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$40,000,000
REVOLVING LOAN AGREEMENT
by and among
CAPITAL LEASE FUNDING, INC.,
AND
PREFCO II LIMITED PARTNERSHIP,
as Borrower,
and
WACHOVIA BANK NATIONAL ASSOCIATION,
in its respective capacities
as Initial Lender and as Administrative Agent
Dated as of July 17, 2007
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TABLE OF CONTENTS
Page
ARTICLE I DEFINITIONAL PROVISIONS 1
Section 1.01 Definitions 1
Section 1.02 Other Definitional Provisions 8
Section 1.03 Accounting Terms 8
Section 1.04 Computation of Time Periods 9
ARTICLE II THE LOANS; AMOUNT AND TERMS 9
Section 2.01 Loans 9
Section 2.02 Payments to Collection Account 10
Section 2.03 Prepayments 10
Section 2.04 Default Rate and Payment Dates 10
Section 2.05 Computation of Interest and Fees 11
Section 2.06 Pro Rata Treatment and Payments 11
Section 2.07 Non-Receipt of Funds by the Administrative Agent 12
Section 2.08 Inability to Determine Interest Rate 12
Section 2.09 Illegality 12
Section 2.10 Requirements of Law 13
Section 2.11 Indemnity 13
Section 2.12 Taxes 13
ARTICLE III CONDITIONS PRECEDENT 14
Section 3.01 Conditions 14
Section 3.02 Conditions to All Extensions of Credit 16
ARTICLE IV REPRESENTATIONS AND WARRANTIES 17
Section 4.01 Representations and Warranties 17
ARTICLE V COVENANTS 19
Section 5.01 Intentionally Omitted 19
Section 5.02 Mortgaged Assets 19
Section 5.03 Financial Covenants 19
Section 5.04 Certificates; Other Information 19
Section 5.05 No Negative Pledge 20
Section 5.06 Intentionally omitted 20
Section 5.07 Intentionally Omitted 20
Section 5.08 Compliance with Laws 20
Section 5.09 Taxes 20
Section 5.10 Books and Records 20
Section 5.11 Preservation of Existence 20
Section 5.12 Maintenance of Collateral 20
Section 5.13 Intentionally Omitted 21
Section 5.14 Further Assurances 21
Section 5.15 Ownership 21
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TABLE OF CONTENTS
(continued)
Page
Section 5.16 Appraisals 21
Section 5.17 Indebtedness 21
Section 5.18 Liens 21
Section 5.19 Liquidations, Mergers, Consolidations, Acquisitions 21
Section 5.20 Changes in Organizational Documents; Name 21
Section 5.21 Enforceability of Loan Documents 21
Section 5.22 Reporting Requirements 21
Section 5.23 Future Disclosure 22
Section 5.24 Ground Lease 22
ARTICLE VI EVENTS OF DEFAULT 23
Section 6.01 Events of Default 23
Section 6.02 Acceleration; Remedies 24
Section 6.03 Notice of Default 24
Section 6.04 Non-Reliance on Administrative Agent and Other Lenders 24
Section 6.05 Indemnification 24
Section 6.06 The Administrative Agent in Its Individual Capacity 24
Section 6.07 Successor Administrative Agent 24
Section 6.08 Other Agents 26
ARTICLE VII THE ADMINISTRATIVE AGENT 26
Section 7.01 Appointment 26
Section 7.02 Delegation of Duties 26
Section 7.03 Exculpatory Provisions 26
Section 7.04 Reliance by Administrative Agent 26
ARTICLE VIII RECOURSE 27
Section 8.01 Full Recourse Obligations 27
ARTICLE IX MISCELLANEOUS 27
Section 9.01 Amendments, Waivers and Release of Collateral 27
Section 9.02 Survival of Representations and Warranties 28
Section 9.03 Successors and Assigns; Participations; Purchasing Lenders 28
Section 9.04 Adjustments 30
Section 9.05 Indemnification and Expenses 30
Section 9.06 Notices and Other Communications 30
Section 9.07 Entire Agreement; Severability 31
Section 9.08 GOVERNING LAW 31
Section 9.09 SUBMISSION TO JURISDICTION; VENUE; WAIVER OF JURY TRIAL 31
Section 9.10 Periodic Due Diligence Review 32
Section 9.11 Intentionally Omitted 32
Section 9.12 Legal Matters 32
Section 9.13 Confidentiality 32
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TABLE OF CONTENTS
(continued)
Page
Section 9.14 Right of Set-off 33
Section 9.15 Treatment of Certain Information 33
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SCHEDULES
Schedule 1.01(B) Lenders and Commitments
Schedule 3.01(h) Organizational Chart of the Borrower
EXHIBITS
Exhibit A Form of Revolving Note
Exhibit B Form of Commitment Transfer Supplement
Exhibit C Intentionally Omitted
Exhibit D Form of Mortgage and Security Agreement
Exhibit E Form of Closing Certificate
Exhibit F Form of Deposit Account Control Agreement
Exhibit G Form of Solvency Certificate
Exhibit H Form of Compliance Certificate
Exhibit I Intentionally Omitted
Exhibit J Form of Notice of Borrowing
Exhibit K Form of 2.12 Certificate
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REVOLVING LOAN AGREEMENT
THIS REVOLVING LOAN AGREEMENT, dated as of July 17, 2007 (this
"Agreement"), between CAPITAL LEASE FUNDING, INC., a Maryland corporation
("Caplease"), PREFCO II LIMITED PARTNERSHIP, a Connecticut limited partnership
("Owner" and, together with Caplease, "Borrower") and WACHOVIA BANK NATIONAL
ASSOCIATION, in its capacity as the initial Lender ("Initial Lender") and as
administrative agent for the financial institutions and banks ("Lenders") party
hereto from time to time (in such capacity, the "Administrative Agent" or the
"Agent").
WITNESSETH:
WHEREAS, the Borrower has requested, and the Initial Lender has agreed, to
extend certain credit facilities to the Borrower on the terms and conditions set
forth herein;
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged by the parties hereto, such parties
hereby agree as follows:
ARTICLE I
DEFINITIONAL PROVISIONS
Section 1.01 Definitions.
(a) As used herein, the following terms shall have the following meanings
(all terms defined in this Section 1.01 or in other provisions of this Agreement
in the singular shall have the same meanings when used in the plural and vice
versa).
"Adjustment Event": With respect to the Eligible Asset, the occurrence of
any of the following (each of which shall be deemed to adjust the Fair Market
Value of the Eligible Asset by such amount as may be determined by Agent
exercising reasonable discretion): (a) any theft, loss, physical destruction or
damage, taking, condemnation or similar event; (b) the Fair Market Value of the
Eligible Asset is not supported or validated pursuant to a FIRREA standard
appraisal, as determined by the Agent in its sole discretion exercised in good
faith; (c) any violation or noncompliance, or claim or allegation of violation
of or noncompliance with, any Environmental Laws, including, without limitation,
by any Person or Governmental Authority; (d) any default in or nonperformance of
any material obligations by Borrower as landlord, or by any tenant leasing a
material portion of the Eligible Asset or the termination of any such tenant's
lease; or (e) any default in or nonperformance of material obligations by any
Person arising out of or in connection with any construction, capital
improvement or similar projects or undertakings, including, without limitation,
material cost overruns (solely to the extent included by the Agent and/or the
Initial Lender in evaluating the initial Purchase Price of such Eligible Asset
and extending credit upon the terms and conditions set forth in this Agreement).
Agent and Lenders shall only be entitled to obtain an appraisal of the Eligible
Asset for purposes of clause (b) above following the occurrence of an event
which such Agent or Lenders reasonably believe will have a material adverse
effect on the Fair Market Value of the Eligible Asset.
"Advance Rate": 70%.
"Affiliate": As to any Person, an "Affiliate" of such Person, as such term
is defined in the Bankruptcy Code.
"Agreement": This Agreement, as amended, restated, amended and restated
and supplemented from time to time.
"ALTA": The American Land Title Association.
"Alternate Base Rate": The per annum rate of interest equal to the greater
of (a) the prime rate or (b) the federal funds rate plus one half of one percent
(0.5%). Any change in the Alternate Base Rate resulting from a change in the
prime rate or the federal funds rate shall become effective as of 12:01 a.m. on
the Business Day on which each such change occurs. The Alternate Base Rate is a
reference rate used by the Agent in determining interest rates on certain loans
and is not intended to be the lowest rate of interest charged by the Agent or
any other Lender on any extension of credit to Borrower.
"Alternate Base Rate Loans": Loans the rate of interest applicable to
which is based on the Alternate Base Rate.
"Anti-Money Laundering Laws": The meaning specified in Section 4.01(r).
"Applicable Premium": 125 basis points (1.25%).
"Approved Fund": With respect to any Lender that is a fund that invests in
bank loans, any other fund that invests in bank loans and is managed by the same
investment advisor as such Lender or by an affiliate of such investment advisor.
"Bankruptcy Code": The United States Bankruptcy Code of 1978, as amended
from time to time.
"Borrower": As defined in the Recitals.
"Borrowing Date": In respect of any Loan, the date such Loan is made.
"Business Day": Any day other than a (i) Saturday or Sunday or (ii) day on
which banks in the State of North Carolina, the State of New York, the District
of Columbia, or the state in which any of the Agent or the Borrower is located
is authorized or obligated by law or executive order to be closed.
"Caplease": As defined in the Recitals.
"Cash and Cash Equivalents": (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 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 Eurodollar 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 with an Aa1 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 or 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 Aa1 by Xxxxx'x
and/or guaranteed by a Person with an Aa1 rating by Xxxxx'x and/or a AA- rating
by S&P or better rated credit, (vi) obligations issued by states and 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 or Cash Equivalent" if at any
time any such bank shall cease to be an approved bank), (vii) repurchase
agreements with major banks and primary government security dealers fully
secured by the U.S. government or agency collateral equal to or exceeding the
principal amount on a daily basis and held in safekeeping, and (viii) real
estate loan pool participations, guaranteed by a Person with an AA- rating given
by S&P or Aa1 rating given by Xxxxx'x or better rated credit.
"Change of Control": (a) any Person or two or more Persons acting in
concert shall have acquired "beneficial ownership," directly or indirectly, of,
or shall have acquired by contract or otherwise, or shall have entered into a
contract or arrangement that, upon consummation, will result in its or their
acquisition of, or control over, Voting Interests of the Borrower (or other
securities convertible into such Voting Interests) representing more than 50% of
the combined voting power of all Voting Interests of Borrower, (b) Continuing
Directors shall cease for any reason to constitute a majority of the members of
the board of directors of the Borrower then in office, (c) the sale, lease,
transfer, conveyance or other disposition (other than by way of merger or
consolidation), in one or a series of related transactions, of all or
substantially all of the assets of the Borrower and its Subsidiaries taken as a
whole to any "person" (as such term is used in Sections 13(d) and 14(d) of the
Securities Act of 1934) or (d) the adoption by the equity holders of the
Borrower of a plan or proposal for the liquidation or dissolution of the
Borrower. As used herein, "beneficial ownership" shall have the meaning provided
in Rule 13d-3 of the Securities and Exchange Commission under the Securities Act
of 1934.
"Closing Certificate": A Closing Certificate, substantially in the form
attached hereto as Exhibit E, including all attachments and exhibits thereto,
which shall include a copy of: (a) a recorded copy of all deeds evidencing title
to and ownership of the Eligible Asset in recordable form; (b) any HUD-1 (or
equivalent) settlement statements in respect of such Eligible Asset acquisition;
and (c) such other documentation as the Administrative Agent may reasonably
request.
"Closing Date": The date of this Agreement.
"Code": The Internal Revenue Code of 1986, as amended from time to time.
"Collateral": A collective reference to the collateral which is identified
in, and at any time covered by, the Security Documents or such other collateral
in which a security interest may be granted in favor of the Agent to secure the
Loans.
"Collection Account": The meaning given to such term in Section 2.02.
"Commitment Fee": The meaning given to such term in Section 2.13.
"Commitment Period": The period of time commencing on the date hereof and
ending on the Business Day preceding the Termination Date.
"Commitment Transfer Supplement": A Commitment Transfer Supplement, in
substantially the form of Exhibit B.
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"Compliance Certificate": A Compliance Certificate, in substantially the
form of Exhibit H, demonstrating compliance by the Borrower and its Subsidiaries
as of the date of delivery thereof with the financial covenants contained in
Section 5.03 hereof and such other matters as are set forth therein, in each
case for the periods specified therein.
"Consolidated Tangible Net Worth" At any time, Consolidated Total Assets
less Consolidated Total Liabilities.
"Consolidated Total Assets": At any time, all amounts which would be
included as assets on a consolidated balance sheet of the Borrower other than
(i) amounts owing to Borrower from Affiliates, or from officers, employees,
partners, members, directors, shareholders or other Persons similarly affiliated
with Borrower or its Affiliates, (ii) intangible assets (including, without
limitation, synthetic or derivative products and/or positions) other than
intangible assets arising from the allocation of the purchase price on real
property acquisitions, (iii) prepaid taxes and/or expenses (which shall not
include, for the avoidance of doubt, purchase price, mortgage loan and other
deposits and escrows), and (iv) assets which have not yet been acquired but are
consolidated under FIN 46. For the avoidance of doubt, "Consolidated Total
Assets" shall not be reduced by "accumulated depreciation and amortization" on
real estate investments.
"Consolidated Total Liabilities": At any time, without duplication, all
amounts which would be included as liabilities on a consolidated balance sheet
of the Borrower, plus all Contingent Liabilities less any liabilities under
which the Borrower or any Subsidiary are not obligated but are consolidated
under FIN 46.
"Contingent Liabilities": Without duplication, all items that would
constitute "Contingent Obligations" as such term is defined under GAAP or
pursuant to the reporting requirements of Sections 13 and 15 of the Securities
Exchange Act of 1934, as amended.
"Continuing Director": Means (i) an individual who is a member of the
Borrower's Board of Directors on the date hereof or (ii) any new director whose
appointment was approved by a majority of the persons who were already
Continuing Directors at the time of such appointment, election or approval.
"Costs": Any and all claims, damages, losses, liabilities, costs and
expenses (including, without limitation, attorneys' fees and disbursements).
"Default": Any of the events specified in Section 7.01, whether or not any
requirement for the giving of notice, the lapse of time, or both, or any other
condition, has been satisfied.
"Default Rate": The meaning given to such term in Section 2.04.
"Deposit Account Control Agreement": The Deposit Account Control
Agreement, in substantially the form - attached hereto as Exhibit F.
"Dollars" and "$": Lawful money of the United States of America.
"Due Diligence Review": The performance by the Agent of any or all of the
reviews permitted under Section 9.10 with respect to the Eligible Asset, as
reasonably desired by the Agent from time to time.
"Eligible Asset": The leasehold interest in real estate asset located at
0000 Xxxxxx Xxxxxx, Xxxxxxxx, Xxxxx Xxxxxx (also referred to herein as the "FM
Global Building") pursuant to the terms of the Ground Lease, together with any
other real estate asset that is accepted by the Agent in its sole and absolute
discretion hereunder.
"Eligible Asset Disposition": A (i) bona fide sale, transfer or other
disposition of the Eligible Asset to a Person who is not an Affiliate of
Borrower, or (ii) refinancing or encumbering of the Eligible Asset.
"Eligible Asset File": All documents, records, files, data, information
and correspondence in respect of the subject Eligible Asset as maintained by the
Borrower or its Subsidiaries.
"Environmental Indemnity Agreement": The Environmental Indemnity
Agreement, executed on the date hereof by the Borrower in favor of the Agent.
"Environmental Laws": Any and all foreign, Federal, state, local or
municipal laws, rules, orders, regulations, statutes, ordinances, codes,
decrees, requirements of any Governmental Authority or requirements of law
(including common law) regulating, relating to or imposing liability or
standards of conduct concerning protection of human health or the environment,
as now or may at any time hereafter be in effect.
"Equity Interest": With respect to any Person, any share of capital stock
of (or other ownership or profit interests in) such Person, any warrant, option
or other right for the purchase or other acquisition from such Person of any
share of capital stock of (or other ownership or profit interests in) such
Person, any security convertible into or exchangeable for any share of capital
stock of (or other ownership or profit interests in) such Person or warrant,
right or option for the purchase or other acquisition from such Person of such
shares (or such other interests) and any other ownership or profit interest in
such Person (including, without limitation, partnership, member or trust
interests therein), whether voting or nonvoting, and whether or not such share,
warrant, option, right or other interest is authorized or otherwise existing on
any date of determination.
"ERISA": The Employee Retirement Income Security Act of 1974, as amended
from time to time.
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"ERISA Affiliate": Any corporation or trade or business that is a member
of any group of organizations (i) described in Section 414(b) or (c) of the Code
of which Borrower is a member and (ii) solely for purposes of potential
liability under Section 302(c)(11) of ERISA and Section 412(c)(11) of the Code
and the lien created under Section 302(f) of ERISA and Section 412(n) of the
Code, described in Section 414(m) or (o) of the Code of which Seller is a
member.
"Eurodollar Reserve Percentage": For any day, the percentage (expressed as
a decimal and rounded upwards, if necessary, to the next higher 1/100th of 1%)
which is in effect for such day as prescribed by the Federal Reserve Board (or
any successor) for determining the maximum reserve requirement (including
without limitation any basic, supplemental or emergency reserves) in respect of
Eurocurrency liabilities, as defined in Regulation D of such Board as in effect
from time to time, or any similar category of liabilities for a member bank of
the Federal Reserve System in New York City.
"Event of Default": The meaning specified in Section 7.01.
"Extension of Credit": As to any Lender, the making of a Loan by such
Lender.
"Fair Market Value": With respect to (a) a security listed on a national
securities exchange or recognized automated quotation system, the price of such
security as reported on such exchange by any widely recognized reporting method
customarily relied upon by financial institutions; (b) with respect to any other
property, including realty, other than Eligible Asset, the price which could be
negotiated in an arm's-length free market transaction, for cash, between a
willing seller and a willing buyer, neither of which is under pressure or
compulsion to complete the transaction and (c) Eligible Asset, the price which
could be negotiated in an arm's-length free market transaction, for cash for
such Eligible Asset, between a willing seller and a willing buyer, neither of
which is under pressure or compulsion to complete the transaction, in each case,
as determined by Agent in its sole discretion exercised in good faith.
"Federal Funds Effective Rate": The meaning set forth in the definition of
"Alternate Base Rate".
"Federal Funds Rate": For any day, the rate per annum (rounded upwards, if
necessary, to the nearest 1/1000 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 such day; provided that (a) if such day
is not a Business Day, the Federal Funds Rate for such day shall be such rate on
such transactions on the next preceding Business Day as so published on the next
succeeding Business Day, and (b) if no such rate is so published on such
Business Day, the Federal Funds Rate for such day shall be the average of the
quotations for such day for such transactions received by the Agent from three
Federal funds brokers of recognized standing and reputation reasonably selected
by the Agent.
"Fee Letter": That certain Fee Letter, dated as of the date hereof, among
the Borrower and the Agent, as the same may be amended, supplemented or
otherwise modified from time to time.
"GAAP": Generally accepted accounting principles in effect in the United
States of America applied on a consistent basis, subject, however, in the case
of determination of compliance with the financial covenants set out in Section
5.03 to the provisions of Section 1.03.
"Governmental Authority": Any nation or government, any state or other
political subdivision thereof and any entity exercising executive, legislative,
judicial, regulatory or administrative functions of or pertaining to government.
"Ground Lease": That certain Ground Lease dated as of July 2, 1984 between
Factory Mutual Insurance Company (formerly known as Allendale Mutual Insurance
Company), as lessor, and PREFCO II Limited Partnership (as successor to Johnston
Associates), as lessee.
