Exhibit 10.76
CREDIT AGREEMENT ($50,000,000 REVOLVING LINE OF CREDIT)
dated as of February 5, 2001
among
XXXXXXX X. XXXXX RESIDENTIAL REALTY L.P., A DELAWARE
LIMITED PARTNERSHIP, AS BORROWER
and
PNC BANK, NATIONAL ASSOCIATION,
AS ADMINISTRATIVE AGENT,
FIRST UNION NATIONAL BANK,
AS SYNDICATION AGENT,
U.S. BANK NATIONAL ASSOCIATION,
AS DOCUMENTATION AGENT,
PNC CAPITAL MARKETS, INC.,
AS LEAD ARRANGER AND LEAD AGENT
and
SUCH OTHER BANKS AS SHALL BECOME PARTIES HERETO
TABLE OF CONTENTS
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ARTICLE I....................................................................... 1
SECTION 1.1. Definitions...................................................... 1
SECTION 1.2. Accounting Terms and Determinations.............................. 28
SECTION 1.3. Types of Borrowings.............................................. 29
ARTICLE II...................................................................... 29
SECTION 2.1. Commitments to Lend.............................................. 29
SECTION 2.2. Notice of Borrowing.............................................. 30
SECTION 2.3. Money Market Borrowings.......................................... 32
SECTION 2.4. Notice to Banks; Funding of Loans................................ 36
SECTION 2.5. Notes............................................................ 37
SECTION 2.6. Method of Electing Interest Rates................................ 38
SECTION 2.7. Interest Rates................................................... 40
SECTION 2.8. Fees............................................................. 41
SECTION 2.9. Maturity Date; Extension of Maturity Date........................ 44
SECTION 2.10. [Intentionally Deleted]........................................... 44
SECTION 2.11. Optional Prepayments.............................................. 44
SECTION 2.12. General Provisions as to Payments................................. 46
SECTION 2.13. Funding Losses.................................................... 46
SECTION 2.14. Computation of Interest and Fees.................................. 47
SECTION 2.15. Use of Proceeds................................................... 47
SECTION 2.16. Letters of Credit................................................. 47
SECTION 2.17. Letter of Credit Usage............................................ 50
ARTICLE III..................................................................... 51
SECTION 3.1. Closing.......................................................... 51
SECTION 3.2. Borrowings........................................................ 53
ARTICLE IV...................................................................... 54
SECTION 4.1. Existence and Power.............................................. 54
SECTION 4.2. Power and Authority.............................................. 55
SECTION 4.3. No Violation..................................................... 55
SECTION 4.4. Financial Information............................................ 56
SECTION 4.5. Litigation....................................................... 56
SECTION 4.6. Compliance with ERISA............................................ 57
SECTION 4.7. Environmental Matters............................................ 57
SECTION 4.8. Taxes............................................................ 57
SECTION 4.9. [Intentionally Deleted].......................................... 57
SECTION 4.10. Solvency......................................................... 57
SECTION 4.11. Use of Proceeds; Margin Regulations............................... 58
SECTION 4.12. Governmental Approvals............................................ 58
SECTION 4.13. Investment Company Act; Public Utility Holding Company Act........ 58
SECTION 4.14. Principal Offices................................................. 58
SECTION 4.15. REIT Status....................................................... 58
SECTION 4.16. Patents, Trademarks, etc.......................................... 58
SECTION 4.17. Ownership of Property............................................. 59
SECTION 4.18. No Default........................................................ 59
SECTION 4.19. Licenses, etc..................................................... 59
SECTION 4.20. Compliance With Law............................................... 59
SECTION 4.21. No Burdensome Restrictions........................................ 59
SECTION 4.22. Brokers' Fees..................................................... 60
SECTION 4.23. Labor Matters..................................................... 60
SECTION 4.24. Insurance......................................................... 60
SECTION 4.25. Organizational Documents.......................................... 60
SECTION 4.26. Qualifying Unencumbered Properties................................ 60
SECTION 4.27. Ownership of Borrower and Consolidated Subsidiaries............... 61
SECTION 4.28. Disclosure........................................................ 61
SECTION 4.29. CESRRI's Ownership Interests...................................... 61
ARTICLE V....................................................................... 61
SECTION 5.1. Information....................................................... 61
SECTION 5.2. Payment of Obligations............................................ 62
SECTION 5.3. Maintenance of Property; Insurance; Leases........................ 62
SECTION 5.4. Conduct of Business and Maintenance of Existence.................. 62
SECTION 5.5. Compliance with Laws.............................................. 62
SECTION 5.6. Inspection of Property, Books and Records......................... 63
SECTION 5.7. Existence......................................................... 63
SECTION 5.8. Financial Covenants............................................... 63
SECTION 5.9. Restriction on Fundamental Changes................................ 67
SECTION 5.10. Changes in Business............................................... 67
SECTION 5.11. Margin Stock...................................................... 68
SECTION 5.12. Hedging Requirements.............................................. 68
SECTION 5.13. CESRRI Status..................................................... 68
SECTION 5.14. Acceptance of Qualifying Unencumbered Properties.................. 69
SECTION 5.15. Payment of Taxes and Claims....................................... 71
SECTION 5.16. Maintenance of Permits, Etc....................................... 71
SECTION 5.17. Disposal of Consolidated Subsidiary Interests..................... 71
SECTION 5.18. Environmental Liabilities......................................... 72
SECTION 5.19. Wholly Owned Consolidated Subsidiaries............................ 72
ARTICLE VI...................................................................... 73
iii
SECTION 6.1. Events of Default................................................ 73
SECTION 6.2. Rights and Remedies.............................................. 76
SECTION 6.3. Notice of Default................................................ 77
SECTION 6.4. Actions in Respect of Letters of Credit.......................... 77
SECTION 6.5. Distribution of Proceeds after Default........................... 79
SECTION 6.6. Debtor Relief Proceedings........................................ 79
ARTICLE VII..................................................................... 79
SECTION 7.1. Appointment and Authorization..................................... 79
SECTION 7.2. Agency and Affiliates............................................. 80
SECTION 7.3. Action by Administrative Agent.................................... 80
SECTION 7.4. Consultation with Experts......................................... 81
SECTION 7.5. Liability of Administrative Agent................................. 81
SECTION 7.6. Indemnification................................................... 81
SECTION 7.7. Credit Decision................................................... 82
SECTION 7.8. Successor Administrative Agent.................................... 82
SECTION 7.9. Consents and Approvals............................................ 83
SECTION 7.10. Delivery of Documents............................................. 84
SECTION 7.11. Inspection of Books and Records................................... 84
SECTION 7.12. Administrative Agent's Commitment................................. 84
ARTICLE VIII.................................................................... 84
SECTION 8.1. Basis for Determining Interest Rate Inadequate or Unfair.......... 84
SECTION 8.2. Illegality........................................................ 85
SECTION 8.3. Increased Cost and Reduced Return................................. 86
SECTION 8.4. Taxes............................................................. 87
SECTION 8.5. Base Rate Loans Substituted for Affected Euro-Dollar Loans........ 89
ARTICLE IX...................................................................... 90
SECTION 9.1. Notices........................................................... 90
SECTION 9.2. No Waivers........................................................ 91
SECTION 9.3. Expenses; Indemnification......................................... 91
SECTION 9.4. Sharing of Set-Offs............................................... 92
SECTION 9.5. Amendments and Waivers............................................ 93
SECTION 9.6. Successors and Assigns............................................ 93
SECTION 9.7. Collateral........................................................ 96
SECTION 9.8. Governing Law; Submission to Jurisdiction......................... 96
SECTION 9.9. Counterparts; Integration; Effectiveness.......................... 97
SECTION 9.10. WAIVER OF JURY TRIAL.............................................. 97
SECTION 9.11. Survival.......................................................... 98
SECTION 9.12. Domicile of Loans................................................. 98
SECTION 9.13. Limitation of Liability........................................... 98
iv
SECTION 9.14. Recourse Obligation................................................. 98
SECTION 9.15. Confidentiality..................................................... 99
SECTION 9.16. Bank's Failure to Fund.............................................. 99
SECTION 9.17. No Bankruptcy Proceedings........................................... 104
v
vi
vii
EXHIBITS
--------
A1 - BID RATE NOTE
A2 - NOTE
B - MONEY MARKET QUOTE REQUEST
C - INVITATION FOR MONEY MARKET QUOTE
D - MONEY MARKET QUOTE
E - ASSIGNMENT AND ASSUMPTION AGREEMENT
F - LIST OF QUALIFIED UNENCUMBERED PROPERTIES
G - DESIGNATION AGREEMENT
H - ADMINISTRATIVE QUESTIONNAIRE
I - NOTICE OF BORROWING
J - EXTENSION REQUEST
K - CERTIFICATION AS TO QUALIFIED UNENCUMBERED PROPERTIES
L - COMPLIANCE CERTIFICATE
M - [INTENTIONALLY DELETED]
N - QUALIFYING GROUND LEASES
O - CLOSING REQUIREMENTS
P - APPROVED CONSOLIDATED METROPOLITAN STATISTICAL AREAS
viii
SCHEDULES
---------
SCHEDULE I - COMMITMENTS OF BANKS
SCHEDULE II - NAMES, ADDRESSES, TELEPHONE AND TELECOPIER NUMBERS OF
PARTIES
SCHEDULE 2.16 LETTERS OF CREDIT ISSUED UNDER EXISTING CREDIT AGREEMENT
SCHEDULE 4.5 LITIGATION
SCHEDULE 4.6 COMPLIANCE WITH ERISA
SCHEDULE 4.7 ENVIRONMENTAL MATTERS
SCHEDULE 4.17 OWNERSHIP OF PROPERTIES
SCHEDULE 4.27 OWNERSHIP OF BORROWER AND CONSOLIDATED
SUBSIDIARIES
SCHEDULE 5.1 FINANCIAL REPORTING REQUIREMENTS
SCHEDULE 5.13(c)(1) CESRRI INVESTMENTS
SCHEDULE 5.13(c)(2) CESRRI PROPERTY INTERESTS
ix
CREDIT AGREEMENT ($50,000,000 REVOLVING LINE OF CREDIT)
THIS CREDIT AGREEMENT ($50,000,000 REVOLVING LINE OF CREDIT) (this
"Agreement") dated as of February 5, 2001, among XXXXXXX X. XXXXX RESIDENTIAL
REALTY L.P., a Delaware limited partnership (the "Borrower"), PNC BANK, NATIONAL
ASSOCIATION, as Administrative Agent and as a Bank, FIRST UNION NATIONAL BANK,
as Syndication Agent and as a Bank, and, U.S. BANK NATIONAL ASSOCIATION, as
Documentation Agent and as a Bank and the other BANKS listed on the signature
pages hereof.
W I T N E S S E T H
- - - - - - - - - -
WHEREAS, effective as of November 20, 1998, the Borrower, PNC Bank,
National Association ("PNC"), U.S. Bank National Association ("U.S. Bank") and
NationsBank, N.A., now known as Bank of America, N.A. ("Bank of America")
entered into a Credit Agreement (as amended by the First Amendment to Credit
Agreement dated as of June 20, 2000, the "Existing Credit Agreement"); and
WHEREAS, the parties hereto desire to enter into this Credit Agreement,
which replaces and supercedes in its entirety the Existing Credit Agreement, as
more fully set forth herein, and First Union National Bank has agreed to replace
Bank of America as Syndication Agent.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
ARTICLE I
DEFINITIONS
SECTION 1.1. Definitions.
-----------
The following terms, as used herein, have the following meanings:
"Absolute Rate Auction" means a solicitation of Money Market Quotes setting
---------------------
forth Money Market Absolute Rates pursuant to Section 2.3.
"Adjusted London Interbank Offered Rate" has the meaning set forth in
--------------------------------------
Section 2.7(b).
"Administrative Agent" shall mean PNC Bank, National Association in its
--------------------
capacity as Administrative Agent hereunder, and its permitted successors in such
capacity in accordance with the terms of this Agreement.
"Administrative Questionnaire" means, with respect to each Bank, an
----------------------------
administrative questionnaire in the form attached hereto as Exhibit H, and
submitted to the Administrative Agent (with a copy to the Borrower) duly
completed by such Bank.
"Aggregate Purchase Price" shall mean with respect to the purchase of
------------------------
any Property, without duplication, (i) Cash and Cash Equivalents paid as
consideration for such purchase, plus (ii) the principal amount of any note
----
delivered or other deferred payment to be made in connection with such purchase,
plus (iii) the value of any other consideration delivered in connection with
----
such purchase (including, without limitation, shares of CESRRI and OP Units), as
determined in good faith by the Borrower in accordance with GAAP, provided that
shares of CESRRI and OP Units shall be valued based on the value attributed
thereto pursuant to the applicable purchase agreement.
"Agreement" shall mean this Credit Agreement ($50,000,000 Revolving
---------
Line of Credit), as the same may from time to time hereafter be modified,
supplemented or amended.
"Applicable Interest Rate" means (i) with respect to any Fixed Rate
------------------------
Indebtedness, the fixed interest rate applicable to such Fixed Rate Indebtedness
at the time in question, and (ii) with respect to any Floating Rate
Indebtedness, either (x) the rate at which the interest rate applicable to such
Floating Rate Indebtedness is actually capped (or fixed pursuant to an interest
rate hedging device), at the time of calculation, if Borrower has entered into
an interest rate cap agreement or other interest rate hedging device with
respect thereto or (y) if Borrower has not entered into an interest rate cap
agreement or other interest rate hedging device with respect to such Floating
Rate Indebtedness, the greater of (A) the rate at which the interest rate
applicable to such Floating Rate Indebtedness could be fixed for the remaining
term of such Floating Rate Indebtedness, at the time of calculation, by
Borrower's entering into any unsecured interest rate hedging device either not
requiring an upfront payment or if requiring an upfront payment, which upfront
payment shall be amortized over the term of such device and included in the
calculation of the interest rate (or, if such rate is incapable of being fixed
by entering into an unsecured interest rate hedging device at the time of
calculation, a fixed rate equivalent thereto as reasonably determined by
Administrative Agent) or (B) the floating rate applicable to such Floating Rate
Indebtedness at the time in question.
"Applicable Lending Office" means, with respect to any Bank, (i) in the
-------------------------
case of its Base Rate Loans, its Domestic Lending Office, (ii) in the case of
its Euro-Dollar Loans, its Euro-Dollar Lending Office, and (iii) in the case of
its Money Market Loans, its Money Market Lending Office.
"Applicable Margin" means, with respect to each Loan during any period
-----------------
when neither CESRRI nor Borrower maintains the Investment Grade Ratings, the
respective percentages per annum determined, based on the range into which
Borrower's Leverage Ratio then falls, in accordance with the table set forth
below. Any change in Borrower's Leverage Ratio causing it to move to a different
range on the table shall effect a change in the Applicable Margin, effective on
the earlier of (i) the date of the Compliance Certificate reflecting such change
in the Leverage Ratio, or (ii) the last day on which a Compliance Certificate is
required to be delivered to the Administrative Agent in accordance with the
provisions hereof:
Applicable
Margin for Applicable
Range of Base Rate Margin for Euro-
Borrower's Loans Dollar Loans
Leverage Ratio (% per annum) (% per annum)
-------------- ------------- -------------
less than 30% 0.0 0.85
more than 30% less than 40% 0.0 1.00
more than 40% less than 50% 0.0 1.10
more than 50% less than 57.5% 0.0 1.25
During any period when either CESRRI or Borrower shall maintain the
Investment Grade Ratings, "Applicable Margin" shall mean, with respect to each
Loan, the respective percentages per annum, determined, at any time, based on
the Credit Ratings then applicable, in accordance with the table set forth
below:
Applicable
Margin for Applicable
Credit Rating Base Rate Margin for Euro-
(S&P/Xxxxx'x Loans Dollar Loans
Ratings) (% per annum) (% per annum)
------------ ------------- -------------
A-/A3 or higher 0.0 0.625
BBB+/Baa1 0.0 0.75
BBB/Baa2 0.0 0.90
BBB-/Baa3 0.0 1.00
If Borrower or CESRRI, as applicable, shall maintain two (2) Credit Ratings, and
such ratings are not equivalent, the Applicable Margin shall be based upon the
higher of the two ratings as long as
3
such ratings are only one level apart. In the event that the ratings are more
than one level apart, the Applicable Margin will be based upon the rating which
shall be one level above the lower of the two ratings. In the event that
Borrower or CESRRI, as applicable, receives more than two (2) Credit Ratings,
and such ratings are not equivalent, the Applicable Margin shall be determined
by the lower of the two (2) highest ratings, provided that at least one (1) of
such highest ratings shall be a Credit Rating from S&P or Xxxxx'x. In the event
that at least one (1) of the two (2) highest ratings shall not be a Credit
Rating from S&P or Xxxxx'x, then the Applicable Margin shall be determined by
the lowest of the ratings. In the event that only one of the Rating Agencies
shall have set Borrower's or CESRRI's Credit Rating, or Borrower or CESRRI, as
applicable, shall not maintain the Investment Grade Ratings, then the Applicable
Margin shall be based on Borrower's Leverage Ratio as set forth above.
Notwithstanding anything herein contained to the contrary, the Borrower shall
always have the right to elect that the Applicable Margin be determined based
upon its Leverage Ratio by written notice to the Administrative Agent with such
election to become effective upon the next Domestic Business Day following
receipt of such notice by Administrative Agent. Any change in the Applicable
Margin resulting from a change in a Credit Rating shall become effective on the
effective date of the change in the applicable Credit Rating.
"Approved Bank" shall mean banks which have (i)(a) a minimum net worth
-------------
of $500,000,000 and (b) total assets of $10,000,000,000, and (ii) a minimum long
term debt rating of (a) BBB+ or higher by S&P, and (b) Baal or higher by
Xxxxx'x.
"Approved CMSA" means the CMSA's listed on Exhibit P attached hereto.
-------------
"Assignee" has the meaning set forth in Section 9.6(c).
--------
"Assignment and Assumption Agreement" means an Assignment and
-----------------------------------
Assumption Agreement in the form attached hereto as Exhibit E.
"Assumed Unsecured Debt Service" means an amount equal to the principal
------------------------------
and interest payments due on a loan in the amount of the Unsecured Debt in
connection with the level mortgage-style amortization thereof based on a
twenty-seven and one-half (27.5) year term at an interest rate of 1.5% above the
Treasury Rate.
"Bank" means each bank listed on the signature pages hereof, each other
----
bank, finance company or other financial institution which becomes a party to
this Agreement pursuant to Section 9.6 (c) , and their respective successors,
and, except when used in reference to a Base Rate Loan, a Euro-Dollar Loan, a
Note in the form of Exhibit A-2, any Letter of Credit, the Commitment of any
Bank or a related term, each Designated Lender.
"Bank Reply Period" has the meaning set forth in Section 7.9.
-----------------
4
"Bankruptcy Code" shall mean Title 11 of the United States Code,
---------------
entitled "Bankruptcy", as amended from time to time, and any successor statute
or statutes.
"Base Rate" means, for any day, a rate per annum equal to the higher of
---------
(i) the Prime Rate for such day and (ii) the sum of 0.75% plus the Federal Funds
Rate for such day.
"Base Rate Loan" means a Committed Loan to be made by a Bank as a Base
--------------
Rate Loan in accordance with the applicable Notice of Borrowing or pursuant to
Article VIII.
"Benefit Arrangement" means at any time an employee benefit plan within
-------------------
the meaning of Section 3(3) of ERISA which is not a Plan or a Multiemployer Plan
and which is maintained or otherwise contributed to by any member of the ERISA
Group.
"Bid Rate Notes" means promissory notes of the Borrower, substantially
--------------
in the form of Exhibit A-1 hereto, evidencing the obligation of the Borrower to
repay Money Market Loans made by the Banks, and "Bid Rate Note" means any one of
such promissory notes.
"Borrower" means Xxxxxxx X. Xxxxx Residential Realty L.P., a Delaware
--------
limited partnership.
"Borrower Debt" means all Indebtedness of Borrower, on a consolidated
-------------
basis, and Borrower's Share of the Indebtedness of any Investment Affiliate
(without offset or reduction in respect of prepaid interest, restructuring fees
or similar items).
"Borrower's Share" means a percentage equal to Borrower's percentage
----------------
ownership interest in the applicable Investment Affiliate.
"Borrowing" has the meaning set forth in Section 1.3.
---------
"Budgeted Project Costs" means with respect to Properties under
----------------------
Development, the budgeted cost of completion of such Properties under
Development, provided that the budgeted costs shall include projected operating
deficits through completion and the projected date of occupancy of seventy-five
percent (75%) of the dwelling units and provided further that, for Properties
under Development by Investment Affiliates, the Budgeted Project Costs shall be
the Borrower's share of the budgeted costs of completion (based on the greater
of (x) the Borrower's percentage equity interest in the Investment Affiliates or
(y) the
5
Borrower's obligation to provide funds to the Investment Affiliates, which could
include, for example, completion guaranties or similar obligations, provided
that, in any case where a completion guaranty or similar obligation exists, the
Budgeted Project Costs shall be determined based upon Borrower's percentage
equity interest in the applicable Investment Affiliate plus the amount of any
claims made on such completion guaranty or similar obligation).
"Capital Expenditures" means any expenditures for any item that would
--------------------
be treated or defined as a capital expenditure under GAAP, excluding, however,
any capital expenditures which may be deemed to have been incurred as part of
the purchase price of any Real Property Asset or as part of the development cost
of any of the Properties under Development.
"Capital Leases" as applied to any Person, means any lease of any
--------------
property (whether real, personal or mixed) by that Person as lessee which, in
conformity with GAAP, is or should be accounted for as a capital lease on the
balance sheet of that Person.
"Capital Reserve" shall mean, for any period, $62.50 for each
---------------
residential unit for each Fiscal Quarter to occur during such period (in
connection with any annualized calculation, the Capital Reserve used in such
calculation shall also be annualized).
"Cash and Cash Equivalents" shall mean (i) cash, (ii) direct
-------------------------
obligations of the United States Government, including, without limitation,
treasury bills, notes and bonds, (iii) interest bearing or discounted
obligations of Federal agencies and Federal government-sponsored entities or
pools of such instruments offered by Approved Banks and dealers, including,
without limitation, Federal Home Loan Mortgage Corporation participation sale
certificates, Government National Mortgage Association modified pass through
certificates, Federal National Mortgage Association bonds and notes, and Federal
Farm Credit System securities, (iv) time deposits, Domestic and Euro-Dollar
certificates of deposit, bankers acceptances, commercial paper rated at least
A-1 by S&P and P-1 by Xxxxx'x and/or guaranteed by a Person maintaining an Aa2
rating by Xxxxx'x, an AA rating by S&P or better rated credit, floating rate
notes, other money market instruments and letters of credit each issued by
Approved Banks (provided that the same shall cease to be a "Cash and Cash
Equivalent" if at any time any such bank shall cease to be an Approved Bank),
(v) obligations of domestic corporations, including, without limitation,
commercial paper, bonds, debentures and loan participations, each of which is
rated at least AA by S&P and/or Aa2 by Xxxxx'x and/or guaranteed by a Person
maintaining an Aa2 rating by Xxxxx' s, an AA rating by S&P or better rated
credit, (vi) obligations issued by state and
6
local governments or their agencies, rated at least MIG-1 by Xxxxx'x and/or SP-1
by S&P and/or guaranteed by an irrevocable letter of credit of an Approved Bank
(provided that the same shall cease to be a "Cash and Cash Equivalent" if at any
time any such bank shall cease to be an Approved Bank), and (vii) repurchase
agreements with Approved Banks and primary government security dealers fully
secured by the United States Government or agency collateral equal to or
exceeding the principal amount on a daily basis and held in safekeeping.
"CESRRI" means Xxxxxxx X. Xxxxx Residential Realty, Inc., a Maryland
------
corporation.
"CESRRI Debt Proceeds" means all cash proceeds received by CESRRI as a
--------------------
result of the issuance of any Indebtedness, less customary costs of issuance
paid by CESRRI.
"Closing Date" means the date on or after the Effective Date on which
------------
the conditions set forth in Section 3.1 shall have been satisfied or waived to
the satisfaction of the Administrative Agent and the Borrower.
"CMSA" means a consolidated metropolitan statistical area as defined by
----
the Office of Management and Budget.
"Code" shall mean the Internal Revenue Code of 1986, as amended, and as
----
it may be further amended from time to time, any successor statutes thereto, and
applicable U.S. Department of Treasury regulations issued pursuant thereto in
temporary or final form.
"Committed Borrowing" has the meaning set forth in Section 1.3.
-------------------
"Committed Loan" means a Loan made by a Bank pursuant to Section 2.1 as
--------------
well as Loans required to be made by a Bank pursuant to Section 2.16 to
reimburse a Fronting Bank for a Letter of Credit that has been drawn down;
provided that, if any such Loan or Loans (or portions thereof) are combined or
subdivided pursuant to a Notice of Interest Rate Election, the term "Committed
Loan" shall refer to the combined principal amount resulting from such
combination or to each of the separate principal amounts resulting from such
subdivision as the case may be.
"Commitment" means, with respect to each Bank, the amount set forth
----------
opposite the name of such Bank on Schedule I hereto (and, for each Bank which is
an Assignee, the amount set forth in the Assignment and Assumption Agreement
entered into pursuant to Section 9.6(c) as the Assignee's Commitment), as such
amount may be reduced or increased from time to time pursuant
7
to the provisions hereof, which Commitments, on the Effective Date, aggregate
the sum of Fifty Million Dollars ($50,000,000).
"Compliance Certificate" means a certificate in the form of Exhibit L
----------------------
hereto to be delivered by the Borrower to the Administrative Agent in accordance
with Subsection (c) on Schedule 5.1, and in accordance with Section 2.9(b).
"Consolidated Engineering" means Consolidated Engineering Services,
------------------------
Inc., a Maryland corporation.
"Consolidated Subsidiary" means at any date any Subsidiary or other
-----------------------
entity, which is consolidated with Borrower in accordance with GAAP.
"Contingent Obligation" as to any Person means, without duplication,
---------------------
(i) any contingent obligation of such Person required to be shown on such
Person's balance sheet in accordance with GAAP, and (ii) any obligation required
to be disclosed in the footnotes to such Person's financial statements,
guaranteeing partially or in whole any Non-Recourse Indebtedness, lease,
dividend or other obligation, exclusive of (A) contractual indemnities
(including, without limitation, any indemnity or price-adjustment provision
relating to the purchase or sale of securities or other assets), (B) obligations
under a contract to purchase Property prior to the acquisition of title thereto,
and (C) guarantees of non-monetary obligations (other than guarantees of
completion) which have not yet been called on or quantified, of such Person or
of any other Person. The amount of any Contingent Obligation described in clause
(ii) shall be deemed to be (a) with respect to a guaranty of interest or
interest and principal, or operating income guaranty, the Net Present Value of
the sum of all payments required to be made thereunder (which in the case of an
operating income guaranty shall be deemed to be equal to the debt service for
the note secured thereby), calculated at the Applicable Interest Rate, through
(i) in the case of an interest or interest and principal guaranty, the stated
date of maturity of the obligation (and commencing on the date interest could
first be payable thereunder), or (ii) in the case of an operating income
guaranty, the date through which such guaranty will remain in effect, and (b)
with respect to all guarantees not covered by the preceding clause (a), an
amount equal to the stated or determinable amount of the primary obligation in
respect of which such guaranty is made or, if not stated or determinable, the
maximum reasonably anticipated liability in respect thereof (assuming such
Person is required to perform thereunder) as recorded on the balance sheet and
on the footnotes to the most recent financial statements of Borrower required to
be delivered pursuant to Schedule 5.1 hereof. Notwithstanding anything contained
herein to the contrary, guarantees of completion shall not be deemed to be
Contingent Obligations unless and until a
8
claim for payment or performance has been made thereunder, at which time any
such guaranty of completion shall be deemed to be a Contingent Obligation in an
amount equal to any such claim. Subject to the preceding sentence, (i) in the
case of a joint and several guaranty given by such Person and another Person
(but only to the extent such guaranty is recourse, directly or indirectly to
Borrower), the amount of the guaranty shall be deemed to be 100% thereof unless
and only to the extent that such other Person has delivered Cash and Cash
Equivalents to secure all or any part of such Person's guaranteed obligations
and (ii) in the case of a guaranty (whether or not joint and several) of an
obligation otherwise constituting Indebtedness of such Person, the amount of
such guaranty shall be deemed to be only that amount in excess of the amount of
the obligation constituting Indebtedness of such Person. Notwithstanding
anything contained herein to the contrary, "Contingent Obligations" shall be
deemed not to include guarantees of Unused Commitments or of construction loans
to the extent the same have not been drawn. All matters constituting "Contingent
Obligations" shall be calculated without duplication.
"Contractual Obligation," as applied to any Person, means any provision
----------------------
of any Securities issued by that Person or any indenture, mortgage, deed of
trust, lease, contract, undertaking, document or instrument to which that Person
is a party or by which it or any of its properties is bound, or to which it or
any of its properties is subject (including without limitation any restrictive
covenant affecting such Person or any of its properties).
"Credit Rating" means a rating assigned by the Rating Agencies to
-------------
CESRRI's or Borrower's, as applicable, senior unsecured indebtedness, provided
that, if no such rating is assigned, a comparable rating, assigned by a Rating
Agency to CESRRI's preferred stock, will be deemed to constitute a Credit
Rating.
"Debt Restructuring" means a restatement of, or material change in, the
------------------
amortization or other financial terms of any Indebtedness of the Borrower, any
Consolidated Subsidiary, or any Investment Affiliate.
"Debt Service" means, for any period, and without duplication, Interest
------------
Expense for such period plus scheduled principal amortization (excluding any
----
individual scheduled principal payment due at maturity) for such period on all
Indebtedness of the Borrower, on a consolidated basis, plus Borrower's Share of
----
scheduled principal amortization for such period on all Indebtedness of
Investment Affiliates.
"Debtor Relief Law" means Title 11 of the United States Code, entitled
-----------------
"Bankruptcy", as amended from time to time, and any other bankruptcy, insolvency
or other similar law now or
9
hereafter in effect.
"Default" means any condition or event which with the giving of notice
-------
or lapse of time or both would, unless cured or waived, become an Event of
Default.
"Default Rate" has the meaning set forth in Section 2.6(d).
------------
"Designated Lender" means a special purpose corporation that (i) shall
-----------------
have become a party to this Agreement pursuant to Section 9.6(d), and (ii) is
not otherwise a Bank.
"Designating Lender" shall have the meaning set forth in Section 9.6(d)
------------------
hereof.
"Designation Agreement" means a designation agreement in substantially
---------------------
the form of Exhibit G attached hereto, entered into by a Bank and a Designated
Lender and accepted by the Administrative Agent.
"Domestic Business Day" means any day except a Saturday, Sunday or
---------------------
other day on which commercial banks in Pittsburgh, Pennsylvania are authorized
by law to close.
"Domestic Lending Office" means, as to each Bank, its office located at
-----------------------
its address in the United States set forth in its Administrative Questionnaire
(or identified in its Administrative Questionnaire as its Domestic Lending
Office) or such other office as such Bank may hereafter designate as its
Domestic Lending Office by notice to the Borrower and the Administrative Agent.
"EBITDA" means, for any period (i) Net Income of the Borrower for such
------
period, plus (ii) depreciation and amortization expense and other non-cash items
deducted in the calculation of Net Income for such period, plus (iii) Interest
----
Expense deducted in the calculation of Net Income for such period, plus, (iv)
----
Taxes deducted in the calculation of Net Income for such period, plus (v) to the
extent not included above, Borrower's Share of Investment Affiliate EBITDA for
each Investment Affiliate, minus (vi) the gains (and plus the losses) from
----- ----
extraordinary items or asset sales or write-ups or forgiveness of indebtedness
included in the calculation of Net Income, for such period, all of the foregoing
without duplication.
"Effective Date" means the date this Agreement becomes effective in
--------------
accordance with Section 9.9.
"Environmental Affiliate" means any partnership, joint venture, trust
-----------------------
or corporation in which an equity interest is owned by the Borrower, either
directly
10
or indirectly, and, as a result of the ownership of such equity interest, the
Borrower may have recourse liability for Environmental Claims against such
partnership, joint venture or corporation (or the property thereof).
"Environmental Approvals" means any permit, license, approval, ruling,
-----------------------
variance, exemption or other authorization required under applicable
Environmental Laws.
"Environmental Claim" means, with respect to any Person, any notice,
-------------------
claim, demand or similar communication (written or oral) by any other Person
alleging potential liability of such Person for investigatory costs, cleanup
costs, governmental response costs, natural resources damage, property damages,
personal injuries, fines or penalties arising out of, based on or resulting from
(i) the presence, or release into the environment, of any Materials of
Environmental Concern at any location, whether or not owned by such Person or
(ii) circumstances forming the basis of any violation, or alleged violation, of
any Environmental Law, in each case (with respect to both (i) and (ii) above) as
to which there is a reasonable possibility of an adverse determination with
respect thereto and which, if adversely determined, would have a Material
Adverse Effect on such Person.
"Environmental Laws" means any and all federal, state, and local
------------------
statutes, laws, judicial decisions, regulations, ordinances, rules, judgments,
orders, decrees, plans, injunctions, permits, concessions, grants, licenses,
agreements and other governmental restrictions relating to the environment, the
effect of the environment on human health or to emissions, discharges or
releases of Materials of Environmental Concern into the environment including,
without limitation, ambient air, surface water, ground water, or land, or
otherwise relating to the manufacture, processing, distribution, use, treatment,
storage, disposal, transport or handling of Materials of Environmental Concern
or the clean up or other remediation thereof.
"Equity Value" means Market Value less Borrower Debt.
------------
"ERISA" means the Employee Retirement Income Security Act of 1974, as
-----
amended, or any successor statute.
"ERISA Group" means the Borrower, any Subsidiary and all members of a
-----------
controlled group of corporations and all trades or businesses (whether or not
incorporated) under common control which, together with the Borrower or any
Subsidiary, are treated as a single employer under Section 414 of the Code.
11
"Euro-Dollar Borrowing" has the meaning set forth in Section 1.3.
---------------------
"Euro-Dollar Business Day"' means any Domestic Business Day on which
------------------------
commercial banks are open for international business (including dealings in
dollar deposits) in London.
"Euro-Dollar Lending Office" means, as to each Bank, its office, branch
--------------------------
or affiliate located at its address set forth in its Administrative
Questionnaire (or identified in its Administrative Questionnaire as its
Euro-Dollar Lending Office) or such other office, branch or affiliate of such
Bank as it may hereafter designate as its Euro-Dollar Lending Office by notice
to the Borrower and the Administrative Agent.
"Euro-Dollar Loan" means a Committed Loan to be made by a Bank as a
----------------
Euro-Dollar Loan in accordance with the applicable Notice of Borrowing.
"Euro-Dollar Reserve Percentage" has the meaning set forth in Section
------------------------------
2.7(b).
"Event of Default" has the meaning set forth in Section 6.1.
----------------
"Existing Credit Agreement" has the meaning set forth in the recitals
-------------------------
to this Agreement.
"Extension Fee" has the meaning set forth in Section 2.8(f).
-------------
"Extension Request" has the meaning set forth in Section 2.9(b).
-----------------
"Facility Fee" has the meaning set forth in Section 2.8(a).
------------
"Federal Funds Rate" means, for any day, the rate per annum (rounded
------------------
upward, if necessary, to the nearest 1/100th of 1%) equal to the weighted
average of the rates on overnight Federal funds transactions with members of the
Federal Reserve System arranged by Federal funds brokers on such day, as
published by the Federal Reserve Bank of New York on the Domestic Business Day
next succeeding such day, provided that (i) if such day is not a Domestic
--------
Business Day, the Federal Funds Rate for such day shall be such rate on such
transactions on the next preceding Domestic Business Day as so published on the
next succeeding Domestic Business Day, and (ii) if no such rate is so published
on such next succeeding Domestic Business Day, the Federal Funds Rate for such
day shall be the average rate quoted to the Administrative Agent on such day on
such
12
transactions as determined by the Administrative Agent.
"Federal Reserve Board" means the Board of Governors of the Federal
---------------------
Reserve System as constituted from time to time.
"Fee Letter" means the letter agreement, dated as of the date hereof,
----------
between the Borrower and PNC, as the same may be amended, supplemented or
otherwise modified from time to time.
"Fiscal Quarter" means a fiscal quarter of a Fiscal Year.
--------------
"Fiscal Year" means the fiscal year of Borrower and CESRRI which shall
-----------
be the twelve (12) month period ending on the last day of December in each year.
"Fixed Charges" for any period means the sum, without duplication and
-------------
on a consolidated basis, of (i) Debt Service for such period, (ii) the product
of the average number of apartment units owned by Borrower or any Consolidated
Subsidiary during such period times the Capital Reserve for such period, (iii)
the product of the average number of square feet of retail improvements owned by
Borrower or any Consolidated Subsidiary during such period times the Retail
Capital Reserve Reduction Amount for such period, (iv) Borrower's Share of the
aggregate sum of the product of the average number of apartment units owned
(directly or indirectly) by each Investment Affiliate during such period and the
Capital Reserve for such period, (v) Borrower's Share of the aggregate sum of
the product of the number of square feet of retail improvements owned (directly
or indirectly) by each Investment Affiliate during such period and the Retail
Capital Reserve Reduction Amount for such period, and (vi) dividends on
preferred units payable by Borrower for such period.
"Fixed Rate Borrowing" has the meaning set forth in Section 1.3.
--------------------
"Fixed Rate Indebtedness" means all Indebtedness for borrowed money
-----------------------
which accrues interest at a fixed rate.
"Floating Rate Indebtedness" means all Indebtedness for borrowed money
--------------------------
which is not Fixed Rate Indebtedness and which is not a Contingent Obligation or
an Unused Commitment.
"Fronting Bank" shall mean PNC Bank, National Association or such other
-------------
Bank acceptable to the Administrative Agent which is designated by Borrower in
its Notice of Borrowing as the Bank which shall issue a Letter of Credit with
respect to such Notice of Borrowing.
13
"Fronting Bank Fee" has the meaning set forth in Section 2.8(c).
-----------------
"Funds from Operations" means Net Income of the Borrower excluding
---------------------
gains (or losses) from Debt Restructuring and sales of property, plus
depreciation and amortization with respect to real estate properties, and after
adjustments for unconsolidated partnerships and joint ventures.
"GAAP" means generally accepted accounting principles recognized as
----
such in the opinions and pronouncements of the Accounting Principles Board and
the American Institute of Certified Public Accountants and the Financial
Accounting Standards Board or in such other statements by such other entity as
may be approved by a significant segment of the accounting profession, which are
applicable to the circumstances as of the date of determination.
"Governmental Acts" has the meaning set forth in Section 2.16(g).
-----------------
"Governmental Authority" means any national, state or local government
----------------------
(whether domestic or foreign), any political subdivision thereof or any other
governmental, quasi-governmental, judicial, public or statutory instrumentality,
authority, body, agency, bureau or entity (including, without limitation, the
Federal Deposit Insurance Corporation, the Comptroller of the Currency, the
Federal Reserve Board, any central bank or any comparable authority) or any
arbitrator with authority to bind a party at law.
"Group of Loans" means, at any time, a group of Loans consisting of (i)
--------------
all Committed Loans which are Base Rate Loans at such time, or (ii) all
Euro-Dollar Loans having the same Interest Period at such time; provided that,
if a Committed Loan of any particular Bank is converted to or made as a Base
Rate Loan pursuant to Section 8.2 or 8.5, such Loan shall be included in the
same Group or Groups of Loans from time to time as it would have been if it had
not been so converted or made.
"Hedge Rate" means a rate of interest per annum (including any reserve
----------
or cost adjustments) equal to nine percent (9%).
"Indebtedness" of any Person means, without duplication, (A) as shown
------------
on such Person's consolidated balance sheet (i) all indebtedness of such Person
for borrowed money or for the deferred purchase price of property, (ii) all
then-outstanding indebtedness of such Person evidenced by a note, bond,
debenture or similar instrument, and (iii) all obligations in respect of Capital
Leases (including ground leases) of such Person, (B) the face amount of all
letters of credit
14
issued for the account of such Person and, without duplication, all unreimbursed
amounts drawn thereunder, (C) all Contingent Obligations of such Person, (D) all
payment obligations of such Person under any interest rate protection agreement
(including, without limitation, any interest rate swaps, caps, floors, collars
and similar agreements) and currency swaps and similar agreements which were not
entered into specifically in connection with the Indebtedness set forth in
clauses (A), (B) or (C) hereof. For purposes of this Agreement, Indebtedness
(other than Contingent Obligations) of the Borrower shall be deemed to include
the Borrower's Share of the Indebtedness of any Investment Affiliate, provided
that such Indebtedness is nonrecourse, both directly and indirectly, to the
Borrower or a Consolidated Subsidiary, and provided further, that if such
Indebtedness is recourse to the Borrower, or a Consolidated Subsidiary, it shall
be treated as Indebtedness to the extent of such recourse for the purposes of
this definition. Notwithstanding the foregoing, amounts available under
construction loans, or other credit facilities not then outstanding shall not be
deemed to be Indebtedness.
"Indemnitee" has the meaning set forth in Section 9.3(b).
----------
"Interest Expense" means, for any period and without duplication, total
----------------
interest expense, whether paid, accrued or capitalized of Borrower, on a
consolidated basis, determined in accordance with GAAP, plus Borrower's Share of
accrued, paid or capitalized interest with respect to any Indebtedness of
Investment Affiliates (in each case, including, without limitation, the interest
component of Capital Leases but excluding interest expense covered by an
interest reserve established under a loan facility such as capitalized
construction interest provided for in a construction loan).
"Interest Period" means: (a) with respect to each Euro-Dollar
---------------
Borrowing, the period commencing on the date of such Borrowing specified in the
Notice of Borrowing or on the date specified in the applicable Notice of
Interest Rate Election and ending one (1), two (2), three (3) or six (6) months
thereafter, and, if acceptable to all of the Banks, ending twelve (12) months
thereafter, as the Borrower may elect in the applicable Notice of Borrowing or
Notice of Interest Rate Election; provided that:
--------
(i) any Interest Period which would otherwise end on a day
which is not a Euro-Dollar Business Day shall be extended to the next succeeding
Euro-Dollar Business Day unless such Euro-Dollar Business Day falls in another
calendar month, in which case such Interest Period shall end on the next
preceding Euro-Dollar Business Day;
15
(ii) any Interest Period which begins on the last Euro-
Dollar 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 Euro-Dollar Business Day of a calendar month; and
(iii) any Interest Period which would otherwise end after the
Maturity Date shall end on the Maturity Date.
(b) with respect to each Money Market LIBOR Loan, the period
commencing on the date of Borrowing specified in the applicable Money Market
Quote Request and ending such number of days thereafter (but not less than
fourteen (14) days or more than one hundred eighty (180) days) as the Borrower
may elect in accordance with Section 2.3; provided, that:
--------
(i) any Interest Period which would otherwise end on a day
which is not a Euro-Dollar Business Day shall be extended to the next succeeding
Euro-Dollar Business Day unless such Euro-Dollar Business Day falls in another
calendar month, in which case such Interest Period shall end on the next
preceding Euro-Dollar Business Day;
(ii) any Interest Period which begins on the last Euro-
Dollar Business Day of a calendar month (or on a day for which there is no
numerically corresponding day in the calendar month at the end of such Interest
Period) shall, subject to clause (iii) below, end on the last Euro-Dollar
Business Day of a calendar month; and
(iii) any Interest Period which would otherwise end after the
Maturity Date shall end on the Maturity Date.
(c) with respect to each Money Market Absolute Rate Loan, the
period commencing on the date of Borrowing specified in the applicable Money
Market Quote Request and ending such number of days thereafter (but not less
than fourteen (14) days or more than one hundred eighty (180) days) as the
Borrower may elect in accordance with Section 2.3; provided that:
--------
(i) any Interest Period which would otherwise end on a day
which is not a Domestic Business Day shall be extended to the next succeeding
Domestic Business Day; and
(ii) any Interest Period which would otherwise end after the
Maturity Date shall end on the Maturity Date.
16
"Interest Rate Contracts" means, collectively, interest rate swap,
-----------------------
collar, cap or similar agreements providing interest rate protection.
"Interest Rate Xxxxxx" has the meaning set forth in Section 5.12.
--------------------
"Investment Affiliate" means any Person in whom CESRRI or Borrower
--------------------
holds more than a twenty percent (20%) equity interest, directly or indirectly,
whose financial results are not consolidated under GAAP with the financial
results of CESRRI or Borrower on the consolidated financial statements of CESRRI
or Borrower.
