REVOLVING CREDIT AGREEMENT
among
GROVE OPERATING, L.P.,
GROVE PROPERTY TRUST
and
RHODE ISLAND HOSPITAL TRUST
NATIONAL BANK
and
OTHER BANKS WHICH MAY BECOME
PARTIES TO THIS AGREEMENT
with
RHODE ISLAND HOSPITAL TRUST NATIONAL BANK,
AS AGENT
BANCBOSTON SECURITIES, INC.
AS ARRANGER
Dated April 30, 1998
Table of Contents
1..DEFINITIONSAND RULES OF INTERPRETATION............ ....1
1.1.Definitions................................ ....1
1.2.Rules of Interpretation.................... ....1
2..THE REVOLVING CREDIT FACILITY.................... ....1
2.1. Commitment to Lend.............................1
2.2. The Revolving Credit Notes.....................2
2.3. Interest on Revolving Credit Loans; Fees.......2
2.4. Requests for Revolving Credit Loans............4
2.5. Conversion Options.............................7
2.6. Funds for Revolving Credit Loans...............8
3..REPAYMENT OF THE REVOLVING CREDIT LOANS................9
3.1. Maturity.......................................9
3.2. Optional Repayments of Revolving Credit Loans..10
4..CERTAIN GENERAL PROVISIONS.............................10
4.1. Funds for Payments.............................10
4.2. Computations...................................11
4.3. Inability to Determine LIBOR Rate..............12
4.4. Illegality.....................................12
4.5. Additional Costs, Etc..........................13
4.6. Capital Adequacy...............................14
4.7. Certificate....................................14
4.8. Indemnity......................................15
4.9. Interest on Overdue Amounts....................15
5..BORROWING BASE.........................................15
5.1. Additions and Replacements to Eligible Properties. 15
5.2. Removal from Eligible Properties...............16
5.3. Recourse Obligations...........................17
6..REPRESENTATIONSAND WARRANTIES..........................17
7..AFFIRMATIVE COVENANTS..................................19
8. NEGATIVE COVENANTS.....................................22
9..FINANCIAL COVENANTS....................................25
10.CONDITIONS TO THE CLOSING DATE.........................27
10.1. Loan Documents................................27
10.2. Certified Copies of Organization Documents....27
10.3. By-Laws; Resolutions..........................27
10.4. Incumbency Certificate; Authorized Signers....27
10.5. Survey and Taxes..............................28
10.6. Title Insurance; Title Exception Documents....28
10.7. Leases, Service Contracts and Other Documents.28
10.8. Estoppel Agreements...........................28
10.9. Certificates of Insurance.....................28
10.10. Hazardous Substance Assessments..............29
10.11.Opinion of Counsel Concerning Organization and Loan
Documents............................................29
10.12. Structural Condition Assurances..............29
10.13. Permit Assurances; Compliance................29
10.14. Guaranty.....................................29
10.15. Financial Analysis of Initial Eligible Properties. 29
10.16. Inspection of Eligible Properties............30
10.17. Certifications from Government Officials; UCC-11
Reports.30
10.18. Proceedings and Documents....................30
10.19. Fees.........................................30
10.20.Closing Certificate..........................30
11.CONDITIONS TO ALL BORROWINGS............................30
11.1. Representations True; No Event of Default;
Compliance Certificate...............................30
11.2. No Legal Impediment...........................31
11.3. Governmental Regulation.......................31
00.XXXXXX OF DEFAULT; ACCELERATION; ETC....................31
12.1. EVENTS OF DEFAULT; ACCELERATION...............31
12.2. Termination of Commitments....................33
12.3. Remedies......................................33
12.4. Distribution of Proceeds......................34
13.SETOFF..................................................34
14.ENVIRONMENTAL MATTERS...................................35
14.1.Representations and Warranties...................35
14.2.Environmental Indemnity and Covenants............37
15.THE AGENT...............................................39
15.1.Authorization.................................39
15.2.Employees and Agents..........................39
00.0.Xx Liability..................................39
00.0.Xx Representations............................40
15.5.Payments......................................40
15.6.Holders of Revolving Credit Notes.............42
15.7.Indemnity.....................................42
15.8.Agent as Bank.................................42
15.9.Notification of Defaults and Events of Default.42
15.10.Duties in the Case of Enforcement............42
15.11.Successor Agent..............................43
15.12.Notices......................................43
16.ASSIGNMENT; PARTICIPATIONS; ETC.........................44
16.1.Conditions to Assignment by Banks.............44
16.2.Certain Representations and Warranties; Limitations;
Covenants.............................................44
16.3.Register......................................45
00.0.Xxx Revolving Credit Notes....................46
16.5.Participations................................46
16.6.Pledge by Lender..............................46
00.0.Xx Assignment by Borrower.....................47
16.8.Disclosure....................................47
17.CONSENTS, AMENDMENTS, WAIVERS, ETC.....................47
18.MISCELLANEOUS.........................................48
19.WAIVER OF JURY TRIAL..................................50
20.PREJUDGMENT REMEDY WAIVER.............................50
EXHIBITS
A Form of Revolving Credit Note
B Eligible Property Conditions
C Form of Lease Summaries
D Form of Loan Request
E Form of Compliance Certificate
F Form of Closing Certificate
G Form of Assignment and Assumption Agreement
Schedules to Revolving Credit Agreement
SCHEDULE 1 Banks' Commitments
SCHEDULE 2 Definitions and Rules of Interpretation
SCHEDULE 3 List of Additional Guarantors and Eligible
Properties
SCHEDULE 6(b) Capitalization; Outstanding Securities, Etc.
SCHEDULE 6(c) Partially Owned Real Estate Holding Entities
SCHEDULE 6(p) Subsidiaries/Joint Ventures
REVOLVING CREDIT AGREEMENT
This REVOLVING CREDIT AGREEMENT is made as of the 30th day of April,
1998, by and among GROVE OPERATING, L.P., a Delaware limited partnership (the
"Borrower"), GROVE PROPERTY TRUST, a Maryland corporation which is the sole
general partner of the Borrower (the "Guarantor"), each having its principal
place of business at 000 Xxxxxx Xxxxxx, Xxxxxxxx, Xxxxxxxxxxx 00000, RHODE
ISLAND HOSPITAL TRUST NATIONAL BANK, a national banking association having
its principal place of business at Xxx XxxxXxxxxx Xxxxx, Xxxxxxxxxx, Xxxxx
Xxxxxx 00000, and the other lending institutions which may become parties
hereto pursuant to 15 (individually, a "Bank" and collectively, the "Banks")
and RHODE ISLAND HOSPITAL TRUST NATIONAL BANK, as agent for itself and each
other Bank (in such capacity, the "Agent").
1. DEFINITIONS AND RULES OF INTERPRETATION.
1.1.Definitions.Except as otherwise expressly provided herein,
all capitalized terms used in this Agreement, the exhibits hereto and any
notes, certificates, reports or other documents or instruments made or
delivered pursuant to or in connection with this Agreement shall have the
meanings set forth for such terms in Schedule 2 hereto.
1.2.Rules of Interpretation.Except as otherwise expressly
provided herein, the rules of interpretation set forth in Schedule 2 hereto
shall apply to this Agreement, the exhibits hereto and any notes,
certificates, reports or other documents or instruments made or delivered
pursuant to or in connection with this Agreement.
2. THE REVOLVING CREDIT FACILITY.
2.1.Commitment to Lend. Subject to the provisions of 2.4 and
the other terms and conditions set forth in this Agreement, each of the Banks
severally agrees to lend to the Borrower and the Borrower may borrow, repay,
and reborrow from each Bank from time to time between the Closing Date and
the Maturity Date upon notice by the Borrower to the Agent given in
accordance with 2.4 hereof, such sums as are requested by the Borrower up to
a maximum aggregate principal amount outstanding (after giving effect to all
amounts requested) at any one time equal to such Bank's Commitment; provided
that the sum of the outstanding aggregate amount of the Revolving Credit
Loans (after giving effect to all amounts requested) shall not at any time
exceed the Borrowing Base at such time. The Borrower agrees that it shall be
an Event of Default if at any time the outstanding Revolving Credit Loans
exceed the Borrowing Base at such time and such excess is not paid to the
Agent on behalf of the Banks within thirty (30) days of the Agent's request
therefor. The Total Commitment of the Banks shall be automatically reduced
pro rata in accordance with each Bank's Commitment Percentage to $35,000,000
on the anniversary of the Closing Date unless prior to such anniversary the
outstanding principal balance of the Revolving Credit Loans shall exceed
$35,000,000 at any one time.
The Revolving Credit Loans shall be made pro rata in accordance with
each Bank's Commitment Percentage. Each request for a Revolving Credit Loan
made pursuant to 2.4 hereof shall constitute a representation and warranty
by the Borrower that the conditions set forth in 10 have been satisfied as
of the Closing Date and that the conditions set forth in 11 have been
satisfied on the date of such request and will be satisfied on the proposed
Drawdown Date of the requested Revolving Credit Loan. No Revolving Credit
Loan shall be required to be made by any Bank unless all of the conditions
contained in 10 have been satisfied as of the Closing Date and that the
conditions set forth in 11 have been met at the time of any request for a
Revolving Credit Loan.
2.2.The Revolving Credit Notes. The Revolving Credit Loans
shall be evidenced by the Revolving Credit Notes. A Revolving Credit Note
shall be payable to the order of each Bank in an aggregate principal amount
equal to such Bank's Commitment. The Borrower irrevocably authorizes each
Bank to make or cause to be made, at or about the time of the Drawdown Date
of any Revolving Credit Loan or at the time of receipt of any payment of
principal on such Bank's Revolving Credit Notes, an appropriate notation on
such Bank's Revolving Credit Note Record reflecting the making of such
Revolving Credit Loan or (as the case may be) the receipt of such payment.
The outstanding amount of the Revolving Credit Loans set forth on such Bank's
Revolving Credit Note Record shall be prima facie evidence of the principal
amount thereof owing and unpaid to such Bank, but the failure to record, or
any error in so recording, any such amount on such Bank's Revolving Credit
Note Record shall not limit or otherwise affect the obligations of the
Borrower hereunder or under any Revolving Credit Note to make payments of
principal of or interest on any Revolving Credit Note when due.
2.3.Interest on Revolving Credit Loans; Fees.
(a) Base Rate. Each Base Rate Loan shall bear interest for the
period commencing with the Drawdown Date thereof and ending on the last
day of each Interest Period with respect thereto (unless
earlier paid in accordance with 3.2) at a rate equal to the Base Rate.
(b) LIBOR Rate. Each LIBOR Rate Loan shall bear interest for the
period commencing with the Drawdown Date thereof and ending on the last
day of each Interest Period with respect thereto (unless earlier paid in
accordance with 3.2) at a rate equal to the LIBOR Rate determined for
such Interest Period plus one and two-tenths of one percent (1.20%).
(c) Interest Payments. The Borrower unconditionally promises to
pay interest on each Revolving Credit Loan in arrears on each Interest
Payment Date with respect thereto.
(d) Closing Fee. The Borrower agrees to pay to the Agent a
closing fee as set forth in that certain letter agreement dated March
27, 1998 between the Agent and the Borrower.
(e) Unused Fee. From and after the date hereof until the earlier
of (i) the Maturity Date or (ii) the date on which the Commitments
terminate, the Borrower agrees to pay to the Agent, for the accounts of
the Banks in accordance with their respective Commitment Percentages, an
unused fee in an amount equal to either (a) fifteen hundredths of one
percent (0.15%) per annum on the Daily Unused Commitment, for each day
that the aggregate outstanding principal balance of all Revolving Credit
Loans is more than fifty percent (50%) of the Total Commitment and (b)
eighteen hundredths of one percent (0.18%) per annum on the Daily Unused
Commitment, for each day that the aggregate outstanding principal
balance of all Revolving Credit Loans is equal to or less than fifty
percent (50%) of the Total Commitment, in each case calculated during
each calendar quarter or portion thereof for the first calendar quarter
of the term of this Agreement and the last calendar quarter of the term
of this Agreement, if either of same is not a full calendar quarter from
the date hereof to the Maturity Date (the "Unused Fee"). The Unused Fee
shall be payable quarterly in arrears on the fifteenth (15th) day of
each January, April, July and October quarter for the immediately
preceding calendar quarter commencing on the first such date following
the Closing Date, with a final payment on the earlier of (i) Maturity
Date or (ii) any earlier date on which the Commitments shall terminate.
(f) Agent's Fee. The Borrowers shall pay to the Agent an Agent's
fee as set forth in that certain letter agreement dated March 27, 1998
between the Agent and the Borrower.
2.4. Requests for Revolving Credit Loans. The following
provisions shall apply to each request by the Borrower for a Revolving Credit
Loan:
(a) The Borrower shall submit a Completed Loan Request to the
Agent. The Agent shall promptly deliver a duplicate copy of such
Completed Loan Request to each Bank which is then a party to this
Agreement at the time such loan request is made. Except as otherwise
provided herein, each Completed Loan Request shall be in a minimum
amount of (i) $250,000 if such Loan Request does not involve an
Acquisition Property or a New Eligible Property or (ii) $500,000 if such
Loan Request involves an Acquisition Property or a New Eligible
Property. Each Completed Loan Request shall be irrevocable and binding
on the Borrower and shall obligate the Borrower to accept the Revolving
Credit Loans requested from the Banks on the proposed Drawdown Date,
unless such Completed Loan Request is withdrawn (x) in the case of a
request for a LIBOR Rate Loan, at least five (5) Business Days prior to
the proposed Drawdown Date for such Revolving Credit Loan, and (y) in
the case of a request for a Base Rate Loan, at least two (2) Business
Days prior to the proposed Drawdown Date for such Revolving Credit Loan.
(b) Each Completed Loan Request may be delivered by the Borrower
to the Agent by 10:00 a.m. on any Business Day, and
(i)..in the case of a loan request that does not involve
an Acquisition Property or a New Eligible Property, at least
one (1) Business Day prior to the proposed Drawdown Date of
any Base Rate Loan, and at least three (3) LIBOR Business Days
prior to the proposed Drawdown Date of any LIBOR Rate Loan; and
(ii).in the case of a loan request involving a proposed
Acquisition Property or Properties, a good faith estimate of
such loan request shall be provided at least fifteen (15)
Business Days prior to the proposed Drawdown Date, with a
Completed Loan Request to be provided at least five (5)
Business Days prior to the proposed Drawdown Date; and
(iii)in the case of a loan request involving a proposed
New Eligible Property, a good faith estimate of such loan
request shall be provided at least thirty (30) days prior to
the proposed Drawdown Date, with a Completed Loan Request to
be provided at least five (5) Business Days prior to the
proposed Drawdown Date.
