EXHIBIT (10) (iii)
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BANYAN STRATEGIC REALTY TRUST
CONVERTIBLE TERM LOAN AGREEMENT
This CONVERTIBLE TERM LOAN AGREEMENT is dated as of October 10,
1997 and entered into by and among BANYAN STRATEGIC REALTY TRUST, a
Massachusetts business trust ("Company"), and THE ENTITIES LISTED ON THE
SIGNATURE PAGES HEREOF (each individually referred to herein as a "Lender"
and collectively as "Lenders").
R E C I T A L S:
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A. Company is desirous of obtaining loans and, subject to
and upon the terms and conditions contained herein, Lenders are willing to
make loans to Company, to provide financing for acquisition of new
properties.
B. The loan proceeds will be used by Company for, among
other things, distribution to Funded Subsidiaries (as defined below) of
Company for the acquisition of certain properties; therefore, such Funded
Subsidiaries will benefit from the loans made to Company under this
Agreement. Accordingly, such Funded Subsidiaries of Company will guaranty
portions of the obligations of Company under this Agreement.
C. Lenders have agreed to acquire Common Shares (defined
below) on the terms set forth in the Share Purchase Agreement (defined
below).
NOW, THEREFORE, in consideration of the premises and the
agreements, provisions and covenants herein contained, Company and Lenders
agree as follows:
Section 1. DEFINITIONS
1.1 CERTAIN DEFINED TERMS.
The following terms used in this Agreement shall have the
following meanings:
"Administrative Services Agreement" means that certain
Administrative Services Agreement dated as of February 27, 1994, between
Company and BMC, as the same may be amended, supplemented or otherwise
modified from time to time as permitted by this Agreement.
"Acquisition Price" means all amounts paid to a seller and the
amount of all Indebtedness assumed or created, in connection with the
acquisition of a Facility, and
reasonable and ordinary costs related thereto, including without
limitation, capital improvements, due diligence expenses paid to third
parties, title and closing costs and legal and accounting fees.
"Affiliate", as applied to any Person, means any other Person
directly or indirectly controlling, controlled by, or under common control
with, that Person. For the purposes of this definition, "control"
(including, with correlative meanings, the terms "controlling", "controlled
by" and "under common control with"), as applied to any Person, means the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of that Person, whether through
the ownership of voting securities or by contract or otherwise. For
purposes of this Agreement, BMC will not be considered an Affiliate of
Company.
"Agent" means Morgens, Waterfall, Vintiadis & Company, Inc. or
any successor agent appointed by Requisite Lenders.
"Agreement" means this Convertible Term Loan Agreement dated as
of October 10, 1997, as it may be amended, supplemented or otherwise
modified from time to time in accordance with the terms hereof.
"Amended Declaration of Trust" means Company's Declaration of
Trust, as amended following Shareholder Approval.
"Bankruptcy Code" means Title 11 of the United States Code
entitled "Bankruptcy", as now and hereafter in effect, or any successor
statute.
"BMC" means Banyan Management Corp., an Illinois corporation.
"Business Day" means any day excluding Saturday, Sunday and any
day which is a legal holiday under the laws of the State of New York or is
a day on which banking institutions located in such state are authorized or
required by law or other governmental action to close.
"Cash Equivalents" means (i) marketable securities issued or
directly and unconditionally guaranteed by the United States Government or
issued by any agency thereof and backed, directly or indirectly, by the
full faith and credit of the United States, in each case maturing within
one year from the date of acquisition thereof and repurchase agreements
backed by United States government securities; (ii) commercial paper
maturing no more than one year from the date of creation thereof and, at
the time of acquisition, having a rating of at least A-1 from Standard &
Poor's Corporation and at least P-1 from Xxxxx'x Investors Service, Inc.;
and (iii) certificates of deposit, time deposits or bankers' acceptances
maturing within one year from the date of acquisition thereof issued by any
commercial bank organized under the laws of the United States of America or
any state thereof or the District of Columbia having unimpaired capital and
surplus of not less than $250,000,000.
"Closing Date" means October 14, 1997.
"Commitment Termination Date" means October 14, 1998.
"Common Share Conversion Rate" has the meaning set forth in
SUBSECTION 9.1B.
"Common Shares" means the shares of beneficial interest, no par
value, of Company.
"Company" has the meaning assigned to that term in the
introduction to this Agreement.
"Compliance Certificate" means a certificate substantially in
the form of EXHIBIT II annexed hereto delivered to Lenders by Company
pursuant to SUBSECTION 5.1(iii).
"Consolidated Net Worth" means, as at any date of
determination, the excess of the assets of Company and its Subsidiaries
over the liabilities of Company and its Subsidiaries, all on a consolidated
basis determined in accordance with GAAP (as such assets and liabilities
are shown on the then-most recent consolidated financial statements
delivered to Lenders pursuant to SUBSECTION 5.1(i) or 5.1(ii) below).
"Consolidated Total Debt" means, as at any date of
determination, the aggregate stated balance sheet amount of all
Indebtedness of Company and its Subsidiaries, determined on a consolidated
basis.
"Contingent Obligation", as applied to any Person, means any
direct or indirect liability, contingent or otherwise, of that Person
(i) with respect to any Indebtedness, lease, dividend or other obligation
of another if the primary purpose or intent thereof by the Person incurring
the Contingent Obligation is to provide assurance to the obligee of such
obligation that such obligation will be paid or discharged, or that any
agreements relating thereto will be complied with, or that the holders of
such obligation will be protected (in whole or in part) against loss in
respect thereof, or (ii) with respect to any letter of credit issued for
the account of that Person or as to which that Person is otherwise liable
for reimbursement of drawings. Contingent Obligations shall include,
without limitation, (a) the direct or indirect guaranty, endorsement
(otherwise than for collection or deposit in the ordinary course of
business), co-making, discounting with recourse or sale with recourse by
such Person of the obligation of another, (b) the obligation to make take-
or-pay or similar payments if required regardless of non-performance by any
other party or parties to an agreement, and (c) any liability of such
Person for the obligation of another through any agreement (contingent or
otherwise) (X) to purchase, repurchase or otherwise acquire such obligation
or any security therefor, or to provide funds for the payment or discharge
of such obligation (whether in the form of loans, advances, stock
purchases, capital contributions or otherwise) or (Y) to maintain the
solvency or any balance sheet item, level of income or financial condition
of
another if, in the case of any agreement described under subclauses (X) or
(Y) of this sentence, the primary purpose or intent thereof is as described
in the preceding sentence. The amount of any Contingent Obligation shall
be equal to the amount of the obligation so guaranteed or otherwise
supported or, if less, the amount to which such Contingent Obligation is
specifically limited.
"Contractual Obligation", as applied to any Person, means any
provision of any security issued by that Person or of any material
indenture, mortgage, deed of trust, contract, undertaking, agreement or
other instrument to which that Person is a party or by which it or any of
its properties is bound or to which it or any of its properties is subject.
"Conversion Approval" means the authorization by shareholders
of Company of the issuance of in excess of 19.9% of the shares of
beneficial interest of Company, whether by purchase, upon conversion or
otherwise, pursuant to the provisions of this Agreement.
"Current Market Price" means, on any date, the average of the
sale prices of a Common Share (or other security, as applicable) for the
fifteen consecutive trading days commencing twenty trading days before the
earliest of the date in question and the date before the "ex date" with
respect to the issuance or distribution requiring such computation. For
the purposes of this definition, the term "ex date", when used with respect
to any issuance or distribution, means the first date on which the Common
Share (or other security, as applicable) trades regular way on the
principal national securities exchange on which the share is listed or
admitted to trading (or if not so listed or admitted, on NASDAQ, or a
similar organization if NASDAQ is no longer reporting trading information)
without the right to receive such issuance or distribution.
"Declaration of Trust" means Company's Amended and Restated
Declaration of Trust, as in effect on the Closing Date.
"Determination Date" means, with respect to any dividend or
other distribution, the date fixed for the determination of the holders of
shares of beneficial interest or other equity securities of Company
entitled to receive such dividend or distribution, or if a dividend or
distribution is paid or made without such a date, the date of such dividend
or distribution.
"Dollars" and the sign "$" mean the lawful money of the United
States of America.
"Employee Benefit Plan" means any "employee benefit plan" as
defined in Section 3(3) of ERISA which is, or was at any time, maintained
or contributed to by Company or any of its ERISA Affiliates.
"Environmental Claim" means any accusation, allegation, notice
of violation, claim, demand, abatement order or other order or direction
(conditional or
otherwise) by any governmental authority or any Person for any damage,
including, without limitation, personal injury (including sickness, disease
or death), tangible or intangible property damage, contribution, indemnity,
indirect or consequential damages, damage to the environment, nuisance,
pollution, contamination or other adverse effects on the environment, or
for fines, penalties or restrictions, in each case relating to, resulting
from or in connection with Hazardous Materials and relating to Company, any
of its Subsidiaries, or any Facility.
"Environmental Laws" means all statutes, ordinances, orders,
rules, regulations, plans, policies or decrees and the like relating to
(i) environmental matters, including, without limitation, those relating to
fines, injunctions, penalties, damages, contribution, cost recovery
compensation, losses or injuries resulting from the Release of Hazardous
Materials, (ii) the generation, use, storage, transportation or disposal of
Hazardous Materials, or (iii) occupational safety and health, industrial
hygiene, land use or the protection of human, plant or animal health or
welfare, in any manner applicable to Company or any of its Subsidiaries or
any of their respective properties, including, without limitation, the
Comprehensive Environmental Response, Compensation, and Liability Act (42
U.S.C. Section 9601 et seq.), the Hazardous Materials Transportation Act
(49 U.S.C. Section 1801 et seq.), the Resource Conservation and Recovery
Act (42 U.S.C. Section 6901 et seq.), the Federal Water Pollution Control
Act ( 33 U.S.C. Section 1251 et seq.), the Clean Air Act (42 U.S.C.
Section 7401 et seq.), the Toxic Substances Control Act (15 U.S.C.
Section 2601 et seq.), the Federal Insecticide, Fungicide and Rodenticide
Act (7 U.S.C. Section 136 et seq.), the Occupational Safety and Health Act
(29 U.S.C. Section 651 et seq.) and the Emergency Planning and Community
Right-to-Know Act (42 U.S.C. Section 11001 et seq.), each as amended or
supplemented, and any analogous future or present local, state and federal
statutes and regulations promulgated pursuant thereto, each as in effect as
of the date of determination.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended from time to time, and any successor statute.
"ERISA Affiliate", as applied to any Person, means (i) any
corporation which is, or was at any time, a member of a controlled group of
corporations within the meaning of Section 414(b) of the Internal Revenue
Code of which that Person is, or was at any time, a member; (ii) any trade
or business (whether or not incorporated) which is, or was at any time, a
member of a group of trades or businesses under common control within the
meaning of Section 414(c) of the Internal Revenue Code of which that Person
is, or was at any time, a member; and (iii) any member of an affiliated
service group within the meaning of Section 414(m) or (o) of the Internal
Revenue Code of which that Person, any corporation described in clause
(i) above or any trade or business described in clause (ii) above is, or
was at any time, a member.
"ERISA Event" means (i) a "reportable event" within the meaning
of Section 4043 of ERISA and the regulations issued thereunder with respect
to any Pension Plan (excluding those for which the provision for 30-day
notice to the PBGC has been waived by regulation); (ii) the failure to meet
the minimum funding standard of Section 412 of
the Internal Revenue Code with respect to any Pension Plan (whether or not
waived in accordance with Section 412(d) of the Internal Revenue Code) or
the failure to make by its due date a required installment under Section
412(m) of the Internal Revenue Code with respect to any Pension Plan or the
failure to make any required contribution to a Multiemployer Plan; (iii)
the provision by the administrator of any Pension Plan pursuant to Section
4041(a)(2) of ERISA of a notice of intent to terminate such plan in a
distress termination described in Section 4041(c) of ERISA; (iv) the
withdrawal by Company or any of its ERISA Affiliates from any Pension Plan
with two or more contributing sponsors or the termination of any such
Pension Plan resulting in liability pursuant to Sections 4063 or 4064 of
ERISA; (v) the institution by the PBGC of proceedings to terminate any
Pension Plan, or the occurrence of any event or condition which might
constitute grounds under ERISA for the termination of, or the appointment
of a trustee to administer, any Pension Plan; (vi) the imposition of
liability on Company or any of its ERISA Affiliates pursuant to Section
4062(e) or 4069 of ERISA or by reason of the application of Section 4212(c)
of ERISA; (vii) the withdrawal by Company or any of its ERISA Affiliates in
a complete or partial withdrawal (within the meaning of Sections 4203 and
4205 of ERISA) from any Multiemployer Plan if there is any potential
liability therefor, or the receipt by Company or any of its ERISA
Affiliates of notice from any Multiemployer Plan that it is in
reorganization or insolvency pursuant to Section 4241 or 4245 of ERISA, or
that it intends to terminate or has terminated under Section 4041A or 4042
of ERISA; (viii) the occurrence of an act or omission which could give rise
to the imposition on Company or any of its ERISA Affiliates of fines,
penalties, taxes or related charges under Chapter 43 of the Internal
Revenue Code or under Section 409 or 502(c), (i) or (l) or 4071 of ERISA in
respect of any Employee Benefit Plan; (ix) the assertion of a material
claim (other than routine claims for benefits) against any Employee Benefit
Plan other than a Multiemployer Plan or the assets thereof, or against
Company or any of its ERISA Affiliates in connection with any such Employee
Benefit Plan; (x) receipt from the Internal Revenue Service of notice of
the failure of any Pension Plan (or any other Employee Benefit Plan
intended to be qualified under Section 401(a) of the Internal Revenue Code)
to qualify under Section 401(a) of the Internal Revenue Code, or the
failure of any trust forming part of any Pension Plan to qualify for
exemption from taxation under Section 501(a) of the Internal Revenue Code;
or (xi) the imposition of a Lien pursuant to Section 401(a)(29) or 412(n)
of the Internal Revenue Code or pursuant to ERISA with respect to any
Pension Plan.
"Event of Default" means each of the events set forth in
SECTION 7.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended from time to time, and any successor statute.
"Facilities" means any and all real property (including,
without limitation, all buildings, fixtures or other improvements located
thereon) now, hereafter or heretofore owned, leased, operated or used by
Company or any of its Subsidiaries.
"Fiscal Year" means a twelve month period ending on December 31
of each year.
"Force Majeure Event" means an event of fire, earthquake,
flood, severe storm, washout, mud slide, casualty, riot, insurrection,
civil disturbance, strike (provided that, if practicable, such party shall
make reasonable efforts to staff its operations so as to minimize
disruptions to its operations), inability to obtain materials or supplies
beyond the party's reasonable control, act of civil or military
authorities, act of public enemy, embargo, war, act of God, rationing, or
any other similar cause beyond a Person's reasonable control (and each
party agrees to notify promptly the other party when the non-performance of
its obligations hereunder is the result of any of the circumstances
described above, and shall use all reasonable efforts to remedy such
situation, and further agrees to provide the other party with periodic
reports describing in reasonable detail the current condition of such
circumstance for so long as such circumstance prevents the performance of
an obligation required hereunder).
"Funded Subsidiaries" means those Subsidiaries of Company that
receive proceeds of Loans hereunder to acquire a Facility.
"Funding Date" means the date of funding of a Loan to Company.
"GAAP" means, subject to the limitations on the application
thereof set forth in SUBSECTION 1.2, generally accepted accounting
principles set forth in opinions and pronouncements of the Accounting
Principles Board of the American Institute of Certified Public Accountants
and statements and pronouncements of the Financial Accounting Standards
Board or in such other statements by such other entity as may be approved
by a significant segment of the accounting profession, in each case as the
same are applicable to the circumstances as of the date of determination.
"Governmental Authorization" means any permit, license,
authorization, plan, directive, consent order or consent decree of or from
any federal, state or local governmental authority, agency or court.
"Guaranty" means the continuing Guaranty(ies) to be executed
and delivered by the Funded Subsidiaries of Company pursuant to SUBSECTION
5.9, in form and substance satisfactory to Lenders, pursuant to which each
Funded Subsidiary will guaranty Obligations of Company (limited to the
amount of the Loan or Loans received by that Funded Subsidiary) under the
Loan Documents, as amended, supplemented or otherwise modified from time to
time.
"Hazardous Materials" means (i) any chemical, material or
substance at any time defined as or included in the definition of
"hazardous substances", "hazardous wastes", "hazardous materials",
"extremely hazardous waste", "restricted hazardous waste", "infectious
waste", "toxic substances" or any other formulations intended to define,
list or classify substances by reason of deleterious properties such as
ignitability, corrosivity, reactivity, carcinogenicity, toxicity,
reproductive toxicity, "TCLP toxicity" or "EP toxicity" or words of similar
import under any applicable Environmental Laws or publications promulgated
pursuant thereto; (ii) any oil, petroleum, petroleum fraction or petroleum
derived substance (excluding, however, gasoline and motor oil contained in
motor
vehicles for the purpose of operating such vehicles); (iii) any drilling
fluids, produced waters and other wastes associated with the exploration,
development or production of crude oil, natural gas or geothermal
resources; (iv) any flammable substances or explosives (excluding, however,
gasoline and motor oil contained in motor vehicles for the purpose of
operating such vehicles); (v) any radioactive materials; (vi) asbestos in
any form; (vii) urea formaldehyde foam insulation; (viii) electrical
equipment which contains any oil or dielectric fluid containing levels of
polychlorinated biphenyls in excess of fifty parts per million;
(ix) pesticides; and (x) any other chemical, material or substance,
exposure to which is prohibited, limited or regulated by any governmental
authority or which may or could pose a hazard to the health and safety of
the owners, occupants or any Persons in the vicinity of the Facilities.
Notwithstanding the foregoing, the term "Hazardous Materials" shall not
include (x) standard office supplies or common cleaning supplies used or
stored at a Facility in compliance with Environmental Laws and in
quantities standard for similar properties, and (y) chemicals, materials or
substances, other than the materials described in clauses (iv), (v) (vi),
(vii) and (viii) above, which may be present in incidental quantities or
amounts as a component, or in a material which is a component, in
construction and building materials used or incorporated in the
construction of any Facility, or which otherwise may be used in the
ordinary course of construction activities at any Facility, if such
presence or use is otherwise in compliance with Environmental Laws.
"Indebtedness", as applied to any Person, means (i) all
indebtedness for borrowed money, (ii) notes payable and drafts accepted
representing extensions of credit whether or not representing obligations
for borrowed money, (iii) any obligation owed for all or any part of the
deferred purchase price of property or services, which purchase price is
(a) due more than six months from the date of occurrence of the obligation
in respect thereof or (b) evidenced by a note or similar written
instrument, and (iv) all indebtedness secured by any Lien on any property
or asset owned or held by that Person regardless of whether the
indebtedness secured thereby shall have been assumed by that Person or is
nonrecourse to the credit of that Person.
Notwithstanding anything to the contrary in this Agreement, the
term "Indebtedness" will not include (a) amounts payable to officers and
directors of Company and its Subsidiaries pursuant to standard indemnity
provisions contained in the Declaration of Trust or Certificate or Articles
of Incorporation (as the case may be) and Bylaws of Company and its
Subsidiaries on the date of this Agreement, as such may be amended to
comply with applicable law, (b) amounts which Company is obligated to pay
to BMC as reimbursement for costs and expenses paid by BMC on behalf of
Company or its Subsidiaries pursuant to the Administrative Services
Agreement with respect to Company, its Subsidiaries or the Facilities, and
(c) the salary and other compensation payable by Company to Xxxxxxx X.
Xxxxxx, its president, in an amount and on the terms set forth in the
existing employment contract with Company.
"Indemnitee" has the meaning assigned to that term in
SUBSECTION 8.3.
"Interest Payment Date" means each March 31, June 30,
September 30 and December 31 of each year, commencing December 31, 1997,
and any date of conversion of the Loans pursuant to SECTION 9 with respect
only to the portion of the Loans converted.
"Internal Revenue Code" means the Internal Revenue Code of
1986, as amended to the date hereof and from time to time hereafter.
"Investment" means (i) any direct or indirect purchase or other
acquisition by Company or any of its Subsidiaries of, or of a beneficial
interest in, any Securities of any other Person, or (ii) any direct or
indirect loan, advance (other than advances to employees for moving,
entertainment and travel expenses, drawing accounts and similar expendi-
tures in the ordinary course of business) or capital contribution by
Company or any of its Subsidiaries to any other Person, including all
indebtedness and accounts receivable from that other Person that are not
current assets or did not arise from sales to that other Person in the
ordinary course of business.
"Lender" and "Lenders" means the Persons identified as
"Lenders" and executing this Agreement, together with their successors and
permitted assigns pursuant to SUBSECTION 8.1.
"Lien" means any mortgage, pledge, assignment, security
interest, charge or encumbrance of any kind (including any conditional sale
or other title retention agreement, any lease in the nature thereof, and
any agreement to give any security interest) and any option, trust or other
preferential arrangement having the practical effect of any of the
foregoing.
"Loan" means a loan (which shall be convertible into Preferred
Shares or Common Shares as provided in SECTION 9) made by Lenders to
Company pursuant to SUBSECTION 2.1A in an amount, when added to all other
Loans made pursuant hereto to Company, that shall not exceed Twenty Million
and No/100 Dollars ($20,000,000.00).
"Loan Commitment" means the commitment of a Lender to make
Loans to Company pursuant to SUBSECTION 2.1.
"Loan Documents" means this Agreement, the Notes, the Guaranty,
and the instruments, documents and agreements executed and delivered
pursuant to the foregoing or otherwise executed and delivered in connection
with the Loans, all as amended, supplemented or otherwise modified from
time to time.
"Margin Stock" has the meaning assigned to that term in
Regulation U of the Board of Governors of the Federal Reserve System as in
effect from time to time.
"Material Adverse Effect" means (i) a material adverse effect
upon the business, operations, properties, assets or condition (financial
or otherwise) of Company
and its Subsidiaries taken as a whole or (ii) the impairment of the ability
of Company to perform, or of Lenders to enforce, the Obligations.
"Material Debt" means Indebtedness (other than Indebtedness
referred to in SUBSECTION 7.1) or Contingent Obligations arising in one or
more related or unrelated transactions in an aggregate principal amount
exceeding (i) $1,000,000, in case of Company, (ii) $500,000 in case of one
or more Funded Subsidiaries and (iii) $10,000,000 in case one or more
Subsidiaries.
"Multiemployer Plan" means a "multiemployer plan", as defined
in Section 3(37) of ERISA, to which Company or any of its ERISA Affiliates
is contributing, or ever has contributed, or to which Company or any of its
ERISA Affiliates has, or ever has had, an obligation to contribute.
"Notes" means the promissory notes of Company issued pursuant
to SUBSECTION 2.1B on the Closing Date, in each case substantially in the
form of EXHIBIT I annexed hereto with appropriate insertions, as they may
be amended, supplemented or otherwise modified from time to time.
"Notice of Borrowing" means a notice substantially in the form
of EXHIBIT V annexed hereto delivered by Company to Agent pursuant to
SUBSECTION 2.1B with respect to a proposed borrowing.
"Obligations" means all obligations of every nature of Company
and its respective Subsidiaries from time to time owed to Lenders or any of
them under the Loan Documents, whether for principal, interest, fees,
expenses, indemnification or otherwise.
"Officer's Certificate" means, as applied to any corporation, a
certificate executed on behalf of such corporation by its chairman of the
board (if an officer) or its president or one of its vice presidents or by
its chief financial officer or its treasurer; PROVIDED that every Officer's
Certificate with respect to the compliance with a condition precedent to
the making of the Loan hereunder shall include (i) a statement that the
officer or officers making or giving such Officer's Certificate have read
such condition and any definitions or other provisions contained in this
Agreement relating thereto, (ii) a statement that, in the opinion of the
signers, they have made or have caused to be made such examination or
investigation as is necessary to enable them to express an informed opinion
as to whether or not such condition has been complied with, and (iii) a
statement as to whether, in the opinion of the signers, such condition has
been complied with.
"PBGC" means the Pension Benefit Guaranty Corporation (or any
successor thereto).
"Pension Plan" means any Employee Benefit Plan, other than a
Multiemployer Plan, which is subject to Section 412 of the Internal Revenue
Code or Section 302 of ERISA.