"Investment Affiliate EBITDA" means, for any period, (i) the Net Income
---------------------------
of an Investment Affiliate for such period, plus (ii) depreciation and
amortization expense and other non-cash items of such Investment Affiliate
deducted in the calculation of Net Income for such period, plus (iii) total
interest expense, whether paid, accrued or capitalized, of such Investment
Affiliate deducted in the calculation of Net Income for such period, plus (iv)
Taxes of such Investment Affiliate deducted in the calculation of Net Income for
such period, minus (v) the gains (and plus the losses) from extraordinary items
or asset sales or write-ups or forgiveness of indebtedness included in the
calculation of Net Income, for such period, all of the foregoing without
duplication.
"Investment Grade Ratings" means at least two (2) ratings for
------------------------
Borrower's or CESRRI's senior unsecured debt, one of which must be a rating of
BBB- or higher by S&P or a rating of Baa3 or higher by Xxxxx'x, and the other of
which must be an equivalent rating of BBB- or Baa3 or higher, provided that, in
the absence of such ratings of Borrower's or CESRRI's, as applicable, senior
unsecured debt, two (2) comparable ratings, as determined by the Administrative
Agent, assigned by the Rating Agencies to CESRRI's preferred stock (at least one
of which must be a comparable rating from Xxxxx'x or S&P) will be deemed to
constitute the Investment Grade Ratings.
"Investment Mortgages" means mortgages securing Indebtedness directly
--------------------
or indirectly owed to Borrower or any of its Subsidiaries, including
certificates of interest in real estate mortgage investment conduits.
"Invitation for Money Market Quotes" has the meaning set forth in
----------------------------------
Section 2.3(c).
"Land" means unimproved real estate, including future phases of a
----
partially completed project, owned or leased by Borrower for the purpose of
future development of improvements. For purposes of the foregoing definition,
17
"unimproved" shall mean Land on which the construction of building improvements
has not commenced or has been discontinued for a continuous period longer than
sixty (60) days prior to completion.
"Lease-Up Property" means any Property owned by the Borrower or a
-----------------
Consolidated Subsidiary which has been substantially completed within the
preceding one (1) year period and which has not been occupied by tenants under
bona fide leases totalling at least seventy-five percent (75%) of the
residential units in such Property for at least two (2) consecutive Fiscal
Quarters.
"Letter(s) of Credit" has the meaning provided in Section 2.2 (b).
-------------------
"Letter of Credit Collateral" has the meaning provided in Section
---------------------------
6.4(b).
"Letter of Credit Collateral Account" has the meaning provided in
-----------------------------------
Section 6.4(a).
"Letter of Credit Documents" has the meaning provided in Section
--------------------------
2.17(a).
"Letter of Credit Fee" has the meaning provided in Section 2.8(b).
--------------------
"Letter of Credit Usage" means at any time the sum of (i) the aggregate
----------------------
maximum amount available to be drawn under the Letters of Credit then
outstanding, assuming compliance with all requirements for drawing referred to
therein, and (ii) the aggregate amount of the Borrower's unpaid Obligations
under this Agreement in respect of the Letters of Credit.
"Leverage Ratio" means the percentage determined by dividing Borrower
--------------
Debt by Market Value and multiplying the quotient by one hundred percent (100%).
"LIBOR Auction" means a solicitation of Money Market Quotes setting
-------------
forth Money Market Margins based on the London Interbank Offered Rate pursuant
to Section 2.3.
"Lien" means, with respect to any asset, any mortgage, lien, pledge,
----
charge, security interest or encumbrance of any kind, or any other type of
preferential arrangement, in each case that has the effect of creating a
security interest in respect of such asset. For the purposes of this Agreement,
the Borrower or any Consolidated Subsidiary shall be deemed to own subject to a
Lien any asset which it has acquired or holds subject to the interest of a
vendor or lessor under any conditional sale agreement, Capital Lease or other
title retention agreement relating to such asset.
18
"Loan" means a Base Rate Loan, a Euro-Dollar Loan or a Money Market
----
Loan and "Loans" means Base Rate Loans, Euro-Dollar Loans or Money Market Loans
-----
or any combination of the foregoing.
"Loan Availability" means the maximum amount available to be borrowed
-----------------
hereunder in compliance with the covenants contained in Section 5.8(e) and (i),
but in no event to exceed the aggregate Commitments.
"Loan Documents" means this Agreement, the Notes, the Letter(s) of
--------------
Credit and the Letter of Credit Documents.
"London Interbank Offered Rate" has the meaning set forth in Section
-----------------------------
2.7(b).
"Margin Stock" shall have the meaning provided such term in Regulation
------------
U of the Federal Reserve Board.
"Market Value" means the sum of (i) the book value of all Unrestricted
------------
Tangible Assets, plus (ii) for all income-producing residential rental
Properties, other than Lease-Up Properties, owned and operated by the Borrower
or a Consolidated Subsidiary for at least two (2) consecutive Fiscal Quarters
but less than four (4) consecutive Fiscal Quarters, the estimated market value
thereof, as determined by dividing the annualized aggregate Net Operating Income
for such Properties for the number of Fiscal Quarters actually owned, less the
Capital Reserve for such Properties, by an eight and three-quarters percent
(8.75%) capitalization rate, plus (iii) for all income-producing residential
rental Properties, other than Lease-Up Properties, owned and operated by the
Borrower or a Consolidated Subsidiary for four (4) Fiscal Quarters or more, the
estimated Market Value thereof, as determined by dividing the aggregate Net
Operating Income for such Properties for the immediately preceding four (4)
Fiscal Quarters, less the Capital Reserve for such Properties, by an eight and
three-quarters percent (8.75%) capitalization rate, plus (iv) for all income-
producing retail Properties owned and operated by the Borrower or a Consolidated
Subsidiary for at least two (2) consecutive Fiscal Quarters but less than four
(4) consecutive Fiscal Quarters, the estimated market value thereof, as
determined by dividing the annualized aggregate Net Operating Income for such
Properties for the number of Fiscal Quarters actually owned, less the Retail
Capital Reserve Reduction Amount for such Properties, by a ten percent (10%)
capitalization rate, plus (v) for all income-producing retail Properties owned
and operated by the Borrower or a Consolidated Subsidiary for four (4) Fiscal
Quarters or more, the estimated market value thereof, as determined by dividing
the aggregate Net Operating Income for such
19
Properties for the immediately preceding four (4) Fiscal Quarters, less the
Retail Capital Reserve Reduction Amount for such Properties, by a ten percent
(10%) capitalization rate, plus (vi) for any acquired Properties owned and
operated by the Borrower or a Consolidated Subsidiary for a period of less than
two (2) consecutive Fiscal Quarters, the Aggregate Purchase Price for such
Properties, plus (vii) for the Property Service Businesses, the estimated market
value thereof, determined by dividing the Property Service Business EBITDA for
each of the Property Service Businesses for the immediately preceding four (4)
Fiscal Quarters by a fourteen percent (14%) capitalization rate, plus (viii) the
value of each Lease-Up Property and of all Properties which are not revenue
generating, such as Land and Properties under Development, based upon the value
thereof as determined in accordance with GAAP, plus (ix) Borrower's Share of the
estimated market value of any Property owned by any Investment Affiliate
determined based upon the status of such Property in accordance with the
applicable preceding subparagraphs (ii) through (viii).
"Material Adverse Effect" means an effect resulting from any
-----------------------
circumstance or event or series of circumstances or events, of whatever nature
(but excluding general economic conditions), which does or could reasonably be
expected to, materially and adversely (i) effect the business, operations,
properties, assets or financial condition of Borrower and its Consolidated
Subsidiaries taken as a whole, (ii) impair the ability of Borrower and its
Consolidated Subsidiaries, taken as a whole, to perform their respective
obligations under the Loan Documents, or (iii) cause a Default under Sections
5.8, 5.9 or 5.13.
"Material Plan" means at any time a Plan or Plans having aggregate
-------------
Unfunded Liabilities in excess of $5,000,000.
"Materials of Environmental Concern" means and includes pollutants,
----------------------------------
contaminants, hazardous wastes, toxic and hazardous substances, asbestos, lead,
petroleum and petroleum by-products.
"Maturity Date" shall mean the date when all of the Obligations
-------------
hereunder shall be due and payable, which date shall be February 4, 2004, or, if
properly extended in accordance with Section 2.9, February 4, 2005, unless
accelerated pursuant to the terms hereof.
"Minimum Equity Value" means an amount not less than One Billion Two
--------------------
Hundred Million Dollars ($1,200,000,000) plus seventy-five percent (75%) of Net
Offering Proceeds received by CESRRI or Borrower after the Effective Date, to be
adjusted on the last day of each fiscal year as provided in Section 5.8(b).
20
"Money Market Absolute Rate" has the meaning set forth in Section
--------------------------
2.3(d) (ii)(D).
"Money Market Absolute Rate Loan" means a Loan to be made by a Bank
-------------------------------
pursuant to an Absolute Rate Auction.
"Money Market Borrowing" has the meaning set forth in Section 1.3.
----------------------
"Money Market Lending Office" means, as to each Bank, its Domestic
---------------------------
Lending Office or such other office, branch or affiliate of such Bank as it may
hereafter designate as its Money Market Lending Office by notice to the Borrower
and the Administrative Agent; provided that any Bank may from time to time by
--------
notice to the Borrower and the Administrative Agent designate separate Money
Market Lending Offices for its Money Market LIBOR Loans, on the one hand, and
its Money Market Absolute Rate Loans, on the other hand, in which case all
references herein to the Money Market Lending Office of such Bank shall be
deemed to refer to either or both of such offices, as the context may require.
"Money Market LIBOR Loan" means a Loan to be made by a Bank pursuant to
-----------------------
a LIBOR Auction (including such a Loan bearing interest at the Base Rate
pursuant to Article VIII).
"Money Market Loan" means a Money Market LIBOR Loan or a Money Market
-----------------
Absolute Rate Loan.
"Money Market Margin" has the meaning set forth in Section 2.3 (d)
-------------------
(ii)(C).
"Money Market Quote" means an offer by a Bank to make a Money Market
------------------
Loan in accordance with Section 2.3.
"Money Market Quote Request" has the meaning set forth in Section
--------------------------
2.3(b).
"Moody's" means Xxxxx'x Investors Service, Inc. or any successor
-------
thereto.
"Mortgage Constant Debt Service" means the principal and interest
------------------------------
payments due based upon an eight and one-half percent (8.5%) mortgage constant
multiplied by the amount of the Unsecured Debt.
"Multiemplover Plan" means at any time an employee pension benefit plan
------------------
within the meaning of Section 4001 (a) (3) of ERISA to which any member of the
ERISA Group is then making or accruing an obligation to make contributions or
21
has within the preceding five plan years made contributions, including for these
purposes any Person which ceased to be a member of the ERISA Group during such
five year period.
"Net Income" means, for any period, the net earnings (or loss) after
----------
Taxes of the applicable Person, on a consolidated basis, for such period,
calculated in conformity with GAAP.
"Net Offering Proceeds" means, without duplication, (a) all cash
---------------------
proceeds received by CESRRI as a result of the sale of common, preferred or
other classes of stock in CESRRI (if and only to the extent reflected in
stockholders' equity on the consolidated balance sheet of CESRRI prepared in
accordance with GAAP) less customary costs and discounts of issuance paid by
----
CESRRI, all of which proceeds shall have been concurrently contributed by CESRRI
to Borrower as additional capital, plus (b) all cash and the fair market value
----
of the net equity of all properties contributed to Borrower by one or more
Persons in exchange for limited partnership interests in Borrower or shares of
CESRRI, less customary costs and discounts of issuance and reasonable and
customary transaction expenses paid by Borrower.
"Net Operating Income" means, for any period with respect to any
--------------------
Property owned by Borrower, any Consolidated Subsidiary or any Investment
Affiliate, the net operating income of such Property for such period (i)
determined in accordance with GAAP, (ii) determined in accordance with the past
practices of Borrower, (iii) inclusive of an allocation of reasonable management
fees and administrative costs to each Property, (iv) inclusive of all ground
lease payments, (v) exclusive of any deduction for depreciation, amortization,
or Interest Expense and (vi) exclusive of any material items of a non-recurring
nature which must be excluded in accordance with GAAP.
"Net Present Value" shall mean, as to a specified or ascertainable
-----------------
dollar amount, the present value, as of the date of calculation of any such
amount using a discount rate equal to the Base Rate in effect as of the date of
such calculation.
"Non-Apartment Properties" means Properties that are direct or
------------------------
indirect interests in income-producing real estate which are not operated as
primarily multifamily residential properties.
"Non-Excluded Taxes" has the meaning set forth in Section 8.4(a).
------------------
"Non-Recourse Indebtedness" means Indebtedness with respect to which
-------------------------
recourse to the Borrower or its Consolidated Subsidiaries for payment is limited
to specific assets of such entities related to a particular Property or group of
22
Properties encumbered by a Lien securing such Indebtedness provided, however,
that personal recourse of Borrower or any of its Consolidated Subsidiaries for
any such Indebtedness for fraud, misrepresentation, misapplication of cash,
waste, environmental claims and liabilities and other circumstances customarily
excluded by institutional lenders from exculpation provisions and/or included in
separate indemnification agreements in non-recourse financing of real estate
shall not, by itself, prevent such Indebtedness from being characterized as Non-
Recourse Indebtedness.
"Notes" means promissory notes of the Borrower, substantially in the
-----
forms of Exhibit A-1 and Exhibit A-2 hereto, evidencing the obligation of the
Borrower to repay the Loans, and "Note" means any one of such promissory notes
issued hereunder.
"Notice of Borrowing" means a Notice of Borrowing (as defined in
-------------------
Section 2.4(a)).
"Notice of Interest Rate Election" has the meaning set forth in
--------------------------------
Section 2.6.
"Notice of Money Market Borrowing" has the meaning set forth in
--------------------------------
Section 2.3(f).
"Obligations" means all obligations, liabilities, indemnity
-----------
obligations and Indebtedness of every nature of the Borrower, from time to time
owing to Administrative Agent or any Bank under or in connection with this
Agreement or any other Loan Document.
"$100,000,000 Credit Agreement" means that certain Credit Agreement
-----------------------------
($100,000,000 Revolving Line of Credit) of even date herewith among the Borrower
and certain Banks (as defined therein) providing for loans from such Banks to
the Borrower in the amount of up to One Hundred Million Dollars ($100,000,000),
as the same may be amended, supplemented or otherwise modified from time to
time.
"Other Taxes" has the meaning set forth in Section 8.4(b).
-----------
"Other Indebtedness" means all Indebtedness other than the
------------------
Obligations.
"OP Units" means partnership interests of any kind in the Borrower.
--------
"PNC" means PNC Bank, National Association.
---
"Parent" means, with respect to any Bank, any Person controlling such
------
23
Bank.
"Participant" has the meaning set forth in Section 9.6(b).
-----------
"PBGC" means the Pension Benefit Guaranty Corporation or any entity
----
succeeding to any or all of its functions under ERISA.
"Permit" means any permit, approval, authorization, license, variance
------
or permission required from a Governmental Authority under an applicable
Requirement of Law.
"Permitted Investments" shall have the meaning ascribed thereto in
---------------------
Section 5.8(g).
"Permitted Liens" means:
---------------
a. Liens for Taxes, assessments or other governmental charges
not yet due and payable or which are being contested in good faith by
appropriate proceedings promptly instituted and diligently conducted in
accordance with the terms hereof;
b. statutory Liens of carriers, warehousemen, mechanics,
materialmen and other similar Liens imposed by law, which are incurred in the
ordinary course of business for sums not more than sixty (60) days delinquent or
which are being contested in good faith in accordance with the terms hereof;
c. deposits made in the ordinary course of business to secure
liabilities to insurance carriers;
d. Liens for purchase money obligations for equipment in the
ordinary course of business; provided that (i) the Indebtedness secured by any
--------
such Lien does not exceed the purchase price of such equipment, (ii) any such
Lien encumbers only the asset so purchased and the proceeds upon sale,
disposition, loss or destruction thereof, and (iii) such Lien, after giving
effect to the Indebtedness secured thereby, does not give rise to an Event of
Default;
e. easements, rights-of-way, zoning restrictions, other similar
charges or encumbrances and all other items listed on Schedule B to Borrower's
or a Consolidated Subsidiary's owner's title insurance policies, except in
connection with any Indebtedness, for any of Borrower's or a Consolidated
Subsidiary's Real Property Assets, so long as the foregoing do not interfere in
any material respect with the use or ordinary conduct of the business of
Borrower or
24
the applicable Consolidated Subsidiary, and do not diminish in any material
respect the value of the Property to which it is attached or for which it is
listed;
f. Liens and judgments which have been or will be bonded over or
released of record within thirty (30) days after the date such Lien or judgment
is entered or filed against CESRRI, Borrower, or any Subsidiary;
g. Liens on Property of the Borrower or its Subsidiaries (other than
any Qualifying Unencumbered Property) securing Indebtedness which may be
incurred or remain outstanding without resulting in an Event of Default
hereunder; and
h. Liens in the form of a deed of trust for the benefit of the
Borrower or any Wholly-Owned Consolidated Subsidiary against any Property of any
other Wholly-Owned Consolidated Subsidiary of the Borrower, provided that (i)
the Property is located in the District of Columbia or, if located outside of
the District of Columbia, the deed of trust shall be released within ninety (90)
days following the filing thereof, (ii) the amount secured by all such Liens
does not exceed twenty percent (20%) of the Unencumbered Asset Value, (iii) the
secured indebtedness secured by such Liens, and the ownership interests of any
Wholly-Owned Consolidated Subsidiary holding such secured indebtedness, shall
not be subject to any rights, liens or security interests of any other party,
(iv) any Wholly-Owned Consolidated Subsidiary holding any such secured
indebtedness shall be in compliance with Section 5.19 hereof, (v) each such Lien
shall be subject to an agreement between the Wholly-Owned Consolidated
Subsidiary owning such Lien and the Administrative Agent on behalf of the Banks,
which shall provide (A) for the delivery to the Administrative Agent of duly-
executed releases of such Lien in recordable form to be held by the
Administrative Agent in accordance with the provisions of such agreement, (B)
that such Lien shall automatically be and become null and void upon the
occurrence of an Event of Default described in Section 6.1(f) or (g) and that
the Administrative Agent shall immediately thereafter record such releases, (C)
that such Lien shall be and become null and void upon the occurrence of an Event
of Default described in Section 6.1(a) or (h) or following an acceleration of
the Obligations and the Administrative Agent shall immediately thereafter record
such releases, unless the Required Banks shall elect to permit such Lien to
remain effective within five (5) Domestic Business Days following the occurrence
of such Event of Default or acceleration of the Obligations and (D) for the
notation of the existence of such agreement on the instrument or instruments
evidencing the indebtedness secured by such Lien, and (vi) the Borrower shall
deliver to the Administrative Agent such evidence of compliance with the
foregoing requirements as the Administrative Agent shall reasonably request.
"Permitted Recourse Debt" means Secured Debt which is also Recourse Debt.
-----------------------
"Person" means an individual, a corporation, a partnership, an
------
association, a trust or any other entity or organization, including a government
or political subdivision or an agency or instrumentality thereof.
25
"Plan" means at any time an employee pension benefit plan (other than a
----
Multiemployer Plan) which is covered by Title IV of ERISA or subject to the
minimum funding standards under Section 412 of the Code and either (i) is
maintained, or contributed to, by any member of the ERISA Group for employees of
any member of the ERISA Group or (ii) has at any time within the preceding five
years been maintained, or contributed to, by any Person which was at such time a
member of the ERISA Group for employees of any Person which was at such time a
member of the ERISA Group.
"Prime Rate" means the rate of interest publicly announced by the
----------
Administrative Agent in Pittsburgh, Pennsylvania, from time to time as its Prime
Rate.
"Properties Under Development" means Properties the primary purpose of
----------------------------
which is to be residential rental owned by the Borrower, a Consolidated
Subsidiary or an Investment Affiliate and on which the Borrower, a Consolidated
Subsidiary or an Investment Affiliate has commenced and continues to pursue
construction of a building or other improvements; provided that any such
Property will no longer be considered a Property under Development when
seventy-five percent (75%) of the rental units contained therein are occupied by
tenants under leases.
"Property" means, with respect to any Person, any real or personal
--------
property, building, facility, structure, equipment or unit, or other tangible
asset owned by such Person.
"Property Purchase Contract Obligations" means the Aggregate Purchase
--------------------------------------
Price to be paid under purchase agreements for Properties to be developed by any
Person other than Borrower or any Consolidated Subsidiary and to be acquired by
Borrower or any Consolidated Subsidiary following completion of construction of
the improvements, provided that a Property Purchase Contract Obligation shall be
deemed to exist upon the execution of the applicable purchase agreement. The
Property Purchase Contract Obligation shall be deemed to have terminated upon
final closing of the applicable purchase transaction and when seventy-five
percent (75%) of the rental units contained therein are occupied by tenants
under leases.
"Property Service Business" means any Person primarily engaged in
-------------------------
providing services related to real estate properties, including, without
limitation, Xxxxx Realty Company, Consolidated Engineering, and Xxxxx Management
Construction, Inc., so long as the Borrower shall own fifty-one percent (51%) or
more of the economic interests therein.
26
"Property Service Business Unsecured Debt" means Indebtedness of any
----------------------------------------
Property Service Business which is not Secured Debt, and for which there is no
recourse to the Borrower or any of its other Consolidated Subsidiaries.
"Property Service Business EBITDA" means, for any period (i) Net Income
--------------------------------
for such Property Service Business for such period, plus (ii) depreciation and
amortization expense and other non-cash items deducted in the calculation of Net
Income for such period, plus (iii) Interest Expense deducted in the calculation
of Net Income for such period, plus (iv) Taxes deducted in the calculation of
Net Income for such period, minus (v) the gains (and plus the losses) from
extraordinary items or asset sales or write-ups or forgiveness of indebtedness
included in the calculation of Net Income, for such period, all of the foregoing
without duplication.
"Qualifying Ground Lease" means (i) the leases described on Exhibit N
-----------------------
and (ii) any lease (a) which is a direct ground lease (or indirect ground lease,
so long as each ground lease in the chain of title meets the following criteria)
granted by the fee owner of real property, (b) which may be transferred and/or
assigned without the consent of the lessor, (c) which has a remaining term
(including any renewal terms exercisable at the sole option of the lessee) of at
least thirty (30) years, (d) under which no material default has occurred and is
continuing, (e) with respect to which a security interest may be granted without
the consent of the lessor, and (f) which contains reasonably customary lender
protection provisions, including, without limitation, provisions to the effect
that (A) the lessor shall notify a first-lien holder of a security interest in
such lease of the occurrence of any default by the lessee under such lease and
shall afford such holder the right to cure such default; and (B) in the event
that such lease is terminated, such first-lien holder shall have the option to
enter into a new lease having terms substantially identical to those contained
in the terminated lease. Upon submission to Administrative Agent of a ground
lease pursuant to Section 5.14, the Administrative Agent shall notify Borrower
within five (5) Domestic Business Days if it determines that the ground lease
does not constitute a Qualifying Ground Lease and, if it does not, whether it is
willing to waive such non-compliance.
"Qualifying Unencumbered Property" means any Property from time to time
--------------------------------
which (i) is an operating and primarily multi-family residential Property
wholly-owned in fee simple absolute by Borrower, or a Wholly-Owned Consolidated
Subsidiary, provided that the ownership interest in any such Property may be
held pursuant to a Qualifying Ground Lease, (ii) is not subject (nor are any
equity interests in such Property subject) to a Lien which secures Indebtedness
of any
27
Person other than Permitted Liens, or to any agreement which, with the passage
of time or the occurrence of any condition, would result in a Lien which secures
Indebtedness of any Person other than Permitted Liens, (iii) is not subject (nor
are any equity interests in such Property subject) to any covenant, condition,
or other restriction which prohibits or limits the sale of, or the creation or
assumption of any Lien upon such Property, except for any Restricted Asset as
long as the Restricted Asset Penalties do not exceed the limitations set forth
in (x) below, and also provided that a general limitation on the amount of
Secured Debt which may be incurred or certain ratios relating to Secured Debt
shall not be construed to constitute a covenant, condition or other restriction
which prohibits or limits the creation or assumption of any Lien on such
Property, (iv) shall be an institutional-class Property, (v) shall have been
substantially completed, shall be free from all material structural and title
defects and shall not be subject to any material renovation project, as
certified in writing by the Borrower to the Administrative Agent, provided that,
notwithstanding the foregoing, a Property which constitutes a Property under
Development may constitute a Qualifying Unencumbered Property as long as it
satisfies the other requirements hereof and as long as such Properties in the
aggregate do not exceed fifteen percent (15%) of the Unencumbered Asset Value,
and provided that Qualifying Unencumbered Properties which constitute Properties
under Development and Qualifying Unencumbered Properties which constitute Lease-
Up Properties shall not, in the aggregate, exceed twenty percent (20%) of the
Unencumbered Asset Value, (vi) shall be free from any Materials of Environmental
Concern, in violation of any Environmental Laws, as certified in writing by the
Borrower to the Administrative Agent and, if requested by Administrative Agent,
as verified by an environmental assessment report obtained by Borrower at time
of acquisition or any other time which report may be from Consolidated
Engineering, provided that, if such report is provided by Consolidated
Engineering, the Administrative Agent shall have the right, at Borrower's
expense, to cause such report to be reviewed and approved by an independent
environmental firm selected by the Administrative Agent, (vii) is occupied by
tenants under bona fide leases occupying at least eighty-five percent (85%) of
the residential units, provided that Properties which are less than eighty-five
percent (85%) occupied may be included as Qualifying Unencumbered Properties, as
long as such Properties do not exceed twenty percent (20%) of Unencumbered Asset
Value, and provided further that Lease-Up Properties or Properties Under
Development shall not be subject to the foregoing limitation or included in the
calculation thereof, (viii) does not, in the case of any single Property,
represent more than twenty-five percent (25%) of the Unencumbered Asset Value,
except for any Property approved by the Required Banks, (ix) is located in an
Approved CMSA, and (x) may constitute a Restricted Asset, provided, however, a
Property shall not constitute a Qualifying Unencumbered Property to the extent
that the addition of such Property to the Qualifying Unencumbered
28
Properties would cause the Restricted Asset Penalties to exceed seven and one-
half percent (7.5%) of the Unencumbered Asset Value. Notwithstanding the
foregoing limitations, any other Property shall constitute a Qualifying
Unencumbered Property if it has been so approved by the Required Banks in their
sole and absolute discretion.
"Rating Agencies" means, collectively, S&P, Xxxxx'x, Fitch Investors
---------------
Services, L.P. and any other rating agency proposed by the Borrower and
acceptable to the Administrative Agent in its reasonable discretion.
"Real Property Assets" means as of any time, the real property assets
--------------------
(including interests in participating mortgages in which the Borrower's interest
therein is characterized as equity according to GAAP) owned directly or
indirectly by the Borrower and the Consolidated Subsidiaries at such time.
"Recourse Debt" shall mean Indebtedness that is not Non-Recourse
-------------
Indebtedness.
"Regulation U" means Regulation U of the Board of Governors of the
------------
Federal Reserve System, as in effect from time to time.
"Required Banks" means at any time (a) prior to the termination of the
--------------
Commitments, Banks having in excess of sixty-one percent (61%) of the aggregate
amount of the Commitments, and (b) following the termination of the Commitments,
Banks owed portions of the Obligations in excess of sixty-one percent (61%) of
the aggregate outstanding Obligations.
"Requirements of Law" means as to any Person, the charter and by-laws,
-------------------
partnership agreement or other organizational or governing documents of such
Person, and any law, rule or regulation, permit, or determination of an
arbitrator or a court or other Governmental Authority, in each case binding upon
such Person or any of its property or to which such Person or any of its
property is subject, including, without limitation, the Securities Act of 1933,
the Securities Exchange Act of 1934, Regulations T, U and X of the Federal
Reserve Board, FIRREA and any certificate of occupancy, zoning ordinance,
building, environmental or land use requirement or Permit or occupational safety
or health law, rule or regulation.
"Restricted Asset" means a Real Property Asset with respect to which
----------------
Borrower or any Wholly-Owned Consolidated Subsidiary has agreed that it would,
upon a sale or other transfer of such Real Property Asset, be obligated to pay a
Restricted Asset Penalty.
29
"Restricted Asset Penalty" means the estimated amount of any
------------------------
contractual liability of Borrower or a Wholly-Owned Consolidated Subsidiary
which would be owed to the prior owner, or the principals of the prior owner, of
the applicable Real Property Asset in the event of a sale or other transfer of
such Qualifying Unencumbered Property as reasonably determined by Borrower. In
the event that the Restricted Asset Penalty is to be determined based upon the
tax liability of the prior owner, or the principals of the prior owner,
resulting from any such sale or other transfer, the Restricted Asset Penalty
shall equal the maximum total taxable gain which could be recognized as a result
of any such sale or other transfer times a tax rate of forty percent (40%) as
calculated by Borrower and certified as true and correct to the Administrative
Agent. The Restricted Asset Penalty shall be calculated at the time that a
Restricted Asset becomes a Qualifying Unencumbered Property and thereafter once
annually by March 31 of each calendar year, and the aggregate Restricted Asset
Penalties shall be recalculated in each quarterly Compliance Certificate as
Restricted Assets are added or removed.
"Retail Capital Reserve" means for any period, $.0425 per square foot
----------------------
of retail improvements for each Fiscal Quarter to occur during such period (in
connection with any annualized calculation, the Retail Capital Reserve shall
also be annualized).
"Retail Capital Reserve Reduction Amount" means the greater of (i) the
---------------------------------------
Retail Capital Reserve for the applicable period, or (ii) the actual Capital
Expenditures incurred for the applicable period (in connection with any
annualized calculation, the Retail Capital Reserve Reduction Amount used in such
calculation shall also be annualized).
"Revolving Credit Notes" means promissory notes of the Borrower,
----------------------
substantially in the form of Exhibit A-2 hereto, evidencing the obligation of
the Borrower to repay Base Rate Loans and Euro-Dollar Loans made by the Banks,
and "Revolving Credit Note" means any one of such promissory notes.
"S&P" means Standard & Poor's Ratings Services, a division of The
---
XxXxxx-Xxxx Companies, Inc., or any successor thereto.
"Secured Debt" means Indebtedness, the payment of which is secured by a
------------
Lien on any Property directly owned or leased by Borrower, or any Consolidated
Subsidiary, or any Investment Affiliate, provided that Secured Debt shall not be
deemed to include any Indebtedness of any Consolidated Subsidiary which is
secured by a Lien in favor of the Borrower or any other Consolidated Subsidiary
against a Property located in the District of Columbia.
30
"Securities" means any stock, shares, voting trust certificates,
----------
general and limited partnership interests, limited liability company interests,
bonds, debentures, notes or other evidences of indebtedness, secured or
unsecured, convertible, subordinated or otherwise, or in general any instruments
commonly known as "securities," or any certificates of interest, shares, or
participation in temporary or interim certificates for the purchase or
acquisition of, or any right to subscribe to, purchase or acquire any of the
foregoing, but shall not include any evidence of the Obligations, provided that
Securities shall not include Cash and Cash Equivalents, Investment Mortgages or
interests in Consolidated Subsidiaries.
"Skyline Retail Property" means that approximately 205,000 square foot
-----------------------
enclosed community retail center located on Route No. 7 in Northern Virginia at
the intersection of the boundaries of Fairfax County, Arlington County and the
City of Alexandria.
"Solvent" means, with respect to any Person, that the fair saleable
-------
value of such Person's assets exceeds the Indebtedness of such Person.
"Subsidiary" means any corporation or other entity of which securities
----------
or other ownership interests having (a) ordinary voting power to elect a
majority of the board of directors or other persons performing similar functions
or having (b) management control of any such entity, are at the time directly or
indirectly owned by the Borrower.
"Taxes" means all federal, state, local and foreign income and gross
-----
receipts taxes.
"Term" has the meaning set forth in Section 2.9(a).
----
"Termination Event" shall mean (i) a "reportable event", as such term
-----------------
is described in Section 4043 of ERISA (other than a "reportable event" not
subject to the provision for 30-day notice to the PBGC), or an event described
in Section 4062(e) of ERISA, (ii) the withdrawal by any member of the ERISA
Group from a Multiemployer Plan during a plan year in which it is a "substantial
employer" (as defined in Section 4001 (a) (2) of ERISA) or the incurrence of
liability by any member of the ERISA Group under Section 4064 of ERISA upon the
termination of a Multi-employer Plan, (iii) the filing of a notice of intent to
terminate any Plan under Section 4041 of ERISA, other than in a standard
termination within the meaning of Section 4041 of ERISA, or the treatment of a
Plan amendment as distress termination under Section 4041 of ERISA, (iv) the
institution by the PBGC of proceedings to terminate, impose liability (other
than for premiums under
31
Section 4007 of ERISA) in respect of, or cause a trustee to be appointed to
administer, any Plan or (v) any other event or condition that might reasonably
constitute grounds for the termination of, or the appointment of a trustee to
administer, any Plan or the imposition of any liability or encumbrance or Lien
on the Real Property Assets or any member of the ERISA Group under ERISA.
"Treasury Rate" means, as of any date, a rate equal to the annual yield
-------------
to maturity on the U.S. Treasury Constant Maturity Series with a ten year
maturity, as such yield is reported in Federal Reserve Statistical Release H.15
-- Selected Interest Rates, published most recently prior to the date the
applicable Treasury Rate is being determined. Such yield shall be determined by
straight line linear interpolation between the yields reported in Release H.15,
if necessary. In the event Release H.15 is no longer published, the
Administrative Agent shall select, in its reasonable discretion, an alternate
basis for the determination of Treasury yield for U.S. Treasury Constant
Maturity Series with ten year maturities.
"Unencumbered Asset Value" means the sum, without duplication, of (i)
------------------------
the estimated market value of all primarily residential rental Qualifying
Unencumbered Properties owned and operated by the Borrower or a Wholly-Owned
Consolidated Subsidiary for at least two (2) consecutive Fiscal Quarters, but
less than four (4) consecutive Fiscal Quarters (except for such Qualifying
Unencumbered Properties described in (iii) and (v) below), as determined by
taking the annualized aggregate Net Operating Income of such Properties for the
number of Fiscal Quarters actually owned, less the Capital Reserve, divided by
an eight and three-quarters percent (8.75%) capitalization rate, (ii) the
estimated market value of all residential rental Qualifying Unencumbered
Properties owned and operated by the Borrower or a Wholly-Owned Consolidated
Subsidiary for four (4) or more consecutive Fiscal Quarters, as determined by
taking the aggregate Net Operating Income of such Properties for the previous
four (4) Fiscal Quarters, less the Capital Reserve, divided by an eight and
three-quarters percent (8.75%) capitalization rate, (iii) the cost of
construction of Qualifying Unencumbered Properties which have been substantially
completed within the previous four (4) Fiscal Quarters, and which are Lease-Up
Properties, (iv) for all acquired residential rental Qualifying Unencumbered
Properties which have been owned by Borrower or a Wholly-Owned Consolidated
Subsidiary for a period of less than two (2) Fiscal Quarters, the Aggregate
Purchase Price thereof, and (v) fifty percent (50%) of the cost of construction
expended to date with respect to Qualifying Unencumbered Properties which
constitute Properties under Development and which are not Lease-Up Properties.
"Unencumbered NOI" means for any period, Net Operating Income from all
----------------
of the Qualifying Unencumbered Properties.
32
"Unfunded Liabilities" means, with respect to any Plan at any time, the
--------------------
amount (if any) by which (a) the value of all benefit liabilities under such
Plan, determined on a plan termination basis using the assumptions prescribed by
the PBGC for the purposes of Section 4044 of ERISA, exceeds (b) the fair market
value of all Plan assets allocable to such liabilities under Title IV of ERISA
(excluding any accrued but unpaid contributions), all determined as of the most
recent valuation date for such Plan, but only to the extent that such excess
represents a potential liability of a member of the ERISA Group to the PBGC or
any other Person under Title IV of ERISA.
"United States" means the United States of America, including the fifty
-------------
states and the District of Columbia.
"Unrestricted Tangible Assets" means (a) the tangible assets of the
----------------------------
Borrower and its Consolidated Subsidiaries as determined in accordance with GAAP
and (b) other assets of the Borrower approved by the Administrative Agent, other
than real estate assets, security deposits, escrow accounts and other reserve
accounts.
"Unsecured Debt" means Indebtedness of Borrower or any Consolidated
--------------
Subsidiary, which is not Secured Debt or Property Service Business Unsecured
Debt.
"Unsecured Debt Service" means, based on the amount of Unsecured Debt
----------------------
outstanding as of the end of the applicable Fiscal Quarter, or other date of
determination, and determined on an annualized basis, the higher of (i) the
actual Interest Expense on Unsecured Debt plus actual principal amortization
(excluding balloon payments due at maturity), (ii) the Assumed Unsecured Debt
Service, or (iii) the Mortgage Constant Debt Service.
"Unsecured Interest Expense" means Interest Expense other than Interest
--------------------------
Expense payable in respect of Secured Debt.
"Unused Commitment" means an amount equal to all unadvanced funds
-----------------
(other than unadvanced funds in connection with any construction loan) which any
third party is obligated to advance to Borrower or another Person or otherwise
pursuant to any loan document, written instrument or otherwise.
"Wholly-Owned Consolidated Subsidiary" means a Consolidated Subsidiary,
------------------------------------
the ownership interests of which are wholly owned by the Borrower, except for
general partnership interests of two percent (2%) or less which are owned by
CESRRI or a wholly-owned subsidiary of CESRRI, as long as the entity owning such
general partnership interests is not the managing general
33
partner of the applicable Wholly-Owned Consolidated Subsidiary.
SECTION 1.2. Accounting Terms and Determinations.
-----------------------------------
Unless otherwise specified herein, all accounting terms used herein
shall be interpreted, all accounting determinations hereunder shall be made, and
all financial statements required to be delivered hereunder shall be prepared in
accordance with GAAP applied on a basis consistent (except for changes concurred
in by the Borrower's independent public accountants) with the most recent
audited consolidated financial statements of CESRRI, Borrower and its
Consolidated Subsidiaries delivered to the Administrative Agent; provided that,
if the Borrower notifies the Administrative Agent the Borrower wishes to amend
any covenant in Article V to eliminate the effect of any change in GAAP on the
operation of such covenant (or if the Administrative Agent notifies the Borrower
that the Required Banks wish to amend Article V for such purpose), then the
Borrower's compliance with such covenant shall be determined on the basis of
GAAP in effect immediately before the relevant change in GAAP became effective,
until either such notice is withdrawn or such covenant is amended in a manner
reasonably satisfactory to the Borrower and the Required Banks. The financial
results of any Person in whom CESRRI or Borrower holds, directly or indirectly,
an equity interest of twenty percent (20%) or less shall be disregarded for all
purposes.
SECTION 1.3. Types of Borrowings.
-------------------
The term "Borrowing" denotes the aggregation of Loans of one or more
Banks to be made to the Borrower pursuant to Article II on the same date, all of
which Loans are of the same type (subject to Article VIII) and, except in the
case of Base Rate Loans, have the same initial Interest Period. Borrowings are
classified for purposes of this Agreement either by reference to the pricing of
Loans comprising such Borrowing (e.g., a "Fixed Rate Borrowing" is a Euro-Dollar
Borrowing or a Money Market Borrowing (excluding any such Borrowing consisting
of Money Market Loans bearing interest at the Base Rate pursuant to Article
VIII), and a "Euro-Dollar Borrowing" is a Borrowing comprised of Euro-Dollar
Loans) or by reference to the provisions of Article II under which participation
therein is determined (i.e., a "Committed Borrowing" is a Borrowing under
Section 2.1 in which all Banks participate in proportion to their Commitments,
while a "Money Market Borrowing" is a Borrowing under Section 2.3 in which a
Bank's share is determined on the basis of its bid in accordance therewith).
ARTICLE II
34
THE CREDITS
SECTION 2.1. Commitments to Lend.
-------------------
(a) Each Bank severally agrees, on the terms and conditions set forth
in this Agreement, to make Loans to the Borrower and participate in Letters of
Credit issued by the Fronting Bank on behalf of the Banks pursuant to this
Article II from time to time during the term hereof in amounts such that the
aggregate principal amount of Committed Loans by such Bank at any one time
outstanding together with such Bank's pro rata share of the Letter of Credit
Usage shall not exceed the amount of its Commitment, provided that in no event
shall the aggregate amount of the Loans then outstanding and Letter of Credit
Usage, exceed the Loan Availability. Each Borrowing under this Section 2.1 shall
be in an aggregate principal amount of $1,000,000 or an integral multiple of
$100,000 in excess thereof (except that any such Borrowing may be in the
aggregate amount available in accordance with Section 3.2(b) or in any amount
required to reimburse the Fronting Bank for any drawing under any Letter of
Credit) and, other than with respect to Money Market Loans, shall be made from
the several Banks ratably in proportion to their respective Commitments. Subject
to the limitations set forth herein, any amounts repaid may be reborrowed.
(b) If at any time the outstanding principal balance of the Loans and
the Letter of Credit Usage exceeds the Loan Availability, Borrower shall submit
to the Administrative Agent, not later than fifteen (15) days following written
notice from the Administrative Agent to Borrower (which notice Administrative
Agent shall send to the Borrower promptly following receipt of a Compliance
Certificate reflecting such excess borrowing condition, and copy of which notice
shall be sent promptly by the Administrative Agent to each Bank) of the
existence of such excess borrowing condition, a written plan pursuant to which
Borrower shall cause such excess borrowing condition to be eliminated not later
than thirty (30) days following such notice from the Administrative Agent to the
Borrower, through one or both of the following means: Borrower shall (A) pay to
the Administrative Agent such amounts and/or (B) designate to the Administrative
Agent such additional Qualifying Unencumbered Properties as may be acceptable
under Section 5.14 as are necessary so that the outstanding principal balance of
the Loans and the Letter of Credit Usage does not exceed the Loan Availability.
Failure by Borrower to have complied with the foregoing in a timely manner shall
constitute an Event of Default without further notice or grace period hereunder.
No further Borrowings shall be permitted, and the Borrower shall not cause or
allow any existing Qualifying Unencumbered Property to no longer be a Qualifying
Unencumbered Property, so long as such excess borrowing condition shall continue
to exist. Nothing in this Section 2.1(b) shall excuse Borrower's
35
compliance with all terms, conditions, covenants and other obligations imposed
upon it under the Loan Documents during the period of such excess borrowing, nor
in any manner condition or impair the Banks' rights thereunder in respect of any
such breach thereof by Borrower.
SECTION 2.2. Notice of Borrowing.
-------------------
(a) The Borrower shall give Administrative Agent notice not
later than 10:00 a.m. Pittsburgh time (x) one (1) Domestic Business Day before
each Base Rate Borrowing, or (y) two (2) Euro-Dollar Business Days before each
Euro-Dollar Borrowing, specifying:
(i) the date of such Borrowing, which shall be a Domestic
Business Day in the case of a Base Rate Borrowing or a Euro-Dollar Business Day
in the case of a Euro-Dollar Borrowing or a combination thereof,
(ii) the aggregate amount of such Borrowing,
(iii) whether the Loans comprising such Borrowing are to be
Base Rate Loans or Euro-Dollar Loans,
(iv) in the case of a Euro-Dollar Borrowing, the duration
of the Interest Period applicable thereto, subject to the provisions of the
definition of Interest Period,
(v) to which account of Borrower the funds are to be
directed, and
(vi) the proposed use of the Borrowing.
(b) Borrower shall give the Administrative Agent, and the
designated Fronting Bank, written notice in the event that it desires to have
Letters of Credit (each, a "Letter of Credit") issued hereunder no later than
10:00 a.m., Pittsburgh time, at least four (4) Domestic Business Days prior to
the date of such issuance. Each such notice shall specify (i) the designated
Fronting Bank, (ii) the aggregate amount of the requested Letters of Credit,
(iii) the individual amount of each requested Letter of Credit and the number of
Letters of Credit to be issued, (iv) the date of such issuance (which shall be a
Domestic Business Day), (v) the name and address of the beneficiary, (vi) the
expiration date, including all available extension options, of the Letter of
Credit (which in no event shall be later than twelve (12) months after the
issuance of such Letter of Credit or the Maturity Date, whichever is earlier),
(vii) the purpose and circumstances for
36
which such Letter of Credit is being issued and (viii) the terms upon which each
such Letter of Credit may be drawn down (which terms shall not leave any
discretion to Fronting Bank), including, if available, a proposed form of the
Letter of Credit. Each such notice may be revoked telephonically by the Borrower
to the applicable Fronting Bank and the Administrative Agent any time prior to
the date of issuance of the Letter of Credit by the applicable Fronting Bank,
provided such revocation is confirmed in writing by the Borrower to the Fronting
Bank and the Administrative Agent within one (1) Domestic Business Day by
facsimile. No later than 10:00 a.m., Pittsburgh time, on the date that is four
(4) Domestic Business Days prior to the date of issuance, the Borrower shall
specify a precise description of the documents and the verbatim text of any
certificate to be presented by the beneficiary of such Letter of Credit, which
if presented by such beneficiary prior to the expiration date of the Letter of
Credit would require the Fronting Bank to make a payment under the Letter of
Credit; provided, that Fronting Bank may, in its reasonable judgment, require
changes in any such documents and certificates only in conformity with customary
and commercially reasonable practice or law and, provided further, that no
Letter of Credit shall require payment against a conforming draft to be made
thereunder before the third Domestic Business Day following the date that such
draft is presented if such presentation is made later than 10:00 A.M. Pittsburgh
time. The Borrower shall further deliver to the Fronting Bank such additional
instruments and documents as the Fronting Bank may reasonably require in
conformity with the commercially reasonable practices of its letter of credit
department, in connection with the issuance of such Letter of Credit. At the
time that each Letter of Credit is issued, Borrower shall pay to the
Administrative Agent for the benefit of Fronting Bank an issuance fee, to be
retained by the Fronting Bank with no obligation to share with any other Bank,
with respect to each Letter of Credit issued in an amount equal to Five Hundred
Dollars ($500). In determining whether to pay on such Letter of Credit, the
Fronting Bank shall be responsible only to determine that the documents and
certificates required to be delivered under the Letter of Credit have been
delivered and that they substantially comply on their face with the requirements
of that Letter of Credit.