"Guarantee": As to any Person, any obligation of such Person directly or
indirectly guaranteeing any indebtedness of any other Person or in any manner
providing for the payment of any indebtedness of any other Person or otherwise
protecting the holder of such indebtedness against loss (whether by virtue of
partnership arrangements, by agreement to keep-well another Person, to purchase
assets, goods, securities or services, or to agree to take-or-pay arrangement or
otherwise). The amount of any Guarantee of a Person shall be deemed to be an
amount equal to the stated or determinable amount of the primary obligation in
respect of which such Guarantee is made or, if not stated or determinable, the
maximum reasonably anticipated liability in respect thereof as determined by
such Person in good faith. The terms "Guarantee" and "Guaranteed" used as verbs
shall have correlative meanings.
"Indebtedness": Without duplication, all items that would constitute
"Indebtedness" as such term is defined under GAAP or pursuant to the reporting
requirements of Sections 13 and 15 of the Securities Exchange Act of 1934, as
amended, but including in any event (i) any mandatory redeemable Equity
Interests, any trust preferred Equity Interests (to the extent owned directly or
beneficially by the Borrower or any of its Subsidiaries) and any Contingent
Liabilities and (ii) without duplication, any and all of the Borrower's or any
of its Affiliates' obligations under or in connection with Interest Rate
Protection Agreements.
"Indemnified Party": The meaning set forth in Section 9.05.
"Initial Lender": As defined in the Recitals.
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"Interest Payment Date": The eleventh (11th) day of each calendar month,
provided that if such day is not a Business Day, the Interest Payment Date shall
occur on the immediately succeeding Business Day.
"Interest Period": With respect to any LIBOR Rate Loan, initially, the
period commencing on the applicable Borrowing Date and ending as of the next
succeeding Interest Payment Date; and thereafter, each period commencing on the
last day of the immediately preceding Interest Period applicable to such LIBOR
Rate Loan and ending on the earlier to occur of (x) the next occurring Interest
Payment Date or (y) the Termination Date.
"Interest Rate Protection Agreement": Any futures contract, options
related contract, short sale of US treasury securities or any interest rate
swap, cap, floor or collar agreement or any other similar arrangement providing
for protection against fluctuations in interest rates or the exchange of nominal
interest obligations, either generally or under specific contingencies and
acceptable to the Agent.
"Lender": The meaning given to such term in the preamble to this
Agreement.
"Leverage Ratio": The ratio of Consolidated Total Liabilities to
Consolidated Total Assets.
"LIBOR": For any LIBOR Rate Loan for any Interest Period therefor, the
rate per annum (rounded upwards, if necessary, to the nearest 1/100 of 1%)
appearing on Telerate Page 3750 (or any successor page) as the London interbank
offered rate for deposits in Dollars at approximately 11:00 A.M. (London time)
two Business Days prior to the first day of such Interest Period for a term
comparable to such Interest Period. If for any reason such rate is not
available, the term "LIBOR" shall mean, for any LIBOR Rate Loan for any Interest
Period therefor, the rate per annum (rounded upwards, if necessary, to the
nearest 1/100 of 1%) appearing on Reuters Screen LIBO Page as the London
interbank offered rate for deposits in Dollars at approximately 11:00 A.M.
(London time) two Business Days prior to the first day of such Interest Period
for a term comparable to such Interest Period; provided, however, if more than
one rate is specified on Reuters Screen LIBO Page, the applicable rate shall be
the arithmetic mean of all such rates (rounded upwards, if necessary, to the
nearest 1/100 of 1%). If, for any reason, neither of such rates is available,
then "LIBOR" shall mean the rate per annum at which, as determined by the
Administrative Agent, Dollars in an amount comparable to the Loans then
requested are being offered to leading banks at approximately 11:00 A.M. London
time, two (2) Business Days prior to the commencement of the applicable Interest
Period for settlement in immediately available funds by leading banks in the
London interbank market for a period equal to the Interest Period selected.
"LIBOR Lending Office": Initially, the office of each Lender designated in
writing as such Lender's LIBOR Lending Office and thereafter, such other office
of such Lender as such Lender may from time to time specify to the
Administrative Agent and the Borrower as the office of such Lender at which the
LIBOR Rate Loans of such Lender are to be made.
"LIBOR Rate": A rate per annum (rounded upwards, if necessary, to the next
higher 1/100th of 1%) determined by the Administrative Agent pursuant to the
following formula:
LIBOR
LIBOR
Rate = --------------------------------
1.00 - Eurodollar Reserve
Percentage
"LIBOR Rate Loan": Loans the rate of interest applicable to which is based
on the LIBOR Rate.
"Lien": Any mortgage, lien, pledge, charge, security interest or similar
encumbrance.
"Loan": The meaning set forth in Section 2.01(a).
"Loan Documents": This Agreement, each Revolving Note, the Security
Documents, the Environmental Indemnity Agreement, the Deposit Account Control
Agreement and all other agreements, documents, certificates and instruments
delivered to the Administrative Agent or any Lender by Borrower or its
Subsidiaries in connection herewith (other than any agreement, document,
certificate or instrument related to any Interest Rate Protection Agreement).
"Material Adverse Effect": A material adverse effect on (a) the
properties, business, operations, financial condition or prospects of the
Borrower, (b) the ability of the Borrower to perform its obligations under any
of the Loan Documents to which it is a party, (c) the validity or enforceability
of any of the Loan Documents, (d) the rights and remedies of the Agent under any
of the Loan Documents, (e) the timely payment of any amounts payable under the
Loan Documents and (f) the Fair Market Value of the Eligible Asset.
"Material Contracts": (a) any contract or other agreement, written or
oral, of the Borrower or any of its Subsidiaries involving in the aggregate a
monetary liability of or to any such Person in excess of $5,000,000 (or, solely
with respect to the Borrower and not in respect of its Subsidiaries, in an
amount in excess of $2,000,000) and (b) any other contract, agreement, written
or oral, of the Borrower or any of its Subsidiaries the failure to comply with
which could reasonably be expected to have a Material Adverse Effect.
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"Moody's": Xxxxx'x Investors Service, Inc.
"Mortgage and Security Agreement": The Mortgage and Security Agreement,
made by Owner in favor of the Initial Lender, in the form of Exhibit D attached
hereto, as amended, restated, supplemented or, otherwise modified and in effect
from time to time.
"Multiemployer Plan": A multiemployer plan defined as such in Section
3(37) of ERISA to which contributions have been or are required to be made by
the Borrower or any ERISA Affiliate and that is covered by Title IV of ERISA.
"Net Proceeds": With respect to any Equity Issuance or Debt Issuance by a
Person, the aggregate amount of all cash and the Fair Market Value of all other
property received by such Person in respect of such Equity Issuance or Debt
Issuance net of investment banking fees, legal fees, accountants' fees,
underwriting discounts and commissions and other customary fees and expenses
actually incurred by such Person in connection with such Equity Issuance.
"Non-Recourse Indebtedness": With respect to a Person, Indebtedness for
borrowed money in respect of which recourse for payment (except for customary
exceptions for fraud, misapplication of funds, environmental indemnities, and
other similar exceptions to non-recourse liability) is contractually limited to
specific assets of such Person encumbered by a Lien securing such Indebtedness.
"Notice of Borrowing": A request for a Loan borrowing pursuant to Section
2.01(b)(i).
"Obligations": Without duplication, (i) all of the obligations (including
principal, interest, fees, reimbursements, indemnification obligations and other
amounts) of the Borrower to the Lenders (including the Initial Lender) and the
Administrative Agent, whenever arising, under this Agreement, the Notes or any
of the other Loan Documents (including, but not limited to, any interest
accruing after the occurrence of a filing of a petition of bankruptcy under the
Bankruptcy Code with respect to Borrower or its Subsidiaries, regardless of
whether such interest is an allowed claim under the Bankruptcy Code), (ii) all
liabilities and obligations, whenever arising, owing from Borrower or its
Subsidiaries arising under any Interest Rate Protection Agreement, and (iii) all
liabilities and obligations, whenever arising, owing from Borrower or its
Subsidiaries to the Lenders (including the Initial Lender), the Agent or any of
their Affiliates.
"Owner": As defined in the Recitals.
"Participant": The meaning set forth in Section 9.03(b).
"PBGC": The Pension Benefit Guaranty Corporation or any entity succeeding
to any or all of its functions under ERISA.
"Permitted Exception": Those exceptions to title with respect to the
Eligible Asset approved by Agent in its sole discretion.
"Person": Any individual, corporation, company, voluntary association,
partnership, joint venture, limited liability company, trust, unincorporated
association or government (or any agency, instrumentality or political
subdivision thereof).
"Plan": An employee benefit or other plan established or maintained by any
Seller or any ERISA Affiliate and covered by Title N of ERISA, other than a
Multiemployer Plan,
"Preferred Securities": With respect to any Person, Equity Interests in
such Person that are entitled to preference or priority over any other Equity
Interest in such Person or the Indebtedness in respect of any payments on such
preferred Equity Interests, including but not limited to, the payment (or
accrual) of dividends or distribution of assets upon liquidation, or both.
"Property": Any right or interest in or to property of any kind
whatsoever, whether real, personal or mixed and whether tangible or intangible.
"Purchase Price": The Fair Market Value of aggregate consideration given,
whether in the form of cash, property or other assets, by Borrower, to acquire
the Eligible Asset.
"Recovery Event": Receipt by the Borrower of any cash insurance proceeds
or condemnation award payable by reason of theft, loss, physical destruction or
damage, taking or similar event with respect to the Eligible Asset, other than
obsolete property or assets no longer used or useful in the business of the
Borrower.
"Regulations T, U and X": Regulations T, U and X of the Board of Governors
of the Federal Reserve System (or any successor), as the same may be modified
and supplemented and in effect from time to time.
"REIT": A "real estate investment trust" within the meaning of the Code.
"Reportable Event": Any of the events set forth in Section 4043(c) of
ERISA, other than those events as to which the thirty day notice period is
waived under Sections .21, -00, .00, .00, .00 xx .00 xx XXXX Reg. 3-4043.
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"Repurchase Agreement": The Master Repurchase Agreement, dated as of
September 22, 2004, as amended, among Initial Lender, as buyer, Caplease, LP and
certain special purpose entity subsidiaries of Caplease, LP as Sellers, and
Borrower as guarantor.
"Requirement of Law": As to any Person, the certificate of incorporation
and bylaws or other organizational or governing documents of such Person, and
any law, treaty, rule or regulation or determination of an arbitrator or a court
or other Governmental Authority, in each case applicable to or binding upon such
Person or any of its property or to which such Person or any of its property is
subject.
"Requisite Lenders": As of any date, Lenders holding Revolving Commitment
Percentages totaling at least 66-2/3%, provided, that any Lender that is in
default hereunder shall not be included in calculating such Revolving Commitment
Percentages.
"Responsible Officer": As to any Person, the chief executive officer, the
president, the chief financial officer, the chief investment officer or the
general counsel of such Person.
"Revolving Commitment": With respect to each Lender, the commitment of
such Lender to make Loans in an aggregate principal amount at any time
outstanding up to such Lender's Revolving Commitment as specified in Schedule
1.01(B), as such amount may be reduced from time to time in accordance with the
provisions hereof.
"Revolving Commitment Percentage": For each Lender, the percentage
identified as its Revolving Commitment Percentage on Schedule 1.01(B), as such
percentage may be modified in connection with any assignment made in accordance
with the provisions of Section 9.03(c).
"Revolving Commitment Amount": The meaning set forth in Section 2.01(a).
"Revolving Note": That Revolving Note, in substantially the form attached
hereto as Exhibit A.
"S&P": Standard & Poor's Ratings Services, a division of The McGraw Hill
Companies, Inc.
"SEC": The Securities and Exchange Commission, or any successor thereto.
"Security Documents": The Mortgage and Security Agreement, the Deposit
Account Control Agreement, and such other documents executed and delivered in
connection with the granting, attachment and perfection of the Administrative
Agent's security interests and liens arising thereunder, including, without
limitation, UCC financing statements.
"Subsidiary": With respect to any Person, any corporation, partnership,
limited liability company or other entity of which at least a majority of the
securities or other ownership interests having by the terms thereof ordinary
voting power to elect a majority of the board of directors or other persons
performing similar functions of such corporation, partnership, limited liability
company or other entity (irrespective of whether or not at the time securities
or other ownership interests of any other class or classes of such corporation,
partnership or other entity shall have or might have voting power by reason of
the happening of any contingency) is at the time directly or indirectly owned or
controlled by such Person or one or more Subsidiaries of such Person or by such
Person and one or more Subsidiaries of such Person.
"Tax Laws": The meaning given to such term in Section 2.12.
"Taxes": The meaning given to such term in Section 2.12.
"Termination Date": The third (3rd) anniversary of the Closing Date,
subject to earlier termination upon any breach by the Borrower hereunder.
"Transfer Effective Date": The meaning set forth in each Commitment
Transfer Supplement.
"Trust Preferred Indebtedness": All Indebtedness issued pursuant to the
Junior Subordinated Indenture between Caplease, LP and JPMorgan Chase Bank,
National Association, as trustee, dated December 13, 2005, and the Parent
Guarantee Agreement between Capital Lease Funding, Inc. and JPMorgan Chase Bank,
National Association, as guarantee trustee, dated December 13, 2005.
"2.12 Certificate": The meaning set forth in Section 2.12.
"UCC Financing Statement": A financing statement on Form UCC-1 or the
proper national UCC form, naming Initial Lender as "Secured Party" and Borrower
as "Debtor" and describing the Collateral.
"Uniform Commercial Code" or "UCC": The Uniform Commercial Code as in
effect on the date hereof in the State of New York; provided that if by reason
of mandatory provisions of law, the perfection, the effect of perfection or
nonperfection, or the priority of the security interest in any Collateral is
governed by the Uniform Commercial Code as in effect in a jurisdiction other
than New York, "Uniform Commercial Code" shall mean the Uniform Commercial Code
as in effect in such other jurisdiction for purposes of the provisions hereof
relating to such perfection, effect of perfection or nonperfection, or priority.
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"Unused Facility Fee": The meaning given to such term is Section 2.13.
"USA PATRIOT Act": The USA PATRIOT Act, Title III of Pub. L. 107-56,
signed into law October 26, 2001.
"Voting Interests": With respect to any Person, Equity Interests issued by
such Person the holders of which are ordinarily, in the absence of
contingencies, entitled to vote for the election of directors (or persons
performing similar functions) of such Person, even though the right so to vote
has been suspended by the happening of such a contingency.
"Wachovia Bridge": The Credit Agreement in aggregate principal amount of
$211,000,000, dated as of April 17, 2007, among Caplease, LP, as borrower, the
Borrower and certain domestic subsidiaries of the Borrower as guarantors, the
lenders party thereto, and the Initial Lender as administrative agent.
"Wachovia Indebtedness": All Indebtedness of Borrower provided by the
Initial Lender or any of its Affiliates, and shall include, without limitation,
Indebtedness arising under the Wachovia Bridge, the WBNA Facility, the WIH
Facility, the Repurchase Agreement and any Wachovia Interest Rate Protection
Agreements.
"Wachovia Interest Rate Protection Agreements": Any and all of the
Borrower's or any of its Affiliates' obligations arising under, or in connection
with, any Interest Rate Protection Agreements to which the Initial Lender or any
of its Affiliates is a counterparty thereto.
"WIH Facility": The Revolving Loan Agreement in aggregate principal amount
of $25,000,000, dated as of August 26, 2005, as amended, among the Borrower and
others and Wachovia Investment Holdings, LLC, in its respective capacities as
initial Lender and as administrative agent for lenders party thereto from time
to time and all accompanying documentation associated therewith.
"WBNA Facility": The Revolving Loan Agreement in aggregate principal
amount of $75,000,000, dated as of August 26, 2005, as amended, among the
Borrower and others and Wachovia Bank, National Association, in its respective
capacities as initial Lender and as administrative agent for lenders party
thereto from time to time and all accompanying documentation associated
therewith.
Section 1.02 Other Definitional Provisions.
(a) Unless otherwise specified therein, all terms defined in this
Agreement shall have the defined meanings when used in the Revolving Notes or
other Loan Documents or any certificate or other document made or delivered
pursuant hereto.
(b) The meanings given to terms defined herein shall be equally applicable
to both the singular and plural forms of such terms.
(c) The words "hereof," "herein" and "hereunder" and words of similar
import when used in this Agreement shall refer to this Agreement as a whole and
not to any particular provision of this Agreement, and Section, subsection,
Schedule and Exhibit references are to this Agreement unless otherwise
specified.
(d) The words "include," "includes" and "including" shall be deemed to be
followed by "without limitation" whether or not they are in fact followed by
such words or words of like import.
(e) The words "writing," "written" and comparable terms shall refer to
printing, typing, computer disk, e-mail and other means of reproducing words in
a visible form.
(f) References to any agreement or contract are to such agreement or
contract as amended, restated, supplemented or otherwise modified from time to
time in accordance with the terms hereof and thereof. References to any Person
include the successors and permitted assigns of such Person.
Section 1.03 Accounting Terms.
(a) 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 with the most recent audited
consolidated financial statements of Borrower delivered to the Lenders.
(b) Borrower shall deliver to the Administrative Agent and each Lender at
the same time as the delivery of any periodic financial statements, to the
extent not disclosed in such periodic financial statements, (i) a description in
reasonable detail of any material change in the application of accounting
principles employed in the preparation of such financial statements from those
applied in the most recently preceding periodic financial statements and (ii) a
reasonable estimate of the effect on the financial statements on account of such
changes in application.
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Section 1.04 Computation of Time Periods. All time references in this
Agreement and the other Loan Documents shall be to Charlotte, North Carolina
time unless otherwise indicated. For purposes of computation of periods of time
hereunder, the word "from" means "from and including" and the words "to" and
"until" each mean "to but excluding."
ARTICLE II
THE LOANS; AMOUNT AND TERMS
Section 2.01 Loans.
(a) Revolving Commitment. During the Commitment Period, subject to the
terms and conditions hereof, the Initial Lender agrees initially and, upon an
assignment of any portion of the Revolving Commitment to one or more Lenders,
all Lenders, including, without limitation, the Initial Lender, severally, agree
to make revolving credit loans (each a "Loan" and collectively the "Loans") to
the Borrower from time to time for the purposes hereinafter set forth; provided,
however, that (i) in the event of an assignment of any portion of the Revolving
Commitment Amount to one or more Lenders, with regard to each Lender
individually, the sum of such Lender's share of outstanding Loans shall not
exceed such Lender's Revolving Commitment Percentage of the aggregate Revolving
Commitment Amount, and (ii) with regard to the Lenders collectively, the sum of
the aggregate amount of outstanding Loans shall not exceed the aggregate
Revolving Commitment Amount then in effect. For purposes hereof, the aggregate
amount available hereunder shall be FORTY MILLION DOLLARS ($40,000,000) (the
"Revolving Commitment Amount"). Loans shall consist of LIBOR Rate Loans and may
be repaid and reborrowed in accordance with the provisions hereof. LIBOR Rate
Loans shall be made by each Lender at its LIBOR Lending Office. The Revolving
Commitment Amount may be increased above $40,000,000 in the event Borrower
proposes, and Agent accepts, in its sole and absolute discretion, additional
real estate collateral as security for the Loans. Agent may condition the
acceptance of any such additional collateral on such terms and conditions as
Agent, in its sole discretion determines.
(b) Revolving Loan Borrowings.
(i) The Borrower shall request a Loan borrowing by written notice
(or telephonic notice promptly confirmed in writing which confirmation may
be by fax) to the Agent in the form of the Notice of Borrowing attached as
Exhibit J not later than 11:00 a.m. on or before one (1) Business Day
prior to the date of the requested borrowing (unless a shorter notice
period is approved by the Agent). Each such request for borrowing shall be
irrevocable and shall specify (A) that a Loan is requested, (B) the date
of the requested borrowing (which shall be a Business Day) and (C) the
aggregate principal amount to be borrowed. The Administrative Agent shall
give notice to each Lender promptly upon receipt of each Notice of
Borrowing, the contents thereof and each such Lender's share thereof.