(c) Each Completed Loan Request shall include:
(A) in the case of a loan request that does not involve
an Acquisition Property or a New Eligible Property, a
completed writing in the form of Exhibit D hereto specifying:
(1) the principal amount of the Revolving Credit Loan
requested, (2) the proposed Drawdown Date of such Revolving
Credit Loan, (3) the Interest Period applicable to such
Revolving Credit Loan, (4) the Type of such Revolving Credit
Loan being requested and (5) the purpose for which such funds
will be used (a "Completed Exhibit D"); and
(B)..in the case of a loan request involving a proposed
Acquisition Property, (x) a Completed Exhibit D, and (y)
evidence that the proposed Acquisition Property meets the
following conditions (collectively, the "Acquisition
Conditions"):
(1) the proposed Acquisition Property when
aggregated with the other Real Estate Assets would not
violate the covenants contained in 7(e); and
(2) the proposed Acquisition Property does not have
unperformed or unpaid remediation costs that are not
budgeted and part of a remediation plan with costs
estimates approved by the Agent. The Completed Loan
Request shall include evidence that the Borrower has
performed a hazardous waste due diligence review of the
proposed Acquisition Property, and have attached to it a
copy of an environmental site assessment report obtained
by the Borrower in connection with the proposed
acquisition which contains sufficient information to
permit the above determination regarding potential
remediation costs or other environmental
liabilities to be made. Such environmental site assessments shall be
satisfactory to the Agent in all respects and shall be submitted to the
Agent at least ten (10) Business Days prior to the proposed Drawdown Date;
and
(C)..in the case of a loan request involving the addition of a proposed
New Eligible Property, (v) a Completed Exhibit D, (w) evidence that the
proposed New Eligible Property meets the Acquisition Conditions, (x) all of
the documents and other information relating to the proposed New Eligible
Property required by the Eligible Property Conditions, (y) evidence that
the proposed New Eligible Property does not have unperformed or unpaid
remediation costs that are not budgeted and part of a remediation plan with
costs estimates approved by the Agent. and (z) evidence that the proposed
New Eligible Property when aggregated with the other Eligible Properties
would not violate the covenants contained in 7(e).
(d) No Bank shall be obligated to fund any Revolving Credit Loan
unless:
(i)..a Completed Loan Request has been timely received by
the Agent as provided in subsection (a) above; and
(ii).both before and after giving effect to the Revolving
Credit Loan to be made pursuant to the Completed Loan Request,
all of the conditions contained in 10 shall have been
satisfied as of the Closing Date and all of the conditions set
forth in 11 shall have been met, including, without
limitation, the condition under 11.1 that there be no Default
or Event of Default under this Agreement; and
(iii)the Agent shall have received a certificate in the
form of Exhibit E hereto signed by the chief financial officer
of the Borrower (in his capacity as such and not in his
individual capacity) (copies of which shall be delivered by
the Agent promptly to the Banks) setting forth computations
evidencing compliance with the covenants contained in 9
on a pro forma basis after giving effect to
such requested Revolving Credit Loan,
and certifying that to the best knowledge of
such officer after due inquiry, both before and
after giving effect to such requested Revolving Credit Loan,
no Default or Event of Default exists or will exist under this
Agreement or any other Loan Document; and
(iv) in the case of a loan request not involving an
Acquisition Property or a New Eligible Property, the proceeds
of the Revolving Credit Loan are to be used for the purposes
and meet the conditions set forth therein; and
(v)..in the case of a loan request involving a proposed
Acquisition Property, the Acquisition Conditions have been
met; and
(vi) in the case of a loan request involving the
acquisition of an Acquisition Property and its proposed
inclusion as a New Eligible Property, the Eligible Property
Conditions and the Acquisition Conditions have been met.
2.5. Conversion Options.
(a) The Borrower may elect from time to time to convert any
outstanding Revolving Credit Loan to a Revolving Credit Loan of another
Type, provided that (i) with respect to any such conversion of a LIBOR
Rate Loan to a Base Rate Loan, such conversion shall take place
automatically at the end of the applicable Interest Period unless the
Borrower provides notice to the Agent of its request to continue such
Revolving Credit Loan as a LIBOR Rate Loan as provided in 2.5(b) and
2.5(a)(ii); (ii) subject to the further proviso at the end of this
2.5(a) and subject to 2.5(b) and 2.5(d), with respect to any
conversion of a Base Rate Loan to a LIBOR Rate Loan (or a continuation
of a LIBOR Rate Loan, as provided in 2.5(b)), the Borrower shall give
the Agent at least three (3) LIBOR Business Days' prior written notice
of such election, which such notice must be received by the Agent by
10:00 a.m. on any Business Day; and (iii) no Revolving Credit Loan may
be converted into a LIBOR Rate Loan when any Default or Event of Default
has occurred and is continuing. The Agent shall provide each Bank with
a copy of such notice promptly after its receipt thereof. All or any
part of outstanding Revolving Credit Loans of any Type may be converted
as provided herein, provided that each Conversion Request
relating to the conversion of a Base Rate Loan
to a LIBOR Rate Loan shall be for an amount equal
to $250,000 or an integral multiple of $50,000 in excess
thereof and shall be irrevocable by the Borrower.
(b) Any Revolving Credit Loan of any Type may be continued as such
upon the expiration of the Interest Period with respect thereto (i) in
the case of Base Rate Loans, automatically and (ii) in the case of LIBOR
Rate Loans by compliance by the Borrower with the notice provisions
contained in 2.5(a)(ii); provided that no LIBOR Rate Loan may be
continued as such when any Event of Default has occurred and is
continuing but shall be automatically converted to a Base Rate Loan on
the last day of the first Interest Period relating thereto ending during
the continuance of any Event of Default. The Agent shall notify the
Banks promptly when any such automatic conversion contemplated by this
2.5(b) is scheduled to occur.
(c) In the event that the Borrower does not notify the Agent of
its election hereunder with respect to any Revolving Credit Loan, such
Revolving Credit Loan shall be automatically converted to a Base Rate
Loan at the end of the applicable Interest Period.
(d) The Borrower may not request or elect a LIBOR Rate Loan
pursuant to 2.4, elect to convert a Base Rate Loan to a LIBOR Loan
pursuant to 2.5(a) or elect to continue a LIBOR Rate Loan pursuant to
2.5(b) if, after giving effect thereto, there would be greater than
five (5) LIBOR Rate Loans then outstanding. Any Revolving Credit Loan
Request for a LIBOR Rate Loan that would create greater than five (5)
LIBOR Rate Loans outstanding shall be deemed to be a Loan Request for a
Base Rate Loan.
2.6.Funds for Revolving Credit Loans.
(a) Subject to the other provisions of this 2, not later than
11:00 a.m. on the proposed Drawdown Date of any Revolving Credit Loans,
each of the Banks will make available to the Agent, at its Head Office,
in immediately available funds, the amount of such Bank's Commitment
Percentage of the amount of the requested Revolving Credit Loan. Upon
receipt from each Bank of such amount, the Agent will make available to
the Borrower the aggregate amount of such Revolving Credit Loan made
available to the Agent by the Banks; all such funds received by the
Agent by 11:00 a.m. on any Business Day will be made available to the
Borrower not later than 2:00 p.m. on the same Business Day. Funds
received after such time will be made available by not later
than 11:00 a.m. on the next Business Day. The failure
or refusal of any Bank to make available
to the Agent at the aforesaid time and place on any
Drawdown Date the amount of its Commitment Percentage of the requested
Revolving Credit Loan shall not relieve any other Bank from its several
obligation hereunder to make available to the Agent the amount of its
Commitment Percentage of any requested Revolving Credit Loan but in no
event shall the Agent (in its capacity as Agent) have any obligation to
make any funding or shall any Bank be obligated to fund more than its
Commitment Percentage of the requested Revolving Credit Loan or to
increase its Commitment Percentage on account of such failure or
otherwise.
(b) The Agent may, unless notified to the contrary by any Bank
prior to a Drawdown Date, assume that such Bank has made available to
the Agent on such Drawdown Date the amount of such Bank's Commitment
Percentage of the Revolving Credit Loan to be made on such Drawdown
Date, and the Agent may (but it shall not be required to), in reliance
upon such assumption, make available to the Borrower a corresponding
amount. If any Bank makes available to the Agent such amount on a date
after such Drawdown Date, such Bank shall pay to the Agent on demand an
amount equal to the product of (i) the average, computed for the period
referred to in clause (iii) below, of the weighted average interest rate
paid by the Agent for federal funds acquired by the Agent during each
day included in such period, multiplied by (ii) the amount of such
Bank's Commitment Percentage of such Revolving Credit Loan, multiplied
by (iii) a fraction, the numerator of which is the number of days that
elapsed from and including such Drawdown Date to the date on which the
amount of such Bank's Commitment Percentage of such Revolving Credit
Loan shall become immediately available to the Agent, and the
denominator of which is 365. A statement of the Agent submitted to such
Bank with respect to any amounts owing under this paragraph shall be
prima facie evidence of the amount due and owing to the Agent by such
Bank.
3. REPAYMENT OF THE REVOLVING CREDIT LOANS.
3.1. Maturity. The Borrower promises to pay on the Maturity
Date, and there shall become absolutely due and payable on the Maturity Date,
all unpaid principal of the Revolving Credit Loans outstanding on such date,
together with any and all accrued and unpaid interest thereon,
the unpaid balance of any fees accrued through such
date, and any and all other unpaid amounts due under this Agreement,
the Revolving Credit Notes or any other of the Loan Documents.
3.2. Optional Repayments of Revolving Credit Loans. The Borrower
shall have the right, at its election, to prepay the outstanding amount of
the Revolving Credit Loans, in whole or in part, at any time without penalty
or premium; provided that the outstanding amount of any LIBOR Rate Loans may
not be prepaid unless the Borrower pays all amounts due and payable under
4.8 hereof for each LIBOR Rate Loan so prepaid at the time of such
prepayment. The Borrower shall give the Agent, no later than 10:00 a.m., at
least five (5) Business Days prior written notice of any prepayment pursuant
to this 3.2 of any Revolving Credit Loans, specifying the proposed date of
prepayment of Revolving Credit Loans and the principal amount to be prepaid.
The Agent shall provide each Bank with a copy of such notice promptly after
its receipt thereof. Each such partial prepayment of the Revolving Credit
Loans shall be a minimum of $100,000, or, if less, the outstanding balance of
the Revolving Credit Loans then being repaid, shall be accompanied by the
payment of all charges outstanding on all Revolving Credit Loans so prepaid
and of all accrued interest on the principal prepaid to the date of payment,
and shall be applied, in the absence of instruction by the Borrower, first to
the principal of Base Rate Loans and then to the principal of LIBOR Rate
Loans, at the Agent's option.
4. CERTAIN GENERAL PROVISIONS.
4.1.Funds for Payments.
(a) All payments of principal, interest, fees, and any other
amounts due hereunder or under any of the other Loan Documents shall be
made to the Agent, for the respective accounts of the Banks or (as the
case may be) the Agent, at the Agent's Head Office, in each case in
Dollars and in immediately available funds.
(b) All payments by the Borrower hereunder and under any of the
other Loan Documents shall be made without setoff or counterclaim and
free and clear of and without deduction for any taxes, levies, imposts,
duties, charges, fees, deductions, withholdings, compulsory liens,
restrictions or conditions of any nature now or hereafter imposed or
levied by any jurisdiction or any political subdivision thereof or
taxing or other authority therein unless the Borrower is compelled by
law to make such deduction or withholding. If any such obligation is
imposed upon the Borrower with respect to any
amount payable by it hereunder or under any of
the other Loan Documents, the Borrower shall pay to
the Agent, for the account of the Banks or (as the case may be)
the Agent, on the date on which such amount is due and payable hereunder
or under such other Loan Document, such additional amount in Dollars as
shall be necessary to enable the Banks to receive the same net amount
which the Banks would have received on such due date had no such
obligation been imposed upon the Borrower. The Borrower will deliver
promptly to the Agent certificates or other valid vouchers for all taxes
or other charges deducted from or paid with respect to payments made by
the Borrower hereunder or under such other Loan Document. The Agent
shall provide each Bank with a copy of such notice promptly after its
receipt thereof.
(c) The Agent and the Banks acknowledge that the Borrower will
establish a demand deposit account with the Agent and intends to deposit
into such account on a monthly basis an amount not less than the amount
of interest due and payable during such month. Without limiting
anything set forth herein, the Agent shall be entitled to charge such
account of the Borrower with the Bank for any sum due and payable by the
Borrower hereunder or under any of the other Loan Documents.
Notwithstanding anything to the contrary contained herein or in any
other Loan Document, if, on any date that a payment is due to the Agent
or the Banks under the Loan Documents, there are sufficient funds in
such account to make such payment and there is no legal impediment of
any kind to Agent's effecting such payment by debiting such account,
then Borrower shall have no obligation to make such payment (other than
by way of Agent's debiting such account in accordance with the above
provisions of this paragraph (c)) and no late charge or default rate
interest shall accrue, and no Event of Default shall result, from
Borrower's failure to make such payment while such sufficient funds
remain in such account to make such payment.
4.2.Computations. All computations of interest on the Revolving
Credit Loans and of commitment or other similar fees (if any) to the extent
applicable shall be based on a 360-day year and paid for the actual number of
days elapsed. Except as otherwise provided in the definition of the term
"Interest Period" with respect to LIBOR Rate Loans, whenever a payment
hereunder or under any of the other Loan Documents becomes due on a day that
is not a Business Day, the due date for such payment shall be extended to the
next succeeding Business Day, and interest shall accrue during such
extension. The outstanding amount of the Revolving Credit Loans
as reflected on the Revolving Credit Note
Record from time to time shall constitute prima facie evidence of the
principal amount thereof.