SECTION 2.3. Money Market Borrowings.
-----------------------
(a) The Money Market Option. From time to time during the Term,
-----------------------
and provided that at such time either Borrower or CESRRI maintains the
Investment Grade Ratings, the Borrower may, as set forth in this Section 2.3,
request the Banks during the Term to make offers to make Money Market Loans to
the Borrower, provided that the aggregate amount of Money Market Loans shall not
exceed, at any time, the lesser of (i) $5,000,000 in the aggregate outstanding,
and (ii) (A) the lesser of (I) the aggregate Commitments or (II) Loan
Availability, minus (B) all other Loans then outstanding and Letter of Credit
Usage, and (iii) ten
37
percent (10%) of the lesser of (A) the aggregate Commitments or (B) Loan
Availability. Subject to the provisions of this Agreement, the Borrower may
repay any outstanding Money Market Loan only on the last day of the Interest
Period applicable thereto and any amounts so repaid may be reborrowed, up to the
amount available under this Section 2.3 or under Section 2.1, as applicable, at
the time of such Borrowing, until the Domestic Business Day next preceding the
Maturity Date. The Banks may, but shall have no obligation to, make such offers
and the Borrower may, but shall have no obligation to, accept any such offers in
the manner set forth in this Section 2.3.
(b) Money Market Quote Request. When the Borrower wishes to request
--------------------------
offers to make Money Market Loans under this Section 2.3, it shall transmit to
the Administrative Agent by telex or facsimile transmission a Money Market Quote
Request (each, a "Money Market Quote Request") substantially in the form of
Exhibit B hereto so as to be received not later than 10:30 A.M. Pittsburgh time
on (x) the fifth Euro-Dollar Business Day prior to the date of Borrowing
proposed therein, in the case of a LIBOR Auction or (y) the Domestic Business
Day next preceding the date of Borrowing proposed therein, in the case of an
Absolute Rate Auction specifying:
(i) the proposed date of Borrowing, which shall be a Euro-Dollar
Business Day in the case of a LIBOR Auction or a Domestic Business Day in the
case of an Absolute Rate Auction,
(ii) the aggregate amount of such Borrowing, which shall be
$3,000,000 or a larger multiple of $100,000,
(iii) the duration of the Interest Period applicable thereto
(which shall not be less than 14 days or more than 180 days), subject to the
provisions of the definition of Interest Period,
(iv) whether the Money Market Quotes requested are to set forth a
Money Market Margin or a Money Market Absolute Rate,
(v) to which account of Borrower the funds are to be directed,
and
(vi) the proposed use of the Borrowing.
The Borrower may request offers to make Money Market Loans for more than one
Interest Period in a single Money Market Quote Request. No Money Market Quote
Request shall be given within five (5) Euro-Dollar Business Days (or such other
number of days as the Borrower and the Administrative Agent may agree) of any
38
other Money Market Quote Request, and no more than two (2) Money Market Quote
Requests may be submitted within any calendar month. There shall be no more than
five (5) Money Market Loans outstanding at any one time. To the extent that any
such Borrowing would result in the outstanding Loans exceeding Loan
Availability, as based upon the most recent Compliance Certificate but also
taking into account additional Unsecured Debt which has been incurred subsequent
to the most recent Compliance Certificate, a Compliance Certificate in
accordance with Section 5.8(l) shall be delivered with the applicable Money
Market Loan Request.
(c) Invitation for Money Market Quotes. Promptly upon
----------------------------------
receipt of a Money Market Quote Request, the Administrative Agent shall send to
the Banks by telex or facsimile transmission an Invitation for Money Market
Quotes (each, an "Invitation for Money Market Quote") substantially in the form
of Exhibit C hereto or such replacement form as may be delivered by the
Administrative Agent, which shall constitute an invitation by the Borrower to
each Bank to submit Money Market Quotes offering to make the Money Market Loans
to which such Money Market Quote Request relates in accordance with this Section
2.3.
(d) Submission and Contents of Money Market Quotes.
----------------------------------------------
(i) Each Bank may submit a Money Market Quote containing an
offer or offers to make Money Market Loans in response to any Invitation for
Money Market Quotes. Each Money Market Quote must comply with the requirements
of this Section 2.3(d) and must be submitted to the Administrative Agent by
telex or facsimile transmission at its offices specified in or pursuant to
Section 9.1 not later than (x) 2:00 P.M. Pittsburgh time on the fourth Euro-
Dollar Business Day prior to the proposed date of Borrowing, in the case of a
LIBOR Auction or (y) 9:30 A.M. Pittsburgh time on the proposed date of
Borrowing, in the case of an Absolute Rate Auction; provided that Money Market
Quotes submitted by the Administrative Agent (or any affiliate of the
Administrative Agent) in the capacity of a Bank may be submitted, and may only
be submitted, if the Administrative Agent or such affiliate notifies the
Borrower of the terms of the offer or offers contained therein not later than
(x) one hour prior to the deadline for the other Banks, in the case of a LIBOR
Auction or (y) 15 minutes prior to the deadline for the other Banks, in the case
of an Absolute Rate Auction. Subject to Articles III and VI, any Money Market
Quote so made shall be irrevocable except with the written consent of the
Administrative Agent given on the instructions of the Borrower. Such Money
Market Loans may be funded by such Bank's Designated Lender (if any) as provided
in Section 9.6(d), however such Bank shall not be required to specify in its
Money Market Quote whether such Money Market Loans will be funded by such
Designated Lender.
39
(ii) Each Money Market Quote shall be in substantially the form of
Exhibit D hereto and shall in any case specify:
(A) the proposed date of Borrowing,
(B) the principal amount of the Money Market Loan for which
each such offer is being made, which principal amount (w) may be greater than or
less than the Commitment of the quoting Bank, (x) must be $3,000,000 or a larger
multiple of $100,000, (y) may not exceed the principal amount of Money Market
Loans for which offers were requested and (z) may be subject to an aggregate
limitation as to the principal amount of Money Market Loans for which offers
being made by such quoting Bank may be accepted,
(C) in the case of a LIBOR Auction, the margin above or below
the applicable London Interbank Offered Rate (the "Money Market Margin") offered
for each such Money Market Loan, expressed as a percentage (specified to the
nearest 1/10,000th of 1%) to be added to or subtracted from such base rate,
(D) in the case of an Absolute Rate Auction, the fixed rate of
interest per annum (specified to the nearest 1/10,000th of 1%) (the "Money
Market Absolute Rate") offered for each such Money Market Loan, and
(E) the identity of the quoting Bank.
A Money Market Quote may set forth up to five (5) separate offers by the quoting
Bank with respect to each Interest Period specified in the related Invitation
for Money Market Quotes.
(iii) Any Money Market Quote shall be disregarded by the
Administrative Agent if it:
(A) is not substantially in conformity with Exhibit D hereto
or does not specify all of the information required by Section 2.3(d)(ii) above;
(B) contains qualifying, conditional or similar language
(except for an aggregate limitation as provided in Section 2.3(d)(ii)(B) above);
(C) proposes terms other than or in addition to those set
forth in the applicable Invitation for Money Market Quotes; or
(D) arrives after the time set forth in Section 2.3(d)(i).
40
(e) Notice to Borrower. The Administrative Agent shall promptly (and
------------------
in any event within one (1) Domestic Business Day) notify the Borrower in
writing of the terms (x) of any Money Market Quote submitted by a Bank that is
in accordance with Section 2.3(d) and (y) of any Money Market Quote that amends,
modifies or is otherwise inconsistent with a previous Money Market Quote
submitted by such Bank with respect to the same Money Market Quote Request. Any
such subsequent Money Market Quote shall be disregarded by the Administrative
Agent unless such subsequent Money Market Quote is submitted solely to correct a
manifest error in such former Money Market Quote or modifies the terms of such
previous Money Market Quote to provide terms more favorable to Borrower. The
Administrative Agent's notice to the Borrower shall specify (A) the aggregate
principal amount of Money Market Loans for which offers have been received for
each Interest Period specified in the related Money Market Quote Request, (B)
the respective principal amounts and Money Market Margins or Money Market
Absolute Rates, as the case may be, so offered and (C) if applicable,
limitations on the aggregate principal amount of Money Market Loans for which
offers in any single Money Market Quote may be accepted.
(f) Acceptance and Notice by Borrower. Not later than 10:30 A.M.
---------------------------------
Pittsburgh time on (x) the third Euro-Dollar Business Day prior to the proposed
date of Borrowing, in the case of a LIBOR Auction or (y) the proposed date of
Borrowing, in the case of an Absolute Rate Auction, the Borrower shall notify
the Administrative Agent of its acceptance or non-acceptance of the offers
communicated to it pursuant to subsection (e). In the case of acceptance, such
notice (a "Notice of Money Market Borrowing") shall specify the aggregate
principal amount of offers for each Interest Period that are accepted. The
Borrower may accept any Money Market Quote in whole or in part; provided that:
(i) the aggregate principal amount of each Money Market Borrowing
may not exceed the applicable amount set forth in the related Money Market Quote
Request;
(ii) the principal amount of each Money Market Borrowing must be
$3,000,000 or a larger multiple of $100,000;
(iii) acceptance of offers may only be made on the basis of
ascending Money Market Margins or Money Market Absolute Rates, as the case may
be; and
(iv) the Borrower may not accept any offer that is described
in Section 2.3(d)(iii) or that otherwise fails to comply with the requirements
of this Agreement.
41
(g) Allocation by Administrative Agent. If offers are made by two or
----------------------------------
more Banks with the same Money Market Margins or Money Market Absolute Rates, as
the case may be, for a greater aggregate principal amount than the amount in
respect of which such offers are accepted for the related Interest Period, the
principal amount of Money Market Loans in respect of which such offers are
accepted shall be allocated by the Administrative Agent among such Banks as
nearly as possible (in multiples of $100,000, as the Administrative Agent may
deem appropriate) in proportion to the aggregate principal amounts of such
offers. The Administrative Agent shall promptly notify the Borrower and each
such Bank in writing of any such allocation of Money Market Loans.
Determinations by the Administrative Agent of the allocation of Money Market
Loans shall be conclusive in the absence of manifest error.
(h) Notification by Administrative Agent. Upon receipt of the
------------------------------------
Borrower's Notice of Money Market Borrowing in accordance with Section 2.3(f)
hereof, the Administrative Agent shall promptly notify each Bank of the
principal amount of the Money Market Borrowing accepted by the Borrower and of
such Bank's share (if any) of such Money Market Borrowing and such Notice of
Money Market Borrowing shall not thereafter be revocable by the Borrower. A Bank
who is notified that it has been selected to make a Money Market Loan may
designate its Designated Lender (if any) to fund such Money Market Loan on its
behalf, as described in Section 9.6(d). Any Designated Lender which funds a
Money Market Loan shall on and after the time of such funding become the obligee
under such Money Market Loan and be entitled to receive payment when due. No
Bank shall be relieved of its obligation to fund a Money Market Loan, and no
Designated Lender shall assume such obligation, prior to the time the applicable
Money Market Loan is funded.
(i) Funding of Pro Rata Shares. Notwithstanding anything to the
--------------------------
contrary contained herein, each Bank shall be required to fund its pro rata
share of Committed Loans in accordance with Section 2.1 hereof despite the fact
that such Bank's Commitment may have been or may be exceeded as a result of such
Bank's making of Money Market Loans.
SECTION 2.4. Notice to Banks; Funding of Loans.
---------------------------------
(a) Upon receipt of a notice from Borrower in accordance with Section
2.2 hereof (each such notice being a "Notice of Borrowing") in the form of
Exhibit I attached hereto, and, if the amount of the Borrowing would result in
the outstanding Loans exceeding Loan Availability, based upon the most recent
Compliance Certificate but also taking into account any additional Unsecured
42
Debt which has been incurred subsequent to the most recent Compliance
Certificate, an updated Compliance Certificate in accordance with Section 5.8(l)
shall be delivered simultaneously therewith, the Administrative Agent shall, on
the date such Notice of Borrowing is received by the Administrative Agent, send
each Bank a copy of the Notice of Borrowing and, if applicable, the Compliance
Certificate, and notify each Bank of such Bank's share of such Borrowing, of the
interest rate determined pursuant thereto and the Interest Period(s) and such
Notice of Borrowing shall not thereafter be revocable by the Borrower, unless
Borrower shall pay any applicable expenses pursuant to Section 2.13.
(b) Not later than 1:00 p.m. Pittsburgh time on the date of each
Borrowing as indicated in the Notice of Borrowing, each Bank shall make
available its share of such Borrowing in Federal funds immediately available in
Pittsburgh, Pennsylvania, to the Administrative Agent at its address referred to
in Section 9.1. If the Borrower has requested the issuance of a Letter of
Credit, no later than 12:00 Noon Pittsburgh time on the date of such issuance as
indicated in the notice delivered pursuant to Section 2.2(b), the Fronting Bank
shall issue such Letter of Credit in the amount so requested and deliver the
same to or as directed by the Borrower with a copy thereof to the Administrative
Agent. Promptly following receipt of a copy of each Letter of Credit,
Administrative Agent shall deliver a copy thereof to each Bank. Immediately upon
the issuance of each Letter of Credit by the Fronting Bank, such Fronting Bank
shall be deemed to have sold and transferred to each other Bank, and each such
other Bank shall be deemed, and hereby agrees, to have irrevocably and
unconditionally purchased and received from the Fronting Bank, without recourse
or warranty, an undivided interest and a participation in such Letter of Credit,
any drawing thereunder, and the obligations of the Borrower hereunder with
respect thereto, and any security therefor or guaranty pertaining thereto, in an
amount equal to such Bank's ratable share thereof (based upon the ratio its
Commitment bears to the aggregate of all Commitments). Upon any change in any of
the Commitments in accordance herewith, there shall be an automatic adjustment
to such participations to reflect such changed shares. The Fronting Bank shall
have the primary obligation to fund any and all draws made with respect to such
Letter of Credit notwithstanding any failure of a participating Bank to fund its
ratable share of any such draw. The Administrative Agent will instruct the
Fronting Bank to make such Letter of Credit available to or as directed by the
Borrower and the Fronting Bank shall make such Letter of Credit available to or
as directed by the Borrower at the Borrower's aforesaid address or at such
address in the United States as Borrower shall request on the date of the
Borrowing.
(c) Unless the Administrative Agent shall have received notice from a
Bank prior to the date of any Borrowing that such Bank will not make available
43
to the Administrative Agent such Bank's share of such Borrowing, the
Administrative Agent may assume that such Bank has made such share available to
the Administrative Agent on the date of such Borrowing in accordance with
Section 2.4(b), and the Administrative Agent may, in reliance upon such
assumption, but shall not be obligated to, make available to the Borrower on
such date a corresponding amount on behalf of such Bank. If and to the extent
that such Bank shall not have so made such share available to the Administrative
Agent, such Bank and the Borrower severally agree to repay to the Administrative
Agent forthwith on demand, and in the case of the Borrower one (1) Domestic
Business Day after demand, such corresponding amount together with interest
thereon, for each day from the date such amount is made available to the
Borrower until the date such amount is repaid to the Administrative Agent, at
(i) in the case of the Borrower, a rate per annum equal to the interest rate
applicable thereto pursuant to Section 2.7 and (ii) in the case of such Bank,
the Federal Funds Rate. If such Bank shall repay to the Administrative Agent
such corresponding amount, such amount so repaid shall constitute such Bank's
Loan included in such Borrowing for the purposes of this Agreement.
(d) The failure of any Bank to make available to the Administrative
Agent its share of any Borrowing shall not relieve any other Bank of its
obligation to fund its share of such Borrowing.
SECTION 2.5. Notes.
-----
(a) The Base Rate Loans and the Euro-Dollar Loans of each Bank shall
be evidenced by a single Revolving Credit Note in the amount of its Commitment
payable to the order of such Bank for the account of its Applicable Lending
Office. The Money Market Loans of each Bank, including each Designated Lender,
shall be evidenced by a single Bid Rate Note in the amount of up to $5,000,000,
payable to the order of such Bank for the account of its Applicable Lending
Office.
(b) Each Bank may, by notice to the Borrower and the Administrative
Agent, request that its Loans of a particular type (including Money Market
Loans) be evidenced by a separate Note in an amount equal to the aggregate
unpaid principal amount of such Loans. Any additional costs incurred by the
Administrative Agent, the Borrower or the Banks in connection with preparing
such a Note shall be at the sole cost and expense of the Bank requesting such
Note. In the event any Loans evidenced by such a Note are paid in full prior to
the Maturity Date, any such Bank shall return such Note to Borrower. Each such
Note shall be in substantially the form of Exhibit A-2 hereto (or in the case of
a Money Market Loan, in substantially the form of Exhibit A-1
44
hereto) with appropriate modifications to reflect the fact that it evidences
solely Loans of the relevant type. Upon the execution and delivery of any such
Note, any existing Note payable to such Bank shall be replaced or modified
accordingly. Each reference in this Agreement to the "Note" of such Bank shall
be deemed to refer to and include any or all of such Notes, as the context may
require.
(c) Upon receipt of each Bank's Note pursuant to Section 3.1(a), the
Administrative Agent shall forward such Note to such Bank. Each Bank shall
record the date, amount, type and maturity of each Loan made by it and the date
and amount of each payment of principal made by the Borrower with respect
thereto, and may, if such Bank so elects in connection with any transfer or
enforcement of its Note, endorse on the appropriate schedule appropriate
notations to evidence the foregoing information with respect to each such Loan
then outstanding; provided that the failure of any Bank to make any such
recordation or endorsement shall not affect the obligations of the Borrower
hereunder or under the Notes. Each Bank is hereby irrevocably authorized by the
Borrower to so endorse its Note and to attach to and make a part of its Note a
continuation of any such schedule as and when required.
(d) The Committed Loans shall mature, and the principal amount
thereof shall be due and payable, on the Maturity Date.
(e) Each Money Market Loan included in any Money Market Borrowing
shall mature, and the principal amount thereof shall be due and payable,
together with accrued interest thereon, on the earlier to occur of (i) the last
day of the Interest Period applicable to such Money Market Borrowing or (ii) the
Maturity Date.
(f) There shall be no more than five (5) Euro-Dollar Groups of Loans
outstanding at any one time.
SECTION 2.6. Method of Electing Interest Rates.
---------------------------------
(a) The Loans included in each Committed Borrowing shall bear
interest initially at the type of rate specified by the Borrower in the
applicable Notice of Borrowing. Thereafter, the Borrower may from time to time
elect to change or continue the type of interest rate borne by each Group of
Loans (subject in each case to the provisions of Article VIII), as follows:
(i) if such Loans are Base Rate Loans, the Borrower may elect
to convert all or any portion of such Loans to Euro-Dollar Loans as of
any Euro-Dollar Business Day;
45
(ii) if such Loans are Euro-Dollar Loans, the Borrower may
elect to convert all or any portion of such Loans to Base Rate Loans
and/or elect to continue all or any portion of such Loans as Euro-
Dollar Loans for an additional Interest Period or additional Interest
Periods, in each case effective on the last day of the then current
Interest Period applicable to such Loans, or on such other date
designated by Borrower in the Notice of Interest Rate Election
provided Borrower shall pay any losses pursuant to Section 2.13.
Each such election shall be made by delivering a notice (a "Notice of Interest
Rate Election") to the Administrative Agent on or before 10:00 a.m. Pittsburgh
time at least two (2) Euro-Dollar Business Days before the conversion or
continuation selected in such notice is to be effective. A Notice of Interest
Rate Election may, if it so specifies, apply to only a portion of the aggregate
principal amount of the relevant Group of Loans; provided that (i) such portion
is allocated ratably among the Loans comprising such Group, (ii) the portion to
which such Notice of Interest Rate Election applies, and the remaining portion
to which it does not apply, are each $1,000,000 or any larger multiple of
$100,000, (iii) there shall be no more than five (5) Euro-Dollar Groups of Loans
outstanding at any time, (iv) no Committed Loan may be continued as, or
converted into, a Euro-Dollar Loan when any Default or Event of Default has
occurred and is continuing, and (v) no Interest Period shall extend beyond the
Maturity Date.
(b) Each Notice of Interest Rate Election shall specify:
(i) the Group of Loans (or portion thereof) to which such
notice applies;
(ii) the date on which the conversion or continuation selected
in such notice is to be effective, which shall comply with the
applicable clause of subsection (a) above;
(iii) if the Loans comprising such Group are to be converted,
the new type of Loans and, if such new Loans are Euro-Dollar Loans,
the duration of the initial Interest Period applicable thereto; and
(iv) if such Loans are to be continued as Euro-Dollar Loans
for an additional Interest Period, the duration of such additional
Interest Period.
Each Interest Period specified in a Notice of Interest Rate Election shall
comply
46
with the provisions of the definition of Interest Period.
(c) Upon receipt of a Notice of Interest Rate Election from the
Borrower pursuant to subsection (a) above, the Administrative Agent shall notify
each Bank the same day as it receives such Notice of Interest Rate Election of
the contents thereof, and the Interest Periods (if different from those
requested by the Borrower) and such notice shall not thereafter be revocable by
the Borrower. If the Borrower fails to deliver a timely Notice of Interest Rate
Election to the Administrative Agent for any Euro-Dollar Group of Loans, such
Euro-Dollar Group of Loans shall be converted into Base Rate Loans on the last
day of the then current Interest Period applicable thereto.
(d) If the Borrower shall fail to pay any principal of or interest on
any Money Market Loan when due, such Money Market Loan shall bear interest,
payable on demand, for each day until paid at a rate per annum equal to the Base
Rate until such failure shall become an Event of Default and thereafter at a
rate per annum equal to the sum of 4% plus the Base Rate for such day (the
"Default Rate").
SECTION 2.7. Interest Rates.
--------------
(a) Each Base Rate Loan shall bear interest on the outstanding
principal amount thereof, for each day from the date such Loan is made until the
date it is repaid or converted into a Euro-Dollar Loan pursuant to Section 2.6
or at the Maturity Date, at a rate per annum equal to the Base Rate plus the
Applicable Margin for Base Rate Loans for such day. Such interest shall be
payable in arrears on the first day of each calendar month.
(b) Each Euro-Dollar Loan shall bear interest on the outstanding
principal amount thereof, for each day during the Interest Period applicable
thereto, at a rate per annum equal to the sum of the Applicable Margin for Euro-
Dollar Loans for such day plus the Adjusted London Interbank Offered Rate
applicable to such Interest Period. Such interest shall be payable in arrears
for each Interest Period on the first day of each calendar month.
The "Adjusted London Interbank Offered Rate" applicable to any Interest
--------------------------------------
Period means a rate per annum equal to the quotient obtained (rounded upward, if
necessary, to the next higher 1/100th of 1%) by dividing (i) the London
Interbank Offered Rate applicable during such Interest Period by (ii) 1.00 minus
the Euro-Dollar Reserve Percentage.
The "London Interbank Offered Rate" applicable to any Interest Period
-----------------------------
47
means the rate per annum (rounded upward, if necessary, to the next higher
1/100th of 1%) determined by the Administrative Agent in accordance with its
usual procedures (which determination shall be conclusive absent manifest error)
to be the average of the London interbank offered rates for U.S. Dollars quoted
by the British Bankers' Association as set forth on Dow Xxxxx Markets Service
(formerly known as Telerate) display page 3750 (or appropriate successor or, if
the British Bankers' Association or its successor ceases to provide such quotes,
a comparable replacement determined by the Administrative Agent) at 11:00 a.m.
London time two (2) Euro-Dollar Business Days before the first day of such
Interest Period in an amount approximately equal to the principal amount of the
Euro-Dollar Borrowing or Group of Loans or portion thereof to be converted into
or continued as Euro-Dollar Loans to which such Interest Period is to apply and
for a period of time comparable to such Interest Period.
The "Euro-Dollar Reserve Percentage" means for any day that percentage
------------------------------
(expressed as a decimal) which is in effect on such day, as prescribed by the
Board of Governors of the Federal Reserve System (or any successor) under
Regulation D, as Regulation D may be amended, modified or supplemented, for
determining the maximum reserve requirement for a member bank of the Federal
Reserve System in New York City with deposits exceeding five billion dollars in
respect of "Euro-Currency liabilities" (or in respect of any other category of
liabilities which includes deposits by reference to which the interest rate on
Euro-Dollar Loans is determined or any category of extensions of credit or other
assets which includes loans by a non-United States office of any Bank to United
States residents). The Adjusted London Interbank Offered Rate shall be adjusted
automatically on and as of the effective date of any change in the Euro-Dollar
Reserve Percentage.
(c) Subject to Section 8.1, each Money Market LIBOR Loan shall bear
interest on the outstanding principal amount thereof, for the Interest Period
applicable thereto, at a rate per annum equal to the sum of the Adjusted London
Interbank Offered Rate for such Interest Period (determined in accordance with
Section 2.7(b) as if the related Money Market LIBOR Borrowing were a Euro-Dollar
Borrowing) plus, or minus, the Money Market Margin quoted by the Bank making
such Loan in accordance with Section 2.3. Each Money Market Absolute Rate Loan
shall bear interest on the outstanding principal amount thereof, for the
Interest Period applicable thereto, at a rate per annum equal to the Money
Market Absolute Rate quoted by the Bank making such Loan in accordance with
Section 2.3. Such interest shall be payable for each Interest Period on the last
day thereof, except as may be otherwise agreed among Borrower, Administrative
Agent and the applicable Bank, but in no event shall interest be payable at any
interval shorter than one month. Any overdue principal of or interest on any
Money Market Loan shall bear interest, payable on demand, for each day until
paid at a rate per
48
annum equal to the Base Rate until such failure shall become an Event of Default
and thereafter during the continuance of such Event of Default at a rate per
annum equal to the Default Rate.
(d) In the event that, and for so long as, any Event of Default
shall have occurred and be continuing, the outstanding principal amount of the
Loans, and, to the extent permitted by applicable law, overdue interest in
respect of all Loans, shall bear interest at the Default Rate.
(e) The Administrative Agent shall determine each interest rate
applicable to the Loans hereunder. The Administrative Agent shall give prompt
notice to the Borrower and the Banks of each rate of interest so determined, and
its determination thereof shall be conclusive in the absence of demonstrable
error.
SECTION 2.8. Fees.
----
(a) Facility Fee. At any time while the Investment Grade Ratings
------------
are not maintained, the Borrower shall pay to the Administrative Agent for the
account of the Banks ratably in proportion to their respective Commitments a
facility fee (the "Facility Fee") on the aggregate Commitments at the respective
percentages per annum based upon the range into which the Borrower's Leverage
Ratio then falls, in accordance with the following table. Any change in
Borrower's Leverage Ratio causing it to move to a different range on the table
shall effect an immediate change in the Facility Fee, effective on the earlier
of (i) the date of the Compliance Certificate reflecting such change in the
Leverage Ratio, or (ii) the last day on which a Compliance Certificate is
required to be delivered in accordance with the provisions hereof:
Facility Fee
Leverage Ratio (% per annum)
-------------- -------------
*30% 0.15
***30% *40% 0.15
***40% *50% 0.20
***50% **57.5% 0.20
* less than
** less than or equal to
*** more than or equal to
During any time when either CESRRI or Borrower shall maintain the
Investment Grade Ratings, "Facility Fee" shall mean a facility fee on the
aggregate Commitments at the respective percentages per annum based upon the
Credit
49
Ratings then applicable in accordance with the following table:
Credit Rating Facility Fee
(S&P/Moody's Ratings) (% per annum)
-------------------- ------------
A-/A3 or higher 0.125
BBB+/Baa1 0.15
BBB/Baa2 0.15
BBB-/Baa3 0.20
Any change in Credit Rating causing it to move into a different range on the
table shall effect an immediate change in the applicable percentage per annum.
If CESRRI or Borrower, as applicable shall maintain two (2) Credit Ratings, and
such ratings are not equivalent, the Facility Fee shall be based upon the higher
of such Credit Ratings as long as such ratings are only one level apart. In the
event that the ratings are more than one level apart, the Facility Fee will be
based upon the rating which shall be one level above the lower of the two
ratings. In the event that CESRRI or Borrower, as applicable, receives more than
two (2) Credit Ratings, and such ratings are not equivalent, the Facility Fee
shall be determined by the lower of the two (2) highest ratings, provided that
at least one (1) of such highest Credit Ratings shall be from S&P or Moody's. In
the event that at least one (1) of the two (2) highest ratings shall not be a
Credit Rating from S&P or Moody's, then the applicable percentage per annum
shall be determined by the lowest of the ratings. In the event that only one (1)
Rating Agency has set the Borrower's or CESRRI's Credit Rating, or CESRRI or
Borrower does not maintain the Investment Grade Ratings, then the Facility Fee
shall be based on Borrower's Leverage Ratio as set forth above. Notwithstanding
anything herein contained to the contrary, the Borrower shall always have the
right to elect that the Facility Fee be determined based upon its Leverage Ratio
by written notice to Administrative Agent, with such election to become
effective upon the next Domestic Business Day following receipt of such notice
by the Administrative Agent. Any change in the Facility Fee resulting from a
change in a Credit Rating shall become effective on the effective date of the
change in the applicable Credit Rating. The Facility Fee shall be payable
quarterly in arrears on each January 1, April 1, July 1 and October 1 during the
Term. The Facility Fee for any partial calendar quarter shall be prorated as
provided in Section 2.14.
(b) Letter of Credit Fee. During the Term, the Borrower shall pay to
--------------------
the Administrative Agent, for the account of the Banks in proportion to their
50
interests in respective undrawn issued Letters of Credit, a fee (the "Letter of
Credit Fee") in an amount, provided that no Event of Default shall have occurred
and be continuing, equal to a rate per annum of one percent (1%) on the daily
average of the undrawn amount of such Letters of Credit, which fee shall be
payable quarterly, in arrears, on each January 1, April 1, July 1 and October 1
during the Term. From the occurrence, and during the continuance, of an Event of
Default, such fee shall be increased to be equal to four percent (4%) per annum
on the daily average of the undrawn amount of such Letters of Credit. The Letter
of Credit Fee for any partial calendar quarter shall be prorated.
(c) Fronting Bank Fee. The Borrower shall pay the Administrative
Agent, for the Fronting Bank's account, a fee (the "Fronting Bank Fee") at a
rate per annum equal to one-eighth of one percent (0.125%) of the undrawn amount
of such Letter of Credit (less the Fronting Bank's pro rata share thereof based
upon the amount of the Fronting Bank's pro rata share of the Commitments), which
fee shall be in addition to and not in lieu of, the Letter of Credit Fee. The
Fronting Bank Fee shall be payable in arrears on each January 1, April 1, July 1
and October 1 during the Term. The Fronting Bank Fee for any partial calendar
quarter shall be prorated.
(d) Closing Fee. The Borrower shall pay to the Administrative Agent
-----------
certain fees pursuant to the Fee Letter. The Administrative Agent shall pay to
the Banks shares of such fees in accordance with their separate agreements.
(e) Administrative Agent's Fee. The Borrower shall also pay to the
--------------------------
Administrative Agent, for the Administrative Agent's own account, an
Administrative Agent's fee pursuant to the Fee Letter.
(f) Extension Fee. As provided in Section 2.9(b), the Borrower shall
-------------
pay to the Administrative Agent, for the account of the Banks in proportion to
the Commitments, an extension fee (the "Extension Fee") in the amount of one-
quarter of one percent (.25%) of the Commitments.
(g) Money Market Loan Fees. The Borrower agrees to pay the
----------------------
Administrative Agent together with each Money Market Loan Request an
administrative fee in the amount of $1,000, or as otherwise may be agreed to in
writing from time to time.
(h) Fees Non-Refundable. All fees set forth in this Section 2.8 shall
-------------------
be deemed to have been earned on the date payment is due in accordance with the
provisions hereof and shall be non-refundable. The obligation of the Borrower to
pay such fees in accordance with the provisions hereof shall be binding upon
51
Borrower and shall inure to the benefit of the Administrative Agent and the
Banks regardless of whether any Loans are actually made.
SECTION 2.9. Maturity Date; Extension of Maturity Date.
-----------------------------------------
(a) The term (the "Term") of the Commitments (and each Bank's obligations
to make Loans and to participate in Letters of Credit hereunder) shall terminate
and expire and the Borrower shall return or cause there to be returned all
Letters of Credit to the Fronting Bank on the Maturity Date, unless the Term
shall be extended as hereinafter set forth. Upon the date of the termination of
the Term, any Loans then outstanding (together with accrued interest thereon and
all other obligations) shall be due and payable on such date.
(b) Provided that (i) no Default or Event of Default then exists, (ii) the
Borrower delivers to the Administrative Agent simultaneously with the delivery
of the Extension Request (as hereinafter defined), a current Compliance
Certificate as of such date updating the calculation of the covenants contained
in Sections 5.8 (c), (e) and (i) and reflecting any other changes in
Indebtedness and Properties since the date of the most recent Compliance
Certificate, and (iii) the Extension Fee is paid simultaneously with the
delivery of the Extension Request, the Borrower may extend the initial Maturity
Date for an additional one (1) year period by executing and delivering to the
Administrative Agent at least ninety (90) days but no more than one hundred
twenty (120) days prior to the initial Maturity Date, a written request in the
form of Exhibit J (an "Extension Request"). The Administrative Agent shall
forward to each Bank a copy of the Extension Request delivered to the
Administrative Agent promptly after receipt thereof. Upon compliance by Borrower
with the foregoing conditions, then the Maturity Date shall be extended to the
date one (1) year following the initial Maturity Date, without any further act
or authorization by Borrower, the Administrative Agent or any Bank.
SECTION 2.10. [Intentionally Deleted].
SECTION 2.11. Optional Prepayments.
--------------------
(a) The Borrower may, upon notice to the Administrative Agent
delivered by 11:00 a.m., Pittsburgh time on the preceding Domestic Business Day,
prepay any Base Rate Group of Loans (or any Euro-Dollar Borrowing bearing
interest at the Base Rate pursuant to Section 8.1), in whole at any time, or
from time to time in part in amounts aggregating One Million Dollars
($1,000,000) or any larger multiple of One Hundred Thousand Dollars ($100,000),
by paying to the Administrative Agent the principal amount to be prepaid
together with accrued
52
interest thereon to the date of prepayment. Each such optional prepayment shall
be applied by the Administrative Agent to prepay ratably the Loans of the
several Banks included in such Group of Loans or Borrowing.
(b) The Borrower may, upon notice to the Administrative Agent delivered by
11:00 a.m., Pittsburgh time on the preceding Euro-Dollar Business Day, prepay
any Euro-Dollar Loan as of the last day of the Interest Period applicable
thereto. The Borrower may not prepay all or any portion of the principal amount
of any Euro-Dollar Loan prior to the end of the Interest Period applicable
thereto unless the Borrower shall also pay any applicable expenses pursuant to
Section 2.13. Any such prepayment prior to the end of the Interest Period
applicable thereto shall be upon at least three (3) Euro-Dollar Business Days
notice to the Administrative Agent. Each such optional prepayment shall be in
the amounts set forth in Section 2.11(a) above and shall be applied to prepay
ratably the Loans of the Banks included in any Euro-Dollar Group of Loans,
except that any Euro-Dollar Loan which has been converted to a Base Rate Loan
pursuant to Section 8.2, 8.3 or 8.4 hereof may be prepaid without ratable
payment of the other Loans in such Group of Loans which have not been so
converted.
(c) The Borrower may, upon at least one (1) Domestic Business Day's notice
to the Administrative Agent (by 11:00 a.m Pittsburgh time on such Domestic
Business Day), reimburse the Administrative Agent for the benefit of the
Fronting Bank for the amount of any drawing under a Letter of Credit in whole or
in part in any amount.
(d) The Borrower may at any time return, or cause to be returned, any
undrawn Letter of Credit to the Fronting Bank in whole, but not in part, and the
Fronting Bank within one (1) Domestic Business Day shall give the Administrative
Agent and each of the Banks notice of such return.
(e) The Borrower may at any time and from time to time cancel all or any
part of the Commitments by the delivery to the Administrative Agent of a notice
of cancellation within the applicable time periods for prepayments set forth in
Sections 2.11(a) and (b) if there are Loans then outstanding or, if there are no
Loans outstanding at such time as to which the Commitments with respect thereto
are being canceled, upon at least one (1) Domestic Business Day's notice to the
Administrative Agent, whereupon, in either event, all or such portion of the
Commitments, as applicable, shall terminate as to the Banks, pro rata on the
date set forth in such notice of cancellation, and, if there are any Loans then
outstanding, Borrower shall prepay, as applicable, all or such portion of Loans
outstanding on such date in accordance with the requirements of Section 2.11(a)
and (b). In no event shall the Borrower be permitted to cancel Commitments for
53
which a Letter of Credit has been issued and is outstanding unless the Borrower
returns (or causes to be returned) such Letter of Credit to the Fronting Bank.
Borrower shall be permitted to designate in its notice of cancellation which
Loans, if any, are to be prepaid.
(f) Any amounts so prepaid pursuant to Section 2.11 (a) or (b) may be
reborrowed. In the event Borrower elects to cancel all or any portion of the
Commitments pursuant to Section 2.11(e) hereof, such amounts may not be
reborrowed.
(g) Notwithstanding anything herein contained to the contrary, the
Borrower may not prepay all or any portion of the principal amount of any Money
Market Loan prior to the end of the Interest Period applicable thereto.
SECTION 2.12. General Provisions as to Payments.
---------------------------------
(a) The Borrower shall make each payment of the principal and interest on
the Loans and of fees hereunder, not later than 12:00 Noon Pittsburgh time on
the date when due, in Federal or other funds immediately available in
Pittsburgh, to the Administrative Agent at its address referred to in Section
9.1. If any such payment is received by the Administrative Agent later than
12:00 Noon Pittsburgh time, such payment shall be treated as having been made on
the next Domestic Business Day or Euro-Dollar Business Day, as applicable. The
Administrative Agent will promptly distribute to each Bank its ratable share (or
applicable share with respect to Money Market Loans) of each such payment
received by the Administrative Agent for the account of the Banks. If and to the
extent that the Administrative Agent shall receive any such payment for the
account of the Banks on or before 12:00 Noon Pittsburgh time on any Domestic
Business Day, and Administrative Agent shall not have distributed to any Bank
its applicable share of such payment on such Domestic Business Day,
Administrative Agent shall distribute such amount to such Bank together with
interest thereon, for each day from the date such amount should have been
distributed to such Bank until the date Administrative Agent distributes such
amount to such Bank, at the Federal Funds Rate. Whenever any payment of
principal of, or interest on the Base Rate Loans or of fees shall be due on a
day which is not a Domestic Business Day, the date for payment thereof shall be
extended to the next succeeding Domestic Business Day. Whenever any payment of
principal of, or interest on, the Euro-Dollar Loans shall be due on a day which
is not a Euro-Dollar Business Day, the date for payment thereof shall be
extended to the next succeeding Euro-Dollar Business Day unless such Euro-Dollar
Business Day falls in another calendar month, in which case the date for payment
thereof shall be the next preceding Euro-Dollar Business Day. Whenever any
54
payment of principal of, or interest on, the Money Market Loans shall be due on
a day which is not a Euro-Dollar Business Day, the date for payment thereof
shall be extended to the next succeeding Euro-Dollar Business Day. If the date
for any payment of principal is extended by operation of law or otherwise,
interest thereon shall be payable for such extended time.
(b) Unless the Administrative Agent shall have received notice from the
Borrower prior to the date on which any payment is due to the Banks hereunder
that the Borrower will not make such payment in full, the Administrative Agent
may assume that the Borrower has made such payment in full to the Administrative
Agent on such date and the Administrative Agent may, in reliance upon such
assumption, cause to be distributed to each Bank on such due date an amount
equal to the amount then due such Bank. If and to the extent that the Borrower
shall not have so made such payment, each Bank shall repay to the Administrative
Agent forthwith on demand such amount distributed to such Bank together with
interest thereon, for each day from the date such amount is distributed to such
Bank until the date such Bank repays such amount to the Administrative Agent, at
the Federal Funds Rate.
SECTION 2.13. Funding Losses.
--------------
If the Borrower makes any payment of principal with respect to any
Euro-Dollar Loan (pursuant to Article II, VI or VIII or otherwise) on any day
other than the last day of the Interest Period applicable thereto, or if the
Borrower fails to borrow any Euro-Dollar Loans after notice has been given by
the Administrative Agent to any Bank in accordance with Section 2.4(a), or if
Borrower shall deliver a Notice of Interest Rate Election specifying that a
Euro-Dollar Loan shall be converted on a date other than the last day of' the
then current Interest Period applicable thereto, the Borrower shall reimburse
each Bank within fifteen (15) days after Borrower receives certification of such
Bank of such loss or expense (which shall be delivered by each such Bank to
Administrative Agent for delivery to Borrower) for any resulting loss or expense
incurred by it (or by an existing Participant in the related Loan), including
(without limitation) any loss incurred in obtaining, liquidating or employing
deposits from third parties, but excluding loss of margin for the period after
any such payment or failure to borrow, provided that such Bank shall have
delivered to Administrative Agent and Administrative Agent shall have delivered
to the Borrower a certification as to the amount of such loss or expense, which
certification shall set forth in reasonable detail the basis for and calculation
of such loss or expense and shall be conclusive in the absence of demonstrable
error. Calculation of all amounts payable to a Bank under this Section 2.13
shall be made as though such Bank had actually funded Euro-Dollar Loans through
the purchase of deposits in the relevant market bearing interest at
55
the rate applicable to such Euro-Dollar Loans in an amount equal to the amount
of the Euro-Dollar Loans and having a maturity comparable to the relevant
Interest Period, provided, however, that each Bank may fund each of its Euro-
Dollar Loans in any manner it sees fit and the foregoing assumption shall be
used only for calculation of amounts payable under this Section 2.13.
SECTION 2.14. Computation of Interest and Fees.
--------------------------------
All interest and fees (other than the fees due pursuant to Section 2.8(d)
and the Extension Fee) shall be computed on the basis of a year of 360 days and
paid for the actual number of days elapsed (including the first day but
excluding the last day), provided that the Facility Fee shall be computed on a
quarterly basis, with any partial quarter being prorated on a per diem basis
using the total number of days in the applicable calendar quarter.
SECTION 2.15. Use of Proceeds.
---------------
Borrower shall use the proceeds of the Loans for any legal, authorized
business purpose, including, without limitation, pre-development costs,
development costs, construction costs, acquisitions, working capital, equity
investments and repayment of Indebtedness.
SECTION 2.16. Letters of Credit.
-----------------
(a) Subject to the terms contained in this Agreement and the other Loan
Documents, upon the receipt of a notice in accordance with Section 2.2(b)
requesting the issuance of a Letter of Credit, the Fronting Bank shall issue a
Letter of Credit or Letters of Credit in such form as is reasonably acceptable
to the Borrower subject to the provisions of Section 2.2(b) in an amount or
amounts equal to the amount or amounts requested by the Borrower.
(b) Each Letter of Credit shall be issued in the minimum amount of One
Hundred Thousand Dollars ($100,000).
(c) The Letter of Credit Usage shall be no more than Five Million Dollars
($5,000,000) at any one time.
(d) There shall be no more than ten (10) Letters of Credit outstanding at
any one time.
(e) In the event of any request for a drawing under any Letter of Credit
by the beneficiary thereunder, the Fronting Bank shall notify the Borrower
56
and the Administrative Agent (and the Administrative Agent shall notify each
Bank thereof) on or before the date on which the Fronting Bank intends to honor
such drawing, and, except as provided in this subsection (e), the Borrower shall
reimburse the Fronting Bank, in immediately available funds, on the same day on
which such drawing is honored in an amount equal to the amount of such drawing.