Subject to satisfaction of the applicable conditions set forth in Article
III for the applicable Loan, the Agent will make commercially reasonable
efforts to initiate the wire of the proceeds of the requested borrowing to
the Borrower no later than 2:00 p.m. on the date and to the account
specified by the Borrower in such Notice of Borrowing.
(ii) Intentionally Omitted.
(iii) Minimum Amounts. Each Loan shall be in a minimum aggregate
amount of $2,000,000 (or the remaining amount of the - Revolving
Commitment Amount, if less).
(iv) Advances. Each Lender will make its Revolving Commitment
Percentage of each approved Loan borrowing available to the Administrative
Agent for the account of the Borrower at the office of the Administrative
Agent identified in the signature page to this Agreement, or at such other
office as the Administrative Agent may designate in writing, upon
reasonable advance notice by 1:00 P.M. on the date specified in the
applicable Notice of Borrowing, in Dollars and in funds immediately
available to the Administrative Agent. Such borrowing will then be made
available to the Borrower by the Administrative Agent by crediting the
account of the Borrower on the books of such office with the aggregate of
the amounts made available to the Administrative Agent by the Lenders and
in like funds as received by the Administrative Agent.
(c) Use and Repayment of Loan Proceeds. The proceeds of all Loans may be
used for any general corporate purpose, including to fund investments or to
repay other indebtedness; provided, however, that Loan proceeds with respect to
an Eligible Asset may not exceed the product of the (x) the lesser of (i) the
Fair Market Value of such Eligible Asset or (ii) the Purchase Price of such
Eligible Asset times (y) the Advance Rate for such Eligible Asset. Lender agrees
that, unless and until an Adjustment Event has occurred, Borrower shall be
entitled to borrow the Full Revolving Commitment Amount hereunder. Amounts
repaid hereunder may be reborrowed in accordance with the terms hereof.
(d) Intentionally Omitted.
(e) Interest. Subject to the provisions of Section 2.04, Loans shall be
comprised of LIBOR Rate Loans and each such LIBOR Rate Loan shall bear interest
at a per annum rate equal to the sum of the LIBOR Rate plus the Applicable
Premium. Interest on Loans shall be payable in arrears on each Interest Payment
Date.
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(f) Revolving Notes. The Borrower's obligation to pay each Lender's Loans
shall be evidenced by a Revolving Note made payable to such Lender in
substantially the form of Exhibit A, if requested by such Lender.
Section 2.02 Payments to Collection Account. Upon the delivery of one (1)
Business Day's written notice from the Administrative Agent, Borrower shall pay
all amounts received from the Eligible Asset on or after receipt of the notice
into the collection account established pursuant to the terms of the Deposit
Account Control Agreement (the "Collection Account"). Any failure to make such a
mandatory payment into the Collection Account within one (1) Business Day as set
forth above, shall be an Event of Default pursuant to Section 6.01(a).
Notwithstanding the foregoing mandatory payment obligation, all other payment
obligations arising under the Loan Documents may, at the option of the Borrower,
also be deposited into the Collection Account.
Section 2.03 Prepayments.
(a) Optional Prepayments. Borrower shall have the right to make optional
prepayments hereunder from time to time upon the delivery of two (2) Business
Days' irrevocable notice; provided, however, that each optional prepayment of
Loans shall be in a minimum principal amount of $2,000,000. Amounts prepaid
under this Section 2.03(a) shall be applied to the repayment of amounts
outstanding under this Agreement (pro rata with respect to advances under this
Agreement); provided, that each Lender shall receive its pro rata share of any
such prepayment based on its Revolving Commitment Percentage. All prepayments
under this Section 2.03(a) shall be subject to Section 2.11. All prepayments
under this facility shall be accompanied by any breakage costs incurred by
Lenders as result of such prepayment. Interest on the principal amount prepaid
shall be due and payable on any date that a prepayment is made hereunder through
the date of prepayment. Amounts prepaid on the Loans may be reborrowed in
accordance with the terms hereof.
(b) Mandatory Prepayments.
(i) Revolving Commitment Amount. If at any time after the Closing
Date, the sum of the aggregate principal amount of outstanding Loans shall
exceed the aggregate Revolving Commitment Amount then in effect, the
Borrower immediately shall prepay the Loans in an amount sufficient to
eliminate such excess.
(ii) Eligible Asset Dispositions. Contemporaneously with any
Eligible Asset Disposition, the Borrower shall prepay the Loans in an
aggregate amount equal to 100% of the net proceeds derived from such
Eligible Asset Disposition.
(iii) Intentionally Omitted.
(iv) Recovery Event. Promptly upon receipt, the Borrower shall
prepay the Loans in an aggregate amount equal to 100% of the net proceeds
received in connection with a Recovery Event.
(v) Adjustment Event. Immediately upon the occurrence and
continuation of an Adjustment Event, the Borrower shall repay to Agent an
amount sufficient to reduce borrowings outstanding hereunder to an amount
equal to the product of the (a) adjusted Fair Market Value for the
Eligible Asset resulting therefrom and (b) the Advance Rate.
Application of Mandatory Prepayments. All amounts required to be paid
pursuant to Section 2.03(b) shall be applied pro rata to the then-outstanding
Loans. All amounts (A) required to be paid pursuant to Section 2.03(b) and (B)
in excess of amounts used to repay Loans as provided in the immediately
preceding sentence and all other amounts due hereunder or under the other Loan
Documents, if any, shall be applied to whoever may be lawfully entitled to
receive such surplus.
All prepayments under Section 2.03(b) shall be subject to Section 2.11 and
be accompanied by interest on the principal amount prepaid through the date of
prepayment.
Section 2.04 Default Rate and Payment Dates.
(a) (i) If all or a portion of the principal amount of any Loan shall not
be paid when due, such overdue amount shall bear interest at a rate per annum
which is equal to the rate that would otherwise be applicable thereto plus 2.5%
(the "Default Rate"), or (ii) if any interest payable on the principal amount of
any Loan or any fee or other amount, including the principal amount of any Loan,
payable hereunder shall not be paid when due (whether at the stated maturity, by
acceleration or otherwise), such overdue amount shall bear interest at a rate
per annum which is equal to the Default Rate, in each case from the date of such
non-payment until such amount is paid in full (after as well as before
judgment). Upon the occurrence, and during the continuance, of any other Event
of Default hereunder, the principal of and, to the fullest extent permitted by
law, interest on the Loans and any other amounts owing hereunder or under the
other Loan Documents shall bear interest, payable on demand, at a per annum rate
which is (A) in the case of principal, the rate that would otherwise be
applicable thereto plus 2.5% or (B) in the case of interest, fees or other
amounts, the Default Rate (after as well as before judgment). The Requisite
Lenders shall have the right to revoke the imposition of any default interest
imposed under this Section 2.04(a).
(b) Interest on each Loan shall be payable in arrears on each Interest
Payment Date; provided that interest accruing pursuant to paragraph (a) of this
Section 2.04 shall be payable from time to time on demand.
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Section 2.05 Computation of Interest and Fees.
(a) All fees, interest and all other amounts payable hereunder shall be
calculated on the basis of a 360 day year for the actual days elapsed. The
Administrative Agent shall as soon as practicable notify the Borrower and the
Lenders of each determination of a LIBOR Rate on the Business Day of the
determination thereof.
(b) Each determination of an interest rate by the Administrative Agent
pursuant to any provision of this Agreement shall be conclusive and binding on
the Borrower and the Lenders in the absence of manifest error. The
Administrative Agent shall, at the request of the Borrower, deliver to the
Borrower a statement showing the computations used by the Administrative Agent
in determining any interest rate.
(c) It is the intent of the Lenders and the Borrower to conform to and
contract in strict compliance with applicable usury law from time to time in
effect. All agreements between the Lenders and the Borrower are hereby limited
by the provisions of this paragraph which shall override and control all such
agreements, whether now existing or hereafter arising and whether written or
oral. In no way, nor in any event or contingency (including but not limited to
prepayment or acceleration of the maturity of any Obligation), shall the
interest taken, reserved, contracted for, charged, or received under this
Agreement, under the Revolving Notes or otherwise, exceed the maximum
nonusurious amount permissible under applicable law. If, from any possible
construction of any of the Loan Documents or any other document, interest would
otherwise be payable in excess of the maximum nonusurious amount, any such
construction shall be subject to the provisions of this paragraph and such
interest shall be automatically reduced to the maximum nonusurious amount
permitted under applicable law, without the necessity of execution of any
amendment or new document. If any Lender shall ever receive anything of value
which is characterized as interest on the Loans under applicable law and which
would, apart from this provision, be in excess of the maximum nonusurious
amount, an amount equal to the amount which would have been excessive interest
shall, without penalty, be applied to the reduction of the principal amount
owing on the Loans and not to the payment of interest, or refunded to the
Borrower or the other payor thereof if and to the extent such amount which would
have been excessive exceeds such unpaid principal amount of the Loans. The right
to demand payment of the Loans or any other Indebtedness evidenced by any of the
Loan Documents does not include the right to receive any interest which has not
otherwise accrued on the date of such demand, and the Lenders do not intend to
charge or receive any unearned interest in the event of such demand. All
interest paid or agreed to be paid to the Lenders with respect to the Loans
shall, to the extent permitted by applicable law, be amortized, prorated,
allocated, and spread throughout the full stated term (including any renewal or
extension) of the Loans so that the amount of interest on account of such
indebtedness does not exceed the maximum nonusurious amount permitted by
applicable law.
Section 2.06 Pro Rata Treatment and Payments.
(a) Allocation of Payments Before Event of Default. Each borrowing of
Loans shall be made pro rata by the Lenders according to the respective
Revolving Commitment Percentages of the Lenders. Each payment under this
Agreement or any Revolving Note shall be applied, first, to any fees then due
and owing by the Borrower under this Agreement, second, to interest then due and
owing hereunder and under the Revolving Notes and, third, to principal then due
and owing hereunder and under the Revolving Notes. Each payment on account of
any fees shall be made pro rata in accordance with the respective amounts due
and owing. Each payment (other than prepayments) by the Borrower on account of
principal of and interest on the Loans shall be applied to such Loans in
accordance with the terms of Section 2.06(b) hereof. Except to the extent
provided in Section 2.03, each mandatory prepayment on account of principal of
the Loans shall be applied in accordance with Section 2.06(b). All payments
(including prepayments) to be made by the Borrower on account of principal,
interest and fees shall be made without defense, set-off or counterclaim (except
as provided in Section 2.12(b)) and shall be made to the Administrative Agent
for the account of the Lenders at the Administrative Agent's office specified on
signature page hereto in Dollars and in immediately available funds not later
than 1:00 P.M. on the date when due. The Administrative Agent shall distribute
such payments to the Lenders entitled thereto promptly upon receipt in like
funds as received. If any payment hereunder becomes due and payable on a day
other than a Business Day, such payment shall be extended to the next succeeding
Business Day, and, with respect to payments of principal, interest thereon shall
be payable at the then applicable rate during such extension.
(b) Allocation of Payments After Exercise of Remedies. Notwithstanding any
other provisions of this Agreement to the contrary, after the Revolving
Commitments shall have been terminated, and the Loans and all other amounts
under the Loan Documents shall have become due and payable in accordance with
the terms of Section 6.02 hereof, all amounts collected or received by the
Administrative Agent or any Lender on account of the Borrower's obligations
under the Loan Documents or any other amounts outstanding under any of the Loan
Documents or in respect of the Collateral shall be paid over or delivered as
follows:
FIRST, to the payment of all reasonable out-of-pocket costs and expenses
(including without limitation reasonable attorneys' fees) of the Administrative
Agent in connection with enforcing the rights of the Lenders under the Loan
Documents and any protective advances made by the Administrative Agent with
respect to the Collateral under or pursuant to the terms of the Security
Documents;
SECOND, to payment of any fees owed to the Administrative Agent;
THIRD, to the payment of all reasonable out-of-pocket costs and expenses
(including without limitation, reasonable attorneys' and consultants' fees) of
each of the Lenders in connection with enforcing its rights under the Loan
Documents or otherwise with respect to the obligations of the Borrower owing to
such Lender;
FOURTH, to the payment of all of the obligations of the Borrower under the
Loan Documents consisting of accrued interest;
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FIFTH, to the payment of the outstanding principal amount of the
obligations of the Borrower under the Loan Documents;
SIXTH, to all other obligations of the Borrower which shall have become
due and payable under the Loan Documents or otherwise and not repaid pursuant to
clauses "FIRST" through "FIFTH" above;
SEVENTH, to the payment of any Obligations of the Borrower then
outstanding in the priorities, if any, set forth in this Agreement until fully
paid and discharged; and
EIGHTH, to the payment of the surplus, if any, to whoever may be lawfully
entitled to receive such surplus.
In carrying out the foregoing, (i) amounts received shall be applied in
the numerical order provided until exhausted prior to application to the next
succeeding category and (ii) each of the Lenders shall receive an amount equal
to its pro rata share (based on its Revolving Commitment Percentage) of amounts
available to be applied pursuant to clauses "THIRD," "FOURTH," "FIFTH" and
"SIXTH" above.
Section 2.07 Non-Receipt of Funds by the Administrative Agent.
(a) Unless the Administrative Agent shall have been notified in writing by
a Lender prior to the date a Loan is to be made by such Lender (which notice
shall be effective upon receipt) that such Lender does not intend to make the
proceeds of such Loan available to the Administrative Agent, the Administrative
Agent may assume that such Lender has made such proceeds available to the
Administrative Agent on such date, and the Administrative Agent may in reliance
upon such assumption (but shall not be required to) make available to the
Borrower a corresponding amount. If such corresponding amount is not in fact
made available to the Administrative Agent, the Administrative Agent shall be
able to recover such corresponding amount from such Lender. If such Lender does
not pay such corresponding amount forthwith upon the Administrative Agent's
demand therefor, the Administrative Agent will promptly notify the Borrower, and
the Borrower shall immediately pay such corresponding amount to the
Administrative Agent. The Administrative Agent shall also be entitled to recover
from the Lender or the Borrower, as the case may be, interest on such
corresponding amount in respect of each day from the date such corresponding
amount was made available by the Administrative Agent to the Borrower to the
date such corresponding amount is recovered by the Administrative Agent at a per
annum rate equal to (i) from the Borrower at the applicable rate for the
applicable borrowing pursuant to the Notice of Borrowing and (ii) from a Lender
at the Federal Funds Effective Rate.
(b) Unless the Administrative Agent shall have been notified in writing by
the Borrower, prior to the date on which any payment is due from it hereunder
(which notice shall be effective upon receipt) that the Borrower does not intend
to make such payment, the Administrative Agent may assume that Borrower has made
such payment when due, and the Administrative Agent may in reliance upon such
assumption (but shall not be required to) make available to each Lender on such
payment date an amount equal to the portion of such assumed payment to which
such Lender is entitled hereunder, and if the Borrower has not in fact made such
payment to the Administrative Agent, such Lender shall, on demand, repay to the
Administrative Agent the amount made available to such Lender. If such amount is
repaid to the Administrative Agent on a date after the date such amount was made
available to such Lender, such Lender shall pay to the Administrative Agent on
demand interest on such amount in respect of each day from the date such amount
was made available by the Administrative Agent to such Lender to the date such
amount is recovered by the Administrative Agent at a per annum rate equal to the
Federal Funds Effective Rate.
(c) A certificate of the Administrative Agent submitted to the Borrower or
any Lender with respect to any amount owing under this Section 2.07 shall be
conclusive in the absence of manifest error.
Section 2.08 Inability to Determine Interest Rate. Notwithstanding any
other provision of this Agreement, if (i) the Administrative Agent shall
reasonably determine on an institutional basis for all LIBOR based loans
(including the Loans) made by such Requisite Lenders (which determination shall
be conclusive and binding absent manifest error) that, by reason of
circumstances affecting the relevant market, reasonable and adequate means do
not exist for ascertaining LIBOR for such Interest Period, or (ii) the Requisite
Lenders shall reasonably determine (which determination shall be conclusive and
binding absent manifest error) that the LIBOR Rate does not adequately and
fairly reflect the cost to such Lenders of funding all such LIBOR based loans
(including the Loans), the Administrative Agent shall forthwith give telephone
notice of such determination, confirmed in writing, to the Borrower and the
Lenders at least two Business Days prior to the first day of such Interest
Period. Unless the Borrower shall have notified the Administrative Agent upon
receipt of such telephone notice that it wishes to rescind or modify its request
regarding such Loans, any Loans that were requested to be made as LIBOR Rate
Loans shall be made as Alternate Base Rate Loans. Until any such notice has been
withdrawn by the Administrative Agent, no further Loans shall be made as or
continued as LIBOR Rate Loans for the Interest Periods so affected.
Section 2.09 Illegality. Notwithstanding any other provision of this
Agreement, if the adoption of or any change in any Requirement of Law or in the
interpretation or application thereof by the relevant Governmental Authority to
any Lender shall make it unlawful for such Lender or its LIBOR Lending Office to
make or maintain LIBOR Rate Loans as contemplated by this Agreement or to obtain
in the interbank eurodollar market through its LIBOR Lending Office the funds
with which to make such Loans, (a) such Lender shall promptly notify the
Administrative Agent and the Borrower thereof, (b) the commitment of such Lender
hereunder to make LIBOR Rate Loans or continue LIBOR Rate Loans as such shall
forthwith be suspended until the Administrative Agent shall give notice that the
condition or situation which gave rise to the suspension shall no longer exist,
and (c) such Lender's Loans then outstanding as LIBOR Rate Loans, if any, shall
be converted on the last day of the Interest Period for such Loans or within
such earlier period as required by law as Alternate Base Rate Loans. The
Borrower hereby agrees promptly to pay any Lender, upon its demand, any
additional amounts necessary to compensate such Lender for actual and direct
costs (but not including anticipated profits) reasonably incurred by such Lender
in order to make or maintain its LIBOR Rate Loans hereunder. A certificate as to
any additional amounts payable pursuant to this Section (which certificate must
be delivered to the Administrative Agent within 10 Business Days of the change
in law) submitted by such Lender, through the Administrative Agent, to the
Borrower shall be conclusive in the absence of manifest error. Each Lender
agrees to use reasonable efforts (including reasonable efforts to change its
LIBOR Lending Office) to avoid or to minimize any amounts which may otherwise be
payable pursuant to this Section; provided, however, that such efforts shall not
cause the imposition on such Lender of any additional costs or legal or
regulatory burdens deemed by such Lender in its sole discretion to be material.
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Section 2.10 Requirements of Law.
(a) If the adoption of or any change in any Requirement of Law or in the
interpretation or application thereof or compliance by any Lender with any
request or directive (whether or not having the force of law) from any central
bank or other Governmental Authority made subsequent to the date hereof:
(i) shall subject such Lender to any tax of any kind whatsoever with
respect to any LIBOR Rate Loan made by it, or change the basis of taxation
of payments to such Lender in respect thereof (except for changes in the
rate of tax on the overall net income of such Lender);
(ii) shall impose, modify or hold applicable any reserve, special
deposit, compulsory loan or similar requirement against assets held by,
deposits or other liabilities in or for the account of, advances, loans or
other extensions of credit by, or any other acquisition of funds by, any
office of such Lender which is not otherwise included in the determination
of the LIBOR Rate hereunder; or
(iii) shall impose on such Lender any other condition;
and the result of any of the foregoing is to increase the cost to
such Lender of making or maintaining LIBOR Rate Loans or to reduce any
amount receivable hereunder or under any Revolving Note, then, in any such
case, the Borrower shall promptly pay such Lender, upon its demand, any
additional amounts necessary to compensate such Lender for such additional
cost or reduced amount receivable which such Lender reasonably deems to be
material as determined by such Lender with respect to its LIBOR Rate
Loans. A certificate as to any additional amounts payable pursuant to this
Section (which certificate must be delivered to the Administrative Agent
within 10 Business Days of the change in law) submitted by such Lender,
through the Administrative Agent, to the Borrower shall be conclusive in
the absence of manifest error. Each Lender agrees to use reasonable
efforts (including reasonable efforts to change its LIBOR Lending Office)
to avoid or to minimize any amounts which might otherwise be payable
pursuant to this paragraph of this Section; provided, however, that such
efforts shall not cause the imposition on such Lender of any additional
costs or legal or regulatory burdens deemed by such Lender to be material.
