a valid and perfected first priority
Lien on such cash collateral account in favor of the Agent. Amounts held in such
cash collateral account shall be applied by the Agent on each Drawing Date
thereafter to pay any drafts presented pursuant to the Letters of Credit. After
all Letters of Credit have been fully drawn upon, expired or otherwise
terminated, any balance remaining in such cash collateral account shall be
applied in the same manner as Collateral proceeds under ss.12.4.
ss.3. REPAYMENT OF THE LOANS.
ss.3.1. Maturity. The Borrower unconditionally promises to pay on the
Maturity Date, and there shall become absolutely due and payable on the Maturity
Date, all of the Loans outstanding on such date, together with any and all
accrued and unpaid interest and charges thereon.
ss.3.2. Mandatory Repayments of Loan. If at any time the sum of the
Outstanding Obligations exceeds the Maximum Credit Amount, then the Borrower
shall immediately pay the amount of such excess to the Agent for the respective
accounts of the Lenders for application to the Loans.
ss.3.3. Optional Repayments of Loans. The Borrower shall have the right,
at its election, to repay the outstanding amount of the Loans, as a whole or in
part, on any Business Day, without penalty or premium; provided that the full or
partial prepayment of the outstanding amount of any LIBOR Loans made pursuant to
this ss.3.3 may be made only on the last day of the Interest Period relating
thereto, except as set forth below in this ss.3.3. The Borrower shall give the
Agent no later than 10:00 a.m., Boston time, at least two (2) Business Days'
prior written notice of any prepayment pursuant to this ss.3.3 of any Prime Rate
Loans and four (4) LIBOR Business Days, notice of any proposed repayment
pursuant to this ss.3.3 of any LIBOR Loans, specifying the proposed date of
payment of Loans and the principal amount to be paid. The Agent shall promptly
notify each Lender of the principal amount of such payment to be received by
such Lender. Each such partial prepayment of the Loans shall be in an integral
multiple of $1,000,000 and, to the extent requested by the Agent, shall be
accompanied by the payment of all charges outstanding on all Loans and of
accrued interest on the principal repaid to the date of payment. The principal
payments so received shall be applied first to the principal of Prime Rate Loans
and then to the principal of LIBOR Loans. Notwithstanding anything contained
herein to the contrary, the Borrower may make a full or partial prepayment of a
LIBOR Loan on a date other than the last day of the Interest Period relating
thereto, if all optional prepayments (in whole or in part) on such Loans shall
be accompanied by, and the Borrower hereby promises to pay, a prepayment fee in
an amount determined by the Agent in the following manner:
(a) LIBOR Prepayment Fee. Borrower acknowledges that prepayment or
acceleration of a LIBOR Loan during an Interest Period shall result in the
Lenders incurring additional costs, expenses and/or liabilities and that it is
extremely difficult and impractical to ascertain the extent of such costs,
expenses and/or liabilities. (For all purposes of this Section, any Loan not
being made as a LIBOR Loan in accordance with the Loan Request therefor, as a
result of Borrower's cancellation thereof, shall be treated as if such LIBOR
Loan had been prepaid.) Therefore, on the date a LIBOR Loan is prepaid or the
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date all sums payable hereunder become due and payable, by acceleration or
otherwise ("Prepayment Date"), Borrower will pay to Agent, for the account of
each Lender, (in addition to all other sums then owing), an amount ("LIBOR
Prepayment Fee") determined by the Agent as follows: The current rate for United
States Treasury securities (bills on a discounted basis shall be converted to a
bond equivalent) with a maturity date closest to the end of the Interest Period
as to which prepayment is made, shall be subtracted from the interest rate
applicable to the LIBOR Loan being prepaid. If the result is zero or a negative
number, there shall be no LIBOR Prepayment Fee. If the result is a positive
number, then the resulting percentage shall be multiplied by the amount of the
prepayment of the LIBOR Loan. The resulting amount shall be divided by 360 and
multiplied by the number of days remaining in the Interest Period as to which
the prepayment is being made. The resulting amount shall be the LIBOR Prepayment
Fee.
(b) Upon the written notice to Borrower from Agent, Borrower shall
immediately pay to Agent, for the account of the Lenders, the LIBOR Prepayment
Fee. Such written notice (which shall include calculations in reasonable detail)
shall, in the absence of manifest error, be conclusive and binding on the
parties hereto.
(c) Borrower understands, agrees and acknowledges the following:
(i) no Lender has any obligation to purchase, sell and/or match funds in
connection with the use of the LIBOR Rate as a basis for calculating the rate of
interest on a LIBOR Loan; (ii) the LIBOR Rate is used merely as a reference in
determining such rate; and (iii) Borrower has accepted the LIBOR Rate as a
reasonable and fair basis for calculating such rate and a LIBOR Prepayment Fee.
Borrower further agrees to pay the LIBOR Prepayment Fee, if any, whether or not
a Lender elects to purchase, sell and/or match funds.
ss.4. CERTAIN GENERAL PROVISIONS.
ss.4.1. Fees. On the Effective Date, the Borrower shall pay to FNB the
fees in the amounts specified in the Term Sheet provided by FNB to the Borrower
dated September 18, 2002. FNB shall be responsible for any fees which it may
agree to pay to other Lenders. In addition, upon each addition or substitution
of Mortgaged Properties under ss.5, Borrower shall pay Agent, for the account of
Agent only, an additional Agent's fee of $2,500.
ss.4.2. Unused Fee. The Borrower shall pay to the Agent for the accounts
of the Lenders in accordance with their respective Commitment Percentages an
Unused Fee calculated at the rates set forth below per annum on the daily amount
by which the Total Commitment exceeds the Outstanding Obligations at the
applicable annual rate determined for each fiscal quarter as follows:
(i) if the average Outstanding Obligations during such quarter was
less than 50% of the Total Commitment, then the applicable Unused Fee is at
the rate of .40% per annum for such fiscal quarter; or
(ii) if the average Outstanding Obligations during such quarter was
equal to or greater than 50% of the Total Commitment, then the applicable
Unused Fee is at the rate of .20% per annum for such fiscal quarter.
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The Unused Fee shall be payable on the basis of the applicable annual rate
quarterly in arrears on or before the third Business Day of each calendar
quarter for the immediately preceding calendar quarter commencing on the first
such date following the date hereof, with a final payment on the Maturity Date
or any earlier date on which the Commitments shall terminate. If Borrower
exercises its option to increase the Total Commitment pursuant to ss.2.2(a), the
Unused Fee shall be computed separately for the portions of the quarter prior to
and after the Commitment Increase Date and allocated among the Lenders based on
the Commitment Percentages applicable during each portion of said quarter.
ss.4.3. Funds for Payments.
(a) All payments of principal, interest, closing fees, commitment
fees and any other amounts due hereunder (other than as provided in ss.2.2(b),
ss.3.1(b), ss.4.1, ss.4.5 and ss.4.6) or under any of the other Loan Documents,
and all prepayments, shall be made to the Agent, for the respective accounts of
the Lenders, at the Agent's Head Office, in each case in Dollars in immediately
available funds.
(b) All payments by the Borrower hereunder and under any of the
other Loan Documents shall be made without setoff or counterclaim and free and
clear of and without deduction for any taxes, levies, imposts, duties, charges,
fees, deductions, withholdings, compulsory liens, restrictions or conditions of
any nature now or hereafter imposed or levied by any jurisdiction or any
political subdivision thereof or taxing or other authority therein unless the
Borrower is compelled by law to make such deduction or withholding. If any such
obligation is imposed upon the Borrower with respect to any amount payable by it
hereunder or under any of the other Loan Documents, the Borrower shall pay to
the Agent, for the account of the Lenders or (as the case may be) the Agent, on
the date on which such amount is due and payable hereunder or under such other
Loan Document, such additional amount in Dollars as shall be necessary to enable
the Lenders or the Agent to receive the same net amount which the Lenders or the
Agent would have received on such due date had no such obligation been imposed
upon the Borrower. The Borrower will deliver promptly to the Agent certificates
or other valid vouchers for all taxes or other charges deducted from or paid
with respect to payments made by the Borrower hereunder or under such other Loan
Document.
ss.4.4. Computations. All computations of interest on the Loans and of
other fees to the extent applicable shall be made on the basis of 360-day year
and the actual number of days elapsed. Except as otherwise provided in the
definition of the term "Interest Period" with respect to LIBOR Loans, whenever a
payment hereunder or under any of the other Loan Documents becomes due on a day
that is not a Business Day, the due date for such payment shall be extended to
the next succeeding Business Day, and such extension of time shall be included
in computing interest and fees in connection with such payment. The outstanding
amount of the Loans as reflected on the Records from time to time shall (absent
manifest error) be considered correct and binding on the Borrower unless within
thirty (30) Business Days after receipt by the Agent or any of the Lenders from
Borrower of any notice by the Borrower of such outstanding amount, the Agent or
such Lender shall notify the Borrower to the contrary.
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ss.4.5. Additional Costs, Etc. If any present or future applicable law
(which expression, as used herein, includes statutes, rules and regulations
thereunder and interpretations thereof by any competent court or by any
governmental or other regulatory body or official charged with the
administration or the interpretation thereof and requests, directives,
instructions and notices at any time or from time to time hereafter made upon or
otherwise issued to any Lender or the Agent by any central bank or other fiscal,
monetary or other authority, whether or not having the force of law), shall:
(a) subject any Lender or the Agent to any tax, levy, impost, duty,
charge, fee, deduction or withholding of any nature with respect to this
Agreement, the other Loan Documents, such Lender's Commitment or the Loans
(other than taxes based upon or measured by the income or profits of such Lender
or the Agent), or
(b) materially change the basis of taxation (except for changes in
taxes on income or profits) of payments to any Lender of the principal of or the
interest on any Loans or any other amounts payable to any Lender under this
Agreement or the other Loan Documents, or
(c) impose or increase or render applicable (other than to the
extent specifically provided for elsewhere in this Agreement) any special
deposit, reserve, assessment, liquidity, capital adequacy or other similar
requirements (whether or not having the force of law) against assets held by, or
deposits in or for the account of, or Loans by, or commitments of an office of
any Lender, or
(d) impose on any Lender any other conditions or requirements with
respect to this Agreement, the other Loan Documents, the Loans, the Commitment,
or any class of Loans or commitments of which any of the Loans or the Commitment
forms a part;
and the result of any of the foregoing is
(i) to increase the cost to such Lender of making, funding,
issuing, renewing, extending or maintaining any of the Loans or such Lender's
Commitment, or
(ii) to reduce the amount of principal, interest or other amount
payable to such Lender or the Agent hereunder on account of the Commitments or
any of the Loans, or
(iii) to require such Lender or the Agent to make any payment or to
forego any interest or other sum payable hereunder, the amount of which payment
or foregone interest or other sum is calculated by reference to the gross amount
of any sum receivable or deemed received by such Lender or the Agent from the
Borrower hereunder,
then, and in each such case, the Borrower will, upon demand made by such Lender
or (as the case may be) the Agent at any time and from time to time and as often
as the occasion therefor may arise, pay to such Lender or the Agent, to the
extent permitted by law, such additional amounts as will be sufficient to
compensate such Lender or the Agent for such additional cost, reduction, payment
or foregone interest or other sum.
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ss.4.6. Capital Adequacy. If any present or future law, governmental rule,
regulation, policy, guideline or directive (whether or not having the force of
law) or the interpretation thereof by a court or governmental authority with
appropriate jurisdiction affects the amount of capital required or expected to
be maintained by banks or bank holding companies and any Lender or the Agent
determines that the amount of capital required to be maintained by it is
increased by or based upon the existence of the Loans made or deemed to be made
pursuant hereto, then such Lender or the Agent may notify the Borrower of such
fact, and the Borrower shall pay to such Lender or the Agent from time to time
on demand, as an additional fee payable hereunder, such amount as such Lender or
the Agent shall determine in good faith and certify in a notice to the Borrower
to be an amount that will adequately compensate such Lender or the Agent in
light of these circumstances for its increased costs of maintaining such
capital. Each Lender and the Agent shall allocate such cost increases among its
customers in good faith and on an equitable basis.
ss.4.7. Certificate. A certificate setting forth any additional amounts
payable pursuant to ss.ss.4.5 or 4.6 and a brief explanation of such amounts
which are due, submitted by any Lender or the Agent to the Borrower, shall be
prima facie evidence that such amounts are due and owing.
ss.4.8. Indemnity. In addition to the other provisions of this Agreement
regarding any such matters, the Borrower agrees to indemnify each Lender and to
hold each Lender harmless from and against any loss, cost or reasonable expense
(including loss of anticipated profits) that such Lender may sustain or incur as
a consequence of (a) a default by the Borrower in payment of the principal
amount of or any interest on any LIBOR Loans as and when due and payable,
including any such loss or expense caused by Borrower's breach or other default
and arising from interest or fees payable by such Lender to lenders of funds
obtained by it in order to maintain its LIBOR Loans, (b) a default by the
Borrower in making a borrowing or conversion after the Borrower has given (or is
deemed to have given) a Loan Request or a Conversion Request, (c) the making of
any payment of a LIBOR Loan or the making of any conversion of a LIBOR Loan to a
Prime Rate Loan on a day that is not the last day of the applicable Interest
Period with respect thereto, including interest or fees payable by such Lender
to lenders of funds obtained by it in order to maintain any such LIBOR Loan and
(d) any failure by the Borrower to prepay a LIBOR Loan on the date specified in
a prepayment notice given by the Borrower.
ss.4.9. Default Interest and Late Charges. During any period when an Event
of Default has occurred and is continuing, or after the Maturity Date or after
judgment has been rendered on any Note, Borrower's right to select LIBOR Loans
shall cease and the unpaid principal of all Loans shall, at the option of each
Lender bear interest at a rate which is four (4) percentage points per annum
greater than that which would otherwise be applicable to Prime Rate Loans. If
the entire amount of any required principal and/or interest is not paid in full
within ten (10) days after the same is due, Borrower shall pay to the Agent a
late fee equal to five percent (5%) of the required payment.
ss.4.10. Inability to Determine LIBOR Rate. In the event, prior to the
commencement of any Interest Period relating to any LIBOR Loan, the Agent shall
reasonably determine that adequate and reasonable methods do not exist for
ascertaining the LIBOR Rate that would otherwise determine the rate of interest
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to be applicable to any LIBOR Loan during any Interest Period, the Agent shall
forthwith give notice of such determination (which shall be conclusive and
binding on the Borrower) to the Borrower. In such event (a) any Loan Request
with respect to LIBOR Loans shall be automatically withdrawn and shall be deemed
a request for Prime Rate Loans, (b) each LIBOR Loan will automatically, on the
last day of the then current Interest Period thereof, become a Prime Rate Loan,
and (c) the obligations of the Lenders to make LIBOR Loans shall be suspended
until the Agent reasonably determines that the circumstances giving rise to such
suspension no longer exist, whereupon the Agent shall so notify the Borrower.
ss.4.11. Illegality. Notwithstanding any other provisions herein, if any
present or future law, regulation, treaty or directive or in the interpretation
or application thereof shall make it unlawful for any Lender to make or maintain
LIBOR Loans, such Lender shall forthwith give notice of such circumstances to
the Borrower and thereupon (a) the Commitment of such Lender to make LIBOR Loans
or convert Loans of another Type to LIBOR Loans shall forthwith be suspended and
(b) the LIBOR Loans then outstanding shall be converted automatically to Prime
Rate Loans on the last day of each Interest Period applicable to such LIBOR
Loans or within such earlier period as may be required by law. The Borrower
hereby agrees promptly to pay to the Agent for the account of such Lender, upon
demand, any additional amounts necessary to compensate such Lender for any costs
incurred by such Lender in making any conversion in accordance with this
ss.4.11, including any interest or fees payable by such Lender to lenders of
funds obtained by it in order to make or maintain its LIBOR Loans hereunder. If,
at any time, the rate of interest, together with all amounts which constitute
interest and which are reserved, charged or taken by the Lenders as compensation
for fees, services or expenses incidental to the making, negotiating or
collection of the Loans or the other Obligations, shall he deemed by any
competent court of law, governmental agency or tribunal to exceed the maximum
rate of interest permitted to be charged by any Lender to Borrower under
applicable law, then, during such time as such rate of interest would be deemed
excessive, that portion of each sum paid attributable to that portion of such
interest rate that exceeds the maximum rate of interest so permitted shall be
deemed a voluntary prepayment of principal without penalty (including, without
limitation, prepayment fees required pursuant to Section 3.3(a) hereof). As used
herein, the term "applicable law" shall mean the law in effect as of the date
hereof, provided, however, that in the event there is a change in the law which
results in a higher permissible rate of interest, then this Agreement and the
Notes shall be governed by such new law as of its effective date.
ss.4.12. Replacement of Lenders. If any of the Lenders shall make a notice
or demand upon the Borrower pursuant to ss.4.5, ss.4.6, or ss.4.11 based on
circumstances or laws which are not generally applicable to the Lenders
organized under the laws of the United States or any State thereof, the Borrower
shall have the right to replace such Lender with an Eligible Assignee selected
by the Borrower and approved by the Agent. In such event the assignment shall
take place on a date set by the Agent at which time the assigning Lender and the
Eligible Assignee shall enter into an Assignment and Acceptance as contemplated
by ss.18.1 (and clause (d) thereof shall not be applicable) and the assigning
Lender shall receive from the Eligible Assignee a sum equal to the outstanding
principal amount of the Loans owed to the assigning Lender together with accrued
interest thereon plus the accrued commitment fee under ss.4.2 allocated to the
assigning Lender, plus all other amounts then due to the assigning Lender
hereunder.
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ss.5. COLLATERAL SECURITY; NO LIMITATION ON RECOURSE.
ss.5.1. Collateral Security. The Obligations shall be secured by (i) a
perfected first priority lien and security interest to be held by the Agent
(subject only to Permitted Liens) in the Mortgaged Properties, pursuant to the
terms of the Security Documents, (ii) a perfected first priority lien and
security interest to be held by the Agent in the Leases and rents pursuant to
the Assignments of Leases and Rents, and (iii) a perfected first priority lien
and security interest to be held by the Agent in any cash collateral account
established pursuant to ss.2.8(f) or ss.5.6.
ss.5.2. No Limitation on Recourse. Notwithstanding the foregoing
Collateral, the Obligations are full recourse obligations of the Borrower and
all of its Real Estate Assets and other properties shall be available for the
indefeasible payment in full in cash and performance of the Obligations.
ss.5.3. Additional Properties. A Real Estate Asset owned by the Borrower or
by a Related Company that is to become a Guarantor may become an additional
Mortgaged Property if (i) all Lenders, in their sole discretion, approve such
Real Estate Asset and (ii) all of the conditions set forth in ss.5.4 are
satisfied with respect to such Real Estate Asset. Borrower shall provide the
Agent with a notice of each proposed Additional Property describing such
property, its estimated value and its estimated net operating income together
with a current rent roll and the most current operating statements available
with respect thereto, which operating statements, to the extent available, shall
cover a period of at least two years. If the Agent determines that additional
information is needed to sufficiently describe such property, it may request a
supplemental notice from the Borrower containing such additional information.
When such notice is satisfactory to the Agent, it shall send a copy to each
Lender and each Lender agrees to notify the Agent within ten (10) Business Days
after its receipt of such notice as to whether or not it approves of such Real
Estate Asset to become an Additional Property. If the notice distributed by the
Agent does not include copies of the Appraisal and/ or the environmental report
relating to such Real Estate Asset, then a Lender may grant a conditional
approval subject to its subsequent review of such items. When copies of such
Appraisal and/ or the environmental report are subsequently distributed each
Lender who has so conditioned its approval agrees to notify the Agent within ten
(10) Business Days after its receipt thereof as to whether the condition to its
approval has been satisfied. The fact that any Lender has so approved the
eligibility of a Real Estate Asset shall not prevent such Lender from
withholding any consent, approval or waiver required or requested of such Lender
in connection with the satisfaction or waiver of the conditions set forth in
ss.5.4 with respect to such Real Estate Asset. In the event that all Lenders
grant such approval and all of the conditions set forth in ss.5.4 are satisfied,
the Agent shall notify the Borrower and within thirty (30) days thereafter the
Borrower and the Mortgagor shall execute and deliver an Indemnity Agreement and
the Mortgagor shall execute and deliver to the Agent a Security Deed, an
Assignment of Rents and Leases, and Subordination, Attornment and
Non-Disturbance Agreements (to the extent required by the Agent in its
discretion), which Security Documents shall be in substantially the form of the
Security Documents executed and delivered herewith with such reasonable changes
as the Agent may deem desirable to address the laws of the State where the
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Additional Property is located or the factual circumstances of the Additional
Property. If the Additional Property is not owned by the Borrower or an existing
Guarantor, but is owned by a Related Company which is 100% owned by Borrower,
such Related Company must become a Guarantor by delivery to the Agent of the
following, all in form and substance satisfactory to the Agent: (i) a Guaranty
in substantially the form of the Guaranty executed and delivered by the initial
Guarantors on the date of this Agreement and (ii) good standing certificates,
general partner certificates, secretary certificates, opinions of counsel and
such other documents as may be reasonably requested by the Agent. Such
Additional Properties shall be deemed to be Mortgaged Properties upon the
recording and filing of such Security Documents.
ss.5.4. Conditions to Approval of Additional Properties. Prior to
acceptance of any Real Estate Asset to become an Additional Property pursuant to
ss.5.3, such property must satisfy the following conditions:
(a) The Agent shall have received a certified Rent Roll, copies of
all Leases and estoppel certificates reasonably satisfactory to the Agent from
tenants occupying not less than 75% of the occupied square feet of the
Additional Property, and the Agent shall have received a Subordination,
Attornment and Non-Disturbance Agreements reasonably satisfactory to the Agent,
to the extent the Agent has requested the same.
(b) An Appraisal of the Additional Property ordered by the Agent
and paid for by the Borrower shall have been approved by the Agent.
(c) The Agent shall have received all of the items relating to the
Additional Property described in ss.10.8, ss.10.9, ss.10.10, ss.10.12, ss.10.13,
ss.10.14, ss.10.16 and ss.10.17 and such items shall have been approved by all
or some of the Lenders as required by such Sections.
(d) The Agent shall have received a Certificate executed on behalf
of the Borrower containing the representations an warranties with respect to the
Additional Property as are set forth in ss.6.18 and ss.6.22.
(e) The Agent shall have received updated certificates and other
items relating to the Borrower as described in ss.10.2, ss.10.3 and ss.10.4 and
a favorable opinion addressed to the Lenders and the Agent, in form and
substance substantially similar to the opinions delivered pursuant to ss.10.5,
relating to the Loan Documents executed by Borrower and or the Mortgagor with
respect to the Additional Property and relating to the laws of the state where
the Additional Property is located.
ss.5.5. Release of Mortgaged Properties. The Borrower may request that the
Lenders authorize the Agent to release any Mortgaged Property from the lien of
the Security Documents and the Lenders agree to approve any such request
provided that the requested release will not result in any Default or Event of
Default under this Agreement and on or before the date of such release the
Borrower delivers to the Agent a pro-forma Compliance Certificate reasonably
satisfactory to the Agent demonstrating that the requested release, once
consummated, will not result in a violation of any of the covenants in ss.9.1
through ss.9.6
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ss.5.6. Chateau Plaza Reserve Account. On or before the date that Chateau
Plaza becomes a Mortgaged Property, the Borrower shall cause AmeriVest Chateau
Inc. to establish the Chateau Plaza Reserve Account at FNB and to enter into the
Collateral Account Agreement in form and substance satisfactory to the Agent.