"Permitted Encumbrances" means the following types of Liens:
(i) Liens for taxes, assessments or governmental charges or
claims the payment of which is not, at the time, required by SUBSECTION 5.3
(other than any such Lien imposed pursuant to Section 401(a)(29) or 412(n)
of the Internal Revenue Code or by ERISA);
(ii) statutory Liens of carriers, warehousemen, mechanics and
materialmen and other Liens imposed by law incurred in the ordinary course
of business for sums not yet delinquent or being contested in good faith,
if such reserve or other appropriate provision, if any, as shall be
required by GAAP shall have been made therefor;
(iii) any attachment or judgment Lien not constituting an Event
of Default under SUBSECTION 7.8;
(iv) any leases or subleases of space in any of the Facilities
not interfering in any material respect with the ordinary conduct of the
business of Company or any of its Subsidiaries;
(v) the easements, rights-of-way, restrictions, minor
defects, encroachments or irregularities in title and other similar charges
or encumbrances affecting the Facilities as of the date hereof and any of
such matters which may in the future affect the Facilities without
interfering in any material respect with the development of any Facility as
the case may be, or the ordinary conduct of the business of Company or any
of its Subsidiaries;
(vi) Liens with respect to Facility of a Funded Subsidiary
securing Indebtedness incurred to finance the acquisition of such Facility
on or after the Closing Date, in an amount not to exceed 75% of the
Acquisition Price;
(vii) Liens securing Indebtedness permitted pursuant to
SUBSECTION 6.1(iv); provided that any Lien incurred pursuant to this clause
(vii) shall be limited to all or a part of the property that secured
Indebtedness on the date hereof or property of a Subsidiary that is not a
Funded Subsidiary; and provided further that any Lien incurred with respect
to a Facility after the date hereof that does not secure Indebtedness
pursuant to Company's secured revolving credit agreement shall not secure
Indebtedness in an amount exceeding 75% of appraised value of such
Facility; and
(viii) Liens securing other Indebtedness in respect of any
of the Facilities and approved in writing by Lenders.
"Person" means and includes natural persons, corporations,
limited partnerships, general partnerships, joint stock companies, limited
liability companies, limited liability partnerships, joint ventures,
associations, companies, trusts, banks, trust companies, land trusts,
business trusts or other organizations, whether or not legal entities, and
governments and agencies and political subdivisions thereof.
"Potential Event of Default" means a condition or event that,
after notice or lapse of time or both, would constitute an Event of
Default.
"Preferred Share Amendment" means the amendment to the
Declaration of Trust providing for issuance of preferred shares of
beneficial interest of Company in the form attached hereto as Exhibit IV.
"Preferred Share Approval" means authorization by shareholders
of Company of the Preferred Share Amendment.
"Preferred Shares" means the convertible preferred shares of
beneficial interest of Company having the rights, preferences and
privileges set forth in the Preferred Share Amendment.
"Present Value Payment" means, at any time, in connection with
a prepayment of the Loans pursuant to SECTION 2.4B(ii), the value of all
unpaid fees and interest on the aggregate maximum outstanding amount of the
Loans through October 14, 1999, applying a discount rate of six percent per
annum.
"Pro Rata Share" means, with respect to each Lender, the
percentage of the Loan held by such Lender, as such percentage may be
adjusted by assignments permitted by SUBSECTION 8.1. The initial Pro Rata
Share of each Lender is set forth after its name on the signature pages of
this Agreement.
"REIT" means a real estate investment trust as that term is
defined in the Internal Revenue Code.
"Release" means any spill, emission, leaking, pumping, pouring,
injection, escaping, deposit, disposal, discharge, dispersal, dumping,
leaching or migration of Hazardous Materials into the indoor or outdoor
environment (including, without limitation, the abandonment or disposal of
any barrels, containers or other closed receptacles containing any
Hazardous Materials), or into or out of any Facility, including the
movement of any Hazardous Material through the air, soil, surface water,
groundwater or property.
"Requisite Lenders" means with respect to the Loan, this
Agreement and the other Loan Documents, Lenders having or holding 51% or
more of the outstanding principal balance of the Loan.
"Restricted Junior Payment" means (i) any dividend or other
distribution, direct or indirect, on account of any shares of any class of
stock of Company or any of its Subsidiaries now or hereafter outstanding,
except a dividend payable solely in shares of that class of stock to the
holders of that class, and except for dividends payable by a wholly-owned
corporate Subsidiary to its direct parent, (ii) any redemption, retirement,
sinking fund or similar payment, purchase or other acquisition for value,
direct or indirect, of any shares of any class of stock of Company or any
of its Subsidiaries now or hereafter outstanding, (iii) any payment made to
retire, or to obtain the surrender of, any outstanding warrants, options or
other rights to acquire shares of any class of stock of Company or any of
its Subsidiaries now or hereafter outstanding, (iv) any distribution or
other payment, direct or indirect, on account of any partnership interest
in any of Company's Subsidiaries which is a partnership or joint venture,
except for distributions payable by a Subsidiary of Company which is a
partnership or joint venture to its constituent partners which are wholly-
owned Subsidiaries of Company, PROVIDED THAT such distribution or payment
is in turn delivered to Company, and (v) any payment or prepayment of
principal of, premium, if any, or interest on, or redemption, purchase,
retirement, defeasance (including in-substance or legal defeasance),
sinking fund or similar payment with respect to, any Indebtedness.
"Securities" means any stock, shares, shares of beneficial
interest, partnership interests, voting trust certificates, certificates of
interest or participation in any profit-sharing agreement or arrangement,
options, warrants, bonds, debentures, notes, or other evidences of
indebtedness, secured or unsecured, convertible, subordinated or otherwise,
or in general any instruments commonly known as "securities" or any
certificates of interest, shares or participation in temporary or interim
certificates for the purchase or acquisition of, or any right to subscribe
to, purchase or acquire, any of the foregoing.
"Securities Act" means the Securities Act of 1933, as amended
from time to time, and any successor statute.
"Share Purchase Agreement" means the Share Purchase Agreement
executed and delivered by Company to Lenders on the Closing Date, pursuant
to which Lenders shall acquire Common Shares on the terms set forth
therein, as the same may be amended, supplemented or otherwise modified
from time to time.
"Shareholder Approval" means the authorization by shareholders
of Company of approval of the Amended Declaration of Trust in a form
substantially as set forth in Exhibit VI.
"Subsidiary" means, with respect to any Person, any
corporation, partnership, association, joint venture, limited liability
company, business trust or other business entity of which 50% or more of
the total voting power of shares of stock or other ownership interests
entitled (without regard to the occurrence of any contingency) to vote in
the election of the Person or Persons (whether directors, managers,
trustees or other Persons performing similar functions) having the power to
direct or cause the
direction of the management and policies thereof is at the time owned or
controlled, directly or indirectly, by that Person or one or more of the
other Subsidiaries of that Person or a combination thereof.
"Tax" or "Taxes" means any present or future tax, levy, impost,
duty, charge, fee, deduction or withholding of any nature and whatever
called, by whomsoever, on whomsoever and wherever imposed, levied,
collected, withheld or assessed; PROVIDED that "Tax on the overall net
income" of a Person shall be construed as a reference to a tax imposed by
the jurisdiction in which that Person's principal office is located or in
which that Person is deemed to be doing business on all or part of the net
income, profits or gains of that Person.
"Underwriting Guidelines" means the following criteria:
(A) Facilities must be office or industrial properties, but
may include portfolios of properties in which 80% or more of the square
footage is office or industrial property;
(B) The ratio of (i) the difference between projected net
operating income for the Facility for each of the three years following
acquisition to (ii) the sum of projected interest expense and scheduled
debt principal payments with respect to secured Indebtedness and ground
lease payments used for the acquisition for each such year shall be no less
than 1.00:1.00;
(C) The ratio of (i) the difference between projected net
operating income for the Facility for the three years following acquisition
to (ii) the sum of projected interest expense and scheduled debt principal
payments with respect to secured Indebtedness, ground lease payment and
interest on proceeds of Loans used for the acquisition for such three year
period shall be no less than 1.00:1.00;
(D) Receipt by Agent of (i) an appraisal or other indication
of value from an independent third party indicating value at least equal to
the Acquisition Price of the Facility and (ii) a phase one or other similar
environmental report indicating no significant environmental issues, in
each case two Business Days prior to any borrowing for such Facility
hereunder;
(E) Company or a Subsidiary of Company shall acquire the
Facility.
1.2 ACCOUNTING TERMS; UTILIZATION OF GAAP FOR PURPOSES OF CALCULATIONS
UNDER AGREEMENT. Except as otherwise expressly provided in this Agreement,
all accounting terms not otherwise defined herein shall have the meanings
assigned to them in conformity with GAAP. Financial statements and other
information required to be delivered by Company to Lenders pursuant to
clauses (i), (ii) and (iv) of SUBSECTION 5.1 shall be prepared in
accordance with GAAP as in effect at the time of such preparation.
Calculations in connection with the definitions, covenants and other
provisions of this
Agreement shall utilize accounting principles and policies in conformity
with those used to prepare the financial statements referred to in
SUBSECTION 4.3.
1.3 OTHER DEFINITIONAL PROVISIONS. References to "Sections" and
"subsections" shall be to Sections and subsections, respectively, of this
Agreement unless otherwise specifically provided. Any of the terms defined
in SUBSECTION 1.1 may, unless the context otherwise requires, be used in
the singular or the plural, depending on the reference. The terms
"including," "includes" and "include" shall be deemed to be followed by the
words "without limitation or exclusion."
Section 2. AMOUNT AND TERMS OF LOANS
2.1 MAKING OF LOANS; NOTES.
A. Agreement to Make Loans. Subject to the terms and conditions
of this Agreement and in reliance upon the representations and warranties
of Company set forth herein, each Lender severally agrees, subject to the
limitations set forth below with respect to the maximum amount of Loans to
lend to Company from time to time during the period from the Closing Date
to but excluding the Commitment Termination Date an aggregate amount not
exceeding its Pro Rata Share of the aggregate amount of the Loan
Commitments to be used for the purposes identified in SUBSECTION 2.5. The
original amount of each Lender's Loan Commitment is set forth opposite its
name on the signature pages hereto and the aggregate original amount of the
Loan Commitments is $20,000,000; PROVIDED that the Loan Commitments of
Lenders shall be adjusted to give effect to any assignments of the Loan
Commitments pursuant to SUBSECTION 8.1; provided further that each Lender's
Loan Commitment shall be (i) reduced by the amount of that Lender's Pro
Rata Share of a Loan made pursuant to the provisions hereof and (ii)
reduced to each Lender's Pro Rata Share of $10,000,000 (or such lesser
amount of Loan Commitments that shall be outstanding on March 31, 1998) on
March 31, 1998. Each Lender's Loan Commitment shall expire on the
Commitment Termination Date. Amounts borrowed under this SUBSECTION 2.1A
may be prepaid pursuant to SUBSECTION 2.4, but may not be reborrowed.
B. Borrowing Mechanics. Loans made on any Funding Date shall be
in an aggregate minimum amount of $1,000,000 and multiples of $250,000 in
excess of that amount. Whenever Company desires that Lenders make Loans it
shall deliver to Agent (i) written notice at least ten days in advance of
the proposed Funding Date identifying (a) the nature and location of the
Facility and (b) the proposed amount of the Loans to be made on the
proposed Funding Date and (ii) a Notice of Borrowing no later than 10:00
A.M. (New York City time) at least two Business Days in advance of the
proposed Funding Date. The Notice of Borrowing shall specify (a) the
proposed Funding Date (which shall be a Business Day), (b) the amount of
Loans requested, and (c) a description of the Facility to be acquired, a
statement demonstrating that the acquisition of the Facility is in
compliance with the Underwriting Guidelines.
Company shall notify Agent prior to the funding of any Loans in
the event that any of the matters to which Company is required to certify
in the applicable Notice of Borrowing is no longer true and correct as of
the applicable Funding Date, and the acceptance by Company of the proceeds
of any Loans shall constitute a re-certification by Company, as of the
applicable Funding Date, as to the matters to which Company is required to
certify in the applicable Notice of Borrowing.
C. Disbursement of Funds. All Loans shall be made by Lenders
simultaneously and proportionately to their respective Pro Rata Shares, it
being understood that no Lender shall be responsible for any default by any
other Lender in that other Lender's obligation to make a Loan requested
hereunder nor shall the Commitment of any Lender to make a Loan be
increased or decreased as a result of a default by any other Lender in that
other Lender's obligation to make a Loan requested hereunder. Promptly
after receipt by Agent of a Notice of Borrowing pursuant to SUBSECTION
2.1B, Agent shall notify each Lender of the proposed borrowing. Each
Lender shall make the amount of its Loan available to Agent not later than
12:00 Noon (New York City time) on the applicable Funding Date, in same day
funds in dollars. Upon satisfaction or waiver of the conditions precedent
specified in SECTION 3, Agent shall make the proceeds of such Loans
available to Company on the applicable Funding Date by causing an amount of
same day funds in Dollars equal to the proceeds of all such Loans received
by Agent from Lenders to be credited to the account of Company.
D. Notes. Company shall execute and deliver to each Lender on the
Closing Date a Note substantially in the form of EXHIBIT I annexed hereto
to evidence that Lender's Pro Rata Share of the Loans, in the principal
amount of that Lender's Pro Rata Share of the Loans and with other
appropriate insertions.
2.2 INTEREST ON THE LOANS.
A. Rate of Interest. Subject to SUBSECTION 2.2C, the Loans shall
bear interest on the unpaid principal amount thereof from the date made
through maturity (whether by acceleration or otherwise) at the rate of
twelve percent (12%) per annum. Interest on the Loans shall be compounded
each calendar quarter (or portion thereof) from the Closing Date and while
any portion of the Loans is outstanding at the rate of three percent (3.0%)
per calendar quarter.
B. Interest Payments. Interest on the Loans shall be payable by
Company in arrears on each applicable Interest Payment Date, upon any
prepayment of the Loans and at maturity. Company and Lenders agree that,
with respect to the interest payment to be made on the first Interest
Payment Date (I.E., December 31, 1997), such payment shall include interest
for the period from and after the Closing Date.
C. Default Rate. To the extent permitted by law, any principal or
interest payments on the Loans or any fees or other amounts owed hereunder
not paid when due, in each case whether at stated maturity, by notice of
prepayment, by acceleration or otherwise, shall thereafter bear interest
(including post-petition interest in any
proceeding under the Bankruptcy Code or other applicable bankruptcy laws)
payable on demand at a rate of fourteen percent (14%) per annum until paid.
While bearing interest at such rate, interest on the Loans shall be
compounded each calendar quarter (or portion thereof) from the date such
rate is in effect at the rate of three and one-half percent (3.5%) per
calendar quarter. Payment or acceptance of the increased rates of interest
provided for in this SUBSECTION 2.2C is not a permitted alternative to
timely payment and shall not constitute a waiver of any Event of Default or
otherwise prejudice or limit any rights or remedies of Lenders.
D. Computation of Interest. Interest on the Loans shall be
computed on the basis of a 365-day year, in each case for the actual number
of days elapsed in the period during which it accrues. In computing
interest on the Loans, the Closing Date or the first day of any period
specified in this Agreement shall be included, and the date of payment
shall be excluded.
2.3 LOAN FEES.
Company shall pay to Lenders, as a loan fee, (i) on October 14 of
each year, commencing October 14, 1998, the Loans are outstanding two
percent of the balance of the Loans outstanding on such date and (ii) on
the date of payment or conversion in full of the Loans, one-half of one
percent of the maximum outstanding balance of the Loans over the term of
this Agreement.
2.4 PRINCIPAL PAYMENTS; PREPAYMENT; GENERAL PROVISIONS REGARDING PAYMENTS
A. Maturity Date. The entire outstanding principal balance of the
Loans, and all interest accrued thereon (and all other amounts owing by
Company under this Agreement with respect to the Loans), shall be due and
payable by Company on September 30, 2002.
B. Prepayments.
(i) VOLUNTARY PREPAYMENTS. Company shall have no right to
prepay all or any portion of the principal balance of the Loans prior to
October 14, 1999. From and after October 14, 1999, and subject to the
rights of Lenders under SECTION 9, Company may, upon not less than 30 days'
prior written notice, given to Agent at any time, prepay the Loans in full
on any Business Day. No partial payments of the Loans pursuant to this
SUBSECTION 2.4B(i) are permitted. Notice of prepayment having been given
as aforesaid, the entire principal amount of the Loans shall become due and
payable on the prepayment date specified therein.
(ii) MANDATORY PREPAYMENT. Company shall prepay the Loans in
full, upon, shall, shall a merger or sale of substantially all of the
assets of Company if Agent notifies Company that (a) Lenders have not
consented to such merger or sale and (b) Lenders require such prepayment.
Notice having been given to Company as aforesaid, the entire principal
amount of the Loans, PLUS, if such merger or sale occurs prior to October
14, 1999, the Present Value Payment, shall become due and
payable on the date of such merger or sale. Prepayment of the Loans
prior to October 14, 1999 in the event of a merger or sale of assets of
Company shall be in the Lenders' sole and absolute discretion and the
restrictions set forth in SUBSECTION 6.7 hereof shall be unaffected by the
ability of Lenders to require prepayment.
C. General Provisions Regarding Payments.
(i) MANNER AND TIME OF PAYMENT. All payments by Company of
principal, interest, fees and other Obligations hereunder and under the
Notes shall be made only in Dollars in same day funds, without defense,
setoff or counterclaim, free of any restriction or condition, and delivered
to Agent on behalf of Lenders by wire transfer not later than 1:00 P.M.
(New York time) on the date due; funds received by Agent after that time on
such due date shall be deemed to have been paid by Company on the next
succeeding Business Day. Whenever any payment to be made hereunder shall
be stated to be due on a day that is not a Business Day, such payment shall
be made on the next succeeding Business Day. Agent's wire transfer
instructions are as follows:
Citibank N.Y.
ABA Routing #: 000000000
For the Account of Xxxxxx Xxxxxxx & Co.
Account # 00000000
For Further Credit to Xxxxx Xxxxxxx and
Xxxxx Waterfall, as Agents
Sub-Account #38-30008
Reference: Banyan Strategic Realty Trust
(ii) APPLICATION OF PAYMENTS TO PRINCIPAL AND INTEREST.
Except as otherwise provided herein, all payments in respect of the
principal amount of the Loans shall include payment of accrued interest on
the principal amount being repaid or prepaid, and all such payments shall
be applied to the payment of interest before application to principal.
Notwithstanding the foregoing, if any fees due Lenders hereunder are unpaid
when any payments are received by Agent in respect of Loans, such payments
shall be applied first to payment of such fees, and then to principal and
interest as aforesaid.
(iii) INTEREST RATE LIMITATION. It is the intent of Company
and Lenders in the execution of this Agreement and the other Loan Documents
that none of the terms and provisions of this Agreement or any of the other
Loan Documents shall ever be construed to create a contract for the use,
forbearance or detention of money requiring payment of interest at a rate
in excess of the maximum interest rate permitted to be charged by law. If
Agent or Lenders shall collect any monies which are deemed to constitute
interest which would otherwise increase the effective interest rate on the
Loans to a rate in excess of the maximum interest rate permitted to be
charged by law, all such sums deemed to constitute interest in excess of
such maximum rate shall, at the option of Agent on behalf of Lenders, be
credited to the
payment of sums due hereunder or under the other Loan Documents or
shall be returned to Company.
(iv) APPORTIONMENT OF PAYMENTS. Aggregate principal and
interest payments shall be apportioned and distributed by Agent to each
Lender in accordance with its Pro Rata Share. Lenders hereby acknowledge
and agree that Company's payment to Agent, on behalf of Lenders, of
principal and interest on the Loans, and other amounts payable by Company
under this Agreement, shall satisfy Company's obligation under this
Agreement to make such payments to Lenders, and Company shall have no
liability to Lenders for Agent's failure to apportion and distribute to any
Lender its Pro Rata Share of any such payment.
(v) EFFECT OF REPAYMENT. Loans that are prepaid or repaid
hereunder, whether prior to or after the Commitment Termination Date, may
not be reborrowed by Company.
2.5 USE OF LOAN PROCEEDS. The proceeds of the Loans, shall be used by
Company solely to make acquisitions of additional Facilities, provided that
no Loan may be applied by Company to pay more than 100% of the Acquisition
Price of a Facility. No portion of the proceeds of the Loan shall be used
by Company or any of its Subsidiaries in any manner that might cause the
borrowing or the application of such proceeds to violate Regulation G,
Regulation U, Regulation T or Regulation X of the Board of Governors of the
Federal Reserve System or any other regulation of such Board or to violate
the Exchange Act, in each case as in effect on the date or dates of such
borrowing and such use of proceeds.
2.6 NO DEDUCTIONS. All sums payable by Company under this Agreement and
the other Loan Documents shall be paid free and clear of and (except to the
extent required by law) without any deduction or withholding on account of
any Tax (other than a Tax on the overall net income of any Lender) imposed,
levied, collected, withheld or assessed by or within the United States of
America. If Company or any other Person is required by law to make any
deduction or withholding on account of any such Tax from any sum paid or
payable by Company to Agent or any Lender under any of the Loan Documents:
(a) Company and Lenders shall notify each other and Agent of
any such requirement or any change in any such requirement as soon as
either becomes aware of it;
(b) Company shall pay any such Tax before the date on which
penalties attach thereto, such payment to be made (if the liability to pay
is imposed on Company) for its own account or (if that liability is imposed
on Agent or such Lender) on behalf of and in the name of Agent or such
Lender;
(c) the sum payable by Company in respect of which the
relevant deduction, withholding or payment is required shall be increased
to the extent necessary to ensure that, after the making of that deduction,
withholding or payment, Agent or such Lender, as the case may be, receives
on the due date a net sum equal to what
it would have received had no such deduction, withholding or payment
been required or made; and
(d) within 30 days after paying any sum from which it is
required by law to make any deduction or withholding, and within 30 days
after the due date of payment of any Tax which it is required by clause (b)
above to pay, Company shall deliver to Agent evidence satisfactory to the
other affected parties of such deduction, withholding or payment and of the
remittance thereof to the relevant taxing or other authority;
PROVIDED THAT no such additional amount shall be required to be paid to any
Lender under clause (c) above except to the extent that any change after
the date hereof in any such requirement for a deduction, withholding or
payment as is mentioned therein shall result in an increase in the rate of
such deduction, withholding or payment from that in effect at the date of
this Agreement in respect of payments to such Lender and provided further,
if any additional amount is paid to the Lender pursuant to clause (c), any
such amount that is subsequently paid by a taxing authority as a return of
such deduction, withholding or payment shall upon receipt be paid by such
Lender to Company. In connection with the foregoing provisions of this
SUBSECTION 2.6, (i) each Lender, by executing this Agreement, confirms that
it is a "United States person" within the meaning of Section 7701(a)(30) of
the Internal Revenue Code, and that such Lender is not subject to any
deduction or withholding with respect to any payments to such Lender of
principal, interest or other amounts payable under any of the Loan
Documents, and (ii) each Lender agrees to notify Company if any such Lender
is or becomes subject to any deduction, withholding or payment mentioned in
this SUBSECTION 2.6.
Section 3. CONDITIONS TO LOAN
3.1 DELIVERY OF DOCUMENTS ON CLOSING DATE. The obligations of Lenders to
make Loans on the Closing Date or any later Funding Date are subject to the
prior or concurrent satisfaction of all of the following conditions:
A. Company Documents. On or before the Closing Date, Company
shall deliver or cause to be delivered to Agent the following, each, unless
otherwise noted, dated the Closing Date:
(i) Certified copies of the Declaration of Trust, together
with a good standing certificate from the Secretary of State of the State
of Massachusetts and each other state in which it is qualified as a foreign
trust to do business and, to the extent generally available, a certificate
or other evidence of good standing as to payment of any applicable
franchise or similar taxes from the appropriate taxing authority of each of
such states, each dated a recent date prior to the Closing Date;
(ii) Copies of its Bylaws, certified as of the Closing Date by
its corporate secretary or an assistant secretary;
(iii) Resolutions of its Board of Trustees approving and
authorizing the execution, delivery and performance of this Agreement, the
other Loan Documents to be executed by Company and the Share Purchase
Agreement, certified as of the Closing Date by its corporate secretary or
an assistant secretary as being in full force and effect without modifi-
cation or amendment;
(iv) Signature and incumbency certificates of its officers
executing this Agreement, the other Loan Documents to be executed by
Company and the Share Purchase Agreement;
(v) Executed originals of this Agreement, the Notes (drawn to
the order of each Lender), the other Loan Documents to be executed by
Company and the Share Purchase Agreement;
(vi) Such other documents as Agent reasonably may request.