4.3. Inability to Determine LIBOR Rate. In the event, prior to
the commencement of any Interest Period relating to any LIBOR Rate Loan, the
Agent shall reasonably determine that adequate and reasonable methods do not
exist for ascertaining the LIBOR Rate that would otherwise determine the
rate of interest to be applicable to any LIBOR Rate Loan during any Interest
Period (and the rate of interest applicable to all indebtedness due and owing
to the Agent by any Person to the extent that the principal amount of such
indebtedness was intended to bear interest at the LIBOR Rate), the Agent
shall forthwith give notice of such determination (which shall be conclusive
and binding on the Borrower) to the Borrower and the Banks. In such event
(a) any Completed Loan Request with respect to LIBOR Rate Loans shall be
automatically withdrawn and shall be deemed a request for Base Rate Loans,
(b) each LIBOR Rate Loan will automatically, on the last day of the then
current Interest Period thereof, become a Base Rate Loan, and (c) the
obligations of the Banks to make LIBOR Rate Loans shall be suspended until
the Agent reasonably determines that the circumstances giving rise to such
suspension no longer exist, whereupon the Agent shall so notify the Borrower
and the Banks.
4.4. Illegality. Notwithstanding any other provisions herein, if
any present or future law, regulation, treaty or directive or in the
interpretation or application thereof shall make it unlawful for any Bank to
make or maintain LIBOR Rate Loans, such Bank shall forthwith give notice of
such circumstances to the Borrower and thereupon (a) the Commitment of such
Bank to make LIBOR Rate Loans or convert Base Rate Loans to LIBOR Rate Loans
shall forthwith be suspended and (b) such Bank's Commitment Percentage of a
LIBOR Rate Loans then outstanding shall be converted automatically to Base
Rate Loans on the last day of each Interest Period applicable to such LIBOR
Rate Loans or within such earlier period as may be required by law, all until
such time as it is no longer unlawful for such Bank to make or maintain LIBOR
Rate Loans. The Borrower hereby agrees promptly to pay the Agent for the
account of such Bank, upon demand, any additional amounts necessary to
compensate such Bank for any out-of-pocket costs incurred by such Bank in
making any conversion required by this 4.4 prior to the last day of an
Interest Period with respect to a LIBOR Rate Loan, including any interest or
fees payable by such Bank to lenders of funds obtained by it in order to make
or maintain its LIBOR Rate Loans hereunder.
4.5. Additional Costs, Etc. If any present or future applicable
law, which expression, as used herein, includes statutes, rules and
regulations thereunder and interpretations thereof by any competent court or
by any governmental or other regulatory body or official charged with the
administration or the interpretation thereof and requests, directives,
instructions and notices at any time or from time to time hereafter made upon
or otherwise issued to any Bank by any central bank or other fiscal, monetary
or other authority (whether or not having the force of law, but if not having
the force of law, then generally applied by the Banks with respect to
similar loans), shall:
(a) subject any Bank to any tax, levy, impost, duty, charge, fee,
deduction or withholding of any nature with respect to this Agreement,
the other Loan Documents, such Bank's Commitment or the Revolving Credit
Loans (other than taxes based upon or measured by the income or profits
of such Bank), or
(b) materially change the basis of taxation (except for changes in
taxes on income or profits) of payments to any Bank of the principal of
or the interest on any Revolving Credit Loans or any other amounts
payable to the Agent or any Bank under this Agreement or the other Loan
Documents, or
(c) impose or increase or render applicable (other than to the
extent specifically provided for elsewhere in this Agreement) any
special deposit, reserve, assessment, liquidity, capital adequacy or
other similar requirements (whether or not having the force of law)
against assets held by, or deposits in or for the account of, or loans
by, or commitments of an office of any Bank, or
(d) impose on any Bank any other conditions or requirements with
respect to this Agreement, the other Loan Documents, the Revolving
Credit Loans, such Bank's Commitment, or any class of loans or
commitments of which any of the Revolving Credit Loans or such Bank's
Commitment forms a part;
and the result of any of the foregoing is
(i) to increase the cost to such Bank of making, funding,
issuing, renewing, extending or maintaining any of the Revolving
Credit Loans or such Bank's Commitment, or
(ii) to reduce the amount of principal, interest or other
amount payable to such Bank hereunder on account of
such Bank's Commitment or any of the Revolving Credit Loans, or
(iii)to require such Bank to make any payment or to forego any
interest or other sum payable hereunder, the amount of which
payment or foregone interest or other sum is calculated by
reference to the gross amount of any sum receivable or deemed
received by such Bank from the Borrower hereunder,
then, and in each such case, the Borrower will, upon demand made by such
Bank at any time and from time to time and as often as the occasion therefor
may arise, pay to such Bank such additional amounts as such Bank shall
determine in good faith to be sufficient to compensate such Bank for such
additional cost, reduction, payment or foregone interest or other sum,
provided that such Bank is generally imposing similar charges on its other
similarly situated borrowers.
4.6. Capital Adequacy. If any future law, governmental rule,
regulation, policy, guideline or directive (whether or not having the force
of law, but if not having the force of law, then generally applied by the
Banks with respect to similar loans) or the interpretation thereof by a court
or governmental authority with appropriate jurisdiction affects the amount of
capital required or expected to be maintained by banks or bank holding
companies and any Bank or the Agent determines that the amount of capital
required to be maintained by it is increased by or based upon the existence
of Revolving Credit Loans made or deemed to be made pursuant hereto, then
such Bank or the Agent may notify the Borrower of such fact, and the Borrower
shall pay to such Bank or the Agent from time to time on demand, as an
additional fee payable hereunder, such amount as such Bank or the Agent shall
determine in good faith and certify in a notice to the Borrower to be an
amount that will adequately compensate such Bank in light of these
circumstances for its increased costs of maintaining such capital. Each Bank
and the Agent shall allocate such cost increases among its customers in good
faith and on an equitable basis, and will not charge the Borrower unless it
is generally imposing a similar charge on its other similarly situated
borrowers.
4.7. Certificate. A certificate setting forth any additional
amounts payable pursuant to 4.5 or 4.6 and a brief explanation of such
amounts which are due, submitted by any Bank or the Agent to the Borrower,
shall be prima facie evidence that such amounts are due and owing.
4.8. Indemnity. In addition to the other provisions of this
Agreement regarding such matters, the Borrower agrees to indemnify the Agent
and each Bank and to hold the Agent and each Bank harmless from and against
any loss, cost or expense (but excluding any loss of anticipated profits)
that the Agent or such Bank may sustain or incur as a consequence of (a) the
failure by the Borrower to pay any principal amount of or any interest on any
LIBOR Rate Loans as and when due and payable, including any such loss or
expense arising from interest or fees payable by the Agent or such Bank to
lenders of funds obtained by it in order to maintain its LIBOR Rate Loans,
(b) the failure by the Borrower to make a borrowing or conversion after the
Borrower has given a Completed Loan Request for a LIBOR Rate Loan or a
Conversion Request for a LIBOR Rate Loan, and (c) the making of any payment
of a LIBOR Rate Loan or the making of any conversion of any such Revolving
Credit Loan to a Base Rate Loan on a day that is not the last day of the
applicable Interest Period with respect thereto, including interest or fees
payable by the Agent or a Bank to lenders of funds obtained by it in order to
maintain any such LIBOR Rate Loans.
4.9. Interest on Overdue Amounts. Overdue principal and (to the
extent permitted by applicable law) interest on the Revolving Credit Loans
and all other overdue amounts payable hereunder or under any of the other
Loan Documents shall bear interest payable on demand at a rate per annum
equal to four percent (4%) above the Base Rate until such amount shall be
paid in full (after as well as before judgment). In addition, the Borrower
shall pay a late charge equal to three percent (3%) of any amount of
principal (other than principal due on the Maturity Date) and/or interest
charges on the Revolving Credit Loans which is not paid within ten (10) days
of the date when due.
5. BORROWING BASE.
5.1. Additions and Replacements to Eligible Properties.From time to time
during the term of the Revolving Credit Loans, due to the fact that
the Borrower may wish to enter into financial transactions involving
certain Eligible Properties, or for other reasons, the Borrower may
request in writing to the Banks to replace or add to the Eligible
Properties to be used in calculating the Borrowing Base. Any such
request for replacement or addition may be approved by the Agent,
which approval may be given or withheld by the Agent in its sole
discretion, as hereinafter provided. The Agent shall approve or deny
such request in writing within thirty (30) days of receipt, provided
that the Agent has received, at the time such request is made, all of
the information regarding the Real Estate Asset proposed to be added
to the
Eligible Properties to be used in calculating the Borrowing Base required by the
Eligible Property Conditions. Any property so approved by the Agent as a
replacement of or addition to the Eligible Properties (a "New Eligible
Property") shall thereafter be included in computing the Borrowing Base. The
Borrower shall reimburse the Agent for its reasonable costs and expenses
(including reasonable attorneys' fees and expenses of the Agent's counsel) in
evaluating the proposed New Eligible Property. Without in any way limiting the
absolute discretion of the Agent to approve or deny any request to include a
property as a New Eligible Property, before a property shall become a New
Eligible Property, the Borrower shall have, in any case, satisfied each of the
following conditions (the "Additional Eligible Property Conditions"):
(a) The Acquisition Conditions have been met with respect to the
Property (whether or not the proposed New Eligible Property is then
owned by the Borrower or an Additional Guarantor or is a proposed
Acquisition Property);
(b) The Borrower or an Additional Guarantor (as applicable) shall
satisfy, with respect to the proposed New Eligible Property, to the
satisfaction of the Agent (in its sole discretion), each of the Eligible
Property Conditions with respect to each New Eligible Property;
(c) No Default or Event of Default shall exist under this
Agreement or any other Loan Document at the time of any acceptance of a
New Eligible Property, unless such Default or Event of Default would be
cured thereby and the Borrower shall have delivered a compliance
certificate in the form of Exhibit E to the Agent (with copies for each
Bank) to such effect;
(d) The New Eligible Property shall be 100% owned in fee simple by
the Borrower or an Additional Guarantor (as applicable) and the title
thereof shall be unencumbered by any mortgage, deed of trust, security
agreement or other lien (whether voluntary or involuntary); and
(e) The Agent shall, in its sole discretion, have approved in
writing the addition of the property as a New Eligible Property for
inclusion in the Borrowing Base.
5.2.Removal from Eligible Properties. From time to time during
the term of the Revolving Credit Loans, due to the fact that the Borrower may
wish to enter into financial transactions involving certain Eligible
Properties, or for other reasons, the Borrower may request in
writing that the Banks allow the Borrower to remove an Eligible
Property from being used in calculating the Borrowing Base. The Agent shall
approve or deny such request in writing within thirty (30) days of receipt.
The Borrower shall reimburse the Agent for its reasonable costs and
expenses (including reasonable attorneys' fees and expenses of the Agent's
counsel) in evaluating the proposed removal. The Agent shall approve the
removal so long as: (i) the Borrower demonstrates to the Agent that any
such removal shall in no way affect any of the Borrower's representations,
warranties, or covenants hereunder, including, but not limited to, the
Borrower's covenants regarding the Borrowing Base, and (ii) no Default or
Event of Default shall have occurred and be continuing hereunder.
5.3.Recourse Obligations. Notwithstanding the foregoing, the
Obligations are full recourse obligations of the Borrower, the Guarantor and
the Additional Guarantors and all of their respective assets and properties
shall be available for the payment in full in cash and performance of the
Obligations.
6. REPRESENTATIONS AND WARRANTIES. The Borrower and the Guarantor
represent and warrant to the Agent and the Banks on the date hereof, on the
date of any Revolving Loan Request, and on each Drawdown Date of any
Revolving Credit Loan that: (a) each of the Borrower, the Guarantor and each
Additional Guarantor is duly formed or organized, validly existing, and in
good standing under the laws of its jurisdiction of organization and is duly
qualified and in good standing in every other jurisdiction where it is
required to be so qualified, and the execution, delivery and performance by
each of the Borrower, the Guarantor and each Additional Guarantor of the Loan
Documents (i) are within its trust, partnership, limited liability company or
corporate authority, (ii) have been duly authorized, (iii) do not conflict
with or contravene its Charter Documents; (b) the outstanding equity of the
Borrower on the date hereof is comprised of a general partner interest and
limited partner interests, all of which have been duly issued and are
outstanding and fully paid and, with respect to limited partner interests,
nonassessable, all as set forth in Schedule 6(b) hereto; (c) each of the
direct or indirect interests of the Borrower in any Partially-Owned Real
Estate Holding Entity is set forth on Schedule 6(c) hereto (as updated from
time to time in accordance with the terms hereof), including the type of
entity in which the interest is held, the percentage interest owned by the
Borrower in such entity, the capacity in which the Borrower holds the
interest, and the Borrower's ownership interest therein; provided, that the
Borrower agrees to update (at the end of each calendar quarter) such Schedule
6(c) in connection with any additional Investment in any Partially-Owned
Real Estate Holding Entity after the date hereof that is
permitted by the terms hereof; (d) upon execution and delivery thereof, each
Loan Document shall constitute the legal, valid and binding obligation of the
Borrower, the Guarantor or the Additional Guarantors, as the case may be,
enforceable in accordance with its terms; (e) each of the Borrower, the
Guarantor and each Additional Guarantor has good and marketable title to all
Eligible Properties and other material properties, subject only to Permitted
Liens and possesses or has the legal right to use all assets, including
intellectual properties, franchises and Consents adequate for the conduct of its
business as now conducted, without known conflict with any rights of others; (f)
the Borrower has provided to the Agent and the Banks its unaudited pro forma
Financials as of December 31, 1997 and for the period then ended, and such pro
forma Financials are complete and correct in all material respects and have been
prepared in accordance with GAAP consistently applied; (g) since December 31,
1997, there has been no materially adverse change of any kind in the Borrower
which would have a Materially Adverse Effect; (h) the Guarantor has provided to
the Agent and the Banks (i) the pro forma condensed consolidated balance sheet
of the Guarantor and its Subsidiaries (including, without limitation, the
Borrower) as of December 31, 1997 and their related consolidated statements of
operations for the fiscal year ended December 31, 1997 and (ii) the SEC Filings
which contain a summary of information relating to the Real Estate Assets and
such information is true and correct in all material respects; (i) since
December 31, 1997, there has been no materially adverse change of any kind in
the Guarantor which would have a Materially Adverse Effect; (j) each Additional
Guarantor has delivered to the Agent and the Banks its unaudited operating
statements as at December 31, 1997 and for the period then ended and such
operating statements are complete and correct in all material respects; (k)
since December 31, 1997, there has been no materially adverse change of any kind
in any Additional Guarantor which would have a Materially Adverse Effect; (l)
there are no legal or other proceedings or investigations pending or, to the
best knowledge of the Borrower, the Guarantor or any Additional Guarantor,
threatened against the Borrower, the Guarantor or such Additional Guarantor
before any court, tribunal or regulatory authority which would, if adversely
determined, alone or together, have a Materially Adverse Effect; (m) the
execution, delivery, performance of its obligations, and exercise of its rights
under the Loan Documents by the Borrower, the Guarantor and each Additional
Guarantor, including borrowing under this Agreement (i) to the best knowledge of
the Borrower and the Guarantor after due inquiry, do not require any Consents;
and (ii) are not and will not be in conflict with or prohibited or prevented by
(A) any Requirement of Law, (B) any Charter Document, trust minute or
resolution, or (C) in any material respect, instrument, agreement or provision
thereof, in each case
binding on the Borrower, the Guarantor or any Additional Guarantor
or affecting any property of the Borrower, the Guarantor or any Additional
Guarantor; (n) neither the Guarantor, the Borrower nor any Additional
Guarantor is in violation of (A) any Charter Document, trust minute or
resolution, (B) any instrument or agreement, in each case binding on it or
affecting its property, or (C) any Requirement of Law, in a manner which
could have a Materially Adverse Effect, including, without limitation, all
applicable federal and state tax laws, ERISA and Environmental Laws; (o) none
of the Eligible Properties shall be subject to or encumbered by any mortgage,
deed of trust, security agreement, lien or encumbrance of any kind, except
for Permitted Liens; (p) except as set forth on Schedule 6(p) attached hereto
and other Investments expressly permitted by the terms hereof, neither the
Guarantor nor the Borrower has any Subsidiaries and is not a party to any
partnership or joint venture; (q) the Guarantor qualifies and has not taken
any action that would prevent it from qualifying as a REIT pursuant to
856-860 of the Code and the related regulations for its tax year ended
December 31, 1997 and all subsequent years during the term of the Revolving
Credit Loans; (r) the Borrower has provided the Agent on behalf of the Banks
with Lease Summaries and information packages regarding each of the Eligible
Properties, and such information packages fairly represent the position of
each of the Eligible Properties on the date hereof or as of the date of
delivery thereof (if applicable); (s) neither the Borrower, the Guarantor or
any of their respective Subsidiaries is an "investment company", or an
"affiliated company" or a "principal underwriter" of an "investment company",
as such terms are defined in the Investment Company Act of 1940; and (t) no
security of the Guarantor traded on a National Securities Exchange has been
suspended from trading or de-listed, except that the securities of the
Guarantor may have been suspended from trading for brief periods of time due
to various public offerings of the securities of the Guarantor.