Notwithstanding anything contained herein to the contrary, however, unless the
Borrower shall have notified the Administrative Agent, and the Fronting Bank
prior to 11:00 a.m. Pittsburgh time on the Domestic Business Day immediately
prior to the date of such drawing that the Borrower intends to reimburse the
Fronting Bank for the amount of such drawing with funds other than the proceeds
of the Loans, the Borrower shall be deemed to have timely given a Notice of
Borrowing pursuant to Section 2.2 to the Administrative Agent, requesting a
Borrowing of Base Rate Loans on the date on which such drawing is honored and in
an amount equal to the amount of such drawing. Each Bank (other than the
Fronting Bank) shall, in accordance with Section 2.4 (b), make available its pro
rata share of such Borrowing to the Administrative Agent, the proceeds of which
shall be applied directly by the Administrative Agent to reimburse the Fronting
Bank for the amount of such draw. In the event that any such Bank fails to make
available to the Fronting Bank the amount of such Bank's pro rata share on the
date of a drawing, the Fronting Bank shall be entitled to recover such amount on
demand from such Bank together with interest at the Federal Funds Rate
commencing on the date such drawing is honored, and the provisions of Section
9.16 shall otherwise apply to such failure.
(f) If after the date hereof, any change in any law or regulation or in
the interpretation thereof by any court or administrative or governmental
authority charged with the administration thereof shall either (i) impose,
modify or deem applicable any reserve, special deposit or similar requirement
against letters of credit issued by, or assets held by, or deposits in or for
the account of, or participations in any letter of credit, upon any Bank
(including the Fronting Bank) or (ii) impose on any Bank any other condition
regarding this Agreement or such Bank (including the Fronting Bank) as it
pertains to the Letters of Credit or any participation therein and the result of
any event referred to in the preceding clause (i) or (ii) shall be to increase
by an amount deemed by the Fronting Bank or such Bank to be material, the cost
to the Fronting Bank or any Bank of issuing or maintaining any Letter of Credit
or participating therein, then the Borrower shall pay to the Fronting Bank or
such Bank, within fifteen (15) days after written demand by such Bank (with a
copy to the Administrative Agent) , which demand shall be accompanied by a
certificate showing, in reasonable detail, the calculation of such amount or
amounts, such additional amounts as shall be required to compensate the Fronting
Bank or such Bank for such increased costs or reduction in amounts received or
receivable hereunder. Each Bank will promptly
57
notify the Borrower and the Administrative Agent of any event of which it has
knowledge, occurring after the date hereof, which will entitle such Bank to
compensation pursuant to this Section 2.16 and will designate a different
Applicable Lending Office if such designation will avoid the need for, or reduce
the amount of, such compensation and will not, in the reasonable judgment of
such Bank, be otherwise disadvantageous to such Bank. A certificate of any Bank
claiming compensation under this Section 2.16 and setting forth a reasonably
detailed calculation of the additional amount or amounts to be paid to it
hereunder shall be conclusive in the absence of demonstrable error. In
determining such amount, such Bank may use any reasonable averaging and
attribution methods.
(g) The Borrower hereby agrees to protect, indemnify, pay and save the
Fronting Bank harmless from and against any and all claims, demands,
liabilities, damages, losses, costs, charges and expenses (including reasonable
attorneys' fees and disbursements) which the Fronting Bank may incur or be
subject to as a result of (i) the issuance of the Letters of Credit, other than
to the extent of the bad faith, gross negligence or wilful misconduct of the
Fronting Bank or (ii) the failure of the Fronting Bank to honor a drawing under
any Letter of Credit as a result of any act or omission, whether rightful or
wrongful, of any present or future de jure or de facto government or
Governmental Authority (collectively, "Governmental Acts"), other than to the
extent of the bad faith, gross negligence or wilful misconduct of the Fronting
Bank. As between the Borrower and the Fronting Bank, the Borrower assumes all
risks of the acts and omissions of any beneficiary with respect to its use, or
misuse of, the Letters of Credit issued by the Fronting Bank. In furtherance and
not in limitation of the foregoing, the Fronting Bank shall not be responsible
(i) for the form, validity, sufficiency, accuracy, genuineness or legal effect
of any document submitted by any party in connection with the application for
and issuance of such Letters of Credit, even if it should in fact prove to be in
any or all respects invalid, insufficient, inaccurate, fraudulent or forged;
(ii) for the validity or insufficiency of any instrument transferring or
assigning or purporting to transfer or assign any such Letter of Credit or the
rights or benefits thereunder or proceeds thereof, in whole or in part, which
may prove to be invalid or ineffective for any reason; (iii) for failure of the
beneficiary of any such Letter of Credit to comply fully with conditions
required in order to draw upon such Letter of Credit, other than as a result of
the bad faith, gross negligence or wilful misconduct of the Fronting Bank; (iv)
for errors, omissions, interruptions or delays in transmission or delivery of
any message, by mail, cable, telegraph, telex, facsimile transmission, or
otherwise, unless the result of the bad faith, gross negligence or wilful
misconduct of the Fronting Bank; (v) for errors in interpretation of any
technical terms, unless the result of the bad faith, gross negligence or wilful
misconduct of the Fronting Bank;
58
(vi) for any loss or delay in the transmission or otherwise of any documents
required in order to make a drawing under any such Letter of Credit or of the
proceeds thereof; (vii) for the misapplication by the beneficiary of any such
Letter of Credit of the proceeds of such Letter of Credit; and (viii) for any
consequence arising from causes beyond the control of the Fronting Bank,
including any Government Acts, in each case other than to the extent of the bad
faith, gross negligence or wilful misconduct of the Fronting Bank. None of the
above shall affect, impair or prevent the vesting of the Fronting Bank's rights
and powers hereunder. In furtherance and not in limitation of the specific
provisions hereinabove set forth, any action taken or omitted by the Fronting
Bank under or in connection with the Letters of Credit issued by it or the
related certificates, if taken or omitted in good faith, shall not put the
Fronting Bank under any resulting liability to the Borrower; provided that,
notwithstanding anything in the foregoing to the contrary, the Fronting Bank
will be liable to the Borrower for any damages suffered by the Borrower or its
Subsidiaries as a result of the Fronting Bank's grossly negligent or wilful
failure to pay under any Letter of Credit after the presentation to it of a
sight draft and certificates strictly in compliance with the terms and
conditions of the Letter of Credit.
(h) If the Fronting Bank or the Administrative Agent is required at any
time, pursuant to any bankruptcy, insolvency, liquidation or reorganization law
or otherwise, to return to the Borrower any reimbursement by the Borrower of any
drawing under any Letter of Credit, each Bank shall pay to the Fronting Bank or
the Administrative Agent, as the case may be, its pro rata share of such
payment, but without interest thereon unless the Fronting Bank or the
Administrative Agent is required to pay interest on such amounts to the person
recovering such payment, in which case with interest thereon, computed at the
same rate, and on the same basis, as the interest that the Fronting Bank or the
Administrative Agent is required to pay.
(i) The Letters of Credit issued under the Existing Credit Agreement
described on Schedule 2.16 shall be deemed to be Letters of Credit issued under
this Agreement.
SECTION 2.17. Letter of Credit Usage.
----------------------
The obligations of the Borrower under this Agreement in respect of any
Letter of Credit shall be unconditional and irrevocable, and shall be paid
strictly in accordance with the terms of this Agreement (as the same may be
amended from time to time) and any Letter of Credit Documents (as hereinafter
defined) under all circumstances, including, without limitation, to the extent
permitted by law, the following circumstances:
59
(a) any lack of validity or enforceability of any Letter of Credit or any
other agreement or instrument relating thereto (collectively, the "Letter of
Credit Documents") or any Loan Document;
(b) any change in the time, manner or place of payment of, or in any other
term of, all or any of the obligations of the Borrower in respect of the Letters
of Credit or any other amendment or waiver of or any consent by the Borrower to
departure from all or any of the Letter of Credit Documents or any Loan
Document; provided, that the Fronting Bank shall not consent to any such change
or amendment unless previously consented to in writing by the Borrower;
(c) any exchange, release or non-perfection of any collateral, or any
release or amendment or waiver of or consent to departure from any guaranty, for
all or any of the obligations of the Borrower in respect of the Letters of
Credit;
(d) the existence of any claim, set-off, defense or other right that the
Borrower may have at any time against any beneficiary or any transferee of a
Letter of Credit (or any Persons for whom any such beneficiary or any such
transferee may be acting), the Administrative Agent, the Fronting Bank or any
Bank (other than a defense based on the bad faith, gross negligence or wilful
misconduct of the Administrative Agent, the Fronting Bank or such Bank) or any
other Person, whether in connection with the Loan Documents, the transactions
contemplated hereby or by the Letter of Credit Documents or any unrelated
transaction;
(e) any draft or any other document presented under or in connection with
any Letter of Credit or other Loan Document proving to be forged, fraudulent,
invalid or insufficient in any respect or any statement therein being untrue or
inaccurate in any respect; provided, that payment by the Fronting Bank under
such Letter of Credit against presentation of such draft or document shall not
have been the result of the bad faith, gross negligence or wilful misconduct of
the Fronting Bank;
(f) payment by the Fronting Bank against presentation of a draft or
certificate that does not strictly comply with the terms of the Letter of
Credit; provided, that such payment shall not have been the result of the bad
faith, gross negligence or wilful misconduct of the Fronting Bank; and
(g) any other circumstance or happening whatsoever other than the payment
in full of all obligations hereunder in respect of any Letter of Credit or any
agreement or instrument relating to any Letter of Credit, whether or not similar
to any of the foregoing, that might otherwise constitute a defense available
60
to, or a discharge of, the Borrower; provided, that such other circumstance or
happening shall not have been the result of bad faith, gross negligence or
wilful misconduct of the Fronting Bank.
ARTICLE III
CONDITIONS
SECTION 3.1. Closing.
-------
The closing hereunder shall occur on the date when each of the following
conditions is satisfied (or waived by the Administrative Agent and the Banks),
each document to be dated the Closing Date unless otherwise indicated:
(a) the Borrower shall have executed and delivered to the Administrative
Agent a Revolving Credit Note and a Bid Rate Note for the account of each Bank
dated on or before the Closing Date complying with the provisions of Section
2.5;
(b) the Borrower, the Administrative Agent and each of the Banks shall
have executed and delivered to the Borrower and the Administrative Agent a duly
executed original of this Agreement;
(c) [Intentionally Deleted]
(d) each Wholly-Owned Consolidated Subsidiary which owns a Lien permitted
under subsection h of the definition of Permitted Liens shall have executed and
delivered to the Administrative Agent the materials required under such
subsection h;
(e) the Administrative Agent shall have received an opinion of Xxxxx &
Xxxxxxx L.L.P., counsel for the Borrower, acceptable to the Administrative
Agent, the Banks and their counsel;
(f) the Administrative Agent shall have received all documents the
Administrative Agent may reasonably request relating to the existence of the
Borrower and CESRRI the authority for and the validity of this Agreement and the
other Loan Documents, and any other matters relevant hereto, all in form and
substance reasonably satisfactory to the Administrative Agent. Such
documentation shall include, without limitation, the agreement of limited
partnership of the Borrower, as well as the certificate of limited partnership
of the Borrower, both as amended, modified or supplemented to the Closing Date,
61
certified to be true, correct and complete by a senior officer of the Borrower
as of a date not more than ten (10) days prior to the Closing Date, together
with a certificate of existence as to the Borrower from the Secretary of State
(or the equivalent thereof) of Delaware, to be dated not more than thirty (30)
days prior to the Closing Date, as well as the declaration of trust or articles
of incorporation of CESRRI, as amended, modified or supplemented to the Closing
Date, certified to be true, correct and complete by a senior officer of CESRRI
as of a date not more than ten (10) days prior to the Closing Date, together
with a good standing certificate as to CESRRI from the Secretary of State (or
the equivalent thereof) of Maryland, to be dated not more than thirty (30) days
prior to the Closing Date;
(g) [Intentionally Deleted]
(h) the Administrative Agent shall have received all certificates,
agreements and other documents and papers referred to in this Section 3.1 and
the Notice of Borrowing referred to in Section 2.2, if applicable, unless
otherwise specified, in sufficient counterparts, reasonably satisfactory in form
and substance to the Administrative Agent in its sole discretion;
(i) the Borrower shall have taken all actions required to authorize
the execution and delivery of this Agreement and the other Loan Documents and
the performance thereof by the Borrower;
(j) the Administrative Agent shall be reasonably satisfied that
neither the Borrower, CESRRI nor any Consolidated Subsidiary is subject to any
present or contingent environmental liability which could have a Material
Adverse Effect;
(k) the Administrative Agent shall have received, for its and any
other Bank's account, all fees due and payable pursuant to Section 2.8 hereof on
or before the Closing Date, and the fees and expenses accrued through the
Closing Date of Marcus & Shapira, LLP;
(l) the Administrative Agent shall have received copies of all
consents, licenses and approvals, if any, required in connection with the
execution, delivery and performance by the Borrower and CESRRI and the validity
and enforceability, of the Loan Documents, or in connection with any of the
transactions contemplated thereby, and such consents, licenses and approvals
shall be in full force and effect;
(m) the Administrative Agent shall have received the audited
financial statements of the Borrower and its Consolidated Subsidiaries and of
62
CESRRI for the fiscal year ending December 31, 1999 and the interim financial
statements of the Borrower and its Consolidated Subsidiaries and of CESRRI for
the period ending September 30, 2000;
(n) no Default or Event of Default shall have occurred;
(o) no event, act or condition shall have occurred, which in the
reasonable judgment of the Administrative Agent, or the Required Banks, as the
case may be, has or is likely to have a Material Adverse Effect;
(p) the Administrative Agent shall have received a certification from
the Borrower in the form of Exhibit K with respect to the Qualifying
Unencumbered Properties listed on Exhibit F, and such other information with
respect to such Properties as the Administrative Agent shall reasonably request;
and
(q) the Administrative Agent shall have received a current Compliance
Certificate from the Borrower.
SECTION 3.2. Borrowings.
----------
The obligation of any Bank to make a Loan or to participate in any Letter
of Credit issued by the Fronting Bank and the obligation of the Fronting Bank to
issue a Letter of Credit on the occasion of any Borrowing is subject to the
satisfaction of the following conditions:
(a) receipt by the Administrative Agent of a Notice of Borrowing as
required by Section 2.2 or a Notice of Money Market Borrowing as required by
Section 2.3 or a request to cause a Fronting Bank to issue a Letter of Credit
pursuant to Section 2.16;
(b) immediately after such Borrowing, the aggregate outstanding
principal amount of the Loans plus the Letter of Credit Usage will not exceed
the lesser of the aggregate amount of the Commitments or the Loan Availability;
(c) immediately before and after such Borrowing or issuance of any
Letter of Credit, no Default or Event of Default shall have occurred and be
continuing both before and after giving effect to the making of such Loans;
(d) the representations and warranties of the Borrower contained in
this Agreement (other than representations and warranties which expressly
63
speak as of a different date) shall be true and correct in all material respects
on and as of the date of such Borrowing both before and after giving effect to
the making of such Loans;
(e) no law or regulation shall have been adopted, no order, judgment
or decree of any governmental authority shall have been issued, and no
litigation shall be pending, which does or seeks to enjoin, prohibit or
restrain, the making or repayment of the Loans, the issuance of any Letter of
Credit or the consummation of the transactions contemplated by this Agreement;
and
(f) no event, act or condition shall have occurred after the Closing
Date which, in the reasonable judgment of the Administrative Agent, or the
Required Banks, as the case may be, has had or is likely to have a Material
Adverse Effect.
Each Borrowing hereunder or acceptance of a Letter of Credit issued hereunder
shall be deemed to be a representation and warranty by the Borrower on the date
of such Borrowing as to the facts specified in clauses (b), (c), (d), (e) and
(f) (to the extent that Borrower is or should have been aware of any Material
Adverse Effect) of this Section 3.2, except as otherwise disclosed in writing by
Borrower to the Banks. Notwithstanding anything to the contrary, no Borrowing
shall be permitted if such Borrowing would cause Borrower to fail to be in
compliance with any of the covenants contained in this Agreement or in any of
the other Loan Documents.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
In order to induce the Administrative Agent, and each of the other Banks
which is or may become a party to this Agreement to make the Loans, the Borrower
makes the following representations and warranties as of the Closing Date. Such
representations and warranties shall survive the effectiveness of this
Agreement, the execution and delivery of the other Loan Documents and the making
of the Loans.
SECTION 4.1. Existence and Power.
-------------------
The Borrower is a limited partnership, duly formed and validly existing as
a limited partnership under the laws of the State of Delaware and has all powers
and all material governmental licenses, authorizations, consents and approvals
required to own its property and assets and carry on its business as now
64
conducted or as it presently proposes to conduct and has been duly qualified and
is in good standing in every jurisdiction in which the failure to be so
qualified and/or in good standing is likely to have a Material Adverse Effect.
CESRRI is a real estate investment trust or corporation, duly formed, validly
existing and in good standing as a real estate investment trust or a corporation
under the laws of the jurisdiction in which it is organized and has all powers
and all material governmental licenses, authorizations, consents and approvals
required to own its property and assets and carry on its business as now
conducted or as it presently proposes to conduct and has been duly qualified and
is in good standing in every jurisdiction in which the failure to be so
qualified and/or in good standing is likely to have a Material Adverse Effect.
SECTION 4.2. Power and Authority.
-------------------
The Borrower has the partnership power and authority to execute, deliver
and carry out the terms and provisions of each of the Loan Documents to which it
is a party and has taken all necessary partnership action, if any, to authorize
the execution and delivery on behalf of the Borrower and the performance by the
Borrower of such Loan Documents. The Borrower has duly executed and delivered
each Loan Document to which it is a party in accordance with the terms of this
Agreement, and each such Loan Document constitutes the legal, valid and binding
obligation of the Borrower, enforceable in accordance with its terms, except as
such enforceability may be limited by applicable insolvency, bankruptcy or other
laws affecting creditors rights generally, or general principles of equity,
whether such enforceability is considered in a proceeding in equity or at law.
CESRRI has the power and authority, as general partner of the Borrower, to
execute, deliver and carry out the terms and provisions of each of the Loan
Documents on behalf of the Borrower to which the Borrower is a party and has
taken all necessary action to authorize, as general partner of the Borrower, the
execution and delivery on behalf of the Borrower and the performance by the
Borrower of such Loan Documents. The Borrower has obtained all consents and
authorizations required pursuant to the terms of any indenture, mortgage, deed
of trust or other material agreement to which it or any of its Consolidated
Subsidiaries is a party as may be necessary to allow Borrower and the
Consolidated Subsidiaries to lawfully execute, deliver and perform their
obligations under the Loan Documents to which they are parties.
SECTION 4.3. No Violation.
------------
Neither the execution, delivery or performance by or on behalf of the
Borrower of the Loan Documents to which it is a party, nor compliance by the
Borrower with the terms and provisions thereof nor the consummation of the
65
transactions contemplated by the Loan Documents, (i) will materially contravene
any applicable provision of any law, statute, rule, regulation, order, writ,
injunction or decree of any court or governmental instrumentality, (ii) will
materially conflict with or result in any breach of, any of the terms,
covenants, conditions or provisions of, or constitute a default under, or result
in the creation or imposition of (or the obligation to create or impose) any
Lien upon any of the property or assets of the Borrower or any of its
Consolidated Subsidiaries pursuant to the terms of any indenture, mortgage, deed
of trust, or other agreement or other instrument to which the Borrower (or of
any partnership of which the Borrower is a partner) or any of its Consolidated
Subsidiaries is a party or by which it or any of its property or assets is bound
or to which it is subject, or (iii) will cause a material default by the
Borrower under any organizational document of any person in which the Borrower
has an interest, or cause a material default under the Borrower's agreement or
certificate of limited partnership, the consequences of which conflict, breach
or default would have a Material Adverse Effect, or result in or require the
creation or imposition of any material Lien whatsoever upon any Property (except
as contemplated herein).
SECTION 4.4. Financial Information.
---------------------
(a) The consolidated balance sheet of the Borrower and its Consolidated
Subsidiaries, dated as of December 31, 1999, and the related consolidated
statements of Borrower's financial position for the fiscal year then ended,
reported on by Xxxxxx Xxxxxxxx LLP, a copy of which has been delivered to each
of the Banks, fairly present, in conformity with GAAP, the consolidated
financial position of the Borrower and its Consolidated Subsidiaries as of such
date and their consolidated results of operations and cash flows for such fiscal
year.
(b) The consolidated balance sheet of CESRRI, dated as of December 31,
1999, and the related consolidated statements of CESRRI's financial position for
the fiscal year then ended, reported on by Xxxxxx Xxxxxxxx LLP and set forth in
the CESRRI 1999 Form 10-K, a copy of which has been delivered to each of the
Banks, fairly present, in conformity with GAAP, the consolidated financial
position of CESRRI and its Consolidated Subsidiaries as of such date and their
consolidated results of operations and cash flows for such fiscal year.
(c) The consolidated balance sheets of CESRRI, the Borrower
and Consolidated Subsidiaries for the quarter ending as of September 30, 2000,
and the related consolidated statements of Borrower's and CESRRI's operations
and consolidated statements of Borrower's and CESRRI's cash flow for such
quarter
66
and the portion of Borrower's and CESRRI's fiscal year ended on such date fairly
present the financial condition of CESRRI and the Borrower on a consolidated
basis as of the date thereof (subject to normal year-end adjustments) and the
results of their operations and cash flows, on a consolidated basis, for the
period then ended.
(d) Since September 30, 2000, nothing has occurred having a Material
Adverse Effect.
SECTION 4.5. Litigation.
----------
Except as set forth on Schedule 4.5 attached hereto, there is no action,
suit or proceeding pending against, or to the knowledge of the Borrower
threatened against or affecting, (i) the Borrower, CESRRI or any of their
Consolidated Subsidiaries, (ii) the Loan Documents or any of the transactions
contemplated by the Loan Documents or (iii) any of their assets, before any
court or arbitrator or any governmental body, agency or official in which there
is a reasonable likelihood of an adverse decision which could, individually, or
in the aggregate have a Material Adverse Effect or which in any manner draws
into question the validity of this Agreement or the other Loan Documents.
SECTION 4.6. Compliance with ERISA.
---------------------
(a) As of the date hereof, except as set forth on Schedule 4.6
attached hereto, Borrower is not a member of any Plan or Multiemployer Plan or
any other Benefit Arrangement.
(b) The transactions contemplated by the Loan Documents will not
constitute a nonexempt prohibited transaction (as such term is defined in
Section 4975 of the Code or Section 406 of ERISA) that could subject the
Administrative Agent, or the Banks to any tax or penalty or prohibited
transactions imposed under Section 4975 of the Code or Section 502(i) of ERISA.
SECTION 4.7. Environmental Matters.
---------------------
Except as set forth on Schedule 4.7, to the best of Borrower's knowledge,
(i) the operations of Borrower and each Consolidated Subsidiary comply in all
material respects with all Environmental Laws; (ii) none of Borrower's or any
Consolidated Subsidiary's present Properties or operations are subject to any
Environmental Claim or Materials of Environmental Concern which would have a
Material Adverse Effect on any such Person; (iii) as of the date hereof, neither
Borrower, nor any Consolidated Subsidiary has filed any notice under applicable
67
Environmental Laws reporting a release of a Materials of Environmental Concern
into the environment in violation of any Environmental Laws, except as the same
may have been heretofore remedied; (iv) there is not now on or in the Properties
of Borrower or any Consolidated Subsidiary any Materials of Environmental
Concern (except in compliance in all material respects with all applicable
Environmental Laws); and (v) as of the date hereof, neither Borrower, nor any
Consolidated Subsidiary has received any notice or claim to the effect that it
is or may be subject to any Environmental Claim.
SECTION 4.8. Taxes.
-----
As of the date hereof, United States Federal income tax returns of the
Borrower, CESRRI and their Consolidated Subsidiaries have been prepared and
filed through the taxable year ended December 31, 1999. The Borrower, CESRRI and
their Consolidated Subsidiaries have filed all United States Federal income tax
returns and all other material tax returns which are required to be filed by
them and have paid all taxes due pursuant to such returns or pursuant to any
assessment received by the Borrower, CESRRI or any Consolidated Subsidiary,
except such taxes, if any, as are reserved against in accordance with GAAP, such
taxes as are being contested in good faith by appropriate proceedings or such
taxes, the failure to make payment of which when due and payable will not have,
in the aggregate, a Material Adverse Effect. The charges, accruals and reserves
on the books of the Borrower, CESRRI and their Consolidated Subsidiaries in
respect of taxes or other governmental charges are, in the opinion of the
Borrower, adequate.
SECTION 4.9. [Intentionally Deleted].
SECTION 4.10. Solvency.
--------
On the Closing Date and after giving effect to the transactions
contemplated by the Loan Documents occurring on the Closing Date, the Borrower
will be Solvent.
SECTION 4.11. Use of Proceeds; Margin Regulations.
-----------------------------------
All proceeds of the Loans will be used by the Borrower only in accordance
with the provisions hereof. No part of the proceeds of any Loan will be used by
the Borrower to purchase or carry any Margin Stock or to extend credit to others
for the purpose of purchasing or carrying any Margin Stock in any manner that
might violate the provisions of Regulations T, U or X of the Federal Reserve
Board. Neither the making of any Loan nor the use of the proceeds thereof will
violate or be inconsistent with the provisions of Regulations T, U or X of the
Federal Reserve
68
Board.
SECTION 4.12. Governmental Approvals.
----------------------
No order, consent, approval, license, authorization, or validation of, or
filing, recording or registration with, or exemption by, any governmental or
public body or authority, or any subdivision thereof, is required to authorize,
or is required in connection with the execution, delivery and performance of any
Loan Document or the consummation of any of the transactions contemplated
thereby other than those that have already been duly made or obtained and remain
in full force and effect or those which, if not made or obtained, would not have
a Material Adverse Effect.
SECTION 4.13. Investment Company Act; Public Utility Holding Company Act.
----------------------------------------------------------
Neither the Borrower, CESRRI nor any Consolidated Subsidiary is (x) an
"investment company" or a company "controlled" by an "investment company",
within the meaning of the Investment Company Act of 1940, as amended, (y) a
"holding company" or a "subsidiary company" of a "holding company" or an
"affiliate" of either a "holding company" or a "subsidiary company" within the
meaning of the Public Utility Holding Company Act of 1935, as amended, or (z)
subject to any other federal or state law or regulation which purports to
restrict or regulate its ability to borrow money.
SECTION 4.14. Principal Offices.
-----------------
As of the Closing Date, the principal office, chief executive office and
principal place of business of the Borrower is 11th Floor, 0000 Xxxxxxx Xxxxx,
Xxxxxxxxx, Xxxxxxxx 00000.
SECTION 4.15. REIT Status.
-----------
For the fiscal year ended December 31, 1999, CESRRI qualified and CESRRI
intends to continue to qualify as a real estate investment trust under the Code.
SECTION 4.16. Patents, Trademarks, etc.
------------------------
The Borrower has obtained and holds in full force and effect, or has
the right to use, all patents, trademarks, servicemarks, trade names, copyrights
and other such rights, free from burdensome restrictions, which are necessary
for the operation of its business as presently conducted, the impairment of
which is likely
69
to have a Material Adverse Effect.
SECTION 4.17. Ownership of Property.
---------------------
Schedule 4.17 attached hereto and made a part hereof sets forth all the
real property owned or ground leased by the Borrower and Persons in which the
Borrower, directly or indirectly, owns an interest as of the Closing Date. As of
the Closing Date, the Borrower and such Persons have good and insurable fee
simple title (or leasehold title if so designated on Schedule 4.17) to all of
such real property, subject to Permitted Liens. As of the date of this
Agreement, there are no mortgages, deeds of trust, indentures, debt instruments
or other agreements creating a Lien against any of the Real Property Assets
except as disclosed on Schedule 4.17.
SECTION 4.18. No Default.
----------
No Event of Default or, to the best of the Borrower's knowledge, Default
exists under or with respect to any Loan Document and the Borrower is not in
default in any material respect beyond any applicable grace period under or with
respect to any other material agreement, instrument or undertaking to which it
is a party or by which it or any of its property is bound in any respect, the
existence of which Event of Default, Default or default is likely to result in a
Material Adverse Effect.
SECTION 4.19. Licenses, etc.
-------------
The Borrower has obtained and does hold in full force and effect, all
franchises, licenses, permits, certificates, authorizations, qualifications,
accreditation, easements, rights of way and other consents and approvals which
are necessary for the operation of its businesses as presently conducted, the
absence of which is likely to have a Material Adverse Effect.
SECTION 4.20. Compliance With Law.
-------------------
To the Borrower's knowledge, the Borrower and each of the Real Property
Assets are in compliance with all laws, rules, regulations, orders, judgments,
writs and decrees, including, without limitation, all building and zoning
ordinances and codes, the failure to comply with which is likely to have a
Material Adverse Effect.
SECTION 4.21. No Burdensome Restrictions.
--------------------------
Except as may have been disclosed by the Borrower in writing to the
Banks,
70
Borrower is not a party to any agreement or instrument or subject to any other
obligation or any charter or corporate or partnership restriction, as the case
may be, which, individually or in the aggregate, is likely to have a Material
Adverse Effect.
SECTION 4.22. Brokers' Fees.
-------------
The Borrower has not dealt with any broker or finder with respect to the
transactions contemplated by this Agreement or otherwise in connection with this
Agreement, and the Borrower has not done any act, had any negotiations or
conversation, or made any agreements or promises which will in any way create or
give rise to any obligation or liability for the payment by the Borrower or the
Banks of any brokerage fee, charge, commission or other compensation to any
party with respect to the transactions contemplated by the Loan Documents, other
than the fees payable to the Administrative Agent and the Banks.
SECTION 4.23. Labor Matters.
-------------
As of the date hereof, there are no collective bargaining agreements or
Multiemployer Plans covering the employees of the Borrower (except for
agreements between Consolidated Engineering and the International Union of
Operating Engineers, the International Brotherhood of Electrical Workers and the
United Association of Journeymen and Apprentices of the Plumbing and Pipe
Fitting Industry of the United States and Canada) and, as of the date hereof,
the Borrower has not suffered any strikes, walkouts, work stoppages or other
material labor difficulty within the last five years.
SECTION 4.24. Insurance.
---------
The Borrower currently maintains insurance at 100% replacement cost
insurance coverage (subject to customary deductibles) in respect of each of the
Real Property Assets, as well as commercial general liability insurance
(including "builders' risk" where applicable) against claims for personal and
bodily injury and/or death, to one or more persons, or property damage, as well
as workers compensation insurance, in each case with respect to liability and
casualty insurance with insurers having an A.M. Best policyholders rating of not
less than A-VII in amounts that a prudent owner of assets such as the Real
Property Assets would maintain.
SECTION 4.25. Organizational Documents.
------------------------
The documents delivered pursuant to Section 3.1(f) constitute, as of the
71
Closing Date, all of the organizational documents (together with all amendments
and modifications thereof) of the Borrower and CESRRI. The Borrower represents
that it has delivered to the Administrative Agent true, correct and complete
copies of each of the documents set forth in this Section 4.25.
SECTION 4.26. Qualifying Unencumbered Properties.
----------------------------------
As of the date hereof, each Property listed on Exhibit F is a
Qualifying Unencumbered Property, as defined herein.
SECTION 4.27. Ownership of Borrower and Consolidated Subsidiaries.
---------------------------------------------------
Schedule 4.27 sets forth, as of the date hereof, the general partners
of Borrower and the general partners, limited partners, and members of each
Consolidated Subsidiary that is a limited partnership or a limited liability
company and their respective ownership percentages and, as of the date hereof,
there are no other partnership or membership interests outstanding. Except as
set forth or referred to in the partnership agreement or similar organizational
document of Borrower or each Consolidated Subsidiary, as of the date hereof, no
partnership or membership interest (or any securities, instruments, warrants,
option or purchase rights, conversion or exchange rights, calls, commitments or
claims of any character convertible into or exercisable for partnership
interests) of any Consolidated Subsidiary is subject to issuance under any
security, instrument, warrant, option or purchase rights, conversion or exchange
rights, call, commitment or claim of any right, title or interest therein or
thereto. All of the partnership or membership interests in Borrower and each
Consolidated Subsidiary have been issued in compliance, in all material
respects, with all applicable Requirements of Law.
SECTION 4.28. Disclosure.
----------
The representations and warranties of Borrower contained in the Loan
Documents and all certificates, financial statements and other documents
delivered to the Administrative Agent in connection therewith, do not contain
any untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements contained herein or therein, in light
of the circumstances under which they were made, not misleading. As of the
Closing Date, Borrower has not intentionally withheld any material fact from the
Administrative Agent and the Banks in regard to any matter raised in the Loan
Documents. Notwithstanding the foregoing, with respect to projections of
Borrower's future performance, such representations and warranties are made in
good faith and to the best judgment of Borrower.
SECTION 4.29. CESRRI's Ownership Interests.
----------------------------
CESSRI does not own or have any interest in any Property or any other
Person, other than its general and limited partnership interests in Borrower and
its interests in wholly-owned subsidiary corporations whose sole assets are
partnership interests of one percent (1%) or less in partnerships in which the
Borrower directly or indirectly owns a ninety-nine percent (99%) interest.
72
ARTICLE V
AFFIRMATIVE AND NEGATIVE COVENANTS
The Borrower covenants and agrees that, so long as any Bank has any
Commitment hereunder or any Obligations remain unpaid:
SECTION 5.1. Information.
-----------
The Borrower will deliver to each of the Banks each of the financial
statements and other certificates, notices and other materials described on
Schedule 5.1 on the dates required on Schedule 5.1.
SECTION 5.2. Payment of Obligations.
----------------------
The Borrower, and each of its Consolidated Subsidiaries will each pay
and discharge, at or before maturity, all its respective material obligations
and liabilities including, without limitation, any obligation pursuant to any
agreement by which it or any of its properties is bound, in each case where the
failure to so pay or discharge such obligations or liabilities is likely to
result in a Material Adverse Effect, and will maintain in accordance with GAAP,
appropriate reserves for the accrual of any of the same.
SECTION 5.3. Maintenance of Property; Insurance; Leases.
------------------------------------------
(a) The Borrower will keep, and will cause each Consolidated
Subsidiary to keep, all property useful and necessary in its business, including
without limitation the Real Property Assets (for so long as it constitutes Real
Property Assets), in good repair, working order and condition, ordinary wear and
tear excepted, in each case where the failure to so maintain and repair will
have a Material Adverse Effect.
(b) The Borrower shall maintain, or cause to be maintained,
insurance comparable to that described in Section 4.24 hereof with insurers
meeting the qualifications described therein, which insurance shall in any event
not provide for less coverage than insurance customarily carried by owners of
properties similar to, and in the same locations as, the Real Property Assets.
The Borrower will deliver to the Administrative Agent upon the reasonable
request of the Administrative Agent from time to time (i) full information as to
the insurance carried, (ii) within five (5) days of receipt of notice from any
insurer a copy of any notice of cancellation or material change in coverage from
that existing on the date of this Agreement and (iii) forthwith, notice of any
cancellation or nonrenewal of
73
coverage by the Borrower.
SECTION 5.4. Conduct of Business and Maintenance of Existence.
------------------------------------------------
The Borrower and CESRRI will continue to engage in business of the same
general type as now conducted by the Borrower and CESRRI, and each will
preserve, renew and keep in full force and effect, its partnership, corporate or
trust existence, as applicable, and its respective rights, privileges and
franchises necessary for the normal conduct of business unless the failure to
maintain such rights and franchises does not have a Material Adverse Effect.
SECTION 5.5. Compliance with Laws.
--------------------
The Borrower will and will cause its Subsidiaries to comply in all
material respects with all applicable laws, ordinances, rules, regulations, and
requirements of governmental authorities (including, without limitation,
Environmental Laws, and all zoning and building codes with respect to the Real
Property Assets and ERISA and the rules and regulations thereunder and all
federal securities laws) except where the necessity of compliance therewith is
contested in good faith by appropriate proceedings or where the failure to do so
will not have a Material Adverse Effect or will not expose the Administrative
Agent or any of the Banks to any material liability therefor.
SECTION 5.6. Inspection of Property, Books and Records.
-----------------------------------------
The Borrower will keep proper books of record and account in which
full, true and correct entries shall be made of all dealings and transactions in
relation to its business and activities in conformity with GAAP, modified as
required by this Agreement and applicable law, and will permit representatives
of any Bank at such Bank's expense to visit and inspect any of its properties,
including without limitation the Real Property Assets, to examine and make
abstracts from any of its books and records and to discuss its affairs, finances
and accounts with its officers and independent public accountants, all at such
reasonable times during normal business hours, upon reasonable prior notice and
as often as may reasonably be desired. Administrative Agent shall coordinate any
such visit or inspection by any Bank requesting any such visit or inspection.
SECTION 5.7. Existence.
---------
The Borrower shall do or cause to be done, all things necessary to
preserve and keep in full force and effect its, CESRRI's and their Consolidated
Subsidiaries, existence and their respective patents, trademarks, servicemarks,
tradenames,
74
copyrights, franchises, licenses, permits, certificates, authorizations,
qualifications, accreditation, easements, rights of way and other rights,
consents and approvals, the nonexistence of which is likely to have a Material
Adverse Effect.
SECTION 5.8. Financial Covenants.
-------------------
(a) EBITDA to Fixed Charges.
-----------------------
The ratio of EBITDA to Fixed Charges shall not be less than 1.75:1.
(b) Minimum Equity Value.
--------------------
Equity Value shall not be less than the Minimum Equity Value, provided
that any increase in the Minimum Equity Value resulting from the receipt of Net
Offering Proceeds during any fiscal year shall only become effective as of the
last day of the applicable fiscal year.
(c) Leverage Ratio.
---------------
The Leverage Ratio shall not exceed fifty-seven and one-half percent
(57.5%).
(d) EBITDA to Interest Expense Ratio.
--------------------------------
The ratio of EBITDA to Interest Expense shall not be less than 2.0:1.
(e) Unencumbered NOI to Unsecured Debt Service Ratio.
------------------------------------------------
The ratio of Unencumbered NOI to Unsecured Debt Service shall not be
less than 2.0:1. For the purposes of calculating Unencumbered NOI in connection
with this ratio, Unencumbered NOI shall be calculated on an annualized basis
based upon the Qualifying Unencumbered Properties as of the end of the
applicable Fiscal Quarter, or other date of determination.
(f) Distributions.
-------------
(i) Subject to Section 5.8(f)(ii) below, aggregate
distributions to holders of all common and preferred OP Units of Borrower shall
not exceed the greater of (i) ninety percent (90%) of Funds from Operations, in
each case for the four (4) consecutive Fiscal Quarters ending on the last day of
each Fiscal Quarter, or (ii) the minimum amount that must be distributed to all
partners of Borrower so that CESRRI will receive sufficient distributions to
enable it to distribute to its
75
shareholders the amount required to remain qualified as a real estate investment
trust as defined in Section 856 of the Internal Revenue Code (or any successor
provision thereto).
For purpose of this Section 5.8, the term "distributions" shall mean
and include all dividends and other distributions to, and the repurchase of
stock or limited partnership interests from, the holder of any equity interests
in Borrower or CESRRI. Notwithstanding the above, distributions shall not
include payments of cash in connection with the redemption or repurchase of OP
Units where the Borrower is obligated to any Person (other than CESRRI) to do so
in accordance with the provisions of Borrower's limited partnership agreement or
the purchase of stock for the purpose of obtaining the consideration to be
provided to a Person transferring a Property to the Borrower or a Consolidated
Subsidiary where the market price of such stock is below the value attributed to
such stock in the purchase agreement.
(ii) Aggregate distributions during the continuance of any
Event of Default shall not exceed the amount described in clause (ii) of Section
5.8(f)(i) above, provided that the parties hereto expressly acknowledge that
this Section 5.8(f)(ii) shall in no event limit or restrict in any way any of
Administrative Agent's or any Bank's rights, remedies or recourse under this
Agreement or any other Loan Document.
(g) Permitted Investments
---------------------
Notwithstanding the limitations set forth in Section 5.10, Borrower may
make the following investments ("Permitted Investments"), so long as (a) the
aggregate amount of all Permitted Investments does not exceed, at any time and
without duplication, fifteen percent (15%) of Market Value, and (b) the
aggregate amount of each of the following categories of Permitted Investments
does not exceed the following amounts unless approved by the Required Banks:
Permitted Investments Maximum Amount
--------------------- --------------
Land: Ten percent (10%) of Market Value.
Non-Apartment Properties: Ten percent (10%) of Market Value,
excluding the Skyline Retail
Property.
Securities: Ten percent (10%) of Market Value,
excluding the Securities of Xxxxx
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Realty Company, Consolidated
Engineering, Xxxxx Management
Construction, Inc., Brandywine
Associates, and other Property
Service Businesses.
Investment Mortgages: Ten percent (10%) of Market Value.
For purposes of this Section 5.8(g), the aggregate amount of Permitted
Investments and the amounts of Permitted Investments in any category will be
reduced by the applicable value of any Permitted Investment that is disposed of
or is no longer invested in a Permitted Investment. Investments in partnerships,
joint ventures and other non-public entities will be treated as investments in
the assets owned by such partnerships, joint ventures and other entities,
provided that Borrower owns in excess of fifty percent (50%) of any such
partnership, joint venture or other entity. The value of each asset used in the
calculation of the foregoing limitations shall be the value of such asset used
in the determination of Market Value.
(h) Properties under Development.
----------------------------
(i) The Borrower shall not permit the aggregate Budgeted Project
Costs of Properties under Development at any time to exceed twenty-five percent
(25%) of Market Value.
(ii) The Borrower shall not permit the Property Purchase Contract
Obligations at any time to exceed twenty percent (20%) of Market Value.
(iii) The Borrower shall not permit the sum of the Budgeted Project
Costs of Properties under Development and the Property Purchase Contract
Obligations at any time to exceed thirty-five percent (35%) of Market Value.
(i) Maximum Leverage on Unencumbered Assets.
---------------------------------------
Unsecured Debt shall not exceed fifty-five percent (55%) of Unencumbered
Asset Value.
(j) Secured Debt.
------------
(i) Secured Debt shall be Non-Recourse Indebtedness, except for
Permitted Recourse Debt, and the ratio of Secured Debt to Market Value shall not
exceed the amounts determined as set forth below:
77
Ratio of Unencumbered Ratio of Unsecured Maximum Permitted
NOI to Unsecured Debt to Unencumbered Ratio of Secured Debt
Debt Service Asset Value to Market Value
Level I ***4.0:1 *25% *55%
Level II *3.0:1 ****4.0:1 ***25% to *33.34% *50%
Level III **2.0:1 ****3.0:1 ***33.34% to *55% *45%
* Less than
** More than
*** more than or equal to
**** less than or equal to
The ratio of Unencumbered NOI to Unsecured Debt Service shall be calculated as
provided in subsection (e) above and the ratio of Unsecured Debt to Unencumbered
Asset Value shall be calculated as provided in subsection (i) above. In the
event that the ratio of Unencumbered NOI to Unsecured Debt Service shall be on a
level different from the ratio of Unsecured Debt to Unencumbered Asset Value on
the above chart, the lower level of the two ratios shall be used to determine
the maximum permitted ratio of Secured Debt to Market Value. By way of example,
if the ratio of Unencumbered NOI to Unsecured Debt Service shall be on Level I
and the ratio of Unsecured Debt to Unencumbered Asset Value shall be on Level
II, the maximum permitted ratio of Secured Debt to Market Value shall be based
upon Level II, or 50%.
(ii) The Borrower shall not permit Permitted Recourse Debt to
exceed fifteen percent (15%) of Market Value.
(k) [INTENTIONALLY OMITTED]
(l) Calculation.
-----------
Each of the foregoing ratios and financial requirements shall be
calculated as of the last day of each Fiscal Quarter, but the covenants
contained in subsections (b), (c), (e), (g), (h), (i) and (j) shall be
satisfied, to the best of Borrower's knowledge, at all times. For purposes of
determining compliance with subsections (a), (d), (e) and (f), the period
covered thereby shall be the immediately preceding four (4) Fiscal Quarters (for
the purpose of Section 5.8(e), any Property which is owned for less than the
full period shall be annualized based upon the period of ownership). When
required under Section 2.4(a) in connection with a
78
Notice of Borrowing, or under Section 2.3 in connection with a Money Market Loan
Request, or at such other times as Borrower may elect, an updated Compliance
Certificate shall be submitted by the Borrower to the Administrative Agent for
the sole purpose of providing revised calculations of the covenants contained in
Section 5.8(e) and (i) updated from the calculation thereof in the last
Compliance Certificate submitted prior thereto reflecting the amount of the
additional Borrowing and any other additional Unsecured Debt incurred since the
most recent Compliance Certificate based upon the debt service applicable
thereto as determined in accordance with the definition of Unsecured Debt
Service. In connection with the addition or removal of a Qualifying Unencumbered
Property or a transaction contemplated in Section 5.17, but only if required
under Section 5.14, an updated Compliance Certificate shall also be submitted by
the Borrower to the Administrative Agent for the sole purpose of providing
revised calculations of the covenants contained in Section 5.8(e) and (i)
updated from the calculation thereof in the last Compliance Certificate
submitted prior thereto reflecting a proforma calculation of Unencumbered NOI
using the available historical information for the applicable Qualifying
Unencumbered Property and the value thereof as determined in accordance with the
definition of Unencumbered Asset Value.
