AMENDED AND RESTATED
CREDIT AGREEMENT
Dated as of November 21, 1996
between
Xxxxxxxxxx Realty Investors
and
Texas Commerce Bank National Association,
as Agent, and individually as a Bank,
and
The Banks Defined Herein
TABLE OF CONTENTS
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Page
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ARTICLE I DEFINITIONS AND ACCOUNTING TERMS
1.01. Certain Defined Terms 1
1.02. Other Defined Terms. 16
ARTICLE II AMOUNTS AND TERMS OF THE ADVANCES; LETTERS OF CREDIT
2.01. The Revolving Credit Loan; Letters of Credit; Term Loan 16
2.02. Making the Advances on the Revolving Credit Loan 19
2.03. Issuing the Letters of Credit 20
2.04. Fees 29
2.05. Reduction of the Commitments 31
2.06. Interest 31
2.07. Additional Interest on LIBOR Rate Advances 32
2.08. Interest Rate Determination and Protection 33
2.09. Voluntary Interest Conversion of Advances 34
2.10. Funding Losses Relating to LIBOR Rate Advances 34
2.11. Extension of Commitments 35
ARTICLE III PAYMENTS, PREPAYMENTS, INCREASED COSTS AND TAXES
3.01. Payments and Computations 36
3.02. Voluntary Prepayments 37
3.03. Mandatory Prepayments 37
3.04. Increased Costs; Capital Adequacy 38
3.05. Taxes 38
3.06. Certificate of Bank 39
ARTICLE IV CONDITIONS OF LENDING
4.01. Conditions Precedent to Initial Advances and Issuance of Letters of
Credit 39
4.02. Conditions Precedent to Each Borrowing 41
ARTICLE V REPRESENTATIONS AND WARRANTIES
5.01. Existence 41
5.02. Financial Condition 42
5.03. Use of Proceeds; Margin Stock 42
5.04. Binding Obligations 42
5.05. No Conflict or Resultant Lien 43
5.06. Compliance with Other Agreements 43
5.07. No Consent 43
5.08. Litigation 43
5.09. Taxes; Governmental Charges 43
5.10. Full Disclosure 43
5.11. Investment Company Act 44
5.12. Compliance with Law 44
5.13. ERISA 44
5.14. No Default or Event of Default 44
5.15. Permits and Licenses 44
5.16. Insurance 44
ARTICLE VI AFFIRMATIVE COVENANTS OF THE BORROWER
6.01. Reporting and Notice Requirements 45
6.02. Maintenance 47
6.03. Insurance 48
6.04. Taxes and Other Claims 48
6.05. Right of Inspection 48
6.06. Guarantees of Subsidiaries 48
6.07. Compliance with Law 49
6.08. Delivery of Certain Certificates 49
ARTICLE VII NEGATIVE COVENANTS
7.01. Liens, Etc 49
7.02. Limitations on Incurrence of Debt 49
7.03. Unimproved Real Property 50
7.04. Sale or Other Disposition of Real Property 50
7.05. Mergers; Consolidations 51
7.06. Investments, Loans, and Advances 51
7.07. Coverage Ratio 52
7.08. Transactions with Affiliates 53
7.09. Change of Business 53
7.10. Intentionally Omitted 53
7.11. Amendment of Organizational Documents 53
7.12. Guarantees 53
7.13. Assets Retained 54
ARTICLE VIII EVENTS OF DEFAULT
8.01. Events of Default 55
ARTICLE IX THE AGENT
9.01. Authorization and Action 57
9.02. Agent's Reliance, Etc 57
9.03. TCB and Affiliates 58
9.04. Bank Credit Decision 58
9.05. Indemnification 58
9.06. Successor Agent 59
9.07. Agent's Reliance 60
9.08. Defaults 60
ARTICLE X MISCELLANEOUS
10.01. Amendments, Etc 60
10.02. Notices, Etc 61
10.03. No Waiver; Remedies 61
10.04. Costs, Expenses and Taxes 61
10.05. Right of Set-off 62
10.06. Sharing of Payments, Etc. 62
10.07. Binding Effect 62
10.08. Assignments and Participations 62
10.09. Limitation on Agreements 64
10.10. Severability 65
10.11. Governing Law 66
10.12. SUBMISSION TO JURISDICTION; WAIVERS 66
10.13. Execution in Counterparts 66
10.14. Liability of Borrower 66
10.15. FINAL AGREEMENT 67
EXHIBITS
Exhibit 1.01-A - Form of Guaranty
Exhibit 1.01-B - Existing Letters of Credit
Exhibit 1.01-C - Definitions Governing Letters of Credit Supporting Bonds
Exhibit 2.02(a) - Notice of Borrowing
Exhibit 2.02(c) - Form of Notes
Exhibit 2.03 - Form of Letter of Credit Request
Exhibit 2.09 - Form of Notice of Interest Conversion
Exhibit 5.01 - Subsidiaries
Exhibit 5.08 - Material Litigation
Exhibit 6.01(c) - Form of Compliance Certificate
Exhibit 10.08 - Form of Assignment and Acceptance
AMENDED AND RESTATED
CREDIT AGREEMENT
Dated as of November 21, 1996
Xxxxxxxxxx Realty Investors, a Texas real estate investment trust
(the "Borrower"), Texas Commerce Bank National Association, a national banking
--------
association (in its individual capacity, "TCB"), NationsBank of Texas, N.A., a
---
national banking association, ("NationsBank"), Signet Bank ("Signet"),
Commerzbank, A.G., a domestic branch of a bank organized under the laws of
Germany ("Commerzbank"), The Sumitomo Bank, Limited, a Japanese banking
corporation ("Sumitomo") and any bank that may hereafter become a party
hereto in accordance with the provisions hereof (each individually, a "Bank"
----
and collectively, the "Banks"), TCB as Agent hereunder (in such capacity, the
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"Agent") for the Banks hereunder, NationsBank, in its capacity as Documentary
-----
Agent hereunder, and Commerzbank, in its capacity as Co-Agent hereunder,
hereby agree as follows:
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
SECTION 1.01. Certain Defined Terms. As used in this Credit
---------------------
Agreement (the "Agreement"), the following terms shall have the following
---------
meanings (such meanings to be equally applicable to both the singular and
plural forms of the terms defined):
"Act" shall have the meaning specified in Section 5.01.
---
"Adjusted Net Proceeds" has the meaning specified in Section 7.04.
-----------------------
"Advance" means the Revolving Credit Advances provided for in Section
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2.01(a) hereof, and on and after the Conversion Date, means the Term Loan
Advances provided for in Section 2.01(c).
"Affiliate" means any Person which, directly or indirectly, controls or
---------
is controlled by or is under common control with another Person. For purposes
of this definition, "control" (including, with correlative meanings, the terms
"controlled by" and "under common control with"), as used with respect to any
Person, means the power to direct or cause the direction of the management and
policies of such Person, directly or indirectly, whether through the ownership
of voting securities or by contract or otherwise.
"Annual Date" means, during the first 365 days of the term of this
------------
Agreement, the date which is 364 days from and after the Closing Date, and
thereafter, means the anniversary of such date in each succeeding year.
"Annual Service Charge" means, for any Calculation Period, the sum of (i)
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the amount accrued during such period in respect of interest (including the
interest component of Capitalized Lease obligations) and original issue
discount of Debt of the Borrower and its Subsidiaries, plus (ii) amounts
----
accrued by the Borrower and its Subsidiaries in respect of Disqualified Stock
(including, without limitation, dividends payable thereon).
"Applicable Margin" shall mean with respect to any Advance, the rate per
------------------
annum for the respective Type of Advance indicated below for the credit rating
assigned to (or in respect of) long-term, senior unsecured Debt of the
Borrower by S&P, as reflected on the most recent Compliance Certificate of the
Borrower delivered in accordance with Section 6.01(c), or the most recent
Rating Certificate delivered in accordance with Section 6.01(h), as the case
may be, and shall become effective with respect to each such Advance requested
by the Borrower on the applicable Calculation Date, and shall remain in effect
to (but not including) the next Calculation Date:
If the credit rating determined
on any Calculation Date is: The Applicable Margin for the Type of
-------------------------------
Advance indicated is:
-------------------------------------
For For a
Revolving Term
Loan: Loan:
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A+, A or A-, or better (a) LIBOR Rate Advance .40% .65%
(b) Effective Federal Funds
Rate Advance .58% .83%
BBB+ (a) LIBOR Rate Advance .65% .90%
(b) Effective Federal Funds
Rate Advance . 83% 1.08%
BBB,BBB- (a) LIBOR Rate Advance .85% 1.10%
(b) Effective Federal Funds
Rate Advance 1.03% 1.28%
BB+ and below (a) LIBOR Rate Advance 1.25% 1.50%
(b) Effective Federal Funds 1.43%
Rate Advance 1.68%
; provided that, if at any time no such credit rating shall be assigned
to (or in respect of) long-term, senior unsecured Debt of the Borrower by S&P,
the "Applicable Margin" shall mean the rate per annum for the respective Type
of Advance indicated below for the Coverage Ratio in effect, as reflected on
the most recent Compliance Certificate of the Borrower delivered to the Agent
in accordance with Section 6.01(c), or the most recent Rating Certificate
delivered in accordance with Section 6.01(h), as the case may be, and shall
become effective with respect to each such Advance requested by the Borrower
on the applicable Calculation Date, and shall remain in effect to (but not
including) the next Calculation Date:
If the Coverage Ratio The Applicable Margin for the
determined on any Calculation Type of Advance indicated is:
-------------------------------- --------------------------------
Date is: For Revolving
-------------------------------- --------------
Loan: For a Term
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Loan
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(a) LIBOR Rate Advance .40%
Greater than 3.0 to 1.0 (b) Effective Federal Funds Rate .65%
Advance .58%
.83%
(a) LIBOR Rate Advance
Equal to or less than 3.0 to 1.0 (b) Effective Federal Funds Rate .65%
Advance .90%
.83% 1.08%
The Applicable Margin shall be computed by the Agent on each Calculation Date,
and the Agent shall notify the Borrower and the Banks of the Applicable
Margin.
"Assignee" has the meaning specified in Section 10.08(a) hereof.
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"Assignment and Acceptance" has the meaning specified in Section 10.08(a)
-------------------------
hereof.
"Borrowing" means a revolving credit loan borrowing under Section
---------
2.01(a) hereof consisting of one Revolving Credit Advance from each Bank, of
the same Type made on the same day.
"Business Day" means a day of the year on which banks are not required or
------------
authorized to close in Houston, Texas and, if the applicable Business Day
relates to any LIBOR Rate Advances, on which dealings are carried on in the
London interbank market.
"Calculation Date" means (i) the Closing Date, and (ii) a date which is
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the earlier of (A) the date of delivery of a Compliance Certificate in
accordance with Section 6.01(c), or (B) the date that such Compliance
Certificate is required to be delivered pursuant to Section 6.01(c), and (C)
with respect to a Rating Certificate, the date of such Rating Certificate.
"Capital Shares" means, with respect to any Person, any capital stock or
----------------
capital shares (including without limitation, preferred stock or shares),
interests, participations or other ownership interests (however designated) of
such Person, and any rights, warrants or options to purchase any thereof.
"Capitalized Lease" means any lease of any property (whether real,
------------------
personal or mixed) which, in conformity with GAAP, is accounted for as a
capital lease on the balance sheet of the lessee.
"Cash Equivalents" means (a) marketable direct obligations issued or
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unconditionally guaranteed by the United States Government or issued by an
agency thereof or by the Federal National Mortgage Association; (b) commercial
paper maturing no more than ninety (90) days after the date of creation
thereof and, at the time of acquisition, having a rating of at least A-1 or
P-1 from either S&P or Xxxxx'x (or, if at any time neither S&P nor Xxxxx'x
shall be rating such obligations, then the highest rating from such other
nationally recognized rating services acceptable to the Agent); (c)
investments in repurchase agreements backed by securities described in clause
(a) hereof; and (d) domestic and eurodollar certificates of deposit or
bankers' acceptances maturing within ninety (90) days after the date of
acquisition thereof issued by any Bank or any commercial bank organized under
the laws of the United States of America or any state thereof or the District
of Columbia having capital of not less than $100,000,000.
"Closing Date" means the date the Agreement becomes effective in
-------------
accordance with Article IV.
--
"Code" means the Internal Revenue Code of 1986, as amended from time to
----
time, and any successor statute.
"Commitment" means, as to any Bank, such Bank's Pro Rata Percentage of
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$200,000,000, as such amount is set forth on the signature pages hereof with
respect to each Bank on and as of the Closing Date, and as it may be reduced
from time to time in accordance with Section 2.05, and, prior to the
Conversion Date, includes its commitment in respect of the Revolving Credit
Loan as described in Section 2.01(a), its Letter of Credit Commitment, and on
and subsequent to the Conversion Date, includes its commitment in respect of
the Term Loan, as described in Section 2.01(c) and its Letter of Credit
Commitment (but limited to those Letters of Credit issued prior to the
Conversion Date); and "Commitments" means, collectively, the Commitments for
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all the Banks.
"Compliance Certificate" has the meaning specified in Section 6.01(c).
-----------------------
"Consent Period" has the meaning specified in Section 2.11.
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"Conversion Date" has the meaning specified in Section 2.01(c)(i).
----------------
"Coverage Ratio" has the meaning specified in Section 7.07.
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"Debt" of the Borrower or any Subsidiary means any indebtedness of the
----
Borrower, or any Subsidiary, whether or not contingent, in respect of (without
duplication):
(i) borrowed money, or obligations evidenced by bonds, notes,
debentures or similar instruments,
(ii) the portion of indebtedness secured by any Lien existing on
property owned by the Borrower or any Subsidiary,
(iii) the reimbursement obligations, contingent or otherwise, in
connection with any letters of credit or similar instruments issued or
confirmed by banks or other financial institutions for the account of the
Borrower or any Subsidiary,
(iv) amounts representing the balance deferred and unpaid of the
purchase price of any property or services (except any such balance that
constitutes trade payables) or conditional sale obligations or obligations
under any title retention agreement,
(v) the principal amount of all obligations of the Borrower or any
Subsidiary with respect to redemption, repayment or other repurchase of any
Disqualified Stock or,
(vi) Guaranties, or
(vii) obligations of the Borrower or any Subsidiary as lessee under a
Capitalized Lease; provided that the items of indebtedness under (i), (ii),
(iii) and (iv) above shall be deemed to be Debt only to the extent that any
such items (other than obligations in respect of letters of credit) would
appear as a quantified liability on the Borrower's consolidated balance sheet
in accordance with GAAP (as distinguished from being referred to in the notes
to such Financial Statement).
The term "Debt" shall not include (x) contingent liabilities relating to
deposit and/or endorsement of checks in the ordinary course of business of the
Borrower or any Subsidiary; or (y) guaranties or contingent liabilities under
leases customarily undertaken or incurred by Borrower or any Subsidiary in the
ordinary course of business as either landlord or tenant. The term "Debt"
includes the Borrower's and Subsidiaries' share of debt of partnerships and
joint ventures (other than debt that is non-recourse to the Borrower or its
Subsidiaries) which are accounted for on the Borrower's Financial Statements
under the equity method of accounting.
"Debtor Laws" means all applicable liquidation, conservatorship,
------------
bankruptcy, moratorium, arrangement, receivership, insolvency, reorganization
--
or similar laws or general equitable principles from time to time in effect
affecting the rights of creditors generally.
"Default" means any event which, with the lapse of time or giving of
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notice, or both, would constitute an Event of Default.
"Disqualified Stock" means, with respect to any Person, any Capital
-------------------
Shares of such Person, which by the terms thereof (or by the terms of any
security or instrument into which such Capital Shares are convertible or for
which such Capital Shares are exchangeable or exercisable) upon the happening
of any event or otherwise, (i) mature or are mandatorily redeemable, pursuant
to a sinking fund obligation or otherwise, (ii) are convertible into or
exchangeable or exercisable for Debt or Disqualified Stock, or (iii) are
redeemable at the option of the holder thereof, in whole or in part, in each
case on a date prior to the stated maturity of the Notes.
"Effective Federal Funds Rate" means the Federal Funds Rate, plus the
-------------------------------
Applicable Margin.
"Effective Federal Funds Rate Advance" means an Advance which bears
----------------------------------------
interest at the Effective Federal Funds Rate as provided in Section 2.06(b).
"ERISA" means the Employee Retirement Income Security Act of 1974, as
-----
amended from time to time, and the regulations promulgated and rulings issued
thereunder.
"ERISA Affiliate" means any Subsidiary or trade or business (whether or
----------------
not incorporated) which is a member of a group of which the Borrower is a
member and which is under common control within the meaning of Section 414 of
the Code and the rules and regulations thereunder.
"ERISA Event" means any of the following events: (a) a "Reportable
------------
Event" described in Section 4043 of ERISA and the regulations issued
thereunder (other than a "Reportable Event" not subject to the provisions for
the 30-day notice to the PBGC under such regulations), (b) the withdrawal of
the Borrower from a PBGC Plan during a plan year in which it was a
"substantial employer" as defined in Section 4001(a)(2) of ERISA or the
incurrence of liability by the Borrower under Section 4064 of ERISA, (c) the
distribution of a notice of intent to terminate a PBGC Plan pursuant to
Section 4041(c) of ERISA or the treatment of a PBGC Plan amendment as a
termination under Section 4041 of ERISA, (d) the institution of proceedings to
terminate a PBGC Plan by the PBGC, or (e) any other event or condition which
might constitute grounds under Section 4042 of ERISA for the termination of,
or the appointment of a trustee to administer, any PBGC Plan.
"Eurocurrency Liabilities" has the meaning assigned to that term in
-------------------------
Regulation D of the Board of Governors of the Federal Reserve System, as in
effect from time to time.
"Events of Default" has the meaning specified in Section 8.01.
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"Existing Debt" means all indebtedness of the Borrower to the Prior Banks
-------------
under or in connection with the Prior Credit Agreement, the Prior Notes and
the Existing Letters of Credit.
"Federal Funds Rate" means, as of any particular date, a fluctuating
--------------------
interest rate per annum equal to the weighted average of the rates on
overnight federal funds transactions with members of the Federal Reserve
System arranged by federal funds brokers, as published for such day (or, if
such day is not a Business Day, for the next preceding Business Day) by the
Federal Reserve Bank of New York, or, if such rate is not so published for any
day which is a Business Day, the average of the quotations for such day on
such transactions received by the Agent from three federal funds brokers of
recognized standing selected by it.
"Existing Letters of Credit" means the Letters of Credit issued pursuant
---------------------------
to the Prior Credit Agreement and outstanding as of the Closing Date, as
described on Exhibit 1.01-B hereto.
"Fees" means the Unused Borrowing Commitment Fee, the Letter of Credit
----
Fee and the Issuance Fee.
"Financial Statements" shall mean statements of the financial condition
---------------------
of the Borrower and its Subsidiaries on a consolidated basis as set forth in
the Borrower's Annual Report on Form 10K for each calendar year, or in the
Borrower's Quarterly Report on Form 10-Q for each quarterly accounting period,
and filed with the Securities and Exchange Commission, or if such filing is
not permitted or required at any time, financial statements in such form of
the Borrower and its Subsidiaries on a consolidated basis, delivered to the
Agent and, in such event, for quarterly financial statements, certified by a
Responsible Officer as presenting fairly the consolidated financial position
of the Borrower and its Subsidiaries as of the date indicated and the results
of their operations for the period indicated in conformity with GAAP,
consistently applied, subject to changes resulting from year-end adjustments,
and for year-end financial statements together with the unqualified opinion of
Deloitte & Touche, or other independent public accountants of recognized
national standing selected by the Borrower, stating that such financial
statements fairly present the consolidated financial position of the Borrower
and its Subsidiaries as of the date indicated and the consolidated results of
their operations and changes in financial position for the period indicated in
conformity with GAAP, consistently applied.
"Funds from Operations" means for any Calculation Period, net income of
-----------------------
the Borrower and its Subsidiaries plus (i) each of the following, to the
----
extent actually deducted in arriving at such net income during such period:
(A) depreciation and amortization expenses, (B) the amount accrued during such
period in respect of interest (including the interest component of Capitalized
Lease obligations) and original issue discount of Debt of the Borrower and its
Subsidiaries, and (C) extraordinary charges plus (ii) the excess, if any, of
----
the share of distributable funds allowable under any joint venture or
partnership which is not a Guarantor over net income from such joint venture
or partnership, minus (iii) each of the following to the extent actually
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included in arriving at such net income during such period: (x) gains on the
sale or disposition of properties and investment securities of the Borrower
and its Subsidiaries, and (y) the excess, if any, of net income from any joint
venture or partnership which is not a Guarantor, over the share of
distributable funds allowable under the applicable joint venture or
partnership agreement.
"GAAP" means generally accepted accounting principles set forth in the
----
opinions and pronouncements of the Accounting Principles Board and the
American Institute of Certified Public Accountants, and statements and
pronouncements of the Financial Accounting Standards Board.
"Governmental Authority" means any (domestic or foreign) federal, state,
-----------------------
county, municipal, parish, provincial, or other government, or any department,
commission, board, court, agency (including, without limitation, the
Environmental Protection Agency), or any other instrumentality of any of them
or any other political subdivision thereof, and any entity exercising
executive, legislative, judicial, regulatory, or administrative functions of,
or pertaining to, government, including, without limitation, any arbitration
panel, any court, or any commission.
"Governmental Requirement" means any order, permit, law, statute
-------------------------
(including, without limitation, any statute enacted in connection with or
--
relating to the protection or regulation of the environment), code, ordinance,
rule, regulation, certificate, or other direction or requirement of any
Governmental Authority.
"Guarantor" means each Subsidiary which is a corporation, 100% of the
---------
capital stock of which is owned by the Borrower, or a Subsidiary, and that has
executed or will execute a Guaranty Agreement, including without limitation,
each Guaranty Agreement executed in accordance with Section 6.06 herein.
"Guaranty" or "Guarantees" has the meaning specified in Section 7.12, and
-------- ----------
does not include a "Guaranty Agreement", executed in favor of the Banks in
connection with this Agreement.
"Guaranty Agreement" means an Amended and Restated Guaranty Agreement
-------------------
executed by each Guarantor substantially in the form of Exhibit 1.01-A,
attached hereto.
"Highest Lawful Rate" means, with respect to each Bank, the maximum
---------------------
nonusurious interest rate, if any, that at any time or from time to time may
be contracted for, taken, reserved, charged, or received with respect to any
Note or on other amounts, if any, due to such Bank pursuant to this Agreement
or any other Loan Document under laws applicable to such Bank which are
presently in effect or, to the extent allowed by law, under such applicable
laws which may hereafter be in effect.