7. AFFIRMATIVE COVENANTS. The Borrower and the Guarantor jointly and
severally agree that until the termination of the Commitment and the payment
and satisfaction in full of all the Obligations, the Borrower and the
Guarantor will comply with their respective obligations as set forth
throughout this Agreement and will, and will cause each of their respective
Subsidiaries to:
(a) furnish the Agent on behalf of the Banks: (i) as soon as
available but in any event within ninety (90) days after the close of
each fiscal year, the Guarantor's audited Financials for such fiscal
year, certified by the Guarantor's accountants; (ii) within ninety (90)
days after the close of each fiscal year (or
contemporaneously with the filing thereof with the SEC), the Form
10-K (or with respect to the 1997 fiscal year of the Guarantor, the
Form 10-K) filed by the Guarantor with the SEC with respect to such
fiscal year; (iii) as soon as available but in any event within
forty-five (45) days after the end of each fiscal quarter of the
Guarantor the Form 10-Q statement (or with respect to the 1997 fiscal
year of the Guarantor, the Form 10-QSB statement) filed by the
Guarantor with the SEC with respect to such fiscal quarter, (iv)
together with the quarterly and annual audited Financials, a
certificate of the Borrower and the Guarantor (in substantially the
form attached to Exhibit E hereto) setting forth computations
demonstrating compliance with the Borrower's and the Guarantor's
financial covenants set forth in 9 hereof, and certifying that no
Default or Event of Default has occurred, or if it has, the actions
taken by the Borrower or the Guarantor with respect thereto; (v)
contemporaneously with the filing, mailing or issuances thereof,
copies of all material of a financial nature filed with the SEC or
sent to the owners/stockholders or partners of the Guarantor or the
Borrower and copies of all press and news releases made by the
Borrower, the Guarantor or any Additional Guarantor; (vi) promptly
after its receipt thereof, annual financial information regarding
commercial tenants in the Eligible Properties as applicable and
available and (vii) if a Default or an Event of Default or a
materially adverse change in any of the Eligible Properties shall have
occurred, Appraisals (or updates thereof if required) of the Eligible
Properties within thirty (30) days after the request of the Agent
therefor; (viii) from time to time, upon request of the Agent or the
Banks, such other financial data and information about the Borrower,
the Guarantors, the Additional Guarantors, their respective
Subsidiaries, the Real Estate Assets and as the Agent may reasonably
request, and which is prepared by such Person in the normal course of
its business or is required for securities and tax law compliance,
including without limitation, pro forma financial statements, complete
rent rolls and summary rent rolls, existing governmental reports,
surveys, title insurance policies and insurance certificates with
respect to the Real Estate Assets.
(b) keep true and accurate books of account in accordance with
GAAP and to permit the Agent or any Bank or its designated
representatives during normal business hours and upon reasonable prior
notice (unless, in each case, a Default or Event of Default has occurred
whereupon no such notice shall be required) to inspect the Borrower's or
the Guarantor's premises and to examine and be
advised as to such or other business records upon the request of the
Agent or such Bank;
(c) maintain in good operating condition its business and assets,
to keep its business and assets adequately insured, to maintain its
chief executive office in the United States, to continue to engage in
the same lines of business, and to comply with all Requirements of Law,
including ERISA and Environmental Laws;
(d) notify the Agent on behalf of the Banks promptly in writing of
(i) the occurrence of any Default or Event of Default, (ii) any
noncompliance with ERISA or any Environmental Law or proceeding in
respect thereof which could have a Materially Adverse Effect, (iii) any
change of name or address, (iv) any threatened or pending litigation or
similar proceeding affecting the Borrower, the Guarantor or any
Additional Guarantor or any of the Eligible Properties which could have
a Materially Adverse Effect or any material change in any such
litigation or proceeding previously reported and (v) claims against any
assets or properties of the Borrower or the Guarantor which could have a
Materially Adverse Effect;
(e) use the proceeds of the Revolving Credit Loans solely to
finance acquisitions by the Borrower or Subsidiaries of the Borrower of
Real Estate Assets and to pay reasonable and customary costs associated
with such acquisitions in accordance with the terms hereof and for the
repair and improvement of presently owned Real Estate Assets and such
acquired Real Estate Assets, and not for the carrying of "margin
security" or "margin stock" within the meaning of Regulations U and X of
the Board of Governors of the Federal Reserve System, 12 C.F.R. Parts
221 and 224; provided, that, notwithstanding the foregoing, the Borrower
may use a portion of the aggregate outstanding principal amount of the
Revolving Credit Loans not in excess of $5,000,000 for general working
capital purposes of the Borrower;
(f) cooperate with the Agent and the Banks, take such action,
execute such documents, and provide such information as the Agent and
the Banks may from time to time reasonably request in order further to
effect the transactions contemplated by and the purposes of the Loan
Documents;
(g) do or cause to be done all things necessary (i) to preserve
and keep in full force and effect the existence of the Guarantor as
a Maryland real estate investment trust and its
election to be taxed as a REIT under the provisions of Sections
856-860 of the Code, or such other laws as may be applicable in order
to maintain the current material characteristics of the Guarantor as
an investment vehicle and tax entity, and (ii) to preserve and keep in
full force and effect the listing of the Guarantor on a National
Securities Exchange, (iii) to cause the Guarantor to continue to
operate as a fully-integrated, self-administered and self-managed
REIT, which, together with its Subsidiaries owns and operates an
improved property portfolio comprised primarily of apartment and
retail properties, (iv) to cause the Guarantor not to engage in any
business other than the business of acting as a REIT and serving as
the general partner and limited partner of the Borrower and as a
member, partner or stockholder of other Persons, (v) to cause the
Guarantor to conduct all or substantially all of its business
operations through the Borrower or through subsidiary partnerships or
other entities in which (x) the Borrower or the Guarantor directly or
indirectly owns or controls as least 51% of the voting interests as
well being entitled to at least 51% of the profits and losses
distributions and (y) the Borrower or the Guarantor directly or
indirectly (through wholly-owned Subsidiaries) acts as sole general
partner or managing member.
(h) maintain at least one operating account of the Borrower and
the Guarantor with the Agent; and
(i) take all steps reasonably necessary to cause any and all
payments due to any third party under any management fee agreements with
respect to the Eligible Properties to be subordinated in full in writing
to the prior payment of the Revolving Credit Loans during the
continuance of a Default or an Event of Default, each on terms and
conditions reasonably satisfactory the Agent in all respects.
8. NEGATIVE COVENANTS. The Borrower and the Guarantor jointly and
severally agree that until the termination of the Commitment and the payment
and satisfaction in full of all the Obligations, the Borrower and the
Guarantor will not, and will not permit any of their respective Subsidiaries
to,:
(a) create, incur or assume any Indebtedness other than (i)
Indebtedness to the Agent and the Banks arising under the Loan
Documents, (ii) Indebtedness in respect of the acquisition of personal
property which does not exceed $500,000 in aggregate amount for the
Borrower, the Guarantor and their respective
Subsidiaries, (iii) current liabilities not incurred through the
borrowing of money or the obtaining of credit except credit on an open
account customarily extended, (iv) Indebtedness in respect of taxes or
other governmental charges contested in good faith and by appropriate
proceedings; (v) Indebtedness of the Borrower or any of its
Subsidiaries, the payment of which is without recourse to the Borrower
or such Subsidiary, incurred in connection with the acquisition of
Real Estate Assets (other than the Eligible Properties) or the
financing or refinancing of any permitted Indebtedness secured by
liens on such Real Estate Assets; and (vi) Recourse Indebtedness (not
including the Revolving Credit Loans) of the Borrower or the Guarantor
in an aggregate principal amount not in excess of five percent (5%) of
Consolidated Total Adjusted Asset Value at any time;
(b) create or incur any Liens on any property or assets of the
Borrower, the Guarantor or any of their respective Subsidiaries except
(i) Liens securing the Obligations; (ii) Liens securing taxes or other
governmental charges not yet due; (iii) deposits or pledges made in
connection with social security obligations; (iv) Liens of carriers,
warehousemen, mechanics and materialmen, less than 120 days old as to
obligations not yet due; (v) easements, rights-of-way, zoning
restrictions and similar minor Liens which individually and in the
aggregate do not have a Materially Adverse Effect; (vi) purchase money
security interests in personal property securing purchase money
Indebtedness permitted by Section 8(a)(ii), covering only the personal
property so acquired; (vii) mortgage liens on, pledges of and security
interests in (A) the Real Estate Assets other than the Eligible
Properties acquired with Indebtedness permitted by Section 8(a)(v), (B)
any personal property of the Borrower, the Guarantor or such Subsidiary
directly related or appurtenant to such Real Estate Assets and (C) if,
and only if, the applicable Subsidiary that incurs such permitted
Indebtedness and grants such liens on such Real Estate Assets and
related personal property is a special purpose entity that owns only the
Real Estate Assets and personal property that secure the applicable
permitted Indebtedness, the outstanding equity interests of such
Subsidiary, in each case that secure such Indebtedness and cover only
the Real Estate Assets and personal property directly related or
appurtenant to such Real Estate Assets so acquired and equity interests;
and (viii) liens securing the payment of Indebtedness permitted by
8(a)(vi) hereof that encumber only the Real Estate Asset acquired with
the initial proceeds of such Indebtedness;
(c) make any Investments other than investments in (i) marketable
obligations of the United States maturing within one (1) year, (ii)
certificates of deposit, bankers' acceptances and time, money market and
demand deposits of United States Federal and state chartered banks
having total assets in excess of $1,000,000,000, (iii) as long as no
Default or Event of Default shall have occurred and be continuing or
would result therefrom Investments consisting of (A) all of the issued
and outstanding capital stock of, or equity interests in, a Subsidiary
of the Borrower or (B) a majority of the capital stock of or equity
interests in a Partially-Owned Real Estate Holding Entity, (iv) any
other investments made by the Guarantor in the ordinary course of the
Guarantor's business in a manner consistent with past practice if such
investments qualify under Section 856(c)(5)(A) of the Code (or any
successor regulation thereto), for purposes of inclusion in the "75%
asset test" relating to the Guarantor's status as a REIT; provided, that
the Guarantor may not make any investments in other REITs, unless such
Investment in any single REIT does not exceed more than fifteen percent
(15%) of the Guarantor's total assets, determined in accordance with
GAAP and provided, further, that the aggregate value of all Investments
under this subsection (c)(iv) shall not exceed at any time thirty
percent (30%) of the total assets of the Guarantor, determined in
accordance with the Code and the regulations promulgated thereunder, (v)
investments in respect of Acquisition Properties or other Real Estate
Assets acquired by the Borrower after the date hereof in accordance with
the terms of this Agreement; (vi) intercompany loans provided by the
Borrower to the Guarantor solely in connection with stock repurchase
arrangements of the Guarantor; or (vii) such other investments as the
Agent may from time to time approve in writing;
(d) become party to a merger, or to effect any disposition of any
properties or assets other than by the Guarantor, the Borrower or any of
their respective Subsidiaries in the ordinary course of their respective
businesses as a REIT or as a Subsidiary of a REIT, or to purchase or
otherwise acquire assets other than the acquisition of Acquisition
Properties or other Real Estate Assets or the making of Investments in
accordance with the terms hereof and the purchase of personal property
in the ordinary course of their respective businesses;
(e) (i)in the case of the Borrower, make (A) annual Distributions
in excess of ninety percent (90%) of Funds from Operations or (B) any
Distributions during any period when any
Event of Default has occurred and is continuing or would result
therefrom; provided, however, that the Borrower may at all times make
Distributions to the extent (after taking into account all available
funds of the Guarantor from all other sources) required in order to
enable the Guarantor to continue to qualify as a REIT; and (ii) the
case of the Guarantor, during any period when any Event of Default has
occurred and is continuing, make any Distributions in excess of the
Distributions required to be made by the Guarantor in order to
maintain its status as a REIT;
(f) cause or permit (a) the occupancy for all Units in the
Eligible Properties (under valid and enforceable Leases with bona fide,
third party tenants) to be less than ninety percent (90%) of all such
Units at any time or (b) the occupancy for all Units in any individual
Eligible Property (under valid and enforceable Leases with bona fide,
third party tenants) to be less than eighty percent (80%) of all such
Units at any time; or
(g) at any time cause or permit any of the Partnership Documents
to be modified, amended or supplemented in any respect whatsoever,
without (in each case) the express prior written consent or approval of
the Agent, if such changes would affect the Guarantor's REIT status or
otherwise materially adversely affect the rights of the Agent and the
Banks hereunder or under any other Loan Document.