(b) If any Lender shall have reasonably determined that the adoption of or
any change in any Requirement of Law regarding capital adequacy or in the
interpretation or application thereof or compliance by such Lender or any person
controlling such Lender with any request or directive regarding capital adequacy
(whether or not having the force of law) from any central bank or Governmental
Authority made subsequent to the date hereof does or shall have the effect of
reducing the rate of return on such Lender's or such person's capital as a
consequence of its obligations hereunder to a level below that which such Lender
or such corporation could have achieved but for such adoption, change or
compliance (taking into consideration such Lender's or such person's policies
with respect to capital adequacy) by an amount reasonably deemed by such Lender
to be material, then from time to time, within fifteen (15) days after demand by
such Lender, the Borrower shall pay to such Lender such additional amount as
shall be certified by such Lender as being required to compensate it for such
reduction. Such a certificate as to any additional amounts payable under this
Section submitted by a Lender (which certificate shall include a description of
the basis for the computation), through the Administrative Agent, to the
Borrower shall be conclusive absent manifest error.
Section 2.11 Indemnity. The Borrower hereby agrees to indemnify each
Lender and to hold such Lender harmless from any funding loss or expense which
such Lender may sustain or incur as a consequence of (a) the failure by the
Borrower to pay the principal amount of or interest on any Loan by such Lender
in accordance with the terms hereof, (b) the failure of the Borrower to accept a
borrowing after the Borrower has given a notice in accordance with the terms
hereof (unless revoked in accordance with Section 2.01(b)(i)) and/or (c) the
failure of the Borrower to make any prepayment after the Borrower has given a
notice in accordance with the terms hereof, in each case including, but not
limited to, any such loss or expense arising from interest or fees payable by
such Lender to lenders of funds obtained by it in order to maintain its Loans
hereunder. A certificate as to any additional amounts payable pursuant to this
Section 2.11 submitted by any Lender, through the Administrative Agent, to the
Borrower (which certificate must be delivered to the Administrative Agent within
thirty (30) days following such default, prepayment or conversion) shall be
conclusive in the absence of manifest error. The agreements in this Section 2.11
shall survive termination of this Agreement and payment of the Revolving Notes
and all other amounts payable hereunder.
Section 2.12 Taxes.
(a) All payments made by the Borrower hereunder or under any Revolving
Note will be, except as provided in Section 2.12(b), made free and clear of, and
without deduction or withholding for, any present or future taxes, levies,
imposts, duties, fees, assessments or other charges of whatever nature now or
hereafter imposed pursuant to any law, rule, regulation or other promulgation by
any Governmental Authority or by any political subdivision or taxing authority
thereof (collectively, "Tax Laws") or therein with respect to such payments (but
excluding any tax imposed on or measured by the net income or profits of a
Lender pursuant to the laws of the jurisdiction in which it is organized or the
jurisdiction in which the principal office or applicable lending office of such
Lender is located or any subdivision thereof or therein) and all interest,
penalties or similar liabilities with respect thereto (all such non-excluded
taxes, levies, imposts, duties, fees, assessments or other charges being
referred to collectively as "Taxes"). If any Taxes are so levied or imposed, the
Borrower agrees to pay the full amount of such Taxes, and such additional
amounts as may be necessary so that every payment of all amounts due under this
Agreement or under any Revolving Note, after withholding or deduction for or on
account of any Taxes, will not be less than the amount provided for herein or in
such Revolving Note. The Borrower will furnish to the Administrative Agent as
soon as practicable after the date the payment of any Taxes is due pursuant to
applicable law certified copies (to the extent reasonably available and required
by law) of tax receipts evidencing such payment by the Borrower. The Borrower
agrees to indemnify and hold harmless each Lender, and reimburse such Lender
upon its written request, for the amount of any Taxes so levied or imposed and
paid by such Lender.
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(b) Each Lender that is not a United States person (as such term is
defined in Section 7701(a)(30) of the Code) agrees to deliver to the Borrower
and the Administrative Agent on or prior to the Closing Date, or in the case of
a Lender that is an assignee or transferee of an interest under this Agreement
pursuant to Section 9.03 (unless the respective Lender was already a Lender
hereunder immediately prior to such assignment or transfer), on the date of such
assignment or transfer to such Lender, (i) if the Lender is a "bank" within the
meaning of Section 881(c)(3)(A) of the Code, two accurate and complete original
signed copies of Internal Revenue Service Form X-0XXX, X-0XXX or W-8IMY (or
successor forms) certifying such Lender's entitlement to a complete exemption
from United States withholding tax with respect to payments to be made under
this Agreement and under any Revolving Note, or (ii) if the Lender is not a
"bank" within the meaning of Section 881(c)(3)(A) of the Code, Internal Revenue
Service Form X-0XXX, X-0XXX or W-8IMY as set forth in clause (i) above, or (x) a
certificate in substantially the form of Exhibit K (any such certificate, a
"2.12 Certificate") and (y) two accurate and complete original signed copies of
Internal Revenue Service Form W-8BEN (or successor form) certifying such
Lender's entitlement to an exemption from United States withholding tax with
respect to payments of interest to be made under this Agreement and under any
Revolving Note. In addition, each Lender agrees that it will deliver upon the
Borrower's request updated versions of the foregoing, as applicable, whenever
the previous certification has become obsolete or inaccurate in any material
respect, together with such other forms as may be required in order to confirm
or establish the entitlement of such Lender to a continued exemption from or
reduction in United States withholding tax with respect to payments under this
Agreement and any Revolving Note. Notwithstanding anything to the contrary
contained in Section 2.12(a), but subject to the immediately succeeding
sentence, (x) the Borrower shall be entitled, to the extent it is required to do
so by law, to deduct or withhold Taxes imposed by the United States (or any
political subdivision or taxing authority thereof or therein) from interest,
fees or other amounts payable hereunder for the account of any Lender which is
not a United States person (as such term is defined in Section 7701(a)(30) of
the Code) for U.S. federal income tax purposes to the extent that such Lender
has not provided to the Borrower U.S. Internal Revenue Service Forms that
establish a complete exemption from such deduction or withholding and (y) the
Borrower shall not be obligated pursuant to Section 2.12(a) hereof to gross-up
payments to be made to a Lender in respect of Taxes imposed by the United States
if (I) such Lender has not provided to the Borrower the Internal Revenue Service
Forms required to be provided to the Borrower pursuant to this Section 2.12(b)
or (II) in the case of a payment, other than interest, to a Lender described in
clause (ii) above, to the extent that such Internal Revenue Service Forms do not
establish a complete exemption from withholding of such Taxes. Notwithstanding
anything to the contrary contained in the preceding sentence or elsewhere in
this Section 2.12, the Borrower agrees to pay additional amounts and to
indemnify each Lender in the manner set forth in Section 2.12(a) (without regard
to the identity of the jurisdiction requiring the deduction or withholding) in
respect of any amounts deducted or withheld by it as described in the
immediately preceding sentence as a result of any changes after the Closing Date
in any applicable law, treaty, governmental rule, regulation, guideline or
order, or in the interpretation thereof, relating to the deducting or
withholding of Taxes.
(c) Each Lender agrees to use reasonable efforts (including reasonable
efforts to change its LIBOR Lending Office) to avoid or to minimize any amounts
which might otherwise be payable pursuant to this Section; provided, however,
that such efforts shall not cause the imposition on such Lender of any
additional costs or legal or regulatory burdens deemed by such Lender in its
sole discretion to be material.
(d) If the Borrower pays any additional amount pursuant to this Section
2.12 with respect to a Lender, such Lender shall use reasonable efforts to
obtain a refund of tax or credit against its tax liabilities on account of such
payment; provided that such Lender shall have no obligation to use such
reasonable efforts if either (i) it is in an excess foreign tax credit position
or (ii) it believes in good faith, in its sole discretion, that claiming a
refund or credit would cause adverse tax consequences to it. In the event that
such Lender receives such a refund or credit, such Lender shall pay to the
Borrower an amount that such Lender reasonably determines is equal to the net
tax benefit obtained by such Lender as a result of such payment by the Borrower.
In the event that no refund or credit is obtained with respect to the Borrower's
payments to such Lender pursuant to this Section 2.12, then such Lender shall
upon request provide a certification that such Lender has not received a refund
or credit for such payments. Nothing contained in this Section 2.12 shall
require a Lender to disclose or detail the basis of its calculation of the
amount of any tax benefit or any other amount or the basis of its determination
referred to in the proviso to the first sentence of this Section 2.12 to the
Borrower or any other party.
(e) The agreements in this Section 2.12 shall survive the termination of
this Agreement and the payment of the Revolving Notes and all other amounts
payable hereunder.
ARTICLE III
CONDITIONS PRECEDENT
Section 3.01 Conditions. The obligation of the Initial Lender to make the
initial Loan is subject to the satisfaction of the following conditions
precedent:
(a) Execution of Agreement and Loan Documents. The Administrative Agent
shall have received
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(i) counterparts of this Agreement, executed by a duly authorized
officer of Borrower,
(ii) a duly executed Revolving Note,
(iii) a duly executed Mortgage and Security Agreement conforming to
the requirements of this Agreement, and
(iv) counterparts of any other Loan Document, duly executed by
Borrower.
(b) Authority Documents. The Administrative Agent shall have received the
following:
(i) Articles of Incorporation, Etc. Copies of the articles of
incorporation or other charter or formation documents of Borrower
certified to be true and complete as of a recent date by the appropriate
Governmental Authority of the state of its incorporation or formation, as
the case may be.
(ii) Resolutions. Copies of resolutions of the board of directors or
other comparable managing body of Borrower approving and adopting the Loan
Documents, the transactions contemplated therein and authorizing execution
and delivery thereof, certified by a Responsible Officer of the Borrower,
to be true and correct and in force and effect as of such date.
(iii) Bylaws, Etc. A copy of the bylaws or limited partnership
agreement, as applicable, of Borrower certified by a Responsible Officer
of Caplease as of the Closing Date to be true and correct and in force and
effect as of such date.
(iv) Good Standing. Copies of certificates of good standing,
existence or its equivalent with respect to Borrower certified as of a
recent date by the appropriate Governmental Authorities of the state of
incorporation, and each other state in which Borrower is qualified to do
business.
(v) Incumbency. An incumbency certificate of Borrower certified by a
secretary or assistant secretary to be true and correct as of the Closing
Date.
(c) Documentation The Administrative Agent shall have received, in form
and substance satisfactory to the Administrative Agent the following, as
applicable:
(i) searches of Uniform Commercial Code filings in the jurisdiction
of the chief executive office and state of incorporation of Borrower and
each jurisdiction where any Collateral is located or where a filing would
need to be made in order to perfect the Administrative Agent's security
interest in the Collateral, copies of the financing statements on file in
such jurisdictions and evidence that no Liens exist;
(ii) UCC financing statements for each appropriate jurisdiction as
is necessary, in the Administrative Agent's sole discretion, to perfect
the Administrative Agent's security interest in the Collateral;
(iii) The following documentation in respect of the Eligible Asset:
(a) a Phase I (and, if applicable, Phase II) environmental report; (b)
engineering reports (if applicable); (c) title policy; (d) ALTA survey;
(e) an executive summary, presenting in reasonable detail, the acquisition
of such Eligible Asset; (f) the name and credit rating of the tenant
leasing the Eligible Asset; and (g) copies of any (i) lease and (ii)
escrow or holdback agreements or arrangements entered into in connection
with, or arising out of, the acquisition of such Eligible Asset.
(iv) duly executed consents as are necessary, in the Administrative
Agent's sole discretion, to perfect the Lenders' security interest in the
Collateral.
(d) Legal Opinions of Counsel. The Administrative Agent shall have
received one or more opinions of counsel for the Borrower dated the Closing Date
and acceptable to the Administrative Agent and the Initial Lender.
(e) Fees. The Administrative Agent and the Initial Lender shall have
received all fees, if any, owing pursuant to the Fee Letter.
(f) Litigation. There shall not exist any pending or threatened
litigation, investigation, bankruptcy or insolvency, injunction, order or claim
affecting or relating to Borrower or any of its Subsidiaries, this Agreement and
the other Loan Documents, that has not been settled, dismissed, vacated,
discharged or terminated prior to the Closing Date which could reasonably be
expected to result in a Material Adverse Effect.
(g) Solvency Certificate. The Administrative Agent shall have received an
officer's certificate prepared by a Responsible Officer of Caplease as to the
financial condition, solvency and related matters of the Borrower, after giving
effect to the initial borrowings under the Loan Documents, in substantially the
form of Exhibit G hereto.
(h) Corporate Structure. The corporate capital and ownership structure of
Caplease and its Subsidiaries as of June 30, 2007 shall be as described in
Schedule 3.01(h).
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(i) Consents. The Administrative Agent shall have received evidence that
all governmental, shareholder and material third party consents and approvals
necessary in connection with the financing and other transactions contemplated
hereby have been obtained.
(j) Compliance with Laws. The financing and other transactions
contemplated hereby shall be in compliance with all applicable laws and
regulations (including all applicable securities and banking laws, rules and
regulations).
(k) Bankruptcy. There shall be no bankruptcy or insolvency proceedings
commenced or threatened to be commenced against Caplease or any of its
Subsidiaries.
(l) Intentionally Omitted.
(m) Financial Statements. The Administrative Agent and the Initial Lender
shall have received copies of the financial statements referred to in Section
4.01(f) hereof, each in form and substance satisfactory to it.
(n) No Material Adverse Change. Since March 31, 2007, there has been no
material adverse change in the business, properties, prospects, operations or
condition (financial or otherwise) of Caplease and its Subsidiaries taken as a
whole.
(o) Compliance Certificate. The Administrative Agent shall have received a
Compliance Certificate in the form attached hereto as Exhibit H, duly executed
by a Responsible Officer of Caplease, and satisfactory to the Administrative
Agent in its sole discretion.
(p) Officer's Certificate. The Administrative Agent shall have received a
certificate executed by a Responsible Officer of the Borrower as of the Closing
Date stating that (i) no action, suit, investigation or proceeding is pending
or, to the knowledge of the Borrower, threatened in any court or before any
arbitrator or governmental instrumentality that purports to affect the Borrower
or any other transaction contemplated by the Loan Documents, if such action,
suit, investigation or proceeding could reasonably be expected to have a
Material Adverse Effect and (ii) immediately after giving effect to this
Agreement (including any initial Extensions of Credit hereunder), the other Loan
Documents, and all the transactions contemplated therein or thereby to occur on
such date, (A) no Default or Event of Default exists and (B) all representations
and warranties contained herein and in the other Loan Documents are true and
correct in all material respects.
(q) Maximum Leverage Ratio. The Leverage Ratio of Caplease and its
Subsidiaries, after giving effect to any initial borrowings under the Loan
Documents, is not greater than .85 to 1.00 as of the Closing Date.
(r) Intentionally Omitted.
(s) Intentionally Omitted.
(t) USA PATRIOT Act. The Borrower shall have provided to the
Administrative Agent, for benefit of the Administrative Agent and the Initial
Lender, the necessary information required by the USA PATRIOT Act including,
without limitation, the identity of the Borrower and its Subsidiaries, the name
and address of the Borrower and its Subsidiaries and other information that will
allow the Administrative Agent or the Initial Lender, as applicable, to identify
the Borrower and its Subsidiaries in accordance with the USA PATRIOT Act.
(u) Additional Matters. All other documents and legal matters in
connection with the transactions contemplated by this Agreement shall be
reasonably satisfactory in form and substance to the Administrative Agent and
its counsel.
Section 3.02 Conditions to All Extensions of Credit. The obligation of the
Initial Lender and any other Lender to make any Extension of Credit hereunder is
subject to the satisfaction of the following conditions precedent on the date of
making such Extension of Credit:
(a) Representations and Warranties. The representations and warranties
made by the Borrower herein, in the Loan Documents or which are contained in any
certificate furnished at any time under or in connection herewith shall be true
and correct in all material respects on and as of the date of such Extension of
Credit as if made on and as of such date (except for those which expressly
relate to an earlier date).
(b) No Default or Event of Default. No Default or Event of Default shall
have occurred and be continuing on such date or after giving effect to the
Extension of Credit to be made on such date unless such Default or Event of
Default shall have been waived in accordance with this Agreement.
(c) Compliance with Commitments. Immediately after giving effect to the
making of any such Extension of Credit (and the application of the proceeds
thereof), the sum of the aggregate principal amount of outstanding Loans shall
not exceed the lesser of (i) the Revolving Commitment Amount then in effect and
(ii) the amounts permitted under Section 2.01 (c).
(d) Intentionally Omitted.
(e) Intentionally Omitted.
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(f) Certificates. The Administrative Agent shall have received a Closing
Certificate, duly executed by a Responsible Officer of Caplease.
(g) Additional Conditions to Loans. If such Loan is made pursuant to
Section 2.01, all conditions set forth in such Section shall have been
satisfied.
Each request for an Extension of Credit and each acceptance by the
Borrower of any such Extension of Credit shall be deemed to constitute a
representation and warranty by the Borrower as of the date of such Extension of
Credit that the applicable conditions in paragraphs (a) through (g) of this
Section have been satisfied.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
Section 4.01 Representations and Warranties. Borrower represents and
warrants to the Administrative Agent that as of the date of this Agreement:
(a) Solvency. The Loan Documents are not being entered into in
contemplation of insolvency or with intent to hinder, delay or defraud any of
the Borrower's creditors. The financing contemplated hereby is not undertaken
with the intent to hinder, delay or defraud any of the Borrower's creditors. As
of the date hereof, the Borrower is not insolvent within the meaning of 11
U.S.C. Section 101 (32) or any successor provision thereof and the Obligations
(i) will not cause the liabilities of the Borrower to exceed the assets of the
Borrower, (ii) will not result in the Borrower having unreasonably small
capital, and (iii) will not result in debts that would be beyond the Borrower's
ability to pay as the same mature.
(b) Ability to Perform. The Borrower does not believe, nor does it have
any reason or cause to believe, that it cannot perform each and every covenant
contained in the Loan Documents applicable to it to which it is a party.
(c) No Defaults; No Material Adverse Effect. No Default or Event of
Default or any Material Adverse Effect has occurred and is continuing hereunder.
(d) Indebtedness of Borrower. As of the Closing Date, the Borrower's only
Indebtedness other than Wachovia Indebtedness and the Trust Preferred
Indebtedness, is Non-Recourse Indebtedness.
(e) Legal Name; Existence; Compliance with Law. Caplease's exact legal
name is Capital Lease Funding, Inc. Caplease is a REIT, duly organized, validly
existing and in good standing under the laws of the State of Maryland. Owner's
exact legal name is PREFCO II Limited Partnership. Owner is a limited
partnership duly organized, validly existing and in good standing under the laws
of the State of Connecticut. Borrower is qualified to do business and is in good
standing in all other jurisdictions in which the nature of the business
conducted by it makes such qualification necessary, except where failure so to
qualify could not be reasonably likely (either individually or in the aggregate)
to have a Material Adverse Effect. The Borrower is in compliance with all
Requirements of Law except to the extent that the failure to comply therewith
could not, in the aggregate, reasonably be expected to have a Material Adverse
Effect.