"Interest Period" means, for each LIBOR Rate Advance comprising part of
----------------
the same Borrowing, or in the case of a Term Loan, for each Term Advance, the
period commencing on the date of such Advance or the date of the conversion of
any Advance into such an Advance and ending on the last day of the period
selected by the Borrower pursuant to the provisions below and, thereafter,
each subsequent period commencing on the last day of the immediately preceding
Interest Period and ending on the last day of the period selected by the
Borrower pursuant to the provisions below. The duration of each such Interest
Period shall be seven (7) days or one, two or three months, as the Borrower
may, upon notice received by the Agent have selected in accordance with
Section 2.02; provided however, that:
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(i) the duration of any Interest Period which commences before any
principal repayment date required hereunder and would otherwise end (but for
this provision) after such date shall end on such date; and
(ii) whenever the last day of any Interest Period would otherwise
(but for this provision) occur on a day other than a Business Day, the last
day of such Interest Period shall be extended to occur on the next succeeding
Business Day, provided, that, if such extension would cause the last day of
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such Interest Period to occur in the next following calendar month, the last
day of such Interest Period shall occur on the next preceding Business Day.
"Interest Rate Agreements" shall have the meaning specified in Section
--------------------------
8.01(i).
"Investment" of any Person means any investment so classified under GAAP,
----------
and, whether or not so classified, includes (a) any direct or indirect loan or
advance made by it to any other Person, whether by means of stock purchase,
loan, advance or otherwise, (b) any capital contribution to any other Person,
and (c) any ownership or similar interest in any other Person.
"Issuing Bank" means TCB.
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"Issuance Fee" has the meaning specified in Section 2.04(b).
-------------
"Letter of Credit" means the letters of credit provided for in Section
-------------------
2.01 hereof, and shall include, without limitation, the Special Letters of
Credit and the Bond Support Letters of Credit.
"Letter of Credit Commitment" means, as to any Bank, such Bank's Pro Rata
----------------------------
Percentage of $50,000,000, as such amount may be reduced from time to time
pursuant to the terms and provisions hereof, and "Letter of Credit
Commitments" means, collectively, the Letter of Credit Commitments for all the
Banks.
"Letter of Credit Fee" has the meaning specified in Section 2.04(b).
-----------------------
"Letter of Credit Request" has the meaning specified in Section 2.03(a)
--------------------------
hereof.
"LIBOR Rate" means, for any Interest Period for each LIBOR Rate Advance,
-----------
an interest rate per annum determined by the Agent to be the average (rounded,
if necessary, to the nearest whole multiple of one thirty-second of one
percent (1/32%) if such average is not a multiple thereof) of the rate per
annum at which deposits in U.S. dollars are offered to prime banks in the
London interbank market at 11:00 A.M. (London time) two Business Days prior to
the commencement of such Interest Period, in an amount substantially equal to
such LIBOR Rate Advance and for a period equal to such Interest Period.
"LIBOR Rate Advance" means an Advance which bears interest at the LIBOR
--------------------
Rate as provided in Section 2.06(a).
"LIBOR Rate Reserve Percentage" of any Bank for any Interest Period for
-------------------------------
any LIBOR Rate Advance means the reserve percentage, if any, applicable during
such Interest Period (or if more than one such percentage shall be so
applicable, the daily average of such percentages for those days in such
Interest Period during which any such percentage shall be so applicable) under
regulations issued from time to time by the Board of Governors of the Federal
Reserve System (or any successor) for determining the maximum reserve
requirement (including, without limitation, any emergency, supplemental or
other marginal reserve requirement, expressed as a percentage per annum) for
such Bank with respect to liabilities or assets consisting of or including
eurocurrency liabilities having a term equal to such Interest Period.
"Lien" means any claim, mortgage, deed of trust, pledge, security
----
interest, encumbrance, lien, or charge of any kind (including, without
-
limitation, any agreement to give any of the foregoing), any conditional sale
-
or other title retention agreement, or the interest of the lessor under any
Capitalized Lease (but otherwise excluding leases).
"Loan Documents" means this Agreement, the Notes, the Letters of Credit,
---------------
the Guaranty Agreements, and any document or instrument executed in connection
with the foregoing.
"Majority Banks" means at any time Banks holding at least 66 % of the
---------------
then aggregate unpaid principal amount of the Notes held by Banks, or, if no
such principal amount is then outstanding, Banks having at least 66 % of the
Commitments.
"Margin Stock" shall have the meaning assigned to such term in any of
-------------
Regulation G, T, U or X.
"Moody's" means Xxxxx'x Investors Service, Inc.
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"Multiemployer Plan" means a "multiemployer plan" as defined in Section
--------------------
4001(a)(3) of ERISA to which the Borrower or any ERISA Affiliate is making or
accruing or has made or accrued an obligation to make contributions.
"Net Proceeds" means with respect to the disposition of Real Property of
-------------
the Borrower permitted by Section 7.04 hereof, all proceeds realized from such
disposition after deducting: (i) any withholding taxes arising from the
disposition of assets located outside of the United States; (ii) the ordinary
and customary out-of-pocket costs of such disposition; and (iii) amounts
applied to the repayment of Debt secured by Liens on such Real Property, to
the extent such Liens were not prohibited hereunder. "Net Proceeds" shall
also include proceeds of insurance with respect to an actual or constructive
loss of such property, an agreed or compromised loss of such property or the
taking of any such property under the power of eminent domain and condemnation
awards and awards in lieu of condemnation for the taking of property under the
power of eminent domain.
"Non-Recourse Debt" of any Person means Debt of such Person in respect of
-----------------
which (other than with respect to agreements in respect of such Debt regarding
the occurrence of certain wrongful acts or misapplication of funds) (i) the
recourse of the holder of such Debt, whether direct or indirect and whether
contingent or otherwise, is effectively limited to the assets directly
securing such Debt; and (ii) such holder may not collect by levy of execution
against assets of such Person generally (other than the assets directly
securing such Debt) if such Person fails to pay such Debt when due and the
holder obtains a judgment with respect thereto.
"Note" or "Notes" has the meaning specified in Section 2.02(c).
---- -----
"Notice of Borrowing" has the meaning specified in Section 2.02(a).
---------------------
"Notice of Conversion" has the meaning specified in Section 2.01
----------------------
(c)(i).
"Notice of Interest Conversion" has the meaning specified in Section
--------------------------------
2.09.
"Obligations" means all of the obligations of the Borrower and its
-----------
Subsidiaries now or hereafter existing under the Loan Documents to which it is
a party, whether for principal, interest, fees, expenses, indemnification or
otherwise.
"Organizational Document" has the meaning set forth in Section 4.01(d).
------------------------
"PBGC" means the Pension Benefit Guaranty Corporation.
----
"Permitted Debt" means Debt which does not exceed the limits specified in
--------------
Section 7.02.
"Permitted Liens" means:
----------------
(a) non-consensual Liens imposed by operation of law including,
without limitation, Liens for taxes not yet delinquent, landlord Liens for
rent not yet due and payable, and Liens for materialmen, mechanics,
warehousemen, carriers, employees, workmen, repairmen, current wages, or
accounts payable not yet delinquent and arising in the ordinary course of
business; provided, however, that any right to seizure, levy, attachment,
--------
sequestration, foreclosure, or garnishment with respect to Property of the
Borrower or any Subsidiary by reason of such Lien has not matured, or has
been, and continues to be, effectively enjoined or stayed;
(b) easements, rights-of-way, restrictions, and other similar
Liens or imperfections to title which do not materially interfere with the
occupation, use, and enjoyment by the Borrower or any Subsidiary of the
Property encumbered thereby or materially impair the value of such Property
subject thereto for its intended purpose;
(c) Liens (other than any Lien imposed by ERISA) incurred or
deposits made in the ordinary course of business (i) in connection with
workers' compensation, unemployment insurance and other types of social
security, or (ii) to secure (or to obtain letters of credit that secure) the
performance of tenders, statutory obligations, surety and appeal bonds, bids,
leases, performance or payment bonds, purchase, construction or sales
contracts and other similar obligations, in each case not incurred or made in
connection with the borrowing of money, the obtaining of advances or credit or
the payment of the deferred purchase price of property; and
(d) UCC protective filings with respect to personal property
leased to the Borrower or any Subsidiary.
"Person" means an individual, partnership, corporation (including a
------
business trust), joint stock company, trust, unincorporated association, joint
venture or other entity, or a Governmental Authority.
"Plan" means any employee benefit plan within the meaning of Section 3(3)
----
of ERISA, other than a Multiemployer Plan, maintained by the Borrower or any
ERISA Affiliate.
Prior Banks" means banks and other financial institutions holding a Prior
-----------
Note issued by the Borrower to such Prior Bank under the Prior Credit
Agreement, including such Prior Banks which are parties to this Agreement.
"Prior Credit Agreement" shall have the meaning specified for such term
------------------------
in Section 4.01(i) hereof.
"Property" means any interest or right in any kind of property or asset,
--------
whether real, personal, or mixed, owned or leased, tangible or intangible, and
whether now held or hereafter acquired.
"Pro Rata Percentage" or "ratably" means as to any Bank a fraction
---------------------
(expressed as a percentage) the numerator of which shall be the aggregate
original principal amount of such Bank's Note and the denominator of which
shall be $200,000,000.
"Rating Certificate" has the meaning specified in Section 6.01(h).
-------------------
"Real Property" means all of the land, buildings, improvements and
--------------
projects under construction owned by the Borrower or any Subsidiary, including
without limitation all improvements thereon, fixtures, and any leasehold or
other interest in such property owned or held by the Borrower or any
Subsidiary, but excluding Property under direct financing leases (as reflected
on the balance sheet of the Borrower).
"Register" has the meaning specified in subsection 10.08(c) hereof.
--------
"Regulation G," "Regulation T," "Regulation U" and "Regulation X" means
------------------------------------------------------------------
Regulation G, T, U or X, as the case may be, of the Board of Governors of the
Federal Reserve System, or any successor or other regulation hereafter
promulgated by said Board to replace the prior Regulation G, T, U or X and
having substantially the same function.
"Responsible Officer" means the chief financial officer or the chief
--------------------
accounting officer of the Borrower.
"Revolving Credit Advance" means an advance of funds made by each Bank in
------------------------
respect of the Revolving Credit Loan.
"Revolving Credit Loan" or "Revolving Loan" means the revolving credit
----------------------- --------------
loan to be made under Section 2.01 (a) hereof.
"Revolving Credit Termination Date" means the earlier of (i) November
------------------------------------
21, 1999, or such later date to which the Revolving Credit Termination Date
may be extended pursuant to Section 2.11, or (ii) any date occurring prior to
the Conversion Date on which (y) the Commitments have been terminated in
accordance with this Agreement (including, without limitation, under Section
8.01 hereof), and (z) all amounts due and owing under the Notes have been paid
in full, and (iii) the Conversion Date.
"S&P" means Standard & Poor's Corporation.
----
"Subsidiary" shall mean (i) a corporation of which a sufficient number of
----------
shares of stock having ordinary voting power (other than stock having such
power only by reason of the happening of a contingency) to elect a majority of
the board of directors of such corporation are owned directly or indirectly
by the Borrower, or (ii) any partnership or other business entity, with
respect to which the Borrower or a Guarantor owns an equity interest
sufficient to exercise majority voting power over management decisions. For
purposes of clause (ii) aforesaid, neither the Borrower nor a Guarantor shall
be deemed to own an equity interest sufficient to exercise "majority voting
power over management decisions" if certain major decisions of such
partnership or other business entity (e.g., a decision to sell property)
require consent of Persons other than the Borrower or Guarantor. For purposes
of this definition, Xxxxxxxxxx Properties Trust, a Texas real estate
investment trust, shall not be deemed to be a Subsidiary.
"Term Anniversary Date" has the meaning specified for such term in
-----------------------
Section 2.01(c)(ii).
"Term Loan" means the Term Loan made pursuant to Section 2.01(c) hereof.
----------
"Term Loan Advance" or "Term Advance" means an Advance made by each Bank
------------------ ------------
in respect of the Term Loan; provided that, subject to being increased by
deemed Advances under Section 2.03(d), the principal amount outstanding for
all Term Loan Advances from time to time shall never be increased from and
after the Conversion Date.
"Term Maturity Date" has the meaning specified for such term in Section
--------------------
2.01(c)(ii).
"Termination Date" means November 21, 1999, or such later date to which
-----------------
the Termination Date may be extended pursuant to Section 2.11 or Section
2.01(c) (the Term Maturity Date), or any earlier date on which (i) the
Commitments have been terminated in accordance with this Agreement (including,
without limitation, under Section 8.01 hereof), and (ii) all unpaid amounts
due and owing under the Notes have been paid in full.
"Total Assets" as of any date means the sum of (i) the Undepreciated Real
------------
Estate Assets, and (ii) the aggregate book value of all other assets of the
Borrower and its Subsidiaries, determined on a consolidated basis in
accordance with GAAP (after deducting therefrom assets classified as
"intangible assets" in accordance with GAAP.)
"Total Commitment" shall mean the sum of the Commitments in effect under
-----------------
this Agreement from time to time.
"Type" refers to the determination whether an Advance is an Effective
----
Federal Funds Rate Advance or a LIBOR Rate Advance (or a Borrowing comprised
of such Advances).
"UCP" has the meaning specified in Section 2.03(b).
---
"Undepreciated Real Estate Assets" as of any date means the aggregate
-----------------------------------
book value, before deduction for depreciation and amortization, of Real
Property assets of the Borrower and the Subsidiaries, determined on a
consolidated basis in accordance with GAAP.
"Unimproved Real Property" shall mean Projects Under Development, as
--------------------------
reflected on the Financial Statements, less (i) Construction in progress, and
----
(ii) Capitalized interest in respect of Construction in progress, and (iii)
Capitalized interest on unimproved land.
"Unused Borrowing Commitment Fee" has the meaning specified in Section
----------------------------------
2.04(a).
SECTION 1.02. Other Defined Terms
---------------------
(a) Terms Governing Letters of Credit Supporting Bonds. All
----------------------------------------------------
terms utilized solely in connection with Letters of Credit issued hereunder in
support of bonds shall have the meanings specified for such terms in Exhibit
1.01-C hereof.
(b) Accounting Terms. All accounting terms not specifically
-----------------
defined herein shall be construed in accordance with GAAP consistent with
those applied in the preparation of the financial statements referred to in
Section 5.02.
ARTICLE II
AMOUNTS AND TERMS OF THE ADVANCES; LETTERS OF CREDIT
SECTION 2.01. The Revolving Credit Loan; Letters of Credit; Term
--------------------------------------------------
Loan. (a) Each Bank acknowledges that the Prior Credit Agreement, and the
----
promissory notes dated as of September 20, 1995, issued pursuant to the Prior
Credit Agreement (the "Prior Notes"), together with the Existing Letters of
Credit, evidences the Existing Debt. The Existing Debt is held by some, but
not all of the Banks under this Agreement, and the Borrower acknowledges and
agrees that the Notes issued by the Borrower pursuant to this Agreement in
accordance with Section 2.02(c) hereof, together with other indebtedness of
the Borrower hereunder, incorporates Existing Debt, to the extent of Existing
Debt held by each Prior Bank. In addition, each Bank severally agrees, on the
terms and conditions hereinafter set forth, to make Advances on a revolving
credit basis to the Borrower from time to time on any Business Day during the
period on and after the date hereof until the Revolving Credit Termination
Date, in an aggregate amount not to exceed at any time outstanding an amount
equal to such Bank's Commitment; provided that, in no event shall the ratable
principal amount outstanding on all Advances made by any Bank, plus the
principal amount of such Bank's Pro Rata Percentage of Letters of Credit
issued and outstanding at any time (whether drawn and not reimbursed or
undrawn) exceed such Bank's Commitment. Each Borrowing shall be in an
aggregate amount not less than $5,000,000 or an integral multiple of
$1,000,000 in excess thereof and shall consist of Advances of the same Type
made on the same day by the Banks ratably according to their respective
Commitments. Within the limits set forth herein, until, and including, the
Revolving Credit Termination Date, the Borrower may borrow, prepay pursuant
to Sections 3.02 and 3.03 and reborrow under this Section 2.01. The principal
amount outstanding of all Advances shall mature and, together with accrued and
unpaid interest thereon, shall be due and payable on the Termination Date.
(b) Each Bank hereby agrees that upon the Closing Date, the
Issuing Bank (on behalf of the Prior Banks) shall be deemed, without further
action by any party hereto, to have sold to each Bank under this Agreement,
and each such Bank shall be deemed, without further action by any party
hereto, to have purchased from the Issuing Bank (on behalf of the Prior
Banks), a participation to the extent of the Pro Rata Percentage of each Bank
under this Agreement in each of the Existing Letters of Credit, in the
obligations of the Borrower thereunder and in the reimbursement obligations of
the Borrower due in respect of drawings made under such Letters of Credit. If
requested by the Issuing Bank, the other Banks will execute any other
documents reasonably requested by the Issuing Bank to evidence the purchase of
such participation. Additionally, the Issuing Bank agrees to issue Letters of
Credit upon the request of the Borrower for the account of the Borrower at any
time and from time to time on and after the Closing Date and up to, but
excluding, the earlier of the Revolving Credit Termination Date and the
termination of the Letter of Credit Commitments or the Commitments, in
accordance with the terms hereof. Each Bank (other than the Issuing Bank)
severally agrees, on the terms and conditions hereinafter set forth, to
purchase participations in the Letters of Credit issued by the Issuing Bank
pursuant to Section 2.03 in an aggregate amount not to exceed such Bank's
Letter of Credit Commitment; provided that, in no event shall the principal
amount of such Bank's Pro Rata Percentage of aggregate Letters of Credit
issued and outstanding at any time (whether drawn and not reimbursed, or
undrawn, including without limitation, under the Existing Letters of Credit),
plus the ratable principal amount on all outstanding Advances made by such
Bank, exceed such Bank's Commitment. On each day during the period commencing
with the issuance by the Issuing Bank of any Letter of Credit and until such
Letter of Credit shall have expired or been terminated, and, irrespective of
whether such Letter of Credit has expired or terminated, if same has been
drawn upon and the amount so drawn has not been reimbursed to the Issuing
Bank, the Commitment of each Bank shall be deemed to be utilized for all
purposes hereof in an amount equal to such Bank's Pro Rata Percentage of the
undrawn face amount of such Letter of Credit, plus such Bank's Pro Rata
----
Percentage of the aggregate amount of all unreimbursed drawings under such
Letter of Credit. Each Letter of Credit issued hereunder shall be in face
amount not less than $100,000.00.
----
(c)(i) In the event that the Borrower shall have requested an
extension of the Revolving Credit Termination Date in accordance with the
provisions of Section 2.11 hereof and all Banks shall not have consented to
such extension on or before the last day of the Consent Period, upon notice
in writing ("Notice of Conversion") delivered by the Borrower to the Agent on
a day which is not less than 15 days prior to the then current Termination
Date, provided that no Default or Event of Default shall have occurred and be
continuing, the Borrower may elect to convert the aggregate principal amount
of all Advances outstanding under the Revolving Loan as of the Revolving
Credit Termination Date, to a Term Loan in an aggregate principal amount equal
to the aggregate outstanding principal amount of all such Advances. The Notice
of Conversion shall specify the date of conversion ("Conversion Date"), which
date shall not be beyond the Revolving Credit Termination Date, and shall be
irrevocable and binding on the Borrower. The Agent shall promptly deliver a
copy of the Notice of Conversion to each Bank. On the Conversion Date
specified in such notice, subject to the second to last sentence of this
Section 2.01(c)(i), the aggregate principal amount outstanding in respect of
all Advances shall automatically convert to a Term Loan of the same Type and
duration, subject to the terms and conditions of this Agreement. With respect
to any Notice of Borrowing given by Borrower during the period after
Borrower's giving of Notice of Conversion and prior to the third day before
the then scheduled Conversion Date, Borrower shall have the special right to
designate that the proposed Borrowing be made on the Conversion Date itself
(rather than on the third Business Day after Borrower has given Notice of
Borrowing in the case of a LIBOR Rate Advance, or on the same Business Day of
the Notice of Borrowing in the case of an Effective Funds Rate Advance), and
the Advance so made with reference to such Notice of Borrowing shall be
deemed, for all purposes to be a Revolving Credit Advance (with interest
commencing as of the Conversion Date if the proposed date of Borrowing has
been designated as the Conversion Date) eligible for conversion into the Term
Loan, as a Term Advance of the same Type and duration. On the Conversion Date
each Bank shall be deemed to have made a Term Advance to the Borrower, and
each Bank hereby severally agrees, on the terms and conditions set forth in
this Agreement, to make a Term Advance to the Borrower pursuant to this
Section 2.01(c) in an aggregate amount equal to, but not exceeding, its Pro
Rata Percentage of the aggregate principal amount of all Advances outstanding
on such Conversion Date, but in any event, not to exceed an amount equal to
such Bank's Commitment, less the principal amount of such Bank's Pro Rata
Percentage of Letters of Credit issued and outstanding at such time (whether
drawn and not reimbursed, or undrawn). With respect to Letters of Credit
issued and outstanding on the Conversion Date, the Borrower agrees that (A)
unreimbursed drawings shall be paid to the Banks on or prior to the
Conversion Date as a condition to the conversion of all Advances into a Term
Loan, (B) all issued and outstanding Letters of Credit shall continue in
effect in accordance with their terms, and (C) amounts drawn on a Letter of
Credit on and after the Conversion Date, shall be deemed to be Term Advances
made by the Banks under the Notes, and, to the extent not reimbursed by the
Borrower, shall increase the principal amount of the Term Loan in an amount
equal to such Advance; provided that such Term Advance, after giving effect
thereto, shall not cause the principal amount of each Bank's Pro Rata
Percentage of aggregate Letters of Credit issued and outstanding at such time
(whether drawn and not reimbursed or undrawn), plus the ratable principal
amount on all outstanding Advances made by such Bank, to exceed such Bank's
Commitment as at such time. On and after the Conversion Date, the Borrower
may not reborrow principal amounts repaid in respect of the Term Loan, except
to the extent Letters of Credit outstanding as of the Conversion Date
otherwise contemplate a reinstatement as provided in paragraph 2.03(j) below.
Term Advances under the Term Loan shall continue to bear interest in
accordance with Section 2.06 through 2.10 of this Agreement, and shall be
subject to all of the terms and provisions of this Agreement.