Borrower acknowledges that for so long as FNB is the Agent hereunder, the Agent
shall be deemed to be in control of the Chateau Plaza Reserve Account as
required for perfection of said security interest under Article 9 of the Uniform
Commercial Code. In the event that the Agent is no longer FNB, Borrower, FNB and
the successor Agent shall enter into a control agreement for purposes of
maintaining such perfection. For so long as Chateau Plaza shall be a Mortgaged
Property, Borrower shall cause AmeriVest Chateau Inc. to make monthly deposits
on or before the 20th day of each month into the Chateau Plaza Reserve Account
equal to the excess of the Net Operating Income from Chateau Plaza for the
preceding calendar month over the sum of (i) interest for one month on a
principal amount of $15,400,000 at the actual average interest rate on the Loans
during such preceding month and (ii) $45,125.00 which is an assumed contribution
from Chateau Plaza toward the regular quarterly dividend on Borrower's common
stock, provided that in the event that the current quarterly dividend rate of
13.0 cents per share is increased or decreased, the monthly sum stated in this
clause (ii) shall be proportionately increased or decreased. On or before the
20th day of each month Borrower shall give to the Agent a written Deposit
Certificate in the form of Exhibit F hereto certifying the information used to
compute the amount of each monthly deposit. Any termination fees or other
consideration paid in connection with the termination of the current lease of
the Xxxx Foods Premises shall be immediately deposited in the Chateau Plaza
Reserve Account. If the existing Lease of the Xxxx Foods Premises terminates,
then to the extent that the Mortgagor of Chateau Plaza executes Leases of
portions of the Xxxx Foods Premises, Borrower may request periodic disbursements
from the Chateau Plaza Reserve Account in amounts needed to pay leasing
commissions and costs of tenant finish improvements constructed pursuant to the
terms of such Leases, and Agent shall make such disbursements subject to receipt
of lien waivers and other documents reasonably requested by the Agent. If an
Event of Default has occurred and is continuing, the Agent may, in its sole
discretion, apply any or all funds in the Chateau Plaza Reserve Account in the
same manner as Collateral proceeds under ss.12.4.
ss.6. REPRESENTATIONS AND WARRANTIES. The Borrower represents and warrants to
the Agent and each of the Lenders as of the Effective Date as follows.
ss.6.1. Authority; Etc.
(a) Organization; Good Standing. The Borrower (i) is a Maryland
corporation duly organized, validly existing and in good standing under the laws
of the State of Maryland, (ii) has all requisite power to own its properties and
conduct its business as now conducted and as presently contemplated, and (iii)
to the extent required by law is in good standing as a foreign entity and is
duly authorized to do business in the State of Colorado and in each other
jurisdiction where such qualification is necessary except where a failure to be
so qualified in such other jurisdiction would not have a Material Adverse
Effect. Each Guarantor is a limited partnership or a limited liability company
formed under the laws of the State in which the Mortgaged Property owned by it
is located or Delaware, and each such entity is duly organized, validly existing
and in good standing under the laws of the State of its formation, has all
requisite power to own its properties and conduct its business as presently
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contemplated and is duly authorized to do business in the State in which the
Mortgaged Property owned by it is located and in each other jurisdiction where
such qualification is necessary.
(b) Authorization. The execution, delivery and performance of this
Agreement and the other Loan Documents to which the Borrower is to become a
party and the transactions contemplated hereby and thereby (i) are within the
authority of the Borrower, (ii) have been duly authorized by all necessary
proceedings on the part of the Borrower, (iii) do not conflict with or result in
any breach or contravention of any provision of law, statute, rule or regulation
to which the Borrower is subject or any judgment, order, writ, injunction,
license or permit applicable to the Borrower and (iv) do not conflict with any
provision of its charter documents or bylaws of, or any agreement or other
instrument binding upon, the Borrower or to which any of its properties are
subject. The execution, delivery and performance of the Guaranty and the other
Loan Documents to which any Guarantor is or is to become a party and the
transactions contemplated hereby and thereby (i) are within the authority of
such Guarantor, (ii) have been duly authorized by all necessary proceedings on
the part of such Guarantor and its general partner or manager, (iii) do not
conflict with or result in any breach or contravention of any provision of law,
statute, rule or regulation to which such Guarantor is subject or any judgment,
order, writ, injunction, license or permit applicable to such Guarantor and (iv)
do not conflict with any provision of such Guarantor's charter documents or
bylaws, partnership agreement, limited liability company agreement, or any
agreement or other instrument binding upon such Guarantor or to which any of
such Guarantor's properties are subject.
(c) Enforceability. Assuming due authorization, execution and
delivery by all other parties thereto, the execution and delivery of this
Agreement and the other Loan Documents to which the Borrower is or is to become
a party will result in valid and legally binding obligations of the Borrower
enforceable against it in accordance with the respective terms and provisions
hereof and thereof, except as enforceability is limited by bankruptcy,
insolvency, reorganization, moratorium or other laws relating to or affecting
generally the enforcement of creditors' rights and except to the extent that
availability of the remedy of specific performance or injunctive relief is
subject to the discretion of the court before which any proceeding therefor may
be brought. Assuming due authorization, execution and delivery by all other
parties thereto, the execution and delivery of the Guaranty and the other Loan
Documents to which any Guarantor is or is to become a party will result in valid
and legally binding obligations of such Guarantor enforceable against such
Guarantor in accordance with the respective terms and provisions hereof and
thereof, except as enforceability is limited by bankruptcy, insolvency,
reorganization, moratorium or other laws relating to or affecting generally the
enforcement of creditors' rights and except to the extent that availability of
the remedy of specific performance or injunctive relief is subject to the
discretion of the court before which any proceeding therefor may be brought.
ss.6.2. Governmental Approvals. The execution, delivery and performance by
the Borrower of this Agreement and the other Loan Documents to which the
Borrower or any Guarantor is or is to become a party and the transactions
contemplated hereby and thereby do not require the approval or consent of, or
filing with, any governmental agency or authority other than those already
obtained and the filing of the Security Documents in the appropriate records
office with respect thereto.
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ss.6.3. Title to Properties; Leases.
(a) The Borrower or one of the Guarantors holds good and clear
record and marketable (or indefeasible, with respect to Mortgaged Property
located in Texas) fee simple title to the Mortgaged Properties, subject to no
rights of others, including any mortgages, conditional sales agreements, title
retention agreements, liens or encumbrances except for the Permitted Liens.
(b) Except as indicated on Schedule 6.3 hereto, the Borrower owns
all of the properties reflected in the balance sheet of the Borrower as of the
Balance Sheet Date or acquired since that date (except properties sold or
otherwise disposed of in the ordinary course of business since that date),
subject to no rights of others, including any mortgages, leases, conditional
sales agreements, title retention agreements, liens or other encumbrances except
Permitted Liens.
ss.6.4. Financial Statements. The following financial statements have been
furnished to each of the Lenders.
(a) A balance sheet of the Borrower as of the Balance Sheet Date,
and a statement of income, statement of changes in shareholders' equity and
statement of cash flows for the fiscal year then ended, accompanied by an
auditor's report prepared without qualification. Such balance sheet and
statements of income, of changes in shareholders' equity and of cash flows have
been prepared in accordance with Generally Accepted Accounting Principles and
fairly present the financial condition of the Borrower in all material respects
as of the close of business on the date thereof and the results of operations,
changes in shareholders' equity and cash flows for the fiscal year then ended.
There are no contingent liabilities of the Borrower as of such date involving
material amounts, known to the officers of the Borrower not disclosed in said
balance sheet and the related notes thereto.
(b) A balance sheet and a statement of income, statement of changes
in shareholders, equity and statement of cash flows of the Borrower for each of
the fiscal quarters of the Borrower ended since the Balance Sheet Date certified
by Borrower's chief financial officer to have been prepared in accordance with
Generally Accepted Accounting Principles consistent with those used in the
preparation of the annual audited statements delivered pursuant to paragraph (a)
above and to fairly present the financial condition of the Borrower in all
material respects as of the close of business on the dates thereof and the
results of operations, of changes in shareholders' equity and of cash flows for
the fiscal quarters then ended (subject to year-end adjustments). There are no
contingent liabilities of the Borrower as of such dates involving material
amounts, known to the officers of the Borrower, not disclosed in such balance
sheets and the related notes thereto.
(c) With respect to each Mortgaged Property, copies of the
statements of income and expenses provided to Borrower by the seller of such
Mortgaged Property.
ss.6.5. No Material Changes. Since the Balance Sheet Date, there has
occurred no material adverse change in the financial condition or assets or
business of the Borrower as shown on or reflected in the balance sheet of the
Borrower as of the Balance Sheet Date, or the statement of income for the fiscal
year then ended, other than changes in the ordinary course of business that have
not had a Material Adverse Effect.
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ss.6.6. Franchises, Patents, Copyrights, Etc. The Borrower possesses
(either directly or through the Related Companies) all franchises, patents,
copyrights, trademarks, trade names, licenses and permits, and rights in respect
of the foregoing, adequate for the conduct of its business substantially as now
conducted without known conflict with any rights of others, including all
Permits.
ss.6.7. Litigation. Except as listed and described on Schedule 6. 7 hereto,
there are no actions, suits, proceedings or investigations of any kind pending
or, to Borrower's knowledge, threatened against the Borrower or any of the
Related Companies before any court, tribunal or administrative agency or board
that, if adversely determined, might, either in any case or in the aggregate,
have a Material Adverse Effect or materially impair the right of the Borrower or
any of the Related Companies to carry on business substantially as now conducted
by it, or result in any material liability not adequately covered by insurance,
or for which adequate reserves are not maintained on the balance sheet of the
Borrower.
ss.6.8. No Materially Adverse Contracts, Etc. The Borrower is not subject
to any charter, trust or other legal restriction, or any judgment, decree,
order, rule or regulation that has or is expected in the future to have a
Material Adverse Effect. The Borrower is not a party to any contract or
agreement that has or is expected, in the judgment of the Borrower's officers,
to have a Material Adverse Effect. None of the Guarantors is subject to any
charter, trust or other legal restriction, or any judgment, decree, order, rule
or regulation that has or is expected in the future, in the judgment of the
Borrower's officers, to have a Material Adverse Effect. None of the Guarantors
is a party to any contract or agreement that has or is expected, in the judgment
of the Borrower's officers, to have any Material Adverse Effect.
ss.6.9. Compliance With Other Instruments, Laws, Etc. Neither the Borrower
nor any Guarantor is in violation of any provision of its charter documents,
by-laws, or any agreement or instrument to which it may be subject or by which
it or any of its properties may be bound or any decree, order, judgment,
statute, license, rule or regulation, in any of the foregoing cases in a manner
that could have a Material Adverse Effect.
ss.6.10. Tax Status. The Borrower (a) has made or filed all federal and
state income and all other tax returns, reports and declarations required by any
jurisdiction to which it is subject, (b) has paid all taxes and other
governmental assessments and charges shown or determined to be due on such
returns, reports and declarations, except those being contested in good faith
and by appropriate proceedings, and (c) has set aside on its books reserves
reasonably adequate for the payment of all taxes for periods subsequent to the
periods to which such returns, reports or declarations apply. There are no
delinquent taxes in any material amount claimed to be due by the taxing
authority of any jurisdiction, and the officers of the Borrower know of no basis
for any such claim.
ss.6.11. Event of Default. No Default or Event of Default has occurred and
is continuing.
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ss.6.12. Investment Company Act. Neither the Borrower nor any Guarantor is
an "investment company", or an "affiliated company" or a "principal underwriter"
of an "investment company", as such terms are defined in the Investment Company
Act of 1940.
ss.6.13. Absence of Financing Statements, Etc. There is no financing
statement, security agreement, chattel mortgage, real estate mortgage, equipment
lease, financing lease, option, encumbrance or other document existing, filed or
recorded with any filing records, registry, or other public office, that
purports to cover, affect or give notice of any present or possible future lien
or encumbrance on, or security interest in, any Collateral, except those in
favor of the Agent or Permitted Liens.
ss.6.14. Setoff, Etc. The Collateral and the Agent's rights with respect to
the Collateral are not subject to any setoff, claims, withholdings or other
defenses. Either the Borrower or a Guarantor will be the owner of the Collateral
free from any lien, security interest, encumbrance and any other claim or
demand, except for the Permitted Liens, at the time such Collateral becomes a
Mortgaged Property.
ss.6.15. Certain Transactions. Except as set forth on Schedule 6. 15
hereto, none of the officers or employees of the Borrower is presently a party
to any transaction with the Borrower or any Related Company (other than for
services as employees, officers and trustees), including any contract, agreement
or other arrangement providing for the furnishing of services to or by,
providing for rental of real or personal property to or from, or otherwise
requiring payments to or from any officer, trustee or such employee or, to the
knowledge of the Borrower, any corporation, partnership, trust or other entity
in which any officer, trustee or any such employee or natural Person related to
such officer, trustee or employee or other Person in which such officer, trustee
or employee has a direct or indirect beneficial interest has a substantial
interest or is an officer or trustee.
ss.6.16. Benefit Plans; Multiemployer Plans; Guaranteed Pension Plans. As
of the date hereof as to any Multiemployer Plan or Guaranteed Pension Plan,
neither the Borrower nor any ERISA Affiliate maintains or contributes to any
Multiemployer Plan or Guaranteed Pension Plan. To the extent that Borrower or
any ERISA Affiliate hereafter maintains or contributes to any Employee Benefit
Plan or Guaranteed Pension Plan, it shall at all times do so in compliance with
ss.7.20 hereof.
ss.6.17. Regulations U and X. No portion of any Loan shall be used, in
whole or in part, for the purpose of purchasing or carrying any "margin
security" or "margin stock" as such terms are used in Regulations U and X of the
Board of Governors of the Federal Reserve System, 12 C.F.R. Parts 221 and 224.
ss.6.18. Environmental Compliance. The Borrower has caused Phase I
environmental assessments to be conducted with respect to the Mortgaged
Properties and which reports are listed on Schedule 6.18, the results of which
are set forth in those certain environmental reports delivered previously to the
Agent (collectively, the "Environmental Reports"). Based on the information
contained in the Environmental Reports and to the best of Borrower's knowledge,
Borrower makes the following representations and warranties:
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(a) Except as may be set forth in the Environmental Reports or
otherwise on Schedule 6.18, none of the Borrower, any of the Related Companies
or any operator of the Collateral or any portion thereof, or any operations
thereon is in violation, or alleged material violation, of any judgment, decree,
order, law, license, rule or regulation pertaining to environmental matters
(hereinafter collectively referred to as the "Environmental Laws"), including
without limitation, those arising under the Resource Conservation and Recovery
Act ("RCRA"), the Comprehensive Environmental Response, Compensation and
Liability Act of 1980 as amended ("CERCLA"), the Superfund Amendments and
Reauthorization Act of 1986 ("XXXX"), the Federal Clean Water Act, the Federal
Clean Air Act, the Toxic Substances Control Act, or any state or local statute,
regulation, ordinance, order or decree relating to health, safety or the
environment, including, without limitation, the environmental statutes,
regulations, orders and decrees of the States in which any of the Mortgaged
Properties may be located, which violation involves the Mortgaged Properties or
would have a Material Adverse Effect.
(b) Except as set forth on Schedule 6.18 attached hereto, none of
the Borrower or the Related Companies has received written notice from any third
party including, without limitation any federal, state or local governmental
authority, (i) that it has been identified by the United States Environmental
Protection Agency ("EPA") as a potentially responsible party under CERCLA with
respect to a site listed on the National Priorities List, 40 C.F.R. Part 000
Xxxxxxxx X (1986) ; (ii) that any hazardous waste, as defined by 42 U.S.C.
ss.9601(5), any hazardous substances as defined by 42 U.S.C. ss.9601(14), any
pollutant or contaminant as defined by 42 U.S.C. ss.9601(33) or any toxic
substances, oil or hazardous materials or other chemicals or substances
regulated by any Environmental Laws ("Hazardous Materials") which it has
generated, transported or disposed of have been found at any site at which a
federal, state or local agency or other third party has conducted or has ordered
that the Borrower or any of the Related Companies conduct a remedial
investigation, removal or other response action pursuant to any Environmental
Law; or (iii) that it is or shall be a named party to any claim, action, cause
of action, complaint, or legal or administrative proceeding (in each case,
contingent or otherwise) arising out of any third party's incurrence of costs,
expenses, losses or damages of any kind whatsoever in connection with the
release of Hazardous Materials.
(c) Except as set forth on Schedule 6.18 attached hereto and/or in
the Environmental Reports, (i) no portion of the Mortgaged Properties has been
used for the handling, processing, storage or disposal of Hazardous Materials
except in material compliance with applicable Environmental Laws; and except as
set forth on Schedule 6.18, no underground tank or other underground storage
receptacle for Hazardous Materials is located on any portion of the Real Estate;
(ii) in the course of any activities conducted by the Borrower, any of the
Related Companies or the operators of Mortgaged Properties, no Hazardous
Materials have been generated or are being used on the Mortgaged Properties
except in material compliance with applicable Environmental Laws; (iii) there
has been no present, or to the best of Borrower's knowledge past, releasing,
spilling, leaking, pumping, pouring, emitting, emptying, discharging, injecting,
escaping, disposing or dumping (a "Release") or threatened Release of Hazardous
Materials on, upon, into or from the Mortgaged Properties; (iv) to the best of
Borrower's knowledge, there have been no Releases on, upon, from or into any
real property in the vicinity of any of the Mortgaged Properties which, through
soil or groundwater contamination, may have come to be located on, and which
would have a material adverse effect on the value of, such Mortgaged Property;
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and (v) to the best of Borrower's knowledge, any Hazardous Materials that have
been generated on any of the Mortgaged Properties have been transported off-site
only by carriers having an identification number issued by the EPA, treated or
disposed of only by treatment or disposal facilities maintaining valid permits
as required under applicable Environmental Laws, which transporters and
facilities have been and are, to the best of the Borrower's knowledge, operating
in material compliance with such permits and applicable Environmental Laws.
Notwithstanding that any representation contained herein may be limited to the
knowledge of the Borrower, any such limitation shall not affect the covenants
specified in ss.7.10 or elsewhere in this Agreement.
ss.6.19. Subsidiaries and Affiliates. The Borrower has no Subsidiaries
except for the Related Companies listed on Schedule 1.3. The Borrower is not a
partner in any partnership and is not a member of any limited liability company,
other than the Unconsolidated Entities listed on Schedule 1.3.
ss.6.20. Leases. Based on information provided by the sellers of the
Mortgaged Properties, Borrower's review of the seller's leasing files and the
estoppel certificates obtained from tenants, and to the best of Borrower's
knowledge, Borrower makes the following representations and warranties in this
ss.6.20. A rent roll as of a date not more than 30 days prior to the Effective
Date (or the date that an Additional Property becomes a Mortgaged Property) with
respect to all Leases of any portion of the Mortgaged Properties that is
accurate in all material respects is set forth in Schedule 6.20 as the same
shall be supplemented each fiscal quarter by a certificate signed by an
authorized officer of Borrower. The Leases reflected on such rent roll
constitute the sole and complete material agreements and understandings relating
to leasing or licensing of space in the Buildings or otherwise at the Mortgaged
Properties. The Borrower has delivered to the Agent a true and complete copy of
all Leases. There are no occupancies, rights, privileges or licenses in or to
the Buildings or any other part of the Mortgaged Properties other than pursuant
to the Leases reflected on Schedule 6.20. Except as set forth in Schedule 6.20
the Leases reflected thereon are in full force and effect, in accordance with
their respective terms, without any payment default or any other material
default thereunder, nor are there any material defenses, counterclaims, offsets,
concessions or rebates available to any tenant thereunder, and neither the
Borrower nor the Mortgagor has given or made, or received, any notice of
default, or any claim, which remains uncured or unsatisfied, with respect to any
of the Leases and, to the best of the knowledge of the Borrower and of the
Mortgagor there is no basis for any such claim or notice of default by any
tenant. The Schedule 6.20 rent roll accurately and completely sets forth all
rents payable by tenants, no tenant having paid more than one month's rent in
advance. All tenant improvements or work to be done, furnished or paid for by
the landlord, or credited or allowed to a tenant, for, or in connection with,
the Buildings pursuant to any Lease have been completed and paid for, or
provided for in a manner reasonably satisfactory to the Agent, or will be paid
for by the Borrower or the Mortgagor in the ordinary course of its business. No
leasing, brokerage or like commissions, fees or payments are due from the
Borrower or the Mortgagor in respect of the Leases, except those that will be
paid for by the Borrower or the Mortgagor in the ordinary course of its
business. Except as set forth on the Schedule 6.20 rent roll, all tenants under
all Leases are in occupancy and operating the premises covered by such Leases
within the permitted uses under such Leases.
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ss.6.21. Loan Documents. All of the representations and warranties of the
Borrower or of any Guarantor made in the other Loan Documents or any document or
instrument delivered or to be delivered to the Agent or the Lenders pursuant to
or in connection with any of such Loan Documents are true and correct in all
material respects.
ss.6.22. Mortgaged Properties. The Borrower makes the following additional
representations and warranties to the best of Borrower's knowledge concerning
the Mortgaged Properties.
(a) Off-Site Utilities. All water, sewer, electric, gas, telephone
and other utilities are installed to the property lines of the Mortgaged
Properties and, except in the case of drainage facilities, are connected to the
Buildings located thereon with valid permits and are adequate to service the
Buildings in full compliance with applicable law; and the Buildings are properly
and legally connected directly to, and served exclusively by, public water and
sewer systems. No easements over land of others not yet obtained are required
for any such utilities, and no drainage of surface or other water across land of
others is required except as disclosed in the Surveys.
(b) Access; Etc. The streets abutting the Mortgaged Properties are
public roads, to which each of the Mortgaged Properties has direct access by
trucks and other motor vehicles and by foot, or are private ways (with direct
access by trucks and other motor vehicles and by foot to public roads) to which
each of the Mortgaged Properties has direct access without charge or liability
for maintenance or repair. No easements over land of others not yet obtained are
required for such means of access and egress except as disclosed in the Surveys.
(c) Independent Building. The Buildings on each Mortgaged Property
are fully independent from any other real estate in all respects including,
without limitation, in respect of structural integrity, heating, ventilating and
air conditioning, plumbing, mechanical and other operating and mechanical
systems, and electrical, sanitation and water systems, all of which are
connected directly to off-site utilities located in public streets or ways. The
Buildings are located on lots which are separately assessed for purposes of real
estate tax assessment and payment. The Buildings, all Building Service Equipment
and all paved or landscaped areas related to or used in connection with the
Buildings are located wholly within the perimeter lines of the lot or lots on
which the Mortgaged Properties are located except as disclosed in the Surveys.
