EXHIBIT 10.3
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REVOLVING CREDIT AGREEMENT
dated as of February 1, 2000
among
REALTY INCOME CORPORATION,
THE BANKS NAMED HEREIN,
and
BANK OF MONTREAL,
as Agent
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TABLE OF CONTENTS
Section Heading Page
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ARTICLE I DEFINITIONS.................................... 4
Section 1.01 Definitions.................................... 4
ARTICLE II THE LOANS...................................... 20
Section 2.01 The Loans...................................... 20
Section 2.02 Procedure for Pro Rata Loans................... 20
Section 2.03 Pro Rata Notes................................. 21
Section 2.04 Certain Fees................................... 22
Section 2.05 Cancellation or Reduction of the Commitment.... 22
Section 2.06 Optional Prepayment............................ 22
Section 2.07 Mandatory Prepayment........................... 23
ARTICLE III INTEREST, METHOD OF PAYMENT, CONVERSION, ETC... 24
Section 3.01 Procedure for Interest Rate Determination...... 24
Section 3.02 Interest on ABR Loans.......................... 24
Section 3.03 Interest on Eurodollar Loans................... 24
Section 3.04 Conversion/Continuance......................... 25
Section 3.05 Post Default Interest.......................... 25
Section 3.06 Maximum Interest Rate.......................... 26
ARTICLE IV DISBURSEMENT AND PAYMENT....................... 26
Section 4.01 Pro Rata Treatment............................. 26
Section 4.02 Method of Payment.............................. 26
Section 4.03 Compensation for Losses........................ 26
Section 4.04 Withholding, Reserves and Additional Costs..... 27
Section 4.05 Unavailability................................. 32
ARTICLE V REPRESENTATIONS AND WARRANTIES................. 33
Section 5.01 Representations and Warranties................. 33
ARTICLE VI CONDITIONS OF LENDING.......................... 40
Section 6.01 Conditions to the Availability of the
Commitment................................... 40
Section 6.02 Conditions to All Loans........................ 41
ARTICLE VII COVENANTS...................................... 42
Section 7.01 Affirmative Covenants.......................... 42
Section 7.02 Negative Covenants............................. 47
Section 7.03 Financial Covenants............................ 51
ARTICLE VIII EVENTS OF DEFAULT.............................. 52
Section 8.01 Events of Default.............................. 52
(table continued next page)
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(table continued
Section Heading Page
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ARTICLE IX THE AGENT AND THE BANKS........................ 55
Section 9.01 The Agency..................................... 55
Section 9.02 The Agent's Duties............................. 55
Section 9.03 Sharing of Payment and Expenses................ 55
Section 9.04 The Agent's Liabilities........................ 56
Section 9.05 The Agent as a Bank............................ 56
Section 9.06 Bank Credit Decision........................... 56
Section 9.07 Indemnification................................ 57
Section 9.08 Successor Agent................................ 57
ARTICLE X CONSENT TO JURISDICTION........................ 58
Section 10.01 Consent to Jurisdiction........................ 58
ARTICLE XI MISCELLANEOUS.................................. 58
Section 11.01 Applicable Law................................. 58
Section 11.02 Set-off........................................ 58
Section 11.03 Expenses....................................... 59
Section 11.04 Amendments..................................... 59
Section 11.05 Cumulative Rights and No Waiver................ 59
Section 11.06 Notices........................................ 60
Section 11.07 Separability................................... 60
Section 11.08 Assignments and Participations................. 60
Section 11.09 Waiver of Jury Trial........................... 62
Section 11.10 Confidentiality................................ 62
Section 11.11 Indemnity...................................... 62
Section 11.12 Extension of Termination Dates; Removal of
Banks; Substitutions of Banks................ 63
Section 11.13 Knowledge of the Company....................... 65
Section 11.14 Execution in Counterparts...................... 65
EXHIBIT A Form of Conversion/Continuance Request......... 67
EXHIBIT B Form of Pro Rata Loan Request.................. 68
EXHIBIT C-1 Form of Pro Rata Note.......................... 69
EXHIBIT D-1 Form of Opinion of Xxxxxx & Xxxxxxx............ 72
EXHIBIT D-2 Form of Opinion of Xxxxxxx X. Xxxxxxxx, Esq.... 75
EXHIBIT E Form of Property Management Exception Report... 78
EXHIBIT F Real Estate Investment Criteria................ 79
EXHIBIT G Form of Subsidiary Guaranty.................... 80
SCHEDULE 1 Commitments.................................... 96
SCHEDULE 5.01(A) Subsidiaries and Joint Venture of the Company.. 97
SCHEDULE 5.01(Q) ERISA Liabilities.............................. 98
SCHEDULE 5.01(R) Intellectual Property.......................... 99
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REVOLVING CREDIT AGREEMENT
Revolving Credit Agreement, dated as of February 1, 2000 (this
"Agreement"), among Realty Income Corporation, a Maryland corporation
(the "Company"), each of the banks identified on the signature pages
hereof (each, a "Bank" and, collectively, the "Banks") and Bank of
Montreal, as Agent for the Banks (the "Agent").
W I T N E S S E T H:
Whereas, the Company has requested the Banks to lend up to $25,000,000
to the Company on a revolving basis for the acquisition of property in
the ordinary course of the Company's business, and for making capital
contributions (whether by loan or otherwise) to a Subsidiary for
purposes of the acquisition of property of such Subsidiary, or for
other business purposes of such Subsidiary, including related costs
and expenses and for the payment of fees and expenses incurred in
connection with this Agreement.
Now, Therefore, the parties hereby agree as follows:
ARTICLE I
DEFINITIONS
Section 1.01. Definitions. (a) Terms Generally. The definitions
ascribed to terms in this Section 1.01 and elsewhere in this Agreement
shall apply equally to both the singular and plural forms of the terms
defined. Whenever the context may require, any pronoun shall include
the corresponding masculine, feminine and neuter forms. The words
"include", "includes" and "including" shall be deemed to be followed
by the phrase "without limitation". The words "hereby", "herein",
"hereof", "hereunder" and words of similar import refer to this
Agreement as a whole (including any exhibits and schedules hereto) and
not merely to the specific section, paragraph or clause in which such
word appears. All references herein to Articles, Sections, Exhibits
and Schedules shall be deemed references to Articles and Sections of,
and Exhibits and Schedules to, this Agreement unless the context shall
otherwise require. Except as otherwise expressly provided herein, all
references to "dollars" or "$" shall be deemed references to the
lawful money of the United States of America.
(b) Accounting Terms. Except as otherwise expressly provided herein,
all terms of an accounting or financial nature shall be construed in
accordance with GAAP, as in effect from time to time; provided,
however, that, for purposes of determining compliance with any
covenant set forth in Article VII which requires financial
computations, such terms shall be construed in accordance with GAAP as
in effect on the Effective Date applied on a basis consistent with the
construction thereof applied in preparing the Company's audited
financial statements referred to in Section 5.01(h). In the event
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there shall occur a change in GAAP which but for the foregoing proviso
would affect the computation used to determine compliance with any
covenant set forth in Article VII which requires financial
computations, the Company and the Banks agree to negotiate in good
faith in an effort to agree upon an amendment to this Agreement that
will permit compliance with such covenant to be determined by
reference to GAAP as so changed while affording the Banks the
protection afforded by such covenant prior to such change (it being
understood, however, that such covenant shall remain in full force and
effect in accordance with its existing terms pending the execution by
the Company and the Banks of any such amendment).
(c) Other Terms. The following terms shall have the meanings
ascribed to them below or in the Sections of this Agreement indicated
below:
"ABR Loans" shall mean Loans which bear interest at a rate based upon
the Base Rate and in the manner set forth in Section 3.02.
"Agent" shall have the meaning given to such term in the preamble of
this Agreement and shall also include any successor agent hereunder.
"Adverse Environmental Condition" shall mean any of the matters
referred to in clauses (i) or (ii) of the definition of Environmental
Claim.
"Affiliate" shall mean, with respect to any Person, any other Person
directly or indirectly controlling, controlled by, or under direct or
indirect common control with such Person. A Person shall be deemed to
control another Person if such first Person possesses, directly or
indirectly, the power to direct or cause the direction of the
management and policies of such other Person, whether through
ownership of stock, by contract or otherwise.
"Applicable Margin" shall mean the margin set forth in the following
chart applicable to the Pricing Level then in effect:
Pricing Level Applicable LIBOR Margin
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I 0.875%
II 1.000%
III 1.125%
IV 1.225%
V 1.450%
"Pricing Level I" shall be applicable for so long as the Company's
Debt Rating is better than or equal to A-/A3; "Pricing Level II" shall
be applicable for so long as the Company's Debt Rating is lower than
A-/A3 but better than or equal to BBB+/Baal; "Pricing Level III" shall
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be applicable for so long as the Company's Debt Rating is lower than
BBB+/Baal but better than or equal to BBB/Baa2; "Pricing Level IV"
shall be applicable for so long as the Company's Debt Rating is
lower than BBB/Baa2 but better than or equal to BBB-/Baa3; "Pricing
Level V" shall be applicable for so long as the Company's Debt Rating
is lower than BBB-/Baa3, or if the Company does not have a Debt
Rating. Changes in the applicable Pricing Level shall be effective as
of the first day of the calendar quarter following a change in the
Company's Debt Rating.
"Assignee" has the meaning ascribed to such term in Section 11.08(c).
"Available Commitment" shall mean (a) on any date prior to the
Termination Date, an amount equal to the remainder of (i) the Total
Commitment on such date minus (ii) the aggregate outstanding principal
amount of Loans on such date and (b) on and after the Termination
Date, $0.
"Bank" shall have the meaning given to such term in the preamble of
this Agreement and shall also include any other financial institution
which pursuant to the provisions hereof becomes a party to this
Agreement.
"Base LIBOR" shall mean, with respect to any Eurodollar Loan for any
Interest Period, the rate appearing on Page 3750 of the Telerate
Service (or any successor or substitute page of such Service, or any
successor to or substitute for such Service, providing rate quotations
comparable to those currently provided on such page of such Service,
as determined by the Agent from time to time for purposes of providing
quotations of interest rates applicable to dollar deposits in the
London interbank market) at approximately 11:00 a.m., London time, two
Business Days prior to the commencement of such Interest Period, as
the rate for dollar deposits with a maturity comparable to such
Interest Period. In the event that such rate does not appear on such
Page 3750 (or any successor or substitute page, or any successor to or
substitute for such Service) at such time for any reason, then "Base
LIBOR" with respect to such Eurodollar Loan for such Interest Period
shall be the rate at which dollar deposits of $5,000,000 and for a
maturity comparable to such Interest Period are offered by the
principal London office of the Agent in immediately available funds in
the London interbank market at approximately 11:00 a.m., London time,
two Business Days prior to the commencement of such Interest Period.
"Base Rate" shall mean a fluctuating interest rate per annum as shall
be in effect from time to time, which rate per annum shall on any day
be equal to the higher of:
(a) the rate of interest publicly announced by the Agent from
time to time as its prime commercial loan rate in effect on
such day; and
(b) the sum of (i) 1/2 of 1% per annum and (ii) the Federal
Funds Rate.
Page 6
"Borrowing Date" shall mean the date set forth in each Loan Request as
the date upon which the Company desires to borrow Loans pursuant to
the terms of this Agreement.
"Business Day" shall mean (i) with respect to any ABR Loan or any
payment of the Facility Fee, any day except a Saturday, Sunday or
other day on which commercial banks in Chicago are authorized by law
to close and (ii) with respect to any Eurodollar Loan, any day on
which commercial banks are open for domestic and international
business (including dealings in U.S. dollar deposits) in London and
Chicago.
"Capital Lease" shall mean, with respect to any Person, any obligation
of such Person to pay rent or other amounts under a lease with respect
to any property (whether real, personal or mixed) acquired or leased
by such Person that is required to be accounted for as a liability on
a balance sheet of such Person in accordance with GAAP.
"Capital Lease Obligations" shall mean the obligation of any Person to
pay rent or other amounts under a Capital Lease.
"Change of Control" shall mean any person or group of Persons (within
the meaning of Section 13(d) or 14(d)(2) of the Securities Exchange
Act of 1934, as amended) who shall become the beneficial owner(s),
directly or indirectly, of capital stock of the Company representing
50% or more of the voting power of the Company or otherwise enabling
such Person or group of Persons to exercise effective control over the
management of the Company.
"Code" shall mean the Internal Revenue Code of 1986, as amended.
"Commitment" of any Bank shall mean, in the case of each Bank (i)
prior to any such Bank's Termination Date, the amount set forth
opposite such Bank's name under the heading "Commitment" on Schedule 1
hereto, or set forth in the assignment agreement executed by such Bank
if it is not a Bank on the date hereof, as such amount may be adjusted
from time to time pursuant to assignments of such Bank and as such
amount may be reduced from time to time pursuant to Section 2.05 and
(ii) after such Bank's Termination Date, zero.
"Compliance Date" shall mean each of the date of this Agreement, each
Borrowing Date, each Conversion Date and the date of each delivery by
the Company of a certificate requiring the Company to certify as to
the accuracy of the representations and warranties contained in
Article V.
"Consolidated Annualized Base Rent" shall mean, in respect of any
fiscal quarter, (A) the product of (i) the monthly contractual base
rents at the end of such fiscal quarter multiplied by (ii) twelve plus
(B) the previous twelve month's historical percentage rents at such
time, determined on a consolidated basis for the Company and its
Subsidiaries.
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"Consolidated Depreciation and Amortization" shall mean, at any date
of determination, "Depreciation and Amortization" or the similar item,
determined on a consolidated basis for the Company and its
Subsidiaries, as shown on the most recent consolidated statement of
income for the Company and its Subsidiaries which has been delivered
to the Agent pursuant to Section 7.01(a).
"Consolidated Funds from Operations" shall mean, for any period,
Consolidated Net Income, after dividends on preferred stock, excluding
gain or loss from debt restructurings or sales of properties plus
provision for impairment losses, plus Consolidated Depreciation and
Amortization, and after adjustments for unconsolidated partnerships
and joint ventures, determined on a consolidated basis for the Company
and its Subsidiaries, as shown on the most recent consolidated
statement of cash flow for the Company and its Subsidiaries which has
been delivered to the Agent pursuant to Section 7.01(a).
"Consolidated Interest Expense" shall mean, for any period, total
interest expense (including that attributable to Capital Leases in
accordance with GAAP) of the Company and its Subsidiaries, determined
on a consolidated basis, in accordance with GAAP with respect to all
outstanding Indebtedness of the Company and its Subsidiaries,
including, without limitation, paid-in-kind (PIK) interest and all net
costs under Interest Rate Protection Agreements.
"Consolidated Net Income" shall mean, for any period, "Net Income" or
the similar item, determined on a consolidated basis for the Company
and its Subsidiaries, as shown on the most recent consolidated
statement of income for the Company and its Subsidiaries which has
been delivered to the Agent pursuant to Section 7.01(a).
"Consolidated Stockholders' Equity" shall mean, for any period, "Total
Stockholders' Equity" or the similar item, determined on a
consolidated basis for the Company and its subsidiaries, as shown on
the most recent consolidated balance sheet for the Company and its
Subsidiaries which has been delivered to the Agent pursuant to Section
7.01(a).
"Consolidated Tangible Stockholders' Equity" shall mean Consolidated
Stockholders' Equity less all intangible assets of the Company and its
Subsidiaries. For purposes of the foregoing, "intangible assets"
means goodwill, patents, trade names, trademarks, copyrights,
franchises, organization expenses and any other assets that are
properly classified as intangible assets in accordance with GAAP.
"Consolidated Total Assets" shall mean, at any date of determination,
"Total Assets" or the similar item, determined on a consolidated basis
for the Company and its Subsidiaries, as shown on the most recent
consolidated balance sheet for the Company and its Subsidiaries which
has been delivered to the Agent pursuant to Section 7.01(a).
Page 8
"Consolidated Total Indebtedness" shall mean total Indebtedness,
determined on a consolidated basis for the Company and its
Subsidiaries, as shown on the most recent consolidated balance sheet
for the Company and its Subsidiaries which has been delivered to the
Agent pursuant to Section 7.01(a).
"Consolidated Total Liabilities" shall mean, at any date of
determination, "Total Liabilities" or the similar item, determined on
a consolidated basis for the Company and its Subsidiaries, as shown on
the most recent consolidated balance sheet for the Company and its
Subsidiaries which has been delivered to the Agent pursuant to Section
7.01(a).
"Conversion/Continuance Date" shall mean the date on which a
conversion of interest rates on outstanding Loans, pursuant to a
Conversion/Continuance Request, shall take effect.
"Conversion/Continuance Request" shall mean a request by the Company
to convert or continue the interest rate on all or portions of
outstanding Loans pursuant to the terms hereof, which shall be
substantially in the form of Exhibit A and shall specify, with respect
to such outstanding Loans, (i) the requested Conversion/Continuance
Date, which shall be not less than three Business Days after the date
of such Conversion/Continuance Request, (ii) the aggregate amount of
the Loans, from and after the Conversion/Continuance Date, which are
to bear interest as ABR Loans or Eurodollar Loans and (iii) if any
Loans are Eurodollar Loans, the term of the Interest Periods therefor,
if any.
"Covered Tax" means any Tax that is not an Excluded Tax.
"Credit Documents" shall mean this Agreement and the Notes.
"Debt Rating" shall mean the highest rating published by at least two
of the three Rating Agencies with respect to the senior unsecured
long-term debt of the Company, provided, that if no two Rating
Agencies have published the same rating with respect to the Company's
senior unsecured debt, the Debt Rating shall be the rating that is at
the middle of the three published ratings.
"Default" shall mean any event or circumstance which, with the giving
of notice or the passage of time, or both, would become an Event of
Default.
"Effective Date" shall have the meaning ascribed to such term in
Section 6.01.
"Environmental Claim" shall mean any notice, request for information,
action, claim, order, proceeding, demand or direction (conditional or
otherwise) based on, relating to or arising out of (i) any violation
of any Environmental Law by the Company, any person acting on behalf
of the Company or any subsidiary of the Company, or (ii) any
Page 9
liabilities under any Environmental Law arising out of or otherwise in
respect of any act, omission, event, condition or circumstance
existing or occurring in connection with the Company and its
Subsidiaries, including without limitation liabilities relating to the
release of hazardous substances (whether on-site or off-site), any
claim by any third party (including, without limitation, tort suits
for personal or bodily injury, tangible or intangible property damage,
damage to the environment, nuisance and injunctive relief), fines,
penalties or restrictions, or the transportation, storage, treatment
or disposal of any Hazardous Substances.
"Environmental Law" means (i) any applicable federal, state, foreign
and local law, statute, ordinance, rule, regulation, code, license,
permit, authorization, approval, consent, legal doctrine, order,
judgment, decree, injunction, requirement or agreement with any
governmental entity, relating to (x) the protection, preservation or
restoration of the environment, (including, without limitation, air,
water vapor, surface water, groundwater, drinking water supply,
surface land, subsurface land, plant and animal life or any other
natural resource), or to human health or safety, or (y) the exposure
to, or the use, storage, recycling, treatment, generation,
transportation, processing, handling, labeling, production, release or
disposal of Hazardous Substances, in each case as amended and as now
or hereafter in effect. The term Environmental Law includes, without
limitation, the federal Comprehensive Environmental Response
Compensation and Liability Act of 1980, the Superfund Amendments and
Reauthorization Act, the federal Water Pollution Control Act of 1972,
the federal Clean Air Act, the federal Clean Water Act, the federal
Resource Conservation and Recovery Act of 1976 (including the
Hazardous and Solid Waste Amendments thereto), the federal Solid Waste
Disposal Act and the federal Toxic Substances Control Act, the Federal
Insecticide, Fungicide and Rodenticide Act and the Federal
Occupational Safety and Health Act of 1970, each as amended and as now
or hereafter in effect (collectively, "Environmental Ordinances"), and
(ii) any common law or equitable doctrine (including, without
limitation, injunctive relief and tort doctrines such as negligence,
nuisance, trespass and strict liability) that may impose liability or
obligations for injuries or damages due to, or threatened as a result
of, the presence of or exposure to any Hazardous Substance.
"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended from time to time.
"ERISA Affiliate" shall mean a corporation, partnership or other
entity which is considered one employer with the Company under Section
4001 of ERISA or Section 414 (b), (c), (m) or (o) of the Code.
"Eurodollar Loans" means, collectively, Eurodollar Pro Rata Loans.
"Eurodollar Pro Rata Loans" shall mean Pro Rata Loans which bear
interest at a rate based upon Base LIBOR and in the manner set forth
in Section 3.03.
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"Eurodollar Reserve Percentage" shall mean for any day, that
percentage, expressed as a decimal, which is in effect on such day, as
prescribed by the Board of Governors of the Federal Reserve System (or
any successor) for determining the maximum reserve requirement
(including any marginal, supplemental or emergency reserve
requirements) for a member bank of the Federal Reserve System in
Chicago with deposits exceeding one billion dollars in respect of
eurocurrency funding liabilities. LIBOR shall be adjusted
automatically on and as of the effective date of any change in the
Eurodollar Reserve Percentage.
"Event of Default" shall mean any of the events described in Section
8.01.
"Excluded Asset Sales" shall mean, in respect of each fiscal year, the
sale, lease (not entered into in the ordinary course of business),
transfer or disposal during such year of assets, the aggregate
proceeds of which, in one or more transactions, are less than
$50,000,000.
"Excluded Tax" means, in respect of any Bank, Participant, Assignee or
the Agent, as the case may be, any of the following taxes, levies,
imposts, duties, deductions, withholdings or charges, and all
liabilities with respect thereto: (i) Taxes imposed on the net income
of a Bank, the Agent, Participant or Assignee (including without
limitation branch profits taxes, minimum taxes and taxes computed
under alternative methods, at least one of which is based on net
income (collectively referred to as "net income taxes") by (A) the
jurisdiction under the laws of which such Bank, the Agent, Participant
or Assignee is organized or any political subdivision thereof, (B) the
jurisdiction of such Bank's, Participant's, Assignee's or the Agent's
applicable lending office or any political subdivision thereof or (C)
any jurisdiction in which the Bank, the Agent, Participant or Assignee
is doing business (other than solely as a result of actions
contemplated or required by this Agreement); (ii) any Taxes to the
extent that they are in effect and would apply to a payment to such
Bank or the Agent, as applicable, as of the Closing Date, or as of the
date such Person becomes a Bank, in the case of any Participant or
Assignee pursuant to Section 11.08; (iii) any Taxes resulting from a
failure to take the actions, if any, required by subsection
4.04(a)(iv); (iv) any Taxes to the extent of any credit or other Tax
benefit which, in the reasonable good faith judgment of such Bank,
Participant, Assignee or the Agent, as the case may be, is available
to such Bank, Participant, Assignee or the Agent, as applicable, as a
result thereof and is allocable to the transactions contemplated by
this Agreement; (v) any Taxes imposed on or measured by the overall
net income of any Bank by the United States of America or any
political subdivision or taxing authority thereof or therein; or (vi)
any Taxes that would not have been imposed but for the failure by the
Agent or such Bank, Participant or Assignee as applicable to provide
and keep current any certification or other documentation required to
qualify for an exemption from or reduced rate of any Tax.
Page 11
"Facility Fee" shall have the meaning ascribed to such term in Section
2.04(a).
"Facility Fee Rate" with respect to any Facility Fee payment shall
mean the facility fee rate set forth in the following chart applicable
to the Pricing Level (determined as set forth under "Applicable
Margin" above) in effect on the date on which such Facility Fee
payment is due:
Pricing Level Facility Fee
------------- ------------
I 0.125%
II 0.150%
III 0.175%
IV 0.225%
V 0.300%
"Federal Funds Rate" for any day shall mean the rate on such day for
Federal Funds as published by the Board of Governors of the Federal
Reserve System in "Statistical Release H.15(519), Selected Interest
Rates", or any successor publication, under the heading "Federal Funds
(Effective)". In the event that such rate or such publication is not
published with respect to such day the Federal Funds Rate on such day
shall be the "Federal Funds/Effective Rate" as posted by the Federal
Reserve Bank of Chicago for that day in its publication "Composite
Closing Quotations for U.S. Government Securities". The Federal Funds
Rate for Saturdays, Sundays and any other day on which the Federal
Reserve Bank of Chicago is closed shall be the Federal Funds Rate as
in effect for the next preceding day for which such rates are
published or posted, as the case may be.
"GAAP" shall mean generally accepted accounting principles set forth
in the opinions and pronouncements of the Accounting Principles Board
of the American Institute of Certified Public Accountants and
statements and pronouncements of the Financial Accounting Standards
Board or in such other statements by such other entities as may be
approved by a significant segment of the accounting profession, which
are applicable to the circumstances as of the date of determination.
"Guarantee" by any person shall mean any obligation, contingent or
otherwise, of such Person guaranteeing or having the economic effect
of guaranteeing any Indebtedness of any other Person (the "primary
obligor") in any manner, whether directly or indirectly, and including
any obligation of such Person, (i) to purchase or pay (or advance or
supply funds for the purchase or payment of) such Indebtedness or to
purchase (or to advance or supply funds for the purchase of) any
security for the payment of such Indebtedness, (ii) to purchase
property, securities or services for the purpose of assuring the
holder of such Indebtedness of the payment of such Indebtedness, or
(iii) to maintain working capital, equity capital or other financial
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statement condition or liquidity of the primary obligor so as to
enable the primary obligor to pay such Indebtedness (and "Guaranteed",
"Guaranteeing" and "Guarantor" shall have meanings correlative to the
foregoing); provided that the term "Guarantee" shall not include
endorsements for collection or deposit in the ordinary course of
business.