(ii) On and after the Conversion Date, the Term Advance of each Bank
shall be evidenced by its Note. Each Bank's Pro Rata Percentage of the
principal amount of the Term Loan shall be increased from time to time by the
principal amount of Term Advances deemed made in respect of a draw under a
Letter of Credit on and after the Conversion Date, as provided under Section
2.01(c) (i) above. The principal of such Term Advances shall be due and
payable, together with accrued and unpaid interest thereon, (i) on the first
anniversary date of the Conversion Date (the "Term Anniversary Date"), in an
amount equal to fifty percent (50%) of the principal amount of such Term Loan
outstanding on such date, and (ii) thereafter, in four equal quarterly
principal installments, payable on the last Business Day of the third,
sixth, ninth and twelfth months immediately succeeding the month in which the
Term Anniversary Date shall have occurred, with all principal outstanding on
the Term Loan to be due and payable, together with all accrued and unpaid
interest thereon, in a final installment on the last Business Day of the
twelfth month immediately succeeding the month in which the Term Anniversary
Date occurred (such date, hereinafter referred to as the "Term Maturity
Date").
(iii) Notwithstanding the schedule of payment required under Section
2.01(c)(ii) above, Borrower shall make mandatory prepayments in accordance
with Section 3.03(c). In the event that (A) the amount due and owing in
respect of the Term Loan shall be zero as a result of any regularly scheduled
principal payments, any mandatory prepayments or otherwise, or (B) the
Commitment of each Bank has been terminated and the Notes have become due and
payable in accordance with Section 8.01 hereof, the Borrower shall deliver to
the Agent, for deposit into an interest bearing collateral account, readily
available funds in an amount equal to the aggregate undrawn face amount of all
Letters of Credit issued and outstanding at such time, as security for the
obligations of the Borrower under such Letters of Credit, with rights of
return of said collateral periodically, all in accordance with Section 8.01.
SECTION 2.02. Making the Advances on the Revolving Credit Loan.
------------------------------------------------
(a) Each Borrowing shall be made on the Borrower's written notice in the form
set forth as Exhibit 2.02(a), attached hereto ("Notice of Borrowing") or oral
-------------------
notice (containing the information required in a Notice of Borrowing) given by
the Borrower to the Agent not later than 10:00 A.M. (Houston, Texas time) (i)
on the third Business Day prior to the date of the proposed Borrowing in the
case of a LIBOR Rate Advance, and (ii) on the same Business Day of the
proposed Borrowing in the case of a Effective Federal Funds Rate Advance (to
the extent permitted under Section 2.06(b)). With respect to any oral Notice
of Borrowing, the Borrower shall promptly thereafter confirm such notice in
writing. Each Notice of Borrowing shall specify therein the requested (i)
date of such Borrowing, (ii) Type of Advances comprising such Borrowing, (iii)
aggregate amount of such Borrowing, and (iv) in the case of a Borrowing
comprised of LIBOR Rate Advances, the initial Interest Period for each such
Advance; provided that, there shall not be more than two (2) Interest Periods
for a period of seven (7) days in effect at any one time with respect to any
Note, and no more than seven (7) Interest Periods in effect in the aggregate
at any one time with respect to any Note. The Agent shall promptly deliver a
copy of each Notice of Borrowing to each Bank. Each Bank shall, before 11:00
A.M. (Houston time) on the date of such Borrowing, make available to the Agent
at its address referred to in Section 10.02, in immediately available funds,
such Bank's ratable portion of such Borrowing. After the Agent's receipt from
the Banks (other than TCB) of such funds (and not prior thereto), and upon
fulfillment of the applicable conditions set forth in Article IV, the Agent
will promptly make such funds available to the Borrower at the Agent's
aforesaid address. Each Notice of Borrowing shall be irrevocable and binding
on the Borrower.
(b) The failure of any Bank to make an Advance to be made by it
as part of any Borrowing shall not relieve any other Bank of its obligation,
if any, hereunder to make its Advance on the date of such Borrowing, but no
Bank shall be responsible for the failure of any other Bank to make the
Advance to be made by such other Bank on the date of any Borrowing.
(c) The Borrower shall execute and deliver for each Bank to
evidence the Advances made or to be made by such Bank pursuant to Section
2.01(a) or (b) hereof, and on and after the Conversion Date, to evidence
Advances made by each Bank outstanding or deemed made under the Term Loan
(and no new Notes shall be required to be issued on the Conversion Date), a
promissory note (each such note a "Note" and more than one Note, the
----
"Notes"), dated as of the Closing Date, in the amount of such Bank's
Commitment. Each Note shall be substantially in the form of Exhibit 2.02(c)
---------------
with the blanks appropriately filled, and shall mature on the Termination
Date.
SECTION 2.03. Issuing the Letters of Credit. (a) In order to
-----------------------------
effect the issuance of a Letter of Credit, the Borrower shall submit a Letter
of Credit Request and a Letter of Credit Application in writing to the Agent
(who shall promptly notify the Issuing Bank) not later than 11:00 a.m.
(Houston, Texas time) two (2) Business Days before the date of issuance of
such Letter of Credit. Each such Letter of Credit Request and Letter of
Credit Application shall be signed by the Borrower, specify the Business Day
on which such Letter of Credit is to be issued, and, the availability for
Letters of Credit under the Letter of Credit Commitment and the Commitment as
of the date of issuance of such Letter of Credit; provided that, without the
consent of all Banks, the expiration date thereof shall not be later than the
earlier of (I) thirty (30) months from the date of issuance of such Letter of
Credit and (ii) five (5) Business Days prior to a date which is two (2) years
beyond the Revolving Credit Termination Date.
(b) Upon satisfaction of the applicable terms and conditions set
forth in Article IV, the Issuing Bank shall issue such Letter of Credit to the
specified beneficiary not later than the close of business (Houston, Texas
time) on the date so specified. The Agent shall provide the Borrower and each
Bank with a copy of each Letter of Credit so issued. Each such Letter of
Credit shall (i) provide for the payment of drafts presented for honor
thereunder by the beneficiary in accordance with the terms thereof, at sight
when accompanied by the documents, if any, described therein and (ii) be
subject to the Uniform Customs and Practice for Documentary Credits (1993
Revision, effective January 1, 1994), International Chamber of Commerce
Publication No. 500 (and any subsequent revisions thereof approved by a
Congress of the International Chamber of Commerce and adhered to by the
Issuing Bank) (the "UCP"), and shall, as to matters not governed by the UCP,
be governed by, and construed and interpreted in accordance with, the laws of
the State of Texas.
(c) Upon the issuance date of each Letter of Credit (other than
the Existing Letters of Credit which are governed by Section 2.01(b)), the
Issuing Bank shall be deemed, without further action by any party hereto, to
have sold to each other Bank, and each other Bank shall be deemed, without
further action by any party hereto, to have purchased from the Issuing Bank, a
participation, to the extent of such Bank's Pro Rata Percentage, in such
Letter of Credit, the obligations thereunder and in the reimbursement
obligations of Borrower due in respect of drawings made under such Letter of
Credit. If requested by the Issuing Bank, the other Banks will execute any
other documents reasonably requested by the Issuing Bank to evidence the
purchase of such participation.
(d) Subject to paragraph (i) hereof with respect to the Bonds
and the Shawnee Village Bonds and subject to paragraph (l) below with respect
to draws on and after the Conversion Date, upon the presentment of any draft
for honor under any Letter of Credit by the beneficiary thereof which the
Issuing Bank determines is in compliance with the conditions for payment
thereunder, the Issuing Bank shall promptly notify the Borrower, the Agent and
each Bank of the intended date of honor of such draft, and the Borrower hereby
promises and agrees to pay to the Agent for the account of the Issuing Bank
upon receipt of such notice, by 9:00 A.M. (Houston, Texas time) on the date
payment is due as specified in such notice but in any event, no earlier than
the Business Day after receipt of such notice, the full amount of such draft
in immediately available funds (unless honor of such draft has been enjoined
by a court of competent jurisdiction pursuant to Section 5.114 of the Texas
Business and Commerce Code prior to its payment by the Issuing Bank). If the
Borrower fails timely to make such payment (or is not required to make such
payment), each Bank shall, notwithstanding any other provision of this
Agreement (including the occurrence and continuance of a Default or an Event
of Default), make available to the Agent for the benefit of the Issuing Bank
an amount equal to its Pro Rata Percentage of the amount of the presented
draft on the day the Issuing Bank is required to honor such draft. If such
amount is not in fact made available to the Agent by any such Bank on such
date, then such Bank shall pay to the Agent for the account of the Issuing
Bank, on demand made by the Issuing Bank, in addition to such amount, an
amount equal to the product of (i) the average daily Effective Federal Funds
Rate per annum during the period referred to in clause (iii) of this sentence
times (ii) the amount of such Bank's Pro Rata Percentage of the amount of the
-----
presented draft times (iii) the number of days that elapse from the day the
-----
Issuing Bank honors such draft to the date on which the amount equal to such
Bank's Pro Rata Percentage of the amount of the presented draft becomes
immediately available to the Issuing Bank divided (iv) by 360. Upon receipt
-------
by the Agent from the Banks of the full amount of such draft, notwithstanding
any provision of this Agreement (including the occurrence and continuance of a
Default or an Event of Default) the full amount of such draft shall
automatically and without any action by the Borrower, be deemed to have been
an Advance as of the date of payment of such draft, bearing interest at a rate
per annum (except for paragraph (l) below) equal at all times to the lesser of
(I) two percent (2%) per annum above the Effective Federal Funds Rate, and
(ii) the Highest Lawful Rate. Nothing in this paragraph (d) or elsewhere in
this Agreement (other than in paragraph (l) below) shall diminish the
Borrower's obligation under this Agreement to provide the funds for the
payment of, or on demand to reimburse the Issuing Bank for payment of, any
draft presented to, and duly honored by, the Issuing Bank under any Letter of
Credit, and the automatic funding of an Advance as in this paragraph provided
shall not constitute a cure or waiver of the Event of Default for failure,
timely to provide such funds as in this paragraph agreed.
(e) IN ORDER TO INDUCE THE ISSUANCE OF LETTERS OF CREDIT BY THE
ISSUING BANK AND THE PURCHASE OF PARTICIPATIONS THEREIN BY THE OTHER BANKS, TO
THE EXTENT PERMITTED UNDER APPLICABLE LAW, THE BORROWER AGREES WITH THE AGENT,
THE ISSUING BANK AND THE OTHER BANKS THAT NEITHER THE AGENT NOR ANY BANK
(INCLUDING THE ISSUING BANK) SHALL BE RESPONSIBLE OR LIABLE FOR, AND
BORROWER'S UNCONDITIONAL OBLIGATION TO REIMBURSE THE ISSUING BANK THROUGH THE
AGENT FOR AMOUNTS PAID BY THE ISSUING BANK, AS PROVIDED IN SECTION 2.03(d), ON
---------------
ACCOUNT OF DRAFTS SO HONORED UNDER THE LETTERS OF CREDIT, SHALL NOT BE
AFFECTED BY, ANY CIRCUMSTANCE, ACT OR OMISSION WHATSOEVER (WHETHER OR NOT
KNOWN TO THE AGENT OR ANY BANK (INCLUDING THE ISSUING BANK) OTHER THAN A
CIRCUMSTANCE, ACT OR OMISSION RESULTING FROM THE GROSS NEGLIGENCE OR WILLFUL
MISCONDUCT OF THE AGENT OR ANY BANK IN DETERMINING WHETHER SUCH DRAW CONFORMS
TO THE TERMS OF THE LETTER OF CREDIT BUT EXPRESSLY INCLUDING A CIRCUMSTANCE,
ACT OR OMISSION CONSTITUTING ORDINARY SOLE OR CONTRIBUTING NEGLIGENCE),
INCLUDING WITHOUT LIMITATION THE FOLLOWING CIRCUMSTANCES:
(i) any lack of validity or enforceability of this Agreement or any
of the other Loan Documents;
(ii) the existence of any claim, setoff, defense or other right which
the Borrower or any Subsidiary may have at any time against a beneficiary
named in a Letter of Credit, any transferee of any Letter of Credit (or any
person for whom any such transferee may be acting), any Agent, the Issuing
Bank, any Bank, or any other person, whether in connection with this
Agreement, any Letter of Credit, the transactions contemplated herein or any
unrelated transactions (including any underlying transaction between the
Borrower or any other party and the beneficiary named in any such Letter of
Credit);
(iii) any draft, certificate or any other document presented under
the Letter of Credit proving to be forged, fraudulent, invalid or insufficient
in any respect or any statement therein being untrue or inaccurate in any
respect;
(iv) the surrender or impairment of any security for the performance
or observance of any of the terms of any of the Loan Documents;
(v) the occurrence of any Default or Event of Default; or
(vi) any other circumstance which might otherwise constitute a
defense available to, or a discharge of, the Borrower or any Guarantor.
The Borrower hereby waives presentment for payment (except the
presentment required by the terms of any Letter of Credit) and notice of
dishonor, protest and notice of protest with respect to drafts honored under
the Letters of Credit. The Issuing Bank agrees promptly to notify the
Borrower whenever a draft is presented under any Letter of Credit, but failure
to so notify the Borrower shall not in any way affect the Borrower's rights or
obligations hereunder.
(f) IN DETERMINING WHETHER TO PAY UNDER ANY LETTER OF CREDIT,
THE ISSUING BANK SHALL HAVE NO OBLIGATION RELATIVE TO THE AGENT OR THE BANKS
OTHER THAN TO CONFIRM THAT ANY DOCUMENTS REQUIRED TO BE DELIVERED UNDER SUCH
LETTER OF CREDIT APPEAR TO HAVE BEEN DELIVERED AND THAT THEY APPEAR TO COMPLY
ON THEIR FACE WITH THE REQUIREMENTS OF SUCH LETTER OF CREDIT. ANY ACTION
TAKEN OR OMITTED TO BE TAKEN BY THE ISSUING BANK UNDER OR IN CONNECTION WITH
ANY LETTER OF CREDIT IF TAKEN OR OMITTED IN THE ABSENCE OF GROSS NEGLIGENCE OR
WILLFUL MISCONDUCT IN DETERMINING WHETHER SUCH DRAW CONFORMS TO THE TERMS OF
THE LETTER OF CREDIT IN COMPLIANCE WITH REQUIREMENT OF SECTION 5.109 OF THE
TEXAS BUSINESS AND COMMERCE CODE, SHALL NOT CREATE FOR THE ISSUING BANK ANY
RESULTING LIABILITY TO ANY AGENT OR ANY BANK. IT IS THE INTENT OF THE PARTIES
HERETO THAT THE ISSUING BANK SHALL HAVE NO LIABILITY TO THE AGENT OR BANK FOR
ITS ORDINARY SOLE OR CONTRIBUTING NEGLIGENCE.
(g) In the event that any provision of a Letter of Credit
Application is inconsistent with, or in conflict of, any provision of this
Agreement, including provisions of either document for the rate of interest
applicable to drawings thereunder, delivery of collateral or rights of setoff
or any representations, warranties, covenants or any events of default set
forth therein, the provisions of this Agreement shall govern.
(h) (i) In connection with the issuance of each of the Series
1995 Lafayette Bonds and the Series 1995 Calcasieu Bonds, on the terms and
conditions set forth in subsections (a) through (c), and (e) through (k) of
this Section 2.03, the Issuing Bank has issued and shall, from time to time,
issue the Special Letters of Credit in favor of the Credit Facility Trustee
for the benefit of holders of the Series 1995 Lafayette Bonds and the Series
1995 Calcasieu Bonds. The Special Letters of Credit shall authorize the
Credit Facility Trustee to draw under the terms and conditions of each Special
Letter of Credit thereunder an amount not to exceed the applicable Letter of
Credit Amount (as defined in each Special Letter of Credit) then in effect (as
the same may be adjusted in accordance with the terms of such Special Letter
of Credit from time to time), which was initially, for the Series 1995
Lafayette Bonds, the sum of $3,735,000 in respect of the initial aggregate
principal amount outstanding of such Series 1995 Lafayette Bonds plus 105 days
----
of interest on the Bonds computed at the rate of twelve percent (12%) per
annum calculated on the basis of a year of 365 days, initially being an amount
equal to $128,934.25, for an aggregate amount of principal and interest
initially equal to $3,863,934.25, and for the Series 1995 Calcasieu Bonds, the
sum of $1,990,000 in respect of the initial aggregate principal amount
outstanding of such Series 1995 Calcasieu Bonds plus 105 days of interest on
----
the Bonds computed at the rate of twelve percent (12%) per annum calculated on
the basis of a year of 365 days initially being an amount equal to $68,695.89,
for an aggregate amount of principal and interest initially equal to
$2,058,695.89, in each case, less all amounts drawn under such Special Letters
of Credit prior to such time, plus all increases and minus all decreases in
accordance with paragraph 2 of such Special Letters of Credit prior to such
time. A Full Drawing or Partial Drawing under a Special Letter of Credit in
respect of an optional redemption of the Bonds pursuant to the Indenture shall
require the consent of all Banks, as evidenced to the Trustee under the
Indenture and the Credit Facility Trustee by written consent of the Agent.
The maximum amount that may be drawn under each Special Letter of Credit is
the applicable Letter of Credit Amount as calculated hereunder.
(ii) With reference to each of the Shawnee Village Bonds, on the
terms and conditions set forth in subsections (a) through (c), and (e) through
(k) of this Section 2.03, the Issuing Bank has issued and shall issue, from
time to time, the Bond Support Letters of Credit in favor of the S.V.
Trustee for the benefit of holders of such Shawnee Village Bonds. The Bond
Support Letters of Credit shall authorize the S.V. Trustee to draw under the
terms and conditions of each Bond Support Letter of Credit thereunder an
amount not to exceed the applicable Letter of Credit Amount (as defined in
each Bond Support Letter of Credit) then in effect (as the same may be
adjusted in accordance with the terms of such Bond Support Letter of Credit
from time to time), which was initially, for the Shawnee Village Bonds, the
sum of $6,610,000 in respect of the initial aggregate principal amount
outstanding of such Shawnee Village Bonds plus 65 days of interest on the
----
Bonds computed at the rate of eighteen percent (18%) per annum calculated on
the basis of a year of 365 or 366 days, as the case may be, initially being
an amount equal to $211,882.19, for an aggregate amount of principal and
interest initially equal to $6,821,882.19, less all amounts drawn under such
Bond Support Letters of Credit prior to such time, plus all increases and
minus all decreases in accordance with paragraph 2 of such Bond Support
Letters of Credit prior to such time. A Full Drawing- Shawnee Village Bonds
or Partial Drawing-Shawnee Village Bonds under a Bond Support Letter of Credit
in respect of an optional redemption or certain mandatory repurchases of the
Shawnee Village Bonds pursuant to the Shawnee Village Indenture and the terms
of the Bond Support Letter of Credit shall require the consent of all Banks,
as evidenced to the S.V. Trustee by written consent of the Agent. The maximum
amount that may be drawn under each Bond Support Letter of Credit is the
applicable Letter of Credit Amount as set forth in each Bond Support Letter of
Credit, or as to the Shawnee Village Bonds, as calculated hereunder.
(i) (i) Upon the presentment of any draft for honor in
connection with a Purchase Drawing under any Special Letter of Credit by the
beneficiary thereof which the Issuing Bank determines is in compliance with
the conditions for payment thereunder, the Issuing Bank shall promptly notify
the Borrower, the Agent, and each Bank of the intended date of honor of such
draft. In the event of a Purchase Drawing under a Special Letter of Credit in
accordance with the terms of such Letter of Credit, the Borrower, except as
provided in paragraph (l) below, hereby promises and agrees to pay to the
Agent for the account of the Issuing Bank, notwithstanding paragraph (d) of
this Section 2.03, by 9:00 A.M. (Houston, Texas time) on the 30th day after
the date of honor of such Purchase Drawing (the "Payment Date"), the full
amount of all principal of and accrued and unpaid interest on each Liquidity
Bank Bond, plus the Interest Differential, if any, at such time (the "Purchase
Price"), in immediately available funds, unless the Issuing Bank shall have
been previously reimbursed for the amount thereof as a result of remarketing
of such Liquidity Bank Bonds in accordance with the provisions of the
applicable Remarketing Agreement before such date. Upon receipt of payment of
an amount equal to the Purchase Price by the Agent for the account of the
Issuing Bank, the Agent shall notify the Tender Agent to deliver the Liquidity
Bank Bonds to the Borrower if such payment was made by or on behalf of the
Borrower, and otherwise to the Remarketing Agent, in accordance with the
provisions of the applicable Remarketing Agreement. Each Bank shall,
notwithstanding any other provision of this Agreement (including the
occurrence and continuance of a Default or an Event of Default), make
available to the Agent for the benefit of the Issuing Bank an amount equal to
its Pro Rata Percentage of the amount of the presented draft under the
respective Special Letter of Credit on the date on which such draft shall have
been honored by the Issuing Bank. If such amount is not in fact made
available to the Agent by any such Bank on such date, then such Bank shall pay
to the Agent for the account of the Issuing Bank, on demand made by the
Issuing Bank, in addition to such amount, an amount equal to the product of
(i) the average daily Effective Federal Funds Rate per annum during the period
referred to in clause (iii) of this sentence times (ii) the amount of such
-----
Bank's Pro Rata Percentage of the amount of the presented draft times (iii)
-----
the number of days that elapse from the day the Issuing Bank has honored such
draft to the date on which the amount equal to such Bank's Pro Rata Percentage
of the amount of the presented draft becomes immediately available to the
Issuing Bank divided (iv) by 360. The Liquidity Bank Bonds shall, in
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accordance with the applicable Indenture, as of the date of payment of such
draft, bear interest at a rate per annum equal at all times to the lesser of
(i) the Prime Rate per annum or (ii) the Maximum Rate. In the event that the
Purchase Price for Liquidity Bank Bonds shall not have been paid by the
Payment Date as required hereunder, and the Issuing Bank shall not have been
otherwise reimbursed, the portion of the Purchase Price not paid or
reimbursed, notwithstanding any other provision of this Agreement (including
the occurrence and the continuance of a Default or an Event of Default), shall
be deemed automatically and without any action by the Borrower to be an
Advance in an amount equal to such portion of the Purchase Price not paid or
reimbursed (including, without limitation, the Interest Differential, if any)
which is immediately due and payable, bearing interest at a rate per annum,
except as provided in paragraph (l) below, equal to the lesser of the Prime
Rate, plus 1.00% per annum, or the Highest Lawful Rate, and the Borrower shall
be deemed to have purchased such Liquidity Bank Bonds. Such Advance shall be
deemed a payment by Borrower of an amount equal to the Purchase Price to the
Agent for the account of the Issuing Bank. The Agent shall promptly notify
the Tender Agent to deliver the Liquidity Bank Bonds to the Agent for the
benefit of Borrower to be held by the Agent as collateral securing such
Advance. The Borrower hereby grants to the Agent, for the benefit of each
Bank, a Lien on and a security interest in such Liquidity Bank Bonds, until
such time as such Advance shall have been paid in full. Each drawing on a
Special Letter of Credit other than a Purchase Drawing and the reimbursement
obligation of the Borrower in respect thereof, shall, notwithstanding the
delivery of Bonds in respect thereof to the Tender Agent as custodian for the
Banks, be governed by paragraph (d) of this Section 2.03. Nothing in this
paragraph (i)-(i) or elsewhere in this Agreement (other than as provided in
paragraph (l) below) shall diminish the Borrower's obligation under this
Agreement to provide the funds for the payment of, or on demand to reimburse
the Issuing Bank for payment of, any draft presented to, and duly honored by,
the Issuing Bank under any Letter of Credit at the time and in the manner
provided under this Section 2.03 for each Letter of Credit, including without
limitation, the Special Letters of Credit, and the automatic funding of an
Advance as in this paragraph provided shall not constitute a cure or waiver of
the Event of Default for failure to timely provide such funds as in this
paragraph agreed.