B. Subsidiary Documents. On or before the Closing Date, Company
shall cause to be delivered to Agent the following documents on behalf of
each of its Subsidiaries:
(i) Certified copies (by the secretary of Company) of the
Certificates or Articles of Incorporation of each corporate Subsidiary of
Company, together with good standing certificates from the respective
states of incorporation and the respective states in which the principal
places of business of each is located and from all states in which
activities of such Subsidiary require them to be qualified and/or licensed
to do business, each dated a recent date prior to the Closing Date;
(ii) Copies of the Bylaws of each corporate Subsidiary of
Company, certified as of the Closing Date by their respective corporate
secretaries or an assistant secretary;
(iii) Certified copies (by the secretary of Company) of the
complete partnership agreement (as amended) of each Subsidiary of Company
which is a partnership or joint venture, together with, with respect to any
limited partnership, a certified certificate of limited partnership and,
with respect to any general partnership or joint venture, a copy of the
recorded statement of partnership (if any), together with any fictitious
business name statements and authorizations from states in which the
activities of such Subsidiaries require them to be qualified and/or
licensed to do business; and
(iv) Such other documents as Agent reasonably may request.
C. Legal Opinions. Agent shall have received (i) originally
executed copies of one or more favorable written opinions of Xxxxxxx &
Xxxxxxxx Ltd. (counsel for Company and its Subsidiaries), Peabody & Xxxxx
(Massachusetts counsel for Company and its subsidiaries), Stroock &
Stroock & Xxxxx (New York counsel for Company and its Subsidiaries), and
Xxxxxx X. Xxxxxxx, Esq. (General Counsel of Company), as Agent may
request, in form and substance reasonably satisfactory to Lenders and their
counsel, dated as of the Closing Date and setting forth substantially the
matters in the forms of opinions set forth in EXHIBIT III annexed hereto
and as to such other matters as Agent may reasonably request, and
(ii) evidence satisfactory to Lenders that Company and its Subsidiaries
have requested Xxxxxxx & Xxxxxxxx Ltd., Massachusetts counsel and New York
counsel to deliver such opinions to Agent. Each of the parties hereto
agrees that in connection with rendering such opinions, counsel may rely
upon the representations of such party set forth herein.
D. Other Actions.
(i) Company shall have paid or cause to have been paid at or
prior to the Closing all of the costs and expenses described in SUBSECTION
8.2 then incurred or accrued with respect to the transaction described in
this Agreement.
(ii) Company and its Subsidiaries shall have obtained all
consents to the transactions contemplated under this Agreement and the
other Loan Documents required under any Contractual Obligation, in form and
substance satisfactory to Lenders.
(iii) Company shall have paid to (1) Lenders, as an initial
commitment fee, $200,000; and (2) Leveraged Equity Management, Inc., as an
advisory fee $800,000.
(iv) As of the Closing Date, the transactions contemplated by
the Share Purchase Agreement shall have been consummated;
(v) As of the Closing Date, Agent shall be satisfied, in its
sole discretion, with all inspections, investigations, studies, tests,
appraisals and reviews which Agent has elected to make with respect to
Company, its Subsidiaries and the Facilities.
3.2 SATISFACTION OF CONDITIONS AND DELIVERY OF DOCUMENTS ON ANY FUNDING
DATE.
A. Officer's Certificate. On the Closing Date and on each Funding
Date the following conditions shall be satisfied and Company shall have
delivered to Agent an Officer's Certificate, in form and substance
satisfactory to Agent, to that effect:
(i) The representations and warranties contained herein and
in the other Loan Documents shall be true, correct and complete in all
material respects on and as of the Funding Date to the same extent as
though made on and as of that date, except to the extent such
representations and warranties specifically relate to an earlier date, in
which case such representations and warranties shall have been true,
correct and complete in all material respects on and as of such earlier
date.
(ii) No event shall have occurred and be continuing as of the
Funding Date, or would result from the consummation of the making of the
Loans thereon, that would constitute an Event of Default or a Potential
Event of Default.
(iii) Company shall have performed in all material respects all
agreements and satisfied all conditions which this Agreement provides shall
be performed or satisfied by it on or before the Funding Date.
(iv) No order, judgment or decree of any court, arbitrator or
governmental authority shall purport to enjoin or restrain any Lender from
making the Loan to be made by it on the Funding Date.
(v) The making of the Loans, on any Funding Date shall not
violate any law including, without limitation, Regulation G, Regulation T,
Regulation U or Regulation X of the Board of Governors of the Federal
Reserve System.
B. No Material Adverse Effect. Since December 31, 1996 (except as
disclosed in Company's Quarterly Reports on Form 10-Q for the quarters
ended March 31, 1997 and June 30, 1997), no Material Adverse Effect shall
have occurred prior to the Funding Date.
Section 4. COMPANY'S REPRESENTATIONS AND WARRANTIES
In order to induce Lenders to enter into this Agreement and to
make the Loan hereunder, Company represents and warrants to each Lender, on
the date of this Agreement and on the Closing Date, that the following
statements are true, correct and complete:
4.1 ORGANIZATION, POWERS, QUALIFICATION, GOOD STANDING, BUSINESS AND
SUBSIDIARIES.
A. Organization and Powers. Company is a business trust duly
organized, validly existing and in good standing under the laws of the
Commonwealth of Massachusetts. Company has all requisite corporate power
and authority to own and operate its properties, to carry on its business
as now conducted and as proposed to be conducted, to enter into the Share
Purchase Agreement and the Loan Documents to be executed by Company and to
carry out the transactions contemplated thereby.
B. Qualification and Good Standing. Company is qualified to do
business and in good standing in every jurisdiction where its assets are
located and wherever necessary to carry out its business and operations,
except in jurisdictions where the failure to be so qualified or in good
standing has not had and will not have a Material Adverse Effect.
C. Conduct of Business. Company and its Subsidiaries are engaged
only in and will engage only in the businesses permitted to be engaged in
pursuant to SUBSECTION 6.13.
D. Subsidiaries. All of the Subsidiaries of Company as of the
Closing Date are identified in SCHEDULE 4.1 annexed hereto. The capital
stock of each of the corporate Subsidiaries of Company identified in
SCHEDULE 4.1 annexed hereto is duly authorized, validly issued, fully paid
and nonassessable and none of such capital stock constitutes Margin Stock.
Each of the corporate Subsidiaries of Company identified in SCHEDULE 4.1
annexed hereto is a corporation duly organized, validly existing and in
good standing under the laws
of its respective jurisdiction of incorporation set forth therein, has all
requisite corporate power and authority to own and operate its property and
to carry on its business as now conducted and as proposed to be conducted,
and is qualified to do business and in good standing in every jurisdiction
where its assets are located and wherever necessary to carry out its
business and operations, in each case except where failure to be so
qualified or in good standing or a lack of such corporate power and au-
thority has not had a Material Adverse Effect. Each of the Subsidiaries of
Company identified in SCHEDULE 4.1 annexed hereto which is a trust, limited
liability company, partnership or joint venture is duly formed, validly
existing and in good standing under the laws of its respective jurisdiction
of organization set forth therein, has all requisite power and authority to
own and operate its property and to carry on its business as now conducted
and as proposed to be conducted, and is qualified to do business and in
good standing in every jurisdiction where its assets are located and
wherever necessary to carry out its business and operations, in each case
except where failure to be so qualified or in good standing or a lack of
such partnership power and authority has not had a Material Adverse Effect.
SCHEDULE 4.1 annexed hereto correctly sets forth, as of the Closing Date,
the ownership interest of Company and each of its Subsidiaries in each of
the Subsidiaries of Company identified therein.
E. Capitalization. The authorized capital of the Company consists
solely of an unlimited number of Common Shares, of which 11,017,760 are
issued and outstanding, 2,000,000 are reserved for issuance under Company's
dividend reinvestment program and 1,000,000 are reserved for issuance upon
the exercise of outstanding options for Common Shares. All outstanding
Common Shares were duly authorized, are fully paid and nonassessable, and
were validly issued in accordance with federal and state securities laws.
Except as contemplated herein and as described in Company's
Annual Report on Form 10-K for the Fiscal Year ended December 31, 1996 with
respect to compensation payable to Xxxxxxx X. Xxxxxx, president of Company
and Company's existing stock option plan, no options, calls, warrants,
conversion privileges, preemptive rights, rights of first refusal or other
commitments or rights, of any character whatsoever, are presently
outstanding or in existence with respect to the purchase or other
acquisition of any of the authorized but unissued Common Shares or any
other equity Security of Company.
4.2 AUTHORIZATION OF BORROWING, ETC.
A. Authorization. The execution, delivery and performance of the
Share Purchase Agreement and the Loan Documents to be executed by Company
have been duly authorized by all necessary action on the part of each of
the respective entities. The Board of Trustees has taken all necessary
action to exempt the ownership by each Lender of Common Shares and
Preferred Shares issued and issuable pursuant to the Share Purchase
Agreement and this Agreement from the Limit, as that term is defined in
Section 7.12.3 of the Declaration of Trust.
B. No Conflict. The execution, delivery and performance by
Company of the Share Purchase Agreement, and the execution, delivery and
performance of the Loan
Documents by Company and its respective Subsidiaries, as applicable, and
the consummation of the transactions contemplated thereby, do not and will
not (i) violate any provision of any law or any governmental rule or
regulation applicable to Company or any of its Subsidiaries (as the case
may be), the Declaration of Trust or Bylaws of Company or any of its
corporate Subsidiaries, the partnership agreements of any of its
Subsidiaries which are partnerships or joint ventures, or any order,
judgment or decree of any court or other agency of government binding on
Company or any of its Subsidiaries (as applicable), (ii) conflict with,
result in a breach of or constitute (with due notice or lapse of time or
both) a default under any Contractual Obligation of Company or any of its
Subsidiaries (as the case may be), (iii) result in or require the creation
or imposition of any Lien upon any of the properties or assets of Company
or any of its Subsidiaries (other than Liens in favor of Lenders), or
(iv) require any approval of shareholders or any approval or consent of any
Person under any Contractual Obligation of Company or any of its
Subsidiaries, except for such approvals or consents which will be obtained
on or before the Closing Date and disclosed in writing to Lenders.
C. Governmental Consents. To the best knowledge of Company, the
execution, delivery and performance by Company of the Share Purchase
Agreement, and the execution, delivery and performance of the Loan
Documents by Company and its respective Subsidiaries, as applicable, and
the consummation of the transactions contemplated thereby, do not and will
not require any registration with, consent or approval of, or notice to, or
other action to, with or by, any federal, state or other governmental
authority or regulatory body, except for any of the foregoing which will be
made or obtained by Company on or before the Closing Date, other than
approval by NASDAQ of the listing of the Common Shares issued pursuant to
the Share Purchase Agreement, and of Preferred Shares or Common Shares
issuable upon conversion of the Loans and Preferred Shares.
D. Binding Obligation. The Share Purchase Agreement has been duly
executed and delivered by Company and is the legally valid and binding
obligation of Company, enforceable against Company in accordance with its
terms, except as may be limited by bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium or similar laws relating to or
limiting creditors' rights generally or by equitable principles relating to
enforceability. Each of the Loan Documents has been duly executed and
delivered by Company and its respective Subsidiaries, as applicable, and is
the legally valid and binding obligation of Company and/or its respective
Subsidiaries (as the case may be) enforceable against Company and/or its
respective Subsidiaries (as the case may be) in accordance with its
respective terms, except as may be limited by bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium or similar laws relating
to or limiting creditors' rights generally or by equitable principles
relating to enforceability.
4.3 FINANCIAL CONDITION. Company has heretofore delivered to Lenders the
following financial statements and information: (i) the audited
consolidated balance sheets of Company and its Subsidiaries at December 31,
1996 and the related consolidated statements of income and expenses,
shareholders' equity and cash flows of Company and its Subsidiaries for the
Fiscal Year ended December 31, 1996, and (ii) the unaudited consolidated
balance sheets of Company and its Subsidiaries at June 30, 1997 and the
related unaudited consolidated statements of income, shareholders' equity
and cash flows of Company and its Subsidiaries for the six months ended
June 30, 1997. All such statements were prepared in conformity with GAAP
and fairly present the financial condition (on a consolidated basis) of
Company and its Subsidiaries at the respective dates thereof and the
results of operations and cash flows (on a consolidated basis) of Company
and its Subsidiaries at the respective dates thereof, subject, in the case
of any such unaudited financial statements, to changes resulting from audit
and normal year-end adjustments. As of the Closing Date, Company does not
have any Contingent Obligation, contingent liability or liability for
taxes, long-term lease or unusual forward or long-term commitment that is
not reflected in the financial statements identified in clauses (i) and
(ii) above or the notes thereto which would have a Material Adverse Effect
on Company or any of its Subsidiaries.
4.4 NO MATERIAL ADVERSE EFFECT; NO RESTRICTED JUNIOR PAYMENTS. Since
December 31, 1996 (except as disclosed in Company's Quarterly Reports on
Form 10-Q for the quarters ended March 31, 1997 and June 30, 1997), (i) no
event or change has occurred that has caused or evidences, either in any
case or in the aggregate, a Material Adverse Effect, and (ii) neither
Company nor any of its Subsidiaries has directly or indirectly declared,
ordered, paid or made, or set apart any sum or property for, any Restricted
Junior Payment or agreed to do so except as permitted by SUBSECTION 6.5.
4.5 TITLE TO PROPERTIES; LIENS. Company and its Subsidiaries have
(i) good, marketable and legal title to (in the case of fee interests in
real property), (ii) valid leasehold interests in (in the case of leasehold
interests in real or personal property), or (iii) good title to (in the
case of all other personal property), all of their respective properties
and assets reflected in the financial statements referred to in SUBSECTION
4.3, in each case except for assets disposed of since the date of such
financial statements in the ordinary course of business and disclosed in
writing to Lenders or as otherwise permitted under SUBSECTION 6.7. Except
as permitted by this Agreement, all such properties and assets are free and
clear of Liens. Each Facility as of the Closing Date is described on
SCHEDULE 4.5.
4.6 LITIGATION; ADVERSE FACTS. Except as set forth in SCHEDULE 4.6
annexed hereto, there are no actions, suits, proceedings, arbitrations or
governmental investigations (whether or not purportedly on behalf of
Company or any of its Subsidiaries) at law or in equity or before or by any
federal, state, municipal or other governmental department, commission,
board, bureau, agency or instrumentality, domestic or foreign, pending or,
to the knowledge of Company, threatened against or affecting Company or any
of its Subsidiaries or any property of Company or any of its Subsidiaries
that, individually or in the aggregate, could reasonably be expected to
result in a Material Adverse Effect. Neither Company nor any of its
Subsidiaries is (i) in violation of any applicable laws that, individually
or in the aggregate, could reasonably be expected to result in a Material
Adverse Effect or (ii) subject to or in default with respect to any final
judgments, writs, injunctions, decrees, rules or regulations of any court
or any federal, state, municipal or other governmental department,
commission, board, bureau, agency or instrumentality, domestic or foreign,
that, individually or in the aggregate, could reasonably be expected to
result in a Material Adverse Effect.
4.7 PAYMENT OF TAXES. Except to the extent permitted by SUBSECTION 5.3,
all tax returns and reports of Company and its Subsidiaries required to be
filed by any of them have been timely filed, and all taxes, assessments,
fees and other governmental charges upon Company and its Subsidiaries and
upon their respective properties, assets, income, businesses and franchises
which are due and payable have been paid when due and payable except for
those that are being contested in good faith by appropriate proceedings
promptly instituted and diligently conducted for which such reserve or
other appropriate provision, if any, required in conformity with GAAP has
been made. Company knows of no proposed tax assessment against Company or
any of its Subsidiaries which is not being actively contested by Company or
such Subsidiary in good faith and by appropriate proceedings; PROVIDED THAT
such reserves or other appropriate provisions, if any, as shall be required
in conformity with GAAP shall have been made or provided therefor.
4.8 PERFORMANCE OF AGREEMENTS; MATERIALLY ADVERSE AGREEMENTS.
A. Neither Company nor any of its Subsidiaries is in default in
the performance, observance or fulfillment of any of the obligations,
covenants or conditions contained in any of its Contractual Obligations,
and no condition exists that as of the Closing Date, with the giving of
notice or the lapse of time or both, would constitute such a default,
except where the consequences, direct or indirect, of such default or
defaults, if any, would not have a Material Adverse Effect.
B. Neither Company nor any of its Subsidiaries is a party to or is
otherwise subject to any agreements or instruments or any charter or other
internal restrictions which, individually or in the aggregate, could
reasonably be expected to result in a Material Adverse Effect.
4.9 GOVERNMENTAL REGULATION. Neither Company nor any of its Subsidiaries
is subject to regulation under the Public Utility Holding Company Act of
1935, the Federal Power Act, the Interstate Commerce Act or the Investment
Company Act of 1940 or under any other federal or state statute or
regulation which may limit its ability to incur Indebtedness or which may
otherwise render all or any portion of the Obligations unenforceable.
4.10 SECURITIES ACTIVITIES. Neither Company nor any of its Subsidiaries
is engaged principally, or as one of its important activities, in the
business of extending credit for the purpose of purchasing or carrying any
Margin Stock, and not more than 25% of the value of the assets of Company
(or of Company and its Subsidiaries on a consolidated basis) consists of
Margin Stock.
4.11 EMPLOYEE BENEFIT PLANS.
A. Company and each of its ERISA Affiliates are in
compliance with all applicable provisions and requirements of ERISA and the
regulations and published interpretations thereunder with respect to each
Employee Benefit Plan, and have performed all their obligations under each
Employee Benefit Plan.
B. No ERISA Event has occurred or is reasonably expected to
occur.
C. Except to the extent required under Section 4980B of the
Internal Revenue Code, no Employee Benefit Plan provides health or welfare
benefits (through the purchase of insurance or otherwise) for any retired
or former employees of Company or any of its ERISA Affiliates.
D. As of the most recent valuation date for any Pension
Plan, there are no unfunded benefit liabilities (as defined in Section
4001(a)(18) of ERISA).
4.12 CERTAIN FEES. Other than the fee to Xxxxxxxxxx Xxxx & Xxxx, Inc. for
financial advisory services and the fee to Leveraged Equity Management,
Inc., described in SUBSECTION 3.1D(iii) above (the payment of which is
Company's obligation on the Closing Date from the proceeds of the Loan), no
broker's or finder's fee or commission will be payable with respect to this
Agreement or any of the transactions contemplated hereby, and Company
hereby indemnifies Lenders against, and agrees that it will hold Lenders
harmless from, any claim, demand or liability for any such broker's or
finder's fees alleged to have been incurred in connection herewith or
therewith and any expenses (including reasonable fees, expenses and
disbursements of counsel) arising in connection with any such claim, demand
or liability. Lenders hereby represent and warrant to Company that, other
than with respect to Leveraged Equity Management, Inc., Lenders have not
entered into any agreement with or incurred any obligation to any entity
which might result in the obligation to pay a broker's or finder's fee or
commission, and Lenders agree to indemnify Company against, and hold
Company harmless from, any claim, demand or liability (including reasonable
fees, expenses and disbursements of counsel) arising from a breach of such
representation and warranty.
4.13 ENVIRONMENTAL PROTECTION. Except as set forth in SCHEDULE 4.13
annexed hereto Company and each of its Subsidiaries are in material
compliance with all applicable Environmental Laws.
4.14 EMPLOYEE MATTERS. There is no strike or work stoppage in existence
or threatened involving Company or any of its Subsidiaries that could
reasonably be expected to have a Material Adverse Effect.
4.15 INSURANCE. SCHEDULE 4.15 annexed hereto sets forth a complete and
accurate list of all policies of insurance in effect as of the Closing Date
for Company and its Subsidiaries. No notice of cancellation has been
received with respect to such policies and Company and its Subsidiaries are
in compliance with all conditions contained in such policies.
4.16 DISCLOSURE. The projections and pro forma financial information
contained in any materials furnished to Lenders by or on behalf of Company
or any of its Subsidiaries are based upon good faith estimates and
assumptions believed by Company to be reasonable at the time made, provided
that no assurance can be given that the projected results will be realized
or with respect to the activity of Company and its Subsidiaries to achieve
the projected results, it being recognized by Lenders that such projections
as to future events are not to be viewed as facts and that actual results
during the period or periods covered
by any such projections may differ, in any material manner, from the
projected results. There are no facts known (or which should upon the
reasonable exercise of diligence be known) to Company (other than matters
of a general economic nature) that, individually or in the aggregate, could
reasonably be expected to result in a Material Adverse Effect and that have
not been disclosed herein or in such other documents, certificates and
statements furnished to Lenders for use in connection with the transactions
contemplated hereby.
4.17 REIT STATUS. Company has, at all times, since 1986, qualified as a
REIT under the provisions of the Internal Revenue Code. Each Subsidiary
that is a corporation is a qualified REIT subsidiary, as that term is
defined in the Internal Revenue Code.
4.18 REGISTRATION RIGHTS. Except as contemplated by the Share Purchase
Agreement, Company's existing stock option plan and an employment agreement
with Xxxxxxx X. Xxxxxx, Company is not under any obligation to "register"
any of its presently outstanding securities or any of its securities which
may hereafter be issued. For the purposes of the foregoing, the term
"register" refers to a registration effected by filing a registration
statement in compliance with the Securities Act of 1933, or the securities
laws of any state.
4.19 SHAREHOLDER AGREEMENTS. Except as required by this Agreement, there
are no agreements or arrangements between Company and any of Company's
shareholders, or to Company's knowledge, between or among any of Company's
shareholders, which grant special rights with respect to any shares of
Company's equity security or subject to provisions of the Declaration of
Trust which affect any shareholder's ability or right freely to alienate or
vote such shares.
4.20 STATUS OF ADVISOR UNDER DECLARATION OF TRUST. No Advisor, as that
term is defined in Section 1.5 of the Declaration of Trust, is currently
acting in the capacity contemplated by the Declaration of Trust, and there
are currently no Class B Trustees (as that term is defined in Section 1.5
of the Declaration of Trust).
Section 5. COMPANY'S AFFIRMATIVE COVENANTS
Company covenants and agrees that, until termination of this
Agreement and payment in full of the Loans, unless Agent, on behalf of
Lenders, shall otherwise give prior written consent, Company shall perform,
and shall cause each of its Subsidiaries to perform, all covenants in this
SECTION 5.