SECTION 5.9. Restriction on Fundamental Changes.
----------------------------------
(a) Neither the Borrower nor CESRRI shall enter into any merger or
consolidation, unless (i) the Borrower or CESRRI is the surviving entity (except
in the case of a merger solely for the purpose of changing the corporate status
of CESRRI to a real estate investment trust), (ii) the entity which is merged
into Borrower or CESRRI is predominantly in the commercial real estate business,
and (iii) the merger or consolidation does not have a Material Adverse Effect.
Neither the Borrower nor CESRRI shall liquidate, wind-up or dissolve (or suffer
any liquidation or dissolution), discontinue its business or convey, lease,
sell, transfer or otherwise dispose of, in one transaction or series of
transactions, all or substantially all of its business or property, whether now
or hereafter acquired. Nothing in this Section 5.9(a) shall be deemed to
prohibit the sale or leasing of portions of the Real Property Assets in the
ordinary course of business.
(b) The Borrower shall not amend its agreement of limited
partnership or other organizational documents in any manner that would be
materially adverse to the Banks without the Administrative Agent's consent,
which shall not be unreasonably withheld. CESRRI shall not amend its articles of
incorporation, by-laws, or other organizational documents in any manner that
would be materially adverse to the Banks without the Administrative Agent's
consent, which shall not be unreasonably withheld.
79
(c) The Borrower shall deliver to Administrative Agent copies of
all amendments to its agreement of limited partnership or to CESRRI's, articles
of incorporation or declaration of trust, by-laws, or other organizational
documents no less than thirty (30) days after the effective date of any such
amendment.
SECTION 5.10. Changes in Business.
-------------------
Neither the Borrower nor CESRRI shall enter into any business which is
substantially different from the ownership, operation and development of
primarily multifamily residential properties and the provision of services
relating to real estate property, including the businesses operated by the
Property Service Businesses. The Borrower shall carry on its business operations
through the Borrower and its Subsidiaries.
SECTION 5.11. Margin Stock.
------------
None of the proceeds of any Loan will be used, directly or indirectly,
for the purpose, whether immediate, incidental or ultimate, of buying or
carrying any Margin Stock in any manner that might violate the provisions of
Regulations T, U or X of the Federal Reserve Board.
SECTION 5.12. Hedging Requirements.
--------------------
Within five (5) Domestic Business Days after the last day of each
calendar quarter, the Borrower shall have in effect "Interest Rate Xxxxxx" on
Borrower Debt so that Borrower's Floating Rate Indebtedness shall not exceed
twenty percent (20%) of Market Value. "Interest Rate Xxxxxx" shall mean interest
rate exchange, collar, cap, swap, adjustable strike cap, adjustable strike
corridor or similar agreements, each of which (i) shall have a minimum term
ending on the then-applicable Maturity Date or, in the case of loans pursuant to
which interest shall accrue at a rate other than a fixed rate, a term equal to
the term of such floating rate loan (to the extent the term of such floating
rate loan is less than the period ending on the then-applicable Maturity Date),
(ii) shall have the effect of capping the interest rates covered thereby at a
rate equal to or lower than the Hedge Rate at the time of purchase or execution,
and (iii) shall be with the Administrative Agent or an Approved Bank as the
counterparty. The Borrower shall submit evidence of its compliance with Interest
Rate Xxxxxx to the Administrative Agent together with the certificate required
to be delivered by the Borrower pursuant to Schedule 5.1(c).
SECTION 5.13. CESRRI Status.
-------------
80
(a) Status. CESRRI shall at all times (i) maintain at least
------
one class of common shares having trading privileges on the New York Stock
Exchange, or American Stock Exchange, or which is the subject of price
quotations in the over-the-counter market as reported by the National
Association of Securities Dealers Automated Quotation System and (ii) maintain
its status as a self-directed and self-administered real estate investment trust
under the Code.
(b) Indebtedness. (i) CESRRI shall not directly or indirectly,
------------
create, incur, assume or otherwise become or remain directly or indirectly
liable with respect to, any Indebtedness, including, without limitation, any
Contingent Obligation.
(ii) CESRRI shall not permit any of its subsidiaries, the
Borrower or any of the Borrower's Subsidiaries to, directly or indirectly,
create, incur, assume or otherwise become or remain directly or indirectly
liable with respect to, any Indebtedness, including, without limitation, any
Contingent Obligation, except:
(A) the Obligations; and
(B) Indebtedness which, after giving effect thereto,
may be incurred or may remain outstanding without giving rise to an Event of
Default or Default under any provision of this Article V.
(c) Restriction on Fundamental Changes.
----------------------------------
(1) CESRRI shall not have an Investment in any Person
other than Borrower, and the interests identified on Schedule
5.13(c)(1) as being owned by CESRRI.
(2) CESRRI shall not acquire an interest in any Property
other than Securities issued by Borrower, and the interests identified
on Schedule 5.13(c)(2).
(d) Offering and Debt Proceeds. CESRRI shall concurrently
----------------------------
contribute to the Borrower all Net Offering Proceeds and all CESRRI Debt
Proceeds upon receipt thereof by CESRRI.
(e) Disposal of Partnership Interests. CESRRI will not
---------------------------------
directly or indirectly convey, sell, transfer, assign, pledge or otherwise
encumber or dispose of any of its partnership interests in Borrower or any of
its stock, partnership or other interests in any of its wholly-owned
subsidiaries which own interests in any
81
Wholly-Owned Consolidated Subsidiary which is the owner of one or more
Qualifying Unencumbered Properties or which is the owner of any Lien described
in subparagraph h of the definition of "Permitted Liens", except for the
reduction of CESRRI's interest in the Borrower arising from Borrower's issuance
of partnership interests in the Borrower or the retirement of preference units
by Borrower, and except for the redemption of OP Units in connection with the
repurchase or redemption of stock by CESRRI.
SECTION 5.14. Acceptance of Qualifying Unencumbered Properties
------------------------------------------------
(a) The Banks have accepted the Properties listed on Exhibit F as of
the Effective Date as Qualifying Unencumbered Properties. If the Borrower
desires to add a Property as a Qualifying Unencumbered Property, the Borrower
shall so notify the Administrative Agent in writing. To the extent that
increased Loan Availability is necessary in order for a Borrowing to be
permitted, such notification shall be delivered to the Administrative Agent at
least five (5) Domestic Business Days prior to the submission of the applicable
Notice of Borrowing or Money Market Loan Request. The Property will be accepted
as a Qualifying Unencumbered Property when the Borrower delivers to the
Administrative Agent a certificate that the Property is a Qualifying
Unencumbered Property in the form attached hereto as Exhibit K, as well as the
following in form and substance satisfactory to the Administrative Agent:
(i) with respect to any Property being acquired by Borrower
or a Wholly-Owned Consolidated Subsidiary, a copy of the relevant
materials relating to such Property submitted by the Borrower to its
board of directors, executive committee or investment committee, as
applicable for their approval, or such other materials as Borrower
deems relevant, as well as a copy of the environmental report, if
requested by the Administrative Agent, and, if applicable, any ground
lease affecting such Property; and
(ii) if required under Section 2.3 or 2.4(a), or if the
Borrower otherwise so elects, an updated Compliance Certificate as
described in Section 5.8(l); and
(iii) if such Property is subject to a lien permitted under
subsection h of the definition of Permitted Liens, all of the materials
required under such subsection h.
Following receipt of the foregoing certificate, documents and
information, the Administrative Agent shall review them as expeditiously as is
reasonably practicable under the circumstances but in any event within five (5)
Domestic Business Days of receipt of all such documents and information. If,
following such
82
review, the Administrative Agent has confirmed that such Property constitutes a
Qualifying Unencumbered Property, the Administrative Agent will promptly send
copies of the applicable certificate concerning Qualifying Unencumbered Property
status and the related property information and, if applicable, copies of the
Compliance Certificate updating the calculation of the covenants contained in
Section 5.8(e) and (i), to the Banks. If, following such review, the
Administrative Agent determines that such Property does not constitute a
Qualifying Unencumbered Property or that Administrative Agent does not have
sufficient information or documents to determine whether the Property
constitutes a Qualifying Unencumbered Property, the Administrative Agent will
promptly so notify the Borrower that the Property shall not be deemed to be a
Qualifying Unencumbered Property.
(b) If, following a determination by the Administrative Agent that a
Property does not constitute a Qualifying Unencumbered Property, the Borrower
shall so request that the Administrative Agent submit such Property to the Banks
for the approval by the Required Banks, the Administrative Agent will submit
such documents and information to the other Banks for their review. The Borrower
also shall have the right, while acknowledging that a Property does not meet the
standards of a Qualifying Unencumbered Property, to submit the applicable
documents and information described in subparagraph (a) above to the
Administrative Agent and the Banks, and request that such Property nevertheless
be accepted by the Required Banks as a Qualifying Unencumbered Property. Each
Bank shall notify the Administrative Agent whether it approves or rejects of the
designation of such Property as a Qualifying Unencumbered Property within ten
(10) Domestic Business Days of receipt of such documents and information. If a
Bank shall fail to so notify the Administrative Agent, then such Bank shall be
deemed to have accepted such Property. If, following such review, the Property
is approved by the Required Banks, such Property shall immediately become a
Qualifying Unencumbered Property. If, following such review, the Property is
rejected by the Required Banks, the Administrative Agent will promptly so notify
the Borrower.
(c) From time to time the Borrower may elect that a Property cease to
be a Qualifying Unencumbered Property. Such election shall be in writing and
shall be effective upon delivery to the Administrative Agent, provided that, if
the ceasing of such Property to constitute a Qualifying Unencumbered Property
shall result in a reduction in Loan Availability or result in a violation of any
other limitation affecting the Qualifying Unencumbered Properties, such election
shall be delivered to the Administrative Agent five (5) Domestic Business Days
before such election shall become effective. Such election shall become
effective on such fifth Domestic Business Day so long as:
83
(i) no Default or Event of Default shall have occurred and be
continuing both at the time of such election and immediately after
giving effect to such election; and
(ii) the Borrower shall have delivered to the Administrative
Agent an updated Compliance Certificate with such election in
accordance with Section 5.8(l) demonstrating on a pro forma basis that
the Borrower will remain in compliance with Section 2.1 and 5.8 (e) and
(i) hereof after giving effect to such request and any prepayment to be
made and/or the acceptance of any Property as an additional or
replacement Qualifying Unencumbered Property to be given concurrently
with such request, and the Administrative Agent shall have reviewed and
accepted such updated Compliance Certificate.
(d) A Property shall cease to be included in the calculation of
Unencumbered Asset Value and its Net Operating Income shall cease to be included
in the calculation of Unencumbered NOI if it shall cease to be a Qualifying
Unencumbered Property.
SECTION 5.15. Payment of Taxes and Claims.
---------------------------
Borrower shall pay (i) all taxes, assessments and other governmental
charges imposed upon it or on any of its properties or assets or in respect of
any of its franchises, business, income or property before any penalty or
interest accrues thereon, the failure to make payment of which will have a
Material Adverse Effect on Borrower, and (ii) all claims (including, without
limitation, claims for labor, services, materials and supplies) for sums,
material in the aggregate to Borrower, which have become due and payable and
which by law have or may become a Lien other than a judgment lien upon any of
Borrower's properties or assets, prior to the time when any penalty or fine
shall be incurred with respect thereto.
SECTION 5.16. Maintenance of Permits, Etc.
----------------------------
Borrower will maintain in full force and effect all Permits,
franchises, patents, trademarks, trade names, copyrights, authorizations or
other rights necessary for the operation of its business, except where the
failure to obtain any of the foregoing would not have a Material Adverse Effect
on Borrower; and notify Administrative Agent in writing, promptly after learning
thereof, of the suspension, cancellation, revocation or discontinuance of or of
any pending or threatened action or proceeding seeking to suspend, cancel,
revoke or discontinue any material Permit, patent, trademark, trade name,
copyright, governmental approval, franchise, authorization or right, except
where such suspension, cancellation, revocation or discontinuance would not have
a Material Adverse Effect.
SECTION 5.17. Disposal of Consolidated Subsidiary Interests.
---------------------------------------------
84
Neither Borrower nor CESRRI will directly or indirectly convey, sell,
transfer, assign, pledge or otherwise encumber or dispose of any of its
partnership or membership interests, whether owned directly or indirectly
through other Persons, in any Wholly-Owned Consolidated Subsidiary at any time
when such Wholly-Owned Consolidated Subsidiary owns a Qualifying Unencumbered
Property or owns a Lien described in subparagraph h of the definition of
"Permitted Liens", unless, after giving effect to such transaction, there is no
Default or Event of Default hereunder, including, without limitation, a breach
of Section 5.8 hereof. Upon any such sale, transfer, assignment, pledge,
encumbrance or disposal of any partnership or membership interests in accordance
with this Section 5.17, each Qualifying Unencumbered Property owned by the
applicable Wholly-Owned Consolidated Subsidiary or encumbered by a Lien owned by
the applicable Wholly-Owned Consolidated Subsidiary shall cease to be a
Qualifying Unencumbered Property. Borrower shall provide the Administrative
Agent with an updated Compliance Certificate pursuant to Section 5.8(1)
demonstrating Borrower's continued compliance prior to the consummation of any
such transaction.
SECTION 5.18. Environmental Liabilities.
-------------------------
Neither Borrower nor any of its Subsidiaries shall become subject to
any Environmental Claim which has a Material Adverse Effect, including any
arising out of or related to (i) the release or threatened release of any
Material of Environmental Concern into the environment, or any remedial action
in response thereto, or (ii) any violation of any Environmental Laws.
Notwithstanding the foregoing provision, the Borrower shall have the right to
contest in good faith any claim of violation of an Environmental Law by
appropriate legal proceedings and shall be entitled to postpone compliance with
the obligation being contested as long as (i) no Event of Default shall have
occurred and be continuing, (ii) the Borrower shall have given Administrative
Agent prior written notice of the commencement of such contest, (iii)
noncompliance with such Environmental Law shall not subject the Borrower or such
Subsidiary to any criminal penalty or subject Administrative Agent, or any Bank
to pay any civil penalty or to prosecution for a crime, and (iv) no portion of
any Property material to Borrower or its condition or prospects shall be in
substantial danger of being sold, forfeited or lost, by reason of such contest
or the continued existence of the matter being contested.
SECTION 5.19. Wholly Owned Consolidated Subsidiaries.
--------------------------------------
CESRRI and Borrower shall not permit any Wholly-Owned Consolidated
Subsidiary which owns a Qualifying Unencumbered Property and any Wholly-Owned
Consolidated Subsidiary which owns a Lien described in subparagraph h of the
definition of "Permitted Liens", to:
(a) issue, assume or incur any Indebtedness or Contingent
Obligations, provided that nothing contained herein
shall affect the right of such Wholly-Owned Consolidated
Subsidiary to acquire any primarily multi-family
residential Property subject to Secured Debt, so long as
(i) the Secured Debt shall
85
constitute Non-Recourse Indebtedness, (ii) the amount of
the Secured Debt shall not exceed the Aggregate Purchase
Price thereof if acquired from a party other than
Borrower or a Subsidiary or the value thereof as
reasonably determined by the Administrative Agent if
acquired from the Borrower or a Subsidiary and (iii) the
Borrower shall cause such Secured Debt to be repaid in
full within ninety (90) days following the acquisition
of the applicable Property;
(b) grant, assume or incur any Lien, except as permitted for
the ninety (90) day period provided for in subparagraph
(a) above, and except for Permitted Liens (other than
Liens described in subparagraph g of the definition of
"Permitted Liens");
(c) acquire interests in any other corporation, partnership,
limited liability company or other entity, provided that
nothing contained herein shall affect the right of such
Wholly-Owned Consolidated Subsidiary to acquire any
primarily multi-family residential Property;
(d) if such Wholly-Owned Consolidated Subsidiary owns a
Qualifying Unencumbered Property, engage in any other
business other than the ownership of primarily multi-
family residential Properties and the Skyline Retail
Property;
(e) if such Wholly-Owned Subsidiary owns a Lien described in
subparagraph h of the definition of Permitted Liens,
engage in any other business other than the owning of
such Lien and indebtedness secured thereby and the
owning of any other Liens and the related secured
indebtedness of other Wholly-Owned Consolidated
Subsidiaries; or
(f) have as its managing general partner or managing member
any party other than the Borrower.
ARTICLE VI
DEFAULTS
SECTION 6.1. Events of Default.
-----------------
If one or more of the following events (each, an "Event of Default")
shall have occurred and be continuing:
(a) the Borrower shall fail to pay when due any principal of
any Loan, or the Borrower shall fail to pay when due interest on any Loan or any
fees or any other amount payable hereunder and, except for the payments due on
the
86
Maturity Date, the same shall continue for a period of ten (10) days after the
same becomes due;
(b) the Borrower or CESRRI, as applicable, shall fail to
observe or perform any covenant contained in Section 5.8, Section 5.9(a) or (b),
or Sections 5.10 to 5.13, inclusive;
(c) the Borrower or CESRRI, as applicable, shall fail to
observe or perform any covenant or agreement contained in this Agreement (other
than those covered by clauses (a), (b), (d), (e), (f), (g), (h), (j), (n), (o)
or (p) of this Section 6.1 which clauses either provide for no notice or grace
period, or for a different notice or grace period) for thirty (30) days after
written notice thereof has been given to the Borrower by the Administrative
Agent, or, if such default is of such a nature that it cannot with reasonable
effort be completely remedied within said period of thirty (30) days, such
additional period of time as may be reasonably necessary to cure same, provided
Borrower commences such cure within said thirty (30) day period and diligently
prosecutes same, until completion, but in no event shall such extended period
exceed ninety (90) days;
(d) any representation, warranty, certification or statement
made by the Borrower in this Agreement or in any certificate, financial
statement or other document delivered pursuant to this Agreement shall prove to
have been incorrect in any material respect when made (or deemed to be made) and
the defect causing such representation or warranty to be incorrect when made (or
deemed to be made) is not removed within thirty (30) days after written notice
thereof from Administrative Agent to Borrower;
(e) the Borrower, or any Subsidiary shall default in the
payment when due (whether by scheduled maturity, required prepayment,
acceleration, demand or otherwise) of any amount owing in respect of any
Recourse Debt (other than the Obligations) for which the aggregate outstanding
principal amount exceeds Five Million Dollars ($5,000,000) and such default
shall continue beyond the giving of any required notice and the expiration of
any applicable grace period and such default has not been waived, in writing, by
the holder of any such Recourse Debt; or the Borrower, or any Subsidiary shall
default in the performance or observance of any obligation or condition with
respect to any such Recourse Debt or any other event shall occur or condition
exist beyond the giving of any required notice and the expiration of any
applicable grace period, if the effect of such default, event or condition is to
accelerate the maturity of any such Recourse Debt or to permit (without any
further requirement of notice or lapse of time) the holder or holders thereof,
or any trustee or agent for such holders, to accelerate the maturity of any such
Recourse Debt;
87
(f) the Borrower, CESRRI or any Consolidated Subsidiary shall
commence a voluntary case or other voluntary proceeding seeking liquidation,
reorganization or other relief with respect to itself or its debts under any
bankruptcy, insolvency or other similar law now or hereafter in effect or
seeking the appointment of a trustee, receiver, liquidator, custodian or other
similar official of it or any substantial part of its property, or shall consent
to any such relief or to the appointment of or taking possession by any such
official in an involuntary case or other proceeding commenced against it, or
shall make a general assignment for the benefit of creditors, or shall fail
generally to pay its debts as they become due, or shall take any action to
authorize any of the foregoing;
(g) an involuntary case or other proceeding shall be commenced
against the Borrower, CESRRI or any Consolidated Subsidiary seeking liquidation,
reorganization or other relief with respect to it or its debts under any
bankruptcy, insolvency or other similar law now or hereafter in effect or
seeking the appointment of a trustee, receiver, liquidator, custodian or other
similar official of it or any substantial part of its property, and such
involuntary case or other proceeding shall remain undismissed and unstayed for a
period of ninety (90) days; or an order for relief shall be entered against the
Borrower, CESRRI or any Consolidated Subsidiary under the federal bankruptcy
laws as now or hereafter in effect;
(h) one or more final, non-appealable judgments or decrees in
an aggregate amount of Five Million Dollars ($5,000,000) or more shall be
entered by a court or courts of competent jurisdiction against the Borrower,
CESRRI or its Consolidated Subsidiaries (other than any judgment as to which,
and only to the extent, a reputable insurance company has acknowledged coverage
of such claim in writing) and (i) any such judgments or decrees shall not be
stayed, discharged, paid, bonded or vacated within thirty (30) days or (ii)
enforcement proceedings shall be commenced by any creditor on any such judgments
or decrees and not stayed or enjoined before having a Material Adverse Effect;
(i) there shall be a change in the majority of the directors
or trustees, as applicable, of CESRRI during any twelve (12) month period,
excluding any change in directors or trustees resulting from (x) the death or
disability of any director or trustee, or (y) satisfaction of any requirement
for the majority of the members of the board of directors or trustees of CESRRI
to qualify under applicable law as independent trustees or directors or (z) the
replacement of any director or trustee who is an officer or employee of CESRRI
or an affiliate of CESRRI with any other officer or employee of CESRRI or an
affiliate of CESRRI;
(j) any Person (including affiliates of such Person) or
"group" (as
88
such term is defined in applicable federal securities laws and regulations)
shall acquire more than thirty percent (30%) of the common shares of CESRRI;
(k) [INTENTIONALLY OMITTED]
(1) if any Termination Event with respect to a Plan shall
occur as a result of which Termination Event or Events any member of the ERISA
Group has incurred or may incur any liability to the PBGC or any other Person
and the sum (determined as of the date of occurrence of such Termination Event)
of the insufficiency of such Plan and the insufficiency of any and all other
Plans with respect to which such a Termination Event shall occur and be
continuing (or, in the case of a Multiemployer Plan with respect to which a
Termination Event described in clause (ii) of the definition of Termination
Event shall occur and be continuing, the liability of the Borrower) is equal to
or greater than Ten Million Dollars ($10,000,000) and which the Administrative
Agent reasonably determines will have a Material Adverse Effect;
(m) if, any member of the ERISA Group shall commit a failure
described in Section 402(f)(1) of ERISA or Section 412(n)(1) of the Code and the
amount of the lien determined under Section 402(f)(3) of ERISA or Section
412(n)(3) of the Code that could reasonably be expected to be imposed on any
member of the ERISA Group or their assets in respect of such failure shall be
equal to or greater than Ten Million Dollars ($10,000,000) and which the
Administrative Agent reasonably determines will have a Material Adverse Effect;
(n) at any time, for any reason the Borrower seeks to
repudiate its obligations under any Loan Document;
(o) a default beyond any applicable notice or grace period
under any of the other Loan Documents; or
(p) an Event of Default shall occur under the $100,000,000
Credit Agreement.
SECTION 6.2. Rights and Remedies.
-------------------
(a) Upon the occurrence of any Event of Default described in
Sections 6.1(f) or (g), the Commitments shall immediately terminate and the
unpaid principal amount of, and any and all accrued interest on, the Loans and
any and all accrued fees and other obligations hereunder shall automatically
become immediately due and payable, with all additional interest from time to
time accrued thereon and without presentation, demand, or protest or other
requirements of any
89
kind (including, without limitation, valuation and appraisement, diligence,
presentment, notice of intent to demand or accelerate and notice of
acceleration), all of which are hereby expressly waived by the Borrower; and
upon the occurrence and during the continuance of any other Event of Default,
the Administrative Agent may (and upon the demand of the Required Banks shall),
by written notice to the Borrower, in addition to the exercise of all of the
rights and remedies permitted the Administrative Agent and the Banks at law or
in equity or under any of the other Loan Documents, declare the Commitments
terminated and the unpaid principal amount of and any and all accrued and unpaid
interest on the Loans and any and all accrued fees and other obligations
hereunder to be, and the same shall thereupon be, immediately due and payable
with all additional interest from time to time accrued thereon and (except as
otherwise provided in the Loan Documents) without presentation, demand, or
protest or other requirements of any kind (including, without limitation,
valuation and appraisement, diligence, presentment, notice of intent to demand
or accelerate and notice of acceleration), all of which are hereby expressly
waived by the Borrower.
(b) Notwithstanding anything to the contrary contained in this
Agreement or in any other Loan Document, the Administrative Agent, and the Banks
each agree that any exercise or enforcement of the rights and remedies granted
to the Administrative Agent or the Banks or the Fronting Bank under this
Agreement or at law or in equity with respect to this Agreement or any other
Loan Documents shall be commenced and maintained by the Administrative Agent on
behalf of the Administrative Agent and/or the Banks and/or the Fronting Bank.
The Administrative Agent shall act at the direction of the Required Banks in
connection with the exercise of any and all remedies at law, in equity or under
any of the Loan Documents or, if the Required Banks are unable to reach
agreement, then, from and after an Event of Default, the Administrative Agent
may pursue such rights and remedies as it may determine.
SECTION 6.3. Notice of Default.
-----------------
The Administrative Agent shall give notice to the Borrower under
Section 6.1(c) promptly upon being requested to do so by the Required Banks and
shall thereupon notify all the Banks thereof. The Administrative Agent shall not
be deemed to have knowledge or notice of the occurrence of any Default or Event
of Default (other than nonpayment of principal of or interest on the Loans)
unless Administrative Agent has received notice in writing from a Bank or
Borrower referring to this Agreement or the other Loan Documents, describing
such event or condition. Should Administrative Agent receive notice of the
occurrence of a Default or Event of Default expressly stating that such notice
is a notice of a Default or Event of Default, or should Administrative Agent
send Borrower a notice
90
of Default or Event of Default, Administrative Agent shall promptly give notice
thereof to each Bank.
SECTION 6.4. Actions in Respect of Letters of Credit.
---------------------------------------
(a) If, at any time and from time to time, any Letter of Credit
shall have been issued hereunder and an Event of Default shall have occurred and
be continuing, then, upon the occurrence and during the continuation thereof,
the Administrative Agent may, and upon the demand of the Required Banks shall,
whether in addition to the taking by the Administrative Agent of any of the
actions described in this Article VI or otherwise, make a demand upon the
Borrower to, and forthwith upon such demand (but in any event within ten (10)
days after such demand) the Borrower shall pay to the Administrative Agent, on
behalf of the Banks, in same day funds at the Administrative Agent's office
designated in such demand, for deposit in a special cash collateral account (the
"Letter of Credit Collateral Account") to be maintained in the name of the
Administrative Agent (on behalf of the Banks) and under its sole dominion and
control at such place as shall be designated by the Administrative Agent, an
amount equal to the amount of the Letter of Credit Usage under the Letters of
Credit. Interest shall accrue on the Letter of Credit Collateral Account at a
rate equal to the rate on overnight funds.
(b) The Borrower hereby pledges, assigns and grants to the
Administrative Agent, as administrative agent for its benefit and the ratable
benefit of the Banks a lien on and a security interest in, the following
collateral (the "Letter of Credit Collateral"):
(i) the Letter of Credit Collateral Account, all cash
deposited therein and all certificates and instruments, if any, from time to
time representing or evidencing the Letter of Credit Collateral Account;
(ii) all notes, certificates of deposit and other instruments
from time to time hereafter delivered to or otherwise possessed by the
Administrative Agent for or on behalf of the Borrower in substitution for or in
respect of any or all of the then existing Letter of Credit Collateral;
(iii) all interest, dividends, cash, instruments and other
Property from time to time received, receivable or otherwise distributed in
respect of or in exchange for any or all of the then existing Letter of Credit
Collateral; and
(iv) to the extent not covered by the above clauses, all
proceeds of any or all of the foregoing Letter of Credit Collateral.
91
The lien and security interest granted hereby secures the payment of all
obligations of the Borrower now or hereafter existing hereunder and under any
other Loan Document.
(c) The Borrower hereby authorizes the Administrative Agent
for the ratable benefit of the Banks to apply, from time to time after funds are
deposited in the Letter of Credit Collateral Account, funds then held in the
Letter of Credit Collateral Account to the payment of any amounts, in such order
as the Administrative Agent may elect, as shall have become due and payable by
the Borrower to the Banks in respect of the Letters of Credit.
(d) Neither the Borrower nor any Person claiming or acting
on behalf of or through the Borrower shall have any right to withdraw any of the
funds held in the Letter of Credit Collateral Account, except as provided in
Section 6.4(h) hereof.
(e) The Borrower agrees that it will not (i) sell or
otherwise dispose of any interest in the Letter of Credit Collateral or (ii)
create or permit to exist any lien, security interest or other charge or
encumbrance upon or with respect to any of the Letter of Credit Collateral,
except for the security interest created by this Section 6.4.
(f) If any Event of Default shall have occurred and be
continuing:
(i) The Administrative Agent may, in its sole
discretion without notice to the Borrower except as required by law and at any
time from time to time, charge, set off or otherwise apply all or any part of
first, (x) to amounts previously drawn on any Letter of Credit that have not
been reimbursed by the Borrower and (y) any Letter of Credit Usage described in
clause (ii) of the definition thereof that are then due and payable and second,
to any other unpaid obligations then due and payable against the Letter of
Credit Collateral Account or any part thereof, in such order as the
Administrative Agent shall elect. The rights of the Administrative Agent under
this Section 6.4 are in addition to any rights and remedies which any Bank may
have.
(ii) The Administrative Agent may also exercise, in
its sole discretion, in respect of the Letter of Credit Collateral Account, in
addition to the other rights and remedies provided herein or otherwise available
to it, all the rights and remedies of a secured party upon default under the
Uniform Commercial Code in effect in the Commonwealth of Virginia at that time.
(g) The Administrative Agent shall be deemed to have
exercised
92
reasonable care in the custody and preservation of the Letter of Credit
Collateral if the Letter of Credit Collateral is accorded treatment
substantially equal to that which the Administrative Agent accords its own
property, it being understood that, assuming such treatment, the Administrative
Agent shall not have any responsibility or liability with respect thereto.
(h) At such time as all Events of Default have been cured or
waived in writing, all amounts remaining in the Letter of Credit Collateral
Account shall be promptly returned to the Borrower. Absent such cure or written
waiver, any surplus of the funds held in the Letter of Credit Collateral Account
and remaining after payment in full of all of the Obligations of the Borrower
hereunder and under any other Loan Document after the Maturity Date shall be
paid to the Borrower or to whomsoever may be lawfully entitled to receive such
surplus.
SECTION 6.5. Distribution of Proceeds after Default.
--------------------------------------
Notwithstanding anything contained herein to the contrary, during the
continuance of an Event of Default, to the extent proceeds are received by
Administrative Agent, such proceeds will be distributed to the Banks pro rata in
accordance with the unpaid principal amount of the Loans.
SECTION 6.6. Debtor Relief Proceedings.
-------------------------
Each of the Wholly-Owned Consolidated Subsidiaries, which owns a
Qualifying Unencumbered Property or a lien described in subparagraph h of the
definition of Permitted Liens, constitutes an essential asset of the Borrower,
and if the Borrower shall ever voluntarily seek the benefits of any Debtor
Relief Law, then the Borrower shall contemporaneously therewith, to the extent
such entities are legally entitled to such relief, cause each such Wholly-Owned
Consolidated Subsidiary to seek such relief. If any individual Wholly-Owned
Consolidated Subsidiary, which owns a Qualifying Unencumbered Property or a lien
described in subparagraph h of the definition of Permitted Liens, shall ever
voluntarily seek the benefits of any Debtor Relief Law, then the Borrower shall
contemporaneously therewith, to the extent the Borrower is legally entitled to
such relief, seek such relief and cause each of the other Wholly-Owned
Consolidated Subsidiaries, which owns a Qualifying Unencumbered Property or a
lien described in subparagraph h of the definition of Permitted Liens, to seek
such relief to the extent such entities are legally entitled to such relief.
ARTICLE VII
THE ADMINISTRATIVE AGENT
SECTION 7.1. Appointment and Authorization.
-----------------------------
Each Bank irrevocably appoints and authorizes the Administrative Agent
to
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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 Administrative
Agent by the terms hereof or thereof, together with all such powers as are
reasonably incidental thereto. Except as set forth in Sections 7.8 and 7.9
hereof, the provisions of this Article VII are solely for the benefit of
Administrative Agent and the Banks, and Borrower shall not have any rights to
rely on or enforce any of the provisions hereof. In performing its functions and
duties under this Agreement, Administrative Agent shall act solely as an agent
of the Banks and the Fronting Bank and does not assume and shall not be deemed
to have assumed any relationship of agency or trust with or for the Borrower.
SECTION 7.2. Agency and Affiliates.
---------------------
PNC shall have the same rights and powers under this Agreement as any
other Bank and may exercise or refrain from exercising the same as though it
were not the Administrative Agent and PNC and its affiliates may accept deposits
from, lend money to, and generally engage in any kind of business with the
Borrower, CESRRI or any Subsidiary or affiliate of the Borrower as if it was not
the Administrative Agent hereunder, and the term "Bank" and "Banks" shall
include PNC in its individual capacity.
SECTION 7.3. Action by Administrative Agent.
------------------------------
The obligations of the Administrative Agent hereunder are only those
expressly set forth herein. Without limiting the generality of the foregoing,
the Administrative Agent shall not be required to take any action with respect
to any Default or Event of Default, except as expressly provided in Article VI.
The duties of Administrative Agent shall be administrative in nature. Subject to
the provisions of Sections 7.1, 7.5 and 7.6, the Administrative Agent shall
perform its obligations under this Agreement and the other Loan Documents in
good faith according to the same standard of care as that customarily exercised
by the Administrative Agent in administering its own similar loans, and shall at
all times keep accurate books of account reflecting the interests of the Banks
in the Loans. Such books shall be available to the Banks for inspection during
business hours with reasonable notice to the Administrative Agent. Except as
stated in the preceding two (2) sentences or as otherwise expressly set forth in
this Agreement, the Administrative Agent shall have no duties or
responsibilities except those expressly set forth in this Agreement, and no
implied covenants, functions, responsibilities, duties, obligations, or
liabilities shall be read into this Agreement or otherwise exist. The duties of
the Administrative Agent shall be mechanical and administrative in nature; the
Administrative Agent shall not have by reason of this Agreement or any other
Loan Document a fiduciary relationship in respect of any
94
Bank; and nothing in this Agreement or any other Loan Document, expressed or
implied, is intended to or shall be construed so as to impose upon the
Administrative Agent any obligations in respect of this Agreement except as
expressly set forth herein. Without limiting the generality of the foregoing,
the use of the term "agent" in this Agreement with reference to the
Administrative Agent is not intended to connote any fiduciary or other implied
(or express) obligations arising under agency doctrine of any applicable law.
Instead, such term is used merely as a matter of market custom, and is intended
to create or reflect only an administrative relationship between independent
contracting parties. Each Bank expressly acknowledges (i) that the
Administrative Agent has not made any representations or warranties to them and
that no act by the Administrative Agent hereafter taken, including any review of
the affairs of the Borrower, shall be deemed to constitute any representation or
warranty by the Administrative Agent to any Bank; and (ii) except as expressly
provided herein, that the Administrative Agent shall have no duty or
responsibility, either initially or on a continuing basis, to provide any Bank
with credit or other information with respect thereto, whether coming into its
possession before the making of the Loans or at any time or times thereafter.
SECTION 7.4. Consultation with Experts.
-------------------------
As between Administrative Agent and the Banks, the Administrative Agent
may consult with legal counsel, independent public accountants and other experts
selected by it and shall not be liable for any action taken or omitted to be
taken by it in good faith in accordance with the advice of such counsel,
accountants or experts.
SECTION 7.5. Liability of Administrative Agent.
---------------------------------
As between Administrative Agent and the Banks, neither the
Administrative Agent, nor any of its affiliates nor any of its directors,
officers, agents or employees shall be liable for any action taken or not taken
by it in connection herewith (i) with the consent or at the request of the
Required Banks or (ii) in the absence of its own gross negligence or wilful
misconduct. As between Administrative Agent and the Banks, neither the
Administrative Agent, nor any of its directors, officers, agents or employees
shall be responsible for or have any duty to ascertain, inquire into or verify
(i) any statement, warranty or representation made in connection with this
Agreement or any borrowing hereunder; (ii) the performance or observance of any
of the covenants or agreements of the Borrower; (iii) the satisfaction of any
condition specified in Article III, except receipt of items required to be
delivered to the Administrative Agent or (iv) the validity, effectiveness or
genuineness of this Agreement, the other Loan Documents or any other instrument
or writing
95
furnished in connection herewith. As between Administrative Agent and the Banks,
the Administrative Agent shall not incur any liability by acting in reliance
upon any notice, consent, certificate, statement, or other writing (which may be
a bank wire, telex or similar writing) believed by it to be genuine or to be
signed by the proper party or parties.
SECTION 7.6. Indemnification.
---------------
Each Bank shall, ratably in accordance with its Commitment, indemnify
the Administrative Agent and its affiliates and its directors, officers, agents
and employees (to the extent not reimbursed by the Borrower) against any cost,
expense (including counsel fees and disbursements), claim, demand, action, loss
or liability (except such as result from such indemnitee's gross negligence or
wilful misconduct) that such indemnitee may suffer or incur in connection with
its duties as Administrative Agent under this Agreement, the other Loan
Documents or any action taken or omitted by such indemnitee hereunder. In the
event that the Administrative Agent shall, subsequent to its receipt of
indemnification payment(s) from Banks in accordance with this section, recoup
any amount from the Borrower, or any other party liable therefor in connection
with such indemnification, the Administrative Agent shall reimburse the Banks
which previously made the payment(s) pro rata, based upon the actual amounts
--------
which were theretofore paid by each Bank. The Administrative Agent shall
reimburse such Banks so entitled to reimbursement within two (2) Domestic
Business Days of its receipt of such funds from the Borrower or such other party
liable therefor.
SECTION 7.7. Credit Decision.
---------------
Each Bank acknowledges that it has, independently and without reliance
upon the Administrative Agent, or any other Bank, and based on such documents
and information as it has deemed appropriate, made its own credit analysis and
decision to enter into this Agreement. Each Bank also acknowledges that it will,
independently and without reliance upon the Administrative Agent, or any other
Bank, and based on such documents and information as it shall deem appropriate
at the time, continue to make its own credit decisions in taking or not taking
any action under this Agreement.
SECTION 7.8. Successor Administrative Agent.
------------------------------
The Administrative Agent may resign at any time by giving written
notice thereof to the Banks and the Borrower and shall resign, at the request of
the Required Banks, in the event its Commitment is reduced to an amount less
than the amount of the next largest Commitment. Further, the Required Banks may,
96
for good cause, remove Administrative Agent at any time by giving at least
thirty (30) Domestic Business Days' prior written notice to the Borrower and all
other Banks. Upon any such resignation or removal, the Required Banks shall have
the right to appoint a successor Administrative Agent, which shall be selected
by the Required Banks from between First Union National Bank and U.S. Bank
National Association. In the event that both First Union National Bank and U.S.
Bank National Association shall decline to serve, or following their resignation
or removal, the Required Banks shall have the right to appoint a successor
Administrative Agent, which successor Administrative Agent (other than First
Union National Bank and U.S. Bank National Association) shall, provided no Event
of Default has occurred and is then continuing, be subject to Borrower's
approval, which approval shall not be unreasonably withheld or delayed. Any
successor Administrative Agent must be a Bank (i) the senior debt obligations of
which (or such Bank's parent's senior unsecured debt obligations) are rated not
less than Baa by Moody's or a comparable rating by a rating agency acceptable to
the Required Banks and (ii) which has total assets in excess of Ten Billion
Dollars ($10,000,000,000). If no successor Administrative Agent shall have been
so appointed by the Required Banks and approved by the Borrower, and shall have
accepted such appointment, within thirty (30) days after the retiring
Administrative Agent gives notice of resignation, then the retiring
Administrative Agent may, on behalf of the Banks, appoint a successor
Administrative Agent, which shall be the Administrative Agent, who shall act
until the Required Banks shall appoint a successor Administrative Agent. Upon
the acceptance by a successor Administrative Agent of its appointment as the
Administrative Agent hereunder, such successor Administrative Agent shall
thereupon succeed to and become vested with all the rights and duties of the
retiring Administrative Agent, and the retiring Administrative Agent shall be
discharged from its duties and obligations hereunder. After any retiring
Administrative Agent's resignation hereunder, the provisions of this Article VII
shall inure to its benefit as to any actions taken or omitted to be taken by it
while it was the Administrative Agent as applicable. Any resignation or removal
of the Administrative Agent shall take effect upon the acceptance of appointment
by a successor Administrative Agent in accordance with the provisions of this
Section 7.8.
SECTION 7.9. Consents and Approvals.
----------------------
(a) All communications from Administrative Agent to the Banks
requesting the Banks' determination, consent, approval or disapproval (i) shall
be given in the form of a written notice to each Bank, (ii) shall be accompanied
by a description of the matter or item as to which such determination, approval,
consent or disapproval is requested, or shall advise each Bank where such matter
or item may be inspected, or shall otherwise describe the matter or issue to be
97
resolved, (iii) shall include, if reasonably requested by a Bank and to the
extent not previously provided to such Bank, written materials and a summary of
all oral information provided to Administrative Agent by Borrower in respect of
the matter or issue to be resolved, and (iv) shall include Administrative
Agent's recommended course of action or determination in respect thereof. Each
Bank shall reply promptly, but in any event within ten (10) Domestic Business
Days after receipt of the request therefor from Administrative Agent (the "Bank
Reply Period"). Unless a Bank shall give written notice to Administrative Agent
that it objects to the recommendation or determination of Administrative Agent
(together with a written explanation of the reasons behind such objection)
within the Bank Reply Period, such Bank shall be deemed to have approved of or
consented to such recommendation or determination. With respect to decisions
requiring the approval of the Required Banks or all the Banks, Administrative
Agent shall submit its recommendation or determination for approval of or
consent to such recommendation or determination to all Banks and upon receiving
the required approval or consent shall follow the course of action or
determination of the Required Banks (and each non-responding Bank shall be
deemed to have concurred with such recommended course of action) or all the
Banks, as the case may be.
(b) The Administrative Agent may at any time request instructions from
the Required Banks with respect to any actions or approvals which, by the terms
of this Agreement or of any of the Loan Documents, the Administrative Agent is
permitted or required to take or to grant without instructions from any Banks,
and if such instructions are promptly requested, the Administrative Agent shall
be absolutely entitled to refrain from taking any action or to withhold any
approval and shall not be under any liability whatsoever to any Person for
refraining from taking any action or withholding any approval under any of the
Loan Documents until it shall have received such instructions from the Required
Banks. Without limiting the foregoing, no Bank shall have any right of action
whatsoever against the Administrative Agent as a result of the Administrative
Agent acting or refraining from acting under this Agreement, or any of the other
Loan Documents in accordance with the instructions of Required Banks or, where
applicable, all Banks. The Administrative Agent shall promptly notify each Bank
at any time that the Required Banks have instructed the Administrative Agent to
act or refrain from acting pursuant hereto. Each Bank agrees that any action
taken by the Administrative Agent at the direction or with the consent of
Required Banks in accordance with the provisions of this Agreement or any Loan
Document, and the exercise by the Administrative Agent at the direction or with
the consent of Required Banks of the powers set forth herein or therein,
together with such other powers as are reasonably incidental thereto, shall be
authorized and binding upon all Required Banks, except for actions specifically
requiring the approval of all
98
Banks.
SECTION 7.10. Delivery of Documents.
---------------------
The Administrative Agent shall as soon as reasonably practicable and,
in any event, within thirty (30) days, distribute to each Bank at its primary
address set forth on the appropriate counterpart signature page hereof, or at
such other address as a Bank may request in writing, (i) such Bank's Notes, (ii)
all documents set forth on the Closing Requirements attached hereto as Exhibit
O, (iii) all other documents or information which the Administrative Agent is
required to send to Banks pursuant to the terms of this Agreement, and (iv)
other information or documents received by the Administrative Agent at the
request of any Bank. In addition, within fifteen (15) Domestic Business Days
after receipt of a request in writing from a Bank for written information or
documents provided by or prepared by Borrower, CESRRI or any Consolidated
Subsidiary or Investment Affiliate, the Administrative Agent shall deliver such
written information or documents to such requesting Bank if Administrative Agent
has possession of such written information or documents in its capacity as the
Administrative Agent or as a Bank.