(ii) Upon the presentment of any draft for honor in connection
with a Purchase Drawing - Shawnee Village Bonds , under any Bond Support
Letter of Credit by the beneficiary thereof which the Issuing Bank determines
is in compliance with the conditions for payment thereunder, the Issuing Bank
shall promptly notify the Borrower, the Agent, and each Bank of the intended
date of honor of such draft. In the event of a Purchase Drawing - Shawnee
Village Bonds, under a Bond Support Letter of Credit in accordance with the
terms of such Letter of Credit, the Borrower, except as provided in paragraph
(l) below, hereby promises and agrees to pay to the Agent for the account of
the Issuing Bank, notwithstanding paragraph (d) of this Section 2.03, by 9:00
A.M. (Houston, Texas time) on the 30th day after the date of honor of such
Purchase Drawing (the "Shawnee Village Payment Date"), the full amount of such
Purchase Drawing, plus an amount equal to (A) accrued and unpaid interest on
each Shawnee Village Bond purchased by the Company in connection with the
Purchase Drawing - Shawnee Village Bonds (without duplication of any amount of
interest already included in the full amount of such Purchase Drawing), plus
(B) an amount equal to the Shawnee Village Interest Differential, if any, at
such time (collectively, the "Shawnee Village Purchase Price"), in
immediately available funds, unless the Issuing Bank shall have been
previously reimbursed for the amount thereof before such date. Upon receipt
of payment of an amount equal to the Shawnee Village Purchase Price by the
Agent, the Agent shall release the Lien on such Bonds securing the
reimbursement obligation hereunder with respect to such Shawnee Village Bonds.
Each Bank shall, notwithstanding any other provision of this Agreement
(including the occurrence and continuance of a Default or an Event of
Default), make available to the Agent for the benefit of the Issuing Bank an
amount equal to its Pro Rata Percentage of the amount of the presented draft
under the respective Bond Support Letter of Credit on the date on which such
draft shall have been honored by the Issuing Bank. If such amount is not in
fact made available to the Agent by any such Bank on such date, then such Bank
shall pay to the Agent for the account of the Issuing Bank, on demand made by
the Issuing Bank, in addition to such amount, an amount equal to the product
of (i) the average daily Effective Federal Funds Rate per annum during the
period referred to in clause (iii) of this sentence times (ii) the amount of
-----
such Bank's Pro Rata Percentage of the amount of the presented draft times
-----
(iii) the number of days that elapse from the day the Issuing Bank has honored
such draft to the date on which the amount equal to such Bank's Pro Rata
Percentage of the amount of the presented draft becomes immediately available
to the Issuing Bank divided (iv) by 360. The Shawnee Village Bonds shall, as
-------
of the date of payment of such draft by the Issuing Bank, bear interest at a
rate per annum equal at all times to the Shawnee Village Bank Rate. In the
event that the Shawnee Village Purchase Price for Shawnee Village Bonds shall
not have been paid by the Shawnee Village Payment Date as required hereunder,
and the Issuing Bank shall not have been otherwise reimbursed, the portion of
the Shawnee Village Purchase Price not paid or reimbursed, notwithstanding any
other provision of this Agreement (including the occurrence and the
continuance of a Default or an Event of Default), shall be deemed
automatically and without any action by the Borrower to be an Advance in an
amount equal to such portion of the Shawnee Village Purchase Price not paid or
reimbursed (including, without limitation, the Shawnee Village Interest
Differential, if any) which is immediately due and payable, bearing interest
at a rate per annum (except as provided in paragraph (l) below) equal to the
lesser of (y) two percent (2%) per annum above the Effective Funds Rate, or
(z) the Highest Lawful Rate, in accordance with Section 2.03(d) hereof. In
addition to the Lien created under the Pledge and Security Agreement securing
the reimbursement obligations of the Borrower hereunder for a Purchase Drawing
- Shawnee Village Bonds, the Borrower hereby grants to the Agent, for the
benefit of each Bank, a Lien on and a security interest in such Shawnee
Village Bonds, until such time as such Advance shall have been paid in full.
Each drawing on a Bond Support Letter of Credit other than a Purchase Drawing
- Shawnee Village Bonds, and the reimbursement obligation of the Borrower in
respect thereof, shall, notwithstanding the delivery of Shawnee Village Bonds
in respect thereof to the Shawnee Village Tender Agent as custodian for the
Banks, be governed by paragraph (d) of this Section 2.03. Nothing in this
paragraph (i)-(ii) or elsewhere in this Agreement (other than as provided in
paragraph (l) below) shall diminish the Borrower's obligation under this
Agreement to provide the funds for the payment of, or on demand to reimburse
the Issuing Bank for payment of, any draft presented to, and duly honored by,
the Issuing Bank under any Letter of Credit at the time and in the manner
provided under this Section 2.03 for each Letter of Credit, including without
limitation, the Bond Support Letters of Credit, and the automatic funding of
an Advance as in this paragraph provided shall not constitute a cure or waiver
of the Event of Default for failure to timely provide such funds as in this
paragraph agreed.
(j) (i) Other than for purposes of calculation of the principal
amount of Letters of Credit issued and outstanding under Section 2.01 of this
Agreement, each drawing honored in accordance with Section 2.03(i)-(i) shall
automatically reduce the Letter of Credit Amount of the applicable Special
Letter of Credit; provided that (i) with respect to any Partial Drawing, the
Letter of Credit Amount shall be automatically increased immediately following
such payment by the amount paid for accrued interest on the Bonds (other than
such interest component attributable to the Bonds, the principal of which was
paid with the proceeds of such drawing) in connection therewith (provided that
such automatic reinstatement shall be revoked upon notice from the Agent to
the Credit Facility Trustee, at the request of the Majority Banks, of such
revocation within seven (7) calendar days from and after the date on which
such drawing was honored), and (ii) with respect to any Purchase Drawing, the
Letter of Credit Amount shall be automatically increased by an amount equal to
(x) the amount drawn by such Purchase Drawing upon reimbursement of such
amount to the Issuing Bank, less (y) the portion of the amount in clause (x)
----
hereof representing principal and interest attributable to any Liquidity Bank
Bonds, or Bonds held at such time in the name of the Borrower, the Issuer or
the User. The Agent shall provide notice to the Credit Facility Trustee and
the Trustee of receipt of funds in respect of reimbursement for each drawing
under a Special Letter of Credit which has been honored by the Issuing Bank,
specifying the date and amount of such reimbursement, and of the related
drawing; provided that, failure to provide such notice shall not diminish the
obligations of the Borrower hereunder.
(ii) Other than for purposes of calculation of the principal
amount of Letters of Credit issued and outstanding under Section 2.01 of this
Agreement, each drawing honored in accordance with Section 2.03(i)-(ii) shall
automatically reduce the Letter of Credit Amount of the applicable Bond
Support Letter of Credit; provided that (i) with respect to any Partial
Drawing - Shawnee Village Bonds, the Letter of Credit Amount shall be
automatically increased immediately following such payment by the amount of
such drawing attributable to the payment of accrued interest on the Shawnee
Village Bond (other than interest attributable to the Shawnee Village Bonds,
the principal of which was paid with the proceeds of a Partial Drawing -
Shawnee Village Bonds) in connection therewith; provided that, an automatic
reinstatement shall be revoked upon notice from the Agent to the S.V. Trustee,
at the request of the Majority Banks, of such revocation within ten (10)
calendar days from and after the date on which such drawing was honored), and
(ii) with respect to any Purchase Drawing - Shawnee Village Bonds, the Letter
of Credit Amount shall be automatically increased upon notice in writing
delivered by the Agent to the S.V. Trustee (stating that the Agent has been
reimbursed for such Purchase Drawing), by an amount equal to (x) the amount
drawn by such Purchase Drawing-Shawnee Village Bonds, less (y) the portion of
----
the amount in clause (x) hereof representing principal and interest
attributable to any Shawnee Village Bonds, or Bonds held at such time in the
name of the Agent, the Borrower, the Issuer or any Special Affiliate of either
of them. The Agent shall provide notice to the S.V. Trustee of receipt of
funds in respect of reimbursement for each drawing under a Bond Support Letter
of Credit which has been honored by the Issuing Bank, specifying the date and
amount of such reimbursement, and of the related drawing; provided that,
failure to provide such notice shall not diminish the obligations of the
Borrower hereunder.
(k) The obligations of the Borrower in respect of the Special
Letters of Credit and the Bond Support Letters of Credit shall be governed in
all respects by the terms and provisions of this Agreement.
(l) Notwithstanding anything contained herein to the contrary,
any draw on and after the Conversion Date on any Letter of Credit shall
automatically, and without any action by the Borrower, be deemed to have been
a Term Advance as of the date of payment of such draft and shall increase the
principal amount of the Term Loan in an amount equal to such Term Advance,
with Borrower obligated for interest in accordance with Sections 2.06 through
2.10 hereof (rather than as otherwise provided herein), with principal subject
to repayment after the Conversion Date in accordance with Section 2.01(c)(ii),
rather than subject to:
(x) immediate payment on the intended date of honor (or the next
Business Day) in accordance with Section 2.03(d);
(y) immediate payment on the thirtieth (30th) day after the date of
honor of the draft in accordance with subparagraph (i) (i), or (i) (ii); or
(z) reimbursement, on demand, in accordance with Section 2.03(d) or
otherwise.
SECTION 2.04. Fees. (a) The Borrower agrees to pay to the Agent
----
for the account of each Bank a commitment fee (the "Unused Borrowing
----------------
Commitment Fee") on the average daily unused portion of such respective Bank's
-----
Commitment from the date hereof until the Revolving Credit Termination Date,
at the rate per annum indicated below for the credit rating assigned to
long-term, senior unsecured Debt of the Borrower by S&P, as reflected on the
most recent Compliance Certificate of the Borrower delivered in accordance
with Section 6.01(c), or the most recent Rating Certificate delivered in
accordance with Section 6.01(h), as the case may be, and shall become
effective on the applicable Calculation Date, and shall remain in effect to
(but not including) the next Calculation Date, payable quarterly in arrears on
the first day of each calendar quarter for the prior calendar quarter during
the term of such Bank's Commitment, commencing on the date of this Agreement,
and continuing until the Revolving Credit Termination Date:
If the credit rating determined The Unused Borrowing
on any Calculation Date is: Commitment Fee is:
------------------------------- ---------------------------
For Revolving Credit Loans
---------------------------
A+, A or A-, or better .125%
BBB+ .25%
BBB, BBB- .30%
BB+ and below .50%
; provided that, if at any time no such credit rating shall be assigned to
(or in respect of) long-term, senior unsecured Debt of the Borrower by S&P,
the Unused Borrowing Commitment Fee shall mean the rate per annum indicated
below for the Coverage Ratio in effect, as reflected on the most recent
Compliance Certificate of the Borrower delivered to the Agent in accordance
with Section 6.01(c), or the most recent Rating Certificate delivered in
accordance with Section 6.01(h), as the case may be, and shall become
effective on the applicable Calculation Date, and shall remain in effect to
(but not including) the next Calculation Date, payable as set forth above.
If the Coverage Ratio The Unused Borrowing
determined on any Calculation Commitment Fee is:
-------------------------------- ---------------------
Date is
--------------------------------
For Revolving Loans:
---------------------
Greater than 3.0 to 1.0 .125 %
Equal to or less than 3.0 to 1.0 .25 %
The Unused Borrowing Commitment Fee shall be calculated by the Agent on each
Calculation Date until the Revolving Credit Termination Date, and the Agent
shall notify the Borrower and the Banks of the applicable Fee.
(b) The Borrower agrees to pay to the Issuing Bank for the
issuance of each Letter of Credit, an issuance fee ("Issuance Fee") in an
------------
amount equal to one-eighth of one percent (1/8 of 1%) of the face amount of
each Letter of Credit. The Borrower further agrees to pay to each Bank
(including the Issuing Bank) for the issuance, or purchase of participations
in, and maintenance of each Letter of Credit, a letter of credit fee (the
"Letter of Credit Fee"), in an amount equal to such Bank's Pro Rata Percentage
--------------------
of four-tenths of one percent (4/10 of 1%) per annum of the undrawn face
amount of each Letter of Credit, from the date of issuance thereof (or, as to
Existing Letters of Credit, from the date of Closing) to the date on which
such Letter of Credit expires or terminates, or the date on which funds have
been deposited with the Agent, as required under Sections 2.01(c)(iii) or
8.01 hereof, whichever is earlier. The Issuance Fee shall be payable in full
in advance of the issuance of such Letter of Credit. The Letter of Credit Fee
shall be payable quarterly in arrears on the first day of each calendar
quarter for the prior calendar quarter commencing on the date of issuance of
each Letter of Credit (or, as to Existing Letters of Credit, from the date of
Closing).
(c) The Fees payable under Sections 2.04(a) and (b) shall be
calculated by the Agent on the basis of a 365 or 366 day year, as the case may
be, for the actual days (including the first day but excluding the last day)
occurring in the period for which such fee is payable. Each determination by
the Agent under this Section 2.04 shall be conclusive and binding for all
purposes, absent manifest error.
SECTION 2.05. Reduction of the Commitments. The Borrower shall
----------------------------
have the right, upon at least three (3) Business Days' notice to the Agent, to
terminate in whole or reduce ratably in part the unused portions of the
Commitments or the Letter of Credit Commitments of the Banks, provided that
--------
each partial reduction shall be in the aggregate amount of $5,000,000 or an
integral multiple thereafter of $1,000,000; and further provided that, the
Letter of Credit Commitments may never be reduced below an amount equal to the
aggregate undrawn face amount of Letters of Credit issued and outstanding at
any time. Any termination or reduction pursuant to this Section 2.05 shall be
a permanent termination or reduction of the Commitments.
SECTION 2.06. Interest. Each Advance shall bear interest at the
--------
rates set forth below, and the Borrower shall pay interest on the unpaid
principal amount of each Advance made by each Bank from the date of such
Advance until such principal amount shall be paid in full, at the times and at
the rates per annum set forth below:
(a) LIBOR Rate Advances. During such periods as such Advance is
-------------------
a LIBOR Rate Advance, a rate per annum equal at all times during each Interest
Period for such Advance to the lesser of (I) the sum of the LIBOR Rate for
such Interest Period for such Advance plus the Applicable Margin, together
with additional interest due under Section 2.07 hereof, if any, and (ii) the
Highest Lawful Rate, payable quarterly in arrears on the first day of each
calendar quarter, commencing with the calendar quarter following the calendar
quarter in which the date of this Agreement occurs, and on the Termination
Date; provided that, any amount of principal which is not paid when due
--------
(whether at stated maturity, by acceleration or otherwise) shall bear
interest, from the date on which such amount is due until such amount is paid
in full, payable on demand, at a rate per annum equal at all times to the
lesser of (I) two percent (2%) per annum above the Effective Federal Funds
Rate in effect from time to time and (ii) the Highest Lawful Rate.
(b) Effective Federal Funds Rate Advances. During such periods
-------------------------------------
as such Advance is an Effective Federal Funds Rate Advance, a rate per annum
equal at all times to the lesser of (i) the Effective Federal Funds Rate and
(ii) the Highest Lawful Rate, payable quarterly in arrears on the first day of
each calendar quarter, commencing with the calendar quarter following the
calendar quarter in which the date of this Agreement occurs, and on the
Termination Date; provided that the Borrower may only elect an Effective
Federal Funds Rate Advance (A) during a period for which the Borrower has been
notified in accordance with Sections 2.08(b) or (d) that a LIBOR Rate Advance
shall not be available to the Borrower or (B) with respect to such Bank's Pro
Rata Percentage of an Advance after the Borrower has received a demand for
compensation pursuant to Sections 3.04(a) or (b), or pursuant to Section 2.07,
and then, only for such period as such compensation shall be required; further
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provided that, any amount of principal which is not paid when due (whether at
--------
stated maturity, by acceleration or otherwise) shall bear interest, from the
date on which such amount is due until such amount is paid in full, payable on
demand, at a rate per annum equal at all times to the lesser of (I) two
percent (2%) per annum above the Effective Federal Funds Rate in effect from
time to time and (ii) the Highest Lawful Rate.
(c) All computations of interest hereunder at the Effective
Federal Funds Rate pursuant to this Article II shall be made by the Agent on
the basis of a year of 365 or 366 days, as the case may be, and all
computations of interest hereunder at the LIBOR Rate (plus the Applicable
Margin) pursuant to this Article II shall be made by the Agent on the basis of
a year of 360 days (but if a 360 day calculation would result in a rate in
excess of the Highest Lawful Rate, then based on a year of 365 or 366 days, as
the case may be), in each case (whether for a LIBOR Rate Advance or an
Effective Federal Funds Rate Advance) for the actual number of days (including
the first day but excluding the last day) occurring in the period for which
such interest is payable. Each determination by the Agent of an interest rate
hereunder shall be conclusive and binding for all purposes, absent manifest
error.
SECTION 2.07. Additional Interest on LIBOR Rate Advances.
-------------------------------------------
Subject to Section 10.09 hereof, the Borrower shall pay to each Bank, at such
time as and so long as such Bank shall be required under regulations of the
Board of Governors of the Federal Reserve System to maintain reserves with
respect to liabilities or assets consisting of or including Eurocurrency
Liabilities, additional interest on the unpaid principal amount of each
Advance of such Bank during such periods as such Advance is a LIBOR Rate
Advance, from the date of such Advance until such principal amount is paid in
full, at an interest rate per annum equal at all times to the remainder
obtained by subtracting (i) the LIBOR Rate for such Interest Period for such
LIBOR Rate Advance from (ii) the rate obtained by dividing such LIBOR Rate by
a percentage equal to 100% minus the LIBOR Rate Reserve Percentage of such
Bank for such Interest Period, payable on each date on which interest is
payable on such LIBOR Rate Advance pursuant to Section 2.06(a) hereof. Such
additional interest shall be determined by such Bank (subject to Section
10.09) and notified to the Borrower through the Agent, and each such
notification shall be conclusive absent manifest error.
SECTION 2.08. Interest Rate Determination and Protection. (a)
------------------------------------------
The rate of interest for each LIBOR Rate Advance specified in a Notice of
Borrowing or a Notice of Interest Conversion, shall be determined by the Agent
two (2) Business Days before the first day of the Interest Period applicable
for such Advance. The Agent shall give prompt notice to the Borrower and the
Banks of the applicable interest rate determined by the Agent for purposes of
Section 2.06(a) hereof, and each such determination by the Agent shall be
conclusive, absent manifest error.
(b) If, with respect to any LIBOR Rate Advances, the Majority
Banks notify the Agent that the LIBOR Rate (plus the Applicable Margin) for
any Interest Period for such Advances will not adequately reflect the cost to
such Majority Banks of making, funding or maintaining their respective LIBOR
Rate Advances for such Interest Period, the Agent shall forthwith promptly so
notify the Borrower and the Banks, whereupon;
(i) each LIBOR Rate Advance, which has been effected, will
automatically, on the last day of the then existing Interest Period therefor,
convert into an Effective Federal Funds Rate Advance, and
(ii) the obligation of the Banks to make, or to convert Advances
into, LIBOR Rate Advances shall be suspended until the Agent shall notify the
Borrower and the Banks that the circumstances causing such suspension no
longer exist.
(c) If the Borrower shall fail to deliver to the Agent a Notice
of Interest Conversion in accordance with Section 2.09 hereof or to select the
duration of any subsequent Interest Period for the principal amount
outstanding under any LIBOR Rate Advance prior to the last day of the Interest
Period applicable to such Advance, the Agent will forthwith so notify the
Borrower and the Banks, and such Advances will automatically, on the last day
of the then existing Interest Period therefor, convert into LIBOR Rate
Advances at the LIBOR Rate in effect two Business Days prior to such date for
an Interest Period of one month, plus the Applicable Margin.
(d) Notwithstanding any other provision of this Agreement, if
any Bank shall notify the Agent that the introduction of or any change in or
in the interpretation of any law or regulation makes it unlawful, or any
central bank or other governmental authority asserts that it is unlawful, for
any Bank to perform its obligations hereunder to make LIBOR Rate Advances or
to fund or maintain LIBOR Rate Advances hereunder, (i) the obligation of such
Bank to make, or to convert Advances into, LIBOR Rate Advances shall be
suspended until such Bank shall notify the Borrower and the Agent that the
circumstances causing such suspension no longer exist and (ii) the Borrower
shall forthwith prepay in full all LIBOR Rate Advances of such affected Bank
then outstanding, unless the Borrower, within two (2) Business Days of notice
from the Agent, converts all LIBOR Rate Advances of such Bank then outstanding
into Effective Federal Funds Rate Advances in accordance with Section 2.09.
SECTION 2.09. Voluntary Interest Conversion of Advances. The
-----------------------------------------
Borrower may on any Business Day prior to the Termination Date, upon the
Borrower's written notice in the form set forth as Exhibit 2.09 attached
hereto ("Notice of Interest Conversion"), or oral notice (containing the
--------------------------------
information requested in a Notice of Interest Conversion) given to the Agent
not later than 10:00 A.M. (Houston, Texas time) on the third (3rd) Business
Day prior to the date of the proposed interest conversion in the case of a
LIBOR Rate Advance, (i) convert all such LIBOR Rate Advances into an Effective
Federal Funds Rate Advances or (ii) convert all LIBOR Rate Advances for a
specified Interest Period into LIBOR Rate Advances for a different Interest
Period; provided however, with respect to any oral Notice of Interest
--------
Conversion, the Borrower shall promptly confirm such notice in writing;
provided further that, any conversion of any LIBOR Rate Advances into an
--
Effective Federal Funds Rate Advance or a different Interest Period shall be
made on, and only on, the last day of an Interest Period for such LIBOR Rate
Advances (unless the provisions of Sections 2.07, 2.08(d) or 3.04 apply), and;
provided further that the Borrower may convert an Advance into an Effective
Federal Funds Rate Advance only if (i) the Borrower has been notified in
accordance with Section 2.08(b) or (d) that a LIBOR Rate Advance is not
available at such time to the Borrower or if (ii) additional interest becomes
due under Section 2.07, or additional amounts become due under Section 3.04.