(d) Condition of Building; No Asbestos. Except as set forth in the
engineering reports provided to the Agent and listed on Schedule 6.22(d), there
are no material defects in the roof, foundation, structural elements and masonry
walls of the Buildings or their heating, ventilating and air conditioning,
electrical, sprinkler, plumbing or other mechanical systems or their Building
Service Equipment; the Buildings are fully sprinkled; and no asbestos is located
in or on the Buildings except as may be disclosed in the Environmental Reports.
(e) Building Compliance with Law; Permits. The Buildings as
presently constructed and used do not violate any applicable federal or state
law or governmental regulation, or any local ordinance, order or regulation,
including but not limited to laws, regulations, or ordinances relating to
zoning, building use and occupancy, subdivision control, fire protection, health
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and sanitation; and the zoning laws permit use of the Buildings for their
current use; there is such number of parking spaces on the lot or lots on which
the Mortgaged Properties are located as is adequate under the zoning laws to
permit use of the Buildings for their current use; and all private ways
providing access to the Mortgaged Properties are zoned in a manner which will
permit access to the Buildings over such ways by trucks and other commercial and
industrial vehicles. All Permits required for the operation and maintenance of
the Mortgaged Properties, including without limitation, building permits,
curb-cut permits, water connection permits, sewer extension or connection
permits and other permits relating to the use of utilities, and permits required
under the Federal Clean Air Act, as amended, the Federal Clean Water Act, as
amended, and by state law or regulations consistent with the requirements of
said Acts, have been validly issued by the appropriate governmental Persons and
are now in full force and effect.
(f) No Required Real Property Consents, Permits, Etc. Neither the
Borrower nor any Guarantor has received any notices of, nor has any knowledge
of, any Permits, utility installations and connections (including, without
limitation, drainage facilities, curb cuts and street openings), or private
consents required for the maintenance, operation, servicing and use of the
Mortgaged Properties for their current use which have not been granted,
effected, or performed and completed (as the case may be) or any fees or charges
therefor which have not been fully paid.
(g) Suits; Judgments. There are no outstanding notices, suits,
orders, decrees or judgments relating to zoning, building use and occupancy,
subdivision control, fire protection, health, sanitation, or other violations
affecting, against, or with respect to, the Mortgaged Properties or any part
thereof.
(h) Insurance. Neither the Borrower nor any Guarantor has received
any notices from any insurer or its agent requiring performance of any work with
respect to the Mortgaged Properties or canceling or threatening to cancel any
policy of insurance, or increasing the annual premiums thereunder by more than
30%, unless substantially all of such premium increase may by passed through to
the tenants under the Leases.
(i) Real Property Taxes; Special Assessments. There are no unpaid
or outstanding real estate or other taxes or assessments on or against the
Mortgaged Properties or any part thereof which are payable by Mortgagor or
tenants (except only real estate taxes not yet due and payable). There are no
betterment assessments or other special assessments presently pending with
respect to any portion of the Mortgaged Properties, and Mortgagor has received
no notice of any such special assessment being contemplated.
(j) Historic Status. The Buildings are not historic structures or
landmarks, and the mortgaged Properties are not within any historic district
pursuant to any federal, state or local law or governmental regulation.
(k) Eminent Domain. There are no pending eminent domain
proceedings against the Mortgaged Properties or any part thereof, and, to the
Borrower's knowledge, no such proceedings are presently threatened or
contemplated by any taking authority.
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(l) Other Material Real Property Agreements; No Options. Except as
listed on Schedule 6.22(l), there are no material agreements pertaining to the
Mortgaged Properties or the operation or maintenance thereof other than as
described in this Agreement (including the Schedules hereto), and no person or
entity has any right or option to acquire any of the Mortgaged Properties or any
portion thereof or interest therein or lease any portion thereof or additional
portion thereof or provide services thereat.
ss.7. AFFIRMATIVE COVENANTS OF THE BORROWER. Borrower covenants and agrees as
follows, so long as any Loan or Note is outstanding or the Lenders have any
obligations to make Loans:
ss.7.1. Punctual Payment. The Borrower will unconditionally duly and
punctually pay the principal and interest on the Loans and all other amounts
provided for in the Note, this Agreement, and the other Loan Documents all in
accordance with the terms of the Note, this Agreement and the other Loan
Documents.
ss.7.2. Maintenance of Office. The Borrower will maintain its chief
executive office at 0000 X. Xxxxxxxx Xxxxxx, Xxxxx 000, Xxxxxx, XX 00000 or at
such other place in the United States Of America as the Borrower shall designate
upon written notice to the Agent to be delivered within fifteen (15) days of
such change, where notices, presentations and demands to or upon the Borrower in
respect of the Loan Documents may be given or made.
ss.7.3. Records and Accounts. The Borrower will (a) keep true and accurate
(in all material respects) records and books of account in which full, true and
correct entries (in all material respects) will be made in accordance with
Generally Accepted Accounting Principles and (b) maintain adequate accounts and
reserves for all taxes (including income taxes), depreciation and amortization
of its properties, contingencies, and other reserves.
ss.7.4. Financial Statements, Certificates and Information. The Borrower
will deliver to each of the Lenders:
(a) as soon as practicable, but in any event not later than ninety
(90) days after the end of each fiscal year of the Borrower, the audited balance
sheet of the Borrower at the end of such year, and the related audited statement
of income, statement of changes in shareholders, equity and statement of cash
flows for such year, each setting forth in comparative form the figures for the
previous fiscal year and all such statements to be in reasonable detail,
prepared in accordance with Generally Accepted Accounting Principles, and
accompanied by an auditor's report prepared without qualification by or by an
independent certified public accountant reasonably acceptable to the Agent;
(b) as soon as practicable, but in any event not later than
forty-five (45) days after the end of each of the first three (3) fiscal
quarters of the Borrower, copies of the unaudited balance sheets of the Borrower
as at the end of such quarter, and the related unaudited statement of income,
statement of changes in shareholders' equity and statement of cash flows for the
portion of the Borrower's fiscal year then elapsed, all in reasonable detail and
prepared in accordance with Generally Accepted Accounting Principles, together
with a certification by the principal financial or accounting officer of the
Borrower that the information contained in such financial statements fairly
presents the financial position of the Borrower on the date thereof (subject to
year-end adjustments);
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(c) as soon as practicable, but in any event no later than
forty-five (45) days after the end of each fiscal quarter of the Borrower, the
Borrower will provide the Agent with , for each of the Mortgaged Properties: (i)
a rent roll dated as of the end of such fiscal quarter in form reasonably
satisfactory to the Agent, (ii) a statement of the Net Operating Income for each
Mortgaged Property for such fiscal quarter and year to date and (iii) after the
last quarter of each year, a detailed statement of all income and expenses for
Each Mortgaged Property for such year;
(d) simultaneously with the delivery of the financial statements
referred to in subsections (a) and (b) above, a Compliance Certificate;
(e) as soon as practicable, but in any event not later than ninety
(90) days after the end of each fiscal year of the Borrower, copies of the Form
10-K statement filed with the Securities and Exchange Commission ("SEC") for
such fiscal year, and as soon as practicable, but in any event not later than
forty-five (45) days after the end of each fiscal quarter, copies of the Form
10-Q statement filed with the SEC for such fiscal quarter, provided that in
either case if the SEC has granted an extension for the filing of such
statements, Borrower shall deliver such statements to the Agent simultaneously
with the filing thereof with the SEC;
(f) promptly following the filing or mailing thereof, copies of all
other material of a financial nature filed with the SEC, and each Lender will be
included on Borrower's mailing list so that it will receive copies of all press
releases issued by the Borrower;
(g) as soon as practicable, but in any event not later than sixty
(60) days prior to the beginning of each fiscal year of the Borrower a cash flow
budget for the Borrower and a property budget for each Mortgaged Property for
such fiscal year; and
(h) from time to time such other financial data and information as
the Agent may reasonably request;
ss.7.5. Notices.
(a) Defaults. The Borrower will promptly notify the Agent in
writing of the occurrence of any Default or Event of Default. If any Person
shall give any notice or take any other action in respect of a claimed default
(whether or not constituting a Default or an Event of Default under this
Agreement) under any note, evidence of Indebtedness, indenture or other
obligation to which or with respect to which the Borrower or any of the Related
Companies is a party or obligor, whether as principal or surety, and such
default would permit the holder of such note or obligation or other evidence of
Indebtedness to accelerate the maturity thereof, the Borrower shall forthwith
give written notice thereof to the Agent and each of the Lenders, describing the
notice or action and the nature of the claimed default.
(b) Environmental Events. The Borrower will promptly notify the
Agent in writing of any of the following events: (i) upon Borrower's obtaining
knowledge of any violation of any Environmental Law regarding a Mortgaged
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Property or any Real Estate or Borrower's operations which violation could have
a Material Adverse Effect; (ii) upon Borrower's obtaining knowledge of any
potential or known Release, or threat of Release, of any Hazardous Substance at,
from, or into a Mortgaged Property which it reports in writing or is reportable
by it in writing to any governmental authority and which is material in amount
or nature or which could materially affect the value of such Mortgaged Property;
(iii) upon Borrower's receipt of any notice of violation of any Environmental
Laws or of any Release or threatened Release of Hazardous Substances, including
a notice or claim of liability or potential responsibility from any third party
(including without limitation any federal, state or local governmental
officials) and including notice of any formal inquiry, proceeding, demand,
investigation or other action with regard to (A) Borrower's or any Person's
operation of a Mortgaged Property or any other Real Estate to the extent it may
result in a Material Adverse Effect, (3) contamination on, from or into a
Mortgaged Property or any other Real Estate to the extent it may result in a
Material Adverse Effect, or (C) investigation or remediation of off-site
locations at which Borrower or any of its predecessors are alleged to have
directly or indirectly disposed of Hazardous Substances; or (iv) upon Borrower's
obtaining knowledge that any expense or loss has been incurred by such
governmental authority in connection with the assessment, containment, removal
or remediation of any Hazardous Substances with respect to which Borrower or any
of the Related Companies may be liable or for which a lien may be imposed on a
Mortgaged Property or any other Real Estate to the extent such liability may
result in a Material Adverse Effect.
(c) Notification of Claims Against Collateral. The Borrower will,
immediately upon becoming aware thereof, notify the Agent in writing of any
setoff, claims (including, with respect to any of the Mortgaged Properties,
environmental claims), withholdings or other defenses which could have a
Material Adverse Effect.
(d) Notice of Litigation and Judgments. The Borrower will give
notice to the Agent in writing within fifteen (15) days of becoming aware of any
litigation or proceedings threatened in writing or any pending litigation and
proceedings affecting any of the Mortgaged Properties or affecting the Borrower
or any of the Related Companies or to which the Borrower or any of the Related
Companies is or is to become a party involving an uninsured claim (or as to
which the insurer reserves rights) against the Borrower or any of the Related
Companies that at the time of giving of notice could reasonably be expected to
have a Materially Adverse Effect, and stating the nature and status of such
litigation or proceedings. The Borrower will give notice to the Agent, in
writing, in form and detail reasonably satisfactory to the Agent, within ten
(10) days of any judgment not covered by insurance, final or otherwise, against
the Borrower or any Guarantor in an amount in excess of $50,000.
(e) Notice of Default under Major Leases. The Borrower will
immediately notify the Agent in writing of the occurrence of any failure of any
of the Major Tenants to materially comply with any of the material terms,
covenants, conditions or agreements under any of the Major Leases.
ss.7.6. Existence; Maintenance of REIT Status; Maintenance of Properties.
The Borrower will do or cause to be done all things necessary to preserve and
keep in full force and effect its existence as a Maryland corporation and its
status as a self administered real estate investment trust under the Code. The
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Borrower will do or cause to be done all things necessary to preserve and keep
in full force and effect the existence of each Guarantor. Borrower will comply
in all material respects with all applicable rules and regulations of the SEC
relating to its publicly held stock. Borrower will continue to have its stock
listed on one of the major stock exchanges in the United States, and will comply
in all material respects with all applicable rules of the stock exchange where
the stock is so listed. The Borrower will do or cause to be done all things
necessary to preserve and keep in full force all of its rights and franchises
which in the judgment of the Borrower may be necessary to properly and
advantageously conduct the businesses being conducted by it, or by any of the
Related Companies. The Borrower will continue to engage primarily in the
businesses now conducted by it and in related businesses.
ss.7.7. Insurance. The Borrower will maintain insurance on the Mortgaged
Properties as required by the Security Deeds. With respect to other properties
and businesses of Borrower and the Related Companies, the Borrower will maintain
or cause to be maintained insurance with financially sound and reputable
insurers against such casualties and contingencies as shall be in accordance
with the general practices of businesses engaged in similar activities in
similar geographic areas and in amounts, containing such terms, in such forms
and for such periods as may be reasonable and prudent.
ss.7.8. Taxes. The Borrower will pay real estate taxes, other taxes,
assessments and other governmental charges against the Mortgaged Properties
before the same become delinquent, and will duly pay and discharge, or cause to
be paid and discharged, before the same shall become overdue, all taxes,
assessments and other governmental charges imposed upon it and its other
properties, sales and activities, or any part thereof, or upon the income or
profits therefrom, as well as all claims for labor, materials, or supplies that
if unpaid might by law become a lien or charge upon any of its properties;
provided that any such tax, assessment, charge, levy or claim need not be paid
if the validity or amount thereof shall currently be contested in good faith by
appropriate proceedings and if the Borrower shall have set aside on its books
adequate reserves with respect thereto; and provided further that the Borrower
will pay all such taxes, assessments, charges, levies or claims forthwith upon
the commencement of proceedings to foreclose any lien that may have attached as
security therefor. Promptly after payment of real estate taxes, other taxes,
assessments and other governmental charges against the Mortgaged Properties,
Borrower will provide evidence of such payments to the Agent, in the form of
receipted tax bills or other form reasonably acceptable to the Agent.
Notwithstanding anything contained herein to the contrary, with respect to the
Mortgaged Properties, Borrower, after receipt of notice from the Agent (which
notice may be given by the Agent at any time during the continuation of an Event
of Default) , shall deposit with Agent, on the first day of each month
thereafter, a sum determined by Agent to be sufficient to provide, in the
aggregate, a fund adequate to pay all real estate taxes, other taxes,
assessments and other governmental charges against the Mortgaged Properties at
least ten (10) days before the same becomes delinquent; and whenever the Agent
reasonably determines sums accumulated under such escrow to be insufficient to
meet the obligations for which such deposits were made, the Borrower shall pay,
on the demand of the Agent, any amount required to cover the deficiency therein.
ss.7.9. Inspection of Properties and Books. The Borrower shall permit the
Lenders, through the Agent's or any Lender's other designated representatives,
at the Borrower's expense to visit and inspect any of the Mortgaged Properties
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or any of Borrower's offices, to examine the books of account of the Borrower
and the Related Companies (and to make copies thereof and extracts therefrom)
and to discuss the affairs, finances and accounts of the Borrower with, and to
be advised as to the same by, its officers, all at such reasonable times and
intervals as the Agent or any Lender may reasonably request.
ss.7.10. Compliance with Laws, Contracts, Licenses, and Permits. The
Borrower will comply, and will cause all Related Companies to comply, with (a)
all applicable laws and regulations now or hereafter in effect wherever its
business is conducted, including all Environmental Laws, (b) the provisions of
all applicable partnership agreements, charter documents and by-laws, (c) all
agreements and instruments to which it is a party or by which it or any of its
Real Estate Assets may be bounds including the Leases, and (d) all applicable
decrees, orders, and judgments. If at any time any Permit from any governmental
Person shall become necessary or required in order that the Borrower may fulfill
or be in compliance with any of its obligations hereunder or under any of the
Loan Documents, the Borrower will promptly take or cause to be taken all
reasonable steps within the power of the Borrower to obtain such authorization,
consent, approval, permit or license and furnish the Agent and the Lenders with
evidence thereof.
ss.7.11. Use of Proceeds. Subject to the provisions of ss.2.5 hereof, the
proceeds of the Loans shall be used by the Borrower for making Investments
permitted by ss.8.3, repayment of other Indebtedness, and for working capital
and other purposes consistent with the covenants contained herein.
ss.7.12. Appraisals. The Appraised Values of the Mortgaged Properties,
including the Appraised Values of Additional Properties, shall be determined
pursuant to Appraisals approved by the Agent pursuant to ss.10.15 and ss.5.4(b),
and may change only upon the approval by the Agent of a new or updated Appraisal
of such Mortgaged Property. The Agent shall obtain a new or updated Appraisal of
a Mortgaged Property (i) promptly following a written request from the Borrower,
(ii) at any time if required by bank regulatory requirements, (iii) at any time
if, in the opinion of the Agent, there may have been a material adverse change
in the Appraised Value of the applicable Mortgaged Property and (iv) during the
continuation of an Event of Default, if requested by any Lender. The Borrower
shall provide to the Agent all available information needed to assist in the
preparation of an Appraisal and shall pay to the Agent on demand all reasonable
costs of all such Appraisals, provided, however, that Borrower will not have to
bear the cost of Appraisals more frequently than approximately every other year,
unless such Appraisal is ordered pursuant to clause (i) or clause (iv) above.
ss.7.13. Leases; Lease Approvals. The Borrower will cause each Mortgagor to
at all times exercise or enforce its rights under those provisions of the Leases
requiring the delivery of financial statements, rent rolls, lease summaries,
subleases and other information from the tenants or guarantors to the Mortgagor,
and Borrower will deliver to the Agent copies of all information so delivered by
any of the tenants or guarantors promptly following the Borrower's receipt
thereof. The Agent shall have the right, and the Borrower hereby authorizes the
Agent, to communicate directly with any of the tenants or guarantors solely for
the purpose of verifying any information delivered to the Agent by the Borrower
concerning the tenants or guarantors, the Buildings, or the Leases provided that
during the continuance of a Default or Event of Default the Agent may contact
-45-
any tenant or guarantor for any purpose contemplated by this Agreement or any of
the Security Documents. In the event that any of the Leases is terminated, the
Borrower will take or cause to be taken all steps within the power of the
Borrower to market and lease the untenanted rentable area of the Buildings to
such tenants and upon such terms and conditions as may be reasonably approved by
the Agent. Any proposed lease which either (i) would be a Major Lease or (ii) is
not substantially in the form of Borrower's standard lease form previously
approved by the Agent, shall be submitted to and approved by the Agent prior to
execution, which approval shall not be unreasonably withheld, conditioned or
delayed. Any request to approve a Major Lease shall also include the most recent
financial statements of such proposed tenant and any guarantor. A copy of each
new Lease, or of any amendment or modification of any Lease, shall be delivered
to the Agent promptly following execution of such Lease or Lease amendment.
ss.7.14. Interest Rate Protection. Borrower shall maintain in effect
interest rate caps, swaps or other interest hedging contracts with
counterparties and in form and substance reasonably satisfactory to the Agent
covering such portion of Borrower's variable rate debt as may be required by the
Agent.
ss.7.15. Further Assurance The Borrower will (and will cause each Guarantor
to) cooperate with the Agent and the Lenders and execute such further
instruments and documents and perform such further acts as the Agent and the
Lenders shall reasonably request to carry out to their satisfaction the
transactions contemplated by this Agreement and the other Loan Documents and the
granting and perfecting of all liens in the Collateral for the benefit of the
Agent as agent for the Lenders.
ss.7.16. Real Estate Assets Subsequently Acquired. If Borrower or any
Related Company acquires any Real Estate adjacent to any Mortgaged Property
which is to be developed and/or operated in a manner functionally related to the
Mortgaged Property, the Borrower shall notify the Agent and at any time
thereafter the Agent may require that the Security Documents for such Mortgaged
Property be amended to include such acquired Real Estate and if so required
Borrower shall, at its expense, provide the Agent with an Environmental Report,
a Title Policy, a Survey and a Surveyor's Certificate with respect to such Real
Estate.
ss.7.17. Environmental Indemnification. The Borrower covenants and agrees
that it will indemnify and hold the Agent and each Lender harmless from and
against any and all claims, expense, damage, loss or liability incurred by the
Agent or any Lender (including all reasonable costs of legal representation
incurred by the Agent or any Lender, but excluding, as applicable, for the Agent
or a Lender any claim, expense, damage, loss or liability as a result of the
gross negligence or willful misconduct of the Agent or such Lender) relating to
(a) any Release or threatened Release of Hazardous Substances on any Mortgaged
Property or any Real Estate; (b) any violation of any Environmental Laws with
respect to conditions at any Mortgaged Property or any Real Estate or the
operations conducted thereon; or (c) the investigation or remediation of
off-site locations at which the Borrower or its predecessors are alleged to have
directly or indirectly disposed of Hazardous Substances. It is expressly
acknowledged by the Borrower that this covenant of indemnification shall survive
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any foreclosure or any modification, release or discharge of any or all of the
Security Documents or the payment of the Loans and shall inure to the benefit of
the Agent and the Lenders, and their successors and assigns.
ss.7.18. Response Actions. The Borrower covenants and agrees that if any
Release or disposal of Hazardous Substances shall occur or shall have occurred
on any Mortgaged Property or any Real Estate, the Borrower will cause the prompt
containment and removal of such Hazardous Substances and remediation of such
Mortgaged Property or Real Estate as necessary to comply with all Environmental
Laws or to preserve the value of such Mortgaged Property or Real Estate.
ss.7.19. Environmental Assessments. If the Agent in its good faith
judgment, after discussion with the Borrower, has reason to believe that the
environmental condition of any Mortgaged Property has deteriorated, after
reasonable notice by the Agent, whether or not a Default or an Event of Default
shall have occurred, the Agent may, from time to time, for the purpose of
assessing and ensuring the value of such Mortgaged Property, obtain one or more
environmental assessments or audits of such Mortgaged Property prepared by an
independent engineer or other qualified consultant or expert approved by the
Agent to evaluate or confirm (i) whether any Hazardous Substances are present in
the soil or water at such Mortgaged Property and (ii) whether the use and
operation of such Mortgaged Property complies with all Environmental Laws.
Environmental assessments may include without limitation detailed visual
inspections of such Mortgaged Property including, without limitation, any and
all storage areas, storage tanks, drains, dry xxxxx and leaching areas, and the
taking of soil samples, surface water samples and ground water samples, as well
as such other investigations or analyses as the Agent deems appropriate. All
such environmental assessments shall be at the sole cost and expense of the
Borrower.
ss.7.20. Employee Benefit Plans.
(a) Representation. The Borrower and its ERISA Affiliates do not
currently maintain or contribute to any Guaranteed Pension Plan or Multiemployer
Plan.
(b) Notice. The Borrower will obtain the consent of the Agent,
which consent shall not be unreasonably withheld, conditioned or delayed, prior
to the establishment of any Employee Benefit Plan or Guaranteed Pension Plan by
the Borrower or any ERISA Affiliate.
(c) In General. Each Employee Benefit Plan maintained by the
Borrower or any ERISA Affiliate will be operated in compliance in all material
respects with the provisions of ERISA and, to the extent applicable, the Code,
including but not limited to the provisions thereunder respecting prohibited
transactions.