5.1 FINANCIAL STATEMENTS AND OTHER REPORTS. Company will maintain a
system of accounting established and administered in accordance with sound
business practices to permit preparation of financial statements (including
those relating to its Subsidiaries) in conformity with GAAP. Company will
deliver to Agent:
(i) QUARTERLY FINANCIALS: within five days after made
available to the public, the Quarterly Report on Form 10-Q of Company and
its Subsidiaries for each calendar quarter (other than for the final
quarter of any Fiscal Year, as Company will
file the Annual Report on Form 10-K as provided in SUBSECTION 5.1(ii)
below for the year in which such final quarter occurs);
(ii) YEAR-END FINANCIALS: (a) within five days after made
available to the public, the Annual Report on Form 10-K of Company and its
Subsidiaries for such Fiscal Year, and (b) within five days after delivered
to shareholders, the Annual Report to Shareholders for such Fiscal Year,
and (c) with respect to the consolidated financial statements contained in
the Form 10-K, a report thereon from independent certified public
accountants of recognized national standing selected by Company and satis-
factory to Lenders (and Lenders hereby agree that Ernst & Young LLP,
Company's present certified public accountants, is satisfactory), which
report shall express no doubts about the ability of Company and its
Subsidiaries to continue as a going concern, and shall state that such
consolidated financial statements fairly present the consolidated financial
position of Company and its Subsidiaries at the dates indicated and the
results of their operations and their cash flows for the periods indicated
in conformity with GAAP applied on a basis consistent with prior years
(except as otherwise disclosed in such financial statements) and that the
examination by such accountants in connection with such consolidated
financial statements has been made in accordance with generally accepted
auditing standards, and which report shall be provided concurrently with
the report provided pursuant to CLAUSE (a) hereof;
(iii) OFFICER'S AND COMPLIANCE CERTIFICATES: together with
each delivery of financial statements of Company and its Subsidiaries
pursuant to subdivisions (i) and (ii) above, an Officer's Certificate of
Company stating that the signers have reviewed the terms of this Agreement
and have made, or caused to be made under their supervision, a review in
reasonable detail of the transactions and condition of Company and its
Subsidiaries during the accounting period covered by such financial
statements and that such review has not disclosed the existence during or
at the end of such accounting period, and that the signers do not have
knowledge of the existence as at the date of such Officer's Certificate, of
any condition or event that constitutes an Event of Default or Potential
Event of Default, or, if any such condition or event existed or exists,
specifying the nature and period of existence thereof and what action
Company has taken, is taking and proposes to take with respect thereto; and
together with each delivery of the financial statements of Company and its
Subsidiaries pursuant to SUBDIVISION (ii) above, a Compliance Certificate
demonstrating in reasonable detail compliance during and at the end of the
applicable accounting periods with the restrictions contained in SECTION 6;
(iv) FINANCIAL PLANS AND MONTHLY FINANCIAL STATEMENTS PREPARED
FOR MANAGEMENT: as soon as practicable following preparation and
distribution thereof to management, (1) annually, a consolidated plan and
financial forecast, prepared on a cash basis, for such Fiscal Year,
including without limitation (a) forecasted consolidated balance sheets and
forecasted consolidated operating results of Company and its Subsidiaries
for such Fiscal Year and the two succeeding Fiscal Years, (b) forecasted
consolidated operating results of Company and its Subsidiaries
for each quarter of each such Fiscal Year, together with an
explanation of the assumptions on which such forecasts are based and
(c) such other information and projections as Lenders reasonably may
request and (2) monthly, consolidated financial statements for Company and
Subsidiaries, in each case in the form used for Company's internal purposes
(Lenders acknowledge that Company has no obligation to provide monthly
consolidated financial statements unless and until such statements are
completed for Company's internal purposes);
(v) ACCOUNTANTS' REPORTS: promptly upon receipt thereof
(unless restricted by applicable professional standards), copies of any
reports which may be submitted to Company by independent certified public
accountants in connection with each annual, interim or special audit of the
financial statements of Company and its Subsidiaries made by such accoun-
tants, including, without limitation, any comment letter submitted by such
accountants to management in connection with their annual audit;
(vi) SEC FILINGS AND PRESS RELEASES: within five days after
their becoming available to the public, copies of (a) all financial
statements, reports, notices and proxy statements sent or made available
generally by Company to its security holders or by any Subsidiary of
Company to its security holders other than Company or another Subsidiary of
Company, (b) all regular and periodic reports and all registration
statements (other than on Form S-8 or a similar form) and prospectuses, if
any, filed by Company or any of its Subsidiaries with any securities
exchange or with the Securities and Exchange Commission or any governmental
or private regulatory authority, and (c) all press releases and other
statements made available generally by Company or any of its Subsidiaries
to the public concerning material developments in the business of Company
or any of its Subsidiaries;
(vii) EVENTS OF DEFAULT, ETC.: promptly upon Company obtaining
knowledge (a) of any condition or event that constitutes an Event of
Default or Potential Event of Default, (b) that any Person has given any
notice to Company or any of its Subsidiaries or taken any other action with
respect to a claimed default or event or condition of the type referred to
in SUBSECTION 7.2, (c) of any condition or event that would be required to
be disclosed in a Current Report on Form 8-K filed by Company with the
Securities and Exchange Commission (Items 1, 2, 4 and 6 of such Form as in
effect on the date hereof) if Company were required to file such reports
under the Exchange Act, or (d) of the occurrence of any event or change
that has caused or evidences, either in any case or in the aggregate, a
Material Adverse Effect, Company shall notify Agent of such matter,
specifying the nature and period of existence of such condition, event or
change, or specifying the notice given or action taken by any such Person
and the nature of such claimed Event of Default, Potential Event of
Default, default, event or condition, and what action Company has taken, is
taking and proposes to take with respect thereto;
(viii) LITIGATION OR OTHER PROCEEDINGS: promptly upon any
officer of Company obtaining knowledge of (X) the institution of, or non-
frivolous threat of, any action,
suit, proceeding (whether administrative, judicial or otherwise),
governmental investigation or arbitration against or affecting Company or
any of its Subsidiaries or any property of Company or any of its
Subsidiaries (collectively, "Proceedings") not previously disclosed in
writing by Company to Agent or (Y) any material development in any
Proceeding that, in any case:
(1) if adversely determined, has a reasonable
possibility of giving rise to a Material Adverse Effect; or
(2) seeks to enjoin or otherwise prevent the
consummation of, or to recover any damages or obtain relief as a result of,
the transactions contemplated hereby;
written notice thereof together with such other information as may be
reasonably available to Company to enable Agent and its counsel to evaluate
such matters;
(ix) ERISA EVENTS: promptly upon becoming aware of the occur-
rence of or forthcoming occurrence of any ERISA Event, a written
notice specifying the nature thereof, what action Company or any of its
ERISA Affiliates has taken, is taking or proposes to take with respect
thereto and, when known, any action taken or threatened by the Internal
Revenue Service, the Department of Labor or the PBGC with respect thereto;
(x) ERISA NOTICES: with reasonable promptness, copies of
(a) each Schedule B (Actuarial Information) to the annual report (Form 5500
Series) filed by Company or any of its ERISA Affiliates with the Internal
Revenue Service with respect to each Pension Plan; (b) all notices received
by Company or any of its ERISA Affiliates from a Multiemployer Plan sponsor
concerning an ERISA Event; and (c) such other documents or governmental
reports or filings relating to any Employee Benefit Plan as Agent shall
reasonably request;
(xi) INSURANCE: as soon as practicable, and in any event
within 30 days after the date of renewal of any material insurance
policies, a report in form and substance satisfactory to Agent outlining
all material insurance coverage maintained as of the date of such report by
Company and its Subsidiaries and all material insurance coverage planned to
be maintained by Company and its Subsidiaries in the immediately succeeding
policy period;
(xii) ENVIRONMENTAL AUDITS AND REPORTS: as soon as practicable
following receipt thereof, copies of all environmental audits and reports,
whether prepared by personnel of Company or any of its Subsidiaries or by
independent consultants, or which relate to an Environmental Claim which
could result in a Material Adverse Effect;
(xiii) BOARD OF TRUSTEES: with reasonable promptness,
written notice of any change in the Board of Trustees of Company or any of
its Subsidiaries; and
(xiv) OTHER INFORMATION: with reasonable promptness, such
other information and data with respect to Company or any of its Subsidi-
aries, the Facilities as from time to time may be reasonably requested by
Agent.
5.2 CORPORATE AND PARTNERSHIP EXISTENCE, ETC.; STATUS AS REAL ESTATE
INVESTMENT TRUST. Except as permitted under SUBSECTION 6.7, Company will,
and will cause each of its Subsidiaries to, at all times preserve and keep
in full force and effect its trust, corporate and partnership existence (as
the case may be) and all rights and franchises material to its business.
Company will at all times maintain its status as a REIT under the Internal
Revenue Code.
5.3 PAYMENT OF TAXES AND CLAIMS; TAX CONSOLIDATION. Company will, and
will cause each of its Subsidiaries to, pay all taxes, assessments and
other governmental charges imposed upon it or any of its properties or
assets or in respect of any of its income, businesses or franchises before
any penalty accrues thereon, and all claims (including, without limitation,
claims for labor, services, materials and supplies) for sums that have
become due and payable and that by law have or may become a Lien upon any
of its properties or assets, prior to the time when any penalty or fine
shall be incurred with respect thereto; PROVIDED THAT no such charge or
claim need be paid if being contested in good faith by appropriate
proceedings promptly instituted and diligently conducted and if such
reserve or other appropriate provision, if any, as shall be required in
conformity with GAAP shall have been made therefor. Company will not, nor
will it permit any of its Subsidiaries to, file or consent to the filing of
any consolidated income tax return with any Person (other than Company or
any of its Subsidiaries).
5.4 MAINTENANCE AND DEVELOPMENT OF PROPERTIES; INSURANCE.
A. With respect to improved properties owned by Company or its
Subsidiaries, Company will, and will cause each of its Subsidiaries to,
maintain or cause to be maintained in good repair, working order and
condition, ordinary wear and tear excepted, all such properties, and from
time to time will make or cause to be made all appropriate repairs,
renewals and replacements thereof.
B. Company will maintain or cause to be maintained the insurance
described on SCHEDULE 4.15 annexed hereto, and such additional insurance as
appropriate under the circumstances in Company's reasonable judgment, with
respect to its properties and business and the properties and businesses of
its Subsidiaries. Certified copies of all such policies, and endorsements
and renewals thereof, shall be delivered to Lenders.
C. Company will comply, and will cause its Subsidiaries to comply,
with all of its (or their) respective obligations under all leases,
licenses, agreements and contracts relating to the Facilities, to which the
Company and/or its Subsidiaries (as the case may be) are a party,
including, without limitation, all ground leases and master leases under
which a Subsidiary is the ground lessee or master lessee. Without limiting
the generality of foregoing, Company shall cause to be paid when due all
rents and other payments due under any ground lease or master lease under
which a Subsidiary is the lessee, and none of the
Subsidiaries shall cancel, terminate, abandon or surrender, or modify or
amend in any material respect, any such ground lease or master lease, or
take any action which would have the effect of impairing or limiting such
Subsidiary's rights as the ground lessee or the master lessee thereunder;
provided, however, that this SUBSECTION 5.4C shall not prohibit the
acquisition by Company or a Subsidiary (subject to compliance with other
provisions of this Agreement) of a fee interest in any Facility with
respect to which Company or a Subsidiary is a ground lessee.
5.5 INSPECTION; LENDER MEETINGS. Company shall, and shall cause each of
its Subsidiaries to, permit any authorized representatives designated by
Lenders to visit and make reasonable inspections of any of the Facilities
of Company or any of its Subsidiaries, including its and their financial
and accounting records, and to make copies and take extracts therefrom, and
to discuss its and their affairs, finances and accounts with its and their
officers and independent public accountants (provided that Company may, if
it so chooses, be present at or participate in any such discussion), all
upon reasonable notice and at such reasonable times during normal business
hours and as often as may be reasonably requested, and in a manner that
will not unreasonably disrupt operations at the Facilities. Without in any
way limiting the foregoing, Company will, upon the request of Agent,
participate in periodic meetings with Lenders to be held at Company's
corporate offices (or such other location as may be agreed to by Company
and Agent) at such times as may be agreed to by Company and Agent.
5.6 COMPLIANCE WITH LAWS, ETC. Company shall, and shall cause each of
its Subsidiaries to, comply with the requirements of all applicable laws,
rules, regulations and orders of any governmental authority, noncompliance
with which could reasonably be expected to cause a Material Adverse Effect.
5.7 ENVIRONMENTAL DISCLOSURE.
A. Company shall, and shall cause each of its Subsidiaries to,
exercise due diligence in order to comply and cause, to the extent possible
(i) all tenants under any leases or occupancy agreements affecting any
portion of the Facilities and (ii) all other Persons on or occupying such
property, to comply with all applicable Environmental Laws.
B. Company shall promptly advise Agent in writing and in
reasonable detail, with respect to any Facility, of (i) any Release of any
Hazardous Materials required to be reported to any federal, state or local
governmental or regulatory agency under any applicable Environmental Laws,
(ii) any and all written communications with respect to any Environmental
Claims that have a reasonable possibility of giving rise to a Material
Adverse Effect or with respect to any Release described in the preceding
clause (i), (iii) any remedial action taken by Company or any other Person
in response to (x) any Hazardous Materials on, under or about any Facility,
the existence of which has a reasonable possibility of resulting in an
Environmental Claim having a Material Adverse Effect, or (y) any
Environmental Claim that could have a reasonable probability of causing or
resulting in a Material Adverse Effect, (iv) Company's discovery of any
occurrence or condition on any real property adjoining or in the vicinity
of any Facility that could cause such Facility or any
part thereof to be subject to any restrictions on the ownership, occupancy,
transferability or use thereof under any applicable Environmental Laws, and
(v) any request for information from any governmental agency that suggests
such agency is investigating whether Company or any of its Subsidiaries may
be potentially responsible for a Release of Hazardous Materials.
C. Company shall, at its own expense, provide copies of such
documents or information in the possession or control of Company as Agent
may reasonably request in relation to any matters disclosed pursuant to
this SUBSECTION 5.7.
5.8 COMPANY'S REMEDIAL ACTION REGARDING HAZARDOUS MATERIALS.
Company shall promptly take, and shall cause each of its Subsidiaries
promptly to take, any and necessary remedial action in connection with the
presence, storage, use, disposal, transportation or Release of any
Hazardous Materials on, under or about any of its or their properties in
order to comply with all applicable Environmental Laws and Governmental
Authorizations. In the event Company or any of its Subsidiaries undertakes
any remedial action with respect to any Hazardous Materials, Company or
such Subsidiary shall conduct and complete such remedial action in
compliance with all applicable Environmental Laws, and in accordance with
the policies, orders and directives of all federal, state and local
governmental authorities except when, and only to the extent that,
Company's or such Subsidiary's liability for such presence, storage, use,
disposal, transportation or discharge of any Hazardous Materials is being
contested in good faith by Company or such Subsidiary.
5.9 FURTHER ASSURANCES. Company shall, and shall cause its Funded
Subsidiaries to, from time to time, execute such documents, and reports as
Agent at any time may reasonably request to evidence or otherwise implement
the guaranties for repayment of the Obligations provided for in the Loan
Documents. On or prior to a Funding Date of a Loan, the proceeds of which
are made available by Company to a Funded Subsidiary to purchase a
Facility, Company shall cause such Funded Subsidiary to guaranty the
Obligations (such guaranty to be limited to the amount of the Loan Proceeds
received by such Funded Subsidiary, PLUS interest accrued as specified
herein and expenses of Lenders pursuant to SUBSECTION 8.2). The
documentation for such guaranty shall be substantially in the form attached
hereto as Exhibit VI.
5.10 SHAREHOLDER APPROVALS. As soon as practicable prior to Company's
next annual meeting, Company shall convene a special meeting of its
shareholders for the purpose of obtaining Shareholder Approval, Preferred
Share Approval and Conversion Approval. If Shareholder Approval, Preferred
Share Approval, Conversion Approval, or any combination thereof is not
obtained at any such meeting or subsequent meeting, Company shall
nonetheless convene subsequent meetings of its shareholders (which may be
Company's annual meeting in 1998 and 1999) for the purpose of obtaining
such approval.
5.11 DECLARATION OF TRUST AND CAPITAL STRUCTURE OF COMPANY. Following
Shareholder Approval, the Declaration of Trust shall be substantially in a
form that is mutually agreeable
and the By-Laws of Company shall be in a form that shall be mutually
agreeable; following Preferred Share Approval, the Declaration of Trust
will include the Preferred Share Amendment annexed hereto as EXHIBIT IV.
Following Shareholder Approval, an unlimited number of common shares of
beneficial interest, without par value, and, subject to Preferred Share
Approval, 200,000 preferred shares of beneficial interest, per share, shall
be authorized. No preferred shares of beneficial interest shall be issued
and outstanding immediately after the Preferred Share Approval, other than
Preferred Shares, if any, issued upon conversion of the Loans.
Section 6. COMPANY'S NEGATIVE COVENANTS
Company covenants and agrees that, until termination of this
Agreement and payment in full of the Loans, unless Lenders shall otherwise
give prior written consent, Company shall perform, and shall cause each of
its Subsidiaries to perform, all covenants in this SECTION 6.
6.1 INDEBTEDNESS. Company shall not, and shall not permit any of its
Subsidiaries to, directly or indirectly, create, incur, assume or guaranty,
or otherwise become or remain directly or indirectly liable with respect
to, any Indebtedness, except:
(i) Indebtedness incurred pursuant to the Loan Documents;
(ii) Company and its Subsidiaries may become and remain liable
with respect to Contingent Obligations permitted by SUBSECTION 6.4 and,
upon any matured obligations actually arising pursuant thereto, the
Indebtedness corresponding to the Contingent Obligations so extinguished;
(iii) Company may become and remain liable with respect to
Indebtedness to any of its wholly-owned Subsidiaries, and any wholly-owned
Subsidiary of Company may become and remain liable with respect to
Indebtedness to Company or any other wholly-owned Subsidiary of Company;
and
(iv) Company may remain liable or incur any Indebtedness not
permitted by clauses (i) through (iii) after the date hereof, provided that
after the date of incurrence thereof, taking such Indebtedness into
account, (a) Company is in compliance with SUBSECTION 6.2 and SUBSECTION
6.6 and (b) the aggregate amount of all such Indebtedness does not exceed
the sum of (x) $127,887,515 and (y) three times the sum of (A) the Loans
outstanding on such date and (B) the net proceeds to Company of the sale of
any capital shares of Company (other than the Common Shares sold pursuant
to the Share Purchase Agreement) received on or prior to such date;
provided that the interest rate or rates of such Indebtedness shall be
reasonably related to market rates in the mortgage loan interest rate
market.
6.2 LIENS AND RELATED MATTERS.
A. Prohibition on Liens. Company shall not, and shall not permit
any of its Subsidiaries to, directly or indirectly, create, incur, assume
or permit to exist any Lien on or with respect to any property or asset of
any kind (including any document or instrument in respect of goods or
accounts receivable) of Company or any of its Subsidiaries, whether now
owned or hereafter acquired, or any income or profits therefrom, or file or
permit the filing of, or permit to remain in effect, any financing
statement or other similar notice of any Lien with respect to any such
property, asset, income or profits under the Uniform Commercial Code of any
State or under any similar recording or notice statute, except:
(i) Permitted Encumbrances; and
(ii) Liens described in SCHEDULE 6.2 annexed hereto.
B. No Further Negative Pledges. Except with respect to specific
property encumbered to secure payment of particular Indebtedness or to be
sold pursuant to an executed agreement with respect to a sale of such
property, neither Company nor any of its Subsidiaries shall enter into any
agreement prohibiting the creation or assumption of any Lien upon any of
its properties or assets, whether now owned or hereafter acquired.
C. No Restrictions on Subsidiary Distributions to Company or Other
Subsidiaries. Except as provided herein, Company will not, and will not
permit any of its Subsidiaries to, create or otherwise cause or suffer to
exist or become effective any consensual encumbrance or restriction of any
kind on the ability of any such Subsidiary to (i) pay dividends or make any
other distributions on any of such Subsidiary's equity Securities owned by
Company or any other Subsidiary of Company, (ii) repay or prepay any
Indebtedness owed by such Subsidiary to Company or any other Subsidiary of
Company, (iii) make loans or advances to Company or any other Subsidiary of
Company, or (iv) transfer any of its property or assets to Company or any
other Subsidiary of Company.
6.3 INVESTMENTS. Company shall not, and shall not permit any of its
Subsidiaries to, directly or indirectly, make or own any Investment in any
Person, except:
(i) Company and its Subsidiaries may make and own Investments
in Cash Equivalents;
(ii) Company and its Subsidiaries may continue to own the
Investments owned by them as of the Closing Date in any Subsidiaries of
Company and in BMC;
(iii) Company and its Subsidiaries may make intercompany loans
to the extent permitted under SUBSECTION 6.1(iii);
(iv) Company and its Subsidiaries may acquire Facilities
pursuant to the Underwriting Guidelines; and
(v) Company and its Subsidiaries may make capital
expenditures permitted by SUBSECTION 6.8.
6.4 CONTINGENT OBLIGATIONS. Company shall not, and shall not permit any
of its Subsidiaries to, directly or indirectly, create or become or remain
liable with respect to any Contingent Obligation, except:
(i) Company and its Subsidiaries may become and remain liable
with respect to Contingent Obligations in respect of customary
indemnification and purchase price adjustment obligations incurred in
connection with sales of property otherwise permitted under this Agreement;
(ii) Company and its Subsidiaries may become and remain liable
with respect to Contingent Obligations in respect of any Indebtedness of
Company or any of its Subsidiaries permitted by SUBSECTION 6.1;
(iii) Company may become and remain liable with respect to
Contingent Obligations in respect of indemnification obligations under the
Declaration of Trust, its By-laws or indemnification agreements made
pursuant to the Declaration of Trust or By-laws with any of Company's
trustees, officers, employees or agents, or any individual who has served
in such capacity in another entity at Company's request; and
(iv) Company and its Subsidiaries, as applicable, may remain
liable with respect to Contingent Obligations described in SCHEDULE 6.4
annexed hereto.
6.5 RESTRICTED JUNIOR PAYMENTS. Company shall not, and shall not permit
any of its Subsidiaries to, directly or indirectly, declare, order, pay,
make or set apart any sum for any Restricted Junior Payment other than cash
dividends and distributions paid by Company and any distribution by a
Subsidiary of Company that is a partnership or joint venture to a partner
which is not a Subsidiary of Company, if a partnership distribution is
required under the terms of the respective partnership or joint venture
agreement to be made concurrently with a distribution to Company (including
repayment of loans made by a partner, return of capital contributions,
distributions upon termination, or other fees payable to a partner).
6.6 FINANCIAL COVENANTS.
A. Maximum Leverage Ratio. Company shall not permit the ratio of
(i) Consolidated Total Debt to (ii) Consolidated Net Worth as of the last
day of any calendar quarter to exceed the ratio of 3.00:1.00.
B. Minimum Consolidated Net Worth. Company shall not permit Con-
solidated Net Worth as of the last day of any calendar quarter to be less
than $52,500,000.
C. Debt Coverage Ratio. Company shall not permit the ratio of (i)
the sum of (a) Income before Minority Interest, Income (Loss) from
Operations of Real Estate Ventures
and Gain (Loss) on Disposition of Investment in Real Estate, (b) Interest
Expense, (c) Depreciation and Amortization and (d) Amortization of Deferred
Financing Fees to (ii) the sum of Interest Expense and scheduled debt
principal payments for any calendar quarter (for purposes of this
calculation, debt principal payments that are due only on an annual basis
may be amortized over the three quarters prior to and the quarter in which
the principal payment is due), as such items are shown on Company's
Consolidated Financial Statements, to be less than 1.5:1.00.
6.7 RESTRICTION ON FUNDAMENTAL CHANGES; ASSET SALES AND ACQUISITIONS.
Company shall not, and shall not permit any of its Subsidiaries to, alter
the corporate, capital or legal structure of Company or any of its
Subsidiaries, or enter into any transaction of merger or consolidation, or
liquidate, wind-up or dissolve itself (or suffer any liquidation or
dissolution), or convey, sell, lease, sub-lease, transfer or otherwise
dispose of, in one transaction or a series of transactions, all or sub-
stantially all the business, property or fixed assets of, or stock or other
evidence of beneficial ownership of, any Person or any division or line of
business of any Person, except in the ordinary course of such Person's
business or except:
(i) any Subsidiary of Company may be merged with or into
Company or any wholly-owned Subsidiary of Company, or be liquidated, wound
up or dissolved, or all or any part of its business, property or assets may
be conveyed, sold, leased, transferred or otherwise disposed of, in one
transaction or a series of transactions, to Company or any wholly-owned
Subsidiary of Company; PROVIDED THAT, in the case of any such merger or
other transaction or series of transactions involving Company, Company must
be the continuing or surviving corporation;
(ii) with respect to Facilities which are otherwise sold or
transferred as permitted under this Agreement, the Subsidiaries of Company
which owned such Facility, and any direct parent thereof (other than
Company) may be dissolved or merged into another Subsidiary of Company or
Company, PROVIDED THAT all of the assets of the Subsidiary being dissolved
or merged are first distributed to Company or a Subsidiary; and
(iii) Company and its Subsidiaries may sell any
individual Facility, or portions thereof, in bona-fide third party
transactions.
In addition, Company shall not amend, modify, supplement or terminate the
Administrative Services Agreement in any way which might have a Material
Adverse Effect (including an amendment, modification or supplement which
would alter the provisions for reimbursement of BMC by Company or its
Subsidiaries).
6.8 CAPITAL EXPENDITURES AND TENANT IMPROVEMENTS. Company shall not, and
shall not permit its Subsidiaries to, make or incur capital expenditures
and tenant improvements which, in any Fiscal Year, exceed in the aggregate
for such Fiscal Year 115% of the amount of the anticipated total capital
expenditures and tenant improvements shown on the applicable financial plan
for such Fiscal Year delivered pursuant to SUBSECTION 5.1(iv).
Notwithstanding the foregoing, Company and its Subsidiaries may, in
addition, incur capital
expenditures in an amount not to exceed $1,500,000 in the aggregate to
acquire land or construct a parking deck in order to comply with the
provisions of the Office Lease Agreement dated as of February 14, 1990
between Colonial Penn Insurance Company and Alandco/Cascade, Inc., as
amended.
6.9 RESTRICTION ON LEASES AND SALE-LEASEBACKS. Company shall not, and
shall not permit any of its Subsidiaries to, become liable in any way,
whether directly or by assignment or as a guarantor or other surety, for
the obligations of the lessee under any lease of property (whether real,
personal or mixed), or in a transaction in which Company or any of its
Subsidiaries has sold property and intends to lease such property back from
the buyer thereof, if such transaction will result in a Material Adverse
Effect, provided that this SUBSECTION 6.9 shall not prohibit Company or any
Subsidiary from leasing a Facility pursuant to a ground lease or acquiring
a Facility subject to a ground lease.
6.10 FISCAL YEAR. Company shall not change its Fiscal Year-end from
December 31.