Each such Notice of Interest Conversion shall specify therein (i) the
requested date of such interest conversion, (ii) the Advances to be converted
and (iii) if such interest conversion is into Advances constituting LIBOR Rate
Advances, the duration of the Interest Period for each such Advance. The
Agent shall promptly deliver a copy of each Notice of Interest Conversion to
each Bank. Each Notice of Interest Conversion shall be irrevocable and
binding on the Borrower.
SECTION 2.10. Funding Losses Relating to LIBOR Rate Advances.
----------------------------------------------
(a) If any payment of principal of, or interest conversion of, any LIBOR Rate
Advance is made other than on the last day of an Interest Period relating to
such Advance, as a result of a conversion pursuant to Section 2.09, or a
payment pursuant to Sections 3.02, 3.03, or acceleration of the maturity of
any Note in accordance with the terms hereof, or for any other reason, the
Borrower shall, upon demand by the Agent or any Bank (with a copy of such
demand to the Agent), pay to the Agent for the account of such Bank any
amounts required to compensate such Bank for any additional losses, costs, or
expenses which it may reasonably incur as a result of such payment or interest
conversion, including, without limitation, any loss, cost, or expense incurred
by reason of the liquidation or reemployment of the amounts so prepaid or of
deposits or other funds acquired by such Bank to fund or maintain such
Advance. Each Bank requesting compensation under this Section 2.10 shall
deliver to the Borrower (with a copy to the Agent) a certificate of such Bank
setting forth the calculation of such amounts with reasonable specificity and
such certificate shall be conclusive, absent manifest error.
(b) IN THE CASE OF ANY BORROWING, THE BORROWER SHALL INDEMNIFY
EACH BANK AGAINST ANY LOSS, COST, OR EXPENSE INCURRED BY SUCH BANK AS A RESULT
OF ANY FAILURE OF THE BORROWER TO FULFILL ON OR BEFORE THE DATE SPECIFIED IN A
NOTICE OF BORROWING THE APPLICABLE CONDITIONS SET FORTH IN ARTICLE IV,
INCLUDING, WITHOUT LIMITATION, ANY LOSS, COST, OR EXPENSE INCURRED BY REASON
OF THE LIQUIDATION OR REEMPLOYMENT OF THE AMOUNTS SO PREPAID OR OF DEPOSITS OR
OTHER FUNDS ACQUIRED BY SUCH BANK TO FUND THE ADVANCE TO BE MADE BY SUCH BANK
AS PART OF SUCH BORROWING WHEN SUCH ADVANCE, AS A RESULT OF SUCH FAILURE, IS
NOT MADE ON SUCH DATE.
(c) Any Bank demanding payment under this Section 2.10 shall
deliver to the Borrower and the Agent a statement reasonably setting forth the
amount and manner of determining such loss, cost, or expense, which statement
shall be conclusive and binding for all purposes, absent manifest error.
SECTION 2.11. Extension of Commitments. The Commitments
--------------------------
(including the Letter of Credit Commitments) shall terminate on November 21,
1999, unless on a Business Day which is at least ninety (90) days (but no more
than one hundred fifty (150) days) prior to the applicable Annual Date, the
Agent shall have received notice in writing from the Borrower of its desire to
extend the Revolving Credit Termination Date to a date which is the
anniversary of such then current Revolving Credit Termination Date in the year
immediately succeeding the year in which the Revolving Credit Termination Date
is then scheduled to occur, and upon consent in writing given to the Agent and
the Borrower by each Bank on or prior to a date which is thirty (30) days
before the applicable Annual Date (such period ending on such date, the
"Consent Period"), the Revolving Credit Termination Date shall be extended to
---------------
such requested date, whereupon the Commitments (including the Letter of Credit
Commitments) shall continue in force and effect until such new Revolving
Credit Termination Date, on the terms and conditions set forth in this
Agreement, as hereafter amended from time to time. If any Bank does not
consent to the extension of the Revolving Credit Termination Date pursuant to
this Section 2.11 (which determination shall be made by each Bank in its sole
discretion), all of the Commitments (including the Letter of Credit
Commitments) shall terminate on the Revolving Credit Termination Date in
effect prior to the request for extension; provided that, notwithstanding the
foregoing, the Borrower may, at its option, upon notice to the Agent in
accordance with the provisions of Section 2.01(c), elect to have the principal
amount of Advances outstanding as of the Revolving Credit Termination Date
converted into a Term Loan, in accordance with the provisions of Section
2.01(c) hereof.
ARTICLE III
PAYMENTS, PREPAYMENTS,
INCREASED COSTS AND TAXES
SECTION 3.01. Payments and Computations. (a) The Borrower shall
-------------------------
make each payment under this Agreement and under the Notes or in connection
with the Letters of Credit not later than 10:00 A.M. (Houston time) on the day
when due in U.S. dollars to the Agent at its address referred to in Section
10.02 in immediately available funds. The Agent will promptly thereafter
cause to be distributed like funds relating to the payment of principal or
interest or commitment fees (to the extent received by the Agent) ratably to
the Banks, and like funds relating to the payment of any other amount payable
to any Bank (to the extent received by the Agent) to such Bank in each case to
be applied in accordance with the terms of this Agreement.
(b) Whenever any payment hereunder or under the Notes shall be
stated to be due on a day other than a Business Day, such payment shall be
made on the next succeeding Business Day, and such extension of time shall in
such case be included in the computation of payment of interest or fee, as the
case may be; provided however, if such extension would cause payment of
interest on or principal of LIBOR Rate Advances to be made in the next
following calendar month, such payment shall be made on the next preceding
Business Day; further provided that, the foregoing shall not obligate the
Borrower to pay amounts under Section 2.10.
(c) Unless the Agent shall have received notice from the
Borrower prior to the date on which any payment is due to the Banks hereunder
that the Borrower will not make such payment in full, the Agent may assume
that the Borrower has made such payment in full to the Agent on such date and
the Agent may, in reliance upon such assumption, cause to be distributed to
each Bank on such due date an amount equal to the amount then due such Bank.
If and to the extent the Borrower shall not have so made such payment in full
to the Agent, each Bank shall repay to the Agent forthwith on demand such
amount distributed to such Bank together with interest thereon, for each day
from the date such amount is distributed to such Bank until the date such Bank
repays such amount to the Agent, at the lesser of (i) the Federal Funds Rate
or (ii) the Highest Lawful Rate.
(d) Notwithstanding anything in this Agreement to the contrary,
proceeds of amounts paid to the Issuing Bank for reimbursement of a drawing
under a Special Letter of Credit or a Bond Support Letter of Credit honored by
the Issuing Bank shall be promptly thereafter distributed by the Agent to each
Bank in accordance with such Bank's Pro Rata Percentage interest in such
Special Letter of Credit or Bond Support Letter of Credit, as the case may be,
for reduction of principal or interest outstanding, as the case may be, with
respect to such Bank's participation in such drawing.
SECTION 3.02. Voluntary Prepayments. Subject to Section 2.10,
---------------------
the Borrower may, upon notice delivered to the Agent prior to 11:00 A.M.
(Houston, Texas time) on any Business Day prior to the Termination Date
stating the aggregate principal amount of the prepayment and the Advances to
be prepaid, prepay the outstanding principal amounts of such Advances
comprising part of the same Borrowing in whole or ratably in part, provided
--------
however, that all such prepayments shall be made without premium or penalty
thereon; and provided further that, losses incurred by any Bank under Section
--------
2.10 shall be payable with respect to each such prepayment. Such notice shall
be irrevocable and the payment amount specified in such notice shall be due
and payable on the prepayment date described in such notice. Partial
prepayments with respect to any Advance shall be in an aggregate principal
amount equal to the lesser of (a) $1,000,000 or in greater integral multiples
of $1,000,000, or (b) the aggregate principal amount of Advances of such Banks
outstanding. In the event that the Borrower fails to notify the Agent as to
which Advance is to be prepaid, the partial prepayments shall be applied in
the order of the next succeeding expiration of outstanding Interest Periods.
SECTION 3.03. Mandatory Prepayments. (a) Within the time period
---------------------
specified in Section 7.04, the Borrower shall deliver to the Agent, as a
prepayment on the Notes, an amount equal to the Adjusted Net Proceeds of a
disposition of Real Property of the Borrower or any Subsidiary permitted under
Section 7.04. Upon receipt of such amount, the Agent shall promptly deliver
to each Bank, to the extent required under Section 7.04, its Pro Rata
Percentage of such prepayment. Upon the date on which a prepayment is
required under Section 7.04, the Commitment of each Bank shall be permanently
reduced in an amount equal to such Bank's Pro Rata Percentage of such Adjusted
Net Proceeds.
(b) If at any time the sum of (i) the principal balance
outstanding on the Notes, and (ii) the aggregate undrawn face amount of
Letters of Credit issued and outstanding at such time, exceeds the Total
Commitment then in effect, the Borrower shall immediately pay to the Agent as
a prepayment on the Notes for the ratable account of each Bank the amount of
such excess.
(c) Together with principal payments on the Term Loan required
to be made in accordance with Section 2.01(c)(ii) hereof, Borrower shall
deliver to the Agent, as a prepayment on the Notes, on the Term Anniversary
Date, an amount equal to 50% of the aggregate undrawn face amount of all
Letters of Credit issued and outstanding on such date (calculated as of the
Term Anniversary Date), and on each quarterly payment date thereafter, as
described under Section 2.01(c)(ii) hereof, an amount equal to twelve and
one-half percent (12 1/2%) of the aggregate undrawn face amount of all
Letters of Credit issued and outstanding on such date (calculated as of the
Term Anniversary Date) reduced by the respective quarter's L/C Credit. As
used herein, the term "L/C Credit' means the sum of (i) the face amount of all
Letters of Credit under which there has been no drawing (A) which, during the
quarter in which the quarterly payment is due, have expired by their terms or
(B) for which, during such quarter, the original has been returned undrawn to
the Issuing Bank, and (ii) the undrawn portion of any Letter of Credit under
which there has been a partial drawing but (A) which, during the quarter in
which the quarterly payment is due, has expired by its terms or (B) for which,
during such quarter, the original has been returned to the Issuing Bank.
SECTION 3.04. Increased Costs; Capital Adequacy. (a) If, due
---------------------------------
to either (i) the introduction of or any change (other than any change by way
of imposition or increase of reserve requirements, in the case of LIBOR Rate
Advances, included in the LIBOR Rate Reserve Percentage) in or in the
interpretation of any law or regulation or (ii) the compliance with any
guideline or request from any central bank or other governmental authority
(whether or not having the force of law), there shall be any increase in the
cost to any Bank of agreeing to make or making, funding or maintaining LIBOR
Rate Advances (without duplication of payments made under Section 3.05 or any
other provision of this Agreement), then the Borrower shall from time to time,
upon demand by such Bank (with a copy of such demand to the Agent), pay to the
Agent for the account of such Bank additional amounts sufficient to compensate
such Bank for such increased cost; provided that the Borrower shall only be
liable for such additional costs incurred by such Bank for the period
commencing thirty (30) days after the date of notice from such Bank to the
Borrower of such additional amounts; and provided further, that subject to
Section 2.10, the Borrower may elect to convert outstanding LIBOR Rate
Advances into Effective Federal Funds Rate Advances in accordance with Section
2.09.
(b) If any Bank determines that compliance with any law or
regulation or any guideline or request from any central bank or other
governmental authority, enacted after the date of this Agreement, or any new
interpretation of an existing law, regulation, guideline or request (whether
or not having the force of law) affects or would affect the amount of capital
required or expected to be maintained by such Bank or any corporation
controlling such Bank and that the amount of such capital is increased by or
based upon the existence of such Bank's Commitment to lend hereunder and other
commitments of this type, or its Letter of Credit Commitment, then, upon
demand by such Bank (with a copy of such demand to the Agent), the Borrower
shall pay to the Agent for the account of such Bank, from time to time as
specified by such Bank, additional amounts sufficient to compensate such Bank
or such corporation in the light of such circumstances for such increased
capital requirement; provided that the Borrower shall only be liable for such
additional costs incurred by such Bank for the period commencing thirty (30)
days after the date of notice from such Bank to the Borrower of such
additional amounts; and provided further, that subject to Section 2.10, the
Borrower may elect to convert outstanding LIBOR Rate Advances into Effective
Federal Funds Rate Advances in accordance with Section 2.09.
SECTION 3.05. Taxes. (a) Any and all payments by the Borrower
-----
hereunder or under the Notes (including in respect of any Letter of Credit)
shall be made, in accordance with Section 3.01, free and clear of and without
deduction for any and all present or future taxes, levies, imposts,
deductions, charges or withholdings, and all liabilities with respect thereto,
excluding, in the case of each Bank and the Agent, taxes imposed on its
income, and franchise taxes imposed on it, by the jurisdiction under the laws
of which such Bank or the Agent (as the case may be) is organized or any
political subdivision thereof and, in the case of each Bank, taxes imposed on
its income, and franchise taxes imposed on it, by the jurisdiction of such
Bank or any political subdivision thereof. If the Borrower shall be required
by law to deduct any such amounts from or in respect of any sum payable
hereunder or under any Note to any Bank or the Agent, (I) the sum payable
shall be increased as may be necessary so that after making all required
deductions (including deductions applicable to additional sums payable under
this Section 3.05) such Bank or the Agent (as the case may be) receives an
amount equal to the sum it would have received had no such deductions been
made, (ii) the Borrower shall make such deductions and (iii) the Borrower
shall pay the full amount deducted to the relevant taxation authority or other
authority in accordance with applicable law. The Borrower further agrees to
pay any present or future stamp or documentary taxes or any other excise or
property taxes, charges or similar levies which arise from any payment made
hereunder or under the Notes or from the execution, delivery or registration
of, or otherwise with respect to, this Agreement or the Notes.
(b) Without prejudice to the survival of any other agreement of
the Borrower hereunder, the agreements and obligations of the Borrower
contained in this Section 3.05 shall survive the payment in full of principal
and interest hereunder and under the Notes.
SECTION 3.06. Certificate of Bank. Any Bank demanding
---------------------
compensation under Section 3.04 or 3.05 shall deliver to the Borrower and the
Agent a statement reasonably setting forth the amount and manner of
determining such loss, cost or expense, which statement shall be conclusive
and binding for all purposes, absent manifest error.
ARTICLE IV
CONDITIONS OF LENDING
SECTION 4.01. Conditions Precedent to Initial Advances and
--------------------------------------------
Issuance of Letters of Credit. The obligation of each Bank to make its
---------------------------------
initial Advance or of the Issuing Bank to issue any Letter of Credit on or
after the date of this Agreement is subject to the condition precedent that
the Agent shall have received (or the actions described below shall have
occurred, as the case may be), the following, in form and substance
satisfactory to the Agent and (except for the Notes) in sufficient copies for
each Bank:
(a) The Notes, duly executed by the Borrower and payable to the
order of the Banks, respectively.
(b) This Agreement, duly executed by the Borrower.
(c) A Guaranty Agreement duly executed by each Guarantor.
(d) A certificate of the Secretary of the Borrower certifying
(i) the names and true signatures of the officers of the Borrower authorized
to sign each Loan Document to which the Borrower is a party and the notices
and other documents to be delivered by the Borrower pursuant to any such Loan
Document; (ii) the Restated Declaration of Trust dated March 23, 1988,
together with any amendments thereto, (the "Organizational Documents") of the
------------------------
Borrower as in effect on the date of such certification; and (iii) the
resolutions of the Board of Trust Managers of the Borrower approving and
authorizing the execution, delivery, and performance by the Borrower of each
Loan Document to which the Borrower is a party, the notices and other
documents to be delivered by the Borrower pursuant to any such Loan Document,
and the transactions contemplated thereunder.
(e) A certificate of the Secretary of each Guarantor certifying
(i) the names and true signatures of the officers of such Guarantor authorized
to sign each Loan Document to which such Guarantor is a party and the notices
and other documents to be delivered by such Guarantor pursuant to any such
Loan Document; (ii) the By-laws and Articles of Incorporation of such
Guarantor as in effect on the date of such certification; and (iii) the
resolutions of the Board of Directors of such Guarantor approving and
authorizing the execution, delivery, and performance by such Guarantor of each
Loan Document to which each such Guarantor is a party, the notices and other
documents to be delivered by such Guarantor pursuant to any such Loan
Document, and the transactions contemplated thereunder.
(f) Subject to Section 6.08, certificates of appropriate
officials as to the existence and good standing of each of the Borrower and
each Guarantor in its jurisdiction of organization or incorporation, and any
and all other jurisdictions where the Property owned or the business
transacted by each of the Borrower and each Guarantor requires each of the
Borrower and each Guarantor to be qualified therein and where the failure to
be so qualified would have a material adverse effect on the business
operations or financial condition of the Borrower and the Guarantors, taken as
a whole.
(g) A favorable opinion of Dow, Xxxxxxx & Xxxxxxxx, P.C.,
counsel for the Borrower and the Guarantors, in form and substance
satisfactory to the Banks.
(h) Payment to the Agent of all fees and expenses payable at
Closing, including, without limitation, fees of counsel to the Agent and the
Banks payable under Section 10.04.
(i) Payment in full of all amounts outstanding and due and owing
on the Closing Date by the Borrower or any Subsidiary, if any, under the
Credit Agreement, dated November 22, 1994, as such agreement has been amended
from time to time (the "Prior Credit Agreement"), by and between the
Borrower, the Agent and the Prior Banks, other than principal of the Prior
Notes not otherwise paid to the Agent for the benefit of the Banks on the date
of Closing and which is represented and evidenced by the new Notes issued
hereunder pursuant to Section 2.02(c).
(j) Such other documents and instruments with respect to the
transactions contemplated hereby as the Agent may reasonably request.
SECTION 4.02. Conditions Precedent to Each Borrowing. The
--------------------------------------
obligation of each Bank to make an Advance under the Revolving Credit Loan or
of the Issuing Bank to issue any Letter of Credit on the occasion of each
Borrowing (including the initial Borrowing) shall be subject to the further
conditions precedent that on the date of such Borrowing (a) the Agent shall
have received a Notice of Borrowing, or Letter of Credit Request, as the case
may be, in accordance with the terms of this Agreement, and (b) the following
statements shall be true and correct (and each of the giving of the applicable
Notice of Borrowing or Letter of Credit Request, as the case may be, and the
acceptance by the Borrower of the proceeds of such Borrowing, shall constitute
a representation and warranty by the Borrower that on the date of such
Borrowing such statements are true and correct):
(i) The representations and warranties contained in Article V of this
Agreement are true and correct in all material respects on and as of the date
of such Borrowing, before and after giving effect to such Borrowing, and to
the application of the proceeds therefrom, as though made on and as of such
date, and
(ii) No event has occurred and is continuing, or would result from
such Borrowing or from the application of the proceeds therefrom, which
constitutes (or would constitute) a Default or an Event of Default.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
In order to induce the Banks to enter into this Agreement, the
Borrower represents and warrants to the Banks (which representations and
warranties will survive the delivery of any Note, the issuance of any Letter
of Credit, the making of any Advance and the conversion of the Revolving
Credit Loan into a Term Loan) that:
SECTION 5.01. Existence. The Borrower (a) is a real estate
---------
investment trust duly organized under the Texas Real Estate Investment Trust
Act, Tex. Rev. Civ. Stat. Xxx. art. 6138A (Xxxxxx 1986) (the "Act"), and in
good standing under the Act and the laws of the State of Texas, (b) has the
power to own its Property and to carry on its business as now conducted, and
(c) is duly qualified to do business and is in good standing in every
jurisdiction where such qualification is necessary. Each Subsidiary of the
Borrower (x) is duly organized, validly existing and in good standing under
the laws of the jurisdiction in which it is incorporated, (b) has the power to
own its property and carry on its business as now conducted, and (I) is duly
qualified to do business and is in good standing in every jurisdiction in
which such qualification is necessary, and where the failure to be so
qualified or in good standing would have a material adverse effect on the
business operations or financial condition of the Borrower and its
Subsidiaries, taken as a whole. The Subsidiaries of the Borrower, and the
jurisdiction of organization of each such Subsidiary, are set forth on Exhibit
-------
5.01 hereto.
----
SECTION 5.02. Financial Condition. The Borrower has furnished
-------------------
the Bank with consolidated financial statements as at and for the twelve-month
period ended December 31, 1995, accompanied by the opinion of Deloitte &
Touche, and quarterly unaudited consolidated financial statements as at and
for the three-month periods ending March 31, 1996, June 30, 1996, and
September 30, 1996. These statements are true and correct and have been
prepared in conformity with GAAP consistently followed throughout the periods
involved. They fully and accurately reflect the financial condition of the
Borrower and its Subsidiaries and the results of their operations as at the
date and for the period indicated.
SECTION 5.03. Use of Proceeds; Margin Stock. Neither the
------------------------------
Borrower nor any Subsidiary owns any Margin Stock. The proceeds of the Loans
shall be used for general trust purposes. None of the proceeds of Borrowings
hereunder will be used for the purpose of purchasing or carrying any Margin
Stock or for the purpose of reducing or retiring any indebtedness which was
originally incurred to purchase or carry a Margin Stock or for any other
purpose which might constitute this transaction a "purpose" credit within the
meaning of said Regulation U, as now in effect or as it may hereafter be
amended. Neither the Borrower nor any Subsidiary nor any agent acting on its
or their behalf has taken or will take any action which might cause this
Agreement or any Advance to violate Regulation G, T, U or X or any other
regulation of the Board of Governors of the Federal Reserve System or to
violate the Securities Exchange Act of 1934, in each case as in effect now or
as the same may hereafter be in effect on the date of any Borrowing hereunder.
SECTION 5.04. Binding Obligations. The Borrower has the power
-------------------
and authority under the Act to make and carry out this Agreement, to make the
borrowings provided for herein, to execute and deliver the Notes, and to
perform its obligations hereunder and under the Notes; and all such action has
been duly authorized by all necessary proceedings on its part. Each
Subsidiary which is a party to a Guaranty Agreement has the power and
authority to perform its obligations in accordance with the terms and
conditions of the Guaranty Agreement to which it is a party, and all such
action has been duly authorized by all necessary proceedings on its part.