"Governmental Authority" shall mean 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.
"Hazardous Substance" means any substance presently or hereafter
listed, defined, designated or classified as hazardous, toxic,
radioactive or dangerous, or otherwise regulated, under any
Environmental Ordinance, whether by type or by quantity, including any
substance containing any such substance as a component. Hazardous
Substance includes, without limitation, any toxic waste, pollutant,
contaminant, hazardous substance, toxic substance, hazardous waste,
special waste or petroleum or any derivative or by-product thereof,
radon, radioactive material, asbestos, asbestos containing material,
urea formaldehyde foam insulation, lead and polychlorinated biphenyl.
"Indebtedness" of any Person shall mean, without duplication, (a) all
indebtedness of such Person for borrowed money or for the deferred
purchase price of property or services (including all obligations,
contingent or otherwise, of such Person in connection with letter of
credit facilities, bankers' acceptance facilities, Interest Rate
Protection Agreements or other similar facilities including currency
swaps) other than indebtedness to trade creditors and service
providers incurred in the ordinary course of business; (b) all
obligations of such Person evidenced by bonds, notes, debentures or
other similar instruments; (c) all indebtedness created or arising
under any conditional sale or other title retention agreement with
respect to property acquired by such Person (even though the rights
and remedies of the seller or lender under such agreement in the event
of default are limited to repossession or sale of such property); (d)
all Capital Lease obligations of such Person; (e) that portion of the
Indebtedness of any joint venture of which such Person is a joint
venturer that bears the same proportion to the total Indebtedness of
such joint venture as such Person's equity interest in such joint
venture (however denominated) bears to the total equity of such joint
venture, expressed as a percentage in the form of a decimal to no more
than four decimal places; (f) without duplication of clause (e) above,
all Indebtedness of unconsolidated joint venturers in which such
Person is a joint venturer to the extent recourse may be had to such
Person or its assets; (g) all obligations of such Person in respect of
any "forward equity purchase", or other arrangement, however
characterized, pursuant to which such Person makes a forward purchase
of its own capital stock from a counterparty and which is settled in
such capital stock, and having such other terms as may be agreed, and
having a value, for purposes hereof, equal to its xxxx-to-market
Page 13
valuation on any date of determination; (h) all Indebtedness referred
to in clauses (a), (b), (c), (d), (e), (f) or (g) above secured by (or
for which the holder of such Indebtedness has an existing right,
contingent or otherwise, to be secured by) any Lien upon or in
property (including accounts and contract rights) owned by such
Person, even though such Person has not assumed or become liable for
the payment of such Indebtedness; (i) all preferred stock issued by
such Person which is redeemable, prior to the full satisfaction of the
Company's obligations under the Credit Documents (including repayment
in full of the Loans and all interest accrued thereon), other than at
the option of such Person, valued at the greater of its voluntary or
involuntary liquidation preference plus accumulated and unpaid
dividends and (j) all Indebtedness of others Guaranteed by such
Person. For purposes of this Agreement, the amount of any
Indebtedness under clauses (c) and (h) shall be the lesser of (x) the
principal amount of such Indebtedness and (y) the value of the
property subject to the Lien referred to therein. For purposes of
this Agreement tenant security deposits shall not be deemed to be
Indebtedness.
"Initial Loan" shall mean the first Loan which is made pursuant to the
terms hereof.
"Interest Period" shall mean each one, two, three or six-month period
selected by the Company in a Pro Rata Loan Request, or, if no
Eurodollar Loans are then outstanding, at the time of a
Conversion/Continuance Request, or pursuant to Section 3.03 hereof and
commencing on the date the relevant loan is made or the last day of
the current Interest Period, as the case may be.
"Interest Rate Protection Agreements" shall mean any interest rate
swap, collar or cap agreement or similar arrangement used by a Person
to fix or cap a floating rate of interest on Indebtedness to a
negotiated maximum rate or amount.
"Leverage Ratio" shall mean the ratio of Consolidated Total
Indebtedness to Consolidated Tangible Stockholders' Equity.
"Lien" shall mean, with respect to any asset, any mortgage, deed of
trust, lien, pledge, encumbrance, charge or security interest in or on
such asset.
"LIBOR" shall mean with respect to any Interest Period the rate per
annum determined pursuant to the following formula:
Base LIBOR
---------------------------------------------
LIBOR = (1 - Eurodollar Reserve Percentage)
"Loan Request" shall mean either a Pro Rata Loan Request.
"Loans" shall mean, collectively, Pro Rata Loans outstanding hereunder
from time to time.
Page 14
"Material Adverse Change" shall mean a material adverse change in the
business, properties, condition (financial or otherwise) or operations
of the Company and its Subsidiaries, taken as a whole since
December 31, 1998.
"Material Adverse Effect" shall mean (i) any material adverse effect
on the business, properties, condition (financial or otherwise) or
operations of the Company and its Subsidiaries taken as a whole, from
and after the date of any determination, (ii) any material adverse
effect on the ability of the Company to perform its obligations
hereunder and under the Credit Documents, or (iii) any adverse effect
on the legality, validity, binding effect or enforceability of this
Agreement or the Notes.
"Net Cash Proceeds" shall mean (i) when used in respect of any sale or
disposition of assets of the Company or any Subsidiary, the gross cash
proceeds received by the Company, or the relevant Subsidiary from such
sale or disposition, less: (x) the costs of sale, including payment
of the outstanding principal amount of, and premium or penalty, if
any, and interest on any Indebtedness which is paid or required to be
paid as a result of such sale, all legal, accounting, title and
recording tax expenses, commissions and other fees and expenses paid
or to be paid in cash solely as a result of such sale, and all other
federal, state, local and foreign taxes paid or payable in connection
therewith; (y) the portion of gross cash proceeds from such sale or
disposal which the Company must distribute to its stockholders in
order to avoid the imposition of any income or excise tax with respect
to a taxable gain (if any) associated with such sale or disposition;
and (z) the portion of gross cash proceeds from such sale or disposal
by any Subsidiary which are distributed pro rata to stockholders or
other equity holders of such Subsidiary other than the Company, (ii)
when used with respect to any loss, casualty, fire damage, theft,
destruction or condemnation of any capital asset of the Company or any
Subsidiary, the gross cash proceeds received by the Company or the
relevant Subsidiary under any insurance policy or any award or
compensation received, as the case may be, in each case as a result of
any such loss, casualty, fire damage, theft, destruction or
condemnation, net of all legal, accounting and other fees and expenses
paid or to be paid in cash as a result of such loss, casualty, fire
damage, theft, destruction or condemnation, and all other federal,
state, local and foreign taxes paid or payable in connection
therewith, less the portion of gross cash proceeds from such award or
compensation which the Company must distribute to its stockholders in
order to avoid the imposition of any income or excise tax with respect
to a taxable gain (if any) associated with such award or compensation,
provided that such award or compensation shall not be deemed to be Net
Cash Proceeds if such proceeds have been reinvested in or have been
committed to be reinvested in, or in replacement of, the lost,
damaged, stolen, destroyed or condemned property within twelve months
from the date of such award or compensation, and less the portion of
gross cash proceeds from such award or compensation which are
distributed pro rata to stockholders or other equity holders of such
Page 15
Subsidiary other than the Company; and (iii) when used in respect of
the issuance, assumption or incurrence of Specified Additional
Indebtedness by the Company or any of its Subsidiaries, the gross cash
proceeds received by the Company or the relevant Subsidiary from such
issuance, assumption or incurrence less the costs of issuance,
assumption or incurrence. Net Cash Proceeds shall equal $0 if it
would otherwise be a negative number hereunder.
"Notes" means the Pro Rata Notes.
"Participant" shall have the meaning ascribed to such term in Section
11.08(b).
"PBGC" shall mean the Pension Benefit Guaranty Corporation or any
successor thereto.
"Permitted Encumbrances" shall mean (i) Liens for taxes not delinquent
or being contested in good faith and by appropriate proceedings and
for which adequate reserves (in accordance with GAAP) are being
maintained, (ii) deposits or pledges to secure obligations under
workers' compensation, social security or similar laws, or under
unemployment insurance, (iii) deposits or pledges to secure bids,
tenders, contracts (other than contracts for the payment of money),
leases (other than Capital Leases), statutory obligations, surety and
appeal bonds and other obligations of like nature arising in the
ordinary course of business, (iv) mechanics', workers', materialmen's
or other like Liens arising in the ordinary course of business with
respect to obligations which are not due or which are being contested
in good faith, (v) minor imperfections of title on real estate,
provided such imperfections do not render title unmarketable, (vi) all
other Liens existing on the date of this Agreement and disclosed to
the Bank in writing prior to the date hereof (including in the notes
of the Company's financial statements), (vii) leases or subleases
granted to others in the ordinary course of business of the Company
and its Subsidiaries, (viii) any interest or title of a lessor in the
property subject to any Capital Lease or operating lease, (ix) Liens
arising from filing Uniform Commercial Code financing statements
regarding leases or sub-leases, (x) any attachment or judgment Lien
arising from a judgment or order against the Company or any Subsidiary
that does not give rise to a Default or an Event of Default, provided
that such Lien is not in place for more than sixty days or has been
stayed, (xi) Liens encumbering customary initial deposits and margin
deposits, and other Liens securing Indebtedness under Interest Rate
Protection Agreements that are within the general parameters customary
in the industry and incurred in the ordinary course of business, (xii)
any option, contract or other agreement to sell an asset provided such
sale is otherwise permitted by this Agreement, (xiii) any statutory
right of a lender to which the Company or a Subsidiary may be indebted
to offset against, or appropriate and apply to the payment of, such
Indebtedness any and all balances, credits, deposits, accounts or
monies of the Company or a Subsidiary with or held by such lender,
(xiv) any pledge or deposit of cash or property in conjunction with
Page 16
obtaining bonds or letters of credit required to engage in
constructing on-site and off-site improvements required by
municipalities or other governmental authorities in the ordinary
course of business of the Company and its Subsidiaries, (xv) Liens in
favor of all of the Banks collectively, and (xvi) purchase money
security interests in personal property, with such encumbrances, in
the aggregate, not to exceed $3,500,000.
"Permitted Subsidiary Indebtedness" shall have the meaning ascribed to
such term in Section 7.02(a).
"Person" shall mean any individual, sole proprietorship, partnership,
joint venture, trust, unincorporated organization, association,
corporation, limited liability company, institution, public benefit
corporation, entity or government (whether Federal, state, county,
city, municipal or otherwise, including any instrumentality, division,
agency, body or department thereof).
"Plan" shall mean an employee benefit plan as defined in Section 3(3)
of ERISA which is maintained or contributed to by the Company or an
ERISA Affiliate while such entity is an ERISA Affiliate.
"Pro Rata Loan Request" shall mean a request by the Company to borrow
Pro Rata Loans pursuant to the terms hereof, which shall be
substantially in the form of Exhibit B and shall specify, with respect
to such requested Loans, (i) the requested Borrowing Date, (ii) the
aggregate amount of Pro Rata Loans which the Company desires to borrow
on such date, (iii) whether such requested Loans are to bear interest
as ABR Loans or Eurodollar Loans, and (iv) if the requested Loans are
to bear interest as Eurodollar Loans the requested term of the
Interest Period therefor.
"Pro Rata Loans" shall have the meaning ascribed to such term in
Section 2.01.
"Pro Rata Notes" shall mean, collectively, the promissory notes of the
Company evidencing Pro Rata Loans, each substantially in the form of
Exhibit C-1.
"Pro Rata Share" shall mean, with respect to any Bank, the proportion
of such Bank's Commitment to the Total Commitment of all the Banks or,
if the Total Commitment shall have been canceled or reduced to $0 or
expired, the proportion of such Bank's then outstanding Loans to the
aggregate amount of Loans then outstanding.
"Rating Agency" shall mean Xxxxx'x Investors Service, Inc., Standard &
Poor's Rating Services, a division of the McGraw Hill Companies, Inc.,
or Duff & Xxxxxx Credit Rating Co.
"Real Estate Development Project" shall mean any real estate
development activity not related to current income-producing
properties, including, without limitation, the development of
undeveloped land.
Page 17
"Real Estate Investment Criteria" shall mean the Real Estate
Investment Criteria established by the Company's Board of Directors as
amended, restated, supplemented or revised from time to time, the
current version (as of the date hereof) of which are attached hereto
as Exhibit F.
"Reference Amount", with respect to any Bank and Interest Period,
shall mean the amount of that Bank's Eurodollar Loan scheduled to be
outstanding during that Interest Period (i) without taking into
account any reduction in the amount of any Bank's Loan through any
assignment or transfer and (ii) rounded up to the nearest integral
multiple of $1,000,000.
"REIT" shall have the meaning ascribed to such term in Section
5.01(w).
"Required Banks" shall mean at any date Banks having at least 60% of
the Total Commitment or, if the Total Commitment has been canceled or
terminated, holding Notes evidencing at least 60% of the aggregate
unpaid principal amount of the Loans provided that for purposes of
this definition, the Commitment of any Bank shall be deemed reduced by
the principal amount of any Pro Rata Loan which such Bank is obligated
to advance pursuant to Section 2.02 hereof but which fails to do so.
"SIC Code" shall mean the Standard Industrial Classification Code,
published by the United States Office of Management and Budget.
"Single-Employer Plan" shall mean any Plan that is a single-employer
plan as defined in Section 4001(a)(15) of ERISA which is subject to
the provisions of Title IV of ERISA.
"Solvent" shall mean, when used with respect to any Person, that:
(a) at the date of determination, the present fair salable value
of such Person's assets is in excess of the total amount of
such Person's liabilities;
(b) at the date of determination, such Person is able to pay its
debts as they become due; and
(c) such Person does not have unreasonably small capital to carry
on such Person's business as theretofore operated and all
businesses in which such Person then is about to engage.
"Specified Additional Indebtedness" of any Person shall mean
Indebtedness which is not outstanding as of the date hereof, excluding
(i) Indebtedness to the Agent, or the Banks hereunder and under the
Notes, (ii) Indebtedness incurred in connection with the payment of
any dividend necessary for the Company to maintain its qualification
as a REIT, (iii) up to $10,000,000 principal amount of additional
unsecured Indebtedness that matures and becomes due and payable on a
date not more than one year from the date such Indebtedness was
incurred by the Company and (iv) Permitted Subsidiary Indebtedness.
Page 18
"Subsidiary" shall mean any Person of which or in which the Company
and its other Subsidiaries own directly or indirectly 50% or more of:
(a) the combined voting power of all classes of stock having
general voting power under ordinary circumstances to elect a
majority of the board of directors of such Person, if it is a
corporation,
(b) the capital interest or profits interest of such Person, if it
is a partnership, joint venture or similar entity, or a
corporation whose capital stock so owned are non-voting, or
(c) the beneficial interest of such Person, if it is a trust,
association or other unincorporated organization;
provided, however, that "Subsidiary" shall not include any such entity
that the Company does not control. For the purpose of this
definition, the term "control" shall mean the possession, directly or
indirectly, of the power to direct or cause the direction of the
management and policies of a person, whether through the ownership of
voting equity interests, by contract or otherwise.
"Subsidiary Guaranty" shall mean a guaranty of a Subsidiary furnished
pursuant to Section 7.02(e)(vii), in the form of Exhibit G hereto.
"Tax" means any present or future tax, levy, impost, duty,
governmental fee, deduction, withholding or charge, and all
liabilities with respect thereto of any nature and whatever called, by
whomsoever, on whomsoever and wherever imposed, levied, collected,
withheld or assessed.
"Termination Date" shall mean, with respect to any Bank, the earliest
to occur of (i) February 1,2003 or such later date as may be agreed to
by such Bank pursuant to Section 11.12, (ii) the date on which the
obligations of the Banks to make loans hereunder shall terminate
pursuant to Section 8.01 or the Commitments shall be reduced to zero
pursuant to Section 2.05, and (iii) the date specified as such Bank's
Termination Date pursuant to Section 11.12, or, if in any case (other
than clause (ii) above) such day is not a Business Day, the next
succeeding Business Day; in all cases, subject to the provisions of
Section 11.12(d).
"Total Commitment" shall mean the aggregate Commitments of all the
Banks.
"Unmatured Surviving Obligations" shall mean, as of any date, any
obligations under this Agreement which are contingent and unliquidated
and not then due and payable on such date and which pursuant to the
provisions of this Agreement survive termination of this Agreement.
Page 19
"Unsecured Revolver" shall mean the revolving credit made available to
the Company under that certain Credit Agreement dated as of
December 14, 1999 by and among the Company, the Agent, The Bank of New
York, First Union National Bank, Xxxxx Fargo Bank, National
Association, BNY Capital Markets, Inc. and the other banks party
thereto.
"Wholly owned Subsidiary" shall mean any Subsidiary all the equity
interests of which (other than directors' qualifying shares, if a
corporation) at the time are owned directly or indirectly by the
Company and/or one or more Wholly owned Subsidiaries of the Company.
"Year 2000 Issue" means failure of computer software, hardware and
firmware systems and equipment containing or relying on embedded
computer chips to properly receive, transmit, process, manipulate,
store, retrieve, retransmit, or in any other way utilize data or
information due to the occurrence of the year 2000 or the inclusion of
dates on or after January 1, 2000.
ARTICLE II
THE LOANS
Section 2.01. The Loans. Prior to the Termination Date, and subject
to the terms and conditions of this Agreement, upon the request of the
Company, and upon the satisfaction by the Company or the waiver by
each of the Banks of each of the conditions precedent contained in
Section 6.02, each of the Banks, severally and not jointly with the
other Banks, agrees to make revolving credit loans (collectively, "Pro
Rata Loans") to the Company from time to time in an aggregate
principal amount at any one time outstanding not to exceed its
Commitment; provided, however, that the aggregate outstanding Loans
may not exceed the Total Commitment.
Section 2.02. Procedure for Pro Rata Loans. (a) The Company may
borrow Pro Rata Loans by delivering a written Pro Rata Loan Request to
the Agent on or before 5:00 P.M., Chicago time, one Business Day prior
to the requested Borrowing Date therefor, in the case of ABR Loans, or
on the date not less than three Business Days prior to the requested
Borrowing Date therefor, in the case of Eurodollar Pro Rata Loans.
ABR Loans shall be in the minimum aggregate amount of $1,000,000 or in
integral multiples of $100,000 in excess thereof. Eurodollar Pro Rata
Loans shall be in the minimum aggregate amount of $5,000,000 or in
integral multiples of $50,000 in excess thereof.
(b) Upon receipt of any Pro Rata Loan Request from the Company, the
Agent shall forthwith give notice to each Bank of the substance
thereof. Not later than 2:00 P.M., Chicago time, on the Borrowing
Date specified in such Pro Rata Loan Request, each Bank shall make
available to the Agent in immediately available funds at the office of
the Agent at its address set forth on the signature pages hereof, such
Bank's Pro Rata Share of the requested Pro Rata Loans.
Page 20
(c) Upon receipt by the Agent of funds and satisfaction by the
Company or waiver by each of the Banks of each of the conditions
precedent contained in Section 6.02, the Agent shall disburse to the
Company on the requested Borrowing Date the Pro Rata Loans requested
in such Pro Rata Loan Request. The Agent may, but shall not be
required to, advance on behalf of any Bank such Bank's Pro Rata Share
of the Pro Rata Loans on a Borrowing Date unless such Bank shall have
notified the Agent prior to such Borrowing Date that it does not
intend to make available its Pro Rata Share of such Loans on such date
(it being understood that no action or inaction by the Agent regarding
such an advance shall affect the rights of the Company with respect to
any non-performing Bank). If the Agent makes such advance, the Agent
shall be entitled to recover such amount on demand from the Bank on
whose behalf such advance was made, and if such Bank does not pay the
Agent the amount of such advance on demand, the Company shall promptly
repay such amount to the Agent. Until such amount is repaid to the
Agent by such Bank or the Company, such advance shall be deemed for
all purposes to be a Pro Rata Loan made by the Agent. The Agent shall
be entitled to recover from the Bank or the Company, as the case may
be, interest on the amount advanced by it for each day from the
Borrowing Date therefor until repaid to the Agent, at a rate per annum
equal to (i) in the case of the Bank, the Federal Funds Rate, for the
three-day period beginning on the Borrowing Date, and the applicable
rate on the Pro Rata Loans made on the Borrowing Date for the period
beginning on the fourth day after the Borrowing Date, and (ii) in the
case of the Company, the applicable rate on the Pro Rata Loans made on
the Borrowing Date.
(d) In lieu of delivering the written notice described above, the
Company may give the Agent telephonic notice of any request for
borrowing by the time required under this Section 2.02; provided that
such telephonic notice shall be confirmed by delivery of a written
notice to the Agent promptly but in no event later than 3:00 P.M.,
Chicago time, on the date of such telephonic notice.
Section 2.03. Pro Rata Notes. The Company's obligation to repay the
Pro Rata Loans shall be evidenced by Pro Rata Notes, one such Pro Rata
Note payable to the order of each Bank. The Pro Rata Note of each
Bank shall (i) be in the principal amount of such Bank's Commitment,
(ii) be dated the date of the initial Loan and (iii) be stated to
mature on the Termination Date as such date may be extended hereunder
and bear interest from its date until maturity on the principal
balance (from time to time outstanding thereunder) payable at the
rates and in the manner provided herein. Each Bank is authorized to
indicate upon the grid attached to its Pro Rata Note all Pro Rata
Loans made by it pursuant to this Agreement, interest elections and
payments of principal and interest thereon. Such notations shall be
presumptive as to the aggregate unpaid principal amount of all Pro
Rata Loans made by such Bank, and interest due thereon, but the
failure by any Bank to make such notations or the inaccuracy or
incompleteness of any such notations shall not affect the obligations
of the Company hereunder or under the Pro Rata Notes.
Page 21
Section 2.04. Certain Fees. (a) The Company shall pay to the Agent a
fee (the "Facility Fee") equal to the Facility Fee Rate per annum
(calculated on the basis of a 360-day year for the actual number of
days involved) on the daily average amount of the Total Commitment,
regardless of usage (excluding the amount of any canceled or reduced
portion of the Commitment for which the Facility Fee was paid in
connection with such cancellation or reduction pursuant to Section
2.05 hereof) during the quarter with respect to which such Facility
Fee is being paid. Such Facility Fee shall be payable in arrears on
the last Business Day of each calendar quarter, commencing on the
first such date after the date hereof, on any date that the Total
Commitment is canceled or reduced pursuant to Section 2.05 (but only
with respect to the amount of such cancellation or reduction) and on
the Termination Date.
(b) The Company shall pay to the Agent for its own account such fees
as have been or may hereinafter be agreed to between the Agent and the
Company, in the amounts and at the times agreed upon.
(c) On the Effective Date the Company shall pay to the Agent for the
account of each of the Banks such fees as have been or may hereinafter
be agreed to between the Agent and the Company, in the amounts and at
the times agreed upon.
Section 2.05. Cancellation or Reduction of the Commitment. The
Company shall have the right, upon not less than three Business Days'
written notice to the Agent and upon payment of the Facility Fees
relating to the amount of the Total Commitment canceled or reduced
which have accrued through the date of such cancellation or reduction,
with respect to the amount of the cancellation or reduction, to cancel
the Total Commitment in full or to reduce the amount thereof;
provided, however, that the Total Commitment may not be canceled so
long as any Loan remains outstanding; and provided, further, that the
amount of any partial reduction in the Total Commitment shall not
exceed the remainder of (i) the Total Commitment on such date minus
(ii) the aggregate outstanding principal amount of Loans on such date.
Partial reductions of the Total Commitment shall be in the amount of
$5,000,000 or in integral multiples of $1,000,000 in excess thereof
(or, if the aggregate outstanding amount of Loans is less than
$5,000,000, then all of such lesser amount). All such cancellations
or reductions shall be permanent.
Section 2.06. Optional Prepayment. The Company shall have the right,
on not less than three Business Days' written notice to the Agent in
the case of Eurodollar Pro Rata Loans, and upon such written notice
delivered by 10:00 A.M. Chicago time the day of the proposed
prepayment to the Agent in the case of ABR Loans, to prepay Pro Rata
Loans bearing interest on the same basis and having the same Interest
Periods, if any, in whole or in part, without premium or penalty, in
the aggregate principal amount of $1,000,000 or in integral multiples
of $100,000 in excess thereof (or, if the outstanding aggregate amount
of such Loan is less than $1,000,000 then all of such lesser amount),
Page 22
together with accrued interest on the principal being prepaid to the
date of prepayment and, in the case of Eurodollar Loans, the amounts
required by Section 4.03. Subject to the terms and conditions hereof,
prepaid Loans may be reborrowed.