6.11 TRANSACTIONS WITH SHAREHOLDERS AND AFFILIATES. Company shall not,
and shall not permit any of its Subsidiaries to, directly or indirectly,
enter into or permit to exist any transaction (including, without limita-
tion, the purchase, sale, lease or exchange of any property or the
rendering of any service) with any holder of 5% or more of any class of
equity Securities of Company or with BMC or any Affiliate of Company or of
any such holder, on terms that are less favorable to Company or that
Subsidiary, as the case may be, than those that might be obtained at the
time from Persons who are not such a holder or Affiliate; PROVIDED THAT the
foregoing restriction shall not apply to (i) any transaction between
Company and any of its wholly-owned Subsidiaries or between any of its
wholly-owned Subsidiaries, (ii) reasonable and customary fees paid to
members of the Boards of Directors of Company and its Subsidiaries,
(iii) reimbursements to BMC pursuant to the Administrative Services
Agreement, (iv) the salary and other compensation payable by Company to
Xxxxxxx X. Xxxxxx, its president, in an amount and on the terms set forth
in the existing employment contract with Company, (v) allowing a
shareholder representation on the Board of Trustees or (vi) a waiver by the
Board of Trustees of share ownership restrictions in the Declaration of
Trust, provided that no such action shall adversely affect Company's status
as a REIT.
6.12 DISPOSAL OF SUBSIDIARY STOCK. Except as permitted in SUBSECTION 6.2
and SUBSECTION 6.7, Company shall not directly or indirectly sell, assign,
pledge or otherwise encumber or dispose of any shares of capital stock or
other equity Securities of any of its Funded Subsidiaries, except to
qualify directors if required by applicable law, or permit any of its
Funded Subsidiaries directly or indirectly to sell, assign, pledge or
otherwise encumber or dispose of any shares of capital stock or other
equity Securities of any of its Funded Subsidiaries (including such Funded
Subsidiary), except to Company, another Subsidiary of Company, or to
qualify directors if required by applicable law.
6.13 CONDUCT OF BUSINESS. From and after the Closing Date, Company shall
not, and shall not permit any of its Subsidiaries to, engage in any
business other than the businesses engaged in by Company and its
Subsidiaries on the Closing Date.
Section 7. EVENTS OF DEFAULT
If any of the following conditions or events ("Events of
Default") shall occur:
7.1 FAILURE TO MAKE PAYMENTS WHEN DUE. Failure by Company to pay any
installment of principal of or interest on the Loan when due, whether at
stated maturity, by acceleration, by notice of voluntary prepayment, by
mandatory prepayment or otherwise; or failure by Company to pay any fee or
any other amount due under this Agreement within five days after the date
due;
7.2 DEFAULT IN OTHER AGREEMENTS.
(i) Failure of Company or any of its Subsidiaries to pay when
due (a) any principal of or interest on any Material Debt beyond the end of
any grace period provided therefor; or (ii) breach or default by Company or
any of its Subsidiaries with respect to any other material term of (a) any
evidence of any Material Debt or (b) any loan agreement, mortgage,
indenture or other agreement relating to such Material Debt, if the effect
of such breach or default is to cause, or to permit the holder or holders
of that Material Debt (or a trustee on behalf of such holder or holders) to
cause, that Material Debt to become or be declared due and payable prior to
its stated maturity or the stated maturity of any underlying obligation, as
the case may be (upon the giving or receiving of notice, lapse of time,
both, or otherwise); or
7.3 BREACH OF CERTAIN COVENANTS. Failure of Company to perform or comply
with any term or condition contained in SUBSECTION 2.5 or 5.2 or SECTION 6
of this Agreement; or
7.4 BREACH OF WARRANTY; UNQUALIFIED FINANCIAL STATEMENT. Any
representation, warranty, certification or other statement made by Company
or any of its Subsidiaries in any Loan Document, the Share Purchase
Agreement or in any statement or certificate at any time given by Company
or any of its Subsidiaries in writing pursuant hereto or thereto or in
connection herewith or therewith shall be false in any material respect on
the Closing Date, or the certification by Company's accountants of the
year-end consolidated financial statements to be delivered by Company
pursuant to SUBSECTION 5.1(ii) above is not unqualified; or
7.5 OTHER DEFAULTS UNDER LOAN DOCUMENTS. Company or its Subsidiaries
shall default in the performance of or compliance with any material term
contained in this Agreement, any of the other Loan Documents or the Share
Purchase Agreement, other than any such term referred to in any other
subsection of this SECTION 7, and such default shall not have been remedied
or waived within 30 days after receipt by
Company of notice from any Lender of such default, where such default is
not remedied within 30 days after receipt by Company of notice from any
Lender (PROVIDED THAT if such default is not reasonably capable of being
cured in such 30 day period, then such default shall not be an Event of
Default if Company commences to cure such default within said 30 day period
and thereafter diligently and continuously proceeds to cure such default or
impairment within 90 days after receipt of notice from any Lender, subject
to delays caused by Force Majeure Events); or
7.6 INVOLUNTARY BANKRUPTCY; APPOINTMENT OF RECEIVER, ETC. Either (i) a
court having jurisdiction in the premises shall enter a decree or order for
relief in respect of Company or any of its Subsidiaries in an involuntary
case under the Bankruptcy Code or under any other applicable bankruptcy,
insolvency or similar law now or hereafter in effect, which decree or order
is not stayed; or any other similar relief shall be granted under any
applicable federal or state law; or (ii) an involuntary case shall be
commenced against Company or any of its Subsidiaries under the Bankruptcy
Code or under any other applicable bankruptcy, insolvency or similar law
now or hereafter in effect; or a decree or order of a court having
jurisdiction in the premises for the appointment of a receiver, liquidator,
sequestrator, trustee, custodian or other officer having similar powers
over Company or any of its Subsidiaries, or over all or a substantial part
of its property, shall have been entered; or there shall have occurred the
involuntary appointment of an interim receiver, trustee or other custodian
of Company or any of its Subsidiaries for all or a substantial part of its
property; or a warrant of attachment, execution or similar process shall
have been issued against any substantial part of the property of Company or
any of its Subsidiaries, and any such event described in this clause
(ii) shall continue for 60 days unless dismissed, bonded or discharged; or
7.7 VOLUNTARY BANKRUPTCY; APPOINTMENT OF RECEIVER, ETC. Either
(i) Company or any of its Subsidiaries shall have an order for relief
entered with respect to it or commence a voluntary case under the Bank-
ruptcy Code or under any other applicable bankruptcy, insolvency or similar
law now or hereafter in effect, or shall consent to the entry of an order
for relief in an involuntary case, or to the conversion of an involuntary
case to a voluntary case, under any such law, or shall consent to the
appointment of or taking possession by a receiver, trustee or other
custodian for all or a substantial part of its property; or Company or any
of its Subsidiaries shall make any assignment for the benefit of creditors;
or (ii) Company or any of its Subsidiaries shall be unable, or shall fail
generally, or shall admit in writing its inability, to pay its debts as
such debts become due; or the Board of Trustees of Company or any of its
Subsidiaries (or any committee thereof) shall adopt any resolution or
otherwise authorize any action to approve any of the actions referred to in
clause (i) above or this clause (ii); or
7.8 JUDGMENTS AND ATTACHMENTS. Any money judgment, writ or warrant of
attachment or similar process involving (i) in any individual case an
amount in excess of $500,000 or (ii) in the aggregate at any time an amount
in excess of $1,000,000 (in either case not adequately covered by insurance
as to which a solvent and unaffiliated insurance company has acknowledged
coverage) shall be entered or filed against Company or any of its Subsid-
iaries or any of their respective assets and shall remain undischarged,
unvacated, unbonded or unstayed for a period of 60 days (or in any event
later than five days prior to the date of any proposed sale thereunder); or
7.9 DISSOLUTION. Any order, judgment or decree shall be entered against
Company or any of its Subsidiaries (other than Subsidiaries which Company
is permitted to liquidate, wind-up or dissolve pursuant to SUBSECTION
6.7(ii) above) decreeing the dissolution or split up of Company or that
Subsidiary and such order shall remain undischarged or unstayed for a
period in excess of 45 days; or
7.10 EMPLOYEE BENEFIT PLANS. There shall occur one or more ERISA Events
which individually or in the aggregate results in or might reasonably be
expected to result in liability of Company or any of its ERISA Affiliates
in excess of $500,000 during the term of this Agreement; or there shall
exist an amount of unfunded benefit liabilities (as defined in Section
4001(a)(18) of ERISA), individually or in the aggregate for all Pension
Plans (excluding for purposes of such computation any Pension Plans with
respect to which assets exceed benefit liabilities), which exceeds
$500,000; or
7.11 CHANGE IN CONTROL. Any Person (other than Lenders or Affiliates of
Lenders) or any two or more Persons acting in concert shall have acquired
beneficial ownership (within the meaning of Rule 13d-3 of the Securities
and Exchange Commission under the Exchange Act), directly or indirectly, of
equity Securities of Company (or other Securities convertible into such
equity Securities) representing more than 50% of the combined voting power
of all equity Securities of Company entitled to vote in the election of
directors, other than Securities having such power only by reason of the
happening of a contingency; or
THEN (i) upon the occurrence of any Event of Default described in
SUBSECTION 7.6 or 7.7, each of (a) the unpaid principal amount of and
accrued interest on the Loan and (b) all other Obligations shall
automatically become immediately due and payable, without presentment,
demand, protest or other requirements of any kind, all of which are hereby
expressly waived by Company, and (ii) upon the occurrence and during the
continuation of any other Event of Default, Agent or Lenders, by written
notice to Company, may declare all or any portion of the amounts described
in clauses (a) and (b) above to be, and the same shall forthwith become,
immediately due and payable. In addition, upon any Event of Default,
Lenders, at their option and without notice to or demand upon Company or
its Subsidiaries (which are expressly waived by Company and its
Subsidiaries), may proceed to protect, exercise and enforce its rights and
remedies provided in the Loan Documents, and all other rights and remedies
available at law and in equity.
Notwithstanding anything contained in the preceding paragraph,
if at any time within 60 days after an acceleration of the Loan pursuant to
such paragraph Company shall pay all arrears of interest and all payments
on account of principal which shall have become due otherwise than as a
result of such acceleration (with interest on principal and, to the extent
permitted by law, on overdue interest, at the rates specified in this
Agreement) and all Events of Default and Potential Events of Default (other
than non-payment of the principal of and accrued interest on the Loans, in
each case which is due and payable solely by virtue of acceleration) shall
be remedied or waived pursuant to SUBSECTION 8.5, then Lenders, by written
notice to Company, may at its option rescind and annul such acceleration
and its consequences; but such action shall not affect any subsequent Event
of Default or Potential Event of Default or impair any right consequent
thereon. The
provisions of this paragraph are intended merely to bind Lenders to a
decision which may be made at the election of Lenders and are not intended
to benefit Company and do not grant Company the right to require Lenders to
rescind or annul any acceleration hereunder, even if the conditions set
forth herein are met.
Section 8. MISCELLANEOUS
8.1 ASSIGNMENTS AND PARTICIPATION IN LOANS. Each Lender shall have the
right, at any time after the Closing Date, to (i) sell, assign or transfer
to any party, or (ii) sell a participation to any Person in, all or any
part of its Pro Rata Share of the Loan or any other interest herein or in
any other Obligations owed to it; PROVIDED THAT (a) the selling, assigning
or transferring Lender shall notify Agent and Company concurrently with
such sale, assignment or transfer, the Person to whom such sale, assignment
or transfer was made, and any deduction, withholding or payment
requirements under SUBSECTION 2.6 to which such Person is subject (which
deduction, withholding or payment requirements will not be greater than
those to which the selling, assigning or transferring Lender was subject,
and (b) no such sale, assignment, transfer or participation shall (I)
without the consent of Company (and except as otherwise may be provided in
the Share Purchase Agreement), require Company to file a registration
statement with the Securities and Exchange Commission or apply to qualify
such sale, assignment, transfer or participation under the securities laws
of any state or (II) in and of itself result in Company failing to meet the
requirements of the Internal Revenue Code with respect to qualification as
a REIT. To the extent of any such sale, assignment or transfer in
accordance with clause (i) above, such Lender shall be relieved of its
obligations with respect to its Pro Rata Share of the Loan or other
Obligations or the portion thereof so assigned arising from and after the
effective date of such assignment (which effective date shall be set forth
in the notice delivered pursuant to clause (a) above). From and after the
effective date of such assignment, (x) the assignee thereunder shall be a
party hereto and, to the extent that rights and obligations hereunder have
been assigned to it pursuant to such assignment, shall have the rights and
obligations of a Lender hereunder and (y) such Lender shall relinquish its
rights and be released from its obligations under this Agreement arising
from and after the date of such assignment (and, in the case of an
assignment covering all or the remaining portion of such Lender's rights
and obligations under this Agreement, such Lender shall cease to be a party
hereto). Such Lender may furnish any information concerning Company and
its Subsidiaries in the possession of such Lender from time to time to
assignees and participants (including prospective assignees and partici-
pants), subject to SUBSECTION 8.17.
8.2 EXPENSES. Whether or not the transactions contemplated hereby shall
be consummated, Company agrees to pay promptly (i) all the costs of
furnishing all opinions by counsel for Company (including without
limitation any opinions requested by Agent or Lenders as to any legal
matters arising hereunder) and of Company's performance of and compliance
with all agreements and conditions on its part to be performed or complied
with under this Agreement, the other Loan Documents and the Share Purchase
Agreement, including, without limitation, with respect to confirming
compliance with environmental and insurance requirements; (ii) the actual
and reasonable costs and expenses of preparing the
Loan Documents and the Share Purchase Agreement, including the reasonable
fees, expenses and disbursements of counsel to Agent and Lenders in
connection with the negotiation, preparation and execution of the Loan
Documents and the Share Purchase Agreement, the administration of the Loan,
and any consents, amendments, waivers or other modifications hereto or
thereto and any other documents or matters requested by Company; (iii) all
other actual and reasonable costs and expenses incurred by Agent or Lenders
in connection with the negotiation, preparation and execution of the Loan
Documents and the Share Purchase Agreement and the transactions
contemplated hereby and thereby (including, without limitation, costs of
investigations and inspections of Company and its Subsidiaries and their
respective assets, and travel expenses of Agent, Lenders and their agents
and attorneys); (iv) after the occurrence of an Event of Default, all costs
and expenses, including reasonable attorneys' fees and expenses (including
allocated costs of internal counsel, and fees billed for law clerks,
paralegals, librarians and others not admitted to the bar but performing
services under the supervision of an attorney) and costs of settlement,
incurred by Agent or Lenders in enforcing any Obligations of or in
collecting any payments due from Company hereunder or under the other Loan
Documents by reason of such Event of Default or in connection with any
refinancing or restructuring of the credit arrangements provided under this
Agreement in the nature of a "work-out", pursuant to any insolvency or
bankruptcy proceedings or in connection with enforcing any judgment. Agent
and Lenders acknowledge that, in the negotiation, preparation and
documentation of the Loan Documents and the Share Purchase Agreement, and
the investigations and inspections relating to the transactions
contemplated by this Agreement, Lenders have not each engaged separate
counsel, and Agent and Lenders agree that in connection with the
administration of the Loan and the enforcement of rights and remedies under
the Loan Documents, Company shall be responsible only for the payment of
the attorneys' fees and costs of counsel (including local counsel) engaged
by Agent on behalf of Lenders or by the Requisite Lenders on behalf of
Lenders, and not for other counsel which may be separately engaged by one
or more Lenders.
8.3 INDEMNITY. In addition to the payment of expenses pursuant to SUB-
SECTION 8.2, whether or not the transactions contemplated hereby shall be
consummated, Company agrees to defend, indemnify, pay and hold harmless
Agent, Lenders (in their capacities as lenders), and the officers,
directors, employees, agents, nominees and affiliates of Agent and Lenders
(collectively called the "Indemnitees") from and against any and all other
liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, claims, costs, expenses and disbursements of any kind or nature
whatsoever (including without limitation the reasonable fees and disburse-
ments of counsel for such Indemnitees in connection with any investigative,
administrative or judicial proceeding commenced or threatened by any
Person, whether or not any such Indemnitee shall be designated as a party
or a potential party thereto), whether direct, indirect or consequential
and whether based on any federal, state or foreign laws, statutes, rules or
regulations (including without limitation securities and commercial laws,
statutes, rules or regulations and Environmental Laws), on common law or
equitable cause or on contract or otherwise, that may be imposed on,
incurred by, or asserted against any such Indemnitee, in any manner
relating to or arising out of this Agreement or the other Loan Documents or
the transactions contemplated hereby or thereby (including without
limitation Lenders' agreement to make the Loan hereunder or the use or
intended use of
the proceeds of any of the Loan) (collectively called the "Indemnified
Liabilities"); PROVIDED THAT Company shall not have any obligation to any
Indemnitee hereunder with respect to any Indemnified Liabilities to the
extent such Indemnified Liabilities arise solely from the gross negligence
or willful misconduct of that Indemnitee as determined by a final judgment
of a court of competent jurisdiction. To the extent that the undertaking
to defend, indemnify, pay and hold harmless set forth in the preceding
sentence may be unenforceable because it is violative of any law or public
policy, Company shall contribute the maximum portion that it is permitted
to pay and satisfy under applicable law to the payment and satisfaction of
all Indemnified Liabilities incurred by the Indemnitees or any of them.
8.4 SET-OFF. In addition to any rights now or hereafter granted under
applicable law and not by way of limitation of any such rights, upon the
occurrence of any Event of Default, each Lender is hereby authorized by
Company at any time or from time to time, without notice to Company or to
any other Person, any such notice being hereby expressly waived, to set off
and to appropriate and to apply any and all deposits (general or special,
including, but not limited to, Indebtedness evidenced by certificates of
deposit, whether matured or unmatured, but not including trust accounts)
and any other Indebtedness at any time held or owing by such Lender to or
for the credit or the account of Company against and on account of the
obligations and liabilities of Company to such Lender under this Agreement
and the other Loan Documents, including, but not limited to, all claims of
any nature or description arising out of or connected with this Agreement
or any other Loan Document, irrespective of whether or not (i) such Lender
shall have made any demand hereunder or (ii) the principal of or the
interest on the Loan or any other amounts due hereunder shall have become
due and payable pursuant to SECTION 7 and although said obligations and
liabilities, or any of them, may be contingent or unmatured.
8.5 AMENDMENTS AND WAIVERS. No amendment, modification, termination or
waiver of any provision of this Agreement or the Notes, shall in any event
be effective without the written concurrence of Agent, Requisite Lenders
and Company, and no consent to any departure by Company from the provisions
of this Agreement or the Notes shall be effective without the written
concurrence of Requisite Lenders; PROVIDED THAT any such amendment,
modification, termination, waiver or consent which: changes any Lender's
Pro Rata Share; changes in any manner the definition of "Requisite
Lenders"; changes in any manner any provision of this Agreement which, by
its terms, expressly requires the approval or concurrence of all Lenders;
postpones the scheduled final maturity date of the Loans; postpones the
date or reduces the amount of any scheduled payment of principal of the
Loans; postpones the date on which any interest is payable; decreases the
interest rate borne by the Loans; or changes in any manner the provisions
contained in SUBSECTION 7.1 or this SUBSECTION 8.5, shall be effective only
if evidenced by a writing signed by or on behalf of all Lenders. Any
waiver or consent shall be effective only in the specific instance and for
the specific purpose for which it was given. No notice to or demand on
Company in any case shall entitle Company to any other or further notice or
demand in similar or other circumstances.
8.6 INDEPENDENCE OF COVENANTS. All covenants hereunder shall be given
independent effect so that if a particular action or condition is not
permitted by any of such covenants,
the fact that it would be permitted by an exception to, or would otherwise
be within the limitations of, another covenant shall not avoid the occur-
rence of an Event of Default or Potential Event of Default if such action
is taken or condition exists.
8.7 NOTICES. Unless otherwise specifically provided herein, any notice
or other communication herein required or permitted to be given shall be in
writing and may be personally served, or sent by telefacsimile (with a
confirmatory copy given by personal service, United States mail or courier
service in accordance with the provisions of this SUBSECTION 8.7) or United
States mail or courier service and shall be deemed to have been given when
delivered in person or by courier service, upon receipt of telefacsimile,
or three Business Days after depositing it in the United States mail with
postage prepaid and properly addressed. For the purposes hereof, the
address of each party hereto shall be as set forth under such party's name
on the signature pages hereof or such other address as shall be designated
by such Person in a written notice delivered to the other parties hereto.
Notices to Agent hereunder shall be deemed notices to Lenders.
8.8 SURVIVAL OF REPRESENTATIONS, WARRANTIES AND AGREEMENTS. All
representations, warranties and agreements made herein shall survive the
execution and delivery of this Agreement and the making of the Loans
hereunder. Notwithstanding anything in this Agreement or implied by law to
the contrary, the agreements of Company set forth in SUBSECTIONS 2.6, 8.2
and 8.3 shall survive the payment of the Loans and the termination of this
Agreement.
8.9 FAILURE OR INDULGENCE NOT WAIVER; REMEDIES CUMULATIVE. No failure or
delay on the part of any Lender in the exercise of any power, right or
privilege hereunder or under any other Loan Document shall impair such
power, right or privilege or be construed to be a waiver of any default or
acquiescence therein, nor shall any single or partial exercise of any such
power, right or privilege preclude other or further exercise thereof or of
any other power, right or privilege. All rights and remedies existing
under this Agreement and the other Loan Documents are cumulative to, and
not exclusive of, any rights or remedies otherwise available.
8.10 MARSHALLING; PAYMENTS SET ASIDE. No Lender shall be under any
obligation to marshal any assets in favor of Company or any other party or
against or in payment of any or all of the Obligations. To the extent that
Company makes a payment or payments to Lenders (or to Agent for the benefit
of Lenders), or Lenders exercise their rights of setoff, and such payment
or payments or the proceeds of such setoff or any part thereof are
subsequently invalidated, declared to be fraudulent or preferential, set
aside and/or required to be repaid to a trustee, receiver or any other
party under any bankruptcy law, any other state or federal law, common law
or any equitable cause, then, to the extent of such recovery, the
obligation or part thereof originally intended to be satisfied, and all
Liens, rights and remedies therefor or related thereto, shall be revived
and continued in full force and effect as if such payment or payments had
not been made or such setoff had not occurred.
8.11 SEVERABILITY. In case any provision in or obligation under this
Agreement or the Notes shall be invalid, illegal or unenforceable in any
jurisdiction, the validity, legality and enforceability of the remaining
provisions or obligations, or of such provision or obligation in any other
jurisdiction, shall not in any way be affected or impaired thereby.
8.12 HEADINGS. Section and subsection headings in this Agreement are
included herein for convenience of reference only and shall not constitute
a part of this Agreement for any other purpose or be given any substantive
effect.
8.13 APPLICABLE LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND SHALL BE
CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE
OF NEW YORK, WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES.
8.14 SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon the
parties hereto and their respective successors and assigns and shall inure
to the benefit of the parties hereto and the successors and assigns of
Lenders (it being understood that Lenders' rights of assignment are subject
to SUBSECTION 8.1). Neither Company's rights or obligations hereunder nor
any interest therein may be assigned or delegated by Company without the
prior written consent of all Lenders.
8.15 CONSENT TO JURISDICTION AND SERVICE OF PROCESS. ALL JUDICIAL
PROCEEDINGS ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN
DOCUMENT OR ANY OBLIGATION MAY BE BROUGHT IN ANY STATE OR FEDERAL COURT OF
COMPETENT JURISDICTION IN THE STATE OF NEW YORK, AND BY EXECUTION AND
DELIVERY OF THIS AGREEMENT COMPANY ACCEPTS FOR ITSELF AND IN CONNECTION
WITH ITS PROPERTIES, AND EACH LENDER ACCEPTS FOR ITSELF, GENERALLY AND
UNCONDITIONALLY, THE NONEXCLUSIVE JURISDICTION OF THE AFORESAID COURTS AND
WAIVES ANY DEFENSE OF FORUM NON CONVENIENS AND IRREVOCABLY AGREES TO BE
BOUND BY ANY JUDGMENT RENDERED THEREBY IN CONNECTION WITH THIS AGREEMENT,
SUCH OTHER LOAN DOCUMENT OR SUCH OBLIGATION. Company and Lenders hereby
agree that service of all process in any such proceeding in any such court
may be made by registered or certified mail, return receipt requested, to
each party at its address provided in SUBSECTION 8.7, such service being
hereby acknowledged to be sufficient for personal jurisdiction in any
action in any such court and to be otherwise effective and binding service
in every respect. Nothing herein shall affect the right to serve process
in any other manner permitted by law or shall limit the right to bring
proceedings in the courts of any other jurisdiction.