Each of this Agreement and the Notes have been duly and validly executed and
delivered by the Borrower and constitute a valid and legally binding
obligation of the Borrower enforceable in accordance with its terms, and the
Guaranty Agreements have been duly executed and delivered by the Guarantors
and constitute valid and legally binding obligations of each such Guarantor
enforceable in accordance with the respective terms thereof and of this
Agreement, except as limited by Debtor Laws.
SECTION 5.05. No Conflict or Resultant Lien. The execution,
-----------------------------
delivery, and performance by the Borrower and each Subsidiary of each Loan
Document to which it is a party, the Borrowings hereunder by the Borrower as
contemplated herein, and the effectuation of the transactions contemplated by
any Loan Document, do not and will not violate any provision of, or result in
a default under, the Borrower's Organizational Documents, or the Articles of
Incorporation or other charter documents or by-laws of any Subsidiary, or any
material agreement to which the Borrower or such Subsidiary is a party, or
Governmental Requirement to which the Borrower or such Subsidiary is subject,
or result in the creation or imposition of any Lien upon any Property of the
Borrower or such Subsidiary.
SECTION 5.06. Compliance with Other Agreements. Neither the
--------------------------------
Borrower nor any Subsidiary is in default in any material respect under any
Governmental Requirement. Neither the Borrower nor any Subsidiary is in
default under any other agreement, which default could have a material adverse
effect on the business, operations or financial condition of the Borrower and
its Subsidiaries, taken as a whole, or the ability of the Borrower or any
Guarantor to perform its obligations under this Agreement or any other Loan
Document to which it is a party.
SECTION 5.07. No Consent. No authorization or approval or other
----------
action by, and no notice to or filing with, any Person or any Governmental
Authority is required for the due execution, delivery, and performance by each
of the Borrower or any Subsidiary of any Loan Document to which it is a party
or the Borrowings hereunder, in each case as contemplated herein, or the
effectuation of the transactions contemplated under any Loan Document.
SECTION 5.08. Litigation. Except as described on Exhibit 5.08,
----------
attached hereto or as disclosed in any Compliance Certificate, there are no
material actions, suits, or proceedings pending or, to the knowledge of the
Borrower, threatened against or affecting the Borrower or any Subsidiary, or
the Properties of the Borrower or any Subsidiary.
SECTION 5.09. Taxes; Governmental Charges. The Borrower and
---------------------------
each Subsidiary has filed or caused to be filed all federal, state, and
foreign income tax returns which are required to be filed, and has paid or
caused to be paid all taxes as shown on such returns or on any assessment
received by it to the extent that such taxes have become due and payable,
except for such taxes and assessments as are being contested in good faith in
appropriate proceedings and reserved for in accordance with GAAP in the manner
required by Section 6.04.
SECTION 5.10. Full Disclosure. All information furnished by or
---------------
on behalf of the Borrower or any Subsidiary to the Agent or any Bank for
purposes of or in connection with this Agreement or any transaction
contemplated hereby is true and accurate in all material respects and not
incomplete by omitting to state any material fact necessary to make such
information not misleading. There is no material fact relevant to this
Agreement or the transactions contemplated by this Agreement known to the
Borrower which has not been disclosed herein or in such other written
documents, information or certificates furnished to the Agent and the Banks
for use in connection with the transactions contemplated hereby.
SECTION 5.11. Investment Company Act. Neither the Borrower nor
----------------------
any Subsidiary is an "investment company" or a company "controlled" by an
"investment company", within the meaning of the Investment Company Act of
1940, as amended.
SECTION 5.12. Compliance with Law. Except as disclosed in any
-------------------
Compliance Certificate and approved by the Banks, the business and operations
of the Borrower and each Subsidiary as conducted at all times have been and
are in compliance in all material respects with all applicable Governmental
Requirements.
SECTION 5.13. ERISA. Each of the Borrower and each Subsidiary
-----
is in compliance in all material respects with all applicable provisions of
ERISA and the Code with respect to each Plan, including the fiduciary
provisions thereof, and each Plan is, and has been, maintained in material
compliance with ERISA and, where applicable, the Code. Full payment when due
has been made of all material amounts which the Borrower or any Subsidiary is
required under the terms of each Plan or applicable law to have paid as
contributions to such Plan as of the date hereof. For purposes of this
Section 5.13, the term "material" shall mean a liability in excess of
$10,000,000.
SECTION 5.14. No Default or Event of Default. No Default or
------------------------------
Event of Default hereunder has occurred and is continuing.
SECTION 5.15. Permits and Licenses. All material permits,
--------------------
licenses and other governmental authorizations necessary for the Borrower or
any Subsidiary to carry on its business have been obtained and are in full
force and effect and neither the Borrower nor any Subsidiary is in breach of
the foregoing. Each of the Borrower and each Subsidiary owns or possesses
adequate licenses or other valid rights to use United States trademarks, trade
names, service marks, copyrights, patents and applications therefor which are
necessary for the conduct of the business, operations or financial condition
of the Borrower or such Subsidiary.
SECTION 5.16. Insurance. Each of the Borrower and each
---------
Subsidiary maintains insurance of such types as is usually carried by
companies of established reputation engaged in the same or similar business
and which are similarly situated with financially sound and reputable
insurance companies and associations acceptable to the Agent, with a rating of
at least A-, financial size category, Class VI as set forth in Best's Key
Rating Guide, published by A.M. Best Company, Inc., and in such amounts as
such insurance is usually carried by similar businesses, and in any event, in
compliance with the requirements of Section 6.03. If the rating of any
insurance company or association is or becomes below the aforesaid minimum
requirements, then Borrower and its Subsidiaries shall have 45 days to secure
(i) an appropriate reinsurance or other endorsement which will satisfy the
aforesaid minimum standards, or (ii) secure replacement insurance coverage
satisfying the aforesaid minimum standards.
All representations and warranties in each Loan Document shall
survive the delivery of the Notes, the making of any Advance and the
conversion of the Revolving Credit Loan into a Term Loan, and shall continue
for 366 days after the repayment of the Notes, the expiration or termination
of, any Letter of Credit, and the termination of the Letter of Credit
Commitment and the Commitments; any investigation at any time made by or on
behalf of the Agent or any Bank shall not diminish any Bank's right to rely
thereon.
ARTICLE VI
AFFIRMATIVE COVENANTS OF THE BORROWER
So long as any Note shall remain unpaid or any Letter of Credit
remains outstanding, or any Bank shall have any Commitment hereunder, the
Borrower covenants and agrees that:
SECTION 6.01. Reporting and Notice Requirements. The Borrower
---------------------------------
will furnish to each Bank, with respect to items described in Subsections (a),
(b), (c) and (f), and to the Agent for delivery to the Banks, with respect to
all other items:
(a) Quarterly Financial Statements. As soon as available and in any
------------------------------
event within forty-five (45) days after the end of each fiscal quarter of the
Borrower (excluding the fourth quarter), Financial Statements of the Borrower
and its Subsidiaries as of the end of such quarter.
(b) Annual Financial Statements. As soon as available and in any
---------------------------
event within ninety (90) days after the end of each fiscal year of the
Borrower, Financial Statements of the Borrower and its Subsidiaries for such
fiscal year.
(c) Compliance Certificate. Together with and at the time of the
----------------------
delivery of any information required by Subsection (a) and Subsection (b) of
this Section 6.01, a certificate (a "Compliance Certificate") substantially in
the form of Exhibit 6.01(c), attached hereto, signed by a Responsible Officer,
(i) stating that there exists no Event of Default or Default, or if any Event
of Default or Default exists, specifying the nature thereof, the period of
existence thereof, and what action the Borrower proposes to take with respect
thereto; (ii) setting forth the credit rating assigned to the Borrower's
senior-unsecured, long-term debt by S&P as of the date of the Compliance
Certificate, and as of the date of delivery of such Financial Statements; and
(iii) setting forth with reasonable specificity such schedules, computations
and other information as may be required to demonstrate that the Borrower is
in compliance with its covenants in Sections 7.02, 7.03, 7.04, 7.07 and 7.13
hereof.
(d) Notice of Default. Promptly after any Responsible Officer of the
-----------------
Borrower knows or has reason to know that any Default or Event of Default has
occurred, a written statement of a Responsible Officer of the Borrower setting
forth the details of such Default or Event of Default and the action which the
Borrower has taken or proposes to take with respect thereto.
(e) Notice of Litigation. Together with and at the time of the
---------------------
delivery of information required by Subsection (a) or (b), notice of any
litigation, legal, administrative, or arbitral proceeding, investigation, or
other action of any nature which involves a claim (or a series of related
claims in the aggregate) for an amount equal to or exceeding $5,000,000, or,
promptly after any Responsible Officer of the Borrower or any Subsidiary
obtaining knowledge of the commencement thereof, notice of any litigation,
legal, administrative or arbitral proceeding, investigation or other action of
any nature which involves the reasonable possibility, if adversely determined,
in the judgment of the Borrower, of a judgment in excess of $1,000,000 which
has not been stayed, or other liability, in each case which could have a
material adverse effect on the business, operations or financial condition of
the Borrower and its Subsidiaries, taken as a whole, or on the ability of the
Borrower or any Subsidiary to perform its obligations under this Agreement or
any other Loan Document to which it is a party, and upon request by the Agent
or any Bank, details regarding such litigation which are satisfactory to the
Agent or such Bank.
(f) Securities Filings. Promptly after the sending or filing thereof
------------------
and in any event within fifteen (15) days thereof, copies of all reports which
the Borrower sends to any of its security holders, and copies of all reports
(including each regular and periodic report, but without duplication of
Financial Statements provided in accordance with Sections 6.01(a) and (b)) and
each registration statement or prospectus which the Borrower or any Subsidiary
files with the Securities and Exchange Commission or any national securities
exchange.
(g) ERISA Notices. The Borrower will and will cause its ERISA
--------------
Affiliates to obtain and deliver to the Agent, as soon as possible and in any
event within 10 days from receipt, or if applicable, filing, copies of any
reports, notices or filings which the Borrower or an ERISA Affiliate files
with the Internal Revenue Service, PBGC or the United States Department of
Labor with respect to an ERISA Event or which the Borrower or an ERISA
Affiliate receives from such Governmental Authority relating to an ERISA
Event, and copies of any notice, complaint or other documentation of any
pending or threatened lawsuit or claim relating to any Plan or Multiemployer
Plan which may have a material adverse effect on the Borrower or an ERISA
Affiliate, taken as a whole.
(h) Rating Certificate. Promptly upon the Borrower's knowledge of or
------------------
notification (i) by S&P or Xxxxx'x that the credit rating assigned to
senior-unsecured, long-term debt of the Borrower by S&P or Xxxxx'x, as the
case may be, has changed from the rating set forth in the most recent
Compliance Certificate delivered in accordance with Section 6.01(c), or (ii)
by any other nationally recognized rating agency that the Borrower's senior
unsecured, long-term debt has been assigned a credit rating, or that
subsequent to such assignment, such credit rating has been changed, the
Borrower will notify the Agent in writing of the occurrence of such event, and
if a notice has been received by the Borrower from S&P, Xxxxx'x or such other
rating agency, shall provide to the Agent a copy of such notice (each such
notice provided hereunder, a "Rating Certificate").
-------------------
(i) Other Information. Such other information respecting the
------------------
condition or operations, financial or otherwise, of the Borrower or any of its
Subsidiaries as any Bank through the Agent may from time to time reasonably
request.
SECTION 6.02. Maintenance. The Borrower will, and will cause
-----------
each of its Subsidiaries to, (a) at all times do or cause to be done all
things necessary to maintain, preserve and renew its existence as a real
estate investment trust under the Act or its corporate existence, as the case
may be, and its rights and franchises, and comply with all governmental laws,
rules, regulations or rulings with respect thereto; provided, however, that
nothing contained in this Section 6.02 or any other provision of this
Agreement shall (I) require the Borrower or any of its Subsidiaries to comply
with any such governmental laws, rules, regulations or rulings, so long as the
validity or applicability thereof shall be contested in good faith by
appropriate proceedings and any such failure to comply could not reasonably be
anticipated to have a material adverse effect on the business, operations or
financial condition of the Borrower and its Subsidiaries taken as a whole on a
consolidated basis, or the ability of the Borrower or such Subsidiary to
perform its obligations under this Agreement or any other Loan Document; or
(ii) require the Borrower or any of its Subsidiaries to maintain, preserve or
renew any right or franchise not necessary or desirable in the conduct of its
business as determined in good faith by Borrower's Trust Managers or Board of
Directors, as the case may be, and (b) except for planned demolition of Real
Property or Property subject to a direct financing lease (as reflected on the
Financial Statements), for the purpose of increasing its ultimate value, at
all times maintain, preserve, protect and keep or cause to be maintained,
preserved, protected and kept its Property in good repair, working order and
condition (ordinary wear and tear excepted) and, from time to time, will make
or cause to be made all repairs, renewals, replacements, extensions,
additions, betterments and improvements to its Property as are appropriate, so
that (I) each of the Borrower and its Subsidiaries maintains its current line
of business and (ii) the business carried on in connection therewith may be
conducted properly and efficiently at all times.
SECTION 6.03. Insurance. The Borrower will, and will cause each
---------
of its Subsidiaries to, keep its Property insured against loss or damage by
fire and other hazards with extended coverage and as is otherwise usually
carried by companies of established reputation engaged in the same or similar
business which are similarly situated, and in such amounts as such insurance
is usually carried by such similar businesses. Such policy or policies shall
be satisfactory in form and substance to the Banks, with the premiums thereon
fully paid in advance, issued by and binding upon financially sound and
reputable insurance companies and associations acceptable to the Agent, with a
rating of at least A-, financial size category, Class VI as set forth in
Best's Key Rating Guide, published by A.M. Best Company, Inc., and providing
for at least fifteen (15) days written notice to the Agent of cancellation,
failure to renew or other material change in such policy or policies. If the
rating of any insurance company or association is or becomes below the
aforesaid minimum requirements, then Borrower and its Subsidiaries shall have
45 days to secure (i) an appropriate reinsurance or other endorsement which
will satisfy the aforesaid minimum standards, or (ii) secure replacement
insurance coverage satisfying the aforesaid minimum standards.
SECTION 6.04. Taxes and Other Claims. The Borrower will, and
----------------------
will cause each of its Subsidiaries to, duly pay and discharge, as the same
become due and payable, all of its taxes (including without limitation all
federal and state income taxes, ad valorem taxes, sales taxes, use taxes,
occupational taxes, franchise taxes, withholding taxes, severance taxes,
excise taxes and manufacturing taxes) and assessments, and all claims and
charges of any Governmental Authority or any other Person levied or imposed,
or which if unpaid might become a Lien or charge, upon the franchises, assets,
earnings or businesses of the Borrower or any of its Subsidiaries, as the case
may be; provided, however, that nothing contained in this Section 6.04 shall
require the Borrower or any of its Subsidiaries to pay any such tax,
assessment, charge or claim so long as the validity thereof shall be contested
in good faith by appropriate proceedings and the Borrower or any such
Subsidiary shall set aside on its books adequate reserves with respect thereto
if required by GAAP.
SECTION 6.05. Right of Inspection. From time to time upon
-------------------
reasonable notice to the Borrower, the Borrower will, and will cause each
Subsidiary to, permit any officer, or employee of, or agent designated by, the
Agent or any Bank to visit and inspect any of the Properties of the Borrower
or any Subsidiary, examine the Borrower's or such Subsidiary's corporate books
or financial records, take copies and extracts therefrom, and discuss the
affairs, finances, and accounts of the Borrower or any Subsidiary with the
Borrower's or such Subsidiary's officers or certified public accountants, all
as often as the Agent or any Bank may reasonably desire.
SECTION 6.06. Guarantees of Subsidiaries. In the event that the
--------------------------
Borrower shall at any time acquire or create a new Subsidiary all of the stock
of which is 100% owned by the Borrower, the Borrower shall immediately cause
such Subsidiary to provide to the Agent for the benefit of the Banks a
guaranty of the obligations of the Borrower under this Agreement which shall
be in the form attached hereto as Exhibit 1.01-A; provided that, it shall not
--------------
constitute a Default hereunder if such new Subsidiary does not provide such
Guaranty Agreement until the date required for delivery of the Compliance
Certificate in accordance with Section 6.01(c). It is agreed and understood
that the obligation of the Borrower under this Section6.06 to cause any such
Subsidiary to provide to the Agent for the benefit of the Banks a guaranty is
a condition precedent to the making of the Advances pursuant to this Agreement
and that the entry into this Agreement by the Banks constitutes good and
adequate consideration for the provision of such guaranty.
SECTION 6.07. Compliance with Law. The Borrower will, and will
-------------------
cause each of its Subsidiaries to, comply in all material respects with all
laws, rules, regulations and rulings of all Governmental Authority having
jurisdiction in respect of the conduct of its business and the ownership of
its Property.
SECTION 6.08. Delivery of Certain Certificates. The Borrower
--------------------------------
agrees that to the extent it was unable to provide certificates required under
Section 4.01(f) on or before the Closing Date for any Subsidiary, after using
its best efforts to obtain the same, all such certificates shall be provided
to the Agent, on behalf of the Banks, on or before the forty-fifth (45th) day
after the Closing Date.
ARTICLE VII
NEGATIVE COVENANTS
So long as any Note shall remain unpaid or any Bank shall have any
Commitment hereunder, the Borrower covenants and agrees that:
SECTION 7.01. Liens, Etc. The Borrower will not grant, permit,
----------
create or suffer to exist, and will not permit any Subsidiary to grant,
permit, create or suffer to exist, any Lien, upon or with respect to any of
its Properties, whether now owned or hereafter acquired, or assign, or permit
any of its Subsidiaries to assign, any right to receive income, in each case
to secure or provide for the payment of any Debt of any Person, other than:
(a) Permitted Liens; or
(b) Liens which do not violate the covenants contained in Section
7.02(b) hereof.
SECTION 7.02. Limitations on Incurrence of Debt. (a) The
----------------------------------
Borrower will not, and will not permit any Subsidiary to, incur any Debt if
prior to incurrence of such Debt, but after giving effect to the incurrence of
such Debt and the application of the proceeds thereof, the aggregate principal
amount of all outstanding Debt of the Borrower and its Subsidiaries is greater
than 60% of the Total Assets, determined as at the last day of the most recent
preceding calendar year or calendar quarter, as the case may be, as reflected
in the Financial Statements of the Borrower most recently provided under
Sections 6.01(a) or (b).
(b) The Borrower will not, and will not permit any Subsidiary
to, incur any Debt secured by any Lien upon any Property of the Borrower or
any Subsidiary if, prior to incurrence of such Debt, but after giving effect
to the incurrence of such Debt and the application of the proceeds thereof,
the aggregate principal amount of all outstanding Debt of the Borrower and its
Subsidiaries which is secured by a Lien on Property of the Borrower or any
Subsidiary is greater than 40% of Total Assets, determined as at the last day
of the most recent preceding calendar year or calendar quarter, as the case
may be, as reflected in Financial Statements of the Borrower most recently
provided under Sections 6.01(a) or (b).
(c) For purposes of this Section 7.02, the term (i) "Total
Assets" does not include securities issued or unconditionally guaranteed by
the United States government or an agency thereof or by the Federal National
Mortgage Association which secure a repurchase agreement with a financial
institution, entered into in the ordinary course of business by the Borrower
or any Subsidiary, and (ii) "Debt" does not include obligations under any such
repurchase agreement or indebtedness of the Borrower or any Subsidiary owed to
a financial institution, which is secured by governmental securities described
in clause (i) hereof, owned by the Borrower or such Subsidiary, entered into
in the ordinary course of business (a "reverse repurchase agreement"),
provided that in the case of transactions described in clauses (i) and (ii)
hereof, the market value of such governmental securities is at all times equal
at least to the principal amount of such repurchase agreement or reverse
repurchase agreement.
SECTION 7.03. Unimproved Real Property. The Borrower will not
------------------------
permit Unimproved Real Property to exceed 12.5% of Undepreciated Real Estate
Assets.
SECTION 7.04. Sale or Other Disposition of Real Property. The
------------------------------------------
Borrower will not, and will not permit its Subsidiaries to, sell, dispose of
or otherwise transfer (including, without limitation, a sale-leaseback) (i)
Real Property of the Borrower or any Subsidiary with an aggregate book value
in any twelve-month period, ending on the last day of the month in which such
disposition occurs (or if shorter, for the period from the Closing Date to
such day), for all such dispositions (after giving effect to such
disposition), greater than 10% of the Undepreciated Real Estate Assets as of
the last day of the preceding calendar quarter, or (ii) Real Property of the
Borrower or any Subsidiary with a cumulative aggregate book value in any
thirty-six month period, ending on the last day of the month in which such
disposition occurs (or if shorter, for the period from the Closing Date to
such day), for all such dispositions (after giving effect to such disposition)
greater than 15% of the Undepreciated Real Estate Assets as of the last day of
the preceding calendar quarter, unless, on the date on which the next
Compliance Certificate is required to be delivered in accordance with Section
6.01(c), the Borrower shall have delivered to the Agent the excess of Net
Proceeds of such disposition over such applicable percentage amounts of the
Undepreciated Real Estate Assets, respectively (herein referred to as the
"Adjusted Net Proceeds") as a prepayment on the Notes, in accordance with
Section 3.03. For purposes of this Section 7.04, neither a lease of property
(nor the existence of a financing lease) nor creation of a Lien on such
property in the ordinary course of business, shall be deemed to be a
disposition of such property.
SECTION 7.05. Mergers; Consolidations. Except as permitted
-----------------------
under Section 7.06(f), the Borrower will not, and will not permit any
Subsidiary to, merge or consolidate with or into any other Person, or convey,
transfer or otherwise dispose of (whether in one transaction or in a series of
transactions) all or substantially all of its assets (whether now owned or
hereafter acquired); provided that (a) subject to the limitations of Section
--------
7.06(f), the Borrower may merge or consolidate with or into, or acquire all or
substantially all of the assets or capital stock of any other Person, so long
as the Borrower is the survivor thereof, and (b) any Subsidiary may merge or
consolidate with or into, or acquire all or substantially all of the assets or
capital stock of, (i) any other Subsidiary, so long as, if either such
Subsidiary is a Guarantor, a Guarantor is the survivor thereof, and (ii)
subject to the limitations of Section 7.06(f), any other Person (other than
the Borrower), so long as a Subsidiary is the survivor thereof, and (c) any
Subsidiary may merge into or transfer all or substantially all of its assets
to the Borrower, so long as the Borrower is the survivor thereof, if prior to
and after giving effect thereto, in the case of clauses (a), (b) and (c) no
Default or Event of Default has occurred or would exist (expressly including,
without limitation, under Section 7.06(f)).