(f) Financial Condition. Caplease has heretofore furnished to the
Administrative Agent and the Initial Lender a copy of its consolidated balance
sheets and its consolidated Subsidiaries, if any, as at the end of March 31,
2007 and the related consolidated statements of income and retained earnings and
of cash flows for Caplease and its consolidated Subsidiaries, if any, for such
period and the portion of the fiscal year through the end of such period. Such
financial statements fairly present, in all material respects, the consolidated
financial position of Caplease and its Subsidiaries as of such date in
accordance with GAAP applied on a consistent basis.
(g) Litigation. As of the date of this Agreement there are no actions,
suits, arbitrations, investigations (including, without limitation, any of the
foregoing which are pending or to the best of the Borrower's knowledge
threatened) affecting the Borrower or affecting any of the assets or properties
of the Borrower before any Governmental Authority which (i) questions or
challenges the validity or enforceability of the Loan Documents or any action to
be taken in connection with the Borrower's obligations under the Loan Documents,
or (ii) individually or in the aggregate, if adversely determined, could
reasonably be likely to have a Material Adverse Effect.
(h) No Breach. Neither (a) the execution and delivery of the Loan
Documents nor (b) the consummation of the transactions therein contemplated to
be entered into by the Borrower in compliance with the terms and provisions
thereof will conflict with or result in a breach of the organizational documents
of the Borrower or any of its Subsidiaries, or any applicable law, rule or
regulation, or any order, writ, injunction or decree of any Governmental
Authority, or any material agreement or instrument to which the Borrower is a
party or by which it or its assets or properties is bound or to which it is
subject, or constitute a default under any such material agreement or instrument
or result in the creation or imposition of any Lien (except for the Liens
created pursuant to the Loan Documents) upon any assets or properties of the
Borrower or any of its Subsidiaries, pursuant to the terms of any such agreement
or instrument.
(i) Action. The Borrower has all necessary corporate or other power,
authority and legal right to execute, deliver and perform its obligations under
each of the Loan Documents, as applicable; the execution, delivery and
performance by the Borrower of each of the Loan Documents have been duly
authorized by all necessary corporate action on its part; and each Loan Document
has been duly executed and delivered by the Borrower and constitutes a legal,
valid and binding obligation of the Borrower enforceable against the Borrower in
accordance with its terms, subject to bankruptcy, insolvency, and other
limitations on creditors rights generally and to equitable principals.
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(j) Approvals. No authorizations, approvals or consents of, and no filings
or registrations with, any securities exchange, Governmental Authority or any
other Person are required for the execution, delivery or performance by the
Borrower of the Loan Documents except for filings and recordings in respect of
the Liens created pursuant to the Loan Documents (other than such
authorizations, approvals, consents, filings or registrations that have already
been obtained or made, as applicable, and remain in full force and effect).
(k) Margin Regulations and Use of Proceeds. Neither any Extension of
Credit hereunder, nor the use of the proceeds thereof, will be used for any
purpose which violates, or would be inconsistent with, the provisions of
Regulation T, U or X.
(l) Taxes. The Borrower and its Subsidiaries have filed all Federal income
tax returns and all other material tax returns that are required to be filed by
them and have paid all taxes due pursuant to such returns or pursuant to any
assessment received by them, except for any such taxes or assessments as are
being appropriately contested in good faith by appropriate proceedings
diligently conducted and with respect to which adequate reserves have been
provided. The charges, accruals and reserves on the books of the Borrower and
its Subsidiaries in respect of taxes and other governmental charges are, in the
opinion of the Borrower, adequate.
(m) Investment Company Act. Neither Caplease nor any of its Subsidiaries
is an "Investment Company," or a company "Controlled" by an "Investment
Company," within the meaning of the Investment Company Act of 1940, as amended.
(n) Location of Books and Records. The location where Borrower keeps its
books and records, including all computer tapes and records related to the
Eligible Asset and comprising the Eligible Asset File is its chief executive
office unless notified by Borrower.
(o) True and Complete Disclosure. The information, reports, financial
statements, exhibits and schedules furnished in writing by or on behalf of the
Borrower to the Administrative Agent and the Initial Lender in connection with
the negotiation, preparation or delivery of this Agreement and the other Loan
Documents or included herein or therein or delivered pursuant hereto or thereto,
when taken as a whole, do not contain any untrue statement of material fact or
omit to state any material fact necessary to make the statements herein or
therein, in light of the circumstances under which they were made, not
misleading. There is no fact known to a Responsible Officer of the Borrower,
after due inquiry, that would reasonably be expected to have a Material Adverse
Effect that has not been disclosed herein, in the other Loan Documents or in a
report, financial statement, exhibit, schedule, disclosure letter or other
writing furnished to the Administrative Agent and the Initial Lender for use in
connection with the transactions contemplated hereby or thereby.
(p) ERISA. Neither Borrower nor any of its Subsidiaries has established
any Multiemployer Plan pursuant to ERISA, the Code or any other Federal or state
law. Each Plan to which the Borrower or any of its Subsidiaries make direct
contributions, and, to the knowledge of the Borrower, as applicable, each other
Plan, is in compliance in all material respects with, and has been administered
in all material respects in compliance with, the applicable provisions of ERISA,
the Code and any other Federal or State law.
(q) No Reliance. The Borrower has made its own independent decision to
enter into the Loan Documents and as to whether the transactions contemplated
thereby are appropriate and proper based upon its own judgment and upon advice
from such advisors (including without limitation, legal counsel and accountants)
as it has deemed necessary. The Borrower is not relying upon any advice from the
Agent as to any aspect of the transactions contemplated hereby the legal,
accounting or tax treatment of such transactions.
(r) Compliance with Anti-Money Laundering Laws. The Borrower has complied
with all applicable anti-money laundering laws and regulations, including
without limitation the USA PATRIOT Act (collectively, the "Anti-Money Laundering
Laws"). The Borrower has conducted the requisite due diligence in connection
with the transactions contemplated hereby for purposes of the Anti-Money
Laundering Laws.
(s) Compliance with Financial Covenants. Caplease is in full compliance
with the financial covenant set forth in Section 5.03 to the extent applicable.
(t) Ground Lease.
(i) Recording. The Ground Lease or a memorandum thereof has been
duly recorded. The Ground Lease permits the interest of the lessee
thereunder to be encumbered by the Mortgage and Security Agreement, and
there has not been a material change in the terms of the Ground Lease
since its recordation.
(ii) No Senior Liens. Except for the Permitted Encumbrances, Owner's
interest in the Ground Lease is not subject to any liens or encumbrances
superior to, or of equal priority with, the Mortgage and Security
Agreement.
(iii) Ground Lease Assignable. Owner's interest in the Ground Lease
is assignable to Lender and, as of the Closing Date, all required notices
to, and/or consents from, the ground lessor under the Ground Lease have
been made or obtained with respect to any such assignment to Lender.
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(iv) Default. To the best of Borrower's knowledge, the Ground Lease
is in full force and effect and no default has occurred under the Ground
Lease and there is no existing condition which, but for the passage of
time or the giving of notice, would result in a default under the terms of
the Ground Lease.
(v) Notice. Ground Lessor has agreed in writing to give notice to
Lender of any default under the Ground Lease and that notice of
termination given under the Ground Lease is not effective against Lender
unless a copy of the notice has been delivered to Lender in the manner
described in the Ground Lease.
(vi) Cure. Lender is permitted an opportunity (including, where
necessary, time to gain possession of the interest of Borrower under the
Ground Lease) to cure any default under the Ground Lease, which is curable
after the receipt of notice of the default before the sublessor thereunder
may terminate the Ground Lease.
(vii) Term. The Ground Lease has a term, inclusive of renewal
options, which extends not less than twenty (20) years beyond the Maturity
Date.
(viii) New Lease. Ground Lessor has agreed in writing to enter into
a new lease with Lender upon termination of the Ground Lease for any
reason, including rejection of the Ground Lease in a bankruptcy
proceeding, provided that Lender cures any defaults which are susceptible
to being cured.
ARTICLE V
COVENANTS
The Borrower hereby covenants and agrees that on the Closing Date, and
thereafter for so long as this Agreement is in effect and until the Revolving
Commitments have terminated, no Revolving Note remains outstanding and unpaid
and the obligations under this Agreement, together with unpaid interest, fees
and all other amounts owing to the Agent or any Lender hereunder, are paid in
full, that, to the extent applicable:
Section 5.01 Intentionally Omitted.
Section 5.02 Mortgaged Assets. Borrower shall mortgage all Collateral in
favor of the Administrative Agent and such Collateral shall be subject at all
times to a first priority, perfected Lien in favor of the Administrative Agent
pursuant to the terms and conditions of the Security Documents or such other
security documents as the Administrative Agent shall reasonably request to be
executed and delivered by the Borrower, subject only to the Permitted
Exceptions. Borrower agrees not to further mortgage, lien or pledge any such
Collateral to any other party for as long as such Collateral is subject to the
Lien of the Security Documents.
Section 5.03 Financial Covenants.
(a) The Leverage Ratio of Caplease shall be less than or equal to 0.85 to
1.00;
(b) Caplease shall maintain $8 million in unencumbered Cash and Cash
Equivalents;
(c) Caplease shall maintain a minimum Consolidated Tangible Net Worth of
(i) $100,000,000 plus (ii) 75% of the aggregate proceeds received by Borrower
from any Equity Issuance or receipt of capital contributions; and
(d) Caplease shall make no distributions of any type during the occurrence
of Event of Default.
Section 5.04 Certificates; Other Information. The Borrower shall furnish
to the Agent:
(a) within forty-five (45) days following the end of each calendar
quarter, (i) unaudited financial statements of Caplease and its consolidated
Subsidiaries and (ii) a Compliance Certificate, duly executed by a Responsible
Officer of Caplease, certifying as to the matters specified therein for all
applicable periods specified therein;
(b) within one hundred twenty (120) days of each calendar year, audited
annual financial statements of Caplease and its consolidated Subsidiaries,
together with a certificate of the independent certified public accountants
reporting on such financial statements stating that in making the examination
necessary therefor no knowledge was obtained of any Default or Event of Default,
except as specified in such certificate;
(c) within three (3) Business Days after the occurrence thereof, a notice
containing information regarding the amount received in connection with any
Eligible Asset Dispositions or Recovery Event;
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(d) promptly upon receipt thereof, a copy or summary of any report or
"management letter" submitted or presented by independent accountants to the
Borrower or any of its Subsidiaries in connection with any annual, interim or
special audit of the books of such Person;
(e) promptly upon their becoming available, copies of (i) all press
releases and other statements made available generally by the Borrower to the
public concerning material developments in the business of the Borrower and its
Subsidiaries and (ii) any non-routine correspondence or official notices
received by the Borrower or any of its Subsidiaries from any Governmental
Authority which regulates the operations of the Borrower or its Subsidiaries
which is likely to have a Material Adverse Effect;
(f) promptly, any material report or material notice received by the
Borrower or its Subsidiaries with respect to any Eligible Asset and such
additional financial and other information as the Administrative Agent, on
behalf of any Lender, may from time to time reasonably request;
(g) during any time the Eligible Asset is not leased to a single tenant
pursuant to a net lease which provides that the tenant is fully responsible for
the maintenance and operation (including, but not limited to, the payment of all
taxes and insurance) of the Eligible Asset, within thirty (30) days following
the end of each calendar quarter, rent rolls (if applicable) and property
operating statements for the Eligible Asset; and
(h) when obtained by Borrower, any surveillance report regarding the
Eligible Asset.
Section 5.05 No Negative Pledge. Neither Borrower nor any of its
Subsidiaries shall grant, allow or enter into any agreement or arrangement with
any Person that prohibits or restricts, or purports to prohibit or restrict, the
granting of any security interest, Lien or other encumbrance on any of the
assets or properties of the Borrower; without written notice to Agent.
Section 5.06 Intentionally omitted.
Section 5.07 Intentionally Omitted.
Section 5.08 Compliance with Laws. Borrower shall comply with all
Requirements of Law, including but not limited to, all Environmental Laws,
except where the failure to comply would not reasonably be expected to have a
Material Adverse Effect, and shall comply with all Anti-Money Laundering Laws.
Section 5.09 Taxes. The Borrower and its Subsidiaries shall timely file
all Federal income tax returns and all other material tax returns that are
required to be filed by it and pay all taxes due pursuant to such returns or
pursuant to any assessment received by it or any of its Subsidiaries, except for
any such taxes or assessments as are being appropriately contested in good faith
by appropriate proceedings diligently conducted and with respect to which
adequate reserves have been provided.
Section 5.10 Books and Records. Borrower shall maintain its books and
records, including all computer tapes and records related to the Eligible Asset
and comprising the Eligible Asset File in its chief executive office unless
notified by Borrower, and shall provide Agent with reasonable access thereto.
Section 5.11 Preservation of Existence. Borrower shall maintain its legal
existence as a corporation and its license or qualification and good standing in
each jurisdiction in which its ownership or lease of property or the nature of
its business makes such license or qualification necessary except for any
failure that would not reasonably be expected to have a Material Adverse Effect.
Section 5.12 Maintenance of Collateral. Borrower shall (i) comply with and
enforce the terms and conditions of any lease of the Eligible Asset, (ii) not
commit waste or permit impairment or deterioration of the Collateral, (iii) not
abandon any Collateral, (iv) restore or repair promptly, in a good and
workmanlike manner, any damaged part of any Collateral to the equivalent of its
original condition, or such other condition as Agent may approve in writing,
whether or not insurance proceeds or condemnation awards are available to cover
any costs of such restoration or repair (provided that Agent shall make any
insurance proceeds or condemnation awards received by Agent available to
Borrower for restoration and repair), (v) keep the Collateral in good repair
(normal wear and tear excepted), including the replacement of any personalty and
fixtures with items of equal or better function and quality, (vi) provide for
professional management of the Collateral by a property manager satisfactory to
Agent under a contract approved by Agent in writing, (vii) not change the use of
any Collateral, (viii) give notice to Agent of and, unless otherwise directed in
writing by Agent, shall appear in and defend any action or proceeding purporting
to affect any Collateral, Agent's security or Agent's rights under this
Agreement, (ix) make any reasonable repairs to the Collateral which are
requested by Agent, and (x) not (and shall not permit any tenant or other person
to) remove, demolish or alter any Collateral or any part thereof except in
connection with the replacement of tangible personalty. To the extent Borrower
has entered into a net lease for the entire Eligible Asset which provides for
the tenant thereunder to undertake all responsibility for the maintenance and
operation of the Eligible Asset, Borrower's obligations to comply with clauses
(iv), (v), (vi) and (ix) in this Section 5.12 shall be abated so long as the
tenant under such lease is performing all of its material obligations
thereunder. Borrower shall maintain insurance coverage of the Collateral to the
extent required in the Loan Documents. Borrower shall perform all Material
Contracts relating to the Property to which it is a party, and cause its
Subsidiaries to perform all Material Contracts relating to the Property to which
they are a party if the failure to so perform would have a Material Adverse
Effect. Borrower will perform under any Interest Rate Protection Agreements.
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Section 5.13 Intentionally Omitted.
Section 5.14 Further Assurances. Borrower shall, from time to time, at its
expense, faithfully preserve and protect Agent's Lien on and security interest
in the Collateral as a continuing first priority perfected Lien, subject only to
Permitted Exceptions, and shall do such other acts and things as Agent in its
sole discretion may deem necessary or advisable from time to time in order to
preserve, perfect and protect the liens granted under the Loan Documents and to
exercise and enforce its rights and remedies thereunder with respect to the
Collateral, provided that (i) the terms and conditions of this Agreement and the
other Loan Documents are not changed thereby, (ii) Agent will use its best
efforts to minimize costs and expenses incurred in connection with a request
under this subsection, and (iii) Borrower's obligations hereunder or under any
other Loan Documents are not increased or otherwise adversely affected thereby
except for incidental costs and expenses such as recording fees and reasonable
attorneys' fees and expenses.
Section 5.15 Ownership. Caplease shall own at all times the controlling
equity interest in Owner; Owner shall at all times be the sole owner of the
Eligible Asset.
Section 5.16 Appraisals. Borrower shall cooperate with Agent and provide
such information in its possession as Agent shall reasonably require to complete
a new appraisal of the Eligible Asset as required hereunder.
Section 5.17 Indebtedness. Borrower shall not, at any time create, incur,
assume or suffer to exist any Indebtedness related to Collateral, except:
(a) Indebtedness under the Loan Documents; and
(b) Trade debt incurred in the ordinary course of business of operating
the Collateral.
Section 5.18 Liens. Borrower shall not, at any time create, incur, assume
or suffer to exist any lien on any of the Collateral, except the Permitted
Exceptions. Upon Agent's reasonable request, which request shall not be made
more frequently than annually unless Agent has a reasonable suspicion of a title
defect, Borrower shall promptly perform or cause to be performed, at Borrower's
sole cost and expense, a title search satisfactory to Agent, demonstrating
compliance with the provisions of this Section.
Section 5.19 Liquidations, Mergers, Consolidations, Acquisitions. Borrower
shall not dissolve, liquidate or wind-up its affairs, or become a party to any
merger or consolidation, or acquire by purchase, lease or otherwise all or
substantially all of the assets or capital stock of any other Person.
Section 5.20 Changes in Organizational Documents; Name. Borrower shall not
amend in any respect its certificate of incorporation (including any provisions
or resolutions relating to capital stock), by-laws, or other formation agreement
or other organizational documents without first sending notice to Agent and
obtaining the prior written consent of Agent, which shall be granted or denied
within thirty (30) Business Days of Agent's receipt of the proposed amendment, a
brief explanation of its purpose and effect, and such other documents as Agent
may reasonably request. Borrower shall not amend, revise or otherwise change its
name in any respect, without the prior written consent of Agent.
Section 5.21 Enforceability of Loan Documents. In the event that any of
the Loan Documents shall cease to be legal, valid and binding agreements
enforceable against the party executing the same or such party's successors and
assigns (as permitted under the Loan Documents) in accordance with the
respective terms thereof (except to the extent that enforceability may be
limited by bankruptcy, insolvency, reorganization, moratorium or other similar
laws affecting the enforceability of creditors' rights generally or limiting the
right to specific performance) or shall in any way be terminated (except in
accordance with its terms) or become or be declared ineffective or inoperative
or shall in any way be challenged or contested, resulting in the failure to
provide the practical benefit of the respective liens, security interests,
rights, titles, interests, remedies, powers or privileges intended to be created
thereby, Borrower shall use best efforts to cure any such defect(s) in such Loan
Document(s), provided that if Borrower is unable to cure any such defect(s)
within a reasonable time period, not to exceed thirty (30) days, Lender may in
its discretion, upon ten (10) days notice to Borrower, accelerate Borrower's
obligations under the Revolving Note.
Section 5.22 Reporting Requirements. Borrower covenants and agrees that
until the later of (i) payment in full of the Loan and satisfaction of all of
Borrower's other obligations hereunder and (ii) the Termination Date, Borrower
will furnish or cause to be furnished to Lender:
(a) If to Borrower's knowledge an Event of Default or Default has occurred
with respect to Borrower, a certificate signed by an Responsible Officer of
Borrower setting forth the details of such Event of Default or Default and the
actions that Borrower proposes to take with respect thereto;
(b) Promptly after the commencement thereof, notice of all actions, suits,
proceedings or investigations before or by any Governmental Authority or any
other Person which (i) relate to the Collateral, or (ii) involve a claim or
series of claims in excess of Two Million and NO/100 Dollars ($2,000,000.00)
which is not covered by Borrower's insurance policies and which if adversely
determined would reasonably be expected to result in a Material Adverse Effect;
and
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(c) Borrower shall promptly notify Lender of any action which has, or
could reasonably be expected to result in, a Material Adverse Effect.
Section 5.23 Future Disclosure. All written information furnished after
the date hereof by or on behalf of the Borrower to the Administrative Agent and
the Initial Lender in connection with this Agreement and the other Loan
Documents and the transactions contemplated hereby and thereby will be true,
complete and accurate in all material respects, or (in the case of any
projections) based on reasonable estimates, on the date as of which such
information is stated or certified.