(d) Terminability of Welfare Plans. With respect to each Employee
Benefit Plan maintained by the Borrower or an ERISA Affiliate which is an
employee welfare benefit plan within the meaning of ss.3(1) or ss.3(2)(B) of
ERISA, the Borrower, or the ERISA Affiliate, as the case may be, has the right
to terminate each such plan at any time (or at any time subsequent to the
expiration of any applicable bargaining agreement) without liability other than
liability to pay claims incurred prior to the date of termination.
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(e) Multiemployer Plans. Without the consent of the Agent, the
Borrower will not enter into, maintain or contribute to, any multiemployer Plan.
(f) Unfunded or Underfunded Liabilities. The Borrower will not, at
any time, have accruing unfunded or underfunded liabilities with respect to any
Employee Benefit Plan, Guaranteed Pension Plan or Multiemployer Plan, or permit
any condition to exist under any Multiemployer Plan that would create a
withdrawal liability.
ss.8. CERTAIN NEGATIVE COVENANTS OF THE BORROWER. The Borrower covenants and
agrees as follows, so long as any Loan or Note is outstanding or the Lenders
have any obligation to make any Loans:
ss.8.1. Restrictions on Indebtedness. The Borrower will not, and the
Borrower will not permit any of the Related Companies or any Controlled
Unconsolidated Entity to create, incur, assume, guarantee or become or remain
liable, contingently or otherwise, with respect to any Indebtedness other than:
(a) Indebtedness to the Lenders arising under any of the Loan
Documents;
(b) current liabilities of the Borrower incurred in the ordinary
course of business but not incurred through (i) the borrowing of money, or (ii)
the obtaining of credit except for credit on an open account basis customarily
extended and in fact extended in connection with normal purchases of goods and
services;
(c) Indebtedness in respect of taxes, assessments, governmental
charges or levies and claims for labor, materials and supplies to the extent
that payment therefor shall not at the time be required to be made in accordance
with the provisions of ss.7.8;
(d) Indebtedness in respect of judgments or awards that have been
in force for less than the applicable period for taking an appeal so long as
execution is not levied thereunder or in respect of which the Borrower shall at
the time in good faith be prosecuting an appeal or proceedings for review and in
respect of which a stay of execution shall have been obtained pending such
appeal or review;
(e) endorsements for collection, deposit or negotiation and
warranties of products or services, in each case incurred in the ordinary course
of business;
(f) Indebtedness of Borrower or the Related Companies (other than
the Guarantors) to the extent the same does not create a violation of ss.9.3,
ss.9.4 or ss.9.5 and is subject to terms and conditions consistent with
conventional commercial real estate lending practices, provided that upon the
creation or assumption of any such Indebtedness in an amount exceeding
$5,000,000 Borrower shall provide the Agent with a notice describing the terms
of such Indebtedness and the security therefor and a Compliance Certificate with
updated calculations reflecting such Indebtedness.
ss.8.2. Restrictions on Liens, Etc. The Borrower will not (a) create or
incur or agree not to create or incur or suffer to be created or incurred or to
exist any lien, encumbrance, mortgage, pledge, charge, restriction or other
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security interest of any kind upon any of the Mortgaged Properties, or upon the
rents, income or profits therefrom; (b) suffer to exist for a period of more
than thirty (30) days after the same shall have been incurred any Indebtedness
(not permitted by ss.8.1(c)) or claim or demand against it that if unpaid might
by law or upon bankruptcy or insolvency, or otherwise, be given any priority
whatsoever over the Security Documents; or (c) sell, assign, pledge or otherwise
transfer any rents, issues, profits, accounts, contract rights, general
intangibles, chattel paper or instruments relating to any of the Mortgaged
Properties; provided that the Borrower may create or incur or suffer to be
created or incurred or to exist:
(i) liens to secure taxes, assessments and other governmental charges
in respect of obligations not overdue, the Indebtedness with respect to
which is permitted by ss.8.1(c);
(ii) deposits or pledges made in connection with, or to secure payment
of, workers compensation, unemployment insurance, old age pensions or other
social security obligations;
(iii) liens in respect of judgments or awards, the Indebtedness with
respect to which is permitted by ss.8.1(d);
(iv) liens of carriers, warehousemen, mechanics and materialmen, and
other like liens in existence less than 60 days from the date of creation
thereof in respect of obligations not overdue, the Indebtedness with
respect to which is permitted by ss.8.1(c);
(v) encumbrances consisting of easements, rights of way, covenants,
restrictions on the use of real property and defects and irregularities in
the title thereto; and other minor liens or encumbrances none of which in
the opinion of the Borrower interferes materially with the use of the
property affected in the ordinary conduct of the business of the Borrower,
and which matters (x) do not individually or in the aggregate have a
materially adverse effect on the use or value of the Mortgaged Property and
(xx) do not make title to such property unmarketable by the conveyancing
standards in effect where such property is located;
(vi) any Leases permitted by this Agreement or otherwise approved by
the Agent;
(vii) presently outstanding liens and other encumbrances on the
Mortgaged Properties listed on Schedule B to the Title Policies; and
(viii) liens in favor of the Agent and/or any of the Lenders granted
pursuant to the Security Documents.
ss.8.3. Restrictions on Investments. The Borrower will not, and will not
permit any of the Related Companies or any Controlled Unconsolidated Entity to
make or permit to exist or to remain outstanding any Investment except
Investments in:
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(a) marketable direct or guaranteed obligations of the United
States of America that mature within one (1) year from the date of purchase by
the Borrower;
(b) demand deposits, certificates of deposit, bankers acceptances
and time deposits of United States banks having total assets in excess of
$1,000,000,000;
(c) securities commonly known a s "commercial paper" issued by a
corporation organized and existing under the laws of the United States of
America or any state thereof that at the time of purchase have been rated and
the ratings for which are not less than "P 1" if rated by Monody's Investors
Services, Inc. , and not less than "A 1" if rated by Standard and Poors;
(d) Investments in office properties (but not including office
properties that are under construction) consistent with Borrower's business plan
submitted to the Agent prior to the date hereof and Investments in the following
categories so long as the aggregate amount of each of the following categories
of Investments does not exceed the specified percentage of Gross Asset Value set
forth in the following table and so long as the aggregate amount, without
duplication, of all Investments described in such categories does not exceed, at
any time, fifteen percent (15%) of Gross Asset Value:
------------------------------------------------ ---------------------
Category of Investment Maximum Percentage of
Gross Asset Value
------------------------------------------------ ---------------------
Real Estate Assets that are not office 5%
buildings or office parks
------------------------------------------------ ---------------------
Unconsolidated Entities primarily engaged in 10%
either the business of ownership of real estate
located in the United States
------------------------------------------------ ---------------------
Undeveloped land 5%
------------------------------------------------ ---------------------
Mortgages and notes receivable 5%
------------------------------------------------ ---------------------
ss.8.4. Merger, Consolidation, Acquisition and Disposition of Properties.
(a) The Borrower will not, and will not permit any of the Related
Companies or any Controlled Unconsolidated Entity to become a party to any
merger or consolidation, or agree to or effect any stock acquisition, or enter
into any partnership or joint venture other than partnerships or joint ventures
relating to Unconsolidated Entities to the extent allowed by ss.8.3(d).
(b) Borrower will not become a party to or agree to or effect any
disposition of the Collateral without obtaining the prior written consent of the
Agent which consent shall not be given with respect to a Mortgaged Property
unless the Lenders have authorized a release thereof pursuant to ss.5.5.
(c) Borrower will not, and will not permit any of the Related
Companies or any Controlled Unconsolidated Entity to acquire or sell or
otherwise dispose of Real Estate Assets (other than the Mortgaged Properties)
pursuant to a single transaction or a series of related transactions if the
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aggregate price or other consideration exceeds $5,000,000 unless prior to such
acquisition, sale or transfer, the Borrower shall provide the Agent with a
notice describing the terms of such transaction and a Compliance Certificate
with updated calculations reflecting such transaction, and, if the aggregate
price or other consideration for an acquisition of Real Estate Assets exceeds
$30,000,000, unless prior to such acquisition, the Borrower shall have obtained
the consent of the Majority Lenders.
(d) The Borrower shall not transfer any assets to any of the
Related Companies or any Unconsolidated Entity, and shall not make any other
material changes to the structure of its corporate organization or the manner in
which it operates its business, except with the prior written consent of the
Agent.
ss.8.5. Sale and Leaseback. The Borrower will not enter into any
arrangement, directly or indirectly, whereby the Borrower shall sell or transfer
any property owned by it in order then or thereafter to lease such property or
lease other property that the Borrower intends to use for substantially the same
purpose as the property being sold or transferred. The Borrower will not permit
any of the Related Companies or any Controlled Unconsolidated Entity to enter
into any such arrangement.
ss.8.6. Compliance with Environmental Laws. The Borrower will not do, and
will not permit any of the Related Companies or any Controlled Unconsolidated
Entity to do, any of the following: (a) use any of the Real Estate or any
portion thereof as a facility for the handling, processing, storage or disposal
of Hazardous Materials except for immaterial amounts of Hazardous Materials used
in the routine maintenance and operation of the Real Estate and in compliance
with applicable law, (b) cause or permit to be located on any of the Real Estate
any underground tank or other underground storage receptacle for Hazardous
Materials except in material compliance with Environmental Laws, (c) generate
any Hazardous Materials on any of the Real Estate except in material compliance
with Environmental Laws, or (d) conduct any activity at any Real Estate or use
any Real Estate in any manner so as to cause a Release.
ss.8.7. Distributions. Borrower shall not permit the total Distributions by
it during any fiscal year to exceed ninety percent (90%) of Funds from
Operations except that such limitation on Distributions may be exceeded to the
extent necessary for the Borrower to maintain its REIT status provided that the
Borrower provides the Agent with a letter from its accountants or attorneys
setting forth the basis for computation of the amount of such necessary excess
Distributions. During any period when any Default or Event of Default has
occurred and is continuing the total Distributions by the Borrower will not
exceed the minimum amount necessary for the Borrower to maintain its REIT
status.
ss.8.8. Major Leases. The Borrower will not materially amend, supplement or
otherwise materially modify, or terminate or cancel, or accept the surrender of,
or grant any concessions to or waive the performance of any of the Major Tenants
under, the Major Leases without the prior approval of the Agent which approval
shall not be unreasonably conditioned, withheld or delayed. The Borrower will
not grant any consent to any assignment of any of the Major Leases by any of the
Major Tenants without the prior approval of the Agent which approval shall not
be unreasonably conditioned, withheld or delayed. The Borrower will not,
directly or indirectly, cause or permit to exist any condition which would
result in the termination or cancellation of, or which would relieve the
performance of any obligation of any of the Major Tenants under the Major
Leases.
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ss.9. FINANCIAL COVENANTS OF THE BORROWER. The Borrower covenants and agrees as
follows, so long as any Loan or Note is outstanding or any Lender has any
obligation to make any Loan:
ss.9.1. Borrowing Base Value. The Borrower will not at any time permit the
Outstanding Obligations to exceed the aggregate Borrowing Base Value of the
Mortgaged Properties.
ss.9.2. Minimum Debt Service Coverage. The Borrower will not permit the
Outstanding Obligations to exceed an amount such that: (a) the Collateral Cash
Flow, divided by (b) Pro Forma Debt Service Charges, would be less than 1.35,
calculated as of the end of each fiscal quarter.
ss.9.3. Total Liabilities to Gross Asset Value. The Borrower will not
permit Total Liabilities to exceed seventy percent (70%) of Gross Asset Value,
calculated as of the end of each fiscal quarter through and including the fiscal
quarter ending March 31, 2004. Beginning with the fiscal quarter ending June 30,
2004, the Borrower will not permit Total Liabilities to exceed sixty-five
percent (65%) of Gross Asset Value, calculated as of the end of each fiscal
quarter.
ss.9.4. Adjusted EBITDA to Interest Expense. The Borrower will not permit
the ratio of its Adjusted EBITDA to Interest Expense to be less than 1.75 to 1.0
for any period of four consecutive fiscal quarters, calculated as of the end of
each fiscal quarter through and including the fiscal quarter ending March 31,
2004. Beginning with period of four consecutive fiscal quarters ending June 30,
2004, the Borrower will not permit the ratio of its Adjusted EBITDA to Interest
Expense to be less than 2.0 to 1.0 for any period of four consecutive fiscal
quarters, calculated as of the end of each fiscal quarter.
ss.9.5. EBITDA to Fixed Charges. The Borrower will not permit the ratio of
its EBITDA to Fixed Charges to be less than 1.5 to 1.0 for any period of four
consecutive fiscal quarters, calculated as of the end of each fiscal quarter
through and including the fiscal quarter ending March 31, 2004. Beginning with
period of four consecutive fiscal quarters ending June 30, 2004, the Borrower
will not permit the ratio of its EBITDA to Fixed Charges to be less than 1.75 to
1.0 for any period of four consecutive fiscal quarters, calculated as of the end
of each fiscal quarter.
ss.9.6. Minimum Tangible Net Worth. The Borrower will not at any time
permit its Tangible Net Worth to be less than the sum of $25,000,000, plus 75%
of Net Offering Proceeds, plus 100% of Net OP Proceeds.
ss.10. CONDITIONS TO EFFECTIVENESS. This Agreement shall become effective when
each of the following conditions precedent have been satisfied, provided,
however, that the parties agree that the time period for satisfaction of each of
the conditions relating to Chateau Plaza shall be extended until the first to
occur of the closing date of the purchase of Chateau Plaza or 30 days after the
Effective Date:
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ss.10.1. Loan Documents. Each of the Loan Documents shall have been duly
executed and delivered by the respective parties thereto, shall be in full force
and effect and shall be in form and substance satisfactory to each of the
Lenders. Each Lender shall have received a fully executed original of its Note
prior to or on the Effective Date.
ss.10.2. Good Standing Certificates and Certified Copies. The Agent shall
have received (i) a Certificate of Good Standing for the Borrower from the State
of Maryland and a certificate of qualification for the Borrower to do business
from the State of Colorado, (ii) certificates of good standing with respect to
each Guarantor from the State of its organization and a certificate of
qualification to do business from the State in which the Mortgaged Property
owned by it is located, (iii) a copy of the Borrower's Articles of Incorporation
certified by the Maryland Secretary of State and (iv) and certified copies of
certificates of formation, operating agreements, partnership agreements,
certificates of limited partnership and other applicable organizational
documents with respect to each of the Guarantors.
ss.10.3. By-laws; Resolutions. All action on the part of the Borrower or
any Guarantor necessary for the valid execution, delivery and performance by the
Borrower and the Guarantors of this Agreement and the other Loan Documents to
which it is or is to become a party shall have been duly and effectively taken,
and evidence thereof satisfactory to the Agent shall have been provided to the
Agent. The Agent shall have received from the Borrower true copies of its
by-laws and the resolutions adopted by its Board of Directors authorizing the
transactions described herein, each certified by its secretary to be true and
complete and in effect on the Effective Date.
ss.10.4. Incumbency Certificate; Authorized Signers. The Agent shall have
received from the Borrower an incumbency certificate, dated as of the Effective
Date, signed by a duly authorized officer of the Borrower and giving the name
and bearing a specimen signature of each Responsible Officer.
ss.10.5. Opinions of Counsel Concerning Organization and Loan Documents.
Each of the Lenders and the Agent shall have received favorable opinions
addressed to the Lenders and the Agent and dated as of the Effective Date, in
form and substance reasonably satisfactory to the Lenders and the Agent from
Borrower's counsel, which opinion may rely on opinions from other law firms
approved by the Lenders as to matters of law applicable in the various states
where the Borrower or any Guarantor is organized or where the Mortgaged
Properties are located.
ss.10.6. Payment of Fees. The Borrower shall have paid to the Agent the
fees pursuant to ss.4.1 and shall have paid all other expenses as provided in
ss.15 hereof then outstanding.
ss.10.7. Validity of Liens. The Security Documents shall be effective to
create in favor of the Agent legal, valid and enforceable first priority,
perfected liens and security interests in the Collateral covered thereby,
subject only to the Permitted Liens. All filings, recordings, deliveries of
instruments and other actions or consents necessary or desirable in the opinion
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of the Agent to grant, perfect, protect and preserve such liens and security
interests shall have been duly effected. The Agent shall have received evidence
thereof in form and substance satisfactory to the Agent.
ss.10.8. Survey. The Agent shall have received Surveys of the Mortgaged
Properties, together with the Surveyor's Certificates, bearing dates acceptable
to the Agent, and in form and substance acceptable to the Agent.
ss.10.9. Title Insurance; Title Exception Documents. The Agent shall have
received the Title Policies, together with proof of payment of all fees and
premiums for such policies. The Agent shall have received true and accurate
copies of all documents listed as exceptions under such policies.
ss.10.10. Leases. The Mortgaged Properties shall be leased so as to be
materially consistent with the leasing information previously submitted to the
Agent and used as the basis for the Appraisals. The Agent shall have received
true copies of the Leases.
ss.10.11. Subordination, Attornment and Non-Disturbance Agreements;
Estoppel Certificates. The Agent shall have received (a) Subordination,
Attornment and Non-Disturbance Agreements, in form and substance reasonably
satisfactory to the Agent from all Major Tenants, and (b) estoppel certificates
in form and substance reasonably satisfactory to the Agent from all Major
Tenants and from other tenants who, together with the Major Tenants,
collectively lease and occupy at least 85% of the occupied gross leasable area
in each of the Mortgaged Properties.
ss.10.12. Certificates of Insurance. The Agent shall have received (a) a
certificate of insurance as to the insurance maintained by Borrower on the
Mortgaged Properties (including flood insurance if necessary) from the insurer
or an independent insurance broker dated as of the Effective Date, identifying
insurers, types of insurance, insurance limits, and policy terms; (b) certified
copies of all policies evidencing such insurance (or certificates therefor
signed by tile insurer or an agent authorized to bind the insurer); and (c) such
further information and certificates from Borrower, its insurers and insurance
brokers as the Agent may reasonably request.
ss.10.13. Hazardous Substance Assessments. The Agent shall have received a
hazardous waste site assessment report concerning Hazardous Substances and
asbestos on the Mortgaged Properties, dated as of a recent date, from
environmental engineers reasonably acceptable to the Agent which report shall
have been approved by the Agent and all Lenders.
ss.10.14. Evidence of Compliance with Laws and Permits. The Agent shall
have received final certificates of occupancy for those portions of the
Buildings occupied by tenants, legal opinions, certifications from engineers or
architects and/or other evidence satisfactory to the Agent that all activities
being conducted on the Mortgaged Properties which require federal, state or
local Permits have been duly licensed and that such Permits are in full force
and effect.
ss.10.15. Appraisals. The Agent and each of the Lenders shall have received
Appraisals dated as of a recent date in form and substance satisfactory to the
Agent.
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ss.10.16. Inspecting Engineer's Reports. The Agent shall have received
reports, addressed to Agent and the Lenders or accompanied by reliance letters
in favor of the Agent and the Lenders, from third party inspecting engineers
dated not more than six (6) months prior to the date hereof as to the good
structural condition of the Buildings located on the Mortgaged Properties, which
reports shall be in form and substance reasonably satisfactory to the Agent.
ss.10.17. UCC Lien Searches. The Agent shall have received UCC lien
searches of the applicable public records disclosing no conditional sales
contracts, security agreements, chattel mortgages, leases of personalty,
financing statements or other encumbrances which affect any of the Collateral
other than those relating to any liens permitted hereby and by the Security
Documents.
ss.10.18. Purchase of Mortgaged Properties. The Agent shall have received
satisfactory evidence that Borrower has completed the purchase of the initial
Mortgaged Properties substantially in accordance with the terms and conditions
set forth in the Purchase and Sale Agreements previously submitted to the Agent.
ss.10.19. Compliance Certificate. The Agent shall have received a
Compliance Certificate showing compliance with ss.9.1 and ss.9.2 based on the
Outstanding Obligations after the initial disbursement of Loans hereunder and
showing compliance with ss.8.3(d) and ss.9.3 through ss.9.6 as of September 30,
2002 and for the fiscal periods ending thereon.
ss.11. CONDITIONS TO ALL BORROWINGS. The obligations of the Lenders to make any
Loan or to issue any Letter of Credit, whether on or after the Effective Date,
shall also be subject to the satisfaction of the following conditions precedent:
ss.11.1. Representations True; No Event of Default; Compliance Certificate.
Each of the representations and warranties of the Borrower contained in this
Agreement, the other Loan Documents or in any document or instrument delivered
pursuant to or in connection with this Agreement shall be true and correct in
all material respects as of the date as of which they were made and shall also
be true and correct in all material respects at and as of the time of the making
of such Loan or the issuance of such Letter of Credit, with the same effect as
if made at and as of that time (except to the extent of changes resulting from
transactions contemplated or permitted by this Agreement and the other Loan
Documents and changes occurring in the ordinary course of business that singly
or in the aggregate are not materially adverse, and except to the extent that
such representations and warranties relate expressly to an earlier date); the
Borrower shall have performed and complied with all terms and conditions herein
required to be performed by it or prior to the Borrowing Date of such Loan or
the issuance date of such Letter of Credit; and no Default or Event of Default
shall have occurred and be continuing on the date of any Loan Request or on the
Borrowing Date of such Loan or on the date of any Letter of Credit Request or on
the issuance date of such Letter of Credit; and Agent shall have received a
Compliance Certificate with computations evidencing compliance with the
covenants contained in ss.9.1 through ss.9.3 hereof after giving effect to such
requested Loan or Letter of Credit.