SECTION 7.11. Inspection of Books and Records.
-------------------------------
Subject to the provisions of Section 5.6, each Bank shall have the
right to exercise the rights of the Administrative Agent set forth in the Loan
Documents to inspect the books and records of the Borrower, CESSRI, any
Consolidated Subsidiary and any other Person.
SECTION 7.12. Administrative Agent's Commitment.
---------------------------------
Prior to any Event of Default, PNC agrees to retain a Commitment, in an
amount equal to or greater than the lesser of (a) $12,500,000 or (b) the highest
Commitment of any other Bank.
ARTICLE VIII
CHANGE IN CIRCUMSTANCES
SECTION 8.1. Basis for Determining Interest Rate Inadequate or Unfair.
--------------------------------------------------------
If on or prior to the first day of any Interest Period for any
Euro-Dollar Borrowing or Money Market LIBOR Loan:
(a) the Administrative Agent has determined in good faith that
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deposits in dollars (in the applicable amounts) are not being offered to the
Administrative Agent in the relevant market for such Interest Period, or
(b) Banks having 50% or more of the aggregate amount of the
Commitments advise the Administrative Agent that the Adjusted London Interbank
Offered Rate, as determined by the Administrative Agent, or any Bank making a
Money Market LIBOR Loan advises the Administrative Agent that the applicable
Money Market Margin quoted by such Bank, will not adequately and fairly reflect
the cost to such Bank of funding its Euro-Dollar Loans or the Money Market LIBOR
Loans, as applicable, for such Interest Period, the Administrative Agent shall
forthwith give notice thereof to the Borrower and the Banks, whereupon until the
Administrative Agent notifies the Borrower that the circumstances giving rise to
such suspension no longer exist, the obligations of the Banks to make
Euro-Dollar Loans and Money Market LIBOR Loans shall be suspended. Unless the
Borrower notifies the Administrative Agent at least two (2) Domestic Business
Days before the date of (i) any Euro-Dollar Borrowing for which a Notice of
Borrowing has previously been given that it elects not to borrow on such date,
such Borrowing shall instead be made as a Base Rate Borrowing, or (ii) any Money
Market LIBOR Borrowing for which a Notice of Money Market Borrowing has
previously been given, the Money Market LIBOR Loans comprising such Borrowing
shall bear interest for each day from and including the first day to but
excluding the last day of the Interest Period applicable thereto at the Base
Rate for such day.
SECTION 8.2. Illegality.
----------
If, on or after the date of this Agreement, the adoption of any
applicable law, rule or regulation, or any change in any applicable law, rule or
regulation, or any change in the interpretation or administration thereof by any
governmental authority, central bank or comparable agency charged with the
interpretation or administration thereof, or compliance by any Bank (or its
Euro-Dollar Lending Office) with any request or directive (whether or not having
the force of law) made after the Closing Date of any such authority, central
bank or comparable agency shall make it unlawful for any Bank (or its
Euro-Dollar Lending Office) (x) to make, maintain or fund its Euro-Dollar Loans
or Money Market Loans, or (y) to participate in any Letter of Credit issued by
the Fronting Bank,
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or, with respect to the Fronting Bank, to issue any Letter of Credit, the
Administrative Agent shall forthwith give notice thereof to the other Banks and
the Borrower, whereupon until such Bank notifies the Borrower and the
Administrative Agent that the circumstances giving rise to such suspension no
longer exist, the obligation of such Bank in case of the event described in
clause (x) above to make Euro-Dollar Loans or Money Market Loans, as applicable
or in the case of the event described in clause (y) above, to participate in any
Letter of Credit issued by the Fronting Bank or, with respect to the Fronting
Bank, to issue any Letter of Credit, shall be suspended. With respect to Euro-
Dollar Loans and Money Market LIBOR Loans, before giving any notice to the
Administrative Agent pursuant to this Section 8.2, such Bank shall designate a
different Euro-Dollar Lending Office if such designation will avoid the need for
giving such notice and will not, in the judgment of such Bank, be otherwise
disadvantageous to such Bank. If such Bank shall determine that it may not
lawfully continue to maintain and fund any of its outstanding Euro-Dollar Loans
or Money Market Loans to maturity and shall so specify in such notice, the
Borrower shall be deemed to have delivered a Notice of Interest Rate Election
and such Euro-Dollar Loan or Money Market Loans, as applicable shall be
converted as of such date to a Base Rate Loan in an equal principal amount from
such Bank (on which interest and principal shall be payable contemporaneously
with the related Euro-Dollar Loans or Money Market Loans, as applicable, of the
other Banks), and such Bank shall be deemed to have made such a Base Rate Loan.
If at any time, it shall be unlawful for any Bank to make, maintain or
fund its Euro-Dollar Loans or Money Market Loans, the Borrower shall have the
right, upon five (5) Domestic Business Day's notice to the Administrative Agent,
to either (x) cause a bank, reasonably acceptable to the Administrative Agent,
to offer to purchase the Commitment of such Bank for an amount equal to such
Bank's outstanding Loans, and to become a Bank hereunder, or obtain the
agreement of one or more existing Banks to offer to purchase the Commitment of
such Bank for such amount, which offer such Bank is hereby required to accept,
or (y) repay in full all Loans then outstanding of such Bank, together with
interest and all other amounts due thereon, upon which event, such Bank's
Commitment shall be deemed to be canceled pursuant to Section 2.11(e).
SECTION 8.3. Increased Cost and Reduced Return.
---------------------------------
(a) If, on or after (x) the date hereof in the case of
Committed Loans made pursuant to Section 2.1, or (y) the date of the related
Money Market Quote, in the case of any Money Market Loan, the adoption of any
applicable law, rule or regulation, or any change in any applicable law, rule or
regulation, or any change in the interpretation or administration thereof by any
governmental authority, central bank or comparable agency charged with the
interpretation or administration thereof, or compliance by any Bank (or its
Applicable Lending Office) with any request or directive (whether or not having
the force of law) of any such authority, central bank or comparable agency shall
impose, modify or deem applicable any reserve (including, without limitation,
any such requirement imposed by the Board of Governors of the Federal Reserve
System (but excluding with respect to any Euro-Dollar Loan any such requirement
reflected in an
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applicable Euro-Dollar Reserve Percentage)), special deposit, insurance
assessment or similar requirement against assets of, deposits with or for the
account of, or credit extended by, any Bank (or its Applicable Lending Office)
or shall impose on any Bank (or its Applicable Lending Office) or on the London
interbank market any other condition materially more burdensome in nature,
extent or consequence than those in existence as of the Closing Date, or the
date of the related Money Market Quote, as applicable, affecting such Bank's
Euro-Dollar Loans, Money Market Loans, its Note, or its obligation to make Euro-
Dollar Loans or Money Market Loans, and the result of any of the foregoing is to
increase the cost to such Bank (or its Applicable Lending office) of making or
maintaining any Euro-Dollar Loan or Money Market Loan, or to reduce the amount
of any sum received or receivable by such Bank (or its Applicable Lending
Office) under this Agreement or under its Note with respect to such Euro-Dollar
Loans or Money Market Loans, by an amount reasonably deemed by such Bank to be
material, then, within fifteen (15) days after demand by such Bank (with a copy
to the Administrative Agent), the Borrower shall pay to such Bank such
additional amount or amounts (based upon a reasonable allocation thereof by such
Bank to the Euro-Dollar Loans and Money Market Loans made by such Bank
hereunder) as will compensate such Bank for such increased cost or reduction to
the extent such Bank generally imposes such additional amounts on other
borrowers of such Bank in similar circumstances.
(b) If any Bank shall have reasonably determined that, after
the date hereof, the adoption of any applicable law, rule or regulation
regarding capital adequacy, or any change in any such law, rule or regulation,
or any change in the interpretation or administration thereof by any
governmental authority, central bank or comparable agency charged with the
interpretation or administration thereof, or any request or directive regarding
capital adequacy (whether or not having the force of law) made after the Closing
Date of any such authority, central bank or comparable agency, has or would have
the effect of reducing the rate of return on capital of such Bank (or its
Parent) as a consequence of such Bank's obligations hereunder to a level below
that which such Bank (or its Parent) could have achieved but for such adoption,
change, request or directive (taking into consideration its policies with
respect to capital adequacy) by an amount reasonably deemed by such Bank to be
material, then from time to time, within fifteen (15) days after demand by such
Bank (with a copy to the Administrative Agent) , the Borrower shall pay to such
Bank such additional amount or amounts as will compensate such Bank (or its
Parent) for such reduction to the extent such Bank generally imposes such
additional amounts on other borrowers of such Bank in similar circumstances.
(c) Each Bank will promptly notify the Borrower and the
Administrative Agent of any event of which it has knowledge, occurring after the
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date hereof, which will entitle such Bank to compensation pursuant to this
Section 8.3 and will designate a different Applicable Lending Office if such
designation will avoid the need for, or reduce the amount of, such compensation
and will not, in the reasonable judgment of such Bank, be otherwise
disadvantageous to such Bank. A certificate of any Bank claiming compensation
under this Section 8.3 and setting forth a reasonably detailed calculation of
the additional amount or amounts to be paid to it hereunder shall be conclusive
in the absence of demonstrable error. In determining such amount, such Bank may
use any reasonable averaging and attribution methods.
(d) If at any time, any Bank shall be owed amounts pursuant to
this Section 8.3, the Borrower shall have the right, upon five (5) Domestic
Business Day's notice to the Administrative Agent to either (x) cause a bank,
reasonably acceptable to the Administrative Agent, to offer to purchase the
Commitment of such Bank for an amount equal to such Bank's outstanding Loans,
and to become a Bank hereunder, or to obtain the agreement of one or more
existing Banks to offer to purchase the Commitment of such Bank for such amount,
which offer such Bank is hereby required to accept, or (y) repay in full all
Loans then outstanding of such Bank, together with interest and all other
amounts due thereon, upon which event, such Bank's Commitment shall be deemed to
be canceled pursuant to Section 2.11(e).
SECTION 8.4. Taxes.
-----
(a) Any and all payments by the Borrower to or for the account
of any Bank, or the Administrative Agent hereunder or under any other Loan
Document shall be made free and clear of and without deduction for any and all
present or future taxes, duties, levies, imposts, deductions, charges or
withholdings, and all liabilities with respect thereto, excluding, in the case
of each Bank and the Administrative Agent, taxes imposed on its income, and
franchise taxes imposed on it, by the jurisdiction under the laws of which such
Bank or the Administrative Agent (as the case may be) is organized or any
political subdivision thereof and, in the case of each Bank, taxes imposed on
its income, and franchise or similar taxes imposed on it, by the jurisdiction of
such Bank's Applicable Lending Office or any political subdivision thereof or by
any other jurisdiction (or any political subdivision thereof) as a result of a
present or former connection between such Bank or Administrative Agent and such
other jurisdiction or by the United States (all such non-excluded taxes, duties,
levies, imposts, deductions, charges, withholdings and liabilities being
hereinafter referred to as "Non-Excluded Taxes"). If the Borrower shall be
required by law to deduct any Non-Excluded Taxes from or in respect of any sum
payable hereunder or under any Note or Letter of Credit, (i) the sum payable
shall be increased as necessary so that after making
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all required deductions (including deductions applicable to additional sums
payable under this Section 8.4) such Bank, the Fronting Bank or, the
Administrative Agent (as the case may be) receives an amount equal to the sum it
would have received had no such deductions been made, (ii) the Borrower shall
make such deductions, (iii) the Borrower shall pay the full amount deducted to
the relevant taxation authority or other authority in accordance with applicable
law and (iv) the Borrower shall furnish to the Administrative Agent, at its
address referred to in Section 9.1, the original or a copy of a receipt
evidencing payment thereof.
(b) In addition, the Borrower agrees to pay any present or
future stamp or documentary taxes and any other excise or property taxes, or
charges or similar levies which arise from any payment made hereunder or under
any Note or Letter of Credit or from the execution or delivery of, or otherwise
with respect to, this Agreement or any Note or Letter of Credit (hereinafter
referred to as "Other Taxes").
(c) The Borrower agrees to indemnify each Bank, the Fronting
Bank, and the Administrative Agent for the full amount of Non-Excluded Taxes or
Other Taxes (including, without limitation, any Non-Excluded Taxes or Other
Taxes imposed or asserted by any jurisdiction on amounts payable under this
Section 8.4) paid by such Bank, the Fronting Bank, or the Administrative Agent
(as the case may be) and, so long as such Bank, the Fronting Bank or the
Administrative Agent has promptly paid any such Non-Excluded Taxes or Other
Taxes, any liability for penalties and interest arising therefrom or with
respect thereto. This indemnification shall be made within fifteen (15) days
from the date such Bank, the Fronting Bank, or the Administrative Agent (as the
case may be) makes demand therefor.
(d) Each Bank organized under the laws of a jurisdiction
outside the United States, on or prior to the date of its execution and delivery
of this Agreement in the case of each Bank listed on the signature pages hereof
and on or prior to the date on which it becomes a Bank in the case of each other
Bank, shall provide the Borrower with two duly completed copies of Internal
Revenue Service Form W-8BEN or W-8ECI, as appropriate, or any successor form
prescribed by the Internal Revenue Service, and shall provide Borrower with two
further copies of any such form or certification on or before the date that any
such form or certification expires or becomes obsolete and after the occurrence
of any event requiring a change in the most recent form previously delivered by
it to Borrower, certifying in the case of a Form W-8BEN or W-8ECI, that such
Bank is entitled to benefits under an income tax treaty to which the United
States is a party which reduces the rate of withholding tax on payments of
interest or certifying that the
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income receivable pursuant to this Agreement is effectively connected with the
conduct of a trade or business in the United States. If the form provided by a
Bank at the time such Bank first becomes a party to this Agreement indicates a
United States interest withholding tax rate in excess of zero, withholding tax
at such rate shall be considered excluded from "Non-Excluded Taxes" as defined
in Section 8.4(a).
(e) For any period with respect to which a Bank has failed to
provide the Borrower with the appropriate form pursuant to Section 8.4(d)
(unless such failure is due to a change in treaty, law or regulation occurring
subsequent to the date on which a form originally was required to be provided),
such Bank shall not be entitled to indemnification under Section 8.4(c) with
respect to Non-Excluded Taxes imposed by the United States; provided, however,
that should a Bank, which is otherwise exempt from or subject to a reduced rate
of withholding tax, become subject to Non-Excluded Taxes because of its failure
to deliver a form required hereunder, the Borrower shall take such steps as such
Bank shall reasonable request to assist such Bank to recover such Taxes so long
as Borrower shall incur no cost or liability as a result thereof.
(f) If the Borrower is required to pay additional amounts to
or for the account of any Bank pursuant to this Section 8.4, then such Bank will
change the jurisdiction of its Applicable Lending Office so as to eliminate or
reduce any such additional payment which may thereafter accrue if such change,
in the judgment of such Bank, is not otherwise disadvantageous to such Bank.
(g) If at any time, any Bank shall be owed amounts pursuant to
this Section 8.4, the Borrower shall have the right, upon five (5) Domestic
Business Day's notice to the Administrative Agent to either (x) cause a bank,
reasonably acceptable to the Administrative Agent, to offer to purchase the
Commitment of such Bank for an amount equal to such Bank's outstanding Loans,
and to become a Bank hereunder, or to obtain the agreement of one or more
existing Banks to offer to purchase the Commitment of such Bank for such amount,
which offer such Bank is hereby required to accept, or (y) repay in full all
Loans then outstanding of such Bank, together with interest and all other
amounts due thereon, upon which event, such Bank's Commitment shall be deemed to
be canceled pursuant to Section 2.11(e).
SECTION 8.5. Base Rate Loans Substituted for Affected Euro-Dollar Loans.
----------------------------------------------------------
If (i) the obligation of any Bank to make Euro-Dollar Loans or Money
Market Loans has been suspended pursuant to Section 8.2 or (ii) any Bank has
demanded compensation under Section 8.3 or 8.4 with respect to its Euro-Dollar
Loans or
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Money Market Loans and the Borrower shall, by at least five (5) Euro-Dollar
Business Days' prior notice to such Bank through the Administrative Agent, have
elected that the provisions of this Section 8.5 shall apply to such Bank, then,
unless and until such Bank notifies the Borrower that the circumstances giving
rise to such suspension or demand for compensation no longer exist:
(a) Borrower shall be deemed to have delivered a Notice of
Interest Rate Election with respect to such affected Euro-Dollar Loans or Money
Market Loans and thereafter all Loans which would otherwise be made by such Bank
as Euro-Dollar Loans or Money Market Loans shall be made instead as Base Rate
Loans (on which interest and principal shall be payable contemporaneously with
the related Euro-Dollar Loans or Money Market Loans of the other Banks), and
(b) after each of its Euro-Dollar Loans or Money Market Loans
has been repaid, all payments of principal which would otherwise be applied to
repay such Euro-Dollar Loans or Money Market Loans shall be applied to repay its
Base Rate Loans instead.
ARTICLE IX
MISCELLANEOUS
SECTION 9.1. Notices.
-------
Any notice, request, demand, direction or other communication (for
purposes of this Section 9.1 only, a "Notice") to be given to or made upon any
party hereto under any provision of this Agreement shall be given or made by
telephone or in writing (which includes by means of facsimile transmission or by
setting forth such Notice on a site on the World Wide Web (a "Website Posting")
if Notice of such Website Posting (including the information necessary to access
such site) has previously been delivered to the applicable parties hereto by
another means set forth in this Section 9.1) in accordance with this Section
9.1. Any such Notice must be delivered to the applicable parties hereto at the
addresses and numbers set forth under their respective names on Schedule II
hereof or in accordance with any subsequent unrevoked Notice from any such party
that is given in accordance with this Section 9.1. Any Notice shall be
effective:
(a) In the case of hand-delivery, when delivered;
(b) If given by mail, four days after such Notice is deposited with the
United States Postal Service, with first-class postage prepaid, return receipt
requested;
106
(c) In the case of a telephonic Notice, when a party is contacted by
telephone, if delivery of such telephonic Notice is confirmed no later than the
next Business Day by hand delivery, a facsimile or electronic transmission, a
Website Posting or an overnight courier delivery of a confirmatory Notice
(received at or before noon on such next Business Day);
(d) In the case of a facsimile transmission, when sent to the
applicable party's facsimile machine's telephone number, if the party sending
such Notice receives confirmation of the delivery thereof from its own facsimile
machine;
(e) In the case of a Website Posting, upon delivery of a Notice of such
posting (including the information necessary to access such site) by another
means set forth in this Section 9.1; and
(f) If given by any other means (including by overnight courier), when
actually received.
Any Bank giving a Notice to the Borrower or CESRRI shall concurrently send a
copy thereof to the Administrative Agent, and the Administrative Agent shall
promptly notify the other Banks of its receipt of such Notice. Notwithstanding
the foregoing, notices given under Article II or Article VIII to the
Administrative Agent shall not be effective until received and no notice given
pursuant to Section 6.1 shall be given by a Website Posting or by telephone.
SECTION 9.2. No Waivers.
----------
No failure or delay by the Administrative Agent, or any Bank in
exercising any right, power or privilege hereunder or under any Note shall
operate as a waiver thereof nor shall any single or partial exercise thereof
preclude any other or further exercise thereof or the exercise of any other
right, power or privilege. The rights and remedies herein provided shall be
cumulative and not exclusive of any rights or remedies provided by law.
SECTION 9.3. Expenses; Indemnification.
-------------------------
(a) The Borrower shall pay within thirty (30) days after
written notice from the Administrative Agent (i) all reasonable out-of-pocket
costs and expenses of the Administrative Agent (including reasonable fees and
disbursements of special counsel Marcus & Shapira, LLP), in connection with the
preparation of this Agreement, the Loan Documents and the documents and
instruments referred to therein, and any waiver or consent hereunder or any
amendment hereof or any
107
Default or alleged Default hereunder, (ii) all reasonable out-of-pocket costs
and expenses of PNC in connection with the syndication of the Loans, subject to
a maximum reimbursement of $10,000, and, in addition thereto, all reasonable
fees and disbursements of special counsel Marcus & Shapira, LLP in connection
with the syndication of the Loans, (iii) any reasonable out-of-pocket costs and
expenses incurred by Administrative Agent to verify the status of any Property
as a Qualifying Unencumbered Property, including, without limitation, any title
searches, lien checks and other similar actions, and (iv) if an Event of Default
should be continuing, all reasonable out-of-pocket expenses incurred by the
Administrative Agent, and each Bank, including reasonable fees and disbursements
of counsel for the Administrative Agent, and each of the Banks, in connection
with the enforcement of the Loan Documents and the instruments referred to
therein and such Event of Default and collection, bankruptcy, insolvency and
other enforcement proceedings resulting therefrom.
(b) The Borrower agrees to indemnify the Administrative Agent,
and each Bank, their respective affiliates and the respective directors,
officers, agents and employees of the foregoing (each an "Indemnitee") and hold
each Indemnitee harmless from and against any and all liabilities, losses,
damages, reasonable costs and reasonable expenses of any kind, including,
without limitation, the reasonable fees and disbursements of counsel, which may
be incurred by such Indemnitee in connection with any investigative,
administrative or judicial proceeding that may at any time (including, without
limitation, at any time following the payment of the Obligations) be asserted
against any Indemnitee, as a result of, or arising out of, or in any way related
to or by reason of, (i) any of the transactions contemplated by the Loan
Documents or the execution, delivery or performance of any Loan Document, (ii)
any violation by the Borrower or the Environmental Affiliates of any applicable
Environmental Law, (iii) any Environmental Claim arising out of the management,
use, control, ownership or operation of property or assets by the Borrower or
any of the Environmental Affiliates, including, without limitation, all on-site
and off-site activities of Borrower or any Environmental Affiliate involving
Materials of Environmental Concern, and (iv) the breach of any environmental
representation or warranty set forth herein, but excluding those liabilities,
losses, damages, costs and expenses (a) for which such Indemnitee has been
compensated pursuant to the terms of this Agreement, (b) incurred solely by
reason of the gross negligence, wilful misconduct, bad faith or fraud of any
Indemnitee as finally determined by a court of competent jurisdiction,
violations of Environmental Laws relating to a Property which are caused by the
act or omission of such Indemnitee after such Indemnitee takes possession of
such Property or (d) any liability of such Indemnitee to any third party based
upon Contractual Obligations of such Indemnitee owing to such third party which
are not expressly set forth in the Loan Documents. In addition, the
indemnification set forth in this Section
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9.3(b) in favor of any director, officer, agent or employee of Administrative
Agent, or any Bank shall be solely in their respective capacities as such
director, officer, agent or employee. The Borrower's obligations under this
Section 9.3(b) shall survive the termination of this Agreement and the payment
of the Obligations.
SECTION 9.4. Sharing of Set-Offs.
-------------------
In addition to any rights now or hereafter granted under applicable law
or otherwise, and not by way of limitation of any such rights, upon the
occurrence and during the continuance of any Event of Default, each Bank is
hereby authorized at any time or from time to time, without presentment, demand,
protest or other notice of any kind to the Borrower or to any other Person, any
such notice being hereby expressly waived, but subject to the prior consent of
the Administrative Agent, to set off and to appropriate and apply any and all
deposits (general or special, time or demand, provisional or final) and any
other indebtedness at any time held or owing by such Bank (including, without
limitation, by branches and agencies of such Bank wherever located) to or for
the credit or the account of the Borrower against and on account of the
Obligations of the Borrower then due and payable to such Bank under this
Agreement or under any of the other Loan Documents, including, without
limitation, all interests in Obligations purchased by such Bank. Each Bank
agrees that if it shall by exercising any right of set-off or counterclaim or
otherwise, receive payment of a proportion of the aggregate amount of principal
and interest due with respect to any Note held by it or Letter of Credit
participated in by it, or, in the case of the Fronting Bank, Letter of Credit
issued by it, which is greater than the proportion received by any other Bank or
Letter of Credit issued or participated in by such other Bank, the Bank
receiving such proportionately greater payment shall purchase such
participations in the Notes held by the other Banks, and such other adjustments
shall be made, as may be required so that all such payments of principal and
interest with respect to the Notes held by the Banks or Letter of Credit issued
or participated in by such other Banks shall be shared by the Banks pro rata;
provided that nothing in this Section 9.4 shall impair the right of any Bank to
exercise any right of set-off or counterclaim it may have to any deposits not
received in connection with the Loans and to apply the amount subject to such
exercise to the payment of indebtedness of the Borrower other than its
indebtedness under the Notes or the Letters of Credit. The Borrower agrees, to
the fullest extent it may effectively do so under applicable law, that any
holder of a participation in a Note or a Letter of Credit, whether or not
acquired pursuant to the foregoing arrangements, may exercise rights of set-off
or counterclaim and other rights with respect to such participation as fully as
if such holder of a participation were a direct creditor of the Borrower in the
amount of such participation. Notwithstanding anything to the contrary contained
herein, any
109
Bank may, by separate agreement with the Borrower, waive its right to set off
contained herein or granted by law and any such written waiver shall be
effective against such Bank under this Section 9.4.
SECTION 9.5. Amendments and Waivers.
----------------------
Any provision of this Agreement or the Notes, the Letters of Credit or
other Loan Documents may be amended or waived or consented to if, but only if,
such amendment, waiver or consent is in writing and is signed by the Borrower,
the Administrative Agent, and the Required Banks provided that no such
amendment, waiver or consent with respect to this Agreement, the Notes, the
Letters of Credit or any other Loan Documents shall, unless signed by all the
Banks, (i) increase or decrease the Commitment of any Bank (except for a ratable
decrease in the Commitments of all Banks) or subject any Bank to any additional
obligation, (ii) reduce the principal of or rate of interest on any Loan or any
fees hereunder, (iii) postpone the date fixed for any payment of principal of or
interest on any Loan or any fees hereunder or for any reduction or termination
of any Commitment, (iv) change the percentage of the Commitments or of the
aggregate unpaid principal amount of the Notes, or the definition of Required
Banks or the number of Banks, which shall be required for the Banks or any of
them to take any action under this Section 9.5 or any other provision of this
Agreement, or (v) modify the provisions of this Section 9.5.
SECTION 9.6. Successors and Assigns.
----------------------
(a) The provisions of this Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and
assigns, except that the Borrower may not assign or otherwise transfer any of
its rights under this Agreement or the other Loan Documents without the prior
written consent of all Banks and the Administrative Agent and a Bank may not
assign or otherwise transfer any of its interest under this Agreement except as
permitted in subsection (b) and (c) of this Section 9.6.
(b) Any Bank may at any time grant (i) prior to the occurrence of an
Event of Default, to an existing Bank, one or more banks, finance companies,
insurance companies or other financial institutions in minimum amounts of not
less than Five Million Dollars ($5,000,000) (or any lesser amount in the case of
participations to an existing Bank or in the case of participations with respect
to Money Market Loans only) and (ii) after the occurrence and during the
continuance of an Event of Default, to any Person in any amount (in each case, a
"Participant"), participating interests in its Commitment or any or all of its
Loans. Any participation made during the continuation of an Event of Default
shall not be
110
affected by the subsequent cure of such Event of Default. In the event of any
such grant by a Bank of a participating interest to a Participant, whether or
not upon notice to the Borrower and the Administrative Agent, such Bank shall
remain responsible for the performance of its obligations hereunder, and the
Borrower and the Administrative Agent shall continue to deal solely and directly
with such Bank in connection with such Bank's rights and obligations under this
Agreement. Any agreement pursuant to which any Bank may grant such a
participating interest shall provide that such Bank shall retain the sole right
and responsibility to enforce the Obligations of the Borrower hereunder
including, without limitation, the right to approve any amendment, modification
or waiver of any provision of this Agreement; provided that such participation
--------
agreement may provide that such Bank will not agree to any modification,
amendment or waiver of this Agreement described in clause (i), (ii), (iii), (iv)
or (v) of Section 9.5 without the consent of the Participant. The Borrower
agrees that each Participant shall, to the extent provided in its participation
agreement, be entitled to the benefits of Article VIII with respect to its
participating interest. An assignment or other transfer which is not permitted
by subsection (c) or (d) below shall be given effect for purposes of this
Agreement only to the extent of, and subject to the restrictions with respect
to, a participating interest granted in accordance with this subsection (b).
(c) Any Bank may at any time assign to (i) prior to the occurrence of
an Event of Default, an existing Bank or one or more banks, finance companies,
insurance or other financial institutions in minimum amounts of not less than
Five Million Dollars ($5,000,000) (or any lesser amount in the case of
assignments to an existing Bank) and (ii) after the occurrence and during the
continuance of an Event of Default, to any Person in any amount (in each case,
an "Assignee"), all or a proportionate part of all, of its rights and
obligations under this Agreement, the Notes and the other Loan Documents, and,
in either case, such Assignee shall assume such rights and obligations, pursuant
to an Assignment and Assumption Agreement in substantially the form of Exhibit
"E" hereto executed by such Assignee and such transferor Bank, provided that, as
long as no Event of Default shall have occurred and be continuing, any such
assignment shall be subject to the prior written consent of the Administrative
Agent and the Borrower, which consent of the Borrower shall not be unreasonably
withheld or delayed; provided that if an Assignee is an affiliate of such
transferor Bank or was a Bank immediately prior to such assignment, no such
consent shall be required; and provided further that such assignment may, but
need not, include rights of the transferor Bank in respect of outstanding Money
Market Loans. Upon its receipt of an Assignment and Assumption Agreement
executed by a transferor Bank and an Assignee, Administrative Agent shall, if
such Assignment and Assumption Agreement has been properly completed and is in
substantially the form of Exhibit E, (i) accept such Assignment and Assumption
Agreement, (ii) record
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information contained therein in the Administrative Agent's records, and (iii)
give prompt notice thereof to Borrower. Upon execution and delivery of such
instrument and payment by such Assignee to such transferor Bank of an amount
equal to the purchase price agreed between such transferor Bank and such
Assignee, such Assignee shall be a Bank party to this Agreement and shall have
all the rights and obligations of a Bank with a Commitment as set forth in such
instrument of assumption, and no further consent or action by any party shall be
required and the transferor Bank shall be released from its obligations
hereunder to a corresponding extent. Upon the consummation of any assignment
pursuant to this subsection (c), the transferor Bank, the Administrative Agent
and the Borrower shall make appropriate arrangements so that, if required, new
Notes are issued to the Assignee, and, if necessary, to the transferor Bank.
Upon execution and delivery of such replacement Notes, the original Notes
evidencing all or the portion of the Commitment being assigned shall be canceled
and returned to Borrower. In connection with any such assignment, the transferor
Bank shall pay to the Administrative Agent an administrative fee for processing
such assignment in the amount of $3,000. If the Assignee is not incorporated
under the laws of the United States of America or a state thereof, it shall
deliver to the Borrower and the Administrative Agent certification as to
exemption from deduction or withholding of any United States federal income
taxes in accordance with Section 8.4. Any assignment made during the
continuation of an Event of Default shall not be affected by any subsequent cure
of such Event of Default.
(d) Any Bank (each, a "Designating Lender") may at any time
designate one Designated Lender to fund Money Market Loans on behalf of such
Designating Lender subject to the terms of this Section 9.6(d) and the
provisions in Section 9.6(b) and (c) shall not apply to such designation. No
Bank may designate more than one (1) Designated Lender at any one time. The
parties to each such designation shall execute and deliver to the Administrative
Agent for its acceptance a Designation Agreement. Upon such receipt of an
appropriately completed Designation Agreement executed by a Designating Lender
and a designee representing that it is a Designated Lender, the Administrative
Agent will accept such Designation Agreement and will give prompt notice thereof
to the Borrower, whereupon, (i) the Borrower shall execute and deliver to the
Designating Lender a Bid Rate Note payable to the order of the Designated
Lender, (ii) from and after the effective date specified in the Designation
Agreement, the Designated Lender shall become a party to this Agreement with a
right (subject to the provisions of Section 2.3) to make Money Market Loans on
behalf of its Designating Lender pursuant to Section 2.3 after the Borrower has
accepted a Money Market Loan (or portion thereof) of the Designating Lender and
subject to the terms of this Agreement, and (iii) the Designated Lender shall
not be required to make payments with respect to any obligations in this
Agreement except to the extent of excess
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cash flow of such Designated Lender which is not otherwise required to repay
obligations of such Designated Lender which are then due and payable; provided,
however, that regardless of such designation and assumption by the Designated
Lender, the Designating Lender shall be and shall remain obligated to the
Borrower, the Administrative Agent, and the Banks for each and every of the
obligations of the Designating Lender and its related Designated Lender with
respect to this Agreement, including, without limitation, any indemnification
obligations under Section 7.6 hereof and any sums otherwise payable to the
Borrower by the Designated Lender. Each Designating Lender shall serve as the
administrative agent of the Designated Lender and shall on behalf of, and to the
exclusion of, the Designated Lender: (i) receive any and all payments made for
the benefit of the Designated Lender and (ii) give and receive all
communications and notices and take all actions hereunder, including, without
limitation, votes, approvals, waivers, consents and amendments under or relating
to this Agreement and the other Loan Documents. Any such notice communication,
vote, approval, waiver, consent or amendment shall be signed by the Designating
Lender as administrative agent for the Designated Lender and shall not be signed
by the Designated Lender on its own behalf and shall be binding upon the
Designated Lender to the same extent as if signed by the Designated Lender on
its own behalf. The Borrower, the Administrative Agent, and the Banks may rely
thereon without any requirement that the Designated Lender sign or acknowledge
the same. No Designated Lender may assign or transfer all or any portion of its
interest hereunder or under any other Loan Document, other than assignments to
the Designating Lender which originally designated such Designated Lender or
otherwise in accordance with the provisions of Section 9.6 (b) and (c), and any
such assignment or transfer shall be null and void.
(e) Any Bank may at any time assign all or any portion of its rights
under this Agreement and its Notes and the Letter(s) of Credit participated in
by such Bank or, in the case of the Fronting Bank, issued by it, to a Federal
Reserve Bank. No such assignment shall release the transferor Bank from its
obligations hereunder.
(f) Administrative Agent shall maintain, at its address referred to
on Schedule II, a copy of each Assignment and Assumption Agreement delivered to
and accepted by it and shall record in its records the names and addresses of
each Bank and the Commitment of, and principal amount of the Loans owing to,
such Bank from time to time. Borrower and Banks may treat each Person whose name
is recorded in the Administrative Agent's records as a Bank hereunder for all
purposes of this Agreement.
(g) Borrower will use reasonable efforts to cooperate with the
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Administrative Agent and Banks in connection with the assignment of interests
under this Agreement or the sale of participations herein.
(h) Anything in this Section 9.6 to the contrary notwithstanding, no
Bank may assign or participate any interest in any Loan held by it hereunder to
Borrower, CESRRI or any of their respective affiliates or Subsidiaries.
SECTION 9.7. Collateral.
----------
Each of the Banks represents to the Administrative Agent and each of the
other Banks that it in good faith is not relying upon any Margin Stock as
collateral in the extension or maintenance of the credit provided for in this
Agreement.
SECTION 9.8. Governing Law; Submission to Jurisdiction.
-----------------------------------------
(a) THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES HEREUNDER AND THEREUNDER SHALL BE CONSTRUED IN
ACCORDANCE WITH AND BE GOVERNED BY THE LAWS OF THE COMMONWEALTH OF VIRGINIA
(WITHOUT GIVING EFFECT TO THE PRINCIPLES THEREOF RELATING TO CONFLICTS OF LAW).
(b) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR
ANY OTHER LOAN DOCUMENT AND ANY ACTION FOR ENFORCEMENT OF ANY JUDGMENT IN
RESPECT THEREOF MAY BE BROUGHT IN THE COURTS OF THE COMMONWEALTH OF PENNSYLVANIA
OR OF THE UNITED STATES OF AMERICA FOR THE WESTERN DISTRICT OF PENNSYLVANIA AND,
BY EXECUTION AND DELIVERY OF THIS AGREEMENT, THE BORROWER HEREBY ACCEPTS FOR
ITSELF AND IN RESPECT OF ITS PROPERTY, GENERALLY AND UNCONDITIONALLY, THE NON-
EXCLUSIVE JURISDICTION OF THE AFORESAID COURTS AND APPELLATE COURTS FROM ANY
THEREOF. THE BORROWER IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS OUT OF ANY
OF THE AFOREMENTIONED COURTS IN ANY SUCH ACTION OR PROCEEDING BY THE HAND
DELIVERY, OR MAILING OF COPIES THEREOF BY REGISTERED OR CERTIFIED MAIL, POSTAGE
PREPAID, TO THE BORROWER AT ITS ADDRESS ON SCHEDULE II HERETO. THE BORROWER
HEREBY IRREVOCABLY WAIVES ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO
THE LAYING OF VENUE OF ANY OF THE AFORESAID ACTIONS OR PROCEEDINGS ARISING OUT
OF OR IN CONNECTION WITH THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT BROUGHT IN
THE COURTS REFERRED TO ABOVE AND HEREBY FURTHER IRREVOCABLY WAIVES AND AGREES
NOT TO PLEAD OR CLAIM IN ANY SUCH COURT THAT ANY SUCH ACTION OR
114
PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.
NOTHING HEREIN SHALL AFFECT THE RIGHT OF THE ADMINISTRATIVE AGENT TO SERVE
PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO COMMENCE LEGAL PROCEEDINGS OR
OTHERWISE PROCEED AGAINST THE BORROWER IN ANY OTHER JURISDICTION.
SECTION 9.9. Counterparts; Integration; Effectiveness.
----------------------------------------
This Agreement may be signed in any number of counterparts, each of which
shall be an original, with the same effect as if the signatures thereto and
hereto were upon the same instrument. This Agreement constitutes the entire
agreement and understanding among the parties hereto and supersedes any and all
prior agreements and understandings, oral or written, relating to the subject
matter hereof. This Agreement shall become effective upon receipt by the
Administrative Agent and the Borrower of counterparts hereof signed by each of
the parties hereto (or, in the case of any party as to which an executed
counterpart shall not have been received, receipt by the Administrative Agent in
form satisfactory to it of telegraphic, telex or other written confirmation from
such party of execution of a counterpart hereof by such party). Within twenty
(20) Domestic Business Days following the Closing Date, the Administrative Agent
shall execute and deliver to the Borrower such releases, termination statements
and other similar documents as may be necessary to release the collateral held
by the Administrative Agent pursuant to the Existing Credit Agreement and shall
cause all of the promissory notes held by the lenders under the Existing Credit
Agreement to be returned to the Borrower.
SECTION 9.10. WAIVER OF JURY TRIAL.
--------------------
THE BORROWER, THE ADMINISTRATIVE AGENT AND THE BANKS WAIVE THE RIGHT TO A
TRIAL BY JURY IN ANY ACTION OR PROCEEDING BASED UPON, OR RELATED TO, THE SUBJECT
MATTER OF THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS OR ANY OF THE
TRANSACTIONS RELATED TO ANY OF THE LOAN DOCUMENTS. THIS WAIVER IS KNOWINGLY,
INTENTIONALLY AND VOLUNTARILY MADE BY BORROWER, THE ADMINISTRATIVE AGENT AND THE
BANKS AND BORROWER, THE ADMINISTRATIVE AGENT AND THE BANKS ACKNOWLEDGE THAT NONE
OF THE THEM NOR ANY PERSON ACTING ON BEHALF OF ANY OF THEM HAS OR HAVE MADE ANY
REPRESENTATIONS OF FACT TO INDUCE THIS WAIVER OF TRIAL BY JURY OR IN ANY WAY TO
MODIFY OR NULLIFY ITS EFFECT. THE BORROWER, THE ADMINISTRATIVE AGENT AND THE
BANKS FURTHER ACKNOWLEDGE THAT EACH OF THEM HAS BEEN REPRESENTED (OR HAS HAD THE
OPPORTUNITY TO BE REPRESENTED) IN THE SIGNING OF THIS AGREEMENT
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AND IN THE MAKING OF THIS WAIVER BY INDEPENDENT LEGAL COUNSEL, SELECTED BY ITS
OWN FREE WILL, AND THAT EACH OF THEM HAS HAD THE OPPORTUNITY TO DISCUSS THIS
WAIVER WITH COUNSEL. THE BORROWER, THE ADMINISTRATIVE AGENT AND THE BANKS AGREE
THAT THE OBLIGATIONS EVIDENCED BY THIS AGREEMENT ARE EXEMPTED TRANSACTIONS UNDER
THE TRUTH-IN-LENDING ACT, 15 U.S.C. SECTION 1601, ET SEQ. THE BORROWER, THE
ADMINISTRATIVE AGENT AND THE BANKS FURTHER ACKNOWLEDGE THAT EACH OF THEM HAS
READ AND UNDERSTANDS THE MEANING OF THIS WAIVER PROVISION.
SECTION 9.11. Survival.
--------
All indemnities set forth herein shall survive the execution and delivery
of this Agreement and the other Loan Documents and the making and repayment of
the Loans hereunder.
SECTION 9.12. Domicile of Loans.
-----------------
Each Bank may transfer and carry its Loans at, to or for the account of any
domestic or foreign branch office, subsidiary or affiliate of such Bank.
SECTION 9.13. Limitation of Liability.
-----------------------
No claim may be made by the Borrower or any other Person acting by or
through Borrower against the Administrative Agent, or any Bank or the
affiliates, directors, officers, employees, attorneys or agent of any of them
for any consequential or punitive damages in respect of any claim for breach of
contract or any other theory of liability arising out of or related to the
transactions contemplated by this Agreement or by the other Loan Documents, or
any act, omission or event occurring in connection therewith; and the Borrower
hereby waives, releases and agrees not to xxx upon any claim for any such
damages, whether or not accrued and whether or not known or suspected to exist
in its favor.
SECTION 9.14. Recourse Obligation.
-------------------
(a) This Agreement and the Obligations hereunder are fully recourse to
the Borrower. Notwithstanding the foregoing, no recourse under or upon any
obligation, covenant, or agreement contained in this Agreement shall be had
against any officer, director, shareholder or employee of the Borrower or CESRRI
except in the event of fraud or misappropriation of funds on the part of such
officer, director, shareholder or employee.
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(b) Subject to the exceptions and qualifications set forth hereinbelow,
the general and limited partners of Borrower and any Consolidated Subsidiary
shall not be personally liable for the payment of the Obligations of the
Borrower and any Consolidated Subsidiary respectively, and any judgment or
decree in any action brought to enforce any Obligation shall be enforceable only
against the Borrower and any Consolidated Subsidiary and the assets of Borrower
and any Consolidated Subsidiary, and any such judgment or decree shall not be
subject to execution upon or be a lien upon the assets of the general or limited
partners of the Borrower other than their respective partnership interests in
Borrower and any Consolidated Subsidiary. Notwithstanding the foregoing, the
general partner of Borrower shall be fully and personally liable as general
partner for the following:
(i) the commission of fraud by the Borrower or any material
misrepresentation made by the Borrower in connection with, arising out of, or in
any way related or incidental to the application for or closing of this
Agreement, the Notes or any advance made thereunder, or any of the Loan
Documents executed or delivered in connection herewith or the transactions
related hereto or thereto; and
(ii) any fraudulent conveyance made by Borrower, CESRRI or any
Subsidiary.
SECTION 9.15. Confidentiality.
---------------
The Administrative Agent, and each Bank shall use reasonable efforts to
assure that information about Borrower, CESRRI and its Subsidiaries and
Investments Affiliates, and the Properties thereof and their operations, affairs
and financial condition, not generally disclosed to the public, which is
furnished to Administrative Agent, or any Bank pursuant to the provisions hereof
or any other Loan Document is used only for the purposes of this Agreement and
shall not be divulged to any Person other than the Administrative Agent, the
Banks, and their affiliates and respective officers, directors, employees and
agents who are actively and directly participating in the evaluation,
administration or enforcement of the Loan, except: (a) to their attorneys and
accountants, (b) in connection with the enforcement of the rights and exercise
of any remedies of the Administrative Agent, and the Banks hereunder and under
the other Loan Documents, (c) in connection with assignments and participations
and the solicitation of prospective assignees and participants referred to in
Section 9.6 hereof, and (d) as may otherwise be required or requested by any
regulatory authority having jurisdiction over the Administrative Agent, or any
Bank or by any applicable law, rule, regulation or judicial process.
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SECTION 9.16. Bank's Failure to Fund.