Section 5.24 Ground Lease.
(a) Covenants. Borrower covenants and agrees as follows: (i) Owner will
promptly and faithfully to observe, perform and comply in all material respects
with all of the terms, covenants and provisions of the Ground Lease applicable
to it; (ii) Owner will refrain from doing anything and not do or permit any act,
event or omission, as a result of which, there is likely to occur a default or
breach under the Ground Lease beyond any applicable notice and cure periods;
(iii) Owner will promptly give Agent notice of any default under the Ground
Lease upon learning of such default and immediately deliver to Agent a copy of
each notice of such default and all responses to such notice of default and all
other material instruments, notices or demands received or delivered by Owner
under or in connection with the Ground Lease; (iv) Owner will promptly notify
Agent in writing in the event of the initiation of any litigation or arbitration
proceeding affecting Owner or the Eligible Asset under or in connection with the
Ground Lease; (v) within ten (10) Business Days of each request by Agent, Owner
will furnish to Agent an estoppel certificate from Owner in such form as
provided in the Ground Lease from time to time concerning Owner's due
observance, performance and compliance in all material respects with the terms,
covenants and provisions of the Ground Lease; and (vi) Owner will not
voluntarily or involuntarily, directly or indirectly, assign, transfer or convey
the Eligible Asset, nor surrender, terminate or cancel the Ground Lease nor,
without the prior written consent of Agent, fail to exercise in a timely manner
any renewal option(s) contained in the Ground Lease which arise during the term
of the Loans. Any assignment, transfer, conveyance, surrender, termination, or
cancellation of the Ground Lease in contravention of the foregoing shall be void
and of no force and effect.
(b) Additional Covenants. Borrower further covenants and agrees that Owner
will not, without the prior written consent of Agent, modify, alter or amend the
Ground Lease, either orally or in writing, which consent (a) with respect to
monetary or material non-monetary provisions, may be granted, conditioned or
withheld in Agent's sole discretion and (b) with respect to non-monetary,
non-material provisions, may not be unreasonably withheld, conditioned or
delayed. For the purposes of this Section 5.24(b), the phrase "material
non-monetary" shall mean provisions with respect to any of the following: (i)
the term of the Ground Lease, (ii) any economic matter (including costs passed
through to Borrower) that would affect the rent or any other charge thereunder,
(iii) any security deposit, if any, (iv) defaults, events of default and
remedies, (v) termination or cancellation, (vi) disposition of casualty or
condemnation proceeds, (vii) transfer of the leased premises, (viii) tenant
mortgages, (ix) assignment and subletting (other than as otherwise permitted in
such lease and this Agreement) or (x) options, rights of first refusal or offer
and extension options.
(c) Default. In the event of a default by Borrower under the Ground Lease,
then, in each and every such case, Agent may (but shall not be obligated to), in
its sole discretion and following notice to Borrower, cause such default or
defaults by Borrower to be remedied and otherwise take or perform such other
actions as Agent may reasonably deem necessary or desirable as a result thereof
or in connection therewith. Borrower shall, on demand, reimburse Agent for all
advances reasonably made and expenses reasonably incurred by Agent in curing any
such default(s) (including, without limitation, reasonable attorneys' fees),
together with interest thereon from the date if different until the same is paid
in full to Agent and all such sums so advanced shall be secured hereby. The
provisions of this subsection are in addition to any other right or remedy given
to or allowed Agent under the Ground Lease or otherwise.
(d) Intentionally Omitted.
(e) No Liability. Notwithstanding anything contained herein or otherwise
to the contrary (except as set forth in the next sentence), Agent shall not have
any liability or obligation under the Ground Lease, by virtue of its acceptance
of the Mortgage and Security Agreement. Borrower acknowledges and agrees that
Agent shall be liable for the obligations of the Owner arising under the Ground
Lease, as applicable, for only that period of time, if any, during which Agent
is in possession of the Eligible Asset, as applicable, or has acquired, by
foreclosure, power of sale or otherwise, and is holding, all of Owner's right,
title and interest as tenant in the Eligible Asset.
(f) Bankruptcy. Notwithstanding anything contained herein or otherwise to
the contrary, Owner hereby assigns, transfers and sets over to Agent any and all
rights and interests that may arise in favor of Owner in connection with or as a
result of the bankruptcy or insolvency of the Ground Lessor during the term of
this Agreement, as applicable, including, without limitation, all of Owner's
right, title and interest in, to and under ss.365 of the Bankruptcy Code (11
U.S.C. ss.365), as the same may be amended, supplemented or modified from time
to time
(g) Taxes. In the event that it is claimed by any Governmental Authority
or subdivision that any tax or governmental charge or imposition is due, unpaid
or payable by Owner upon or in connection with the Ground Lease, (i) Borrower
shall promptly either pay such tax, charge or imposition when due and deliver to
Agent reasonably satisfactory proof of payment thereof or (ii) Owner shall
contest such tax in accordance with the applicable provisions of this Agreement.
If liability for such tax is asserted against Agent, Agent will give to Owner
prompt notice of such claim, and Owner, upon complying with the provisions of
this Agreement shall have full right and authority to contest such claim of
taxability.
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ARTICLE VI
EVENTS OF DEFAULT
Section 6.01 Events of Default. An Event of Default shall exist upon the
occurrence of any of the following specified events (each an "Event of
Default"):
(a) Payment Default. The Borrower shall fail to pay any principal on any
Loan or Revolving Note when due (whether at maturity, by reason of acceleration
or otherwise) in accordance with the terms thereof or hereof; or the Borrower
shall fail to pay any interest on any Loan or Revolving Note or any fee or other
amount payable hereunder when due (whether at maturity, by reason of
acceleration or otherwise) in accordance with the terms thereof or hereof.
(b) Misrepresentation. Any representation or warranty made or deemed made
herein, in the Security Documents or in any of the other Loan Documents or which
is contained in any certificate, document or financial or other statement
furnished at any time under or in connection with this Agreement shall prove to
have been incorrect, false or misleading in any material respect on or as of the
date made or deemed made.
(c) Covenant Default. (i) The Borrower shall fail to perform, comply with
or observe any term, covenant or agreement applicable to it contained in Article
V hereof; or (ii) the Borrower shall fail to comply with any other covenant
contained in this Agreement or the other Loan Documents or any other agreement,
document or instrument among the Borrower, the Administrative Agent and the
Lenders or executed by the Borrower in favor of the Administrative Agent or the
Lenders (other than as described in Sections 6.01(a) or 6.01(c)(i)), and such
breach or failure to comply is not cured within thirty (30) days after receipt
of notice thereof.
(d) Debt Cross-Default. (i) (A) The occurrence of a default or an event of
default under any Wachovia Indebtedness, (ii) the Borrower shall fail to pay
beyond any applicable grace period (not to exceed five (5) Business Days), a
matured obligation of at least $5,000,000 on any Indebtedness (other than
Loans); (iii) the Borrower shall default in the observance or performance of any
other agreement or condition relating to any Indebtedness (other than the Loans)
or contained in any instrument or agreement evidencing, securing or relating
thereto, or any other event shall occur or condition exist, the effect of which
default or other event or condition is to cause, or to permit the holder or
holders of such Indebtedness or beneficiary or beneficiaries of such
Indebtedness (or a trustee or agent on behalf of such holder or holders or
beneficiary or beneficiaries) to cause, with the giving of notice if required,
such Indebtedness to become due prior to its stated maturity if the aggregate
amount of such Indebtedness is at least $5,000,000.
(e) Other Cross-Defaults. The Borrower or any of its Subsidiaries shall
default in the payment when due or in the performance or observance of any
obligation or condition of any Material Contract and such failure to pay or
perform or observe such other obligation or condition (i) involves the failure
to pay a matured obligation of at least $5,000,000, or (ii) permits the
acceleration of the maturity of obligations by any other party to or beneficiary
of such contract if the aggregate amount of such obligations is at least
$5,000,000, and continues unremedied for a period of five (5) Business Days
after notice of the occurrence of such default.
(f) Bankruptcy Default. (i) The Borrower shall commence any case,
proceeding or other action (A) under any existing or future law of any
jurisdiction, domestic or foreign, relating to bankruptcy, insolvency,
reorganization or relief of debtors, seeking to have an order for relief entered
with respect to it, or seeking to have it judged bankrupt or insolvent, or
seeking reorganization, arrangement, adjustment, winding-up, liquidation,
dissolution, composition or other relief with respect to it or its debts, or (B)
seeking appointment of a receiver, trustee, custodian, conservator or other
similar official for it or for all or any substantial part of its assets, or the
Borrower shall make a general assignment for the benefit of creditors; or (ii)
there shall be commenced against the Borrower any case, proceeding or other
action of a nature referred to in clause (i) above which (A) results in the
entry of an order for relief or any such adjudication or appointment or (B)
remains undismissed, undischarged or unbonded for a period of 60 days; or (iii)
there shall be commenced against the Borrower any case, proceeding or other
action seeking issuance of a warrant of attachment, execution, distraint or
similar process against all or any substantial part of its assets which results
in the entry of an order for any such relief which shall not have been vacated,
discharged, or stayed or bonded pending appeal within 60 days from the entry
thereof; or (iv) the Borrower shall take any action in furtherance of, or
indicating its consent to, approval of, or acquiescence in, any of the acts set
forth in clause (i), (ii) or (iii) above; or (v) the Borrower shall generally
not, or shall be unable to, or shall admit in writing its inability to, pay its
debts as they become due.
(g) Judgment Default. One or more judgments, orders, decrees or
arbitration awards shall be entered against the Borrower or any of its
Subsidiaries (and, solely with respect to the Borrower and not in respect of its
Subsidiaries, involving in the aggregate a liability (to the extent not paid
when due or covered by insurance) of more than $5,000,000 (or solely with
respect to any Subsidiary and not in respect of the Borrower, involving a
liability of more than $2,000,000)) and all such judgments, orders, decrees or
arbitration awards shall not have been paid and satisfied, vacated, discharged,
stayed or bonded pending appeal within ninety (90) days from the entry thereof.
(h) ERISA Default. (i) Any Person shall engage in any "prohibited
transaction" (as defined in Section 406 of ERISA or Section 4975 of the Code)
involving any Plan, (ii) any material "accumulated funding deficiency" (as
defined in Section 302 of ERISA), whether or not waived, shall exist with
respect to any Plan or any Lien in favor of the PBGC or a Plan shall arise on
the assets of the Borrower, any of its Subsidiaries or any ERISA Affiliate,
(iii) a Reportable Event shall occur with respect to, or proceedings shall
commence to have a trustee appointed, or a trustee shall be appointed, to
administer or to terminate, any Single Employer Plan, which Reportable Event or
commencement of proceedings or appointment of a Trustee is, in the reasonable
opinion of the Requisite Lenders, likely to result in the termination of such
Plan for purposes of Title IV of ERISA, (iv) any Single Employer Plan shall
terminate for purposes of Title IV of ERISA, (v) the Borrower, any of its
Subsidiaries or any ERISA Affiliate shall, or in the reasonable opinion of the
Requisite Lenders is likely to, incur any liability in connection with a
withdrawal from, or the insolvency or reorganization of, any Multiemployer Plan
or (vi) any other similar event or condition shall occur or exist with respect
to a Plan; and in each case in clauses (i) through (vi) above, such event or
condition, together with all other such events or conditions, if any, could
reasonably be expected to have a Material Adverse Effect.
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(i) Change of Control. A Change of Control shall have occurred.
(j) Failure of Loan Documents. This Agreement or any other Loan Document
or any provision hereof or thereof shall cease to be in full force and effect or
to give the Administrative Agent and/or the Lenders the security interests,
liens, rights, powers and privileges purported to be created thereby, or the
Borrower or any Person acting by or on behalf of the Borrower shall deny or
disaffirm such Person's obligations under this Agreement or any other Loan
Document.
(k) REIT Status. Caplease shall at any time during the term hereof fail to
maintain its status as a REIT.
(l) Public Listing. Caplease shall at any time during the term hereof no
longer be listed as a public company on the New York Stock Exchange.
provided, however, a market disruption of conditions in the market for
commercial real estate warehouse facilities or the financial, banking, or
capital markets shall not independently constitute an Event of Default
hereunder.
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Section 6.02 Acceleration; Remedies. Upon the occurrence and during the
continuation of an Event of Default, then, and in any such event, (a) if such
event is an Event of Default specified in Section 6.01(f) above, automatically
the Revolving Commitments shall immediately terminate and the Loans (with
accrued interest thereon), and all other amounts under the Loan Documents shall
immediately become due and payable, and (b) if such event is any other Event of
Default, subject to the terms of Section 6.03, with the written consent of the
Requisite Lenders, the Administrative Agent may, or upon the written request of
the Requisite Lenders, the Administrative Agent shall, take any or all of the
following actions: (i) by notice to the Borrower declare the Revolving
Commitments to be terminated forthwith, whereupon the Revolving Commitments
shall immediately terminate; (ii) by notice of default to the Borrower declare
the Loans (with accrued interest thereon) and all other amounts owing under this
Agreement and the Revolving Notes to be due and payable forthwith and/or (iii)
exercise on behalf of the Lenders all of its other rights and remedies under
this Agreement, the other Loan Documents and applicable law. Except as expressly
provided above in this Section 6.02, presentment, demand, protest and all other
notices of any kind are hereby expressly waived by the Borrower.
Section 6.03 Notice of Default. The Administrative Agent shall not be
deemed to have knowledge or notice of the occurrence of any Default or Event of
Default hereunder unless the Administrative Agent has received notice from a
Lender or the Borrower referring to this Agreement, describing such Default or
Event of Default and stating that such notice is a "notice of default." In the
event that the Administrative Agent receives such a notice, the Administrative
Agent shall give prompt notice thereof to the Lenders. The Administrative Agent
shall take such action with respect to such Default or Event of Default as shall
be reasonably directed by the Requisite Lenders; provided, however, that unless
and until the Administrative Agent shall have received such directions, the
Administrative Agent may (but shall not be obligated to) take such action, or
refrain from taking such action, with respect to such Default or Event of
Default as it shall deem advisable in the best interests of the Lenders except
to the extent that this Agreement expressly requires that such action be taken,
or not taken, only with the consent or upon the authorization of the Requisite
Lenders, or all of the Lenders, as the case may be.
Section 6.04 Non-Reliance on Administrative Agent and Other Lenders. Each
Lender expressly acknowledges that neither the Administrative Agent nor any of
its Affiliates has made any representation or warranty to it and that no act by
the Administrative Agent hereinafter 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 Lender. Each Lender represents to the
Administrative Agent that it has, independently and without reliance upon the
Administrative Agent or any other Lender, and based on such documents and
information as it has deemed appropriate, made its own appraisal of and
investigation into the business, operations, property, financial and other
condition and creditworthiness of the Borrower and made its own decision to make
its Loans hereunder and enter into this Agreement. Each Lender also represents
that it will, independently and without reliance upon the Administrative Agent
or any other Lender, and based on such documents and information as it shall
deem appropriate at the time, continue to make its own credit analysis,
appraisals and decisions in taking or not taking action under this Agreement,
and to make such investigation as it deems necessary to inform itself as to the
business, operations, property, financial and other condition and
creditworthiness of the Borrower. Except for notices, reports and other
documents expressly required to be furnished to the Lenders by the
Administrative Agent hereunder, the Administrative Agent shall not have any duty
or responsibility to provide any Lender with any credit or other information
concerning the business, operations, property, condition (financial or
otherwise), prospects or creditworthiness of the Borrower which may come into
the possession of the Administrative Agent or any of its Affiliates.
Section 6.05 Indemnification. The Lenders agree to indemnify the Agent in
its capacity hereunder (to the extent not reimbursed by the Borrower and without
limiting the obligation of the Borrower to do so), ratably according to their
respective Revolving Commitment Percentages in effect on the date on which
indemnification is sought under this Section, from and against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements of any kind whatsoever which may at any time
(including, without limitation, at any time following the payment of the
Revolving Notes be imposed on, incurred by or asserted against the Agent in any
way relating to or arising out of any Loan Document or any documents
contemplated by or referred to herein or therein or the transactions
contemplated hereby or thereby or any action taken or omitted by the Agent under
or in connection with any of the foregoing; provided, however, that no Lender
shall be liable for the payment of any portion of such liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements to the extent resulting from the Agent's gross negligence or
willful misconduct, as determined by a court of competent jurisdiction. The
agreements in this Section 6.05 shall survive the termination of this Agreement
and payment of the Revolving Notes, and all other amounts payable hereunder.
Section 6.06 The Administrative Agent in Its Individual Capacity. The
Administrative Agent and its affiliates may make loans to, accept deposits from
and generally engage in any kind of business with the Borrower as though the
Administrative Agent were not the Administrative Agent hereunder. With respect
to the Loans made or renewed by it and any Revolving Note issued to it, the
Administrative Agent shall have the same rights and powers under this Agreement
as any Lender and may exercise the same as though it were not the Administrative
Agent, and the terms "Lender" and "Lenders" shall include the Administrative
Agent in its individual capacity.
Section 6.07 Successor Administrative Agent. The Administrative Agent may
resign as Administrative Agent upon 30 days' prior written notice to the
Borrower and the Lenders provided there exists at such time Lenders other than
the Initial Lender. If the Administrative Agent shall resign as Administrative
Agent under this Agreement and the other Loan Documents, then the Requisite
Lenders shall appoint from among the Lenders a successor administrative agent
for the Lenders, which successor agent shall be approved by the Borrower (such
approval not to be unreasonably withheld) so long as no Default or Event of
Default has occurred and is continuing, whereupon such successor administrative
agent shall succeed to the rights, powers and duties of the Administrative
Agent, and the term "Administrative Agent" shall mean such successor
administrative agent effective upon such appointment and approval, and the
former Administrative Agent's rights, powers and duties as Administrative Agent
shall be terminated, without any other or further act or deed on the part of
such former Administrative Agent or any of the parties to this Agreement or any
holders of the Revolving Notes. If no successor Administrative Agent has
accepted appointment as Administrative Agent within thirty (30) days after the
retiring Administrative Agent's giving notice of resignation, the retiring
Administrative Agent shall have the right, on behalf of the Lenders, to appoint
a successor administrative agent, which successor shall be approved by the
Borrower (such approval not to be unreasonably withheld) so long as no Default
or Event of Default has occurred and is continuing; provided that such successor
administrative agent has minimum capital and surplus of at least $50,000,000. If
no successor administrative agent has accepted appointment as Administrative
Agent within sixty (60) days after the retiring Administrative Agent's giving
notice of resignation, the retiring Administrative Agent's resignation shall
nevertheless become effective and the Lenders shall perform all duties of the
Administrative Agent hereunder until such time, if any, as the Requisite Lenders
appoint a successor administrative agent as provided for above. After any
retiring Administrative Agent's resignation as Administrative Agent, the
indemnification provisions of this Agreement and the other Loan Documents and
the provisions of this Article VI shall inure to its benefit as to any actions
taken or omitted to be taken by it while it was Administrative Agent under this
Agreement.
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Section 6.08 Other Agents. None of the Lenders or other Persons identified
on the facing page or signature pages of this Agreement as a "syndication
agent," "documentation agent," "co-agent," "book manager," "book runner," "lead
manager," "arranger," "lead arranger" or "co-arranger" shall have any right
(except as expressly set forth herein), power, obligation, liability,
responsibility or duty under this Agreement other than, in the case of such
Lenders, those applicable to all Lenders as such. Without limiting the
foregoing, none of the Lenders or other Persons so identified shall have or be
deemed to have any fiduciary relationship with any Lender. Each Lender
acknowledges that it has not relied, and will not rely, on any of the Lenders or
other Persons so identified in deciding to enter into this Agreement or in
taking or not taking action hereunder.