SECTION 7.06. Investments, Loans, and Advances. Without the
--------------------------------
consent of the Banks, the Borrower will not, and will not permit any
Subsidiary to, make or permit to remain outstanding any Investment, endorse,
or otherwise be or become contingently liable, directly or indirectly, in
connection with the stock or other securities of, or purchase, or acquire any
stock or securities of, or any other interest in, any Person, except that:
(a) the Borrower or any Subsidiary may permit to remain outstanding
Investments existing on the date hereof;
(b) the Borrower or any Subsidiary may acquire and own capital stock,
obligations, or securities received in settlement of debts (created in the
ordinary course of business) owing to the Borrower or any Subsidiary;
(c) the Borrower or any Subsidiary may own, purchase, or acquire Cash
Equivalents;
(d) the Borrower and any Subsidiary may make intercompany loans and
advances which are permitted under Section 7.08 hereof, and (subject to
Section 6.06) may form Subsidiaries, the capital stock of which is 100% owned
by the Borrower or a Guarantor;
(e) the transactions permitted under Subsection (a), (b) and (c) of
Section 7.05 are permissible;
(f) the Borrower or any Subsidiary may (I) acquire the capital stock
of a Person without the consent of the Banks, so long as (A) the aggregate
purchase price, or cost, of such stock received in exchange for Capital Shares
or any asset of the Borrower or a Subsidiary (measured by the value of such
Capital Shares or asset of the Borrower or such Subsidiary given in exchange
therefor) does not exceed, in the aggregate for any successive twelve (12)
month period for all such transactions (or series of related transactions) an
amount equal to one-third (33 1/3%) of Total Assets, determined as of the last
day of the preceding calendar quarter, or (B) if all or a part of such
purchase price is paid in cash, the cash portion of the purchase price does
not exceed, in the aggregate for any successive twelve (12) month period for
all such transactions (or series of related transactions) an amount equal to
ten percent (10%) of the Total Assets, determined as of the last day of the
preceding calendar quarter, and (ii) acquire other Investments, (in addition
to Investments permitted under subsections (a) through (e), or (f)(i), or (g),
of this Section 7.06) so long as the aggregate purchase price, or cost, of
such acquisition (measured by the value of such Capital Shares or any assets
or promissory note of the Borrower or such Subsidiary, if any, given in
exchange therefor, plus the cash portion thereof) does not exceed in the
aggregate for any successive twelve (12) month period for all such
transactions (or series of related transactions) an amount equal to ten
percent (10%) of Total Assets, determined as of the last day of the preceding
calendar quarter, and in the case of each of clause (i) or (ii), (w) such
action does not result in the income of the Borrower being primarily
attributable to loans secured by mortgages on Real Property, (x) if the
acquisition results in ownership by the Borrower or any Subsidiary (whether
beneficial or of record) of a majority of the voting stock of such Person or
results in a merger or consolidation with the Borrower or such Subsidiary,
then the board of directors of such Person shall have approved such
transaction and such transaction shall not constitute a "hostile" acquisition
with respect to such Person, (y) (except for Investments described under
clause (ii) hereof) the business of such Person is substantially similar to
the business conducted by the Borrower or such Subsidiary, or is primarily to
hold Real Property, and such purchase or acquisition is made in the ordinary
course of business, and (z) in any event, prior to and after giving effect to
such purchase or acquisition, no Default or Event of Default has occurred or
would exist; and
(g) the Borrower and any Subsidiary may purchase or acquire directly
or indirectly, through partnerships, joint ventures or otherwise, title to
Real Property (expressly including, for purposes of this Section 7.06, without
limitation, "direct financing leases," reflected as such on the Financial
Statements).
SECTION 7.07. Coverage Ratio. The Borrower will not permit the
--------------
ratio of (i) Funds From Operations, to (ii) the Annual Service Charge,
determined as of the last day of each fiscal quarter for the four (4)
successive quarterly accounting periods ending on such date (the "Coverage
Ratio") to be less than 2.5 to 1.0.
SECTION 7.08. Transactions with Affiliates. The Borrower will
----------------------------
not, and will not permit any Subsidiary to, directly or indirectly, enter into
any transaction, or modify any existing transaction, with any Affiliate
(including, without limitation, any transaction involving the payment of
management fees or directors' fees to any Affiliate), except for transactions
(including any loans or advances by or to any Affiliate otherwise in
compliance under this Agreement) in good faith, the terms of which are fair
and reasonable to the Borrower or such Subsidiary, and are at least as
favorable as the terms which could be obtained by the Borrower or such
Subsidiary in a comparable transaction made on an arm's-length basis between
unaffiliated parties.
SECTION 7.09. Change of Business. The Borrower will not, and
------------------
will not permit any Subsidiary to, make any material change in the nature of
the business conducted by the Borrower and its Subsidiaries taken as a whole
and will at all times qualify for taxation as a Real Estate Investment Trust
under the Code.
SECTION 7.10. Intentionally Omitted
SECTION 7.11. Amendment of Organizational Documents. The
--------------------------------------
Borrower will not, and will not permit any of its Subsidiaries to, without the
prior written consent of the Banks, amend, alter or modify its Organizational
Documents or articles of incorporation or other charter or bylaws, as the case
may be, in such a manner as to (a) change its purpose or (b) restrict its
powers in any manner.
SECTION 7.12. Guarantees. "Guaranty" shall mean all obligations
----------
not otherwise reflected on the balance sheet of the Borrower or any Subsidiary
whereby the Borrower or such Subsidiary guarantees the performance of any
joint venture or partnership or the payment or performance of any
indebtedness, dividend or other obligation of any other Person (for purposes
of this Section 7.12, the "Primary Obligor") in any manner, whether directly
or indirectly, including obligations incurred through an agreement or
covenant, contingent or otherwise:
(i) to purchase such indebtedness or obligation or any Property or
assets constituting security therefor;
(ii) to advance or supply funds
(A) for the purchase or payment of such indebtedness or obligation,
or
(B) to maintain working capital or other balance sheet condition or
otherwise to advance or make available funds for the purchase or payment of
such indebtedness or obligation;
(iii) to lease Property or to purchase securities or other Property
or services primarily for the purpose of assuring the owner of such
indebtedness or obligation of the ability of the Primary Obligor to make
payment of the indebtedness or obligation; or
(iv) to assure the owner of the indebtedness or obligation of the
Primary Obligor against loss in respect thereof.
Notwithstanding the above, and in any event, except for (i) Guaranties by the
Borrower of indebtedness or obligations of any Subsidiary, or (ii) Guaranties
of any Subsidiary of indebtedness or obligations of the Borrower, or (iii) the
Guaranty by the Borrower of the obligations of the Xxxxx Partnership In
Commendam in respect of the Series 1995 Lafayette Bonds and the Special Letter
of Credit issued in connection therewith, neither the Borrower nor any
Subsidiary shall enter into any Guaranty (other than checks deposited and/or
endorsed in the ordinary course of business of the Borrower or any Subsidiary)
unless (A) liability incurred by the Borrower or such Subsidiary under such
Guaranty is secured and is for a Primary Obligor's indebtedness or other
obligation, and (B) upon payment by the Borrower or such Subsidiary on account
of (or in connection with) its obligations under the Guaranty or, after
compliance with applicable foreclosure proceedings specified by law or
otherwise agreed upon, the Borrower or such Subsidiary will become subrogated
to the right, title and interests of the beneficiary of the Guaranty or of the
Primary Obligor, to all Property securing such liability. By way of
illustration, but not limitation: (x) in the case of a Guaranty of the
obligations of a venturer or partner, the Guaranty shall be deemed secured if
the Borrower or such Subsidiary is entitled (after compliance with applicable
foreclosure proceedings specified by law or otherwise agreed upon) to such
defaulting party's venture or partnership interest in case of a default of
such venturer or partner; (y) in the case of the Guaranty of a lease, the
Guaranty shall be deemed secured if the Borrower or such Subsidiary is
entitled (after compliance with applicable foreclosure proceedings specified
by law or otherwise agreed upon) to the leasehold estate in case of default by
the tenant under such lease; and (z) in the case of the Guaranty of a secured
promissory note, a Guaranty shall be deemed secured if the Borrower or such
Subsidiary is entitled to purchase the note and the lien securing same, and to
become subrogated to the rights of the previous payee on the Note in the case
of default of the maker on such default.
SECTION 7.13. Assets Retained. The Borrower will not permit the
---------------
portion of Undepreciated Real Estate Assets which is subject to no Lien (other
than a Permitted Lien) to be less than 150% of the aggregate principal amount
outstanding at any time of Debt which is not secured by a Lien on Property of
the Borrower or any Subsidiary.
ARTICLE VIII
EVENTS OF DEFAULT
SECTION 8.01. Events of Default. If any of the following events
-----------------
("Events of Default") shall occur:
-------------------
(a) The Borrower shall fail to pay principal of or interest on any
Note or fees or other amounts due under any Note or this Agreement or, in
connection with its reimbursement obligations under any Letter of Credit or
any other Loan Document, when the same becomes due and payable; or
(b) Any representation or warranty made by the Borrower (or any of
its Responsible Officers) under or in connection with any Loan Document shall
prove to have been incorrect in any material respect when made or deemed made;
or
(c) The Borrower shall fail to perform or observe any term, covenant
or agreement contained in Sections 6.01(d), 6.06 or in Article VII; or
(d) The Borrower shall fail to perform or observe any term, covenant
or agreement contained in any Loan Document (other than those set forth in
(a), (b) and (c) above) on its part to be performed or observed if such
failure shall remain unremedied for thirty (30) days after the occurrence of
such event; or
(e) The Borrower shall fail to pay any principal of or premium or
interest on any Debt (other than Non-Recourse Debt) which is outstanding in a
principal amount greater than $10,000,000 in the aggregate when the same
becomes due and payable (whether by scheduled maturity, required prepayment,
acceleration, demand or otherwise); or any other event constituting a default
(however defined) shall occur or condition shall exist under any agreement or
instrument relating to any such Debt outstanding in a principal amount greater
than $10,000,000 (other than Non-Recourse Debt) and shall continue after the
applicable grace period, if any, specified in such agreement or instrument; or
(f) The Borrower or any of its Subsidiaries shall generally not pay
its debts as such debts become due, or shall admit in writing its inability to
pay its debts generally, or shall make a general assignment for the benefit of
creditors; or any proceeding shall be instituted by or against the Borrower or
any of its Subsidiaries seeking to adjudicate it a bankrupt or insolvent, or
seeking liquidation, winding up, reorganization, arrangement, adjustment,
protection, relief, or composition of it or its debts under any Debtor Laws,
or seeking the entry of an order for relief or the appointment of a receiver,
trustee, custodian or other similar official for it or for any substantial
part of its Property and, in the case of any such proceeding instituted
against it (but not instituted by it), either such proceeding shall remain
undismissed or unstayed for a period of 30 days, or any of the actions sought
in such proceeding (including, without limitation, the entry of an order for
relief against, or the appointment of a receiver, trustee, custodian or other
similar official for, it or for any substantial part of its Property) shall
occur; or the Borrower or any of its Subsidiaries shall take any corporate
action to authorize any of the actions set forth above in this subsection (f);
or
(g) Any final judgment or order for the payment of money which,
individually or in the aggregate, shall be in excess of $1,000,000 at any
time, shall be rendered against the Borrower or any of its Subsidiaries and
remains unpaid for a period of 15 days, and a stay of execution thereof
(whether by supersedeas bond or otherwise) shall not be in effect after entry
thereof; or
(h) With respect to any Plan, Multiemployer Plan or any other
employee benefit plan within the meaning of Section 3(3) of ERISA, the
Borrower or any ERISA Affiliate has incurred and fails to pay (or fund, as
applicable) within the maximum time period permitted by law, a liability in
excess of $10,000,000; or
(i) An Event of Default (however defined) in that certain Master Swap
Agreement between the Borrower and TCB dated as of January 29, 1992, as
amended, or in any interest rate swap agreement issued thereunder, or any
other interest rate protection agreement to which the Borrower or any
Subsidiary is a party (the "Interest Rate Agreements"), shall have occurred at
any time during which the Agent or any Bank is a counterparty thereunder; or
(j) The Borrower shall be or become, in the reasonable judgment of
the Agent or any Bank, a liquidating trust under the Internal Revenue Code of
1986, as amended;
then, and in any such event, the Agent (i) shall at the request, or may with
the consent, of the Majority Banks, by notice to the Borrower, declare the
Commitment (including the Revolving Credit Commitment, the Letter of Credit
Commitment and the Term Commitment) of each Bank to be terminated, whereupon
the same shall forthwith terminate, and (ii) shall at the request, or may with
the consent, of the Majority Banks by notice to the Borrower, declare the
Notes, all interest thereon and all other amounts payable under this Agreement
to be forthwith due and payable, whereupon the Notes, all such interest and
all such amounts shall become and be forthwith due and payable, without
presentment, demand, protest or further notice of any kind, all of which are
hereby expressly waived by the Borrower; provided however, that upon such
--------
event the Borrower shall deliver to the Agent, for deposit into an interest
bearing collateral account, readily available funds in an amount equal to the
aggregate undrawn face amount of all Letters of Credit issued and outstanding
at such time, as security for the obligations of the Borrower under such
Letters of Credit; provided further that funds on deposit in such collateral
account shall be returned to the Borrower periodically in an amount equal to
amounts drawn under a Letter of Credit and reimbursed to the Banks by the
Borrower from time to time, or upon expiration or termination otherwise of a
Letter of Credit, without a draw outstanding, in the face amount of such
Letter of Credit; provided further, that in the event of an entry of an order
for relief with respect to the Borrower or any of its Subsidiaries under the
United States Bankruptcy Code, (A) the obligation of each Bank to make
Advances shall automatically be terminated and (B) the Notes, all such
interest and all such amounts shall automatically become and be due and
payable, without presentment, demand, protest or any notice of any kind, all
of which are hereby expressly waived by the Borrower.
ARTICLE IX
THE AGENT
SECTION 9.01. Authorization and Action. Each Bank hereby
-------------------------
appoints and authorizes the Agent to take such action as agent on its behalf
and to exercise such powers under this Agreement as are delegated to the Agent
by the terms hereof, together with such powers as are reasonably incidental
thereto. As to any matters not expressly provided for by this Agreement
(including, without limitation, enforcement or collection of the Notes), the
Agent shall not be required to exercise any discretion or take any action, but
shall be required to act or to refrain from acting (and shall be fully
protected in so acting or refraining from acting) upon the instructions of the
Majority Banks, and such instructions shall be binding upon all Banks and all
holders of Notes; provided however, that the Agent shall not be required to
--------
take any action which exposes the Agent to personal liability or which is
contrary to this Agreement or applicable law. The Agent agrees to give to
each Bank prompt notice of each notice given to it by the Borrower pursuant to
the terms of this Agreement.
SECTION 9.02. Agent's Reliance, Etc. Neither the Agent nor any
----------------------
of its directors, officers, agents or employees shall be liable for any action
taken or omitted to be taken by it or them under or in connection with this
Agreement, except for its or their own gross negligence or willful misconduct.
Without limitation of the generality of the foregoing, the Agent: (i) may,
subject to the provisions of Section 10.08 hereof, treat the payee of any Note
as the holder thereof until the Agent receives written notice of the
assignment or transfer thereof signed by such payee and including the
agreement of the assignee or transferee to be bound hereby as it would have
been if it had been an original Bank party hereto, in form satisfactory to the
Agent; (ii)may consult with legal counsel (including counsel for the
Borrower), independent public accountants and other experts selected by it and
shall not be liable for any action taken or omitted to be taken in good faith
by it in accordance with the advice of such counsel, accountants or experts;
(iii) makes no warranty or representation to any Bank and shall not be
responsible to any Bank for any statements, warranties or representations
(whether written or oral) made in or in connection with this Agreement; (iv)
shall not have any duty to ascertain or to inquire as to the performance or
observance of any of the terms, covenants or conditions of this Agreement on
the part of the Borrower or to inspect the property (including the books and
records) of the Borrower; (v) shall not be responsible to any Bank for the due
execution, legality, validity, enforceability, genuineness, sufficiency or
value of this Agreement or any other instrument or document furnished pursuant
hereto; and (vi) shall incur no liability under or in respect of this
Agreement by acting upon any notice, consent, certificate or other instrument
or writing (which may be by telecopier, telegram, cable or telex) believed by
it to be genuine and signed or sent by the proper party or parties.
SECTION 9.03. TCB and Affiliates. With respect to its
--------------------
Commitment, the Advances made by it and the Note issued to it, TCB shall have
the same rights and powers under this Agreement as any other Bank and may
exercise the same as though it were not the Agent; and the term "Bank" or
"Banks" shall, unless otherwise expressly indicated, include TCB in its
individual capacity. TCB and its Affiliates may accept deposits from, lend
money to, act as trustee under indentures of, and generally engage in any kind
of business with, the Borrower, any of its Subsidiaries and any Person who may
do business with or own securities of the Borrower or any such Subsidiary, all
as if TCB were not the Agent and without any duty to account therefor to the
Banks.
SECTION 9.04. Bank Credit Decision. Each Bank acknowledges that
--------------------
it has, independently and without reliance upon the Agent or any other Bank
and based on the financial statements referred to in Sections 5.02 and 6.01
and such other documents and information as it has deemed appropriate, made
its own credit analysis and decision to enter into this Agreement. Each Bank
also acknowledges that it will, independently and without reliance upon the
Agent or any other Bank and based on such documents and information as it
shall deem appropriate at the time, continue to make its own credit decisions
in taking or not taking action under each Loan Document. The Agent shall not
be required to keep itself informed as to the performance or observance by the
Borrower of any Loan Document or to inspect the Properties or books of the
Borrower or any Subsidiary. Except for notices, reports, and other documents
and information expressly required to be furnished to the Banks by the Agent
hereunder, the Agent shall not have any duty or responsibility to provide any
Bank with any credit or other information concerning the affairs, financial
condition, or business of the Borrower or any Subsidiary (or any of their
Affiliates) which may come into the possession of the Agent or any of its
Affiliates.
SECTION 9.05. Indemnification. Notwithstanding anything to the
---------------
contrary herein contained, the Agent shall be fully justified in failing or
refusing to take any action hereunder unless it shall first be indemnified to
its satisfaction by the Banks against any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses, and
disbursements of any kind or nature whatsoever which may be imposed on,
incurred by or asserted against the Agent in any way relating to or arising
out of its taking or continuing to take any action. EACH BANK AGREES TO
INDEMNIFY THE AGENT (TO THE EXTENT NOT REIMBURSED BY THE BORROWER), ACCORDING
TO SUCH BANK'S PRO RATA PERCENTAGE, FROM AND AGAINST ANY AND ALL LIABILITIES,
OBLIGATIONS, LOSSES, DAMAGES, PENALTIES, ACTIONS, JUDGMENTS, SUITS, COSTS,
EXPENSES, AND DISBURSEMENTS OF ANY KIND OR NATURE WHATSOEVER WHICH MAY BE
IMPOSED ON, INCURRED BY, OR ASSERTED AGAINST THE AGENT IN ANY WAY RELATING TO
OR ARISING OUT OF ANY LOAN DOCUMENT OR ANY ACTION TAKEN OR OMITTED BY THE
AGENT UNDER ANY LOAN DOCUMENT IN ITS CAPACITY AS AGENT, PROVIDED THAT NO BANK
SHALL BE LIABLE FOR ANY PORTION OF SUCH LIABILITIES, OBLIGATIONS, LOSSES,
DAMAGES, PENALTIES, ACTIONS, JUDGMENTS, SUITS, COSTS, EXPENSES, OR
DISBURSEMENTS RESULTING FROM THE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF THE
PERSON BEING INDEMNIFIED; AND PROVIDED FURTHER, THAT IT IS THE INTENTION OF
EACH BANK TO INDEMNIFY THE AGENT AGAINST THE CONSEQUENCES OF THE AGENT'S OWN
NEGLIGENCE WHEN ACTING IN ITS CAPACITY AS AGENT, WHETHER SUCH NEGLIGENCE BE
SOLE, JOINT, OR CONCURRENT, ACTIVE OR PASSIVE. WITHOUT LIMITATION OF THE
FOREGOING, EACH BANK AGREES TO REIMBURSE THE AGENT PROMPTLY UPON DEMAND FOR
ITS PRO RATA PERCENTAGE OF ANY OUT-OF-POCKET EXPENSES (INCLUDING REASONABLE
ATTORNEYS' FEES) INCURRED BY THE AGENT IN ITS CAPACITY AS AGENT IN CONNECTION
WITH THE PREPARATION, ADMINISTRATION, OR ENFORCEMENT OF, OR LEGAL ADVICE IN
RESPECT OF RIGHTS OR RESPONSIBILITIES UNDER, ANY LOAN DOCUMENT, TO THE EXTENT
THAT THE AGENT IS NOT REIMBURSED FOR SUCH EXPENSES BY THE BORROWER.
SECTION 9.06. Successor Agent. The Agent may resign at any time
---------------
by giving written notice thereof to the Banks and the Borrower and may be
removed at any time with cause by the Majority Banks. Upon any such
resignation or removal, the Majority Banks shall have the right to appoint a
successor Agent. If no successor Agent shall have been so appointed by the
Majority Banks, and shall have accepted such appointment, within thirty (30)
days after the retiring Agent's giving of notice of resignation or the
Majority Banks' removal of the retiring Agent, then the retiring Agent may, on
behalf of the Banks, appoint a successor Agent, which shall be a commercial
bank organized under the laws of the United States of America or of any State
thereof and having capital of at least $100,000,000. Upon the acceptance of
any appointment as Agent hereunder by a successor Agent, such successor Agent
shall thereupon succeed to and become vested with all the rights, powers,
privileges and duties of the retiring Agent, and the retiring Agent shall be
discharged from its duties and obligations under this Agreement. After any
retiring Agent's resignation or removal hereunder as Agent, the provisions of
this Article IX shall inure to its benefit as to any actions taken or omitted
to be taken by it while it was Agent under this Agreement.
SECTION 9.07. Agent's Reliance. The Borrower shall notify the
----------------
Agent in writing of the names of its officers and employees authorized to
request an Advance on behalf of the Borrower and shall provide the Agent with
a specimen signature of each such officer or employee. The Agent shall be
entitled to rely conclusively on such officer's or employee's authority to
request an Advance on behalf of the Borrower until the Agent receives written
notice from the Borrower to the contrary. The Agent shall have no duty to
verify the authenticity of the signature appearing on any Notice of Borrowing,
and, with respect to any oral request for an Advance, the Agent shall have no
duty to verify the identity of any Person representing himself as one of the
officers or employees authorized to make such request on behalf of the
Borrower. Neither the Agent nor any Bank shall incur any liability to the
Borrower in acting upon any telephonic notice referred to above which the
Agent or such Bank believes in good faith to have been given by a duly
authorized officer or other Person authorized to borrow on behalf of the
Borrower or for otherwise acting in good faith.