8.16 WAIVER OF JURY TRIAL. EACH OF THE PARTIES TO THIS AGREEMENT HEREBY
AGREES TO WAIVE ITS RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE
OF ACTION BASED UPON OR ARISING OUT OF THIS AGREEMENT OR ANY OF THE OTHER
LOAN DOCUMENTS OR ANY DEALINGS BETWEEN THEM RELATING TO THE SUBJECT MATTER
OF THIS LOAN TRANSACTION OR THE LENDER/BORROWER RELATIONSHIP THAT IS BEING
ESTABLISHED. The scope
of this waiver is intended to be all-encompassing of any and all disputes
that may be filed in any court and that relate to the subject matter of
this transaction, including without limitation contract claims, tort
claims, breach of duty claims and all other common law and statutory
claims. Each party hereto acknowledges that this waiver is a material
inducement to enter into a business relationship, that each has already
relied on this waiver in entering into this Agreement, and that each will
continue to rely on this waiver in their related future dealings. Each
party hereto further warrants and represents that it has reviewed this
waiver with its legal counsel and that it knowingly and voluntarily waives
its jury trial rights following consultation with legal counsel. THIS
WAIVER IS IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED EITHER ORALLY OR
IN WRITING, AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS,
RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT OR ANY OF THE
OTHER LOAN DOCUMENTS OR TO ANY OTHER DOCUMENTS OR AGREEMENTS RELATING TO
THE LOANS MADE HEREUNDER. In the event of litigation, this Agreement may
be filed as a written consent to a trial by the court.
8.17 CONFIDENTIALITY. Each Lender shall hold all non-public information
obtained pursuant to the requirements of this Agreement that has been
identified as confidential by Company in accordance with Lender's customary
procedures for handling confidential information of this nature, provided
that in any event a Lender may make disclosures to Affiliates of such
Lender or disclosures reasonably required by any bona fide assignee,
transferee or participant in connection with the contemplated assignment or
transfer by such Lender of any Loans or any participations therein or
disclosures required or requested by any governmental agency or
representative thereof or pursuant to legal process; PROVIDED that, unless
specifically prohibited by applicable law or court order, each Lender shall
notify Company of any request by any governmental agency or representative
thereof (other than any such request in connection with any examination of
the financial condition of such Lender by such governmental agency) for
disclosure of any such non-public information prior to disclosure of such
information; and PROVIDED, FURTHER that in no event shall any Lender be
obligated to return any materials furnished by Company or any of its
Subsidiaries.
8.18 COUNTERPARTS; EFFECTIVENESS. This Agreement and any amendments,
waivers, consents or supplements hereto or in connection herewith may be
executed in any number of counterparts and by different parties hereto in
separate counterparts, each of which when so executed and delivered shall
be deemed an original, but all such counterparts together shall constitute
but one and the same instrument; signature pages may be detached from
multiple separate counterparts and attached to a single counterpart so that
all signature pages are physically attached to the same document. The
submission of this Agreement to Company or its agents or attorneys for
review or signature does not constitute a commitment by any Lender to make
the Loan to Company, and this Agreement shall become binding and effective
only upon the execution of a counterpart hereof by each of the parties
hereto and receipt by Company and of written notification of such execution
and authorization of delivery thereof.
8.19 CONFLICTING PROVISIONS. Except as otherwise provided in this
Agreement or in any of the other Loan Documents by specific reference to
the applicable provisions of this
Agreement, if any provision contained in this Agreement is in conflict
with, or inconsistent with, any of the provisions of any of the other Loan
Documents, the provisions contained in this Agreement shall govern and
control.
8.20 ENTIRE AGREEMENT. This Agreement is the entire agreement between the
parties hereto with respect to the subject matter hereof and supersedes all
prior agreements between the parties with respect to the matters contained
in this Agreement. All prior or contemporaneous understandings, oral
representations or agreements had among the parties with the respect to the
subject matter are merged and contained in this Agreement.
8.21 OBLIGATIONS SEVERAL; INDEPENDENT NATURE OF LENDERS' RIGHTS. The
obligations of Lenders hereunder are several and no Lender shall be
responsible for the obligations of any other Lender hereunder. Nothing
contained herein, in any other Loan Document or in the Share Purchase
Agreement, and no action taken by Lenders pursuant hereto or thereto, shall
be deemed to constitute Lenders, or any of the Lenders, as a partnership,
an association, a joint venture or any other kind of entity. The amounts
payable at any time hereunder to each Lender shall be a separate and
independent debt provided, however, that Lenders agree that Lenders will
collectively, through a Lender or other entity designated by Requisite
Lenders exercise their rights under this Agreement and other Loan
Documents.
8.22 LENDER REPRESENTATIONS. Each Lender severally represents that
A. Its purchase of Common Shares pursuant to the Share
Purchase Agreement, and its ability to acquire Preferred Shares or Common
Shares pursuant to this Agreement (and for purposes of this representation,
each Lender shall be treated as having acquired as of the Closing Date the
maximum number of such Preferred Shares and Common Shares which can be
obtained under this Agreement), will not result in any individual within
the meaning of Section 856(h) of the Internal Revenue Code, owning directly
or indirectly more than 9.8% of the outstanding Common Shares of the
Company, as determined under Internal Revenue Code Sections 856(a)(6) and
856(h), and Internal Revenue Code Sections 542 and 544 (as those Sections
are incorporated by reference into Internal Revenue Code Section 856(h)).
B. (i) It has substantial experience in evaluating and
investing in private placement transactions so that it is capable of
evaluating the merits and risks of an investment in Company and has the
capacity to protect its own interests in connection with the Loans and the
shares issuable upon conversion of the Loans. Such Lender understands that
the investment to be made in connection with the Loans or shares issuable
upon conversion of the Loans is speculative and involves significant risk.
Such Lender has the ability to bear the economic risk of this investment.
(ii) Such Lender is acquiring the Loans or shares
issuable upon conversion of the Loans for investment for its own account,
and not with the view to, or for resale in connection with, any
"distribution" of all or any portion thereof within the meaning of the
Securities Act of 1933, as amended (the "Securities Act") or any state
securities laws. Such Lender understands that neither the Loans or shares
issuable upon conversion of the Loans have been registered under the
Securities Act or any state securities laws by reason of a specific
exemption from the registration provisions of the Securities Act and
applicable state securities laws which depends upon, among other things,
the bona fide nature of such Lender's investment intent and the accuracy of
such Lender's representations as expressed herein. Such Lender also
represents that it has not been organized solely for the purpose of
acquiring the Loans and the shares issuable upon conversion of the Loans..
(iii) It acknowledges that the Loans and shares
acquired pursuant to conversion of the Loans must be held indefinitely
unless the transfer thereof is registered under the Securities Act and
applicable state securities laws or unless an exemption from such
registration is available. Such Lender is aware of the provisions of
Rule 144 promulgated under the Securities Act which permit limited resale
of shares purchased in a private placement, subject to the satisfaction of
certain conditions, including, among other things, the availability of
certain current public information about Company, the resale occurring
after the expiration of minimum holding periods after a party has purchased
and paid for the security to be sold, the sale being affected through a
"broker's transaction" or in transactions directly with a "market maker"
and the number of shares being sold during any three-month period not
exceeding specified limitations (except as provided in Rule 144(k)).
(iv) It has been provided the opportunity to discuss the
transactions contemplated hereby with Company. Each Lender acknowledges
receipt of Company's Annual Report on Form 10-K for the Fiscal Year ended
December 31, 1996 and Company's Quarterly Reports on Form 10-Q for the
quarters ended March 31, 1997 and June 30, 1997.
(v) It owns assets exceeding $5,000,000 in cost or
value, whichever is lower.
Section 9. CONVERSION OF LOANS
9.1 CONVERSION.
A. Conversion to Preferred Shares. Following Conversion Approval
(or, if Conversion Approval has not been obtained, to the extent conversion
of the Loans does not result in Lenders owning in the aggregate in excess
of 19.9% of the capital shares of Company) and Preferred Share Approval, in
addition to the right of any Lender to convert Loans to Common Shares as in
this SECTION 9 provided, at any time and from time to time until September
30, 2002 (except that, if Company has provided a notice of prepayment of
the Loans, such right shall terminate on the 30th day following receipt by
Agent of such notice of prepayment, as provided in SUBSECTION 2.4B(i)),
Lenders may convert all or a portion (but no less than $1,000,000, or such
lesser aggregate amount of Loans that is then outstanding, at any one time)
of the Loans into Preferred Shares, at a conversion price of $100.00 per
share, upon delivery of a conversion notice by the Lender or Lenders (or by
Agent on behalf of such Lender or Lenders) indicating the principal amount
to be converted
and the name of Lender or the assignee of Lenders in whose name the
Preferred Shares shall be registered on the share transfer books of
Company.
B. Conversion to Common Shares. Following Conversion Approval
(or, if Conversion Approval has not been obtained, to the extent conversion
of the Loans does not result in Lenders owning in the aggregate in excess
of 19.9% of the capital shares of Company), in addition to the right of any
Lender to convert Loans to Preferred Shares as in this SECTION 9 provided,
at any time and from time to time until September 30, 2002 (except that, if
Company has provided a notice of prepayment of the Loans, such right shall
terminate on the 30th day following receipt by Agent of such notice of
prepayment, as provided in SUBSECTION 2.4B(i)), Lenders may convert all or
a portion of the Loans into Common Shares (but no less than $1,000,000 or
such lesser amount of Loans that is then outstanding, at any one time) at a
rate of 19.4174 shares of Common Stock for each $100 principal amount of
Loans, subject to adjustment as set forth below (such rate, as adjusted
from time to time, being the "Common Share Conversion Rate"). Conversion
of Loans may be effected by delivering a conversion notice by the Lender or
Lenders (or by Agent on behalf of such Lender or Lenders) indicating the
principal amount to be converted and the name of Lender or the assignee of
Lenders in whose name the Common Shares shall be registered on the share
transfer books of Company.
C. Right of Conversion upon Notice of Prepayment. Within 30 days
of receipt of a notice of prepayment by Company pursuant to SUBSECTION
2.4(B)(i), each Lender shall have the right to notify Company of its
intention to convert all or a portion of the Loans into Preferred Shares,
as provided in SUBSECTION 9.1A at the conversion price of Preferred Shares,
or into Common Shares as provided in SUBSECTION 9.1B at the Common Share
Conversion Rate.
9.2 ISSUANCE OF PREFERRED SHARES OR COMMON SHARES ON CONVERSION. As
promptly as practicable after receipt of a conversion notice, Company shall
deliver or cause to be delivered at the office of Agent, to or upon the
written order of Lender of the Loan to be converted, certificates
representing the number of fully paid and non-assessable Preferred Shares
or Common Shares, as the case may be, into which such Loan may be converted
in accordance with the provisions of this SUBSECTION 9.2. Such conversion
shall be deemed to have been made at the close of business on the date that
the conversion notice with respect to such Loan or Loans was delivered to
Company so that the rights of the Lender of such Loan or Loans as a Lender
shall cease at such time and, subject to the following provisions of this
paragraph, the person or persons entitled to receive the Preferred Shares
or
Common Shares, as the case may be, upon conversion of such Loan or Loans
shall be treated for all purposes as having become the record holder or
holders of such Preferred Shares or Common Shares, as the case may be, at
such time and such conversion shall be at the conversion price in effect at
such time; PROVIDED, HOWEVER, that no such conversion notice on any date
when the share transfer books of Company shall be closed shall be effective
to constitute the person or persons entitled to receive the Preferred
Shares or the Common Shares upon such conversion as the record holder or
holders of such Preferred Shares or Common Shares, as the case may be, on
such date, but such conversion notice shall be effective to constitute the
person or persons entitled to receive such Preferred Shares or Common
Shares, as the case may be, as the record holder or holders thereof for all
purposes as the close of business on the next succeeding day on which such
share transfer books are open; such conversion shall be at the conversion
rate in effect on the date that such Loan or Loans shall have been
surrendered for conversion, as if the share transfer books of Company had
not been closed.
If the last day for the exercise of the conversion right shall not be
a Business Day, then such conversion right may be exercised on the next
succeeding Business Day.
9.3 NO ADJUSTMENT OF CONVERSION PRICE FOR PREFERRED SHARES. The
conversion price for the Preferred Shares is not subject to adjustment.
9.4 ADJUSTMENT OF CONVERSION RATE. The Common Share Conversion Rate
shall be subject to adjustment from time to time as follows:
A. Adjustment for Distributions or Sales.
(i) If Company shall fix a Determination Date with respect to
the payment of, or the making of, a dividend or other distribution with
respect to its Common Shares in Common Shares (including by way of
reclassification of any Common Shares), the Common Share Conversion Rate in
effect at the opening of business on the day following the Determination
Date shall be increased by multiplying the Common Share Conversion Rate in
effect at the closing of business on the Determination Date by a fraction,
the numerator of which shall be the sum of the number of Common Shares
outstanding at the close of business on the Determination Date, excluding
the effect of such dividend or distribution, plus the total number of
Common Shares constituting such dividend or other distribution, and the
denominator of which shall be the number of Common Shares outstanding at
the close of business on the Determination Date, excluding the effect of
such dividend or distribution, such increase to become effective at the
opening of business on the day following the Determination Date. For the
purposes of this clause (i), the number of Common Shares at any time
outstanding shall not include shares held in the treasury of Company and
the number of shares constituting such dividend or other distribution shall
include, if applicable, Common Shares represented by cash issued in lieu of
fractional Common Shares.
(ii) If outstanding Common Shares shall be subdivided or
split into a greater number of Common Shares, the Common Share Conversion
Rate in effect at the opening of business on the day following the day upon
which such subdivision or split becomes effective shall be proportionately
increased, and, conversely, in case outstanding Common Shares shall be
combined into a lesser number of Common Shares, the Common Share Conversion
Rate in effect at the opening of business on the day following the day upon
which such combination becomes effective shall be proportionately reduced,
such increase or reduction, as the case may be, to become effective at the
opening of business on the day following the day upon which such
subdivision or split or combination becomes effective.
(iii) If Company shall distribute to holders of
Common Shares evidences of indebtedness, equity securities other than
Common Shares (including, without limitation, equity interests in Company's
Subsidiaries) or other assets (other than regular cash dividends), or shall
distribute to holders of Common Shares rights, options or warrants to
subscribe to securities, then in each such case the Common Share Conversion
Rate shall be adjusted so that it shall equal the rate determined by
multiplying the Common Share Conversion Rate in effect immediately prior to
the date of such distribution by a fraction of which the numerator shall be
the Current Market Price per Common Share on the record date mentioned
below, and of which the denominator shall be such Current Market Price less
the then fair market value of the evidences of indebtedness, equity
securities and assets so distributed, or of such subscription rights,
warrants or options, applicable to one Common Share. For the purposes of
this clause (iii), in the event of a distribution of capital shares or
other securities of any Subsidiary of Company as a dividend on Common
Shares, the "then fair market value" of the shares or other securities so
distributed shall be the greater of the value of such shares or other
securities on the record date mentioned below as determined by an
independent appraiser of national repute appointed in good faith, by the
Board of Trustees and the Current Market Price of the shares or other
securities so distributed as of a date 20 days following the distribution
date thereof. Such adjustment shall become effective immediately after the
record date for the determination of shareholders entitled to receive such
distribution.
(iv) If Company shall sell, transfer, or otherwise
convey Common Shares at a gross price per share (the "Sale Price") less
than the quotient derived by dividing $100 by the Common Share Conversion
Rate (or, if previously adjusted pursuant to this clause (iv), at a price
per share less than the lowest of all the preceding Sale Prices) per Common
Share, then in such case the Common Share Conversion Rate shall be adjusted
so that it shall equal the rate determined by dividing $100 by the Sale
Price. Notwithstanding the foregoing, Company shall not issue, sell,
transfer or otherwise convey Common Shares at a price that is less than
fair market value, as determined in the reasonable good faith judgment of
the Board of Trustees (which fair market value, under all the circumstances
relevant, might not be equivalent to the Current Market Price).
(v) No adjustment in the conversion rate shall be
required (a) with respect to shares issued upon conversion of Loans or (b)
unless such adjustment would require an increase or decrease of at least 1%
of such rate; provided, however, that any such adjustment which by reason
of subclause (b) of this CLAUSE (v) is not required to be made shall be
carried forward and taken into account in any subsequent adjustment.
B. Adjustment for Reorganization, Consolidation or Merger. If
there shall occur any capital reorganization or any reclassification of the
shares of beneficial interest or other equity securities of Company,
consolidation, merger or other business combination of Company with or into
a corporation or other entity, or the conveyance of all or substantially
all of the assets of Company to another corporation or other entity, each
$100 principal
amount of Loans shall thereafter be convertible into the number of shares
or other securities or property to which a holder of the number of Common
Shares deliverable upon conversion of each $100 principal amount of Loans
would have been entitled upon such reorganization, reclassification,
consolidation, merger or conveyance. In any such case, appropriate
adjustment (as determined by the Board of Trustees) shall be made in the
application of the provisions hereof with respect to the rights of the
Lenders such that the provisions hereof (including, without limitation,
provisions with respect to changes in and other adjustments of the Common
Share Conversion Rate) shall thereafter be applicable, as nearly as
reasonably practicable, in relation to any shares or other property
thereafter deliverable upon the conversion of the Loans.
C. Notice to Lenders. Whenever the conversion rate is adjusted as
provided in this SUBSECTION 9.4, Company shall promptly file with Lenders
an Officer's Certificate setting forth the Common Share Conversion Rate
after such adjustment and setting forth a brief statement of the facts
requiring such adjustment and the computation thereof.
D. Calculations. All calculations under this SECTION 9 shall be
made to the nearest cent or the nearest one-hundredth of a share, as the
case may be. In any case in which this SECTION 9 shall require that an
adjustment shall become effective immediately after a record date or an
effective date for an event, Company may defer until the occurrence of such
event (i) issuing to the Lender of any Loan converted after such record
date or effective date and before the occurrence of such event the
additional shares issuable upon such conversion by reason of the adjustment
required by such event over and above the shares issuable upon such
conversion before giving effect to such adjustment and (ii) paying to such
Lender any amount in cash in lieu of a fractional share pursuant to
SUBSECTION 9.5; provided, however, that Company shall deliver to such
Lender an appropriate instrument evidencing such Lender's rights to receive
such additional shares, and such cash, upon the occurrence of the event
requiring such adjustment.
9.5 NO FRACTIONAL SHARES. No fractional shares or scrip representing
fractional shares shall be issued upon the conversion of any Loan or Loans.
If the conversion of any Loan or Loans results in a fraction, an amount
equal to such fraction multiplied by the closing price on the principal
national securities exchange on which the Common Shares are admitted to
trading or listed, or if not listed or admitted to trading on any national
securities exchange, the average of the highest reported bid and lowest
reported asked prices as furnished by the National Quotation Bureau
Incorporated or such other nationally recognized quotation service selected
by Company for the purpose, if said Bureau is not at the time furnishing
quotations immediately preceding the day on which the Loan (or specified
portions thereof) is deemed to have been converted shall be paid to such
Lender in cash by Company.
9.6 COVENANT TO RESERVE SHARES. Company covenants that, following
Conversion Approval, it will at all times reserve and keep available, free
from pre-emptive rights, out of its authorized but unissued shares, or out
of shares held in its treasury, solely for the purpose of issue upon
conversion of Loans (or purchase pursuant to SUBSECTION 9.10) as herein
provided, such number of Preferred Shares, if Preferred Share Approval is
obtained,
as shall then be issuable upon the conversion of all outstanding Loans, and
such number of Common Shares as shall then be issuable upon conversion of
all Preferred Shares then outstanding or issuable upon conversion of Loans.
Company covenants that all Preferred Shares and Common Shares that shall be
so issuable shall be duly and validly issued and fully paid and non-
assessable and free from all liens and charges with respect to the issue
thereof. For purposes of this SUBSECTION 9.6, the number of Preferred
Shares and number of Common Shares which shall be deliverable upon the
conversion of all outstanding Loans shall be computed as if at the time of
computation all outstanding Loans were held by a single Lender.
9.7 COMPLIANCE WITH LEGAL AND GOVERNMENTAL REQUIREMENTS. Company
covenants that if any Preferred Shares or any Common Shares required to be
reserved for purposes of conversion of Loans (or purchase pursuant to
SUBSECTION 9.10) hereunder, require registration with or approval of any
governmental authority under any Federal or State law, or listing upon any
national securities exchange, before such shares may be issued upon
conversion, Company will in good faith and as expeditiously as possible
endeavor to cause such shares to be duly registered, approved or listed, as
the case may be; provided that this covenant shall not apply to
registration or qualification of the Preferred Shares with the Securities
and Exchange Commission or any state securities commission, which
registration and qualification are the subject of a registration rights
agreement entered into between Company and Lenders.
9.8 PAYMENT OF TAXES. The issuance of certificates for Preferred Shares
or Common Shares upon the conversion of Loans (or purchase pursuant to
SUBSECTION 9.10) shall be made without charge to the converting or
purchasing Lender for any tax in respect of the issuance of such
certificates, and such certificates shall be issued in the respective names
of, or in such names as may be directed by, the Lender of the Loan so
converted (or the purchaser, as the case may be); provided, however, that
Company shall not be required to pay any tax which may be payable in
respect of any transfer involved in the issuance and delivery of any such
certificate in a name other than that of the Lender of the Loan so
converted (or the purchaser, as the case may be), and Company shall not be
required to issue or deliver such certificates unless or until the person
or persons requesting the issuance thereof shall have paid to Company the
amount of such tax or shall have established to the satisfaction of Company
that such tax has been paid.
9.9 NOTICE OF CERTAIN EVENTS. In case at any time Company shall propose:
(a) to declare any dividend or make any distribution on its
Preferred Shares or its Common Shares or to fix a record date for the
making of any other distribution (other than a cash dividend or
distribution not prohibited under SUBSECTION 6.5 hereof) to all holders of
its Preferred Shares or its Common Shares; or
(b) to fix a record date for the issuance of rights or warrants to
all holders of its Preferred Shares or its Common Shares entitling them to
purchase any additional Preferred Shares or Common Shares or any other
rights or warrants; or
(c) to effect any liquidation, dissolution or winding up of
Company;
then, and in any one or more of such cases, Company shall cause notice
thereof to be filed at least 15 days prior to the date on which (i) the
books of Company shall close, or a record be taken, for such dividend,
distribution or issuance of rights or warrants or (ii) consolidation,
merger, sale, lease, conveyance, liquidation, dissolution or winding up
shall be effective, and the date as of which it is expected that holders of
Preferred Shares or Common Shares of record shall be entitled to exchange
their Preferred Shares or Common Shares for Securities or other property
deliverable upon such consolidation, merger, sale, lease, conveyance,
liquidation, or winding up, as the case may be. Failure to give notice, or
any defect therein, shall not affect the legality or validity of such
dividend, distribution, consolidation, merger, sale, lease, conveyance,
liquidation, dissolution or winding up.
9.10 PURCHASE OF SHARES.
A. Preferred Shares. In addition to the conversion rights of
Lenders set forth herein and the rights of Lenders set forth herein to
purchase Common Shares, following Conversion Approval (or, if Conversion
Approval has not been obtained, to the extent conversion of the Loans does
not result in Lenders owning in the aggregate in excess of 19.9% of the
capital shares of Company) and Preferred Share Approval, at any time prior
to November 14, 1998, each Lender shall be entitled to purchase a number of
Preferred Shares equal to the amount that it would have been able to obtain
on conversion of a Loan pursuant to SUBSECTION 9.1A if its Loan Commitment
was fully utilized as contemplated herein: each Lender will have the
ability to purchase the number of Preferred Shares derived by dividing the
(i) difference between its Pro Rata Share of $20,000,000 and the sum of its
Pro Rata Share of the total amount of Loans funded pursuant hereto and the
aggregate purchase price of Common Shares purchased pursuant to SUBSECTION
9.10B by (ii) the purchase price (which is $100 per Preferred Share).
Lenders purchasing Preferred Shares pursuant to the provisions of this
subsection shall have the same rights as to the Preferred Shares so
purchased as those rights provided to Lenders converting Loans, as provided
in this SECTION 9.
B. Common Shares. In addition to the conversion rights of Lenders
set forth herein and the rights of Lenders set forth herein to purchase
Preferred Shares, following Conversion Approval (or, if Conversion Approval
has not been obtained, to the extent conversion of the Loans does not
result in Lenders owning in the aggregate in excess of 19.9% of the capital
shares of Company) at any time prior to November 14, 1998, each Lender
shall be entitled to purchase a number of Common Shares equal to the amount
that it would have been able to obtain on conversion of a Loan pursuant to
SUBSECTION 9.1B if its Loan Commitment was fully utilized as contemplated
herein: each Lender will have the ability to purchase the number of Common
Shares derived by dividing the (i) difference between its Pro Rata Share of
$20,000,000 and the sum of its Pro Rata Share of the total amount of Loans
funded pursuant hereto and the aggregate purchase price of Preferred Shares
purchased pursuant to SUBSECTION 9.10A by (ii) the purchase price, as
adjusted pursuant to SUBSECTION 9.4 (which, on the date hereof, is $5.15
per Common Share). Lenders purchasing Common Shares pursuant to the
provisions of this subsection shall have
the same rights as to the Common Shares so purchased as those rights
provided to Lenders converting Loans, as provided in this SECTION 9.