Section 2.07. Mandatory Prepayment. (a) If (i) the Company or any
Subsidiary shall sell, lease (other than in the ordinary course of
business), assign, transfer or otherwise dispose of any of its assets,
other than pursuant to Excluded Asset Sales, in an exchange that
qualifies under Section 1031 of the Code, or to the extent that the
Net Cash Proceeds received therefrom are reinvested in similar assets
within 180 days of such disposition of such assets, (ii) the Company
or a Subsidiary issues, assumes or incurs Specified Additional
Indebtedness or (iii) the Company sells or issues equity securities
for cash, other than pursuant to the Company's Stock Incentive Plan,
the Company shall prepay outstanding Pro Rata Loans with the Net Cash
Proceeds therefrom. Notwithstanding the foregoing, if at the time a
mandatory prepayment shall be required to be made hereunder, a
mandatory prepayment shall also be required to be made under any
similar provision of any agreement evidencing Indebtedness permitted
by Section 7.02(a), then the Company may apportion such mandatory
prepayment pro rata according to the relative principal amounts
outstanding under such Credit Agreement and under this Agreement, and
the amount of such mandatory prepayment hereunder shall be reduced
accordingly. Any such reduction shall be described in reasonable
detail in the officer's certificate required under this Section
2.07(c).
(b) Application of Prepayments. All prepayments required to be made
pursuant to this Section 2.07 shall be applied in the following order:
first, to compensate the Banks for any amounts required by Section
4.03, in the case that such prepayment shall apply to any Eurodollar
Pro Rata Loans, second, to accrued interest on the principal amount of
Pro Rata Loans being prepaid, and third, to the principal of the Pro
Rata Loans then outstanding, if any; provided that any prepayments
shall be applied in a manner to minimize the payments, if any,
required by the Company pursuant to Section 4.03 with respect to such
prepayment; and provided, further, that the accrued interest on, and
the outstanding principal of, Pro Rata Loans to be prepaid shall be
applied to prepayment of ABR Loans and Eurodollar Pro Rata Loans in
proportion to the outstanding aggregate principal amount of such ABR
Loans or Eurodollar Pro Rata Loans, respectively, relative to that of
all Pro Rata Loans.
(c) Officer's Certificate. Promptly upon receipt of any Net Cash
Proceeds, other than pursuant to any Excluded Asset Sales, the Company
shall deliver to the Agent a certificate signed by the chief financial
officer of the Company, which shall be in form and substance
satisfactory to the Agent, setting forth the amount of the gross cash
proceeds received and the items deducted therefrom in reasonable
detail in order to confirm the amount of such Net Cash Proceeds and
also setting forth the Company's year-to-date asset sales.
Page 23
ARTICLE III
INTEREST, METHOD OF PAYMENT, CONVERSION, ETC.
Section 3.01. Procedure for Interest Rate Determination. Unless the
Company shall request in a Loan Request or in a Conversion/
Continuance Request that Pro Rata Loans (or portions thereof) bear
interest as Eurodollar Pro Rata Loans, the Pro Rata Loans shall bear
interest as ABR Loans.
Section 3.02. Interest on ABR Loans. Each ABR Loan shall bear
interest from the date of such ABR Loan until maturity thereof or
until such Loan is repaid or converted, or the beginning of any
relevant Interest Period, as the case may be, payable in arrears on
the last day of each calendar quarter of each year, commencing with
the first such date after the date hereof, and on the date such ABR
Loan is repaid, at a rate per annum (on the basis of a 365- or 366-day
year for the actual number of days involved in the case of ABR Loans
which accrue interest based upon the Prime Rate and on the basis of a
360-day year for the actual number of days involved in the case of ABR
Loans which accrue interest based upon the Federal Funds Rate) equal
to the Base Rate in effect from time to time, which rate shall change
as and when said Base Rate shall change. If an ABR Loan is
outstanding, the Agent shall notify the Company of the Base Rate when
said Base Rate shall change; provided that the failure to give notice
shall not affect the Company's obligations with respect to such ABR
Loan.
Section 3.03. Interest on Eurodollar Loans. (a) Each Eurodollar Loan
shall bear interest from the date of such Loan until maturity thereof
or until such Loan is repaid, payable in arrears, with respect to
Interest Periods of three months or less, on the last day of such
Interest Period, and with respect to Interest Periods longer than
three months, on the day which is three months after the commencement
of such Interest Period and on the last day of such Interest Period,
at a rate per annum (on the basis of a 360-day year for the actual
number of days involved), determined by the Agent with respect to each
Interest Period with respect to Eurodollar Loans, equal to the sum of
(i) the Applicable Margin, in the case of Eurodollar Pro Rata Loans
and (ii) LIBOR.
(b) The Interest Period for each Eurodollar Loan shall be selected by
the Company at least three Business Days prior to the beginning of
such Interest Period. If the Company fails to notify the Agent of the
subsequent Interest Period for an outstanding Eurodollar Pro Rata Loan
at least three Business Days prior to the last day of the then current
Interest Period of such Eurodollar Pro Rata Loan, then such
outstanding Eurodollar Pro Rata Loan shall become an ABR Loan at the
end of such current Interest Period.
Page 24
(c) Notwithstanding the foregoing: (i) if any Interest Period for a
Eurodollar Loan would otherwise end on a day which is not a Business
Day, such Interest Period shall be extended to the next succeeding
Business Day unless the result of such extension would be to carry
such Interest Period into another calendar month, in which event such
Interest Period shall end on the immediately preceding Business Day;
(ii) any Interest Period that begins on the last Business Day of a
calendar month (or on a day for which there is no numerically
corresponding day in the calendar month at the end of such Interest
Period) shall end on the last Business Day of a calendar month; and
(iii) no Interest Period for a Eurodollar Loan may extend beyond the
Termination Date.
(d) Eurodollar Loans shall be made by each Bank from its branch or
affiliate identified as its Eurodollar Lending Office on the signature
page hereto, or such other branch or affiliate as it may hereafter
designate to the Company and the Agent as its Eurodollar Lending
Office. A Bank shall not change its Eurodollar Lending Office
designation if it, at the time of the making of such change, increases
the amounts that would have been payable by the Company to such Bank
under this Agreement in the absence of such a change.
Section 3.04. Conversion/Continuance. (a) The Company may request,
by delivery to the Agent of a written Conversion/Continuance Request
not less than three Business Days prior to a requested Conversion/
Continuance Date, that all or portions of the outstanding ABR Loans
and Eurodollar Pro Rata Loans, in the aggregate amount of $1,000,000
or in integral multiples of $100,000 in excess thereof (or, if the
aggregate amount of outstanding Loans is less than $1,000,000, then
all such lesser amount), shall bear interest from and after the
Conversion/Continuance Date as either ABR Loans or Eurodollar Pro Rata
Loans.
(b) Upon receipt of any such Conversion/Continuance Request from the
Company, the Agent shall forthwith give notice to each Bank of the
substance thereof. Effective on such Conversion/Continuance Date and
upon payment by the Company of the amounts, if any, required by
Section 4.03, the Loans or portions thereof as to which the
Conversion/Continuance Request was made shall commence to accrue
interest as set forth in this Article III for the interest rate
selected by the Company.
(c) In lieu of delivering the above-described notice, the Company may
give the Agent telephonic notice hereunder by the required time under
this Section 3.05; provided that such telephonic notice shall be
confirmed by delivery of a written notice to the Agent by no later
than 3:00 P.M., Chicago time, the date of such telephonic notice.
Section 3.05. Post Default Interest. Upon the occurrence and during
the continuation of an Event of Default, all Loans and any unpaid
installment of interest shall bear interest at a rate per annum equal
to the sum of (i) 2% and (ii) with respect to ABR Loans, the rate of
Page 25
interest then applicable to ABR Loans, changing as and when said rate
shall change, with respect to Eurodollar Loans, the rate of interest
applicable to each such Eurodollar Loan. Interest payable pursuant to
this Section 3.06 shall be payable on demand.
Section 3.06. Maximum Interest Rate. (a) Nothing in this Agreement
or the Notes shall require the Company to pay interest at a rate
exceeding the maximum rate permitted by applicable law. Neither this
Section nor Section 11.01 is intended to limit the rate of interest
payable for the account of any Bank to the maximum rate permitted by
the laws of the State of New York (or any other applicable law) if a
higher rate is permitted with respect to such Bank by supervening
provisions of U.S. Federal law.
(b) If the amount of interest payable for the account of any Bank on
any interest payment date in respect of the immediately preceding
interest computation period, computed pursuant to this Article III,
would exceed the maximum amount permitted by applicable law to be
charged by such Bank, the amount of interest payable for its account
on such interest payment date shall automatically be reduced to such
maximum permissible amount.
ARTICLE IV
DISBURSEMENT AND PAYMENT
Section 4.01. Pro Rata Treatment. Each payment of the Facility Fee
and each reduction of the Total Commitment shall be apportioned among
the Banks in proportion to each Bank's Pro Rata Share. Except as
provided in Section 4.04 or 4.05, the ABR Loans and Eurodollar Pro
Rata Loans or portions thereof as to which a Conversion/Continuance
Request has been made pursuant to Section 3.05 hereof shall at all
times bear interest on the same basis respectively (i.e., as ABR Loans
and Eurodollar Pro Rata Loans) and the Interest Periods applicable
thereto, if any, shall be of the same duration.
Section 4.02. Method of Payment. (a) All payments by the Company
hereunder and under the Notes shall be made without set-off or
counterclaim to the Agent, for its account or for the account of the
Bank or Banks entitled thereto, as the case may be, in lawful money of
the United States and in immediately available funds at the office of
the Agent on the date when due.
(b) Any payment hereunder which falls due on a non-Business Day will
be carried over to the next Business Day (subject to Section 3.03(c)),
and interest at the rate applicable hereunder will continue to run
during such extension of time.
Section 4.03. Compensation for Losses. (a) Compensation. In the
event that (i) the Company makes a prepayment under Section 2.06 on a
day other than the last day of the Interest Period for the amount so
prepaid, (ii) a Conversion/Continuance Date selected pursuant to
Page 26
Section 3.05 falls on a day other than the last day of the Interest
Period for the amount as to which a conversion is made, (iii) the
Company revokes any notice given under Section 2.02 requesting
Eurodollar Loans, (iv) the Loans or portions thereof are converted
into ABR Loans pursuant to Section 4.05 on a day other than the last
day of the Interest Period for the Eurodollar Loans so converted or
(v) the Eurodollar Loans shall be declared to be due and payable prior
to the scheduled maturity thereof pursuant to Section 8.01. Such
compensation shall include an amount equal to the excess, if any, of
(i) the amount of interest which would have accrued on the amount so
paid or prepaid, or not borrowed or converted, for the period from the
date of such payment or prepayment or conversion or failure to borrow
to the last day of such Interest Period (or, in the case of a failure
to borrow, the Interest Period that would have commenced on the date
of such failure to borrow) in each case at the applicable rate of
interest for such Loan provided for herein (excluding, however, the
Applicable Margin included therein) over (ii) the amount of interest
(as reasonably determined by such Bank) which would have accrued to
such Bank on such amount by placing such amount on deposit for a
comparable period with leading banks in the London interbank market.
For purposes of calculating amounts payable by the Company to the
Banks under this Section, each Eurodollar Loan made by a Bank (and
each related reserve, special deposit or similar requirement) shall be
conclusively deemed to have been funded at Base LIBOR used in
determining LIBOR for such Eurodollar Loan by a matching deposit or
other borrowing in the London interbank deposits market for a
comparable amount and for a comparable period, whether or not such
Eurodollar Loan is in fact so funded.
(b) Certificate, Etc. Each Bank shall promptly notify the Company,
with a copy to the Agent, upon becoming aware that the Company may be
required to make any payment pursuant to this Section 4.03. When
requesting payment pursuant to this Section 4.03, each Bank shall
provide to the Company, with a copy to the Agent, a certificate,
signed by an officer of such Bank, setting forth the amount required
to be paid by the Company to such Bank and the computations made by
such Bank to determine such amount. In the absence of manifest error,
such certificate shall be conclusive and binding on the Company as to
the amount so required to be paid by the Company to such Bank.
(c) Participants. Subject to Section 11.08(e), each Participant
shall be deemed a "Bank" for the purposes of this Section 4.03.
Section 4.04. Withholding, Reserves and Additional Costs. (a) Taxes.
(i) Withholding. To the extent permitted by law, all payments
under this Agreement and under the Notes (including payments
of principal and interest) shall be payable to each Bank
free and clear of any and all present and future Covered
Taxes. If any Taxes are required to be withheld or deducted
from any amount payable under this Agreement or any Note,
then (1) the Company shall pay any such Tax before the date
Page 27
on which penalties attach thereto, and (2) in the event such
Tax is a Covered Tax, the amount payable under this
Agreement or such Note shall be increased to the amount
which, after deduction from such increased amount of all
Covered Taxes required to be withheld or deducted therefrom,
will yield to such Bank the amount stated to be payable
under this Agreement or such Note. The Company shall
execute and deliver to any Bank upon its request such
further instruments as may be necessary or desirable to give
full force and effect to any such increase, including a new
Note of the Company to be issued in exchange for any Note
theretofore issued. The Company shall also hold each Bank
harmless and indemnify it for any stamp or other taxes with
respect to the preparation, execution, delivery, recording,
performance or enforcement of the Credit Documents (all of
which shall be included with "Taxes"). If any Covered Taxes
are paid by any Bank, the Company shall, not later than 10
days after demand of such Bank, reimburse such Bank for such
payments, together with any interest, penalties and expenses
incurred in connection therewith, plus interest thereon at a
rate per annum (based on a 360-day year for the actual
number of days involved) equal to the interest rate then
applicable to ABR Loans, changing as and when such rate
shall change, from the date such payment or payments are
made by such Bank to the date of reimbursement by the
Company. The Company shall deliver to the Agent
certificates or other valid vouchers for all Taxes or other
charges deducted from or paid with respect to payments made
by the Company hereunder.
(ii) Tax Refund. If the Company determines in good faith that,
(a) acting in the name of a Bank, Participant, Assignee or
the Agent it is more likely than not to win a contest
involving a Covered Tax, or (b) acting in the name of the
Company, a reasonable basis exists for contesting a Covered
Tax, then the relevant Bank, Participant, Assignee or the
Agent, as applicable, shall cooperate with the Company in
challenging such Tax at the Company's expense if requested
by the Company (it being understood and agreed that neither
the Agent nor any Bank, Participant or Assignee shall have
any obligation to contest, or any responsibility for
contesting any Tax). If any Bank, Participant, Assignee or
the Agent, as applicable, receives a refund (whether by way
of direct payment or by offset) of any Covered Tax for which
a payment has been made pursuant to subsection 4.04(a)(i)
which, in the reasonable good faith judgment of such Bank,
Participant, Assignee or Agent, as the case may be, is
allocable to such payment made under subsection 4.04(a)(i),
the amount of such refund (together with any interest
received thereon) shall be paid to the Company to the extent
payment has been made in full pursuant to subsection 4.04(a)
(i).
Page 28
(iii) U.S. Tax Certificates. Each Bank that is organized under
the laws of any jurisdiction other than the United States or
any state thereof shall deliver to the Agent for
transmission to the Company, on or prior to the Closing Date
(in the case of each Bank listed on the signature pages
hereof) or on the date (and as a condition to effectiveness)
of an assignment pursuant to which it becomes a Bank (in the
case of each other Bank), and at such other times as may be
necessary in the determination of the Company or the Agent
(each in the reasonable exercise of its discretion), such
certificates, documents or other evidence, properly
completed and duly executed by such Bank (including, without
limitation, Internal Revenue Service Form 1001 or Form 4224
or any other certificate or statement of exemption required
by Treasury Regulations Section 1.1441-4(a) or Section
1.1441-6(c) or any successor thereto) to establish that such
Bank is not subject to deduction or withholding of United
States federal income tax under Section 1441 or 1442 of the
Code or otherwise (or under any comparable provisions of any
successor statute) or is subject to deduction or withholding
at a reduced rate under any applicable treaty or otherwise
with respect to any Payments to such Bank of principal,
interest, fees or other amounts payable under this Agreement
or any of the Notes. The Company shall not be required to
pay any additional amount to any such Bank under subsection
4.04(a)(i) if such Bank shall have failed to satisfy the
requirements of the immediately preceding sentence; provided
that if such Bank shall have satisfied such requirements on
the Closing Date (in the case of each Bank listed on the
signature pages hereof) or on the date of the agreement
pursuant to which it became a Bank (in the case of each
other Bank), nothing in this subsection 4.04(a)(iii) shall
relieve the Company of its obligation to pay any additional
amounts pursuant to subsection 4.04(a)(i) in the event that,
as a result of any change in applicable law, such Bank is no
longer properly entitled to deliver certificates, documents
or other evidence at a subsequent date establishing the fact
that such Bank is not subject to withholding as described in
the immediately preceding sentence.
(iv) Mitigation. Each Bank agrees that, as promptly as
practicable after the officer of such Bank responsible for
administering the Loans under this Agreement becomes aware
of the occurrence of an event or the existence of a
condition that would require the Company to make payments
with respect to such Bank under subsection 4.04(a)(i), it
will, to the extent not inconsistent with such Bank's
internal policies, use reasonable efforts (1) to make, fund
or maintain the Commitments or Loans of such Bank through
another lending office of such Bank, or (2) take such other
reasonable measures, if as a result the additional amounts
that would otherwise be required to be paid by the Company
Page 29
with respect to such Bank pursuant to subsection 4.04(a)(i)
would be materially reduced and if, as determined by such
Bank in its sole discretion, the making, funding or
maintaining of such Commitments or Loans through such other
lending office or in accordance with such other measures, as
the case may be, would not otherwise materially adversely
affect such Commitments or Loans or the interests of such
Bank.
(v) Replacement of Bank. If the Company becomes obligated to
pay additional amounts described in Section 4.04(a) as a
result of any condition described in such Section and
payment of such amount is demanded by any Bank, then the
Company may, on ten business days' prior written notice to
the Agent and such Bank, cause such Bank to (and such Bank
shall) assign all of its rights and obligations under this
Agreement to a Bank or other entity selected by the Company
for a purchase price equal to the outstanding principal
amount of such Bank's Loans and all accrued interest, fees,
and other amounts owing to such Bank provided that in no
event shall the assigning Bank be required to pay or
surrender to such purchasing Bank or other entity any of the
fees received by such assigning Bank pursuant to this
Agreement. The Company shall remain obligated to pay to
such assigning Bank all additional amounts described in
Section 4.04(a) arising on or prior to the date of such
assignment as a result of any condition described in such
Section and demanded by any Bank.
(b) Additional Costs.
(i) If after the date hereof, any change in any law or
regulation or in the interpretation thereof by any court or
administrative or governmental authority charged with the
administration thereof or the enactment of any law or
regulation shall either (1) impose, modify or deem
applicable any reserve, special deposit or similar
requirement against the Banks' Commitments or the Loans or
(2) impose on any Bank any other condition regarding this
Agreement, its Commitment or the Loans and the result of any
event referred to in clause (1) or (2) of this clause
(b) shall be to increase the cost (other than an increase in
cost as a consequence of any Tax, which shall be governed by
the provisions of Section 4.04(a)) to any Bank of
maintaining its Commitment or any Loans (which increase in
cost shall be calculated in accordance with each Bank's
reasonable averaging and attribution methods) by an amount
which any such Bank deems to be material, then, upon receipt
by the Company of written notice by such Bank, the Company
shall be obligated to pay to such Bank within 10 days of any
written demand therefor an amount equal to such increase in
cost incurred by such Bank after the date the Company
Page 30
receives such notice; provided that in respect of any Loan
such amount shall bear interest, after receipt by the
Company of any such demand until payment in full thereof, at
a rate per annum (based on a 360-day year, for the actual
number of days involved) equal to the sum of 2% and the
interest rate then applicable to ABR Loans, changing as and
when such rate shall change.
(ii) If any Bank shall have determined that the adoption of any
applicable law, rule, regulation or guideline regarding
capital adequacy, or any change therein, or any change in
the interpretation or administration thereof by any
governmental authority, central bank or comparable agency
charged with the interpretation or administration thereof
(including any such adoption or change made prior to the
date hereof but not effective until after the date hereof),
or compliance by any Bank with any request or directive
regarding capital adequacy (whether or not having the force
of law) of any such authority, central bank or comparable
agency, has or would have the effect of reducing the rate of
return on capital for any such Bank or any corporation
controlling such Bank as a consequence of its obligations
under this Agreement to a level below that which such Bank
or such corporation could have achieved but for such
adoption, change or compliance (taking into consideration
such Bank's or such corporation's policies with respect to
capital adequacy), then upon receipt by the Company of
written notice by such Bank, the Company shall be obligated
to pay to such Bank upon receipt of written demand from such
Bank such additional amount or amounts as will compensate
such Bank for such reduction suffered by such Bank after the
date the Company receives such notice, plus interest thereon
at a rate per annum (based on a 360-day year, for the actual
number of days involved) equal to the interest rate then
applicable to ABR Loans, changing as and when such rate
shall change, from the date of such demand by such Bank to
the date of payment by the Company.
(iii) Mitigation. Each Bank agrees that, as promptly as
practicable after the officer of such Bank responsible for
the Loans under this Agreement becomes aware of the
occurrence of an event or the existence of a condition that
would require the Company to make payments with respect to
such Bank under subsection 4.04(b)(i) or (ii), it will, to
the extent not inconsistent with such Bank's internal
policies, use reasonable efforts (1) to make, fund or
maintain the Commitments or Loans of such Bank through
another lending office of such Bank, or (2) take such other
reasonable measures, if as a result the additional amounts
that would otherwise be required to be paid by the Company
with respect to such Bank pursuant to subsection 4.04(b)(i)
or (ii) would be materially reduced and if, as determined by
Page 31
such Bank in its sole discretion, the making, funding or
maintaining of such Commitments or Loans through such other
lending office or in accordance with such other measures, as
the case may be, would not otherwise materially adversely
affect such Commitments or Loans or the interests of such
Bank.
(iv) Replacement of Bank. If the Company becomes obligated to
pay additional amounts described in Section 4.04(b)(i) or
(ii) as a result of any condition described in such Section
and payment of such amount is demanded by any Bank, then the
Company may, on ten business days' prior written notice to
the Agent and such Bank, cause such Bank to (and such Bank
shall) assign all of its rights and obligations under this
Agreement to a Bank or other entity selected by the Company
for a purchase price equal to the outstanding principal
amount of such Bank's Loans and all interest and facility
fees accrued to the date of purchase. The Company shall
remain obligated to pay to such assigning Bank all
additional amounts described in Section 4.04(b) arising on
or prior to the date of such assignment as a result of any
condition described in such Section and demanded by any
Bank.
(c) Lending Office Designations. Before giving any notice to the
Company pursuant to this Section 4.04, each Bank shall, if possible,
designate a different lending office if such designation will avoid
the need for giving such notice and will not, in the judgment of such
Bank, be otherwise disadvantageous to such Bank.
(d) Certificate, Etc. Each Bank shall promptly notify the Company,
with a copy to the Agent, upon becoming aware that the Company may be
required to make any payment pursuant to this Section 4.04. When
requesting payment pursuant to this Section 4.04, each Bank shall
provide to the Company, with a copy to the Agent, a certificate,
signed by an officer of such Bank, setting forth the amount required
to be paid by the Company to such Bank and the computations made by
such Bank to determine such amount. Determinations and allocations by
such Bank for purposes of this Section 4.04 shall be conclusive and
binding upon the Company, provided that such determinations and
allocations are made on a reasonable basis and are mathematically
accurate.
(e) Participants. Subject to Section 11.08(e), each Participant
shall be deemed a "Bank" for the purposes of this Section 4.04.
Section 4.05. Unavailability. If at any time any Bank shall have
determined in good faith (which determination shall be conclusive)
that (x) the making or maintenance of all or any part of such Bank's
Eurodollar Loans has been made impracticable or unlawful because of
compliance by such Bank in good faith with any law or guideline or any
interpretation or administration thereof by any official body charged
Page 32
with the interpretation or administration thereof or with any request
or directive of such body (whether or not having the effect of law),
or (y) that LIBOR would not accurately reflect the cost to such Bank
of making, continuing or converting any Eurodollar Loan by reason of
such compliance, or by reason of the unavailability of appropriate
quotations, or by reason of the unavailability of U.S. dollar deposits
in the appropriate amount and maturity in the London Eurodollar
interbank market, then the Agent, upon notification to it of such
determination by such Bank, shall forthwith advise the other Banks and
the Company thereof. Upon such date as shall be specified in such
notice and until such time as the Agent, upon notification to it by
such Bank, shall notify the Company and the other Banks that the
circumstances specified by it in such notice no longer apply, (i)
notwithstanding any other provision of this Agreement, such Eurodollar
Loans of such Bank shall automatically and without requirement of
notice by the Company be converted to ABR Loans and (ii) the
obligation of only such Bank to allow borrowing, elections and
renewals of Eurodollar Loans shall be suspended, and, if the Company
shall request in a Loan Request or Conversion/Continuance Request that
such Bank make a Eurodollar Loan, the loan requested to be made by
such Bank shall instead be made as an ABR Loan.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
Section 5.01. Representations and Warranties. As of each Compliance
Date, the Company represents and warrants to the Banks that:
(a) Subsidiaries. At the date hereof, the Company has no
Subsidiaries and is a participant in no joint ventures other than as
listed on Schedule 5.01(a).