9. FINANCIAL COVENANTS. The Borrower and the Guarantor jointly and
severally agree that until the termination of the Commitment and the payment
and satisfaction in full of all the Obligations, the Borrower and the
Guarantor will not:
(a) cause or permit the outstanding principal amount of the
Revolving Credit Loans to exceed sixty percent (60%) of the Fair Market
Value of Eligible Properties at any time; provided, that, the Borrower
shall have the right to either (i) pay down the outstanding principal
amount of the Revolving Credit Loans, or (ii) request in writing to the
Agent to add to the Eligible Properties from additional Real Estate
Assets on which all real estate due diligence requirements referred to
in 2 hereof have been met and subject to the right of the Agents to
approve or disapprove such request in accordance with 5 hereof, in each
case in order to cure the Borrower's failure to comply with this 9(a)
within the time period referred to in 12.1(c) hereof;
(b) cause or permit the ratio of Adjusted EBITDA calculated solely
with respect to the Eligible Properties to Pro Forma Debt Service
Charges to be less than 1.75 to 1.0 as at the end of any fiscal quarter
of the Guarantor ending on or after March 31, 1998;
(c) cause or permit the ratio of EBITDA to Total Interest Expense
of the Guarantor to be less than 2.0 to 1.0 as at the end of any fiscal
quarter of the Guarantor ending on or after the March 31, 1998.
(d) cause or permit the ratio of Operating Cash Flow to Total Debt
Service for the Guarantor to be less than 1.75 to 1.0 as at the end of
any fiscal quarter of the Guarantor ending on or after the March 31,
1998.
(e) cause or permit Consolidated Total Liabilities to exceed
fifty-five percent (55%) of Consolidated Total Adjusted Asset Value as
at the end of any fiscal quarter of the Guarantor ending on or after
March 31, 1998.
(f) cause or permit Secured Indebtedness to exceed forty percent
(40%) of Consolidated Total Adjusted Asset Value as at the end of any
fiscal quarter of the Guarantor ending on or after March 31, 1998.
(g) cause or permit Tangible Net Worth to be less than the sum of
(a) $90,000,000 plus (b) ninety percent (90%) of the aggregate proceeds
received by the Guarantor (net of fees and expenses customarily incurred
in transactions of such type) in connection with any offering of stock,
stock equivalents, partnership interests, or other, similar investment
interests in the Guarantor as at the end of any fiscal quarter of the
Guarantor ending on or after March 31, 1998.
(h) cause or permit the aggregate Budgeted Renovation Costs of all
Renovations to exceed fifteen percent (15%) of Consolidated Total
Adjusted Asset Value as at the end of any fiscal quarter of the
Guarantor ending on or after March 31, 1998.
(i) cause or permit the value of Unhedged Variable Rate
Indebtedness to exceed thirty percent (30%) of Consolidated Total
Adjusted Asset Value as at the end of any fiscal quarter of the
Guarantor ending on or after March 31, 1998.
10. CONDITIONS TO THE CLOSING DATE. The obligations of the Banks to
enter into this Agreement shall be subject to the satisfaction of the
following conditions precedent on or prior to April ___, 1998:
10.1. Loan Documents. Each of the Loan Documents shall have been
duly executed and delivered by the respective parties thereto and shall be in
full force and effect.
10.2. Certified Copies of Organization Documents. The Agent
shall have received (i) from the Borrower a copy, certified as of a recent
date by a duly authorized officer of the Guarantor, in its capacity as
general partner of the Borrower, to be true and complete, of the Agreement of
Limited Partnership of the Borrower and any other agreement governing the
rights of the partners of the Borrower, (ii) from the Guarantor a copy,
certified as of a recent date by the appropriate officer of the State of
Maryland to be true and correct, of the declaration of trust of the Guarantor
and (iii) from each Additional Guarantor copies of such Additional
Guarantor's Charter Documents, in each case along with any other organization
documents of the Borrower or the Guarantor or the Additional Guarantors, as
the case may be, and each as in effect on the date of such certification.
10.3. By-Laws; Resolutions. All action on the part of the
Borrower, the Guarantor and the Additional Guarantors necessary for the valid
execution, delivery and performance by the Borrower, the Guarantor and the
Additional Guarantors of this Agreement and the other Loan Documents to which
any of them is or is to become a party shall have been duly and effectively
taken, and evidence thereof satisfactory to the Banks shall have been
provided to the Agent. The Agent shall have received from the Guarantor, for
itself and in its capacity as general partner of the Borrower and the
Additional Guarantors, true copies of its by-laws and the resolutions adopted
by its board of directors authorizing the transactions described herein and
evidencing the due authorization, execution and delivery of the Loan
Documents to which it and/or the Borrower or the Additional Guarantors is a
party, each certified by the secretary as of a recent date to be true and
complete.
10.4. Incumbency Certificate; Authorized Signers. The Agent shall
have received from the Guarantor for itself and as general partner of
the Borrower and the Additional Guarantors, an incumbency certificate,
dated as of the Closing Date, signed by a duly authorized officer of
the Guarantor and giving the name and bearing a specimen signature of
each individual who shall be authorized: (a) to sign, in the name and
on behalf of the Borrower, the Guarantor and the Additional
Guarantors, as the case may be, each of the Loan Documents to
which the Borrower or the Guarantor or any of the Additional
Guarantors is or is to become a party; (b) to make Loan and Conversion
Requests on behalf of the Borrower; and (c) to give notices and to
take other action on behalf of the Borrower or the Guarantor or the
Additional Guarantors, as applicable, under the Loan Documents.
10.5. Survey and Taxes. The Agent shall have received (a) a
Survey of each of the Initial Eligible Properties, together with the
applicable Surveyor Certificate, bearing dates acceptable to the Agent, and
in form and substance acceptable to the Agent, and (b) evidence of payment of
real estate taxes and municipal charges on the Initial Eligible Properties
which are or will become due and payable on or before the Closing Date.
10.6. Title Insurance; Title Exception Documents. The Agent (on
behalf of the Banks) shall have received the Title Policies. The Agent (on
behalf of the Banks) shall have received true and accurate copies of all
documents listed as exceptions under each Title Policy.
10.7. Leases, Service Contracts and Other Documents. The Agent
shall have received from the Borrower Lease Summaries, all material Service
Agreements, and all Partnership Documents.
10.8. Estoppel Agreements. The Agent shall have received
Estoppel Agreements in form and substance satisfactory to the Agent, in each
case from each of the commercial tenants under the Leases which occupy more
than five percent (5%) square feet of gross rentable area of any of the
Eligible Properties.
10.9. Certificates of Insurance. The Agent shall have received
(a) current certificates of insurance as to all of the insurance maintained
by Borrower on the Initial Eligible Properties (including flood insurance if
necessary) from the insurer or an independent insurance broker, identifying
insurers, types of insurance, insurance limits, and policy terms and
insurance binders naming the Agent as Mortgagee, loss payee and additional
insured; (b) certified copies of all policies evidencing such insurance (or
certificates therefor signed by the insurer or an agent authorized to bind
the insurer); and (c) such further information and certificates from
Borrower, its insurers and insurance brokers as the Agent may reasonably
request.
10.10. Hazardous Substance Assessments. The Agent shall have
received hazardous waste site assessment reports running in favor of the
Agent and the Banks concerning Hazardous Substances (or the threat thereof)
and asbestos with respect to the Initial Eligible Properties, dated as of a
date satisfactory to the Banks, from environmental engineers acceptable to
the Agent, such reports to be in form and substance satisfactory to the Agent
and each of the Banks. The Agent shall have the right to obtain third-party
review of the reports at the Borrower's expense.
10.11. Opinion of Counsel Concerning Organization and Loan
Documents. Each of the Banks and the Agent shall have received
favorable opinions addressed to the Banks and the Agent in form and substance
satisfactory to the Banks and the Agent from Xxxxxxxx & Xxxxxxxx (or other
counsel), as counsel to the Borrower, the Guarantor, the Additional
Guarantors and their respective subsidiaries.
10.12. Structural Condition Assurances. The Agent and each of
the Banks shall have received evidence satisfactory to the Agent and each of
the Banks as to the good physical condition of the Buildings and that
utilities and public water and sewer service is available at the lot lines of
the Initial Eligible Properties and connected directly to the Buildings with
all necessary Permits.
10.13. Permit Assurances; Compliance. The Agent shall have
received evidence reasonably satisfactory to the Agent that (i) all
activities being conducted on the Initial Eligible Properties which require
federal, state or local Permits have been duly licensed and that such Permits
are in full force and effect, and (ii) the Initial Eligible Properties are in
compliance with all zoning, land use, environmental, architectural access,
historical and building laws.
10.14. Guaranty. The Guaranty shall have been duly executed and
delivered by the Guarantor. The Additional Guaranties shall have been duly
executed and delivered by the Additional Guarantors.
10.15. Financial Analysis of Initial Eligible Properties. Each
of the Banks shall have completed to its satisfaction, a financial analysis
of each Initial Eligible Property, which analysis shall include, without
limitation, a review, with respect to each Initial Eligible Property, of (i)
the most recent rent rolls, (ii) three (3) year historical and projected
operating statements, (iii) cash flow projections, (iv) capital
expenditure budgets (which shall be subject to the review and
approval of each of the Banks), (v) market data, (vi) Lease Summaries,
(vii) tenant financial statements, to the extent available for commercial
tenants, and (viii) an aging of rent payments and rent payment histories
for each tenant.
10.16. Inspection of Eligible Properties. The Agent and each
Bank shall have completed to its satisfaction an inspection of
the Initial Eligible Properties at the Borrower's expense.
10.17. Certifications from Government Officials; UCC-11
Reports. The Agent shall have received (i) long-form certifications from
government officials evidencing the legal existence, good standing and
foreign qualification of the Borrower, the Guarantor and each of the
Additional Guarantors, along with a certified copy of the certificate of
limited partnership of the Borrower and the Additional Guarantors, all as of
the most recent practicable date; and (ii) UCC-11 search results from the
appropriate jurisdictions for the Borrower, the Guarantor and the Additional
Guarantors.
10.18. Proceedings and Documents. All proceedings in connection
with the transactions contemplated by this Agreement, the other Loan
Documents and all other documents incident thereto shall be reasonably
satisfactory in form and substance to each of the Banks and to the Agent's
counsel, and the Agent, each of the Banks and such counsel shall have
received all information and such counterpart originals or certified or other
copies of such documents as the Agent may reasonably request.
10.19. Fees. The Borrower shall have paid to the Agent, for the
accounts of the Banks or for its own account, as applicable, all reasonable
fees and expenses that are due and payable as of the Closing Date in
accordance with this Agreement.
10.20. Closing Certificate. The Borrower and the Guarantor shall
have delivered a Closing Certificate to the Agent, the form of which is
attached hereto as Exhibit F.
11. CONDITIONS TO ALL BORROWINGS. The obligations of the Banks to make
any Revolving Credit Loan, whether on or after the Closing Date, shall also
be subject to the satisfaction of the following conditions precedent:
11.1. Representations True; No Event of Default; Compliance
Certificate. Each of the representations and warranties of the
Borrower, the Guarantor and the Additional Guarantors
contained in this Agreement, the other Loan Documents or in any document or
instrument delivered pursuant to or in connection with this Agreement shall
be true as of the date as of which they were made and shall also be true at
and as of the time of the making of each Revolving Credit Loan, with the
same effect as if made at and as of that time (except to the extent of
changes resulting from transactions contemplated or not prohibited by this
Agreement or the other Loan Documents and changes occurring in the ordinary
course of business, and except to the extent that such representations and
warranties relate expressly to an earlier date); and no Default or Event of
Default under this Agreement shall have occurred and be continuing on the
date of any Loan Request or on the Drawdown Date of any Revolving Credit
Loan. Each of the Banks shall have received a certificate of the Borrower
signed by an authorized officer of the Borrower as provided in 2.5(d)(iii).
11.2. No Legal Impediment. No change shall have occurred in any
law or regulations thereunder or interpretations thereof that in the
reasonable opinion of the Agent or any Bank would make it illegal for any
Bank to make such Loan.
11.3. Governmental Regulation. Each Bank shall have received
such statements in substance and form reasonably satisfactory to such Bank
as such Bank shall require for the purpose of compliance with any applicable
regulations of the Comptroller of the Currency or the Board of Governors of
the Federal Reserve System.