ARTICLE VII
THE ADMINISTRATIVE AGENT
Section 7.01 Appointment. Each Lender hereby irrevocably designates and
appoints Initial Lender as the Administrative Agent of such Lender under this
Agreement, and each such Lender irrevocably authorizes Initial Lender, as the
Administrative Agent for such Lender, to take such action on its behalf under
the provisions of this Agreement and to exercise such powers and perform such
duties as are expressly delegated to the Administrative Agent by the terms of
this Agreement, together with such other powers as are reasonably incidental
thereto. Notwithstanding any provision to the contrary elsewhere in this
Agreement, the Administrative Agent shall not have any duties or
responsibilities, except those expressly set forth herein, or any fiduciary
relationship with any Lender, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be read into this
Agreement or otherwise exist against the Administrative Agent.
Section 7.02 Delegation of Duties. The Administrative Agent may execute
any of its duties under this Agreement by or through agents or attorneys-in-fact
and shall be entitled to advice of counsel concerning all matters pertaining to
such duties. The Administrative Agent shall not be responsible for the
negligence or misconduct of any agents or attorneys-in-fact selected by it with
reasonable care. Without limiting the foregoing, the Administrative Agent may
appoint one of its affiliates as its agent to perform the functions of the
Administrative Agent hereunder relating to the advancing of funds to the
Borrower and distribution of funds to the Lenders and to perform such other
related functions of the Administrative Agent hereunder as are reasonably
incidental to such functions.
Section 7.03 Exculpatory Provisions. Neither the Administrative Agent nor
any of its officers, directors, employees, agents, attorneys-in-fact,
Subsidiaries or affiliates shall be (a) liable for any action lawfully taken or
omitted to be taken by it or such Person under or in connection with this
Agreement (except for its or such Person's own gross negligence or willful
misconduct) or (b) responsible in any manner to any of the Lenders for any
recitals, statements, representations or warranties made by the Borrower or any
of its Subsidiaries or any officer thereof contained in this Agreement or in any
certificate, report, statement or other document referred to or provided for in,
or received by the Administrative Agent under or in connection with, this
Agreement or for the value, validity, effectiveness, genuineness, enforceability
or sufficiency of any of the Loan Documents or for any failure of the Borrower
or any of its Subsidiaries to perform its obligations hereunder or thereunder.
The Administrative Agent shall not be under any obligation to any Lender to
ascertain or to inquire as to the observance or performance by the Borrower or
any of its Subsidiaries of any of the agreements contained in, or conditions of,
this Agreement, or to inspect the properties, books or records of the Borrower
or any of its Subsidiaries.
Section 7.04 Reliance by Administrative Agent.
(a) The Administrative Agent shall be entitled to rely, and shall be fully
protected in relying, upon any note, writing, resolution, notice, consent,
certificate, affidavit, letter, cablegram, telegram, telecopy, telex or teletype
message, statement, order or other document or conversation believed by it in
good faith to be genuine and correct and to have been signed, sent or made by
the proper Person or Persons and upon advice and statements of legal counsel
(including, without limitation, counsel to the Borrower), independent
accountants and other experts selected by the Administrative Agent. The
Administrative Agent may deem and treat the payee of any Revolving Note as the
owner thereof for all purposes unless an executed Commitment Transfer Supplement
has been filed with the Administrative Agent pursuant to Section 9.03(c) with
respect to the Loans evidenced by such Revolving Note. The Administrative Agent
shall be fully justified in failing or refusing to take any action under this
Agreement unless it shall first receive such advice or concurrence of the
Requisite Lenders as it deems appropriate or it shall first be indemnified to
its satisfaction by the Lenders against any and all liability and expense which
may be incurred by it by reason of taking or continuing to take any such action.
The Administrative Agent shall in all cases be fully protected in acting, or in
refraining from acting, under any of the Loan Documents in accordance with a
request of the Requisite Lenders or all of the Lenders, as may be required under
this Agreement, and such request and any action taken or failure to act pursuant
thereto shall be binding upon all the Lenders and all future holders of the
Revolving Notes.
(b) For purposes of determining compliance with the conditions specified
in Section 3.01, each Lender that has signed this Agreement shall be deemed to
have consented to, approved or accepted or to be satisfied with, each document
or other matter required thereunder to be consented to or approved by or
acceptable or satisfactory to a Lender.
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ARTICLE VIII
RECOURSE
Section 8.01 Full Recourse Obligations.
(a) Intentionally Omitted.
(b) Intentionally Omitted.
(c) Intentionally Omitted.
(d) Borrower waives diligence, presentment, protest, demand for payment
and notice of default or nonpayment to or upon Borrower with respect to any
amounts at any time owing to the Agent or any Lender by Borrower under the Loan
Documents, other than such notices as are expressly required to be given under
this Agreement or any of the other Loan Documents. Borrower understands and
agrees that it shall continue to be liable under this Section 8.01 without
regard to (a) the validity, regularity or enforceability of any other provision
of this Agreement or any other Loan Document, any amounts at any time owing to
the Agent by the Borrower under the Loan Documents, or any other collateral
security therefor or guarantee or right of offset with respect thereto at any
time or from time to time held by Borrower, (b) any defense, set-off or
counterclaim (other than a defense of payment or performance) which may at any
time be available to or be asserted by the Borrower against the Agent, or (c)
any other circumstance whatsoever (with or without notice to or knowledge of the
Borrower) which constitutes, or might be construed to constitute, an equitable
or legal discharge of the Borrower for any amounts owing to the Agent by the
Borrower under the Loan Documents, or of the Borrower under this Agreement, in
bankruptcy or in any other instance. When pursuing its rights and remedies
hereunder against the Borrower, the Agent may, but shall be under no obligation
to, pursue such rights and remedies as it may have against the Borrower or any
other Person or against any collateral security or guarantee related thereto or
any right of offset with respect thereto, and any failure by the Agent to pursue
such other rights or remedies or to collect any payments from the Borrower or
any such other Person or to realize upon any such collateral security or
guarantee or to exercise any such right of offset, or any release of the
Borrower or any such other Person or any such collateral security, guarantee or
right of offset, shall not relieve the Borrower of any liability hereunder, and
shall not impair or affect the rights and remedies, whether express, implied or
available as a matter of law, of the Agent against the Borrower.
(e) The obligations hereunder are full recourse obligations to Borrower
and the Borrower hereby forever waives, demises, acquits and discharges any and
all defenses, and shall at no time assert or allege any defense, to the
contrary. All obligations of Caplease and Owner are joint and several.
ARTICLE IX
MISCELLANEOUS
Section 9.01 Amendments, Waivers and Release of Collateral. Neither this
Agreement, nor any of the Revolving Notes, nor any of the other Loan Documents,
nor any terms hereof or thereof may be amended, supplemented, waived or modified
except in accordance with the provisions of this Section nor may the Borrower be
released except in accordance with the provisions of this Section 9.01. The
Requisite Lenders may, or, with the written consent of the Requisite Lenders,
the Administrative Agent may, from time to time, (a) enter into with the
Borrower written amendments, supplements or modifications hereto and to the
other Loan Documents for the purpose of adding any provisions to this Agreement
or the other Loan Documents or changing in any manner the rights of the Lenders
or of the Borrower hereunder or thereunder or (b) waive, on such terms and
conditions as the Requisite Lenders may specify in such instrument, any of the
requirements of this Agreement or the other Loan Documents or any Default or
Event of Default and its consequences; provided, however, that no such waiver
and no such amendment, waiver, supplement, modification or release shall:
(a) reduce the amount or extend the scheduled date of maturity of any Loan
or Revolving Note or any installment thereon, or reduce the stated rate of any
interest or fee payable hereunder (except in connection with a waiver of
interest at the increased post-default rate which shall be determined by a vote
of the Requisite Lenders) or extend the scheduled date of any payment thereof or
increase the amount or extend the expiration date of any Lender's Revolving
Commitment, in each case without the written consent of each Lender directly
affected thereby; provided that, it is understood and agreed that no waiver,
reduction or deferral of a mandatory prepayment required pursuant to Section
2.03(b), nor any amendment of Section 2.03(b) or the definitions of Equity
Issuance, Debt Issuance or Recovery Event, shall constitute a reduction of the
amount of, or an extension of the scheduled date of, any principal installment
of any Loan or Revolving Note; or
(i) amend, modify or waive any provision of this Section 9.01 or
reduce the percentage specified in the definition of Requisite Lenders,
without the written consent of all the Lenders; or
(ii) amend, modify or waive any provision of Article VIII without
the written consent of the Administrative Agent; or
(iii) release the Borrower or any guarantor from its obligations
hereunder, without the written consent of all of the Lenders and, if
applicable, any counterparty to Interest Rate Protection Agreements; or
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(iv) release all or substantially all of the Collateral without the
written consent of all of the Lenders and any counterparty to Interest
Rate Protection Agreements; or
(v) subordinate the Loans to any other Indebtedness without the
written consent of all of the Lenders; or
(vi) permit the Borrower to assign or transfer any of its rights or
obligations under this Agreement or other Loan Documents without the
written consent of all of the Lenders; or
(vii) amend, modify or waive any provision of the Loan Documents
requiring consent, approval or request of the Requisite Lenders or all
Lenders without the written consent of the Requisite Lenders or all
Lenders, as appropriate; or
(viii) amend, modify or waive the order in which obligations are
paid in Section 2.06(b) without the written consent of each Lender
directly affected thereby; or
(ix) without the consent of Lenders having Revolving Commitment
Percentages in the aggregate more than 50% amend, modify or waive Section
3.02 or any other provision of this Agreement if the effect of such
amendment or waiver is to require Lenders to make Loans when such Lenders
would not otherwise be required to do so; or
(x) amend or modify the definition of Obligations to delete or
exclude any obligation or liability described therein without the written
consent of each Lender and each counterparty to an Interest Rate
Protection Agreement directly affected thereby;
provided, further, that no amendment, waiver or consent affecting the
rights or duties of the Administrative Agent under any Loan Document shall in
any event be effective, unless in writing and signed by the Administrative Agent
as applicable, in addition to the Lenders required hereinabove to take such
action.
Any such waiver, any such amendment, supplement or modification and any
such release shall apply equally to each of the Lenders and shall be binding
upon the Borrower, the Lenders, the Administrative Agent and all future holders
of the Revolving Notes. In the case of any waiver, the Borrower, the Lenders and
the Administrative Agent shall be restored to their former position and rights
hereunder and under the outstanding Loans and Notes and other Loan Documents,
and any Default or Event of Default waived shall be deemed to be cured and not
continuing; but no such waiver shall extend to any subsequent or other Default
or Event of Default, or impair any right consequent thereon.
Notwithstanding any of the foregoing to the contrary, the consent of the
Borrower shall not be required for any amendment, modification or waiver of the
provisions of Article VII; provided, however, that the Administrative Agent will
provide written notice to the Borrower of any such amendment, modification or
waiver. In addition, the Borrower and the Lenders hereby authorize the
Administrative Agent to modify this Agreement by unilaterally amending or
supplementing Schedule 1.01(B), which should contain a listing of all Lenders
and their respective Commitments from time to time in the manner requested by
the Borrower, the Administrative Agent or any Lender in order to reflect any
assignments or transfers of the Loans as provided for hereunder; provided,
however, that the Administrative Agent shall promptly deliver a copy of any such
modification to the Borrower and each Lender.
Notwithstanding the fact that the consent of all the Lenders is required
in certain circumstances as set forth above, (x) each Lender is entitled to vote
as such Lender sees fit on any bankruptcy reorganization plan that affects the
Loans, and each Lender acknowledges that the provisions of Section 1126(c) of
the Bankruptcy Code supersede the unanimous consent provisions set forth herein
and (y) the Requisite Lenders may consent to allow the Borrower to use cash
collateral in the context of a bankruptcy or insolvency proceeding.
Section 9.02 Survival of Representations and Warranties. All
representations and warranties made hereunder and in any document, certificate
or statement delivered pursuant hereto or in connection herewith shall survive
the execution and delivery of this Agreement and the Revolving Notes and the
making of the Loans; provided that all such representations and warranties shall
terminate on the date upon which the Revolving Commitments have been terminated
and all amounts owing hereunder and under any Revolving Notes have been paid in
full.
Section 9.03 Successors and Assigns; Participations; Purchasing Lenders. -
(a) This Agreement shall be binding upon and inure to the benefit of the
Borrower, the Lenders, the Administrative Agent, all future holders of the Notes
and their respective successors and assigns, except that the Borrower may not
assign or transfer any of its rights or obligations under this Agreement or the
other Loan Documents without the prior written consent of each Lender.
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(b) Any Lender may, in the ordinary course of its business and in
accordance with applicable law, at any time sell to one or more banks or other
entities ("Participants") participating interests in any Loan owing to such
Lender, any Revolving Note held by such Lender, any Revolving Commitment of such
Lender, or any other interest of such Lender hereunder, in each case in minimum
amounts of $5,000,000 (or, if less, the entire amount of such Lender's
obligations, Revolving Commitments or other interests). In the event of any such
sale by a Lender of participating interests to a Participant, such Lender's
obligations under this Agreement to the other parties to this Agreement shall
remain unchanged, such Lender shall remain solely responsible for the
performance thereof, such Lender shall remain the holder of any such Revolving
Note for all purposes under this Agreement, and the Borrower and the
Administrative Agent shall continue to deal solely and directly with such Lender
in connection with such Lender's rights and obligations under this Agreement. No
Lender shall transfer or grant any participation under which the Participant
shall have rights to approve any amendment to or waiver of this Agreement or any
other Loan Document except to the extent such amendment or waiver would (i)
extend the scheduled maturity of any Loan or Revolving Note or any installment
thereon in which such Participant is participating (it is understood and agreed
that no waiver, reduction or deferral of a mandatory prepayment required
pursuant to Section 2.03(b), nor any amendment of Section 2.03(b) or the
definitions of Debt Issuance or Equity Issuance shall constitute a reduction of
the amount of, or an extension of the scheduled date of, any principal
installment of any Loan or Revolving Note), or reduce the stated rate or extend
the time of payment of interest or fees thereon (except in connection with a
waiver of interest at the increased post-default rate) or reduce the principal
amount thereof, or increase the amount of the Participant's participation over
the amount thereof then in effect (it being understood that a waiver of any
Default or Event of Default shall not constitute a change in the terms of such
participation, and that an increase in any Revolving Commitment or Loan shall be
permitted without consent of a Participant if such Participant's participation
is not increased as a result thereof), (ii) release any guarantor from its
obligations hereunto, (iii) release any material portion of the Collateral, or
(iv) consent to the assignment or transfer by the Borrower of any of its rights
and obligations under this Agreement. In the case of any such participation, the
Participant shall not have any rights under this Agreement or any of the other
Loan Documents (the Participant's rights against such Lender in respect of such
participation to be those set forth in the agreement executed by such Lender in
favor of the Participant relating thereto) and all amounts payable by the
Borrower hereunder shall be determined as if such Lender had not sold such
participation; provided that each Participant shall be entitled to the benefits
of Sections 2.10, 2.11, 2.12 and 9.04 with respect to its participation in the
Revolving Commitments and the Loans outstanding from time to time; provided,
that no Participant shall be entitled to receive any greater amount pursuant to
such Sections than the transferor Lender would have been entitled to receive in
respect of the amount of the participation transferred by such transferor Lender
to such Participant had no such transfer occurred.
(c) Any Lender may, in the ordinary course of its business and in
accordance with applicable law, at any time, sell or assign to any Lender or any
affiliate thereof and with the consent of the Administrative Agent (which
consent shall not be unreasonably withheld), to one or more additional banks,
insurance companies or other financial institutions or any funds investing in
bank loans ("Purchasing Lenders"), all or any part of its rights and obligations
under this Agreement and the Revolving Notes in minimum amounts of $5,000,000
(or, if less, the entire amount of such Lender's obligations), pursuant to a
Commitment Transfer Supplement, executed by such Purchasing Lender and such
transferor Lender (and, in the case of a Purchasing Lender that is not then a
Lender or an affiliate thereof, the Administrative Agent and, so long as no
Default or Event of Default has occurred and is continuing, the Borrower), and
delivered to the Administrative Agent for its acceptance and recording in the
Register; provided, however, that any sale or assignment to an existing Lender,
an Affiliate of an existing Lender or an Approved Fund shall not require the
consent of the Administrative Agent or the Borrower nor shall any such sale or
assignment be subject to the minimum assignment amounts specified herein. Upon
such execution, delivery, acceptance and recording, from and after the Transfer
Effective Date specified in such Commitment Transfer Supplement, (x) the
Purchasing Lender thereunder shall be a party hereto and, to the extent provided
in such Commitment Transfer Supplement, have the rights and obligations of a
Lender hereunder with a Revolving Commitment as set forth therein, and (y) the
transferor Lender thereunder shall, to the extent provided in such Commitment
Transfer Supplement, be released from its obligations under this Agreement (and,
in the case of a Commitment Transfer Supplement covering all or the remaining
portion of a transferor Lender's rights and obligations under this Agreement,
such transferor Lender shall cease to be a party hereto). Such Commitment
Transfer Supplement shall be deemed to amend this Agreement to the extent, and
only to the extent, necessary to reflect the addition of such Purchasing Lender
and the resulting adjustment of Revolving Commitment Percentages arising from
the purchase by such Purchasing Lender of all or a portion of the rights and
obligations of such transferor Lender under this Agreement and the Revolving
Notes. On or prior to the Transfer Effective Date specified in such Commitment
Transfer Supplement, the Borrower, at its own expense, shall execute and deliver
to the Administrative Agent in exchange for the Revolving Notes delivered to the
Administrative Agent pursuant to such Commitment Transfer Supplement new
Revolving Notes to the order of such Purchasing Lender in an amount equal to the
Revolving Commitment assumed by it pursuant to such Commitment Transfer
Supplement and, unless the transferor Lender has not retained a Revolving
Commitment hereunder, new Revolving Notes to the order of the transferor Lender
in an amount equal to the Revolving Commitment retained by it hereunder. Such
new Revolving Notes shall be dated the Closing Date and shall otherwise be in
the form of the Revolving Notes replaced thereby. The Revolving Notes
surrendered by the transferor Lender shall be returned by the Administrative
Agent to the Borrower marked "canceled."
(d) The Administrative Agent shall maintain at its principal office a copy
of each Commitment Transfer Supplement delivered to it and a register (the
"Register") for the recordation of the names and addresses of the Lenders and
the Revolving Commitment of, and principal amount of the Loans owing to, each
Lender from time to time. The entries in the Register shall be conclusive, in
the absence of manifest error, and the Borrower, the Administrative Agent and
the Lenders may treat each Person whose name is recorded in the Register as the
owner of the Loan recorded therein for all purposes of this Agreement. The
Register shall be available for inspection by the Borrower or any Lender at any
reasonable time and from time to time upon reasonable prior notice.
(e) Upon its receipt of a duly executed Commitment Transfer Supplement,
together with payment to the Administrative Agent by the transferor Lender or
the Purchasing Lender (except for any assignment by a Lender to an Affiliate of
such Lender), as agreed between them, of a registration and processing fee of
$3,500 for each Purchasing Lender listed in such Commitment Transfer Supplement
and the Notes subject to such Commitment Transfer Supplement, the Administrative
Agent shall (i) accept such Commitment Transfer Supplement and (ii) record the
information contained therein in the Register.
(f) Borrower authorizes each Lender to disclose to any Participant or
Purchasing Lender (each, a "Transferee") and any prospective Transferee any and
all financial information in such Lender's possession concerning the Borrower
and its Affiliates which has been delivered to such Lender by or on behalf of
the Borrower pursuant to this Agreement or which has been delivered to such
Lender by or on behalf of the Borrower in connection with such Lender's credit
evaluation of the Borrower and its Affiliates prior to becoming a party to this
Agreement, in each case subject to Section 9.13.