(b) Good Standing and Power. The Company is duly organized and
validly existing and in good standing under the laws of the State of
Maryland; and the Company has the power to own its property and to
carry on its business as now being conducted and is duly qualified to
do business and is in good standing in each jurisdiction in which the
character of the properties owned or leased by it therein or in which
the transaction of its business makes such qualification necessary,
except where the failure to be so qualified or to be in good standing,
individually or in the aggregate, could not reasonably be expected to
have a Material Adverse Effect. Each of the corporate Subsidiaries of
the Company are corporations, each duly organized and validly
existing, under the laws of the jurisdiction of its incorporation;
each other Subsidiary is an entity duly organized and validly existing
under the laws of the jurisdiction of its organization; and each
Subsidiary has the power to own its property and to carry on its
business as now being conducted and is duly qualified to do business
and is in good standing in each jurisdiction in which the character of
the properties owned or leased by it therein or in which the
transaction of its business makes such qualification necessary, except
Page 33
where the failure to be so organized, existing, qualified, or to be in
good standing, individually or in the aggregate, could not reasonably
be expected to have a Material Adverse Effect.
(c) Corporate Authority. The Company has full corporate power and
authority to execute, deliver and perform its obligations under this
Agreement, to make the borrowings contemplated hereby, and to execute
and deliver the Notes and to incur the obligations provided for herein
and therein, all of which have been duly authorized by all proper and
necessary corporate action. No consent or approval of stockholders is
required as a condition to the validity or performance by the Company
of its obligations under this Agreement or the Notes.
(d) Authorizations. All authorizations, consents, approvals,
registrations, notices, exemptions and licenses with or from
Governmental Authorities and other Persons which are necessary for the
borrowing hereunder, the execution and delivery of the Credit
Documents, the performance by the Company of its obligations hereunder
and thereunder have been effected or obtained and are in full force
and effect.
(e) Binding Agreements. This Agreement constitutes, and the Notes,
when executed and delivered pursuant hereto for value received will
constitute, the valid and legally binding obligations of the Company
enforceable in accordance with their terms, subject to the effect of
bankruptcy, insolvency, reorganization, moratorium or other similar
laws now or hereafter in effect relating to or affecting the rights
and remedies of creditors; and the effect of general principles of
equity, regardless of whether enforcement is sought in a proceeding at
law or in equity, and the discretion of the court before which any
proceeding therefor may be brought.
(f) Litigation. There are no proceedings or investigations, so far
as the executive officers of the Company know, pending or threatened
before any court or arbitrator or before or by any Governmental
Authority which (i) in any one case or in the aggregate, if determined
adversely to the interests of the Company or any of its Subsidiaries,
could reasonably be expected to have a Material Adverse Effect, (ii)
relates to any Credit Document or the lending transactions
contemplated hereby and thereby or (iii) seeks to (or is expected to)
rescind, terminate, revoke, cancel, withdraw, suspend, modify or
withhold any material license or permit of the Company or any of the
Subsidiaries.
(g) No Conflicts. There is no statute, regulation, rule, order or
judgment, and no provision of any material agreement or instrument
binding on the Company or any of its Subsidiaries, or affecting their
respective properties and no provision of the certificate of
incorporation, by-laws, governing partnership agreement or other
organizational document of the Company or any of its Subsidiaries,
which would prohibit, conflict with or in any way prevent the
execution, delivery, or performance of the terms of the Credit
Page 34
Documents or the incurrence of the obligations provided for herein and
therein, or result in or require the creation or imposition of any
Lien on any of the Company's or its Subsidiaries' properties as a
consequence of the execution, delivery and performance of any Credit
Document or the lending transactions contemplated hereby and thereby.
(h) Financial Condition. (i)(A) The consolidated balance sheet as of
December 31, 1998, together with consolidated statements of income,
stockholders' equity and cash flows for the fiscal year then ended,
audited by KPMG, LLP, included in the Realty Income Corporation 1998
Year End Report and (B) the consolidated balance sheet as of June 30,
1999, together with the consolidated statements of income and cash
flows for the 6 months then ended certified by the chief financial
officer of the Company, heretofore delivered to the Agent, fairly
present the financial condition of the Company and its consolidated
Subsidiaries and the results of their operations as of the dates and
for the periods referred to and have been prepared in accordance with
GAAP consistently applied throughout the periods involved. As of the
date hereof, there are no material liabilities, direct or indirect,
fixed or contingent, of the Company and its Subsidiaries as of the
dates of such balance sheet which are not reflected therein or in the
notes thereto; (ii) since December 31, 1998 there has been no Material
Adverse Change.
(i) Taxes. The Company and each of its Subsidiaries has filed or
caused to be filed all tax returns which are required to be filed and
has paid all taxes required to be shown to be due and payable on said
returns or on any assessment made against it or any of its property
and all other taxes, assessments, fees, liabilities, penalties or
other charges imposed on it or any of its property by any Governmental
Authority, except for any taxes not yet delinquent and any taxes,
assessments, fees, liabilities, penalties or other charges which are
being contested in good faith and for which adequate reserves (in
accordance with GAAP) have been established.
(j) Use of Proceeds. The proceeds of the Loans will be used by the
Company for the purposes described in the Whereas clause hereto.
(k) Margin Regulations. No part of the proceeds of any Loan will be
used to purchase or carry, or to reduce, retire or refinance any
credit incurred to purchase or carry or extend credit to others for
the purpose of purchasing or carrying, any "margin stock" as defined
in Regulation U of the Board of Governors of the Federal Reserve
System.
(l) No Material Misstatements. All written information relating to
the Company and its Subsidiaries heretofore delivered by the Company
and its Subsidiaries to the Agent or any Bank in connection with the
Credit Documents is complete and correct in all material respects.
Page 35
(m) Title to Properties; Possession Under Leases. The Company and
its Subsidiaries each have good and marketable title to, or valid
leasehold interests in, all properties and assets reflected on the
consolidated balance sheet of the Company as of June 30, 1999,
referred to in Section 5.01(h), except for such properties and assets
as have been disposed of in the ordinary course of business and except
for minor defects in title that do not, individually or in the
aggregate, materially interfere with the ability of the Company or any
of such Subsidiaries to conduct its business as now conducted. All
such assets and properties are free and clear of all Liens, except
Liens permitted pursuant to this Agreement.
(n) Leases. (i) To the Company's knowledge, no condition exists
which, with the giving of notice or the passage of time, or both,
would permit any lessee to cancel its obligations under any lease to
which the Company or any Subsidiary is a party that would create,
individually or in the aggregate, a Material Adverse Effect; (ii) the
Company has received no notice that any lessee or lessees intend to
cease operations at any leased property or properties prior to the
expiration of the term of the applicable lease (other than temporarily
due to casualty, remodeling, renovation or any similar cause) that
would create, individually or in the aggregate, a Material Adverse
Effect; and (iii) to the Company's knowledge, none of the lessees or
their sublessees, if any, under any of the leases to which the Company
or any Subsidiary is a party to or is the subject of any bankruptcy,
reorganizations, insolvency or similar proceeding that would create,
individually or in the aggregate, a Material Adverse Effect.
(o) Conduct of Business. At the date hereof, the Company and its
Subsidiaries hold all authorizations, consents, approvals,
registrations, franchises, licenses and permits, with or from
Governmental Authorities and other Persons as are required or
necessary for them to own their properties and conduct their business
as now conducted unless and to the extent that any failure to hold
such authorizations, consents, approvals, registrations, franchises,
licenses and permits, individually or in the aggregate, could not have
a Material Adverse Effect.
(p) Compliance with Laws and Charter Documents. Neither the Company
nor any Subsidiary thereof is, or as a result of performing any of its
obligations under the Credit Documents will be, in violation of (a)
any law, statute, rule, regulation or order of any Governmental
Authority (including Environmental Laws) applicable to it or its
properties or assets, (b) its certificate of incorporation, by-laws,
governing partnership agreement or other organizational document or
(c) judgments or agreements to which it is a party or by which its
assets may be bound unless and to the extent that such violations,
individually or in the aggregate, would not have a Material Adverse
Effect.
Page 36
(q) ERISA. (i) Neither the Company nor any ERISA Affiliate has
engaged in a transaction with respect to any Plan which, assuming the
taxable period of such transaction expired as of the Compliance Date,
could subject the Company or any ERISA Affiliate to a tax or penalty
imposed by either Section 4975 of the Code or Section 502(i) of ERISA
in an amount that would have a Material Adverse Effect.
(ii) Except as set forth on Schedule 5.01(q), neither the Company
nor any ERISA Affiliate has incurred any liability since
December 31, 1998, under Title IV of ERISA with respect to
any Single Employer Plan. No Single-Employer Plan had an
accumulated funding deficiency, whether or not waived, as of
the last day of the most recent fiscal year of such Plan
ended prior to the Compliance Date, and each Plan has
complied in all material respects with the applicable
provisions of ERISA and the Code. Neither the Company nor
any ERISA Affiliate is (A) required to give security to any
Single-Employer Plan pursuant to Section 401(a)(29) of the
Code or Section 307 of ERISA, or (B) subject to a lien in
favor of such a Plan under Section 414(n) of the Code or
Section 302(f) of ERISA.
(iii) No liability under Section 4062, 4063, 4064 or 4069 of ERISA
has been or is expected by the Company to be incurred by the
Company or any ERISA Affiliate with respect to any Single-
Employer Plan in an amount that could have a Material
Adverse Effect. Neither the Company nor any ERISA Affiliate
has incurred or expects to incur any withdrawal liability
with respect to any Plan which is a multiemployer plan in an
amount which would have a Material Adverse Effect.
(iv) Under each Single-Employer Plan, as of the last day of the
most recent plan year ended prior to the Compliance Date,
the actuarially determined present value of all benefit
liabilities (as determined on the basis of the actuarial
assumptions contained in the Plan's most recent actuarial
valuation) did not exceed the fair market value of the asset
of such Plan by an amount that would have a Material Adverse
Effect.
(v) Insofar as the representations and warranties of the Company
contained in clause (i) above relates to any Plan which is a
multiemployer plan, such representations and warranties are
made to the best knowledge of the Company and its ERISA
Affiliates. As used in this Section, (A) "accumulated
funding deficiency" shall have the meaning assigned to such
term in Section 412 of the Code and Section 302 of ERISA;
(B) "multiemployer plan" and "plan year" shall have the
respective meanings assigned to such terms in Section 3 of
ERISA; (C) "benefit liabilities" shall have the meaning
assigned to such term in Section 4001 of ERISA; (D) "taxable
period" shall have the meaning assigned to such term in
Page 37
Section 4975 of the Code; and (E) "withdrawal liability"
shall have the meaning assigned to such term in Part 1 of
Subtitle E of Title IV of ERISA.
(r) Intellectual Property. The Company and each of its Subsidiaries
owns, or is licensed to use, all trademarks, trade names, patents and
copyrights (the "Intellectual Property") necessary for the conduct of
its business as currently conducted, including, without limitation,
the Intellectual Property listed on Schedule 5.01(r) hereto. To the
knowledge of the Company, no claim has been asserted or is pending by
any Person challenging or questioning the use by the Company or any
Subsidiary of any such Intellectual Property or the validity or
effectiveness of any such Intellectual Property, nor does the Company
know of any valid basis for any such claim. To the knowledge of the
Company, the use of such Intellectual Property by the Company and its
Subsidiaries does not infringe on the rights of any Person, nor, to
the knowledge of the Company, are there any uses by other Persons of
such Intellectual Property which infringe on the rights of the Company
and its Subsidiaries.
(s) Not an Investment Company or Public Utility Holding Company.
Neither the Company nor any of its Subsidiaries is or, after giving
effect to the transactions contemplated hereby will be (i) an
"investment company" or a company "controlled" by an "investment
company" within the meaning of the Investment Company Act of 1940, as
amended or (ii) subject to regulation under the Public Utility Holding
Company Act of 1935, the Federal Power Act or any foreign, federal,
state or local statute or regulation limiting its ability to incur
indebtedness for money borrowed as contemplated hereby.
(t) Environmental Matters. Except as they would not individually or
in the aggregate have a Material Adverse Effect (i) the businesses as
presently or formerly engaged in by the Company and its Subsidiaries
are and have been conducted in compliance with all applicable
Environmental Laws, including, without limitation, having all permits,
licenses and other approvals and authorizations, during the time the
Company and its Subsidiaries engaged in such businesses, (ii) the
properties presently or formerly owned or operated by the Company and
its Subsidiaries (including, without limitation, soil, groundwater or
surface water on, under or adjacent to the properties, and buildings
thereon) (the "Properties") do not contain any Hazardous Substance
other than in compliance with applicable Environmental Law (provided,
however, that with respect to Properties formerly owned or operated by
the Company and its Subsidiaries, such representation is limited to
the period the Company owned or operated such Properties), (iii)
neither the Company or any of its Subsidiaries has received any
notices, demand letters or request for information from any Federal,
state, local or foreign governmental entity or any third party
indicating that the Company or any of its Subsidiaries may be in
violation of, or liable under, in any respect, any Environmental Law
in connection with the ownership or operation of the Company's
businesses, (iv) there are no civil, criminal or administrative
Page 38
actions, suits, demands, claims, hearings, investigations or
proceedings pending or threatened against the Company or any of its
Subsidiaries with respect to the Company or any of its Subsidiaries or
the Properties relating to any violation, or alleged violation, of any
Environmental Law, (v) no reports have been filed, or are required to
be filed, by the Company or any of its Subsidiaries concerning the
release of any Hazardous Substance or the threatened or actual
violation of any Environmental Law on or at the Properties, (vi) no
Hazardous Substance has been disposed of, transferred, released or
transported from any of the Properties during the time such Property
was owned or operated by the Company or any of its Subsidiaries, other
than in compliance with applicable Environmental Law, (vii) there have
been no environmental investigations, studies, audits, tests, reviews
or other analyses conducted by or which are in the possession of the
Company or any of its Subsidiaries relating to the Company or such
Subsidiary or the Properties which have not been delivered to the
Banks prior to the date hereof, (viii) none of the Properties has been
used at any time by the Company or any of its Subsidiaries as a
sanitary landfill or hazardous waste disposal site and (ix) neither
the Company nor any of its Subsidiaries has incurred, and none of the
Properties are presently subject to, any material liabilities (fixed
or contingent) relating to any suit, settlement, court order,
administrative order, judgment or claim asserted or arising under any
Environmental Law.
(u) Solvency. On the date of each Loan hereunder, and after the
payment of all estimated legal, investment banking, accounting and
other fees related hereto, the Company and each of its Subsidiaries
will be Solvent.
(v) Insurance. The properties (other than properties leased to other
Persons) and operations of the Company and its Subsidiaries of a
character usually insured by companies of established reputation
engaged in the same or a similar business similarly situated are
adequately insured, by financially sound and reputable insurers,
against loss or damage of the kinds and in amounts customarily insured
against by such Persons, and the Company and its Subsidiaries carry,
with such insurers in customary amounts, such other insurance as is
usually carried by companies of established reputation engaged in the
same or a similar business similarly situated.
(w) REIT Status. The Company qualifies, and will elect or has
elected to be treated, as a real estate investment trust under
Sections 856 through 860 of the Code and the rules and regulations
thereunder (a "REIT") beginning with its taxable year ending
December 31, 1993. No fact, event or condition has occurred which
could jeopardize the Company's tax status as a REIT.
(x) Year 2000 Issue. The Company and its Subsidiaries have reviewed
the effect of the Year 2000 Issue on the computer software, hardware
and firmware systems and equipment containing embedded microchips
owned or operated by or for the Company and its Subsidiaries or used
Page 39
or relied upon in the conduct of their business (including systems and
equipment supplied by others or with which such computer systems of
the Company and its Subsidiaries interface). The costs to the Company
and its Subsidiaries of any reprogramming required as a result of the
Year 2000 Issue to permit the proper functioning of such systems and
equipment and the proper processing of data, and the testing of such
reprogramming, and of the reasonably foreseeable consequences of the
Year 2000 Issue to the Company or any of its Subsidiaries (including
reprogramming errors and the failure of systems or equipment supplied
by others) are not reasonably expected to result in a Default or Event
of Default or to have a Material Adverse Effect.
ARTICLE VI
CONDITIONS OF LENDING
Section 6.01. Conditions to the Availability of the Commitment. The
obligations of each Bank hereunder are subject to, and the Banks'
Commitment shall not become available until the date (the "Effective
Date") on which, each of the following conditions precedent shall have
been satisfied or waived in writing by each of the Banks, and upon
such satisfaction or waiver each Bank will give a written confirmation
of the same to the Company on request:
(a) Credit Agreement. The Agent shall have received this Agreement
duly executed and delivered by each of the Banks and the Company.
(b) Notes. The Agent on behalf of each Bank shall have received Pro
Rata Notes in the principal amounts set forth in Sections 2.03, duly
executed and delivered by the Company.
(c) Good Standing Certificates. The Agent on behalf of the Banks
shall have received from the Company copies of good standing
certificates, dated within five (5) days prior to the date hereof,
confirming the Company's representation as to good standing in
Section 5.01(b).
(d) Secretary's Certificate. The Agent on behalf of the Banks shall
have received from the Company a certificate from the Secretary or
Assistant Secretary of the Company, dated as of the date hereof, (i)
certifying the incumbency of the officers executing the Credit
Documents and all related documentation, (ii) attaching and certifying
the resolutions of the Board of Directors of the Company relating to
the execution, delivery and performance of this Agreement, and (iii)
attaching and certifying the Certificate of Incorporation and By-laws
of the Company.
(e) Authorizations. The Agent shall have received copies of all
authorizations, consents, approvals, registrations, notices,
exemptions and licenses with or from Governmental Authorities and
other Persons which are necessary for the borrowing hereunder, the
execution and delivery of the Credit Documents, the performance by the
Company of its obligations hereunder and thereunder.
Page 40
(f) Opinions of Company Counsel. The Agent shall have received the
favorable written opinions, dated the date hereof, of Xxxxxx &
Xxxxxxx, special New York counsel for the Company, in substantially
the form of Exhibit D-1 and of Xxxxxxx X. Xxxxxxxx, General Counsel of
the Company, in substantially the form of Exhibit D-2.
(g) Litigation. There shall not be pending or threatened any action
or proceeding before any court or administrative agency relating to
the lending transactions contemplated by this Agreement or any Note
which, in the judgment of the Agent or any Bank, could materially
impair the ability of the Company to perform its obligations hereunder
or thereunder.
(h) Other Agreements. The Agent shall have received copies of all
tax sharing, management and other similar agreements between the
Company and any of its Subsidiaries or Affiliates, which shall be in
form and substance satisfactory to the Agent.
(i) Subsidiary Guaranty. One or more duly executed Subsidiary
Guaranties, to the extent required by Section 7.02(e).
(j) Fees. The Agent shall have received from the Company the fees
set forth in Section 2.04 and fees of Agent's counsel which are due
and payable on the Effective Date.
(k) Other Documents. The Agent shall have received such other
certificates and documents as the Agent and the Banks reasonably may
require.
Section 6.02. Conditions to All Loans. The obligations of each Bank
in connection with each Loan (including the Initial Loan) are subject
to the conditions precedent that, on the date of each such Loan and
after giving effect thereto, each of the following conditions
precedent shall have been satisfied or waived in writing by each Bank,
and upon such satisfaction or waiver each Bank will give a written
confirmation of the same to the Company on request:
(a) Requests. For each Loan, the Agent shall have received a Pro Rata
Loan Request in substantially the form of Exhibit B.
(b) No Default. No Default or Event of Default shall have occurred
and be continuing, and the Agent shall have received from the Company
a certificate to that effect signed by an authorized officer of the
Company.
(c) Representations and Warranties; Covenants. The representations
and warranties contained in Article V (other than representations and
warranties that speak as of a specific date) shall be true and correct
with the same effect as though such representations and warranties had
been made at the time of such Loan, and the Agent shall have received
from the Company a certificate to that effect signed by an authorized
officer of the Company.
Page 41
ARTICLE VII
COVENANTS
Section 7.01. Affirmative Covenants. Until the Termination Date, and
thereafter until payment in full of the Notes and performance of all
other obligations of the Company hereunder (other than Unmatured
Surviving Obligations), the Company will:
(a) Financial Statements; Compliance Certificates. Furnish to the
Agent and to each Bank:
(i) as soon as available, but in no event more than 60 days
following the end of each fiscal quarter, copies of all
consolidated quarterly balance sheets, income statements and
other financial statements and reports of the Company and
its Subsidiaries, prepared in a format and in scope
consistent with the financial statements and reports of the
Company referenced in Section 5.01(h);
(ii) as soon as available, but in no event more than 105 days
following the end of each fiscal year, a copy of the annual
consolidated audit report and financial statements relating
to the Company and its Subsidiaries, certified by KPMG, LLP,
one of the other major nationally recognized accounting
firms or another independent certified public accountant
reasonably satisfactory to the Agent, prepared in a format
and in scope consistent with the December 31, 1998 financial
statements and reports of the Company referenced in Section
5.01(h);
(iii) as soon as available, but in no event later than 105 days
following the end of each fiscal year, an annual forecast
for the then-current fiscal year, prepared in a manner and
in the form of the forecast provided on the date of this
Agreement or in such other form as is reasonably acceptable
to the Agent and the Required Banks together with an annual
rent roll dated the most-recent December 31;
(iv) together with each of the financial statements delivered
pursuant to clauses (i) and (ii) of this Section 7.01(a), a
certificate of the Chief Financial Officer of the Company
stating whether as of the last dates of such financial
statements any event or circumstance exists which
constitutes a Default or Event of Default and, if so,
stating the facts with respect thereto, together with
calculations, where applicable, which establish in
reasonable detail the Company's (and where applicable, each
of the Company's Subsidiaries') compliance with the
provisions of this Agreement;
Page 42
(v) promptly upon receipt thereof, copies of any reports and
management letters submitted to the Company or any of its
Subsidiaries or their accountants in connection with any
annual or interim audit of the books of the Company or its
Subsidiaries, together with the responses thereto, if any;
and
(vi) such additional information, reports or statements as the
Agent and the Banks from time to time may reasonably request
including but not limited to the quarterly furnishing to the
Agent of the most recent Property Management Exception
Report in a form substantially similar to Exhibit E hereto,
a list of the Company's current property portfolio and a
list of the Company's past quarter's acquisitions on an
acquisition cost basis, an appraised value basis (to the
extent available) and a projected annual rent basis.
(b) Notification of Defaults and Adverse Developments. Notify the
Agent (i) promptly, and in any event not later than five Business Days
after the discovery by any officer of the Company of the occurrence of
any Default or Event of Default; (ii) promptly, and in any event not
later than five Business Days after the discovery by any officer of
the Company of the occurrence of a Material Adverse Change; (iii)
promptly, and in any event not later than ten Business Days after the
discovery by any officer of the Company of any litigation or
proceedings that are (to the knowledge of any executive officer of the
Company) instituted or threatened against the Company or its
Subsidiaries or any of their respective assets that (a) could
reasonably be expected to have a Material Adverse Effect or (b) seeks
to (or is expected to) rescind, terminate, revoke, cancel, withdraw,
suspend, modify or withhold any material license or permit of the
Company or any of the Subsidiaries; (iv) promptly, and in any event
not later than five Business Days after the discovery by any officer
of the Company of the occurrence of each and every event which would
be an Event of Default (or an event which with the giving of notice or
lapse of time or both would be an Event of Default) under any
Indebtedness of the Company or any of its Subsidiaries in a principal
amount in excess of $5,000,000, such notice to include the names and
addresses of the holders of such Indebtedness and the amount thereof
and (v) promptly, and in any event not later than five days after the
end of each calendar quarter in which the Company receives notice of a
change in the rating published by any of the Rating Agencies with
respect to the Company's senior unsecured debt, notice of such change
in rating. Upon receipt of any such notice of Default or adverse
development, the Agent shall forthwith give notice to each Bank of the
details thereof.
(c) Notice of ERISA Events. Within 10 days after the Company or any
ERISA Affiliate knows that any of the events described in the
succeeding two sentences have occurred, the Company shall furnish to
the Agent a statement signed by a senior officer of the Company
describing such event in reasonable detail and the action, if any,
Page 43
proposed to be taken with respect thereto. The events referred to in
the preceding sentence are, with respect to any Single Employer Plan:
(i) any reportable event described in Section 4043 of ERISA, other
than a reportable event for which the 30-day notice requirement has
been waived by the PBGC; (ii) the provision to any affected party as
such term is defined in Section 4001 of ERISA of a notice of intent to
terminate the Plan; (iii) the adoption of or amendment to the Plan if,
after giving effect to such amendment, the Plan is a plan described in
Section 4021(b) of ERISA; (iv) receipt of notice of an application by
the PBGC to institute proceedings to terminate the Plan pursuant to
Section 4042 of ERISA; (v) withdrawal from or termination of the Plan
during a plan year for which the Company or any ERISA Affiliate is or
would be subject to liability under Sections 4063 or 4064 of ERISA;
(vi) cessation of operations by the Company or any ERISA Affiliate at
a facility under the circumstances described in Section 4062(e) of
ERISA; (vii) adoption of an amendment to the Plan which would require
security to be given to the Plan pursuant to Section 401(a)(29) of the
Code or Section 307 of ERISA; and (viii) failure by the Company or any
ERISA Affiliate to make any payment to the Plan which would give rise
to a lien in favor of the Plan under Section 414(n) of the Code or
302(f) of ERISA. Such events shall also include receipt of notice of
withdrawal liability pursuant to Section 4202 of ERISA with respect to
a Plan that is a multiemployer plan.