12. EVENTS OF DEFAULT; ACCELERATION; ETC.
12.1. EVENTS OF DEFAULT; ACCELERATION. If any of the following events
("Events of Default") shall occur: (a) the Borrower shall fail to pay
(i) when due and payable any principal of or interest on the Revolving
Credit Loans or (ii) any other sum due under any of the Loan Documents
within five (5) days following written demand for payment of the same;
(b) the Borrower or the Guarantor shall fail to perform any term,
covenant or agreement contained in 8 or 9 (other than the covenant set
forth in 9(a) hereof); (c) the Borrower shall fail to perform the
covenant set forth in 9(a) hereof and such failure shall continue for
thirty (30) days after the Bank has given written notice of such
failure to the Borrower pursuant to 18 hereof; (d) the Borrower or the
Guarantor or any Additional Guarantor shall fail to perform any other
term, covenant or agreement contained in the Loan Documents and such
failure shall continue for thirty (30) days after the Bank has given
written notice of such failure to the Borrower; provided, that if any
such failure is of a nature that it cannot be corrected within such
thirty (30) day period
but is capable of being corrected within an additional twenty (20)
day period, such failure shall not constitute an Event of Default hereunder
so long as (i) the Borrower or the Guarantor or such Additional Guarantor, as
applicable, institutes reasonable curative action within such initial period
and diligently pursues such action to completion and (ii) such failure shall
be fully cured within such additional twenty (20) day period; (e) any
representation or warranty of the Borrower or the Guarantor or any Additional
Guarantor in any of the Loan Documents or in any certificate or notice given
in connection therewith shall have been false or misleading in any material
respect at the time made or deemed to have been made; (f) the Borrower or the
Guarantor or any Additional Guarantor shall be in default beyond the
expiration of any applicable grace period under any environmental, financial
or payment covenant set forth in any agreement or agreements evidencing
Indebtedness owing to the Bank or any affiliates of the Bank or other
Indebtedness in excess of $1,000,000 in aggregate principal amount, or shall
fail to pay such Indebtedness when due, subject to any applicable period of
grace; (g) any of the Loan Documents shall cease to be in full force and
effect, (h) the Borrower, the Guarantor, any Additional Guarantor or any of
their respective Subsidiaries (i) shall make an assignment for the benefit of
creditors, (ii) shall be adjudicated bankrupt or insolvent, (iii) shall seek
the appointment of, or be the subject of an order appointing, a trustee,
liquidator or receiver as to all or part of its assets, (iv) shall commence,
approve or consent to, any case or proceeding under any bankruptcy,
reorganization or similar law and, in the case of an involuntary case or
proceeding, such case or proceeding is not dismissed within thirty (30) days
following the commencement thereof, or (v) shall be the subject of an order
for relief in an involuntary case under federal bankruptcy law; (i) the
Borrower or the Guarantor or any Additional Guarantor shall be unable to pay
its debts as they mature; (j) there shall remain undischarged for more than
ten (10) days any final (beyond any applicable appeal period) judgment or
execution action against the Borrower or the Guarantor or any Additional
Guarantor (not covered by insurance reasonably satisfactory to the Agent)
that, together with other outstanding claims (not covered by insurance
reasonably satisfactory to the Agent) and execution actions against the
Borrower or the Guarantor or such Additional Guarantor exceeds $1,000,000 in
the aggregate; or (k) the Guarantor shall cease to be the general partner of
the Borrower at any time:
then, and in any such event, so long as the same may be continuing, the
Agent may, and upon the request of the Majority Banks shall, by notice in
writing to the Borrower, declare all amounts owing with respect to
this Agreement, the Revolving Credit Notes and the other Loan
Documents to be, andthey shall thereupon forthwith become, immediately due and
payable without presentment, demand, protest or other notice of any kind,
all of which are hereby expressly waived by the Borrower and the Guarantor;
provided that in the event of any Event of Default specified in 12.1(h) or
12.1(i), all suchamounts shall become immediately due and payable automatically
and without any requirement of notice from any of the Banks or the Agent or
action by the Banks or the Agent.
12.2. Termination of Commitments. If any one or more Events of
Default specified in 12.1(h) or 12.1(i) shall occur, any unused portion of
the Commitments hereunder shall forthwith terminate and the Banks shall be
relieved of all obligations to make Revolving Credit Loans to the Borrower.
If any other Event of Default shall have occurred and be continuing, the
Majority Banks may, by notice to the Borrower, terminate the unused portion
of the Total Commitment hereunder, and upon such notice being given such
unused portion of the Total Commitment shall terminate immediately and the
Banks shall be relieved of all further obligations to make Revolving Credit
Loans. No such termination of the Total Commitment hereunder shall relieve
the Borrower of any of the Obligations or any of its existing obligations to
any Bank arising under other agreements or instruments.
12.3. Remedies. In the event that one or more Events of Default
shall have occurred and be continuing, whether or not the Banks shall have
accelerated the maturity of the Revolving Credit Loans pursuant to 12.1, the
Majority Banks may direct the Agent to proceed to protect and enforce the
rights and remedies of the Agent and the Banks under this Agreement, the
Revolving Credit Notes, any or all of the other Loan Documents or under
applicable law by suit in equity, action at law or other appropriate
proceeding (including for the specific performance of any covenant or
agreement contained in this Agreement or the other Loan Documents or any
instrument pursuant to which the Obligations are evidenced and, to the full
extent permitted by applicable law, the obtaining of the ex parte appointment
of a receiver), and, if any amount shall have become due, by declaration or
otherwise, proceed to enforce the payment thereof or any other legal or
equitable right or remedy of the Agent and the Banks under the Loan Documents
or applicable law. No remedy herein conferred upon the Banks or the Agent or
the holder of any Revolving Credit Note is intended to be exclusive of any
other remedy and each and every remedy shall be cumulative and shall be in
addition to every other remedy given hereunder or under any of the other Loan
Documents or now or hereafter existing at law or in equity or by statute or
any other provision of law.
12.4. Distribution of Proceeds. In the event that, following the
occurrence and during the continuance of any Default or Event of Default, the
Agent or any Bank, as the case may be, receives any monies in connection with
the Revolving Credit Loans, such monies shall be distributed for application
as follows:
(a) First, to the payment of, or (as the case may be) the
reimbursement of, the Agent for or in respect of all reasonable costs,
expenses, disbursements and losses which shall have been incurred or
sustained by the Agent in connection with the collection of such monies
by the Agent, for the exercise, protection or enforcement by the Agent
of all or any of the rights, remedies, powers and privileges of the
Agent or the Banks under this Agreement or any of the other Loan
Documents or in support of any provision of adequate indemnity to the
Agent against any taxes or liens which by law shall have, or may have,
priority over the rights of the Agent to such monies;
(b) Second, to all other Obligations pro rata based upon the
amount of the Obligations due each of the Agent and the Banks; and
provided, further, that the Agent may in its discretion make proper
allowance to take into account any Obligations not then due and payable;
(c) Third, upon payment and satisfaction in full or other
provisions for payment in full satisfactory to the Majority Banks of all
of the Obligations, to the payment of any obligations required to be
paid pursuant to 9-504(1)(c) of the Uniform Commercial Code of the
State of Connecticut or any similar law; and
(d) Fourth, the excess, if any, shall be returned to the Borrower
or to such other Persons as are entitled thereto.
13. SETOFF. Without demand or notice, during the continuance of any
Event of Default, any deposits in any account (general or specific, time or
demand, provisional or final, regardless of currency, maturity, or the branch
at which such deposits are held) in the possession of the Agent or a Bank,
other than those accounts in the possession of First Union National Bank
which relate to any currently existing secured financing between the Borrower
and First Union National Bank, may be applied to or set off against the
payment of the Obligations. Each of the Banks agrees with each other Bank
that (a) if pursuant to any agreement between such Bank and the Borrower
(other than this Agreement or any other Loan Document, an amount
to be set off is to be applied to
Indebtedness of the Borrower to such Bank, other than with respect to the
Obligations, such amount shall be applied ratably to such
other Indebtedness and to the Obligations, and (b) if such Bank shall receive
from the Borrower, whether by voluntary payment, exercise of the right of
setoff, counterclaim, cross action, enforcement of the Obligations by
proceedings against the Borrower at law or in equity or by proof thereof in
bankruptcy, reorganization, liquidation, receivership or similar proceedings,
or otherwise, and shall retain and apply to the payment of the Revolving
Credit Note or Revolving Credit Notes held by such Bank any amount in excess
of its ratable portion of the payments received by all of the Banks with
respect to the Revolving Credit Notes held by all of the Banks, such Bank
will make such disposition and arrangements with the other Banks with respect
to such excess, either by way of distribution, pro tanto assignment of
claims, subrogation or otherwise, as shall result in each Bank receiving in
respect of the Revolving Credit Notes held by it its proportionate payment as
contemplated by this Agreement; provided that if all or any part of such
excess payment is thereafter recovered from such Bank, such disposition and
arrangements shall be rescinded and the amount restored to the extent of such
recovery, but without interest. Notwithstanding the foregoing, no Bank shall
exercise a right of setoff if such exercise would limit or prevent the
exercise of any other remedy or other recourse against the Borrower.
14. ENVIRONMENTAL MATTERS.
14.1.Representations and Warranties. The Borrower, the Guarantor,
and each Additional Guarantor represent and warrant to the Agent and the
Banks on the date hereof, on the date of any Revolving Loan Request and on
each Drawdown Date of any Revolving Credit Loan that the Borrower, the
Guarantor and each Additional Guarantor has caused environmental assessments
to be conducted and/or taken other steps to investigate the past and present
environmental condition and usage of the Real Estate Assets and the
operations conducted thereon. Except as disclosed in the environmental
assessments provided to the Agent pursuant to 10.10 and based upon such
assessments and/or investigation, the Borrower, the Guarantor and each
Additional Guarantor represent and warrant, to the best of their knowledge,
that: (a) none of the Borrower, the Guarantor, any Additional Guarantor, any
of their respective Subsidiaries or any operator of the Real Estate or any
portion thereof, or any operations thereon is in violation, or alleged
violation, of any Environmental Law, which violation or alleged violation (in
writing) has, or its remediation would have, by itself or when aggregated
with all such other violations or alleged violations, a Materially
Adverse Effect, (b) none of the Borrower, the Guarantor, the
Additional Guarantor or any of their respective
Subsidiaries has received notice from any third
party, including, without limitation, any federal, state or local
governmental authority, (i) that it has been identified by the United States
Environmental Protection Agency ("EPA") as a potentially responsible party
under CERCLA with respect to a site listed on the National Priorities List,
40 C.F.R. Part 000 Xxxxxxxx X (1986), (ii) that any hazardous waste, as
defined by 42 U.S.C. 6903(5), any hazardous substances as defined by 42
U.S.C. 9601(14), any pollutant or contaminant as defined by 42 U.S.C.
9601(33) or any toxic substances, oil or hazardous materials or other
chemicals or substances regulated by any Environmental Laws ("Hazardous
Substances") which it has generated, transported or disposed of has been
found at any site at which a federal, state or local agency or other third
party has conducted or has ordered that the Borrower, the Guarantor, any
Additional Guarantor or any of their respective Subsidiaries conduct a
remedial investigation, removal or other response action pursuant to any
Environmental Law, or (iii) that it is or shall be a named party to any
claim, action, cause of action, complaint, or legal or administrative
proceeding (in each case, contingent or otherwise) arising out of any third
party's incurrence of costs, expenses, losses or damages of any kind
whatsoever in connection with the release of Hazardous Substances; which
event described in any such notice would have a Materially Adverse Effect,
(c) (i) no portion of the Real Estate Assets has been used, from the time of
ownership by the Borrower, the Guarantor, or an Additional Guarantor, as the
case may be, for the handling, processing, storage or disposal of Hazardous
Substances except in accordance with applicable Environmental Laws; and no
underground tank or other underground storage receptacle for Hazardous
Substances is located on any portion of any Real Estate Asset except in
accordance with applicable Environmental Laws, (ii) in the course of any
activities conducted by the Borrower, the Guarantor, any Additional
Guarantor, their respective Subsidiaries or to the knowledge of the Borrower,
without any independent inquiry other than as set forth in the environmental
assessments, the operators of the Real Estate Assets, or any ground or space
tenants on any Real Estate Asset, no Hazardous Substances have been generated
or are being used on such Real Estate Asset except in accordance with
applicable Environmental Laws, (iii) there has been no present or past
releasing, spilling, leaking, pumping, pouring, emitting, emptying,
discharging, injecting, escaping, disposing or dumping (a "Release") or
threatened Release of Hazardous Substances on, upon, into or from the Real
Estate Assets from the time of ownership by the Borrower, the Guarantor or an
Additional Guarantor, as the case may be, (iv) to the knowledge of the
Borrower without any independent inquiry other than as set forth in the
environmental assessments, there have been no Releases on, upon,
from or into any real property in the vicinity of any
of the Real Estate Assets which, through soil or groundwater
contamination, may have come to be located on such Real Estate
Assets, and (v) any Hazardous Substances that have been generated
by the Borrower, the Guarantor or any Additional Guarantor or any
of their respective Subsidiaries at any of the Real Estate Assets
have been transported off-site only by carriers having an
identification number issued by the EPA, treated or disposed of
only by treatment or disposal facilities maintaining valid
permits as required under applicable Environmental Laws; any of
which events described in clauses (i) through (v) above would
have a Materially Adverse Effect, (d) by virtue of the use of the
Revolving Credit Loans proceeds contemplated hereby, or as a
condition to the effectiveness of any of the Loan Documents, none
of the Borrower, the Guarantor, any Additional Guarantor or any
of the Real Estate is subject to any applicable Environmental Law
requiring the performance of Hazardous Substances site
assessments, or the removal or remediation of Hazardous
Substances, or the giving of notice to any governmental agency or
the recording or delivery to other Persons of an environmental
disclosure document or statement.
14.2.Environmental Indemnity and Covenants.
(a) The Borrower, the Guarantor, and each Additional Guarantor
jointly and severally agree that they will indemnify and hold the Agent
and each Bank, and each of their respective Affiliates, harmless from
and against any and all claims, expense, damage, loss or liability
incurred by the Agent or any Bank (including all reasonable costs of
legal representation incurred by the Agent or any Bank in connection
with any investigative, administrative or judicial proceeding, whether
or not the Agent or any Bank is party thereto, but excluding, as
applicable for the Agent or a Bank, any claim, expense, damage, loss or
liability as a result of: (x) the gross negligence or willful misconduct
of the Agent or such Bank or any of their respective Affiliates, or (y)
any of the below events which first occur following the transfer or sale
of the applicable Real Estate Asset to a party indemnified hereunder or
to a bona fide third party purchaser; and the indemnity set forth herein
shall not apply to any claim or loss arising after the date of purchase
of a Real Estate Asset from the Borrower, the Guarantor, or an
Additional Guarantor (as the case may be) by a subsequent owner who
purchases such Real Estate Asset with the proceeds of loans made by the
Agent or any Bank, unless such claim or loss was directly or indirectly
caused by the Borrower, the Guarantor or the Additional Guarantor)
relating to (a) any Release or threatened Release of Hazardous
Substances on any Real Estate; (b) any
violation of any Environmental Laws with respect
to conditions at any Real Estate or the operations
conducted thereon; (c) the investigation or remediation of off-site
locations at which the Borrower, the Guarantor, any Additional Guarantor
or any of their respective Subsidiaries or their predecessors are
alleged to have directly or indirectly disposed of Hazardous Substances;
or (d) any action, suit, proceeding or investigation brought or
threatened with respect to any Hazardous Substances relating to Real
Estate Assets (including, but not limited to, claims with respect to
wrongful death, personal injury or damage to property). In litigation,
or the preparation therefor, the Bank and the Agent shall be entitled to
select their own counsel and participate in the defense and
investigation of such claim, action or proceeding, and the Borrower
shall bear the expense of such separate counsel of the Agent and the
Bank if (i) in the written opinion of counsel to the Agent and the
Banks, use of counsel of the Borrower's choice could reasonably be
expected to give rise to a conflict of interest, (ii) the Borrower shall
not have employed counsel reasonably satisfactory to the Agent and the
Lenders within a reasonable time after notice of the institution of any
such litigation or proceeding, or (iii) the Borrower authorizes the
Agent and the Bank to employ separate counsel at the Borrowers'
expense. It is expressly acknowledged by the Borrower and the Guarantor
that this covenant of indemnification shall survive the payment of the
Loans and shall inure to the benefit of the Agent and the Banks and
their respective Affiliates, their respective successors, and their
respective assigns under the Loan Documents permitted under this
Agreement.