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ss.11.2. No Legal Impediment. No change shall have occurred in any law or
regulations thereunder or interpretations thereof that in the reasonable opinion
of any Lender would make it illegal for such Lender to make such Loan or to hold
an interest in such Letter of Credit.
ss.11.3. Governmental Regulation. Each Lender shall have received such
statements in substance and form reasonably satisfactory to such Lender as such
Lender shall require for the purpose of compliance with any applicable
regulations of the Comptroller of the Currency or the Board of Governors of the
Federal Reserve System.
ss.11.4. Proceedings and Documents. All proceedings in connection with the
transactions contemplated by this Agreement, the other Loan Documents and all
other documents incident thereto shall be reasonably satisfactory in substance
and in form to the Agent, and the Lenders shall have received all information
and such counterpart originals or certified or other copies of such documents as
the Agent may reasonably request.
ss.12. EVENTS OF DEFAULT; ACCELERATION; ETC.
ss.12.1. Events of Default and Acceleration. If any of the following events
("Events of Default" or, if the giving of notice or the lapse of time or both is
required, then, prior to such notice or lapse of time, "Defaults") shall occur:
(a) the Borrower shall fail to pay any principal of the Loans when
the same shall become due and payable;
(b) the Borrower shall fail to pay any interest on the Loans or
any other sums due hereunder or under any of the other Loan Documents within
five (5) days after the same shall become due and payable;
(c) the Borrower shall fail to comply with any of its covenants
contained in ss.7.5, ss.7.6, ss.7.7, ss.7.8, ss.8 or ss.9 hereof;
(d) the Borrower shall fail to perform any other term, covenant or
agreement contained herein or in any of the other Loan Documents (other than
those specified elsewhere in this ss.12) for thirty (30) days after written
notice of such failure from Agent to the Borrower;
(e) any representation or warranty of the Borrower in this
Agreement or any of the other Loan Documents or in any other document or
instrument delivered pursuant to or in connection with this Agreement, shall
prove to have been false in any material respect upon the date when made or
deemed to have been made or repeated, provided, however, that with respect to
the representations and warranties of the Borrower contained in ss.6.18 and in
paragraphs (a), (c), (d), (e) and (f) of ss.6.22, if the condition or event
making the representation and warranty false is capable of being cured by the
Borrower, no enforcement action has been commenced against the Borrower or the
applicable Mortgaged Property on account of such condition or event nor is the
applicable Mortgaged Property subject to risk of forfeiture due to such
condition or event, and the Borrower promptly commences the cure thereof after
the Borrower's first obtaining knowledge of such condition or event, the
Borrower shall have a period of thirty (30) days after the date that the
Borrower first obtained knowledge of such condition or event during which the
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Borrower may cure such condition or event (or, if such condition or event is not
reasonably capable of being cured within such thirty (30) day period, such
additional period of time as may be reasonably required in order to cure such
condition or event but in any event such period shall not exceed six (6) months
from the date that the Borrower first obtained knowledge of such condition or
event), and no Event of Default shall exist hereunder during such thirty (30)
day or additional period so long as the Borrower continuously and diligently
pursues the cure of such condition or event and the other conditions to such
cure period have not changed;
(f) the Borrower, any of the Related Companies or any Controlled
Unconsolidated Entity shall fail to pay at maturity, or within any applicable
period of grace, any Indebtedness, or shall fail to observe or perform any
material term, covenant or agreement contained in any agreement by which it is
bound, evidencing or securing Indebtedness for such period of time as would
permit (assuming the giving of appropriate notice if required) the holder or
holders thereof or of any obligations issued thereunder to accelerate the
maturity thereof, and in any event, such failure shall continue for thirty (30)
days, unless the aggregate amount of all such defaulted Indebtedness plus the
amount of any unsatisfied judgments described in paragraph (i) of this ss.12.1
is less than $5,000,000.00;
(g) any of the Borrower, any of the Related Companies or any
Controlled Unconsolidated Entity shall make an assignment for the benefit of
creditors, or admit in writing its inability to pay or generally fail to pay its
debts as they mature or become due, or shall petition or apply for the
appointment of a trustee or other custodian, liquidator or receiver of any
substantial part of its properties or shall commence any case or other
proceeding under any bankruptcy, reorganization, arrangement, insolvency,
readjustment of debt, dissolution or liquidation or similar law of any
jurisdiction, now or hereafter in effect, or shall take any action to authorize
or in furtherance of any of the foregoing, or if any such petition or
application shall be filed or any such case or other proceeding shall be
commenced against any such Person and such Person shall indicate its approval
thereof, consent thereto or acquiescence therein;
(h) a decree or order is entered appointing any such trustee,
custodian, liquidator or receiver or adjudicating the Borrower, any of the
Related Companies or any Controlled Unconsolidated Entity bankrupt or insolvent,
or approving a petition in any such case or other proceeding, or a decree or
order for relief is entered in respect of the Borrower, any of the Related
Companies or any Controlled Unconsolidated Entity in an involuntary case under
federal bankruptcy laws as now or hereafter constituted;
(i) there shall remain in force, undischarged, unsatisfied and
unstayed, for more than thirty days, whether or not consecutive, any uninsured
final judgment against the Borrower that, with other outstanding uninsured final
judgments, undischarged, against the Borrower plus the amount of any defaulted
Indebtedness under paragraph (f) of this ss.12.1, exceeds in the aggregate
$5,000,000.00;
(j) if any of the Loan Documents or any material provision of any
Loan Documents shall be unenforceable, cancelled, terminated, revoked or
rescinded otherwise than in accordance with the terms thereof or with the
express prior written agreement, consent or approval of the Agent, or any action
at law, suit or in equity or other legal proceeding to make unenforceable,
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cancel, revoke or rescind any of the Loan Documents shall be commenced by or on
behalf of the Borrower, or any court or any other governmental or regulatory
authority or agency of competent jurisdiction shall make a determination that,
or issue a judgment, order, decree or ruling to the effect that, any one or more
of the Loan Documents is illegal, invalid or unenforceable in accordance with
the terms thereof;
(k) the Borrower, any of the Related Companies or any Controlled
Unconsolidated Entity shall be indicted for a federal crime, a punishment for
which could include the forfeiture of any assets of the Borrower;
(l) the Borrower shall fail to pay, observe or perform any term,
covenant, condition or agreement contained in any agreement, document or
instrument evidencing, securing or otherwise relating to any Indebtedness of the
Borrower to any Lender (other than the Obligations) and/or relating to any
Permitted Lien (other than the Obligations) within any applicable period of
grace provided for in such agreement, document or instrument;
(m) if a Major Lease shall be cancelled or terminated otherwise
than with the express prior written agreement, consent or approval of the Agent,
which shall not be unreasonably withheld, conditioned or delayed;
(n) any "Event of Default", as defined in any of the other Loan
Documents, shall occur; or
(o) Any two or more of Xxxxxxx Xxxxxx, Xxxxxxx Xxxxxx and Xxxx
Xxxxxxxx shall cease to be a senior executive officer of the Borrower and the
Board of Directors of the Borrower shall not, within six months thereafter, hire
a substitute officer who has been approved by the Majority Lenders, with each
Lender having the right to approve or disapprove any proposed successor in its
sole reasonable discretion;
then, and in any such event, so long as the same may be continuing, the Agent
may, and upon the request of the Majority Lenders shall, by notice in writing to
the Borrower declare all amounts owing with respect to this Agreement, the Notes
and the other Loan Documents to be, and they shall thereupon forthwith become,
immediately due and payable without presentment, demand, protest or other notice
of any kind, all of which are hereby expressly waived by the Borrower; provided
that in the event of any Event of Default specified in ss.ss.12.1(g) or 12.1(h),
all such amounts shall become immediately due and payable automatically and
without any requirement of notice from the Agent or action by the Majority
Lenders.
ss.12.2. Termination of Commitments. If any one or more Events of Default
specified in ss.12.1(g) or ss.12.1(h) shall occur, any unused portion of the
Commitments hereunder, shall forthwith terminate and the Lenders shall be
relieved of all obligations to make Loans to the Borrower or to issue Letters of
Credit for the benefit of the Borrower. If any other Event of Default shall have
occurred and be continuing, any Lender may by notice to the Borrower terminate
the unused portion of its Commitment hereunder, and upon such notice being given
such unused portion of its Commitment hereunder shall terminate immediately and
such Lender shall be relieved of all further obligations to make Loans. No
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termination of such Lender's Commitment hereunder shall relieve the Borrower of
any of the Obligations or any of its existing obligations to such Lender arising
under other agreements or instruments.
ss.12.3. Remedies. In case any one or more of the Events of Default shall
have occurred, and whether or not the Lenders shall have accelerated the
maturity of the Loans pursuant to ss.12.1, each Lender, if owed any amount with
respect to the Loans, may, with the consent of the Majority Lenders, direct the
Agent to proceed to protect and enforce the rights and remedies of the Agent and
the Lenders under this Agreement, the Notes or any of the other Loan Documents
by suit in equity, action at law or other appropriate proceeding, whether for
the specific performance of any covenant or agreement contained in this
Agreement and the other Loan Documents or any instrument pursuant to which the
obligations are evidenced, including to the full extent permitted by applicable
law the obtaining of the ex parte appointment of a receiver and, if any amount
shall have become due, by declaration or otherwise, to proceed to enforce the
payment thereof or any other legal or equitable right of such Lender. No remedy
herein conferred upon any Lender or the Agent or the holder of any Note is
intended to be exclusive of any other remedy and each and every remedy shall be
cumulative and shall be in addition to every other remedy given hereunder or now
or hereafter existing at law or in equity or by statute or any other provision
of law.
ss.12.4. Distribution of Collateral Proceeds. In the event that, during the
continuance of any Default or Event of Default, the Agent or any Lender as the
case may be, receives any monies in connection with the enforcement of any of
the Security Documents, or otherwise with respect to the realization upon any of
the Collateral, such monies shall be distributed for application as follows:
(a) First, to the payment of, or (as the case may be) the
reimbursement of the Agent for or in respect of all reasonable costs, expenses,
disbursements and losses which shall have been incurred or sustained by the
Agent in connection with the collection of such monies by the Agent, for the
exercise, protection or enforcement by the Agent of all or any of the rights,
remedies, powers and privileges of the Agent or the Lenders under this Agreement
or any of the other Loan Documents or in respect of the Collateral or in support
of any provision of adequate indemnity to the Agent against any taxes or liens
which by law shall have, or may have, priority over the rights of the Agent to
such monies;
(b) Second, to all other Obligations in such order or preference
as the Majority Lenders may determine; provided, however, that distribution in
respect of such Obligations shall be made among the Lenders pro rata in
accordance with each Lender's respective Commitment Percentage; and provided,
further, that the Agent may in its discretion make proper allowance to take into
account any Obligations not then due and payable;
(c) Third, upon payment and satisfaction in full or other
provisions for payment in full satisfactory to the Lenders and the Agent of all
of the obligations, and to the payment of any obligations required to be paid
pursuant to applicable laws applicable to such enforcement; and
(d) Fourth, the excess, if any, shall be returned to the Borrower
or to such other Persons as are legally entitled thereto.
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ss.12.5. Addition of Real Estate Assets to Cure Default. As an alternative
to the payment of cash to cure a Default under ss.9.1 or ss.9.2 hereof, the
Borrower shall have the right to offer to provide additional Collateral to the
Agent in the form of Additional Properties pursuant to ss.5.3 and ss.5.4, for
the purpose of curing a Default under ss.9.1 or ss.9.2 hereof, if the Borrower
designates such Collateral for addition within fifteen (15) days after the
occurrence of such Default and the Borrower executes and delivers to the Agent a
Security Deed, an Assignment of Leases and Rents, an Indemnity Agreement and
UCC-1 Financing Statements relating to the Additional Property together with the
Certificates and opinion described in ss.5.4(d) and ss.5.4(e) within thirty (30)
days after the occurrence of such Default. The Agent and the Lenders shall
accept and approve the addition of such Collateral as a cure for such Default if
such Collateral shall cure the Default and satisfies the due diligence
requirements of the Agent and the Lenders, including, without limitation, the
conditions set forth in ss.5.4 and those requirements with respect to the
Mortgaged Properties specified in ss.10 hereof, within ninety (90) days after
the occurrence of the subject Default, and at the time that such due diligence
requirements are so satisfied, no other Defaults or Events of Default are
continuing. If any such additional Collateral is provided to the Agent in
accordance with this ss.12.5, such additional Collateral shall, for all purposes
hereof, be deemed to be a "Mortgaged Property." Until the Agent and all Lenders
have acknowledged in writing the cure of such Default, all consequences of such
Default hereunder shall be effective (except as provided in ss.8.7) and the
Agent may exercise all available remedies except that the maturity of the Loans
shall not be accelerated based solely on the Default which Borrower is
diligently attempting to cure hereunder, prior to the expiration of said ninety
(90) day period.
ss.13. SETOFF. Borrower hereby grants to each Lender, a continuing lien,
security interest and right of setoff as security for all liabilities and
obligations to such Lender hereunder, whether now existing or hereafter arising,
upon and against all deposits, credits, collateral and property, now or
hereafter in the possession, custody, safekeeping or control of such Lender or
in transit to it. At any time, without demand or notice (any such notice being
expressly waived by Borrower), any Lender may, WITH THE PRIOR APPROVAL OF THE
AGENT, setoff the same or any part thereof and apply the same to any liability
or obligation of Borrower hereunder even though unmatured and regardless of the
adequacy of any other collateral securing the Obligations. ANY AND ALL RIGHTS TO
REQUIRE ANY LENDER TO EXERCISE ITS RIGHTS OR REMEDIES WITH RESPECT TO ANY OTHER
COLLATERAL WHICH SECURES THE OBLIGATIONS, PRIOR TO EXERCISING ITS RIGHT OF
SETOFF WITH RESPECT TO SUCH DEPOSITS, CREDITS OR OTHER PROPERTY OF BORROWER, ARE
HEREBY KNOWINGLY, VOLUNTARILY AND IRREVOCABLY WAIVED. Each of the Lenders agrees
with each other Lender that (a) if an amount to be set off is to be applied to
Indebtedness of the Borrower to such Lender, other than Indebtedness evidenced
by the Notes held by such Lender, such amount shall be applied ratably to such
other Indebtedness and to the Indebtedness evidenced by all such Notes held by
such Lender, and (b) if such Lender shall receive from the Borrower, whether by
voluntary payment, exercise of the right of setoff, counterclaim, cross action,
enforcement of the claim evidenced by the Notes held by such Lender by
proceedings against the Borrower at law or in equity or by proof thereof in
bankruptcy, reorganization, liquidation, receivership or similar proceedings, or
otherwise, and shall retain and apply to the payment of the Note or Notes held
by such Lender any amount in excess of its ratable portion of the payments
received by all of the Lenders with respect to the Notes held by all of the
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Lenders, such Lender will make such disposition and arrangements with the other
Lenders with respect to such excess, either by way of distribution, pro tanto
assignment of claims, subrogation or otherwise as shall result in each Lender
receiving in respect of the Notes held by it its proportionate payment as
contemplated by this Agreement; provided that if all or any part of such excess
payment is thereafter recovered from such Lender, such disposition and
arrangements shall be rescinded and the amount restored to the extent of such
recovery, but without interest. Notwithstanding the foregoing, no Lender shall
exercise a right of setoff if such exercise would limit or prevent the exercise
of any other remedy, right to Collateral or other recourse against the Borrower.
ss.14. THE AGENT.
ss.14.1. Authorization. The Agent is authorized to take such action on
behalf of each of the Lenders and to exercise all such powers as are hereunder
and under any of the other Loan Documents and any related documents delegated to
the Agent, together with such powers as are reasonably incident thereto,
provided that no duties or responsibilities not expressly assumed herein or
therein shall be implied to have been assumed by the Agent. The relationship
between the Agent and the Lenders is and shall be that of agent and principal
only, and nothing contained in this Agreement or any of the other Loan Documents
shall be construed to constitute the Agent as a trustee for any Lender.
ss.14.2. Employees and Agents. The Agent may exercise its powers and
execute its duties by or through employees or agents and shall be entitled to
take, and to rely on, advice of counsel concerning all matters pertaining to its
rights and duties under this Agreement and the other Loan Documents. The Agent
may utilize the services of such Persons as the Agent in its sole discretion may
reasonably determine, and all reasonable fees and expenses of any such Persons
shall be paid by the Borrower.
ss.14.3. No Liability. Neither the Agent nor any of its shareholders,
directors, officers or employees nor any other Person assisting them in their
duties nor any agent or employee thereof, shall be liable for any waiver,
consent or approval given or any action taken, or omitted to be taken, in good
faith by it or them hereunder or under any of the other Loan Documents, or in
connection herewith or therewith, or be responsible for the consequences of any
oversight or error of judgment whatsoever, except that the Agent or such other
Person, as the case may be, may be liable for losses due to its willful
misconduct or gross negligence.
ss.14.4. No Representations. The Agent shall not be responsible for the
execution or validity or enforceability by or against Borrower or Guarantor of
this Agreement, the Notes, any of the other Loan Documents or any instrument at
any time constituting, or intended to constitute, collateral security for the
Notes, or for the value of any such collateral security or for the validity,
enforceability or collectability of any such amounts owing with respect to the
Notes, or for any recitals or statements, warranties or representations made
herein or in any of the other Loan Documents or in any certificate or instrument
hereafter furnished to it by or on behalf of the Borrower, or be bound to
ascertain or inquire as to the performance or observance of any of the terms,
conditions, covenants or agreements herein or in any instrument at any time
constituting, or intended to constitute, collateral security for the Notes. The
Agent shall not be bound to ascertain whether any notice, consent, waiver or
request delivered to it by the Borrower or any holder of any of the Notes shall
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have been duly authorized or is true, accurate and complete. The Agent has not
made nor does it now make any representations or warranties, express or implied,
nor does it assume any liability to the Lenders, with respect to the credit
worthiness or financial condition of the Borrower. Each Lender acknowledges that
it has, independently and without reliance upon the Agent or any other Lender,
and based upon such information and documents as it has deemed appropriate, made
its own credit analysis and decision to enter into this Agreement. Agent's
counsel has only represented Agent and FNB in connection with the Loan Documents
and the only attorney-client relationship or duty of care is between Agent's
counsel and Agent or FNB. Each Lender has been independently represented by
separate counsel on all matters regarding the Loan Documents and the granting
and perfecting of liens in the Collateral.
ss.14.5. Payments.
(a) A payment by the Borrower to the Agent hereunder or any of the
other Loan Documents for the account of any Lender (other than payments of
issuance and renewal fees to the Agent with respect to Letters of Credit) shall
constitute a payment to such Lender subject to the pro rata rights to repayment
based upon the Commitment Percentage of each Lender. The Agent agrees promptly
to distribute to each Lender such Lender's pro rata share of payments received
by the Agent for the account of the Lenders except as otherwise expressly
provided herein or in any of the other Loan Documents.
(b) If in the opinion of the Agent the distribution of any amount
received by it in such capacity hereunder, under the Notes or under any of the
other Loan Documents might involve it in liability, it may refrain from making
distribution until its right to make distribution shall have been adjudicated by
a court of competent jurisdiction. If a court of competent jurisdiction shall
adjudge that any amount received and distributed by the Agent is to be repaid,
each Person to whom any such distribution shall have been made shall either
repay to the Agent its proportionate share of the amount so adjudged to be
repaid or shall pay over the same in such manner and to such Persons as shall be
determined by such court.
(c) Notwithstanding anything to the contrary contained in this
Agreement or any of the other Loan Documents, any Lender that fails (i) to make
available to the Agent its pro rata share of any Loan or (ii) to comply with the
provisions of ss.12 and ss.13 with respect to making dispositions and
arrangements with the other Lenders, where such Lender's share of any payment
received, whether by setoff or otherwise, is in excess of its pro rata share of
such payments due and payable to all of the Lenders, in each case as, when and
to the full extent required by the provisions of this Agreement, or to adjust
promptly such Lender's outstanding principal and its pro rata Commitment
Percentage as provided in ss.2.1 hereof, shall be deemed delinquent (a
"Delinquent Lender") and shall be deemed a Delinquent Lender until such time as
such delinquency is satisfied. A Delinquent Lender shall be deemed to have
assigned any and all payments due to it from the Borrower, whether on account of
outstanding Loans, interest, fees or otherwise, to the remaining nondelinquent
Lenders for application to, and reduction of, their respective pro rata shares
of all outstanding Loans. The Delinquent Lender hereby authorizes the Agent to
distribute such payments to the nondelinquent Lenders in proportion to their
respective pro rata shares of all outstanding Loans. A Delinquent Lender shall
be deemed to have satisfied in full a delinquency when and if, as a result of
application of the assigned payments to all outstanding Loans of the
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nondelinquent Lenders, the Lenders respective pro rata shares of all outstanding
Loans have returned to those in effect immediately prior to such delinquency and
without giving effect to the nonpayment causing such delinquency.
ss.14.6. Holders of Notes. The Agent may deem and treat the payee of any
Note as the absolute owner or purchaser thereof for all purposes hereof until it
shall have been furnished in writing with a different name by such payee or by a
subsequent holder assignee or transferee.
ss.14.7. Indemnity. The Lenders ratably agree hereby to indemnify and hold
harmless the Agent from and against any and all claims, actions and suits
(whether groundless or otherwise), losses, damages, costs, expenses (including
any expenses for which the Agent has not been reimbursed by the Borrower as
required by ss.15), and liabilities of every nature and character arising out of
or related to this Agreement, the Notes, or any of the other Loan Documents or
the transactions contemplated or evidenced hereby or thereby, or the Agent's
actions taken hereunder or thereunder, except to the extent that any of the same
shall be directly caused by the Agent's willful misconduct or gross negligence.
ss.14.8. Agent as Lender. In its individual capacity, FNB shall have the
same obligations and the same rights, powers and privileges in respect to its
Commitment and the Loans made by it, and as the holder of any of the Notes as it
would have were it not also the Agent.
ss.14.9. Resignation and Removal. The Agent may resign at any time by
giving sixty (60) days, prior written notice thereof to the Lenders and the
Borrower. Upon any such resignation, the Majority Lenders shall have the right
to appoint a successor Agent. Unless a Default or Event of Default shall have
occurred and be continuing, appointment of such successor Agent shall be subject
to the reasonable approval of the Borrower. If no successor Agent shall have
been so appointed by the Majority Lenders and shall have accepted such
appointment within thirty (30) days after the giving of notice of resignation or
removal of the Borrower has disapproved or failed to approve a successor agent
within such period, then the retiring Agent may, on behalf of the Lenders,
appoint a successor Agent, which shall be a financial institution having a
rating of not less than A2/P2 or its equivalent by Standard & Poor's
Corporation. Upon the acceptance of any appointment as Agent hereunder by a
successor Agent, such successor Agent shall thereupon succeed to and become
vested with all the rights, powers, privileges and duties of the retiring Agent,
and the retiring Agent shall be discharged from its duties and obligations
hereunder. Such successor Agent shall issue replacement Letters of Credit and
any outstanding Letters of Credit issued by the retiring Agent shall be canceled
and returned to it. After any retiring Agent's resignation, the provisions of
this Agreement and the other Loan Documents shall continue in effect for its
benefit in respect of any actions taken or omitted to be taken by it while it
was acting as Agent.
ss.14.10. Notification of Defaults and Events of Default. Each Lender
hereby agrees that, upon learning of the existence of a Default or an Event of
Default, it shall promptly notify the Agent thereof. The Agent hereby agrees
that upon receipt of any notice under this ss.14.10 it shall promptly notify the
other Lenders of the existence of such Default or Event of Default.