(d) Other Reports, Notices and Materials. Furnish to the Agent (i)
as soon as available copies of reports, notices and other materials
sent to the Company or any of its Subsidiaries from any Governmental
Authority, including the Securities and Exchange Commission, the
Internal Revenue Service and PBGC and (ii) within 90 days of adoption
by the Company's board of directors, copies of any revisions,
supplements, amendments or restatements to the Real Estate Investment
Criteria.
(e) Environmental Matters. (i) Comply, and cause its Subsidiaries to
comply, in all material respects, with all applicable Environmental
Laws, (ii) notify the Agent promptly after receiving notice or
becoming aware of any order, notice, claim or proceeding under any
Environmental Laws, other than those that are clearly not material,
and (iii) promptly forward to Agent a copy of any Environmental Claim,
order, notice, permit, application, or any other communication or
report received by Company or any of its Subsidiaries in connection
with any such matters as they may affect such premises, if material.
(f) Taxes. Pay and discharge, and cause each of its Subsidiaries to
pay and discharge, all taxes, assessments and governmental charges
upon it, its income and its properties prior to the date on which
penalties attach thereto, unless and to the extent that (i) such
taxes, assessments and governmental charges shall be contested in good
faith and by appropriate proceedings by the Company or such
Subsidiary, as the case may be, (ii) adequate reserves (in accordance
with GAAP) are maintained by the Company or such Subsidiary, as the
Page 44
case may be, with respect thereto, and (iii) any failure to pay and
discharge such taxes, assessments and governmental charges could not
have a Material Adverse Effect.
(g) Insurance. Maintain, and cause each of its Subsidiaries to
maintain, insurance with responsible insurance companies against such
risks, on such properties and in such amounts as is customarily
maintained by similar businesses; and file and cause each of its
Subsidiaries to file with the Agent upon its request or the request of
any Bank a detailed list of the insurance companies, the amounts and
rates of the insurance, the dates of the expiration thereof and the
properties and risks covered thereby.
(h) Corporate Existence. Except as permitted by Section 7.02(c),
maintain, and cause each of its Subsidiaries to maintain, its
existence in good standing and qualify and remain qualified to do
business in each jurisdiction in which the character of the properties
owned or leased by it therein or in which the transaction of its
business is such that the failure to maintain such existence or to
qualify could reasonably be expected to have a Material Adverse
Effect.
(i) Authorizations. Obtain, make and keep in full force and effect
all material authorizations from and registrations with Governmental
Authorities.
(j) Maintenance of Records. Maintain, and cause each of its
Subsidiaries to maintain, complete and accurate books and records in
which full and correct entries in conformity with GAAP shall be made
of all dealings and transactions in its respective business and
activities.
(k) Inspection. Permit, and cause each of its Subsidiaries to
permit, the Agent and the Banks to have one or more of their officers
and employees, or any other Person designated by the Agent or the
Banks, visit and inspect any of the properties of the Company and its
Subsidiaries (upon reasonable request and notice and in accordance
with the agreement, if any, relating to any such property) and to
examine the minute books, books of account and other records of the
Company and its Subsidiaries and make copies thereof or extracts
therefrom, and discuss its affairs, finances and accounts with its
officers and, at the request of the Agent or the Banks, with the
Company's independent accountants, during normal business hours and at
such other reasonable times and as often as the Agent or the Banks
reasonably may desire.
(l) Conduct of Business. (i) Engage in as its principal business
investing in real estate in the United States, (ii) preserve, renew
and keep in full force and effect all its material contracts, (iii)
preserve, renew and maintain in full force and effect all its
franchises and licenses material to the normal conduct of its business
as now conducted, and (iv) comply with all of the terms of all
Page 45
instruments which evidence, secure or govern the Indebtedness of the
Company and its Subsidiaries and all material laws, rules and
regulations of all Governmental Authorities.
(m) Maintenance of Property, Etc. With only such exceptions that
individually or in the aggregate would not have a Material Adverse
Effect (i) maintain, keep and preserve and cause each of its
Subsidiaries to maintain, keep and preserve all of its properties in
good repair, working order and condition and from time to time make
all necessary and proper repairs, renewals, replacements, and
improvements thereto (provided that in the properties subject to sale
agreements, to the extent permitted by Section 7.02(c)(iii),
compliance with the terms of such agreement shall be deemed to
constitute compliance with this Section 7.01(m)(i)), and (ii)
maintain, preserve and protect and cause each of its Subsidiaries to
maintain, preserve and protect all franchises, licenses, copyrights,
patents and trademarks material to its business, so that the business
carried on in connection therewith may be properly and advantageously
conducted at all times.
(n) Insurance on Leased Properties. Use its, and cause its
Subsidiaries to use their, commercially reasonable best efforts to
ensure that each lessee of a property owned in whole or in part,
directly or indirectly, by the Company or any Subsidiary, and each
mortgagor of a property on which the Company or any Subsidiary holds a
mortgage, has, and until the Termination Date will keep, in place
adequate insurance which names the Company or such Subsidiary as a
loss payee. For the purposes of the preceding sentence "adequate
insurance" shall mean insurance, with financially sound and reputable
insurers in such amounts and insuring against such risks as are
customarily maintained by similar businesses.
(o) Further Assurances. The Company agrees to do all acts and
things, as may be required by law or as, in the reasonable judgement
of the Agent, may be necessary or advisable to carry out the intent
and purpose of this Agreement.
(p) Year 2000. Take all necessary action to complete in all material
respects by December 31, 1999, the reprogramming of computer software,
hardware and firmware systems and equipment containing embedded
microchips owned or operated by or for the Company and its
Subsidiaries or used or relied upon in the conduct of their business
(including systems and equipment supplied by others or with which such
systems of the Company or any of its Subsidiaries interface) required
as a result of the Year 2000 Issue to permit the proper functioning of
such computer systems and other equipment and the testing of such
systems and equipment, as so reprogrammed. At the request of the
Agent, the Company shall provide, and shall cause each of its
Subsidiaries to provide, to the Agent, such information as may
reasonably be requested relating to its compliance with the preceding
sentence.
Page 46
Section 7.02. Negative Covenants. Until the Termination Date, and
thereafter until payment in full of the Notes and performance of all
other obligations of the Company hereunder (other than Unmatured
Surviving Obligations), the Company will not:
(a) Indebtedness. Create, incur or assume any Indebtedness, except
(i) Indebtedness to the Agent and the Banks hereunder and under the
Notes, (ii) Indebtedness incurred to pay dividends enabling the
Company to maintain its status as a REIT, (iii) Indebtedness incurred
to purchase Interest Rate Protection Agreements, (iv) Indebtedness
that would otherwise be permitted under the Credit Documents and (v)
Indebtedness incurred under the Unsecured Revolver, provided that, in
each of the aforementioned cases (other than (v)), (A) such
Indebtedness is unsecured (B) the maturity of such Indebtedness
(including all scheduled payments of principal) is later than the
Termination Date (C) such Indebtedness ranks pari passu or subordinate
to the Notes and (D) after giving effect to the incurrence of such
Indebtedness, the Company's and its Subsidiaries interest coverage
ratio on a consolidated basis referred to in Section 7.03(c) herein
for the most recent four-quarter period ending on the ending date of
the Company's last fiscal quarter would have been greater than
2.00:1.00; provided, that the limitations contained in the foregoing
clauses (A) and (B) shall not apply to Indebtedness having an
aggregate principal amount at any time less than 5% of Consolidated
Total Assets. The Company shall not permit any Subsidiary to create,
incur, assume or suffer to exist any Indebtedness except Indebtedness
which does not exceed, at any time, 5.0% of Consolidated Total Assets
("Permitted Subsidiary Indebtedness"), provided that if such Permitted
Subsidiary Indebtedness is secured, (x) the principal amount thereof
shall be applied towards (and shall accordingly limit) the amount of
secured Indebtedness which the Company is permitted to incur pursuant
to the first sentence of this Section 7.02(a), and (y) such secured
Indebtedness shall in addition be permitted by Section 7.02(b).
(b) Mortgages and Pledges. Create, incur, assume or suffer to exist,
or permit any of its Subsidiaries to create, incur, assume or suffer
to exist, any Lien of any kind upon or in any of its property or
assets, whether now owned or hereafter acquired, except that this
Section 7.02(b) shall not apply (i) to Permitted Encumbrances and (ii)
to other Liens securing Indebtedness permitted by Section 7.02(a), if
immediately after giving effect to the incurrence of such Indebtedness
and the application of the proceeds therefrom on a pro forma basis,
the aggregate principal amount of all such Indebtedness of the Company
and its Subsidiaries on a consolidated basis determined in accordance
with GAAP is not greater than 5% of Consolidated Total Assets.
(c) Merger, Acquisition or Sales of Assets. (i) Acquire, or permit
any of its Subsidiaries to acquire, all or any substantial portion of
the assets of any Person other than (a) the acquisition of property in
the ordinary course of the Company's business; or (b) the acquisition
of the equity interests of an entity for the purpose of controlling
the property of that entity in the ordinary course of the Company's
Page 47
business, provided that the aggregate purchase price paid by the
Company in all transactions under this clause (b) and clause (ii)(b)
below shall not exceed 10% of Consolidated Total Assets as of June 30,
1999; (ii) enter into any merger or consolidation, or permit any
Subsidiary to do so, other than (a) a merger or consolidation of a
Wholly Owned Subsidiary with one or more other Wholly Owned
Subsidiaries or into the Company, (b) a merger or consolidation of a
Subsidiary or the Company with an entity for the purpose of
controlling the property of that entity in the ordinary course of the
Company's business, provided that the aggregate purchase price paid by
the Company in all transactions under this clause (b) and clause
(i)(b) above shall not exceed 10% of Consolidated Total Assets as of
June 30, 1999, or (c) a merger of the Company into another corporation
primarily for the purpose of changing the jurisdiction of
incorporation of the Company, provided that the surviving entity shall
assume all obligations of the Company hereunder; or (iii) sell, lease
or otherwise dispose of any assets of the Company or any of the
Subsidiaries other than in the ordinary course of the Company's
business for the fair market value thereof.
(d) Negative Pledge. Grant any Person a negative pledge on any
assets of the Company or of the Subsidiaries, except as may be
provided in (i) any Permitted Subsidiary Indebtedness, (ii)
Indebtedness under the Unsecured Revolver and (iii) other Indebtedness
permitted by Section 7.02(a) having an aggregate principal amount not
exceeding $25,000,000.
(e) Loans and Investments. Purchase or acquire the obligations or
stock of, or any other interest in, or make loans, advances or capital
contributions to, or form any joint ventures or partnerships with, any
Person, or permit any Subsidiary so to do, except (i) investments in
real estate which satisfy each of the Real Estate Investment Criteria,
as determined by the Board of Directors from time to time, (ii)
securities issued or directly and fully guaranteed or insured by the
United States of America or any agency or instrumentality thereof
(provided that the full faith and credit of the United States of
America is pledged in support thereof) having maturities of not more
than twelve months from the date of acquisition, (iii) U.S. dollar
denominated time deposits, certificates of deposit and bankers'
acceptances of (x) any Bank, (y) any domestic commercial bank of
recognized standing having capital and surplus in excess of
$500,000,000 or (z) any bank (or the parent company of such bank)
whose short-term commercial paper rating from Standard & Poor's
Corporation, a division of the McGraw Hill Companies, Inc., ("S&P") is
at least A-1 or the equivalent thereof or from Xxxxx'x Investors
Service, Inc. ("Xxxxx'x") is at least P-1 or the equivalent thereof
(any such bank, an "Approved Bank"), in each case with maturities of
not more than twelve months from the date of acquisition, (iv)
repurchase obligations with a term of not more than seven days for
underlying securities of the types described in clause (ii) above
entered into with any bank meeting the qualifications specified in
clause (iii) above, (v) commercial paper issued by any Bank or
Page 48
Approved Bank or by the parent company of any Bank or Approved Bank
and commercial paper issued by, or guaranteed by, any industrial or
financial company or by any agency of the Federal Government with a
short-term commercial paper rating of at least A-1 or the equivalent
thereof by S&P or at least P-1 or the equivalent thereof by Moody's
(any such company, an "Approved Company"), or guaranteed by any
industrial company with a long-term unsecured debt rating of at least
A or A2, or the equivalent of each thereof, from S&P or Moody's, as
the case may be, and in each case maturing within twelve months after
the date of acquisition, (vi) investments in money market funds
substantially all of whose assets are comprised of securities of the
type described in clauses (ii) through (v) above, (vii) capital
contributions to a Subsidiary by the Company or a Subsidiary of the
purchase price for acquisitions by such Subsidiary of properties that
the Company would be allowed to acquire directly under this Agreement,
provided that a Subsidiary Guaranty of the Company's payment
obligations under this Agreement, in the form attached hereto as
Exhibit G, shall remain in full force and effect; (viii) capital
contributions after taking account of any distributions to the
Company, including intercompany loans and advances, to any Subsidiary
that has not provided a Subsidiary Guaranty, provided that such
capital contributions shall not exceed $50,000,000 at any time and
(ix) shares of the Company's common stock, preferred stock or its
8.25% Monthly Income Senior Notes due 2008; provided, that the Company
shall not spend more than $25,000,000 in the aggregate during the term
of this Agreement in acquiring such shares or such Senior Notes.
(f) Real Estate Development. Purchase or acquire, or agree (pursuant
to a binding agreement) to purchase or acquire, the obligations or
stock of, or any other interest in, or make loans, advances or capital
contributions to, or form any joint ventures or partnerships with, or
make any other expenditures with respect to, any Real Estate
Development Project, if, in the aggregate, the total project costs
required to be made in connection with all such purchases,
acquisitions, loans, advances, capital contributions or expenditures
would be greater than $100,000,000, at any one time, or permit any
Subsidiary so to do.
(g) Dividends and Purchase of Stock. Declare any dividends (other
than dividends payable in capital stock of the Company) on any shares
of any class of its capital stock, or apply any of its property or
assets to the purchase, redemption or other retirement of, or set
apart any sum for the payment of any dividends on, or for the
purchase, redemption or other retirement of, or make any other
distribution by reduction of capital or otherwise in respect of, any
shares of any class of capital stock of the Company, or permit any
Subsidiary which is not a Wholly Owned Subsidiary so to do, or permit
any Subsidiary to purchase or acquire any shares of any class of
capital stock of the Company; provided, however, that so long as an
Event of Default pursuant to Section 8.01(a) has not occurred and is
not continuing, the Company may, and may permit its Subsidiaries to,
pay dividends and other distributions with respect to capital stock,
Page 49
except that this Section 7.02(g) shall not apply to the Company's
expenditure of up to $25,000,000 in the aggregate during the term of
this Agreement for the purchases of its own common stock or preferred
stock.
(h) Stock of Subsidiaries. Issue, sell or otherwise dispose of any
shares of capital stock of any Subsidiary (except in connection with
(A) a merger or consolidation of a Wholly Owned Subsidiary permitted
by Section 7.02(c) or with the dissolution of any Subsidiary)
provided, that such dissolution shall not be for the purpose of
avoiding the provisions of this Section 7.02(h)), (B) investments in
Subsidiaries permitted by Section 7.02(e), or (C) the issuance and
sale to Persons other than the Company of an amount not greater than
10% of the outstanding shares of such capital stock in connection with
the formation and capitalization of the Subsidiary described in
Section 7.02(e)(viii), or permit any Subsidiary to issue any
additional shares of its capital stock except to its existing
stockholders.
(i) Terms of Indebtedness. Unless otherwise expressly permitted by
this Agreement and other than with respect to the Unsecured Revolver,
amend or modify, or permit to be amended or modified the terms of any
Company or Subsidiary Indebtedness for borrowed money or any documents
relating thereto in a manner which would (i) increase the principal
amount of such Indebtedness, (ii) increase the interest borne by such
Indebtedness, (iii) shorten the maturity of such Indebtedness or (iv)
elevate, in relation to the Loans, the ranking in terms of payment of
such Indebtedness, without prior written consent of the Agent.
(j) Certain Amendments. Amend or modify (i) the Company's
certificate of incorporation, (ii) the Real Estate Investment Criteria
to a material degree or (iii) without the approval of the independent
members of the Company's board of directors, any tax sharing,
management or other similar agreement between or among the Company and
any of its Subsidiaries.
(k) Transactions with Affiliates. Enter into any transactions,
including without limitation, the purchase, sale or exchange of
property or the rendering of any service, with any Affiliate, or
permit any Subsidiary so to do, except in the ordinary course of and
pursuant to the reasonable requirements of its business and upon the
approval of a majority of the disinterested members of the board of
directors or a committee of such disinterested members.
(l) Mortgage Financings. Enter into any mortgage financings, as a
borrower thereunder, except that this Section 7.02(l) shall not apply
to mortgage financings involving a Lien on any real estate assets of
the Company or a Subsidiary to the extent permitted by Section
7.02(b).
Page 50
(m) Significant Properties. Without the prior written consent of the
Required Banks (which consent shall not be unreasonably withheld, and
which consent the Banks and the Agent shall use their best efforts to
grant or deny within 10 Business Days of receipt by the Agent of the
Company's written request therefor, provided that the failure to
grant, deny or explain the inability to make a determination about
such consent for 20 Business Days after the Agent's receipt of the
Company's request shall be deemed to constitute a grant of such
consent), purchase or acquire an interest in (i) multi-tenant office
buildings, (ii) hotels, motels, bowling alleys or mobile home parks or
(iii) any individual lot of property the price of which exceeds
$25,000,000 or two contiguous lots occupied by more than one tenant,
the price of which exceeds $50,000,000.
(n) Industry and Tenant Concentration. (i) Permit, at any time, its
tenants conducting business in any one industry (determined by the SIC
Code) to comprise more than 25% of total Consolidated Annualized Base
Rent (measured on a quarterly basis and detailed on the compliance
certificate issued in accordance with Section 6.02(c)), provided that
in the case of the child care industry, the Company shall not permit,
at any time, its tenants conducting business in the child care
industry to comprise more than 30% of total Consolidated Annualized
Base Rent (measured at the end of each fiscal quarter and detailed on
the compliance certificate issued in accordance with Section 6.02(c))
or (ii) permit, at any time, any one of its tenants to comprise more
than 15% of total Consolidated Annualized Base Rent (measured at the
end of each fiscal quarter and detailed on the compliance certificate
issued in accordance with Section 6.02(c)), provided that in the case
of Children's World Learning Centers, the Company shall not permit, at
any time, Children's World Learning Centers to comprise more than 20%
of total Consolidated Annualized Base Rent (measured at the end of
each fiscal quarter and detailed on the compliance certificate issued
in accordance with Section 6.02(c)).
Section 7.03. Financial Covenants. Until the Termination Date, and
thereafter until payment in full of the Notes and performance of all
other obligations of the Company hereunder (other than Unmatured
Surviving Obligations),
(a) Tangible Stockholders' Equity. The Company will maintain
Consolidated Tangible Stockholders' Equity of not less than the sum of
(i) $400,000,000 plus (ii) 75% of the sum of the net proceeds received
by the Company after December 31, 1999 from any offering of its equity
securities.
(b) Leverage Ratio. The Company will maintain, as measured at the
end of each fiscal quarter, a Leverage Ratio of not more than
1.00:1.00.
Page 51
(c) Interest Coverage Ratio. The Company will not permit the ratio
of (i) the sum of Consolidated Funds from Operations and Consolidated
Interest Expense to (ii) Consolidated Interest Expense for the four
quarter period ending on the last day of each fiscal quarter to be
less than 2.00:1.00.
ARTICLE VIII
EVENTS OF DEFAULT
Section 8.01. Events of Default. If one or more of the following
events (each, an "Event of Default") shall occur:
(a) Default shall be made in the payment of any installment of
principal of any Loan when due and payable, whether at maturity, by
notice of intention to prepay or otherwise; or default shall be made
in the payment of any installment of interest upon any Loan when due
and payable, and such default shall have continued for five days; or
(b) Default shall be made in the payment of the Facility Fee or any
other fee or amount payable hereunder when due and payable and such
default shall have continued for five days; or
(c) Default shall be made in the due observance or performance of any
term, covenant, or agreement contained in Section 7.01(j) or in
Section 7.03; or
(d) Default shall be made in the due observance or performance of any
other term, covenant or agreement contained in this Agreement, and
such default shall have continued unremedied for a period of 30 days
after any officer of the Company becomes aware, or should have become
aware, of such default; or
(e) Any representation or warranty made or deemed made by the Company
herein or any statement or representation made in any certificate or
report delivered by or on behalf of the Company in connection herewith
or in connection with any Note shall prove to have been false or
misleading in any material respect when made; or
(f) Any obligation (other than its obligation hereunder) of the
Company or any of its Subsidiaries for the payment of Indebtedness in
excess of $1,000,000 is not paid when due or within any grace period
for the payment therefor or becomes or is declared to be due and
payable prior to the expressed maturity thereof, or there shall have
occurred an event which, with the giving of notice or lapse of time,
or both, would cause any such obligation to become, or allow any such
obligation to be declared to be, due and payable; or
(g) An involuntary case or other proceeding shall be commenced
against the Company or any Subsidiary seeking liquidation,
reorganization or other relief with respect to it or its debts under
Page 52
any applicable Federal or State bankruptcy, insolvency, reorganization
or similar law now or hereafter in effect or seeking the appointment
of a custodian, receiver, liquidator, assignee, trustee, sequestrator
or similar official of it or any substantial part of its property, and
such involuntary case or other proceeding shall remain undismissed and
unstayed, or an order or decree approving or ordering any of the
foregoing shall be entered and continued unstayed and in effect, in
any such event, for a period of 60 days; or
(h) The commencement by the Company or any of its Subsidiaries of a
voluntary case or proceeding under any applicable Federal or State
bankruptcy, insolvency, reorganization or other similar law or of any
other case or proceeding to be adjudicated a bankrupt or insolvent, or
the consent by any of them to the entry of a decree or order for
relief in respect of the Company or any of its Subsidiaries in an
involuntary case or proceeding under any applicable Federal or State
bankruptcy, insolvency, reorganization or other similar law or to the
commencement of any bankruptcy or insolvency case or proceeding
against any of them, or the filing by any of them of a petition or
answer or consent seeking reorganization or relief under any
applicable Federal or State law, or the consent by any of them to the
filing of such petition or to the appointment of or taking possession
by a custodian, receiver, liquidator, assignee, trustee, sequestrator
or similar official of the Company or any of its Subsidiaries or any
substantial part of their respective property, or the making by any of
them of an assignment for the benefit of creditors, or the admission
by any of them in writing of inability to pay their debts generally as
they become due, or the taking of corporate action by the Company or
any of its Subsidiaries in furtherance of any such action; or
(i) One or more judgments against the Company or any of its
Subsidiaries or attachments against its property, which in the
aggregate exceed $1,000,000, or the operation or result of which could
be to interfere materially and adversely with the conduct of the
business of the Company or any of its Subsidiaries, remain unpaid,
unstayed on appeal, undischarged, unbonded, or undismissed for a
period of 30 days; or
(j) With respect to any Single-Employer Plan, any of the following
shall occur: (A) the provision to any affected party as such term is
defined in Section 4001 of ERISA of a notice of intent to terminate
the Plan, the adoption of an amendment to the Plan if, after giving
effect thereto, the Plan is a plan described in Section 4021(b) of
ERISA, receipt of notice of an application by the PBGC to institute
proceedings to terminate the Plan pursuant to Section 4042 of ERISA,
or any reportable event described in Section 4043 of ERISA (other than
a reportable event for which the 30-day notice requirement has been
waived by the PBGC); in each case, if the amount of unfunded benefit
liabilities, as such term is defined in Section 4001(a)(18) of ERISA,
of the Plan as of the date such event occurs is more than $5,000,000,
(B) the Company or any ERISA Affiliate incurs liability under Sections
4062(e), 4063 or 4064 of ERISA in an amount in excess of $5,000,000,
Page 53
(C) an amendment is adopted to the Plan which would require security
to be given to the Plan pursuant to Section 401(a)(29) of the Code or
Section 307 of ERISA in an amount in excess of $5,000,000, (D) the
Company or any ERISA Affiliate fails to make a payment to the Plan
which would give rise to a lien in favor of the Plan under Section
412(n) of the Code or Section 302(f) of ERISA in an amount in excess
of $5,000,000, or (E) any Person shall engage in any non-exempt
"prohibited transaction" (as defined in Section 406 or 407 of ERISA or
Section 4975 of the Code) involving any Plan, in an amount in excess
of $5,000,000; or
(k) With respect to any Plan that is a multiemployer plan within the
meaning of Section 4001(a)(3) of ERISA, any of the following shall
occur: (A) the Company or any ERISA Affiliate shall be in "default"
as defined in Section 4219(c)(5) of ERISA with respect to payments in
excess of $5,000,000 owing to such Plan as a result of the Company's
or such ERISA Affiliate's complete or partial withdrawal from such
Plan within the meaning of Sections 4203 and 4205 of ERISA,
respectively, or (B) the Company or any ERISA Affiliate shall be
delinquent in making contributions to such Plan in accordance with
Section 515 of ERISA in an amount in excess of $5,000,000.