(b) If the Agent has reasonable grounds to believe that a Release
has occurred with respect to any Eligible Property, whether or not a
Default or an Event of Default shall have occurred, the Agent may obtain
(provided the Borrower refuses to so obtain upon request of the Agent
with a qualified consultant or expert approved by the Agent) one or more
environmental assessments or audits of such Eligible Property prepared
by a hydrogeologist, an independent engineer or other qualified
consultant or expert approved by the Agent, which approval will not be
unreasonably withheld, to evaluate or confirm (i) whether any Release of
Hazardous Substances has occurred in the soil or water at such Eligible
Property and (ii) whether the use and operation of such Eligible
Property materially complies with all Environmental Laws. All such
environmental assessments shall be at the sole cost and expense of the
Borrowers, provided, however, such costs and expenses shall be
reasonable in all respects.
(c) The Borrower, the Guarantor and each Additional Guarantor
covenants and agrees that if any Release or disposal of Hazardous
Substances shall occur or shall have occurred on any Eligible Properties
owned by it or any of its Subsidiaries, such Borrower, Guarantor or
Additional Guarantor will cause the prompt containment and removal of
such Hazardous Substances and remediation of such Eligible Properties as
necessary to comply with all Environmental Laws.
15. THE AGENT.
15.1. Authorization.
(a) The Agent is authorized to take such action on behalf of each
of the Banks and to exercise all such powers as are hereunder and under
any of the other Loan Documents and any related documents delegated to
the Agent, together with such powers as are reasonably incident thereto,
provided that no duties or responsibilities not expressly assumed herein
or therein shall be implied to have been assumed by the Agent. The
relationship between the Agent and the Banks is and shall be that of
agent and principal only, and nothing contained in this Agreement or any
of the other Loan Documents shall be construed to constitute the Agent
as a trustee or fiduciary for any Bank.
(b) The Borrower, without further inquiry or investigation, shall,
and is hereby authorized by the Banks to, assume that all actions taken
by the Agent hereunder and in connection with or under the Loan
Documents are duly authorized by the Banks. The Banks shall notify
Borrower of any successor to Agent by a writing signed by Majority
Banks, which successor shall be reasonably acceptable to the Borrower.
15.2. Employees and Agents. The Agent may exercise its powers
and execute its duties by or through employees or agents and shall be
entitled to take, and to rely on, advice of counsel concerning all matters
pertaining to its rights and duties under this Agreement and the other Loan
Documents. The Agent may utilize the services of such Persons as the Agent
in its sole discretion may reasonably determine, and all reasonable fees and
expenses of any such Persons shall be paid by the Borrower.
15.3. No Liability. Neither the Agent, nor any of its
shareholders, directors, officers or employees nor any other Person assisting
them in their duties nor any agent or employee thereof, shall
be liable for any waiver, consent or approval given or any action
taken, or omitted to be taken, in good faith by it or them
hereunder or under any of the other Loan Documents, or in
connection herewith or therewith, or be responsible for the
consequences of any oversight or error of judgment whatsoever,
except that the Agent may be liable for losses due to its willful
misconduct or gross negligence.
15.4. No Representations. The Agent shall not be responsible for
the execution or validity or enforceability of this Agreement, the Revolving
Credit Notes, any of the other Loan Documents or any instrument at any time
constituting, or intended to constitute, collateral security for the
Revolving Credit Notes, or for the value of any such collateral security or
for the validity, enforceability or collectibility of any such amounts owing
with respect to the Revolving Credit Notes, or for any recitals or
statements, warranties or representations made herein or in any of the other
Loan Documents or in any certificate or instrument hereafter furnished to it
by or on behalf of the Guarantor or the Borrower or any of their respective
Subsidiaries, or be bound to ascertain or inquire as to the performance or
observance of any of the terms, conditions, covenants or agreements in this
Agreement, the other Loan Documents or in any instrument at any time
constituting, or intended to constitute, collateral security for the
Obligations. The Agent shall not be bound to ascertain whether any notice,
consent, waiver or request delivered to it by the Borrower or the Guarantor
or any holder of any of the Revolving Credit Notes shall have been duly
authorized or is true, accurate and complete. The Agent has not made nor
does it now make any representations or warranties, express or implied, nor
does it assume any liability to the Banks, with respect to the credit
worthiness or financial condition of the Borrower or any of its Subsidiaries
or the Guarantor or any of the Subsidiaries or any tenant under a Lease or
any other entity. Each Bank acknowledges that it has, independently and
without reliance upon the Agent or any other Bank, and based upon such
information and documents as it has deemed appropriate, made its own credit
analysis and decision to enter into this Agreement.
15.5. Payments.
(a) A payment by the Borrower to the Agent hereunder or any of the
other Loan Documents for the account of any Bank shall constitute a
payment to such Bank. The Agent agrees to distribute to each Bank such
Bank's pro rata share of payments received by the Agent for the account
of the Banks, as provided herein or in any of the other Loan Documents.
All such payments shall be made on the date received, if before
2:00 p.m., and if after 2:00 p.m., on the
next Business Day. If payment is not made on the day received,
the funds shall be invested by the Agent in overnight obligations,
and interest thereon paid pro rata to the Banks.
(b) If in the reasonable opinion of the Agent the distribution of
any amount received by it in such capacity hereunder, under the
Revolving Credit Notes or under any of the other Loan Documents might
involve it in material liability, it may refrain from making
distribution until its right to make distribution shall have been
adjudicated by a court of competent jurisdiction, provided that the
Agent shall invest any such undistributed amounts in overnight
obligations on behalf of the Banks and interest thereon shall be paid
pro rata to the Banks. If a court of competent jurisdiction shall
adjudge that any amount received and distributed by the Agent is to be
repaid, each Person to whom any such distribution shall have been made
shall either repay to the Agent its proportionate share of the amount so
adjudged to be repaid or shall pay over the same in such manner and to
such Persons as shall be determined by such court.
(c) Notwithstanding anything to the contrary contained in this
Agreement or any of the other Loan Documents, any Bank that fails (i) to
make available to the Agent its pro rata share of any Revolving Credit
Loan or (ii) to comply with the provisions of 13 with respect to making
dispositions and arrangements with the other Banks, where such Bank's
share of any payment received, whether by setoff or otherwise, is in
excess of its pro rata share of such payments due and payable to all of
the Banks, in each case as, when and to the full extent required by the
provisions of this Agreement, or to adjust promptly such Bank's
outstanding principal and its pro rata Commitment Percentage as provided
in 2.1, shall be deemed delinquent (a "Delinquent Bank") and shall be
deemed a Delinquent Bank until such time as such delinquency is
satisfied. A Delinquent Bank shall be deemed to have assigned any and
all payments due to it from the Borrower, whether on account of
outstanding Revolving Credit Loans, interest, fees or otherwise, to the
remaining nondelinquent Banks for application to, and reduction of,
their respective pro rata shares of all outstanding Revolving Credit
Loans. The Delinquent Bank hereby authorizes the Agent to distribute
such payments to the nondelinquent Banks in proportion to their
respective pro rata shares of all outstanding Revolving Credit Loans.
If not previously satisfied directly by the Delinquent Bank, a
Delinquent Bank shall be deemed to have satisfied in full a
delinquency when and if, as a result of application
of the assigned payments to all outstanding Revolving Credit
Loans of the nondelinquent Banks, the Banks' respective pro
rata shares of all outstanding Revolving Credit Loans have
returned to those in effect immediately prior to such
delinquency and without giving effect to the nonpayment
causing such delinquency.
15.6. Holders of Revolving Credit Notes. The Agent may deem and
treat the payee of any Revolving Credit Notes as the absolute owner or
purchaser thereof for all purposes hereof until it shall have been furnished
in writing with a different name by such payee or by a subsequent holder,
assignee or transferee.
15.7. Indemnity. The Banks ratably and severally agree hereby to
indemnify and hold harmless the Agent from and against any and all claims,
actions and suits (whether groundless or otherwise), losses, damages, costs,
expenses (including any expenses for which the Agent has not been reimbursed
by the Borrower as required by 18), and liabilities of every nature and
character arising out of or related to this Agreement, the Revolving Credit
Notes, or any of the other Loan Documents or the transactions contemplated or
evidenced hereby or thereby, or the Agent's actions taken hereunder or
thereunder, except to the extent that any of the same shall be directly
caused by the Agent's willful misconduct or gross negligence.
15.8. Agent as Bank. In its individual capacity as a Bank, Rhode
Island Hospital Trust National Bank shall have the same obligations and the
same rights, powers and privileges in respect to its Commitment and the
Revolving Credit Loans made by it, and as the holder of any of the Revolving
Credit Notes, as it would have were it not also the Agent.
15.9. Notification of Defaults and Events of Default. Each Bank
hereby agrees that, upon learning of the existence of a default, Default or
an Event of Default, it shall (to the extent notice has not previously been
provided) promptly notify the Agent thereof. The Agent hereby agrees that
upon receipt of any notice under this 15.9 it shall promptly notify the
other Banks of the existence of such default, Default or Event of Default.
15.10. Duties in the Case of Enforcement. In case one of more
Events of Default have occurred and shall be continuing, and whether or not
acceleration of the Obligations shall have occurred, the Agent shall, if (a)
so requested by the Majority Banks and (b) the Banks have provided to the
Agent such additional indemnities and assurances
against expenses and liabilities as the Agent may reasonably request, proceed to
enforce the provisions of this Agreement. The Majority Banks may direct the
Agent in writing as to the method and the extent of any such sale or other
disposition, the Banks (including any Bank which is not one of the Majority
Banks) hereby agreeing to ratably and severally indemnify and hold the Agent
harmless from all liabilities incurred in respect of all actions taken or
omitted in accordance with such directions, provided that the Agent need not
comply with any such direction to the extent that the Agent reasonably believes
the Agent's compliance with such direction to be unlawful or commercially
unreasonable in any applicable jurisdiction.
15.11. Successor Agent. Rhode Island Hospital Trust National
Bank, or any successor Agent, may resign as Agent at any time by giving
written notice thereof to the Banks and to the Borrower. In addition, the
Majority Banks may remove the Agent in the event of the Agent's willful
misconduct or gross negligence. Any such resignation or removal shall be
effective upon appointment and acceptance of a successor Agent, as
hereinafter provided. Upon any such resignation or removal, the Majority
Banks shall have the right to appoint a successor Agent, provided that,
unless a Default or an Event of Default shall have occurred and be
continuing, the Borrower shall have the right to approve any successor Agent,
which approval shall not be unreasonably withheld. If, in the case of a
resignation by the Agent, no successor Agent shall have been so appointed by
the Majority Banks and approved by the Borrower, and shall have accepted such
appointment, within thirty (30) days after the retiring Agent's giving of
notice of resignation, then the retiring Agent may, on behalf of the Banks,
appoint any one of the other Banks as a successor Agent. Upon the acceptance
of any appointment as Agent hereunder by a successor Agent, such successor
Agent shall thereupon succeed to and become vested with all the rights,
powers, privileges and duties of the retiring or removed Agent, and the
retiring or removed Agent shall be discharged from all further duties and
obligations as Agent under this Agreement. After any Agent's resignation or
removal hereunder as Agent, the provisions of this 15 shall inure to its
benefit as to any actions taken or omitted to be taken by it while it was
Agent under this Agreement. The Agent agrees that it shall not assign any of
its rights or duties as Agent to any other Person.
15.12. Notices. Any notices or other information required
hereunder to be provided to the Agent shall be forwarded by the Agent to each
of the Banks on the same day (if practicable) and, in any case, on the next
Business Day following the Agent's receipt thereof. The Agent's
receipt of such notice shall be deemed to constitute receipt by the Banks of any
such notice.
16. ASSIGNMENT; PARTICIPATIONS; ETC.
16.1. Conditions to Assignment by Banks. Except as provided
herein, each Bank may assign to one or more Eligible Assignees all or a
portion of its interests, rights and obligations under this Agreement
(including all or a portion of its Commitment Percentage and Commitment and
the same portion of the Revolving Credit Loans at the time owing to it) and
the Revolving Credit Notes held by it; provided that (a) the Agent and,
unless a Default or an Event of Default shall have occurred and be
continuing, the Borrower each shall have the right to approve any Eligible
Assignee, which approval shall not be unreasonably withheld, it being agreed
that the Agent and the Borrower must approve or reject a proposed Eligible
Assignee within seven (7) days of receiving a written request from any Bank
for such approval and if the Agent or the Borrower fails to respond within
such seven (7) day period, such request for approval shall be deemed approved
by the Agent or the Borrower, or both, as the case may be, (b) each such
assignment shall be of a constant, and not a varying, percentage of all the
assigning Bank's rights and obligations under this Agreement, (c) subject to
the provisions of 2.2 hereof, each Bank shall have at all times an amount of
its Commitment of not less than $8,000,000 and (d) the parties to such
assignment shall execute and deliver to the Agent, for recording in the
Register (as hereinafter defined), an assignment and assumption,
substantially in the form of Exhibit G hereto (an "Assignment and
Assumption"), together with any Revolving Credit Notes subject to such
assignment. Upon such execution, delivery, acceptance and recording, from
and after the effective date specified in each Assignment and Assumption,
which effective date shall be at least five (5) Business Days after the
execution thereof, (i) the assignee thereunder shall be a party hereto and,
to the extent provided in such Assignment and Assumption, have the rights and
obligations of a Bank hereunder and thereunder, and (ii) the assigning Bank
shall, to the extent provided in such assignment and upon payment to the
Agent of the registration fee referred to in 16.3, be released from its
obligations under this Agreement. Any such Assignment and Assumption shall
run to the benefit of the Borrower and a fully executed copy of any such
Assignment and Assumption shall be delivered by the Assignor to the
Borrower.