----------------------
(a) Unless the Administrative Agent shall have received notice from a
Bank prior to the date of any Borrowing that such Bank will not make available
to the Administrative Agent such Bank's share of such Borrowing, the
Administrative Agent may assume that such Bank has made such share available to
the Administrative Agent on the date of such Borrowing in accordance with
Section 2.4(b) or Section 2.16(e) hereof, and the Administrative Agent may, in
reliance upon such assumption, make available to Borrower on such date a
corresponding amount. If and to the extent that such Bank shall not have so made
such share available to the Administrative Agent, such Bank and Borrower
severally agree to repay to the Administrative Agent forthwith on demand such
corresponding amount together with interest thereon, in accordance with the
provisions of Section 2.4(c) or Section 2.16(e) hereof. If such Bank shall repay
to the Administrative Agent such corresponding amount, such amount so repaid
shall constitute such Bank's Loan included in such Borrowing for purposes of
this Agreement. Nothing contained in this Section 9.16(a) or Sections 2.4(c) or
2.16(e), shall be deemed to reduce the Commitment of any Bank or in any way
affect the rights of Borrower with respect to any defaulting Bank or
Administrative Agent. The failure of any Bank to make available to the
Administrative Agent such Bank's share of any Borrowing in accordance with
Sections 2.4(b) or 2.16(e) hereof shall not relieve any other Bank of its
obligations to fund its Commitment, in accordance with the provisions hereof.
(b) If a Bank does not advance to Administrative Agent such Bank's
pro rata share of a Loan in accordance herewith, then neither Administrative
Agent, nor the other Banks shall be required or obligated to fund such Bank's
pro rata share of such Loan.
(c) As used herein, the following terms shall have the meanings set
forth below:
(i) "Defaulting Bank" shall mean any Bank which (x) does not
---------------
advance to the Administrative Agent such Bank's pro rata share of a Loan in
accordance herewith for a period of five (5) Domestic Business Days after notice
of such failure from Administrative Agent, (y) shall otherwise fail to perform
such Bank's obligations under the Loan Documents for a period of five (5)
Domestic Business Days after notice of such failure from Administrative Agent,
or (z) shall fail to pay the Administrative Agent, or any other Bank, as the
case may be, upon demand, such Bank's pro rata share of any costs, expenses or
disbursements incurred or made by the Administrative Agent pursuant to the terms
of the Loan
118
Documents for a period of five (5) Domestic Business Days after notice of such
failure from Administrative Agent, and in all cases, such failure is not as a
result of a good faith dispute as to whether such advance is properly required
to be made pursuant to the provisions of this Agreement, or as to whether such
other performance or payment is properly required pursuant to the provisions of
this Agreement.
(ii) "Junior Creditor" means any Defaulting Bank which has not
----------------
(x) fully cured each and every default on its part under the Loan Documents and
(y) unconditionally tendered to the Administrative Agent such Defaulting Bank's
pro rata share of all costs, expenses and disbursements required to be paid or
reimbursed pursuant to the terms of the Loan Documents.
(iii) "Payment in Full" means, as of any date, the receipt by the
---------------
Banks who are not Junior Creditors of an amount of cash, in lawful currency of
the United States, sufficient to indefeasibly pay in full all Senior Debt.
(iv) "Senior Debt" means (x) collectively, any and all
-----------
indebtedness, obligations and liabilities of the Borrower to the Banks who are
not Junior Creditors from time to time, whether fixed or contingent, direct or
indirect, joint or several, due or not due, liquidated or unliquidated,
determined or undetermined, arising by contract, operation of law or otherwise,
whether on open account or evidenced by one or more instruments, and whether for
principal, premium, interest (including, without limitation, interest accruing
after the filing of a petition initiating any proceeding referred to in Section
6.1(f) or (g)), reimbursement for fees, indemnities, costs, expenses or
otherwise, which arise under, in connection with or in respect of the Loans or
the Loan Documents, and (y) any and all deferrals, renewals, extensions and
refundings of, or amendments, restatements, rearrangements, modifications or
supplements to, any such indebtedness, obligation or liability.
(v) "Subordinated Debt" means (x) any and all indebtedness,
-----------------
obligations and liabilities of Borrower to one or more Junior Creditors from
time to time, whether fixed or contingent, direct or indirect, joint or several,
due or not due, liquidated or unliquidated, determined or undetermined, arising
by contract, operation of law or otherwise, whether on open account or evidenced
by one or more instruments, and whether for principal, premium, interest
(including, without limitation, interest accruing after the filing of a petition
initiating any proceeding referred to in Section 6.1(f) or (g)), reimbursement
for fees, indemnities, costs, expenses or otherwise, which arise under, in
connection with or in respect of the Loans or the Loan Documents, and (y) any
and all deferrals, renewals, extensions and refundings of, or amendments,
restatements, rearrangements, modifications
119
or supplements to, any such indebtedness, obligation or liability.
(d) Immediately upon a Bank's becoming a Junior Creditor, no Junior
Creditor shall, prior to Payment in Full of all Senior Debt:
(i) accelerate, demand payment of, xxx upon, collect, or
receive any payment upon, in any manner, or satisfy or otherwise discharge, any
Subordinated Debt, whether for principal, interest and otherwise;
(ii) take or enforce any Liens to secure Subordinated Debt or
attach or levy upon any assets of Borrower, to enforce any Subordinated Debt;
(iii) enforce or apply any security for any Subordinated Debt;
or
(iv) incur any debt or liability, or the like, to, or receive
any loan, return of capital, advance, gift or any other property, from, the
Borrower.
(e) In the event of:
(i) any insolvency, bankruptcy, receivership, liquidation,
dissolution, reorganization, readjustment, composition or other similar
proceeding relating to Borrower;
(ii) any liquidation, dissolution or other winding-up of the
Borrower, voluntary or involuntary, whether or not involving insolvency,
reorganization or bankruptcy proceedings;
(iii) any assignment by the Borrower for the benefit of
creditors;
(iv) any sale or other transfer of all or substantially all
assets of the Borrower; or
(v) any other marshalling of the assets of the Borrower;
each of the Banks shall first have received Payment in Full of all Senior Debt
before any payment or distribution, whether in cash, securities or other
property, shall be made in respect of or upon any Subordinated Debt. Any payment
or distribution, whether in cash, securities or other property that would
otherwise be payable or deliverable in respect of Subordinated Debt to any
Junior Creditor but for this Agreement shall be paid or delivered directly to
the Administrative Agent
120
for distribution to the Banks in accordance with this Agreement until Payment in
Full of all Senior Debt. If any Junior Creditor receives any such payment or
distribution, it shall promptly pay over or deliver the same to the
Administrative Agent for application in accordance with the preceding sentence.
(f) Each Junior Creditor shall file in any bankruptcy or other
proceeding of Borrower in which the filing of claims is required by law, all
claims relating to Subordinated Debt that such Junior Creditor may have against
Borrower and assign to the Banks who are not Junior Creditors all rights of such
Junior Creditor thereunder. If such Junior Creditor does not file any such claim
prior to forty-five (45) days before the expiration of the time to file such
claim, Administrative Agent, as attorney-in-fact for such Junior Creditor, is
hereby irrevocably authorized to do so in the name of such Junior Creditor or,
in Administrative Agent's sole discretion, to assign the claim to a nominee and
to cause proof of claim to be filed in the name of such nominee. The foregoing
power of attorney is coupled with an interest and cannot be revoked. The
Administrative Agent shall, to the exclusion of each Junior Creditor, have the
sole right, subject to Section 9.5 hereof, to accept or reject any plan proposed
in any such proceeding and to take any other action that a party filing a claim
is entitled to take. In all such cases, whether in administration, bankruptcy or
otherwise, the Person or Persons authorized to pay such claim shall pay to
Administrative Agent the amount payable on such claim and, to the full extent
necessary for that purpose, each Junior Creditor hereby transfers and assigns to
the Administrative Agent all of the Junior Creditor's rights to any such
payments or distributions to which Junior Creditor would otherwise be entitled.
(g) (i) If any payment or distribution of any character or any
security, whether in cash, securities or other property, shall be received by
any Junior Creditor in contravention of any of the terms hereof, such payment or
distribution or security shall be received in trust for the benefit of, and
shall promptly be paid over or delivered and transferred to, Administrative
Agent for application to the payment of all Senior Debt, to the extent necessary
to achieve Payment in Full. In the event of the failure of any Junior Creditor
to endorse or assign any such payment, distribution or security, Administrative
Agent is hereby irrevocably authorized to endorse or assign the same as
attorney-in-fact for such Junior Creditor.
(ii) Each Junior Creditor shall take such action (including,
without limitation, the execution and filing of a financing statement with
respect to this Agreement and the execution, verification, delivery and filing
of proofs of claim, consents, assignments or other instructions that
Administrative Agent may require from time to time in order to prove or realize
upon any rights or claims
121
pertaining to Subordinated Debt or to effectuate the full benefit of the
subordination contained herein) as may, in Administrative Agent's sole and
absolute discretion, be necessary or desirable to assure the effectiveness of
the subordination effected by this Agreement.
(h) (i) Each Bank that becomes a Junior Creditor understands and
acknowledges by its execution hereof that each other Bank is entering into this
Agreement and the Loan Documents in reliance upon the absolute subordination in
right of payment and in time of payment of Subordinated Debt to Senior Debt as
set forth herein.
(ii) Only upon the Payment in Full of all Senior Debt shall any
Junior Creditor be subrogated to any remaining rights of the Banks which are not
Defaulting Banks to receive payments or distributions of assets of the Borrower
made on or applicable to any Senior Debt.
(iii) Each Junior Creditor agrees that it will deliver all
instruments or other writings evidencing any Subordinated Debt held by it to
Administrative Agent, promptly after request therefor by the Administrative
Agent.
(iv) No Junior Creditor may at any time sell, assign or
otherwise transfer any Subordinated Debt, or any portion thereof, including,
without limitation, the granting of any Lien thereon, unless and until
satisfaction of the requirements of Section 9.6 above and the proposed
transferee shall have assumed in writing the obligation of the Junior Creditor
to the Banks under this Agreement, in a form acceptable to the Administrative
Agent.
(v) If any of the Senior Debt should be invalidated, avoided
or set aside, the subordination provided for herein nevertheless shall continue
in full force and effect and, as between the Banks which are not Defaulting
Banks and all Junior Creditors, shall be and be deemed to remain in full force
and effect.
(vi) Each Junior Creditor hereby irrevocably waives, in respect
of Subordinated Debt, all rights (x) under Sections 361 through 365, 502(e) and
509 of the Bankruptcy Code (or any similar sections hereafter in effect under
any other Federal or state laws or legal or equitable principles relating to
bankruptcy, insolvency, reorganizations, liquidations or otherwise for the
relief of debtors or protection of creditors), and (y) to seek or obtain
conversion to a different type of proceeding or to seek or obtain dismissal of a
proceeding, in each case in relation to a bankruptcy, reorganization, insolvency
or other proceeding under similar laws with respect to the Borrower. Without
limiting the generality of the foregoing, each Junior Creditor hereby
specifically waives (A) the right to
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seek to give credit (secured or otherwise) to the Borrower in any way under
Section 364 of the Bankruptcy Code unless the same is subordinated in all
respects to Senior Debt in a manner acceptable to Administrative Agent in its
sole and absolute discretion and (B) the right to receive any collateral
security (including any "super priority" or equal or "priming" or replacement
Lien) for any Subordinated Debt unless the Banks which are not Defaulting Banks
have received a senior position acceptable to the Banks in their sole and
absolute discretion to secure all Senior Debt (in the same collateral to the
extent collateral is involved).
(i) (i) In addition to and not in limitation of the subordination
effected by this Section 9.16, the Administrative Agent and each of the Banks
which are not Defaulting Banks may in their respective sole and absolute
discretion, also exercise any and all other rights and remedies available at law
or in equity in respect of a Defaulting Bank; and
(ii) The Administrative Agent shall give each of the Banks
notice of the occurrence of a default under this Section 9.16 by a Defaulting
Bank and if the Administrative Agent and/or one or more of the other Banks
shall, at their option, fund any amounts required to be paid or advanced by a
Defaulting Bank, the other Banks who have elected not to fund any portion of
such amounts shall not be liable for any reimbursements to the Administrative
Agent and/or to such other funding Banks.
(j) Notwithstanding anything to the contrary contained or implied
herein, a Defaulting Bank shall not be entitled to vote on any matter as to
which a vote by the Banks is required hereunder, including, without limitation,
any actions or consents on the part of the Administrative Agent as to which the
approval or consent of all the Banks or the Required Banks is required under
Article VIII, Section 9.5 or elsewhere, so long as such Bank is a Defaulting
Bank; provided, however, that in the case of any vote requiring the unanimous
consent of the Banks, if all the Banks other than the Defaulting Bank shall have
voted in accordance with each other, then the Defaulting Bank shall be deemed to
have voted in accordance with such Banks.
(k) Each of the Administrative Agent and any one or more of the Banks
which are not Defaulting Banks may, at their respective option, (i) advance to
the Borrower such Bank's pro rata share of the Loans not advanced by a
Defaulting Bank in accordance with the Loan Documents, or (ii) pay to the
Administrative Agent such Bank's pro rata share of any costs, expenses or
disbursements incurred or made by the Administrative Agent pursuant to the terms
of this Agreement not theretofore paid by a Defaulting Bank. Immediately upon
the making of any such advance by the Administrative Agent or any one of the
Banks, such Bank's pro rata share and the pro rata share of the Defaulting
123
Bank shall be recalculated to reflect such advance. All payments, repayments and
other disbursements of funds by the Administrative Agent to Banks shall
thereupon and, at all times thereafter be made in accordance with such Bank's
recalculated pro rata share unless and until a Defaulting Bank shall fully cure
all defaults on the part of such Defaulting Bank under the Loan Documents or
otherwise existing in respect of the Loans or this Agreement, at which time the
pro rata share of the Bank(s) which advanced sums on behalf of the Defaulting
Bank and of the Defaulting Bank shall be restored to their original percentages.
SECTION 9.17. No Bankruptcy Proceedings.
-------------------------
Each of the Borrower, the Banks and the Administrative Agent hereby
agrees that it will not institute against any Designated Lender or join any
other Person in instituting against any Designated Lender any bankruptcy,
reorganization, arrangement, insolvency or liquidation proceeding under any
federal or state bankruptcy or similar law, until one year and one day after the
later to occur of (i) the payment in full of the latest maturing commercial
paper note issued by such Designated Lender and (ii) the later to occur of (a)
the payment in full of the Obligations or (b) the Maturity Date.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
124
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective authorized officers as of the day and year
first above written.
XXXXXXX X. XXXXX RESIDENTIAL REALTY L.P.,
a Delaware limited partnership
By: Xxxxxxx X. Xxxxx Residential Realty, Inc., a
Maryland corporation, its general partner
By: __________________________
X.X. Xxxxxx,
Executive Vice President, Chief Operating
Officer and Chief Financial Officer
PNC BANK, NATIONAL ASSOCIATION, as Administrative
Agent and as a Bank
By:________________________________
Name:______________________________
Title:_____________________________
FIRST UNION NATIONAL BANK, as Syndication Agent and
as a Bank
By:________________________________
Name:______________________________
Title:_____________________________
U.S. BANK NATIONAL ASSOCIATION, as Documentation
Agent and as a Bank
By:________________________________
Name:______________________________
Title:_____________________________
FLEET NATIONAL BANK
By:________________________________
125
Name:______________________________
Title:_____________________________
COMMERZBANK AKTIENGESELLSCHAFT, NEW YORK BRANCH
By:________________________________
Name:______________________________
Title:_____________________________
SUNTRUST BANK
By:________________________________
Name:______________________________
Title:_____________________________
CHEVY CHASE BANK, FSB
By:________________________________
Name:______________________________
Title:_____________________________
126
JOINDER
XXXXXXX X. XXXXX RESIDENTIAL REALTY, INC., joins in this Agreement solely
for the purpose of making the representations and warranties with respect to it
contained in Article IV of the Agreement and for the purpose of covenanting and
agreeing to be bound by the covenants and agreements with respect to it
contained in Article V of the Agreement.
Xxxxxxx X. Xxxxx Residential Realty, Inc., a
Maryland corporation
By: _________________________________
X.X. Xxxxxx,
Executive Vice President, Chief
Operating Officer and Chief Financial
Officer
127
EXHIBIT A-1
BID RATE NOTE
$__________ Pittsburgh, Pennsylvania
February 5, 2001
This Bid Rate Note is executed and delivered under and pursuant to the terms of
that certain Credit Agreement ($50,000,000 Revolving Line of Credit) dated as of
February 5, 2001 (the Credit Agreement together with the exhibits and schedules
thereto and all amendments, modifications, extensions, renewals, replacements or
restatements thereof and thereto, the "Agreement") by and among XXXXXXX X. XXXXX
RESIDENTIAL REALTY L.P. (the "Borrower"), PNC BANK, NATIONAL ASSOCIATION, for
itself and as administrative agent for the Banks (in such capacity, the
"Administrative Agent"), FIRST UNION NATIONAL BANK, for itself and as
Syndication Agent, U.S. BANK NATIONAL ASSOCIATION for itself and as
Documentation Agent, the other financial institutions listed on the signature
pages thereof and each other financial institution which, from time to time, may
become a party to the Agreement. All capitalized terms used herein shall have
the meanings ascribed thereto in the Agreement unless defined to the contrary
herein.
FOR VALUE RECEIVED, the Borrower promises to pay to the order of _______________
______________ (the "Bank"), its successors and permitted
assignees, at the office of the Administrative Agent at One PNC Plaza, 249 Fifth
Avenue, Mail Stop P1-XXXX-22-1, Pittsburgh, Pennsylvania 15222-2707, Attention:
Multi-Bank Loan Administration, the lesser of (i) the principal sum of_________
DOLLARS ($________) or (ii) the aggregate unpaid principal amount of each
outstanding Money Market Loan made by the Bank to the Borrower, on the last day
of the Interest Period applicable thereto pursuant to Section 2.3 of the
Agreement together with interest on the unpaid principal balance thereof from
time to time outstanding.
All Money Market Loans made by the Bank, the respective types and maturities
thereof, and all repayments of the principal thereof shall be recorded by the
Bank and, if the Bank so elects in connection with any transfer or enforcement
hereof, appropriate notations to evidence the foregoing information with respect
to each such Money Market Loan then outstanding may be endorsed by the Bank on
the schedule attached hereto, or on a continuation of such schedule attached to
and made a part hereof; provided that the failure of the Bank to make any such
--------
recordation of endorsement shall not affect the obligations of the Borrower
hereunder or under the Agreement.
Interest on the unpaid principal balance hereof shall be due and payable at the
rates and at the times determined in accordance with Sections 2.3 and 2.7 of the
Agreement during the term hereof to and including the end of the Interest Period
applicable thereto and at maturity, and shall be calculated and adjusted in
accordance with the terms of the Agreement, including, without limitation,
Sections 2.3 and 2.7 thereof.
1
This Bid Rate Note is one of the Bid Rate Notes referred to in the Agreement.
Reference is made to the Agreement for provisions for the acceleration of the
maturity hereof. All the terms, conditions, covenants, representations and
warranties of the Agreement are incorporated herein by reference as if same were
fully set forth herein. Demand, presentation, protest, notice of dishonor and
notice of default are hereby waived.
THIS BID RATE NOTE SHALL BE GOVERNED BY THE LAWS OF THE COMMONWEALTH OF VIRGINIA
WITHOUT REFERENCE TO THE PRINCIPLES THEREOF REGARDING CONFLICTS OF LAW.
WITNESS the due execution hereof with the intent to be legally bound hereby.
XXXXXXX X. XXXXX RESIDENTIAL REALTY L.P.,
a Delaware limited partnership
By: Xxxxxxx X. Xxxxx Residential Realty, Inc., a
Maryland corporation, its general partner
By:____________________________________
Name:_______________________________
Title:_________________________________
2
Note (cont'd)
LOANS AND PAYMENTS OF PRINCIPAL
________________________________________________________________________________
______________
Amount of
Amount of Type of Principal Maturity
Notation
Date Loan Loan Repaid Date Made
By
________________________________________________________________________________
______________
________________________________________________________________________________
______________
________________________________________________________________________________
______________
________________________________________________________________________________
______________
________________________________________________________________________________
______________
________________________________________________________________________________
______________
________________________________________________________________________________
______________
________________________________________________________________________________
______________
________________________________________________________________________________
______________
________________________________________________________________________________
3
______________
________________________________________________________________________________
______________
________________________________________________________________________________
______________
________________________________________________________________________________
______________
________________________________________________________________________________
______________
________________________________________________________________________________
______________
________________________________________________________________________________
______________
EXHIBIT A-2
REVOLVING CREDIT NOTE
$___________ Pittsburgh, Pennsylvania
February 5, 2001
This Revolving Credit Note is executed and delivered under and pursuant to the
terms of that certain Credit Agreement ($50,000,000 Revolving Line of Credit)
dated as of February 5, 2001 (the Credit Agreement together with the exhibits
and schedules thereto and all amendments, modifications, extensions, renewals,
replacements or restatements thereof and thereto, the "Agreement") by and among
XXXXXXX X. XXXXX RESIDENTIAL REALTY L.P. (the "Borrower"), PNC BANK, NATIONAL
ASSOCIATION, for itself and as administrative agent for the Banks (in such
capacity, the "Administrative Agent"), FIRST UNION NATIONAL BANK, for itself and
as Syndication Agent, U.S. BANK NATIONAL ASSOCIATION for itself and as
Documentation Agent, the other financial institutions listed on the signature
pages thereof and each other financial institution which, from time to time, may
become a party to the Agreement. All capitalized terms used herein shall have
the meanings ascribed thereto in the Agreement unless defined to the contrary
herein.
FOR VALUE RECEIVED, the Borrower promises to pay to the order of _______________
4
_________ (the "Bank"), its successors and permitted assignees, at the office of
the Administrative Agent at One PNC Plaza, 249 Fifth Avenue, Mail Stop
P1-XXXX-22-1, Pittsburgh, Pennsylvania 15222-2707, Attention: Multi-Bank Loan
Administration, on the Maturity Date the lesser of (i) the principal sum of
________________________ DOLLARS ($______) or (ii) the aggregate unpaid
principal amount of all outstanding Committed Loans made by the Bank to the
Borrower on or before the Maturity Date pursuant to Article II of the Agreement
together with interest on the unpaid principal balance thereof from time to time
outstanding.
All Committed Loans made by the Bank, the respective types and maturities
thereof, and all repayments of the principal thereof shall be recorded by the
Bank and, if the Bank so elects in connection with any transfer or enforcement
hereof, appropriate notations to evidence the foregoing information with respect
to each such Committed Loan then outstanding may be endorsed by the Bank on the
schedule attached hereto, or on a continuation of such schedule attached to and
made a part hereof; provided that the failure of the Bank to make any such
--------
recordation or endorsement shall not affect the obligations of the Borrower
hereunder or under the Agreement.
Interest on the unpaid principal balance hereof shall be due and payable at the
rates and at the times specified in the Agreement during the term hereof to and
including the Maturity Date and at maturity, and shall be calculated and
adjusted in accordance with the terms of the Agreement.
This Revolving Credit Note is one of the Revolving Credit Notes referred to in
the Agreement. Reference is made to the Agreement for provisions for the
repayment hereof, for the termination of the Commitment and the reduction and
cancellation thereof, and for the acceleration of the maturity hereof. All of
the terms, conditions, covenants, representations and warranties of the
Agreement are incorporated herein by reference as if same were fully set forth
herein. Demand, presentation, protest, notice of dishonor and notice of default
are hereby waived.
THIS REVOLVING CREDIT NOTE SHALL BE GOVERNED BY THE LAWS OF THE COMMONWEALTH OF
VIRGINIA WITHOUT REFERENCE TO THE PRINCIPLES THEREOF REGARDING CONFLICTS OF LAW.
WITNESS the due execution hereof with the intent to be legally bound hereby.
XXXXXXX X. XXXXX RESIDENTIAL REALTY L.P.,
a Delaware limited partnership
By: Xxxxxxx X. Xxxxx Residential Realty, Inc., a
Maryland corporation, its general partner
By:_________________________________
Name:________________________________
Title:______________________________________
5
6
Note (cont'd)
LOANS AND PAYMENTS OF PRINCIPAL
________________________________________________________________________________
______________
Amount of
Amount of Type of Principal Maturity
Notation
Date Loan Loan Repaid Date Made
By
________________________________________________________________________________
______________
________________________________________________________________________________
______________
________________________________________________________________________________
______________
________________________________________________________________________________
______________
________________________________________________________________________________
______________
________________________________________________________________________________
______________
________________________________________________________________________________
______________
________________________________________________________________________________
______________
________________________________________________________________________________
______________
________________________________________________________________________________
7
______________
________________________________________________________________________________
______________
________________________________________________________________________________
______________
________________________________________________________________________________
______________
________________________________________________________________________________
______________
________________________________________________________________________________
______________
________________________________________________________________________________
______________
________________________________________________________________________________
______________
8
EXHIBIT B
Form of Money Market Quote Request
----------------------------------
[Date]
To: PNC Bank, National Association (the "Administrative Agent")
From: Xxxxxxx X. Xxxxx Residential Realty L.P.
Re: Credit Agreement ($50,000,000 Revolving Line of Credit) (the "Credit
Agreement") dated as of February 5, 2001 among Xxxxxxx X. Xxxxx
Residential Realty L.P., the Banks parties thereto, PNC Bank, National
Association, for itself and as Administrative Agent, U.S. Bank
National Association, for itself and as Documentation Agent, and First
Union National Bank, for itself and as Syndication Agent
We hereby give notice pursuant to Section 2.3 of the Credit Agreement that
we request Money Market Quotes for the following proposed Money Market
Borrowing(s):
Date of Borrowing: ______________________ Type of Borrowing:______________
Principal Amount* Interest Period**
---------------- ---------------
$
Such Money Market Quotes should offer a Money Market [Margin] [Absolute
Rate]. [The applicable base rate is the London Interbank Offered Rate.]
__________________
* Amount must be $3,000,000 or a larger multiple of $100,000.
** Not less than 14 days nor more than 180 days, subject to the provisions of
the definition of Interest Period.
9
Terms used herein have the meanings assigned to them in the Credit
Agreement.
XXXXXXX X. XXXXX RESIDENTIAL REALTY L.P.,
a Delaware limited partnership
By: Xxxxxxx X. Xxxxx Residential Realty, Inc., a
Maryland corporation, its general partner
By:_________________________________
Name:________________________________
Title:______________________________________
10
EXHIBIT C
FORM OF INVITATION FOR MONEY MARKET QUOTES
================================================================================
From: PNC Multi-Bank Loan Administration
Fax: 000-000-0000 Phone: 000-000-0000
To: _____________________________
Attn:________________________
Fax: _____________________________
Date: 00/00/00
Re: XXXXXXX X. XXXXX RESIDENTIAL REALTY L.P.
Agreement Dated 02/05/01
================================================================================
Bid Request Number ___________________
Request Date 00/00/00
Base Rate Code (Margin) (Absolute Rate)
Amount Requested $___________________
Term 1:
Start Date: 00/00/00
End Date: 00/00/00
Term 2:
Start Date: 00/00/00
End Date: 00/00/00
Term 3:
Start Date: 00/00/00
End Date: 00/00/00
Term 4:
Start Date: 00/00/00
End Date: 00/00/00
Term 5:
Start Date: 00/00/00
End Date: 00/00/00
Participant replies must be received by (2:00 p.m.) (9:30 a.m.) on 00/00/00
Agent reply must be received by (1:45 p.m.) (9:15 a.m.) on 00/00/00
11
Please call _______________ at ________________ if you have any questions.
Best regards,
_________________
12
EXHIBIT D
Form of Money Market Quote
--------------------------
To: PNC Bank, National Association
Re: Money Market Quote to Xxxxxxx X. Xxxxx Residential Realty L.P. (the
"Borrower")
In response to your invitation on behalf of the Borrower dated ______,
19__, we hereby make the following Money Market Quote on the following terms:
1. Quoting Bank: __________________________________________
2. Person to contact at Quoting Bank: _______________________________
3. Date of Borrowing: __________________________________________*
4. We hereby offer to make Money Market Loan(s) in the following
principal amounts, for the following Interest Periods and at the
following rates:
Principal Interest [Money Market
Amount** Period*** Margin****] [Absolute Rate*****]
-------------------------------------------------------------------
$
$
[Provided, that the aggregate principal amount of Money Market Loans
for which the above offers may be accepted shall not exceed $_________
__ .]**
We understand and agree that the offer(s) set forth above, subject to
the satisfaction of the applicable conditions set forth in the Credit Agreement
($50,000,000 Revolving Line of Credit) dated as of February 5, 2001 among
Xxxxxxx X. Xxxxx Residential Realty L.P., the Banks parties thereto, U.S. Bank
National Association, as Documentation Agent, and First Union National Bank, as
Syndication Agent, and yourselves, as Administrative Agent, irrevocably
obligates us to make the Money Market Loan(s) for which any offer(s) are
accepted, in whole or in part.
Very truly yours,
[NAME OF BANK]
13
Dated:_______________________ By:_________________________
Authorized Officer
______________________
* As specified in the related Invitation.
** Principal amount bid for each Interest Period may not exceed principal
amount requested. Specify aggregate limitation if the sum of the individual
offers exceeds the amount the Bank is willing to lend. Bids must be made for
$3,000,000 or a larger multiple of $100,000.
*** Not less than 14 days, as specified in the related Invitation. No more
than five bids are permitted for each Interest Period. **** Margin over or under
the London Interbank Offered Rate determined for the applicable Interest Period.
Specify percentage (to the nearest 1/10,000 of 1%) and specify whether "PLUS" or
"MINUS".
***** Specify rate of interest per annum (to the nearest 1/10,000th of 1%).
14
EXHIBIT E
ASSIGNMENT AND ASSUMPTION AGREEMENT
Reference is made to the Credit Agreement ($50,000,000 Revolving Line
of Credit) dated as of February 5, 2001 (as amended, supplemented or modified
from time to time, the "Credit Agreement") by and among XXXXXXX X. XXXXX
RESIDENTIAL REALTY L.P., a Delaware limited partnership ("Borrower"), and PNC
BANK, NATIONAL ASSOCIATION, a national banking association (the "Administrative
Agent"), individually and as administrative agent for the Banks (as defined in
the Credit Agreement), FIRST UNION NATIONAL BANK, as Syndication Agent and as a
Bank, U.S. BANK NATIONAL ASSOCIATION, as Documentation Agent and as a Bank, and
the other Banks listed on the signature pages thereof. Unless otherwise defined
herein, terms defined in the Credit Agreement are used herein with the same
meanings.
___________________, a __________________ (the "Assignor") and ____________
_______, a _______________________ (the "Assignee"), intending to be legally
bound hereby, make this Assignment and Assumption Agreement as of the _______
day of _______, 200_, and hereby agree as follows:
1. Effective as of the Effective Date (as defined below), the Assignor
hereby sells and assigns to the Assignee, and the Assignee hereby purchases and
assumes from the Assignor, WITHOUT RECOURSE to the Assignor, a portion of the
Assignor's Commitment in the amount of $_________ and the Assignor's rights and
obligations under the Credit Agreement, including, without limitation, all
obligations to make advances of the assigned portion of the Assignor's
Commitment and the unpaid principal amount of the assigned portion of the
Assignor's Commitment owing to the Assignor on the Effective Date.
2. The Assignor (i) represents and warrants that, as of____, 200__, its
Commitment is $________ (____), and the unpaid principal amount of the Loans
owing to the Assignor is $_______ (___); (ii) represents and warrants 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 any
statements, warranties or representations made in or in connection with the
Credit Agreement or any of the Loan Documents or the execution, legality,
validity, enforceability, genuineness, sufficiency or value of the Credit
Agreement or any of the Loan Documents or any other instrument or document
furnished pursuant thereto; (iv) makes no representation or warranty and assumes
no responsibility with respect to the financial condition of Borrower or the
performance or observance by Borrower of any of its obligations under the Credit
Agreement or any of the Loan Documents or any other instrument or document
furnished pursuant thereto; and (v) has delivered to the Administrative Agent
the Note referred to in the Credit Agreement held by such Assignor and requests
that the Administrative Agent exchange the Note for new Notes as follows:
15
__________________ $__________________
__________________ $__________________
3. The Assignee (i) confirms that it has received a copy of the Credit
Agreement 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
Assumption Agreement; (ii) from and after the Effective Date (as hereinafter
defined) agrees that it will, independently and without reliance upon the
Administrative Agent, the Assignor or any other Bank, and based on such
documents and information as it shall deem appropriate at the time, continue to
make its own credit decisions in taking or not taking action under the Credit
Agreement; (iii) from and after the Effective Date (as hereinafter defined)
appoints and authorizes the Administrative Agent to take such actions on its
behalf and to exercise such powers under the Loan Documents as are delegated to
the Administrative Agent by the terms thereof; (iv) agrees that it will become a
party to and be bound by the Credit Agreement on the Effective Date as if it
were an original Bank thereunder and will have the rights and obligations of a
Bank thereunder and will perform in accordance with their terms all of the
obligations which by the terms of the Credit Agreement are required to be
performed by it as a Bank; and (v) specifies as its address for notices the
office set forth beneath its name on the signature pages hereof.
4. The effective date of this Assignment and Assumption Agreement shall
be _____, 200_ (the "Effective Date"), provided that on such date Assignee
receives a separate Note by the Borrower in the amount of the assigned portion
of the Assignor's Commitment. Following the execution of this Assignment and
Assumption Agreement, it will be delivered to the Administrative Agent for
acceptance by the Administrative Agent.
5. Upon such acceptance, from and after the Effective Date, (i) the
Assignee shall be a party to the Credit Agreement and, to the extent provided in
this Assignment and Assumption Agreement, have the rights and obligations of a
Bank thereunder and under the Loan Documents, (ii) the Assignor shall, to the
extent of the Commitment of Assignee provided in this Assignment and Assumption
Agreement, relinquish its rights and be released from its obligations under the
Credit Agreement, subject to the terms hereof, and (iii) the Commitment of the
Assignor shall be $________ and the Commitment of Assignee shall be $_________.
6. Upon such acceptance, from and after the Effective Date, the
Administrative Agent shall make all payments received from Borrower under the
Credit Agreement and the Notes in respect of the interests assigned hereby
(including, without limitation, all payments of principal and interest in
respect of the interests assigned hereby) to Assignee. The Assignor and Assignee
shall make all appropriate adjustments in payments under the Credit Agreement
and the Notes for periods prior to the Effective Date directly among themselves.
7. Schedules I and II attached hereto shall be substituted for Schedules
I and II to the Credit Agreement.
8. This Assignment and Assumption Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and
assigns.
16
9. This Assignment and Assumption Agreement shall be governed by and
construed in accordance with the laws of the Commonwealth of Virginia.
10. This Assignment and Assumption Agreement may be executed by the
different parties hereto in one or more counterparts, each of which, when so
executed, shall be an original, and all such counterparts shall constitute one
and the same instrument.
[REMAINDER OF PAGE
LEFT INTENTIONALLY BLANK]
17
IN WITNESS WHEREOF, the parties hereto, by their officers thereunto, have
executed this Assignment and Assumption Agreement under seal as of the day and
year first above written.
WITNESS [NAME OF ASSIGNOR]
By:
_________________________ ___________________________________
Name:
_________________________________
Title:
________________________________
[NAME OF ASSIGNEE]
By:
___________________________________
Name:
_________________________________
Title:
________________________________
Notice Address:
______________________
_____________________________________
Telephone No.:
_______________________
Telecopier No.:
______________________
CONSENTED TO this _____
day of __________, 200
___
PNC Bank, National Association,
as Administrative Agent
By:
__________________________________
Title:
_______________________________
18
JOINDER
XXXXXXX X. XXXXX RESIDENTIAL REALTY L.P. joins in this Assignment and
Assumption Agreement for the purpose of agreeing to the substitution of
Schedules I and II attached hereto for Schedules I and II attached to the Credit
Agreement.
XXXXXXX X. XXXXX RESIDENTIAL REALTY L.P.,
a Delaware limited partnership
By: Xxxxxxx X. Xxxxx Residential Realty, Inc.,
Maryland corporation, its general partner
By: _______________________________________
Name: _____________________________________
Title:_____________________________________
19
EXHIBIT F
Qualifying Unencumbered Properties
----------------------------------
1. One East Delaware
2. Westerly at Worldgate
3. Boulevard of Old Town
4. Courthouse Place
5. Ocean Crest Club
6. Ocean Crest Beach
7. Delaware Place
8. Reston Landing
9. Park Connecticut
10. Harbour House
20
EXHIBIT G
---------
FORM OF DESIGNATION AGREEMENT
-----------------------------
Dated______________, 200___
Reference is made to that certain Credit Agreement ($50,000,000
Revolving Line of Credit), dated as of February 5, 2001 (as amended,
supplemented or otherwise modified from time to time, the "Credit Agreement")
among XXXXXXX X. XXXXX RESIDENTIAL REALTY L.P., the banks parties thereto, PNC
BANK, NATIONAL ASSOCIATION (the "Administrative Agent"), for itself and as
Administrative Agent, U.S. BANK NATIONAL ASSOCIATION, for itself and as
Documentation Agent, and FIRST UNION NATIONAL BANK, for itself and as
Syndication Agent. Terms defined in the Credit Agreement are used herein with
the same meaning, unless defined to the contrary herein.
[NAME OF DESIGNOR] (the "Designor"), [NAME OF DESIGNEE] (the "Designee"),
and the Administrative Agent agree as follows:
1. The Designor hereby designates the Designee, and the Designee hereby
accepts such designation, to have a right to make Money Market Loans pursuant to
Article II of the Credit Agreement. Any assignment by Designor to Designee of
its rights to make a Money Market Loan pursuant to such Article II shall be
effective at the time of the funding of such Money Market Loan and not before
such time.
2. Except as set forth in Section 7 below, the Designor makes no
representation or warranty and assumes no responsibility pursuant to this
Designation Agreement with respect to (a) any statements, warranties or
representations made in or in connection with any Loan Document or the
execution, legality, validity, enforceability, genuineness, sufficiency or value
of any Loan Document or any other instrument and document furnished pursuant
thereto and (b) the financial condition of the Borrower or the performance or
observance by the Borrower of any of its obligations under any Loan Document or
any other instrument or document furnished pursuant thereto.
3. The Designee (a) confirms that it has received a copy of each Loan
Document, together with copies of the financial statements referred to in
21
Articles IV and V of the Credit Agreement and such other documents and
information as it has deemed appropriate to make its own credit analysis and
decision to enter into this Designation Agreement; (b) agrees that it will
independently and without reliance upon the Administrative Agent, the Designor
or any other Bank and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in taking or
not taking action under any Loan Document; (c) confirms that it is a Designated
Lender; (d) appoints and authorizes the Administrative Agent to take such action
as agent on its behalf and to exercise such powers and discretion under any Loan
Document as are delegated to the Administrative Agent by the terms thereof,
together with such powers and discretion as are reasonably incidental thereto;
and (e) agrees to be bound by each and every provision of each Loan Document and
further agrees that it will perform in accordance with their terms all of the
obligations which by the terms of any Loan Document are required to be performed
by it as a Bank.
4. The Designee hereby appoints Designor as Designee's agent and
attorney in fact, and grants to Designor an irrevocable power of attorney, to
receive payments made for the benefit of Designee under the Credit Agreement, to
deliver and receive all communications and notices under the Credit Agreement
and other Loan Documents and to exercise on Designee's behalf all rights to vote
and to grant and make approvals, waivers, consents of amendments to or under the
Credit Agreement or other Loan Documents. Any document executed by the Designor
on the Designee's behalf in connection with the Credit Agreement or other Loan
Documents shall be binding on the Designee. The Borrower, the Administrative
Agent and each of the Banks may rely on and are beneficiaries of the preceding
provisions.
5. Following the execution of this Designation Agreement by the
Designor and its Designee, it will be delivered to the Administrative Agent for
acceptance and recording by the Administrative Agent. The effective date for
this Designation Agreement (the "Effective Date") shall be the date of
acceptance hereof by the Administrative Agent, unless otherwise specified on the
signature image thereto.
6. The Designor unconditionally agrees to pay or reimburse the Designee
and save the Designee harmless against all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
of any kind or nature whatsoever which may be imposed or
22
asserted by any of the parties to the Loan Documents against the Designee, in
its capacity as such, in any way relating to or arising out of this Agreement or
any other Loan Documents or any action taken or omitted by the Designee
hereunder or thereunder, provided that the Designor shall not be liable for any
portion of such liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements if the same results from the
Designee's gross negligence or willful misconduct.
7. Upon such acceptance and recording by the Administrative Agent, as
of the Effective Date, the Designee shall be a party to the Credit Agreement
with a right (subject to the provisions of Section 2.3 (b)) to make Money Market
Loans as a Bank pursuant to Section 2.3 of the Credit Agreement and the rights
and obligations of a Bank related thereto; provided, however, that the Designee
shall not be required to make payments with respect to such obligations except
to the extent of excess cash flow of such Designee which is not otherwise
required to repay obligations of such Designated Lender which are then due and
payable. Notwithstanding the foregoing, the Designor, as administrative agent
for the Designee, shall be and remain obligated to the Borrower, the
Administrative Agent and the Banks for each and every of the obligations of the
Designee and its Designor with respect to the Credit Agreement, including,
without limitation, any indemnification obligations under Section 7.6 of the
Credit Agreement and any sums otherwise payable to the Borrower by the Designee.
8. This Designation Agreement shall be governed by, and construed in
accordance with, the laws of the Commonwealth of Virginia.
9. This Designation Agreement may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each of
which when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement. Delivery of an executed
counterpart of a signature page to this Designation Agreement by facsimile
transmission shall be effective as delivery of a manually executed counterpart
of this Designation Agreement.
IN WITNESS WHEREOF, the Designor and the Designee, intending to be legally
bound, have caused this Designation Agreement to be executed by their officers
thereunto duly authorized as of the date first above written.
23
Effective Date:
200_
[NAME OF DESIGNOR], as
Designor
By:
__________________________________
Title:
________________________________
[NAME OF DESIGNEE], as
Designee
By:
__________________________________
Title:
________________________________
Applicable Lending Office
(and address for notices)
Accepted this day of
____________, 200_
PNC BANK, NATIONAL ASSOCIATION
as Administrative Agent
By:
__________________________________
Title:
_______________________________
24
EXHIBIT H
ADMINISTRATIVE QUESTIONNAIRE
Xxxxxxx X. Xxxxx Residential Realty L.P.
PNC CAPITAL MARKETS
MULTI-BANK LOAN ADMINISTRATION
QUESTIONNAIRE
Note: At closing, PNC Multi-Bank Loan Administration unit will assume the duties
and functions of Administrative Agent for the Facility. This questionnaire
should be completed in order to facilitate closing and ongoing communication.
Legal Name of Institution to Appear in Documentation:
GENERAL INFORMATION - DOMESTIC LENDING OFFICE:
Institution Name: _________________________________________________
Street Address: _________________________________________________
_________________________________________________
City, State, Zip Code _________________________________________________
EURODOLLAR LENDING OFFICE (if different from above):
Institution Name: _________________________________________________
Street Address: _________________________________________________
_________________________________________________
City, State, Zip Code _________________________________________________
CREDIT CONTACTS:
PRIMARY CONTACT: _________________________________________________
_________________________________________________
Street Address: _________________________________________________
_________________________________________________
City, State, Zip Code _________________________________________________
Phone Number: _________________________________________________
Fax Number: _________________________________________________
BID LOAN CONTACT: _________________________________________________
_________________________________________________
25
Street Address: _________________________________________________
_________________________________________________
City, State, Zip Code _________________________________________________
Phone Number: _________________________________________________
Fax Number: _________________________________________________
ADMINISTRATIVE CONTACTS - BORROWINGS, PAYMENTS, INTEREST, RATES, ETC.
Primary Contact: _________________________________________________
_________________________________________________
Street Address: _________________________________________________
_________________________________________________
City, State, Zip Code _________________________________________________
Phone Number: _________________________________________________
Fax Number: _________________________________________________
ADMINISTRATIVE CONTACT FOR COMPETITIVE BID BORROWINGS:
Primary Contact: _________________________________________________
_________________________________________________
Street Address: _________________________________________________
_________________________________________________
City, State, Zip Code _________________________________________________
Phone Number: _________________________________________________
Fax Number: _________________________________________________
PAYMENT INSTRUCTIONS:
Name of Bank: _________________________________________________
ABA/Routing No. _________________________________________________
Account Name: _________________________________________________
Account Number: _________________________________________________
Additional Info: _________________________________________________
MAILINGS:
Provide complete mailing address for CREDIT AGREEMENT:
_________________________________________________
_________________________________________________
_________________________________________________
Provide complete mailing address for NOTE DELIVERY (safekeeping or other):
_________________________________________________
_________________________________________________
26
_________________________________________________
_________________________________________________
Provide complete mailing address for FINANCIAL INFORMATION DELIVERY:
_________________________________________________
_________________________________________________
_________________________________________________
_________________________________________________
TAX WITHHOLDING: ______ Yes, Form W-8ECI attached
Non-Resident Alien ___________, Form W-8BEN attached
Tax ID Number
PNC CLOSING CONTACT AND MAILING ADDRESS:
PNC Multi-Bank Loan Administration
One PNC Plaza
000 Xxxxx Xxxxxx
Mail Stop P1-XXXX-22-1
Xxxxxxxxxx, XX 00000-0000
Xxxxx Xxxxxxx
Phone: 000.000.0000
Fax: 000.000.0000
PNC BANK WIRING INSTRUCTIONS:
Bank: PNC BANK, Pittsburgh
ABA: 000000000
Credit: Commercial Loan Operations
Account: 00000000
Ref: Xxxxxxx X. Xxxxx Residential Realty L.P.