(l) Any court or governmental or regulatory authority shall have
enacted, issued, promulgated, enforced or entered any statute, rule,
regulation, judgment, decree, injunction or other order (whether
temporary, preliminary or permanent) which is in effect and which
prohibits, enjoins or otherwise restricts in a manner that would have
a Material Adverse Effect on any of the lending transactions
contemplated under the Credit Documents; or
(m) The Company shall fail to maintain its status as a "real estate
investment trust", as such term is defined in the Code;
(n) There shall occur a Change of Control;
(o) Xxxxxx X. Xxxxx is terminated or resigns and is not replaced,
within the twelve-month period following such termination or
resignation, with a person having qualifications reasonably acceptable
to Required Lenders; or
(p) There shall occur an Event of Default under the Unsecured
Revolver.
then (i) upon the happening of any of the foregoing Events of Default,
the obligation of the Banks to make any further Loans or the
obligation of the Swing Line Bank to make any further Swing Line
Advances under this Agreement shall terminate upon declaration to that
effect delivered by the Agent or the Required Banks to the Company and
(ii) upon the happening of any of the foregoing Events of Default
which shall be continuing, the Notes shall become and be immediately
due and payable upon declaration to that effect delivered by the Agent
or the Required Banks to the Company; provided that upon the happening
Page 54
of any event specified in Section 8.01(g) or (h), the Notes shall
become immediately due and payable and the obligation of the Banks to
make any further Loans hereunder shall terminate without declaration
or other notice to the Company. The Company expressly waives any
presentment, demand, protest or other notice of any kind.
ARTICLE IX
THE AGENT AND THE BANKS
Section 9.01. The Agency. (a) Each Bank appoints Bank of Montreal as
its Agent hereunder and irrevocably authorizes the Agent to take such
action on its behalf and to exercise such powers hereunder as are
specifically delegated to the Agent by the terms hereof, together with
such powers as are reasonably incidental hereto, and the Agent hereby
accepts such appointment subject to the terms hereof. The
relationship between the Agent and the Banks shall be that of agent
and principal only and nothing herein shall be construed to constitute
the Agent a trustee for any Bank nor to impose on the Agent duties or
obligations other than those expressly provided for herein.
Section 9.02. The Agent's Duties. The Agent shall promptly forward
to each Bank copies, or notify each Bank as to the contents, of all
notices and other communications received from the Company pursuant to
the terms of this Agreement and the Notes and, in the event that the
Company fails to pay when due the principal of or interest on any
Loan, the Agent shall promptly give notice thereof to the Banks. As
to any other matter not expressly provided for herein or therein, the
Agent shall have no duty to act or refrain from acting with respect to
the Company, except upon the instructions of the Required Banks. The
Agent shall not be bound by any waiver, amendment, supplement, or
modification of this Agreement or any Note which affects its duties
hereunder and thereunder, unless it shall have given its prior written
consent thereto. The Agent shall have no duty to ascertain or inquire
as to the performance or observance of any of the terms, conditions,
covenants or agreements binding on the Company pursuant to this
Agreement or any Note nor shall it be deemed to have knowledge of the
occurrence of any Default or Event of Default (other than a failure of
the Company to pay when due the principal or interest on any Loan),
unless it shall have received written notice from the Company or a
Bank specifying such Default or Event of Default and stating that such
notice is a "Notice of Default".
Section 9.03. Sharing of Payment and Expenses. All funds for the
account of the Banks received by the Agent in respect of payments made
by the Company pursuant to, or from any Person on account of, this
Agreement or any Note shall be distributed forthwith by the Agent
among the Banks, in like currency and funds as received, ratably in
proportion to their respective interests therein. In the event that
any Bank shall receive from the Company or any other source any
payment of, on account of, or for or under this Agreement or any Note
(whether received pursuant to the exercise of any right of set-off,
Page 55
banker's lien, realization upon any security held for or appropriated
to such obligation or otherwise as permitted by law) other than in
proportion to its Pro Rata Share, then such Bank shall purchase from
each other Bank so much of its interest in obligations of the Company
as shall be necessary in order that each Bank shall share such payment
with each of the other Banks in proportion to each Bank's Pro Rata
Share; provided that no Bank shall purchase any interest of any Bank
that does not, to the extent that it may lawfully do so, set-off
against the balance of any deposit accounts maintained with it the
obligations due to it under this Agreement. In the event that any
purchasing Bank shall be required to return any excess payment
received by it, the purchase shall be rescinded and the purchase price
restored to the extent of such return, but without interest.
Section 9.04. The Agent's Liabilities. Each of the Banks and the
Company agrees that (i) neither the Agent in such capacity nor any of
its officers or employees shall be liable for any action taken or
omitted to be taken by any of them hereunder except for its or their
own gross negligence or willful misconduct, (ii) neither the Agent in
such capacity nor any of its officers or employees shall be liable for
any action taken or omitted to be taken by any of them in good faith
in reliance upon the advice of counsel, independent public accountants
or other experts selected by the Agent, and (iii) the Agent in such
capacity shall be entitled to rely upon any notice, consent,
certificate, statement or other document (including any telegram,
cable, telex, facsimile or telephone transmission) believed by it to
be genuine and correct and to have been signed and/or sent by the
proper Persons.
Section 9.05. The Agent as a Bank. The Agent shall have the same
rights and powers hereunder as any other Bank and may exercise the
same as though it were not the Agent, and the terms "Bank" or "Banks",
unless the context otherwise indicated, include the Agent in its
individual capacity. The Agent may, without any liability to account,
maintain deposits or credit balances for, invest in, lend money to and
generally engage in any kind of banking business with the Company or
any Subsidiary or affiliate of the Company as if it were any other
Bank and without any duty to account therefor to the other Banks.
Section 9.06. Bank Credit Decision. Neither the Agent nor any of its
officers or employees has any responsibility for, gives any guaranty
in respect of, nor makes any representation to the Banks as to, (i)
the condition, financial or otherwise, of the Company or any
Subsidiary thereof or the truth of any representation or warranty
given or made herein or in any other Credit Document, or in connection
herewith or therewith or (ii) the validity, execution, sufficiency,
effectiveness, construction, adequacy, enforceability or value of this
Agreement or any other Credit Document or any other document or
instrument related hereto or thereto. Except as specifically provided
herein and in the other Credit Documents to which the Agent is a
party, the Agent shall have no duty or responsibility, either
initially or on a continuing basis, to provide any Bank with any
Page 56
credit or other information with respect to the operations, business,
property, condition or creditworthiness of the Company or any of its
Subsidiaries, whether such information comes into the Agent's
possession on or before the date hereof or at any time thereafter.
Each Bank acknowledges that it has, independently and without reliance
upon the Agent or any other Bank, based on such documents and
information as it has deemed appropriate, made its own credit analysis
and decision to enter into this Agreement. Each Bank also
acknowledges that it will independently and without reliance upon the
Agent or any other Bank, based on such documents and information as it
shall deem appropriate at the time, continue to make its own credit
decisions in taking or not taking action under this Agreement or any
Note.
Section 9.07. Indemnification. Each Bank agrees (which agreement
shall survive payment of the Loans and the Notes) to indemnify the
Agent, to the extent not reimbursed by the Company, ratably in
accordance with its respective Commitment, from and against any and
all liabilities, obligations, losses, claims, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements of any
kind or nature whatsoever which may be imposed on, incurred by, or
asserted against the Agent in any way relating to or arising out of
this Agreement or any other Credit Document, or any action taken or
omitted to be taken by the Agent hereunder or thereunder; provided
that no Bank shall be liable for any portion of such liabilities,
obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements resulting from the gross negligence
or willful misconduct of the Agent or any of its officers or
employees. Without limiting the foregoing, each Bank agrees to
reimburse the Agent promptly upon demand for its ratable share of any
out-of-pocket expenses (including counsel fees) incurred by the Agent
in such capacity in connection with the preparation, execution or
enforcement of, or legal advice in respect of rights or
responsibilities under, this Agreement or any Note or any amendments
or supplements hereto or thereto, to the extent that the Agent is not
reimbursed for such expenses by the Company.
Section 9.08. Successor Agent. The Agent may resign at any time by
giving written notice thereof to the Banks and the Company, and the
Agent may be removed at any time by the Required Banks by giving
written notice thereof to the Agent, the other Banks and the Company
at least ten Business Days prior to the effective date of such
removal. Upon any such resignation or removal, the Required Banks
shall have the right to appoint a successor Agent. If no successor
Agent shall have been so appointed by the Required Banks and shall
have accepted such appointment within 30 days after the resigning
Agent's giving of notice of resignation, or the Required Banks' giving
notice of removal, as the case may be, the resigning Agent may, on
behalf of the Banks, appoint a successor Agent, which shall be a
commercial bank organized under the laws of the United States of
America or of any State thereof and having a combined capital and
surplus of at least $250,000,000. Any successor Agent appointed
Page 57
pursuant to this Section 9.08 shall be a Bank hereunder. Upon the
acceptance of any appointment as Agent hereunder by a successor Agent,
such successor Agent shall thereupon succeed to and become vested with
all the rights, powers, privileges and duties of the resigned or
removed Agent, and the resigned or removed Agent shall be discharged
from its duties and obligations under this Agreement. After any
Agent's resignation hereunder as Agent, the provisions of this Article
IX shall inure to its benefit as to any actions taken or omitted to be
taken by it while it was Agent under this Agreement.
ARTICLE X
CONSENT TO JURISDICTION
Section 10.01. Consent to Jurisdiction. The Company hereby
irrevocably submits to the non-exclusive jurisdiction of the State and
Federal courts located in The City of New York for the purpose of any
suit, action, proceeding or judgment relating to or arising out of
this Agreement and each Note. The Company hereby irrevocably appoints
CT Corporation System, with offices on the date hereof at 000 Xxxxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, as its authorized agent on whom
process may be served in any action which may be instituted against it
by the Agent or the Banks in any state or federal court in the Borough
of Manhattan, The City of New York, arising out of or relating to any
Loan or this Agreement and each Note. Service of process upon such
authorized agent and written notice of such service to the Company
shall be deemed in every respect effective service of process upon the
Company, and the Company hereby irrevocably consents to the
jurisdiction of any such court in any such action and to the laying of
venue in the Borough of Manhattan, The City of New York. The Company
hereby irrevocably waives any objection to the laying of the venue of
any such suit, action or proceeding brought in the aforesaid courts
and hereby irrevocably waives any claim that any such suit, action or
proceeding brought in any such court has been brought in an
inconvenient forum. Notwithstanding the foregoing, nothing herein
shall in any way affect the right of the Agent or any Bank to bring
any action arising out of or relating to the Loans or this Agreement
and each Note in any competent court elsewhere having jurisdiction
over the Company or its property.
ARTICLE XI
MISCELLANEOUS
Section 11.01. Applicable Law. This Agreement shall be governed by
and construed in accordance with the internal law of the State of New
York, United States of America.
Section 11.02. Set-off. Each Bank is authorized to set off and apply
any and all deposits at any time held by such Bank against obligations
of the Company under the Credit Documents.
Page 58
Section 11.03. Expenses. The Company agrees to pay (i) all
reasonable out-of-pocket expenses of the Agent (including, without
limitation, all reasonable fees and expenses of Xxxxxxx and Xxxxxx, as
counsel to the Agent) in connection with the preparation of this
Agreement and the other Credit Documents and any amendments,
supplements or modifications hereto or thereto, (ii) all reasonable
out-of-pocket expenses incurred by the Agent and any Bank, including
fees and expenses of counsel, in connection with the enforcement of,
and the protection of their rights under, any provisions of this
Agreement, the Notes or any amendment or supplement hereto or thereto,
whether or not any loan is made hereunder, and (iii) all reasonable
out-of-pocket expenses of the Agent, including reasonable fees and
disbursements of counsel, in connection with the syndication of the
Loans. The Company shall pay any transfer taxes, documentary taxes,
assessments or charges made by any Governmental Authority by reason of
the execution and delivery of this Agreement or the Notes incurred up
to and including the date of this Agreement.
Section 11.04. Amendments. Any provision of this Agreement or the
Notes may be amended or waived if, but only if, such amendment or
waiver is in writing and is signed by (A) in the case of amendments or
waivers relating to Section 7.03(a), (b) or (c), Banks having at least
66 2/3% of the Total Commitment or, if the Total Commitment has been
cancelled or terminated, holding Notes evidencing at least
66 2/3% of the aggregate unpaid principal amount of the Loans and (B)
in all other cases, the Company and the Required Banks (and, if the
rights or duties of the Agent are affected thereby, by the Agent);
provided that no such amendment, waiver or modification shall, unless
signed by all the Banks, (i) increase or decrease the Commitment of
any Bank, subject any Bank to any additional obligation or change the
several nature of the obligations of each Bank, (ii) reduce the
principal of or rate of interest on any Loan (other than interest
payable pursuant to Section 3.06) or any fees hereunder, (iii) except
as otherwise provided in Section 11.12, postpone the date fixed for
any payment of principal of or interest on any Loan or any fees
hereunder or for any reduction or termination of any Commitment, (iv)
except as otherwise may result from actions taken in accordance with
Section 11.12, change the percentage of any of the Commitments or of
the aggregate unpaid principal amount of the Notes, or the number of
Banks, which shall be required for the Banks or any of them to take
any action under this Section or any other provision of this
Agreement, or (v) amend or waive the provisions of Article IV or of
this Section 11.04.
Section 11.05. Cumulative Rights and No Waiver. Each and every right
granted to the Agent and the Banks hereunder or under any other
document delivered hereunder or in connection herewith, or allowed
them by law or equity, shall be cumulative and may be exercised from
time to time. No failure on the part of the Agent or any Bank to
exercise, and no delay in exercising, any right will operate as a
waiver thereof, nor will any single or partial exercise by the Agent
or any Bank of any right preclude any other or future exercise thereof
or the exercise of any other right.
Page 59
Section 11.06. Notices. Any communication, demand or notice to be
given hereunder or with respect to the Notes will be duly given when
delivered in writing or by telecopy to a party at its address as
indicated below, except that notices from the Company pursuant to
Section 2.02 will not be effective until received by the Agent.
A communication, demand or notice given pursuant to this Section 11.06
shall be addressed:
If to the Company, at
000 Xxxx Xxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxxxx 00000-0000
Telecopy: (000) 000-0000
Attention: Legal Department
If to the Agent, at its address as indicated on the signature pages
hereof, with a copy to:
Xxxxxxx and Xxxxxx
000 Xxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Telecopy: (000) 000-0000
Attention: Xxxxx X. Xxxxxx
If to any Bank, at its address as indicated on the signature pages
hereof.
Unless otherwise provided to the contrary herein, any notice which is
required to be given in writing pursuant to the terms of this
Agreement may be given by telex, telecopy or facsimile transmission.
Section 11.07. Separability. In case any one or more of the
provisions contained in this Agreement shall be invalid, illegal or
unenforceable in any respect under any law, the validity, legality and
enforceability of the remaining provisions contained herein shall not
in any way be affected or impaired thereby.
Section 11.08. Assignments and Participations. (a) This Agreement
shall be binding upon and inure to the benefit of the Company and the
Banks and their respective successors and assigns, except that the
Company may not assign any of its rights hereunder without the prior
written consent of the Banks.
(b) Any Bank may at any time grant to one or more banks or other
institutions (each a "Participant") participating interests in its
Commitment or any or all of its Loans. In the event of any such grant
by a Bank of a participating interest to a Participant, whether or not
upon notice to the Company and the Agent, such Bank shall remain
responsible for the performance of its obligations hereunder, and the
Company and the Agent shall continue to deal solely and directly with
such Bank in connection with such Bank's rights and obligations under
Page 60
this Agreement. Any agreement pursuant to which any Bank may grant
such a participating interest shall provide that such Bank shall
retain the sole right and responsibility to enforce the obligations of
the Company hereunder including the right to approve any amendment,
modification or waiver of any provision of this Agreement; provided
that such participation agreement may provide that such Bank will not
agree to any modification, amendment or waiver of this Agreement
described in clauses (i) through (v), inclusive, of Section 11.04
without the consent of the Participant. Subject to Section 11.08(e),
the Company agrees that each Participant shall be entitled to the
benefits of Sections 4.03, 4.04 and 11.04 with respect to its
participating interest. An assignment or other transfer which is not
permitted by clause (c) below shall be given effect for purposes of
this Agreement only to the extent of a participating interest granted
in accordance with this clause (b).
(c) Any Bank may at any time assign to one or more banks or other
institutions (each an "Assignee") all, or a proportionate part of all,
of its rights and obligations under this Agreement and the Notes, and
such Assignee shall assume such rights and obligations, pursuant to an
instrument executed by such Assignee and such transferor Bank, with
(and subject to) the signed consents of the Company and the Agent
(which consents shall not be unreasonably withheld or delayed);
provided, however, any such assignment shall be in the minimum
aggregate amount of $10,000,000; provided, further, that the foregoing
consent requirement shall not be applicable in the case of, and this
subsection (c) shall not restrict, an assignment of all, or a
proportionate part of all, of its rights and obligations under this
Agreement and the Notes by any Bank to an Affiliate of such Bank or a
pledge and assignment of all, or a proportionate part of all, of its
rights and obligations under this Agreement and the Notes to a Federal
Reserve Bank as collateral; and provided, further, that no consent of
the Company shall be required if an Event of Default has occurred and
is continuing. Upon (i) execution and delivery of such an instrument,
(ii) payment by such Assignee to such transferor Bank of an amount
equal to the purchase price agreed between such transferor Bank and
such Assignee and (iii) payment by the transferee Bank or transferor
Bank to the Agent of an administrative fee in the amount of $3,500
(except that no such fee shall be payable in connection with a
transfer or pledge to an Affiliate of a Bank or to a Federal Reserve
Bank referred to in the proviso above), such Assignee shall be a Bank
party to this Agreement and shall have all the rights and obligations
of a Bank with a Commitment as set forth in such instrument of
assumption, and the transferor Bank (and the Company as to the
transferor Bank) shall be released from its obligations hereunder to a
corresponding extent, and no further consent or action by any party
shall be required. Upon the consummation of any assignment pursuant
to this subsection (c), the transferor Bank, the Agent and the Company
shall make appropriate arrangements so that, if required, new Notes
are issued to the Assignee.
Page 61
(d) No Assignee, Participant or other transferee of any Bank's rights
shall be entitled to receive any greater payment under Section 4.03 or
4.04 than such Bank would have been entitled to receive with respect
to the rights transferred, unless such transfer is made (i) with the
Company's prior written consent, (ii) in the circumstances referred to
in the third proviso to the first sentence of the preceding paragraph
(c) or (iii) by reason of the provisions of Section 4.04 requiring
such Bank to designate a different lending office under certain
circumstances or at a time when the circum-stances giving rise to such
payment did not exist.
(e) No Participant of any Bank shall be entitled to receive any
greater payment under Section 4.03, Section 4.04 or Section 11.04 than
such Bank would have been entitled to receive if it had not granted a
participation to such Participant.
Section 11.09. Waiver of Jury Trial. The Company, the Agent and each
of the Banks hereby waive trial by jury in any judicial proceeding
involving any claim (whether sounding in contract, tort, applicable
law or otherwise) arising out of or in any way relating to (and
whenever arising) this Agreement, the Notes or the transactions
contemplated hereby.
Section 11.10. Confidentiality. Except as may be required to enforce
the rights and duties established hereunder, the parties hereto shall
preserve in a confidential manner all information received from the
other pursuant to this Agreement, the Notes and the transactions
contemplated hereunder and thereunder, and shall not disclose such
information except to those persons with which a confidential
relationship is maintained (including regulators, legal counsel,
accountants, or designated agents), or where required by law. Nothing
in this paragraph shall prevent the filing of this Agreement with the
Securities and Exchange Commission.
Section 11.11. Indemnity. The Company agrees to indemnify the Agent,
the Arranger and each of the Banks and their respective directors,
officers, employees and agents (each such person being called an
"Indemnitee") against, and to hold each Indemnitee harmless from, any
and all losses, claims, damages and liabilities of any party other
than the Company and related expenses, including reasonable counsel
fees and expenses incurred by or asserted against any Indemnitee
arising out of, in any way connected with, or as a result of (i) the
execution or delivery of this Agreement or any Note or any agreement
or instrument contemplated hereby or thereby, the performance by the
parties hereto or thereto of their respective obligations hereunder or
thereunder or the consummation of the transactions and the other
transactions contemplated hereby or thereby, (ii) the use of the
proceeds of the Loans or (iii) any claim, litigation, investigation or
proceeding relating to any of the foregoing, whether or not any
Indemnitee is a party thereto and notwithstanding that any claim,
proceeding, investigation or litigation relating to any such losses,
claims, damages, liabilities or expenses is or was brought by a
Page 62
stockholder, creditor, employee or officer of the Company; provided
that such indemnity shall not, as to any Indemnitee, be available to
the extent that such losses, claims, damages, liabilities or related
expenses are determined by a court of competent jurisdiction by final
and nonappealable judgment to have resulted from the gross negligence
or willful misconduct of any Indemnitee or from the breach by any
Indemnitee of its obligations hereunder or with respect to claims or
actions solely between or among the Banks relating to this Agreement
or the transactions contemplated hereby and provided further, that
such Indemnity shall not apply to any loss, claim, damage, or
liability or related expense incurred as a consequence of any
additional costs (as contemplated by Section 4.04(b)) or any Tax,
which shall be governed by the provisions of Section 4.04(b) and (a),
respectively.
The provisions of this Section 11.11 shall remain operative and in
full force and effect regardless of the expiration of the term of this
Agreement, the consummation of the transactions contemplated hereby,
the repayment of any of the Loans, the reduction or cancellation of
the Commitment, the invalidity or unenforceability of any term or
provision of this Agreement or any Note, or any investigation made by
or on behalf of the Banks. All amounts due under this Section 11.11
shall be payable in immediately available funds upon written demand
therefor.
Section 11.12. Extension of Termination Dates; Removal of Banks;
Substitutions of Banks.
(a)
(i) No earlier than the first anniversary of the Effective Date
and no later than 120 days prior to the scheduled
Termination Date, the Company may, at its option, request
all the Banks then party to this Agreement to extend their
scheduled Termination Dates by one calendar year by means of
a letter, addressed to each such Bank and the Agent. If
such a request is accepted and the Termination Date is
extended pursuant to subsection 11.12(a)(ii), the Company
may, at its option, no earlier than the date one year after
the first request for extension and no later than 120 days
prior to the rescheduled Termination Date, make one further
request that all the Banks then party to this Agreement to
extend their scheduled Termination Dates by one additional
year in the same manner, subject to the provisions of
subsection 11.12(a)(ii); provided that in no event shall the
Termination Date be extended to a date which is later than
the fifth anniversary of the Effective Date.
(ii) Each Bank electing (in its sole discretion) so to extend its
scheduled Termination Date shall execute and deliver within
forty-five (45) days following such request counterparts of
such letter to the Company and the Agent, whereupon, such
Bank's scheduled Termination Date shall be extended to the
Page 63
anniversary date of the year immediately succeeding such
Bank's then-current scheduled Termination Date. If no such
election is received within such forty-five day period from
any Bank, such Bank shall be deemed to have elected not to
extend its scheduled Termination Date.
(b) With respect to any Bank which has declined to extend such Bank's
scheduled Termination Date and if Banks with an aggregate percentage
of the Total Commitment in excess of 33 1/3% have not declined to
extend their respective Termination Dates, the Company may in its
discretion, upon not less than 30 days' prior written notice to the
Agent and each Bank, remove such Bank as a party hereto. Each such
notice shall specify the date of such removal (which shall be a
Business Day), which shall thereupon become the scheduled Termination
Date for such Bank.
(c) In the event that any Bank does not extend its scheduled
Termination Date pursuant to subsection (a) above or is the subject of
a notice of removal pursuant to subsection (b) above, then, at any
time prior to the Termination Date for such Bank (a "Terminating
Bank"), the Company may, at its option, arrange to have one or more
other financial institutions acceptable to the Agent (which may be a
Bank or Banks and each of which shall herein be called a "Successor
Bank") succeed to all or a percentage of the Terminating Bank's
outstanding Loans, if any, and rights under this Agreement and assume
all or a like percentage (as the case may be) of such Terminating
Bank's Commitment and other obligations hereunder, as if (i) in the
case of any Bank electing not to extend its scheduled Termination Date
pursuant to subsection (a) above, such Successor Bank had extended its
scheduled Termination Date pursuant to such subsection (a) and (ii) in
the case of any Bank that is the subject of a notice of removal
pursuant to subsection (b) above, no such notice of removal had been
given by the Company. Such succession and assumption shall be
effected by means of one or more agreements supplemental to this
Agreement among the Terminating Bank, the Successor Bank, the Company
and the Agent. On and as of the effective date of each such
supplemental agreement, each Successor Bank party thereto shall be and
become a Bank for all purposes of this Agreement and to the same
extent as any other Bank hereunder and shall be bound by and entitled
to the benefits of this Agreement in the same manner as any other
Bank.
(d) On the originally scheduled Termination Date for any Terminating
Bank, such Terminating Bank's Commitment shall terminate and, except
to the extent assigned pursuant to subsection (c) above, the Company
shall pay in full all of such Terminating Bank's Loans and all other
amounts payable to such Bank hereunder, including any amounts payable
pursuant to Section 4.03 on account of such payment.
(e) To the extent that all or a portion of any Terminating Bank's
obligations are not assumed pursuant to subsection (c) above, the
Total Commitment shall be reduced on the applicable Termination Date
Page 64
and each Bank's percentage of the reduced Total Commitment shall be
revised pro rata to reflect such Terminating Bank's absence.