16.2. Certain Representations and Warranties; Limitations;
Covenants. By executing and delivering an Assignment and Assumption,
the parties to the assignment thereunder confirm to and agree with each
other and the other parties hereto as follows: (a) other
than the representation and warranty that it is the legal and beneficial owner
of the interest being assigned thereby free and clear of any adverse claim, the
assigning Bank makes no representation or warranty and assumes no responsibility
with respect to any statements, warranties or representations made in or in
connection with this Agreement or the execution, legality, validity,
enforceability, genuineness, sufficiency or value of this Agreement, the other
Loan Documents or any other instrument or document furnished pursuant hereto;
(b) the assigning Bank makes no representation or warranty and assumes no
responsibility with respect to the financial condition of the Borrower and its
Subsidiaries or the Guarantor or any other Person primarily or secondarily
liable in respect of any of the Obligations, or the performance or observance by
the Borrower and its Subsidiaries or the Guarantor or any other Person primarily
or secondarily liable in respect of any of the Obligations of any of their
obligations under this Agreement or any of the other Loan Documents or any other
instrument or document furnished pursuant hereto or thereto; (c) such assignee
confirms that it has received a copy of this Agreement, together with copies of
such other documents and information as it has deemed appropriate to make its
own credit analysis and decision to enter into such Assignment and Assumption;
(d) such assignee will, independently and without reliance upon the assigning
Bank, the Agent or any other Bank and based on such documents and information as
it shall deem appropriate at the time, continue to make its own credit decisions
in taking or not taking action under this Agreement; (e) such assignee
represents and warrants that it is an Eligible Assignee; (f) such assignee
appoints and authorizes the Agent to take such action as agent on its behalf and
to exercise such powers under this Agreement and the other Loan Documents as are
delegated to the Agent by the terms hereof or thereof, together with such powers
as are reasonably incidental thereto; (g) such assignee agrees that it will
perform in accordance with their terms all of the obligations that by the terms
of this Agreement are required to be performed by it as a Bank; and (h) such
assignee represents and warrants that it is legally authorized to enter into
such Assignment and Assumption.
16.3 Register. The Agent shall maintain a copy of each
Assignment and Assumption delivered to it and a register or similar list (the
"Register") for the recordation of the names and addresses of the Banks and
the Commitment Percentages of, and principal amount of the Revolving Credit
Loans owing to, the Banks from time to time. The entries in the Register
shall be conclusive, in the absence of manifest error, and the Borrower, the
Agent and the Banks may treat each Person whose name is recorded in the
Register as a Bank hereunder for all purposes of this Agreement.
The Register shall be available for inspection
by the Borrower and the Banks at any reasonable time and from time to time upon
reasonable prior notice. Upon each such recordation, the assigning Bank agrees
to pay to the Agent a registration fee in the sum of $2,500
16.4. New Revolving Credit Notes. Upon its receipt of an
Assignment and Assumption executed by the parties to such assignment,
together with each Revolving Credit Notes subject to such assignment, the
Agent shall (a) record the information contained therein in the Register, and
(b) give prompt notice thereof to the Borrower and the Banks (other than the
assigning Bank). Within five (5) Business Days after receipt of such notice,
the Borrower, at its own expense, shall execute and deliver to the Agent, in
exchange for each surrendered Revolving Credit Notes, a new Revolving Credit
Notes to the order of such Eligible Assignee in an amount equal to the amount
assumed by such Eligible Assignee pursuant to such Assignment and Assumption
and, if the assigning Bank has retained some portion of its obligations
hereunder, a new Revolving Credit Notes to the order of the assigning Bank in
an amount equal to the amount retained by it hereunder. Such new Revolving
Credit Notes shall provide that they are replacements for the surrendered
Revolving Credit Notes, shall be in an aggregate principal amount equal to
the aggregate principal amount of the surrendered Revolving Credit Notes,
shall be dated the effective date of such Assignment and Assumption and shall
otherwise be in substantially the form of the assigned Revolving Credit
Notes. The surrendered Revolving Credit Notes shall be canceled and returned
to the Borrower.
16.5. Participations. Each Bank may sell participations to one
or more banks or other entities in all or a portion of such Bank's rights and
obligations under this Agreement and the other Loan Documents; provided that
(a) unless a Default or an Event of Default shall have occurred and be
continuing, the Borrower shall have approved such participant (such approval
not to be unreasonably withheld), (b) each such participation shall be in an
amount of not less than $8,000,000, (c) any such sale or participation shall
not affect the rights and duties of the selling Bank hereunder to the
Borrower and the Agent and the Bank shall continue to exercise all approvals,
disapprovals and other functions of a Bank, and (d) no participant shall have
the right to grant further participations or assign its rights, obligations
or interests under such participation to other Persons without the prior
written consent of the Agent.
16.6. Pledge by Lender. Notwithstanding any other provision
of this Agreement, any Bank at no cost to the Borrower may at
any time pledge all or any portion of its interest and rights under this
Agreement (including all or any portion of its Revolving Credit Notes) to any of
the twelve Federal Reserve Banks organized under 4 of the Federal Reserve Act,
12 U.S.C. 341. No such pledge or the enforcement thereof shall release the
pledgor Bank from its obligations hereunder or under any of the other Loan
Documents.
16.7. No Assignment by Borrower. The Borrower shall not assign
or transfer any of its rights or obligations under any of the Loan Documents
without prior Unanimous Bank Approval.
16.8. Disclosure. The Borrower agrees that, in addition to
disclosures made in accordance with standard banking practices, any Bank may,
after written notice to the Borrower, disclose information obtained by such
Bank pursuant to this Agreement to assignees or participants and potential
assignees or participants hereunder. Any such disclosed information shall be
treated by any assignee or participant with the same standard of
confidentiality set forth herein.
17. CONSENTS, AMENDMENTS, WAIVERS, ETC. Except as otherwise expressly
provided in this Agreement, any consent or approval required or permitted by
this Agreement may be given, and any term of this Agreement or of any other
of the other Loan Documents may be amended, and the performance or observance
by the Borrower or the Guarantor of any terms of this Agreement or the other
Loan Documents or the continuance of any default, Default or Event of Default
may be waived (either generally or in a particular instance and either
retroactively or prospectively) with, but only with, the written consent of
the Majority Banks.
Notwithstanding the foregoing, Unanimous Bank Approval shall be required
for any amendment, modification or waiver of this Agreement that:
(i) reduces or forgives any principal of any unpaid Revolving
Credit Loan or any interest thereon (including any interest
"breakage" costs) or any fees due any Bank hereunder, or permits
any prepayment not otherwise permitted hereunder; or
(ii) changes the unpaid principal amount of, or the rate of
interest on, any Revolving Credit Loan; or
(iii)changes the date fixed for any payment of principal
of or interest on any Revolving Credit Loan
(including, without limitation, any extension of the
Maturity Date) or any fees payable hereunder; or
(iv) changes the amount of any Bank's Commitment (other than
pursuant to an assignment permitted under 15.1 hereof) or
increases the amount of the Total Commitment; or
(v) amends or otherwise changes the definition of the
Borrowing Base, or the method of calculating such Borrowing Base; or
(vi) amends any of the covenants contained in 9 hereof; or
(vii)releases or reduces the liability of the Guarantor
pursuant to the Guaranty; or
(viii)....modifies any provision herein or in any other Loan
Document which by the terms thereof expressly requires Unanimous
Bank Approval; or
(ix) amends any of the provisions governing funding contained
in 2 hereof; or
(x) changes the rights, duties or obligations of the Agent
specified in 15 hereof (provided that no amendment or modification
to such 15 or to the fee payable to the Agent under this Agreement
may be made without the prior written consent of the Agent); or
(xi) changes the definitions of Majority Banks or Unanimous
Bank Approval.
No waiver shall extend to or affect any obligation not expressly waived
or impair any right consequent thereon. No course of dealing or delay or
omission on the part of the Agent or the Banks or any Bank in exercising any
right shall operate as a waiver thereof or otherwise be prejudicial to such
right or any other rights of the Agent or the Banks. No notice to or demand
upon the Borrower shall entitle the Borrower to other or further notice or
demand in similar or other circumstances.
18. MISCELLANEOUS. The Borrower and the Guarantor jointly and
severally agree to indemnify and hold harmless the Agent and the Banks
against all claims and losses of every kind arising out of the Loan
Documents, including without limitation against those in respect of th
application of Environmental Laws to the Borrower. The Borrower and the
Guarantor shall pay to the Agent and the Banks promptly on demand all
reasonable costs and expenses (including any taxes and legal appraisal,
engineering and other professional fees, syndication fees and fees of its
commercial finance examiner) incurred by the Agent and the Banks in
connection with the preparation, negotiation, execution, amendment,
syndication or enforcement of any of the Loan Documents. Any communication
to be made hereunder shall (a) be made in writing and by hand delivery or by
registered or certified first class mail, and (b) be made or delivered to the
address of the party receiving notice which is identified with its signature
below (unless such party has by five (5) days' written notice specified
another address), and shall be deemed made or delivered, when dispatched,
left at that address, or five (5) days after being mailed, postage prepaid,
to such address. This Agreement shall be binding upon and inure to the
benefit of each party hereto and its successors and assigns (but neither the
Guarantor nor the Borrower may assign its rights or obligations hereunder)
and the Guarantor and the Borrower agree to cooperate and execute and deliver
any and all agreements, documents and instruments reasonably required in
connection with the terms hereof, including, without limitation, any
documents reasonably required by any Bank in connection with the assignment
by such Bank of any of its rights and remedies hereunder. No failure or
delay by the Agent and the Banks to exercise any right hereunder shall
operate as a waiver thereof, nor shall any single or partial exercise of any
right, power or privilege preclude any other right, power or privilege. The
provisions of this Agreement are severable and if any one provision hereof
shall be held invalid or unenforceable in whole or in part in any
jurisdiction, such invalidity or unenforceability shall affect only such
provision in such jurisdiction. This Agreement, together with all Exhibits
and Schedules hereto, expresses the entire understanding of the parties with
respect to the transactions contemplated hereby. This Agreement and any
amendment hereby may be executed in several counterparts, each of which shall
be an original, and all of which shall constitute one agreement. In proving
this Agreement, it shall not be necessary to produce more than one such
counterpart executed by the party to be charged. THIS AGREEMENT AND THE NOTE
ARE CONTRACTS UNDER THE LAWS OF THE STATE OF CONNECTICUT AND SHALL BE
CONSTRUED IN ACCORDANCE THEREWITH AND GOVERNED THEREBY. THE BORROWER AGREES
THAT ANY SUIT FOR THE ENFORCEMENT OF ANY OF THE LOAN DOCUMENTS MAY BE BROUGHT
IN THE COURTS OF THE STATE OF CONNECTICUT OR ANY FEDERAL COURT SITTING
THEREIN.
19. WAIVER OF JURY TRIAL. THE BORROWER AND THE GUARANTOR, AS AN
INDUCEMENT TO THE AGENT AND THE BANKS TO ENTER INTO THIS AGREEMENT, HEREBY
WAIVE ALL RIGHTS TO A JURY TRIAL WITH RESPECT TO ANY ACTION ARISING IN
CONNECTION WITH ANY LOAN DOCUMENT.
20. PREJUDGMENT REMEDY WAIVER. THE BORROWER AND THE GUARANTOR
ACKNOWLEDGE THAT THE FINANCING EVIDENCED HEREBY IS A COMMERCIAL TRANSACTION
WITHIN THE MEANING OF CHAPTER 903a OF THE CONNECTICUT GENERAL STATUTES. THE
BORROWER AND THE GUARANTOR HEREBY WAIVE THEIR RIGHT TO NOTICE AND PRIOR COURT
HEARING OR COURT ORDER UNDER CONNECTICUT GENERAL STATUTES SECTIONS 52-278a
ET. SEQ. AS AMENDED OR UNDER ANY OTHER STATE OR FEDERAL LAW WITH RESPECT TO
ANY AND ALL PREJUDGMENT REMEDIES THE AGENT AND THE BANKS MAY EMPLOY TO
ENFORCE THEIR RIGHTS AND REMEDIES HEREUNDER. MORE SPECIFICALLY, THE BORROWER
ACKNOWLEDGE THAT THE BANK'S AND THE AGENT'S ATTORNEY MAY, PURSUANT TO CONN.
GEN. STAT. 52-278F, ISSUE A WRIT FOR A PREJUDGMENT REMEDY WITHOUT SECURING A
COURT ORDER. THE BORROWER ACKNOWLEDGE AND RESERVE THEIR RIGHT TO NOTICE AND
A HEARING SUBSEQUENT TO THE ISSUANCE OF A WRIT FOR PREJUDGMENT REMEDY AS
AFORESAID AND THE AGENT AND THE BANKS ACKNOWLEDGE THE BORROWER'S AND THE
GUARANTOR'S RIGHT TO SAID HEARING SUBSEQUENT TO THE ISSUANCE OF SAID WRIT.
IN WITNESS WHEREOF, the undersigned have duly executed this Agreement as
a sealed instrument as of the date first set forth above.
..... GROVE OPERATING, L.P.
..... By:Grove Property Trust
..... By:
..... Name: Xxxxxx Xxxxxxxx
..... Title: Treasurer
..... Address: 000 Xxxxxx Xxxxxx
..... Xxxxxxxx, Xxxxxxxxxxx 00000
..... Telephone: (000) 000-0000
..... Telecopy: (000) 000-0000
..... GROVE PROPERTY TRUST
..... By:
..... Name: Xxxxxx Xxxxxxxx
..... Title: Treasurer
..... Address: 000 Xxxxxx Xxxxxx
..... Xxxxxxxx, Xxxxxxxxxxx 00000
..... Telephone: (000) 000-0000
..... Telecopy: (000) 000-0000
..... RHODE ISLAND HOSPITAL
TRUST NATIONAL BANK,
..... individually and as Agent
..... By:
..... Name:
..... Title:
..... By:
..... Name: Xxxxx X. St. Xxxxxx
..... Title: First Vice President
..... Address: One BankBoston Plaza
..... Xxxxxxxxxx, XX 00000
..... Telephone: (000) 000-0000
..... Telecopy: (000) 000-0000
..... CITIZENS BANK OF RHODE
..... ISLAND
..... By:
..... Name:
..... Title:
..... Address: One Citizens Plaza
..... Xxxxxxxxxx, XX 00000
Telecopy: (000) 000-0000
..... FIRST UNION NATIONAL BANK
..... By:____________________________
..... Name:
..... Title:
..... Address: Real Estate Capital
..... Markets Group
..... One First Union Center
..... 6th Floor
..... Xxxxxxxxx, XX 00000
..... Telecopy: (000) 000-0000