Section 10. AGENT
10.1 APPOINTMENT. Agent is hereby appointed and designated Agent here-
under and under the other Loan Documents and each Lender hereby authorizes
Agent to act as its agent, at the direction of Lenders, for the sole
purpose of receiving communications from, and sending communications to,
Company and its Subsidiaries (including communications regarding approvals
and consents), accepting payments of principal and interest under the Loan,
and such other actions as requested or approved by Requisite Lenders, all
in accordance with the terms of this Agreement and the other Loan
Documents. Agent agrees to act upon the express conditions contained in
this Agreement and the other Loan Documents, as applicable. The provisions
of this SECTION 10 are solely for the benefit of Agent and Lenders, and
neither Company nor any of its Subsidiaries shall have any rights as a
third party beneficiary of any of the provisions hereof (PROVIDED, HOWEVER,
Agent and Lenders agree that (i) the provisions of this SECTION 10 do not,
as between Company, on the one hand, and Agent and Lenders, on the other,
modify or alter the other provisions of this Agreement and the other Loan
Documents, (ii) Company may rely on the fact that as of the Closing Date
Agent has been duly appointed and designated by Lenders and is duly
authorized to act on behalf of Lenders in the capacity of Agent under this
Agreement and the other Loan Documents, for the purposes set forth above,
and (iii) Company may rely on a notice of resignation received from Agent
pursuant to SUBSECTION 10.4 below and a notice from Requisite Lenders of
the appointment of a successor Agent pursuant to said SUBSECTION 10.4). In
performing its functions and duties under this Agreement, Agent shall act
solely as an agent of Lenders and does not assume and shall not be deemed
to have assumed any obligation towards or relationship of agency or trust
with or for Company or any of its Subsidiaries.
10.2 POWERS; GENERAL IMMUNITY.
A. Duties Specified. Each Lender irrevocably authorizes Agent to
take such action on such Lender's behalf and to exercise such powers
hereunder and under the other Loan Documents as are specifically delegated
to Agent by the terms hereof and thereof, or as elsewhere may be agreed
among Agent and Lenders, together with such powers as are reasonably
incidental thereto. Agent shall have only those duties and responsi-
bilities that are expressly specified in this Agreement and the other Loan
Documents, or as elsewhere agreed among Agent and Lenders, and it may
perform such duties by or through its agents or employees. Agent shall not
have, by reason of this Agreement or any of the other Loan Documents, a
fiduciary relationship in respect of any Lender; and nothing in this
Agreement or any of the other Loan Documents, expressed or implied, is
intended to or shall be so construed as to impose upon Agent any
obligations in respect of this Agreement or any of the other Loan Documents
except as expressly set forth herein or therein or as elsewhere may be
agreed among Agent and Lenders.
B. No Responsibility for Certain Matters. Agent shall not be
responsible to any Lender for the execution, effectiveness, genuineness,
validity, enforceability, collectibility or sufficiency of this Agreement
or any other Loan Document or for any representations, warranties, recitals
or statements made herein or therein or made in any written or oral
statement or in any financial or other statements, instruments, reports or
certificates or any other documents furnished or made by Agent to Lenders
or by or on behalf of Company to Agent or any Lender in connection with the
Agreement or the Loan Documents, and the transactions contemplated hereby
or thereby or for the financial condition or business affairs of Company or
any other Person liable for the payment of any Obligations, nor shall Agent
be required to ascertain or inquire as to the performance or observance of
any of the terms, conditions, provisions, covenants or agreements contained
in any of the Loan Documents, or as to the use of the proceeds of the Loan
or as to the existence or possible existence of any Event of Default or
Potential Event of Default.
C. Exculpatory Provisions. Neither Agent nor any of its officers,
directors, employees or agents (specifically including Xxxxx X. Xxxxxxx,
Xxxxxx X. Xxxxx, Xxxx X. Waterfall and Xxxxx X. Xxxxxxx) shall be liable to
Lenders for any action taken or omitted by Agent under or in connection
with the Agreement or any of the Loan Documents, except that Agent shall be
liable to the extent caused by the gross negligence or willful misconduct
of Agent or Agent's officers, directors, employees or agents. If Agent
shall request instructions from Lenders with respect to any act or action
(including the failure to take an action) in connection with this Agreement
or any of the other Loan Documents, Agent shall be entitled to refrain from
such act or taking such action unless and until Agent shall have received
instructions from Requisite Lenders. Without prejudice to the generality
of the foregoing, (i) Agent shall be entitled to rely, and shall be fully
protected in relying, upon any communication, instrument or document
believed by it to be genuine and correct and to have been signed or sent by
the proper person or persons, and shall be entitled to rely and shall be
protected in relying on opinions and judgments of attorneys (who may be
attorneys for Company and its Subsidiaries), accountants, experts and other
professional advisors selected by it; and (ii) no Lender shall have any
right of action whatsoever against Agent as a result of Agent acting or
(where so instructed) refraining from acting under this Agreement or the
other Loan Documents in accordance with the instructions of Requisite
Lenders.
D. Affiliates of Agent Entitled to Act as Lender. The agency
hereby created shall in no way impair or affect any of the rights and
powers of, or impose any duties or obligations upon, any Affiliate of Agent
acting in its individual capacity as a Lender hereunder. With respect to
its participation in the Loan, Affiliates of Agent shall have the same
rights and powers hereunder as any other Lender and may exercise the same
as though it were not performing the duties and functions delegated to it
hereunder, and the term "Lender" or "Lenders" or any similar term shall,
unless the context clearly otherwise indicates, include Affiliates of Agent
in its individual capacity.
10.3 RIGHT TO INDEMNITY. Each Lender, in proportion to its Pro Rata
Share, severally agrees to indemnify Agent, to the extent that Agent shall
not have been reimbursed by Company or any of its Subsidiaries, for and
against any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses (including,
without limitation, counsel fees and disbursements) or disbursements of any
kind or nature whatsoever which may be imposed on, incurred by or asserted
against Agent in performing its duties hereunder or under the other Loan
Documents, or otherwise in its capacity as Agent in any way relating to or
arising out of this Agreement or the other Loan Documents; PROVIDED THAT no
Lender shall be liable for any portion of such liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements resulting from Agent's gross negligence or willful
misconduct. If any indemnity furnished to Agent for any purpose shall, in
the opinion of Agent, be insufficient or become impaired, Agent may call
for additional indemnity and cease, or not commence, to do the acts indem-
nified against until such additional indemnity is furnished.
10.4 SUCCESSOR AGENT. Agent may resign at any time under this Agreement
and the other Loan Documents by giving 30 days' prior written notice
thereof to Lenders and Company. Upon any such notice of resignation,
Requisite Lenders shall have the right, upon five Business Days' notice to
Company, to appoint a successor Agent. Upon the acceptance of any appoint-
ment as Agent hereunder by a successor Agent, that successor Agent shall
thereupon succeed to and become vested with all the rights, powers,
privileges and duties of the retiring Agent and the retiring Agent shall be
discharged from its duties and obligations under this Agreement. After any
retiring Agent's resignation hereunder as Agent, the provisions of this
SECTION 10 shall inure to its benefit as to any actions taken or omitted to
be taken by it while it was Agent under this Agreement.
[SIGNATURES ON NEXT PAGE]
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed and delivered by their respective officers
thereunto duly authorized as of the date first written above.
COMPANY: BANYAN STRATEGIC REALTY TRUST,
a Massachusetts business trust
By: /s/ XXXXXXX X. XXXXXX
------------------------------
Printed Name: Xxxxxxx X. Xxxxxx
------------------------------
Title: President
------------------------------
Notice Address:
000 Xxxxx Xxxxxx Xxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attention: General Counsel
Telephone: 000-000-0000
Telecopy: 000-000-0000
With a copy to:
Xxxxxxx & Xxxxxxxx Ltd.
000 Xxxxx Xxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxx, Esq.
Telephone: 000-000-0000
Telecopy: 000-000-0000
AGENT: MORGENS, WATERFALL, VINTIADIS & COMPANY, INC.,
a New York corporation
By: /s/ XXXXX X. XXXXXXX
------------------------------
Printed Name: Xxxxx X. Xxxxxxx
------------------------------
Title: Authorized Agent
------------------------------
[SIGNATURES CONTINUED ON NEXT PAGE]
LENDERS: RESTART PARTNERS, L.P.,
a Delaware limited partnership
By: PRIME GROUP L.P.,
a Delaware limited partnership,
its General Partner
By: PRIME GROUP, INC.,
a Delaware corporation,
its General Partner
By: Xxxxx X. Xxxxxxx
(whose signature appears below),
Authorized Agent
Pro Rata Share: 19.1%
RESTART PARTNERS II, L.P.,
a Delaware limited partnership
By: PRIME GROUP II, L.P.,
a Delaware limited partnership,
its General Partner
By: PRIME GROUP, INC.,
a Delaware corporation,
its General Partner
By: Xxxxx X. Xxxxxxx
(whose signature appears below),
Authorized Agent
Pro Rata Share: 31.60%
[SIGNATURES CONTINUED ON NEXT PAGE]
RESTART PARTNERS III, L.P.,
a Delaware limited partnership
By: PRIME GROUP III, L.P.,
a Delaware limited partnership,
its General Partner
By: PRIME GROUP, INC.,
a Delaware corporation,
its General Partner
By: Xxxxx X. Xxxxxxx
(whose signature appears below),
Authorized Agent
Pro Rata Share: 22.00%
[SIGNATURES CONTINUED ON NEXT PAGE]
RESTART PARTNERS IV, L.P.,
a Delaware limited partnership
By: PRIME GROUP IV, L.P.,
a Delaware limited partnership,
its General Partner
By: PRIME GROUP, INC.,
a Delaware corporation,
its General Partner
By: Xxxxx X. Xxxxxxx
(whose signature appears below),
Authorized Agent
Pro Rata Share: 13.90%
RESTART PARTNERS V, L.P.,
a Delaware limited partnership
By: PRIME GROUP V, L.P.,
a Delaware limited partnership,
its General Partner
By: PRIME GROUP INC.,
a Delaware corporation,
its General Partner
By: Xxxxx X. Xxxxxxx
(whose signature appears below),
Authorized Agent
Pro Rata Share: 4.60%
[SIGNATURES CONTINUED ON NEXT PAGE]
ENDOWMENT RESTART LLC,
a Delaware limited liability company
By: ENDOWMENT PRIME LLC,
a Delaware limited liability company,
its Managing Member
By: Xxxxx X. Xxxxxxx
(whose signature appears below),
Authorized Agent
Pro Rata Share: 5.00%
MORGENS WATERFALL INCOME PARTNERS, L.P.
a New York limited partnership
By: MW CAPITAL, LLC
a Delaware limited liability company
its General Partner
By: Xxxxx X. Xxxxxxx
(whose signature appears below),
Authorized Agent
Pro Rata Share: 3.80%
/s/ XXXXX X. XXXXXXX
____________________________________________
Xxxxx X. Xxxxxxx,
for the entities and in the capacities described above
[SIGNATURES CONTINUED ON NEXT PAGE]
Notice Address:
Morgens, Waterfall, Vintiadis & Company, Inc.
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xx. Xxxxx X. Xxxxxxx
Telephone: 000-000-0000
Telecopy: 000-000-0000
With a copy to:
O'Melveny & Xxxxx LLP
000 Xxxxx Xxxx Xxxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000-0000
Attention: Xxxx X. Xxxxx III, Esq.
Telephone: 000-000-0000
Telecopy: 000-000-0000
EXHIBIT I
FORM OF NOTE
BANYAN STRATEGIC REALTY TRUST
PROMISSORY NOTE DUE SEPTEMBER 30, 2002
$___________________ New York, New York
October 14, 1997
FOR VALUE RECEIVED, BANYAN STRATEGIC REALTY TRUST, a
Massachusetts business trust ("Company"), promises to pay to the order of
___________________________________________________ ("Payee") the principal
amount of ___________________________________________ Dollars
($_____________).
Company also promises to pay interest on the unpaid principal
amount hereof, from the date hereof until paid in full, at the rates and at
the times which shall be determined in accordance with the provisions of
that certain Convertible Term Loan Agreement dated as of October 10, 1997
by and among Company and the entities listed therein as Lenders, (said
Convertible Term Loan Agreement, as it may be amended, supplemented or
otherwise modified from time to time, being the "Agreement", the terms
defined therein and not otherwise defined herein being used herein as
therein defined).
This Note is one of Company's "Notes" in the aggregate
principal amount of $20,000,000.00 and is issued pursuant to and entitled
to the benefits of the Agreement, to which reference is hereby made for a
more complete statement of the terms and conditions under which the Loans
evidenced hereby were made and are to be repaid. Interest is payable at
the rate (including, without limitation, the default rate set forth in
SUBSECTION 2.2C of the Agreement) and at the times set forth in the
Agreement, and the entire outstanding principal balance of this Note, and
all accrued and unpaid interest thereon, is due and payable in full on
September 30, 2002.
All payments of principal and interest in respect of this Note
shall be made in lawful money of the United States of America by wire
transfer of same day funds to an account designated by Morgens, Waterfall,
Vintiadis & Company, Inc., as Agent for the benefit of Payee (in accordance
with the wiring instructions for Agent set forth in the Agreement) or at
such other place in the United States of America as shall be designated in
writing for such purpose in accordance with the terms of the Agreement.
Payee hereby agrees, by its acceptance hereof, that before disposing of
this Note or any part hereof it will make a notation hereon of all
principal payments previously made hereunder and of the date to which
interest hereon has been paid; PROVIDED, HOWEVER, that the failure to make
a notation of any payment made on this Note shall not limit or otherwise
affect the obligations of Company hereunder with respect to payments of
principal of or interest on this Note.
Whenever any payment on this Note shall be stated to be due on
a day which is not a Business Day, such payment shall be made on the next
succeeding Business Day and such extension of time shall be included in the
computation of the payment of interest on this Note.
This Note is subject to mandatory prepayment and prepayment at
the option of Company as provided in the Agreement.
THE AGREEMENT AND THIS NOTE SHALL BE GOVERNED BY, AND SHALL BE
CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE
OF NEW YORK, WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES.
Upon the occurrence of an Event of Default, the unpaid balance
of the principal amount of this Note, together with all accrued and unpaid
interest thereon, may become, or may be declared to be, due and payable in
the manner, upon the conditions and with the effect provided in the
Agreement. In addition, upon certain Events of Default under the
Agreement, the interest payable under this Note shall increase to the
default rate specified in SUBSECTION 2.2C of the Agreement.
The terms of this Note are subject to amendment only in the
manner provided in the Agreement.
No reference herein to the Agreement and no provision of this
Note or the Agreement shall alter or impair the obligations of Company,
which are absolute and unconditional, to pay the principal of and interest
on this Note at the place, at the respective times, and in the currency
herein prescribed.
Company promises to pay costs and expenses (including
reasonable attorneys' fees) as provided in SUBSECTION 8.2 of the Agreement
incurred in the collection and enforcement of this Note. Company and any
endorsers of this Note hereby consent to renewals and extensions of time at
or after the maturity hereof, without notice, and hereby waive diligence,
presentment, protest, demand and notice of every kind and, to the full
extent permitted by law, the right to plead any statute of limitations as a
defense to any demand hereunder.
THIS NOTE IS SUBJECT TO RESTRICTIONS ON TRANSFER OR ASSIGNMENT
AS PROVIDED IN SUBSECTIONS 8.1 AND 8.14 OF THE AGREEMENT.
IN WITNESS WHEREOF, Company has caused this Note to be duly
executed and delivered by its officer thereunto duly authorized as of the
date and at the place first written above.
BANYAN STRATEGIC REALTY TRUST,
a Massachusetts business trust
By: ____________________________________
Printed Name:
Title:
EXHIBIT II
[FORM OF COMPLIANCE CERTIFICATE]
COMPLIANCE CERTIFICATE
THE UNDERSIGNED HEREBY CERTIFY THAT:
(1) We are the duly elected [Title] and [Title] of BANYAN
STRATEGIC REALTY TRUST, a Massachusetts business trust ("Company");
(2) We have reviewed the terms of that certain Convertible
Term Loan Agreement dated as October 10, 1997, as amended, supplemented or
otherwise modified to the date hereof (said Convertible Term Loan
Agreement, as so amended, supplemented or otherwise modified, being the
"Agreement", the terms defined therein and not otherwise defined in this
Certificate (including Attachment No. 1 annexed hereto and made a part
hereof) being used in this Certificate as therein defined), by and among
Company, the entities listed therein as Lenders, and the terms of the other
Loan Documents, and we have made, or have caused to be made under our
supervision, a review in reasonable detail of the transactions and
condition of Company and its Subsidiaries during the accounting period
covered by the attached financial statements; and
(3) The examination described in paragraph (2) above did not
disclose, and to the best of our knowledge no condition or event has
occurred which constitutes an Event of Default or Potential Event of
Default during or at the end of the accounting period covered by the
attached financial statements or as of the date of this Certificate[,
except as set forth below].
[Set forth [below] [in a separate attachment to this
Certificate] are all exceptions to paragraph (3) above listing, in detail,
the nature of the condition or event, the period during which it has
existed and the action which Company has taken, is taking, or proposes to
take with respect to each such condition or event:
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
__________________________________________________________________________]
The foregoing certifications, together with the computations
set forth in Attachment No. 1 annexed hereto and made a part hereof and the
financial statements delivered with this Certificate in support hereof, are
made and delivered this __________ day of _____________, 199_ pursuant to
SUBSECTION 5.1(iii) of the Agreement.
BANYAN STRATEGIC REALTY TRUST
a Massachusetts business trust
By: ___________________________________
Title: ________________________________
By: ____________________________________
Title: _________________________________
ATTACHMENT NO. 1
TO COMPLIANCE CERTIFICATE
This Attachment No. 1 is attached to and made a part of a
Compliance Certificate dated as of ____________, 199_ and pertains to the
period from ____________, 199_ to ____________, 199_. Subsection
references herein relate to subsections of the Agreement.
A. Indebtedness
1. Indebtedness permitted under SUBSECTION 6.1(iv)
and Underwriting Guidelines for each Facility:
a. Proceeds of Loans used for acquisition: $_____________
b. Percentage of Acquisition Price:
_____________%
c. Other Indebtedness incurred with respect
to Facility: $_____________
d. Percentage of Acquisition Price:
_____________%
2. Maximum Percentage of other Indebtedness 75%
B. Maximum Leverage Ratio (as of _____________, 199_)
1. Consolidated Total Debt: $_____________
2. Consolidated Net Worth: $_____________
3. Leverage Ratio (1):(2): ____:1.00
4. Maximum ratio permitted under SUBSECTION 6.6A: 3.00:1.00
C. Minimum Consolidated Net Worth (as of ____________, 199_)
1. Consolidated Net Worth: $_____________
2. Minimum required under SUBSECTION 6.6B: $52,500,000
D. Debt Coverage Ratio (as of ________)
1. Income (see SUBSECTION 6.6C(i)(a)): $_____________
2. Interest Expense: $_____________
3. Depreciation and Amortization: $_____________
4. Amortization of Deferred Financing Fee: $_____________
5. Sum of 1 through 4: $_____________
6. Scheduled Debt Principal Payments
(including amortizations of scheduled
annual principal payments: $_____________
7. Sum of 2 and 6: $_____________
8. Ratio of 5 to 7: ___:1.00
9. Minimum Permitted Ratio: 1.5:1.00
E. Capital Expenditures and Tenant Improvements (as of ________)
1. Capital expenditures for Fiscal
Year-to-date: $_____________
2. Tenant improvements for Fiscal Year-to-Date: $_____________
3. Sum of 1 and 2: $_____________
4. Anticipated capital expenditures and tenant
improvements for Fiscal Year: $_____________
5. Percentage of actual capital expenditures and
tenant improvements (3 divided by 4): ___%
6. Maximum permissible percentage 115%
EXHIBIT III-A
POINT TO BE COVERED IN
OPINION OF XXXXXXX & XXXXXXXX LTD.
[Defined terms have meanings set forth in Agreement.]
[Opinion to recite materials reviewed and such assumptions and
qualifications that are satisfactory to counsel to Lenders.]
[Opinion to cover the effect on the subject transactions of
only United States Federal law and the laws of the State of Illinois.]
1. Neither the execution and delivery of the Agreement, the
Loan Documents to which Company is a party or the Share Purchase Agreement,
nor the Registration Rights Agreement, nor the issuance and payment of the
Notes (nor the issuance of the Shares), by Company nor the consummation of
the transactions contemplated by the Agreement, the Loan Documents to which
Company is a party or the Share Purchase Agreement, nor the compliance with
the terms and conditions thereof by Company conflicts with, results in a
breach or violation of, any present federal or Illinois statute, rule or
regulation binding on Company.
2. No consent, approval, authorizations or order of, or
qualification with any court, governmental body or agency is required under
any present federal or Illinois statute, rule or regulation binding on the
Company in connection with the execution and delivery by Company of the
Agreement, the Loan Documents, the Share Purchase Agreement or the
Registration Rights Agreement, or the extensions of credit under the
Agreement or the payment by Company of the Obligations thereunder or the
issuance and payment of the Notes or the issuance and sale of the Shares.
3. REIT Opinion.
4. The making of the Loans and the application of the
proceeds thereof as provided in the Agreement do not violate Regulation G,
T, U or X of the Board of Governors of the Federal Reserve System.
5. It is not necessary in connection with the execution and
delivery of the Notes or the Shares to Lenders to register the Notes, the
Shares or the Loans under the Securities Act of 1933, as amended (the
"Securities Act"), or to qualify any indenture in respect thereof under the
Trust Indenture Act of 1939, as amended.
6. Company is not an "investment company" or a company
"controlled" by an "investment company" as such terms are defined in the
Investment Company Act of 1940, as amended.
7. The reports filed by Company since December 31, 1995 (the
"Company Reports"), but prior to the date hereof, pursuant to the Exchange
Act, as of the respective dates of their filing, complied on their face in
all material respects with the requirements as to form under the Exchange
Act and the related rules and regulations thereunder.
8. The Shares have been duly authorized by all necessary
action and are validly issued and are fully paid and nonassessable.
Assuming the Lenders are acquiring the Shares in good faith without notice
of any adverse claim, Lenders will own the Shares free and clear of any
adverse claim.
9. Holders of Common Shares are not entitled to any
statutory preemptive rights to subscribed to any Shares.
10. Upon conversion of the Loans into Common Shares as
provided in the Agreement, such Common Shares will be validly issued, fully
paid and nonassessable.
EXHIBIT III-B
POINT TO BE COVERED IN
OPINION OF XXXXXX X. XXXXXXX, ESQ.
October 14, 1997
[Defined terms have meanings set forth in Agreement.]
[Opinion to recite materials reviewed and such assumptions and
qualifications that are satisfactory to counsel to Lenders.]
[Opinion to cover the effect on the subject transactions of
only the laws of the State of Illinois].
On the basis of the foregoing, and in reliance thereon, and
subject to the limitations, qualifications and exceptions set forth below,
we are of the opinion that:
Company is not required to be in Illinois or any other
jurisdiction qualified to do business.
1. Neither the execution and delivery of the Agreement, the
Loan Documents to which Company is a party, the Registration Rights
Agreement or the Share Purchase Agreement, nor the issuance and payment of
the Notes (nor the issuance of the Shares), by Company nor the consummation
of the transactions contemplated by the Agreement, the Loan Documents to
which Company is a party the Registration Rights Agreement or the Share
Purchase Agreement, nor the compliance with the terms and conditions
thereof by Company, (A) conflicts with, results in a breach or violation
of, or constitutes a default under, any of the terms, conditions or
provisions of (x) any term of any material agreement, instrument, order,
writ, judgment or decree known to me after due inquiry to which Company or
any of its Subsidiaries is a party or by which any of its respective
properties or assets are bound (B) results in the creation of any Lien upon
any of the properties or assets of Company or any of its Subsidiaries under
any agreement or order referred to in clause (x) above.
2. Each Subsidiary of Company that is a corporation or a
limited liability company is duly organized, validly existing and in good
standing under the laws of its jurisdiction of incorporation and has all
requisite corporate or other power and authority to own and operate its
properties and to carry on its business as now conducted. Except with
respect to those subsidiaries that are Massachusetts business trusts (as to
which Peabody & Xxxxx, Massachusetts counsel is rendering an opinion) each
Subsidiary of Company that is a trust, partnership or joint venture is
duly formed, validly existing and in good standing under the laws of its
jurisdiction of formation, and has all requisite power and authority to own
and operate its properties and to carry on
its business as now conducted. Each such Subsidiary is duly qualified to
do business, and is in good standing, in each jurisdiction in which it is
necessary to so qualify.