SECTION 9.08. Defaults. The Agent shall not be deemed to have
--------
knowledge of the occurrence of a Default (other than the nonpayment of
principal of or interest hereunder or of any fees payable hereunder) unless
the Agent has received notice from a Bank or the Borrower specifying such
Default. In the event that the Agent receives such a notice of the occurrence
of a Default, the Agent shall give prompt notice thereof to the Banks and to
the Borrower (and shall give each Bank prompt notice of each such nonpayment);
provided that, failure of the Agent to give notice to the Borrower hereunder
shall in no event diminish the obligations of the Borrower hereunder. The
Agent shall (subject to Section 8.01 and 9.01) take such action as may be
expressly required hereunder with respect to such Default; provided that,
unless and until the Agent shall have received the directions referred to in
Section 8.01, the Agent may (but shall not be obligated to) take such action,
or refrain from taking such action, with respect to such Default as it shall
deem advisable and in the best interest of the Banks.
ARTICLE X
MISCELLANEOUS
SECTION 10.01. Amendments, Etc. No amendment or waiver of any
---------------
provision of this Agreement or the Notes or any Letter of Credit, nor consent
to any departure by the Borrower therefrom, shall in any event be effective
unless the same shall be in writing and signed by the Borrower and the
Majority Banks, and then such waiver or consent shall be effective only in the
specific instance and for the specific purpose for which given; provided
--------
however, that no amendment, waiver or consent shall, unless in writing and
signed by all the Banks, do any of the following: (a) waive any of the
conditions specified in Section 4.02, (b) increase the Commitments of the
Banks or subject the Banks to any additional obligations, (c) reduce the
principal of, or interest on, the Notes or any fees or other amounts payable
hereunder or the terms of any Letter of Credit, (d) postpone any date fixed
for any payment of principal of, or interest on, the Notes or any fees or
other amounts payable hereunder, (e) change the definition of "Pro Rata
Percentage," the percentage of the Commitments or the aggregate unpaid
principal amount of the Notes, or the number or percentage of Banks, which
shall be required for the Banks or any of them to take any action hereunder,
(f) amend this Section 10.01, (g) alter any Guaranty Agreement or Section
6.06 hereof, or (h) amend Article VII hereof, and provided, further, that no
--------
amendment, waiver or consent shall, unless in writing and signed by the Agent
in addition to the Banks required above to take such action, affect the rights
or duties of the Agent under this Agreement or any Note.
SECTION 10.02. Notices, Etc. All notices and other
-------------
communications provided for hereunder shall be in writing (including by telex
or telefacsimile transmission) and shall be effective when actually delivered,
or in the case of telex notice, when sent, and answerback is received, or in
the case of telefacsimile transmission, when received and telephonically
confirmed, addressed as follows: if to the Borrower, at its address at 0000
Xxxxxxx Xxxxx Xxxxx, Xxxxxxx, Xxxxx 00000, Attention: Chief Executive Officer,
with a copy to Dow, Xxxxxxx & Xxxxxxxx, P.C., 0 Xxxxxxxx Xxxxx, Xxxxx 0000,
Xxxxxxx, Xxxxx 00000, Attention: Xx. Xxxxxx Xxx; if to any Bank, at its
address specified opposite its name on the signature page hereof; and if to
the Agent, at its address at 000 Xxxx Xxxxxx, Xxxxxxx, Xxxxx 00000, Attention:
Ms. Xxxxxxxxx Xxxxxx; with a copy to 0000 Xxxxxx, Xxxxxxx, Xxxxx 00000,
Attention: Manager, Loan Syndication Services; or, as to the Borrower, any
Bank or the Agent, at such other address as shall be designated by such party
in a written notice to the other parties.
SECTION 10.03. No Waiver; Remedies. No failure on the part of
-------------------
any Bank or the Agent to exercise, and no delay in exercising, any right under
any Loan Document shall operate as a waiver thereof; nor shall any single or
partial exercise of any such right preclude any other or further exercise
thereof or the exercise of any other right. The remedies herein provided are
cumulative and not exclusive of any remedies provided by law.
SECTION 10.04. Costs, Expenses and Taxes. The Borrower agrees
-------------------------
to pay on demand all costs and expenses in connection with the preparation,
execution, delivery, modification, waiver, and amendment of the Loan Documents
and the other documents to be delivered under the Loan Documents, including,
without limitation, the reasonable fees and out-of-pocket expenses of counsel
for the Agent and each Bank with respect thereto and with respect to advising
the Agent and each Bank as to its rights and responsibilities under the Loan
Documents; provided that, fees of counsel for the Agent and the Banks for work
performed in connection with the preparation, execution and delivery of this
Agreement and the other Loan Documents on the Closing Date and all other work
described in this sentence performed on or prior to the Closing Date (together
with routine post-closing matters, such as preparation and delivery of closing
packages), shall not exceed $_______________, plus expenses of such counsel
incurred in connection therewith. In the event of the occurrence of a
Default, the Borrower further agrees to pay on demand all costs and expenses,
if any (including, without limitation, reasonable counsel fees and expenses),
in connection with the enforcement (whether through negotiations, legal
proceedings or otherwise) of the Loan Documents and the other documents to be
delivered under the Loan Documents, including, without limitation, reasonable
counsel fees and expenses in connection with the enforcement of rights under
this Section 10.04.
SECTION 10.05. Right of Set-off. Upon (i) the occurrence and
----------------
during the continuance of any Event of Default and (ii) the making of the
request or the granting of the consent specified by Section 8.01 to authorize
the Agent to declare the Notes due and payable pursuant to the provisions of
Section 8.01, each Bank is hereby authorized at any time and from time to
time, to the fullest extent permitted by law, to set off and apply any and all
deposits (general or special, time or demand, provisional or final) at any
time held and other indebtedness at any time owing by such Bank to or for the
credit or the account of the Borrower against any and all of the obligations
of the Borrower now or hereafter existing under any Loan Document, whether or
not such Bank shall have made any demand under this Agreement or such Note and
although such obligations may be unmatured. Each Bank agrees promptly to
notify the Borrower after any such set-off and application made by such Bank,
provided that the failure to give such notice shall not affect the validity of
--------
such set-off and application. The rights of each Bank under this Section are
in addition to other rights and remedies (including, without limitation, other
rights of set-off) which such Bank may have.
SECTION 10.06. Sharing of Payments, Etc. If any Bank shall
------------------------
obtain any payment (whether voluntary, involuntary, through the exercise of
any right of set-off, or otherwise) on account of any Advance made by it
(other than pursuant to Sections 2.07, 2.10, 3.04 or 3.05) in excess of its
Pro Rata Percentage of payments on account of the Advances, such Bank shall
forthwith purchase from the other Banks such participations in the Advances
made by them as shall be necessary to cause such purchasing Bank to share the
excess payment ratably with each of them, provided however, that if all or any
--------
portion of such excess payment is thereafter recovered from such purchasing
Bank, such purchase from each Bank shall be rescinded and such Bank shall
repay to the purchasing Bank the purchase price to the extent of such recovery
together with an amount equal to such Bank's ratable share (according to the
proportion of (i) the amount of such Bank's required repayment to (ii) the
total amount so recovered from the purchasing Bank) of any interest or other
amount paid or payable by the purchasing Bank in respect of the total amount
so recovered.
SECTION 10.07. Binding Effect. This Agreement shall become
--------------
effective when it shall have been executed by the Borrower, the Agent and the
Banks (and a counterpart original has been delivered to the Agent, for itself
and each Bank, and to the Borrower) when the Agent shall have been notified by
each Bank that such Bank has executed it and thereafter shall be binding upon
and inure to the benefit of the Borrower, the Agent and each Bank and their
respective successors and assigns, except that the Borrower shall not have the
right to assign its rights hereunder or any interest herein without the prior
written consent of the Banks.
SECTION 10.08. Assignments and Participations. (a) Each Bank
------------------------------
may assign all or a portion of its rights and obligations under this Agreement
(including, without limitation, all or a portion of its Commitments and the
Note held by it and any interest held by it in a Letter of Credit) to any
financial institution (the "Assignee"); provided however, (i) prior to the
-------- --------
occurrence of an Event of Default, TCB shall not assign its rights and
obligations hereunder without the consent of the Borrower, which will not be
unreasonably withheld, if, after giving effect to such assignment, the
Commitment of TCB would be reduced to less than $45,000,000, (ii) each
assignment made hereunder shall equal or exceed the lesser of (A) $10,000,000
or (B) the remaining Commitment held by the Assigning Bank, and (iii) the
parties to each such assignment shall execute and deliver to the Agent, for
its acceptance and recording in the Register (with a copy to the Borrower), an
Assignment and Acceptance Agreement in the form of Exhibit 10.08, attached
hereto (the "Assignment and Acceptance"), together with any Note subject to
--------------------------
such assignment. Upon such execution, delivery, acceptance, and recordation
by the Agent of such Assignment and Acceptance, from and after the effective
date specified in each Assignment and Acceptance, which effective date shall
be the date on which such Assignment and Acceptance is accepted by the Agent,
(A) 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 and Acceptance, have the rights and obligations of a Bank under the
Loan Documents, and (B) the Bank assignor thereunder shall, to the extent that
rights and obligations hereunder have been assigned by it pursuant to such
Assignment and Acceptance, relinquish its rights and be released from its
obligations under the Loan Documents (and, in the case of an Assignment and
Acceptance covering all or the remaining portion of an assigning Bank's rights
and obligations under the Loan Documents, such Bank shall cease to be a party
thereto).
(b) By executing and delivering an Assignment and Acceptance,
the Bank assignor thereunder and the Assignee confirm to and agree with each
other and the other parties hereto as follows: (i) other than as provided in
such Assignment and Acceptance, such assigning Bank makes no representation or
warranty and assumes no responsibility with respect to any statements,
warranties, or representations made in or in connection with any Loan Document
or the execution, legality, validity, enforceability, genuineness,
sufficiency, or value of any Loan Document or any other instrument or document
furnished pursuant thereto; (ii) such assigning Bank makes no representation
or warranty and assumes no responsibility with respect to the financial
condition of the Borrower or any other Subsidiary or the performance or
observance by the Borrower or any other Subsidiary of any of its respective
obligations under any Loan Document or any other instrument or document
furnished pursuant thereto; (iii) such Assignee confirms that it has received
a copy of the Loan Documents, together with copies of the Financial Statements
referred to in Section 5.02 and Section 6.01 and such other documents and
------------- ------------
information as it has deemed appropriate to make its own credit analysis and
decision to enter into such Assignment and Acceptance; (iv) such Assignee,
independently and without reliance upon the Agent, such assigning Bank, or any
Bank and based on such documents and information as it shall deem appropriate
at the time, will continue to make its own credit decisions in taking or not
taking action under this Agreement; (v) such Assignee appoints and authorizes
the Agent to take such action as agent on its behalf and to exercise such
powers under any Loan Document as are delegated to the Agent by the terms
thereof, together with such powers as are reasonably incidental thereto; and
(vi) such Assignee agrees that it will perform in accordance with their terms
all of the obligations which by the terms of any Loan Document are required to
be performed by it as a Bank.
(c) The Agent shall maintain at its address referred to in
Section 10.02 a copy of each Assignment and Acceptance delivered to and
---------
accepted by it and a register for the recordation of the names and addresses
-
of the Banks and the Commitment of, and principal amount of the Borrowings
owing to, each Bank from time to time (the "Register"). The entries in the
--------
Register shall be conclusive and binding for all purposes, absent manifest
error, and the Borrower, the Agent, and the Banks may treat each Person whose
name is recorded in the Register as a Bank hereunder for all purposes of the
Loan Documents. The Register shall be available for inspection by the
Borrower or any Bank at any reasonable time and from time to time upon
reasonable prior notice.
(d) Upon its receipt of an Assignment and Acceptance executed by
an assigning Bank, together with any Note subject to such assignment, the
Agent, if such Assignment and Acceptance has been completed and otherwise
complies with Section 10.08(a), shall (I) accept such Assignment and
Acceptance; (ii) record the information contained therein in the Register; and
(iii) give prompt notice thereof to the Borrower. Simultaneously upon its
receipt of such notice, the Borrower at its own expense, shall execute and
deliver to the Agent in exchange for each surrendered Note a new Note to the
order of such Assignee in an amount equal to the Commitment assumed by it
pursuant to such Assignment and Acceptance and, if the assigning Bank has
retained Commitments hereunder, new Notes to the order of the assigning Bank
in an amount equal to the Commitments retained by it hereunder. The new Notes
shall be in an aggregate principal amount equal to the aggregate principal
amount of the surrendered Notes, shall be dated the effective date of such
Assignment and Acceptance and shall otherwise be in substantially the form of
Exhibit 2.02(c). Upon receipt by the Agent of each such new Note conforming
----------------
to the requirements set forth in the preceding sentences, the Agent shall
return to the Borrower each such surrendered Note marked to show that each
such surrendered Note has been replaced, renewed, and extended by such new
Note.
(e) Each Bank may sell participations to one or more financial
institutions in or to all or a portion of its rights and obligations under
this Agreement (including, without limitation, all or a portion of its
Commitments and the Notes held by it), and no such sale of a participation
shall reduce such Bank's obligations to the Borrower hereunder.
SECTION 10.09. Limitation on Agreements. (a) All agreements
------------------------
between the Borrower, the Agent, or any Bank, whether now existing or
hereafter arising and whether written or oral, are hereby expressly limited so
that in no contingency or event whatsoever, whether by reason of demand being
made in respect of an amount due under any Loan Document or otherwise, shall
the amount paid, or agreed to be paid, to the Agent or any Bank for the use,
forbearance, or detention of the money to be loaned under this Agreement, the
Notes or any other Loan Document or otherwise or for the payment or
performance of any covenant or obligation contained herein or in any other
Loan Document exceed the Highest Lawful Rate. If, as a result of any
circumstance whatsoever, fulfillment of or compliance with any provision
hereof or of any of such documents at the time performance of such provision
shall be due or at any other time shall involve exceeding the amount permitted
to be contracted for, taken, reserved, charged or received by the Agent or any
Bank under applicable usury law, then, ipso facto, the obligation to be
---- -----
fulfilled or complied with shall be reduced to the limit prescribed by such
applicable usury law, and if, from any such circumstance, the Agent or any
Bank shall ever receive interest or anything which might be deemed interest
under applicable law which would exceed the Highest Lawful Rate, such amount
which would be excessive interest shall be applied to the reduction of the
principal amount owing on account of such Bank's Note or the amounts owing on
other obligations of the Borrower to the Agent or any Bank under any Loan
Document and not to the payment of interest, or if such excessive interest
exceeds the unpaid principal balance of any Note and the amounts owing on
other obligations of the Borrower to the Agent or any Bank under any Loan
Document, as the case may be, such excess shall be refunded to the Borrower.
All sums paid or agreed to be paid to the Agent or any Bank for the use,
forbearance, or detention of the indebtedness of the Borrower to the Agent or
any Bank shall, to the extent permitted by applicable law, be amortized,
prorated, allocated, and spread throughout the full term of such indebtedness
until payment in full of the principal (including the period of any renewal or
extension thereof) so that the interest on account of such indebtedness shall
not exceed the Highest Lawful Rate. Notwithstanding anything to the contrary
contained in any Loan Document, it is understood and agreed that if at any
time the rate of interest which accrues on the outstanding principal balance
of any Note shall exceed the Highest Lawful Rate, the rate of interest which
accrues on the outstanding principal balance of any Note shall be limited to
the Highest Lawful Rate, but any subsequent reductions in the rate of interest
which accrues on the outstanding principal balance of any Note shall not
reduce the rate of interest which accrues on the outstanding principal balance
of any Note below the Highest Lawful Rate until the total amount of interest
accrued on the outstanding principal balance of any Note equals the amount of
interest which would have accrued if such interest rate had at all times been
in effect. The terms and provisions of this Section 10.09 shall control and
-------------
supersede every other provision of all Loan Documents.
(b) The Banks and the Borrower agree that (i) if Article 1.04,
Subtitle 1, Title 79 of the Revised Civil Statutes of Texas, 1925, as amended,
is applicable to the determination of the Highest Lawful Rate, the indicated
rate ceiling computed from time to time pursuant to Section (a) of such
Article shall apply, provided that, to the extent permitted by such Article,
--------
the Agent may from time to time by notice to the Borrower revise the election
of such interest rate ceiling as such ceiling affects the then current or
future balances of the Advances; and (ii) the provisions of Chapter 15 of
Subtitle 3, Title 79, of the Revised Civil Statutes of Texas, 1925, as
amended, shall not apply to this Agreement or any Note.
SECTION 10.10. Severability. In case any one or more of the
------------
provisions contained in any Loan Document to which the Borrower is a party or
in any instrument contemplated thereby, or any application thereof, shall be
invalid, illegal, or unenforceable in any respect, the validity, legality, and
enforceability of the remaining provisions contained therein, and any other
application thereof, shall not in any way be affected or impaired thereby.
Each covenant contained in any Loan Document to which the Borrower is a party
shall be construed (absent an express contrary provision herein) as being
independent of each other covenant contained therein, and compliance with any
one covenant shall not (absent such an express contrary provision) be deemed
to excuse compliance with one or more other covenants.
SECTION 10.11. Governing Law. This Agreement and the Notes
-------------
shall be governed by, and construed in accordance with, the laws of the State
of Texas.
SECTION 10.12. SUBMISSION TO JURISDICTION; WAIVERS. THE
-------------------------------------
BORROWER IRREVOCABLY AND UNCONDITIONALLY:
(a) SUBMITS FOR ITSELF AND ITS PROPERTY IN ANY LEGAL ACTION OR
PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT OR FOR
RECOGNITION AND ENFORCEMENT OF ANY JUDGMENT IN RESPECT THEREOF, TO THE
NON-EXCLUSIVE GENERAL JURISDICTION OF THE COURTS OF THE STATE OF TEXAS, THE
COURTS OF THE UNITED STATES OF AMERICA FOR THE SOUTHERN DISTRICT OF TEXAS, AND
APPELLATE COURTS FROM ANY THEREOF;
(b) WAIVES ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO
THE VENUE OF ANY SUCH ACTION OR PROCEEDING IN ANY SUCH COURT IN XXXXXX COUNTY,
TEXAS, OR THAT SUCH PROCEEDING WAS BROUGHT IN AN INCONVENIENT COURT AND AGREES
NOT TO PLEAD OR CLAIM THE SAME;
(c) AGREES THAT SERVICE OF PROCESS IN ANY SUCH LEGAL ACTION OR
PROCEEDING MAY BE EFFECTED BY MAILING OF A COPY THEREOF (BY REGISTERED OR
CERTIFIED MAIL OR ANY SUBSTANTIALLY SIMILAR FORM OF MAIL, POSTAGE PREPAID) TO
ITS ADDRESS SET FORTH IN SECTION 10.02 HEREOF OR TO SUCH OTHER ADDRESS OF
WHICH THE OTHER PARTIES HERETO SHALL HAVE BEEN NOTIFIED IN WRITING BY THE
BORROWER PURSUANT TO SECTION 10.02.
SECTION 10.13. Execution in Counterparts. This Agreement may be
-------------------------
executed in any number of counterparts and by different parties hereto in
separate counterparts, each of which when so executed shall be deemed to be an
original and all of which taken together shall constitute one and the same
agreement.
SECTION 10.14. Liability of Borrower. With respect to the
---------------------
incurrence of certain liabilities hereunder and the making of certain
agreements by the Borrower as herein stated, such incurrence of liabilities
and such agreements shall be binding upon the Borrower only as a trust formed
under the Texas Real Estate Investment Trust Act pursuant to that certain
Restated Declaration of Trust dated March 23, 1988 (as it is amended from time
to time), and only upon the assets of such Borrower. No Trust Manager or
officer or holder of any beneficial interest in the Borrower shall have any
personal liability for the payment of any indebtedness or other liabilities
incurred by the Borrower hereunder or for the performance of any agreements
made by the Borrower hereunder, nor for any other act, omission or obligation
incurred by the Borrower or the Trust Managers except, in the case of a Trust
Manager, any liability arising from his own willful misfeasance or malfeasance
or gross negligence.
SECTION 10.15. FINAL AGREEMENT. THIS WRITTEN AGREEMENT, THE
---------------
GUARANTY, THE NOTES AND THE LETTERS OF CREDIT REPRESENT THE FINAL AGREEMENT
BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO
UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed by their respective officers thereunto duly authorized, as of the
date first above written.
XXXXXXXXXX REALTY INVESTORS,
Borrower
By: /S/ XXXX XXXXXXXXX
Xxxx Xxxxxxxxx
Title: Executive VP/CFO
______________________________
Commitment: $60,000,000 TEXAS COMMERCE BANK
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NATIONAL ASSOCIATION,
in its individual capacity and as Agent
By: /S/ CATERHINE X. XXXXXX
Xxxxxxxxx X. Xxxxxx
Title: Managing Director and Senior
______________________________
Vice President
______________________________
Address: NATIONSBANK OF TEXAS, N.A., as
-------
000 Xxxxxxxxx, 0xx Xxxxx Documentary Agent, and as a Bank
Xxxxxxx, Xxxxx 00000
Attention: Real Estate Loan Administration
By: /S/ XXXXXXX XXXXXXX
Xxxxxxx Xxxxxxx
Commitment: $60,000,000 Title: Senior Vice President
--------- ______________________________
Address: COMMERZBANK, A.G., as Co-Agent, and
-------
as a Bank
0000 Xxxxxxxxx Xxxxxx, X.X.
Xxxxx 0000
Xxxxxxx, Xxxxxxx 00000 By: /S/ X. XXXXXX /S/ X. XXXXXXX
X. Xxxxxx X. Xxxxxxx
Title: Sen. Vice President Vice President
Commitment: $40,000,000
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Address: SIGNET BANK
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0000 Xxxxxxxx Xxxx
0xx Xxxxx
Xxxxx Xxxxxx, Xxxxxxxx 00000
By: /S/ XXXX XXXXXXXX
Xxxx Xxxxxxxx
Commitment: $ 25,000,000 Title: Senior Vice President
-----------
Address: THE SUMITOMO BANK, LIMITED
-------
000 Xxxxx Xxxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxx Xxxxxxxxx By:
Title: Joint General Manager
Commitment: $15,000,000
----------