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ss.14.11. Duties in the Case of Enforcement. In case one of more Events of
Default have occurred and shall be continuing, and whether or not acceleration
of the obligations shall have occurred, the Agent shall, if (a) so requested by
the Majority Lenders and (b) the Lenders have provided to the Agent such
additional indemnities and assurances against expenses and liabilities as the
Agent may reasonably request, proceed to enforce the provisions of the Security
Documents authorizing the sale or other disposition of all or any part of the
Collateral and exercise all or any such other legal and equitable and other
rights or remedies as it may have in respect of such Collateral. The Majority
Lenders may direct the Agent in writing as to the method and the extent of any
such sale or other disposition, the Lenders hereby agreeing to indemnify and
hold the Agent harmless from all liabilities incurred in respect of all actions
taken or omitted in accordance with such directions, provided that the Agent
need not comply with any such direction to the extent that the Agent reasonably
believes the Agent's compliance with such direction to be unlawful or
commercially unreasonable in any applicable jurisdiction. The Agent may take
such steps as it reasonably determines for the taking of possession or title to
any Collateral, including the formation of trusts, limited liability companies
or corporations with each Lender having a beneficial interest equal to its pro
rata percentage of the outstanding Loans.
ss.15. EXPENSES. The Borrower agrees to pay (a) any taxes (including any
interest and penalties in respect thereto) payable by the Agent or any of the
Lenders (other than taxes based upon the Agent's or any Lender's net income),
including any recording, mortgage, documentary or intangibles taxes in
connection with the Security Documents and other Loan Documents, or other taxes
payable on or with respect to the transactions contemplated by this Agreement,
including any taxes payable by the Agent or any of the Lenders after the
Effective Date (the Borrower hereby agreeing to indemnify the Lenders with
respect thereto), (b) all title insurance premiums, appraisal fees, engineer's,
inspector's and surveyor's fees, recording costs and the reasonable fees,
expenses and disbursements of the Agent's counsel or any local counsel to the
Agent incurred in connection with the preparation, administration or
interpretation of the Loan Documents and other instruments mentioned herein,
each closing hereunder, and amendments, modifications, approvals, consents or
waivers hereto or hereunder, (c) the reasonable fees, costs, expenses and
disbursements of the Agent incurred in connection with the preparation,
administration or interpretation of the Loan Documents and other instruments
mentioned herein including without limitation, the costs incurred by the Agent
in connection with its inspection of the Mortgaged Properties, (d) the fees,
costs, expenses and disbursements of the Agent incurred in connection with the
syndication and/or participation of the Loans in the event that Borrower shall
request an increase in the Total Commitment, (e) all reasonable out-of-pocket
expenses (including reasonable attorneys' fees and costs, which attorneys may be
employees of any Lender or the Agent and the fees and costs of appraisers,
engineers, investment bankers, surveyors or other experts retained by the Agent
or any Lender in connection with any such enforcement proceedings) incurred by
any Lender or the Agent in connection with (i) the enforcement of or
preservation of rights under any of the Loan Documents against the Borrower or
the administration thereof after the occurrence of a Default or Event of Default
(including, without limitation, expenses incurred in any restructuring and/or
"workout" of the Loans), and (ii) any litigation, proceeding or dispute whether
arising hereunder or otherwise, in any way related to the Agent's or the
Lender's relationship with the Borrower, any Controlled Unconsolidated Entity or
any of the Related Companies, (f) all reasonable fees, expenses and
disbursements of the Agent incurred in connection with UCC searches, UCC filings
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or mortgage recordings, (g) all reasonable costs incurred by the Agent in the
future in connection with its inspection of the Mortgaged Properties, and (h)
the reasonable fees, costs, expenses and disbursements of the Agent incurred in
connection with the granting of additional Collateral by the Borrower pursuant
to ss.5.3 or ss.12.5 hereof, including, without limitation, the costs incurred
by the Agent in connection with its inspection of such additional Collateral,
and the fees and disbursements of the Agent's counsel. The covenants of this
ss.15 shall survive payment or satisfaction of payment of amounts owing with
respect to the Notes.
ss.16. INDEMNIFICATION. The Borrower agrees to indemnify and hold harmless the
Agent and the Lenders and the shareholders, directors, agents, officers,
subsidiaries, and affiliates of the Agent and the Lenders from and against any
and all claims, actions or causes of action and suits whether groundless or
otherwise, and from and against any and all Liabilities, losses, settlement
payments, obligations, damages and expenses of every nature and character
arising out of this Agreement or any of the other Loan Documents or the
transactions contemplated hereby or which otherwise arise in connection with the
financing including, without limitation except to the extent caused by the gross
negligence or willful misconduct of a Lender or the Agent (but such limitation
on indemnification shall only apply to the Agent or Lender that is being grossly
negligent or committing willful misconduct), (a) any actual or proposed use by
the Borrower of the proceeds of any of the Loans, (b) any actual or alleged
infringement of any patent, copyright, trademark, service xxxx or similar right
of the Borrower comprised in the Collateral, (c) the Borrower entering into or
performing this Agreement or any of the other Loan Documents or (d) with respect
to the Borrower and its respective properties, the violation of any
Environmental Law, the Release or threatened Release of any Hazardous Substances
or any action, suit, proceeding or investigation brought or threatened with
respect to any Hazardous Substances (including, but not limited to claims with
respect to wrongful death, personal injury or damage to property), (e) any cost,
claim liability, damage or expense in connection with any harm the Borrower may
be found to have caused in the role of a broker, in each case including, without
limitation, the reasonable fees and disbursements of counsel and allocated costs
of internal counsel incurred in connection with any such investigation,
litigation or other proceeding. In litigation, or the preparation therefor, the
Lenders and the Agent shall each be entitled to select their own separate
counsel and, in addition to the foregoing indemnity, the Borrower agrees to pay
promptly the reasonable fees and expenses of such counsel. If, and to the extent
that the obligations of the Borrower under this ss.16 are unenforceable for any
reason, the Borrower hereby agrees to make the maximum contribution to the
payment in satisfaction of such obligations which is permissible under
applicable law. The provisions of this ss.16 shall survive the repayment of the
Loans and the termination of the obligations of the Lenders hereunder and shall
continue in full force and effect as to the Lenders so long as the possibility
of any such claim, action, cause of action or suit exists under applicable law,
rule or regulation.
ss.17. SURVIVAL OF COVENANTS, ETC. All covenants, agreements, representations
and warranties made herein, in the Notes, in any of the other Loan Documents or
in any documents or other papers delivered by or on behalf of the Borrower
pursuant hereto shall be deemed to have been relied upon by the Lenders and the
Agent, notwithstanding any investigation heretofore or hereafter made by it, and
shall survive the making by the Lenders of the Loans, as herein contemplated,
and shall continue in full force and effect so long as any amount due under this
Agreement or the Notes or any of the other Loan Documents remains outstanding or
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the Lenders have any obligation to make any Loans. The indemnification
obligations of the Borrower provided herein and the other Loan Documents shall
survive the full repayment of amounts due and the termination of the obligations
of the Lenders hereunder and thereunder to the extent provided herein and
therein. All statements contained in any certificate delivered to the Agent or
any Lender at any time executed on behalf of the Borrower or a Guarantor
pursuant hereto or in connection with the transactions contemplated hereby shall
constitute representations and warranties by the Borrower hereunder.
ss.18. ASSIGNMENT; PARTICIPATIONS; ETC.
ss.18.1. Conditions to Assignment by Lenders. Except as provided herein,
each Lender may assign to one or more Eligible Assignees all or a portion of its
interests, rights and obligations under this Agreement (including all or a
portion of its Commitment Percentage and Commitment and the same portion of the
Loans at the time owing to it, and the Notes held by it); provided that (a) the
Agent shall have given its prior written consent to such assignment except that
such consent shall not be needed with respect to an assignment from a Lender to
one of its Affiliated Lenders, (b) each such assignment shall be of a constant,
and not a varying, percentage of all the assigning Lender's rights and
obligations under this Agreement, (c) each assignment shall be in an amount of
not less than $5,000,000 that is a whole multiple of $1,000,000, (d) each Lender
shall either assign its entire Commitment or shall retain, free of any such
assignment, an amount of its Commitment of not less $5,000,000 and (e) the
parties to such assignment shall execute and deliver to the Agent, for recording
in the Register (as hereinafter defined), an Assignment and Acceptance,
substantially in the form of Exhibit D hereto (an "Assignment and Acceptance") ,
together with any Notes subject to such assignment. Upon such execution,
delivery, acceptance and recording, from and after the effective date specified
in each Assignment and Acceptance, which effective date shall be at least five
(5) Business Days after the execution thereof, (i) the assignee thereunder shall
be a party hereto and, to the extent provided in such Assignment and Acceptance,
have the rights and obligations of a Lender hereunder, and (ii) the assigning
Lender shall, to the extent provided in such assignment and upon payment to the
Agent of the registration fee referred to in ss.18.3, be released from its
obligations under this Agreement.
ss.18.2. Certain Representations and Warranties; Limitations; Covenants. By
executing and delivering an Assignment and Acceptance, the parties to the
assignment thereunder confirm to and agree with each other and the other parties
hereto as follows: (a) other than the representation and warranty that it is the
legal and beneficial owner of the interest being assigned thereby free and clear
of any adverse claim, the 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 the execution,
legality, validity, enforceability, genuineness, sufficiency or value of this
Agreement, the other Loan Documents or any other instrument or document
furnished pursuant hereto; (b) the assigning Lender makes no representation or
warranty and assumes no responsibility with respect to the financial condition
of the Borrower or any other Person primarily or secondarily liable in respect
of any of the Obligations, or the performance or observance by the Borrower or
any other Person primarily or secondarily liable in respect of any of the
obligations of any of their obligations under this Agreement or any of the other
Loan Documents or any other instrument or document furnished pursuant hereto or
thereto or the validity or enforceability or priority of any lien or any
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Collateral; (c) such assignee confirms that it has received a copy of this
Agreement, together with copies of the most recent financial statements referred
to in ss.6.4 and ss.7.4 and such other documents and information as it has
deemed appropriate to make its own credit analysis and decision to enter into
such Assignment and Acceptance; (d) such assignee will, independently and
without reliance upon the assigning Lender, the Agent or any other Lender and
based on such documents and information as it shall deem appropriate at the
time, continue to make its own credit and Collateral decisions in taking or not
taking action under this Agreement, (e) such assignee represents and warrants
that it is an Eligible Assignee; (f) such assignee appoints and authorizes the
Agent to take such action as "Agent" on its behalf and to exercise such powers
under this Agreement and the other Loan Documents as are delegated to the Agent
by the terms hereof or thereof, together with such powers as are reasonably
incidental thereto; (g) such assignee agrees that it will perform in accordance
with their terms all of the obligations that by the terms of this Agreement are
required to be performed by it as a Lender; and (h) such assignee represents and
warrants that it is legally authorized to enter into such Assignment and
Acceptance.
ss.18.3. Register. The Agent shall maintain a copy of each Assignment and
Acceptance delivered to it and a register or similar list (the "Register") for
the recordation of the names and addresses of the Lenders and the Commitment
Percentages of, and principal amount of the Loans owing to the Lenders from time
to time. The entries in the Register shall be conclusive, in the absence of
manifest error, and the Borrower, the Agent and the Lenders may treat each
Person whose name is recorded in the Register as a Lender hereunder for all
purposes of this Agreement. The Register shall be available for inspection by
the Borrower and the Lenders at any reasonable time and from time to time upon
reasonable prior notice. Upon each such recordation, the assigning Lender agrees
to pay to the Agent a registration fee in the sum of $3,000.00. The Agent may
amend Schedules 1 and 1.2 hereof to reflect the recording of any such
assignments.
ss.18.4. New Notes. Upon its receipt of an Assignment and Acceptance
executed by the parties to such assignment, together with each Note subject to
such assignment, the Agent shall (a) record the information contained therein in
the Register, and (b) give prompt notice thereof to the Borrower and the Lenders
(other than the assigning Lender). Within five (5) Business Days after receipt
of such notice, the Borrower, at its own expense, shall execute and deliver to
the Agent, in exchange for each surrendered Note, a new Note to the order of
such Eligible Assignee in an amount equal to the amount assumed by such Eligible
Assignee pursuant to such Assignment and Acceptance and, if the assigning Lender
has retained some portion of its Loans hereunder, a new Note to the order of the
assigning Lender in an amount equal to the amount retained by it hereunder. Such
new Notes shall provide that they are replacements for the surrendered Notes and
that they do not constitute a novation, shall be in an aggregate principal
amount equal to the aggregate principal amount of the surrendered Notes, shall
be dated the effective date of such Assignment and Acceptance and shall
otherwise be in substantially the form of the assigned Notes. Within five (5)
days of issuance of any new Notes pursuant to this ss.18.4, the Borrower shall
deliver an opinion of counsel, addressed to the Lenders and the Agent, relating
to the due authorization, execution and delivery of such new Notes and the
legality, validity and binding non-preferential effect thereof, and that the
Obligations evidenced by the new Notes are secured by the Collateral with the
same validity, enforceability and priority as if given on the Effective Date, in
form and substance satisfactory to the Lenders. The surrendered Notes shall be
cancelled and returned to the Borrower.
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ss.18.5. Participations. Each Lender may sell participations to one or more
banks or other entities in a portion of such Lender's rights and obligations
under this Agreement and the other Loan Documents not to exceed forty-nine
percent (49%) of its Commitment Percentage; provided that (a) the Agent shall
have given its prior written consent to such participation, except that any
Lender may sell participations to its Affiliated Lenders without such consent,
(b) each such participation shall be in an amount of not less than $5,000,000
that is a whole multiple of $1,000,000, (c) any such sale or participation shall
not affect the rights and duties of the selling Lender hereunder to the Borrower
and the Lender shall continue to exercise all approvals, disapprovals and other
functions of a Lender, (d) the only rights granted to the participant pursuant
to such participation arrangements with respect to waivers, amendments or
modifications of the Loan Documents shall be the rights to approve the vote of
the Lender as to waivers, amendments or modifications that would reduce the
principal of or the interest rate on any Loans, extend the term or increase the
amount of the Commitment of such Lender as it relates to such participant,
reduce the amount of any fees to which such participant is entitled or extend
any regularly scheduled payment date for principal or interest, provided that
all approvals affecting a Loan or this Agreement under this clause (d) shall be
by a fifty-one percent (51%) vote of such Lender's Commitment Percentage, and
(e) no participant shall have the right to grant further participations or
assign its rights, obligations or interests under such participation to other
Persons without the prior written consent of the Agent.
ss.18.6. Pledge by Lender. Any Lender may at any time pledge or assign all
or any portion of its interest and rights under this Agreement (including all or
any portion of its Note) to any of the twelve Federal Reserve Banks organized
under Section 4 of the Federal Reserve Act, 12 U.S.C. ss.341. No such pledge or
the enforcement thereof shall release the pledgor Lender from its obligations
hereunder or under any of the other Loan Documents.
ss.18.7. No Assignment by Borrower. The Borrower shall not assign or
transfer any of its rights or obligations under any of the Loan Documents
without the prior written consent of each of the Lenders.
ss.18.8. Disclosure. The Borrower agrees that in addition to disclosures
made in accordance with standard banking practices any Lender may disclose
information obtained by such Lender pursuant to this Agreement to assignees or
participants and potential assignees or participants hereunder.
ss.19. NOTICES, ETC. Except as otherwise expressly provided in this Agreement,
all notices and other communications made or required to be given pursuant to
this Agreement or the Notes shall be in writing and shall be delivered in hand,
mailed by United States registered or certified first class mail, postage
prepaid, sent by overnight courier, or sent by telegraph, telecopy, telefax or
telex and confirmed by delivery via courier or postal service, addressed as
follows:
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(a) if to the Borrower, at 0000 X. Xxxxxxxx Xxxxxx, Xxxxx 000, Xxxxxx,
XX 00000 Attention: Chief Financial Officer Telefax No. 000-000-0000 or at such
other address for notice as the Borrower shall last have furnished in writing to
the Agent; and
(b) if to the Agent, at 000 Xxxxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx
00000, Attention: Structured Real Estate, and to 000 Xxxxxxxxx Xxxxxx Xxxxx,
X.X., Xxxxx 000, Xxxxxxx, Xxxxxxx 00000, Attn: Xxxx X. Xxxxx, Director, Telefax
No. 000-000-0000 or such other address for notice as the Agent shall last have
furnished in writing to the Borrower.
(c) if to any Lender, at such Lender's address set forth on such
Lender's signature page, or such other address for notice as such Lender shall
have last furnished in writing to the Person giving the notice.
Any such notice or demand shall be deemed to have been duly given or made
and to have become effective (i) if delivered by hand, overnight courier or
facsimile to a responsible officer of the party to which it is directed, at the
time of the receipt thereof by such officer or the sending of such facsimile (as
evidenced by confirmation of successful transmission) and (ii) if sent by
registered or certified first-class mail, postage prepaid, on the third Business
Day following the mailing thereof.
ss.20. GOVERNING LAW; CONSENT TO JURISDICTION AND SERVICE. This agreement and
each of the other Loan Documents, except as otherwise specifically provided
therein, and the rights and obligations of the parties hereunder shall be
construed and interpreted in accordance with the laws of the Commonwealth Of
Massachusetts (excluding the laws applicable to conflicts or choice of law).
BORROWER AGREES THAT ANY SUIT BY IT FOR THE ENFORCEMENT OF THIS AGREEMENT OR ANY
OF THE OTHER LOAN DOCUMENTS MAY BE BROUGHT ONLY IN THE COURTS OF THE
COMMONWEALTH OF MASSACHUSETTS OR ANY FEDERAL COURT SITTING THEREIN AND BORROWER
CONSENTS TO THE NONEXCLUSIVE JURISDICTION OF SUCH COURT FOR ANY SUIT BY AGENT OR
ANY LENDER AND THE SERVICE OF PROCESS IN ANY SUCH SUIT BEING MADE UPON THE
BORROWER BY MAIL AT THE ADDRESS SPECIFIED IN ss.19. BORROWER HEREBY WAIVES ANY
OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE VENUE OF ANY SUCH SUIT OR ANY
SUCH COURT OR THAT SUCH SUIT IS BROUGHT IN AN INCONVENIENT FORUM. IN ADDITION TO
THE COURTS OF THE COMMONWEALTH OR ANY FEDERAL COURT SITTING THEREIN, THE AGENT
OR ANY LENDER MAY BRING ACTION(S) FOR ENFORCEMENT ON A NONEXCLUSIVE BASIS WHERE
ANY COLLATERAL EXISTS AND THE BORROWER CONSENTS TO THE NON-EXCLUSIVE
JURISDICTION OF SUCH COURTS AND THE SERVICE OF PROCESS IN ANY SUCH SUIT BEING
MADE UPON THE BORROWER BY MAIL AT THE ADDRESS SPECIFIED IN ss.19.
ss.21. HEADINGS. The captions in this Agreement are for convenience of reference
only and shall not define or limit the provisions hereof.
ss.22. COUNTERPARTS. This Agreement and any amendment hereof may be executed in
several counterparts and by each party on a separate counterpart, each of which
when so executed and delivered shall be an original, and all of which together
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shall constitute one instrument. In proving this Agreement it shall not be
necessary to produce or account for more than one such counterpart signed by the
party against whom enforcement is sought.
ss.23. ENTIRE AGREEMENT. This Agreement and the Loan Documents is intended by
the parties as the final, complete and exclusive statement of the transactions
evidenced by this Agreement and the Loan Documents. All prior or contemporaneous
promises, agreements and understandings, whether oral or written, are deemed to
be superceded by this Agreement and the Loan Documents, and no party is relying
on any promise, agreement or understanding not set forth in this Agreement and
the Loan Documents. Neither this Agreement nor any term hereof may be changed,
waived, discharged or terminated, except as provided in ss.25.
ss.24. WAIVER OF JURY TRIAL AND CERTAIN DAMAGE CLAIMS. THE BORROWER, THE AGENT
AND EACH LENDER HEREBY MUTUALLY HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY
WAIVE THE RIGHT TO A TRIAL BY JURY IN RESPECT OF ANY CLAIM BASED HEREON, ARISING
OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT OR ANY OTHER LOAN DOCUMENTS
CONTEMPLATED TO BE EXECUTED IN CONNECTION HEREWITH OR ANY COURSE OF CONDUCT,
COURSE OF DEALINGS, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF ANY
PARTY, INCLUDING, WITHOUT LIMITATION, ANY COURSE OF CONDUCT, COURSE OF DEALINGS,
STATEMENTS OR ACTIONS OF BANK RELATING TO THE ADMINISTRATION OF THE LOANS OR
ENFORCEMENT OF THE LOAN DOCUMENTS, AND AGREE THAT NO PARTY WILL SEEK TO
CONSOLIDATE ANY SUCH ACTION WITH ANY OTHER ACTION IN WHICH A JURY TRIAL CANNOT
BE OR HAS NOT BEEN WAIVED. EXCEPT AS PROHIBITED BY LAW, BORROWER HEREBY WAIVES
ANY RIGHT IT MAY HAVE TO CLAIM OR RECOVER IN ANY LITIGATION ANY SPECIAL,
EXEMPLARY, PUNITIVE OR CONSEQUENTIAL DAMAGES OR ANY DAMAGES OTHER THAN, OR IN
ADDITION TO, ACTUAL DAMAGES. BORROWER CERTIFIES THAT NO REPRESENTATIVE, AGENT OR
ATTORNEY OF AGENT OR ANY LENDER HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT
AGENT OR ANY LENDER WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE
FOREGOING WAIVER. THIS WAIVER CONSTITUTES A MATERIAL INDUCEMENT FOR LENDERS TO
PROVIDE THE COMMITMENTS AND MAKE THE LOANS.
ss.25. CONSENTS, AMENDMENTS, WAIVERS, ETC. Any consent or approval required or
permitted by this Agreement may be given, and any term of this Agreement or of
any other instrument related hereto or mentioned herein may be amended, and the
performance or observance by the Borrower of any terms of this Agreement or such
other instrument or the continuance of any Default or Event of Default may be
waived (either generally or in a particular instance and either retroactively or
prospectively) with, but only with, the written consent of the Majority Lenders,
and, in the case of amendments, with the written consent of the Borrower other
than amendments to schedules made in the ordinary course as contemplated by this
Agreement, provided, however, that any waiver of an Event of Default under
ss.12.1(a) or ss.12.1(b) or any modifications or waivers of the financial
covenants set forth in ss.9.1, ss.9.2 or ss.9.3 or any waiver of an Event of
Default relating to the Borrower's failure to comply with such financial
covenants shall require the written consent of all Lenders. Notwithstanding the
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foregoing, (i) the rate of interest on and the term or amount of the Notes, (ii)
the amount of the Commitments of the Lenders(other than changes in Commitments
pursuant to Assignments under ss.18 or pursuant to changes in the Total
Commitment under ss.2.2), (iii) the amount of any fee payable to a Lender
hereunder, (iv) any provision herein or in any of the Loan Documents which
expressly requires consent of all the Lenders, (v) the funding provisions of
ss.2.5 and ss.2.7 hereof, (vi) the Maturity Date and (vii) the rights, duties
and obligations of the Agent specified in ss.14 hereof, may not be amended
without the written consent of each Lender affected thereby, nor may the Agent
release any Collateral or add any Collateral, including pursuant to ss.12.5
hereof, without first obtaining the written consent of all the Lenders. No
waiver shall extend to or affect any obligation not expressly waived or impair
any right consequent thereon. No course of dealing or delay or omission on the
part of the Agent or any Lender in exercising any right shall operate as a
waiver thereof or otherwise be prejudicial thereto. No notice to or demand upon
the Borrower shall entitle the Borrower to other or further notice or demand in
similar or other circumstances.
ss.26. SEVERABILITY. The provisions of this Agreement are severable, and if any
one clause or provision hereof shall be held invalid or unenforceable in whole
or in part in any jurisdiction, then such invalidity or unenforceability shall
affect only such clause or provision, or part thereof, in such jurisdiction, and
shall not in any manner affect such clause or provision in any other
jurisdiction, or any other clause or provision of this Agreement in any
jurisdiction.