3. To the best of my knowledge other than as disclosed in
Schedule 4.6 annexed to the Agreement, there are no actions, suits or
proceedings pending or threatened against Company or any of its
Subsidiaries which have a significant likelihood of materially and
adversely affecting either the ability of Company to perform its
obligations under any Loan Document, the Registration Rights Agreement or
the Share Purchase Agreement, or the financial condition or operations of
Company and its Subsidiaries, taken as a whole.
EXHIBIT III-C
POINT TO BE COVERED IN
OPINION OF MASSACHUSETTS COUNSEL
October 14, 1997
[Defined terms have meanings set forth in Agreement.]
[Opinion to recite materials reviewed and such assumptions and
qualifications that are satisfactory to counsel to Lenders.]
[Opinion to cover the effect on the subject transactions of
only Massachusetts law.]
1. Company is a business trust duly organized, validly
existing and in good standing under the laws of the Commonwealth of
Massachusetts and has all requisite power and authority to own and operate
its properties and to carry on its business as now conducted.
2. Company has all requisite power and authority to execute,
deliver and perform the Agreement, the Loan Documents to which Company is a
party and the Share Purchase Agreement, the Registration Rights Agreement
to issue the Notes and the Common Shares to be issued pursuant to the Share
Purchase Agreement (the "Shares") and the Agreement, and to carry out the
transactions contemplated thereby. The authorized shares of beneficial
interest of Company consists of ___ Common Shares, no par value, of which
___________ Common Shares have been issued. Such Common Shares that are
outstanding have been duly authorized, are validly issued and are fully
paid and nonassessable shares of beneficial interest.
3. The execution, delivery and performance of the Agreement,
the Loan Documents to which Company is a party and the Share Purchase
Agreement, the issuance and payment of the Notes, and the issuance of the
Shares have been duly authorized by all necessary action on the part of
Company. The Agreement, the Loan Documents to which Company is a party,
the Share Purchase Agreement, the Registration Rights Agreement and the
Notes have been duly executed and delivered by Company.
4. Neither the execution and delivery of the Agreement, the
Loan Documents to which Company is a party or the Share Purchase Agreement,
nor the Registration Rights Agreement, nor the issuance and payment of the
Notes (nor the issuance of the Shares), by Company nor the consummation of
the transactions contemplated by the Agreement, the Loan Documents to which
Company is a party or the Share Purchase Agreement nor the Registration
Rights Agreement, nor the compliance with the terms and conditions thereof
by Company, (A) conflicts with, results in a breach or violation of,
(x) any present federal statute, rule or regulation binding on
Company, or (B) results in the creation of any Lien upon any of the
properties or assets of Company.
5. Each Subsidiary of Company that is Massachusetts business
trust liability company is duly organized, validly existing and in good
standing under the laws of the Commonwealth of Massachusetts and has all
requisite power and authority to own and operate its properties and to
carry on its business as now conducted.
6. No consents or approvals of, authorizations by, or
registrations, declarations or filings with, any Massachusetts governmental
authority are required by Company in connection with the execution and
delivery by Company of the Agreement, the Loan Documents or the Share
Purchase Agreement, the Registration Rights Agreement, or the extensions of
credit under the Agreement or the payment by Company of the Obligations
thereunder or the issuance and payment of the Notes or the issuance and
sale of the Shares.
Approval of the Preferred Shares Amendments by Shareholders and
conversion of the Loan into Preferred Shares, such Preferred Shares will be
validly issued, fully paid and nonassessable preferred shares of beneficial
interest, entitled to the benefits of the Preferred Share Amendment.
EXHIBIT IV
FORM OF AMENDMENT TO THE DECLARATION OF TRUST
of
BANYAN STRATEGIC REALTY TRUST,
a Massachusetts business trust
Form of Amendment to the Declaration of Trust to be filed as part of
a Proxy to shareholders which is expected to be filed in late 1997 or early
1998.
EXHIBIT V
[FORM OF NOTICE OF BORROWING]
NOTICE OF BORROWING
Pursuant to the Convertible Term Loan Agreement, dated as of
October 10, 1997 (such Agreement, as it may be amended, amended and
restated, supplemented or otherwise modified from time to time, the
"Agreement"; capitalized terms used herein without definition shall have
the meanings assigned those terms in the Agreement) by and among Banyan
Strategic Realty Trust Company, a Massachusetts business trust, ("Company")
and the Lenders party thereto, pursuant to which Morgens, Waterfall,
Vintiadis & Company, Inc. acts as agent ("Agent"), this represents the
Company's request to borrow on ____________ 19__, a Business Day prior to
the Commitment Termination Date $____________ in the aggregate, from
Lenders on a pro rata basis. The proceeds of such Loans are to be
deposited in the account of Company as follows:
_____________________________________.
The undersigned officer certifies on behalf of Company that (1)
the representations and warranties contained in the Agreement and in the
other Loan Documents are true, correct and complete in all material
respects on and as of the Funding Date to the same extent as though made on
and as of such date, except to the extent such representations and
warranties specifically relate to an earlier date, in which case such
representations and warranties are true, correct and complete in all
material respects on and as of such earlier date; (2) no event has occurred
and is continuing as of the Funding Date, or would result from the
consummation of the making of the Loans on such date, that would constitute
an Event of Default or Potential Event of
Default; (3) Company has performed in all material respect all agreements
and satisfied all conditions which the Agreement provides shall be
performed or satisfied by Company on or before the Funding Date; (4) no
order, judgment or decree of any court, arbitrator or government authority
is in effect that purports to enjoin or restrain any Lender from making the
Loan to be made by it pursuant hereto; (5) the making of the Loans on the
Funding Date will not violate any law, including, without limitation,
Regulation G, Regulation T, Regulation U or Regulation X of the Board of
Governors of the Federal Reserve System; and (6) the use of proceeds of the
Loans made pursuant hereto is in accordance with the Underwriting
Guidelines.
Dated: ____________________
BANYAN STRATEGIC REALTY TRUST COMPANY
By:__________________________________
EXHIBIT VI
FORM OF GUARANTY
This Limited Guaranty is entered into as of ____________, 19__
by [NAME OF GUARANTOR], a __________ corporation ("Guarantor"), in favor of
and for the benefit of the lenders ("Lenders") party to that certain
Convertible Term Loan Agreement dated as of October 10, 1997 by and among
Banyan Strategic Realty Trust, a Massachusetts business trust ("Company")
and Lenders, pursuant to which Morgens, Waterfall, Vintiadis & Company,
Inc. acts as agent ("Agent") (said Convertible Term Loan Agreement, as it
may hereafter be amended, supplemented or otherwise modified from time to
time, being the "Agreement"; capitalized terms defined therein and not
otherwise defined herein being used herein as therein defined).
In order to induce Lenders to extend credit to Company pursuant
to the Agreement, Guarantor hereby irrevocably and unconditionally
guaranties, as primary obligor and not merely as surety, the due and
punctual payment in full of all Guarantied Obligations (as hereinafter
defined) when the same shall become due, whether at stated maturity, by
acceleration, demand or otherwise (including amounts that would become due
but for the operation of the automatic stay under Section 362(a) of the
Bankruptcy Code, 11 U.S.C. Section 362(a)). The term "Guarantied
Obligations" is used herein in its most comprehensive sense and includes
any and all Obligations of Company now or hereafter made, incurred or
created, whether absolute or contingent, liquidated or unliquidated,
whether due or not due, and however arising under or in connection with the
Agreement and the other Loan Documents, including those arising under
successive borrowing transactions under the Agreement which shall either
continue the Obligations of Company or from time to time renew them after
they have been satisfied, subject to the provisions of the succeeding
paragraph.
Notwithstanding any other provision of this Guaranty, the
obligation of the Guarantor hereunder will not exceed
______________________ Dollars ($___________) on account of principal PLUS
interest properly applicable thereto in accordance with the Agreement PLUS
expenses of Lenders or Agent pursuant to subsection 8.2 of the Agreement.
This limitation on the liability of Guarantor hereunder is not intended to
relieve Guarantor of its obligations hereunder upon payment by Company or
any other guarantor of all or a part of the Obligations of Company under
the Loan Documents, but is merely a statement of the limited amount of the
Guarantied Obligations, which may be less than the entire amount of the
Obligations of Company under the Loan Documents.
Guarantor agrees that its obligations hereunder are
irrevocable, absolute, independent and unconditional and shall not be
affected by any circumstance which constitutes a legal or equitable
discharge of a guarantor or surety other than payment in full of the
Guarantied Obligations. In furtherance of the foregoing and without
limiting the generality thereof, Guarantor agrees as follows: (a) this
Guaranty is a guaranty of payment when due and not of collectibility;
(b) Agent or any Lender may from time to
time, without notice or demand and without affecting the validity or
enforceability of this Guaranty or giving rise to any limitation,
impairment or discharge of Guarantor's liability hereunder, (i) renew,
extend, accelerate or otherwise change the time, place, manner or terms of
payment of the Guarantied Obligations, (ii) settle, compromise, release or
discharge, or accept or refuse any offer of performance with respect to, or
substitutions for, the Guarantied Obligations or any agreement relating
thereto and/or subordinate the payment of the same to the payment of any
other obligations, (iii) request and accept other guaranties of the
Guarantied Obligations and take and hold security for the payment of this
Guaranty or the Guarantied Obligations, (iv) release, exchange, compromise,
subordinate or modify, with or without consideration, any security for
payment of the Guarantied Obligations, any other guaranties of the
Guarantied Obligations, or any other obligation of any Person with respect
to the Guarantied Obligations, (v) enforce and apply any security now or
hereafter held by or for the benefit of Agent or any Lender in respect of
this Guaranty or the Guarantied Obligations and direct the order or manner
of sale thereof, or exercise any other right or remedy that Agent or
Lenders, or any of them, may have against any such security, as Agent in
its discretion may determine consistent with the Agreement and any
applicable security agreement, including foreclosure on any such security
pursuant to one or more judicial or nonjudicial sales, whether or not every
aspect of any such sale is commercially reasonable, and (vi) exercise any
other rights available to Agent or Lenders, or any of them, under the Loan
Documents, at law or in equity; and (c) this Guaranty and the obligations
of Guarantor hereunder shall be valid and enforceable and shall not be
subject to any limitation, impairment or discharge for any reason (other
than payment in full of the Guarantied Obligations), including without
limitation the occurrence of any of the following, whether or not Guarantor
shall have had notice or knowledge of any of them: (i) any failure to
assert or enforce or agreement not to assert or enforce, or the stay or
enjoining, by order of court, by operation of law or otherwise, of the
exercise or enforcement of, any claim or demand or any right, power or
remedy with respect to the Guarantied Obligations or any agreement relating
thereto, or with respect to any other guaranty of or security for the
payment of the Guarantied Obligations, (ii) any waiver, amendment or
modification of, or any consent to departure from, any of the terms or
provisions (including without limitation provisions relating to events of
default) of the Agreement, any of the other Loan Documents or any agreement
or instrument executed pursuant thereto, or of any other guaranty or
security for the Guarantied Obligations, (iii) the Guarantied Obligations,
or any agreement relating thereto, at any time being found to be illegal,
invalid or unenforceable in any respect, (iv) the application of payments
received from any source to the payment of indebtedness other than the
Guarantied Obligations, even though Agent or Lenders, or any of them, might
have elected to apply such payment to any part or all of the Guarantied
Obligations, (v) any failure to perfect or continue perfection of a
security interest in any collateral which secures any of the Guarantied
Obligations, (vi) any defenses, set-offs or counterclaims which Company may
allege or assert against Agent or any Lender in respect of the Guarantied
Obligations, including but not limited to failure of consideration, breach
of warranty, payment, statute of frauds, statute of limitations, accord and
satisfaction and usury, and (vii) any other act or thing or omission, or
delay to do any other act or thing, which may or might in any manner or to
any extent vary the risk of Guarantor as an obligor in respect of the
Guarantied Obligations.
Guarantor hereby waives, for the benefit of Lenders and Agent:
(a) any right to require Agent or Lenders, as a condition of payment or
performance by Guarantor, to (i) proceed against Company, any other
guarantor of the Guarantied Obligations or any other Person, (ii) proceed
against or exhaust any security held from Company, any other guarantor of
the Guarantied Obligations or any other Person, (iii) proceed against or
have resort to any balance of any deposit account or credit on the books of
Agent or any Lender in favor of Company or any other Person, or (iv) pursue
any other remedy in the power of Agent or any Lender whatsoever; (b) any
defense arising by reason of the incapacity, lack of authority or any
disability or other defense of Company including, without limitation, any
defense based on or arising out of the lack of validity or the
unenforceability of the Guarantied Obligations or any agreement or
instrument relating thereto or by reason of the cessation of the liability
of Company from any cause other than payment in full of the Guarantied
Obligations; (c) any defense based upon any statute or rule of law which
provides that the obligation of a surety must be neither larger in amount
nor in other respects more burdensome than that of the principal; (d) any
defense based upon Agent's or any Lender's errors or omissions in the
administration of the Guarantied Obligations, except behavior which amounts
to bad faith; (e) (i) any principles or provisions of law, statutory or
otherwise, which are or might be in conflict with the terms of this
Guaranty and any legal or equitable discharge of Guarantor's obligations
hereunder, (ii) the benefit of any statute of limitations affecting
Guarantor's liability hereunder or the enforcement hereof, (iii) any rights
to set-offs, recoupments and counterclaims, and (iv) promptness, diligence
and any requirement that Agent or any Lender protect, secure, perfect or
insure any security interest or lien or any property subject thereto;
(f) notices, demands, presentments, protests, notices of protest, notices
of dishonor and notices of any action or inaction, including acceptance of
this Guaranty, notices of default under the Agreement or any agreement or
instrument related thereto, notices of any renewal, extension or
modification of the Guarantied Obligations or any agreement related
thereto, notices of any extension of credit to Company and notices of any
of the matters referred to in the preceding paragraph and any right to
consent to any thereof; and (g) to the fullest extent permitted by law, any
defenses or benefits that may be derived from or afforded by law which
limit the liability of or exonerate guarantors or sureties, or which may
conflict with the terms of this Guaranty.
Until the Guarantied Obligations shall have been paid in full
and the Loan Commitments shall have terminated, Guarantor shall withhold
exercise of (a) any claim, right or remedy, direct or indirect, that
Guarantor now has or may hereafter have against Company or any of its
assets in connection with this Guaranty or the performance by Guarantor of
its obligations hereunder, in each case whether such claim, right or remedy
arises in equity, under contract, by statute, under common law or otherwise
and including without limitation (i) any right of subrogation,
reimbursement or indemnification that Guarantor now has or may hereafter
have against Company, (ii) any right to enforce, or to participate in, any
claim, right or remedy that Agent or any Lender now has or may hereafter
have against Company, and (iii) any benefit of, and any right to
participate in, any collateral or security now or hereafter held by Agent
or any Lender, and (b) any right of contribution Guarantor may have against
any other guarantor of any of the Guarantied Obligations. Guarantor
further agrees that, to the extent the agreement to
withhold the exercise of its rights of subrogation, reimbursement,
indemnification and contribution as set forth herein is found by a court of
competent jurisdiction to be void or voidable for any reason, any rights of
subrogation, reimbursement or indemnification Guarantor may have against
Company or against any collateral or security, and any rights of
contribution Guarantor may have against any such other guarantor, shall be
junior and subordinate to any rights Agent or Lenders may have against
Company, to all right, title and interest Agent or Lenders may have in any
such collateral or security, and to any right Agent or Lenders may have
against such other guarantor.
Any indebtedness of Company now or hereafter held by Guarantor
is hereby subordinated in right of payment to the Guarantied Obligations,
and any such indebtedness of Company to Guarantor collected or received by
Guarantor after an Event of Default has occurred and is continuing shall be
held in trust for Agent on behalf of Lenders and shall forthwith be paid
over to Agent for the benefit of Lenders to be credited and applied against
the Guarantied Obligations.
Guarantor agrees to pay, or cause to be paid, on demand, and to
save Agent and Lenders harmless against liability for, any and all costs
and expenses (including fees and disbursements of counsel and allocated
costs of internal counsel) incurred or expended by Agent or any Lender in
connection with the enforcement of or preservation of any rights under this
Guaranty.
It is not necessary for Lenders or Agent to inquire into the
capacity or powers of Guarantor or Company or the officers, directors or
any agents acting or purporting to act on behalf of any of them.
Lenders and Agent shall have no obligation to disclose or
discuss with Guarantor their assessment, or Guarantor's assessment, of the
financial condition of Company. Guarantor has adequate means to obtain
information from Company on a continuing basis concerning the financial
condition of Company and its ability to perform its obligations under the
Loan Documents, and Guarantor assumes the responsibility for being and
keeping informed of the financial condition of Company and of all
circumstances bearing upon the risk of nonpayment of the Guarantied
Obligations. Guarantor hereby waives and relinquishes any duty on the part
of Agent or any Lender to disclose any matter, fact or thing relating to
the business, operations or condition of Company now known or hereafter
known by Agent or any Lender.
The rights, powers and remedies given to Lenders and Agent by
this Guaranty are cumulative and shall be in addition to and independent of
all rights, powers and remedies given to Lenders and Agent by virtue of any
statute or rule of law or in any of the other Loan Documents or any
agreement between Guarantor and Lenders and/or Agent or between Company and
Lenders and/or Agent. Any forbearance or failure to exercise, and any
delay by any Lender or Agent in exercising, any right, power or remedy
hereunder shall not impair any such right, power or remedy or be construed
to be a waiver thereof, nor shall it preclude the further exercise of any
such right, power or remedy.
Guarantor acknowledges and agrees that any interest on any
portion of the Guarantied Obligations which accrues after the commencement
of any proceeding, voluntary or involuntary, involving the bankruptcy,
insolvency, receivership, reorganization, liquidation or arrangement of
Company (or, if interest on any portion of the Guarantied Obligations
ceases to accrue by operation of law by reason of the commencement of said
proceeding, such interest as would have accrued on such portion of the
Guarantied Obligations if said proceeding had not been commenced) shall be
included in the Guarantied Obligations because it is the intention of
Guarantor and Agent that the Guarantied Obligations which are guarantied by
Guarantor pursuant to this Guaranty should be determined without regard to
any rule of law or order which may relieve Company of any portion of such
Guarantied Obligations.
In the event that all or any portion of the Guarantied
Obligations are paid by Company or any other guarantor, the obligations of
Guarantor hereunder shall continue and remain in full force and effect or
be reinstated, as the case may be, in the event that all or any part of
such payment(s) are rescinded or recovered directly or indirectly from
Agent or any Lender as a preference, fraudulent transfer or otherwise, and
any such payments which are so rescinded or recovered shall constitute
Guarantied Obligations for all purposes under this Guaranty.
Guarantor hereby represents and warrants to Lenders that:
(a) Guarantor is duly organized, validly existing and in good standing
under the laws of the state of its [incorporation][organization];
(b) Guarantor has the power, authority and legal right to execute, deliver
and perform this Guaranty and has taken all necessary action to authorize
its execution, delivery and performance of this Guaranty; (c) this Guaranty
has been duly executed and delivered by a duly authorized signatory of
Guarantor, and this Guaranty constitutes the legally valid and binding
obligation of Guarantor, enforceable against Guarantor in accordance with
its terms, except as enforcement may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or other similar laws or equitable
principles relating to or limiting creditors' rights generally; and (d) the
execution, delivery and performance of this Guaranty will not violate any
provision of any existing law or regulation binding on Guarantor, or any
order, judgment, award or decree of any court, arbitrator or governmental
authority binding on Guarantor, or the certificate of incorporation or
bylaws of Guarantor or any securities issued by Guarantor, or any mortgage,
indenture, lease, contract or other agreement, instrument or undertaking to
which Guarantor is a party or by which Guarantor or any of its assets may
be bound, the violation of which would have a material adverse effect on
the business, operations, assets or financial condition of Guarantor, and
will not result in, or require, the creation or imposition of any Lien on
any of its property, assets or revenues pursuant to the provisions of any
such mortgage, indenture, lease, contract or other agreement, instrument or
undertaking.
In case any provision in or obligation under this Guaranty
shall be invalid, illegal or unenforceable in any jurisdiction, the
validity, legality and enforceability of the remaining provisions or
obligations, or of such provision or obligation in any other jurisdiction,
shall not in any way be affected or impaired thereby.
THIS GUARANTY AND THE RIGHTS AND OBLIGATIONS OF GUARANTOR,
AGENT AND LENDERS HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED
AND ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK
(INCLUDING WITHOUT LIMITATION SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW
OF THE STATE OF NEW YORK), WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES.
This Guaranty is a continuing guaranty and shall be binding
upon Guarantor and its successors and assigns, and Guarantor hereby
irrevocably waives any right to revoke this Guaranty as to future
transactions giving rise to any Guarantied Obligations. This Guaranty
shall inure to the benefit of Lenders, Agent and their respective
successors and assigns.
ALL JUDICIAL PROCEEDINGS BROUGHT AGAINST GUARANTOR ARISING OUT
OF OR RELATING TO THIS GUARANTY MAY BE BROUGHT IN ANY STATE OR FEDERAL
COURT OF COMPETENT JURISDICTION IN THE STATE OF NEW YORK, AND BY EXECUTION
AND DELIVERY OF THIS GUARANTY GUARANTOR ACCEPTS FOR ITSELF AND IN
CONNECTION WITH ITS PROPERTIES, GENERALLY AND UNCONDITIONALLY, THE NONEX-
CLUSIVE JURISDICTION OF THE AFORESAID COURTS AND WAIVES ANY DEFENSE OF
FORUM NON CONVENIENS AND IRREVOCABLY AGREES TO BE BOUND BY ANY JUDGMENT
RENDERED THEREBY IN CONNECTION WITH THIS GUARANTY. Guarantor hereby agrees
that service of all process in any such proceeding in any such court may be
made by registered or certified mail, return receipt requested, to
Guarantor at its address set forth below its signature hereto, such service
being hereby acknowledged by Guarantor to be sufficient for personal
jurisdiction in any action against Guarantor in any such court and to be
otherwise effective and binding service in every respect. Nothing herein
shall affect the right to serve process in any other manner permitted by
law or shall limit the right of Agent or any Lender to bring proceedings
against Guarantor in the courts of any other jurisdiction.
GUARANTOR AND, BY ITS ACCEPTANCE OF THE BENEFITS HEREOF, AGENT
EACH HEREBY AGREES TO WAIVE ITS RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY
CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS GUARANTY. The
scope of this waiver is intended to be all-encompassing of any and all
disputes that may be filed in any court and that relate to the subject
matter of this transaction, including without limitation contract claims,
tort claims, breach of duty claims and all other common law and statutory
claims. Guarantor and, by its acceptance of the benefits hereof, Agent
each (i) acknowledges that this waiver is a material inducement for
Guarantor and Agent to enter into a business relationship, that Guarantor
and Agent have already relied on this waiver in entering into this Guaranty
or accepting the benefits thereof, as the case may be, and that each will
continue to rely on this waiver in their related future dealings, and
(ii) further warrants and represents that each has reviewed this waiver
with its legal counsel and that each knowingly and voluntarily waives its
jury trial rights following consultation with legal counsel. THIS WAIVER
IS IRREVOCABLE, MEANING THAT IT MAY NOT BE
MODIFIED EITHER ORALLY OR IN WRITING, AND THIS WAIVER SHALL APPLY TO ANY
SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS OF THIS
GUARANTY. In the event of litigation, this Guaranty may be filed as a
written consent to a trial by the court.
IN WITNESS WHEREOF, Guarantor has [executed this Guaranty]
[caused this Guaranty to be duly executed and delivered by its officer
thereunto duly authorized] as of the date first written above.
[NAME OF GUARANTOR]
By: __________________________
[Title:_______________________]
Address: __________________________
__________________________
__________________________
SCHEDULE A
Restart Partners, L.P.
Restart Partners II, L.P.
Restart Partners III, L.P.
Restart Partners IV, L.P.
Restart Partners V, L.P.
Endowment Restart LLC
Morgens Waterfall Income Partners
SCHEDULE 4.1
SUBSIDIARIES OF COMPANY
SCHEDULE 4.6
LITIGATION
NONE
SCHEDULE 4.13
ENVIRONMENTAL MATTERS
NONE
SCHEDULE 4.15
INSURANCE
SCHEDULE 6.1
EXISTING INDEBTEDNESS
SEE SCHEDULE 4.5
SCHEDULE 6.2
EXISTING LIENS
SEE SCHEDULE 4.5
SCHEDULE 6.4
EXISTING CONTINGENT OBLIGATIONS
NONE