Section 11.13. Knowledge of the Company. As used in this Agreement,
knowledge of the Company shall mean to the best of any executive
officer's knowledge, after a reasonable investigation.
Section 11.14. Execution in Counterparts. This Agreement may be
executed in any number of counterparts and by the different parties
hereto on separate counterparts, each of which when so executed and
delivered shall be an original, but all the counterparts shall
together constitute one and the same instrument.
Page 65
In Witness Whereof, the parties hereto have caused this Agreement to
be duly executed as of the date first above written.
Realty Income Corporation
By:
------------------------------
Name: Xxxxxxx X. Xxxxxxxx
Title: Senior Vice President,
General Counsel
Bank of Montreal,
as Agent for the Banks
By:
------------------------------
Name:
----------------------
Title:
----------------------
Address for Notices:
Client Services
000 Xxxxx XxXxxxx Xxxxxx, 00 Xxxx
Xxxxxxx, Xxxxxxxx 00000
Attn: Xxxxx Xxxxxxx
Fax: (000) 000-0000
Eurodollar Lending Office:
000 Xxxxx XxXxxxx Xx., 00 Xxxx
Xxxxxxx, XX 00000
Attn: Xxxxx Xxxxxxx
Fax: (000) 000-0000
Page 66
Exhibit A
FORM OF CONVERSION/CONTINUANCE REQUEST
[Dated as provided
in Section 3.05]
Bank of Montreal
000 Xxxxx XxXxxxx Xxxxxx, 00 Xxxx
Xxxxxxx, Xxxxxxxx 00000
Attn: Xxxxx Xxxxxxx
Realty Income Corporation (the "Company") hereby gives notice of its
intention to [convert/continue] [$ Principal Amount] [the
entire outstanding amount] of its [ABR Loans] [Eurodollar Pro Rata
Loans] with an Interest Period of days and ending on ,
] [to/as] [ABR Loans] [Eurodollar Pro Rata Loans], pursuant to
the Revolving Credit Agreement, dated as of February 1, 2000, among
the Company, the Banks and Bank of Montreal, as Agent (as amended,
supplemented or otherwise modified from time to time, the
"Agreement"), such [conversion/continuance to be effective as of
, ]. [The Interest Period for the Eurodollar Pro Rata
Loans shall be days, with a Scheduled Maturity on .]
Unless otherwise defined herein, capitalized terms used herein shall
have the respective meanings specified in the Agreement.
Realty Income Corporation
By:
------------------------------
Name:
Title:
Page 67
Exhibit B
FORM OF PRO RATA LOAN REQUEST
[Dated as provided
in Section 2.02]
Bank of Montreal
000 Xxxxx XxXxxxx Xxxxxx, 00 Xxxx
Xxxxxxx, Xxxxxxxx 00000
Attn: Xxxxx Xxxxxxx
Realty Income Corporation (the "Company") hereby gives notice of its
intention to borrow $ of Loans on ,
pursuant to the Revolving Credit Agreement, dated as of February 1,
2000, among the Company, the Banks and Bank of Montreal, as Agent (as
amended, supplemented or otherwise modified from time to time, the
"Agreement"). [The Company hereby requests that such Loan constitute
a Eurodollar Pro Rata Loans with a scheduled maturity of 20
and an Interest Period of days.]
The Company hereby confirms that the amounts of Loans outstanding on
the date hereof is as follows:
Total Commitment $25,000,000
Outstanding Pro Rata Loans $
Outstanding Competitive Loans $
Availability $
The Company also hereby confirms that each of the representations and
warranties (other than the representations and warranties that speak
as of a specific date) contained in Article V of the Agreement is true
and correct on the date hereof and, after giving effect to this
borrowing, will be true and correct on the proposed borrowing date as
though such representation or warranty had originally been made on
such dates. No Default or Event of Default has occurred and is
continuing, nor will any such event occur as a result of this
borrowing.
Unless otherwise defined herein, capitalized terms used herein shall
have the respective meanings specified in the Agreement.
Realty Income Corporation
By:
------------------------------
Name:
Title:
Page 68
Exhibit C-1
FORM OF PRO RATA NOTE
$ February 1, 2000
Realty Income Corporation, a Maryland corporation (the "Company"),
for value received, hereby promises to pay on the Termination Date to
the order of (the "Bank"), at the office of Bank of
Montreal, as Agent, at 000 Xxxxx XxXxxxx Xxxxxx, 00 Xxxx, Xxxxxxx,
Xxxxxxxx 00000, in lawful money of the United States, the principal
sum of $ or if less, the aggregate unpaid principal amount of
all Pro Rata Loans made by the Bank to the Company pursuant to that
certain Revolving Credit Agreement, dated as of February 1, 2000 (as
amended, supplemented or otherwise modified from time to time, the
"Agreement") among the Company, each of the banks party thereto, and
Bank of Montreal, as Agent.
This Note shall bear interest, and such interest shall be payable,
as set forth in the Agreement for ABR Loans and Eurodollar Pro Rata
Loans. Upon the occurrence and during the continuation of an Event of
Default, this Note shall bear interest at the default rate pursuant to
Section 3.06 of the Agreement.
Except as otherwise provided in the Agreement, with respect to
Eurodollar Pro Rata Loans, if interest or principal on the Loan
evidenced by this Note becomes due and payable on a day which is not a
Business Day, then the maturity thereof shall be extended to the next
succeeding Business Day, and interest shall be payable thereon at the
rate herein specified during such extension.
Page 69
This Note is one of the Pro Rata Notes referred to in the
Agreement, and is subject to prepayment in whole or in part and its
maturity is subject to acceleration upon the terms provided in the
Agreement. Unless otherwise defined herein, capitalized terms used
herein shall have the respective meanings specified in the Agreement.
Presentment, demand, protest, notice of dishonor, notice of intent
to accelerate and other notice of any kind are hereby waived by the
undersigned.
THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
All Pro Rata Loans made by the Bank to the Company pursuant to the
Agreement and all payments of principal hereof and interest thereon
may be indicated by the Bank upon the grid attached hereto which is a
part of this Note. Such notations shall be presumptive as to the
aggregate unpaid principal amount of and interest on all Pro Rata
Loans made by the Bank pursuant to the Agreement.
Realty Income Corporation
By:
------------------------------
Name:
Title:
Page 70
Loan and Payments of Principal and Interest
-------------------------------------------
Name
Interest Interest of
Method Period Amount Amount Person
Amount (ABR or if Euro- of Unpaid of Making
of Euro- dollar Principal Principal Interest Nota-
Date Loan dollar Loan Paid Balance Paid tion
---- ------ ------ -------- --------- --------- -------- ------
Page 71
February 1, 2000
EXHIBIT D-1
FORM OF OPINION OF XXXXXX & XXXXXXX
Bank of Montreal, as Agent
for the Banks
000 Xxxxx XxXxxxx Xxxxxx, 00 Xxxx
Xxxxxxx, Xxxxxxxx 00000
The Banks Signatory to the Credit
Agreement Referred to Below
Re: Revolving Credit Agreement, dated as of February 1, 2000, among
Realty Income Corporation, the Banks named therein and Bank of
Montreal, as Agent
Ladies/Gentlemen:
We have acted as special counsel for Realty Income Corporation, a
Maryland corporation (the "Company"), in connection with the Revolving
Credit Agreement (the "Credit Agreement") dated as of February 1,
2000, among the Company, each of the banks identified on the signature
pages thereof (the "Banks") and Bank of Montreal, as Agent for the
Banks (the "Agent"). This opinion is rendered to you pursuant to
Section 6.01(f) of the Credit Agreement. Capitalized terms defined in
the Credit Agreement are used herein as therein defined.
In our capacity as such counsel, we have examined such matters of fact
and questions of law as we have considered appropriate for purposes of
rendering the opinions expressed below. We have examined among other
things, the following:
(a) The Credit Agreement;
(b) The following promissory notes of the Company dated
February 1, 2000 (collectively, the "Notes", and together
with the Credit Agreement, the "Loan Documents"): (i) note
in the original principal amount of $ payable to
Bank of Montreal; (ii) note in the original principal amount
of $ payable to ; [and ( ) note
in the original principal amount of payable to ;]
(c) The Amended and Restated Certificate of Incorporation and
Amended and Restated Bylaws of the Company; and
(d) Such other documents and agreements as we deem necessary for
purposes of rendering the opinions expressed below.
Page 72
In our examination, we have assumed the genuineness of all signatures
(other than those of officers of the Company on the Loan Documents as
to which we have relied on a certificate of incumbency), the
authenticity of all documents submitted to us as originals, and the
conformity to authentic original documents of all documents submitted
to us as copies.
We have been furnished with, and with your consent have relied upon,
certificates of officers of the Company with respect to certain
factual matters. In addition, we have obtained and relied upon such
certificates and assurances from public officials as we have deemed
necessary.
We are opining herein as to the effect on the subject transaction only
of the federal laws of the United States and the internal laws of the
State of New York, as applicable, and we express no opinion with
respect to the applicability thereto, or the effect thereon, of the
laws of any other jurisdiction or as to any matters of municipal law
or the laws of any other local agencies within any state.
Our opinions set forth in paragraph 1 below are based upon our
consideration of only those statutes, rules and regulations which, in
our experience, are normally applicable to bank credit transactions.
Subject to the foregoing and the other matters set forth herein, it is
our opinion that, as of the date hereof:
1. None of the execution and delivery of the Loan Documents by the
Company, the borrowing of the funds pursuant to the Loan Documents
by the Company and the payment of the indebtedness of the Company
evidenced by the Notes: (a) violate any federal or New York
statute, rule, or regulation applicable to the Company (including,
without limitation, Regulations T, U, or X of the Board of
Governors of the Federal Reserve System), or (b) require any
consents, approvals, authorizations, registrations, declarations,
or filings by the Company under any applicable federal or New York
statute, rule or regulation.
2. Each of the Loan Documents has been duly executed and delivered by
the Company and constitutes a legally valid and binding obligation
of the Company enforceable against the Company in accordance with
its terms.
3. The Company is not an "investment company" as such term is defined
in the Investment Company Act of 1940, as amended from time to
time.
The opinions set forth in paragraph 2 above are subject to the
following limitations, qualifications and exceptions:
(a) the effect of bankruptcy, insolvency, reorganization,
moratorium or other similar laws now or hereafter in effect
relating to or affecting the rights or remedies of creditors;
Page 73
(b) the effect of general principles of equity, whether
enforcement is considered in a proceeding in equity or at
law, and the discretion of the court before which any
proceeding therefor may be brought;
(c) the unenforceability under certain circumstances under law or
court decisions of provisions providing for the indemnifi-
cation of or contribution to a party with respect to a
liability where such indemnification or contribution is
contrary to public policy;
(d) the unenforceability of any provision requiring the payment
of attorney's fees, except to the extent that a court
determines such fees to be reasonable; and
(e) we express no opinion with respect to the enforceability of
Section 10.01 of the Credit Agreement by a federal court.
To the extent that the obligations of the Company may be dependent
upon such matters, we assume for purposes of this opinion that: all
parties to the Loan Documents are duly incorporated, validly existing
and in good standing under the laws of their respective jurisdictions
of incorporation; all parties to the Loan Documents have the requisite
corporate power and authority to execute and deliver the Loan
Documents and to perform their respective obligations under the Loan
Documents to which they are a party; and the Loan Documents to which
such parties are a party have been duly authorized, executed and
delivered by such parties and constitute their legally valid and
binding obligations, enforceable against them in accordance with their
terms. We express no opinion as to compliance by any parties to the
Loan Documents with any state or federal laws or regulations
applicable to the subject transactions because of the nature of their
business.
This opinion is rendered only to you and is solely for your benefit in
connection with the transactions covered hereby. This opinion may not
be relied upon by you for any other purpose, or furnished to, quoted
to or relied upon by any other person, firm or corporation for any
purpose, without our prior written consent.
Very truly yours,
Page 74
February 1, 2000
EXHIBIT D-2
FORM OF OPINION OF XXXXXXX X. XXXXXXXX, ESQ.
Bank of Montreal, as Agent
for the Banks
000 Xxxxx XxXxxxx Xxxxxx, 00 Xxxx
Xxxxxxx, Xxxxxxxx 00000
The Banks Signatory to the Credit
Agreement Referred to Below
Re: Revolving Credit Agreement, dated as of February 1, 2000, among
Realty Income Corporation, the Banks listed on the signature
pages thereto and Bank of Montreal, as Agent
Ladies/Gentlemen:
I am general counsel of Realty Income Corporation, a Maryland
corporation (the "Company"). This opinion is rendered to you pursuant
to Section 6.01(f) of the Revolving Credit Agreement (the "Credit
Agreement"), dated as of February 1, 2000, among the Company, each of
the banks identified on the signature pages thereof (the "Banks") and
Bank of Montreal, as Agent for the Banks (the "Agent"). Capitalized
terms defined in the Credit Agreement are used herein as therein
defined.
In my capacity as general counsel, I have examined such matters of
fact and questions of law as I have considered appropriate for
purposes of rendering the opinions expressed below, except where a
statement is qualified as to knowledge or awareness, in which case I
have made no or limited inquiry as specified below. I have examined,
among other things, the following:
(a) The Credit Agreement;
(b) The following promissory notes of the Company dated
February 1, 2000 (collectively, the "Notes", and together
with the Credit Agreement, the "Loan Documents"): (i) note in
the original principal amount of $ payable to
Bank of Montreal; (ii) note in the original principal amount
of $ payable to [[and] ( ) note in
the original principal amount of $ payable to
];
(c) The Amended and Restated Certificate of Incorporation and
Amended and Restated Bylaws of the Company; and
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(d) Such other documents and agreements as I deem necessary for
purposes of rendering the opinions expressed below.
In my examination, I have assumed the genuineness of all signatures
(other than those of officers of the Company on the Loan Documents),
the authenticity of all documents submitted to me as originals, and
the conformity to authentic original documents of all documents
submitted to me as copies.
I have been furnished with, and with your consent have relied upon,
certificates of officers of the Company with respect to certain
factual matters. In addition, I have obtained and relied upon such
certificates and assurances from public officials as I have deemed
necessary.
I am opining herein as to the effect on the subject transaction only
of the federal laws of the United States and the internal laws of the
State of California, as applicable, and I express no opinion with
respect to the applicability thereto, or the effect thereon, of the
laws of any other jurisdiction or as to any matters of municipal law
or the laws of any other local agencies within any state.
Whenever a statement herein is qualified by "to the best of my
knowledge" or a similar phrase, it is intended to indicate that I do
not have current actual knowledge of the inaccuracy of such statement.
Except as otherwise expressly indicated, I have not undertaken any
independent investigation to determine the accuracy of any such
statement, and no inference that I have any knowledge of any matters
pertaining to such statement should be drawn from my representation of
the Company.
Subject to the foregoing and the other matters set forth herein, it is
my opinion that, as of the date hereof:
1. Based solely on certificates from public officials, I confirm that
the Company is qualified to do business in the states in which the
Company owns properties.
2. To the best of my knowledge, there are no proceedings or
investigations pending or threatened before any court or
arbitrator or before or by any governmental authority which would
have a material adverse effect on the legality, validity, binding
effect or enforceability of any Loan Document.
3. The Company has the corporate power and authority to execute,
deliver and perform the terms and provisions of each Loan Document
to which it is party and has taken all necessary corporate action
to authorize the execution, delivery and performance by it of each
such Loan Document.
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This opinion is delivered by me as general counsel for the Company to
you and is solely for your benefit in connection with the transactions
covered hereby. This opinion may not be relied upon by you for any
other purpose, or furnished to, quoted to or relied upon by any other
person, firm or corporation for any purpose, without my prior written
consent,
Very truly yours,
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Exhibit E
PROPERTY MANAGEMENT EXCEPTION REPORT
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Exhibit F
REAL ESTATE INVESTMENT CRITERIA
The Investment Committee is authorized, without prior Board of
Director approval, to approve real estate investments which meet all
of the following criteria:
1. The Purchase Price for each property shall not exceed $10,000,000.
2. The investment must consist of a fee interest in real property.
3. If the real property is unimproved at the time of acquisition,
there must be an agreement to complete specified improvements on
the property by a date certain.
4. Prior to, or concurrent with the acquisition, the property must be
net-leased to a tenant approved by the Company's Investment
Committee.
5. The real estate investment may not cause (i) the total investment
with that tenant to exceed $25 million, or (ii) the amount of
annualized rental revenue to be derived by the Company from a
tenant to exceed 5% of the Company's previous 12 months' rental
revenues.
6. The real estate investment may not cause the amount of annualized
rental revenue to be derived by the Company from any one industry
to exceed 25% of the Company's previous 12 months' rental
revenues.
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Exhibit G
FORM OF SUBSIDIARY GUARANTY
This SUBSIDIARY GUARANTY, dated as of February 1, 2000, is made by
each entity that is identified on Schedule A hereto or that hereafter
executes and delivers a Subsidiary Joinder in the form of Exhibit A
attached hereto pursuant to the Credit Agreement described herein
(each such entity, a "Guarantor") in favor of the lenders (the
"Lenders") from time to time party to the Credit Agreement (as defined
below), and Bank of Montreal ("BMO"), as agent (BMO and any successor
thereto in such capacity, "Agent") for the Lenders and in favor of all
other present and future Holders of any of the Guaranteed Obligations
described herein.
R E C I T A L S
A. The Lenders and Agent have entered into that certain Revolving
Credit Agreement, dated as of February 1, 2000 (as amended,
supplemented or otherwise modified from time to time, the "Credit
Agreement"), among Realty Income Corporation, a Maryland
corporation ("Borrower"), the Agent and the Lenders.
B. Each Guarantor is a Subsidiary of Borrower and expects to derive
substantial direct and indirect benefit from the transactions
contemplated by the Credit Agreement.
C. It is a condition precedent to the making of Loans by the Lenders
under the Credit Agreement that each Guarantor shall have
guaranteed payment of each and all debts, liabilities and
obligations of Borrower under the Credit Agreement and the Notes
(collectively, the "Obligations"), on the terms set forth herein.
D. Borrower has agreed, in the Credit Agreement, to cause certain
Subsidiaries of Borrower to become party to this Guaranty, as a
Guarantor hereunder, by executing and delivering a Subsidiary
Joinder in the form of Exhibit A hereto.
NOW, THEREFORE, in consideration of the foregoing and in order to
induce the Lenders to make Loans under the Credit Agreement, each
Guarantor hereby agrees as follows:
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
Section 1.1. General Definitions. Except as otherwise specifically
provided herein, the terms which are defined in Article I of the
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Credit Agreement shall have the same meanings when used in this
Guaranty and the provisions of Section 1.01 of the Credit Agreement
shall apply to this Guaranty.
Section 1.2 Certain Defined Terms. As used in this Guaranty, the
following terms shall have the following meanings:
"Bankruptcy Code" means Title 11 of the United States Code, as from
time to time amended.
"Disallowed Post-Commencement Interest and Expenses" means interest
computed at the rate provided in the Credit Agreement and claims for
reimbursements, costs, expenses or indemnities under the terms of the
Credit Agreement accruing or claimed at any time after commencement of
any Insolvency or Liquidation Proceeding, if the claim for such
interest, reimbursement, cost, expense or indemnity is not allowable,
allowed or enforceable against Borrower in such Insolvency or
Liquidation Proceeding.
"Guaranty" means this Subsidiary Guaranty, dated as of February 1,
2000, made by the Guarantors for the benefit of the Lenders, Agent and
other Holders of Guaranteed Obligations.
"Guaranty Taxes" is defined in Section 3.8(a).
"Holder" means, in respect of any Guaranteed Obligation, the Person
entitled to enforce payment thereof and specifically includes the
Agent and the Lenders.
"Insolvency or Liquidation Proceeding" means any (i) any case under
the Bankruptcy Code, any other insolvency or bankruptcy case or
proceeding, or any receivership, liquidation, reorganization or other
similar case or proceeding, relative to Borrower or to any of its
creditors, as such, or to a substantial part of any of its assets, or
(ii) any proceeding for the liquidation, dissolution or other winding
up of Borrower, whether voluntary or involuntary and whether or not
involving insolvency or bankruptcy, or (iii) any assignment for the
benefit of creditors or any other marshaling of assets and liabilities
of Borrower.
"Subordinated Liabilities" is defined in Section 2.8(a).
ARTICLE II
GUARANTY AND RELATED PROVISIONS
Section 2.1. Guaranty. Each Guarantor hereby unconditionally:
(a) guarantees the punctual payment when due, whether at stated
maturity, by acceleration or otherwise, of (i) all Obligations now
outstanding or hereafter arising under or in connection with the
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Credit Agreement or the Notes, whether for principal, interest, fees,
taxes, additional compensation, expense reimbursements,
indemnification or otherwise, and (ii) each other debt, liability or
obligation of Borrower now outstanding or hereafter arising under any
of the Credit Agreement and the Notes (such Obligations, liabilities
and other debts, liabilities and obligations, collectively, the
"Guaranteed Obligations"), and
(b) agrees to pay on demand (i) all Disallowed Post-Commencement
Interest and Expenses, to the Person entitled to payment thereof if
the claim therefor had been allowed in any Insolvency or Liquidation
Proceeding and (ii) all costs and expenses (including, without
limitation, reasonable attorneys' fees and legal expenses) incurred by
any Holder of Guaranteed Obligations in enforcing this Guaranty;
provided, however, that the amount of each Guarantor's payment
obligations hereunder shall not exceed an aggregate amount equal to
such Guarantor's stockholders' or partners' equity, as the case may
be.
Section 2.2. Acceleration of Payment. If the Notes become
immediately due and payable pursuant to Section 8.01 of the Credit
Agreement, then all liability of each Guarantor under this Guaranty in
respect of any Guaranteed Obligation that is not then due and payable
shall thereupon become and be immediately due and payable, without
notice or demand.
Section 2.3. Guaranty Absolute and Unconditional. Each Guarantor
guarantees that the Guaranteed Obligations will be paid in accordance
with the terms of the Credit Agreement and the Notes, regardless of
any law, regulation or order now or hereafter in effect in any
jurisdiction affecting any of such terms or the rights and claims of
any Holder of Guaranteed Obligations against Borrower with respect
thereto and even if any such rights or claims are modified, reduced or
discharged in an Insolvency or Liquidation Proceeding or otherwise.
The obligations of each Guarantor under this Guaranty are independent
of the Guaranteed Obligations, and a separate action or actions may be
brought and prosecuted against each Guarantor to enforce this
Guaranty, irrespective of whether any action is brought against
Borrower or whether Borrower is joined in any such action or actions.
The liability of each Guarantor under this Guaranty shall be absolute
and unconditional irrespective of (i) any lack of validity or
enforceability of the Credit Agreement or any Note or any other
agreement or instrument relating thereto; (ii) any change in the time,
manner or place of payment of, or in any other term of, all or any of
the Guaranteed Obligations, or any other amendment or waiver of or any
consent to departure from the Credit Agreement or any Note, including,
without limitation, any increase in the Guaranteed Obligations
resulting from the extension of additional credit to Borrower or
otherwise; (iii) any taking, exchange, release or non-perfection of
any collateral, or any taking, release or amendment or waiver of or
consent to departure from any other guaranty, for all or any of the
Guaranteed Obligations; (iv) any manner of application of collateral,
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or proceeds thereof, to all or any of the Guaranteed Obligations, or
any manner of sale or other disposition of any collateral for all or
any of the Guaranteed Obligations or any other assets of Borrower; (v)
any change, restructuring or termination of the corporate structure or
existence of Borrower; or (vi) any other circumstance which might
otherwise constitute a defense available to, or a discharge of, a
surety or guarantor.
Section 2.4. Guaranty Irrevocable and Continuing. This Guaranty is
an irrevocable and continuing offer and agreement guaranteeing payment
of any and all Guaranteed Obligations and shall extend to all
Guaranteed Obligations now outstanding or created or incurred at any
future time, whether or not created or incurred pursuant to any
agreement presently in effect or hereafter made, until all obligations
of the Lenders to extend credit to Borrower have expired or been
terminated, and all Guaranteed Obligations have been fully, finally
and indefeasibly paid. To the extent any contingent Obligation
survives the expiration or termination of the Credit Agreement and the
repayment of the Loans, each Guarantor's liability under this Guaranty
shall likewise survive. This Guaranty may be released only in
writing.
Section 2.5. Reinstatement. If at any time any payment on any
Guaranteed Obligation is set aside, avoided or rescinded or must
otherwise be restored or returned, this Guaranty and the liability of
each Guarantor under this Guaranty shall remain in full force and
effect and, if previously released or terminated, shall be
automatically and fully reinstated, without any necessity for any act,
consent or agreement of any Guarantor, as fully as if such payment had
never been made and as fully as if any such release or termination had
never become effective.