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IN WITNESS WHEREOF, the undersigned have duly executed this Agreement as a
sealed instrument as of the date first set forth above.
BORROWER:
AMERIVEST PROPERTIES INC., a
Maryland corporation
By: /s/ Xxxx X. Xxxxxxxx
--------------------------------
Name: Xxxx X. Xxxxxxxx
Title: Vice President
AGENT:
FLEET NATIONAL BANK, as Agent
By: /s/ Xxxx X. Xxxxx
--------------------------------
Name: Xxxx X. Xxxxx
Title: Director
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Lender Signature Page
FLEET NATIONAL BANK
By: /s/ Xxxx X. Xxxxx
--------------------------------
Name: Xxxx X. Xxxxx
Title: Director
Commitment: $30,000,000
Commitment Percentage: 100%
Notice Address: Fleet National Bank
000 Xxxxxxx Xxxxxx
Xxxxxx, XX 00000
Attn: Structured Real Estate
With a copy to:
Fleet National Bank.
000 Xxxxxxxxx Xxxxxx Xxxxx, X.X.
Xxxxx 000
Xxxxxxx, XX 00000
Attn: Xxxx X. Xxxxx, Director
Fax: (000)000-0000 or 000-0000
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Exhibit A
---------
FORM OF REVOLVING CREDIT NOTE
-----------------------------
No. ___ [Date]
[Amount]
FOR VALUE RECEIVED, the undersigned, AMERIVEST PROPERTIES INC., a Maryland
corporation (the "Borrower"), promises to pay, without offset or counterclaim,
to the order of [Name of Lender] (hereinafter, together with its successors in
title and assigns, called the "Lender") at the head office of Fleet National
Bank, as Agent (the "Agent") at 000 Xxxxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000,
the principal sum of [Amount in Words][Amount in Numbers] or, if less, the
aggregate unpaid principal amount of all Loans made by the Lender to the
Borrower pursuant to the Revolving Credit Agreement dated as of November 12,
2002 among the Lender, the Borrower, the other lending institutions named
therein and the Agent, as amended from time to time (the "Credit Agreement").
Capitalized terms used herein and not otherwise defined herein shall have the
meanings assigned to them in the Credit Agreement. Unless otherwise provided
herein, the rules of interpretation set forth in ss.1.2 of the Credit Agreement
shall be applicable to this Note.
The Borrower also promises to pay (a) principal from time to time at the
times provided in the Credit Agreement and (b) interest from the date hereof on
the principal amount from time to time unpaid at the rates and times set forth
in the Credit Agreement and in all cases in accordance with the terms of the
Credit Agreement. Late charges and other charges and default rate interest shall
be paid by Borrower in accordance with the terms of the Credit Agreement. The
entire outstanding principal amount of this Note, together with all accrued but
unpaid interest thereon, shall be due and payable in full on the Maturity Date.
The Lender may endorse the record relating to this Note with appropriate
notations evidencing advances and payments of principal hereunder as
contemplated by the Credit Agreement.
This Note is issued pursuant to, is entitled to the benefits of, and is
subject to the provisions of the Credit Agreement. The principal of this Note is
subject to prepayment in whole or in part in the manner and to the extent
specified in the Credit Agreement. The principal of this Note, the interest
accrued on this Note and all other Obligations of the Borrower are full recourse
obligations of the Borrower, and all of its Real Estate Assets, and its other
properties shall be available for the payment and performance of this Note, the
interest accrued on this Note, and all of such other Obligations. In case an
Event of Default shall occur and be continuing, the entire unpaid principal
amount of this Note and all of the unpaid interest accrued thereon may become or
be declared due and payable in the manner and with the effect provided in the
Credit Agreement.
The Borrower and all endorsers hereby waive presentment, demand, protest
and notice of any kind in connection with the delivery, acceptance, performance
and enforcement of this Note, and also hereby assent to extensions of time of
payment or forbearance or other indulgences without notice.
This Note and the obligations of the Borrower hereunder shall be governed
by and interpreted and determined in accordance with the laws of the
Commonwealth of Massachusetts (excluding the laws applicable to conflicts or
choice of law). The Borrower has waived its right to a jury trial with respect
to any action or claim arising out of this Note pursuant to ss.24 of the Credit
Agreement.
IN WITNESS WHEREOF, the Borrower has caused this Note to be duly executed
in its name as an instrument under seal on the date first above written.
WITNESS: AMERIVEST PROPERTIES INC.
_____________________________________ By:________________________________
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Exhibit B
LOAN REQUEST
------------
[Date]
Fleet National Bank, as Agent
000 Xxxxxxx Xxxxxx
Xxxxxx, XX 00000
Re: Loan Request under Revolving Credit Agreement dated as of November 12, 2002
----------------------------------------------------------------------------
Ladies and Gentlemen:
Pursuant to ss.2.5 of the Revolving Credit Agreement dated as of November
12, 2002, among you, certain other Lenders and us (the "Credit Agreement"), we
hereby request that the Lenders make a Loan as follows:
(i) Principal amount requested: $
(ii) Proposed Borrowing Date:
(iii) Interest Period:
(iv) Type:
This Loan Request is submitted pursuant to, and shall be governed by, and
subject to satisfaction of, the terms, conditions and provisions set forth in
ss.2.5 of the Credit Agreement.
The undersigned hereby further certifies to you that it is in compliance
with the covenants specified in ss.9.1 through ss.9.6 of the Credit Agreement,
and will remain in compliance with such covenants after the making of the
requested Loan, as evidenced by a Compliance Certificate in the form of Exhibit
C to the Credit Agreement of even date herewith delivered to you simultaneously
with this Loan Request.
We also understand that this request obligates us to accept the requested
Loan on such date. All terms defined in the Credit Agreement and used herein
without definition shall have the meanings set forth in ss.1.1 of the Credit
Agreement.
The undersigned hereby certifies to you, in accordance with the provisions
of ss.11.1 of the Credit Agreement, that the representations and warranties
contained in the Credit Agreement and in each document and instrument delivered
pursuant to or in connection therewith were true in all material respects as of
the date as of which they were made, are also true in all material respects at
and as of the date hereof, and will also be true in all material respects at and
as of the proposed Borrowing Date of the Loan requested hereby, in each case
except as otherwise permitted pursuant to the provisions of ss.11.1 of the
Credit Agreement, and no Default or Event of Default has occurred and is
continuing.
Very truly yours,
AMERIVEST PROPERTIES INC.
By:_______________________________
_______________________________
Its:______________________________
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Exhibit C
---------
Compliance Certificate under
Revolving Credit Agreement dated as of November 12, 2002
The undersigned, a Responsible Officer of AMERIVEST PROPERTIES INC. (the
"Borrower"), hereby certifies on behalf of the Borrower as of the date hereof
the following:
1. No Defaults. I have read a copy of the Revolving Credit Agreement dated
as of November , 2002 (the "Credit Agreement") among the Borrower, Fleet
National Bank, the other lending institutions party thereto, and Fleet National
Bank, as Agent. Terms used herein and not otherwise defined herein shall have
the meanings set forth in ss.1.1 of the Credit Agreement. No Event of Default is
continuing in the performance or observance of any of the covenants, terms or
provisions of the Credit Agreement or any of the other Loan Documents. Without
limiting the foregoing, the Borrower has not taken any actions which are
prohibited by the negative covenants set forth in ss.8 of the Credit Agreement.
Attached hereto as Appendix I are all relevant calculations needed to determine
whether the Borrower is in compliance with ss.9.1 through ss.9.6, inclusive, and
ss.8.3(d) of the Credit Agreement as of the end of the most recently completed
fiscal quarter (except that in the case of Compliance Certificates delivered
pursuant to ss.2.5, ss.2.8(a), ss.5.5, ss.8.1(f), ss.8.4(c), or ss.11.1, the
calculations determining compliance with ss.9.1 through ss.9.3 have been
computed on a pro forma basis after giving effect to the proposed transaction)
and is in compliance with ss.8.7 of the Credit Agreement for the most recently
completed fiscal year.
2. No Material Changes, Etc. Except as disclosed on Appendix II hereto,
since the [date of most recent financial statements furnished to the Agent and
the Lenders], there have occurred no materially adverse changes in the financial
condition or business of the Borrower as shown on or reflected in the balance
sheet of the Borrower as at such date other than (a) changes in the ordinary
course of business that have not had any materially adverse effect either
individually or in the aggregate on the business or financial condition of the
Borrower and (b) changes resulting from the making of the Loans and the
transactions contemplated by the Credit Agreement.
3. No Materially Adverse Contracts, Etc. The Borrower is not subject to any
charter, corporate, or other legal restriction, or any judgment, decree, order,
rule or regulation that has or is expected, in the reasonable judgment of the
Borrower 's officers, in the future to have a materially adverse effect on the
Borrower or the Collateral. The Borrower is not a party to any contract or
agreement that has or is expected, in the reasonable judgment of the Borrower 's
officers, to have a materially adverse effect on the Borrower or the Collateral.
Date:
AMERIVEST PROPERTIES INC.
By:_______________________________
_______________________________
Its:______________________________
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AMERIVEST PROPERTIES
APPENDIX I TO COVENANT COMPLIANCE CERTIFICATE
based on QE ____________________
CORPORATE COVENANTS
(1) Corporate Leverage (Paragraph 9.3 in Revolving Credit Agreement)
a. Total Assets on Balance Sheet
-------------
b. Real Estate Depreciation
-------------
x. XXXXX ASSET VALUE (a+b)
-------------
d. Total Liabilities on Balance Sheet
-------------
e. Contingent Liabilities not already on B.S.
-------------
f. Borrower's % of unconsolidated entity liabilities
-------------
g. TOTAL LIABILITIES as defined (d + e + f)
-------------
TOTAL LIABILITIES TO GAV: %
-------------
(cannot exceed 70%)
(2) Corporate Interest Coverage (Paragraph 9.4 in Revolving Credit Agreement)
a. EBITDA (last 4 Quarters)
-------------
b. Company S.F.
-------------
c. Reserve Amount PSF $ 0.25
-------------
d. Total Reserve (bxc) $ -
-------------
e. Adjusted EBITDA (a-d) $ -
-------------
f. Interest Expense
-------------
g. Capitalized Interest
-------------
h. Total Interest Exp. (g+h)
-------------
i. Adj. EBITDA to Int.Exp. (e/h)
-------------
(cannot be less than 1.75x)
(3) Corporate Fixed Charge Coverage (Paragraph 9.5 in Revolving Credit
Agreement)
a. EBITDA last 4 Qtrs ( = 2a.)
-------------
b. Interest Expense ( = 2h.)
-------------
c. principal payments
-------------
d. preferred dividends
-------------
e. Fixed Charges (b + c + d)
-------------
f. EBITDA/Fixed Charges (a/e)
-------------
(cannot be less than 1.5x)
-77-
(4) Minimum Tangible Net Worth (Paragraph 9.6 in Revolving Credit Agreement)
a. GAV (= 1c.)
----------------
b. Intangible Assets
----------------
c. Total Liabilities (= 1d.)
----------------
d. Net Worth (a-b-c)
----------------
e. Net Offering Proceeds after closing
----------------
f. multiplied by 75% 75%
----------------
g. e x f -
----------------
h. Net OP Proceeds after closing
----------------
i. multiplied by 100% 100%
----------------
j. h x j -
----------------
k. Tangible Net Worth (d+g+j) -
----------------
(cannot be less than $25mm + 75% of Net Offering Proceeds
and 100% of OP Proceeds raised after closing)
BORROWING BASE COVENANTS
(5) Borrowing Base Value/Advance Rate (paragraph 9.1 of Revolving Credit
Agreement)
Property 1 Property 2 TOTAL
a. Appraised Value of Mortgaged Properties
--------------------------------
b. multiplied by 70% 70%
--------------------------------
c. Availability based on Appraised Value - - -
------------------------------------------
d. Cost of Mortgaged Properties
--------------------------------
e. multiplied by 70% 70%
--------------------------------
f. Availability based on Cost -
------------------------------------------
ADVANCE RATE (the lessor of 5c. or 5f.)
(6) Minimum Debt Service Coverage (Paragraph 9.2 of Revolving Credit Agreement)
a. NOI of mortgaged properties last 6 mths
----------------
b. NOI annualized (* 2)
----------------
c. Collateral Property s.f.
----------------
d. Reserve Amount $ 0.25
----------------
e. Collateral Reserve Amount $ -
----------------
f. Proforma leasing Xxxx Foods space -
----------------
g. NOI included in 6b. from re-leased Xxxx Foods
----------------
h. Collateral Cash Flow (b-e+f-g) $ -
----------------
i. Proforma Principal Amt (Amt O/S at QE + issued L/Cs)
----------------
j. DS at a 9.25% constant
----------------
k. int. at >of: actual or 10yr T+2.5% + 25 yr amort.
----------------
l. Proforma DS = the > of: 6h. or 6i.
----------------
m. Collateral CF/Proforma DS
----------------
Collateral CF/Proforma DS cannot be less than 1.35x
-78-
(7) Permitted Investments (Paragraph 8.3d of Revolving Credit Agreement)
Covenant* Actual
-------- ------
a. R.E. Assets that are not office bldgs or off. parks 5%
------------
b. Unconsolidated Entities 10%
------------
c. Undeveloped Land 5%
------------
d. Mortgages and Notes Receivable 5%
------------
e. Total Investments n/a
------------
f. MAXIMUM PERMITTED INVESTMENTS 15%
------------
* as a percent of GAV (= 1c)
(8) Total Distributions (Paragraph 8.7)
a. total distributions for the last fiscal year
------------
b. FFO for the last fiscal year
------------
c. 90% of b.
------------
a. cannot exceed c .
-79-
EXHIBIT D
---------
FORM OF
ASSIGNMENT AND ACCEPTANCE
Dated
Reference is made to the Revolving Credit Agreement dated as of November
12, 2002 (as amended and in effect from time to time, the "Agreement"), among
AmeriVest Properties, Inc., a Maryland corporation (the "Borrower"), Fleet
National Bank, the other Lenders and Fleet National Bank as agent (the "Agent")
for itself and the other Lenders. Capitalized terms used herein and not
otherwise defined shall have the meanings assigned to such terms in the
Agreement.
___________________(the "Assignor") and ______________________(the
"Assignee") agree as follows:
1. The Assignor hereby sells and assigns to the Assignee, and the Assignee
hereby purchases and assumes from the Assignor, as of the Effective Date (as
hereinafter defined) a portion of the Assignor's rights and obligations under
the Agreement which relates to $________________ of the Assignor's Commitment
and a Commitment Percentage of _____% of all Loans outstanding as of the
Effective Date.
2. The Assignor (i) represents that as of the date hereof, its Commitment
(without giving effect to this Assignment or any other assignments by Assignor
effective on the Effective Date (the "Simultaneous Assignments")) is $__________
and its Commitment Percentage with respect thereto is %, and the outstanding
balance of its Loans (unreduced by any assignments thereof pursuant to this
Assignment or the Simultaneous Assignments) is $__________; (ii) makes no
representation or warranty and assumes no responsibility with respect to any
statements, warranties or representations made in or in connection with the
Agreement or the execution, legality, validity, enforceability, genuineness,
sufficiency or value of the Agreement, the other Loan Documents or any other
instrument or document furnished pursuant thereto, other than that it is the
legal and beneficial owner of the interest being assigned by it hereunder and
that such interest is free and clear of any adverse claim; (iii) makes no
representation or warranty and assumes no responsibility with respect to the
financial condition of the Borrower or any of its Subsidiaries or any other
person which may be primarily or secondarily liable in respect of any of the
Obligations or any of their obligations under the Agreement or the other Loan
Documents or any other instrument or document delivered or executed pursuant
thereto; (iv) represents and warrants that it is legally authorized to enter
into this Assignment and Acceptance; (v) represents and warrants that to the
best of Assignor's knowledge no Event of Default has occurred and is continuing
on the date hereof; and (vi) attaches the $_______________ Note delivered to it
under the Agreement and requests that the Borrower exchange such Note for new
Notes executed by Borrower and payable to each of the Assignor and/or to the
assignees pursuant to the Simultaneous Assignments and the Assignee as follows:
Notes Payable to Amount of Note
the Order of: --------------
-------------
[Name of Assignor or assignees pursuant [($ )]
-----
Simultaneous Assignments]
[Name of Assignee] [($ )]
-----
-80-
3. The Assignee (i) represents and warrants that it is legally authorized
to enter into this Assignment and Acceptance; (ii) confirms that it has received
a copy of the Agreement, together with copies of the most recent financial
statements delivered pursuant to ss.ss.6.4 and 7.4 thereof and such other
documents and information as it has deemed appropriate to make its own credit
analysis and decision to enter into this Assignment and Acceptance; (iii) agrees
that it will, independently and without reliance upon the Assignor, any other
Lender or the Agent and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions and review
and analysis of the value of any Properties in taking or not taking action under
the Agreement; (iv) confirms that it is an Eligible Assignee; (v) appoints and
authorizes the Agent to take such action as agent on its behalf and to exercise
such powers as are reasonably incidental thereto pursuant to the terms of the
Agreement and the other Loan Documents; and (vi) agrees that it will perform all
the obligations which by the terms of the Agreement are required to be performed
by it as a Lender in accordance with the terms of the Agreement.
4. The effective date for this Assignment and Acceptance shall be (the
"Effective Date"). Following the execution of this Assignment and Acceptance, it
will be delivered to the Agent for acceptance and recording in the Register by
the Agent. This Assignment and Acceptance may be executed in several
counterparts and by each party on a separate counterpart, each of which when so
executed and delivered shall be an original, and all of which together shall
constitute one instrument. In proving this Assignment and Acceptance it shall
not be necessary to produce or account for more than one such counterpart signed
by the party against whom enforcement is sought.
5. Upon such acceptance and recording, from and after the Effective Date,
(i) the Assignee shall be a party to the Agreement and, to the extent provided
in this Assignment and Acceptance, have the rights and obligations of a Lender
thereunder, and (ii) the Assignor shall, with respect to that portion of its
interest under the Agreement assigned hereunder relinquish its rights and be
released from its obligations under the Agreement.
6. Upon such acceptance and recording, from and after the Effective Date,
the Agent shall make all payments in respect of the interest assigned hereby
(including payments of principal, interest, fees and other amounts) to the
Assignee. The Assignor and Assignee shall make all appropriate adjustments in
payments for periods prior to the Effective Date by the Agent or with respect to
the making of this assignment directly between themselves.
7. THIS ASSIGNMENT AND ACCEPTANCE IS INTENDED TO TAKE EFFECT AS A SEALED
INSTRUMENT TO BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE
COMMONWEALTH OF MASSACHUSETTS.
IN WITNESS WHEREOF, intending to be legally bound, each of the undersigned
has caused this Assignment and Acceptance to be executed on its behalf by its
officer thereunto duly authorized, as of the date first above written.
[NAME OF ASSIGNOR]
By:_______________________________
Title:____________________________
[NAME OF ASSIGNEE]
By:_______________________________
Title:____________________________
-81-
Exhibit E
---------
LETTER OF CREDIT REQUEST
------------------------
[Date]
Fleet National Bank, as Agent
000 Xxxxxxx Xxxxxx
Xxxxxx, XX 00000
Ladies and Gentlemen:
Re: Letter of Credit Request under Revolving Credit Agreement dated as of
---------------------------------------------------------------------
November 12, 2002
-----------------
Pursuant to ss.2.8 of the Revolving Credit Agreement dated as of November
12, 2002, among you, certain other Lenders and us (the "Credit Agreement"), we
hereby request that you issue a Letter of Credit as follows:
(i) Name and address of beneficiary:
(ii) Face amount: $
(iii) Proposed Issuance Date:
Proposed Expiration Date:
(iv) Other terms and conditions as set forth in the proposed form of
Letter of Credit attached hereto.
(v) Purpose of Letter of Credit:
This Letter of Credit Request is submitted pursuant to, and shall be
governed by, and subject to satisfaction of, the terms, conditions and
provisions set forth in ss.2.8 of the Credit Agreement.
The undersigned hereby further certifies to you that it is in compliance
with the covenants specified in ss.9.1 through ss.9.6 of the Credit Agreement,
and will remain in compliance with such covenants after the outstanding balance
of the Loans is adjusted to include the face amount of the requested Letter of
Credit, as evidenced by a Compliance Certificate in the form of Exhibit C to the
Credit Agreement of even date herewith delivered to you simultaneously with this
Letter of Credit Request.
We also understand that if you grant this request this request obligates us
to accept the requested Letter of Credit and pay the issuance fee and Letter of
Credit fee as required by ss.2.8(c). All terms defined in the Credit Agreement
and used herein without definition shall have the meanings set forth in ss.1.1
of the Credit Agreement.
The undersigned hereby certifies to you, in accordance with the provisions
of ss.11.1 of the Credit Agreement, that the representations and warranties
contained in the Credit Agreement and in each document and instrument delivered
pursuant to or in connection therewith were true in all material respects as of
the date as of which they were made, are also true in all material respects at
and as of the date hereof, and will also be true in all material respects at and
as of the proposed issuance date of the Letter of Credit requested hereby, in
each case except as otherwise permitted pursuant to the provisions of ss.11.1 of
the Credit Agreement, and no Default or Event of Default has occurred and is
continuing.
Very truly yours,
AMERIVEST PROPERTIES INC.
By:_______________________________
-82-
Exhibit F
---------
Chateau Plaza Reserve Account Deposit Certificate under
Revolving Credit Agreement dated as of November 12, 2002
The undersigned, a Responsible Officer of AMERIVEST PROPERTIES INC.
(the "Borrower"), hereby certifies on behalf of the Borrower that on or before
_______________ the sum of $___________ was deposited in the Chateau Plaza
Reserve Account and that such amount was computed based on the following
information which the undersigned certifies to be accurate in all material
respects:
-------------------------------------------------------------------------------------- -------------
Total rental and other revenue of Chateau Plaza for the month preceding the deposit $
-------------------------------------------------------------------------------------- -------------
Total operating expenses of Chateau Plaza for the month preceding the deposit1 $
-------------------------------------------------------------------------------------- -------------
One month's interest on $15,400,000 at the rate of ____% per annum2 $
-------------------------------------------------------------------------------------- -------------
Assumed contribution to Borrower's common stock xxxxxxxx0 $45,125.00
-------------------------------------------------------------------------------------- -------------
Deposit Amount $
-------------------------------------------------------------------------------------- -------------
Date:
AMERIVEST PROPERTIES INC.
By:_______________________________
_______________________________
Its:______________________________
_______________________________
1) Operating expense do not include depreciation and other non-cash expenses.
See definition of Net Operating Income in Revolving Credit Agreement
2) Fill in actual average interest rate on the Loans during the month preceding
the deposit
3) This amount shall be adjusted if quarterly dividend rate changes from 13
cents per share.