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(g) At the time of each assignment pursuant to this Section 9.03 to a
Person which is not already a Lender hereunder and which is not a United States
person (as such term is defined in Section 7701(a)(30) of the Code) for federal
income tax purposes, the respective assignee Lender shall provide to the
Borrower and the Administrative Agent the appropriate Internal Revenue Service
Forms (and, if applicable, a 2.12 Certificate) described in Section 2.12.
(h) Nothing herein shall prohibit any Lender from pledging or assigning
any of its rights under this Agreement (including, without limitation, any right
to payment of principal and interest under any Revolving Note) to any Federal
Reserve Bank in accordance with applicable laws.
Section 9.04 Adjustments. Each Lender agrees that if any Lender (a
"Benefited Lender") shall at any time receive any payment of all or part of its
Loans, or interest thereon, or receive any collateral in respect thereof
(whether voluntarily or involuntarily, by set-off, pursuant to events or
proceedings of the nature referred to in Section 6.01(f), or otherwise) in a
greater proportion than any such payment to or collateral received by any other
Lender, if any, in respect of such other Lender's Loans, or interest thereon,
such benefited Lender shall purchase for cash from the other Lenders a
participating interest in such portion of each such other Lender's Loan, or
shall provide such other Lenders with the benefits of any such collateral, or
the proceeds thereof, as shall be necessary to cause such benefited Lender to
share the excess payment or benefits of such collateral or proceeds ratably with
each of the Lenders; provided, however, that if all or any portion of such
excess payment or benefits is thereafter recovered from such benefited Lender,
such purchase shall be rescinded, and the purchase price and benefits returned,
to the extent of such recovery, but without interest. The Borrower agrees that
each Lender so purchasing a portion of another Lender's Loans may exercise all
rights of payment (including, without limitation, rights of set-off) with
respect to such portion as fully as if such Lender were the direct holder of
such portion.
Section 9.05 Indemnification and Expenses.
(a) Borrower agrees to indemnify and hold harmless Agent, Initial Lender
and each other Lender and each of their respective affiliates and Subsidiaries
and their present and former respective officers, directors, employees, agents,
advisors and other representatives (each, an "Indemnified Party") from and
against Costs that may be incurred by or asserted or awarded against any
Indemnified Party, in each case relating to or arising out of this Agreement,
any other Loan Document or any transaction contemplated hereby or thereby, or
any amendment, supplement or modification of, or any waiver or consent under or
in respect of, this Agreement, any other Loan Document or any transaction
contemplated hereby or thereby, except for claims by an Indemnified Party
against another Indemnified Party or to the extent such Cost is found in a
final, non-appealable judgment by a court of competent jurisdiction to have
resulted from such Indemnified Party's gross negligence or willful misconduct.
In the case of an investigation, litigation or other proceeding to which the
indemnity in this Section 9.05 applies, such indemnity shall be effective
whether or not such investigation, litigation or proceeding is brought by
Borrower, its directors, shareholders or creditors or an Indemnified Party or
any other Person or any Indemnified Party is otherwise a party thereto and
whether any transaction contemplated hereby is consummated. In any suit,
proceeding or action brought by an Indemnified Party in connection with the
Eligible Asset for any sum owing thereunder, or to enforce any provisions of any
agreement relating to the Eligible Asset following a Default or Event of
Default, Borrower will save, indemnify and hold such Indemnified Party harmless
from and against all expense, loss or damage suffered by reason of any defense,
set-off, counterclaim, recoupment or reduction or liability whatsoever of the
account debtor or obligor thereunder, arising out of a breach by Borrower of any
obligation thereunder or arising out of any other agreement, indebtedness or
liability at any time owing to or in favor of such account debtor or obligor or
its successors from Borrower. Borrower also agrees to reimburse an Indemnified
Party as and when billed by such Indemnified Party for all the Indemnified
Party's actual and reasonable out-of-pocket costs and expenses incurred in
connection with the enforcement or the preservation of the Agent's rights under
this Agreement, any other Loan Document or any transaction contemplated hereby
or thereby, including without limitation the reasonable fees and disbursements
of its counsel.
(b) Borrower shall, whether any transaction contemplated hereby is
consummated: (i) pay as when billed by the Agent, and in any event within three
(3) days after demand from the Agent, all reasonable out-of-pocket costs and
expenses (including, without limitation, all actual and reasonable fees and
disbursements of outside legal counsel) (A) of the Agent in connection with, the
development, preparation, execution and delivery of, and any amendment,
supplement or modification to, this Agreement, any other Loan Document or any
other documents prepared in connection herewith or therewith and the documents
and instruments referred to herein and therein (including, without limitation,
all reasonable fees, disbursements and expenses of Dechert LLP incurred as of
the date of this Agreement) and (B) of the Agent in connection with the
enforcement of this Agreement and the other Loan Documents and any amendment,
waiver or consent relating hereto or thereto and the documents and instruments
referred to herein and therein; (ii) pay and hold the Agent harmless from and
against any and all present and future stamp, documentary, issue, sales and use,
value added, property and other similar taxes (other than taxes imposed on net
income) with respect to the matters described in foregoing clause (i) and hold
the Agent harmless from and against any and all liabilities with respect to or
resulting from any delay or omission to pay such taxes; and (iii) indemnify each
Indemnified Party from and hold each of them harmless against any and all Costs
incurred by any of them as a result of, or arising out of, or in any way related
to, or by reason of, the use of the proceeds of any transaction hereunder or the
consummation of any transactions contemplated herein or in any other Loan
Document, including, without limitation, any environmental liabilities with
respect to any real estate or other assets held by the Borrower or any of its
Affiliates (but excluding any such Costs to the extent incurred by reason of the
gross negligence or willful misconduct of the Person to be indemnified).
(c) Without prejudice to the survival of any other agreement of Borrower
hereunder, the agreements and obligations of Borrower contained in this Section
9.05 shall survive the repayment of all amounts owing to the Agent by the
Borrower under the Loan Documents and the termination of the commitment of the
Agent hereunder, for a period not to exceed, for any claim or potential claim
under this Section 9.05, the applicable statute of limitations for such claim.
Section 9.06 Notices and Other Communications. Except as otherwise
expressly permitted by this Agreement, all notices, requests and other
communications provided for herein (including without limitation any
modifications of, or waivers, requests or consents under, this Agreement) shall
be given or made in writing (including without limitation by email, telex or
telecopy) delivered to the intended recipient at the "Address for Notices"
specified below its name on the signature pages hereof or thereof); or, as to
any party, at such other address as shall be designated by such party in a
written notice to each other party. Except as otherwise provided in this
Agreement and except for notices given under Article III (which shall be
effective only on receipt), all such communications shall be deemed to have been
duly given when transmitted by facsimile transmission or telecopy (upon receipt
of confirmation) or personally delivered or, in the case of a mailed notice,
upon receipt.
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Section 9.07 Entire Agreement; Severability. This Agreement together with
the other Loan Documents constitute the entire understanding among the Borrower,
the Agent and the Initial Lender with respect to the subject matter it covers
and shall supersede any existing agreements between the parties with respect to
the subject matter hereto. By acceptance of this Agreement, the parties
acknowledge that they have not made, and are not relying upon, any statements,
representations, promises or undertakings not contained in this Agreement. Each
provision and agreement herein shall be treated as separate and independent from
any other provision or agreement herein and shall be enforceable notwithstanding
the unenforceability of any such other provision or agreement.
Section 9.08 GOVERNING LAW. THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS
AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER AND THEREUNDER SHALL BE
GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE
STATE OF NEW YORK.
Section 9.09 SUBMISSION TO JURISDICTION; VENUE; WAIVER OF JURY TRIAL. -
(A) ANY LEGAL ACTION OR PROCEEDING AGAINST THE BORROWER WITH RESPECT TO
THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT TO WHICH THE BORROWER IS A PARTY MAY
BE BROUGHT IN THE COURTS OF THE STATE OF NEW YORK OR OF THE UNITED STATES FOR
THE SOUTHERN DISTRICT OF NEW YORK, AND, BY EXECUTION AND DELIVERY OF THIS
AGREEMENT, BORROWER HEREBY IRREVOCABLY ACCEPTS FOR ITSELF AND IN RESPECT OF ITS
PROPERTY, GENERALLY AND UNCONDITIONALLY, THE JURISDICTION OF THE AFORESAID
COURTS. BORROWER IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS OUT OF ANY OF
THE AFOREMENTIONED COURTS IN ANY SUCH ACTION OR PROCEEDING BY THE MAILING OF
COPIES THEREOF BY REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, TO BORROWER AT
ITS ADDRESS AS SHOWN ON THE SIGNATURE PAGE OF THIS AGREEMENT, SUCH SERVICE TO
BECOME EFFECTIVE FIVE (5) DAYS AFTER SUCH MAILING. NOTHING HEREIN SHALL AFFECT
THE RIGHT OF THE AGENT TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR
TO COMMENCE LEGAL PROCEEDINGS OR OTHERWISE PROCEED AGAINST BORROWER IN ANY OTHER
JURISDICTION.
(B) 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 IN CLAUSE (A) ABOVE AND HEREBY
FURTHER IRREVOCABLY WAIVES AND AGREES NOT TO PLEAD OR CLAIM IN ANY SUCH COURT
THAT ANY SUCH ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN
AN INCONVENIENT FORUM.
(C) EACH OF THE PARTIES TO THIS AGREEMENT HEREBY WAIVES ITS RESPECTIVE
RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT
OF THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS OR ANY DEALINGS, COURSE OF
DEALINGS, COURSE OF CONDUCT BETWEEN THEM, OR ANY STATEMENTS (WHETHER ORAL OR
WRITTEN) OR OTHER ACTIONS OF ANY PARTY, RELATING TO THE SUBJECT MATTER OF THIS
AGREEMENT OR THE RELATIONSHIP THAT IS BEING ESTABLISHED HEREBY, INCLUDING,
WITHOUT LIMITATION, ANY ACTION OF THE AGENT RELATING TO THE ADMINISTRATION OR
THE ENFORCEMENT OF THE LOAN DOCUMENTS, AND NONE OF THE PARTIES HERETO WILL SEEK
TO CONSOLIDATE ANY SUCH ACTION WITH ANY OTHER ACTION IN WHICH A JURY TRIAL,
CANNOT BE OR HAS NOT BEEN WAIVED.
(D) EXCEPT AS PROHIBITED BY LAW, BORROWER HEREBY WAIVES ANY RIGHT IT MAY
HAVE TO CLAIM OR RECOVER IN ANY LITIGATION ANY SPECIAL, EXEMPLARY, PUNITIVE OR
CONSEQUENTIAL DAMAGES OR ANY DAMAGES OTHER THAN, OR IN ADDITION TO, ACTUAL
DAMAGES. BORROWER CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF THE
AGENT OR THE INITIAL LENDER HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT THE
AGENT WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING
WAIVER. THE SCOPE OF THIS WAIVER IS INTENDED TO BE ALL ENCOMPASSING OF ANY AND
ALL DISPUTES THAT MAY BE FILED IN ANY COURT AND THAT RELATE TO THE SUBJECT
MATTER OF THIS TRANSACTION, INCLUDING WITHOUT LIMITATION CONTRACT CLAIMS, TORT
CLAIMS, BREACH OF DUTY CLAIMS AND ALL OTHER COMMON LAW AND STATUTORY CLAIMS.
(E) EACH PARTY HERETO ACKNOWLEDGES THAT THIS WAIVER IS A MATERIAL
INDUCEMENT TO ENTER INTO A BUSINESS RELATIONSHIP, THAT EACH HAS ALREADY RELIED
ON THIS WAIVER IN ENTERING INTO THIS AGREEMENT, AND THAT EACH WILL CONTINUE TO
RELY ON THIS WAIVER IN THEIR RELATED FUTURE DEALINGS. EACH PARTY HERETO FURTHER
WARRANTS AND REPRESENTS THAT IT HAS REVIEWED THIS WAIVER WITH ITS LEGAL COUNSEL
AND THAT IT KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING
CONSULTATION WITH LEGAL COUNSEL.
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(F) THIS WAIVER IS IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED EITHER
ORALLY OR IN WRITING, AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS,
RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT OR ANY OF THE OTHER
LOAN DOCUMENTS OR TO ANY OTHER DOCUMENTS OR AGREEMENTS RELATING TO ANY
TRANSACTIONS CONTEMPLATED HEREBY OR ENTERED INTO HEREUNDER. IN THE EVENT OF
LITIGATION, THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE
COURT.
Section 9.10 Periodic Due Diligence Review. Borrower acknowledges that the
Agent has the right to perform continuing due diligence reviews with respect to
the Eligible Asset, and the Borrower agrees that upon reasonable (but no less
than three (3) Business Days) prior notice unless an Event of Default shall have
occurred and be continuing, in which case no notice is required, to the
Borrower, the Agent or its authorized representatives will be permitted during
normal business hours to inspect any Eligible Asset and examine, inspect, and
make copies and extracts of, the Eligible Asset Files and any and all documents,
records, agreements, instruments or information relating to such Eligible Asset
in the possession or under the control of Borrower or its Subsidiaries. Borrower
also shall make available to the Agent a knowledgeable financial or accounting
officer for the purpose of answering questions respecting the Eligible Asset
Files and the Eligible Asset.
Section 9.11 Intentionally Omitted.
Section 9.12 Legal Matters.
(a) If there is any conflict between the terms of this Agreement or any
other Loan Document this Agreement shall prevail.
(b) This Agreement may be executed in any number of counterparts, all of
which taken together shall constitute one and the same instrument, and any of
the parties hereto may execute this Agreement by signing any such counterpart.
(c) The captions and headings appearing herein are for included solely for
convenience of reference and are not intended to affect the interpretation of
any provision of this Agreement.
(d) Borrower hereby acknowledges that:
(i) it has been advised by counsel in the negotiation, execution and
delivery of this Agreement and the other Loan Documents;
(ii) neither the Agent nor the Initial Lender has any fiduciary
relationship to Borrower; and
(iii) no joint venture exists between the Agent or the Initial
Lender, on the one hand, and the Borrower, on the other hand.
Section 9.13 Confidentiality. Borrower and the Agent hereby acknowledge
and agree that all information regarding the terms set forth in any of the Loan
Documents (the "Confidential Terms") shall be kept confidential and shall not be
divulged to any party without the prior written consent of such other party
except to the extent that (i) it is necessary to do so in working with legal
counsel, auditors, taxing authorities or other governmental agencies or
regulatory bodies or in order to comply with any applicable federal or state
laws and regulations including, without limitation, federal securities laws and
regulations applicable to Borrower or its respective Affiliates, (ii) any of the
Confidential Terms are in the public domain other than due to a breach of this
covenant, or (iii) in the event of a Default or an Event of Default, the Agent
determines such information to be necessary or desirable to disclose in
connection with the enforcing or exercising the Agent's rights hereunder;
provided that nothing herein shall prevent any party from disclosing any such
information (i) to any other party to this Agreement, (ii) to any Transferee or
potential Transferee which agrees to comply with the provisions of this Section,
or (iii) to its Affiliates, employees, directors, agents, attorneys, accountants
and other professional advisors or other Persons deemed necessary or appropriate
in the reasonable judgment of the disclosing party, in each case who are made
aware of and instructed to comply with the provisions of this Section 9.13; and,
provided, further that no disclosure made with respect to any Loan Document
shall include a copy of such Loan Document to the extent that a summary would
suffice in lieu thereof and in the event that it is necessary for a copy of any
Loan Document to be disclosed, the specific terms set forth in such Loan
Document with respect to fees, pricing, advance rates, financial covenants and
the like shall be redacted therefrom prior to disclosure of such Loan Document
unless otherwise explicitly required to comply with any laws or regulations. The
provisions set forth in this section shall survive the termination of this
Agreement for a period of one year following such termination.
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Section 9.14 Right of Set-off. In addition to any rights now or hereafter
granted under applicable law or otherwise, and not by way of limitation of such
rights, Borrower hereby grants to the Agent and the Lenders a right of offset,
to secure repayment of all amounts owing to the Agent and the Lenders by the
Borrower under the Loan Documents, upon any and all monies, securities,
collateral or other property of Borrower and the proceeds therefrom, now or
hereafter held or received by the Agent, the Lenders or any entity under the
control of the Agent or the Lenders and their respective successors and assigns
(including, without limitation, branches and agencies of the Agent, or Lenders
wherever located), for the account of Borrower, whether for safekeeping,
custody, pledge, transmission, collection, or otherwise, and also upon any and
all deposits (general or specified) and credits of Borrower at any time
existing. The Agent and each Lender is hereby authorized at any time and from
time to time upon the occurrence and during the continuance of an Event of
Default, without notice to the Borrower, to offset, appropriate, apply and
enforce such right of offset against any and all items hereinabove referred to
against any amounts owing to the Agent or Lenders by the Borrower under the Loan
Documents, irrespective of whether the Agent or Lenders shall have made any
demand hereunder and regardless of any other collateral securing such amounts.
Borrower shall be deemed directly indebted to the Agent and each Lender in the
full amount of all amounts owing to the Agent and the Lenders by the Borrower
under this Agreement, the Notes and the other Loan Documents, and the Agent and
Lenders shall be entitled to exercise the rights of offset provided for above.
ANY AND ALL RIGHTS TO REQUIRE THE AGENT OR LENDERS TO EXERCISE THEIR RIGHTS OR
REMEDIES WITH RESPECT TO ANY OTHER COLLATERAL WHICH SECURES THE AMOUNTS OWING TO
THE AGENT OR LENDERS BY THE BORROWER UNDER THE LOAN DOCUMENTS, PRIOR TO
EXERCISING ITS RIGHT OF OFFSET WITH RESPECT TO SUCH MONIES, SECURITIES,
COLLATERAL, DEPOSITS, CREDITS OR OTHER PROPERTY OF THE BORROWER, ARE HEREBY
KNOWINGLY, VOLUNTARILY AND IRREVOCABLY WAIVED BY BORROWER.
Section 9.15 Treatment of Certain Information. Notwithstanding anything to
the contrary contained herein or in any related document, all Persons may
disclose to any and all Persons, without limitation of any kind, the federal
income tax treatment of any of the transactions contemplated by this Agreement,
the other Loan Documents or any other related document, any fact relevant to
understanding the federal tax treatment of such transactions and all materials
of any kind (including opinions or other tax analyses) relating to such federal
income tax treatment.
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IN WITNESS WHEREOF, the parties have entered into this Agreement as of the
date set forth above.
BORROWER
CAPITAL LEASE FUNDING, INC.
By: /s/ Xxxxxx X. Xxxxx
-------------------------------------------
Name: Xxxxxx X. Xxxxx
-----------------------------------------
Title: Senior Vice President
----------------------------------------
PREFCO II LIMITED PARTNERSHIP
By: PREFCO II GP LLC, its sole general partner
By: /s/ Xxxxxx X. Xxxxx
-------------------------------------------
Name: Xxxxxx X. Xxxxx
-----------------------------------------
Title: Senior Vice President
----------------------------------------
Address for Notices:
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, XX 00000
Attn: Xxxx X. XxXxxxxx
Facsimile No. (000) 000-0000
ADMINISTRATIVE AGENT
WACHOVIA BANK, NATIONAL ASSOCIATION
By: /s/ Xxxx Xxxxxx
-------------------------------------------
Name: Xxxx Xxxxxx
-----------------------------------------
Title: Director
----------------------------------------
Address for Notices:
000 Xxxxx Xxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Attn: R. Xxxxxx Xxxx
Facsimile No.: (000) 000-0000
INITIAL LENDER
WACHOVIA BANK, NATIONAL ASSOCIATION
By: /s/ Xxxx Xxxxxx
-------------------------------------------
Name: Xxxx Xxxxxx
-----------------------------------------
Title: Director
----------------------------------------
Address for Notices:
000 Xxxxx Xxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Attn: R. Xxxxxx Xxxx
Facsimile No.: (000) 000-0000