Completed by:
_________________________
Signature
27
EXHIBIT I
NOTICE OF BORROWING
PNC BANK, NATIONAL ASSOCIATION, AS ADMINISTRATIVE AGENT
Telephone No: (000) 000-0000
Telecopier No. (000) 000-0000
Attention: Multi-Bank Loan Administration - Xxxxx Xxxxxxx
1. This request is for (choose one).
______ Loan
______ Conversion of outstanding Euro-Rate Loans to Base Rate
______ Conversion of outstanding Base-Rate Loans to Euro-Rate
______ Renewal of Euro-Rate election with respect to outstanding
Euro-Rate Loans
2. Aggregate Principal Amount of Loans Comprising the new Borrowing
Tranche U.S.$______________
3. Proposed Borrowing, Conversion or Renewal Date: _________________
4. Interest Rate Option Applicable to the New Borrowing Tranche (Choose
One):
______a. Base Rate Option
______b. Euro-Rate Option for an Interest Period of (choose one):
______i. 1 month
______ii. 2 months
______iii 3 months
______iv 6 months
______v. 12 months
Date:______________
28
XXXXXXX X. XXXXX RESIDENTIAL REALTY L.P.,
a Delaware limited partnership
By: Xxxxxxx X. Xxxxx Residential Realty,
Inc.,
a Maryland corporation, its general
partner
By:____________________________________
Name:__________________________________
Title:_________________________________
29
EXHIBIT J
REQUEST FOR EXTENSION
To: PNC Multi-Bank Loan Administration Borrower: Xxxxxxx X. Xxxxx Residential
One PNC Plaza Realty L.P.
000 Xxxxx Xxxxxx
Xxxx Xxxx X0-XXXX-00-0
Xxxxxxxxxx, XX 00000-0000 Loan No.______________________
Xxxxx Xxxxxxx
Phone: 000.000.0000
Fax: 000.000.0000
The undersigned hereby elects to extend the maturity date of the above
referenced loan ("Loan") to February 4, 2005, pursuant to the provisions in the
Credit Agreement ($50,000,000 Revolving Line of Credit) ("Agreement") dated as
of February 5, 2001 between Xxxxxxx X. Xxxxx Residential Realty L.P., a Delaware
limited partnership, as Borrower and PNC Bank, National Association, as
Administrative Agent and as a Bank, FIRST UNION NATIONAL BANK, as Syndication
Agent and as a Bank, and U.S. BANK NATIONAL ASSOCIATION, as Documentation Agent
and as a Bank and the other Banks listed on the signature pages of the Agreement
(all capitalized terms used herein and not otherwise defined shall have the
meaning assigned to such term in the Agreement).
The Loans are evidenced by the Notes and the other Loan Documents defined
in the Agreement (collectively, the "Loan Documents"). The Borrower warrants and
represents that all Loan Documents remain in full force and effect, and no
Default or Event of Default has occurred. An updated Compliance Certificate
dated as of the date hereof, is enclosed herewith.
The undersigned agrees to execute whatever additional documents may be
required in order to implement or to clarify the terms of this extension or to
preserve and maintain the security granted in connection with the Loans.
The Extension Fee in accordance with Section 2.9 of the Agreement is
enclosed herewith.
Date:__________
30
ATTEST/WITNESS: XXXXXXX X. XXXXX RESIDENTIAL REALTY L.P.,
a Delaware limited partnership
By: Xxxxxxx X. Xxxxx Residential Realty, Inc.,
a Maryland corporation, its general partner
By:_________________________ By:__________________________________
Name:________________________________
Title:_______________________________
31
EXHIBIT K
FORM OF CERTIFICATE REGARDING
QUALIFYING UNENCUMBERED PROPERTIES
PNC BANK, National Association
for itself and as Administrative Agent
One PNC Plaza, 249 Fifth Avenue
Mail Stop P1-XXXX-22-1
Xxxxxxxxxx, XX 00000-0000
Attention: Xxxxx Xxxxxxx
Ladies and Gentlemen:
Reference is made to the Credit Agreement ($50,000,000 Revolving Line of
Credit) dated February 5, 2001 (the "Credit Agreement") by and among PNC Bank,
National Association, for itself and as Administrative Agent, First Union
National Bank, for itself and as Syndication Agent, U.S. Bank National
Association, for itself and as Documentation Agent, and the other Banks from
time to time party thereto. Terms defined in the Credit Agreement and not
otherwise defined herein are used herein as defined in the Credit Agreement.
Pursuant to the Credit Agreement, the Borrower hereby certifies that the
Property described on Exhibit A hereto constitutes a Qualifying Unencumbered
Property. In connection with such certification, the Borrower hereby certifies
to the Administrative Agent and the Banks as follows:
1. The Property is an operating, multifamily and primarily residential
property wholly-owned in fee simple [or is held pursuant to a Qualifying Ground
Lease], by [_______________, which is a Wholly-Owned Consolidated Subsidiary of]
the Borrower. [Attached hereto is a copy of a ground lease, which is hereby
certified to be a Qualifying Ground Lease.]
2. The Property is not subject (nor are any equity interests in such
Property subject) to a Lien which secures Indebtedness of any Person other than
Permitted Liens, or to any agreement which, with the passage of time or the
occurrence of any condition, would result in a Lien which secures Indebtedness
of any Person other than Permitted Liens[.] [provided that, in the event that
such Property is subject to a Lien described in subparagraph h of the definition
of Permitted Liens, the amount secured by such Lien is set forth on Exhibit A
hereto and the ratio of the amount secured by all such Liens is calculated on
Exhibit C hereto.]
3. The Property is not subject (nor are any equity interests in such
Property subject) to any covenant, condition or other restriction which
prohibits or limits the sale of, or the creation
32
or assumption of any Lien upon, such Property, provided that a general
limitation on the amount of Secured Debt which may be incurred or certain ratios
relating to Secured Debt shall not be construed to constitute a covenant,
condition or other restriction which prohibits or limits the creation or
assumption of any Lien on such Property and also provided that, in the event
that such Property is a Restricted Asset, the amount of the Restricted Asset
Penalty applicable thereto is calculated on Exhibit A hereto and the ratio of
the aggregate Restricted Asset Penalties to the aggregate Unencumbered Asset
Value is calculated in Exhibit C hereto.
4. The Property is an institutional-class Property.
5. The Property has been substantially completed, is free from all
structural and title defects, and is not subject to any material renovation
project [or in the event that, notwithstanding the foregoing, such Property
constitutes a Property under Development, such Property satisfies all of the
other requirements applicable to Qualifying Unencumbered Properties and will not
result in the Unencumbered Asset Value of all Qualifying Unencumbered Properties
which constitute Properties under Development exceeding fifteen percent (15%) of
Unencumbered Asset Value or the Unencumbered Asset Value of all Qualifying
Unencumbered Properties which constitute Properties under Development or Lease-
Up Properties exceeding twenty percent (20%) of the Unencumbered Asset Value.].
6. The Property is free from any Materials of Environmental Concern which
would result in a violation of any of the representations and warranties set
forth in Section 4.7 of the Credit Agreement. Attached hereto as Exhibit B is an
environmental report from __________ dated __________ verifying such
certification.
7. The Property is occupied by tenants under bona fide leases occupying
at least eighty-five percent (85%) of the residential units [or in the event
that such Property is not so occupied, the Unencumbered Asset Value of such
Property, when combined with the Unencumbered Asset Value of the other
Qualifying Unencumbered Properties which are not so occupied, does not exceed
twenty percent (20%) of the aggregate pro forma Unencumbered Asset Value of all
Qualifying Unencumbered Properties as calculated on Exhibit C hereto.].
8. The Property does not represent more than twenty-five percent (25%) of
the pro forma Unencumbered Asset Value.
9. The Property is located in an Approved CMSA.
[10. Attached hereto is an updated Compliance Certificate as required
pursuant to Section 5.14(a)(ii).]
[11. If substantially completed within last four (4) Fiscal Quarters, the
cost of construction of the Property was $_______.]
33
IN WITNESS WHEREOF, the undersigned has duly executed this certificate as
of the ___ day of ______, 200_.
XXXXXXX X. XXXXX RESIDENTIAL REALTY
L.P., a Delaware limited partnership
By: Xxxxxxx X. Xxxxx Residential Realty, Inc., a
Maryland corporation, its sole general partner
By:___________________________________
Name:_________________________________
Title:________________________________
cc: Xx. Xxxxxxx X. Xxxxx, III
34
EXHIBIT A
Description of Property
-----------------------
EXHIBIT A TO EXHIBIT K
Property Name: ___________________
-------------
Address: ___________________
-------
___________________
Number of Units: ___________________
---------------
Unencumbered Asset Value:
------------------------
1. Aggregate Purchase Price $__________________
or
2. EBITDA for immediately
preceding four (4)
Fiscal Quarters $__________________
Less Capital Reserve ___________________
Adjusted EBITDA ___________________
Capitalization Rate ___________________
Property Value $__________________
Restricted Asset Penalty
------------------------
1. Maximum total
taxable gain $__________________
2. Tax rate x40%
-------------------
3. Total penalty $__________________
Amount secured by Lien
----------------------
described in subparagraph h
---------------------------
of the definition of Permitted
------------------------------
Liens: $__________________
-----
35
EXHIBIT B
Environmental Report
EXHIBIT B TO EXHIBIT K
[if requested]
36
EXHIBIT C
EXHIBIT C TO EXHIBIT K
(a) Unencumbered Asset Value of Properties under 85% Occupancy
----------------------------------------------------------
(i) Unencumbered Asset Value of proposed Qualifying
Unencumbered Property $_________________
(ii) Unencumbered Asset Value of other Qualifying
Unencumbered Properties under 85% Occupancy based on
most recent Compliance Certificate plus (i) $_________________
(iii) Unencumbered Asset Value as calculated in most recent
Compliance Certificate plus (i) $_________________
Ratio of (ii) to (iii) __________________%
(b) Percentage of Unencumbered Asset Value
--------------------------------------
(i) Unencumbered Asset Value of proposed Qualifying
Unencumbered Property $_________________
(ii) Unencumbered Asset Value as calculated in most recent
Compliance Certificate plus (i) $_________________
Ratio of (i) to (ii) __________________%
(c) Aggregate Restricted Asset Penalties
------------------------------------
(i) Restricted Asset Penalties as calculated in most recent
Compliance Certificate $_________________
(ii) Restricted Asset Penalty as calculated on Exhibit A $_________________
(iii) (i) plus (ii) $_________________
(iv) Unencumbered Asset Value of proposed Qualifying $_________________
Unencumbered Property
(v) Unencumbered Asset Value as calculated in the most
recent Compliance Certificate plus (iv) $_________________
Ratio of (iii) to (v) __________________%
37
(d) Permitted Liens:
---------------
(i) Amount secured by Liens described in subparagraph $___________________
h of definition of Permitted Liens as calculated in most
recent Compliance Certificate
(ii) Amount secured by any such Lien as calculated on $___________________
Exhibit A
(iii) (i) plus (ii) $___________________
(iv) Unencumbered Asset Value of proposed Qualifying $___________________
Unencumbered Property
(v) Unencumbered Asset Value as calculated in the most $___________________
recent Compliance Certificate plus (iv)
Ratio of (iii) to (v) ___________________%
(e) Properties under Development
----------------------------
(i) Unencumbered Asset Value of proposed
Qualifying Unencumbered Property $___________________
(ii) Unencumbered Asset Value of other Qualifying
Unencumbered Properties which constitute
Properties under Development $___________________
(iii) Unencumbered Asset Value as calculated in
most recent Compliance Certificate plus (i) $___________________
Ratio of (ii) to (iii) ___________________%
(f) Lease-Up Properties and Properties under Development
----------------------------------------------------
(i) Unencumbered Asset Value of proposed
Qualifying Unencumbered Property $___________________
(ii) Unencumbered Asset Value of other Qualifying
Unencumbered Properties which constitute
Properties under Development and Lease-Up Properties $___________________
(iii) Unencumbered Asset Value as calculated in most
recent Compliance Certificate plus (i) $___________________
38
Ratio of (ii) to (iii) ___________________%
39
EXHIBIT L
FORM OF COMPLIANCE CERTIFICATE
PNC Bank, National Association
for itself and as Administrative Agent
One PNC Plaza, 249 Fifth Avenue
Mail Stop P1-XXXX-22-1
Xxxxxxxxxx, XX 00000-0000
Attention: Xxxxx Xxxxxxx
Ladies and Gentlemen:
Reference is made to the Credit Agreement ($50,000,000 Revolving Line
of Credit) dated as of February 5, 2001 among Xxxxxxx X. Xxxxx Residential
Realty L.P., a Delaware limited partnership (the "Borrower"), PNC Bank, National
Association, as Administrative Agent and as a Bank, First Union National Bank,
as Syndication Agent and as a Bank and U.S. Bank National Association, as
Documentation Agent and as a Bank (the "Credit Agreement") and the other Banks
who are from time to time parties to the Credit Agreement and any Bank acting as
agent for all of the Banks. Terms defined in the Credit Agreement and not
otherwise defined herein are used herein as defined in the Credit Agreement.
Pursuant to the Credit Agreement, the Borrower is furnishing to you
herewith (or has most recently furnished to you) the financial statements of the
Borrower for the fiscal period ended__________________ (the "Balance Sheet
Date"). Such financial statements have been prepared in accordance with GAAP and
present fairly the financial position of the Borrower as of the date thereof and
the results of their operations for the periods covered thereby, subject in the
case of interim statements only to normal recurring year-end adjustments.
This certificate is submitted in compliance with requirements of
Schedule 5.1(c) [and][,] Section[s] 5.8] [and 5.14] [and 5.17] of the Credit
Agreement. The undersigned officer of the Borrower is its chief financial or
chief accounting officer.
The undersigned officer has caused the provisions of the Credit
Agreement and other Loan Documents to be reviewed and as of ____________, on the
basis of such review, no Default or Event of Default has occurred and is
continuing thereunder. (Note: If any Default or Event of Default has occurred
and is continuing, the form of certificate should be revised to specify the
Default or Event of Default, the nature thereof and the actions taken, being
taken or proposed to be taken by the Borrower with respect thereto in order to
cure such Default or Event of Default.)
The Borrower is providing the information set forth on Schedule I
attached hereto to demonstrate compliance as of the date hereof with the
covenants set forth in Section 5.8 of the
40
Credit Agreement and the other limitations affecting the Qualifying Unencumbered
Properties.
IN WITNESS WHEREOF, I have hereunto set my hand this __ day of
________, 200_.
XXXXXXX X. XXXXX RESIDENTIAL
REALTY L.P., a Delaware limited
partnership
By: Xxxxxxx X. Xxxxx Residential Realty,
Inc., a Maryland corporation, its sole
general partner
By: ______________________________
Name: ____________________________
Title: ___________________________
cc: Xx. Xxxxxxx X. Xxxxx, III
41
SCHEDULE I TO COMPLIANCE CERTIFICATE
------------------------------------
(a) EBITDA TO FIXED CHARGES RATIO
Section 5.8(a) states that the ratio of EBITDA to Fixed Changes shall
not be less than 1.75:1. Covenant requirement is [not] met.
CALCULATION OF EBITDA TO FIXED CHARGES RATIO
--------------------------------------------
EBITDA, based upon the four (4)
Fiscal Quarters ended___/___/___ $__________
______
Fixed Charges, based upon the four (4)
Fiscal Quarters ended___/___/___ $__________
______
EBITDA to Fixed Charges Ratio, based upon
the four (4) Fiscal Quarters ended___/___/__ ______to_____
(b) MINIMUM EQUITY VALUE
Section 5.8(b) states that Equity Value shall not be less than the
Minimum Equity Value, provided that any increase in the Minimum Equity Value
resulting from the receipt of Net Offering Proceeds during any fiscal year shall
only become effective as of the last day of the applicable fiscal year. As of
the last day of the most recent fiscal year of Borrower beginning on December
31, 2001, Net Offering Proceeds received by the Borrower or CESRRI after the
Effective Date total $______, and seventy-five percent (75%) of such amount is
equal to $_____. Covenant requirement is [not] met.
CALCULATION OF MINIMUM EQUITY VALUE
-----------------------------------
Market Value as of ___/___/___ $______________
Borrower Debt as of ___/___/___ $_______________
Minimum Equity Value as of ___/____/___ $_______________
(c) LEVERAGE RATIO
42
Section 5.8(c) states that the Leverage Ratio shall not exceed
fifty-seven and one-half percent (57.5%). Covenant requirement is [not] met.
CALCULATION OF LEVERAGE RATIO
-----------------------------
Borrower Debt as of ___/___/___ $__________
_____
Market Value as of ___/___/___ $__________
_____
Leverage Ratio as of ___/___/___ __________
_____%
(d) EBITDA TO INTEREST EXPENSE RATIO
Section 5.8(d) states that the ratio of EBITDA to Interest Expense
shall not be less than 2.0:1. Covenant requirement is [not] met.
CALCULATION OF EBITDA
---------------------
TO INTEREST EXPENSE RATIO
-------------------------
EBITDA, based upon the four (4)
Fiscal Quarters ended___/___/___ $__________
_____
Interest Expense, based upon the four (4) $__________
Fiscal Quarters ended___/___/___ _____
EBITDA to Interest Expense Ratio, based upon
the four (4) Fiscal Quarters ended___/___/___ _____to___
(e) UNENCUMBERED NOI TO UNSECURED DEBT SERVICE RATIO
Section 5.8(e) states that the ratio of Unencumbered NOI to Unsecured
Debt Service shall not be less than 2.0:1. Covenant requirement is [not] met.
43
CALCULATION OF UNENCUMBERED NOI
-------------------------------
TO UNSECURED DEBT SERVICE RATIO
-------------------------------
Unencumbered NOI (as calculated $___________
______
on an annualized basis based upon the
Qualifying Unencumbered Properties as of the end of
the applicable Fiscal Quarter, or other date
of determination)(any Property which is owned
for less than four (4) Fiscal Quarters shall be
annualized based upon the period of ownership)
Unsecured Debt Service (based $___________
______
on the amount of Unsecured Debt outstanding
as of the end of the applicable Fiscal Quarter, or other date of
determination)
Unencumbered NOI to Unsecured Debt Service Ratio
as of ___/___/___ ______to____
(f) DISTRIBUTIONS
Section 5.8(f)(i) limits the aggregate distributions to holders of all
common and preferred OP Units of Borrower to the greater of (i) ninety-percent
(90%) of Funds from Operations, in each case for the four (4) consecutive Fiscal
Quarters ending on the last day of each Fiscal Quarter, or (ii) the minimum
amount that must be distributed to all partners of Borrower so that CESSRI will
receive sufficient distributions to enable it to distribute to its shareholders
the amount required to remain qualified as a real estate investment trust as
defined in Section 856 of the Internal Revenue Code (or any successor provision
thereto). Covenant requirement is [not] met.
CALCULATION OF DISTRIBUTIONS
Ninety percent (90%) of Funds from Operations for the $___________
______
four (4) Fiscal Quarters ended ____/___/____
The minimum amount that CESRRI must distribute to its
44
shareholders to remain qualified as a real estate investment
trust for the four (4) Fiscal Quarters ended___/___/___ $_________
________
Actual distributions for the four (4) Fiscal Quarters $_____
_____________
ended___/___/___
(g) PERMITTED INVESTMENTS
Section 5.8(g) limits (i) the aggregate amount of all Permitted
Investments to, without duplication, fifteen percent (15%) of Market Value and
(ii) the aggregate amount of each of the following categories, to ten percent
(10%) of Market Value, unless approved by Required Banks. Covenant requirement
is [not] met.
CALCULATION OF PERMITTED
------------------------
INVESTMENTS TO MARKET VALUE
---------------------------
Permitted Investments Maximum Amount Invested
--------------------- -----------------------
Percent of
as of ___/___/___ Market Value
------------
Land:
$________________________ _______
___ %
Non-Apartment Properties
(excluding the Skyline Retail
Property): $________________________ _______
___%
Securities (excluding the Securities $___________________________
____%
of Xxxxx Realty Company,
Consolidated Engineering, Xxxxx
Management Construction Inc.)
Investment Mortgages: $________________________ _______
____ %
Total Permitted Investments $__________________
45
Market Value as of ___/___/___ $______________________
Ratio of Permitted Investments to Market Value
as of ___/___/___ ______________%
(h) PROPERTIES UNDER DEVELOPMENT
(i) Section 5.8(h)(i) limits the aggregate Budgeted Project Costs of
Properties under Development at any time to twenty-five percent (25%) of Market
Value. Covenant requirement is [not] met.
(ii) Section 5.8(h)(ii) limits the Property Purchase Contract
Obligations at any time to twenty percent (20%) of Market Value. Covenant
requirement is [not] met.
(iii) Section 5.8(h)(iii) limits the sum of the Budgeted Project Costs
of Properties under Development plus the Property Purchase Contract Obligations
at any time to thirty-five percent (35%) of Market Value. Covenant requirement
is [not] met.
(iv) The definition of Qualifying Unencumbered Properties limits the
Unencumbered Asset Value of Qualifying Unencumbered Properties which are
Properties under Development to fifteen percent (15%) of Unencumbered Asset
Value. Limitation is [not] met.
(v) The definition of Qualifying Unencumbered Properties limits the
Unencumbered Asset Value of Qualifying Unencumbered Properties which are
Properties under Development and Lease-Up Properties to twenty percent (20%) of
Unencumbered Asset Value. Limitation is [not] met.
46
CALCULATION OF BUDGETED PROJECT COSTS OF PROPERTIES
---------------------------------------------------
UNDER DEVELOPMENT TO MARKET VALUE RATIO
---------------------------------------
Calculation of aggregate Budgeted Project Costs
of Properties under Development as of ___/___/___ $______
Market Value as of ___/___/___ $_______
_________
Ratio of Budgeted Project Costs of Properties
under Development to Market Value as of ___/___/___ ________
47
%
CALCULATION OF PROPERTY PURCHASE
--------------------------------
CONTRACT OBLIGATIONS TO MARKET VALUE RATIO
------------------------------------------
Property Purchase Contract
Obligations as of ___/__/___ $______________
_____
Market Value as of ___/___/___ $______________
_____
Ratio of Property Purchase Contract Obligations
to Market Value as of __/__/___ $______________
_____%
CALCULATION OF RATIO OF SUM OF
------------------------------
BUDGETED PROJECT COSTS OF PROPERTIES UNDER
-------------------------------------------
DEVELOPMENT AND PRO PERTY PURCHASE
----------------------------------
CONTRACT OBLIGATIONS TO MARKET VALUE
------------------------------------
Sum of Budgeted Project Costs of Properties under
$__________
____
Development and Property Purchase Contract Obligations
as of ___/___/____
Market Value as of ___/___/___
$__________
____
Ratio of sum of Budgeted Project Costs of Properties
under Development and Property Purchase Contract
Obligations to Market Value as of ___/___/___
___________
____%
48
CALCULATION OF RATIO OF UNENCUMBERED ASSET
------------------------------------------
ASSET VALUE OF PROPERTIES UNDER DEVELOPMENT
-------------------------------------------
WHICH ARE QUALIFYING UNENCUMBERED PROPERTIES
--------------------------------------------
TO UNENCUMBERED ASSET VALUE
---------------------------
(i) Sum of Unencumbered Asset Value of Properties
under Development which are Qualifying
Unencumbered Properties as of __/__/__ $ ______
(ii) Unencumbered Asset Value as of __/__/__ $_______
_______
Ratio of (i) to (ii) ________________________
%
CALCULATION OF RATIO OF UNENCUMBERED ASSET
------------------------------------------
VALUE OF PROPERTIES UNDER DEVELOPMENT AND LEASE-UP
--------------------------------------------------
PROPERTIES WHICH ARE QUALIFYING UNENCUMBERED
--------------------------------------------
PROPERTIES TO UNENCUMBERED ASSET VALUE
--------------------------------------
(i) Sum of Unencumbered Asset Value of Properties
under Development and Lease-Up Properties which are
Qualifying Unencumbered Properties as of __/__/__ $_________
_______
(ii) Unencumbered Asset Value as of __/__/__ $_________
_______
Ratio of (i) to (ii) __________________%
(i) MAXIMUM LEVERAGE ON UNENCUMBERED ASSETS
Section 5.8(i) limits Unsecured Debt to fifty-five percent (55%) of
Unencumbered Asset Value. Covenant requirement is [not] met.
CALCULATION OF MAXIMUM LEVERAGE
-------------------------------
ON UNENCUMBERED ASSETS
----------------------
Unsecured Debt as of___/___/___ $_________
Unencumbered Asset Value as of ___/___/___ $_________
49
Ratio of Unsecured Debt to Unencumbered Asset Value
as of ___/___/___ ______________%
(j) SECURED DEBT
(i) Section 5.8(j)(i) provides that Secured Debt shall be Non-
Recourse Indebtedness, except for Permitted Recourse Debt and that the ratio of
Secured Debt to Market Value shall not exceed the amounts determined as set
forth below.
Ratio of Unencumbered Ratio of Unsecured Maximum Permitted
NOI to Unsecured Debt to Unencumbered Ratio of Secured Debt
Debt Service Asset Value to Market Value
Level I ****4.0:1 *25% *55%
Level II **3.0:1***4.0:1 ****25%to*33.34% *50%
Level III **2.0:1***3.0:1 ****33.34%to*55% *45%
* less than
** more than
*** less than or equal to
**** more than or equal to
The ratio of Unencumbered NOI to Unsecured Debt Service shall be based upon the
calculation thereof set forth in subparagraph (e) above. The ratio of Unsecured
Debt to Unencumbered Asset Value shall be based upon the calculation thereof set
forth in subparagraph (i) above. In the event that the ratio of Unencumbered NOI
to Unsecured Debt Service shall be on a level different from the ratio of
Unsecured Debt to Unencumbered Asset Value on the above chart, the lower level
of the two ratios shall be used to determine the maximum permitted ratio of
Secured Debt to Market Value. By way of example, if the ratio of Unencumbered
NOI to Unsecured Debt Service shall be on Level I and the ratio of Unsecured
Debt to Unencumbered Asset Value shall be on Level II, the maximum permitted
ratio of Secured Debt to Market Value shall be based upon Level II or 50%.
Covenant requirement is [not] met.
(ii) Section 5.8(j)(ii) limits the ratio of Permitted Recourse Debt to
Market Value at all times to fifteen percent (15%). Covenant requirement is
[not] met.
CALCULATION OF PERMITTED SECURED
DEBT TO MARKET VALUE RATIO
Ratio of Unencumbered NOI to Unsecured Debt Service
as of __/__/__ ______to______
50
Ratio of Unsecured Debt to Unencumbered Asset Value
as of __/__/__ ______
______%
Permitted Ratio of Secured Debt to Market Value ______
______%
CALCULATION OF SECURED DEBT
---------------------------
TO MARKET VALUE RATIO
---------------------
Secured Debt as of___/___/___ $_______________
Market Value as of ___/___/___ $_______________
________
Ratio of Secured Debt to Market Value as of ___/___/___ __________
________%
CALCULATION OF PERMITTED RECOURSE
---------------------------------
DEBT TO MARKET VALUE
--------------------
Permitted Recourse Debt as of ___/__/___ $_____________
________
Market Value as of ___/__/___ $_________________________
Ratio of Permitted Recourse Debt to Market Value ________
____________________%
(k) [INTENTIONALLY OMITTED].
(l) HEDGING REQUIREMENTS
Section 5.12 requires the Borrower to have in effect Interest Rate
Xxxxxx on Borrower Debt so that Borrower's Floating Rate Indebtedness shall not
exceed twenty percent (20%) of Market Value. Covenant requirement is [not] met.
51
CALCULATION OF FLOATING
-----------------------
RATE INDEBTEDNESS RATIO
-----------------------
Floating Rate Indebtedness as of ___/___/___ $__________
Market Value as of ___/___/___ $__________
Ratio of Floating Rate Indebtedness to Market Value _________
%
(m) PROPERTIES UNDER 85% OCCUPANCY
The definition of Qualifying Unencumbered Properties limits the
Unencumbered Asset Value of Qualifying Unencumbered Properties which are not
occupied by tenants under bona fide leases occupying at least eighty-five (85%)
of the residential units therein to twenty percent (20%) of Unencumbered Asset
Value. Limitation is [not] met.
CALCULATION OF RATIO OF UNENCUMBERED ASSET VALUE
------------------------------------------------
OF PROPERTIES WHICH ARE LESS THAN 85% OCCUPIED TO
-------------------------------------------------
UNENCUMBERED ASSET VALUE
------------------------
(i) Unencumbered Asset Value of Qualifying Unencumbered
Properties under 85% occupancy as of ___/___/___ $_______
(ii) Unencumbered Asset Value as of ___/___/___ $_______
Ratio of (i) to (ii) _______
%
(n) RESTRICTED ASSET PENALTIES
The definition of Qualifying Unencumbered Properties limits the Restricted
Asset Penalties to seven and one-half percent (7.5%) of Unencumbered Asset
Value. Limitation is [not] met. [Note: The calculation of the Restricted Asset
Penalty for each Qualifying Unencumbered Property that is a Restricted Asset
must be updated annually prior to March 31 in the form of the calculation
thereof attached as Exhibit A to Exhibit K].
CALCULATION OF RESTRICTED ASSET PENALTIES
-----------------------------------------
(i) Restricted Asset Penalties for all Qualifying
52
Unencumbered Properties as of ___/___/__ $______________
(ii) Unencumbered Asset Value as of ___/___/___ $______________
Ratio of (i) to (ii) ____________%
(o) PERMITTED LIENS
Subparagraph h of the definition of Permitted Liens limits the amounts
secured by Liens described in such subparagraph to twenty percent (20%) of
Unencumbered Asset Value. Limitation is [not] met.
CALCULATION OF PERMITTED LIENS
------------------------------
(i) Amounts secured by Liens described in subparagraph $__________
h of the definition of Permitted Liens
(ii) Unencumbered Asset Value as of ___/___/___ $__________
Ratio of (i) to (ii) __________%
53
EXHIBIT M
[Intentionally Deleted]
54
EXHIBIT N
Qualifying Ground Leases
1. Concord Village*
2. Crystal House I*
3. Crystal House II*
4. Crystal Plaza*
5. Crystal Square*
6. Newport Village*
7. XxXxxxx Court*
* These Properties have not been certified as Qualifying Unencumbered
Properties at the time of execution of the Agreement
55
EXHIBIT O
CLOSING REQUIREMENTS
PNC BANK, NATIONAL ASSOCIATION AS
ADMINISTRATIVE AGENT (the "Agent")
FOR ITSELF AND CERTAIN BANKS (the "Banks")
XXXXXXX X. XXXXX RESIDENTIAL
REALTY L.P. (the "Borrower")
$50,000,000 UNSECURED REVOLVING LINE OF CREDIT
CLOSING REQUIREMENTS
1. Credit Agreement ($50,000,000 Revolving Line of Credit)
2. Notes
(a) Revolving Credit Notes
(i) PNC Bank,, National Association
(ii) U.S. Bank National Association
(iii) Fleet National Bank
(iv) Commerzbank Aktiengesellschaft, New York
Branch
(v) Suntrust Bank
(vi) First Union National Bank
(vii) Chevy Chase Bank, FSB
(b) Bid Rate Notes
(i) PNC Bank, National Association
(ii) U.S. Bank National Association
(iii) Fleet National Bank
(iv) Commerzbank Aktiengesellschaft, New York
Branch
(v) Suntrust Bank
(vi) First Union National Bank
(vii) Chevy Chase Bank, FSB
3. Legal Opinion- Xxxxx & Xxxxxxx
4. Limited Partnership Agreement of Borrower
5. Certificate of Limited Partnership for the Borrower
6. Good Standing Certificate for the Borrower
7. Qualifications to do business for the Borrower
8. Articles of Incorporation of Xxxxxxx X. Xxxxx Residential Realty, Inc.
(the "REIT")
56
9. Good Standing Certificate for the REIT
10. Corporate Resolutions of the REIT
11. Certificate of Incumbency and By-Laws for REIT
12. Certificate Regarding Qualifying Unencumbered Properties
13. Payment of Loan Fees
14. Counsel's Memorandum
57
EXHIBIT P
Approved Consolidated Metropolitan Statistical Areas
1. New York - Northern New Jersey - Long Island
2. Los Angeles - Riverside - Orange County
3. Chicago - Xxxx - Kenosha
4. Washington-Baltimore
5. San Francisco - Oakland - San Xxxx
6. Philadelphia - Wilmington - Atlantic City
7. Boston - Worcester - Lawrence
8. Detroit - Xxx Arbor - Flint
9. Dallas - Forth Worth
10. Houston - Galveston - Brazoria
11. Xxxxxxx
00. Xxxxx - Xxxx Xxxxxxxxxx
00. Seattle - Tacoma - Bremerton
14. Phoenix - Mesa
15. Cleveland - Akron
16. Minneapolis - St. Xxxx
17. San Diego
18. St. Louis
19. Denver - Boulder - Greeley
20. Xxxxxxxxxx
00
SCHEDULE I
COMMITMENTS OF BANKS
PERCENTAGE
OF
BANK COMMITMENT COMMITMENT*
---- ---------- ----------
PNC BANK, NATIONAL $9,642,857.14 19.2857%
ASSOCIATION
U.S. BANK NATIONAL $9,464,285.71 18.9286%
ASSOCIATION
FIRST UNION NATIONAL $9,464,285.71 18.9286%
BANK
FLEET NATIONAL BANK $5,357,142.86 10.7143%
COMMERZBANK $5,357,142.86 10.7143%
AKTIENGESELLSCHAFT,
NEW YORK BRANCH
SUNTRUST BANK $5,357,142.86 10.7143%
CHEVY CHASE BANK, FSB $5,357,142.86 10.7143%
* Percentages are rounded as appropriate and do not total 100.0000%
SCHEDULE II
NAMES, ADDRESSES, TELEPHONE AND
TELECOPIER NUMBERS OF PARTIES
BORROWER:
--------
XXXXXXX X. XXXXX RESIDENTIAL REALTY L.P.
0000 Xxxxxxx Xxxxx
Xxxxxxxxx, Xxxxxxxx 00000
Attention: X. X. Xxxxxx, Executive Vice President, Chief Operating Officer
and Chief Financial Officer
Telephone: 000.000.0000
Telecopier: 703.769.1199
With a copy to:
XXXXXXX X. XXXXX RESIDENTIAL REALTY L.P.
0000 Xxxxxxx Xxxxx
Xxxxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxx X. Best, Esquire, Assistant General Counsel
Telephone: 000.000.0000
Telecopier: 703.769.1312
BANKS:
-----
PNC BANK, NATIONAL ASSOCIATION
One PNC Plaza, Mail Stop P1-XXXX-22-1
000 Xxxxx Xxxxxx
Xxxxxxxxxx, XX 00000-0000
Attention: Multi-Bank Loan Administration
Telephone: 000.000.0000
Telecopier: 412.762.8672
With a copy to:
PNC, BANK, NATIONAL ASSOCIATION
0000 Xxx Xxxxxx, X.X.
Xxxxxxxxxx, X.X. 00000
Attention: Xxxxxxx X. Xxxxx, III
Telephone: 000.000.0000
Telecopier: 202.393.2923
U.S. BANK NATIONAL ASSOCIATION
Real Estate Banking Division
MPFP 0509
000 Xxxxxx Xxxxxx Xxxxx
Xxxxxxxxxxx, XX 00000-0000
Attention: Xxxx Xxxx
Telephone: 000.000.0000
Telecopier: 612.973.0830
FLEET NATIONAL BANK
000 Xxxxxxx Xxxxxx
Mail Stop: XX XX 00000X
Xxxxxx, XX 00000
Attention: Xxxxxxxx Xxxxx
Telephone: 000.000.0000
Telecopier: 617.434.0645
FIRST UNION NATIONAL BANK
000 Xxxxx Xxxxxxx, 0/xx/ Xxxxx
Xxxxxxxxx, XX 00000-0000
Attention: Xxx Xxxxxxxx
Telephone: 000.000.0000
Telecopier: 704.383.6205
COMMERZBANK, NEW YORK BRANCH
Real Estate Finance
0 Xxxxx Xxxxxxxxx Xxxxxx
Xxx Xxxx, XX 00000-0000
Attention: Xxxxxx Xxxxx
Telephone: 000.000.0000
Telecopier: 212.266.7565
SUNTRUST BANK
Real Estate Finance Division
0000 Xxxxx Xxxx., Xxxxx 000
Xxxxxx, XX 00000-0000
Attention: Xxxx Xxxxxxxx
Telephone: 000.000.0000
Telecopier: 703.902.9245
CHEVY CHASE BANK
0000 Xxxxxxxxxxx Xxxxxx, 0/xx/ Xxxxx
Xxxxx Xxxxx, XX 00000
Attention: X. Xxxxxx X'Xxxxx, III
Telephone: 000.000.0000
Telecopier: 301.986.7516
Schedule 2.16
-------------
Letters of Credit issued under Existing Credit Agreement
--------------------------------------------------------
NONE
SCHEDULE 4.5
------------
Litigation
----------
See Attached
SCHEDULE 4.6
------------
Borrower and CESRRI ERISA Plans
-------------------------------
See Attached
SCHEDULE 4.7
------------
Environmental Matters
---------------------
See Attached
SCHEDULE 4.17
-------------
Ownership of Properties
-----------------------
See Attached
SCHEDULE 4.27
-------------
Ownership of Borrower and Consolidated Subsidiaries
---------------------------------------------------
See Attached
Schedule 5.1
------------
Financial Reporting Requirements
--------------------------------
(a) as soon as available and in any event within five (5) Domestic
Business Days after the same is required to be filed with the Securities and
Exchange Commission (but in no event later than ninety-five (95) days after the
end of each fiscal year of the Borrower) a consolidated balance sheet of the
Borrower, CESRRI and their Consolidated Subsidiaries as of the end of such
fiscal year and the related consolidated statements of Borrower's and CESRRI's
operations and consolidated statements of Borrower's and CESRRI's cash flow for
such fiscal year, setting forth in each case in comparative form the figures for
the previous fiscal year, all reported on in a manner acceptable to the
Securities and Exchange Commission on Borrower's and CESRRI's Form 10K and
reported on by Xxxxxx Xxxxxxxx LLP or other independent public accountants of
nationally recognized standing;
(b) as soon as available and in any event within five (5) Domestic
Business Days after the same is required to be filed with the Securities and
Exchange Commission (but in no event later than fifty (50) days after the end of
each of the first three quarters of each fiscal year of the Borrower and CESRRI)
, (i) a consolidated balance sheet of the Borrower, CESRRI and their
Consolidated Subsidiaries as of the end of such quarter and the related
consolidated statements of Borrower's and CESRRI's operations and consolidated
statements of Borrower's and CESRRI's cash flow for such quarter and for the
portion of the Borrower's or CESRRI's fiscal year ended at the end of such
quarter, all reported on in the form provided to the Securities and Exchange
Commission on Borrower's and CESRRI's Form 10Q, and (ii) and such other
information reasonably requested by the Administrative Agent or any Bank;
(c) simultaneously with the delivery of each set of financial statements
referred to in clauses (a) and (b) above, and as otherwise required pursuant to
the terms of the Agreement, a certificate of the chief financial officer, the
chief accounting officer or the vice president and treasurer of the Borrower
(each a "Compliance Certificate") in the form of Exhibit L to the Agreement;
(d) (i) within five (5) Domestic Business Days after any officer of the
Borrower obtains knowledge of any Default, if such Default is then continuing, a
certificate of the chief financial officer, the chief accounting officer,
controller, or other executive officer of the Borrower setting forth the details
thereof and
the action which the Borrower is taking or proposes to take with respect
thereto; and (ii) promptly and in any event within five (5) Domestic Business
Days after the Borrower obtains knowledge thereof, notice of (x) any litigation
or governmental proceeding pending or threatened against the Borrower or the
Real Property Assets as to which there is a reasonable possibility of an adverse
determination and which, if adversely determined, is likely to individually or
in the aggregate, result in a Material Adverse Effect, and (y) any other event,
act or condition which is likely to result in a Material Adverse Effect.
(e) promptly upon the mailing thereof to the shareholders of CESRRI
generally, copies of all financial statements, reports and proxy statements so
mailed;
(f) within ten (10) days following the filing thereof, copies of all
registration statements (other than the exhibits thereto and any registration
statements on Form S-8 or its equivalent) and reports on Forms 10-K, 10-Q and 8-
K (or their equivalents) (other than the exhibits thereto, which exhibits will
be provided upon request therefor by any Bank) which CESRRI shall have filed
with the Securities and Exchange Commission;
(g) Promptly and in any event within thirty (30) days, if and when any
member of the ERISA Group (i) gives or is required to give notice to the PBGC of
any "reportable event" (as defined in Section 4043 of ERISA) with respect to any
Plan which might constitute grounds for a termination of such Plan under Title
IV of ERISA, or knows that the plan administrator of any Plan has given or is
required to give notice of any such reportable event, a copy of the notice of
such reportable event given or required to be given to the PBGC; (ii) receives
notice of complete or partial withdrawal liability under Title IV of ERISA or
notice that any Multiemployer Plan is in reorganization, is insolvent or has
been terminated, a copy of such notice; (iii) receives notice from the PBGC
under Title IV of ERISA of an intent to terminate, impose liability (other than
for premiums under Section 4007 of ERISA) in respect of, or appoint a trustee to
administer any Plan, a copy of such notice; (iv) applies for a waiver of the
minimum funding standard under Section 412 of the Code, a copy of such
application; (v) gives notice of intent to terminate any Plan under Section
4041(c) of ERISA, a copy of such notice and other information filed with the
PBGC; (vi) gives notice of withdrawal from any Plan pursuant to Section 4063 of
ERISA, a copy of such notice; or (vii) fails to make any payment or contribution
to any Plan or Multiemployer Plan or in respect of any Benefit Arrangement or
makes any amendment to any Plan or Benefit Arrangement which has resulted or
could result in the imposition of a Lien or the posting of a bond or other
security, and
in the case of clauses (i) through (vii) above, which event could result in a
Material Adverse Effect, a certificate of the chief financial officer or the
chief accounting officer of the Borrower setting forth details as to such
occurrence and action, if any, which the Borrower or applicable member of the
ERISA Group is required or proposes to take;
(h) promptly and in any event within ten (10) days after the Borrower
obtains actual knowledge of any of the following events, a certificate of the
Borrower, executed by an officer of the Borrower, specifying the nature of such
condition, and the Borrower's or, if the Borrower has actual knowledge thereof,
the Environmental Affiliate's proposed initial response thereto: (i) the receipt
by the Borrower, or, if the Borrower has actual knowledge thereof, any of the
Environmental Affiliates of any communication (written or oral), whether from a
governmental authority, citizens group, employee or otherwise, that alleges that
the Borrower, or, if the Borrower has actual knowledge thereof, any of the
Environmental Affiliates, is not in compliance with applicable Environmental
Laws, and such noncompliance is likely to have a Material Adverse Effect, (ii)
the Borrower shall obtain actual knowledge that there exists any Environmental
Claim pending against the Borrower or any Environmental Affiliate and such
Environmental Claim is likely to have a Material Adverse Effect or (iii) the
Borrower obtains actual knowledge of any release, emission, discharge or
disposal of any Material of Environmental Concern that is likely to form the
basis of any Environmental Claim against the Borrower or any Environmental
Affiliate which in any such event is likely to have a Material Adverse Effect;
(i) promptly and in any event within five (5) Domestic Business Days after
receipt of any material notices or correspondence from any company or agent for
any company providing insurance coverage to the Borrower relating to any loss
which is likely to result in a Material Adverse Effect, copies of such notices
and correspondence;
(j) from time to time such additional information regarding the financial
position or business of the Borrower, CESRRI and their Subsidiaries as the
Administrative Agent, at the request of any Bank, may reasonably request in
writing; and
(k) promptly and in any event within five (5) Domestic Business Days after
receipt, notice of any change in any Credit Rating of Borrower or CESRRI.
SCHEDULE 5. 13(c)(1)
--------------------
CESRRI Investments
------------------
See attached
SCHEDULE 5. 13 (c) (2)
----------------------
CESRRI Property Interests
-------------------------
None
G:\Best\SRW\PNC\$50MM CF\Credit Agreement Exhibits $50MM CF.doc