Section 2.6. Waiver. Each Guarantor hereby waives and agrees not to
assert or take advantage of:
(a) Marshaling. Any right to require any Holder of Guaranteed
Obligations to proceed against or, exhaust its recourse against
Borrower or any other Subsidiary Guarantor or any other Person liable
for any of the Guaranteed Obligations or against any collateral for
any of the Guaranteed Obligations or against any other Person or
property, before demanding and enforcing payment of the Guaranteed
Obligations from any Guarantor under this Guaranty;
(b) Other Defenses. Any defense that may arise by reason of (i) the
incapacity, lack of authority, death or disability of Borrower or any
other Person; (ii) the revocation or repudiation of any of the Credit
Agreement or the Notes by Borrower or any other Person; (iii) the
unenforceability in whole or in part of the Credit Agreement or the
Notes or any other instrument, document or agreement; (iv) the failure
of any Holder of Guaranteed Obligations to file or enforce a claim
against any Person liable for any of the Guaranteed Obligations or in
any Liquidation or Insolvency Proceeding; or (v) any borrowing or
grant of a security interest under Section 364 of the Bankruptcy Code;
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(c) Notices. Presentment, demand for payment, protest, notice of
discharge, notice of acceptance of this Guaranty, notice of the
incurrence of, or any default in respect of, any debt, liability or
obligation guaranteed hereunder, and all other indulgences and notices
of every type or nature, including, without limitation and to the
maximum extent permitted by law, notice of the disposition of any
collateral for any of the Guaranteed Obligations;
(d) Election of Remedies. Any defense based upon an election of
remedies (including, if available, an election to proceed by non-
judicial foreclosure) or any other act or omission of any Holder of
Guaranteed Obligations or any other Person which destroys or otherwise
impairs any right that any Guarantor might otherwise have for
subrogation, recourse, reimbursement, indemnity, exoneration,
contribution or otherwise. against Borrower or any other Person;
(e) Collateral. Any defense based upon any taking, modification or
release of any collateral or guaranties for the Guaranteed
Obligations, or any failure to create or perfect or ensure the
priority or enforceability of any security interest in any collateral
for any of the Guaranteed Obligations or any act or omission related
thereto;
(f) Offsets. Any right to recoup from or offset against any of the
Guaranteed Obligations any claim that may be held or asserted by or
available to (i) Borrower or any other Guarantor or any other Person
liable for any of the Guaranteed Obligations against any Holder of
Guaranteed Obligations or (ii) any Guarantor against Borrower, any
other Guarantor, any other Holder of Guaranteed Obligations or any
other Person; or
(g) Defenses of Others. Any other claim, right or defense
(including, by way of illustration and without limitation, such
matters as failure or insufficiency of consideration, statute of
limitations, breach of contract, tortious conduct, accord and
satisfaction, and discharge by agreement, conduct or in a Liquidation
or Insolvency Proceeding), except the defense of payment, that may be
held or asserted by or available to (i) Borrower or any other
Guarantor or any other Person liable for any of the Guaranteed
Obligations against any Holder of Guaranteed Obligations or (ii) any
Guarantor against Borrower, any other Guarantor, any other Holder of
Guaranteed Obligations or any other Person.
Section 2.7. Subrogation. Each Guarantor hereby represents, warrants
and agrees, in respect of any and all present and future rights of
subrogation, recourse, reimbursement, indemnity, exoneration,
contribution and other claims that such Guarantor at any time may have
against Borrower, any other Guarantor or any other Person liable for
the payment of any of the Guaranteed Obligations (including, without
limitation, the owner of any interest in collateral for any of the
Guaranteed Obligations) as a result of or in connection with this
Guaranty or any payment hereunder, that:
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(a) No Agreement. Such Guarantor has not entered into, and agrees
that it will not enter into, any agreement providing, directly or
indirectly, for any such right or claim against Borrower or, except as
set forth in Section 2.10, against any other Subsidiary of Borrower,
and each such agreement now existing or hereafter entered into (except
Section 2.10) is and shall be void;
(b) Release. Such Guarantor forever waives and releases, and agrees
never to xxx upon, any such right or claim against Borrower and,
except as set forth in Section 2.10, against any other Subsidiary of
Borrower, whether or not the Guaranteed Obligations have been paid in
full;
(c) Capital Contribution. Each payment made by such Guarantor under
this Guaranty shall be a contribution to the capital of Borrower, and
no such payment shall give rise to any claim (as that term is defined
in the Bankruptcy Code) in favor of such Guarantor against Borrower;
(d) Subordination of Contribution Rights. Each Guarantor reserves,
as against each other Guarantor, its right of contribution under
Section 2.10 but agrees that all such contribution rights shall be
included among the Subordinated Liabilities; and
(e) Deferral of Other Rights and Claims. Until all obligations of
the Lenders to extend credit to Borrower have expired or been
terminated and all the Guaranteed Obligations have been paid in full,
such Guarantor will not demand, xxx for, accept or receive any payment
or transfer on account of any such right or claim from any Person
(other than Borrower and its Subsidiaries) liable for the payment of
any of the Guaranteed Obligations.
Section 2.8. Subordination Provisions. (a) Subordination. Any and
all present and future debts, liabilities and obligations of every
type and description (whether for money borrowed, on intercompany
accounts, for provision of goods or services, under tax sharing or
contribution agreements or on account of any other transaction,
agreement, occurrence or event and whether absolute or contingent,
direct or indirect, matured or unmatured, liquidated or unliquidated,
created directly or acquired from another, or sole, joint, several or
joint and several) of Borrower now outstanding or hereafter incurred
or owed to any Guarantor (the "Subordinated Liabilities") shall be,
and hereby are, subordinated to full and final payment of the
Guaranteed Obligations.
(b) Prohibited Payments. No Guarantor will demand, xxx for, accept
or receive, or cause or permit any other Person to make, any payment
on or transfer of property on account of any Subordinated Liabilities
except to the extent payment is permitted at the time under Section
7.02 of the Credit Agreement.
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(c) No Liens or Transfers. No Guarantor will demand, accept or hold
any Lien upon any real or personal property of Borrower as security
for any of the Subordinated Liabilities and agrees that any such Lien
shall be void.
(d) Insolvency Proceedings. In any Insolvency or Liquidation
Proceeding, the Holders of Guaranteed Obligations shall be entitled to
receive payment in full of all amounts due or to become due on or in
respect of the Guaranteed Obligations, or provision shall be made for
such payment in money or money's worth, before any Guarantor is
entitled to receive any payment or distribution of any kind or
character, whether in cash, property or securities, on account of any
of the Subordinated Liabilities, and to that end the Holders of
Guaranteed Obligations shall be entitled to receive, for application
to the payment thereof, all payments and distributions of any kind or
character, whether in cash, property or securities (including any such
payment or distribution which may be payable or deliverable by reason
of the payment of any other debt or liability of Borrower being
subordinated to the payment of the Subordinated Liabilities), which
may be payable or deliverable in respect of the Subordinated
Liabilities in any such Insolvency or Liquidation Proceeding.
(e) Disallowed Post-Commencement Interest and Expenses. If in any
Insolvency or Liquidation Proceeding (i) any payment or distribution
of any kind or character, whether in cash, property or securities
(including any such payment or distribution which may be payable or
deliverable by reason of the payment of any other debt or liability of
Borrower being subordinated to the payment of the Subordinated
Liabilities) is payable or deliverable in respect of the Subordinated
Liabilities, and (ii) the Holders of Guaranteed Obligations are not
otherwise entitled to receive such payment or distribution pursuant to
Section 2.8(d), and (iii) any amount remains unpaid to any Holder of
Guaranteed Obligations on account of any Disallowed Post-Commencement
Interest and Expenses, then the Holders of Guaranteed Obligations
shall be entitled to receive payment of all such unpaid Disallowed
Post-Commencement Interest and Expenses from and out of any and all
such payments and distributions in respect of the Subordinated
Liabilities.
(f) Held in Trust. If any payment, transfer or distribution is made
to any Guarantor upon any Subordinated Liabilities that is not
permitted to be made under this Section 2.8 or that the Holders of
Guaranteed Obligations are not entitled to receive under this Section
2.8, such Guarantor shall receive and hold the same in trust, as
trustee for the benefit of the Holders of Guaranteed Obligations, and
shall forthwith transfer and deliver the same to Agent, in precisely
the form received (except for any required endorsement), for
application to the payment of Guaranteed Obligations or any unpaid
Disallowed Post-Commencement Interest and Expenses.
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(g) Claims in Bankruptcy. Each Guarantor will file all claims
against Borrower in any Liquidation or Insolvency Proceeding in which
the filing of claims is required or permitted by law upon any of the
Subordinated Liabilities and will assign to Agent, for the benefit of
the Holders of Guaranteed Obligations, all rights of such Guarantor
thereunder. If any Guarantor does not file any such claim at least 30
days prior to any applicable claims bar date, Agent is hereby
authorized (but shall not be obligated), as attorney-in-fact for such
Guarantor with full power of substitution, either to file such claim
or proof thereof in the name of such Guarantor or, at Agent's option,
to assign the claim and cause the claim or proof thereof to be filed
by an agent or nominee. Agent and its agents and nominees shall have
the sole right, but no obligation, to accept or reject any plan
proposed in such Insolvency or Liquidation Proceeding and to cast any
votes and to take any other action with respect to all claims upon any
of the Subordinated Liabilities.
(h) Subordination Effective and Not Impaired. This Section 2.8 shall
remain effective for so long as this Guaranty is continuing and
thereafter for so long as any Guaranteed Obligation is outstanding.
Each Guarantor's obligations under this Section 2.8 (i) shall be
absolute and unconditional as set forth in Section 2.3, irrevocable
and continuing as set forth in Section 2.4, subject to reinstatement
as set forth in Section 2.5, and not be affected or impaired by any of
the matters waived in Section 2.6, (ii) shall be subject to the
provisions of Article V of the Credit Agreement, and (iii) shall
otherwise be as equally enduring and free from defenses as such
Guarantor's liability under this Guaranty.
Section 2.9. Fraudulent Transfer Limitation. If, in any action to
enforce this Guaranty or any proceeding to allow or adjudicate a claim
under this Guaranty, a court of competent jurisdiction determines that
enforcement of this Guaranty against any Guarantor for the full amount
of the Guaranteed Obligations is not lawful under, or would be subject
to avoidance under, Section 548 of the Bankruptcy Code or any
applicable provision of comparable state law, the liability of such
Guarantor under this Guaranty shall be limited to the maximum amount
lawful and not subject to avoidance under such law.
Section 2.10. Contribution among Guarantors. The Guarantors desire
to allocate among themselves, in a fair and equitable manner, their
rights of contribution from each other when any payment is made by one
of the Guarantors under this Guaranty. Accordingly, if any payment is
made by a Guarantor under this Guaranty (a "Funding Guarantor") that
exceeds its Fair Share, the Funding Guarantor shall be entitled to a
contribution from each other Guarantor in the amount of such other
Guarantor's Fair Share Shortfall, so that all such contributions shall
cause each Guarantor's Aggregate Payments to equal its Fair Share.
For these purposes:
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(a) "Fair Share" means, with respect to a Guarantor as of any
date of determination, an amount equal to (i) the ratio of
(x) the Adjusted Maximum Amount of such Guarantor to (y) the
aggregate Adjusted Maximum Amounts of all Guarantors,
multiplied by (ii) the aggregate amount paid on or before
such date by all Funding Guarantors under this Guaranty.
(b) "Fair Share Shortfall" means, with respect to a Guarantor as
of any date of determination, the excess, if any, of the Fair
Share of such Guarantor over the Aggregate Payments of such
Guarantor.
(c) "Adjusted Maximum Amount" means, with respect to a Guarantor
as of any date of determination, the maximum aggregate amount
of the liability of such Guarantor under this Guaranty,
limited to the extent required under Section 2.9 (except
that, for purposes solely of this calculation, any assets or
liabilities arising by virtue of any rights to or obligations
of contribution under this Section 2.10 shall not be counted
as assets or liabilities of such Guarantor).
(d) "Aggregate Payments" means, with respect to a Guarantor as of
any date of determination, the aggregate net amount of all
payments made on or before such date by such Guarantor under
this Guaranty (including, without limitation, under this
Section 2.10).
The amounts payable as contributions hereunder shall be determined as
of the date on which the related payment or distribution is made by
the Funding Guarantor. The allocation and right of contribution among
the Guarantors set forth in this Section 2.10 shall not be construed
to limit in any way the liability of any Guarantor under this Guaranty
to the Holders of the Guaranteed Obligations.
Section 2.11. Joint and Several Obligation. This Guaranty and all
liabilities of each Guarantor hereunder shall be the joint and several
obligation of each Guarantor and may be freely enforced against each
Guarantor, for the full amount of the Guaranteed Obligations (subject
to Section 2.9), without regard to whether enforcement is sought or
available against any other Guarantor.
ARTICLE III
MISCELLANEOUS PROVISIONS
Section 3.1. Condition of Borrower. Each Guarantor is fully aware of
the financial condition of Borrower and is executing and delivering
this Guaranty based solely upon such Guarantor's own independent
investigation of all matters pertinent hereto and is not relying in
any manner upon any representation or statement by any Holder of
Guaranteed Obligations. Each Guarantor represents and warrants that
Page 88
it is in a position to obtain, and each Guarantor hereby assumes full
responsibility for obtaining, any additional information concerning
the financial condition of Borrower and any other matter pertinent
hereto as such Guarantor may desire, and such Guarantor is not relying
upon or expecting any Holder of Guaranteed Obligations to furnish to
such Guarantor any information now or hereafter in the possession of
any Holder of Guaranteed Obligations concerning the same or any other
matter. By executing this Guaranty, each Guarantor knowingly accepts
the full range of risks encompassed within a contract of this type,
which risks each Guarantor acknowledges. No Guarantor shall have the
right to require any Holder of Guaranteed Obligations to obtain or
disclose any information with respect to the Guaranteed Obligations,
the financial condition or prospects of Borrower, the ability of
Borrower to pay or perform the Guaranteed Obligations, the existence,
perfection, priority or enforceability of any collateral security for
any or all of the Guaranteed Obligations, the existence or
enforceability of any other guaranties of all or any part of the
Guaranteed Obligations, any action or non-action on the part of any
Holder of Guaranteed Obligations, Borrower, or any other Person, or
any other event, occurrence, condition or circumstance whatsoever.
Section 3.2. Amendments. (a) Amendment to Guaranty. No amendment or
waiver of any provision of this Guaranty, and no consent to any
departure by any Guarantor herefrom, shall in any event be effective
unless the same shall be in writing and signed by the Required Banks,
and then such waiver or consent shall be effective only in the
specific instance and for the specific purpose for which given, except
that no amendment, waiver or consent shall, unless in writing and
signed by all the Lenders, (i) limit the liability of any Guarantor
hereunder, (ii) postpone any date fixed for payment hereunder, or
(iii) change the number of Lenders required to take any action
hereunder.
(b) Amendment or Modification of the Notes. The Notes may be
amended, modified or supplemented in accordance with their terms
without notice to or consent or agreement by any Guarantor, including,
without limitation, so as to (i) alter, compromise, modify,
accelerate, extend, renew, refinance or change the time or manner for
making of advances, provision of other financial accommodations, or
the payment or performance of all or any portion of the Guaranteed
Obligations, (ii) increase or reduce the rate of interest or amount of
principal payable on the Notes, (iii) release or discharge Borrower or
any other Person as to all or any portion of the Guaranteed
Obligations, or (iv) release, substitute or add any one or more
guarantors or endorsers, accept additional or substituted security for
payment or performance of the Guaranteed Obligations, or release or
subordinate any security therefor.
Section 3.3. Notices. All notices and other communications provided
for hereunder shall be in writing (including telecopier communication)
and mailed, telecopied or delivered; if to any Guarantor, at c/o
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Realty Income Corporation, 000 Xxxx Xxxxx Xxxxxx, Xxxxxxxxx, XX 00000-
1707, Attention: Xxxxxxx Xxxxxxxx, Esq., with a copy to: Xxxxxxx X.
Xxxxx Esq., Xxxxxx & Xxxxxxx, 000 Xxxx Xxxxx Xxxxxx, Xxxxx 0000, Xxx
Xxxxxxx, XX 00000-0000, if to Agent, at Bank of Montreal, 000 Xxxxx
XxXxxxx Xxxxxx, 00 Xxxx, Xxxxxxx, Xxxxxxxx 00000, Attention: Xxxxx
Xxxxxxx; and if to any Lender, at its address specified in the Credit
Agreement, or, as to any party, at such other address as shall be
designated by such party in a written notice to each other party. All
such notices and other communications shall, when mailed or telecopied
be effective when deposited in the mails or telecopied respectively.
Section 3.4. Right of Set-off. If any request is made or consent is
given by the Required Banks pursuant to Section 8.01 of the Credit
Agreement for a declaration by the Agent that the Notes are
immediately due and payable, or if the Notes become immediately due
and payable pursuant to Section 8.01 of the Credit Agreement, each
Lender shall have the right at any time and from time to time
thereafter, to the fullest extent permitted by law, to set off and
apply any and all deposits (general or special, time or demand,
provisional or final) at any time held and other liability at any time
owing by such Lender to or for the credit or the account of any
Guarantor against any and all liability of such Guarantor under this
Guaranty, whether or not such Lender shall have made any demand under
this Guaranty and even though such liability may then be contingent
and unmatured. Each Lender agrees promptly to notify the affected
Guarantor after any such set-off and application made by such Lender,
but the failure to give such notice shall not affect the validity of
such set-off and application. The rights of each Lender under this
Section 3.4 are in addition to other rights and remedies (including,
without limitation, other rights of set-off) which such Lender may
have.
Section 3.5. Successors and Assigns. This Guaranty is binding upon
and enforceable against each Guarantor, its successors and assigns,
and shall inure to the benefit of, and be enforceable by, each Holder
of any of the Guaranteed Obligations and such Holder's heirs,
representatives, successors and assigns.
Section 3.6. No Inquiry. Each Holder of Guaranteed Obligations may
rely, without further inquiry, on the power and authority of each
Guarantor, Borrower and each of its Subsidiaries and on the authority
of all officers, directors and agents acting or purporting to act on
their behalf.
Section 3.7. Bankruptcy. So long as any Commitments or Guaranteed
Obligation are outstanding, no Guarantor will, without the prior
written consent of Agent and the Required Banks, commence or join with
any other Person in commencing any Insolvency or Liquidation
Proceeding against Borrower or any of its Subsidiaries.
Section 3.8. No Waiver; Remedies. No failure on the part of any
Holder of Guaranteed Obligations to exercise, and no delay in
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exercising, any right hereunder shall operate as a waiver thereof, and
any single or partial exercise of any right hereunder shall not
preclude any other or further exercise of any other right or of the
same right as to any other matter or on a subsequent occasion.
Section 3.9. Remedies Cumulative. All rights, powers and remedies of
each Holder of Guaranteed Obligations under this Guaranty, under any
other agreement now or at any time hereafter in effect between any
such Holder and each and all of the Guarantors (whether relating to
the Guaranteed Obligations or otherwise) or now or hereafter existing
at law or in equity or by statute or otherwise, shall be cumulative
and concurrent and not alternative and each such right, power and
remedy may be exercised independently of, and in addition to, each
other such right, power or remedy.
Section 3.10. Severally Enforceable. This Guaranty may be enforced
severally and successively by any one or more of the Holders of
Guaranteed Obligations in one or more actions, whether independent,
concurrent, joint, successive or otherwise. The claims, rights and
remedies of any Holder of Guaranteed Obligations (i) may not be
modified or waived by any other Holder, except as set forth in Section
3.2(a), and (ii) shall not be reduced, discharged, affected or
impaired by any deed, act or omission, whether or not wrongful, of any
other Holder.
Section 3.11. Counterparts. This Guaranty may be executed in
counterparts, and each such counterpart for all purposes shall be
deemed an original and all such counterparts together shall constitute
but one and the same agreement.
Section 3.12. Severability. If any provision hereof or the
application thereof in any particular circumstance is held to be
unlawful or unenforceable in any respect, all other provisions hereof
and such provision in all other applications shall nevertheless remain
effective and enforceable to the maximum extent lawful.
Section 3.13. Integration. This Guaranty is intended as an
integrated and final expression of the entire agreement of such
Guarantor with respect to the subject matter hereof. No
representation, understanding, promise or condition concerning the
subject matter hereof shall be binding upon any Holder of Guaranteed
Obligations unless expressed herein or therein, and no course of prior
dealing or usage of trade, and no parol or extrinsic evidence of any
nature, shall be admissible to supplement, modify or vary any of the
terms hereof. Acceptance of or acquiescence in a course of
performance rendered under this Guaranty or any other dealings between
any Guarantor and any Holder of Guaranteed Obligations shall not be
relevant to determine the meaning of this Guaranty even though the
accepting or acquiescing party had knowledge of the nature of the
performance and opportunity for objection.
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SECTION 3.14. GOVERNING LAW; SUBMISSION TO JURISDICTION; WAIVER OF
JURY TRIAL.
(a) GOVERNING LAW. THIS GUARANTY SHALL BE GOVERNED BY, AND CONSTRUED
IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK.
(b) SUBMISSION TO JURISDICTION. ANY LEGAL ACTION OR PROCEEDING WITH
RESPECT TO THIS AGREEMENT 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, EACH PARTY
HERETO CONSENTS, FOR ITSELF AND IN RESPECT OF ITS PROPERTY, TO THE
JURISDICTION OF THOSE COURTS. EACH PARTY IRREVOCABLY WAIVES ANY
OBJECTION, INCLUDING ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON
THE GROUNDS OF FORUM NON CONVENIENS, WHICH IT MAY NOW OR HEREAFTER
HAVE TO THE BRINGING OF ANY ACTION OR PROCEEDING IN SUCH JURISDICTION
IN RESPECT OF THIS AGREEMENT OR ANY DOCUMENT RELATED HERETO. SERVICE
OF ANY SUMMONS, COMPLAINT OR OTHER PROCESS MAY BE MADE BY ANY MEANS
PERMITTED BY NEW YORK LAW.
(c) WAIVER OF JURY TRIAL. EACH PARTY HERETO WAIVES ALL RIGHTS TO A
TRIAL BY JURY OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING
OUT OF OR RELATED TO THIS GUARANTY, THE NOTES OR THE TRANSACTIONS
CONTEMPLATED HEREBY OR THEREBY IN ANY ACTION, PROCEEDING OR OTHER
LITIGATION OF ANY TYPE BROUGHT BY ANY OF THE PARTIES AGAINST ANY OTHER
PARTY OR PARTIES, WHETHER WITH RESPECT TO CONTRACT CLAIMS, TORT
CLAIMS, OR OTHERWISE, AND AGREES THAT ANY SUCH CLAIM OR CAUSE OF
ACTION SHALL BE TRIED BY A COURT TRIAL WITHOUT A JURY.
Section 3.15. Acceptance and Notice. Each Guarantor acknowledges
acceptance hereof and reliance hereon by each Holder of any of the
Guaranteed Obligations and waives, irrevocably and forever, all notice
thereof.
IN WITNESS WHEREOF, the Guarantors have caused this Subsidiary
Guaranty to be duly executed and delivered by an officer of each
Guarantor thereunto duly authorized as of the date first above
written.
THE GUARANTORS:
By: Realty Income Corporation
Its: General Partner
By:
------------------------------
Xxxxxxx X. Xxxxxxxx
Executive Vice President,
General Counsel
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Schedule A to Subsidiary Guaranty
GUARANTORS
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Exhibit A to Subsidiary Guaranty
FORM OF SUBSIDIARY JOINDER
This Subsidiary Joinder is entered into by , a
corporation (the "Company"), as of .
WHEREAS, the sole stockholder of the Company (the "Sole Stockholder")
has entered into the Revolving Credit Agreement, dated as of
February 1, 2000, among Realty Income Corporation, as Borrower, each
of the banks identified on the signature pages thereof and Bank of
Montreal, as Agent for the Banks (the "Credit Agreement") which
requires that each of the Subsidiaries of the Sole Stockholder enter
into a subsidiary guaranty (the "Subsidiary Guaranty", attached hereto
as Exhibit A) to and for the benefit of the lenders party to the
Credit Agreement;
WHEREAS, as a precondition to any transfer of certain properties owned
by the Sole Stockholder, any of its Subsidiaries (as defined in the
Credit Agreement), or any combination thereof (the "Properties"), to
any other Subsidiary, that such transferee Subsidiary execute and
deliver a subsidiary joinder (the "Subsidiary Joinder") with respect
to the Subsidiary Guaranty to and for the benefit of the lenders party
to the Credit Agreement;
WHEREAS, the Company owns a % limited partnership interest in the
limited partnership that owns such Properties; and
WHEREAS, the Company is a Subsidiary of the [Sole Stockholder] of the
Company, as defined in the Credit Agreement;
NOW, THEREFORE, the Company hereby agrees to join with the
Subsidiaries party to the Subsidiary Guaranty and agrees further to be
bound by the terms and conditions of the Subsidiary Guaranty as though
the Company had originally been a party to it.
IN WITNESS WHEREOF, the undersigned has executed this Subsidiary
Joinder as of the date first written above.
[Subsidiary Name]
----------------------------------
By:
-----------------------------
Its:
-----------------------------
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Exhibit A to Subsidiary Joinder
SUBSIDIARY GUARANTY
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Schedule 1
COMMITMENTS
BANK COMMITMENT
Bank of Montreal (Agent) $25,000,000
Total - All Banks $25,000,000
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SCHEDULE 5.01(A)
SUBSIDIARIES AND JOINT VENTURES OF THE COMPANY
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SCHEDULE 5.01(Q)
ERISA LIABILITIES
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SCHEDULE 5.01(R)
INTELLECTUAL PROPERTY
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