-83-
SCHEDULE 1
Lenders; Domestic and Eurodollar Lending Offices
------------------------------------------------
----------------------------------- --------------------------------------
Fleet National Bank
000 Xxxxxxx Xxxxxx
Xxxxxx, XX 00000
(Domestic and Eurodollar)
----------------------------------- --------------------------------------
----------------------------------- --------------------------------------
----------------------------------- --------------------------------------
----------------------------------- --------------------------------------
----------------------------------- --------------------------------------
----------------------------------- --------------------------------------
----------------------------------- --------------------------------------
SCHEDULE 1.1
Commitments
-----------
---------------------- -------------------------- ----------------------
Lender Commitment Commitment Percentage
---------------------- -------------------------- ----------------------
Fleet National Bank $30,000,000 100%
---------------------- -------------------------- ----------------------
---------------------- -------------------------- ----------------------
Totals $30,000,000 100%
---------------------- -------------------------- ----------------------
Schedule 1.2
Mortgaged Real Property
Xxxxxxxx Xxxxxx Xxxxxxxx, 0000 Xxxxx Xxxxxxxx Xxxxxx, Xxxxxx, Xxxxxxxx
Chateau Xxxxx Xxxxxx Xxxxxxxx, 0000 XxXxxxxx Xxxxxx, Xxxxxx, Xxxxx (effective
upon satisfaction of each of the conditions set forth in ss.10 relating thereto)
SCHEDULE 1.3
RELATED COMPANIES
& UNCONSOLIDATED ENTITIES
Related Companies - AmeriVest Properties Inc. is the 100% Shareholder of each:
------------------------------------------------------------------------------
Subsidiary Name State of Incorporation
--------------- ----------------------
AmeriVest Broadway Properties Inc. Colorado
AmeriVest Sheridan Center Inc. Colorado
AmeriVest Properties Texas Inc. Texas
AmeriVest Buildings Texas Inc. Texas
AmeriVest Properties Indiana Inc. Indiana
AmeriVest Inverness Inc. Colorado
AmeriVest Arrowhead Inc. Arizona
AmeriVest Xxxxxxx Inc. Colorado
Kellogg Executive Suites, Inc. Colorado
AmeriVest Parkway Inc. Texas
AmeriVest Centerra Inc. Colorado
AmeriVest Chateau Inc. Texas
Unconsolidated Entities:
------------------------
The Borrower's AmeriVest Broadway Properties Inc. subsidiary owns 20% of the
Panorama Falls building as a tenant in common.
Schedule 6.3
Properties not owned by the Borrower
None
SCHEDULE 6.7
Litigation
On June 14, 2001, a lawsuit was filed in the District Court, Xxxxxxx
County, Texas against Xxxxxxxxxx Xxxxxx, Inc., a Nevada corporation, and our
wholly-owned subsidiary, AmeriVest Properties Texas, Inc., by Xxxxx Xxxxx
alleging that the defendants were negligent and breached various duties in
allowing our Mission, Texas building to be contaminated with airborne
contaminants while leasing the premises to the plaintiff's employer, the Texas
Department of Human Services. Xxxxxxxxxx Xxxxxx, Inc. was the previous owner of
the property. The plaintiff alleges that due to the acts and omissions of the
defendants, she has suffered serious and some permanent injuries and severe
physical and mental pain. The plaintiff seeks monetary and other relief,
including exemplary damages, in excess of $50,000, and pre-judgment and
post-judgment interest as provided by law, costs of the lawsuit and such other
relief to which the plaintiff may be justly entitled.
On February 11, 2002, a lawsuit was filed in the District Court, Xxxxxxx
County, Texas against our subsidiary, AmeriVest Properties Texas Inc., and
Woodhaven Management Corporation, our external property manager, by Xxxx and
Xxxxxx Xxxxxxxx alleging that we and our property manager were negligent in
maintaining our Mission, Texas building while leasing the premises to the
plaintiffs' employer, the Texas Department of Human Services. Xx. Xxxxxxxx
alleges that due to the acts and omissions of the defendants, she has suffered
serious and some permanent injuries and severe physical and mental pain and loss
of consortium. Xx. Xxxxxxxx alleges loss of consortium, loss of household
services and nursing services. The plaintiffs seek monetary and other relief,
including exemplary damages, and pre-judgment and post-judgment interest as
provided by law, costs of the lawsuit and such other relief to which the
plaintiffs may be justly entitled.
On August 23, 2002, a lawsuit was filed in the Xxxxxxxx Xxxxx, Xxxxxx
Xxxxxxxx, Xxxxxxxx, against our AmeriVest Broadway Properties Inc. subsidiary,
Sheridan Realty Advisors, LLC and Xxxxxx Construction Services, Inc., by Xxxx
Xxx alleging that the defendants were negligent in maintaining security at our
Panorama Falls building. The plaintiff alleges that due to the acts and
omissions of the defendants, she was sexually assaulted and continues to suffer
from physical injuries and mental anguish. The plaintiff seeks monetary relief,
including exemplary damages, and pre- and post-judgment interest as provided by
law, costs of the lawsuit and such other relief to which the plaintiff may be
just entitled.
We have asserted a general denial of the material allegations in each
lawsuit. These lawsuits, if adversely determined, could have a material adverse
effect on our business and financial condition, and we cannot assure you that
other lawsuits will not be filed. Our insurance company is currently defending
us in these lawsuits.
SCHEDULE 6.15
TRANSACTIONS BETWEEN AMERIVEST AND RELATED PARTIES
This section describes the transactions we have engaged in with our current
and past directors and officers and persons known by us to be the beneficial
owners of 5% or more of our common stock during the past two fiscal years.
Relationships among AmeriVest and Various Sheridan Group Entities
All of our executive officers and three of our directors have been
officers, directors or investors in various real estate investment companies
that are related to Sheridan Realty Advisors, our former administrator. These
partnerships, corporations and limited liability companies have collectively
been known as The Sheridan Group. All of the related party transactions
described in this section concern these individuals and entities. The following
table describes our officers and directors who have relationships with The
Sheridan Group:
Name Positions with AmeriVest
---- ------------------------
Xxxxxxx X. Xxxxxx Chief Executive Officer, Director and Chairman of the
Board
Xxxxxxx X. Xxxxxx President and Director
Xxxx Xxxxxxxx Vice President
Xxxxxxxxx Xxxxxx Vice President and Secretary
D. Xxxxx Xxxxxxxxx Chief Financial Officer
Xxxxxx X. Xxxxxx Director
The following table describes the various entities within The Sheridan
Group which previously had or currently have a relationship with AmeriVest as
described elsewhere in this section, the nature of that relationship and the
ownership and position of AmeriVest officers, directors and principal
stockholders in each entity in The Sheridan Group.
Owners of Management of
Primary Relationship Sheridan Group Ownership Sheridan Management
Sheridan Group Entity to AmeriVest Entity Percentage Group Entity Position
--------------------- -------------------- -------------- ---------- ------------ ----------
Sheridan Realty Former administrator Xxxxxx 20% Xxxxxx Chairman
Advisors, LLC and current advisor Knight 20% Xxxxxx Vice Chairman
and 1.3% stockholder Xxxxxxxx 20% Knight President
(1) Xxxxxx Trust 20% Xxxxxxxx Senior V.P. CFO
Xxxxxxxxx 20% Xxxxxxxxx
Xxxxxxxx Realty 3.1% stockholder Sheridan 1% X.X. Xxxxxxxx General Partner
Partners, L.P. Realty Corp. interest and Realty
3.1335% L.P. Corp. (2)
Alexander interest
Xxxxxx
Beneficiary
of two trusts
which own
20.15%
Sheridan 18.2% stockholder Xxxxxx Ltd. 14.056% Sheridan Manager
Investments, LLC Partnership Development,
LLC (5)
Xxxxxx Trust 16.064%
Sheridan 8.835%
Management
Corp. (3)
Sheridan Incentive
Development, Interest (4)
LLC
---------------------
(1) Sheridan Realty Advisors receives an advisory and capital project fee, as
well as vesting of AmeriVest warrants, for those services under the terms
of our agreement with them, which expires on December 31, 2003. See
"--Agreements with Sheridan Realty Advisors, LLC."
(2) Xx. Xxxxxx is the President and a director and owns a 16.5% interest. Xx.
Xxxxxx is the Executive Vice President and a director and owns a 20%
interest through the Xxxxxx Trust. Xx. Xxxxxx is a director and owns a 5%
interest. Xx. Xxxxxxxxx is the Chief Financial Officer and a director.
(3) Xx. Xxxxxx is the President and a director and owns a 50% interest. Xx.
Xxxxxx is the Executive Vice President and a director and owns a 50%
interest through the Xxxxxx Trust.
(4) Sheridan Development receives a preferred distribution equal to 33 1/3% of
distributions after other members have received a return of their original
capital contribution plus their cumulative preferred return.
(5) Xx. Xxxxxx is the Co-Manager and President and owns a 25.05% interest. Xx.
Xxxxxx is the Co-Manager and Executive Vice President and owns 25.05%
interest. Xx. Xxxxxxxx is a Vice President and owns a 20% interest. Xx.
Xxxxxxxxx is a Chief Financial Officer and owns a 15% interest. Xx. Xxxxxx
is a Vice President and owns a 14.9% interest.
For a description of the beneficial ownership of our shares by each of
Messrs. Atkins, Hewitt, Xxxxxx and Knight and by Sheridan Investments, see
"Beneficial Owners of Securities."
Asset Purchases and Sales Involving Related Parties
Keystone Land Purchase
In September 2002, we purchased from Sheridan Realty Partners, L.P., which
is owned by certain of our executive officers and directors, 2.55 acres of
vacant land adjacent to Keystone Office Park for a total purchase price of
$320,000 paid in the form of our common stock.
Sale of Interest in Panorama Falls Building
On December 6, 2001, we completed the sale of an undivided 80% interest in
the Panorama Falls building to Freemark Abbey Panorama, LLC. A partner in
Freemark Abbey is an indirect beneficial owner of approximately 9% of Sheridan
Investments, LLC, which is the beneficial owner of approximately 18% of our
common stock. The aggregate sale price for the interest in Panorama Falls was
$4,800,000 payable by the Freemark Abbey as follows:
o $2,180,000 to KeyBank National Association to pay down a portion of the
existing mortgage loan;
o the assumption of 80% of the remaining existing mortgage loan in the
amount of $2,395,732; and
o the remainder of $304,268, less closing costs, in cash to us.
We retained a 20% interest in the property and will continue to operate and
manage the property. We will earn a management fee equal to 5% of the gross
revenues and an incentive fee from Freemark Abbey based on the total return of
the investment. The incentive fee is calculated as 25% of the cash remaining
after both parties have received distributions equal to their initial
investments in the property plus a 12% annually compounded cumulative return.
Purchase of Sheridan Plaza at Inverness, LLC
On June 25, 2001, we purchased 100% of the ownership interests of Sheridan
Plaza at Inverness, LLC from Sheridan Investments. Sheridan Plaza at Inverness,
LLC owns two office buildings located in Englewood, Colorado consisting of
118,720 rentable square feet on approximately 6.7 acres of land with 405 total
parking spaces, including 80 underground parking spaces. For accounting
purposes, the purchase price was $22,895,067, which consisted of:
o $705,135 for our 9.639% preferred membership interest in Sheridan
Investments, LLC, the owner of all of o the membership interests in
Sheridan Plaza at Inverness LLC, which was transferred back to Sheridan
Investments, LLC;
o $6,474,329 paid with (1) 1,057,346 shares of our common stock at a price
of $5.69 per share (as required for accounting purposes, based on an
average market price of the shares over a period of several days
o before and after the date of the announcement of the acquisition) and (2)
the cash proceeds of $458,030 from the sale of the Giltedge building;
o assumption of the mortgage in the principal amount of $14,954,425 secured
by the property; and
o assumption of other liabilities in the approximate amount of $761,178.
We used the $458,030 in net cash proceeds from the sale of the Giltedge
building to pay a portion of the purchase price for Sheridan Plaza at Inverness,
LLC as part of an Internal Revenue Code Section 1031 tax-deferred exchange. We
received stockholder approval for this transaction at a meeting held on June 20,
2001. As a result of the completion of this transaction, Sheridan Realty
Advisors was entitled to a fee of $294,700, which is equal to 5% of the equity
value of Sheridan Plaza at Inverness, LLC, in accordance with the terms of our
advisory agreement with Sheridan Realty Advisors.
Due to the fact that this transaction involved a related party, the
acquisition was recorded at its historical net book value. The difference
between the purchase price and the historical net book value was $4,507,557 and
has been recorded as a non-cash dividend during 2001.
Purchase of Sheridan Investments, LLC Interest
Effective July 1, 2000, we purchased from Sheridan Realty Partners a 9.639%
preferred membership interest in Sheridan Investments, through our wholly-owned
subsidiary, AmeriVest Inverness Inc. Sheridan Investments owned all the
ownership interests of Sheridan Plaza at Inverness, LLC, which owned a fee
simple interest in Sheridan Plaza at Inverness and related assets. The purchase
price of the membership interest was $658,918 payable in the form of 65,892
units, with each unit consisting of two shares of our common stock and one
redeemable warrant to purchase one share of our common stock for $5.00 per share
until July 10, 2005. These warrants were exercised by Sheridan Realty Partners
in March 2001. The agreement also provided for a reduction to the purchase price
if, on or before October 31, 2000, a member of Sheridan Investments sold a
preferred membership interest at a price less than the purchase price paid by us
or Sheridan Investments issued additional preferred membership interests with
substantially the same terms as our membership interest at a price less than the
purchase price paid by us. No such transaction occurred and no reduction in the
purchase price took place. As a result of our purchase of the interest in
Sheridan Investments, Sheridan Realty Advisors was entitled to a fee of $32,946,
which is equal to 5% of the equity value of that interest, in accordance with
our advisory agreement with Sheridan Realty Advisors.
Purchase of Panorama Falls Property
In order to pay a portion of the purchase price for the Panorama Falls
property on May 25, 2000, we borrowed $225,000 from the Xxxxxx Trust, using
$200,000 in connection with the purchase. This loan accrued interest at the
prime rate, was due on demand after one year or five days after the closing of
our 2000 public offering of units of common stock and warrants with proceeds to
us of at least $2 million, and was unsecured. We repaid this loan in August 2000
with the proceeds of our public offering. Xxxxxxxxx X. Xxxxxx is a stockholder
and officer of AmeriVest, an owner and officer of various Sheridan Group
companies and a trustee and beneficiary of the Xxxxxx Trust.
Line of Credit with Sheridan Investments, LLC
On June 13, 2001, our Board of Directors approved our obtaining a $500,000
one-year line of credit from Sheridan Investments. On March 11, 2002, the Board
approved an increase in this line of credit to $1,500,000. As of April 30, 2002,
we had an outstanding balance of $1,000,000 on this line of credit. This line of
credit, which is unsecured and has a rate of interest equal to 75 basis points
above the prevailing prime rate charged by Xxxxxx, Xxxxx Xxxxx, provides us with
additional liquidity on terms that are more favorable to us than our continuing
line of credit with US Bank. Among the more favorable terms are the lack of fees
and the unsecured nature of this line of credit. Our line of credit with US Bank
is secured by a second mortgage on our Sheridan Center property and a negative
pledge on the assets of our AmeriVest Buildings Texas Inc. subsidiary, with an
interest rate equal to one point over that bank's prime lending rate.
Purchase of Key Man Life Insurance Policy
In 2000, we purchased from Sheridan Investments the key man life insurance
policy maintained on the life of Xxxxxxx X. Xxxxxx, our Chairman and Chief
Executive Officer. We paid $79,376 for this policy, which was the excess of the
cash value of the policy over the total loan outstanding on the policy. We paid
this purchase price by issuing shares of our common stock valued at a price
equal to the volume-weighted average trading price of our common stock for the
five most recent trading days preceding December 18, 2000. This resulted in the
issuance of 16,305 shares of our common stock valued at $4.868 per share.
Agreements with Sheridan Realty Advisors, LLC
Effective January 1, 2000, we entered into an agreement with Sheridan
Realty Advisors for it to act as our administrator and to assume responsibility
for our day-to-day operations. This agreement was amended and restated in March
2001 and was further amended and restated as of January 1, 2002 to reduce the
types of services provided to AmeriVest and the fees paid by AmeriVest to
Sheridan Realty Advisors as a result of our purchase of the administrative,
property management and accounting services business from Sheridan Realty
Advisors, as described in more detail below.
Prior to the amendment and restatement of the advisory agreement effective
as of January 1, 2002, we paid Sheridan Realty Advisors a monthly administrative
fee of $15,800, which was to increase annually by 5%, a property management and
accounting fee equal to 5% of the gross collected rents received by us from the
managed properties, and a capital project fee equal to 3% of the total cost of
all capital projects in excess of $100,000 and approved by us. In addition,
Sheridan Realty Advisors was entitled to an advisory fee equal to 5% of the
equity value of all real property acquired or long-term leased by AmeriVest
during the term of the agreement. Equity value is equal to the acquisition price
of the property, including expenses of purchase, plus any capital expenditures
and lease-up costs incurred in connection with the property during the first 12
months of ownership less any mortgage debt assumed or incurred in connection
with the acquisition. This fee was intended to cover overhead expenses of
Sheridan Realty Advisors not covered by the other fees paid by AmeriVest and is
limited to amounts set forth in an annual budget submitted to AmeriVest.
In addition, Sheridan Realty Advisors received incentive compensation in
the form of five-year warrants to purchase up to 750,000 shares of our common
stock at $5.00 per share. The warrants were issued as of January 1, 2000, and
225,000 warrants vested immediately after approval of the issuance of the
warrants by our stockholders on June 6, 2000. Sheridan Realty Advisors may
utilize the warrants as incentive compensation to its employees. Vested warrants
may only be exercised beginning on January 1, 2003. The remaining 525,000
warrants vest only upon the completion of an acquisition or long-term lease of
real property by us. During the year ended December 31, 2001, Sheridan Realty
Advisors had approximately 387,662 warrants vest under this agreement. As of
March 31, 2002, 436,457 of the remaining 525,000 warrants had vested. For a more
detailed description of the warrant arrangements with Sheridan Realty Advisors
under the advisory agreement, see "Executive Compensation--Sheridan Realty
Advisors, LLC Warrants."
As of December 31, 2001, we had no direct employees. At that date, Sheridan
Realty Advisors had 31 employees who spent the majority of their time on our
business. All five of our executive officers were employed by Sheridan Realty
Advisors and received all of their cash or deferred compensation, health
insurance benefits and reimbursement of approved business expenses from Sheridan
Realty Advisors. In addition, our executive officers, who are also owners of
Sheridan Realty Advisors, were entitled to receive a portion of the five-year
incentive warrants described above. In 2001, our five executive officers earned
aggregate cash or deferred compensation of $780,000 from Sheridan Realty
Advisors, with each executive officer receiving compensation paid or deferred in
excess of $100,000. As of March 31, 2002, we had an outstanding balance of
$513,852 payable to Sheridan Realty Advisors in connection with previously
performed services. Under an agreement between us and Sheridan Realty Advisors
dated June 27, 2001, we do not have an obligation to pay any of this outstanding
balance until July 27, 2002.
Effective as of January 1, 2002, we purchased the administrative and
property management and accounting services business from Sheridan Realty
Advisors for the sum of $100 plus the book value of the furniture, fixtures and
equipment at December 31, 2001, which was approximately $50,000. Three of our
senior executives and 22 of the other employees of Sheridan Realty Advisors
became our direct employees and manage our day-to-day operations. We agreed to
assume sponsorship of, and all assets of and liabilities attributable to, the
transferred employees under the employee benefit plans of Sheridan Realty
Advisors. The three senior executives who became our employees, Xxxxxxx X.
Xxxxxx, our Chief Executive Officer, Xxxxxxx X. Xxxxxx, our President, and D.
Xxxxx Xxxxxxxxx, our Chief Financial Officer, will also remain employees of
Sheridan Realty Advisors and their 2002 salary obligations will be shared
between us and Sheridan Realty Advisors such that we will pay their cash
compensation and Sheridan Realty Advisors will accrue their deferred
compensation as a liability of Sheridan Realty Advisors.
In connection with our purchase of the administrative and property
management and accounting services business from Sheridan Realty Advisors, we
amended and restated our advisory agreement with Sheridan Realty Advisors as of
December 31, 2001 and became a self-administered REIT. Sheridan Realty Advisors
continues to serve as an outside advisor to the company in connection with
capital market activities, real estate acquisitions and dispositions and major
capital projects. For these services, Sheridan Realty Advisors will continue to
earn an advisory fee equal to 5% of the equity value of all real property
acquired or long-term leased by us and a capital project fee equal to 3% of the
total cost of all capital projects in excess of $100,000 and approved by us, as
well as continued vesting of the warrants. The amended and restated advisory
agreement expires on December 31, 2003 unless terminated earlier. The agreement
may be terminated upon 120 days' notice by a majority of our directors who are
not affiliated with Sheridan Realty Advisors or by a vote of a majority of our
stockholders. In addition, we may terminate the agreement without penalty and
without advance notice to Sheridan Realty Advisors upon a material change in the
ownership, control or management of Sheridan Realty Advisors. The agreement
provides that the resignation of either Xx. Xxxxxx or Xx. Xxxxxx from Xxxxxxxx
Realty Advisors without our prior approval will be deemed a material change in
control of Sheridan Realty Advisors.
Conflicts of Interest Policies
Our Board of Directors and our officers are subject to certain provisions
of Maryland law which are designed to eliminate or minimize the effects of
certain potential conflicts of interest. In addition, our bylaws provide that
any transaction between us and an interested party must be fully disclosed to
our Board, and that a majority of the directors not otherwise interested in the
transaction (including a majority of independent directors) must make a
determination that the transaction is fair, competitive and commercially
reasonable and on terms and conditions not less favorable to us than those
available from unaffiliated third parties.
Other than as described in this section, there are no material
relationships between us and our directors, executive officers or known holders
of more than 5% of our common stock.
SCHEDULE 6.18
PHASE I ENVIRONMENTAL SITE ASSESSMENTS
Phase I Environmental Site Assessment of Centerra Building, 0000 X. Xxxxxxxx
Xx., Xxxxxx, Xxxxxxxx dated October 16, 2002 prepared by ENSR Corporation.
Phase I Environmental Site Assessment of Chateau Plaza, 0000 XxXxxxxx Xxxxxx,
Xxxxxx, Xxxxx dated November 4, 2002 prepared by ENSR Corporation.
SCHEDULE 6.20
Rent Rolls for the Mortgaged Properties
Xxxxxxxx Xxxxxx Xxxxxxxx, 0000 Xxxxx Xxxxxxxx Xxxxxx, Xxxxxx, Xxxxxxxx -- See
attached
Chateau Xxxxx Xxxxxx Xxxxxxxx, 0000 XxXxxxxx Xxxxxx, Xxxxxx, Xxxxx -- A Rent
Roll shall be certified and deliver to the Agent at the time that Chateau Plaza
becomes a Mortgaged Property.
SCHEDULE 6.22(d)
PHYSICAL CONDITION SITE ASSESSMENT REPORTS
Property Evaluation Report Centerra Office Building Denver, Colorado dated
September 20, 2002 prepared by LM Consultants, Inc.
Property Evaluation Report Chateau Plaza Dallas, Texas dated October 22, 2002
prepared by LM Consultants, Inc.
SCHEDULE 6.22(l)
MATERIAL AGREEMENTS
None.
